1 00:00:00,080 --> 00:00:12,960 Speaker 1: Yeah, welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:28,160 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Yeah, 5 00:00:33,080 --> 00:00:34,839 Speaker 1: we need to cross over to a man that his 6 00:00:34,960 --> 00:00:36,920 Speaker 1: career is taken in from the fellow Reserve to the 7 00:00:36,920 --> 00:00:39,200 Speaker 1: I M F and city group somewhere in between. Bill 8 00:00:39,280 --> 00:00:42,920 Speaker 1: Leake Milkin Institute Chief Economist William Lee joins us. Now, William, 9 00:00:42,960 --> 00:00:45,120 Speaker 1: great to catch out with you, sir, walk us through 10 00:00:45,120 --> 00:00:47,919 Speaker 1: the effect of a hurricane this size on the US economy. 11 00:00:47,960 --> 00:00:50,440 Speaker 1: We've kind of been through this before, just set us 12 00:00:50,520 --> 00:00:53,000 Speaker 1: up for what could come and how the data could 13 00:00:53,040 --> 00:00:55,400 Speaker 1: change over the coming quarters. We have. But this is 14 00:00:55,440 --> 00:00:57,560 Speaker 1: such a historic proportion, right, I mean, it seems as 15 00:00:57,560 --> 00:01:01,120 Speaker 1: though the hurricane sizes and intensity have gone up over 16 00:01:01,120 --> 00:01:03,560 Speaker 1: the years, and and and what's different about this one 17 00:01:03,560 --> 00:01:06,120 Speaker 1: is that it is striking a place that normally gets hurricanes, 18 00:01:06,160 --> 00:01:08,360 Speaker 1: but not as frequently as say Florida. Florida is very 19 00:01:08,360 --> 00:01:10,640 Speaker 1: accustomed to that, and I think they they have infrastructure 20 00:01:10,640 --> 00:01:12,240 Speaker 1: and they're well set up that people are used to 21 00:01:12,480 --> 00:01:15,240 Speaker 1: dealing with this. North Carolina gets one in a couple 22 00:01:15,240 --> 00:01:18,240 Speaker 1: of decades, and so this is where the tragedy maybe 23 00:01:18,360 --> 00:01:21,319 Speaker 1: that people just don't take the warnings to heat. Uh. 24 00:01:21,360 --> 00:01:24,240 Speaker 1: And then the follow up though, is that the disaster 25 00:01:24,360 --> 00:01:27,320 Speaker 1: that takes place is always followed by the rebuilding, and 26 00:01:27,360 --> 00:01:30,720 Speaker 1: that's where the data would show some surge in activity, 27 00:01:30,920 --> 00:01:33,600 Speaker 1: especially for construction, and so that in some ways will 28 00:01:33,640 --> 00:01:36,759 Speaker 1: do some good for the statistics over the next quarter 29 00:01:36,840 --> 00:01:39,720 Speaker 1: or so beyond the hurricane. But the tragedy is something 30 00:01:39,760 --> 00:01:41,840 Speaker 1: that that certainly will not be made up for by 31 00:01:41,880 --> 00:01:43,680 Speaker 1: that extra activity. I've got to start a day this 32 00:01:43,800 --> 00:01:46,040 Speaker 1: morning that we've had in the US economy. Wow, just 33 00:01:46,160 --> 00:01:49,360 Speaker 1: a wow number from the U s Small business optimism rate. 34 00:01:49,560 --> 00:01:51,440 Speaker 1: But I don't know if you saw it, but it 35 00:01:51,560 --> 00:01:54,280 Speaker 1: is the highest since tracking began in ninety four. It's 36 00:01:54,280 --> 00:01:58,600 Speaker 1: exceeded the prime peak back in September. Is this a 37 00:01:58,680 --> 00:02:01,760 Speaker 1: boom economy now, Bill Well, no questions. The boom economy, 38 00:02:01,800 --> 00:02:04,320 Speaker 1: if the question is, will continue and and that that's 39 00:02:04,320 --> 00:02:06,120 Speaker 1: surge in small business. I think it's a really good 40 00:02:06,160 --> 00:02:09,560 Speaker 1: song because it's followed up by real actions small businesses 41 00:02:09,639 --> 00:02:12,160 Speaker 1: have been taking out loans, they have been expanding their businesses, 42 00:02:12,360 --> 00:02:14,840 Speaker 1: they've been trying to hire people, and that means that 43 00:02:14,960 --> 00:02:17,839 Speaker 1: this has legs and as opposed to just soft data 44 00:02:17,919 --> 00:02:20,160 Speaker 1: that goes away and turns around very quickly. Well, yeah, 45 00:02:20,160 --> 00:02:21,640 Speaker 1: you know, I haven't brought it up yet, but here 46 00:02:21,720 --> 00:02:25,480 Speaker 1: we are, fifteen days away from September twenty six. If 47 00:02:25,560 --> 00:02:29,120 Speaker 1: we're seeing this boom economy, why can't the FED doing 48 00:02:29,360 --> 00:02:32,000 Speaker 1: Arthur Burns and do more than a quarter of a 49 00:02:32,120 --> 00:02:36,720 Speaker 1: point rate increase? Are they really wedded to this measured 50 00:02:36,800 --> 00:02:40,200 Speaker 1: green spanning and approach. Well, they've they made the markets 51 00:02:40,240 --> 00:02:42,240 Speaker 1: accustomed to that, right. But I think what you're gonna 52 00:02:42,240 --> 00:02:44,040 Speaker 1: see at the turn of the year is that because 53 00:02:44,160 --> 00:02:47,320 Speaker 1: Paul has announced a press conference every meeting, you're gonna 54 00:02:47,320 --> 00:02:50,600 Speaker 1: start seeing I suspect the capacity to front load a 55 00:02:50,720 --> 00:02:53,280 Speaker 1: lot of these rate increases, and that's what I'm anticipated. 56 00:02:54,240 --> 00:02:56,560 Speaker 1: The data really show up to be a strong going 57 00:02:56,680 --> 00:02:58,959 Speaker 1: going into January February, We're gonna have more than just 58 00:02:59,160 --> 00:03:01,280 Speaker 1: one every other meeting. John, I think this is a 59 00:03:01,360 --> 00:03:03,520 Speaker 1: huge deal. Yeah, I mean this whole new press cart. 60 00:03:03,560 --> 00:03:05,040 Speaker 1: I mean, I don't want the key things, but to me, 61 00:03:05,120 --> 00:03:06,600 Speaker 1: it's a huge deal. We can get mix few on 62 00:03:06,639 --> 00:03:09,000 Speaker 1: it later. I think the subcomponents of the n f 63 00:03:09,080 --> 00:03:11,520 Speaker 1: I based survey this morning was just amazing. As Bill 64 00:03:11,600 --> 00:03:16,840 Speaker 1: pointed out, job creation plans, unfilled job openings, new records. 65 00:03:17,160 --> 00:03:19,480 Speaker 1: When we start having this conversation about where does wage 66 00:03:19,520 --> 00:03:22,160 Speaker 1: growth come from, I mean, the data just keep spelling 67 00:03:22,200 --> 00:03:24,360 Speaker 1: it out built. We must be close to that moment, 68 00:03:24,440 --> 00:03:26,160 Speaker 1: and I feel like we've been saying that for so long, 69 00:03:26,560 --> 00:03:29,119 Speaker 1: but they take to just keep screaming it. Doesn't it. John. 70 00:03:29,200 --> 00:03:32,160 Speaker 1: The one thing that the most commentators are overlooking, including 71 00:03:32,200 --> 00:03:34,840 Speaker 1: your guests, is that because you've had a lot of investment, 72 00:03:35,360 --> 00:03:38,400 Speaker 1: firms are substituting capital for labor. They don't need to 73 00:03:38,480 --> 00:03:40,880 Speaker 1: hire as much be close to building the machines to 74 00:03:41,040 --> 00:03:43,720 Speaker 1: do more and make labor more productive. What they're not 75 00:03:43,840 --> 00:03:46,520 Speaker 1: doing is giving increases in real wage to match the 76 00:03:46,560 --> 00:03:49,480 Speaker 1: potential increase of productivity that's going into profit margins, and 77 00:03:49,600 --> 00:03:51,560 Speaker 1: that in some ways is feeding that stock market broom 78 00:03:51,600 --> 00:03:54,400 Speaker 1: that we've all been experiencing. Bill. One more question. We 79 00:03:54,480 --> 00:03:56,400 Speaker 1: mentioned this earlier, but I think it needs a redux. 80 00:03:56,560 --> 00:04:00,840 Speaker 1: What's the gradient here towards a normal economy? Is it 81 00:04:01,200 --> 00:04:04,320 Speaker 1: a gradient to early two thousand nineteen or can this 82 00:04:04,680 --> 00:04:08,400 Speaker 1: economy feed on itself and stay sustained? You know, I 83 00:04:08,600 --> 00:04:11,160 Speaker 1: I think I'm not a supply sider, had never been 84 00:04:11,200 --> 00:04:14,040 Speaker 1: in my professional life, but I'm starting to see the 85 00:04:14,200 --> 00:04:18,479 Speaker 1: impact of the greater investment taking hold and be able 86 00:04:18,520 --> 00:04:20,719 Speaker 1: to give us a glyde path where we are starting 87 00:04:20,760 --> 00:04:22,840 Speaker 1: to see above try and growth for longer and longer. 88 00:04:23,120 --> 00:04:26,520 Speaker 1: Remember historicis is the word that was always the European economies, right, 89 00:04:26,720 --> 00:04:29,840 Speaker 1: but now we know historiesis applies to the US and 90 00:04:29,920 --> 00:04:32,880 Speaker 1: as we grow faster and faster, potential growth is also 91 00:04:32,960 --> 00:04:35,040 Speaker 1: gonna start growing faster and faster. And good morning to 92 00:04:35,040 --> 00:04:37,920 Speaker 1: Olivia Blonchard with his important essay a few days ago 93 00:04:37,960 --> 00:04:42,920 Speaker 1: and Laurence Summers for their academic work Unsustained unemployment, Billy 94 00:04:43,000 --> 00:04:45,880 Speaker 1: William Lee with us with the Milk and Institute. Thank you. 95 00:05:00,600 --> 00:05:02,800 Speaker 1: We get an Apple update. We felt it was important 96 00:05:02,839 --> 00:05:05,719 Speaker 1: to look at these market leaders in Amazon and Apple 97 00:05:05,800 --> 00:05:08,400 Speaker 1: and we can do that with Walter pisk A bt 98 00:05:08,760 --> 00:05:11,560 Speaker 1: I G Walter Thy hold Cell. Where are you right 99 00:05:11,640 --> 00:05:16,920 Speaker 1: now on Apple? Um? You know the stock has been 100 00:05:17,400 --> 00:05:21,200 Speaker 1: has obviously been performing well as it typically does ahead 101 00:05:21,200 --> 00:05:25,119 Speaker 1: of an iPhone launch. I would I guess warn people 102 00:05:25,200 --> 00:05:27,240 Speaker 1: that the day of the launch itself, which I guess 103 00:05:27,320 --> 00:05:30,520 Speaker 1: is expect tomorrow or the announcement UM, the stock doesn't 104 00:05:30,520 --> 00:05:34,120 Speaker 1: typically fare that well. UM, But rather than being focused 105 00:05:34,160 --> 00:05:36,039 Speaker 1: on the near term, just looking at the long term 106 00:05:36,839 --> 00:05:40,640 Speaker 1: or at least in intermediate term prospects of earnings growth 107 00:05:40,680 --> 00:05:42,440 Speaker 1: for the company, that's the reason to buy the stock. 108 00:05:42,600 --> 00:05:45,160 Speaker 1: Have you done us some of the parts analysis? If 109 00:05:45,200 --> 00:05:47,600 Speaker 1: you ever, if you actually try to figure out what 110 00:05:48,400 --> 00:05:53,600 Speaker 1: services slash iTunes is actually worth, or the core franchise 111 00:05:53,839 --> 00:05:56,840 Speaker 1: is worth, or the peripheral is worth. Have you done 112 00:05:56,920 --> 00:05:59,720 Speaker 1: us some of the parts. We haven't done that yet, 113 00:06:00,080 --> 00:06:02,800 Speaker 1: but it's it's interesting because it's so early stage. If 114 00:06:02,839 --> 00:06:06,120 Speaker 1: you look at the number of let's say, active iPhone 115 00:06:06,279 --> 00:06:11,160 Speaker 1: users that are out there, UM Creative Strategies estimates that 116 00:06:11,200 --> 00:06:15,679 Speaker 1: about eight hundred million, eight million. There's only three million 117 00:06:15,760 --> 00:06:19,320 Speaker 1: people today that are paying is a regular subscription. So 118 00:06:19,400 --> 00:06:21,880 Speaker 1: we're still early days in terms of the number of 119 00:06:21,960 --> 00:06:27,720 Speaker 1: customers paying regular services. And then those services themselves per customer, 120 00:06:27,839 --> 00:06:30,440 Speaker 1: which in you know, in the service industry that's called 121 00:06:30,600 --> 00:06:33,760 Speaker 1: r poo. UM can probably go up as they layer 122 00:06:33,839 --> 00:06:37,640 Speaker 1: on new opportunities and once we get more visibility on 123 00:06:37,760 --> 00:06:40,760 Speaker 1: that and see a better understanding of margins on that, 124 00:06:40,839 --> 00:06:43,200 Speaker 1: then you can think about that in terms of a 125 00:06:43,279 --> 00:06:49,520 Speaker 1: true service company type margins. John, I just that we're 126 00:06:49,640 --> 00:06:53,040 Speaker 1: really switching to Apple TV at home, and the sign 127 00:06:53,160 --> 00:06:56,520 Speaker 1: up for the service industries is mr Pizak puts it 128 00:06:56,760 --> 00:07:01,440 Speaker 1: is the small value of an island g d Pinteresting. Interesting. Well, 129 00:07:01,520 --> 00:07:03,880 Speaker 1: so we spoke to a value invested yesterday who considers 130 00:07:03,880 --> 00:07:06,200 Speaker 1: Apple to be value, which is interesting because they have 131 00:07:06,279 --> 00:07:09,240 Speaker 1: this really growth the services business, and I think the 132 00:07:09,480 --> 00:07:12,840 Speaker 1: continued sort of complication amongst some investors to understand what 133 00:07:12,960 --> 00:07:15,280 Speaker 1: kind of multiple to apply to this business this company. 134 00:07:15,960 --> 00:07:18,840 Speaker 1: Where is that multiple Walter in your mind? Well, for 135 00:07:19,000 --> 00:07:21,480 Speaker 1: years we've talked about this as a value name because 136 00:07:21,480 --> 00:07:23,880 Speaker 1: it's been a discount to the SMP five. But now 137 00:07:24,000 --> 00:07:25,640 Speaker 1: we're kind of caught up to that, right, it's more 138 00:07:25,680 --> 00:07:27,920 Speaker 1: a parity. So then you're saying, Okay, if it's growing 139 00:07:28,680 --> 00:07:32,560 Speaker 1: faster than the market, and the margins are high and sustainable, 140 00:07:33,200 --> 00:07:36,280 Speaker 1: then that could argue for some type of premium to 141 00:07:36,360 --> 00:07:39,600 Speaker 1: wherever the market multiple or the SMP trading in at 142 00:07:39,600 --> 00:07:42,040 Speaker 1: the moment. And look, part of the earnings growth, let's 143 00:07:42,040 --> 00:07:45,360 Speaker 1: be clear, is the amount of cash that they have, 144 00:07:45,640 --> 00:07:48,040 Speaker 1: and cash generation enables them to buy a lot of 145 00:07:48,120 --> 00:07:51,640 Speaker 1: stock back, so that turns what might look like low 146 00:07:51,840 --> 00:07:55,120 Speaker 1: growth of net income into double digit earnings growth. So 147 00:07:55,200 --> 00:07:57,240 Speaker 1: it's kind of like two halfs to the Apple year. 148 00:07:57,320 --> 00:07:59,400 Speaker 1: The first half is when we get a real sort 149 00:07:59,440 --> 00:08:02,200 Speaker 1: of understand to get the buyback program, and the second 150 00:08:02,240 --> 00:08:05,080 Speaker 1: half is the product range. What's the most important half 151 00:08:05,160 --> 00:08:08,200 Speaker 1: right now, Walter, Well, right now going in to see 152 00:08:08,240 --> 00:08:11,360 Speaker 1: what this UM, what these new products are gonna look like, UM, 153 00:08:11,480 --> 00:08:14,240 Speaker 1: and what other at least what the new iPhones will 154 00:08:14,280 --> 00:08:15,960 Speaker 1: look like and what they're gonna do, and and what 155 00:08:16,040 --> 00:08:18,960 Speaker 1: other products are going to get refreshed to me. The 156 00:08:19,120 --> 00:08:22,360 Speaker 1: larger issue though, is, you know, we're coming off multiple 157 00:08:22,480 --> 00:08:25,200 Speaker 1: years where people have been holding onto their smartphones and 158 00:08:25,240 --> 00:08:28,320 Speaker 1: their iPhones longer than they ever have UM, and that 159 00:08:28,400 --> 00:08:32,280 Speaker 1: could inflect So the iPhone unit growth really hasn't changed 160 00:08:32,400 --> 00:08:34,520 Speaker 1: much in the past three years. They've relied heavily on 161 00:08:35,040 --> 00:08:38,000 Speaker 1: getting you to pay more for the phones that you're buying. 162 00:08:38,120 --> 00:08:41,079 Speaker 1: I didn't know. I mean, if you went back to fifteen, 163 00:08:41,160 --> 00:08:44,160 Speaker 1: we probably sold more iPhones in twentyen than we did. 164 00:08:45,200 --> 00:08:46,800 Speaker 1: So a lot of times people are trying to craft 165 00:08:46,880 --> 00:08:49,439 Speaker 1: a negative thesis saying like, oh, the iPhone is not 166 00:08:49,480 --> 00:08:51,880 Speaker 1: growing anymore. I'm like, okay, well that thesis is about 167 00:08:51,920 --> 00:09:01,360 Speaker 1: three years old. Up from cash phones. John vet Bill 168 00:09:01,520 --> 00:09:06,960 Speaker 1: has a vet Bill has a highest SP that's for sure. Um, well, 169 00:09:06,960 --> 00:09:09,800 Speaker 1: it's what is the SP situation at the moment, and 170 00:09:09,920 --> 00:09:11,520 Speaker 1: what do you expect the new product mixed to do 171 00:09:11,960 --> 00:09:15,160 Speaker 1: when it's launched tomorrow. Do we get an SP lift? Well, 172 00:09:15,320 --> 00:09:18,080 Speaker 1: five years ago the SP was the best six hundred dollars. 173 00:09:18,160 --> 00:09:22,040 Speaker 1: Now we're paying seven our phones, so we may not 174 00:09:22,200 --> 00:09:24,640 Speaker 1: get the same lift going forward that we did this 175 00:09:24,800 --> 00:09:28,560 Speaker 1: year with the launch of the iPhone and um but again, 176 00:09:28,960 --> 00:09:31,559 Speaker 1: we've had multiple years where people the the life cycle 177 00:09:31,600 --> 00:09:34,800 Speaker 1: has extended. So if the life cycle stopped extending, if 178 00:09:34,840 --> 00:09:37,640 Speaker 1: people start upgraating their phones just a little bit more, 179 00:09:37,679 --> 00:09:40,640 Speaker 1: you're gonna get some level of unit growth, maybe some 180 00:09:40,840 --> 00:09:43,599 Speaker 1: ASP growth. Okay, So even if the iPhone business is 181 00:09:43,679 --> 00:09:46,640 Speaker 1: just sustaining and generating a ton of free castle at 182 00:09:46,640 --> 00:09:49,520 Speaker 1: those high margins, then we can get back to this 183 00:09:49,640 --> 00:09:52,520 Speaker 1: purpoces business grow. Walter, I don't have the equation in 184 00:09:52,600 --> 00:09:54,800 Speaker 1: front of me. Taylor Riggs has it memorized because she 185 00:09:54,920 --> 00:09:57,760 Speaker 1: just passed the c f A. But the annuity function 186 00:09:58,040 --> 00:10:01,679 Speaker 1: is different than the normal revenue fund. How close is 187 00:10:01,880 --> 00:10:06,720 Speaker 1: Apple to where the cell side has to start doing 188 00:10:06,840 --> 00:10:12,400 Speaker 1: the annuity math of those monthly payments everybody's paying. Where 189 00:10:12,440 --> 00:10:17,120 Speaker 1: we go from revenue from lumpsome purchase to where we're 190 00:10:17,160 --> 00:10:21,120 Speaker 1: all up on monthly plans that read like an insurance contract. 191 00:10:22,120 --> 00:10:24,000 Speaker 1: I mean, several years ago, there was some investors that 192 00:10:24,040 --> 00:10:26,760 Speaker 1: were pushing Apple to move to that and saying Apple 193 00:10:26,760 --> 00:10:29,679 Speaker 1: should charge fifty a month and and just give the 194 00:10:29,760 --> 00:10:32,679 Speaker 1: customer the ability to upgrade their phone every couple of Yes, 195 00:10:33,040 --> 00:10:35,640 Speaker 1: what I'm doing, exceptisode fifty a month. I got eight phones. 196 00:10:35,960 --> 00:10:38,320 Speaker 1: I mean vet bills fee alone is forty two dollars 197 00:10:38,360 --> 00:10:42,760 Speaker 1: a month. Absolutely, and and and conceptually that's the way 198 00:10:42,800 --> 00:10:45,440 Speaker 1: people should look at it, because iPhone customers are very 199 00:10:45,520 --> 00:10:47,559 Speaker 1: loyal and they come back to the same phone. You know, 200 00:10:47,679 --> 00:10:51,440 Speaker 1: every everybody is the sell side figuring in the value, 201 00:10:52,240 --> 00:10:57,280 Speaker 1: the terminal value of that annuity equation that that has 202 00:10:57,320 --> 00:10:59,800 Speaker 1: definitely not happened yet, because if it did, then the 203 00:11:00,040 --> 00:11:03,040 Speaker 1: multiple relative to where the market is. If people looked 204 00:11:03,040 --> 00:11:05,600 Speaker 1: at this as a recurring revenue business or an annuity 205 00:11:05,679 --> 00:11:08,920 Speaker 1: business at the high margins that they're generating, UM would 206 00:11:08,920 --> 00:11:10,559 Speaker 1: probably get a higher value than it does in the 207 00:11:10,600 --> 00:11:13,240 Speaker 1: market today. What you just heard their folks, and I 208 00:11:13,320 --> 00:11:16,200 Speaker 1: don't have an opinion by Old Cell, but John Ferrell, 209 00:11:16,280 --> 00:11:21,080 Speaker 1: what Mr piss just said there is critical mathematics significant. 210 00:11:21,240 --> 00:11:24,320 Speaker 1: Well to final question for you, Trite, the companies come 211 00:11:24,320 --> 00:11:26,000 Speaker 1: out in the last week and said that tarists are 212 00:11:26,000 --> 00:11:28,280 Speaker 1: going to hit the prices of a range of products. 213 00:11:28,320 --> 00:11:30,160 Speaker 1: Do you see this as material or does this just 214 00:11:30,200 --> 00:11:33,120 Speaker 1: shape some the mood music. I mean, look, I think 215 00:11:33,160 --> 00:11:35,880 Speaker 1: there's a lot of consumer life products, electronic products that 216 00:11:36,000 --> 00:11:38,160 Speaker 1: have lower margins that are going to be more impact 217 00:11:38,280 --> 00:11:40,200 Speaker 1: if they have to increase price. At least Apple has 218 00:11:40,240 --> 00:11:43,440 Speaker 1: got some excessive margins that they could use if they 219 00:11:43,520 --> 00:11:45,800 Speaker 1: choose to cushion the blow. And it would happen if 220 00:11:45,840 --> 00:11:49,520 Speaker 1: they did increase prices based on some of these these tariffs. UM, 221 00:11:49,760 --> 00:11:52,199 Speaker 1: it would happen at a time when everyone knows and 222 00:11:52,240 --> 00:11:55,679 Speaker 1: they wouldn't take a brand hit from just increasing the 223 00:11:55,760 --> 00:11:59,000 Speaker 1: prices and their customer. But the other thing to consider is, look, 224 00:11:59,040 --> 00:12:00,959 Speaker 1: a lot of consumers may look at this and say 225 00:12:01,040 --> 00:12:03,920 Speaker 1: this might be just kind of near term threatening and 226 00:12:04,040 --> 00:12:08,439 Speaker 1: jawboning by these countries and they could delay some purchases 227 00:12:08,520 --> 00:12:11,600 Speaker 1: as people wait for price increases to fade in, thinking 228 00:12:11,679 --> 00:12:14,199 Speaker 1: that it would be a near term impact on their 229 00:12:14,240 --> 00:12:16,720 Speaker 1: on their prices. And then after the trade war was resolved, 230 00:12:17,440 --> 00:12:19,800 Speaker 1: um that maybe they could go back to a cheaper price. 231 00:12:19,880 --> 00:12:22,800 Speaker 1: And you know that you could have some push out 232 00:12:22,840 --> 00:12:25,840 Speaker 1: of purchases if a situation like that occurred. And again 233 00:12:25,880 --> 00:12:27,520 Speaker 1: this is for not for iPhones, right A lot of 234 00:12:27,559 --> 00:12:29,920 Speaker 1: these things that were labeled are there things like the 235 00:12:30,000 --> 00:12:33,160 Speaker 1: iPod or excuse me, the AirPods and and some of 236 00:12:33,200 --> 00:12:35,800 Speaker 1: the accessory products as opposed to the core product for Apple. 237 00:12:36,440 --> 00:12:38,599 Speaker 1: What right to catch up with you ahead of that 238 00:12:38,600 --> 00:12:41,960 Speaker 1: product launched tomorrow? Want a bat i G Research aund 239 00:12:42,000 --> 00:12:56,800 Speaker 1: list and managing director. I am here with my co 240 00:12:56,960 --> 00:13:00,360 Speaker 1: host and colleague Lisa abrahma Witz. Then always great to 241 00:13:00,400 --> 00:13:03,679 Speaker 1: be with you, have you here, Thank you. Let's bring 242 00:13:03,720 --> 00:13:07,040 Speaker 1: in market Patel right now, Managing director, senior portfolio manager 243 00:13:07,120 --> 00:13:11,400 Speaker 1: for Wells Capital Management, Margi Patel. Let's talk about high 244 00:13:11,480 --> 00:13:14,880 Speaker 1: yield debt right now? What are what's the outlook for 245 00:13:15,040 --> 00:13:18,160 Speaker 1: high yield debt? Given this uh sort of back and 246 00:13:18,320 --> 00:13:21,880 Speaker 1: forth with interest rates and now we see pressure on 247 00:13:21,960 --> 00:13:25,240 Speaker 1: emerging markets. What happens to high yield debt when that 248 00:13:25,400 --> 00:13:28,920 Speaker 1: money tries to find another home. Well, I think US 249 00:13:29,320 --> 00:13:33,640 Speaker 1: domestic ki yield market looks in tremendous shape. It's reflected 250 00:13:33,760 --> 00:13:38,000 Speaker 1: in the very low defaults less an extra yield advantage 251 00:13:38,040 --> 00:13:40,600 Speaker 1: around three and a half percentage points, which is near 252 00:13:40,679 --> 00:13:43,000 Speaker 1: the narrow shows you there's no stress. I think the 253 00:13:43,080 --> 00:13:46,320 Speaker 1: market is clearly identifying the risk and emerging market bonds 254 00:13:46,760 --> 00:13:50,960 Speaker 1: versus US very little effect. Okay, so very little effects. 255 00:13:51,000 --> 00:13:53,520 Speaker 1: Stay focused on the United States. Does this also mean 256 00:13:53,600 --> 00:13:59,880 Speaker 1: that earnings for US companies are rising faster than interest rates? Yes, 257 00:14:00,080 --> 00:14:02,760 Speaker 1: they have been, and I expect that they will continue. 258 00:14:02,880 --> 00:14:06,920 Speaker 1: So that means pretty bad positive backdrop property At the margin, 259 00:14:07,040 --> 00:14:09,400 Speaker 1: some companies may feel as we go into next year 260 00:14:09,720 --> 00:14:12,840 Speaker 1: a little bit of diminution in their cash flow because 261 00:14:13,120 --> 00:14:16,760 Speaker 1: most of the emerging markets have a growth rate much 262 00:14:16,840 --> 00:14:19,520 Speaker 1: lower than the US growth rate. You know, one thing 263 00:14:19,560 --> 00:14:22,840 Speaker 1: that I'm struck by, especially as short term yields in 264 00:14:22,880 --> 00:14:26,320 Speaker 1: the US rise to new post crisis highs today ahead 265 00:14:26,360 --> 00:14:29,480 Speaker 1: of the auctions later today and later this week, I 266 00:14:29,600 --> 00:14:32,520 Speaker 1: have to wonder, you know, is the FED raising rates 267 00:14:32,600 --> 00:14:35,120 Speaker 1: too quickly or too slowly? At this point. How does 268 00:14:35,160 --> 00:14:36,880 Speaker 1: that affect your view of markets? And I say this 269 00:14:37,280 --> 00:14:40,880 Speaker 1: because Bob Diamond, the former head of Barclays, spoke with 270 00:14:40,960 --> 00:14:43,800 Speaker 1: Francine Laquix Bloomberg Television this morning and was saying that 271 00:14:44,080 --> 00:14:48,480 Speaker 1: he is really concerned that the FED hasn't raised rates faster, 272 00:14:49,440 --> 00:14:53,440 Speaker 1: creating less ammunition for them during the next downturn. How 273 00:14:53,520 --> 00:14:55,320 Speaker 1: did it come in coming in in this I mean, 274 00:14:55,400 --> 00:14:58,640 Speaker 1: do you think that's that's the case? I think that's 275 00:14:58,680 --> 00:15:01,480 Speaker 1: looking at the history book, looking at past cycles rather 276 00:15:01,520 --> 00:15:04,680 Speaker 1: than looking at the fundamental changes in the financial market 277 00:15:05,080 --> 00:15:08,600 Speaker 1: for this credit cycle. Number one, the fit is very 278 00:15:08,680 --> 00:15:11,720 Speaker 1: transparent and what they're doing number two, we really don't 279 00:15:11,760 --> 00:15:15,160 Speaker 1: see the classic inflation pressure we saw another cycles. The 280 00:15:15,240 --> 00:15:17,920 Speaker 1: fact that our yell curve is almost flapped doesn't bother 281 00:15:18,040 --> 00:15:20,920 Speaker 1: me at all. It isn't a signal of credit tightness 282 00:15:20,960 --> 00:15:22,440 Speaker 1: we used to see. And when you look at other 283 00:15:22,520 --> 00:15:27,040 Speaker 1: measures of tightness and liquidity, whether it's yelled bonds unlike 284 00:15:27,080 --> 00:15:30,440 Speaker 1: we just talked about, or in what bank lending officers 285 00:15:30,520 --> 00:15:33,320 Speaker 1: are doing cutting back on loans, we just aren't seeing it. 286 00:15:33,400 --> 00:15:36,720 Speaker 1: So I'd say they're doing it just about right. Margie 287 00:15:36,760 --> 00:15:40,800 Speaker 1: and your expertise with the world of bonds. One of 288 00:15:40,880 --> 00:15:44,240 Speaker 1: the funds that you helped manage, the Wells Fargo Diversified 289 00:15:44,320 --> 00:15:48,360 Speaker 1: Capital Fund, that has really performed well. It's up seven 290 00:15:48,400 --> 00:15:51,880 Speaker 1: and a half percent so far this year. It's aggressive. 291 00:15:52,440 --> 00:15:55,280 Speaker 1: Do you believe that that will continue to outperform some 292 00:15:55,440 --> 00:16:00,200 Speaker 1: of the other less aggressive conservative funds. Uh? Well, I 293 00:16:00,320 --> 00:16:03,640 Speaker 1: consider the that fund actually a conservative fund in the 294 00:16:03,680 --> 00:16:06,680 Speaker 1: style that I've been managing it. It's taken advantage of 295 00:16:07,120 --> 00:16:10,240 Speaker 1: what marked this cheaper the bond market, especially high yield 296 00:16:10,360 --> 00:16:13,400 Speaker 1: or equities, and I think equities will continue to outperform 297 00:16:13,480 --> 00:16:16,520 Speaker 1: bonds over say the next six months, in particular, maybe 298 00:16:16,560 --> 00:16:21,400 Speaker 1: the next twelve months. Al Right, So going forward, I 299 00:16:21,480 --> 00:16:23,800 Speaker 1: guess I'm wondering, given the fact that we are seeing 300 00:16:23,840 --> 00:16:26,200 Speaker 1: weakness and emerging markets and it has not led over 301 00:16:26,400 --> 00:16:28,800 Speaker 1: to the high bond market. Given the fact that you 302 00:16:28,920 --> 00:16:31,080 Speaker 1: think that the US is strong and that the Federal 303 00:16:31,080 --> 00:16:33,960 Speaker 1: Reserve is raising rates at an appropriate rate, where is 304 00:16:34,080 --> 00:16:37,480 Speaker 1: the best risk adjusted return right now in your opinion 305 00:16:38,400 --> 00:16:41,280 Speaker 1: in common stocks with US companies and continues to be 306 00:16:41,360 --> 00:16:44,440 Speaker 1: the best place to be uh. And and also looking 307 00:16:44,480 --> 00:16:47,120 Speaker 1: at growth east to be emerging markets. The idea case 308 00:16:47,240 --> 00:16:49,880 Speaker 1: for that was they were growing so much faster, two 309 00:16:49,960 --> 00:16:52,800 Speaker 1: or three times faster than the US. Now, the US 310 00:16:52,920 --> 00:16:55,800 Speaker 1: is actually one of the strongest growing economies in the world, 311 00:16:56,360 --> 00:16:59,360 Speaker 1: and the most emerging markets are slogging along either recession 312 00:16:59,520 --> 00:17:01,840 Speaker 1: or very a single digit levels. So that's just to me, 313 00:17:01,960 --> 00:17:04,440 Speaker 1: that's where the best opportunity is market. Do you think 314 00:17:04,480 --> 00:17:08,159 Speaker 1: that a lot of riskier corporate debt investors right now 315 00:17:08,320 --> 00:17:12,960 Speaker 1: have just become stuck investors? Uh? No, I don't. I 316 00:17:13,040 --> 00:17:16,880 Speaker 1: think that the looking at the bond market intrinsically looks 317 00:17:17,040 --> 00:17:19,600 Speaker 1: very good. We aren't seeing a lot of supply, and 318 00:17:19,680 --> 00:17:21,879 Speaker 1: by the way, supplies down compared to the peaks of 319 00:17:21,880 --> 00:17:24,640 Speaker 1: the last couple of years ago. We're not seeing companies 320 00:17:24,720 --> 00:17:27,400 Speaker 1: borrow money in the junk bond market for crazy purposes. 321 00:17:27,800 --> 00:17:30,480 Speaker 1: Over half of what they're borrowing is to refinance other debt, 322 00:17:30,520 --> 00:17:35,320 Speaker 1: improve their their their balance sheet, and like investment grade companies, 323 00:17:35,400 --> 00:17:39,200 Speaker 1: they also have a pretty good cash flow outlook. We're 324 00:17:39,240 --> 00:17:43,560 Speaker 1: speaking with Margie Patel, Managing director, senior portfolio manager for 325 00:17:43,640 --> 00:17:46,800 Speaker 1: Wells Capital Management. In just a few moments, we will 326 00:17:46,840 --> 00:17:48,720 Speaker 1: be going to the Pentagon to take a moment of 327 00:17:48,800 --> 00:17:52,120 Speaker 1: silence and observance of the time that American Airlines Flight 328 00:17:52,560 --> 00:17:56,760 Speaker 1: seven seven obstruct the Pentagon. Vice President Pence as well 329 00:17:56,840 --> 00:18:01,240 Speaker 1: as Secretary of Defense Matters are there and just clely, Uh, Markie, 330 00:18:02,480 --> 00:18:04,879 Speaker 1: is there a risk that we're not paying attention to 331 00:18:05,080 --> 00:18:09,520 Speaker 1: right now? I think in the US the risks are 332 00:18:09,760 --> 00:18:13,120 Speaker 1: pretty low for the equity market and for the economy 333 00:18:13,200 --> 00:18:16,280 Speaker 1: as a whole. I think there's risk in the emerging market. 334 00:18:16,560 --> 00:18:19,359 Speaker 1: How soon that might come and impact the US, I 335 00:18:19,440 --> 00:18:21,800 Speaker 1: think is something we can't really say at this point 336 00:18:22,160 --> 00:18:24,199 Speaker 1: if in fact it does have a big negative effect. 337 00:18:24,520 --> 00:18:26,320 Speaker 1: I want to thank you very much for spending time 338 00:18:26,400 --> 00:18:29,959 Speaker 1: with US market. Patel is Managing Director Senior portfolio manager 339 00:18:30,320 --> 00:18:50,080 Speaker 1: for Wells Capital Management. The next guest is most appropriate 340 00:18:50,400 --> 00:18:53,440 Speaker 1: for this day. Uh. He is the former Governor of 341 00:18:53,560 --> 00:18:57,240 Speaker 1: New Jersey, Tom Keene. He is perhaps more widely known 342 00:18:57,400 --> 00:19:02,639 Speaker 1: around the world as the airmen of the National Commission 343 00:19:02,800 --> 00:19:07,080 Speaker 1: on Terrorist Attacks upon the United States. It's more informally 344 00:19:07,160 --> 00:19:11,159 Speaker 1: known as the nine eleven Commission. Tom Keane, Governor Keen, 345 00:19:11,280 --> 00:19:13,879 Speaker 1: thank you very much for being with us. You are 346 00:19:13,880 --> 00:19:18,520 Speaker 1: appointed by President George W. Bush and you served as 347 00:19:18,600 --> 00:19:22,399 Speaker 1: the chairman of the nine eleven Commission. What can you 348 00:19:22,600 --> 00:19:27,000 Speaker 1: tell US based on your experience, what do you believe 349 00:19:27,080 --> 00:19:30,480 Speaker 1: has changed in order to battle these kinds of threats 350 00:19:31,000 --> 00:19:33,080 Speaker 1: not only in the United States but around the world. 351 00:19:34,600 --> 00:19:38,040 Speaker 1: We made a lot of progress. We had three basic 352 00:19:38,119 --> 00:19:43,520 Speaker 1: recommendations and eleven commission. One basically was that we had 353 00:19:43,560 --> 00:19:45,439 Speaker 1: to go after the terrorists where they were. They had 354 00:19:45,480 --> 00:19:48,600 Speaker 1: a sanctuary in Afghanistan that couldn't be allowed to exist, 355 00:19:48,760 --> 00:19:51,840 Speaker 1: so we went after them there. The second and most 356 00:19:51,880 --> 00:19:55,399 Speaker 1: important recommendation was we had to hard knight offenses because 357 00:19:55,440 --> 00:19:57,959 Speaker 1: we made so many mistakes leading up to nine eleven 358 00:19:58,640 --> 00:20:02,600 Speaker 1: to let those people come to the United States, travel 359 00:20:02,720 --> 00:20:05,360 Speaker 1: freely around the United States, plot and plan and eventually 360 00:20:05,440 --> 00:20:08,760 Speaker 1: pull off nine eleven was was it was terrible and 361 00:20:08,920 --> 00:20:10,960 Speaker 1: so we had to hard nut offenses so would never 362 00:20:11,080 --> 00:20:16,440 Speaker 1: happen to happen again. And a third recommendation was to 363 00:20:16,560 --> 00:20:21,080 Speaker 1: start preventing terrorism where it's where it starts. And that's 364 00:20:21,119 --> 00:20:23,000 Speaker 1: the one we haven't done. I mean, we did the 365 00:20:23,080 --> 00:20:25,800 Speaker 1: first two. I mean we we've made recommendations and the 366 00:20:25,840 --> 00:20:30,800 Speaker 1: Congress adopted them to really strengthen the homeland, and we 367 00:20:30,880 --> 00:20:33,760 Speaker 1: haven't had any major texts in the United States since then. 368 00:20:34,600 --> 00:20:37,480 Speaker 1: But what we didn't do and that's what this commission 369 00:20:37,480 --> 00:20:41,600 Speaker 1: I'm now involved with his recommending is go to the 370 00:20:41,680 --> 00:20:44,280 Speaker 1: fragile states of the Middle East in the Horn of Africa, 371 00:20:44,840 --> 00:20:48,639 Speaker 1: where these terrorists thrive and where they come from, and 372 00:20:48,720 --> 00:20:51,879 Speaker 1: see if we can prevent terrorist terrorism there, because if 373 00:20:51,920 --> 00:20:54,879 Speaker 1: we can do that, then we'll be much safer in 374 00:20:54,920 --> 00:20:59,800 Speaker 1: the homeland. What kind of tactics would be involved in 375 00:21:00,160 --> 00:21:05,280 Speaker 1: such an enterprise. Well, we've now spent a lot of money, 376 00:21:05,720 --> 00:21:08,639 Speaker 1: billions of dollars, a lot of it militarily. A lot 377 00:21:08,680 --> 00:21:11,440 Speaker 1: of those countries we're talking about, we've got troops there now, 378 00:21:11,640 --> 00:21:16,520 Speaker 1: others were aiding that their bombed forces and and it's 379 00:21:17,000 --> 00:21:20,280 Speaker 1: it's not ineffective, but it's not really solving the problem. 380 00:21:21,560 --> 00:21:25,920 Speaker 1: These states have governments which are not helpful to the people. 381 00:21:26,560 --> 00:21:30,639 Speaker 1: They can't often provide basic services like water, water supply 382 00:21:30,880 --> 00:21:34,520 Speaker 1: and sewerage and that kind of thing. Moreover, they're often 383 00:21:34,840 --> 00:21:38,160 Speaker 1: corrupt and the people have no faith in their governments. 384 00:21:38,920 --> 00:21:41,000 Speaker 1: And you know, you've got to have hope, You really 385 00:21:41,080 --> 00:21:44,200 Speaker 1: have to have hope. And if there's no hope, that's 386 00:21:44,240 --> 00:21:47,560 Speaker 1: what terrorism thrives and and that's who we've seen in 387 00:21:47,640 --> 00:21:50,120 Speaker 1: these states. So it was suggesting as a whole new 388 00:21:50,200 --> 00:21:55,080 Speaker 1: approach to our work in that area, where we get 389 00:21:55,160 --> 00:21:59,240 Speaker 1: together with our allies, we have a considered strategy to 390 00:21:59,359 --> 00:22:02,680 Speaker 1: really make sure they're not breeding grounds for the kind 391 00:22:02,720 --> 00:22:04,600 Speaker 1: of terrorists at some day you're don't want to attack 392 00:22:04,680 --> 00:22:07,800 Speaker 1: this country again. Now you're going to be honored at 393 00:22:07,880 --> 00:22:14,320 Speaker 1: a ceremony today at which former representatively Hamilton's as well 394 00:22:14,480 --> 00:22:18,480 Speaker 1: as the Director of National Intelligence, Dan Coates will attend. 395 00:22:19,480 --> 00:22:23,520 Speaker 1: And do you believe that the national intelligence infrastructure of 396 00:22:23,560 --> 00:22:30,240 Speaker 1: the United States is in sympathy with what you're just described. Yeah, 397 00:22:30,320 --> 00:22:32,320 Speaker 1: we've been trying to keep everybody the First of all, 398 00:22:32,320 --> 00:22:36,159 Speaker 1: we're congressionally mandated. Uh. This came out of Congress, led 399 00:22:36,200 --> 00:22:40,040 Speaker 1: by Lindsey Graham and others uh, to to suggest this 400 00:22:40,200 --> 00:22:43,320 Speaker 1: task for Uce and address this problem. So we come 401 00:22:43,320 --> 00:22:46,840 Speaker 1: out of Congress. But I've been talking Lee Hamilton as 402 00:22:46,880 --> 00:22:50,040 Speaker 1: two to a number of people in the administration and 403 00:22:50,080 --> 00:22:52,960 Speaker 1: the intelligence operation, and we've been encouraged. I mean they've 404 00:22:53,400 --> 00:22:56,160 Speaker 1: they've said, yes, you're in the right track, you're doing 405 00:22:56,200 --> 00:22:58,720 Speaker 1: the right thing. We want to consider what you what 406 00:22:58,840 --> 00:23:02,480 Speaker 1: you come up with very seriously. So we've had encouragement 407 00:23:02,520 --> 00:23:05,960 Speaker 1: both from the Congress and from the administration, and we think, 408 00:23:06,640 --> 00:23:08,600 Speaker 1: we think that's one of the few things in Washington 409 00:23:09,080 --> 00:23:11,520 Speaker 1: is really bipartisan. I mean, there are no Republicans and 410 00:23:11,600 --> 00:23:14,000 Speaker 1: no Democrats on this one. It's it's keeping us safer. 411 00:23:14,200 --> 00:23:19,919 Speaker 1: So we have high hopes to everybody together behind these recommendations. Well, 412 00:23:20,000 --> 00:23:23,520 Speaker 1: Governor Kane is someone that brought up the topic of bipartisanship, 413 00:23:23,600 --> 00:23:27,000 Speaker 1: and wonder if you could expand on that and speak 414 00:23:27,200 --> 00:23:32,600 Speaker 1: about your political experience and how to build bipartisan agreement 415 00:23:33,320 --> 00:23:37,520 Speaker 1: at least on some things. Well, first of all, you've 416 00:23:37,560 --> 00:23:40,480 Speaker 1: got to do that for the big things, for the 417 00:23:40,560 --> 00:23:44,320 Speaker 1: important things like the war against terror, uh, and my 418 00:23:44,400 --> 00:23:51,159 Speaker 1: own experiences, frankly has been bipartisan. I was I was 419 00:23:51,240 --> 00:23:55,399 Speaker 1: speaker of a legislature which had no majority, not the 420 00:23:55,440 --> 00:23:58,760 Speaker 1: Republicans and Democrats had a majority, and they elected me 421 00:23:58,840 --> 00:24:00,760 Speaker 1: and had to work with both when I was elected 422 00:24:00,840 --> 00:24:05,040 Speaker 1: governor for eight years, had a democratic state set if 423 00:24:05,240 --> 00:24:07,480 Speaker 1: we have to work together, and nothing got done. And 424 00:24:07,600 --> 00:24:10,120 Speaker 1: we worked together and shared the traffic and not shared 425 00:24:10,160 --> 00:24:12,840 Speaker 1: the credit rather and got a lot done. And so 426 00:24:13,040 --> 00:24:15,320 Speaker 1: my whole and a nine eleven commission, of course, was 427 00:24:15,480 --> 00:24:19,400 Speaker 1: some people say it was the last truly bipartisan important 428 00:24:19,480 --> 00:24:22,280 Speaker 1: things have been done in this country because we were 429 00:24:22,400 --> 00:24:25,960 Speaker 1: unanimous now recommendations, five Republicans and five Democrats. We worked 430 00:24:26,000 --> 00:24:29,520 Speaker 1: together in interests of the country. So I think it 431 00:24:29,600 --> 00:24:33,119 Speaker 1: can be done. It. You know, it takes trust to 432 00:24:33,200 --> 00:24:36,840 Speaker 1: take the ideal, which I always realized that. You know, 433 00:24:36,960 --> 00:24:38,920 Speaker 1: give you a Republican or a Democrat, but you probably 434 00:24:39,000 --> 00:24:40,920 Speaker 1: ran for office for the right reason. You know, you 435 00:24:41,000 --> 00:24:43,080 Speaker 1: really want to help the country. And if you recognize 436 00:24:43,119 --> 00:24:45,120 Speaker 1: that other fellows, fris wants to help the country too, 437 00:24:45,400 --> 00:24:47,520 Speaker 1: even though he has a deed the name instead of 438 00:24:47,560 --> 00:24:51,600 Speaker 1: an art um, you can work together. Having said but 439 00:24:51,760 --> 00:24:54,280 Speaker 1: having said that, I'm sure that you have had an 440 00:24:54,400 --> 00:24:59,359 Speaker 1: occasion to watch the nomination hearings for Brett Kavanaugh to 441 00:24:59,440 --> 00:25:03,440 Speaker 1: the Supreme Court. What was your reaction to the back 442 00:25:03,520 --> 00:25:08,000 Speaker 1: and forth between Republicans and Democrats. Well, frankly, I was 443 00:25:08,040 --> 00:25:12,480 Speaker 1: appalled because Supreme Court is something that would be treated 444 00:25:12,520 --> 00:25:17,080 Speaker 1: with utmost dignity, and it just wasn't um. And we've 445 00:25:17,119 --> 00:25:19,320 Speaker 1: got to get back to that. We've got to get 446 00:25:19,400 --> 00:25:22,919 Speaker 1: back to the idea that a course of Republican president 447 00:25:22,960 --> 00:25:25,359 Speaker 1: as a right to nominator republican a democratic president as 448 00:25:25,359 --> 00:25:29,280 Speaker 1: a right denominator a Democrat, and if those people are qualified, 449 00:25:29,320 --> 00:25:32,040 Speaker 1: they ought to be treated with the utmost dignity as 450 00:25:32,400 --> 00:25:35,480 Speaker 1: befits the highest court in the land. And my hope 451 00:25:35,600 --> 00:25:37,879 Speaker 1: is we'll get back to that. I mean, I think 452 00:25:37,920 --> 00:25:39,959 Speaker 1: there are a lot of people of goodwill in the Congress, 453 00:25:40,800 --> 00:25:45,440 Speaker 1: and if they want to get anything done, really, and 454 00:25:45,560 --> 00:25:48,240 Speaker 1: they have to get things done from all our interests, 455 00:25:49,040 --> 00:25:50,399 Speaker 1: then they've got to find a way to talk to 456 00:25:50,480 --> 00:25:52,920 Speaker 1: each other in a civil manner and operate the way 457 00:25:52,960 --> 00:25:55,720 Speaker 1: our Congress is operated in for years until until the 458 00:25:55,760 --> 00:25:59,720 Speaker 1: present time. Do you have any thoughts on how elections operate, 459 00:25:59,800 --> 00:26:03,720 Speaker 1: and speaking now about campaign contributions and how that has 460 00:26:04,080 --> 00:26:11,239 Speaker 1: contributed to the hostile atmosphere that exists. Money has been 461 00:26:11,280 --> 00:26:14,359 Speaker 1: the cancer in the system in my mind, I mean, 462 00:26:14,400 --> 00:26:18,000 Speaker 1: I don't. I just think we've got to find a 463 00:26:18,080 --> 00:26:22,200 Speaker 1: way to control these contributions and at least make sure 464 00:26:22,280 --> 00:26:26,160 Speaker 1: that every contribution is visible so that we as vote 465 00:26:26,200 --> 00:26:29,040 Speaker 1: as know who's who's supporting who and by how much 466 00:26:30,040 --> 00:26:32,919 Speaker 1: and and and then we can judge their actions accordingly. 467 00:26:34,000 --> 00:26:36,000 Speaker 1: But I think we've got to I mean, you know, 468 00:26:36,080 --> 00:26:38,080 Speaker 1: we've just got to. We've got to do that. We've 469 00:26:38,119 --> 00:26:40,880 Speaker 1: got to let Congress get to know each other better. 470 00:26:40,920 --> 00:26:43,320 Speaker 1: You know, years ago congressman used to work five or 471 00:26:43,320 --> 00:26:45,600 Speaker 1: six days a week, and then their family has lived 472 00:26:45,600 --> 00:26:48,040 Speaker 1: in Washington, and they all got to know each other. 473 00:26:48,320 --> 00:26:50,199 Speaker 1: You know, if your spouses know each other and your 474 00:26:50,280 --> 00:26:52,320 Speaker 1: children know each other, it's very hard to be emmies. 475 00:26:52,880 --> 00:26:55,280 Speaker 1: You've become friends. And so there are a number of 476 00:26:55,359 --> 00:26:58,000 Speaker 1: things we have to do. Okay, campaign finance reform is 477 00:26:58,240 --> 00:27:01,680 Speaker 1: certainly one of them. Now, you were previously the president 478 00:27:01,800 --> 00:27:05,840 Speaker 1: of Drew University. You were there for fifteen years. And 479 00:27:07,240 --> 00:27:12,400 Speaker 1: free speech, or at least debating free speech on college 480 00:27:12,480 --> 00:27:17,800 Speaker 1: campuses is a topic. And indeed some people have been 481 00:27:17,920 --> 00:27:21,399 Speaker 1: barred from speaking at various college campuses because of the 482 00:27:21,480 --> 00:27:27,280 Speaker 1: potential for disagreement. What are your thoughts that the university 483 00:27:27,320 --> 00:27:30,760 Speaker 1: stands what is the opposite? The university ideal in this 484 00:27:30,920 --> 00:27:35,720 Speaker 1: country stands for all ideas and the airing of all ideas. 485 00:27:36,400 --> 00:27:39,280 Speaker 1: And and you know, students should not be kept it 486 00:27:39,359 --> 00:27:42,240 Speaker 1: can't be kept safe from ideas, you know, whether the 487 00:27:42,480 --> 00:27:45,400 Speaker 1: right wing ideas or left wing ideas that students sort 488 00:27:45,400 --> 00:27:47,080 Speaker 1: to be able to consider them and listen to them 489 00:27:47,320 --> 00:27:50,840 Speaker 1: on their own campus. And so I I'm just very 490 00:27:51,240 --> 00:27:54,840 Speaker 1: very much against any campus of any kind which keeps 491 00:27:54,920 --> 00:27:59,639 Speaker 1: any speaker off that campus. Students, students ought to be 492 00:28:00,040 --> 00:28:03,680 Speaker 1: um in order to be allowed to debate freely and 493 00:28:03,760 --> 00:28:06,920 Speaker 1: if freely in all opinions. And it's not a it's 494 00:28:06,960 --> 00:28:09,320 Speaker 1: not a decent university to me if the banning speakers. 495 00:28:10,160 --> 00:28:14,760 Speaker 1: And just finally, Governor Kane, your reflection on nine eleven. 496 00:28:14,840 --> 00:28:17,240 Speaker 1: As we await the next moment of silence, give you 497 00:28:17,280 --> 00:28:19,200 Speaker 1: about thirty seconds. What are your thoughts? What would you 498 00:28:19,240 --> 00:28:21,880 Speaker 1: like to leave us with? Well, I think about the families. 499 00:28:22,119 --> 00:28:24,040 Speaker 1: I think about the people who lost so much, and 500 00:28:24,119 --> 00:28:25,879 Speaker 1: the fact that those families, so many of them, have 501 00:28:26,040 --> 00:28:29,960 Speaker 1: now dedicated themselves to keeping us seeming us safer. That is, 502 00:28:30,200 --> 00:28:33,320 Speaker 1: that's supporting the efforts I'm doing now on fragile states, 503 00:28:33,400 --> 00:28:37,159 Speaker 1: and they're also supporting everything else to keep this country safer. 504 00:28:37,200 --> 00:28:39,600 Speaker 1: They're wonderful, wonderful people, and I think about them on 505 00:28:39,720 --> 00:28:43,000 Speaker 1: this day. Thank you very much for joining us former 506 00:28:43,080 --> 00:28:46,640 Speaker 1: Governor of New Jersey, Tom Kane, who's also the chairman 507 00:28:46,800 --> 00:28:52,200 Speaker 1: of the nine eleven Commission, speaking about politics and efforts 508 00:28:52,640 --> 00:29:03,480 Speaker 1: to forestall future terrorist attacks. M thanks for listening to 509 00:29:03,560 --> 00:29:08,080 Speaker 1: the Bloomberg surveillance podcast. Subscribe and listen to interviews on 510 00:29:08,160 --> 00:29:14,000 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 511 00:29:14,040 --> 00:29:17,320 Speaker 1: on Twitter at Tom Keene before the podcast. You can 512 00:29:17,400 --> 00:29:20,560 Speaker 1: always catch us worldwide. I'm Bloomberg Radio