WEBVTT - Surveillance: Mining for Gold with Miletti 0:00:00.120 --> 0:00:03.800 If you enjoy the Bloomberg Surveillance podcast, check out our 0:00:03.880 --> 0:00:08.959 new daily news program, the Bloomberg Daybreak Podcast. It gives 0:00:09.039 --> 0:00:12.840 you the day's top stories with context in just fifteen minutes. 0:00:13.240 --> 0:00:15.960 Look for it in your podcast feed by six a m. 0:00:16.160 --> 0:00:20.280 Eastern every morning. Subscribe on Apple, Spotify and anywhere else 0:00:20.400 --> 0:00:23.799 you get your podcasts, and stay tuned for a sample 0:00:23.880 --> 0:00:27.400 of today's edition of Bloomberg Daybreak at the very end 0:00:27.600 --> 0:00:28.640 of this podcast. 0:00:33.640 --> 0:00:36.839 This is the Bloomberg Surveillance Podcast. I'm Lisa A. 0:00:36.880 --> 0:00:40.199 Bramwoids along with Tom Keene and Jonathan Ferrow. Join us 0:00:40.240 --> 0:00:43.840 each day for insight from the best in economics, geopolitics, 0:00:43.880 --> 0:00:44.959 finance and investment. 0:00:45.320 --> 0:00:47.360 Subscribe to Bloomberg Surveillance. 0:00:46.880 --> 0:00:50.400 On demand on Apple, Spotify and anywhere you get your podcasts, 0:00:50.680 --> 0:00:53.720 and always on Bloomberg dot Com, the Bloomberg Terminal, and 0:00:53.760 --> 0:00:57.200 the Bloomberg Business App. A real question around where we 0:00:57.240 --> 0:00:59.440 are in terms of the rally and whether it has 0:00:59.520 --> 0:01:01.320 legs and joining us to really get into that. As 0:01:01.320 --> 0:01:05.040 Animaletti head of Active Equity, it all spring global investments 0:01:05.080 --> 0:01:08.840 before we get into and welcome this question of do 0:01:08.959 --> 0:01:12.680 we end up with just a stock picking market? Can 0:01:12.760 --> 0:01:15.399 you pile in and get some sort of sense of 0:01:15.440 --> 0:01:18.240 relief from the rally that seems to only be gaining steam. 0:01:18.720 --> 0:01:21.600 It's a great question, Lisa, and I think the hardest 0:01:21.720 --> 0:01:25.560 part for investors is do I stay on the sidelines 0:01:25.680 --> 0:01:28.800 or not? And we were talking earlier. Is the market 0:01:29.000 --> 0:01:32.319 really pulled and drawn by emotion? And it is, it 0:01:32.360 --> 0:01:35.120 always has been, and so investors have to fight that 0:01:35.200 --> 0:01:39.319 emotion every step of the way and remain disciplined. And 0:01:39.360 --> 0:01:42.720 I think despite all of the kind of chaos that's 0:01:42.760 --> 0:01:46.480 happening around us and outside of us, within the economy, 0:01:46.520 --> 0:01:51.880 with the FED, with global global unrest, I think it's 0:01:51.920 --> 0:01:54.440 brought a lot of focus to our investment teams, and 0:01:54.480 --> 0:01:58.280 what they're looking at is the narrow focus on which 0:01:58.320 --> 0:02:02.120 stocks you want to own. Investors, when you're out of 0:02:02.120 --> 0:02:04.160 the market, you have to be really careful about when 0:02:04.200 --> 0:02:07.400 you get in. What I tell people is, regardless if 0:02:07.720 --> 0:02:12.399 you know overall there's negativity or positivity, you really want 0:02:12.440 --> 0:02:15.040 to always have some allocation in equities. 0:02:15.120 --> 0:02:20.720 So let's pick some stocks in Vidia, Meta, Tesla. 0:02:19.800 --> 0:02:21.040 You like all the popular ones. 0:02:21.120 --> 0:02:23.359 No, I'm just wondering, I mean, how do you basically 0:02:23.520 --> 0:02:26.519 understand what valuation even means at a time when things 0:02:26.520 --> 0:02:28.880 are going to the moon based on promise of future invention. 0:02:29.080 --> 0:02:31.120 Yeah, you know, I mean, I think what's been really 0:02:31.160 --> 0:02:34.480 interesting is the flow in that we're seeing into equities 0:02:34.960 --> 0:02:39.160 is going into index funds, right most most importantly, and 0:02:39.200 --> 0:02:43.720 when that happens, investors are buying more of the big 0:02:43.840 --> 0:02:47.200 names and paying a lot more for those names. That's 0:02:47.320 --> 0:02:49.640 just the way it works. And so in a way, 0:02:49.800 --> 0:02:53.320 active managers are a little bit trying to not fight 0:02:53.480 --> 0:02:56.480 that trend. We own some of those names too, but 0:02:56.560 --> 0:03:00.000 we're also trying to find those names that haven't been recognized. 0:03:00.280 --> 0:03:02.639 We're really you know, like mining for a gold right now. 0:03:02.680 --> 0:03:05.679 There are opportunities that do exist out there. 0:03:05.960 --> 0:03:09.840 In an emotional market. Where do value stocks come in? 0:03:10.080 --> 0:03:12.840 Yeah, it's a great question, Eila. And you know, as 0:03:12.840 --> 0:03:16.960 you saw in the beginning part actually last year, when 0:03:17.000 --> 0:03:20.080 the markets really started to kind of pay attention to value, 0:03:20.120 --> 0:03:23.680 there were good reasons for it. Multiples were compressing, and 0:03:23.720 --> 0:03:27.359 that's when investors went to value. I like to think 0:03:27.360 --> 0:03:31.480 about it, like, don't discriminate between value and growth, right, 0:03:31.560 --> 0:03:35.680 you can buy high quality goods at a good price. 0:03:35.720 --> 0:03:37.400 So I kind of like to say, I like to 0:03:37.400 --> 0:03:39.920 shop at sax or Nemans just don't like to pay 0:03:39.960 --> 0:03:43.000 full price. I kind of think our investment teams like 0:03:43.120 --> 0:03:45.280 to do the same thing, right. They want to buy 0:03:45.400 --> 0:03:49.400 quality companies, but they want to pay a good price 0:03:49.440 --> 0:03:51.720 for them, and there's real opportunity to do that now. 0:03:51.720 --> 0:03:54.360 So I would say, don't discriminate between value and growth. 0:03:55.040 --> 0:03:58.320 I just wonder what does even value mean? Yeah, I mean, honestly, no, 0:03:58.360 --> 0:04:00.440 I'm serious. I was talking to some people saying that 0:04:00.480 --> 0:04:04.560 basically conservative stocks, defensive stocks, value stocks, everything's tech. 0:04:04.600 --> 0:04:06.280 I mean, that's basically what everyone is saying. 0:04:06.360 --> 0:04:08.520 So at what point do you start to say, well, 0:04:08.560 --> 0:04:10.360 maybe we're just falling behind. And if you own the 0:04:10.360 --> 0:04:13.400 broader index, well at least you'll catch the stories that 0:04:13.480 --> 0:04:16.160 might come out of nowhere and blow up the index. 0:04:16.440 --> 0:04:21.400 Yeah, it's a great point. And you know, over the years, 0:04:21.520 --> 0:04:26.039 you know, people have categorized value and growth separately, but 0:04:26.240 --> 0:04:29.520 as you know, we've had big industries change from you know, 0:04:29.680 --> 0:04:32.719 we've seen energy via value industry and energy be a 0:04:32.760 --> 0:04:35.080 growth industry, and so I think investors have to kind 0:04:35.080 --> 0:04:36.880 of frame that up. And I think Lisa, you did 0:04:36.920 --> 0:04:41.240 really well. Any category, any company can move from value 0:04:41.240 --> 0:04:43.200 to growth at any time, which is why we kind 0:04:43.200 --> 0:04:47.480 of face the individual stocks, individual companies and look at 0:04:47.600 --> 0:04:48.880 what we're paying for them. 0:04:49.160 --> 0:04:52.120 Just quickly the here going into the second half, we've 0:04:52.120 --> 0:04:54.000 gotten a lot of reassessments, a lot of people are 0:04:54.000 --> 0:04:55.960 just getting more bullish. That seems to be the theme 0:04:56.000 --> 0:04:58.360 pretty much across the board, with the exception of Mike Wilson. 0:04:58.440 --> 0:05:01.440 But I'm wondering from your van to point, how you're 0:05:01.480 --> 0:05:06.240 shifting either the names or your thesis heading into December. 0:05:06.480 --> 0:05:09.520 Yeah, it's a great question, Lisa, because clearly, I think 0:05:09.520 --> 0:05:11.240 the last time I was on the show, I said 0:05:11.279 --> 0:05:15.279 we expected the rally to kind of either spread down 0:05:15.360 --> 0:05:18.200 market cap, which we have started to see a little bit. 0:05:18.880 --> 0:05:21.200 We would expect that to continue. If the rally is 0:05:21.200 --> 0:05:24.560 going to continue, investors are going to flow more broadly 0:05:24.640 --> 0:05:28.839 into the market. But again, I think our investment team's 0:05:28.839 --> 0:05:33.839 focus is looking for those unique opportunities, trimming names where 0:05:34.080 --> 0:05:37.280 the valuation just doesn't make sense, because what we do 0:05:37.440 --> 0:05:40.760 is all about risk versus reward and really trying to 0:05:40.800 --> 0:05:44.119 set up our investors to protect them against big risk 0:05:44.440 --> 0:05:47.880 and focus on reward over time, because again, the future's 0:05:48.200 --> 0:05:49.560 pretty foggy. 0:05:49.600 --> 0:05:51.800 All right, well, Ammelili, thank you so much in the 0:05:51.800 --> 0:05:55.400 foggy future after the fog has luckily passed for us 0:05:55.440 --> 0:05:57.440 in the New York City and Melardia of All Spring, 0:05:57.480 --> 0:05:58.480 thank you so much. 0:06:08.600 --> 0:06:09.280 Joining us now. 0:06:09.400 --> 0:06:12.160 Jan Start Vague, founder and CEO of Exante Data and 0:06:12.360 --> 0:06:15.440 market reader agains. What's your takeaway that we do have 0:06:15.520 --> 0:06:17.920 these divergent central banks. Is it just a matter of 0:06:18.080 --> 0:06:20.839 the US getting out front, having a cycle that it 0:06:20.880 --> 0:06:23.000 had to deal with first, and everybody else catching up, 0:06:23.360 --> 0:06:26.760 or is this truly a splintering of the biggest global 0:06:26.800 --> 0:06:29.360 economies at a time of great transition. 0:06:30.640 --> 0:06:32.640 I think there's an element of both, right. So, clearly 0:06:32.760 --> 0:06:36.400 the US started to recover quicker, the stimulus was more 0:06:36.440 --> 0:06:39.160 aggressive in the US, and therefore the US cycle has 0:06:39.160 --> 0:06:41.600 been more front loaded, right. And then we have economies 0:06:41.600 --> 0:06:45.040 such as the eurosone economy where the stimulus was slower 0:06:45.680 --> 0:06:50.039 and more drawn out. And we are having a situation 0:06:50.160 --> 0:06:53.560 now where inflation is actually having moral mentioned in the 0:06:53.600 --> 0:06:58.040 Eurozone than in the US. And therefore the ECB cannot 0:06:58.040 --> 0:07:00.640 do any pausing. The ECB has to sickle that that's 0:07:00.680 --> 0:07:02.680 going to go every single meeting, right, and they are 0:07:02.760 --> 0:07:06.800 highly likely to be hiking in July and probably September 0:07:06.880 --> 0:07:09.080 and maybe even further than that. Right. So this is 0:07:09.120 --> 0:07:11.400 the first time for a while where we've seen monetary 0:07:11.440 --> 0:07:14.720 policy divergence in a way that's going to support the Euro. 0:07:15.400 --> 0:07:18.240 We saw a big, big move yesterday, and then I 0:07:18.240 --> 0:07:20.840 think if we scan the globe, right, then there's some 0:07:20.880 --> 0:07:22.480 special issues around China. 0:07:22.560 --> 0:07:22.720 Right. 0:07:22.800 --> 0:07:25.880 So I think one data point that's very important this 0:07:26.040 --> 0:07:29.160 year is that we've had a China reopening. We have 0:07:29.360 --> 0:07:32.520 had some recovery in certain sectors in China, right, but 0:07:32.600 --> 0:07:34.320 there's no inflation pressure in China. 0:07:34.400 --> 0:07:34.520 Right. 0:07:34.520 --> 0:07:37.600 If we compared to other countries that have reopened, we 0:07:37.640 --> 0:07:41.320 are not seeing any inflation pressure in China that resembles 0:07:41.320 --> 0:07:44.840 what we've seen in other reopening situations, and that's really important. 0:07:45.240 --> 0:07:48.200 And this is also a sort of evidence that there's 0:07:48.240 --> 0:07:53.240 something structurally different in the Chinese economy. And one thing 0:07:53.280 --> 0:07:55.480 that I think investors are not paying enough attention to 0:07:55.800 --> 0:07:58.679 is that there's been a massive structural shift in terms 0:07:58.680 --> 0:08:01.000 of the capital flow that's coming into China. 0:08:01.120 --> 0:08:01.320 Right. 0:08:01.400 --> 0:08:03.320 It used to be the case that people just wanted 0:08:03.360 --> 0:08:07.480 to invest in China, build manufacturing capacity in China, but 0:08:07.600 --> 0:08:12.440 that foreign direct investment from companies has slowed very, very dramatically, 0:08:12.600 --> 0:08:14.800 and that has not recovered after reopening. So that's a 0:08:14.840 --> 0:08:18.440 structural shift that's very important for everything, including the Chinese currency. 0:08:18.800 --> 0:08:18.960 Right. 0:08:19.120 --> 0:08:20.760 What do you make of China's attempts to get more 0:08:20.760 --> 0:08:23.240 and more trade occur in the one Are they attempting 0:08:23.240 --> 0:08:25.800 to over time become a competitor the dollar in terms 0:08:25.800 --> 0:08:28.559 of reserve currency. Is this just going to be a small, 0:08:28.720 --> 0:08:31.160 tiny part of world trade or is it? Where do 0:08:31.200 --> 0:08:31.840 you stand on that? 0:08:33.160 --> 0:08:36.280 So China is a huge part of global trade in 0:08:36.360 --> 0:08:39.320 terms of the goods moving around, right, But they've been 0:08:39.360 --> 0:08:43.760 attempting to get that stuff invoiced in local currency and 0:08:44.120 --> 0:08:47.040 try to create competition to the dollar. But look at 0:08:47.080 --> 0:08:50.080 how the yuan has been trading this year, Right, were 0:08:50.160 --> 0:08:52.959 up over the last two days, But the big trend 0:08:52.960 --> 0:08:57.560 has been the Chinese currency has underperformed very dramatically, consistent 0:08:57.640 --> 0:09:02.480 with monetary policy being one of the easiest in the world. Right, 0:09:02.480 --> 0:09:04.400 they have not been any tightening related to the inflation 0:09:04.480 --> 0:09:07.160 dynamic that I spoke about, Right, So we have a 0:09:07.200 --> 0:09:10.560 situation where from a trade perspective, China is in a 0:09:10.640 --> 0:09:14.520 very strong position and could argue Okay, we dominate many many. 0:09:14.320 --> 0:09:15.000 Types of trade. 0:09:15.040 --> 0:09:18.040 We should have a reserve currency aspect, right, But when 0:09:18.080 --> 0:09:20.679 you look at the acid side, nobody wants to buy 0:09:20.760 --> 0:09:24.560 the Chinese bonds. That literally outflows from Chinese bonds almost 0:09:24.600 --> 0:09:27.000 every single month. Even central banks around the world are 0:09:27.040 --> 0:09:30.800 starting to reduce CNY holdings, right, So it doesn't have 0:09:31.400 --> 0:09:34.760 the reserve currency aspect on the acid side. It's only 0:09:34.760 --> 0:09:36.920 on the trade that you can make the argument. And 0:09:37.320 --> 0:09:40.240 that's why that goal that the Chinese have is not 0:09:40.280 --> 0:09:41.160 so easy to achieve. 0:09:41.640 --> 0:09:43.079 Yeah, that makes a lot of sense. And where do 0:09:43.120 --> 0:09:44.840 you see Japan playing out? I think that's the country 0:09:44.840 --> 0:09:47.680 we're seeing actually get a lot of benefit from people 0:09:47.720 --> 0:09:50.720 moving away from China and their power in the regions 0:09:50.760 --> 0:09:53.679 important and clearly their stock market's done very well. Where 0:09:53.720 --> 0:09:55.760 do you see Japan playing out in terms of the 0:09:55.760 --> 0:09:56.560 global economy? 0:09:57.320 --> 0:09:59.360 Yes, so I think if you sort of look at 0:09:59.360 --> 0:10:03.240 a situation where global multi nationals are getting more cautious 0:10:03.280 --> 0:10:06.960 about investing aggressively in China, where are they going to 0:10:06.960 --> 0:10:07.959 build capacity? 0:10:08.080 --> 0:10:08.240 Right? 0:10:08.360 --> 0:10:11.719 So, there's a number of countries in Asia that have 0:10:12.600 --> 0:10:15.719 manufacturing histories. Japan is one of them, Koreas another one 0:10:15.720 --> 0:10:20.280 of them. There's new work countries like Taiwan and obviously 0:10:20.400 --> 0:10:24.240 Thailand and Vietnam too, and closer to the US, Mexico 0:10:24.280 --> 0:10:26.120 is benefiting from that. Right, So we do have a 0:10:26.200 --> 0:10:28.800 number of emergent markets that are going to stand to 0:10:28.840 --> 0:10:31.720 benefit from that. Japan has a bit of a special case. 0:10:32.760 --> 0:10:35.439 They have their own demographications and so forth. But clearly 0:10:36.000 --> 0:10:39.319 the NICK is now moving in a way that's very interesting, 0:10:39.679 --> 0:10:44.120 and it's a very ironic situation. You have inflation in 0:10:44.200 --> 0:10:46.520 Japan that is running around five percent. In terms of 0:10:46.559 --> 0:10:50.440 the momentum we're seeing on core and financial conditions are easy, right, 0:10:50.760 --> 0:10:56.200 bandiels are pecked at zero effectively, right, and equity and 0:10:56.240 --> 0:10:59.000 this is going higher, the end is going weaker, right, 0:10:59.080 --> 0:11:01.160 So eventually this to create a problem with the Bank 0:11:01.160 --> 0:11:02.480 of Japan that they have to deal with. 0:11:02.880 --> 0:11:05.080 Given all of this, does it make sense that people 0:11:05.120 --> 0:11:08.120 are just looking at the divergences and saying, I guess 0:11:08.120 --> 0:11:10.079 there's only one thing to do, go into big tech. 0:11:10.120 --> 0:11:12.120 I mean that basically was the theme of the week. 0:11:12.320 --> 0:11:14.360 Go into big tech, go into the euro. Those were 0:11:14.360 --> 0:11:16.959 the two trades of the week. Do they have lasting power? 0:11:18.720 --> 0:11:23.320 So I get to ask, if not every day. Certainly 0:11:23.360 --> 0:11:25.480 every week we get asked about, Okay, is the AI 0:11:25.600 --> 0:11:26.240 trend the bubble? 0:11:26.320 --> 0:11:26.440 Right? 0:11:26.520 --> 0:11:31.040 Is it overdone? There are certain companies where the evaluations 0:11:31.080 --> 0:11:35.120 look pretty crazy, right, But I have to say, take 0:11:35.160 --> 0:11:39.600 a step back. We think about this technology, what kind 0:11:39.600 --> 0:11:43.800 of incredible changes it's going to create in the economy, right, 0:11:43.880 --> 0:11:48.800 and then we think about how relatively young this excitement 0:11:48.840 --> 0:11:52.280 about this trend is likely only really a couple of 0:11:52.280 --> 0:11:55.720 months in so given how big the structural shift these 0:11:55.720 --> 0:11:58.400 technologies are going to create, I don't think we've run 0:11:58.440 --> 0:12:02.520 for very long in terms of investors really getting involved 0:12:02.559 --> 0:12:06.040 in these trends. Like I track global capital flows very carefully. 0:12:06.040 --> 0:12:07.720 Like one thing I track is, Okay, what is the 0:12:07.800 --> 0:12:10.160 foreign money that's come into you as tech in the 0:12:10.240 --> 0:12:12.599 last couple of months. It's actually very limited, right, So 0:12:12.640 --> 0:12:14.800 it seems like foreign investors have kind of missed the 0:12:14.880 --> 0:12:19.720 AI the terbo charge rally, and I wouldn't rule out 0:12:19.760 --> 0:12:21.240 that they're going to come in later. So I think 0:12:21.240 --> 0:12:23.800 it's tour to fade it. And then I was saying, 0:12:23.800 --> 0:12:26.800 in terms of other themes, emergent markets had a very 0:12:26.800 --> 0:12:30.079 good run, right, So there are other asset classes that 0:12:30.120 --> 0:12:32.360 are on the move that have perhaps been forgotten about 0:12:32.360 --> 0:12:35.160 for many, many years. So it's not just tech. I 0:12:35.160 --> 0:12:37.840 would say the emergent market trends are pretty interesting and 0:12:37.920 --> 0:12:39.200 certainly something we've been watching. 0:12:39.360 --> 0:12:42.040 Yeahzonoid Veig of Exante Data and Market Reader, thank you 0:12:42.080 --> 0:12:43.160 so much for. 0:12:43.120 --> 0:12:43.959 Being with us. 0:12:44.000 --> 0:12:50.720 Set joining us now, especially at a moment of huge debate, 0:12:50.800 --> 0:12:53.839 is Congressman French Hill, Republican from Arkansas, and I want 0:12:53.880 --> 0:12:56.640 to start there, especially welcome by the way to New York. 0:12:56.960 --> 0:12:59.120 I want to start there, especially because there is this 0:12:59.280 --> 0:13:03.760 increasing fight among House Republicans right now about whether to 0:13:03.760 --> 0:13:07.800 cut spending much more substantially, maybe raising a question around 0:13:07.800 --> 0:13:10.000 whether we have to discuss the faulting again in a 0:13:10.000 --> 0:13:11.920 couple of months. Where do you weigh in on this? 0:13:12.240 --> 0:13:13.160 How concerned are you? 0:13:14.120 --> 0:13:17.400 Well, we have our fiscal constraint deal that we struck 0:13:17.400 --> 0:13:21.079 between House Republicans and President Trump, I mean President Biden, 0:13:21.480 --> 0:13:23.959 and that's put in place and that governs the top 0:13:24.000 --> 0:13:27.280 line for appropriations, and now both the House and Center 0:13:27.280 --> 0:13:30.920 are working to pass those twelve appropriations bills and that'll 0:13:30.960 --> 0:13:33.920 be what tees up, as you say, a spending fight 0:13:34.040 --> 0:13:37.040 this fall, potentially as we attempt to pass all twelve 0:13:37.080 --> 0:13:40.240 of those bills at the agreed upon a level in 0:13:40.280 --> 0:13:45.360 the Fiscal Restraint Measure or below, and so that's the issue. 0:13:45.360 --> 0:13:49.200 But let's be clear, discretionary spending is forty percent higher 0:13:49.960 --> 0:13:52.959 than it was just before the pandemic. So we're spending 0:13:53.000 --> 0:13:56.960 two trillion dollars more per year on spending in this 0:13:57.080 --> 0:14:00.920 country than we were before the pandemic. And so there's 0:14:00.960 --> 0:14:02.800 an effort, and I think we've made that clear that 0:14:02.840 --> 0:14:05.840 we should lower that rate of spending growth and cap 0:14:05.880 --> 0:14:07.160 it and that's what we did in this bill. 0:14:07.360 --> 0:14:10.559 Although Greg Valiere, who is on earlier of AGF, was 0:14:10.600 --> 0:14:12.360 saying that he's been in this business a long time 0:14:12.400 --> 0:14:14.480 and he's ever seen anything like this, to agree on 0:14:15.120 --> 0:14:19.120 spending a certain amount and then retracting it to essentially say, Okay, 0:14:19.120 --> 0:14:19.720 well maybe not. 0:14:20.880 --> 0:14:22.680 That's not what the deal is, that's not what the do. 0:14:22.760 --> 0:14:25.720 I think this has gotten exaggerated in the press. These 0:14:25.720 --> 0:14:29.120 are spending caps, these are ceilings, and so the appropriators 0:14:29.120 --> 0:14:32.040 now take those numbers and write the spending bills in 0:14:32.080 --> 0:14:35.800 each department of cabinet government and they can spend up 0:14:35.840 --> 0:14:38.040 to that amount. That's the goal, and we've set the 0:14:38.080 --> 0:14:40.520 goal of if we're going to spend this spending curve down. 0:14:40.560 --> 0:14:43.320 We don't want to do supplemental appropriations. We want to 0:14:43.320 --> 0:14:46.040 make the government live within this enormous budget that we have. 0:14:46.240 --> 0:14:48.400 Do you think that it's worth threatening another default? 0:14:48.640 --> 0:14:51.760 Potentially, think anybody's threatening another default. I think what you 0:14:51.880 --> 0:14:55.240 see is if you don't pass those appropriations bills, then 0:14:55.280 --> 0:14:58.040 you're confronted with an f y twenty four fiscal twenty 0:14:58.040 --> 0:15:02.600 four continuing resolution, which I don't think anybody in Congress wants, 0:15:02.640 --> 0:15:06.040 because you freeze spending at the current level, but you 0:15:06.120 --> 0:15:09.000 get all the policies that are frozen too, and members 0:15:09.000 --> 0:15:11.560 of Congress like to debate in the appropriations process, both 0:15:11.560 --> 0:15:14.880 those spending levels and the policies that go with them. 0:15:15.400 --> 0:15:18.080 And you can't do any new starts when you have 0:15:18.120 --> 0:15:20.880 a continuing resolution. So you can't start construction on a 0:15:20.880 --> 0:15:23.720 new nuclear submarine if you have a continuing resolution. So 0:15:24.440 --> 0:15:26.240 it's not in the best interests of the government to 0:15:26.280 --> 0:15:28.440 have a continuing resolution. But that's why I don't see 0:15:28.440 --> 0:15:30.680 it as a default debate at all. It's more of 0:15:30.720 --> 0:15:33.680 a typical government shut down type debate, if you want 0:15:33.680 --> 0:15:35.680 to use that term, on whether we're going to have 0:15:35.720 --> 0:15:38.800 appropriated funds approved across both Houses of Congress, or if 0:15:38.800 --> 0:15:40.840 we're going to be confronted with a continuing resolution? 0:15:41.000 --> 0:15:44.200 Have you ever seen the Republican Party as split as 0:15:44.200 --> 0:15:46.160 it is right now. We've been talking about this for 0:15:46.200 --> 0:15:50.320 a while, but perhaps the prosecution former President Trump has 0:15:50.320 --> 0:15:53.400 brought this into even colder relief, just because you have 0:15:53.440 --> 0:15:56.400 people lining up behind him and other people saying, wait 0:15:56.720 --> 0:15:58.440 for some information to come out. 0:15:58.680 --> 0:15:59.600 Where do you stand on this? 0:16:00.320 --> 0:16:02.240 On are you talking about still talking about spending? 0:16:02.240 --> 0:16:02.960 You're talking about. 0:16:02.760 --> 0:16:05.080 President talking about President Yeah, President Trump, Well. 0:16:05.080 --> 0:16:07.520 Look, I think he made this situation a lot worse 0:16:07.560 --> 0:16:10.360 by the way he handled the interactions with the government 0:16:10.400 --> 0:16:14.440 regarding the Presidential Records Act. So I think he's made 0:16:14.440 --> 0:16:17.840 the situation a lot more challenging. I do believe that 0:16:17.880 --> 0:16:21.720 we need complete reform on how we handled classified informations. 0:16:21.720 --> 0:16:23.680 We just saw the news this morning with this young 0:16:23.720 --> 0:16:27.760 man National guardsman out on Cape cod Is facing sixty 0:16:27.840 --> 0:16:32.280 years in prison for releasing and distributing classified information. I 0:16:32.360 --> 0:16:34.640 think this sends a lot of confusing messages to the 0:16:34.640 --> 0:16:37.320 American people. We didn't make sure those rules are fair 0:16:37.600 --> 0:16:40.560 clear and that presidents abide by them and everybody else 0:16:40.560 --> 0:16:41.840 in the government abides by them. 0:16:42.880 --> 0:16:46.040 So if I think about the if I think about 0:16:46.040 --> 0:16:48.400 that issue specifically, it's clear that there have been more 0:16:48.440 --> 0:16:51.240 than several people who have had issues with documents. So 0:16:51.800 --> 0:16:53.680 whether or not that's more egregious for him than other 0:16:53.720 --> 0:16:57.880 people led is yet to be determined, But clearly we 0:16:57.960 --> 0:16:59.800 need to do something with that. Is that just because 0:16:59.800 --> 0:17:02.800 we're so far behind in what we're doing with our 0:17:02.800 --> 0:17:05.080 paper versus digital? Is that just because we just don't 0:17:05.080 --> 0:17:07.879 have a clear view on what really is classified and 0:17:07.920 --> 0:17:09.119 how classified it needs to be. 0:17:09.200 --> 0:17:11.720 It's such a good question. In fact, we declassified in 0:17:11.760 --> 0:17:15.320 the House Intelligence Committee the other day the instances of this. 0:17:15.800 --> 0:17:19.239 The National Archives reported to us in a hearing that 0:17:19.280 --> 0:17:23.240 they have found classified material in over eighty eighty different 0:17:23.280 --> 0:17:26.840 former members of Congress records at their local university or 0:17:26.840 --> 0:17:30.720 wherever their store, and that they've found classified information in 0:17:30.880 --> 0:17:34.720 unclassified file boxes from every president from President Reagan on. 0:17:35.440 --> 0:17:38.120 So this tells me as a former White House staffer, 0:17:38.240 --> 0:17:41.280 I can remember vigorously the pack up process on leaving 0:17:41.320 --> 0:17:44.320 the administration in January nineteen ninety three. What was in 0:17:44.359 --> 0:17:47.520 a classified box and what wasn't out of my office? 0:17:48.160 --> 0:17:49.879 So we have rules, but I think we need to 0:17:49.920 --> 0:17:52.480 improve training. And you raise a point of do we 0:17:52.560 --> 0:17:57.639 classify too much information? Do we declassify information effectively and 0:17:57.680 --> 0:18:00.560 communicate that and the difference between digital as in the 0:18:00.560 --> 0:18:03.840 case of Missus Clinton and paper. So I think there's 0:18:03.880 --> 0:18:07.160 work to be done here. It doesn't excuse anyone's behavior 0:18:07.359 --> 0:18:09.320 on this topic, though, Well. 0:18:09.240 --> 0:18:12.280 To that point, are you concerned about the rhetoric around this, 0:18:12.960 --> 0:18:16.719 that this is an issue of prosecuting the people and 0:18:16.880 --> 0:18:20.560 going after someone just in terms of political interference? Are 0:18:20.560 --> 0:18:24.439 you concerned about how this is raising questions about the 0:18:24.480 --> 0:18:28.680 deep state and reigniting those discussions rather than the discussion 0:18:28.840 --> 0:18:31.520 around how to keep classified document secret? 0:18:31.640 --> 0:18:32.280 You bet, Lisa. 0:18:32.280 --> 0:18:36.720 I mean, when you indict a former president by officials 0:18:36.720 --> 0:18:39.240 of the Justice Department of his opposition party, you're going 0:18:39.280 --> 0:18:43.399 to invite political speculation that it's a political activity, and 0:18:43.440 --> 0:18:46.560 it will absolutely take us off the substance and back 0:18:46.600 --> 0:18:49.720 to that. But I simply I think that everybody ought 0:18:49.720 --> 0:18:51.840 to have clear understanding about how to handle this and 0:18:51.880 --> 0:18:55.040 do it right. And the weaponization of the federal government, 0:18:55.040 --> 0:18:57.960 which you're implying, is the subject of a select committee 0:18:57.960 --> 0:19:00.760 in Congress this year. Because of the top at the 0:19:00.840 --> 0:19:05.000 FBI during the end of the Obama administration. In Trump 0:19:05.000 --> 0:19:07.719 administration has disappointed a lot of people in Congress, it's 0:19:07.800 --> 0:19:11.160 under a tremendous scrutiny. Director Ray is on the hill 0:19:11.280 --> 0:19:13.959 routinely trying to defend that we have fired the people 0:19:14.440 --> 0:19:17.440 who brought you Russia, Russia, Russia. We fired the people 0:19:17.440 --> 0:19:20.240 who we think did wrong in that whole issue around 0:19:20.280 --> 0:19:23.560 Missus Clinton or around mister Trump, and we're trying to 0:19:23.560 --> 0:19:25.280 clean up our act and do the right thing. But 0:19:25.320 --> 0:19:29.520 there is skepticism among the citizens and people in Congress, 0:19:29.560 --> 0:19:31.520 and I think it's a heavy lift. It's as heavy 0:19:31.560 --> 0:19:34.960 a lift as the Church Commission back in the nineteen seventies. 0:19:34.960 --> 0:19:40.120 And it's not hyperbole. So Director Ray has to make 0:19:40.160 --> 0:19:42.680 the reputation of the FBI the one that we all 0:19:42.760 --> 0:19:45.439 know and love over history. 0:19:45.600 --> 0:19:47.600 So you see the onus on the FBI rather than 0:19:47.760 --> 0:19:49.520 on the former president. Change the rhetoric. 0:19:50.040 --> 0:19:52.600 Well, I think the onus is on your point about 0:19:53.200 --> 0:19:58.920 is the deep state potentially in trouble and creating mischief? 0:19:58.960 --> 0:20:01.639 I think it was clear in the Russia investigation and 0:20:02.320 --> 0:20:04.920 Crossfire Hurricane that they were involved, and it was very 0:20:04.960 --> 0:20:07.520 political at the top of the FBI. That's hurt the 0:20:07.600 --> 0:20:10.639 FBI's reputation. I think it's up to Director Way to 0:20:10.680 --> 0:20:14.080 help work with Congress and rebuild that reputation, which then 0:20:14.160 --> 0:20:16.840 I think rebuilds trust through the American people. 0:20:17.160 --> 0:20:19.320 French Hell, thank you so much, Congressman. I really appreciate 0:20:19.359 --> 0:20:33.639 you taking the time with us. The SMP, Homebuilders ETF. 0:20:33.640 --> 0:20:36.640 I'm just looking at this is up twenty seven percent 0:20:36.960 --> 0:20:40.840