1
00:00:03,600 --> 00:00:07,720
Speaker 1: This is Bloomberg Surveillance. We're in trouble with these super

2
00:00:07,800 --> 00:00:13,640
Speaker 1: low rates. We are causing financial instability, We're causing risk taking.

3
00:00:13,760 --> 00:00:16,959
Speaker 1: The world has a golden opportunity at the moment to

4
00:00:17,040 --> 00:00:22,040
Speaker 1: achieve what I call a deflationary rebalancing, calling a proper recession. Yes,

5
00:00:22,360 --> 00:00:26,240
Speaker 1: and remember not all profit recesstance proceed catch or recession.

6
00:00:26,360 --> 00:00:30,600
Speaker 1: Bloomberg Surveillance your link to the world of economics, finance,

7
00:00:30,640 --> 00:00:34,360
Speaker 1: and investment on Bloomberg Radio. Good winning everyone. Michael McKay

8
00:00:34,400 --> 00:00:37,720
Speaker 1: and Tim King tomorrow in Washington for Super Tuesday. Will

9
00:00:37,720 --> 00:00:44,800
Speaker 1: celebrate with Bloomberg FM Washington and Baltimore. Looking forward to

10
00:00:45,040 --> 00:00:48,120
Speaker 1: that Super Monday. In this hour, we'll look at the

11
00:00:48,159 --> 00:00:50,680
Speaker 1: super collapse of oil. We are thrilled to bring you

12
00:00:50,720 --> 00:00:56,120
Speaker 1: in moments Philip K. Burliger Jr. Who absolutely nailed the

13
00:00:56,240 --> 00:00:59,760
Speaker 1: collapse in oil norther way uh to to put that

14
00:00:59,840 --> 00:01:02,680
Speaker 1: in We will do that in a moment. Our four

15
00:01:02,800 --> 00:01:06,000
Speaker 1: X brief this morning brought you by Interactive Broker's winner

16
00:01:06,000 --> 00:01:08,240
Speaker 1: of FX Weeks two thousand and fifteen award for the

17
00:01:08,280 --> 00:01:12,200
Speaker 1: Best Retail for X trading platform. Visit ib at I

18
00:01:12,360 --> 00:01:15,640
Speaker 1: b k R dot com slash four x i b

19
00:01:16,560 --> 00:01:20,920
Speaker 1: k R dot Com slash four x stronger yet one

20
00:01:21,000 --> 00:01:25,040
Speaker 1: thirteen sixteen dollar stronger. Looking at the blended old line

21
00:01:25,040 --> 00:01:29,200
Speaker 1: trading index d X ye point two nine is elevated.

22
00:01:29,200 --> 00:01:31,680
Speaker 1: It's not a breakout. It's not like a record dollar strength,

23
00:01:31,800 --> 00:01:34,720
Speaker 1: but it left Sterling was one thirty nine back under

24
00:01:34,760 --> 00:01:38,200
Speaker 1: that weaker sixty seven. We'll leave it. The Brazilian real

25
00:01:38,760 --> 00:01:40,960
Speaker 1: was four point zero zero, a little stronger three point

26
00:01:41,080 --> 00:01:45,240
Speaker 1: nine seven, but backed up Thursday and Friday is well.

27
00:01:45,800 --> 00:01:48,520
Speaker 1: David Wilson here with an abbreviated equity look, which is

28
00:01:48,600 --> 00:01:51,840
Speaker 1: unfair because you could go for like an hour. Well,

29
00:01:51,920 --> 00:01:54,880
Speaker 1: there's always something to talk about. It's just a matter

30
00:01:54,920 --> 00:01:56,560
Speaker 1: of how much on a given day. We might as

31
00:01:56,600 --> 00:01:59,280
Speaker 1: well start with Burshire Hathaway. Of course, Barren Buffet's annual

32
00:01:59,360 --> 00:02:02,960
Speaker 1: letter out of the weekend to Berkshire's shareholders, and from

33
00:02:02,960 --> 00:02:05,800
Speaker 1: that we know fourth quarter earnings beat analysts average estmate

34
00:02:05,840 --> 00:02:09,240
Speaker 1: in the Bloomberg survey and Berkshire shares up one percent

35
00:02:09,440 --> 00:02:12,679
Speaker 1: in early trading value and Pharmaceuticals down five percent to

36
00:02:12,760 --> 00:02:16,840
Speaker 1: drug maker withdrew its financial forecast and will delay releasing

37
00:02:16,919 --> 00:02:20,200
Speaker 1: fourth quarter results now Valiant had planned to provide an

38
00:02:20,240 --> 00:02:24,040
Speaker 1: overview of last quarters performance today in chief executive Michael

39
00:02:24,040 --> 00:02:27,800
Speaker 1: Pearson returned from medical leave, though he stepped down as chairman.

40
00:02:28,320 --> 00:02:31,480
Speaker 1: Signat Jewelers up ten percent. The owner of the Cave

41
00:02:31,600 --> 00:02:36,400
Speaker 1: jewelers Jared and Zales chains report of preliminary fourth quarter

42
00:02:36,400 --> 00:02:39,680
Speaker 1: earnings that beat estimates, segment raises dividend eighteen percent, and

43
00:02:39,720 --> 00:02:43,000
Speaker 1: also lifted its cost cutting target. MetLife will be a

44
00:02:43,040 --> 00:02:45,920
Speaker 1: stock to watch. Not much change in early trading, the

45
00:02:46,000 --> 00:02:49,079
Speaker 1: ensure agreeing to sell its US retail advisor network to

46
00:02:49,160 --> 00:02:52,120
Speaker 1: Mass Mutual for three hundred million dollars. Also on the

47
00:02:52,160 --> 00:02:56,320
Speaker 1: deal fund, Federal Mobile up forty three. Billionaire investor Carl

48
00:02:56,320 --> 00:02:59,160
Speaker 1: Ikohn offered to buy the auto parts makers shares he

49
00:02:59,280 --> 00:03:01,680
Speaker 1: doesn't already he owned for about two d and thirteen

50
00:03:01,720 --> 00:03:05,280
Speaker 1: million dollars. Icon has eighty two percent of Federal Mogul,

51
00:03:05,280 --> 00:03:09,720
Speaker 1: which planned canceled a planned spinoff last month. Another deal,

52
00:03:09,760 --> 00:03:13,280
Speaker 1: Console Energy up eight percent. The call natural gas producer

53
00:03:13,320 --> 00:03:15,959
Speaker 1: agreed to sell a Virginia mine and other call reserves

54
00:03:16,280 --> 00:03:18,799
Speaker 1: for four hundred and twenty million dollars, and on top

55
00:03:18,840 --> 00:03:21,880
Speaker 1: of that, Console suspended its dividend, which had been reduced

56
00:03:21,960 --> 00:03:25,280
Speaker 1: last year by in our g Energy down seven percent,

57
00:03:25,400 --> 00:03:28,520
Speaker 1: the biggest US independent power producer cut his path by

58
00:03:28,520 --> 00:03:31,200
Speaker 1: about eighty percent, report it's fourth loss in the past

59
00:03:31,240 --> 00:03:34,800
Speaker 1: five quarters, and lumber liquidators down six percent. The flooring

60
00:03:34,840 --> 00:03:37,440
Speaker 1: cellar had a bigger drop in fourth quarter sales than

61
00:03:37,520 --> 00:03:40,640
Speaker 1: analysts expected. David, thank you so much. This is fun, folks.

62
00:03:40,640 --> 00:03:43,600
Speaker 1: We give Gary Shilling a lot of work because of

63
00:03:43,680 --> 00:03:47,640
Speaker 1: his truly decades call on low interest rates. The Gary

64
00:03:47,760 --> 00:03:53,040
Speaker 1: Shilling of oil is a guy named p K. He

65
00:03:53,160 --> 00:03:57,920
Speaker 1: was lonely Mike years ago writing about where oil was

66
00:03:58,000 --> 00:04:02,320
Speaker 1: migrating to Philver. Do you feel like you got the

67
00:04:02,440 --> 00:04:05,680
Speaker 1: call right? Or was a set of events that happened

68
00:04:05,680 --> 00:04:08,720
Speaker 1: so convoluted that you say, yeah, I got the call right,

69
00:04:08,760 --> 00:04:11,040
Speaker 1: But it wasn't for the reasons I thought, which is it?

70
00:04:12,160 --> 00:04:14,040
Speaker 1: Can I have half and half? Yeah? I like that.

71
00:04:14,120 --> 00:04:19,039
Speaker 1: Go it's uh well, let me let me start by saying,

72
00:04:19,600 --> 00:04:22,559
Speaker 1: and I just put something out today. I'm talking about

73
00:04:22,560 --> 00:04:25,679
Speaker 1: how mostly oil people are from Venus, and my editors

74
00:04:25,680 --> 00:04:27,960
Speaker 1: said the rest of us are from Earth. My draft

75
00:04:28,000 --> 00:04:32,880
Speaker 1: had said marsh but yeah, I started at this as

76
00:04:32,880 --> 00:04:36,440
Speaker 1: an economist, and I am an economist. Like showing Uh,

77
00:04:37,200 --> 00:04:39,359
Speaker 1: you know, I got to congratulate you on your interview

78
00:04:39,360 --> 00:04:41,680
Speaker 1: with Stan Fisher. He was my classmate a m I T.

79
00:04:42,800 --> 00:04:44,760
Speaker 1: And when I met him sixty years ago, he was

80
00:04:44,800 --> 00:04:48,040
Speaker 1: talking about the central banker and that M I T

81
00:04:48,320 --> 00:04:51,920
Speaker 1: education really set myself up and set how people I

82
00:04:52,040 --> 00:04:54,760
Speaker 1: can't blinder and others. And so you look at these

83
00:04:54,800 --> 00:04:58,480
Speaker 1: things from an economics point of view rather than from

84
00:04:58,520 --> 00:05:04,520
Speaker 1: the politics, and the uh all the OPEC thinking if

85
00:05:04,560 --> 00:05:07,560
Speaker 1: you look back, you look at all the other commodity agreements,

86
00:05:07,640 --> 00:05:11,680
Speaker 1: and none of us succeeded permanently. And he just kept

87
00:05:11,680 --> 00:05:14,000
Speaker 1: looking through it, and he wondered when the Saudis were

88
00:05:14,000 --> 00:05:17,200
Speaker 1: going to come to the conclusion is that they were

89
00:05:17,240 --> 00:05:21,760
Speaker 1: being asked to sacrifice their income to sustain higher oil prices,

90
00:05:21,760 --> 00:05:25,000
Speaker 1: and when would they back out? And I think about them.

91
00:05:25,160 --> 00:05:29,520
Speaker 1: Early in two thousand and uh fourteen, I started seeing

92
00:05:29,560 --> 00:05:31,120
Speaker 1: this and I started looking at the way they were

93
00:05:31,120 --> 00:05:34,600
Speaker 1: pricing and I said, we're going down. And to be fair, Uh.

94
00:05:34,880 --> 00:05:38,120
Speaker 1: Ed Morrison, an old friend saw it as well. So

95
00:05:38,240 --> 00:05:42,520
Speaker 1: I mean it was it was obvious, but I mean

96
00:05:42,560 --> 00:05:44,480
Speaker 1: the person who really saw it was one of our

97
00:05:44,480 --> 00:05:46,760
Speaker 1: teachers in M I team, Morie Edelman, who tried to

98
00:05:47,000 --> 00:05:49,200
Speaker 1: die two years ago on it. I just I wrote

99
00:05:49,200 --> 00:05:54,240
Speaker 1: along article just uh was publishing the Energy Journal in December. Uh,

100
00:05:54,320 --> 00:05:57,440
Speaker 1: they're talking about Atoman moments. I mean he described what happened.

101
00:05:57,800 --> 00:06:01,039
Speaker 1: We didn't, you know, we let prices get high, just

102
00:06:01,320 --> 00:06:05,599
Speaker 1: like the central banks let banks lend too much on

103
00:06:05,640 --> 00:06:08,320
Speaker 1: housing with low interest rates and didn't there was no governance,

104
00:06:08,880 --> 00:06:12,640
Speaker 1: and the high prices of oil, uh, along with technicol

105
00:06:12,839 --> 00:06:17,800
Speaker 1: technological change and so on, just laid the foundation for

106
00:06:17,960 --> 00:06:22,160
Speaker 1: what is essentially repeating the housing cycle. It's not the

107
00:06:22,200 --> 00:06:25,200
Speaker 1: Goldman facts. People think it won't be as bad, but

108
00:06:26,120 --> 00:06:29,440
Speaker 1: the hyper too uh too long a period of low

109
00:06:29,480 --> 00:06:33,080
Speaker 1: interest rates, uh, sub prime mortgages and so on led

110
00:06:33,120 --> 00:06:37,160
Speaker 1: to a huge housing bubble and we're still only at

111
00:06:37,640 --> 00:06:40,200
Speaker 1: of the level of housing starts we were before. The

112
00:06:40,320 --> 00:06:42,400
Speaker 1: same thing is gonna happen to energy, and it's gonna

113
00:06:42,440 --> 00:06:45,360
Speaker 1: take five or seven or eight years to work work

114
00:06:45,440 --> 00:06:48,080
Speaker 1: through it. And it's just it had, you know this,

115
00:06:49,160 --> 00:06:51,440
Speaker 1: the momentums there, and it's very hard to stop. And

116
00:06:51,960 --> 00:06:53,880
Speaker 1: you know that's why I say half and half. I

117
00:06:53,880 --> 00:07:00,040
Speaker 1: mean it's I should have seen it earlier. You're a

118
00:07:00,040 --> 00:07:03,679
Speaker 1: piece you put out today The Energy industry from Mars

119
00:07:03,680 --> 00:07:06,279
Speaker 1: and the rest of makes a lot of comparisons to

120
00:07:06,360 --> 00:07:09,479
Speaker 1: Lehman brothers. Where are you going with that? Well, I've

121
00:07:09,520 --> 00:07:12,680
Speaker 1: been asked to do a paper uh by the G

122
00:07:12,880 --> 00:07:18,679
Speaker 1: thirty uh and and I'm essentially pushing ahead. And I

123
00:07:18,720 --> 00:07:24,680
Speaker 1: think that the uh, there are many parallels between what

124
00:07:24,800 --> 00:07:29,560
Speaker 1: happened in housing and what happened to the whole economy

125
00:07:29,640 --> 00:07:33,400
Speaker 1: between say two thousand and two thousand and nine. Now

126
00:07:33,400 --> 00:07:38,320
Speaker 1: they're not perfect. Uh. The housing was four trillion dollar debt.

127
00:07:39,160 --> 00:07:43,000
Speaker 1: There was the failure by the rating agencies to properly

128
00:07:43,880 --> 00:07:49,960
Speaker 1: uh characterize these packages of mortgages and so and and

129
00:07:50,040 --> 00:07:52,960
Speaker 1: nobody really dreamed that so many houses would go into

130
00:07:53,000 --> 00:07:55,480
Speaker 1: foreclosure at the same time and loans would be unperforming.

131
00:07:56,480 --> 00:07:58,760
Speaker 1: We only have a trillion and a half debt for

132
00:07:58,840 --> 00:08:03,320
Speaker 1: the energy, so that makes this smaller, uh the people.

133
00:08:03,800 --> 00:08:05,640
Speaker 1: You know, there's a question. We've always seen an oil

134
00:08:05,680 --> 00:08:08,200
Speaker 1: prices fault, We've never seen housing prices fall. You know,

135
00:08:08,240 --> 00:08:13,280
Speaker 1: I find that a little disingenuous because, uh, two years

136
00:08:13,280 --> 00:08:16,160
Speaker 1: ago people were saying a hundred dollars a barrel with

137
00:08:16,200 --> 00:08:20,120
Speaker 1: the new thirty. So you know, I don't think that works.

138
00:08:20,760 --> 00:08:23,640
Speaker 1: But the question is how much more debt is they're

139
00:08:23,680 --> 00:08:27,800
Speaker 1: out there? And where does it lie? Uh? A lot

140
00:08:27,840 --> 00:08:29,840
Speaker 1: of it is in the hands of m uh m

141
00:08:30,000 --> 00:08:32,000
Speaker 1: L piece and a lot of stock of the mlpiece

142
00:08:32,559 --> 00:08:36,240
Speaker 1: because these the MLPs have signed contracts with firms to

143
00:08:36,320 --> 00:08:39,560
Speaker 1: deliver oil over long term periods of time, and these

144
00:08:39,720 --> 00:08:44,120
Speaker 1: these contracts are uh hard to break. But if a

145
00:08:44,160 --> 00:08:47,160
Speaker 1: firm goes into bankruptcy wrote out a cash flow, they're

146
00:08:47,160 --> 00:08:49,120
Speaker 1: not okay, We're just in the time we've got left,

147
00:08:49,120 --> 00:08:51,840
Speaker 1: and we'll have you on for a longer black in

148
00:08:51,880 --> 00:08:54,600
Speaker 1: the time we've got left. What is your timeline for

149
00:08:54,679 --> 00:08:58,440
Speaker 1: the rest of two thousand sixteen? Is the industry works out?

150
00:08:58,800 --> 00:09:01,719
Speaker 1: Do they wait for two thousands? I think they wait

151
00:09:01,880 --> 00:09:05,520
Speaker 1: for two thousand and eighteen. I don't think this thing

152
00:09:05,600 --> 00:09:10,520
Speaker 1: really turns around until two thousand and eighteen, two thousand nineteen,

153
00:09:10,520 --> 00:09:12,839
Speaker 1: and then we're not going back up to any price

154
00:09:12,960 --> 00:09:15,920
Speaker 1: levels anywhere near where we were. I think that there

155
00:09:15,960 --> 00:09:19,040
Speaker 1: are I think because this is much longer. It's just

156
00:09:19,120 --> 00:09:22,160
Speaker 1: like a housing crisis. It's gonna take It could take

157
00:09:22,200 --> 00:09:25,200
Speaker 1: to take five years to really turn this thing around.

158
00:09:27,040 --> 00:09:32,400
Speaker 1: What does that imply for the Excuntmy? Uh, that could

159
00:09:33,080 --> 00:09:36,000
Speaker 1: but the situation in the economy, of the situation in Europe,

160
00:09:36,000 --> 00:09:38,960
Speaker 1: the situation in China. Are are sets that that's not

161
00:09:39,040 --> 00:09:42,640
Speaker 1: good for for the energy sector. I mean, we're in

162
00:09:42,760 --> 00:09:46,360
Speaker 1: a bad cycle. Some of the planners would call it

163
00:09:46,400 --> 00:09:48,840
Speaker 1: a doom loop. It's not that bad, but I mean

164
00:09:49,720 --> 00:09:52,840
Speaker 1: we're looking. If you're sitting here looking at Venezuela, uh,

165
00:09:52,920 --> 00:09:55,360
Speaker 1: that country is gonna fail. And you know that were

166
00:09:55,400 --> 00:09:58,520
Speaker 1: probably oil prices for a while. But the failure of

167
00:09:58,559 --> 00:10:01,720
Speaker 1: a country of the population of Venezuela, it's just an

168
00:10:01,800 --> 00:10:05,760
Speaker 1: utter and complete collapse, like a collapse of Uganda, is stunning.

169
00:10:05,760 --> 00:10:10,080
Speaker 1: And people who really haven't gotten to the grab it yet. Still.

170
00:10:14,080 --> 00:10:15,400
Speaker 1: We gotta have him back, sup. We have to get

171
00:10:15,480 --> 00:10:18,640
Speaker 1: him back. Sup. Why you would you make a you know,

172
00:10:18,720 --> 00:10:21,320
Speaker 1: to have your people talk to night people. Do get

173
00:10:21,400 --> 00:10:24,959
Speaker 1: Mr Burlinger back soon, thank you, Phil furlger Um. You know,

174
00:10:25,040 --> 00:10:28,040
Speaker 1: just to get your attention is December essay, Big oil

175
00:10:28,760 --> 00:10:32,520
Speaker 1: Nightfall is coming. Sort of like this feels like game

176
00:10:32,600 --> 00:10:35,400
Speaker 1: six of season of Game of Thrones. Season six of

177
00:10:35,480 --> 00:10:37,840
Speaker 1: Game of Thrones. I'm not speaking. Do you notice I'm

178
00:10:37,880 --> 00:10:40,559
Speaker 1: not speaking clearly today? Yeah? I noticed that You're all excited.

179
00:10:40,640 --> 00:10:46,160
Speaker 1: I just too much breed too many short names, Yes, yes,

180
00:10:46,320 --> 00:10:53,280
Speaker 1: too much. Oscars futures up to Time Now to check

181
00:10:53,360 --> 00:10:55,000
Speaker 1: in with Blae bar I get the latest world and

182
00:10:55,120 --> 00:10:58,040
Speaker 1: national headlines. Michael by time, Thank you. Donald Trump is

183
00:10:58,080 --> 00:11:00,440
Speaker 1: clarifying comments he made over the week end when he

184
00:11:00,480 --> 00:11:03,120
Speaker 1: claimed to know nothing about former Ku Klux Klan leader

185
00:11:03,200 --> 00:11:08,120
Speaker 1: David Duke. Today, Trump tells NBC's Today that he could

186
00:11:08,200 --> 00:11:11,680
Speaker 1: not clearly hear the question posed by CNN because he

187
00:11:11,800 --> 00:11:14,160
Speaker 1: was given a very bad earpiece, and he says he's

188
00:11:14,160 --> 00:11:18,559
Speaker 1: announced Duke on Facebook and Twitter all weekend. Other candidates

189
00:11:18,559 --> 00:11:22,640
Speaker 1: have accused Trump of refusing to reject Duke's endorsement. Bernie

190
00:11:22,720 --> 00:11:25,559
Speaker 1: Sanders and Hillary Clinton are doing some last minute campaigning

191
00:11:25,559 --> 00:11:29,600
Speaker 1: before tomorrow's Super Tuesday primaries in southern states. Both Sanders

192
00:11:29,640 --> 00:11:34,240
Speaker 1: and Clinton will campaign in several states, also in Massachusetts Today.

193
00:11:34,520 --> 00:11:37,959
Speaker 1: Sanders will also be in Minnesota. Sanders has raised more

194
00:11:38,000 --> 00:11:41,679
Speaker 1: than thirty six million dollars in February. Spotlight one Best

195
00:11:41,720 --> 00:11:44,839
Speaker 1: picture at the OSCARS last night. Global News twenty four

196
00:11:44,840 --> 00:11:48,120
Speaker 1: hours a day, powered by our journalists more than a

197
00:11:48,160 --> 00:11:51,360
Speaker 1: hundred fifty bureaus from around the world. Michael barn Tom,

198
00:11:51,400 --> 00:11:53,040
Speaker 1: I'm not gonna Thanks so much. Green on the screen

199
00:11:53,040 --> 00:11:56,800
Speaker 1: on Oil thirty two ninety nine on West Texas Intermediate.

200
00:11:56,840 --> 00:12:00,240
Speaker 1: Don't Forget Tomorrow, Michael McKee and Tom Keenan Washing, Jim

201
00:12:00,720 --> 00:12:07,400
Speaker 1: Bloomberg Surveillance Market Driver is brought to you by Abrcedes

202
00:12:07,440 --> 00:12:09,760
Speaker 1: Benz Tri State Dealer. When it comes to winter elements,

203
00:12:09,760 --> 00:12:12,320
Speaker 1: put your best four wheels forward with Mercedes Benz Formatic

204
00:12:12,360 --> 00:12:14,520
Speaker 1: All Wheel Drive. Is it your Mercedes Benz Tri State

205
00:12:14,559 --> 00:12:24,040
Speaker 1: Dealer for a test drive today? Global Business News twenty

206
00:12:24,120 --> 00:12:27,079
Speaker 1: four hours a day at Bloomberg dot Com, the Radio

207
00:12:27,160 --> 00:12:29,959
Speaker 1: plus Mobile Act and on your radio. This is a

208
00:12:30,040 --> 00:12:33,960
Speaker 1: Bloomberg Business Flash and I'm Karen Moscow. This updates brought

209
00:12:34,000 --> 00:12:37,000
Speaker 1: to you by Interactive Brokers and CME Group. If you're

210
00:12:37,000 --> 00:12:39,920
Speaker 1: looking for a global futures contracts at low trading costs,

211
00:12:40,160 --> 00:12:43,480
Speaker 1: look no further. Interactive Brokers as the industry leader. Learn

212
00:12:43,520 --> 00:12:47,200
Speaker 1: more at Interactive Brokers dot com, slash, CME Group US

213
00:12:47,240 --> 00:12:49,920
Speaker 1: stocked Index Future is They're little changed following a second

214
00:12:49,920 --> 00:12:52,640
Speaker 1: weekly game for the SNP five hundred and this is

215
00:12:52,720 --> 00:12:56,440
Speaker 1: after our racing losses. As China's central banks stepped up

216
00:12:56,480 --> 00:12:59,320
Speaker 1: efforts to cush in the country's economic slowdown. We checked

217
00:12:59,320 --> 00:13:01,840
Speaker 1: the markets every fifteen minutes throughout the trading day on

218
00:13:01,880 --> 00:13:05,440
Speaker 1: Bloomberg SNB EVENI futures up two points now, Dow eveny

219
00:13:05,440 --> 00:13:08,400
Speaker 1: futures up ten and Nasadaki many futures that will change.

220
00:13:08,760 --> 00:13:11,640
Speaker 1: DAX in Germany's down seven tenths per cent ten, Your

221
00:13:11,679 --> 00:13:15,079
Speaker 1: treasury little change, yield one point seven six percent, nom X,

222
00:13:15,080 --> 00:13:17,280
Speaker 1: Screude oil up one point one percent or thirty four

223
00:13:17,360 --> 00:13:20,640
Speaker 1: cents to thirteen a barrel Fox gold up eight ten

224
00:13:20,800 --> 00:13:23,640
Speaker 1: percent or nine dollar sixty cents to twelve thirty. Announced

225
00:13:24,040 --> 00:13:26,560
Speaker 1: the euro at all oh e to the end one

226
00:13:26,679 --> 00:13:30,000
Speaker 1: thirteen point oh eight. That's a Bloomberg business flash, Tom

227
00:13:30,080 --> 00:13:32,840
Speaker 1: and Mike Karen, thanks so much. It is a nine

228
00:13:32,920 --> 00:13:35,240
Speaker 1: eighteen on Wall Street, which means we could go to

229
00:13:35,360 --> 00:13:38,400
Speaker 1: eleven twenty two this morning with a former chairman of

230
00:13:38,440 --> 00:13:41,240
Speaker 1: the SEC, Arthur Levitt. Arthur thought your note this morning

231
00:13:41,800 --> 00:13:45,520
Speaker 1: was brilliant and really affects so many people. Let's start

232
00:13:45,559 --> 00:13:48,959
Speaker 1: with the empty chairs at the SEC. Are you kidding me?

233
00:13:49,040 --> 00:13:53,880
Speaker 1: There's three commissioners and that includes a chairman. That's true,

234
00:13:54,440 --> 00:13:57,200
Speaker 1: and uh, there was a time when I was there

235
00:13:57,320 --> 00:14:01,040
Speaker 1: that we had only one commissioner plus the chairman, so

236
00:14:01,120 --> 00:14:03,600
Speaker 1: they they go down to Ben's Chili Dog on Youth

237
00:14:03,679 --> 00:14:06,800
Speaker 1: Street and they can take a youth You could really argue,

238
00:14:06,960 --> 00:14:10,760
Speaker 1: Tom that the Commission might operate even more effectively with

239
00:14:11,520 --> 00:14:17,040
Speaker 1: fewer commissioners, because the commissioners have become so politicized that

240
00:14:17,200 --> 00:14:21,280
Speaker 1: they spend more time debating issues than acting on issues.

241
00:14:21,360 --> 00:14:26,840
Speaker 1: So I don't think that's necessarily a crippling condition for them.

242
00:14:27,320 --> 00:14:30,160
Speaker 1: It depends who who's left and how good they are.

243
00:14:30,520 --> 00:14:34,320
Speaker 1: The SEC not the only agency that is shorthanded. Of course,

244
00:14:34,360 --> 00:14:38,040
Speaker 1: the Federal Reserve, at the center of everything right now,

245
00:14:38,280 --> 00:14:43,560
Speaker 1: is down to members and Uh the good Senator from Alabama,

246
00:14:44,400 --> 00:14:49,400
Speaker 1: Uh deciding who runs the Banking Committee, deciding he does

247
00:14:49,480 --> 00:14:53,000
Speaker 1: not want to hold hearings. I know he's in a

248
00:14:53,320 --> 00:14:58,880
Speaker 1: life and life or death primary that takes place tomorrow,

249
00:14:59,000 --> 00:15:04,320
Speaker 1: and he's focusing everything he can and he's being criticized

250
00:15:04,400 --> 00:15:10,800
Speaker 1: for being inadequately conservative by a man with a very

251
00:15:11,280 --> 00:15:15,480
Speaker 1: good war record. So he's in a tight primary and

252
00:15:15,560 --> 00:15:18,760
Speaker 1: he's not about to do anything that could disrupt that.

253
00:15:19,440 --> 00:15:22,200
Speaker 1: That's the amazing thing to be that the Federal Reserve

254
00:15:22,280 --> 00:15:26,240
Speaker 1: could be two members shorten and they have been nominated

255
00:15:26,360 --> 00:15:29,720
Speaker 1: for some months, and he basically said, I have a primary.

256
00:15:29,880 --> 00:15:34,080
Speaker 1: I don't want to give my opponent any um any weapons.

257
00:15:34,320 --> 00:15:36,960
Speaker 1: So um Senator Shelby says, I'm not going to do

258
00:15:37,120 --> 00:15:40,520
Speaker 1: my job. I'm going to block myself from doing my job.

259
00:15:40,840 --> 00:15:43,400
Speaker 1: And so I'm curious, when you were in that situation,

260
00:15:43,560 --> 00:15:45,920
Speaker 1: what do the legislators say to you. Do they say

261
00:15:45,960 --> 00:15:49,000
Speaker 1: are naked political ambition is going to keep your agency short?

262
00:15:49,280 --> 00:15:52,480
Speaker 1: Or do they make excuses it was a different reason

263
00:15:52,600 --> 00:15:55,760
Speaker 1: then they were really not thinking too much about the

264
00:15:56,000 --> 00:15:59,760
Speaker 1: SEC at that point. They had other issues in terms

265
00:15:59,840 --> 00:16:04,160
Speaker 1: of the economy, and frankly I wasn't pressing them. I

266
00:16:04,320 --> 00:16:09,040
Speaker 1: had one other commissioner happened to be a democratic commissioner.

267
00:16:09,160 --> 00:16:14,360
Speaker 1: So it was a totally democratic environment, uh, And I

268
00:16:14,600 --> 00:16:17,440
Speaker 1: was pleased to have it that way because we were

269
00:16:17,480 --> 00:16:20,640
Speaker 1: able to get through more things than we could have

270
00:16:21,440 --> 00:16:24,040
Speaker 1: had we had a full commission. Not that we were

271
00:16:24,120 --> 00:16:29,920
Speaker 1: divided politically or ideologically. We were divided only in terms

272
00:16:30,000 --> 00:16:33,560
Speaker 1: of philosophy. But we could act a lot faster with

273
00:16:34,120 --> 00:16:41,640
Speaker 1: one commissioner. Plus that no cheires very much at all,

274
00:16:43,800 --> 00:16:48,880
Speaker 1: little technical difficulties that if Arthur, are you still there

275
00:16:50,320 --> 00:16:52,880
Speaker 1: very much here? Okay, well we technically lost you for

276
00:16:53,000 --> 00:16:54,520
Speaker 1: what I just wanted to follow up quickly and ask

277
00:16:54,560 --> 00:16:58,520
Speaker 1: you what the legal implications having only two commissioners would be,

278
00:16:59,560 --> 00:17:03,560
Speaker 1: can you uh, you know? Regulation? That's very difficult because

279
00:17:03,680 --> 00:17:08,440
Speaker 1: what that opens you up to challenges and uh on

280
00:17:08,600 --> 00:17:13,480
Speaker 1: a really serious matter where the issue is divided and

281
00:17:14,480 --> 00:17:18,159
Speaker 1: perhaps complex, you don't want to act on that with

282
00:17:18,320 --> 00:17:22,359
Speaker 1: only two commissioners because it doesn't have the strength, the power,

283
00:17:22,440 --> 00:17:25,040
Speaker 1: and the direction that you would have with a full

284
00:17:25,200 --> 00:17:29,440
Speaker 1: five commissioner compliment, particularly if they all act together. And

285
00:17:29,520 --> 00:17:33,160
Speaker 1: in those days we tended to have unanimous votes more

286
00:17:33,240 --> 00:17:36,000
Speaker 1: often than not, believe it or not, Arthur, just because

287
00:17:36,040 --> 00:17:38,480
Speaker 1: of time. Let's focus on one of your good concepts

288
00:17:38,800 --> 00:17:43,080
Speaker 1: this morning. One is it finally on a trade? We

289
00:17:43,200 --> 00:17:46,920
Speaker 1: will see the mark up the number of Global Wall

290
00:17:46,960 --> 00:17:51,119
Speaker 1: Street people driving off the road right now, Chuckling is

291
00:17:51,200 --> 00:17:54,920
Speaker 1: off the chart. How do you audit an account for

292
00:17:55,400 --> 00:18:01,000
Speaker 1: a markup on a bond transaction or a sophisticated commodity

293
00:18:01,240 --> 00:18:08,520
Speaker 1: or derivatives transaction. Well, the the purpose of what uh

294
00:18:08,960 --> 00:18:13,280
Speaker 1: FIN is doing in the sec will endorse is when

295
00:18:13,560 --> 00:18:18,000
Speaker 1: a firm takes in a bond, either resulting from an

296
00:18:18,160 --> 00:18:23,119
Speaker 1: order or just inventory and passes it out again. To

297
00:18:23,320 --> 00:18:28,960
Speaker 1: charge an unthinkable commission on it and not let the

298
00:18:29,640 --> 00:18:32,280
Speaker 1: buyer know about it is just dead wrong. What the

299
00:18:32,320 --> 00:18:36,119
Speaker 1: Commission is saying now is put it right on the

300
00:18:36,440 --> 00:18:39,960
Speaker 1: confirmation that this is what it costs the firm, and

301
00:18:40,080 --> 00:18:43,120
Speaker 1: this is what it's costing you. Here's your mark up.

302
00:18:43,560 --> 00:18:46,440
Speaker 1: And I think that's long overdue. The bond markets have

303
00:18:46,600 --> 00:18:51,040
Speaker 1: been unusually opaque for much too long, and I think

304
00:18:51,119 --> 00:18:54,120
Speaker 1: this is a good proposal by Finer, and I think

305
00:18:54,160 --> 00:18:57,720
Speaker 1: the Commission should act upon it as quickly as possible.

306
00:18:58,840 --> 00:19:01,200
Speaker 1: Arthur Leven not enough to time, will do this again

307
00:19:02,080 --> 00:19:05,679
Speaker 1: with an important note, he's a former chairman of the SEC.

308
00:19:05,840 --> 00:19:08,359
Speaker 1: When do you get the markets open? I'm going to

309
00:19:08,440 --> 00:19:09,920
Speaker 1: call it a churn. They might. The one thing I

310
00:19:09,960 --> 00:19:13,159
Speaker 1: would focus on besides dollar strength and sort of a

311
00:19:13,240 --> 00:19:17,719
Speaker 1: renewed bout, not near resistance, but a stronger dollar all

312
00:19:17,800 --> 00:19:22,119
Speaker 1: in all is just the weight on on German yields

313
00:19:22,320 --> 00:19:26,960
Speaker 1: is the the country of Europe is stark. The German

314
00:19:27,040 --> 00:19:30,520
Speaker 1: tenure point zero point one one five. It was a

315
00:19:30,600 --> 00:19:34,480
Speaker 1: zero point one zero earlier is I don't know. I

316
00:19:35,040 --> 00:19:39,399
Speaker 1: guess there's elites rationalize that as a good thing. I

317
00:19:39,520 --> 00:19:41,840
Speaker 1: can't get there, and they're reacting to the to the

318
00:19:41,880 --> 00:19:45,120
Speaker 1: weak inflation numbers that suggests the e c D will

319
00:19:45,200 --> 00:19:50,240
Speaker 1: do more a little more negative program note tomorrow Michael

320
00:19:50,280 --> 00:19:53,920
Speaker 1: McKee and I after chowing down Ben's Chili Dog Tonight

321
00:19:54,000 --> 00:19:58,200
Speaker 1: executive conference at Ben's Chili Dog, Washington. We will be

322
00:19:58,359 --> 00:20:02,040
Speaker 1: with you tomorrow se for Tuesday from Washington. This is

323
00:20:02,080 --> 00:20:07,800
Speaker 1: Bloomberg Surveillance, cutting down to the opening bell, brought you

324
00:20:07,840 --> 00:20:10,119
Speaker 1: by the refined Jeep Grand Cherokee Overland. It continues to

325
00:20:10,240 --> 00:20:12,840
Speaker 1: raise the bar with its luxurious interior and legendary four

326
00:20:12,880 --> 00:20:15,160
Speaker 1: by four capability. Drive on at your local Jeep dealer

327
00:20:15,200 --> 00:20:24,680
Speaker 1: today GEEP the official Vehicle Killing Too Resort, broadcasting live

328
00:20:24,840 --> 00:20:28,880
Speaker 1: to New York, Kloomberg elevens to Washington, d C, Bloomberg

329
00:20:29,840 --> 00:20:33,960
Speaker 1: to Boston, Bloomberg twelve honors, to San Francisco, Bloomberg nine

330
00:20:34,520 --> 00:20:38,080
Speaker 1: to the Country Serious Exam Channel one ninety and around

331
00:20:38,160 --> 00:20:41,360
Speaker 1: the globe the Bloomberg Radio plus Aben Bloomberg dot Com.

332
00:20:41,760 --> 00:20:45,600
Speaker 1: This is Bloomberg Surveillance. It's not thirty on Wall Street.

333
00:20:45,640 --> 00:20:48,200
Speaker 1: Good Morning on Karen Moscow along with Tom Keene and

334
00:20:48,240 --> 00:20:51,280
Speaker 1: Michael McKay and the opening Gallas brought to you by SEI,

335
00:20:51,480 --> 00:20:55,280
Speaker 1: have evolving investor and regulatory demands affected your investment firms

336
00:20:55,359 --> 00:20:59,920
Speaker 1: operational readiness. Imagine transforming your business with SCI's global platform

337
00:21:00,280 --> 00:21:03,600
Speaker 1: at se i C dot com slash. Imagine stocks lower

338
00:21:03,720 --> 00:21:05,560
Speaker 1: at the open, the S and P five hundred down

339
00:21:05,600 --> 00:21:08,280
Speaker 1: a tenth of upper center two points in nineteen forty five,

340
00:21:08,560 --> 00:21:11,040
Speaker 1: Dow Jones Industrial Average down a tenth of upper center

341
00:21:11,119 --> 00:21:13,840
Speaker 1: twelve points to sixteen thousand and six hundred twenty seven,

342
00:21:14,119 --> 00:21:16,000
Speaker 1: and then as dacts down a tenth of upper center

343
00:21:16,080 --> 00:21:19,280
Speaker 1: five points to eighty four. Ten year treasury up one

344
00:21:19,320 --> 00:21:22,000
Speaker 1: thirty second, the yield one point seven five percent. Yield

345
00:21:22,040 --> 00:21:24,320
Speaker 1: on the two year point at one percent. Now I'm

346
00:21:24,359 --> 00:21:26,520
Speaker 1: ex scred oil up one point four percent or forty

347
00:21:26,560 --> 00:21:29,440
Speaker 1: five cents to thirty three twenty four of barrel comes

348
00:21:29,480 --> 00:21:31,840
Speaker 1: Gold up nine tenths per cent or ten dollars fifty

349
00:21:31,880 --> 00:21:34,680
Speaker 1: cents to twelve thirty one announced the euro a dollar

350
00:21:34,760 --> 00:21:37,600
Speaker 1: oh eight eight one, the yen one thirteen point oh eight.

351
00:21:37,800 --> 00:21:41,320
Speaker 1: Tom and Mike Karen, I think so much time for surveillance. Correction, folks,

352
00:21:41,800 --> 00:21:44,879
Speaker 1: my folks, pop Michael McKee, catching it is only Michael

353
00:21:44,920 --> 00:21:49,720
Speaker 1: McKee at can I said Ben's Chili Dog. They're fifty

354
00:21:49,800 --> 00:21:54,800
Speaker 1: eight year in August Ben's Chili Bowl. I just that's

355
00:21:54,920 --> 00:21:56,680
Speaker 1: all I have is the chili dogs. When I go,

356
00:21:56,960 --> 00:21:58,520
Speaker 1: they're going to look at you when you get there

357
00:21:58,520 --> 00:22:01,240
Speaker 1: and say you're not from here. Actually Ben's Chili Bowl.

358
00:22:01,640 --> 00:22:03,720
Speaker 1: Well they say that when I do walk in the door.

359
00:22:05,000 --> 00:22:07,040
Speaker 1: I think it's amazing to me about it is this,

360
00:22:07,880 --> 00:22:10,080
Speaker 1: as you say, fifty eight years it's been on you

361
00:22:10,200 --> 00:22:13,320
Speaker 1: street and now they have expanded over the last couple

362
00:22:13,359 --> 00:22:17,000
Speaker 1: of years. They even have an outloo at National Airport.

363
00:22:18,119 --> 00:22:21,040
Speaker 1: So um, congratulations with them on their business success. Maybe

364
00:22:21,080 --> 00:22:24,600
Speaker 1: somewhere I'll actually pronounce the Washington stuff right. Good morning

365
00:22:24,760 --> 00:22:29,840
Speaker 1: Bloom FM. Michael McKee introduced her important guest. She slept

366
00:22:29,880 --> 00:22:32,000
Speaker 1: in this morning, came to us later than normal because

367
00:22:32,040 --> 00:22:35,560
Speaker 1: she watched every tick of the ox oscars right to

368
00:22:35,640 --> 00:22:41,680
Speaker 1: the bloody yad. What lies You're gonna have another correction soon? Well,

369
00:22:41,800 --> 00:22:43,840
Speaker 1: it's if Donald Trump could say what he says to

370
00:22:44,640 --> 00:22:47,080
Speaker 1: Tom could make up stuff about what you did last night?

371
00:22:48,160 --> 00:22:50,680
Speaker 1: Did you watch? I didn't. I'm one of those really

372
00:22:50,720 --> 00:22:55,080
Speaker 1: annoying cord cutting millennials. So I did not. I watched

373
00:22:55,119 --> 00:22:58,960
Speaker 1: it unfold on social media. Well, I didn't watch either,

374
00:22:59,359 --> 00:23:01,879
Speaker 1: but it was glad to see the Spotlight one. It

375
00:23:02,000 --> 00:23:04,600
Speaker 1: was a good movie, good for journalism, good for journalism.

376
00:23:04,680 --> 00:23:07,040
Speaker 1: It showed what it's really like, especially if you have,

377
00:23:07,640 --> 00:23:10,359
Speaker 1: um an actor who looks like you. Um, that's the

378
00:23:10,440 --> 00:23:12,160
Speaker 1: amazing thing. Have you seen the pictures of the real

379
00:23:12,240 --> 00:23:16,840
Speaker 1: people versus the actors? I haven't. Actually Schreiber and Marty

380
00:23:16,920 --> 00:23:20,480
Speaker 1: Baron look exactly alike, really exactly alike. I did watch

381
00:23:20,560 --> 00:23:22,280
Speaker 1: the movie for the first time on Friday, and I

382
00:23:22,359 --> 00:23:25,680
Speaker 1: gotta say it nailed. Um. Some of the wardrobe choices

383
00:23:25,800 --> 00:23:29,240
Speaker 1: of journals. Absolutely absolutely, we're sitting here looking like that

384
00:23:29,400 --> 00:23:32,840
Speaker 1: right now. Um. Notes that have come in that you

385
00:23:32,960 --> 00:23:36,600
Speaker 1: have been following, one uh that you highlight caught my

386
00:23:36,760 --> 00:23:41,240
Speaker 1: eye today as well, and that is from Tom Porcelliott RBC.

387
00:23:41,760 --> 00:23:44,080
Speaker 1: They know the feed is data dependent, and if the

388
00:23:44,119 --> 00:23:47,040
Speaker 1: feed is data dependent, the FED should be raising rates

389
00:23:47,080 --> 00:23:49,840
Speaker 1: in March. Indeed, I mean in theory, the FETE is

390
00:23:49,920 --> 00:23:52,639
Speaker 1: data dependent. Right. They went through great, great pains to

391
00:23:52,720 --> 00:23:55,560
Speaker 1: convince the market before the December rate rise that they

392
00:23:55,600 --> 00:23:59,399
Speaker 1: were data dependent, that inflation and unemployment were trending towards

393
00:23:59,480 --> 00:24:02,639
Speaker 1: their goal holes and now, if anything, the improvement in

394
00:24:02,720 --> 00:24:06,080
Speaker 1: both those things has really accelerated. And yet, uh, they

395
00:24:06,119 --> 00:24:09,320
Speaker 1: are doing a sort of a reverse ferret in British

396
00:24:09,400 --> 00:24:12,760
Speaker 1: journalism speak and trying to convince the markets that March

397
00:24:12,920 --> 00:24:18,919
Speaker 1: isn't necessarily on the table. What a reverse ferret? Reverse ferret?

398
00:24:19,000 --> 00:24:23,159
Speaker 1: Come on, you've never heard that term. They've done an

399
00:24:23,200 --> 00:24:26,280
Speaker 1: about face. W the reverse ferret? Where does that come from?

400
00:24:26,359 --> 00:24:29,919
Speaker 1: What's the edema? I think it's a British tabloid speak.

401
00:24:30,160 --> 00:24:34,119
Speaker 1: You know you Kevin Mackenzie at the Sun. Yeah, you know,

402
00:24:34,240 --> 00:24:40,320
Speaker 1: you stick a ferret. Yeah, hey, we were talking about journalism.

403
00:24:43,119 --> 00:24:45,800
Speaker 1: But I think this is an important idea for markets

404
00:24:45,840 --> 00:24:48,000
Speaker 1: and investors to get their head around. And this maybe

405
00:24:48,040 --> 00:24:50,719
Speaker 1: accounts for some of the confusion that we've seen from

406
00:24:50,800 --> 00:24:55,040
Speaker 1: various people about where the FETE is headed. Well, anyway,

407
00:24:55,880 --> 00:24:58,440
Speaker 1: the FET is not probably going to raise rates in March,

408
00:24:58,600 --> 00:25:01,200
Speaker 1: because um, the important thing now becomes not what the

409
00:25:01,280 --> 00:25:03,920
Speaker 1: data are, but what the FETE is telling people. It

410
00:25:04,080 --> 00:25:06,960
Speaker 1: is almost March, and unless they immediately start setting the

411
00:25:07,040 --> 00:25:10,639
Speaker 1: markets up for a rate increase, almost too late. They

412
00:25:10,680 --> 00:25:13,920
Speaker 1: have two weeks to prepare people. But it looks very

413
00:25:14,040 --> 00:25:16,359
Speaker 1: unlikely that they're going to do that. You have a

414
00:25:16,440 --> 00:25:20,000
Speaker 1: wonderful idea which which for me is a personal note,

415
00:25:20,080 --> 00:25:23,800
Speaker 1: and that certain members of my childhood household linked the

416
00:25:23,920 --> 00:25:29,280
Speaker 1: markets directly the presidential aspirations, which I have always struggled with.

417
00:25:30,040 --> 00:25:34,760
Speaker 1: Somebody better than smart Dominique Constantate Deutsche Bank reviews this.

418
00:25:35,200 --> 00:25:40,760
Speaker 1: I'm fascinated Tracy what he and you think is analysis

419
00:25:40,880 --> 00:25:46,359
Speaker 1: of presidential outcomes Germaine to what our markets do. I

420
00:25:46,480 --> 00:25:48,520
Speaker 1: think it's an excellent question. I mean, I have to

421
00:25:48,600 --> 00:25:50,440
Speaker 1: say I've heard a lot of people over the past

422
00:25:50,520 --> 00:25:54,120
Speaker 1: couple of weeks talking about the impact of presidents on markets.

423
00:25:54,200 --> 00:25:57,840
Speaker 1: I haven't seen a lot of salient analysis of what

424
00:25:58,040 --> 00:26:01,399
Speaker 1: the outcomes actually mean for investors. Deutsche Bank takes a

425
00:26:01,520 --> 00:26:04,680
Speaker 1: stab at it. It's all very very general. You know.

426
00:26:04,760 --> 00:26:09,040
Speaker 1: It's stuff like we could see expansionary of fiscal stimulus

427
00:26:09,240 --> 00:26:12,560
Speaker 1: under Clinton. H Bernie Sanders is a bit more for

428
00:26:12,880 --> 00:26:17,680
Speaker 1: trade protectionism. Uh, there's healthcare issues around both Donald Trump

429
00:26:17,720 --> 00:26:22,040
Speaker 1: and Marco Rubio. UM, it's not really surprising. I think

430
00:26:22,119 --> 00:26:25,000
Speaker 1: it's really really hard to tease out what markets are

431
00:26:25,040 --> 00:26:28,640
Speaker 1: going to do based on really disparate candidates and really

432
00:26:28,720 --> 00:26:33,080
Speaker 1: disparate policies that aren't any close because we don't have

433
00:26:33,640 --> 00:26:36,959
Speaker 1: official nominees yet. And certainly on the Republican side, Uh,

434
00:26:37,480 --> 00:26:39,800
Speaker 1: they may be getting that way, but there's still some

435
00:26:40,240 --> 00:26:43,919
Speaker 1: viable possibilities for others. And on the Democratic side, Um,

436
00:26:45,040 --> 00:26:50,760
Speaker 1: you have to consider whether or not a Republican Congress,

437
00:26:51,480 --> 00:26:53,800
Speaker 1: if it remains the same, would allow anything to happen.

438
00:26:53,880 --> 00:26:56,000
Speaker 1: So there are so many moving parts here. It really

439
00:26:56,080 --> 00:26:58,159
Speaker 1: reminds me of do you remember in two thousand eleven

440
00:26:58,240 --> 00:27:00,679
Speaker 1: at the start of the Eurozone crisis, is when everyone

441
00:27:00,840 --> 00:27:04,200
Speaker 1: suddenly had to become a sort of geopolitical commentator. We

442
00:27:04,280 --> 00:27:06,200
Speaker 1: had to find where Greece was right. We had to

443
00:27:06,280 --> 00:27:08,679
Speaker 1: do that first, and then we had to familiarize ourselves

444
00:27:08,760 --> 00:27:12,560
Speaker 1: with the you know, minute workings of EU politics. It

445
00:27:12,680 --> 00:27:16,000
Speaker 1: feels like we're heading towards that point in the US.

446
00:27:16,080 --> 00:27:19,080
Speaker 1: I'm not sure it's actually that useful. What else do

447
00:27:19,119 --> 00:27:21,320
Speaker 1: you see this weekend? Off the path forget about your

448
00:27:21,320 --> 00:27:23,320
Speaker 1: published what did you see this wee can instruct you

449
00:27:24,520 --> 00:27:30,639
Speaker 1: besides the wave of Super Tuesday, Trump slash Trump essays, Um,

450
00:27:30,880 --> 00:27:32,879
Speaker 1: you know, we're seeing some interesting things in the credit

451
00:27:33,000 --> 00:27:37,720
Speaker 1: market again. Uh. For instance, we've seen some really interesting

452
00:27:37,800 --> 00:27:42,600
Speaker 1: price action on collateralized loan obligations, some of those getting hammered. So,

453
00:27:42,800 --> 00:27:45,840
Speaker 1: for instance, we saw styd an important note on this,

454
00:27:46,160 --> 00:27:48,040
Speaker 1: there's one seed and you have to remember these are

455
00:27:48,440 --> 00:27:51,440
Speaker 1: things that investors bought up because they had juicy yields

456
00:27:51,480 --> 00:27:53,600
Speaker 1: over the past couple of years, now that now the

457
00:27:53,680 --> 00:27:56,040
Speaker 1: bottom is kind of falling out. We saw one clo

458
00:27:56,160 --> 00:27:58,560
Speaker 1: it's held on the books by certain mutual fund at

459
00:27:59,000 --> 00:28:02,600
Speaker 1: five dollars, and we saw a bewick process for it,

460
00:28:02,680 --> 00:28:06,640
Speaker 1: a bid basically where it probably traded in the mid sixties.

461
00:28:07,280 --> 00:28:11,040
Speaker 1: So that's a pretty big decline in the space of

462
00:28:11,680 --> 00:28:13,600
Speaker 1: too much one of those things that people thought they

463
00:28:13,640 --> 00:28:16,159
Speaker 1: could market time right, we can get leield and then

464
00:28:16,240 --> 00:28:18,359
Speaker 1: we can dump it when it looks bad. Yeah, and

465
00:28:18,440 --> 00:28:21,159
Speaker 1: it turns out everyone wants to do that right quickly?

466
00:28:21,320 --> 00:28:24,360
Speaker 1: Or what is the what is the ten of research

467
00:28:24,440 --> 00:28:28,240
Speaker 1: and smart people saying this is like two eight slash

468
00:28:28,359 --> 00:28:32,639
Speaker 1: the big short or b No, it's not. What's that

469
00:28:33,359 --> 00:28:37,040
Speaker 1: zeitgeist right now? The zeitgeist is definitely that people are

470
00:28:37,080 --> 00:28:40,400
Speaker 1: talking about it. The zeitgeist is that we are probably

471
00:28:40,480 --> 00:28:42,840
Speaker 1: not heading for a two thousand eight style of situation

472
00:28:43,080 --> 00:28:47,280
Speaker 1: because leverage levels are lower, banks are supposedly safer, and

473
00:28:47,680 --> 00:28:52,160
Speaker 1: the amount of outstanding energy related debt should be relatively confined.

474
00:28:52,520 --> 00:28:55,479
Speaker 1: Of course, what everyone tends to forget is before two eight,

475
00:28:55,560 --> 00:28:58,720
Speaker 1: we heard very similar arguments when it came to mortgages

476
00:28:58,760 --> 00:29:01,640
Speaker 1: in subprime. The problem we two was then all the

477
00:29:01,720 --> 00:29:05,080
Speaker 1: leverage was hidden and unexpected. In Brooklyn. That that place

478
00:29:05,160 --> 00:29:07,320
Speaker 1: in Williamsburg, that bar that you take me to where

479
00:29:07,320 --> 00:29:11,040
Speaker 1: we hear great music reverse ferrets playing there Thursday night,

480
00:29:11,120 --> 00:29:14,920
Speaker 1: I think Tracy elloway uh you note that why you

481
00:29:15,040 --> 00:29:18,040
Speaker 1: and your crack producer has forward and we'll have to

482
00:29:18,120 --> 00:29:20,920
Speaker 1: get to this after the break. The definition of a

483
00:29:21,000 --> 00:29:23,880
Speaker 1: reverse ferret very good on why you was all over that?

484
00:29:24,000 --> 00:29:26,520
Speaker 1: Of course, don't say I never teach you anything interesting.

485
00:29:27,720 --> 00:29:31,920
Speaker 1: Dollars a tuition, n y u h. Where are we here? Futures?

486
00:29:32,360 --> 00:29:38,000
Speaker 1: The market open? Negative five? Right now? All right, time

487
00:29:38,040 --> 00:29:39,320
Speaker 1: to check in with like a bar and get the

488
00:29:39,440 --> 00:29:42,840
Speaker 1: latest world in national headlines. My time, Thank you very much.

489
00:29:42,880 --> 00:29:45,920
Speaker 1: Donald Trump says he was given a very bad earpiece

490
00:29:46,000 --> 00:29:49,040
Speaker 1: and could not clearly hear the question posed by CNN

491
00:29:49,480 --> 00:29:52,560
Speaker 1: when asked about former Kuplex Klan leader David Duke, giving

492
00:29:52,560 --> 00:29:56,480
Speaker 1: Trump his support. This morning, Trump tells NBC's Today that

493
00:29:56,880 --> 00:30:00,800
Speaker 1: he denounced Duke on Facebook and Twitter all week end. Well,

494
00:30:00,880 --> 00:30:03,160
Speaker 1: I know who he is, but I never met David Douke,

495
00:30:03,280 --> 00:30:07,520
Speaker 1: so you when you talk about it, I never met Viddo. Meanwhile,

496
00:30:07,560 --> 00:30:11,000
Speaker 1: a new CNN pole shows Donald Trump hast of voter

497
00:30:11,080 --> 00:30:15,160
Speaker 1: support among Republicans. Marco Rubio has sixteen percent, Ted Cruz

498
00:30:15,440 --> 00:30:19,200
Speaker 1: has fifteen percent. For the Democrats, Hillary Clinton has fifty

499
00:30:19,240 --> 00:30:22,800
Speaker 1: five percent. Bernie Sanders has thirty eight percent. The phone

500
00:30:22,880 --> 00:30:25,120
Speaker 1: poll of more than a thousand adults was taken from

501
00:30:25,160 --> 00:30:28,560
Speaker 1: February twenty four through the seven and as a margin

502
00:30:28,640 --> 00:30:31,600
Speaker 1: of eric a plus or a minus five points. Meanwhile,

503
00:30:31,680 --> 00:30:35,760
Speaker 1: Sanders presidential campaign has raised more than thirty six million

504
00:30:35,800 --> 00:30:38,880
Speaker 1: dollars in February and is pushing his supporters to help

505
00:30:38,960 --> 00:30:41,600
Speaker 1: him top forty million for the month by the end

506
00:30:41,640 --> 00:30:44,600
Speaker 1: of the day. And Army staff sargeant accused of killing

507
00:30:44,680 --> 00:30:47,760
Speaker 1: his wife and a Northern Virginia police officer is scheduled

508
00:30:47,800 --> 00:30:51,160
Speaker 1: to appear in court for an arraignment today. Global News

509
00:30:51,240 --> 00:30:54,360
Speaker 1: twenty four hours a day, powered by our two hundred

510
00:30:54,400 --> 00:30:57,000
Speaker 1: journalists and more than a hundred fifty news bureaus from

511
00:30:57,040 --> 00:31:00,240
Speaker 1: around the world. I am Michael Barr Tom I think

512
00:31:00,240 --> 00:31:02,200
Speaker 1: so much a two year yield us to year yield

513
00:31:02,280 --> 00:31:05,120
Speaker 1: point eight one percent. That's actually a buoyant number, point

514
00:31:05,200 --> 00:31:09,840
Speaker 1: eight one percent, leading to curve flattening ninety four basis

515
00:31:09,880 --> 00:31:12,400
Speaker 1: points at a solid two point three basis points today.

516
00:31:12,640 --> 00:31:15,640
Speaker 1: All you need to know curve flatter bank profits tough

517
00:31:16,280 --> 00:31:23,440
Speaker 1: Bloomberg Surveillance Bloomberg Surveillance Poty by common Wealth Financial Network.

518
00:31:23,480 --> 00:31:25,360
Speaker 1: When it's time to change the conversation, talk with a

519
00:31:25,440 --> 00:31:27,960
Speaker 1: broker dealer r I A that's ready to listen Call

520
00:31:28,040 --> 00:31:30,680
Speaker 1: eight six x four six two eight or visit common

521
00:31:30,720 --> 00:31:39,240
Speaker 1: Wealth dot com to learn more. Global business news twenty

522
00:31:39,280 --> 00:31:42,240
Speaker 1: four hours a day at Bloomberg dot com, the Radio

523
00:31:42,320 --> 00:31:45,120
Speaker 1: plus Mobile Act and on your radio. This is a

524
00:31:45,200 --> 00:31:49,480
Speaker 1: Bloomberg Business Flash and I'm Karen Moscow. The SNP five

525
00:31:49,680 --> 00:31:52,400
Speaker 1: D is lower this morning, on the last trading day

526
00:31:52,480 --> 00:31:54,640
Speaker 1: of the month. It follows a second weekly gain for

527
00:31:54,680 --> 00:31:57,320
Speaker 1: the SNP and it comes as China's Central Bank stepped

528
00:31:57,400 --> 00:32:00,160
Speaker 1: up efforts to cush in the country's economic slowdown. We

529
00:32:00,280 --> 00:32:02,920
Speaker 1: check the markets every fifteen minutes throughout the trading day

530
00:32:02,960 --> 00:32:05,720
Speaker 1: on Bloomberg SNP five hundred, down a tenth of upper

531
00:32:05,760 --> 00:32:09,160
Speaker 1: center two points to nineteen forty five down. Jones Industrial

532
00:32:09,200 --> 00:32:11,560
Speaker 1: Average down a tenth of upper center fifteen points to

533
00:32:11,680 --> 00:32:14,800
Speaker 1: sixteen thousand, six hundred twenty four. Then, ASDAC is a

534
00:32:14,800 --> 00:32:17,800
Speaker 1: little changed, it's up two points to forty five ninety three.

535
00:32:18,240 --> 00:32:20,840
Speaker 1: Tenure Treasury of five thirty seconds, the yield one point

536
00:32:20,920 --> 00:32:23,040
Speaker 1: seven four percent, the yield on the two year point

537
00:32:23,080 --> 00:32:25,960
Speaker 1: eight zero percent. Nimex screw oil up one and a

538
00:32:26,040 --> 00:32:28,680
Speaker 1: quarter percent, or forty two cents to thirty three twenty

539
00:32:28,720 --> 00:32:31,200
Speaker 1: a barrel comes gold up one point two per cent

540
00:32:31,320 --> 00:32:33,600
Speaker 1: or fourteen dollars to twelve thirty four or forty an

541
00:32:33,640 --> 00:32:36,120
Speaker 1: ounce the euro a dollar oh eight eight seven the

542
00:32:36,320 --> 00:32:39,680
Speaker 1: n one twelve point nine three. Signet Jeweller's is the

543
00:32:39,720 --> 00:32:42,440
Speaker 1: best performer in the SNP five hundred this morning, with

544
00:32:42,480 --> 00:32:45,560
Speaker 1: the ticker s i G. Signet's fourth quarter preliminary profit

545
00:32:45,640 --> 00:32:48,840
Speaker 1: beating analysts estimates. It raised its quarterly dividend of twenty

546
00:32:48,880 --> 00:32:52,400
Speaker 1: six cents from twenty two cents, and shares are up

547
00:32:52,480 --> 00:32:56,400
Speaker 1: eleven and a half percent today. Federal Mogil Holdings largest

548
00:32:56,440 --> 00:32:59,800
Speaker 1: shareholder activist investor carl Icon offering to buy the remaining

549
00:33:00,000 --> 00:33:02,800
Speaker 1: eighteen percent of the auto parts maker for seven dollars

550
00:33:02,840 --> 00:33:05,600
Speaker 1: a share, and a move that would consolidate the automotive

551
00:33:05,680 --> 00:33:09,520
Speaker 1: interests of icon enterprises. That's a Bloomberg business flash, Tom

552
00:33:09,560 --> 00:33:14,200
Speaker 1: and Mike Caramelska, thank you very much. Brad DeLong was

553
00:33:14,280 --> 00:33:18,120
Speaker 1: the once was the chief countist at the Treasury Department.

554
00:33:18,160 --> 00:33:21,720
Speaker 1: He is now a professor at the University of California

555
00:33:21,800 --> 00:33:25,680
Speaker 1: at Berkeley, and along with Stephen S. Cohen, has written

556
00:33:25,680 --> 00:33:29,000
Speaker 1: a new book called Concrete Economics, the Hamilton's approach to

557
00:33:29,120 --> 00:33:33,680
Speaker 1: economic growth and policy. And the basic underlying tenant of

558
00:33:33,840 --> 00:33:37,560
Speaker 1: the book, which comes out at perfectly timed for the

559
00:33:37,600 --> 00:33:42,280
Speaker 1: middle of a presidential campaign, Brad, is that government in

560
00:33:42,360 --> 00:33:46,840
Speaker 1: the US in the past has been highly or largely

561
00:33:46,920 --> 00:33:49,960
Speaker 1: responsible for opening up what you call a new economic space,

562
00:33:50,640 --> 00:33:54,760
Speaker 1: doing what was needed to enable and encourage entrepreneurs. The

563
00:33:54,840 --> 00:33:58,880
Speaker 1: government has always been, you argue, part of the what

564
00:33:59,080 --> 00:34:01,720
Speaker 1: we think of as the visible hand free market. Without

565
00:34:01,880 --> 00:34:04,720
Speaker 1: people realizing it, it was an accepted thing and it

566
00:34:04,840 --> 00:34:10,120
Speaker 1: no longer is. Yes, well, I say, I'd say, if

567
00:34:10,200 --> 00:34:13,560
Speaker 1: we have people to take one two words away from

568
00:34:13,600 --> 00:34:18,880
Speaker 1: her book, it is concrete and pragmatic that whenever the

569
00:34:19,040 --> 00:34:25,000
Speaker 1: US economy has gotten into trouble, it's because the political

570
00:34:25,080 --> 00:34:29,520
Speaker 1: system has grabbed on for some one particular ideology and

571
00:34:29,640 --> 00:34:34,000
Speaker 1: has becoming without judging economic policy by whether it fits

572
00:34:34,160 --> 00:34:39,000
Speaker 1: that particular ideology, rather than whether it happens to work

573
00:34:39,600 --> 00:34:42,840
Speaker 1: in that particular time, at that particular place, for that

574
00:34:43,000 --> 00:34:47,000
Speaker 1: particular situation. What does it mean for the government to

575
00:34:47,239 --> 00:34:50,359
Speaker 1: be involved? I can hear people saying, you don't mean

576
00:34:50,440 --> 00:34:54,360
Speaker 1: the government should pick winners and losers. Well, the government's

577
00:34:54,480 --> 00:34:57,719
Speaker 1: very lousy at picking winners and losers town. But if

578
00:34:57,800 --> 00:35:02,800
Speaker 1: there actually is a big winner, um, that it's clear

579
00:35:03,040 --> 00:35:06,160
Speaker 1: could use a lot of support and could benefit the

580
00:35:06,320 --> 00:35:11,760
Speaker 1: economy enormously by doing so. Um. Why an ideological aversion

581
00:35:12,719 --> 00:35:16,080
Speaker 1: to something that is a rule of thumbs? Try to

582
00:35:16,280 --> 00:35:22,040
Speaker 1: stand in your way that while the government doesn't tend

583
00:35:22,080 --> 00:35:25,399
Speaker 1: to do a good job of picking winners, America does

584
00:35:25,640 --> 00:35:28,960
Speaker 1: have a lot of winner and attempts to get in

585
00:35:29,080 --> 00:35:33,000
Speaker 1: their way or even policies that unintentionally get in their

586
00:35:33,040 --> 00:35:35,840
Speaker 1: way would seem, from a pragmatic point of view, to

587
00:35:35,960 --> 00:35:38,960
Speaker 1: be pretty stupid, wouldn't the right along with us from

588
00:35:39,000 --> 00:35:42,240
Speaker 1: Berkeley and again thrilled to have him on and support

589
00:35:42,280 --> 00:35:46,040
Speaker 1: a concrete economics bread is always on your website. You

590
00:35:46,120 --> 00:35:49,080
Speaker 1: shock and off people would never suggest you say, read

591
00:35:49,120 --> 00:35:51,960
Speaker 1: William Easterly of n y U The Elusive Quest for Growth,

592
00:35:52,320 --> 00:35:54,279
Speaker 1: And it is in the next line you say, read

593
00:35:54,320 --> 00:36:00,239
Speaker 1: Skidelski two volumes on John Maynard Keys and I've been trumping. Yes,

594
00:36:01,440 --> 00:36:03,640
Speaker 1: look at I look at this, Brad. And to go

595
00:36:03,760 --> 00:36:06,880
Speaker 1: to page one six of your lovely short book you

596
00:36:07,040 --> 00:36:11,359
Speaker 1: talk about our leading shrink sector. What does Neil Keshkari

597
00:36:11,480 --> 00:36:16,920
Speaker 1: get right about holding an important UH seminar and thought

598
00:36:17,239 --> 00:36:20,320
Speaker 1: moment to actually discuss what do we do to shrink

599
00:36:20,360 --> 00:36:24,160
Speaker 1: our banks? Where are you in that debate? Um, I'm

600
00:36:24,560 --> 00:36:29,600
Speaker 1: scared of having a huge number of very small banks that,

601
00:36:30,080 --> 00:36:32,400
Speaker 1: because they all talk to each other, and because they

602
00:36:32,440 --> 00:36:35,920
Speaker 1: all subject to group think, take on the same amount

603
00:36:36,000 --> 00:36:40,000
Speaker 1: of systemic risk that one big bank does. UM. And

604
00:36:40,160 --> 00:36:42,960
Speaker 1: yet when a bunch of small banks get into trouble,

605
00:36:43,080 --> 00:36:45,240
Speaker 1: dealing with them all at once as harder than dealing

606
00:36:45,360 --> 00:36:48,799
Speaker 1: was one big bank. I think the key is when

607
00:36:48,840 --> 00:36:52,160
Speaker 1: you do shrink the banks, make sure that you shrink

608
00:36:52,239 --> 00:36:56,319
Speaker 1: the banks in such a way that they against each other, UM,

609
00:36:56,440 --> 00:37:00,319
Speaker 1: that they have incentives different banks and different sectors having

610
00:37:00,400 --> 00:37:04,080
Speaker 1: sentenced to do different things, rather than all heading over

611
00:37:04,200 --> 00:37:07,480
Speaker 1: a cliff like Lemmings in one big hurt. And I

612
00:37:07,600 --> 00:37:12,719
Speaker 1: think that Cashtari's a call for shrinking two big desailed

613
00:37:12,800 --> 00:37:17,680
Speaker 1: banks down UM is very good. But the attention has

614
00:37:17,760 --> 00:37:21,200
Speaker 1: to be paid to the culture and to the incentives

615
00:37:21,920 --> 00:37:24,759
Speaker 1: UM to actually split them up so that they bet

616
00:37:24,800 --> 00:37:27,120
Speaker 1: against each other, rather than all going in the same

617
00:37:27,160 --> 00:37:30,319
Speaker 1: direction and then relying on the government to bail them

618
00:37:30,400 --> 00:37:33,359
Speaker 1: all out collectively because it can't let them all. Say

619
00:37:35,239 --> 00:37:40,320
Speaker 1: what is the Hamilton's approach to economic growth? UM, he

620
00:37:40,560 --> 00:37:44,080
Speaker 1: is co on, and I say that it is ruthless

621
00:37:44,239 --> 00:37:50,440
Speaker 1: pragmatism right UM. That Hamilton's was happy to quote Adamson UM,

622
00:37:50,600 --> 00:37:53,040
Speaker 1: and he was happy to say Adam Smith was wrong.

623
00:37:54,000 --> 00:37:58,440
Speaker 1: Hamilton was happy to let entrepreneurs be their thin UM,

624
00:37:58,520 --> 00:38:01,840
Speaker 1: but he was also very happy to have the government

625
00:38:02,000 --> 00:38:06,600
Speaker 1: step in UM and do stuff where he thought entrepreneurs

626
00:38:06,680 --> 00:38:10,200
Speaker 1: were likely to fail. And he was also extremely happy

627
00:38:10,360 --> 00:38:14,000
Speaker 1: to try to make sure that government policy was crafted

628
00:38:14,040 --> 00:38:19,120
Speaker 1: in such a way to provide the potential entrepreneurs who

629
00:38:19,160 --> 00:38:27,640
Speaker 1: we saw as America's urban manufacturing, financially sophisticated future UM

630
00:38:27,960 --> 00:38:31,640
Speaker 1: get space to operate even in the world in which

631
00:38:31,680 --> 00:38:36,280
Speaker 1: it looked as if British providers were much more efficient

632
00:38:36,440 --> 00:38:39,399
Speaker 1: that those particular sets of business right then and now

633
00:38:40,520 --> 00:38:44,080
Speaker 1: you know, I mean Jefferson didn't like cities from Jefferson

634
00:38:44,200 --> 00:38:49,360
Speaker 1: didn't like manufacturers. Jefferson really didn't like financiers. Um. Jefferson

635
00:38:49,480 --> 00:38:52,879
Speaker 1: thought we should all be a bunch of farmers um,

636
00:38:53,080 --> 00:38:57,120
Speaker 1: and rely on London for finance and on Manchester for

637
00:38:57,239 --> 00:39:01,640
Speaker 1: manufactured goods and otherwise, as you know, a democracy of

638
00:39:01,719 --> 00:39:05,040
Speaker 1: the Yeoman farmers live our happy life. And then that

639
00:39:05,080 --> 00:39:07,279
Speaker 1: would not have created the America we've seen over the

640
00:39:07,320 --> 00:39:10,200
Speaker 1: past two centuries. Well, we have talked about Tom Keenan,

641
00:39:10,640 --> 00:39:15,200
Speaker 1: you know, overall green acres. Um. Give us an example

642
00:39:15,280 --> 00:39:18,040
Speaker 1: though of how the government so we can understand what

643
00:39:18,080 --> 00:39:21,120
Speaker 1: you're talking about, how the government could act today on

644
00:39:21,360 --> 00:39:26,560
Speaker 1: what to produce one outcome. Oh well, the big, big,

645
00:39:26,960 --> 00:39:29,400
Speaker 1: for one of the biggest post World War two examples,

646
00:39:30,000 --> 00:39:32,799
Speaker 1: although one that now some ambivalence about is the iner

647
00:39:32,880 --> 00:39:36,880
Speaker 1: today highways. Um. If you want to provide an enormous

648
00:39:36,920 --> 00:39:44,080
Speaker 1: subsidy um two trucking and suburbanizations and to a more flexible,

649
00:39:44,760 --> 00:39:50,360
Speaker 1: more individualistic, less street car more space for kids to

650
00:39:50,480 --> 00:39:54,479
Speaker 1: run around and play in yard. Civilization. Um, it would

651
00:39:54,560 --> 00:39:58,560
Speaker 1: be that and be were the leaders in building such

652
00:39:58,600 --> 00:40:03,800
Speaker 1: a huge highway. UM. And over the past sixty years

653
00:40:04,239 --> 00:40:07,440
Speaker 1: pretty much everyone else has looked at it and instead,

654
00:40:07,960 --> 00:40:11,680
Speaker 1: we need to do this too, made not on such

655
00:40:11,760 --> 00:40:16,000
Speaker 1: a right Brad still that it's a good thing. Brad,

656
00:40:16,040 --> 00:40:18,520
Speaker 1: because of time, I want to get to play j

657
00:40:18,680 --> 00:40:21,840
Speaker 1: D six, which I think is so important. DeLong and

658
00:40:22,080 --> 00:40:25,680
Speaker 1: Cohen on the long age of Eisenhower, and of course

659
00:40:26,120 --> 00:40:31,400
Speaker 1: Dr DeLong mentions that with the infrastructure project of the fifties,

660
00:40:31,680 --> 00:40:35,400
Speaker 1: unlike now COMMA, they were smartly defeated by ike in

661
00:40:35,480 --> 00:40:42,120
Speaker 1: the moderate middle class focused corporate Republicans, the establishment bred DeLong.

662
00:40:42,200 --> 00:40:45,759
Speaker 1: Where are those people today? I don't know. I keep

663
00:40:45,840 --> 00:40:47,880
Speaker 1: looking for them and telling them to come out of

664
00:40:47,960 --> 00:40:54,480
Speaker 1: their hole. Um and actually kind of play in American politics.

665
00:40:55,960 --> 00:41:00,440
Speaker 1: To some degree, they're there, but have been making tact goals,

666
00:41:01,320 --> 00:41:04,720
Speaker 1: say maneuvers to try to appease their base at votes

667
00:41:04,800 --> 00:41:08,399
Speaker 1: in primary UM. That if you remember back in two

668
00:41:08,480 --> 00:41:12,600
Speaker 1: thousand nine, Obama Care took the shape that it did

669
00:41:13,360 --> 00:41:16,520
Speaker 1: because the White House said, if we cleave as closely

670
00:41:16,600 --> 00:41:22,400
Speaker 1: as possible to what Romney had done in Massachusetts to

671
00:41:22,520 --> 00:41:26,880
Speaker 1: Romney Care, Republicans can hardly be in block opposition to

672
00:41:27,000 --> 00:41:31,280
Speaker 1: this thing because it is the signature social policy initiative

673
00:41:31,719 --> 00:41:33,520
Speaker 1: of the guy who's going to be there two thousand

674
00:41:33,560 --> 00:41:38,760
Speaker 1: and Royals, Canadas um. And yet Republicans went into block

675
00:41:38,840 --> 00:41:44,520
Speaker 1: oppositions and that Romney was reduced to splitting the finest

676
00:41:44,640 --> 00:41:49,120
Speaker 1: of fine hairs by saying romney Care is great, but

677
00:41:49,360 --> 00:41:51,720
Speaker 1: states that do not like it should have the option

678
00:41:51,880 --> 00:41:55,920
Speaker 1: to do other things. And as it is, even though

679
00:41:56,000 --> 00:42:00,640
Speaker 1: the Federal Reserve, the federal government does have the contested

680
00:42:00,719 --> 00:42:05,480
Speaker 1: power to regulate interstate commerce, it's in some sense illegitimate

681
00:42:05,640 --> 00:42:09,840
Speaker 1: for the federal government to use this power. Who regulates

682
00:42:09,880 --> 00:42:14,040
Speaker 1: health insurance in away that I did when I was

683
00:42:14,120 --> 00:42:17,879
Speaker 1: in Massachusetts and that working very very well. Okay, Brad,

684
00:42:17,880 --> 00:42:21,320
Speaker 1: We're gonna have adapt an ideologic right. That's an ideological

685
00:42:21,480 --> 00:42:27,399
Speaker 1: statement on Romney's part, and I think a very unconvincing one. Okay, Brad,

686
00:42:27,480 --> 00:42:30,280
Speaker 1: thank you so much. And supported concrete economics a wonderful

687
00:42:30,320 --> 00:42:34,160
Speaker 1: short it's Steven S Cohen and J. Bradford, uh along.

688
00:42:34,640 --> 00:42:39,160
Speaker 1: It is most interesting, particularly on another time and place

689
00:42:39,320 --> 00:42:45,120
Speaker 1: for American fiscal Economics tomorrow from Washington. This is Bloomberg's

690
00:42:45,120 --> 00:42:45,640
Speaker 1: surveillance