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Speaker 3: Sticking with the shutdown, as tensions are rising on Capitol Hill,
Speaker 3: House Minority Leader Hakim Jeffries of New York is confident
Speaker 3: a spending bill can pass, but says Republicans must first
Speaker 3: address what he calls healthcare crisis. House Leader Jeffries joins
Speaker 3: us now, Congressman, thank.
Speaker 1: You so much for being with us.
Speaker 3: House Leader, I want to just start with whether you
Speaker 3: feel confident that you can complete sort of agreement in
Speaker 3: the next few days. Do you have a timeframe as
Speaker 3: these discussions do continue.
Speaker 4: Welcome morning, and great to be with you. You know,
Speaker 4: as Democrats, we've repeatedly made clear we will sit down anytime,
Speaker 4: any place with anyone, either here at Capitol Hill or
Speaker 4: back at the White House, in order to reopen the government,
Speaker 4: to enact the spending bill that actually meets the needs
Speaker 4: of the American people as opposed to hurting everyday Americans.
Speaker 4: And of course that spending bill must decisively address the
Speaker 4: Republican healthcare crisis that is hurting working class Americans and
Speaker 4: middle class Americans all throughout the country, including as it
Speaker 4: relates to the urgent need to reauthorize and extend the
Speaker 4: Affordable Care attax credits.
Speaker 5: Well, the Speaker told us yesterday that Congress is having
Speaker 5: these talks when it comes to subsidies reform.
Speaker 1: Are you part of these talks?
Speaker 5: And just a quick condolences because I know you like me,
Speaker 5: we're up late watching the Yankees lose and I know
Speaker 5: you're a huge fan.
Speaker 1: Minority Leader Jeffries, Well, thank you.
Speaker 4: They had a great season. Unfortunately it didn't in the
Speaker 4: way that we expected. But on to next year. With
Speaker 4: respect to know what the Speaker has indicated, there's been
Speaker 4: no conversation between House Republicans and House Democrats. Are between
Speaker 4: the Republican Party, Donald Trump, the administration, and any of
Speaker 4: us on Capitol Hill, including our conversations that should be
Speaker 4: taking place with Leader Schumer and Senate Democrats since that
Speaker 4: White House meeting that occurred last Monday. That's unfortunate, and
Speaker 4: the behavior of Republicans since that point in time has
Speaker 4: been unseerrious and erratic, and we continue to urge them
Speaker 4: to find a path forward, to sit down, let's talk
Speaker 4: exercise common sense on behalf of the American people. But
Speaker 4: anything that's done has to address this urgent need. You know,
Speaker 4: the open enrollment period starts on November first. Over the
Speaker 4: next few weeks, tens of millions of Americans are going
Speaker 4: to receive notices indicating that their premiums, copaids, and deductibles
Speaker 4: are about to skyrocket, in many instances by thousands of
Speaker 4: dollars per year. People are going to go without health insurance,
Speaker 4: face medical bankruptcy, and be jammed up in a situation
Speaker 4: where they need care for themselves, their children, and their families,
Speaker 4: but will be unable to access it because they'll be
Speaker 4: without health insurance.
Speaker 5: It was a democratic policy, though your party voted for
Speaker 5: this temporary subsidy increase. Do you regret having an expiration
Speaker 5: date on.
Speaker 4: This No, We were able to extend it through the
Speaker 4: end of this year, in full anticipation that any reasonable
Speaker 4: member of Congress will understand that you cannot kick tens
Speaker 4: of millions of Americans off of health care that's become
Speaker 4: affordable for them.
Speaker 6: As a result of the tax credits.
Speaker 4: Unfortunately, Republicans chose earlier this year to pass their one big,
Speaker 4: ugly bill, largest cut to Medicaid in American history, ripped
Speaker 4: food away from the mouths of hungry children and seniors
Speaker 4: and veterans, and they did all of this to pay
Speaker 4: for massive tax breaks that they made permanent for their
Speaker 4: billionaire donors well at the same time refusing to extend
Speaker 4: the Affordable CARECT tax credits, which is why we find
Speaker 4: ourselves in this situation.
Speaker 1: Right now, Leader Jeffries.
Speaker 3: Some people would argue that what the Republicans are offering
Speaker 3: is to have a clean, continuing resolution and to continue
Speaker 3: negotiating this given the fact that at the same time,
Speaker 3: they are going to be service members who are not
Speaker 3: going to be paid. There's going to be a question
Speaker 3: around foodstab stamps and whether they're going to be funded.
Speaker 3: Air traffic controllers are calling out sick because they're not
Speaker 3: receiving paychecks. At what point do you just say, look,
Speaker 3: we need to keep people getting paid and we can
Speaker 3: keep talking.
Speaker 4: We want to reopen the government, and we want to
Speaker 4: reopen it immediately, but we also need to enact a
Speaker 4: spending agreement that actually improves the quality of life of
Speaker 4: the American people as opposed to hurting everyday Americans, which
Speaker 4: Republicans have been doing all throughout this year, and they've refused,
Speaker 4: They've refused to negotiate at every step of the way
Speaker 4: throughout this year. They've taken a my way or the
Speaker 4: highway approach. They've gone it alone. And now we find
Speaker 4: ourselves dealing with this mess of this Republican healthcare crisis,
Speaker 4: and time has run out.
Speaker 3: Leader Jeffries, do you think that you've gotten more leverage
Speaker 3: as this process has gone on, or do you think
Speaker 3: that it's actually waiting?
Speaker 4: Well, it's actually not about leverage for us. It's about
Speaker 4: the American people. That's the fight that we're waging. Particularly
Speaker 4: in an environment where the cost of living is way
Speaker 4: too high.
Speaker 6: People are already.
Speaker 4: Paying too much for groceries, for housing, for their electricity bills,
Speaker 4: and now, of course they're confronting the very real possibility
Speaker 4: of being bankrupted by the rising costs of their health insurance.
Speaker 4: So we're just asking Republicans to sit down and negotiate.
Speaker 4: That's what should take place, not simply a my way
Speaker 4: or the highway approach, particularly when they're asking Democrats to
Speaker 4: support a part of san in Republicans spending bill that
Speaker 4: continues to gut the healthcare of the American people.
Speaker 5: Right now, Republicans are asking is to support a clean
Speaker 5: continuous resolution, a scoff gap funding measure, which we've seen
Speaker 5: time and time again that Democrats also wanted Republicans to
Speaker 5: support in the fast passed Why are Democrats choosing to
Speaker 5: keep the government shut?
Speaker 4: That's a Republican talking point, unfortunately, that they are putting
Speaker 4: into the public domain. It's not a clean continuing resolution.
Speaker 1: Why isn't it In March?
Speaker 6: I'd be happy to explain that.
Speaker 4: In March, the Republicans passed a partisan bill in the
Speaker 4: House that Democrats strongly opposed. We opposed that spending bill
Speaker 4: because it hurt veterans, hurt children and families, it hurt
Speaker 4: housing affordability, and it hurt healthcare because of the cuts
Speaker 4: that were included in it. There was actually a bipartisan
Speaker 4: spending agreement that we reached last December that passed overwhelmingly
Speaker 4: in the House and in the Senate. It was signed
Speaker 4: into law by President Joe Biden, and it had the
Speaker 4: support of then President elect Donald Trump. That would have
Speaker 4: been a clean spending agreement that could have been put
Speaker 4: before the Congress. Instead, they passed this partisan, Republican spending
Speaker 4: bill in March that we strongly opposed, and now they
Speaker 4: want us to continue to sign off on that particular
Speaker 4: bill that also includes five hundred million dollars and cuts
Speaker 4: to law enforcement grants to support police officers all across
Speaker 4: the country. That's just not something for a variety of reasons,
Speaker 4: we can support at this particular point in time.
Speaker 5: Do you think the Democratic Party could commit to broader
Speaker 5: reforms when it comes to the Affordable Care Act and
Speaker 5: keeping less of the subsidies. Could this be potential offrame
Speaker 5: for a deal.
Speaker 4: I think that our view, certainly in the House is
Speaker 4: that we will evaluate in good faith any bipartisan proposal
Speaker 4: that is sent over to us from the Senate if
Speaker 4: it decisively addresses the Republican healthcare crisis with respect to
Speaker 4: the Affordable Care Act, tax credits, extensions, or any other
Speaker 4: issues that may be put on the table because of
Speaker 4: the enormity of the attack on the healthcare of the
Speaker 4: American people that Republicans have waged this year.
Speaker 6: It's got to be meaningful.
Speaker 4: It's got to actually improve the lives of the American people.
Speaker 6: But unlike Republicans who.
Speaker 4: Have adopted this my way or the highway approach, we
Speaker 4: are actually willing to sit down and evaluate in good
Speaker 4: faith anything that could advance the ball here for working
Speaker 4: class Americans, middle class Americans, and everyday Americans.
Speaker 5: Is there an opportunity for standalone legislation to make sure
Speaker 5: that the more than one million active duty service members
Speaker 5: get paid next week.
Speaker 4: Certainly, our view in the House is that we should
Speaker 4: stand by our men and women in uniform and make
Speaker 4: sure that they do not miss a paycheck. Unfortunately, Speaker
Speaker 4: Johnson has ruled that out, saying it's not really an
Speaker 4: issue that he's prepared to deal with, in part because
Speaker 4: Republicans cancel votes last week, cancel votes this week, Apparently
Speaker 4: they may not be coming back next week. And what
Speaker 4: is that all for. Why are they on vacation in
Speaker 4: the middle of a government shutdown, Particularly as it relates
Speaker 4: to the real possibility that our military families might miss
Speaker 4: a paycheck that they cannot afford to miss. We're urging
Speaker 4: Republicans to get back into town, allow us to deal
Speaker 4: with the military pay issue, allow us to deal with
Speaker 4: the Republican health care crisis, and allow us to reopen
Speaker 4: the government so we can enact the spending agreement that
Speaker 4: meets the needs of the American people.
Speaker 5: Peter Jeffries, we also saw a pretty explosive argument between
Speaker 5: you and the fellow New York Congressman Mike Lawler, and
Speaker 5: then you proceeded to call Lawler an embarrassment on television.
Speaker 5: Was this fight representative of the state tensions that are
Speaker 5: going on within the Republican Party in New York State
Speaker 5: right now?
Speaker 4: Well, Magi, Mike Lawler is an irrelevant individual. He's a
Speaker 4: clout chaser, and he was stalking the Democratic leadership press
Speaker 4: conference in ways that are unhinged. And at the end
Speaker 4: of the day, our view is the people who need
Speaker 4: to sit down and have the conversation with US Republican
Speaker 4: leadership in the House and in the Senate. The Trump administration,
Speaker 4: including the President or the Vice president or anyone that
Speaker 4: they designate, are the ones who are ultimately going to
Speaker 4: determine how we can find a bipartisan path out of it,
Speaker 4: and we look forward to having those conversations, but unfortunately
Speaker 4: Republicans to date have declined to do that.
Speaker 5: Well, what was he doing that you deem unhinged? And
Speaker 5: have you spoken to him since? Have tensions cooled? It
Speaker 5: doesn't sound like they have.
Speaker 4: He's an irrelevant individual and as I indicated, his behavior
Speaker 4: clearly speaks for itself, complete and total embarrassment. As a
Speaker 4: description was a polite use of words.
Speaker 7: Leader.
Speaker 3: There's a question here about today is to get to
Speaker 3: unify the Democratic Party because this is somebody who is
Speaker 3: a Republican. He's not relevant in his district, and there
Speaker 3: is a question here, especially in New York, how to
Speaker 3: get some sort of cohesive message as a Democrat.
Speaker 1: I'm just wondering, from your perspective, especially.
Speaker 3: As it relates to the Democratic mayoral race in New
Speaker 3: York City.
Speaker 1: You have an endorsed or on mcdonnie, how.
Speaker 3: Difficult is it to get sort of a leadership view
Speaker 3: of where the Democratic Party is going to go?
Speaker 4: Well, listen, as Democrats, what unites us is that we
Speaker 4: believe in a strong flow and no ceiling at the
Speaker 4: end of the day, in America, you work hard, you
Speaker 4: play by the rules, there should be no ceiling to
Speaker 4: your success in terms of what you can achieve for yourself,
Speaker 4: for your family, and for your children. At the same
Speaker 4: point in time, we also believe that in this great country,
Speaker 4: the wealthiest country in the history of the world, that
Speaker 4: we need.
Speaker 6: A strong flow.
Speaker 4: That strong flow includes social Security and Medicare, Medicaid supplemental
Speaker 4: nutritional assistance, veterans benefits, and of course the Affordable Care Act.
Speaker 4: And what unites Democrats at this particular point in time
Speaker 4: is the fact that Republicans are assaulting the flaw that
Speaker 4: we should have for everyday Americans, while at the same
Speaker 4: time rewarding their billionaire donors, and by the way, in
Speaker 4: doing so, skyrocketing the debt by more than three trillion
Speaker 4: dollars in such a fiscally irresponsible fashion.
Speaker 5: Leader Jeffries, you did tell reporters last month you planned
Speaker 5: to address the mayor race in New York soon. Do
Speaker 5: you have a plan to endorse zoramm Donnie.
Speaker 4: We're in the middle of a government shut down. People
Speaker 4: are being hurt all across the country because Trump and
Speaker 4: Republicans decided to shut down the government rather than provide
Speaker 4: healthcare to working class Americans. And so what I've indicated,
Speaker 4: particularly most recently when Mayor Adams decided that he wouldn't
Speaker 4: seek reelection, is that I will have more to say
Speaker 4: about the mayor's race in advance of early voting in.
Speaker 6: New York City, which begins at the end of this month.
Speaker 2: Stay with US Mulplan tax savandance coming up after this.
Speaker 3: Reaching a deal to release all of the hostages in Kaza,
Speaker 3: President Trump saying he expects the hostages to be released
Speaker 3: probably on Monday. Joining US now is Danny Denon, Israel's
Speaker 3: ambassador Cheesy United Nations.
Speaker 1: Danny, Ambassador Donna.
Speaker 3: I'd love to get your sense of what the mood
Speaker 3: is like in Israel and why it has taken up
Speaker 3: to this point that really got this deal together and
Speaker 3: really changed the tone.
Speaker 7: Good morning, Lisa, Thank you for having me.
Speaker 8: Indeed today in Israel all around the world, we are
Speaker 8: very hopeful.
Speaker 7: You know, we have been waiting for the day for
Speaker 7: two years.
Speaker 8: We prayed for the release of the hostages, and we
Speaker 8: were very determined and we stayed it very clear.
Speaker 7: This worle will not end.
Speaker 8: We will get all the hostages out and I think
Speaker 8: that determination brought us to the position where we are today,
Speaker 8: and we want to thank President Trump and Prime Minister
Speaker 8: and Tanyau for the leadership. It's only the beginning, it's
Speaker 8: only the first aage. The government will decide in two
Speaker 8: hours about releasing terrorists, which is painful for us, and
Speaker 8: then we will start to see hopefully the hostages coming
Speaker 8: back home. That's the most important faith, but it's not
Speaker 8: the last one. You know, we have to speak about
Speaker 8: the future, the dimlitarization of Gaza, ensuring that Hamas will.
Speaker 7: Not be part of the process over there.
Speaker 8: So it did a long way ahead, but we are
Speaker 8: very hopeful and happy today to think about the hostages
Speaker 8: finally reuniting with the families.
Speaker 5: Ambassador, is it your understanding that President Trump is going
Speaker 5: to travel to Israel and address the Kannesse.
Speaker 8: Yes, you know, we expect Prethident Traump to arrive to
Speaker 8: it well late Saturday night or on Sunday. You know,
Speaker 8: it will be first visit during this term, and I
Speaker 8: think for him it's very important. You know, he was
Speaker 8: very involved with the issue of the hostages. You know,
Speaker 8: he met with the families, he asked about their medical conditions,
Speaker 8: and we have to give him credit for that, and
Speaker 8: it speaks volume that he comes to the region and
Speaker 8: we have to be thankful not only to his leadership,
Speaker 8: but the fact that now we can speak about expanding
Speaker 8: the Abraham accodes.
Speaker 7: You know, after we will finish this war, is really
Speaker 7: a peaceful nation.
Speaker 8: We want to build bridges, we want to sign more
Speaker 8: peace accordes, and I think today when President's ramping in
Speaker 8: the White House and in Jerusalem, we can start exploring
Speaker 8: the opportunities.
Speaker 5: When it comes to the first phase of this peace agreement,
Speaker 5: where exactly do you see the line where the idea
Speaker 5: will withdraw to.
Speaker 7: Well, that was negotiated.
Speaker 8: You know, we made some compromises over there over that issue.
Speaker 8: On the last days. Basically we're going to pull out
Speaker 8: from the cities. And you know, we have no intention
Speaker 8: to stay in Gaza. We don't want to be there,
Speaker 8: and we will intend to pull out completely. But it
Speaker 8: will happen gradually when we will see that actually Hamas
Speaker 8: is giving away, it's a grip of the of the
Speaker 8: Gatherans and allowing international.
Speaker 7: Forces to take over.
Speaker 8: We care about our security, that's the reason we moved
Speaker 8: into Gaza.
Speaker 3: You're the ambassador to the United Nations, where a number
Speaker 3: of world leaders walked out when Natanya, who was speaking just.
Speaker 1: A couple of weeks ago.
Speaker 3: I'm just wondering how difficult you think it's going to
Speaker 3: be the repair Israel's relationship with the rest of the world,
Speaker 3: given some of the animosity that we've seen of late.
Speaker 8: I think we will do it very fast. You know,
Speaker 8: we have strong relationship with so many countries. Many of them,
Speaker 8: you know, made mistakes. You know, we saw the difference
Speaker 8: between politics and diplomacy. Some leaders like Macron and others
Speaker 8: came to the UN for the show for the declarations
Speaker 8: President Trump and primarily to NATANIAO dealt with out call
Speaker 8: diplomacy and both resorts. So I'm sure that very fast
Speaker 8: we will be able to work with those countries, continue
Speaker 8: to contribute to developing countries. You know, we have a
Speaker 8: lot to do, a lot to share. We paid the
Speaker 8: heavy price, and I have to mention the price we paid.
Speaker 8: More than one thousandthologists died since October seventh.
Speaker 7: It's painful for us, but we are strong and we prevailed.
Speaker 3: And I'm also wondering about whether there have been any
Speaker 3: discussions to restart talks to normalize relations between Israel and
Speaker 3: some of your other Middle East neighbors, and thinking of
Speaker 3: Saudi Arabia, where that was clearly a discussion before this.
Speaker 1: But others as well.
Speaker 3: Is that already on the table or is that a
Speaker 3: long ways off?
Speaker 7: We definitely expected to happen.
Speaker 8: You know, first we have to stabilize the situation, to
Speaker 8: make sure that actually Hamas is out of the game.
Speaker 7: You know, it's not a given. You know, we have
Speaker 7: to make sure that out of the game.
Speaker 8: And I think it will be the interest of Israel,
Speaker 8: the US, and many moderatest countries.
Speaker 7: To move forward.
Speaker 8: And it's important to mention that, you know, the Abraham
Speaker 8: Coos countries sticks to the peace agreement we signed with them,
Speaker 8: even though it was challenging and difficult for them during
Speaker 8: the war, and we appreciate that.
Speaker 5: Are you concerned with a fragile relationship with Egypt? Earlier
Speaker 5: in September, we had President LCCI talk about the fact
Speaker 5: that Israel was a quote enemy, and we've seen a
Speaker 5: lot of acrimonious statements and individuals saying it's almost the
Speaker 5: closest these two countries have been to war since nineteen
Speaker 5: seventy nine.
Speaker 8: Now we have a stronger bond with the Egyptian government.
Speaker 8: You know, we know that during the war it wasn't
Speaker 8: the domestic politics some of those leaders and they had
Speaker 8: to play the game. But we collaborate with Egyptians and
Speaker 8: I think now we should aim to expending peace.
Speaker 7: That's our goal in the future.
Speaker 5: Well, when it comes to Egypt and Cutter and United
Speaker 5: Arab Emirates, which you already have a peace agreement with,
Speaker 5: how do you see these countries working with Israel when
Speaker 5: it comes to face two and three of rebuilding Gaza, Well.
Speaker 7: I think it will be more than that.
Speaker 8: It will require the involvement of more countries and I
Speaker 8: cannot name name it, but we are talking with the
Speaker 8: major players that are willing to contribute to the efforts
Speaker 8: for the reconstruction of Gada. And it's not only physical reconstruction.
Speaker 8: We have to build the environment, a society that will
Speaker 8: not glorify terrorism. You know, for twenty years Hamas took
Speaker 8: the people of Gada hostage, and I think now Dava
Speaker 8: the option to build a better future and have to
Speaker 8: be responsible about it and not allow radicals to take
Speaker 8: over Gada again.
Speaker 9: Stay with us.
Speaker 2: More plan Taxavidance coming up after this.
Speaker 3: Turning back to the broader markets, the stocks trade near
Speaker 3: all time highs. Richard Bernstein of RB Advisors, writing, markets
Speaker 3: are ins some sort of speculative fervor. It is very
Speaker 3: obvious that investors are not risk averse.
Speaker 1: Richard joins us now is probably an understatement.
Speaker 3: Richard, I am curious whether you think it's gone too
Speaker 3: far or do you get on the train and follow momentum.
Speaker 10: So, Lisa, good morning, It's great to be with you.
Speaker 10: I think the problem with being a momentum investor is
Speaker 10: never trying to figure out should we get on the train.
Speaker 10: I mean, that's easy. You can see what's going on
Speaker 10: the moment. The key to momentum investing is knowing when
Speaker 10: to sell and when to get off right, Like who
Speaker 10: sold technology stocks at the peak of the bubble in
Speaker 10: March of two thousand. That would be the perfect momentum investor.
Speaker 10: And we know from history that people are very bad sellers.
Speaker 10: And so I think what the speculative environment really shows
Speaker 10: is that the most important part of a portfolio right
Speaker 10: now is diversification. You may want to play momentum, but
Speaker 10: don't overplay momentum.
Speaker 3: To just underscore what you're saying are you selling tech
Speaker 3: stocks right now?
Speaker 10: So we have been famous or infamous for not overweighting them,
Speaker 10: So I don't think we have to sell anything because
Speaker 10: we're not overweight. I think what we've done, though, what
Speaker 10: we've done very effectively in our portfolios is find other
Speaker 10: areas that people are ignoring that are performing quite well,
Speaker 10: you know, whether that be non US quality, whether that
Speaker 10: be dividends, whether that be small and MidCap industrials. I
Speaker 10: think there's lots of different things that have been performing
Speaker 10: well that are way off of people's radars.
Speaker 5: But when it comes to historically how it's difficult for
Speaker 5: individuals to sell during all of this momentum, what are
Speaker 5: you looking at that would give you the signs that
Speaker 5: potentially this could be the meltdown?
Speaker 10: So I think, you know, like, if you want to
Speaker 10: look for a risk, I think the risk to look
Speaker 10: for right now is can the FED cut rates as
Speaker 10: much as the market is presently anticipating and as much
Speaker 10: as investors are presently anticipating. And the reason I say
Speaker 10: that is that people forget that the FED is the
Speaker 10: central bank, and that is the keyword bank, and that
Speaker 10: the way they impart monetary policy is through the banking system.
Speaker 10: So if the banking system is hesitant to lend, then
Speaker 10: the FED cuts rates to try and make the cost
Speaker 10: of funding cheaper for banks to encourage lending. If the
Speaker 10: banking sector is lending too much, then the economy is overheating.
Speaker 10: The FED will raise interest rates to try to increase
Speaker 10: the cost of funding to slow down lending, which in
Speaker 10: turn will slow the economy. So the question we should
Speaker 10: all be asking right now, and the question the FED
Speaker 10: should be asking, is where is the hiccup in the
Speaker 10: financial sector that is constraining lending, which is constraining growth.
Speaker 10: I think that's very hard to find right now.
Speaker 5: Well, if there isn't one, then do you think the
Speaker 5: FED should be cutting out all the rest of the year.
Speaker 10: I I don't. Look, I can't tell you whether they
Speaker 10: should or they shouldn't. It sound like JPL's calling me
Speaker 10: up and asking me, rich should I cut rates? So
Speaker 10: what I think they should do maybe irrelevant. I think
Speaker 10: what's important is for investors to think about that risk
Speaker 10: and to think about what the comes could be. And
Speaker 10: what I was saying before, you know that you may
Speaker 10: want to be better diversified than you were a month
Speaker 10: ago or two months ago, or certainly six months ago.
Speaker 10: And I think that's the way to think about what's
Speaker 10: going on here. I think it's going to be more
Speaker 10: difficult for the FED to cut rates than they think
Speaker 10: right now, and certainly more difficult than the markets think
Speaker 10: right now.
Speaker 1: You've been in the market a long time, Richard.
Speaker 3: One thing that's been very interesting to me is how
Speaker 3: much the idea of diversification has shifted over the past
Speaker 3: five years. And I just wonder when you say diversify,
Speaker 3: how much that has a different meaning today than say,
Speaker 3: the sixty forty portfolio of your Oh.
Speaker 10: Absolutely, And I think part of that, Lisa, is the
Speaker 10: sixty percent portfolio. You know, your stock portfolio has turned
Speaker 10: out to be like seven or ten or twenty stocks,
Speaker 10: And so how much diversification do you even get just
Speaker 10: by going sixty forty. I think that's right. I think
Speaker 10: one has to look at should be looking at things
Speaker 10: like commodities, should be looking at various alternative investments, with
Speaker 10: the reasoning that alts is not a real category, like
Speaker 10: it really likes to say alternatives. That's kind of silly,
Speaker 10: that's like kind of saying I want to be invested.
Speaker 10: There are different kinds of waults that have different goals
Speaker 10: and different things like that, and I think it's worth
Speaker 10: looking at some of that. But I don't think, you know,
Speaker 10: one should be saying there's only seven growth stories in
Speaker 10: the world. That seems silly to me.
Speaker 1: Do you think that there is a story to play?
Speaker 3: And I keep thinking about what Almos Hokstein had to say,
Speaker 3: former White House senior advisor as well as a player
Speaker 3: now in the space of infrastructure with energy and AI.
Speaker 3: I just wonder how much the market is fully appreciated
Speaker 3: how much investment has to go into infrastructure and the
Speaker 3: real economy. Certainly that is a very hot area in
Speaker 3: private markets. Do you see ways to get into that
Speaker 3: kind of idea in public markets or beyond that haven't
Speaker 3: fully been tapped.
Speaker 10: So, Lisa, I think the best long term investment story
Speaker 10: is all about small and MidCap industrial company these and
Speaker 10: the reindustrialization of the United States and the infrastructure that
Speaker 10: has to go along with that. You know, one of
Speaker 10: the things that people have talked a lot about is
Speaker 10: the price of electricity. And I don't know if you're aware,
Speaker 10: but in the last five years we have had the
Speaker 10: biggest run up in electricity prices in modern American history.
Speaker 10: They're up nationwide by like eighty percent in the last
Speaker 10: five years. This has become for those of you who
Speaker 10: live in New York, New Jersey, you know, this has
Speaker 10: become a big issue in the New Jersey gogmunuatorial election.
Speaker 10: They're talking about electricity prices. Well, you know, the thing
Speaker 10: that people always forget is that bubbles misallocate capital and
Speaker 10: in doing so, they are inflationary. And I think electricity
Speaker 10: prices are a classic one. Where we're building out data
Speaker 10: centers before the infrastructure is built. That's like building factories
Speaker 10: before the roads are built to move the stuff in
Speaker 10: and out from the factory. It's silly to think that way.
Speaker 10: And here's a good way to think about this misallocation
Speaker 10: of capital that's going on the economy that is so inflationary.
Speaker 10: Imagine if all the capital that was going into cryptocurrencies
Speaker 10: in dead was invested in the US electric grid. Would
Speaker 10: we be having electricity prices up by the most in
Speaker 10: modern American history? I don't think so.
Speaker 3: So are you buying electric grid related stocks? Is that
Speaker 3: sort of what you're saying, That's that's where it needs
Speaker 3: to go.
Speaker 10: Well, it has been that has been a sub theme
Speaker 10: of ours for like a decade. There's nothing new for
Speaker 10: those of us at RBA. I mean it is, you know,
Speaker 10: the notion of small and MidCap industrial companies includes you know,
Speaker 10: things like the grid, includes all this kind of you know,
Speaker 10: industrial infrastructure type stuff. So you know, you always say
Speaker 10: to people, imagine if you go to a cocktail party
Speaker 10: and you didn't talk about in Nvidia, but you tried
Speaker 10: to get people interested in carbon wire, I think you'd
Speaker 10: be the skunk at the cocktail party.
Speaker 3: It would go back to the graduate plastics really enjoyed that, right,
Speaker 3: this copper wire. I am just curious going forward how
Speaker 3: much signal you take from the likes of Delta and
Speaker 3: PEPSI earnings coming out better than expected. Delta in particular
Speaker 3: talking about how travel is accelerated, not just the front
Speaker 3: of the cabin but more broadly even in the economy sections.
Speaker 3: How much do you take that as the economic data
Speaker 3: to hint your heat on and sort of bet on,
Speaker 3: even if you're diversified, the ongoing momentum in this economy.
Speaker 10: Oh well, there's there's no question Lisa about is the
Speaker 10: economy healthy?
Speaker 5: Right?
Speaker 10: I mean the Atlanta FEDS GDP now is tracking if
Speaker 10: I'm not mistaken, and roughly about three and a half
Speaker 10: to four percent. I mean that's pretty good growth by
Speaker 10: US standards. I would say, so there should be no
Speaker 10: doubt that the economy is healthy. I mean, we could
Speaker 10: argue about whether that's evenly divided among the economy and
Speaker 10: how that's you know, what parts of the economy are healthy,
Speaker 10: but the general economy is actually quite healthy. And you know,
Speaker 10: if you think about nominal growth, you think about the
Speaker 10: three and a half to four percent real growth, plus
Speaker 10: you think about we could argue, let's say three to
Speaker 10: four percent inflation, depending on how you're measuring it. You know,
Speaker 10: we're talking, you know, six to seven percent nominal growth.
Speaker 10: I mean that's that's a pretty strong environment. And that's
Speaker 10: one of the reasons why I don't think people I
Speaker 10: think people are overestimating the ability to FED to come
Speaker 10: rates going forward. Seven percent nominal growth, I mean, that's
Speaker 10: pretty strong growth.
Speaker 2: Stay with us mulblindex. Savannah's coming up off to this.
Speaker 3: US Treasury Secretary Scott Beston has finished interviewing eleven candidates
Speaker 3: to replace FED chair J Powell. According to The Financial Times,
Speaker 3: candidates were grilled for up to two hours on their
Speaker 3: views on interest rates and FED reforms, and perhaps we
Speaker 3: will actually get a couple of the final candidates who
Speaker 3: can make their debut in discussions and in the race.
Speaker 3: Sticking with the Federal Reserve FED minutes showing caution to
Speaker 3: ease driven by inflation concerns, Vincent Reinhardt B and Y
Speaker 3: Investments writing this. With the federal government shut down, less
Speaker 3: data are available, which we think makes a data dependent
Speaker 3: FED more likely to ease.
Speaker 1: Vincent joins us, Now, wonderful to see you. It's been
Speaker 1: too long.
Speaker 3: I want to start there this idea that actually the
Speaker 3: meeting minutes showed what the dots showed, which is a
Speaker 3: huge dispersion of opinions and a lot of people who
Speaker 3: were reluctant to ease again heading into the year end.
Speaker 3: Why does the government shut down change your calculus?
Speaker 11: So what they did in September lays the tracks down
Speaker 11: for what they do in October.
Speaker 9: And what did they do in September?
Speaker 11: They eased, but they didn't strongly signal policy action, and
Speaker 11: they emphasized data dependence, and then they let everyone express
Speaker 11: their own view in the summary of economic projections. Makes
Speaker 11: it really hard to send a coherent message when you
Speaker 11: let everyone address their own view of the appropriate policy rate.
Speaker 11: But what was important about that is they were leaning
Speaker 11: toward policy ease and said they were data dependent. What
Speaker 11: that means is the data has to stop them, i e.
Speaker 11: Do you get evidence that disproves the case that it's
Speaker 11: appropriate to ease. That's what reconciled the whole group to
Speaker 11: the policy choice. Guess what, they don't have data that
Speaker 11: can disprove the case.
Speaker 3: We just got data about six minutes ago from Delta.
Speaker 1: They came out with their earnings and.
Speaker 3: The expectation that actually there's going to be a reacceleration
Speaker 3: into the end of this year with consumer demand not
Speaker 3: just at the front of the cabin but throughout the
Speaker 3: entire cabin coming back. I just wonder, is that data
Speaker 3: that actually should be relied on more given the fact
Speaker 3: that we aren't getting official data and the data that have.
Speaker 1: Been released by the United States have been.
Speaker 11: Mixed, so they'll have to rely more on private data.
Speaker 11: They're already scraping lots of big data sources. There's lots
Speaker 11: of individual vendors, and don't forget it's the federal Reserve system,
Speaker 11: which means that you have all that staff at Reserve
Speaker 11: Bank talking to business people all over the country in
Speaker 11: their summarizing that in their page book. So they have
Speaker 11: a lot of sources of information. They don't have an
Speaker 11: officialture on it. But that has a couple consequences. One
Speaker 11: is they're not flying blind. However, we are more in
Speaker 11: the dark about how they're flying because they're using private
Speaker 11: information that won't be conveyed to us.
Speaker 5: Okay, but you were at the FED for what almost
Speaker 5: a decade?
Speaker 9: It's actually a quarter century.
Speaker 5: But okay, well tell us what do you think they're
Speaker 5: looking at? That's not the gold standard economic data that
Speaker 5: comes out of BLS.
Speaker 11: So what I can tell here is you're filling the
Speaker 11: entire media block with the news that is out, and
Speaker 11: that's earnings reports, and so they are looking at whatever
Speaker 11: they got, and what do they have. They have a
Speaker 11: lot more than they had previously, Lots of information from
Speaker 11: credit card processors, lots of information from the big block
Speaker 11: stores that have up to the minute data on pricing
Speaker 11: and sales. They'll get credit reports, they'll get the anecdotal reports.
Speaker 9: And what do we notice in COVID there was a.
Speaker 11: Whole blossoming of new indicators of high frequency demand. What
Speaker 11: was that You apply a lot of resources with a
Speaker 11: lot of information.
Speaker 9: They're going to do their best and that's what they're doing.
Speaker 6: Now.
Speaker 5: There's not a ton of debate about what the FED
Speaker 5: will do the rest of the year. How are you
Speaker 5: thinking about next year? Especially as Lisa was just mentioning,
Speaker 5: the treasure Secretary just wrapped up his interviews for who's
Speaker 5: going to lead the FED?
Speaker 9: Completely different. This year is easy.
Speaker 11: This year is let's agree on a macro forecast. Let's
Speaker 11: think how has the FED previously acted, what is an
Speaker 11: appropriate policy rule? And then just plug your numbers in
Speaker 11: and that will get you probably another half point of
Speaker 11: easing in twenty twenty five. It's a closer call toward
Speaker 11: the end of the year exactly, because maybe inflation will
Speaker 11: come up, maybe the economy won't soften as much as
Speaker 11: they're worried because they're easing. As for risk management, they're
Speaker 11: buying insurance by the end of the year, they may
Speaker 11: not need it next year. Completely different. Why because the
Speaker 11: Federal Reserve system is set up so that the leadership
Speaker 11: of the FED turns over with the political process, So
Speaker 11: the administration will get new slots and the Federal Reserve system.
Speaker 11: The whole is set up to give the board pre
Speaker 11: eminent role in monetary policy, so the White House is
Speaker 11: going to use that.
Speaker 3: As an economist watching this, does it worry you that
Speaker 3: you've seen such a devaluation of the dollar and that
Speaker 3: you've seen gold increasingly take hold as a haven type
Speaker 3: of instrument.
Speaker 11: So I have a Bloomberg worksheet right on my desk,
Speaker 11: which is independence Watch. What do you look for if
Speaker 11: there were concerns about the future of central bank monitor
Speaker 11: policy making in the United States? You would look at
Speaker 11: non dollar assets, so you would look at gold, You
Speaker 11: look at the price of some crypto.
Speaker 9: You would also look.
Speaker 11: As hard as you can at the whole term structure
Speaker 11: of US interest rates.
Speaker 9: A little worrying that, yes.
Speaker 11: The very little volatility in the bond market ten years
Speaker 11: has been flatlining, but the ten year ten year forward
Speaker 11: is drifted up, and some measures of inflation compensation have
Speaker 11: come up. Thus far, not a lot of warning flores
Speaker 11: flares and markets about worries about central bank independence, but
Speaker 11: we think that's going to come.
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