1 00:00:00,080 --> 00:00:02,040 Speaker 1: P and L is brought to you by proper Cloth, 2 00:00:02,120 --> 00:00:05,120 Speaker 1: a leader in men's custom shirts, with proprietary smart sized 3 00:00:05,120 --> 00:00:08,720 Speaker 1: technology and top rated customer service. Ordering a custom shirt 4 00:00:08,760 --> 00:00:11,680 Speaker 1: has never been easier. Visit proper cloth dot com to 5 00:00:11,760 --> 00:00:19,920 Speaker 1: order your first custom shirt today. Welcome to the Bloomberg 6 00:00:20,000 --> 00:00:22,599 Speaker 1: P and L Podcast. I'm Pim Fox. Along with my 7 00:00:22,640 --> 00:00:25,759 Speaker 1: co host Lisa Abramowitz. Each day we bring you the 8 00:00:25,800 --> 00:00:29,360 Speaker 1: most important, noteworthy, and useful interviews for you and your money, 9 00:00:29,360 --> 00:00:32,360 Speaker 1: whether at the grocery store or the trading floor. Find 10 00:00:32,400 --> 00:00:35,840 Speaker 1: the Bloomberg P and L Podcast on iTunes, SoundCloud and 11 00:00:36,080 --> 00:00:44,000 Speaker 1: at Bloomberg dot com. It appears that China and the 12 00:00:44,120 --> 00:00:47,640 Speaker 1: US have moved one step away from the edge of 13 00:00:47,880 --> 00:00:52,800 Speaker 1: a potentially vitriolic trade war. But can they avoid it completely? 14 00:00:52,800 --> 00:00:55,320 Speaker 1: I want to bring in George Magnus, a Bloomberg View 15 00:00:55,320 --> 00:00:59,880 Speaker 1: contributor an associate at Oxford University's China Center. He's also 16 00:01:00,160 --> 00:01:05,440 Speaker 1: the former chief International Economist at U b S. George, 17 00:01:05,560 --> 00:01:07,600 Speaker 1: I want to get your take first. We know that 18 00:01:07,840 --> 00:01:13,039 Speaker 1: President Trump and President Jinping had a constructive conversation, or 19 00:01:13,040 --> 00:01:16,800 Speaker 1: that's how it was presented, and that President Trump reaffirmed 20 00:01:16,920 --> 00:01:21,920 Speaker 1: the US is take or assumption of a one China policy. 21 00:01:22,080 --> 00:01:25,600 Speaker 1: How important was this and how likely is it that 22 00:01:25,720 --> 00:01:29,280 Speaker 1: negotiations will continue in a constructive way towards some kind 23 00:01:29,319 --> 00:01:33,720 Speaker 1: of trade deal. Well, high, Lisa, I mean, I think 24 00:01:34,040 --> 00:01:36,640 Speaker 1: the first part of your question actually is easy. The 25 00:01:36,680 --> 00:01:40,560 Speaker 1: second part of actually is not so easy. Um. So, Um, 26 00:01:40,560 --> 00:01:43,039 Speaker 1: it's um. It's a shame that it should come to 27 00:01:44,000 --> 00:01:47,800 Speaker 1: situation that we have now where something that's been established 28 00:01:47,800 --> 00:01:52,000 Speaker 1: policy in international relations for the last forty years should 29 00:01:52,000 --> 00:01:55,440 Speaker 1: certainly be regarded as you know, the United States making 30 00:01:55,440 --> 00:01:58,520 Speaker 1: a concession to China over the One China policy because 31 00:01:58,520 --> 00:02:02,680 Speaker 1: it has been obviously part of the policy structure for 32 00:02:02,680 --> 00:02:06,200 Speaker 1: for an awfully long time. Um. And I think you know, 33 00:02:06,280 --> 00:02:09,359 Speaker 1: by general agreement, Actually I thought the I think that 34 00:02:09,800 --> 00:02:13,480 Speaker 1: people thought that when when the president we have to 35 00:02:13,520 --> 00:02:18,120 Speaker 1: refer which president President Trump highlighted or emphasized, you know, 36 00:02:18,720 --> 00:02:21,959 Speaker 1: that the One China policy might be in play as 37 00:02:22,000 --> 00:02:24,600 Speaker 1: a as a tool or as a piece of leverage 38 00:02:24,680 --> 00:02:29,400 Speaker 1: in trade negotiations. I mean, I think the general opinion 39 00:02:29,400 --> 00:02:32,320 Speaker 1: about that was whoa, you know, this is actually something 40 00:02:32,360 --> 00:02:34,519 Speaker 1: which is this is a red line for China, And 41 00:02:34,560 --> 00:02:36,519 Speaker 1: there was no there would be no conference room in 42 00:02:36,560 --> 00:02:40,640 Speaker 1: the world where China's delegation would stay if that issue 43 00:02:40,760 --> 00:02:44,200 Speaker 1: was ever brought up in discussion. So in a way, 44 00:02:44,360 --> 00:02:47,840 Speaker 1: we should I guess we should be you know, acknowledged 45 00:02:47,840 --> 00:02:51,880 Speaker 1: that this kind of lowers the temperature, because if there 46 00:02:51,919 --> 00:02:55,320 Speaker 1: was anything that was guaranteed to get fij Ping and 47 00:02:55,360 --> 00:02:59,520 Speaker 1: the Chinese leadership, you know, banging their drums at home, 48 00:02:59,560 --> 00:03:02,320 Speaker 1: it would be what they would have seen as a 49 00:03:02,360 --> 00:03:06,360 Speaker 1: provocation by the United States over over Taiwan. So that's good. 50 00:03:06,880 --> 00:03:11,560 Speaker 1: Does it actually portend good relations and you know, satisfactory 51 00:03:11,560 --> 00:03:15,760 Speaker 1: outcome to trade negotiations? I don't know. I don't think 52 00:03:16,000 --> 00:03:20,640 Speaker 1: it would all necessarily because I think that the United 53 00:03:20,680 --> 00:03:24,520 Speaker 1: States probably has a pretty you know, long and detailed 54 00:03:24,560 --> 00:03:27,840 Speaker 1: shopping list about what the kind of concessions that it 55 00:03:27,880 --> 00:03:30,120 Speaker 1: wants the Chinese to make. I'm not sure they're ready 56 00:03:30,160 --> 00:03:35,960 Speaker 1: to make those concessions, to be honest. George Magnus, You well, 57 00:03:36,040 --> 00:03:37,440 Speaker 1: I just want you to tell people what is a 58 00:03:37,520 --> 00:03:43,000 Speaker 1: Minsky moment and when is the next one? Yeah, Well, 59 00:03:43,120 --> 00:03:46,800 Speaker 1: Minsky momentum. So we talked or some of us talked 60 00:03:46,840 --> 00:03:49,680 Speaker 1: a little bit about one in two thousand and six, 61 00:03:49,920 --> 00:03:53,480 Speaker 1: two thousand and seven, and really the Minsky moment is 62 00:03:53,560 --> 00:03:57,760 Speaker 1: kind of it's a it's a kind of a colloquial expression. 63 00:03:57,800 --> 00:04:00,320 Speaker 1: I don't think the economists the American economy time and 64 00:04:00,360 --> 00:04:05,160 Speaker 1: Minsky ever used it himself about himself, but he basically 65 00:04:05,200 --> 00:04:09,280 Speaker 1: taught us in the eighties or you know, spoken wrote 66 00:04:09,360 --> 00:04:13,000 Speaker 1: in thees about what happens when leverage in the financial 67 00:04:13,080 --> 00:04:18,599 Speaker 1: system builds up to such an extent that the you know, 68 00:04:18,640 --> 00:04:22,560 Speaker 1: the capitalist system itself becomes inherently unstable and it just 69 00:04:22,680 --> 00:04:25,680 Speaker 1: needs kind of a catalyst like falling asset prices or 70 00:04:25,920 --> 00:04:28,800 Speaker 1: house prices was the particular case in point in two 71 00:04:28,839 --> 00:04:33,040 Speaker 1: thousand and seven, and the whole edifice of credit comes 72 00:04:33,040 --> 00:04:37,080 Speaker 1: crashing down, as we saw. So the Minsky moment really 73 00:04:37,200 --> 00:04:40,919 Speaker 1: is the point at which the system of leverage in 74 00:04:41,200 --> 00:04:47,040 Speaker 1: finance becomes so dangerous that it's prone to collapse when 75 00:04:47,680 --> 00:04:50,360 Speaker 1: the collateral, which could be commodity is it could be 76 00:04:50,560 --> 00:04:53,640 Speaker 1: you know, house prices or whatever it's it's when when 77 00:04:53,680 --> 00:04:56,920 Speaker 1: that happens. And so we saw that in in full display, 78 00:04:56,960 --> 00:04:59,880 Speaker 1: of course, in in the financial crisis of two thou 79 00:05:00,000 --> 00:05:02,280 Speaker 1: an eighth. Well, so then the logical question is, I mean, 80 00:05:02,360 --> 00:05:06,200 Speaker 1: China obviously has boosted its leverage tremendously and apparently in 81 00:05:06,279 --> 00:05:08,760 Speaker 1: an accelerating clip. At what point does it reach its 82 00:05:08,839 --> 00:05:12,920 Speaker 1: Minsky moment? You have asked the sixty four million dollar question, 83 00:05:13,000 --> 00:05:16,480 Speaker 1: which deserves an honest answer. I'm not sure. Well, I'll 84 00:05:16,480 --> 00:05:18,200 Speaker 1: give you an honest answer. I'm not sure whether how 85 00:05:18,240 --> 00:05:21,520 Speaker 1: accurate it is, But anyway, my my feeling is that 86 00:05:22,080 --> 00:05:26,120 Speaker 1: although a lot of people kind of save quite loosely 87 00:05:26,200 --> 00:05:30,680 Speaker 1: and correctly, my view that China cannot carry on accumulating 88 00:05:30,800 --> 00:05:35,040 Speaker 1: debt the way it is um It's very important, I think, 89 00:05:35,080 --> 00:05:38,440 Speaker 1: to distinguish between what's happening to the loans to the 90 00:05:38,520 --> 00:05:42,840 Speaker 1: assets of the banking system and the liabilities which fund 91 00:05:43,160 --> 00:05:48,080 Speaker 1: those assets. So, because China has a state owned banking system, 92 00:05:48,120 --> 00:05:51,359 Speaker 1: it's very unlikely in my view, that they will have 93 00:05:51,400 --> 00:05:54,440 Speaker 1: a Lehman's moment, a Lehman Brothers moment where a major 94 00:05:54,480 --> 00:05:56,920 Speaker 1: bank will go bust. Major banks will not be allowed 95 00:05:56,960 --> 00:06:00,839 Speaker 1: to go bust. So in a way, because of state 96 00:06:00,880 --> 00:06:04,560 Speaker 1: ownership for the banking system and because of the regulatory environment, 97 00:06:05,600 --> 00:06:08,760 Speaker 1: the Chinese authorities can can do what we used to 98 00:06:08,760 --> 00:06:12,479 Speaker 1: call extend and pretend they can. They can basically push 99 00:06:12,520 --> 00:06:15,640 Speaker 1: out the moment at which bad loans have to be 100 00:06:15,680 --> 00:06:19,080 Speaker 1: accounted for and paid for for a considerable period of time. 101 00:06:19,800 --> 00:06:24,280 Speaker 1: What they can't do is really improve the funding of 102 00:06:24,320 --> 00:06:27,279 Speaker 1: the loans. So one of the things that for example, 103 00:06:27,480 --> 00:06:30,839 Speaker 1: even the International Monetary Fund brought out in one of 104 00:06:30,880 --> 00:06:35,720 Speaker 1: its financial stability reports last year was how the funding 105 00:06:36,000 --> 00:06:40,600 Speaker 1: of loans in China has increased by about a factor 106 00:06:40,680 --> 00:06:43,600 Speaker 1: of six over the last five or six years, and 107 00:06:43,600 --> 00:06:46,480 Speaker 1: this makes the system really unstable. We've got to leave 108 00:06:46,480 --> 00:06:49,480 Speaker 1: it there. George Magnus, thank you very much, Associate Oxford 109 00:06:49,560 --> 00:07:06,000 Speaker 1: University's China Center. It was an opinion that rocked the world. 110 00:07:06,040 --> 00:07:08,120 Speaker 1: A lot of people were waiting to see what a 111 00:07:08,200 --> 00:07:12,440 Speaker 1: federal court would say. A federal appeals court in response 112 00:07:12,520 --> 00:07:15,600 Speaker 1: to President Trump's travel band what they said was they 113 00:07:15,720 --> 00:07:21,520 Speaker 1: unanimously refused to reinstate it. President Trump has responded with 114 00:07:21,600 --> 00:07:24,560 Speaker 1: a tweet, all caps see you in court. To get 115 00:07:24,600 --> 00:07:27,680 Speaker 1: a sense of what the main implications of this ruling are, 116 00:07:27,720 --> 00:07:29,720 Speaker 1: I want to bring in June Grasso, who is a 117 00:07:29,840 --> 00:07:33,440 Speaker 1: legal expert and host of Bloomberg Law on Bloomberg Radio, 118 00:07:33,480 --> 00:07:36,520 Speaker 1: which airs weekdays at four thirty pm Eastern. She is 119 00:07:36,560 --> 00:07:39,920 Speaker 1: here with us in our studio eleven thirty Studio. So, June, 120 00:07:39,960 --> 00:07:43,320 Speaker 1: what is your biggest takeaway from this ruling? This was 121 00:07:43,400 --> 00:07:47,680 Speaker 1: sort of a showdown over the president's power and the 122 00:07:47,760 --> 00:07:51,120 Speaker 1: judiciary's power and the independence of the judiciary. I mean, 123 00:07:51,160 --> 00:07:53,800 Speaker 1: we know that President Trump has been saying over and 124 00:07:53,880 --> 00:07:56,760 Speaker 1: over again that I am the final word when it 125 00:07:56,800 --> 00:07:59,320 Speaker 1: comes to immigration, on the final word when it comes 126 00:07:59,320 --> 00:08:02,720 Speaker 1: to national curity. And they brought that to the court. 127 00:08:02,800 --> 00:08:05,640 Speaker 1: They said, you can't even review this, and the Court said, oh, 128 00:08:05,760 --> 00:08:08,680 Speaker 1: yes we can, and oh yes we did, and they 129 00:08:08,680 --> 00:08:12,720 Speaker 1: said it's beyond question that the federal judiciary has the 130 00:08:12,760 --> 00:08:17,160 Speaker 1: authority to adjudicate constitutional challenges. And something they did that's 131 00:08:17,600 --> 00:08:22,040 Speaker 1: perhaps subtle and um, it was sort of like a 132 00:08:22,120 --> 00:08:25,040 Speaker 1: note to Justice Kennedy because what they he's you might 133 00:08:25,040 --> 00:08:26,760 Speaker 1: be the swing vote if this ever goes to the 134 00:08:26,760 --> 00:08:30,280 Speaker 1: Supreme Court. And what they did was they quoted and 135 00:08:30,320 --> 00:08:34,800 Speaker 1: they cited one of his decisions which said that that 136 00:08:34,960 --> 00:08:38,720 Speaker 1: the judiciary has the right to review these kinds of 137 00:08:38,760 --> 00:08:41,600 Speaker 1: presidential orders. So when Trump said we'll see you in court, 138 00:08:41,600 --> 00:08:43,400 Speaker 1: though I didn't get that, he's been in court and 139 00:08:43,440 --> 00:08:45,920 Speaker 1: we'll be in court probably for the rest of his presidence. 140 00:08:46,320 --> 00:08:50,240 Speaker 1: Can you dig into the actual ruling, the actual decision, 141 00:08:50,760 --> 00:08:55,760 Speaker 1: and uh, tell us about what these judges said, specifically 142 00:08:55,840 --> 00:09:01,520 Speaker 1: about exactly your point, which is their power over exact power? Well, 143 00:09:01,520 --> 00:09:04,880 Speaker 1: they said that, of course the president has power in 144 00:09:04,920 --> 00:09:08,439 Speaker 1: that area. It's just that we can review that when 145 00:09:08,440 --> 00:09:12,320 Speaker 1: there are constitutional concerns at stake. In other words, his 146 00:09:12,400 --> 00:09:16,080 Speaker 1: power is not absolute. This is the United States of America, 147 00:09:16,160 --> 00:09:18,920 Speaker 1: though they didn't put it that way, and the courts 148 00:09:19,080 --> 00:09:22,360 Speaker 1: are the ones that interpret the law. So in this case. 149 00:09:22,720 --> 00:09:26,400 Speaker 1: He also they made certain allegations, they said, this is 150 00:09:26,440 --> 00:09:30,040 Speaker 1: of the utmost it's national security interests, but they never 151 00:09:30,120 --> 00:09:33,360 Speaker 1: gave any evidence to the court of that. In fact, 152 00:09:33,480 --> 00:09:38,079 Speaker 1: at the hearing, the Justice Department lawyer was said, I'm 153 00:09:38,120 --> 00:09:40,840 Speaker 1: sort of I think I'm not convincing the court of this. 154 00:09:41,000 --> 00:09:44,559 Speaker 1: And this has come about so fast, and one of 155 00:09:44,640 --> 00:09:48,520 Speaker 1: the judges, the one appointed by Barack Obama, said to him, well, 156 00:09:48,800 --> 00:09:50,959 Speaker 1: why are you here at this point? Then maybe you 157 00:09:51,000 --> 00:09:53,680 Speaker 1: should be waiting and get your act together, basically is 158 00:09:53,720 --> 00:09:56,320 Speaker 1: what she was saying, because they were not prepared for 159 00:09:56,360 --> 00:09:58,680 Speaker 1: this where the states had all the evidence of the 160 00:09:58,720 --> 00:10:03,320 Speaker 1: irreparable harm to to their citizens and the companies in 161 00:10:03,400 --> 00:10:07,440 Speaker 1: their states. So basically the court was it was, and 162 00:10:07,520 --> 00:10:09,920 Speaker 1: also you know it was it was unanimous, and it 163 00:10:10,000 --> 00:10:13,560 Speaker 1: was a procurium opinion, which means that no judge signed 164 00:10:13,600 --> 00:10:16,240 Speaker 1: it as having written it, so no judge could be 165 00:10:16,280 --> 00:10:19,640 Speaker 1: attacked as having said, oh, this was written by the 166 00:10:19,679 --> 00:10:23,680 Speaker 1: liberal Obama pointee or the liberal Jimmy Carter appointee. It 167 00:10:23,800 --> 00:10:27,360 Speaker 1: was written by we don't know who, but all three 168 00:10:27,440 --> 00:10:31,040 Speaker 1: joined in it. What should uh, you know, one of 169 00:10:31,080 --> 00:10:35,000 Speaker 1: the what should executives people who are running companies take 170 00:10:35,040 --> 00:10:38,320 Speaker 1: away from this court decision because they have to operate 171 00:10:38,400 --> 00:10:43,000 Speaker 1: in an environment over which they do not have control? Well, 172 00:10:43,320 --> 00:10:48,160 Speaker 1: this court decision only now it goes back to the 173 00:10:48,400 --> 00:10:51,480 Speaker 1: federal judge, and there are decisions all around the country. 174 00:10:51,520 --> 00:10:54,720 Speaker 1: In fact, there's another there's a court hearing in Virginia today. 175 00:10:54,760 --> 00:10:58,240 Speaker 1: So I mean, is it a definitive answer to what 176 00:10:58,280 --> 00:11:01,040 Speaker 1: I mean? It's part of a larger strategy? In other words, 177 00:11:01,040 --> 00:11:03,960 Speaker 1: what for example, Neil Gorsuch is before the Senate. So 178 00:11:04,040 --> 00:11:06,839 Speaker 1: there's there's got to be a strategy, you know, and 179 00:11:06,840 --> 00:11:10,040 Speaker 1: and you know, anyone who's ever read the President's book 180 00:11:10,080 --> 00:11:11,720 Speaker 1: The Art of the Deal, you know you come away 181 00:11:11,920 --> 00:11:14,520 Speaker 1: there's a strategy, and you know, you test all points. 182 00:11:14,920 --> 00:11:17,160 Speaker 1: So I'm wondering if in your mind you see this 183 00:11:17,200 --> 00:11:19,960 Speaker 1: as part of a larger strategy. Well, I think that 184 00:11:20,000 --> 00:11:24,240 Speaker 1: this particular order was done hastily. As we've heard about. 185 00:11:24,679 --> 00:11:28,960 Speaker 1: It wasn't written well. They if they take the judges, 186 00:11:29,679 --> 00:11:32,280 Speaker 1: you know, everyone who has been talking about this, and 187 00:11:32,320 --> 00:11:35,920 Speaker 1: also what the court actually said in in the hearing 188 00:11:36,200 --> 00:11:39,840 Speaker 1: when they wanted them to step back and why don't 189 00:11:39,880 --> 00:11:43,199 Speaker 1: you just you know, limit this order so that it's 190 00:11:43,280 --> 00:11:45,760 Speaker 1: all right? And they said, that's your job. They have 191 00:11:46,000 --> 00:11:48,720 Speaker 1: this was so hastily done, I can't believe that it 192 00:11:48,840 --> 00:11:51,680 Speaker 1: was part of a strategy. They may start to strategize now, 193 00:11:52,080 --> 00:11:54,240 Speaker 1: and they may start to strategize so that they take 194 00:11:54,320 --> 00:11:56,840 Speaker 1: the right case up to the Supreme Court. This is 195 00:11:56,840 --> 00:11:59,000 Speaker 1: not the case that they should put before the Supreme Court, 196 00:11:59,360 --> 00:12:01,040 Speaker 1: but I don't think the Court would take this case 197 00:12:01,080 --> 00:12:04,480 Speaker 1: anyway because it's too soon. One thing that I find 198 00:12:04,520 --> 00:12:07,880 Speaker 1: interesting is the is the scuffle between Neil Gorcerge, the 199 00:12:07,960 --> 00:12:12,319 Speaker 1: Supreme Court nominee uh and President Trump, where evidently uh 200 00:12:12,920 --> 00:12:17,200 Speaker 1: Gorciche told senators that he was dismayed and disheartened by 201 00:12:17,360 --> 00:12:19,600 Speaker 1: some of the rhetoric that he's heard from the President, 202 00:12:19,840 --> 00:12:22,720 Speaker 1: with respect to the judiciary system. Do you think that 203 00:12:22,920 --> 00:12:26,959 Speaker 1: Gorsuch's response to Trump puts him in a better position 204 00:12:26,960 --> 00:12:29,040 Speaker 1: to get confirmed? First of all? And second of all, 205 00:12:29,520 --> 00:12:32,800 Speaker 1: does it sort of raise a question about whether President 206 00:12:32,840 --> 00:12:36,640 Speaker 1: Trump will reneg his nomination. First of all, it does 207 00:12:36,640 --> 00:12:38,680 Speaker 1: put him in a better position as far as the 208 00:12:38,679 --> 00:12:42,959 Speaker 1: public is concerned. But Democrats have said, and I thought 209 00:12:43,000 --> 00:12:45,719 Speaker 1: this as soon as this came out, These were in 210 00:12:45,960 --> 00:12:48,800 Speaker 1: there were in meetings, and he didn't say it out 211 00:12:48,880 --> 00:12:54,920 Speaker 1: loud to to the public. He was setting up view 212 00:12:54,960 --> 00:12:58,520 Speaker 1: of himself as being independent, knowing that those questions are 213 00:12:58,559 --> 00:13:01,200 Speaker 1: going to come for him and he gets to his 214 00:13:01,280 --> 00:13:05,560 Speaker 1: confirmation hearings. And Democrats have said that it was even 215 00:13:05,760 --> 00:13:08,960 Speaker 1: possibly a suggestion from the White House that this that 216 00:13:09,080 --> 00:13:12,760 Speaker 1: this happened, because here he's setting himself up as I 217 00:13:12,800 --> 00:13:16,800 Speaker 1: am independent from the president. Uh. There are a lot 218 00:13:16,800 --> 00:13:19,520 Speaker 1: of articles on this, and in fact, someone a spokesman 219 00:13:19,559 --> 00:13:23,760 Speaker 1: from the Democratic National Committee came out and said this yesterday, 220 00:13:23,840 --> 00:13:26,120 Speaker 1: so was Chuck Schumer. Well, but then you've got President 221 00:13:26,160 --> 00:13:28,760 Speaker 1: Trump saying that his words were twisted, that that wasn't 222 00:13:28,800 --> 00:13:31,040 Speaker 1: really his meanings. So is this coming from someone other 223 00:13:31,080 --> 00:13:35,520 Speaker 1: than President Trump's Yes, they're they're saying that Trump wasn't 224 00:13:35,520 --> 00:13:38,120 Speaker 1: necessarily in on it, but there is a strategy here. 225 00:13:38,400 --> 00:13:41,520 Speaker 1: There's a strategy, and he has not said this out 226 00:13:41,920 --> 00:13:44,959 Speaker 1: loud to the public. Also, if you think about what 227 00:13:45,000 --> 00:13:49,320 Speaker 1: Trump tweeted his he had more criticism for the senator 228 00:13:49,400 --> 00:13:52,720 Speaker 1: from Connecticut and his past record, you know, where he 229 00:13:52,800 --> 00:13:56,040 Speaker 1: had hadn't told the truth about being in Vietnam. He 230 00:13:56,080 --> 00:13:58,280 Speaker 1: had more criticism of him than he really did about 231 00:13:58,280 --> 00:14:02,160 Speaker 1: what the judge said. He never said anything specifically bad 232 00:14:02,200 --> 00:14:06,800 Speaker 1: about Gorsa, So, you know, it's it's so it's so 233 00:14:07,080 --> 00:14:12,240 Speaker 1: typical of the way politicians and UH members who are 234 00:14:12,280 --> 00:14:14,840 Speaker 1: coming up, you know, judiciary people who are coming up 235 00:14:15,040 --> 00:14:17,960 Speaker 1: set up things before the hearings because they want to 236 00:14:18,000 --> 00:14:20,000 Speaker 1: have the people in the right frame of mind. Maybe 237 00:14:20,040 --> 00:14:24,440 Speaker 1: those Democrats who were thinking, well, we shouldn't really filibuster 238 00:14:24,560 --> 00:14:28,640 Speaker 1: this are saying, well, well, as judges, seems like he's independent, 239 00:14:28,680 --> 00:14:30,560 Speaker 1: and that's going to be huge. That's going to be 240 00:14:30,880 --> 00:14:33,680 Speaker 1: one of the biggest it might overtake everything else at 241 00:14:33,680 --> 00:14:38,520 Speaker 1: the hearing. So it's very smart, it's very political, and 242 00:14:38,720 --> 00:14:40,960 Speaker 1: a lot of people, I'm not the only one, A 243 00:14:41,000 --> 00:14:44,160 Speaker 1: lot of people are saying that it was a tactic. 244 00:14:44,480 --> 00:14:47,080 Speaker 1: Thank you very much. June Grass are are legal expert 245 00:14:47,120 --> 00:14:50,720 Speaker 1: and host of Bloomberg Law on Bloomberg Radio weekdays for 246 00:14:51,040 --> 00:15:04,000 Speaker 1: thirty Wall Street Time. P and L is brought to 247 00:15:04,040 --> 00:15:06,760 Speaker 1: you by proper Cloth, the leader in men's custom shirts. 248 00:15:06,960 --> 00:15:09,960 Speaker 1: At proper cloth dot com, ordering custom shirts has never 249 00:15:10,000 --> 00:15:13,240 Speaker 1: been easier. 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We talk a 256 00:15:44,040 --> 00:15:48,880 Speaker 1: lot about some potentially troubling issues on the horizon, potentially 257 00:15:48,920 --> 00:15:53,800 Speaker 1: the biggest sovereign default ever in history, potential slowdown in China, 258 00:15:54,080 --> 00:15:58,000 Speaker 1: and yet markets are unphased. Art Hogan, chief market strategist 259 00:15:58,000 --> 00:16:01,200 Speaker 1: at Wonderlick Capital Markets, is with us. Are you know? 260 00:16:01,240 --> 00:16:03,760 Speaker 1: We've talked with a number of strategists in the past 261 00:16:03,760 --> 00:16:06,400 Speaker 1: few weeks who are calling for some kind of correction 262 00:16:06,880 --> 00:16:10,120 Speaker 1: in US stocks given a lot of the uncertainties in 263 00:16:10,120 --> 00:16:13,240 Speaker 1: the backdrop, do you agree, No, it's interesting. It's it's 264 00:16:13,600 --> 00:16:15,600 Speaker 1: easy to call for a pull back when we've had 265 00:16:15,600 --> 00:16:18,360 Speaker 1: such a significant move in a short period of time. Right, So, 266 00:16:18,400 --> 00:16:20,920 Speaker 1: when you think about the quick nine percent move that 267 00:16:21,000 --> 00:16:23,600 Speaker 1: we had post election, that's moved intoto a bit of 268 00:16:23,600 --> 00:16:25,560 Speaker 1: a sideways move in the last six weeks, and then 269 00:16:25,600 --> 00:16:28,800 Speaker 1: except for and including the last couple of days, we've 270 00:16:28,840 --> 00:16:31,320 Speaker 1: been in a very tight range where we're breaking out 271 00:16:31,320 --> 00:16:33,440 Speaker 1: the new highs and now on the on the promise 272 00:16:33,480 --> 00:16:37,600 Speaker 1: of some information on tax reform and tax cuts, which 273 00:16:37,640 --> 00:16:41,640 Speaker 1: is part of the initial post election move higher, with 274 00:16:41,680 --> 00:16:44,840 Speaker 1: the backdrop of improving fundamentals. But I think that when 275 00:16:45,080 --> 00:16:47,080 Speaker 1: we come to the realization that a lot of this 276 00:16:47,200 --> 00:16:49,440 Speaker 1: takes time and there's going to be some bargaining, and 277 00:16:49,560 --> 00:16:54,120 Speaker 1: that most likely getting tax reform done will be this 278 00:16:54,200 --> 00:16:56,960 Speaker 1: year's business to be implemented for eighteen, we may well 279 00:16:56,960 --> 00:16:59,000 Speaker 1: have getten ahead of ourselves. Another good news here is 280 00:16:59,400 --> 00:17:01,280 Speaker 1: I think the fund medals have improved. The fourth quarter 281 00:17:01,280 --> 00:17:03,440 Speaker 1: earnings were certainly better than the third, and the and 282 00:17:03,720 --> 00:17:06,879 Speaker 1: UH and guidance has certainly been better. On balance for 283 00:17:07,320 --> 00:17:09,119 Speaker 1: the first quarter of next year and for the balance 284 00:17:09,119 --> 00:17:11,199 Speaker 1: of next year, so we're not going through that pattern 285 00:17:11,240 --> 00:17:15,080 Speaker 1: of lack of earnings and guidance coming down significantly. So 286 00:17:15,080 --> 00:17:18,400 Speaker 1: on a multiple basis, we're looking better. Economic data have improved, 287 00:17:18,440 --> 00:17:20,320 Speaker 1: and I think that's probably good. But I think part 288 00:17:20,320 --> 00:17:22,760 Speaker 1: of what's price into this market may take a while, 289 00:17:23,400 --> 00:17:26,879 Speaker 1: a good longer than is anticipated into our priced in 290 00:17:27,080 --> 00:17:29,600 Speaker 1: right now. So I can see where some caution probably 291 00:17:29,600 --> 00:17:31,800 Speaker 1: is a good idea. Well, I'm wondering if you could 292 00:17:31,840 --> 00:17:35,520 Speaker 1: explain the kind of balance that goes on between let's say, 293 00:17:35,560 --> 00:17:40,480 Speaker 1: a stock growing into its pe or maybe having investors 294 00:17:40,600 --> 00:17:43,600 Speaker 1: more willing to pay up for that same dollar of earnings. 295 00:17:44,000 --> 00:17:46,400 Speaker 1: Dependent's a great question. I think one of the things 296 00:17:46,440 --> 00:17:49,600 Speaker 1: that we, you know, it was always very difficult to ascertain, 297 00:17:49,720 --> 00:17:52,480 Speaker 1: is what the appropriate multiple is, especially in in a 298 00:17:52,960 --> 00:17:55,359 Speaker 1: in a world where we have you know, I mean, 299 00:17:55,359 --> 00:17:57,240 Speaker 1: it almost doesn't matter right now. I mean, you've got 300 00:17:57,240 --> 00:17:59,399 Speaker 1: the price earnings ratio of the SMP five hundred and 301 00:17:59,440 --> 00:18:01,919 Speaker 1: more than twenty one. But let's put all that and 302 00:18:01,960 --> 00:18:04,240 Speaker 1: put all that aside. It's what I'm looking for is 303 00:18:04,280 --> 00:18:06,200 Speaker 1: your you you know, you you take the pulse of 304 00:18:06,280 --> 00:18:08,760 Speaker 1: the of the street and of investors. What are they 305 00:18:08,760 --> 00:18:11,639 Speaker 1: coming back to you with, what are some of the parameters? Well, 306 00:18:11,680 --> 00:18:13,440 Speaker 1: I can tell you this. I think that the investors 307 00:18:13,480 --> 00:18:15,800 Speaker 1: want to know what's going to work in seventeen If 308 00:18:15,800 --> 00:18:18,399 Speaker 1: we get any of the three legs of the stool, 309 00:18:18,440 --> 00:18:19,840 Speaker 1: that might be pro growth, right, if we get any 310 00:18:19,880 --> 00:18:21,840 Speaker 1: kind of tax cuts, if we get any kind infrastructure spending, 311 00:18:21,840 --> 00:18:23,720 Speaker 1: if we get any d reg and I think that 312 00:18:24,119 --> 00:18:26,679 Speaker 1: all of those things probably come to fruition in some shape. 313 00:18:26,960 --> 00:18:28,919 Speaker 1: And I think the investors want to know what they 314 00:18:28,920 --> 00:18:30,960 Speaker 1: should be out of. You know, what is no longer 315 00:18:31,000 --> 00:18:33,560 Speaker 1: the appropriate give it? They tell us, Well, I can 316 00:18:33,560 --> 00:18:34,760 Speaker 1: say at them, I think you want to be out 317 00:18:34,760 --> 00:18:36,200 Speaker 1: of dividen darlings. I think we're gonna be in a 318 00:18:36,280 --> 00:18:39,080 Speaker 1: rising interestrate environment. Right, So you know that's pretty straightforward. 319 00:18:39,200 --> 00:18:41,600 Speaker 1: You know, that's the reads, it's the utilities, It's a 320 00:18:41,640 --> 00:18:43,560 Speaker 1: staple to a certain extent and to a lesser extent 321 00:18:43,600 --> 00:18:45,199 Speaker 1: the tel cups. I think you want to be in 322 00:18:45,320 --> 00:18:47,480 Speaker 1: financials than you know, with the full stuff. I think 323 00:18:47,520 --> 00:18:49,200 Speaker 1: that you know, they touch all three of those legs 324 00:18:49,200 --> 00:18:52,159 Speaker 1: of that stool. And I certainly think that the infrastructure 325 00:18:52,400 --> 00:18:55,400 Speaker 1: plays or the industrials are also going to be positive. 326 00:18:55,440 --> 00:18:57,600 Speaker 1: Now all of this you know is contingent on getting 327 00:18:57,600 --> 00:18:59,240 Speaker 1: some of that done in the town. I got that 328 00:18:59,280 --> 00:19:01,159 Speaker 1: it's three legs. It was stool. But you can't, you know, 329 00:19:01,200 --> 00:19:02,520 Speaker 1: you've got to You got at least have a plan 330 00:19:02,560 --> 00:19:05,119 Speaker 1: before you can build a stool. Absolutely do and I 331 00:19:05,119 --> 00:19:07,399 Speaker 1: think that that's but you also have to remember what 332 00:19:07,760 --> 00:19:10,159 Speaker 1: to avoid. Right, what's been the most popular trade of 333 00:19:10,160 --> 00:19:11,920 Speaker 1: the last three years, tim, And it's been that It's 334 00:19:11,920 --> 00:19:13,560 Speaker 1: been the pricer I guess, right, So I think that 335 00:19:14,000 --> 00:19:15,960 Speaker 1: needs to continue to on wine. You have to understand 336 00:19:16,000 --> 00:19:19,200 Speaker 1: what you hold and why you do so getting more specific, 337 00:19:19,280 --> 00:19:21,359 Speaker 1: all right, which which company is in specific do you 338 00:19:21,400 --> 00:19:25,240 Speaker 1: expect to underperform in the next six months? We companies 339 00:19:25,280 --> 00:19:27,640 Speaker 1: have specifics. I will certainly tell you that the entire 340 00:19:27,720 --> 00:19:30,440 Speaker 1: utility complex, which is still trading in a multiple that's 341 00:19:30,480 --> 00:19:33,919 Speaker 1: three multiple turns higher than its averages, is probably to 342 00:19:33,960 --> 00:19:36,000 Speaker 1: be avoided. Right. I think that if you look at 343 00:19:36,359 --> 00:19:39,600 Speaker 1: on balance, the real estate investment trust World, which has 344 00:19:39,600 --> 00:19:41,760 Speaker 1: gotten a great deal of sponsorship over the last three years, 345 00:19:41,760 --> 00:19:44,280 Speaker 1: at all the winest invader amount that should be avoided. 346 00:19:44,359 --> 00:19:46,840 Speaker 1: Unless you know you can see a bargain. If you 347 00:19:46,880 --> 00:19:49,440 Speaker 1: can buy something at S A V, you're probably still 348 00:19:49,480 --> 00:19:51,640 Speaker 1: in a good place there. Away from that, anything that's 349 00:19:51,640 --> 00:19:53,080 Speaker 1: closer to over cent of it's n a V is 350 00:19:53,119 --> 00:19:55,320 Speaker 1: overpriced right now. In the real world, I think in 351 00:19:55,400 --> 00:19:57,800 Speaker 1: staples the same thing is true. We have multiples there 352 00:19:57,800 --> 00:19:59,800 Speaker 1: that are three or four multiple turns higher. So when 353 00:19:59,800 --> 00:20:01,600 Speaker 1: you've pink there was a reason to buy David and 354 00:20:01,640 --> 00:20:03,800 Speaker 1: Darlings in a low registrate environment. If interest rates are 355 00:20:03,800 --> 00:20:05,679 Speaker 1: going up, and we believe they are this year, that's 356 00:20:05,680 --> 00:20:08,399 Speaker 1: that's another sector to avoid. What can you play. I 357 00:20:08,400 --> 00:20:11,200 Speaker 1: think financials across the board are going to do well. 358 00:20:11,240 --> 00:20:13,680 Speaker 1: They just got back through the two thousand and seven levels, 359 00:20:13,680 --> 00:20:15,600 Speaker 1: the only sector and the sp prefitor they had not 360 00:20:15,640 --> 00:20:17,560 Speaker 1: done that, and I think there's a lot of runway 361 00:20:17,600 --> 00:20:19,680 Speaker 1: in front of them. And when you think about the regulation, 362 00:20:19,720 --> 00:20:21,919 Speaker 1: that's one thing. Rising industrates is another. Right, you know, 363 00:20:21,960 --> 00:20:24,040 Speaker 1: I've got to say, uh, this is something a lot 364 00:20:24,080 --> 00:20:26,080 Speaker 1: of people have been talking about. The yield curve should 365 00:20:26,119 --> 00:20:29,080 Speaker 1: steep in, bond yields should rise, and yet you have 366 00:20:29,200 --> 00:20:31,679 Speaker 1: a number of prominent investors, not least of which is 367 00:20:31,680 --> 00:20:34,600 Speaker 1: Black Rocks Larry Fink coming out and saying the more 368 00:20:34,680 --> 00:20:38,880 Speaker 1: likely move for ten year treasury yields is down from here, uh, 369 00:20:39,040 --> 00:20:42,200 Speaker 1: potentially below two percent, and the sort of whole reflation 370 00:20:42,320 --> 00:20:45,320 Speaker 1: trade is really being questions. So how do you how 371 00:20:45,359 --> 00:20:47,600 Speaker 1: do you pair that with the idea of continuing to 372 00:20:47,600 --> 00:20:50,280 Speaker 1: buid on financials now? And I could completely understand. He 373 00:20:50,320 --> 00:20:52,760 Speaker 1: also said in the same interview that he thought there's 374 00:20:52,800 --> 00:20:54,359 Speaker 1: likely a chance that he goes to four percent, then 375 00:20:54,400 --> 00:20:56,440 Speaker 1: it he goes to two percent, he's leaning towards the 376 00:20:56,480 --> 00:20:59,320 Speaker 1: two percent first. I think it's that it's that it's 377 00:20:59,320 --> 00:21:01,959 Speaker 1: a framework of timing. Can you can we hit both right? 378 00:21:02,000 --> 00:21:04,040 Speaker 1: Can we go to two percent before we get to 379 00:21:04,040 --> 00:21:07,080 Speaker 1: four percent? Absolutely? But I think most likely you're going 380 00:21:07,119 --> 00:21:09,520 Speaker 1: to see interest rates higher, not lower, than they are 381 00:21:09,520 --> 00:21:11,160 Speaker 1: at the end of this year, and therefore you should 382 00:21:11,160 --> 00:21:15,720 Speaker 1: probably invest towards that end. Is that then, in technical terms, Aret, 383 00:21:15,720 --> 00:21:19,439 Speaker 1: that's called the alley oop, isn't it? Well? Certainly, I 384 00:21:19,480 --> 00:21:21,479 Speaker 1: mean if you think interest rates are going up, right, 385 00:21:21,800 --> 00:21:23,760 Speaker 1: you know, quite candidly, if you think interest rates at 386 00:21:23,800 --> 00:21:25,200 Speaker 1: the end of this year will be higher than where 387 00:21:25,240 --> 00:21:26,600 Speaker 1: they are now, or we're going to be at a 388 00:21:26,960 --> 00:21:28,879 Speaker 1: two and a half or two point four field and 389 00:21:28,960 --> 00:21:30,879 Speaker 1: a tager are going to be closer to three percent, 390 00:21:30,880 --> 00:21:32,480 Speaker 1: I think we're gonna be closer to three percent and 391 00:21:32,560 --> 00:21:35,760 Speaker 1: something north of that. Non bank financials as well as banks, 392 00:21:36,520 --> 00:21:38,399 Speaker 1: non bank financials as well as banks. I think the 393 00:21:38,520 --> 00:21:40,080 Speaker 1: you know, the entirety of the of the you know, 394 00:21:40,280 --> 00:21:42,480 Speaker 1: I think the UH. I think the regional banks would 395 00:21:42,520 --> 00:21:45,639 Speaker 1: still look very very attractive. I certainly think that the 396 00:21:45,760 --> 00:21:48,359 Speaker 1: UM the money center banks look attractive and and and 397 00:21:48,400 --> 00:21:50,960 Speaker 1: fairly and fairly valued here with a lot of runay 398 00:21:50,960 --> 00:21:52,439 Speaker 1: in front of them. And I certainly think that you know, 399 00:21:52,480 --> 00:21:55,280 Speaker 1: the you know what what I wouldn't do is necessarily 400 00:21:55,320 --> 00:21:57,720 Speaker 1: broaden that out to a basket of both domestic and 401 00:21:57,760 --> 00:21:59,640 Speaker 1: international banks, because we certainly have a lot of dead 402 00:21:59,640 --> 00:22:02,160 Speaker 1: issues and a lot of European banks haven't gone through 403 00:22:02,200 --> 00:22:05,320 Speaker 1: quite the rig. Interest you in any shares of Banca 404 00:22:05,640 --> 00:22:09,440 Speaker 1: Monte di Paski? I think that's a great question. But 405 00:22:09,480 --> 00:22:12,080 Speaker 1: you know you're gonna interest me in uh swamp land 406 00:22:12,119 --> 00:22:14,200 Speaker 1: of Florida before I might divelo on that real quick? 407 00:22:14,560 --> 00:22:18,159 Speaker 1: Are how concerned are you about Marine le Pen winning 408 00:22:18,760 --> 00:22:24,200 Speaker 1: the presidency in France and UH potentially royaling markets in Europe. Yeah, 409 00:22:24,240 --> 00:22:26,680 Speaker 1: that's gonna be the first of what might be several elections. 410 00:22:26,680 --> 00:22:29,040 Speaker 1: We're gonna have to keep a close eye. I certainly 411 00:22:29,119 --> 00:22:31,280 Speaker 1: think that trying to predict who's going to win an 412 00:22:31,320 --> 00:22:34,160 Speaker 1: election in the last twelve buts has been a fools game. 413 00:22:34,280 --> 00:22:37,240 Speaker 1: So I think that we should be concerned regardless of 414 00:22:37,240 --> 00:22:40,160 Speaker 1: what poles look like, and that the knock on effect 415 00:22:40,160 --> 00:22:43,600 Speaker 1: if you've lost um, Great Britain, if there's a if 416 00:22:43,600 --> 00:22:45,439 Speaker 1: there's a there's you know, we all thought there was 417 00:22:45,480 --> 00:22:47,639 Speaker 1: no chance there was gonna be a Brexit. You know 418 00:22:47,760 --> 00:22:50,080 Speaker 1: that if you if you want to come up with 419 00:22:50,160 --> 00:22:54,120 Speaker 1: a narrative that the Eurozone could unravel, throw France into 420 00:22:54,160 --> 00:22:55,880 Speaker 1: the mix, and I think you get on a slippery slope. 421 00:22:55,880 --> 00:22:57,160 Speaker 1: So it's gonna be something we're gonna pay a whole 422 00:22:57,160 --> 00:22:58,760 Speaker 1: lot more attention to than we are right now. You're 423 00:22:58,760 --> 00:23:01,480 Speaker 1: gonna be very busy and April and May May seven, 424 00:23:01,560 --> 00:23:04,560 Speaker 1: I believe, is that last vote for the French presidency. 425 00:23:04,640 --> 00:23:06,800 Speaker 1: Thanks very much, Art Hogan. He is the chief market 426 00:23:06,840 --> 00:23:23,480 Speaker 1: strategist at Wonderlock Markets. We do have a new head 427 00:23:23,600 --> 00:23:27,040 Speaker 1: of Human Health and Human Services, Tom Price, who was 428 00:23:27,160 --> 00:23:30,240 Speaker 1: confirmed to the position by Congress, and I want to 429 00:23:30,240 --> 00:23:34,080 Speaker 1: bring in Brian Rye, senior healthcare policy analyst for Bloomberg Intelligence, 430 00:23:34,359 --> 00:23:39,320 Speaker 1: to talk about what his initial steps might be to revoke, repeal, 431 00:23:39,520 --> 00:23:46,480 Speaker 1: amend Obamacare or the a c A measure. So first, Brian, 432 00:23:46,920 --> 00:23:49,960 Speaker 1: what is his take on how to change the current 433 00:23:50,640 --> 00:23:53,920 Speaker 1: Obamacare regime. Yeah, well, you know, I think from his standpoint. 434 00:23:53,960 --> 00:23:57,040 Speaker 1: You know, recall that Tom prices by training an orthopedic surgeon, 435 00:23:57,160 --> 00:23:59,840 Speaker 1: so he views a lot of the healthcare questions through 436 00:23:59,880 --> 00:24:01,800 Speaker 1: the ends of a doctor, and doctors really don't like 437 00:24:01,920 --> 00:24:03,959 Speaker 1: being told what to do by the federal government. They 438 00:24:03,960 --> 00:24:07,320 Speaker 1: don't like a lot of the orders um involving health 439 00:24:07,359 --> 00:24:09,520 Speaker 1: I t and trying to upgrade their systems and taking 440 00:24:09,520 --> 00:24:12,600 Speaker 1: time away from seeing dealing with patients. So I think 441 00:24:12,920 --> 00:24:15,119 Speaker 1: what he would like to do from his standpoint as 442 00:24:15,359 --> 00:24:18,560 Speaker 1: heading HHS has maybe slow down a roll back some 443 00:24:18,600 --> 00:24:21,440 Speaker 1: of the things that CMS under h h S under 444 00:24:21,480 --> 00:24:24,440 Speaker 1: President Obama I have been trying to do, in other words, 445 00:24:24,440 --> 00:24:27,359 Speaker 1: dictating a lot of across the board, a new ways 446 00:24:27,400 --> 00:24:31,240 Speaker 1: to pay for hip replacements, cardiac care, whatever. So he 447 00:24:31,320 --> 00:24:32,760 Speaker 1: may see him trying to do that, But I think 448 00:24:33,000 --> 00:24:34,919 Speaker 1: longer term he's going to be a very eager and 449 00:24:34,960 --> 00:24:39,080 Speaker 1: willing partner with Republican leaders in Congress as they try 450 00:24:39,160 --> 00:24:43,159 Speaker 1: and finally coalesced around some some strategy to both repeal 451 00:24:43,160 --> 00:24:46,320 Speaker 1: and replace key provisions of the A C. A. Brian, 452 00:24:46,520 --> 00:24:49,920 Speaker 1: is there any way for you to describe the pattern 453 00:24:49,960 --> 00:24:52,840 Speaker 1: of horse trading that might go on, because of course 454 00:24:52,920 --> 00:24:57,119 Speaker 1: you have an industry now that has multiple players. You 455 00:24:57,200 --> 00:25:01,400 Speaker 1: have just the death of these two big mergers for 456 00:25:01,600 --> 00:25:07,080 Speaker 1: Anthem and Signa, as well as the Humanity and so on, 457 00:25:07,359 --> 00:25:09,600 Speaker 1: so you know, you you end up with a with 458 00:25:09,680 --> 00:25:12,760 Speaker 1: a lot of players who you know not necessarily have 459 00:25:12,880 --> 00:25:16,119 Speaker 1: the same direct interest, but you know, the enemy of 460 00:25:16,160 --> 00:25:19,080 Speaker 1: my friend, that kind of thing. No, it's a good point, 461 00:25:19,119 --> 00:25:21,480 Speaker 1: and you know certainly he's not entering an easy, easy 462 00:25:21,520 --> 00:25:23,800 Speaker 1: position or an easy job at this time. And I 463 00:25:23,840 --> 00:25:26,040 Speaker 1: think part of that has been illustrated by how difficult 464 00:25:26,080 --> 00:25:29,080 Speaker 1: it's been for Republicans to coalesce around the strategy that 465 00:25:29,119 --> 00:25:32,480 Speaker 1: they campaigned on very vehemently for for five six years. 466 00:25:32,720 --> 00:25:36,080 Speaker 1: Um you know, uh in repealing and replacing the A C. A. 467 00:25:36,480 --> 00:25:38,160 Speaker 1: I think a lot of the things that Price would 468 00:25:38,160 --> 00:25:40,399 Speaker 1: want to push for is number one, no matter what 469 00:25:40,480 --> 00:25:43,600 Speaker 1: the replacement plan is, you have to have a stable exchange, 470 00:25:43,680 --> 00:25:47,480 Speaker 1: a stable environment for insurers. And that was one problem 471 00:25:47,560 --> 00:25:50,720 Speaker 1: legitimately under the A C. As you had united at 472 00:25:50,880 --> 00:25:53,440 Speaker 1: a humanity all pulling out because the risk pools are 473 00:25:53,440 --> 00:25:55,640 Speaker 1: so poor. So I think you would see him look 474 00:25:55,680 --> 00:25:59,520 Speaker 1: to push for something insure friendly, UH modifications, maybe let 475 00:25:59,600 --> 00:26:02,479 Speaker 1: them charge or increase the difference between what they can 476 00:26:02,520 --> 00:26:05,560 Speaker 1: charge their oldest sickest patients and their youngest healthiest patients 477 00:26:05,760 --> 00:26:07,640 Speaker 1: as a way to try and drive down those premiums 478 00:26:07,640 --> 00:26:10,520 Speaker 1: for the younger, healthier people that, unfortunately for the exchanges 479 00:26:10,520 --> 00:26:12,680 Speaker 1: have been staying out so far, but they need those 480 00:26:12,720 --> 00:26:14,640 Speaker 1: in there to improve the risk pool and make them 481 00:26:14,680 --> 00:26:18,800 Speaker 1: frankly just doable for the insurers. Brian Uh, I'm not 482 00:26:18,840 --> 00:26:22,600 Speaker 1: sure how much this is relevant to Tom Price's position, 483 00:26:22,760 --> 00:26:26,200 Speaker 1: but it seems like he comes in with potentially less 484 00:26:26,200 --> 00:26:30,320 Speaker 1: political capital than others have had in his position. His nomination, 485 00:26:30,600 --> 00:26:35,479 Speaker 1: his confirmation rather was highly contentious. Does this matter, you know? 486 00:26:35,920 --> 00:26:38,960 Speaker 1: Or nearly it might? I would argue that in this 487 00:26:39,000 --> 00:26:41,439 Speaker 1: current environment, I'm not sure it does, because he's certainly 488 00:26:41,440 --> 00:26:43,159 Speaker 1: not the only one. Now if he had been singled 489 00:26:43,160 --> 00:26:46,000 Speaker 1: out as someone and all the other nominees were, we're 490 00:26:46,000 --> 00:26:49,240 Speaker 1: sailing through. But as we've seen with the education confirmation 491 00:26:49,280 --> 00:26:52,679 Speaker 1: and the Attorney general, I mean, this is sort of 492 00:26:52,720 --> 00:26:55,040 Speaker 1: how things are going right now, So I don't think 493 00:26:55,359 --> 00:26:57,480 Speaker 1: that he's going to be singled out. And again he's 494 00:26:57,520 --> 00:27:01,320 Speaker 1: got Republicans leading both chamber, both the House and the 495 00:27:01,359 --> 00:27:03,800 Speaker 1: Senate and Congress. Uh, And so I think he's got 496 00:27:03,880 --> 00:27:07,600 Speaker 1: the full and unequivocal support frankly right now the people 497 00:27:07,600 --> 00:27:09,640 Speaker 1: who are leading those efforts. Well, and how much will 498 00:27:10,000 --> 00:27:12,840 Speaker 1: the changes to Obamacare be led by him versus how 499 00:27:12,920 --> 00:27:15,320 Speaker 1: much will they be led by members of Congress. Well, 500 00:27:15,359 --> 00:27:17,680 Speaker 1: you know that that's right right now. You know he's 501 00:27:17,720 --> 00:27:19,840 Speaker 1: he's changing his his cap because he had authored an 502 00:27:19,880 --> 00:27:22,680 Speaker 1: Obamacare replacement bill while a member of Congress a couple 503 00:27:22,720 --> 00:27:24,960 Speaker 1: of years ago. Um, he will be I'm sure be 504 00:27:25,000 --> 00:27:27,040 Speaker 1: you know, providing his input in those things. But no, 505 00:27:27,160 --> 00:27:29,679 Speaker 1: he's part of the executive branch now, and so his 506 00:27:29,800 --> 00:27:32,040 Speaker 1: role I think is going to be more turning inward 507 00:27:32,440 --> 00:27:35,800 Speaker 1: within HHS, within CMS, within the f d A, saying 508 00:27:35,840 --> 00:27:38,760 Speaker 1: what what can I direct the folks that I now, um, 509 00:27:38,760 --> 00:27:42,080 Speaker 1: you know control uh to do too, in the words 510 00:27:42,080 --> 00:27:45,040 Speaker 1: of Trump's own um executive order a month ago, to 511 00:27:45,200 --> 00:27:48,199 Speaker 1: ease the regulatory burdens um you know, imposed by the 512 00:27:48,240 --> 00:27:49,919 Speaker 1: A C. A. So I think I'll be looking to 513 00:27:49,960 --> 00:27:53,280 Speaker 1: see what things he can do from that standpoint, while Congress, 514 00:27:53,320 --> 00:27:55,480 Speaker 1: you know, goes through the process of deliberating what they're 515 00:27:55,480 --> 00:27:58,320 Speaker 1: going to do. But certainly once Congress does decide on that, 516 00:27:58,359 --> 00:28:00,080 Speaker 1: I think he will be again a very willing an 517 00:28:00,080 --> 00:28:02,359 Speaker 1: eager partner to help them implement that. I want to 518 00:28:02,359 --> 00:28:04,399 Speaker 1: squeeze as much as I can out of you, Brian. 519 00:28:04,680 --> 00:28:07,399 Speaker 1: Medical device makers tell us about them. We'll give you 520 00:28:07,440 --> 00:28:10,000 Speaker 1: about thirty seconds or so. Well, if you know device 521 00:28:10,040 --> 00:28:12,679 Speaker 1: makers right now, they have two main concerns UM with 522 00:28:12,720 --> 00:28:14,600 Speaker 1: the A C. A. First, they have a there's a 523 00:28:14,640 --> 00:28:17,520 Speaker 1: two point three percent exercise tax on all medical devices. 524 00:28:17,520 --> 00:28:20,159 Speaker 1: Now there's actually a moretorium on those tax on that 525 00:28:20,240 --> 00:28:23,359 Speaker 1: tax that ends at the end of seen. Uh, so 526 00:28:23,400 --> 00:28:25,480 Speaker 1: the clock is taking either as part of an Obamacare 527 00:28:25,520 --> 00:28:28,280 Speaker 1: repill effort or a standalone effort. There were going to 528 00:28:28,320 --> 00:28:31,960 Speaker 1: be pushing hard this year to UM to essentially either 529 00:28:32,000 --> 00:28:34,840 Speaker 1: extend that moretorium or repeal that tax outright. And the 530 00:28:34,920 --> 00:28:37,399 Speaker 1: second thing is the Medical Device User Feact has to 531 00:28:37,400 --> 00:28:40,080 Speaker 1: be reauthorized every five years, and guess what this is 532 00:28:40,080 --> 00:28:42,560 Speaker 1: a year that year that it has to be reauthorized. 533 00:28:42,560 --> 00:28:44,720 Speaker 1: So there's gonna be a must pass bill for both 534 00:28:44,720 --> 00:28:48,600 Speaker 1: devices and Drugs to reauthorize the FDA to extract user 535 00:28:48,640 --> 00:28:50,880 Speaker 1: fees from them. They'll be watching that closely as well. 536 00:28:51,240 --> 00:28:54,240 Speaker 1: You did it, well done. Thank you very much. Brian Wright, 537 00:28:54,760 --> 00:29:00,000 Speaker 1: senior healthcare policy analyst for Bloomberg Intelligence for its government's team, 538 00:29:00,000 --> 00:29:09,200 Speaker 1: based of course in Washington, d C. 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