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Speaker 1: member s I p C. Welcome to the Bloomberg Surveillance Podcast.
Speaker 1: I'm Tom Keene with David Gura. Daily we bring you
Speaker 1: insight from the best in economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and
Speaker 1: of course on the Bloomberg Sebastian Galley, senior currency strategist
Speaker 1: at Deutsche Bank, who joins us now here at the
Speaker 1: Pierre Hotel, Thank you very much for being here, and
Speaker 1: let's start with what we're seeing in the currency market
Speaker 1: in light of that attack yesterday. Not a whole lot
Speaker 1: of movement in the power. Let me just expand from
Speaker 1: that to say, uh, we're dealing with a lot of
Speaker 1: political risk, and when you look at the four X space,
Speaker 1: it seems like politics has been continues to be a
Speaker 1: huge driver here. Indeed it's a big driver. I think
Speaker 1: the market got used to terror attacks and would like
Speaker 1: to express my condolences to the people of England and
Speaker 1: the United Kingdom, but they have basically learned to deal
Speaker 1: with terrorism in in uh in Europe, and basic it
Speaker 1: means that it has very little impact. For example, what
Speaker 1: you could see is you could see a terror attack
Speaker 1: ahead of the French election, whether it be the first round,
Speaker 1: more probably the second round, and what we know from experiences,
Speaker 1: it will have very little impact on the actual outcome
Speaker 1: because fears does not actually lead to changes in the
Speaker 1: in voting patterns, which is somewhat reassuring. It is more
Speaker 1: anger that drives a change in voting patterns, and that
Speaker 1: may be triggered by a different events. For example, in
Speaker 1: the case of the Netherlands, we saw an incidents with
Speaker 1: Turkey which had changed the tone for a few days
Speaker 1: and then the vote for the populist group of Foil
Speaker 1: Papy essentially disappeared very quickly, and so that kind of
Speaker 1: incident could be repeated the drive and by an external
Speaker 1: factor in the French election. And it's a risk which
Speaker 1: is very hard to measure. But as we've seen in
Speaker 1: the past few elections in the West, they seem to
Speaker 1: be coming in and coming in repeatedly. The highest impact
Speaker 1: would be one to three days before the French election.
Speaker 1: That is basically anger would not have enough time to recede,
Speaker 1: and so they vote, which in this case, if it
Speaker 1: is one which is driven by anger, would then help
Speaker 1: the populist vote. After the Brexit referretum. After the US election,
Speaker 1: there was a lot of concern about polling. Let's look
Speaker 1: at the Dutch election in particular, didn't turn out the
Speaker 1: way uh many people thought it would. Perhaps polling wasn't
Speaker 1: as disadvantaged as with those other cases. But how do
Speaker 1: you rely on polling now looking ahead to the French election.
Speaker 1: In the case of polling, it depends on the country.
Speaker 1: They don't all have the same methodologies. But the French
Speaker 1: were absolutely scared by what happened both in the UK
Speaker 1: and the US. The difference in the in France is
Speaker 1: the populist party or what you could consider to be
Speaker 1: a populous party because it is a definition of the
Speaker 1: from Madame Marine. It has not historically been different in
Speaker 1: terms of outcomes in the vote versus the polls, so
Speaker 1: there's not this bias vote that people would would actually expect.
Speaker 1: What they've done is they try to improve the poly
Speaker 1: mythology as much as they could reduce this, and they
Speaker 1: use what they call rolling polls, so every day you
Speaker 1: have at least two polls coming out of France and
Speaker 1: they're very very stable. They have also what they call
Speaker 1: stratified pollings, which means it goes into the different groups
Speaker 1: such as workers, um, you know, employees, staff, CEOs, and
Speaker 1: to try to see the evolution of each single group,
Speaker 1: whether it's older or younger voters, to see if the
Speaker 1: change there is a change in the patterns. Yet journalists
Speaker 1: in France do not trust the system and then so
Speaker 1: what they've decided is in many cases to send out
Speaker 1: reporters all across France to check directly with the population,
Speaker 1: asked them questions to see if there was a change
Speaker 1: in the evolution a pattern that wouldn't maybe be mist
Speaker 1: and that would have an important impact in on the
Speaker 1: on the actual vote at the end of the day.
Speaker 1: So there's a lot of work made to try to
Speaker 1: make sure that it isn't a risk. For now, the
Speaker 1: market has decided, for many reasons, including the stratified polling,
Speaker 1: that the odds of Martin le Ben winning are extremely small.
Speaker 1: Then mccona was a very high probability of winning, and
Speaker 1: at this point that seems to be a reasonable event. Yeah,
Speaker 1: we talked about risk events, and I was listening to
Speaker 1: the hearing on Capitol Hill earlier this week with the
Speaker 1: FBI director and the n s A director and both
Speaker 1: basically said Russia had some involvement here or eagerness to
Speaker 1: be involved in the US election, and other countries having
Speaker 1: elections should stand on guard when you think of risk events,
Speaker 1: how how how big a risk event is the potential
Speaker 1: for intervention by another country like Russia. Well, I should
Speaker 1: take a neutral sensor should I should point out that
Speaker 1: Immanue mccona was actually coached by a mayor ex Mayor Bloomberg,
Speaker 1: so he received his own training. Mr Almona received the
Speaker 1: training from the ex training Treasury Secretary, And so these
Speaker 1: are already existing interventions. From my personal point of view,
Speaker 1: find it very positive. They have been uh interventions which
Speaker 1: some may have considered to be less positive. And they
Speaker 1: were the case in the Netherlands coming from Turkey at
Speaker 1: a critical time but too early to make a difference,
Speaker 1: anger in the pulse to decrease at the very fast
Speaker 1: rate um so they didn't have the the outcome that
Speaker 1: one would have expected, and therefore there would be a
Speaker 1: change if if a nondesirable intervention should happen. What are
Speaker 1: the odds of interventions in France? If you look at
Speaker 1: the different articles or ways that information is transmitted by
Speaker 1: foreign agents into the French press, there are several of them.
Speaker 1: They have been very critical of Monsieur Emmanuel Macon. They
Speaker 1: have been generally very supportive of Marie Lepine as well
Speaker 1: as a general called Melach. The reason why they would
Speaker 1: support Mila Schon, who's a far right supporter who's doing
Speaker 1: quite well, is because a percentage of the vote of
Speaker 1: Mr Mino Chan would have a certain probability of actually
Speaker 1: voting for Marie Lepin in the second round. These are
Speaker 1: worker type um the odds and the polls suggests this
Speaker 1: is far less than and then these people seem to think,
Speaker 1: but they are basically been pushing for for these two candidates.
Speaker 1: At this point in time, it looks like they've abandoned Filon,
Speaker 1: who's too low in the polling. So and Fillon also
Speaker 1: has changed his stands relative to Russia and has become
Speaker 1: much less per Russian than he once was. He was
Speaker 1: accused once by Mr of drinking excessive amounts of vodka,
Speaker 1: which was a reference to his very close ties to
Speaker 1: Russia at the time, and since then he has a
Speaker 1: distance himself considerably, a process which may continual for other candidates.
Speaker 1: Let me pivot a little bit here to talk about
Speaker 1: the Chinese currency you mentioned before we got started here.
Speaker 1: A pivotal moment coming up here for the I m F,
Speaker 1: which is placed the REAMINNB in the special drawing basket
Speaker 1: that the IMF has. What are we gonna learn over
Speaker 1: these next coming days. Indeed, they has been added to
Speaker 1: the SCR, which is the official currency used by the IMF,
Speaker 1: by the b I S, by the World Bank, and
Speaker 1: also Jordan and to some extent to Libya. So it
Speaker 1: is actually a relevant currency, it's a non a negigible one.
Speaker 1: But what we will learn at the end of the
Speaker 1: months it's not about the SDR, but about the amount
Speaker 1: of reserves in the m m B, c n Y
Speaker 1: or CNH that is being held by foreign reserves as
Speaker 1: part of what we call the I m F coffer.
Speaker 1: And this is a great mystery because nobody knows how
Speaker 1: much the money has been invested by foreign reserves into
Speaker 1: the HIMMB. It might be in the order of two percent.
Speaker 1: We will know exactly how much it is but I
Speaker 1: think it's people. It is something that a lot of
Speaker 1: people are starting to pay a strong amount of attention to.
Speaker 1: It tells you how much of a competitor to the
Speaker 1: dollar it is. The answer is is very much not one.
Speaker 1: But the the Chinese have been preparing the way for
Speaker 1: the in the next decades to be a serious competitor
Speaker 1: both to the yuro and the dollar. That process will
Speaker 1: take many years. For now that amm B is overvalued
Speaker 1: and should actually devalue, but they count afford this process
Speaker 1: right now. But in a horizon of ten, fifteen to
Speaker 1: twenty years, you'll see that the REMAINB becomes a much
Speaker 1: more used as a currency. There are f X swaps
Speaker 1: lines between the p bo s and many different central banks,
Speaker 1: and as they go through that process, Uh, the chinesely
Speaker 1: maybe should be a much more ordinary currency used internationally,
Speaker 1: including as part of foreign reserves. So they do not
Speaker 1: really fit the criteria whatever the I m F said
Speaker 1: to be a foreign reserves at this point in time.
Speaker 1: They will eventually, and they will do very well. We
Speaker 1: saw this infusion of capital by the PBOs yesterday and
Speaker 1: indeed in the two days before that as well. Uh,
Speaker 1: And there wasn't a whole lot of transparency from the
Speaker 1: PBOC about what it was doing when it comes to
Speaker 1: currency generally, is the Chinese government talking more about it?
Speaker 1: We just had the National People's Congress in Beijing. Uh.
Speaker 1: Is currency something they're keen or to talk about now
Speaker 1: than they used to be. From all the information that
Speaker 1: we have is they are very keen not to talk
Speaker 1: about the currency. Of The key problem that they have
Speaker 1: is one is a link to financial stability. If they
Speaker 1: let the currency go, it might be unhelpful for financial stability.
Speaker 1: On one side. Number two, there is a big negotiation
Speaker 1: process happening right now between many countries in the world
Speaker 1: and the United States. The United States is complaining, in
Speaker 1: part quite correctly so, that it's currency is overvalue, and
Speaker 1: it's overvalued because on the cyclical side, the US is
Speaker 1: doing well, but also for because many central banks around
Speaker 1: the world have taken excessive measures to weaken their currencies.
Speaker 1: That includes the PDOC, but it also includes the ECB
Speaker 1: and the b o J. And as these negotiations happen
Speaker 1: in the background, and you should forget a lot of
Speaker 1: the noise, which sometimes can be quite disturbing. But there
Speaker 1: are professionals in the background doing their work. It seems
Speaker 1: that there's a play at work in which the center
Speaker 1: banks are going to tighten at the measure which fits
Speaker 1: basically their mandates, which will help their currencies. To appreciate
Speaker 1: that maybe that I maybe used to some extent, but
Speaker 1: it also means that the euro would go higher. The
Speaker 1: coffee is hot, the weather is called tom Keane. It's
Speaker 1: it's like Rochester, New York. You know, there's winter, more winter.
Speaker 1: In the fourth of July, were inshing ahead, pushing ahead
Speaker 1: of the weekend. Saturday is supposed to be a little
Speaker 1: nicer here in New York. Remarkable, folks. I was just
Speaker 1: over at our world headquarters of course, doing our television
Speaker 1: show and David for a radio audience. Just remarkable, uh,
Speaker 1: this morning to see Prime Minister May speak and then
Speaker 1: a very somber Mr Corbyn in black black tie and
Speaker 1: a white shirt, and of course a packed house of
Speaker 1: Commons in the moment where the speaker turned to the
Speaker 1: French Foreign Minister in the upper gallery at the House
Speaker 1: of Commons was really quite really, quite something to observe.
Speaker 1: Truly a terrible event yesterday, and as you pointed out
Speaker 1: on the TV program, the nationalities of those who were
Speaker 1: killed yesterday varied incredibly very including three French students and
Speaker 1: in one American. We should point out there's a lot
Speaker 1: we don't know right now. We're learning a little more,
Speaker 1: but of course we'll have coverage on that through the day.
Speaker 1: We're here with Sebastian Galley. He's a senior currency strategy
Speaker 1: a Deutsche Bank, kind of enough to to be with
Speaker 1: us here at the Pier Hotel. We were talking about Europe,
Speaker 1: talking about the French elections. Let's talk about North America
Speaker 1: for a little while here. I'm sure that you're watching
Speaker 1: what's playing out in Washington, and I wonder the degree
Speaker 1: which you think that's going to portend something for tax reform. Uh,
Speaker 1: you're looking at the dollar, Luna, say, how do you
Speaker 1: factor all of that in for some French So the
Speaker 1: families in Concano, which must be hurting at this point
Speaker 1: in time, But looking forward at the taxes, there's been
Speaker 1: some difficulties basically and the aministration to to pass the law.
Speaker 1: So we expect that this night there actually will be
Speaker 1: a vote, so a little continued Senate so it continues
Speaker 1: its normal process. I think the market was very frightened
Speaker 1: that this administration was relatively weak and that it could
Speaker 1: really not when it rarely mattered, put some political way
Speaker 1: and actually achieve a breakthrough, and seems said it is
Speaker 1: achieving it. That means the second stage, which is the taxes,
Speaker 1: which is a much harder fight in some ways, is
Speaker 1: going to go through. That includes potentially the border tax adjustment,
Speaker 1: which has huge implications for the dollar for taxation in
Speaker 1: general and for the size of the tax cuts that
Speaker 1: will affect us all on on our salaries. If it
Speaker 1: isn't there, that it will be much more difficult. Um
Speaker 1: but that is a more positive if really that would
Speaker 1: go through. The US administration has shown flexive ability. It
Speaker 1: has basically a flummox center and threatened, but ultimately it
Speaker 1: actually has proven a well oiled political operator able to
Speaker 1: actually pass through some some difficult to measures that will
Speaker 1: see that confirmation probably tonight. So taxes will then be
Speaker 1: the next step. There are very difficult particularly at the
Speaker 1: Senate stage, particularly in the case of the B A T.
Speaker 1: The infrastructure project is mostly dead on arrival, but there
Speaker 1: probably will be a fig leaf. That's probably something for
Speaker 1: the next year. The economy is running well at a
Speaker 1: at a high pase with probably a Q one, which
Speaker 1: is relatively low, but it is running in the in
Speaker 1: the right direction, so it doesn't need that much of
Speaker 1: an impulse. Nonetheless, the market is betting on that impulse,
Speaker 1: as betting through equities on that impulse, and if we
Speaker 1: fail to get a move in that direction, then of
Speaker 1: course we could see a significant correction. When you talk
Speaker 1: about the border adjustment tax, it's it's something that the
Speaker 1: President didn't bring up in his speech before joined session
Speaker 1: of Congress. We don't have a clear sense of whether
Speaker 1: or not the White House is back at Steven manoge In,
Speaker 1: the Treasury Secretary, WHI was in Berlin before heading on
Speaker 1: to Boton Botton and was asked about it, and he
Speaker 1: said that they're weighing a lot of things they haven't
Speaker 1: yet committed to backing. And how integral is it to
Speaker 1: tax reform? Do you think if there isn't that component
Speaker 1: to a tax reform package, do you think it stands
Speaker 1: a chance of getting through. It's huge. It's huge in
Speaker 1: the sense that the amount that one is there's a
Speaker 1: tremendous amount of resistance coming from the retail, from refiners,
Speaker 1: from other industries that are heavily opposed to it. But
Speaker 1: if you can imagine this is a carrot and stick,
Speaker 1: and there's a big stick of the stick is the
Speaker 1: B A T. Whether they're using the B A T
Speaker 1: is to achieve political gains abroad, and these means of
Speaker 1: changes in monetary policy, mostly for example, the ECB turning
Speaker 1: less dovish and mentioning the fact that they could move
Speaker 1: away from negative interest right before they do QUI, some
Speaker 1: signs that the p B U C might be marginally
Speaker 1: tightening policy. And generally speaking, the center max are on
Speaker 1: the whole less do wish than they once were. They're
Speaker 1: trying to weaken their currency less than they used to,
Speaker 1: and so it is part of a very complex set
Speaker 1: of policies. You have people who come in on it
Speaker 1: who are irrelevant, people who come in on it who
Speaker 1: actually are relevant, and the ones who are commenting the
Speaker 1: most may or may not be the most relevant. One.
Speaker 1: Help me your sub galy with with the dynamics of
Speaker 1: the dollar. The surprise ending the first quarter hard to
Speaker 1: believe with the frigid fifth avenue today, but ending the
Speaker 1: first quarter. Uh, the surprise is the idea of the
Speaker 1: dollar not in Nancy, it's been I think all in
Speaker 1: all that consensu surprise, what's the catalyst to get the
Speaker 1: dollar to lift? You would need to get better data,
Speaker 1: and unfortunately Q one is is probably going to be
Speaker 1: relatively weak. So you need to get a sense that
Speaker 1: the economic data. It is continuing that labor market has
Speaker 1: continued to toighten and salaries are continuing to improve, and
Speaker 1: for now the salary side remains relatively weak. Productivity in
Speaker 1: the US is relatively weak, and so the catalysts on
Speaker 1: the pure dollar side, the GDP is not out there. Qen.
Speaker 1: We expect for seasonal reasons to be a week we
Speaker 1: go get in some cases what about the second quarter
Speaker 1: quickly probably around two, so where you basically average out
Speaker 1: a wait wait wait, if you get your fiscal package
Speaker 1: and the likes, then what you can imagine is that
Speaker 1: trend growth would actually increase quite significantly. That's what part
Speaker 1: in the market is betting on. Semest Gilly, thank you
Speaker 1: so much. The wheels A power records so Pierre Hotels
Speaker 1: stay with us. Anthony Dwyer with his kindicort jenuity, Tony
Speaker 1: Dwyer has been a massive bull on the markets. Tony
Speaker 1: were clumsy on television this morning with all the u
Speaker 1: reporting from London, and of course with a Prime minister
Speaker 1: speech a little more quiet now with you, are you
Speaker 1: still a bull on a bull market? You should never, ever, ever, ever,
Speaker 1: ever ever sell and get negative unless you can identify
Speaker 1: a close proximity to a recession. That doesn't mean the
Speaker 1: market can't pull back. We're actually kind of calling for
Speaker 1: one now. But ultimately it's too hard to call the
Speaker 1: pull back and then get back in if you get
Speaker 1: really negative and back in is what the amateurs don't understand.
Speaker 1: That's what the professionals don't understand either. By the way,
Speaker 1: it's we're getting back. You can get defensive and you
Speaker 1: call it right, and all of a sudden the market
Speaker 1: turns really quickly. It's up four from the loan. You said, wait,
Speaker 1: hold on, I can't buy it because it's up too much.
Speaker 1: Turn back. This is different. The two gentlemen over here
Speaker 1: at table fourteen at the Pier Hotel, they're taking notes,
Speaker 1: So be careful, be careful. You don't need one of
Speaker 1: those regulatory disclaimers. Burn the sausage. It's good. Correction underway,
Speaker 1: opportunity ahead. In your most recent no talk to us
Speaker 1: a bit about finding that opportunity. Well, that opportunity is
Speaker 1: extraordinary because you have a global synchronized economic recovery. When
Speaker 1: we had upgraded the tape, we had been neutral last
Speaker 1: summer and upgraded to our opinion of the market and
Speaker 1: the offensive sectors meaning financials, tech, um in industrials ahead
Speaker 1: of the election. Not because we thought Donald Trump would win.
Speaker 1: I wish I was that smart. I had no idea. Um,
Speaker 1: what we did it because you had economic improvement in
Speaker 1: the Eurozone, economic improvement in Asia coming off of last
Speaker 1: year's January and February low David, it was an extraordinary
Speaker 1: positive trajectory that nobody was talking about because of the election.
Speaker 1: That's why you you should be That's why I am positive,
Speaker 1: is because you're having a recovery and earnings. You're having
Speaker 1: a recovery and economic activity this morning and while we're
Speaker 1: on the show that I didn't feel it was so clumsy. Um,
Speaker 1: the UK reported retail sales that were better than expected.
Speaker 1: But wait, say it isn't Britain supposed to fall into
Speaker 1: the ocean because of Brexit. No, it accelerated, their currency declined,
Speaker 1: credit opened up. Same thing happened in the Eurozone. The
Speaker 1: same thing happened in Asia, so you're seeing this better
Speaker 1: economic activity globally, and for the investors uh that are listening,
Speaker 1: the market is most closely correlated to the direction of earnings.
Speaker 1: That's driven by economic activity. That's driven by the money
Speaker 1: availability via the slope of the yield curve, and that's
Speaker 1: driven by Fed policy. So as long as the Fed
Speaker 1: stays somewhat accommodative, even on more hikes, are going to
Speaker 1: be accommodative. You have you have probably years before you
Speaker 1: picked this thing out. This guy is always as tough
Speaker 1: as critic, by the way, in terms of the clumbliness,
Speaker 1: clumsiness of the TV. That's think that's why he's so good.
Speaker 1: You know. I just think that a lot of people
Speaker 1: have missed this bullmarket. Let me ask you the question
Speaker 1: I ask everyone, and Tony has said, with great respect
Speaker 1: for your intellectual courage, how do you catch up? You
Speaker 1: have to in a world where all the money is going.
Speaker 1: Don't love passive? Well, you can at certain times time
Speaker 1: you don't think about this analogy. It's very hard to
Speaker 1: stretch a rubber band that has already been fully stretched.
Speaker 1: It's a lot easier to stretch a rubber band once
Speaker 1: it's been neutral and gone back to its normal state.
Speaker 1: There's periods of time where you have these multi month
Speaker 1: runs like we recently have, where you just kind of
Speaker 1: pulling the horns a little bit and you just say, Okay,
Speaker 1: let's wait for a little bit of a pull at
Speaker 1: a better opportunity for that rubber band to contract. Once
Speaker 1: it does, then you get offensive. Then you buy the financials. Well,
Speaker 1: most people don't realize is yes, the SMP Dow when
Speaker 1: all the industries are right up against an all time high,
Speaker 1: but on a relative performance basis, the banks have underperformed
Speaker 1: since early last December, the SMP financial sector. So you're
Speaker 1: hard pressed to say that you're reversing the Trump trade.
Speaker 1: You've already have Energy has been terrible, Materials meaning you know,
Speaker 1: commodity stocks have been terrible. Financials have been up but
Speaker 1: underperforming the overall market. So the Trump trade has already
Speaker 1: been reversed. You mentioned, you mentioned the earnings, You mentioned
Speaker 1: fed policy. You have a lot of people who are
Speaker 1: watching what's happening or not happening in Washington with with
Speaker 1: some concern. How are you regarding all of that as
Speaker 1: a as a strategist, What are you making of what's
Speaker 1: happening in Washington. You look for excuses versus reasons. The
Speaker 1: market is has an excuse to sell off. If the
Speaker 1: Healthcare Act doesn't to vote tonight, you could have a
Speaker 1: sell off. But the reason, the only reason you really
Speaker 1: go defensive sustainably. I mean, I wish I were a
Speaker 1: good trader. I'm a terrible trader. The reason that you
Speaker 1: go defensive or negative sustainably is when you when bank
Speaker 1: lending shuts down, and you can measure that, as Tom
Speaker 1: mentioned earlier, um from the three month and five year
Speaker 1: yield curve war the two tenants is a measured but
Speaker 1: that's how you measure how close you are to a recession.
Speaker 1: If you take the current Fed dot plot and you
Speaker 1: look at where the tenure note is right now and
Speaker 1: keep it there, you're not going to even invert the
Speaker 1: curve until mid two thousand eighteen. Your median inversion is
Speaker 1: fifteen months, so you're talking about close to two thousand
Speaker 1: and twenty before you have a prospect for a recession.
Speaker 1: One of the high points of the week, folks, and
Speaker 1: and I mean this seriously because David and I are
Speaker 1: Gerbils with what we do. Your television coverage yesterday the
Speaker 1: breaking news out of London was really extraordinary. David with
Speaker 1: Francie Laquais there at Parliament, but um Tony, one of
Speaker 1: the highlights is to walk over here to the PR Hotel.
Speaker 1: It's about a three block big New York City blocks
Speaker 1: walk and we can collect your thoughts and you and
Speaker 1: I on the walk over, we're talking about cash flow
Speaker 1: and the big to me underestimation fundamentally is we take
Speaker 1: low single digit revenue growth and it materializes in the
Speaker 1: high single digit UH growth of IBADA operating income whatever.
Speaker 1: How do companies do that? Review for us again, how
Speaker 1: I go from three percent growth to a solid nine
Speaker 1: or eleven growth down the income statement. I really think
Speaker 1: time it comes to technological improvement that allows for productivity gains.
Speaker 1: We're at full employment, Isn't it kind of strange that
Speaker 1: you're seeing this load single digit revenue growth and high
Speaker 1: single digit profit growth with full employment. So I think
Speaker 1: it really has to come down with capital spending and
Speaker 1: investment that creates better productivity. And we've had this a
Speaker 1: little bit on the show, folks, but it's just as
Speaker 1: much the conversations we have on our in our commercial
Speaker 1: breaks and what we're hearing, David, from anybody traveling, is
Speaker 1: there help The new thing in America is help warming sides.
Speaker 1: I mean there's help wanted signs everywhere. That's that's the
Speaker 1: anecdotal from our stand really is the opposite of what
Speaker 1: you had UM at the at the financial market low
Speaker 1: you had every house for sale and you could have
Speaker 1: gotten any price you wanted, and you had no hiring
Speaker 1: going on. Now you have bidding wars everywhere around the
Speaker 1: country for homes and you can't find proper employees, how married,
Speaker 1: or how intertwined, or the soft and hard data. At
Speaker 1: this point we've been so focused on sentiment and the
Speaker 1: optimism there in UH is it starting to match the
Speaker 1: is the hard data is starting to match that. It's
Speaker 1: it's trending that way, David, I I think um And
Speaker 1: for the listeners, this is like if you look at
Speaker 1: small Business Optimism Index had a record surge and in December,
Speaker 1: what you look for is if that fades, so you
Speaker 1: look for the next month Stata. It's not the big
Speaker 1: surge that's important as if it holds and it's held
Speaker 1: for the next two different reports. So in our view,
Speaker 1: that's a good leading indicate. Here here's a great statistical
Speaker 1: example global purchasing manager indices which have been very very
Speaker 1: strong over the course at the last six months, trending
Speaker 1: that way leads industrial production by two months. Tony Dwyer,
Speaker 1: thank you so much, greatly appreciate it. This morning with
Speaker 1: kennichord uh Jenoity, we will continue with Mr Dwyer to
Speaker 1: talk I think we should talk more sectors here, which
Speaker 1: the broader market, maybe because you know, we saw the
Speaker 1: industrials I saw ge yesterday restructure their industrial and sentence
Speaker 1: off the incentives from Nelson Pelts. Here is an announcement
Speaker 1: of one of our wonderful guests. He is truly one
Speaker 1: of the best cross rates strategists in the world. We've
Speaker 1: talked to him for well in excess of a decade.
Speaker 1: When Stephen England are working with Villain Powder and the
Speaker 1: team at City Group, he will leave City Group and
Speaker 1: he will join Raffiki the Hedge Fund, the acclaimed hedge
Speaker 1: Fund out of Hong Kong. Mr Englander is reported to
Speaker 1: be based in New York. Looks for a June start there,
Speaker 1: but it is um you know, the bodies moving around
Speaker 1: on Wall Street seeing a lot of it. Drew Maddis
Speaker 1: will be with us soon. It met life now from
Speaker 1: ubs and against Steve Anglinger, we can report to you,
Speaker 1: thank you, Susie Waite, for this will be leaving City
Speaker 1: Group a real loss for anyone to see Mr Angliner
Speaker 1: with his competencies on foreign exchange. When you mentioned fun,
Speaker 1: you mentioned Nelson Peltz as well. He'll be sitting down
Speaker 1: with the President and the treachery Secretary today. For I
Speaker 1: didn't know the White House. It'll be a lunch with
Speaker 1: Stephen and Nelson Pells. That would be would fly on
Speaker 1: the wall for that to be there. Maybe Mr Pelts
Speaker 1: could help with healthcare. I got bad news, guys. It's
Speaker 1: twenty eight degrees here or whatever it is. We're not
Speaker 1: at spring training. Douglas Cass of Semior's partners listening in
Speaker 1: this morning is from the stands. From the stands, I
Speaker 1: don't know, Marlon. Somebody today maybe is who's looking at
Speaker 1: and he has an important question for our guest, Anthony
Speaker 1: Dwyer and his usual Tony one. Doug cast is really
Speaker 1: on the pulse of America away from the banks, away
Speaker 1: from industrial as we saw with g and Mr Pelts yesterday,
Speaker 1: is the death of retail. I like what Doug says,
Speaker 1: the retail evisceration. How do you avoid the disaster of
Speaker 1: bricks and mortar? Right now, I'm trying to think of
Speaker 1: anything better than being on air with you and getting
Speaker 1: a question from my pel Douggie. Um, but I don't
Speaker 1: have made money for ninety days, so stop it. What
Speaker 1: do we do about bricks and mortars and see it?
Speaker 1: I don't see it changing. It's a secular trend, but
Speaker 1: that does not necessarily mean that retail spending is down.
Speaker 1: It's like restaurants and retailers. Bricks and mortar retailers are
Speaker 1: in trouble because you have Amazon and Netflix. So you've
Speaker 1: changed the makeup. I don't think human nature has changed.
Speaker 1: If you give me money, I will spend the money.
Speaker 1: It's what we do and and money is widely so
Speaker 1: you're to avoid a low multiple, low book value. Terry
Speaker 1: Londren had his retirement dinner, I believe last night a
Speaker 1: wonderful charity event here in New York City, the giant
Speaker 1: of Macy's. You avoid those ratios? Does that mean you
Speaker 1: can buy something like Amazon with Norton with with with
Speaker 1: massive multiples. I cannot comment on individual stocks, but I
Speaker 1: will point this out, I breakfast, he would change, but
Speaker 1: it was burnt, so it's all good. Um So that
Speaker 1: could have been said four years ago. How long has
Speaker 1: Sears been a value trap? How long have some of
Speaker 1: the other retailer has been a value trap? And how
Speaker 1: long has Amazon been overvalued? So again not coming in
Speaker 1: on those specific stocks. We have to be careful to
Speaker 1: misuse valuation and say low as good and high as
Speaker 1: bad because the evidence is contrary. So I'm not talking
Speaker 1: about specific stocks here. How about sector wise, what's most
Speaker 1: appealing to you at this point again now for the
Speaker 1: next six to twelve months. And we've were neutral sectors
Speaker 1: right now, So in other words, I have no favorite sectors.
Speaker 1: I just want to be benchmarked out of the way
Speaker 1: while the market chops around on this political wranglings. When
Speaker 1: it gets uh worked off some the optimism and overbought,
Speaker 1: I want to be long what's been working the financials,
Speaker 1: the information technology industrials, and honestly warming up to energy.
Speaker 1: You've had an incredible drop in the energy space. Um
Speaker 1: So I think that creates opportunity. Maybe even materials and
Speaker 1: health care is is pretty inexpensive, So there's some seriously
Speaker 1: fun areas to look at. Once you work off some
Speaker 1: of the optimism that's out there, you've got these tactical indicators.
Speaker 1: Walk us through what you're looking at. Stokeysticity asting. It
Speaker 1: looked like you got t has what he did. I
Speaker 1: love what they do with the stocaster to kill here.
Speaker 1: Then I wish the listeners could see the look at
Speaker 1: your face when you said that. Anyway, So there's four
Speaker 1: indicators that we use to tell us when to get
Speaker 1: into It's not when you're outside of recession. It's not
Speaker 1: whether you're bullish. It's when you get bullish enough to
Speaker 1: really be aggressive. That happens when the VIX goes over twenty.
Speaker 1: Again for the listeners, the CBOE Volatility indexes the VIX
Speaker 1: when it it's at twelve, When it gets above twenty,
Speaker 1: when you get the percentage of stocks on the N
Speaker 1: Y S, E, R, S, and P when only ten
Speaker 1: percent of them are above their ten day moving average,
Speaker 1: in other words, or below their ten day moving average
Speaker 1: were nowhere near there. Um, when you get the weekly
Speaker 1: stochasticity or i'll say it right, stochastic below uh fifty.
Speaker 1: I think at this point in the market, that would
Speaker 1: be an indicator and again the Investors Intelligence bowls you
Speaker 1: want below for now it was at a thirty year high.
Speaker 1: It's six or three percent two weeks ago, and now
Speaker 1: it had an uptake of the most recent week to fifty.
Speaker 1: It's very hard to have a market rally again when
Speaker 1: that rubber band has already been stretched and hasn't contracted.
Speaker 1: This is what I love. You're looking at bullishness of newsletters, right?
Speaker 1: How does how does it work? They Investors Intelligence releases
Speaker 1: the data and they pull all the newsletter blogs and
Speaker 1: all those other places. Has your target for the SMP
Speaker 1: changed at all? It has? I raised it expecting a pullback,
Speaker 1: So it seems kind of contrary. But who wants to
Speaker 1: buy a market for a two percent gain when it
Speaker 1: pulls back four percent? I mean, that's no. And also
Speaker 1: what changed me and Tom and I were talking about
Speaker 1: this on the way over was I sat down with
Speaker 1: a couple of company managements and they indicated their enthusiasm
Speaker 1: for the non negative meaning no new regulations, no new taxes.
Speaker 1: It wasn't even tax cuts and lower regulation that had
Speaker 1: them excited. It was just the knowledge there wasn't gonna
Speaker 1: be anything new. Let's bring the pier hotel to a
Speaker 1: complete halt right now and go mathematics on everybody. It's
Speaker 1: all to David, I don't know. I'm scared now this
Speaker 1: whole world. And of course you know in the pyrote
Speaker 1: a lot of heads fun people here that have two
Speaker 1: in their brand. It's about a log normal world, which
Speaker 1: means you go down faster than you go up. Is
Speaker 1: the is the real simple mathematical phrase, This idea of
Speaker 1: not negative which is a double negative. This goes back
Speaker 1: to Leviathan and Hobbs. The fact is guys like you
Speaker 1: grizzled Prose and the people frankly here at the Pier
Speaker 1: Hotel spend a lot more time trying to not lose
Speaker 1: money then to make money. How do I not lose
Speaker 1: money right now? I think you lose money assets when
Speaker 1: you underperform the market. Trying to time the drop and
Speaker 1: then get in at the proper time on the recovery
Speaker 1: is very difficult to do. It's almost like double buying.
Speaker 1: If you're negative. Just to go neutral is like a
Speaker 1: bullish trade in your emotion, but it's only neutral. So
Speaker 1: here's our plan. If you are significantly overweight offensive sectors,
Speaker 1: just pull it back to a market neutral position if
Speaker 1: you've made a bunch of money in stocks and you
Speaker 1: want to kind of cut back a little bit and
Speaker 1: and just be prepared to buy. And David, this is
Speaker 1: so critical and investment theory. And I'm gonna do a
Speaker 1: shout at my good friend Jim Kramer over at the
Speaker 1: Dusk Star and the Jim gets this. Jim gets this.
Speaker 1: This is important. It's not by cell, it's not by
Speaker 1: hold cell. It's more things. You own it, you go
Speaker 1: to cash, you're in cash, you sell it, or you
Speaker 1: go the other way. You're in cash, you buy it.
Speaker 1: You're in cash, you sell it. In the complexity year
Speaker 1: of Tony Dwyer's world is a lot more than just
Speaker 1: what do I do today? Should I own it or not?
Speaker 1: It's a the complexities what can kill you. And my
Speaker 1: pal Jim Cramer would also agree with us and say
Speaker 1: that every single listener has to go by their own
Speaker 1: view and not the view of day to day people
Speaker 1: like me that come on the radio or come on
Speaker 1: to the system, which of course being addicted to Bloomberg.
Speaker 1: Let's say I say by it and somebody says, well,
Speaker 1: that's sound smart. I'm going to go out and buy
Speaker 1: as soon as something seems to go wrong, they'll go
Speaker 1: out and sell. So they'll make the mistake of getting
Speaker 1: out too quick because they got in not on their
Speaker 1: own confidence. So the tendency is to be short termist.
Speaker 1: Is that? Is that what you're saying? No, I think that.
Speaker 1: I think in the market where there's so much passive
Speaker 1: investments and against that's money going into index funds and ETFs,
Speaker 1: the best way to create significant outpre forrmants of just
Speaker 1: putting it in an index fund is trying to time
Speaker 1: a macro event. And to do that you have to
Speaker 1: have money to buy when it weakens. Go back to
Speaker 1: where we started here, we're talking about what's what's driving
Speaker 1: the market right now. We haven't talked about central banks
Speaker 1: very much. We have the FED meeting last week, ECB
Speaker 1: meeting as well. When you look at what is driving
Speaker 1: the market right now, political events, can look forward to
Speaker 1: the elections in France, all these macro events. What roll
Speaker 1: are central banks playing right now? It's a key role.
Speaker 1: It is the it's the role still. The European Central
Speaker 1: Bank changed the global economy when they announced that they
Speaker 1: were going to buy private debt. I mean, when you're
Speaker 1: lowering um monetary policy tend basis points further into negative
Speaker 1: territory when nobody's up borrowing anyway, that's why you are
Speaker 1: in malaise. When they decided to buy private corporate debt,
Speaker 1: you're injecting money directly into the balance sheets of companies.
Speaker 1: That is a huge deal and has created partially created
Speaker 1: the recent recovery in Europe. Tony, thank you so much.
Speaker 1: Tony Dryer with us today from vestment there on, maybe
Speaker 1: the basic ideas how not to lose money brought you
Speaker 1: by Bank of America, Mary Lynch. Dedicated to bringing our
Speaker 1: clients insights and solutions to meet the challenges of a
Speaker 1: transforming world. That's the power of global connections, Mary Lynch, Pierce,
Speaker 1: Fenner and Smith Incorporated Member s I p C too
Speaker 1: brief of a visit this morning with Nicholas Burns, former ambassador.
Speaker 1: Ambassador Burns, there was a moment which I hope all
Speaker 1: in Washington saw, where the Prime Minister greeted the Foreign
Speaker 1: Minister of France in the gallery at the House of Commons.
Speaker 1: What can this administration learn is the United Kingdom in
Speaker 1: real time goes through a crisis. Well, I think that
Speaker 1: we're all in this together. That when an incident like
Speaker 1: a terrorist attack like this occurs, um you need international
Speaker 1: cooperation because, as you know, Tom, it's not just the
Speaker 1: military application of force, it's the police work, it's intelligence cooperation,
Speaker 1: judicial cooperation, and I you can be sure that the
Speaker 1: American services are trying to help Britain, as are the
Speaker 1: European services, because these terrorists are floating across our borders,
Speaker 1: especially the European borders, and it's an international fight against them.
Speaker 1: What happens in Washington in the aftermath of an attack
Speaker 1: like the one that we saw yesterday, the Secretary State
Speaker 1: Rex Tillerson had convened a meeting of allies in the
Speaker 1: fight against isis in bottom what's the what's the procedure,
Speaker 1: what's the protocol? Well, certainly President Trump did the right thing.
Speaker 1: He called Theresa May, the Prime Minister of Great Britain,
Speaker 1: to offer our assistance and offer condolences. Rex Tillerson made
Speaker 1: a statement because he had fifty odd foreign ministers there
Speaker 1: on the talking about the fight against the Islamic State.
Speaker 1: But more importantly, our intelligence and counter terror personnel. We're
Speaker 1: reaching out, I'm sure, to their British counterparts to offer assistance.
Speaker 1: If that assistance is necessary and the one thing that
Speaker 1: we've learned, and the British have more experience than anyone
Speaker 1: else because of the sordid I r a campaign against
Speaker 1: Britain over so many decades, that you do need to
Speaker 1: work across international borders when you're trying to combat modern terrorism.
Speaker 1: And I admire the way the British have conducted themselves
Speaker 1: over the last twenty four hours and going back to work,
Speaker 1: millions of Londoners on the streets, going back into their
Speaker 1: normal routines, which I think which the British believe is
Speaker 1: the best answer to terrorism in their right and a
Speaker 1: certain courage, and of course the international perspective that Prime
Speaker 1: Minister gave Prime Minister May gave us on the injured,
Speaker 1: UH and the dead. We speak with Nicholas Burns of course,
Speaker 1: with his public service to the United States Ambassador UM.
Speaker 1: I think there's a lot of value to the fears
Speaker 1: that people have of terrorism. The President was able to
Speaker 1: find a residence about this within his campaign. It's a
Speaker 1: residence that leads to bands to walls, and yet here
Speaker 1: again is a supposed lone walls that we don't really
Speaker 1: know the details, a wall or a band here really
Speaker 1: wouldn't have worked, would it. No, I wouldn't it. But
Speaker 1: let me just say, Tom, I think you know. President
Speaker 1: Trump is right that terrorism is a major threat to
Speaker 1: the United States, as it is to allied countries like Britain.
Speaker 1: But you have to fight it on different levels. He
Speaker 1: convened over the over this week fifty odd countries and
Speaker 1: the fight against the Islamic State. He was right to
Speaker 1: do that, President Trump and Secretary Tillerson. So on the
Speaker 1: one hand, you have to combat the Islamic State and
Speaker 1: Syrie interact where they're bases. But on the other hand,
Speaker 1: to protect Americans here at home or Brits in London,
Speaker 1: you've got to be It's a different game, it's a
Speaker 1: different struggle. And this attack apparently came in London from
Speaker 1: someone who's been living in the United Kingdom for quite
Speaker 1: some time, as some of the attacks h San Bernardino,
Speaker 1: for instance, in the United States have come from people
Speaker 1: who've been living in our country. So it's a very
Speaker 1: different level of difficulty, and you've got our employee intelligence
Speaker 1: and police as well as the military on different fields
Speaker 1: of this battle. Do you feel is a grizzled pro
Speaker 1: of bureaucracy that we are spending our intelligent budget intelligently.
Speaker 1: Is it money well spent or do you wake up
Speaker 1: every morning saying we're frittering it away or squandering it.
Speaker 1: I have I served in the Diplomatic Corps, obviously, but
Speaker 1: I have tremendous respect for the intelligence community in the
Speaker 1: United States and for the FBI and our law enforcement community.
Speaker 1: They are putting their lives on the line. They're very
Speaker 1: good at what they do. No one's perfect, none of
Speaker 1: us are perfect, and so sometimes someone gets through like
Speaker 1: the London attack or did yesterday. But you see the
Speaker 1: follow up, You see the speed with which the British
Speaker 1: authorities are working our authorities under when we've been attacked,
Speaker 1: and it truly is impressive. So I would say you
Speaker 1: have to spend this money on our on the FBI
Speaker 1: and intelligence services to keep us safe. And Tom and
Speaker 1: your earlier question, it's not really a question of building walls.
Speaker 1: Walls aren't going to help. Walls on a border don't
Speaker 1: help intelligence and police work is what helps master bards.
Speaker 1: I want to ask you about a relationship with NATO.
Speaker 1: At that joint press conference last week, Chancellor Merkel and
Speaker 1: President Trump both talked about NATO we had the President
Speaker 1: uh saying what many had hoped he'd say for a
Speaker 1: long time, that is that he supports the Alliance. He
Speaker 1: pivoted very quickly to talk about how it's financed, or
Speaker 1: how he believes it's it's financed. And then we have
Speaker 1: rex stealers in the Secretary of State saying he couldn't
Speaker 1: make a NATO meeting, NATO saying we're happy to apply
Speaker 1: to change the meeting date US to accommodate him. What's
Speaker 1: your sense of this administration's support of the alliance right now? Well,
Speaker 1: it's tepid and they haven't really found the right notes
Speaker 1: and the right tonality. Because the United States is the
Speaker 1: leader of NATO, of course, Secretary Tellerston has to be
Speaker 1: at the meeting of NATO Feur ministers before he goes
Speaker 1: to Moscow. And it looks like now they're going to
Speaker 1: try to rearrange the schedules that he can do that.
Speaker 1: So there's a happier outcome here. I thought that President
Speaker 1: Trump I was glad to hear him say that he
Speaker 1: believes NATO is vital, but then it within a second
Speaker 1: he trans Asian to say, but they're not paying enough.
Speaker 1: He's right they're not paying enough, but he almost treats
Speaker 1: it like a protection racket. If you don't pay, I'm
Speaker 1: going to withdraw our support, which is not the way
Speaker 1: that any American president has ever treated our allies who
Speaker 1: came to our defense on nine eleven. And so I
Speaker 1: think the administration really needs to get into the leadership
Speaker 1: mode they've been following on the NATO issue. We are
Speaker 1: the leaders of NATO, and we have to act like
Speaker 1: it and believe in it. And I don't think we've
Speaker 1: heard that from President Trump yet. Before we let you go,
Speaker 1: let me put a question to you. I'm gonna put
Speaker 1: the Emory slaughter here in a few minutes as well.
Speaker 1: When you look at Rex Tillerson and the kind of
Speaker 1: diplomat he is shaping up to be, what camp does
Speaker 1: he fall into. We have structural realism and all of that.
Speaker 1: What kind of diplomat is Rex Tillerson. What do we
Speaker 1: know about his diplomatic tax It's just not clear because
Speaker 1: he's been literally quiet for the last couple of months.
Speaker 1: He hasn't been speaking publicly, he hasn't enunciated his view
Speaker 1: of the world. Uh, it's unclear what kind of influence
Speaker 1: he has with the White House, and so I think
Speaker 1: we just need more time to see Secretary Tillerson in action.
Speaker 1: But I can tell you is the Trump administration is
Speaker 1: proposing a cut in the State Department in a I
Speaker 1: D budgets that would be catastrophic. It would cripple our diplomats.
Speaker 1: It's the wrong way to go. And I hope Sectary
Speaker 1: Collison will fight this, and I hope Congress will resist
Speaker 1: it and bring the Trump position of the administration back
Speaker 1: to a more realistic posture that our diplomats need to
Speaker 1: be funded. Abassador Burns, thank you so much for your
Speaker 1: perspective this day where the Prime Minister speaks to the
Speaker 1: House of Commons. This is special, folks. We've had a
Speaker 1: really wonderful run of strong books. I think of admalst
Speaker 1: Vetus book out of Fletcher School, in Tom Nichols book
Speaker 1: out of the Naval Academy on Experts, and then a
Speaker 1: little jewel shows up the chess board in the web
Speaker 1: Emery Slaughter and you're like, yeah, yeah, she's great, it'll
Speaker 1: be great, and then you open it in the joy
Speaker 1: of how you recapitulate and bring forward this dreaded thing
Speaker 1: game theory out of Princeton. You know that Avanash ticks
Speaker 1: it the artist strategy. Uh is it almost a cottage industry?
Speaker 1: And my joy as you open with the late Tom
Speaker 1: Shelling changed how all of us think. We would all say,
Speaker 1: why did you open this book on networks the chess
Speaker 1: board in the web with Professor Schilling? Because Tom Shelling
Speaker 1: defined the framework that we have used for for whip
Speaker 1: for foreign policy since nine He took the U. S.
Speaker 1: Soviet relationship, which was a zero sum relationship. So people thought,
Speaker 1: and he applied game theory and he said, nope, this
Speaker 1: is actually a bargaining game. It can be chicken where
Speaker 1: heres adding straight at each other. It can be prisoner's dilemma,
Speaker 1: it can be a coordination game. And that structured how
Speaker 1: we think about other countries. That's the chessboard world, and
Speaker 1: that for me was the some you know, the text
Speaker 1: that you looked at. But when I look at the world,
Speaker 1: I see state to state relations. But I also see
Speaker 1: a world of networks. Right now, we just had a
Speaker 1: terrorist attack inspired by the ISIS network. There are criminal networks,
Speaker 1: their business networks, their civic networks. We have a strategy
Speaker 1: of conflict. That was Tom Shelling's book we do not
Speaker 1: have strategies of connection, and so I set out to
Speaker 1: try to provide a framework for those. How much does
Speaker 1: a diplomatic theory change? Uh, Secretary of States and Secretary
Speaker 1: of State, is he or she choosing his or her
Speaker 1: outlook on the world or is the outlook on the
Speaker 1: world governed by the way that the world is shaped
Speaker 1: at that particular time. Well, I think it's always both.
Speaker 1: Every president, every section of state discovers that the world
Speaker 1: gets in the way whatever it is they thought they
Speaker 1: wanted to do. Uh, you know, the world serves them
Speaker 1: up something different. And I remember serving with Secretary Clinton
Speaker 1: where in one week you had the Pakistani Taliban being
Speaker 1: within a hundred miles of Islamabad, you had the H
Speaker 1: one N one virus breaking out in Mexico, and you
Speaker 1: had what looked like a double dip global recession. So, uh,
Speaker 1: you get what's thrown at you. But again, we have
Speaker 1: better tools for dealing with what states throw at us
Speaker 1: than what nonstate actors throw at us. You see this
Speaker 1: networked world, But what's brought it about? Is it? Is
Speaker 1: it technology that's led us? There? Is it something else? Well,
Speaker 1: it's technology that's always been true. You know. John Maynard
Speaker 1: Keynes has this famous paragraph where he describes the London
Speaker 1: uh you know banker sitting you know in nineteen thirteen
Speaker 1: with products from all over the world. That was enormous
Speaker 1: globalization then, and that was brought about by the steamship
Speaker 1: and various other uh technologies in the Industrial revolution. Today
Speaker 1: it is again it's globalization and technology. Those two things
Speaker 1: are connected. But our kids don't know what it's like
Speaker 1: not to be connected. We grew up in a world
Speaker 1: where it's us and then we connect to others. And
Speaker 1: in our next section we'll get to the politics of
Speaker 1: the moment. But what I would use here from electrical
Speaker 1: engineering is slew rates, which is the right angle a circuitry,
Speaker 1: which is things move fast, things move a light speed. Now,
Speaker 1: let's take a corporate landscape. Somebody reading the chess board
Speaker 1: in the web within a corporate milliew, the new strategy
Speaker 1: there's no five year strategy. The new strategy in the
Speaker 1: slew rate is three years exactly if if that I mean,
Speaker 1: I often say this is no world to predict and
Speaker 1: planned plan. It's a world in which you have to
Speaker 1: adapt and respond. So one of the things you want
Speaker 1: is to create the kind of fast adaptive network so
Speaker 1: that whatever happens, you're ready. And indeed I use Stan
Speaker 1: mc crystals work on team of teams where you know,
Speaker 1: he had to design a network to defeat al Qaida
Speaker 1: in the Rock and he says and he says to CEOs, look,
Speaker 1: I needed to design a very particular kind of network
Speaker 1: so I could let my people respond on their own
Speaker 1: on the ground, depending what came out of And you
Speaker 1: detail this in the book. The Crystal Group applies this
Speaker 1: to the forrporate setting. How does it do that? Well,
Speaker 1: the first thing it does is a network analysis of
Speaker 1: any business and that's critical because we all all know
Speaker 1: their informal networks. There's no organization in the world where
Speaker 1: there's a you know, there's the hierarchy. You report to
Speaker 1: this person, but how do things really get done? Where's
Speaker 1: the network? So you've gotta map that and then figure
Speaker 1: out how you tweak it. What does this mean for
Speaker 1: the power structure in the in the diplomatic sense you
Speaker 1: had world powers before. Is power waning because of this?
Speaker 1: Is power being more evenly distributed among countries and among leaders? Yes,
Speaker 1: although one of the reasons it's called the chessboard in
Speaker 1: the web is you have to see both. Right, you
Speaker 1: have to look at the world, the states and the
Speaker 1: different power changes there, but you also have to look
Speaker 1: at you know, foreign policymakers who are ceo, civic leaders,
Speaker 1: university presidents, sadly criminals all on the other side. UH.
Speaker 1: And so if you're in government, you need to be
Speaker 1: doing that state to state state craft, but you need
Speaker 1: to be doing webcraft, and that means bringing in all
Speaker 1: these actors who are not governments. Were then very slaughter
Speaker 1: the chess board in the web. We're going to continue here.
Speaker 1: Breaking news out of Ford motor It gives pause. They
Speaker 1: lower the sites dramatically. For their first quarter they were
Speaker 1: at forty seven cents and they come way down center
Speaker 1: tendency thirty two to thirty three cents. That is remarkable
Speaker 1: from Fort Motile. Much more on that they site higher costs,
Speaker 1: lower volume uh and unfavorable exchange. UM. I want to
Speaker 1: give you the blurb reward of the year. As everyone
Speaker 1: knows it's ever written a book. There's a game to
Speaker 1: getting blurbs. I was honored when I did flying with
Speaker 1: one engine. UH that I got I got a blurb
Speaker 1: from this person, a blur from that person. In your world,
Speaker 1: you can't do better than your first two names. Night
Speaker 1: and Kiwen. Did you talk to them at the same time?
Speaker 1: I mean, that is that is a great honor, isn't it?
Speaker 1: It is? And they are dear friends of mine. And
Speaker 1: they wrote the book in nine Power and Interdependence, and
Speaker 1: that was the chessboard, Power and Interdependence the Web, And
Speaker 1: so I see in many ways I'm updating their work
Speaker 1: and giving you practical This is exactly set, folks. And
Speaker 1: I would Paul in your Venodaker well at Berkeley as well,
Speaker 1: and pull it back to Tom showing at the beginning
Speaker 1: of your book, which is it's one big game of chicken.
Speaker 1: And to get to our next section, what does President
Speaker 1: Trump need to learn about the theory of the game
Speaker 1: of chicken within power and interdependence and within strategy and
Speaker 1: conflict showing that's what do we need to learn about chicken?
Speaker 1: All right? Well, the first thing that it's over exit Bacon.
Speaker 1: Did you know, well, except that I think that this
Speaker 1: is a critical example of So the Russians hacked our election, right,
Speaker 1: and we responded by you know, putting out a few
Speaker 1: expelling some diplomats and sanctions, putin responded to that by
Speaker 1: inviting the American diplomats children to the Kremlin. He basically
Speaker 1: laughed at us, we need to respond, and this is
Speaker 1: chicken in a way that actually threatens his secrets, that
Speaker 1: humiliates him, that puts that really puts him on notice. No,
Speaker 1: we will not stand. Where did our timidity come from?
Speaker 1: Within the constructive game of chicken? David Gurr and I
Speaker 1: played Chicken every morning, trying to figure out how to
Speaker 1: get to the next couple of coffees. Well, when did
Speaker 1: we get timid? So I do think that the sort
Speaker 1: of national trauma of first nine eleven, but then particularly
Speaker 1: Iraq and Afghanistan has made us extremely hesitant or made
Speaker 1: the Obama administration to use force. And you can't play
Speaker 1: chicken unless you've got a credible threat, and that means
Speaker 1: you've got to use force, so people know that you're
Speaker 1: willing to David, check that China you're heard thrown? Was
Speaker 1: Charles Vollmer, a technical director, thrown China because the eggs
Speaker 1: were overcooked? You write in this book of being a
Speaker 1: student at Princeton and reading Robert Cohen's book and and
Speaker 1: and Joseph Nye as well, how much is you know,
Speaker 1: you've taught for a long time at Princeton. Has the
Speaker 1: pedagogy change when it comes to foreign policy? You know
Speaker 1: that you would still read nine Cohen I if you were,
Speaker 1: if I were teaching, you would you would. But but
Speaker 1: I do think one of the problems is it's become
Speaker 1: much much more specialized. Right, so you don't take these
Speaker 1: braw courses where you're thinking strategy. You take political strategy,
Speaker 1: you take political economy or data. Well, we're gonna come back,
Speaker 1: Emory Slaughter with us. We've got to cut your the
Speaker 1: chess board in the web, and we're gonna come right
Speaker 1: back on that idea, the broad strategy reading Kissengers Diplomas
Speaker 1: at gunpoint you will read this book. No, you need
Speaker 1: to read about networks in the new digital world, and
Speaker 1: you'll do that with Emory Slaughter. We celebrate the chessboard
Speaker 1: in the web, Strategies of Connection in a networked world
Speaker 1: with Emory Slaughter, truly must read if you are read
Speaker 1: on international relations, and again starting with the game theory
Speaker 1: of time shelling uh and working off of that, I
Speaker 1: did what any good radio slave would do. I went
Speaker 1: to the conclusion and you wrote a chapter on Mr
Speaker 1: Trump the rise of webcraft translate for us, the webcraft
Speaker 1: of Twitter and the president. We didn't do this with
Speaker 1: President Obama, President Johnson, and President Mix and we're now
Speaker 1: reading our way through policy. Is that in your book? Well,
Speaker 1: it is in the sense that that you know, President
Speaker 1: Trump has a brilliant broadcast network, right, He's got twenty
Speaker 1: six million Twitter followers. That's about half his voters. That's
Speaker 1: a a sizeable junk of all US voters. And but
Speaker 1: that's a one way network, right what President Obama discovered
Speaker 1: and he had a pretty great network too in two
Speaker 1: thousand and eight when he tried to convert those people
Speaker 1: to advocates for Obamacare. And now President Trump would like
Speaker 1: to have those people be advocates for repealing Obamacare. He's
Speaker 1: got the wrong network for that. So he's got, you know,
Speaker 1: one person at the center broadcasting to million. He needs
Speaker 1: what I call a pod network, right of where those
Speaker 1: supporters are actually clustered in ways that you can mobilize
Speaker 1: them and they can take action. And that's a different
Speaker 1: net structure of a network. So he needs to actually
Speaker 1: learn some network theory if he's going to make it
Speaker 1: work for what he needs to do now, Tom I'm
Speaker 1: glad that you've brought us here because I look at
Speaker 1: Secretary of State Rex Taylorson and I wonder where he
Speaker 1: fits into this networked at world. We followed his trip
Speaker 1: to Asia last week. He wasn't exactly broadcasting that trip.
Speaker 1: He brought one journalist on the plane we got to
Speaker 1: write up of that. He avowed in an interview with
Speaker 1: her that he doesn't like the media, doesn't see a
Speaker 1: need for media. I imagine that public diplomacy is key
Speaker 1: to this networked world, being out there talking, expressing your opinions. Absolutely,
Speaker 1: And he is now back in a very traditional chess
Speaker 1: board world where it's sort of Manda man in a dark,
Speaker 1: oak paneled room, and he's not an all secret right
Speaker 1: like pre World War One secret agreements secretly arrived at
Speaker 1: where in fact, uh, you know, he needs to do
Speaker 1: what he needs to be, engaging uh, the public at large,
Speaker 1: but again creating networks of pockets of support for American policy.
Speaker 1: And we're crazy if we think it's only foreign governments
Speaker 1: we need to influence. Again, look at terrorist attacks. That's
Speaker 1: not governments, that's people you need to think about, not
Speaker 1: just public diplomacy. Heat how great America is, But where
Speaker 1: are the peak in different countries around the world, who
Speaker 1: themselves are pushing back against the Isle narrative? And how
Speaker 1: do you connect them first to each other and then
Speaker 1: and then sort of in a in a broader network.
Speaker 1: And that's that is something I think Secretary Clinton started,
Speaker 1: uh and Secretary carry did did less than she did,
Speaker 1: and Rex Dillerson is really heading backwards. How do you
Speaker 1: deal with the overwhelmingness of the networked world. I can
Speaker 1: understand the tendency because of how big and why it
Speaker 1: is to find comfort in the wood paneled room to
Speaker 1: want to go back to that. How do you fight that?
Speaker 1: How do you see this as a world that you
Speaker 1: can navigate? You know, I think that that's a that's
Speaker 1: a great observation that I think it's right. There's this
Speaker 1: sort of feeling like, well, I'll just do what I
Speaker 1: know I can do, But you actually have to do both,
Speaker 1: so you do still need that room. Like if we're
Speaker 1: making a deal with Iran, that's not a global network,
Speaker 1: that's a negotiation, but you have That's part of the
Speaker 1: reason I wrote the book. Part of the reason it
Speaker 1: seems overwhelming is we don't have any tools. So if
Speaker 1: you think again, go back to shelling. Oh wait a minute,
Speaker 1: this is a operation game, this is a coordination game.
Speaker 1: This is what I do in those games. I'm saying, Oh,
Speaker 1: this is a resilience network. We need to build resilience.
Speaker 1: This is what it's got to look like. This is
Speaker 1: a task network. We need to get something done. That's
Speaker 1: team of teams, or this is a scale network. We
Speaker 1: need to correct people. And I think it'll be more
Speaker 1: manageable when you think about it that. I want to
Speaker 1: take the time we've got left and ask the question.
Speaker 1: I got a wonderful email the other day from Carol
Speaker 1: driving with her daughter, Uh, you know, listening to the
Speaker 1: hot air coming out of the Mr Gera and Mr King,
Speaker 1: and it brings it back to the hallmark of your academics.
Speaker 1: And I'm going to take this back to Charlottesville and St.
Speaker 1: Anne's a million years ago, which you've always been the
Speaker 1: adult academically in the room. You've got an understanding of
Speaker 1: the heritage and the reading of the literature like nine King,
Speaker 1: and you've also got a more modern twist as well.
Speaker 1: What's your recommendation to parents trying to get boys and
Speaker 1: girls motivated to get off the phone and to read
Speaker 1: the original literature. It's out there. Who did that? I did?
Speaker 1: And and actually I think you put your finger on it,
Speaker 1: which is and it goes back to they're overwhelmed, right,
Speaker 1: There's so much coming at them, so it's unfashionable. But
Speaker 1: I would say you need to go back to create
Speaker 1: a cannon, right, like here are basic text. Since November,
Speaker 1: I've gone back and I've been reading the Founders right,
Speaker 1: I've been reading sort of key document volume on Thomas
Speaker 1: Jefferson right now. Absolutely, and John Mitcham Jefferson is just wonderful.
Speaker 1: So I think we need to remind our kids to
Speaker 1: be able to process this infinite amount of information, you
Speaker 1: need a set of texts and you need to and
Speaker 1: you can master those. And that is exactly what I
Speaker 1: think the strategy of conflict is in in internationalition very quickly.
Speaker 1: Or what was it like to be intimidated by Professor
Speaker 1: Holman at Princeton three years ago? My god, he was
Speaker 1: a giant, he was, but he was very nice to
Speaker 1: me by the time I got there, not helped. I
Speaker 1: was his dean, so I was his boss, but he
Speaker 1: I was his boss, I was, but was yeah, but
Speaker 1: he was a power not enough time, don't be a
Speaker 1: stranger the chessboard in the Web Strategies of Connection in
Speaker 1: the Network World, A Marie Slaughter hits a home run
Speaker 1: by dragging Thomas Schelling a nine Q and I hope
Speaker 1: Professor Nice hearing this. I mean dragging them and dragging
Speaker 1: them into the modern day and age of network and
Speaker 1: digital his books. His thick tone is familiar to anyone
Speaker 1: who's been through law school Constitutional Law in its fifth edition,
Speaker 1: Criminal Procedure in its second Irwin Chamerinski, the founding ding
Speaker 1: to the School of Law at the University of California,
Speaker 1: Irvine joins us now as we've watched the hearings unfold
Speaker 1: on Capitol Hill. In the heart Senate Office up building,
Speaker 1: Judge Gorse has taken questions from members of the Senate Judiciary.
Speaker 1: Comin Marinsky joining us now in the Spectrum, Enterprise, Phoneline, Specium, Enterprise,
Speaker 1: Nation y I T and Infrastructure Solutions. Great to have
Speaker 1: you with here, sir, and I want to ask you,
Speaker 1: first of all, what we're getting out of all of this.
Speaker 1: We see the marathon hearings, We we hear the questions
Speaker 1: answered by the judge hoping to be a justice what
Speaker 1: are we learning about him over the course of this week.
Speaker 1: We're learning he's very smart, he's very articulate, and that
Speaker 1: he refuses to answer questions but anything constrained to his
Speaker 1: legal views. Has that always been the case? We watched
Speaker 1: the production here every few years as this happens. It's
Speaker 1: not a regular thing. It's it's a rare thing. But
Speaker 1: it seems like that's the game, dodging these questions, trying
Speaker 1: to perhaps pretend that there is no inherent jurisprudence that
Speaker 1: these guys have. So long as the Senate is controlled
Speaker 1: by the same political party as the president, the hearings
Speaker 1: are largely meaningless. There are fifty two Republican senators now
Speaker 1: one of them is indicated a desire to vote against
Speaker 1: Neil Gorcich. He knows that he knows he doesn't have
Speaker 1: to answer questions. If the additive and controlled by the Democrats,
Speaker 1: it's then a very different story, because then they can say,
Speaker 1: if you don't answer our questions, we're not going to
Speaker 1: confirm you. How early on do somebody who's entering the
Speaker 1: law develop his or her own jurisprudence. You're teaching students
Speaker 1: that you see, Irvon you taught students at Duke before that.
Speaker 1: I'm sure many of them aspire to be judges someday.
Speaker 1: Is there an inclination now to be private about one's
Speaker 1: belief because of this? In other words, how long is
Speaker 1: the historical record for candidates? I think you have two
Speaker 1: different questions. One is how soon do students develop their
Speaker 1: jurisprudential philosophy? And I say that many students have that
Speaker 1: in law school. I hear it expressed by my constitutional
Speaker 1: law students all the time. The second, to me is
Speaker 1: a much harder question. Are people now more private because
Speaker 1: they think someday they're nominated for a federal judge that
Speaker 1: their views should not be known. Maybe there are some
Speaker 1: that way. I once talked to a young law professors
Speaker 1: said he didn't want to take positions on controversial issues
Speaker 1: because he wanted to be a federal judge someday. But
Speaker 1: I think that's pretty rare. I think that um certainly
Speaker 1: being on the Supreme Court of like being struck by lightning.
Speaker 1: I don't expect that people are planning their careers from
Speaker 1: law school with a state hope that that might happen. Uh.
Speaker 1: Wonderful to have you on professor, this morning. I guess
Speaker 1: it required read along the way as Bernard Schwartz one
Speaker 1: volume on the Supreme Court, which regrettably ends long ago
Speaker 1: and far away like near seven. Help me here with
Speaker 1: the distinction between Judge Scalia's theory and Judge core such
Speaker 1: as theory, what's the difference and how they look at
Speaker 1: the original document you mentioned seven? And what's interesting about
Speaker 1: that year is it's when Robert Borke was denied confirmation
Speaker 1: for the Supreme Court. And Robert Bourke was the nied
Speaker 1: confirmation because of the so called originalist views, his view
Speaker 1: that the meaning of a constitutional prevision is the same
Speaker 1: today as it was adopted. The meaning of the constitutional
Speaker 1: provision is six when it's adopted, we changed only by amendment.
Speaker 1: Justice Scalia was also an originalist, and both Judge Bourke
Speaker 1: and Justice Scalia set from their originalist philosophy. There's no
Speaker 1: protection of the right to privacy under the Constitution like
Speaker 1: for reproductive freedom. There's no protection for women from discrimination
Speaker 1: under equal protection because the drafters of the Fourteenth Amendment
Speaker 1: eighteen sixty eight didn't contend that. Neil Gorsich is also
Speaker 1: an originalist, and so far as we know, his views
Speaker 1: are the same as Robert Bourke or Antonin Scalias. Because
Speaker 1: he hasn't been willing to talk about any legal issues.
Speaker 1: Hard to know when, if at all, he would disagree
Speaker 1: with them. Does his natural law treatment and the complexity
Speaker 1: of how natural law is studied, does it move him
Speaker 1: beyond Scalia and the others too? Maybe a more modern treatment. Well,
Speaker 1: natural law is quite different originalism. Natural law would say
Speaker 1: that there are rights that exist just by virtue or
Speaker 1: being humans, and that courts should protect those rights even
Speaker 1: if they're not in the Constitution. Neil Gorsich wrote a
Speaker 1: book about euthanasia that expressed the natural law velocity. But
Speaker 1: I've read hundreds of his decisions from the United Sates
Speaker 1: Court Appeals to the Tenth Circuit, and I don't see
Speaker 1: an expression of natural law there at all. Glad you
Speaker 1: took us there, because that's what I guess we have
Speaker 1: to look at. Here is his record, hundreds thousands of decisions.
Speaker 1: If you were to put them together, what kind of
Speaker 1: picture could you paint? For is here of the way
Speaker 1: that he's acted as a federal judge, a very conservative judge.
Speaker 1: Yesterday I gave a talk to lawyers who handled death
Speaker 1: penalty cases in Federal Defenders Offices, and I talked with
Speaker 1: them about his record in criminal cases and especially in
Speaker 1: death penalty cases. He is a consistent vote for law
Speaker 1: enforcement and prosecutors, often in dissent. So I think that
Speaker 1: he would very much be like Justice Scalia, because I
Speaker 1: think he'd be more conservative than Justice Scalia when it
Speaker 1: comes to criminal cases. Um, he's going to be exactly
Speaker 1: like Justice Scalia. When it comes to religion cases. He
Speaker 1: rejects the idea of a separation of church and state.
Speaker 1: He favors the ability of people diffree exercise religion, even
Speaker 1: it means inflicting injuries on others. You know, I think
Speaker 1: of the way that academia works. When a professor retires
Speaker 1: of say American literature, there is a tenure line. There's
Speaker 1: an effort to replace that person with somebody else who
Speaker 1: studies American literature. Is the same thing becoming true on
Speaker 1: the Supreme Court. We heard from President Trump saying he
Speaker 1: wants to find an air apparent to Justice Scalia. You
Speaker 1: want to replace one with with kind of a clone
Speaker 1: or someone like that person when it comes to jurisprudential philosophy. No,
Speaker 1: I don't think so. If Hillary Clinton had been elected president,
Speaker 1: she would want to pick the antithesis incident Scalia. In
Speaker 1: terms of political philosophy. Um, I think she would have
Speaker 1: nominated jud to Judge Merrick Garland, maybe even somebody more
Speaker 1: progressive than Merrick Garland. Um. He had Donald Trump decided
Speaker 1: he wanted to be a moderate rather than a far
Speaker 1: right conservative, he would have picked a moderate sal Court
Speaker 1: of Appeals judge or a moderate individual for the School
Speaker 1: of Seat. But he said from the time he campaigned
Speaker 1: that he wanted to pick someone just like school ideologically,
Speaker 1: he wanted to give this nomination to the far right.
Speaker 1: And the day after President Trump nominated Judge Corsets, the
Speaker 1: National Review and Ted Cruz were loud in their enthusiastic praise.
Speaker 1: I think that tells you were now Gorges on the
Speaker 1: ideological spectrum. Let me pick up where we left off
Speaker 1: with the Charlie Pellett and Gregg's story. There just a
Speaker 1: moment ago they're talking about the death penalty. Of course,
Speaker 1: the Supreme Court weighing in on those issues from time
Speaker 1: to time. Help us understand you the role that a
Speaker 1: justice course which might play when you look at the cases,
Speaker 1: the kinds of cases that the Supreme Court is waging.
Speaker 1: We've seen four four decision after four for decision here
Speaker 1: over the last few months. I think with the guard
Speaker 1: of the death penalty, there are four justice on the
Speaker 1: current court, led by Justice Brior and joined by Justices Ginsburg, Senter,
Speaker 1: and Kagan, who would vote to eliminate the death penalty
Speaker 1: so that it's inherently cruel and the unusual punishment. There
Speaker 1: are four justices to reject that, Chief Justice Roberts and
Speaker 1: just Kennedy, Thomas, and Alito. I think he had a
Speaker 1: Democratic appointee replaced Justice Scalia, there would be a fifth
Speaker 1: vote to declare the death penalty unconstitutional or at least
Speaker 1: greatly restricted to application. From everything we know about Judge
Speaker 1: Gorcich from his votes on the Tenth Circuit, he's going
Speaker 1: to be with the Conservative The death penalty will have
Speaker 1: five votes boppolted, five votes to reject any significant restrictions.
Speaker 1: A lot of people criticize this court for being overly corporatist,
Speaker 1: ruling the lot for corporations. We had Judge corc responding
Speaker 1: to questions from senators this week saying he's ruled for
Speaker 1: the big guy, and he's ruled for the little guy. Again,
Speaker 1: you've gone through many of these decisions. Can you can
Speaker 1: you estimate? Can you say how often he's gone for
Speaker 1: one or the other? Well, it's always hard to do
Speaker 1: those kinds of numbers. But I think when you focus
Speaker 1: on the divided cases where there's a majority in the descent,
Speaker 1: he comes down very much on the side of employer
Speaker 1: over employee, of business over consumer. There was one case
Speaker 1: they got a lot of attention in the hearings that
Speaker 1: it involves a truck driver whose truck broke down and
Speaker 1: it was extremely cold, and finally he felt literally his
Speaker 1: life was going to be in danger if he didn't
Speaker 1: move the truck. He did so and got fired for that.
Speaker 1: And it was Judge gors that you said he could
Speaker 1: be fired for doing that and if nothing else, that
Speaker 1: chose a lack of empathy. But I think what the
Speaker 1: point was the Democratic senators is it shows that he
Speaker 1: really sized that the employer over the employee. He I
Speaker 1: think again, it's going to do with the Conservative majority
Speaker 1: on the whole range of cases where it's business firsus
Speaker 1: employee or consumer. A lot of Conservatives would say professor,
Speaker 1: But the Conservatives won the election, so they get to
Speaker 1: tilt the Supreme Court. And there's a great certitude about
Speaker 1: picking judges and you know, literate in our history going
Speaker 1: back before Marshall. Frankly, you never know what a justice
Speaker 1: is going to do. What is the modern probability of
Speaker 1: any conservative justice versus Suitor or or or or Byron
Speaker 1: White or others? Is there something different in the kool
Speaker 1: aid now that makes a conservative a conservative forever? Well,
Speaker 1: you ask two questions. First, is winning of presidency the prerogative?
Speaker 1: And then determined on the Supreme Court only if you
Speaker 1: can get a majority of the Senate to agree. In
Speaker 1: the nineteenth century, the Senate rejected about of all presidential lemies,
Speaker 1: including one from George Washington. Um. In the twentieth century
Speaker 1: you had examples of John Parker in ninety one, claimant
Speaker 1: Hensworth hild Car as well Robert Cork. So it's not
Speaker 1: a presidential prerogative. The Senate as that advise and consent,
Speaker 1: seken Um. There's certainly instances were individuals appointed that the
Speaker 1: Supreme Court didn't turn out as expected. Um, David Suitor
Speaker 1: wasn't the conservative that the George H. W. Bush administration wanted.
Speaker 1: But what's notable is that David Suitor, if you read
Speaker 1: his opinions from the New Hampshire Supreme Court, didn't have
Speaker 1: a definite ideology. Um. If you look at the last
Speaker 1: four Supreme Court nominees, Roberts, a, Leader, and Kagan, they've
Speaker 1: all turned out exactly as would have been predicted. Most
Speaker 1: justices turn out exactly as predicted, especially if they have
Speaker 1: an ideological track record. Relatively few people have major ideological
Speaker 1: transformations in their sixties and their seventies. Antonin Scalia was
Speaker 1: as conservative when he died on February two thousand sixteen.
Speaker 1: Is went on the court in. Ruth Bader Ginsburg's liberal
Speaker 1: today as when she went on the court in I'll
Speaker 1: offer your prediction, Neil Gors which is going to be
Speaker 1: conservative next year, ten years, twenty years, thirty years, maybe
Speaker 1: forty years from now. He's forty nine years old. If
Speaker 1: he remains on the Supreme Court until these nineties, the
Speaker 1: age was just down past Stevens rehired, he'll be a
Speaker 1: Supreme Court justice. Let me ask you lastly to drop
Speaker 1: on your experience in the classroom once more. We we
Speaker 1: we've seen what happened to Sally Yates. We've seen what
Speaker 1: happened to pre Perar. When you talk to students who
Speaker 1: are interested in getting into the law to work in government,
Speaker 1: what do you tell them about what we've seen here
Speaker 1: over these last few months about the way the Justice
Speaker 1: Department is operating now under President Trump. I always encourage
Speaker 1: my students to go into government in public service. I'm
Speaker 1: very proud that of all the law schools in the country,
Speaker 1: we were ranked second in placing our students in government
Speaker 1: and public service. I think now when it comes to
Speaker 1: going into the federal government, assuming there's going to be
Speaker 1: any hiring letter, it depends on what they're going to
Speaker 1: be doing. My oldest son is a federal profit toitter
Speaker 1: doing gangs and crime cases. It's not going to be
Speaker 1: effected by whose Attorney General. But if a student wants
Speaker 1: to go now into environmental work on behalf of helping
Speaker 1: the environment, for civil rights work on behalf of the
Speaker 1: African Americans and gays and lesbians and women, I don't
Speaker 1: think the Sessions Justice Department is gonna be the place
Speaker 1: to go. Iin Schamarinski, thanks very much for joining us
Speaker 1: set today or Chamarinska, dean of the School of la
Speaker 1: at the University of California Irvine joining us on the
Speaker 1: Spectrum Enterprize, Phoneline, specrument FRISE and nationwide fire based network
Speaker 1: and i T Infrastructure solutions. I wasn't joking at the
Speaker 1: top of the show. I think that every student who
Speaker 1: takes criminal law or constitutional law uses his textbook. So
Speaker 1: you're leading. I mean he's huge using Duke right for
Speaker 1: a long while, and then there was a huge battle
Speaker 1: when he went to u k L Irvine. I mean
Speaker 1: he blew up the state legal uh community with the
Speaker 1: debate on a liberal conservative and all the work and
Speaker 1: founding dean of that school. So leading a fairly young
Speaker 1: school out there in California, trying to give you a
Speaker 1: little more informed coverage of what we're seeing in the
Speaker 1: Supreme Court. And one idea here I might see just
Speaker 1: David very quickly, is is we just assume there'll be
Speaker 1: other discussions. I mean, it's not a one off for
Speaker 1: President Trump, That's right, And I think that's what Democrats
Speaker 1: are weighing right now in terms of how they approach
Speaker 1: this particular nomination, how how full throatedly they'll go against
Speaker 1: this nominally looking ahead to who the next might be.
Speaker 1: Thanks for listening to the Bloomberg Surveillance Podcast. Subscribe and
Speaker 1: listen to interviews on iTunes, SoundCloud, or whichever podcast platform
Speaker 1: you prefer. I'm out on Twitter at Tom Keene. David
Speaker 1: Gura is at David Gura. Before the podcast, you can
Speaker 1: always catch us worldwide. I'm Bloomberg Radio, brought you by
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