1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownowitz. Daily we bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,440 Speaker 1: and of course, on the Bloomberg terminal. Right now, Leon 6 00:00:30,480 --> 00:00:34,320 Speaker 1: Cooperman joins us. He's with Omega, their family office, the chairman, 7 00:00:34,400 --> 00:00:36,760 Speaker 1: the CEO. What he really is is a kid out 8 00:00:36,760 --> 00:00:39,640 Speaker 1: of Hunter College who got a job at Xerox a 9 00:00:39,720 --> 00:00:43,680 Speaker 1: million years ago and stumbled through Colombia into Golden Sacks 10 00:00:43,720 --> 00:00:47,239 Speaker 1: where he uh found acclaim fame and fortune. He was 11 00:00:47,280 --> 00:00:51,960 Speaker 1: a regular and institutional Investors Awards ceremonies for years and 12 00:00:52,080 --> 00:00:55,640 Speaker 1: years and years. Mr Cooperman joins us this morning, Leon, 13 00:00:55,760 --> 00:00:58,480 Speaker 1: why is this short squeeze different than the forty two 14 00:00:58,520 --> 00:01:02,800 Speaker 1: others you've known since you joined Golden Sachs. Well, the 15 00:01:02,880 --> 00:01:06,880 Speaker 1: market is very different because things were happening much more quickly. Uh, 16 00:01:06,920 --> 00:01:09,720 Speaker 1: there's just no stabilizers. When I came to Wall Street 17 00:01:09,760 --> 00:01:13,800 Speaker 1: fifty five years ago, the brokers firms traded stock fifty 18 00:01:13,840 --> 00:01:16,840 Speaker 1: cents to share. The vocal rule didn't exist. They had 19 00:01:16,880 --> 00:01:19,679 Speaker 1: a center to stabilize and go against the trend that 20 00:01:19,720 --> 00:01:23,360 Speaker 1: doesn't exist anymore. Uh. You know the vibue used to 21 00:01:23,400 --> 00:01:26,080 Speaker 1: be New York Stock Exchange. Any presented the volumes well board, 22 00:01:26,360 --> 00:01:30,680 Speaker 1: the specialists don't play a role for someone unexplained reason. Uh, 23 00:01:30,720 --> 00:01:33,200 Speaker 1: the SEC eliminated the uptick rule with two thousand and 24 00:01:33,200 --> 00:01:37,200 Speaker 1: seven or something. Very well, okay, and I don't want 25 00:01:37,240 --> 00:01:39,600 Speaker 1: to interrupt, but that's right where I wanted to go. Okay. 26 00:01:39,760 --> 00:01:42,600 Speaker 1: Arthur Levitt and others full disclosure. Mr Levitt's a Bloomberg 27 00:01:42,640 --> 00:01:45,880 Speaker 1: board member. Arthur Levitt others took us from quarter point 28 00:01:45,959 --> 00:01:50,440 Speaker 1: responsibility down to the rush of the decimalization, and then 29 00:01:50,520 --> 00:01:55,520 Speaker 1: we had the uptick rule changed. Explain why the uptick 30 00:01:55,640 --> 00:01:59,160 Speaker 1: rule was so important, Well, he had, it's the village 31 00:01:59,160 --> 00:02:01,320 Speaker 1: of the market. You need an uptiket just couldn't not. 32 00:02:01,680 --> 00:02:03,520 Speaker 1: I think the elimination of the up to group gave 33 00:02:03,640 --> 00:02:07,720 Speaker 1: rise to these high frequency you know, out instators, and 34 00:02:07,720 --> 00:02:10,160 Speaker 1: they know nothing about value, they know everything about price, 35 00:02:10,600 --> 00:02:13,920 Speaker 1: so they basically they exacerbate the trend. When the market's 36 00:02:13,960 --> 00:02:17,440 Speaker 1: going up, they accelerate the up and moves going down 37 00:02:17,480 --> 00:02:20,960 Speaker 1: the accelerated down mood and I think the SEC should 38 00:02:21,200 --> 00:02:24,000 Speaker 1: be They've been very mindful of the course of trading, 39 00:02:24,400 --> 00:02:27,000 Speaker 1: but they have not looked at the lowering the course 40 00:02:27,040 --> 00:02:29,640 Speaker 1: of trading, what impact has had in the market. And 41 00:02:29,680 --> 00:02:31,440 Speaker 1: I think that we should try to slow things down 42 00:02:31,440 --> 00:02:34,520 Speaker 1: a little and reinstate the up to group. Charles Cancer 43 00:02:34,680 --> 00:02:36,640 Speaker 1: of New Berger Berman was on the other day and 44 00:02:36,680 --> 00:02:40,800 Speaker 1: made very clear his break is a responsible short interest. 45 00:02:41,200 --> 00:02:45,680 Speaker 1: Leon Cooperman is one path here to restrict the size 46 00:02:45,919 --> 00:02:49,720 Speaker 1: of the short interest, to not only protect investors, but 47 00:02:49,840 --> 00:02:52,320 Speaker 1: just just to put a break on all that high 48 00:02:52,400 --> 00:02:56,200 Speaker 1: speed market. No, I would say that we should just 49 00:02:56,200 --> 00:02:59,000 Speaker 1: follow the rules that existence. I mean, if you're short 50 00:02:59,080 --> 00:03:01,760 Speaker 1: something you have to secure, you're a ball, okay, if 51 00:03:01,800 --> 00:03:03,760 Speaker 1: you if you if you can't have a barrow, you 52 00:03:03,760 --> 00:03:07,080 Speaker 1: shouldn't be short. So the extent that somebody shouldn't one 53 00:03:07,120 --> 00:03:09,720 Speaker 1: that represented the market capital company, it is because the 54 00:03:09,800 --> 00:03:13,359 Speaker 1: rules have not been followed. Liam was anything to a 55 00:03:13,520 --> 00:03:19,680 Speaker 1: maya from the events of several weeks ago, anything to admire, Uh, well, 56 00:03:19,680 --> 00:03:22,800 Speaker 1: the system has survived. But you know, no, I would 57 00:03:22,800 --> 00:03:26,200 Speaker 1: say it's not. Look, the Wall Street ethics has been 58 00:03:26,200 --> 00:03:29,119 Speaker 1: in a decline for quite some time, many many years ago. 59 00:03:29,160 --> 00:03:32,079 Speaker 1: I confronted the then head of the New York Stock Exchange. 60 00:03:32,520 --> 00:03:36,240 Speaker 1: I asked why they allowed these algorithmic guys to co 61 00:03:36,400 --> 00:03:39,280 Speaker 1: locate their computers next to New York Stocker Change, to 62 00:03:39,360 --> 00:03:42,520 Speaker 1: give them a split second advance over the public. Just 63 00:03:42,560 --> 00:03:45,400 Speaker 1: doesn't seem to be right. And his response was, well, 64 00:03:45,520 --> 00:03:48,240 Speaker 1: we don't do it, somebody else will. Okay. The sale 65 00:03:48,280 --> 00:03:51,360 Speaker 1: of order flow raises questions in terms of whether the 66 00:03:51,400 --> 00:03:54,800 Speaker 1: public's orders are being abused. But I think that there 67 00:03:54,840 --> 00:03:56,680 Speaker 1: there's a lot of things yet she could be doing. 68 00:03:57,160 --> 00:03:59,320 Speaker 1: And the last thing we need is Elizabeth Warren or 69 00:03:59,320 --> 00:04:03,520 Speaker 1: Bernie Sands or AOC getting involved setting policy. You know, 70 00:04:03,560 --> 00:04:07,200 Speaker 1: the rules and the regulations exist there in place, just 71 00:04:07,320 --> 00:04:10,120 Speaker 1: follow them. Well. Actually, know, Leon, a lot of people 72 00:04:10,160 --> 00:04:13,640 Speaker 1: have characterized this as the wealthy versus the poor, David 73 00:04:13,920 --> 00:04:15,880 Speaker 1: versus Goliath. How and healthful do you think that is? 74 00:04:15,960 --> 00:04:20,240 Speaker 1: Right now? I think that's all blowning, you know, uh, 75 00:04:20,880 --> 00:04:24,960 Speaker 1: this persistent attack of the wealthy. I mean, Melvin lost 76 00:04:25,000 --> 00:04:28,560 Speaker 1: a lot of money. I suspect that he's a very 77 00:04:28,560 --> 00:04:33,120 Speaker 1: wealthy guy, the fellow that runs Melbourne Capital, So so 78 00:04:34,120 --> 00:04:36,400 Speaker 1: I don't think he's a battling against the wealthy and 79 00:04:36,440 --> 00:04:39,040 Speaker 1: the poor. I think in America as a country became 80 00:04:39,120 --> 00:04:42,760 Speaker 1: great because poor people want to inspire to become wealthy, 81 00:04:43,080 --> 00:04:47,320 Speaker 1: not because they basically had a negative view of the wealthy. 82 00:04:47,440 --> 00:04:50,080 Speaker 1: And uh, you know, how do you become wealthy in America? 83 00:04:50,360 --> 00:04:52,760 Speaker 1: You become wealthy in America you should develop a practice 84 00:04:52,800 --> 00:04:56,000 Speaker 1: service and somebody needs when you get richly rewarded and 85 00:04:56,040 --> 00:04:58,360 Speaker 1: the people who had to have their head screwed oncorrectly 86 00:04:58,760 --> 00:05:02,039 Speaker 1: then shared that success others less fortunate. Is the world 87 00:05:02,120 --> 00:05:04,360 Speaker 1: better off and worse off because of Bill Gauge, Jeff 88 00:05:04,400 --> 00:05:08,320 Speaker 1: Bezos and host of other people. You know, I've said 89 00:05:08,320 --> 00:05:10,839 Speaker 1: on your program other programs, ken Lyn Bell, who go 90 00:05:10,880 --> 00:05:13,920 Speaker 1: in the finest human beings I've ever met? Okay Well, 91 00:05:14,000 --> 00:05:17,960 Speaker 1: Ken State, Bernie Marcus, Uh you know, I think he 92 00:05:18,040 --> 00:05:20,960 Speaker 1: raised him something like h fifty families put up two 93 00:05:20,960 --> 00:05:23,600 Speaker 1: billion dollars East they raised ten million dollars, and I 94 00:05:23,640 --> 00:05:26,120 Speaker 1: don't know. The enterprise today is probably two d and 95 00:05:26,120 --> 00:05:30,039 Speaker 1: seventy billion dollars. They have several thousand employees and a millionaires. 96 00:05:30,560 --> 00:05:33,599 Speaker 1: Bernie and Kendon given back billions of dollars to society. 97 00:05:34,520 --> 00:05:38,679 Speaker 1: That's the American dream. Well, how does the FED factor 98 00:05:38,720 --> 00:05:41,360 Speaker 1: into the American dream, because the American dream increasingly has 99 00:05:41,400 --> 00:05:43,960 Speaker 1: been people with assets have continued to see their wealth 100 00:05:44,000 --> 00:05:47,280 Speaker 1: grow dramatically under the Fed's regime, versus those who don't 101 00:05:47,279 --> 00:05:50,760 Speaker 1: have assets, which have missed out. Look, this goes back. 102 00:05:50,960 --> 00:05:53,240 Speaker 1: We have had some you know, I'm not a big 103 00:05:53,240 --> 00:05:56,120 Speaker 1: bull in the market presently. I understand exactly what's going 104 00:05:56,160 --> 00:06:01,000 Speaker 1: on basically, but we've had the government for warming some 105 00:06:01,080 --> 00:06:04,000 Speaker 1: type of providing some type of life support to the 106 00:06:04,040 --> 00:06:06,640 Speaker 1: economy and the markets. There's two thousand and eight, two 107 00:06:06,680 --> 00:06:09,440 Speaker 1: thousand eight Mr Rnanke figured out that common was going 108 00:06:09,480 --> 00:06:12,120 Speaker 1: down the toilet. He had to reverse that. He said, 109 00:06:12,160 --> 00:06:14,240 Speaker 1: the best way to reverse that is to create wealth. 110 00:06:14,480 --> 00:06:16,520 Speaker 1: You know, the so called forate Goo effect. Five percent 111 00:06:16,600 --> 00:06:19,680 Speaker 1: of wealth changes workers with the consumption. And the best 112 00:06:19,680 --> 00:06:21,600 Speaker 1: way to get wealth that we get the stock market up. 113 00:06:21,760 --> 00:06:24,520 Speaker 1: The trouble with it is of stocks how much wanting 114 00:06:24,560 --> 00:06:26,839 Speaker 1: to set the people? Uh, not that they did the 115 00:06:26,880 --> 00:06:29,440 Speaker 1: wrong thing. They did the right thing, okay, and then 116 00:06:29,480 --> 00:06:33,119 Speaker 1: they spent the next ten years taking away the wealth 117 00:06:33,200 --> 00:06:35,560 Speaker 1: that was created from the wealthy by creating an environment 118 00:06:35,560 --> 00:06:38,520 Speaker 1: where there's no returnment savings. So if you were letter 119 00:06:38,640 --> 00:06:40,560 Speaker 1: proved in life in two thousand and eight, and you 120 00:06:40,560 --> 00:06:42,680 Speaker 1: didn't get caught in a big way and you had savings. 121 00:06:43,120 --> 00:06:48,120 Speaker 1: If you tax adjust and inflation adjust, you returned savings negative. Okay, 122 00:06:48,279 --> 00:06:50,159 Speaker 1: And now they want to get another bite of the apple. 123 00:06:50,600 --> 00:06:53,640 Speaker 1: We are following. It's very clear what's going on in 124 00:06:54,120 --> 00:06:58,360 Speaker 1: the country right now. Unemployment pre COVID was like five 125 00:06:58,440 --> 00:07:01,120 Speaker 1: point seven million people on the poor in that balloon 126 00:07:01,279 --> 00:07:04,279 Speaker 1: over twenty three million. That's now down to about a 127 00:07:04,320 --> 00:07:08,120 Speaker 1: bit over ten million. And they're conducting monetary and fiscal policy, 128 00:07:08,680 --> 00:07:10,920 Speaker 1: not saying it wrong, but there's a pricey page for 129 00:07:10,920 --> 00:07:14,160 Speaker 1: this long term. They're conducting policy with the idea of 130 00:07:14,200 --> 00:07:17,880 Speaker 1: getting the unemployment back to where it was pre COVID. Okay, 131 00:07:18,040 --> 00:07:20,720 Speaker 1: and everything they're doing so just look at the world. 132 00:07:21,040 --> 00:07:25,720 Speaker 1: We've injected one trillion dollars more in stimulus in the 133 00:07:25,800 --> 00:07:29,120 Speaker 1: way of transfer payments. Is the economy incoming has been lost? 134 00:07:29,360 --> 00:07:32,680 Speaker 1: Plus we're talking about another trillion nine Okay. We took 135 00:07:32,680 --> 00:07:34,600 Speaker 1: two and fourty five years from this country to go 136 00:07:34,640 --> 00:07:37,600 Speaker 1: from zero national debt to twenty one or two trillion. 137 00:07:37,640 --> 00:07:39,880 Speaker 1: That's going up three trillion dollars a year. That's not 138 00:07:39,960 --> 00:07:42,920 Speaker 1: a sustainable situation. It's a price repeat for that, Leon, 139 00:07:43,360 --> 00:07:46,000 Speaker 1: What is the consequence? Is it runaway inflation? Is it 140 00:07:46,200 --> 00:07:49,120 Speaker 1: markets that are going to get overheated. I don't know 141 00:07:49,160 --> 00:07:51,360 Speaker 1: the answer because the inflation and inflation. I just know 142 00:07:51,440 --> 00:07:54,080 Speaker 1: it's not gonna be a good end. And I don't 143 00:07:54,080 --> 00:07:55,400 Speaker 1: know what it ends, but it's not gonna be a 144 00:07:55,440 --> 00:07:57,360 Speaker 1: good end to the game. It's not gonna be a 145 00:07:57,360 --> 00:07:59,720 Speaker 1: good end. Just think about this way. If you speak 146 00:07:59,760 --> 00:08:02,040 Speaker 1: to a hundred economists, and Mr Keane is a damn 147 00:08:02,080 --> 00:08:04,480 Speaker 1: good economists of his own, you speak to a hundred 148 00:08:04,560 --> 00:08:08,080 Speaker 1: columnists today Ust and what is the trend? Real growth 149 00:08:08,120 --> 00:08:11,920 Speaker 1: in the economy? Trend real growth? Then we said, tis 150 00:08:11,960 --> 00:08:14,640 Speaker 1: potention to grow in real terms about two percent one 151 00:08:14,680 --> 00:08:18,200 Speaker 1: episcent proactivity fifty basis boys from labor force growth, that's 152 00:08:18,200 --> 00:08:21,080 Speaker 1: two percent, and let pe sent for inflation, that's four 153 00:08:21,160 --> 00:08:25,160 Speaker 1: percent nominal GDP growth. Okay, this year the economy is 154 00:08:25,200 --> 00:08:28,480 Speaker 1: expected to grow six percent. It's growing three in real terms. 155 00:08:28,720 --> 00:08:31,880 Speaker 1: It's growing a three times trend. Yet we have zero 156 00:08:31,920 --> 00:08:35,640 Speaker 1: interest rates. Doesn't make any sense. It's being the policy. 157 00:08:35,840 --> 00:08:41,199 Speaker 1: And I resent Mr Powell in one respect, let him okay, Leon, Look, 158 00:08:41,240 --> 00:08:42,800 Speaker 1: I want Leon, I want to get back just as 159 00:08:42,840 --> 00:08:44,360 Speaker 1: the running out of time. I want to get back 160 00:08:44,360 --> 00:08:46,560 Speaker 1: to what we're talking about here. Michael Lewis wrote a 161 00:08:46,600 --> 00:08:51,320 Speaker 1: book about the flash boys. We've got to do something 162 00:08:51,400 --> 00:08:54,480 Speaker 1: to get us away from the cult of high speed trading. 163 00:08:54,960 --> 00:08:59,680 Speaker 1: What is your policy prescription for Mr Gensler to get 164 00:08:59,760 --> 00:09:04,439 Speaker 1: us somewhere back to where Vailue is worshiped like Price 165 00:09:05,640 --> 00:09:07,880 Speaker 1: the files a letter I sent to j Clinton in 166 00:09:08,040 --> 00:09:13,120 Speaker 1: December recommending reinstating the uptick rule that was slow the 167 00:09:13,200 --> 00:09:16,319 Speaker 1: process down. I see no downside risk to doing that, 168 00:09:16,880 --> 00:09:20,000 Speaker 1: and it can control. It would basically add some stability 169 00:09:20,000 --> 00:09:23,520 Speaker 1: to the system. There's no stabilizers up or down, and 170 00:09:23,559 --> 00:09:25,520 Speaker 1: that's not a good thing for the markets. Who is 171 00:09:25,640 --> 00:09:29,000 Speaker 1: lobbying for those people? I mean, who is representing them 172 00:09:29,080 --> 00:09:33,240 Speaker 1: against people of the high speed industry, And I'm gonna 173 00:09:33,280 --> 00:09:38,280 Speaker 1: say including Mr Griffin. I honestly don't know. You know, 174 00:09:38,559 --> 00:09:41,360 Speaker 1: I'm nearly an old fashioned investor. I buy stocks one 175 00:09:41,400 --> 00:09:44,000 Speaker 1: at a time. I'm a value guy. I buy things. 176 00:09:44,040 --> 00:09:46,520 Speaker 1: What's your single bust buy right now? Farrell's gotta make 177 00:09:46,520 --> 00:09:49,640 Speaker 1: some money. What's your single best buy? Complicated? But my 178 00:09:49,679 --> 00:09:52,440 Speaker 1: single best idea, which should be my largest position right 179 00:09:53,000 --> 00:09:57,880 Speaker 1: is a company called Legato. Legato owns somewhere between and 180 00:09:57,880 --> 00:10:02,880 Speaker 1: forty megaherts and spectrum i G spectrum which got caught 181 00:10:02,960 --> 00:10:05,520 Speaker 1: up at some controversy with the Department of Friends very 182 00:10:05,600 --> 00:10:09,520 Speaker 1: bously objected to their spectrum used because they said interfere 183 00:10:09,559 --> 00:10:13,400 Speaker 1: with the d needs complete PLODI. The FCC did a 184 00:10:13,440 --> 00:10:16,600 Speaker 1: fabulous job by the chairman Pie studied this for over 185 00:10:16,720 --> 00:10:20,480 Speaker 1: five years and by a five to zero by personal vote. 186 00:10:20,760 --> 00:10:28,040 Speaker 1: There you go to tell you Leon, thank you. We've 187 00:10:28,040 --> 00:10:29,640 Speaker 1: got to leave it there. Leon cooperm in there and 188 00:10:29,720 --> 00:10:31,679 Speaker 1: make a family office Chairman and see Leon get to 189 00:10:31,679 --> 00:10:40,080 Speaker 1: catch up. Got to see you again. Thank you. It 190 00:10:40,120 --> 00:10:42,920 Speaker 1: would be nice John to speak to someone truly expert 191 00:10:42,960 --> 00:10:46,959 Speaker 1: in the span of commodities. Young Gartman ages ago. John 192 00:10:47,000 --> 00:10:50,360 Speaker 1: Farrell actually was in the pits enjoying losing money. Well, 193 00:10:50,400 --> 00:10:52,520 Speaker 1: let's talk to Dennis now, not about losing money, maybe 194 00:10:52,520 --> 00:10:55,080 Speaker 1: even making it. Dennis Gartman, Chairman of the University of 195 00:10:55,080 --> 00:10:58,040 Speaker 1: Akrons and Downment Committee. Dennis grit to catch up with you, sir. 196 00:10:58,280 --> 00:11:00,880 Speaker 1: You've heard the same conversation we've heard. Let's contribute to 197 00:11:00,920 --> 00:11:03,920 Speaker 1: it and common it's he super psychile. Your thoughts now, Dennis, 198 00:11:04,640 --> 00:11:06,840 Speaker 1: I think There's something going on that is very, very 199 00:11:06,840 --> 00:11:08,959 Speaker 1: serious in the commodity markets. Take a look at almost 200 00:11:09,000 --> 00:11:10,800 Speaker 1: any commodity that you want to look at. Look at tin, 201 00:11:11,320 --> 00:11:14,559 Speaker 1: it's up dramatically. Look at copper, it's up dramatically. Look 202 00:11:14,600 --> 00:11:18,679 Speaker 1: at cotton, it's up dramatically. Look at wheat, corn, soybeans 203 00:11:18,720 --> 00:11:21,440 Speaker 1: up dramatically. Look at livestock prices up dramatically. Look at 204 00:11:21,480 --> 00:11:24,400 Speaker 1: the cost of shipping goods up dramatically. There's something more 205 00:11:24,480 --> 00:11:27,000 Speaker 1: going on than just a mere bounce from the lows. 206 00:11:27,040 --> 00:11:29,800 Speaker 1: I think that the bear market that had existed for 207 00:11:29,880 --> 00:11:32,160 Speaker 1: a more than a decade has ended. I think a 208 00:11:32,200 --> 00:11:34,240 Speaker 1: bowl market that will probably last for a long period 209 00:11:34,280 --> 00:11:37,080 Speaker 1: of time has begun. The monetary authorities around the world 210 00:11:37,080 --> 00:11:40,520 Speaker 1: are sponsoring this is to become extremely expansionary. This is 211 00:11:40,559 --> 00:11:43,600 Speaker 1: starting and it's not going to go away anytime soon. Dennis, 212 00:11:43,640 --> 00:11:46,920 Speaker 1: I gotta rip up the script. You are absolutely definitive 213 00:11:47,080 --> 00:11:50,120 Speaker 1: in the way that you stop losing money in commodities, 214 00:11:50,120 --> 00:11:52,120 Speaker 1: which is a habit. It's sort of like game stop. 215 00:11:52,440 --> 00:11:56,520 Speaker 1: To be honest, what is your best practice for our 216 00:11:56,559 --> 00:12:01,760 Speaker 1: listeners and viewers to not lose money investing in commodities. 217 00:12:01,800 --> 00:12:05,679 Speaker 1: What's the single best guardment tip. Add to winning trades 218 00:12:05,720 --> 00:12:08,959 Speaker 1: and avoid doing and avoid adding to losing trades. Whatever 219 00:12:09,000 --> 00:12:10,920 Speaker 1: you do. An old rule of mine, and it's a 220 00:12:11,000 --> 00:12:12,920 Speaker 1: very good rule. Do more of that which is working 221 00:12:12,920 --> 00:12:15,120 Speaker 1: and less of that which is not. If something is 222 00:12:15,160 --> 00:12:16,760 Speaker 1: going from the lower left to the upper right and 223 00:12:16,800 --> 00:12:19,520 Speaker 1: it's been working for you, add to it. If something's 224 00:12:19,559 --> 00:12:21,720 Speaker 1: been going from the lower left to the upper right 225 00:12:21,720 --> 00:12:24,200 Speaker 1: and you're short of it, stop doing that. So that's 226 00:12:24,240 --> 00:12:27,480 Speaker 1: the simplest methodology. It's the best methodology. It's good in life, 227 00:12:27,480 --> 00:12:29,280 Speaker 1: and it's good in trading. Do more of that which 228 00:12:29,320 --> 00:12:32,200 Speaker 1: is working and less of that which is not. Evidently 229 00:12:32,600 --> 00:12:34,920 Speaker 1: over leverage, it was about to say, evidently triple every 230 00:12:34,920 --> 00:12:38,000 Speaker 1: cash is working really well for a Tom Keene. There 231 00:12:38,040 --> 00:12:40,760 Speaker 1: raises a question though, this idea of the goods inflation, 232 00:12:40,840 --> 00:12:43,320 Speaker 1: this idea of commodity is gaining at a time when 233 00:12:43,320 --> 00:12:46,400 Speaker 1: people can't go out and have experiences in the same 234 00:12:46,440 --> 00:12:49,000 Speaker 1: way because of the pandemic, and there's been a shift 235 00:12:49,040 --> 00:12:52,839 Speaker 1: from spending in services to spending on goods. Is that 236 00:12:52,880 --> 00:12:55,640 Speaker 1: going to last and enough of a way to keep 237 00:12:55,679 --> 00:12:58,840 Speaker 1: this supercycle going as people are predicting, or could this 238 00:12:58,880 --> 00:13:01,960 Speaker 1: be skewing some of what seeing currently, Dennis, as long 239 00:13:02,000 --> 00:13:04,600 Speaker 1: as the monetary authorities continue to be expansionary, and it's 240 00:13:04,640 --> 00:13:06,240 Speaker 1: not just a FED that is that way. It's the 241 00:13:06,240 --> 00:13:08,160 Speaker 1: Bank of Candidates, the Bank of England, it's the e 242 00:13:08,200 --> 00:13:10,079 Speaker 1: c B, It's the People's Bank of China, it's the 243 00:13:10,120 --> 00:13:12,960 Speaker 1: people It's a Reserve Bank of Russia, the reserve banks 244 00:13:12,960 --> 00:13:15,680 Speaker 1: of Australia and New Zealand. All of them are all expansionary. 245 00:13:15,760 --> 00:13:18,840 Speaker 1: All of them are expanding reserves at a pace far 246 00:13:18,920 --> 00:13:22,800 Speaker 1: past any reasonable expectation of GDP and population growth. So 247 00:13:22,840 --> 00:13:25,080 Speaker 1: it is inflationary around the world. And this is not 248 00:13:25,160 --> 00:13:27,520 Speaker 1: going to go away anytime soon. As I've said many 249 00:13:27,559 --> 00:13:29,840 Speaker 1: times before and I'll continue to say in the future. 250 00:13:29,840 --> 00:13:32,400 Speaker 1: This is something sponsored by the central banks and it's 251 00:13:32,440 --> 00:13:35,360 Speaker 1: not going to stop. And I just want to mention folks, 252 00:13:35,400 --> 00:13:38,120 Speaker 1: but Mr Gartman just mentioned there in trading strategy is 253 00:13:38,160 --> 00:13:42,160 Speaker 1: called an anti Martingale strategy. This is from the Bibles 254 00:13:42,200 --> 00:13:44,720 Speaker 1: of years ago when people used to lose money. Maybe 255 00:13:44,720 --> 00:13:48,720 Speaker 1: with a more informed view, Dennis Garman, John Farro demands 256 00:13:49,000 --> 00:13:51,840 Speaker 1: I go to the real yield. You know, the focuses 257 00:13:51,920 --> 00:13:55,040 Speaker 1: on treasury, the money they have at the FED. It's 258 00:13:55,040 --> 00:13:58,480 Speaker 1: gonna flood the system. Do we go to negative interest 259 00:13:58,559 --> 00:14:01,080 Speaker 1: rates and money market fund and do we go to 260 00:14:01,679 --> 00:14:05,360 Speaker 1: I'll call it a volatile real yield. I think what's 261 00:14:05,360 --> 00:14:07,280 Speaker 1: going to happen, or what has been happening and what's 262 00:14:07,280 --> 00:14:09,040 Speaker 1: going to continue to happen, is the yield curve is 263 00:14:09,040 --> 00:14:12,200 Speaker 1: going to continue to widen. The back end of the curve, 264 00:14:12,360 --> 00:14:14,720 Speaker 1: which is the which is the area that the Fed 265 00:14:14,760 --> 00:14:17,120 Speaker 1: has very little control over, is going to continue to 266 00:14:17,120 --> 00:14:19,840 Speaker 1: see higher and higher interest rates. The long bond went 267 00:14:19,960 --> 00:14:22,160 Speaker 1: above two percent just this past week. It's going to 268 00:14:22,200 --> 00:14:23,680 Speaker 1: go to three or four percent over the course of 269 00:14:23,680 --> 00:14:25,680 Speaker 1: the next several years. But the Fed is going to 270 00:14:25,760 --> 00:14:28,160 Speaker 1: continue to keep the overnight Fed funds right. They've told 271 00:14:28,240 --> 00:14:30,440 Speaker 1: us this. I believe them. They're gonna keep the overnight 272 00:14:30,440 --> 00:14:32,840 Speaker 1: Fed funds rate at or near zero. Can they take 273 00:14:32,880 --> 00:14:35,920 Speaker 1: it to negative numbers. It's possible, I doubt it. But 274 00:14:35,960 --> 00:14:37,960 Speaker 1: the important thing is to notice that the spread between 275 00:14:37,960 --> 00:14:40,000 Speaker 1: the overnight Fed funds rate and the long end of 276 00:14:40,040 --> 00:14:41,480 Speaker 1: the curve is going to continue to wide. And this 277 00:14:41,520 --> 00:14:44,640 Speaker 1: will help the banking system and more than anybody else. 278 00:14:44,720 --> 00:14:48,760 Speaker 1: But it's this is something that's predicated upon inflation continuing 279 00:14:48,760 --> 00:14:50,240 Speaker 1: for a long period of time. So the Fed is 280 00:14:50,280 --> 00:14:52,760 Speaker 1: not going to tighten monetary policy at the short end, 281 00:14:53,160 --> 00:14:55,840 Speaker 1: but the market itself is tightening monetary policy at the 282 00:14:55,840 --> 00:14:57,640 Speaker 1: long end. And that's what people have to get have 283 00:14:57,720 --> 00:14:59,960 Speaker 1: to understand, and they'd be plugging that into the funance 284 00:15:00,000 --> 00:15:01,600 Speaker 1: of sect of the banks have been flying. Dennis is 285 00:15:01,600 --> 00:15:04,040 Speaker 1: great to catch up, Sir Dennis Galman, Chairman. I think 286 00:15:04,080 --> 00:15:11,800 Speaker 1: University of akrons in down and fun James Bianco with 287 00:15:11,920 --> 00:15:15,800 Speaker 1: this Bianco research, UH this morning, Jim Bianco, real simple 288 00:15:16,240 --> 00:15:19,760 Speaker 1: does the carnage of the Midwest deep freeze? Does that 289 00:15:19,920 --> 00:15:25,120 Speaker 1: adjust national economics? You know, you normally think it would, 290 00:15:25,280 --> 00:15:28,040 Speaker 1: but given that we're already in the mode of working 291 00:15:28,080 --> 00:15:30,840 Speaker 1: from home, the impact is far less than it would 292 00:15:30,840 --> 00:15:34,320 Speaker 1: have been in a pre pandemic era. So a lot 293 00:15:34,400 --> 00:15:37,960 Speaker 1: of people like me are hit home working and while 294 00:15:37,960 --> 00:15:40,440 Speaker 1: it's snowing outside, as I talked to you, not a 295 00:15:40,440 --> 00:15:42,400 Speaker 1: whole lot it's going to change with my work habits 296 00:15:42,520 --> 00:15:46,280 Speaker 1: just because of the pandemic. Many people missed they recovery 297 00:15:46,440 --> 00:15:49,120 Speaker 1: last year and how quickly, more specifically, how quickly the 298 00:15:49,160 --> 00:15:53,240 Speaker 1: u S would recover. Are we doing that all over again? Uh? 299 00:15:53,480 --> 00:15:56,280 Speaker 1: As far as missing it no, because I think a 300 00:15:56,320 --> 00:15:59,720 Speaker 1: lot of people are expecting a booming recovery. If there's 301 00:15:59,760 --> 00:16:03,200 Speaker 1: any thing we might be missing, the return of inflation. 302 00:16:04,040 --> 00:16:05,960 Speaker 1: I've heard that, you know, Wall Street has been upping 303 00:16:05,960 --> 00:16:10,200 Speaker 1: their forecast for real GDP growth, And I would just 304 00:16:10,280 --> 00:16:12,680 Speaker 1: put a little finer tune on that and say, maybe 305 00:16:12,680 --> 00:16:15,160 Speaker 1: it turns out to be nominal GDP growth that's gonna 306 00:16:15,200 --> 00:16:18,320 Speaker 1: go up, and that more of that component is going 307 00:16:18,360 --> 00:16:20,800 Speaker 1: to be inflation and a little less of that component 308 00:16:21,120 --> 00:16:23,280 Speaker 1: is going to be real growth. But I don't think 309 00:16:23,320 --> 00:16:25,560 Speaker 1: that there's a lot of people that are looking for 310 00:16:25,960 --> 00:16:29,520 Speaker 1: the economy to turn south anytime soon, unless something comes 311 00:16:29,520 --> 00:16:31,560 Speaker 1: along to break it. Markets are picking up on that. 312 00:16:31,600 --> 00:16:34,240 Speaker 1: It feels like economist behind the curve. Though on this 313 00:16:34,280 --> 00:16:37,200 Speaker 1: gym you speak to many market parts, hispan sound economists separately. 314 00:16:37,240 --> 00:16:39,560 Speaker 1: It just feels like the economists haven't quite upgraded their 315 00:16:39,560 --> 00:16:42,080 Speaker 1: forecasts yet, and the same way this market has, particularly 316 00:16:42,080 --> 00:16:45,200 Speaker 1: in the bond market. Yeah, I think what they're they're 317 00:16:45,280 --> 00:16:49,560 Speaker 1: being influenced by is interest rates. They're heading higher, and 318 00:16:49,600 --> 00:16:51,520 Speaker 1: I think they're going to continue to head higher. But 319 00:16:51,640 --> 00:16:54,880 Speaker 1: it's been a gradual grind, and so when I talk 320 00:16:54,960 --> 00:16:57,880 Speaker 1: about the potential of inflation coming. I understand there's a 321 00:16:57,880 --> 00:17:00,320 Speaker 1: base effect, but then after that and ray it's might 322 00:17:00,320 --> 00:17:03,320 Speaker 1: continue to move higher. On inflation, the answer, or the 323 00:17:03,400 --> 00:17:06,080 Speaker 1: question is why aren't they going up? Now? You've got 324 00:17:06,080 --> 00:17:08,119 Speaker 1: the Federal Reserve buying a trillion and a half dollars 325 00:17:08,119 --> 00:17:11,600 Speaker 1: of bonds a year, and that's probably dampening the type 326 00:17:11,600 --> 00:17:14,399 Speaker 1: of move we would have x them as well. But 327 00:17:14,480 --> 00:17:16,440 Speaker 1: I do think it's there, and I think that they're 328 00:17:16,480 --> 00:17:20,240 Speaker 1: just economists are starting to pick up on this idea that, 329 00:17:20,359 --> 00:17:22,919 Speaker 1: as Dennis Gartman said in the last hour, the supercyclist 330 00:17:22,920 --> 00:17:26,320 Speaker 1: turned commodities are moving higher and inflation looks like something 331 00:17:26,359 --> 00:17:29,040 Speaker 1: that is coming back that we haven't seen in about 332 00:17:29,080 --> 00:17:31,600 Speaker 1: thirty years. So it's also something that's very new for 333 00:17:31,640 --> 00:17:33,080 Speaker 1: a lot of people. That's actually what I was going 334 00:17:33,160 --> 00:17:35,160 Speaker 1: to say, that there's been a conditioning over the years 335 00:17:35,200 --> 00:17:37,439 Speaker 1: that just because the Federal Reserve is incredibly involved in 336 00:17:37,480 --> 00:17:41,440 Speaker 1: markets doesn't necessarily mean that we're going to get higher inflation. 337 00:17:41,560 --> 00:17:43,960 Speaker 1: I am wondering, and not to harp on this, but 338 00:17:44,000 --> 00:17:46,520 Speaker 1: good inflation versus bad inflation. You know, if if the 339 00:17:46,680 --> 00:17:48,959 Speaker 1: goods that you buy and everyone is buying more of 340 00:17:49,000 --> 00:17:51,520 Speaker 1: them and no services or not as many services during 341 00:17:51,520 --> 00:17:54,840 Speaker 1: the pandemic, and those goods are getting more expensive because 342 00:17:54,840 --> 00:17:57,680 Speaker 1: of the increased demand. So the real inflation is going 343 00:17:57,760 --> 00:17:59,919 Speaker 1: up faster than perhaps some of the headline E gauges 344 00:18:00,080 --> 00:18:05,639 Speaker 1: is is that good do wages necessarily follow? What's your sense? Well, 345 00:18:05,720 --> 00:18:09,359 Speaker 1: the two things on the goods inflation, you're not seeing 346 00:18:09,400 --> 00:18:12,359 Speaker 1: it as much in the data. But matt I Glaciers 347 00:18:12,359 --> 00:18:14,439 Speaker 1: brought up a good point on Twitter over the weekend. 348 00:18:14,880 --> 00:18:17,480 Speaker 1: You're getting rational in go buy something at home depot 349 00:18:17,560 --> 00:18:20,400 Speaker 1: or lows and it's the price is cheap and you'll 350 00:18:20,400 --> 00:18:22,840 Speaker 1: get it in April. You're you know, so they're rationing 351 00:18:22,840 --> 00:18:25,760 Speaker 1: out their supply as opposed to raising their prices. Well, 352 00:18:25,760 --> 00:18:28,560 Speaker 1: that's a form of inflation. It's just not showing up 353 00:18:28,960 --> 00:18:32,280 Speaker 1: in in the data as well too. As far as 354 00:18:32,320 --> 00:18:34,760 Speaker 1: where we're gonna go from here, I think you know, 355 00:18:34,800 --> 00:18:37,840 Speaker 1: when you talk about bad inflation, the question is gonna 356 00:18:37,880 --> 00:18:41,919 Speaker 1: be once we reopen with all the stimulus and services 357 00:18:41,920 --> 00:18:43,800 Speaker 1: start to move because a lot of them are dormant 358 00:18:43,920 --> 00:18:47,320 Speaker 1: right now because of the lockdown restrictions, are we gonna 359 00:18:47,320 --> 00:18:51,720 Speaker 1: see that start to move? And finally you mentioned about wages, Uh, 360 00:18:51,880 --> 00:18:55,000 Speaker 1: we have already been, you know the vernacular even using 361 00:18:55,040 --> 00:18:57,440 Speaker 1: we've been mailing people money. We just got done mailing 362 00:18:57,480 --> 00:19:00,040 Speaker 1: them six hundred dollars. We're gonna mail them fourtellars. I 363 00:19:00,119 --> 00:19:04,000 Speaker 1: understand why we're doing it. That's the American income right 364 00:19:04,040 --> 00:19:07,480 Speaker 1: now is being sent to you via the government in 365 00:19:07,480 --> 00:19:09,760 Speaker 1: the form of stimulus. And there's another big one coming. 366 00:19:10,080 --> 00:19:13,800 Speaker 1: Don't need wage inflation, you have personal income inflation because 367 00:19:13,840 --> 00:19:16,560 Speaker 1: the government is making up that difference, and that's going 368 00:19:16,600 --> 00:19:19,560 Speaker 1: to lead to a big stimulus. One thing's reopen later 369 00:19:19,600 --> 00:19:21,520 Speaker 1: this year. And this is the big distinction that people 370 00:19:21,560 --> 00:19:24,320 Speaker 1: are pointing to. Why we're going to get inflation that's 371 00:19:24,400 --> 00:19:28,800 Speaker 1: much faster than people are expecting. As economists become more 372 00:19:28,840 --> 00:19:33,080 Speaker 1: accepting of this idea, how high can yields go? Well, 373 00:19:33,119 --> 00:19:36,320 Speaker 1: you know that that's the that is the concern, because 374 00:19:36,359 --> 00:19:39,600 Speaker 1: we have a deeply negative real yield right now. If 375 00:19:39,600 --> 00:19:43,280 Speaker 1: you were to get inflation back to the Fed says 376 00:19:43,359 --> 00:19:45,800 Speaker 1: that they'll tolerate two and a half percent, Okay, fine, 377 00:19:45,840 --> 00:19:48,840 Speaker 1: let's use that, and then people believe that inflation is 378 00:19:48,840 --> 00:19:51,000 Speaker 1: is something to stick with. We might have to move 379 00:19:51,040 --> 00:19:53,600 Speaker 1: the positive yields that could get you at least to 380 00:19:53,640 --> 00:19:55,240 Speaker 1: two and a half percent in the ten year note. 381 00:19:55,400 --> 00:19:57,159 Speaker 1: I mean over a long period of time like the 382 00:19:57,240 --> 00:20:00,520 Speaker 1: end of next year, and in this leveled b on market, 383 00:20:00,880 --> 00:20:04,800 Speaker 1: that kind of move would be very unsettling. Even though 384 00:20:04,840 --> 00:20:06,440 Speaker 1: you might look at it from a long history and 385 00:20:06,480 --> 00:20:07,920 Speaker 1: say it's still two and a half percent. It's a 386 00:20:08,000 --> 00:20:11,560 Speaker 1: very low yield. But from the perspective of the way 387 00:20:11,600 --> 00:20:14,800 Speaker 1: that bonds are traded and held and especially financed through 388 00:20:14,840 --> 00:20:17,560 Speaker 1: the repo market, that kind of moving yields will not 389 00:20:17,720 --> 00:20:20,640 Speaker 1: will be a very difficult one for everybody to swallow. Jim, 390 00:20:20,640 --> 00:20:22,520 Speaker 1: I want you to go back to your training and 391 00:20:22,560 --> 00:20:26,919 Speaker 1: technical analysis. You are a CMT. How do you find 392 00:20:27,000 --> 00:20:31,440 Speaker 1: the breaking of trend on the real yield? The real 393 00:20:31,560 --> 00:20:33,840 Speaker 1: yield breaking of trend is going to be very difficult 394 00:20:33,880 --> 00:20:36,879 Speaker 1: to find right now because it's it's been in a 395 00:20:36,960 --> 00:20:40,320 Speaker 1: down trend and it really hasn't turned very much. But 396 00:20:40,640 --> 00:20:42,679 Speaker 1: what I have found in looking at those charts is 397 00:20:42,720 --> 00:20:48,119 Speaker 1: when it does break, it tends to move rapidly, you know. 398 00:20:48,200 --> 00:20:50,159 Speaker 1: So you know, I heard John say, you know what, 399 00:20:50,320 --> 00:20:52,160 Speaker 1: you know, maybe there's a little bit of a turn here, 400 00:20:52,160 --> 00:20:55,000 Speaker 1: and that's inaccurate description, and then there's a little bit 401 00:20:55,000 --> 00:20:57,320 Speaker 1: more of a turn and then pow, it just goes. 402 00:20:57,960 --> 00:21:00,280 Speaker 1: And that's really what people are most worried out. When 403 00:21:00,320 --> 00:21:02,720 Speaker 1: it comes to real yields, they won't be this gradual 404 00:21:02,840 --> 00:21:05,560 Speaker 1: rise like you have with nominal yields. They could move 405 00:21:05,560 --> 00:21:07,879 Speaker 1: a lot faster. Yeah, what's important to your Jim is 406 00:21:07,920 --> 00:21:10,440 Speaker 1: red zone, green zone. So your experience here on two 407 00:21:10,440 --> 00:21:13,400 Speaker 1: stins spread or real yield is when you go boom, 408 00:21:13,440 --> 00:21:17,359 Speaker 1: you go, is boom right to a positive statistic? No, 409 00:21:17,520 --> 00:21:19,400 Speaker 1: I don't think it will be to a positive statistic 410 00:21:19,560 --> 00:21:22,120 Speaker 1: right away because there's a long way to go. It's 411 00:21:22,119 --> 00:21:25,399 Speaker 1: almost a hundred basis points. But it will definitely break 412 00:21:25,440 --> 00:21:28,280 Speaker 1: the downtrend that we've been in, and it will also 413 00:21:28,320 --> 00:21:32,600 Speaker 1: be upsetting unsettling because remember, who's the biggest buyer of 414 00:21:32,600 --> 00:21:35,600 Speaker 1: of real yields is a federal reserve. They own that 415 00:21:35,640 --> 00:21:38,720 Speaker 1: market right now and they're buying it, you know, aggressively 416 00:21:38,800 --> 00:21:42,000 Speaker 1: every day. And if that moves starts in the face 417 00:21:42,040 --> 00:21:44,480 Speaker 1: of all that fed buying, you start thinking what's the 418 00:21:44,520 --> 00:21:47,359 Speaker 1: private sector doing in that market selling aggressively? And that 419 00:21:47,440 --> 00:21:50,119 Speaker 1: will be further unsettling for everybody. Jim, just find a 420 00:21:50,200 --> 00:21:54,119 Speaker 1: one you're watching that herring lights? Yeah, I'm gonna watch 421 00:21:54,160 --> 00:21:56,320 Speaker 1: the hearing. Unfortunately, I think they're missing the point. It 422 00:21:56,400 --> 00:21:59,879 Speaker 1: seems like it's gonna be about justifying short sale instead 423 00:21:59,880 --> 00:22:01,560 Speaker 1: of some of the things that have gone on. It's 424 00:22:01,560 --> 00:22:03,960 Speaker 1: gonna be theater, but I don't know if it's gonna 425 00:22:04,000 --> 00:22:06,720 Speaker 1: have much substance. Jim, isn't that always the white gonna say? 426 00:22:06,720 --> 00:22:17,800 Speaker 1: You said? Jim? Research and President right now on what 427 00:22:17,840 --> 00:22:21,879 Speaker 1: we will see today? Gregory Meeks joins us. He is 428 00:22:22,000 --> 00:22:25,280 Speaker 1: the chairman of the House Foreign Affairs Committee. He is 429 00:22:25,400 --> 00:22:28,639 Speaker 1: also a member of the House of Financial Services Committee. 430 00:22:29,000 --> 00:22:32,639 Speaker 1: He's been on the watch since and for those of 431 00:22:32,680 --> 00:22:37,040 Speaker 1: you truly nationwide and worldwide, you've never been more to 432 00:22:37,119 --> 00:22:40,520 Speaker 1: his district as you go to jfk As. He represents 433 00:22:40,560 --> 00:22:43,399 Speaker 1: the fifth of New York, which is that traffic in 434 00:22:43,440 --> 00:22:47,520 Speaker 1: the new construction, the infrastructure build through the fifth construct 435 00:22:47,600 --> 00:22:51,840 Speaker 1: Congressional District. Congress and Meeks, thank you so much for 436 00:22:52,000 --> 00:22:56,200 Speaker 1: joining us. What do you hope to accomplish today? Take 437 00:22:56,280 --> 00:22:59,879 Speaker 1: us away from the theatrics to the adult nous of 438 00:23:00,080 --> 00:23:06,040 Speaker 1: Maxine Waters. What's the job one today? Listening trying to 439 00:23:06,119 --> 00:23:09,639 Speaker 1: understand what in fact did take place, trying to see what, 440 00:23:09,760 --> 00:23:13,320 Speaker 1: if anything that we should also have dialogue and conversation 441 00:23:13,400 --> 00:23:16,439 Speaker 1: with the sec. UH. It is basically the you know 442 00:23:16,600 --> 00:23:19,360 Speaker 1: the name of the subcommittee that's in charges investor protection. 443 00:23:19,960 --> 00:23:24,200 Speaker 1: So as we've done on the Maxine Waters leadership previously, 444 00:23:24,720 --> 00:23:27,240 Speaker 1: you know, we saw consumer protection when we had to 445 00:23:27,560 --> 00:23:33,119 Speaker 1: hearing UH in regards to Wells Fargo UH. And sometimes 446 00:23:33,160 --> 00:23:35,359 Speaker 1: something comes out of it. More we get ideas and 447 00:23:35,400 --> 00:23:37,520 Speaker 1: thoughts and sometimes it doesn't. We want to make sure 448 00:23:37,640 --> 00:23:43,120 Speaker 1: that the average everyday investor UH is UH is protected. UH. 449 00:23:43,119 --> 00:23:44,959 Speaker 1: And I think that you know, I know for me, 450 00:23:45,359 --> 00:23:48,440 Speaker 1: you indicated I've been in Congress since that is after 451 00:23:48,560 --> 00:23:51,320 Speaker 1: me and one of the worst times of my life 452 00:23:51,760 --> 00:23:54,440 Speaker 1: was in two thousand and eight with the financial crisis. 453 00:23:54,840 --> 00:23:56,920 Speaker 1: And I do believe that we you know, we could 454 00:23:56,920 --> 00:23:59,360 Speaker 1: have been should have something. And that's what I hope 455 00:23:59,400 --> 00:24:01,920 Speaker 1: that we're doing. And we're looking UH and you know, 456 00:24:01,960 --> 00:24:05,400 Speaker 1: I'm a former prosecutor also, so we're looking to see, UH, 457 00:24:05,560 --> 00:24:07,440 Speaker 1: is there anything that we should be looking at and 458 00:24:07,560 --> 00:24:11,919 Speaker 1: doing at members of Congress. Okay, you're congressman, you're underselling yourself. 459 00:24:11,960 --> 00:24:15,959 Speaker 1: You're a former narcotics prosecutor on one of the toughest 460 00:24:16,000 --> 00:24:18,720 Speaker 1: speeds in the country. This before you took over at 461 00:24:18,720 --> 00:24:21,359 Speaker 1: the fifth District Congressman. I want to get you on 462 00:24:21,400 --> 00:24:25,040 Speaker 1: the same page as Leon Cooperman from the South Bronx 463 00:24:25,240 --> 00:24:29,280 Speaker 1: who we just spoke to. Leon says, the rules are there, 464 00:24:29,640 --> 00:24:33,000 Speaker 1: we're not affecting the rules. Why can't we get back 465 00:24:33,000 --> 00:24:36,960 Speaker 1: to securities rules on the books that get us away 466 00:24:37,000 --> 00:24:42,400 Speaker 1: from this high speed insanity. Well, because of technology, we've 467 00:24:42,400 --> 00:24:45,040 Speaker 1: got to keep up with it. In technology, social media 468 00:24:45,160 --> 00:24:47,960 Speaker 1: that makes things change, you can't leave you know, I 469 00:24:48,160 --> 00:24:50,040 Speaker 1: learned that you can't go by some of the same 470 00:24:50,119 --> 00:24:53,640 Speaker 1: rules that we had in fifteen twenty years ago because 471 00:24:53,640 --> 00:24:56,399 Speaker 1: things have changed and moved in advanced and such. So 472 00:24:56,480 --> 00:24:59,359 Speaker 1: we've got to make sure that we're staying up to date. 473 00:24:59,800 --> 00:25:02,679 Speaker 1: We of technical technological changes in the way that people 474 00:25:03,040 --> 00:25:06,920 Speaker 1: are engaging in the markets. That's how you protect investors. 475 00:25:06,960 --> 00:25:09,399 Speaker 1: So you can't just stay pack. You gotta look and 476 00:25:09,400 --> 00:25:11,720 Speaker 1: see if you're moving with the times. You know, you 477 00:25:11,880 --> 00:25:13,720 Speaker 1: said that I'm in the chair and I am a 478 00:25:13,800 --> 00:25:16,280 Speaker 1: chair the Foreign Advance Committee. The world is smaller than 479 00:25:16,280 --> 00:25:18,679 Speaker 1: what it used to be, and so therefore there's different 480 00:25:18,680 --> 00:25:20,920 Speaker 1: things that you gotta do today that you might have 481 00:25:20,960 --> 00:25:24,879 Speaker 1: done differently twenty years ago. Uh, so we've got to 482 00:25:24,920 --> 00:25:27,600 Speaker 1: look at these things and try to stay abreass. Well, 483 00:25:27,640 --> 00:25:29,520 Speaker 1: let's talk about what you want to do today. Then 484 00:25:29,760 --> 00:25:32,760 Speaker 1: who are you looking forward to question NK. Well, I'm 485 00:25:32,800 --> 00:25:36,080 Speaker 1: looking at you know, to talk about whether or not 486 00:25:36,480 --> 00:25:40,119 Speaker 1: the potential there's any conflicts of interest, whether or not 487 00:25:40,200 --> 00:25:44,479 Speaker 1: there was any particially harmful hedge fund practices or you know, 488 00:25:44,760 --> 00:25:47,440 Speaker 1: as I said, and how social media is on our 489 00:25:47,480 --> 00:25:52,200 Speaker 1: market and accessibility to public information. Uh that that's important. Uh, 490 00:25:52,400 --> 00:25:55,439 Speaker 1: the operation of trading apps like robin Hood and the 491 00:25:55,520 --> 00:25:59,920 Speaker 1: impact on retail investors, that becomes important. So I want 492 00:26:00,080 --> 00:26:03,159 Speaker 1: making ask some questions in that regards to try to 493 00:26:03,200 --> 00:26:06,560 Speaker 1: see what those answers are. When I look at, for example, 494 00:26:07,240 --> 00:26:10,000 Speaker 1: robin Hood, you know, whether they had a liquidity problem 495 00:26:10,160 --> 00:26:11,919 Speaker 1: or not. I know that there was an issue that 496 00:26:12,000 --> 00:26:14,560 Speaker 1: came up in this past December, and you know, and 497 00:26:14,920 --> 00:26:17,639 Speaker 1: it's important. I mean, you're using robin Hood as an 498 00:26:17,680 --> 00:26:21,520 Speaker 1: example Number one. I like what they are trying to 499 00:26:21,600 --> 00:26:24,040 Speaker 1: do in the sense that they're trying to get people 500 00:26:24,600 --> 00:26:27,199 Speaker 1: who are the little guys into the market so that 501 00:26:27,240 --> 00:26:29,480 Speaker 1: they have an opportunity to try to get in the 502 00:26:29,520 --> 00:26:32,280 Speaker 1: market and and and and create wealth for themselves because 503 00:26:32,280 --> 00:26:35,280 Speaker 1: I'm for take for something, to try to make sure 504 00:26:35,320 --> 00:26:37,480 Speaker 1: that we create wealth. But at the same time, i 505 00:26:37,520 --> 00:26:41,199 Speaker 1: want to make sure they protected give me for breaking in. 506 00:26:41,240 --> 00:26:42,959 Speaker 1: We just have about a minute left, and I'm wondering 507 00:26:43,000 --> 00:26:45,440 Speaker 1: from your perspective, some people have said Robin Hood could 508 00:26:45,480 --> 00:26:48,040 Speaker 1: do their job better if settlement times were shorter. We 509 00:26:48,080 --> 00:26:50,199 Speaker 1: do live in a technological world, so why should it 510 00:26:50,240 --> 00:26:54,160 Speaker 1: take three days for basic trades to settle? Perhaps two 511 00:26:54,240 --> 00:26:56,920 Speaker 1: days or one day? Even this creates that gap that 512 00:26:57,000 --> 00:27:00,080 Speaker 1: was the problem for Robin Hood. Do you endure spending 513 00:27:00,160 --> 00:27:03,160 Speaker 1: the millions of dollars will be required to increase settlement 514 00:27:03,200 --> 00:27:07,119 Speaker 1: times and decrease these gaps. Well, I'm looking at it. 515 00:27:07,160 --> 00:27:09,120 Speaker 1: I mean, we went from T three to T two, 516 00:27:09,480 --> 00:27:11,800 Speaker 1: and some have recommended us that we look at T one. 517 00:27:12,400 --> 00:27:14,520 Speaker 1: We go to to one day. So that's something that 518 00:27:14,560 --> 00:27:17,919 Speaker 1: I want to, you know, another area of questioning, another 519 00:27:18,280 --> 00:27:21,840 Speaker 1: probing that we can do. I'm my I'm my ears 520 00:27:21,840 --> 00:27:24,479 Speaker 1: are all open, uh, and so that I can make 521 00:27:24,520 --> 00:27:27,680 Speaker 1: a determination in that regard. I'm not ruling anything out 522 00:27:27,760 --> 00:27:30,159 Speaker 1: or anything in. I'm here to learn, and only what 523 00:27:30,320 --> 00:27:33,159 Speaker 1: you learn is by asking questions. Let's roll this in. 524 00:27:33,240 --> 00:27:35,160 Speaker 1: Can we catch up in a couple of days after 525 00:27:35,200 --> 00:27:38,280 Speaker 1: this hearing, maybe Monday, maybe tomorrow. I'd love to do that. Congressman, 526 00:27:38,320 --> 00:27:41,040 Speaker 1: thank you, Correct rems That of New York, Thank you, sir, 527 00:27:41,280 --> 00:27:43,320 Speaker 1: thank you. Looking forward to the hearing. This is the 528 00:27:43,320 --> 00:27:48,000 Speaker 1: Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays 529 00:27:48,040 --> 00:27:51,520 Speaker 1: from seven to ten am Eastern. I'm Bloomberg Radio and 530 00:27:51,600 --> 00:27:55,879 Speaker 1: I'm Bloomberg Television each day from six to nine am 531 00:27:55,920 --> 00:27:59,760 Speaker 1: for insight from the best in economics, finance, investment, and 532 00:27:59,760 --> 00:28:06,320 Speaker 1: in national relations. And subscribe to the Surveillance podcast on Apple, podcast, SoundCloud, 533 00:28:06,480 --> 00:28:10,080 Speaker 1: Bloomberg dot com, and of course, on the terminal. I'm 534 00:28:10,119 --> 00:28:12,760 Speaker 1: Tom keene In. This is Bloomberg.