WEBVTT - U.S. Economy Is Pretty Solid at 2.5% Growth, Hyman Says 0:00:00.120 --> 0:00:02.920 Brought you by Bank of America Mary Lynch. Investing in 0:00:03.000 --> 0:00:07.840 local communities, economies and a sustainable future. That's the power 0:00:08.080 --> 0:00:12.360 of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated 0:00:12.760 --> 0:00:27.400 member s I p C. Welcome to the Bloomberg Surveillance Podcast. 0:00:27.800 --> 0:00:31.520 I'm Tom Keene with David Gura. Daily we bring you 0:00:31.560 --> 0:00:36.600 insight from the best in economics, finance, investment, and international relations. 0:00:37.000 --> 0:00:41.600 Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and 0:00:41.680 --> 0:00:49.560 of course on the Bloomberg. On the show today, Max Bauchus, 0:00:49.600 --> 0:00:52.479 the former Senator, former US Ambassador to China, Libby Cantrell 0:00:52.520 --> 0:00:54.680 from PIMCO, and we'll talk to Black Rock's head of 0:00:54.680 --> 0:00:57.400 inflation linked to bond portfolios. But first Ed Himan joins 0:00:57.480 --> 0:00:59.840 us here in our Bloomberg eleven three studios. He's the 0:01:00.040 --> 0:01:02.520 rman of Evercore I s I. There was sort of 0:01:02.520 --> 0:01:05.240 a beautiful moment on surveillance television a little while ago, 0:01:05.319 --> 0:01:08.240 Tom Keene having his Warren Beatty moment. He held up 0:01:08.280 --> 0:01:10.920 the ever Cores I s I note with headlines about 0:01:10.959 --> 0:01:14.280 the economy, good and bad event diagram with some on 0:01:14.360 --> 0:01:17.120 both sides of of the chart. There Ed Hyman, how's 0:01:17.120 --> 0:01:18.760 the economy look? When you look at the panoply of 0:01:18.840 --> 0:01:20.959 data right now about the U. S economy, what's your 0:01:21.120 --> 0:01:23.880 sense of how it's doing. I think the economy is 0:01:23.920 --> 0:01:27.920 doing okay. I have a little different view than most people. Um. 0:01:28.000 --> 0:01:31.280 I see an economy that is pretty solid. Uh. I 0:01:31.280 --> 0:01:33.240 look at all the data, you know, like the leading 0:01:33.240 --> 0:01:36.440 indicator retail sales. But I also travel around a lot, 0:01:36.560 --> 0:01:39.400 and I go to different cities, and whether it's Denver 0:01:40.000 --> 0:01:45.800 or Boulder, or Dallas or Boston, Seattle, they're all doing 0:01:46.080 --> 0:01:49.960 pretty well. It doesn't really smack of secular stagnation. So 0:01:50.160 --> 0:01:53.720 I think the economy is pretty solid. My main mantra 0:01:53.800 --> 0:01:58.080 has been slow and steady wins the race, and seems 0:01:58.120 --> 0:02:01.080 to me that that's still pretty accurate description of what's 0:02:01.080 --> 0:02:03.240 going on. We've been growing for seven or eight years, 0:02:03.680 --> 0:02:06.000 and I think over those years have made a fair 0:02:06.000 --> 0:02:08.320 amount of progress. We're learning a little bit here about 0:02:08.360 --> 0:02:10.160 what the White House hope it's hopes to advance, and 0:02:10.200 --> 0:02:12.280 it's in its budget. And one thing that Stephen Manwton, 0:02:12.280 --> 0:02:15.200 the new Treasury Secretary, said last week to Bloomberg News. 0:02:15.200 --> 0:02:17.240 Over the weekend to to Fox News in an interview 0:02:17.840 --> 0:02:19.880 is that his his assumption for growth is now two 0:02:19.919 --> 0:02:22.680 point four percent, So that's less than what candidate Donald 0:02:22.680 --> 0:02:24.760 Trump said when he was on the campaign trails. There 0:02:24.760 --> 0:02:27.920 a new realism pervading Washington here a little over a 0:02:27.919 --> 0:02:31.760 month into the new administration. Uh, the airs out out 0:02:31.760 --> 0:02:34.840 of the balloon. A fair amount what looked like a 0:02:34.919 --> 0:02:40.799 case at the very beginning of this episode has faded 0:02:40.880 --> 0:02:42.880 quite a quite a bit, and that's probably a good 0:02:42.880 --> 0:02:45.919 assessment of it. My forecast is for growth of to 0:02:46.000 --> 0:02:49.239 an a percent for this year, which it doesn't sound 0:02:49.280 --> 0:02:51.480 like a lot, but it's frankly a fairly heroic number 0:02:51.480 --> 0:02:54.720 because we haven't had to an apercent growth. Also assuming 0:02:55.040 --> 0:02:58.000 and inflation something like one and a half or two percent, 0:02:58.560 --> 0:03:02.239 so you're starting to get normal grow up over four percent, 0:03:02.400 --> 0:03:05.800 which is a key level to get. As you mentioned, 0:03:05.840 --> 0:03:07.880 your your growth is something there two point five percent. 0:03:07.960 --> 0:03:10.760 What are the driving factors? There was so much enthusiasm, 0:03:10.760 --> 0:03:12.720 it seemed, in the market for a big infrastructure spending 0:03:12.720 --> 0:03:15.040 package after the elections. He said the era has maybe 0:03:15.240 --> 0:03:18.320 begun to dissipate from that that limited watching didn't what's 0:03:18.320 --> 0:03:19.960 going to be the driver there? Do you think Okay, well, 0:03:20.000 --> 0:03:23.760 I didn't have big hopes that because they're talking about 0:03:23.760 --> 0:03:27.680 a trillion dollars over a decade. Uh So that's that's 0:03:27.680 --> 0:03:30.440 not enough to fix the potholes, you know, a hundred 0:03:30.480 --> 0:03:35.040 billion dollars a year. But the economy is slowly becoming 0:03:35.560 --> 0:03:40.080 self sustaining with emplument gains leading to retail sales. House 0:03:40.160 --> 0:03:43.280 prices are up something like seven percent. It's not markets up, 0:03:43.320 --> 0:03:47.360 so you're getting a broadening out of growth in the US. 0:03:47.400 --> 0:03:51.320 What you invented at C. J. Lawrence, and I think 0:03:51.320 --> 0:03:55.520 of Chairman Greenspan as well, is looking at tangible real 0:03:55.960 --> 0:04:00.520 economic data like what trucks are doing, what railroads are doom, 0:04:00.880 --> 0:04:04.120 what capital goods is doing. Within the I S I 0:04:04.200 --> 0:04:07.360 report that you created every day, what's the one metric 0:04:07.440 --> 0:04:12.480 that gets you to some enthusiasm about a better nominal GDP? Well, 0:04:12.600 --> 0:04:14.880 we we survey about two or three d companies of 0:04:14.880 --> 0:04:18.520 a week. Uh and so I have a very I'm 0:04:18.520 --> 0:04:21.440 almost a perfect knowledge how the economy is doing currently. 0:04:22.040 --> 0:04:25.520 That forecasting, though and not predictive, and those have edged 0:04:25.600 --> 0:04:28.200 up a little bit, consistent with a little over two 0:04:28.200 --> 0:04:31.919 percent real GDP growth and probably something like four percent 0:04:32.000 --> 0:04:35.800 nominal GDP growth. But uh, Thomas and I discussed a 0:04:35.839 --> 0:04:39.680 minute or so ago, what's driving the economy today is 0:04:39.760 --> 0:04:43.479 not what drove it forty years ago. Today it's sports 0:04:43.480 --> 0:04:47.440 and entertainment. It's a new tech, you know, like a 0:04:47.440 --> 0:04:51.360 Facebook or a Snap. It's e e commerce, And then 0:04:51.400 --> 0:04:55.720 it's healthcare and higher education. Of those things that you mentioned, 0:04:55.720 --> 0:04:59.000 the only ones that are gonna employ bodies, warm American 0:04:59.040 --> 0:05:03.760 bodies is healthcare and maybe education. Where are the jobs 0:05:03.800 --> 0:05:06.640 going to come from? Where is how are we going 0:05:06.680 --> 0:05:11.159 to get the people employed that voted for Senator Sanders 0:05:11.200 --> 0:05:14.680 and that voted for Mr Trump. The You know, we've, 0:05:14.839 --> 0:05:17.960 as you well know, because you're such as a student 0:05:18.000 --> 0:05:20.919 of this stuff, Tom, we've had emplument gains, you know, 0:05:20.960 --> 0:05:25.240 pretty steady around a hundred thousand for years now. Uh 0:05:25.480 --> 0:05:29.000 stan Fisher says, we're fully employed, and Danny Blanche Flower 0:05:29.080 --> 0:05:31.920 Upper Dharma says, no, we're done. So it's a debate 0:05:32.000 --> 0:05:34.960 and they and the coach or the referee on that 0:05:35.360 --> 0:05:38.360 will be what happens to wages, And so far wages 0:05:38.400 --> 0:05:41.599 have disappointed me. I thought they'd be over three percent 0:05:41.760 --> 0:05:44.280 by now and they're not. But when you get the 0:05:44.320 --> 0:05:47.280 full employment, you'll know it because you see wages accelerate. 0:05:47.680 --> 0:05:50.040 You know, when the FED makes its decision here March 0:05:50.080 --> 0:05:51.719 whether or not to raise rates, is that is that 0:05:51.800 --> 0:05:53.880 the big X factor here is our wages, the big 0:05:53.960 --> 0:05:55.920 factor that they're going to be weighing. I think so. 0:05:56.600 --> 0:05:59.360 Uh So, I'm I'm sort of in the hole here 0:05:59.360 --> 0:06:02.360 because I've been acting wages to pick up for some time. 0:06:02.560 --> 0:06:04.880 There were one eight and now they're like two and 0:06:04.880 --> 0:06:06.840 a percent. So they have picked up, but not as 0:06:06.920 --> 0:06:10.400 much as I thought. The January number, which set the 0:06:10.440 --> 0:06:15.080 market back a lot, was only point one. Uh And 0:06:15.200 --> 0:06:17.960 when I look back at history, uh, it suggests that 0:06:18.000 --> 0:06:20.760 the February number will be point four. Now if if 0:06:20.800 --> 0:06:24.840 it is, then that will put the next meeting squarely 0:06:24.880 --> 0:06:28.479 on track. Within this is the idea of Okay, we 0:06:28.520 --> 0:06:30.479 get rising wages, and I'm getting a lot of mail 0:06:30.520 --> 0:06:33.919 from listeners on this. We get rising, rising wages, but 0:06:33.960 --> 0:06:37.040 we also get inflation with it. So my real wage, 0:06:37.040 --> 0:06:40.960 my inflation adjusted wage, is flat or diminished. Is that 0:06:41.320 --> 0:06:45.200 a tangible risk inflation getting in the way of the 0:06:45.200 --> 0:06:48.960 goods you're talking about? I don't think so at the moment, 0:06:49.000 --> 0:06:53.040 because pricing power is so difficult to come by particularly 0:06:53.160 --> 0:06:56.240 in the old economy. Like we talked about target this morning, 0:06:56.720 --> 0:06:59.520 there's no pricing power there autos all the time you 0:06:59.560 --> 0:07:08.039 shot up the term. Wait when I asked the question 0:07:08.120 --> 0:07:12.280 for you, continue and let me ask you about sentiment 0:07:12.320 --> 0:07:14.560 and optimism. We talked to Bill Dunkelberg. Every time the 0:07:14.760 --> 0:07:16.600 n f i B Survey Small business has come out, 0:07:16.640 --> 0:07:19.240 optimism seems very high. How much currency should we give 0:07:19.280 --> 0:07:21.160 that at this point in time? In other words, we 0:07:21.200 --> 0:07:24.360 see we see optimism about growth and hiring and spending 0:07:24.360 --> 0:07:28.240 money on capex. Uh what from there? In other words, 0:07:28.280 --> 0:07:31.440 we see that optimism, what does that lead to? Well? Uh? 0:07:31.680 --> 0:07:33.360 One of the things I do, I think is to 0:07:33.440 --> 0:07:38.040 connect the dots. And consumer confidence has also moved up, 0:07:38.720 --> 0:07:44.119 and unlike the or say in addition to UH dunks 0:07:44.360 --> 0:07:47.679 is affectionately called an n f i B a survey 0:07:47.720 --> 0:07:53.120 which is skyrocketed. The Conference Board does a survey of 0:07:53.520 --> 0:07:58.480 employment expectations by consumers and that has a similar hockey 0:07:58.520 --> 0:08:01.520 stick look to it. Uh. So I got three different 0:08:02.240 --> 0:08:05.400 measures of confidence and they've all moved up a fair amount. 0:08:05.520 --> 0:08:08.200 As I mentioned, Uh, animal spirits is one of the 0:08:08.240 --> 0:08:11.160 ways that you know trump Atomics can can work through 0:08:11.160 --> 0:08:16.720 the economy that precedes getting any fiscal stimulus working. We 0:08:16.720 --> 0:08:18.360 we talked to our calleing Michael McKee. He was down 0:08:18.360 --> 0:08:21.840 in Mexico City talking with the economic minister there. UH. 0:08:21.880 --> 0:08:23.600 And something he said in that interview is the moment 0:08:23.640 --> 0:08:25.600 that in those negotiations with the U S. Should they 0:08:25.640 --> 0:08:29.960 happen over uh import tariffs? Uh that they mentioned tefne cars. 0:08:29.960 --> 0:08:32.720 In his words, he said, we say bye bye. Where 0:08:32.760 --> 0:08:34.559 do you see things going from here? What's the weight 0:08:34.600 --> 0:08:36.440 of this new protection? Isn't going to be on the 0:08:36.480 --> 0:08:40.200 U S economy? So I don't. My own personal view 0:08:40.640 --> 0:08:43.440 is that it's more barked than bite. But I'll watch 0:08:43.480 --> 0:08:46.800 it every day, uh to see if the bite starts 0:08:46.800 --> 0:08:49.440 to happen. But my my guess is that Trump is 0:08:49.480 --> 0:08:53.400 trying to uh to redo trade deals that are more 0:08:53.440 --> 0:08:57.120 advantageous for the US and his opinion as opposed to 0:08:57.120 --> 0:08:59.800 tear up and after or tear up debut. Oh. But 0:09:00.000 --> 0:09:02.880 it's not clear, is it? Uh? As we sit here 0:09:02.960 --> 0:09:04.360 right now, I want to find out question to get 0:09:04.360 --> 0:09:06.560 your started on your day at time and Professor Summers 0:09:06.600 --> 0:09:10.319 talks about secular stagnation? Do you agree with Larry Summers 0:09:10.320 --> 0:09:12.600 that it's pretty moldy out there, and that we need 0:09:12.640 --> 0:09:16.000 a real jump start of policy. Boy, I don't so 0:09:16.040 --> 0:09:19.240 I think. I think, uh, Larry Summers, so I I 0:09:19.280 --> 0:09:23.560 think it's terrific. And you mentioned public service earlier. He's 0:09:23.600 --> 0:09:26.560 really given and it continues to give. But he lives 0:09:26.559 --> 0:09:30.000 in Boston. Boston is booming. You walk out and it's 0:09:30.000 --> 0:09:32.439 just booming. Has all the things I mentioned, and then 0:09:32.440 --> 0:09:33.800 he spends a lot of time in Washington, d C. 0:09:34.200 --> 0:09:38.320 At Washington d C is strong too, still standing, still standing? 0:09:38.400 --> 0:09:41.679 Is that understatement? So? I think I think the U. S. 0:09:41.720 --> 0:09:45.080 Economy is slow and steady, and it's like managing money. 0:09:45.080 --> 0:09:48.199 If you can avoid to lose money, you can actually 0:09:48.240 --> 0:09:50.320 make some real progress. Thank you so much for coming 0:09:50.360 --> 0:09:52.880 by today and particularly answering our questions in the future 0:09:52.920 --> 0:09:56.120 of the FED and Kevin Warshon and all that. Greatly appreciated. 0:09:56.280 --> 0:10:00.240 Edward Hyman is with ever core. I s I, David, 0:10:00.280 --> 0:10:01.760 I think it would be safe. I showed at the 0:10:01.760 --> 0:10:05.840 beginning of television the secret ed him and memo mentioned 0:10:06.559 --> 0:10:11.400 the bad news between the famous the famous. Yeah, really 0:10:11.440 --> 0:10:13.440 the red that's what they should have done. They should 0:10:13.440 --> 0:10:15.840 add at him and be in charge of the envelopes 0:10:16.120 --> 0:10:18.480 at the Oscar that would have fixed things at Himan. 0:10:18.520 --> 0:10:33.280 Whatever core I s David bringing on our next guest. 0:10:33.360 --> 0:10:36.560 All I know is the newspapers in Bloomberger Trump Trump, Trump, Trump, 0:10:36.760 --> 0:10:40.760 Trump TRUMPA Trump, and our steam next guest doesn't agree 0:10:40.760 --> 0:10:42.640 with that. She believes the House has a little bit 0:10:42.640 --> 0:10:45.280 of Republicans have a little bit to do with it. Okay, 0:10:45.679 --> 0:10:48.280 Liffy Cantell joins us now. She's executive vice president and 0:10:48.280 --> 0:10:49.880 had a public policy at Pimpco. Here with us in 0:10:49.880 --> 0:10:52.199 our eleven three oh studios in New York. Let's start 0:10:52.240 --> 0:10:54.720 with the budget. We're beginning to get some contries. What 0:10:54.720 --> 0:10:56.559 that's gonna look like? The White House budget's gonna look like. 0:10:56.600 --> 0:10:58.240 We have this fifty four billion dollar figure when it 0:10:58.280 --> 0:11:01.680 comes to defense spending, increasing defense spending. Help us understand 0:11:01.840 --> 0:11:04.040 what we should make of that. We haven't had regular order, 0:11:04.080 --> 0:11:07.360 we haven't had reconciliation uttered on Capitol Hill for many 0:11:07.440 --> 0:11:10.559 years now. Are things changing? Are you optimistic that we're 0:11:10.559 --> 0:11:12.240 going to see a normal budget process here? And what 0:11:12.240 --> 0:11:14.160 should we make of this document that's going to be 0:11:14.240 --> 0:11:16.120 released by the White House here presumably in these next 0:11:16.160 --> 0:11:18.960 few days. Yeah, I mean It's a great question. I mean, 0:11:19.000 --> 0:11:21.880 I think that just from as a starting point, everyone 0:11:21.960 --> 0:11:24.840 sort of needs to qualify kind of what the president's 0:11:24.840 --> 0:11:27.679 budget is. I mean, it's much more of a political 0:11:27.720 --> 0:11:31.120 document than it is UM in terms of actually having 0:11:31.480 --> 0:11:34.600 sort of the force of law. So it has to 0:11:34.679 --> 0:11:38.400 go through the normal kind of congressional machinations. It's really 0:11:38.440 --> 0:11:41.840 the Congress that actually sets the budget, and then also 0:11:42.440 --> 0:11:45.560 UM does the implementing, like the implementing bills, like the 0:11:45.559 --> 0:11:48.559 appropriations bills. So what this is though, and what it 0:11:48.559 --> 0:11:51.520 should sort of be viewed as, is where Donald Trump's 0:11:51.559 --> 0:11:54.280 priorities are. So we knew that he was going to 0:11:54.320 --> 0:11:57.079 be supportive of defense spending. I think some people didn't 0:11:57.080 --> 0:11:58.679 know how much he was going to be, you know, 0:11:58.720 --> 0:12:01.480 supportive of that. UM. So this is I think sort 0:12:01.520 --> 0:12:05.079 of a living testament to that. But again it should 0:12:05.120 --> 0:12:08.000 be caveated that this does not have the force of law. 0:12:08.240 --> 0:12:10.680 This has to go through the congressional machinations and actually 0:12:10.679 --> 0:12:12.920 in order to get enacted. Yesterday the White House, the 0:12:12.920 --> 0:12:15.360 President sat down with the House Speaker Paul Ryan and 0:12:15.400 --> 0:12:17.560 the Senate Majority leader as well. Presumably they talked about 0:12:17.559 --> 0:12:19.520 the budget, talked about this speech, that the President is 0:12:19.559 --> 0:12:22.440 going to deliver tonight. What's your sense of the relationship 0:12:22.480 --> 0:12:26.199 there between the White House and Congress. Tom mentions the 0:12:26.200 --> 0:12:29.640 the disarray even among the House. Uh, you know, what's 0:12:29.679 --> 0:12:31.920 your sense of how well the machine is operating and 0:12:31.960 --> 0:12:34.680 Washington right now? Well, you know, it's it's interesting because 0:12:34.720 --> 0:12:38.040 I think you know, certainly what markets will be looking 0:12:38.080 --> 0:12:41.920 at for the speech tonight will be some specifics around 0:12:42.200 --> 0:12:46.920 President Trump's pro growth agenda, tax, your format, infrastructure exactly. 0:12:47.000 --> 0:12:50.600 But I also think that congressional Republicans want those specifics 0:12:50.640 --> 0:12:55.559 because while sort of campaign slogans and sort of generalities 0:12:55.600 --> 0:13:00.280 and platitudes are certainly helpful, um, at this point, the 0:13:00.360 --> 0:13:03.280 rubber really needs to to meet the road, and Congress 0:13:03.320 --> 0:13:07.360 has set out on an incredibly ambitious legislative agenda. They 0:13:07.440 --> 0:13:10.400 need the president to provide some directions. Tell us about 0:13:10.480 --> 0:13:13.280 the power metric right now, I mean, we're gonna see 0:13:13.320 --> 0:13:15.000 all these He's like the oscars. They're gonna be all 0:13:15.000 --> 0:13:18.000 these egos in the room, all focused on the president. 0:13:18.080 --> 0:13:21.680 I get, what is the power of the Republican leadership, 0:13:22.000 --> 0:13:25.160 What is the power of the chairman and chairwoman, What 0:13:25.240 --> 0:13:27.840 are the power of the tea party in the run 0:13:27.840 --> 0:13:32.240 of the mill conservative, austere Republicans give us a power 0:13:32.320 --> 0:13:35.720 template right now? Well, it's it's a good question because 0:13:35.800 --> 0:13:38.400 I think if you just simply look at the fact 0:13:38.400 --> 0:13:41.680 that Republicans have majorities in the House and the Senate, 0:13:41.800 --> 0:13:45.160 and they dominate the White House, you would sort of think, Okay, 0:13:45.160 --> 0:13:47.240 well they're gonna be it's gonna be very easy for 0:13:47.240 --> 0:13:50.640 them to enact the their agenda. But within the Republicans 0:13:50.640 --> 0:13:52.439 there's quite a number there's quite a lot of divide. 0:13:52.440 --> 0:13:54.640 There's a divide between the House and the Senate. Say, 0:13:54.640 --> 0:13:57.959 on tax reform, the House supports this border adjustment tax, 0:13:58.240 --> 0:14:00.640 some of the Republican senators have come out against it. 0:14:01.120 --> 0:14:05.000 Um there within House Republicans there's some divide, right there's 0:14:05.040 --> 0:14:07.480 the sort of the deficit hawks or the people who 0:14:07.679 --> 0:14:10.600 actually want to see some increase in spending, especially on defense. 0:14:10.880 --> 0:14:15.160 So there is not this is not a cohesive Republican 0:14:15.200 --> 0:14:18.760 party necessarily. I think they can be brought together, and 0:14:18.800 --> 0:14:21.280 President Trump really, I think has an opportunity to do 0:14:21.320 --> 0:14:23.600 that tonight. It's just a question whether he's actually gonna 0:14:23.600 --> 0:14:25.520 be able to do that or not. If I'm your client, 0:14:25.720 --> 0:14:27.240 I want to know what we're talking about when we 0:14:27.240 --> 0:14:29.560 talk about a tax reform with a pologies to Raymond 0:14:29.560 --> 0:14:32.760 Carver there, but you get the Paul Ryan Brady plan, 0:14:32.840 --> 0:14:34.640 you have Gary Cone working on a tax plan of 0:14:34.720 --> 0:14:37.440 his own. How do I make sense of what's most 0:14:37.480 --> 0:14:40.800 likely to be the blueprint for a tax reform and 0:14:40.800 --> 0:14:42.200 watched in right now? Do you have a sense of 0:14:42.200 --> 0:14:44.960 what it is? It's a great question, and honestly, this 0:14:45.000 --> 0:14:46.960 is the number one question that we're getting from our 0:14:47.000 --> 0:14:50.200 clients is what will tax reform look like? You know? 0:14:50.240 --> 0:14:53.080 I think the conventional wisdom was right after the election 0:14:53.120 --> 0:14:56.200 that since Speaker Ryan had done so much work on 0:14:56.360 --> 0:14:59.320 tax reform as the head of Ways and means um 0:15:00.000 --> 0:15:03.800 in House leadership, that that President Trump would be more 0:15:03.840 --> 0:15:06.160 inclined just to defer to him, and that the Senate 0:15:06.200 --> 0:15:09.160 would likely to defer to him as well. I think 0:15:09.320 --> 0:15:13.400 that plan has been upended, um partly because of this 0:15:13.440 --> 0:15:16.760 border adjustment tax, which is at the center of the 0:15:16.800 --> 0:15:21.040 House tax reform plan. We think that it is unlikely 0:15:21.160 --> 0:15:23.440 that at the end of the day that stays in 0:15:23.960 --> 0:15:26.840 and because it's a big revenue raisor and it allows, 0:15:27.000 --> 0:15:29.600 you know, the corporate tax rate to be cut even more. Um, 0:15:29.640 --> 0:15:32.320 you'll probably see a smaller plan and it will probably 0:15:32.320 --> 0:15:35.480 take longer going with the market, I believe it's billion 0:15:35.720 --> 0:15:38.480 is a delta on defense spending. How much does a 0:15:38.560 --> 0:15:41.920 border tax bring in? Have you seen a good so? 0:15:42.160 --> 0:15:45.040 The Tax Foundation has its scored at one point one 0:15:45.080 --> 0:15:47.600 trillion over ten years. The Tax Policy Center has it 0:15:47.680 --> 0:15:50.680 about one trillion, So it is a huge revenue raisor 0:15:50.800 --> 0:15:53.960 so without that by definition and the tax reform, I believe, 0:15:54.200 --> 0:15:56.800 like what Tip O'Neill would say is, Okay, what's the number, 0:15:58.480 --> 0:16:02.440 what's what's a border tax propos So what if we 0:16:02.480 --> 0:16:05.880 see a two percent or four percent border tax? Yeah, 0:16:05.920 --> 0:16:08.240 you know, and you might see some some sort of 0:16:08.320 --> 0:16:10.880 iteration around that. You Also, what I think is actually 0:16:10.880 --> 0:16:13.080 even more likely if it is included, is that you 0:16:13.080 --> 0:16:15.920 would see a very long phase in time, So it 0:16:15.960 --> 0:16:18.440 would be at the rate, but it would be phasing 0:16:18.480 --> 0:16:21.680 it maybe something like commodities twenty seconds left. And it's 0:16:21.680 --> 0:16:24.560 not about the Denver broncos. Are we going back to 0:16:24.880 --> 0:16:28.160 nineteen seventy six, nineteen seventy eight where there's actually the 0:16:28.240 --> 0:16:31.840 strange thing called legislation? Are we actually going to see that? 0:16:33.240 --> 0:16:36.240 I think that as more time goes by, and it's 0:16:36.280 --> 0:16:38.920 more time that goes by that President Trump doesn't endorse 0:16:38.920 --> 0:16:42.720 a specific plan. I think it becomes increasingly harder to 0:16:42.800 --> 0:16:44.720 a tax reform as we get close to the intern. 0:16:44.840 --> 0:16:46.960 John Tucker, do you see how I said nineteen seventy 0:16:47.000 --> 0:16:50.280 six and nineteen seventy eight, and Libby Cantrill equated that 0:16:50.400 --> 0:16:55.240 with Jefferson. I wasn't actually born yet. I'm just killing 0:16:55.280 --> 0:16:59.840 it here. I'm just thinking, oh, go away, let me 0:17:00.040 --> 0:17:04.440 control with Pimco. Thank you so much. I think this 0:17:04.600 --> 0:17:16.000 is Bloomberg brought you by Bank of America Mary Lynch, 0:17:16.119 --> 0:17:20.360 dedicated to bringing our clients insights and solutions to meet 0:17:20.400 --> 0:17:23.879 the challenges of a transforming world. That's the power of 0:17:23.920 --> 0:17:29.720 global connections. Mary Lynch, Pierce feederin Smith Incorporated, Member s 0:17:29.800 --> 0:17:35.400 I PC. What we're trying to do here today within 0:17:35.440 --> 0:17:38.160 the quiet markets is really recalibrate into a new month, 0:17:38.200 --> 0:17:41.800 the last month of the first quarter that I believe 0:17:41.800 --> 0:17:45.360 that begins tomorrow. Today is too there's no leap here 0:17:45.400 --> 0:17:49.040 this year. He's the last day. Martin Haggerty where this 0:17:49.240 --> 0:17:52.440 black rock and what's great about him as he synthesizes 0:17:52.480 --> 0:17:57.640 in the fixed income that, excuse me, gas, Kate Moore 0:17:57.680 --> 0:18:01.359 and Jeff Rosenberg do, and everyone else but Martin, Howardy 0:18:02.240 --> 0:18:08.560 filters in the inflation dynamics is described by UH the 0:18:08.640 --> 0:18:11.920 fixed income market, he joins us. Now, Martin, what does 0:18:12.040 --> 0:18:15.080 like the five year five year forward tell you right 0:18:15.119 --> 0:18:19.639 now that inside baseball idea of looking out five years 0:18:19.640 --> 0:18:23.520 at the view out five years from there? Well, Tom, 0:18:23.560 --> 0:18:26.920 I think it's worth while looking at that from two aspects. Basically, 0:18:26.920 --> 0:18:29.480 what is it telling us now and what was it 0:18:29.560 --> 0:18:33.640 telling us roughly a year ago? Um, right now, it's 0:18:33.680 --> 0:18:38.000 telling us that headline CPI, as priced by the US 0:18:38.359 --> 0:18:41.560 Chips market is priced to be in the vicinity of 0:18:41.680 --> 0:18:45.400 two percent between two thousand and twenty two and two 0:18:45.400 --> 0:18:49.040 thousand and twenty seven. Now, if we compare that to 0:18:49.320 --> 0:18:53.360 the FITS inflation target, the FIT has an inflation target 0:18:53.520 --> 0:18:58.399 that is driven by PC inflation, and that is a 0:18:58.440 --> 0:19:01.280 slightly different metric that tends to run about thirty to 0:19:01.400 --> 0:19:05.200 forty basis points below CPI. So are we basically pricing 0:19:05.240 --> 0:19:09.800 in a run rate of PC inflation into the future 0:19:10.000 --> 0:19:12.679 of about one point six to one point seven percent, 0:19:13.320 --> 0:19:18.080 which implies that despite the significant improvement in that metric, 0:19:18.160 --> 0:19:20.600 that we've seen over the last twelve months that the 0:19:20.600 --> 0:19:23.240 FED is still never going to hit its inflation target 0:19:23.560 --> 0:19:26.199 in that time period that I specified. I mean, I 0:19:26.200 --> 0:19:29.840 mean this folds right into FED policy in the ancient 0:19:29.920 --> 0:19:33.760 thing that all of our listeners know is simply a 0:19:33.880 --> 0:19:36.280 fear of inflation. Do you wake up in the morning 0:19:36.280 --> 0:19:40.679 at Black Rock with a fear of inflation? You know, 0:19:40.760 --> 0:19:42.960 I was born and brought up in Zimbabwe, so that's 0:19:42.960 --> 0:19:45.679 somewhat genetic for me. Yeah, that's true. I guess it's 0:19:45.800 --> 0:19:49.600 it's yeah, I'll say. But I mean, I mean, I mean, 0:19:49.800 --> 0:19:51.639 we get this, David, and I get this in the 0:19:51.680 --> 0:19:55.119 mail where we receive we're gonna have runaway inflation, sixties inflation, 0:19:55.520 --> 0:19:59.760 oh my, oh mg, four percent inflation, eight percent nominal GDP, 0:20:00.119 --> 0:20:03.240 and yet none of the evidence shows that, does it? No? 0:20:03.480 --> 0:20:05.919 And I think you know, a lot of the the 0:20:06.119 --> 0:20:09.000 views in that regard have been misfounded. And I particularly 0:20:09.000 --> 0:20:13.040 recall to the immediate aftermath of the crisis, where any 0:20:13.200 --> 0:20:16.040 sort of pundit you had on on on various platforms 0:20:16.119 --> 0:20:19.680 was talking about a Zimbabwe style inflation with the FED 0:20:19.960 --> 0:20:23.680 expanding the balance sheet and Kewi Operation twists and the 0:20:23.760 --> 0:20:26.680 various iterations of policy that we had, and I think 0:20:26.720 --> 0:20:29.919 that that was completely unfounded and continues to be so. 0:20:30.119 --> 0:20:33.760 But when we look at the macro backdrop, the economy 0:20:33.840 --> 0:20:37.680 continues to heal in the aftermath. And I do think 0:20:37.720 --> 0:20:41.800 there are some dictionary disinflationary impacts from technology that are 0:20:41.840 --> 0:20:46.879 obviously pushing some UH some components of CPI down, as 0:20:46.920 --> 0:20:51.000 well as some of the international factors with respect to globalization. 0:20:51.440 --> 0:20:53.600 But if if we sort of mark to market where 0:20:53.600 --> 0:20:56.760 we are today and look at core CPI at two 0:20:56.760 --> 0:21:00.480 point three, do I see runaway inflation? Does that number 0:21:00.480 --> 0:21:03.479 get up to four or five? I don't think so. 0:21:03.720 --> 0:21:06.000 I I can see that the labor market in the 0:21:06.080 --> 0:21:10.399 US continues to improve. We're at levels of unemployment consistent 0:21:10.400 --> 0:21:14.520 with nehru Um. We have had a tremendous amount of 0:21:14.720 --> 0:21:19.200 stability in the currency markets more recently on the back 0:21:19.240 --> 0:21:22.119 of significant dollar strength we saw from two thousand and 0:21:22.119 --> 0:21:25.560 fourteen into two thousand and sixteen. That is allowing some 0:21:25.680 --> 0:21:30.600 of the UH internationally set drivers of disinflation. Now we 0:21:30.640 --> 0:21:34.040 have seen UH start to stabilize, and I'm of the 0:21:34.080 --> 0:21:36.080 opinion that course c p I as long as the 0:21:36.160 --> 0:21:40.240 US labor market continues to improve UM and and stay 0:21:40.320 --> 0:21:44.480 at a relatively healthy run rate in line or below NEHRU. 0:21:44.600 --> 0:21:47.360 Then we're in a in a path where core CPI 0:21:47.520 --> 0:21:49.720 by the end of two thousand and eighteen is probably 0:21:49.760 --> 0:21:51.520 going to be somewhere in the vicinity of two point 0:21:51.600 --> 0:21:54.560 seven percent. Alright, So tom asks is the zimbabweb barn 0:21:54.600 --> 0:21:57.080 Martin Hagerty is worried about inflation? How about Fed? Sheer 0:21:57.160 --> 0:21:59.760 Janna Yellen? Is this something that she is still concerned about? 0:21:59.800 --> 0:22:01.919 Is the shifted almost entirely at the FED here too 0:22:02.240 --> 0:22:07.080 to the labor market? Well, I think it's it's one 0:22:07.119 --> 0:22:09.119 can never quite pin down what the focus at the 0:22:09.160 --> 0:22:12.320 FED currently is UM. But if you look at the 0:22:12.320 --> 0:22:16.840 two pillars of their mandate, full employment and price stability UM, 0:22:16.920 --> 0:22:19.240 one could argue that we're at full employment and one 0:22:19.240 --> 0:22:22.560 could argue that we're at or very close to price stability. 0:22:22.600 --> 0:22:25.600 So it appears that the FED is looking at a 0:22:25.640 --> 0:22:28.840 host of of other metrics as well. And when you 0:22:28.880 --> 0:22:33.399 look at the real policy path priced into the front 0:22:33.480 --> 0:22:36.240 end of rate markets, i e. Where are FED funds 0:22:36.280 --> 0:22:40.080 priced to be less inflation, you still have real policy 0:22:40.160 --> 0:22:43.000 rates that are negative out to two thousand and eighteen, 0:22:43.720 --> 0:22:46.719 and I would argue that that that is not necessarily 0:22:46.720 --> 0:22:51.600 consistent with an economy at full employment and and basically 0:22:51.600 --> 0:22:55.920 at price stability. So, you know, trying to to sort 0:22:55.920 --> 0:22:58.760 of reference that back to the question you asked, um, 0:22:58.840 --> 0:23:01.040 you know what we have seen in the aftermath of 0:23:01.080 --> 0:23:04.000 the of the Trump election. We've we've seen sort of 0:23:04.040 --> 0:23:08.199 economic surprise. Data indices moved sharply to the highside. But 0:23:08.240 --> 0:23:12.600 when we break down those economic data surprises, a lot 0:23:12.680 --> 0:23:16.200 of the strength seems to be coming from survey based measures. 0:23:16.760 --> 0:23:21.760 So we have not yet seen that translate into hard 0:23:22.240 --> 0:23:27.720 macroeconomic data, apart from the labor market and the pricing 0:23:28.520 --> 0:23:31.640 components that that I mentioned. So perhaps the FED are 0:23:32.880 --> 0:23:35.800 being a little more patient and waiting to see if 0:23:35.920 --> 0:23:40.800 the improved psychology prevalent in a lot of these survey 0:23:40.880 --> 0:23:43.320 based measures actually begins to show up into the hard 0:23:43.400 --> 0:23:46.000 data you mentioned Fed funds futures. I've got w ARAP 0:23:46.240 --> 0:23:47.919 go up here on the Bloomberg now looking at the 0:23:47.920 --> 0:23:49.679 probability of a hike at that March meeting. Now at 0:23:50.240 --> 0:23:53.960 cent we saw it move yesterday. Help an amateur like 0:23:54.080 --> 0:23:57.399 me here, How predictive is w ARAP? What? What? What? 0:23:57.480 --> 0:24:00.960 Credence do you give to here? Well, I think that 0:24:01.119 --> 0:24:03.959 stems back to the FEDS reaction function, where we know 0:24:04.359 --> 0:24:08.680 that this fit is not or has not been one 0:24:08.760 --> 0:24:13.240 to surprise markets. So the greater the probability that that 0:24:13.359 --> 0:24:18.080 March pricing of a March hike goes, I e. The 0:24:18.080 --> 0:24:22.400 the if it if it continues to mention north, I 0:24:22.400 --> 0:24:25.520 think the March becomes more and more into play. And 0:24:26.000 --> 0:24:30.640 actually I have been perplexed why March has been priced 0:24:30.680 --> 0:24:33.919 at such a low probability given the data evolution that 0:24:33.960 --> 0:24:36.760 I alluded to. Okay, I get that, and I take 0:24:36.840 --> 0:24:40.919 great note of your two point seven corps UH inflation 0:24:41.040 --> 0:24:44.200 rate out a bit and that's quite a lift. What 0:24:44.280 --> 0:24:47.640 we're waiting for, I would suggest, respectfully, sir, what you're 0:24:47.640 --> 0:24:51.399 waiting for, and more importantly, what chair yellings waiting for 0:24:52.160 --> 0:24:55.440 is decent economic growth? Help me here with a horse 0:24:55.480 --> 0:24:58.240 and the cart. What's the horse and what's the cart? 0:24:58.320 --> 0:25:01.080 For chair yelling? Is it age growth as a horse? 0:25:01.520 --> 0:25:04.119 Is it just g DPS the horse? Or is it 0:25:04.200 --> 0:25:10.240 inflation expectations? I in this odd financial repression that we're in, 0:25:10.680 --> 0:25:12.520 I'm not sure I know what the horse looks like. 0:25:14.000 --> 0:25:18.600 I think that is a constant pursuit UM where obviously 0:25:19.240 --> 0:25:21.119 the I think all of them you mentioned Tom, to 0:25:21.160 --> 0:25:24.600 tell the truth, are are very important horses. Where you 0:25:24.680 --> 0:25:27.880 have had the the healthy labor market data, the average 0:25:27.880 --> 0:25:32.159 hourly earnings has not necessarily correlated with the improvement in 0:25:32.160 --> 0:25:35.480 the labor market we've seen UM and at the same time, 0:25:35.480 --> 0:25:40.679 there appears to be a an inherent mismatch between UH 0:25:41.560 --> 0:25:44.840 the unemployment rate and GDP growth, implying some sort of 0:25:45.080 --> 0:25:49.920 collapse in productivity. Now we can talk about, obviously the 0:25:49.920 --> 0:25:52.800 the mismeasurement of of g d P and how it 0:25:52.880 --> 0:25:55.760 may not necessarily be the mist of the best measure 0:25:55.880 --> 0:25:58.840 for for economic growth today. And I think a lot 0:25:58.920 --> 0:26:02.600 of those discussions are are well entrenched within the f 0:26:02.640 --> 0:26:05.879 O m c UM. But I think that one cannot 0:26:05.920 --> 0:26:08.960 necessarily hop on on one data point where if we 0:26:09.080 --> 0:26:12.720 got a soft average hourly earnings for January, we need 0:26:12.760 --> 0:26:15.440 to look at it in in a in a greater context, 0:26:15.480 --> 0:26:19.439 I look at other labor market data with respective wages 0:26:19.960 --> 0:26:23.360 and reassess um that sort of three months run rate 0:26:23.359 --> 0:26:25.960 and average hourly earning right that we may see, well, 0:26:26.000 --> 0:26:28.280 this is really important. I haven't looked at the h 0:26:28.560 --> 0:26:30.120 chart and well, folks, I'm going to put it out 0:26:30.119 --> 0:26:32.840 on Twitter. It's a great Bloomberg chart that shows the 0:26:32.920 --> 0:26:36.359 pullback that we've seen recently. But nevertheless, I'm gonna say, 0:26:36.400 --> 0:26:39.080 making back two thirds of the way to the lift 0:26:39.160 --> 0:26:42.199 of average early earnings seen in two thousand seven. In 0:26:42.240 --> 0:26:45.399 two thousand what did joy to speak to you about 0:26:45.440 --> 0:26:49.960 our miss our fictions of inflation, the gap between service 0:26:50.000 --> 0:26:53.880 sector and goods producing inflation. I went back and looked 0:26:53.920 --> 0:26:56.720 in the reality as we've seen this before, this great 0:26:56.800 --> 0:27:01.280 divide between a three percent service sector and zero to 0:27:01.400 --> 0:27:06.679 sub percent goods. When does that end? That is a 0:27:06.880 --> 0:27:09.720 very very good question. And you know when when we 0:27:09.760 --> 0:27:11.680 look at cp I, we look at it in much 0:27:11.720 --> 0:27:15.240 the same way, and we break down the the components 0:27:15.320 --> 0:27:19.320 into high volatility and low volatility, and the low voll 0:27:19.440 --> 0:27:23.000 components tend to be those service based measures, obviously with 0:27:23.000 --> 0:27:27.360 a significant contribution from shelter Um that continues to run 0:27:28.080 --> 0:27:32.480 basically very close to three. Now, looking at the goods component, 0:27:32.840 --> 0:27:36.760 or the the sort of more international components of CPI, 0:27:36.800 --> 0:27:40.639 they're driven by by global demand and supply and and 0:27:40.720 --> 0:27:43.480 the value of the dollar. Now, if you go back 0:27:43.520 --> 0:27:49.120 to basically since when tips were first introduced and at 0:27:49.119 --> 0:27:51.600 the time when China was about to enter the trade 0:27:51.800 --> 0:27:56.679 the World Trade Organization. Subsequent from that point on, goods 0:27:56.680 --> 0:28:01.440 inflation has basically been zero so on average for for 0:28:01.480 --> 0:28:05.880 the prior twenty odd years. And if one can look 0:28:06.000 --> 0:28:09.680 at the pace of globalization that has occurred, one can 0:28:09.800 --> 0:28:12.399 can understand that and rationalize that where if you were 0:28:12.400 --> 0:28:14.879 an owner of capital, you were incentivized to go and 0:28:14.920 --> 0:28:17.840 find cheap labor, and you did that either going to 0:28:17.960 --> 0:28:20.760 South America or to Asia. And at the same time 0:28:21.119 --> 0:28:25.840 that those parts of the world received a tremendous demographic dividend. 0:28:25.880 --> 0:28:28.879 By UM Eastern Europe you had a couple or a 0:28:28.960 --> 0:28:32.440 hundred odd million workers enter the global labor supply, and 0:28:32.760 --> 0:28:36.520 in China you you had the same dynamic. And I'm 0:28:36.560 --> 0:28:39.040 of the opinion that we have reached the end of 0:28:39.360 --> 0:28:43.600 that demographic dividend to per se, and now we have 0:28:43.880 --> 0:28:47.240 a global labor market that is a lot tighter than 0:28:47.280 --> 0:28:51.880 it was twenty years ago. UM. So the disinflationary impact 0:28:51.880 --> 0:28:55.880 from globalization that has been in place, I think is 0:28:56.080 --> 0:28:59.560 on the verge of of going the other way now 0:29:00.000 --> 0:29:04.520 ahead young um. Obviously there are some currency influences that 0:29:04.520 --> 0:29:08.640 that play a pronounced role on a more short term basis, 0:29:08.680 --> 0:29:11.880 And as I said in the segment before the break, 0:29:11.960 --> 0:29:16.800 that the US dollar appreciated meaningfully in in fourteen to 0:29:16.960 --> 0:29:21.800 two thousand and sixteen, obviously having a significant disinflationary impact 0:29:21.880 --> 0:29:26.280 on import prices. So if we look at the trajectory 0:29:26.360 --> 0:29:30.520 of the dollar going forward, UM, my expectation is unless 0:29:30.520 --> 0:29:34.480 we get some significant border tax adjustment UM that could 0:29:34.480 --> 0:29:39.160 potentially move the Z dollar significantly stronger. I'm of the 0:29:39.200 --> 0:29:43.160 opinion that the run rate of good disinflation or lack 0:29:43.200 --> 0:29:45.400 of inflation now we have seen in the past couple 0:29:45.440 --> 0:29:49.920 of years is definitely behind us. You talk about global developments, 0:29:50.120 --> 0:29:52.960 let's let's talk in specific about China here and the 0:29:53.080 --> 0:29:55.280 role it's playing and how that's going to affect this 0:29:55.360 --> 0:30:01.080 market here in two thousand seventeen. Well, China is the 0:30:01.120 --> 0:30:06.240 second biggest economy in the world, UM, outside of of 0:30:06.280 --> 0:30:10.760 the U S and and ultimately the largest consumer of commodities, 0:30:11.320 --> 0:30:15.160 and the market is paying very close attention to Chinese 0:30:15.200 --> 0:30:18.600 p p I and the developments that ensue from that. 0:30:18.680 --> 0:30:22.920 We're looking more at sub components of that consumer goods 0:30:22.960 --> 0:30:26.760 prices within PPI to try and extract the the the 0:30:26.920 --> 0:30:30.880 significant influence of commodities, but they are obviously central to 0:30:31.000 --> 0:30:34.880 the global reflationary theme, and I think from a couple 0:30:34.880 --> 0:30:38.800 of perspectives. Obviously we can look at the macroeconomic variables 0:30:38.840 --> 0:30:42.640 and and and analyze them. However, I think the role 0:30:42.680 --> 0:30:47.080 of global reserve managers in particular China have had a 0:30:47.120 --> 0:30:52.000 significant impact on asset prices globally over the last uh 0:30:52.560 --> 0:30:54.760 In fact, going back over the last fifteen to twenty years, 0:30:54.760 --> 0:30:58.880 where we've seen reserves accumulate meaningfully and then be drawn 0:30:58.920 --> 0:31:02.520 down in the last twenty four months, and that draw 0:31:02.560 --> 0:31:06.480 down of reserves I think had significant implications for global 0:31:06.520 --> 0:31:09.880 asset prices, particularly in Q one of two thousands sixteen, 0:31:09.920 --> 0:31:14.680 where as reserve pressure began to accumulate due to uncertainty 0:31:14.720 --> 0:31:20.160 regarding Chinese effects policy, they were or they basically were 0:31:20.200 --> 0:31:23.560 forced to liquidate assets that that they held in an 0:31:23.600 --> 0:31:28.760 attempt to stem currency outflows, and that had As Tom 0:31:28.800 --> 0:31:31.240 said earlier, we live in a very in a world 0:31:32.120 --> 0:31:37.680 very sensitive to financial conditions, and ultimately that instability had 0:31:37.800 --> 0:31:42.760 had a significant impact on global financial conditions. Fascinating, never 0:31:42.840 --> 0:31:46.040 have young enough for the inflation dynamics and the myths 0:31:46.120 --> 0:31:48.800 that are out there in Martin agaty is with black 0:31:48.880 --> 0:32:06.360 Rock your discussion today on inflation dynamics in this hour 0:32:06.560 --> 0:32:09.160 the Senator, and if you're from Montana, there's trust me, 0:32:09.200 --> 0:32:12.120 there's only one senator. I think they have two. Based 0:32:12.120 --> 0:32:14.520 on civics. We'll go to President Trump for a civics 0:32:14.600 --> 0:32:17.160 lesson on that. But Max bauchus Uh with us here. 0:32:17.200 --> 0:32:19.360 We hope you have a great conversation. Of course, recently 0:32:19.760 --> 0:32:23.440 a minted ambassador to China, he's looking for a job 0:32:23.480 --> 0:32:26.760 in New York City. No, when he's gonna here, you 0:32:26.880 --> 0:32:29.480 got one here. We'll get to the Senator in a moment. 0:32:29.560 --> 0:32:32.040 David Gurrow, an exciting day. You've got an important duty 0:32:32.080 --> 0:32:34.560 tonight at nine pm. Yes, we'll be We'll be helming 0:32:34.600 --> 0:32:36.760 the coverage here on Bloomberg Television Bloomberg Radio of that 0:32:36.760 --> 0:32:38.840 speech tonight before it joined session of Congress kicking off 0:32:38.840 --> 0:32:41.520 at nine o'clock Eastern time, and we will go through 0:32:41.520 --> 0:32:43.320 the address to have some analysis afterward and carry the 0:32:43.320 --> 0:32:46.600 Democratic responses as well as will be here til can 0:32:46.640 --> 0:32:49.160 I go third two miles south of Missoula. Can we 0:32:49.200 --> 0:32:53.640 do that down the bitter Root Mountains there Lifeline Artisanal Butter. 0:32:53.760 --> 0:32:57.600 Tonight's discussion is about guns in butter, and Senator Bacchus 0:32:57.680 --> 0:33:01.720 knows in Montana, if you want good butter, you go 0:33:01.800 --> 0:33:06.480 to Lifeline Farm Creamery, Scenic Victor, Montana. You do that, David, 0:33:06.640 --> 0:33:09.360 It's great. It's it's great stuff, and it's what you know. 0:33:09.400 --> 0:33:11.360 It's a story here. We're all New York, New York. 0:33:11.480 --> 0:33:15.120 Our vision, Senator is about six blocks from Lexington and 0:33:15.200 --> 0:33:18.080 fifty ninth Street. We're not very good at it, but 0:33:18.360 --> 0:33:21.120 it's wonderful to have you here today, and it's about 0:33:21.160 --> 0:33:23.640 the effect of all that we talked about, David, every day, 0:33:23.960 --> 0:33:27.000 I'm Montana. You've you've sat through a few of these 0:33:27.000 --> 0:33:30.040 speeches before, and there's some expectation on our our audience 0:33:30.040 --> 0:33:32.400 in particular, that we're gonna get more detail here out 0:33:32.400 --> 0:33:33.720 of the speech that we have in the past. Are 0:33:33.720 --> 0:33:35.440 you at all optimistic we're gonna get that? Or? Is 0:33:35.680 --> 0:33:37.680 a State of the Union is a joint speech before 0:33:37.680 --> 0:33:40.200 a joint session of Congress, often just focused on soaring 0:33:40.280 --> 0:33:43.240 rhetoric and that's it. Well, it's a circus as going 0:33:43.320 --> 0:33:47.320 to be greater circus. Tonight I'm a new president, new Congress, 0:33:48.080 --> 0:33:52.719 and Donald Trump was very controversial and publicans are going 0:33:52.760 --> 0:33:55.840 to be shouting, jumping up and down. Democrats are gonna 0:33:55.840 --> 0:33:57.600 be sitting on their hands. I was gonna ask you 0:33:57.760 --> 0:34:00.760 how you think Democrats will respond to this some Republicans 0:34:00.760 --> 0:34:02.320 as well. I mean, it's a it's a crowd that 0:34:02.440 --> 0:34:04.760 is a mixed minds. I think it makes a half 0:34:04.840 --> 0:34:07.800 jumping up, half not jumping up. And the big question 0:34:07.840 --> 0:34:11.200 for me is what Trump says. But the second question is, well, 0:34:12.160 --> 0:34:16.760 how will able will be to resist the Republican shouting 0:34:16.760 --> 0:34:19.960 and screaming? That is, will he say something and it's 0:34:20.000 --> 0:34:22.880 not on the teleprompter because he's just reacting to what 0:34:23.000 --> 0:34:25.080 that's going on to the circus. On the campaign trail, 0:34:25.080 --> 0:34:26.440 we heard from him, we heard from others that he 0:34:26.480 --> 0:34:28.160 was going to be different if he were elected, that 0:34:28.200 --> 0:34:29.960 he was going to carry himself differently, he was going 0:34:30.000 --> 0:34:32.640 to act differently. We've now seen him in a variety 0:34:32.640 --> 0:34:37.040 of settings as president. I detected, most notably when he 0:34:37.040 --> 0:34:40.480 doesn't joint press conference with the world leader. The tenor 0:34:40.520 --> 0:34:42.279 of that press conference seems to be different than when 0:34:42.280 --> 0:34:44.840 he does it alone in the Eastern with with reporters 0:34:45.040 --> 0:34:48.520 just speaking before Congress in this way have an effect 0:34:48.560 --> 0:34:50.120 on the speaker to see all of those folks that 0:34:50.160 --> 0:34:53.439 are gathering to have the import of the moment itself. Well, 0:34:53.640 --> 0:34:57.839 he's not going to White House correspondence dinner. He's got 0:34:57.880 --> 0:35:00.400 a captive audience there. You may even hold up business 0:35:00.640 --> 0:35:04.319 is is iPhone and tweet something during the middle of it. 0:35:04.360 --> 0:35:07.799 Who knows, But it is a captive audience, and it's 0:35:07.840 --> 0:35:11.680 it's all sorry, we'll see what's go ahead. And well, Senator, 0:35:12.040 --> 0:35:15.560 you come out of Stanford in economics and law, and 0:35:15.680 --> 0:35:17.640 we think of the passing of Kenneth Arrow here, the 0:35:17.680 --> 0:35:22.480 giant of Stanford economics at here in the last week, 0:35:22.880 --> 0:35:25.560 we need to get back to core principles. We've all 0:35:25.600 --> 0:35:29.960 been distracted, either Republicans or Democrats, we've been distracted, to 0:35:30.040 --> 0:35:32.600 say the least. How do we get back on track. 0:35:32.760 --> 0:35:35.920 What is the thing you're watching in the cacophony of 0:35:36.080 --> 0:35:40.880 Washington that will signal an administration it's getting on track 0:35:41.000 --> 0:35:45.719 to dispose and to make legislation. What's the process that 0:35:45.760 --> 0:35:49.200 we're going to go through. I think the town meetings 0:35:49.239 --> 0:35:53.719 are part of it. I think that the outrage people 0:35:53.760 --> 0:35:55.840 are expressing it. A lot of these meanings around the 0:35:55.920 --> 0:36:01.280 country are sobering. Did you really have to face that anger? 0:36:01.920 --> 0:36:03.719 I faced anger. I faced a lot of questions, but 0:36:03.800 --> 0:36:08.800 nothing quite like that. What you were so instrumental, integraty 0:36:08.800 --> 0:36:12.799 involved with with crafting financial reform with the Affordable Care 0:36:12.840 --> 0:36:14.640 Act as well? What do you make of what's happening 0:36:14.719 --> 0:36:16.560 right now as you listen to Tonight's speech, as you 0:36:16.560 --> 0:36:19.920 listen to what's coming out of Washington. How optimistic are 0:36:19.960 --> 0:36:22.120 you here that those two pieces of legislation are going 0:36:22.160 --> 0:36:25.719 to be preserved at least in good part. Uh? And 0:36:25.760 --> 0:36:28.160 how difficult and undertaking is it to tweak those two 0:36:28.160 --> 0:36:32.200 pieces of legislation? Well? I care. I worry a bit 0:36:32.200 --> 0:36:36.560 about our country, Frankly. Um. In my last job over 0:36:36.640 --> 0:36:41.120 in China, I'm watching the Chinese think they can get 0:36:41.160 --> 0:36:45.400 an advantage of the United States, UM by seeing Washington 0:36:45.840 --> 0:36:51.560 protectionist inward dysfunctional, and it gives them China a bit 0:36:51.600 --> 0:36:55.040 of an advantage. Frankly, that's so. I I have very 0:36:55.120 --> 0:36:57.759 much hope that we in America can start showing that 0:36:57.800 --> 0:37:02.040 we're adults, we can take care our destiny. Um. We 0:37:02.800 --> 0:37:05.080 want to make sure that people do have adequate healthcare 0:37:05.440 --> 0:37:07.320 a reasonable price. We want to make sure that the 0:37:07.400 --> 0:37:09.920 tax code is fair and efficient, and it means we're 0:37:09.920 --> 0:37:13.160 just gonna have to sit down and really work together. 0:37:13.160 --> 0:37:16.480 There really is no other approach to all of this. 0:37:16.560 --> 0:37:21.279 And I'm hoping that the President Trump tonight indicates that 0:37:20.960 --> 0:37:24.239 he's turned the corner bit, turned the page a bit. 0:37:24.360 --> 0:37:27.400 He says he's listening to lots of people, business groups, etcetera. 0:37:27.440 --> 0:37:30.120 And and certainly he eats about the town meetings, and 0:37:30.320 --> 0:37:34.160 I hope that he starts to signal um that he 0:37:34.200 --> 0:37:37.520 wants to work with with the rest of us. I'm 0:37:37.520 --> 0:37:41.239 making jokes about Victor Montana and artisanal butter you started 0:37:41.360 --> 0:37:46.160 in the politics record out of Missoula Montien did years ago. 0:37:46.480 --> 0:37:49.799 Would you please explain to our global audience and our 0:37:49.920 --> 0:37:54.160 national audience how a guy that lives on Fifth Avenue 0:37:54.160 --> 0:37:59.160 at fifty six is supposed to represent the sprawl of 0:37:59.400 --> 0:38:03.840 agricult cultural, rural Midwest America. I mean, you're one of 0:38:03.880 --> 0:38:07.239 the voices, you and grass Lely of Iowa that they 0:38:07.280 --> 0:38:09.600 can answer that question. How do we get to this 0:38:09.719 --> 0:38:14.120 point where a plutocrat is representing the Montana ethos. I 0:38:14.160 --> 0:38:16.719 just don't buy it for a minute. Well, he is 0:38:16.920 --> 0:38:20.600 the president. He did get elected irrespective where he lives 0:38:20.600 --> 0:38:22.960 and where he grew up. He is the president. And 0:38:23.560 --> 0:38:28.000 it's you know, you know, we are in charge. But 0:38:28.080 --> 0:38:30.879 that I mean the people are the employers. People still 0:38:30.920 --> 0:38:33.400 are in charge, and members of Congress and the president 0:38:33.400 --> 0:38:36.600 really are the employees. And it means we the people, 0:38:37.080 --> 0:38:39.799 as has have the town meetings, have to stand up 0:38:39.840 --> 0:38:41.919 more and make it very clear what we want. How 0:38:41.920 --> 0:38:47.439 should the Democrats respond tonight, Senator Schumer, Speaker Pelosi, there 0:38:47.480 --> 0:38:50.800 there there has to be a method to their madness tonight. 0:38:50.800 --> 0:38:53.400 Should they do it with grace or would you suggest 0:38:53.480 --> 0:38:57.640 they do protest? They've got to be firm, very firm. 0:38:57.719 --> 0:39:01.760 Can't roll over employed head about all this. I would 0:39:02.440 --> 0:39:07.160 air a little on the side of protest um. Democrats 0:39:07.160 --> 0:39:09.600 have to show to people in the country, especially Democrats, 0:39:10.040 --> 0:39:12.400 that they care to Chuck Schulbar asked to show it 0:39:12.480 --> 0:39:14.760 to Democrats around that country that he cares to British 0:39:14.800 --> 0:39:17.440 Sanders a bunch and so forth. Then after a while, 0:39:18.120 --> 0:39:20.640 we Democrats have to come up, I would hope, with 0:39:20.680 --> 0:39:24.960 an alternative and solids and and shop that around the country. 0:39:24.960 --> 0:39:26.480 It's gonna be difficult, but that's what I think we 0:39:26.520 --> 0:39:28.480 should do. I'm reminded of a piece that was in 0:39:28.520 --> 0:39:30.439 the New York I think in two thousand ten. George Packer, 0:39:30.560 --> 0:39:32.560 the great staff writer, goes down to Washington to cover 0:39:32.640 --> 0:39:35.000 the Senate and stays there for a couple of months, 0:39:35.040 --> 0:39:36.480 and the advice he gets going into it is, you've 0:39:36.480 --> 0:39:39.040 got to cover this like a foreign capital in such 0:39:39.080 --> 0:39:41.000 a strange place. You brought up dysfunction. This has been 0:39:41.040 --> 0:39:44.080 an institution, a place that's been dysfunctional for a long while. 0:39:44.120 --> 0:39:46.120 Imagine on some of those fifteen hour flights to Beijing, 0:39:46.160 --> 0:39:48.360 you had some time to think about the state of 0:39:48.360 --> 0:39:51.960 the Senate today. What's caused it to be as messy, 0:39:52.040 --> 0:39:54.279 as device ive, as dysfunctional as it is right now? 0:39:54.320 --> 0:39:57.400 And what's the hope for getting out of that? Sometimes 0:39:57.440 --> 0:40:00.840 I think it has to get worse for it gets better, Um, 0:40:01.120 --> 0:40:03.680 and it can you think it can still and and 0:40:03.840 --> 0:40:05.719 but if it gets worse, as soon as we can 0:40:05.760 --> 0:40:09.359 bounce back up, um, I can get worse. I hope 0:40:09.400 --> 0:40:11.920 that's not where we had I hope that doesn't happen. 0:40:12.360 --> 0:40:17.160 But we Americans have to get realized in a sober way. Hey, 0:40:17.320 --> 0:40:19.319 we can't keep going on like this. We can't keep 0:40:19.320 --> 0:40:21.440 fighting each other. We just can't be locked in our 0:40:21.440 --> 0:40:24.319 little worlds as much as we have. We gotta democracy. 0:40:24.520 --> 0:40:26.239 I guess it is tough after all. I guess it 0:40:26.280 --> 0:40:29.680 does take some responsibility. After all. Then if it gets 0:40:29.680 --> 0:40:33.040 bad enough, then I think people start to Is it 0:40:33.080 --> 0:40:35.440 a problem with collegiality in the body? Is it a 0:40:35.440 --> 0:40:37.120 problem with some of the rules we heard about the 0:40:37.360 --> 0:40:39.439 nuclear option? All of this stuff is is that what's 0:40:39.520 --> 0:40:41.680 led to it? Or is it something greater? I guess greater, 0:40:41.960 --> 0:40:44.560 no question. You know, the rules are the rules. It's 0:40:44.560 --> 0:40:47.240 the old thing life. You know. Sometimes people talk about 0:40:47.239 --> 0:40:49.319 float charts in the box. I think that's all all 0:40:49.320 --> 0:40:51.839 of it. It's the people. It's the people really make 0:40:51.880 --> 0:40:55.040 the decisions. When we're gonna have you back for another 0:40:55.080 --> 0:41:01.880 black hair, Senator, if we could what Senator Schumer's approach 0:41:02.080 --> 0:41:07.480 me to galvanize a minority? Protest you're gonna be a minority. 0:41:07.680 --> 0:41:09.960 Do you go out and try to find Republicans that 0:41:10.000 --> 0:41:11.960 have had it? Do you just try to get to 0:41:12.000 --> 0:41:15.200 the mid term elections? What does a minority do? You 0:41:15.320 --> 0:41:20.680 faced this before, Chuck Um, far be it from me 0:41:20.680 --> 0:41:23.680 any advice to use such a character. He's quite a guy, 0:41:24.160 --> 0:41:26.560 but I would my advice would be, it's it's all 0:41:26.560 --> 0:41:32.600 if they'd be very stand up for people. People don't 0:41:32.680 --> 0:41:36.800 want to be disenfranchised, they don't want to have bad healthcare, 0:41:36.920 --> 0:41:39.400 they want to be respect to stand up for people, 0:41:39.760 --> 0:41:43.680 and and and surely really care about people that he 0:41:43.719 --> 0:41:46.279 has to he has to convey that in a measured way. 0:41:46.400 --> 0:41:49.200 David gurin Tom Keene. Of course Mr Gurrow heavily involved 0:41:49.200 --> 0:41:51.600 in our coverage of the Trump speech tonight, the President's 0:41:52.040 --> 0:41:54.400 speech at nine pm. We are the great honor speaking 0:41:54.440 --> 0:41:58.680 with a senator from Montana, Mr bachus Uh and of 0:41:58.719 --> 0:42:01.279 course the former ambassador to China. David, why don't you 0:42:01.320 --> 0:42:03.719 pick it up because you're a lot more in Washington. 0:42:04.000 --> 0:42:06.359 A few months back, I was in Beijing staying at 0:42:06.360 --> 0:42:09.560 that West and overlooking the massive US embassy complex there 0:42:09.600 --> 0:42:11.520 that you're very familiar with, the of course, and I 0:42:12.160 --> 0:42:13.600 was struck by the size of it. Wonder how it 0:42:13.600 --> 0:42:16.560 fits into the whole apparatus in China. You've got your 0:42:16.560 --> 0:42:18.960 successor head of their now, Terry Brandstad, to be the 0:42:19.000 --> 0:42:21.480 new ambassador to China. What advice do you give him? 0:42:21.520 --> 0:42:24.720 About carrying the flag over there, talking with government officials, 0:42:24.719 --> 0:42:29.440 making the case for UM American economic raighttness in concert 0:42:29.480 --> 0:42:32.000 with the with the Chinese economy. Well, I fluted to 0:42:32.080 --> 0:42:34.760 mone about a month ago to C Terry A given advice, 0:42:35.360 --> 0:42:37.439 and my basic point to him was, you just gotta 0:42:37.520 --> 0:42:40.600 show very very strongly how much you care about this relationship, 0:42:41.040 --> 0:42:45.080 and you just gotta worked very hard to get access 0:42:45.160 --> 0:42:48.560 and talk to people and explained that you are carrying 0:42:48.800 --> 0:42:50.840 and do you want to make sure this relationship works. 0:42:51.360 --> 0:42:53.480 What We've asked a number of guests who have a 0:42:53.480 --> 0:42:56.000 lot of State Department experience, who drives this relationship? Is 0:42:56.000 --> 0:42:58.279 it driven out of the State Department in DC? Is 0:42:58.320 --> 0:42:59.920 it driven out of the Treasury Department. I was in 0:43:00.080 --> 0:43:03.520 Beijing for the Strategic and Economic Dialogue and saw that firsthand. 0:43:04.320 --> 0:43:07.200 What person or what persons within the government drive this relationship. 0:43:07.239 --> 0:43:10.200 Is it the Ambassador to China? Well, it's it's there 0:43:10.200 --> 0:43:12.480 are a lot of players, and Ambassador is certainly as one, 0:43:13.000 --> 0:43:16.520 and it's really sets the tone. And the master is 0:43:16.520 --> 0:43:20.279 the highest ranking American official UM in them in in 0:43:20.719 --> 0:43:26.160 the country, but obviously the White House, State Department, Defense Department, 0:43:26.160 --> 0:43:29.359 they're all part of this. It's it's somewhat coordinated out 0:43:29.360 --> 0:43:32.160 of the White House with the National Security Council, but 0:43:32.160 --> 0:43:34.320 a lot of these other agencies they've got their own agenda. 0:43:34.680 --> 0:43:37.479 They're pushing hard. So it's it's it's my job back 0:43:37.520 --> 0:43:40.200 there trying to keep everybody working together and on the 0:43:40.200 --> 0:43:44.240 same page. My perspective the other day was to hearken 0:43:44.280 --> 0:43:46.640 back to Mike Mansfield and what he did with our 0:43:46.640 --> 0:43:49.680 relationship with Japan at a crucial time or even time 0:43:49.760 --> 0:43:51.560 fully I believe was over there on the watch at 0:43:51.560 --> 0:43:55.280 one point. We have a president who doesn't have that vision. 0:43:55.320 --> 0:43:57.360 Whether the president's right or wrong is not the issue. 0:43:57.760 --> 0:44:00.600 We have a zero sum. Neil merc Until is inward 0:44:00.680 --> 0:44:03.680 tone that we'll hear in that speech, you make America, 0:44:03.760 --> 0:44:06.799 make Montana great again. I get all that. How do 0:44:06.880 --> 0:44:10.799 we get back to what Mike Mansfield represented and what 0:44:10.920 --> 0:44:13.520 you represented with your service. How do we get there? 0:44:14.080 --> 0:44:17.279 First to the president. You need a president who has 0:44:17.320 --> 0:44:20.440 those points of view, who looks at the world the 0:44:20.480 --> 0:44:23.600 way Mike Mansfield did and and Tom Foley did and 0:44:23.640 --> 0:44:26.719 so forth. That's number one. Number two. Um, you know, 0:44:26.760 --> 0:44:29.200 I did my very best to explain to the Chinese, 0:44:29.239 --> 0:44:33.080 how important this relationship is, and all the things I'm doing, 0:44:34.000 --> 0:44:37.080 things they should do China should do to show that 0:44:37.160 --> 0:44:40.520 we really want to work together. That's my view, frankly, 0:44:40.600 --> 0:44:44.800 is that it's the old rising power and established power question, 0:44:45.239 --> 0:44:48.360 so called vicidities trap. And I say this over and 0:44:48.400 --> 0:44:50.120 over again, the Chinese, you gotta show to us, not 0:44:50.239 --> 0:44:51.719 just tell us, but show it to us. You when 0:44:51.800 --> 0:44:53.600 I work with us, David, you again your more informed 0:44:53.600 --> 0:44:55.640 on this, advise us. And David jumping here with a 0:44:55.680 --> 0:44:57.920 better question than me on what we should look for 0:44:58.040 --> 0:45:01.520 from the Senate intelligence community, but this up river Russia, 0:45:01.600 --> 0:45:04.840 David rephrase that, yeah, we we hear about these investigations. 0:45:04.880 --> 0:45:07.799 We hear calls for an independent investigation. You've experienced with 0:45:07.800 --> 0:45:09.640 with that as well. I mean, how important is that? 0:45:09.640 --> 0:45:12.440 Do you think to have an independent investigation into what 0:45:12.480 --> 0:45:15.160 we saw during the election and and uh, indeed afterwards, 0:45:16.400 --> 0:45:19.200 we do whatever it taste to get the facts. Um, 0:45:19.239 --> 0:45:22.480 if it requires an independent prosecutor, and so be it. 0:45:22.760 --> 0:45:25.480 On the other hand, if the Trump administration wants to 0:45:25.640 --> 0:45:28.520 reveal everything that happened telephone records and so forth, logs 0:45:28.520 --> 0:45:31.080 and so forth, that's fine too. But we just need 0:45:31.080 --> 0:45:32.959 to get the facts and it's gotta past the smell test. 0:45:33.719 --> 0:45:36.120 With the U. S. China relationship, there has been so 0:45:36.160 --> 0:45:38.279 much focus on the national security side of things. Help 0:45:38.360 --> 0:45:40.920 us with the balance here, uh, national security in the 0:45:40.960 --> 0:45:42.440 one hand, economic on the other. I think back to 0:45:42.480 --> 0:45:44.960 the Trans Pacific Partnership now dead in the water, at 0:45:45.000 --> 0:45:47.080 least from a U. S perspective. A lot of the 0:45:47.160 --> 0:45:50.120 argument that Maastaard Mike Froman made was about the security 0:45:50.160 --> 0:45:52.560 reasons for doing it and giving power to the Chinese. 0:45:52.600 --> 0:45:54.520 They would have more power if this, if this fell apart, 0:45:55.360 --> 0:45:58.279 did we focus too little on the economic side of 0:45:58.320 --> 0:45:59.880 things and too much on national scured when it came 0:45:59.920 --> 0:46:02.400 to right In particular, I think failure to pass t 0:46:02.440 --> 0:46:05.560 PP is a major mistake. It's we are hurting ourselves 0:46:05.680 --> 0:46:09.799 a big time UM from security perspective and also from 0:46:09.800 --> 0:46:14.160 a geopolitical perspective UM and frankly from a trade perspective 0:46:14.200 --> 0:46:17.200 to it it create smart jobs in the loses jobs, 0:46:17.640 --> 0:46:21.680 and it's I wish there were some way to go 0:46:21.719 --> 0:46:25.279 back and resurrect and bring back t p P. I 0:46:25.320 --> 0:46:28.120 don't care. Maybe Trump could bring it back a little bit. 0:46:28.160 --> 0:46:31.600 And then he called Trump PP I don't care. I 0:46:31.680 --> 0:46:34.080 just gotta find some way to get the thing passed. Senator, 0:46:34.320 --> 0:46:38.120 What the Democratic Party need to do to get Trump 0:46:38.200 --> 0:46:42.320 supporters in your Montana back into the full They lost Michigan, 0:46:42.600 --> 0:46:46.560 the lost Wisconsin, etcetera. How does the Democratic Party the 0:46:46.640 --> 0:46:50.960 coastal progresses, how do they re engage with the Max Bokas, 0:46:51.000 --> 0:46:54.920 Scoop Jackson Democrats of another time in place? Well, I 0:46:54.920 --> 0:46:57.120 can only to say what I did, which is it 0:46:57.239 --> 0:47:01.880 just tons of town meetings. I gave my personal telephone 0:47:01.960 --> 0:47:04.920 number to everybody. I get my personal private email to 0:47:05.000 --> 0:47:09.640 everybody in Montana, and it got to meet people and 0:47:09.719 --> 0:47:14.600 talk to people, reach out politics and with respect. You'll listen. 0:47:14.840 --> 0:47:19.240 You'll listen, and you're listen to their assumptions with they're 0:47:19.280 --> 0:47:21.359 worries or fears, and you show that you're really trying 0:47:21.400 --> 0:47:24.279 to find some common cause to solve it. Well, very good, 0:47:24.560 --> 0:47:26.360 Thank you so much for attendant. I would love to 0:47:26.360 --> 0:47:30.040 see your Washington. Do we have Montanas? Do we need 0:47:30.080 --> 0:47:33.440 to get them? I'll follow up. I'll open it up. 0:47:34.040 --> 0:47:37.080 We'll get you David. We'll get your David from Brooklyn, Senator, 0:47:39.000 --> 0:47:45.360 you know from Brooklyn. The okay, I did not know yes, Senator, 0:47:45.400 --> 0:47:47.880 thank you so much to look at your career. David, 0:47:48.360 --> 0:47:50.600 the Senator will be listening, no doubt tonight at nine 0:47:50.640 --> 0:47:53.520 pm to the President and we'll have coverage. David Girl, 0:47:53.920 --> 0:47:58.239 I'm Bloomberg Television, Bloomberg Radio worldwide at nine pm. This 0:47:58.320 --> 0:48:10.920 is Bloomberg. Thanks for listening to the Bloomberg Surveillance Podcast. 0:48:11.320 --> 0:48:16.440 Subscribe and listen to interviews on iTunes, SoundCloud, or whichever 0:48:16.600 --> 0:48:21.000 podcast platform you prefer. I'm out on Twitter at Tom Keene. 0:48:21.080 --> 0:48:24.880 David Gura is at David Gura. Before the podcast, you 0:48:24.920 --> 0:48:41.200 can always catch us worldwide on Bloomberg Radio. Brought you 0:48:41.280 --> 0:48:44.879 by Bank of America. Mary Lynch. Dedicated to bringing our 0:48:44.960 --> 0:48:48.560 clients insights and solutions to meet the challenges of a 0:48:48.600 --> 0:48:53.000 transforming world. That's the power of global connections. Mary Lynch, 0:48:53.160 --> 0:48:57.440 Pierce Feerin Smith Incorporated, Member s I p C.