1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:28,000 Speaker 1: Bloomberg dot com, and of course on the Bloomberg December 5 00:00:28,280 --> 00:00:35,279 Speaker 1: John and I were working what Yeah, And then there 6 00:00:35,360 --> 00:00:37,320 Speaker 1: was a crater and there was a whole bunch of 7 00:00:37,320 --> 00:00:39,400 Speaker 1: notes that said get on board, but there was one 8 00:00:39,479 --> 00:00:42,000 Speaker 1: note that he had the courage to like get on 9 00:00:42,120 --> 00:00:46,280 Speaker 1: board and also mentioned magnitude and he said up twenty 10 00:00:47,120 --> 00:00:50,720 Speaker 1: And after everybody picked themselves up off the floor laughing, 11 00:00:51,159 --> 00:00:53,920 Speaker 1: said Ben Laidler, you're out of here. Remember this crazy 12 00:00:53,960 --> 00:00:56,760 Speaker 1: guy turns up from HSBC and starts talking about massive 13 00:00:56,840 --> 00:01:00,320 Speaker 1: upside in and everyone's looking at him like his crazy, 14 00:01:00,440 --> 00:01:03,840 Speaker 1: including me. I'm really pleased to say that the former 15 00:01:03,960 --> 00:01:06,880 Speaker 1: chief equity strategist of HSBC and now the CEO of 16 00:01:06,880 --> 00:01:10,039 Speaker 1: Tower Hudson Research, Ben Labor joins us on the phone. 17 00:01:10,280 --> 00:01:14,120 Speaker 1: Been a fantastic call through and as Tom and I 18 00:01:14,200 --> 00:01:16,840 Speaker 1: and least have been discussing for weeks, months, if not 19 00:01:17,040 --> 00:01:20,679 Speaker 1: years now, the courage to stay invested when everybody is 20 00:01:20,720 --> 00:01:23,440 Speaker 1: obsessed with the down side risk, Ben, how important is 21 00:01:23,480 --> 00:01:27,360 Speaker 1: that story right now? Yeah? Very I mean, you know, 22 00:01:27,480 --> 00:01:29,520 Speaker 1: to to Tom's point, you know, I don't really know 23 00:01:29,560 --> 00:01:33,000 Speaker 1: how the coronavirus thing, um, you know, pans out right. 24 00:01:33,000 --> 00:01:34,959 Speaker 1: We have some sort of historical precedent, But you know, 25 00:01:35,040 --> 00:01:38,120 Speaker 1: I ultimately I think I think markets are sort of 26 00:01:38,160 --> 00:01:39,560 Speaker 1: going to be fine here, right. I mean, I think 27 00:01:39,560 --> 00:01:43,000 Speaker 1: the global business cycle is sort of stabilizing. Whether the 28 00:01:43,160 --> 00:01:46,399 Speaker 1: coronavirus um, you know, delays that a quarter, and whether 29 00:01:46,440 --> 00:01:48,280 Speaker 1: we need a bit more policy stimulus, you know, I 30 00:01:48,320 --> 00:01:50,400 Speaker 1: don't know, But ultimately I think this is a macro 31 00:01:50,560 --> 00:01:56,120 Speaker 1: narrative of a sort of stabilization of GDP, a stabilization 32 00:01:56,120 --> 00:01:58,760 Speaker 1: of earnings um, you know, particularly in the US. I 33 00:01:58,800 --> 00:02:00,600 Speaker 1: mean the US earnings or say, and I think is 34 00:02:00,600 --> 00:02:03,720 Speaker 1: now over with the fourth quarter, after after three quarters 35 00:02:03,760 --> 00:02:06,880 Speaker 1: of negative earning UM. And I think and I think 36 00:02:06,960 --> 00:02:09,680 Speaker 1: valuations which people think are super expensive, I actually think 37 00:02:09,680 --> 00:02:12,840 Speaker 1: that I can see here ten minutes and justify them. 38 00:02:12,960 --> 00:02:14,840 Speaker 1: I think they're very well supported by a whole bunch 39 00:02:14,840 --> 00:02:18,440 Speaker 1: of reasons, and this narrative that they're very expensive versus history. 40 00:02:18,440 --> 00:02:19,799 Speaker 1: I think just you know, it's sort of a little 41 00:02:19,800 --> 00:02:22,200 Speaker 1: bit intellectually lazy. And this is the fact that you know, 42 00:02:22,240 --> 00:02:24,080 Speaker 1: we now have a huge tech sector, the bond deals 43 00:02:24,120 --> 00:02:26,119 Speaker 1: are very low, that the US is growing more than 44 00:02:26,400 --> 00:02:28,360 Speaker 1: any other developed market out there, and the BED can 45 00:02:28,400 --> 00:02:30,440 Speaker 1: still cut rates if it if it wants to, no 46 00:02:30,440 --> 00:02:33,000 Speaker 1: one else can. Well, let's stress test that intellectual laziness, 47 00:02:33,040 --> 00:02:34,720 Speaker 1: shall we a little bit? Ben? I won't be as 48 00:02:34,760 --> 00:02:36,400 Speaker 1: brutal as you. I think there's a lot of reasons 49 00:02:36,440 --> 00:02:38,440 Speaker 1: to be cautious, to be less constructive, to be not 50 00:02:38,960 --> 00:02:41,440 Speaker 1: the big over bowl that we saw, perhaps through parts 51 00:02:41,440 --> 00:02:44,480 Speaker 1: of what did they get wrong? Though? Ben? I don't 52 00:02:44,480 --> 00:02:46,639 Speaker 1: want to call them the doom crew because I think 53 00:02:46,800 --> 00:02:52,400 Speaker 1: they're worries, irrational, they're well reason what do they get wrong? Though? Ben? Yeah? 54 00:02:52,440 --> 00:02:54,359 Speaker 1: So I you know, I think what are the two 55 00:02:54,400 --> 00:02:56,440 Speaker 1: big risks out there today? Because they're the same as 56 00:02:56,480 --> 00:02:58,720 Speaker 1: they were back in Q four eighteen, Right, I mean 57 00:02:58,880 --> 00:03:01,040 Speaker 1: you know which is which is that we get a 58 00:03:01,040 --> 00:03:04,120 Speaker 1: big economic slowdown? Um, and you know all the focuses 59 00:03:04,120 --> 00:03:07,600 Speaker 1: on China, right, that's global GDP growth, it's it's it's 60 00:03:07,600 --> 00:03:09,959 Speaker 1: reasonably opaque. We think they have the policy flexibility, but 61 00:03:10,000 --> 00:03:11,560 Speaker 1: they also have a lot of debt, right, so that 62 00:03:11,840 --> 00:03:14,320 Speaker 1: you know, and the coronavirus just plays right into that again. 63 00:03:14,720 --> 00:03:17,000 Speaker 1: So you know, China and how that feeds into the 64 00:03:17,000 --> 00:03:19,840 Speaker 1: global economy is a big one. And the amount of 65 00:03:19,880 --> 00:03:23,000 Speaker 1: policy flexibility that is out there globally, and that's obviously 66 00:03:23,040 --> 00:03:25,079 Speaker 1: been getting less and less over the years of people 67 00:03:25,160 --> 00:03:27,200 Speaker 1: have been getting more and more worried about it. And 68 00:03:27,240 --> 00:03:29,040 Speaker 1: SPED has more than anybody else, you know, you know, 69 00:03:29,080 --> 00:03:31,799 Speaker 1: negative rates in Europe and and and and and and 70 00:03:32,320 --> 00:03:35,200 Speaker 1: essentially in Japan. Um. You know, those are the two issues. 71 00:03:35,400 --> 00:03:39,800 Speaker 1: It's it's policy flexibility and and and global growth. I 72 00:03:39,800 --> 00:03:41,920 Speaker 1: want to pick up on the policy flexibility. How much 73 00:03:42,040 --> 00:03:44,960 Speaker 1: is your bullish call hinged on more stimulus from both 74 00:03:44,960 --> 00:03:50,480 Speaker 1: the FED and the PBOC UM. I mean the p BOC, 75 00:03:50,600 --> 00:03:53,520 Speaker 1: I think is is going to introduce you know, liquidity 76 00:03:53,560 --> 00:03:57,360 Speaker 1: and credit measures here to support GDP at at current levels. 77 00:03:57,360 --> 00:04:01,560 Speaker 1: But I think that's very coronavirus driven. The In terms 78 00:04:01,560 --> 00:04:03,160 Speaker 1: of the FED, I think the FED just needs to 79 00:04:03,160 --> 00:04:04,720 Speaker 1: be flexible. I mean, you know, why do we get 80 00:04:04,760 --> 00:04:06,920 Speaker 1: this big sell off in in Q four eighteen. You 81 00:04:07,000 --> 00:04:09,000 Speaker 1: know a big part of that was you know, people 82 00:04:09,000 --> 00:04:11,120 Speaker 1: thinking the FAD was making a policy mistake by staying 83 00:04:11,160 --> 00:04:14,800 Speaker 1: overly cautious for too long. So I think, um, you know, 84 00:04:14,800 --> 00:04:16,520 Speaker 1: the first just cut three times here now there and 85 00:04:16,560 --> 00:04:18,159 Speaker 1: holds at the moment. I think they just need to 86 00:04:18,160 --> 00:04:22,840 Speaker 1: be um, you know, flexible and and you know growth 87 00:04:22,880 --> 00:04:26,640 Speaker 1: in gend P growth in the US is still above potential. Um, 88 00:04:26,680 --> 00:04:28,760 Speaker 1: you know, there's the stuffing at that and the first 89 00:04:28,760 --> 00:04:30,600 Speaker 1: just kind of fests cut three times. So I think 90 00:04:30,600 --> 00:04:33,800 Speaker 1: there's a lot of sort of insurance out there, um 91 00:04:33,920 --> 00:04:36,839 Speaker 1: for for GDP growth and and and frankly for US earnings. 92 00:04:36,839 --> 00:04:38,719 Speaker 1: I mean not to dwell on US earnings, but you 93 00:04:38,760 --> 00:04:41,720 Speaker 1: know we're gonna get one percent earnings growth this quarter, 94 00:04:41,720 --> 00:04:44,200 Speaker 1: which doesn't sound like very much, but it comes with 95 00:04:45,279 --> 00:04:48,240 Speaker 1: negative drag from the energy sector and a five percentage 96 00:04:48,240 --> 00:04:52,080 Speaker 1: point negative drag from international stocks, So you know, domestic 97 00:04:52,160 --> 00:04:55,839 Speaker 1: corporate USA, well, I would argue it's in pretty rude 98 00:04:55,839 --> 00:04:58,200 Speaker 1: health right now. Then what did Tara Hudson when you 99 00:04:58,279 --> 00:05:00,400 Speaker 1: call on a bunch of fancying people that you're probably 100 00:05:00,440 --> 00:05:04,040 Speaker 1: calling on Henry and Megan over in Vancouver for all 101 00:05:04,040 --> 00:05:07,560 Speaker 1: I know. But then the fancy people, are they over 102 00:05:07,600 --> 00:05:09,760 Speaker 1: owned in equities or not? I mean, are they are 103 00:05:09,760 --> 00:05:12,400 Speaker 1: they all in on this bull market? Are you finding 104 00:05:12,440 --> 00:05:17,000 Speaker 1: real skepticism out there? Yeah, there is a lot of skepticism. 105 00:05:17,080 --> 00:05:18,400 Speaker 1: I mean, you know, I think there's a lot of 106 00:05:18,440 --> 00:05:20,200 Speaker 1: sort of tourist and equities. People have sort of been 107 00:05:20,200 --> 00:05:23,840 Speaker 1: stuck into equities but don't have very much conviction. Uh. 108 00:05:23,960 --> 00:05:25,839 Speaker 1: You know, it's that classic sort of fear of missing 109 00:05:25,839 --> 00:05:28,760 Speaker 1: out trade. So you know, there's a lot of there's 110 00:05:28,760 --> 00:05:32,120 Speaker 1: not a lot of conviction. Um, you know a b 111 00:05:32,760 --> 00:05:35,200 Speaker 1: I think a lot of people are the wrong stuff. Um. 112 00:05:35,240 --> 00:05:36,560 Speaker 1: You know a lot of people in course of text 113 00:05:36,640 --> 00:05:38,120 Speaker 1: run away from a lot of people that you know, 114 00:05:38,120 --> 00:05:40,520 Speaker 1: they're very nervous about chasing it. And and there's this 115 00:05:40,600 --> 00:05:44,479 Speaker 1: sort of siren call of international equity versus versus the US. 116 00:05:44,520 --> 00:05:46,440 Speaker 1: I mean, how can the US just keep out performing 117 00:05:46,520 --> 00:05:49,640 Speaker 1: year after year? Um? Well, I would make the case 118 00:05:49,720 --> 00:05:51,640 Speaker 1: that it can again this year, right, I think growth 119 00:05:51,680 --> 00:05:54,360 Speaker 1: expectations outside the US too high. A real idea of 120 00:05:54,440 --> 00:05:59,120 Speaker 1: someone this bull shot, I meant, some of the bearishness. 121 00:05:59,120 --> 00:06:00,919 Speaker 1: At the same time, we there are a lot of 122 00:06:00,920 --> 00:06:03,200 Speaker 1: people who agree with him, And Ben, does that make 123 00:06:03,240 --> 00:06:06,479 Speaker 1: you worry that a lot of people actually agree that 124 00:06:06,560 --> 00:06:10,719 Speaker 1: it is time to stay invested and invest more? You know, 125 00:06:11,080 --> 00:06:12,760 Speaker 1: you're definitely not going to make because you know, we 126 00:06:12,800 --> 00:06:14,760 Speaker 1: madly decent last year, right, I mean that was a 127 00:06:14,760 --> 00:06:18,360 Speaker 1: complete aberration. I all, I stand essentially arguing that you know, 128 00:06:18,560 --> 00:06:20,719 Speaker 1: the US equities are going to move with earnings here, right, 129 00:06:20,760 --> 00:06:21,960 Speaker 1: I mean we we we have a we have a 130 00:06:22,040 --> 00:06:24,600 Speaker 1: U S earnings recovery which is going to gradually strengthens 131 00:06:24,600 --> 00:06:27,240 Speaker 1: thro that the year. I don't think valuations are expensive. 132 00:06:27,279 --> 00:06:29,400 Speaker 1: I think that you know, I think they're well supported. 133 00:06:29,400 --> 00:06:31,880 Speaker 1: I do think the world has changed enough in terms 134 00:06:31,920 --> 00:06:34,400 Speaker 1: of tech, in terms of discount rate, in terms of 135 00:06:34,400 --> 00:06:37,400 Speaker 1: tax rate that you know, an eighteen times multiple is 136 00:06:37,600 --> 00:06:40,080 Speaker 1: is sort of the new normal role than necessarily something 137 00:06:40,120 --> 00:06:43,200 Speaker 1: to be to be afraid of. Ben. We've gotta get 138 00:06:43,200 --> 00:06:45,359 Speaker 1: back really great stuff. And I don't think we've managed 139 00:06:45,360 --> 00:06:47,640 Speaker 1: to talk since the massive call that you made last year. 140 00:06:47,680 --> 00:06:52,000 Speaker 1: So congratulations on just a stellar coal. Didn't talk about it, 141 00:06:52,080 --> 00:06:54,360 Speaker 1: but you know he missed. He missed about temper cent 142 00:06:54,400 --> 00:06:58,800 Speaker 1: of upside rock. I thank thank you, Ben. Later their 143 00:06:58,800 --> 00:07:02,040 Speaker 1: tower had some research see formerly of hs f C. 144 00:07:06,080 --> 00:07:09,400 Speaker 1: John Yarmouth comes out of National Industries Money in Louisville 145 00:07:09,720 --> 00:07:12,600 Speaker 1: a million years ago. He did what you did if 146 00:07:12,640 --> 00:07:15,960 Speaker 1: you were liberal in nive, he left the Republican Party 147 00:07:16,240 --> 00:07:19,720 Speaker 1: and wandered over to the Democrats as well. Speaker Pelosi 148 00:07:19,800 --> 00:07:22,120 Speaker 1: loves him so much he put him in charge of budget, 149 00:07:22,120 --> 00:07:24,440 Speaker 1: which is a good and beautiful thing. And Mr Yarmouth 150 00:07:24,720 --> 00:07:27,840 Speaker 1: of Louisville joins us this morning, John Yarmouth, what is 151 00:07:27,880 --> 00:07:30,280 Speaker 1: the state of your Democratic Party? Is that the Will 152 00:07:30,400 --> 00:07:33,880 Speaker 1: Rogers Party where it's an ungodly mess? Or can some 153 00:07:34,040 --> 00:07:38,520 Speaker 1: order actually come to your Democrats? Well, I'll tell you what. 154 00:07:38,640 --> 00:07:41,360 Speaker 1: First of all, thanks for having me. I'm a Cleveland 155 00:07:41,360 --> 00:07:45,000 Speaker 1: Indians fan, so long suffering, but we've been getting better 156 00:07:45,000 --> 00:07:51,560 Speaker 1: and better and and uh there's always next season. Um. Well, 157 00:07:51,600 --> 00:07:56,480 Speaker 1: obviously right now we're having uh some uh internal struggles. 158 00:07:56,520 --> 00:07:59,680 Speaker 1: But I think what I pick up in my district 159 00:07:59,720 --> 00:08:02,360 Speaker 1: and all around the country is that the only thing 160 00:08:02,400 --> 00:08:05,120 Speaker 1: Democrats want to do is beat Donald Trump. And I 161 00:08:05,200 --> 00:08:09,320 Speaker 1: really am optimistic that we'll pull together. And um, you know, 162 00:08:09,400 --> 00:08:13,040 Speaker 1: if Bernie Sanders is is the nominee, everybody else is 163 00:08:13,080 --> 00:08:15,040 Speaker 1: going to vote for him. If Bernie Sanders is not 164 00:08:15,120 --> 00:08:17,320 Speaker 1: the nominee, Bernie Sanders, people are going to vote for 165 00:08:17,360 --> 00:08:20,760 Speaker 1: the nominee because everyone knows that from our perspective, Trump 166 00:08:20,800 --> 00:08:23,200 Speaker 1: is a worst fate you are into such a most 167 00:08:23,240 --> 00:08:26,360 Speaker 1: interesting geography, of course, your battles of the Senate majority leader, 168 00:08:26,400 --> 00:08:29,120 Speaker 1: and of course the state of an interesting interesting politics 169 00:08:29,120 --> 00:08:32,320 Speaker 1: of Kentucky as well. Is the prescription here the middle 170 00:08:32,360 --> 00:08:36,600 Speaker 1: ground of Biden Bloomberg as a prescription here something younger, 171 00:08:36,679 --> 00:08:38,960 Speaker 1: hipper like a few of the other candidates. Which way 172 00:08:38,960 --> 00:08:42,240 Speaker 1: do you cut it? You know, I have not resolved 173 00:08:42,240 --> 00:08:44,480 Speaker 1: that in my own head. I've listened to both sides, 174 00:08:44,520 --> 00:08:47,000 Speaker 1: and and I really hate to waffle in this, but 175 00:08:47,120 --> 00:08:50,560 Speaker 1: I'm not sure. Uh. I do know though, that that 176 00:08:50,720 --> 00:08:54,480 Speaker 1: the biggest motivating factor right now is is Donald Trump. 177 00:08:54,559 --> 00:08:58,240 Speaker 1: And so you know, as the pole. The Quinnipiac poll 178 00:08:58,320 --> 00:09:03,800 Speaker 1: showed yesterday all of the top six beat Donald Trump. Uh. 179 00:09:03,840 --> 00:09:08,199 Speaker 1: And and Donald Trump is from so he looks to 180 00:09:08,240 --> 00:09:11,679 Speaker 1: be pretty much kept at that number. So I'm not 181 00:09:11,880 --> 00:09:15,440 Speaker 1: overly worried about our nominee, about who our nominee is. 182 00:09:16,120 --> 00:09:19,280 Speaker 1: I do think, however, that the future of our party 183 00:09:19,400 --> 00:09:22,480 Speaker 1: is going to arrest to a certain extent, on who 184 00:09:22,520 --> 00:09:26,640 Speaker 1: can deliver on the promises of the agenda they make. 185 00:09:27,200 --> 00:09:31,120 Speaker 1: And I worried that m Bernie Sanders or Elizabeth Warren 186 00:09:31,559 --> 00:09:34,800 Speaker 1: will not be able to deliver on their agenda having 187 00:09:34,800 --> 00:09:37,679 Speaker 1: been in Congress now, but this is my fourteenth year. Uh, 188 00:09:37,880 --> 00:09:41,720 Speaker 1: you don't get that kind of revolutionary change in Congress. 189 00:09:42,040 --> 00:09:46,040 Speaker 1: So John two points, you're making care winning and governing, 190 00:09:46,320 --> 00:09:48,400 Speaker 1: And I want to just stress test the winning part 191 00:09:48,400 --> 00:09:51,320 Speaker 1: of it. Do you really think a self proclaimed democratic 192 00:09:51,440 --> 00:09:55,560 Speaker 1: socialist can win over people in places like Kentucky and 193 00:09:55,559 --> 00:09:57,480 Speaker 1: can win other people in the swing tites as well? 194 00:09:57,640 --> 00:09:59,840 Speaker 1: Is this a candidate in Senator Sanders that can really 195 00:10:00,080 --> 00:10:03,520 Speaker 1: the country together? No? But I don't think so. But 196 00:10:03,600 --> 00:10:06,760 Speaker 1: I think what what Bernie Sanders does is he brings 197 00:10:06,800 --> 00:10:09,200 Speaker 1: a lot of new voters into the equation. And I 198 00:10:09,240 --> 00:10:11,760 Speaker 1: think that's the mistake a lot of kind of conventional 199 00:10:11,800 --> 00:10:15,800 Speaker 1: analysis of this election is people are making and that 200 00:10:15,960 --> 00:10:17,760 Speaker 1: is to assume it's going to be the same voting 201 00:10:18,040 --> 00:10:21,240 Speaker 1: uh block, and it's not going to be. There have 202 00:10:21,280 --> 00:10:26,040 Speaker 1: been one point four million new voter registrations in Wisconsin, Michigan, 203 00:10:26,160 --> 00:10:31,320 Speaker 1: in Pennsylvania since six Out of those, four hundred thousand 204 00:10:31,320 --> 00:10:35,480 Speaker 1: registered independent, seven hundred fifty thousand registered Democrats, and two 205 00:10:35,520 --> 00:10:38,640 Speaker 1: hundred fifty thousand Republicans. That's a three to one partisan 206 00:10:38,720 --> 00:10:41,640 Speaker 1: registration advantage that's going to be awfully hard for Donald 207 00:10:41,679 --> 00:10:45,600 Speaker 1: Trump to overcome. One thing I'm struck by Kevin's really 208 00:10:45,600 --> 00:10:48,480 Speaker 1: talking about this is our Bloomberg got Washington correspondent from 209 00:10:48,520 --> 00:10:50,839 Speaker 1: New Hampshire and he was saying, Uh, in Iowa, the 210 00:10:50,920 --> 00:10:53,680 Speaker 1: swing voter, the middle voter was actually looking at either 211 00:10:53,720 --> 00:10:58,560 Speaker 1: Sanders or Trump. It was not necessarily a moderate Democrat. 212 00:10:58,640 --> 00:11:00,760 Speaker 1: And I'm wondering how represents and if that is. In 213 00:11:00,800 --> 00:11:04,080 Speaker 1: other words, is that really the swing vote is to 214 00:11:04,160 --> 00:11:07,280 Speaker 1: a more socialist or more kind of populist Telt, not 215 00:11:07,360 --> 00:11:11,000 Speaker 1: socialist populist Telt, rather than the middle ground. Well, I 216 00:11:11,040 --> 00:11:13,720 Speaker 1: think that is at least I think that is um 217 00:11:14,080 --> 00:11:16,679 Speaker 1: the key those are those are populous motors. Those are 218 00:11:16,960 --> 00:11:21,320 Speaker 1: people who they who think the the economy that the 219 00:11:21,360 --> 00:11:25,439 Speaker 1: advantage they growing economy, the new economy is is passing 220 00:11:25,480 --> 00:11:28,240 Speaker 1: them by, and they're looking for a government that's going 221 00:11:28,280 --> 00:11:31,440 Speaker 1: to uh to pay attention to them and to make 222 00:11:31,520 --> 00:11:35,719 Speaker 1: the economy work for them. So I think that is 223 00:11:35,760 --> 00:11:39,320 Speaker 1: an interesting voting block, and I think that explains Bernie's 224 00:11:39,360 --> 00:11:42,559 Speaker 1: appeal to too many of those people. The state review 225 00:11:42,679 --> 00:11:45,839 Speaker 1: is the Midwest, of course, the key states Michigan, Wisconsin, 226 00:11:45,920 --> 00:11:48,400 Speaker 1: and the rest. But I would really look at Kentucky 227 00:11:48,640 --> 00:11:53,440 Speaker 1: is a really interesting mix of politics as well. How 228 00:11:53,480 --> 00:11:57,360 Speaker 1: can the Northeasterners, the East coast elites, how can they 229 00:11:57,480 --> 00:11:59,960 Speaker 1: do in Kentucky right now? Are you going to sell 230 00:12:00,040 --> 00:12:02,600 Speaker 1: Senator Warren in Kentucky? For that matter, are you gonna 231 00:12:02,600 --> 00:12:06,400 Speaker 1: sell Michael Bloomberg in Kentucky? Well, I think Michael Bloomberg 232 00:12:06,440 --> 00:12:09,439 Speaker 1: actually would sell pretty well in Kentucky. I think Elizabeth 233 00:12:09,440 --> 00:12:12,760 Speaker 1: Warren would. She's been to my district. She sells incredibly 234 00:12:12,760 --> 00:12:14,600 Speaker 1: well in Louisville. She has a rock star there, and 235 00:12:14,640 --> 00:12:16,840 Speaker 1: she would be in Lexington. And you know, we just 236 00:12:16,880 --> 00:12:20,280 Speaker 1: won the governor's race um last fall, and we did 237 00:12:20,280 --> 00:12:22,720 Speaker 1: it based on the votes in Louisville, Lexington and the 238 00:12:22,720 --> 00:12:26,640 Speaker 1: Cincinnati suburbs. I think Elizabeth Warren would appeal very well there. 239 00:12:27,520 --> 00:12:31,000 Speaker 1: So it's gonna be tough in Kentucky. Donald Trump is 240 00:12:31,040 --> 00:12:36,120 Speaker 1: still popular in outside of the urban areas and he 241 00:12:37,880 --> 00:12:40,760 Speaker 1: will remain popular I think through through this election year. 242 00:12:40,760 --> 00:12:43,920 Speaker 1: And of course Mitch has sold his soul uh to 243 00:12:44,080 --> 00:12:48,000 Speaker 1: Donald Trump and and as running as well, So, um, 244 00:12:48,080 --> 00:12:50,560 Speaker 1: you're gonna have a tough tandem they're running in the state. 245 00:12:50,760 --> 00:12:53,440 Speaker 1: John Quick final question, if we can just on the budget, 246 00:12:53,600 --> 00:12:55,840 Speaker 1: if I may, and not on the composition of the budget, 247 00:12:55,880 --> 00:12:59,000 Speaker 1: just on the size. It's being worried about the size 248 00:12:59,000 --> 00:13:04,040 Speaker 1: of the budget popular anymore. Anyway, I don't see it anywhere. 249 00:13:04,240 --> 00:13:07,160 Speaker 1: The President said nobody who cares about the budget. Republicans 250 00:13:07,160 --> 00:13:10,960 Speaker 1: have basically given up as well. McK mulvaney has essentially 251 00:13:11,000 --> 00:13:14,520 Speaker 1: given up the acting cheapest staff has run the OMB 252 00:13:15,360 --> 00:13:18,120 Speaker 1: and and as a real deficit hawk. And I think 253 00:13:18,120 --> 00:13:20,880 Speaker 1: one of the things that we focus on is, yes, 254 00:13:20,920 --> 00:13:24,560 Speaker 1: they're they're sizeable deficits and maybe increased under the Trump administration. 255 00:13:24,960 --> 00:13:27,920 Speaker 1: But we've got sizeable deficits in the in this nation 256 00:13:28,000 --> 00:13:32,719 Speaker 1: deficits and infrastructure deficits, and education and and some other areas, 257 00:13:32,840 --> 00:13:35,960 Speaker 1: and right now, and we've had a number of economists 258 00:13:36,679 --> 00:13:39,840 Speaker 1: across the spectrum come to our committee and say, you know, 259 00:13:39,880 --> 00:13:41,960 Speaker 1: now is the time to make those investments. It's not 260 00:13:42,000 --> 00:13:45,400 Speaker 1: the time to shrink shrink back very quickly. Here, Congressman, 261 00:13:45,440 --> 00:13:48,280 Speaker 1: the Louisville Batts is it the best triple A franchise 262 00:13:48,360 --> 00:13:51,520 Speaker 1: in American baseball? I don't think there's any question about it. 263 00:13:51,840 --> 00:13:55,640 Speaker 1: And we have a great, great, great stadium right on 264 00:13:55,679 --> 00:13:59,680 Speaker 1: the river. The park and uh, and we said attendance 265 00:13:59,720 --> 00:14:03,199 Speaker 1: record every year. It's a it's a wonderful place. And yeah, 266 00:14:03,679 --> 00:14:07,800 Speaker 1: now they don't win much, but yeah, small detail. Cincinnati 267 00:14:07,840 --> 00:14:09,920 Speaker 1: takes all our good players too soon. It has been 268 00:14:09,920 --> 00:14:12,920 Speaker 1: too long, folks. So Louisville Redbirds always the best of 269 00:14:13,000 --> 00:14:15,319 Speaker 1: Triple A baseball. Cox and thank you so much. John 270 00:14:15,440 --> 00:14:20,600 Speaker 1: Yarmouth of Louisville, the Democrat with us this morning from Kentucky. 271 00:14:22,680 --> 00:14:24,840 Speaker 1: Let's do this. Let's set up a different issue of 272 00:14:24,880 --> 00:14:27,720 Speaker 1: foreign affairs. As you all know, I adore it, John 273 00:14:27,720 --> 00:14:30,400 Speaker 1: Farrow the major thing with Gideon Rose effort, as he writes, 274 00:14:30,440 --> 00:14:34,440 Speaker 1: with a big fun see John over here. Even old 275 00:14:34,480 --> 00:14:37,560 Speaker 1: fossils like me can read it. But this time is different. 276 00:14:37,600 --> 00:14:40,680 Speaker 1: It's a theme. It's about coming home America. But far more, 277 00:14:41,360 --> 00:14:44,160 Speaker 1: this is the love affair that we have on international 278 00:14:44,200 --> 00:14:48,520 Speaker 1: relations in foreign policy, and that's exceptionally deep. Gideon Rose 279 00:14:48,600 --> 00:14:52,040 Speaker 1: joins us now the force behind Foreign Affairs magazine. Gideon, 280 00:14:52,160 --> 00:14:54,040 Speaker 1: I want to go to the politics at the moment, 281 00:14:54,080 --> 00:14:57,640 Speaker 1: the vice president, Vice President Biden writing an essay for 282 00:14:57,840 --> 00:15:01,520 Speaker 1: you link New Hampshire and the vote today and the 283 00:15:01,640 --> 00:15:05,880 Speaker 1: desperation of the Biden campaign into what Joe Biden wrote 284 00:15:05,920 --> 00:15:09,680 Speaker 1: for you at Foreign Affairs. So what Biden wants to 285 00:15:09,760 --> 00:15:14,280 Speaker 1: do is to go back to the Obama years, uh, 286 00:15:14,320 --> 00:15:16,440 Speaker 1: not only when he was in power in the White House, 287 00:15:17,080 --> 00:15:21,400 Speaker 1: but when American policies were more cooperative and trying to 288 00:15:21,440 --> 00:15:24,720 Speaker 1: help lead the alliance and the international system rather than 289 00:15:24,760 --> 00:15:29,640 Speaker 1: sort of aggressively assert just US interests alone or America 290 00:15:29,680 --> 00:15:34,240 Speaker 1: first policies. And the details of that are pretty frankly 291 00:15:34,280 --> 00:15:36,880 Speaker 1: common across most of the Democratic candidates. I think that 292 00:15:37,080 --> 00:15:40,320 Speaker 1: they all want to put an emphasis on reducing inequality. 293 00:15:40,560 --> 00:15:44,440 Speaker 1: They all want to put an emphasis on cooperative relations 294 00:15:44,440 --> 00:15:48,520 Speaker 1: with American allies. Um. And the question is will the 295 00:15:48,600 --> 00:15:51,200 Speaker 1: world actually first of all, will the Democrats get back 296 00:15:51,240 --> 00:15:53,920 Speaker 1: in And second of all, will the world be ready 297 00:15:54,040 --> 00:15:57,840 Speaker 1: to let America play a role uh like it used 298 00:15:57,880 --> 00:16:02,280 Speaker 1: to once it has gotten the hack it's desire to getting. 299 00:16:02,320 --> 00:16:05,360 Speaker 1: We always remember that debate of former President Barack Obama 300 00:16:05,560 --> 00:16:08,640 Speaker 1: with Mitt Romney and Senator Romney brought up the risk 301 00:16:08,680 --> 00:16:11,280 Speaker 1: that is Russia, and Barack Obama turned around and said 302 00:16:11,320 --> 00:16:13,920 Speaker 1: the nineteen eighties would want would like its foreign policy back, 303 00:16:14,320 --> 00:16:18,120 Speaker 1: And how wrong the former President Barack Obama was on 304 00:16:18,160 --> 00:16:20,120 Speaker 1: the risk that Russia posed at that given time and 305 00:16:20,160 --> 00:16:22,480 Speaker 1: the risk that Russia would pose in the coming years. 306 00:16:22,840 --> 00:16:26,280 Speaker 1: What strikes me as almost insane watching the debates of 307 00:16:26,320 --> 00:16:29,640 Speaker 1: these Democratic candidates is how little mention of China we 308 00:16:29,680 --> 00:16:32,760 Speaker 1: get right now something stunning, Captain. In the last twenty 309 00:16:32,840 --> 00:16:37,360 Speaker 1: four hours, the d o J announced charges against four 310 00:16:37,400 --> 00:16:41,560 Speaker 1: members of China's People's Liberation Army for the seventeen hack 311 00:16:42,080 --> 00:16:45,000 Speaker 1: of Equifax. And this is what Attorney General William Barr 312 00:16:45,040 --> 00:16:48,120 Speaker 1: had to say. This was a deliberate and sweeping intrusion 313 00:16:48,120 --> 00:16:51,160 Speaker 1: into the private information of the American people. Today, we 314 00:16:51,200 --> 00:16:53,720 Speaker 1: hold p l A Hack as accountable for their criminal actions, 315 00:16:54,000 --> 00:16:56,360 Speaker 1: and we remind the Chinese government that we have the 316 00:16:56,440 --> 00:16:59,720 Speaker 1: capability to remove the Internet cloak of anonymity and find 317 00:16:59,720 --> 00:17:03,280 Speaker 1: the hack because that nation repeatedly deploys against us. Why 318 00:17:03,320 --> 00:17:06,879 Speaker 1: do I hear so little from the Democrats on the 319 00:17:07,000 --> 00:17:10,720 Speaker 1: risk that China poses to the security of this country. Okay, 320 00:17:10,760 --> 00:17:12,560 Speaker 1: first of all, Johnathan, I'm gonna push back a little 321 00:17:12,560 --> 00:17:15,440 Speaker 1: bit on what you said, because Russia has indeed been 322 00:17:15,480 --> 00:17:18,919 Speaker 1: trying to play a major spoiler role. They have not 323 00:17:19,119 --> 00:17:22,560 Speaker 1: just violated borders in places like Ukraine with force and 324 00:17:23,160 --> 00:17:26,040 Speaker 1: annexation of crimea, but they've just tried to mess with 325 00:17:26,160 --> 00:17:29,600 Speaker 1: elections across the board. The Chinese have not done anything 326 00:17:29,680 --> 00:17:32,239 Speaker 1: like that. The Chinese have been much more responsible than 327 00:17:32,280 --> 00:17:35,639 Speaker 1: the Russians. And the threat China poses to American hegemony 328 00:17:35,840 --> 00:17:39,200 Speaker 1: and to the global order is a long term challenge 329 00:17:39,520 --> 00:17:42,200 Speaker 1: rather than a media crisis. This is not an attempt. 330 00:17:42,280 --> 00:17:46,120 Speaker 1: These were individual companies and individual actors. It's not at 331 00:17:46,119 --> 00:17:49,520 Speaker 1: the same level as the direct Russian challenge. But the 332 00:17:49,600 --> 00:17:52,719 Speaker 1: question of what how we should compete with China over 333 00:17:52,760 --> 00:17:55,159 Speaker 1: the long term is a really interesting one. And the 334 00:17:55,160 --> 00:17:59,280 Speaker 1: big question that nobody wants to talk about is now 335 00:17:59,320 --> 00:18:02,080 Speaker 1: that China is so big and strong that it can't 336 00:18:02,119 --> 00:18:05,359 Speaker 1: be UH squashed and can't be put back in its box, 337 00:18:05,760 --> 00:18:08,439 Speaker 1: what do they get from that in power? What is 338 00:18:08,480 --> 00:18:12,000 Speaker 1: the uh is the price that America will have to 339 00:18:12,080 --> 00:18:15,640 Speaker 1: pay for withdrawal. We were dominating the world somewhat. If 340 00:18:15,680 --> 00:18:18,280 Speaker 1: we no longer want to do that, we're gonna have 341 00:18:18,400 --> 00:18:21,080 Speaker 1: to give up certain things we want, either spears of 342 00:18:21,119 --> 00:18:24,040 Speaker 1: influence to other countries, or certain issues we used to 343 00:18:24,119 --> 00:18:26,640 Speaker 1: lecture the world about we won't be able to, or 344 00:18:26,880 --> 00:18:30,440 Speaker 1: various kinds of things. The question becomes if anybody wants 345 00:18:30,440 --> 00:18:32,280 Speaker 1: to deal with China. It's not so much what's your 346 00:18:32,280 --> 00:18:34,359 Speaker 1: policy that's going to protect America in terms of the 347 00:18:34,400 --> 00:18:37,760 Speaker 1: immediate Chinese threat, because we're safe from that. It's what 348 00:18:37,960 --> 00:18:40,399 Speaker 1: is it that you're gonna have to give China to 349 00:18:40,480 --> 00:18:45,639 Speaker 1: accommodate its rise that you don't currently want to give them. Gideon, 350 00:18:45,760 --> 00:18:47,960 Speaker 1: let's clarify a cup of things. I've made the point 351 00:18:47,960 --> 00:18:50,160 Speaker 1: the Russia was a risk. It's transplant that they were 352 00:18:50,200 --> 00:18:53,040 Speaker 1: indeed a very real risk, and it's a risk that 353 00:18:53,080 --> 00:18:55,199 Speaker 1: the former President Barack Obama did not acknowledge at the 354 00:18:55,200 --> 00:18:56,840 Speaker 1: time when he sat across from mit Romney in that 355 00:18:56,880 --> 00:18:59,280 Speaker 1: debate point at one point two, these are not just 356 00:18:59,400 --> 00:19:02,399 Speaker 1: rogue actor? Is this according to the Attorney general? A 357 00:19:02,480 --> 00:19:06,480 Speaker 1: people from the People's Liberation Army of China? This is 358 00:19:06,480 --> 00:19:10,800 Speaker 1: the Unfortunately, at this point, the Chinese government has almost 359 00:19:10,800 --> 00:19:12,760 Speaker 1: at least as much a credibility as the U. S. 360 00:19:12,800 --> 00:19:15,879 Speaker 1: Attorney General, who has been a politicize a person pushing 361 00:19:15,920 --> 00:19:19,960 Speaker 1: administration line. The question for American foreign policy is not 362 00:19:20,280 --> 00:19:22,800 Speaker 1: just how to deal with the Chinese. Equifax and a 363 00:19:22,800 --> 00:19:25,480 Speaker 1: few bunch of hackers who are trying to get commercial 364 00:19:25,520 --> 00:19:29,399 Speaker 1: intelligence in various things The question is, given that China 365 00:19:29,600 --> 00:19:32,119 Speaker 1: is such a major part of the global economy, is 366 00:19:32,119 --> 00:19:35,520 Speaker 1: such a major power in the Pacific, can actually dominate 367 00:19:35,600 --> 00:19:38,760 Speaker 1: certain areas militarily that we used to actually care about, 368 00:19:39,160 --> 00:19:40,800 Speaker 1: what is it that we're going to do about that. 369 00:19:40,840 --> 00:19:43,639 Speaker 1: We can't just confront them, We can't just bully getting 370 00:19:43,680 --> 00:19:45,880 Speaker 1: The point you're making is to be fragmatic. I think 371 00:19:45,880 --> 00:19:48,080 Speaker 1: that's an argument that's going to resonate with some people. 372 00:19:48,359 --> 00:19:50,840 Speaker 1: But we've also made another argument there. Are you saying 373 00:19:50,840 --> 00:19:56,640 Speaker 1: the Attorney General is politicizing the hack of Equifax. I'm 374 00:19:56,680 --> 00:20:00,800 Speaker 1: saying that everything and everybody knows that this administration treats 375 00:20:01,640 --> 00:20:06,560 Speaker 1: it's foreign policy announcements as part of its broader political agenda, 376 00:20:07,040 --> 00:20:12,600 Speaker 1: and I would look to other sources for objective assessments 377 00:20:12,640 --> 00:20:16,919 Speaker 1: of the Chinese threat rather than official American UH diplomats 378 00:20:16,920 --> 00:20:20,720 Speaker 1: and spokesman at this point. And that's quite worrying. Well, 379 00:20:20,800 --> 00:20:25,400 Speaker 1: it is, and it isn't that it's not clear. It's 380 00:20:25,520 --> 00:20:28,439 Speaker 1: it's not clear to me that American officials have had 381 00:20:28,440 --> 00:20:31,080 Speaker 1: a great deal of authority for any time now, and 382 00:20:31,240 --> 00:20:35,040 Speaker 1: this administration has basically continued that process. And so I 383 00:20:35,080 --> 00:20:38,280 Speaker 1: think that the markets and the world, and your listeners 384 00:20:38,320 --> 00:20:41,600 Speaker 1: are more than intelligent and mature enough to make their 385 00:20:41,600 --> 00:20:45,680 Speaker 1: own calls on the substance without necessarily taking guidance from 386 00:20:45,720 --> 00:20:47,680 Speaker 1: the White House kitty. And there's a question sort of 387 00:20:47,720 --> 00:20:50,480 Speaker 1: implicit in the discussion that you're having, which is the 388 00:20:50,560 --> 00:20:54,359 Speaker 1: policy response to China, whether it's national security, Moving on 389 00:20:54,440 --> 00:20:57,520 Speaker 1: to trade, and we talk about the Democratic primaries. We 390 00:20:57,560 --> 00:21:00,840 Speaker 1: have not really heard much on what they will take 391 00:21:01,119 --> 00:21:03,600 Speaker 1: with respect to the trade war and sort of trying 392 00:21:03,600 --> 00:21:06,679 Speaker 1: to take a harder stance with China. What is the 393 00:21:06,680 --> 00:21:09,800 Speaker 1: prevailing line within the Democratic Party right now and how 394 00:21:09,880 --> 00:21:12,520 Speaker 1: they plan to go after China, not from a national 395 00:21:12,560 --> 00:21:16,679 Speaker 1: security standpoint, but from a trade standpoint. So that's a 396 00:21:16,760 --> 00:21:20,040 Speaker 1: great question, and the answer is there is no single 397 00:21:20,119 --> 00:21:22,919 Speaker 1: line because there are two major camps in the party. 398 00:21:23,160 --> 00:21:26,679 Speaker 1: There's the same kind of anti trade forces that have 399 00:21:26,800 --> 00:21:30,240 Speaker 1: gotten dominance in the Republican Party and this administration are 400 00:21:30,280 --> 00:21:33,880 Speaker 1: present in the Democratic Party. UH. Certainly among the standers, 401 00:21:33,960 --> 00:21:36,840 Speaker 1: voters and many on the progressive side who see trade 402 00:21:36,840 --> 00:21:40,879 Speaker 1: as having worked against America's interests, But the mainstream foreign 403 00:21:40,920 --> 00:21:45,520 Speaker 1: policy and trade establishment UH still on the Democratic side, 404 00:21:45,560 --> 00:21:48,080 Speaker 1: the the centrists and most of the policy people whould 405 00:21:48,080 --> 00:21:50,680 Speaker 1: go into the government. Believe that something like the TPP 406 00:21:51,080 --> 00:21:54,760 Speaker 1: was the Trans Satific Partnership a wonderful idea that would 407 00:21:54,800 --> 00:21:59,360 Speaker 1: be a way to respond to China by coordinating all 408 00:21:59,480 --> 00:22:03,480 Speaker 1: the on Chinese forces and countries in the region in 409 00:22:03,880 --> 00:22:06,600 Speaker 1: an anti Chinese alliance. So trade can be a part 410 00:22:06,640 --> 00:22:10,400 Speaker 1: of your national security question. But the question that you're 411 00:22:10,400 --> 00:22:13,520 Speaker 1: gonna fight China on trade and security and everything else 412 00:22:13,840 --> 00:22:16,119 Speaker 1: where is it going to stop. Nobody knows what the 413 00:22:16,119 --> 00:22:19,520 Speaker 1: Democrats are gonna do towards China because there are different 414 00:22:19,520 --> 00:22:22,080 Speaker 1: forces in the party pulling in different directions. Gideon Rose, 415 00:22:22,080 --> 00:22:24,160 Speaker 1: thank you so much. It is coming home in America. 416 00:22:24,359 --> 00:22:28,199 Speaker 1: Just a rave review including important essays from Graham, Allison 417 00:22:28,680 --> 00:22:31,800 Speaker 1: among others, and Thomas Right. Foreign Affairs can't say enough 418 00:22:31,840 --> 00:22:34,639 Speaker 1: about it. I'll do a huge splash on Twitter, U 419 00:22:34,760 --> 00:22:40,160 Speaker 1: and out on LinkedIn on it as well. They used 420 00:22:40,160 --> 00:22:44,119 Speaker 1: to not be a statement to Congress, and then there 421 00:22:44,200 --> 00:22:47,040 Speaker 1: was a thing called the Humphrey Hawkins Full Employment Act 422 00:22:47,040 --> 00:22:52,919 Speaker 1: of eight and we called these testimonies Humphrey Hawkins testimonies, 423 00:22:53,440 --> 00:22:56,400 Speaker 1: and they were great. Sherman Greenspan said nothing in Congress. 424 00:22:56,840 --> 00:22:59,000 Speaker 1: Maybe Phil Graham would get sweaty in the Senate and 425 00:22:59,040 --> 00:23:01,280 Speaker 1: say something. But other than that, John, it was a 426 00:23:01,359 --> 00:23:03,840 Speaker 1: non event until the financial crisis, and I've got to 427 00:23:03,840 --> 00:23:05,600 Speaker 1: say at the moment home, over the last couple of years, 428 00:23:05,600 --> 00:23:07,760 Speaker 1: he's become a non event as well. We talk about 429 00:23:07,760 --> 00:23:10,360 Speaker 1: a grilling on Capitol Hill. What often happens is individual 430 00:23:10,440 --> 00:23:14,119 Speaker 1: lawmakers make it about their individual constituencies and end up 431 00:23:14,119 --> 00:23:15,960 Speaker 1: trying to get a campaign video that they can send 432 00:23:15,960 --> 00:23:18,480 Speaker 1: out to vout in the districts. I don't disagree, and 433 00:23:18,520 --> 00:23:20,880 Speaker 1: it goes on for hours, and then it happens again 434 00:23:20,920 --> 00:23:24,080 Speaker 1: the following day. Steven Stanley Amer's pierpoint with a Stephen, 435 00:23:24,119 --> 00:23:26,120 Speaker 1: let's go to the mathiness of this before we look 436 00:23:26,119 --> 00:23:29,560 Speaker 1: at the other headlines. The chairman seas inflation moving closer 437 00:23:29,600 --> 00:23:34,400 Speaker 1: to two percent over the next few months. Do you agree, Well, 438 00:23:34,440 --> 00:23:37,760 Speaker 1: I think so. I mean, the core PC deflator has 439 00:23:37,760 --> 00:23:40,520 Speaker 1: been the one that's running well below the Fitch target, 440 00:23:40,680 --> 00:23:44,439 Speaker 1: and just we've got three very low monthly readings in 441 00:23:44,480 --> 00:23:47,560 Speaker 1: a row, dropping out of the twelve month window in January, 442 00:23:47,600 --> 00:23:49,520 Speaker 1: silver in March. So I think it's it's really just 443 00:23:49,600 --> 00:23:52,240 Speaker 1: kind of a basis effect. But most of the other 444 00:23:52,520 --> 00:23:55,080 Speaker 1: indicators comple they should have been running much closer to too. 445 00:23:55,480 --> 00:23:57,720 Speaker 1: I mean the statement I guess first do no harm 446 00:23:57,840 --> 00:24:00,000 Speaker 1: is John Bench, you know, don't talk about the virus 447 00:24:00,040 --> 00:24:05,520 Speaker 1: us an inflammatory way. What economics will you listen for today? 448 00:24:05,600 --> 00:24:10,119 Speaker 1: From the chairman? Well, I I think you guys, UM 449 00:24:10,560 --> 00:24:12,040 Speaker 1: covered a lot of it. I mean, I think what 450 00:24:12,080 --> 00:24:14,720 Speaker 1: people want to know is is what's the threshold for 451 00:24:14,760 --> 00:24:17,760 Speaker 1: a material reassessment? And it seems to me that threshold 452 00:24:17,800 --> 00:24:20,639 Speaker 1: is pretty high, and it probably as time passes this 453 00:24:20,720 --> 00:24:22,520 Speaker 1: year it gets higher because I think the closer you 454 00:24:22,560 --> 00:24:25,760 Speaker 1: get to the election, the higher the bar for the 455 00:24:25,760 --> 00:24:28,359 Speaker 1: FED to move in either direction. Um. I think they're 456 00:24:28,440 --> 00:24:32,600 Speaker 1: very comfortable here. Um. You know, I do think that 457 00:24:32,640 --> 00:24:35,600 Speaker 1: the conversation around inflation is very important because there's been 458 00:24:35,600 --> 00:24:38,040 Speaker 1: talk of them kind of changing the uh, the goal 459 00:24:38,119 --> 00:24:40,800 Speaker 1: posts a little bit with regard to inflation. UH that 460 00:24:40,960 --> 00:24:42,920 Speaker 1: I don't think they're ready to talk about that too 461 00:24:42,960 --> 00:24:45,800 Speaker 1: much just yet, but it is important to hear what 462 00:24:45,880 --> 00:24:49,520 Speaker 1: they're saying about inflation, how they view that. UM. And 463 00:24:49,640 --> 00:24:51,520 Speaker 1: I think you're right that they want to say as 464 00:24:51,560 --> 00:24:53,920 Speaker 1: little as possible about the coronavirus. I mean, there was 465 00:24:54,080 --> 00:24:57,680 Speaker 1: one literally one sentence in the whatever it was fifty 466 00:24:57,760 --> 00:25:00,560 Speaker 1: or sixty page monetary policy report that came on Friday 467 00:25:00,560 --> 00:25:03,640 Speaker 1: about the virus, and you know, the news war headlines were, 468 00:25:03,960 --> 00:25:07,480 Speaker 1: you know, virus takes key role and fed's outlook, so 469 00:25:07,600 --> 00:25:09,960 Speaker 1: they can't really say too much about it. The market 470 00:25:10,040 --> 00:25:11,920 Speaker 1: speaking right now, we gotta one to wait on the 471 00:25:12,040 --> 00:25:15,879 Speaker 1: euro right now, one weaker euro off of these headlines. 472 00:25:16,040 --> 00:25:18,199 Speaker 1: You know, Stephen, there's a question, and I think I 473 00:25:18,200 --> 00:25:20,640 Speaker 1: want to go back to the point that John raised, 474 00:25:20,680 --> 00:25:24,119 Speaker 1: which is it becomes an exercise in political punditry on 475 00:25:24,160 --> 00:25:27,200 Speaker 1: the part of the elected officials more than any kind 476 00:25:27,200 --> 00:25:30,679 Speaker 1: of actual information from FED share Powell, and I wonder 477 00:25:30,880 --> 00:25:34,520 Speaker 1: how much that is exacerbated by the repo operation of 478 00:25:34,520 --> 00:25:36,760 Speaker 1: the New York FED. And today we saw yet another 479 00:25:36,920 --> 00:25:40,359 Speaker 1: over subscription of the fourteen day repo operation, the third 480 00:25:40,680 --> 00:25:43,880 Speaker 1: in a row that was oversubscribed, more bids from banks 481 00:25:44,160 --> 00:25:46,879 Speaker 1: than there were available. And I'm wondering a lot of 482 00:25:46,920 --> 00:25:49,000 Speaker 1: people view this as a subsidy for the banks. How 483 00:25:49,080 --> 00:25:51,560 Speaker 1: much will that be at the center of the questioning. 484 00:25:52,200 --> 00:25:53,919 Speaker 1: It sounds like it's going to be a big topic. 485 00:25:54,000 --> 00:25:57,880 Speaker 1: I mean, they were there was a letter sent from 486 00:25:57,880 --> 00:26:01,720 Speaker 1: a number of senators um in advance of the testimony 487 00:26:02,359 --> 00:26:04,439 Speaker 1: about that, So I think it is going to be 488 00:26:04,480 --> 00:26:07,480 Speaker 1: something kind of a populist angle of Hey, you're you know, 489 00:26:07,600 --> 00:26:11,840 Speaker 1: you're subsidized in the banks again, what are you doing? Um? 490 00:26:11,880 --> 00:26:15,320 Speaker 1: And you know, I think Powell has certainly been working 491 00:26:15,440 --> 00:26:17,240 Speaker 1: very hard on making sure he has a good answer 492 00:26:17,280 --> 00:26:19,920 Speaker 1: to that question, because it's definitely gonna come up. Are 493 00:26:19,920 --> 00:26:22,280 Speaker 1: they right? Are the politicians right that the FED has 494 00:26:22,280 --> 00:26:26,040 Speaker 1: been subsidizing the banks? Uh? Well, I mean, I think 495 00:26:26,080 --> 00:26:27,480 Speaker 1: that depends on how you want to look at it. 496 00:26:27,480 --> 00:26:29,359 Speaker 1: I think from the FED standpoint, they would say that 497 00:26:29,400 --> 00:26:33,320 Speaker 1: that that's almost irrelevant in the sense that they had 498 00:26:33,359 --> 00:26:35,040 Speaker 1: to do what they needed to do to make sure 499 00:26:35,080 --> 00:26:38,880 Speaker 1: that the financial system was running smoothly. Um. If it's 500 00:26:38,880 --> 00:26:41,200 Speaker 1: a small subsidient bank to banks, so be it. I 501 00:26:41,680 --> 00:26:45,320 Speaker 1: think in reality, um, the FED had no other choice. 502 00:26:45,359 --> 00:26:48,480 Speaker 1: I mean, if they wanted to uh support and smooth 503 00:26:48,480 --> 00:26:52,639 Speaker 1: over the repo market. Uh, you know, the operations that 504 00:26:52,680 --> 00:26:56,119 Speaker 1: they've conducted were really their only uh way to do 505 00:26:56,160 --> 00:26:59,160 Speaker 1: that in a in a in a timely manner. There's 506 00:26:59,200 --> 00:27:01,520 Speaker 1: been a lot of talk of about a standing repo facility, 507 00:27:01,600 --> 00:27:04,080 Speaker 1: and I think that if they were to go that route, 508 00:27:04,119 --> 00:27:06,760 Speaker 1: it would kind of lessen some of this concern because 509 00:27:06,760 --> 00:27:09,560 Speaker 1: a standing repo facility would be much more broadly available 510 00:27:09,800 --> 00:27:12,280 Speaker 1: than what we have now, which is UM just goes 511 00:27:12,280 --> 00:27:15,160 Speaker 1: through the primary dealers. But that's gonna it's gonna take 512 00:27:15,160 --> 00:27:16,760 Speaker 1: a lot of work to get that going. I mean, 513 00:27:16,800 --> 00:27:19,440 Speaker 1: they have to onboard a whole new group of counterparties 514 00:27:19,480 --> 00:27:22,240 Speaker 1: and set up all the rules and everything, and that 515 00:27:22,320 --> 00:27:25,119 Speaker 1: takes time. So if they do go the route of 516 00:27:25,119 --> 00:27:27,520 Speaker 1: a standing repo facility, I suspect at least part of 517 00:27:27,520 --> 00:27:30,000 Speaker 1: the rationale and their minds will be so that we're 518 00:27:30,400 --> 00:27:32,680 Speaker 1: kind of giving everybody a chance, so to speak, rather 519 00:27:32,760 --> 00:27:34,960 Speaker 1: than just limiting it to the primary dealers as is 520 00:27:35,000 --> 00:27:37,080 Speaker 1: the case now. For many people in this market think 521 00:27:37,119 --> 00:27:39,919 Speaker 1: the FED is conducting QA through its bill buying. The 522 00:27:39,960 --> 00:27:42,320 Speaker 1: FED us of chairman today repeating his pledge that the 523 00:27:42,359 --> 00:27:44,960 Speaker 1: FED will slow built bying. How do they do that 524 00:27:45,000 --> 00:27:47,120 Speaker 1: without a market disruption? Given that there are many many 525 00:27:47,119 --> 00:27:48,919 Speaker 1: people in this market, I'm sure you've spoken to a 526 00:27:48,920 --> 00:27:53,080 Speaker 1: few of them to believe that bill buying is q A. Yeah, Well, 527 00:27:53,119 --> 00:27:54,919 Speaker 1: the only thing they can do really is is to 528 00:27:55,000 --> 00:27:57,960 Speaker 1: be very upfront and and very transparent about what they're 529 00:27:58,000 --> 00:27:59,879 Speaker 1: doing and give us plenty of notice, and and you 530 00:28:00,000 --> 00:28:01,879 Speaker 1: a palace started to do that. We We've got a 531 00:28:01,880 --> 00:28:04,440 Speaker 1: lot of good color at the January press conference, and 532 00:28:04,520 --> 00:28:07,800 Speaker 1: I suspect will here more the same today. But they 533 00:28:07,840 --> 00:28:10,000 Speaker 1: just have to All they can do is make sure 534 00:28:10,040 --> 00:28:12,679 Speaker 1: that people kind of undertand where we're headed and and 535 00:28:12,760 --> 00:28:16,240 Speaker 1: if the market chooses to react to that, and there's 536 00:28:16,240 --> 00:28:18,320 Speaker 1: really not much effect can do. Steve Janey, you're a 537 00:28:18,440 --> 00:28:20,800 Speaker 1: dieing all the optimists. You're brilliant coming out of the 538 00:28:21,080 --> 00:28:23,800 Speaker 1: depths of the financial crisis saying look, we're just gonna survive. 539 00:28:23,800 --> 00:28:27,000 Speaker 1: We're gonna see abandoned GDP better than good. We had 540 00:28:27,000 --> 00:28:29,840 Speaker 1: Benjamin later on this morning from London, who's a very 541 00:28:29,840 --> 00:28:32,560 Speaker 1: optimistic on the equity markets. He's calling about an earnings 542 00:28:32,600 --> 00:28:35,199 Speaker 1: trough as well. Is it the same thing in the 543 00:28:35,200 --> 00:28:38,320 Speaker 1: amirous Pierrepont Woods? Is it? Is it the same you 544 00:28:38,320 --> 00:28:40,680 Speaker 1: know one eight percent g d P and we're just 545 00:28:40,760 --> 00:28:44,960 Speaker 1: grossly misjudging the resiliency of the American economy and we 546 00:28:45,040 --> 00:28:48,280 Speaker 1: get a two point x statistic that surprises, say the 547 00:28:48,320 --> 00:28:51,840 Speaker 1: fourth of July. I would say that's certainly my view, 548 00:28:51,960 --> 00:28:55,440 Speaker 1: and and obviously the you know, the virus situation kind 549 00:28:55,480 --> 00:28:59,480 Speaker 1: of post some clouds on the on the near term horizon. 550 00:28:59,600 --> 00:29:03,880 Speaker 1: But I do believe that the UM, the US China 551 00:29:03,960 --> 00:29:08,360 Speaker 1: trade dispute last year had a pretty significant drag effect 552 00:29:08,480 --> 00:29:10,600 Speaker 1: on the economy, and that coming out of that we 553 00:29:10,600 --> 00:29:13,480 Speaker 1: should do better. We've seen a number of better than 554 00:29:13,520 --> 00:29:19,480 Speaker 1: expected economic releases for January, We've seen a significant improvement 555 00:29:19,600 --> 00:29:24,960 Speaker 1: in consumer and business confidence over the last month or two. UM. 556 00:29:25,000 --> 00:29:27,840 Speaker 1: In the very near term, obviously, we're you know, we're 557 00:29:27,880 --> 00:29:30,200 Speaker 1: kind of struggling through this virus thing and trying to 558 00:29:30,200 --> 00:29:32,400 Speaker 1: get our hands around the how much of an impact 559 00:29:32,400 --> 00:29:35,000 Speaker 1: that's going to have here and globally. But I do 560 00:29:35,120 --> 00:29:37,320 Speaker 1: think that at least in the first half of the year, 561 00:29:37,600 --> 00:29:39,960 Speaker 1: if we can get past the virus, I think the 562 00:29:39,960 --> 00:29:42,200 Speaker 1: economy can do a little better than two And to 563 00:29:42,320 --> 00:29:44,640 Speaker 1: build on that, what does that do for the Federal Reserve? 564 00:29:44,680 --> 00:29:46,520 Speaker 1: How do they respond to that given the fact that 565 00:29:46,600 --> 00:29:50,120 Speaker 1: right now people are expecting at least one rate cut 566 00:29:50,120 --> 00:29:52,360 Speaker 1: by the end of the year. Yeah, I think that 567 00:29:52,400 --> 00:29:54,560 Speaker 1: will probably slowly fade if the day to come in 568 00:29:54,560 --> 00:29:56,080 Speaker 1: the way that I expect. I mean, the fet has 569 00:29:56,120 --> 00:29:57,960 Speaker 1: been very clear that they don't expect to have to 570 00:29:57,960 --> 00:30:02,040 Speaker 1: move anytime soon, and um, you know, I'm on board 571 00:30:02,040 --> 00:30:04,719 Speaker 1: with that. I think right now it's a steady with 572 00:30:04,760 --> 00:30:08,160 Speaker 1: a slight easing bias, right I mean, it's more likely 573 00:30:08,200 --> 00:30:09,360 Speaker 1: if we're going to get a move in the next 574 00:30:09,400 --> 00:30:10,920 Speaker 1: few months, it would be an easy and a titan. 575 00:30:11,240 --> 00:30:12,840 Speaker 1: I think if if the data do play out a 576 00:30:12,880 --> 00:30:15,640 Speaker 1: little better than generally expected, then you just kind of 577 00:30:15,680 --> 00:30:19,440 Speaker 1: move back to um, no bias and and potentially if 578 00:30:19,640 --> 00:30:21,400 Speaker 1: you know, if the data is strong enough, obviously you 579 00:30:21,400 --> 00:30:23,800 Speaker 1: could move to a bias in the direction. But the 580 00:30:23,840 --> 00:30:26,640 Speaker 1: reality is, I just don't see the FED moving before 581 00:30:26,680 --> 00:30:30,600 Speaker 1: the election. The worst business investment right now? Is there 582 00:30:30,640 --> 00:30:34,320 Speaker 1: any spirit to business investment given all these unknowns? Well, 583 00:30:34,360 --> 00:30:36,320 Speaker 1: as I said, I think there was, ah, you know, 584 00:30:36,360 --> 00:30:39,400 Speaker 1: there was a significant pop in business confidence that came 585 00:30:39,400 --> 00:30:42,080 Speaker 1: on the back of the US China jail. I think 586 00:30:42,080 --> 00:30:45,480 Speaker 1: there is scope for a nice improvement in business investment. 587 00:30:45,680 --> 00:30:49,120 Speaker 1: Although you know, if I'm involved in anything in Asia 588 00:30:49,240 --> 00:30:51,200 Speaker 1: right now, I'm probably sitting on my hands again until 589 00:30:51,280 --> 00:30:53,880 Speaker 1: until I get our you know, dispised thing put away. 590 00:30:54,120 --> 00:30:56,360 Speaker 1: Very valuable. Stephen Stanley, thank you so much for them's 591 00:30:56,360 --> 00:31:02,600 Speaker 1: pure pond this morning. Following up on that Sprint T 592 00:31:02,800 --> 00:31:05,720 Speaker 1: Mobile deal. There were four wireless carriers. Now there's gonna 593 00:31:05,720 --> 00:31:10,040 Speaker 1: be three. We finally get this T Mobile Sprint deal done. 594 00:31:10,080 --> 00:31:13,640 Speaker 1: Almost two years in the making. Regulatory hurdles, both at 595 00:31:13,640 --> 00:31:16,080 Speaker 1: the federal and state level all have been cleared. This 596 00:31:16,160 --> 00:31:18,960 Speaker 1: deal is going to go through, giving us what's the 597 00:31:19,000 --> 00:31:21,360 Speaker 1: bottom line here? We talked to a good friend, John Butler, 598 00:31:21,360 --> 00:31:24,680 Speaker 1: recovers all things telecom for Bloomberg Intelligence. John joins us 599 00:31:24,680 --> 00:31:27,600 Speaker 1: here on our Bloomberg Interactive Broker studio. So, John, what's 600 00:31:27,640 --> 00:31:35,120 Speaker 1: the practical implications of T Mobile and Sprint getting together? Finally? So, 601 00:31:35,320 --> 00:31:38,800 Speaker 1: finally the deal is done. It's great news for both 602 00:31:38,840 --> 00:31:42,760 Speaker 1: T Mobile and Sprint. For T Mobile in particular, it 603 00:31:42,840 --> 00:31:47,920 Speaker 1: gives them access to sprints two point five giga hurt spectrum, 604 00:31:47,960 --> 00:31:51,800 Speaker 1: which is a big fat block of nationwide spectrum that 605 00:31:51,960 --> 00:31:55,320 Speaker 1: is ideally suited for five g And so this whole 606 00:31:55,360 --> 00:31:58,640 Speaker 1: deal here, the approval of the deal is going to 607 00:31:58,760 --> 00:32:02,560 Speaker 1: allow T Mobile to really move forward I think, quite 608 00:32:02,560 --> 00:32:07,720 Speaker 1: aggressively on five G. So do consumers, I mean, what's 609 00:32:07,720 --> 00:32:09,520 Speaker 1: gonna what's it gonna mean for consumers? Is there any 610 00:32:09,520 --> 00:32:13,000 Speaker 1: gonna be any real difference in the marketplace? I don't 611 00:32:13,080 --> 00:32:15,320 Speaker 1: think so, you know. I mean that was the concern 612 00:32:15,480 --> 00:32:18,880 Speaker 1: coming in the States, really thought, God, you know, if 613 00:32:18,920 --> 00:32:21,880 Speaker 1: we allow these companies to merge, prices are going to 614 00:32:22,000 --> 00:32:26,000 Speaker 1: go up across the board. The reality is the wireless 615 00:32:26,040 --> 00:32:29,080 Speaker 1: business is a commodity business, and I think there's sort 616 00:32:29,120 --> 00:32:32,920 Speaker 1: of a cap on pricing in general that's out there. 617 00:32:32,960 --> 00:32:36,120 Speaker 1: You know, petit you can see it, particularly a Christmas time, 618 00:32:36,160 --> 00:32:39,479 Speaker 1: you know, the wireless carriers really get into it, and 619 00:32:39,560 --> 00:32:42,440 Speaker 1: so prices tend to fluctuate over the course of the year, 620 00:32:42,880 --> 00:32:45,480 Speaker 1: but on balance they tend to move down over time. 621 00:32:45,560 --> 00:32:47,680 Speaker 1: On a game theory basis, would have Verizon and a 622 00:32:47,760 --> 00:32:49,920 Speaker 1: T and T do if it's a triopoli now and 623 00:32:49,960 --> 00:32:51,720 Speaker 1: they have to merge and go against the pink T 624 00:32:51,840 --> 00:32:54,320 Speaker 1: shirt and all the market share the pink T shirts taking. 625 00:32:54,840 --> 00:32:57,960 Speaker 1: Is there an active visible response from Verizon or A 626 00:32:58,040 --> 00:33:01,960 Speaker 1: T and T. I think for and pushes really hard 627 00:33:02,160 --> 00:33:06,160 Speaker 1: on the C band spectrums coming a year end. You know. Again, 628 00:33:06,320 --> 00:33:09,200 Speaker 1: T Mobile now has access to a big fat chunk 629 00:33:09,200 --> 00:33:13,440 Speaker 1: admit band spectrum, which is ideal for five G. The 630 00:33:13,560 --> 00:33:17,320 Speaker 1: C band spectrum is very similar to that spectrum block 631 00:33:17,400 --> 00:33:20,400 Speaker 1: and I think for Verizon to compete on a level 632 00:33:20,440 --> 00:33:24,280 Speaker 1: of playing field now with T Mobile, they need that spectrum, 633 00:33:24,400 --> 00:33:28,160 Speaker 1: so they're they're actually gonna, I think, really step up 634 00:33:28,200 --> 00:33:31,680 Speaker 1: and be aggressive in most major markets. And I still 635 00:33:31,680 --> 00:33:35,120 Speaker 1: haven't done. I still haven't downloaded Catalina on the Apple, 636 00:33:35,360 --> 00:33:37,880 Speaker 1: you know, the major software upgrade of Apple. Because there's 637 00:33:37,880 --> 00:33:40,840 Speaker 1: so many glitches within it. Why do I need five 638 00:33:40,840 --> 00:33:43,000 Speaker 1: G AM I gonna download, you know, as a phrase 639 00:33:43,040 --> 00:33:46,280 Speaker 1: download to get five G? I think five G. It's 640 00:33:46,280 --> 00:33:49,240 Speaker 1: a great question, Tom. I actually think five G is 641 00:33:49,320 --> 00:33:54,400 Speaker 1: more well suited to enterprise applications, and that's where the 642 00:33:54,440 --> 00:33:57,600 Speaker 1: carriers see a lot of money in margin for you 643 00:33:57,720 --> 00:34:00,840 Speaker 1: and me in the short run. I think it represents 644 00:34:00,840 --> 00:34:03,560 Speaker 1: a step up in capacity, just got much more. This 645 00:34:03,600 --> 00:34:05,320 Speaker 1: is the time I gotta go to Apple and you're 646 00:34:05,400 --> 00:34:08,200 Speaker 1: just omnibus coverage on it. You've been brilliant about staying 647 00:34:08,200 --> 00:34:09,960 Speaker 1: in and the product Apple is going to get out 648 00:34:09,960 --> 00:34:13,040 Speaker 1: of business. They're terrible. And Butler said, wait a minute, 649 00:34:13,360 --> 00:34:15,840 Speaker 1: what's your next essay you're going to write for Bloomberg 650 00:34:15,880 --> 00:34:19,120 Speaker 1: Intelligence on Apple? Is it on is it on services? 651 00:34:19,280 --> 00:34:21,719 Speaker 1: Is it on unit dynamics? I mean, what's the thing 652 00:34:21,880 --> 00:34:25,560 Speaker 1: you're thinking about of Apple into two thousand twenty. So 653 00:34:25,600 --> 00:34:30,120 Speaker 1: in what I'm watching for Apple is number one the 654 00:34:30,239 --> 00:34:34,800 Speaker 1: diversification the iPhone product line. We have a low cost 655 00:34:34,960 --> 00:34:39,960 Speaker 1: iPhone coming out initially they said in March, according to Bloomberg. 656 00:34:40,000 --> 00:34:43,279 Speaker 1: I think that gets pushed out by coronavirus, but not much, 657 00:34:43,360 --> 00:34:46,440 Speaker 1: probably a couple of months. That gives them play at 658 00:34:46,440 --> 00:34:48,680 Speaker 1: the low end of the portfolio, and then we have 659 00:34:48,760 --> 00:34:52,920 Speaker 1: a five G phone coming in September, as you mentioned. 660 00:34:53,000 --> 00:34:56,560 Speaker 1: Longer term, I think Apples trying to make that pivot 661 00:34:56,640 --> 00:35:00,799 Speaker 1: from hardware to software and services. So I'm keeping a 662 00:35:00,880 --> 00:35:04,640 Speaker 1: close eye on the content business and also the fintech 663 00:35:04,719 --> 00:35:07,439 Speaker 1: business and health apps to see what they do there. 664 00:35:07,640 --> 00:35:11,000 Speaker 1: It's it's early days, but I think that's an important 665 00:35:11,840 --> 00:35:14,040 Speaker 1: new vertical for them. So, John, you mentioned kind of 666 00:35:14,080 --> 00:35:21,040 Speaker 1: the vertical, that's exactly so. Kind of this exactly so 667 00:35:21,120 --> 00:35:23,120 Speaker 1: the kind of the mid range phone in terms of 668 00:35:23,200 --> 00:35:25,920 Speaker 1: prices that because we've talked about in the past markets 669 00:35:26,000 --> 00:35:30,400 Speaker 1: like China, like India, mass markets, but not necessarily markets 670 00:35:30,440 --> 00:35:33,759 Speaker 1: where the high end phone is that competitive from a 671 00:35:33,760 --> 00:35:36,640 Speaker 1: consumer perspective. Is this new mid range phone kind of 672 00:35:36,680 --> 00:35:40,160 Speaker 1: targeting some of those international markets. Yes, it is. So 673 00:35:40,200 --> 00:35:43,400 Speaker 1: it's a sequel to the iPhone. See if you remember 674 00:35:43,480 --> 00:35:46,680 Speaker 1: that that was a three phone. This will be priced 675 00:35:46,760 --> 00:35:50,760 Speaker 1: much the same way, and in terms of look and feel, 676 00:35:50,880 --> 00:35:53,440 Speaker 1: I think it's going to be fashioned after the iPhone 677 00:35:53,520 --> 00:35:55,759 Speaker 1: eight in terms of what the body of the phone 678 00:35:55,840 --> 00:35:59,000 Speaker 1: is gonna look like and like the sc the guts 679 00:35:59,040 --> 00:36:04,360 Speaker 1: are going to be all updated, the updated processor, operating system, 680 00:36:04,800 --> 00:36:08,040 Speaker 1: apps and so forth. So you know, it taps the 681 00:36:08,160 --> 00:36:11,600 Speaker 1: high end of that mid range market and it expands 682 00:36:11,640 --> 00:36:15,839 Speaker 1: Apple's addressable market opportunity and gives them a play in 683 00:36:15,840 --> 00:36:20,200 Speaker 1: those markets like India and China where the you know, 684 00:36:20,280 --> 00:36:24,280 Speaker 1: there's sort of iPhone Uh eleven is at a reach 685 00:36:24,360 --> 00:36:27,239 Speaker 1: I think for the average consumer is I don't. I 686 00:36:27,239 --> 00:36:29,680 Speaker 1: don't agree with that because they get that you can 687 00:36:29,760 --> 00:36:32,680 Speaker 1: do the financing and it's like fifties sixty bucks a month, 688 00:36:32,840 --> 00:36:36,440 Speaker 1: right it is. But you know, if you're making a 689 00:36:36,480 --> 00:36:39,480 Speaker 1: fraction of the average income here in the US, it's 690 00:36:39,520 --> 00:36:44,399 Speaker 1: it's still a pricey proposition. Yeah, okay, okay, When when 691 00:36:44,440 --> 00:36:48,000 Speaker 1: do we have to stop buying Apple stuff for our children? Uh, 692 00:36:48,040 --> 00:36:53,000 Speaker 1: there's gotta be And I got my twins are approaching 693 00:36:53,600 --> 00:36:55,719 Speaker 1: birthday and you still feels like the time I need 694 00:36:55,719 --> 00:36:59,000 Speaker 1: to just cut them off right, Okay, that's what yea 695 00:36:59,280 --> 00:37:02,640 Speaker 1: good luck and John Butler brilliant on Apple and of course, 696 00:37:03,080 --> 00:37:05,000 Speaker 1: I mean, what do you buy? Hold sell and busted 697 00:37:05,040 --> 00:37:10,000 Speaker 1: his chops folks three share what was a two hundred 698 00:37:10,120 --> 00:37:12,120 Speaker 1: something and they're going out of business. So I think 699 00:37:12,360 --> 00:37:15,279 Speaker 1: secret is out on the five G phone and the 700 00:37:15,360 --> 00:37:18,359 Speaker 1: low end phone. The key for Apple is they need 701 00:37:18,400 --> 00:37:21,840 Speaker 1: to keep the momentum going in the iPhone product line 702 00:37:21,920 --> 00:37:24,640 Speaker 1: as we get into twenty one because they're gonna lap 703 00:37:24,680 --> 00:37:27,160 Speaker 1: tougher cops. John Butler, thanks so much for joining us, 704 00:37:27,239 --> 00:37:30,840 Speaker 1: John Butler, because all things covers, all things telecom phones, 705 00:37:30,920 --> 00:37:35,120 Speaker 1: all that kind of fun stuff Apple for Bloomberg Intelligence. Uh, 706 00:37:35,280 --> 00:37:37,120 Speaker 1: and we appreciate him for joining us here on Bloomberg 707 00:37:37,120 --> 00:37:40,000 Speaker 1: Interact up Broker Studio. Thanks for listening to the Bloomberg 708 00:37:40,000 --> 00:37:45,960 Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 709 00:37:46,320 --> 00:37:50,560 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 710 00:37:50,600 --> 00:37:54,080 Speaker 1: Tom Keane Before the podcast, you can always catch us 711 00:37:54,200 --> 00:38:02,920 Speaker 1: World One. I'm Bloomberg Radio s