Speaker 1: This is Bloomberg Surveillance. We don't know where the next
Speaker 1: procession is. All we know is that the expansion is
Speaker 1: about six and a half years old, and that's longer
Speaker 1: than the average expansion. We're getting signals which are the
Speaker 1: started cause interest transfer too long. It would be a
Speaker 1: terrible commentary and the terrible thing in reality if it
Speaker 1: takes an overt crisis to get agreement or get progressive,
Speaker 1: then you're risking things going crazy. Bloomberg Surveillance your link
Speaker 1: to the world of economics, finance, and investment on Bloomberg Radio.
Speaker 1: Good morning everyone, Michael McKee and Tom Keene this Thursday
Speaker 1: before Jobsday, coming up Stewart Offman of p n C.
Speaker 1: We'll look at a fair, using balanced view of the
Speaker 1: American economy from Dr Hoffman. Really looking forward to talking
Speaker 1: to Stewart Hoffman. Bloomberg Surveillance this morning brought to by
Speaker 1: Cone Resnick Accounting, tax advisory, regulatory changes can impact your business.
Speaker 1: See how the experts at Cone Resneck can help you
Speaker 1: navigate these complexities. Find out more at cone Resnik dot com.
Speaker 1: C O h n R e z n I c
Speaker 1: K cone Resnik dot com. Jobs Today Tomorrow started catching up.
Speaker 1: I mean, we've got Governor Romney speaking today. There'll be
Speaker 1: a lot of political news out of that. With all
Speaker 1: due respect with perspective this evening, Mark Halperin and John Heilman,
Speaker 1: we're trying to get back into economics, finance, investment, the
Speaker 1: linkages into our international relations. And I guess you do
Speaker 1: that at eight thirty tomorrow morning, Alan Krueger, Bill Gross
Speaker 1: joining us among other worthies right now, Michael McKee, Stewart
Speaker 1: Hoffman joining us, which is wonderful because what I've never
Speaker 1: seen anything plunge, crater, surge, dominate whatever in the research
Speaker 1: work of Stewart Hoffman. It is a careful, measured look
Speaker 1: it where we are. That's a good thing. Stewart off
Speaker 1: wands been too long, good morning very much. Try to
Speaker 1: be measured, but never afraid to take a stand within
Speaker 1: to take the stand. What is the linkage of this
Speaker 1: job's report to what share Yelling and other worthies will
Speaker 1: do at the March sixte meeting. Are they linked? Of
Speaker 1: course they're linked, But I think it's a very high
Speaker 1: bar to get the Fed to move, you know, in
Speaker 1: in in their meeting in two weeks. You know, I
Speaker 1: suppose if this number, we're just off the charts. Three
Speaker 1: or four hundred thousand jobs. Another five tenths increase in
Speaker 1: the average ary earnings, maybe that could change the dynamics.
Speaker 1: But I think the number is important. But given what
Speaker 1: the Fed has said that they're monitoring and they need
Speaker 1: some more time to figure out what these international events
Speaker 1: and start market events and tighter or wider spreads, I
Speaker 1: think they just say let's buy some time no matter
Speaker 1: what this job's report shows us tomorrow. Interesting because if
Speaker 1: the the markets had not cratered in January, would the
Speaker 1: Fed be on track to raise rates in March given
Speaker 1: the data that we have. The hypothetical, given that the
Speaker 1: inflation data, not the expectation numbers, but the actual inflation data,
Speaker 1: the PC deflator, the cores was cruising along one point
Speaker 1: three percent in the first three quarters of last year
Speaker 1: with some upward revisions, and now turns out to eat
Speaker 1: up a little to one four in the fourth quarter.
Speaker 1: And then that January number, although it's still one month,
Speaker 1: you know, it was a biggest increase we've seen in years.
Speaker 1: Shall I suppose if the Judge report tomorrow was super
Speaker 1: strong and the stock market was higher than it was
Speaker 1: at the beginning of the year and spreads were narrower,
Speaker 1: maybe the Fed would be on track. But you know,
Speaker 1: they're going to deal with the reality that the markets
Speaker 1: are telling them, at least biblettle time go a little slower.
Speaker 1: They probably don't want to see the dollar go up
Speaker 1: a lot, especially if next week the e c B
Speaker 1: is they're highly likely to do, are going to expand
Speaker 1: their monetary policy, go deeper on negative rates, extend and
Speaker 1: probably in large QUEWI so, yes, how many heads, how
Speaker 1: many pin? How many angels can you fit on the
Speaker 1: head of the pin? But right now is the data
Speaker 1: they have? You know, you know, I look, I look
Speaker 1: stewarted it. Why will C plus I plus G plet's
Speaker 1: n X. Let's start with the basic idea Mike and
Speaker 1: I address us in our trip to Washington the last
Speaker 1: few days. I think we have a handle of the
Speaker 1: state of austerity in the United Kingdom. What is the
Speaker 1: state of austerity within the G part of g d P.
Speaker 1: I wouldn't call it austerity. I mean it's pretty neutral.
Speaker 1: It certainly was austere in the sense that for the
Speaker 1: last three years federal spending was pretty flat, which maybe
Speaker 1: in the short run, is a little austere, but you
Speaker 1: know precisely what we need for the intermediate or longer run.
Speaker 1: Of course, the tax hikes of thirteen of you know,
Speaker 1: been absorbed. Last year. We did get a budget, uh,
Speaker 1: and federal spending is going to go up a bit
Speaker 1: this year defense and non defense. We didn't get any
Speaker 1: additional tax hikes. So at the federal level, I would
Speaker 1: say it is not austere neutral. At the state and
Speaker 1: local level, I think it's actually positive. We're seeing you know,
Speaker 1: we're seeing jobs growing. Uh. In the construction report that
Speaker 1: came out on public instruction, and you know, those numbers
Speaker 1: are very jumpy. That's why I don't use words like plunge,
Speaker 1: because I'd like to use three month moving average, which
Speaker 1: often smooth out a lot of the plunges and the
Speaker 1: and the spikes. But if you look now over the
Speaker 1: last or four months, construction at the public level, highways, roads, bridges,
Speaker 1: its desk but we needed is definitely doing better. And
Speaker 1: certainly you see construction jobs going up, so they're not
Speaker 1: hiring those people to do to sit around and do nothing,
Speaker 1: both on the public side and on the private side.
Speaker 1: So yes, I think I would say government, state, local,
Speaker 1: and federal is a positive for the US economy this year. Well,
Speaker 1: we have the jobs report tomorrow and everybody we're looking
Speaker 1: at wage growth when we get a little more of
Speaker 1: a hint from the unit labor costs number that comes
Speaker 1: out today. But what are you expecting are is the
Speaker 1: trend going to continue? Yeah? I think the trend of
Speaker 1: going up slowly is going to continue, you know. We
Speaker 1: you know, you can use the employment cost index or
Speaker 1: the number that of course comes out is the average
Speaker 1: hourly earnings index comes out monthly with the employment report.
Speaker 1: I mean that measure. Really both measures were stuck at
Speaker 1: two percent or little under thirteen fourteen. I'm sure that's
Speaker 1: where some of this angst, not only that short run
Speaker 1: but longer run uh we see in the in the
Speaker 1: political environment. But last year, finally, particularly in the second
Speaker 1: half of the year, we started to see some acceleration
Speaker 1: in that. I tend to like to look at it
Speaker 1: as a two quarter moving average or year over year.
Speaker 1: In the year over year number in January was two
Speaker 1: point five. I think the MARS number particip for a
Speaker 1: month of February will back off maybe a tenth or two,
Speaker 1: but still be up two and a half percent from uh,
Speaker 1: this time last year. So I think ways are accelerat.
Speaker 1: Let me recast what I asked Scott Wren earlier, who's
Speaker 1: an investment equity strategist, same question, folks, For an economist
Speaker 1: like Stewart, often the basic idea of a single digit
Speaker 1: world in your language, Stewart, a new lower damn phenomenal
Speaker 1: g d P, a new terminal rate or potential g
Speaker 1: d P. Are we prepared for that? By we do
Speaker 1: you mean or the nation? I don't think the nation,
Speaker 1: whether they're prepared or not, they're not taking it well.
Speaker 1: And you know, we look back at this recovery. It
Speaker 1: has fortunately continued this long, and I still think we're
Speaker 1: maybe in the seventh inning. I don't think I've never
Speaker 1: been in the recession camp. You know, a month or
Speaker 1: two ago, it kind of felt like the markets were
Speaker 1: saying the economies in the ninth inning, there's two out
Speaker 1: and the pictures of bat and the home team is
Speaker 1: about to go down. Well, I never thought that that
Speaker 1: that view anyway. But if you look at the as
Speaker 1: I said, slow wade growth of the last five years,
Speaker 1: over the last fifteen years, uh, I think the country
Speaker 1: wants to grow faster. It needs to grow faster. And
Speaker 1: I think that's where, you know, some of this frustration
Speaker 1: we're seeing both on the coach i'll call it left
Speaker 1: and right is coming from that we got to do better,
Speaker 1: and it's productivity. It's in the prescriptions I had to do.
Speaker 1: It are quite different between less government regulations or you know,
Speaker 1: on the left, a big tax site. But there's a
Speaker 1: feeling that the US economy is not living up to
Speaker 1: its potential and that if that's the best our potential is,
Speaker 1: we've got to figure out a way to get it.
Speaker 1: Let's drive that for Our conversation continues with Stewart often
Speaker 1: of P and C. Mike Herbal Life has a bid
Speaker 1: UH to review fifty six down to a printed bid
Speaker 1: of forty eight. And I'm not sure the pre market
Speaker 1: stock price got there, but that forty eight is lifted
Speaker 1: up to fifty one thirty. There's a i'm gonna call it,
Speaker 1: you know, an eight percent mover. So fifty six down
Speaker 1: to fifty one, yeah, um, and and that's better than
Speaker 1: where we were earlier. Again, some real challenges all in all,
Speaker 1: UH with their unit accounting, UH complex and convoluted set
Speaker 1: of headlines. You wonder where this story will move drive
Speaker 1: forward Price Waterhouse Coopers, is there um there auditors? According
Speaker 1: to Bloomberg Herbal Life right now fifty one, I'm gonna
Speaker 1: center tendency fifty one on Herban Life. Futures of negative one,
Speaker 1: doubt futures negative ten. We look at equities, bonds, currencies, commodities,
Speaker 1: oil thirty four sixty two Flat Brant Your thirty seven,
Speaker 1: thirty six seventy nine. Michael McKee manchiny Gold earlier elevated
Speaker 1: twelve forty four. Good morning to not the goldbugs, but
Speaker 1: people that have rationally talked about a stronger gold market
Speaker 1: off of an extended two and three year bearer market,
Speaker 1: people like James Steele at HSBC the Yen one thirteen
Speaker 1: ninety weaker yen this morning. But let's check out with
Speaker 1: Michael bar and get the latest world in national headlines. Michael,
Speaker 1: Mike Town, thank you very much. Former Massachusetts Governor Mitt
Speaker 1: Romney will give us speech later today calling out Donald Trump. Romney,
Speaker 1: who was the Republican presidential nominee, says Trump is a phony.
Speaker 1: Four Republicans will gather on stage for tonight's Fox News
Speaker 1: presidential debate in Detroit. Ben Carson will be a no show,
Speaker 1: having signaled that he is on the verge of officially
Speaker 1: quitting his white house bid. A white Alabama police officer
Speaker 1: has charged with the murder in the shooting death of
Speaker 1: a black man. A family lawyer says Greg Gunn was
Speaker 1: walking home when he was killed outside a neighbor's house.
Speaker 1: An attorney for Montgomery officer, Aaron Smith calls the arrest
Speaker 1: a political witch hunt. Global News twenty four hours a day,
Speaker 1: powered by our twenty four hundred journalists and more than
Speaker 1: a hundred fifty news bureaus from around the world. I'm
Speaker 1: Michael Barr, Mike Micha, thanks so much. We're gonna rip
Speaker 1: up the script of Stewart Off and P and C.
Speaker 1: Neil Dutta just out with a fabulous chart showing the
Speaker 1: bipolar nature of this American economy. You need to stay
Speaker 1: tuned for that future negative to Bloomberg Surveillance. The news
Speaker 1: update brought to you by Mercedes Ben's. This month, here
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Speaker 1: offers on select models like the Sporty c L A
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Speaker 1: Visit m b USA Dot com today. Surveillance continues global
Speaker 1: business news twenty four hours a day. If Bloomberg dot com,
Speaker 1: the radio plus mobile app and on your radio, this
Speaker 1: is a Bloomberg Business flash. And I'm car in Moscow,
Speaker 1: US dock in. Day's futures are a little change to
Speaker 1: lower this morning. Let's go to the First Word Breaking
Speaker 1: news desk for today's morning call. And here's Bill Maloney.
Speaker 1: Good morning, Bill, Good morning Karen. That's right us. You
Speaker 1: just are quiet today. Doubt future is currently lower by
Speaker 1: twenty points, as apps and as a futures are lower
Speaker 1: by two. The US ten yield at one point eight
Speaker 1: five percent, and your PM markets are mostly lower this morning.
Speaker 1: Frances down point four percent on the US economic front
Speaker 1: dight thirty non farm productivity and initial jobs claims at market,
Speaker 1: US services p M I and at ten o'clock I
Speaker 1: s M, non manufacturing, composite factory orders and durable goods orders.
Speaker 1: In other news, Herbal Life said active new member data
Speaker 1: had errors. Shares a down eight percent pre market, and
Speaker 1: a deal news. The Wallstreet Journal reported Samson Night said
Speaker 1: near a deal to buy too Me after de Bellous Knight,
Speaker 1: American Eagle Q and EPs view top to estimates, Costco
Speaker 1: missed and regarding errings. This morning, joy Global Q and
Speaker 1: loss was wider than expected. Tech Data beat and CIANA
Speaker 1: Q when adjusted EPs also beat. Finally, some Q wall
Speaker 1: shoot upgrades and downgrades at Bank of America, Alcola cut
Speaker 1: to neutral, Lateral Energy raised to neutral, and Marathon Petroleum
Speaker 1: raised to buy. Sharon Williams raised to buy over at
Speaker 1: City Group, Intel raised to outperform at Robert Baird and
Speaker 1: Freeport mcmarhon cut to neutral versus by over at UBS.
Speaker 1: Live from the First Breaking News Desk on Bill Maloney
Speaker 1: Karen All, thanks bailan to hear live breaking news over
Speaker 1: your Bloomberg type squaw could go on your terminal, that's
Speaker 1: ask you you a w K go and that's a
Speaker 1: Bloomberg business flash. Tom and Mike Karen, thanks so much.
Speaker 1: Futures negative two and a churn into the screen as well.
Speaker 1: Bloomberg Surveillance. Brought to you by Investco. Investco believes it's
Speaker 1: time to bench the benchmarks to consider active management and
Speaker 1: factor based strategies. Find out more at investco dot com.
Speaker 1: Slash high Conviction without Question. The chart of the day.
Speaker 1: Neil Data, Renaissance, Macro folks. I'm not gonna send it
Speaker 1: out because it's his proprietary chart. We protect copyright here.
Speaker 1: Contact Renaissance Macro for his wonderful chart. Stewart often, you
Speaker 1: know the chart layoffs and layoff announcements the American economy
Speaker 1: and then separate energy. I have no idea how stark
Speaker 1: it is. I mean, we know energy is flat on
Speaker 1: its back, but the layoff announcements for the rest of
Speaker 1: them America are shockingly good. How does the FED to
Speaker 1: handle that? Well, the FED knows, I mean, it can't
Speaker 1: directly target the energy industry. I haven't seen the chart,
Speaker 1: but you know the Challenger of Gray Christmas number was out.
Speaker 1: It did show a drop in UH layoffs in January
Speaker 1: and February January February, though, we're still up by thirty
Speaker 1: three percent from a year ago. But as you mentioned,
Speaker 1: of the layoffs, twenty five thousand people in the month
Speaker 1: of February. Now those are announced layoffs. That doesn't mean
Speaker 1: they're out of the job yet, but will be soon.
Speaker 1: But look at what's happened now for we'll see you tomorrow,
Speaker 1: probably tomorrow. The fourteenth straight month losses in the energy industry,
Speaker 1: and they've been averaging about ten thousand a month uh
Speaker 1: since frankly January of twenty fifteen. And this suggests they
Speaker 1: may be picking up the pace of that uh. And
Speaker 1: that's one of the reasons why. I mean, I've got
Speaker 1: about two hundred and rising jobs tomorrow, but for the
Speaker 1: whole year, you know, we're thinking we'll google date closer
Speaker 1: to two million jobs. Last year we created two point
Speaker 1: seven million. And part of that difference is layoffs in
Speaker 1: the energy industry going in to adding to laying off
Speaker 1: in and probably even deeper in. But from the FEDS
Speaker 1: point of view, uh, you know, they can't target the
Speaker 1: energy industry. They know there's a supply issue. I think
Speaker 1: they have to look, as you said, at what's happening
Speaker 1: outside of energy. Knowing both in energy and manufacturing there
Speaker 1: what economists like to call multiplier effects. You throw the
Speaker 1: stone into the lake and the ripples go around, and
Speaker 1: that is going to affect other industries, other companies, and
Speaker 1: other individuals. But you're right, so far it's been extraordinarily contained.
Speaker 1: And then Mike, you know, it goes to Kruger's to America's.
Speaker 1: This is a different debate. There's a debate about labor
Speaker 1: economy and wage growth. In a broader macro view, this
Speaker 1: is about the micro dynamics of job formation and disformation.
Speaker 1: It's a different story. Yeah. I mean one of the
Speaker 1: least followed numbers by economists is the Challenger Job Cuts Report,
Speaker 1: because it's worldwide, not just in the United States, and
Speaker 1: many of those jobs never actually get cut or it's attrition.
Speaker 1: But when you uh, the real question Stewart is, of course, uh,
Speaker 1: when you have we knew that there is there have
Speaker 1: been layoffs and left more laoffs coming in the energy industry.
Speaker 1: It's when it follows on, when when the energy people
Speaker 1: are no longer working in, no longer spending money at
Speaker 1: the local stores, and the local stores go out of business.
Speaker 1: That's a problem. And I note that in North Dakota
Speaker 1: the unemployment rate is still two point seven even after
Speaker 1: all the layoffs. Well, Mike, and I think that gets
Speaker 1: to the idea that you know, well we are reading
Speaker 1: about announced layoffs in energy, Nobody in maybe the transportation industry,
Speaker 1: the airlines, or the hotels or the motels, or technology
Speaker 1: or some parts of manufacturing said we hire twenty thousand
Speaker 1: or a thousand people this month because our energy costs
Speaker 1: are down, and that is a big savings and we're
Speaker 1: seeing a little stronger demand. So you you see, you know,
Speaker 1: you always hear the bad news, and there is plenty
Speaker 1: of it and legitimate, but what you don't see is
Speaker 1: the good news. The only way you kind of see
Speaker 1: it in general was look at the total job numbers
Speaker 1: and if they're up two hundred thousand tomorrow despite the
Speaker 1: layoffs and energy, and looking over the last twelve or
Speaker 1: thirteen months, jobs are up about two hundred thousand a month,
Speaker 1: even absorbing the losses and energy. So there are positive
Speaker 1: effects of people getting jobs or keeping jobs, or maybe
Speaker 1: now getting better wages because of the dropping energy. And
Speaker 1: I've been adamant about the fact that the net impact
Speaker 1: on the US economy of lower energy prices as positive,
Speaker 1: but a lot of distributional effects and there's not much
Speaker 1: the FED can or should do about it. And by
Speaker 1: the way, it's also helping Europe, it's helping Japan, it's
Speaker 1: helping China. Maybe not enough, but think of where the
Speaker 1: U s economy and some of those economies might be
Speaker 1: if gasoline was coming up on or fifty a gallon
Speaker 1: and oil prices were still nine hundred bucks a Gallon. Yeah,
Speaker 1: it's not to say the least. Stuart Off in brilliant,
Speaker 1: Thank you so much with p n C H Financial,
Speaker 1: Michael McKie, John Tucker emailing me yesterday in the middle
Speaker 1: of the show. I think you know as our as
Speaker 1: our proxy for cheap New Jersey gas. Mr Tucker was
Speaker 1: suggesting a dollar fifty six. That was my memory. Could
Speaker 1: we get under a dollar and I'm not ready for
Speaker 1: that as well. On an inflation of justice basis here
Speaker 1: there um, but we need John to come in and
Speaker 1: tell us what he's spending his extra money on. Yes,
Speaker 1: we do no question about that. Economic data. Will review
Speaker 1: product of any later today. Bloomberg Surveillance coming up there,
Speaker 1: with all due respect. Highlight brought to you by land Rover.
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Speaker 1: Above and Beyond broadcasting live to New York, Bloomberg eleventh
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Speaker 1: Bus and Bloomberg dot Com. This is Bloomberg Surveillance. It
Speaker 1: is a thirty on Wall Street. I'm Michael McKee along
Speaker 1: with Tom Keen. Our Economic indicators today, brought to you
Speaker 1: by Commonwealth Financial Network. When it's time to change the conversation,
Speaker 1: talk with a broker dealer? Are I a that's ready
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Speaker 1: Vinnie deal Judais. At the first word desk, Micael Economic
Speaker 1: News jobless claims. They are up by six thousand a
Speaker 1: two hundred seventy eight thousand, topping forecast. Revised data on
Speaker 1: fourth quarter productivity meantime down two point two percent less
Speaker 1: than forecast. Unit labor costs up three point three percent again,
Speaker 1: jobless claims rising last week, up by six thousand to
Speaker 1: two hundred seventy eight thousand. At couple of first word
Speaker 1: Desk'm Vidye del Judai. Let's go back to New York
Speaker 1: Vine Dell ju Uh. Well, I don't know whether you
Speaker 1: call a move from a negative three percent a three
Speaker 1: percent contraction in productivity to a two point two percent
Speaker 1: contraction is good news or not, I suppose on a
Speaker 1: relative asis, but the unit labor cost job three point
Speaker 1: three percent is catch people's eye. Can you adjust the
Speaker 1: mic of our next steam guest? He is UM, he's
Speaker 1: been he's been searching for something to do moving into spring,
Speaker 1: and some were in onto Cleveland and Philadelphia. Maybe we
Speaker 1: could get them to be the gop SR. I mean,
Speaker 1: I think there's a job opportunity. I don't. I don't
Speaker 1: think I'm qualified, but they definitely need somebody go ahead.
Speaker 1: Where we're watching what's going on with fascination and wondering.
Speaker 1: We were talking over the last two days while we
Speaker 1: were done in Washington about how Wall Street is seeing
Speaker 1: all this, I mean, leaving aside individual candidates, with the
Speaker 1: fracturing of one party, um, the move to the left uh,
Speaker 1: and in the other party, um, the people with the
Speaker 1: money and a lot at stake, how they're viewing all
Speaker 1: of this at this point, I think with fear intrepidation.
Speaker 1: I think people on Wall Street. People on Wall Street
Speaker 1: are basically not that ideological in many ways. They have,
Speaker 1: you know, they have a point of view, they have
Speaker 1: they may belong to a party. But they're not extremists.
Speaker 1: They're kind of pragmatists. They're kind of centrists, a bit
Speaker 1: like the majority owner of Bloomberg LP. And there's our
Speaker 1: there's our Disclaimers radio stage, uh and and so they
Speaker 1: view all this with alarm. They they you know, in
Speaker 1: an extreme case, they worry that we could go off
Speaker 1: the deep end into into some unknown political area, the
Speaker 1: way countries in europeath from time to time. And even
Speaker 1: short of that, they worry about about, you know, who's
Speaker 1: going to be in the White House. Mr Trump enjoys,
Speaker 1: as far as I can tell, zero support on Wall Street.
Speaker 1: I don't know anybody in the business community, but I
Speaker 1: shouldn't say anybody, but virtually nobody in the business can
Speaker 1: be supporting him for any number of reasons. I think
Speaker 1: on the Democratic side, things have gotten a bit what
Speaker 1: I would call better, in that I think Hillary Clinton's
Speaker 1: path to the nomination is now quite clear, and so
Speaker 1: while she may have moved a bit to the left
Speaker 1: during this primary season, I think I don't think we're
Speaker 1: gonna have a socialist as the Democratic nominee. Let's see,
Speaker 1: right now, that's the issue. You nail it. Absolutely, People
Speaker 1: shift through an election year. Do you see any perception
Speaker 1: that any of the three Republican front runners right now
Speaker 1: can shift is right and did to the middle of
Speaker 1: this nation's psychology. I'd say I would say, I think,
Speaker 1: I think it's possible that Ruby O can and and
Speaker 1: I don't know whether this is a backhanded compliment, but
Speaker 1: I think he's shown that he is, how shall I
Speaker 1: put it, flexible in his opinions, pragmatic on immigration. As
Speaker 1: you know, he's had a variety of opinions on choice,
Speaker 1: He's had a variety of pro choice, choice choice versus
Speaker 1: life issues. He's had a variety of opinions. So I
Speaker 1: think he is capable of moving. Ted Cruz is a
Speaker 1: complete extreme idealogue who in some ways would be worse
Speaker 1: for the Republican Party I think in a general election
Speaker 1: than Trump, and Trump has Trump has deep psychological problems
Speaker 1: that make him really unfit. You are a student of
Speaker 1: our history on this, I think of William Jennings, Bryan
Speaker 1: or any of the other movement coalescing eight forward, coming
Speaker 1: out of the civil or the word the last few
Speaker 1: days has been moved meant if it is a movement
Speaker 1: that Mr Trump is affecting, how to institutions staunch that
Speaker 1: movement so it doesn't get over thirty x percent of
Speaker 1: the electorate in the long run. This is what I'm
Speaker 1: about to say. Has been discussed many times, but but
Speaker 1: what seems very clear to all of us is that
Speaker 1: Trump represents a group of Americans who have not done
Speaker 1: well economically over the last five, ten, fifteen, twenty years,
Speaker 1: who feel marginalized, who therefore feel threatened by immigrants and
Speaker 1: things like that, and makes them more nativists. And the
Speaker 1: way to deal with this is not there's no short
Speaker 1: term fix. The way to deal with this in the
Speaker 1: long term is to take care of these people and
Speaker 1: find them jobs, help them with increase their incomes, and
Speaker 1: give them a better life. That's really what that's really
Speaker 1: what's bothering them? Why are we doing When you look
Speaker 1: at the markets, there doesn't seem to be any reflection
Speaker 1: of horror in what's been going on uh in the
Speaker 1: stock market versus what's going on in the campaign trail.
Speaker 1: Investors have to discount the future even as they look
Speaker 1: at this and the negatives that you're sighting with these candidates.
Speaker 1: Is there a view as they game things out that yes,
Speaker 1: these people may get elected, but the way the American
Speaker 1: system works, not much terrible is going to happen. I
Speaker 1: think there's a few things going First of all, I
Speaker 1: think that, uh, the probability of any one candidate getting
Speaker 1: elected is obviously not even because you still have primaries
Speaker 1: going on. Then you have a general election, and so
Speaker 1: if you started doing probability math, I think you calculate
Speaker 1: that the chance of Trump being elected are maybe twenty
Speaker 1: or between having to get nominated and then having to
Speaker 1: get past Hillary Clinton. I think the market probably today
Speaker 1: we guess that Hillary Clinton is going to be the
Speaker 1: next president, and I don't know that that's that threatening. Yes,
Speaker 1: she has some different ideas, but she's a sensible, rational person.
Speaker 1: But I think the other thing you alluded to that
Speaker 1: the market is relying on is the gridlock in Washington
Speaker 1: and the fact that it's unlikely that no matter who
Speaker 1: gets elected, there's to be some massive policy shift. UH.
Speaker 1: Getting from Congress, Steve Ratners, thank you so much, short
Speaker 1: and then Governor Romney again speaking. This will be cover
Speaker 1: Michael Barrow have full coverage of this, uh through the
Speaker 1: morning and into the afternoon. Is well, onto Michigan and
Speaker 1: then onto Florida. Look for the announcement of Steve Ratner's
Speaker 1: go ops are coming from the White House sometime in
Speaker 1: the near in the near future. Futures negative to down,
Speaker 1: futures negative ten uh West Texas thirty four A barrel.
Speaker 1: All right, let's just bring in Michael bar and get
Speaker 1: the latest news. Michael, Mike Tom, thank you very much.
Speaker 1: Former Republican presidential nominee mid Romney plans to deliver some
Speaker 1: strong words against Donald Trump. Romney plans to call Trump
Speaker 1: in a speech later today phony and a fraud. The
Speaker 1: former Massachusetts governor says Trump is playing the American public
Speaker 1: for suckers. The excerpts are from the speech Romney plans
Speaker 1: to give later today at the University of Utah and
Speaker 1: the bids who dislaunched Trump from the top of the
Speaker 1: Republican Party's presidential race. Meanwhile, Trump fired back on ABC.
Speaker 1: Trump called Romney a failed candidate and should have beaten
Speaker 1: Barack Obama. Millions of people are joining the Republican Party
Speaker 1: because of me, and you know what, the republic establishment.
Speaker 1: Republican Establishment's probably going to give it right back and
Speaker 1: go back to the old days of Mitt Romney, who
Speaker 1: couldn't win. Trump will take part in to Night's Republican
Speaker 1: presidential debate on Fox News. Only four podiums will be
Speaker 1: on the stage tonight for the debate in Detroit. Ben
Speaker 1: Carson issued a statement yesterday saying he does not see
Speaker 1: a political path forward and will be on no show.
Speaker 1: South Korean officials say North Korea fired six short range
Speaker 1: projectiles into the sea off its east coast today. The
Speaker 1: launches came hours after the UN Security Council approved tough
Speaker 1: sanctions on pyong Yang for its recent nuclear tests. Global
Speaker 1: News twenty four hour Today, powered by our two hundred
Speaker 1: journalists more than a hundred fifty news bureaus from around
Speaker 1: the world. Mike Labark, Mike Tom, thank you, mich A
Speaker 1: little time now for the Bloomberg NBC Sports update. Here's
Speaker 1: John Sesshion, my greater and act. The flake Gate is back.
Speaker 1: Oral arguments today in New York as the NFL appeals
Speaker 1: to a three judge panel that's lost last year in
Speaker 1: district court. If balls were deflated, and if so, how
Speaker 1: not really the issue here? The NFL will argue Commissioner
Speaker 1: Roger Goodell had the collectively bargained right to suspend Tom
Speaker 1: Brady for four games the Union will contend the NFL
Speaker 1: made mistakes in its application. Neither Goodell or Brady will
Speaker 1: be in court, and the decision could be many months away.
Speaker 1: The Yankees exhibition opener in Tampa was a wild one.
Speaker 1: Yanster down seven nothing, ended up winning tend to nine
Speaker 1: in a drop fly ball in the ninth inning. Manitor
Speaker 1: Joe Girardi was asked about the month long suspension just
Speaker 1: given to his new closure or old As Chapman, for
Speaker 1: domestic violence and use of a firearm. The thing to
Speaker 1: do when you have issues like this is to learn
Speaker 1: from him and try to be there for people. I
Speaker 1: think he's ready to move on, and then he took
Speaker 1: responsibility for what happened, and he wants to be better
Speaker 1: as a as a player. Ran a person ch happening
Speaker 1: to pitch in spring training, but now in the regular
Speaker 1: season until May nine. Yankees and Phillies today and the
Speaker 1: Mets open up with the Nationals. March Madness Conference tournaments
Speaker 1: underway in the Northeast, Winds for l I Youth, Fairly
Speaker 1: Dickinson and the top scene Wagner St. Francis was ounced.
Speaker 1: In America East, top seed Stony Brook moves on and
Speaker 1: gets help when second seed and three times if any
Speaker 1: league champ all but he got upset Seaton all his
Speaker 1: four game Winstrey came to an end at butler Fordham
Speaker 1: beat Ducane. Rutgers still winless in the Big Ten, had
Speaker 1: to play second rank Michigan State and lost by thirty one.
Speaker 1: With the Bloomberg NBC Sports Up Day, I'm John stashell, John,
Speaker 1: thanks so much. A futures negative two deaf features at
Speaker 1: negative thirteen again a churn all in all to the market.
Speaker 1: You really gotta believe we're slotted into a job's day move.
Speaker 1: As we moved to eight thirty tomorrow morning, Alan Krueger
Speaker 1: and Bill Gross will join us to review that data.
Speaker 1: I'm gonna scroll down here to get to a thousand
Speaker 1: is the final sample. We make it a tick on
Speaker 1: that here as we get to tomorrow, with the unemployment
Speaker 1: rate similar four point nine percent, Michael McKee and Tom
Speaker 1: Keene coast to coast worldwide Bloomberg Surveillance. Bloomberg Surveillance has
Speaker 1: brought to you by NYCB ask about their my community
Speaker 1: interest checking with three NYCB online and mobile banking earned more.
Speaker 1: Getting more of is an NYCB family dot Com for
Speaker 1: details global business news twenty four hours a day at
Speaker 1: Bloomberg dot Com, the Radio, Plust mobile app, and on
Speaker 1: your radio. This is a Bloomberg Business Flash and I'm
Speaker 1: Karen Moscow. The number of Americans applying for unemployment benefits
Speaker 1: rose last week to a level that's consistent with steady
Speaker 1: improvement in the labor market, while Jova's claims unexpectedly climbed
Speaker 1: to buy six thousand to two hundred seventy eight thousand.
Speaker 1: The week that ended February twenty seven, the four week
Speaker 1: average dropped to the lowest since the end of November,
Speaker 1: European stocks halting their longest rally since October, oil falling
Speaker 1: from an eight week high, and bonds in the region
Speaker 1: rising as investors await fresh indications of the strength of
Speaker 1: the U S economy. We checked the markets every fifteen
Speaker 1: minutes throughout the trading day on Bloomberg. Snp E mini
Speaker 1: futures are little changed to lower down one and a
Speaker 1: half points, DOWI mini futures down ten NASDAKI Many futures
Speaker 1: down less than a point, the decks in Germany's down
Speaker 1: two tenths per cent, the tenure treasuries down one thirty
Speaker 1: second the yield one point eight four percent yelled on
Speaker 1: the two year point eight four percent. Nimex screwed oil
Speaker 1: down six tenths per cent or twenty cents to thirty
Speaker 1: four or forty seven A barrel comes Gold is little
Speaker 1: changed of fifty cents to twelve forty two thirty announced
Speaker 1: the euro a dollar oh nine oh four. The N
Speaker 1: one thirteen point eight five Kroger down almost eight percent
Speaker 1: in early trading after a fourth quarter comps store sales
Speaker 1: missed analysts estimates, and Urban Life is down six percent.
Speaker 1: The New Christian Company, under federal investigation for allegations of
Speaker 1: fostering a pyramid scheme, said it overstated growth of new
Speaker 1: customers and distributors last year because of database errors. That's
Speaker 1: a Bloomberg business flash. Tom and Mike Karen, thanks so much,
Speaker 1: greatly appreciated Bloomberg surveillance folks worldwide. We say good morning,
Speaker 1: Michael McKee and Tom Keane. It is eight forty nine
Speaker 1: on Wall Street. The following is from Bloomberg View, opinions
Speaker 1: and commentary from Bloomberg columnists. I'm Jonathan Bernstein, a columnist
Speaker 1: for Bloomberg View. Ben Carson has finally dropped out of
Speaker 1: the Republican presidential race. Ted Cruz is presumed most likely
Speaker 1: to benefit, since he and Carson do best among Christian Conservatives.
Speaker 1: Although Carson supporters may not have been a monolithic block. Still,
Speaker 1: small shifts and votes can make a huge difference. In
Speaker 1: Tuesday's Arkansas primary, for example, Carson received six percent of
Speaker 1: the vote while Donald Trump beat Cruz by two percentage
Speaker 1: points if Carson hadn't been in the race, with Cruise
Speaker 1: of one. Perhaps true, a proportional allocation is rare on
Speaker 1: the Republican side. Winning even if I just want to vote,
Speaker 1: is disproportionately rewarded. That system of winner take more, winner
Speaker 1: take most, and winner take all delegate distribution explains why
Speaker 1: Cruz and Marco Rubio could still easily gather enough delegates
Speaker 1: to win the nomination, even though both Rubio especially are
Speaker 1: off to slow starts. All one of them has to
Speaker 1: do now is win consistently. A four candidate field with
Speaker 1: Ben Carson out doesn't hand Cruise or Rubio anything, but
Speaker 1: Carson's exit gives both of them a slightly better fighting chance.
Speaker 1: I'm Jonathan Bernstein. For more view, please go to Bloomberg
Speaker 1: View dot com or View go on the Bloomberg terminal.
Speaker 1: This has been Bloomberg View and Bloomberg View commentaries can
Speaker 1: be heard hourly weekdays on Bloomberg Radio. Jonathan Burnstein has
Speaker 1: been very strong recently. He's written short, pungent, immediate notes
Speaker 1: out on Bloomberg View with all that we've seen. I'm
Speaker 1: sure he'll do that. As we moved to Michigan and
Speaker 1: onto Florida in less than two weeks, I write on it, Mike,
Speaker 1: less than two weeks. I guess that's Tuesdays Michigan and
Speaker 1: the Tuesday after that is it's not It's not just Florida,
Speaker 1: it's Illinois and a whole bunch of other states as well.
Speaker 1: Our next guest was smart on Tuesday. It sounds like
Speaker 1: that old what were the Cure their song? Monday Tuesday
Speaker 1: Wednesday Data Data. Stephen Stanley has been just outstanding on
Speaker 1: a centrist, cautious tendency on American GDP. He works with
Speaker 1: Robert Sinch and Amer's Pierpont and joins us. Now, Steve,
Speaker 1: you've been dead on on a more muted yet okay
Speaker 1: economic growth. Can you move the vector up? No? I
Speaker 1: don't think so. I mean and I think The productivity
Speaker 1: numbers this morning speak to that as well. Even though
Speaker 1: it was upward division in the fourth quarter, productivity for
Speaker 1: the year last year was a half percent. So you're
Speaker 1: just with population growth slowing down and productivity not really
Speaker 1: doing much, you're not going to get a ton of
Speaker 1: trend growth. What what does that lie for the longer
Speaker 1: for for the I want say longer run, but for
Speaker 1: the this year, well, I think you know, from the
Speaker 1: fence perspective, it's it's a mixed bag, right, because the
Speaker 1: economy doesn't look as strong, But at the same time,
Speaker 1: if if potential is lower than we thought it was,
Speaker 1: then we've probably made more progress in terms of taking
Speaker 1: up slack than we thought. And that's exactly what we're
Speaker 1: seeing in the economy now. The labor markets have gotten
Speaker 1: pretty tight, even though growth has been at a pace
Speaker 1: that we would have considered very mediocre throughout this expansion.
Speaker 1: What's the then, the forecast for your forecast for the
Speaker 1: pace of expansion at this point, Well, you know, we've
Speaker 1: been growing at her a little bit two percent for
Speaker 1: several years, and I think we may kick up a
Speaker 1: little bit from there. In two thousand and sixteen. I
Speaker 1: think there are a couple of things that were drags
Speaker 1: last year that are not going to be quite as
Speaker 1: as big a deal. I think once we get past
Speaker 1: the early part of the year, this inventory correction is
Speaker 1: probably going to be mostly behind us. So I don't
Speaker 1: think inventories are going to continue to drag on growth
Speaker 1: as they have over the last few quarters. Um. And
Speaker 1: I think the other thing is we're probably getting much
Speaker 1: closer to the bottom in terms of UH oil and
Speaker 1: gas drilling activity. That's been a huge drag on GDP
Speaker 1: over the last several quarters, and and certainly not done yet.
Speaker 1: But I think, you know, certainly as the year progressist
Speaker 1: will probably um see less of a drag there as well.
Speaker 1: Is the markets in tune. We had a little bit
Speaker 1: of a recipe here the last two weeks or so
Speaker 1: for you as an economist, when you argue with Bob
Speaker 1: Sinch and throw coffee cups at him, is Bob Sinch's
Speaker 1: world more in tune with Steven Stanley's world. Um, we're
Speaker 1: coming into somewhat better alignment. I think if you go
Speaker 1: back a month, the markets were thinking that the U.
Speaker 1: S economy was absolutely positively headed right into a recession,
Speaker 1: and you know, I think that was a gross over reaction,
Speaker 1: and people are kind of stepping back from the precipice
Speaker 1: a little bit on that. UM And as a result
Speaker 1: of that, UM feed expectations have moved up a little
Speaker 1: bit and the markets are almost pricing one whole for
Speaker 1: the entire year now, whereas there was a brief period
Speaker 1: of time UM last month where there was basically nothing
Speaker 1: baked into the cake. So we're moving in that direction.
Speaker 1: Um My guesses there's still more to go to get
Speaker 1: us into better alignment, but you know, we're at least
Speaker 1: not quite as divergent as we were UM a month ago. Well.
Speaker 1: It's interesting because there have been a lot of people
Speaker 1: in the bond markets who have suggested that maybe the
Speaker 1: markets are not prepared for what the FED is going
Speaker 1: to have to actually do. Are you in that camp? Yeah,
Speaker 1: I mean that's a that's a theme UM and and
Speaker 1: certainly have been very early on that, unfortunately. But I
Speaker 1: think that's that's something that I've talked about for several years,
Speaker 1: that once the FED finally did get going, they're likely
Speaker 1: to have to move faster and buy more than the
Speaker 1: markets are are expecting. I think the first inkling of
Speaker 1: that really was the was the inflation data for January
Speaker 1: where we got point three increases for both of the
Speaker 1: core measures. Um, that's the one thing that could press
Speaker 1: the FED, I think, into acting more aggraphically than what
Speaker 1: they'd like to do. Along that line, I'm glad you
Speaker 1: bring it up. If there's twenty in flavors of measuring inflation, Mike,
Speaker 1: I have a tendency to the Cleveland CPI, which is
Speaker 1: core like but with the adjustable outliers every month months
Speaker 1: and month a month, the mixed changes that's elevated above
Speaker 1: some of the measures are the Are the other measures
Speaker 1: catching up? It's more elevated, more malleable measures. Well, I
Speaker 1: think you're going to see that. Um, we we have.
Speaker 1: The one that's been the outlier to the downside is
Speaker 1: the one that the FED, of course pays the most
Speaker 1: attention to, the core PC deflator, and that one has
Speaker 1: moved in the last three months from one point three
Speaker 1: to one point seven. So we're starting to see a
Speaker 1: little bit of convergence there. The gap between the CPI
Speaker 1: measures and the and the PC two flator measures have
Speaker 1: been unusually large, and I think those will close begin
Speaker 1: to close this year, and more than likely closed by
Speaker 1: the PC deflator measures creeping a little higher. Um, But
Speaker 1: you're right. I mean there's an analogous measure for the
Speaker 1: for the PC to flatter day that comes out of
Speaker 1: the Dallas FED, and that measure has been running. You know,
Speaker 1: twenty five basis points are so higher than the than
Speaker 1: the core PC numbers. So um. And I think a
Speaker 1: lot of people the FET have started to emphasize that
Speaker 1: alternative measures, so I think they're they're understanding of it.
Speaker 1: I think what's interesting is just at the point where
Speaker 1: it seems like inflation might be ticking higher, all of
Speaker 1: a sudden, people to FED are starting to, you know,
Speaker 1: play the shell game again. And now we're going to
Speaker 1: talk about inflation expectations, which stay fear may be moving lower.
Speaker 1: So there's always a reason to be devilished, I guess
Speaker 1: and uh And we'll see how it goes. But if
Speaker 1: these inflation numbers continue to be firmer, I think they're
Speaker 1: going to be forced to uh to to respond talk
Speaker 1: to us from an economic point of view, leaving the
Speaker 1: FED out of it. But how inflation expectations relate to
Speaker 1: inflation forecasts, Well, you know, I think what we've learned
Speaker 1: in economics of the last twenty or thirty years is
Speaker 1: that inflation expectations are very important. I still don't think
Speaker 1: economists have a very good handle on how exactly inflation
Speaker 1: UH develops. But I think one thing that people will
Speaker 1: agree on is that UM one important input is what
Speaker 1: people expect inflation to be. Because there's a certain inertia there.
Speaker 1: People expect too percent inflation and you're you're kind of
Speaker 1: presposed to get that in the absence of some sort
Speaker 1: of a shock. UM. I think for me, I don't
Speaker 1: think that the average person out there is so sophisticated
Speaker 1: that they you know, that they can give you a
Speaker 1: ten basis point swing in their inflation expectations that it's
Speaker 1: very meaningful. So I take the numbers more qualitatively than quantitatively.
Speaker 1: But but I certainly think that when the FED runs
Speaker 1: policy is easy as it's run for several years, that's
Speaker 1: one example where people may be surprised, but the fact
Speaker 1: is that that should leave a market in terms of
Speaker 1: inflation over time. Steve, if you have a chance to
Speaker 1: get in the Manhattan sometime in the next three or
Speaker 1: four years, can your people talk to our people. We
Speaker 1: would love to get you into the studio, Steve, we
Speaker 1: could do, Mike, the nirvana of a one hour Steve
Speaker 1: Stanley Robert Cinch extravaganza. That would be extraordinary. Stephen Stanley
Speaker 1: with Amer's pierrepont, having to put up with Bob Sinch's
Speaker 1: discussions on end and the rest of it. I Mike,
Speaker 1: I can't you know, somebody gets it right, and uh,
Speaker 1: it's pretty pretty impressive how they took Morning in America
Speaker 1: and brought it down a little bit. Futures negative, one down,
Speaker 1: Futures negative. A bonus round, Mike, McKie and I in
Speaker 1: New York City in one piece after Super Tuesday, Your
Speaker 1: bonus another hour of Bloomberg surveillance