Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane
Speaker 1: Jai Ley. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Katie
Speaker 1: stuck enjoins us. She is with fair lead where she
Speaker 1: does technical analysis. Fair lead is very appropriate because right
Speaker 1: now France and the coast trying to get the role
Speaker 1: model London can't do it. So the Royal Navy's coming in.
Speaker 1: They're gonna try her to put her through Gibraltar and around,
Speaker 1: take a long way around and on that Royal Navy
Speaker 1: boat will be a fair lead. Right. What's a fair lead?
Speaker 1: It keeps the lines on the boat from getting tangled.
Speaker 1: And it seems, you know, Mark get timing is so important,
Speaker 1: right and we want to keep a clearer perspective and
Speaker 1: obviously have a fair lead as we approached the market.
Speaker 1: Are the moving averages of the equity markets giving you
Speaker 1: a fair lead right now? I think so, but probably
Speaker 1: less so than last year. The moving averages are really
Speaker 1: relevant in a trending tape, and I would argue that
Speaker 1: this year is more likely less of a trending tape,
Speaker 1: something that is characterized by more swings to the upside
Speaker 1: and downside, and for that reason we'll be forced to
Speaker 1: be a bit more short term in our focus. How
Speaker 1: do you gauge what's been happening with the SMP five, say,
Speaker 1: when we've had that sharp draw down, then this aggressive
Speaker 1: snap back as well. Does that provide you with some nerves?
Speaker 1: It does. In the corrective phase, which was very short lived,
Speaker 1: of course, we saw a sentiment which was the biggest
Speaker 1: risk to the market from a technical perspective, in my opinion,
Speaker 1: go from extremely bullish, which is a contrarian negative, to
Speaker 1: extremely bearished in the matter of days. Really, so that
Speaker 1: swift decline in sentiment was indicative of a treatable low.
Speaker 1: The SMP five hundred tests that it's two hundred day
Speaker 1: moving average. Now, the snap back that we've seen is
Speaker 1: not uncommon, obviously fast and furious in and of itself,
Speaker 1: but now seems to be losing short term momentum, which
Speaker 1: puts the market in store for possible retest, and by
Speaker 1: retest I mean a return to support. Well casey, where
Speaker 1: is that support? The two day moving average still for
Speaker 1: the SMP five hundred can be considered initial support. It
Speaker 1: may be a bit aggressive as a downside target for
Speaker 1: this retest, and nevertheless, the long term up trend is
Speaker 1: still very much intact. You've mentioned sentiment. How important is
Speaker 1: sentiments still? And more importantly perhaps for our listeners, Katie,
Speaker 1: how do you gauge west sentiment actually is? Well? I
Speaker 1: think it's really paramount because it is a driving force
Speaker 1: behind the markets, especially in markets that are so momentum
Speaker 1: driven and really top down oriented, right, really paying attention
Speaker 1: to the macro data. So I think it's very important.
Speaker 1: The way I'd like to gauge it is using transactual measures.
Speaker 1: So instead of adhering to the investor polls where they're
Speaker 1: asking how do you feel about the marketplace, but rather
Speaker 1: looking at how investors are positioning. You can do that
Speaker 1: via the vix via to put call ratios. There's a
Speaker 1: fear and greed index out there that we use quite
Speaker 1: a bit. I don't follow volume, and I know you
Speaker 1: pay attention to it. When Luisiamnta talks about distribution, that's
Speaker 1: the back and fourth of what's going on right now?
Speaker 1: What's the back and forth show? You? You know, the volumes.
Speaker 1: I don't give it a whole lot of weight either.
Speaker 1: Um when I do pay attention is when volume spikes,
Speaker 1: because that's indicative, isn't It really didn't write well. It
Speaker 1: did spike into the tradea below, so that was important.
Speaker 1: It was somewhat climactic, but it has certainly spiked higher
Speaker 1: than that. It can be indicative of inflection points, but
Speaker 1: volume as a whole has really lost its value in
Speaker 1: my opinion as a an indicator trend, so distribution would
Speaker 1: be a little bit less relevant as it pertains to volume.
Speaker 1: Katie Stockton, thank you so much with Fairley, and she
Speaker 1: will return for a longer bit. But news news overcomes
Speaker 1: all those morning Katie stocked and thank you so much.
Speaker 1: Constructive view on the markets wrapped around the standard reports.
Speaker 1: Much to talk about today, but we're gonna digress here
Speaker 1: right now, and really important issues for all Americans. Out
Speaker 1: of the various California pension plans right now. Chris Allman
Speaker 1: joins us, and he is not with Kelpers p. He
Speaker 1: is with Kelsters. S Good morning, sir. What is the
Speaker 1: difference between Kelsters and Kelpers In a nutshell, we cover
Speaker 1: the teachers, they cover state employees and municipal employees city
Speaker 1: towns in that I've read in the last couple of
Speaker 1: days of real chick oallenges within not your shop, but
Speaker 1: their shops over different accounting and their relationship with their clients,
Speaker 1: who are towns and villages to begin with. Does Kelsters
Speaker 1: have the same challenges that Kelpers has not to the
Speaker 1: extent that they do, because it's all about liability management?
Speaker 1: You know, I think when everybody talks about pension and
Speaker 1: unfunded liabilities, they always focus on the investment side. But
Speaker 1: the realities, you've got to pay attention to the liability
Speaker 1: side and the contributions. They've got more municipalities that set
Speaker 1: different benefit levels. In our case, it's one statewide benefit
Speaker 1: to all the simpler shop. Your mathematics is simpler. That
Speaker 1: is correct. There. There's a lot of people are saying
Speaker 1: what's going on in California is a crucible for Illinois,
Speaker 1: for Dallas and Frankly coast to coast the rest of America.
Speaker 1: Are you guys simply ahead of a debate? It's gonna
Speaker 1: be five or ten years down the road for the
Speaker 1: rest of unfunded America. UM, I don't think I think
Speaker 1: we're ahead of the debate. But I don't think that
Speaker 1: were the crucible or the center. I think that you're
Speaker 1: going to see other states and as you said, municipalities
Speaker 1: where they didn't do a good job of managing the liabilities.
Speaker 1: They didn't pay attention to the benefits, and most importantly,
Speaker 1: they didn't consistently pay the mortgage. They skipped payments, they
Speaker 1: had payment holiday the mortgage. For your readers or your listeners,
Speaker 1: they understand they're not paying the actually real assumed interest
Speaker 1: rate every year. There's a required rate that you've got
Speaker 1: to pay in. You've got to contribute. The town has
Speaker 1: to pay to kelpers, of the teachers have to pay
Speaker 1: to kelsters. That is correct. Best example picture of four
Speaker 1: oh one k If you don't invest in your four
Speaker 1: oh one k oh for a couple of years when
Speaker 1: you're twenty, a couple of years when you're thirty, of
Speaker 1: a sudden, you get to fifty and you're not gonna
Speaker 1: have enough money because you didn't invest and contribute regularly
Speaker 1: to the contributions. That are the focus and John that
Speaker 1: defines about three quarters of America. It's a very very
Speaker 1: important issue. But on the other side, something that you
Speaker 1: you have to try and manage Chris, is the return assumptions?
Speaker 1: What are the basic assumptions for returns now and how
Speaker 1: they shifted over the last ten years. Yeah, they've come
Speaker 1: down over the last ten years. There have been lots
Speaker 1: of critics that they haven't come down enough. But remember,
Speaker 1: we're trying to make a forecast for the next thirty years.
Speaker 1: What's the reasonable rate of return that a diversified portfolio
Speaker 1: could earn over the next thirty years. And don't just
Speaker 1: look at today's environment where interest rates are. I think
Speaker 1: about the innovation that's coming. Think about the growth of
Speaker 1: the rest of the world, the emerging markets. So for us, yeah,
Speaker 1: answer and simple number is seven percent. Warren Buffett would
Speaker 1: say that's too high, but I would say if you
Speaker 1: look at over thirty years, with a little bit of inflation,
Speaker 1: I think we can achieve seven percent. We have in
Speaker 1: the past thirty years. We have turned eight percent in
Speaker 1: the last thirty years. How difficult would it be to
Speaker 1: actually capture those growth assumptions in public markets when so
Speaker 1: many of these growth opportunities aren't going public, they're staying private.
Speaker 1: And I'm talking obviously specifically about equities, and very much
Speaker 1: more so about one specific text sector in technology. Do
Speaker 1: you see that shift that more growth opportunities will remain
Speaker 1: in private hands and they won't be available as a
Speaker 1: public opportunity. I'd answer your question in two ways. If
Speaker 1: you're a four oh one K four oh three B investor,
Speaker 1: it's gonna be hard for you to match our return
Speaker 1: at seven percent because we can gain access to that
Speaker 1: private capital market. We had met with the Jay Clayton
Speaker 1: from SEC yesterday and one of his observations was that
Speaker 1: there's only about forty one hundred publicly traded companies in
Speaker 1: America today. When I started this business thirty years ago,
Speaker 1: there were over seven thousand, So over half of the
Speaker 1: company's basically have gone and stayed private or not going
Speaker 1: public because there's a cost to it. That's a huge
Speaker 1: investment opportunity we can take advantage of. And there's growth
Speaker 1: in that private and it's growth in the private sector,
Speaker 1: and it's actually a huge amount of investment opportunity there.
Speaker 1: They can access all the capital they want. The stories
Speaker 1: changed so much because they used to have to go
Speaker 1: public to access the capital, and now PE is just
Speaker 1: opening up funds of people throwing money at them. Do
Speaker 1: we need to improve the opportunity set for retail to
Speaker 1: get access to private markets, the opportunities that used to
Speaker 1: be public and now remain private. Do we need to
Speaker 1: open that up a little bit more? Chris Um. I
Speaker 1: think that the private equity firms are always trying to
Speaker 1: figure out how to do that. That's been on people's
Speaker 1: mind of how do you daily value or how do
Speaker 1: you take private equity and fitted into a four O
Speaker 1: wind k option. I'm not really sure that they should
Speaker 1: because that's a very sophisticated market, a lot of volatility.
Speaker 1: You just use the expression that pe is throwing money
Speaker 1: at companies. That's not a good environment. You don't want
Speaker 1: to throw money at p A to do something that
Speaker 1: all sitting on record cash piles. There's no question the
Speaker 1: world is a wash with capital. Never in Tom Keene's
Speaker 1: life have you seen this much money around the world
Speaker 1: that's able for long term investment. Just think of the
Speaker 1: sovereign wealth funds that are out there. There there ten
Speaker 1: times are I go with that? But after the Napoleonic
Speaker 1: Wars it was a little richest. Well, that's true. Equity
Speaker 1: markets have a multiple on them, that is, are you
Speaker 1: able to go down assets size and go from comfortable
Speaker 1: big caps down to mid cap and small cap or
Speaker 1: do you have such a massive money just as it
Speaker 1: worth buying mid caps and small caps. No, we are
Speaker 1: diverside portfolio, Tom. We're into mid caps and indexes, yes, indexes,
Speaker 1: and then direct active management. That's the one place we
Speaker 1: think the markets a little bit less efficient, so we'll
Speaker 1: use active managers despite the cost. But I think an opportunities,
Speaker 1: particularly in emerging markets around the world, not even just
Speaker 1: large cap and mid cap and emerging markets, we can
Speaker 1: take advantage of that. So you were the French teacher
Speaker 1: in San Jose, and she says, what did you do
Speaker 1: last year? What? What's your What was your total return
Speaker 1: last year to your your shareholders last year? Are total
Speaker 1: return um was? I'm gonna say fourteen percent. Actually, I'm
Speaker 1: still past two thousand seventeen, and i operate on a
Speaker 1: fiscal year basis, so I'm really focused at June thirties
Speaker 1: and and where do we perform. We're doing well. We're
Speaker 1: like a lot of hedge funds. You captured a lot
Speaker 1: of the up SPX. Absolutely, because over half of my
Speaker 1: portfolio has a beta exposure to the global equity markets.
Speaker 1: So I'm in US and in non U S stocks,
Speaker 1: and I'm going to move with those markets. But over
Speaker 1: the long term, we think we're going to do quite well.
Speaker 1: What's your R squared to SP something? How tight do
Speaker 1: you manage the benchmark indexes within the equity portfolio? Very tight?
Speaker 1: Our tracking error is actually pretty darn tight because we
Speaker 1: don't use a lot of active management. We're seventy passive
Speaker 1: in the USA, fifty percent passive in the non US market,
Speaker 1: so very tight passive. That's fascinating. We have that big
Speaker 1: conversation without Warren Buffett, and they beat against protege pond
Speaker 1: as you saying that's the best way to position over
Speaker 1: a period of time that could be multiple decades. We
Speaker 1: think that if you're going to invest billions of dollars,
Speaker 1: the most efficient and cost effective way to do it
Speaker 1: is is to own the US market as one whole group,
Speaker 1: as one basket of stock. Yeah, there aren't a lot
Speaker 1: of Warren Buffets out there. It would be great if
Speaker 1: we had quite a few options, but there's only one
Speaker 1: oracle of Omaha. Chris. Final question, we have a limited time.
Speaker 1: I just want to ask you how much is that
Speaker 1: equity position increased as a percentage of the overall investment portfolio.
Speaker 1: Over the last couple of years, it's actually decreased interesting
Speaker 1: profits well, as this equity market was hitting all time
Speaker 1: new eyes US and non US, we were taking profits
Speaker 1: away and diversifying into other areas. We want to take
Speaker 1: it down below of the portfolio. Okay, well, thank you
Speaker 1: so much, Craig, Chris Elman, excuse me, Chris Ellman, thank
Speaker 1: you so much. With Kelster's this morning and now joining
Speaker 1: us for all of us, the most important interview of
Speaker 1: the day, without question, on your real estate, on John
Speaker 1: Farrell's real estate. Jonathan Miller joins us with Miller, Samuel John,
Speaker 1: nobody keep statistics like you, Miami, New York and really nationwide.
Speaker 1: What's the trend right now into John Pharaoh's spring season. Well,
Speaker 1: we have two things happening. One, if you look at
Speaker 1: the residential side, so far, very little change in attitude
Speaker 1: from what was expected to be a pretty serious drag
Speaker 1: on housing, uh regarding the tax reform. On the retail side,
Speaker 1: we're delving further into the retail apocalypse, where we're having
Speaker 1: a significant number of retail outlets running into trouble and
Speaker 1: trying to renegotiate with landlords. UM, it's sort of a
Speaker 1: an after effect of the financial crisis combined with massively
Speaker 1: over building retail across the US. It's price adjusting for
Speaker 1: the retail apocalypse. Is that happening quick enough? Oh no, Uh,
Speaker 1: just like we we have talked about before in Bloomberg
Speaker 1: with UH the development boom. UH, it takes UH landlords
Speaker 1: or property owners two to three years to really adjust
Speaker 1: to current market conditions. And we're just really something that
Speaker 1: began two or three years ago. We're just starting to
Speaker 1: see retailers or landlords begin to adjust and they need to. Okay,
Speaker 1: the big complaint I get John Miller is Michael Dell
Speaker 1: takes a place in a big, shining tower and everybody
Speaker 1: goes mental. That's not the real world. And we say
Speaker 1: good morning to Mr Dell, who's been very supportive of
Speaker 1: our work, UM, John Miller. If you go down the
Speaker 1: income food chain, the number one complaint I hear from
Speaker 1: everybody are the income qualifications Given a high rents in
Speaker 1: many cities around the nation, is that pressure still there? Oh? Yes,
Speaker 1: Credit conditions UH in multi family housing, UH, specifically residential
Speaker 1: rental remained very high. That there's a strong risk aversion UH,
Speaker 1: despite growing um uh need for the use of concession.
Speaker 1: So for example, in New York, UH the at least
Speaker 1: fifty of all rental activity has some form of landlord concession.
Speaker 1: And when you talk about new development, all the product
Speaker 1: that I'm built over the five or six years, it's
Speaker 1: anywhere from have some form of concession. So what we're
Speaker 1: seeing is an oversupply, whether we're talking about luxury residential
Speaker 1: or we're talking about retail. And but the the issue,
Speaker 1: John and Blueberg has an agreement, folks. I can't live
Speaker 1: too close to John Ferrell because in case there was
Speaker 1: an accident, we need to be apart. But but if
Speaker 1: I was to move up by John Farrow, the fact
Speaker 1: is where he lives is so fancy. There's nothing for rent.
Speaker 1: Explain what you just said, John Miller for ten minutes,
Speaker 1: and the fact is there's nothing for rent. How can
Speaker 1: you have both worlds? Well, So what you have is
Speaker 1: you have a massively polarized market. So most of the
Speaker 1: supply that has come in on the residential side has
Speaker 1: been skewed the luxury and so that essentially the remainder
Speaker 1: of it. I want to say, if Tom King wants
Speaker 1: to trade views out of the front window. We're not
Speaker 1: going to talk about where we live. Um. Jonathan made
Speaker 1: a question and serious question hap me out here and
Speaker 1: in my app some of our listeners as well. The
Speaker 1: landlord wants to put up my rent in the new renewal.
Speaker 1: I'm a captive audience. I'm a sitting tenant. Now, if
Speaker 1: I go to another building, they're offering two months free
Speaker 1: rent on fourteen month deals. It keeps happening again and again.
Speaker 1: But when I'm a sitting tenant, they're just throwing a
Speaker 1: rent increase at me. What's my best response? So the
Speaker 1: best response is to act as if the market is softening,
Speaker 1: um and if you you see a rent increase. Actually,
Speaker 1: landlords are are really being much more uh flexible than
Speaker 1: they have been because otherwise your option with all the
Speaker 1: um all your other options are to to move. And
Speaker 1: so we're seeing massive use of concessions uh to keep
Speaker 1: you in there because it's it's less expensive to bringing
Speaker 1: in and then bringing a new tenant. Does San Francisco
Speaker 1: break like New York? Oh yeah, uh yeah, that market,
Speaker 1: you know that market. It's it's odd because we always
Speaker 1: think of New York is the most expensive in the country,
Speaker 1: but that market is feeling much more pain and stress
Speaker 1: on affordability, and they're having the same problem that there
Speaker 1: just isn't supply, uh for as we would say, Mere mortals,
Speaker 1: mortals to rent. Well, thank you, Jim Miller greatly appreciate
Speaker 1: he's with the real estate agency Mere Mortals. We greatly
Speaker 1: appreciate his attendance today. John Miller Folcus is with Miller,
Speaker 1: Samuel and Douglas Eleman and does the best. He passes
Speaker 1: John Burrow to Bureau and Borrow to Borrow and down
Speaker 1: in Miami as well in Boston. It's amazing the narrowness
Speaker 1: he gets. This is a joy. George Friedman is one
Speaker 1: of our most astute analysts of the military dimension of
Speaker 1: our international politics. Chapter five of the Next hundred Years
Speaker 1: is China two thousand and twenty Paper Tiger. George Freedman
Speaker 1: joins us now author and with of course, with geopolitical futures. George,
Speaker 1: do you have to rip up the next hundred years?
Speaker 1: And you have to rip up chapter five Paper Tiger?
Speaker 1: After this momentous announcement of President g I don't think
Speaker 1: I have to rip up anything. Uh. Look, the Chinese
Speaker 1: have a fundamental interest in controlling the South China. See
Speaker 1: in ten years of pursuing this that got nowhere. No
Speaker 1: one is impressed. Not even the Filipinos h New York
Speaker 1: Times is impressed. So you know, they can be as
Speaker 1: loud and as aggressive as they want, but the fact
Speaker 1: of the matter is they don't have force. How do
Speaker 1: you respond to the comparisons of this historic announcement from
Speaker 1: President g and I guess the Communist Party with what
Speaker 1: we observe from Mr Putin today in Russia is lengthy
Speaker 1: speech to uh an acclaimed room. Well, these are two
Speaker 1: basically constrained military pours trying to posture on the world
Speaker 1: strage as if they were much more powerful. Look, the
Speaker 1: Russians claimed that they're spending only four of their GDP
Speaker 1: on defense. If you take a look at all the
Speaker 1: projects they've laid out, some of them extraordinarily advanced, they're
Speaker 1: spent it way way more at a time when oil
Speaker 1: prices are down. So if he is serious that he's
Speaker 1: actually done this, he's repeating what so the Union got
Speaker 1: crushed by star Wars competition. On the one side, low
Speaker 1: oil prices. It is one thing to make a political speech,
Speaker 1: it's another thing to believe it, and we have to
Speaker 1: be very careful, Mr Friedman. During this speech, a President
Speaker 1: Putin talked about two specific nuclear weapon delivery systems. I'm
Speaker 1: wondering if you could offer your thoughts about whether they
Speaker 1: are credible and what do you believe that indicates. Well,
Speaker 1: the most important one he spoke about is that he
Speaker 1: had a cruise missile back in travel at mock times
Speaker 1: his speed of sound and deliver in nuclear weapon anywhere
Speaker 1: in the world. The only question is, why do you
Speaker 1: want a weapon like that to deliver nuclear weapons? You've
Speaker 1: got I C B M. S um. They're not easy
Speaker 1: to defend against. Noblan claims they can defend against it.
Speaker 1: Why develop a weapon of this sort at this incredible
Speaker 1: expense Because you've got to develop materials, fuels, other things
Speaker 1: like that in order to do a nuclear attack, a
Speaker 1: lot of other ways to do it. I think they're
Speaker 1: working on it. I think a lot of countries, including
Speaker 1: the United States, are working on this. But his claim
Speaker 1: that they've got it, as like much of the speech
Speaker 1: he made, it was great campaign rhetoric, it was a
Speaker 1: good State of the Union message, but when you drill
Speaker 1: down into it, he's claiming to be developing weapons he
Speaker 1: doesn't even need in that context. The elections, as you indicate,
Speaker 1: they are coming up, what in about seventeen days, will
Speaker 1: there be any change after the election in the way
Speaker 1: Russia is governed? Well, the Russians are really trapped, as
Speaker 1: most nations are there, trapped by an economy that never
Speaker 1: evolved that depends on the price of oil, and they
Speaker 1: can't They can't control the price of oil, and it's
Speaker 1: not going back to eight or hundred, at least not
Speaker 1: in the near future. So they have got this problem
Speaker 1: that limits what they can do. They also want to
Speaker 1: appear for their own public and for the world as
Speaker 1: if they were major global powers. They're not, but they
Speaker 1: can make a speech that makes them sound really frightening,
Speaker 1: and that's what we did. George, you're asconsed in the
Speaker 1: People's Republic of Austin. The territory around you maybe ought
Speaker 1: to be the most likable territory for President Trump. How
Speaker 1: do you gauge the American public support of the president's
Speaker 1: foreign policy and the budget announcements of a build up
Speaker 1: of the military. How do you engage that? Well, I
Speaker 1: haven't live outside of Austin, in the Red Country, and
Speaker 1: the general view out here is they're not really interested
Speaker 1: in foreign policy nearly as much. There's trade issues and
Speaker 1: things like that, and they don't quite understand it. But
Speaker 1: they want to military build up, right, they do. But
Speaker 1: it's not a it's not a burning issue. I mean,
Speaker 1: this is not something that they're really they're really caught
Speaker 1: up on social issues. As to the people inside of Austin.
Speaker 1: They hate anything he does if he does it. So
Speaker 1: what you really have the social reality is you've got
Speaker 1: two groups, none of them are particularly coherent in terms
Speaker 1: of policy, but each have one basic belief that the
Speaker 1: other group really is vile. And you try to figure
Speaker 1: out what it is that each wants, it gets really
Speaker 1: murky really fast. Okay, Well, let's sake something like the
Speaker 1: F thirty five, of which I have almost zero knowledge.
Speaker 1: The if we throw more money at the Pentagon, which
Speaker 1: I believe is what we're gonna do. Does George Friedman
Speaker 1: have a confidence we're gonna build the better F. Well,
Speaker 1: you've caught me on a bad subject because I think
Speaker 1: that thirty five are really bad idea. Well, that's how
Speaker 1: we're talking to It's a wildly expensive plane, is extremely complicated,
Speaker 1: and we can only afford to build a few. We're
Speaker 1: building an air force where we can't afford to take losses.
Speaker 1: So I mean you shoot them that thirty five you're
Speaker 1: taken out the g d P of El Salvador. Uh,
Speaker 1: this is there about a million a copy and that's
Speaker 1: with the price cut, and that's not including the long
Speaker 1: term maintenance and everything else that you have to build
Speaker 1: into It is very hard to maintain. So the answer
Speaker 1: is we need a national strategy that defines who were
Speaker 1: likely to fight and then devised weapons that are likely
Speaker 1: to do something about it. Where we really do need
Speaker 1: the money is in developing the manpower that we need
Speaker 1: in the army. This army has been fighting for sixteen years.
Speaker 1: They are tired. Lot of the key people have retired.
Speaker 1: I'll be personal. My daughter, who was a major, went
Speaker 1: on three tours to Iraq. They totally you're going back
Speaker 1: in nine months, and she threw in the towel that
Speaker 1: army that we have, the personnel have been used up
Speaker 1: and ground down. So where you need the money is
Speaker 1: to build up the force. It's morale, it's training and
Speaker 1: things like that. The hardware we're pretty good at, and
Speaker 1: the hardware we need to develop can be developed out
Speaker 1: of that money. But what we really need is an
Speaker 1: army UH to fight with those forces with those weapons.
Speaker 1: Mr Freedman. The book that I believe you're working on
Speaker 1: is titled The New American Century. Can you offer people
Speaker 1: maybe in about the thirty seconds the overall gist of
Speaker 1: what you're trying to convey, Well, the gist of it
Speaker 1: is every fifty years the United States goes into an
Speaker 1: economic crisis. The last one was Ronald Reagan crisis, the
Speaker 1: one he saws. The one before that was FDRs, And
Speaker 1: going back into history to Andrew Jackson, this is the
Speaker 1: way we work. We are now entering the closing phase
Speaker 1: of the Reagan cycle, and we are seeing the beginnings
Speaker 1: of the crazy politics like we had in in when
Speaker 1: the assassinations are taking place, riots in Chicago and one.
Speaker 1: So this is a normal process. This is how we
Speaker 1: do things. And what appears to be the end of
Speaker 1: the United States, well, it's simply the way we go
Speaker 1: through it. And it's a huge sense of despair at
Speaker 1: the end of an age. But the Reagan period is
Speaker 1: drawing to in a hole and a new one is emerging.
Speaker 1: George Freeman, thank you so much. Never done time use
Speaker 1: with geopolitical futures. Terse perspective on our military doesn't link
Speaker 1: ag into our political economics. M Thanks for listening to
Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on
Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm
Speaker 1: on Twitter at Tom Keene before the podcast. You can
Speaker 1: always catch us worldwide. I'm Bloomberg Radio