1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's the power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections. Mary Lynch, Pierce Fenner and Smith Incorporated 4 00:00:12,760 --> 00:00:27,400 Speaker 1: member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:27,800 --> 00:00:31,520 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:31,560 --> 00:00:36,600 Speaker 1: insight from the best in economics, finance, investment, and international relations. 7 00:00:37,000 --> 00:00:41,600 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and 8 00:00:41,680 --> 00:00:49,080 Speaker 1: of course, on the Bloomberg David. David says we can 9 00:00:49,120 --> 00:00:53,320 Speaker 1: expect royal assent tomorrow on article fifty and let's start 10 00:00:53,320 --> 00:00:55,600 Speaker 1: there with our first guest. Alan Ruskin, Global co head 11 00:00:55,600 --> 00:00:57,840 Speaker 1: of FX research at Deutsche Bank, kind enough to join 12 00:00:57,880 --> 00:01:00,640 Speaker 1: us here in our Bloomberg eleven Thrio Studios in New York. 13 00:01:00,640 --> 00:01:02,960 Speaker 1: Allen great to see who we were listening yesterday, the 14 00:01:03,000 --> 00:01:06,399 Speaker 1: Prime Minister to reason May speaking about this process, how 15 00:01:06,440 --> 00:01:09,640 Speaker 1: it's stuck to the timetable that she set out initially. Here, 16 00:01:10,200 --> 00:01:12,160 Speaker 1: what happens next? Here we have the royal ascent and 17 00:01:12,160 --> 00:01:14,119 Speaker 1: then at work with this moves pretty quickly from here 18 00:01:14,120 --> 00:01:18,000 Speaker 1: on out. Unfortunately, it probably doesn't move terribly quickly, right, 19 00:01:18,040 --> 00:01:21,080 Speaker 1: So I think Theresa may might have her timetable. But 20 00:01:22,120 --> 00:01:24,640 Speaker 1: on the other side, you've obviously got a variety of 21 00:01:24,640 --> 00:01:29,640 Speaker 1: different events in Europe. You've got elections, and you've got 22 00:01:29,680 --> 00:01:32,440 Speaker 1: a difficult group of people to negotiate with on the 23 00:01:32,440 --> 00:01:34,800 Speaker 1: other side, not least because they don't want to give 24 00:01:34,840 --> 00:01:38,319 Speaker 1: you two good a plan, although too good a deal, 25 00:01:38,440 --> 00:01:41,880 Speaker 1: because otherwise you're creating incentives for other countries to to 26 00:01:42,000 --> 00:01:47,160 Speaker 1: leave the ERA or EU. So um, I think this 27 00:01:47,520 --> 00:01:49,880 Speaker 1: whole process is going to get drawn out much more 28 00:01:49,880 --> 00:01:53,040 Speaker 1: than people anticipate. We have this election in the Netherlands today. 29 00:01:53,040 --> 00:01:57,760 Speaker 1: How much of a market moving event is that it's 30 00:01:58,320 --> 00:02:01,520 Speaker 1: promised to be a market moving event. I think it's 31 00:02:01,520 --> 00:02:03,840 Speaker 1: going to be much less so, just judging by what 32 00:02:04,040 --> 00:02:06,480 Speaker 1: the polls are saying in terms of the way Builders 33 00:02:06,600 --> 00:02:09,840 Speaker 1: is doing. In particular, the market's main focus is really 34 00:02:09,960 --> 00:02:13,320 Speaker 1: do we trust the polls? Right? It's less about the results. 35 00:02:15,040 --> 00:02:17,280 Speaker 1: Do we trust the polls? Because if we can trust 36 00:02:17,280 --> 00:02:21,800 Speaker 1: the polls, then I think the recent expectations that Marine 37 00:02:21,840 --> 00:02:26,880 Speaker 1: le Pen will not be elected in France is going 38 00:02:26,960 --> 00:02:29,040 Speaker 1: to be trusted that much more. As you watch this 39 00:02:29,120 --> 00:02:31,320 Speaker 1: play out, what what's it going to tell us about 40 00:02:31,440 --> 00:02:34,560 Speaker 1: the French election. In other words, are we seeing further 41 00:02:34,639 --> 00:02:37,240 Speaker 1: contours yet of the populism that we saw in the US, 42 00:02:37,280 --> 00:02:39,440 Speaker 1: that we saw in the UK, that we've seen elsewhere 43 00:02:39,480 --> 00:02:41,239 Speaker 1: in the world. Is that what this poortowns for it 44 00:02:41,320 --> 00:02:45,519 Speaker 1: for France? Well, I think there's definitely you know, that's 45 00:02:45,560 --> 00:02:47,360 Speaker 1: that that's what people are looking at in terms of 46 00:02:47,400 --> 00:02:50,280 Speaker 1: all the elections. And it's not just populism. I'd say 47 00:02:50,280 --> 00:02:53,640 Speaker 1: that something broader. There's just a sort of sense of splintering. 48 00:02:53,680 --> 00:02:57,519 Speaker 1: There's a sense in which the unorthodox can happen, really, 49 00:02:57,560 --> 00:03:02,400 Speaker 1: that parties can rise from nowhere. Um, all those sorts 50 00:03:02,400 --> 00:03:07,080 Speaker 1: of attributes of recent elections, not you know, just in 51 00:03:07,120 --> 00:03:10,120 Speaker 1: the UK and US in particular, but really places like 52 00:03:10,200 --> 00:03:13,880 Speaker 1: Spain in Italy are a crucial really in way. So 53 00:03:13,880 --> 00:03:15,919 Speaker 1: I think people are looking at in a portents there 54 00:03:16,000 --> 00:03:19,440 Speaker 1: for um, you know, sort of anything unorthodox as it 55 00:03:19,520 --> 00:03:24,359 Speaker 1: were occurring in both the Netherlands and France. Alan Ruskin 56 00:03:24,440 --> 00:03:26,640 Speaker 1: with us on a most busy to including an election 57 00:03:26,720 --> 00:03:30,440 Speaker 1: in Holland and of course fed day here we're stealed 58 00:03:30,520 --> 00:03:32,680 Speaker 1: for that. David ger and I are steeled for being 59 00:03:32,760 --> 00:03:36,920 Speaker 1: unair ready for a six hours today, Alan Ruskin with 60 00:03:37,040 --> 00:03:39,880 Speaker 1: us and you make global headlines X number of months 61 00:03:39,920 --> 00:03:43,320 Speaker 1: ago with quite a call on sterling. Do you reaffirm 62 00:03:43,920 --> 00:03:47,240 Speaker 1: because of the politics, because of the economics, because of 63 00:03:47,320 --> 00:03:52,480 Speaker 1: the flows a significantly weaker sterling, Yes, Tom. I think 64 00:03:52,560 --> 00:03:55,400 Speaker 1: there are two parts to the story. One that's not 65 00:03:55,640 --> 00:03:58,400 Speaker 1: as commonly recognized as as it should be, which is 66 00:03:58,560 --> 00:04:02,840 Speaker 1: that it's quite unusual for FED funds to be trading 67 00:04:02,880 --> 00:04:05,800 Speaker 1: above UK based rates to begin with, and certainly a 68 00:04:05,880 --> 00:04:09,000 Speaker 1: hundred basis points above base rates and fit terms of 69 00:04:09,040 --> 00:04:11,440 Speaker 1: FED funds is extremely unusually. Have to go back, i 70 00:04:11,480 --> 00:04:16,000 Speaker 1: think too to see that kind of events. So the 71 00:04:16,160 --> 00:04:19,080 Speaker 1: interest rate story is very compelling, and the interest rate 72 00:04:19,160 --> 00:04:21,599 Speaker 1: story in and of itself can really drive the pound 73 00:04:21,680 --> 00:04:25,320 Speaker 1: down too, you know, so one ten or thereabouts. So 74 00:04:25,839 --> 00:04:28,600 Speaker 1: that's even before you consider the politics, which we've obviously 75 00:04:28,720 --> 00:04:31,400 Speaker 1: just been talking about, which could get really strung out 76 00:04:31,640 --> 00:04:37,920 Speaker 1: and there's no easy deals awaiting Theresa May. And unfortunately, 77 00:04:38,000 --> 00:04:41,560 Speaker 1: therefore that combination between the politics and the more orthodox 78 00:04:41,839 --> 00:04:43,960 Speaker 1: story in terms of interest rate differentials is going to 79 00:04:44,080 --> 00:04:47,280 Speaker 1: drive this thing down too. We still think below one 80 00:04:47,360 --> 00:04:49,839 Speaker 1: ten watching oil, We've been watching it for the last 81 00:04:49,839 --> 00:04:53,040 Speaker 1: twenty four hours here. So the market movements yesterday, Um, 82 00:04:54,240 --> 00:04:55,480 Speaker 1: go look go to the history for us. If you 83 00:04:55,480 --> 00:04:57,680 Speaker 1: would compare this to two thousand fourteen two thousand fifteen, 84 00:04:57,839 --> 00:05:00,960 Speaker 1: are they analogs as you see them? Yeah, I think 85 00:05:01,040 --> 00:05:04,800 Speaker 1: people are too ready to actually compare there. Yeah, that 86 00:05:04,880 --> 00:05:07,280 Speaker 1: parallel and absolutely because I think if you look at 87 00:05:07,320 --> 00:05:09,280 Speaker 1: the moves and the scale the moves that we had 88 00:05:09,320 --> 00:05:11,640 Speaker 1: in two thousand and fifteen, we went from I think 89 00:05:12,200 --> 00:05:15,640 Speaker 1: roughly about one oh six dollars per barrel on w 90 00:05:15,839 --> 00:05:18,279 Speaker 1: T I down to about twenty six dollars and eighty 91 00:05:18,440 --> 00:05:21,520 Speaker 1: dollar move. Really this time around we've got roughly a 92 00:05:21,560 --> 00:05:24,680 Speaker 1: tenth of that move. You just can't compare that. And 93 00:05:24,760 --> 00:05:27,680 Speaker 1: then of course we're in terrain we've already been in, right, 94 00:05:27,760 --> 00:05:29,880 Speaker 1: We've been in quite recently. So I don't think this 95 00:05:30,320 --> 00:05:33,200 Speaker 1: move in oil is nearly as disruptive for any of 96 00:05:33,240 --> 00:05:36,960 Speaker 1: the markets. And in fact, because it's actually driven by 97 00:05:37,480 --> 00:05:40,600 Speaker 1: the supply side, it's not indicative of weak demand. I 98 00:05:40,680 --> 00:05:42,920 Speaker 1: think actually will be helpful for the economy. How big 99 00:05:43,000 --> 00:05:45,359 Speaker 1: a bell weather or oil prices as you see them, 100 00:05:45,360 --> 00:05:46,840 Speaker 1: when you look at what they might say about the 101 00:05:46,880 --> 00:05:50,160 Speaker 1: health of the economy, Yeah, I think you obviously do 102 00:05:50,360 --> 00:05:53,160 Speaker 1: need to look at the fact that oil typically is 103 00:05:53,200 --> 00:05:58,000 Speaker 1: correlated with other commodity prices and is correlated with equities 104 00:05:58,040 --> 00:06:02,120 Speaker 1: as well, So it definitely is a pro cyclical and 105 00:06:02,720 --> 00:06:06,000 Speaker 1: I therefore like to look at what other commodities are doing. 106 00:06:06,080 --> 00:06:07,960 Speaker 1: And if you actually look at base metals, for example, 107 00:06:08,000 --> 00:06:11,520 Speaker 1: they don't tend to confirm the down swing that we've 108 00:06:11,520 --> 00:06:13,480 Speaker 1: actually had in oil of late. So it sentenced to 109 00:06:13,720 --> 00:06:17,040 Speaker 1: suggest that oils are particular story rather than you know, 110 00:06:17,240 --> 00:06:20,599 Speaker 1: indicative of broader weakness. What are you listening for today 111 00:06:20,720 --> 00:06:23,400 Speaker 1: from the Fed chair? I was looking back of all 112 00:06:23,440 --> 00:06:25,719 Speaker 1: the speeches that we heard of these last a few weeks, 113 00:06:25,800 --> 00:06:28,240 Speaker 1: and lele brennerd stood out to me just because little 114 00:06:28,240 --> 00:06:30,919 Speaker 1: brannest stood out here indicating there might be read increase, 115 00:06:30,920 --> 00:06:33,440 Speaker 1: but also because she spoke about the role of global events. 116 00:06:33,480 --> 00:06:35,120 Speaker 1: What what are you gonna be listening for today from 117 00:06:35,360 --> 00:06:38,159 Speaker 1: from the Fed chair? Yeah? So I think in initial instance, 118 00:06:38,200 --> 00:06:41,039 Speaker 1: you're looking at their forecast and you're looking at the dots, 119 00:06:41,320 --> 00:06:44,679 Speaker 1: and then you're swinging over I think to what Janet 120 00:06:44,760 --> 00:06:47,120 Speaker 1: Yellen has to say about the state of the economy 121 00:06:47,800 --> 00:06:50,840 Speaker 1: and what's really happening. I think as much on the 122 00:06:50,920 --> 00:06:55,000 Speaker 1: inflation front as on the growth side. Unfortunately, I don't 123 00:06:55,040 --> 00:06:56,880 Speaker 1: think we're going to get you surprises there. Keep in 124 00:06:56,960 --> 00:06:59,040 Speaker 1: mind that she spoke, you know, a little over ten 125 00:06:59,120 --> 00:07:01,080 Speaker 1: days ago really in a sense, so I think it's 126 00:07:01,120 --> 00:07:03,000 Speaker 1: going to be hard for her to top that. Really 127 00:07:03,040 --> 00:07:05,360 Speaker 1: when she was sending a message that look, the FED 128 00:07:05,520 --> 00:07:07,520 Speaker 1: is not rarely behind the curve, but we do need 129 00:07:07,600 --> 00:07:10,960 Speaker 1: to tighten and I think she said some strong words 130 00:07:11,000 --> 00:07:14,920 Speaker 1: about two thousand and seventeen is not the same as 131 00:07:15,080 --> 00:07:17,920 Speaker 1: the prior to. We're basically going to speed this thing 132 00:07:18,000 --> 00:07:22,080 Speaker 1: up at it. I look alan at the at the 133 00:07:22,160 --> 00:07:24,720 Speaker 1: bell at here and Greg Peters of Pigeon was on 134 00:07:24,880 --> 00:07:28,600 Speaker 1: yesterday saying essentially this is a mayor June rate increase 135 00:07:28,680 --> 00:07:31,560 Speaker 1: crammed into March, and not that there's a risk that 136 00:07:31,600 --> 00:07:33,880 Speaker 1: they'll get out front or the parlor game of whether 137 00:07:33,960 --> 00:07:36,880 Speaker 1: they're right or wrong. But there's got to be a 138 00:07:37,000 --> 00:07:40,680 Speaker 1: lot more economic data, particularly on wage growth. It's just 139 00:07:41,040 --> 00:07:44,480 Speaker 1: not there. I mean, if inflation is going up, real 140 00:07:44,560 --> 00:07:48,400 Speaker 1: wage growth doesn't lift, does it. Yeah. I think you've 141 00:07:48,400 --> 00:07:50,040 Speaker 1: got to be careful that, Tom, because I think one 142 00:07:50,080 --> 00:07:53,400 Speaker 1: of the lessons of the nineteen seventies there was wages 143 00:07:53,480 --> 00:07:56,120 Speaker 1: really a lagging indicator rather than a leading indicator, and 144 00:07:56,200 --> 00:07:59,320 Speaker 1: people got obsessed with the wage growth. Plus they're obsessed, 145 00:07:59,400 --> 00:08:02,760 Speaker 1: but plus when it goes it goes right exactly. So 146 00:08:02,840 --> 00:08:05,640 Speaker 1: I think that's the problem. You know, you're dealing with 147 00:08:05,760 --> 00:08:09,320 Speaker 1: a lagging indicators, something that lags by something like eighteen 148 00:08:09,360 --> 00:08:12,120 Speaker 1: months to two years relative to the cycle. So by 149 00:08:12,160 --> 00:08:15,640 Speaker 1: the time you're actually seeing genuine inflation pressures, really the 150 00:08:15,680 --> 00:08:17,640 Speaker 1: cats out the bag as such, and you're then going 151 00:08:17,680 --> 00:08:19,600 Speaker 1: to have to high rates much more than you would want. 152 00:08:19,680 --> 00:08:23,280 Speaker 1: So I think there's not much debate about whether this 153 00:08:23,840 --> 00:08:26,840 Speaker 1: move today or the expected move today is the right one. Really, 154 00:08:26,880 --> 00:08:29,600 Speaker 1: I think people feel absolutely twenty five basis points is 155 00:08:29,640 --> 00:08:32,480 Speaker 1: a minimum. Thank you so much greatly, Ellen Ruskin with 156 00:08:32,679 --> 00:08:35,920 Speaker 1: terrific perspective this morning. Thank you so much for helping 157 00:08:36,040 --> 00:08:38,240 Speaker 1: us with our interview with Tom Nichols and the Death 158 00:08:38,280 --> 00:08:41,400 Speaker 1: of because you are one of the perfect examples of 159 00:08:41,520 --> 00:08:46,160 Speaker 1: the advantage of expertise have Thank you so much Tom 160 00:08:46,200 --> 00:08:48,320 Speaker 1: for having Tom Nichols coming up soon on the death 161 00:08:48,400 --> 00:08:51,680 Speaker 1: of expertise. He's got an entire chapter on Alan Ruskin. 162 00:08:52,960 --> 00:08:56,800 Speaker 1: It's a great, great book in the paperback edition. Allan 163 00:08:56,880 --> 00:08:59,400 Speaker 1: Ruskin with Deutsche Bank with perspective, and really that call 164 00:09:00,080 --> 00:09:02,760 Speaker 1: Sterling is remarkable. I believe I heard him say below 165 00:09:03,559 --> 00:09:07,920 Speaker 1: one ten as being not certitude, but certainly a tendency 166 00:09:08,080 --> 00:09:25,280 Speaker 1: towards Joseph Antos is at the American Enterprise Institute. I 167 00:09:25,400 --> 00:09:28,760 Speaker 1: guess that labels him as a conservative or some form 168 00:09:28,880 --> 00:09:32,160 Speaker 1: of right maybe you'd put him. But there is such 169 00:09:32,200 --> 00:09:37,240 Speaker 1: a respect for Joe antoss work that everyone listens, and 170 00:09:37,320 --> 00:09:40,439 Speaker 1: we've been trying to do that with different perspectives over 171 00:09:40,520 --> 00:09:43,880 Speaker 1: the last number of days. Joe Antos, wonderful to have 172 00:09:44,000 --> 00:09:46,360 Speaker 1: you back on the show. If you were to have 173 00:09:46,440 --> 00:09:49,320 Speaker 1: a cup of coffee now with an elderly, middle income, 174 00:09:49,440 --> 00:09:55,760 Speaker 1: lower income person right now, how would you explain Trump Care. Well, actually, 175 00:09:55,920 --> 00:09:59,560 Speaker 1: if it's an elderly person over I wouldn't have much 176 00:09:59,600 --> 00:10:03,400 Speaker 1: to line because Medicare is untouched by this. But if 177 00:10:03,400 --> 00:10:07,839 Speaker 1: it's an older person under the age of I would 178 00:10:08,040 --> 00:10:12,800 Speaker 1: I would say that, Uh, if they're looking to buy 179 00:10:12,920 --> 00:10:18,440 Speaker 1: their own insurance on the individual market, uh that uh, 180 00:10:18,720 --> 00:10:22,240 Speaker 1: they're likely to get a subsidy, but depending on their 181 00:10:22,280 --> 00:10:26,280 Speaker 1: income level, Uh, it could be substantially lower than it 182 00:10:26,440 --> 00:10:29,439 Speaker 1: than it was under the Affordable Care Away from the 183 00:10:29,600 --> 00:10:34,000 Speaker 1: social grid of liberals want to take care of everybody 184 00:10:34,520 --> 00:10:38,800 Speaker 1: and conservatives want to spend less money. That's simplistic, juvenile statement, 185 00:10:38,840 --> 00:10:42,079 Speaker 1: that's all I'm good for. Joe. How far apart is 186 00:10:42,240 --> 00:10:47,199 Speaker 1: Joe ants from Andy Slavitt, who helped President Obama implement 187 00:10:47,360 --> 00:10:50,880 Speaker 1: a c A. How far apart are liberals and conservatives 188 00:10:50,960 --> 00:10:54,240 Speaker 1: in this health debate? Well, you know, I think there 189 00:10:54,320 --> 00:10:58,360 Speaker 1: are there are some similarities in views. Uh. I think 190 00:10:58,400 --> 00:11:03,120 Speaker 1: the Affordable Care Act has permanently changed the way health 191 00:11:03,200 --> 00:11:06,199 Speaker 1: insurance is sold in this country. People will not be 192 00:11:06,360 --> 00:11:10,760 Speaker 1: refused coverage because they have a pre existing health condition. Uh. 193 00:11:11,240 --> 00:11:15,120 Speaker 1: Democrats clearly embraced that, and Republicans do too. I think 194 00:11:15,160 --> 00:11:17,400 Speaker 1: that the debate is over how you do it, where 195 00:11:17,480 --> 00:11:23,079 Speaker 1: the control is Uh? And of course a problem for 196 00:11:23,160 --> 00:11:25,480 Speaker 1: both Republicans and Democrats, where you get the money and 197 00:11:25,520 --> 00:11:28,080 Speaker 1: how much do you spend? Why isn't there more willingness 198 00:11:28,160 --> 00:11:30,160 Speaker 1: to compromise here? We heard from the House Speaker Paul 199 00:11:30,240 --> 00:11:32,719 Speaker 1: Ryan yesterday saying, in light of that score from the 200 00:11:32,760 --> 00:11:36,520 Speaker 1: Congressional Budget Office, which of course you know, well, he's 201 00:11:36,520 --> 00:11:38,600 Speaker 1: not willing to make changes to this piece of legislation. 202 00:11:38,640 --> 00:11:41,559 Speaker 1: What message does that send yes, to members of his 203 00:11:41,600 --> 00:11:43,240 Speaker 1: own party who may be on the fence about this, 204 00:11:43,320 --> 00:11:46,360 Speaker 1: but also to Democrats who might feel like this is exclusionary, 205 00:11:46,440 --> 00:11:49,439 Speaker 1: that there really isn't uh an attempt here to get 206 00:11:49,480 --> 00:11:52,520 Speaker 1: everybody on board to make this thing right. Well, I 207 00:11:52,559 --> 00:11:54,599 Speaker 1: think it's too early to know how that's going to 208 00:11:54,720 --> 00:11:56,920 Speaker 1: work out. Paul Ryan is in it been a bit 209 00:11:56,960 --> 00:12:01,720 Speaker 1: of a bind. Uh. The UH it's called the American 210 00:12:01,760 --> 00:12:05,599 Speaker 1: health Care Act, the American health Care Act, UH is 211 00:12:05,640 --> 00:12:09,679 Speaker 1: trying to split the difference within the Republican Party. Uh. 212 00:12:09,880 --> 00:12:13,520 Speaker 1: There there are Republicans who don't want to see uh 213 00:12:13,720 --> 00:12:17,040 Speaker 1: subsidies go to people who don't have a tax liability. 214 00:12:17,120 --> 00:12:20,920 Speaker 1: For example, Paul Ryan is opposed to that. He believes 215 00:12:21,040 --> 00:12:23,559 Speaker 1: that uh, low income people who don't have a tax 216 00:12:23,600 --> 00:12:27,319 Speaker 1: liability are precisely that people you need to help. UH. 217 00:12:28,559 --> 00:12:31,360 Speaker 1: But on the other hand, UH, you have the Senate 218 00:12:31,720 --> 00:12:34,800 Speaker 1: Senate Republicans saying we need more of a plan. Well, 219 00:12:35,160 --> 00:12:37,920 Speaker 1: so we're He's stuck. Basically say, I think where the 220 00:12:38,440 --> 00:12:40,439 Speaker 1: where the action is going to be is in the Senate, 221 00:12:41,320 --> 00:12:45,199 Speaker 1: and uh that's where you you I mean, certainly need 222 00:12:45,640 --> 00:12:50,040 Speaker 1: bipartisanship in general, but if Republicans hope to pass anything 223 00:12:50,160 --> 00:12:53,640 Speaker 1: this year, they're going to need some help from Democrats. 224 00:12:53,960 --> 00:12:56,000 Speaker 1: Who supports this bill? Of course, of course the House 225 00:12:56,040 --> 00:12:59,400 Speaker 1: Speaker does, those who drafted it support it. But where 226 00:12:59,480 --> 00:13:02,280 Speaker 1: where is the font of support outside of the House 227 00:13:02,360 --> 00:13:05,720 Speaker 1: of Representatives. You hear from doctors. Um, doctor's groups don't 228 00:13:05,760 --> 00:13:07,520 Speaker 1: like it. Insurance they're saying they weren't included in the 229 00:13:07,600 --> 00:13:09,800 Speaker 1: writing of this How problematic is it that you don't 230 00:13:09,840 --> 00:13:12,400 Speaker 1: have a lot of people rallying behind this legislation. I 231 00:13:12,440 --> 00:13:17,240 Speaker 1: think it's a real issue. Although it does reflect human nature. Uh, 232 00:13:17,960 --> 00:13:22,920 Speaker 1: everyone in the health sector uh went through Uh you 233 00:13:23,000 --> 00:13:26,959 Speaker 1: know what's basically eight years of change. Uh. Some of 234 00:13:27,040 --> 00:13:30,360 Speaker 1: it good, some of it not so good. But human 235 00:13:30,440 --> 00:13:32,840 Speaker 1: nature is that once they've gone through that, they don't 236 00:13:32,840 --> 00:13:35,800 Speaker 1: really want to make any more changes. Uh. And and 237 00:13:35,920 --> 00:13:38,240 Speaker 1: I think that's that's part of the problem. And the 238 00:13:38,280 --> 00:13:41,640 Speaker 1: other part of the problem, especially coming from the states, 239 00:13:42,120 --> 00:13:46,360 Speaker 1: coming from the hospitals, is this bill looks like uh 240 00:13:47,000 --> 00:13:49,480 Speaker 1: coordinated the CBO. And I think I don't know about 241 00:13:49,480 --> 00:13:52,199 Speaker 1: their number, but I think the direction they're gonna be 242 00:13:52,880 --> 00:13:57,959 Speaker 1: possibly fourteen million people without insurance, uh put up you 243 00:13:58,040 --> 00:14:02,120 Speaker 1: know who lose insurance because bill right away, ultimately twenty 244 00:14:02,160 --> 00:14:04,959 Speaker 1: four million. Whether the numbers right or not, the point 245 00:14:05,160 --> 00:14:08,720 Speaker 1: is that hospitals are going to see more people coming 246 00:14:08,760 --> 00:14:12,240 Speaker 1: into the hospital without insurance. Uh. Insurers are going to 247 00:14:12,360 --> 00:14:17,480 Speaker 1: see less business. UH and UH that's a real problem 248 00:14:17,840 --> 00:14:20,880 Speaker 1: for the business and healthcare. Joseph antos thank you so much, 249 00:14:20,920 --> 00:14:22,880 Speaker 1: too short. We hope to get you back again. An 250 00:14:22,880 --> 00:14:25,840 Speaker 1: American Enterprise Institute can't say enough about his reading. I'll 251 00:14:25,840 --> 00:14:28,720 Speaker 1: put out the essay that Mr antos Co wrote Uh 252 00:14:28,920 --> 00:14:39,840 Speaker 1: here the other day, brought you by Bank of America. 253 00:14:39,960 --> 00:14:44,120 Speaker 1: Mary Lynch. Dedicated to bringing our clients insights and solutions 254 00:14:44,480 --> 00:14:47,760 Speaker 1: to meet the challenges of a transforming world. That's the 255 00:14:47,840 --> 00:14:51,680 Speaker 1: power of global connections. Mary Lynch, Pierce, Fenner and Smith 256 00:14:52,120 --> 00:14:59,880 Speaker 1: Incorporated Member s I p C. He is seeing seven 257 00:15:00,040 --> 00:15:05,680 Speaker 1: grape Fruit League games. Douglas Cats of Seabreees parties. Thomas, 258 00:15:05,760 --> 00:15:08,400 Speaker 1: good morning, Doug. Let me let me just cut to 259 00:15:08,440 --> 00:15:12,680 Speaker 1: the chase. How do the Dodgers live this year? Number 260 00:15:12,720 --> 00:15:16,960 Speaker 1: twenty two just came in from the Baltimore looked this year. 261 00:15:17,040 --> 00:15:24,040 Speaker 1: Tom wants to know Jim payroll, which is what Jim Palmer, 262 00:15:24,080 --> 00:15:26,360 Speaker 1: which is he had a few years ago. We'll get 263 00:15:26,400 --> 00:15:28,640 Speaker 1: to Mr Palmer here on a bit we're thrilled to 264 00:15:28,680 --> 00:15:30,320 Speaker 1: bring in the Hall of Famer Jim Palmer of the 265 00:15:30,360 --> 00:15:33,440 Speaker 1: Baltimore wils Here a bit on the state of baseball 266 00:15:33,520 --> 00:15:36,440 Speaker 1: that Doug and I love dearly. Doug, let's talk about 267 00:15:36,480 --> 00:15:40,480 Speaker 1: the markets here for the next section or show. You 268 00:15:40,600 --> 00:15:43,560 Speaker 1: have been cautious. You've watched the bull market walk away 269 00:15:43,600 --> 00:15:47,280 Speaker 1: from you, and everybody knows, even the most uber ball 270 00:15:47,400 --> 00:15:51,200 Speaker 1: that there are telltale signs you were looking. Is always 271 00:15:51,280 --> 00:15:54,280 Speaker 1: as a pro at the bond market to give you 272 00:15:54,400 --> 00:15:57,320 Speaker 1: the signals for the equity market. What do you see 273 00:15:57,360 --> 00:16:01,160 Speaker 1: in bonds right now? I think bond are implying, based 274 00:16:01,280 --> 00:16:07,160 Speaker 1: upon the six or seven decade relationship between UH nominal 275 00:16:07,280 --> 00:16:11,680 Speaker 1: g d P, which is real GDP plus inflation UH 276 00:16:11,840 --> 00:16:16,120 Speaker 1: compared UM compared to current let's say, ten year bond yields, 277 00:16:17,120 --> 00:16:20,000 Speaker 1: that we are not going to move out of this 278 00:16:21,000 --> 00:16:25,000 Speaker 1: UH subpar period of economic growth that we've been in 279 00:16:25,120 --> 00:16:29,320 Speaker 1: for the last three to five years. UM. I suspect 280 00:16:29,400 --> 00:16:32,960 Speaker 1: that we are far more advanced in this business cycle 281 00:16:33,240 --> 00:16:37,920 Speaker 1: than the consensus believes. UM. If we look at three 282 00:16:38,080 --> 00:16:43,320 Speaker 1: basic areas retail, auto, sales, and housing. I formed that conclusion, 283 00:16:43,480 --> 00:16:48,920 Speaker 1: retails obviously being viscerated. The problems lie beyond Amazon and 284 00:16:50,400 --> 00:16:53,080 Speaker 1: the changing channels of distribution. And I think the weather 285 00:16:53,200 --> 00:16:55,520 Speaker 1: now is going to be a death mail to the season. 286 00:16:56,120 --> 00:16:58,880 Speaker 1: Auto sales have clearly peaked. We have the highest inventory 287 00:16:58,920 --> 00:17:02,120 Speaker 1: to sales ratios in a decade. We have rapidly rising 288 00:17:02,200 --> 00:17:05,480 Speaker 1: delinquencies on auto paper, and we have near record high 289 00:17:05,520 --> 00:17:08,560 Speaker 1: incentive and these pose a threat to a larger than 290 00:17:08,880 --> 00:17:13,520 Speaker 1: expected drop in production. And finally, housing is peaking. Um. 291 00:17:14,280 --> 00:17:16,960 Speaker 1: I'm confident that national housing data is soon going to 292 00:17:17,040 --> 00:17:20,639 Speaker 1: hit a very important inflection point. Um. What is typical? 293 00:17:20,800 --> 00:17:23,560 Speaker 1: The peak is now occurring. You know, I started out 294 00:17:23,560 --> 00:17:25,679 Speaker 1: when I graduated business school, I was a housing analyst 295 00:17:25,720 --> 00:17:29,639 Speaker 1: to kid Or Peabody And always it starts with the 296 00:17:29,720 --> 00:17:32,680 Speaker 1: coast weakening. In Florida, we have what I call the 297 00:17:32,760 --> 00:17:36,560 Speaker 1: South Beach housing bubble, which is spreading north to other 298 00:17:36,640 --> 00:17:41,199 Speaker 1: far other areas um uh north of Miami. Prices are 299 00:17:41,240 --> 00:17:43,480 Speaker 1: turning lower, in some cases much lower. And the same 300 00:17:43,520 --> 00:17:48,560 Speaker 1: applies to formally hot and bubblicious areas of California. And 301 00:17:49,119 --> 00:17:52,480 Speaker 1: as it relates to retail ant housing, reefinancings are about 302 00:17:52,520 --> 00:17:57,720 Speaker 1: to evaporate and that supplemental income is used to renovate 303 00:17:57,840 --> 00:18:00,960 Speaker 1: homes to buy new appliances of the rubles like oh those, 304 00:18:01,040 --> 00:18:04,920 Speaker 1: and that's going to disappear in The final sign relating 305 00:18:05,119 --> 00:18:08,720 Speaker 1: to the bond market is we're obviously seeing abroad retreating 306 00:18:08,800 --> 00:18:13,400 Speaker 1: commodities across the board, dr copper, crude oil, and now 307 00:18:14,280 --> 00:18:19,640 Speaker 1: yesterday I noted that the high yield market UM demonstrated 308 00:18:19,680 --> 00:18:22,920 Speaker 1: by the largest et s h y G moved under 309 00:18:22,960 --> 00:18:26,560 Speaker 1: its two day moving average UM. It seems to me 310 00:18:26,800 --> 00:18:30,840 Speaker 1: that we're in a period of extended low interest rates. 311 00:18:30,880 --> 00:18:33,640 Speaker 1: Although I did call for a generational low and bond 312 00:18:33,720 --> 00:18:35,800 Speaker 1: yields in your show last July, and I think I 313 00:18:35,880 --> 00:18:39,840 Speaker 1: think that's still hands still stands, but low interest rates 314 00:18:39,880 --> 00:18:42,480 Speaker 1: for long periods of time like we've had since oh nine, 315 00:18:42,880 --> 00:18:47,160 Speaker 1: entice and invite, temptation, and the history of American finances 316 00:18:47,200 --> 00:18:52,560 Speaker 1: populated by these speculative booms in markets, complacency and then busts. 317 00:18:53,200 --> 00:18:56,720 Speaker 1: So to summarize, I think that we have these conditions 318 00:18:56,760 --> 00:19:00,680 Speaker 1: of slowing growth. We're at thirty times that really adjusted 319 00:19:00,760 --> 00:19:05,320 Speaker 1: earnings atular sourced where nineteen times non gap earnings where 320 00:19:05,400 --> 00:19:08,560 Speaker 1: twenty seven times gap earnings, and the spread between gap 321 00:19:08,640 --> 00:19:11,320 Speaker 1: and non gap is the widest in history. So I 322 00:19:11,400 --> 00:19:14,080 Speaker 1: think the ingredients for a Minsky moment maybe at hand. 323 00:19:14,600 --> 00:19:18,440 Speaker 1: Just when most investors, strategists in the business media is 324 00:19:18,480 --> 00:19:22,720 Speaker 1: looking at the spring skies, at the cloudless skies of 325 00:19:22,800 --> 00:19:25,760 Speaker 1: investment opportunity, I would say, I would state simply that 326 00:19:25,880 --> 00:19:29,520 Speaker 1: the irrational is now being rationalized. D Yeah, I want 327 00:19:29,520 --> 00:19:30,800 Speaker 1: to ask you about hih yield. You've been You've been 328 00:19:30,840 --> 00:19:33,399 Speaker 1: ringing the bell warning about high yield junk bonds for 329 00:19:33,560 --> 00:19:35,920 Speaker 1: for some time. Now, give us a sense of of 330 00:19:36,000 --> 00:19:40,080 Speaker 1: why you're so concerned. Well, you're seeing a deterioration and 331 00:19:40,200 --> 00:19:43,480 Speaker 1: commodities market that's very important, especially of an oil kind 332 00:19:44,200 --> 00:19:49,159 Speaker 1: to the high yield market um so, so in keeping 333 00:19:49,280 --> 00:19:54,040 Speaker 1: with my slower growth, for slower domestic real growth for 334 00:19:54,160 --> 00:19:58,720 Speaker 1: longer UM, I would be increasingly concerned. And after all, 335 00:19:59,640 --> 00:20:03,760 Speaker 1: this head between high bonds and treasuries, which maybe a 336 00:20:03,840 --> 00:20:06,160 Speaker 1: year and a half ago was eight hundred basis points 337 00:20:06,720 --> 00:20:10,800 Speaker 1: um UM, went down to about three thirty basis points 338 00:20:10,920 --> 00:20:13,680 Speaker 1: last week, So I think we could see a widening 339 00:20:13,760 --> 00:20:17,360 Speaker 1: and those spreads, but those you know, those are it's 340 00:20:17,480 --> 00:20:20,520 Speaker 1: high yield is just one of a number of conditions, 341 00:20:21,200 --> 00:20:23,159 Speaker 1: which suggests to me that we are right for a 342 00:20:23,240 --> 00:20:26,200 Speaker 1: tradeable correction of concepts. Cast thirty seconds here and we'll 343 00:20:26,240 --> 00:20:28,720 Speaker 1: come back and continual market discussion before we speak to 344 00:20:29,040 --> 00:20:32,280 Speaker 1: the gentleman. We really want to speak to are you 345 00:20:34,000 --> 00:20:37,639 Speaker 1: Are you in the market? Are you do? Are you 346 00:20:37,800 --> 00:20:40,440 Speaker 1: in the market? I mean, are you long equities? Here? 347 00:20:42,080 --> 00:20:45,000 Speaker 1: I'm long and short. I run a hedged yeah, but 348 00:20:45,280 --> 00:20:47,960 Speaker 1: so you're in the market, yeah, I mean, you know, 349 00:20:48,040 --> 00:20:50,399 Speaker 1: we never talked about my longs. My favorite long for 350 00:20:50,400 --> 00:20:53,159 Speaker 1: the last for two thousand sixteen was DuPont, who was 351 00:20:53,280 --> 00:20:57,119 Speaker 1: up nearly favorite shot. I just wanted to get this 352 00:20:57,200 --> 00:20:59,640 Speaker 1: out of the way because the cast attractors think he's 353 00:20:59,640 --> 00:21:02,480 Speaker 1: never in the market. And that's Bologna with Doug Cass 354 00:21:02,560 --> 00:21:05,640 Speaker 1: and later the Hall of Famer Jim Palmer, Douglas Cass, 355 00:21:05,680 --> 00:21:08,480 Speaker 1: the series partners all have a special guests here in 356 00:21:08,720 --> 00:21:12,120 Speaker 1: a few minutes. Doug on the state of the markets 357 00:21:12,160 --> 00:21:14,760 Speaker 1: and on the linkage here. It's been so long since 358 00:21:14,840 --> 00:21:18,680 Speaker 1: we've had a legit correction, ages, since we've had a 359 00:21:18,800 --> 00:21:22,960 Speaker 1: bear market? Why is that? Is it? Is? It? Is it? Then? 360 00:21:23,119 --> 00:21:27,120 Speaker 1: Just the continued generation of free cash flow by corporations 361 00:21:27,440 --> 00:21:30,040 Speaker 1: or do you say yell and yell and yelling. I 362 00:21:30,160 --> 00:21:35,639 Speaker 1: say yell and yelling and also brainwashed. Brainwash. By that, 363 00:21:35,840 --> 00:21:41,320 Speaker 1: I mean you know, I used this Valiant Pershing Squares 364 00:21:42,480 --> 00:21:46,359 Speaker 1: situation as kind of a template for what's going on 365 00:21:46,480 --> 00:21:50,879 Speaker 1: in the market. It wasn't only act you act. It 366 00:21:51,000 --> 00:21:55,240 Speaker 1: was Viking it with Sequoia uh that were Paulson and 367 00:21:55,359 --> 00:21:59,000 Speaker 1: Company that were brainwashed and sort of dropped their dukes 368 00:21:59,840 --> 00:22:03,200 Speaker 1: as if they were in a heavyweight um the fighting. 369 00:22:03,280 --> 00:22:07,399 Speaker 1: But it wasn't ropid dope like uh Mohammed Ali Um. 370 00:22:07,560 --> 00:22:09,920 Speaker 1: It was kind of this massive group stink. And that's 371 00:22:09,960 --> 00:22:13,840 Speaker 1: what happens after seven years of zero interest rates. You get, 372 00:22:14,520 --> 00:22:17,879 Speaker 1: you get people, you get ninety billion dollars lost in 373 00:22:18,040 --> 00:22:21,240 Speaker 1: value by the greatest minds in the hedge fund community. 374 00:22:21,960 --> 00:22:26,600 Speaker 1: The market simply isn't efficient, as investors may soon find out. Um. 375 00:22:27,000 --> 00:22:29,560 Speaker 1: And I think that the S and P is much 376 00:22:29,680 --> 00:22:32,960 Speaker 1: like Valiant, and we're gonna we'renna have a big lesson learned. 377 00:22:33,000 --> 00:22:35,040 Speaker 1: But getting back to what you said, there are stocks 378 00:22:35,080 --> 00:22:37,520 Speaker 1: that I like, and I am long stocks as well 379 00:22:37,600 --> 00:22:40,000 Speaker 1: as short stocks. Give us a few of them, I know, Uh, 380 00:22:40,240 --> 00:22:45,560 Speaker 1: Series isn't one of them? Is going bankrupt. Look, I 381 00:22:45,760 --> 00:22:50,840 Speaker 1: like to find companies that are fodder for takeovers. Um 382 00:22:51,200 --> 00:22:53,800 Speaker 1: If you think about it, the ideal corporate target has 383 00:22:53,840 --> 00:22:58,280 Speaker 1: a bunch of characteristics. It's a bite sized market capitalization 384 00:22:58,440 --> 00:23:02,159 Speaker 1: in which an activist or a company can acquire, a 385 00:23:02,240 --> 00:23:05,880 Speaker 1: meaningful position to influence Management's a company that's large enough 386 00:23:05,920 --> 00:23:08,720 Speaker 1: to move the needle of a potential acquire. It's a 387 00:23:08,800 --> 00:23:12,120 Speaker 1: product company that has a product portfolio to use buffets 388 00:23:12,160 --> 00:23:16,240 Speaker 1: adjective is sticky uh and as a competitive mode, a 389 00:23:16,320 --> 00:23:20,720 Speaker 1: market position unaffected by technological obsolescence and has returned and 390 00:23:20,800 --> 00:23:25,000 Speaker 1: assets invested, capital that can be improved or divestitures, cost 391 00:23:25,080 --> 00:23:29,280 Speaker 1: cutting basically through a more attentive, aggressive and aggressive management team. 392 00:23:29,560 --> 00:23:32,639 Speaker 1: A company that generates a reasonable, steady and predictable amount 393 00:23:32,680 --> 00:23:35,520 Speaker 1: of cash flow, etcetera. The two companies that I think 394 00:23:35,600 --> 00:23:39,760 Speaker 1: qualifying candidates for take over my portfolio are Hartford Financial 395 00:23:39,840 --> 00:23:45,440 Speaker 1: Group h i G and campbell Um Soup CPD good 396 00:23:45,520 --> 00:23:47,520 Speaker 1: Soups and the President. Just a little while back at 397 00:23:47,520 --> 00:23:52,720 Speaker 1: the yesterday yesterday, I purchased for the first time Twitter, 398 00:23:54,359 --> 00:23:57,240 Speaker 1: and I think Twitter two is a candidate in my view. 399 00:23:57,400 --> 00:24:00,960 Speaker 1: Is that ultimately Facebook, which is try to copy Twitter 400 00:24:01,320 --> 00:24:05,400 Speaker 1: unsuccessfully is going to acquire Twitter in the low twenties. 401 00:24:05,480 --> 00:24:09,440 Speaker 1: I think Twitter is a remarkable canvas in in which 402 00:24:09,560 --> 00:24:14,080 Speaker 1: humanity paints these these unbelievable thoughts and delivers real time 403 00:24:14,359 --> 00:24:18,720 Speaker 1: information and news and it can't be duplicated. And people 404 00:24:18,800 --> 00:24:22,359 Speaker 1: forget that the company has no debt, a large two billion, 405 00:24:22,800 --> 00:24:27,159 Speaker 1: three billion dollars of cash, so um, the enterprise value 406 00:24:27,359 --> 00:24:32,440 Speaker 1: is only about eight point nine billion dollars. Today, we're 407 00:24:32,440 --> 00:24:33,800 Speaker 1: going to talk to your house guest here and just 408 00:24:34,040 --> 00:24:35,480 Speaker 1: just a little bit, Doug, let me let me ask 409 00:24:35,480 --> 00:24:37,159 Speaker 1: you lastly, just to return to to what we had 410 00:24:37,200 --> 00:24:40,440 Speaker 1: with perishing and Bill Ackman leaving Valiant. What's the legacy 411 00:24:40,480 --> 00:24:42,439 Speaker 1: of that going to be? What's the lesson learned from 412 00:24:42,440 --> 00:24:44,879 Speaker 1: the way all of this went down? The animate stance 413 00:24:44,920 --> 00:24:48,600 Speaker 1: that Bill Ackman took for so long, and now I 414 00:24:48,680 --> 00:24:53,840 Speaker 1: think I think he suffered from style drift. He betrayed 415 00:24:55,000 --> 00:25:00,640 Speaker 1: his style that resulted in enormous successes. He's a hitch 416 00:25:00,680 --> 00:25:05,000 Speaker 1: fun icon even with this um, with his investment boner. 417 00:25:05,560 --> 00:25:10,440 Speaker 1: He used to be take active steaks in troubled companies. 418 00:25:10,920 --> 00:25:13,560 Speaker 1: In the case of Vacant, he took a passive steak 419 00:25:13,920 --> 00:25:18,960 Speaker 1: in what seemed to be a flourishing company. Well, I 420 00:25:19,000 --> 00:25:20,920 Speaker 1: guess that about puts it, and we'll see. We'll have 421 00:25:21,080 --> 00:25:23,600 Speaker 1: much more on it as we go. Let's bring in 422 00:25:24,160 --> 00:25:29,080 Speaker 1: with Doug Cass. Yeah, you know, have have your guests, Uh, 423 00:25:29,359 --> 00:25:31,520 Speaker 1: jump on the phone. Let me explain this to everybody 424 00:25:31,560 --> 00:25:33,880 Speaker 1: out there who's of a younger vintage. The world stopped 425 00:25:33,920 --> 00:25:38,000 Speaker 1: in the early nineties seventies in baseball over the excellence 426 00:25:38,080 --> 00:25:47,480 Speaker 1: of Earl Weavers squad. Here are the statistics twenty one 427 00:25:47,640 --> 00:25:51,480 Speaker 1: and there's no whining about having eight bullpen guys behind him. 428 00:25:51,520 --> 00:25:55,800 Speaker 1: Jim Palmer was the workhorse of baseball and did it shoot, 429 00:25:55,920 --> 00:26:01,399 Speaker 1: throwing conservatively seven if not thirty percent, and more innings 430 00:26:01,440 --> 00:26:04,480 Speaker 1: than the kids do today, including the wonderful David Price 431 00:26:04,600 --> 00:26:07,320 Speaker 1: of the Boston Red Sox. He's a Hall of Famer. 432 00:26:08,000 --> 00:26:11,119 Speaker 1: Jim Palmer, Jim, wonderful to have you on with us. 433 00:26:11,480 --> 00:26:13,920 Speaker 1: And I know I can speak for Doug Cass and 434 00:26:14,040 --> 00:26:17,879 Speaker 1: for so many listening across this nation. We gotta get 435 00:26:18,000 --> 00:26:22,720 Speaker 1: baseball back. I'm board board board with the game. What 436 00:26:22,840 --> 00:26:24,720 Speaker 1: do we do? The thing is, you know, you don't 437 00:26:24,720 --> 00:26:27,720 Speaker 1: want to make the really the grave mistake of actually 438 00:26:28,240 --> 00:26:31,520 Speaker 1: listening to news. Um. You know, it's funny. I don't 439 00:26:31,560 --> 00:26:33,600 Speaker 1: do a lot of spring training games. I do any 440 00:26:33,680 --> 00:26:35,960 Speaker 1: games for the Orioles. So um. In fact, we have 441 00:26:36,080 --> 00:26:39,000 Speaker 1: the Red Sox. I'll be in Boston the second week 442 00:26:39,040 --> 00:26:41,639 Speaker 1: of April when the Orioles we play. You know, the 443 00:26:41,680 --> 00:26:43,200 Speaker 1: good thing about playing the Red Sox this year, I 444 00:26:43,240 --> 00:26:45,160 Speaker 1: think we get rid of most of the games going 445 00:26:45,240 --> 00:26:48,879 Speaker 1: into the after the first week of September, so we 446 00:26:48,960 --> 00:26:50,600 Speaker 1: get we get the Red Zocks out of the way, 447 00:26:50,640 --> 00:26:52,320 Speaker 1: and they well, you know, they won ninety four games 448 00:26:52,359 --> 00:26:54,160 Speaker 1: last year. It looks like they're gonna have a pretty 449 00:26:54,160 --> 00:26:57,240 Speaker 1: good club on paper. And the reason I say that, 450 00:26:57,800 --> 00:26:59,760 Speaker 1: remember the name Jimmy Williams when he as the Red 451 00:26:59,800 --> 00:27:02,000 Speaker 1: so You know, so earlier year when I said, I mean, 452 00:27:02,000 --> 00:27:03,840 Speaker 1: you know, it looks like it's pretty good club, he said, 453 00:27:04,520 --> 00:27:06,159 Speaker 1: he said, yeah, on paper, he said, and you know 454 00:27:06,240 --> 00:27:09,680 Speaker 1: what we do with paper. So I think about so 455 00:27:11,000 --> 00:27:13,560 Speaker 1: you know, I can't wait for people. Well, I'll agree 456 00:27:13,600 --> 00:27:15,320 Speaker 1: with that. And it's good to see Christian Sale put 457 00:27:15,400 --> 00:27:19,600 Speaker 1: on the right uniform. Help me, help me, Jim Palmer 458 00:27:19,680 --> 00:27:22,680 Speaker 1: with the fact we need eight relievers to end every game. 459 00:27:23,359 --> 00:27:25,040 Speaker 1: I mean, the game goes on on and on with 460 00:27:25,119 --> 00:27:28,359 Speaker 1: the pitching changes, Can we somehow get back to the 461 00:27:28,560 --> 00:27:31,200 Speaker 1: magic that you guys had where you went out there 462 00:27:31,240 --> 00:27:34,520 Speaker 1: and threw the ball. No, you know, I think, you know, again, 463 00:27:35,040 --> 00:27:38,159 Speaker 1: the saber metrics of you know, the saber metricians of 464 00:27:38,200 --> 00:27:40,600 Speaker 1: baseball a kind of taken over. So you know, if 465 00:27:40,680 --> 00:27:42,399 Speaker 1: you're I mean, we saw it in the World Series, 466 00:27:42,560 --> 00:27:46,359 Speaker 1: you know, uh, you know Darry Francona, you know against 467 00:27:46,400 --> 00:27:49,200 Speaker 1: the Cubs. I mean, you know, I mean the Cubs 468 00:27:49,240 --> 00:27:51,359 Speaker 1: have won two games over the last two years. You know, 469 00:27:51,400 --> 00:27:54,879 Speaker 1: they one a hundred, one hundred three last year since 470 00:27:54,960 --> 00:27:57,520 Speaker 1: Joe Madden took over. But they went to the bullpens. 471 00:27:57,560 --> 00:28:00,280 Speaker 1: You know, Chapman pitched with what a five run lead 472 00:28:00,359 --> 00:28:02,760 Speaker 1: in Game six and almost cost him the World Series. 473 00:28:02,960 --> 00:28:05,000 Speaker 1: So I think there's a tendency when you have a 474 00:28:05,040 --> 00:28:08,080 Speaker 1: good bullpen. They look at the numbers. Hitters have more 475 00:28:08,200 --> 00:28:10,639 Speaker 1: trouble with the back end of the bullpen, you know, 476 00:28:11,560 --> 00:28:13,920 Speaker 1: the badge of You know, when I got to the Orioles, 477 00:28:13,960 --> 00:28:17,480 Speaker 1: I remembered Robin Roberts. Now, anybody that is a baseball historian, 478 00:28:18,359 --> 00:28:20,679 Speaker 1: I was nineteen, Robin was thirty eight. He had two 479 00:28:20,760 --> 00:28:22,560 Speaker 1: hundred and seventy wins on his way to the Hall 480 00:28:22,560 --> 00:28:24,359 Speaker 1: of Fame. You know, one of the whiz kids with 481 00:28:24,440 --> 00:28:27,160 Speaker 1: the Phillies in the fifth trying to win three hundred games. 482 00:28:27,640 --> 00:28:30,080 Speaker 1: And he told me, he said, listen, you know, Jimmy, 483 00:28:30,240 --> 00:28:32,280 Speaker 1: he said, first of all, the fastball is the best 484 00:28:32,400 --> 00:28:34,080 Speaker 1: pitching baseball, and you have a great one. I hope 485 00:28:34,080 --> 00:28:36,480 Speaker 1: you're smart enough to understand that. He said, you got 486 00:28:36,560 --> 00:28:38,760 Speaker 1: a fastball you can throw us first strike, he got one, 487 00:28:38,880 --> 00:28:41,680 Speaker 1: you can throw all the same with your break. It's 488 00:28:41,720 --> 00:28:45,400 Speaker 1: just change. You were terrible. You were, you were, you were, 489 00:28:45,680 --> 00:28:47,480 Speaker 1: you were going to fail. Jim Palmer was five and 490 00:28:47,560 --> 00:28:50,880 Speaker 1: four US first season with the Baltimoreals. Total failure. We'll 491 00:28:50,920 --> 00:28:54,080 Speaker 1: come back with Jim Balmer of the Baltimoreials and Douglas 492 00:28:54,200 --> 00:29:12,880 Speaker 1: Cass of Sea Breeze Partners Bonus round. Mr Cass brought 493 00:29:12,960 --> 00:29:15,080 Speaker 1: someone along who has been better long in the market 494 00:29:15,160 --> 00:29:18,200 Speaker 1: than Doug Cass, and that would be Jim Palmer of 495 00:29:18,320 --> 00:29:25,080 Speaker 1: Baltimore or did and a few a few years ago 496 00:29:25,200 --> 00:29:26,960 Speaker 1: Jim Palmer with us at the Baltimore Oris, and of 497 00:29:27,040 --> 00:29:29,840 Speaker 1: course helping out with so much of their media work. 498 00:29:29,920 --> 00:29:32,960 Speaker 1: Jim Palmer eighty nine wins last year. As usual the 499 00:29:33,080 --> 00:29:36,400 Speaker 1: Orioles can put the thing out of the park. Very 500 00:29:36,480 --> 00:29:41,280 Speaker 1: good defense, phenomenal relief pitching. What does a team like 501 00:29:41,440 --> 00:29:43,680 Speaker 1: that do in that division when they need to go 502 00:29:43,720 --> 00:29:46,560 Speaker 1: out and find starters? What will the Baltimore Orioles do 503 00:29:47,080 --> 00:29:50,160 Speaker 1: to change from eighty nine wins to the nineties that 504 00:29:50,240 --> 00:29:53,320 Speaker 1: are needed to go all the way and further. Well, 505 00:29:53,400 --> 00:29:56,000 Speaker 1: ideally you'd do You'd like to have a couple of 506 00:29:56,080 --> 00:29:59,080 Speaker 1: your young pictures step up, you know, the two candidates. 507 00:29:59,400 --> 00:30:02,960 Speaker 1: Mike right, Tyler Wilson writes done all right. In spring training, 508 00:30:03,000 --> 00:30:05,360 Speaker 1: Wilson struggled a little bit. In fact, one of the 509 00:30:05,400 --> 00:30:07,640 Speaker 1: best games I saw pitch last year actually against the 510 00:30:07,680 --> 00:30:09,640 Speaker 1: Red Sox, and that's hard to do in Fenway Park, 511 00:30:09,760 --> 00:30:14,040 Speaker 1: was by Tyler Wilson. He just couldn't sustain it, unfortunately. 512 00:30:14,240 --> 00:30:16,120 Speaker 1: You know, you know what the Red Sox have done 513 00:30:16,160 --> 00:30:19,200 Speaker 1: so well. Obviously they have a great team, and they 514 00:30:19,240 --> 00:30:21,760 Speaker 1: lose David Ortiz. They went out and got Mitch Moreland. 515 00:30:22,120 --> 00:30:24,320 Speaker 1: You know, Pedroia is one of their leaders, had a 516 00:30:24,360 --> 00:30:26,440 Speaker 1: great year. He what at three eight team last year 517 00:30:26,880 --> 00:30:29,520 Speaker 1: from you know, Hanley Ramires. They moved in the first 518 00:30:29,560 --> 00:30:33,040 Speaker 1: base more comfortable at thirty home runs, so so you know, 519 00:30:33,280 --> 00:30:35,320 Speaker 1: they don't really need a d H. I think the 520 00:30:35,400 --> 00:30:37,440 Speaker 1: key to their team other than the fact that, as 521 00:30:37,480 --> 00:30:39,200 Speaker 1: you mentioned, they got Chris Sale, one of the great 522 00:30:39,240 --> 00:30:42,920 Speaker 1: left handers in baseball. Prices had some elbow problems. For 523 00:30:43,080 --> 00:30:45,360 Speaker 1: Cello went twenty two and four. That's I don't care 524 00:30:45,400 --> 00:30:48,680 Speaker 1: how good you are. That's hard to repeat. Uh. We 525 00:30:48,840 --> 00:30:51,760 Speaker 1: gave them Eduardo Rodriguez for Andrew Miller said they had 526 00:30:51,800 --> 00:30:54,840 Speaker 1: the starting pitchers. I would have you know, I would 527 00:30:54,840 --> 00:30:58,840 Speaker 1: have liked them maybe kept you know, Jake Arietta who 528 00:30:59,000 --> 00:31:01,040 Speaker 1: won the Sy Young Award two years ago. They didn't 529 00:31:01,080 --> 00:31:04,520 Speaker 1: do that. They let Rodriguez go. So Chris Tillman's had 530 00:31:04,560 --> 00:31:08,120 Speaker 1: shoulder problems. He is not throwing at the moment, so 531 00:31:08,360 --> 00:31:11,120 Speaker 1: he's the Orioles number one guy. So, you know, guys 532 00:31:11,160 --> 00:31:14,000 Speaker 1: like Kevin Cosman, who had a nice finished last year, 533 00:31:14,080 --> 00:31:16,120 Speaker 1: one seven in two the last two months, he's going 534 00:31:16,160 --> 00:31:18,320 Speaker 1: to have to step up. But the Red Sox, you know, 535 00:31:18,520 --> 00:31:22,520 Speaker 1: on paper, the three best teams in my estimation in 536 00:31:22,600 --> 00:31:24,920 Speaker 1: the American League East, the Red Sox probably have the 537 00:31:25,320 --> 00:31:28,680 Speaker 1: best starting pitching. You know, whether Tyler Thornburgh coming over 538 00:31:28,760 --> 00:31:31,320 Speaker 1: from Atlanta's going to help your both been. Uh, then 539 00:31:31,360 --> 00:31:34,120 Speaker 1: you've got Cleveland. People forget how good Cleveland's gonna be. 540 00:31:34,200 --> 00:31:37,200 Speaker 1: They went to the World Series without sALS or Carrasco, 541 00:31:37,400 --> 00:31:39,560 Speaker 1: so they're gonna be back. And then the team to 542 00:31:39,720 --> 00:31:42,720 Speaker 1: really look at, especially if Dallas Kaiko, who won the 543 00:31:42,720 --> 00:31:45,280 Speaker 1: Saw younger were two years ago, gets healthy, is the 544 00:31:45,320 --> 00:31:48,400 Speaker 1: Houston Astros. You know, they got Beltron, they got and 545 00:31:49,280 --> 00:31:51,560 Speaker 1: they have a nice team. So it's it's you know, 546 00:31:52,000 --> 00:31:54,400 Speaker 1: the only a great time thing about baseball at this 547 00:31:54,520 --> 00:31:57,080 Speaker 1: time is that everybody has a chance. Now, maybe you 548 00:31:57,120 --> 00:32:02,040 Speaker 1: don't say that about kess portfolio as well. Let's bring 549 00:32:02,120 --> 00:32:05,320 Speaker 1: in David. We're talking to Jim Falmer from Shay cast 550 00:32:05,400 --> 00:32:07,480 Speaker 1: down in Florida. But Jim, let me ask you about 551 00:32:07,840 --> 00:32:10,640 Speaker 1: the buoyancy of Baltimore. Uh, the city that that you 552 00:32:10,720 --> 00:32:12,480 Speaker 1: call home part of the year. How's it doing? And 553 00:32:12,640 --> 00:32:14,520 Speaker 1: when you're there, I mean particularly interested in the degree 554 00:32:14,560 --> 00:32:16,640 Speaker 1: which young people are getting interested in baseball. Still we 555 00:32:16,720 --> 00:32:18,680 Speaker 1: talk about how long these games are and I love 556 00:32:18,720 --> 00:32:21,960 Speaker 1: to keep our attention that a beautiful park there. Talk 557 00:32:22,000 --> 00:32:25,400 Speaker 1: about the buoyancy of Baltimore right now. Well, I mean, obviously, 558 00:32:25,440 --> 00:32:27,720 Speaker 1: you know we had the Freddie Gray and the two 559 00:32:27,800 --> 00:32:30,360 Speaker 1: years ago and we're you know, I think that it's 560 00:32:30,360 --> 00:32:33,320 Speaker 1: a much more aware city. Adam Jones, who's now been 561 00:32:33,360 --> 00:32:34,880 Speaker 1: with the Orils, I think is going to be his 562 00:32:35,000 --> 00:32:37,680 Speaker 1: eighth year, you know, being an African American player, I 563 00:32:37,720 --> 00:32:40,480 Speaker 1: think he understands how important he is. The thing about 564 00:32:40,520 --> 00:32:43,840 Speaker 1: baseball in Baltimore, you know, you compete with the Ravens. Uh. 565 00:32:43,920 --> 00:32:47,400 Speaker 1: You know, the Ravens have a terrific uh, you know, organization. 566 00:32:48,000 --> 00:32:49,800 Speaker 1: But the one thing about baseball, I think the thing 567 00:32:49,880 --> 00:32:52,280 Speaker 1: that hurt the Orioles the most was the fact that 568 00:32:52,680 --> 00:32:55,400 Speaker 1: they have a team about fifty miles away with the Nationals. 569 00:32:55,720 --> 00:32:58,000 Speaker 1: And not only are the national fifty miles away, they're 570 00:32:58,000 --> 00:32:59,920 Speaker 1: a good ball club. You know, they have a great 571 00:33:00,040 --> 00:33:02,800 Speaker 1: ball club. They have a new ballpark. You know, Dusty Baker, 572 00:33:02,800 --> 00:33:04,880 Speaker 1: a long time friend of mine, manages the team. So 573 00:33:05,360 --> 00:33:07,320 Speaker 1: you know, a lot of our fan base came from there. 574 00:33:07,400 --> 00:33:10,480 Speaker 1: But I learned this when I was doing the playoffs 575 00:33:10,520 --> 00:33:12,880 Speaker 1: in I used to go down and play volleyball. We're 576 00:33:12,880 --> 00:33:14,960 Speaker 1: out in l A And one of the the guys said, 577 00:33:14,960 --> 00:33:16,960 Speaker 1: I thought you and Al Michael's and Tim McCarver were 578 00:33:17,000 --> 00:33:19,120 Speaker 1: really off. Last night, the Dodgers had lost three to two. 579 00:33:19,200 --> 00:33:20,800 Speaker 1: The next night they win nine to four. I come 580 00:33:20,840 --> 00:33:23,240 Speaker 1: back to play volleyball next morning before you go to 581 00:33:23,240 --> 00:33:24,760 Speaker 1: the ballpark into the game, and he said, gad, you 582 00:33:24,840 --> 00:33:27,360 Speaker 1: guys were great. So I have found as a broadcaster 583 00:33:27,480 --> 00:33:30,040 Speaker 1: when the Orioles win, and that's what they've done since 584 00:33:30,080 --> 00:33:33,320 Speaker 1: Buck Shoalwalter came on board, I'm a much better broadcaster. 585 00:33:33,480 --> 00:33:35,680 Speaker 1: So I hope that's the case this year. But I 586 00:33:35,760 --> 00:33:37,640 Speaker 1: think the one thing and Tom kind of covered this, 587 00:33:38,240 --> 00:33:42,440 Speaker 1: the the Orioles, they have a very loyal fan base, 588 00:33:42,760 --> 00:33:44,760 Speaker 1: but at the end of the day, they need to 589 00:33:44,800 --> 00:33:46,680 Speaker 1: go out and find some starting pitching. And I would 590 00:33:46,720 --> 00:33:49,440 Speaker 1: not be surprised with Tilman's injury if they go out 591 00:33:49,480 --> 00:33:52,040 Speaker 1: and maybe signed Doug Piston and hope that he's able 592 00:33:52,120 --> 00:33:54,360 Speaker 1: to maybe get back to where he was a couple 593 00:33:54,360 --> 00:33:56,720 Speaker 1: of years ago. Let me ask you the news item 594 00:33:56,760 --> 00:33:58,400 Speaker 1: of the moment and we'll let you go on with 595 00:33:58,480 --> 00:34:02,040 Speaker 1: your day at helping Doug Cass lose money shorty, which 596 00:34:02,120 --> 00:34:06,320 Speaker 1: is Jim Palmer, help me with the World Baseball event 597 00:34:06,520 --> 00:34:09,560 Speaker 1: going on now, Mike Michael Gibbins is with the U 598 00:34:09,800 --> 00:34:13,319 Speaker 1: S and Mr macau is a little bit um distracted 599 00:34:13,360 --> 00:34:15,760 Speaker 1: as well, do you like this idea that these players 600 00:34:15,840 --> 00:34:18,800 Speaker 1: aren't in spring training and are doing the World Baseball 601 00:34:18,840 --> 00:34:22,560 Speaker 1: Congress um. I think, you know, I have mixed emotions. 602 00:34:22,840 --> 00:34:26,080 Speaker 1: I never could have done it personally, because for for 603 00:34:26,160 --> 00:34:28,120 Speaker 1: a guy that you know, I played on a team. 604 00:34:28,200 --> 00:34:30,400 Speaker 1: Over the really almost twenty years that I played for 605 00:34:30,440 --> 00:34:32,759 Speaker 1: the Oriels, we had the best winning percentage and we 606 00:34:32,880 --> 00:34:34,719 Speaker 1: did that by going to spring training or we were 607 00:34:34,800 --> 00:34:36,680 Speaker 1: used to always have the meetings. He was my manager 608 00:34:36,800 --> 00:34:38,680 Speaker 1: most of that time, and said, listen, if we play together, 609 00:34:39,200 --> 00:34:41,080 Speaker 1: you know, and it's not only twenty five guys that 610 00:34:41,160 --> 00:34:43,480 Speaker 1: you're really you're forty man roster. At the end of 611 00:34:43,520 --> 00:34:45,959 Speaker 1: the year. If we do the things were capable of doing, 612 00:34:46,239 --> 00:34:48,640 Speaker 1: we're going to be all right. And we usually were. 613 00:34:48,960 --> 00:34:50,840 Speaker 1: You know, we didn't always get to the World Series, 614 00:34:50,880 --> 00:34:53,160 Speaker 1: but we were usually in the top well, you know, 615 00:34:53,600 --> 00:34:57,680 Speaker 1: three teams in the American League Division or whatever. So 616 00:34:58,239 --> 00:35:00,520 Speaker 1: when you take your players away, I think that really 617 00:35:00,600 --> 00:35:03,240 Speaker 1: hurt your ball club. If you look. You know, Hanley 618 00:35:03,320 --> 00:35:05,640 Speaker 1: RAMERI said the Red Sox, I'm not sure they have 619 00:35:05,760 --> 00:35:09,960 Speaker 1: any key players because they understand last year, you know, 620 00:35:10,000 --> 00:35:13,120 Speaker 1: they won ninety four games. It's not just about getting 621 00:35:13,160 --> 00:35:16,000 Speaker 1: to the postseasons. It's it's what the Red Sox did 622 00:35:16,080 --> 00:35:19,400 Speaker 1: in two thousand four, two thousand, two thirteen. And I 623 00:35:19,480 --> 00:35:22,879 Speaker 1: think most clubs, um, you know, you get it's great 624 00:35:22,920 --> 00:35:25,839 Speaker 1: to play for your country. And I understand that. I mean, 625 00:35:26,160 --> 00:35:27,680 Speaker 1: you know, if you're a the Medigan player and you 626 00:35:27,760 --> 00:35:30,440 Speaker 1: come over here, you know you represent to the Medican Republic. 627 00:35:30,560 --> 00:35:33,719 Speaker 1: But the bottom line is you get paid a lot 628 00:35:33,800 --> 00:35:36,040 Speaker 1: of money now, and that's a great thing about baseball 629 00:35:36,200 --> 00:35:38,680 Speaker 1: to play for your fans. And if you get hurt 630 00:35:39,360 --> 00:35:43,040 Speaker 1: or you're not able to play with the same intensity. Um, 631 00:35:43,239 --> 00:35:46,160 Speaker 1: And I understand spring trainings boring. I think it's a 632 00:35:46,200 --> 00:35:47,840 Speaker 1: good thing. I just wish they could come up with 633 00:35:47,920 --> 00:35:50,080 Speaker 1: a better time of the year where you actually get 634 00:35:50,120 --> 00:35:53,360 Speaker 1: the best American players to actually play for the team. USA. 635 00:35:54,120 --> 00:35:57,720 Speaker 1: We are on a thank you so much in behalf. 636 00:35:57,880 --> 00:36:00,200 Speaker 1: I think we have like four Baltimore was it four? 637 00:36:00,320 --> 00:36:03,839 Speaker 1: Is it's six Baltimore Oriole fans. We've got Julie Hyman 638 00:36:03,920 --> 00:36:06,080 Speaker 1: writing in saying how they are actually was to hear 639 00:36:06,160 --> 00:36:09,280 Speaker 1: Mr Palmer not only that, but Jim Palmer, Mohammad l Arian, 640 00:36:09,320 --> 00:36:11,680 Speaker 1: who's done better than good in economics since his kind 641 00:36:11,760 --> 00:36:15,200 Speaker 1: regards doug Casts. Thank you, thank you, thank you. May 642 00:36:15,280 --> 00:36:17,720 Speaker 1: you prospered dout cast at least for the next Trading 643 00:36:17,760 --> 00:36:31,200 Speaker 1: are partners. Thanks for listening to the Bloomberg Surveillance podcast. 644 00:36:31,600 --> 00:36:36,680 Speaker 1: Subscribe and listen to interviews on iTunes, SoundCloud, or whichever 645 00:36:36,840 --> 00:36:41,239 Speaker 1: podcast platform you prefer. I'm out on Twitter at Tom Keene. 646 00:36:41,360 --> 00:36:45,120 Speaker 1: David Gura is at David Gura. Before the podcast, you 647 00:36:45,200 --> 00:37:01,360 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio, brought you 648 00:37:01,520 --> 00:37:05,640 Speaker 1: by Bank of America. Merylynch. Dedicated to bringing our clients 649 00:37:05,760 --> 00:37:09,880 Speaker 1: insights and solutions to meet the challenges of a transforming world. 650 00:37:10,360 --> 00:37:14,239 Speaker 1: That's the power of global connections. Marrilynch, Pierce, Fenner and 651 00:37:14,320 --> 00:37:17,719 Speaker 1: Smith Incorporated Member s I p C.