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Speaker 1: Brought you by Bank of America Mary Lynch. Investing in

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Speaker 1: local communities, economies and a sustainable future. That's a power

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Speaker 1: of global connections. Mary Lynch, Pierce Fenner and Smith Incorporated

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Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast.

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Speaker 1: I'm Tom Keene with David Gura. Daily we bring you

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Speaker 1: insight from the best in economics, finance, investment and international relations.

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Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and

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Speaker 1: of course on the Bloomberg. We begin with Sebastian Galley.

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Speaker 1: He's a senior currency strategy of Boutsche Bank and he's

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Speaker 1: kindly joined us here on Bloomberg eleven. Three Oh studios,

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Speaker 1: Let's start with Breggsit. We're looking ahead to April five,

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Speaker 1: when the EU Parliament begins to take up what we've

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Speaker 1: seen working its way from London to Brussels. What was

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Speaker 1: your sense of what reason they had to say in

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Speaker 1: her speech and sort of how this is all going

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Speaker 1: to play out over these next these next two years. Well,

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Speaker 1: what do you have is typical incoherence between one party

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Speaker 1: and the second and when they send you to a

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Speaker 1: training in the Europe in EU for negotiation and actually

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Speaker 1: was one of these officials. The first thing they teach

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Speaker 1: you is that the beginning is a high divergence and

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Speaker 1: one next step is basically too showing what each of

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Speaker 1: the parties wants to show. And this is what the

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Speaker 1: UK has done. It's shown this roadmap. The Europeans have

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Speaker 1: leaked their own road maps. It's all very helpful and

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Speaker 1: very civilized, and both of the road maps actually are

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Speaker 1: completely incoher and this is absolutely normal. What you show

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Speaker 1: is you show your cards and then you do the exchange.

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Speaker 1: So what is are you willing to exchange? Apparently the

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Speaker 1: British are having a bit of a sense of humor

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Speaker 1: and suggesting that Gibraltar is off the map, and so

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Speaker 1: I don't think that's what the Europeans were looking for.

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Speaker 1: But the exchange will happen and the right. The problem

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Speaker 1: is that they only have two years to figure out

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Speaker 1: what they can give and on each side, and it

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Speaker 1: looks like it's politically difficult for the British to accept

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Speaker 1: some realities. Um and they'll take them to sometime basically

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Speaker 1: to diffuse the reality through the UK political system. They

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Speaker 1: already have accepted that they will actually contribute monies uh

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Speaker 1: to the European Union, which for conservative is extremely hard

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Speaker 1: to do UM. And so there's a nice, decent process.

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Speaker 1: Will will it happen within two years? And very few

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Speaker 1: people expected, particularly the European typical negotiations the last five

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Speaker 1: to up to ten years, and so this is probably

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Speaker 1: more what we should look forward to. The UK is

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Speaker 1: doing his job, Europe is doing his job. There's going

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Speaker 1: to be a lot of noise UM, which is typical

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Speaker 1: at the beginning of the process. That noise will eventually

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Speaker 1: start to settle down and converge towards some form of solution.

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Speaker 1: It will be very painful in detail. It will go

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Speaker 1: into Spanish fishermen going into uh UK territorial waters and

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Speaker 1: the likes and the usual stuff we've been dealing with

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Speaker 1: in Europe for a long time. So very European. Actually,

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Speaker 1: how does this affect your world over these next these

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Speaker 1: next two years. You've got these two disparate maps, as

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Speaker 1: you say, a lot of noise in the fore x space.

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Speaker 1: How do you approach what's happening? Well, what it does

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Speaker 1: suggest is the for now in the UK is kind

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Speaker 1: of fine from a legal point of view in terms

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Speaker 1: of its access and everything. So that might actually continue

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Speaker 1: for longer than anyone would would expect. So it's a

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Speaker 1: less of a concern I guess from a short term

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Speaker 1: tactical point of view, from the point of view of

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Speaker 1: somebody investing into the UK as uh, these uh, you know,

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Speaker 1: these different negotiations clarify themselves and that might may take

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Speaker 1: up to a year, and then the in terms of

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Speaker 1: FDI and the like, it is actually going to be

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Speaker 1: a decent story. The pound by some measures is undervalued. Uh,

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Speaker 1: and so it might be attractor for people investing in

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Speaker 1: commercial real estate real estate into into the United Kingdom.

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Speaker 1: Might be interesting for some sovereign wealth funds and reserve

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Speaker 1: managers to to build up some positions in the in

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Speaker 1: the UK. And so it's it's not such a bad

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Speaker 1: story for the UK. The market has vastly priced the

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Speaker 1: Brexit story for good reasons and uh, and you know,

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Speaker 1: they does offer some considerable opportunities for for the UK

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Speaker 1: has not necessarily a manufacturing base, but a base of

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Speaker 1: services which is somewhat cheaper. It allows them to keep

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Speaker 1: the city because it has reduced the cost of holding

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Speaker 1: the city, uh in the UK versus you know, moving

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Speaker 1: a lot of their people out into Ireland, UH, France

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Speaker 1: or Germany for that matter, but some of it will happen.

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Speaker 1: You had the EU commissioned President, you Council president rather

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Speaker 1: talking about how united in front these twenty seven nations

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Speaker 1: we're gonna we're gonna present. Is this an opportunity for

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Speaker 1: more cohesiveness or does the fractiousness of the EU continue

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Speaker 1: to play role that that's going to make it difficult

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Speaker 1: for these negotiations take place. I like to think of

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Speaker 1: it as UH and for some reason why Irish accident

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Speaker 1: is coming back. But the this probably goes I'm thinking

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Speaker 1: about rugby, but it's it's like a big rugby team

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Speaker 1: and none of the players individually or are quite similar

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Speaker 1: body shape, attitude or the likes, but they do act

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Speaker 1: under crunch as as one unit. And this is typically

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Speaker 1: what you do see. And in the case of the UK,

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Speaker 1: is a pretty clear story. Um and it's not a

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Speaker 1: very divisive one. There are always outliers, are always better

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Speaker 1: places than others, but broadly speaking they actually do behave

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Speaker 1: as a whole. One of the reasons is it's not

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Speaker 1: necessary to punish the UK is to make it more difficult.

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Speaker 1: You're colleing. Allen Ruskin is the one that I guess

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Speaker 1: has provided leadership on an outlier call of weaker sterling.

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Speaker 1: How do you get to a Deutsche Bank weaker sterling?

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Speaker 1: It is an abrupt I'm sorry. It's a game changing

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Speaker 1: decline for the United Kingdom, isn't it. There are two

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Speaker 1: components to it. One is a strong dollar view, which

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Speaker 1: of course would push sterling lord a. Number two is

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Speaker 1: a recognition that some of the impulse we've seen in

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Speaker 1: the UK is actually quite temporary from cyclical point of view,

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Speaker 1: and as it fades lower um, the the b o

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Speaker 1: E is de wish and probably will end up being

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Speaker 1: more do wish than people expect um. And the combination

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Speaker 1: relatively weak growth and to some extend a stronger dollar,

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Speaker 1: as well as some of the improvement that we've seen

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Speaker 1: on the cure and account reversing that generally is not

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Speaker 1: particularly good. So from a cyclical point of view, there

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Speaker 1: there is a claim to be made, which we do

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Speaker 1: that sterling should headlore Having said that the this is

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Speaker 1: a view which is held by the market. One on Brexit,

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Speaker 1: it has made a lot of money on that number

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Speaker 1: two because there are positions related to France, which are

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Speaker 1: yours sterling positions? People have been basically being short year

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Speaker 1: and long sterling, and that, of course is is not

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Speaker 1: helpful if you if you want to have an outright

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Speaker 1: sterling position, The bet there is on a McCrone win

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Speaker 1: when you look at it, when you look at euros sterling. Yeah,

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Speaker 1: there are very heavy bets apparently in the market which

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Speaker 1: are done through your sterling, your yen short bounds, as

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Speaker 1: well as on the O A t U there then

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Speaker 1: through equities basically a bet that Mr mccorn will it

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Speaker 1: will actually win. How do you adjust that to what

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Speaker 1: we observed? I forget about September August twenty, August thirty one,

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Speaker 1: September two, September four, and then ten pm September eight?

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Speaker 1: Is there any humility about poles in France? Given what

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Speaker 1: we witnessed in the United States? You you wouldn't believe

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Speaker 1: the amount of work we actually spend on on poles

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Speaker 1: in general and pulsar spend on poles in general. We

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Speaker 1: do know it's actually very useful. So what do we

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Speaker 1: do is we look at they do what do they

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Speaker 1: call rolling polls, so which basically UH is statistically superior.

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Speaker 1: Number two they use what we call stratified polling, which

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Speaker 1: is you're going to look at every type of worker,

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Speaker 1: for example, every type of age, and you look in

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Speaker 1: extreme details, um and then there are different companies competing

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Speaker 1: against each other to see basically if we actually get

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Speaker 1: the same numbers. And then the journalists of course do

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Speaker 1: not believe whatsoever with the polls are and they have

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Speaker 1: decided in France that they would send people across the

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Speaker 1: field to check and see if there are basically trends

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Speaker 1: which are being missed by the polls. We know that

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Speaker 1: there are bosses the poles. These poles, for example, exclude

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Speaker 1: the people like me, the French outside of the France,

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Speaker 1: as well as their French outside of metropolitan France, and

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Speaker 1: that gives actually bias of roughly plus one percent to

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Speaker 1: MA on the second round because they tend to be

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Speaker 1: a more right way leading. Thank you so much at

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Speaker 1: your bank this morning. Just lots to talk about here

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Speaker 1: and really are re caliber for for April? Are you

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Speaker 1: in tomorrow morning? David girl? This is this is I'm

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Speaker 1: you know, feeling sick. I'm feeling like if you feel typhoid.

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Speaker 1: Starts at nine. The tip off for this national championship game.

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Speaker 1: Is it really? I did not know? Which does me

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Speaker 1: no favors here have to watch the surveillance replay the following.

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Speaker 1: I'm in the eleventh percentile. I feel pretty good. I'm

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Speaker 1: like walking around, strutting around, seb I do this as

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Speaker 1: like rugby. I do it off the color of the jersey.

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Speaker 1: That's that's how I do it. And Michael Barr, I'm

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Speaker 1: in the eleventh percentile. And then sat Rachel walked in

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Speaker 1: this morning. Do you realize she is number four out

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Speaker 1: of people in in all of Bloomberg Bloomberg Land. Ya.

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Speaker 1: This is our executive producer Folks, who often sits between

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Speaker 1: me and David and radio to keep us apart. I

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Speaker 1: knew it wasn't me because that when I walked in

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Speaker 1: the door I heard typhoid. Do you know that Rachel

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Speaker 1: even had Purdue going long and she's still like kills

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Speaker 1: her even though her boiler makers went down flames. It's extraordinary. Yeah, well,

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Speaker 1: I had to look up for Gonzaga. Is this weekend?

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Speaker 1: To be honest, Good morning Eastern Washington. No thrill, that's thrilled.

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Speaker 1: You're listening in Washington State, in Idaho and Spokane or Spokeane,

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Speaker 1: I think I watched a tip off. Don't wake up

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Speaker 1: when the game has finished. What's what the Rangers are doing? Now? Okay,

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Speaker 1: folks had fun with this. I mean, I gotta hate

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Speaker 1: mail this weekend from Manila. You know nothing about basketball,

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Speaker 1: I said, You're right, David Gern Tom Kane, good morning everyone.

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Speaker 1: I appreciate your attendance in Washington in our FM news bureau. Uh.

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Speaker 1: Ted Alden of the Council on Foreign Relations, This book

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Speaker 1: is Failure to a just can't say enough about it

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Speaker 1: on trade, Jed. All of my reading on China is

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Speaker 1: that they have ever advantage to wait and wait and wait.

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Speaker 1: Do they outweigh this president to the next president? Oh? I,

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Speaker 1: I think there's no question. You know, they're they're playing

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Speaker 1: the long game. They're very patient. I think if you

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Speaker 1: look at the way they reacted to Trump after the election,

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Speaker 1: during the transition period, he was firing off some provocative tweets.

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Speaker 1: UH call with the president of Taiwan. He did a

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Speaker 1: number of provocative things, and the Chinese responded quite calmly

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Speaker 1: and steadily. So yeah, I think they will wait as

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Speaker 1: long as they need to wait. Ted. I talked to

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Speaker 1: Wilba Ross, the Secretary of Commerce, on Friday, and I

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Speaker 1: asked him what was going to be on the agenda

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Speaker 1: for these meetings in Florida. He said, trade is gonna

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Speaker 1: be high up there. What is this administration? What what's

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Speaker 1: the outcome they hope for out of this this meet

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Speaker 1: and greet that's this two day meeting at mar Lago.

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Speaker 1: I do not think they have any particular deliverables in mind.

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Speaker 1: I think they want to try to get some sense

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Speaker 1: that the Chinese are wanting to cooperate on North Korea,

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Speaker 1: which is obviously at something of a crisis point in

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Speaker 1: terms of North Korea's ability to to develop a deliverable

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Speaker 1: nuclear missile. I think on trade, I think all they

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Speaker 1: want is an acknowledgement that it's a big issue between

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Speaker 1: the United States and China, that the trade deficit is

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Speaker 1: a problem, and that they're going to deal with it.

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Speaker 1: I don't expect anything more specific than that out of

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Speaker 1: this meeting. Secretary Ross was at his most animated when

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Speaker 1: I asked him about this letter, this draft of a

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Speaker 1: letter that was leaked by congressional staffers. UH to to

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Speaker 1: get anaf to talk started again, you have to give

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Speaker 1: ninety days notice. I I gather, what's your sense of

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Speaker 1: the timetable there. This administration seems eager to reopen conversations

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Speaker 1: about what happens to NAFTA. Do we know more about

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Speaker 1: what provisions in particular they hope to see changed. Well,

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Speaker 1: that that letter is a bit of a laundry letter.

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Speaker 1: Stand there are things in there that have been on

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Speaker 1: the agenda for a long time. There's a bunch of

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Speaker 1: things in there, ironically that we're renegotiated as part of

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Speaker 1: the Transpacific Partnership that President Trump walked away from on

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Speaker 1: day one. And there are other items that I think

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Speaker 1: would be very controversial, um, you know, taking a look

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Speaker 1: at at tax issues, the dispute settlement process, over trade cases,

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Speaker 1: anti dumping, countervailing duty cases, that US wants a kind

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Speaker 1: of snap back provision where it can reimpost tariffs. So

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Speaker 1: so there are some pretty explosive items in that list.

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Speaker 1: We just don't know what the priority is. It's a

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Speaker 1: bit of a laundry list at this point, a bit

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Speaker 1: of a laundry list. And I was surprised as well,

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Speaker 1: drawing from that conversation the degree to which Secretary Ross

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Speaker 1: said that the the TPP would provide some starting points

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Speaker 1: for these negotiations. So I suppose the t p P

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Speaker 1: lives on. What do you think will will continue to

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Speaker 1: shape trade policy from that that trade bill that we've

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Speaker 1: stepped out of. I I think that this administration is

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Speaker 1: just in this period where it's trying to figure out

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Speaker 1: where the openings are. I mean, Donald Trump has made

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Speaker 1: a lot of big promises on trade that he's gonna

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Speaker 1: change direction in some fundamental ways, and and everything that

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Speaker 1: we've seen so far is rather modest. I mean Paul

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Speaker 1: Krugman in his column this morning called the executive actions

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Speaker 1: on Friday a couple of nothing burgers, and I think

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Speaker 1: that was largely correct. Um, I don't think that there

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Speaker 1: there's anything there, so so I I continue to be

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Speaker 1: puzzled what kinds of specifics they're they're gonna go for.

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Speaker 1: They've got more cautious, which may be a good thing. Well,

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Speaker 1: if we all understand anybody listen to this, whatever their politics.

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Speaker 1: Multilateral is gone. It was from another time and place.

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Speaker 1: And then I guess there's bilateral, and then there's unilateral.

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Speaker 1: And to pick up by nothing burgers, is there no lateral?

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Speaker 1: Is the basic idea here is we have a party

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Speaker 1: or a theology that says, we don't want to do trade,

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Speaker 1: we don't want to argue with anybody. Well, I mean

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Speaker 1: you you could. I mean you you could have an

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Speaker 1: administration that says, look, we're gonna live with the status

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Speaker 1: quo in terms of the agreements, and we're going to

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Speaker 1: try to do better in terms of exporting using the

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Speaker 1: as we have. There's nothing wrong with that. I mean,

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Speaker 1: there's nothing that says that every agreement has to be

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Speaker 1: superseded by another agreement and another agreement. We've been doing

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Speaker 1: that for fifty or sixty years, but there's no ironclad

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Speaker 1: law that you have to keep doing that. You could

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Speaker 1: just work in the rules you've got. Right now, what's

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Speaker 1: this document gonna look like that Secretary Ross and his

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Speaker 1: colleagues are going to prepare over these next ninety days?

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Speaker 1: He called it unprecedented degree to which he's gonna look

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Speaker 1: at this on a company by company basis. Helped me

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Speaker 1: with the history. How unprecedented is it? And then what

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Speaker 1: what's a what's that ninety ninety day document gonna look like? Well?

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Speaker 1: I don't think it is all that unprecedented. I mean,

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Speaker 1: the US Trade Representatives Office every year releases what's called

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Speaker 1: the National Trade Estimates, and it looks into foreign trade bearers.

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Speaker 1: It's a five hundred plus page document of all the

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Speaker 1: places that we think our trading partners aren't living up

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Speaker 1: to their obligations. I presume it's going to repeat a

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Speaker 1: lot of that. The only difference maybe a bit more

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Speaker 1: of a focus specifically on the countries with which the

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Speaker 1: US runs a large trade deficit. But but of course,

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Speaker 1: I mean, as you know, trade deficits are not all

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Speaker 1: driven by trade policy. A lot of it has to

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Speaker 1: do with savings and balances and big macro economic question.

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Speaker 1: I don't know whether they're gonna get into that. I

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Speaker 1: don't know where they're include currency. That's treasury territory historically,

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Speaker 1: a lot of unknowns. Again, Ted Alton, thank you so

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Speaker 1: much with the consolant Foreign Relations is Important book as

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Speaker 1: Failure two Adjustment, brought you by Bank of America. Mary Lynch,

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Speaker 1: dedicated to bringing our clients insights and solutions to meet

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Speaker 1: global connections. Mary Lynch, Pierce feederin Smith Incorporated, Member s

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Speaker 1: I p C. Mr renn is with the Scott Wren

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Speaker 1: when we won't ask about Scott Rens Brackett. Scott help

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Speaker 1: me with the equity market bracket if you would. Uh,

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Speaker 1: we're just talking with Lindsay Bell of c f r

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Speaker 1: A about the the double digit reality we live in.

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Speaker 1: When does that end? Well, Tom Lee, let's talk about

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Speaker 1: the market, because my best ball bracket was a complete disaster.

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Speaker 1: But you know, our view really hasn't changed in terms

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Speaker 1: of what the market's going to do this year since

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Speaker 1: late September of last year when we set our targets.

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Speaker 1: You know, we've been looking for the SMP five to

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Speaker 1: hit its annual high for somewhere around the middle of

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Speaker 1: the year. Um. You know, we have an upper end

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Speaker 1: of our target ranges. We thought it would be at

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Speaker 1: our our slightly above that. We've been slightly above that.

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Speaker 1: So for us, um, you know, could the market trade

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Speaker 1: a little bit higher? Sure? Is it going to trade

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Speaker 1: a lot higher? We don't think so. We think we're

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Speaker 1: going to see a fade um you know, end up

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Speaker 1: somewhere somewhere like that at the end of the year.

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Speaker 1: So you know, our views really have not changed over

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Speaker 1: the last uh, you know, six months or so. I

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Speaker 1: thought your sense of the economy Scott Rent. Well, you know, David,

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Speaker 1: I think it's still you know, you're grinding and out.

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Speaker 1: You're in a modest growth economy. You don't have a

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Speaker 1: lot of inflation, although I think we're gonna see a

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Speaker 1: little bit of wage push here and I think that's

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Speaker 1: going to be the head wind really for the market

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Speaker 1: in the second half here. Um, But you know, the

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Speaker 1: economy continues to chug along, labor market continues to slowly improve,

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Speaker 1: consumer spending is okay. So I don't think there's really

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Speaker 1: been much of a change in the economy at all,

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Speaker 1: not just versus twenty sixteen, but really thirteen. I mean

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Speaker 1: this has been a you know, this has been a

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Speaker 1: two on a calendar year kind of recovery for the

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Speaker 1: most part. And and I think Throughen that's not going

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Speaker 1: to change. And and really, um, probably as well. We're

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Speaker 1: talking about healthcare with Lindsay at Bell. How much was

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Speaker 1: was the when investors looked at that healthcare healthcare bill,

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Speaker 1: the potential for a healthcare at how much was that

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Speaker 1: about healthcare versus something else? How much investors actually care

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Speaker 1: that had to do with healthcare. I don't think investors

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Speaker 1: had very much that had to do with health care,

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Speaker 1: and I think that it was just an overall feel

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Speaker 1: for Okay, is this is you know, what does this

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Speaker 1: mean for the rest of the agenda. Are we going

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Speaker 1: to see anything at all? We're going to see any

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Speaker 1: cooperation with the president from the Republicans. We know we're

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Speaker 1: not going to get much from the Democrats. So I

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Speaker 1: think it was the market took it as a little

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Speaker 1: bit of a broader signal, and I think overall, you know,

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Speaker 1: the market has been more optimistic, or at least some

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Speaker 1: investors have been more optimistic, thinking we would actually see

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Speaker 1: some economic effects from some proposals in which you know,

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Speaker 1: we just don't see that. I look, Scott Ram where

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Speaker 1: we are and to me, is this miracle of single

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Speaker 1: digit organic revenue growth becoming double digit? Wondered down the

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Speaker 1: income statement. Have you been surprised at that? Have you

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Speaker 1: been surprised at the persistency of leverage, good instructive use

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Speaker 1: of leverage to operating margin expansion? Well, I think that,

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Speaker 1: you know, margins have have really hung in here. We've

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Speaker 1: looked for them to continue to hang in here. We

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Speaker 1: still think they're going to be rather high. You know,

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Speaker 1: the consensus Earrings estimate we've been at a hundred and

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Speaker 1: twenty seven dollars. Uh, you know, I don't think it

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Speaker 1: was that long ago where the consensus was at a

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Speaker 1: hundred and thirty five or so. You know, now we're

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Speaker 1: down to a hundred and thirty. I think we're probably

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Speaker 1: gonna see estimates come off. There's about a ten percent

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Speaker 1: uh ten percent expectation for the first quarter something like that.

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Speaker 1: I think that's okay, but net net, the consensus I

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Speaker 1: think for a little too optimistic, David. I I find

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Speaker 1: it remarkable lectures, the panels of speeches I've been added

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Speaker 1: part of where everybody was certain about five or six

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Speaker 1: of the most eight or nine percent return on necrews

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Speaker 1: just stunning. Scott R. How much of a driver are

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Speaker 1: earnings at this point when you're looking well, you know, David,

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Speaker 1: it's kind of funny because I don't think, you know,

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Speaker 1: earnings were absolutely zero driver all through because people were

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Speaker 1: looking for landeen for you know, at least a year

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Speaker 1: ahead of time. I think this year earnings will be

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Speaker 1: a little bit more important. Um. I don't think that

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Speaker 1: you know, these modest expectations that's what we're going to see. Um,

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Speaker 1: you know, to three dollars of earnings over the course

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Speaker 1: of the year. You're splitting hairs there. But I think

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Speaker 1: what's going to continue to to drive things and what

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Speaker 1: people are going to be thinking about is what policies

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Speaker 1: might be implemented. Is the magnitude going to be enough

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Speaker 1: to move the needle on an eighteen trillion dollar economy? Um?

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Speaker 1: And what kind of cooperation of course, all that means

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Speaker 1: for you know, between Congress and new administration. So you know, earnings,

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Speaker 1: you know, when you're growing two, I mean the chance

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Speaker 1: of a big, big beat or a big miss. Overall,

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Speaker 1: it's it's really slim um. So I don't think earnings

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Speaker 1: are going to be a big driver here. But help

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Speaker 1: me here with where I go. I mean bonds. Can

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Speaker 1: you find a coupon that justifies ownership of bonds? Given

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Speaker 1: word Cherry Yellin's heading, Well, I think that's pretty tough.

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Speaker 1: And I think our you know, our fixed income guys

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Speaker 1: would tell you that you still want to own some bonds.

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Speaker 1: But you know, on the stock market, we're not looking

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Speaker 1: for the end of the cycle. We're just looking for

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Speaker 1: some headwinds, some a little bit of fear of wage

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Speaker 1: inflation in a little bit of a fear that the

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Speaker 1: FED might be behind the curve. Um, we've had a

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Speaker 1: good run here obviously over the course of the last

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Speaker 1: six or seven years, and so I think this is more.

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Speaker 1: This will be when you look at the market on

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Speaker 1: December thirty one versus where it was on January one,

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Speaker 1: you know, this will be more of a stall year.

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Speaker 1: Maybe you see till the return of low single digit

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Speaker 1: six something like that, which you know, that's fine. I mean,

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Speaker 1: this is like you said, the economy is grinding it out.

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Speaker 1: This is kind of a grinded out kind of market. Um,

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Speaker 1: we want to still lean towards those sectors that are

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Speaker 1: sensitive to a continuation of the recovery. Now, if we'd

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Speaker 1: see a run up here to something, we may make

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Speaker 1: some adjustment, a little less cyclical that kind of thing.

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Speaker 1: But you know, I think you still have to lean

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Speaker 1: for lean towards those cyclical sectors still out performance. So

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Speaker 1: give me an example that narrow that down. Give me

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Speaker 1: that would be industrials, the consumer discretionary sector. Financials. We

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Speaker 1: also like healthcare, but obviously is toothpaste discretionary. Two is

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Speaker 1: not discretionary, It's not really Give us an example of

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Speaker 1: the consumer discretion people, it is, I guess, but but yeah,

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Speaker 1: so we want we want things that, um that are

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Speaker 1: going to benefit from, you know, continuation of good consumer cinema,

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Speaker 1: continuation of a decent labor market, better growth internationally, a

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Speaker 1: little bit better, better growth here, a little bit better.

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Speaker 1: You know, those kinds of things. Cardinals opening day, Oh

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Speaker 1: you know when you know when you when you win

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Speaker 1: in the bottom of the night um on your home

429
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Speaker 1: opener versus the reigning world champions um. That's a good feeling,

430
00:23:15,760 --> 00:23:18,200
Speaker 1: I guess. So, Scott Wren, thank you so much, greatly

431
00:23:18,240 --> 00:23:21,440
Speaker 1: appreciate it. With Wills Fargo, Uh say, those Cardinals for

432
00:23:21,640 --> 00:23:30,159
Speaker 1: three Yankees I've seen. I've seen like fourteen surveys in

433
00:23:30,160 --> 00:23:33,240
Speaker 1: a row. Michael bar they have a red Sox taking everything.

434
00:23:33,840 --> 00:23:36,439
Speaker 1: My radar is so up, I don't even know if

435
00:23:36,440 --> 00:23:39,560
Speaker 1: I can get to the problem. I have to count

436
00:23:39,560 --> 00:23:42,720
Speaker 1: it in my fantasy baseball league, and I'm like, oh no,

437
00:23:42,960 --> 00:23:46,000
Speaker 1: and he was great in in spring training. He just

438
00:23:46,200 --> 00:23:49,879
Speaker 1: he lights out and then all of a sudden, Sharon

439
00:23:49,920 --> 00:23:52,600
Speaker 1: had or Susan Weather Yankees Radio, I think it's the

440
00:23:52,720 --> 00:23:56,960
Speaker 1: r A three for those of you global, that's not

441
00:23:57,040 --> 00:23:59,760
Speaker 1: a good number. I want it to be three or

442
00:23:59,800 --> 00:24:16,560
Speaker 1: four work would be your earns run average? What are

443
00:24:16,600 --> 00:24:20,440
Speaker 1: the responsibilities of interns at NPR is on Friday afternoons

444
00:24:20,480 --> 00:24:23,160
Speaker 1: to pick up Ejdon from the lobby and bring him

445
00:24:23,200 --> 00:24:25,800
Speaker 1: up to All Things Considered where he regularly appears with

446
00:24:25,880 --> 00:24:28,240
Speaker 1: David Brooks for a week and review segment was a

447
00:24:28,320 --> 00:24:31,960
Speaker 1: real highlight that right, It's a real highlight for me

448
00:24:32,440 --> 00:24:35,680
Speaker 1: when I wasn't interned at NPR well over a decade ago.

449
00:24:35,680 --> 00:24:38,000
Speaker 1: Eachdon joins us now he's a columnist for the Washington Post,

450
00:24:38,080 --> 00:24:40,399
Speaker 1: the author of Why the Right Went Wrong? Conservatism from

451
00:24:40,440 --> 00:24:43,880
Speaker 1: Goldwater to Trump and beyond. Senior fellow at the Brooklyn Institution, ZJ.

452
00:24:44,000 --> 00:24:46,199
Speaker 1: Great to speak with you again. Thanks for appearing on

453
00:24:46,240 --> 00:24:48,760
Speaker 1: the program. And let's start with with what we learned

454
00:24:48,760 --> 00:24:51,880
Speaker 1: over the course of the last few weeks. Here about

455
00:24:52,720 --> 00:24:57,040
Speaker 1: Washington from the debate over this healthcare law. Less interested

456
00:24:57,080 --> 00:24:59,080
Speaker 1: here in what happens with healthcare and more just about

457
00:24:59,080 --> 00:25:01,239
Speaker 1: the way that Washington is functioning or not under this

458
00:25:01,280 --> 00:25:04,520
Speaker 1: new president. What's your takeaway? Well, first, thank you for

459
00:25:04,680 --> 00:25:07,320
Speaker 1: those very kind words. You'll be pleased to know that

460
00:25:07,480 --> 00:25:10,800
Speaker 1: Mr doesn't waste intern time atty more picking us up

461
00:25:10,840 --> 00:25:14,280
Speaker 1: and we go right out. But that was really good.

462
00:25:14,359 --> 00:25:16,840
Speaker 1: Nice to you to say thank you. Here's what I

463
00:25:16,880 --> 00:25:20,280
Speaker 1: think you saw. You saw first that Donald Trump really

464
00:25:20,359 --> 00:25:24,480
Speaker 1: doesn't care that much about what's in a policy. I

465
00:25:24,520 --> 00:25:26,639
Speaker 1: think one of the best pieces on this was written

466
00:25:26,640 --> 00:25:29,960
Speaker 1: by a young and actually conservative journalist called Tim Alberta

467
00:25:30,280 --> 00:25:33,920
Speaker 1: who used to write for National Works Right Political. And

468
00:25:34,200 --> 00:25:38,520
Speaker 1: there was a moment where Trump was being asked serious

469
00:25:38,600 --> 00:25:42,760
Speaker 1: questions about by some members of the Freedom Caucus and

470
00:25:42,880 --> 00:25:47,639
Speaker 1: he just missed all substantive questions using a barnyard epithet.

471
00:25:47,680 --> 00:25:50,320
Speaker 1: I don't want to spoil your air time by using

472
00:25:50,359 --> 00:25:53,600
Speaker 1: the actual word he used. And he didn't care what

473
00:25:54,280 --> 00:25:56,199
Speaker 1: really what was in the Billy was just looking for

474
00:25:56,240 --> 00:26:01,639
Speaker 1: a win. This bill basically contradicted his zone promises. I

475
00:26:01,640 --> 00:26:04,800
Speaker 1: think on the Paul Ryan's side, what you saw is

476
00:26:05,240 --> 00:26:09,080
Speaker 1: Paul Ryan is far more interested in tax cuts than

477
00:26:09,160 --> 00:26:14,120
Speaker 1: he is in UH in healthcare policy. And this bill,

478
00:26:14,359 --> 00:26:17,639
Speaker 1: you know, according to the CBO, would have led twenty

479
00:26:17,640 --> 00:26:22,080
Speaker 1: four million people to lose their health insurance over a decade. UH.

480
00:26:22,160 --> 00:26:24,159
Speaker 1: That didn't seem to matter much to Rhyme, but it

481
00:26:24,200 --> 00:26:26,320
Speaker 1: did to a lot of members. And here's here's the

482
00:26:26,400 --> 00:26:29,560
Speaker 1: third thing that we've been talking a lot about how

483
00:26:29,600 --> 00:26:33,520
Speaker 1: the Freedom Caucus sank this bill, the right wing members

484
00:26:33,560 --> 00:26:35,560
Speaker 1: of the House. But the New York Times did a

485
00:26:35,640 --> 00:26:39,320
Speaker 1: very interesting analysis that showed that by their account, they

486
00:26:39,359 --> 00:26:42,400
Speaker 1: had thirty three no votes that they had counted, and

487
00:26:42,480 --> 00:26:46,280
Speaker 1: of those a majority were not Freedom Caucus members. A

488
00:26:46,320 --> 00:26:49,119
Speaker 1: lot of them came from either they were either somewhat

489
00:26:49,160 --> 00:26:51,919
Speaker 1: more moderate or sent a right in their views. Some

490
00:26:52,040 --> 00:26:55,320
Speaker 1: of them came from districts that voted for Clinton, and

491
00:26:55,359 --> 00:26:58,080
Speaker 1: they voted against the bill for what you might call

492
00:26:58,240 --> 00:27:01,000
Speaker 1: liberal reasons, which is they didn't want to throw all

493
00:27:01,040 --> 00:27:04,480
Speaker 1: these people off healthcare. So you really had an incoherent

494
00:27:04,600 --> 00:27:10,520
Speaker 1: approach to repealing Obamacare. And I've been quoting my favorite philosopher,

495
00:27:10,600 --> 00:27:13,840
Speaker 1: Joni Mitchell. Actually she's a folk singer, as you know,

496
00:27:14,359 --> 00:27:17,560
Speaker 1: and she said, uh, famously, you don't know what she

497
00:27:17,680 --> 00:27:20,400
Speaker 1: got till it's gone. And a lot of people looked

498
00:27:20,400 --> 00:27:22,720
Speaker 1: at Obamacare and said, gee, we didn't like it because

499
00:27:22,800 --> 00:27:25,280
Speaker 1: we didn't like the label. These were people who didn't

500
00:27:25,280 --> 00:27:28,879
Speaker 1: like President Obama. Um. But they realized that this law

501
00:27:28,960 --> 00:27:31,880
Speaker 1: covers a whole lot of people and so it's not perfect.

502
00:27:31,880 --> 00:27:34,719
Speaker 1: It needs fixing. But this wouldn't have fixed it, This

503
00:27:34,720 --> 00:27:36,439
Speaker 1: would have gotten rid of it. E J. What do

504
00:27:36,480 --> 00:27:38,879
Speaker 1: you make of the White House's approach to healthcare? What

505
00:27:38,880 --> 00:27:40,840
Speaker 1: does it tell us about its approach to tax reform

506
00:27:40,880 --> 00:27:42,720
Speaker 1: is what we look to see. How fulsomely this White

507
00:27:42,720 --> 00:27:45,760
Speaker 1: House would embrace a piece of legislation that was drafted

508
00:27:45,760 --> 00:27:49,280
Speaker 1: by legislators on the Hill is a lesson to be

509
00:27:49,400 --> 00:27:51,520
Speaker 1: learned here that the White House should take a greater

510
00:27:51,640 --> 00:27:55,920
Speaker 1: role in defining what it wants out a tax reform. Absolutely,

511
00:27:56,080 --> 00:28:02,120
Speaker 1: and what's interesting about tax reform is that it splits, uh,

512
00:28:02,200 --> 00:28:08,000
Speaker 1: not only Republicans in Congress, uh, it also splits Republicans

513
00:28:08,000 --> 00:28:10,320
Speaker 1: in the White House. So it's apparently a real war

514
00:28:10,400 --> 00:28:15,400
Speaker 1: going on between those who favor Paul Ryan's proposal, which

515
00:28:15,440 --> 00:28:20,920
Speaker 1: would in effect tax imports by levying the corporate tax

516
00:28:20,960 --> 00:28:24,960
Speaker 1: in different ways domestically, you know, on exports, which would

517
00:28:24,960 --> 00:28:28,320
Speaker 1: be free uh from tax, and on imports, which would

518
00:28:28,320 --> 00:28:32,560
Speaker 1: have a tax. This splits business very much. Importing businesses

519
00:28:32,720 --> 00:28:36,640
Speaker 1: like Walmart really don't like this way of doing corporate

520
00:28:36,640 --> 00:28:40,240
Speaker 1: tax reform. Um, so they're gonna have to make hard choices.

521
00:28:40,360 --> 00:28:44,360
Speaker 1: I just don't think tax reform is easy. The way

522
00:28:44,400 --> 00:28:47,200
Speaker 1: a lot of Republicans seem to be saying it is

523
00:28:47,640 --> 00:28:51,640
Speaker 1: e J. November seven, nineteen seventy two. I believe you

524
00:28:51,680 --> 00:28:55,440
Speaker 1: were exiting stage right Portsmouth Priory, up in Rhode Island,

525
00:28:55,480 --> 00:29:00,440
Speaker 1: on your way to journalism, journalism and literature glory. Mr

526
00:29:00,600 --> 00:29:06,040
Speaker 1: McGovern went down in Flames McGovern Shriver. What does your

527
00:29:06,080 --> 00:29:09,920
Speaker 1: Democrat party do now? Bill Mayor was really heated about

528
00:29:09,920 --> 00:29:13,600
Speaker 1: the Clintons this weekend. What should the Clintons do? And

529
00:29:13,640 --> 00:29:17,520
Speaker 1: what should the Democrats do to regroup? First of all,

530
00:29:17,560 --> 00:29:20,400
Speaker 1: you made me younger than I am. I really appreciate it.

531
00:29:20,440 --> 00:29:24,320
Speaker 1: I worked at college on that election day, but thank you. UM.

532
00:29:24,600 --> 00:29:27,600
Speaker 1: A couple of things. One is UM is sometimes in

533
00:29:27,640 --> 00:29:31,680
Speaker 1: politics we forget the power of negative thinking. Ronald Reagan

534
00:29:32,560 --> 00:29:36,120
Speaker 1: his program was built on three big negatives anti communist,

535
00:29:36,160 --> 00:29:39,600
Speaker 1: anti government, anti tax uh. And I think in this

536
00:29:39,680 --> 00:29:43,280
Speaker 1: period to be opposed to Donald Trump is to be

537
00:29:43,360 --> 00:29:47,160
Speaker 1: in the situation where you can rally the vast majority

538
00:29:47,240 --> 00:29:50,840
Speaker 1: of Americans. Right now, Trump's approval rating is running between

539
00:29:50,880 --> 00:29:53,600
Speaker 1: as low as thirty five percent recently and galloped to

540
00:29:53,720 --> 00:29:57,200
Speaker 1: forty percent. So I don't think you should underestimate the

541
00:29:57,280 --> 00:30:02,240
Speaker 1: power of opposing Trump. Second, I think what Democrats should do,

542
00:30:02,520 --> 00:30:04,880
Speaker 1: and I have a hunt she'll see it is that

543
00:30:05,120 --> 00:30:09,960
Speaker 1: they need to oppose what Trump is putting forward when

544
00:30:10,000 --> 00:30:12,040
Speaker 1: it is not in line with what they want, which

545
00:30:12,080 --> 00:30:15,040
Speaker 1: is in most cases, Uh, it is not in line

546
00:30:15,040 --> 00:30:17,720
Speaker 1: with what they want. Um. But they should be putting

547
00:30:17,720 --> 00:30:22,120
Speaker 1: out proposals on infrastructure, on how they would fix Obamacare

548
00:30:22,200 --> 00:30:25,160
Speaker 1: to make it work better, on what they would do

549
00:30:25,360 --> 00:30:29,080
Speaker 1: for working class voters, white and black, who were at

550
00:30:29,080 --> 00:30:31,719
Speaker 1: the center of the conversation of the last campaign. So

551
00:30:31,760 --> 00:30:34,360
Speaker 1: they should just say this is what we would do

552
00:30:34,800 --> 00:30:37,720
Speaker 1: if Trump wants to come to them. If Trump says,

553
00:30:37,880 --> 00:30:40,640
Speaker 1: g I can support some of this, then you have

554
00:30:40,720 --> 00:30:44,760
Speaker 1: a different political situation. Uh. In the meantime, I think

555
00:30:44,800 --> 00:30:47,440
Speaker 1: they should continue to say, we're not going to repeal

556
00:30:47,440 --> 00:30:49,920
Speaker 1: the Affordable Care Act. That's one of our great achievements.

557
00:30:49,960 --> 00:30:53,440
Speaker 1: We're gonna fight repeal of Wall Street Reform, that's another

558
00:30:53,800 --> 00:30:57,200
Speaker 1: significant achievement. Uh. And we're gonna fight Trump where he

559
00:30:57,240 --> 00:31:00,440
Speaker 1: seems to be abusing his power, whether it's on conflicts

560
00:31:00,480 --> 00:31:03,800
Speaker 1: of interest or in seeming not to want this investigation

561
00:31:03,880 --> 00:31:07,280
Speaker 1: on the Russian connection to go forward. When you look

562
00:31:07,280 --> 00:31:10,240
Speaker 1: at how the Democrats performed during the last campaign, What

563
00:31:10,280 --> 00:31:12,560
Speaker 1: are the biggest deficits as you as you see them,

564
00:31:12,600 --> 00:31:16,120
Speaker 1: and how's the party learning from them? And further, how

565
00:31:16,160 --> 00:31:17,880
Speaker 1: deep is their bench when when you look at sort

566
00:31:17,880 --> 00:31:19,920
Speaker 1: of rising stars in the party, who are you looking at?

567
00:31:21,320 --> 00:31:24,200
Speaker 1: Um we in l selection. You know, I am one

568
00:31:24,240 --> 00:31:27,080
Speaker 1: of those who thinks that the Comy intervention tipped it.

569
00:31:27,120 --> 00:31:30,400
Speaker 1: Of course, it's easy to say when an election is

570
00:31:30,440 --> 00:31:34,040
Speaker 1: decided by seventy seven thousand votes in three states, Uh,

571
00:31:34,080 --> 00:31:36,800
Speaker 1: to say, almost anything you point to could decide. But

572
00:31:36,840 --> 00:31:40,600
Speaker 1: I think Comey mattered. Clearly the Clinton campaign should have

573
00:31:40,720 --> 00:31:44,680
Speaker 1: seen the problems uh in Michigan and Wisconsin coming. She

574
00:31:44,800 --> 00:31:48,920
Speaker 1: lost the primary in Wisconsin by a huge margin to

575
00:31:49,000 --> 00:31:53,240
Speaker 1: Bernie Sanders. She also, to her surprise, lost Michigan. Uh.

576
00:31:53,280 --> 00:31:55,680
Speaker 1: And I think they, you know, they just made a

577
00:31:56,160 --> 00:31:59,080
Speaker 1: you know, a tactical mistake. But I think the other

578
00:31:59,160 --> 00:32:01,880
Speaker 1: thing is what the Democrats need to do, and what

579
00:32:01,920 --> 00:32:05,680
Speaker 1: the Clinton campaign failed to do is to present a

580
00:32:05,800 --> 00:32:10,640
Speaker 1: sort of a compact message to working class voters who

581
00:32:10,680 --> 00:32:13,200
Speaker 1: were hurting in this economy. There are a lot of places,

582
00:32:13,240 --> 00:32:17,120
Speaker 1: including my dear hometown of Fall River, that have been

583
00:32:17,280 --> 00:32:23,000
Speaker 1: hammered by the industrialization. Clinton had a lot of specific proposals,

584
00:32:23,040 --> 00:32:26,640
Speaker 1: but she didn't focus on them enough. They counted on

585
00:32:27,000 --> 00:32:30,080
Speaker 1: Trump's disabilities to elect them. You know, in my view,

586
00:32:30,120 --> 00:32:32,840
Speaker 1: that should have been enough in principle, but in fact

587
00:32:32,960 --> 00:32:35,600
Speaker 1: voters wanted to hear what she was going to do

588
00:32:35,680 --> 00:32:38,560
Speaker 1: about these lingering problems in the economy. And I think

589
00:32:38,960 --> 00:32:42,160
Speaker 1: that's a place where the Democrats and everybody really have

590
00:32:42,280 --> 00:32:44,440
Speaker 1: to put a lot of attention. There was this study

591
00:32:44,480 --> 00:32:46,640
Speaker 1: that came out a couple of weeks ago from you know,

592
00:32:47,040 --> 00:32:51,480
Speaker 1: paper sponsored by Brookings, the Case of Deaton paper that

593
00:32:51,600 --> 00:32:56,320
Speaker 1: talked about despair, deaths of despair among working class people,

594
00:32:56,640 --> 00:33:01,800
Speaker 1: white working class and uh, this is a national crisis.

595
00:33:01,840 --> 00:33:05,080
Speaker 1: And I think similarly, the same forces that are hurting

596
00:33:05,080 --> 00:33:08,760
Speaker 1: towns like Fall River or Reading, Pennsylvania are hurting um

597
00:33:09,280 --> 00:33:12,320
Speaker 1: inner cities as well. And so I think, uh, they

598
00:33:12,360 --> 00:33:16,880
Speaker 1: need a message that crosses racial lines, but that talks

599
00:33:16,920 --> 00:33:20,840
Speaker 1: about those parts of the economy that aren't prospering. You know,

600
00:33:20,920 --> 00:33:24,360
Speaker 1: big cities. Many of our big cities are prospering. Many

601
00:33:24,400 --> 00:33:26,320
Speaker 1: parts of the country are, but there are parts that

602
00:33:26,360 --> 00:33:30,360
Speaker 1: have been left badly behind, and they deserve to be Madjon,

603
00:33:30,440 --> 00:33:32,680
Speaker 1: thank you so much, greatly appreciated with Brookings and of

604
00:33:32,680 --> 00:33:43,560
Speaker 1: course The Washington Post. Thanks for listening to the Bloomberg

605
00:33:43,560 --> 00:33:49,040
Speaker 1: Surveillance Podcast. Subscribe and listen to interviews on iTunes, SoundCloud,

606
00:33:49,480 --> 00:33:53,720
Speaker 1: or whichever podcast platform you prefer. I'm out on Twitter

607
00:33:53,800 --> 00:33:57,600
Speaker 1: at Tom Keene. David Gura is at David Gura. Before

608
00:33:57,640 --> 00:34:02,000
Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg Radio,

609
00:34:14,480 --> 00:34:18,000
Speaker 1: brought you by Bank of America Mary Lynch. Dedicated to

610
00:34:18,080 --> 00:34:22,000
Speaker 1: bringing our clients insights and solutions to meet the challenges

611
00:34:22,120 --> 00:34:25,839
Speaker 1: of a transforming world. That's the power of global connections.

612
00:34:26,200 --> 00:34:30,719
Speaker 1: Mary Lynch, Pierce, Fenner and Smith Incorporated, Member s I

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00:34:30,880 --> 00:34:31,160
Speaker 1: p C