WEBVTT - There's 'Desired Chaos' in the White House, Rattner Says 0:00:00.240 --> 0:00:04.040 Runt You by Bank of America Mary Lynch with virtual reality, 0:00:04.320 --> 0:00:09.719 virtually everything will change. Discover opportunities in a transforming world 0:00:10.160 --> 0:00:14.440 VI of a mL dot Com slash VR, Mary Lynch, 0:00:14.520 --> 0:00:29.240 Pierced Fenner and Smith Incorporated. Welcome to the Bloomberg Surveillance Podcast. 0:00:29.280 --> 0:00:32.760 I'm Tom Keene with David Gura. Daily we bring you 0:00:32.840 --> 0:00:37.680 insight from the best of economics, finance, investment, and international relations. 0:00:38.120 --> 0:00:43.640 Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, 0:00:43.640 --> 0:00:51.160 and of course on the Bloomberg. He has been generous 0:00:51.200 --> 0:00:54.720 of his time and joining us this morning. Mario Gabelli 0:00:54.800 --> 0:00:57.280 for those of you not on Global Wall Street. Um, 0:00:57.320 --> 0:01:03.279 he is an original in my value investment, and he's 0:01:03.320 --> 0:01:07.480 an original in patience, and he's an original in shareholders 0:01:07.480 --> 0:01:09.800 should get their fair share? Are we going to continue 0:01:09.800 --> 0:01:12.440 to see share buy backs? Mario? As we go up 0:01:12.520 --> 0:01:16.160 up up? Is that just an easy path? That's a 0:01:16.160 --> 0:01:19.200 great question, and it always depends on how you allocate capital. Tom, 0:01:19.360 --> 0:01:21.520 what is the right Now You've got almost the triple 0:01:21.600 --> 0:01:25.800 tax on the corporate earnings, the corporate tax, the tax 0:01:25.840 --> 0:01:28.200 on dividends, and then the surcharge on dividends. That was 0:01:28.240 --> 0:01:31.960 a snug in at night. But if I'm a steel company, 0:01:32.000 --> 0:01:34.040 do I want to reinvest in the steel business and 0:01:34.160 --> 0:01:38.320 open heart? No, the answers business has changed, so keep 0:01:38.319 --> 0:01:42.160 your powder dry, be flexible and uh obviously changed with 0:01:42.240 --> 0:01:43.960 the world that's going on over the next ten of 0:01:44.000 --> 0:01:47.280 twenty years. And uh, buy backs. If I'm buying back 0:01:47.319 --> 0:01:51.520 the stock materially below intrinsic value, that helps everyone. If 0:01:51.520 --> 0:01:53.600 it's buying it back to support the stock, it makes 0:01:53.640 --> 0:01:56.680 no sense of you know. And so you gotta figure 0:01:56.680 --> 0:02:00.800 out what when do yields compete with dividen ends again 0:02:01.000 --> 0:02:04.120 in our lifetime? Well, it depends on a snapshot or 0:02:04.120 --> 0:02:06.840 emotion picture. On emotion picture, you really want to own 0:02:07.080 --> 0:02:10.000 up companies that are good I have corporate earnings and 0:02:10.040 --> 0:02:14.000 are growing and can maintain purchasing power in real terms. 0:02:14.000 --> 0:02:15.880 So if inflation picks up, which I'm at the camp 0:02:15.919 --> 0:02:19.079 that says it will, uh, then you want to earn 0:02:18.840 --> 0:02:24.320 a static return, tom, but a return that grows with time. Okay, 0:02:24.400 --> 0:02:27.520 let's bring into O'Brien, who knows nothing about yours or 0:02:27.600 --> 0:02:31.120 my world, but he's been talking with Matthew Levina Bloomberg 0:02:31.200 --> 0:02:34.640 View all night about the Financial Markut Tim O'Brien with 0:02:34.680 --> 0:02:37.560 Mario Gabelli. Mario is good to have you here today, 0:02:37.639 --> 0:02:40.280 My privilege to listen to you. Thanks for tolerating me. 0:02:40.680 --> 0:02:45.480 My actually my Bloomberg gad Fly colleagues. Stephen Gandeli Rope 0:02:45.800 --> 0:02:48.720 had a nice piece about earnings outlooks for the S ANDP. 0:02:49.440 --> 0:02:52.799 We obviously had a great first quarter where earnings across 0:02:52.800 --> 0:02:55.959 the border up about four It looks in the second 0:02:56.040 --> 0:02:58.600 quarter like they're gonna slow to about six point four percent, 0:02:59.120 --> 0:03:01.600 and people are even a little more bearish for earnings 0:03:01.600 --> 0:03:05.239 in the third quarter at maybe only five percent or so. 0:03:05.760 --> 0:03:08.400 So what does that mean about valuations? Mario? If for 0:03:08.400 --> 0:03:10.240 for the bullish out look at the market, that it 0:03:10.280 --> 0:03:13.440 probably is more than fully valued right now. Corporate earnings 0:03:13.440 --> 0:03:15.720 always drive that picture. So what do you think, Well, 0:03:15.760 --> 0:03:18.320 it's a multiple, it's earnings, and the multiple to earnings. 0:03:18.320 --> 0:03:21.160 The multiple earnings a function of interest rates and inflation 0:03:21.760 --> 0:03:24.560 isn't as an underpinning to interest rates and so on. 0:03:25.840 --> 0:03:29.560 From my point of view, the Euro today is one fourteen, 0:03:29.639 --> 0:03:32.440 a year ago is one ten. So American companies are 0:03:32.440 --> 0:03:34.920 going to get the tail wind. Thirty percent of earnings 0:03:34.960 --> 0:03:36.520 are outside the United States, so you're gonna get a 0:03:36.520 --> 0:03:39.080 tail whin it's opposed to the head. When on translations 0:03:39.160 --> 0:03:42.560 Europe is doing better, Germany you're gonna think is doing better? 0:03:42.640 --> 0:03:45.560 Is the core Well, I've been not that much earnings 0:03:45.560 --> 0:03:48.000 in China and the financials are going to do better 0:03:48.040 --> 0:03:50.560 if the slope of the interest rate curve goes upwards. 0:03:50.560 --> 0:03:52.720 So those are important parts of the market. So I, 0:03:53.520 --> 0:03:55.960 you know the macro guys, Steve is probably right. I 0:03:55.960 --> 0:03:59.520 don't do macro. On the other side, there's always opportunities 0:04:00.400 --> 0:04:02.200 anywhere in the world, and that's where we try to 0:04:02.200 --> 0:04:04.640 ferret out. Jon Tucker, did you see how smart that 0:04:04.680 --> 0:04:07.440 Tim O'Brien question was? This? Is he's like sitting in 0:04:07.720 --> 0:04:12.839 or is this an audition? Is there's something I need 0:04:12.880 --> 0:04:15.360 to know? I should point out to Mario that Tom 0:04:15.440 --> 0:04:19.920 is approaching the mandatory return. Very good, could have Let's 0:04:19.960 --> 0:04:24.480 have another mandatory question from Mr O'Brien, tim um Uh, Mario. 0:04:24.600 --> 0:04:26.720 The other thing that sort of sneaks in on this 0:04:26.760 --> 0:04:30.360 is how much energy companies contributed to the first quarter 0:04:31.080 --> 0:04:35.680 earnings rises That sustainable in that sector from your perspective, Uh, 0:04:35.920 --> 0:04:39.200 look to make the case that oil at forty five 0:04:39.200 --> 0:04:42.760 dollars a barrel is a question mark. But if Saudi 0:04:42.760 --> 0:04:45.440 Arabia is trying to go public with one of their companies, 0:04:45.680 --> 0:04:49.240 will take trim back. And the other side, American technology 0:04:49.240 --> 0:04:52.000 and a form of fracking has given us a reservoir 0:04:52.040 --> 0:04:55.560 of energy. It is providing at the margin the incremental amount. 0:04:55.839 --> 0:04:57.760 But at the same time you look at what happened 0:04:57.760 --> 0:05:01.040 to Adelaide Australia where they ran out of energy because 0:05:01.040 --> 0:05:02.680 they didn't have the right policy. So we got to 0:05:02.720 --> 0:05:05.280 do a lot of things together. And as far as 0:05:05.400 --> 0:05:07.920 Ernie is are concerned, we are buying some of these 0:05:07.920 --> 0:05:12.599 stocks now. Is President Trump good for the stock market? No, 0:05:12.720 --> 0:05:17.200 But the policies of a applaud business as opposed to 0:05:17.240 --> 0:05:20.640 condemn them is clearly very good. The allocation of money 0:05:20.640 --> 0:05:23.919 to capitalism as opposed to socialism is always very good. 0:05:24.160 --> 0:05:27.120 And the free market system, which has functioned effectively since 0:05:27.160 --> 0:05:29.599 Adam Smith came around and allocated has been one of 0:05:29.640 --> 0:05:31.839 the great wonders of the world in terms of helping 0:05:32.040 --> 0:05:35.240 helping mankind. You and I heard Jake Clayton, the Securities 0:05:35.279 --> 0:05:38.080 and Exchange Commission yesterday at the Economic Club of New 0:05:38.160 --> 0:05:40.640 York I don't believe he brought up a tea word once. 0:05:41.400 --> 0:05:45.479 And it's interesting how government could move on even with 0:05:45.520 --> 0:05:47.800 all the uproar about the president. Do you have an 0:05:47.839 --> 0:05:50.359 optimism that can occur? Well if the moment can move on, 0:05:50.440 --> 0:05:53.360 but not under Bernie Sanders? Well, well, how about on 0:05:53.480 --> 0:05:57.520 infrastructure or great question and Tim let me go into that. 0:05:57.600 --> 0:06:00.920 In the December fift two thousand and fifth, we as 0:06:00.920 --> 0:06:04.960 a government passed the rules saying the fixed American surface 0:06:04.960 --> 0:06:09.960 transportation and companies did well today inland waterway, inland waterway 0:06:10.120 --> 0:06:13.160 things that helped the American farmer move goods Uh. The 0:06:13.200 --> 0:06:16.320 notion of avionics infrastructure is going to do well. From 0:06:16.360 --> 0:06:19.600 what I like is case New Holland. I like companies 0:06:19.640 --> 0:06:22.440 that are involved in infrastructure, like Dana, which sells parts 0:06:22.440 --> 0:06:25.120 of the Class eight trucks on a global basis, uh 0:06:25.160 --> 0:06:27.800 and so on. So case New Holland, for example, has 0:06:27.880 --> 0:06:31.719 farm equipment, it has construction equipment. It has a company 0:06:31.720 --> 0:06:34.359 that has run by a guy that took Ferrari public 0:06:34.400 --> 0:06:36.240 because he realized there wasn't a car company. But it 0:06:36.320 --> 0:06:39.120 alloxurally good. They're gonna take a Vaco public and take 0:06:39.320 --> 0:06:41.240 uh and do a lot so there's a lot going on. 0:06:41.240 --> 0:06:44.280 One final question before he could before you start your day. 0:06:44.480 --> 0:06:47.039 You were iconic on Steve Ross and Time Warner of 0:06:47.080 --> 0:06:50.240 a long time ago. Give us an update now on 0:06:50.400 --> 0:06:53.200 Time Warner in the media business in general. Are you 0:06:53.360 --> 0:06:57.600 enthused well the notion of the Stevenson a T and 0:06:57.640 --> 0:07:00.320 T putting his arms around direct TV and now putting around. 0:07:00.360 --> 0:07:03.200 You've got to allow companies to buy what they want. 0:07:03.240 --> 0:07:05.240 If they make mistakes, it is what it is. If 0:07:05.240 --> 0:07:07.720 they add value, it is what it is. So I 0:07:07.760 --> 0:07:12.600 like entertainment, I like content, I like connectivity, wireless, cable. 0:07:13.040 --> 0:07:15.800 What am I buying? I'm buying Millcom because John Malone 0:07:15.840 --> 0:07:17.520 is going to buy it. He just primed the pump 0:07:17.520 --> 0:07:20.600 with Lilac a Liberty International by buying stock that he 0:07:20.640 --> 0:07:23.600 hasn't bought before. So there's a lot going on. Tom 0:07:23.680 --> 0:07:25.920 and I want to own wireless companies. I want to 0:07:25.920 --> 0:07:28.960 own cable companies. Millecom is one that will be taken 0:07:28.960 --> 0:07:31.200 over within two years. The stocks fifty five owned by 0:07:31.200 --> 0:07:37.000 a Swedish company called Shinovic. Uh. That's clearly and everyone's 0:07:37.040 --> 0:07:41.120 radar screen belly. Thank you so much to meet you 0:07:41.560 --> 0:07:48.200 and use your shop elbow and move them out. Thank you, 0:07:50.360 --> 0:07:55.240 I said, I said, t okay, belly, thank you so much. 0:08:07.600 --> 0:08:10.400 This is just a joy this morning, Timthy O'Brien in 0:08:10.480 --> 0:08:12.600 for us is David Gurrs in Idaho. We'll go to 0:08:12.720 --> 0:08:16.640 Mr Gura later on and joining us now. Really in 0:08:16.680 --> 0:08:21.480 the nexus of our nation's political science is Douglas Elmendorf. 0:08:21.720 --> 0:08:25.120 To say he's at Kennedy out of Harvard barely describes 0:08:25.200 --> 0:08:31.360 his public service, particularly his service with a Congressional Budget Office. Uh, 0:08:31.480 --> 0:08:34.679 Dean Elmendorff? Do you go by Dean du Doug? I mean, 0:08:34.760 --> 0:08:38.000 is Dean the appropriate title? You can just call me? 0:08:38.080 --> 0:08:39.800 Do all? I one of knows do you have Red 0:08:39.800 --> 0:08:41.880 Sox tickets? Because that's the only reason to talk to you. 0:08:42.240 --> 0:08:47.800 But Doug, Doug, Seriously, within the CBO scoring debate is 0:08:48.040 --> 0:08:53.079 the CBO. Mitch McConnell's friend right now, because everybody seems 0:08:53.120 --> 0:08:56.080 to look at CBO as the evil enemy, is the 0:08:56.200 --> 0:09:02.960 CBO Senator McConnell's friend. CBOs isn't supposed to be anybody's 0:09:03.000 --> 0:09:08.800 friend or enemy. Their objective analysts providing their best informed 0:09:08.920 --> 0:09:12.280 estimate of the effects of proposed policies, and at different 0:09:12.280 --> 0:09:14.800 points in time, those estimates will turn out to help 0:09:14.840 --> 0:09:19.440 or her certain Congressional members causes, and that's just the 0:09:19.440 --> 0:09:22.280 way the system works. But through that system, you and I, 0:09:22.720 --> 0:09:25.480 as well as all the members of Congress, learn what 0:09:25.520 --> 0:09:28.600 the effects of proposals will be before the members have 0:09:28.679 --> 0:09:30.439 to vote on them. I should point out that Dean 0:09:30.520 --> 0:09:34.199 Almendorff was need deep been President Clinton's health care efforts 0:09:34.240 --> 0:09:37.080 of another time in place. Timothy O'Brien with us this 0:09:37.120 --> 0:09:42.600 morning from Bloomberg View. Tim A question for Dean Almendorff, Uh, Doug, 0:09:42.600 --> 0:09:45.560 is do you think that this sort of backlash against 0:09:45.640 --> 0:09:50.920 the CBO smacks of the previous backlash against the statisticians 0:09:50.920 --> 0:09:54.080 at the BLS around labor statistics. Have we entered into 0:09:54.120 --> 0:09:58.800 this sort of moment where people feel comfortable contending with 0:09:58.840 --> 0:10:04.200 almost anything that he once considered to be objective facts. Yes, 0:10:04.360 --> 0:10:08.600 I'm very concerned about that this administration is afraid of 0:10:08.800 --> 0:10:13.520 facts and evidence and analysis, and OMB Director Mulvaney attacked 0:10:13.920 --> 0:10:16.400 the Bureau of Labor Statistics for how it calculates the 0:10:16.440 --> 0:10:21.320 unemployment rate. He's attacking CBO for its independent analysis. This 0:10:21.440 --> 0:10:24.240 is very dangerous for our political system and for our country, 0:10:24.240 --> 0:10:28.240 and I think it's important that Republican Congressional leaders stand 0:10:28.320 --> 0:10:31.840 up for CBO and its work because this actually isn't 0:10:31.840 --> 0:10:35.080 a partisan ideological issue. It's just about good government and 0:10:35.120 --> 0:10:36.720 good data at the end of the day, isn't it. 0:10:37.520 --> 0:10:40.400 That's exactly right? Um, what do you where do you 0:10:40.440 --> 0:10:44.559 think this is springing from it its core? Well, I 0:10:44.920 --> 0:10:48.240 understand that the administration and some Republicans and Congress are 0:10:48.240 --> 0:10:53.200 frustrated because CBO's estimates are not helping them pass their 0:10:53.200 --> 0:10:57.160 health legislation. But that's not cbio's fault. The Republicans are 0:10:57.160 --> 0:11:02.040 pushing legislation that would health insurance away from tens of 0:11:02.120 --> 0:11:05.440 millions of Americans. That's going to be a hard sell 0:11:05.559 --> 0:11:08.320 to the American people if the American people understand it. 0:11:08.840 --> 0:11:12.600 So naturally, the sponsors of that sort of legislation don't 0:11:12.679 --> 0:11:14.920 want that understanding to occur, and they're going to try 0:11:14.960 --> 0:11:18.559 to stop the people like BBO who are informing Americans. 0:11:18.880 --> 0:11:21.080 Dinamer's one more question if we could in a brief 0:11:21.160 --> 0:11:23.240 visit this morning. I know you read all of your 0:11:23.280 --> 0:11:27.280 working papers at Kennedy the great Danny Roderick on Populism 0:11:27.400 --> 0:11:31.360 in the Economics of Globalization. Is the American populism. The 0:11:31.480 --> 0:11:36.679 same is the population of populism of Europe. There are 0:11:36.679 --> 0:11:40.600 different strands, of course, in different places and different particular issues. 0:11:40.960 --> 0:11:44.600 But Danny wrote twenty years ago that the great challenge 0:11:44.640 --> 0:11:50.680 was whether global economic integration would lead to domestic social disintegration, 0:11:51.160 --> 0:11:55.440 and he saw that coming decades away, and unfortunately we 0:11:55.440 --> 0:11:57.559 are now seeing the fruits of that in ways that 0:11:57.600 --> 0:12:00.480 are very damaging for our countries. Dinamo or thank you 0:12:00.559 --> 0:12:02.800 too shut to visit this morning, We greatly appreciate it. 0:12:03.080 --> 0:12:07.080 Douglas Almondorf is with the Comedy School at Harvard University. 0:12:07.120 --> 0:12:12.600 We forget Tim O'Brien that these schools have entire industries 0:12:12.800 --> 0:12:17.439 of bright people really struggling with the topics of the day, 0:12:17.760 --> 0:12:20.640 and we're in the era where, to some extent, maybe 0:12:20.679 --> 0:12:23.120 not a great extent, they're basically tarted and feathered on 0:12:23.240 --> 0:12:27.920 a daily basis. There's always been an an anti academia, 0:12:28.280 --> 0:12:30.320 but maybe it's a little harsher now that has been 0:12:30.640 --> 0:12:33.640 And it's not just academia. It's about data and research 0:12:33.679 --> 0:12:35.440 and facts. I think we have to be really cautious 0:12:35.440 --> 0:12:37.719 around all this, and we try. We're working on that 0:12:38.400 --> 0:12:47.640 as well. Runch you by Bank of America, Mary Lynch. 0:12:47.880 --> 0:12:53.400 With virtual reality, virtually everything will change. Discover opportunities in 0:12:53.440 --> 0:12:58.040 a transforming world. VI of a mL dot Com, slash VR, 0:12:58.880 --> 0:13:07.880 Mary Lynch, Pierce Uner and Smith Incorporated. Good morning everyone, 0:13:07.960 --> 0:13:10.440 David Gurr again, and I know Timothy O'Brien and Bloomberg 0:13:10.520 --> 0:13:12.920 view that with us this morning and joining us now 0:13:13.320 --> 0:13:16.880 Brian Weezer a pivotal research and really, Brian, I guess 0:13:16.880 --> 0:13:20.080 what we need to focus rather, Brian, what we need 0:13:20.120 --> 0:13:24.160 to focus on is is continued dominance of Google and Facebook. 0:13:24.440 --> 0:13:28.400 It's such a pervasive feeling. My radars up. Do you 0:13:28.440 --> 0:13:31.920 buy the idea that is dominant as dominant could be? Oh, 0:13:32.000 --> 0:13:34.320 it's not just the buying an idea. Any fact out 0:13:34.360 --> 0:13:37.360 there supports it. There're seventy of the total revenue from 0:13:37.400 --> 0:13:41.960 digital advertising, their nine percent of the growth depending on 0:13:42.280 --> 0:13:46.400 when you UH define the period um. Yeah, no, they're dominant, 0:13:46.480 --> 0:13:48.319 and I think the rest of the industry is looking 0:13:48.400 --> 0:13:51.240 for a way to prevent their dominance from expanding. Let 0:13:51.240 --> 0:13:54.040 me bring in someone who lives as Timothy O'Brien. You've 0:13:54.120 --> 0:13:57.640 lived this advertising change, not only the New York Times 0:13:57.679 --> 0:14:00.480 but also at Helfington Post as well. I mean, you've 0:14:00.520 --> 0:14:03.560 lived what Brian Weezer is talking about. It's you know, 0:14:04.040 --> 0:14:07.640 monetization of content and platforms is the key industry for 0:14:07.679 --> 0:14:10.760 anybody who's on the web, or key metric to consider 0:14:10.800 --> 0:14:13.680 for anyone's on the web right now. Brian, you raised 0:14:13.679 --> 0:14:17.760 a really interesting and crucial point obviously in your in 0:14:18.080 --> 0:14:20.120 your in one of your notes that I read, which 0:14:20.200 --> 0:14:23.800 is this whole issue of you ability and metrics and 0:14:23.840 --> 0:14:27.240 weather the duopoly. But really anyone else in the industry 0:14:27.240 --> 0:14:30.320 who's selling advertising is going to open themselves up to 0:14:30.440 --> 0:14:34.760 third party analysts who will either validate or or have 0:14:34.840 --> 0:14:38.320 their own point of view on monetization and advertising revenue. 0:14:38.480 --> 0:14:42.240 Where do you think we are on the view ability issue? Uh, well, 0:14:42.240 --> 0:14:44.280 the industry is at least to where that has got 0:14:44.280 --> 0:14:46.880 a problem. And I think, like you know, people like me, 0:14:47.160 --> 0:14:51.040 I'll call myself a digital truth or um that for 0:14:51.240 --> 0:14:54.239 far too many years there's this shine on digital advertising 0:14:54.280 --> 0:14:58.120 that it's perfect, it's targetable to dress bullets perfect, and 0:14:58.160 --> 0:15:01.200 that was never true. Um. And so now at least 0:15:01.520 --> 0:15:04.560 large bands are fully aware that their problems and their 0:15:04.640 --> 0:15:07.800 finding solutions. So it's really Facebook and Google in particular 0:15:07.800 --> 0:15:10.880 where the world garden problem is most pronounced because it's 0:15:10.880 --> 0:15:14.520 so important, because it's so big. Um. You know. I 0:15:14.520 --> 0:15:17.360 think Mark Pritchard from Who's Procter and Gambles chief brand officer, 0:15:17.440 --> 0:15:21.360 has been one of the most vocal um industry players 0:15:21.440 --> 0:15:24.520 and really is leading the charge right now by basically 0:15:25.280 --> 0:15:28.560 indicating there they're going to move their money if Facebook 0:15:28.600 --> 0:15:29.840 doesn't do what they need them to do. Now that 0:15:29.920 --> 0:15:31.680 might not be enough for Facebook. Well, and where do 0:15:31.720 --> 0:15:35.080 they move it to? They increase or spending on TV 0:15:35.120 --> 0:15:38.320 pretty significantly, which is why they upfronts went up. So 0:15:38.400 --> 0:15:40.120 that's part of it, you know. I mean the problem 0:15:40.200 --> 0:15:43.160 is that Facebook. So the metrics I have seen suggests 0:15:43.160 --> 0:15:46.680 that video views on Facebook are like two percent viewable. 0:15:46.760 --> 0:15:50.800 In other words, two percent of the ads delivered on 0:15:50.840 --> 0:15:56.200 Facebook get actually viewed. Then why do they get money? Uh? 0:15:56.240 --> 0:15:59.600 That's a really good question. So in all cases, advertising 0:15:59.640 --> 0:16:02.480 is at least battle Turner's business. Right, So, if you've 0:16:02.480 --> 0:16:04.560 got a digital budget to spend, you've allocaed my to 0:16:04.560 --> 0:16:07.720 spend on digital, where's the least bad place to spend it? 0:16:07.960 --> 0:16:10.160 If you're a big brand, Facebook's the least bad place. 0:16:10.200 --> 0:16:11.760 Do you have a single bust buy right now? Before 0:16:11.800 --> 0:16:13.720 you run out the door. I have exactly one by 0:16:13.760 --> 0:16:17.400 out of eighteen stocks. Isn't that shocking? Fox Fox? What 0:16:17.560 --> 0:16:22.360 Fox Fox? Only by I have I have three cells 0:16:22.480 --> 0:16:26.280 or two cells? Have three cells? White Fox. It's just undervalued. 0:16:26.280 --> 0:16:27.920 I think, you know, the market is really you know, 0:16:28.360 --> 0:16:32.160 doesn't like James Murdoch that much. I think they're concerned 0:16:32.200 --> 0:16:34.840 about what the Fox News in particular. I think I 0:16:34.880 --> 0:16:36.680 hear a lot of concerns that so this is a 0:16:36.800 --> 0:16:39.320 TV Fox. This is all the uproar room. They're not 0:16:39.400 --> 0:16:43.280 News Corp. But yeah, exactly the studio, the TV station group. Um. 0:16:43.320 --> 0:16:45.360 I think the Sky transaction, I mean it's going to 0:16:45.440 --> 0:16:46.800 be a bit of a rocky road to get there, 0:16:47.000 --> 0:16:48.760 but I think it's gonna be really good if it happens. 0:16:49.240 --> 0:16:51.720 Brian Weiser, thank you so much. I believe Tim O'Brien's 0:16:51.800 --> 0:16:55.160 rumored to take out Seawan handy spot. Brian Weezer with 0:16:55.160 --> 0:16:58.560 pivol as a joke, folks, Brian Weiser with a pivol 0:16:58.720 --> 0:17:14.760 research this one. Greatly appreciate that this is a good 0:17:14.800 --> 0:17:17.119 time and this goes to what Tim O'Brien was talking 0:17:17.160 --> 0:17:20.280 about earlier. It is a good time and we spoof 0:17:20.320 --> 0:17:24.160 about the words are, which has always been unfortunate. Czar 0:17:24.280 --> 0:17:27.719 Ratner joins us this morning. Stephen Ratner, we should say, uh, 0:17:27.880 --> 0:17:30.760 he's involved in the investment activities of our principal owner, 0:17:30.800 --> 0:17:34.800 Michael Bloomberg. But Steve Rattner, I really want to talk 0:17:34.840 --> 0:17:37.520 to you about what Tim O'Brien was talking about, which 0:17:37.560 --> 0:17:41.720 is process and procedure in a given institution like the 0:17:41.800 --> 0:17:46.240 White House. How do we assist our president towards process 0:17:46.240 --> 0:17:49.200 and procedure in the White House? And even as Czar 0:17:49.320 --> 0:17:54.760 could understand, look, I don't think we have a president 0:17:54.800 --> 0:17:59.520 who's all that interested in advice or suggestions or pretty 0:17:59.600 --> 0:18:01.879 much any thing else as to how he should operate 0:18:01.920 --> 0:18:03.919 the White House. I did spend some time in the 0:18:03.920 --> 0:18:07.040 White House. I've obviously observed this one from afar, as 0:18:07.080 --> 0:18:10.200 we all have, and it is it is really quite 0:18:10.200 --> 0:18:13.080 extraordinary to see how this White House operates relative to 0:18:13.119 --> 0:18:15.760 any other one I've ever been around in my my 0:18:15.880 --> 0:18:19.880 time in and out of Washington. You've you is there 0:18:19.920 --> 0:18:22.040 nobody you could compare him to? Steve? Is he that 0:18:22.680 --> 0:18:25.879 of of his own? I don't think there's anybody you 0:18:25.920 --> 0:18:29.000 can compare him to. I think when Jimmy Carter, who's 0:18:29.080 --> 0:18:31.880 White House I also covered as a reporter. I think 0:18:32.119 --> 0:18:34.840 the chaos that existed there at the beginning when when 0:18:34.880 --> 0:18:37.000 Carter announced he wasn't going to have a chief of staff, 0:18:37.040 --> 0:18:38.719 he was going to have this hub and spoke approach, 0:18:38.720 --> 0:18:40.920 and all these different people wandering in and out of 0:18:40.960 --> 0:18:44.160 the Oval office. You could probably compare the confusion to it. 0:18:44.600 --> 0:18:47.080 But but the the sort of the the sort of uh, 0:18:47.520 --> 0:18:50.199 but that was sort of undesired confusion. This seems to 0:18:50.240 --> 0:18:53.119 be desired chaos on on President Trump's part, And so 0:18:53.400 --> 0:18:55.439 there's nobody in my lifetime you can compare him to. 0:18:55.880 --> 0:18:59.560 Do you think it's bleeding into the rest of Washington, 0:18:59.640 --> 0:19:04.719 the sort of trump lack of managerial focus and I 0:19:04.720 --> 0:19:07.520 think a lack of goal orientation. I've been watching Mitch 0:19:07.560 --> 0:19:10.560 McConnell move this bill through the Congress, and there was 0:19:10.600 --> 0:19:13.280 this thought, after the House debacle on healthcare, that the 0:19:13.320 --> 0:19:15.240 Senate was going to step in and be the adult 0:19:15.240 --> 0:19:18.480 in the room and and craft more thoughtful legislation. And 0:19:18.560 --> 0:19:20.840 yet here we are with a bill and motion that 0:19:20.880 --> 0:19:23.879 everyone seems to hate, a process that McConnell is running 0:19:23.880 --> 0:19:27.200 the dark, and and and and a lot of people 0:19:27.200 --> 0:19:29.680 seeming to a qu s to the chaos of the 0:19:29.720 --> 0:19:33.159 Trump white House. I'd say two things about that. I'd say, first, 0:19:34.440 --> 0:19:37.480 healthcare bill, as we found during the Obama administration, is 0:19:37.600 --> 0:19:40.920 very very difficult to pass. McConnell has an extremely difficult 0:19:40.960 --> 0:19:43.399 job that no matter who is president, it would be 0:19:43.480 --> 0:19:46.280 hard to bring the two ends of his party together 0:19:46.440 --> 0:19:49.480 into and get fifty votes. And uh, let Rand Paul 0:19:49.520 --> 0:19:52.160 and somebody else, Susan Collins go often do their thing. 0:19:52.560 --> 0:19:55.399 It's really really hard, but it is made much harder 0:19:55.440 --> 0:19:57.880 by the lack of leadership from the White House. There's 0:19:57.920 --> 0:20:00.840 no rama. Manuel, as they're wondering, was during the bombed 0:20:00.840 --> 0:20:04.000 administration going up to the hill every day talking to 0:20:04.040 --> 0:20:06.600 people saying, come on, guys, let's just make this tweak. 0:20:06.640 --> 0:20:09.040 Let's make that tweak. Let's get a deal done. Having 0:20:09.040 --> 0:20:12.120 a dysfunctional White House does not make things easier for Congress. 0:20:12.160 --> 0:20:15.919 And you are arguably more qualified than anyone we speak 0:20:15.920 --> 0:20:20.560 to to ask this question. Does it dampen the animal spirit, 0:20:20.600 --> 0:20:23.800 does it bring down nominal GDP? Does it bring down 0:20:23.800 --> 0:20:26.560 inflation just a d d G d P? And does 0:20:26.600 --> 0:20:30.120 it filter into our investment world or is the czar 0:20:30.280 --> 0:20:33.200 world you lived in, Steve Rattner? Is it discreet and separate? 0:20:33.760 --> 0:20:36.240 So far? It appears to be discreet and separate so 0:20:36.320 --> 0:20:39.159 far as you look at, certainly the markets and how 0:20:39.200 --> 0:20:42.359 they're behaving, as you look at the consumer confidence and 0:20:42.440 --> 0:20:47.080 consumer and business confidence and business optimism indicase, UH, they 0:20:47.160 --> 0:20:50.280 still so far seem to be riding along on the 0:20:50.320 --> 0:20:53.040 so called Trump bump and the belief that Trump will 0:20:53.119 --> 0:20:57.240 run a very business friendly administration, a lot of deregulation, 0:20:57.440 --> 0:20:59.679 a lot of tax and are the benefits for the 0:20:59.680 --> 0:21:02.200 corporate sector that will, at least in the short run 0:21:02.280 --> 0:21:07.080 drive the economy upward. But as the dysfunctionality continues, and 0:21:07.119 --> 0:21:11.600 as and if and when the scandal UH permeates further, 0:21:12.119 --> 0:21:16.439 I think it certainly could affect the animal spirits. Um 0:21:16.480 --> 0:21:19.120 are you where do you think this goes? Long term? 0:21:19.119 --> 0:21:23.000 For the GOP as a party, how are they do they? 0:21:23.040 --> 0:21:27.080 Are they going to be split permanently between the populist 0:21:27.119 --> 0:21:29.920 wing and the more moderate wing. If they're not, how 0:21:29.960 --> 0:21:32.879 does that get cured so that you can have a 0:21:32.960 --> 0:21:38.600 party in a Congress that actually produces legislation The answers, 0:21:38.720 --> 0:21:42.000 I don't know. I write the populist so called populist 0:21:42.040 --> 0:21:45.640 wing is really more exists at the voting level rather 0:21:45.640 --> 0:21:48.960 than at the UH senator and representative level. At the 0:21:49.000 --> 0:21:51.760 senate representative level, it's a pretty it's still a pretty 0:21:52.320 --> 0:21:55.159 uh conventional group of folks with with as it is 0:21:55.200 --> 0:21:58.000 in the Democratic Party, with some people far out on 0:21:58.040 --> 0:22:00.000 the edges of it in terms of their own philosop 0:22:00.400 --> 0:22:02.560 and the concept of trying to make a have a 0:22:02.600 --> 0:22:05.960 big tent. But I think, I think, um, I think 0:22:05.960 --> 0:22:08.000 the question where the party goes depends a lot on 0:22:08.080 --> 0:22:10.280 what happens to the president, whether he's able to function 0:22:10.359 --> 0:22:12.640 as a president Steve Retner very quickly or George Will 0:22:12.720 --> 0:22:15.320 mentioning it up in tax reform today and senator wide, 0:22:15.760 --> 0:22:21.960 can we get tax reform under a reconciliation process? Well, 0:22:21.960 --> 0:22:23.879 that's the only way we're gonna get tax reform is 0:22:23.880 --> 0:22:28.000 through reconciliation. But I think tax reform is very problematic 0:22:28.280 --> 0:22:30.800 because the border adjusted tax is not going to happen 0:22:31.240 --> 0:22:33.560 without that. There may be some revenue from this tax 0:22:33.760 --> 0:22:37.200 healthcare build, that's a less than fifty probability in my opinion, 0:22:37.440 --> 0:22:39.280 So they don't have that much revenue to pay for 0:22:39.320 --> 0:22:41.800 tax reform. And I think the deficit. Hawks are going 0:22:41.840 --> 0:22:43.960 to keep them from just spending a lot of money 0:22:43.960 --> 0:22:46.600 on tax reform that we don't have. Steve Retnor, thank 0:22:46.640 --> 0:22:49.800 you so much as Willow Advisors this morning on our 0:22:49.840 --> 0:22:56.520 perspective of Washington and economics, finance and investments as well. 0:23:07.880 --> 0:23:12.240 Good morning everyone. Timothy O'Brien and Tom Keene were thrilled of. 0:23:12.400 --> 0:23:16.919 Timothy O'Brien is our permanent host with Bloomberg surveillance of 0:23:16.920 --> 0:23:19.159 course here in New York. In a minute, we'll go 0:23:19.200 --> 0:23:22.359 to our reporter, David Gura, John Daker. David Gura, our 0:23:22.440 --> 0:23:25.280 reporter out in Idaho, will go to him in a moment. 0:23:25.359 --> 0:23:27.880 They found nothing but to his hat left his hunter's cat. 0:23:28.040 --> 0:23:31.480