1 00:00:00,240 --> 00:00:04,040 Speaker 1: Runt you by Bank of America Mary Lynch. With virtual reality, 2 00:00:04,320 --> 00:00:09,719 Speaker 1: virtually everything will change. Discover opportunities in a transforming world. 3 00:00:10,119 --> 00:00:14,440 Speaker 1: Be of a, mL dot Com, slash VR, Mary Lynch, 4 00:00:14,520 --> 00:00:29,240 Speaker 1: Pierced Fenner and Smith Incorporated. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:29,280 --> 00:00:32,760 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:32,840 --> 00:00:37,640 Speaker 1: insight from the best of economics, finance, investment, and international relations. 7 00:00:38,080 --> 00:00:43,640 Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, 8 00:00:43,640 --> 00:00:51,000 Speaker 1: and of course on the Bloomberg. We start the morning 9 00:00:51,040 --> 00:00:53,400 Speaker 1: off with a surveillance correction. It is not Tom Keen 10 00:00:53,440 --> 00:00:55,760 Speaker 1: and David Gray. It's Tom Keene and me Michael McKee 11 00:00:55,760 --> 00:00:58,640 Speaker 1: sitting in for David Gura. He'll be out in sun 12 00:00:58,760 --> 00:01:03,360 Speaker 1: Valley later this week, poor guy. Uh Well, here from him. 13 00:01:03,440 --> 00:01:06,560 Speaker 1: I'm sure I'll be talking to the CEOs out there 14 00:01:07,160 --> 00:01:10,559 Speaker 1: who are gathering for the annual meeting in Sun Valley, 15 00:01:10,600 --> 00:01:13,200 Speaker 1: and that will be quite interesting. But the rest of 16 00:01:13,280 --> 00:01:15,280 Speaker 1: us have to get through the week and get through 17 00:01:15,319 --> 00:01:17,399 Speaker 1: the summer. And for those of you listening to us 18 00:01:17,440 --> 00:01:19,959 Speaker 1: on Bloomberg eleven three oh in New York on your 19 00:01:19,959 --> 00:01:24,640 Speaker 1: way into Penn Station, our deepest sympathies. It all starts 20 00:01:24,680 --> 00:01:27,760 Speaker 1: today the summer of hell, as the Governor of New 21 00:01:27,800 --> 00:01:29,920 Speaker 1: York puts it, as they rebuild the tracking and out 22 00:01:29,920 --> 00:01:33,440 Speaker 1: of Penn Station. So try to relax, listen to Tom 23 00:01:33,520 --> 00:01:36,559 Speaker 1: and I, and we will have a better week. I'm 24 00:01:36,600 --> 00:01:40,600 Speaker 1: sure for John Tucker's laughing trying to relax by listening 25 00:01:40,640 --> 00:01:44,200 Speaker 1: to you. Well, anyway, we're gonna do our best to 26 00:01:44,240 --> 00:01:47,880 Speaker 1: try to keep you entertained. Good morning, Thomas, Um, it's 27 00:01:47,880 --> 00:01:50,880 Speaker 1: like old times again. It is. It is good morning. 28 00:01:51,160 --> 00:01:53,440 Speaker 1: It's nice to be here. We have we have president tweeting. 29 00:01:53,440 --> 00:01:55,880 Speaker 1: We'll have some of the updates on was talking about healthcare? 30 00:01:56,000 --> 00:02:00,000 Speaker 1: When is the president not tweeting it? Um? And Car 31 00:02:00,000 --> 00:02:02,760 Speaker 1: of weinbergers with us here from high Frequency Economics. So 32 00:02:03,120 --> 00:02:04,920 Speaker 1: it is an old home week for all of us. 33 00:02:05,760 --> 00:02:07,640 Speaker 1: I'm so I'm using here. You talk about the summer 34 00:02:07,680 --> 00:02:10,000 Speaker 1: of hell at Penn Station last so I go through 35 00:02:10,000 --> 00:02:11,799 Speaker 1: it every week, and I thought last summer, when things 36 00:02:11,880 --> 00:02:14,200 Speaker 1: were normal, was a summer of hell. I don't really 37 00:02:14,200 --> 00:02:16,320 Speaker 1: see how they could possibly make it worse for those 38 00:02:16,360 --> 00:02:19,240 Speaker 1: of you around the nation, Um, who are listening to us. 39 00:02:19,760 --> 00:02:21,840 Speaker 1: The tracks that run in and out of Penn Station 40 00:02:21,840 --> 00:02:24,200 Speaker 1: are very old deferred maintenance. You want to talk about 41 00:02:24,200 --> 00:02:28,079 Speaker 1: an infrastructure plan, that's where they could use it. Anyway. UM, 42 00:02:28,160 --> 00:02:30,600 Speaker 1: for months now, trains have been derailing coming in and 43 00:02:30,639 --> 00:02:33,119 Speaker 1: out of the station. So they decided to just rip 44 00:02:33,200 --> 00:02:36,520 Speaker 1: the scab, you know, go all at once and fix 45 00:02:36,560 --> 00:02:39,200 Speaker 1: all the tracks. So they have to change all the timetables. 46 00:02:39,200 --> 00:02:42,760 Speaker 1: And we should point out this is just a temporary measures. 47 00:02:43,120 --> 00:02:48,600 Speaker 1: Temporary anyway, if you commute into and out of New York, 48 00:02:48,600 --> 00:02:51,760 Speaker 1: it's going to be difficult on the trains if you're 49 00:02:51,760 --> 00:02:53,360 Speaker 1: going in and out of Penn Station. So that's what 50 00:02:53,360 --> 00:02:55,040 Speaker 1: we're talking about, and it'll be a big topic in 51 00:02:55,080 --> 00:02:56,799 Speaker 1: New York and the rest of you are just very 52 00:02:56,800 --> 00:02:58,720 Speaker 1: glad you can jump in your cars and drive to 53 00:02:58,760 --> 00:03:02,480 Speaker 1: work and forget about us. UM can't do that. Uh 54 00:03:02,680 --> 00:03:05,400 Speaker 1: in uh Washington, if you're the President United States, you 55 00:03:05,440 --> 00:03:07,720 Speaker 1: have to ride around in limousine. You know, you don't 56 00:03:07,760 --> 00:03:11,400 Speaker 1: get to drive station. As anybody asked that question, that's 57 00:03:11,440 --> 00:03:14,480 Speaker 1: a good question his hometown. I know, we were just 58 00:03:14,480 --> 00:03:17,200 Speaker 1: talking with Chandra on television about you know that is 59 00:03:17,200 --> 00:03:19,720 Speaker 1: the president engaged in this infrastructure project? This is a 60 00:03:19,760 --> 00:03:23,120 Speaker 1: real infrastructure project. Has he ever visited the site to 61 00:03:23,240 --> 00:03:25,239 Speaker 1: just see what it's like to be in Penn Station, 62 00:03:25,280 --> 00:03:28,040 Speaker 1: to be like a real American. Well he did. As 63 00:03:28,040 --> 00:03:30,720 Speaker 1: you say, he's from New York, he probably has been there. 64 00:03:30,800 --> 00:03:32,520 Speaker 1: He certainly was a Grand Central because that was his 65 00:03:32,560 --> 00:03:35,600 Speaker 1: first big project, the Hyatt hotel that's adjacent to Grand Central. 66 00:03:35,600 --> 00:03:39,080 Speaker 1: So I don't know about Penn Station, but infrastructure seems 67 00:03:39,360 --> 00:03:42,520 Speaker 1: um a long way away. And you know, Amtrak sent 68 00:03:42,600 --> 00:03:44,600 Speaker 1: me an email as a user from upstate that one 69 00:03:44,640 --> 00:03:46,600 Speaker 1: of my trains is going to be rerouted through to 70 00:03:46,760 --> 00:03:50,120 Speaker 1: Grand Central. They apologize for the inconvenience, and I said, 71 00:03:50,440 --> 00:03:52,600 Speaker 1: go for it, you know, just keep it that way. 72 00:03:52,640 --> 00:03:55,120 Speaker 1: You know, it has to be a big improvement. We 73 00:03:55,160 --> 00:03:58,440 Speaker 1: have a headline here, Tom, Cincinnati Bell is going to 74 00:03:58,560 --> 00:04:02,360 Speaker 1: combine with Hyatt, I n Telecom, and O n X. 75 00:04:03,320 --> 00:04:06,080 Speaker 1: I think that needs research, John Tucker. I think we 76 00:04:06,120 --> 00:04:09,240 Speaker 1: need to research that transaction in somewhere like in the 77 00:04:09,360 --> 00:04:15,320 Speaker 1: first week of February. They obviously uh serve the Cincinnati area, 78 00:04:15,400 --> 00:04:19,400 Speaker 1: Northern Kentucky, etcetera. Cincinnati Bell, and we know where Hawaiian 79 00:04:19,520 --> 00:04:23,920 Speaker 1: Telecom is price about eight hundred and fifty millions. Earlier, 80 00:04:24,240 --> 00:04:28,279 Speaker 1: Bloomberg was reporting so anyway, that deal going through. Good 81 00:04:28,279 --> 00:04:31,799 Speaker 1: morning everyone, Bloomberg Surveillance. We welcome all of you worldwide 82 00:04:31,839 --> 00:04:36,520 Speaker 1: across this nation series XM channel one in Boston, Bloomberg 83 00:04:36,520 --> 00:04:40,200 Speaker 1: one or six one FM, Good Morning FM in Washington 84 00:04:40,839 --> 00:04:43,440 Speaker 1: three oh here, and good morning in Penn station. Many 85 00:04:43,440 --> 00:04:45,520 Speaker 1: people like wired up actually written to a guy in 86 00:04:45,560 --> 00:04:47,080 Speaker 1: the street once he goes, oh, it's you when he 87 00:04:47,160 --> 00:04:50,160 Speaker 1: was listening to us, Mike, you and me. And this 88 00:04:50,200 --> 00:04:53,840 Speaker 1: is a couple of years ago on on radio as 89 00:04:53,880 --> 00:04:56,479 Speaker 1: well on the West Coast, very early nine sixty the 90 00:04:56,480 --> 00:05:00,200 Speaker 1: Bay Area, San Francisco. Good morning, Carl Weinberg with this 91 00:05:00,320 --> 00:05:03,400 Speaker 1: with high frequency economist Carl Madame mcguard in the I 92 00:05:03,520 --> 00:05:07,000 Speaker 1: m F. Say, we've got okay global GDP growth, emerging 93 00:05:07,080 --> 00:05:10,680 Speaker 1: market growth as well. How are the developed nations doing? Yeah, 94 00:05:10,720 --> 00:05:13,920 Speaker 1: you know they're doing they're doing better. How that they're 95 00:05:13,960 --> 00:05:17,799 Speaker 1: doing better? The emerging countries are doing better than the 96 00:05:17,880 --> 00:05:21,520 Speaker 1: advanced countries are for sure. Although to be fair, any 97 00:05:21,560 --> 00:05:27,280 Speaker 1: emerging market economy that produces a commodity, particularly oil, particularly 98 00:05:27,640 --> 00:05:30,599 Speaker 1: things like iron or steel, things like that, you know 99 00:05:30,640 --> 00:05:33,000 Speaker 1: they're going to be in trouble in a number of 100 00:05:33,040 --> 00:05:35,760 Speaker 1: different dimensions. They're going to face a reduction in demand, 101 00:05:35,760 --> 00:05:38,680 Speaker 1: they're going to reface a reduction in revenue, they're facing 102 00:05:38,720 --> 00:05:42,000 Speaker 1: adverse terms of trade. So it's not all quite as 103 00:05:42,120 --> 00:05:46,080 Speaker 1: keen as the picture that's being painted. I wouldn't be 104 00:05:46,120 --> 00:05:48,520 Speaker 1: surprised if oil prices stay where they are, and I 105 00:05:48,560 --> 00:05:50,760 Speaker 1: actually expect they're going to go lower, that the i 106 00:05:50,920 --> 00:05:53,520 Speaker 1: m F will mark down its forecast both for world 107 00:05:53,600 --> 00:05:58,240 Speaker 1: trade and for world GDP growth again in their forecasts 108 00:05:58,240 --> 00:06:01,159 Speaker 1: for the head of their annual things in Washington this fall. 109 00:06:01,279 --> 00:06:03,960 Speaker 1: I know you're an economist and not an investment advisor, 110 00:06:04,040 --> 00:06:06,760 Speaker 1: but would you put money into an emerging market or 111 00:06:07,200 --> 00:06:10,080 Speaker 1: is it too are they too dependent at this point 112 00:06:10,160 --> 00:06:12,679 Speaker 1: on what happens in the developed nations that it would 113 00:06:12,800 --> 00:06:15,840 Speaker 1: be a risk. So I don't give investment advice, but 114 00:06:16,000 --> 00:06:18,160 Speaker 1: it seems to me that if you're looking at it, 115 00:06:18,240 --> 00:06:20,800 Speaker 1: say a place like China, which grows at six and 116 00:06:20,880 --> 00:06:23,440 Speaker 1: three quarter percent in a bad year, and you hold 117 00:06:23,480 --> 00:06:26,200 Speaker 1: that up against the United States, which grows at two 118 00:06:26,200 --> 00:06:29,320 Speaker 1: percent plus in a good year, then you kind of wonder, 119 00:06:29,480 --> 00:06:31,880 Speaker 1: you know, why wouldn't you want to put your investment 120 00:06:31,920 --> 00:06:34,920 Speaker 1: money into the economy that's growing faster? If you're interested 121 00:06:34,920 --> 00:06:38,000 Speaker 1: in something like cars. Why would a car company or 122 00:06:38,040 --> 00:06:40,800 Speaker 1: an investor investing in a car company want to invest 123 00:06:40,839 --> 00:06:44,200 Speaker 1: in an auto company that only sells replacement vehicles in 124 00:06:44,240 --> 00:06:46,760 Speaker 1: a market of three hundred million people when it can 125 00:06:46,920 --> 00:06:49,800 Speaker 1: invest in a company that is selling to fill six 126 00:06:49,880 --> 00:06:54,040 Speaker 1: hundred and fifty million empty driveways. Al Right, first cars, 127 00:06:54,400 --> 00:06:56,960 Speaker 1: first purchases of cars for many of those people. So 128 00:06:57,040 --> 00:07:00,160 Speaker 1: I think that the long term growth potential is in 129 00:07:00,200 --> 00:07:03,159 Speaker 1: the emerging markets. Short term, there'll be bumps, but longer 130 00:07:03,279 --> 00:07:06,719 Speaker 1: term that's where the action is. I think, uh, developed 131 00:07:06,720 --> 00:07:10,000 Speaker 1: markets the well, they're not all developed markets in the 132 00:07:10,040 --> 00:07:13,960 Speaker 1: G twenty because certainly, what did you think of the 133 00:07:14,040 --> 00:07:16,040 Speaker 1: G twenty now that it is over? And I mean, 134 00:07:16,200 --> 00:07:20,560 Speaker 1: was there anything actionable for investors? Anything, any takeaways that 135 00:07:20,960 --> 00:07:24,360 Speaker 1: the Wall Street community would care about? Not really a 136 00:07:24,400 --> 00:07:28,840 Speaker 1: lot of takeaways for Wall Street. Uh, certainly nothing out 137 00:07:28,880 --> 00:07:32,480 Speaker 1: of the bilaterals. We've were probably going to see tariffs 138 00:07:32,520 --> 00:07:35,800 Speaker 1: on steel, but everybody knew about that beforehand. What struck 139 00:07:35,960 --> 00:07:39,320 Speaker 1: me for people who just think about the world, and 140 00:07:39,360 --> 00:07:42,360 Speaker 1: again we're gonna bring China into this conversation at this point, 141 00:07:42,680 --> 00:07:45,640 Speaker 1: is that the G twenty didn't do anything. It fractioned 142 00:07:45,640 --> 00:07:48,880 Speaker 1: itself and was divided on key issues. And just a 143 00:07:48,880 --> 00:07:52,080 Speaker 1: couple of months before, China had its One Belt, One 144 00:07:52,160 --> 00:07:55,400 Speaker 1: Road Forum in Beijing on the fourteenth of May, and 145 00:07:55,440 --> 00:07:58,600 Speaker 1: they attracted twenty nine heads of state, thirty counting the 146 00:07:58,600 --> 00:08:03,200 Speaker 1: President g himself, another twenty six ministerial level delegations, and 147 00:08:03,240 --> 00:08:05,920 Speaker 1: they all sat down and they all agreed that expanding 148 00:08:05,960 --> 00:08:09,000 Speaker 1: trade along the silk roads that China is building is 149 00:08:09,040 --> 00:08:11,320 Speaker 1: a great idea, and we're all able to come together 150 00:08:11,360 --> 00:08:14,160 Speaker 1: on common policies to make that. So. So if I 151 00:08:14,240 --> 00:08:16,600 Speaker 1: had a big ah, has everybody left the G twenty 152 00:08:16,680 --> 00:08:20,080 Speaker 1: this week? It's that China's One Belt, One Road Forum 153 00:08:20,440 --> 00:08:23,280 Speaker 1: is probably the successor to G twenty in terms of 154 00:08:23,320 --> 00:08:26,040 Speaker 1: moving the world forward. As the U S dis we 155 00:08:26,080 --> 00:08:27,840 Speaker 1: have take a surveillance time out here and ask for 156 00:08:27,840 --> 00:08:30,200 Speaker 1: a definition. I mean, we talk a lot about one Belt, 157 00:08:30,240 --> 00:08:32,679 Speaker 1: one Road. What does that mean? What? What is this 158 00:08:32,760 --> 00:08:35,080 Speaker 1: that you're talking about? So it's a on Tucker wants 159 00:08:35,120 --> 00:08:37,559 Speaker 1: to know. It's a it's a project that is to 160 00:08:37,800 --> 00:08:41,000 Speaker 1: designed to build a land route and a maritime route 161 00:08:41,200 --> 00:08:46,880 Speaker 1: that connects East Asia with Europe directly over Central Asia. 162 00:08:47,240 --> 00:08:50,520 Speaker 1: And what it is it's a combination of railroads, road roads, 163 00:08:50,720 --> 00:08:54,600 Speaker 1: shipping lanes, all the infrastructure along the way. It gets 164 00:08:54,640 --> 00:08:57,920 Speaker 1: goods from Asia to Europe in nineteen days instead of 165 00:08:57,960 --> 00:09:01,240 Speaker 1: sixty days at a much lower Austin sending up by vote. 166 00:09:01,360 --> 00:09:05,920 Speaker 1: And most importantly, it connects four point four billion consumers 167 00:09:07,360 --> 00:09:12,080 Speaker 1: of the world's population, producing of world GDP, So a 168 00:09:12,080 --> 00:09:14,240 Speaker 1: guy who makes socks in England can now sell them 169 00:09:14,280 --> 00:09:16,640 Speaker 1: to four billion more customers than he could be four 170 00:09:16,679 --> 00:09:18,679 Speaker 1: I want to come back and talk about domestic policy, 171 00:09:18,720 --> 00:09:21,480 Speaker 1: but very quickly here Sale Copper is a superb article 172 00:09:21,480 --> 00:09:24,160 Speaker 1: out today with a great quote, a train wreck of 173 00:09:24,200 --> 00:09:27,160 Speaker 1: a calendar. Do you and Jim O'Sullivan agree. It's a 174 00:09:27,200 --> 00:09:30,320 Speaker 1: train wreck of a legislative calendar, It's a chain wreck 175 00:09:30,440 --> 00:09:33,480 Speaker 1: of a legislative agenda. The policy of the party in 176 00:09:33,600 --> 00:09:38,160 Speaker 1: control of Congress cannot agree with either themselves or with 177 00:09:38,240 --> 00:09:40,880 Speaker 1: their president, is to what ought to be done. Nothing's 178 00:09:40,880 --> 00:09:43,560 Speaker 1: going to happen. And I've seen Mike McKee, one of 179 00:09:43,559 --> 00:09:46,760 Speaker 1: our best best guest, Greg Valier of Horizon Investments, he 180 00:09:46,880 --> 00:09:50,320 Speaker 1: has changed dramatically in the last ten days to a 181 00:09:50,400 --> 00:09:53,400 Speaker 1: much more dark view of the process. And he said 182 00:09:53,440 --> 00:09:56,400 Speaker 1: on Bloomberg Surveillance this morning he thinks the house is 183 00:09:56,679 --> 00:10:00,160 Speaker 1: in play, totally in play for two thousand eighteen. It's 184 00:10:00,160 --> 00:10:02,640 Speaker 1: interested as well, with Greg Vot this morning writing that 185 00:10:02,760 --> 00:10:05,800 Speaker 1: the Republican's biggest enemies have turned out to be Republicans, 186 00:10:06,240 --> 00:10:08,360 Speaker 1: and you know, to their own surprise. He went over 187 00:10:08,400 --> 00:10:11,199 Speaker 1: to Europe and had a latte with Francie Lacqui or whatever, 188 00:10:11,240 --> 00:10:13,160 Speaker 1: and he just came back gloom me. I'm like, you know, 189 00:10:14,080 --> 00:10:17,960 Speaker 1: you know, just just a shocking change in young Valier's tone. 190 00:10:17,960 --> 00:10:20,640 Speaker 1: We're gonna continue with Carl Weimberg a lots to talk about. 191 00:10:20,640 --> 00:10:23,080 Speaker 1: Mike McKee is loaded up with do you know what 192 00:10:23,120 --> 00:10:25,920 Speaker 1: it's like, folks? I mean, like I talk about the news, 193 00:10:26,080 --> 00:10:29,680 Speaker 1: Michael Michael Barr talks about the news. Mike McKee, Actually 194 00:10:30,280 --> 00:10:33,600 Speaker 1: Michael Barr, Mike McKee is in the room when chare 195 00:10:33,720 --> 00:10:38,080 Speaker 1: yelling wax is philosophical, he takes notes. I've always loved 196 00:10:38,080 --> 00:10:40,719 Speaker 1: Mike McKey. It's just amazing he's there. We'll cover that 197 00:10:41,080 --> 00:10:44,160 Speaker 1: with Michael McKee today. As Mr Gura is off, he's 198 00:10:44,320 --> 00:10:47,160 Speaker 1: he's doing reporting from Italy with Franci Laquis. They're there 199 00:10:47,200 --> 00:10:52,520 Speaker 1: with their families having like that Pellegrino Orangeina or something 200 00:10:52,559 --> 00:10:56,160 Speaker 1: like that. Future's up to Michael McKee with this with 201 00:10:56,240 --> 00:10:59,400 Speaker 1: Carl Weimberg, why don't you bring them here? Because David 202 00:10:59,440 --> 00:11:02,920 Speaker 1: went out to to Hoe because he was afraid he's 203 00:11:02,920 --> 00:11:05,440 Speaker 1: gonna stay out there all summer. I think Kyle Weinberg 204 00:11:05,480 --> 00:11:08,160 Speaker 1: commuted in because you're in Valhalla, New York, but your 205 00:11:08,200 --> 00:11:10,199 Speaker 1: train is not you going to Grand Central right now. 206 00:11:10,240 --> 00:11:14,400 Speaker 1: My home is up in Rhinebeck, so I'm in Amtraenn Station. Yeah, 207 00:11:14,440 --> 00:11:17,319 Speaker 1: so I'm affected by it, although frankly, you know, the 208 00:11:17,720 --> 00:11:20,600 Speaker 1: services was so bad. You know, I always say on time, 209 00:11:20,640 --> 00:11:23,760 Speaker 1: amtrack time an hour late, and uh, the service was 210 00:11:23,800 --> 00:11:25,839 Speaker 1: so bad up to this time that it probably will 211 00:11:25,880 --> 00:11:28,800 Speaker 1: be inconceivable to get it. You won't notice the difference. 212 00:11:28,800 --> 00:11:30,960 Speaker 1: And they are running some trains into Grand Central, which 213 00:11:31,000 --> 00:11:33,559 Speaker 1: is a considerable upgrade from going into Penn Station. The 214 00:11:33,679 --> 00:11:36,760 Speaker 1: Amtrak has apologized for this improvement in the terminal at 215 00:11:36,760 --> 00:11:39,559 Speaker 1: the other end, but I'm personally hoping that this inconvenience 216 00:11:39,640 --> 00:11:42,120 Speaker 1: lasts like forever. When I was on the show regularly, 217 00:11:42,120 --> 00:11:47,280 Speaker 1: Tom Talk taught me about segways, which he calls we're 218 00:11:47,320 --> 00:11:50,920 Speaker 1: gonna We're gonna segui here Because Amtrak has a lot 219 00:11:50,920 --> 00:11:54,120 Speaker 1: of problems with its service because Congress starves Amtrak of 220 00:11:54,200 --> 00:11:56,600 Speaker 1: funding and that gets us to Congress, which is where 221 00:11:56,600 --> 00:11:59,680 Speaker 1: Tom wanted to go before the break. UH and the 222 00:11:59,720 --> 00:12:03,200 Speaker 1: some are a health for Paul Ryan and Rich McConnell. 223 00:12:03,360 --> 00:12:06,719 Speaker 1: They can't get anything through UH. And right now it 224 00:12:06,720 --> 00:12:09,200 Speaker 1: looks like health care is on life support if it's 225 00:12:09,280 --> 00:12:12,800 Speaker 1: indeed still breathing, and they still haven't got a budget 226 00:12:13,040 --> 00:12:16,040 Speaker 1: set up for the end of September. We've got the 227 00:12:16,080 --> 00:12:19,560 Speaker 1: dead ceiling out there. Um, it doesn't seem to have 228 00:12:19,600 --> 00:12:22,960 Speaker 1: registered yet on Wall Street, but there are some possible 229 00:12:22,960 --> 00:12:26,680 Speaker 1: train wrecks to security back again ahead. Yeah, that you 230 00:12:26,800 --> 00:12:28,560 Speaker 1: have to hope that people are going to get their 231 00:12:28,559 --> 00:12:31,839 Speaker 1: heads together in Washington to support keeping the funding for 232 00:12:31,880 --> 00:12:35,840 Speaker 1: the nation going. That's obviously a big hard deck that 233 00:12:35,920 --> 00:12:38,120 Speaker 1: we have to face as we get into the fall. 234 00:12:38,360 --> 00:12:41,040 Speaker 1: I'm optimistic that Democrats will be able to come together 235 00:12:41,080 --> 00:12:45,080 Speaker 1: with Republicans and have some bipartisan approach to getting that done. 236 00:12:45,080 --> 00:12:47,560 Speaker 1: That should be a non issue. But on the more 237 00:12:47,679 --> 00:12:50,640 Speaker 1: challenging issues, you know, it just doesn't seem to be happening. 238 00:12:50,640 --> 00:12:54,760 Speaker 1: We're not getting anything done. Republicans cannot agree amongst themselves 239 00:12:55,040 --> 00:12:57,240 Speaker 1: as to what the program ought to be. It's hard 240 00:12:57,280 --> 00:12:59,160 Speaker 1: to imagine that they're going to be able to get 241 00:12:59,160 --> 00:13:02,080 Speaker 1: through any of the complicated hard issues like the healthcare 242 00:13:02,480 --> 00:13:06,439 Speaker 1: or even you know, the fiscal reform. Infrastructure. Maybe maybe 243 00:13:06,440 --> 00:13:08,959 Speaker 1: Democrats can get on board with some Republicans and get 244 00:13:09,040 --> 00:13:11,520 Speaker 1: some infrastructure spending done, but that's really about it, and 245 00:13:11,559 --> 00:13:16,320 Speaker 1: there won't be a lot of it when they do 246 00:13:16,640 --> 00:13:21,360 Speaker 1: move forward. Um, do you think we see any kind 247 00:13:21,440 --> 00:13:25,160 Speaker 1: of government shutdown at the end of September when you 248 00:13:25,200 --> 00:13:27,360 Speaker 1: know they have to have some sort of budget passed, 249 00:13:27,440 --> 00:13:29,800 Speaker 1: or are we so hopelessly neural that that we take 250 00:13:29,840 --> 00:13:32,640 Speaker 1: a few days off. Well, I'm hopeful that we don't 251 00:13:32,640 --> 00:13:34,920 Speaker 1: get to that point. I think that both sides of 252 00:13:34,960 --> 00:13:37,760 Speaker 1: the aisle have seen the folly of going that route. 253 00:13:37,760 --> 00:13:40,040 Speaker 1: That the nation doesn't approve of that kind of behavior. 254 00:13:40,080 --> 00:13:42,920 Speaker 1: They expect Congress to do the job of keeping the 255 00:13:43,000 --> 00:13:46,040 Speaker 1: nation running rather than doing the job of obstructing it. 256 00:13:46,200 --> 00:13:48,160 Speaker 1: So I would like to hope that we don't get 257 00:13:48,200 --> 00:13:50,960 Speaker 1: to that point. You've been brilliant, Like page eight of 258 00:13:51,000 --> 00:13:54,480 Speaker 1: your ten page report, I'm saying interest rates aren't going 259 00:13:54,520 --> 00:13:56,959 Speaker 1: to go up. You've got loads of charts, country by 260 00:13:56,960 --> 00:13:59,560 Speaker 1: country charts, do you stand with the idea we have 261 00:13:59,600 --> 00:14:04,199 Speaker 1: not reached escape velocity and interest rates within a global sense. 262 00:14:04,320 --> 00:14:07,000 Speaker 1: Will that rise now in a global sense? You know, 263 00:14:07,040 --> 00:14:09,560 Speaker 1: we've seen some backup in bonds, kind of a temper 264 00:14:09,600 --> 00:14:13,120 Speaker 1: tan bond tantrum in Europe. UM. I don't know how 265 00:14:13,200 --> 00:14:15,520 Speaker 1: far that will go. You know, we have two successful 266 00:14:16,080 --> 00:14:19,840 Speaker 1: taper rings going on in bond markets. The Bank of 267 00:14:19,880 --> 00:14:22,320 Speaker 1: England stop buying bonds on the end of March, and 268 00:14:22,520 --> 00:14:26,640 Speaker 1: nobody paid any attention to FED tapered second time successfully. 269 00:14:26,800 --> 00:14:30,280 Speaker 1: And we have some deflationary or disinflationary forces out there, 270 00:14:30,320 --> 00:14:33,080 Speaker 1: and it's more than just oil prices. But there's plenty 271 00:14:33,120 --> 00:14:35,000 Speaker 1: of slack around. You know, when you get through all 272 00:14:35,040 --> 00:14:38,960 Speaker 1: the short term noise, inflation in Europe is under UH, 273 00:14:39,000 --> 00:14:42,240 Speaker 1: it's targeted, it's not going anywhere. So I think that 274 00:14:42,360 --> 00:14:46,280 Speaker 1: this disinflation is going to UH to hold down the 275 00:14:46,280 --> 00:14:49,520 Speaker 1: bond Carl Weinberg, thank you so much. Just trffic perspective 276 00:14:49,560 --> 00:14:53,560 Speaker 1: on a Monday Michael McKay for David Gura, Carl Carl 277 00:14:53,600 --> 00:14:55,560 Speaker 1: said he's not leaving because he can't get a train 278 00:14:55,640 --> 00:14:58,440 Speaker 1: back train back. All our guests are gonna pile up 279 00:14:58,440 --> 00:15:00,800 Speaker 1: here in the waiting room the surveillance. I don't think 280 00:15:00,840 --> 00:15:03,560 Speaker 1: this is plain, but maybe it's training bus for David 281 00:15:03,600 --> 00:15:12,720 Speaker 1: Gerda Idaho two days, thirteen hours, three dollars, two days 282 00:15:12,760 --> 00:15:15,840 Speaker 1: thirty suggesting we should join him New York to poise. 283 00:15:16,840 --> 00:15:19,200 Speaker 1: You should, I guess you can do it. There's there's 284 00:15:19,200 --> 00:15:21,640 Speaker 1: a lot of bus in there. It's not as much 285 00:15:21,680 --> 00:15:26,280 Speaker 1: train as it's bus. He didn't take the Gulf Stream. No, No, 286 00:15:26,360 --> 00:15:28,360 Speaker 1: Francine has it in Italy. I don't know if she 287 00:15:28,480 --> 00:15:30,880 Speaker 1: really pulled a rank on that. It's a it's amazing 288 00:15:30,920 --> 00:15:32,720 Speaker 1: how she does it. And she had a tantum and 289 00:15:32,760 --> 00:15:34,720 Speaker 1: said it's got to go out of London City instead 290 00:15:34,720 --> 00:15:39,080 Speaker 1: of Heathrow because of the fees. Good morning, Francine in Italy. 291 00:15:39,400 --> 00:15:56,320 Speaker 1: This is Bloomberg an important interview. Now. Gregg Valu joins 292 00:15:56,400 --> 00:15:58,720 Speaker 1: us on her phone lines. Greg, we talked to you 293 00:15:58,760 --> 00:16:02,280 Speaker 1: earlier this morning. Here's the Vali a tweet from the 294 00:16:02,280 --> 00:16:05,000 Speaker 1: President of the United States. He must have been listening 295 00:16:05,040 --> 00:16:07,920 Speaker 1: to you in the earlier I cannot imagine the Congress 296 00:16:07,920 --> 00:16:11,840 Speaker 1: with dare leave Washington without a beautiful new healthcare bill 297 00:16:12,240 --> 00:16:16,160 Speaker 1: fully approved and ready to go. Greg for Senator McConnell, 298 00:16:16,760 --> 00:16:21,960 Speaker 1: what is a quote beautiful new healthcare bill unquote anything. 299 00:16:22,080 --> 00:16:26,200 Speaker 1: He'll take anything time, anything that could possibly get through 300 00:16:26,240 --> 00:16:29,480 Speaker 1: the House. But I think that health reform is on 301 00:16:29,560 --> 00:16:32,320 Speaker 1: life support right now. I don't see the votes. They're 302 00:16:32,320 --> 00:16:33,960 Speaker 1: going to give it a good try in the next 303 00:16:33,960 --> 00:16:36,240 Speaker 1: couple of weeks. If they can't get this done by 304 00:16:36,240 --> 00:16:38,600 Speaker 1: the August break, they've got to move on to other 305 00:16:38,680 --> 00:16:41,400 Speaker 1: things budget taxes, because they're going to run out of 306 00:16:41,440 --> 00:16:44,640 Speaker 1: time this year. What do they what do they do 307 00:16:44,680 --> 00:16:47,840 Speaker 1: with tax reform without healthcare? I thought the two were 308 00:16:47,840 --> 00:16:50,920 Speaker 1: attached to the hip. Well, they claim they can still 309 00:16:51,000 --> 00:16:53,560 Speaker 1: move on it, but they've got to get a budget first, 310 00:16:53,880 --> 00:16:56,720 Speaker 1: because the budget will become the vehicle not to get 311 00:16:56,760 --> 00:17:00,640 Speaker 1: to arcane. But through this reconciliation process, the budget reform 312 00:17:00,680 --> 00:17:04,119 Speaker 1: will become the vehicle to get tax reform. So I 313 00:17:04,160 --> 00:17:06,800 Speaker 1: think they may have to cut their losses and say, 314 00:17:06,880 --> 00:17:09,560 Speaker 1: you know, we'll come back and deliberate healthcare later, but 315 00:17:09,640 --> 00:17:12,879 Speaker 1: we got to move on. I was speaking to someone 316 00:17:13,600 --> 00:17:16,520 Speaker 1: late last week after Congress had come back from the 317 00:17:16,600 --> 00:17:20,560 Speaker 1: July fourth recess, and they said, Um, the surprise is 318 00:17:20,600 --> 00:17:25,400 Speaker 1: that the Republicans have made very little progress on a budget. 319 00:17:25,520 --> 00:17:28,520 Speaker 1: Is that the same thing that you're hearing. Yeah, you're right, Mike. 320 00:17:28,600 --> 00:17:30,720 Speaker 1: I mean they all agree that defense will get more, 321 00:17:31,119 --> 00:17:33,639 Speaker 1: and I always say that if there's one pure winner 322 00:17:34,000 --> 00:17:37,240 Speaker 1: in Washington for investors, it's the defense sector. They'll do well. 323 00:17:37,560 --> 00:17:40,199 Speaker 1: But then there's total disagreement on what you do with 324 00:17:40,280 --> 00:17:43,840 Speaker 1: domestic spending. The Democrat's attitude is, look, hey, if you're 325 00:17:43,840 --> 00:17:47,320 Speaker 1: going to dramatically increase defense, you've got to increase domestic 326 00:17:47,359 --> 00:17:50,160 Speaker 1: as well. The Republicans don't want to do that, so 327 00:17:50,400 --> 00:17:52,919 Speaker 1: there could be an impasse on the budget, which means 328 00:17:53,200 --> 00:17:56,640 Speaker 1: the government shuts the doors. Yeah. I hate to use 329 00:17:56,640 --> 00:17:59,119 Speaker 1: the word shut down because it usually doesn't happen. You 330 00:17:59,119 --> 00:18:02,000 Speaker 1: don't want to cry, but you know, a government shutdown 331 00:18:02,080 --> 00:18:05,840 Speaker 1: cannot be ruled out on October one, especially since the 332 00:18:05,840 --> 00:18:09,320 Speaker 1: President has suggested that might not be a bad idea. Yeah, 333 00:18:09,320 --> 00:18:11,520 Speaker 1: he's been all over the lot on that, and he's 334 00:18:11,560 --> 00:18:14,800 Speaker 1: got another issue that could be even more explosive. That, 335 00:18:14,880 --> 00:18:17,199 Speaker 1: of course, is the death ceiling, which has to be 336 00:18:17,280 --> 00:18:20,360 Speaker 1: raised by I think probably early October. Yeah, but we've 337 00:18:20,359 --> 00:18:23,879 Speaker 1: heard the debt ceiling argument for decades and decades. What's 338 00:18:23,920 --> 00:18:27,240 Speaker 1: different this time? Greg, Well, what's different is that the 339 00:18:27,280 --> 00:18:30,200 Speaker 1: people in control. Moveny and a lot of the House 340 00:18:30,240 --> 00:18:35,080 Speaker 1: Republicans have three years decades threatened to let the government 341 00:18:35,160 --> 00:18:38,919 Speaker 1: to fall. Now they're in power. It's just that simple. 342 00:18:38,960 --> 00:18:41,920 Speaker 1: I mean. So what I mean, why are they any 343 00:18:41,960 --> 00:18:45,400 Speaker 1: different than the previous eighties seven pretenders that were screaming 344 00:18:45,400 --> 00:18:49,359 Speaker 1: about the debt ceiling. Well, the big problem is that 345 00:18:49,480 --> 00:18:51,680 Speaker 1: I don't think Ryan has the votes to get a 346 00:18:51,720 --> 00:18:54,200 Speaker 1: debt ceiling through the House, and of course Bayner didn't. 347 00:18:54,440 --> 00:18:56,640 Speaker 1: He had to go to Nancy Pelosi and Bayners now 348 00:18:56,640 --> 00:19:01,480 Speaker 1: in retirement. The the Republican base go nuts if they 349 00:19:01,680 --> 00:19:04,800 Speaker 1: have to go to Nacy, and they may have to. 350 00:19:04,920 --> 00:19:06,840 Speaker 1: We gotta make news this morning quickly. Here. Are you 351 00:19:06,920 --> 00:19:10,960 Speaker 1: predicting that Mr Ryan will join Mr Bayner in retirement? No, 352 00:19:11,240 --> 00:19:13,480 Speaker 1: I don't think. If you talk to the base, the 353 00:19:13,520 --> 00:19:16,639 Speaker 1: Republican base would love to see him and McConnell go. 354 00:19:16,720 --> 00:19:18,399 Speaker 1: But I don't think that's going to happen. There's a 355 00:19:18,440 --> 00:19:23,600 Speaker 1: difference between Ryan and Bayner. It's called sunscreen. Yeah that's 356 00:19:23,640 --> 00:19:29,160 Speaker 1: gonna go. Yeah, you know, I've got like eight jokes 357 00:19:29,800 --> 00:19:34,400 Speaker 1: in trouble. Anthony from New Jersey would be The good 358 00:19:34,400 --> 00:19:36,960 Speaker 1: thing is Greg is staying with us, Greg will be 359 00:19:37,000 --> 00:19:39,280 Speaker 1: with us to get me into further trouble. Michael McKie, 360 00:19:39,320 --> 00:19:42,440 Speaker 1: why don't you bring in the esteem g Velier because 361 00:19:42,440 --> 00:19:45,879 Speaker 1: you I think more linked into the policy battles of Washington. 362 00:19:46,480 --> 00:19:49,280 Speaker 1: Of course, his chief Global Strategies for Horizon Investments keeps 363 00:19:49,280 --> 00:19:52,199 Speaker 1: track of all things Washington, UH these days, and he 364 00:19:52,320 --> 00:19:56,560 Speaker 1: does it without laughing, which is quite an accomplishment. Greg. 365 00:19:57,480 --> 00:20:01,200 Speaker 1: There has been talk among some in Congress. I don't 366 00:20:01,200 --> 00:20:02,560 Speaker 1: want to overplay this, but I don't want to get 367 00:20:02,560 --> 00:20:05,400 Speaker 1: your thoughts on it that given the fact that they 368 00:20:05,400 --> 00:20:08,680 Speaker 1: have accomplished nothing this year, and everything is stacking up 369 00:20:09,040 --> 00:20:11,680 Speaker 1: and so much needs to be done by September thirty, 370 00:20:11,720 --> 00:20:13,880 Speaker 1: at the end of the fiscal year, they might cut 371 00:20:13,880 --> 00:20:16,960 Speaker 1: the August vacation short. Do you hear any rumblings from 372 00:20:16,960 --> 00:20:19,399 Speaker 1: the leadership about that? Yeah? Well, first of all, Mike, 373 00:20:19,440 --> 00:20:21,359 Speaker 1: I don't know if I should laugh or cry about 374 00:20:21,359 --> 00:20:23,439 Speaker 1: what's going on here. But I've heard the same thing 375 00:20:23,480 --> 00:20:26,200 Speaker 1: as you have, that, Uh, they could tighten it up. 376 00:20:26,280 --> 00:20:29,399 Speaker 1: I doubt that very much. I think vacation plans are made. 377 00:20:29,800 --> 00:20:32,760 Speaker 1: I think that it would be hard to get everybody 378 00:20:32,800 --> 00:20:36,280 Speaker 1: back to town. So unless the President calls them into 379 00:20:36,320 --> 00:20:39,440 Speaker 1: a special session, which I doubt. I don't think that's 380 00:20:39,440 --> 00:20:42,439 Speaker 1: going to happen. But your premise is absolutely right, and 381 00:20:42,520 --> 00:20:44,760 Speaker 1: that is things are stacking up. You've only got like 382 00:20:44,800 --> 00:20:48,040 Speaker 1: eleven or twelve days before the August break, and I 383 00:20:48,040 --> 00:20:51,679 Speaker 1: think health reform therefore is pretty unlikely. Then you've got 384 00:20:51,680 --> 00:20:53,840 Speaker 1: a lot of other issues when they come back from August, 385 00:20:53,960 --> 00:20:57,720 Speaker 1: especially on the budget. That's Mike, that's like our schedule. Yeah, 386 00:20:57,880 --> 00:21:01,440 Speaker 1: didn't they just come back from break and the lays 387 00:21:01,520 --> 00:21:05,280 Speaker 1: to break in the five weeks vacation. Yeah, in the 388 00:21:05,320 --> 00:21:08,920 Speaker 1: olden days, it wouldn't matter if they go on week 389 00:21:09,040 --> 00:21:11,919 Speaker 1: vacation because Sam Rayburn would have just called the cardinals 390 00:21:11,920 --> 00:21:15,480 Speaker 1: in from the Appropriations Committee that they and there would 391 00:21:15,520 --> 00:21:17,879 Speaker 1: be something waiting for them when they came back. Nothing 392 00:21:17,920 --> 00:21:20,399 Speaker 1: like that gonna happen this time. No, you know, in 393 00:21:20,480 --> 00:21:22,359 Speaker 1: one of the factors here and people say, well, who 394 00:21:22,440 --> 00:21:25,600 Speaker 1: cares about this Russian stuff? And the media overplace it 395 00:21:25,680 --> 00:21:28,679 Speaker 1: and blah blah blah. No, it does matter because Trump 396 00:21:28,720 --> 00:21:32,760 Speaker 1: has lost political capital. If he had political capital, it 397 00:21:32,760 --> 00:21:35,280 Speaker 1: would be like the old Sam Rayburn L B. J. Days, 398 00:21:35,280 --> 00:21:37,720 Speaker 1: he'd get some things done. But right now, with a 399 00:21:37,800 --> 00:21:40,520 Speaker 1: job approval rating in the thirties, and with more and 400 00:21:40,560 --> 00:21:44,240 Speaker 1: more Republicans on Capitol Hill deserting him, it's going to 401 00:21:44,320 --> 00:21:47,760 Speaker 1: be hard to get a lot done quickly. There is 402 00:21:48,000 --> 00:21:52,080 Speaker 1: um a problem with healthcare that goes beyond the fact 403 00:21:52,160 --> 00:21:54,280 Speaker 1: that they can't get a bill passed, and that is 404 00:21:54,320 --> 00:21:58,320 Speaker 1: that Obamacare has problems, and there are issues, particularly with 405 00:21:58,400 --> 00:22:00,880 Speaker 1: the payments to the exchange ages. And then of course 406 00:22:00,880 --> 00:22:03,480 Speaker 1: you've got UM. We are going to get a little 407 00:22:03,560 --> 00:22:05,800 Speaker 1: arcane here s chip, which is basically we'll call it 408 00:22:06,160 --> 00:22:10,040 Speaker 1: Medicare for UM that expires at the end of the 409 00:22:10,040 --> 00:22:12,240 Speaker 1: fiscal year. You've got two things you have to do 410 00:22:12,320 --> 00:22:14,600 Speaker 1: in the healthcare area. Are they going to be able 411 00:22:14,600 --> 00:22:16,720 Speaker 1: to get those done? Or are we going to see 412 00:22:16,760 --> 00:22:21,280 Speaker 1: a healthcare crisis? Well, they'll probably get that done, but 413 00:22:21,320 --> 00:22:24,879 Speaker 1: I don't rule out a crisis that becomes a huge 414 00:22:24,920 --> 00:22:29,200 Speaker 1: political issue. I mentioned it Tom earlier today that whichever 415 00:22:29,359 --> 00:22:32,480 Speaker 1: party owns the issue of healthcare regrets it. It's an 416 00:22:32,520 --> 00:22:36,000 Speaker 1: albatross because no one satisfied. So you've got now no 417 00:22:36,040 --> 00:22:39,159 Speaker 1: one's happy with the Republicans and this could drag on 418 00:22:39,440 --> 00:22:42,320 Speaker 1: for for quite some time and be a huge factor 419 00:22:42,640 --> 00:22:48,200 Speaker 1: in making the House in eighteen virtually a coin toss call. Well, 420 00:22:48,320 --> 00:22:51,320 Speaker 1: that's right where I wanted to go, you know, base 421 00:22:51,400 --> 00:22:53,960 Speaker 1: it off your work, Greg Bellier or maybe the Hill 422 00:22:54,080 --> 00:22:58,040 Speaker 1: or Bloomberg or whatever you mentioned earlier. They could lose 423 00:22:58,080 --> 00:23:02,119 Speaker 1: the House. How did the Republicans lose the House? What's 424 00:23:02,160 --> 00:23:05,720 Speaker 1: the sort of the path, if you will, to that 425 00:23:06,040 --> 00:23:10,040 Speaker 1: really momentous change. Well, I think an awful lot of 426 00:23:10,040 --> 00:23:14,760 Speaker 1: Republicans and fairly moderate northern districts, districts that Hillary Clinton 427 00:23:15,080 --> 00:23:18,679 Speaker 1: Wanner did well in, are worried. They're worried that Trump 428 00:23:18,720 --> 00:23:21,600 Speaker 1: is an albatross, that he's not helped them, that people 429 00:23:21,640 --> 00:23:23,760 Speaker 1: want to send a message. You know, all these House 430 00:23:23,880 --> 00:23:26,360 Speaker 1: races we've seen so far this year where the Republicans 431 00:23:26,359 --> 00:23:30,160 Speaker 1: have won have been in really hostile territory for Democrats. 432 00:23:30,200 --> 00:23:33,760 Speaker 1: But in the fallen there's a chance, I'd say, where 433 00:23:33,760 --> 00:23:36,720 Speaker 1: I'm up too close to fifty fifty the Democrats take 434 00:23:36,800 --> 00:23:39,959 Speaker 1: the House. The Senate, however, still looks like a likely 435 00:23:40,680 --> 00:23:44,639 Speaker 1: retention for the Republicans, retention with a reduced margin, and 436 00:23:44,640 --> 00:23:47,840 Speaker 1: they've had probably they got fifty two now, as you know, 437 00:23:48,320 --> 00:23:50,600 Speaker 1: you know, I think the Republicans because of who's up, 438 00:23:50,960 --> 00:23:54,439 Speaker 1: you know, You've got ten Republican seats up in states 439 00:23:54,480 --> 00:23:57,399 Speaker 1: that Trump won. In five of those states, Trump won 440 00:23:57,440 --> 00:24:00,320 Speaker 1: in a landslide, So I think the Republicans might actually 441 00:24:00,359 --> 00:24:02,399 Speaker 1: gain a feed or two in the Senate. How do 442 00:24:02,520 --> 00:24:05,639 Speaker 1: the Republicans defend the House if they can't do legislation. 443 00:24:05,720 --> 00:24:09,040 Speaker 1: Let's assume that for the sake of Monday morning conversation, 444 00:24:09,720 --> 00:24:12,159 Speaker 1: if they have a president who's not even engaged in 445 00:24:12,200 --> 00:24:18,760 Speaker 1: their future, what is the strategy to defend the House majority? Well, 446 00:24:18,760 --> 00:24:21,760 Speaker 1: two things. Number One, they're hoping the economy continues to 447 00:24:21,800 --> 00:24:25,040 Speaker 1: do well and unemployment stays in around four percent. That's 448 00:24:25,080 --> 00:24:28,080 Speaker 1: a good story. Number Two, I think the Republicans are 449 00:24:28,080 --> 00:24:29,960 Speaker 1: going to just have to take over this on their 450 00:24:30,000 --> 00:24:32,560 Speaker 1: own without Trump and say we're going to get a 451 00:24:32,560 --> 00:24:34,880 Speaker 1: tax bill moving, We're going to get a budget done. 452 00:24:34,960 --> 00:24:36,960 Speaker 1: We don't need the White House to screw things up 453 00:24:37,000 --> 00:24:40,800 Speaker 1: with these crazy tweets. And I do think you can 454 00:24:40,840 --> 00:24:44,560 Speaker 1: get legislation passed. UH maybe tax reformed by the end 455 00:24:44,600 --> 00:24:48,240 Speaker 1: of the winter early spring. That's still is the best 456 00:24:48,280 --> 00:24:53,120 Speaker 1: case scenario. You do in your latest note, retain a 457 00:24:53,280 --> 00:24:58,719 Speaker 1: sliver of optimism about tax reform. Uh or I presume 458 00:24:58,760 --> 00:25:02,520 Speaker 1: you mean tax cuts as opposed reform. But where does 459 00:25:02,560 --> 00:25:05,119 Speaker 1: that come from. Well, it comes from the fact that 460 00:25:05,160 --> 00:25:08,040 Speaker 1: you've got the House determined to get a bill done. 461 00:25:08,040 --> 00:25:10,439 Speaker 1: They're working, they're sitting down two or three times a 462 00:25:10,440 --> 00:25:12,199 Speaker 1: week when the nut and they're sitting down with the 463 00:25:12,240 --> 00:25:15,920 Speaker 1: Senate Republicans. I think there's a consensus they can get 464 00:25:15,960 --> 00:25:19,879 Speaker 1: this done with this very arcane process called reconciliation that 465 00:25:19,960 --> 00:25:23,280 Speaker 1: can get a bill moving. I wouldn't bring this up, Greg, 466 00:25:23,280 --> 00:25:25,080 Speaker 1: but I guess I'm gonna bring it up because the 467 00:25:25,160 --> 00:25:31,080 Speaker 1: Chief Twitter is twittering right now. He's like, like busy. 468 00:25:31,160 --> 00:25:33,439 Speaker 1: And I mentioned this with you earlier, the idea in 469 00:25:33,480 --> 00:25:35,920 Speaker 1: the upper over the weekend that Ms Trump of Anka 470 00:25:35,960 --> 00:25:38,480 Speaker 1: Trump was sitting at the G twenty table. Now the 471 00:25:38,520 --> 00:25:41,600 Speaker 1: President dives into this and he says, when I left 472 00:25:41,600 --> 00:25:44,200 Speaker 1: the conference room for short meetings with Japan, I asked 473 00:25:44,200 --> 00:25:48,800 Speaker 1: Ivanka to hold a seat, very standard. Angela Merkele agrees, 474 00:25:48,960 --> 00:25:51,920 Speaker 1: and then he comes back and goes off. Chelsea Clinton 475 00:25:52,160 --> 00:25:54,879 Speaker 1: were asked the whole deceit for her mother, as her 476 00:25:54,920 --> 00:25:57,520 Speaker 1: mother gave our country away. The fake news would say 477 00:25:57,840 --> 00:26:01,240 Speaker 1: Chelsea for President. I took this back to Julian and 478 00:26:01,280 --> 00:26:04,760 Speaker 1: Tricia Nixon John Tucker, you're too young to remember Julian, 479 00:26:05,200 --> 00:26:08,760 Speaker 1: Julian and Tricia Nixon. But but why are we talking 480 00:26:08,800 --> 00:26:17,640 Speaker 1: about this? Greg. He's so touchy, he's so sensitive to criticism, 481 00:26:17,880 --> 00:26:21,000 Speaker 1: and he doesn't let any slight pass. The bigger story, 482 00:26:21,040 --> 00:26:24,560 Speaker 1: obviously is Russia. He is obsessed, but he won't let 483 00:26:24,560 --> 00:26:28,000 Speaker 1: it pass. The wounds are self inflicted. And I made 484 00:26:28,000 --> 00:26:30,520 Speaker 1: the analogy this morning and the piece I write with 485 00:26:30,800 --> 00:26:34,920 Speaker 1: l VJ and Vietnam. LVJ was obsessed with Vietnam. He miscalculated. 486 00:26:35,160 --> 00:26:37,119 Speaker 1: You've got Trump doing the same thing. And the great 487 00:26:37,160 --> 00:26:39,919 Speaker 1: irony here, guys, is that the Russian story will be 488 00:26:40,000 --> 00:26:42,919 Speaker 1: kept alive by Trump because he won't let it go. 489 00:26:43,240 --> 00:26:46,680 Speaker 1: The Associated Press moments ago, the spokesman for Mr Prutin says, 490 00:26:46,920 --> 00:26:50,439 Speaker 1: the Kremlin is quote unaware of a meeting between Donald 491 00:26:50,440 --> 00:26:53,600 Speaker 1: Trump senior staff and a Russian lawyer during the two 492 00:26:53,680 --> 00:26:57,120 Speaker 1: thousand and sixteen campaign. They go on in the background. 493 00:26:57,160 --> 00:27:01,240 Speaker 1: Certainly it's shocking that they denied that. Greg. Help our 494 00:27:01,280 --> 00:27:04,520 Speaker 1: belieguered audience, most of them with kids at Penn Station 495 00:27:04,600 --> 00:27:07,600 Speaker 1: trying to figure out how to go east, north, southwest. 496 00:27:08,160 --> 00:27:12,040 Speaker 1: Summarize for us what you've learned in the last twenty 497 00:27:12,080 --> 00:27:15,640 Speaker 1: four hours about all this Russian stuff. Well, if people 498 00:27:15,760 --> 00:27:18,920 Speaker 1: waiting for trains have the time at the New York Times, 499 00:27:18,960 --> 00:27:23,120 Speaker 1: piece is really quite fascinating. It's like a spy novel. Uh. 500 00:27:23,240 --> 00:27:27,760 Speaker 1: This Russian attorney, who would be a good movie character, 501 00:27:28,640 --> 00:27:31,040 Speaker 1: clearly had ties to the Kremlin and had some very 502 00:27:31,080 --> 00:27:34,040 Speaker 1: shady clients. She met with him, and she got a 503 00:27:34,080 --> 00:27:37,719 Speaker 1: meeting just by saying I got dirt on Hillary Clinton. Uh. 504 00:27:37,720 --> 00:27:40,399 Speaker 1: That raises a lot of issues to have the inner 505 00:27:40,400 --> 00:27:43,359 Speaker 1: circle mana fort when he was still there, Trump Junior 506 00:27:43,480 --> 00:27:47,520 Speaker 1: always people now involved, Kushner now involved with this meeting. 507 00:27:47,800 --> 00:27:50,600 Speaker 1: This is one of many story, guys, stories, because Mueller 508 00:27:51,040 --> 00:27:52,639 Speaker 1: is going to have to dig into He's going to 509 00:27:52,680 --> 00:27:55,359 Speaker 1: be a busy man. Surveillance correction. We are now up 510 00:27:55,359 --> 00:28:00,359 Speaker 1: to eleven Trump tweets. He is apparently retweets, and he 511 00:28:00,520 --> 00:28:04,760 Speaker 1: is tweeting like crazy this morning. I I agree. I 512 00:28:04,800 --> 00:28:08,480 Speaker 1: don't think I've ever seen Sony Greg VILLI thank you 513 00:28:08,600 --> 00:28:11,520 Speaker 1: so much for wisdom on uh some of this. I 514 00:28:11,520 --> 00:28:13,560 Speaker 1: can't believe we're talking about some of this, But there 515 00:28:13,560 --> 00:28:17,919 Speaker 1: we go. As we do economics, finance, investment, international relations, 516 00:28:18,720 --> 00:28:29,240 Speaker 1: politics and tweets. Brunt you by Bank of America, Mary 517 00:28:29,359 --> 00:28:35,000 Speaker 1: Lynch with virtual reality, virtually everything will change, discover opportunities 518 00:28:35,280 --> 00:28:38,800 Speaker 1: in a transforming world, be of a mL dot Com, 519 00:28:39,000 --> 00:28:50,320 Speaker 1: slash VR, Mary Lynch, Pierced Fenner and Smith Incorporated joining 520 00:28:50,400 --> 00:28:53,800 Speaker 1: US now UH with black Rock in their real assets 521 00:28:54,160 --> 00:28:58,160 Speaker 1: UH division. Jim Barry joins us. Jim, I think we 522 00:28:58,200 --> 00:29:00,720 Speaker 1: need to define that. That's that's enough of nod. What 523 00:29:00,800 --> 00:29:03,720 Speaker 1: does black Rock real assets? Is that Larry Finks limo. 524 00:29:05,480 --> 00:29:08,000 Speaker 1: But the good news is black Rock only invest in 525 00:29:08,040 --> 00:29:11,800 Speaker 1: real assets. But in the acid management industry, that nonclture 526 00:29:11,880 --> 00:29:13,760 Speaker 1: has been used by a lot of people to define 527 00:29:15,040 --> 00:29:20,080 Speaker 1: areas like infrastructure, real estates, agricultural land, um timber so 528 00:29:20,320 --> 00:29:23,320 Speaker 1: assets that have kind of kind of more real significance 529 00:29:23,320 --> 00:29:29,280 Speaker 1: in the economy, practical significance. In six Pennsylvania's Central Railroad 530 00:29:30,000 --> 00:29:33,280 Speaker 1: fell apart, and we saw the infrastructure of the northeast 531 00:29:33,920 --> 00:29:36,680 Speaker 1: deteriorate into a bunch of holdings. John Tucker and I 532 00:29:36,760 --> 00:29:40,800 Speaker 1: talking about Grand Central, which is owned by private individuals 533 00:29:40,920 --> 00:29:44,880 Speaker 1: Argent and and Andrew Pension and and all that. Does 534 00:29:45,000 --> 00:29:48,080 Speaker 1: money want to be an infrastructure today? Does money want 535 00:29:48,080 --> 00:29:52,120 Speaker 1: to be? And the stuff that in the newspapers is headaches, headaches, headaches. 536 00:29:52,720 --> 00:29:57,680 Speaker 1: So capital is really attracted to infrastructure because when projects 537 00:29:57,680 --> 00:30:01,560 Speaker 1: are structured correctly, it's going to give really long term, 538 00:30:01,600 --> 00:30:06,480 Speaker 1: predictable cash flow and yielding investments to pension funds and 539 00:30:06,520 --> 00:30:09,920 Speaker 1: insurance companies which they're crying out for um and they're 540 00:30:09,960 --> 00:30:12,640 Speaker 1: strong and historically be strong relative value on the asset 541 00:30:12,680 --> 00:30:17,560 Speaker 1: class as well. The trick is the structuring of the projects. Um. 542 00:30:17,840 --> 00:30:22,440 Speaker 1: The reality is that that's very tough to do. It's 543 00:30:22,520 --> 00:30:26,120 Speaker 1: very tough to do well. And so all these capitals 544 00:30:26,120 --> 00:30:28,760 Speaker 1: out there would love to invest in Grand Central, our 545 00:30:28,840 --> 00:30:32,280 Speaker 1: Penn Station, and are the rail tracks? Are the rail operators? 546 00:30:32,840 --> 00:30:36,080 Speaker 1: If the investment is presented a structured way that where 547 00:30:36,080 --> 00:30:39,120 Speaker 1: the risks are very clearly determined, and where the private 548 00:30:39,160 --> 00:30:41,680 Speaker 1: sector capital feels it can handle and actually do better 549 00:30:41,720 --> 00:30:44,240 Speaker 1: our managers risks better than the public sector. If you 550 00:30:45,120 --> 00:30:48,160 Speaker 1: were to get some sort of public private partnership like 551 00:30:48,480 --> 00:30:51,600 Speaker 1: they've been talking about in Washington for infrastructure, then who 552 00:30:51,880 --> 00:30:54,360 Speaker 1: should structure the deals? The government is going to want 553 00:30:54,400 --> 00:30:57,040 Speaker 1: to have a say in how this is structured. But 554 00:30:57,520 --> 00:30:59,800 Speaker 1: do you think that could work? So where this has 555 00:30:59,800 --> 00:31:03,640 Speaker 1: been down well historically and there's multiple examples throughout the world. 556 00:31:04,000 --> 00:31:06,840 Speaker 1: It requires some element of a federal or central agency 557 00:31:06,880 --> 00:31:11,160 Speaker 1: that takes responsibility. There's a huge amount of complexity these transactions, 558 00:31:11,240 --> 00:31:14,480 Speaker 1: and so that scent of expertise is absolutely critical, and 559 00:31:14,640 --> 00:31:17,280 Speaker 1: you don't have to identify projects that makes sense and 560 00:31:17,280 --> 00:31:20,840 Speaker 1: and this is really important. P three's Public privor parties 561 00:31:20,880 --> 00:31:22,880 Speaker 1: are not an end in themselves. They are just one 562 00:31:23,040 --> 00:31:26,000 Speaker 1: form of PROCUMA ad option available to the public sector, 563 00:31:26,440 --> 00:31:29,200 Speaker 1: and they only make sense if the risk you transfer 564 00:31:29,240 --> 00:31:32,960 Speaker 1: to the private sector means that you get more value, 565 00:31:33,000 --> 00:31:35,160 Speaker 1: because it's got to cost you more you go down 566 00:31:35,200 --> 00:31:38,000 Speaker 1: perkven And for a global audience, it's something I think 567 00:31:38,040 --> 00:31:40,800 Speaker 1: everyone knows. It's in every single movie and there's a 568 00:31:40,840 --> 00:31:46,360 Speaker 1: MetLife building. Guys like you argued about air rights to 569 00:31:46,600 --> 00:31:50,480 Speaker 1: make that thing happen in two thousand seventeen, could the 570 00:31:50,520 --> 00:31:53,880 Speaker 1: MetLife building be built the P and M building. So 571 00:31:53,960 --> 00:31:57,640 Speaker 1: what you'll find is that the private sector will run 572 00:31:57,760 --> 00:32:00,680 Speaker 1: scared from those kind of permitting because if it wants 573 00:32:00,680 --> 00:32:04,280 Speaker 1: to invest in infrastructure, that's a risk better born by 574 00:32:04,480 --> 00:32:07,600 Speaker 1: the public sector. And so for one of a better description, 575 00:32:08,120 --> 00:32:10,040 Speaker 1: those kind of risks should be removed and off the 576 00:32:10,080 --> 00:32:12,520 Speaker 1: table by the time it comes to the private sector investment, 577 00:32:12,520 --> 00:32:16,040 Speaker 1: because you're right today, you know, an institute, institution capital 578 00:32:16,040 --> 00:32:18,600 Speaker 1: will not take that risk. Yeah, I mean, I think 579 00:32:18,640 --> 00:32:21,000 Speaker 1: like that's a huge issue and all this upward about 580 00:32:21,000 --> 00:32:23,480 Speaker 1: infrastruyre and I think, I mean, this is an important point. 581 00:32:23,760 --> 00:32:28,600 Speaker 1: There is zero correlation between need for infrastructure and addressable 582 00:32:28,600 --> 00:32:33,680 Speaker 1: investment opportunity. And that's global. And so the challenges for 583 00:32:33,840 --> 00:32:38,040 Speaker 1: the government to sort of in any jurisdiction to shape 584 00:32:38,040 --> 00:32:40,880 Speaker 1: projects in a way makes them addressable by the private sector. 585 00:32:41,120 --> 00:32:43,800 Speaker 1: But the capital is there, and the capitalist particularly there 586 00:32:44,040 --> 00:32:46,120 Speaker 1: for countries like the United States were at the higher 587 00:32:46,200 --> 00:32:48,240 Speaker 1: quality end of the o c D. We didn't have 588 00:32:48,320 --> 00:32:51,120 Speaker 1: no idea what Congress and the President are come up 589 00:32:51,120 --> 00:32:53,760 Speaker 1: with as far as infrastructure. But the plan floated during 590 00:32:53,800 --> 00:32:59,000 Speaker 1: the campaign was that the government would give investors basically 591 00:32:59,040 --> 00:33:02,520 Speaker 1: some sort of guarantee he uh and a tax break. 592 00:33:02,640 --> 00:33:05,560 Speaker 1: Do you need that or or are people willing to 593 00:33:05,600 --> 00:33:09,120 Speaker 1: invest without some sort of backstop. So so there's a 594 00:33:09,160 --> 00:33:12,480 Speaker 1: myriad of ways you can incent the private sector to invest, 595 00:33:13,040 --> 00:33:16,040 Speaker 1: but it's all about the risk and the return. And 596 00:33:16,120 --> 00:33:18,880 Speaker 1: so if you need a tax credit or an incentive 597 00:33:18,960 --> 00:33:21,480 Speaker 1: to give you part of your return. Then that's fine. 598 00:33:21,840 --> 00:33:23,560 Speaker 1: But at the end of the day, what works best 599 00:33:23,640 --> 00:33:27,520 Speaker 1: for governments is where they create substantial programs that brings 600 00:33:27,520 --> 00:33:31,880 Speaker 1: a whole ecosystem to compete the contractors, the equipment suppliers, 601 00:33:31,880 --> 00:33:34,560 Speaker 1: and the capital and and and in a sense, in 602 00:33:34,600 --> 00:33:38,240 Speaker 1: that competition the government insurers gets best value for money. 603 00:33:38,560 --> 00:33:41,560 Speaker 1: But it does require you to put in place the 604 00:33:42,640 --> 00:33:46,280 Speaker 1: policy and the executive administration to make it happen. This 605 00:33:46,360 --> 00:33:48,240 Speaker 1: is fabulous jepent Berry where this is a black Lick 606 00:33:48,320 --> 00:33:50,719 Speaker 1: Real say We're gonna come back. They have a fabulous 607 00:33:50,760 --> 00:33:53,880 Speaker 1: website where you can click on the different investments they 608 00:33:53,880 --> 00:33:57,040 Speaker 1: have and what's cool about the thirty or forty dots 609 00:33:57,080 --> 00:33:59,320 Speaker 1: on the screen, every one of them. Mike McKie has 610 00:33:59,360 --> 00:34:01,920 Speaker 1: a story. We'll come back to some of those stories 611 00:34:01,960 --> 00:34:04,880 Speaker 1: about you know, what do you really do about infrastructure 612 00:34:05,000 --> 00:34:07,320 Speaker 1: in building in a time as we see with the 613 00:34:07,400 --> 00:34:11,520 Speaker 1: MetLife pin and building where things have changed. With Jim 614 00:34:11,560 --> 00:34:15,959 Speaker 1: Berry a black Rock Real Estate, this is Bloomberg, Stay 615 00:34:16,000 --> 00:34:19,160 Speaker 1: with us and good morning, thrilled up with this Jim Berry. 616 00:34:19,200 --> 00:34:22,399 Speaker 1: He's with black Rock Real Assets and our global head. 617 00:34:22,520 --> 00:34:24,960 Speaker 1: They're wonderful. Website goes all the different projects that they're 618 00:34:25,000 --> 00:34:28,239 Speaker 1: involved in, and is John Tucker and I commisit rate 619 00:34:28,239 --> 00:34:31,440 Speaker 1: about Penn Station and you know all that kind of thing. 620 00:34:31,719 --> 00:34:34,920 Speaker 1: There are the columns of Lima, Peru where there was 621 00:34:34,960 --> 00:34:39,000 Speaker 1: twenty thirty years of total stasis. I'm trying to build 622 00:34:39,040 --> 00:34:43,640 Speaker 1: infrastructure in Lima, Peru, and then a consortial Argentina Brazil 623 00:34:43,719 --> 00:34:46,160 Speaker 1: wandered in. I guess you wandered in with them to 624 00:34:46,400 --> 00:34:49,400 Speaker 1: jump start that. What are the lessons you learned at Lima, 625 00:34:49,480 --> 00:34:53,680 Speaker 1: Peru with a Lima Metro that Washington or New York 626 00:34:54,200 --> 00:34:56,920 Speaker 1: or any other city in the United States could use. Well, 627 00:34:56,960 --> 00:34:59,080 Speaker 1: I think it's it's a posted child for how to 628 00:34:59,120 --> 00:35:01,160 Speaker 1: go about it, and I'll aim at ly. The Peruvian 629 00:35:01,200 --> 00:35:04,839 Speaker 1: government decided that public private partnerships or P three's were 630 00:35:04,840 --> 00:35:08,440 Speaker 1: an appropriate procurement option for a range of assets, including 631 00:35:08,480 --> 00:35:13,840 Speaker 1: that Lima light rail metro, and so they created a 632 00:35:13,840 --> 00:35:16,719 Speaker 1: central agency. They took the lessons and learnings that were 633 00:35:16,760 --> 00:35:20,120 Speaker 1: there in Europe and elsewhere to develop that program, and 634 00:35:20,120 --> 00:35:22,480 Speaker 1: then they shaped the projects and back to one of 635 00:35:22,480 --> 00:35:25,000 Speaker 1: your earlier observations, they took a lot of the risk 636 00:35:25,080 --> 00:35:29,440 Speaker 1: that the private sector was not able to bear, like permiting, etcetera. 637 00:35:29,680 --> 00:35:32,080 Speaker 1: And they took them on and then shaped the project 638 00:35:32,080 --> 00:35:36,040 Speaker 1: where the private sector took construction risk, they took operating risk, 639 00:35:36,320 --> 00:35:37,839 Speaker 1: and then they got paid for that, and we'll get 640 00:35:37,840 --> 00:35:41,600 Speaker 1: paid for that over the next twenty five thirty years. Well, 641 00:35:41,840 --> 00:35:47,120 Speaker 1: is is that something that can be um successfully replicated? 642 00:35:47,480 --> 00:35:50,200 Speaker 1: So absolutely and has been around the world and has 643 00:35:50,239 --> 00:35:53,840 Speaker 1: been replicated here in the United States. We've lent money 644 00:35:53,920 --> 00:35:56,879 Speaker 1: to street lighting project in Michigan. There's a P three 645 00:35:56,880 --> 00:35:59,680 Speaker 1: project and loquality at the moment, there's a number of 646 00:35:59,680 --> 00:36:02,279 Speaker 1: them are own the country. The challenge you have is 647 00:36:02,320 --> 00:36:06,160 Speaker 1: that it's different states taking different initiatives, and so it's 648 00:36:06,320 --> 00:36:09,320 Speaker 1: very fragmented. I think for it to get real moment momentum, 649 00:36:09,360 --> 00:36:13,080 Speaker 1: it requires some federal initiative, some cederal agency to to 650 00:36:13,200 --> 00:36:15,759 Speaker 1: give a shape and to incent the states to to 651 00:36:15,920 --> 00:36:20,440 Speaker 1: use the procurement method. Well what about the US now, 652 00:36:20,480 --> 00:36:23,319 Speaker 1: how do we go about designing a program? If from 653 00:36:23,320 --> 00:36:26,279 Speaker 1: an investor's point of view, you had free reign, what 654 00:36:26,280 --> 00:36:30,840 Speaker 1: would you do to try to start building an infrastructure programs? 655 00:36:30,840 --> 00:36:32,840 Speaker 1: So the first thing, and it's back to my point, 656 00:36:32,880 --> 00:36:35,440 Speaker 1: the private sector is not an end of itself. If 657 00:36:35,480 --> 00:36:37,799 Speaker 1: you want a mediate impact, you've got to fund your 658 00:36:37,840 --> 00:36:41,600 Speaker 1: existing agencies, and that can be done through various bond 659 00:36:41,719 --> 00:36:44,520 Speaker 1: or or other initiatives to allow them raise more capital 660 00:36:44,600 --> 00:36:48,080 Speaker 1: to invest, or with direct grants to invest. That's the 661 00:36:48,160 --> 00:36:50,760 Speaker 1: fastest way to impact what's been done, and that should 662 00:36:50,760 --> 00:36:53,520 Speaker 1: be done in a cohesive, strategic way so that you 663 00:36:53,600 --> 00:36:57,560 Speaker 1: prioritize the most critical, particularly transport projects and need investment. 664 00:36:57,960 --> 00:37:00,759 Speaker 1: I think beyond that, there's a huge mayor to considering 665 00:37:00,800 --> 00:37:06,040 Speaker 1: a more broad federal public private partnership program for transport 666 00:37:06,040 --> 00:37:09,240 Speaker 1: and social infrastructure. That requires setting up a federal agency, 667 00:37:09,280 --> 00:37:12,080 Speaker 1: and I think it will have to provide some form 668 00:37:12,080 --> 00:37:14,759 Speaker 1: of fiscal incentive to the states where most of this 669 00:37:14,880 --> 00:37:18,640 Speaker 1: activity were placed to adopt the methodology. Okay, that's all great, 670 00:37:19,040 --> 00:37:21,800 Speaker 1: but what will be the catalyst? Do you just assume 671 00:37:21,840 --> 00:37:25,399 Speaker 1: we need quote unquote crisis to get there or can 672 00:37:25,440 --> 00:37:28,319 Speaker 1: there be adults that say, we want our trains to 673 00:37:28,400 --> 00:37:32,000 Speaker 1: run like the Swiss, let's do it. Look, this is 674 00:37:32,080 --> 00:37:36,840 Speaker 1: ultimately a political issue, thank you, fundamentum. Okay, because the 675 00:37:36,920 --> 00:37:39,200 Speaker 1: reality is the United States, not unlike a number of 676 00:37:39,200 --> 00:37:43,239 Speaker 1: other Western economies, has underinvested in its infrastructure of the 677 00:37:43,280 --> 00:37:46,400 Speaker 1: last thirty forty years, and you're bearing the consequence of that. 678 00:37:46,719 --> 00:37:49,439 Speaker 1: But it's not a hard cash cost. It's it's it's 679 00:37:49,480 --> 00:37:54,799 Speaker 1: it plays out in in economic activity or the lack 680 00:37:54,840 --> 00:37:58,760 Speaker 1: of productivity or reduced productivity. It's a cost borne by commuters, 681 00:37:58,800 --> 00:38:01,319 Speaker 1: but it's not a cash hast you pay out. You 682 00:38:01,320 --> 00:38:03,319 Speaker 1: can shove more cars down that road, you can shove 683 00:38:03,360 --> 00:38:06,440 Speaker 1: more people through that airport, and and unless it gets 684 00:38:06,440 --> 00:38:09,960 Speaker 1: to safety issues like it has in Penn Station, it 685 00:38:10,040 --> 00:38:13,480 Speaker 1: doesn't trigger the response it does require, and there is. 686 00:38:13,640 --> 00:38:16,160 Speaker 1: It is one of the few truly by partisan issues 687 00:38:16,200 --> 00:38:20,040 Speaker 1: in Congress. It requires political action to decide how are 688 00:38:20,040 --> 00:38:22,440 Speaker 1: we going to pay for this, Because that's the conundrum. 689 00:38:22,760 --> 00:38:25,239 Speaker 1: You've got to pay for it, either through taxes or 690 00:38:25,440 --> 00:38:28,720 Speaker 1: user charges. You've got to take grasp that political nettle 691 00:38:29,000 --> 00:38:32,719 Speaker 1: and then decide how to implement. Here's the issue that 692 00:38:32,800 --> 00:38:35,200 Speaker 1: we were talking about during the break. Much of what 693 00:38:35,239 --> 00:38:40,000 Speaker 1: we need in infrastructure is repair. Like Penn Station. There's 694 00:38:40,000 --> 00:38:42,440 Speaker 1: no cash flow from that, so you don't want to 695 00:38:42,440 --> 00:38:45,520 Speaker 1: be involved, I would imagine. So Unfortunately, the private sector 696 00:38:45,560 --> 00:38:48,800 Speaker 1: does not invest for nothing. But whether it's the public 697 00:38:48,840 --> 00:38:50,920 Speaker 1: sector of the private sector, it has to be paid 698 00:38:51,000 --> 00:38:54,440 Speaker 1: far and so that's the political decision. Do you give 699 00:38:54,920 --> 00:38:58,560 Speaker 1: am Track more capital directly, either allowing it through direct 700 00:38:58,600 --> 00:39:01,239 Speaker 1: government grant, or do you allow it raise or more 701 00:39:01,280 --> 00:39:03,680 Speaker 1: bonds and money and capital in the markets, or do 702 00:39:03,880 --> 00:39:08,080 Speaker 1: you shape a project within its environments for particular private 703 00:39:08,080 --> 00:39:11,239 Speaker 1: sector investment as a P three. These are the decisions. 704 00:39:11,239 --> 00:39:14,479 Speaker 1: But fundamentally you have to decide where's the money coming from. 705 00:39:14,480 --> 00:39:17,560 Speaker 1: But globally, in our audience coast to coast, Good Morning, 706 00:39:17,560 --> 00:39:23,320 Speaker 1: Bloomberg one or six one FM, Boston, Washington, the Bay Area, 707 00:39:23,640 --> 00:39:28,560 Speaker 1: Serious x M Channel one, the distances. How long it 708 00:39:28,560 --> 00:39:30,800 Speaker 1: takes Jim Burry for you to walk from Penn Station 709 00:39:30,840 --> 00:39:34,800 Speaker 1: to Grand Central. Here's the way everyone perceives it. Grand Central, 710 00:39:35,000 --> 00:39:40,640 Speaker 1: well run Penn Station. Not what's the distinction you see 711 00:39:40,640 --> 00:39:45,200 Speaker 1: there between those two geographies. Well, again, I mean the 712 00:39:45,239 --> 00:39:47,879 Speaker 1: specifics of that would be very hard to say. I mean, 713 00:39:47,960 --> 00:39:51,080 Speaker 1: clearly there's a different ownership context in both um and 714 00:39:51,160 --> 00:39:55,640 Speaker 1: maybe a different incentive dynamic for capital. I mean, and 715 00:39:55,680 --> 00:39:59,720 Speaker 1: so certainly there's an obviously private sector ownership and Grand Central. 716 00:39:59,800 --> 00:40:04,160 Speaker 1: So every element of that is geared towards improving the 717 00:40:04,200 --> 00:40:07,160 Speaker 1: commuter experience a lot and providing opportunity for them to 718 00:40:07,239 --> 00:40:11,719 Speaker 1: spend money as they passed through, etcetera, etcetera. But I 719 00:40:11,760 --> 00:40:16,040 Speaker 1: think that ultimately private sector, if it sees investment opportunity 720 00:40:16,080 --> 00:40:18,359 Speaker 1: but return, will get the capital. I think if you're 721 00:40:18,440 --> 00:40:20,880 Speaker 1: public sector, you may see the need for investment, but 722 00:40:20,960 --> 00:40:23,400 Speaker 1: you may not have access to the capital. The difference 723 00:40:23,440 --> 00:40:26,319 Speaker 1: mic there, to make it more apparent is Oyster Bar, 724 00:40:26,440 --> 00:40:31,840 Speaker 1: Grand Central Station. I mean Jim and I are from Boston. 725 00:40:31,880 --> 00:40:33,799 Speaker 1: I mean they can't even do dunkin Donuts right at 726 00:40:33,800 --> 00:40:38,520 Speaker 1: Penn Station, A little Crispy krem Um give me an 727 00:40:38,520 --> 00:40:41,839 Speaker 1: example of And I realized that everybody's can be looking 728 00:40:41,840 --> 00:40:46,279 Speaker 1: for shove already projects. But what's the best, most interesting 729 00:40:46,360 --> 00:40:50,000 Speaker 1: thing that somebody could propose for an infrastructure investment that 730 00:40:50,200 --> 00:40:54,680 Speaker 1: you and Blackrock would be interested in? So any project 731 00:40:54,680 --> 00:40:57,759 Speaker 1: can be interesting. It's it's about making it addressable from 732 00:40:57,760 --> 00:41:00,040 Speaker 1: a private sector perspective, which means you need to have 733 00:41:00,120 --> 00:41:03,759 Speaker 1: to risk clearly defined UM and I as the private sector, 734 00:41:03,840 --> 00:41:06,080 Speaker 1: need to feel I can manage that risk and execute 735 00:41:06,080 --> 00:41:09,120 Speaker 1: on it. Whether that's a road, a courthouse, a hospital, 736 00:41:09,800 --> 00:41:12,920 Speaker 1: um power plant, it doesn't matter. I'm still going to 737 00:41:13,000 --> 00:41:15,520 Speaker 1: break down the risk and understand can I take that on? 738 00:41:15,719 --> 00:41:18,160 Speaker 1: I want to be paid for it, But the value 739 00:41:18,160 --> 00:41:20,279 Speaker 1: for money the public sector gets is that I'll do 740 00:41:20,320 --> 00:41:22,320 Speaker 1: it better. You won't be dealing with the layers, and 741 00:41:22,360 --> 00:41:26,319 Speaker 1: you won't deal with cost overruns. What's just a quick 742 00:41:27,280 --> 00:41:31,080 Speaker 1: question about it. Looking for a list of things to 743 00:41:31,200 --> 00:41:33,880 Speaker 1: invest in, would you like to see something like an 744 00:41:33,920 --> 00:41:37,520 Speaker 1: infrastructure bank, which people have talked about, or should this 745 00:41:37,600 --> 00:41:40,040 Speaker 1: be done on a project by project basis? So I 746 00:41:40,040 --> 00:41:41,800 Speaker 1: think it's very hard to do this on a project 747 00:41:41,840 --> 00:41:44,279 Speaker 1: by project basis unless it's large enough La Guardia being 748 00:41:44,320 --> 00:41:47,080 Speaker 1: an example. It's big enough that people will come to 749 00:41:47,160 --> 00:41:51,520 Speaker 1: play because of this individual scale. But fundamentally this is 750 00:41:51,719 --> 00:41:54,840 Speaker 1: historically been bestne by creating a central agency, whether you 751 00:41:54,920 --> 00:41:57,239 Speaker 1: call it a bank or something else, but something that 752 00:41:57,280 --> 00:42:01,200 Speaker 1: will create more cohesion around the way these are structured. 753 00:42:01,600 --> 00:42:05,799 Speaker 1: You'll simplify and standardized contracts, etcetera, etcetera, etcetera. In a way, 754 00:42:06,280 --> 00:42:08,640 Speaker 1: everyone will come to play. And when you get everyone 755 00:42:08,719 --> 00:42:11,319 Speaker 1: coming to play, you get competition and you get better 756 00:42:11,400 --> 00:42:14,960 Speaker 1: value for money. So so, in terms of large projects 757 00:42:15,000 --> 00:42:17,799 Speaker 1: much bigger than LaGuardia, was black Rock involved in the 758 00:42:17,840 --> 00:42:20,840 Speaker 1: rebuilding of Fenway Park. No, we were not involved in 759 00:42:20,880 --> 00:42:22,799 Speaker 1: the kind of way now unless we lend some bonds 760 00:42:22,840 --> 00:42:24,360 Speaker 1: that would be a different. Part of that would be 761 00:42:24,440 --> 00:42:26,160 Speaker 1: different would have been they would have wanted a cash 762 00:42:26,200 --> 00:42:28,920 Speaker 1: flow and season tickets that would have wanted. I was 763 00:42:28,960 --> 00:42:30,720 Speaker 1: just trying to get to a game, you know, Yankees 764 00:42:30,760 --> 00:42:33,680 Speaker 1: Red Sox later this year. Jim Burry, thank you so much. 765 00:42:33,680 --> 00:42:37,680 Speaker 1: Really wonderful with black Rock real assets today. Just fascinating. 766 00:42:37,680 --> 00:42:40,560 Speaker 1: We don't usually do that. That was very, very good. 767 00:42:52,239 --> 00:42:54,719 Speaker 1: I'm scrolling down here through the past of history. That's 768 00:42:54,719 --> 00:42:58,120 Speaker 1: what you do when Robert Hormett's enters the studio. Of course, 769 00:42:58,160 --> 00:43:01,640 Speaker 1: this public service to the nation Underscretary of State for 770 00:43:01,680 --> 00:43:06,040 Speaker 1: Secretary Clinton, serving both Republicans and Democrats over the years. Bob, 771 00:43:06,080 --> 00:43:08,680 Speaker 1: I don't want to get you upset, but I'll bet 772 00:43:08,719 --> 00:43:11,120 Speaker 1: you the steam was coming out of the Harmadi in years. 773 00:43:11,440 --> 00:43:15,440 Speaker 1: Let's go back to November of n in the first 774 00:43:15,480 --> 00:43:19,600 Speaker 1: of these g meetings, the G six summit, Muier, I 775 00:43:19,680 --> 00:43:23,640 Speaker 1: think I pronounced that right of of in France, and 776 00:43:23,680 --> 00:43:27,719 Speaker 1: this was Gerald Ford was Secretary Kissinger. Any president gets 777 00:43:27,800 --> 00:43:29,960 Speaker 1: up from the table and needs to go visit this, 778 00:43:30,080 --> 00:43:33,600 Speaker 1: visit that, and I would have suggested that Secretary Kissinger 779 00:43:33,719 --> 00:43:37,040 Speaker 1: full disclosure. You work for Kissinger associates would have taken 780 00:43:37,080 --> 00:43:39,680 Speaker 1: the seat of the president. Were you a bit taken 781 00:43:39,719 --> 00:43:43,800 Speaker 1: back that Secretary Tillerson didn't take the seat of the president. 782 00:43:44,280 --> 00:43:47,560 Speaker 1: I was very surprised. I was a planner and a 783 00:43:47,600 --> 00:43:51,440 Speaker 1: participant in about twelve of these g summits over the years, 784 00:43:52,280 --> 00:43:55,440 Speaker 1: and in every case, when the president got up to 785 00:43:55,520 --> 00:43:59,320 Speaker 1: do whatever he had to do, the Secretary of State 786 00:43:59,480 --> 00:44:03,040 Speaker 1: or parodically, the Secretary of the Treasury would sit in 787 00:44:03,120 --> 00:44:07,560 Speaker 1: for him. So this clearly represents a first in the 788 00:44:07,640 --> 00:44:10,800 Speaker 1: history of these summits. And Michael McKee, the president tweeting 789 00:44:10,800 --> 00:44:13,400 Speaker 1: out not once but twice about this. This is this 790 00:44:13,480 --> 00:44:15,799 Speaker 1: has become a sensitive issue which I thought would go 791 00:44:15,880 --> 00:44:21,720 Speaker 1: what He's very sensitive to any perceived criticism. But I'm wondering, um, 792 00:44:21,920 --> 00:44:24,200 Speaker 1: how how big a deal is it? I mean, yeah, 793 00:44:24,239 --> 00:44:28,239 Speaker 1: it's sort of not done. It's you know, eating with 794 00:44:28,280 --> 00:44:31,560 Speaker 1: your fingers instead of your utensils. But does it make 795 00:44:31,560 --> 00:44:33,480 Speaker 1: a real difference in the long run. It doesn't make 796 00:44:33,520 --> 00:44:35,799 Speaker 1: a real difference in the long run, But symbolically, I 797 00:44:35,840 --> 00:44:39,560 Speaker 1: think it looked to these other countries who understand the 798 00:44:39,560 --> 00:44:42,120 Speaker 1: precedent of having cabinet members sit in for the president 799 00:44:42,160 --> 00:44:45,960 Speaker 1: when the president leaves, or a prime minister leaves periodically 800 00:44:46,239 --> 00:44:49,400 Speaker 1: a Cabinetmber will sit in. This is a little bit unusual, 801 00:44:49,440 --> 00:44:51,480 Speaker 1: and I think it was much more that it was 802 00:44:51,560 --> 00:44:54,920 Speaker 1: disturbing symbolically than that it had any major substant effect. 803 00:44:54,960 --> 00:44:57,120 Speaker 1: I want to ask the two I'm interviewing Michael mckeann 804 00:44:57,120 --> 00:45:00,959 Speaker 1: now folks with wonderful experience of Garbischef and Reagan. Michael 805 00:45:01,000 --> 00:45:03,640 Speaker 1: McKee was in a G nineteen summit that was a 806 00:45:04,160 --> 00:45:08,920 Speaker 1: two that was just the US. This week this one, 807 00:45:09,600 --> 00:45:12,399 Speaker 1: I mean, everybody's characterizing it is G nine versus one, 808 00:45:12,440 --> 00:45:16,719 Speaker 1: because the US policy sees are are so focused on 809 00:45:16,760 --> 00:45:20,880 Speaker 1: the United States as opposed to what's best for the group, 810 00:45:20,960 --> 00:45:24,640 Speaker 1: and that kind of is a different view of how 811 00:45:24,760 --> 00:45:30,640 Speaker 1: the works. Abasa, Yes, I think it really represents a 812 00:45:30,680 --> 00:45:34,239 Speaker 1: bigger issue in the sense not the who said at 813 00:45:34,280 --> 00:45:39,280 Speaker 1: the table issue, but the question of American leadership. President 814 00:45:39,320 --> 00:45:41,960 Speaker 1: Trump says he wants to make America great again. I 815 00:45:42,040 --> 00:45:45,239 Speaker 1: submit America is great now and has been great for 816 00:45:45,280 --> 00:45:48,959 Speaker 1: a long time. And one of the reasons America has 817 00:45:49,120 --> 00:45:52,799 Speaker 1: been great, certainly in the foreign policy area, but also 818 00:45:52,840 --> 00:45:56,759 Speaker 1: in terms of the domestic economy, is our strength is 819 00:45:58,200 --> 00:46:01,480 Speaker 1: due in part to our eight at home. But it's 820 00:46:01,520 --> 00:46:08,200 Speaker 1: also great and strong because we have strong alliances, we 821 00:46:08,280 --> 00:46:13,719 Speaker 1: have strong friendships. We have developed strong international institutions over 822 00:46:13,760 --> 00:46:17,080 Speaker 1: the course of seventy years, of which we are the 823 00:46:17,200 --> 00:46:20,800 Speaker 1: leader and most of them and the trend setter and 824 00:46:21,200 --> 00:46:25,239 Speaker 1: the convener in many cases. And the G twenty as 825 00:46:25,239 --> 00:46:29,520 Speaker 1: well as the G seven G eight are among those institutions. 826 00:46:29,560 --> 00:46:31,560 Speaker 1: We have been able in the past to use the 827 00:46:31,640 --> 00:46:36,560 Speaker 1: G twenty to help shape the course of the global economy. 828 00:46:36,840 --> 00:46:41,480 Speaker 1: Now with the United States being perceived ash and by 829 00:46:41,520 --> 00:46:45,600 Speaker 1: its own actions, seen as odd man out, not being 830 00:46:45,719 --> 00:46:48,440 Speaker 1: a leader in the process, certainly when it comes to trade, 831 00:46:48,480 --> 00:46:55,080 Speaker 1: when it comes to environmental issues, we're weakening our global leadership. 832 00:46:55,239 --> 00:46:58,400 Speaker 1: And to make America great again, you needed a global 833 00:46:58,400 --> 00:47:02,080 Speaker 1: economy that functions, while systems that function will if we're 834 00:47:02,080 --> 00:47:04,960 Speaker 1: not in the process of shaping those, they're going to 835 00:47:05,040 --> 00:47:07,400 Speaker 1: be shaped, but they're gonna be shaped by others, not 836 00:47:07,560 --> 00:47:10,840 Speaker 1: by us. That's going to weaken us from a political 837 00:47:10,840 --> 00:47:12,560 Speaker 1: point of view and an economic point of view and 838 00:47:12,600 --> 00:47:15,360 Speaker 1: a security point of view. Did did you see the 839 00:47:15,440 --> 00:47:18,840 Speaker 1: video that the news report by that Australian television report 840 00:47:18,840 --> 00:47:22,080 Speaker 1: of the political commentator from one of the networks down 841 00:47:22,080 --> 00:47:25,880 Speaker 1: there was viral over the weekend where he talked about 842 00:47:26,320 --> 00:47:29,920 Speaker 1: Donald Trump being isolated, sort of the the guy that 843 00:47:29,960 --> 00:47:32,520 Speaker 1: nobody wanted to ship with or talk to at the 844 00:47:32,560 --> 00:47:36,000 Speaker 1: G twenty, and he said it represents, to the Australian 845 00:47:36,200 --> 00:47:39,440 Speaker 1: point of view, the US withdrawing from the world and 846 00:47:39,480 --> 00:47:42,359 Speaker 1: we will miss you when you're gone. Well, I think 847 00:47:42,440 --> 00:47:45,360 Speaker 1: that probably is an exaggeration. Many people did want to 848 00:47:45,400 --> 00:47:49,680 Speaker 1: talk to him because they didn't really know what his 849 00:47:49,840 --> 00:47:52,120 Speaker 1: views were, so they wanted to get a better sense 850 00:47:52,200 --> 00:47:54,880 Speaker 1: of what he was planning to do, what he was 851 00:47:54,920 --> 00:47:58,200 Speaker 1: thinking about, what his policies were. And they also know 852 00:47:58,400 --> 00:48:03,759 Speaker 1: that he looks at Vernance domestically and internationally, particularly internationally, 853 00:48:04,200 --> 00:48:07,320 Speaker 1: as very personal, so they make a major effort to 854 00:48:07,360 --> 00:48:11,759 Speaker 1: get along with him and to develop a friendly relationship 855 00:48:11,840 --> 00:48:14,520 Speaker 1: with him, first to try to understand him, and second 856 00:48:14,560 --> 00:48:16,680 Speaker 1: to try to influence his position. So they wanted to 857 00:48:16,719 --> 00:48:20,080 Speaker 1: talk to him. But the US as a global leader 858 00:48:20,160 --> 00:48:23,160 Speaker 1: certainly suffered a major setback at the G twenty. We 859 00:48:23,239 --> 00:48:24,759 Speaker 1: kind of know where you're coming from, and you work 860 00:48:24,800 --> 00:48:26,880 Speaker 1: for Henry Kissinger and all that sort of thing, but 861 00:48:27,760 --> 00:48:31,960 Speaker 1: just in general, can we do what Donald Trump suggests 862 00:48:31,960 --> 00:48:34,200 Speaker 1: we can do, and that is go our own way 863 00:48:34,840 --> 00:48:41,120 Speaker 1: and UH succeed by putting America first, in America's interest first, 864 00:48:41,200 --> 00:48:43,279 Speaker 1: and not working with other people if we don't want to. 865 00:48:43,719 --> 00:48:47,280 Speaker 1: Is that a viable, if unliked strategy. As I mentioned 866 00:48:47,360 --> 00:48:50,640 Speaker 1: a moment ago, I think it's not an either or situation. 867 00:48:51,160 --> 00:48:53,719 Speaker 1: If you want to make America great again, you need 868 00:48:53,760 --> 00:48:56,680 Speaker 1: to have great alliances, You need to have great friendships. 869 00:48:57,160 --> 00:49:00,440 Speaker 1: The ability to project American influence and power around the 870 00:49:00,440 --> 00:49:04,480 Speaker 1: world depends on strong alliances and strong friendships. And if 871 00:49:04,520 --> 00:49:09,560 Speaker 1: you're undermining those alliances and causing them to come into question, 872 00:49:10,200 --> 00:49:14,600 Speaker 1: if you're sniping at Germany and many other countries who 873 00:49:14,600 --> 00:49:19,080 Speaker 1: are key in this alliance UH in Europe, then it 874 00:49:19,360 --> 00:49:22,800 Speaker 1: is not going to strengthen America. It's going to weaken America. 875 00:49:22,800 --> 00:49:25,400 Speaker 1: And I fear that he looks at it as an 876 00:49:25,440 --> 00:49:28,560 Speaker 1: either or situation. I look at a great America as 877 00:49:28,600 --> 00:49:31,200 Speaker 1: being great in part because of these alliances and these 878 00:49:31,200 --> 00:49:35,680 Speaker 1: friendships and the global order, economic, political, and security order 879 00:49:36,040 --> 00:49:39,480 Speaker 1: that we have led the process of developing for seven 880 00:49:39,600 --> 00:49:43,160 Speaker 1: years that has been critical to the greatness of America, 881 00:49:43,200 --> 00:49:46,000 Speaker 1: the prosperity of America and the security of America. Give 882 00:49:46,080 --> 00:49:49,799 Speaker 1: us a quick update on General McMaster. Where does he 883 00:49:49,840 --> 00:49:54,000 Speaker 1: fit into the lighthouse mix into the next six months. Well, 884 00:49:54,040 --> 00:49:58,799 Speaker 1: he's clearly a very competent, highly respected individual, but I 885 00:49:58,840 --> 00:50:03,120 Speaker 1: think that from a national security point of view, there 886 00:50:03,120 --> 00:50:05,640 Speaker 1: are a lot of questions as to how much influence 887 00:50:05,680 --> 00:50:09,800 Speaker 1: he actually has on the President. He did not sit in, 888 00:50:09,800 --> 00:50:12,600 Speaker 1: which to me was an enormous surprise in the meeting 889 00:50:12,800 --> 00:50:16,560 Speaker 1: with President Putin uh nor of course to the Russian 890 00:50:16,640 --> 00:50:22,000 Speaker 1: National Security Advisor. But traditionally, as we see from China 891 00:50:22,040 --> 00:50:26,040 Speaker 1: and many other major meetings, the national Security Advisor and 892 00:50:26,080 --> 00:50:28,440 Speaker 1: the Secretary of State sit in. So this certainly was 893 00:50:29,440 --> 00:50:34,320 Speaker 1: harmful to his image, both at home and abroad. Robert 894 00:50:34,320 --> 00:50:36,920 Speaker 1: Hormats with us, and we will continue us with Kissinger 895 00:50:36,960 --> 00:50:40,160 Speaker 1: Associates an important book number of years ago, and then 896 00:50:40,640 --> 00:50:44,439 Speaker 1: being strong onboard is about being fiscally strong at home. 897 00:50:44,440 --> 00:50:46,960 Speaker 1: Maybe we can touch on that here in a bid 898 00:50:47,040 --> 00:50:50,719 Speaker 1: Blumber surveillance this morning. We are honored, beyond honored to 899 00:50:50,800 --> 00:50:53,640 Speaker 1: have with us Robert Hormats the last few days with us, 900 00:50:53,640 --> 00:50:56,359 Speaker 1: to have him once his great m twice as just 901 00:50:56,400 --> 00:50:59,120 Speaker 1: goes right over the New York Times with the Great summary, 902 00:50:59,160 --> 00:51:02,799 Speaker 1: Ambassador of what you and you how big was your 903 00:51:02,800 --> 00:51:05,840 Speaker 1: staff at state, Like you have twenty people working for you. 904 00:51:06,520 --> 00:51:10,280 Speaker 1: I had actually twenty about twenty in my immediate office 905 00:51:10,280 --> 00:51:16,880 Speaker 1: and about in the broader economic UH, foreign policy, energy 906 00:51:16,920 --> 00:51:19,319 Speaker 1: and environmental area that I was in charge. And you 907 00:51:19,360 --> 00:51:22,239 Speaker 1: were so well known as someone of grace and confidence 908 00:51:22,280 --> 00:51:26,000 Speaker 1: in dignity that even you would understand saying President Ave 909 00:51:26,239 --> 00:51:30,600 Speaker 1: of Japan, or mixing up the imagery on Instagram of 910 00:51:30,640 --> 00:51:34,719 Speaker 1: the leadership of Singapore with the leadership of Indonesia, or 911 00:51:34,800 --> 00:51:38,880 Speaker 1: somehow slipping up on China is being from Taiwan. Is 912 00:51:38,920 --> 00:51:41,440 Speaker 1: not a way to do diplomacy. Well, this is not 913 00:51:41,560 --> 00:51:46,960 Speaker 1: in Kissinger's diplomacy, is it. No. I think it's shocking UH, 914 00:51:47,000 --> 00:51:52,280 Speaker 1: and that it shows other countries UH and Americans that 915 00:51:52,360 --> 00:51:56,040 Speaker 1: this is not a well thought out process when you 916 00:51:56,120 --> 00:51:59,759 Speaker 1: don't really have people who can understand these differences, that 917 00:52:00,040 --> 00:52:02,440 Speaker 1: the People's Republic of China is not the Republic of 918 00:52:02,520 --> 00:52:06,120 Speaker 1: Jerry different from the Republic of China in many, many, 919 00:52:06,200 --> 00:52:10,640 Speaker 1: many ways, UM. And for these mistakes to constantly creep in, 920 00:52:11,200 --> 00:52:15,680 Speaker 1: it's almost a systematic evidence of disdain for the process 921 00:52:15,760 --> 00:52:18,920 Speaker 1: that you don't take more time and more care in 922 00:52:19,080 --> 00:52:21,759 Speaker 1: making sure what you say and what you print and 923 00:52:21,800 --> 00:52:24,920 Speaker 1: what your hand out is accurate. At least get things 924 00:52:25,040 --> 00:52:28,560 Speaker 1: right from from a point accurate. It's important here, ambassadors 925 00:52:28,640 --> 00:52:33,200 Speaker 1: this morning. Secretary Summers with I believe one political philosophy, 926 00:52:33,239 --> 00:52:36,120 Speaker 1: and Robert J. Samuelson over at the Washington Post with 927 00:52:36,239 --> 00:52:39,719 Speaker 1: many would argue a different philosophy, come to pretty much 928 00:52:39,800 --> 00:52:44,759 Speaker 1: the same conclusion. What's the hormats to do list for 929 00:52:44,920 --> 00:52:48,680 Speaker 1: Secretary Tillerson to write the ship or respect you know, 930 00:52:48,760 --> 00:52:52,080 Speaker 1: for your grace and dignity. Would you suggest the secretary 931 00:52:52,160 --> 00:52:54,759 Speaker 1: is part of the problem. Well, I think the Secretary 932 00:52:54,800 --> 00:52:57,640 Speaker 1: of State should be the person, along with the National 933 00:52:57,680 --> 00:53:04,480 Speaker 1: Security Adviser um McMaster, who institutes and ensures that we 934 00:53:04,560 --> 00:53:10,319 Speaker 1: have a very consistent, well thought out process for developing 935 00:53:10,640 --> 00:53:16,520 Speaker 1: our strategy and for developing positions for these meetings that 936 00:53:16,600 --> 00:53:21,800 Speaker 1: are consistent UH and have some long term strategic goals. 937 00:53:21,840 --> 00:53:24,480 Speaker 1: And when these mistakes are made, it looks as if 938 00:53:24,520 --> 00:53:28,320 Speaker 1: there's no consistency, that it's just individuals with very little experience, 939 00:53:28,400 --> 00:53:31,840 Speaker 1: very well knowledge writing things that don't make sense and 940 00:53:31,840 --> 00:53:34,920 Speaker 1: are insulting to other countries. By the way, So I 941 00:53:34,960 --> 00:53:38,080 Speaker 1: think that what this administration lacks is what Dwight Eisenhower 942 00:53:38,200 --> 00:53:42,360 Speaker 1: understood from the early days of the National Security Council staff, 943 00:53:42,400 --> 00:53:46,960 Speaker 1: and as you need a consistent policy for deciding on 944 00:53:47,400 --> 00:53:51,319 Speaker 1: long term strategic positions, implementing them, and making sure that 945 00:53:51,360 --> 00:53:54,440 Speaker 1: the way you present them makes sense to people and 946 00:53:54,719 --> 00:53:57,440 Speaker 1: is accurate. This is very important. I mean, one example 947 00:53:57,440 --> 00:54:01,160 Speaker 1: of inconsistency is that he gives us speech talking about 948 00:54:01,360 --> 00:54:07,280 Speaker 1: strong Western values and warsaw, one of which is freedom 949 00:54:07,360 --> 00:54:11,880 Speaker 1: of expression, the ability of people to express their views, 950 00:54:12,000 --> 00:54:16,240 Speaker 1: freedom of the press, and then he attacks the press. 951 00:54:16,800 --> 00:54:19,200 Speaker 1: Not only is the attack the press and the basic 952 00:54:19,320 --> 00:54:23,520 Speaker 1: values of free expression, but he attacks them with Putin. 953 00:54:24,080 --> 00:54:27,480 Speaker 1: And in a meeting with with Putin, what did you 954 00:54:28,560 --> 00:54:31,560 Speaker 1: just just you know, I thought I thought they I 955 00:54:31,600 --> 00:54:34,200 Speaker 1: thought they did make a little progress on Syria, but 956 00:54:34,239 --> 00:54:37,520 Speaker 1: there have been other ceasefires that haven't worked. I do 957 00:54:37,680 --> 00:54:42,560 Speaker 1: think that leaving the issue of Russian intervention American election 958 00:54:42,760 --> 00:54:46,560 Speaker 1: in American elections, uh, and the way well he said this, 959 00:54:46,719 --> 00:54:50,960 Speaker 1: and he said this without any any kind of resolution 960 00:54:51,400 --> 00:54:54,160 Speaker 1: and without saying we want your assurances you're not going 961 00:54:54,200 --> 00:54:56,959 Speaker 1: to do this again, that this is not gonna happen again, 962 00:54:56,960 --> 00:54:58,680 Speaker 1: that you're gonna stop doing this, not just in the 963 00:54:58,760 --> 00:55:04,040 Speaker 1: United States, but other Western countries that you're trying to destabilize. Now, 964 00:55:04,520 --> 00:55:06,840 Speaker 1: you don't have to have all the detailed evidence, and 965 00:55:06,880 --> 00:55:09,000 Speaker 1: the Russians frequently say if you don't have the evidence, 966 00:55:09,320 --> 00:55:11,479 Speaker 1: we're not going to pay attention. You make the point 967 00:55:11,600 --> 00:55:15,719 Speaker 1: very strongly. Whoever it came from, whatever it was done for, 968 00:55:15,880 --> 00:55:20,000 Speaker 1: this cannot continue and assert this rather than sort of 969 00:55:20,080 --> 00:55:22,280 Speaker 1: leave it. Well, we're gonna move on. It's not something 970 00:55:22,320 --> 00:55:25,520 Speaker 1: you can move on. If you're undermining American democracy from Moscow, 971 00:55:25,560 --> 00:55:28,840 Speaker 1: whoever is doing it, it should stop. Finally, Ambassador, what 972 00:55:28,960 --> 00:55:32,239 Speaker 1: is the relationship of Mr Putin to his secretary of State? 973 00:55:32,280 --> 00:55:35,360 Speaker 1: I believe Mr Lavra is it like Tillerson? Is it 974 00:55:35,480 --> 00:55:38,600 Speaker 1: totally different? Or is Putin his own secretary of State? 975 00:55:38,840 --> 00:55:42,880 Speaker 1: This is a great question. I know Sarah gay Laval 976 00:55:43,120 --> 00:55:45,920 Speaker 1: very well. We worked together when I was in the 977 00:55:45,960 --> 00:55:47,759 Speaker 1: State Department, and of course I knew him and he 978 00:55:47,760 --> 00:55:49,759 Speaker 1: was here who was ambassador to the u N. He 979 00:55:49,880 --> 00:55:54,200 Speaker 1: is a very shrewd, very accomplished diplomat. And whether one 980 00:55:54,239 --> 00:55:56,920 Speaker 1: agrees with him or not, and there's certainly a lot 981 00:55:56,960 --> 00:55:59,319 Speaker 1: of areas where I disagree and where the U S 982 00:55:59,440 --> 00:56:03,560 Speaker 1: disagree with him. He's a very competent diplomat and he 983 00:56:03,640 --> 00:56:07,160 Speaker 1: does have Putin's ear. Putin does listen to him. Putin 984 00:56:07,200 --> 00:56:09,440 Speaker 1: has a lot of foreign policy experience because when the 985 00:56:09,520 --> 00:56:12,479 Speaker 1: KGB lived in dressment in Dresden, he knows Western Europ 986 00:56:12,480 --> 00:56:17,239 Speaker 1: pretty pretty well, Germany very well. But he also knows 987 00:56:17,280 --> 00:56:20,640 Speaker 1: that Lavroff has lived here. He relies on Lavrov a lot. 988 00:56:20,680 --> 00:56:23,880 Speaker 1: He has a very close relationship and Lavroff in his 989 00:56:23,960 --> 00:56:27,560 Speaker 1: press conference and the way he presents himself is very 990 00:56:27,560 --> 00:56:31,319 Speaker 1: sophisticated with a lot of experience. And I don't so 991 00:56:31,360 --> 00:56:35,640 Speaker 1: far see that Tillerson has the close relationship with President 992 00:56:35,680 --> 00:56:40,400 Speaker 1: Trump that that Lavrov has with UM President Putin. And 993 00:56:40,440 --> 00:56:42,560 Speaker 1: it's been developed over the years. So he wouldn't be 994 00:56:42,640 --> 00:56:45,160 Speaker 1: there so long as long as he has been if 995 00:56:45,160 --> 00:56:46,719 Speaker 1: he didn't have closes. You want to take up a 996 00:56:46,800 --> 00:56:49,200 Speaker 1: residency with surveillance, you could just come in here like 997 00:56:49,360 --> 00:56:51,279 Speaker 1: once or twice a week. Such a great show. I 998 00:56:51,360 --> 00:56:53,399 Speaker 1: listened to it all the time, and when I come here, 999 00:56:53,440 --> 00:57:00,200 Speaker 1: I loved coming Hormace Residency. The kisses your associate, it's 1000 00:57:00,360 --> 00:57:02,960 Speaker 1: we greatly appreciate his attendance. The last few days. Really 1001 00:57:03,040 --> 00:57:06,319 Speaker 1: terrific perspective on you know, not for me to editorialize 1002 00:57:06,520 --> 00:57:10,760 Speaker 1: what many people are calling G nineteen after what we observe. 1003 00:57:20,680 --> 00:57:24,840 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 1004 00:57:24,920 --> 00:57:30,240 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 1005 00:57:30,360 --> 00:57:33,880 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene. David 1006 00:57:33,920 --> 00:57:38,080 Speaker 1: Gura is at David Gura. Before the podcast, you can 1007 00:57:38,160 --> 00:57:52,760 Speaker 1: always catch us worldwide. I'm Bloomberg Radio runt You by 1008 00:57:53,040 --> 00:57:57,320 Speaker 1: Bank of America Mary Lynch. With virtual reality, virtually everything 1009 00:57:57,360 --> 00:58:02,280 Speaker 1: will change. Discover opportunities in a transforming world. Be of 1010 00:58:02,360 --> 00:58:06,320 Speaker 1: a m L dot com slash v R, Mary Lynch, 1011 00:58:06,400 --> 00:58:08,760 Speaker 1: Pierced Fenner and Smith Incorporated.