1 00:00:03,200 --> 00:00:06,600 Speaker 1: This is Bloomberg surveillance. I'm not sure that I agree 2 00:00:06,640 --> 00:00:09,040 Speaker 1: that there are signs in Europe of economic strength. There 3 00:00:09,039 --> 00:00:12,160 Speaker 1: are signs in the United States. Perhaps there's no free 4 00:00:12,240 --> 00:00:16,599 Speaker 1: lance iconic higher wages and maintained profit margins and keep 5 00:00:16,680 --> 00:00:20,440 Speaker 1: low inflation. The economy has not been very evenly distributed 6 00:00:20,560 --> 00:00:23,960 Speaker 1: than the people left behind have been really more or 7 00:00:24,040 --> 00:00:28,320 Speaker 1: less the middle class and lower middle class people. Bloomberg surveillance. 8 00:00:28,560 --> 00:00:32,080 Speaker 1: You're linked to the world of economics, finance, and investment 9 00:00:32,320 --> 00:00:37,199 Speaker 1: on Bloomberg Radio. Good Morning and uh T G I 10 00:00:37,320 --> 00:00:39,559 Speaker 1: F I Michael McKay along with Tom Keene. It is 11 00:00:39,600 --> 00:00:43,559 Speaker 1: seven am on Wall Street, one pm in Frankfurt, the 12 00:00:43,640 --> 00:00:47,519 Speaker 1: day after drug and it is a very different day, indeed, 13 00:00:47,560 --> 00:00:50,120 Speaker 1: shaking off yesterday's disappointed in the e c B, or 14 00:00:50,600 --> 00:00:53,640 Speaker 1: perhaps just a more sober view of what drug hath wrought. 15 00:00:53,680 --> 00:00:58,120 Speaker 1: We are seeing major market moves today. European stocks soaring, 16 00:00:58,240 --> 00:01:01,360 Speaker 1: the stock six hundered up seven points two point one percent. 17 00:01:01,800 --> 00:01:05,080 Speaker 1: Right now in Germany the docks two hundred and fifty 18 00:01:05,120 --> 00:01:10,080 Speaker 1: nine points higher two point seven percent. Bond yields curves 19 00:01:10,080 --> 00:01:13,360 Speaker 1: are flattening across Europe. The German two year yield is 20 00:01:13,400 --> 00:01:16,680 Speaker 1: now a negative forty six basis points. It was negative 21 00:01:16,840 --> 00:01:21,480 Speaker 1: fifty seven on Tuesday, and the euro still stronger one 22 00:01:21,600 --> 00:01:26,280 Speaker 1: eleven oh five, but down about seven tenths of eight 23 00:01:26,319 --> 00:01:30,400 Speaker 1: percent from yesterday. Here in the US, futures are also soaring, 24 00:01:30,560 --> 00:01:34,119 Speaker 1: SMP evening futures of eighteen points nine tenths, DOWI meeting 25 00:01:34,120 --> 00:01:36,319 Speaker 1: futures of eight tens a hundred and thirty nine points 26 00:01:36,360 --> 00:01:40,199 Speaker 1: in NASDAC one futures forty seven points higher one point 27 00:01:40,280 --> 00:01:45,440 Speaker 1: one percent. Bonds are little changed in the United States, 28 00:01:45,480 --> 00:01:48,680 Speaker 1: but they are significantly higher than at this time yesterday morning. 29 00:01:48,960 --> 00:01:50,560 Speaker 1: The tenure note yield is all the way up to 30 00:01:50,600 --> 00:01:53,400 Speaker 1: one point nine five percent, five year one point for 31 00:01:53,760 --> 00:01:57,400 Speaker 1: seven percent, and the two year ninety four basis points, 32 00:01:57,840 --> 00:02:00,480 Speaker 1: quite a difference over the last few days. The dollar 33 00:02:00,640 --> 00:02:04,200 Speaker 1: index is stronger today, but way down from yesterday. At 34 00:02:04,200 --> 00:02:07,400 Speaker 1: this time it's ninety six point five five one, so 35 00:02:07,440 --> 00:02:10,840 Speaker 1: the dollar is weaker still on the back of the ECB. 36 00:02:11,080 --> 00:02:13,960 Speaker 1: Part of what's happening maybe less ECB and more oil. 37 00:02:14,320 --> 00:02:19,440 Speaker 1: Oil prices considerably firmer West Texas seventy three nine cents 38 00:02:19,520 --> 00:02:23,600 Speaker 1: higher two point four percent Brent crude it got over 39 00:02:23,639 --> 00:02:26,000 Speaker 1: forty one earlier this morning, we'll see if it can 40 00:02:26,160 --> 00:02:28,200 Speaker 1: make it there and hold that it's one point eight 41 00:02:28,280 --> 00:02:34,040 Speaker 1: percent higher right now, maybe helping. Also the International Energy Agency, 42 00:02:34,040 --> 00:02:37,560 Speaker 1: did you see this story saying prices may indeed have bottomed, 43 00:02:37,800 --> 00:02:41,440 Speaker 1: putting a floor under oil at least for the moment. 44 00:02:42,160 --> 00:02:45,320 Speaker 1: With drogg E done, that's the comedy hour. That's the 45 00:02:45,360 --> 00:02:49,040 Speaker 1: comedy hour today. Although you know, we had an agreement 46 00:02:49,040 --> 00:02:53,600 Speaker 1: between Saudi Arabia and Russia to freeze oil production that 47 00:02:53,680 --> 00:02:57,640 Speaker 1: had nothing to it and it seems to have worked. 48 00:02:58,080 --> 00:03:01,799 Speaker 1: So you know, Tom advice would be from the Wizard 49 00:03:01,840 --> 00:03:05,080 Speaker 1: of Oz. Don't look shout out this morning to Adam Seminski. 50 00:03:05,120 --> 00:03:07,480 Speaker 1: You used to hold court at Peter Hooper's Deutsche Bank 51 00:03:07,960 --> 00:03:12,000 Speaker 1: on oil and he was so cynical about what big 52 00:03:12,040 --> 00:03:17,519 Speaker 1: institutions say about hydrocarbons. Well, um, what they say and 53 00:03:17,680 --> 00:03:20,280 Speaker 1: what they and what hydrocarbons are doing this morning match 54 00:03:20,320 --> 00:03:23,600 Speaker 1: and we'll just since it's Friday, we'll leave it at that. Uh, 55 00:03:23,639 --> 00:03:25,880 Speaker 1: with dragging down, attention is turning down to the Bank 56 00:03:25,919 --> 00:03:29,160 Speaker 1: of Japan on Monday, the Fed on Wednesday. Larry Lindsay 57 00:03:29,200 --> 00:03:31,880 Speaker 1: is a former FED governor now President of the Lindsay Group. 58 00:03:31,880 --> 00:03:34,920 Speaker 1: He is a prolific author as a new book out 59 00:03:34,920 --> 00:03:37,000 Speaker 1: Conspiracies of the Ruling Class, And we want to ask 60 00:03:37,000 --> 00:03:39,000 Speaker 1: you about that in a moment. But if I might, 61 00:03:39,120 --> 00:03:42,640 Speaker 1: the FED, they may fit into your ruling class definition, 62 00:03:43,280 --> 00:03:47,280 Speaker 1: your assessment of monetary policy and what central banks, including ours, 63 00:03:47,400 --> 00:03:53,440 Speaker 1: should be doing at this point. Well, Uh, the FED 64 00:03:53,520 --> 00:03:56,680 Speaker 1: has definitely been involved in the part of the ruling class, 65 00:03:56,720 --> 00:03:59,000 Speaker 1: There's no doubt about it. I think the issue is 66 00:03:59,040 --> 00:04:01,760 Speaker 1: going to be going for word, Uh, how are they 67 00:04:01,760 --> 00:04:04,520 Speaker 1: going to dig themselves out of a fairly deep hole. 68 00:04:05,080 --> 00:04:06,920 Speaker 1: The way we got in the hole was we had 69 00:04:06,960 --> 00:04:09,840 Speaker 1: to do some experimentation in order to figure out how 70 00:04:09,920 --> 00:04:14,839 Speaker 1: to uh deal with the last crash. Uh. We did 71 00:04:14,840 --> 00:04:17,440 Speaker 1: the experimentation, but no one ever thought about an exit 72 00:04:17,560 --> 00:04:20,800 Speaker 1: strategy when they were marching in. And I think it's 73 00:04:20,800 --> 00:04:23,840 Speaker 1: gonna be very difficult. My preference, I think, would be 74 00:04:23,920 --> 00:04:27,000 Speaker 1: to begin to run off the balance sheet before they 75 00:04:27,080 --> 00:04:29,640 Speaker 1: raise rates. If I were running a four trillion dollar 76 00:04:29,680 --> 00:04:33,520 Speaker 1: hedge fund, I definitely would liquidate my positions before I 77 00:04:33,560 --> 00:04:37,080 Speaker 1: sent their price down. But you know, the FED has 78 00:04:37,080 --> 00:04:40,039 Speaker 1: a very difficult challenge. I do not think that they're 79 00:04:40,040 --> 00:04:42,040 Speaker 1: going to raise next week. I don't think they're going 80 00:04:42,080 --> 00:04:46,479 Speaker 1: to raise until probably December at the earliest. We have 81 00:04:46,680 --> 00:04:48,839 Speaker 1: this is this is a high risk time to to 82 00:04:48,920 --> 00:04:52,440 Speaker 1: do it. It's high rist time economically. Uh. And when 83 00:04:52,520 --> 00:04:54,960 Speaker 1: you have a high risk time economically and the year 84 00:04:55,040 --> 00:04:57,600 Speaker 1: is divisible by four, you also have a high risk 85 00:04:57,680 --> 00:05:00,680 Speaker 1: time politically. Uh. There does see to be a feeling 86 00:05:00,680 --> 00:05:03,000 Speaker 1: that inflation is picking up. You look at the corporate 87 00:05:03,120 --> 00:05:08,800 Speaker 1: moving higher. We have the Phillips curve in action is 88 00:05:09,160 --> 00:05:12,440 Speaker 1: you know, the lower unemployment rate may be starting to 89 00:05:12,480 --> 00:05:18,000 Speaker 1: have an effect on wages. So why December. Well, there's 90 00:05:18,080 --> 00:05:20,839 Speaker 1: there's two pieces to this. First of all, yes, of 91 00:05:20,880 --> 00:05:24,040 Speaker 1: course inflation is going to move up. We had if 92 00:05:24,040 --> 00:05:27,440 Speaker 1: you simply were to take out the decline in energy 93 00:05:27,440 --> 00:05:30,640 Speaker 1: and commodities large which largely happened in the first half 94 00:05:30,720 --> 00:05:34,680 Speaker 1: of last year, you get a basically one point seven 95 00:05:34,760 --> 00:05:38,839 Speaker 1: percent inflation rate. You add any kind of tighter labor 96 00:05:38,880 --> 00:05:41,360 Speaker 1: market to that, and you're you're going to be by 97 00:05:41,360 --> 00:05:44,600 Speaker 1: the end of this year at are probably over two percent. 98 00:05:45,120 --> 00:05:49,200 Speaker 1: And UH, wage inflation is happening. Uh. It's not rampant 99 00:05:49,200 --> 00:05:52,320 Speaker 1: wage inflation, but it's clear that labor is gaining a 100 00:05:52,360 --> 00:05:56,680 Speaker 1: share of the pie. Productivity is negative. Workers are getting 101 00:05:57,320 --> 00:06:01,960 Speaker 1: nominal wage hikes that are far higher than the added 102 00:06:02,000 --> 00:06:04,200 Speaker 1: value of output that they're putting out. So the share 103 00:06:04,240 --> 00:06:07,760 Speaker 1: of compensations going to workers that is going to ultimately 104 00:06:07,760 --> 00:06:10,599 Speaker 1: put some pressure on prices. So yes, I think the 105 00:06:10,640 --> 00:06:14,159 Speaker 1: inflation dynamic has started. On the other hand, we still 106 00:06:14,160 --> 00:06:15,840 Speaker 1: have a high risk world, and I think the Fed 107 00:06:15,920 --> 00:06:20,160 Speaker 1: is going to be cautious um when they move Larry, 108 00:06:20,160 --> 00:06:21,360 Speaker 1: I want to get back to the book if I 109 00:06:21,400 --> 00:06:24,839 Speaker 1: could first, So, folks, Bloomberg Surveillance is Friday brought you 110 00:06:24,880 --> 00:06:28,839 Speaker 1: by Investco looking for investment views. Experienced experts are just 111 00:06:28,920 --> 00:06:32,200 Speaker 1: to click away. Go to investco dot com slash us 112 00:06:32,320 --> 00:06:36,400 Speaker 1: to subscribe to the investco blog, and follow at investco 113 00:06:37,080 --> 00:06:42,960 Speaker 1: us on Twitter. Conspiracies of the Ruling Class, Lawrence B. Lindsay, 114 00:06:43,040 --> 00:06:46,239 Speaker 1: and You've gotta love Larry, how you start the book. 115 00:06:46,600 --> 00:06:49,320 Speaker 1: I mean, I have no clue how you time this puppy. 116 00:06:49,640 --> 00:06:52,960 Speaker 1: The American public is angry. Did you know we'd be 117 00:06:53,080 --> 00:06:57,960 Speaker 1: Trump and Sanders when you wrote this book? Well, it was. 118 00:06:59,440 --> 00:07:02,919 Speaker 1: It was looking worse and worse. Actually, at the beginning 119 00:07:02,960 --> 00:07:09,039 Speaker 1: of we wrote that Jeff Bush and Hillary Clinton were 120 00:07:09,520 --> 00:07:12,480 Speaker 1: not the key to their parties that you should look 121 00:07:12,480 --> 00:07:16,040 Speaker 1: at Elizabeth Warren and Ran Paul instead. And I think 122 00:07:16,240 --> 00:07:19,320 Speaker 1: some people out there, uh might risk might wish that 123 00:07:19,360 --> 00:07:22,480 Speaker 1: we actually had Brandon Elizabeth and who we ended up with. 124 00:07:22,640 --> 00:07:25,080 Speaker 1: You take this back, folks. And the only reason to 125 00:07:25,120 --> 00:07:28,280 Speaker 1: read this book is page forty three where Larry Lindsey 126 00:07:28,440 --> 00:07:31,760 Speaker 1: kills it. I'm Thomas Hobbs and John Locke. It's it's 127 00:07:31,880 --> 00:07:34,920 Speaker 1: great that he does that in frames how we got 128 00:07:34,960 --> 00:07:38,440 Speaker 1: to an elite world? When did this start in America? 129 00:07:38,640 --> 00:07:40,760 Speaker 1: Is it a new thing or we've been doing this 130 00:07:40,840 --> 00:07:44,600 Speaker 1: since time began? Well, you know the Hobbs Lock controversy. 131 00:07:44,920 --> 00:07:47,760 Speaker 1: You know, Lock won the American Revolution, right, That's really 132 00:07:47,760 --> 00:07:50,960 Speaker 1: what it was all about. And um and and they 133 00:07:51,280 --> 00:07:54,520 Speaker 1: designed it so that we would have as a Lock world, 134 00:07:54,520 --> 00:07:58,520 Speaker 1: hopefully forever. But around the turn of the century, a 135 00:07:58,600 --> 00:08:01,720 Speaker 1: new group emerged that would think of his intellectually elite. 136 00:08:01,920 --> 00:08:05,320 Speaker 1: I mean, one of the keys to the ruling class 137 00:08:05,480 --> 00:08:08,040 Speaker 1: is that they think they know how to run your 138 00:08:08,120 --> 00:08:10,880 Speaker 1: life better than you. So you're pining this Woodrow Wilson, 139 00:08:11,800 --> 00:08:15,160 Speaker 1: It really is. Wilson really started it. And uh, you know, 140 00:08:15,200 --> 00:08:18,080 Speaker 1: we we quote Wilson a lot of the book uh 141 00:08:18,280 --> 00:08:21,440 Speaker 1: I uh, you know he he isn't the hero when 142 00:08:21,440 --> 00:08:23,840 Speaker 1: you actually read what he wrote that we were taught 143 00:08:23,880 --> 00:08:26,840 Speaker 1: at school. Um. But you know, Wilson really didn't like 144 00:08:26,880 --> 00:08:32,600 Speaker 1: the American system. Uh. He wanted experts to run the country. Uh. 145 00:08:32,600 --> 00:08:36,960 Speaker 1: He wanted to dispense basically with separation of powers. And 146 00:08:37,000 --> 00:08:40,280 Speaker 1: he just was, you know, into efficiency and efficiency and 147 00:08:40,360 --> 00:08:44,520 Speaker 1: imposing his worldview. And uh, you know that got deeper 148 00:08:44,520 --> 00:08:48,240 Speaker 1: and deeper as the century war on. And now we're 149 00:08:48,240 --> 00:08:51,920 Speaker 1: at the point where the way the country functions actually 150 00:08:51,920 --> 00:08:55,080 Speaker 1: is the opposite of what the constitution says. We have 151 00:08:55,200 --> 00:08:59,920 Speaker 1: experts making decisions and not elected representatives. I mean one, 152 00:08:59,400 --> 00:09:02,360 Speaker 1: um on. One great example that everyone here is familiar 153 00:09:02,360 --> 00:09:07,320 Speaker 1: with who's listening is what the SCC did with the Internet. Now, 154 00:09:07,760 --> 00:09:10,400 Speaker 1: I'm not taking a position on whether regulation is a 155 00:09:10,400 --> 00:09:11,840 Speaker 1: good thing or a bad thing. I'm just looking at 156 00:09:11,840 --> 00:09:14,600 Speaker 1: it from a democratic point of view. Imagine you had 157 00:09:14,720 --> 00:09:20,320 Speaker 1: five unelected people vote three to two that they could 158 00:09:20,400 --> 00:09:24,400 Speaker 1: now regulate the Internet. They didn't ask the Congress, they 159 00:09:24,400 --> 00:09:28,120 Speaker 1: simply gave it to themselves. Again, not the merits of 160 00:09:28,160 --> 00:09:32,280 Speaker 1: the regulation, but think about the democratic process that's involved. 161 00:09:32,760 --> 00:09:35,480 Speaker 1: That certainly is not like the way the Constitution was written. 162 00:09:35,679 --> 00:09:37,760 Speaker 1: But it's more typical of the way things are now. 163 00:09:38,240 --> 00:09:41,680 Speaker 1: And uh, you know that really conveys a sense of 164 00:09:41,760 --> 00:09:44,080 Speaker 1: arrogance on the part of the people in charge that 165 00:09:44,120 --> 00:09:46,439 Speaker 1: they don't even have to ask the people's representatives to 166 00:09:46,480 --> 00:09:50,080 Speaker 1: do something like that. When you say them from a 167 00:09:50,080 --> 00:09:53,479 Speaker 1: democratic point of view, you're you're talking small d democratic. 168 00:09:53,559 --> 00:09:57,040 Speaker 1: Oh absolutely, it's basically from basic philosophy or or following 169 00:09:57,040 --> 00:10:00,800 Speaker 1: the rule of law. Another example, the Clean Water says 170 00:10:01,240 --> 00:10:06,240 Speaker 1: that the e p A can regulate navigable bodies of water. Now, 171 00:10:06,800 --> 00:10:09,600 Speaker 1: you and I and everybody listening knows what the word 172 00:10:09,720 --> 00:10:12,559 Speaker 1: navigable means. It means something you can navigate. I put 173 00:10:12,559 --> 00:10:14,840 Speaker 1: a boat on and drive it around. Well, the EPA 174 00:10:14,960 --> 00:10:19,360 Speaker 1: decided that was far too restrictive, so they've defined what 175 00:10:19,400 --> 00:10:23,200 Speaker 1: they could regulate as any standing body of water. It 176 00:10:23,240 --> 00:10:25,120 Speaker 1: doesn't need have to be around for twelve months. Larry, 177 00:10:25,120 --> 00:10:27,280 Speaker 1: We're gonna come to sit there, Larry Lindsay, with us 178 00:10:27,280 --> 00:10:30,400 Speaker 1: in Washington with FM. We said good morning to all 179 00:10:30,840 --> 00:10:34,240 Speaker 1: in Washington. This is an a political book, the Republican, Lindsay, 180 00:10:34,400 --> 00:10:39,240 Speaker 1: going after everybody in conspiracies of the ruling class. How 181 00:10:39,280 --> 00:10:44,000 Speaker 1: to break their grip forever. It's an interesting book, very timely, 182 00:10:44,040 --> 00:10:46,840 Speaker 1: to say the least, Larry Lindsay and we will continue 183 00:10:46,960 --> 00:10:53,960 Speaker 1: Futures up eighteen. Let's check it now with Michael Baron. 184 00:10:54,040 --> 00:10:56,559 Speaker 1: Get the latest World of national headlines. Mike Tom, thank 185 00:10:56,600 --> 00:10:59,959 Speaker 1: you very much. Republican presidential candidates will fan out today 186 00:11:00,080 --> 00:11:03,560 Speaker 1: ahead of Tuesday's primaries in five states. Up for grabs 187 00:11:03,600 --> 00:11:08,080 Speaker 1: are three hundred sixties seven Republican delegates in Florida, Illinois, Missouri, 188 00:11:08,160 --> 00:11:11,680 Speaker 1: North Carolina, and Ohio, and the Northern Mariana Islands in 189 00:11:11,679 --> 00:11:15,760 Speaker 1: the Pacific. Last night, the Republican presidential candidates had a 190 00:11:15,840 --> 00:11:19,199 Speaker 1: toned down debate in Miami, discussing issues such as social 191 00:11:19,200 --> 00:11:22,920 Speaker 1: security and climate change. Almost two hundred cases of the 192 00:11:23,000 --> 00:11:26,160 Speaker 1: Zeka virus have been reported in the US. All of 193 00:11:26,160 --> 00:11:29,400 Speaker 1: the cases have been traced to travel abroad. Yesterday, health 194 00:11:29,440 --> 00:11:32,200 Speaker 1: officials made a plea to Congress to provide one point 195 00:11:32,280 --> 00:11:35,080 Speaker 1: nine billion dollars to fight the mosquito born virus in 196 00:11:35,280 --> 00:11:38,320 Speaker 1: Latin America and help it from spreading here in the US. 197 00:11:38,640 --> 00:11:41,840 Speaker 1: A proposal to make polygamy a felony crime in Utah 198 00:11:42,200 --> 00:11:45,480 Speaker 1: has failed again in the state Senate. Global News twenty 199 00:11:45,480 --> 00:11:47,960 Speaker 1: four hours a day, powered by our twenty four hundred 200 00:11:48,040 --> 00:11:50,719 Speaker 1: journalists and more than one hundred fifty news bureaus from 201 00:11:50,720 --> 00:11:54,080 Speaker 1: around the world. I'm Michael Barr. To Michael bar thanks 202 00:11:54,120 --> 00:11:57,839 Speaker 1: so much. Conspiracies of the ruling class with us. Larry 203 00:11:57,880 --> 00:12:01,920 Speaker 1: Lindsay from New York, Michael m and Tom Keane Bloomberg Surveillance. 204 00:12:06,520 --> 00:12:08,920 Speaker 1: Bloomberg Surveillance is brought you by land Rover Adventure is 205 00:12:08,960 --> 00:12:10,920 Speaker 1: yours for the taking. Visit land rover ty state dot 206 00:12:10,960 --> 00:12:13,800 Speaker 1: com for special lease and financing offers. Land Rover above 207 00:12:13,960 --> 00:12:14,640 Speaker 1: and en