WEBVTT - American Airlines Plane Collision; Fed Decision Reaction 0:00:00.040 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.280 --> 0:00:31.160 In the middle nineteen sixties, if you say I want 0:00:31.200 --> 0:00:33.879 to fly, you fly. I don't know if he had. 0:00:33.840 --> 0:00:34.800 A paper root of what. 0:00:35.520 --> 0:00:40.120 Richard Levy is a legend folks, multi decades with American airlines, 0:00:40.159 --> 0:00:42.960 and won't bore you with a resume other than to 0:00:43.080 --> 0:00:47.680 say he soloed on his sixteenth birthday. What was that like, 0:00:48.080 --> 0:00:51.200 Captain Levy? What was it like to be sixteen years 0:00:51.240 --> 0:00:53.440 old and there's nobody helping you. 0:00:54.880 --> 0:00:58.040 Well, let's say I was rady at fourteen, but fro 0:00:58.120 --> 0:01:01.639 Devishu Reduation said wait till my sixteenth birthday. 0:01:02.120 --> 0:01:06.080 So my instructor and I trained and trained and trained. 0:01:06.120 --> 0:01:08.520 I was ready a lot earlier, but we waited to 0:01:08.600 --> 0:01:11.920 the sixteenth birthday to comply with federal regulations. 0:01:11.959 --> 0:01:15.679 And then the newspaper was there in Houston. They covered me. 0:01:15.760 --> 0:01:17.640 It was very flattering, but it was fun to fly 0:01:17.760 --> 0:01:18.320 by myself. 0:01:18.480 --> 0:01:23.480 You encapsulate the romance of aviation in America. It is 0:01:23.640 --> 0:01:27.640 shattered this morning. Not did you see this coming, but 0:01:28.319 --> 0:01:31.000 all of the talk is was alluded to Captain Levy 0:01:31.000 --> 0:01:36.480 and the press conference the near missus our interior confidence 0:01:37.080 --> 0:01:42.040 in LAX or DFW or the others. Is it shattered 0:01:42.040 --> 0:01:44.760 this morning our confidence in aviation? 0:01:45.920 --> 0:01:50.400 No, I don't think so. Is this sad and regretful? 0:01:50.520 --> 0:01:54.040 Of course it is for the families of the deceased 0:01:54.200 --> 0:01:58.040 on both sides. The PSA regional airplane, by the way, 0:01:58.360 --> 0:02:02.760 this was a PSA regional aircraft operator on behalf of 0:02:02.800 --> 0:02:06.720 America Airlines, but the flight crew were not part of 0:02:06.760 --> 0:02:11.839 the American Airlines. Pilots itself, zero training from American Airlines. Yes, 0:02:11.880 --> 0:02:14.400 it had an American on its flight number. Every major 0:02:14.480 --> 0:02:17.560 airline in the US, not every, but majority have regional 0:02:17.600 --> 0:02:21.440 airlines feeding them in the smaller cities around the United 0:02:21.440 --> 0:02:27.840 States networks very successfully. In any event, this mid air 0:02:27.880 --> 0:02:34.240 collision here between THESA aircraft, the CRJA seven hundred and 0:02:34.320 --> 0:02:38.919 the Army black Hawk helicopter is very regretful and we're 0:02:38.919 --> 0:02:39.720 going to learn. 0:02:39.520 --> 0:02:41.799 From it, and I have some information to talk to 0:02:41.840 --> 0:02:42.400 you about that. 0:02:42.600 --> 0:02:46.080 But it is, as you know, very very early, but 0:02:46.240 --> 0:02:48.680 some evidence has already started to show up. 0:02:48.760 --> 0:02:52.919 Right now, Captain Levy, how do you view the US 0:02:53.120 --> 0:02:57.440 commercial airspace these days in terms of air traffic controllers, 0:02:57.800 --> 0:03:03.920 technology deployed. Is this airspace overcrowded? Is it well or 0:03:04.000 --> 0:03:05.720 is it well kind of managed? 0:03:05.760 --> 0:03:09.440 You believe very well managed extreme olne. 0:03:09.480 --> 0:03:12.960 I've flown the world, not every single airport, of course, 0:03:13.200 --> 0:03:17.240 but the majority of the major ones in Europe, Russia, China, 0:03:17.400 --> 0:03:21.919 of course, all over the United States and Asia. And 0:03:22.000 --> 0:03:25.360 the airports in the United States, whether it's JFK, whether 0:03:25.400 --> 0:03:30.160 it's DFW you mentioned Chicago, heroes based there thirty five years, 0:03:30.200 --> 0:03:34.880 magnificently manage and run. But it's a two way process there. 0:03:35.120 --> 0:03:37.760 You have the air traffic controllers on the radar as 0:03:37.800 --> 0:03:40.720 you approach or depart the airport, and then what we 0:03:40.800 --> 0:03:42.320 call the local controllers, the. 0:03:42.320 --> 0:03:43.760 Control tower people. 0:03:44.120 --> 0:03:47.080 And they're often working with good weather like it was 0:03:47.240 --> 0:03:51.560 last night at four nine pm Eastern time. It's a 0:03:51.680 --> 0:03:55.600 C and B CEN and so we can talk about that. 0:03:56.120 --> 0:04:02.400 But the PSA was brought into the airport normally safely, correctly. 0:04:03.120 --> 0:04:06.119 We're going to be focusing on this army helicopter, which 0:04:06.120 --> 0:04:07.120 we can talk about. 0:04:07.440 --> 0:04:10.640 One of the changes here is, for example, Reagan going 0:04:11.280 --> 0:04:16.320 from fifteen million passengers to twenty five million passengers in London, 0:04:16.360 --> 0:04:19.920 the talk of the congested one run way Gatwick. I 0:04:19.960 --> 0:04:23.880 hear that Munich is terribly congested. I'm sure Captain Richard Leavy, 0:04:23.960 --> 0:04:28.159 you know many other airports just as congested. Are we 0:04:28.320 --> 0:04:32.920 pushing in terms of not in my backyard, not building airports? 0:04:33.640 --> 0:04:39.200 Are we pushing the envelope on crowded in modern commercial aviation? 0:04:40.480 --> 0:04:42.680 In my opinion, not a bit, by the way, speak 0:04:42.760 --> 0:04:43.200 of Munich. 0:04:43.240 --> 0:04:45.560 I made the first landing at the new Munich Airport 0:04:45.560 --> 0:04:48.600 in the nineties from the United States, great airport over there, 0:04:48.680 --> 0:04:52.680 great air traffic controllers and all over Germany. But back 0:04:52.680 --> 0:04:57.200 to the US answer question, we're not pressing the envelope, 0:04:57.200 --> 0:05:02.200 as we say in aviation whatsoever, because as we every 0:05:02.200 --> 0:05:05.520 one of us know, if we're approaching an airport and 0:05:05.640 --> 0:05:09.279 there's a big event, a football event, a baseball event, 0:05:09.680 --> 0:05:11.960 a rock star is there, there's gonna be a lot 0:05:12.000 --> 0:05:15.680 of extra traffic. So what they do is one or 0:05:15.680 --> 0:05:18.680 two things. Either we go into a holding pattern, or 0:05:18.920 --> 0:05:22.560 to be more energy efficient, they hold you. There's a 0:05:22.600 --> 0:05:26.040 ground stop, you don't take off to go to the destination. 0:05:26.480 --> 0:05:29.560 Say weather has gone through Chicago. I told you I 0:05:29.600 --> 0:05:33.480 lived up there. A big snowstorm has covered the airport is. 0:05:33.480 --> 0:05:36.600 Cleared out, the runways are clear. They're a goingst base. 0:05:36.640 --> 0:05:40.560 The airplane airplanes ten to twenty miles apart. But back 0:05:40.600 --> 0:05:45.440 to last night, we have the PSAJ seven approach to 0:05:45.520 --> 0:05:50.520 run Away zero one, and then they were asked could 0:05:50.560 --> 0:05:53.880 they swing over? Could they alter their approach and make 0:05:53.920 --> 0:05:55.960 a visual approach. 0:05:55.560 --> 0:05:56.800 To run Away three to three? 0:05:57.240 --> 0:06:02.080 Nothing unsafe about that, has nothing to do traffic coggestion whatsoever. 0:06:02.279 --> 0:06:02.960 Captain Levy. 0:06:03.839 --> 0:06:07.000 When a military aircraft is in commercial space, it's the 0:06:07.240 --> 0:06:10.719 commercial air traffic controllers that have authority. Right, that's not 0:06:10.760 --> 0:06:13.640 a military I mean they're treated like any other aircraft 0:06:13.680 --> 0:06:14.320 in the space. 0:06:14.440 --> 0:06:17.600 Correct, Correct, So there you go. 0:06:17.680 --> 0:06:19.440 I mean, so there's gonna be some issues there atom. 0:06:19.520 --> 0:06:22.440 I think one final question, Captain Levy. And you know, 0:06:22.520 --> 0:06:26.400 I remember the day when Ronald Reagan, I'm going to 0:06:26.440 --> 0:06:29.279 say this is an amateur, sir, broke the Union of 0:06:29.320 --> 0:06:34.520 Air Traffic Controllers. A lot of the reporting, including Sydney 0:06:34.520 --> 0:06:37.159 Ember in the Times, they have a grid out of 0:06:37.200 --> 0:06:41.480 the new workload of air traffic controllers ten years ago. 0:06:41.560 --> 0:06:44.800 I mean you're a more ancient Levy was a Kiddihawk. 0:06:44.560 --> 0:06:49.240 Yes, Richard Levy, Richard Levy ten years ago or fifteen 0:06:49.320 --> 0:06:52.479 years ago, did you have more confidence that the air 0:06:52.520 --> 0:06:54.680 traffic controllers weren't fatigued? 0:06:55.960 --> 0:06:59.560 No, I had no Komba concerned about air traffic controllers. 0:07:00.160 --> 0:07:02.160 Yes, that was also my vintage. 0:07:02.160 --> 0:07:06.760 And one my neighbor in Chicago in the suburbs was 0:07:06.800 --> 0:07:11.920 an Air Force controller I remember, and he was brought 0:07:12.160 --> 0:07:16.280 from the Air Force to Chicago hair sharpest eye on 0:07:16.320 --> 0:07:19.520 the planet, and I had no qualm or concern they 0:07:19.520 --> 0:07:22.920 didn't have extra spacing for back. 0:07:22.960 --> 0:07:28.680 Then one final question, captain, can you bring back the seveneven. 0:07:29.280 --> 0:07:30.560 I'd love to bring it back? 0:07:30.760 --> 0:07:30.920 Man. 0:07:31.480 --> 0:07:34.640 When you all mentioned one comment and then I'll let 0:07:34.720 --> 0:07:40.000 you go. Please, technology that's going to be an issue 0:07:40.040 --> 0:07:43.480 in this accident. That again, the PSA was asked, could 0:07:43.520 --> 0:07:48.280 you turned right and quite what we call visual approach 0:07:48.400 --> 0:07:50.960 very safe to runway three to three? They said yes, 0:07:51.080 --> 0:07:53.920 for that size of the airplane, not a problem at all. 0:07:54.360 --> 0:07:57.040 Then you had the Army black Hawk heliculture, which is 0:07:57.080 --> 0:07:59.680 on a training mission going to the Potomac River training 0:07:59.680 --> 0:08:03.440 mission does not mean there amateurs whatsoever. There are pros 0:08:03.520 --> 0:08:05.960 or good as they come. You have an instructor pilot 0:08:06.040 --> 0:08:09.000 most likely I'm an air Force type guy. And then you 0:08:09.160 --> 0:08:12.800 have somebody who is upgrading to whatever they call it, 0:08:12.800 --> 0:08:17.120 an army aircraft commander perhaps in any event, so the 0:08:17.160 --> 0:08:20.400 people say it's descending, and there's we have equipment on 0:08:20.520 --> 0:08:24.480 the aircraft on all commercial aircraft operator Part one twenty 0:08:24.520 --> 0:08:28.880 one of the Federal Avish regulations called TCASS Traffic Collision 0:08:29.040 --> 0:08:32.640 of Audience System, and it's an audio that says traffic 0:08:32.760 --> 0:08:36.120 traffic and as you get closer, it says climb, climb 0:08:36.600 --> 0:08:39.800 or descend descend. Well, why wouldn't that be going off 0:08:40.040 --> 0:08:42.720 because you're so close to the grounds, So that is 0:08:42.920 --> 0:08:44.880 it's blanking out as you get close to the ground. 0:08:45.040 --> 0:08:47.520 We've talked to Robert Crandell over the years here at 0:08:47.520 --> 0:08:50.480 Bloomberg Surveillance, Sir, and what's great honor to speak to 0:08:50.520 --> 0:08:56.079 you today, Captain Richard at Levy forty years with American Airlines. 0:09:01.440 --> 0:09:04.960 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:09:05.080 --> 0:09:08.240 weekday afternoons from seven to ten am. Eastern Listen on 0:09:08.320 --> 0:09:12.000 Applecarplay and Android Otto with the Bloomberg Business app, or 0:09:12.160 --> 0:09:13.800 watch us live on YouTube. 0:09:14.440 --> 0:09:17.200 At two am, three am, we were piecing together the 0:09:17.280 --> 0:09:20.800 show and it was a group resounding call of team surveillance. 0:09:21.280 --> 0:09:24.280 Can we get George Ferguson on. It's not just his 0:09:24.400 --> 0:09:29.040 knowledge of aviation, and we had Captain Richard Levion who's 0:09:29.240 --> 0:09:33.320 a pilot and incredibly experience. George Ferguson is the one 0:09:33.360 --> 0:09:37.840 that pieces the industry together for us. George, where is 0:09:37.920 --> 0:09:42.920 the aviation industry in America in a year? In two 0:09:43.040 --> 0:09:46.760 years after this tragedy, I. 0:09:47.480 --> 0:09:51.080 Think the aviation industry has been you know, has been 0:09:51.480 --> 0:09:54.280 much safer than it had been in the past, right 0:09:54.360 --> 0:09:58.040 and so I think that safety record continues. I mean, 0:09:58.559 --> 0:10:00.839 you know, we're all sad in the see the event 0:10:00.880 --> 0:10:05.079 that just happened, the crash. Unfortunately, you know, from time 0:10:05.120 --> 0:10:07.679 to time they happen, but it's much safer than it 0:10:07.760 --> 0:10:11.080 was decades ago. Right now, I think we're going through 0:10:11.240 --> 0:10:14.160 a phase and aviation as we're going through in other 0:10:14.240 --> 0:10:19.120 industries where there's a generational turnover in the labor in 0:10:19.120 --> 0:10:21.520 the business, and so there has to be a bunch 0:10:21.559 --> 0:10:24.720 of training and I think you know that's that training 0:10:24.800 --> 0:10:28.760 is critical to maintain safety. I'm worried that there may 0:10:28.760 --> 0:10:31.360 be you know, maybe the black Hawk pilot was in 0:10:31.400 --> 0:10:33.600 the midst of a training flight around a very busy 0:10:33.640 --> 0:10:36.760 airport and didn't you know, pay attention to all the 0:10:36.880 --> 0:10:40.560 ques from ATC. But again, I think, you know, the 0:10:40.600 --> 0:10:44.560 future of aviation is all about training, strong training, and 0:10:44.600 --> 0:10:47.839 building in that safety culture. And you know, I think 0:10:47.840 --> 0:10:51.160 we've got to pay you know, very high attention to 0:10:51.240 --> 0:10:53.959 it right now, given this generational change. But I think 0:10:54.000 --> 0:10:55.480 it continues to get better from here. 0:10:55.559 --> 0:10:57.560 Chres Paul and I were talking about this. I mean, 0:10:57.600 --> 0:11:00.280 there's a lot of reporting of near misses, you know, 0:11:00.360 --> 0:11:04.679 beautiful graphics and fancy, fancy analysis because we've got all 0:11:04.679 --> 0:11:09.200 the technology. Are there more near misses now or any 0:11:09.320 --> 0:11:11.880 old days? Did we just miss the near misses? 0:11:13.320 --> 0:11:18.680 You know, I've seen more reporting of near misses and 0:11:18.720 --> 0:11:22.440 other kinds of operations where you know, airlines, airplanes are 0:11:22.520 --> 0:11:26.199 landing on taxiways and things like that. And again I'm 0:11:26.240 --> 0:11:29.720 going to attribute it to there's a new generation coming 0:11:29.760 --> 0:11:32.960 in as we retire a bunch of baby boomers, people 0:11:33.000 --> 0:11:36.480 with less experience. There's been a lot of turnover pilot 0:11:36.559 --> 0:11:40.960 ranks ATC. We know they've been recruiting heavily because their 0:11:41.040 --> 0:11:44.760 ranks have been depleted, and so it's just critical here 0:11:44.760 --> 0:11:48.520 that we get these this next generation in trained up 0:11:48.720 --> 0:11:52.040 and you know, focused on the right safety procedures. So 0:11:52.120 --> 0:11:54.200 but I think there is more. I think there is more. 0:11:54.280 --> 0:11:56.800 Right now, Hey, George, just give us a sense. You know, 0:11:56.800 --> 0:11:59.720 from your conversations with the airlines that you cover, where 0:11:59.760 --> 0:12:02.240 are where's this country? Where's our air system in terms 0:12:02.280 --> 0:12:06.079 of air traffic controllers? Where are we in terms of where. 0:12:05.800 --> 0:12:06.600 We need to be? 0:12:06.640 --> 0:12:09.400 Do we have enough ATC folks out there or where 0:12:09.400 --> 0:12:10.440 are we now? 0:12:10.520 --> 0:12:12.880 I mean, no, we know we have shortages, right, we 0:12:12.920 --> 0:12:16.960 know there's been challenges recruiting people into that business. You know, 0:12:17.000 --> 0:12:21.480 I still hear the airlines talk about ATC issues limiting 0:12:21.520 --> 0:12:25.000 their operations as you know, So we know we don't 0:12:25.040 --> 0:12:27.400 have enough, and you know, we know we need continue 0:12:27.440 --> 0:12:30.280 to need to recruit people into the industry. I think 0:12:30.280 --> 0:12:33.000 one of the challenges the industry has too, it's I mean, 0:12:33.120 --> 0:12:36.400 maybe it's lost some of its appeal over the years. People, 0:12:36.520 --> 0:12:38.839 you know, young kids like tech a little bit more. 0:12:39.800 --> 0:12:42.360 So we got to go out and find more folks 0:12:42.400 --> 0:12:44.800 that love aviation and pull them into the industry. Maybe 0:12:44.800 --> 0:12:47.240 work a little harder to get folks to recruit people 0:12:47.280 --> 0:12:50.520 into the industry because maybe it isn't as exciting as 0:12:50.520 --> 0:12:52.720 it used to be. But that's a challenge. 0:12:52.720 --> 0:12:55.320 And how do the commercial airliners, how do they typically 0:12:55.320 --> 0:12:59.480 feel about operating in areas where there's military aircraft. I would, again, 0:12:59.760 --> 0:13:03.960 as we just saw today, I'm guessing that it just increases, 0:13:04.400 --> 0:13:08.319 you know, just some of the tensions of operating. 0:13:09.200 --> 0:13:09.600 It does. 0:13:09.720 --> 0:13:12.920 Right, So, you know Reagan right downtown there in DC. 0:13:13.800 --> 0:13:17.320 The convenience of that airport, it's huge, as anybody knows, it's. 0:13:17.240 --> 0:13:17.800 Falling into that. 0:13:18.440 --> 0:13:21.680 But you know, it's the nation's capital, so you're always 0:13:21.720 --> 0:13:25.360 going to have a fair amount of military activity around there, 0:13:26.280 --> 0:13:29.440 you know, just trying to protect the nation's capital. And 0:13:29.480 --> 0:13:33.360 so I mean to have to have blackhawks flying around 0:13:33.440 --> 0:13:37.400 the approach end of an airport, though, is extremely risky. 0:13:37.640 --> 0:13:40.000 I wonder if people don't revisit that. And to have 0:13:40.040 --> 0:13:43.520 a training flight around the approach end of Reagan at 0:13:43.559 --> 0:13:46.720 a busy time, busy evening is really difficult, right, So 0:13:47.960 --> 0:13:49.160 what we need to think about. 0:13:49.120 --> 0:13:52.120 George, the critics here, and you know I'm not one 0:13:52.160 --> 0:13:53.600 of me. I don't think Paul is. I don't think we're 0:13:53.679 --> 0:13:58.240 qualified to be critics. Well, sometimes take our air traffic 0:13:58.320 --> 0:14:03.840 controller fatigue and daffing back to nineteen eighty one when 0:14:03.920 --> 0:14:07.600 President Reagan went after I'm going to generally say the union. 0:14:07.679 --> 0:14:11.400 It was thirteen thousand people at the time. Do you 0:14:11.480 --> 0:14:12.040 buy it. 0:14:13.559 --> 0:14:13.719 Now? 0:14:13.760 --> 0:14:15.320 It's been a lot of years since then, so I 0:14:15.320 --> 0:14:18.760 think we've probably fully recovered since Reagan let go all 0:14:18.760 --> 0:14:19.480 the controllers. 0:14:20.720 --> 0:14:23.800 What do we typically get controllers? Where do they recruit 0:14:23.840 --> 0:14:26.400 them from it? And why is it so difficult? 0:14:26.640 --> 0:14:27.000 Starting? 0:14:27.160 --> 0:14:30.200 Yeah, why is it so difficult? It seems like I 0:14:30.200 --> 0:14:32.320 don't know the pay is there, it's kind of exciting. 0:14:32.320 --> 0:14:35.840 I know it's stressful, But where do they typically get recruits? 0:14:36.800 --> 0:14:39.520 I mean, I guess people who love aviation, don't want 0:14:39.520 --> 0:14:40.880 to be a pilot, maybe want to sleep in their 0:14:40.920 --> 0:14:43.560 own own bed every night, become a controller. But you 0:14:43.600 --> 0:14:47.520 can imagine it's a really difficult job, right, You've got 0:14:47.560 --> 0:14:50.040 a lot of lives on your hands. You're again, if 0:14:50.080 --> 0:14:54.560 you're controlling at an air airport like Reagan, Newark, LaGuardia, 0:14:55.560 --> 0:14:57.560 there's a lot of things going on, So you better 0:14:57.600 --> 0:15:02.880 be better be top of your game. And look, during 0:15:02.880 --> 0:15:05.800 the pandemic, you know, remember we were all sort of 0:15:06.120 --> 0:15:08.680 you know, those of us in business in the sorry 0:15:08.680 --> 0:15:11.680 of the office world. You know we were we weren't 0:15:11.680 --> 0:15:13.560 even going to the offices anymore, right, we were waking 0:15:13.640 --> 0:15:17.000 up at six point thirty, turn around computer on at seven. 0:15:17.440 --> 0:15:19.640 You don't get that. In the air traffic control business. 0:15:19.640 --> 0:15:22.160 You get a chance to do some late night shifts 0:15:22.400 --> 0:15:25.120 and you're tired, and you're trying to bring airplanes in 0:15:25.160 --> 0:15:28.480 for landing and keep everybody separated. I think it's a 0:15:28.560 --> 0:15:30.880 challenging job, right, and that's one of the reasons why 0:15:31.360 --> 0:15:33.480 it may not appeal to everybody. 0:15:33.600 --> 0:15:37.359 George, you're expert. I guess DFW is the size of Luxembourg. 0:15:37.440 --> 0:15:41.119 And you mentioned Paul earlier Denver. We went from Stapleton 0:15:41.200 --> 0:15:45.920 out to the beautiful airport in Denver, Salt Lake City 0:15:45.960 --> 0:15:49.040 building a palace, Kansas City building a palace. Do we 0:15:49.080 --> 0:15:51.360 need more airports? Do we need more gates? 0:15:51.840 --> 0:15:55.560 George Ferguson, Well, look, I'm going to say that the 0:15:55.760 --> 0:15:58.720 challenge is that you know, some of those key key 0:15:58.800 --> 0:16:03.760 airports in the country you can't replace well, right, Laguardiah 0:16:04.680 --> 0:16:08.120 Reagan because of their downtown proximity. Even if you have 0:16:08.240 --> 0:16:11.560 more airports, there's capacity at Dullest to put airplanes into, 0:16:12.760 --> 0:16:15.920 you know, but nobody wants to. Nobody wants to take 0:16:15.920 --> 0:16:19.880 the trip in from Dulles to d C. So I 0:16:19.880 --> 0:16:22.160 don't think this is a we don't have enough airport, 0:16:23.040 --> 0:16:25.400 you know issue. Again, I think this is the it's 0:16:25.440 --> 0:16:29.960 a black Hawk training flight around an extremely busy airport. ATC, 0:16:30.640 --> 0:16:33.800 it sounds like they moved the they. 0:16:33.000 --> 0:16:36.680 Moved the runway to thirty three, the shorter runway up 0:16:36.720 --> 0:16:38.640 to them the White House. 0:16:39.280 --> 0:16:41.240 And so if you're that Blackhawk pilot and you weren't 0:16:41.240 --> 0:16:45.280 paying attention and ATC said hey Blackhawk, you got this CRJ. 0:16:46.840 --> 0:16:48.880 You miss on that, and you weren't expecting that airplane 0:16:48.920 --> 0:16:52.400 to come into that other runway, bad things happen. So 0:16:52.440 --> 0:16:54.040 I don't think this is an airport issue. I think 0:16:54.080 --> 0:16:59.840 this is training paying attention. The Blackhawk apparently just didn't 0:17:00.080 --> 0:17:01.680 and see what was going on. 0:17:01.880 --> 0:17:04.760 George, thank you. We look for your publication of Bloomberg 0:17:04.800 --> 0:17:09.160 Intelligence as well. Just great conversations today in this tragedy 0:17:09.240 --> 0:17:14.160 there with a guy with decades of experience in aviation. 0:17:15.000 --> 0:17:18.920 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:17:18.920 --> 0:17:21.960 starting at seven am Eastern on Apple Corplay and Android 0:17:21.960 --> 0:17:25.000 Auto with the Bloomberg Business App. You can also listen 0:17:25.080 --> 0:17:28.359 live on Amazon Alexa from our flagship New York station. 0:17:28.920 --> 0:17:31.880 Just say Alexa, play Bloomberg eleven thirty. 0:17:31.880 --> 0:17:34.439 The right person at the right time. Francis Donald, RBC 0:17:34.600 --> 0:17:38.560 Capital Markets joins our chief economist. Francis I saw a 0:17:38.600 --> 0:17:42.600 buoyant consumption, which tells me there's something that gave way. 0:17:42.800 --> 0:17:46.680 What was the week statistic in the GDP algebra? 0:17:49.040 --> 0:17:51.879 Oh well, excuse me. We've got a little decline in 0:17:52.040 --> 0:17:55.160 business investment. We got a little bit of a stagnation 0:17:55.440 --> 0:17:58.480 in trade activity. But nothing is a narrative change for 0:17:58.560 --> 0:18:01.360 the United States. And that's looking for when I look 0:18:01.359 --> 0:18:04.040 at data that comes through, is there's anything that's giving 0:18:04.119 --> 0:18:07.800 us a yellow flag? And right now no real yellow flags. 0:18:07.840 --> 0:18:13.639 The consumer on aggregate emphasis on aggregate is very strong, 0:18:13.800 --> 0:18:16.080 and I was told very early in my career twenty 0:18:16.119 --> 0:18:19.720 years ago, never bet against the US consumer. That advice 0:18:20.160 --> 0:18:20.760 is still true. 0:18:20.920 --> 0:18:24.440 Okay, I get it yesterday the FED level. But Canada 0:18:24.600 --> 0:18:28.960 cut rates ECB cuts rates of some flavor as well. 0:18:29.080 --> 0:18:34.000 Is the gap widening between America's prosperity and other nations struggling. 0:18:36.280 --> 0:18:38.960 It's a very wide gap. One of the best ways 0:18:38.960 --> 0:18:41.560 that you can think about that is all these central 0:18:41.560 --> 0:18:44.560 bankers are talking about their neutral rate, what is the 0:18:44.640 --> 0:18:47.160 rate that is neither tightening nor eating on the economy, 0:18:47.320 --> 0:18:51.600 And nobody else except for the US Federal Reserve is 0:18:51.600 --> 0:18:53.800 claiming that their neutral rate is much higher than it 0:18:53.880 --> 0:18:58.680 was before COVID, Canada, ECB all effectively saying their neutral 0:18:58.720 --> 0:19:01.639 rate is probably around two and a half percent. And 0:19:01.680 --> 0:19:04.080 now we have a FED that says we think that 0:19:04.240 --> 0:19:07.520 rates are above the neutral rate before percent seems okay 0:19:07.520 --> 0:19:11.040 to us. That is a huge, huge change in the 0:19:11.040 --> 0:19:14.880 way that global monetary policy operated, and I think it's 0:19:14.920 --> 0:19:17.840 being driven by massive amounts of US fiscal spending that's 0:19:17.840 --> 0:19:20.880 put a complete floor undergrowth and is creating this offset 0:19:20.920 --> 0:19:24.560 between fiscal and monetary. So as much as there was 0:19:24.600 --> 0:19:26.520 focus on the FED yesterday and we always have to 0:19:26.520 --> 0:19:29.600 write our FED write ups, I spent more time thinking 0:19:29.640 --> 0:19:33.000 about government funding freezes and what the path of fiscal 0:19:33.040 --> 0:19:35.119 is going to look like ahead, because my sense is 0:19:35.160 --> 0:19:37.159 it's the fiscal path ahead that's going to be more 0:19:37.200 --> 0:19:39.840 important for the FED than maybe even the unemployment rate 0:19:39.960 --> 0:19:40.720 or the CPI. 0:19:41.680 --> 0:19:45.160 Francis, as the chief economist for the Royal Bank of Canada, 0:19:45.280 --> 0:19:47.840 I am sure you and your colleagues have thought long 0:19:47.880 --> 0:19:51.080 and hard about tariffs and what they may mean for 0:19:51.480 --> 0:19:55.480 the economy in North America, particularly Canada, US and Mexico. 0:19:55.680 --> 0:19:58.720 Are you thinking about those because guess what February first 0:19:58.760 --> 0:20:01.640 is two days away? 0:20:01.680 --> 0:20:04.399 It is, And one of the challenges is that just 0:20:04.480 --> 0:20:07.320 about everybody wants us to give a nice round number 0:20:07.960 --> 0:20:10.959 what does this tariff policy mean for GDP or growth? 0:20:11.000 --> 0:20:15.840 But it's an extraordinarily difficult economic exercise. We still engage 0:20:15.840 --> 0:20:18.240 in it, but it's really hard, and we've actually developed 0:20:18.280 --> 0:20:21.760 infographics to try to explain just how convoluted this is. 0:20:22.040 --> 0:20:24.840 Even before a tariff lands on an economy, you tend 0:20:24.840 --> 0:20:27.880 to see things like uncertainty shocks way on business investment 0:20:28.240 --> 0:20:31.399 inventory forarding. So we were even noticing in the GDP 0:20:31.560 --> 0:20:34.960 data this morning that consumers had this big spend increase 0:20:35.040 --> 0:20:37.439 on durable goods in the United States, and we were 0:20:37.440 --> 0:20:40.400 talking amongst ourselves, is that consumers that are maybe thinking 0:20:40.400 --> 0:20:43.560 about autos and washing machines starting to become more expensive. 0:20:43.800 --> 0:20:45.960 So even before the tariff lands, you tend to see 0:20:45.960 --> 0:20:48.600 inventory hoarding. That changes your data. You got to talk 0:20:48.600 --> 0:20:50.879 about whether there's going to be retaliation, You got to 0:20:50.880 --> 0:20:54.120 talk about what secondary industries are being impacted. And then 0:20:54.240 --> 0:20:56.280 maybe some of the biggest assumptions you have to make, 0:20:56.359 --> 0:20:58.399 And this is what keeps me up at night, how 0:20:58.480 --> 0:21:01.480 are central bankers going to respond? Because while we have 0:21:01.520 --> 0:21:04.159 a good playbook, Tom, we've been talking for years. We 0:21:04.240 --> 0:21:07.600 know if inflation goes up, central banks hype, right, But 0:21:07.680 --> 0:21:10.480 what if inflation going up is a function of tariff's 0:21:10.520 --> 0:21:13.439 rising and interest rates are not going to impact that 0:21:13.520 --> 0:21:15.639 type of inflation. That's the biggest question that we have. 0:21:15.880 --> 0:21:18.640 Okay, this is really important, and Karl Weinberg and Mary 0:21:18.720 --> 0:21:22.280 Chin is publishing High Frequency Economics with the idea that 0:21:22.320 --> 0:21:24.080 it was, you know, within the mix and the soup 0:21:24.119 --> 0:21:28.960 of it a disappointing report. Was there a teriff reaction 0:21:29.880 --> 0:21:33.320 in that second look at GDP or does that await 0:21:34.160 --> 0:21:36.600 let me do the math April thirtieth, or you know, 0:21:36.680 --> 0:21:38.080 may first report. 0:21:39.520 --> 0:21:41.440 My senses will see more of that. But what I'm 0:21:41.480 --> 0:21:44.600 really looking for is the inventorious component Now, this is 0:21:44.640 --> 0:21:47.440 not something that seems very dramatic most of the time, 0:21:47.520 --> 0:21:50.040 but if we do see a lot of Americans who 0:21:50.040 --> 0:21:53.000 start thinking about, hey, prices could go up, you could 0:21:53.040 --> 0:21:56.639 actually see growth accelerate on the surface because you're going 0:21:56.680 --> 0:21:59.359 to see an acceleration in trade moving forward. So we 0:21:59.440 --> 0:22:01.240 did see that we know a little bit more about 0:22:01.240 --> 0:22:04.400 tariffs now than we did in twenty eighteen. And inventory 0:22:04.480 --> 0:22:07.720 hoarding is a real economic development that could occur within 0:22:07.760 --> 0:22:10.520 a terraff landscape. And let me just say this, it 0:22:10.520 --> 0:22:13.720 doesn't even matter if the tariff itself is implemented. We 0:22:13.800 --> 0:22:16.959 see this behavior ahead of the tariff coming through. So 0:22:17.119 --> 0:22:20.520 even all this talk, all the tweets, etc. Of tariffs 0:22:20.720 --> 0:22:23.520 is having will have an economic impact. We know that 0:22:23.560 --> 0:22:24.200 to be the case. 0:22:25.320 --> 0:22:27.639 Francis, I think we here in America we import some 0:22:27.680 --> 0:22:33.040 stuff from Canada from Mexico. What's the feeling up there 0:22:33.080 --> 0:22:36.240 in Canada today about what kind of I don't know 0:22:36.359 --> 0:22:39.560 response Canadians the Canadian government may have. 0:22:39.720 --> 0:22:42.280