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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with

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Speaker 1: David Gura. Daily we bring you insight from the best

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Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance

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Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,

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Speaker 1: on the Bloomberg Good Morning everyone, Bloomberg Surveillance Jobs Day.

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Speaker 1: In twenty nine minutes, we will bring you the data.

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Speaker 1: We'll go beneath the headline data. We are fond of

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Speaker 1: doing that, and what we're really fond of is on

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Speaker 1: a three day weekend, four day weekend, whatever it is,

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Speaker 1: David Gurral, five day weekend, I'm labor day weekend. We're

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Speaker 1: pleased to announce that William Gross and Jim Glassman are here.

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Speaker 1: They're here, are people talk to their people, and it's

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Speaker 1: very We're really honored if Alan Krueger with us earlier,

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Speaker 1: James Sweeney really doing well from Credit Sweee with some

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Speaker 1: terrific perspective, and then to have Professor Krueger from Venice,

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Speaker 1: Italy and to have uh Bill Gross join us in

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Speaker 1: a bit from Janet Henderson is great. But we will

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Speaker 1: begin with James Glassman of JP Morgan, Jim Glassman here,

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Speaker 1: and I want to frame August and wrap it around you. Travels,

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Speaker 1: which is everybody's telling us as a job shortage, job

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Speaker 1: openings are there, this is that the other wage growth.

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Speaker 1: We'll get into all that. And yet there's twelve thousand

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Speaker 1: people lined up to fill cardboard boxes at Amazon. And

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Speaker 1: the good thing about Jim Glassman is you're on the road,

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Speaker 1: not in the three zip codes that straddled James Diamond

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Speaker 1: to me and David Gura, what have you witnessed on

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Speaker 1: the road about a fully employed America? Are one lined

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Speaker 1: up to fill cardboard boxes at Amazon? Yeah? I mean

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Speaker 1: there are pockets that are struggling, but they're also pockets

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Speaker 1: out there that are just off the charts. Colorado, Nashville, Austin,

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Speaker 1: West Coast, East Coast. We're doing fine. Actually, everybody is

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Speaker 1: doing pretty well. There are a few areas that are slow.

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Speaker 1: I think the problem for a lot of workers is

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Speaker 1: there's just been so much change in the workplace. There's

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Speaker 1: a lot of automation, there's a lot of innovation. The

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Speaker 1: jobs that used to exist ten years ago don't exist anymore.

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Speaker 1: So you can find jobs, but the problem is they're

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Speaker 1: not paying the same thing unless you can scale up.

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Speaker 1: And that's really what our clients are telling us, is

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Speaker 1: they that the kind of jobs they need don't have.

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Speaker 1: They don't have people to write skills. Well. To me,

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Speaker 1: that's music to my ears because that tells me that

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Speaker 1: something's changed over the last ten years. There are new

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Speaker 1: opportunities opening up, and we just got to figure out

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Speaker 1: how to get people steered there. I think a lot

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Speaker 1: of community colleges are very focused on this. If you

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Speaker 1: go to Miami Dade, all the very big community college systems,

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Speaker 1: they've got a lot of programs for training people with

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Speaker 1: specific skills. And I suspect that we will figure out

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Speaker 1: and then in another few years we'll probably not here

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Speaker 1: as much about this story because I think people are

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Speaker 1: figuring out that there are things out there. You just

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Speaker 1: got to take the initiative to do something about it.

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Speaker 1: We were having a conversation with James Swingeing from Credits

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Speaker 1: was a little earlier just about what constitutes a skilled worker.

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Speaker 1: How much agreement is there on that, what? What what

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Speaker 1: what we define as skilled worker as well? I don't know,

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Speaker 1: You've got to ask, you know, you need people who

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Speaker 1: know how to monitor computer systems and understand what what

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Speaker 1: it is that all the stuff that's been mechanized, if

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Speaker 1: they've got to understand the process there. So you'll get

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Speaker 1: a different story depending on where you look. I think

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Speaker 1: what people tell you is you need people who learn

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Speaker 1: skills that we used to learn in shop class in

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Speaker 1: high school. You've got to have some math skills, you

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Speaker 1: gotta know some programming, and honestly, you know, when I

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Speaker 1: think of it, I think of when I turned my

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Speaker 1: car into the local gas station to do routine maintenance.

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Speaker 1: I took it in the other day, they say to me,

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Speaker 1: can you come back in about three weeks because our

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Speaker 1: mechanic is out of town. He's on vacation. So no

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Speaker 1: one no when there. You know, just maintaining a car

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Speaker 1: has gotten much more complicated and you need to know

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Speaker 1: how to read the diagon gnostics and understand the way

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Speaker 1: the car is working to make sense of that. So,

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Speaker 1: you know, my suspicion is that it's not It doesn't

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Speaker 1: take an awful lot of training. The problem is it

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Speaker 1: isn't really in anyone businesses interest to do. I mean,

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Speaker 1: if if you spend the money to train somebody up, uh,

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Speaker 1: then they become marketable and they jump, they go somewhere else.

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Speaker 1: So this is the role for the public sector and

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Speaker 1: for the community colleges. It's a partnership that you needed

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Speaker 1: to ask you about that because I think this administration

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Speaker 1: has been keen to point out the parallel they'd like

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Speaker 1: to see between the US training system and that in

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Speaker 1: Germany or other parts of Europe, and there it seems

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Speaker 1: like you get an apprenticeship company, finances that in part

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Speaker 1: or at least in part, and then you stay with

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Speaker 1: that company. How do you incentivize somebody who gets those

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Speaker 1: skills to stay? How do how do you make it

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Speaker 1: so that that person doesn't have those marketable skills and

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Speaker 1: wants to leave. Well, you know, when you look to

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Speaker 1: South Carolina and North Carolina where the European auto industry

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Speaker 1: has come in, you see a lot of that going on.

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Speaker 1: And I think you know, to some extent, uh, you're

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Speaker 1: not going to lose people if if the skills that

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Speaker 1: you're learning are specific to that company. But the way

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Speaker 1: you do it is you offer benefits to you know,

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Speaker 1: tie people in, and I think people, honestly, I think

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Speaker 1: you just people appreciate the opportunities to develop, to know

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Speaker 1: something about your company and to learn those skills. I

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Speaker 1: don't think people are that quick to jump. A lot

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Speaker 1: of folks, you know where they sort of we like

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Speaker 1: to stay in our comfort zone. If you give me

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Speaker 1: opportunities in my comfort zone, I'm happy to stay there.

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Speaker 1: So I don't think this problem is as big as

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Speaker 1: you might think it is for the guy that learns

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Speaker 1: the welding. Because if there's a hot paying job up

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Speaker 1: in North Dakota and you teach me how to do

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Speaker 1: welding down here, I'm gonna go. If I can get

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Speaker 1: three times, this is really I was going to go

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Speaker 1: another wrangler. Well, this is what you do folks with

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Speaker 1: Jim Glass and frankly with Mr Gross as well, you've

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Speaker 1: got something in your head to go to and they

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Speaker 1: say something so damn smart, you gotta go the other way.

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Speaker 1: Let's go the other way. On welders. I read a

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Speaker 1: paper at Iowa University of Iowa, Iowa State, I think

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Speaker 1: the wrestling school Iowa State, and it was about it's

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Speaker 1: not about welders, it's about really good welders, average welders,

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Speaker 1: and welders that are a joke. Now, let's take that

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Speaker 1: across the entire economy. The excellence and the demand for

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Speaker 1: jobs is because employers only want the best flight attendants,

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Speaker 1: the best radio announcers, the best welders. Right, yeah, and

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Speaker 1: you don't get that with the first guy you hire.

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Speaker 1: This is something you learn on the job. Is it

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Speaker 1: different now than it was when you were at Northwestern

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Speaker 1: or Mr? Gore? I don't think so, because I didn't

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Speaker 1: know anything when I started a job, and we know that. Yeah, yeah,

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Speaker 1: and you know I don't you get hired. God knows.

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Speaker 1: You have a great note out where you're looking at

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Speaker 1: our sense of worry about this this economy. I want

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Speaker 1: to dig into that a little bit if if I could.

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Speaker 1: There's a lot of apprehension here, just sort of about

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Speaker 1: where we might be headed if we're on the precipice

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Speaker 1: of a recession. Uh, the sense of doubt as well,

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Speaker 1: that things at least with regard to the economy aren't

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Speaker 1: as good or can't be as good for as long

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Speaker 1: as we think they will be. How do you process that, Jim? Well,

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Speaker 1: you know, it's always the case when you're coming out

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Speaker 1: of a really bad time, people are always worried over

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Speaker 1: the overcautious. Then when finally we wake up and we

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Speaker 1: realize here we are eight years. This is the eighth

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Speaker 1: labor Day of recovery from the Great Recession. When you

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Speaker 1: realize you've done a good job recovering, then you start

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Speaker 1: to worry, oh my god, how can this last? And

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Speaker 1: I think, you know, it's legitimate. It's it's legitimate to

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Speaker 1: think about this because our history books tell us that

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Speaker 1: these recoveries last six and nine years, and and for

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Speaker 1: some reason we we trip up and fall and fall

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Speaker 1: back again. But if you look at why that happens,

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Speaker 1: inflation problems, financial accesses, I don't think there's anything anything

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Speaker 1: to worry about. Frankly, myself, I think we've got a

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Speaker 1: very good chance that this recovery, now that we've recovered

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Speaker 1: the losses from the recession, we're gonna this The longevity

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Speaker 1: of this cycle is probably gonna beat anything else we've seen.

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Speaker 1: And so you know, it's natural to worry. Frankly, I'm

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Speaker 1: happy when people worry because that makes me think expectations

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Speaker 1: are low. I'd like to hear people worry. We economists

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Speaker 1: should worry when businesses stop worrying, and that makes that's

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Speaker 1: what makes me nervous when you look at what might

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Speaker 1: be leading to that worry. Is there an indicator that

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Speaker 1: stands out to you is something that is reasonable. You

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Speaker 1: look at the markets, say, and how how the stock

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Speaker 1: market is is, for instance, is that something that gives

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Speaker 1: one cause for concern. Stock market to me, is just

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Speaker 1: a symptom of all this stuff. The thing that I

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Speaker 1: would worry about is if I started to see inflation problems. Well,

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Speaker 1: I don't see that those are the things. That is

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Speaker 1: the number one thing that always trips us up because

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Speaker 1: that forces the FED to step on the brakes, and

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Speaker 1: we tend to overdo it, and often that sets the

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Speaker 1: stage for a new downturn. The other kind of thing

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Speaker 1: that we've been seeing financial access is real estate go

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Speaker 1: back ten years, real estate values above what we have

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Speaker 1: ever seen before relative to income. There's nothing like that

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Speaker 1: out there. Only you know, maybe in the commercial real

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Speaker 1: estate sector. You could argue that some assets are little pricing,

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Speaker 1: but you know, that's that's something that can correct quickly.

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Speaker 1: This is not like the real estate problems we saw

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Speaker 1: last The employment employment employment to population ratio has been growing.

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Speaker 1: Women's you know, jobs and all that. From the sixties

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Speaker 1: up to sixty percent of Americans employed. Then we created

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Speaker 1: down to fifty eight percent, dragging themselves back the late

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Speaker 1: nineties seventies. We've come back, but we're nowhere near where

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Speaker 1: we were. Do you have a hope that we normalize

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Speaker 1: it's six from the present, because you know, I don't

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Speaker 1: think we'll ever get there, because right now, for the

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Speaker 1: next ten years or so, we've got this massive wave

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Speaker 1: of people who are approaching retirement. Why are you looking

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Speaker 1: at me, I'm looking in the mirror. We've got twenty

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Speaker 1: million people who have turned into gone into the fifties

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Speaker 1: or sixties. Those guys don't want to work and really

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Speaker 1: not think, but they want to retire in And what

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Speaker 1: you notice is when people get to about fifty years

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Speaker 1: of age, they start scaling bad. Maybe you and I

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Speaker 1: put up you know what I mean, had a massive Democrats, David,

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Speaker 1: I really suggest to smooth this over with, one of

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Speaker 1: our best guests is Dr Glassman should join us for

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Speaker 1: a beverage of his choice on my grand Banks down

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Speaker 1: in the East River. It's the forty eight foot Grand Banks, Jim,

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Speaker 1: it's over your thirty fourth Street. It's called Tuition. He'll

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Speaker 1: be able to see it, you know. And I'm making

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Speaker 1: a joke here, folks, because I know that Dr Glassman

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Speaker 1: is familiar with that boat as well. We'll continue with

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Speaker 1: Jim Glassman serious discussion on the state of the American

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Speaker 1: labor economy, and then we link it together with Bill

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Speaker 1: gross next Worldwide Coast to Coast Bloomberg Surveillance from our

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Speaker 1: studios here on Lexington Avenue at fifty Street, right across

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Speaker 1: from Bloomingdale's in New York City. Davy girl, what's New

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Speaker 1: York about? It's about a justice with her picture on

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Speaker 1: the wall down at the Federal Justice Building downtown where

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Speaker 1: people become new citizens. And last night in section one

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Speaker 1: oh four Yankee Stadium there she was in taking in

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Speaker 1: robe in row By might point out in the Judges

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Speaker 1: pretty one errand Judge Yes on cinema or in the

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Speaker 1: Bronx last night for that game against the Do you

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Speaker 1: watch last night? I watched. I watched enough to know

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Speaker 1: I wanted to keep watching, but the three am beckoned

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Speaker 1: or to thirty am or whatever it was that's running anyways,

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Speaker 1: A major shout out to a Supreme Court justice who

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Speaker 1: got out with the people in right. Very nice last night. Justice.

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Speaker 1: We're with Jim Glassman, who knows about this, and to

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Speaker 1: speak of the justice's heritage, which is Hispanic. We have

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Speaker 1: a huge announcement today by the President on immigration. Potentially

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Speaker 1: I should say you have Toulouse or Na. Thank you

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Speaker 1: so much for that perspective from the White House an

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Speaker 1: hour ago. Jim Glassman, how does immigration fold into the

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Speaker 1: job's report right now? Well, uh, you know, the demographics,

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Speaker 1: the US demographics has the working age population slowing down

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Speaker 1: a lot. We've had very little immigration in the last decade,

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Speaker 1: and that's why we're getting all this recovery in the

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Speaker 1: job market with slow growth. Immigration is an important part

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Speaker 1: of what makes the US economy strong. And if if

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Speaker 1: the economy is doing better and we don't have the

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Speaker 1: domestic workers to fill those jobs, we're going to see

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Speaker 1: more immigration. So want to give an hundred and fifty

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Speaker 1: thousand of non farm payroll ten or twenty years ago,

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Speaker 1: if it was two d or two twenty was the

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Speaker 1: delta immigration? Yeah, it seems it seems that might be

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Speaker 1: fifty or sixty or seventy. This is what's confusing everybody

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Speaker 1: because we've never really when we talked about the broad economy,

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Speaker 1: we've never really had to talk about immigration because are

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Speaker 1: about demographics. Because whatever demographics was going on in the

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Speaker 1: US immigration would tend to fill the gap. If we

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Speaker 1: had the jobs and we didn't have the local workers,

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Speaker 1: we would we would draw people in. This is not

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Speaker 1: true in Italy or Japan. Uh demographics dominates and they're

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Speaker 1: they're used to this story. We're having to talk about

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Speaker 1: demographics because when we've not been getting the immigration, and

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Speaker 1: I think if if the economy does really start picking

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Speaker 1: up speed, you gotta wonder, when you're getting two thousand

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Speaker 1: jobs a month, where is this coming from. It might

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Speaker 1: be that we're starting to see a little more immigration.

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Speaker 1: You go to Arizona. I mean, one thing you don't know, folks,

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Speaker 1: is he's not just a radio star and television star.

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Speaker 1: He lives in airports. When you go to Phoenix, what

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Speaker 1: do you tell the audience of institutional and high net

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Speaker 1: worth jpeoporgan people. Is immigration good for Senator Flank and

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Speaker 1: for Senator McCain. Yeah, I mean I think everybody realizes,

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Speaker 1: particularly in Texas, immigration is an important part of their economy.

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Speaker 1: Arizona has a more negative view of this because of

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Speaker 1: the social problems that this brings. I don't really understand it,

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Speaker 1: but I think we all deep down realize that we

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Speaker 1: are a nation of immigrants, and this is what's made

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Speaker 1: our economy strong. I think the issue is more about

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Speaker 1: illegal and you know, we gotta we gotta solve this

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Speaker 1: issue because immigration can solve a lot of issues. And

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Speaker 1: it's not just the people coming in, it's the kids.

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Speaker 1: I see this in my neighborhood, the families coming in

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Speaker 1: from India and Asia. They're obsessed with education. They drive

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Speaker 1: their kids into education. It's the next generation that really

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Speaker 1: brings the value to what you know, to the country.

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Speaker 1: And we all know this story because our parents and

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Speaker 1: our grandparents went through the same process. What can you

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Speaker 1: tell us about the Republic of Texas. Our eyes are

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Speaker 1: focused on that state right now in light of the

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Speaker 1: devastating storm that hit it earlier this week. We're talking

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Speaker 1: about immigration, obviously hugely important to that state as well.

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Speaker 1: What's the give us? Give us some context. You about

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Speaker 1: the importance to the U. S economy of the Texas economy. Well,

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Speaker 1: it's hugely important because of the energy sector, right, but

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Speaker 1: it's also a really diverse economy. It's a real entrepreneur

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Speaker 1: to place and a real dynamic economy. Honestly, they're gonna

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Speaker 1: recover from this fashion And people think because it's just

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Speaker 1: a really dynamic place. And uh, it's it's important for

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Speaker 1: the U s economy. It was the big it's the

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Speaker 1: leading edge of the recovery because of the what's going

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Speaker 1: on the energy sector. You look at employment growth in Texas,

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Speaker 1: it's doing over the last ten years. It's done better

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Speaker 1: than anybody except for code during North Dakota. But honestly,

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Speaker 1: not many people want to go to North Dakota. So

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Speaker 1: it's an important it's an important state. Healthcare is a

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Speaker 1: gateway to the global to the to the global world.

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Speaker 1: It's energy sector is pretty dynamic. It's pretty critical to

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Speaker 1: the US economy. Jim Glass, wind with US will continue.

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Speaker 1: We'll go beneath the headline data here, David Gurr, we

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Speaker 1: should say to our people because we're we're full disclosure.

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Speaker 1: There are technical deficitions. This is this is interesting. We're

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Speaker 1: gonna pull back the curtain here just a little bit. Uh.

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Speaker 1: You know, the data comes across the Bloomberg at eight

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Speaker 1: thirty when those numbers are released, in part because some technicians,

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Speaker 1: some people within Bloomberg and other outlets are able to

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Speaker 1: get those numbers first in put them into the system.

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Speaker 1: There apparently are some technical difficulties across the board at

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Speaker 1: the Labor Department preventing that from happening today. So at

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Speaker 1: eight thirty, we you, everybody will go to the web

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Speaker 1: to get those data from the Labor Department. And that's

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Speaker 1: going to cause a bit of a delay here as

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Speaker 1: we have to sort of pass through the numbers outside

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Speaker 1: of the usual framework that we get them in. So

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Speaker 1: it may be that we don't get the numbers right

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Speaker 1: at eight thirty. My be a few seconds afterwards today.

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Speaker 1: Could you turn around, David and turn on the studio lights. Yes,

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Speaker 1: we'll be here worldwide on minutes. Yeah, yeah, I gotta

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Speaker 1: get the orange going on the skin. You know, where's

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Speaker 1: Mr Bayner when I knew? Uh? Futures up, six down,

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Speaker 1: futures up sixty five Jobs today with Jim Glass one in,

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Speaker 1: Bill Gross, stay with us. Welcome morning, David Gurra and

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Speaker 1: Tom Keene in New York, Bluebrick Surveillance on Bloomberg Radio.

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Speaker 1: On Jobs Today, we go out door colleague Vine Delle

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Speaker 1: Judas at the first Word desk for the latest jobs

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Speaker 1: numbers against some quirkiness here this morning, Vinney, Yes, David,

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Speaker 1: job unemployment. Let's let me just start over payroll growth

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Speaker 1: slowed in August one hundred and fifty six thousand the

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Speaker 1: prior month, an increase of one hundred eighty nine thousand,

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Speaker 1: the unemployment rate meantime creeping up to four point four percent,

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Speaker 1: Private payrolls up by one hundred sixty five thousand, looking

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Speaker 1: at average hourly earnings, a sore point up just point

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Speaker 1: one percent. Yes, there were some problems. The government had

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Speaker 1: a little trouble getting the news out this morning, but

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Speaker 1: that hit on time just the same at eight thirtiesome

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Speaker 1: computer issues again. The Labor Department reporting non farm payrolls

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Speaker 1: rose by one hundred fifty six thousand. That's slower than

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Speaker 1: a prior month. That is below Wall Street forecasting. Unemployment

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Speaker 1: rate up a notch four point four percent, and average

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Speaker 1: hourly earnings. I can't over emphasize this. This is a

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Speaker 1: sore point up just point one percent in August, and

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Speaker 1: I might add the July earnings increased revised down. I'm finite,

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Speaker 1: s Bloomberg Radio. Let's go back to New York. These

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Speaker 1: are extraordinary numbers. We think our team in Washington, particularly

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Speaker 1: this morning, led by Brendan Murray, forgetting this out. There

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Speaker 1: was some technical difficulties but we're acting normal with yields in.

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Speaker 1: You equity futures don't do much, David Guru, but yields

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Speaker 1: in with curve flattening, it's just it's just a lighter

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Speaker 1: tone to the data. With the unemployment rate again up

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Speaker 1: four point for sind you know you look at moving averages,

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Speaker 1: Jim Blaste, which I know you love, and again this

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Speaker 1: pushes against the moving average vector that we want to

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Speaker 1: go up a hundred and fifty six thousand. With negative

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Speaker 1: forty one revision that gets you down to a hundred

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Speaker 1: and ten thousand. Yeah, I think the what you're going

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Speaker 1: to hear from my community is don't trust the initial

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Speaker 1: estimate of August because in the past seventeen years, with

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Speaker 1: the exception of three years, you've seen this August number

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Speaker 1: get revised up by an average of seventy five thousand

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Speaker 1: by the time it's all in. So I think you've

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Speaker 1: got to be a little leery of this kind of stuff.

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Speaker 1: People were saying even when we saw the ADP number,

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Speaker 1: they were telling you this, The information we're getting from

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Speaker 1: the labor market is frankly quite good. The jobless claims

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Speaker 1: trend is gotten lower, ADP is finding an awful lot

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Speaker 1: of employment. So I think with these monthly numbers, you

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Speaker 1: have to be a little careful, particularly August, particularly August. Yeah,

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Speaker 1: just to continue to process what we're seeing here. How

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Speaker 1: big a deal is that headline? Miss said, do you think, Jim,

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Speaker 1: I don't think it's that big of deal. I've I've

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Speaker 1: got people worth sort of in the one two D

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Speaker 1: thousand range, and the people who thought one fifty were saying,

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Speaker 1: there is this series. There's a significant bias that shows

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Speaker 1: up in August. The things tend to get revised up,

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Speaker 1: so don't be surprised if you see a two D

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Speaker 1: number out of this. Jim Glass, thank you so much.

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Speaker 1: It's JP Morgan as well. And now in Bloomberg Radio,

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Speaker 1: Bloomberg Television, Good morning, Alex. Still looking forward to the

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Speaker 1: comments of Gary Cohen from the White House Law and

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Speaker 1: I know, Alex, you'll do that here in a bit.

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Speaker 1: Now we welcome William gross Off, Janet Snderson our coverage

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Speaker 1: of this job's report, how it folds into markets, and

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Speaker 1: particularly how it folds into a most interesting September in Washington.

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Speaker 1: I guess Bill gross I look at this and I

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Speaker 1: see the revisions down in a little soggy report. It's

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Speaker 1: once again putting a good month back together with another

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Speaker 1: good month and another good month after that. We can't

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Speaker 1: seem to get there. I think that's true. And I

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Speaker 1: think August, you know, historically has has been different and

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Speaker 1: been a little bit weak. But nonetheless, um, you know,

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Speaker 1: the wage revisions I think strike me the most, and

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Speaker 1: the point one in terms of the wage growth strikes

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Speaker 1: me as well. You know it inflation tongue, not job

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Speaker 1: growth dominates central bank thinking these days. And uh, well,

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Speaker 1: I think low unemployment percentages historically have led the higher

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Speaker 1: wages and inflationary pressures, and the fabled Phillips curve which

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Speaker 1: assumes this, Um, I think it appears to be broken.

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Speaker 1: And and your are of your core inflation, which is

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Speaker 1: what the film looks at, is increasing only at one

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Speaker 1: point four percent, and it's down from the two point

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Speaker 1: one percent only six six months ago. So I think

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Speaker 1: the fit is focused on wages and uh certainly inflation

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Speaker 1: to the extent that wages are reflective in that. Let's

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Speaker 1: try and and and this is a weak report, Let's

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Speaker 1: synthesize Mr Gross's outlook their folks into what we see

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Speaker 1: on the Bloomer I've seen a two point one one

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Speaker 1: percent ten year bill in the angst of Korea. Five

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Speaker 1: days ago, we got down to two point zero nine percent.

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Speaker 1: Steve major Over at HSBC says we can go below

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Speaker 1: two percent. Do you agree that there's a set of

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Speaker 1: news or a set of economic data that get will

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Speaker 1: give Janet Yelling at one point nine nine percent and

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Speaker 1: year yield. Well, geo political, perhaps, you know, North Korea

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Speaker 1: is certainly important, and uh, you know, money moves to

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Speaker 1: quality in the safety when when global events threatened. Uh,

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Speaker 1: you know, global bonds have rallied tended fift thirty basis

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Speaker 1: points over the past few months due to in my opinion,

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Speaker 1: not necessarily ding in North Korea, but unprecedented liquidity from

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Speaker 1: the ECB and the b O G B o J.

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Speaker 1: They've they've written one trillion dollars worth of free checks

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Speaker 1: per month. It keeps investors happy and economies humming for now.

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Speaker 1: But uh, we see Japanese tenure race now at zero

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Speaker 1: percent and buns at thirty five basis points, and that

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Speaker 1: makes our tenure attractive at to ten and you know,

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Speaker 1: perhaps it can go down to two percent because these

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Speaker 1: other alternatives are extremely low and moving lower bill. We're

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Speaker 1: making our annual pilgrimage to the edge of the fiscal cliff.

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Speaker 1: It seems we're gonna be talking about the debt ceiling

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Speaker 1: here over these next few weeks. Is Congress endeavors to

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Speaker 1: raise it, whether cleanly or with some other stuff attached

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Speaker 1: to it. Of course, there's the issue of government funding

428
00:22:27,800 --> 00:22:30,040
Speaker 1: as well. How much have you perfected your playbook with

429
00:22:30,080 --> 00:22:32,399
Speaker 1: how to deal with this kind of disaster again? We

430
00:22:32,480 --> 00:22:37,720
Speaker 1: faced it time and time again. Well, this one's extraordinary

431
00:22:37,720 --> 00:22:40,439
Speaker 1: and the numbers still aren't certain in terms of how

432
00:22:40,520 --> 00:22:42,960
Speaker 1: much it will cost. Is it a hundred billion? Isn't more?

433
00:22:43,200 --> 00:22:46,120
Speaker 1: As a little bit less? Over what time period does

434
00:22:46,119 --> 00:22:49,720
Speaker 1: it occur? But certainly, uh, it extends the budget deficit,

435
00:22:49,800 --> 00:22:52,000
Speaker 1: and it's something that has to be reckoned with. How

436
00:22:52,000 --> 00:22:55,720
Speaker 1: do they do that politically? Hopefully Republicans this time sort

437
00:22:55,720 --> 00:22:58,359
Speaker 1: of avoid it with a special type of measure and

438
00:22:58,400 --> 00:23:01,880
Speaker 1: then you know, renore realize the budget in the next

439
00:23:01,920 --> 00:23:05,000
Speaker 1: few weeks as as uh as we move along. But

440
00:23:05,040 --> 00:23:08,720
Speaker 1: the uh, you know, Harvey is is very important, and

441
00:23:08,760 --> 00:23:12,639
Speaker 1: it absorbs money and absorbs credit and put supply into

442
00:23:12,680 --> 00:23:16,080
Speaker 1: the treasuring market. So uh, no doubt that that's important,

443
00:23:16,080 --> 00:23:21,000
Speaker 1: as is the tax cut situation, which presumably will be

444
00:23:21,040 --> 00:23:23,280
Speaker 1: addressed in the next two or three months. But when

445
00:23:23,320 --> 00:23:25,280
Speaker 1: when you look at the dead ceiling in particular there

446
00:23:25,320 --> 00:23:27,480
Speaker 1: do do you have any level of anxiety that it's

447
00:23:27,480 --> 00:23:31,360
Speaker 1: not going to be raised or raised on time? Oh?

448
00:23:31,440 --> 00:23:33,520
Speaker 1: None at all. And you know I wrote yesterday, I

449
00:23:33,520 --> 00:23:36,359
Speaker 1: tweeted yesterday that it was a sham. Um. You know,

450
00:23:36,400 --> 00:23:41,040
Speaker 1: it's just a political maneuver. Congress spends money and uh,

451
00:23:41,080 --> 00:23:43,560
Speaker 1: you know, of course the the Treasury has to raise

452
00:23:43,640 --> 00:23:47,120
Speaker 1: that type of money. It's a one to relationship. It's symbiotic.

453
00:23:47,240 --> 00:23:50,639
Speaker 1: And uh, to the extent that the Congress wouldn't approve

454
00:23:50,680 --> 00:23:53,080
Speaker 1: their own spending, to me is ridiculous. It's just a

455
00:23:54,160 --> 00:23:57,800
Speaker 1: political maneuver to get something. And I think there's no

456
00:23:57,880 --> 00:24:01,960
Speaker 1: doubt that the US out of this solvent will be

457
00:24:02,080 --> 00:24:05,359
Speaker 1: for as long as I'm on this good earthing, we

458
00:24:05,400 --> 00:24:07,920
Speaker 1: shouldn't worry about it. And Bill Gross, you have been

459
00:24:08,040 --> 00:24:12,400
Speaker 1: brilliant about the idea of financial repression, about you're gonna

460
00:24:12,440 --> 00:24:14,520
Speaker 1: get a low yield and when you take out inflation,

461
00:24:14,600 --> 00:24:17,520
Speaker 1: nothing's gonna be there. All sorts of people we talked

462
00:24:17,560 --> 00:24:20,200
Speaker 1: to are talking about better wage growth. It didn't happen

463
00:24:20,240 --> 00:24:24,679
Speaker 1: this month. They're talking about vectors that move upward. Do

464
00:24:24,720 --> 00:24:28,480
Speaker 1: you have any hope that America gets out of the

465
00:24:28,520 --> 00:24:34,320
Speaker 1: financial repression you so well predicted, well, not typically at

466
00:24:34,320 --> 00:24:37,080
Speaker 1: a financial repression tom to the extent that you might

467
00:24:37,280 --> 00:24:41,320
Speaker 1: define it. By zero percent real short term interest rates

468
00:24:41,440 --> 00:24:45,040
Speaker 1: versus two to three percent historically over the past ten

469
00:24:45,119 --> 00:24:47,920
Speaker 1: twenty thirty years. That's a huge gap. And I don't

470
00:24:47,920 --> 00:24:50,320
Speaker 1: think that's gonna be narrowed. I don't think central banks,

471
00:24:50,359 --> 00:24:52,240
Speaker 1: not only the FED, but the e c P and

472
00:24:52,280 --> 00:24:54,840
Speaker 1: the b o J, they can't raise interest or it's

473
00:24:54,880 --> 00:24:57,680
Speaker 1: back to normal simply because there's a lot of debt

474
00:24:57,760 --> 00:24:59,800
Speaker 1: and increasing the amount of debt and the cost of

475
00:25:00,080 --> 00:25:02,800
Speaker 1: cover that debt if increased by two to three percent,

476
00:25:02,920 --> 00:25:05,600
Speaker 1: not just for the government, the government and the right checks,

477
00:25:05,640 --> 00:25:09,320
Speaker 1: but with corporations, it's probably just never going to happen.

478
00:25:09,440 --> 00:25:11,600
Speaker 1: And uh, go ahead, Well, no, I just don't. I

479
00:25:11,600 --> 00:25:13,520
Speaker 1: don't want to cut you off. But this is so critical,

480
00:25:13,760 --> 00:25:15,960
Speaker 1: Bill Goes, because you live this, and you live this

481
00:25:16,040 --> 00:25:18,520
Speaker 1: with a Monroe trader on your desk at a shop

482
00:25:18,560 --> 00:25:21,280
Speaker 1: at Newport Beach a few years ago, and that is

483
00:25:21,320 --> 00:25:24,280
Speaker 1: the deficit to g D P growing out. If we

484
00:25:24,359 --> 00:25:26,520
Speaker 1: get back to what you and I recall the days

485
00:25:26,520 --> 00:25:30,440
Speaker 1: of Monroe traders in early Bloomberg's a five or six

486
00:25:30,480 --> 00:25:35,000
Speaker 1: percent deficit to g d P, I would suggest, respectfully,

487
00:25:35,320 --> 00:25:38,439
Speaker 1: bad things happen. Are we going to revisit that in

488
00:25:38,480 --> 00:25:42,560
Speaker 1: the next twenty four or thirty six months. Well, it

489
00:25:42,560 --> 00:25:45,240
Speaker 1: depends on the tax cut program. I don't think it's

490
00:25:45,240 --> 00:25:47,439
Speaker 1: going to be that radical. I don't think you know,

491
00:25:47,520 --> 00:25:51,320
Speaker 1: Democrats will will permit that type of increase. But you know,

492
00:25:51,480 --> 00:25:55,000
Speaker 1: you make a good point. The US current account balance,

493
00:25:55,080 --> 00:25:57,880
Speaker 1: which is reflective of the stuffs, not one for one,

494
00:25:57,960 --> 00:26:02,000
Speaker 1: but close has been and deficit by three to four

495
00:26:02,080 --> 00:26:06,280
Speaker 1: percent for the last forty years. It's an exorbitant privilege

496
00:26:06,320 --> 00:26:09,720
Speaker 1: that the US has relative to the rest of the world.

497
00:26:09,760 --> 00:26:13,560
Speaker 1: So I don't really see any pressure to reduce the deficit,

498
00:26:13,640 --> 00:26:17,159
Speaker 1: despite the Republican rhetoric. I see it increasing, perhaps not

499
00:26:17,280 --> 00:26:21,480
Speaker 1: the four or five percent, but two or three percent annually.

500
00:26:21,520 --> 00:26:24,560
Speaker 1: And the problem being, as I mentioned before Tom, the

501
00:26:24,680 --> 00:26:27,159
Speaker 1: interest rate, and to the extent the interest rates to

502
00:26:27,160 --> 00:26:29,720
Speaker 1: go up, I don't think they will. They can then

503
00:26:30,119 --> 00:26:32,040
Speaker 1: the economy is threatened. We're gonna come back with Bill

504
00:26:32,080 --> 00:26:34,520
Speaker 1: gross on radio. But very quickly here Bill Gross on TV.

505
00:26:34,600 --> 00:26:36,960
Speaker 1: Do you believe in a three percent g d P

506
00:26:37,119 --> 00:26:43,040
Speaker 1: American economy? I do not. It depends on productivity. Productivity

507
00:26:43,040 --> 00:26:45,840
Speaker 1: has been less than one percent, close to zero. Labor

508
00:26:45,880 --> 00:26:48,120
Speaker 1: growth is less than a half a percent. Those two

509
00:26:48,200 --> 00:26:51,840
Speaker 1: numbers to gether, you know, produce real GDP and it's

510
00:26:51,880 --> 00:26:55,720
Speaker 1: a two percent at max real GDP. Bill. This again

511
00:26:55,920 --> 00:27:02,560
Speaker 1: is about elasticities or responsiveness of market to economics, in

512
00:27:02,600 --> 00:27:06,160
Speaker 1: that Mario dragging has a plan and it's good. People

513
00:27:06,320 --> 00:27:10,280
Speaker 1: in Farmford have a plan and we've had a massive

514
00:27:10,359 --> 00:27:14,320
Speaker 1: move in euro trade weighted euro folks is well out

515
00:27:14,400 --> 00:27:20,360
Speaker 1: over two standard deviations back nine years strong euro Bill?

516
00:27:20,480 --> 00:27:23,840
Speaker 1: Is this about the market, the euro vigilantes telling Mario

517
00:27:23,920 --> 00:27:29,520
Speaker 1: Draggy what to do. Oh, I don't think so, Tommy.

518
00:27:29,520 --> 00:27:31,239
Speaker 1: You know, and you know I was well impressed by

519
00:27:31,280 --> 00:27:33,919
Speaker 1: the bond vigilantes and the nineties, and I guess in

520
00:27:33,960 --> 00:27:37,080
Speaker 1: the early part of the century. But now I think

521
00:27:37,119 --> 00:27:40,240
Speaker 1: central banks dominate. There's no doubt that they have conversations

522
00:27:40,280 --> 00:27:43,240
Speaker 1: between the two, between the private market and the vigilantes

523
00:27:43,280 --> 00:27:46,080
Speaker 1: and the central banks, and they take feedback from each other.

524
00:27:46,160 --> 00:27:50,000
Speaker 1: But I think ultimately it's Druggy. Ultimately I think it's

525
00:27:50,040 --> 00:27:53,760
Speaker 1: corrode I. Ultimately I think it's Janet Yellen. And so

526
00:27:54,119 --> 00:27:57,439
Speaker 1: we'll see. And I agree with you this this news

527
00:27:57,920 --> 00:28:02,199
Speaker 1: on December as a little startling because, Uh, while dr

528
00:28:02,520 --> 00:28:05,440
Speaker 1: has always been a dove, uh, this is a continuation

529
00:28:05,480 --> 00:28:10,240
Speaker 1: of his devilishness. Do what we see from Carney, from Corota,

530
00:28:10,560 --> 00:28:14,639
Speaker 1: from drag? Does it migrate over to the United States

531
00:28:14,880 --> 00:28:17,760
Speaker 1: if they get a bill gross sub three g d P,

532
00:28:18,359 --> 00:28:21,479
Speaker 1: if they get any sense of a job report like

533
00:28:21,560 --> 00:28:25,720
Speaker 1: today and the tepid wage growth like today, Does yelling

534
00:28:25,840 --> 00:28:29,119
Speaker 1: become like drag where we see articles from our Washington

535
00:28:29,160 --> 00:28:36,400
Speaker 1: team saying the federal delay. Well perhaps, although I think

536
00:28:36,400 --> 00:28:40,240
Speaker 1: the Fed's fairly well committed because they've they've you know,

537
00:28:40,320 --> 00:28:44,480
Speaker 1: put on the line such a small amount of treasuries

538
00:28:44,920 --> 00:28:48,600
Speaker 1: in terms of you know, taking off the balance sheet.

539
00:28:48,640 --> 00:28:51,960
Speaker 1: So I think there's safety there. But I do think

540
00:28:52,000 --> 00:28:54,760
Speaker 1: that you know, you know, central banks, especially the ECB

541
00:28:54,840 --> 00:28:59,280
Speaker 1: and the b o J are addicted que and balance

542
00:28:59,280 --> 00:29:03,400
Speaker 1: sheet expand and low and negative yields. You know, Japan,

543
00:29:03,480 --> 00:29:06,520
Speaker 1: as I've mentioned his cap their tenure JGB at ten

544
00:29:06,560 --> 00:29:09,840
Speaker 1: basis points it's now zero. Uh, and the e CBS

545
00:29:09,880 --> 00:29:14,760
Speaker 1: balance sheet. Historically the world's most conservative central bank has

546
00:29:14,880 --> 00:29:19,520
Speaker 1: expanded its balance sheet via que eat nearly five trillion dollars.

547
00:29:19,360 --> 00:29:22,600
Speaker 1: It's larger than the FEDS. And uh so these are

548
00:29:22,960 --> 00:29:25,760
Speaker 1: and I think there are legitimate questions as to how

549
00:29:25,800 --> 00:29:29,880
Speaker 1: many bonds these central banks can buy before they effectively

550
00:29:30,000 --> 00:29:34,719
Speaker 1: destroy the private market that capitalism requires. I don't want

551
00:29:34,720 --> 00:29:37,040
Speaker 1: to ask you about Mario drag communicator. There was this

552
00:29:37,160 --> 00:29:40,200
Speaker 1: moment of miscommunication with the market in central Portugal just

553
00:29:40,240 --> 00:29:43,400
Speaker 1: a couple of weeks ago. He spoke in Jackson Hole

554
00:29:43,480 --> 00:29:45,880
Speaker 1: and we were talking with Dennis Gartman yesterday. He was

555
00:29:45,880 --> 00:29:48,479
Speaker 1: saying that he couldn't quite figure out what it was

556
00:29:48,760 --> 00:29:50,800
Speaker 1: Mario d was trying to lay out in that speech,

557
00:29:50,840 --> 00:29:54,000
Speaker 1: at least at least initially. I wonder if if if

558
00:29:54,040 --> 00:29:57,560
Speaker 1: you're experiencing similar difficulty interpreting what he has to say,

559
00:29:57,600 --> 00:29:59,400
Speaker 1: and if you think there was maybe a missed opportunity

560
00:29:59,400 --> 00:30:01,600
Speaker 1: for him at it's an hold to talk more about

561
00:30:01,600 --> 00:30:05,080
Speaker 1: the year at a job on the year a little bit, Well,

562
00:30:05,120 --> 00:30:06,880
Speaker 1: I think so. And I think both the drug and

563
00:30:07,000 --> 00:30:11,360
Speaker 1: yell And deferred in terms of monetary policy and simply

564
00:30:11,360 --> 00:30:14,880
Speaker 1: shifted to regulation, which is fine and A and a

565
00:30:14,960 --> 00:30:17,560
Speaker 1: target and a legitimate target of central banks. They should

566
00:30:17,600 --> 00:30:19,720
Speaker 1: have focused on that and the early part of the

567
00:30:20,120 --> 00:30:23,360
Speaker 1: twenty one century. But nonetheless, drug he didn't tell us much.

568
00:30:23,400 --> 00:30:26,800
Speaker 1: And perhaps today's statement is telling us something. I don't

569
00:30:26,840 --> 00:30:29,040
Speaker 1: know where it's coming from, but you know, the drug

570
00:30:29,160 --> 00:30:33,000
Speaker 1: is very deficient. And to not criticize, but to compliment.

571
00:30:33,080 --> 00:30:36,960
Speaker 1: I suppose their economy is doing well, Inflation is contained,

572
00:30:37,000 --> 00:30:39,320
Speaker 1: although not as high as they want. And so you know,

573
00:30:39,360 --> 00:30:41,560
Speaker 1: you'd have to give these central bankers at the moment

574
00:30:41,640 --> 00:30:45,800
Speaker 1: in terms of cyclical results, uh, you know, somewhere in

575
00:30:45,800 --> 00:30:48,880
Speaker 1: the B plus A category. But as I've mentioned in

576
00:30:48,920 --> 00:30:52,120
Speaker 1: the past, over a long period of time, these uh,

577
00:30:52,280 --> 00:30:59,680
Speaker 1: financial repressive types of strategies have negative consequences on savers,

578
00:31:00,120 --> 00:31:04,280
Speaker 1: have negative consequences on insurance companies, pension funds, and ultimately

579
00:31:04,400 --> 00:31:07,960
Speaker 1: capitalism does not do well under these circumstances. The girls,

580
00:31:08,000 --> 00:31:09,400
Speaker 1: I want to rip up the script of the time

581
00:31:09,400 --> 00:31:11,600
Speaker 1: we've got left the number one talking point for me

582
00:31:11,640 --> 00:31:13,880
Speaker 1: and David Garrow this morning. I don't know if you've

583
00:31:13,880 --> 00:31:15,960
Speaker 1: seen it, Bill, but the essay in the Washington Post

584
00:31:16,040 --> 00:31:20,280
Speaker 1: by a grievously ill uh John McCain of your U. S. Navy.

585
00:31:20,280 --> 00:31:22,720
Speaker 1: Bill Gross served in the U. S. Navy a few

586
00:31:22,760 --> 00:31:27,760
Speaker 1: tours of duty ago. Uh Senator McCain. Bill Gross begs

587
00:31:28,160 --> 00:31:34,240
Speaker 1: for bipartisan solutions in Washington. He begs for a return

588
00:31:34,400 --> 00:31:38,000
Speaker 1: to the processes of another time and place. Can we

589
00:31:38,080 --> 00:31:41,760
Speaker 1: get tax reform, can we get infrastructure build out? Can

590
00:31:41,800 --> 00:31:46,520
Speaker 1: we get Washington to do constructively in the present milieu?

591
00:31:46,840 --> 00:31:48,200
Speaker 1: Or do we have to get back to what we

592
00:31:48,280 --> 00:31:53,840
Speaker 1: knew long ago? Well, I don't. I don't think it

593
00:31:53,880 --> 00:31:57,560
Speaker 1: would get much change under the current administration, to be critical,

594
00:31:57,640 --> 00:32:01,360
Speaker 1: and under the current Congress, so less addressed. Tax cuts,

595
00:32:01,520 --> 00:32:05,200
Speaker 1: uh you know. The other day President Trump suggested that

596
00:32:05,960 --> 00:32:09,040
Speaker 1: tax cuts would be good for the middle class because

597
00:32:09,240 --> 00:32:15,280
Speaker 1: when corporations have higher profits, they provide for higher wages, etcetera, etcetera. Well,

598
00:32:15,480 --> 00:32:17,960
Speaker 1: has that really happened over the past five to ten years.

599
00:32:18,000 --> 00:32:22,560
Speaker 1: Not really, It's a different geopolitical world. I think tax cuts, um,

600
00:32:22,640 --> 00:32:25,640
Speaker 1: while not the highest in the world, is Trump claims,

601
00:32:25,840 --> 00:32:28,480
Speaker 1: you know, are about average for the world at about

602
00:32:29,480 --> 00:32:33,120
Speaker 1: when you include all of our uh you know, special situations.

603
00:32:33,880 --> 00:32:39,240
Speaker 1: I think tax cuts will continue the fabled carried interest policy,

604
00:32:39,320 --> 00:32:41,600
Speaker 1: which is, to my way of thinking, one of the

605
00:32:41,600 --> 00:32:46,000
Speaker 1: most ridiculous policies that ever existed. I think we're moving

606
00:32:46,040 --> 00:32:50,640
Speaker 1: towards a twenty two or average corporate tax rate. Uh.

607
00:32:50,680 --> 00:32:53,400
Speaker 1: I do think these policies will leave the middle class

608
00:32:53,400 --> 00:32:57,080
Speaker 1: even more behind. And I do think ultimately that the

609
00:32:57,720 --> 00:33:01,360
Speaker 1: universal income in the next ten or twenty years, perhaps

610
00:33:01,440 --> 00:33:04,600
Speaker 1: two different administrations, is where we're headed, and not to

611
00:33:05,080 --> 00:33:09,080
Speaker 1: lower and lower tax cuts and supply side economics. David

612
00:33:09,120 --> 00:33:13,920
Speaker 1: does it sound like he's running for office Newport Beach?

613
00:33:14,000 --> 00:33:17,000
Speaker 1: That the council very very good, phil Growth. I want

614
00:33:17,000 --> 00:33:18,800
Speaker 1: to ask you about trade. We're seeing the resumption of

615
00:33:19,040 --> 00:33:22,200
Speaker 1: trade talks in Mexico City today. I believe between the US,

616
00:33:22,280 --> 00:33:25,520
Speaker 1: Mexico and Canada, we've had a president use increasingly heated

617
00:33:25,600 --> 00:33:28,480
Speaker 1: rhetoric about what might happen to NAFTA, talking openly about

618
00:33:28,560 --> 00:33:31,760
Speaker 1: terminating that particular deal. What would the effect of that

619
00:33:31,840 --> 00:33:34,239
Speaker 1: be to to say, how we're going to scrap this

620
00:33:34,280 --> 00:33:36,480
Speaker 1: now long existing plan and uh, you know, I guess

621
00:33:36,560 --> 00:33:38,800
Speaker 1: he hopes to rebuild it or start from scratch. What

622
00:33:38,800 --> 00:33:41,840
Speaker 1: would the effect of that be, as you see in well,

623
00:33:41,840 --> 00:33:44,800
Speaker 1: it would be disastrous, you know, ten or fifteen years

624
00:33:44,840 --> 00:33:48,520
Speaker 1: on in terms of NAFTA, and to reoriin it or

625
00:33:48,600 --> 00:33:52,280
Speaker 1: to uh, you know, to to cancel it. Um. You know,

626
00:33:52,320 --> 00:33:55,880
Speaker 1: obviously NAFTA has had some negative effects in terms of

627
00:33:56,160 --> 00:33:59,280
Speaker 1: American wages that should have been expected. And to the

628
00:33:59,360 --> 00:34:02,280
Speaker 1: extent that it's what Trump is trying to attack, you know,

629
00:34:02,360 --> 00:34:05,680
Speaker 1: then find perhaps something else in terms of the UH

630
00:34:05,920 --> 00:34:09,359
Speaker 1: the agreement could could take place. But yes, you know,

631
00:34:09,440 --> 00:34:12,160
Speaker 1: Trump is art of the deal. Out of the talk.

632
00:34:12,680 --> 00:34:15,719
Speaker 1: UH to this point, out of the talk hasn't really

633
00:34:15,800 --> 00:34:19,279
Speaker 1: gained as much anywhere in terms of legislation. But I

634
00:34:19,280 --> 00:34:21,440
Speaker 1: think it would be disastrous and I think at all

635
00:34:21,480 --> 00:34:24,440
Speaker 1: costs it should be avoided. A free trade agreement between

636
00:34:24,920 --> 00:34:28,000
Speaker 1: Mexico and Canada and North America has perhaps one of

637
00:34:28,000 --> 00:34:33,520
Speaker 1: the strongest and most productive free trade agreements in the world. Bill,

638
00:34:33,520 --> 00:34:35,279
Speaker 1: What are you doing with your portfolio? What is the

639
00:34:35,280 --> 00:34:39,200
Speaker 1: gross strategy? September is the new year for business. Everybody's

640
00:34:39,200 --> 00:34:42,759
Speaker 1: struggle struggling to find alpha in fixed income? What are

641
00:34:42,800 --> 00:34:48,000
Speaker 1: you doing? What is the gross strategy with janis unconstrained? Well,

642
00:34:48,080 --> 00:34:52,360
Speaker 1: janison constrained. UH, it's objective Thomas four to five percent.

643
00:34:53,120 --> 00:34:55,759
Speaker 1: It's not a hedge fund. It isn't looking for double

644
00:34:55,800 --> 00:34:58,359
Speaker 1: digit gains. How do you do that in this type

645
00:34:58,400 --> 00:35:01,320
Speaker 1: of world with the treasury at two point one percent

646
00:35:01,440 --> 00:35:06,440
Speaker 1: and stocks at a near historic pe ratio. It's very difficult.

647
00:35:06,440 --> 00:35:09,239
Speaker 1: What I've done over the past few months and a

648
00:35:09,320 --> 00:35:12,880
Speaker 1: few quarters is to sell volatility, not to buy it,

649
00:35:12,920 --> 00:35:16,279
Speaker 1: but to sell volatility to volatility, and to assume the

650
00:35:16,360 --> 00:35:20,440
Speaker 1: interest rates take the tenure treasury stay between two percent

651
00:35:20,600 --> 00:35:24,400
Speaker 1: and two point three percent, and if that happens, then, uh,

652
00:35:24,600 --> 00:35:28,080
Speaker 1: you know, a fortified percent number it can be can

653
00:35:28,160 --> 00:35:32,799
Speaker 1: be garnered based upon the premiums that options seller it

654
00:35:32,840 --> 00:35:35,920
Speaker 1: can provide. And so that in combination with you know,

655
00:35:36,000 --> 00:35:40,839
Speaker 1: two percent yields on eighteen month corporate paper, produce a

656
00:35:40,880 --> 00:35:45,319
Speaker 1: conservative but very low volatility type of portfolio with a

657
00:35:45,360 --> 00:35:49,240
Speaker 1: fortified percent return. Bill Gross, thank you so much, greatly,

658
00:35:49,280 --> 00:35:53,279
Speaker 1: greatly appreciate that. Today he is with Janis Anderson David

659
00:35:53,320 --> 00:35:56,239
Speaker 1: what we learned there. I I'm still amazed that he

660
00:35:56,280 --> 00:36:00,200
Speaker 1: can't get above a three percent GDP. Yeah, no, it's uh,

661
00:36:00,200 --> 00:36:02,640
Speaker 1: you know, I'm I can tell he said the draft

662
00:36:02,680 --> 00:36:04,680
Speaker 1: jobs report was weak, and uh, you know, looking at

663
00:36:04,680 --> 00:36:07,920
Speaker 1: these data, one has to sympathize with that assessment of it,

664
00:36:08,560 --> 00:36:10,760
Speaker 1: I think, and it'll be interesting to hear what Garrit

665
00:36:10,760 --> 00:36:12,279
Speaker 1: Cone has to say with the White House, to say

666
00:36:12,280 --> 00:36:15,000
Speaker 1: how the President reacts to UH, to this job's report

667
00:36:15,239 --> 00:36:16,840
Speaker 1: as well, in light of the numbers that we that

668
00:36:16,880 --> 00:36:19,719
Speaker 1: we got today. UH. And I was impressed also just

669
00:36:19,760 --> 00:36:21,840
Speaker 1: by how confident he is that we're not going to

670
00:36:21,920 --> 00:36:24,200
Speaker 1: see much differing when it comes to the dead ceiling,

671
00:36:24,200 --> 00:36:26,200
Speaker 1: when it comes to funding the government here over these

672
00:36:26,200 --> 00:36:27,480
Speaker 1: next few weeks. I know there are a lot of

673
00:36:27,960 --> 00:36:30,360
Speaker 1: economists and strangers I've talked to have more anxiety this

674
00:36:30,400 --> 00:36:33,359
Speaker 1: time around, saying that the terrain somehow different. I think

675
00:36:33,400 --> 00:36:37,759
Speaker 1: anxiety perfectly captures UH, the path forward for the next

676
00:36:37,800 --> 00:36:39,960
Speaker 1: thirty days. I we don't even got October, you know.

677
00:36:40,600 --> 00:36:42,719
Speaker 1: I am f meetings in October. That's what I can.

678
00:36:43,400 --> 00:36:46,600
Speaker 1: You bought your ticket right now? Yeah, I think I'm

679
00:36:46,640 --> 00:36:48,919
Speaker 1: slotted in. I don't know what we're doing. We'll figure

680
00:36:48,960 --> 00:37:02,840
Speaker 1: out what to do. This is Gary Khen, National Economic

681
00:37:03,239 --> 00:37:06,520
Speaker 1: Council Director, Gary Real, pleasure to have you with us.

682
00:37:07,000 --> 00:37:09,719
Speaker 1: How do you interpret the number today? Are we sort

683
00:37:09,719 --> 00:37:12,040
Speaker 1: of back to normal in the jobs market or is

684
00:37:12,080 --> 00:37:15,400
Speaker 1: this the beginning of a weaker cycle? Well, thanks for

685
00:37:15,400 --> 00:37:17,359
Speaker 1: having me, And before I get started, look I just

686
00:37:17,400 --> 00:37:20,840
Speaker 1: want to reach out to everyone in Louisiana and Texas,

687
00:37:20,920 --> 00:37:23,440
Speaker 1: and you'll remind all of your viewers, you know, all

688
00:37:23,480 --> 00:37:25,600
Speaker 1: the tragedy that they're still going through, and they remind

689
00:37:25,640 --> 00:37:27,239
Speaker 1: everyone that we at the White House, you know, are

690
00:37:27,280 --> 00:37:29,760
Speaker 1: not forgetting about them for a second, and we're laser

691
00:37:29,800 --> 00:37:32,080
Speaker 1: focused on what's going on out there. Look on the

692
00:37:32,120 --> 00:37:35,080
Speaker 1: on the economic data today. You know, it's part of

693
00:37:35,120 --> 00:37:38,160
Speaker 1: the natural growth that we're seeing in the economy. You know,

694
00:37:38,200 --> 00:37:39,759
Speaker 1: if you look at the data we had this week,

695
00:37:39,800 --> 00:37:42,359
Speaker 1: we had a GDP number of three percent. This week

696
00:37:42,400 --> 00:37:44,600
Speaker 1: we had the jobs number that is still very good.

697
00:37:45,000 --> 00:37:46,600
Speaker 1: If I would have told you at the beginning of

698
00:37:46,640 --> 00:37:48,759
Speaker 1: the year, told you inauguration day that we'd be at

699
00:37:48,800 --> 00:37:52,279
Speaker 1: three percent GDP and four point four percent unemployment, you

700
00:37:52,280 --> 00:37:54,319
Speaker 1: would have said, hey, those are great numbers that that

701
00:37:54,320 --> 00:37:57,080
Speaker 1: that would be an amazing accomplishment by Labor day what

702
00:37:57,239 --> 00:38:00,399
Speaker 1: we're there. So overall, we're very, very pleased with where

703
00:38:00,400 --> 00:38:02,760
Speaker 1: we are in the economy, where we are in the cycle.

704
00:38:03,160 --> 00:38:04,680
Speaker 1: We still know there's a lot of work to do

705
00:38:04,680 --> 00:38:06,560
Speaker 1: in a lot more upside and the President is very

706
00:38:06,560 --> 00:38:09,240
Speaker 1: focused on that. That's why we launched our tax agenda

707
00:38:09,280 --> 00:38:11,400
Speaker 1: this week because we think we can really grow the

708
00:38:11,440 --> 00:38:14,160
Speaker 1: economy much further from here before we get to taxes.

709
00:38:14,560 --> 00:38:17,800
Speaker 1: You pointed the picture that jobs are consistently very very solid.

710
00:38:18,000 --> 00:38:20,280
Speaker 1: On the flip side, wages just aren't really going anywhere

711
00:38:20,280 --> 00:38:22,560
Speaker 1: two and a half percent a year on year, and

712
00:38:22,600 --> 00:38:27,120
Speaker 1: also inflation also really stagnant. What is the right monetary

713
00:38:27,160 --> 00:38:31,000
Speaker 1: policy for something like that. So look, look, we we

714
00:38:31,040 --> 00:38:33,640
Speaker 1: are concerned about the wages and that has a lot

715
00:38:33,760 --> 00:38:35,640
Speaker 1: to do with our tax policy. If you listen to

716
00:38:35,680 --> 00:38:39,240
Speaker 1: what the President outlined earlier this week, he talked about

717
00:38:39,320 --> 00:38:42,200
Speaker 1: our corporate tax system or a business tax system, and

718
00:38:42,239 --> 00:38:45,239
Speaker 1: how inefficient our business tax system is, and how we

719
00:38:45,320 --> 00:38:49,120
Speaker 1: really penalize businesses to being American. When you penalize businesses

720
00:38:49,160 --> 00:38:51,880
Speaker 1: to being America, they don't hire American workers. We need

721
00:38:51,920 --> 00:38:54,480
Speaker 1: to get our tax rates down to be competitive with

722
00:38:54,520 --> 00:38:56,120
Speaker 1: the rest of the world. When they get our tax

723
00:38:56,200 --> 00:38:58,880
Speaker 1: rates down, we then compete for labor. You compete for

724
00:38:59,000 --> 00:39:02,359
Speaker 1: labor by driving wages and paying more wages to get

725
00:39:02,400 --> 00:39:05,399
Speaker 1: people to work for you. So we are concerned about

726
00:39:05,400 --> 00:39:07,480
Speaker 1: wage growth. We do want to get wage growth back

727
00:39:07,520 --> 00:39:09,640
Speaker 1: in the system. You're absolutely right. When I saw the

728
00:39:09,719 --> 00:39:11,560
Speaker 1: numbers you know, the first thing I looked at was

729
00:39:11,600 --> 00:39:13,400
Speaker 1: the wage number, and it's been flat at two and

730
00:39:13,400 --> 00:39:15,439
Speaker 1: a half for a long period of time. We need

731
00:39:15,480 --> 00:39:18,920
Speaker 1: to put more money back in US consumers pockets, and

732
00:39:18,960 --> 00:39:21,160
Speaker 1: that's what we're trying to do, both by wage growth

733
00:39:21,200 --> 00:39:24,400
Speaker 1: and by by by tax efficiency. So, yere, you kind

734
00:39:24,400 --> 00:39:26,520
Speaker 1: of diverted my question there, So that seems that it's

735
00:39:26,560 --> 00:39:29,440
Speaker 1: a fiscal policy issue, not a monetary policy issue. Do

736
00:39:29,440 --> 00:39:32,280
Speaker 1: you feel monetary policy then cannot help with the wage

737
00:39:32,280 --> 00:39:36,560
Speaker 1: inflation debate? Look, I think wage inflation has to come

738
00:39:36,640 --> 00:39:40,120
Speaker 1: through demand for more workers at higher price. And the

739
00:39:40,200 --> 00:39:42,960
Speaker 1: way we create demand for workers is we create a

740
00:39:43,000 --> 00:39:45,360
Speaker 1: better operating environment in the United States. You create a

741
00:39:45,400 --> 00:39:47,880
Speaker 1: better operating environment in the United States by making the

742
00:39:47,960 --> 00:39:51,160
Speaker 1: United States more competitive. You create the competition by lowering

743
00:39:51,400 --> 00:39:54,480
Speaker 1: the business tax rate and having businesses have to be

744
00:39:54,640 --> 00:39:56,640
Speaker 1: here and want to be here in the United States.

745
00:39:56,680 --> 00:39:59,520
Speaker 1: And that's exactly what the President laid out earlier this week.

746
00:40:00,000 --> 00:40:01,920
Speaker 1: All right, So let's go to tax reform for a second.

747
00:40:01,960 --> 00:40:04,000
Speaker 1: We've been hearing I feel a lot of mixed messages

748
00:40:04,000 --> 00:40:05,960
Speaker 1: from the White House and lawmakers in terms of that

749
00:40:06,040 --> 00:40:08,520
Speaker 1: next step. For example, are you going to have to

750
00:40:08,520 --> 00:40:11,680
Speaker 1: release additional tax details in a blueprint later this month.

751
00:40:11,680 --> 00:40:14,360
Speaker 1: That's what we heard from Secretary Minution yesterday and some

752
00:40:14,440 --> 00:40:18,880
Speaker 1: news outlets. So as I think you're all acutely aware,

753
00:40:19,280 --> 00:40:22,120
Speaker 1: you know, Secretary Minutum, myself, the leadership of the Senate,

754
00:40:22,200 --> 00:40:26,000
Speaker 1: leadership of the House, we've been working literally since November

755
00:40:26,040 --> 00:40:30,279
Speaker 1: and December on a tax blueprint. We've met NonStop since then.

756
00:40:30,400 --> 00:40:33,400
Speaker 1: The six of us have agreed on a outline of blueprint,

757
00:40:33,400 --> 00:40:36,080
Speaker 1: a skeleton. We agree on what we need to do

758
00:40:36,200 --> 00:40:39,600
Speaker 1: for tax reform. We're now working with the House Ways

759
00:40:39,600 --> 00:40:42,200
Speaker 1: and Means Committee and the Senate Finance Committee to really

760
00:40:42,320 --> 00:40:45,440
Speaker 1: finalize what that blueprint will look like. I would say,

761
00:40:45,440 --> 00:40:47,279
Speaker 1: take a skeleton and put the muscles on and put

762
00:40:47,280 --> 00:40:49,319
Speaker 1: the skin on it. That's going to get released in

763
00:40:49,360 --> 00:40:53,000
Speaker 1: the next in the next whatever weeks or months, as

764
00:40:53,120 --> 00:40:57,080
Speaker 1: those committees get together and finalize all of the details,

765
00:40:57,120 --> 00:40:59,719
Speaker 1: as the natural governing process happens, and that's going to

766
00:40:59,800 --> 00:41:03,560
Speaker 1: start literally next week. So Gary is the legislation in

767
00:41:03,600 --> 00:41:06,840
Speaker 1: the hands of the Tax Writing Committee right now. The

768
00:41:06,960 --> 00:41:10,120
Speaker 1: legislation is in all of our hands. We're working together,

769
00:41:10,480 --> 00:41:12,920
Speaker 1: the group of six, the six of us will be

770
00:41:13,000 --> 00:41:14,799
Speaker 1: in the White House with the President next week. We're

771
00:41:14,840 --> 00:41:17,120
Speaker 1: going to continue to drive Gary, I get that. But

772
00:41:17,160 --> 00:41:18,600
Speaker 1: in order to move it forward, it has to be

773
00:41:18,640 --> 00:41:20,400
Speaker 1: with the Tax Writing Committee. So have you have you

774
00:41:20,440 --> 00:41:24,320
Speaker 1: passed it off yet to them. There's a communal effort

775
00:41:24,360 --> 00:41:26,720
Speaker 1: going on here. We're trying to we we're not trying.

776
00:41:26,760 --> 00:41:30,680
Speaker 1: We are working very collegially together to get tax reform

777
00:41:30,800 --> 00:41:33,960
Speaker 1: done in a way that everyone buys in in every

778
00:41:34,000 --> 00:41:37,319
Speaker 1: step of the way. And that's exactly what's going on here. Ultimately,

779
00:41:37,560 --> 00:41:39,960
Speaker 1: tax reform has to be voted on in the House

780
00:41:40,000 --> 00:41:42,560
Speaker 1: and the Senate. So yes, we're working with the House

781
00:41:42,600 --> 00:41:45,319
Speaker 1: and the Senate to do that. Well, okay, fair enough,

782
00:41:45,440 --> 00:41:48,120
Speaker 1: so you're talking more. We're all working together. But then

783
00:41:48,160 --> 00:41:50,439
Speaker 1: you have Senator McCain coming out in the Washington Post

784
00:41:50,520 --> 00:41:55,400
Speaker 1: with a very very scathing review on President Trump. Um,

785
00:41:55,520 --> 00:41:58,840
Speaker 1: he's saying, we need to compromise, even if we have

786
00:41:58,920 --> 00:42:00,919
Speaker 1: to take something off the table, well that we didn't want,

787
00:42:00,960 --> 00:42:03,280
Speaker 1: but saying that we have a president without any experience,

788
00:42:03,280 --> 00:42:06,160
Speaker 1: he's poorly informed, he's impulsive. We don't answer to him.

789
00:42:06,320 --> 00:42:09,239
Speaker 1: We answered to the American people. Doesn't stuff like that

790
00:42:09,360 --> 00:42:13,600
Speaker 1: make the cooperation you're talking about impossible. It seems like

791
00:42:13,920 --> 00:42:16,480
Speaker 1: we have a lot of cooperation, a lot of momentum

792
00:42:16,480 --> 00:42:19,560
Speaker 1: on tax reform. I think a lot of us understand

793
00:42:19,600 --> 00:42:23,440
Speaker 1: the importance of getting taxes right, of simplifying the tax code,

794
00:42:23,560 --> 00:42:27,200
Speaker 1: of returning more of people's heart earned income back to

795
00:42:27,280 --> 00:42:30,319
Speaker 1: the American public, not sending it to the government to spend,

796
00:42:30,360 --> 00:42:33,279
Speaker 1: allowing people to spend their own money, simplifying the tax code.

797
00:42:33,400 --> 00:42:36,080
Speaker 1: The basic principles that the present laid out earlier this

798
00:42:36,120 --> 00:42:39,480
Speaker 1: week appeal to everyone in this country. Why shouldn't we

799
00:42:39,560 --> 00:42:41,560
Speaker 1: get out of the way and allow more Americans to

800
00:42:41,600 --> 00:42:44,239
Speaker 1: keep more of their hard EARA. I don't think there's

801
00:42:44,239 --> 00:42:46,360
Speaker 1: a politician doesn't agree with that. I agree with you,

802
00:42:46,360 --> 00:42:47,799
Speaker 1: I think as a person in the world who doesn't

803
00:42:47,800 --> 00:42:49,880
Speaker 1: agree with that right. But then you have a Mitch McConnell,

804
00:42:49,960 --> 00:42:52,640
Speaker 1: who's a Trump has said very disparaging things on Twitter

805
00:42:52,680 --> 00:42:54,640
Speaker 1: about you, Speaker Paul Ryan, who is at odds with

806
00:42:54,680 --> 00:42:56,520
Speaker 1: the President. Now you have Senator McCain coming out and

807
00:42:56,560 --> 00:42:59,799
Speaker 1: do very scathing review. You might want it, but how

808
00:42:59,840 --> 00:43:02,359
Speaker 1: you get their matters and doesn't. How you get there

809
00:43:02,680 --> 00:43:06,440
Speaker 1: doesn't work anymore. If we're like this in Congress, I'm

810
00:43:06,480 --> 00:43:09,040
Speaker 1: confident that we're working well with comngregrants because I'm and

811
00:43:09,040 --> 00:43:10,960
Speaker 1: I'm speaking to many of the people you just mentioned.

812
00:43:10,960 --> 00:43:13,479
Speaker 1: We're speaking on a daily basis, and we've got great

813
00:43:13,520 --> 00:43:16,040
Speaker 1: momentum on taxes right now. Okay, So tell me what

814
00:43:16,040 --> 00:43:17,560
Speaker 1: you're gonna do in February. What job are you going

815
00:43:17,600 --> 00:43:20,640
Speaker 1: to have. I'm gonna be right here doing what I'm

816
00:43:20,640 --> 00:43:22,000
Speaker 1: doing right now. You're gonna be in front of the

817
00:43:22,000 --> 00:43:24,560
Speaker 1: White House, in front of a different building. I'm gonna

818
00:43:24,560 --> 00:43:26,960
Speaker 1: be doing right exactly what I'm doing right now, being

819
00:43:26,960 --> 00:43:29,440
Speaker 1: front the White House, with this beautiful new infrastructure being

820
00:43:29,440 --> 00:43:32,239
Speaker 1: built out here. We'll be working on infrastructure in February. Okay,

821
00:43:32,320 --> 00:43:34,080
Speaker 1: nice semm, Gary, But I asked the question because a

822
00:43:34,120 --> 00:43:35,600
Speaker 1: lot of heat has been made about the fact that

823
00:43:35,880 --> 00:43:38,400
Speaker 1: you weren't mentioned in that Missouri speech by President Trump

824
00:43:38,520 --> 00:43:41,280
Speaker 1: on Wednesday in terms of those working towards tax reform.

825
00:43:41,600 --> 00:43:43,640
Speaker 1: So there's questions about whether you want to stick around

826
00:43:43,640 --> 00:43:47,400
Speaker 1: to even be considered for FED chair. Now. I'm extremely

827
00:43:47,440 --> 00:43:49,640
Speaker 1: happy doing what I'm doing. I have a once in

828
00:43:49,680 --> 00:43:52,759
Speaker 1: a lifetime opportunity something that hasn't been done in over

829
00:43:52,880 --> 00:43:55,239
Speaker 1: thirty years, to reform the U S tax code. I

830
00:43:55,360 --> 00:43:57,920
Speaker 1: passionately believe it needs to be done, and I'm one

831
00:43:57,920 --> 00:43:59,480
Speaker 1: of the luckiest people in the world. Do we have

832
00:43:59,560 --> 00:44:01,720
Speaker 1: the opportun who to work on it. I'm really excited

833
00:44:01,719 --> 00:44:03,400
Speaker 1: about what I'm doing, So you do not want to

834
00:44:03,440 --> 00:44:07,000
Speaker 1: be head of the FED. I'm really excited about doing

835
00:44:07,040 --> 00:44:10,880
Speaker 1: what I'm doing. All right, let let's wind up on Harvey.

836
00:44:11,000 --> 00:44:13,320
Speaker 1: You brought it up in terms of extending your condolences

837
00:44:13,320 --> 00:44:16,080
Speaker 1: to those in Texas and Louisiana. Many say that Harvey

838
00:44:16,120 --> 00:44:19,680
Speaker 1: could be the most expensive natural disaster in US history.

839
00:44:20,080 --> 00:44:23,000
Speaker 1: How much harder does the tax and budget debate become

840
00:44:23,040 --> 00:44:26,239
Speaker 1: now because you have deficit hawks in Congress in the

841
00:44:26,239 --> 00:44:30,920
Speaker 1: Republican Party. Look, we have to deal with the Harvey situation.

842
00:44:31,400 --> 00:44:34,680
Speaker 1: It's it's it's it's not a debatable issue. What people

843
00:44:34,680 --> 00:44:39,080
Speaker 1: in Texas and Louisa Zana are going through is unthinkable, unimaginable.

844
00:44:39,120 --> 00:44:41,560
Speaker 1: I I've seen a lot of data. You've seen the data.

845
00:44:41,880 --> 00:44:44,839
Speaker 1: We're analyzing it literally twenty four hours a day. Here.

846
00:44:45,040 --> 00:44:47,640
Speaker 1: We have to help the people, We have to help

847
00:44:47,680 --> 00:44:50,479
Speaker 1: Houston return. It's just not a debate. So we're gonna

848
00:44:50,520 --> 00:44:52,840
Speaker 1: have to spend money, We're gonna have to pass some

849
00:44:52,920 --> 00:44:55,600
Speaker 1: incremental relief bills, and we're just gonna have to do that.

850
00:44:55,680 --> 00:44:59,959
Speaker 1: It's not a choice. So it's just part of governing. Look,

851
00:45:00,040 --> 00:45:03,400
Speaker 1: part of running the government is dealing with unforeseen issues.

852
00:45:03,600 --> 00:45:06,200
Speaker 1: We're gonna deal with this and we're gonna move on. Um. Look,

853
00:45:06,360 --> 00:45:08,879
Speaker 1: the part that it's gonna be more troubling is it's

854
00:45:08,880 --> 00:45:11,000
Speaker 1: gonna it's gonna have impact on a lot of the

855
00:45:11,040 --> 00:45:13,960
Speaker 1: economic data. You know, the economic data that we've just gotten.

856
00:45:13,960 --> 00:45:16,160
Speaker 1: This unemployment data is probably the last that a clean

857
00:45:16,239 --> 00:45:18,680
Speaker 1: unemployment data we're gonna have for many, many months. As

858
00:45:18,719 --> 00:45:21,160
Speaker 1: we go through the recovery process and people go in

859
00:45:21,239 --> 00:45:23,759
Speaker 1: and out of unemployment, as they rebuild their houses and

860
00:45:23,800 --> 00:45:26,400
Speaker 1: they rebuild their lives, we're gonna have a bunch of

861
00:45:26,440 --> 00:45:28,719
Speaker 1: data that maybe won't make as much sense for the

862
00:45:28,719 --> 00:45:31,200
Speaker 1: next three or four five months. So, you know, normalizing

863
00:45:31,320 --> 00:45:34,160
Speaker 1: data for hurricanes and natural disasters is going to be

864
00:45:34,200 --> 00:45:36,600
Speaker 1: more difficult for us to truly get a bigger picture

865
00:45:36,719 --> 00:45:39,279
Speaker 1: of what's going on in the U. S. Economy. Gary Cohen,

866
00:45:39,400 --> 00:45:42,200
Speaker 1: real pleasure, Thank you so much for joining us. Gary Cohn,

867
00:45:42,320 --> 00:45:45,000
Speaker 1: pointing to the infrastructure happening behind him on the White

868
00:45:45,000 --> 00:45:49,040
Speaker 1: House Law and US National Economic Council Director Alex Steel

869
00:45:49,480 --> 00:45:53,800
Speaker 1: on Bloomberg Television to radio worldwide with a lively interview.

870
00:45:55,080 --> 00:46:00,320
Speaker 1: I would state that that's the single most Gary tone

871
00:46:00,560 --> 00:46:04,480
Speaker 1: I've heard, Gary Cone. He's getting used to the job,

872
00:46:05,200 --> 00:46:07,160
Speaker 1: is how I would put it. Yeah, I'm mixing it up,

873
00:46:07,200 --> 00:46:09,040
Speaker 1: I would say at Tessling a bit. She asked him

874
00:46:09,040 --> 00:46:11,360
Speaker 1: several times if he wanted to be fed cheered directly,

875
00:46:12,160 --> 00:46:15,200
Speaker 1: and he said repeatedly, he's happy doing what he's doing.

876
00:46:15,239 --> 00:46:18,120
Speaker 1: Is there is with all of this, there is on

877
00:46:18,160 --> 00:46:20,960
Speaker 1: the job training. One of the things I always cite

878
00:46:21,000 --> 00:46:24,040
Speaker 1: when I talked to college students about this is Greg Mankou,

879
00:46:24,760 --> 00:46:28,600
Speaker 1: the acclaimed professor at Harvard, and he talked to everybody

880
00:46:28,640 --> 00:46:31,200
Speaker 1: the first three or four months he was chairman of

881
00:46:31,200 --> 00:46:34,040
Speaker 1: the president Council of Economic Advisors, like it was a

882
00:46:34,160 --> 00:46:37,520
Speaker 1: lecture at ted lecture, and it took him a while

883
00:46:38,160 --> 00:46:41,320
Speaker 1: to try to get towards the cadence it's expected, Yeah,

884
00:46:41,480 --> 00:46:43,880
Speaker 1: of executive officials. And of course, I think teaching that

885
00:46:43,920 --> 00:46:46,920
Speaker 1: introductory economics course to thousands at Harvard probably prepares you

886
00:46:46,960 --> 00:46:50,440
Speaker 1: well for the public speaking component. But you're right, you're right,

887
00:46:50,440 --> 00:46:52,480
Speaker 1: there is a learning curve here. And uh, you know

888
00:46:52,600 --> 00:46:54,560
Speaker 1: this is this is a regular thing that Gary Cone

889
00:46:54,560 --> 00:46:56,520
Speaker 1: has to do now in this capacity. And I agree

890
00:46:56,520 --> 00:46:59,160
Speaker 1: with you. I think he's seemingly more comfortable with the role.

891
00:46:59,280 --> 00:47:01,840
Speaker 1: He talked around the news of the day, which is

892
00:47:01,840 --> 00:47:05,080
Speaker 1: the McCain essay and the Washington Post, but that he

893
00:47:05,160 --> 00:47:09,520
Speaker 1: did circle back and and it really address the delicacies

894
00:47:09,640 --> 00:47:15,280
Speaker 1: of the administration, David speaking to legislative leaders as compared

895
00:47:15,320 --> 00:47:19,239
Speaker 1: to the president. That was an indirect illusion. Yeah, I'd said.

896
00:47:19,239 --> 00:47:21,040
Speaker 1: We We've brought this piece up a couple of times today.

897
00:47:21,040 --> 00:47:23,080
Speaker 1: If you read anything today, read that piece in the

898
00:47:23,120 --> 00:47:26,520
Speaker 1: Washington Post by the senior Senator from Arizona, John McCain,

899
00:47:26,600 --> 00:47:30,919
Speaker 1: writing about, yes, the relationship between Congress and the White House,

900
00:47:30,920 --> 00:47:32,960
Speaker 1: but also just about the institution he has served for

901
00:47:33,239 --> 00:47:36,360
Speaker 1: so many decades now, A very important piece in the

902
00:47:36,400 --> 00:47:51,239
Speaker 1: Washington Post today. Usually when we get the points guy in,

903
00:47:51,840 --> 00:47:55,279
Speaker 1: we chit chat about banks and Miles and all that.

904
00:47:55,360 --> 00:47:57,760
Speaker 1: We will do that today because that's what you expect

905
00:47:58,080 --> 00:48:02,160
Speaker 1: from Brian Kelly, but we must direct our attention to

906
00:48:02,400 --> 00:48:07,440
Speaker 1: his real real abilities to synthesize all going on at

907
00:48:07,480 --> 00:48:12,600
Speaker 1: George Bush Intercontinental and also hobbyist or Cobby Airport as well.

908
00:48:12,760 --> 00:48:16,839
Speaker 1: Brian Kelly, tell us your perspective on the damaged airplane

909
00:48:16,840 --> 00:48:20,560
Speaker 1: travel in and out of Houston. Yeah, Houston, it's going

910
00:48:20,600 --> 00:48:22,960
Speaker 1: to take a long time to get back up and running. Today.

911
00:48:23,239 --> 00:48:25,600
Speaker 1: Actually yesterday I think they had United had twenty seven

912
00:48:25,640 --> 00:48:28,880
Speaker 1: departures and they normally have about five hundred, so we

913
00:48:28,960 --> 00:48:32,200
Speaker 1: are way way behind. You know, basically, avoid Houston at

914
00:48:32,200 --> 00:48:34,960
Speaker 1: all costs. You know, most airlines actually every airline will

915
00:48:35,040 --> 00:48:38,520
Speaker 1: let you reroute for free or change your flight. So basically,

916
00:48:38,560 --> 00:48:41,160
Speaker 1: avoid Houston at all costs. But that being said, this

917
00:48:41,200 --> 00:48:43,319
Speaker 1: weekend is still going to be a record weekend for

918
00:48:43,480 --> 00:48:45,920
Speaker 1: Labor Day travel. So even if you're not going to

919
00:48:45,960 --> 00:48:48,080
Speaker 1: Houston or through it, the planes are going to be

920
00:48:48,080 --> 00:48:51,680
Speaker 1: packed this weekend. How do how do airlines change or

921
00:48:51,960 --> 00:48:54,680
Speaker 1: or or express some flexibility when we see a natural

922
00:48:54,719 --> 00:48:56,920
Speaker 1: disaster like this one. I imagine there are a lot

923
00:48:56,920 --> 00:48:59,600
Speaker 1: of people keen to get to the area to help out,

924
00:48:59,640 --> 00:49:03,040
Speaker 1: to respond to the disaster. Do we see airlines accommodating

925
00:49:03,440 --> 00:49:06,919
Speaker 1: interest in doing that. Yeah, well, in terms of giving

926
00:49:06,920 --> 00:49:09,920
Speaker 1: away free flights for relief help, some airlines will do that.

927
00:49:10,080 --> 00:49:12,479
Speaker 1: I think on the opposite side, airlines you know, because

928
00:49:12,480 --> 00:49:15,360
Speaker 1: it's a huge stress on their systems and their customer service,

929
00:49:15,360 --> 00:49:18,399
Speaker 1: so they'll let people rebook for free, uh, to change

930
00:49:18,480 --> 00:49:21,280
Speaker 1: their flights. Um. So they're called weather waivers, So anytime

931
00:49:21,280 --> 00:49:24,719
Speaker 1: there's a storm coming most airlines it behooves them to

932
00:49:24,719 --> 00:49:27,560
Speaker 1: to let consumers switch their flights for free. Um. Some

933
00:49:27,600 --> 00:49:29,480
Speaker 1: airlines are more generous than others with you know, the

934
00:49:30,000 --> 00:49:33,160
Speaker 1: time frames in which you can change. Brian, let's get

935
00:49:33,160 --> 00:49:36,239
Speaker 1: back to the business at hand, which is everybody's telling

936
00:49:36,239 --> 00:49:39,399
Speaker 1: me airplane travels cheap. I look on the screens. You've

937
00:49:39,440 --> 00:49:42,520
Speaker 1: gotta be kidding me. I've never seen fairs as expensive

938
00:49:42,560 --> 00:49:45,080
Speaker 1: as they are. Which way is it right now? Well,

939
00:49:45,120 --> 00:49:46,920
Speaker 1: it depends on which cabin you're looking at. You know.

940
00:49:46,960 --> 00:49:50,200
Speaker 1: Coach fairs are actually ridiculous on the blog if you

941
00:49:50,239 --> 00:49:52,960
Speaker 1: go to the points got a comp slash deals. We've

942
00:49:53,040 --> 00:49:57,880
Speaker 1: seen yesterday with two nine four round trip to Argentina. Uh,

943
00:49:58,040 --> 00:50:01,759
Speaker 1: we've been seeing you want to put ian baggage. You know,

944
00:50:01,800 --> 00:50:06,799
Speaker 1: Air Canada had a fair mistake last week and then

945
00:50:06,840 --> 00:50:09,680
Speaker 1: also to to Israel. So um. But you know, even

946
00:50:09,680 --> 00:50:11,680
Speaker 1: in the life lap business class we had South America

947
00:50:11,840 --> 00:50:14,520
Speaker 1: sixty eight round trips, so you know, these deals, you

948
00:50:14,560 --> 00:50:16,520
Speaker 1: gotta you gotta act fast when you see it on

949
00:50:16,520 --> 00:50:18,879
Speaker 1: social media. You always booked the deal and then talk,

950
00:50:19,000 --> 00:50:20,759
Speaker 1: you know, think about it later because the airlines usually

951
00:50:20,760 --> 00:50:23,080
Speaker 1: give you twenty four hours to cancel, So don't try

952
00:50:23,080 --> 00:50:25,160
Speaker 1: to round up fifty five friends. You know, you just

953
00:50:25,200 --> 00:50:27,359
Speaker 1: like book a flight and then you know, figure out

954
00:50:27,400 --> 00:50:29,319
Speaker 1: taking off work or whatever in the twenty four hour

955
00:50:29,520 --> 00:50:34,120
Speaker 1: safety period. But there are live fair one less flexible time.

956
00:50:34,360 --> 00:50:38,200
Speaker 1: Who's driving the points guy bus right now? Are the

957
00:50:38,320 --> 00:50:42,240
Speaker 1: banks driving the bus or the airlines driving the bus?

958
00:50:42,360 --> 00:50:45,000
Speaker 1: I mean, everybody's addicted to your world. We get what

959
00:50:45,120 --> 00:50:48,560
Speaker 1: you do, you save us some money, we hate you, etcetera.

960
00:50:48,880 --> 00:50:52,160
Speaker 1: But who's driving the bus? In September of this year,

961
00:50:52,719 --> 00:50:55,120
Speaker 1: credit card companies are driving the bus. Actually, in September,

962
00:50:55,200 --> 00:50:57,759
Speaker 1: Bank of America is popping into the rewards game. They're

963
00:50:57,800 --> 00:51:00,800
Speaker 1: launching a new credit card. UM. The full details haven't

964
00:51:00,800 --> 00:51:03,200
Speaker 1: been released, but they have confirmed UM they have this

965
00:51:03,280 --> 00:51:07,160
Speaker 1: premium rewards credit card coming in September and it looks

966
00:51:07,239 --> 00:51:10,279
Speaker 1: really you know, fifty point bonus. So we've seen you know,

967
00:51:10,360 --> 00:51:12,880
Speaker 1: Chase really up to a year ago with the Sapphire Reserve.

968
00:51:13,000 --> 00:51:16,080
Speaker 1: AMX is up their platinum. I mean, the competitions at

969
00:51:16,080 --> 00:51:19,400
Speaker 1: all time high, so the credit card companies are in

970
00:51:19,440 --> 00:51:22,720
Speaker 1: the pilot seat of of the points industry, so to speak.

971
00:51:22,840 --> 00:51:25,800
Speaker 1: Brian Kelly, thank you so much and congratulations for changing

972
00:51:25,840 --> 00:51:28,360
Speaker 1: everybody's life. Go to folks. You don't even have to

973
00:51:28,360 --> 00:51:30,279
Speaker 1: do the charge good thing. You can just go and

974
00:51:30,360 --> 00:51:35,640
Speaker 1: be an absolute awe of what Brian Kelly and others

975
00:51:35,640 --> 00:51:48,080
Speaker 1: have wrought with this, this symbiotic relationship. Thanks for listening

976
00:51:48,120 --> 00:51:52,480
Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews

977
00:51:52,880 --> 00:51:57,960
Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

978
00:51:58,520 --> 00:52:01,600
Speaker 1: I'm on Twitter at Tom Key. David Gura is at

979
00:52:01,680 --> 00:52:06,520
Speaker 1: David Gura. Before the podcast, you can always catch us worldwide.

980
00:52:06,719 --> 00:52:07,759
Speaker 1: I'm Bloomberg Radio.