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Speaker 1: This is Bloomberg Surveillance. Banks are a much better physician

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Speaker 1: now than they were before the crisis, much more capital,

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Speaker 1: and they're much more resilient. One of the more important

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Speaker 1: transmission mechanisms of monetary policy when rates get to very

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Speaker 1: low levels is actually through the exchange rate. But after

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Speaker 1: the people's think of China in the centil Bank of

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Speaker 1: China is going to do in terms of his mom

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Speaker 1: fit policy will have a big impact on market. Sploomberg

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Speaker 1: Surveillance your link to the world of economics, finance, and investment.

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Speaker 1: On Bloomberg Radio. Good morning, I'm Michael McKee along with

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Speaker 1: Tom Keene. It is seven am on Wall Street, seven

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Speaker 1: am in Washington, d C. Where Tom and I find

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Speaker 1: ourselves on this super Tuesday. By tonight we could know

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Speaker 1: who the Republican and Democratic presidential nominees are. At least

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Speaker 1: we could have a pretty good idea, and we're going

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Speaker 1: to be talking about that today on Surveillance, including Tom.

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Speaker 1: A fascinating interview with former fitcherman Alan Greens. Yeah, you're

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Speaker 1: getting a rate reviews. He was, as you said, correctly,

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Speaker 1: he was remarkably cautious on where this nation is going.

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Speaker 1: As we have this important electoral day. Well, we will

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Speaker 1: talk about that in just a moment. If there's concerned

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Speaker 1: among investors about who may represent the major parties here,

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Speaker 1: it doesn't show in the markets this morning. US futures

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Speaker 1: significantly higher. SMP futures up by fourteen points right now,

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Speaker 1: three quarters of a percent down, futures up seven tenths.

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Speaker 1: That's a hundred and ten points on that index, and

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Speaker 1: Nazaki Mini features up by thirty one points right now,

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Speaker 1: also three quarters of a percent. In Europe, stocks are higher,

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Speaker 1: the stocks six hundred up by three points nine tenths.

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Speaker 1: European at least, Eurozone employment higher than it has been

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Speaker 1: in four years, the unemployment rate lower than it has

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Speaker 1: been in four years. The foot Sea up forty two

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Speaker 1: points seven tenths of a percent, wiping out all of

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Speaker 1: its losses so far for the year. The docks a

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Speaker 1: hundred and forty seven points higher one and a half

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Speaker 1: per cent. Bonds have churned, that's the word Tom loves

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Speaker 1: to say. But in the U has the curve little

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Speaker 1: change from where we were at this time yesterday. The

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Speaker 1: tenure note yield one point seven four percent, the five

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Speaker 1: year at one point to three percent, seventy nine basis

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Speaker 1: points year two year yield Germany, though lower yet again.

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Speaker 1: Right now the German two year trading at a negative

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Speaker 1: fifty seven basis points oil and this is important. West

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Speaker 1: Texas thirty four seventeen up, crisis over one percent. Brent

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Speaker 1: crude thirty seventy four up seventeen cents a half yea

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Speaker 1: crisis over Cherman greens fan about that, and he said,

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Speaker 1: you know, we are going to find a bottom at

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Speaker 1: some point, and that could have a significant impact. He

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Speaker 1: was actually pretty good as not you know, gaming it

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Speaker 1: like an oil strategist of suggesting, uh, we made me

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Speaker 1: near a bottom or finding a bid on oil from Washington.

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Speaker 1: This Super Tuesday Bloomberg Surveillance brought to you by Investo.

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Speaker 1: Factor based strategies can help investors focus on a high quality,

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Speaker 1: low volatility and more. Learn more at investco dot com

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Speaker 1: slash high Conviction. I did a Hubert Heaver with our

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Speaker 1: guests this morning. I said he was the President of

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Speaker 1: the White House, and I got it a little wronged. Well,

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Speaker 1: maybe someday his career aren't continuing career. So let's let's

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Speaker 1: have you bring in Hubert huber Heaver Ferman Jason, who

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Speaker 1: is the chairman of the Council of Economic Advisors, Chairman Greenspan,

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Speaker 1: as we were mentioning rather downbeat about the economy's prospects

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Speaker 1: with US overnight, Bill Dudley, the New York Fed President,

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Speaker 1: told an audience in China, quote, on balance, I am

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Speaker 1: somewhat less confident than I was before. Partly this reflects

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Speaker 1: my assessment that uncertainty to the outlook has increased and

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Speaker 1: downside risks have crept up. You are the chairman of

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Speaker 1: the Council of Economic Advisors. When the President wants to

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Speaker 1: know if Alan Greenspan and Bill Dudley are right, he

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Speaker 1: asks Jason Furman. So what does Jason Furman tell him

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Speaker 1: in that situation? You know, I think there's certainly um

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Speaker 1: a heightened set of risks in the U. S economy

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Speaker 1: right now, and that's because the United States isn't an island.

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Speaker 1: We're part of a global economy. You've seen the weakest

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Speaker 1: global growth last year that we've seen since two thousand nine,

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Speaker 1: China's growth slipping, Brazil, Russia, the emerging markets falling even more,

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Speaker 1: and that creates complications and uncertainty for US. My best

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Speaker 1: guess is that our domestic strengths are going to power

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Speaker 1: us through that uncertainty. The domestic strengths that brought brought

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Speaker 1: us the best two years of job growth since the nineties,

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Speaker 1: the steepest decline the unemployment rate since the eighties, the

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Speaker 1: longest streak of private sector job growth. You know, ever,

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Speaker 1: we have optimistic consumers, they're getting raises. We have a

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Speaker 1: lot of potential in terms of residential investment, but you know,

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Speaker 1: the rest of the world is certainly going to be subtracting.

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Speaker 1: I want to know about the prison you use every

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Speaker 1: day as you advise the president and put together the

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Speaker 1: various documents that that is your responsibility. Is it in America?

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Speaker 1: Is it to use the math a Gaussian distribution of

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Speaker 1: one America or we could become where Alan Krueger would suggest,

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Speaker 1: almost two America's one gaining all the benefits of the

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Speaker 1: system and another America that's just not participating. Look, Tom,

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Speaker 1: you make a good point that for what most families

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Speaker 1: care about, it's not GDP growth or the size of

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Speaker 1: the economy as a whole. It's how they're doing. Now.

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Speaker 1: How they're doing is getting paid two and a half

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Speaker 1: percent more than they were getting paid twelve months ago.

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Speaker 1: That's the fastest growth we've seen in nominal wages since

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Speaker 1: the financial crisis, but it's not, you know, fast enough

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Speaker 1: that has macroeconomic ramifications at times at well. You know,

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Speaker 1: one of the reasons that our strategy for the recovery

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Speaker 1: focused on cutting taxes for the middle class, putting money

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Speaker 1: into things like food stamps and unemployment insurance was he

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Speaker 1: wanted money in the hands of the households who were

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Speaker 1: most likely to spend it. So I think you certainly

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Speaker 1: um need to think about distribution both to understand what

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Speaker 1: the economy is doing for people, but how it affects

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Speaker 1: the Ecomomi is our distribution now versus ten or twenty

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Speaker 1: years ago. The anger of so many saying the government

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Speaker 1: has too much the government is controlling our lives with redistribution.

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Speaker 1: Where do we fit in now versus previous Super Tuesdays?

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Speaker 1: If you look at statistics on the sheriff income going

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Speaker 1: to the top one per cent, the ratio of people

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Speaker 1: at the nine percentiles, the tenth percentile, any of the

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Speaker 1: standard metrics Genie cofficient and his standard metrics of inequality,

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Speaker 1: they've risen pretty steadily since um the late nine seventies.

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Speaker 1: The government has been a counterweight on that, something like

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Speaker 1: the Affordable Care Act. We cut taxes in this administration

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Speaker 1: for low income working families. If you have two children,

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Speaker 1: for every dollar you make, you get forty cents back

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Speaker 1: from the government. Near an income tax credit, you get

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Speaker 1: as much as another fifteen cents back in the child

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Speaker 1: tax credit. That's a real motivation to work. It helps

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Speaker 1: reward work, and that's the type of pro work, pro

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Speaker 1: growth strategy that we also reduces inequality. It wasn't your intention,

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Speaker 1: but the administration and Republicans backed into austerity the last

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Speaker 1: couple of years with the sequester programs. Austerity done, and

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Speaker 1: did it accomplish anything for the country and the economy.

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Speaker 1: I think we took some major fiscal steps to expand

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Speaker 1: the economy in two thousand nine. We followed up with

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Speaker 1: several more, but those ended prematurely when the economy still

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Speaker 1: needed help. Um we let the payroll tax cut go away.

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Speaker 1: Instead we put in place a sequester. One of the

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Speaker 1: things that I think is set the stage for stronger

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Speaker 1: growth is we reached a deal at the end of

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Speaker 1: last year that is going to accomplish of undoing this

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Speaker 1: of the President's proposal to undo the sequest stair, and

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Speaker 1: when we did that deal, you saw investment banks, other

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Speaker 1: forecasters raise their forecast for growth. Fiscal policy is going

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Speaker 1: to be a mild positive instead of subtracting from our

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Speaker 1: growth this year. Did those years of austerity, though, accomplish anything.

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Speaker 1: Now our deficit is in a better position. It's gone

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Speaker 1: from nearly ten percent of GDP down to two and

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Speaker 1: a half percent of GDP. You look forward, our debt

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Speaker 1: is in a more sustainable place. It's not all the

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Speaker 1: way there. There's more we need to do on both

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Speaker 1: the spending side and on the entitlement side, but we're

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Speaker 1: in a more sustainable fiscal situation. I think we could

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Speaker 1: have done it in a more gradual way. Though. Let

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Speaker 1: me ask you to to talk about this more for

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Speaker 1: our listeners, the idea of the deficit to GDP ratio.

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Speaker 1: We are still spending more than we take in. But

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Speaker 1: it's generally accepted among economists that that's okay if you're

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Speaker 1: a country as opposed to a person. That's right. Countries

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Speaker 1: are different kind trees live forever. Countries also used some

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Speaker 1: of that money to make investments in our future economic growth,

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Speaker 1: and so as an economist, what I like to look at,

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Speaker 1: is is our debt declining as a share of the economy?

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Speaker 1: Is it on a path to do that? And we're

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Speaker 1: close to that. We need to do more together over

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Speaker 1: the UCB has a limit how much could we spend?

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Speaker 1: We from the transition, talking to Tim Geitner, Larry Summers,

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Speaker 1: Peter Orzag we all set the goal that we should

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Speaker 1: try to be below three percent of g d P.

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Speaker 1: If you look at the President's latest budget, like most

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Speaker 1: of the budgets he's submitted to Congress, it would accomplish

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Speaker 1: that goal. We're gonna come back Jason Furman with us UH,

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Speaker 1: with the White House, and of course he's traps in

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Speaker 1: quietly around the political debate at the moment. We're gonna

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Speaker 1: come back with Dr Furman and touch a little bit

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Speaker 1: on some of the political themes that we've seen on

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Speaker 1: the Super Tuesday. We'll do that delicate. We will do

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Speaker 1: that delicately with respect. President has asked him to hope

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Speaker 1: and personally report the American Samola results very Jason Firman

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Speaker 1: will be up to do that coming up. Also, our

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Speaker 1: important conversation with Alan Greenspan. It was absolutely fascinating the

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Speaker 1: challenges the Chairman Greenspan scenes forward. Obviously on dot Frank

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Speaker 1: he was not constructive. And on entitlements, that's no surprise,

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Speaker 1: but it was an Ellen Greenspan greatly concerned about productivity

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Speaker 1: as well. Let me do a data check. We can

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Speaker 1: even do those in the Nation's Capital. Hard to believe

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Speaker 1: is that his futures up fifteen DAL features up one

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Speaker 1: sixteen oil with a three day nice rally West Texas

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Speaker 1: thirty four sixteen up forty cents, Brent Crewed thirty six

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Speaker 1: seventy one. Michael McKee and Tom Keane This Super Tuesday

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Speaker 1: from the Nation's Capital and Washington FM. Alright, let's check

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Speaker 1: out with Michael Byr. Now I'll get the latest world

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Speaker 1: in national headlines. Michael alike, Tom, thank you very much.

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Speaker 1: This could be a make or break day for the

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Speaker 1: remaining presidential candidates. Today is the Super Tuesday primaries. Bloomberg

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Speaker 1: will have NonStop Super Tuesday coverage throughout the night, starting

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Speaker 1: with a special edition with all due respect starting at

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Speaker 1: five pm Wall Street Time. President Obama will meet today

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Speaker 1: with the Senate Republicans who avowed to block his Supreme

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Speaker 1: Court nominee. A federal judge has ruled that the Justice

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Speaker 1: Department cannot force Apple to give the FBI access to

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Speaker 1: locked iPhone data in a New York drug case. The

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Speaker 1: Brooklyn ruling could affect a larger debate about privacy rights

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Speaker 1: versus national security. The ruling could pay the way in

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Speaker 1: Apple's fight against the California judges order that it creates

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Speaker 1: specialized software to help the FBI hack into an iPhone

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Speaker 1: linked to the San Bernardino terrorism investigation. Global News twenty

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Speaker 1: four hours a day, powered by our journalists by Michael Barr,

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Speaker 1: Mike Tom, Michael Barr, thanks so much again. Features up

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Speaker 1: fifteen down, features up one four. On this super Tuesday

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Speaker 1: from Washington, this is Bloomberg Surveillance. Bloomberg Surveillance brought to

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Speaker 1: you by Sector Spider e t S. Why by a

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Speaker 1: single stock when you can invest in the entire sector.

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