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Speaker 1: Brunch you by Bank of America Mary Lynch with virtual reality,

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Speaker 1: virtually everything will change. Discover opportunities in a transforming world

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Speaker 1: be of a mL dot Com, slash VR, Mary Lynch,

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Speaker 1: Pierced Fenner and Smith Incorporated. Ye, Welcome to the Bloomberg

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Speaker 1: Surveillance Podcast. I'm Tom Keene with David Gura. Daily we

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Speaker 1: bring you insight from the best of economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg with

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Speaker 1: Us Edward S. Hyman, who is a rumored to actually

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Speaker 1: watch every once in a while. He's with ever Corps.

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Speaker 1: I s I and I want to get back to

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Speaker 1: the economy into what you many would say invented, and

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Speaker 1: that is the linkage of the economy into the equity markets.

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Speaker 1: This is a chart you and I know from Yale Management.

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Speaker 1: I've put it in terms of the Dow and not

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Speaker 1: the SMP on radio, folks, It's a gorgeous shot of

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Speaker 1: the depression in nine percent change log chart and up

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Speaker 1: we go and we just seem to prosper along the way.

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Speaker 1: Do you still have a belief in American exceptionalism and

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Speaker 1: in American capitalism way over my head. I'm I'm a practitioner,

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Speaker 1: and right now it looks like it's continuing to prosper. Uh.

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Speaker 1: This is a very important chart in that, uh, we're

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Speaker 1: learning more and more that the more the stock market

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Speaker 1: goes up, the more it helps uh optimism and consumer spending,

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Speaker 1: capital spending, and that's what's been going on. Also, house

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Speaker 1: prices have been going up, and the two together lift

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Speaker 1: consumer net worth and that's been driving the economy. But

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Speaker 1: that is an exceptional chart, and uh, well, I'd love

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Speaker 1: to take credit for it, but I think Mr Ibbotson

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Speaker 1: over at Yelle Management maybe would want to take credit

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Speaker 1: for this iconic log chart pick really years ed Hyman.

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Speaker 1: Within that, though, what's changed is the belief that there

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Speaker 1: are John Edwards to America's can we prosper and can

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Speaker 1: we all do better? Given the polarities that we see

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Speaker 1: in our society like in the healthcare debate today. So uh,

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Speaker 1: I think that if the economy keeps growing, uh, those

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Speaker 1: disparities will uh dissipate a little bit. But the main

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Speaker 1: thing I'm focused on is for the bottom of the

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Speaker 1: economy to get better. The top is doing fine. Uh.

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Speaker 1: And the main thing that needs to happen to get

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Speaker 1: that to work is for wages to accelerate. And I've

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Speaker 1: been disappointed in that. I thought wages by now would

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Speaker 1: be over three and there's still about two and a

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Speaker 1: half p uh at the unemployment rate today is four

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Speaker 1: point three, as you know, and I think it will

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Speaker 1: be three and a half a year from now. And uh,

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Speaker 1: it's just you know, continue to press on that. And

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Speaker 1: if that's true, Uh, then the odds are pretty good

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Speaker 1: that wages will pick up and that will help the

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Speaker 1: bottom of the economy. But how do you explain actually

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Speaker 1: that there was almost no wage growth? Is it the

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Speaker 1: quality of jobs being created in the US? Or is

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Speaker 1: it that CEO still don't feel very bright about the future,

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Speaker 1: that the animal spirits that we were talking about just

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Speaker 1: having really fully taken shape, fransty And I was, I was.

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Speaker 1: I was scared you would ask about that, because I

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Speaker 1: really I can't figure it out. When I travel around,

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Speaker 1: I don't hear about wages going up. Unemployment, like you know,

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Speaker 1: is really low. Unemployment claims are really low. Uh. So

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Speaker 1: my best guess is I just have to be patient

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Speaker 1: and maybe in two thousand eighteen, wages will finally start

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Speaker 1: to really pick up. But as your question alludes to,

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Speaker 1: wages are not picking up in where they're not picking

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Speaker 1: up in the UK and not picking up in Australia

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Speaker 1: and Canada the other Anglo Saxon English speaking countries, all

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Speaker 1: of which have low unemployment rates. But uh, I think

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Speaker 1: it will happen later on in this cycle. But do

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Speaker 1: you think it's and I know this is the impossible

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Speaker 1: question because actually we we've been asking so many people

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Speaker 1: and no one has the answer, which it goes back

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Speaker 1: also to the productivity puzzle. But do you think it's

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Speaker 1: psychological if central banks, for example, suddenly started raising rates

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Speaker 1: when that shocks CEOs into thinking that their world was

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Speaker 1: becoming harder, but but that the picture was rosier? No,

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Speaker 1: I think I think francying what will make wages go

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Speaker 1: up is that eventually you just won't have enough labor. Uh,

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Speaker 1: And whether it's in the energy space or in educational space,

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Speaker 1: people will start paying up or they'll start losing workers.

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Speaker 1: I do think that technology has been playing a role

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Speaker 1: were uh, technology has been replacing workers. And I think

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Speaker 1: that you're still, as you've mentioned, an overhang where we

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Speaker 1: they'll remember a little bit the O eight oh nine. Uh,

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Speaker 1: you know, big depression and uh. People are scared about that,

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Speaker 1: both in terms of asking for a pay increase and

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Speaker 1: for managers giving a big pay increase. Him and I

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Speaker 1: think the comments on the jobs are so important that

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Speaker 1: I want to go to this chart. We give Dean

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Speaker 1: macke formerly Barclay's point seven to a lot of credit

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Speaker 1: for a four percent view on unemployment. Here's the recent

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Speaker 1: leg down to a better unemployment and had to recapitulate

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Speaker 1: this out a year or so. You see as a

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Speaker 1: three and a half percent, which is better than we

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Speaker 1: were in the glory times of two thousand. Do we

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Speaker 1: get growth with that great unemployment rate? We get the

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Speaker 1: same we've been having. You get something like two maybe

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Speaker 1: three percent growth. But all during that big drop in

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Speaker 1: on the unemployment rate from tan down to four point three,

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Speaker 1: growth has been just about two. My view on unemployment

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Speaker 1: going to feint appercent was inspired by Dean Mackie. That's so,

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Speaker 1: that's funny you bring him up three and a half

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Speaker 1: unemployment by next year. Tom, this took me by surprise.

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Speaker 1: I know it took you by surprise. I just want

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Speaker 1: to hear a little bit more from from ed where

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Speaker 1: where are the industries that will lose the most jobs? Frency.

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Speaker 1: Let me explain how I get there. Earlier we looked

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Speaker 1: at the unemployment claims if you remember that chart down

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Speaker 1: so much, and the unemployment rate and unemployment claims stack

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Speaker 1: up pretty closely. And so the unemployment claims are the

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Speaker 1: ticket to why I think unemployment is going to come

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Speaker 1: down to three and a half percent. Uh. The places

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Speaker 1: that jobs are being created, as I mentioned earlier, in

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Speaker 1: the healthcare, higher education, the tech space, the new tech space,

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Speaker 1: and then sports and entertainment. Those are the places where

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Speaker 1: local economies are being driven. I mean, he claims Charter

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Speaker 1: her Francine is extraordinary. Again, this is claims adjusted for

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Speaker 1: population growth in America, and and it really talks about

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Speaker 1: one part of America you mentioned earlier, bringing the bottom

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Speaker 1: up as well. Is that done by policy or within

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Speaker 1: a locky in society? Is it done by the corporations

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Speaker 1: and investment? Has that become organic? We're in a self

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Speaker 1: feeding expansion. Uh, and that's the end for the end

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Speaker 1: of it. It It becomes pulling in. But right now these

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Speaker 1: sectors that I mentioned are coming together, and you also

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Speaker 1: have the millennials, and they're driving things. They're giving an

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Speaker 1: energy to local economies like Denver is just sort of

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Speaker 1: booming in the time we got left. I want to

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Speaker 1: know your thoughts in the future of global Wall Street

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Speaker 1: in New York, in London, and for that matter, in

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Speaker 1: our other geographies like Hong Kong and Dubai. It's pretty tough,

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Speaker 1: you know, the whole financial services business on the by side,

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Speaker 1: on the South side, it's a tough industry. I'm not

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Speaker 1: sure it's gonna get any better within the by side.

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Speaker 1: Are they still gonna buy ed Hyman research than I hope?

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Speaker 1: So this is important, but at a at a lower scale,

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Speaker 1: at a lower scale, Roger Altman in Bonus, Roger Edheim

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Speaker 1: is with us and the Red Sox are in first play.

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Speaker 1: Fred Seed, Yeah, te him. I like that. We need

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Speaker 1: to thank ed Edwards Great ed Hyman of eb CRIS.

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Speaker 1: I sincerely hope you come back very soon. I don't

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Speaker 1: want to start you with Mark Felli. He's the global

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Speaker 1: Chief investment Officer at ubs A Wealth Management. Mark great

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Speaker 1: to speak with you. As I mentioned, joining us from

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Speaker 1: Zurich today, you look at the FT one and you

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Speaker 1: look at it in dollar terms, it's back to where

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Speaker 1: it was before that Brexit vote one year ago. Today.

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Speaker 1: What does it tell us? What is what is this

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Speaker 1: crazy journey of the last year. Say to you about

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Speaker 1: about the market? Well, of course the uh, you know,

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Speaker 1: the foot seats done okay, but the the tound has

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Speaker 1: been whacked against the dollar or something like. And I

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Speaker 1: think you know what we've seen post the Great Financial

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Speaker 1: Crisis is just how much these currencies are the shock

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Speaker 1: absorber for some of the more political geopolitical move what's

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Speaker 1: your your outlook for sterling? How much has that changed

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Speaker 1: here in recent months? As we had that speech that

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Speaker 1: Theresa May gave before Parliament, as of course she had

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Speaker 1: the snap elections. Are the results of that? Now she

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Speaker 1: heads to Brussels for this EU as someone, how much

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Speaker 1: has it changed? Yeah, So we think that a lot

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Speaker 1: of the negative uh for the pound versus David dollar

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Speaker 1: have been priced in as Terrason May had signaled she'd

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Speaker 1: be willing to go for a hard Brexit. So we've

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Speaker 1: got it at one spot thirty over the six months.

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Speaker 1: And I think that what I would say though, is

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Speaker 1: we do sort of think that this Brexit will be

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Speaker 1: a ticking time bomb where you know, much like these

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Speaker 1: grease negotiations, they kind of go along and go along,

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Speaker 1: but nothing really gets done until you get down to

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Speaker 1: the wire. So it's it's going to be interesting to trade,

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Speaker 1: to trade around the UK assets for the next two years.

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Speaker 1: What do you make of of what she had to

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Speaker 1: say at this semit, ensuring the rights of those in

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Speaker 1: the European Union who have been living in Britain for

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Speaker 1: more than five years, providing a plan for those who

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Speaker 1: have been there for less than five beginning to develop

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Speaker 1: some of the strictures she'd like to see in place.

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Speaker 1: I believe with the hopes here of appeasing those in

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Speaker 1: the European Union and those who are from the European

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Speaker 1: Union living in the UK who are worried about their

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Speaker 1: their status there, does that provide more certainty just getting

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Speaker 1: those broad contours of a plan that she outlined over

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Speaker 1: the over the last couple of days. Yeah, I don't

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Speaker 1: think it does. I think that what is I think

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Speaker 1: that the UK is trying to uh awfer or negotiate.

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Speaker 1: But you know that if you listen to what Europe saying,

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Speaker 1: you know it's not a supermarket. You can't pick and choose.

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Speaker 1: We're listening. They they have their own views, particularly around

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Speaker 1: the free movement of people. Um and and I think

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Speaker 1: they're going to end up dictating more of the terms

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Speaker 1: than than the UK. Good morning, David Garra. Where were

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Speaker 1: you a year ago? Watch all of the sunfold? I

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Speaker 1: was actually at it. There was a British pub near

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Speaker 1: murray Hill the early evening and why isn't a shocked

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Speaker 1: girl was in a Brooklyn bar, probably having some overprice

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Speaker 1: British Mark Mark Hafway with us with ubus Mark. Where

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Speaker 1: were you a year ago? I remember it very well.

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Speaker 1: I was on the shores of Lake Como meeting with

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Speaker 1: fun managers, all watching the tape and and I remember

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Speaker 1: we all went to bed very late, feeling rather sanguine,

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Speaker 1: and we all started texting each other at four am.

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Speaker 1: What you know? What is going on exactly? And that

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Speaker 1: you know? First of all, let me commented, girls in

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Speaker 1: a bar in Afway's in Lake Como and I'm stuck

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Speaker 1: in I'm stuck at his studio in London with John Farrow.

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Speaker 1: I don't know what that's about. Um. It was really

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Speaker 1: remarkable to see that late night, David. And really there

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Speaker 1: was a whisper at ten pm London time, and then

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Speaker 1: the whole next day was just real. I remember folks

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Speaker 1: having dinner exhausted after literally no sleep for thirty hours

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Speaker 1: in Brown's Hotel over on the edge of Mayfair, and

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Speaker 1: the quiet on the streets. David Gerrow, I will never

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Speaker 1: forget the rest of my life. It was absolutely surreal. Mark.

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Speaker 1: Let me ask you about what we learned about the

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Speaker 1: euro Area today, recording its fastest expansion in six years

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Speaker 1: in the second and second quarter. How optimistic are you

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Speaker 1: about Europe right now? Where do you see opportunity in

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Speaker 1: the Eurozone? Yeah, so we do like Europe. We are

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Speaker 1: overweight the Euro versus the dollar, and we're overweight European

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Speaker 1: equities versus UK equities. Uh and and and when you

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Speaker 1: when you look more glad. We're gonna talk about emerging

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Speaker 1: markets here in just a little while on the show.

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Speaker 1: But where do you see opportunity in the emerging markets?

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Speaker 1: Are you? Are you of the camp here saying that

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Speaker 1: amid all of the concern over the central banking and

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Speaker 1: the prospects of fiscal reform, tax reform here in the

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Speaker 1: US developed markets, are emerging markets are more attractive. We're

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Speaker 1: not saying that emerging markets are more attracts it currently

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Speaker 1: as a group, I think for the emerging markets to

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Speaker 1: do well, uh, we think they'll they'll do Okay, you

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Speaker 1: need that base. We believe of the certainly the United

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Speaker 1: States doing well, and I think, um, you know, we

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Speaker 1: prefer to stay in developed markets, but certainly within within

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Speaker 1: the emerging markets, uh, places like China should continue to

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Speaker 1: do well. What do people do that aren't in the market.

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Speaker 1: They look at the valuations. They keep it simple in

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Speaker 1: their analysis. They look at price to earnings. How do

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Speaker 1: you rationalize the acquisition of shares right now? Mark? Yeah,

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Speaker 1: I think that the key sense the financial crisis has

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Speaker 1: remained central bank policy as a driver. That's what's taken

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Speaker 1: so much volatility out of this system. And to me,

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Speaker 1: I don't want to over the over reductivist here, but

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Speaker 1: with that inflation low, the central banks continue to have

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Speaker 1: room to maintain this oversized stimulus and that has been

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Speaker 1: supportive for markets and supportive of very low interest rates.

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Speaker 1: So I think what's new that people have to somewhat

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Speaker 1: new is people need to weigh that against when they

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Speaker 1: want to call the end of this cycle. How do

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Speaker 1: you counsel clients to to navigate the low volatility that

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Speaker 1: we have seen and continue to see, how how do

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Speaker 1: you deal with that particular challenge. Well, it uh. It

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Speaker 1: has created an opportunity for investors who are concerned about

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Speaker 1: draw downs to add some relatively cheap protection uh for

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Speaker 1: you know, for equity industry. So that's a popular way

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Speaker 1: of dealing with it um. And then you know the

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Speaker 1: the other one. I think what we found is we

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Speaker 1: actually just surveyed our clients and over them think that

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Speaker 1: this is the most uncertain period in history. And and

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Speaker 1: it's very interesting when you compare that what the markets

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Speaker 1: are telling us new highs uh and very low volatility.

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Speaker 1: And I think it I think it gets to this

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Speaker 1: dynamic of forces that are extraordinary today, such as central

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Speaker 1: bank polity, which we we know eventually will end, and

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Speaker 1: our look out on a future which is much more uncertain,

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Speaker 1: where governments are in play, national debt is high, and

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Speaker 1: population changes are are moving demographics all over the world.

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Speaker 1: And I think part of what we have the Council

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Speaker 1: Investors on is to take those two separate buckets and

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Speaker 1: separate them a little bit. Cubs at with a new

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Speaker 1: white paper. Millennials, the global guardians of capital mark let

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Speaker 1: me ask you, first of all, how millennials regard wealth,

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Speaker 1: wealth creation, accruing wealth, and what they intend to do

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Speaker 1: with them. It's a great question. What I think we

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Speaker 1: found is so interesting is that there are a lot

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Speaker 1: of stereotypes about millennials, this generation born between two and

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Speaker 1: that they're very selfish and me centered, and actually we've

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Speaker 1: found kind of the opposite. Uh. The majority of them

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Speaker 1: are willing to forego, for example, some upshuntder turn in

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Speaker 1: their investments if those investments are more sustainable or have

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Speaker 1: a better impact on society. So that that is one

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Speaker 1: of the trends that I think is very important for

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Speaker 1: us to look at. And of course, millennials are increasingly

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Speaker 1: inheriting from the baby boomer generation and soon are going

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Speaker 1: to have twenty four trillion in wealth in their command.

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Speaker 1: Do they have a different inclination of what they'd like

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Speaker 1: to invest in? Uh? When it comes to the types

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Speaker 1: of companies, the types of sectors they're interested in the

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Speaker 1: social responsibility of those those companies in particular, how do

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Speaker 1: you how do you adjust to deal with that? Well,

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Speaker 1: it has forced us to adjust in in some ways,

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Speaker 1: but I think in very positive ways of kind of

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Speaker 1: helped us to be emboldened to make a commitment of

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Speaker 1: investing five billion dollars over the next five years in

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Speaker 1: impact investing too, to open that up investments that not

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Speaker 1: just have a financial return but also help help society,

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Speaker 1: and that I think for us is one of the

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Speaker 1: key differences. But actually on some of these things like

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Speaker 1: digital uptake and like sustainability, millennials may lead the way,

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Speaker 1: but it's something that we see as a water shift

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Speaker 1: for our entire investing. Really to me, folks, just so

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Speaker 1: you know, the twenty four trillion dollar wealth transfer that's

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Speaker 1: happening at the keen household, that's most of that most

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Speaker 1: John Tucker, that's most of the transferrees are many many

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Speaker 1: were their all their middle names or tuition um mark.

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Speaker 1: When you when you look at the millennials, and I'm

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Speaker 1: not sure the age bracket, to me, the distinctive feature,

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Speaker 1: seriously is their lack of economic growth. We have so

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Speaker 1: many kids in their twenties even in their thirties who

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Speaker 1: have never known what we call normal g d P.

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Speaker 1: Are they ever going to see the normal economic growth

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Speaker 1: we all enjoyed? Well, you know, I think that this

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Speaker 1: this view of what is normal, you know, three three

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Speaker 1: percent growth plus in in the United States. We're all

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Speaker 1: we're all waiting for the comeback of that. I think

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Speaker 1: I think it's still possible if some of what the

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Speaker 1: millennials are doing around connectivity uh starts to trickle out

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Speaker 1: of our Look look just looking at social media and

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Speaker 1: into things like more productivity in the health care sector

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Speaker 1: for example, that that would be one of my one

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Speaker 1: of my hopes, or more productivity and connected transportation systems

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Speaker 1: and more automation there So that I do believe the

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Speaker 1: still hope to get some of those millennials out of

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Speaker 1: their parents basement, right, Mark Cafley, thank you so much,

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Speaker 1: out of their parents based maybe with them paying their

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Speaker 1: own phone bill. Well, Mark Cathley's with u BIS brought

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Speaker 1: you by Bank of America. Mary Lynch with virtual reality

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Speaker 1: virtually everything will change, Discover opportunities in a transforming world.

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Speaker 1: B of a, mL dot Com, slash VR, Mary Lynch,

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Speaker 1: Pierced Fenner and Smith Incorporated. We had a great conversation

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Speaker 1: this morning with Edward Hyman of evercreps I S I

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Speaker 1: Two things. First of all, he said he really cares

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Speaker 1: about p M I S, Like when Bloomberg has a

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Speaker 1: p M I S Hyman lean sorre. He really I

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Speaker 1: was surprised. He really emphasized the value he gets out

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Speaker 1: of p m I, purchasing managers, Indexes, and of course

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Speaker 1: the other thing which I think will make global headlines

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Speaker 1: this weekend. He believes in a three and a half

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Speaker 1: percent unemployment. Right, we're not at full full full employment. Listen,

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Speaker 1: very good, very good, closing the right now, closing. We

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Speaker 1: wanted to get Craig Moffett in with Moffatt Nathanson, Uh,

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Speaker 1: just just to talk about the chaos of the Michael

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Speaker 1: Nathanson Craig Moffatt world. Craig, sort of an open discussion

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Speaker 1: this morning, wonderful day. Have you with us? What part

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Speaker 1: of your world is most chaotic? Now? Um? Well, I

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Speaker 1: I can speak from my distribution side better than than Michael's, right,

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Speaker 1: but we want both both, but both are pretty chaotic.

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Speaker 1: Um And in some ways I think you know the

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Speaker 1: real action is going on right at the intersection between

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Speaker 1: the two, in that the launch of all of these

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Speaker 1: new virtual um M v p d s as they're called,

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Speaker 1: or or virtual cable operators, the the YouTube TVs and

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Speaker 1: you lose and what have you. UM is a fascinating

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Speaker 1: thing to watch, and there's you know, one of the

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Speaker 1: simplest observations out of all of this is you've got

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Speaker 1: all of these people that are in ring the business

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Speaker 1: for seemingly some other reason besides that pedestrian objective of

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Speaker 1: actually making money. Um. You know, you've got Google and

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Speaker 1: YouTube that seemed to be entering it because they want

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Speaker 1: to eventually leverage it for advertising revenue, so they don't

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Speaker 1: care whether they make any money on the product itself.

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Speaker 1: And you've got Hulu that's trying to do it, um

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Speaker 1: to support distribution of the network, so they aren't interested

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Speaker 1: in actually making any money on the distribution business. Um.

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Speaker 1: You've got direct TV that's using it as a way

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Speaker 1: now to help sell wireless subscriptions. And so you're getting

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Speaker 1: products that used to be sold at a hundred dollars

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Speaker 1: in the market for thirty five dollars and nobody's makes

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Speaker 1: any money and it's driving down. Okay, this is exactly

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Speaker 1: who I wanted to go. And and the dovetail of this,

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Speaker 1: folks is I really look, I look like everybody else.

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Speaker 1: I look at the ratings in the industry, and Craig

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Speaker 1: I would suggest Mr Trump has been good for cable

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Speaker 1: TV news like you know, good morning at MSNBC to

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Speaker 1: Laurence O'Donnell, who's just killing it behind Rachel Maddow with

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Speaker 1: his work. I mean, Larry's just killing it in TV.

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Speaker 1: Can you subscribe, Craig to the idea that cable TV

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Speaker 1: is done? Well, No, cable tv is not done. But

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Speaker 1: remember when you say cable tv, cable tv is not

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Speaker 1: a single business. It's really a whole value chain. It's

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Speaker 1: a whole bunch of businesses, right. Um. When some people

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Speaker 1: mean cable TV, they mean the video distribution coming from

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Speaker 1: people like Comcast and Charter and Direct TV. Other people.

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Speaker 1: When they say k the cable tv, they mean the

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Speaker 1: networks themselves, Um, whether it's CNN or or UM or

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Speaker 1: the smaller ones Bravo or the integrated ones like Turner

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Speaker 1: in USA. Other people. When they say cable tv they

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Speaker 1: mean the production of the shows, so HBO or what

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Speaker 1: have you. Those are all part of a big ecosystem,

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Speaker 1: and there's some strengths in there, some weaknesses in that ecosystem. Think,

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Speaker 1: generally speaking, the production of content, so the studio side

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Speaker 1: is actually quite healthy these days. There's a lot of

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Speaker 1: good content being produced and they're still finding lots of

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Speaker 1: places to sell it and make money. The the aggregation

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Speaker 1: function of content, that is the concept of a cable

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Speaker 1: network is less healthy. Um. The concept of taking a

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Speaker 1: bunch of different shows and creating a schedule out of

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Speaker 1: them that runs twenty four hours a day, is starting

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Speaker 1: to be a pretty anachronistic concept, right, So, so the

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Speaker 1: value of the of the network piece is not that hot.

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Speaker 1: The value of the distribution sides falling apart. The physical

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Speaker 1: layer of distributions great broadband and and if you're a

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Speaker 1: physical infrastructure provider like a cable operator, that's fine. But

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Speaker 1: if you're aggregating those networks and selling them to consumers

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Speaker 1: like direct TV or addition network um, and you don't

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Speaker 1: have a broadband business, well, that's not a good place

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Speaker 1: to be. Where are we in terms of experimentation? In

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Speaker 1: other words, you have a lot of these these cable

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Speaker 1: networks and providers trying any number of ways to distribute content.

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Speaker 1: Are we still just trying to figure out what works,

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Speaker 1: throwing something at the wall to see what sticks? Or

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Speaker 1: is there a company? Are there companies who have figured

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Speaker 1: this out? We're now seeing others emulate them. It's a

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Speaker 1: great question. I think I would say we're in sort

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Speaker 1: of iteration one dotto, which is to say, we're still

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Speaker 1: in the phase where the old media companies UM, that is,

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Speaker 1: the media companies that we think of today as the

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Speaker 1: big media companies, the Disneys and the Viacoms and the

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Speaker 1: Foxes and what have you, are trying all of these

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Speaker 1: new combinations of the old content UM to try to

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Speaker 1: make the perfect skinny bundle, so to speak of is

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Speaker 1: it that customers want Discovery but they don't want t

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Speaker 1: N T Or is it that they want UM ESPN

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Speaker 1: but they don't want Fox Regional Sports or whatever it is.

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Speaker 1: And people are trying all these different combinations. But that's

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Speaker 1: what I mean by one dotto. UM. In some ways,

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Speaker 1: that's sort of a it's it's sort of a training

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Speaker 1: wheels type ified to say that what we're really looking

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Speaker 1: for is just a reaggregation of the old content. What's

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Speaker 1: much more revolutionary is going on in the background UM

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Speaker 1: with probably a lot less attention, but but ultimately they

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00:25:13,440 --> 00:25:17,800
Speaker 1: may be more important that whole types of consumption are

431
00:25:18,080 --> 00:25:22,240
Speaker 1: are crowding out the concept of traditional Well, let's let's

432
00:25:22,240 --> 00:25:24,159
Speaker 1: come back, Craig. We're gonna have to come back on

433
00:25:24,280 --> 00:25:27,760
Speaker 1: this right now. This is really important conversation Craig Moffett

434
00:25:28,000 --> 00:25:30,920
Speaker 1: on how we consume all this media and can anybody

435
00:25:31,000 --> 00:25:33,720
Speaker 1: make any money out of down the road will continue

436
00:25:33,760 --> 00:25:37,520
Speaker 1: with Craig Moffatt of Moffatt Nathanson. Craig, you know spectrum

437
00:25:37,640 --> 00:25:40,280
Speaker 1: enterprises all these phone lines out there. What I see

438
00:25:40,320 --> 00:25:43,800
Speaker 1: are two major players, Verizon as an example, with a

439
00:25:43,880 --> 00:25:48,320
Speaker 1: too good to be true five dividend. What thinketh you

440
00:25:48,600 --> 00:25:54,080
Speaker 1: a Verizon's dividend? Is it a legit utility dividend? Well,

441
00:25:54,520 --> 00:25:59,360
Speaker 1: you know, it's a great question, and the I think, yeah,

442
00:25:59,520 --> 00:26:04,720
Speaker 1: Look then in the short term is Verizon's dividend is fined? Um?

443
00:26:05,960 --> 00:26:10,200
Speaker 1: But but the there is a fair um point you raise.

444
00:26:10,280 --> 00:26:13,920
Speaker 1: And when you mentioned Spectrum Business Services your sponsor, um,

445
00:26:15,119 --> 00:26:19,159
Speaker 1: that's a big segment for Verizon and A T and T.

446
00:26:19,359 --> 00:26:22,680
Speaker 1: And where Spectrum Business Services getting its customers from from

447
00:26:22,840 --> 00:26:26,120
Speaker 1: Verizon and A T and t. Um. We just published

448
00:26:26,119 --> 00:26:29,399
Speaker 1: a note earlier this week that points out the end

449
00:26:29,440 --> 00:26:32,520
Speaker 1: of last week that points out so the let's take

450
00:26:32,560 --> 00:26:35,440
Speaker 1: A T and T for a second, their commercial wire

451
00:26:35,520 --> 00:26:39,200
Speaker 1: line services business, something that nobody spends any time talking about.

452
00:26:39,520 --> 00:26:41,320
Speaker 1: You hardly ever get a question about if people all

453
00:26:41,520 --> 00:26:44,680
Speaker 1: want to talk about wireless, postpaid net ads and r

454
00:26:44,760 --> 00:26:48,320
Speaker 1: poos and things like that. The wire line business services

455
00:26:48,359 --> 00:26:50,560
Speaker 1: at a T and T is larger than the entire

456
00:26:50,680 --> 00:26:53,800
Speaker 1: company of Time Warner that they're buying. It's bigger than

457
00:26:54,040 --> 00:26:58,520
Speaker 1: the studio, the cable networks, HBO, um Warner Brothers, the

458
00:26:58,560 --> 00:27:02,480
Speaker 1: whole thing combined, and it's shrinking now at seven percent

459
00:27:02,560 --> 00:27:05,639
Speaker 1: a year because of the rate that cable is taking

460
00:27:05,720 --> 00:27:09,119
Speaker 1: market share UM in the enterprise segment and the business

461
00:27:09,160 --> 00:27:14,240
Speaker 1: services segment UM. It makes it incredibly hard for A

462
00:27:14,400 --> 00:27:18,400
Speaker 1: T and T UM and Verizon um to actually grow

463
00:27:18,720 --> 00:27:22,400
Speaker 1: as companies because there's so many places where they face

464
00:27:22,480 --> 00:27:26,800
Speaker 1: competition um. That and and as the so called incumbents

465
00:27:26,840 --> 00:27:29,200
Speaker 1: in those businesses, they have nowhere to go but down.

466
00:27:30,359 --> 00:27:33,040
Speaker 1: Let me ask you about the so called triple bundle,

467
00:27:33,240 --> 00:27:37,159
Speaker 1: the triple play. Now, looking at a quad play, are

468
00:27:37,200 --> 00:27:39,680
Speaker 1: we likely to have that four things coming together as

469
00:27:39,760 --> 00:27:41,840
Speaker 1: one you you'll be able to get I mean, help

470
00:27:41,880 --> 00:27:43,399
Speaker 1: me help me with what just the fourth thing would be?

471
00:27:43,440 --> 00:27:46,200
Speaker 1: That would be mobile services as well. Yes, yeah, the

472
00:27:46,520 --> 00:27:51,560
Speaker 1: quad play has historically meant uh meant adding mobile to

473
00:27:51,640 --> 00:27:54,040
Speaker 1: the mix, although you do have to wonder how much

474
00:27:54,160 --> 00:27:57,760
Speaker 1: longer UM the one of the other legs of the stool,

475
00:27:57,880 --> 00:28:01,240
Speaker 1: the wired voice business, UM is really all that relevant

476
00:28:01,320 --> 00:28:03,560
Speaker 1: business UM. And now, as we were talking about in

477
00:28:03,600 --> 00:28:06,800
Speaker 1: the last segment, there are there are questions about the

478
00:28:06,920 --> 00:28:11,080
Speaker 1: linear delivery of video. Is video really a separate business anymore?

479
00:28:11,280 --> 00:28:14,960
Speaker 1: Or is video just a different stream of ones and

480
00:28:15,080 --> 00:28:18,160
Speaker 1: zeros delivered over the broadband pipe that somebody else, whether

481
00:28:18,240 --> 00:28:22,159
Speaker 1: it's Hulu or Amazon or Google, is ultimately selling UM

482
00:28:22,440 --> 00:28:25,920
Speaker 1: and so the cloud play may collapse back down. That said,

483
00:28:25,960 --> 00:28:30,800
Speaker 1: there's there is clearly a convergence coming between wired infrastructure

484
00:28:30,880 --> 00:28:34,480
Speaker 1: and wireless infrastructure. Those two infrastructures are starting to look

485
00:28:34,560 --> 00:28:37,480
Speaker 1: more and more like each other. If you take wireless

486
00:28:37,600 --> 00:28:40,960
Speaker 1: networks and you make them denser and denser and denser

487
00:28:41,080 --> 00:28:43,320
Speaker 1: to support more and more and more users and more

488
00:28:43,360 --> 00:28:46,000
Speaker 1: and more data, well those networks start to look more

489
00:28:46,040 --> 00:28:48,080
Speaker 1: and more like wired networks. They start to look like

490
00:28:48,600 --> 00:28:52,000
Speaker 1: a wired network with lots of small wireless endpoints on

491
00:28:52,080 --> 00:28:54,040
Speaker 1: the end. And in some ways that's what a wired

492
00:28:54,080 --> 00:28:56,280
Speaker 1: network is today. To right, you're you don't connect to

493
00:28:56,360 --> 00:28:59,720
Speaker 1: your cable system via either net cable anymore. You connect

494
00:28:59,760 --> 00:29:03,320
Speaker 1: to your cable via wireless, hidpoint case WiFi. We've we've

495
00:29:03,400 --> 00:29:05,479
Speaker 1: seen Apple sort of dip its toe into the creation

496
00:29:05,520 --> 00:29:08,320
Speaker 1: of content recently. Here. Do you think that we're going

497
00:29:08,360 --> 00:29:10,120
Speaker 1: to see here in the near term of the medium

498
00:29:10,280 --> 00:29:13,960
Speaker 1: term a Silicon Valley company getting into production in a

499
00:29:14,120 --> 00:29:18,200
Speaker 1: in a bigger way. Well, already Amazon is doing that.

500
00:29:18,600 --> 00:29:21,600
Speaker 1: Um and Uh, there are a lot of people who

501
00:29:21,640 --> 00:29:25,000
Speaker 1: would say that Netflix is a Silicon Valley company. Um

502
00:29:25,320 --> 00:29:28,400
Speaker 1: and so yeah, I think that's that's clear. Whether we'll

503
00:29:28,440 --> 00:29:30,640
Speaker 1: see Apple do that, I don't know. I wouldn't. I

504
00:29:30,680 --> 00:29:34,640
Speaker 1: wouldn't pretend to have any particular insight into what Apple

505
00:29:34,760 --> 00:29:38,280
Speaker 1: strategic plans are with respect to content creation. Um. You'll

506
00:29:38,320 --> 00:29:43,360
Speaker 1: certainly see um more and more activity around bidding for rights,

507
00:29:43,440 --> 00:29:45,840
Speaker 1: and in some ways those two things are quite analogous.

508
00:29:45,840 --> 00:29:49,600
Speaker 1: You know, there's always talk about will the NFL, um well,

509
00:29:49,800 --> 00:29:55,760
Speaker 1: will alternative distribution player bit for the NFL, And eventually

510
00:29:55,880 --> 00:29:58,360
Speaker 1: the answer is probably yes. Kraig Moffatt where this will

511
00:29:58,360 --> 00:30:02,240
Speaker 1: be with them in a second here Moffatt Nathanson. This morning,

512
00:30:02,680 --> 00:30:06,120
Speaker 1: there's a really interesting headline out of Europe. Mr McCraw

513
00:30:06,200 --> 00:30:10,200
Speaker 1: of France and Chancellor Miracle of Germany are holding a

514
00:30:10,360 --> 00:30:14,640
Speaker 1: joint news conference after the EU summit. Friends in Aqua

515
00:30:14,760 --> 00:30:16,640
Speaker 1: made clear to me this morning this is a big

516
00:30:16,760 --> 00:30:20,320
Speaker 1: deal that they will hold. Basically the briefing is a

517
00:30:20,480 --> 00:30:24,000
Speaker 1: joint summit. Will have much more on that. Mr Macrosse.

518
00:30:24,040 --> 00:30:27,240
Speaker 1: As Europe needs France Germany working together. I guess no

519
00:30:27,360 --> 00:30:32,200
Speaker 1: surprise they're separately in Brussels. Mr Tusk of the European

520
00:30:32,320 --> 00:30:38,160
Speaker 1: Union says Prime Minister Mayz citizens offer is below our expectations.

521
00:30:38,240 --> 00:30:41,040
Speaker 1: That as a prelude to maybe hearing from Prime Minister

522
00:30:41,120 --> 00:30:44,880
Speaker 1: may Mr Younger speaking right now as well, David Gura, Yeah,

523
00:30:45,160 --> 00:30:49,080
Speaker 1: you know, I I wonder where you see Craig likely

524
00:30:49,160 --> 00:30:51,600
Speaker 1: combinations in the future. What's going to drive consolidation for

525
00:30:51,680 --> 00:30:56,800
Speaker 1: their consolidation in the distribution space. UM. My guess is

526
00:30:57,160 --> 00:31:00,600
Speaker 1: UM that you'll see less of it than than people think.

527
00:31:00,800 --> 00:31:04,600
Speaker 1: UM the one that everybody talks about, and for good reason,

528
00:31:04,600 --> 00:31:07,080
Speaker 1: because it's the one that is truly likely. It's eventually

529
00:31:07,160 --> 00:31:10,600
Speaker 1: sprint in t mobile. UM will will make a real

530
00:31:10,680 --> 00:31:12,920
Speaker 1: effort to come together. How quickly that will happen, I

531
00:31:12,960 --> 00:31:17,120
Speaker 1: don't know, because there's lots of complicated questions about valuation

532
00:31:17,320 --> 00:31:20,680
Speaker 1: and complicated questions about regulatory and that sort of thing.

533
00:31:20,720 --> 00:31:24,040
Speaker 1: But I think they both come to the conclusion that

534
00:31:24,800 --> 00:31:27,840
Speaker 1: all these other alternatives for each of them weren't really

535
00:31:27,880 --> 00:31:30,200
Speaker 1: all that real to begin with, and so they're going

536
00:31:30,240 --> 00:31:33,240
Speaker 1: to end up end up with each other. Outside of that,

537
00:31:33,360 --> 00:31:36,400
Speaker 1: it's harder to say. And all Teeth is talking about

538
00:31:36,440 --> 00:31:39,440
Speaker 1: they'd love to own Cox. There was an article earlier

539
00:31:39,520 --> 00:31:42,480
Speaker 1: this week UM that so would Charter. But I don't

540
00:31:42,520 --> 00:31:45,560
Speaker 1: think Cox is for email um and so I don't

541
00:31:45,600 --> 00:31:48,600
Speaker 1: see a lot of more consolidation coming in cable. I

542
00:31:48,640 --> 00:31:51,480
Speaker 1: don't see Cable buying a wireless operator, even though people

543
00:31:51,560 --> 00:31:54,160
Speaker 1: like to talk about that all the time. UM. And

544
00:31:55,040 --> 00:31:57,960
Speaker 1: and so most of the this stuff is really just

545
00:31:58,160 --> 00:32:00,520
Speaker 1: arm waving at this point. I think the big deals

546
00:32:00,560 --> 00:32:02,560
Speaker 1: are probably going to be fewer and further between the

547
00:32:02,720 --> 00:32:05,120
Speaker 1: people things very quickly. When you and Michael Nathanson are

548
00:32:05,160 --> 00:32:08,040
Speaker 1: in speaking terms and you're talking about where the value

549
00:32:08,120 --> 00:32:10,480
Speaker 1: is in the market, where is the value within the

550
00:32:10,600 --> 00:32:17,280
Speaker 1: Moffatt Nathanson space. Um. It's hard to sound creative and

551
00:32:18,200 --> 00:32:22,080
Speaker 1: surprising about this, but right now, the businesses that are

552
00:32:22,160 --> 00:32:26,160
Speaker 1: gaining the most share and have the most value are

553
00:32:26,320 --> 00:32:30,880
Speaker 1: probably still the Googles and facebooks and the ones that

554
00:32:31,040 --> 00:32:36,760
Speaker 1: continue to gain UM the advertising dollars at the fastest pace. UM.

555
00:32:36,840 --> 00:32:42,360
Speaker 1: So Michael likes those stocks. UM. There are some value plays,

556
00:32:42,520 --> 00:32:46,560
Speaker 1: some rebounds. I like, for example, Verizon. I think Verizon

557
00:32:46,800 --> 00:32:50,880
Speaker 1: is is oversold and is is a better business than

558
00:32:50,920 --> 00:32:53,040
Speaker 1: most people give it credit for. But it's not a

559
00:32:53,080 --> 00:32:58,040
Speaker 1: structurally great business. UM. Cable is a structurally great business.

560
00:32:58,080 --> 00:33:03,360
Speaker 1: But the valuations are right reflected. So there's fewer there's

561
00:33:03,440 --> 00:33:06,280
Speaker 1: fewer real opportunities on my side of the coverage, the

562
00:33:06,320 --> 00:33:09,600
Speaker 1: distribution side, probably than there are in Michael's in the

563
00:33:09,640 --> 00:33:13,560
Speaker 1: internet and content. We gotta cut you off. Craig Moffatt,

564
00:33:13,640 --> 00:33:15,560
Speaker 1: Thank you so much generous of you to join us

565
00:33:15,600 --> 00:33:18,320
Speaker 1: on a Friday away from your clients. Mr Moffatt works

566
00:33:18,320 --> 00:33:22,400
Speaker 1: with Michael Nathanson. Moffatt Nathanson. We protect their copyright. I'm

567
00:33:22,400 --> 00:33:25,080
Speaker 1: not going to send you out. They're gorgeous. Hulu charts

568
00:33:25,520 --> 00:33:27,880
Speaker 1: about Hulus. I don't even know what Hulu is, David,

569
00:33:29,600 --> 00:33:33,120
Speaker 1: Hula hl It's like you get TV, you get t

570
00:33:33,560 --> 00:33:36,560
Speaker 1: I'm too old for this. I want to zee us

571
00:33:36,600 --> 00:33:51,360
Speaker 1: with rabbit ears, David girl. Why don't you have the

572
00:33:51,440 --> 00:33:54,240
Speaker 1: privilege of bringing in the gentleman from Bose. Yes, that

573
00:33:54,240 --> 00:33:56,440
Speaker 1: would be Max boch is, former US Ambassador to China,

574
00:33:56,480 --> 00:33:59,000
Speaker 1: former US Senator from Montana. Of course, he was the

575
00:33:59,160 --> 00:34:01,960
Speaker 1: chairman of the Senate Committee on Financing. In that capacity

576
00:34:02,680 --> 00:34:04,880
Speaker 1: had a big role in getting the Affordable Care Act

577
00:34:05,000 --> 00:34:07,440
Speaker 1: through the Senate through Congress. I wonder, first of all,

578
00:34:07,520 --> 00:34:10,200
Speaker 1: what you would counsel your Democratic colleagues at this point.

579
00:34:10,239 --> 00:34:12,400
Speaker 1: It seems like there were plenty of Republicans who were

580
00:34:12,480 --> 00:34:15,720
Speaker 1: upset with how this process unfolded, the secret secrecy surrounded

581
00:34:15,719 --> 00:34:19,560
Speaker 1: the drafting of this piece of legislation. What should Democrats

582
00:34:19,640 --> 00:34:21,520
Speaker 1: do now allow all of this to play out, Allow

583
00:34:21,560 --> 00:34:23,840
Speaker 1: Republicans to hash out what this bill looks like, what

584
00:34:24,000 --> 00:34:26,200
Speaker 1: the what's gonna turn what what the draft is going

585
00:34:26,239 --> 00:34:28,000
Speaker 1: to turn into? Or should they take a more active

586
00:34:28,120 --> 00:34:34,040
Speaker 1: role here? Well, hope springs eternal um and if I

587
00:34:34,160 --> 00:34:37,640
Speaker 1: were in the Senate Council, let's try that's sit down

588
00:34:37,719 --> 00:34:40,400
Speaker 1: with Mr for coonell Um. Let's see if they can

589
00:34:40,480 --> 00:34:44,000
Speaker 1: work something out here that's um or both parties are

590
00:34:44,040 --> 00:34:47,920
Speaker 1: talking to each other. I think that's a bit difficult

591
00:34:47,960 --> 00:34:53,000
Speaker 1: to achieve. That's probably a bridge too far. Alternatively, I

592
00:34:53,040 --> 00:34:57,600
Speaker 1: would just explain what's in the bill. I would expose

593
00:34:57,719 --> 00:35:00,200
Speaker 1: what's in the bill. It is an outrage. Frankly, it

594
00:35:00,280 --> 00:35:04,280
Speaker 1: is a huge transfer of wealth from lower income people

595
00:35:04,600 --> 00:35:08,960
Speaker 1: to upper income people. That is cutting healthcare benefits for

596
00:35:09,600 --> 00:35:13,560
Speaker 1: the lower income people in the Medicaid and transfer that

597
00:35:13,680 --> 00:35:15,560
Speaker 1: to a big tax cut for the most wealthy. You know,

598
00:35:15,640 --> 00:35:18,279
Speaker 1: that's just it's just a mean spirited bill. And it's

599
00:35:18,320 --> 00:35:20,960
Speaker 1: more that's exposed. The more that's known, the more I

600
00:35:21,080 --> 00:35:25,320
Speaker 1: think buying a good service to American people. Next question

601
00:35:25,360 --> 00:35:27,560
Speaker 1: is do you stand up and Philiposter and tried to stop.

602
00:35:27,640 --> 00:35:31,799
Speaker 1: I don't know the Republicans will be able to use

603
00:35:31,920 --> 00:35:34,719
Speaker 1: procedural tactics to get the bill up and vote on it.

604
00:35:35,120 --> 00:35:37,960
Speaker 1: After all, there are other majorities so they control the rules. Um.

605
00:35:38,040 --> 00:35:40,720
Speaker 1: So I would explain more why this is a bad idea.

606
00:35:41,040 --> 00:35:43,600
Speaker 1: Help us understand the way the majority leader works. I

607
00:35:43,680 --> 00:35:46,560
Speaker 1: know that you've worked along aside him for for many years.

608
00:35:47,000 --> 00:35:49,279
Speaker 1: Uh is he is he going to resist taking a

609
00:35:49,320 --> 00:35:51,040
Speaker 1: bill to the floor if he doesn't have the votes?

610
00:35:51,200 --> 00:35:52,520
Speaker 1: Give us give us a sense of sort of his

611
00:35:53,239 --> 00:35:55,680
Speaker 1: his his ability to get get a bill from draft

612
00:35:55,760 --> 00:35:59,200
Speaker 1: to the to the center floor. He's gonna sales take

613
00:35:59,400 --> 00:36:01,520
Speaker 1: to the or even though he doesn't have the votes.

614
00:36:02,080 --> 00:36:04,160
Speaker 1: But I think that's a bit of a bluff. Um.

615
00:36:04,680 --> 00:36:09,680
Speaker 1: He's trying to bluff conservatives, mostly because if he says

616
00:36:09,719 --> 00:36:11,400
Speaker 1: he takes the bill of the floor, and then the

617
00:36:11,440 --> 00:36:14,040
Speaker 1: Conservatives have to, oh, gosh, maybe have to go along

618
00:36:14,080 --> 00:36:15,640
Speaker 1: with this thing after all, even though a lot of

619
00:36:15,680 --> 00:36:18,640
Speaker 1: the Conservatives don't like it. Um. In the end, I

620
00:36:18,760 --> 00:36:22,120
Speaker 1: don't know. Mitch is a very smart man. He's he's

621
00:36:22,320 --> 00:36:25,239
Speaker 1: he's probably one of the best politicians in the political sense.

622
00:36:25,640 --> 00:36:28,080
Speaker 1: Knows how to count votes better than anybody else I've

623
00:36:28,080 --> 00:36:30,440
Speaker 1: ever met. My doubts he'll take it to the floor

624
00:36:30,520 --> 00:36:33,759
Speaker 1: unless he has the votes. But having said that, having

625
00:36:33,840 --> 00:36:36,680
Speaker 1: said that, he will probably find a way that you

626
00:36:36,760 --> 00:36:40,920
Speaker 1: have to vote. The magic number here is fifty. Squeeze

627
00:36:40,960 --> 00:36:43,759
Speaker 1: the arms, the Conservatives, squeeze arms are some moderates until

628
00:36:43,800 --> 00:36:46,320
Speaker 1: he gets fifty. Let me ask you lastly, hear what

629
00:36:46,360 --> 00:36:48,719
Speaker 1: the Democrats message should be. We heard from the former

630
00:36:48,800 --> 00:36:51,080
Speaker 1: president saying this was a mean bill. You're you're echoing

631
00:36:51,200 --> 00:36:53,520
Speaker 1: some of the comments that that he made. What should

632
00:36:53,520 --> 00:36:55,759
Speaker 1: the Democratic Party's message be here? As you do have

633
00:36:55,840 --> 00:36:58,600
Speaker 1: Americans across this country who were wondering about the future,

634
00:36:58,600 --> 00:37:03,879
Speaker 1: about the integrity of the Affordable Care Act. Well, that's

635
00:37:03,920 --> 00:37:07,920
Speaker 1: a very deep question. When we worked on Affordable Care

636
00:37:08,000 --> 00:37:11,880
Speaker 1: Act back in two thousand and ten, we addressed a

637
00:37:12,080 --> 00:37:17,200
Speaker 1: very basic question, that is, should healthcare be determined by

638
00:37:17,400 --> 00:37:21,080
Speaker 1: the marketplace, you know, free for all, or should healthcare

639
00:37:21,239 --> 00:37:24,160
Speaker 1: be rights that all Americans should enjoy. And there are

640
00:37:24,200 --> 00:37:26,920
Speaker 1: two provisions in the bill that get at that. One

641
00:37:27,080 --> 00:37:30,680
Speaker 1: is the individual mandate, the other's employer mandate. Now we

642
00:37:30,960 --> 00:37:33,480
Speaker 1: put those in because we felt at the time that

643
00:37:33,600 --> 00:37:36,640
Speaker 1: we're all in this together. All Americans are in this

644
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Speaker 1: together when it comes to healthcare, and other countries have

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00:37:40,400 --> 00:37:43,960
Speaker 1: solved that question. All other countries have individual mandates or

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00:37:44,120 --> 00:37:47,719
Speaker 1: employer mandates. They have a system where they've decided that

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00:37:47,880 --> 00:37:51,279
Speaker 1: they are one country and the healthcare is not something

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00:37:51,320 --> 00:37:53,879
Speaker 1: that's determined by the market. We have to decide that question,

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Speaker 1: all right, Mr Ambassador, Thank you ver much. As always,

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00:37:55,760 --> 00:37:58,120
Speaker 1: that's Max Bochus, the former US Ambassador to China, former

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Speaker 1: U S Senator from Montana. Of course, long it's any

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00:38:00,400 --> 00:38:02,319
Speaker 1: chairman of the Senate Committee on Finance joining us from

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00:38:02,320 --> 00:38:04,759
Speaker 1: Montana on our phone lines. Earlier this morning, the acclaimed

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00:38:04,800 --> 00:38:08,160
Speaker 1: economist Justin Wolfers of Michigan tweeted out a brutal tweet

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00:38:08,440 --> 00:38:11,200
Speaker 1: which basically said, this is what I think about healthcare.

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Speaker 1: Look at the Cato Institute even they want Obamacare. He

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00:38:15,320 --> 00:38:18,239
Speaker 1: joined us yesterday. Thank you so much for your huge

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00:38:18,320 --> 00:38:22,320
Speaker 1: response to Michael Cannon's appearance, both pro and con. Michael

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00:38:22,360 --> 00:38:25,600
Speaker 1: Cannon joining us briefly here this morning. Michael, you wrote

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00:38:25,600 --> 00:38:29,040
Speaker 1: a scathing note this morning, late last night, and within

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00:38:29,160 --> 00:38:32,480
Speaker 1: it you say, uh, it would be better if they

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00:38:32,600 --> 00:38:35,719
Speaker 1: did nothing. Why do you say that? I'm shocked at

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Speaker 1: the Cato Institute is going against any flavor of Republican

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Speaker 1: inciding with President Obama. You know, Max Baca said a

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Speaker 1: lot about how other nations have solved healthcare, about how

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00:38:48,520 --> 00:38:51,440
Speaker 1: he took lots of money from some people to give

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00:38:51,480 --> 00:38:54,000
Speaker 1: it to other people. And you know, if that improved healthcare,

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00:38:54,760 --> 00:38:56,960
Speaker 1: I might be for that sort of thing. But it

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Speaker 1: just does it whether you look at this country or

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00:38:59,120 --> 00:39:03,560
Speaker 1: other countries. And uh, what Obamacare has done is increased

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00:39:03,600 --> 00:39:06,880
Speaker 1: the cost of health insurance, reduced the quality of health insurance,

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00:39:07,239 --> 00:39:09,920
Speaker 1: cause markets to collapse. Why he wants to build on

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00:39:09,960 --> 00:39:13,040
Speaker 1: that failure? I don't know why Republicans. Why Republicans are

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00:39:13,080 --> 00:39:15,560
Speaker 1: trying to preserve that. Well, I guess we can figure

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00:39:15,600 --> 00:39:17,800
Speaker 1: out why. But it's not what they promised to do.

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00:39:18,000 --> 00:39:21,680
Speaker 1: It's not what um, it's not what voters elected them

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00:39:21,719 --> 00:39:24,279
Speaker 1: to do, and it's not going to improve healthcare. Do

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00:39:24,400 --> 00:39:27,440
Speaker 1: you presume there will be a vote that will test

679
00:39:27,480 --> 00:39:32,439
Speaker 1: the medal of moderates and conservative Republicans well as Max

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00:39:32,520 --> 00:39:35,920
Speaker 1: Bauchus said, Mr McConnell will not bring this bill to

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00:39:36,000 --> 00:39:39,080
Speaker 1: the floor unless he has the votes. So if so,

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00:39:39,239 --> 00:39:41,399
Speaker 1: it all depends on whether he can get those four

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00:39:41,520 --> 00:39:43,799
Speaker 1: conservatives who said they cannot support the bill in its

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00:39:43,840 --> 00:39:47,239
Speaker 1: current form. Uh to to to get on board and

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00:39:47,680 --> 00:39:50,480
Speaker 1: uh and right now, as as I said in that

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00:39:50,560 --> 00:39:53,120
Speaker 1: piece that you mentioned, we posted a kid to at

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00:39:53,160 --> 00:39:56,040
Speaker 1: Liberty the Cato blogged, Uh, this bill is not a

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00:39:56,120 --> 00:39:59,200
Speaker 1: step in the right direction, and it would take something

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00:39:59,280 --> 00:40:01,880
Speaker 1: substantial to make this a step in the right direction.

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00:40:02,120 --> 00:40:06,800
Speaker 1: They would have to expand health savings accounts dramatically compared

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00:40:06,840 --> 00:40:09,600
Speaker 1: to what they do in in this bill. They would

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00:40:09,640 --> 00:40:12,680
Speaker 1: have to repeal community rating, which is the heart of

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00:40:12,760 --> 00:40:16,440
Speaker 1: Obamacare and is causing all the higher premiums, low quality coverage,

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00:40:16,480 --> 00:40:20,200
Speaker 1: and instability. You you gave us your five questions yesterday

695
00:40:20,200 --> 00:40:21,719
Speaker 1: what you're gonna be looking for when that bill came

696
00:40:21,760 --> 00:40:24,400
Speaker 1: out at hundred forty plus pages, imagine you're you're waiting

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00:40:24,480 --> 00:40:27,839
Speaker 1: through with trying to see what's in it. Libertarians read

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00:40:27,840 --> 00:40:31,880
Speaker 1: the footnotes, they read the go to the books. Uh, Michael,

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00:40:31,880 --> 00:40:33,279
Speaker 1: what stood out to you? What you what are you

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00:40:33,400 --> 00:40:36,240
Speaker 1: most concerned about in this? In this legislation, the Straft legislation,

701
00:40:36,520 --> 00:40:38,960
Speaker 1: what's most concerning is that it actually expands Obamacare in

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00:40:39,040 --> 00:40:42,000
Speaker 1: significant respects. You know, Max Bauchus and his colleagues when

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00:40:42,000 --> 00:40:45,640
Speaker 1: they passed to Obamacare, they authorized something called cost sharing

704
00:40:45,719 --> 00:40:48,719
Speaker 1: reduction payments. This is a bailout to insurance companies who

705
00:40:48,800 --> 00:40:52,239
Speaker 1: participate in Obamacare's exchanges. They authorize that spending, but they

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00:40:52,280 --> 00:40:56,200
Speaker 1: never actually funded those subsidies. And Republicans are proposing to

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00:40:56,320 --> 00:40:59,400
Speaker 1: do that. So they're proposing to expand expand Obamacare beyond

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00:41:00,200 --> 00:41:05,200
Speaker 1: what Democrats created. They are also proposing to expand the

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00:41:05,719 --> 00:41:09,160
Speaker 1: another subsidiy available through the exchanges, the Premium Assistance tax

710
00:41:09,239 --> 00:41:12,920
Speaker 1: credits to people below the poverty level in states that

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00:41:13,000 --> 00:41:16,080
Speaker 1: did not expand Medicaid, which is just not only expands

712
00:41:16,160 --> 00:41:20,120
Speaker 1: the exchange subsidies, so it expands one Obamacare entitlement, but

713
00:41:20,360 --> 00:41:23,160
Speaker 1: it's in effect a medicaid expansion by another means. So

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00:41:23,400 --> 00:41:26,880
Speaker 1: Republican Republicans and Congress are saying to Republicans in the

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00:41:26,960 --> 00:41:30,480
Speaker 1: nineteen states that did not implement Obamacare's medicaid expansion, We're

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Speaker 1: going to override your decision. Michael Cannon, thank you on

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00:41:33,080 --> 00:41:35,680
Speaker 1: short notice for joining us. We greatly appreciate your commitment

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00:41:35,719 --> 00:41:38,440
Speaker 1: to the show here and yesterday as well. Mr Cannon

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00:41:38,560 --> 00:41:42,080
Speaker 1: is with a Cato Institute, a libertarian think tank in Washington.

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Speaker 1: I think his opinions are very well known, and we

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Speaker 1: do think all of our listeners, those pro Obamacare, those

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00:41:47,719 --> 00:41:50,200
Speaker 1: pro Trump Care, those pro trying to get the kids

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00:41:50,280 --> 00:41:54,000
Speaker 1: camp physical in because everybody is books solid and every doctor,

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Speaker 1: any of you, We greatly appreciate it. Thanks for listening

725
00:42:06,239 --> 00:42:10,560
Speaker 1: to the Bloomberg Surveillance Podcast. Subscribe and listen to interviews

726
00:42:11,000 --> 00:42:16,040
Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

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00:42:16,640 --> 00:42:19,680
Speaker 1: I'm on Twitter at Tom Keene. David Gura is at

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00:42:19,800 --> 00:42:24,560
Speaker 1: David Gura. Before the podcast, you can always catch us worldwide.

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Speaker 1: I'm Bloomberg Radio. Brunt you by Bank of America Mary Lynch.

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Speaker 1: With virtual reality, virtually everything will change, discover opportunities in

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00:42:50,440 --> 00:42:53,360
Speaker 1: Mary Lynch, Pierced Fenner and Smith Incorporated,