Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along
Speaker 1: with Jonathan Ferrell and Lisa Brownowitz. Daily we bring you
Speaker 1: insight from the best and economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com,
Speaker 1: and of course, on the Bloomberg terminal. Right now, Leon
Speaker 1: Cooperman joins us. He's with Omega, their family office, the chairman,
Speaker 1: the CEO. What he really is is a kid out
Speaker 1: of Hunter College who got a job at Xerox a
Speaker 1: million years ago and stumbled through Colombia into Golden Sacks
Speaker 1: where he uh found acclaim fame and fortune. He was
Speaker 1: a regular and institutional Investors Awards ceremonies for years and
Speaker 1: years and years. Mr Cooperman joins us this morning, Leon,
Speaker 1: why is this short squeeze different than the forty two
Speaker 1: others you've known since you joined Golden Sachs. Well, the
Speaker 1: market is very different because things were happening much more quickly. Uh,
Speaker 1: there's just no stabilizers. When I came to Wall Street
Speaker 1: fifty five years ago, the brokers firms traded stock fifty
Speaker 1: cents to share. The vocal rule didn't exist. They had
Speaker 1: a center to stabilize and go against the trend that
Speaker 1: doesn't exist anymore. Uh. You know the vibue used to
Speaker 1: be New York Stock Exchange. Any presented the volumes well board,
Speaker 1: the specialists don't play a role for someone unexplained reason. Uh,
Speaker 1: the SEC eliminated the uptick rule with two thousand and
Speaker 1: seven or something. Very well, okay, and I don't want
Speaker 1: to interrupt, but that's right where I wanted to go. Okay.
Speaker 1: Arthur Levitt and others full disclosure. Mr Levitt's a Bloomberg
Speaker 1: board member. Arthur Levitt others took us from quarter point
Speaker 1: responsibility down to the rush of the decimalization, and then
Speaker 1: we had the uptick rule changed. Explain why the uptick
Speaker 1: rule was so important, Well, he had, it's the village
Speaker 1: of the market. You need an uptiket just couldn't not.
Speaker 1: I think the elimination of the up to group gave
Speaker 1: rise to these high frequency you know, out instators, and
Speaker 1: they know nothing about value, they know everything about price,
Speaker 1: so they basically they exacerbate the trend. When the market's
Speaker 1: going up, they accelerate the up and moves going down
Speaker 1: the accelerated down mood and I think the SEC should
Speaker 1: be They've been very mindful of the course of trading,
Speaker 1: but they have not looked at the lowering the course
Speaker 1: of trading, what impact has had in the market. And
Speaker 1: I think that we should try to slow things down
Speaker 1: a little and reinstate the up to group. Charles Cancer
Speaker 1: of New Berger Berman was on the other day and
Speaker 1: made very clear his break is a responsible short interest.
Speaker 1: Leon Cooperman is one path here to restrict the size
Speaker 1: of the short interest, to not only protect investors, but
Speaker 1: just just to put a break on all that high
Speaker 1: speed market. No, I would say that we should just
Speaker 1: follow the rules that existence. I mean, if you're short
Speaker 1: something you have to secure, you're a ball, okay, if
Speaker 1: you if you if you can't have a barrow, you
Speaker 1: shouldn't be short. So the extent that somebody shouldn't one
Speaker 1: that represented the market capital company, it is because the
Speaker 1: rules have not been followed. Liam was anything to a
Speaker 1: maya from the events of several weeks ago, anything to admire, Uh, well,
Speaker 1: the system has survived. But you know, no, I would
Speaker 1: say it's not. Look, the Wall Street ethics has been
Speaker 1: in a decline for quite some time, many many years ago.
Speaker 1: I confronted the then head of the New York Stock Exchange.
Speaker 1: I asked why they allowed these algorithmic guys to co
Speaker 1: locate their computers next to New York Stocker Change, to
Speaker 1: give them a split second advance over the public. Just
Speaker 1: doesn't seem to be right. And his response was, well,
Speaker 1: we don't do it, somebody else will. Okay. The sale
Speaker 1: of order flow raises questions in terms of whether the
Speaker 1: public's orders are being abused. But I think that there
Speaker 1: there's a lot of things yet she could be doing.
Speaker 1: And the last thing we need is Elizabeth Warren or
Speaker 1: Bernie Sands or AOC getting involved setting policy. You know,
Speaker 1: the rules and the regulations exist there in place, just
Speaker 1: follow them. Well. Actually, know, Leon, a lot of people
Speaker 1: have characterized this as the wealthy versus the poor, David
Speaker 1: versus Goliath. How and healthful do you think that is?
Speaker 1: Right now? I think that's all blowning, you know, uh,
Speaker 1: this persistent attack of the wealthy. I mean, Melvin lost
Speaker 1: a lot of money. I suspect that he's a very
Speaker 1: wealthy guy, the fellow that runs Melbourne Capital, So so
Speaker 1: I don't think he's a battling against the wealthy and
Speaker 1: the poor. I think in America as a country became
Speaker 1: great because poor people want to inspire to become wealthy,
Speaker 1: not because they basically had a negative view of the wealthy.
Speaker 1: And uh, you know, how do you become wealthy in America?
Speaker 1: You become wealthy in America you should develop a practice
Speaker 1: service and somebody needs when you get richly rewarded and
Speaker 1: the people who had to have their head screwed oncorrectly
Speaker 1: then shared that success others less fortunate. Is the world
Speaker 1: better off and worse off because of Bill Gauge, Jeff
Speaker 1: Bezos and host of other people. You know, I've said
Speaker 1: on your program other programs, ken Lyn Bell, who go
Speaker 1: in the finest human beings I've ever met? Okay Well,
Speaker 1: Ken State, Bernie Marcus, Uh you know, I think he
Speaker 1: raised him something like h fifty families put up two
Speaker 1: billion dollars East they raised ten million dollars, and I
Speaker 1: don't know. The enterprise today is probably two d and
Speaker 1: seventy billion dollars. They have several thousand employees and a millionaires.
Speaker 1: Bernie and Kendon given back billions of dollars to society.
Speaker 1: That's the American dream. Well, how does the FED factor
Speaker 1: into the American dream, because the American dream increasingly has
Speaker 1: been people with assets have continued to see their wealth
Speaker 1: grow dramatically under the Fed's regime, versus those who don't
Speaker 1: have assets, which have missed out. Look, this goes back.
Speaker 1: We have had some you know, I'm not a big
Speaker 1: bull in the market presently. I understand exactly what's going
Speaker 1: on basically, but we've had the government for warming some
Speaker 1: type of providing some type of life support to the
Speaker 1: economy and the markets. There's two thousand and eight, two
Speaker 1: thousand eight Mr Rnanke figured out that common was going
Speaker 1: down the toilet. He had to reverse that. He said,
Speaker 1: the best way to reverse that is to create wealth.
Speaker 1: You know, the so called forate Goo effect. Five percent
Speaker 1: of wealth changes workers with the consumption. And the best
Speaker 1: way to get wealth that we get the stock market up.
Speaker 1: The trouble with it is of stocks how much wanting
Speaker 1: to set the people? Uh, not that they did the
Speaker 1: wrong thing. They did the right thing, okay, and then
Speaker 1: they spent the next ten years taking away the wealth
Speaker 1: that was created from the wealthy by creating an environment
Speaker 1: where there's no returnment savings. So if you were letter
Speaker 1: proved in life in two thousand and eight, and you
Speaker 1: didn't get caught in a big way and you had savings.
Speaker 1: If you tax adjust and inflation adjust, you returned savings negative. Okay,
Speaker 1: And now they want to get another bite of the apple.
Speaker 1: We are following. It's very clear what's going on in
Speaker 1: the country right now. Unemployment pre COVID was like five
Speaker 1: point seven million people on the poor in that balloon
Speaker 1: over twenty three million. That's now down to about a
Speaker 1: bit over ten million. And they're conducting monetary and fiscal policy,
Speaker 1: not saying it wrong, but there's a pricey page for
Speaker 1: this long term. They're conducting policy with the idea of
Speaker 1: getting the unemployment back to where it was pre COVID. Okay,
Speaker 1: and everything they're doing so just look at the world.
Speaker 1: We've injected one trillion dollars more in stimulus in the
Speaker 1: way of transfer payments. Is the economy incoming has been lost?
Speaker 1: Plus we're talking about another trillion nine Okay. We took
Speaker 1: two and fourty five years from this country to go
Speaker 1: from zero national debt to twenty one or two trillion.
Speaker 1: That's going up three trillion dollars a year. That's not
Speaker 1: a sustainable situation. It's a price repeat for that, Leon,
Speaker 1: What is the consequence? Is it runaway inflation? Is it
Speaker 1: markets that are going to get overheated. I don't know
Speaker 1: the answer because the inflation and inflation. I just know
Speaker 1: it's not gonna be a good end. And I don't
Speaker 1: know what it ends, but it's not gonna be a
Speaker 1: good end to the game. It's not gonna be a
Speaker 1: good end. Just think about this way. If you speak
Speaker 1: to a hundred economists, and Mr Keane is a damn
Speaker 1: good economists of his own, you speak to a hundred
Speaker 1: columnists today Ust and what is the trend? Real growth
Speaker 1: in the economy? Trend real growth? Then we said, tis
Speaker 1: potention to grow in real terms about two percent one
Speaker 1: episcent proactivity fifty basis boys from labor force growth, that's
Speaker 1: two percent, and let pe sent for inflation, that's four
Speaker 1: percent nominal GDP growth. Okay, this year the economy is
Speaker 1: expected to grow six percent. It's growing three in real terms.
Speaker 1: It's growing a three times trend. Yet we have zero
Speaker 1: interest rates. Doesn't make any sense. It's being the policy.
Speaker 1: And I resent Mr Powell in one respect, let him okay, Leon, Look,
Speaker 1: I want Leon, I want to get back just as
Speaker 1: the running out of time. I want to get back
Speaker 1: to what we're talking about here. Michael Lewis wrote a
Speaker 1: book about the flash boys. We've got to do something
Speaker 1: to get us away from the cult of high speed trading.
Speaker 1: What is your policy prescription for Mr Gensler to get
Speaker 1: us somewhere back to where Vailue is worshiped like Price
Speaker 1: the files a letter I sent to j Clinton in
Speaker 1: December recommending reinstating the uptick rule that was slow the
Speaker 1: process down. I see no downside risk to doing that,
Speaker 1: and it can control. It would basically add some stability
Speaker 1: to the system. There's no stabilizers up or down, and
Speaker 1: that's not a good thing for the markets. Who is
Speaker 1: lobbying for those people? I mean, who is representing them
Speaker 1: against people of the high speed industry, And I'm gonna
Speaker 1: say including Mr Griffin. I honestly don't know. You know,
Speaker 1: I'm nearly an old fashioned investor. I buy stocks one
Speaker 1: at a time. I'm a value guy. I buy things.
Speaker 1: What's your single bust buy right now? Farrell's gotta make
Speaker 1: some money. What's your single best buy? Complicated? But my
Speaker 1: single best idea, which should be my largest position right
Speaker 1: is a company called Legato. Legato owns somewhere between and
Speaker 1: forty megaherts and spectrum i G spectrum which got caught
Speaker 1: up at some controversy with the Department of Friends very
Speaker 1: bously objected to their spectrum used because they said interfere
Speaker 1: with the d needs complete PLODI. The FCC did a
Speaker 1: fabulous job by the chairman Pie studied this for over
Speaker 1: five years and by a five to zero by personal vote.
Speaker 1: There you go to tell you Leon, thank you. We've
Speaker 1: got to leave it there. Leon cooperm in there and
Speaker 1: make a family office Chairman and see Leon get to
Speaker 1: catch up. Got to see you again. Thank you. It
Speaker 1: would be nice John to speak to someone truly expert
Speaker 1: in the span of commodities. Young Gartman ages ago. John
Speaker 1: Farrell actually was in the pits enjoying losing money. Well,
Speaker 1: let's talk to Dennis now, not about losing money, maybe
Speaker 1: even making it. Dennis Gartman, Chairman of the University of
Speaker 1: Akrons and Downment Committee. Dennis grit to catch up with you, sir.
Speaker 1: You've heard the same conversation we've heard. Let's contribute to
Speaker 1: it and common it's he super psychile. Your thoughts now, Dennis,
Speaker 1: I think There's something going on that is very, very
Speaker 1: serious in the commodity markets. Take a look at almost
Speaker 1: any commodity that you want to look at. Look at tin,
Speaker 1: it's up dramatically. Look at copper, it's up dramatically. Look
Speaker 1: at cotton, it's up dramatically. Look at wheat, corn, soybeans
Speaker 1: up dramatically. Look at livestock prices up dramatically. Look at
Speaker 1: the cost of shipping goods up dramatically. There's something more
Speaker 1: going on than just a mere bounce from the lows.
Speaker 1: I think that the bear market that had existed for
Speaker 1: a more than a decade has ended. I think a
Speaker 1: bowl market that will probably last for a long period
Speaker 1: of time has begun. The monetary authorities around the world
Speaker 1: are sponsoring this is to become extremely expansionary. This is
Speaker 1: starting and it's not going to go away anytime soon. Dennis,
Speaker 1: I gotta rip up the script. You are absolutely definitive
Speaker 1: in the way that you stop losing money in commodities,
Speaker 1: which is a habit. It's sort of like game stop.
Speaker 1: To be honest, what is your best practice for our
Speaker 1: listeners and viewers to not lose money investing in commodities.
Speaker 1: What's the single best guardment tip. Add to winning trades
Speaker 1: and avoid doing and avoid adding to losing trades. Whatever
Speaker 1: you do. An old rule of mine, and it's a
Speaker 1: very good rule. Do more of that which is working
Speaker 1: and less of that which is not. If something is
Speaker 1: going from the lower left to the upper right and
Speaker 1: it's been working for you, add to it. If something's
Speaker 1: been going from the lower left to the upper right
Speaker 1: and you're short of it, stop doing that. So that's
Speaker 1: the simplest methodology. It's the best methodology. It's good in life,
Speaker 1: and it's good in trading. Do more of that which
Speaker 1: is working and less of that which is not. Evidently
Speaker 1: over leverage, it was about to say, evidently triple every
Speaker 1: cash is working really well for a Tom Keene. There
Speaker 1: raises a question though, this idea of the goods inflation,
Speaker 1: this idea of commodity is gaining at a time when
Speaker 1: people can't go out and have experiences in the same
Speaker 1: way because of the pandemic, and there's been a shift
Speaker 1: from spending in services to spending on goods. Is that
Speaker 1: going to last and enough of a way to keep
Speaker 1: this supercycle going as people are predicting, or could this
Speaker 1: be skewing some of what seeing currently, Dennis, as long
Speaker 1: as the monetary authorities continue to be expansionary, and it's
Speaker 1: not just a FED that is that way. It's the
Speaker 1: Bank of Candidates, the Bank of England, it's the e
Speaker 1: c B, It's the People's Bank of China, it's the
Speaker 1: people It's a Reserve Bank of Russia, the reserve banks
Speaker 1: of Australia and New Zealand. All of them are all expansionary.
Speaker 1: All of them are expanding reserves at a pace far
Speaker 1: past any reasonable expectation of GDP and population growth. So
Speaker 1: it is inflationary around the world. And this is not
Speaker 1: going to go away anytime soon. As I've said many
Speaker 1: times before and I'll continue to say in the future.
Speaker 1: This is something sponsored by the central banks and it's
Speaker 1: not going to stop. And I just want to mention folks,
Speaker 1: but Mr Gartman just mentioned there in trading strategy is
Speaker 1: called an anti Martingale strategy. This is from the Bibles
Speaker 1: of years ago when people used to lose money. Maybe
Speaker 1: with a more informed view, Dennis Garman, John Farro demands
Speaker 1: I go to the real yield. You know, the focuses
Speaker 1: on treasury, the money they have at the FED. It's
Speaker 1: gonna flood the system. Do we go to negative interest
Speaker 1: rates and money market fund and do we go to
Speaker 1: I'll call it a volatile real yield. I think what's
Speaker 1: going to happen, or what has been happening and what's
Speaker 1: going to continue to happen, is the yield curve is
Speaker 1: going to continue to widen. The back end of the curve,
Speaker 1: which is the which is the area that the Fed
Speaker 1: has very little control over, is going to continue to
Speaker 1: see higher and higher interest rates. The long bond went
Speaker 1: above two percent just this past week. It's going to
Speaker 1: go to three or four percent over the course of
Speaker 1: the next several years. But the Fed is going to
Speaker 1: continue to keep the overnight Fed funds right. They've told
Speaker 1: us this. I believe them. They're gonna keep the overnight
Speaker 1: Fed funds rate at or near zero. Can they take
Speaker 1: it to negative numbers. It's possible, I doubt it. But
Speaker 1: the important thing is to notice that the spread between
Speaker 1: the overnight Fed funds rate and the long end of
Speaker 1: the curve is going to continue to wide. And this
Speaker 1: will help the banking system and more than anybody else.
Speaker 1: But it's this is something that's predicated upon inflation continuing
Speaker 1: for a long period of time. So the Fed is
Speaker 1: not going to tighten monetary policy at the short end,
Speaker 1: but the market itself is tightening monetary policy at the
Speaker 1: long end. And that's what people have to get have
Speaker 1: to understand, and they'd be plugging that into the funance
Speaker 1: of sect of the banks have been flying. Dennis is
Speaker 1: great to catch up, Sir Dennis Galman, Chairman. I think
Speaker 1: University of akrons in down and fun James Bianco with
Speaker 1: this Bianco research, UH this morning, Jim Bianco, real simple
Speaker 1: does the carnage of the Midwest deep freeze? Does that
Speaker 1: adjust national economics? You know, you normally think it would,
Speaker 1: but given that we're already in the mode of working
Speaker 1: from home, the impact is far less than it would
Speaker 1: have been in a pre pandemic era. So a lot
Speaker 1: of people like me are hit home working and while
Speaker 1: it's snowing outside, as I talked to you, not a
Speaker 1: whole lot it's going to change with my work habits
Speaker 1: just because of the pandemic. Many people missed they recovery
Speaker 1: last year and how quickly, more specifically, how quickly the
Speaker 1: u S would recover. Are we doing that all over again? Uh?
Speaker 1: As far as missing it no, because I think a
Speaker 1: lot of people are expecting a booming recovery. If there's
Speaker 1: any thing we might be missing, the return of inflation.
Speaker 1: I've heard that, you know, Wall Street has been upping
Speaker 1: their forecast for real GDP growth, And I would just
Speaker 1: put a little finer tune on that and say, maybe
Speaker 1: it turns out to be nominal GDP growth that's gonna
Speaker 1: go up, and that more of that component is going
Speaker 1: to be inflation and a little less of that component
Speaker 1: is going to be real growth. But I don't think
Speaker 1: that there's a lot of people that are looking for
Speaker 1: the economy to turn south anytime soon, unless something comes
Speaker 1: along to break it. Markets are picking up on that.
Speaker 1: It feels like economist behind the curve. Though on this
Speaker 1: gym you speak to many market parts, hispan sound economists separately.
Speaker 1: It just feels like the economists haven't quite upgraded their
Speaker 1: forecasts yet, and the same way this market has, particularly
Speaker 1: in the bond market. Yeah, I think what they're they're
Speaker 1: being influenced by is interest rates. They're heading higher, and
Speaker 1: I think they're going to continue to head higher. But
Speaker 1: it's been a gradual grind, and so when I talk
Speaker 1: about the potential of inflation coming. I understand there's a
Speaker 1: base effect, but then after that and ray it's might
Speaker 1: continue to move higher. On inflation, the answer, or the
Speaker 1: question is why aren't they going up? Now? You've got
Speaker 1: the Federal Reserve buying a trillion and a half dollars
Speaker 1: of bonds a year, and that's probably dampening the type
Speaker 1: of move we would have x them as well. But
Speaker 1: I do think it's there, and I think that they're
Speaker 1: just economists are starting to pick up on this idea that,
Speaker 1: as Dennis Gartman said in the last hour, the supercyclist
Speaker 1: turned commodities are moving higher and inflation looks like something
Speaker 1: that is coming back that we haven't seen in about
Speaker 1: thirty years. So it's also something that's very new for
Speaker 1: a lot of people. That's actually what I was going
Speaker 1: to say, that there's been a conditioning over the years
Speaker 1: that just because the Federal Reserve is incredibly involved in
Speaker 1: markets doesn't necessarily mean that we're going to get higher inflation.
Speaker 1: I am wondering, and not to harp on this, but
Speaker 1: good inflation versus bad inflation. You know, if if the
Speaker 1: goods that you buy and everyone is buying more of
Speaker 1: them and no services or not as many services during
Speaker 1: the pandemic, and those goods are getting more expensive because
Speaker 1: of the increased demand. So the real inflation is going
Speaker 1: up faster than perhaps some of the headline E gauges
Speaker 1: is is that good do wages necessarily follow? What's your sense? Well,
Speaker 1: the two things on the goods inflation, you're not seeing
Speaker 1: it as much in the data. But matt I Glaciers
Speaker 1: brought up a good point on Twitter over the weekend.
Speaker 1: You're getting rational in go buy something at home depot
Speaker 1: or lows and it's the price is cheap and you'll
Speaker 1: get it in April. You're you know, so they're rationing
Speaker 1: out their supply as opposed to raising their prices. Well,
Speaker 1: that's a form of inflation. It's just not showing up
Speaker 1: in in the data as well too. As far as
Speaker 1: where we're gonna go from here, I think you know,
Speaker 1: when you talk about bad inflation, the question is gonna
Speaker 1: be once we reopen with all the stimulus and services
Speaker 1: start to move because a lot of them are dormant
Speaker 1: right now because of the lockdown restrictions, are we gonna
Speaker 1: see that start to move? And finally you mentioned about wages, Uh,
Speaker 1: we have already been, you know the vernacular even using
Speaker 1: we've been mailing people money. We just got done mailing
Speaker 1: them six hundred dollars. We're gonna mail them fourtellars. I
Speaker 1: understand why we're doing it. That's the American income right
Speaker 1: now is being sent to you via the government in
Speaker 1: the form of stimulus. And there's another big one coming.
Speaker 1: Don't need wage inflation, you have personal income inflation because
Speaker 1: the government is making up that difference, and that's going
Speaker 1: to lead to a big stimulus. One thing's reopen later
Speaker 1: this year. And this is the big distinction that people
Speaker 1: are pointing to. Why we're going to get inflation that's
Speaker 1: much faster than people are expecting. As economists become more
Speaker 1: accepting of this idea, how high can yields go? Well,
Speaker 1: you know that that's the that is the concern, because
Speaker 1: we have a deeply negative real yield right now. If
Speaker 1: you were to get inflation back to the Fed says
Speaker 1: that they'll tolerate two and a half percent, Okay, fine,
Speaker 1: let's use that, and then people believe that inflation is
Speaker 1: is something to stick with. We might have to move
Speaker 1: the positive yields that could get you at least to
Speaker 1: two and a half percent in the ten year note.
Speaker 1: I mean over a long period of time like the
Speaker 1: end of next year, and in this leveled b on market,
Speaker 1: that kind of move would be very unsettling. Even though
Speaker 1: you might look at it from a long history and
Speaker 1: say it's still two and a half percent. It's a
Speaker 1: very low yield. But from the perspective of the way
Speaker 1: that bonds are traded and held and especially financed through
Speaker 1: the repo market, that kind of moving yields will not
Speaker 1: will be a very difficult one for everybody to swallow. Jim,
Speaker 1: I want you to go back to your training and
Speaker 1: technical analysis. You are a CMT. How do you find
Speaker 1: the breaking of trend on the real yield? The real
Speaker 1: yield breaking of trend is going to be very difficult
Speaker 1: to find right now because it's it's been in a
Speaker 1: down trend and it really hasn't turned very much. But
Speaker 1: what I have found in looking at those charts is
Speaker 1: when it does break, it tends to move rapidly, you know.
Speaker 1: So you know, I heard John say, you know what,
Speaker 1: you know, maybe there's a little bit of a turn here,
Speaker 1: and that's inaccurate description, and then there's a little bit
Speaker 1: more of a turn and then pow, it just goes.
Speaker 1: And that's really what people are most worried out. When
Speaker 1: it comes to real yields, they won't be this gradual
Speaker 1: rise like you have with nominal yields. They could move
Speaker 1: a lot faster. Yeah, what's important to your Jim is
Speaker 1: red zone, green zone. So your experience here on two
Speaker 1: stins spread or real yield is when you go boom,
Speaker 1: you go, is boom right to a positive statistic? No,
Speaker 1: I don't think it will be to a positive statistic
Speaker 1: right away because there's a long way to go. It's
Speaker 1: almost a hundred basis points. But it will definitely break
Speaker 1: the downtrend that we've been in, and it will also
Speaker 1: be upsetting unsettling because remember, who's the biggest buyer of
Speaker 1: of real yields is a federal reserve. They own that
Speaker 1: market right now and they're buying it, you know, aggressively
Speaker 1: every day. And if that moves starts in the face
Speaker 1: of all that fed buying, you start thinking what's the
Speaker 1: private sector doing in that market selling aggressively? And that
Speaker 1: will be further unsettling for everybody. Jim, just find a
Speaker 1: one you're watching that herring lights? Yeah, I'm gonna watch
Speaker 1: the hearing. Unfortunately, I think they're missing the point. It
Speaker 1: seems like it's gonna be about justifying short sale instead
Speaker 1: of some of the things that have gone on. It's
Speaker 1: gonna be theater, but I don't know if it's gonna
Speaker 1: have much substance. Jim, isn't that always the white gonna say?
Speaker 1: You said? Jim? Research and President right now on what
Speaker 1: we will see today? Gregory Meeks joins us. He is
Speaker 1: the chairman of the House Foreign Affairs Committee. He is
Speaker 1: also a member of the House of Financial Services Committee.
Speaker 1: He's been on the watch since and for those of
Speaker 1: you truly nationwide and worldwide, you've never been more to
Speaker 1: his district as you go to jfk As. He represents
Speaker 1: the fifth of New York, which is that traffic in
Speaker 1: the new construction, the infrastructure build through the fifth construct
Speaker 1: Congressional District. Congress and Meeks, thank you so much for
Speaker 1: joining us. What do you hope to accomplish today? Take
Speaker 1: us away from the theatrics to the adult nous of
Speaker 1: Maxine Waters. What's the job one today? Listening trying to
Speaker 1: understand what in fact did take place, trying to see what,
Speaker 1: if anything that we should also have dialogue and conversation
Speaker 1: with the sec. UH. It is basically the you know
Speaker 1: the name of the subcommittee that's in charges investor protection.
Speaker 1: So as we've done on the Maxine Waters leadership previously,
Speaker 1: you know, we saw consumer protection when we had to
Speaker 1: hearing UH in regards to Wells Fargo UH. And sometimes
Speaker 1: something comes out of it. More we get ideas and
Speaker 1: thoughts and sometimes it doesn't. We want to make sure
Speaker 1: that the average everyday investor UH is UH is protected. UH.
Speaker 1: And I think that you know, I know for me,
Speaker 1: you indicated I've been in Congress since that is after
Speaker 1: me and one of the worst times of my life
Speaker 1: was in two thousand and eight with the financial crisis.
Speaker 1: And I do believe that we you know, we could
Speaker 1: have been should have something. And that's what I hope
Speaker 1: that we're doing. And we're looking UH and you know,
Speaker 1: I'm a former prosecutor also, so we're looking to see, UH,
Speaker 1: is there anything that we should be looking at and
Speaker 1: doing at members of Congress. Okay, you're congressman, you're underselling yourself.
Speaker 1: You're a former narcotics prosecutor on one of the toughest
Speaker 1: speeds in the country. This before you took over at
Speaker 1: the fifth District Congressman. I want to get you on
Speaker 1: the same page as Leon Cooperman from the South Bronx
Speaker 1: who we just spoke to. Leon says, the rules are there,
Speaker 1: we're not affecting the rules. Why can't we get back
Speaker 1: to securities rules on the books that get us away
Speaker 1: from this high speed insanity. Well, because of technology, we've
Speaker 1: got to keep up with it. In technology, social media
Speaker 1: that makes things change, you can't leave you know, I
Speaker 1: learned that you can't go by some of the same
Speaker 1: rules that we had in fifteen twenty years ago because
Speaker 1: things have changed and moved in advanced and such. So
Speaker 1: we've got to make sure that we're staying up to date.
Speaker 1: We of technical technological changes in the way that people
Speaker 1: are engaging in the markets. That's how you protect investors.
Speaker 1: So you can't just stay pack. You gotta look and
Speaker 1: see if you're moving with the times. You know, you
Speaker 1: said that I'm in the chair and I am a
Speaker 1: chair the Foreign Advance Committee. The world is smaller than
Speaker 1: what it used to be, and so therefore there's different
Speaker 1: things that you gotta do today that you might have
Speaker 1: done differently twenty years ago. Uh, so we've got to
Speaker 1: look at these things and try to stay abreass. Well,
Speaker 1: let's talk about what you want to do today. Then
Speaker 1: who are you looking forward to question NK. Well, I'm
Speaker 1: looking at you know, to talk about whether or not
Speaker 1: the potential there's any conflicts of interest, whether or not
Speaker 1: there was any particially harmful hedge fund practices or you know,
Speaker 1: as I said, and how social media is on our
Speaker 1: market and accessibility to public information. Uh that that's important. Uh,
Speaker 1: the operation of trading apps like robin Hood and the
Speaker 1: impact on retail investors, that becomes important. So I want
Speaker 1: making ask some questions in that regards to try to
Speaker 1: see what those answers are. When I look at, for example,
Speaker 1: robin Hood, you know, whether they had a liquidity problem
Speaker 1: or not. I know that there was an issue that
Speaker 1: came up in this past December, and you know, and
Speaker 1: it's important. I mean, you're using robin Hood as an
Speaker 1: example Number one. I like what they are trying to
Speaker 1: do in the sense that they're trying to get people
Speaker 1: who are the little guys into the market so that
Speaker 1: they have an opportunity to try to get in the
Speaker 1: market and and and and create wealth for themselves because
Speaker 1: I'm for take for something, to try to make sure
Speaker 1: that we create wealth. But at the same time, i
Speaker 1: want to make sure they protected give me for breaking in.
Speaker 1: We just have about a minute left, and I'm wondering
Speaker 1: from your perspective, some people have said Robin Hood could
Speaker 1: do their job better if settlement times were shorter. We
Speaker 1: do live in a technological world, so why should it
Speaker 1: take three days for basic trades to settle? Perhaps two
Speaker 1: days or one day? Even this creates that gap that
Speaker 1: was the problem for Robin Hood. Do you endure spending
Speaker 1: the millions of dollars will be required to increase settlement
Speaker 1: times and decrease these gaps. Well, I'm looking at it.
Speaker 1: I mean, we went from T three to T two,
Speaker 1: and some have recommended us that we look at T one.
Speaker 1: We go to to one day. So that's something that
Speaker 1: I want to, you know, another area of questioning, another
Speaker 1: probing that we can do. I'm my I'm my ears
Speaker 1: are all open, uh, and so that I can make
Speaker 1: a determination in that regard. I'm not ruling anything out
Speaker 1: or anything in. I'm here to learn, and only what
Speaker 1: you learn is by asking questions. Let's roll this in.
Speaker 1: Can we catch up in a couple of days after
Speaker 1: this hearing, maybe Monday, maybe tomorrow. I'd love to do that. Congressman,
Speaker 1: thank you, Correct rems That of New York, Thank you, sir,
Speaker 1: thank you. Looking forward to the hearing. This is the
Speaker 1: Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays
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Speaker 1: Tom keene In. This is Bloomberg.