1 00:00:05,800 --> 00:00:08,719 Speaker 1: Welcome to the Bloomberg pim L Podcast. I'm pim Fox. 2 00:00:08,760 --> 00:00:11,560 Speaker 1: Along with my co host Lisa Brahmowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:33,360 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Today 7 00:00:33,440 --> 00:00:36,320 Speaker 1: is the day that the mouse eats the Fox. Yes, 8 00:00:36,680 --> 00:00:40,559 Speaker 1: Disney spending fifty two billion dollars for many assets of 9 00:00:41,320 --> 00:00:43,479 Speaker 1: Century Fox. In here to tell us more is Gita 10 00:00:43,840 --> 00:00:47,280 Speaker 1: Rana nathan Our, senior media analyst for Bloomberg Economics, and 11 00:00:47,400 --> 00:00:51,960 Speaker 1: tar La Chapelle, deal's columnist for Bloomberg Gadfly. Gita, what 12 00:00:52,159 --> 00:00:55,280 Speaker 1: has to go right in order for this merger to 13 00:00:55,480 --> 00:00:59,560 Speaker 1: show that it is a smart deal, not just now 14 00:00:59,640 --> 00:01:02,600 Speaker 1: whenever one is happy and stock prices are moving up, 15 00:01:03,000 --> 00:01:06,200 Speaker 1: but in times when perhaps they're not going to be 16 00:01:06,280 --> 00:01:09,680 Speaker 1: so many hit movies. What kinds of synergies or combinations 17 00:01:10,040 --> 00:01:14,360 Speaker 1: make this a potential success? Um suptem. There are plenty 18 00:01:14,440 --> 00:01:17,920 Speaker 1: of synergies because both of the companies are in such 19 00:01:18,040 --> 00:01:21,320 Speaker 1: similar businesses. There are significant cost savings. Obviously on the 20 00:01:21,360 --> 00:01:26,120 Speaker 1: TV and film production side with all of the sports programming. 21 00:01:26,840 --> 00:01:30,319 Speaker 1: But I think really for them for the deal itself 22 00:01:30,400 --> 00:01:34,319 Speaker 1: to be successful, there are two primary considerations. Number one 23 00:01:34,400 --> 00:01:38,560 Speaker 1: is execution. Disney has absolutely stellar record when it comes 24 00:01:38,720 --> 00:01:42,480 Speaker 1: to acquiring assets and then integrating them. We've seen that 25 00:01:42,600 --> 00:01:47,360 Speaker 1: time and time again with Pixar, with Marvel, with Lucasfilm. Um, Fox, 26 00:01:47,400 --> 00:01:49,240 Speaker 1: of course is going to be a little bit different. 27 00:01:49,280 --> 00:01:52,320 Speaker 1: It's a much bigger asset. But I'm confident they're going 28 00:01:52,360 --> 00:01:55,560 Speaker 1: to do a great job in execution. I think the 29 00:01:55,640 --> 00:01:58,440 Speaker 1: issue where um, you know they're not going to have 30 00:01:58,560 --> 00:02:02,520 Speaker 1: as much control, is going to be on the regulatory side. Um, 31 00:02:02,520 --> 00:02:05,680 Speaker 1: given all of the recent uncertainty with the Department of 32 00:02:05,720 --> 00:02:08,160 Speaker 1: Justice blocking the Time Warner and the A T and 33 00:02:08,240 --> 00:02:12,000 Speaker 1: T deal. So, um, those are the two things that 34 00:02:12,040 --> 00:02:14,600 Speaker 1: we are really looking at. So Tara, come on in 35 00:02:14,720 --> 00:02:16,880 Speaker 1: here exactly on that point. I mean, how big of 36 00:02:16,880 --> 00:02:18,480 Speaker 1: a hurdle is this going to be the cross to 37 00:02:18,480 --> 00:02:20,960 Speaker 1: actually get this deal done. I mean, it's funny because 38 00:02:20,960 --> 00:02:24,360 Speaker 1: it used to be that horizontal mergers like this, meaning 39 00:02:24,400 --> 00:02:26,680 Speaker 1: that a company buying a competitor, were the kind that 40 00:02:26,919 --> 00:02:29,400 Speaker 1: we're most sort of fraught in the regulatory process, and 41 00:02:29,400 --> 00:02:31,359 Speaker 1: now we're seeing a T and T time Warner run 42 00:02:31,360 --> 00:02:34,160 Speaker 1: into hurdles, which is a vertical merger, meaning they're not 43 00:02:34,240 --> 00:02:37,880 Speaker 1: buying competitor, they're buying an adjacent business and that's facing 44 00:02:37,919 --> 00:02:40,600 Speaker 1: all kinds of issues. So it seems like the sentiment 45 00:02:40,639 --> 00:02:42,280 Speaker 1: has been, well, maybe this will have an easier shot, 46 00:02:42,360 --> 00:02:44,400 Speaker 1: which just doesn't make sense when you look at history. 47 00:02:44,520 --> 00:02:46,840 Speaker 1: So I think it could be really interesting to see 48 00:02:46,840 --> 00:02:49,240 Speaker 1: how the government looks at this. I mean I think 49 00:02:49,240 --> 00:02:51,040 Speaker 1: they're going to have some issues on the sports side. 50 00:02:51,520 --> 00:02:54,400 Speaker 1: UM Sky TV, perhaps that's a Sky PLC. Maybe that's 51 00:02:54,400 --> 00:02:57,680 Speaker 1: a little bit easier. Now we'll see easier for Fox 52 00:02:57,720 --> 00:03:00,240 Speaker 1: to complete the deal because that would be uh sort 53 00:03:00,240 --> 00:03:04,560 Speaker 1: of what would happen before Disney would acquire Sky. So 54 00:03:04,760 --> 00:03:10,160 Speaker 1: concerns about proper being a fit, improper broadcaster, and you 55 00:03:10,200 --> 00:03:13,200 Speaker 1: know the scandals that Fox has had. Disney is probably 56 00:03:13,200 --> 00:03:16,040 Speaker 1: a more preferable buyer in that case. Keith, what does 57 00:03:16,080 --> 00:03:18,080 Speaker 1: the competition make of all this? I mean, it's not 58 00:03:18,080 --> 00:03:20,560 Speaker 1: as if they're going to sit idly by while Bob 59 00:03:20,600 --> 00:03:25,120 Speaker 1: Iger tries to combine two huge companies. Yeah, I mean 60 00:03:25,760 --> 00:03:30,480 Speaker 1: this move itself has kind of been um widely viewed as, um, 61 00:03:30,600 --> 00:03:32,920 Speaker 1: you know, creating a Netflix killer. Now, I'm not really 62 00:03:32,960 --> 00:03:35,600 Speaker 1: sure whether they're actually going to be able to do that. Um. 63 00:03:35,680 --> 00:03:40,160 Speaker 1: Netflix is already far ahead, UM, so you know they 64 00:03:40,360 --> 00:03:43,000 Speaker 1: It's going to obviously take some time for Disney to 65 00:03:43,000 --> 00:03:46,520 Speaker 1: to ramp up its presence in the streaming world. But 66 00:03:46,600 --> 00:03:49,000 Speaker 1: I think the bigger question is going to be what 67 00:03:49,160 --> 00:03:52,160 Speaker 1: happens to all of the smaller media companies. What happens 68 00:03:52,200 --> 00:03:56,080 Speaker 1: to a CBS, Viacom, all of these names um now 69 00:03:56,120 --> 00:04:00,240 Speaker 1: in play with Disney becoming such a dominant force in 70 00:04:00,440 --> 00:04:04,200 Speaker 1: the media world. I mean, I think CBS is going 71 00:04:04,280 --> 00:04:06,000 Speaker 1: to be really interesting to watch. And we just did 72 00:04:06,040 --> 00:04:08,840 Speaker 1: a Gadfly piece this week on the three different sort 73 00:04:08,880 --> 00:04:11,400 Speaker 1: of logical deal options that they have on the table now. 74 00:04:11,440 --> 00:04:13,800 Speaker 1: And I think Sherry Redstone could look at a Viacom 75 00:04:13,880 --> 00:04:17,159 Speaker 1: merger again, which is their other property that they control. UM, 76 00:04:17,279 --> 00:04:19,440 Speaker 1: I don't know how much sense that makes with Viacom 77 00:04:19,480 --> 00:04:21,640 Speaker 1: going through such a tough turnaround. But the other ideas 78 00:04:21,680 --> 00:04:24,960 Speaker 1: are Verizon. Verizon could copy a T and T once 79 00:04:25,000 --> 00:04:26,680 Speaker 1: we get a better sense of how this trial is 80 00:04:26,680 --> 00:04:29,320 Speaker 1: going to go over the Time Warner deal, Uh, they 81 00:04:29,360 --> 00:04:31,360 Speaker 1: would you know, be adding content in the same way 82 00:04:31,360 --> 00:04:32,880 Speaker 1: that A. T and T is doing with Time Warner. 83 00:04:33,200 --> 00:04:37,520 Speaker 1: Or there's lions Gate, which has John Malone involved dealmaker obviously, 84 00:04:38,000 --> 00:04:40,000 Speaker 1: um I make I think it makes sense that lions Gate, 85 00:04:40,040 --> 00:04:42,080 Speaker 1: the film studio, would get rolled up into something at 86 00:04:42,080 --> 00:04:44,359 Speaker 1: some point or buy other things. They bought Stars not 87 00:04:44,440 --> 00:04:47,120 Speaker 1: all that long ago. So I think CBS not having 88 00:04:47,160 --> 00:04:49,440 Speaker 1: a film studio, and clearly Disney seeing a lot of 89 00:04:49,480 --> 00:04:52,960 Speaker 1: value in film studios buying Foxes and seeing how Netflix 90 00:04:52,960 --> 00:04:54,719 Speaker 1: has had so much success on the on the movie 91 00:04:54,760 --> 00:04:57,080 Speaker 1: side as well, I think it only makes sense that 92 00:04:57,120 --> 00:04:59,440 Speaker 1: CBS could look at something like that. Next I'm gonna 93 00:04:59,440 --> 00:05:04,640 Speaker 1: throw something crazy out Terra. Would the bigger and improve 94 00:05:04,760 --> 00:05:08,920 Speaker 1: Disney plus Fox be interested in buying Netflix roll them up, 95 00:05:09,279 --> 00:05:11,440 Speaker 1: makes them behemous? It's interesting. I mean, I always thought 96 00:05:11,480 --> 00:05:13,760 Speaker 1: that Disney would be a logical buyer for Netflix. It 97 00:05:14,000 --> 00:05:18,080 Speaker 1: could even solve disney succession question obviously, But I think 98 00:05:18,120 --> 00:05:20,440 Speaker 1: now with this deal, they're kind of going up against 99 00:05:20,480 --> 00:05:23,560 Speaker 1: Netflix and they're trying to take more control of Hulu. 100 00:05:23,560 --> 00:05:25,640 Speaker 1: So I think it depends what happens with Hulu. Does 101 00:05:25,720 --> 00:05:29,440 Speaker 1: Comcast fight Disney if Disney tries to take full control 102 00:05:29,480 --> 00:05:31,440 Speaker 1: of it and try to break that up and take 103 00:05:31,480 --> 00:05:34,600 Speaker 1: it themselves, or if if Disney does keep it, I 104 00:05:34,640 --> 00:05:36,840 Speaker 1: think they'd be more focused on the streaming services that 105 00:05:36,839 --> 00:05:39,960 Speaker 1: they're keeping rather than going after a Netflix. What do 106 00:05:40,040 --> 00:05:43,000 Speaker 1: you think, Yeah, I think so. You know, one of 107 00:05:43,040 --> 00:05:46,400 Speaker 1: them factors is also going to be international. So Disney 108 00:05:46,520 --> 00:05:53,200 Speaker 1: by buying um Star India um gets a significant exposure internationally. 109 00:05:53,320 --> 00:05:56,719 Speaker 1: No Star India actually has a very big streaming presence 110 00:05:56,800 --> 00:05:59,679 Speaker 1: through its app there, which is called hot Star, which 111 00:05:59,720 --> 00:06:02,400 Speaker 1: is siles ahead of Netflix. So Netflix is still kind 112 00:06:02,440 --> 00:06:05,839 Speaker 1: of trying to gain a foothold in the Indian streaming market. 113 00:06:05,920 --> 00:06:10,080 Speaker 1: For instance, Disney through this hot Star app is already 114 00:06:10,120 --> 00:06:13,919 Speaker 1: going to be miles ahead. So internationally they they're probably 115 00:06:13,960 --> 00:06:16,440 Speaker 1: already a little bit ahead of the game there. The 116 00:06:16,480 --> 00:06:18,720 Speaker 1: problem is really going to be in the domestic market, 117 00:06:18,920 --> 00:06:21,280 Speaker 1: and as Tara pointed out, UM, you know, we're going 118 00:06:21,320 --> 00:06:23,359 Speaker 1: to have to see what happens with Hulu they have, 119 00:06:23,920 --> 00:06:25,920 Speaker 1: I mean, the scale that they have there is absolutely 120 00:06:25,920 --> 00:06:28,880 Speaker 1: not comparable to netflixes at all. It's only about sixteen 121 00:06:29,000 --> 00:06:31,840 Speaker 1: million subs or so. Um So we'll have to see 122 00:06:32,080 --> 00:06:34,960 Speaker 1: how that that plays out with com Cash once their 123 00:06:35,080 --> 00:06:38,120 Speaker 1: consent decree and some time next year. Well, thanks to 124 00:06:38,400 --> 00:06:39,880 Speaker 1: both of you for breaking this down. We will be 125 00:06:39,920 --> 00:06:41,920 Speaker 1: talking more about that throughout the day. The fact that 126 00:06:41,960 --> 00:06:46,520 Speaker 1: Disney is indeed buying parts of Fox for fifty two 127 00:06:46,720 --> 00:06:51,360 Speaker 1: billion dollars. Guita around Nathan, senior media analyst for Bloomberg Intelligence, 128 00:06:51,360 --> 00:06:54,200 Speaker 1: as well as Tara la Chapelle, are Bloomberg gad Fly 129 00:06:54,400 --> 00:06:57,440 Speaker 1: columnists who covers all things tech and deals that has 130 00:06:57,480 --> 00:06:59,760 Speaker 1: been following this for quite a while. Really at the 131 00:06:59,760 --> 00:07:03,080 Speaker 1: big question now has to do with Netflix. How they 132 00:07:03,080 --> 00:07:23,200 Speaker 1: respond This is Bloomberg strong jobs data, Well it may falter. 133 00:07:23,320 --> 00:07:26,600 Speaker 1: According to our next guest, Danielle DiMartino Booth is the 134 00:07:26,680 --> 00:07:29,680 Speaker 1: founder of money Strong and a Bloomberg profit and she 135 00:07:29,840 --> 00:07:32,440 Speaker 1: joins us here in our eleven three oh studio. Danielle, 136 00:07:32,440 --> 00:07:34,680 Speaker 1: always a pleasure, Thanks for being here. What do you 137 00:07:34,680 --> 00:07:37,920 Speaker 1: mean by this strong demand in jobs may actually falter? 138 00:07:38,040 --> 00:07:40,280 Speaker 1: You don't think that the job the hiring spree is 139 00:07:40,320 --> 00:07:43,240 Speaker 1: going to continue. I think that the hiring spree for 140 00:07:43,280 --> 00:07:46,400 Speaker 1: skilled workers is certainly going to continue. Um. But by 141 00:07:46,400 --> 00:07:48,240 Speaker 1: the same token, I don't think that people are paying 142 00:07:48,240 --> 00:07:51,840 Speaker 1: near enough attention to some of the distress um signals 143 00:07:51,880 --> 00:07:56,120 Speaker 1: emanating from the restaurant industry right now. Restaurants followed brick 144 00:07:56,160 --> 00:08:00,400 Speaker 1: and mortar retail into the abyss of over expansion, and 145 00:08:00,480 --> 00:08:03,120 Speaker 1: now they're starting to shrink that footprint. If you look 146 00:08:03,160 --> 00:08:05,880 Speaker 1: at the current economic recovery, as long as it has 147 00:08:05,920 --> 00:08:11,040 Speaker 1: been going on, the main hiring sector has been in 148 00:08:11,080 --> 00:08:16,440 Speaker 1: these restaurants, restaurant, leisure, entertainment. They've all over expanded. Danielle, 149 00:08:16,560 --> 00:08:21,320 Speaker 1: You've been a phenomenal over the decades of predicting the 150 00:08:21,400 --> 00:08:25,280 Speaker 1: early signs of a problem, certainly leading up to the 151 00:08:25,680 --> 00:08:28,840 Speaker 1: housing boom and bust that we saw lead to the 152 00:08:28,880 --> 00:08:31,840 Speaker 1: two and eight failure of Lehman Brothers. And I'm just 153 00:08:31,920 --> 00:08:37,200 Speaker 1: wondering right now, we see a dramatic consensus around global 154 00:08:37,280 --> 00:08:42,040 Speaker 1: synchronized growth, healthy consumer everything is hunky dory, and yet 155 00:08:42,120 --> 00:08:45,400 Speaker 1: consumer debt levels are rising if you strip out mortgages 156 00:08:45,520 --> 00:08:49,560 Speaker 1: rising to record levels. Does this concern you? Is this 157 00:08:49,600 --> 00:08:52,080 Speaker 1: a warning sign? Are you seeing rising delinquencies that are 158 00:08:52,120 --> 00:08:56,880 Speaker 1: also a warning sign? I absolutely am. Consider something we 159 00:08:57,000 --> 00:08:59,760 Speaker 1: have seen twenty three back to back months of in 160 00:09:00,080 --> 00:09:04,880 Speaker 1: lation adjusted credit card spending growth outpaced that of incomes, 161 00:09:04,920 --> 00:09:08,960 Speaker 1: and the gap between the two is widening. Credit card 162 00:09:08,960 --> 00:09:12,640 Speaker 1: delinquencies are going up. Major banks are setting aside lost 163 00:09:12,640 --> 00:09:16,599 Speaker 1: provisions at a faster clips. City group actually expressed surprise 164 00:09:16,800 --> 00:09:19,240 Speaker 1: at how quickly they're having to build up their lost provisions. 165 00:09:19,920 --> 00:09:23,400 Speaker 1: And we're seeing a continuation, a very quiet continuation of 166 00:09:23,440 --> 00:09:26,599 Speaker 1: sub prime auto delinquencies and the beginnings of f h 167 00:09:26,720 --> 00:09:29,520 Speaker 1: A Mortgage delinquencies take up from O nine and ten. 168 00:09:29,920 --> 00:09:32,840 Speaker 1: So f f h A is the one agency that 169 00:09:32,880 --> 00:09:37,760 Speaker 1: allows UH allows borrowers home buyers to put down much 170 00:09:37,880 --> 00:09:40,480 Speaker 1: less for their down pays, the only three percent game 171 00:09:40,480 --> 00:09:43,360 Speaker 1: in town, and it was really the only open mortgage 172 00:09:43,480 --> 00:09:47,920 Speaker 1: entity in the immediate years following the housing crisis where 173 00:09:47,960 --> 00:09:50,400 Speaker 1: people could go and put very little down to buy home. 174 00:09:50,600 --> 00:09:55,280 Speaker 1: Do you feel like policymakers UH sufficiently recognize the increase 175 00:09:55,400 --> 00:09:59,240 Speaker 1: in fixed costs that a lot of consumers are facing. 176 00:09:59,280 --> 00:10:01,200 Speaker 1: I mean, I was looking at a Moody's report on 177 00:10:01,280 --> 00:10:05,200 Speaker 1: consumer asset bacts securitizations that they put out yesterday. As 178 00:10:05,320 --> 00:10:07,719 Speaker 1: the share of renters paying more than fifty percent of 179 00:10:07,760 --> 00:10:12,480 Speaker 1: their incomes towards rent climbs to almost from twenty four 180 00:10:12,520 --> 00:10:15,840 Speaker 1: point one percent in two thousand seven, home ownership slumped 181 00:10:15,840 --> 00:10:19,719 Speaker 1: towards a fifty year low. Meanwhile, health insurance costs some 182 00:10:19,920 --> 00:10:23,600 Speaker 1: thirty two faster than a twelve percent increase in workers 183 00:10:23,679 --> 00:10:27,679 Speaker 1: wages five years. These are astounding statistics. We just had 184 00:10:27,679 --> 00:10:31,800 Speaker 1: the CPI report come out that policymakers perceive as being benign. 185 00:10:31,840 --> 00:10:33,959 Speaker 1: How could they see it any other way? If if 186 00:10:34,040 --> 00:10:36,679 Speaker 1: rent inside the c p I are only eight percent 187 00:10:37,080 --> 00:10:40,800 Speaker 1: of the index, and yet they are at least a third, 188 00:10:41,000 --> 00:10:44,680 Speaker 1: if not fifty percent of a given households balance sheet. 189 00:10:44,880 --> 00:10:47,640 Speaker 1: They're running upwards of four percent. If you think back 190 00:10:47,640 --> 00:10:49,600 Speaker 1: to the peak of the housing boom, that was what 191 00:10:49,880 --> 00:10:52,719 Speaker 1: home price appreciation was doing at the time. But right 192 00:10:52,720 --> 00:10:57,400 Speaker 1: now home ownership and renting are more prohibitively expensive than 193 00:10:57,440 --> 00:10:59,840 Speaker 1: they've ever been. And no, I don't think this is 194 00:10:59,840 --> 00:11:02,480 Speaker 1: on federal reserves radar screen. I just want to go 195 00:11:02,559 --> 00:11:06,280 Speaker 1: through some items that people may actually purchase, such as gasoline. Right, 196 00:11:06,400 --> 00:11:10,600 Speaker 1: gasoline prices they are up. We're seeing about two dollars 197 00:11:10,600 --> 00:11:13,880 Speaker 1: and fifty cents a gallon for a national average. That 198 00:11:14,000 --> 00:11:17,280 Speaker 1: compares to two dollars and twenty one cents same time 199 00:11:17,480 --> 00:11:21,439 Speaker 1: last year, So that's an increase. We've also been speaking, 200 00:11:21,559 --> 00:11:25,680 Speaker 1: as you have, about the delinquency for subprime auto loans, 201 00:11:26,040 --> 00:11:28,680 Speaker 1: and we're talking about a figure that it's about ten 202 00:11:28,800 --> 00:11:31,600 Speaker 1: percent of all of those loans are at least ninety 203 00:11:31,679 --> 00:11:36,240 Speaker 1: days or greater delinquent. What happens then, if the Federal 204 00:11:36,280 --> 00:11:41,839 Speaker 1: Reserve actually goes ahead and raises interest rates in three 205 00:11:41,880 --> 00:11:45,440 Speaker 1: times and indeed even four times, as many economists say 206 00:11:45,440 --> 00:11:48,640 Speaker 1: that they're going to do well, this is uh. We 207 00:11:48,760 --> 00:11:51,120 Speaker 1: we've read this book before and we actually know how 208 00:11:51,160 --> 00:11:54,960 Speaker 1: it ends. The FED will always over tighten into late 209 00:11:55,120 --> 00:11:58,400 Speaker 1: cycle signs, and right now we could possibly see a 210 00:11:58,520 --> 00:12:01,800 Speaker 1: four percent handle coming on g d P, and it 211 00:12:01,920 --> 00:12:04,320 Speaker 1: is going to be the biggest head fake, and the 212 00:12:04,320 --> 00:12:06,800 Speaker 1: FED is going to end up chasing that head fake 213 00:12:06,920 --> 00:12:11,160 Speaker 1: and over tightening. If Powell is not astute to the 214 00:12:11,160 --> 00:12:14,840 Speaker 1: fact that still waters run deep so underneath the biggest 215 00:12:14,920 --> 00:12:18,560 Speaker 1: natural disaster year in how long two thousand seventeen. Of course, 216 00:12:18,640 --> 00:12:21,000 Speaker 1: building materials have gone through the roof. Of course, there 217 00:12:21,000 --> 00:12:23,760 Speaker 1: were two good years of of of of car sales. 218 00:12:24,160 --> 00:12:26,960 Speaker 1: All of this rebuilding effort has no precedent. You can't 219 00:12:26,960 --> 00:12:31,520 Speaker 1: compare three hurricanes and two massive wildfires to Hurricane Katrina. 220 00:12:31,640 --> 00:12:33,560 Speaker 1: It doesn't work. But that's the only thing in the 221 00:12:33,559 --> 00:12:36,760 Speaker 1: fed's models. Just to push back a little bit. We're 222 00:12:36,760 --> 00:12:39,200 Speaker 1: not seeing inflation pickup. We're not seeing some of the 223 00:12:39,240 --> 00:12:42,440 Speaker 1: other signs of a late stage in the credit cycle. 224 00:12:42,760 --> 00:12:46,839 Speaker 1: Investors will they have flown into the riskiest assets. They 225 00:12:46,880 --> 00:12:49,959 Speaker 1: have shown some discretion this year. You are seeing some 226 00:12:50,000 --> 00:12:54,920 Speaker 1: potholes and credit markets, some losers amid the froth. So 227 00:12:55,160 --> 00:12:57,560 Speaker 1: you know, what are you looking at when somebody says 228 00:12:57,600 --> 00:13:00,800 Speaker 1: to you, look, yes, all that understood. Still in the 229 00:13:00,840 --> 00:13:03,840 Speaker 1: scheme of things, consumer debt relative to GDP isn't necessarily 230 00:13:03,880 --> 00:13:06,280 Speaker 1: at to record high. We aren't seeing the same kinds 231 00:13:06,280 --> 00:13:09,160 Speaker 1: of default rates as you would leading up to a problem. 232 00:13:09,240 --> 00:13:11,480 Speaker 1: What do you say to them? I think that the 233 00:13:11,520 --> 00:13:13,719 Speaker 1: Fed has left the p p I for dead at 234 00:13:13,760 --> 00:13:17,000 Speaker 1: its peril. We saw the producer prices came out at 235 00:13:17,000 --> 00:13:19,800 Speaker 1: a six year high, and it was it was completely 236 00:13:19,800 --> 00:13:24,160 Speaker 1: wholesale disregarded after the CPI came out by policymakers. A 237 00:13:24,160 --> 00:13:26,000 Speaker 1: lot of that was gasoline, right, I mean the gas 238 00:13:26,200 --> 00:13:28,800 Speaker 1: I think about two thirds of the jump in November 239 00:13:28,800 --> 00:13:31,520 Speaker 1: were gasoline related. It was up more than fift But 240 00:13:31,559 --> 00:13:34,400 Speaker 1: if you look at transportation, if you look at manufacturing, 241 00:13:34,480 --> 00:13:38,400 Speaker 1: if if you look at anything related to the supply chain, disruption, 242 00:13:38,600 --> 00:13:42,480 Speaker 1: which is unprecedented following these natural disasters, and you listen 243 00:13:42,559 --> 00:13:45,360 Speaker 1: to every you can look at ten surveys, this is 244 00:13:45,600 --> 00:13:48,280 Speaker 1: my upcoming Bloomberg View column. You can look at ten 245 00:13:48,520 --> 00:13:52,280 Speaker 1: regional manufacturing surveys, and all of the managers are complaining 246 00:13:52,320 --> 00:13:54,520 Speaker 1: about the fact that their prices have gone through the roof. 247 00:13:54,600 --> 00:13:57,400 Speaker 1: They're actually having to leverage up to cover them if 248 00:13:57,440 --> 00:14:00,240 Speaker 1: they can't pass along these price increases, if they don't 249 00:14:00,240 --> 00:14:03,400 Speaker 1: have pricing power. It's building in the pipeline, it's it exists. 250 00:14:04,040 --> 00:14:06,080 Speaker 1: So what do you think the FEED should do next year? 251 00:14:07,120 --> 00:14:10,240 Speaker 1: I think the FED is in a very difficult place. 252 00:14:11,320 --> 00:14:14,760 Speaker 1: I really do. I'm hoping that I'm hoping that there 253 00:14:14,800 --> 00:14:18,720 Speaker 1: are some eagle eyed staffers who can look through this 254 00:14:18,840 --> 00:14:24,440 Speaker 1: supply chain disruption. Maybe hike in March, maybe, but they 255 00:14:24,560 --> 00:14:28,200 Speaker 1: really do need to step back and study the household 256 00:14:28,200 --> 00:14:33,120 Speaker 1: sector and figure out where inflations really going to be 257 00:14:33,960 --> 00:14:37,280 Speaker 1: after all of these natural disasters. Work their way through 258 00:14:37,320 --> 00:14:39,400 Speaker 1: the data, because at the end of it, you will 259 00:14:39,440 --> 00:14:44,280 Speaker 1: have millions of households who remain devastated by these natural 260 00:14:44,280 --> 00:14:48,440 Speaker 1: disasters and don't have the wherewithal financially to rebuild and 261 00:14:48,480 --> 00:14:51,040 Speaker 1: replace all of these assets. They will add on to 262 00:14:52,080 --> 00:14:56,080 Speaker 1: the existing the pre existing defaults and delinquencies that we 263 00:14:56,160 --> 00:15:00,560 Speaker 1: have seen already in the household sector before Hurricane Harvey landfall. 264 00:15:00,840 --> 00:15:03,640 Speaker 1: Danielle di Martino Booth, thank you so much. Always a 265 00:15:03,680 --> 00:15:06,440 Speaker 1: pleasure speaking with you. She is founder of money Strong, 266 00:15:06,520 --> 00:15:10,560 Speaker 1: a Bloomberg profit. Also, for nine years, she was the 267 00:15:10,640 --> 00:15:32,160 Speaker 1: AID Direct Advisor to President Fisher. The Federal Communications Commission 268 00:15:32,320 --> 00:15:36,320 Speaker 1: is currently meeting. They are widely expected to reverse net 269 00:15:36,320 --> 00:15:41,120 Speaker 1: neutrality rules that were instated during a former President Obama's reign. 270 00:15:41,440 --> 00:15:45,120 Speaker 1: Here to talk about what the implications are is Jerry Smith, 271 00:15:45,160 --> 00:15:49,920 Speaker 1: media reporter for Bloomberg News. Jerry, it's almost a foregone 272 00:15:49,960 --> 00:15:54,360 Speaker 1: conclusion that this committee will indeed vote to reverse not 273 00:15:54,480 --> 00:15:56,960 Speaker 1: neutrality rules. Is that correct? Yeah, I mean the hearing 274 00:15:57,040 --> 00:15:59,280 Speaker 1: is happening right now as we speak, but it is 275 00:15:59,320 --> 00:16:02,480 Speaker 1: pretty much um, you know, on along party lines, and 276 00:16:02,520 --> 00:16:06,960 Speaker 1: the Republican UM FCCS commissioners have the majority, so they're 277 00:16:07,000 --> 00:16:09,400 Speaker 1: going to um you know, they've made it pretty clear 278 00:16:09,440 --> 00:16:12,680 Speaker 1: that they're going to vote to remove these rules. So, Jerry, 279 00:16:12,680 --> 00:16:15,000 Speaker 1: I've seen a couple of polls and it looks like 280 00:16:15,160 --> 00:16:19,280 Speaker 1: the majority of Americans polled art not for rolling back 281 00:16:19,480 --> 00:16:23,160 Speaker 1: some of these net neutrality rules. Uh. The argument from 282 00:16:23,400 --> 00:16:27,240 Speaker 1: the industry is that the big broadband behemoths would invest 283 00:16:27,320 --> 00:16:29,960 Speaker 1: more in their infrastructure if they knew that they could 284 00:16:30,000 --> 00:16:32,400 Speaker 1: earn more from it. Can you lay out both sides 285 00:16:32,440 --> 00:16:36,120 Speaker 1: and UH and and sort of why this is happening now? Yeah, 286 00:16:36,160 --> 00:16:38,920 Speaker 1: I mean, the the internet service providers were talking about 287 00:16:38,960 --> 00:16:43,280 Speaker 1: companies UM like Comcast and Verizon. UH. That's the crux 288 00:16:43,320 --> 00:16:47,760 Speaker 1: of their argument that if there's extra regulations on how 289 00:16:47,800 --> 00:16:52,200 Speaker 1: they how they manage their internet service, then that, UM, 290 00:16:52,280 --> 00:16:54,920 Speaker 1: you know, that gives them less incentive to invest in 291 00:16:54,920 --> 00:16:59,120 Speaker 1: their networks. UM. You know, there is some skepticism about 292 00:16:59,200 --> 00:17:01,880 Speaker 1: that argument. Craig Moffatt, who's probably one of the more 293 00:17:01,920 --> 00:17:05,639 Speaker 1: respected UH analysts in the in the industry, UH, you know, 294 00:17:05,720 --> 00:17:07,600 Speaker 1: he said, there's a lot other there's a lot more 295 00:17:07,640 --> 00:17:10,440 Speaker 1: factors that go into the decision of whether a Comcast 296 00:17:10,520 --> 00:17:13,840 Speaker 1: or Verizon invest in their broadband network than just whether 297 00:17:13,880 --> 00:17:17,320 Speaker 1: there's UH neutrality rules. I mean, one key thing about 298 00:17:17,720 --> 00:17:20,560 Speaker 1: the you know, the future of these companies UM Comcast 299 00:17:20,600 --> 00:17:24,600 Speaker 1: in particular, UH, then their video services declining, and so 300 00:17:24,960 --> 00:17:28,240 Speaker 1: the future of their business is selling you internet service 301 00:17:28,560 --> 00:17:32,480 Speaker 1: and they do not want the government to have any 302 00:17:32,520 --> 00:17:35,440 Speaker 1: ability to tell them how much they can charge you 303 00:17:35,560 --> 00:17:39,840 Speaker 1: for internet service, which is what these rules do, and 304 00:17:39,880 --> 00:17:42,760 Speaker 1: that that's really the bigger fear. It would be very, 305 00:17:42,840 --> 00:17:46,000 Speaker 1: very surprising to see Comcast or Verizon or E T 306 00:17:46,119 --> 00:17:49,480 Speaker 1: and T slow down people's web traffic or block certain 307 00:17:49,480 --> 00:17:52,800 Speaker 1: web traffic. The big concern for these companies and their 308 00:17:52,840 --> 00:17:58,040 Speaker 1: investors is can the government have the ability to tell them, 309 00:17:58,240 --> 00:18:00,520 Speaker 1: you know, how much you charge for broad band because 310 00:18:00,560 --> 00:18:03,560 Speaker 1: that's really where their future profits are going to be. Drey, 311 00:18:03,640 --> 00:18:06,760 Speaker 1: have we seen this before in the wireless industry with 312 00:18:07,240 --> 00:18:10,680 Speaker 1: I guess it's what called zero rating. Yeah, I mean, 313 00:18:10,680 --> 00:18:13,240 Speaker 1: that's another thing that's happening. I mean, the wireless side 314 00:18:13,240 --> 00:18:15,560 Speaker 1: of internet service has sort of been overlooked in this 315 00:18:15,560 --> 00:18:18,520 Speaker 1: whole debate. It's really been more about, um, the high 316 00:18:18,520 --> 00:18:21,720 Speaker 1: speed Internet that you use on your desktop computer, uh 317 00:18:21,720 --> 00:18:24,960 Speaker 1: and your WiFi at home top computer. That's an old 318 00:18:25,000 --> 00:18:28,240 Speaker 1: that that I can't remember what is that agetting all? Yeah, No, 319 00:18:28,520 --> 00:18:30,600 Speaker 1: but wireless is I mean, that's something that you're seeing 320 00:18:30,600 --> 00:18:34,640 Speaker 1: the wireless companies do. Is zero rating is an industry 321 00:18:34,760 --> 00:18:38,440 Speaker 1: term for saying we are not For example, if you 322 00:18:38,480 --> 00:18:41,800 Speaker 1: want to watch Netflix on UM on your phone through 323 00:18:41,800 --> 00:18:45,719 Speaker 1: a wireless network. Uh, that wireless provider would not count 324 00:18:45,760 --> 00:18:49,640 Speaker 1: that data usage towards the limit that you have. I mean, 325 00:18:49,680 --> 00:18:52,240 Speaker 1: some people have unlimited data usage. And I think T 326 00:18:52,400 --> 00:18:55,960 Speaker 1: Mobile did this with Facebook and Facebook Messenger. They said, 327 00:18:55,960 --> 00:18:57,760 Speaker 1: you know, free access to that that was. That's just 328 00:18:57,760 --> 00:18:59,879 Speaker 1: one of there's a few examples of this where you 329 00:19:00,119 --> 00:19:03,120 Speaker 1: they say this won't count. Uh, this particular service won't 330 00:19:03,160 --> 00:19:06,720 Speaker 1: count towards your your data cap and and that's controversial 331 00:19:06,760 --> 00:19:09,280 Speaker 1: because then you're sort of in some ways, these wireless 332 00:19:09,280 --> 00:19:13,080 Speaker 1: providers can pick winners and losers. So, Jerry, I guess 333 00:19:13,080 --> 00:19:16,880 Speaker 1: if you said worst case scenario, what happens if all 334 00:19:16,920 --> 00:19:20,080 Speaker 1: of these internet providers jack up their prices sky high 335 00:19:20,119 --> 00:19:22,520 Speaker 1: and if anybody wants to get on the Worldwide Web 336 00:19:22,880 --> 00:19:25,280 Speaker 1: they need to pay them. The flip side to that 337 00:19:25,480 --> 00:19:28,320 Speaker 1: is these companies are going to be judicious about how 338 00:19:28,400 --> 00:19:31,560 Speaker 1: much they raise rates because they don't want to ignite 339 00:19:31,640 --> 00:19:34,920 Speaker 1: a backlash that ends up creating them and and sort 340 00:19:34,960 --> 00:19:36,879 Speaker 1: of labeling them as utilities. Right, I mean, isn't this 341 00:19:36,880 --> 00:19:39,360 Speaker 1: sort of the push pull that people are looking for? Right? 342 00:19:39,400 --> 00:19:41,639 Speaker 1: I mean I think the um, you know, the internet 343 00:19:41,640 --> 00:19:43,960 Speaker 1: providers will be very very careful about doing this sort 344 00:19:43,960 --> 00:19:46,160 Speaker 1: of thing. I'd be very surprised if in the near 345 00:19:46,200 --> 00:19:49,040 Speaker 1: future if these rules get rolled back and there's gonna 346 00:19:49,040 --> 00:19:52,800 Speaker 1: be probably a prolonged court battle over this, regardless uh 347 00:19:52,840 --> 00:19:55,560 Speaker 1: that they did anything in terms of blocking or slowing traffic. 348 00:19:55,640 --> 00:19:57,600 Speaker 1: And the other thing is, you know, this is really 349 00:19:57,600 --> 00:20:01,440 Speaker 1: more about these smaller startups that need access to the Internet, 350 00:20:01,480 --> 00:20:03,119 Speaker 1: and not so much some of these big companies like 351 00:20:03,160 --> 00:20:05,440 Speaker 1: Netflix that are are so huge that this doesn't really 352 00:20:05,440 --> 00:20:07,600 Speaker 1: affect them as much anymore. You said that they're probably 353 00:20:07,600 --> 00:20:11,119 Speaker 1: going to be lawsuits. Could that end up preventing a 354 00:20:11,200 --> 00:20:13,720 Speaker 1: reverse of the net neutrality rules altogether? I think it's 355 00:20:13,760 --> 00:20:16,399 Speaker 1: it's you know, you talk to experts and they would 356 00:20:16,480 --> 00:20:19,879 Speaker 1: argue that this is likely going to see legal challenges 357 00:20:19,920 --> 00:20:23,400 Speaker 1: in the future regardless of how today's hearing turns out. 358 00:20:23,440 --> 00:20:25,720 Speaker 1: So this is something that's been tied up in the 359 00:20:25,760 --> 00:20:29,359 Speaker 1: courts for several years prior to this, and I'd be 360 00:20:29,480 --> 00:20:31,960 Speaker 1: very surprised if it doesn't stay that way. Well, I'm 361 00:20:32,000 --> 00:20:35,719 Speaker 1: just wondering if this could lead to specific add on 362 00:20:35,960 --> 00:20:39,840 Speaker 1: charges if you want to go to specific websites. So 363 00:20:39,880 --> 00:20:42,399 Speaker 1: if you'd like to go to a website that is 364 00:20:42,480 --> 00:20:45,280 Speaker 1: owned by a T and T and you happen to 365 00:20:45,320 --> 00:20:48,320 Speaker 1: be an a T and T wireless customer, Great, they'll 366 00:20:48,359 --> 00:20:52,280 Speaker 1: let you do that along with your planets. The data 367 00:20:52,440 --> 00:20:54,520 Speaker 1: that is used there is not going to be counted 368 00:20:54,520 --> 00:20:56,560 Speaker 1: against you. But if you want to go to a 369 00:20:56,600 --> 00:21:00,800 Speaker 1: competitor's website, or indeed, if you actually are a content provider, 370 00:21:00,840 --> 00:21:03,320 Speaker 1: which a T and T is seeking to become right 371 00:21:03,440 --> 00:21:05,880 Speaker 1: through there, well they already are really with the addish 372 00:21:05,880 --> 00:21:09,160 Speaker 1: network to a certain extent. But if you want content 373 00:21:09,240 --> 00:21:12,080 Speaker 1: from a competing company, maybe they'll slap on a five 374 00:21:12,080 --> 00:21:14,920 Speaker 1: dollar a month charge, or they'll make it more expensive 375 00:21:15,040 --> 00:21:18,720 Speaker 1: or prohibib or the website could charge directly for that access. Yeah, 376 00:21:18,720 --> 00:21:20,719 Speaker 1: I mean, I think it would be less obvious to 377 00:21:20,760 --> 00:21:23,840 Speaker 1: the consumer initially as far as how much you're paying. 378 00:21:23,880 --> 00:21:26,959 Speaker 1: I think this is more about a streaming service like 379 00:21:27,080 --> 00:21:31,160 Speaker 1: Netflix or an internet a YouTube and whether they would 380 00:21:31,200 --> 00:21:34,040 Speaker 1: have to pay extra in order to make sure that 381 00:21:34,160 --> 00:21:37,480 Speaker 1: their content reaches your home unimpeded, and whether they would 382 00:21:37,480 --> 00:21:40,639 Speaker 1: have to pay an internet provider to do that. Um. 383 00:21:40,680 --> 00:21:43,240 Speaker 1: But you know, I think the bigger question is also 384 00:21:43,359 --> 00:21:46,960 Speaker 1: just um, whether these internet providers, um, they just don't 385 00:21:47,000 --> 00:21:49,080 Speaker 1: want the government looking over their shoulder. They don't want 386 00:21:49,080 --> 00:21:51,840 Speaker 1: the government telling them how much they can charge internet service. 387 00:21:52,080 --> 00:21:54,359 Speaker 1: Thanks very much for being with us. Jerry Smith, our 388 00:21:54,400 --> 00:21:57,920 Speaker 1: media reporter for Bloomberg. He'll be following that f c C, 389 00:21:58,520 --> 00:22:02,040 Speaker 1: the Federal Communications Commission decision that will be coming shortly 390 00:22:02,080 --> 00:22:20,760 Speaker 1: on net neutrality. We have talked a lot about the 391 00:22:20,880 --> 00:22:26,119 Speaker 1: GOP tax overhaul plowing toward passage, and yet to GOP 392 00:22:26,320 --> 00:22:29,800 Speaker 1: senators just slammed the fact that the tax overhaul included 393 00:22:29,880 --> 00:22:33,919 Speaker 1: cuts for the rich. We're talking about Susan Collins of 394 00:22:33,960 --> 00:22:37,119 Speaker 1: Maine and Marco Rubia of Florida. Of Florida here to 395 00:22:37,200 --> 00:22:39,359 Speaker 1: talk a little bit about what this means for the 396 00:22:39,400 --> 00:22:42,439 Speaker 1: passage of the bill is Terry Sullivan, partner and senior 397 00:22:42,480 --> 00:22:46,080 Speaker 1: Republican strategist at Firehouse Strategies in Washington, d C. Also 398 00:22:46,400 --> 00:22:50,520 Speaker 1: the former campaign manager for Marco Rubio's presidential campaign. Terry, 399 00:22:50,560 --> 00:22:53,720 Speaker 1: thank you so much for joining us. I'm wondering how 400 00:22:53,760 --> 00:22:57,280 Speaker 1: should we view the descent that we're hearing out of 401 00:22:57,400 --> 00:23:01,760 Speaker 1: individual members of the Senate Republican Senate. Is this a 402 00:23:01,840 --> 00:23:05,080 Speaker 1: bargaining chip that you're basically seeing in real time, or 403 00:23:05,200 --> 00:23:08,080 Speaker 1: is this real opposition that could end up blocking the 404 00:23:08,119 --> 00:23:12,000 Speaker 1: passage of the bill. Well, I think it's still a 405 00:23:12,040 --> 00:23:15,680 Speaker 1: bill in progress and that you know, and tell there's 406 00:23:15,800 --> 00:23:20,080 Speaker 1: and tell there's something final. Um, it's all negotiation and 407 00:23:20,240 --> 00:23:24,320 Speaker 1: uh sometimes making sausage isn't pretty um, even if the 408 00:23:24,440 --> 00:23:27,280 Speaker 1: end uh end result is going to be what we want. Um. 409 00:23:27,320 --> 00:23:29,200 Speaker 1: So I think there's there's still a lot of negotiating 410 00:23:29,240 --> 00:23:31,000 Speaker 1: going on, and I think that's an important part of 411 00:23:31,000 --> 00:23:33,639 Speaker 1: the process. Um. That there is no done deal in 412 00:23:33,720 --> 00:23:35,679 Speaker 1: this kind of flies in the face of of the 413 00:23:35,680 --> 00:23:38,720 Speaker 1: Democrats argument that this was ramar added through. This is 414 00:23:38,840 --> 00:23:41,879 Speaker 1: you know, there's real debate about what this uh, what's 415 00:23:41,920 --> 00:23:45,000 Speaker 1: the details of this bill look like? But you just 416 00:23:45,040 --> 00:23:47,120 Speaker 1: said I'm just trying to understand this. You said that 417 00:23:47,240 --> 00:23:50,399 Speaker 1: the bill has yet to be completed. We don't know 418 00:23:50,560 --> 00:23:54,320 Speaker 1: many of the details of the bill. If this is 419 00:23:54,359 --> 00:23:58,680 Speaker 1: such a significant piece of legislation, why would the details 420 00:23:58,920 --> 00:24:03,159 Speaker 1: be released and then only have perhaps five days in 421 00:24:03,240 --> 00:24:07,960 Speaker 1: order to analyze this without vigorous debate from public, uh, 422 00:24:08,240 --> 00:24:12,080 Speaker 1: with public input to craft the bill in the first place. 423 00:24:12,160 --> 00:24:15,200 Speaker 1: What how does that make sense? Yeah, I mean, look, 424 00:24:15,600 --> 00:24:19,359 Speaker 1: part of it is the the hyper politicization of everything. 425 00:24:19,640 --> 00:24:22,760 Speaker 1: Now in that look, the senators that you know we 426 00:24:22,880 --> 00:24:27,520 Speaker 1: elected umu as Americans are are there hammering out a 427 00:24:27,560 --> 00:24:29,920 Speaker 1: bill on the on the Senate side and the House 428 00:24:29,960 --> 00:24:33,359 Speaker 1: members on the House side. And you know that doesn't 429 00:24:33,359 --> 00:24:35,359 Speaker 1: mean that every single one of us has to be 430 00:24:35,600 --> 00:24:39,280 Speaker 1: fully informed of every step of the process along the way. UM. 431 00:24:39,320 --> 00:24:41,479 Speaker 1: It's concerning if they don't have the information as in 432 00:24:41,520 --> 00:24:46,560 Speaker 1: some cases in the past, but clearly the the legislators 433 00:24:46,640 --> 00:24:49,680 Speaker 1: are have the information and are working through this UM 434 00:24:49,880 --> 00:24:52,919 Speaker 1: and so uh, it's covered like a horse race, just 435 00:24:52,960 --> 00:24:55,320 Speaker 1: like a political campaign would be. But but this is 436 00:24:55,480 --> 00:24:57,240 Speaker 1: this is the process of give and take and what 437 00:24:57,280 --> 00:24:59,879 Speaker 1: they're trying to do is is find a tax reform 438 00:25:00,040 --> 00:25:04,800 Speaker 1: bill that benefits all Americans. Terry, I think, UM, right 439 00:25:04,840 --> 00:25:08,239 Speaker 1: now one sort of drumbeat, and the backdrop is the 440 00:25:08,280 --> 00:25:12,160 Speaker 1: fact that if the GOP doesn't get something done by 441 00:25:12,320 --> 00:25:16,240 Speaker 1: year end, that the landscape could potentially change next year. 442 00:25:16,520 --> 00:25:19,440 Speaker 1: Given the fact that Alabama new has a new senator 443 00:25:19,480 --> 00:25:22,040 Speaker 1: who is a Democrat. Do you think that that could 444 00:25:22,119 --> 00:25:25,600 Speaker 1: potentially either uh, throw a wrench in the works if 445 00:25:25,600 --> 00:25:27,880 Speaker 1: there is no bill passed by year end, or if 446 00:25:27,880 --> 00:25:31,040 Speaker 1: this is what's accelerating the talks right now. Well, you 447 00:25:31,080 --> 00:25:33,760 Speaker 1: know I think that, yes, I mean, look, there's gonna 448 00:25:33,760 --> 00:25:37,879 Speaker 1: be one. Clearly, everything has come down to very party 449 00:25:37,920 --> 00:25:41,240 Speaker 1: line votes, um, And the Democrats are not going to 450 00:25:41,320 --> 00:25:43,760 Speaker 1: support taxi form or healthcare reform or any of these 451 00:25:44,240 --> 00:25:47,800 Speaker 1: Republican proposals. So the Republicans need the votes to do it, 452 00:25:47,960 --> 00:25:50,800 Speaker 1: and and that having one fewer vote is certainly going 453 00:25:50,880 --> 00:25:54,440 Speaker 1: to make it tougher. Um. So whenever, whenever Jones is 454 00:25:54,520 --> 00:25:57,360 Speaker 1: sworn in it, uh, you know that's that is one 455 00:25:57,400 --> 00:25:59,359 Speaker 1: fewer vote for any of these piece of legislation to 456 00:25:59,400 --> 00:26:04,400 Speaker 1: get through. And just talking about Alabama Democratic Senator Doug Jones, 457 00:26:04,440 --> 00:26:08,240 Speaker 1: who just won the election the special election. I'm just 458 00:26:08,320 --> 00:26:13,159 Speaker 1: wondering for the GOP generally, what has the shakeout been like. 459 00:26:13,280 --> 00:26:16,800 Speaker 1: I mean, we've seen reports from in fighting among members 460 00:26:16,880 --> 00:26:19,600 Speaker 1: of the GOP, people sort of soul searching. What this 461 00:26:19,680 --> 00:26:23,760 Speaker 1: means about President Trump as the head of the Republican Party. 462 00:26:24,040 --> 00:26:27,480 Speaker 1: What's your take on this? You know, I think it. Uh, 463 00:26:27,680 --> 00:26:30,800 Speaker 1: you can't, uh, you can't underestimate the fact that there 464 00:26:30,880 --> 00:26:33,040 Speaker 1: is there are some real divides within the Republican Party 465 00:26:33,119 --> 00:26:36,560 Speaker 1: right now. Um. But in part of it has to 466 00:26:36,600 --> 00:26:38,640 Speaker 1: do with the fact that the Republican Party is so 467 00:26:38,680 --> 00:26:42,199 Speaker 1: big and so strong compared to the Democrat Party in 468 00:26:42,280 --> 00:26:45,879 Speaker 1: that control you know, the House, the Senate, the executive branch, 469 00:26:46,200 --> 00:26:49,680 Speaker 1: the majority of state legislators, the majority of governor's mansions. 470 00:26:49,359 --> 00:26:52,600 Speaker 1: I mean, the Republican Party really is a dominant national party. 471 00:26:52,960 --> 00:26:55,280 Speaker 1: And therefore, once you get to this side, you're gonna size, 472 00:26:55,280 --> 00:26:58,640 Speaker 1: you're gonna have factions within it. Well. But because there 473 00:26:58,680 --> 00:27:01,720 Speaker 1: also is this fee here that we have heard reported 474 00:27:01,720 --> 00:27:03,719 Speaker 1: and perhaps this isn't true, you can you can dispel 475 00:27:03,800 --> 00:27:06,040 Speaker 1: us of this, um, but there's a sort of feeling 476 00:27:06,480 --> 00:27:10,159 Speaker 1: that the Republicans currently, Yes, they are very big, and 477 00:27:10,200 --> 00:27:14,600 Speaker 1: they're failing to get certain things done even though they 478 00:27:14,640 --> 00:27:17,960 Speaker 1: have all this power. Right, I do do not disagree 479 00:27:18,000 --> 00:27:20,480 Speaker 1: with that. I'm not gonna argue that point at all, um. 480 00:27:21,080 --> 00:27:24,520 Speaker 1: And look, they've they've run for all other party has 481 00:27:24,600 --> 00:27:27,440 Speaker 1: run for a lot of years on you know, repealing 482 00:27:27,480 --> 00:27:32,639 Speaker 1: Obamacare and uh tax reform, and so voters are expecting 483 00:27:32,720 --> 00:27:35,919 Speaker 1: him to actually get something done. And uh so I 484 00:27:35,960 --> 00:27:39,119 Speaker 1: don't I don't disagree with your premise at all. Just quickly, 485 00:27:39,359 --> 00:27:42,160 Speaker 1: Uh you know, Josh Holmes, who was the former chief 486 00:27:42,160 --> 00:27:45,280 Speaker 1: of staff of Mitch McConnell and a political advisor. He 487 00:27:45,359 --> 00:27:49,119 Speaker 1: said that the victory in Alabama of Doug Jones unmasked 488 00:27:49,280 --> 00:27:53,720 Speaker 1: Steve Bannon's incompetence. Do you believe that? Uh No, I 489 00:27:53,760 --> 00:27:56,320 Speaker 1: don't believe that at all. Steve Bannon's incompetence was unmasked 490 00:27:56,400 --> 00:28:00,600 Speaker 1: years ago when he ran a Biosphere two program in 491 00:28:00,640 --> 00:28:04,080 Speaker 1: the Arizona Desert to seclude people from the outside world 492 00:28:04,119 --> 00:28:06,679 Speaker 1: for you know, months at a time. Look, he's not, 493 00:28:07,480 --> 00:28:10,879 Speaker 1: nor has he ever been a political strategist. Um, No 494 00:28:10,960 --> 00:28:14,240 Speaker 1: one prior to Donald Trump has ever paid the man 495 00:28:14,280 --> 00:28:18,400 Speaker 1: for his political advice. So, you know, he elevated himself, 496 00:28:18,560 --> 00:28:20,399 Speaker 1: but with his White House position. He came into the 497 00:28:20,400 --> 00:28:24,199 Speaker 1: Trump campaign in the final three four months. Uh. You know, 498 00:28:24,280 --> 00:28:27,800 Speaker 1: the media loves a Darth Vader. Um, he is one 499 00:28:28,320 --> 00:28:31,159 Speaker 1: gruesome looking Darth Vader. We gotta Terry, We're gonna have 500 00:28:31,240 --> 00:28:32,800 Speaker 1: to leave it there. We gotta run. I want to 501 00:28:32,800 --> 00:28:36,760 Speaker 1: appreciate your appearance, said Terry Sullivan, partner at Firehouse Strategies 502 00:28:36,800 --> 00:28:43,320 Speaker 1: and a senior Republican strategist. Thanks for listening to the 503 00:28:43,320 --> 00:28:46,440 Speaker 1: Bloomberg P and L podcast. You can subscribe and listen 504 00:28:46,440 --> 00:28:50,640 Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform 505 00:28:50,680 --> 00:28:54,560 Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox. 506 00:28:54,880 --> 00:28:58,400 Speaker 1: I'm on Twitter at Lisa Abramo wits one. Before the podcast, 507 00:28:58,440 --> 00:29:01,040 Speaker 1: you can always catch us worldwide it on Bloomberg Radio. 508 00:29:09,760 --> 00:29:09,800 Speaker 1: H