1 00:00:05,160 --> 00:00:08,480 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 2 00:00:08,520 --> 00:00:12,319 Speaker 1: with Jonathan Farrell and Lisa Abramowitz. Join us each day 3 00:00:12,400 --> 00:00:16,840 Speaker 1: for insight from the best and economics, geopolitics, finance and investment. 4 00:00:17,280 --> 00:00:22,119 Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 5 00:00:22,320 --> 00:00:26,600 Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com, 6 00:00:26,640 --> 00:00:29,880 Speaker 1: the Bloomberg Terminal and the Bloomberg Business App. 7 00:00:29,960 --> 00:00:34,440 Speaker 2: It's Stuart Kaiser, City and Official. Welcome to the program. Listen, 8 00:00:34,560 --> 00:00:36,640 Speaker 2: thank you for the merch. We appreciate it. Let's just 9 00:00:36,640 --> 00:00:39,199 Speaker 2: start with your note that came out yesterday evening, and 10 00:00:39,240 --> 00:00:41,400 Speaker 2: just begin with the performance You went through Equal Wight 11 00:00:41,520 --> 00:00:43,559 Speaker 2: S and P the Nastac, the headline S and P 12 00:00:43,680 --> 00:00:46,720 Speaker 2: five hundred the Russell. What do all those different performance 13 00:00:46,720 --> 00:00:48,600 Speaker 2: figures over the last three months, towny, what's the over 14 00:00:48,920 --> 00:00:49,840 Speaker 2: overatching story? 15 00:00:50,280 --> 00:00:51,720 Speaker 3: I think I think it tells you people are just 16 00:00:51,760 --> 00:00:55,360 Speaker 3: pretty conservatively positioned. Frankly, it's it's large cap tech leadership, 17 00:00:55,400 --> 00:00:57,800 Speaker 3: high quality stocks, low risk stocks that are really driving 18 00:00:57,800 --> 00:01:00,560 Speaker 3: the market higher. And that just tells you, you know 19 00:01:00,600 --> 00:01:02,520 Speaker 3: that people, if they're going to be in equity markets, 20 00:01:02,840 --> 00:01:04,440 Speaker 3: need to have a reason to be So you need 21 00:01:04,480 --> 00:01:06,720 Speaker 3: a story or a theme or a high quality stock 22 00:01:06,800 --> 00:01:08,800 Speaker 3: that gets you out of a five percent cash yield 23 00:01:09,400 --> 00:01:11,440 Speaker 3: into an equity market that's been highly volatile. 24 00:01:11,520 --> 00:01:13,759 Speaker 1: I looked on a log SPX and I noticed three 25 00:01:13,760 --> 00:01:16,840 Speaker 1: moving averages I use have converged to two tenths of 26 00:01:16,840 --> 00:01:20,000 Speaker 1: a percent point two four percent of the s and 27 00:01:20,040 --> 00:01:23,680 Speaker 1: P five hundred. You call it home on the painful range. 28 00:01:24,080 --> 00:01:29,000 Speaker 1: What's the history to identify which way you go to 29 00:01:29,080 --> 00:01:31,000 Speaker 1: get out of a painful range? 30 00:01:31,360 --> 00:01:33,120 Speaker 3: I think I think it's a great question, Tom, especially 31 00:01:33,160 --> 00:01:35,039 Speaker 3: right now, because it does feel like we're sort of 32 00:01:35,080 --> 00:01:37,280 Speaker 3: bracketed in you know where we are right now. When 33 00:01:37,319 --> 00:01:38,800 Speaker 3: you when you get up to that sort of forty 34 00:01:38,840 --> 00:01:41,360 Speaker 3: two hundred range, you kind of run into evaluation friction 35 00:01:41,480 --> 00:01:43,600 Speaker 3: where people aren't you know, comfortable on the equities at 36 00:01:43,600 --> 00:01:46,040 Speaker 3: that level, particularly when they're clipping a five percent coupon 37 00:01:46,120 --> 00:01:49,640 Speaker 3: in cash. And to the downside, you know, we're we're 38 00:01:49,640 --> 00:01:52,360 Speaker 3: conservative positioned. As I mentioned, mutual funds are very low 39 00:01:52,400 --> 00:01:55,720 Speaker 3: beta and expectations are so low right now that is 40 00:01:55,800 --> 00:01:58,680 Speaker 3: kind of hard to surprise people, you know, to the downside. 41 00:01:58,720 --> 00:02:00,960 Speaker 3: So you know, in terms of taking out of this range, 42 00:02:01,000 --> 00:02:02,800 Speaker 3: I think you know, to the upside. It's going to 43 00:02:02,840 --> 00:02:05,200 Speaker 3: have to be positioning driven. You know, maybe people get 44 00:02:05,240 --> 00:02:07,040 Speaker 3: the follow the FED mentality and you get a bit 45 00:02:07,080 --> 00:02:09,359 Speaker 3: of a positioning you know, squeeze to the upside and 46 00:02:09,600 --> 00:02:11,640 Speaker 3: to the downside. Frankly, I think it's US growth and 47 00:02:11,680 --> 00:02:13,200 Speaker 3: it's the debt ceiling. You know, the debt ceiling is 48 00:02:13,240 --> 00:02:16,359 Speaker 3: more tactical and the US growth data. I think we 49 00:02:16,600 --> 00:02:19,360 Speaker 3: really need to fall apart in pretty aggressive fashion. But 50 00:02:19,400 --> 00:02:21,120 Speaker 3: I think that's what can break you out to the downside. 51 00:02:21,200 --> 00:02:21,880 Speaker 3: Right now, before we. 52 00:02:21,880 --> 00:02:23,800 Speaker 4: Get into some of those scenarios and the analysis that 53 00:02:23,840 --> 00:02:25,360 Speaker 4: comes with it, I want to just sit on this 54 00:02:25,520 --> 00:02:27,880 Speaker 4: range and you talk about how if you look at 55 00:02:27,880 --> 00:02:30,120 Speaker 4: one measure, it's the most painful range going back to 56 00:02:30,200 --> 00:02:32,480 Speaker 4: nineteen eighty or one of them. Can you talk about 57 00:02:32,520 --> 00:02:35,600 Speaker 4: what the incentive is for anyone to do anything other 58 00:02:35,680 --> 00:02:37,640 Speaker 4: than just sit in cash and get five percent if 59 00:02:37,680 --> 00:02:39,760 Speaker 4: you're not going to get rewarded and the likelihood of 60 00:02:39,800 --> 00:02:42,320 Speaker 4: getting you know, your face ripped off is pretty high. 61 00:02:42,360 --> 00:02:44,280 Speaker 3: Look, I think that's that's one of the big challenges, 62 00:02:44,360 --> 00:02:45,600 Speaker 3: right I mean, if you look at that. We did 63 00:02:45,600 --> 00:02:47,639 Speaker 3: a quick survey of our investors and two thirds of 64 00:02:47,680 --> 00:02:50,280 Speaker 3: people said they wouldn't put money into equity markets unless 65 00:02:50,280 --> 00:02:53,480 Speaker 3: they had ten percent ten percent or more potential upside, right, 66 00:02:53,520 --> 00:02:55,320 Speaker 3: So to get people in the market, you really need 67 00:02:55,360 --> 00:02:57,680 Speaker 3: to offer them something. And so I think, you know, 68 00:02:57,680 --> 00:03:00,280 Speaker 3: that's why we're run into this valuation limit around forty 69 00:03:00,320 --> 00:03:02,600 Speaker 3: two hundred, because you had ten percent to forty two hundred, 70 00:03:02,600 --> 00:03:04,160 Speaker 3: all of a sudden you're at forty six hundred, and 71 00:03:04,240 --> 00:03:06,640 Speaker 3: a lot of people aren't kind of comfortable with, you know, 72 00:03:06,720 --> 00:03:08,880 Speaker 3: with that type of upside level. So yet we're we're 73 00:03:08,919 --> 00:03:12,080 Speaker 3: kind of bouncing into a ceiling out of floor effectively. 74 00:03:12,120 --> 00:03:14,680 Speaker 3: And to Tom's point, it's really narrowed all of these technicals, 75 00:03:14,800 --> 00:03:16,800 Speaker 3: which you could argue creates kind of a you know, 76 00:03:16,840 --> 00:03:18,240 Speaker 3: a very uncomfortable moment from life. 77 00:03:18,240 --> 00:03:20,119 Speaker 4: If there is more stability in the bond market, which 78 00:03:20,120 --> 00:03:22,600 Speaker 4: we've seen, will that give the catalyst sort of the 79 00:03:22,639 --> 00:03:26,040 Speaker 4: ability for stocks to find some sort of direction that 80 00:03:26,120 --> 00:03:27,880 Speaker 4: has a little bit more conviction behind it. 81 00:03:28,240 --> 00:03:29,919 Speaker 3: Definitely, at least I think that's actually been a big 82 00:03:29,960 --> 00:03:31,960 Speaker 3: contributor this year. If you look at you know, bond 83 00:03:32,000 --> 00:03:35,320 Speaker 3: volatility and also the volatility of economic data itself, that 84 00:03:35,360 --> 00:03:37,480 Speaker 3: stuff has really started to narrow I think it's made 85 00:03:37,480 --> 00:03:40,120 Speaker 3: the market more investible. As I mentioned, it's hard to 86 00:03:40,120 --> 00:03:42,320 Speaker 3: surprise people. I mean, after what happened last year, it's 87 00:03:42,400 --> 00:03:44,320 Speaker 3: kind of hard to come out with something really surprising. 88 00:03:44,320 --> 00:03:47,200 Speaker 3: So yeah, I think bond volatility coming in a clearer path, 89 00:03:47,280 --> 00:03:49,600 Speaker 3: you know, to Fed funds and inflation gives people more 90 00:03:49,600 --> 00:03:51,960 Speaker 3: confidence to be in markets. But I think that's what 91 00:03:52,080 --> 00:03:54,320 Speaker 3: got us from thirty eight hundred forty two hundred. You 92 00:03:54,320 --> 00:03:55,840 Speaker 3: know what gets us that next step, I think is 93 00:03:55,840 --> 00:03:56,440 Speaker 3: the bigger question. 94 00:03:56,600 --> 00:03:59,800 Speaker 1: John John Stolfs just publishes at OpCo the same as Stuart, 95 00:04:00,240 --> 00:04:02,880 Speaker 1: are the same as Gold and Sacks. The idea once 96 00:04:02,920 --> 00:04:07,120 Speaker 1: again earnings of surprise people. Everybody had a gloom frame work. 97 00:04:07,240 --> 00:04:08,520 Speaker 1: Guess what. It didn't happen. 98 00:04:08,720 --> 00:04:10,880 Speaker 2: So what you mentioned the tactical cold around the debt 99 00:04:10,920 --> 00:04:13,880 Speaker 2: ceiling and then talked about the longer time horizon. Does 100 00:04:13,920 --> 00:04:16,960 Speaker 2: one inform the other? Does the debt ceiling negotiations ultimately 101 00:04:17,000 --> 00:04:18,720 Speaker 2: mean slower growth in our future? 102 00:04:19,720 --> 00:04:23,839 Speaker 3: I think only if it really disrupts financial markets from here. 103 00:04:23,880 --> 00:04:25,440 Speaker 3: I think, you know, I think, you know, if this 104 00:04:25,560 --> 00:04:28,520 Speaker 3: was something persistent that kind of impacted government spending and activity, 105 00:04:28,560 --> 00:04:31,200 Speaker 3: then yeah, I think that would increase your recession risks. 106 00:04:31,360 --> 00:04:32,920 Speaker 3: If this is more of a one to two week 107 00:04:33,040 --> 00:04:35,120 Speaker 3: just kind of choppy market scenario, I don't think it'll 108 00:04:35,120 --> 00:04:37,800 Speaker 3: have a huge impact on the growth outlook. I think 109 00:04:37,800 --> 00:04:40,320 Speaker 3: the big wildcard in the growth outlook is the credit channel. 110 00:04:40,520 --> 00:04:43,760 Speaker 3: You know, did we really disrupt lending or not? And 111 00:04:43,800 --> 00:04:45,560 Speaker 3: I think that's why people are a little bit sort 112 00:04:45,560 --> 00:04:47,960 Speaker 3: of on edge, particularly because the FED doesn't control the 113 00:04:48,000 --> 00:04:51,240 Speaker 3: lending channel, right, so that if that tightens meaningfully, it's 114 00:04:51,279 --> 00:04:53,040 Speaker 3: sort of outside of the fed's control and you could 115 00:04:53,040 --> 00:04:55,960 Speaker 3: actually get an overtightening that the FED didn't really want initially. 116 00:04:56,400 --> 00:05:01,560 Speaker 1: Can our radio and TV listeners sho and how should 117 00:05:01,560 --> 00:05:07,159 Speaker 1: they own shares of Apple Computer? How do you comfortably 118 00:05:07,279 --> 00:05:10,400 Speaker 1: own something that elevated that dominant. 119 00:05:10,600 --> 00:05:12,599 Speaker 3: I think that I think Apple, would you call it? 120 00:05:12,640 --> 00:05:14,440 Speaker 3: The big sort of five to ten stocks in the 121 00:05:14,440 --> 00:05:16,520 Speaker 3: market are giving people a lot of angst just for 122 00:05:16,560 --> 00:05:18,440 Speaker 3: that reason. I mean, if you're in Apple right now, 123 00:05:18,480 --> 00:05:20,080 Speaker 3: I think it's a because you love the products and 124 00:05:20,160 --> 00:05:22,520 Speaker 3: be because they probably have negative net debt on balance 125 00:05:22,520 --> 00:05:25,080 Speaker 3: sheet and relatively strong earnings growth. So I think if 126 00:05:25,080 --> 00:05:28,599 Speaker 3: you're in those stocks, it's because it's something you're comfortable owning. Now, 127 00:05:28,720 --> 00:05:30,520 Speaker 3: if you look at your to date, we've seen basically 128 00:05:30,560 --> 00:05:34,599 Speaker 3: inflow into three sectors, healthcare, industrials, and tech. And I 129 00:05:34,600 --> 00:05:36,960 Speaker 3: think you would argue both industrials and tech have really 130 00:05:37,040 --> 00:05:40,320 Speaker 3: strong kind of investment thematics behind them that people are 131 00:05:40,400 --> 00:05:43,560 Speaker 3: like comfortable owning just despite recessionary risks. 132 00:05:43,640 --> 00:05:43,800 Speaker 1: Yeah. 133 00:05:43,800 --> 00:05:45,480 Speaker 3: I think if you're an Apple, it's because you believe 134 00:05:45,480 --> 00:05:47,160 Speaker 3: in kind of the medium to long term trend of 135 00:05:47,200 --> 00:05:49,799 Speaker 3: the stock and in the near term you're comfortable based 136 00:05:49,839 --> 00:05:51,279 Speaker 3: on you know, kind of the size and quality. 137 00:05:51,279 --> 00:05:53,359 Speaker 1: And how do you adapt to the zeitgeist which shows 138 00:05:53,360 --> 00:05:56,240 Speaker 1: everybody's scared stiff any number of different you know the 139 00:05:56,279 --> 00:05:59,039 Speaker 1: metrics better than me, but the answer is everybody's scared stiff. 140 00:05:59,040 --> 00:05:59,839 Speaker 1: How do you adapt to that? 141 00:06:00,400 --> 00:06:03,040 Speaker 3: Well, I think I think the scared stiff is why, 142 00:06:03,240 --> 00:06:05,840 Speaker 3: you know, cash positions are high, It's why mutual fundatas 143 00:06:05,839 --> 00:06:07,760 Speaker 3: are low. So I think, to me, what that's actually 144 00:06:07,760 --> 00:06:10,000 Speaker 3: done is it's raised the floor to the market a 145 00:06:10,040 --> 00:06:13,839 Speaker 3: little bit because there's not much left to sell. But yeah, 146 00:06:13,880 --> 00:06:15,479 Speaker 3: I mean, this is the big question is how do 147 00:06:15,520 --> 00:06:18,000 Speaker 3: you tempt people out of, to your point, high yield 148 00:06:18,040 --> 00:06:20,440 Speaker 3: bond market, you know, higher yielding, you know, cash markets 149 00:06:20,480 --> 00:06:22,719 Speaker 3: into equity markets, and I think the answer there is 150 00:06:22,760 --> 00:06:24,880 Speaker 3: you need to have a single stock story, you need 151 00:06:24,920 --> 00:06:27,440 Speaker 3: to have like a macro thematic like the Inflation Reduction 152 00:06:27,520 --> 00:06:30,400 Speaker 3: Act creating a huge amount of spending, or you need 153 00:06:30,440 --> 00:06:33,279 Speaker 3: the FED to stop and to get this kind of 154 00:06:33,360 --> 00:06:36,279 Speaker 3: FOMO follow the FED rally. That's not our base case 155 00:06:36,360 --> 00:06:39,359 Speaker 3: nor something we necessarily endorse, but it's certainly something that 156 00:06:39,360 --> 00:06:40,760 Speaker 3: I think people are teeing themselves up for. 157 00:06:40,800 --> 00:06:43,120 Speaker 2: You'll put in the credit channel is so important. We 158 00:06:43,160 --> 00:06:45,400 Speaker 2: either find out the fed'sre over tightened or under tightened 159 00:06:45,640 --> 00:06:47,920 Speaker 2: based on what develops that. Damn't we Is it that simple? 160 00:06:48,560 --> 00:06:48,919 Speaker 1: I think so. 161 00:06:48,960 --> 00:06:51,120 Speaker 3: I mean what we've said, everybody's saying, oh, this is 162 00:06:51,120 --> 00:06:52,560 Speaker 3: great news. The market is going to do some of 163 00:06:52,560 --> 00:06:55,359 Speaker 3: the tightening for the FED. We actually kind of disagree 164 00:06:55,400 --> 00:06:57,159 Speaker 3: with that. I think if you thought the FED needed 165 00:06:57,160 --> 00:06:59,440 Speaker 3: to do ten units of tightening and now they're going 166 00:06:59,480 --> 00:07:02,080 Speaker 3: to do eight outsourced two to the market, well, they 167 00:07:02,120 --> 00:07:04,760 Speaker 3: don't control that too, right, That too could be zero, 168 00:07:04,800 --> 00:07:07,239 Speaker 3: it could be six. So from our perspective, it actually 169 00:07:07,320 --> 00:07:10,000 Speaker 3: adds more uncertainty to the growth outlook that you're quote 170 00:07:10,040 --> 00:07:12,560 Speaker 3: unquote allowing the market and getting help from the market 171 00:07:12,560 --> 00:07:14,120 Speaker 3: to do the tightening. So I actually think what that's 172 00:07:14,120 --> 00:07:16,560 Speaker 3: done is it's helped the raid aspect of it, but 173 00:07:16,600 --> 00:07:18,920 Speaker 3: it's actually added more uncertainty to the growth aspect in 174 00:07:18,960 --> 00:07:19,360 Speaker 3: my opinion. 175 00:07:19,560 --> 00:07:22,120 Speaker 2: Seth commenter and Morgan Stanley said a similar thing. He said, 176 00:07:22,120 --> 00:07:24,239 Speaker 2: the calibration of all of this gets so much harder 177 00:07:24,520 --> 00:07:26,560 Speaker 2: when you outsource it to the credit channel in the 178 00:07:26,600 --> 00:07:28,000 Speaker 2: way that it has been done because of the banking 179 00:07:28,040 --> 00:07:30,120 Speaker 2: stress in the last couple of months. Show this was fun, 180 00:07:30,200 --> 00:07:37,040 Speaker 2: this was great, Let's do it again. Sea fours Lindsay 181 00:07:37,040 --> 00:07:39,680 Speaker 2: Pax wanking on the Fed's path forward, saying this tom 182 00:07:39,920 --> 00:07:42,240 Speaker 2: the Committee has indicated a willingness to move to the 183 00:07:42,280 --> 00:07:45,600 Speaker 2: sidelines in June, and still may do so. However, the 184 00:07:45,680 --> 00:07:48,760 Speaker 2: latest price data does not make the case for the FED. Rather, 185 00:07:48,880 --> 00:07:52,000 Speaker 2: any decision to pause would be made in spite of 186 00:07:52,040 --> 00:07:55,040 Speaker 2: the latest still elevated inflation data. 187 00:07:55,240 --> 00:07:56,920 Speaker 1: Still elevated. It came in a little bit and the 188 00:07:57,000 --> 00:07:59,480 Speaker 1: vectors are in the right direction. But yeah, still elevated. 189 00:07:59,520 --> 00:08:02,840 Speaker 1: Is abs at where we are, Lindsay Paxit joins us 190 00:08:02,880 --> 00:08:06,520 Speaker 1: now chief economist is Stiffel Lindsay, just simple, I'm exhausted 191 00:08:06,560 --> 00:08:08,840 Speaker 1: by it on a boring Monday in May where we're 192 00:08:08,840 --> 00:08:11,840 Speaker 1: trying to sort out eight, nine, ten different threads. How 193 00:08:11,880 --> 00:08:13,120 Speaker 1: close are we to recession? 194 00:08:14,640 --> 00:08:16,840 Speaker 5: I think the feed has done a very good job 195 00:08:16,960 --> 00:08:20,600 Speaker 5: of continuing to support the economy while raising rates and 196 00:08:20,640 --> 00:08:24,120 Speaker 5: trying to tame inflation. And so this delicate balance has 197 00:08:24,160 --> 00:08:27,840 Speaker 5: allowed I think the consumer to continue to stay afloat, 198 00:08:27,840 --> 00:08:30,440 Speaker 5: which pushes out our recession call to the end of 199 00:08:30,520 --> 00:08:33,360 Speaker 5: the year. Now, we do expect a downturn, but that 200 00:08:33,520 --> 00:08:37,079 Speaker 5: being said, with the resilience of the consumer, Q two 201 00:08:37,200 --> 00:08:40,679 Speaker 5: GDP could actually surprise to the upside, leading the first 202 00:08:40,679 --> 00:08:44,480 Speaker 5: half of the year well above earlier expectations, much more 203 00:08:44,600 --> 00:08:47,920 Speaker 5: robust than expected off setting even if we do see 204 00:08:47,960 --> 00:08:50,560 Speaker 5: some of that downturn then in the second second half 205 00:08:50,600 --> 00:08:51,000 Speaker 5: of the year. 206 00:08:51,200 --> 00:08:55,239 Speaker 1: So if we get a two point x percent economy, fine, 207 00:08:55,840 --> 00:08:58,160 Speaker 1: how much of it is how much of America is 208 00:08:58,320 --> 00:09:01,959 Speaker 1: advantaged by that? And how much of America is really 209 00:09:02,000 --> 00:09:04,840 Speaker 1: struggling right now? Because I got all sorts of studies 210 00:09:04,840 --> 00:09:07,320 Speaker 1: from Bloomberg and others to say there's a lot of 211 00:09:07,360 --> 00:09:11,760 Speaker 1: people out there struggling, including bankruptcy levels. How narrow is 212 00:09:11,800 --> 00:09:12,760 Speaker 1: this prosperity? 213 00:09:13,640 --> 00:09:15,880 Speaker 5: I think it is pretty narrow because when we isolate 214 00:09:16,000 --> 00:09:18,280 Speaker 5: the consumer and look at how the consumer is spending, 215 00:09:18,600 --> 00:09:21,440 Speaker 5: much of the factors that are supporting this still positive, 216 00:09:21,520 --> 00:09:26,199 Speaker 5: albeit significantly reduced level of expenditures are very temporary factors. 217 00:09:26,480 --> 00:09:29,920 Speaker 5: It's because consumers are increasingly willing to draw down savings, 218 00:09:30,200 --> 00:09:33,080 Speaker 5: because they're still relying on that last sputtering of state 219 00:09:33,120 --> 00:09:37,040 Speaker 5: and local stimulus, because they're increasingly turning to credit card 220 00:09:37,080 --> 00:09:40,600 Speaker 5: debt to supplement their spending. So it's very clear that 221 00:09:40,600 --> 00:09:44,960 Speaker 5: the consumer is on fragile footing, but they're proving resilient, 222 00:09:45,040 --> 00:09:49,120 Speaker 5: at least temporarily. And because of that resilience, businesses that 223 00:09:49,160 --> 00:09:52,559 Speaker 5: were arguably overly optimistic in the first quarter are going 224 00:09:52,600 --> 00:09:55,720 Speaker 5: to have to reverse course and increase production in Q two, 225 00:09:56,160 --> 00:09:59,560 Speaker 5: significantly contributing to top line growth. Or if they don't 226 00:10:00,080 --> 00:10:03,160 Speaker 5: and we see a growing disconnect between demand and supply, 227 00:10:03,760 --> 00:10:06,679 Speaker 5: that will slow the level of disinflation that we've seen 228 00:10:06,720 --> 00:10:10,120 Speaker 5: in this economy thus far. In either case, this puts 229 00:10:10,160 --> 00:10:13,200 Speaker 5: pressure on the FED to continue raising rates. 230 00:10:13,360 --> 00:10:16,240 Speaker 4: Why is it bad, lindsay, to see a slower disinflation 231 00:10:16,679 --> 00:10:19,680 Speaker 4: and strong growth If that disinflation gets us back to 232 00:10:19,760 --> 00:10:21,720 Speaker 4: that two percent level, well. 233 00:10:21,600 --> 00:10:23,599 Speaker 5: It's not, but it's predicated on the second part of 234 00:10:23,640 --> 00:10:25,800 Speaker 5: your argument, if it gets us back to that two 235 00:10:25,880 --> 00:10:29,160 Speaker 5: percent level. The problem is the level of momentum. That 236 00:10:29,240 --> 00:10:34,240 Speaker 5: disinflation momentum is very very minimal, well under what the 237 00:10:34,280 --> 00:10:37,440 Speaker 5: FED had anticipated at this point in the cycle. And 238 00:10:37,559 --> 00:10:40,520 Speaker 5: if in fact the FED stops or moves to the 239 00:10:40,559 --> 00:10:44,200 Speaker 5: sideline and allows inflation expectations to pick up, as we 240 00:10:44,240 --> 00:10:47,960 Speaker 5: saw in the latest umished survey, that could reverse some 241 00:10:48,040 --> 00:10:51,320 Speaker 5: of this improvement. And so the pace of disinflation is 242 00:10:51,360 --> 00:10:54,840 Speaker 5: not necessarily quite as important as the market buying into 243 00:10:54,840 --> 00:10:58,640 Speaker 5: the Fed's resolved to continue along the pathway, so though, 244 00:10:58,760 --> 00:11:01,560 Speaker 5: as so that that level of disay inflation leads us 245 00:11:01,600 --> 00:11:02,720 Speaker 5: back to two percent target. 246 00:11:02,960 --> 00:11:04,880 Speaker 4: Lindsay I was really struck by a lot of the 247 00:11:04,920 --> 00:11:06,760 Speaker 4: retailers reports, not the ones that we're going to get 248 00:11:06,760 --> 00:11:08,880 Speaker 4: this week, obviously, but the ones that have already reported, 249 00:11:08,960 --> 00:11:12,080 Speaker 4: and how much of the price increase they're passing along 250 00:11:12,120 --> 00:11:16,640 Speaker 4: to consumers. They're actually increasing their profits, the profit margins 251 00:11:16,640 --> 00:11:18,360 Speaker 4: for the first time at about a year and a half. 252 00:11:18,480 --> 00:11:20,120 Speaker 4: If you take a look at what's reported so far 253 00:11:20,160 --> 00:11:23,160 Speaker 4: in the S and P. Five hundred, does this seem sustainable? 254 00:11:23,160 --> 00:11:25,800 Speaker 4: To you that basically consumers are not pushing back and 255 00:11:25,880 --> 00:11:28,640 Speaker 4: that pricing power is so extreme for some of these 256 00:11:28,720 --> 00:11:31,520 Speaker 4: companies that they can keep just jacking prices up even 257 00:11:31,640 --> 00:11:33,600 Speaker 4: well beyond what their production costs are. 258 00:11:34,559 --> 00:11:36,560 Speaker 5: Well, it's interesting because when we look at the producer 259 00:11:36,600 --> 00:11:39,920 Speaker 5: price increases, we see that costs, yes, of materials, inputs 260 00:11:39,920 --> 00:11:43,040 Speaker 5: are still going up, but to your point, businesses are 261 00:11:43,040 --> 00:11:47,040 Speaker 5: passing on that and more to consumers. Now again, consumers 262 00:11:47,080 --> 00:11:49,760 Speaker 5: are proving resilient. They are able to tap into some 263 00:11:49,920 --> 00:11:54,120 Speaker 5: stored wealth, allowing businesses to pass on that cost increase. 264 00:11:54,440 --> 00:11:57,199 Speaker 5: And if you look at the surveys, consumers are increasingly 265 00:11:57,520 --> 00:12:01,640 Speaker 5: willing and accepting of that level of inflation. But going forward, 266 00:12:01,640 --> 00:12:03,679 Speaker 5: it is all going to come down to that stockpile 267 00:12:03,720 --> 00:12:06,400 Speaker 5: of wealth and the ability for the consumer to make 268 00:12:06,480 --> 00:12:10,080 Speaker 5: purchases in the marketplace. At some point, those savings that 269 00:12:10,160 --> 00:12:13,320 Speaker 5: wealth runs out and businesses won't be able to pass 270 00:12:13,320 --> 00:12:16,959 Speaker 5: on that cost increase without a significant loss of market share. 271 00:12:17,080 --> 00:12:19,800 Speaker 1: So translate that into retail sales tomorrow. Take it right 272 00:12:19,840 --> 00:12:22,480 Speaker 1: down to the acuity of what we're going to see 273 00:12:22,480 --> 00:12:23,720 Speaker 1: tomorrow on retail sales. 274 00:12:24,200 --> 00:12:26,160 Speaker 5: Well, when we look at this on a monthly basis. 275 00:12:26,200 --> 00:12:29,480 Speaker 5: What we've seen is that consumer spending is increasingly volatile. 276 00:12:29,760 --> 00:12:33,400 Speaker 5: Consumers are dramatically shifting the goods and services in their basket, 277 00:12:33,800 --> 00:12:37,000 Speaker 5: something that they do when they're increasingly concerned about their 278 00:12:37,040 --> 00:12:40,320 Speaker 5: financial footing, and so we do expect that volatility to 279 00:12:40,720 --> 00:12:44,040 Speaker 5: be maintained going forward. Albeit for this week's report, we 280 00:12:44,080 --> 00:12:47,720 Speaker 5: do expect an uptick of a positive monthly increase. But again, 281 00:12:47,800 --> 00:12:51,000 Speaker 5: looking at this on a year over year basis, excuse me, 282 00:12:51,320 --> 00:12:54,600 Speaker 5: we have seen a significant loss of momentum from double 283 00:12:54,640 --> 00:12:57,720 Speaker 5: digit growth in the aftermath of the pandemic now down 284 00:12:57,760 --> 00:13:01,160 Speaker 5: to a very minimal but welcomed two level. 285 00:13:01,360 --> 00:13:04,720 Speaker 1: So finally, lindsay, what's your run rate on real GDP 286 00:13:04,840 --> 00:13:07,959 Speaker 1: and nominal GDP sort of through the summer and into autumn? 287 00:13:08,240 --> 00:13:11,320 Speaker 1: Are you running a two percent statistic, maybe a five 288 00:13:11,360 --> 00:13:12,680 Speaker 1: percent nominal GDP? 289 00:13:13,400 --> 00:13:15,720 Speaker 5: I think Q two we absolutely could get a two 290 00:13:15,720 --> 00:13:18,760 Speaker 5: handle again if we see a rebuilding of those inventories, 291 00:13:18,840 --> 00:13:22,480 Speaker 5: businesses stepping back up their production in response to the 292 00:13:22,520 --> 00:13:25,960 Speaker 5: resilient consumer. It's very realistic to see a two handle 293 00:13:26,000 --> 00:13:28,520 Speaker 5: in Q two. However, as we move into the second 294 00:13:28,520 --> 00:13:31,400 Speaker 5: half of the year, that's where the FED tightening really 295 00:13:31,520 --> 00:13:34,760 Speaker 5: chokes off top line GDP and we could see a 296 00:13:34,800 --> 00:13:37,760 Speaker 5: sub one percent and perhaps the first negative print by 297 00:13:37,760 --> 00:13:38,400 Speaker 5: the end of the year. 298 00:13:38,520 --> 00:13:40,720 Speaker 2: And Lindsay, thank you for the client pund through the 299 00:13:40,720 --> 00:13:43,280 Speaker 2: rest of the sea. Lindsay, pxident a stay four. 300 00:13:52,880 --> 00:13:56,080 Speaker 1: Kirby, it's so successful United at Nework that they don't 301 00:13:56,080 --> 00:13:58,480 Speaker 1: have enough gates. So it's like Zurich. They got planes 302 00:13:58,800 --> 00:14:01,320 Speaker 1: way out. You could wave to Pennsylvania. 303 00:14:01,400 --> 00:14:03,079 Speaker 2: Get very upset when I land in Europe and you've 304 00:14:03,080 --> 00:14:05,240 Speaker 2: got to get the bus. You know, the bus, the bus, 305 00:14:05,360 --> 00:14:09,760 Speaker 2: the bus busting. Trust me, not's. 306 00:14:08,160 --> 00:14:14,320 Speaker 1: Fallowness Oscar Mins. It's his faults, his fault. This on 307 00:14:14,480 --> 00:14:17,560 Speaker 1: set the former United Airlines CEO set the table for 308 00:14:17,679 --> 00:14:21,520 Speaker 1: mister Kirby, author of Turnaround Time, United an airline and 309 00:14:21,520 --> 00:14:25,640 Speaker 1: its employees in the friendly and sometimes not so friendly skys. 310 00:14:25,680 --> 00:14:27,360 Speaker 1: Good morning, sir, Thank you so much for. 311 00:14:27,360 --> 00:14:28,920 Speaker 6: Job with that kind of leading boy. 312 00:14:29,760 --> 00:14:33,640 Speaker 1: Nobody's no life is you know, we talked. Jamie Diamond 313 00:14:33,680 --> 00:14:36,560 Speaker 1: was on the other day with Bloomberg and he had 314 00:14:36,560 --> 00:14:39,080 Speaker 1: a cancer scare. You lived, You lived in real time 315 00:14:39,240 --> 00:14:42,120 Speaker 1: a medical issue at United Airlines and many people say 316 00:14:42,120 --> 00:14:45,800 Speaker 1: you handled it better than anybody. First CEOs out there. 317 00:14:45,840 --> 00:14:49,960 Speaker 1: What was a lesson you learned after a horrific cardiac 318 00:14:50,000 --> 00:14:52,040 Speaker 1: event while you were on the tour duty? What'd you 319 00:14:52,120 --> 00:14:52,560 Speaker 1: learn there? 320 00:14:53,320 --> 00:14:53,600 Speaker 5: For me? 321 00:14:53,800 --> 00:14:55,560 Speaker 7: I learned since had only been on the job for 322 00:14:55,680 --> 00:14:57,280 Speaker 7: thirty seven days before that occurred. 323 00:14:57,760 --> 00:14:59,480 Speaker 6: But I had had chance to connect with all my 324 00:14:59,520 --> 00:15:01,240 Speaker 6: employees or many of them. 325 00:15:01,480 --> 00:15:04,040 Speaker 7: And the outpouring of affection and support was amazing, And 326 00:15:04,080 --> 00:15:07,480 Speaker 7: it just confirmed that the organization, the group, the employees 327 00:15:07,520 --> 00:15:09,920 Speaker 7: in that united family were ready for a set of 328 00:15:09,920 --> 00:15:12,240 Speaker 7: directions and guidance that would lead us back to where 329 00:15:12,240 --> 00:15:12,840 Speaker 7: we are today. 330 00:15:13,360 --> 00:15:17,760 Speaker 1: The airlines today have recovered. I believe they got a 331 00:15:17,800 --> 00:15:21,880 Speaker 1: massive bailout in the middle of the pandemic. Have they 332 00:15:22,040 --> 00:15:25,720 Speaker 1: paid back to the government, to the people that massive bailout? 333 00:15:26,000 --> 00:15:28,320 Speaker 6: So if I could take just little contention with the 334 00:15:28,400 --> 00:15:29,720 Speaker 6: term bailout. 335 00:15:29,760 --> 00:15:31,640 Speaker 1: It's Monday, it's a slow news day. I'm trying to 336 00:15:31,640 --> 00:15:32,040 Speaker 1: get it going. 337 00:15:32,640 --> 00:15:34,920 Speaker 7: No, I was not a valid The airline industry was 338 00:15:34,960 --> 00:15:37,280 Speaker 7: in its the best state ever, I think, in its history, 339 00:15:37,480 --> 00:15:42,000 Speaker 7: and we had our revenue dropped ninety three percent, So 340 00:15:42,120 --> 00:15:45,000 Speaker 7: it was a significant issue to keep the airline working 341 00:15:45,040 --> 00:15:47,280 Speaker 7: and going to the economy good return is where we 342 00:15:47,280 --> 00:15:50,480 Speaker 7: did get loans and the loans are being repaid over 343 00:15:50,520 --> 00:15:52,560 Speaker 7: a five or six year period, and in that interim 344 00:15:52,600 --> 00:15:55,160 Speaker 7: period you're not allowed to do repurchases. You're not allowed 345 00:15:55,160 --> 00:15:58,480 Speaker 7: to increase comp of your senior executive. So still working through. 346 00:15:58,280 --> 00:16:00,800 Speaker 2: It did plenty of repurchases going into the mess, though, 347 00:16:00,920 --> 00:16:03,600 Speaker 2: of course much of that mess unforeseen. There has been 348 00:16:03,600 --> 00:16:06,000 Speaker 2: some public pushback about whether you should have received any 349 00:16:06,040 --> 00:16:09,600 Speaker 2: government loans whatsoever based on that. Do you think we 350 00:16:09,640 --> 00:16:12,600 Speaker 2: are in a position now where shareholders of United get 351 00:16:12,640 --> 00:16:15,000 Speaker 2: to own the upside and perhaps you can't talk directly 352 00:16:15,000 --> 00:16:18,520 Speaker 2: about the company, but shareholders of the industry group get 353 00:16:18,600 --> 00:16:21,880 Speaker 2: to own the upside, and perhaps the government doesn't in 354 00:16:21,960 --> 00:16:22,720 Speaker 2: quite the same way. 355 00:16:23,440 --> 00:16:29,640 Speaker 7: Well, we negotiated fairly and and I think everyone is 356 00:16:29,640 --> 00:16:31,320 Speaker 7: going to come out okay at the end of this. 357 00:16:31,400 --> 00:16:34,760 Speaker 7: I don't think there's anybody that's going to be unfairly advantaged, 358 00:16:35,000 --> 00:16:37,720 Speaker 7: at least from our perspective. The airline has taken a 359 00:16:37,720 --> 00:16:39,920 Speaker 7: lot of a lot of its tolls. We'll appreciate the 360 00:16:40,920 --> 00:16:43,160 Speaker 7: funds from the US government came in a very perfect time, 361 00:16:43,360 --> 00:16:46,480 Speaker 7: but it was not free. Steve Manuchin was a a 362 00:16:46,560 --> 00:16:50,520 Speaker 7: sec A finance er, was there, and we had some 363 00:16:50,600 --> 00:16:53,320 Speaker 7: really good conversations in details about what it would look 364 00:16:53,360 --> 00:16:55,280 Speaker 7: like four or five years later and whether or not 365 00:16:55,320 --> 00:16:56,320 Speaker 7: it would indeed be fair. 366 00:16:56,640 --> 00:16:57,440 Speaker 6: So I would say no. 367 00:16:58,200 --> 00:17:00,320 Speaker 4: Meanwhile, when you talk about what it looks like, the 368 00:17:00,360 --> 00:17:03,120 Speaker 4: airline industry looks a little different now than it did 369 00:17:03,240 --> 00:17:05,560 Speaker 4: before the pandemic. And we were just talking about how 370 00:17:05,760 --> 00:17:07,800 Speaker 4: the front of the cab is off first class and 371 00:17:07,840 --> 00:17:10,040 Speaker 4: business class and then comfort Plus, and then there are 372 00:17:10,040 --> 00:17:11,520 Speaker 4: like three seats in the back that you can try 373 00:17:11,600 --> 00:17:14,040 Speaker 4: to get for some kind of high price that you 374 00:17:14,080 --> 00:17:16,800 Speaker 4: can jam your family into if you're in economy. Is 375 00:17:16,800 --> 00:17:17,840 Speaker 4: this the future of flying? 376 00:17:18,280 --> 00:17:21,280 Speaker 7: It is not, because it's not probably the best representation 377 00:17:21,520 --> 00:17:23,760 Speaker 7: of what we have today. Yeah, there are multiple classes 378 00:17:23,760 --> 00:17:25,880 Speaker 7: for different budgets, and you try to do as much 379 00:17:25,920 --> 00:17:28,600 Speaker 7: as you can. I think that United we've tried to 380 00:17:28,640 --> 00:17:30,240 Speaker 7: put a lot of amenities in the back so you're 381 00:17:30,280 --> 00:17:32,720 Speaker 7: not sitting in the back huddled, and there's plenty of 382 00:17:32,920 --> 00:17:36,879 Speaker 7: there's plenty of entertainment and such, and again, you know, 383 00:17:37,080 --> 00:17:41,320 Speaker 7: different budgets require different different seating arrangements, and as we've talked, 384 00:17:41,880 --> 00:17:44,440 Speaker 7: real estate and side an aircraft is very expensive. I 385 00:17:44,480 --> 00:17:46,600 Speaker 7: think in the book, I try to demystify some of 386 00:17:46,640 --> 00:17:49,520 Speaker 7: those things, sort of to build a bridge between the 387 00:17:49,600 --> 00:17:52,480 Speaker 7: chasm of understanding by the general flying public and how 388 00:17:52,480 --> 00:17:54,679 Speaker 7: we run a business. We really aren't in the business 389 00:17:54,720 --> 00:17:58,359 Speaker 7: of trying to make you uncomfortable late and all those things. 390 00:17:58,480 --> 00:18:00,480 Speaker 7: Really there's a ton of it for point to not 391 00:18:00,560 --> 00:18:01,000 Speaker 7: make it so. 392 00:18:01,280 --> 00:18:04,639 Speaker 4: And understood, And definitely you can sense that there is 393 00:18:04,680 --> 00:18:08,240 Speaker 4: this feeling though that there is no better example of 394 00:18:08,520 --> 00:18:10,960 Speaker 4: wealth and equality than flying, because you go and it's like, 395 00:18:11,000 --> 00:18:12,600 Speaker 4: if you pay enough, you can go first, and then 396 00:18:12,640 --> 00:18:14,680 Speaker 4: you get these extra things, and it's basically you've got 397 00:18:14,680 --> 00:18:16,200 Speaker 4: to walk past them to get to the back of 398 00:18:16,240 --> 00:18:18,479 Speaker 4: the cab to sit in your little seat. I'm just 399 00:18:18,560 --> 00:18:21,680 Speaker 4: wondering if that's going to be sort of even unsteroids, 400 00:18:21,680 --> 00:18:24,600 Speaker 4: because those are so much more profitable now and actually, 401 00:18:24,640 --> 00:18:28,480 Speaker 4: relatively speaking, the most profitable possibly ever, those seats in 402 00:18:28,480 --> 00:18:30,240 Speaker 4: the front of the cab rather than the back. 403 00:18:30,960 --> 00:18:34,000 Speaker 7: Well, I don't think we'reas most profitable ever. I think 404 00:18:34,320 --> 00:18:37,200 Speaker 7: right before the pandemic was the most profitable time in 405 00:18:37,280 --> 00:18:40,880 Speaker 7: airline history, and it was a nice array of the front, 406 00:18:41,119 --> 00:18:44,199 Speaker 7: first class product economy, economy pluss and of course the 407 00:18:44,200 --> 00:18:47,679 Speaker 7: basic economy at the end and through an increased flying 408 00:18:48,680 --> 00:18:51,080 Speaker 7: taking people from everywhere they wanted to go to where 409 00:18:51,080 --> 00:18:54,280 Speaker 7: they needed to go. That combination with volume demand and 410 00:18:54,320 --> 00:18:56,640 Speaker 7: a good level of supply and customer service was really 411 00:18:56,680 --> 00:18:59,119 Speaker 7: what was creating the revenue generation and the profits. But 412 00:18:59,320 --> 00:19:03,480 Speaker 7: againfits aren't the best in this industry and feels always volatile, 413 00:19:03,520 --> 00:19:05,919 Speaker 7: so the equities are always going to be affected by that. 414 00:19:05,960 --> 00:19:08,840 Speaker 1: Regard your parachuting to Pepperdine to do a victory lap, 415 00:19:09,080 --> 00:19:11,720 Speaker 1: and I want you to address right now something really emotional. 416 00:19:11,840 --> 00:19:14,240 Speaker 1: A lot of our listeners particularly say this is the 417 00:19:14,280 --> 00:19:16,560 Speaker 1: coughing side of the table. You're allowed to cough over here. 418 00:19:17,280 --> 00:19:20,439 Speaker 1: They don't cough over there. We cough over here. I 419 00:19:20,520 --> 00:19:24,400 Speaker 1: want you to talk about chairman and chief executive officer 420 00:19:24,720 --> 00:19:27,399 Speaker 1: like you're on the board at Salesforce with mister Benioff. 421 00:19:27,640 --> 00:19:31,679 Speaker 1: Benioff handles a number of duties as well. What's the 422 00:19:31,760 --> 00:19:35,440 Speaker 1: experience you have of the efficacy of a chairman's CEO 423 00:19:35,600 --> 00:19:36,440 Speaker 1: being one person? 424 00:19:37,320 --> 00:19:39,919 Speaker 7: You know, I think it depends on the company in 425 00:19:39,920 --> 00:19:43,600 Speaker 7: the industry. I've seen it work both ways. It's just fine, 426 00:19:44,160 --> 00:19:47,080 Speaker 7: And I don't know that there is a degree of 427 00:19:49,600 --> 00:19:52,679 Speaker 7: we tend to depending on our feeling for it, we 428 00:19:52,760 --> 00:19:55,160 Speaker 7: tend to lean one way or the other. Again, having 429 00:19:55,320 --> 00:19:59,080 Speaker 7: been both at one time and having been separate from 430 00:19:59,080 --> 00:20:02,280 Speaker 7: my perspective going forward, I think the separation makes sense 431 00:20:02,720 --> 00:20:05,800 Speaker 7: because governance and the things that we face as public 432 00:20:05,800 --> 00:20:08,200 Speaker 7: companies are pretty significant, and it's good to have sort 433 00:20:08,200 --> 00:20:09,680 Speaker 7: of a division of authority. 434 00:20:09,880 --> 00:20:12,160 Speaker 2: Can we talk about lessons and can we go back 435 00:20:12,200 --> 00:20:14,800 Speaker 2: to spring of twenty seventeen, and you obviously know where 436 00:20:14,800 --> 00:20:18,719 Speaker 2: I'm going that day that passenger was dragged off the plane, 437 00:20:19,160 --> 00:20:21,440 Speaker 2: how you responded to it at the time, oschool, When 438 00:20:21,440 --> 00:20:23,119 Speaker 2: you look back, what were the lessons learned for you 439 00:20:23,200 --> 00:20:26,480 Speaker 2: personally and for anyone that might find themselves in a 440 00:20:26,480 --> 00:20:28,320 Speaker 2: similar position in years to come. 441 00:20:28,640 --> 00:20:30,600 Speaker 7: Yeah, I think and I talk about it all the 442 00:20:30,600 --> 00:20:34,000 Speaker 7: time because it was a dark point and our tenure there, 443 00:20:34,600 --> 00:20:37,120 Speaker 7: I think probably the biggest lesson it's never too late 444 00:20:37,160 --> 00:20:39,760 Speaker 7: to do the right thing. I think our initial response, 445 00:20:39,840 --> 00:20:42,719 Speaker 7: my initial response for a lot of different reasons, mostly 446 00:20:42,720 --> 00:20:45,600 Speaker 7: that it wasn't United Airlines actually involved in any of 447 00:20:45,640 --> 00:20:47,840 Speaker 7: that you saw, but it was indeed our response, my 448 00:20:47,960 --> 00:20:49,200 Speaker 7: response that created the. 449 00:20:49,160 --> 00:20:50,679 Speaker 6: Issue, and it blew up. 450 00:20:50,720 --> 00:20:52,720 Speaker 7: And I think we're probably one of the first global 451 00:20:52,760 --> 00:20:55,920 Speaker 7: brands to have a viral social media issue, and we 452 00:20:56,040 --> 00:20:57,960 Speaker 7: tried to find someone else, but I think we may 453 00:20:57,960 --> 00:21:00,720 Speaker 7: be the ones. And then you know, going on TV 454 00:21:00,760 --> 00:21:03,640 Speaker 7: a couple of days later, and you know, taking them 455 00:21:03,640 --> 00:21:04,280 Speaker 7: on personally. 456 00:21:04,320 --> 00:21:06,919 Speaker 2: When did you realize what the right thing is? I 457 00:21:06,960 --> 00:21:08,520 Speaker 2: mean behindsight you and I could sit here now and 458 00:21:08,520 --> 00:21:10,000 Speaker 2: I could say this was the right thing, Oscar, Why 459 00:21:10,040 --> 00:21:12,200 Speaker 2: didn't you do it? When did you know we've got 460 00:21:12,200 --> 00:21:12,640 Speaker 2: this wrong? 461 00:21:12,800 --> 00:21:13,040 Speaker 6: Aman? 462 00:21:13,080 --> 00:21:14,880 Speaker 2: It's right? Course, pretty quickly. 463 00:21:14,720 --> 00:21:16,800 Speaker 7: The middle of the night before I went on National 464 00:21:16,840 --> 00:21:20,000 Speaker 7: TV again in the Hut. In the book, I highlight 465 00:21:20,160 --> 00:21:22,720 Speaker 7: sort of my upbringing, my heritage, and all the things 466 00:21:22,720 --> 00:21:25,280 Speaker 7: that influence us are the formative years. We're all parts 467 00:21:25,320 --> 00:21:28,680 Speaker 7: of people we've met, as Tennyson says, And I think 468 00:21:28,720 --> 00:21:30,400 Speaker 7: in the middle of the night I sort of looked 469 00:21:30,480 --> 00:21:33,119 Speaker 7: upstairs for some guidance, and I felt the calms. I 470 00:21:33,200 --> 00:21:35,640 Speaker 7: knew I wasn't going to try to blame the Express 471 00:21:35,760 --> 00:21:38,679 Speaker 7: or somebody out the Express carrier or other Folks. 472 00:21:39,040 --> 00:21:42,159 Speaker 1: Tell me about International United Airlines now is in We 473 00:21:42,240 --> 00:21:44,520 Speaker 1: got three airports in New York. Folks, you own Newark, 474 00:21:44,560 --> 00:21:48,280 Speaker 1: I get that your box dot of JFK. Kirby's age 475 00:21:48,320 --> 00:21:50,960 Speaker 1: dealing with US as well. Is this the future of 476 00:21:51,000 --> 00:21:54,920 Speaker 1: America of United States airlines and that everybody's going to 477 00:21:54,960 --> 00:21:56,560 Speaker 1: be fighting for a shortage of gates. 478 00:21:57,800 --> 00:22:02,919 Speaker 7: Well, there are methods and procedures and policies that can 479 00:22:02,960 --> 00:22:05,840 Speaker 7: be implemented if we're all willing to do that, that 480 00:22:05,920 --> 00:22:10,400 Speaker 7: would not rectify, but certainly modify some of those issues. 481 00:22:10,800 --> 00:22:11,119 Speaker 1: Uh. 482 00:22:11,160 --> 00:22:13,720 Speaker 7: You know, a w R is not someplace we own 483 00:22:13,800 --> 00:22:16,560 Speaker 7: at United for It's one of the most difficult places 484 00:22:16,600 --> 00:22:18,560 Speaker 7: to operate, and you've seen big airlines come in and 485 00:22:18,600 --> 00:22:18,960 Speaker 7: out of there. 486 00:22:18,960 --> 00:22:19,479 Speaker 6: Because of that. 487 00:22:19,760 --> 00:22:22,439 Speaker 7: There's concept of slot control, there's plans oversight, and then 488 00:22:22,440 --> 00:22:24,120 Speaker 7: there's air traffic control and it's modern. 489 00:22:24,440 --> 00:22:26,439 Speaker 1: Would you just he needs more flights to Italy? Can 490 00:22:26,520 --> 00:22:27,399 Speaker 1: you talk to Kirby and. 491 00:22:27,400 --> 00:22:29,320 Speaker 2: Make that they flight right to night pots. 492 00:22:31,119 --> 00:22:34,840 Speaker 6: And we can go on international flights. 493 00:22:35,000 --> 00:22:39,240 Speaker 2: Very expensive thing, the F one race. 494 00:22:39,600 --> 00:22:41,320 Speaker 1: Cut your pepe. That's where it is. 495 00:22:43,640 --> 00:22:43,960 Speaker 2: Weekend. 496 00:22:51,880 --> 00:22:53,679 Speaker 1: We are going to focus now, and for those of 497 00:22:53,680 --> 00:22:57,199 Speaker 1: you internationally and national, this is coming to a city 498 00:22:57,240 --> 00:23:00,000 Speaker 1: near you. We're going to focus on New York City 499 00:23:00,119 --> 00:23:03,800 Speaker 1: in the five bureaus. Let me get your attention. There 500 00:23:03,800 --> 00:23:08,399 Speaker 1: are seven hundred and eighty nine bridges in New York City. 501 00:23:08,520 --> 00:23:10,440 Speaker 1: I can't believe I'm saying that, but that's the number. 502 00:23:10,480 --> 00:23:14,440 Speaker 1: There's twenty four movable bridges. Maybe there's four tunnels, y'all know. 503 00:23:14,520 --> 00:23:16,719 Speaker 1: Liebers with us right now. General, thank you so much 504 00:23:16,760 --> 00:23:19,520 Speaker 1: for joining us Chair chief executive Officer the MTA in 505 00:23:19,640 --> 00:23:22,280 Speaker 1: charge of all this headache. I'm just going to go 506 00:23:22,359 --> 00:23:25,600 Speaker 1: to one incident, and Lisa Bramwooz is going to bring 507 00:23:25,720 --> 00:23:30,160 Speaker 1: up others as well. I can't get up Madison Avenue anymore. 508 00:23:30,960 --> 00:23:33,000 Speaker 1: When does the congestion end? 509 00:23:34,600 --> 00:23:39,440 Speaker 8: Well, you know you said exactly right, Tom, congestion is 510 00:23:40,200 --> 00:23:43,199 Speaker 8: we got to do something about it. There's no choice. 511 00:23:43,320 --> 00:23:46,840 Speaker 8: We can't have ambulances, can't get to hospitals. Yeah, we 512 00:23:46,920 --> 00:23:49,800 Speaker 8: can't take times in progress. It's out of control. 513 00:23:49,960 --> 00:23:50,240 Speaker 1: Okay. 514 00:23:50,760 --> 00:23:53,680 Speaker 8: What New York is doing is we're leading the nation. 515 00:23:53,920 --> 00:23:56,320 Speaker 8: We're saying it's time to do something about it. We've 516 00:23:56,320 --> 00:23:59,760 Speaker 8: got a congestion pricing plan. It's been tried all over 517 00:23:59,840 --> 00:24:04,840 Speaker 8: the western world Stockholm, London, Singapore, and we're going to 518 00:24:04,880 --> 00:24:07,080 Speaker 8: put it into effect. We don't have a choice. It's 519 00:24:07,080 --> 00:24:09,960 Speaker 8: time to, you know, start doing aggressive action to deal 520 00:24:10,000 --> 00:24:12,480 Speaker 8: with congestion and also to save the planet. We all 521 00:24:12,480 --> 00:24:14,000 Speaker 8: know that's on the agenda general. 522 00:24:14,040 --> 00:24:16,080 Speaker 1: It's so important here and I really bring this up. 523 00:24:16,080 --> 00:24:18,439 Speaker 1: Folks living up near Mount Sign are the privilege of 524 00:24:18,440 --> 00:24:22,600 Speaker 1: living near Mount signa where the ambulances can't get to 525 00:24:22,640 --> 00:24:26,320 Speaker 1: the one hundred and first Street emergency room. Let's I 526 00:24:26,359 --> 00:24:29,040 Speaker 1: want to go to the rapidity of this. London fixed this. 527 00:24:29,600 --> 00:24:32,000 Speaker 1: Other cities have dealt with that. It's been a failure. 528 00:24:32,080 --> 00:24:35,800 Speaker 1: Saying in Mexico City or Manila, how fast can you 529 00:24:35,920 --> 00:24:39,439 Speaker 1: free up the congestion in this marvelous city. 530 00:24:40,760 --> 00:24:45,840 Speaker 8: It's a good question. We've got the federal approval almost 531 00:24:45,920 --> 00:24:48,879 Speaker 8: almost done. We've been at this for a couple of years. Now, Trump, 532 00:24:48,960 --> 00:24:53,160 Speaker 8: the Trump administration wouldn't let us deal with the environmental process. 533 00:24:53,200 --> 00:24:57,159 Speaker 8: The federal law requires. Biden administration let us get started 534 00:24:57,200 --> 00:25:00,280 Speaker 8: two years ago. We've hit the milestones. Now are going 535 00:25:00,320 --> 00:25:02,600 Speaker 8: to be implementing. We're literally going to start building out 536 00:25:02,600 --> 00:25:06,040 Speaker 8: the infrastructure, the cameras, the sensors, to do it all 537 00:25:06,400 --> 00:25:09,119 Speaker 8: in about a year and then Tom, you and I 538 00:25:09,160 --> 00:25:12,400 Speaker 8: will watch as it starts to take effect on congestion, 539 00:25:12,520 --> 00:25:13,760 Speaker 8: hopefully to open up the roads. 540 00:25:13,840 --> 00:25:16,520 Speaker 1: Lisa, my amateur taken on this, and I mean amateurs, 541 00:25:16,560 --> 00:25:19,160 Speaker 1: he said, the camera's word, and that's the word. Nobody 542 00:25:19,280 --> 00:25:23,159 Speaker 1: London is cameras driven. New York is not. That's my 543 00:25:23,359 --> 00:25:25,680 Speaker 1: guesstimate of how we begin to get there. 544 00:25:25,600 --> 00:25:27,840 Speaker 4: Jenna, how much is this really an effort to try 545 00:25:27,880 --> 00:25:30,400 Speaker 4: to bail out a subway system that has struggled through 546 00:25:30,400 --> 00:25:32,640 Speaker 4: a pandemic and really still is not seeing its ridership 547 00:25:32,680 --> 00:25:33,120 Speaker 4: come back. 548 00:25:33,920 --> 00:25:36,240 Speaker 8: Well, you know they are operating budget. We have like 549 00:25:36,320 --> 00:25:39,600 Speaker 8: an eighteen billion dollar operating budget, Lisa. We actually dealt 550 00:25:39,640 --> 00:25:44,280 Speaker 8: with that with the Governor's leadership in the current budget year. 551 00:25:44,320 --> 00:25:47,959 Speaker 8: We've actually dealt with it for a four year plan period. 552 00:25:48,040 --> 00:25:52,160 Speaker 8: So kudos to Governor Hockel and the New York State Legislature. 553 00:25:52,560 --> 00:25:55,960 Speaker 8: Unlike many other places, we know that mass transit is 554 00:25:56,280 --> 00:25:59,600 Speaker 8: the lifeblood of our city and our region, and it's 555 00:25:59,600 --> 00:26:02,400 Speaker 8: for New It's like air and water. We can't survive 556 00:26:02,440 --> 00:26:05,480 Speaker 8: without it. The governor and the state legislatures stepped up 557 00:26:05,840 --> 00:26:09,280 Speaker 8: the money from congestion pricing, by contrast, is going to 558 00:26:09,280 --> 00:26:12,600 Speaker 8: go to our capital budget, which allows us to maintain 559 00:26:12,760 --> 00:26:15,560 Speaker 8: this one hundred year old plus system. Stuff that's that 560 00:26:15,680 --> 00:26:18,439 Speaker 8: old wants to fall apart. You got to invest in 561 00:26:18,480 --> 00:26:21,760 Speaker 8: it like any business would it's a trillion dollar asset, 562 00:26:22,119 --> 00:26:24,720 Speaker 8: and we need the money to maintain it and to 563 00:26:24,800 --> 00:26:25,320 Speaker 8: improve it. 564 00:26:25,600 --> 00:26:29,800 Speaker 4: How is the infrastructure changing and the allocations of that budget, Jenne. 565 00:26:29,880 --> 00:26:32,360 Speaker 4: Given that writership hasn't come back to its pre pandemic 566 00:26:32,480 --> 00:26:35,240 Speaker 4: level just yet, there's a question about whether it will 567 00:26:35,320 --> 00:26:37,040 Speaker 4: in the same at least in the near future, as 568 00:26:37,040 --> 00:26:39,520 Speaker 4: a result of the work from home trends and the 569 00:26:39,640 --> 00:26:42,800 Speaker 4: emptying out in certain parts of the office space. How 570 00:26:42,800 --> 00:26:45,639 Speaker 4: do you allocate to a system that is the lifeblood 571 00:26:45,840 --> 00:26:47,800 Speaker 4: and is struggling with a lot of issues right now, 572 00:26:47,800 --> 00:26:51,120 Speaker 4: whether it's elevated crime, whether it's just the general kind 573 00:26:51,160 --> 00:26:53,640 Speaker 4: of build up of filth. I'm sorry, I'm a native 574 00:26:53,680 --> 00:26:55,800 Speaker 4: New Yorker, so this is something that I have seen 575 00:26:55,880 --> 00:26:58,440 Speaker 4: over the years. How much are you going to try 576 00:26:58,480 --> 00:26:59,600 Speaker 4: to remedy that? 577 00:27:00,520 --> 00:27:02,679 Speaker 8: Well, Listen, first of all, let's let's get straight on 578 00:27:02,720 --> 00:27:05,719 Speaker 8: the safety issue. A crime in the subway system is 579 00:27:05,800 --> 00:27:08,800 Speaker 8: down like ten percent since last year, and given the 580 00:27:08,880 --> 00:27:12,920 Speaker 8: rise and ridership over the same period, it's really down overall. 581 00:27:12,960 --> 00:27:16,959 Speaker 8: We're back where we were roughly before the pandemic began 582 00:27:17,200 --> 00:27:19,680 Speaker 8: in terms of the risk of being a victim of crime. 583 00:27:19,720 --> 00:27:22,240 Speaker 8: They're like, you know, five to eight crimes on the 584 00:27:22,280 --> 00:27:26,280 Speaker 8: subway system every day with a population four million right now, 585 00:27:26,440 --> 00:27:28,200 Speaker 8: that's the size of the city of Los Angeles. So 586 00:27:28,240 --> 00:27:30,960 Speaker 8: we're not ashamed of our safety record at all. It's 587 00:27:30,960 --> 00:27:34,560 Speaker 8: actually pretty good. But Lisa's question is on the money, 588 00:27:34,600 --> 00:27:38,680 Speaker 8: how do you get people back to normal life. Interestingly, 589 00:27:38,720 --> 00:27:41,000 Speaker 8: if you go apples to apples with pre COVID, we're 590 00:27:41,040 --> 00:27:44,800 Speaker 8: about close to eighty percent. Work from home is a factor. 591 00:27:44,840 --> 00:27:47,800 Speaker 8: It's what's you know, pushed us down in terms of ridership. 592 00:27:48,000 --> 00:27:50,960 Speaker 8: But there's so many people who use the subway system 593 00:27:51,160 --> 00:27:53,080 Speaker 8: to go to school, to go you know, to go 594 00:27:53,119 --> 00:27:56,320 Speaker 8: to medical appointments, just to live their lives. Same with 595 00:27:56,400 --> 00:27:59,280 Speaker 8: the bus system that we're on the move. We are 596 00:27:59,520 --> 00:28:02,879 Speaker 8: very much and rising and we've had four million rider 597 00:28:03,000 --> 00:28:05,280 Speaker 8: days again and again in the last couple of weeks. 598 00:28:05,320 --> 00:28:06,640 Speaker 8: It is headed in a good direction. 599 00:28:06,920 --> 00:28:09,360 Speaker 1: Jenno, this is a personal mission for me. I sit 600 00:28:09,440 --> 00:28:11,639 Speaker 1: on Fifth Avenue and it's a privilege to sit on 601 00:28:11,680 --> 00:28:14,720 Speaker 1: Fifth Avenue, and I count the number of people on 602 00:28:14,800 --> 00:28:18,280 Speaker 1: theer city buses. Sometimes they see four people, sometimes they 603 00:28:18,359 --> 00:28:21,640 Speaker 1: see twelve people, but many of those buses are empty. 604 00:28:22,520 --> 00:28:26,879 Speaker 1: How do we fund free bus riding so that the 605 00:28:26,920 --> 00:28:31,399 Speaker 1: bottom quintile people in New York City can service the 606 00:28:31,560 --> 00:28:35,480 Speaker 1: upper quintile. It's an outrage that we don't fix the 607 00:28:35,560 --> 00:28:39,800 Speaker 1: transportation system of the poorest people in New York City. 608 00:28:40,000 --> 00:28:40,800 Speaker 1: How do we do it? 609 00:28:41,680 --> 00:28:44,520 Speaker 8: And you know, Tom that the key is to have 610 00:28:44,680 --> 00:28:47,600 Speaker 8: transit remain affordable. I think you're right. I don't know 611 00:28:47,640 --> 00:28:51,240 Speaker 8: if free everything is the right answer, but transit is 612 00:28:51,280 --> 00:28:53,959 Speaker 8: one of the few things that makes New York City affordable. 613 00:28:54,040 --> 00:28:56,800 Speaker 8: It is literally like ten percent the cost of owning 614 00:28:56,840 --> 00:28:59,600 Speaker 8: an automobile. So we're really proud of that. It is 615 00:29:00,040 --> 00:29:02,880 Speaker 8: one of the things that allows us to support our 616 00:29:02,960 --> 00:29:05,920 Speaker 8: great you know, working in middle class New York community. 617 00:29:06,240 --> 00:29:08,840 Speaker 8: You know the buses in midtime that you're seeing a 618 00:29:08,880 --> 00:29:11,719 Speaker 8: lot of that is people can walk faster than they 619 00:29:11,760 --> 00:29:14,440 Speaker 8: can than the bus can go because of that congestion. 620 00:29:15,000 --> 00:29:17,760 Speaker 8: I'm convinced I grew up riding the bus. I'm convinced 621 00:29:17,800 --> 00:29:19,959 Speaker 8: people are going to come back when we pick up 622 00:29:19,960 --> 00:29:24,440 Speaker 8: the speed, congestion, pricing, bus lanes, bus camera enforcement are 623 00:29:24,480 --> 00:29:25,040 Speaker 8: going to do that. 624 00:29:25,120 --> 00:29:26,880 Speaker 1: What do you know about Lincoln Tunnel For those of 625 00:29:26,880 --> 00:29:30,640 Speaker 1: you internationally and worldwide, the tunnel system in New York 626 00:29:30,640 --> 00:29:34,360 Speaker 1: city is in an outrage some of the hours of 627 00:29:34,400 --> 00:29:38,000 Speaker 1: the day when I'm getting older watching this, General, when 628 00:29:38,760 --> 00:29:41,959 Speaker 1: do we get another tunnel to relieve the burden? What 629 00:29:42,000 --> 00:29:43,960 Speaker 1: can you do about it? What can the mayor do 630 00:29:44,040 --> 00:29:44,520 Speaker 1: about it? 631 00:29:45,360 --> 00:29:48,360 Speaker 8: You know, honestly, Tom, I don't want to disappoint you, 632 00:29:48,400 --> 00:29:53,600 Speaker 8: but I'm not here to advocate for expanding the access 633 00:29:53,600 --> 00:29:57,400 Speaker 8: of automobiles and trucks into our central business district. Every 634 00:29:57,400 --> 00:30:00,440 Speaker 8: time we build new capacity and that respect, it just 635 00:30:00,480 --> 00:30:02,640 Speaker 8: fills up. So what we have to do is to 636 00:30:02,680 --> 00:30:05,959 Speaker 8: build more and better mass transit. It's the way that 637 00:30:06,440 --> 00:30:09,480 Speaker 8: we can continue to grow our economy in the population 638 00:30:09,560 --> 00:30:13,520 Speaker 8: of our central business district, both workers and residents, without 639 00:30:13,720 --> 00:30:17,560 Speaker 8: environmental consequences. And that's where we're headed. We're making those 640 00:30:17,560 --> 00:30:18,240 Speaker 8: investments and. 641 00:30:18,320 --> 00:30:20,720 Speaker 1: Update and an experiment for all the cities of the world. 642 00:30:21,360 --> 00:30:35,320 Speaker 1: General levers with the MTA in New York City's saving 643 00:30:35,360 --> 00:30:39,640 Speaker 1: us as Greg Valuer, chief US policy strusses at AGF Investments, 644 00:30:39,640 --> 00:30:43,360 Speaker 1: who breeze us on Washington this morning. Greg, you and 645 00:30:43,440 --> 00:30:47,120 Speaker 1: I within the five six stories, and yes, doctor Brainer 646 00:30:47,240 --> 00:30:50,120 Speaker 1: talking there about the debt ceiling. You and I were 647 00:30:50,160 --> 00:30:54,760 Speaker 1: looking at Ukraine and maybe the most important week for 648 00:30:54,960 --> 00:30:59,560 Speaker 1: mister Putin since February of a year ago. Putin's fighting 649 00:30:59,640 --> 00:31:04,480 Speaker 1: is military. Putin is fighting the so called mercenaries assistant him, 650 00:31:04,840 --> 00:31:07,160 Speaker 1: and it's all happening in a battle which feels like 651 00:31:07,200 --> 00:31:09,440 Speaker 1: the Battle of the Bulgian World War II. 652 00:31:11,080 --> 00:31:15,280 Speaker 9: It's quite a story, Tom. This weekend Zelenski got assurances 653 00:31:15,320 --> 00:31:18,680 Speaker 9: of more military aid from Western Europe. As you say, 654 00:31:18,680 --> 00:31:22,520 Speaker 9: he's fighting with the Wagner mercenaries. But I think the 655 00:31:22,560 --> 00:31:26,640 Speaker 9: big story is back Mout, which is this horrible, bloody 656 00:31:26,760 --> 00:31:30,080 Speaker 9: fighting that's gone on for months. I think is now 657 00:31:30,160 --> 00:31:34,360 Speaker 9: leading to some advances by the Ukrainian forces. What struck 658 00:31:34,440 --> 00:31:38,720 Speaker 9: me over the weekend, Tom was film of Russian soldiers fleeing, 659 00:31:39,240 --> 00:31:43,160 Speaker 9: maybe like nineteen seventeen, nineteen eighteen when they fled Europe 660 00:31:43,160 --> 00:31:45,480 Speaker 9: at the end of World War One. If the Russian 661 00:31:45,520 --> 00:31:48,240 Speaker 9: troops are fleeing, that's a really dramatic story. 662 00:31:48,360 --> 00:31:51,560 Speaker 1: Bring it back to domestic politics here and that there 663 00:31:51,640 --> 00:31:55,840 Speaker 1: is a theme for Ukraine against Ukraine. Is that an 664 00:31:55,840 --> 00:31:59,240 Speaker 1: election issue or does that drift away towards November of 665 00:31:59,320 --> 00:32:00,600 Speaker 1: two thousand twenty four. 666 00:32:01,720 --> 00:32:04,680 Speaker 9: It's a long way away, obviously, But and Trump inflamed 667 00:32:04,680 --> 00:32:08,360 Speaker 9: things on many fronts in the CNN interview, but one 668 00:32:08,400 --> 00:32:11,200 Speaker 9: of the things Trump inflamed on was, of course, his 669 00:32:11,480 --> 00:32:14,120 Speaker 9: lack of support for a Ukraine I think that will 670 00:32:14,200 --> 00:32:18,440 Speaker 9: run into significant resistance among most Republicans. 671 00:32:19,040 --> 00:32:19,280 Speaker 5: Greg. 672 00:32:19,320 --> 00:32:20,920 Speaker 4: I just want to build on what you were talking about, 673 00:32:20,960 --> 00:32:22,960 Speaker 4: that this could be one of the most significant developments, 674 00:32:22,960 --> 00:32:25,680 Speaker 4: the most important stories out there. If Russian troops really 675 00:32:25,720 --> 00:32:28,120 Speaker 4: are pantiting ship. Do you feel like there has been 676 00:32:28,200 --> 00:32:31,720 Speaker 4: a material shift in this war where Ukraine is making 677 00:32:31,760 --> 00:32:34,000 Speaker 4: headaway that perhaps is underappreciated in the market. 678 00:32:34,920 --> 00:32:36,120 Speaker 1: Could be hard to say. 679 00:32:36,640 --> 00:32:38,920 Speaker 9: What's the old saying the first casualty of war is 680 00:32:38,960 --> 00:32:41,680 Speaker 9: the truth, so it's hard to say who's telling the truth. 681 00:32:41,960 --> 00:32:46,920 Speaker 9: But I do sense a dramatic drop of morale, not 682 00:32:47,040 --> 00:32:50,080 Speaker 9: just in the mercenaries from Wagner, but I think among 683 00:32:50,160 --> 00:32:51,360 Speaker 9: Russian troops in general. 684 00:32:51,480 --> 00:32:54,160 Speaker 4: We're going to be watching this really closely, especially given 685 00:32:54,320 --> 00:32:57,240 Speaker 4: the potential shift over in Turkey and what that means 686 00:32:57,280 --> 00:33:01,040 Speaker 4: for Ukraine's potential NATO membership. Back in the US, we 687 00:33:01,080 --> 00:33:02,840 Speaker 4: have been talking about the debt sealing limit, and I 688 00:33:02,880 --> 00:33:04,480 Speaker 4: know that people don't really want to talk about it 689 00:33:04,520 --> 00:33:06,840 Speaker 4: because there's not really a new angle on it. But 690 00:33:06,920 --> 00:33:08,920 Speaker 4: what do you make of this timeline that we have 691 00:33:08,960 --> 00:33:11,320 Speaker 4: where President Biden has to get something together before he 692 00:33:11,320 --> 00:33:14,320 Speaker 4: heads off to G seven and we're kind of shifting 693 00:33:14,400 --> 00:33:16,760 Speaker 4: forward the timeframe base and a lack of tax or 694 00:33:16,760 --> 00:33:18,280 Speaker 4: seats received by the US government. 695 00:33:19,120 --> 00:33:21,240 Speaker 9: Well, I tell you, Lisa, there's a risk of a 696 00:33:21,320 --> 00:33:24,719 Speaker 9: fake out here, of getting too optimistic. Everybody this morning 697 00:33:25,040 --> 00:33:27,240 Speaker 9: is saying they had a good weekend. I think there 698 00:33:27,320 --> 00:33:31,440 Speaker 9: is agreement on certain big concepts, like a cap on spending, 699 00:33:32,160 --> 00:33:35,600 Speaker 9: clawing back some money from COVID. That's encouraging to see, 700 00:33:35,720 --> 00:33:38,800 Speaker 9: but these are complicated issues that could take weeks to 701 00:33:38,920 --> 00:33:41,640 Speaker 9: fully resolve. So I think that there won't be a 702 00:33:41,680 --> 00:33:44,120 Speaker 9: deal on Tuesday. That's out of the question. Maybe a 703 00:33:44,160 --> 00:33:47,480 Speaker 9: comment that they're getting closer, but after Biden comes back 704 00:33:47,480 --> 00:33:50,000 Speaker 9: from aization trip, it could still take a few weeks 705 00:33:50,040 --> 00:33:53,200 Speaker 9: to iron out all the details. Therefore, I think they 706 00:33:53,240 --> 00:33:55,040 Speaker 9: have to have an extension. 707 00:33:54,840 --> 00:33:58,040 Speaker 1: Just as one example, Greg away from the public program, 708 00:33:58,160 --> 00:34:01,920 Speaker 1: social security and all that. Everybody's focused on. What does 709 00:34:01,960 --> 00:34:04,120 Speaker 1: all this ballet mean for the Pentagon. 710 00:34:05,840 --> 00:34:07,960 Speaker 9: I think they're still going to get an increase. You know, 711 00:34:08,000 --> 00:34:11,200 Speaker 9: they got almost ten percent and this new fiscal year 712 00:34:11,200 --> 00:34:14,319 Speaker 9: that started on October one. I don't think they're going 713 00:34:14,360 --> 00:34:16,880 Speaker 9: to get ten percent in the next year's budget. Maybe 714 00:34:17,000 --> 00:34:19,359 Speaker 9: five or six percent, but I don't see them getting 715 00:34:19,400 --> 00:34:21,640 Speaker 9: a big haircut. And one of the reasons, of course, 716 00:34:21,840 --> 00:34:25,400 Speaker 9: is Biden's desire to spend more money on Ukraine. 717 00:34:25,719 --> 00:34:28,560 Speaker 1: Well, it seems to be everybody's desire to spend it. 718 00:34:28,600 --> 00:34:31,600 Speaker 1: And yet there's this narrow part of I'm going to say, 719 00:34:31,600 --> 00:34:34,480 Speaker 1: a Republican party, maybe joined by the left as well, 720 00:34:34,920 --> 00:34:38,399 Speaker 1: that wants to be isolationist. I mean, we've been We've 721 00:34:38,400 --> 00:34:41,160 Speaker 1: dealt with this for our entire lives. Does it ever 722 00:34:41,200 --> 00:34:44,920 Speaker 1: get any traction in America? Witness through the Pentagon budget. 723 00:34:45,640 --> 00:34:48,360 Speaker 9: I think the center holes on this. You've got a 724 00:34:48,400 --> 00:34:52,160 Speaker 9: lot of Republicans, not just Lindsey Graham and Mitt Romney. 725 00:34:52,360 --> 00:34:54,279 Speaker 9: You've got a lot of Republicans who want to keep 726 00:34:54,320 --> 00:34:57,600 Speaker 9: up the defense spending, and with Joe Biden enough Democrats. 727 00:34:57,680 --> 00:35:00,080 Speaker 9: So I think the center holes on this. 728 00:35:00,400 --> 00:35:03,040 Speaker 2: And Greg, we're trying to work out whether spending cuts 729 00:35:03,120 --> 00:35:05,279 Speaker 2: might come from to make a forecast on what the 730 00:35:05,280 --> 00:35:07,680 Speaker 2: economy might look like. Greg, if you got any kind 731 00:35:07,680 --> 00:35:09,879 Speaker 2: of base case whatsoever, from where they might come from, 732 00:35:09,960 --> 00:35:11,600 Speaker 2: how big they might be, and what it might mean 733 00:35:11,640 --> 00:35:12,120 Speaker 2: for growth. 734 00:35:12,960 --> 00:35:15,600 Speaker 9: Yeah, John, I think you're going to see a cap 735 00:35:15,680 --> 00:35:18,440 Speaker 9: on spending. I think that's very likely. They're just arguing 736 00:35:18,480 --> 00:35:21,360 Speaker 9: over how much. Is it two four percent or is 737 00:35:21,400 --> 00:35:23,359 Speaker 9: it zero. I don't think it's going to be zero. 738 00:35:23,480 --> 00:35:26,040 Speaker 9: There will be some kind of a cap. They'll clawback 739 00:35:26,120 --> 00:35:29,239 Speaker 9: on covid Aid. There are several other things that are 740 00:35:29,600 --> 00:35:32,520 Speaker 9: on the table now, including if you want food stamps 741 00:35:32,520 --> 00:35:35,280 Speaker 9: for federal benefits, you have to be willing to work, 742 00:35:35,680 --> 00:35:39,200 Speaker 9: so I think you get it. Overall for the macro economy, 743 00:35:39,480 --> 00:35:41,480 Speaker 9: I think it will be a slight headwind. 744 00:35:41,680 --> 00:35:44,120 Speaker 2: Greg fam Jeff Investments. Greg, thank you. 745 00:35:44,520 --> 00:35:48,400 Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and 746 00:35:48,520 --> 00:35:52,719 Speaker 1: anywhere else you get your podcasts. Listen live every weekday 747 00:35:52,960 --> 00:35:56,480 Speaker 1: starting at seven am Eastern on Bloomberg dot Com, the 748 00:35:56,600 --> 00:36:00,560 Speaker 1: iHeartRadio app, tune In, and the Bloomberg busines This up. 749 00:36:01,000 --> 00:36:04,680 Speaker 1: You can watch us live on Bloomberg Television and always. 750 00:36:05,040 --> 00:36:08,920 Speaker 1: I'm the Bloomberg Terminal. Thanks for listening. I'm Tom Keen, 751 00:36:09,120 --> 00:36:10,880 Speaker 1: and this is Bloomberg