1 00:00:00,320 --> 00:00:04,160 Speaker 1: Who you put your trust in matters. Investors have put 2 00:00:04,200 --> 00:00:07,600 Speaker 1: their trust in independent registered investment advisors to the tune 3 00:00:07,640 --> 00:00:12,240 Speaker 1: of four trillion dollars. Why learn more and find your 4 00:00:12,240 --> 00:00:27,240 Speaker 1: independent advisor dot com. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:27,280 --> 00:00:31,320 Speaker 1: I'm Tom Keane. Always with Michael McKee. Daily we bring 6 00:00:31,360 --> 00:00:35,280 Speaker 1: you insight from the best in economics, finance, investment, and 7 00:00:35,360 --> 00:00:41,519 Speaker 1: international relations. Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, 8 00:00:41,560 --> 00:00:48,760 Speaker 1: and of course on the Bloomberg Good Morning. Have you won? 9 00:00:48,800 --> 00:00:52,960 Speaker 1: Bloomberg Surveillance, Economics, Finance and investment in Folding it in 10 00:00:53,720 --> 00:00:58,280 Speaker 1: Michael McKee International Relations, Mike, do we dash to the election? Now? 11 00:00:58,840 --> 00:01:02,680 Speaker 1: All the newspapers have election articles this morning. Again there 12 00:01:02,720 --> 00:01:04,680 Speaker 1: are polls out and it's going to be the silly 13 00:01:04,680 --> 00:01:07,800 Speaker 1: season starting now. It's Labor Day that everybody starts to 14 00:01:07,800 --> 00:01:10,040 Speaker 1: focus on what's going to happen in the election. And 15 00:01:10,360 --> 00:01:13,600 Speaker 1: one of the questions, well, it sort of folds into 16 00:01:13,640 --> 00:01:16,679 Speaker 1: two questions that people have is how does it affect 17 00:01:16,760 --> 00:01:19,280 Speaker 1: business decision making? Do you sit on your hands? Do 18 00:01:19,319 --> 00:01:21,959 Speaker 1: you invest while you wait to see? And then how 19 00:01:21,959 --> 00:01:24,360 Speaker 1: does it affect the Central Bank? Do they sit on 20 00:01:24,400 --> 00:01:25,920 Speaker 1: their hands because they don't want to get in the 21 00:01:25,920 --> 00:01:28,959 Speaker 1: middle of the election campaign. Uh. It also seems to 22 00:01:28,959 --> 00:01:32,880 Speaker 1: affect other people, UM, like Vladimir Putin, who seems to 23 00:01:33,280 --> 00:01:36,640 Speaker 1: want to take sides in this whole thing. UH, which 24 00:01:36,680 --> 00:01:38,440 Speaker 1: is why we have Bob Hormats with us, the vice 25 00:01:38,520 --> 00:01:41,240 Speaker 1: chairman of Kissinger Associates in a long time UH State 26 00:01:41,280 --> 00:01:46,480 Speaker 1: Department Treasury official. UM. The man who knows. UM, I 27 00:01:46,480 --> 00:01:50,200 Speaker 1: know you were talking with Tom earlier on on surveillance 28 00:01:50,240 --> 00:01:55,120 Speaker 1: television about this whole idea of Russia being involved in 29 00:01:55,200 --> 00:01:59,520 Speaker 1: the in the US election. UM. Do you think they 30 00:01:59,520 --> 00:02:03,960 Speaker 1: are at stively working to influence who the next president is? 31 00:02:04,280 --> 00:02:08,799 Speaker 1: Or are they just sewing mischief for mischief's sake? It's 32 00:02:08,919 --> 00:02:10,840 Speaker 1: very hard to say, and there's a lot of evidence 33 00:02:10,880 --> 00:02:17,680 Speaker 1: that they're intervening in our electoral affairs. Exactly who's doing it, 34 00:02:18,040 --> 00:02:20,080 Speaker 1: I don't know, but it's hard to imagine it can 35 00:02:20,120 --> 00:02:23,480 Speaker 1: be done without the acquiescence of the of the government 36 00:02:23,880 --> 00:02:27,640 Speaker 1: and of Putin. Whether it is to discredit the electoral 37 00:02:27,720 --> 00:02:33,679 Speaker 1: process or to elect Trump, who has expressed a lot 38 00:02:33,720 --> 00:02:37,560 Speaker 1: of admiration for Putin, is very hard to say. But 39 00:02:37,639 --> 00:02:41,400 Speaker 1: in either case, it's highly disruptive, and Obama called him 40 00:02:41,400 --> 00:02:44,720 Speaker 1: on it yesterday in his press conference and said he 41 00:02:44,800 --> 00:02:47,679 Speaker 1: raised this issue. He did not want getting to get 42 00:02:47,720 --> 00:02:50,200 Speaker 1: into a cyber war, but he said if there were one, 43 00:02:50,240 --> 00:02:54,240 Speaker 1: the United States has a lot of offensive and defensive capabilities, 44 00:02:55,080 --> 00:02:58,000 Speaker 1: and more than any other country, and at some point 45 00:02:58,520 --> 00:03:01,560 Speaker 1: the United States can't simply say we don't like this, 46 00:03:01,639 --> 00:03:04,240 Speaker 1: can simply protest. The United States is going to have 47 00:03:04,320 --> 00:03:07,600 Speaker 1: to take some actions. What they are, I don't know, 48 00:03:07,880 --> 00:03:10,520 Speaker 1: but I don't think you can simply take this lying down. 49 00:03:10,560 --> 00:03:14,120 Speaker 1: A foreign country, Russia in particular, interfering in the American 50 00:03:14,160 --> 00:03:17,400 Speaker 1: electoral process, particularly if it's in behalf of one candidate 51 00:03:17,880 --> 00:03:20,600 Speaker 1: over another, it seems to me as totally unacceptable and 52 00:03:21,000 --> 00:03:24,960 Speaker 1: requires a very stiff American response. What that will be. 53 00:03:25,480 --> 00:03:28,200 Speaker 1: I leave to those in Washington who are more familiar 54 00:03:28,200 --> 00:03:30,600 Speaker 1: with the technology that we have to deal with it, 55 00:03:30,639 --> 00:03:33,720 Speaker 1: but deal with it at some point we may well 56 00:03:33,840 --> 00:03:37,640 Speaker 1: have to shot across the bow, as it were. I 57 00:03:37,720 --> 00:03:40,560 Speaker 1: don't think you can simply take it lying down. This 58 00:03:40,680 --> 00:03:45,760 Speaker 1: is the credibility of the American electoral process. If Americans think, uh, 59 00:03:45,800 --> 00:03:50,280 Speaker 1: it's not credible because of intervention by another country, Uh, 60 00:03:50,280 --> 00:03:53,680 Speaker 1: it discredits the whole electoral process, and if it's in 61 00:03:53,720 --> 00:03:57,760 Speaker 1: behalf of one candidate or another, that's particularly harmful. And 62 00:03:57,880 --> 00:04:01,320 Speaker 1: we haven't really had that, uh in my knowledge for 63 00:04:01,320 --> 00:04:05,280 Speaker 1: for a very long time. If ever, and Obama indicated 64 00:04:05,320 --> 00:04:07,480 Speaker 1: we had the capability of dealing with it. You didn't 65 00:04:07,480 --> 00:04:10,600 Speaker 1: want a cyber war, but he indicated if if there 66 00:04:10,640 --> 00:04:13,880 Speaker 1: were one, we had the capability, both offensive and defensive 67 00:04:13,960 --> 00:04:17,400 Speaker 1: to deal with. So you can't simply do nothing indefinitely. 68 00:04:17,960 --> 00:04:21,000 Speaker 1: I hate when you walk in the studio, Ambassador, because 69 00:04:21,040 --> 00:04:22,800 Speaker 1: you always tried in a book that I have to 70 00:04:22,839 --> 00:04:26,880 Speaker 1: blow everything up and read immediately Harry and Arthur. It 71 00:04:26,960 --> 00:04:29,239 Speaker 1: sounds like a Billy Crystal player, you know, a movie 72 00:04:29,320 --> 00:04:32,479 Speaker 1: or whatever. It's not Harry and Arthur's what no one mentions. 73 00:04:32,839 --> 00:04:37,000 Speaker 1: I go back to the Atlantic chartere ish. But seven 74 00:04:37,080 --> 00:04:41,480 Speaker 1: or eight years after that was President Truman and Arthur Vandenburg, 75 00:04:41,560 --> 00:04:46,800 Speaker 1: the Senator from Michigan, and they began our internationalism. Do 76 00:04:46,920 --> 00:04:51,080 Speaker 1: we risk losing that internationalism? Right now? We are on 77 00:04:51,160 --> 00:04:53,280 Speaker 1: the cusp of losing it, and there are a lot 78 00:04:53,279 --> 00:04:56,720 Speaker 1: of Americans who don't fully understand. That book to me, 79 00:04:56,920 --> 00:05:01,240 Speaker 1: was very very important in helping to reshape or shape 80 00:05:01,240 --> 00:05:03,640 Speaker 1: my thinking about what we should be doing now. The 81 00:05:03,720 --> 00:05:08,239 Speaker 1: Republicans and Democrats on most issues were at odds uh 82 00:05:08,279 --> 00:05:13,000 Speaker 1: and and and violently so very very strong antipathy between 83 00:05:13,040 --> 00:05:17,039 Speaker 1: Republicans Democrats on a whole range of nineteen the late 84 00:05:17,080 --> 00:05:22,640 Speaker 1: nineteen forties right forty nine and uh. The country was 85 00:05:22,800 --> 00:05:26,000 Speaker 1: very partisan and a lot of people were very isolationist. 86 00:05:26,560 --> 00:05:31,040 Speaker 1: Vandenburg himself, a very strong Republican, was very isolationist. He 87 00:05:31,080 --> 00:05:34,479 Speaker 1: turned around because he concluded he had to put country 88 00:05:34,560 --> 00:05:39,160 Speaker 1: over party, and he and Truman together devised the Truman 89 00:05:39,200 --> 00:05:43,400 Speaker 1: doctrine to support Greecent Turkey. NATO was the result of 90 00:05:43,440 --> 00:05:48,960 Speaker 1: the Vandenburg resolution creating the Martiall Plan. Vandenberg and Truman 91 00:05:49,040 --> 00:05:52,200 Speaker 1: work together on this, and they understood that you needed 92 00:05:52,240 --> 00:05:55,080 Speaker 1: to have strong alliances. You needed to have a strong 93 00:05:55,600 --> 00:05:59,520 Speaker 1: international economic for security and for domestic reasons. You talk 94 00:05:59,560 --> 00:06:03,600 Speaker 1: about Thomas Jefferson in his view that an informed electorate 95 00:06:03,760 --> 00:06:08,479 Speaker 1: is a preconditioned for successful democracy, and you wondered, how, 96 00:06:09,160 --> 00:06:12,719 Speaker 1: in this crazy world of social media, etcetera, how do 97 00:06:12,800 --> 00:06:17,760 Speaker 1: we get an informed electorate these days? This troubles me 98 00:06:17,800 --> 00:06:22,840 Speaker 1: a great deal. The current campaign and indeed campaigns for 99 00:06:22,880 --> 00:06:25,400 Speaker 1: a number of years in the past, but particularly the 100 00:06:25,400 --> 00:06:29,360 Speaker 1: current one is almost a fact free environment. I mean, 101 00:06:29,400 --> 00:06:33,760 Speaker 1: there are a lot of charges hurled at individuals, some 102 00:06:33,880 --> 00:06:36,400 Speaker 1: of which are not based on facts, but are simply 103 00:06:36,440 --> 00:06:40,960 Speaker 1: based on the desire to criticize one's opponent. And we 104 00:06:41,040 --> 00:06:44,280 Speaker 1: need to have a discussion of the serious issues that 105 00:06:44,320 --> 00:06:49,280 Speaker 1: face this country and face the world. Jobs, income, inequality, 106 00:06:49,600 --> 00:06:55,240 Speaker 1: lack of study investment, low levels of research and development, 107 00:06:55,720 --> 00:07:00,120 Speaker 1: problems for small medium sized enterprises. All these things, I 108 00:07:00,160 --> 00:07:04,760 Speaker 1: think require that the American people here the solutions, the 109 00:07:04,920 --> 00:07:09,080 Speaker 1: substantive solutions that the candidates have, and then at least 110 00:07:09,120 --> 00:07:10,880 Speaker 1: debate them. They may not agree with them, but at 111 00:07:10,960 --> 00:07:14,160 Speaker 1: least have a conversation about substance. That's how you get 112 00:07:14,160 --> 00:07:18,320 Speaker 1: an informed electorate. Treating the campaign as a series of 113 00:07:18,760 --> 00:07:24,200 Speaker 1: reality shows and lots of invective doesn't produce an informed electorate, 114 00:07:24,200 --> 00:07:27,240 Speaker 1: and it does trouble me because the next president has 115 00:07:27,280 --> 00:07:31,680 Speaker 1: to find the support at home to govern, has to 116 00:07:31,720 --> 00:07:35,360 Speaker 1: have a mandate, and people have to be informed of 117 00:07:35,400 --> 00:07:37,920 Speaker 1: what they think in order to give them the kind 118 00:07:37,920 --> 00:07:41,160 Speaker 1: of support for their thoughts, for their policies. The government 119 00:07:41,320 --> 00:07:45,040 Speaker 1: mays a really good point dueling polls out lately. Uh. 120 00:07:45,080 --> 00:07:47,400 Speaker 1: And and certainly a national vote is not the way 121 00:07:47,400 --> 00:07:50,680 Speaker 1: that we elect a president. But if the polls were 122 00:07:50,760 --> 00:07:54,640 Speaker 1: to finish about as they are, with neither candidate getting 123 00:07:54,640 --> 00:07:58,240 Speaker 1: a majority, uh, somebody just getting a plurality perhaps in 124 00:07:58,240 --> 00:08:01,400 Speaker 1: the low forties, because you've got independent candidates, what kind 125 00:08:01,440 --> 00:08:03,880 Speaker 1: of mandate can they claim can they govern? Well, that's 126 00:08:03,880 --> 00:08:07,440 Speaker 1: an interesting thing. I'm not so much worried about the 127 00:08:07,480 --> 00:08:11,360 Speaker 1: plurality that they get. Lincoln, after all, only one with 128 00:08:11,480 --> 00:08:13,880 Speaker 1: something like thirty of the vote, because there were a 129 00:08:13,960 --> 00:08:17,119 Speaker 1: number of people running against them him. But people knew 130 00:08:17,320 --> 00:08:21,280 Speaker 1: generally what and and very quite specifically on certain issues 131 00:08:21,760 --> 00:08:25,400 Speaker 1: what Lincoln stood for. So he had the ability uh 132 00:08:25,440 --> 00:08:28,560 Speaker 1: to use the vote he had as a mandate to 133 00:08:28,640 --> 00:08:33,200 Speaker 1: do what he ultimately did. Uh. Franklin Roosevelt won very 134 00:08:33,200 --> 00:08:38,400 Speaker 1: heavily over President Hoover in his first election. UM, and 135 00:08:38,559 --> 00:08:41,000 Speaker 1: people had a general idea of what he wanted to do, 136 00:08:41,040 --> 00:08:43,840 Speaker 1: although a lot of the specifics he kept open. But 137 00:08:44,040 --> 00:08:47,040 Speaker 1: he had a mandate at least to make major changes. 138 00:08:47,720 --> 00:08:50,960 Speaker 1: So the the the the size of the vote with 139 00:08:51,040 --> 00:08:54,199 Speaker 1: Roosevelt a large vote, Lincoln is a small, relatively small vote. 140 00:08:54,679 --> 00:08:57,840 Speaker 1: It's more what people stand for and being able to 141 00:08:57,920 --> 00:09:00,360 Speaker 1: explain to the American people what they stand for so 142 00:09:00,400 --> 00:09:02,480 Speaker 1: that when they come in they say, look, I've got 143 00:09:02,480 --> 00:09:05,320 Speaker 1: a mandate to make these changes. I think that this 144 00:09:05,520 --> 00:09:08,640 Speaker 1: current environment, there's so little substance that it's hard to 145 00:09:08,640 --> 00:09:11,840 Speaker 1: see what the mandate will be because there's so much 146 00:09:11,920 --> 00:09:16,720 Speaker 1: noise level about individual and invective the key insight here. Unfortunately, 147 00:09:16,720 --> 00:09:20,760 Speaker 1: we're running out of time. Embassador Hormas, we've seen gridlock before. 148 00:09:20,800 --> 00:09:24,640 Speaker 1: I mean Sam Rayburn. I mean some would say Paul 149 00:09:24,720 --> 00:09:29,719 Speaker 1: Ryan is no Sam Rayburn, but Speaker Rayburn saw gridlock right, Yes, 150 00:09:29,840 --> 00:09:31,760 Speaker 1: I mean there's there's been a lot of gridlock in 151 00:09:31,800 --> 00:09:36,880 Speaker 1: the past. I think it's going to require, unfortunately, um 152 00:09:37,160 --> 00:09:42,520 Speaker 1: continued efforts by the candidates at this point to to 153 00:09:42,640 --> 00:09:45,600 Speaker 1: win and then what they've got to do to win, 154 00:09:45,679 --> 00:09:47,760 Speaker 1: And it may not be pretty and it may not 155 00:09:47,840 --> 00:09:50,520 Speaker 1: be substantient, but they that's the way this campaign is 156 00:09:50,600 --> 00:09:54,319 Speaker 1: rolling out. But there needs to be at least some 157 00:09:54,360 --> 00:09:57,400 Speaker 1: shift towards substance, and when they get in, they really 158 00:09:57,400 --> 00:10:01,520 Speaker 1: have to focus on substances. Thinking red rick doesn't solve problem. 159 00:10:01,520 --> 00:10:15,400 Speaker 1: Thank you so much for Kissinger Associates. Robert Hormettz Robert 160 00:10:15,400 --> 00:10:19,360 Speaker 1: Hormats with us of Kissinger Associates. Ambassador Hormats, of course 161 00:10:19,360 --> 00:10:23,640 Speaker 1: serving within the present administration and working with Secretary Clinton 162 00:10:24,040 --> 00:10:27,560 Speaker 1: on a linkage of economics into our State Department and 163 00:10:27,600 --> 00:10:32,880 Speaker 1: international relations. Some of that was from his Fletcher School. 164 00:10:32,960 --> 00:10:37,000 Speaker 1: We now welcome the Dean of the Fletcher School, Tough University, 165 00:10:37,440 --> 00:10:40,160 Speaker 1: Admirals Turvita's admir wonderful to have you on with the 166 00:10:40,240 --> 00:10:43,680 Speaker 1: Bassador Hormats. And I think the thing that that so 167 00:10:44,080 --> 00:10:47,400 Speaker 1: gets my attention with a Fletcher School of Law and diplomacy, 168 00:10:47,800 --> 00:10:52,480 Speaker 1: which is many talk international, few actually do it. And 169 00:10:52,559 --> 00:10:56,120 Speaker 1: it's stunning to see the international reach of Fletcher School 170 00:10:56,440 --> 00:11:00,360 Speaker 1: going back before World War Two. Thanks, it's great to 171 00:11:00,400 --> 00:11:03,000 Speaker 1: be on and also with one of our most prominent 172 00:11:03,120 --> 00:11:06,240 Speaker 1: and distinguished alums, Bob Formats. You know, I'll give you 173 00:11:06,280 --> 00:11:09,320 Speaker 1: a current example time from a place we don't think 174 00:11:09,320 --> 00:11:12,160 Speaker 1: about a lot, and that's Latin America in the Caribbean. 175 00:11:12,760 --> 00:11:16,840 Speaker 1: So Dilma roussef is just impeached biggest muscle movement in 176 00:11:16,880 --> 00:11:21,000 Speaker 1: the world to the South in decades. The Chief Justice 177 00:11:21,040 --> 00:11:23,960 Speaker 1: of the Supreme Court who presided over that is a 178 00:11:23,960 --> 00:11:28,200 Speaker 1: Fletcher graduate, Chief Justice Rick Lewandowski. And the second one 179 00:11:28,320 --> 00:11:31,880 Speaker 1: is Columbia, where we're about to finish up a a 180 00:11:31,960 --> 00:11:36,200 Speaker 1: sixty year insurgency. The president of Columbia is a Fletcher 181 00:11:36,240 --> 00:11:39,320 Speaker 1: alum one, Manuel Santos. So, yeah, we're out there. What 182 00:11:39,400 --> 00:11:46,080 Speaker 1: are you teaching different within the new isolationism of America? Well, 183 00:11:46,120 --> 00:11:48,760 Speaker 1: I'd love to hear Bob formats on the economic side 184 00:11:48,760 --> 00:11:52,480 Speaker 1: of that, but we're very focused on cyber and how 185 00:11:52,520 --> 00:11:57,280 Speaker 1: that's changing the construct. Globally, we're focused on bio and 186 00:11:57,320 --> 00:11:59,719 Speaker 1: we're taking a very hard look these days at a 187 00:12:00,000 --> 00:12:02,840 Speaker 1: FRICCA as a region. So there's three. Well, do you 188 00:12:02,880 --> 00:12:05,160 Speaker 1: agree with that? Ambassador is the dean off the rails 189 00:12:05,200 --> 00:12:07,439 Speaker 1: on that. No, he's right on the mark. Should we 190 00:12:07,559 --> 00:12:10,480 Speaker 1: be doing Kissinger diplomacy one oh one? Well, I think 191 00:12:10,520 --> 00:12:13,000 Speaker 1: obviously kissing you diplomacy one oh one is sort of 192 00:12:13,040 --> 00:12:17,160 Speaker 1: the bedrock of diplomacy in general. But you have to 193 00:12:17,200 --> 00:12:21,880 Speaker 1: modernize diplomacy for the new era, and cyber is critically 194 00:12:21,880 --> 00:12:23,640 Speaker 1: important to this. I mean, just to give you a 195 00:12:23,760 --> 00:12:28,840 Speaker 1: two three statistics. One, growth in trade has diminished over 196 00:12:28,840 --> 00:12:33,000 Speaker 1: the last ten years. UH, international investment, cross border investment 197 00:12:33,040 --> 00:12:38,600 Speaker 1: has diminished. What's increased is international data flows and cyber 198 00:12:38,800 --> 00:12:41,240 Speaker 1: is really the backbone of that, and it makes us 199 00:12:41,400 --> 00:12:44,400 Speaker 1: more efficient, but it also makes us more vulnerable, and 200 00:12:44,440 --> 00:12:48,880 Speaker 1: it certainly changes diplomacy. So Jim is exactly right, that's critical. 201 00:12:49,000 --> 00:12:53,920 Speaker 1: Bio is enormously important. It's changing things, uh in the 202 00:12:53,960 --> 00:12:57,800 Speaker 1: healthcare field. And we're also subject to more and more 203 00:12:58,559 --> 00:13:02,240 Speaker 1: UH types of transmission of disease across the border, and 204 00:13:02,320 --> 00:13:04,000 Speaker 1: we have to figure out how to deal with that 205 00:13:04,120 --> 00:13:06,520 Speaker 1: as well. So these are things that are very important. 206 00:13:06,520 --> 00:13:09,240 Speaker 1: Fletcher is really at the cutting edge in these and 207 00:13:09,320 --> 00:13:12,880 Speaker 1: many of the things and international economics, international business. Jim 208 00:13:12,920 --> 00:13:15,400 Speaker 1: has done a fabulous job of putting Fletcher right in 209 00:13:15,440 --> 00:13:19,959 Speaker 1: the front row on dealing with the interaction between national 210 00:13:20,040 --> 00:13:22,920 Speaker 1: security and international economic policy. That two are very close 211 00:13:22,960 --> 00:13:26,400 Speaker 1: to Mike, I think they've gotten like six shameless plugs. Yeah, 212 00:13:27,720 --> 00:13:35,320 Speaker 1: I'm gonna ask. Yeah, but what about Tufts football? Yeah, 213 00:13:35,440 --> 00:13:37,640 Speaker 1: just don't forget we won the n C double as 214 00:13:37,360 --> 00:13:41,800 Speaker 1: in soccer last year. All right, So there we go. 215 00:13:42,320 --> 00:13:44,880 Speaker 1: Uh So Toughs is at the forefront of training the 216 00:13:44,960 --> 00:13:47,000 Speaker 1: leaders of the future. What about the leaders of today 217 00:13:47,480 --> 00:13:49,600 Speaker 1: in a world that has changed so rapidly, As Bob 218 00:13:49,720 --> 00:13:52,960 Speaker 1: was just talking about, where cyber and bio and these 219 00:13:53,000 --> 00:13:57,120 Speaker 1: sort of things are coming to dominate much of the 220 00:13:57,200 --> 00:14:00,840 Speaker 1: policy decision framework that has to be made. Do we 221 00:14:00,920 --> 00:14:04,880 Speaker 1: have people who understand this today, not that are learning, 222 00:14:05,200 --> 00:14:09,920 Speaker 1: but that can come in and effectively manage these new problems. 223 00:14:09,960 --> 00:14:13,679 Speaker 1: That seems to be kind of an issue. Diplomats and 224 00:14:14,320 --> 00:14:16,959 Speaker 1: generals tend to fight the last war, but we're now 225 00:14:17,000 --> 00:14:19,240 Speaker 1: looking at new kinds of wars all of a sudden, 226 00:14:20,200 --> 00:14:22,200 Speaker 1: I agree, and I think that there is a bit 227 00:14:22,200 --> 00:14:26,440 Speaker 1: of a generational gap at the moment, as people far 228 00:14:26,560 --> 00:14:30,240 Speaker 1: younger than I um have these skills and this knowledge, 229 00:14:30,280 --> 00:14:33,800 Speaker 1: but have not yet matriculated into the most senior positions. 230 00:14:34,080 --> 00:14:36,680 Speaker 1: And a good example of this again is cyber where 231 00:14:36,680 --> 00:14:41,360 Speaker 1: we see, for example, this stair down between President Putin 232 00:14:41,800 --> 00:14:44,880 Speaker 1: and President Obama over the weekend uh in In and 233 00:14:44,920 --> 00:14:48,080 Speaker 1: around the G twenty. One of the key topics is cyber. 234 00:14:48,160 --> 00:14:50,840 Speaker 1: But I would guess neither of them really understands in 235 00:14:50,880 --> 00:14:54,960 Speaker 1: any depth how that interconnection and the technology behind it. 236 00:14:55,040 --> 00:14:57,920 Speaker 1: So we need to continue to push those younger people 237 00:14:57,960 --> 00:15:00,640 Speaker 1: into high positions to make sure that we get that 238 00:15:00,840 --> 00:15:03,840 Speaker 1: knowledge to unpackage these things. You know that leaves it. 239 00:15:03,920 --> 00:15:06,680 Speaker 1: I mean, here's a situation. We were talking with Bob 240 00:15:07,080 --> 00:15:10,880 Speaker 1: earlier about the whole putent interfering in US elections, and 241 00:15:11,120 --> 00:15:14,320 Speaker 1: he was saying, it's obviously very serious, and what could 242 00:15:14,360 --> 00:15:15,960 Speaker 1: be done about it? He will leave to those who 243 00:15:16,040 --> 00:15:18,280 Speaker 1: understand the workings of it. Are there people at State 244 00:15:19,200 --> 00:15:22,240 Speaker 1: or at the National Security Council who understand the workings 245 00:15:22,240 --> 00:15:24,760 Speaker 1: of it who can deliver an effective response or are 246 00:15:24,840 --> 00:15:27,440 Speaker 1: we just all kind of flailing at this point? I 247 00:15:27,480 --> 00:15:33,280 Speaker 1: think there is again a gap between the working technologically 248 00:15:33,400 --> 00:15:37,440 Speaker 1: savvy level, which are people in their thirties and forties, 249 00:15:37,720 --> 00:15:41,560 Speaker 1: and policy makers in their late fifties, sixties, and seventies. 250 00:15:41,840 --> 00:15:44,359 Speaker 1: And we've got to close that gap. It's a significant 251 00:15:44,360 --> 00:15:46,160 Speaker 1: part of the challenge. That's one of the reasons we're 252 00:15:46,200 --> 00:15:49,280 Speaker 1: doing a lot of mid career and executive kinds of 253 00:15:49,320 --> 00:15:53,400 Speaker 1: programs here. The Airmeral Folks has taken a non political stance, 254 00:15:53,440 --> 00:15:55,960 Speaker 1: although he was vetted as vice president of candidate for 255 00:15:56,000 --> 00:16:01,760 Speaker 1: Secretary Clinton. Ambassador Hormats serving both parties in public service, 256 00:16:01,920 --> 00:16:05,880 Speaker 1: most recently with the President and with Secretary Clinton. Ambassador 257 00:16:06,000 --> 00:16:08,800 Speaker 1: let me ask you the simple question. There's a clarion 258 00:16:08,840 --> 00:16:13,280 Speaker 1: conservative call for a simpler time on nostalgia for a 259 00:16:13,480 --> 00:16:18,520 Speaker 1: simpler America that has to score points with all public officials. 260 00:16:18,560 --> 00:16:23,800 Speaker 1: How does a progressive and liberal Democratic Party and a 261 00:16:23,880 --> 00:16:28,720 Speaker 1: potential President Clinton adapt an adjust to this nostalgia. We 262 00:16:29,000 --> 00:16:32,160 Speaker 1: may want a simpler world and a simpler America, but 263 00:16:32,240 --> 00:16:36,160 Speaker 1: the world's changed and it's more complicated than it was ten, fifteen, 264 00:16:36,200 --> 00:16:38,840 Speaker 1: twenty years ago, and we have to change with it 265 00:16:38,880 --> 00:16:42,800 Speaker 1: and understand that power is more diversified around the world. 266 00:16:42,840 --> 00:16:48,040 Speaker 1: Technology is driving economics around the world, it's driving national security. 267 00:16:48,120 --> 00:16:51,480 Speaker 1: So we have to understand where we can't go backwards. 268 00:16:51,560 --> 00:16:53,200 Speaker 1: We have to go forward. We have to figure out 269 00:16:53,240 --> 00:16:56,800 Speaker 1: how to master these new changes and benefit from Well, 270 00:16:56,840 --> 00:16:58,840 Speaker 1: we got two oceans that we're gonna build a wall 271 00:16:58,880 --> 00:17:01,840 Speaker 1: to Mexico, Admiral, but then at the same time we 272 00:17:01,880 --> 00:17:05,560 Speaker 1: want to show the flag right. Well, I'm gonna say, 273 00:17:05,600 --> 00:17:08,520 Speaker 1: first of all, we can build a huge wall with Mexico, 274 00:17:08,600 --> 00:17:10,879 Speaker 1: but here's a news flash, there's an ocean right to 275 00:17:10,920 --> 00:17:13,240 Speaker 1: the left of it, and it's going to be easy 276 00:17:13,280 --> 00:17:15,040 Speaker 1: to get around it. So we're going to solve these 277 00:17:15,040 --> 00:17:19,520 Speaker 1: problems by coalitions and international cooperation. We're going to solve 278 00:17:19,560 --> 00:17:22,600 Speaker 1: them by making the inner agency work together better. And 279 00:17:22,640 --> 00:17:24,879 Speaker 1: nobody knows this better than the Ambassador. We're gonna make 280 00:17:24,880 --> 00:17:28,600 Speaker 1: it work by public private cooperation. We're not going to 281 00:17:28,680 --> 00:17:32,400 Speaker 1: solve these challenges in the cyber world with government solutions. 282 00:17:32,440 --> 00:17:35,120 Speaker 1: That is going to require the public sector. So those 283 00:17:35,160 --> 00:17:39,400 Speaker 1: three levels of cooperation, if you will, building bridges not walls, 284 00:17:39,800 --> 00:17:43,560 Speaker 1: I would argue, are the way to approach these this brave, new, 285 00:17:43,720 --> 00:17:47,159 Speaker 1: dangerous world that the Ambassador correctly we catch us out for. 286 00:17:47,400 --> 00:17:49,560 Speaker 1: And I would just make one other point where it's 287 00:17:49,560 --> 00:17:52,399 Speaker 1: gonna be Jim's absolutely right, and it's gonna be hard 288 00:17:52,440 --> 00:17:56,240 Speaker 1: to have an effective international economic policy, which is critical 289 00:17:56,280 --> 00:17:58,720 Speaker 1: to the United States from an economic and from a 290 00:17:58,800 --> 00:18:01,479 Speaker 1: national security point of view, unless we're able to do 291 00:18:01,560 --> 00:18:05,399 Speaker 1: something about income inequality and job growth here. So that 292 00:18:05,520 --> 00:18:08,919 Speaker 1: the conundrum is, you need a strong domestic economy with 293 00:18:09,040 --> 00:18:13,640 Speaker 1: growth and better income equality here to develop the domestic 294 00:18:13,720 --> 00:18:17,360 Speaker 1: support for an effective global policy. On the other hand, 295 00:18:17,400 --> 00:18:20,560 Speaker 1: you need an effective global economic policy in a world 296 00:18:20,600 --> 00:18:24,199 Speaker 1: where the world's consumers live abroad. You've got to have 297 00:18:24,280 --> 00:18:26,920 Speaker 1: an export oriented policy. You gotta work with other countries, 298 00:18:26,960 --> 00:18:29,719 Speaker 1: as Jim is saying, to deal with these global issues 299 00:18:29,960 --> 00:18:32,480 Speaker 1: to enhance our domestic policies. So that two have to 300 00:18:32,480 --> 00:18:34,639 Speaker 1: work hand in hand. Ambassador arm it's one more minute 301 00:18:34,640 --> 00:18:37,320 Speaker 1: with you, and will continue with the Admiral. What did 302 00:18:37,320 --> 00:18:43,080 Speaker 1: you learn at State on linking economics to international relations. 303 00:18:43,119 --> 00:18:46,680 Speaker 1: You're you've had the huge resume, huge experience, but even 304 00:18:46,760 --> 00:18:50,120 Speaker 1: Bob Hormance must have learned something on the last two 305 00:18:50,200 --> 00:18:52,360 Speaker 1: or a duty. Well, I learned. I learned a lot 306 00:18:52,400 --> 00:18:54,879 Speaker 1: because I was as you know, as State years ago, 307 00:18:55,080 --> 00:18:57,520 Speaker 1: where the two were really quite separate in an actually 308 00:18:57,520 --> 00:19:00,639 Speaker 1: economic and national security. There was a great degree of 309 00:19:00,680 --> 00:19:04,359 Speaker 1: convergence this time, and largely because Hillary Clinton really understood 310 00:19:04,400 --> 00:19:06,720 Speaker 1: the inter relationship between the two and exercise a lot 311 00:19:06,760 --> 00:19:09,800 Speaker 1: of leadership. But the key point is you need when 312 00:19:09,840 --> 00:19:13,239 Speaker 1: you sit down and talked about national security issues, you 313 00:19:13,320 --> 00:19:16,520 Speaker 1: have to have the presence in those discussions of people 314 00:19:16,560 --> 00:19:20,720 Speaker 1: who deal with international econmic policy. The underpinning in many 315 00:19:20,760 --> 00:19:24,919 Speaker 1: cases of our alliances, our national security alliances, is a 316 00:19:24,960 --> 00:19:29,320 Speaker 1: strong set of economic relationships between the United States and 317 00:19:29,359 --> 00:19:32,800 Speaker 1: its allies and friends in Asia and Europe and other 318 00:19:32,800 --> 00:19:35,200 Speaker 1: parts of the world that to complement one of they're 319 00:19:35,240 --> 00:19:37,800 Speaker 1: not separate. The better we understand that and the more 320 00:19:37,840 --> 00:19:39,840 Speaker 1: that resource one another, the better it will be and 321 00:19:39,880 --> 00:19:41,760 Speaker 1: I learned, well, you have to do that in an 322 00:19:41,840 --> 00:19:44,240 Speaker 1: organizational and structural way. We haven't done that in the 323 00:19:44,280 --> 00:19:48,280 Speaker 1: best What a wonderful conversation with Robert Hormats of Golden 324 00:19:48,359 --> 00:19:52,280 Speaker 1: sax and kissing your associates now the former UH member 325 00:19:52,280 --> 00:19:56,480 Speaker 1: of the Secretary of State Department, rather with President Obama 326 00:19:56,840 --> 00:20:00,280 Speaker 1: and admiralstavidas with us with a Fletcher School abro give 327 00:20:00,320 --> 00:20:07,040 Speaker 1: me a Putin NATO update. I guess the distinction is 328 00:20:07,440 --> 00:20:11,440 Speaker 1: NATO was there and that was fine. And then in 329 00:20:11,560 --> 00:20:16,960 Speaker 1: the reason history his NATO wanted to expand its borders east. 330 00:20:17,720 --> 00:20:20,639 Speaker 1: About the time I became supremele at Commander of NATO 331 00:20:20,680 --> 00:20:24,879 Speaker 1: in two thousand nine, we'd begun to really created the 332 00:20:24,960 --> 00:20:27,880 Speaker 1: relationship with Russia. And it was a combination tom as 333 00:20:27,880 --> 00:20:31,640 Speaker 1: you say. NATO had expanded into the nations that were 334 00:20:31,720 --> 00:20:38,560 Speaker 1: former Warsaw packed allies of the old Soviet Union, Poland, Romania, Hungary, etcetera. 335 00:20:38,640 --> 00:20:43,080 Speaker 1: And Russia was shrinking back in its view toward its 336 00:20:43,119 --> 00:20:47,240 Speaker 1: traditional Czarist borders. This created the lash that came out 337 00:20:47,400 --> 00:20:50,840 Speaker 1: from President putin invasion of Georgia in two thousand and 338 00:20:50,920 --> 00:20:53,560 Speaker 1: eight and really continues today with the invasion of Crimea 339 00:20:53,640 --> 00:20:56,760 Speaker 1: just a year ago. There have been sharp critics of 340 00:20:57,000 --> 00:21:00,920 Speaker 1: US policy on the expansion of NATO, and I want 341 00:21:00,960 --> 00:21:04,960 Speaker 1: to look forward, but in hindsight where we naive on 342 00:21:05,160 --> 00:21:08,640 Speaker 1: how Russia would respond. I think it's fair to say 343 00:21:08,680 --> 00:21:12,560 Speaker 1: we underestimated and we really thought we were in a 344 00:21:12,600 --> 00:21:16,800 Speaker 1: new new world, that somehow Russia was going to walk 345 00:21:16,840 --> 00:21:21,840 Speaker 1: away from its traditional expansionist and nationalist tendancies and simply 346 00:21:21,840 --> 00:21:25,040 Speaker 1: want to join and become part of the Table of Europe. 347 00:21:25,200 --> 00:21:28,080 Speaker 1: That did not happen, to say the least. And that 348 00:21:28,080 --> 00:21:31,760 Speaker 1: tendency was exacerbated by the rise of Vladimir Putin, who 349 00:21:31,840 --> 00:21:36,000 Speaker 1: is a you know, a former KGB colonel and unreformed 350 00:21:36,080 --> 00:21:41,119 Speaker 1: NATO eater. So we are in a difficult straight with 351 00:21:41,240 --> 00:21:44,600 Speaker 1: Russia today. Okay, And and folks, a fabulous article on 352 00:21:44,640 --> 00:21:46,919 Speaker 1: this I'll put out whether you agree or disagree, but 353 00:21:47,000 --> 00:21:50,199 Speaker 1: gets the brain going John Muirsheimer of Chicago, Why the 354 00:21:50,280 --> 00:21:53,920 Speaker 1: Ukraine crisis is the West fault? I mean, he speaks 355 00:21:53,920 --> 00:21:57,760 Speaker 1: their admiral of liberal delusions. You were in the heart 356 00:21:57,960 --> 00:22:02,639 Speaker 1: of this debate when you were NATO. Essentially, did you say, 357 00:22:02,800 --> 00:22:06,880 Speaker 1: what is America doing moving west to the Warsaw pack. Now, 358 00:22:06,920 --> 00:22:10,320 Speaker 1: we should remember that this was very much at the 359 00:22:10,400 --> 00:22:13,840 Speaker 1: full request of all of these countries. Every single one 360 00:22:13,880 --> 00:22:17,000 Speaker 1: of them came and begged to join NATO. NATO didn't 361 00:22:17,080 --> 00:22:20,159 Speaker 1: roll tanks into Warsaw in order to get the polls 362 00:22:20,200 --> 00:22:24,840 Speaker 1: to join NATO and NATO's charter. It's fundamental treaty, Tom, 363 00:22:24,880 --> 00:22:28,040 Speaker 1: and John Mersheimer knows this very well. Is based on 364 00:22:28,280 --> 00:22:32,280 Speaker 1: open admission to democracies in the North Atlantic region. So 365 00:22:32,280 --> 00:22:34,439 Speaker 1: it's pretty hard to walk away from the treaty. I 366 00:22:34,480 --> 00:22:38,200 Speaker 1: think Merscheimer overstates the case. Okay, well we'll put I'll 367 00:22:38,200 --> 00:22:40,000 Speaker 1: put that out on Twitter, folks. You can see it's 368 00:22:40,000 --> 00:22:44,879 Speaker 1: a fabulous international relations exercise from Foreign Affairs. It is 369 00:22:44,920 --> 00:22:47,639 Speaker 1: a thoughtful piece. Tom. Can you also put out my 370 00:22:47,800 --> 00:22:50,919 Speaker 1: Time magazine article of last week, which is a short 371 00:22:51,280 --> 00:22:54,080 Speaker 1: how to deal with Russia? Four points that we'll do 372 00:22:54,119 --> 00:22:56,840 Speaker 1: that stand alongside. Okay, I love that idea. We'll put 373 00:22:56,840 --> 00:22:59,679 Speaker 1: out mir Scheimer stevides here, folks out on social in 374 00:22:59,720 --> 00:23:02,520 Speaker 1: a bit. Now with that forward, I mean there's a 375 00:23:02,560 --> 00:23:07,560 Speaker 1: stark reality between the two candidates. Do we reaffirm NATO, 376 00:23:07,680 --> 00:23:11,240 Speaker 1: do we reaffirm our foreign policy? Or do you look 377 00:23:11,280 --> 00:23:15,360 Speaker 1: for a new new among our statecraft. I think we 378 00:23:15,440 --> 00:23:19,440 Speaker 1: reaffirm on NATO for the pragmatic reason that it's good 379 00:23:19,480 --> 00:23:22,360 Speaker 1: business for US. We spend six hundred billion a year 380 00:23:22,359 --> 00:23:25,720 Speaker 1: on defense, quite a bit. The Europeans spends three hundred 381 00:23:25,760 --> 00:23:29,240 Speaker 1: billion a year on defense. Russia only spends eighty billion, 382 00:23:29,280 --> 00:23:31,879 Speaker 1: the Chinese a hundred and fifty billions. Why would we 383 00:23:31,880 --> 00:23:35,080 Speaker 1: want to walk away from the second largest defense spending 384 00:23:35,119 --> 00:23:37,479 Speaker 1: pool in the world. I don't think we do so. 385 00:23:37,520 --> 00:23:40,320 Speaker 1: I think we reaffirm NATO, but I do think we 386 00:23:40,400 --> 00:23:44,040 Speaker 1: need to keep our lines of communication with Russia open. 387 00:23:44,119 --> 00:23:47,560 Speaker 1: We can't afford to stumble into a full blown cold war. 388 00:23:47,880 --> 00:23:51,200 Speaker 1: We should confront where we must, but cooperate wherever we can. 389 00:23:52,080 --> 00:23:57,159 Speaker 1: If we switch to Asia, I can honestly say the 390 00:23:57,240 --> 00:24:00,719 Speaker 1: relationship between the Philippines in the US is it a 391 00:24:00,760 --> 00:24:04,960 Speaker 1: most original state. Not that I'm an expert on it, 392 00:24:05,040 --> 00:24:09,119 Speaker 1: but I mean it's extraordinary. The last forty eight hours, 393 00:24:09,119 --> 00:24:11,640 Speaker 1: for those of you that need to get labor daid 394 00:24:11,720 --> 00:24:14,880 Speaker 1: up to speed on this, the President of the Philippines 395 00:24:15,240 --> 00:24:19,080 Speaker 1: used some very coarse language to describe the President of 396 00:24:19,080 --> 00:24:24,159 Speaker 1: the United States. Your response please, outrageous behavior on the 397 00:24:24,200 --> 00:24:29,000 Speaker 1: part of President Dutarte and not characteristic of the Philippines 398 00:24:29,119 --> 00:24:33,000 Speaker 1: or Filipinos, who I have a long history with and 399 00:24:33,040 --> 00:24:36,199 Speaker 1: they are incredibly gracious by and large. Um. He is 400 00:24:36,240 --> 00:24:40,760 Speaker 1: a rogue political actor in my view, and was extremely 401 00:24:40,800 --> 00:24:44,840 Speaker 1: disrespectful to the president. His meeting was canceled. Um. He's 402 00:24:44,880 --> 00:24:47,679 Speaker 1: not scoring any points doing that, and he needs to 403 00:24:47,720 --> 00:24:50,520 Speaker 1: score points with the United States because the big winner 404 00:24:50,520 --> 00:24:53,040 Speaker 1: will be China, which will muscle its way over the 405 00:24:53,080 --> 00:24:57,480 Speaker 1: Philippines in the South China Sea. He's making a geopolitical mistake. 406 00:24:57,720 --> 00:25:01,480 Speaker 1: He has a domestic agenda, which his corruption and crime. 407 00:25:01,560 --> 00:25:05,679 Speaker 1: He's affecting or doing that agenda right now. Do you 408 00:25:05,760 --> 00:25:10,879 Speaker 1: suggest that there is a Philippine infrastructure of advice to 409 00:25:11,160 --> 00:25:16,520 Speaker 1: advise him forward on his international politics? I think that 410 00:25:16,720 --> 00:25:21,640 Speaker 1: as always, Um, there's the top president to president relationship 411 00:25:21,720 --> 00:25:25,719 Speaker 1: which has just created permanently at least with President Obama. 412 00:25:25,920 --> 00:25:29,239 Speaker 1: But there are also layer upon layer upon layer of 413 00:25:29,320 --> 00:25:33,920 Speaker 1: diplomatic defense relationships with very strong military to military. So yes, 414 00:25:33,920 --> 00:25:37,080 Speaker 1: there are many different channels we can continue to find 415 00:25:37,119 --> 00:25:40,560 Speaker 1: cooperation with them with the Philippines, but at the top 416 00:25:40,640 --> 00:25:43,240 Speaker 1: it's poisonous. At this point, I'd like to step back, 417 00:25:43,320 --> 00:25:46,280 Speaker 1: Admiral and go over phrase at all in the media 418 00:25:46,440 --> 00:25:50,000 Speaker 1: use and frankly all of us use it. Sometimes we'll go, jeez, 419 00:25:50,080 --> 00:25:51,800 Speaker 1: I think we have to go out to the Mets 420 00:25:51,840 --> 00:25:54,399 Speaker 1: this weekend and show the flag. What does show the 421 00:25:54,440 --> 00:25:57,480 Speaker 1: flag mean? Where did that? You're at war College buried, 422 00:25:58,000 --> 00:26:01,320 Speaker 1: you know, in the history of our military. Just show 423 00:26:01,359 --> 00:26:03,560 Speaker 1: the flag from the U. S. Navy or is it 424 00:26:03,600 --> 00:26:06,600 Speaker 1: from Game of Thrones? Where did it come from? Nice? 425 00:26:06,640 --> 00:26:09,639 Speaker 1: Try on Game of Thrones. Absolutely from the U. S. Navy. 426 00:26:09,680 --> 00:26:12,720 Speaker 1: This goes back a couple of centuries to the idea 427 00:26:12,800 --> 00:26:17,440 Speaker 1: that by sailing a powerful warship armed with strong cannons 428 00:26:17,480 --> 00:26:21,800 Speaker 1: that can attack coastal forts and discharge marines ashore, you 429 00:26:22,080 --> 00:26:26,800 Speaker 1: literally show your flag and you are either saluted and 430 00:26:26,960 --> 00:26:30,479 Speaker 1: welcomed into a port or it's general quarters, and we 431 00:26:30,520 --> 00:26:34,560 Speaker 1: go to combat. So it's uh. Hearkens back most recently 432 00:26:34,600 --> 00:26:37,920 Speaker 1: in our history to Teddy Roosevelt and speak softly, but 433 00:26:38,040 --> 00:26:40,199 Speaker 1: carry a big stick. The big stick he carried was 434 00:26:40,200 --> 00:26:42,399 Speaker 1: the U. S. Navy showing the flag around the world. 435 00:26:43,280 --> 00:26:46,400 Speaker 1: I mean it goes back to the diplomacy of Roosevelt 436 00:26:46,480 --> 00:26:49,760 Speaker 1: and the challenges that he faced in the Spanish American 437 00:26:49,760 --> 00:26:54,000 Speaker 1: a War and the Philippines. Do we do we portray 438 00:26:54,200 --> 00:26:58,440 Speaker 1: a belligerency when we show the flag. Now I think 439 00:26:58,480 --> 00:27:02,000 Speaker 1: we have to beat more are subtle and clever in 440 00:27:02,080 --> 00:27:05,320 Speaker 1: how that flag is shown. So maybe instead of sending 441 00:27:05,359 --> 00:27:08,160 Speaker 1: a huge aircraft carrier, we send a hospital ship that's 442 00:27:08,200 --> 00:27:11,280 Speaker 1: doing disaster relief. We make sure when a destroyer pulls 443 00:27:11,280 --> 00:27:14,600 Speaker 1: into a small port in the Balkans that the sailors 444 00:27:14,600 --> 00:27:18,440 Speaker 1: go ashore and work at orphanages. You mix that hard 445 00:27:18,520 --> 00:27:23,960 Speaker 1: power soft power message in a more strategic way, Tom, 446 00:27:24,040 --> 00:27:26,800 Speaker 1: and that balance of hard and soft power some have 447 00:27:26,840 --> 00:27:29,280 Speaker 1: called smart power, and I think that's the way you 448 00:27:29,320 --> 00:27:32,119 Speaker 1: showed the flag in the twenty one century. But you 449 00:27:32,200 --> 00:27:37,679 Speaker 1: mentioned strategy, there's still statecraft tactics. What's the tactics of 450 00:27:37,720 --> 00:27:42,760 Speaker 1: the next president of the United States in our foreign policy? Well, 451 00:27:42,840 --> 00:27:45,800 Speaker 1: let's let's let the the electorate decide the gender. But 452 00:27:45,920 --> 00:27:48,640 Speaker 1: the next president is going to have to my view, 453 00:27:49,320 --> 00:27:51,840 Speaker 1: do the same things we talked to Ambassador Hormats about. 454 00:27:52,040 --> 00:27:57,359 Speaker 1: Focus on international cooperation. That's building bridges, not building walls. Secondly, 455 00:27:57,760 --> 00:28:00,400 Speaker 1: we've got to get the inner agency work you more 456 00:28:00,480 --> 00:28:03,400 Speaker 1: coherently together. Here in the United States, we still don't 457 00:28:03,440 --> 00:28:08,080 Speaker 1: have a singular intelligence picture for example. And thirdly, we've 458 00:28:08,080 --> 00:28:13,360 Speaker 1: got a marshal the private sector that means using economic 459 00:28:13,480 --> 00:28:16,760 Speaker 1: state craft alongside our more traditional means of showing the 460 00:28:16,800 --> 00:28:19,600 Speaker 1: flag a well, thank you so much. A stavidas of 461 00:28:19,680 --> 00:28:23,520 Speaker 1: course with the Fletcher School and UM has been someone 462 00:28:23,560 --> 00:28:29,880 Speaker 1: who's brought forward our international relations discussion. Who you put 463 00:28:29,880 --> 00:28:33,800 Speaker 1: your trust in matters. Investors have put their trust in 464 00:28:33,800 --> 00:28:38,040 Speaker 1: independent registered investment advisors to the tune of four trillion dollars. 465 00:28:38,760 --> 00:28:42,560 Speaker 1: Why they see their role is to serve, not sell. 466 00:28:43,440 --> 00:28:45,760 Speaker 1: That's why Charles Schwab is committed to the success of 467 00:28:45,840 --> 00:28:51,000 Speaker 1: over seven thousand independent financial advisors who passionately dedicate themselves 468 00:28:51,320 --> 00:28:55,160 Speaker 1: to helping people achieve their financial goals. Learn more and 469 00:28:55,360 --> 00:29:04,880 Speaker 1: find your independent advisor dot com. We are looking at 470 00:29:04,920 --> 00:29:07,520 Speaker 1: what the FED is going to do. We're looking at 471 00:29:07,760 --> 00:29:12,880 Speaker 1: um the impact of the Fed's dual mandate. We concluded 472 00:29:12,920 --> 00:29:16,880 Speaker 1: earlier that Jobs report with Bob Eisenbeis showed that the 473 00:29:17,400 --> 00:29:19,760 Speaker 1: job side of the ledger is is there for the 474 00:29:19,760 --> 00:29:21,240 Speaker 1: fan if they want to take it. The big question 475 00:29:21,240 --> 00:29:24,880 Speaker 1: is what happens with inflation and the big question they says, 476 00:29:24,880 --> 00:29:27,760 Speaker 1: sort of a division uh in terms of inflation. One 477 00:29:27,880 --> 00:29:32,440 Speaker 1: is people looking for wage driven inflation and others who say, 478 00:29:33,040 --> 00:29:36,760 Speaker 1: most of what's happened is commodities. Commodities went down in price, 479 00:29:37,480 --> 00:29:42,080 Speaker 1: and that is why we have no inflation. Dennis Gartman is, 480 00:29:42,200 --> 00:29:45,960 Speaker 1: of course the author and editor of the Gartman Letter, 481 00:29:46,280 --> 00:29:50,680 Speaker 1: and he follows all of that very closely. And so, Dennis, UM, 482 00:29:50,800 --> 00:29:54,880 Speaker 1: I assume you would be someone who would take the 483 00:29:54,960 --> 00:29:58,719 Speaker 1: latter argument that commodities have been the big driver in 484 00:29:58,960 --> 00:30:02,760 Speaker 1: what happens, and as a go so goes the inflation numbers, 485 00:30:02,760 --> 00:30:06,800 Speaker 1: and therefore the fit. Well, we have had a true 486 00:30:06,920 --> 00:30:10,960 Speaker 1: deflationary environment in the commodity markets generally for the past 487 00:30:11,000 --> 00:30:15,600 Speaker 1: several years, and luckily for those of us who are consumers, 488 00:30:15,680 --> 00:30:19,320 Speaker 1: unfortunately for those who are farmers, that bear market continues, 489 00:30:19,360 --> 00:30:21,640 Speaker 1: and when I think, are the most important commodities of 490 00:30:21,680 --> 00:30:24,560 Speaker 1: them all the grain markets. After all, wheat is still 491 00:30:24,600 --> 00:30:28,400 Speaker 1: the largest employer of people in the world. People still 492 00:30:28,440 --> 00:30:32,080 Speaker 1: eat livestock, people still feed the grain and soybeans to 493 00:30:32,360 --> 00:30:35,600 Speaker 1: live stock, people still eat bread and cake. Those are 494 00:30:35,600 --> 00:30:39,960 Speaker 1: the major incumbent inputs into I think inflation, and they 495 00:30:39,840 --> 00:30:44,320 Speaker 1: that we are growing preposterously good crops this year. Um, 496 00:30:44,360 --> 00:30:46,440 Speaker 1: the previous largest crop, don't hold me too the numbers, 497 00:30:46,440 --> 00:30:48,720 Speaker 1: but we're gonna be very close. For corn was about 498 00:30:48,720 --> 00:30:51,120 Speaker 1: a fourteen point eight billion bushel corn crop. We're gonna 499 00:30:51,160 --> 00:30:54,440 Speaker 1: grow something in excess of fifteen point one, maybe even 500 00:30:54,480 --> 00:30:57,960 Speaker 1: fifteen point two or three billion bushels of corn. And 501 00:30:58,000 --> 00:30:59,960 Speaker 1: if it weren't for ethanol, and I'm not a support 502 00:31:00,080 --> 00:31:02,640 Speaker 1: or of ethan, all corn prices um that would be 503 00:31:02,720 --> 00:31:05,240 Speaker 1: down with a one dollar handle instead of a through 504 00:31:05,280 --> 00:31:09,040 Speaker 1: low three dollar handle. We're gonna grow a a four 505 00:31:09,120 --> 00:31:12,080 Speaker 1: point one billion bushels soybean crop. I think the largest 506 00:31:12,120 --> 00:31:14,960 Speaker 1: we've ever grown before was three point nine billion. Again, 507 00:31:14,960 --> 00:31:16,560 Speaker 1: don't hold me to that, but the numbers are gonna 508 00:31:16,560 --> 00:31:21,080 Speaker 1: be close. I e. We are growing at preposterously good crops. 509 00:31:21,120 --> 00:31:24,960 Speaker 1: American farmers are extraordinarily good at a growing every year 510 00:31:25,360 --> 00:31:28,800 Speaker 1: more grain, drought in, drought out, good year in good 511 00:31:28,880 --> 00:31:31,120 Speaker 1: year out on the same amount of acreage, and it's 512 00:31:31,120 --> 00:31:33,880 Speaker 1: putting downward pressure upon prices generally. Now we're starting to 513 00:31:33,880 --> 00:31:37,400 Speaker 1: see collapsing live stock prices. Hog prices are falling off 514 00:31:37,400 --> 00:31:40,000 Speaker 1: the edge of a cliff. Live cattle prices are falling 515 00:31:40,000 --> 00:31:42,920 Speaker 1: precipitously in the course of the past two weeks, feeder 516 00:31:42,920 --> 00:31:46,240 Speaker 1: cattle prices are down. This is a real deflationary circumstance 517 00:31:46,280 --> 00:31:49,440 Speaker 1: taking place in a commodities. We need to pay attention, Dennis, 518 00:31:49,480 --> 00:31:52,280 Speaker 1: what is the why why? I mean, you know, boom 519 00:31:52,280 --> 00:31:55,160 Speaker 1: and agriculture isn't a normal cyclical thing where you guys 520 00:31:55,200 --> 00:31:58,280 Speaker 1: like you don't bat an ires. There something different this time. 521 00:31:59,200 --> 00:32:01,840 Speaker 1: Well one, I think that the the universities and the 522 00:32:01,880 --> 00:32:03,800 Speaker 1: businesses in the United States have just done an and 523 00:32:03,840 --> 00:32:06,479 Speaker 1: the farmers have just done an extraordinary job in the 524 00:32:06,480 --> 00:32:09,160 Speaker 1: course of the last twenty years learning how to produce 525 00:32:09,240 --> 00:32:12,200 Speaker 1: more grain on the same amount of acreage to the weather, 526 00:32:12,480 --> 00:32:16,080 Speaker 1: whether you like it or not. Uh. In this era 527 00:32:16,200 --> 00:32:20,000 Speaker 1: supposedly of global warming, the growing conditions in North America. 528 00:32:20,040 --> 00:32:23,000 Speaker 1: There have been some untoward growing conditions in Russia, and 529 00:32:23,040 --> 00:32:25,040 Speaker 1: a little bit of bad growing conditions on the winter 530 00:32:25,040 --> 00:32:27,640 Speaker 1: we crop in Ukraine and Uzbekistan. But here in the 531 00:32:27,680 --> 00:32:30,680 Speaker 1: United States and in Canada, this year has been extraordinary. 532 00:32:30,720 --> 00:32:34,680 Speaker 1: Mother nature has been very, very pleasant to farmers and 533 00:32:34,720 --> 00:32:38,920 Speaker 1: we have grown an extraordinary, extraordinarily large crop. The prices 534 00:32:38,960 --> 00:32:40,920 Speaker 1: of the past several years have been high enough also 535 00:32:41,360 --> 00:32:46,040 Speaker 1: to entice farmers to increase agricultural acreage. No, no wes 536 00:32:46,120 --> 00:32:47,760 Speaker 1: Ans or butts that was going on. So you've had 537 00:32:47,760 --> 00:32:51,880 Speaker 1: an increase in acreage and mother nature being extremely cooperative, 538 00:32:52,240 --> 00:32:55,040 Speaker 1: and the fact that technology has simply driven the the 539 00:32:55,080 --> 00:32:58,480 Speaker 1: greater abilities to to produce the same amount of more 540 00:32:58,600 --> 00:33:01,000 Speaker 1: and more and more grain on the on on the 541 00:33:01,040 --> 00:33:03,680 Speaker 1: same amount or lesser amounts of acreage. It's impressive what 542 00:33:03,720 --> 00:33:08,440 Speaker 1: we are able to do. How does this market then clear? Um? 543 00:33:08,600 --> 00:33:12,160 Speaker 1: You know do if prices are going to collapse? Are 544 00:33:12,160 --> 00:33:14,560 Speaker 1: we're then going to stop growing this impressive amount or 545 00:33:14,680 --> 00:33:18,440 Speaker 1: we stuck in a deflationary pattern. I'm afraid we maybe 546 00:33:18,600 --> 00:33:21,280 Speaker 1: well stuck in a deflationary pattern. But the oldest rule 547 00:33:21,320 --> 00:33:23,720 Speaker 1: in the book and add commodities is the the the 548 00:33:23,760 --> 00:33:27,200 Speaker 1: great the medicine for to to do away with low 549 00:33:27,240 --> 00:33:31,280 Speaker 1: prices is low prices. We probably will see lesser amounts 550 00:33:31,280 --> 00:33:33,560 Speaker 1: of acreage drilled for winter week this coming year. This 551 00:33:33,600 --> 00:33:35,600 Speaker 1: is now the planting season and where soon shall be 552 00:33:35,800 --> 00:33:38,080 Speaker 1: for the winter wheat cropped. My guess is that if 553 00:33:38,120 --> 00:33:41,000 Speaker 1: we have corn prices remain where they are presently, we 554 00:33:41,040 --> 00:33:45,200 Speaker 1: will reduce corn acreage next year by several hundred by 555 00:33:45,440 --> 00:33:47,960 Speaker 1: several millions of akers will probably do the same thing 556 00:33:48,040 --> 00:33:51,960 Speaker 1: in soybeans. Dennis, I assume both presidents or candidates need 557 00:33:52,000 --> 00:33:56,640 Speaker 1: to win ethanol states. Is the whole ethanol date debate 558 00:33:56,800 --> 00:34:00,280 Speaker 1: just on total pause until we decide who it's the 559 00:34:00,280 --> 00:34:03,160 Speaker 1: free beer of the election. Well, I'm probably gonna make 560 00:34:03,200 --> 00:34:05,720 Speaker 1: several of my my best subscribers angry. But I have 561 00:34:05,840 --> 00:34:08,280 Speaker 1: never been, nor ever shall be a supporter of ethanol. 562 00:34:08,320 --> 00:34:11,719 Speaker 1: I think it's a a terrible, terrible circumstance, a very 563 00:34:11,800 --> 00:34:14,800 Speaker 1: bad fuel. It's bad for the engines that it's put into. 564 00:34:15,160 --> 00:34:19,040 Speaker 1: But nonetheless it is still extant, and they have put 565 00:34:19,320 --> 00:34:21,520 Speaker 1: the debate which had come to the fore. There actually 566 00:34:21,560 --> 00:34:24,640 Speaker 1: had been some discussion of a reduction in the ethanol mandate. 567 00:34:24,760 --> 00:34:26,640 Speaker 1: That's off the table for right now. We will not 568 00:34:26,719 --> 00:34:29,600 Speaker 1: hear anything about that through the rest of the political year, 569 00:34:29,680 --> 00:34:33,000 Speaker 1: thank goodness. So through the rest of the political year, 570 00:34:33,080 --> 00:34:35,360 Speaker 1: does it is there a chance this becomes an issue 571 00:34:35,440 --> 00:34:37,839 Speaker 1: or is it going to fly into the r Now 572 00:34:37,840 --> 00:34:40,840 Speaker 1: it will not become an issue there neither candidate and 573 00:34:41,480 --> 00:34:44,000 Speaker 1: nor the only candidate who even might bring up the 574 00:34:44,040 --> 00:34:46,400 Speaker 1: ethanol issue might be the libertarian and they'll do that 575 00:34:46,440 --> 00:34:49,360 Speaker 1: only at the very at the margin. The Republican nominee 576 00:34:49,440 --> 00:34:53,239 Speaker 1: nor the Democratic nominee shall ever, shall ever pass through 577 00:34:53,360 --> 00:34:56,279 Speaker 1: the ethanol question until at least there one or two 578 00:34:56,360 --> 00:34:59,160 Speaker 1: years into their administration, and even then it'll be at 579 00:34:59,160 --> 00:35:04,880 Speaker 1: the margin. It has been a sporting year. The mathematics 580 00:35:05,280 --> 00:35:07,600 Speaker 1: is a X plus B Y plus ez, and there's 581 00:35:07,600 --> 00:35:11,920 Speaker 1: a Greek letter off to the right called Epsilon. Dennis 582 00:35:11,960 --> 00:35:16,239 Speaker 1: Gartment is going to name his next dog Epsilons out 583 00:35:16,239 --> 00:35:18,920 Speaker 1: in the golf course with him, Dennis, have you ever 584 00:35:18,960 --> 00:35:21,439 Speaker 1: seen a year like this in terms of whip saw 585 00:35:21,520 --> 00:35:24,480 Speaker 1: and belief and trying to come up with an intelligent 586 00:35:24,560 --> 00:35:27,600 Speaker 1: guestimate and then you're totally crushed by this, that or 587 00:35:27,600 --> 00:35:31,160 Speaker 1: the other central bank theory. I'd hate to say that 588 00:35:31,280 --> 00:35:33,959 Speaker 1: we've never seen one like this, but I don't really 589 00:35:33,960 --> 00:35:36,719 Speaker 1: want to see one like this again. If you just 590 00:35:36,719 --> 00:35:38,080 Speaker 1: take a look at the chart of the S and 591 00:35:38,120 --> 00:35:40,000 Speaker 1: P over the course of the past several months, it's 592 00:35:40,040 --> 00:35:43,080 Speaker 1: just going absolutely sideways. But it looks like it breaks 593 00:35:43,080 --> 00:35:44,799 Speaker 1: out to the upside, so you buy it, you get 594 00:35:44,800 --> 00:35:46,920 Speaker 1: stopped out. It looks like it breaks to the downside, 595 00:35:47,239 --> 00:35:49,279 Speaker 1: so you sell it, you get stopped out. And it 596 00:35:49,480 --> 00:35:52,839 Speaker 1: just is mentally wearying as I like to say there 597 00:35:52,880 --> 00:35:54,800 Speaker 1: are two types of capital in the in the world 598 00:35:54,800 --> 00:35:57,160 Speaker 1: for traders to have, that which is in their account 599 00:35:57,200 --> 00:35:59,160 Speaker 1: and their mental capital. And I think most of us 600 00:35:59,160 --> 00:36:02,400 Speaker 1: are having our mental appital depleted rather grandly by the 601 00:36:02,760 --> 00:36:09,240 Speaker 1: by the inexorable slow grinding uh and confusing circumstances that prevail, 602 00:36:10,040 --> 00:36:12,880 Speaker 1: and and part of this to the back too. Thirds 603 00:36:12,880 --> 00:36:15,480 Speaker 1: of reminiscence of a stock operator. A book that we've 604 00:36:15,520 --> 00:36:18,920 Speaker 1: all read six times is the idea of go to Florida, 605 00:36:19,120 --> 00:36:24,200 Speaker 1: which is a classic moment in that book. Nowadays, when 606 00:36:24,200 --> 00:36:27,319 Speaker 1: we're wired up and listening to Bloomberg surveillance five days 607 00:36:27,360 --> 00:36:30,880 Speaker 1: a week, we don't have luxury of going to Florida anymore, 608 00:36:30,880 --> 00:36:34,120 Speaker 1: do we. It's it is astonishing how the business has 609 00:36:34,200 --> 00:36:36,759 Speaker 1: changed in the in the forty years that I've been 610 00:36:36,760 --> 00:36:40,239 Speaker 1: writing my newsletter. Uh now it is truly not just 611 00:36:40,280 --> 00:36:43,480 Speaker 1: twenty seven, it's seven three sixty five. There are no 612 00:36:43,600 --> 00:36:46,120 Speaker 1: days off, there are no hours off, and you're right, 613 00:36:46,120 --> 00:36:48,800 Speaker 1: there is no going to Florida. You cannot escape the news. 614 00:36:49,239 --> 00:36:52,440 Speaker 1: And as a trader, as an investor, you're always listening 615 00:36:52,480 --> 00:36:55,479 Speaker 1: to what's going on and making adjustments. Sometimes you wish 616 00:36:55,480 --> 00:36:57,719 Speaker 1: you'd just had gone to Florida, put your orders in 617 00:36:57,840 --> 00:37:00,120 Speaker 1: given two and three and four and five, per and 618 00:37:00,200 --> 00:37:03,759 Speaker 1: stops and watched what's happening the The What I think 619 00:37:03,880 --> 00:37:06,560 Speaker 1: is important here and drives me crazy, is that the 620 00:37:06,600 --> 00:37:08,680 Speaker 1: trend in the equities market still is from the lower 621 00:37:08,760 --> 00:37:10,680 Speaker 1: left to the upper right. It still is breaking out 622 00:37:10,719 --> 00:37:13,520 Speaker 1: to the upside. We may take issue with the fact 623 00:37:13,560 --> 00:37:16,759 Speaker 1: that it's being driven by central bank monetary policies, but 624 00:37:16,800 --> 00:37:19,200 Speaker 1: that is in fact the order of the day, and 625 00:37:19,280 --> 00:37:21,200 Speaker 1: every time I try to fade it, I find out 626 00:37:21,200 --> 00:37:24,319 Speaker 1: that that's the wrong thing to do. It's sometimes you 627 00:37:24,360 --> 00:37:26,799 Speaker 1: just have to adopt the perspective of a four year 628 00:37:26,840 --> 00:37:29,000 Speaker 1: old look at the chart and say which direction is 629 00:37:29,000 --> 00:37:30,840 Speaker 1: that going? And it's going from the lower left of 630 00:37:30,840 --> 00:37:32,960 Speaker 1: the upper right, So I guess you have to say 631 00:37:32,960 --> 00:37:37,399 Speaker 1: by them. But it has been very, very, very difficult. Well, 632 00:37:38,520 --> 00:37:43,600 Speaker 1: it seems to have changed completely the way the markets operate, 633 00:37:43,640 --> 00:37:47,040 Speaker 1: because not only you have constant real time information, how 634 00:37:47,040 --> 00:37:50,600 Speaker 1: do you separate out what's good and what's bad. You 635 00:37:50,719 --> 00:37:54,439 Speaker 1: also have computers doing much of the judging. So it's 636 00:37:54,480 --> 00:37:56,640 Speaker 1: got to be a different environment. I mean, you talk 637 00:37:56,719 --> 00:37:59,080 Speaker 1: about your many years, I don't want to repeat how 638 00:37:59,080 --> 00:38:03,280 Speaker 1: many years in the business, but it's if for somebody 639 00:38:03,280 --> 00:38:05,960 Speaker 1: who started in a different world, it's going to be frustrating. 640 00:38:06,760 --> 00:38:09,560 Speaker 1: It is, uh. I don't mind the computers as much 641 00:38:09,600 --> 00:38:12,440 Speaker 1: as everybody else does, because they're they're simply taking historical 642 00:38:12,480 --> 00:38:16,880 Speaker 1: circumstances into effect and making judgments. They are utterly passion 643 00:38:16,960 --> 00:38:19,960 Speaker 1: less about it. I don't mind them. They offer liquidity 644 00:38:20,000 --> 00:38:22,080 Speaker 1: to the markets, and a lot of people will take 645 00:38:22,120 --> 00:38:26,160 Speaker 1: an issue with the fast trading that the computers generate. 646 00:38:26,200 --> 00:38:27,840 Speaker 1: But I do think that they're taking the place of 647 00:38:28,560 --> 00:38:30,600 Speaker 1: the specialists on the floor of the New York Stock Exchange. 648 00:38:30,600 --> 00:38:33,399 Speaker 1: You simply no longer exist. So I don't argue with them, 649 00:38:33,440 --> 00:38:37,160 Speaker 1: but I do find it a bit more difficult to 650 00:38:37,160 --> 00:38:39,640 Speaker 1: to deal with markets where the information comes at you 651 00:38:39,760 --> 00:38:42,959 Speaker 1: so fast, so quickly, so efficiently, and we're all trying 652 00:38:43,000 --> 00:38:45,520 Speaker 1: to understand what it means. I try to be the 653 00:38:46,200 --> 00:38:50,160 Speaker 1: sieve through which the important pieces of information show up, 654 00:38:50,160 --> 00:38:51,600 Speaker 1: and I want to show it everybody here, this is 655 00:38:51,640 --> 00:38:55,200 Speaker 1: what I think is important. But it's still nonetheless extraordinarily difficult. 656 00:38:55,200 --> 00:38:56,960 Speaker 1: And Dennis will pick up on sand Or just because 657 00:38:57,000 --> 00:38:59,960 Speaker 1: they're in the news with the bear uh Merger st Louis. 658 00:39:00,000 --> 00:39:02,640 Speaker 1: It's not the Monsanto that Dennis Gartman and I remember 659 00:39:02,680 --> 00:39:06,880 Speaker 1: from our ute, but they deliver a modest two percent 660 00:39:06,960 --> 00:39:10,759 Speaker 1: yield of a fourteen percent five year dividend growth. Is 661 00:39:10,760 --> 00:39:13,640 Speaker 1: the dividend growth model done the Wall Street Journal rights 662 00:39:13,680 --> 00:39:18,080 Speaker 1: it up today. Do you believe that growing dividends has 663 00:39:18,120 --> 00:39:21,759 Speaker 1: had its day just because everybody's on board the trade? Well, 664 00:39:21,800 --> 00:39:23,920 Speaker 1: I think dividends are important, and I think growing them 665 00:39:24,000 --> 00:39:26,000 Speaker 1: is indeed important. But what we have seen in the 666 00:39:26,000 --> 00:39:27,480 Speaker 1: course of the past year and a half is that 667 00:39:28,000 --> 00:39:30,480 Speaker 1: dividends stocks that work cheap a year and a half 668 00:39:30,480 --> 00:39:34,440 Speaker 1: ago are now extraordinarily, extraordinarily expensive. There is nothing except 669 00:39:34,480 --> 00:39:36,399 Speaker 1: at the at the margins where you're going to get 670 00:39:36,400 --> 00:39:38,600 Speaker 1: four and four and a half and five percent dividends. 671 00:39:38,880 --> 00:39:40,960 Speaker 1: What used to be in Monsanto that did have four 672 00:39:41,000 --> 00:39:43,279 Speaker 1: percent dividends several years ago was now what, as you 673 00:39:43,320 --> 00:39:45,440 Speaker 1: just said, two and a half percent. That tells you 674 00:39:45,480 --> 00:39:49,520 Speaker 1: how how extended the stock market is. Nonetheless, it's still 675 00:39:49,520 --> 00:39:51,640 Speaker 1: moving from the lower left to the upper right. And 676 00:39:51,680 --> 00:39:54,720 Speaker 1: here's a bit of wisdom, it will continue till it stops. 677 00:39:55,920 --> 00:39:59,719 Speaker 1: How do central banks figure into that? Um? They are 678 00:40:00,080 --> 00:40:02,760 Speaker 1: They are the entire figure aren't they. They are forced 679 00:40:02,760 --> 00:40:05,600 Speaker 1: feeding reserves into the system, whether you like it or not, 680 00:40:06,160 --> 00:40:08,520 Speaker 1: and and and the hard money people shall argue against it, 681 00:40:08,560 --> 00:40:11,400 Speaker 1: but nonetheless that's the reality. And as long as they 682 00:40:11,440 --> 00:40:13,600 Speaker 1: continue to do so, and they'll stop when they stop, 683 00:40:13,600 --> 00:40:15,440 Speaker 1: and they don't look like they have any attention of 684 00:40:15,440 --> 00:40:19,520 Speaker 1: stopping in anytime soon, as long as they're creating those reserves, 685 00:40:19,800 --> 00:40:22,080 Speaker 1: and those reserves are not going to plant equipment and 686 00:40:22,160 --> 00:40:25,799 Speaker 1: labor at any at any extreme, any extreme past that 687 00:40:25,880 --> 00:40:29,759 Speaker 1: money on the mart and equity investment. That's what's going on, Dennis. 688 00:40:29,800 --> 00:40:32,600 Speaker 1: Many people read you for the craft of the language. 689 00:40:32,600 --> 00:40:35,560 Speaker 1: They kid you about shell and this and the other 690 00:40:35,640 --> 00:40:40,799 Speaker 1: gartmin is ms. You have a fabulous phrase today, redeeming factors. 691 00:40:41,520 --> 00:40:46,560 Speaker 1: We have redeeming factors in our economic data. What is 692 00:40:46,600 --> 00:40:51,120 Speaker 1: the redeeming factor that your yelling should focus on. I 693 00:40:51,160 --> 00:40:53,520 Speaker 1: think the redeeming factor that you should focus upon is 694 00:40:53,560 --> 00:40:56,200 Speaker 1: the fact that in the last employment numbers, the most 695 00:40:56,239 --> 00:40:59,040 Speaker 1: important important number that came out was one that people 696 00:40:59,080 --> 00:41:01,440 Speaker 1: pay very little in two and that is that the 697 00:41:01,520 --> 00:41:04,640 Speaker 1: average work week fell two tens of an hour over 698 00:41:04,680 --> 00:41:07,640 Speaker 1: the past two months. That is the rough equivalent of 699 00:41:07,680 --> 00:41:11,160 Speaker 1: having lost three hundred thousand non farm payrolls people who 700 00:41:11,200 --> 00:41:13,879 Speaker 1: have been working thirty four point six hours are now 701 00:41:13,920 --> 00:41:17,080 Speaker 1: on average, we're working thirty four point four hours. That's 702 00:41:17,080 --> 00:41:19,840 Speaker 1: a disturbing number, and I think that Dr Yellen should 703 00:41:19,880 --> 00:41:25,359 Speaker 1: pay their inordinate extreme attention to that number more than 704 00:41:25,400 --> 00:41:29,400 Speaker 1: the non farm payrolls number itself. August is a reputation 705 00:41:29,440 --> 00:41:32,920 Speaker 1: for being a difficult seasonally adjusted month and which payrolls 706 00:41:32,960 --> 00:41:35,719 Speaker 1: get revised up, usually by a lot. So how much 707 00:41:35,760 --> 00:41:39,279 Speaker 1: attensition do we really pay to that data? Um the 708 00:41:39,600 --> 00:41:43,239 Speaker 1: payrolls number gets revised, the the hour's work tends not 709 00:41:43,280 --> 00:41:46,400 Speaker 1: to be that seriously revisable. But the payrolls number itself, 710 00:41:47,080 --> 00:41:52,200 Speaker 1: August is a a very a preposterous month for revisions. 711 00:41:52,200 --> 00:41:56,000 Speaker 1: Will probably revise last month's number that one five or 712 00:41:56,000 --> 00:41:58,000 Speaker 1: whatever it does, to two hundred plus by the time 713 00:41:58,040 --> 00:41:59,920 Speaker 1: where it's done, so we shouldn't be surprised by that. 714 00:42:00,040 --> 00:42:02,520 Speaker 1: But is the average work week? Does that number get 715 00:42:02,520 --> 00:42:06,720 Speaker 1: revised dramatically rarely? Dennis Garbon, thank you so much, greatly 716 00:42:06,880 --> 00:42:08,759 Speaker 1: appreciate it. Mike, did you know that we got through 717 00:42:08,760 --> 00:42:14,960 Speaker 1: a discussion with gartment without mentioning NC football? We didn't, 718 00:42:15,480 --> 00:42:20,800 Speaker 1: We did, be William and Mary to fourteen, will you 719 00:42:21,000 --> 00:42:24,160 Speaker 1: and marry well as we were as we love loving. 720 00:42:24,200 --> 00:42:26,440 Speaker 1: They refer to them here at Bill and Mary may 721 00:42:26,440 --> 00:42:28,680 Speaker 1: be Mary, but Dylan Mary is a very good school. 722 00:42:28,719 --> 00:42:33,920 Speaker 1: They they play FCS football very well. Stopped. Please, we 723 00:42:34,040 --> 00:42:36,840 Speaker 1: got We have four journalists over in Bloomberg News that 724 00:42:36,920 --> 00:42:40,680 Speaker 1: to be sedated this morning. There the tribe. The tribe 725 00:42:40,719 --> 00:42:45,520 Speaker 1: went under state Dennis Gartment taking it out on William 726 00:42:45,520 --> 00:42:50,520 Speaker 1: and Mary. Thanks for listening to the Bloomberg Surveillance podcast. 727 00:42:50,880 --> 00:42:55,960 Speaker 1: Subscribe and listen to interviews on iTunes, SoundCloud, or whichever 728 00:42:56,120 --> 00:42:59,839 Speaker 1: podcast platform you prefer. I'm on Twitter at Tom Key. 729 00:43:00,440 --> 00:43:04,400 Speaker 1: Michael McKee is at Economy. Before the podcast, you can 730 00:43:04,440 --> 00:43:14,839 Speaker 1: always catch us worldwide. I'm Bloomberg Radio. Who you put 731 00:43:14,880 --> 00:43:18,600 Speaker 1: your trust in? Matters. Investors have put their trust in 732 00:43:18,760 --> 00:43:23,000 Speaker 1: independent registered investment advisors to the tune of four trillion dollars. 733 00:43:23,440 --> 00:43:30,080 Speaker 1: Why learn more and find your independent advisor dot com