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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether at the grocery store or

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Speaker 1: the trading floor. Find the Bloomberg p L Podcast on iTunes,

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Speaker 1: SoundCloud and at Bloomberg dot com pim Fox. It takes

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Speaker 1: a lot to survive in the jungle, in particular the

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Speaker 1: E t F jungle. I want to bring in my

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Speaker 1: colleague Eric Valtunes. He has an E t F analyst

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Speaker 1: for Bloomberg Intelligence, and he has great ideas. I love

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Speaker 1: talking with Eric. I'm very glad you could join us. Uh.

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Speaker 1: You know, we were talking yesterday about a couple of

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Speaker 1: moves that Fidelity has has made, uh and black Rock

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Speaker 1: has made to cut expenses as passive management takes a hold,

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Speaker 1: how much our investors prioritizing the cheapness of funds over

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Speaker 1: what they actually offer right now, it's it's everything, uh

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Speaker 1: that you know. The phrase I use his expense ratio

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Speaker 1: is the new past performance chart. I think this really

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Speaker 1: gets down to trust. I think investors just trust a

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Speaker 1: fee more than a pretty chart. Right now. And I

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Speaker 1: don't know if it's from decades of seeing the chart

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Speaker 1: buying into it. It's not working out because a lot

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Speaker 1: of times investors will buy in it after the chart

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Speaker 1: goes up and you know, it's hard to maintain our performance.

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Speaker 1: Or it's just this spread of information that's been going

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Speaker 1: on for about ten years that the Internet really helped

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Speaker 1: to get out there, which is how important fees are

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Speaker 1: in your in your final performance. Fees are a big

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Speaker 1: contributor and the one thing you can control. So give

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Speaker 1: us a sense of just how much more money has

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Speaker 1: gone to the cheapest fees versus the most expensive. I'll

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Speaker 1: throw out a few stats here. So last year, six

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Speaker 1: billion dollars went into ETFs. Over half of that money

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Speaker 1: went to products charging nine basis points or less UM.

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Speaker 1: So that's once that so basically free, basically free. Yeah,

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Speaker 1: I mean if you look at UM I've did this

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Speaker 1: study where I you know, put everything into different buckets.

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Speaker 1: It's going in active mutual funds. Funds that charge less

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Speaker 1: than forty basis points that are active saw inflows d

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Speaker 1: F A Vanguard or two big issuers in that area.

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Speaker 1: Index funds that charge less than twenty saw more inflows

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Speaker 1: than once charged forty So even within index funds, which

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Speaker 1: are already passive, there's the cost migration. So I think

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Speaker 1: when you look at the we put the flow every

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Speaker 1: mutual fund, share class and e T F on a

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Speaker 1: big spreadsheet, divided into buckets by expense ratios, and we

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Speaker 1: found that by the vast majority of money goes to

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Speaker 1: zero to ten basis points, then the next is ten

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Speaker 1: to twenty, and it cascades down to about forty. Then

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Speaker 1: at forty six it starts going down until plus ninety

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Speaker 1: is the biggest outflow. So there's definitely a big correlation

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Speaker 1: between the how much you charge and the flows you're seeing.

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Speaker 1: Are the e t F issuers as well as the

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Speaker 1: brokerage firms. Are they victims of their own success? And

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Speaker 1: how many people does it to run a business that

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Speaker 1: is going in this direction? Right? Good question. I have

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Speaker 1: a piece out today that looks at the fact that

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Speaker 1: you need human beings to do this. You also need

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Speaker 1: human beings to analyze ETFs. It's not all robots, but

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Speaker 1: I do think it's gonna definitely put some pressure on

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Speaker 1: the operations and the human element of running an asset manager.

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Speaker 1: We've already seen that. I mean, you wrote a story

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Speaker 1: just yesterday calling, uh, you know, with the situation of

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Speaker 1: pressure cooker for asset managers, and I think that's a

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Speaker 1: pretty good term. So they're probably gonna have to do

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Speaker 1: some things you saw Janice. I think this is the biggest,

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Speaker 1: biggest example, Janice got together with Henderson. So I think

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Speaker 1: you're gonna see more and more companies hooking up with

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Speaker 1: other companies to get big enough so they can lower

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Speaker 1: their fees and get scale going. And that will be

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Speaker 1: the new game for the next decade. All right, So

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Speaker 1: you see this migration toward passive, it doesn't this sort

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Speaker 1: of raise alarms that people are going at the wrong time.

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Speaker 1: I mean, the more people go into passive, the more

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Speaker 1: opportunities there ought to be for active investors to outperform. Now,

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Speaker 1: yes and no. So the fact that everybody's going into

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Speaker 1: passive has helped lift assets in the same indexes. So

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Speaker 1: right now, it's actually helping that there's this sort of

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Speaker 1: call we'll call it a mini bubble. Right a lot

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Speaker 1: of people are going into passive. It's lifting up stocks

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Speaker 1: in the SMP. In other words, it's a self fulfilling

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Speaker 1: prophecy because the more people go in, the more stocks rise,

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Speaker 1: and then they see good performance and they keep going in.

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Speaker 1: You talk to really smart managers that know their factors

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Speaker 1: back and forth. They claim that I'm just gonna sit

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Speaker 1: in value and wait till this little mini passive bubble

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Speaker 1: pops and I'll then I'll be the hero. The question

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Speaker 1: is when, because remember this isn't just the move to passive,

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Speaker 1: it's a cost migration. Just so happens that the cheapest

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Speaker 1: stuff is you know, index based, so passive is drawing

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Speaker 1: those assets. The quint is when will this all play out?

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Speaker 1: Right now, passive investments only own about twelve percent of

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Speaker 1: the stock market, so the majority is still in other things,

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Speaker 1: mostly active that so this pendulum could swing a lot further.

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Speaker 1: So if you're waiting, how long do you wait until

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Speaker 1: this happens? The second thing a smart Beta. You just

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Speaker 1: made the sales pitch for smart Beta rob or not?

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Speaker 1: He says, why would you want to buy an index

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Speaker 1: where they reward price and they give more waiting to

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Speaker 1: stuff that's bigger and pricier. You should come with me.

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Speaker 1: I actually put higher weightings and value things that are cheaper.

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Speaker 1: So smart Beta has funneled some money for people who

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Speaker 1: are investing based on what you just said, but still

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Speaker 1: using passive products to try to reward stocks that are

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Speaker 1: trading cheaper or or in a momentum spurt. That's the

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Speaker 1: whole smart beta sales pitch. You know, as you talk,

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Speaker 1: I just keep thinking, how much does passive have to

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Speaker 1: own before they've become a dominant force in a market?

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Speaker 1: And I think this is one big question a lot

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Speaker 1: of people are analyzing. There's not really a good answer

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Speaker 1: to it. You might say that there is, but well,

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Speaker 1: well we had an event. We had John Vogel he

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Speaker 1: said it could be nine before it's a problem. Wow.

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Speaker 1: Thanks very much. Eric Balcunis, he is an expert when

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Speaker 1: it comes to E t F. He's our senior et

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Speaker 1: F analyst for Bloomberg Intelligence and you can follow him

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Speaker 1: on Twitter at Eric Valtunist. Well, when we want to

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Speaker 1: know more about municipal bonds, we call on one person,

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Speaker 1: Joe Maisak. He is editor of Bloomberg Briefs for the

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Speaker 1: municipal market and he joins us. Now, Joe, thanks very

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Speaker 1: much for being here. Let's talk about municipal bonds and

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Speaker 1: what may or may not happen to the municipal bond market.

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Speaker 1: If the Fedow Reserve A deigns to increase interest rates

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Speaker 1: twenty five basis points in a couple of weeks, tons

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Speaker 1: of uh of actually good things follow on the hills

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Speaker 1: of of higher yields PIM. If we see the triple

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Speaker 1: a ten year ago to maybe four percent, I see

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Speaker 1: things like insurance rising. Uh, there will be the muni

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Speaker 1: junk bottle of revive swaps will come back. The auction

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Speaker 1: rate securities market, which has been sort of dead for um,

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Speaker 1: you know, since two thousand seven, that will probably revive. Um,

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Speaker 1: We're probably going to see a little help for public pensions.

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Speaker 1: And why don't I toss in a little bit uh

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Speaker 1: more stadium construction, uh to sort of go hand in

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Speaker 1: hand with muni junk. And right now the returns are

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Speaker 1: pretty good, right, muni bond returns in February, we're the

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Speaker 1: highest since two tho correct, Yes, and uh, you know

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Speaker 1: it's still you know, these are the yields have been

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Speaker 1: solo for so long. Uh, it's it's almost incredible how

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Speaker 1: flat the market has been about two and a half

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Speaker 1: percent and ten years. Okay, So one place that has

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Speaker 1: not been flat is with Puerto Rico municipal bonds. And

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Speaker 1: we did get some news this week with the new

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Speaker 1: governor ra Cio. We're proposing a fiscal plan that included,

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Speaker 1: uh it was it, coverage of about two thirds of

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Speaker 1: bond payments over the next I don't know, nine years

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Speaker 1: or so, a little little less than that. Uh, he

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Speaker 1: said about one point two billion. I think the control Board,

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Speaker 1: the oversight, the Federal Oversight Committee, Uh, you know, they

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Speaker 1: see him paying maybe eight million. The kind of surprising

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Speaker 1: thing is he also asked for a complete stay on

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Speaker 1: any litigation to be extended to the end of the year.

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Speaker 1: So bond holders are sort of up in arms about that. Yeah,

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Speaker 1: but they don't seem to care. I think they didn't

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Speaker 1: really respond much to this, did they. But the bond prices, Yeah,

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Speaker 1: the fact that, like, you know, all of a sudden,

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Speaker 1: the amount that's covered under this fiscal plan is completely

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Speaker 1: insufficient for what for to cover their losses, and people

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Speaker 1: are just sort of like, yeah, whatever, you know, it's

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Speaker 1: right now. They're going to enter the negotiation period with

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Speaker 1: the governor. And it's the surprising thing about the governors.

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Speaker 1: He can panned as the uh as the man who's

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Speaker 1: going to repay the debt, and now that he's in office,

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Speaker 1: repaying the debt is a lot less appetizing. Shall we say,

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Speaker 1: can we talk about some numbers, because I was just

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Speaker 1: looking at a comparison. California, which actually went re entered

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Speaker 1: the green muni market, uh this week with an issuance

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Speaker 1: California for a ten year averages two point six seven percent.

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Speaker 1: That's obviously triple tax free. New York State two point

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Speaker 1: three one percent, and then you've got these outliers Illinois

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Speaker 1: four point five seven percent. Tell us a little bit

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Speaker 1: about the volume of issuance, because supply also affects the price.

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Speaker 1: You know, this year we started off first year, I

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Speaker 1: think January was around thirty billion. We're probably up to

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Speaker 1: over the first two months maybe fifty five billion or so.

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Speaker 1: And this is off a little bit. Of course, last

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Speaker 1: you was a record pace. We had forward six billion,

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Speaker 1: So this year we're off a little bit. It's a

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Speaker 1: little slack, however, you know, you bring this up and

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Speaker 1: next week, all of a sudden, we see a whole

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Speaker 1: batch of state general obligation bonds, including two point four

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Speaker 1: billion from California. So the states seemed to be looking

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Speaker 1: to take advantage of maybe the last shot at rates

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Speaker 1: this low. One reason why mini bonds initially sold off

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Speaker 1: after President Trump was elected was because people were ratcheting

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Speaker 1: uh back their expectations for how high their taxes might

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Speaker 1: go and expect expecting some tax relief. This basically gives

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Speaker 1: less of a benefit to municipal bonds, which are tax free.

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Speaker 1: Now that we really have not seen a tax plan,

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Speaker 1: uh and we don't know how soon it will be implemented.

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Speaker 1: Is that part of what's bringing people back to the

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Speaker 1: mini market too. Well, they have to put their money

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Speaker 1: to work, and you have, uh, you know, tax concerns, um.

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Speaker 1: But you know, the whole tax picture I think has

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Speaker 1: sort of been put on the back burner for a while.

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Speaker 1: Like you say, it's was something that instead of coming

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Speaker 1: here in June, July or August, which is what the

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Speaker 1: administration has talked about, most people really think it's going

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Speaker 1: to be very late in the year, probably more like

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Speaker 1: next year. The administration has a lot uh to worry

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Speaker 1: about between now and then, especially the Healthcare Act. Thanks

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Speaker 1: very much for joining us. Joe Maisak. He is the

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Speaker 1: editor of Bloomberg Briefs on Municipal Markets. Always enjoyed listening

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Speaker 1: to you, and of course meanings We're gonna have to

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Speaker 1: wait and see what the foto reserved does. And maybe

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Speaker 1: this will increase the issuance of municipal bands well. And

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Speaker 1: this might actually help with the whole idea of infrastructure

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Speaker 1: spending uh, as President Trump has proposed, perhaps by a

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Speaker 1: sort of a back channel with private money pim fox.

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Speaker 1: There is so much data that is available today. There

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Speaker 1: are some good statistics about just how much the n

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Speaker 1: s A has, for example, compared to prior administrations during

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Speaker 1: the communist era, when people thought, you know, oh my gosh,

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Speaker 1: the government has such a handle on what everyone is doing.

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Speaker 1: But now we have so much data that we need

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Speaker 1: to rely on algorithms to sort through it and find patterns. Uh.

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Speaker 1: But are these algorithms really better at sifting through the data,

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Speaker 1: albeit the massive tropes that we have, and coming up

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Speaker 1: with conclusions and humans? I want to bring in Kathy

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Speaker 1: O'Neill Bloomberg View columnists h and also a mathematician who

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Speaker 1: has been a professor, hedge fund analyst and data scientist,

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Speaker 1: and she wrote a fabulous column about how in the

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Speaker 1: world of big data, more isn't always better. Kathy uh,

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Speaker 1: first of all. Just to put this into perspective, just

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Speaker 1: how prevalent are algorithms in decision making processes throughout the

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Speaker 1: economy at this point. How dependent are we upon them?

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Speaker 1: That's a great question, um. And people don't really realize

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Speaker 1: this because a lot of the algorithms are actually happening

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Speaker 1: behind the scenes and we can't even see them. But

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Speaker 1: it turns out algorithms are being used on basically every

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Speaker 1: important decision in somebody's life, every time they have an option,

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Speaker 1: and they're sort of competing with other people. So that

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Speaker 1: means you know, college admissions, getting a job, even while

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Speaker 1: you're on the job, how you're being evaluated, how much

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Speaker 1: you pay for insurance, you know, how much you you

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Speaker 1: what kind of ap are you get for credit? Um.

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Speaker 1: Even things like policing and how long you're going to

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Speaker 1: jail if you get if you if you're guilty. Um,

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Speaker 1: those are all determined by algorithms. Never mind all the

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Speaker 1: things that are happening online of course, and the political

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Speaker 1: micro targeting, all the ads you see on politics, which

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Speaker 1: or are all algorithmically defined. So yeah, it's it's absolutely everywhere. Um.

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Speaker 1: And what's especially concerning is the moments like when you're

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Speaker 1: trying to get a job and you send your resume

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Speaker 1: in and there are algorithms that filter your resume based

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Speaker 1: on you know, used to be just keyword searches, like

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Speaker 1: what kind of words did you say on your resume?

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Speaker 1: But now it's all sorts of other kinds of correlative

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Speaker 1: information about your resume and you will never know that.

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Speaker 1: Just to be clear, like, you'll either get a callback

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Speaker 1: or you won't. But if you don't get a callback,

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Speaker 1: you won't know why, and it might be because of

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Speaker 1: an algorithm. I wonder if you can give us an

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Speaker 1: example of an algorithm that's gone wrong. Yeah, well, I

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Speaker 1: actually wrote a book about this called Weapons of Mass Destruction. UM.

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Speaker 1: Very good book. I did read it. Oh, oh, thank

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Speaker 1: you so much, FIM. UM. So I would say, a

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Speaker 1: lot of algorithms go wrong, um for the people they

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Speaker 1: are targeted, but not necessarily for the people that build

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Speaker 1: the algorithms. So to be clear, UM, one of the

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Speaker 1: main points of the book is that, UM, what you

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Speaker 1: know It depends on this on your perspective on whether

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Speaker 1: something's going wrong. But one of the one of the

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Speaker 1: examples of my book, UM, it comes from the world

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Speaker 1: of education. UM. In their teacher assessment algorithms, and teachers

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Speaker 1: are basically being scored between zero and a hundred UM.

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Speaker 1: And I think that is probably the best example of

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Speaker 1: a terrible algorithm, because it's very inconsistent. I found a

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Speaker 1: teacher who got a ninety six one year and a

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Speaker 1: six another year UM. And another teacher got fired for

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Speaker 1: a bad score, even though she thinks that her score

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Speaker 1: was artificially low because other teachers cheating. UM. And there's

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Speaker 1: I mean, I think the critical point about these algorithms

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Speaker 1: isn't that they're bad, because of course there's bad algorithms

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Speaker 1: out there. The critical point is that they're being used

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Speaker 1: as if they're scientifically they have scientific authority. UM. So

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Speaker 1: people trust them in a kind of under an overexaggerated

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Speaker 1: way because of their mathematical nature. And so that's one

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Speaker 1: of the things I was trying to get go after

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Speaker 1: in my book. As a mathematician, I don't want people

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Speaker 1: to blindly trust mathematics. But the point of mathematics is

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Speaker 1: that it's actually supposed to clarify things, not obfuscate them.

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Speaker 1: Well to that point, how can companies and universe these

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Speaker 1: make sure that their algorithms are doing the right thing?

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Speaker 1: I mean, what's the check here on how to make

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Speaker 1: the algorithms better. The answer isn't necessarily for a human

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Speaker 1: being to be trying to sift through all the data themselves,

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Speaker 1: because at this point it's that's an unsustainable solution given

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Speaker 1: the amount of data that a lot of these algorithms

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Speaker 1: are tasked with the processing. Absolutely true, and I'm not

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Speaker 1: I am not anti algorithm whatsoever. What I'm trying to

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Speaker 1: um suggest um is that we create standards of evidence

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Speaker 1: that the algorithms are meaningful, that they have statistical meaning,

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Speaker 1: but they're also that they're fair, and they're they're legal. Um.

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Speaker 1: A lot of the algorithms I examined in my book

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Speaker 1: actually I think are probably illegal. But because regulators don't

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Speaker 1: know how to examine algorithms, um, they're you know, companies

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Speaker 1: are getting away with stuff. So in particular with the

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Speaker 1: algorithms for hiring, they're kind of replacing their HR divisions

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Speaker 1: with algorithms without making sure that all those all the

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Speaker 1: algorithms are actually you know, they reflect fair hiring practices,

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Speaker 1: which there's plenty of laws around that. So my point

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Speaker 1: is like we need to create evidence and to demand

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Speaker 1: evidence from the people that build these algorithms and use

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Speaker 1: all these algorithms that what they're doing is actually legal

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Speaker 1: and fair. A point to you, is it possible that

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Speaker 1: what's going on is algorithms are being used to cut

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Speaker 1: costs in a corporate setting, and that the reason it's

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Speaker 1: being done is because then there is no personal accountability

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Speaker 1: for the result, that is, you nailed it on the head,

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Speaker 1: Like I observe just many, many examples of these algorithms

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Speaker 1: that are what I call weapons of math destruction, and

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Speaker 1: they're very powerful, their secret and their destructive. And one

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Speaker 1: of the things I noticed sort of after writing the

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Speaker 1: book is that there's a kind of certain characteristics of

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Speaker 1: a situation that are ripe for these kinds of algorithms.

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Speaker 1: And it's exactly what you just said. It's when people

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Speaker 1: don't want to take personal responsibility for tricky decisions. Tricky

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Speaker 1: is asians like is this a good teacher or not?

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Speaker 1: Is this a good applicant or not? Those are tricky

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Speaker 1: and they know that it can go wrong, and they

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Speaker 1: would like to say it's not me, it's the algorithm.

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Speaker 1: And that's when the situation is right for for pretty

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Speaker 1: nasty things happen. Well, it certainly reminds me of the

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Speaker 1: Stanley Kubrick movie, Uh, Doctor Strange Love, because right, I

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Speaker 1: mean the doomsday machine. It just takes it takes over,

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Speaker 1: and there's no way to really get a human being

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Speaker 1: in between that and and the dire consequences. Thank you

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Speaker 1: very much. Cathy O'Neil is a Bloomberg View columnists and

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Speaker 1: you can follow her on Twitter at math Babe dot org.

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Speaker 1: Yes indeed, and she is also the author of the

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Speaker 1: book Weapons of Math Destruction. A lot has been said

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Speaker 1: about President Trump's immigration policies, particularly as they pertain to

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Speaker 1: Mexico and our other southern neighbors. I want to bring

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Speaker 1: in someone who could talk more about that. Hector Barretto,

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Speaker 1: who is chairman of the Latino Coalition and former US

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Speaker 1: Small Business Administrator under George W. Bush. Hector, I'm glad

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Speaker 1: you could join us. First, I want to start with

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Speaker 1: a question, how different are President Trump's proposed immigration policies

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Speaker 1: to the ones that were implemented under former President Barack Obama.

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Speaker 1: I think we're saying under Bush or who I worked for. UM,

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Speaker 1: you know, the policies are very different. Obviously, every administration

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Speaker 1: has a different take on it. We don't know all

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Speaker 1: the specifics about what the immigration policy is going to be,

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Speaker 1: especially going forward with regards to countries like Mexico. You know,

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Speaker 1: I worked for President Bush, and the first thing he

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Speaker 1: did when he uh got into office was he put

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Speaker 1: forth in an initiative with Mexico called the Partnership for Prosperity.

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Speaker 1: We worked on that for eight years while I was

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Speaker 1: in the administration. Uh. Less so in the last administration

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Speaker 1: in terms of things like the Partnership for Prosperity. Obviously,

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Speaker 1: there was never comprehensive immigration reform under the Obama administration,

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Speaker 1: and we don't know what the immigration reform proposals are

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Speaker 1: going to be uh in in this administration. Do you

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Speaker 1: think that immigration policies need to be reformed in the

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Speaker 1: last Absolutely? Well, I mean, you know, I think everybody

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Speaker 1: stipulates that our immigrations UH system are policies towards immigration

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Speaker 1: don't really work for anybody. They don't work for the

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Speaker 1: immigrants that are here, they don't work for the economy,

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Speaker 1: they don't really work for anybody. So, you know, everybody

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Speaker 1: basically says it's a broken system and we need to

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Speaker 1: fix it, but nobody can coalesce around what that looks

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Speaker 1: like and so that's why we keep kicking this can

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Speaker 1: down the road. Remember, we haven't had immigration reform in

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Speaker 1: the United States since nineteen six that was President Reagan.

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Speaker 1: So we've been thirty years dealing with a lot of

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Speaker 1: these issues. And I think a lot of people on

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Speaker 1: both sides, they all are very frustrated and and hope

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Speaker 1: bowl that we can get something done in this administration. Hector,

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Speaker 1: I want to just bring a little bit more detailed

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Speaker 1: to the conversation. You previously before your role in a

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Speaker 1: business on a large scale, you worked in your family's restaurant, uh,

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Speaker 1: import export business, construction accompany, and so on. In US,

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Speaker 1: Hispanic buying power was larger than the gross domestic product

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Speaker 1: of Mexico and it is growing substantially. Uh, we're talking

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Speaker 1: about a buying power of about thirteen point nine trillion dollars, right,

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Speaker 1: that's uh, that's the total. Is there a way for

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Speaker 1: this immigration plus a I don't know if you want

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Speaker 1: to call it immigration, but a nafter revamp, trade policy

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Speaker 1: revamp that could actually make that an even more a

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Speaker 1: stronger figure. How can it help the business about it? Look,

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Speaker 1: you know, I serve in a lot of different capacities.

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Speaker 1: I'm also on the board of the US Chamber of Commerce.

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Speaker 1: This has been a major, major focus and an initiative

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Speaker 1: for us for many, many years. And these things are connected. Uh,

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Speaker 1: you know you were talking about the family businesses. You know,

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Speaker 1: I'm the son of an immigrant. My father, Hector Bretto Sr.

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Speaker 1: Was an immigrant from Mexico in the fifties and he

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Speaker 1: was the founder of the U. S Hispanic Chamber of Commerce.

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Speaker 1: We've learned about these issues all my life in our family.

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Speaker 1: We know how important that they are, and they are interconnected. Look,

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Speaker 1: purchasing power in the United States. Just Hispanics in the

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Speaker 1: United States is one point five trillion dollars. My father

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Speaker 1: used to always say, you know, the Hispanics in the

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Speaker 1: United States have more purchasing power than all the the

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Speaker 1: the Hispanics in Mexico and a lot of countries in

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Speaker 1: Latin America. And and that is going to grow Hispanic business,

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Speaker 1: which I'm very passionate. About four million companies that are

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Speaker 1: generating close to seven hundred billion in revenues and they

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Speaker 1: could double every five years. And many of those have

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Speaker 1: connections and linkages back to Mexico and other parts of

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Speaker 1: Latin America. So there. You know, there are a lot

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Speaker 1: of reasons we should have immigration re form, and there's

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Speaker 1: a lot of reasons we had to look at some

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Speaker 1: of these trade deals. But the first reason is it's

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Speaker 1: in our self interest in this country. And so hopefully

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Speaker 1: we're gonna see some leadership coming out of Congress, coming

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Speaker 1: out of the White House, and it needs to be bipartisan.

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Speaker 1: There's no way, we've learned this over thirty years that

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Speaker 1: you can make this kind of change without having buy

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Speaker 1: in from both sides. You know, as you talk, it's

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Speaker 1: very optimistic view of things, coalition bringing together. It doesn't

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Speaker 1: really mesh with some of the rhetoric that we've heard.

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Speaker 1: We've heard about building the wall, we've heard about those

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Speaker 1: bad ombraise, We've heard about a lot of things from

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Speaker 1: President Trump to get out of this country. We've heard

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Speaker 1: about ice agents going and rounding people up. I mean,

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Speaker 1: are your members scared, Well, there's a lot of people

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Speaker 1: that are scared, not just in my community, but there's

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Speaker 1: a lot of members in my and my group who

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Speaker 1: are also very optimistic. And you know, business people tend

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Speaker 1: to be up a mystic. We see the glasses half full.

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Speaker 1: We wouldn't go into business if we didn't, if we didn't,

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Speaker 1: if we didn't, if we didn't, think that understood. But

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Speaker 1: do you think that as as such? Right now? Are

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Speaker 1: people worried about their businesses getting harmed because of exporting

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Speaker 1: power to Mexico and a possible deterioration of the relationship

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Speaker 1: the US has with Mexico. Look, you probably know this

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Speaker 1: is that small business companies in the United States is up,

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Speaker 1: you know, almost at historic highs right now. And it's

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Speaker 1: not historic highs because they feel that their businesses are

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Speaker 1: going to be failing. They felt that over the last

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Speaker 1: eight years, they felt that were all these barriers. But

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Speaker 1: when they hear the administration saying, hey, look we get it.

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Speaker 1: We've got a lower regulations on you, we've got a

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Speaker 1: lower taxes on You've gotta make healthcare easier for you

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Speaker 1: to get. And yes, we've got to renegotiate trade deals

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Speaker 1: because you know what small businesses are the ones that

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Speaker 1: don't participate in trade deals. Were of all the companies

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Speaker 1: that do international trade, and we're less than thirty percent

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Speaker 1: of the trade dollars and that's not lost on those

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Speaker 1: twenty seven million small businesses. So you know, uh, we

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Speaker 1: hear a lot of things, and it goes back and forth.

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Speaker 1: We're trying to focus on the things that are actually happening,

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Speaker 1: the real things that are happening, not the stuff that

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Speaker 1: you know gets scandalized. And every day there's a there's

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Speaker 1: a new threat to to the world as we know it.

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Speaker 1: I mean, we're gonna be paying very close attention and

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Speaker 1: we're gonna be calling balls and strikes. We're not going

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Speaker 1: to agree with everything that comes out of Washington, d C.

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Speaker 1: But where we can, where we can help create that

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Speaker 1: environment so we can start more small businesses instead of

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Speaker 1: having them fail as they have over the last eight years.

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Speaker 1: We're very interested and focused on that. We have to

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Speaker 1: have a seat at the table. We have to be

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Speaker 1: speaking to the people that are in power. Not everybody

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Speaker 1: agrees and not ever. That's why we have elections. But

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Speaker 1: after the election is over, it would be irresponsible and

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Speaker 1: we think mal practice for us to just to check

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Speaker 1: out for the next four years. Hector, I want to

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Speaker 1: thank you very much for coming in and sharing your

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Speaker 1: thoughts with us. So this is a very important topic.

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Speaker 1: Hector Barretto is the chairman of the Latino Coalition. They

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Speaker 1: are based in uh Irvine, California, and in Washington, do

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Speaker 1: you see him? Well, of course, and I'm sure you're

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Speaker 1: there quite a bit these days. We are. We have

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Speaker 1: a major event next week, so thank you. Having'll give

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Speaker 1: you ten seconds tell us about it. We're having a

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Speaker 1: policy event Latino Coalition. Sp administrators coming over the White

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Speaker 1: House at a very high level will be participating. We've

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Speaker 1: got a half a dozen Congressmen. And if you're in

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Speaker 1: Washington and interested in attending a small business event with

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Speaker 1: the fastest growing segment of small business, you gotta be

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Speaker 1: at the Latino Coalition next Thursday in Washington, d C.

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Speaker 1: All right, see there, we give we give you the

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Speaker 1: little plug. That's good thing for you, you know, at

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Speaker 1: least excuse me, I was noting that. You know, Mexico

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Speaker 1: is no longer the top origin country among the most

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Speaker 1: recent immigrants to the United States. China and India have

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Speaker 1: overtaken Mexico as the most common countries of origin. Hector Burrado,

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Speaker 1: thank you very much once again, Chairman of the Latino Coalition.

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Speaker 1: Thanks for listening to the Bloomberg pien L podcast. You

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Speaker 1: can subscribe and listen to interviews at iTunes, SoundCloud or whatever.

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Speaker 1: Podcast platform you prefer. I'm pim Fox. I'm out there

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Speaker 1: on Twitter at pim Fox. I'm out there on Twitter

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Speaker 1: at Lisa Abramo. It's One before the Podcast. You can

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Speaker 1: always catch us worldwide on Bloomberg Radio