1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's a power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated 4 00:00:12,760 --> 00:00:26,400 Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:26,440 --> 00:00:29,920 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:29,960 --> 00:00:34,800 Speaker 1: insight from the best of economics, finance, investment, and international relations. 7 00:00:35,240 --> 00:00:40,760 Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, 8 00:00:40,800 --> 00:00:47,519 Speaker 1: and of course, on the Bloomberg David Gura in New 9 00:00:47,560 --> 00:00:50,320 Speaker 1: York with Tom Keen. This is Bloomberg Surveillance on Bloomberg Radio. 10 00:00:50,320 --> 00:00:51,920 Speaker 1: A couple of years back, I was on a reporting 11 00:00:51,920 --> 00:00:54,880 Speaker 1: trip to Athens. There was a protest on my final 12 00:00:55,040 --> 00:00:58,240 Speaker 1: night there. Parliament was debating. Crowds gathered in Syntagma Square 13 00:00:58,240 --> 00:01:00,640 Speaker 1: and towards the end of you homemade game selin bombs 14 00:01:00,720 --> 00:01:03,240 Speaker 1: were thrown. I gather the same thing played out last 15 00:01:03,320 --> 00:01:07,679 Speaker 1: night in Athens as parliamentarians debated another round of austerity measures. 16 00:01:07,720 --> 00:01:09,400 Speaker 1: Quite pleasure to have with us here on Bloomberg eleven 17 00:01:09,400 --> 00:01:12,120 Speaker 1: three our studios. George Papa Constantino, the former Finance minister 18 00:01:12,760 --> 00:01:14,840 Speaker 1: of Greece. Get us up to speed on what's going 19 00:01:14,840 --> 00:01:16,920 Speaker 1: on here. We're looking at the Eurogroup meeting I gather 20 00:01:17,040 --> 00:01:20,680 Speaker 1: today or tomorrow this week in which the next round 21 00:01:20,680 --> 00:01:22,560 Speaker 1: of this is going to be discussed in more detail. 22 00:01:22,800 --> 00:01:25,040 Speaker 1: Where do things stand with the Greek economy at this point? 23 00:01:25,319 --> 00:01:28,600 Speaker 1: Good morning, Yeah, we are up to for another Eurogroup 24 00:01:28,640 --> 00:01:33,280 Speaker 1: meeting and it will basically conclude that the conditions are 25 00:01:33,280 --> 00:01:36,840 Speaker 1: there to to disperse the loans for Greece. This is 26 00:01:36,880 --> 00:01:41,080 Speaker 1: following passing in legislation this week with all the necessary measures, 27 00:01:41,080 --> 00:01:44,680 Speaker 1: the fiscal measures. So what remains and the next step, 28 00:01:44,720 --> 00:01:48,280 Speaker 1: and the interesting step, so to speak, is the discussions 29 00:01:48,600 --> 00:01:52,200 Speaker 1: uh within the meeting and also outside between the I 30 00:01:52,320 --> 00:01:56,000 Speaker 1: m F and Germany on that relief, because everyone recognizes 31 00:01:56,080 --> 00:01:58,040 Speaker 1: that you need some that relief for Greece to be 32 00:01:58,080 --> 00:02:03,160 Speaker 1: able to grow basically and clear the clearly the sky 33 00:02:03,240 --> 00:02:05,560 Speaker 1: a little bit for for as you move forward. So 34 00:02:07,200 --> 00:02:10,320 Speaker 1: the conditions for that relief are going to be discussed. 35 00:02:10,360 --> 00:02:13,440 Speaker 1: It's clear that there will be no decisions for immediate 36 00:02:13,480 --> 00:02:18,120 Speaker 1: implement implementing for immediately implementing that relief, but the parameters 37 00:02:18,160 --> 00:02:21,080 Speaker 1: will be said to have that relief after this program 38 00:02:21,080 --> 00:02:25,280 Speaker 1: finishes in the summer of two. Once that's done, that's 39 00:02:25,320 --> 00:02:28,040 Speaker 1: the trigger for the ECB too then include Greece into 40 00:02:28,160 --> 00:02:30,880 Speaker 1: its quantit visa program and for Greece to then go 41 00:02:30,960 --> 00:02:33,440 Speaker 1: back into the markets for the first time since two 42 00:02:33,480 --> 00:02:38,280 Speaker 1: thousand fourteen and start a process of normalization which will 43 00:02:38,360 --> 00:02:40,720 Speaker 1: allow it to not be completely out of the woods, 44 00:02:40,760 --> 00:02:43,919 Speaker 1: but at least you know, spreads will tighten and and 45 00:02:44,520 --> 00:02:48,520 Speaker 1: after the program finishes, we can have a some light 46 00:02:48,600 --> 00:02:51,480 Speaker 1: follow up arrangement like a credit line, so to speak. 47 00:02:51,560 --> 00:02:54,760 Speaker 1: But start finding yourself on the market again. We understand 48 00:02:54,760 --> 00:02:57,120 Speaker 1: that your sense of the sustainability of what the your 49 00:02:57,120 --> 00:03:00,160 Speaker 1: group president proposed this morning, a primary surplus of three 50 00:03:00,160 --> 00:03:02,440 Speaker 1: point five percent for for five years, is that something 51 00:03:02,440 --> 00:03:06,079 Speaker 1: that you think is sustainable? Look, it's can we do 52 00:03:06,400 --> 00:03:08,520 Speaker 1: promise of troup and five, Yes we can. Is it 53 00:03:08,560 --> 00:03:11,240 Speaker 1: a good idea? No, it's not. I think they're the 54 00:03:11,280 --> 00:03:14,200 Speaker 1: aim if is right, it's too high. The only reason 55 00:03:14,240 --> 00:03:19,080 Speaker 1: why it is there is because it reduces the need 56 00:03:19,280 --> 00:03:24,160 Speaker 1: for deeper debt relief and therefore makes Germany happy. At 57 00:03:24,240 --> 00:03:29,160 Speaker 1: least your own dine Symplome is not proposing the original idea, 58 00:03:29,240 --> 00:03:33,400 Speaker 1: which was ten years of three Maybe the minister can 59 00:03:33,440 --> 00:03:36,080 Speaker 1: help us, David, you went to Athens here recently? Is 60 00:03:36,120 --> 00:03:39,400 Speaker 1: it Hydra or h H y d r A. It's 61 00:03:39,480 --> 00:03:42,160 Speaker 1: h Hydra. That's right, David. We need to do a 62 00:03:42,240 --> 00:03:45,760 Speaker 1: remote with the Finance minister from here happy that was 63 00:03:46,000 --> 00:03:48,920 Speaker 1: Sophia or rendered that movie a million years ago. It's 64 00:03:48,960 --> 00:03:53,120 Speaker 1: like it's like it's like beyond gorgeous, is what I 65 00:03:53,920 --> 00:03:56,120 Speaker 1: You were with the London School of Economics. Paul Degar 66 00:03:56,200 --> 00:03:57,839 Speaker 1: is there right now and he agrees with you. There 67 00:03:57,920 --> 00:04:01,200 Speaker 1: must be a debt workout. Why do the elites of 68 00:04:01,320 --> 00:04:04,320 Speaker 1: central core Europe don't want to do what you want 69 00:04:04,360 --> 00:04:07,080 Speaker 1: to do and what politic War wants to do because 70 00:04:07,080 --> 00:04:10,040 Speaker 1: it's called politics, because it isn't just they don't want 71 00:04:10,040 --> 00:04:12,680 Speaker 1: to open up their wallet. Well, it's a communisturation out, 72 00:04:12,800 --> 00:04:14,880 Speaker 1: it's a combination of things. I think there's there's a 73 00:04:15,000 --> 00:04:19,960 Speaker 1: deep seated kind of resistance to UH to dead relief 74 00:04:20,040 --> 00:04:25,039 Speaker 1: because it's hard to sell to the their local constituencies 75 00:04:25,080 --> 00:04:28,280 Speaker 1: and taxpayers. It's clear, but when we're talking dead relief, 76 00:04:28,320 --> 00:04:30,839 Speaker 1: we're not on nominal haircuts because this is this is 77 00:04:30,880 --> 00:04:34,719 Speaker 1: money lent by the official sector now and so you 78 00:04:34,760 --> 00:04:37,400 Speaker 1: can't tell the taxpayer. Well, you know, sorry, we told 79 00:04:37,400 --> 00:04:39,440 Speaker 1: you're gonna we're lending grace, but we're gonna get the 80 00:04:39,480 --> 00:04:42,039 Speaker 1: money back. You know, I guess what we're not. It 81 00:04:42,160 --> 00:04:47,520 Speaker 1: will be extending the maturities longer, gray spirits and hopefully 82 00:04:47,520 --> 00:04:51,919 Speaker 1: also locking in lower rates. So that part is that, 83 00:04:52,000 --> 00:04:54,400 Speaker 1: and part is that they're not trusting the Greek political 84 00:04:55,000 --> 00:04:58,120 Speaker 1: elite in the Greek political system, and that's why any 85 00:04:58,200 --> 00:04:59,839 Speaker 1: kind of dead relief is going to go hand in 86 00:05:00,000 --> 00:05:05,520 Speaker 1: and with conditionality, with an assistance that Greece continues through 87 00:05:05,520 --> 00:05:08,240 Speaker 1: the structure of films for some time. That's the time 88 00:05:08,279 --> 00:05:10,039 Speaker 1: we have. Thank thank you so much for coming. We 89 00:05:10,040 --> 00:05:12,080 Speaker 1: could go on and please don't be a stranger to 90 00:05:12,160 --> 00:05:14,120 Speaker 1: that remote we're gonna, we're gonna get to the island. 91 00:05:14,720 --> 00:05:16,839 Speaker 1: Thank you very much. David, give us Audi here and 92 00:05:16,839 --> 00:05:19,159 Speaker 1: I need to do a data checker. Unfortunately, we're pleasure 93 00:05:19,160 --> 00:05:21,359 Speaker 1: of George pop Constantina with us the former finance Minister 94 00:05:21,400 --> 00:05:24,200 Speaker 1: of Greece, Joan Bloomberg eleven three oh studios here in 95 00:05:24,200 --> 00:05:27,880 Speaker 1: New York today. Decisively, the curve is flattened below where 96 00:05:27,880 --> 00:05:29,920 Speaker 1: we were in November eighth. We have had a full 97 00:05:29,960 --> 00:05:33,479 Speaker 1: circle on the November eighth Trump trade if you will 98 00:05:33,560 --> 00:05:36,240 Speaker 1: for the president, not all because of the president, but 99 00:05:36,640 --> 00:05:40,040 Speaker 1: we had a steeper yield curve enthusiasm about fiscal policy 100 00:05:40,680 --> 00:05:43,679 Speaker 1: in at nineties six basis points. We are decisively below 101 00:05:43,680 --> 00:05:47,560 Speaker 1: where we were the evening of that election. Worldwide, this 102 00:05:47,720 --> 00:06:02,960 Speaker 1: is Bloomberg Chris Kasanti with us who wants like next 103 00:06:02,960 --> 00:06:05,600 Speaker 1: to no stocks, He's like, really a focus port folio 104 00:06:05,760 --> 00:06:08,760 Speaker 1: is alphabet? Is I hate to call it? Is alphabet 105 00:06:08,839 --> 00:06:11,760 Speaker 1: part of your your wisdom? It is not, Tom, although 106 00:06:11,760 --> 00:06:14,320 Speaker 1: Apple is Apple is one of our largest positions, mostly 107 00:06:14,320 --> 00:06:16,160 Speaker 1: because it's gone upset. How do you do that? This 108 00:06:16,200 --> 00:06:18,160 Speaker 1: is you know we're coming up on the sea if 109 00:06:18,320 --> 00:06:21,880 Speaker 1: exam so we get a little wonky in the in 110 00:06:21,920 --> 00:06:23,839 Speaker 1: the June Chris Krossani, what do you do when you 111 00:06:23,880 --> 00:06:26,279 Speaker 1: go in with a three or four percent position and 112 00:06:26,400 --> 00:06:30,560 Speaker 1: heaven forbid your successful and it becomes a seven percent position? 113 00:06:30,960 --> 00:06:32,560 Speaker 1: What do you do? Is small? For us, Tom, I 114 00:06:32,600 --> 00:06:34,800 Speaker 1: mean our average position size is five or six percent, 115 00:06:34,920 --> 00:06:38,359 Speaker 1: So you percent Tom, so we won't go over to 116 00:06:38,400 --> 00:06:41,440 Speaker 1: double digits. But for Apple it made sense value wise. 117 00:06:41,520 --> 00:06:45,000 Speaker 1: It was ex cash nine months ago, now less than 118 00:06:45,040 --> 00:06:48,159 Speaker 1: ten times earnings. It checked all the boxes. So what 119 00:06:48,200 --> 00:06:50,159 Speaker 1: do you do with the funds? Just just sell Apple? 120 00:06:50,160 --> 00:06:53,320 Speaker 1: When you get up to ten percent coverage, do you say, Hey, 121 00:06:53,360 --> 00:06:55,960 Speaker 1: that worked out, Let's find something the same. How do 122 00:06:56,040 --> 00:06:59,320 Speaker 1: you find the next value the next Apple? Well, when 123 00:06:59,360 --> 00:07:01,880 Speaker 1: you have the luxure of only owning eighteen stocks and 124 00:07:01,880 --> 00:07:05,080 Speaker 1: you're only buying four or five a year, um, it's 125 00:07:05,160 --> 00:07:07,400 Speaker 1: it's really a one off. We're not saying, oh, let's 126 00:07:07,400 --> 00:07:09,000 Speaker 1: go into this field, let's go into that. We we're 127 00:07:09,000 --> 00:07:11,760 Speaker 1: looking at the numbers are each individual company. So that's 128 00:07:11,920 --> 00:07:14,840 Speaker 1: a real luxury in our clients are not expecting quarter 129 00:07:14,880 --> 00:07:17,000 Speaker 1: by quarter results to beat the SMP. But over a 130 00:07:17,000 --> 00:07:18,679 Speaker 1: long period of time, we had a lot of value. 131 00:07:18,880 --> 00:07:21,960 Speaker 1: Give us a sense of of what you think happened yesterday. Yes, 132 00:07:22,040 --> 00:07:25,960 Speaker 1: the story continues to evolve and undulate, but we've had 133 00:07:25,960 --> 00:07:28,119 Speaker 1: a lot of uncertainty and a lot of these stories 134 00:07:28,120 --> 00:07:30,280 Speaker 1: pop up over the last hundred plus days. What was 135 00:07:30,280 --> 00:07:32,840 Speaker 1: it about yesterday that that spooked the market? No, no, no, 136 00:07:32,880 --> 00:07:34,920 Speaker 1: I think it's a uh, David, I think it's a 137 00:07:34,960 --> 00:07:37,840 Speaker 1: significant event because for the first time since the election, 138 00:07:37,880 --> 00:07:40,200 Speaker 1: after all these crazy things from the White House, we 139 00:07:40,320 --> 00:07:42,800 Speaker 1: finally got something that bled over into the market. Now 140 00:07:43,000 --> 00:07:45,560 Speaker 1: is it a seminal event. I don't think so. So 141 00:07:45,680 --> 00:07:49,600 Speaker 1: everyone's talking impeachment. Everybody's talking the president is mortally wounded. 142 00:07:49,840 --> 00:07:52,600 Speaker 1: We don't believe that's true. The Republicans still control both 143 00:07:52,600 --> 00:07:55,840 Speaker 1: houses of Congress. The president still has enormous leverage under 144 00:07:55,840 --> 00:08:00,000 Speaker 1: our political system. Once we stop talking about independent Council 145 00:08:00,080 --> 00:08:03,640 Speaker 1: for a moment and then start talking again about regulatory reform, 146 00:08:03,720 --> 00:08:06,840 Speaker 1: tax reform, I think you'll see the market start to rebound. 147 00:08:07,080 --> 00:08:09,280 Speaker 1: I don't think. I think this is a blip, not 148 00:08:09,480 --> 00:08:12,880 Speaker 1: a reversal. How much do you allow yourself as an 149 00:08:12,880 --> 00:08:15,600 Speaker 1: investor to be swayed by sentiment? It seems like yesterday was, 150 00:08:15,640 --> 00:08:19,240 Speaker 1: at least in part, a sentiment driven event. I think 151 00:08:19,280 --> 00:08:22,880 Speaker 1: it's almost entirely sentiment driven event. In fact, I think 152 00:08:23,280 --> 00:08:26,280 Speaker 1: moments like that where the vix spikes twenty or twent 153 00:08:26,920 --> 00:08:30,360 Speaker 1: in a day, those are the opportunistic moments rather than 154 00:08:30,360 --> 00:08:32,520 Speaker 1: the moments to head for the sidelines. And I'm not 155 00:08:32,559 --> 00:08:35,280 Speaker 1: talking about you know, bi speculative stuff. But when you 156 00:08:35,280 --> 00:08:37,880 Speaker 1: get a Wells Fargo or a Slumberge that that are 157 00:08:37,920 --> 00:08:41,880 Speaker 1: trading near their cycle lows, the panic of yesterday would 158 00:08:41,880 --> 00:08:43,720 Speaker 1: be a good time. And maybe the panic of today too, 159 00:08:44,040 --> 00:08:45,280 Speaker 1: was it? Was it a good time to buy? Where 160 00:08:45,280 --> 00:08:48,120 Speaker 1: did you see the opportunity yesterday? We did buy some 161 00:08:48,160 --> 00:08:52,160 Speaker 1: more Wells Fargo yesterday, for example, I think the premier bank. 162 00:08:52,360 --> 00:08:54,199 Speaker 1: I think over the next ten years, if you pull 163 00:08:54,240 --> 00:08:57,040 Speaker 1: back the lens and think broadly, we're gonna banks are 164 00:08:57,040 --> 00:09:00,240 Speaker 1: going to be doing more banking and less invest spend 165 00:09:00,400 --> 00:09:02,360 Speaker 1: M and A stuff over the next ten years. And 166 00:09:02,400 --> 00:09:05,240 Speaker 1: Wells Fargo is perfectly positioned for that. We talked about 167 00:09:05,240 --> 00:09:09,680 Speaker 1: Walmart earlier, which ten years trailing seven points something percent 168 00:09:09,720 --> 00:09:12,440 Speaker 1: per year. I'm just gonna call it a mediocrity just 169 00:09:12,480 --> 00:09:15,600 Speaker 1: as a general statement. What sticks out like a sore 170 00:09:15,679 --> 00:09:19,120 Speaker 1: thumb is they've got the cash flow of an island nation, right, 171 00:09:19,360 --> 00:09:22,240 Speaker 1: and I don't believe they're giving it the shareholders. Am 172 00:09:22,240 --> 00:09:25,880 Speaker 1: I too harsh? Well? You know one, it's the law 173 00:09:25,920 --> 00:09:29,719 Speaker 1: of large numbers. It's you know, sere for such a 174 00:09:29,760 --> 00:09:33,040 Speaker 1: big company. Ain't bad um. But the second thing is wow, 175 00:09:33,160 --> 00:09:37,440 Speaker 1: talk about competitive challenges obviously from Amazon, but from other 176 00:09:37,480 --> 00:09:40,960 Speaker 1: places as well. We have a German UH discount grocer 177 00:09:41,000 --> 00:09:44,199 Speaker 1: coming into the market right now, etcetera, etcetera. They may 178 00:09:44,200 --> 00:09:47,240 Speaker 1: be conservative in hoarding their cash because they see things 179 00:09:47,240 --> 00:09:49,240 Speaker 1: that you and I aren't seeing. Right, I'll go with that, 180 00:09:49,320 --> 00:09:53,000 Speaker 1: but come on, well, we Chrissanti with this with a 181 00:09:53,040 --> 00:09:56,760 Speaker 1: grossanti capital management. And I guess I don't want you 182 00:09:56,800 --> 00:09:58,360 Speaker 1: to come in on a tweet, Chris, but I do 183 00:09:58,440 --> 00:10:02,120 Speaker 1: want you to comment on the effect of Washington upon 184 00:10:02,320 --> 00:10:07,520 Speaker 1: market animal spirit. Forget about nominal GDP, just the enthusiasm 185 00:10:07,559 --> 00:10:11,800 Speaker 1: and confidence of the markets. Well, it's funny. I'm reminded 186 00:10:11,800 --> 00:10:14,120 Speaker 1: eight years ago every time during the financial crisis when 187 00:10:14,120 --> 00:10:16,840 Speaker 1: Obama would get on TV, the market would start to 188 00:10:16,960 --> 00:10:19,440 Speaker 1: remember this go down a hundred two hundred points. And 189 00:10:19,440 --> 00:10:21,840 Speaker 1: and every time I see one of these tweets, especially 190 00:10:21,840 --> 00:10:25,560 Speaker 1: now that we're in the firestorm. Uh, I almost said 191 00:10:25,600 --> 00:10:27,640 Speaker 1: on television this morning, Tom that that at least we 192 00:10:27,720 --> 00:10:29,840 Speaker 1: haven't had a tweet, maybe he's gotten some religion. And 193 00:10:29,840 --> 00:10:32,000 Speaker 1: of course I was forty five minutes too early, thinking that, 194 00:10:33,280 --> 00:10:37,400 Speaker 1: remember done, and and what the market cares about, it 195 00:10:37,400 --> 00:10:39,760 Speaker 1: obviously is not Trump. It cares about tax reform, it 196 00:10:39,800 --> 00:10:43,080 Speaker 1: cares about regulatory relief, and and just this gets in 197 00:10:43,080 --> 00:10:46,680 Speaker 1: the way. And so what we're hoping for is is 198 00:10:46,720 --> 00:10:49,240 Speaker 1: it too much to ask for twelve hours of radio 199 00:10:49,320 --> 00:10:52,560 Speaker 1: silence of Paul Ryan leading with tax reform instead of 200 00:10:52,559 --> 00:10:55,240 Speaker 1: Independent Council. I think he would prefer that as well. 201 00:10:55,320 --> 00:10:57,320 Speaker 1: Mr Ryan would prefer that Let get your sense of 202 00:10:57,360 --> 00:10:59,760 Speaker 1: the economy right now, let's move away from from politics. 203 00:10:59,800 --> 00:11:02,160 Speaker 1: When you look at the fundamentals how this us. Never 204 00:11:02,320 --> 00:11:05,040 Speaker 1: think with the market yesterday and today that the things were, 205 00:11:05,200 --> 00:11:06,480 Speaker 1: you know, quite as good as they are. You have 206 00:11:06,520 --> 00:11:08,400 Speaker 1: I S M numbers that are in the mid fifties, 207 00:11:08,720 --> 00:11:11,760 Speaker 1: you've got corporate profits that are beating estimates in the 208 00:11:11,800 --> 00:11:16,520 Speaker 1: first quarter, and you've got things accelerating. So we're actually excited. 209 00:11:16,679 --> 00:11:19,920 Speaker 1: We're buying high quality names at the sell off discount 210 00:11:20,000 --> 00:11:23,840 Speaker 1: prices of yesterday and perhaps today. So I'm looking forward 211 00:11:23,880 --> 00:11:26,679 Speaker 1: to this being an opportunity as we get to the 212 00:11:26,760 --> 00:11:30,160 Speaker 1: kind of long slog of the methodical and thankfully quiet 213 00:11:30,240 --> 00:11:35,080 Speaker 1: work of the Independent Council steptail the two of these things. UH, 214 00:11:35,080 --> 00:11:36,880 Speaker 1: there was a time right after the election when people 215 00:11:36,880 --> 00:11:39,040 Speaker 1: were buying stox based on where they thought the new 216 00:11:39,120 --> 00:11:41,880 Speaker 1: administration was going to go. When you look at tax reform, 217 00:11:41,920 --> 00:11:45,520 Speaker 1: regulatory reform, healthcare reform, UH dovetailed with with where the 218 00:11:45,520 --> 00:11:48,120 Speaker 1: economist day, are there opportunities there are still in terms 219 00:11:48,160 --> 00:11:50,439 Speaker 1: of what you think that the legislative priorities are in 220 00:11:50,679 --> 00:11:52,480 Speaker 1: Washington are the things that you think a would David, 221 00:11:52,480 --> 00:11:55,960 Speaker 1: because what I think has happened is, starting yesterday, the 222 00:11:55,960 --> 00:11:58,800 Speaker 1: market seems to be discounting no tax reformat and it's 223 00:11:58,840 --> 00:12:00,840 Speaker 1: going to be a tough slog. Believe it's an uphill fight, 224 00:12:00,920 --> 00:12:03,960 Speaker 1: even though the Republicans have both houses. But it's there's 225 00:12:03,960 --> 00:12:06,960 Speaker 1: not a zero chance. You know, I'm thinking fifty fifty, 226 00:12:07,120 --> 00:12:09,920 Speaker 1: especially on corporate tax reform, and maybe better than fifty fifty. 227 00:12:09,960 --> 00:12:12,080 Speaker 1: So if we get something like that, there are a 228 00:12:12,200 --> 00:12:15,560 Speaker 1: number of companies in everybody's portfolio that will benefit to 229 00:12:15,600 --> 00:12:18,360 Speaker 1: the tune of ten or twenty earnings growth without doing 230 00:12:18,360 --> 00:12:21,360 Speaker 1: a thing from corporate tax reforms. So we're hopeful that 231 00:12:21,360 --> 00:12:24,280 Speaker 1: that comes back to the headlines rather than all this stuff. 232 00:12:24,280 --> 00:12:28,240 Speaker 1: You like Milon, and I love the rationale you give. 233 00:12:28,480 --> 00:12:30,880 Speaker 1: We love a company with low expectations. Sure sure, Now 234 00:12:31,600 --> 00:12:35,559 Speaker 1: Milan is the Teresa May of the stuff you come on. 235 00:12:35,880 --> 00:12:38,520 Speaker 1: You see Milon, You're not thinking things are gonna be 236 00:12:38,600 --> 00:12:40,559 Speaker 1: very good, and they surprise you on the upside. So 237 00:12:40,720 --> 00:12:43,240 Speaker 1: what Milon has against it is a tough headwin. In 238 00:12:43,280 --> 00:12:45,880 Speaker 1: generic drugs, this year and next year it's sold off 239 00:12:45,880 --> 00:12:48,839 Speaker 1: more than fifty. But what people don't think about is 240 00:12:48,880 --> 00:12:51,040 Speaker 1: it's one of the two or three big companies that 241 00:12:51,080 --> 00:12:54,920 Speaker 1: has the wherewithal to really generic size these blockbuster dugs. 242 00:12:54,960 --> 00:12:56,720 Speaker 1: It's just going to cost a lot of money and 243 00:12:56,760 --> 00:12:59,480 Speaker 1: over again. Remember our time period is four to five years. 244 00:12:59,760 --> 00:13:03,360 Speaker 1: We're thinking this is where healthcare is going, and Miland 245 00:13:03,440 --> 00:13:07,440 Speaker 1: is right there at the intersection. Loyal I want to 246 00:13:07,440 --> 00:13:09,360 Speaker 1: go on oil where it's just been range bound with 247 00:13:09,440 --> 00:13:13,400 Speaker 1: a saggy is to one on imax, and I mean 248 00:13:13,440 --> 00:13:16,320 Speaker 1: the hydrocarbons have the life of their own. How do 249 00:13:16,400 --> 00:13:19,200 Speaker 1: you deal with that? You know, you take the long view, tom, 250 00:13:19,240 --> 00:13:24,040 Speaker 1: I mean the positive on oil, especially on the bigger 251 00:13:24,080 --> 00:13:27,199 Speaker 1: ones because the bigger ones that they've done the investing, 252 00:13:27,360 --> 00:13:29,840 Speaker 1: the ten years worth of investing to big to drill 253 00:13:29,920 --> 00:13:32,480 Speaker 1: deep holes in the water or in cold areas, and 254 00:13:32,520 --> 00:13:34,600 Speaker 1: now they're finally going to get the cash flow from that. 255 00:13:35,200 --> 00:13:38,000 Speaker 1: But all the companies, because of the oil crash over 256 00:13:38,080 --> 00:13:41,120 Speaker 1: last year's have under invested. So we're gonna start to 257 00:13:41,200 --> 00:13:43,000 Speaker 1: run out, whether it's at the end of this year, 258 00:13:43,040 --> 00:13:45,320 Speaker 1: whether it's two years from now, four or five years 259 00:13:45,320 --> 00:13:48,160 Speaker 1: from now. That price is going to be higher. Chris Kasanti, 260 00:13:48,240 --> 00:13:49,640 Speaker 1: thank you so much. We need to go back to 261 00:13:49,679 --> 00:13:54,400 Speaker 1: Martin Schenker has given a terrific perspective in Washington Or 262 00:13:54,400 --> 00:13:56,800 Speaker 1: there's work over decades with Bloomberg News and of course 263 00:13:56,880 --> 00:14:06,240 Speaker 1: with The Wall Street Journalism brought to you by Bank 264 00:14:06,280 --> 00:14:10,319 Speaker 1: of America. Mary Lynch dedicated to bringing our clients insights 265 00:14:10,320 --> 00:14:13,960 Speaker 1: and solutions to meet the challenges of a transforming world. 266 00:14:14,440 --> 00:14:18,160 Speaker 1: That's the power of global connections. Mary Lynch, Pierce Feeder 267 00:14:18,240 --> 00:14:27,720 Speaker 1: and Smith Incorporated Member s I p C. There's something 268 00:14:27,720 --> 00:14:31,160 Speaker 1: new from Bloomberg. It's called Lens. Starting right now, you 269 00:14:31,160 --> 00:14:35,280 Speaker 1: can use the Bloomberg iOS app off your iPhone or iPad, 270 00:14:35,840 --> 00:14:39,760 Speaker 1: or our new Google Chrome extension to read any news 271 00:14:39,760 --> 00:14:44,120 Speaker 1: story on any website, scan it, and then instantly see 272 00:14:44,160 --> 00:14:48,280 Speaker 1: the news stories relevant market data from Bloomberg. In addition, 273 00:14:48,600 --> 00:14:51,640 Speaker 1: see all the bios of the key people mentioned in 274 00:14:51,720 --> 00:14:54,920 Speaker 1: the story. It's called Lens, and it is just that, 275 00:14:55,080 --> 00:14:58,200 Speaker 1: a lens into the people and the data of any 276 00:14:58,280 --> 00:15:02,160 Speaker 1: story you may be reading. Again, Lens brings you the 277 00:15:02,200 --> 00:15:05,680 Speaker 1: power of Bloomberg's news and data. Download or io s 278 00:15:05,720 --> 00:15:09,040 Speaker 1: app or search for the Bloomberg extension at the Chrome 279 00:15:09,160 --> 00:15:12,600 Speaker 1: Store to try lens out. Learn more at Bloomberg dot 280 00:15:12,640 --> 00:15:20,040 Speaker 1: com slash lens. Let's go to Greg Value now. He's 281 00:15:20,040 --> 00:15:23,160 Speaker 1: the chief global strategist at Horizon Investments. He joins us 282 00:15:23,320 --> 00:15:25,600 Speaker 1: always valuable to check in with Greg get a sense 283 00:15:25,640 --> 00:15:28,600 Speaker 1: of what's going on in Washington, the pulse of Washington. 284 00:15:28,680 --> 00:15:30,720 Speaker 1: We're looking at some tweets fired off by the President 285 00:15:30,760 --> 00:15:33,040 Speaker 1: this morning, one of which reads, this is the single 286 00:15:33,080 --> 00:15:35,920 Speaker 1: greatest which hunt of a politician in American history. That 287 00:15:35,960 --> 00:15:39,360 Speaker 1: comes after the assistant the Deputy Attorney General yesterday named 288 00:15:39,360 --> 00:15:42,040 Speaker 1: a special counsel to look into Russia's involvement in the 289 00:15:42,120 --> 00:15:44,920 Speaker 1: US presidential election. That's Robert Mueller, the former director of 290 00:15:44,960 --> 00:15:48,720 Speaker 1: the FBI, former of Council at Wilmer Haile. Greg, great 291 00:15:48,760 --> 00:15:52,280 Speaker 1: to have you with us. Uh, what changes here now 292 00:15:52,280 --> 00:15:54,440 Speaker 1: that we've seen the president way in There were a 293 00:15:54,440 --> 00:15:56,840 Speaker 1: few hours of quiet and which we were processing what 294 00:15:57,040 --> 00:15:59,440 Speaker 1: has happened, what was going to happen, what's changed because 295 00:15:59,480 --> 00:16:02,440 Speaker 1: of the eastweet? Well, I tell you, David, I think 296 00:16:02,480 --> 00:16:06,360 Speaker 1: as usual with indiscreet and UH complicates things. To have 297 00:16:06,440 --> 00:16:10,720 Speaker 1: the president already criticizing this process. So I don't think 298 00:16:10,760 --> 00:16:13,360 Speaker 1: he helped his cause, and as we all know, self 299 00:16:13,360 --> 00:16:16,600 Speaker 1: inflicted wounds is one of his specialties. You've wrote about 300 00:16:16,600 --> 00:16:19,880 Speaker 1: loyalty yesterday and this president's relationship to loyalty. We were 301 00:16:19,880 --> 00:16:22,840 Speaker 1: talking with Marty Shanker, our senior executive editor for Government Economics, 302 00:16:22,880 --> 00:16:25,640 Speaker 1: a few minutes ago, and I asked him about the 303 00:16:25,680 --> 00:16:28,760 Speaker 1: short love affair this White House had with Rod Rosenstein 304 00:16:29,160 --> 00:16:31,960 Speaker 1: last week. A lot of praise for him, career prosecutor, 305 00:16:32,080 --> 00:16:35,200 Speaker 1: longtime public servant. It seems now with these tweets, the 306 00:16:35,240 --> 00:16:38,600 Speaker 1: President has turned on mr Mr Rosenstein. What does that 307 00:16:38,640 --> 00:16:41,840 Speaker 1: say to you about loyalty in this president? Well, he 308 00:16:41,920 --> 00:16:44,480 Speaker 1: demands it, but he doesn't give it. Uh. There's been 309 00:16:44,560 --> 00:16:47,200 Speaker 1: stories for the last week or so that he's dissatisfied 310 00:16:47,560 --> 00:16:52,200 Speaker 1: with virtually everyone at the White House, including Jared Kushner. 311 00:16:52,560 --> 00:16:56,000 Speaker 1: So is he now is feuding with all of his 312 00:16:56,240 --> 00:17:00,520 Speaker 1: subordinates That just makes them even less inclined to support Yeah, 313 00:17:01,600 --> 00:17:04,160 Speaker 1: this is fascinating. We've got an extended time with Mr 314 00:17:04,240 --> 00:17:06,840 Speaker 1: Valier this morning, which is always a good and beautiful thing. 315 00:17:07,200 --> 00:17:08,919 Speaker 1: We're going to stay in the theme of the moment, 316 00:17:08,960 --> 00:17:11,680 Speaker 1: and I want to go forward to the midterm elections 317 00:17:11,680 --> 00:17:15,600 Speaker 1: in our next section with Mr Valier, greg is always 318 00:17:15,600 --> 00:17:18,159 Speaker 1: you lead your notes strong this morning with the horizon 319 00:17:18,800 --> 00:17:22,320 Speaker 1: on the Vice President of the United States. Who is 320 00:17:22,920 --> 00:17:27,439 Speaker 1: Mr Pence, the former governor of Indiana, And because of 321 00:17:27,560 --> 00:17:31,879 Speaker 1: who he is, how does he adapt to this? Well, Tom, 322 00:17:32,119 --> 00:17:37,160 Speaker 1: first of all, he is the anti Trump uh low keied, modest, 323 00:17:37,240 --> 00:17:43,080 Speaker 1: doesn't brag, monogamous, deeply religious of altar boy in his youth. 324 00:17:43,480 --> 00:17:46,880 Speaker 1: So from that standpoint, he's different. From a policy standpoint, 325 00:17:47,240 --> 00:17:52,919 Speaker 1: he's more traditionally a Republican, pro trade, pro business. I 326 00:17:53,040 --> 00:17:57,160 Speaker 1: think that the Republican base could very very much get 327 00:17:57,200 --> 00:18:00,439 Speaker 1: along with the president Pence has would the mark. What 328 00:18:00,640 --> 00:18:04,040 Speaker 1: is Pence's relationship with the White House? We have Mondale, 329 00:18:04,080 --> 00:18:08,040 Speaker 1: we have other vice presidents, Mr Biden. Obviously, how do 330 00:18:08,080 --> 00:18:10,520 Speaker 1: you fit Mike Pence into the day to day grind 331 00:18:10,920 --> 00:18:14,080 Speaker 1: of the Trump White House? Well, I think he's one 332 00:18:14,080 --> 00:18:17,159 Speaker 1: of the survivors. Obviously, he fits in pretty well. He 333 00:18:17,200 --> 00:18:20,440 Speaker 1: has great contacts on the Hill, gets along with Paul, 334 00:18:21,000 --> 00:18:24,199 Speaker 1: Paul Ryan and others, So I think he does fit in. 335 00:18:24,320 --> 00:18:26,520 Speaker 1: And this is someone who's got a lot of experience 336 00:18:26,760 --> 00:18:29,439 Speaker 1: as a member of the House, as a governor, and 337 00:18:29,760 --> 00:18:33,720 Speaker 1: I again, in so many respects, Tom he's the anti Trump. 338 00:18:35,000 --> 00:18:39,119 Speaker 1: Let you mentioned the discord within the inner ranks of 339 00:18:39,440 --> 00:18:43,000 Speaker 1: this administration. The president preparing to take his first trip overseas, 340 00:18:43,040 --> 00:18:44,720 Speaker 1: and number of the men and women you mentioned will 341 00:18:44,720 --> 00:18:47,439 Speaker 1: be accompanying him on that that trip. How was the 342 00:18:47,520 --> 00:18:49,640 Speaker 1: discord that we've seen in Washington over these last few 343 00:18:49,720 --> 00:18:52,480 Speaker 1: days going to come come with him to Europe and 344 00:18:52,480 --> 00:18:54,280 Speaker 1: to the Middle East? Or will it? Are they content 345 00:18:54,320 --> 00:18:57,680 Speaker 1: to leave it behind? Well? I think it'll it will 346 00:18:57,720 --> 00:19:01,480 Speaker 1: follow him, and knowing Trump, and I mean, let's face it, guys, 347 00:19:01,520 --> 00:19:04,040 Speaker 1: for the last couple of weeks, there's been a bombshell 348 00:19:04,200 --> 00:19:08,440 Speaker 1: every day, sometimes two bombshells every day. This morning there's 349 00:19:08,720 --> 00:19:12,680 Speaker 1: new reports about from Reuters about contacts with the Russians. 350 00:19:12,720 --> 00:19:16,720 Speaker 1: So it's it's it's an ongoing DRUMA from me, guys, 351 00:19:16,840 --> 00:19:18,840 Speaker 1: I think that the big story is going to be 352 00:19:19,600 --> 00:19:21,520 Speaker 1: his talks with the Israelis. There are a lot of 353 00:19:21,560 --> 00:19:24,720 Speaker 1: prose Raeli folks that I've talked to recently who were 354 00:19:24,760 --> 00:19:29,280 Speaker 1: concerned by what he told Abbas, the Palestinian leader a 355 00:19:29,280 --> 00:19:32,640 Speaker 1: few weeks ago. Will he do things that could make 356 00:19:32,640 --> 00:19:35,600 Speaker 1: the Israelis nervous? Jesus Ford Greg to our next section. 357 00:19:35,680 --> 00:19:38,520 Speaker 1: Can the Republicans lose the House in the mid term? 358 00:19:39,800 --> 00:19:42,639 Speaker 1: They could? I think the odds slightly favored of keeping 359 00:19:42,680 --> 00:19:45,399 Speaker 1: the House. They'll They'll keep the sound for sure. Greg 360 00:19:45,840 --> 00:19:48,119 Speaker 1: joins us. He is from New Hampshire. Greg, when did 361 00:19:48,160 --> 00:19:50,600 Speaker 1: you first learn about Mr Ailes? Was it with Nixon 362 00:19:50,720 --> 00:19:55,000 Speaker 1: or was it a campaign after that with Lee att Water? Well? Yeah, 363 00:19:55,359 --> 00:19:58,320 Speaker 1: during those days, he was a fascinating and polarizing figure 364 00:19:58,359 --> 00:20:00,879 Speaker 1: and he continued to be one for the rest of 365 00:20:00,920 --> 00:20:04,080 Speaker 1: his life. I mean a dramatic impact on all of 366 00:20:04,160 --> 00:20:07,679 Speaker 1: us who are in this industry. How associated is a 367 00:20:07,760 --> 00:20:10,199 Speaker 1: Republican party that you follow every day? We were going 368 00:20:10,240 --> 00:20:12,359 Speaker 1: to talk about the mid terms, which was his belly 369 00:20:12,400 --> 00:20:18,119 Speaker 1: whack years ago. Um. How how Roger ale Z is 370 00:20:18,240 --> 00:20:22,440 Speaker 1: the GOP right now? Well, I think he is one 371 00:20:22,440 --> 00:20:26,280 Speaker 1: of the architects of the agenda, much more combative, far 372 00:20:26,400 --> 00:20:32,240 Speaker 1: less conciliatory, real really going after issues with a ferocity 373 00:20:32,320 --> 00:20:36,720 Speaker 1: that we hadn't seen in previous decades. When you look 374 00:20:36,720 --> 00:20:39,160 Speaker 1: at the mid terms and we are still a few 375 00:20:39,160 --> 00:20:41,840 Speaker 1: months out from from them taking place, what is what 376 00:20:41,880 --> 00:20:44,160 Speaker 1: we've seen over the last week in terms of how 377 00:20:44,320 --> 00:20:47,680 Speaker 1: lawmakers on Capitol will have regarded and positioned themselves relative 378 00:20:47,680 --> 00:20:50,080 Speaker 1: to the president. Tell you about how they'll do that 379 00:20:50,200 --> 00:20:52,199 Speaker 1: going into the mid terms. Is this the president they 380 00:20:52,200 --> 00:20:56,440 Speaker 1: want to continue to affiliate themselves with. For now, I 381 00:20:56,800 --> 00:21:00,720 Speaker 1: don't see a total rupture, but you know, the cliche 382 00:21:00,880 --> 00:21:03,359 Speaker 1: is a week is a lifetime in politics, and you 383 00:21:03,400 --> 00:21:06,040 Speaker 1: know the following eighteen is a long long way off, 384 00:21:06,119 --> 00:21:09,160 Speaker 1: so you know, things things could change. I do think 385 00:21:09,560 --> 00:21:14,160 Speaker 1: if if the new special prosecutor it gets more bombshells, 386 00:21:14,280 --> 00:21:17,160 Speaker 1: if we hear more about Trump and Russia, you will 387 00:21:17,200 --> 00:21:21,000 Speaker 1: see a lot of Republicans, especially in the North, abandon him. 388 00:21:21,200 --> 00:21:24,080 Speaker 1: Not that I would ever correct Greg, Yeah, but Mr Gurl, 389 00:21:24,080 --> 00:21:26,639 Speaker 1: I would suggest it a week is not a lifetime 390 00:21:26,720 --> 00:21:31,920 Speaker 1: and it's more like three hours. Or trying to get David, 391 00:21:33,000 --> 00:21:34,480 Speaker 1: what are you looking for out of this trip that 392 00:21:34,560 --> 00:21:37,160 Speaker 1: the president is going to take. Is the achievement going 393 00:21:37,200 --> 00:21:39,760 Speaker 1: to be him successfully navigating these ten days on the 394 00:21:39,840 --> 00:21:42,320 Speaker 1: road or is there a broader theme to the trip 395 00:21:42,359 --> 00:21:45,520 Speaker 1: that he's about to take. Well, I tell you, excuse 396 00:21:45,560 --> 00:21:48,280 Speaker 1: my French, but they just can't screw up. I mean, 397 00:21:48,440 --> 00:21:51,000 Speaker 1: I think that's a low bar to clear, but that 398 00:21:51,000 --> 00:21:53,440 Speaker 1: that is something they have to avoid. Any kind of 399 00:21:53,680 --> 00:21:57,119 Speaker 1: clubs or faux pas things like that. Beyond that, I 400 00:21:57,560 --> 00:22:01,840 Speaker 1: would look at the Israeli talks because there's speculation that 401 00:22:01,920 --> 00:22:05,600 Speaker 1: when a boss, the Palestinian leader, was in Washington, Trump 402 00:22:05,640 --> 00:22:08,199 Speaker 1: made him some assurances, and I think a lot of 403 00:22:08,200 --> 00:22:13,160 Speaker 1: the pro Israeli types are apprehensive about what assurances were given. 404 00:22:14,320 --> 00:22:16,920 Speaker 1: If we could get back to economics, thank you, folks. Well, 405 00:22:16,960 --> 00:22:20,240 Speaker 1: what's your emails about? You know? The news flow, Greg Velier, 406 00:22:20,320 --> 00:22:23,879 Speaker 1: our Vincent del Judais has an important single sentence. The 407 00:22:24,000 --> 00:22:27,080 Speaker 1: government also reports that the total number of workers on 408 00:22:27,200 --> 00:22:32,760 Speaker 1: unemployment roles dropped, falling to the lowest level since Watergate 409 00:22:34,000 --> 00:22:38,840 Speaker 1: three in the weekending May six. This is two Americas, 410 00:22:39,119 --> 00:22:42,560 Speaker 1: and yet your new Hampshire is in some ways flat 411 00:22:42,600 --> 00:22:47,280 Speaker 1: on its back. How the polarity of our job economy 412 00:22:47,480 --> 00:22:51,040 Speaker 1: is extraordinary. You know, I was in the Hampshire a 413 00:22:51,040 --> 00:22:54,000 Speaker 1: couple of weeks ago. They've run out of workers. Everywhere 414 00:22:54,040 --> 00:22:57,080 Speaker 1: you go. You see signs help wanted. When I travel 415 00:22:57,119 --> 00:23:01,160 Speaker 1: around America, Tom I asked business leaders, what's your this problem? 416 00:23:01,200 --> 00:23:05,439 Speaker 1: And they all unanimously say, lack of skill labor. Where's 417 00:23:05,480 --> 00:23:09,200 Speaker 1: the wage growth? O wise one, Well, I think it's coming. 418 00:23:09,280 --> 00:23:12,160 Speaker 1: It's it certainly has taken a while, but if you're 419 00:23:12,240 --> 00:23:15,240 Speaker 1: Jenny Yellen, you gotta worry that by fall they could 420 00:23:15,240 --> 00:23:18,000 Speaker 1: be way behind the curve. By fall, we can see 421 00:23:18,000 --> 00:23:21,000 Speaker 1: wages really taking off with the feeds still being maybe 422 00:23:21,000 --> 00:23:23,880 Speaker 1: to accommodator, Greg ll Thank you so much. We value 423 00:23:23,920 --> 00:23:36,480 Speaker 1: your tendencies with Horizon Investment. Thanks for listening to the 424 00:23:36,480 --> 00:23:43,320 Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 425 00:23:43,720 --> 00:23:47,560 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 426 00:23:47,600 --> 00:23:52,280 Speaker 1: Tom Keene David Gura? Is that David Gura? Before the podcast? 427 00:23:52,560 --> 00:24:00,320 Speaker 1: You can always catch us worldwide on Bloomberg Radio. Yeah. 428 00:24:06,640 --> 00:24:10,159 Speaker 1: Brought you by Bank of America. Mary Lynch. Dedicated to 429 00:24:10,280 --> 00:24:14,159 Speaker 1: bringing our clients insights and solutions to meet the challenges 430 00:24:14,280 --> 00:24:18,000 Speaker 1: of a transforming world. That's the power of global connections. 431 00:24:18,400 --> 00:24:22,919 Speaker 1: Mary Lynch, Pierce, Fenner and Smith Incorporated Member s I 432 00:24:23,080 --> 00:24:23,359 Speaker 1: p C.