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Speaker 1: Runt You by Bank of America Mary Lynch. With virtual reality,

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Speaker 1: virtually everything will change. Discover opportunities in a transforming world.

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Speaker 1: Be of a, mL dot Com, slash VR, Mary Lynch,

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Speaker 1: Pierced Fenner and Smith Incorporated. Ye, Welcome to the Bloomberg

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Speaker 1: Surveillance Podcast. I'm Tom Keene with David Gura. Daily we

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Speaker 1: bring you insight from the best of economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We

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Speaker 1: have a wonderful guest to brief us through this half hour,

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Speaker 1: and it's on Distress Desk. It's about taking opportunity when

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Speaker 1: nobody else has the courage. Honsky Rooms out of Williams

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Speaker 1: College has made a career of listening to the markets

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Speaker 1: and then acting when few have the courage uh to act.

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Speaker 1: He is with Greylock and joins us Um this morning.

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Speaker 1: Where do you learn to buy distress? You were a

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Speaker 1: literature major? You know are you? Are you reading Dickens

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Speaker 1: or you know ed Gary Ellen Poe to figure out

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Speaker 1: how do you train to buy something for twenty cents

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Speaker 1: on the dollar when everybody's running for the theater exit. Um.

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Speaker 1: I think I had less to do with my education,

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Speaker 1: probably more to do with where I grew up. We

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Speaker 1: moved to Nigeria when I was three years old, and

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Speaker 1: then from Nigeria to Morocco. And my father likes to

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Speaker 1: talk about me haggling with the merchants and the markets

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Speaker 1: and Moroccos. So that's really interesting actually. And you know,

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Speaker 1: when I was a kid, I used to I realized

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Speaker 1: that it was pretty easy to make money every time

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Speaker 1: around spring cleaning. So you wait for people to take

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Speaker 1: all the garbage out, you run around, take the nice

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Speaker 1: things in. Two weeks later, you have a stoop sale.

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Speaker 1: Are you an embarrassment at a modern Starbucks? Do you

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Speaker 1: go in and bid? Um? You know, I'm probably not

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Speaker 1: the best person to go to a Starbucks. I just understand.

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Speaker 1: Don't understand why you could spend that much money on

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Speaker 1: a cup of coffee. What's the opportunity in distress right now?

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Speaker 1: Is it like it wasn't oh seven o eight oh nine?

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Speaker 1: Or is it all quiet on the Hans front? No,

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Speaker 1: I certainly doesn't. You don't have the opportunities that you had,

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Speaker 1: uh two thousand nine? Um, But what's going on currently.

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Speaker 1: UM One, we're seeing the sort of the last few

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Speaker 1: legs of a trade that came about UM in two

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Speaker 1: thousand eleven, two thousand twelve, which was Greece. UM there,

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Speaker 1: you know, ended up being a technical default on the

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Speaker 1: bonds of restructuring bonds traded down to actually quite a

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Speaker 1: bit belower lower than than twenty cents in the doll

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Speaker 1: or the trading at the same prices North Korean debt UM.

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Speaker 1: And now on a back of Brexit, what you're seeing

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Speaker 1: in UM you know, the EU is staying together. UM

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Speaker 1: So as soon as the vote happened last year, you

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Speaker 1: could really tell that Greece was going to be on

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Speaker 1: a one way train. UM. So you've gotten recovery maybe

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Speaker 1: two bases points left of tightening on the bonds in Greece,

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Speaker 1: and you're probably gonna have a pretty good leg of

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Speaker 1: an up trade in the equities we we we within.

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Speaker 1: That is the basic idea of a cramdown. I've asked

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Speaker 1: this question twice last week. Let me ask it of

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Speaker 1: you now. I would suggest any resolution of a distress

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Speaker 1: sovereign process is somebody has to take a price loss.

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Speaker 1: What I mean hearing out of Europe is we're gonna

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Speaker 1: extenderation out until we're all dead, and we're gonna lower

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Speaker 1: the interest right down to something I can stomach. Okay,

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Speaker 1: that's hans Hume one oh one. But isn't part of

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Speaker 1: hans Hume one oh one is the creditors have to

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Speaker 1: take a price cut. You know, you coming, you buy

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Speaker 1: the piece of twenty and they own it at a

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Speaker 1: hundred or eighty or whatever, and the takeout price has

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Speaker 1: got to be like forty or fifty, right, Um, you know,

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Speaker 1: the takeoff price, it depends on the country. In the

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Speaker 1: case of Greece, that what they're talking about now in

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Speaker 1: terms of debt relief only is in relation to the

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Speaker 1: official sector. Um, you know, we in the two thousand

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Speaker 1: twelve deal, the private sector took the haircut. We took

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Speaker 1: fifty three and a half cents a principal haircut. So

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Speaker 1: we're not gonna be part of any future debt forgiveness.

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Speaker 1: And quite honestly, I think the Greeks and their biggest

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Speaker 1: creditors have some sense of what they're gonna do. It's

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Speaker 1: the I, M F and the EU, so you know,

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Speaker 1: to a much broader you know, from much broader perspective.

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Speaker 1: You're putting your finger on one of the big drivers

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Speaker 1: and how you approach this market, which is what possibility

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Speaker 1: do you have of getting crammed down? And it's really

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Speaker 1: a case by case situation. That's a beauty. Well let's

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Speaker 1: continue that fencing. Laqua joins us off from a francying.

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Speaker 1: Good morning, Good morning Tom. What a difficult comment by

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Speaker 1: Prime Minister May it it seems to me and I

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Speaker 1: can honestly say, Francine, I don't think we've seen the

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Speaker 1: set of many events of crisis exhaustion in the United Kingdom.

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Speaker 1: We've ever seen that in the United States. I mean,

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Speaker 1: is the city just overwhelmed this Monday morning. Well, what

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Speaker 1: you're talking about, of course, Tom, is this latest terror incident.

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Speaker 1: And we understand from Theresa Made that this is a

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Speaker 1: terror attack. It was a van that plowed into a

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Speaker 1: crowd outside in North London mosque and it's basically as

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Speaker 1: you say, Tom, it's the third terrorist attack on the

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Speaker 1: capitol in as many months. I don't know if people

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Speaker 1: are exhausted, but there's certainly seems to be a resolve

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Speaker 1: in the capital of the UK so that it doesn't

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Speaker 1: divide the society and brings people closer together, fighting together.

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Speaker 1: But all of this is a distraction because there's also

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Speaker 1: breggsit talks, so of course the government trying to deal

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Speaker 1: with two things at the same time, whilst the Prime

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Speaker 1: Minister is weakened almost by the day. Interesting. I don't know, Frenzy,

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Speaker 1: and if you heard Hans comes comments are in Greece,

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Speaker 1: but I really thought they were interesting about taking a

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Speaker 1: distress piece of looking at a time extension and interest

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Speaker 1: rate deduction, reduction, I should say, And as he set

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Speaker 1: a selected set of cramdowns where each case is different

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Speaker 1: as well, Frenzy, why don't you continue with Hans Comes

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Speaker 1: right now? Yeah, Hans, I was really interested in your

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Speaker 1: comming out in Greece and whether you actually thought that

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Speaker 1: any other European countries would need a bail out in

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Speaker 1: the next eighteen months. I think that the answers no.

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Speaker 1: I mean what I saw, I think the same as

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Speaker 1: that everybody else did post the Brexit vote. Um was

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Speaker 1: that there was a sense in the EU, you know,

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Speaker 1: the different organizations managing the EU setting up for a

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Speaker 1: tough negotiation with the UK, which the UK has made

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Speaker 1: for for itself, but basically ring fencing the rest of

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Speaker 1: you know, the market. Um so I think that you know,

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Speaker 1: there's some been some concerns obviously passed about Spain, but

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Speaker 1: currently maybe a little bit about the sovereign on the Portugal,

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Speaker 1: you know in Portugal, and maybe the banking system in Italy.

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Speaker 1: But these are all situations that the balance sheet of

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Speaker 1: the EU can support quite readily. And what you've seen

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Speaker 1: is a big change in the rhetoric that's come from

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Speaker 1: the deep pockets of the EU. Germany even Scheibla has

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Speaker 1: backed off some of the austerity talk and has been

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Speaker 1: basically supportive of the entire EU project. So I don't

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Speaker 1: see any other countries falling by the wayside. Let's continue

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Speaker 1: on this. We'll come back with Hans Hume, gray Lock

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Speaker 1: and really a lot to talk about their unpack on

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Speaker 1: this strange trace. Cramdown trying to say, like k London

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Speaker 1: of time, Mr Girl off off off today with this

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Speaker 1: Hans Hume of Garylla, we we opened hours ago and

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Speaker 1: on China, and I think we want to wander back

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Speaker 1: not only the China, but the the the distress of Asia.

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Speaker 1: When you and I study this racket, there was little

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Speaker 1: in bonds in Asia. Is that no longer true. Is

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Speaker 1: there like almost a mature debt market or guys like

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Speaker 1: you can play in Asia? Um, you know, there's clearly

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Speaker 1: a fixed income market that's developed. Um, you know, mature,

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Speaker 1: it's a bit, Yeah, it's mature. Yes. The issue there

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Speaker 1: is the on a relative basis, the opportunities for guys

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Speaker 1: like us aren't quite as attractive as in some of

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Speaker 1: the other geographical areas like Latin America. It's still well,

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Speaker 1: there's just been a lot of money chasing chasing returns,

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Speaker 1: so you know you'll get on a credit basis issuers

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Speaker 1: from China where you're not going to get a real

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Speaker 1: pick up and yield for the kind of risk that

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Speaker 1: we think you'll be taking. Um. Yeah, potentially, it's the

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Speaker 1: biggest market out there. If there is a major correction

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Speaker 1: in China and a major sell off, there'll be a

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Speaker 1: lot of money going for the exit. Uh, Hans, are

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Speaker 1: you expecting a correction in China or what's a likelihood

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Speaker 1: at the moment. I know you're still pretty bullish on

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Speaker 1: the country, but even if it's a thirty percent chance

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Speaker 1: of a correction, that could be quite ugly. Yeah. No,

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Speaker 1: and that's fair. Um, you know, personally I don't see

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Speaker 1: anything this year. Um. I'm pretty constructive on the markets

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Speaker 1: in general. Um. But you know, as a business, we

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Speaker 1: don't we don't like to try to anticipate crisis by

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Speaker 1: putting short positions on. We find it's actually easier to

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Speaker 1: wait for the sell off and then step in for

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Speaker 1: the you know workout. Um, so if it happens, will

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Speaker 1: be there. Um. I'm not gonna sit there and set

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Speaker 1: up a broad number of short positions and Chinese corporates

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Speaker 1: and you know, try to profit on a downturn because one,

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Speaker 1: I don't think it's a likely scenario, and to even

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Speaker 1: if I did it, the negative carry can knock us

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Speaker 1: out of the trade before we realize the timing. If

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Speaker 1: there's a downturn on, what is the first signal that

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Speaker 1: actually tells you that there's a downturn? Is there a

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Speaker 1: concern that it could be like the O A crisis

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Speaker 1: where some people saw it but actually no one realized

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Speaker 1: until it was too late. Um, yeah, I think you know,

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Speaker 1: building up to the O A crisis, you saw a

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Speaker 1: lot of cracks, you know, starting two thousand six, two

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Speaker 1: thousand seven, So it was one of these things where people,

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Speaker 1: you know, the markets were telling you that something was

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Speaker 1: going on, and the question was had we found a bottom?

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Speaker 1: And then you know, because of yeah, real estate here

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Speaker 1: in the US, and you put pressure on financial institutions

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Speaker 1: and then you know, bear Sterns and then finally collapse

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Speaker 1: a Lehman and then we went off. So I don't

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Speaker 1: think we're going to have one thing. You know, a market,

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Speaker 1: if China leads a downturn, will get a lot of

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Speaker 1: signals before things actually the bottom falls out. But one

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Speaker 1: of the things about your assessment there is could have

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Speaker 1: happened again. It's francy and I know every Friday afternoon

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Speaker 1: the doom in gloom letters come out. It's gonna be

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Speaker 1: the same again, etcetera, etcetera. I'm not hearing that from

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Speaker 1: you that it's the same frameworkers those seven oh eight. Yeah,

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Speaker 1: I don't think there's you know, the markets are very different,

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Speaker 1: so I think you know you're not. We don't have

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Speaker 1: nearly the amount of leverage in our markets that we

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Speaker 1: did in two thousand and eight. Um. So if there

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Speaker 1: is a all in risk off you know trade where

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Speaker 1: everything correlates to one and we're basically going off a cliff,

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Speaker 1: it's going to have to happen for a different reason

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Speaker 1: than it did in oh eaight um and but yeah no,

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Speaker 1: I I just don't see the circumstances for a similar

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Speaker 1: type of you know, turnaround in our market generously. You're

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Speaker 1: trying this morning, Thank you so much. Humans with Greylock folks.

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Speaker 1: We haven't seen him in the ages, which is my fault. Man.

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Speaker 1: It's good to see him this morning, without question. The

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Speaker 1: interview of the day on Amazon and on Whole Foods Market.

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Speaker 1: Joining us now from Newburger Berman is Charles Cantor, with

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Speaker 1: decades of experience and attempting to find value in The

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Speaker 1: distinction here is he is a kinder general er uh,

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Speaker 1: person of bringing together transactions and combinations. You're not adversarial

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Speaker 1: when you dial one hundred Avocado and say you guys

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Speaker 1: are too cheap, let's go. You do it a more

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Speaker 1: gentle way. What's the Cantor distinction. We're trying to think

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Speaker 1: about long term value. Were very active and engaged with

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Speaker 1: our companies. We're trying to have a constructive dialogue. We

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Speaker 1: think we can add a lot of value in helping

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Speaker 1: companies think through financial communication, capitalification, capital structure, and and

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Speaker 1: it's all about long term and trying to kind of

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Speaker 1: put the noise, put the noise away. The chief executive

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Speaker 1: officer of Whole Foods has had to skip around on

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Speaker 1: rhetoric recently. You're nodding here. Charles Cantor called another operation

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Speaker 1: greedy bastards in this transaction, is Newberger Berman greedy bastards?

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Speaker 1: I would hope not. We're trying to get a reasonable

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Speaker 1: reward for our effort over time. UM and UM. I

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Speaker 1: think it's best for others to comment on that. It's

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Speaker 1: but ultimately, UM, when you become a public company, your

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Speaker 1: responsibilities are too shareholders. When you remain a private company,

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Speaker 1: your responsibilities are those that own you privately. But once

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Speaker 1: once you come to the public markets, Um, the game

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Speaker 1: changes for many any different ways. Legendarily, you walked into

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Speaker 1: the Bryant Park Whole Foods and said this place needs

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Speaker 1: to be revalued. Was it the gluten free avocados that

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Speaker 1: did it for? You know? I think what Wholefuls has

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Speaker 1: done so well is it's it's convinced the millennials that

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Speaker 1: it's a very cool place to go shop. And and

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Speaker 1: the Brian Park shop is by no means a grocery store.

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Speaker 1: It's actually a restaurant with grocery as as a side items.

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Speaker 1: So they've been whole foods and and and and and

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Speaker 1: the management team they have been very forward thinking in

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Speaker 1: in in how they've built out their boxes. Um, And

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Speaker 1: what people for a long time didn't appreciate or may

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Speaker 1: not have realized, is that a set of Whole Foods

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Speaker 1: businesses is prepared foods and restaurants, of course have a

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Speaker 1: different margin structure than groceries and Briant Park like like

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Speaker 1: many of whole foods boxes around the country has an

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Speaker 1: incredible energy and vibe that that you probably don't experience

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Speaker 1: in some of your traditional grocery stores. Jeff Bezos of Amazon,

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Speaker 1: he needs a bidding work. You have made clear with

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Speaker 1: your report from dal Jones and Wall Street Journal that

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Speaker 1: one should be had. Who would come in to lift

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Speaker 1: this transaction over fourteen billion dollars? Look, I think, um,

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Speaker 1: I think I suggested that that Amazon was typically thrifty

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Speaker 1: in in how they thought about the value of whole foods.

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Speaker 1: We think whole foods is uniquely attractive strategic asset. Um,

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Speaker 1: do you have a valuation number that is in mind

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Speaker 1: without giving away the secrets, We don't, But but but

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Speaker 1: there's there's plenty of room um above. Should should others

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Speaker 1: step in? I think what was so remarkable amongst the

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Speaker 1: many remarkable things around around thinking about the deal, was

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Speaker 1: that Amazon's share value went up UM equal to the

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Speaker 1: total transaction value of I mean I kind of candidly

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Speaker 1: joked that that Amazon got Whole Foods for free. It's

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Speaker 1: I can't remember of another transaction where the entire purchase

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Speaker 1: price was covered by bye bye bye by the increase

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Speaker 1: in Amazon's value. Look, Walmart, for example, went down twelve

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Speaker 1: billion dollars. So I think there are many grocery executives,

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Speaker 1: boards of directors, both in the US and globally that

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Speaker 1: are probably going to think about the strategic value of

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Speaker 1: the sasset very quickly. Here would you suggest any acquirer,

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Speaker 1: including Mr Bezos could bring net income in the bottom

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Speaker 1: line of the income statement up rapidly? Can they add

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Speaker 1: if it's a hundred basis point business making one percent,

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Speaker 1: can they get that up to two hundred basis points quickly?

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Speaker 1: I think UM as a deal itself, UM, those that

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Speaker 1: acquire this asset will make a very very good risk

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Speaker 1: adjusted return. I think Amazon specifically, I'm guessing yet, but

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Speaker 1: I'm probably not far off. They have about fifty million

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Speaker 1: prime members. My guess is Whole Foods has about twelve

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Speaker 1: to th million customers. There's a huge opportunity to take

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Speaker 1: to take the prime members um into the Whole food store,

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Speaker 1: whether that be in person um or through the wire,

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Speaker 1: so to speak. Very quickly, and I want to come

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Speaker 1: back Charles Cancer. When people go into Whole Foods within

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Speaker 1: your research at New Burger Berman, are they buying the

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Speaker 1: fancy pants organic stuff or as Whole Foods about the

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Speaker 1: more private label three, it's, it's, it's it's probably a

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Speaker 1: bit about both. I think people go to Whole Foods

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Speaker 1: because the brand resonates with their values and across American,

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Speaker 1: across the world, people care about what they eat, and

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Speaker 1: Whole Foods has been a pioneer in getting people to

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Speaker 1: think through what they put in their body. Brunch you

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Speaker 1: by Bank of America, Mary Lynch. With virtual reality, virtually

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Speaker 1: everything will change. Discover opportunities in a transforming world, be

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Speaker 1: of a mL dot Com, slash VR, Mary Lynch pierced

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Speaker 1: Fenner and Smith Incorporated. And now we go to David

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Speaker 1: West and his conversation with Robert Ross. What is your

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Speaker 1: main argument to them all why they should be investing

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Speaker 1: in the United States right now. Mr Secretary, it's the

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Speaker 1: same reason as American companies should be and in fact are,

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Speaker 1: namely regulatory reform, getting rid of red tape, tax reform,

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Speaker 1: getting our rates down to very very competitive levels, unleashing

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Speaker 1: our energy resources, fixing our trade agreements, and creating a

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Speaker 1: much more healthy environment for businesses and consumers. So all

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Speaker 1: of those reasons are the why excuse me? So let's

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Speaker 1: talk about fixing those trade agreements. One of the things

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Speaker 1: you mentioned, which comes within your purview, um to what extent,

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Speaker 1: is fixing the trade agreements. You've been very outspoken you

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Speaker 1: want trade, but you want fair trade. To what extent

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Speaker 1: to tightening up those trade arrangements encourage US investment in

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Speaker 1: the sense that people need to be here to manufacture

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Speaker 1: so they're not subject to whatever restrictions there might be. Well,

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Speaker 1: I think it's a factor, but probably a relatively small factor.

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Speaker 1: I think cutting the tax or it's hugely as we

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Speaker 1: have is planned to do, is a very very big benefit.

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Speaker 1: Our tax structure used to be a major disadvantage. Similarly,

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Speaker 1: our regulatory structure had been a huge disadvantage. We were

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Speaker 1: I believe the most overregulated country going well, when you're

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Speaker 1: paying a lot of tax and you're having a lot

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Speaker 1: of regulatory bread tape, that discourages not only green field investment,

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Speaker 1: it discourages any kind of investment in the country. So

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Speaker 1: we think it's mostly the question of removing impediments and

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Speaker 1: then coupling that with the normal benefits of the US

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Speaker 1: A huge population base, wonderful market, open access to it

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Speaker 1: once you're here, highly educated workforce. That those are the

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Speaker 1: kinds of fundamental factors that were always at work, but

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Speaker 1: now we're supplemented with the improvements in business climate created

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Speaker 1: by President Trump. As you suggest, Mrs Secretary, you have

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Speaker 1: plans to cut taxes as well as reform taxes to

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Speaker 1: somewhat different things. You have plans, and there's a lot

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Speaker 1: of you worry about that initially during the tramp administration.

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Speaker 1: What do you say too, would be investors right now

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Speaker 1: and say, let's wait and see if that happens, because

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Speaker 1: right now it looks somewhat less likely or certainly delayed

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Speaker 1: from what we originally thought last January. Well, the timing

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Speaker 1: the administration has very little control over that really requires

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Speaker 1: activity by the Congress. But we seem to be making

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Speaker 1: very good progress on healthcare reform, and that's really the

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Speaker 1: prerequisite to getting the tax reform enacted. So the first

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Speaker 1: key to timing on tax will be when we get

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Speaker 1: the healthcare reform completed. Uh. Talk about the trade agreements

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Speaker 1: again that you raise. Where are we right now? For example,

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Speaker 1: let's be specific NAFTA. We've talked about that before when

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Speaker 1: you've been on the program. Where are we in the

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Speaker 1: process of renegotiating NAFTA and who's responsible? Is it you

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Speaker 1: or is it your colleague Bob Lyheiser. Well as to

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Speaker 1: where we are, we are right now awaiting the maturation

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Speaker 1: of the ninety day letter that we're required under the

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Speaker 1: Trade Promotion Act to send to the Congress. That clock

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Speaker 1: text on the of August. Thirty days before that, we

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Speaker 1: will we will be revealing to the Congress a more

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Speaker 1: detailed negotiating strategy than we had discussed with them before.

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Speaker 1: So the eighteenth of August is a big red letter

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Speaker 1: day for trade. But even short of that, we have

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Speaker 1: a big day very soon. In the middle of July

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Speaker 1: is our next announcement period, the next meeting session with

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Speaker 1: the Chinese. As you know, we've accomplished quite a little

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Speaker 1: bit ever since the dayton at the Mara Largo conference,

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Speaker 1: and we're hoping to achieve still more deliverable items in

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Speaker 1: the very very near future. Okay, we want to welcome

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Speaker 1: again our listeners on Bloomberg Radio as well as Bloomberg TV.

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Speaker 1: We're talking with Wilbert Ross, the U S. Commerce Secretary.

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Speaker 1: So before we get to China, let's go back just

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Speaker 1: for moments and AFTA. So you're saying mid July, there's

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Speaker 1: supposed to be a more detailed outline of the negotiating

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Speaker 1: strategy e commerce than August eighteen, you really start the negotiations.

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Speaker 1: Give us a sense after that, what is your hope

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Speaker 1: on the timetable when you might have something concluded. With

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Speaker 1: the Mexican government and the Canadian well, both governments are

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Speaker 1: quite receptive to the idea of a renegotiation. They both

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Speaker 1: know that this is at best an outdated agreement, doesn't

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Speaker 1: really address the digital economy, that doesn't very much address

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Speaker 1: services in general, certainly doesn't do much on financial services.

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Speaker 1: Also doesn't do very much unnatural resources. So those are

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Speaker 1: some big gaping holes in it. In part because some

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Speaker 1: Mexicans have changed their regulations for the better unnatural resources,

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Speaker 1: and in part because nobody way back when NAFTA was

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Speaker 1: negotiated even knew there would be the digital economy. So

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Speaker 1: first of all, it needs updating. Second of all, that

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Speaker 1: needs some reprovisioning to adjust to the economic realities of today.

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Speaker 1: For example, their rules of origin, namely what percentage of

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Speaker 1: the total content of a product will qualify as true

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Speaker 1: NAFTA product even though it came from outside NAFTA. In automotive,

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Speaker 1: they specified particular parts to which the percentages applied. Well,

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Speaker 1: half those parts aren't even used in cars anymore because

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Speaker 1: automotive technology has progressed. So there are many things like

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Speaker 1: that that need to be fixed, and I think everybody

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Speaker 1: is up to the idea of fixing them. Is currency

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Speaker 1: manipulation on the agenda and the negotiations with Canada and Mexico, Well,

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Speaker 1: neither Canada nor Mexico in my view, is a currency manipulator.

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Speaker 1: As you're aware, the Congress has specified that determining whether

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Speaker 1: currency is manipulated is the purview of Treasury, and Congress

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Speaker 1: has laid out very very specific tests to apply. Those

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Speaker 1: tests are applied twice a year, generally in April and October,

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Speaker 1: and very recently Treasury Secretary Manuchtion released the results of

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Speaker 1: this year and found that there are no currency manipulations.

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Speaker 1: That's quite different from the question are there misalignments. I

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Speaker 1: think the Mexican pace, so for example, has been very

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Speaker 1: weak against the dollar, partly out of concern that the

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Speaker 1: trade negotiations might go very badly. That lately has rallied some.

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Speaker 1: And my best guess is that once we have the

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Speaker 1: noon NAFTA, there's a pretty good chance that both the

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Speaker 1: Canadian and the Mexican currencies will strengthen because of removing

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Speaker 1: that uncertainty from their picture. So that's the way we're

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Speaker 1: looking at currency visa be these negotiations. We're speaking with

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Speaker 1: Wilver Rossi's US Converse Secretary for Television and Radio on Bloomberg.

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Speaker 1: So Mr Secretary, let's talk about one specific UH product,

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Speaker 1: and that is steel. UH. The administration has been quite

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Speaker 1: outspoken and I must say has taken some action on

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Speaker 1: steel that hasn't been taken a good long time. There

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Speaker 1: are various reports about what the approach to steal might be,

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Speaker 1: including the idea that perhaps there would be duty free

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Speaker 1: going up to a quota and then after that a

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Speaker 1: duty would kick in. Can you tell us what the

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Speaker 1: approach of the the Trump administration is right now to

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Speaker 1: steal employees? Well, it's right now our work in progress,

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Speaker 1: because we have not yet submitted our report from Commerce

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Speaker 1: to the President, nor has he had a chance therefore

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Speaker 1: to act upon it. But in general, enforcement has been

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Speaker 1: a very big hallmark of the present administration. We now

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Speaker 1: have in place a hundred sixty one trade cases which

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Speaker 1: have put either anti dumping or countervailing duties on steel

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Speaker 1: products from about thirty seven different countries. So this this

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Speaker 1: has been a very big problem, the problem of global

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Speaker 1: over capacity and more importantly, global overproduction. So the report

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Speaker 1: will address those issues, will address them in the context

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Speaker 1: of national security the to find the way that section

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Speaker 1: to thirty two defines it, which is a pretty broad definition,

428
00:27:07,880 --> 00:27:13,040
Speaker 1: including very strong reference to the needs of the economy.

429
00:27:13,119 --> 00:27:18,960
Speaker 1: So it will then perhaps make some specific recommendations as

430
00:27:19,000 --> 00:27:22,399
Speaker 1: to measures to deal with that, and those could range

431
00:27:22,480 --> 00:27:27,359
Speaker 1: from the ones you describe two more complicated ones. But

432
00:27:27,480 --> 00:27:30,679
Speaker 1: the real key will be what does the President ultimately

433
00:27:30,800 --> 00:27:35,159
Speaker 1: decide to do with the recommendations. He has announced that

434
00:27:35,200 --> 00:27:38,800
Speaker 1: he intends to take bold action. Mr Secretary, what I

435
00:27:38,840 --> 00:27:41,320
Speaker 1: just find puzzling is that U. S. Steel producers are

436
00:27:41,359 --> 00:27:43,680
Speaker 1: having trouble making money now even though you have severe

437
00:27:43,760 --> 00:27:49,040
Speaker 1: anti dumping tariffs of like triple digits. Uh currently, why

438
00:27:49,119 --> 00:27:51,399
Speaker 1: not just let it go? I mean, why you have

439
00:27:51,480 --> 00:27:53,879
Speaker 1: to simulate and user demand whether or not you do

440
00:27:53,920 --> 00:27:55,919
Speaker 1: anything about China which is having its own problems with

441
00:27:55,960 --> 00:27:58,880
Speaker 1: overcapacity and their own profits. So, how does it any

442
00:27:58,880 --> 00:28:05,600
Speaker 1: more tariffs fix that? Well, it's more complicated than just

443
00:28:06,040 --> 00:28:11,720
Speaker 1: tariffs under two thirty two. There's also the potential for quotas,

444
00:28:11,880 --> 00:28:15,760
Speaker 1: there's a potential for tariffreight quotas. They are all kinds

445
00:28:15,800 --> 00:28:20,000
Speaker 1: of potentials to be brought to bear. The reason that

446
00:28:20,080 --> 00:28:24,760
Speaker 1: the individual cases have been ineffective is that the w

447
00:28:25,040 --> 00:28:29,480
Speaker 1: t O, the World Trade Organization, rules are so precise

448
00:28:30,040 --> 00:28:34,080
Speaker 1: that you have to identify very clearly the product and

449
00:28:34,320 --> 00:28:38,240
Speaker 1: very clearly the place of origin. And what that means

450
00:28:38,440 --> 00:28:42,320
Speaker 1: is if I'm a serial dumper, of which there are

451
00:28:42,400 --> 00:28:45,840
Speaker 1: quite a few lurking out there. If I'm a serial dumper,

452
00:28:46,320 --> 00:28:49,920
Speaker 1: all I have to do is trendship it through another

453
00:28:50,000 --> 00:28:54,280
Speaker 1: country and I evade the duty or send it to

454
00:28:54,400 --> 00:28:59,480
Speaker 1: another country for further processing. However trivial that processing might

455
00:28:59,560 --> 00:29:03,720
Speaker 1: be or give it a little further processing in my

456
00:29:03,840 --> 00:29:08,480
Speaker 1: own country. So those trade cases help, but they have

457
00:29:09,120 --> 00:29:13,320
Speaker 1: not been able to cure the systemic problem. That's why

458
00:29:13,360 --> 00:29:18,040
Speaker 1: there are thirty seven different countries involved. The dumping of

459
00:29:18,480 --> 00:29:23,440
Speaker 1: steel from one country into another makes that second country

460
00:29:23,600 --> 00:29:27,440
Speaker 1: have excess capacity which they then dump, and then the

461
00:29:27,480 --> 00:29:32,360
Speaker 1: country they dump it into continues the saga. So one

462
00:29:32,680 --> 00:29:37,160
Speaker 1: ton of dump steel probably results in three or four

463
00:29:37,360 --> 00:29:42,560
Speaker 1: tons of dislocation in different markets throughout the world. The

464
00:29:42,640 --> 00:29:47,720
Speaker 1: two thirty two gives the potential for a broader solution

465
00:29:48,280 --> 00:29:54,760
Speaker 1: that is less geography dependent and less individual product dependent. Finally,

466
00:29:54,800 --> 00:29:58,720
Speaker 1: Mr Secretary, if we just read the newspapers or watched

467
00:29:58,800 --> 00:30:01,040
Speaker 1: the evening news, and that we would include that all

468
00:30:01,080 --> 00:30:04,280
Speaker 1: of Washington is consumed with investigations of various sorts and

469
00:30:04,360 --> 00:30:07,120
Speaker 1: lawyers going back and forth. Give us a peek inside

470
00:30:07,160 --> 00:30:10,200
Speaker 1: the administration. You've been called perhaps the most powerful Commerce

471
00:30:10,200 --> 00:30:12,480
Speaker 1: secretary in history. You have a lot in your agenda,

472
00:30:12,880 --> 00:30:15,080
Speaker 1: even as we've discussed, we've touched some of right now,

473
00:30:15,600 --> 00:30:18,480
Speaker 1: to what extent does this really impinge on your ability

474
00:30:18,480 --> 00:30:20,000
Speaker 1: to get your job done or a different way to

475
00:30:20,040 --> 00:30:24,840
Speaker 1: put it, how do you avoid it becoming a distraction. Well,

476
00:30:24,840 --> 00:30:29,080
Speaker 1: it's not a distraction at all. Um. I was in

477
00:30:29,280 --> 00:30:32,720
Speaker 1: Miami on Friday with the President when he made his

478
00:30:32,800 --> 00:30:38,400
Speaker 1: amazing announcement about how we're going to redo relationships with Cuba,

479
00:30:39,040 --> 00:30:44,520
Speaker 1: and it was more excitement than at most average campaign rallies.

480
00:30:44,640 --> 00:30:49,520
Speaker 1: It was a very heartwarming event, and especially because they

481
00:30:49,560 --> 00:30:53,240
Speaker 1: had on stage a man who when he was twelve

482
00:30:53,320 --> 00:30:59,320
Speaker 1: years old, his father was assassinated by the Castro regime

483
00:31:00,000 --> 00:31:03,600
Speaker 1: and shortly after that the regime figured out this little

484
00:31:03,640 --> 00:31:08,360
Speaker 1: boy was a child prodigy violinist, so they ordered him

485
00:31:08,400 --> 00:31:13,760
Speaker 1: to appear on some TV spectacular. The brave little boy refused,

486
00:31:14,240 --> 00:31:17,520
Speaker 1: so the next day the stormtroopers came to his house,

487
00:31:18,040 --> 00:31:21,080
Speaker 1: surrounded him and said, you a little boy, Now you

488
00:31:21,160 --> 00:31:24,200
Speaker 1: must play for us. You know what this boy did.

489
00:31:24,560 --> 00:31:28,520
Speaker 1: He played the star spangled banner, and that's what the

490
00:31:28,560 --> 00:31:32,400
Speaker 1: President had him play again on the stage in Miami.

491
00:31:32,920 --> 00:31:37,040
Speaker 1: It's one of the most heartwarming, heartrending tales I've seen

492
00:31:37,080 --> 00:31:41,320
Speaker 1: in a long time. President is going about his job,

493
00:31:41,680 --> 00:31:46,440
Speaker 1: which is managing the country. These investigations are something of

494
00:31:46,480 --> 00:31:49,280
Speaker 1: a side show. As far as I can see. There's

495
00:31:49,360 --> 00:31:54,320
Speaker 1: no there there. It's just kind of a series of

496
00:31:54,440 --> 00:31:59,680
Speaker 1: TV appearances by the various investigators, but there's been nothing

497
00:31:59,760 --> 00:32:03,240
Speaker 1: to engin will come to bear. And so in terms

498
00:32:03,280 --> 00:32:07,640
Speaker 1: of the overall picture, President is carrying out his program

499
00:32:07,720 --> 00:32:23,360
Speaker 1: than on commerce. We certainly are carrying out our program.

500
00:32:23,400 --> 00:32:26,280
Speaker 1: And now joining us a gentleman who had a job

501
00:32:27,280 --> 00:32:29,800
Speaker 1: in the locker room of the Pittsburgh Steelers and the

502
00:32:29,840 --> 00:32:33,000
Speaker 1: rest of his career was downhill from there. Michael Hayden

503
00:32:33,120 --> 00:32:36,200
Speaker 1: joins us. Of course, General Hayden is a former head

504
00:32:36,240 --> 00:32:40,280
Speaker 1: of the National Security Agency, Director of the National Security Agency.

505
00:32:40,360 --> 00:32:43,560
Speaker 1: I make just of his time with the Pittsburgh Steelers.

506
00:32:43,760 --> 00:32:45,920
Speaker 1: General very quickly, or what did you learn in the

507
00:32:45,960 --> 00:32:52,440
Speaker 1: Pittsburgh Steelers locker room before Ducane? Uh? The Steelers represent

508
00:32:52,560 --> 00:32:55,800
Speaker 1: the city almost perfectly, and the epic of the city

509
00:32:55,920 --> 00:32:59,320
Speaker 1: is the Lucar. Go to work, do your job, work hard.

510
00:32:59,760 --> 00:33:03,280
Speaker 1: And that's the way the Steelers operated as an organization,

511
00:33:03,760 --> 00:33:06,440
Speaker 1: and the reason they're so popular in Pittsburgh is that's

512
00:33:06,440 --> 00:33:09,600
Speaker 1: the way they operate on the field too. You know. Uh,

513
00:33:09,640 --> 00:33:11,600
Speaker 1: we have so many topics to speak of, and we

514
00:33:11,640 --> 00:33:14,040
Speaker 1: have a generous time with you this morning. Let me

515
00:33:14,120 --> 00:33:17,200
Speaker 1: speak with the uproar right now of a Commander in

516
00:33:17,280 --> 00:33:23,680
Speaker 1: chief abdicating decision making on the branches to the Secretary

517
00:33:23,720 --> 00:33:27,280
Speaker 1: of Defense, etcetera. UM, we've had strong language on this

518
00:33:27,360 --> 00:33:29,680
Speaker 1: show this morning that this is not appropriate. Do you

519
00:33:29,720 --> 00:33:33,320
Speaker 1: agree that President Trump must take a more direct interest

520
00:33:33,800 --> 00:33:38,920
Speaker 1: in the apportionment of our troops abroad? It would be

521
00:33:38,960 --> 00:33:41,960
Speaker 1: good if he took a more direct personal interest and

522
00:33:42,240 --> 00:33:45,200
Speaker 1: let me live you caution you can overachieve them that

523
00:33:45,760 --> 00:33:49,240
Speaker 1: and try to make tactical decisions from the White House,

524
00:33:49,280 --> 00:33:53,520
Speaker 1: which was a complaint sometimes against the Obama administration. So yeah,

525
00:33:53,600 --> 00:33:57,000
Speaker 1: I think you should so show more interest, but be

526
00:33:57,080 --> 00:34:00,880
Speaker 1: very clear to make no mistake. This is his re sponsibility.

527
00:34:01,440 --> 00:34:06,400
Speaker 1: Don't care Secretary Mattos picks the final number. This is

528
00:34:06,440 --> 00:34:10,600
Speaker 1: the President's number, and he will have to live and

529
00:34:10,680 --> 00:34:15,600
Speaker 1: we should expect him to live with the consequences. General,

530
00:34:15,680 --> 00:34:17,560
Speaker 1: talk to me a little bit about Jim Comey. So

531
00:34:17,800 --> 00:34:20,399
Speaker 1: you you know him? How well do you know him?

532
00:34:20,440 --> 00:34:26,000
Speaker 1: I do? Yes, Um, we had fairly frequent contact in

533
00:34:26,040 --> 00:34:28,560
Speaker 1: the Bush of sation. It would have been oh four,

534
00:34:28,880 --> 00:34:33,400
Speaker 1: oh five, oh six. Um, he was the Deputy Attorney

535
00:34:33,440 --> 00:34:36,239
Speaker 1: General at the time. Do not routine, but we knew

536
00:34:36,360 --> 00:34:39,160
Speaker 1: one another. In fact, have a bit of a history

537
00:34:39,520 --> 00:34:42,040
Speaker 1: on different sides of an issue with regard to the

538
00:34:42,080 --> 00:34:48,600
Speaker 1: president's surveillance program. But you know, Jim was tough, well informed,

539
00:34:49,080 --> 00:34:52,480
Speaker 1: and only ethical. You're probably closer to the story than

540
00:34:52,880 --> 00:34:55,279
Speaker 1: most of us. So how do you see this investigation

541
00:34:55,320 --> 00:34:58,600
Speaker 1: into Russia unfolding? You think more people will be called

542
00:34:58,640 --> 00:35:01,239
Speaker 1: to testify and actually, how long does it take to

543
00:35:01,320 --> 00:35:07,279
Speaker 1: do this investigation and follow up testimonies? Well, the good

544
00:35:07,280 --> 00:35:10,600
Speaker 1: news is Bob Mueller is going to conduct an exhaustive

545
00:35:10,640 --> 00:35:14,759
Speaker 1: investigation and so he's gonna touch everyone in any way,

546
00:35:14,840 --> 00:35:18,640
Speaker 1: shape or form related. The bad news is and Sary

547
00:35:18,719 --> 00:35:22,040
Speaker 1: reports this that's time is gonna take a year or

548
00:35:22,080 --> 00:35:24,279
Speaker 1: a year and a half, and so we're gonna have

549
00:35:24,360 --> 00:35:28,319
Speaker 1: that kind of hanging over us. And you ask where

550
00:35:28,320 --> 00:35:31,799
Speaker 1: do I think this ends up? I think it ends

551
00:35:31,840 --> 00:35:37,160
Speaker 1: up in a clown. It's in there. Of course there

552
00:35:37,320 --> 00:35:40,799
Speaker 1: was collaboration. You're gonna find evidence if you go in

553
00:35:40,840 --> 00:35:44,000
Speaker 1: there and thinking no, no way, you're gonna find a

554
00:35:44,080 --> 00:35:46,960
Speaker 1: lack of evidence. And this is gonna roman a question

555
00:35:47,000 --> 00:35:49,920
Speaker 1: mark over the country. I I'm afraid general, we want

556
00:35:49,960 --> 00:35:52,880
Speaker 1: to come back and talk about the immediate uh moments

557
00:35:52,960 --> 00:35:57,640
Speaker 1: of cybersecurity and issues I guess of espionage and intelligence.

558
00:35:58,080 --> 00:36:00,840
Speaker 1: But I guess you didn't fly a Beach twenty nine bomber.

559
00:36:00,920 --> 00:36:02,720
Speaker 1: You came out of the Air Force in the nineteen

560
00:36:03,400 --> 00:36:06,120
Speaker 1: sixty nine. What was your response when you heard that

561
00:36:06,160 --> 00:36:08,880
Speaker 1: the US jetted had shot a Syrian jet out of

562
00:36:08,960 --> 00:36:16,239
Speaker 1: the skies over the weekend? Yeah, not unexpected. That's a

563
00:36:16,280 --> 00:36:22,080
Speaker 1: crowded battle space and what's happening. And there were two

564
00:36:22,080 --> 00:36:26,720
Speaker 1: wars going on, the Russian the Iranians, the Syrians fighting

565
00:36:26,760 --> 00:36:29,560
Speaker 1: the Syrian opposition that was kind of the west of

566
00:36:29,560 --> 00:36:32,839
Speaker 1: the country, and then we were fighting Ice and they

567
00:36:32,840 --> 00:36:37,160
Speaker 1: were obviously related, but you could separate them. Now that

568
00:36:37,200 --> 00:36:42,919
Speaker 1: we've got isis on their back foot. Well, we're getting

569
00:36:42,960 --> 00:36:44,560
Speaker 1: some break up there with Generator and we'll try to

570
00:36:44,600 --> 00:36:47,440
Speaker 1: get a better connection. Uh there in a moment. We're

571
00:36:47,480 --> 00:36:51,480
Speaker 1: speaking with Michael Hayden, forcedtar general and former director of

572
00:36:51,520 --> 00:36:54,160
Speaker 1: the National Security Agency this morning. We'll see what we

573
00:36:54,160 --> 00:36:56,200
Speaker 1: can do to get that hooked up again. That may

574
00:36:56,200 --> 00:36:58,240
Speaker 1: be in the in the day of the modern cell phone,

575
00:36:58,840 --> 00:37:03,319
Speaker 1: that can be a challenge with all that technology. General, Hey,

576
00:37:03,520 --> 00:37:07,200
Speaker 1: how is the n S a different now than it

577
00:37:07,360 --> 00:37:12,200
Speaker 1: was on your tour of duty? Well, it's kind of

578
00:37:12,239 --> 00:37:15,880
Speaker 1: continue the trendline we knew was going to be there

579
00:37:15,880 --> 00:37:19,040
Speaker 1: when I was there, and that's moving in the direction

580
00:37:19,760 --> 00:37:23,719
Speaker 1: of well, letting to explain the dilemma. We're going through

581
00:37:23,760 --> 00:37:27,879
Speaker 1: a world in which signals intelligence, which is accepting communications,

582
00:37:28,560 --> 00:37:33,319
Speaker 1: was too too little, too hard to get to a

583
00:37:33,400 --> 00:37:37,200
Speaker 1: world in which the communications are there are too much,

584
00:37:37,680 --> 00:37:41,799
Speaker 1: too hard to understand. And we moves keep moving in

585
00:37:41,800 --> 00:37:45,680
Speaker 1: that direction of too much, too hard to understand. And

586
00:37:45,760 --> 00:37:50,560
Speaker 1: so it's the volume of modern communications that most challenges

587
00:37:50,800 --> 00:37:56,360
Speaker 1: n A plus the availability of high end encryption around

588
00:37:56,400 --> 00:37:59,560
Speaker 1: the world, which makes it hard for the agency to

589
00:37:59,600 --> 00:38:03,960
Speaker 1: do the up not for us for sixty years without

590
00:38:04,000 --> 00:38:07,839
Speaker 1: giving away the trade secrets. How do you respond to

591
00:38:07,960 --> 00:38:12,000
Speaker 1: someone from the public saying, people like you general could

592
00:38:12,000 --> 00:38:14,520
Speaker 1: tell what we're doing on our cell phones. Are we

593
00:38:14,640 --> 00:38:19,600
Speaker 1: that vulnerable to intelligence communities? Can they just quote unquote

594
00:38:19,680 --> 00:38:25,759
Speaker 1: tap right into our conversations? The threat you just described

595
00:38:26,360 --> 00:38:29,920
Speaker 1: isn't one that our citizens should feel for the American

596
00:38:30,080 --> 00:38:34,360
Speaker 1: intelligence community that said there there are other intelligence or

597
00:38:34,360 --> 00:38:36,319
Speaker 1: inventions are on the world that have got at what

598
00:38:36,400 --> 00:38:41,520
Speaker 1: they do and what you describe is technically possible. Our

599
00:38:42,120 --> 00:38:46,200
Speaker 1: intelligence is controlled by law, controlled by oversight, controlled by

600
00:38:46,200 --> 00:38:49,839
Speaker 1: a by a culture of deep perspective to the Furth

601
00:38:49,920 --> 00:38:54,279
Speaker 1: Amendment about unreasonable search and seizure. And so although you

602
00:38:54,280 --> 00:38:57,000
Speaker 1: get some imedgining issues and more nos, Congress are going

603
00:38:57,000 --> 00:39:00,399
Speaker 1: to debate one of those later this summer. That's good

604
00:39:00,560 --> 00:39:04,399
Speaker 1: to American privacy is not from American intelligence. It's from

605
00:39:04,440 --> 00:39:07,680
Speaker 1: foreign intelligence services. And can I just add from the

606
00:39:07,680 --> 00:39:11,319
Speaker 1: commercial sector that does gather a bunch of information on

607
00:39:11,400 --> 00:39:15,640
Speaker 1: each and every one of us for their own commercial needs. Yeah,

608
00:39:15,640 --> 00:39:18,480
Speaker 1: and that's something that certainly food for thought. General, Can

609
00:39:18,560 --> 00:39:21,880
Speaker 1: you talk to us a little bit about intelligence sharing

610
00:39:21,960 --> 00:39:26,320
Speaker 1: with foreign entities In the wake of the Manchester attacks,

611
00:39:26,320 --> 00:39:28,640
Speaker 1: there were questions here in the UK about whether the

612
00:39:28,719 --> 00:39:32,440
Speaker 1: UK should really give files to certain entities in the US.

613
00:39:33,080 --> 00:39:38,719
Speaker 1: Is that a dangerous mindset? It is? And um I

614
00:39:38,920 --> 00:39:43,359
Speaker 1: was request say uh for just under three years. And

615
00:39:43,480 --> 00:39:48,400
Speaker 1: in that time I went and visited about fifty countries

616
00:39:48,920 --> 00:39:51,960
Speaker 1: and that that was an espionage tourism. I went to

617
00:39:52,080 --> 00:39:55,080
Speaker 1: those countries because we considered each and every one of

618
00:39:55,120 --> 00:39:59,080
Speaker 1: them to be partners with US, and we shared information,

619
00:39:59,520 --> 00:40:05,120
Speaker 1: frankly with with countries that might supprise the general American population,

620
00:40:05,200 --> 00:40:08,680
Speaker 1: because you know, intelligence services have a lot in common,

621
00:40:09,160 --> 00:40:13,480
Speaker 1: even when their political systems that they serve might be

622
00:40:13,640 --> 00:40:16,279
Speaker 1: arguing with one another. Now, the tightest relationship we have

623
00:40:17,160 --> 00:40:20,200
Speaker 1: is what the google countries we called the Five Eyes ourselves,

624
00:40:20,239 --> 00:40:24,000
Speaker 1: the British, the Canadians, Australians, and the New Zealanders. And

625
00:40:24,040 --> 00:40:26,839
Speaker 1: they're particularly in the kind of work that n s

626
00:40:26,840 --> 00:40:31,040
Speaker 1: A does. They're almost inseparable. And so I know we

627
00:40:31,120 --> 00:40:34,799
Speaker 1: had some rough water here after the Manchester event, that

628
00:40:35,000 --> 00:40:37,759
Speaker 1: I think we held that pretty quickly because all these

629
00:40:37,800 --> 00:40:42,080
Speaker 1: countries depend on the others. What do you think the

630
00:40:42,120 --> 00:40:45,440
Speaker 1: Trump administration's message to NATO should be. I know there

631
00:40:45,480 --> 00:40:47,959
Speaker 1: was a lot of talk when President Trump came here

632
00:40:48,080 --> 00:40:50,080
Speaker 1: about the fact that their allies, but he did not

633
00:40:50,320 --> 00:40:56,560
Speaker 1: mention Article five. Is that just noise for nothing? Well, no,

634
00:40:56,719 --> 00:40:59,800
Speaker 1: that that that's real and it has a political effect.

635
00:41:00,440 --> 00:41:02,680
Speaker 1: And I wish some of the things that, frankly wish

636
00:41:02,719 --> 00:41:04,279
Speaker 1: all of the things you were saying, and some other

637
00:41:04,360 --> 00:41:08,759
Speaker 1: things too weren't happening. But I have found in my

638
00:41:08,800 --> 00:41:12,359
Speaker 1: life experience and this this is a bright spot. The

639
00:41:12,400 --> 00:41:17,640
Speaker 1: deepest keel on our relationship with other nations is almost

640
00:41:17,680 --> 00:41:21,600
Speaker 1: always intelligence. It's it's the part of the ship that

641
00:41:21,760 --> 00:41:24,319
Speaker 1: keeps the rest of the ship more steady than it

642
00:41:24,320 --> 00:41:28,359
Speaker 1: would otherwise be. So although that behavior you described as bad,

643
00:41:28,760 --> 00:41:32,319
Speaker 1: how it's just the political level doesn't help intelligence. I

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Speaker 1: also believe that our intelligence relationships are are actually quite

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Speaker 1: stable general. The time that we've got left with you,

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Speaker 1: you had a wonderful moment uh in an auditorium named

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Speaker 1: after a half Arnold, I believe, out at the Colorado

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Speaker 1: Springs Academy of the Air Force, where you spoke to

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Speaker 1: a bunch of cadets in January of this year. What

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Speaker 1: did you tell the young cadets? Uh? You know, in

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Speaker 1: the media, I think we're so distorted with the news

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Speaker 1: slow military. What did you tell the troops sitting in

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Speaker 1: the half Arnold auditorium? I was honored they were giving

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Speaker 1: me an award for leadership, uh, And I had a

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Speaker 1: chance to talk to actually half of the core candets.

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Speaker 1: And that's a really big crowd, and its fundamentally what

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Speaker 1: I said to them was you work hard, do your job,

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Speaker 1: but be a technical expert. But the more senior you get,

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Speaker 1: the hiring rank you achieve, the less you're going to

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Speaker 1: rely on Any professional expertise at the Air Force has

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Speaker 1: taught you and the more you're going to rely on

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Speaker 1: what you learned at home, at church, from your mom

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Speaker 1: and dad, from your neighbors, the basic values that that

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Speaker 1: creates American society. And at one point you get promoted

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Speaker 1: for doing things right. At a certain point, you get

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Speaker 1: promoted for doing the right things'll generated. Let's leave it there.

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Speaker 1: Michael Hay, the former director of the n s A

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Speaker 1: from Vacaine and of course the director of the Central

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Speaker 1: Intelligence Agency at one point as well. Thanks for listening

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Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews

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00:43:19,440 --> 00:43:24,520
Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

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00:43:25,080 --> 00:43:28,160
Speaker 1: I'm on Twitter at Tom Keene. David Gura is at

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Speaker 1: David Gura. Before the podcast, you can always catch us worldwide.

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Speaker 1: I'm Bloomberg Radio. Runt You by Bank of America Mary Lynch.

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Speaker 1: With virtual reality, virtually everything will change. Discover opportunities in

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Speaker 1: a transforming world. Be of a mL dot Com, slash VR,

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00:43:58,880 --> 00:44:01,840
Speaker 1: Mary Lynch, Pierce, Uner and Smith Incorporated,