1 00:00:03,400 --> 00:00:08,800 Speaker 1: This is Bloomberg surveillance. MEGA is not as exceptionally more traditionally, 2 00:00:08,800 --> 00:00:12,720 Speaker 1: where MEGA was exceptional is that markets were walking exceptionally well. 3 00:00:12,800 --> 00:00:15,000 Speaker 1: The problem is the FETE tells us is data dependent. 4 00:00:15,240 --> 00:00:17,439 Speaker 1: We no longer have a framework in which to interpret 5 00:00:17,480 --> 00:00:20,239 Speaker 1: the data. I worry much less about the banks in 6 00:00:20,280 --> 00:00:23,400 Speaker 1: the US. I worry about where risk has more than migrated, 7 00:00:23,520 --> 00:00:26,560 Speaker 1: and it's migrated and most away from the banks. Bloomberg 8 00:00:26,640 --> 00:00:30,360 Speaker 1: Surveillance your link to the world of economics, finance, and 9 00:00:30,480 --> 00:00:34,280 Speaker 1: investment on Bloomberg Radio. Good morning everyone, Michael McKee and 10 00:00:34,280 --> 00:00:37,680 Speaker 1: Tom Keane. We welcome you to another hour, a midweek 11 00:00:37,760 --> 00:00:42,040 Speaker 1: Wednesday hour of Bloomberg Surveillance. Oil South in the last 12 00:00:42,080 --> 00:00:44,840 Speaker 1: number of minutes of twenty seven handle right now seven 13 00:00:44,920 --> 00:00:47,880 Speaker 1: Other than that, a churn to the post yelling market. 14 00:00:47,920 --> 00:00:50,920 Speaker 1: What do we mean the embargoed comments released of course 15 00:00:50,920 --> 00:00:55,440 Speaker 1: in one hour her testimony to the Senate, the Representative 16 00:00:55,480 --> 00:00:59,880 Speaker 1: and Chairman from Texas and the Maxine Waters of CALLI 17 00:01:00,040 --> 00:01:03,520 Speaker 1: when you're one of the best interviews we ever did, ever, 18 00:01:03,640 --> 00:01:07,480 Speaker 1: ever ever, I'm Bloomberg on the economy. Bloomberg Surveillance was 19 00:01:07,560 --> 00:01:11,319 Speaker 1: the Maxine Waters who woke up at like three am. 20 00:01:11,400 --> 00:01:14,960 Speaker 1: Wherever she was, Michael McKee, she was a trooper to 21 00:01:15,000 --> 00:01:18,000 Speaker 1: wake up to talk to us about the experience of 22 00:01:18,040 --> 00:01:21,800 Speaker 1: her district in Los Angeles. The four X Brief it's 23 00:01:21,800 --> 00:01:24,400 Speaker 1: brought to you by Interactive Broker's winner of f X 24 00:01:24,440 --> 00:01:27,280 Speaker 1: Weeks two thousand and fifteen award for the best Retail 25 00:01:27,319 --> 00:01:30,400 Speaker 1: for X trading platform visit ib at I b k 26 00:01:30,680 --> 00:01:33,600 Speaker 1: R dot com Slash four x. It's great to talk 27 00:01:33,640 --> 00:01:37,120 Speaker 1: about Interactive Brokers today. After talking with Mr Sinch and 28 00:01:37,240 --> 00:01:41,440 Speaker 1: Mr Chandler about for in exchange, again stuns. It's the 29 00:01:41,480 --> 00:01:45,200 Speaker 1: only word that works. I did the chart of b 30 00:01:45,360 --> 00:01:47,520 Speaker 1: o J and then what's happened after b o J. 31 00:01:48,200 --> 00:01:53,360 Speaker 1: It's breathtaking. One five stronger Japanese yen today, no real 32 00:01:53,440 --> 00:01:57,480 Speaker 1: test of one thirteen this morning? Um move the decimal 33 00:01:57,640 --> 00:02:01,240 Speaker 1: the euro one point one three? Yes today, wont six 34 00:02:01,280 --> 00:02:07,720 Speaker 1: now sterling one? Excuse me? And I'm gonna leave it there. 35 00:02:07,720 --> 00:02:10,120 Speaker 1: I mean, you know the hydrocarbon there all everything's journey, 36 00:02:10,240 --> 00:02:13,040 Speaker 1: China hasn't moved and then be six point five seven 37 00:02:13,080 --> 00:02:18,760 Speaker 1: you one per dollar. It's been exciting the last couple 38 00:02:18,760 --> 00:02:23,440 Speaker 1: of days with a remount today is it everything? All 39 00:02:23,480 --> 00:02:27,040 Speaker 1: boats rising David Wilson or is there some nuance here today? Well, 40 00:02:27,040 --> 00:02:28,800 Speaker 1: it's not all boats, but I'll tell you it's the 41 00:02:28,840 --> 00:02:32,200 Speaker 1: financial boats for sure, and we've certainly seen those stocks 42 00:02:32,200 --> 00:02:34,320 Speaker 1: take a hit the last few days, along with their 43 00:02:34,360 --> 00:02:38,519 Speaker 1: European and Japan. How's Deutsche Bank doing? You would ask 44 00:02:38,600 --> 00:02:42,080 Speaker 1: me that. Um, let me just take a quick look overseas, folks. 45 00:02:42,080 --> 00:02:45,200 Speaker 1: I get tears in my eyes watching David Wilson used 46 00:02:45,240 --> 00:02:47,960 Speaker 1: the Bloomberg he he, there's a museum that we have 47 00:02:48,120 --> 00:02:51,360 Speaker 1: here and as a picture of David Wilson, what thirty 48 00:02:51,400 --> 00:02:57,440 Speaker 1: eight years ago? The employees thirty eight maybe twenty four employees, 49 00:02:57,480 --> 00:03:00,240 Speaker 1: but anyways, not twenty four years ago. Anyway. Deutscha backs 50 00:03:00,320 --> 00:03:03,239 Speaker 1: up eleven percent in German trading. So you know, look 51 00:03:03,240 --> 00:03:05,680 Speaker 1: at the US. You've got Bank of America two percent, 52 00:03:05,760 --> 00:03:08,120 Speaker 1: City Group up two and a half percent, JBM, Morgan 53 00:03:08,200 --> 00:03:10,959 Speaker 1: Chase up two percent, Wells Fargo up one and a 54 00:03:11,040 --> 00:03:13,919 Speaker 1: half percent. And then you have the media companies. They 55 00:03:13,960 --> 00:03:18,800 Speaker 1: have issues with loss of cable subscribers and increased costs 56 00:03:18,840 --> 00:03:22,400 Speaker 1: for sports programming that hurt Walt Disney and their latest 57 00:03:22,680 --> 00:03:26,520 Speaker 1: fiscal quarter shares it down five percent. In early trading. 58 00:03:26,919 --> 00:03:30,600 Speaker 1: Similar story of Time Warner and that stocks down eight 59 00:03:30,600 --> 00:03:33,320 Speaker 1: and a half percent. On top of that, Warner Brothers 60 00:03:33,400 --> 00:03:36,800 Speaker 1: the movie studio didn't deliver a box office hit as 61 00:03:37,120 --> 00:03:42,440 Speaker 1: it did in the fourth quarter of twenty fourteen. Solar 62 00:03:42,480 --> 00:03:46,400 Speaker 1: City Elon mus rooftop solar company that's stock down thirty 63 00:03:46,400 --> 00:03:49,800 Speaker 1: one percent. Company failed to meet its fourth quarter forecast 64 00:03:49,840 --> 00:03:55,160 Speaker 1: for installations, and it's gonna reduced the number of panels 65 00:03:55,240 --> 00:03:57,920 Speaker 1: or at least the volume of electricity they produced, by 66 00:03:58,000 --> 00:04:00,960 Speaker 1: thirty four percent this quarter as the company seeks to 67 00:04:01,040 --> 00:04:03,920 Speaker 1: start generating cash. And you're seeing declines among other solar 68 00:04:03,960 --> 00:04:06,840 Speaker 1: companies as well. Son Edison down five and a half percent, 69 00:04:06,920 --> 00:04:10,400 Speaker 1: sun Power down seven percent. Are these blue chip stocks? 70 00:04:10,480 --> 00:04:13,880 Speaker 1: The answers, No, they're like one idea growthy companies, right, 71 00:04:14,720 --> 00:04:17,520 Speaker 1: something like that. But I'll tell you though, it's interesting 72 00:04:17,560 --> 00:04:20,520 Speaker 1: that on the other hand, you are seeing coal producers 73 00:04:20,520 --> 00:04:24,039 Speaker 1: who are really taking a hit rally in today's trading 74 00:04:24,560 --> 00:04:27,560 Speaker 1: after the U. S. Supreme Court blocked the federal government 75 00:04:27,560 --> 00:04:30,400 Speaker 1: from carrying out President Barack Obama's plans to cut power 76 00:04:30,440 --> 00:04:33,839 Speaker 1: plant emissions. Pebody the aerage, you have twenty seven percent 77 00:04:33,960 --> 00:04:37,600 Speaker 1: console energy of nine percent clips natural resources of five 78 00:04:37,640 --> 00:04:40,280 Speaker 1: and a half percent. You've also got Staples up three 79 00:04:40,320 --> 00:04:42,840 Speaker 1: and a half percent. The office supply retailers proposed to 80 00:04:42,960 --> 00:04:47,320 Speaker 1: takeover of rival Office Depot received clearance from European regulators. 81 00:04:47,360 --> 00:04:51,560 Speaker 1: The six point three billion dollar deals still requires US approval, 82 00:04:51,680 --> 00:04:54,320 Speaker 1: and the Federal Trade Commission has suited to block the deal. Nonetheless, 83 00:04:54,360 --> 00:04:56,760 Speaker 1: Staples hire also Office Depot, which is up two and 84 00:04:56,760 --> 00:04:59,920 Speaker 1: a half percent. One more for you. My Technologies up 85 00:04:59,920 --> 00:05:02,720 Speaker 1: to sevent the owner of a network that delivers internet 86 00:05:02,800 --> 00:05:05,599 Speaker 1: video posts the fourth quarter earnings and revenue the bead estimate. 87 00:05:05,880 --> 00:05:07,400 Speaker 1: They said they would buy back as much as a 88 00:05:07,440 --> 00:05:11,320 Speaker 1: billion dollars of stock and reorganize their business into two units. 89 00:05:12,400 --> 00:05:15,680 Speaker 1: Is that it? That's enough? Okay, Michael. We have an 90 00:05:15,720 --> 00:05:20,520 Speaker 1: interesting gust. I mean, let's say the least looking out 91 00:05:20,720 --> 00:05:26,760 Speaker 1: forward and into the future, when Walter Isaacson is trying 92 00:05:26,760 --> 00:05:28,920 Speaker 1: to figure out how we get out there with our 93 00:05:29,040 --> 00:05:33,400 Speaker 1: children in a world of robotics and globalization, and it's 94 00:05:33,400 --> 00:05:37,200 Speaker 1: a thoughtful book. Bring him in. Alec Ross is the author. 95 00:05:37,240 --> 00:05:41,279 Speaker 1: He has served in a number of uh different posts 96 00:05:41,320 --> 00:05:44,599 Speaker 1: in the US government, four years as Senior Advisor for 97 00:05:44,680 --> 00:05:49,840 Speaker 1: Innovation to the Secretary of State currently at Johns Hopkins University. 98 00:05:50,120 --> 00:05:52,520 Speaker 1: The book is The Industries of the Future, and I 99 00:05:52,520 --> 00:05:56,680 Speaker 1: think basically we know what those are. Uh. He looks 100 00:05:56,720 --> 00:06:00,480 Speaker 1: at what those industries, I mean obviously rob aducts and 101 00:06:00,600 --> 00:06:02,800 Speaker 1: data and all that, and how they are going to 102 00:06:02,880 --> 00:06:06,240 Speaker 1: affect us going forward. Let me get a sort of 103 00:06:06,320 --> 00:06:11,680 Speaker 1: underlying worldview from you about this. Uh. Is this time 104 00:06:11,720 --> 00:06:15,640 Speaker 1: going to be different because of the technologies we're developing 105 00:06:15,760 --> 00:06:19,080 Speaker 1: or is this a question of adapting to the new 106 00:06:19,200 --> 00:06:22,839 Speaker 1: technologies in the way we have in the past. Well, 107 00:06:22,880 --> 00:06:25,479 Speaker 1: I try to take as optimistic a view of this 108 00:06:25,600 --> 00:06:29,760 Speaker 1: is possible, optimistic but realistic. I think that as as 109 00:06:29,839 --> 00:06:32,160 Speaker 1: much as our world has changed over the last ten 110 00:06:32,240 --> 00:06:34,800 Speaker 1: to twenty years, I think that the pace of change 111 00:06:34,839 --> 00:06:37,800 Speaker 1: is only going to clicken. I think that in very 112 00:06:37,920 --> 00:06:41,600 Speaker 1: high cost labor markets like the United States, I think 113 00:06:41,640 --> 00:06:45,320 Speaker 1: the need to adapt is only going to grow stronger. 114 00:06:45,560 --> 00:06:48,800 Speaker 1: It's not the strongest to survive or the most intelligent, 115 00:06:49,120 --> 00:06:53,800 Speaker 1: but those most adaptable to change. Who it is going 116 00:06:53,839 --> 00:06:56,840 Speaker 1: to be most adaptable to change? Is there a characteristic 117 00:06:56,880 --> 00:07:00,640 Speaker 1: of a government or a business, Well, you know, it's 118 00:07:00,640 --> 00:07:03,240 Speaker 1: that's a great question. I think that there are examples 119 00:07:03,279 --> 00:07:05,919 Speaker 1: of governments around the world, some in Asia, some in 120 00:07:05,960 --> 00:07:11,200 Speaker 1: Scandinavia that has centralized industrial planning, even China with Beijing, 121 00:07:11,600 --> 00:07:14,240 Speaker 1: where if they make a strategic assessment about where the 122 00:07:14,280 --> 00:07:16,600 Speaker 1: world is going over the next ten or fifteen years, 123 00:07:16,880 --> 00:07:21,000 Speaker 1: they're able to to turn the battleship and sort of 124 00:07:21,040 --> 00:07:24,920 Speaker 1: allocate resources across their economy to be able to pivot. 125 00:07:25,240 --> 00:07:27,440 Speaker 1: We in the United States we are a more purely 126 00:07:27,600 --> 00:07:31,280 Speaker 1: capitalist society, and thank goodness for that. We don't want 127 00:07:31,640 --> 00:07:35,080 Speaker 1: our business leaders taking instructions from Washington. So to the 128 00:07:35,080 --> 00:07:38,160 Speaker 1: extens that there is, to the extensive, it's gonna be adaptation. 129 00:07:38,480 --> 00:07:40,680 Speaker 1: It's going to have to come first at the company level, 130 00:07:40,720 --> 00:07:42,680 Speaker 1: and then we can just quote that government tries to 131 00:07:42,800 --> 00:07:46,200 Speaker 1: keep up. You have the absolutely coolest background coming out 132 00:07:46,240 --> 00:07:50,120 Speaker 1: of Northwestern University, Robert Gordon's Northwestern University, and course he's 133 00:07:50,120 --> 00:07:53,560 Speaker 1: a talk of economics now about the American aspiration is 134 00:07:53,680 --> 00:07:57,440 Speaker 1: over and our engineerings over, etcetera, etcetera. But what I love, 135 00:07:57,520 --> 00:07:59,880 Speaker 1: Elec about what you're doing the technology is your a 136 00:08:00,120 --> 00:08:04,320 Speaker 1: story major, which is just absolutely totally cool. When within 137 00:08:04,480 --> 00:08:07,040 Speaker 1: what you see in the angst that all of our 138 00:08:07,120 --> 00:08:10,800 Speaker 1: listeners have. When you look at the American industries of 139 00:08:10,880 --> 00:08:14,200 Speaker 1: the future. Are they going to benefit Americans or are 140 00:08:14,280 --> 00:08:19,120 Speaker 1: they gonna benefit a technological plutocracy. They are going to 141 00:08:19,200 --> 00:08:23,840 Speaker 1: benefit some Americans, but it's not gonna be like industrial 142 00:08:23,960 --> 00:08:26,840 Speaker 1: age America. You know, I I wish I were more 143 00:08:26,920 --> 00:08:31,480 Speaker 1: optimistic here. On the one hand, on optimistic macroeconomically, the 144 00:08:31,600 --> 00:08:34,920 Speaker 1: United States will be the headquarters. The United States will 145 00:08:34,920 --> 00:08:37,400 Speaker 1: be the headquarters for a lot of the industries in 146 00:08:37,480 --> 00:08:40,040 Speaker 1: the future. The problem is that they aren't going to 147 00:08:40,200 --> 00:08:45,280 Speaker 1: produce massive middle classes and very large working So then okay, 148 00:08:45,320 --> 00:08:47,640 Speaker 1: then what you do so well is then you dovetail 149 00:08:47,679 --> 00:08:50,040 Speaker 1: that into public policy, and you know, you work in 150 00:08:50,080 --> 00:08:52,319 Speaker 1: the state department and that let's say you get the 151 00:08:52,360 --> 00:08:55,880 Speaker 1: presidential candidate you want to win, you go into government 152 00:08:56,160 --> 00:08:59,400 Speaker 1: and you have to affect a policy for the Americans 153 00:08:59,480 --> 00:09:02,839 Speaker 1: you just talked about. All of our audience wants to 154 00:09:02,920 --> 00:09:06,559 Speaker 1: know what's that policy. Well, I think a lot of 155 00:09:06,600 --> 00:09:09,800 Speaker 1: it has to do with education. So this isn't sexy stuff, 156 00:09:10,240 --> 00:09:15,000 Speaker 1: but vocational education and community college serve segments of the 157 00:09:15,040 --> 00:09:19,280 Speaker 1: most vulnerable parts of America in terms of millions of 158 00:09:19,320 --> 00:09:23,440 Speaker 1: Americans go through vocational education and community colleges. But they 159 00:09:23,480 --> 00:09:27,440 Speaker 1: are largely unchanged since like the nineteen eighties and there 160 00:09:27,679 --> 00:09:30,400 Speaker 1: and the kind of education you get going through there 161 00:09:30,520 --> 00:09:33,840 Speaker 1: is not necessarily oriented towards the industries of the future. 162 00:09:33,960 --> 00:09:36,280 Speaker 1: So the policy I would do is, I would change 163 00:09:36,400 --> 00:09:39,960 Speaker 1: all of the financing that comes from the federal government 164 00:09:40,040 --> 00:09:44,120 Speaker 1: into programs like this that hit Middle America and make 165 00:09:44,160 --> 00:09:49,079 Speaker 1: sure that they are programmed towards programs and certifications, and 166 00:09:49,200 --> 00:09:52,440 Speaker 1: that there are incentives so that we are training today's 167 00:09:52,559 --> 00:09:57,520 Speaker 1: working class to compete and succeed into Marrow's economy. It's 168 00:09:57,600 --> 00:10:00,079 Speaker 1: important book, alec Ross, thank you so much, gives to 169 00:10:00,160 --> 00:10:01,880 Speaker 1: the future. If you're in New York, we gotta get 170 00:10:01,920 --> 00:10:05,640 Speaker 1: you back on here again. Eric Schmidt, I'll come on, Mike, 171 00:10:05,720 --> 00:10:08,960 Speaker 1: this is killing me. Eric's Alec is killing me. He's 172 00:10:09,000 --> 00:10:14,800 Speaker 1: got Eric Schmidt, executive chairman, Comma alphabet. Okay, I'm sorry, 173 00:10:14,880 --> 00:10:17,400 Speaker 1: Alec it's Google. It's not Alphabet. I don't care what 174 00:10:17,640 --> 00:10:20,599 Speaker 1: this is. I don't I'm gonna you know. It's killing me. 175 00:10:20,840 --> 00:10:24,559 Speaker 1: That we had the information age, and what Schmidt talks about, 176 00:10:24,600 --> 00:10:28,119 Speaker 1: which alec Ross absolutely nails, is we're growing more chaotic, 177 00:10:28,600 --> 00:10:31,360 Speaker 1: which Mike goes wreck right back to the political system. 178 00:10:31,440 --> 00:10:34,000 Speaker 1: And Mr Trump and Mr Sanders. Well, heck, if you 179 00:10:34,040 --> 00:10:36,719 Speaker 1: don't even know the name of the biggest company you know, 180 00:10:37,200 --> 00:10:39,160 Speaker 1: I know what you gonna do there there it is 181 00:10:39,240 --> 00:10:43,320 Speaker 1: the industries of the future. Alec Ross, a very thoughtful 182 00:10:43,440 --> 00:10:47,520 Speaker 1: cry for a change in America. Futures deteriorate up ten 183 00:10:52,400 --> 00:10:54,280 Speaker 1: Nintana wall Street. Let's bring in blcam Bar with the 184 00:10:54,360 --> 00:10:57,280 Speaker 1: latest World of Nationalie Lives. Mike Tom, thank you very much. 185 00:10:57,360 --> 00:11:00,280 Speaker 1: New Jersey Governor Chris Christie has canceled an event day 186 00:11:00,320 --> 00:11:03,719 Speaker 1: in South Carolina. Christie finished in sixth place in the 187 00:11:03,760 --> 00:11:07,199 Speaker 1: New Hampshire Republican primary yesterday. He told the supporters last 188 00:11:07,280 --> 00:11:09,480 Speaker 1: night he was heading back to New Jersey to take 189 00:11:09,559 --> 00:11:13,520 Speaker 1: a deep breath and assess what comes next. Email Donald Trump, 190 00:11:13,640 --> 00:11:16,000 Speaker 1: fresh off this big win in New Hampshire, says he 191 00:11:16,160 --> 00:11:19,319 Speaker 1: talked with Christie after the primary. For the Democrats. Bernie 192 00:11:19,400 --> 00:11:22,520 Speaker 1: Sanders bat Hillary Clinton by twenty one percent points in 193 00:11:22,679 --> 00:11:26,319 Speaker 1: yesterday's New Hampshire primary. A cruise ship battered by a 194 00:11:26,440 --> 00:11:28,880 Speaker 1: major storm in the Atlantic Ocean is due back in 195 00:11:29,080 --> 00:11:33,599 Speaker 1: New Jersey tonight. The ship, carrying more than passengers and 196 00:11:33,920 --> 00:11:37,199 Speaker 1: six hundred crew members, left New Jersey Saturday on a 197 00:11:37,240 --> 00:11:40,120 Speaker 1: seven day cruise to the Bahamas, but on Sunday the 198 00:11:40,200 --> 00:11:43,920 Speaker 1: vessel sailed into a major winter storm, where the Caribbean 199 00:11:43,960 --> 00:11:47,880 Speaker 1: says four passengers sustained minor injuries. Global News twenty four 200 00:11:47,920 --> 00:11:52,080 Speaker 1: hours a day, powered by our undred gentalmans. I'm Michael Barr, Night, Tom, 201 00:11:52,440 --> 00:11:55,000 Speaker 1: Michael bar Thank you so much. Features up ten friagrees 202 00:11:55,040 --> 00:12:00,599 Speaker 1: up seventy watching oil bariled down fourteen cents. Stay with 203 00:12:00,679 --> 00:12:07,280 Speaker 1: its Bloomberg Surveillance Bloket drivers brought you by a your 204 00:12:07,320 --> 00:12:09,960 Speaker 1: Mercedes Benz Tri State dealer. When it comes to winter elements, 205 00:12:10,000 --> 00:12:12,880 Speaker 1: put your best four wheels forward with Mercedes Benz Formatic 206 00:12:12,920 --> 00:12:15,480 Speaker 1: all wheel Drive. Visit your Mercedes Benz Tri State dealer 207 00:12:15,520 --> 00:12:24,120 Speaker 1: for a test drive today. Global Business News twenty four 208 00:12:24,200 --> 00:12:27,240 Speaker 1: hours a day. If Bloomberg dot Com, the Radio plus 209 00:12:27,320 --> 00:12:30,439 Speaker 1: Mobile Act and on your radio. This is a Bloomberg 210 00:12:30,559 --> 00:12:34,040 Speaker 1: Business Flash And I'm Karin Moscow. This update brought to 211 00:12:34,120 --> 00:12:38,120 Speaker 1: you buy American Arbitration Association International trade or business dispute 212 00:12:38,120 --> 00:12:41,599 Speaker 1: resolved faster but the International Center for Dispute Resolution the 213 00:12:41,840 --> 00:12:44,880 Speaker 1: leader in alternative dispute resolution around the world. I c 214 00:12:45,080 --> 00:12:48,640 Speaker 1: d R dot org U s DOCK Index futures are higher, 215 00:12:48,760 --> 00:12:51,760 Speaker 1: but they have paired their advances. They are tracking gains 216 00:12:51,760 --> 00:12:54,920 Speaker 1: in European markets as bank shares rebound. Indica in the 217 00:12:55,080 --> 00:12:57,960 Speaker 1: S and P five index will rebound from its lowest levels. 218 00:12:59,400 --> 00:13:02,720 Speaker 1: Had a federal deserved chair Jennet Yellen's testimony before Congress, 219 00:13:02,920 --> 00:13:05,160 Speaker 1: and we check the markets every fifteen minutes throughout the 220 00:13:05,200 --> 00:13:08,120 Speaker 1: trading day. On Bloomberg SMP even A futures are up 221 00:13:08,120 --> 00:13:10,959 Speaker 1: ten points, DOWI mini futures up sixty three, Nasadaki mini 222 00:13:11,040 --> 00:13:13,640 Speaker 1: futures up forty three decks. In Germany at one point 223 00:13:13,720 --> 00:13:16,199 Speaker 1: nine percent ten Your treasury down four thirty seconds, the 224 00:13:16,280 --> 00:13:19,080 Speaker 1: yield one point seven four percent. Nim X hert oil 225 00:13:19,120 --> 00:13:21,280 Speaker 1: down six tents per cent or seventeen cents to twenty 226 00:13:21,360 --> 00:13:24,200 Speaker 1: seven seventy eight. A barrel comex school down seven tenths 227 00:13:24,200 --> 00:13:27,600 Speaker 1: per cent or eight dollars eighty cents to eighty announced 228 00:13:27,679 --> 00:13:30,400 Speaker 1: the euro a dollar twelve twenty eight. That's a Bloomberg 229 00:13:30,440 --> 00:13:33,880 Speaker 1: business flash, Tom and Mike Karen, thanks so much. And now, folks, 230 00:13:33,920 --> 00:13:36,120 Speaker 1: I'm gonna be blunt. If you're on Global Wall Street, 231 00:13:36,200 --> 00:13:38,760 Speaker 1: this is the most important interview of the day. There 232 00:13:38,800 --> 00:13:42,439 Speaker 1: are exactly two Bloomberg gad Fly articles, and what I've 233 00:13:42,440 --> 00:13:44,520 Speaker 1: said to people is there's like eighteen of them a day, 234 00:13:44,960 --> 00:13:47,680 Speaker 1: and there's two of them that are absolutely must reading 235 00:13:47,720 --> 00:13:50,280 Speaker 1: this morning. One of them is Duncan Mayven. I featured 236 00:13:50,360 --> 00:13:53,079 Speaker 1: it on TV on Deutsche Bank out of London. It 237 00:13:53,280 --> 00:13:57,599 Speaker 1: is fabulous on tangible book value. And the other is 238 00:13:57,679 --> 00:13:59,880 Speaker 1: a jewel. I mean, Mike, she's hit or miss, Like 239 00:14:00,000 --> 00:14:02,520 Speaker 1: if she writes ten articles, four or five of them, 240 00:14:02,559 --> 00:14:05,440 Speaker 1: are you like really suspect, like, you know, why did 241 00:14:05,559 --> 00:14:09,040 Speaker 1: she come in? And then there's a couple that are okay, 242 00:14:09,200 --> 00:14:11,800 Speaker 1: and every once in a while she just kills it. Tom, 243 00:14:11,920 --> 00:14:18,559 Speaker 1: you know, such sweetness. I'm wiping away the cheers of 244 00:14:18,880 --> 00:14:24,080 Speaker 1: actually want to come back, joins us this morning on 245 00:14:24,200 --> 00:14:27,240 Speaker 1: what everybody's talking about, which is there's nothing going on 246 00:14:27,560 --> 00:14:30,680 Speaker 1: in the critical distinction, which you nail in bonds so 247 00:14:30,880 --> 00:14:34,600 Speaker 1: liquid they're drowning. Is is David Goldman said eight years 248 00:14:34,640 --> 00:14:38,080 Speaker 1: ago the better quality stuff is going down with the 249 00:14:38,160 --> 00:14:41,200 Speaker 1: garbage discuss, well, you know, there's been a lot of 250 00:14:41,320 --> 00:14:45,200 Speaker 1: focus on bank bonds in particular, and the financial bonds 251 00:14:45,320 --> 00:14:48,720 Speaker 1: of JP Morgan City groups, some of the big US 252 00:14:48,760 --> 00:14:51,800 Speaker 1: banks that really have gotten safer, and their balance sheets 253 00:14:51,920 --> 00:14:54,840 Speaker 1: are more fortified now than they were before the crisis, 254 00:14:55,240 --> 00:14:57,680 Speaker 1: and there's a question of you know, are these banks 255 00:14:57,720 --> 00:15:02,840 Speaker 1: are we on the brink of another banking And the 256 00:15:03,120 --> 00:15:07,720 Speaker 1: issue is that these bonds are easier to sell than 257 00:15:07,840 --> 00:15:10,920 Speaker 1: many of the other assets that people have on their books, 258 00:15:11,160 --> 00:15:14,040 Speaker 1: so that's what they get rid of. So right now 259 00:15:14,120 --> 00:15:16,880 Speaker 1: there is concerns about the financial system, but these are 260 00:15:16,960 --> 00:15:19,800 Speaker 1: also bonds that are the most frequently traded. You're seeing 261 00:15:19,960 --> 00:15:23,880 Speaker 1: right now volumes in corporate debt treating decline pretty dramatic. 262 00:15:24,000 --> 00:15:26,360 Speaker 1: Do you know who's selling those? Is that the dreaded Mike? 263 00:15:26,440 --> 00:15:28,880 Speaker 1: I think in the last five days I had eight 264 00:15:28,960 --> 00:15:32,200 Speaker 1: people tell me the dreaded sovereign wealth funds. Well, there 265 00:15:32,320 --> 00:15:34,240 Speaker 1: was a Norwegian wealth fund. There was a great story 266 00:15:34,560 --> 00:15:38,440 Speaker 1: by my colleagues slejamohus In about the Norwegian Wealth Fund. 267 00:15:38,480 --> 00:15:40,320 Speaker 1: It's the biggest sovereign wealth fund in the world with 268 00:15:42,320 --> 00:15:45,880 Speaker 1: dimonds bonds. I don't know. I mean, it's it's not 269 00:15:46,040 --> 00:15:48,720 Speaker 1: just them. Look right now, there's a lot of speculation, 270 00:15:48,800 --> 00:15:51,160 Speaker 1: and I want to just say it is speculation about 271 00:15:51,560 --> 00:15:54,280 Speaker 1: you know, hedge funds that are doing pretty poorly. I mean, 272 00:15:54,320 --> 00:15:57,240 Speaker 1: you've got junk bond yield on energy debt that now 273 00:15:57,280 --> 00:16:01,560 Speaker 1: I've surged beyond the highest ever are even including the 274 00:16:01,640 --> 00:16:04,200 Speaker 1: credit crisis. So you know, you think about all of 275 00:16:04,240 --> 00:16:06,680 Speaker 1: those hedge funds, mutual funds, sovereign wealth funds that that 276 00:16:06,800 --> 00:16:10,400 Speaker 1: bought this stuff up. They are facing losses, paper losses, 277 00:16:10,440 --> 00:16:12,840 Speaker 1: if nothing else. But they need to raise money. Uh 278 00:16:12,960 --> 00:16:14,720 Speaker 1: So there is a lot of selling, and it's more 279 00:16:14,800 --> 00:16:16,600 Speaker 1: a matter of sell what you can, not what you 280 00:16:16,640 --> 00:16:18,640 Speaker 1: want to. That's what happens. But when you're talking about 281 00:16:18,680 --> 00:16:22,320 Speaker 1: hedge funds and sovereign wealth funds, if I may be blunt, 282 00:16:22,440 --> 00:16:24,640 Speaker 1: who cares? I mean these are big boys and girls. 283 00:16:25,280 --> 00:16:28,160 Speaker 1: They put their money at risk, and you know a 284 00:16:28,200 --> 00:16:31,480 Speaker 1: lot of people are saying, where's the FED to save ours? Uh? 285 00:16:31,640 --> 00:16:35,680 Speaker 1: You know, but you you made the bat, you lost. Well, 286 00:16:35,720 --> 00:16:38,240 Speaker 1: I'm working on a column right now about how uh 287 00:16:38,400 --> 00:16:42,280 Speaker 1: sort of the commodities bubble bursting has made it very 288 00:16:42,400 --> 00:16:46,920 Speaker 1: difficult for central bankers right now to really create that 289 00:16:47,120 --> 00:16:50,000 Speaker 1: search for yield again. The search for yield seems to 290 00:16:50,120 --> 00:16:53,440 Speaker 1: be over and there's not a lot that central bankers 291 00:16:53,520 --> 00:16:55,320 Speaker 1: can do right now. I mean, they can lower rates, 292 00:16:55,680 --> 00:16:58,920 Speaker 1: but it's just causing people to plow it into sovereign debt, 293 00:16:59,040 --> 00:17:02,760 Speaker 1: not into risk. Your that you're seeing premiums widen out dramatically, 294 00:17:03,360 --> 00:17:06,080 Speaker 1: and that the point is all of these sovereign wealth funds, 295 00:17:06,119 --> 00:17:08,840 Speaker 1: these hedge funds, these mutual funds, these institutions, they don't 296 00:17:08,920 --> 00:17:11,760 Speaker 1: have the same willingness or death to be able to 297 00:17:11,880 --> 00:17:14,800 Speaker 1: buy some of I want to point out Dominique Constant 298 00:17:14,880 --> 00:17:17,520 Speaker 1: was adamant about this and is note which zero Hedgerie 299 00:17:17,600 --> 00:17:20,280 Speaker 1: did that spread is more important than the rate right now. 300 00:17:20,440 --> 00:17:23,800 Speaker 1: What Lisa just said, the spreads, whether it's high yield 301 00:17:24,000 --> 00:17:28,280 Speaker 1: energy garbage or its city group paper versus the full 302 00:17:28,359 --> 00:17:30,879 Speaker 1: faith and credit is the keyest thingction Clearly, you know 303 00:17:31,400 --> 00:17:34,680 Speaker 1: there's going to change in the confidence level among investors 304 00:17:34,760 --> 00:17:38,040 Speaker 1: and the idea that taking risk is worth the return. 305 00:17:38,240 --> 00:17:41,600 Speaker 1: At this point, um, nobody's buying into that, and we're 306 00:17:41,600 --> 00:17:44,080 Speaker 1: gonna have to go through a period where that's an issue. 307 00:17:44,160 --> 00:17:47,600 Speaker 1: But we knew that essentially well. But but so here's 308 00:17:47,600 --> 00:17:49,600 Speaker 1: the thing. You know, you've got central bankers that are 309 00:17:49,680 --> 00:17:52,920 Speaker 1: trying to continue the stimulus, right, I mean, you've got 310 00:17:53,400 --> 00:17:57,240 Speaker 1: uh Krodo in Japan and uh Mario Draggy in Europe 311 00:17:57,280 --> 00:18:00,280 Speaker 1: saying they will do whatever it takes in order to 312 00:18:00,320 --> 00:18:03,520 Speaker 1: stimulate their economies. But if you have the risk off 313 00:18:03,600 --> 00:18:06,239 Speaker 1: trade going on strong and you've got investors that are 314 00:18:06,320 --> 00:18:09,720 Speaker 1: losing tangibly losing money, how are they going to bring 315 00:18:09,760 --> 00:18:12,800 Speaker 1: that back? Do you like working for Bloomer gafl? I 316 00:18:12,840 --> 00:18:15,680 Speaker 1: mean you just you know you you look effervescent and vibrant, 317 00:18:15,720 --> 00:18:18,439 Speaker 1: and it's it's like a whole new world right Well, 318 00:18:18,480 --> 00:18:21,000 Speaker 1: it's fun. I mean, it's it's a fascinating market right 319 00:18:21,040 --> 00:18:24,560 Speaker 1: now that we're in unprecedented, uncharted times. It's been it's 320 00:18:24,560 --> 00:18:27,119 Speaker 1: been good. Lisa Brando's Bloomberg gaff I'll put it on 321 00:18:27,240 --> 00:18:30,919 Speaker 1: social media. Just an outstanding pairing Lisa Brandmo's and Duncan 322 00:18:30,960 --> 00:18:34,600 Speaker 1: Maven and some of the finance that's going out right there, Mike, Mike, 323 00:18:34,680 --> 00:18:40,960 Speaker 1: I'm offended. Vice Chairman Fisher's speaking without me being there. Yeah, 324 00:18:41,280 --> 00:18:45,000 Speaker 1: they're the headlines. The vice chairman is UH speaking in 325 00:18:45,640 --> 00:18:49,119 Speaker 1: Washington as just Janney Ellen, but he's talking a different subject. 326 00:18:49,160 --> 00:18:52,760 Speaker 1: He's talking about the FED. UH and other government agencies 327 00:18:52,880 --> 00:18:56,359 Speaker 1: still have substantial lender of last resort authorities. So in 328 00:18:56,480 --> 00:18:59,440 Speaker 1: other words, um, if somebody has to bail somebody out, 329 00:18:59,640 --> 00:19:02,879 Speaker 1: it can be done. Not that he suggested we should 330 00:19:02,960 --> 00:19:07,000 Speaker 1: be done. Look at the headline, but new approach untried. 331 00:19:07,640 --> 00:19:12,200 Speaker 1: That goes to Lisa's comments where we haven't tested this yet. 332 00:19:13,320 --> 00:19:16,360 Speaker 1: None of it has been tested. And there are new 333 00:19:16,480 --> 00:19:20,679 Speaker 1: rules for the Fed's Emergency Lending Authority that were changed 334 00:19:20,800 --> 00:19:26,359 Speaker 1: since mailed out bear Stearns. So a new world, and 335 00:19:26,400 --> 00:19:29,760 Speaker 1: then thirty five minutes oh we'll here from chair Yell 336 00:19:29,840 --> 00:19:32,720 Speaker 1: and then important questions by Chairman Henseling in the house 337 00:19:33,160 --> 00:19:36,560 Speaker 1: um the market that it's deceptive, folks. The tape is quiet. 338 00:19:37,000 --> 00:19:41,480 Speaker 1: The Bloomberg terminal looks quiet. Great Oil is testing new 339 00:19:41,520 --> 00:19:45,680 Speaker 1: weakness seven sixty two barreled down thirty two cents. Brent 340 00:19:45,800 --> 00:19:49,080 Speaker 1: crude is not through twenty nine handle thirty point four 341 00:19:49,240 --> 00:19:53,480 Speaker 1: nine in yen, testing the strength level of the recent 342 00:19:54,080 --> 00:19:58,000 Speaker 1: last days one sixty six. Stay with us. We need 343 00:19:58,040 --> 00:20:06,159 Speaker 1: to get the markets open. World War Bloomberg surveillance for 344 00:20:06,280 --> 00:20:07,760 Speaker 1: cutting it down to the opening bill brought to you 345 00:20:07,840 --> 00:20:10,440 Speaker 1: by the refined Jeep Grand Cherokee Overland. It continues to 346 00:20:10,520 --> 00:20:13,280 Speaker 1: raise the bar with its luxurious interior and legendary four 347 00:20:13,320 --> 00:20:15,880 Speaker 1: by four capability. Drive one into a local jeep dealer 348 00:20:15,960 --> 00:20:24,400 Speaker 1: today Gee, the official vehicle of Killington Resort, broadcasting live 349 00:20:24,560 --> 00:20:27,879 Speaker 1: to New York, Gloomberg eleventh Yo to Washington, d C, 350 00:20:28,080 --> 00:20:32,679 Speaker 1: Bloomberg one to Boston, Bloomberg welve Winners to San Francisco, 351 00:20:32,840 --> 00:20:36,560 Speaker 1: Bloomberg nine six to the country Series X Channel one 352 00:20:36,680 --> 00:20:40,200 Speaker 1: ninety and around the globe the Bloomberg Radio plus Aven 353 00:20:40,240 --> 00:20:44,960 Speaker 1: Bloomberg dot Com. This is Bloomberg Surveillance. Thank good morning. 354 00:20:45,000 --> 00:20:47,560 Speaker 1: I'm terror in Moscow along with Tom Keene and Michael 355 00:20:47,680 --> 00:20:50,080 Speaker 1: McKee and the opening bill brought to you by s C. 356 00:20:50,280 --> 00:20:53,840 Speaker 1: I have evolving investor and regulatory demands affected your investment 357 00:20:53,920 --> 00:20:58,399 Speaker 1: firms operational readiness, imagine transforming your business with SCS Global 358 00:20:58,480 --> 00:21:02,080 Speaker 1: Platform at se i C dot com slash imagine, and 359 00:21:02,280 --> 00:21:04,119 Speaker 1: stocks are higher at the open. The S and P 360 00:21:04,240 --> 00:21:06,960 Speaker 1: fived is up half percent or nine points to eighteen 361 00:21:07,040 --> 00:21:10,119 Speaker 1: sixty one down. Jones Industrial Average up a quarter percent 362 00:21:10,200 --> 00:21:13,439 Speaker 1: or thirty eight points to sixteen thousand, fifty NASDAK up 363 00:21:13,480 --> 00:21:15,680 Speaker 1: one point one percent or forty eight points to forty 364 00:21:15,720 --> 00:21:18,960 Speaker 1: three sixteen ten. Your treasury down four thirty seconds. The 365 00:21:19,040 --> 00:21:21,720 Speaker 1: yield one point seven three percent yield on a two 366 00:21:21,800 --> 00:21:24,760 Speaker 1: year point seven three percent NI max screwed oil down 367 00:21:24,800 --> 00:21:27,040 Speaker 1: eight tenths percent or twenty one cents to twenty seven 368 00:21:27,160 --> 00:21:30,280 Speaker 1: seventy four. A barrel Comax gold is down seven tenths 369 00:21:30,320 --> 00:21:33,600 Speaker 1: percent or eight dollars fifty cents to eleven nine forty announced. 370 00:21:33,920 --> 00:21:36,239 Speaker 1: The euro at dollar twelve thirty seven, the yen one 371 00:21:36,359 --> 00:21:39,879 Speaker 1: fourteen point seven four. Tom and Mike Karen thank you 372 00:21:40,040 --> 00:21:43,240 Speaker 1: so much. This is a huge honoring pleasure for me 373 00:21:43,359 --> 00:21:47,480 Speaker 1: and Michael McKee. We speak now with William R. White. 374 00:21:47,640 --> 00:21:50,919 Speaker 1: Here's what you need to know. When I give lectures 375 00:21:51,200 --> 00:21:55,160 Speaker 1: to college students, I say to them in e con 376 00:21:55,280 --> 00:21:58,359 Speaker 1: one oh one, you must read the two William White 377 00:21:58,440 --> 00:22:02,520 Speaker 1: papers from the Dallas Fed written in the recent years. 378 00:22:03,280 --> 00:22:07,640 Speaker 1: There twenty pages. There's thirty pages because he's William White 379 00:22:07,680 --> 00:22:12,199 Speaker 1: of Canada. There's very little math. It's mostly about history 380 00:22:12,760 --> 00:22:17,399 Speaker 1: and it's Mike, it's it's unbelievable. It's in English. You 381 00:22:17,480 --> 00:22:21,479 Speaker 1: can understand it. Joining us now William White, an esteemed 382 00:22:21,520 --> 00:22:25,960 Speaker 1: economist from Canada, with work, among other places, the Bank 383 00:22:26,040 --> 00:22:29,800 Speaker 1: of International Settlements. Dr White, wonderful to speak to you again. 384 00:22:30,200 --> 00:22:33,399 Speaker 1: You're too you're far too kind, but thank you. I 385 00:22:33,520 --> 00:22:37,560 Speaker 1: do I do this and you know you gotta understand, folks, 386 00:22:37,800 --> 00:22:41,080 Speaker 1: when William White speaks, a guy like Stanley Fisher leads 387 00:22:41,160 --> 00:22:44,440 Speaker 1: forward to put things in perspective. If you wrote your 388 00:22:44,480 --> 00:22:48,840 Speaker 1: paper on monetary history right now, are we facing a 389 00:22:49,040 --> 00:22:53,800 Speaker 1: linkage of weak aggregate demand, slow global economy folded into 390 00:22:54,000 --> 00:23:00,720 Speaker 1: a nascent banking crisis. Well, I I fear that all 391 00:23:00,800 --> 00:23:04,080 Speaker 1: of the above is possible. Uh, certainly in terms of 392 00:23:04,160 --> 00:23:07,520 Speaker 1: the aggurate demand side. I mean, it seems to me 393 00:23:07,720 --> 00:23:14,720 Speaker 1: that virtually everywhere you look, all the major geographical regions, independently, 394 00:23:14,840 --> 00:23:18,760 Speaker 1: they all have issues. And we've got problems in Japan, 395 00:23:19,000 --> 00:23:24,320 Speaker 1: We've got the transition, in China, we've got fears of 396 00:23:24,440 --> 00:23:27,719 Speaker 1: slowing and recession in the United States. Europe is uh. 397 00:23:28,280 --> 00:23:30,640 Speaker 1: We all know the kinds of problems that Europe has got, 398 00:23:30,800 --> 00:23:35,520 Speaker 1: both economic and political. And in addition to all of 399 00:23:35,600 --> 00:23:40,000 Speaker 1: the individual areas looking sort of iffy, I guess my 400 00:23:40,160 --> 00:23:44,280 Speaker 1: concern is that the degree of interlinkage is such that 401 00:23:44,400 --> 00:23:47,159 Speaker 1: if we do get some problems, some big if this 402 00:23:47,320 --> 00:23:50,840 Speaker 1: is anf if we do get some big problems anywhere, 403 00:23:51,560 --> 00:23:55,720 Speaker 1: we we will very soon have problems almost everywhere. And 404 00:23:55,880 --> 00:23:59,760 Speaker 1: that would be my concern. Now on the banking side again, 405 00:24:01,320 --> 00:24:03,639 Speaker 1: I think it was Warren Boffett who said at one 406 00:24:03,680 --> 00:24:06,320 Speaker 1: point that heat stopped reading the accounts because he couldn't 407 00:24:06,359 --> 00:24:09,760 Speaker 1: follow them. So the real worry is that we just 408 00:24:09,880 --> 00:24:13,280 Speaker 1: simply don't know with respect to the banks. And I 409 00:24:13,400 --> 00:24:18,080 Speaker 1: think it's that sort of sense of uncertainty and possible 410 00:24:18,200 --> 00:24:21,320 Speaker 1: downside that's been leading to what we've been seen been 411 00:24:21,359 --> 00:24:25,119 Speaker 1: seeing recently. But my fundamental problem is, I don't know. 412 00:24:26,119 --> 00:24:29,119 Speaker 1: There seems to be a feeling that central banks are 413 00:24:29,160 --> 00:24:34,119 Speaker 1: out of ammunition. Now, well, what avoided the things? UM? 414 00:24:34,440 --> 00:24:38,960 Speaker 1: In a certain sense, I almost I hope that they 415 00:24:39,000 --> 00:24:43,960 Speaker 1: are because as as as as Tom said referring to 416 00:24:44,080 --> 00:24:46,760 Speaker 1: my earlier work, I guess I've been of the view 417 00:24:46,840 --> 00:24:50,760 Speaker 1: for a long period of time that the fundamental problem 418 00:24:50,840 --> 00:24:55,560 Speaker 1: we face is a problem of excessive debt virtually everywhere, 419 00:24:56,520 --> 00:25:00,919 Speaker 1: UM but private debt to g sorry, not the private 420 00:25:01,000 --> 00:25:05,239 Speaker 1: the non financial debt as a percentage of GDP has 421 00:25:05,280 --> 00:25:11,560 Speaker 1: gone up from two to two since two thousand and seven. Okay, 422 00:25:12,119 --> 00:25:15,000 Speaker 1: so we have this debt problem, and lied to that, 423 00:25:15,320 --> 00:25:19,080 Speaker 1: I guess we have a form of potential insolvency problem. 424 00:25:20,080 --> 00:25:24,080 Speaker 1: To me, printing the money and adding to the debts 425 00:25:24,560 --> 00:25:29,080 Speaker 1: and inducing people to take on more debt just makes 426 00:25:29,160 --> 00:25:32,000 Speaker 1: the problem worse. It is not a solution. And so 427 00:25:32,119 --> 00:25:36,119 Speaker 1: if the central banks have run out of ammunition because 428 00:25:36,160 --> 00:25:38,840 Speaker 1: the interest rates are as low as they are and 429 00:25:39,080 --> 00:25:43,159 Speaker 1: the experimental stuff that they have done doesn't seem to 430 00:25:43,320 --> 00:25:48,400 Speaker 1: have been very helpful. Frankly, I I think that would 431 00:25:48,440 --> 00:25:51,280 Speaker 1: be a good thing because it would focus the minds 432 00:25:51,359 --> 00:25:55,080 Speaker 1: of governments on doing the sorts of things that only 433 00:25:55,240 --> 00:26:03,080 Speaker 1: governments can do. What then, can a central banker do 434 00:26:03,400 --> 00:26:08,640 Speaker 1: at this point, not very not very much, I fear. 435 00:26:08,720 --> 00:26:13,840 Speaker 1: I mean. The worry in a sense is the degree 436 00:26:14,040 --> 00:26:18,120 Speaker 1: to which even the skeptical central bankers, and I'm thinking 437 00:26:18,200 --> 00:26:21,440 Speaker 1: particularly of the e c B here earlier on the 438 00:26:22,119 --> 00:26:25,560 Speaker 1: central bankers that were skeptical about the use of these 439 00:26:26,480 --> 00:26:33,359 Speaker 1: very unconventional monetary, unconventional, unprecedented monetary instruments, they've come on 440 00:26:33,680 --> 00:26:36,840 Speaker 1: side in a in a way that seems to indicate 441 00:26:37,000 --> 00:26:41,160 Speaker 1: they've bought into the idea that they can do more 442 00:26:41,480 --> 00:26:44,959 Speaker 1: than they are doing, which I dispute. And the latest 443 00:26:45,080 --> 00:26:48,000 Speaker 1: round of it, of course, has been this um negative 444 00:26:48,040 --> 00:26:51,760 Speaker 1: interest rates in Japan, which has now sort of come back, 445 00:26:51,880 --> 00:26:53,880 Speaker 1: so that we're starting to see stuff in the press 446 00:26:53,960 --> 00:26:57,160 Speaker 1: about maybe the ECB will have to do even more. 447 00:26:58,359 --> 00:27:01,200 Speaker 1: Janet Yellen apparently just last week said that it was 448 00:27:01,320 --> 00:27:05,240 Speaker 1: something that they should think about, whereas my recollection was 449 00:27:05,440 --> 00:27:07,480 Speaker 1: a few months ago she was saying that it was 450 00:27:07,600 --> 00:27:11,119 Speaker 1: just too dangerous and one wouldn't want to think about it. 451 00:27:12,080 --> 00:27:14,640 Speaker 1: Um Ben Bernanke has come out saying that the ft 452 00:27:14,680 --> 00:27:19,359 Speaker 1: should think about it. So maybe everybody's gonna get in 453 00:27:19,480 --> 00:27:21,800 Speaker 1: on the act one more time. And I don't think 454 00:27:21,840 --> 00:27:24,760 Speaker 1: it's helpful. I think it's dangerous. Dr White Axel Leonovo, 455 00:27:24,880 --> 00:27:26,720 Speaker 1: who you have in your papers and folks are a 456 00:27:26,800 --> 00:27:29,920 Speaker 1: sweep of economic history? Was the marine coming out of 457 00:27:29,920 --> 00:27:34,320 Speaker 1: the trenches? In against the certitude of Kinzie and prescription? 458 00:27:34,720 --> 00:27:38,880 Speaker 1: Stanley Fisher mentioned three or four times the word uncertainty 459 00:27:38,960 --> 00:27:41,119 Speaker 1: when I spoke to him a number of weeks ago 460 00:27:41,200 --> 00:27:44,200 Speaker 1: at the Council on Foreign Relations, and it almost hearkens 461 00:27:44,280 --> 00:27:48,800 Speaker 1: back to a certitude about uncertainty. And because of that 462 00:27:49,240 --> 00:27:51,520 Speaker 1: we need to be hesitant. Do we need to be 463 00:27:51,600 --> 00:27:54,639 Speaker 1: more aggressive in our economics now like Leona Vood or 464 00:27:54,720 --> 00:27:57,679 Speaker 1: do we need to be more tentative in our monetarily 465 00:27:58,040 --> 00:28:00,840 Speaker 1: terry thinking? As we hear from Jen Yell, as we 466 00:28:00,960 --> 00:28:03,320 Speaker 1: hear from Stanley Fisher. Oh, I think we need to 467 00:28:03,400 --> 00:28:07,920 Speaker 1: be more tentative in the following sense. I think the 468 00:28:08,119 --> 00:28:11,399 Speaker 1: model that the central bankers and the I, m F 469 00:28:11,520 --> 00:28:13,560 Speaker 1: and the others, including the O E, C D, for 470 00:28:13,720 --> 00:28:16,879 Speaker 1: whom I do contract work now, um, I think the 471 00:28:17,000 --> 00:28:18,960 Speaker 1: model that they have used over the course of the 472 00:28:19,080 --> 00:28:22,840 Speaker 1: last fifty years or so is just wrong. And it's 473 00:28:22,920 --> 00:28:27,359 Speaker 1: wrong at a fundamental philosophical level. You know, they have made, 474 00:28:27,720 --> 00:28:30,280 Speaker 1: as I put in a more recent paper, a fundamental 475 00:28:30,440 --> 00:28:35,439 Speaker 1: ontological mistake. They think the economy is a machine. They 476 00:28:35,520 --> 00:28:38,760 Speaker 1: think it is understandable, and they think it is controllable. 477 00:28:39,160 --> 00:28:40,880 Speaker 1: And the fact of the matter is it is not 478 00:28:41,200 --> 00:28:45,960 Speaker 1: understandable because it is a complex and adaptive system. And 479 00:28:46,360 --> 00:28:50,560 Speaker 1: because it's not understandable, it's certainly not controllable. We're gonna 480 00:28:50,600 --> 00:28:53,560 Speaker 1: come back. We're not going to do the sge differential 481 00:28:53,600 --> 00:28:58,080 Speaker 1: equations we like. We may not even do Newtonian mechanical 482 00:28:58,600 --> 00:29:01,040 Speaker 1: because William, why not hang up the phone. We are 483 00:29:01,120 --> 00:29:02,959 Speaker 1: honored to bring you, William White. I just put out 484 00:29:03,000 --> 00:29:06,920 Speaker 1: on Twitter his two landmark papers for Richard Fisher's Dallas 485 00:29:07,360 --> 00:29:10,280 Speaker 1: uh FED. I can't convey enough how important they are 486 00:29:10,640 --> 00:29:13,800 Speaker 1: to give you scope and scale on the economic debates. 487 00:29:13,840 --> 00:29:17,320 Speaker 1: We will continue with William White of Canada UH doll 488 00:29:17,520 --> 00:29:22,400 Speaker 1: fifty two points. I'm watching Yen in his Stronger one fight. Really, 489 00:29:22,480 --> 00:29:26,480 Speaker 1: Butchers is up against Key m resistance to a stronger 490 00:29:26,960 --> 00:29:31,760 Speaker 1: Yeah and West Texas and immediate lower twenty seven two 491 00:29:32,400 --> 00:29:39,080 Speaker 1: per barrel. Let's check out with Michael bar Now I'll 492 00:29:39,080 --> 00:29:41,720 Speaker 1: get the latest world of national headlines. Michael, Mike, Tom, 493 00:29:41,760 --> 00:29:44,520 Speaker 1: thank you very much. Republican Donald Trump and Democrat Bernie 494 00:29:44,600 --> 00:29:48,880 Speaker 1: Sanders are the easy winners in the New Hampshire presidential primaries. Meanwhile, 495 00:29:48,960 --> 00:29:51,600 Speaker 1: New Jersey Governor Chris Christie has canceled an event today 496 00:29:51,720 --> 00:29:55,120 Speaker 1: in South Carolina. Last night he told his supporters he 497 00:29:55,120 --> 00:29:59,400 Speaker 1: would take a deep breath and reevaluate his campaign. Christie 498 00:29:59,440 --> 00:30:02,560 Speaker 1: finished fixed in the Republican New Hampshire primary. There is 499 00:30:02,640 --> 00:30:06,000 Speaker 1: drawn bipartisan support in the Senate today for another attempt 500 00:30:06,040 --> 00:30:09,640 Speaker 1: at punishing North Korea over its nuclear weapons program and 501 00:30:09,880 --> 00:30:12,560 Speaker 1: rocket launches. The bill that senators planned to vote on 502 00:30:12,680 --> 00:30:16,120 Speaker 1: targets North Korea's ability to access the money it needs 503 00:30:16,200 --> 00:30:20,280 Speaker 1: for developing miniaturized nuclear warheads and the long range missiles 504 00:30:20,320 --> 00:30:23,320 Speaker 1: to deliver them. A group representing a number of large 505 00:30:23,360 --> 00:30:26,880 Speaker 1: airlines is pushing for big changes to the US air 506 00:30:26,960 --> 00:30:30,160 Speaker 1: traffic control program. The head of Airlines for America will 507 00:30:30,160 --> 00:30:33,120 Speaker 1: testify before Congress today on the bill that places air 508 00:30:33,200 --> 00:30:37,720 Speaker 1: traffic control under a private, nonprofit corporation rather than the 509 00:30:37,800 --> 00:30:42,200 Speaker 1: federal government. Group spokesperson Sharon Pinkerton, we spent six billion 510 00:30:42,280 --> 00:30:45,280 Speaker 1: dollars in ten years, and we really haven't made the 511 00:30:45,400 --> 00:30:47,960 Speaker 1: kind of progress that we need to make. We're no 512 00:30:48,160 --> 00:30:51,040 Speaker 1: longer the gold standard when it comes to air traffic 513 00:30:51,080 --> 00:30:54,760 Speaker 1: control reform. Critics a privatizing air traffic control would push 514 00:30:55,000 --> 00:30:58,440 Speaker 1: more costs to consumers. Global News twenty four hours a day, 515 00:30:58,480 --> 00:31:01,960 Speaker 1: powered by our journalists more than a hundred fifty news 516 00:31:02,000 --> 00:31:04,320 Speaker 1: bureaus from around the world. I'm Michael Barr, like Tom 517 00:31:05,080 --> 00:31:08,840 Speaker 1: Michael Barr, Thank you so much. We're Maths Free. Well 518 00:31:08,960 --> 00:31:11,640 Speaker 1: maybe Michael McKee and Tom King. We're with William White. 519 00:31:12,120 --> 00:31:15,680 Speaker 1: Stay with US worldwide and all of Canada. Bloomberg Surveillance 520 00:31:15,720 --> 00:31:22,680 Speaker 1: Good morning. Bloomberg Surveillance is brought to you by Audi 521 00:31:22,720 --> 00:31:25,640 Speaker 1: Medolands and Scaucus, New Jersey, powered by Benzel Bush, offering 522 00:31:25,680 --> 00:31:28,320 Speaker 1: a commitment to service, luxury and value with total transparency. 523 00:31:28,400 --> 00:31:30,280 Speaker 1: Start your journey at Audi medal Lands dot net and 524 00:31:30,440 --> 00:31:39,400 Speaker 1: define the way you drive global business news twenty four 525 00:31:39,480 --> 00:31:42,520 Speaker 1: hours a day. That's Bloomberg dot com, the radio plus 526 00:31:42,640 --> 00:31:45,760 Speaker 1: mobile lap and on your radio, this is a Bloomberg 527 00:31:45,840 --> 00:31:49,160 Speaker 1: Business Flash and I'm Karen Moscow. The updates brought to 528 00:31:49,240 --> 00:31:52,000 Speaker 1: you by Eisener Emperor. Does your accountant do more than 529 00:31:52,080 --> 00:31:55,640 Speaker 1: crunch numbers? Eisener Emper understands the more than their clients 530 00:31:55,800 --> 00:31:58,800 Speaker 1: know that. They understand that more than their clients know, 531 00:31:59,000 --> 00:32:00,840 Speaker 1: the better the outcome. Now, that's why they've created a 532 00:32:00,880 --> 00:32:04,920 Speaker 1: twenty sixteen personal tax guide free downloaded Eisner Emper dot Com. 533 00:32:05,040 --> 00:32:08,600 Speaker 1: Slash strategies, US stalks are rising with it. All are 534 00:32:08,640 --> 00:32:12,080 Speaker 1: fluctuates with treasuries after Federal Reserve Chair Jennet Yellen signaled 535 00:32:12,160 --> 00:32:16,240 Speaker 1: confidence the economy ken withstand gradual tightening even as financial 536 00:32:16,320 --> 00:32:19,200 Speaker 1: market turmoil poses a threat to global growth. We checked 537 00:32:19,200 --> 00:32:21,600 Speaker 1: the markets every fifteen minutes throughout the trading day on 538 00:32:21,720 --> 00:32:24,720 Speaker 1: Bloomberg SNP five hundred up half per cent or nine 539 00:32:24,760 --> 00:32:27,920 Speaker 1: points to eighteen sixty one. Dow Jones Industrial average up 540 00:32:27,960 --> 00:32:30,480 Speaker 1: two tenths percent, or thirty eight points, to sixteen thousand 541 00:32:30,520 --> 00:32:33,360 Speaker 1: and fifty five nasdacks of nine tenths percent or thirty 542 00:32:33,400 --> 00:32:36,280 Speaker 1: nine points to forty three ten ten. Your treasury down 543 00:32:36,320 --> 00:32:38,800 Speaker 1: one thirty second the yield one point seven three percent 544 00:32:39,160 --> 00:32:41,920 Speaker 1: yield on the two year point seven two percent. Nim 545 00:32:41,960 --> 00:32:44,200 Speaker 1: ex screwed oil down one point four percent or thirty 546 00:32:44,280 --> 00:32:47,160 Speaker 1: nine cents to twenty seven fifty five. A barrel comes 547 00:32:47,240 --> 00:32:49,840 Speaker 1: gold is down six tenths percent or six dollars seventy 548 00:32:49,920 --> 00:32:52,840 Speaker 1: cents to eleven ninety two. Announced the euro a dollar 549 00:32:52,880 --> 00:32:55,240 Speaker 1: twelve thirty eight b and one four teen point six 550 00:32:55,360 --> 00:32:58,400 Speaker 1: eight and Jennet Yellen said in prepared testimony to Congress 551 00:32:58,440 --> 00:33:01,400 Speaker 1: that the FED still expects to raise it's gradually, while 552 00:33:01,440 --> 00:33:04,040 Speaker 1: making it clear that continued market turmoil could throw the 553 00:33:04,080 --> 00:33:07,280 Speaker 1: Central Bank off course. And US and European Union regulators 554 00:33:07,320 --> 00:33:10,640 Speaker 1: reaching an agreement on oversight of the five trillion dollar 555 00:33:10,680 --> 00:33:14,200 Speaker 1: global derivatives market. That's a bloomberg business flash. Tom and 556 00:33:14,280 --> 00:33:18,040 Speaker 1: Mike Karen, thank you so much. Michael McKee, you know 557 00:33:18,200 --> 00:33:21,720 Speaker 1: that's better than me. I was flabbergasted. William White grew 558 00:33:21,800 --> 00:33:25,240 Speaker 1: up in I'm going to pronounce a Canora, Ontario the 559 00:33:25,440 --> 00:33:31,600 Speaker 1: distance from a by pronouncing that right Canora, Ontario is 560 00:33:32,840 --> 00:33:40,280 Speaker 1: is eleven twelve hundred miles from Toronto. Yeah, it's twelve 561 00:33:40,560 --> 00:33:44,320 Speaker 1: miles west of Toronto. It's like New York to Omaha. 562 00:33:45,200 --> 00:33:50,400 Speaker 1: Who in America would ever know that Ontario was that big, Well, 563 00:33:50,680 --> 00:33:53,120 Speaker 1: certainly anybody who's ever driven it, as as I have 564 00:33:53,240 --> 00:33:56,280 Speaker 1: done myself a few times when I was younger. It's 565 00:33:56,280 --> 00:33:57,960 Speaker 1: a big place. It's a big but it's it's just 566 00:33:58,160 --> 00:34:00,600 Speaker 1: it's we have no idea in America that part of 567 00:34:00,680 --> 00:34:04,840 Speaker 1: Ontario mic is north of Minneapolis. Let's continue with William. 568 00:34:06,120 --> 00:34:08,359 Speaker 1: I don't know if I can top that, Bill. Um. 569 00:34:09,960 --> 00:34:12,759 Speaker 1: The the interesting thing about central banks these days is 570 00:34:12,840 --> 00:34:15,320 Speaker 1: that we seem to have come to the end of 571 00:34:16,239 --> 00:34:21,640 Speaker 1: um conventional unconventional policy. There is always the helicopter drop, 572 00:34:22,160 --> 00:34:28,000 Speaker 1: but beyond that, um well, the helicopter drop. I mean, 573 00:34:28,040 --> 00:34:32,480 Speaker 1: I've had a couple of exchanges with um Lord Adare 574 00:34:32,600 --> 00:34:37,719 Speaker 1: Turner on this, and again going back to my point 575 00:34:37,800 --> 00:34:40,920 Speaker 1: earlier on about the economy is a complex adaptive system. 576 00:34:41,400 --> 00:34:45,680 Speaker 1: One of the insights that comes out from that simple 577 00:34:45,800 --> 00:34:50,080 Speaker 1: recognition is you should be very careful about doing experimental 578 00:34:50,200 --> 00:34:53,480 Speaker 1: things because in a fundamental way, you don't know what 579 00:34:53,640 --> 00:34:57,080 Speaker 1: you're doing now on the on the helicopter money, I mean, 580 00:34:57,160 --> 00:34:59,879 Speaker 1: as far as I can understand it, it comes down 581 00:35:00,000 --> 00:35:03,839 Speaker 1: to physical stimulus, which is financed by the central bank. 582 00:35:04,200 --> 00:35:06,520 Speaker 1: Because so you put the two balance sheets together, the 583 00:35:06,640 --> 00:35:10,240 Speaker 1: government and the central bank, that the government spends more money, 584 00:35:10,440 --> 00:35:12,880 Speaker 1: they build up debts and it shows up as a 585 00:35:12,960 --> 00:35:16,480 Speaker 1: liability of the central bank. And that's perfectly fine. And 586 00:35:16,760 --> 00:35:19,120 Speaker 1: in fact, we've been doing a lot of that over 587 00:35:19,200 --> 00:35:21,640 Speaker 1: the course of the years. The recent years. We don't 588 00:35:21,680 --> 00:35:24,520 Speaker 1: call it helicopter money, but it's much the same. The 589 00:35:24,640 --> 00:35:27,480 Speaker 1: deficits and the death have gotten bigger, the size of 590 00:35:27,520 --> 00:35:30,480 Speaker 1: the central bank is got bigger. But the question that 591 00:35:30,600 --> 00:35:33,359 Speaker 1: emerges is what happens when you have to take all 592 00:35:33,440 --> 00:35:36,120 Speaker 1: this stuff out, and can can you do it in 593 00:35:36,239 --> 00:35:40,440 Speaker 1: an orderly way? And there I think, um not that 594 00:35:40,560 --> 00:35:44,239 Speaker 1: anybody has begun, but when the time comes to do it, 595 00:35:44,400 --> 00:35:46,680 Speaker 1: it will be very interesting to see whether they can, 596 00:35:47,040 --> 00:35:49,880 Speaker 1: whether they can manage it. And for countries that have 597 00:35:50,040 --> 00:35:56,080 Speaker 1: already got big government debts to do helicopter money. In addition, 598 00:35:56,400 --> 00:36:00,719 Speaker 1: let's suppose Japan, good example, okay, where the that is 599 00:36:00,840 --> 00:36:04,360 Speaker 1: what two and fifty of g d P, the deficit 600 00:36:04,440 --> 00:36:07,880 Speaker 1: is still seven or eight percentage points of GDP. The 601 00:36:08,000 --> 00:36:13,040 Speaker 1: Bank of Japan is financing of all government expenditures in Japan. 602 00:36:13,880 --> 00:36:18,120 Speaker 1: This thing could get out of hand physical dominance very quickly. 603 00:36:18,719 --> 00:36:21,520 Speaker 1: So I think there might be some cases where you 604 00:36:21,600 --> 00:36:23,920 Speaker 1: could go that one extra step, as it were with 605 00:36:24,080 --> 00:36:28,040 Speaker 1: the with the helicopter money joint physical and monetary. But 606 00:36:28,160 --> 00:36:31,560 Speaker 1: you've got to understand that this is inherently an enormously 607 00:36:31,800 --> 00:36:35,240 Speaker 1: dangerous path to go down, and the bigger your initial 608 00:36:35,360 --> 00:36:39,640 Speaker 1: level of debt is, the more dangerous it becomes. Keep 609 00:36:39,680 --> 00:36:44,399 Speaker 1: your eye in Venezuela, Brazil. Then afterwards will we'll see. Well, 610 00:36:44,400 --> 00:36:47,160 Speaker 1: in terms of what you can accomplish with it, the 611 00:36:47,280 --> 00:36:50,440 Speaker 1: goal seems to have changed. I mean, it was to 612 00:36:50,600 --> 00:36:53,040 Speaker 1: keep inflation from getting out of hand. Now it seems 613 00:36:53,040 --> 00:36:57,680 Speaker 1: to be stimulate aggregate demand. Well, yes and no, it's 614 00:36:57,719 --> 00:37:02,240 Speaker 1: now it's stimulating aggregate demand in the interests of raising 615 00:37:02,440 --> 00:37:06,799 Speaker 1: a rate of inflation which is considered to be too low. Now, 616 00:37:07,280 --> 00:37:10,680 Speaker 1: that in itself is a sort of a bit of 617 00:37:10,760 --> 00:37:16,440 Speaker 1: a puzzle because it think back to two thousand and 618 00:37:16,520 --> 00:37:20,840 Speaker 1: seven and there's some similarities today. What what if this 619 00:37:21,040 --> 00:37:24,280 Speaker 1: is all a big supply side shock, a big positive 620 00:37:24,320 --> 00:37:28,239 Speaker 1: supply side shock. Okay, as it was prior to two 621 00:37:28,320 --> 00:37:31,319 Speaker 1: thousand and seven for sure, coming in from the global level. 622 00:37:32,120 --> 00:37:35,760 Speaker 1: Does it make sense in the face of this positive 623 00:37:35,800 --> 00:37:39,239 Speaker 1: supply side shock, which is pushing up everybody's profits and 624 00:37:39,960 --> 00:37:44,280 Speaker 1: wages and whatever in a sustainable way, does it really 625 00:37:44,400 --> 00:37:47,719 Speaker 1: make sense to just print the money and expand the 626 00:37:47,800 --> 00:37:52,239 Speaker 1: credit system in order to upset the disinflationary influence. I 627 00:37:52,320 --> 00:37:54,680 Speaker 1: don't think it makes any sense at all. One of 628 00:37:54,719 --> 00:37:58,239 Speaker 1: the great things of Davos William White was my perception, 629 00:37:58,320 --> 00:38:01,040 Speaker 1: and folks, is just my opinion that we don't have 630 00:38:01,160 --> 00:38:04,000 Speaker 1: money illusion, the British phrase of nominal GDP and the 631 00:38:04,120 --> 00:38:07,840 Speaker 1: effects of inflation upon our thinking. But we maybe we 632 00:38:07,880 --> 00:38:10,560 Speaker 1: have a new phrase, interest rate illusion. We have nominal 633 00:38:10,680 --> 00:38:13,239 Speaker 1: rates and real rates that have been crushed solo that 634 00:38:13,360 --> 00:38:16,919 Speaker 1: our behaviors changed. Have you seen that in economic history? 635 00:38:17,120 --> 00:38:19,080 Speaker 1: Have we ever had a period like we have now? 636 00:38:19,880 --> 00:38:25,359 Speaker 1: Our businesses their behavior is adapted and adjusted. And here's 637 00:38:25,400 --> 00:38:31,319 Speaker 1: the key mathematical word, folks, to chronic interest rate illusion. Um, 638 00:38:32,160 --> 00:38:33,759 Speaker 1: you know the only thing I could think of, and 639 00:38:33,840 --> 00:38:37,000 Speaker 1: I can't get the file here. There's there's an article 640 00:38:37,280 --> 00:38:42,480 Speaker 1: that was written by M. Schumpeter Back and he was 641 00:38:42,520 --> 00:38:45,719 Speaker 1: on the show a couple of weeks ago, Joseph Sean 642 00:38:45,760 --> 00:38:49,560 Speaker 1: Peter Folks of Harvard and llsse Yeah, very famous economist, 643 00:38:49,600 --> 00:38:51,880 Speaker 1: and he wrote this thing back in ninety four about 644 00:38:52,120 --> 00:38:55,799 Speaker 1: about the Great Depression and earlier depressions, and he made 645 00:38:55,920 --> 00:39:00,920 Speaker 1: reference to the um campaign of William williams Endings Bryant, 646 00:39:01,719 --> 00:39:06,359 Speaker 1: you know who wanted to introduce by mentalism. Okay, now, 647 00:39:06,480 --> 00:39:09,480 Speaker 1: one would have thought, Unpater said that people would have 648 00:39:09,560 --> 00:39:13,640 Speaker 1: looked upon this as inflationary and they would have tried 649 00:39:13,680 --> 00:39:16,680 Speaker 1: to protect themselves. But in fact what happened was the 650 00:39:16,920 --> 00:39:21,160 Speaker 1: very opposite. The whole economy fell apart as the business 651 00:39:21,200 --> 00:39:25,759 Speaker 1: community basically said, they're campering, their tampering with the monetary 652 00:39:25,840 --> 00:39:28,719 Speaker 1: and credit system. I don't know what the outcome will be, 653 00:39:29,040 --> 00:39:32,439 Speaker 1: and I'm hunkering down. And that, I think is something 654 00:39:32,560 --> 00:39:35,160 Speaker 1: that in the back of my mind is is worrisome 655 00:39:35,280 --> 00:39:40,279 Speaker 1: that all of this experimentation, UM, all the money and 656 00:39:40,400 --> 00:39:44,440 Speaker 1: credit side, all this experimentation is leading people to feel 657 00:39:45,360 --> 00:39:49,799 Speaker 1: the central bankers themselves are uncertain about how to react here. 658 00:39:50,280 --> 00:39:52,839 Speaker 1: The fact that different central banks are doing different things 659 00:39:53,000 --> 00:39:55,440 Speaker 1: is not helping either. Right, There's no science to this 660 00:39:55,880 --> 00:40:00,560 Speaker 1: it's totally totally art and totally experimental, and one of 661 00:40:00,600 --> 00:40:02,200 Speaker 1: the things that could come out of it is just 662 00:40:02,360 --> 00:40:06,680 Speaker 1: a general reduction in confidence. Has people hunker down in 663 00:40:06,719 --> 00:40:10,640 Speaker 1: the face of the associated uncertainty. Well, let's get in 664 00:40:10,719 --> 00:40:13,880 Speaker 1: their final thoughts here, let's go back to uncertainty. I 665 00:40:13,920 --> 00:40:17,360 Speaker 1: guess every FED bank varies regional region, and the governor's 666 00:40:17,400 --> 00:40:20,880 Speaker 1: debate and complain. What would be your prescription for Janet 667 00:40:20,960 --> 00:40:23,239 Speaker 1: Yellen if you were to you know, you consult to 668 00:40:23,280 --> 00:40:24,640 Speaker 1: the O E c D. But if you were to 669 00:40:24,719 --> 00:40:27,720 Speaker 1: consult of the FED and have a cup of coffee 670 00:40:27,760 --> 00:40:30,320 Speaker 1: with Vice Chairman Fisher and share yelling, what would be 671 00:40:30,360 --> 00:40:35,560 Speaker 1: the white prescription? My prescription would be, both at the 672 00:40:35,719 --> 00:40:39,759 Speaker 1: national level and at the international level, to go back 673 00:40:39,840 --> 00:40:42,680 Speaker 1: to the government's and get the governments to address the 674 00:40:42,800 --> 00:40:47,080 Speaker 1: fundamental issues that are behind the current problems. Because, as 675 00:40:47,160 --> 00:40:49,640 Speaker 1: I said ready at the beginning, if this is an 676 00:40:49,719 --> 00:40:56,399 Speaker 1: insolvency problem, central banks, who can furnish liquidity, cannot deal 677 00:40:56,520 --> 00:40:59,359 Speaker 1: with an insolvency problem, and so they should go back 678 00:40:59,440 --> 00:41:03,239 Speaker 1: to the government now in the United and I'll make 679 00:41:03,280 --> 00:41:06,920 Speaker 1: you some sort of generic statements here the gooble the 680 00:41:06,960 --> 00:41:10,720 Speaker 1: global economy as a whole. Governments with room for maneuver 681 00:41:10,840 --> 00:41:13,399 Speaker 1: should use it. On the macro side. That would please 682 00:41:13,520 --> 00:41:17,640 Speaker 1: Kanes Um. Societies that have been run on a kind 683 00:41:17,680 --> 00:41:22,160 Speaker 1: of mercandilist basis keeping wages down to to to to 684 00:41:22,400 --> 00:41:26,319 Speaker 1: ensure that exports will be higher, okay, more competitive, they 685 00:41:26,320 --> 00:41:30,000 Speaker 1: should change that policy to start trying to increase domestic demand. 686 00:41:30,200 --> 00:41:34,000 Speaker 1: And you know the big concreas that I'm talking about, um, 687 00:41:34,640 --> 00:41:37,480 Speaker 1: Public and private investment should be encouraged in a way 688 00:41:37,520 --> 00:41:40,400 Speaker 1: that it has not been. I don't understand this hang 689 00:41:40,560 --> 00:41:43,680 Speaker 1: up about infrastructure spending, why there can't be more of 690 00:41:43,800 --> 00:41:46,399 Speaker 1: it when we so desperately needed and the interest rates 691 00:41:46,440 --> 00:41:49,320 Speaker 1: or solar all this is of the kinzie and stuff 692 00:41:49,320 --> 00:41:54,000 Speaker 1: on the demand side. On the supply side, um, again, 693 00:41:54,080 --> 00:41:57,200 Speaker 1: it's only the governments that could act. We need more 694 00:41:57,360 --> 00:42:00,560 Speaker 1: awareness of the fact that a lot of his debts 695 00:42:00,920 --> 00:42:05,160 Speaker 1: cannot be serviced and we should take steps to write 696 00:42:05,200 --> 00:42:09,400 Speaker 1: them off, to restructure them, to replace them with equity. Okay. 697 00:42:09,960 --> 00:42:12,920 Speaker 1: And lastly, there's all these structural reforms. And I can 698 00:42:13,000 --> 00:42:14,680 Speaker 1: tell you from my experience at the O E c 699 00:42:14,800 --> 00:42:17,480 Speaker 1: D there's a lot of low hanging fruit that you 700 00:42:17,520 --> 00:42:20,560 Speaker 1: can start with that you can to get the growth 701 00:42:20,719 --> 00:42:24,719 Speaker 1: rate up and make the debt more serviceable. Right, William White, 702 00:42:24,800 --> 00:42:27,040 Speaker 1: Please write another paper for the Dallas FAT as soon 703 00:42:27,080 --> 00:42:30,440 Speaker 1: as you can. William White is an economist. Some of 704 00:42:30,480 --> 00:42:33,480 Speaker 1: you will remember coming up on thirteen years ago his 705 00:42:33,680 --> 00:42:37,720 Speaker 1: historic discussion with Alan Greenspan at the Jackson Hall meetings 706 00:42:37,760 --> 00:42:40,839 Speaker 1: of the Kansas City FED. That was fabulous. We are 707 00:42:40,880 --> 00:42:44,120 Speaker 1: produced by y U n Our, Global Technical Director. Can 708 00:42:45,280 --> 00:42:47,840 Speaker 1: coldplay Feilio? It's Bloomberg's surveillance