1 00:00:09,720 --> 00:00:12,880 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with 2 00:00:13,560 --> 00:00:16,520 Speaker 1: David Gura. Daily we bring you insight from the best 3 00:00:16,560 --> 00:00:22,279 Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance 4 00:00:22,320 --> 00:00:27,000 Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course 5 00:00:27,320 --> 00:00:33,560 Speaker 1: on the Bloomberg. We're going with Michael Darta. He's the 6 00:00:33,600 --> 00:00:35,680 Speaker 1: chief economist and market strategies at m K m KM 7 00:00:35,720 --> 00:00:37,920 Speaker 1: Partners Trains. This here in our Bloomberg eleven three studios 8 00:00:37,920 --> 00:00:39,280 Speaker 1: that in New York. Great to see you, Great to 9 00:00:39,320 --> 00:00:42,040 Speaker 1: be back. A last Poor York, you write, A last 10 00:00:42,080 --> 00:00:45,920 Speaker 1: fiscal policy in the US looks dead? What role when 11 00:00:45,920 --> 00:00:48,599 Speaker 1: we look at the record numbers that we've seen this week, 12 00:00:48,640 --> 00:00:50,879 Speaker 1: Dow hit in, how much of that do you attribute 13 00:00:50,880 --> 00:00:53,239 Speaker 1: to the to the prospects still that there might be 14 00:00:53,320 --> 00:00:55,560 Speaker 1: somewhere in the quarters of Congress work proceeding on on 15 00:00:55,720 --> 00:00:58,920 Speaker 1: new fiscal policy. Well, not much, David, And that's a 16 00:00:59,000 --> 00:01:02,640 Speaker 1: very controversial, an unpopular view. But consider the fact that 17 00:01:02,680 --> 00:01:05,640 Speaker 1: emerging markets are up what thirty plus percent this year. 18 00:01:06,240 --> 00:01:08,720 Speaker 1: Let's take a look at the Eurozone business cycle. They 19 00:01:08,720 --> 00:01:11,959 Speaker 1: have the same lift in business confidence and p m 20 00:01:11,959 --> 00:01:14,520 Speaker 1: I s that we're seeing in the US. So you know, 21 00:01:14,560 --> 00:01:18,640 Speaker 1: the idea that we can continue to attribute what's happening here, 22 00:01:18,640 --> 00:01:22,440 Speaker 1: whether it's the market or data, to a surprise election 23 00:01:22,520 --> 00:01:25,039 Speaker 1: that happened last fall, just to me seems like a 24 00:01:25,240 --> 00:01:29,320 Speaker 1: real stretch. Now, maybe something minor gets done on the 25 00:01:29,319 --> 00:01:33,160 Speaker 1: fiscal side, but in terms of sweeping reforms or an 26 00:01:33,319 --> 00:01:37,720 Speaker 1: enormous tax cut, which isn't reform in my opinion, I 27 00:01:37,760 --> 00:01:40,319 Speaker 1: think the chances of that are quite slim. So we 28 00:01:40,319 --> 00:01:43,040 Speaker 1: can extrapolate that further. It's not just the prospect of 29 00:01:43,040 --> 00:01:45,920 Speaker 1: an infrastructure package, for instance, it is a tax form 30 00:01:45,920 --> 00:01:49,120 Speaker 1: package as well. Well. Look, look, reform, at least in 31 00:01:49,200 --> 00:01:53,760 Speaker 1: my book, implies that you are streamlining and simplifying that 32 00:01:53,840 --> 00:01:57,680 Speaker 1: you're essentially paying for lower rates with base broadening. So 33 00:01:57,760 --> 00:02:01,200 Speaker 1: it should be revenue neutral if you're doing it right. 34 00:02:01,640 --> 00:02:06,360 Speaker 1: Is the gold standard, bipartisan revenue neutral. President Reagan wouldn't 35 00:02:06,360 --> 00:02:10,440 Speaker 1: accept anything less. This is not what I'm hearing coming 36 00:02:10,440 --> 00:02:12,840 Speaker 1: out of Washington. I mean, they you know, they started 37 00:02:12,840 --> 00:02:16,680 Speaker 1: discussing closing certain loopholes, and there was a violent reaction, 38 00:02:16,760 --> 00:02:19,799 Speaker 1: and there's been a backing off. And now I'm hearing 39 00:02:19,880 --> 00:02:23,040 Speaker 1: that you know, some of the Conservative members want a 40 00:02:23,080 --> 00:02:25,840 Speaker 1: FED chair that runs it hot so they can expand 41 00:02:25,840 --> 00:02:30,640 Speaker 1: the deficit, the same members that wanted a deflationary monetary 42 00:02:30,720 --> 00:02:34,200 Speaker 1: policy under a previous president. I mean, it's just jaw 43 00:02:34,320 --> 00:02:37,160 Speaker 1: dropping when you look at that that list of five names, 44 00:02:37,200 --> 00:02:41,360 Speaker 1: including Cheer Yelling. The president says he's considering those five. Um, 45 00:02:41,400 --> 00:02:43,639 Speaker 1: how much difference is there between them when when you 46 00:02:43,639 --> 00:02:45,240 Speaker 1: look at the effect they might have on the economy, 47 00:02:45,280 --> 00:02:48,320 Speaker 1: effect on on the markets. Um, how satisfied are you 48 00:02:48,360 --> 00:02:49,880 Speaker 1: with the list that that you have in front of you? 49 00:02:49,960 --> 00:02:51,840 Speaker 1: And and do you think that each stands to to 50 00:02:52,240 --> 00:02:54,320 Speaker 1: be different a different type of candidate when it comes 51 00:02:54,320 --> 00:02:56,280 Speaker 1: to the economy in the markets? Well, I think they all, 52 00:02:56,320 --> 00:02:59,120 Speaker 1: you know, have their own particular set of strengths. If 53 00:02:59,240 --> 00:03:01,760 Speaker 1: you know, you want to size the you know, the positive. 54 00:03:02,720 --> 00:03:04,880 Speaker 1: As far as I'm concerned, I have a bias here. 55 00:03:04,919 --> 00:03:06,680 Speaker 1: I mean, I think Yelling is on the list, and 56 00:03:06,720 --> 00:03:08,799 Speaker 1: I think she's the most qualified. I think it's hard 57 00:03:08,840 --> 00:03:12,160 Speaker 1: to take a look around, uh and not you know, 58 00:03:12,320 --> 00:03:14,800 Speaker 1: just assume that she's you know, the best person for 59 00:03:14,840 --> 00:03:18,600 Speaker 1: the job, especially if you're interested in continuity. That said, 60 00:03:18,760 --> 00:03:20,920 Speaker 1: she seems to have fallen out of favor you know, 61 00:03:20,960 --> 00:03:24,080 Speaker 1: with some of the president's closest advisors. So now it 62 00:03:24,120 --> 00:03:27,400 Speaker 1: looks like it's coming down to a tailor or a Powell. 63 00:03:27,800 --> 00:03:30,960 Speaker 1: Powell probably would be the you know, candidate that would 64 00:03:30,960 --> 00:03:32,800 Speaker 1: have the you know, the view would be the most 65 00:03:32,800 --> 00:03:36,200 Speaker 1: continuity tailor. Maybe. I mean, if you if you're just 66 00:03:36,240 --> 00:03:38,520 Speaker 1: looking at his rule, it's as short rates should be 67 00:03:38,920 --> 00:03:41,080 Speaker 1: hundreds of basis points higher than they are now. That 68 00:03:41,160 --> 00:03:43,480 Speaker 1: scares some, but anyone who comes in is going to 69 00:03:43,600 --> 00:03:45,920 Speaker 1: have to govern by consensus. So I don't think with 70 00:03:45,960 --> 00:03:50,120 Speaker 1: any of these particular individuals you'd have an abrupt, radical, 71 00:03:50,200 --> 00:03:53,080 Speaker 1: you change in policy. That's just not how the FED operates. 72 00:03:53,200 --> 00:03:56,440 Speaker 1: You mentioned. Let me take opportunity to ask about seven 73 00:03:56,600 --> 00:03:58,800 Speaker 1: as well as we can, sort of looking back on 74 00:03:58,800 --> 00:04:01,680 Speaker 1: on the events of the week thirty years ago, what 75 00:04:01,720 --> 00:04:04,520 Speaker 1: have we learned since then? What did we not see 76 00:04:04,600 --> 00:04:08,920 Speaker 1: leading into leading into a black Monday. Well, we've certainly 77 00:04:08,920 --> 00:04:12,800 Speaker 1: had a few bad bear markets and significant corrections since then, 78 00:04:12,840 --> 00:04:17,200 Speaker 1: But unfortunately for individual investors, it seems like they forget 79 00:04:17,240 --> 00:04:19,640 Speaker 1: the lessons of the past and the sense that if 80 00:04:19,680 --> 00:04:22,120 Speaker 1: you are you know, if you're not out of the market, 81 00:04:22,160 --> 00:04:25,159 Speaker 1: and then a severe drop takes place or more. The 82 00:04:25,200 --> 00:04:27,119 Speaker 1: best thing you can do is just grit your teeth 83 00:04:27,160 --> 00:04:30,640 Speaker 1: and hang in there. And that really goes against every 84 00:04:30,720 --> 00:04:35,920 Speaker 1: human psychological impulse, right, I mean, you know, psychology makes 85 00:04:35,960 --> 00:04:38,160 Speaker 1: us want to buy at the top and sell everything 86 00:04:38,200 --> 00:04:41,120 Speaker 1: at the bottom. And it's really difficult to lean against 87 00:04:41,120 --> 00:04:44,360 Speaker 1: those impulses. But if we can be unemotional about it, 88 00:04:44,400 --> 00:04:47,839 Speaker 1: look at the history, you know that's it's really you know, 89 00:04:47,920 --> 00:04:49,760 Speaker 1: if you'd stayed in there, well, I mean, look how 90 00:04:49,800 --> 00:04:51,839 Speaker 1: well you did even with two thousand seven and two 91 00:04:51,839 --> 00:04:54,800 Speaker 1: thousand eight, right, I mean, if you weren't able to 92 00:04:54,800 --> 00:04:56,960 Speaker 1: get out of the market before that, you know that 93 00:04:57,240 --> 00:05:01,120 Speaker 1: huge bear trend started. If you just stuck with it, 94 00:05:01,240 --> 00:05:05,040 Speaker 1: you've done extremely well. But few did you mentioned earlier 95 00:05:05,080 --> 00:05:08,200 Speaker 1: Good morning every one time Keenan David girl worldwide getting 96 00:05:08,200 --> 00:05:11,960 Speaker 1: ready for Yankees Astros tonight, among others, say particularly good 97 00:05:11,960 --> 00:05:15,320 Speaker 1: morning on serious Sex. I'm Channel one early morning, Los Angeles, 98 00:05:15,920 --> 00:05:19,600 Speaker 1: coming home from the celebrations of the Dodgers. Michael Darny, 99 00:05:19,680 --> 00:05:23,479 Speaker 1: you said earlier today on this linkage of bonds to equities, 100 00:05:23,880 --> 00:05:30,400 Speaker 1: when do we relink? When do we reattached to normality? Well, 101 00:05:30,600 --> 00:05:34,440 Speaker 1: and so you know, you know that could happen two ways. 102 00:05:34,440 --> 00:05:36,839 Speaker 1: It could happen with bond yields rising, or we could 103 00:05:36,880 --> 00:05:42,880 Speaker 1: continue to enjoy equity price valuation gains. Equity price gains 104 00:05:42,920 --> 00:05:46,359 Speaker 1: that push up valuations and you could relink in that fashion. 105 00:05:46,440 --> 00:05:48,760 Speaker 1: Different models will have, you know, tell you that there's 106 00:05:48,760 --> 00:05:51,640 Speaker 1: a different disparity. But one thing we don't have today 107 00:05:51,680 --> 00:05:56,080 Speaker 1: that we had, you know, was a big divergence in 108 00:05:56,279 --> 00:05:59,920 Speaker 1: favor of bonds. Right, the stock market was very expensive 109 00:06:00,000 --> 00:06:03,520 Speaker 1: relative to the bond market, and we had a big 110 00:06:03,800 --> 00:06:06,920 Speaker 1: increase in long rates that you're with the stock market 111 00:06:07,040 --> 00:06:09,360 Speaker 1: rising up until you know, we were in the late summer, 112 00:06:09,400 --> 00:06:12,599 Speaker 1: I think we peaked. So three basis points surge in 113 00:06:12,680 --> 00:06:16,039 Speaker 1: long rates. If something like that today would clearly cause 114 00:06:16,080 --> 00:06:19,320 Speaker 1: a big stock market upheaval. So if that's your forecast, 115 00:06:19,360 --> 00:06:22,800 Speaker 1: and certainly you'd be negative on equities. But we tell clients, look, 116 00:06:22,800 --> 00:06:25,640 Speaker 1: the Fed is raising short rates and reducing the balance sheet. 117 00:06:25,680 --> 00:06:28,080 Speaker 1: All the things that were supposed to spike long rates 118 00:06:28,080 --> 00:06:31,560 Speaker 1: haven't done it. So you know, maybe it's the new normal, 119 00:06:31,640 --> 00:06:34,320 Speaker 1: Maybe it's debt and demographics, whatever you want to call it. 120 00:06:34,640 --> 00:06:36,919 Speaker 1: The Fed being able, you know, being willing to undershoot 121 00:06:36,920 --> 00:06:41,080 Speaker 1: the inflation target, consistently. You know whatever, these you know, 122 00:06:41,240 --> 00:06:44,800 Speaker 1: these forces are long. Rates don't look like they're headed 123 00:06:44,880 --> 00:06:49,080 Speaker 1: up dramatically anytime soon, so we'll have to leave it there. 124 00:06:49,080 --> 00:06:51,359 Speaker 1: Michael darda just terrific news flow this morning. Thank you 125 00:06:51,440 --> 00:06:53,360 Speaker 1: so much for coming in my pleasure. Can you try 126 00:06:53,360 --> 00:06:56,520 Speaker 1: to come in on a quieter fight. I'm glad it's 127 00:06:56,680 --> 00:06:58,599 Speaker 1: it's great. I'd love to talk to you the day 128 00:06:58,640 --> 00:07:01,440 Speaker 1: we hear about a fed sherman. Be happy to come 129 00:07:01,480 --> 00:07:04,479 Speaker 1: back then, you know, pick up the MKM phone he 130 00:07:04,560 --> 00:07:07,279 Speaker 1: has in his car. He's got a red phone on 131 00:07:07,320 --> 00:07:11,920 Speaker 1: the dashboard which is the the surveillance issue surveillance issue phone. 132 00:07:12,520 --> 00:07:27,640 Speaker 1: Michael Darter, thank you so much to that. Further Ado, 133 00:07:27,800 --> 00:07:30,480 Speaker 1: Nicholas Hayman joins us on our phone lines. Mr Hayman, 134 00:07:32,040 --> 00:07:34,280 Speaker 1: I'm among the mix of people we talked to on 135 00:07:34,360 --> 00:07:37,920 Speaker 1: general Electric has been more constructive. Uh, and we're thrilled 136 00:07:37,960 --> 00:07:39,720 Speaker 1: that he can join us this morning. Nick, I want 137 00:07:39,720 --> 00:07:43,280 Speaker 1: to cut to the chase which is in ge power. 138 00:07:44,040 --> 00:07:46,400 Speaker 1: Not so much as there a sense of fraud, but 139 00:07:46,600 --> 00:07:50,280 Speaker 1: was there a sense of deception of how business would 140 00:07:50,280 --> 00:07:55,480 Speaker 1: slow Well, certainly that was one of the biggest holes 141 00:07:55,520 --> 00:07:58,200 Speaker 1: in the quarter. Oil and gas was also pretty challenged, 142 00:07:58,560 --> 00:08:02,720 Speaker 1: but they took some raw right ounds in power um 143 00:08:02,880 --> 00:08:06,520 Speaker 1: had conversion and I will have to see here, you know, 144 00:08:06,560 --> 00:08:09,720 Speaker 1: I think that that uh UM, the business you know, 145 00:08:10,080 --> 00:08:13,000 Speaker 1: is facing a challenge where it you know, shifts from 146 00:08:13,240 --> 00:08:18,080 Speaker 1: developed countries too more, you know, emerging and non developed countries. 147 00:08:18,400 --> 00:08:20,640 Speaker 1: Gas servants are still going to be a functional part 148 00:08:20,720 --> 00:08:23,920 Speaker 1: of the power solution on the planet. And GE's got 149 00:08:23,920 --> 00:08:25,880 Speaker 1: the best product in the market. But as we just 150 00:08:25,920 --> 00:08:29,440 Speaker 1: saw yesterday, Semans is closing eleven out of twenty three plans. 151 00:08:29,560 --> 00:08:33,120 Speaker 1: What's your timeline for the magic of a new CEO. 152 00:08:33,480 --> 00:08:35,560 Speaker 1: Is this going to be a hockey stick or a 153 00:08:35,640 --> 00:08:37,719 Speaker 1: v I should say, where we go down and come 154 00:08:37,840 --> 00:08:42,199 Speaker 1: right back? Or is this going to be quarters of agony? Well, 155 00:08:42,320 --> 00:08:44,120 Speaker 1: I you know, right now, I would have thought time 156 00:08:44,160 --> 00:08:46,760 Speaker 1: that the market might have been thinking that dollar fifteen 157 00:08:46,800 --> 00:08:48,720 Speaker 1: or dollar twenty was where we were headed this year. 158 00:08:48,760 --> 00:08:51,800 Speaker 1: Obviously they suggested a dollar five to a dollar ten, 159 00:08:52,480 --> 00:08:56,840 Speaker 1: so that would indicate uh still much larger structuring actions 160 00:08:56,880 --> 00:09:00,160 Speaker 1: are to come in the fourth quarter, and presume only 161 00:09:00,400 --> 00:09:02,800 Speaker 1: that will begin to set the path for next year 162 00:09:03,320 --> 00:09:07,600 Speaker 1: on a stronger footing. So instead of this year being 163 00:09:07,760 --> 00:09:11,280 Speaker 1: you know part way down in eighteen at the bottom. 164 00:09:11,280 --> 00:09:14,400 Speaker 1: We'll have to see, but my sense is obviously, uh 165 00:09:14,520 --> 00:09:17,120 Speaker 1: at one, five, one ten, we're at the bottom this year. 166 00:09:17,200 --> 00:09:19,360 Speaker 1: The question is where do you go back to next year? 167 00:09:19,600 --> 00:09:22,000 Speaker 1: David Nick? How large does it does Jeff himiltloom in 168 00:09:22,000 --> 00:09:24,320 Speaker 1: this in this quarterly report? Do you see evidence of 169 00:09:24,360 --> 00:09:26,840 Speaker 1: his tenure yet? And and how quickly do you think 170 00:09:26,880 --> 00:09:31,280 Speaker 1: of the new CEO? John Flannery is proceeding with the transformation. Oh, 171 00:09:31,360 --> 00:09:34,000 Speaker 1: he's proceeding at light speed. You know, there's no question 172 00:09:34,040 --> 00:09:36,400 Speaker 1: about it. You know that he's changing the board, he's 173 00:09:36,480 --> 00:09:39,520 Speaker 1: changing the senior management, he's changing the culture, he's changing 174 00:09:39,520 --> 00:09:42,240 Speaker 1: the cost structure radically. And I think we're going to 175 00:09:42,320 --> 00:09:45,640 Speaker 1: see a lot more of pruning of the portfolio. Not 176 00:09:45,760 --> 00:09:48,079 Speaker 1: big things, but you know, Perwiphul, things that don't earn 177 00:09:48,080 --> 00:09:51,040 Speaker 1: their costic capital. Help an amateur like me. I print 178 00:09:51,040 --> 00:09:53,920 Speaker 1: out this press release it's very easy to read with 179 00:09:53,960 --> 00:09:56,000 Speaker 1: a lot of big font and blue text, and then 180 00:09:56,240 --> 00:09:59,040 Speaker 1: attached to it, I've got I've got recast a G 181 00:09:59,200 --> 00:10:02,520 Speaker 1: Industrials Finance tools and then as originally reported, G Industrial Financials. 182 00:10:02,600 --> 00:10:06,480 Speaker 1: Help me understand the difference between those two spreadsheets. Um, 183 00:10:06,520 --> 00:10:10,920 Speaker 1: there have been four different sets of earnings from them 184 00:10:11,080 --> 00:10:14,439 Speaker 1: over the last several years, and this has been one 185 00:10:14,480 --> 00:10:17,480 Speaker 1: of the issues that um, you know, the company has 186 00:10:17,480 --> 00:10:20,680 Speaker 1: taken a slant on earnings to exclude pension expands, to 187 00:10:20,800 --> 00:10:25,760 Speaker 1: exclude contract assets, which in essence are deferred revenues that 188 00:10:25,800 --> 00:10:30,160 Speaker 1: are realized upfront. And um, you know, I think that 189 00:10:30,679 --> 00:10:33,240 Speaker 1: uh as John goes forward, we're going to move back 190 00:10:33,280 --> 00:10:35,959 Speaker 1: a lot closer to a gap number you know that's 191 00:10:35,960 --> 00:10:39,760 Speaker 1: adjusted for games and or you know, one time costs 192 00:10:39,840 --> 00:10:43,880 Speaker 1: or restructuring items. Do you load the boat this morning? 193 00:10:44,040 --> 00:10:47,600 Speaker 1: I mean, if you love, are gonna love it here? Yeah? 194 00:10:47,559 --> 00:10:50,439 Speaker 1: I didn't that. This is I don't believe a broken company. 195 00:10:50,559 --> 00:10:52,800 Speaker 1: Remember that doesn't look like one of my screen nick, 196 00:10:52,880 --> 00:10:55,080 Speaker 1: It doesn't. This is the heart of the matter, folks. 197 00:10:55,080 --> 00:10:58,679 Speaker 1: I'm looking at the financials on my screen, orders, backlog, 198 00:10:58,800 --> 00:11:02,000 Speaker 1: the sum total. It's pretty darn good. The nick. Why 199 00:11:02,080 --> 00:11:04,920 Speaker 1: is it start getting beaten up? Well, it's getting beaten 200 00:11:04,960 --> 00:11:07,800 Speaker 1: up because people obviously, you know, I don't have much 201 00:11:07,920 --> 00:11:11,760 Speaker 1: of a forward visibility right now, not only about the earnings, 202 00:11:11,760 --> 00:11:14,120 Speaker 1: but people, you know, the questions are around the dividend 203 00:11:14,600 --> 00:11:16,760 Speaker 1: and um, you know, is the dividend that right now 204 00:11:16,800 --> 00:11:21,360 Speaker 1: the markets discounting something in the neighborhood of reduction in 205 00:11:21,400 --> 00:11:24,120 Speaker 1: that dividend. And the question is, you know, is that 206 00:11:24,200 --> 00:11:27,360 Speaker 1: a good decision to make um? You know, given the 207 00:11:27,360 --> 00:11:30,160 Speaker 1: company has certainly got playing of liquidity, the debt trades 208 00:11:30,240 --> 00:11:33,559 Speaker 1: all above par um. They're ahead of plan on cost 209 00:11:33,600 --> 00:11:35,559 Speaker 1: out at one point two billion. We thought they might 210 00:11:35,559 --> 00:11:37,840 Speaker 1: get to one four. They promised in April to do 211 00:11:37,880 --> 00:11:41,640 Speaker 1: a billion. So there, you know, things are are, you know, 212 00:11:41,679 --> 00:11:44,199 Speaker 1: and they've they've brought out, you know, you know, all 213 00:11:44,240 --> 00:11:46,200 Speaker 1: brand new products in the last two or three years 214 00:11:46,240 --> 00:11:48,240 Speaker 1: across all their businesses that are state of the heart. 215 00:11:48,280 --> 00:11:51,560 Speaker 1: I believe it's November. What's Nick Hayman's number one question 216 00:11:51,600 --> 00:11:55,240 Speaker 1: November at the analyst meeting where you animals go up 217 00:11:55,280 --> 00:11:59,120 Speaker 1: against these guys and you really get nasty. What's the nasty? 218 00:11:59,400 --> 00:12:03,080 Speaker 1: What is the what is tom what's the pathway forward 219 00:12:03,320 --> 00:12:07,680 Speaker 1: for you know, revitalizing the cash flow from operating activities? 220 00:12:07,720 --> 00:12:12,120 Speaker 1: We need fifteen to sixteen to sustain the current level 221 00:12:12,280 --> 00:12:15,920 Speaker 1: of eight billion in dividends and a normalized level of 222 00:12:16,280 --> 00:12:18,439 Speaker 1: you know, capital spending it two and a half to 223 00:12:18,520 --> 00:12:20,880 Speaker 1: three billion, and you know, if you can get to 224 00:12:20,960 --> 00:12:23,480 Speaker 1: fifteen or sixteen next year, which obviously this year they 225 00:12:23,520 --> 00:12:27,960 Speaker 1: now project seven instead of twelve to fourteen. And you 226 00:12:28,000 --> 00:12:29,760 Speaker 1: know we thought maybe it'd be eleven with a lot 227 00:12:29,800 --> 00:12:32,600 Speaker 1: more restructuring. Well there's more restructuring and write downs to come. 228 00:12:33,600 --> 00:12:36,080 Speaker 1: Thank you for the very greatly appreciated and it came 229 00:12:36,080 --> 00:12:38,640 Speaker 1: into the heart of this most historic day with general 230 00:12:39,200 --> 00:12:43,320 Speaker 1: elector just an ugly statement in the stock down. Stay 231 00:12:43,360 --> 00:13:00,280 Speaker 1: with us, this is Bloomberg, David, why do you bring 232 00:13:00,320 --> 00:13:03,160 Speaker 1: in our steam guest? We got Jeff Sprague coming up 233 00:13:03,200 --> 00:13:05,600 Speaker 1: on g I should say, after Nick came and thrilled. 234 00:13:05,640 --> 00:13:07,560 Speaker 1: This is what we do on surveillance. Give you a 235 00:13:07,640 --> 00:13:10,480 Speaker 1: set of opinions on general Electric and we'll do that 236 00:13:10,480 --> 00:13:13,080 Speaker 1: with Mr Sprague in a bit, David, why don't you 237 00:13:13,080 --> 00:13:16,320 Speaker 1: bring in our steam guests? The former basketball player who 238 00:13:16,640 --> 00:13:19,040 Speaker 1: shot hoops with the President Obama one of many items 239 00:13:19,040 --> 00:13:21,680 Speaker 1: on the CV. That's a Bob Hornet's vice Chaircassinger associates 240 00:13:21,679 --> 00:13:24,199 Speaker 1: from we're Under Secretary State for Economic Growth, Energy and 241 00:13:24,240 --> 00:13:25,760 Speaker 1: the Environment here with us, As Tom says in our 242 00:13:25,760 --> 00:13:28,520 Speaker 1: Bloombick eleven three oh studios. You missed it earlier in 243 00:13:28,559 --> 00:13:31,720 Speaker 1: the week Tom was practicing the president. She clap on 244 00:13:31,800 --> 00:13:35,240 Speaker 1: air the constant clap that we are during the address 245 00:13:35,280 --> 00:13:38,040 Speaker 1: that he gave to the People's Congress. There's this one 246 00:13:38,600 --> 00:13:41,280 Speaker 1: helping us. Well, that's one tradition in China that the 247 00:13:41,360 --> 00:13:44,280 Speaker 1: audience claps for you, and you clap for the audience 248 00:13:44,400 --> 00:13:48,520 Speaker 1: you go. So it's part of the way Chinese culture works. There. 249 00:13:48,520 --> 00:13:51,520 Speaker 1: We got a very nice thing. But they're good at it. 250 00:13:51,600 --> 00:13:52,960 Speaker 1: They're very good at and they have a lot of 251 00:13:53,000 --> 00:13:57,120 Speaker 1: time to do it. Three hours to start. It's just 252 00:13:57,200 --> 00:14:01,240 Speaker 1: what's called the work program or the work report, and 253 00:14:01,360 --> 00:14:05,000 Speaker 1: it's traditionally very long. It's who start, who do we blame? Now? 254 00:14:06,120 --> 00:14:08,480 Speaker 1: It goes way back. I mean, the work report is 255 00:14:09,600 --> 00:14:14,439 Speaker 1: provided by the current UM Party secretary, who is now 256 00:14:14,440 --> 00:14:18,880 Speaker 1: shipging ping about the last five years under his tootledge, 257 00:14:18,960 --> 00:14:22,800 Speaker 1: under his domain, and then about the next five years. 258 00:14:22,840 --> 00:14:25,720 Speaker 1: So it's really a long report. And it's good actually 259 00:14:25,720 --> 00:14:28,760 Speaker 1: that it's long, because it really represents a consensus of 260 00:14:28,960 --> 00:14:33,320 Speaker 1: freaking in the party. I actually, come on, President Trump 261 00:14:33,440 --> 00:14:35,720 Speaker 1: is looking at that, going, David, He's going, I could 262 00:14:35,760 --> 00:14:38,480 Speaker 1: do that, he could do that. But the fact is 263 00:14:38,520 --> 00:14:40,760 Speaker 1: it's filled with a lot of interesting stuff. That there's 264 00:14:40,800 --> 00:14:43,520 Speaker 1: a lot of general language in it, but almost every 265 00:14:43,560 --> 00:14:47,760 Speaker 1: time this report comes out, very specific things occur afterwards, 266 00:14:47,800 --> 00:14:51,120 Speaker 1: even though the language itself seems very general. For instance, 267 00:14:51,520 --> 00:14:55,760 Speaker 1: just an interesting number. President John Zaman mentioned the market 268 00:14:55,800 --> 00:14:59,680 Speaker 1: fifty four times when he gave his report. Party Congress 269 00:15:00,640 --> 00:15:04,040 Speaker 1: President she mentioned it eighteen times. So it shows you, 270 00:15:04,520 --> 00:15:06,360 Speaker 1: when you look at it and you do your sort 271 00:15:06,360 --> 00:15:09,920 Speaker 1: of analysis, where the emphasis is and how it's changed. 272 00:15:10,080 --> 00:15:13,480 Speaker 1: Those things they don't seem to be useful, but in 273 00:15:13,520 --> 00:15:16,600 Speaker 1: effect they do reflect a consensus on the party. Harman's 274 00:15:16,680 --> 00:15:18,960 Speaker 1: just looking at the way the white smoke blows when 275 00:15:18,960 --> 00:15:26,160 Speaker 1: they when he also has uh, there is such a 276 00:15:26,160 --> 00:15:29,080 Speaker 1: heavy brid of expectations leading to this event. What do 277 00:15:29,160 --> 00:15:30,800 Speaker 1: we learn from this? The speech itself, it had a 278 00:15:30,880 --> 00:15:33,800 Speaker 1: long time horizon. He's looking at many decades out. What 279 00:15:33,800 --> 00:15:36,240 Speaker 1: what does China look like in his vision here twenty 280 00:15:36,320 --> 00:15:38,760 Speaker 1: three years out. He sees this as a new era 281 00:15:38,880 --> 00:15:43,360 Speaker 1: in China, where China has gone through some economic difficulties 282 00:15:43,920 --> 00:15:47,920 Speaker 1: and is now particularly as a result of how well 283 00:15:47,960 --> 00:15:51,320 Speaker 1: it survived the financial crisis of two thousand and eight 284 00:15:51,800 --> 00:15:53,920 Speaker 1: and the difficulties and had a couple of years ago, 285 00:15:54,520 --> 00:15:57,800 Speaker 1: feels a lot more self confidence about its economy. It's 286 00:15:57,800 --> 00:16:00,280 Speaker 1: growing at six point seven six point eight per cent, 287 00:16:00,880 --> 00:16:03,760 Speaker 1: so the economy is moving ahead. He's positive about that. 288 00:16:04,080 --> 00:16:07,960 Speaker 1: He's also very assertive about China's role in the world. 289 00:16:08,480 --> 00:16:10,520 Speaker 1: That China wants to be at he put as he 290 00:16:10,560 --> 00:16:13,440 Speaker 1: put its center stage, and that is it wants to 291 00:16:13,480 --> 00:16:15,880 Speaker 1: play a greater role globally. It certainly wants to play 292 00:16:15,920 --> 00:16:19,280 Speaker 1: a greater role in the region. The US has obliged 293 00:16:19,400 --> 00:16:23,560 Speaker 1: him by pulling out of t p P, giving the 294 00:16:23,680 --> 00:16:28,040 Speaker 1: Chinese trade negotiations that are going on the RCP more 295 00:16:28,080 --> 00:16:32,480 Speaker 1: opportunity to reflect China's point of view. One Belt, one 296 00:16:32,560 --> 00:16:34,920 Speaker 1: Road is going to link China to the rest of 297 00:16:34,920 --> 00:16:37,400 Speaker 1: Asia and Europe and other parts of the world. They 298 00:16:37,440 --> 00:16:40,960 Speaker 1: have a new base in Djibouti. They're playing a stronger 299 00:16:41,040 --> 00:16:44,720 Speaker 1: role in Southeast in South China. See. So he sees 300 00:16:44,720 --> 00:16:48,760 Speaker 1: a more confident China economically at home, a more confident China, 301 00:16:48,880 --> 00:16:52,120 Speaker 1: broad and more assertive China, and China is going to 302 00:16:52,200 --> 00:16:55,680 Speaker 1: play a greater role. And this is the hijin Ping era. 303 00:16:56,200 --> 00:17:02,840 Speaker 1: Mao started the new China after the revolution, Don got 304 00:17:02,920 --> 00:17:06,399 Speaker 1: the reforms underway. Shijin Ping will lead China and to 305 00:17:06,520 --> 00:17:11,280 Speaker 1: a new are of greater economic prosperity and greater certain 306 00:17:11,320 --> 00:17:13,480 Speaker 1: rests abroad. It's a new era in his view, and 307 00:17:13,600 --> 00:17:17,159 Speaker 1: China will be center stage at the world meetings of 308 00:17:17,240 --> 00:17:20,359 Speaker 1: various swords like the G twenty and elsewhere, and that 309 00:17:20,480 --> 00:17:23,640 Speaker 1: will give China greater prestige, which Chinese want. There there's 310 00:17:23,640 --> 00:17:26,359 Speaker 1: a strong feeling of nationalism and that we have a 311 00:17:26,440 --> 00:17:28,840 Speaker 1: role in the world to play now as we did 312 00:17:28,880 --> 00:17:31,240 Speaker 1: a couple of hundred years ago. Here's dumb question. Tom's 313 00:17:31,280 --> 00:17:32,600 Speaker 1: gonna allow me a couple of them here on this 314 00:17:32,720 --> 00:17:35,600 Speaker 1: this Friday. What's the role of the party in China today? 315 00:17:35,600 --> 00:17:37,960 Speaker 1: How much has that changed over these generations. Role of 316 00:17:37,960 --> 00:17:41,680 Speaker 1: the party is stronger today under shi jin Ping uh 317 00:17:41,720 --> 00:17:44,560 Speaker 1: in part because Shi Jinping is a strong leader. He's 318 00:17:44,560 --> 00:17:46,679 Speaker 1: the leader of the party. He believes in the party. 319 00:17:47,280 --> 00:17:49,399 Speaker 1: The other is that they have established in order to 320 00:17:49,480 --> 00:17:53,160 Speaker 1: get things done, what they call these small leading groups. 321 00:17:54,240 --> 00:17:58,200 Speaker 1: The leading groups are led by Shi Jinping, he's the chair, 322 00:17:58,320 --> 00:18:01,960 Speaker 1: and they bring in party leaders and other government leaders. 323 00:18:02,160 --> 00:18:05,399 Speaker 1: But the point to make about this is their groups 324 00:18:05,520 --> 00:18:09,119 Speaker 1: under the government, under the leadership of the Prime Minister, 325 00:18:09,200 --> 00:18:12,640 Speaker 1: and then they're smaller groups that are led by the 326 00:18:12,640 --> 00:18:15,240 Speaker 1: head of the party Si Jinping, also of course out 327 00:18:15,240 --> 00:18:18,480 Speaker 1: of the government, but also involve members of the Standing 328 00:18:18,520 --> 00:18:20,879 Speaker 1: Committee of the polit Bureau and other senior leaders. We 329 00:18:20,880 --> 00:18:23,240 Speaker 1: haven't found out how that's going to change, who's going 330 00:18:23,280 --> 00:18:25,440 Speaker 1: to see that. We haven't found out what the Standing 331 00:18:25,440 --> 00:18:28,520 Speaker 1: Committee is going to look like, but they'll be probably 332 00:18:28,680 --> 00:18:30,919 Speaker 1: as the world last time, seven, although it could be 333 00:18:30,960 --> 00:18:34,359 Speaker 1: reduced to five. One of the key questions is Wang 334 00:18:34,359 --> 00:18:36,960 Speaker 1: shi Shan, who is now the leader of the Anti 335 00:18:37,040 --> 00:18:40,359 Speaker 1: Corruption Group but also very knowledge about the economy. I 336 00:18:40,400 --> 00:18:43,200 Speaker 1: work with him a lot because he was the economic 337 00:18:43,240 --> 00:18:46,160 Speaker 1: guy at the strategic any kind of dialogue with the US, 338 00:18:46,240 --> 00:18:49,400 Speaker 1: so I've gotten to know him quite well. It may 339 00:18:49,400 --> 00:18:52,880 Speaker 1: well be that he retains his role in the Standing Committee. 340 00:18:52,920 --> 00:18:57,040 Speaker 1: Wang Yang who is the current economic guy, the Vice 341 00:18:57,080 --> 00:19:02,440 Speaker 1: Minister for Economics, as a candidate for the job of 342 00:19:02,560 --> 00:19:05,560 Speaker 1: a member of the Standing Committee, another guy I've worked with. 343 00:19:05,640 --> 00:19:09,280 Speaker 1: So I'm actually fairly comfortable that at least I've had 344 00:19:09,359 --> 00:19:11,639 Speaker 1: a chance to meet and work with some of these people, 345 00:19:11,680 --> 00:19:15,520 Speaker 1: and they're basically knowledgeable about the global economy. They want 346 00:19:15,640 --> 00:19:17,880 Speaker 1: China to play a greater role in the global economy. 347 00:19:18,200 --> 00:19:21,879 Speaker 1: They're used to working with Americans and foreigners. These are 348 00:19:22,000 --> 00:19:27,600 Speaker 1: very sophisticated people, um who are going to be at 349 00:19:27,640 --> 00:19:31,040 Speaker 1: least candidates for this What are they going to say 350 00:19:31,040 --> 00:19:32,800 Speaker 1: to their counterparts from the U S when they get 351 00:19:32,840 --> 00:19:34,360 Speaker 1: there in a couple of weeks time. When you talked 352 00:19:34,359 --> 00:19:37,439 Speaker 1: about the Strategic Economic DIALOGE, they were these formalized meetings 353 00:19:37,480 --> 00:19:40,920 Speaker 1: over the years under these past administrations. That's changing someone 354 00:19:40,960 --> 00:19:43,840 Speaker 1: under this administration. How robust is that relationship now? How 355 00:19:43,920 --> 00:19:45,639 Speaker 1: essential is this first meeting going to be For a 356 00:19:45,680 --> 00:19:47,520 Speaker 1: lot of them, it will be very important because of 357 00:19:47,560 --> 00:19:50,800 Speaker 1: course President Trump is going there in November. But I 358 00:19:50,880 --> 00:19:54,240 Speaker 1: think what China is saying, what President she is saying, 359 00:19:54,280 --> 00:19:57,240 Speaker 1: is we're going to assert our interests. We're not going 360 00:19:57,280 --> 00:20:01,360 Speaker 1: to be pushed around. He didn't mention in any detailed 361 00:20:01,400 --> 00:20:04,720 Speaker 1: relations with the United States, but it's clear that he 362 00:20:04,840 --> 00:20:07,640 Speaker 1: understands he has to work with the United States. He 363 00:20:07,960 --> 00:20:10,119 Speaker 1: it's not that he wants a confrontation with US, he 364 00:20:10,160 --> 00:20:12,800 Speaker 1: does not, but he wants to assert Chinese use and 365 00:20:12,800 --> 00:20:16,520 Speaker 1: he's saying, our economic model actually is working. So if 366 00:20:16,560 --> 00:20:18,520 Speaker 1: your country is around the world thinking about what your 367 00:20:18,560 --> 00:20:20,760 Speaker 1: econ model ought to be, take a look at how 368 00:20:20,800 --> 00:20:22,680 Speaker 1: well we've done, but I'm gonna get this question and 369 00:20:22,720 --> 00:20:24,600 Speaker 1: then we'll come back with you and continuous Is there 370 00:20:24,720 --> 00:20:29,359 Speaker 1: just a brilliant discussion in ken Burns Vietnam video the 371 00:20:29,480 --> 00:20:33,359 Speaker 1: ten episodes, our relationship with China is one of the 372 00:20:33,440 --> 00:20:38,680 Speaker 1: constant changing events throughout Do you see continuity here? Are 373 00:20:38,720 --> 00:20:42,640 Speaker 1: we just going to continue to change and evolve our 374 00:20:42,680 --> 00:20:45,960 Speaker 1: relationship with China? I think it will change and evolve. 375 00:20:46,080 --> 00:20:49,240 Speaker 1: In part, they'll be continuity because there's a lot of 376 00:20:49,280 --> 00:20:52,720 Speaker 1: business relationships and financial relationships we work with him, many 377 00:20:52,720 --> 00:20:55,720 Speaker 1: of which he established, And that was really one of 378 00:20:55,760 --> 00:20:58,440 Speaker 1: my roles. I thought that the history of the next 379 00:20:58,440 --> 00:21:01,080 Speaker 1: ten twenty years would be written in part by how 380 00:21:01,160 --> 00:21:04,199 Speaker 1: effectively we work with China, not that we're always going 381 00:21:04,240 --> 00:21:07,560 Speaker 1: to agree that we would embed our relationship. Is that 382 00:21:07,680 --> 00:21:09,159 Speaker 1: going to change? I mean, are you going to be 383 00:21:09,240 --> 00:21:12,959 Speaker 1: in a ken Burton's video? I think. I think that 384 00:21:13,000 --> 00:21:16,600 Speaker 1: the Chinese are gonna want enter in a position to 385 00:21:16,680 --> 00:21:21,520 Speaker 1: assert their interests to a much greater degree in global institutions, 386 00:21:21,520 --> 00:21:24,040 Speaker 1: certainly in regional institutions, and they were in the past. 387 00:21:24,560 --> 00:21:26,560 Speaker 1: We don't seem to have a strategy. We don't have 388 00:21:26,600 --> 00:21:29,200 Speaker 1: a TV precisely where I seem to have a don't 389 00:21:30,000 --> 00:21:33,840 Speaker 1: with them, and unless we did commercial, I got to 390 00:21:33,840 --> 00:21:41,360 Speaker 1: go to commercial spot, commercial ambassador. Right, We're gonna come 391 00:21:41,359 --> 00:21:48,080 Speaker 1: back and continue this important discussion, was Elliott Kissinger associate. 392 00:21:48,359 --> 00:21:50,320 Speaker 1: David's better at this than I am. I' gonna let 393 00:21:50,359 --> 00:21:52,720 Speaker 1: him pick it up. But I got one issue, you say, 394 00:21:52,800 --> 00:21:56,200 Speaker 1: a key guy, because we're all Hong Kong and the Brain, 395 00:21:56,640 --> 00:21:59,360 Speaker 1: Shanghai and the Brain. Some of us have been to Beijing. 396 00:22:00,000 --> 00:22:02,600 Speaker 1: There's a whole another China out there, and one of 397 00:22:02,640 --> 00:22:04,840 Speaker 1: them is is it Chung Ching is at the right 398 00:22:04,880 --> 00:22:08,720 Speaker 1: production which is in southwest China South and it's where 399 00:22:08,760 --> 00:22:11,480 Speaker 1: Shang Kai shek was in World War Two. It's one 400 00:22:11,520 --> 00:22:16,600 Speaker 1: of the four big cities that are governed by a 401 00:22:16,640 --> 00:22:19,720 Speaker 1: senior party secretary. UM And why are you looking at 402 00:22:19,760 --> 00:22:24,800 Speaker 1: Chong because Wang Yang, who I think could be he's 403 00:22:24,880 --> 00:22:28,920 Speaker 1: now the Vice Premier for Economic issues and someone I've 404 00:22:28,920 --> 00:22:32,200 Speaker 1: worked with variable guy, he used to be party secretary 405 00:22:32,240 --> 00:22:34,960 Speaker 1: in Chung Ching. And there's another person we haven't heard 406 00:22:35,080 --> 00:22:37,240 Speaker 1: much about, but we will, I expect, because I think 407 00:22:37,240 --> 00:22:39,760 Speaker 1: he'll be on the standing committee. Is a guy named 408 00:22:40,119 --> 00:22:44,320 Speaker 1: Chen Manair who is currently Party Secretary of Chung Ching. 409 00:22:44,880 --> 00:22:47,760 Speaker 1: So it's what's what's interesting about China is when an 410 00:22:47,800 --> 00:22:50,800 Speaker 1: American president comes to office, he's a senator or a 411 00:22:50,840 --> 00:22:56,000 Speaker 1: governor from unless he's a businessman from a certain area 412 00:22:56,119 --> 00:23:00,080 Speaker 1: like Illinois or New York for California. Virtually every one 413 00:23:00,119 --> 00:23:03,119 Speaker 1: who goes to the Standing Committee of China, of the 414 00:23:03,119 --> 00:23:06,080 Speaker 1: Standing Paunit of the Polar Borrow has served in several 415 00:23:06,240 --> 00:23:11,280 Speaker 1: provinces as party secretary, so they know the country. They 416 00:23:11,320 --> 00:23:14,119 Speaker 1: know the country very well. And many of them have served, 417 00:23:14,160 --> 00:23:18,280 Speaker 1: including uh President Hi Jin Pain in some very rural 418 00:23:18,320 --> 00:23:21,960 Speaker 1: areas and some urban areas, so they know the country well. There. 419 00:23:21,960 --> 00:23:25,120 Speaker 1: It's a very different perspective that they bring to this job. 420 00:23:25,520 --> 00:23:30,000 Speaker 1: They've been party secretaries, They've been proved to be successful elsewhere, 421 00:23:30,320 --> 00:23:34,400 Speaker 1: create jobs, create growth. But they know the whole country. 422 00:23:34,760 --> 00:23:36,640 Speaker 1: They don't just know one part of it. And that's 423 00:23:36,680 --> 00:23:39,840 Speaker 1: a very interesting difference in the governance process of China. 424 00:23:40,119 --> 00:23:45,080 Speaker 1: They also, at sixty eight are supposed to the part office, 425 00:23:45,160 --> 00:23:48,240 Speaker 1: or at least not be reconfirmed. This time. We may 426 00:23:48,320 --> 00:23:52,400 Speaker 1: see a surprise. Wang Shi Shun is sixty eight. Now 427 00:23:52,560 --> 00:23:56,080 Speaker 1: he is a very able guy. He may be retained 428 00:23:56,080 --> 00:23:59,920 Speaker 1: to stay on even though he's now reached the tradition 429 00:24:00,000 --> 00:24:03,600 Speaker 1: a time frame. David, Bob, your your enthusiasm for this country, 430 00:24:03,600 --> 00:24:06,280 Speaker 1: this region is is palpable, and I wonder why you 431 00:24:06,320 --> 00:24:09,159 Speaker 1: think it is. This administration doesn't seem to to share it. 432 00:24:09,200 --> 00:24:10,920 Speaker 1: I know that the Assistant Secretary of State for East 433 00:24:10,920 --> 00:24:14,560 Speaker 1: Asian Pacific Affairs is somebody feeling that they have not 434 00:24:14,600 --> 00:24:18,199 Speaker 1: nominated something that I've seen. There's an acting Assistant Secretary 435 00:24:18,720 --> 00:24:20,320 Speaker 1: m Rex to listen spend there a couple of times. 436 00:24:20,320 --> 00:24:22,440 Speaker 1: I was speaking with Secretary Albright yesterday and she said 437 00:24:22,440 --> 00:24:24,280 Speaker 1: her first trip to China was I think less than 438 00:24:24,320 --> 00:24:28,080 Speaker 1: a month after she was named Secretary of State. Is 439 00:24:28,600 --> 00:24:30,800 Speaker 1: the level of engagement enough? And what would you say 440 00:24:30,800 --> 00:24:32,919 Speaker 1: to this administration about how engaged they have to be 441 00:24:32,960 --> 00:24:36,880 Speaker 1: with China going forward? Well, the level engagements definitely not enough. 442 00:24:36,960 --> 00:24:39,399 Speaker 1: I started going to China in the early seventies when 443 00:24:39,600 --> 00:24:43,919 Speaker 1: Mao was Party secretary and Joe and I was premier, 444 00:24:43,960 --> 00:24:47,040 Speaker 1: and so I've seen it change. And the one thing 445 00:24:47,080 --> 00:24:49,840 Speaker 1: about it is we will find many issues where we 446 00:24:49,920 --> 00:24:53,840 Speaker 1: agree and many issues where we disagree with China. The 447 00:24:53,920 --> 00:24:57,399 Speaker 1: critical element is, first of all, to understand it and 448 00:24:57,480 --> 00:25:00,399 Speaker 1: understand the people who are leading it, understand the people 449 00:25:00,520 --> 00:25:02,800 Speaker 1: who are leading it, and the fact that they have 450 00:25:02,880 --> 00:25:06,040 Speaker 1: to be responsive to public opinion. It's not a democracy, 451 00:25:06,080 --> 00:25:09,080 Speaker 1: but they have to be responsive to public opinion, and 452 00:25:09,200 --> 00:25:12,399 Speaker 1: understanding that public opinion is very important. Also, understanding how 453 00:25:12,480 --> 00:25:15,480 Speaker 1: China perceives its interests is very important. You can't do 454 00:25:15,520 --> 00:25:20,680 Speaker 1: that sitting in Washington or New York or anywhere else. 455 00:25:21,119 --> 00:25:23,159 Speaker 1: You've got to go to China talk to China, and 456 00:25:23,160 --> 00:25:27,080 Speaker 1: not just go Thomas mentioning a moment ago to Shanghai 457 00:25:27,200 --> 00:25:30,200 Speaker 1: or Beijing. You've got to go to these middle levels 458 00:25:30,320 --> 00:25:32,600 Speaker 1: or inner cities. And these are big cities. Chung Chang 459 00:25:32,760 --> 00:25:35,920 Speaker 1: is a very big city, chung Do, Western China, very 460 00:25:35,960 --> 00:25:39,160 Speaker 1: big city. So you've got to really see China, understand 461 00:25:39,240 --> 00:25:41,679 Speaker 1: that there's China, and then there are various provinces. The 462 00:25:41,680 --> 00:25:45,479 Speaker 1: provinces have different points of view, but virtually anything of 463 00:25:45,520 --> 00:25:48,119 Speaker 1: consequence in the world over the next several years, certainly 464 00:25:48,119 --> 00:25:50,720 Speaker 1: in the economic area and almost every part of the 465 00:25:50,800 --> 00:25:54,040 Speaker 1: security world, is going to depend to some degree on 466 00:25:54,240 --> 00:25:57,280 Speaker 1: how the United States and China work together. So it's 467 00:25:57,320 --> 00:26:01,240 Speaker 1: not something we can dismiss or or take lightly. But 468 00:26:01,320 --> 00:26:03,160 Speaker 1: we also have to make sure that we have good 469 00:26:03,160 --> 00:26:08,680 Speaker 1: relations with our allies, our friends UM, Japan, South Korea, 470 00:26:09,320 --> 00:26:12,719 Speaker 1: the EU, because in fact we're stronger in dealing with 471 00:26:12,840 --> 00:26:17,560 Speaker 1: China if we have strong friendships and alliances of other 472 00:26:17,640 --> 00:26:20,440 Speaker 1: countries as well. The Chinese have the same idea. They're 473 00:26:20,440 --> 00:26:24,920 Speaker 1: trying to develop strong partnerships and alliances with other countries, 474 00:26:24,960 --> 00:26:27,600 Speaker 1: so they understand this is one to one, but it's 475 00:26:27,640 --> 00:26:31,399 Speaker 1: also groups visa v groups, Bob, I believe if I 476 00:26:31,440 --> 00:26:33,280 Speaker 1: saw Kenra, you know, I had Ken. I had a 477 00:26:33,400 --> 00:26:35,280 Speaker 1: beverage of my choice in my hand through most of 478 00:26:35,359 --> 00:26:38,920 Speaker 1: ken Burns Vietnam. But I believe a Republican president quote 479 00:26:39,000 --> 00:26:45,919 Speaker 1: unquote open China. Is this administration now anti China? I 480 00:26:45,960 --> 00:26:51,080 Speaker 1: think this administration's probably not anti China, but some of 481 00:26:51,119 --> 00:26:54,400 Speaker 1: the things they're doing are going to make our relationship 482 00:26:54,520 --> 00:26:58,439 Speaker 1: with China very difficult unless they understand. And perhaps this 483 00:26:58,520 --> 00:27:02,240 Speaker 1: trip by President Trump will help this understanding. Understanding that 484 00:27:02,320 --> 00:27:05,080 Speaker 1: China is going to be a more assertive player, and 485 00:27:05,119 --> 00:27:08,119 Speaker 1: while we might not agree with China and won't agree 486 00:27:08,160 --> 00:27:10,560 Speaker 1: with China on a lot of issues, we have to 487 00:27:10,640 --> 00:27:15,080 Speaker 1: work with it. Nixon understood that, he understood that there, 488 00:27:15,160 --> 00:27:18,439 Speaker 1: and he was a traditional, very conservative Guy've been interested, 489 00:27:18,560 --> 00:27:21,440 Speaker 1: you had to work with China on key issues. President 490 00:27:21,440 --> 00:27:23,280 Speaker 1: Trump has to come to understand you have to work 491 00:27:23,320 --> 00:27:25,639 Speaker 1: with China and you're not going to push them around. 492 00:27:25,720 --> 00:27:28,120 Speaker 1: You're not going to push them around because they feel 493 00:27:28,119 --> 00:27:31,040 Speaker 1: a sense of confidence, they feel they've been quite successful 494 00:27:31,119 --> 00:27:34,120 Speaker 1: on their economics. They feel they're in a stronger position, 495 00:27:34,200 --> 00:27:36,640 Speaker 1: certainly in East Asia than they were five years ago. 496 00:27:37,280 --> 00:27:39,280 Speaker 1: And we have to figure out a way of what 497 00:27:39,800 --> 00:27:43,960 Speaker 1: the Chinese called win win situations, which essentially are situations 498 00:27:44,040 --> 00:27:47,159 Speaker 1: or solutions that enable us and the Chinese to come 499 00:27:47,200 --> 00:27:50,199 Speaker 1: away feeling we have each made progress. That takes a 500 00:27:50,200 --> 00:27:52,919 Speaker 1: lot of engagement, a lot of engagement at senior levels. 501 00:27:53,560 --> 00:27:55,520 Speaker 1: And you know Tillerson has going there a couple of 502 00:27:55,600 --> 00:27:58,240 Speaker 1: times and has tried to do this. We have to 503 00:27:58,280 --> 00:28:00,240 Speaker 1: do it across the board. But it has to be 504 00:28:00,320 --> 00:28:05,240 Speaker 1: done because the world will not work well. The global 505 00:28:05,240 --> 00:28:10,000 Speaker 1: economy won't work well, global security will not be stable 506 00:28:10,119 --> 00:28:13,320 Speaker 1: unless we find some way of working with China, even 507 00:28:13,359 --> 00:28:15,240 Speaker 1: if we don't agree, at least figure out a way 508 00:28:15,240 --> 00:28:18,000 Speaker 1: of managing our differences. That the j c POA and 509 00:28:18,040 --> 00:28:20,000 Speaker 1: what we saw from a President Trump a couple of 510 00:28:20,000 --> 00:28:22,560 Speaker 1: weeks back, he essentially punting a decision over to to 511 00:28:22,640 --> 00:28:24,400 Speaker 1: Congress to figure out what to do with that run 512 00:28:24,520 --> 00:28:27,720 Speaker 1: a nuclear deal. You mentioned Nixon in China, he seemed 513 00:28:27,760 --> 00:28:29,879 Speaker 1: to own that part of that foreign policy portfolio. I 514 00:28:29,920 --> 00:28:32,119 Speaker 1: think of President Obama doing the same thing with with Iran. 515 00:28:32,160 --> 00:28:35,480 Speaker 1: It became something that was squarely centered in the executive branch. 516 00:28:35,720 --> 00:28:37,960 Speaker 1: Do you understand his motivations for moving it over to 517 00:28:37,960 --> 00:28:39,800 Speaker 1: to Congress? Did that makes sense to you what he 518 00:28:39,840 --> 00:28:43,080 Speaker 1: elected to do last week? Well, it made sense, um 519 00:28:43,120 --> 00:28:45,200 Speaker 1: if you look at it from a domestic political point 520 00:28:45,240 --> 00:28:47,720 Speaker 1: of view. He didn't want to have to re certify 521 00:28:47,920 --> 00:28:55,720 Speaker 1: the graded teeth, the sanctions lifting every ninety days. Um. 522 00:28:55,760 --> 00:29:00,680 Speaker 1: But what troubles me about it is that if the 523 00:29:00,720 --> 00:29:06,080 Speaker 1: Congress decides whatever it decides, if it decides to reimpose 524 00:29:06,160 --> 00:29:11,440 Speaker 1: sanctions or or or the President said, unless we can 525 00:29:11,600 --> 00:29:15,920 Speaker 1: change the agreement to comply with the kind of criteria 526 00:29:16,000 --> 00:29:20,360 Speaker 1: he put into his speech, like eliminating these sunsets or 527 00:29:20,640 --> 00:29:24,600 Speaker 1: doing a number of other things, Uh, then he's going 528 00:29:24,680 --> 00:29:29,440 Speaker 1: to reimpose sanctions himself. The Congress if they can't reach 529 00:29:29,440 --> 00:29:31,479 Speaker 1: an agreement, or we can't reach an agreement with their 530 00:29:31,520 --> 00:29:35,480 Speaker 1: allies and the Iranians to change the agreement, he said 531 00:29:35,600 --> 00:29:38,400 Speaker 1: he would reimpose sanctions and get out of the agreement. 532 00:29:38,960 --> 00:29:42,480 Speaker 1: The problem with that is, what's the strategy getting out 533 00:29:42,520 --> 00:29:47,240 Speaker 1: of an agreement UM and tearing it up and reimposing sanctions. 534 00:29:47,800 --> 00:29:50,000 Speaker 1: You can you can predict what's gonna happen. One will 535 00:29:50,040 --> 00:29:52,760 Speaker 1: have a big confrontation with their allies because our allies 536 00:29:53,520 --> 00:29:56,479 Speaker 1: understand that the Iranians are complying with the agreement, So 537 00:29:56,520 --> 00:30:01,200 Speaker 1: they're going to continue to trade, if and invest in 538 00:30:02,160 --> 00:30:05,920 Speaker 1: Iran unless the United States takes very tough actions against 539 00:30:06,920 --> 00:30:09,280 Speaker 1: our allies to try to prevent them from doing that, 540 00:30:09,360 --> 00:30:13,120 Speaker 1: which requires UM we will lead to a split, will 541 00:30:13,200 --> 00:30:16,880 Speaker 1: lead to friction between the US and its allies. And second, 542 00:30:17,560 --> 00:30:20,680 Speaker 1: if the Iranians say the Americans are violating the agreement, 543 00:30:21,000 --> 00:30:27,000 Speaker 1: we're going to start a more advanced, more intensive enrichment 544 00:30:27,040 --> 00:30:30,560 Speaker 1: program because we now feel free to do that, Then 545 00:30:30,600 --> 00:30:32,320 Speaker 1: what do we do in the region. I think we're 546 00:30:32,320 --> 00:30:35,760 Speaker 1: in a much better position with this agreement than without it. 547 00:30:35,840 --> 00:30:38,320 Speaker 1: Is it perfect, no, but we're in a much stronger position. 548 00:30:38,560 --> 00:30:41,280 Speaker 1: If the Iranians cut back as they have on their 549 00:30:41,360 --> 00:30:47,200 Speaker 1: enrichment program and their reactors UM, then then at least 550 00:30:47,280 --> 00:30:51,520 Speaker 1: we have more transparency and we have a state belie ambassador. 551 00:30:51,560 --> 00:30:54,120 Speaker 1: Thank you so much. Robert Hormance with us this morning, 552 00:30:54,440 --> 00:31:09,000 Speaker 1: coming up on General Electric. This is Bloomberg. I'm going 553 00:31:09,080 --> 00:31:10,440 Speaker 1: to get it right to it. I think it's it's 554 00:31:10,520 --> 00:31:14,960 Speaker 1: really important to uh to do that uh this morning, 555 00:31:15,280 --> 00:31:18,120 Speaker 1: and we'll do it. Uh what what What's important to me, 556 00:31:18,200 --> 00:31:22,320 Speaker 1: David is there's like crossroads states or you know, states 557 00:31:22,360 --> 00:31:26,440 Speaker 1: that are so diverse and odd and strange. Illinois, Florida, 558 00:31:27,160 --> 00:31:31,479 Speaker 1: Maryland is like a mini Illinois, mini Florida. It's a 559 00:31:31,560 --> 00:31:35,400 Speaker 1: hugely diverse state. It's it's really cool and and one 560 00:31:35,400 --> 00:31:37,280 Speaker 1: of two representing that state in the U. S. Senate 561 00:31:37,400 --> 00:31:39,520 Speaker 1: is our next guest, and there Chris van Holland, former 562 00:31:39,640 --> 00:31:42,800 Speaker 1: cocusman from the eighth District in Maryland, now in the Senate. 563 00:31:42,800 --> 00:31:45,600 Speaker 1: Among the committees he sits on is the Budget Committee. 564 00:31:45,640 --> 00:31:48,200 Speaker 1: And let's start there as we look at the what 565 00:31:48,360 --> 00:31:50,640 Speaker 1: comes next year after the debate over the debate and 566 00:31:50,680 --> 00:31:53,280 Speaker 1: the vote over the budget last night in the Senate. 567 00:31:53,320 --> 00:31:55,040 Speaker 1: Give us your reaction. First of all, I've been scrolling 568 00:31:55,040 --> 00:31:58,320 Speaker 1: through your Twitter profile this morning, center Fan Hall. I 569 00:31:58,320 --> 00:32:00,920 Speaker 1: think your your your distaste for this piece of legislation 570 00:32:00,960 --> 00:32:03,320 Speaker 1: there is is pretty apparent. Give us just a quick 571 00:32:03,400 --> 00:32:05,280 Speaker 1: quick sense here of of of why you didn't like 572 00:32:05,400 --> 00:32:10,600 Speaker 1: this piece of legislation. Absolutely, And first you're right about Maryland. 573 00:32:10,680 --> 00:32:15,680 Speaker 1: We call it America in miniature because that's geographically endemocratically diverse. 574 00:32:16,120 --> 00:32:18,479 Speaker 1: But look, and that's a good place to start on 575 00:32:18,480 --> 00:32:22,720 Speaker 1: this tax plan. This tax plan would really hit uh, 576 00:32:23,000 --> 00:32:26,600 Speaker 1: Maryland hard as it would the other forty nine states. Unlast, 577 00:32:26,800 --> 00:32:29,440 Speaker 1: you're at the very top of the income stale. If 578 00:32:29,480 --> 00:32:33,440 Speaker 1: you're a millionaire, a billionaire, this is a great tax 579 00:32:33,480 --> 00:32:36,160 Speaker 1: plan for you. You will get a walking big tax break, 580 00:32:36,640 --> 00:32:38,440 Speaker 1: but a lot of that tax break is going to 581 00:32:38,520 --> 00:32:41,600 Speaker 1: be paid for and two sources. One, a lot of 582 00:32:41,640 --> 00:32:45,000 Speaker 1: middle class taxpayers are going to be hit hard in 583 00:32:45,400 --> 00:32:49,720 Speaker 1: large part because of their removal of the deduction for 584 00:32:49,800 --> 00:32:53,960 Speaker 1: state and local taxes, but also other elements. And then 585 00:32:54,240 --> 00:32:56,840 Speaker 1: their budget sets it up so they could also cut 586 00:32:56,880 --> 00:32:59,960 Speaker 1: things like a Medicaid by close to a trillion dollar, 587 00:33:00,080 --> 00:33:04,200 Speaker 1: or's Medicare by close to five billion dollars, cut education. 588 00:33:04,320 --> 00:33:07,360 Speaker 1: So at the end of the day, between middle class 589 00:33:07,360 --> 00:33:11,360 Speaker 1: taxpayers are going to be paid more and folks who 590 00:33:11,440 --> 00:33:14,960 Speaker 1: are going to see less services, whether it's Medicare education. 591 00:33:15,880 --> 00:33:18,840 Speaker 1: This is a tax break for very wealthy people, paid 592 00:33:18,840 --> 00:33:22,760 Speaker 1: for by pretty much everybody else. I look at the 593 00:33:22,960 --> 00:33:25,800 Speaker 1: present statement from last night. In previous statements, there's been 594 00:33:26,520 --> 00:33:28,480 Speaker 1: some semblance of an olive branch. You're hoping to work 595 00:33:28,480 --> 00:33:30,920 Speaker 1: on things in the bipartisan fashion. I don't see that 596 00:33:31,000 --> 00:33:33,000 Speaker 1: with with this statement from last night on the budget 597 00:33:33,040 --> 00:33:36,560 Speaker 1: and tax reform. From your vantage, how much bi partisanship 598 00:33:36,680 --> 00:33:38,520 Speaker 1: is there on the issue of of tax reform. We 599 00:33:38,520 --> 00:33:39,920 Speaker 1: know that Senator or in Hatch, the chairman of the 600 00:33:39,920 --> 00:33:43,520 Speaker 1: Finance Committee, is working away on on legislation on the 601 00:33:43,520 --> 00:33:46,040 Speaker 1: Senate side. Have you seen all of branches? Have you 602 00:33:46,080 --> 00:33:48,640 Speaker 1: been invited to participate? What what role are you and 603 00:33:48,640 --> 00:33:50,720 Speaker 1: your Democratic colleagues playing at this point when it comes 604 00:33:50,760 --> 00:33:56,840 Speaker 1: to the tax reform process. Look, I think it's been minimal, unfortunately, 605 00:33:57,080 --> 00:34:01,880 Speaker 1: because we would like to participate fully. I believe we 606 00:34:01,920 --> 00:34:05,120 Speaker 1: do need to simplify our tax code. We need to 607 00:34:05,240 --> 00:34:07,920 Speaker 1: make reforms to our tax code. We should do it 608 00:34:08,080 --> 00:34:11,600 Speaker 1: in an open and transparent way. We should make sure 609 00:34:11,640 --> 00:34:14,840 Speaker 1: they're hearings where everybody can weigh in on the impact 610 00:34:14,880 --> 00:34:19,960 Speaker 1: these proposals will make. But so far, we've seen this 611 00:34:20,080 --> 00:34:24,080 Speaker 1: proposal put together behind closed doors, little pieces of it 612 00:34:24,680 --> 00:34:27,520 Speaker 1: trickling out. What we have seen has not been a 613 00:34:27,600 --> 00:34:31,520 Speaker 1: good We all know that when they actually did successful 614 00:34:31,680 --> 00:34:37,320 Speaker 1: tax reform back in it was done in a bipartisan way. 615 00:34:37,360 --> 00:34:41,279 Speaker 1: And the reason this budget vote is so troubling is 616 00:34:41,320 --> 00:34:45,160 Speaker 1: because the only reason for this vote is to set 617 00:34:45,239 --> 00:34:49,440 Speaker 1: up the fast track so called reconciliation process in the Senate, 618 00:34:49,440 --> 00:34:52,040 Speaker 1: which allows them to jam it through on a purely 619 00:34:52,120 --> 00:34:54,759 Speaker 1: partisan basis. So we need a bipartisan built You know 620 00:34:54,880 --> 00:34:57,040 Speaker 1: your your caucus well. And I want to go back 621 00:34:57,080 --> 00:34:59,480 Speaker 1: to a line from the President from earlier this week, 622 00:34:59,560 --> 00:35:01,400 Speaker 1: he met with members of the Senate Finance Committee at 623 00:35:01,440 --> 00:35:03,239 Speaker 1: the White House, and the marks to the press, he 624 00:35:03,400 --> 00:35:06,680 Speaker 1: raised the spectru of there being bipartisan support for tax 625 00:35:06,680 --> 00:35:08,640 Speaker 1: refor him, he said, he's not going to name names, 626 00:35:08,680 --> 00:35:10,800 Speaker 1: but there are those who said that they are willing 627 00:35:10,840 --> 00:35:12,760 Speaker 1: to support it. Does that job with what you're seeing 628 00:35:12,760 --> 00:35:14,799 Speaker 1: on the hill, what you're hearing from Democratic colleagues, do 629 00:35:14,800 --> 00:35:17,120 Speaker 1: you think that there is, maybe hidden from site, a 630 00:35:17,160 --> 00:35:19,279 Speaker 1: number of Democrats here who are in favor of the 631 00:35:19,320 --> 00:35:23,200 Speaker 1: framework that's been offered by the Big Six. I think 632 00:35:23,239 --> 00:35:26,880 Speaker 1: that there are Democrats that would support what the President 633 00:35:26,960 --> 00:35:31,440 Speaker 1: has publicly claiming about this tax plan, but which does 634 00:35:31,520 --> 00:35:34,880 Speaker 1: not reflected in the tax plans that they put forward 635 00:35:35,000 --> 00:35:37,560 Speaker 1: in the Senate. So I think you're gonna you would 636 00:35:37,600 --> 00:35:40,600 Speaker 1: find road support for a tax plan which really focused 637 00:35:40,640 --> 00:35:44,480 Speaker 1: on providing uh, some tax release to folks in the 638 00:35:44,520 --> 00:35:48,600 Speaker 1: middle class, uh, and a tax plan that met what 639 00:35:49,320 --> 00:35:51,759 Speaker 1: was dubbed the Steve Manutin rule when he announced in 640 00:35:51,880 --> 00:35:55,560 Speaker 1: November two thousand sixteen, which is there'd be no net 641 00:35:55,640 --> 00:35:59,319 Speaker 1: tax breaks for the very wealthy, and one that did 642 00:35:59,360 --> 00:36:04,200 Speaker 1: not explode our debt by another one point five trillion dollars. 643 00:36:04,400 --> 00:36:07,120 Speaker 1: So you know, the President has been saying he likes 644 00:36:07,520 --> 00:36:10,680 Speaker 1: those principles, but they are not reflected in the plan 645 00:36:10,800 --> 00:36:13,560 Speaker 1: that he's been touting around the country. If you're just 646 00:36:13,640 --> 00:36:16,080 Speaker 1: joining us right now, Senator Van Hollen with us of 647 00:36:16,160 --> 00:36:20,080 Speaker 1: Maryland Democrats from Maryland, uh. Fourteen years in the House, 648 00:36:20,120 --> 00:36:23,040 Speaker 1: Senator Schumer has put him on a couple of prestigious committees, 649 00:36:23,480 --> 00:36:25,600 Speaker 1: and also he's on the sub Committee to Save the 650 00:36:25,600 --> 00:36:29,760 Speaker 1: Baltimore Orioles, which is a Senate committee of very great 651 00:36:29,040 --> 00:36:34,840 Speaker 1: special Caucus Save the Baltimoreals as we can. Sen Holland 652 00:36:34,840 --> 00:36:38,320 Speaker 1: long ago and far away in another life, Congressman Emmanuel 653 00:36:39,400 --> 00:36:42,160 Speaker 1: said to you, you got to go out and recruit Democrats, 654 00:36:42,560 --> 00:36:46,960 Speaker 1: and you've got five star accolades for doing that. After 655 00:36:47,000 --> 00:36:50,319 Speaker 1: what you witnessed in the last election, are you gonna 656 00:36:50,320 --> 00:36:53,439 Speaker 1: be able to go out and recruit Democrats that can 657 00:36:53,520 --> 00:36:57,520 Speaker 1: shift from an east coast west coast mindset to the 658 00:36:57,560 --> 00:37:01,200 Speaker 1: middle of the nation where some would argue you lost 659 00:37:01,280 --> 00:37:05,760 Speaker 1: the presidential election. Can there be a new recruitment process 660 00:37:05,800 --> 00:37:10,920 Speaker 1: in your Democrat Party? So I'm focused right now on 661 00:37:11,000 --> 00:37:14,320 Speaker 1: the two thousand eighteen mid term elections, right the Senate elections. 662 00:37:14,560 --> 00:37:16,920 Speaker 1: I think you're referring to the fact that chair the 663 00:37:16,920 --> 00:37:21,040 Speaker 1: Democratic Senatorial Campaign Committee, UH, and in this particular cycle, 664 00:37:21,160 --> 00:37:25,640 Speaker 1: of the thirty three senators are up, twenty five of 665 00:37:25,640 --> 00:37:30,680 Speaker 1: them are Democratic incumbents. UH. There are eight Republican UH 666 00:37:31,000 --> 00:37:35,080 Speaker 1: seats that are up, and in fact, we've recruited some 667 00:37:35,239 --> 00:37:38,920 Speaker 1: very good candidates from those states. For example, UH, in 668 00:37:39,000 --> 00:37:44,680 Speaker 1: the Vata, Jackie Rosen is our candidate. In Arizona, Kirsten 669 00:37:44,800 --> 00:37:48,400 Speaker 1: Cinema is our candidate. Both of them are currently House members. 670 00:37:48,920 --> 00:37:52,319 Speaker 1: And we've got other candidates that have been recruited in 671 00:37:52,360 --> 00:37:56,160 Speaker 1: a really good candidates in places like Nebraska and other places. However, 672 00:37:56,239 --> 00:38:00,840 Speaker 1: the Senate map this time around, Uh, it's just tougher 673 00:38:00,920 --> 00:38:04,520 Speaker 1: for Democrats in terms of the number of number of 674 00:38:04,600 --> 00:38:08,160 Speaker 1: seats to where you have Republican incumbents versus Democratic incumbents. 675 00:38:08,160 --> 00:38:10,080 Speaker 1: But I agree with you that, look, we need to 676 00:38:10,600 --> 00:38:14,560 Speaker 1: we need to focus on a broad and deep economic 677 00:38:14,640 --> 00:38:17,719 Speaker 1: message focused on jobs and wages. These are things that 678 00:38:17,800 --> 00:38:21,080 Speaker 1: everybody cares about. That doesn't mean we do it to 679 00:38:21,120 --> 00:38:25,560 Speaker 1: the exclusion of important questions of social justice. The Democratic 680 00:38:25,600 --> 00:38:29,560 Speaker 1: Party will always be the party of inclusion. But inclusion 681 00:38:30,160 --> 00:38:34,440 Speaker 1: also means, you know, making sure that everybody can benefit 682 00:38:34,560 --> 00:38:37,520 Speaker 1: from growing prosperity, and we need to we need to 683 00:38:37,600 --> 00:38:39,920 Speaker 1: drive economic growth, but do it in a way where 684 00:38:40,280 --> 00:38:42,919 Speaker 1: more people benefit. Center Van Hollan. In the last couple 685 00:38:42,920 --> 00:38:44,600 Speaker 1: of minutes we have with you, I know that you'll 686 00:38:44,640 --> 00:38:46,640 Speaker 1: you'll recognize that the issue who is going to be 687 00:38:46,640 --> 00:38:48,400 Speaker 1: the next FED chair is important to those who are 688 00:38:48,400 --> 00:38:50,560 Speaker 1: listening to to the show here on on Bloomberg Radio. 689 00:38:50,600 --> 00:38:53,080 Speaker 1: You sit on the Senate Banking Committee as well. Give 690 00:38:53,160 --> 00:38:55,480 Speaker 1: us a sense or your sense of of how you 691 00:38:55,480 --> 00:38:57,239 Speaker 1: think those hearings are going to proceed. Once we get 692 00:38:57,239 --> 00:39:00,399 Speaker 1: a nominee from the President to to get to head 693 00:39:00,400 --> 00:39:03,560 Speaker 1: the FED. Come two, what are those hearings going to be? Like, 694 00:39:03,640 --> 00:39:05,560 Speaker 1: what do you want to hear from the next nominee 695 00:39:05,560 --> 00:39:08,920 Speaker 1: to be the chair of the Federal Reserve? Well, I 696 00:39:08,960 --> 00:39:11,680 Speaker 1: would want a nominee the Chair of the Federal Reserve 697 00:39:11,880 --> 00:39:17,840 Speaker 1: to UH be focused on both prongs of the Federal 698 00:39:17,880 --> 00:39:21,560 Speaker 1: Reserves mandate. So yes, UH, they've obviously got to keep 699 00:39:21,600 --> 00:39:24,920 Speaker 1: an eye on inflation, but they've also got to make 700 00:39:24,920 --> 00:39:29,319 Speaker 1: sure that they're focused on UH employment and making sure 701 00:39:29,360 --> 00:39:32,960 Speaker 1: that we have a strong economy with high levels of employment. 702 00:39:33,600 --> 00:39:37,560 Speaker 1: So you know, in my view, the current chair has 703 00:39:37,600 --> 00:39:43,480 Speaker 1: done a good job of that. But obviously we're watching 704 00:39:43,480 --> 00:39:47,359 Speaker 1: the series of interviews that the President's undertaking, UH, and 705 00:39:47,440 --> 00:39:49,600 Speaker 1: they'll have a nominee. But from my perspective, you know, 706 00:39:49,640 --> 00:39:52,680 Speaker 1: I want somebody who is going to be UH focused 707 00:39:52,719 --> 00:39:57,319 Speaker 1: on making sure that we put America to work. You 708 00:39:57,320 --> 00:39:59,399 Speaker 1: look at those those five nominees, does does any stand 709 00:39:59,400 --> 00:40:01,359 Speaker 1: out to you? Is not qualified? Somebody that you don't 710 00:40:01,400 --> 00:40:04,440 Speaker 1: think you could support. You know, I have not had 711 00:40:04,480 --> 00:40:07,040 Speaker 1: a chance to really look into the background through all 712 00:40:07,040 --> 00:40:10,279 Speaker 1: of the nominees right now, and so we're kind of 713 00:40:10,320 --> 00:40:13,160 Speaker 1: waiting for the President to make his choice, and then 714 00:40:13,200 --> 00:40:16,080 Speaker 1: we'll have an opportunity to really scrub the records. Cal 715 00:40:16,200 --> 00:40:20,640 Speaker 1: Ripkins on the show, someone you can go as a senator, 716 00:40:20,800 --> 00:40:23,120 Speaker 1: Senator Van Holland, thank you so much from the great 717 00:40:23,120 --> 00:40:26,839 Speaker 1: space of pleasure. Thank you. Just love talking to uh, 718 00:40:27,000 --> 00:40:31,080 Speaker 1: these senators and these congress men and women about the 719 00:40:31,120 --> 00:40:36,759 Speaker 1: geography the culture that they encompass. Maryland is extraordinarily underrated 720 00:40:36,760 --> 00:40:39,960 Speaker 1: for diversity. We just look at his balmore and you 721 00:40:40,000 --> 00:40:42,400 Speaker 1: know the train goes through on the way to Washington, 722 00:40:42,440 --> 00:40:46,040 Speaker 1: and that is David beyond silly. It's much much more 723 00:40:46,080 --> 00:41:02,439 Speaker 1: there To say the least, this is a joy. He's 724 00:41:02,440 --> 00:41:04,680 Speaker 1: put out three missiles in the last couple of days, 725 00:41:05,239 --> 00:41:07,279 Speaker 1: one of them on Snapchat. We'll try to get to 726 00:41:07,360 --> 00:41:10,560 Speaker 1: that in the second block. But as usual, Rich Greenfield, 727 00:41:10,640 --> 00:41:13,640 Speaker 1: total class actor said, I guess I got step Chat wrong, 728 00:41:13,920 --> 00:41:16,320 Speaker 1: and we'll talk about that. Maybe nobody cares B T 729 00:41:16,480 --> 00:41:19,440 Speaker 1: I G. And of course, wonderful work on media. What 730 00:41:19,640 --> 00:41:24,760 Speaker 1: stopped me in my tracks, Rich, was your legacy media 731 00:41:24,880 --> 00:41:28,560 Speaker 1: memo of a few days ago, which was a clarion 732 00:41:28,760 --> 00:41:32,200 Speaker 1: call stop screwing around with stock by backs in short 733 00:41:32,320 --> 00:41:36,520 Speaker 1: termism and start thinking long term. What's the shift in 734 00:41:36,600 --> 00:41:42,799 Speaker 1: the autumn of two thousand seventeen for legacy media. Look, 735 00:41:42,920 --> 00:41:48,920 Speaker 1: these these companies are really focused on, you know, trying 736 00:41:48,960 --> 00:41:54,279 Speaker 1: to maintain earnings, achieve Wall Street expectations, to make sure 737 00:41:54,360 --> 00:41:57,960 Speaker 1: the executives get their compensation, which is usually tied to 738 00:41:58,120 --> 00:42:01,720 Speaker 1: earnings growth targets. And they're all failing to to miss 739 00:42:02,520 --> 00:42:07,360 Speaker 1: that the consumer behavior is shifting rapidly. The whole world 740 00:42:07,520 --> 00:42:11,880 Speaker 1: is kind of rotating around the mobile phone, and they're 741 00:42:11,920 --> 00:42:16,040 Speaker 1: nowhere to be found. And rather than investing aggressively, either 742 00:42:16,120 --> 00:42:22,160 Speaker 1: through acquisition or through kind of organic um investment, what 743 00:42:22,239 --> 00:42:24,520 Speaker 1: they're all doing, or so many of them are doing, 744 00:42:24,920 --> 00:42:28,359 Speaker 1: they're gunning their share by back. And Look, we can 745 00:42:28,400 --> 00:42:32,240 Speaker 1: debate how fast the media sector, legacy sector is falling 746 00:42:32,280 --> 00:42:35,160 Speaker 1: apart bundle, you know, kind of the fall up and 747 00:42:35,200 --> 00:42:38,200 Speaker 1: subscribers and cord cutting, advertising, things that you and I 748 00:42:38,239 --> 00:42:41,080 Speaker 1: have talked about before. We can debate it, and there's 749 00:42:41,080 --> 00:42:43,400 Speaker 1: so only different rates of the climb. But what I 750 00:42:43,480 --> 00:42:46,120 Speaker 1: think is incredible, Tom, is how can any board of 751 00:42:46,160 --> 00:42:49,040 Speaker 1: director look at this space and go, God, I am 752 00:42:49,080 --> 00:42:51,960 Speaker 1: confident that the future looks good. I'm gonna buy my 753 00:42:52,000 --> 00:42:55,239 Speaker 1: own stock that's the best place to put capital. That 754 00:42:55,360 --> 00:42:58,359 Speaker 1: just seems to irresponsible. I mean, Disney's bought more stock 755 00:42:58,440 --> 00:43:01,640 Speaker 1: than any company in the space over the last Okay, 756 00:43:01,760 --> 00:43:04,080 Speaker 1: is Disney? Is Disney? The next is Disney the next 757 00:43:04,080 --> 00:43:07,080 Speaker 1: General Electric? Now the folks, folks, we can talk about 758 00:43:07,080 --> 00:43:10,640 Speaker 1: ge with oir, NBC, universal ownership, etcetera. Now over to 759 00:43:10,719 --> 00:43:14,520 Speaker 1: Comcast in such but is Disney and other legacy media 760 00:43:14,680 --> 00:43:17,920 Speaker 1: are they the next General Electric? I think it's a 761 00:43:17,960 --> 00:43:20,600 Speaker 1: real fear that you have to have looking at this space. 762 00:43:20,600 --> 00:43:24,200 Speaker 1: When when management teams focus on share buy back, it 763 00:43:24,320 --> 00:43:28,200 Speaker 1: usually means the industry is mature, and you know, I 764 00:43:28,200 --> 00:43:31,440 Speaker 1: think there has to be far better places for Disney 765 00:43:31,480 --> 00:43:35,880 Speaker 1: to put capital than reinvesting essentially in what is a 766 00:43:36,000 --> 00:43:39,480 Speaker 1: meaningful chunk of ESPN right now, not to mention movies 767 00:43:39,520 --> 00:43:42,279 Speaker 1: that kind of a pinnacle of success over the last 768 00:43:42,280 --> 00:43:45,239 Speaker 1: few years. The odds of continuing that success are low, 769 00:43:45,280 --> 00:43:47,720 Speaker 1: and so look, I just think it's it's really hard 770 00:43:47,760 --> 00:43:50,879 Speaker 1: for me to imagine how the boards get sign off 771 00:43:51,000 --> 00:43:53,359 Speaker 1: on buying back lots of stock. I mean, it's one 772 00:43:53,400 --> 00:43:56,000 Speaker 1: thing if it's a small part of your capital. You know, 773 00:43:56,040 --> 00:43:58,200 Speaker 1: you look at Facebook, they buy a little bit or Google, 774 00:43:58,239 --> 00:44:00,480 Speaker 1: they buy a little bit, but for the level of 775 00:44:00,520 --> 00:44:03,480 Speaker 1: investment that some of these legacy media companies have done, 776 00:44:03,920 --> 00:44:07,400 Speaker 1: it really just looks irresponsible. Uh. I pick up the 777 00:44:07,400 --> 00:44:10,560 Speaker 1: New York Times this morning another horrifying tale about Harvey Weinstein, 778 00:44:11,000 --> 00:44:13,279 Speaker 1: this one written by Lapide and the Ango, and we're 779 00:44:13,360 --> 00:44:15,840 Speaker 1: left to wonder what happens to the Weinstein Company. We 780 00:44:15,880 --> 00:44:17,440 Speaker 1: had a conversation a little bit earlier in the week 781 00:44:17,440 --> 00:44:20,319 Speaker 1: when we learned that College Capital was taking a big 782 00:44:20,360 --> 00:44:23,120 Speaker 1: stake in the company. What happens to this, to this, 783 00:44:23,480 --> 00:44:25,480 Speaker 1: to this company? Rich? I mean, it's been around for 784 00:44:25,480 --> 00:44:28,120 Speaker 1: a while now, Dimension is reportedly still doing well and 785 00:44:28,360 --> 00:44:30,560 Speaker 1: making money. Uh. Is it going to be sold off 786 00:44:30,560 --> 00:44:32,040 Speaker 1: in pieces? What do you think the future of it's 787 00:44:32,040 --> 00:44:35,840 Speaker 1: going to be? Honestly, I think that's really difficult to 788 00:44:35,840 --> 00:44:40,120 Speaker 1: tell right now. Look, film libraries or film and television 789 00:44:40,120 --> 00:44:44,640 Speaker 1: libraries have lots of value, But how you extricate the 790 00:44:44,719 --> 00:44:47,680 Speaker 1: assets from all of the issues, and you know, without 791 00:44:47,719 --> 00:44:51,200 Speaker 1: knowing how long the issues go on for, it's just 792 00:44:51,239 --> 00:44:53,880 Speaker 1: not clear. I mean, there's absolutely value in the properties. 793 00:44:53,880 --> 00:44:56,800 Speaker 1: I mean, we've you know, over twenty three years of 794 00:44:56,840 --> 00:45:00,280 Speaker 1: analyzing this space, we've seen lots of film libry worries 795 00:45:00,320 --> 00:45:04,080 Speaker 1: and TV libraries change hands. Uh, they're pretty scarce resources, 796 00:45:04,080 --> 00:45:07,319 Speaker 1: so there's certainly value there. But but when you know, look, 797 00:45:07,360 --> 00:45:10,000 Speaker 1: I assume most companies in the space would have interest 798 00:45:10,040 --> 00:45:12,920 Speaker 1: in a film and TV library. The question is is 799 00:45:13,040 --> 00:45:14,560 Speaker 1: you know, when are you able to buy it without 800 00:45:14,600 --> 00:45:17,160 Speaker 1: hair on it? And how long do you think that's 801 00:45:17,160 --> 00:45:18,600 Speaker 1: going to be? I mean that that is the that 802 00:45:18,680 --> 00:45:22,160 Speaker 1: is the ten question. I mean the company, the company 803 00:45:22,200 --> 00:45:24,640 Speaker 1: is gonna change his name. Bob Weinstein says, that does 804 00:45:24,719 --> 00:45:26,480 Speaker 1: does that make it more palatable? Do you think to 805 00:45:26,560 --> 00:45:30,160 Speaker 1: perspective buyer, Yeah, I don't know. I really don't know. 806 00:45:30,200 --> 00:45:32,239 Speaker 1: All I'd say is that the asset isn't big enough 807 00:45:32,320 --> 00:45:34,799 Speaker 1: where it moves the needle, you know, for any of 808 00:45:34,840 --> 00:45:37,080 Speaker 1: the an agers. And I'm sure everyone would have interest. 809 00:45:37,120 --> 00:45:39,960 Speaker 1: But I don't think you know, this is um you know, 810 00:45:39,960 --> 00:45:42,080 Speaker 1: I think there's far bigger implications in the story than 811 00:45:42,120 --> 00:45:45,000 Speaker 1: who ends up owing the asset rich. What is the 812 00:45:45,040 --> 00:45:47,360 Speaker 1: implication of all the money that's going to be thrown 813 00:45:47,800 --> 00:45:51,399 Speaker 1: at content, everybody piling into make you finding the next 814 00:45:51,400 --> 00:45:53,759 Speaker 1: Game of Thrones, et cetera. What's going to be the 815 00:45:53,800 --> 00:45:56,800 Speaker 1: outcome of the wall of money coming into l A 816 00:45:56,880 --> 00:46:02,200 Speaker 1: and New York. I think it's very simple, Uh, in 817 00:46:02,840 --> 00:46:06,560 Speaker 1: very severe pressure on linear TV ratings. You know, there's 818 00:46:06,600 --> 00:46:08,920 Speaker 1: only so much time that you and your listeners to 819 00:46:08,960 --> 00:46:12,720 Speaker 1: this show have. There's great content. You know, Apple's investing 820 00:46:12,760 --> 00:46:15,759 Speaker 1: five million an episode named Steven Spielberg Show. You know, 821 00:46:15,920 --> 00:46:18,920 Speaker 1: Amazon is taking a much more you know, much different 822 00:46:18,920 --> 00:46:22,120 Speaker 1: approach now, going for kind of higher end comedies and dramas. 823 00:46:22,440 --> 00:46:24,799 Speaker 1: Netflix is going to do eighty movies next year on 824 00:46:24,840 --> 00:46:26,640 Speaker 1: their service that you don't have to go to the 825 00:46:26,520 --> 00:46:29,680 Speaker 1: theaters to see, let alone all the TV series. There's 826 00:46:29,719 --> 00:46:33,120 Speaker 1: so much competition for your time that though, why turn 827 00:46:33,200 --> 00:46:35,480 Speaker 1: on TV and start watching the show tonight that has 828 00:46:35,520 --> 00:46:37,239 Speaker 1: eighteen minutes of commercials and you have to wait to 829 00:46:37,280 --> 00:46:42,240 Speaker 1: work between episodes? That, um, that is in deep trouble. 830 00:46:42,480 --> 00:46:45,239 Speaker 1: And so I think that's the biggest takeaway is that 831 00:46:45,640 --> 00:46:47,960 Speaker 1: TV is in trouble. Well, let's do this, Rich Greenfield 832 00:46:47,960 --> 00:46:49,719 Speaker 1: thrilled to have them with us. We're going to continue 833 00:46:49,719 --> 00:46:53,120 Speaker 1: with Mr Greenfield of bt I G yes, we'll speak 834 00:46:53,160 --> 00:46:55,960 Speaker 1: of Disney, David Gerr and Tom Keene stay with us. 835 00:46:55,960 --> 00:46:59,600 Speaker 1: This is Bloomberg Rich Greenfield with us in media. Rich, 836 00:46:59,640 --> 00:47:04,400 Speaker 1: would you acquire shares of Generous Electric this morning, I 837 00:47:04,480 --> 00:47:08,640 Speaker 1: have no idea way outside of my category of knowledge. 838 00:47:08,640 --> 00:47:12,000 Speaker 1: I focused on media companies, which g hasn't been for 839 00:47:12,040 --> 00:47:14,960 Speaker 1: many years now. But but they tried to do it 840 00:47:15,000 --> 00:47:18,319 Speaker 1: all maybe and there was a conglomertus, which is the 841 00:47:18,400 --> 00:47:26,640 Speaker 1: conglomerate in your world that is most apt to deconglometorize. Well, 842 00:47:26,680 --> 00:47:28,719 Speaker 1: look the I think the company that's done the best 843 00:47:28,800 --> 00:47:31,839 Speaker 1: job and probably be remembered in the history books as 844 00:47:31,880 --> 00:47:34,400 Speaker 1: being the smartest CEO that's ever lived in the media 845 00:47:34,440 --> 00:47:38,080 Speaker 1: space d Time Warner and Jeff Bucas. Not only did 846 00:47:38,120 --> 00:47:42,720 Speaker 1: he de conglomertized, you know, basically split apart a O. L. Warner, Music, 847 00:47:43,200 --> 00:47:48,080 Speaker 1: Time Warner, Cable, Time Life, you know, publishing, but to 848 00:47:48,239 --> 00:47:50,400 Speaker 1: finish it all off, not only did it break it 849 00:47:50,400 --> 00:47:54,000 Speaker 1: into all these little pieces and get smaller and digestible. 850 00:47:54,400 --> 00:47:56,680 Speaker 1: He ended up just as the industry is starting to 851 00:47:57,520 --> 00:48:01,520 Speaker 1: um think literally think Tom. He sells the company and 852 00:48:01,560 --> 00:48:05,239 Speaker 1: gets out for fift cash. And so while the whole 853 00:48:05,280 --> 00:48:09,960 Speaker 1: sector has underperformed, look at the success of Time Warner 854 00:48:10,040 --> 00:48:12,200 Speaker 1: for shareholders. You know, it's pretty amazing. If you look 855 00:48:12,239 --> 00:48:14,839 Speaker 1: at you go back to when Bob Iger got up 856 00:48:14,840 --> 00:48:19,000 Speaker 1: on a conference call in August of he basically signaled 857 00:48:19,520 --> 00:48:21,799 Speaker 1: a big inflection point for the sector where he talked 858 00:48:21,840 --> 00:48:25,920 Speaker 1: about cord cutting starting to affect ESPN. Since that point, 859 00:48:26,760 --> 00:48:30,359 Speaker 1: Disney's lost fifty billion dollars of value. Kind of all 860 00:48:30,400 --> 00:48:33,560 Speaker 1: of the big cable network driven companies collectively have lost 861 00:48:33,640 --> 00:48:36,480 Speaker 1: ninety billion. But Time Warner is actually up over that 862 00:48:36,520 --> 00:48:41,719 Speaker 1: period of time because they sold. And so that's the 863 00:48:41,800 --> 00:48:44,439 Speaker 1: key thing is is selling has been the only way 864 00:48:44,880 --> 00:48:48,160 Speaker 1: you've created value for shareholders in this sector over the 865 00:48:48,200 --> 00:48:50,040 Speaker 1: last couple of years. And David Garrel, We're gonna do 866 00:48:50,080 --> 00:48:52,440 Speaker 1: what we do best, which is steal ideas from our guests. 867 00:48:52,440 --> 00:48:54,400 Speaker 1: I'll do a chart of that. We'll call it the 868 00:48:54,480 --> 00:48:57,480 Speaker 1: rich Greenfield chart. But it is not remarkable to see 869 00:48:57,480 --> 00:48:59,920 Speaker 1: the differential between t w X and d I S. 870 00:49:00,560 --> 00:49:02,799 Speaker 1: It's a little shameless left here on plimpic surveillance. Let 871 00:49:02,800 --> 00:49:05,640 Speaker 1: me ask you about your sense of the regulatory landscape 872 00:49:05,640 --> 00:49:07,360 Speaker 1: and watched in d C as we see more regulators 873 00:49:07,400 --> 00:49:10,520 Speaker 1: being appointed and confirmed. Uh, and you mentioned Time Warner. 874 00:49:10,520 --> 00:49:11,959 Speaker 1: Of course, is the A T and T Time Warner 875 00:49:12,000 --> 00:49:14,560 Speaker 1: deal is still sitting on the back burner. Do we 876 00:49:14,600 --> 00:49:16,800 Speaker 1: have a better sense here of what this regulatory landscape 877 00:49:16,840 --> 00:49:19,120 Speaker 1: looks like and and and what that's going to mean 878 00:49:19,280 --> 00:49:23,440 Speaker 1: for for conglomerates and for for dealmaking. You know, unfortunately, 879 00:49:23,440 --> 00:49:25,440 Speaker 1: I don't think we do. I think we're gonna learn 880 00:49:25,480 --> 00:49:27,400 Speaker 1: a lot over the next few months. You've got a 881 00:49:27,400 --> 00:49:29,439 Speaker 1: couple of very big deals, and I wouldn't say they're 882 00:49:29,440 --> 00:49:32,160 Speaker 1: back burner. I'd say they're actually, you know, finally kind 883 00:49:32,200 --> 00:49:33,960 Speaker 1: of sitting on that front burner. And we're gonna get 884 00:49:33,960 --> 00:49:37,200 Speaker 1: a real sense of whether how the Trump administration thinks 885 00:49:37,200 --> 00:49:40,319 Speaker 1: about deals, you know, in terms of big one in 886 00:49:40,440 --> 00:49:43,080 Speaker 1: my world obviously the Time Warner a T and T deal, 887 00:49:43,120 --> 00:49:47,440 Speaker 1: which appears like it's going to be pushed through. The 888 00:49:47,480 --> 00:49:50,319 Speaker 1: one that's a little less clear, although seems likely is 889 00:49:50,360 --> 00:49:54,319 Speaker 1: Sinclair Tribune uh. And obviously that's a huge consolidation of 890 00:49:54,320 --> 00:49:57,760 Speaker 1: a broadcast industry merger that we should find out about 891 00:49:57,800 --> 00:50:01,040 Speaker 1: over the next several months. And then obviously, in Walt's world, 892 00:50:01,120 --> 00:50:02,920 Speaker 1: Walt ty sink, I'm talking about B T I G 893 00:50:03,080 --> 00:50:06,880 Speaker 1: telecom analyst. You're obviously, you know, have the question marks 894 00:50:06,920 --> 00:50:09,439 Speaker 1: around whether or not we see a Sprint Team Mobile deal. 895 00:50:09,760 --> 00:50:11,400 Speaker 1: But you know, all of that will probably give you 896 00:50:11,560 --> 00:50:14,520 Speaker 1: a better sense of what isn't is impossible from an 897 00:50:14,520 --> 00:50:18,320 Speaker 1: antitrust standpoint in this administration. Just while we're we're in Washington, 898 00:50:18,360 --> 00:50:19,680 Speaker 1: let me ask you a couple of questions about the 899 00:50:19,719 --> 00:50:22,080 Speaker 1: social media companies that you follow. We we're looking ahead 900 00:50:22,080 --> 00:50:24,840 Speaker 1: in November first, when maybe not the heads of those companies, 901 00:50:24,840 --> 00:50:27,319 Speaker 1: we've learned, but high ranking members of those companies are 902 00:50:27,320 --> 00:50:29,600 Speaker 1: gonna come to the Hill to testify. How much does 903 00:50:30,160 --> 00:50:32,960 Speaker 1: the weight of Washington scrutiny weigh on on companies like 904 00:50:33,000 --> 00:50:36,960 Speaker 1: Twitter and Facebook right now? Look, I think everyone is 905 00:50:37,400 --> 00:50:42,120 Speaker 1: you know, every social or every Internet company should be 906 00:50:42,120 --> 00:50:45,440 Speaker 1: concerned about greater regulation. I mean, there's no doubt that 907 00:50:46,440 --> 00:50:50,080 Speaker 1: the lack of regulation has certainly allowed these companies to 908 00:50:50,200 --> 00:50:53,640 Speaker 1: flourish and the Internet to flourish more generally, over the 909 00:50:53,640 --> 00:50:56,000 Speaker 1: course of the last several years. You know, we were 910 00:50:56,000 --> 00:50:58,799 Speaker 1: talking about the loss in market cap of Disney and 911 00:50:58,840 --> 00:51:02,520 Speaker 1: the larger meet A sector over the last couple of years. Well, 912 00:51:02,640 --> 00:51:05,080 Speaker 1: in just the last two years, it's worth pointing out 913 00:51:05,280 --> 00:51:07,880 Speaker 1: that Facebook and Google have added five hundred and fifty 914 00:51:07,920 --> 00:51:11,840 Speaker 1: billion dollars together of market cap, and so you know, 915 00:51:12,000 --> 00:51:17,360 Speaker 1: there is huge, huge growth coming out of the Internet, 916 00:51:18,120 --> 00:51:21,800 Speaker 1: any kind of fear increased regulation, and not just regulation, 917 00:51:21,840 --> 00:51:24,200 Speaker 1: but how do you actually you know, how do you 918 00:51:24,239 --> 00:51:27,160 Speaker 1: actually regulate the sector isn't clear to us, but that 919 00:51:27,239 --> 00:51:29,759 Speaker 1: certainly should be a concern to any investor looking at 920 00:51:29,760 --> 00:51:35,839 Speaker 1: the space. I'm making a chart. Just keep asking. I'm 921 00:51:35,840 --> 00:51:39,279 Speaker 1: still I'm stealing as we go. Let me ask you 922 00:51:39,320 --> 00:51:41,560 Speaker 1: about streaming and where things stand. Is there a company 923 00:51:41,600 --> 00:51:43,359 Speaker 1: that you look to is an example of a company 924 00:51:43,440 --> 00:51:46,400 Speaker 1: that's doing going about streaming the right way? I know 925 00:51:46,440 --> 00:51:48,560 Speaker 1: you've been critical of of Disney's approaches. Is there a 926 00:51:48,600 --> 00:51:51,719 Speaker 1: company that's approaching streaming in a way that's novel, that's 927 00:51:51,760 --> 00:51:55,520 Speaker 1: working that I'm actually not critical of disneys approach. I 928 00:51:55,520 --> 00:51:58,040 Speaker 1: think they waited too long, h you know, I think 929 00:51:58,080 --> 00:52:00,520 Speaker 1: that's the key issue, is that they've waited so long. 930 00:52:00,600 --> 00:52:04,359 Speaker 1: They're not launching their streaming service until the end when 931 00:52:04,400 --> 00:52:06,680 Speaker 1: Netflix will probably have by then a hundred and fifty 932 00:52:06,719 --> 00:52:08,960 Speaker 1: or a hundred and sixty million subscribers. So it's just 933 00:52:09,320 --> 00:52:12,560 Speaker 1: hard to start from a standing part when the piers 934 00:52:12,560 --> 00:52:14,680 Speaker 1: are so big, let alone Amazon, and we could go 935 00:52:14,719 --> 00:52:17,000 Speaker 1: on and on. Um I think probably the company that 936 00:52:17,000 --> 00:52:20,320 Speaker 1: has done the best job in the legacy spasis. Probably CBS. 937 00:52:20,960 --> 00:52:23,520 Speaker 1: You know, they got out, they have CBS All Access, 938 00:52:23,520 --> 00:52:26,920 Speaker 1: They've got a couple of million subscribers CBS. This problem 939 00:52:27,040 --> 00:52:29,719 Speaker 1: is not the product. Their problem is they just don't 940 00:52:29,719 --> 00:52:32,840 Speaker 1: have a wide enough palette of content to throw at it. 941 00:52:32,880 --> 00:52:34,120 Speaker 1: You know, they really need to be part of a 942 00:52:34,200 --> 00:52:36,600 Speaker 1: larger company. It's why we've been arguing for a CBS 943 00:52:36,719 --> 00:52:39,360 Speaker 1: Viacom merger, because it would give them the ability to 944 00:52:39,400 --> 00:52:43,880 Speaker 1: make a much more robust CBS Viacom All Access versus 945 00:52:44,520 --> 00:52:49,120 Speaker 1: still a fairly limited niche or CBS All Access. I 946 00:52:49,160 --> 00:52:51,560 Speaker 1: want them to build a new bundle. One final question, 947 00:52:51,560 --> 00:52:53,200 Speaker 1: I'm gonna put your chat out in a few minutes, 948 00:52:53,239 --> 00:52:57,600 Speaker 1: and I maybe we'll give credit to rich Greenfield within 949 00:52:57,719 --> 00:53:01,239 Speaker 1: this is Amazon. I said this on Telivito earlier today. 950 00:53:01,320 --> 00:53:04,680 Speaker 1: Every conversation now seems to have Amazon, uh in it? 951 00:53:04,840 --> 00:53:08,880 Speaker 1: Are you long Amazon? From a strategic standpoint in the 952 00:53:08,880 --> 00:53:13,600 Speaker 1: Greenfield media world? Look, Amazon is someone everyone in so 953 00:53:13,680 --> 00:53:16,600 Speaker 1: many industries should be scared about. I think, you know, 954 00:53:16,719 --> 00:53:19,320 Speaker 1: the reality is they've spent a tremendous amount of money 955 00:53:19,360 --> 00:53:22,000 Speaker 1: in the media space already, both meet you know, video 956 00:53:22,160 --> 00:53:25,160 Speaker 1: and music. I think they're gonna be a major player 957 00:53:25,200 --> 00:53:27,040 Speaker 1: in music over the next few years. And I think 958 00:53:27,040 --> 00:53:29,920 Speaker 1: from a video standpoint, while their investment of four to 959 00:53:30,000 --> 00:53:33,120 Speaker 1: five billion dollars over the last year probably hasn't translated 960 00:53:33,120 --> 00:53:36,640 Speaker 1: into the critical and consumer kind of viewership success they 961 00:53:36,640 --> 00:53:40,120 Speaker 1: would have liked, I definitely would not count Amazon out. 962 00:53:40,440 --> 00:53:42,479 Speaker 1: I think they're gonna be a major player for video. 963 00:53:42,520 --> 00:53:44,200 Speaker 1: And I think the real thing, you know, if you're 964 00:53:44,200 --> 00:53:47,080 Speaker 1: if you're listening to this right now, the major thing 965 00:53:47,080 --> 00:53:49,360 Speaker 1: your listeners should be thinking about is what are the 966 00:53:49,400 --> 00:53:53,640 Speaker 1: odds at Amazon buys Monday night football rights? Because I 967 00:53:53,680 --> 00:53:56,000 Speaker 1: think that is the that that's what the real prize 968 00:53:56,000 --> 00:53:58,600 Speaker 1: that they're looking at is they're warming up with Thursday 969 00:53:58,640 --> 00:54:01,759 Speaker 1: night football simulcast. But I think Amazon has much much 970 00:54:01,800 --> 00:54:04,960 Speaker 1: bigger ambitions. And if you want to disrupt the media space, 971 00:54:05,360 --> 00:54:08,279 Speaker 1: the way to disrupt all of legacy media and TV 972 00:54:08,960 --> 00:54:12,200 Speaker 1: is to take sports away from legacy media and from TV, 973 00:54:12,480 --> 00:54:14,600 Speaker 1: and I think Amazon is preparing to do that. Brilliant 974 00:54:14,680 --> 00:54:17,040 Speaker 1: Rich Greenfield greatly appreciate the time he is with b 975 00:54:17,280 --> 00:54:30,200 Speaker 1: T I G. Thanks for listening to the Bloomberg Surveillance Podcast. 976 00:54:30,640 --> 00:54:35,880 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud or 977 00:54:35,960 --> 00:54:39,919 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 978 00:54:40,000 --> 00:54:44,360 Speaker 1: Keene David Gura. Is that David Gura? Before the podcast? 979 00:54:44,640 --> 00:54:48,040 Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio