1 00:00:00,240 --> 00:00:03,480 Speaker 1: Runt you by Bank of America Mary Lynch with virtual 2 00:00:03,560 --> 00:00:09,360 Speaker 1: reality Virtually everything will change. Discover opportunities in a transforming 3 00:00:09,360 --> 00:00:14,440 Speaker 1: world VI of a mL dot Com slash VR, Mary Lynch, 4 00:00:14,520 --> 00:00:28,120 Speaker 1: Pierced Fenner and Smith Incorporated. Ye, Welcome to the Bloomberg 5 00:00:28,160 --> 00:00:32,360 Speaker 1: Surveillance Podcast. I'm Tom Keene with David Gura. Daily we 6 00:00:32,440 --> 00:00:36,080 Speaker 1: bring you insight from the best of economics, finance, investment, 7 00:00:36,120 --> 00:00:42,160 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 8 00:00:42,280 --> 00:00:50,400 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Robert 9 00:00:50,400 --> 00:00:53,760 Speaker 1: Sinch with us with Amer's pierpot. We were distracted by 10 00:00:53,760 --> 00:00:57,040 Speaker 1: Morgan Stanley. Let's go back to simply dollar dynamics. A 11 00:00:57,120 --> 00:01:00,320 Speaker 1: number of people said, it's just about a week dollar. Um, 12 00:01:00,480 --> 00:01:03,600 Speaker 1: can you bet either way on dollar right now? You know, 13 00:01:03,720 --> 00:01:06,320 Speaker 1: we've been a little more optimistic on the dollar and uh, 14 00:01:06,319 --> 00:01:08,280 Speaker 1: and obviously we've been wrong. And I think a lot 15 00:01:08,319 --> 00:01:11,880 Speaker 1: of that has been shifting expectations and data coming out 16 00:01:11,920 --> 00:01:14,839 Speaker 1: of the U. S side. So I think in that context, yes, 17 00:01:14,920 --> 00:01:18,440 Speaker 1: this is a weak dollar. Um, it's weak pretty much 18 00:01:18,480 --> 00:01:21,600 Speaker 1: across the board. Uh. Maybe it's in a in a 19 00:01:21,680 --> 00:01:24,720 Speaker 1: tie with the British pound because that's a weak relative 20 00:01:24,720 --> 00:01:29,119 Speaker 1: currency also. But clearly, UM, you know, the markets don't 21 00:01:29,160 --> 00:01:32,480 Speaker 1: like uncertainty, and there is a lot of uncertainty in 22 00:01:32,480 --> 00:01:34,760 Speaker 1: the US environment right now, and a lot of it 23 00:01:34,800 --> 00:01:37,840 Speaker 1: emanates from the political side. UH. And also probably a 24 00:01:37,840 --> 00:01:40,399 Speaker 1: little bit of uncertainty now on the monetary side because 25 00:01:40,480 --> 00:01:45,600 Speaker 1: the inflation numbers just haven't justified continued movements by the FED, 26 00:01:45,640 --> 00:01:47,680 Speaker 1: which I think is critical for the dollar to move higher. 27 00:01:47,840 --> 00:01:49,720 Speaker 1: Always like talking to you about Japan, and I noticed 28 00:01:49,760 --> 00:01:52,080 Speaker 1: in a lot of analyst notes strategist notes this morning 29 00:01:52,080 --> 00:01:54,440 Speaker 1: talk of a death cross with dollar. Yeah, and what 30 00:01:54,480 --> 00:01:57,720 Speaker 1: are you seeing when you look at that pair? You know, 31 00:01:57,800 --> 00:02:00,240 Speaker 1: I think that of all the currency pair as you 32 00:02:00,240 --> 00:02:03,200 Speaker 1: look at, the one that historically has been most driven 33 00:02:03,240 --> 00:02:07,960 Speaker 1: by interest rate differentials is dollar yen. And clearly with 34 00:02:07,960 --> 00:02:11,119 Speaker 1: with US yields Pickley Tenure yields coming down, the yield 35 00:02:11,120 --> 00:02:14,520 Speaker 1: curve flattening here in the US, UH, you're just not 36 00:02:14,680 --> 00:02:18,639 Speaker 1: getting the impetus for that big capital outflow out of Japan. UH. 37 00:02:18,760 --> 00:02:22,520 Speaker 1: Japan does continue to run a very large current account surplus, 38 00:02:22,520 --> 00:02:25,560 Speaker 1: so you need capital flows out of Japan, and the 39 00:02:25,680 --> 00:02:29,040 Speaker 1: US interest rate dynamics just aren't justifying those flows, So 40 00:02:29,639 --> 00:02:33,240 Speaker 1: you know, the the without those capital flows, dollar yen 41 00:02:33,360 --> 00:02:37,959 Speaker 1: just continues to drip lower. ECB meeting tomorrow, I mentioned 42 00:02:38,000 --> 00:02:39,960 Speaker 1: that we're going to see that that that bank sort 43 00:02:39,960 --> 00:02:41,360 Speaker 1: of stay the stay. Of course, what are you be 44 00:02:41,360 --> 00:02:43,079 Speaker 1: listening for with Mario dragging speaks on the heels of 45 00:02:43,120 --> 00:02:47,680 Speaker 1: that meeting tomorrow? I think to see how much time 46 00:02:47,760 --> 00:02:50,480 Speaker 1: Mario Dragon can use up without really seeing anything. I 47 00:02:50,520 --> 00:02:54,760 Speaker 1: think that they're not yeah there, he is very good 48 00:02:54,760 --> 00:02:57,920 Speaker 1: at that. Yes, I don't think there's a lot of 49 00:02:58,160 --> 00:03:00,080 Speaker 1: you know, timing wise, this is a tough time for 50 00:03:00,120 --> 00:03:01,880 Speaker 1: them to have a meeting. They usually don't like to 51 00:03:01,919 --> 00:03:05,840 Speaker 1: decide anything in in uh in the summer months. In addition, 52 00:03:05,960 --> 00:03:08,400 Speaker 1: you know they're they're kind of The asset purchase program 53 00:03:08,680 --> 00:03:11,919 Speaker 1: is set through December, and I think they want to 54 00:03:11,960 --> 00:03:15,359 Speaker 1: get as much information as possible before they make any decisions. 55 00:03:16,080 --> 00:03:18,399 Speaker 1: My guess has always been that September is when they'll 56 00:03:18,440 --> 00:03:21,919 Speaker 1: make an announcement about what happens after December, and based 57 00:03:21,919 --> 00:03:24,200 Speaker 1: on what we see right now, I think they probably 58 00:03:24,280 --> 00:03:27,840 Speaker 1: have their rate of asset purchases from sixty to thirty 59 00:03:27,880 --> 00:03:29,359 Speaker 1: for the first half of next year. I want to 60 00:03:29,639 --> 00:03:32,960 Speaker 1: up the script Greg Villier just published on what we 61 00:03:33,040 --> 00:03:35,640 Speaker 1: have in Washington, and Greg has been as grim as 62 00:03:35,680 --> 00:03:38,760 Speaker 1: he's been in ten years over the last two weeks. 63 00:03:39,560 --> 00:03:42,400 Speaker 1: How does all this play into your investment world, and 64 00:03:42,440 --> 00:03:46,120 Speaker 1: particularly the debt ceiling? What's to come? The reality that 65 00:03:46,240 --> 00:03:50,800 Speaker 1: Republicans and Democrats possibly may have to do business together, 66 00:03:51,480 --> 00:03:55,440 Speaker 1: that's gotta be unstable for growth and for the markets. 67 00:03:55,480 --> 00:03:59,520 Speaker 1: It's gotta at some point filter in. Well. You know, 68 00:03:59,640 --> 00:04:04,960 Speaker 1: sometimes times a might say a common enemy brings people together. Unfortunately, 69 00:04:05,480 --> 00:04:08,160 Speaker 1: you know, the White House may now be filling that role, 70 00:04:08,560 --> 00:04:11,600 Speaker 1: um bringing it bring us to a point where Republicans 71 00:04:11,600 --> 00:04:14,400 Speaker 1: and Democrats have to agree on something. You know, the 72 00:04:14,440 --> 00:04:17,880 Speaker 1: dead ceiling is critical because I think right now the 73 00:04:17,920 --> 00:04:21,680 Speaker 1: international community did not have a lot of confidence in 74 00:04:21,839 --> 00:04:24,280 Speaker 1: US policy, and we have a memory of what happened 75 00:04:24,400 --> 00:04:26,919 Speaker 1: five years ago, four years ago, right exactly, and I 76 00:04:27,000 --> 00:04:30,960 Speaker 1: think that, Okay, if you don't reform the healthcare process, 77 00:04:31,080 --> 00:04:33,479 Speaker 1: that's one thing. If you don't get tax reformed, that's 78 00:04:33,520 --> 00:04:37,000 Speaker 1: another thing. But but if you if you can't move 79 00:04:37,040 --> 00:04:38,920 Speaker 1: forward on the debt ceiling, I think that would bring 80 00:04:38,960 --> 00:04:44,200 Speaker 1: another whole level of uncertainty surrounding US policy, US assets, 81 00:04:44,240 --> 00:04:46,640 Speaker 1: and the dollar, Bob, since thank you so much greatly, 82 00:04:46,920 --> 00:04:50,360 Speaker 1: particularly perspective on Global Wall Street and what we saw 83 00:04:50,400 --> 00:04:53,080 Speaker 1: from Morgan Stanley is warning. Mr Sinch is with the 84 00:04:53,120 --> 00:05:06,840 Speaker 1: emers pure putt the right guy at the right time. 85 00:05:06,880 --> 00:05:10,279 Speaker 1: We speak to Donald Strassheim with Mr Manusian and other 86 00:05:10,400 --> 00:05:14,160 Speaker 1: worthy speaking eight thirty issues that David, I think that's right. Yes, 87 00:05:14,279 --> 00:05:18,240 Speaker 1: we'll carry you. Sectarnians comments live here on Mr Stress, 88 00:05:18,240 --> 00:05:20,360 Speaker 1: I'm on the China watch for four hundred years. He 89 00:05:20,480 --> 00:05:23,440 Speaker 1: goes back to like the tank the Thing dynasty, or 90 00:05:23,440 --> 00:05:26,600 Speaker 1: the Hunter dynasty or something like that. Don This came 91 00:05:26,680 --> 00:05:29,200 Speaker 1: up over a beverage of my choice this weekend. Why 92 00:05:29,200 --> 00:05:32,400 Speaker 1: has there never been a hard landing? Everybody's predicted hard 93 00:05:32,480 --> 00:05:36,200 Speaker 1: landings in China for at least the past fifteen years. 94 00:05:36,560 --> 00:05:39,240 Speaker 1: We haven't gotten there yet, have we? We haven't gotten there. 95 00:05:39,320 --> 00:05:41,840 Speaker 1: I don't. I don't think we're likely too, because it's 96 00:05:41,880 --> 00:05:48,719 Speaker 1: still a command and control economy UM, and the key 97 00:05:48,760 --> 00:05:52,960 Speaker 1: to it, I think still remains that UM. The financial 98 00:05:53,040 --> 00:05:57,400 Speaker 1: sector is state run. They carved the big s E 99 00:05:57,560 --> 00:06:00,520 Speaker 1: banks out of the Mystery Finance in nineteen nighty not 100 00:06:00,640 --> 00:06:04,080 Speaker 1: to make loans to you and I or to our companies. 101 00:06:04,080 --> 00:06:06,400 Speaker 1: But to make loans to other big stated and enterprises. 102 00:06:06,880 --> 00:06:09,880 Speaker 1: They're making steel today for which there's no demand. They 103 00:06:09,920 --> 00:06:11,640 Speaker 1: either stack it up in the back lot or dump 104 00:06:11,640 --> 00:06:14,839 Speaker 1: it on the global markets. And that's part of the 105 00:06:14,880 --> 00:06:18,000 Speaker 1: issue in Washington today. Yeah, they've got this meeting today, 106 00:06:18,080 --> 00:06:20,279 Speaker 1: leadership from both countries getting together to talk about this 107 00:06:20,360 --> 00:06:23,800 Speaker 1: economic relationship. Is it possible to put North Korea aside? 108 00:06:24,200 --> 00:06:27,240 Speaker 1: And if so, what constructively can these two countries agree 109 00:06:27,240 --> 00:06:30,600 Speaker 1: on when it comes to the economy right now? Um, well, 110 00:06:31,080 --> 00:06:34,279 Speaker 1: so China wants to import a lot more high tech 111 00:06:34,320 --> 00:06:38,640 Speaker 1: products for which we think there are potentially military applications 112 00:06:38,640 --> 00:06:41,800 Speaker 1: in order when we are unwilling to do so. So 113 00:06:41,920 --> 00:06:44,440 Speaker 1: that's gonna be hard. We've got a lot of l 114 00:06:44,560 --> 00:06:47,599 Speaker 1: n G. They will buy as much as we will 115 00:06:47,680 --> 00:06:50,599 Speaker 1: sell them. I think we're over the idea that we 116 00:06:50,680 --> 00:06:56,040 Speaker 1: can't sell fossil fuels to China. Um, they're going to agree, 117 00:06:56,200 --> 00:07:00,640 Speaker 1: have already on beef exports US to China. We're good 118 00:07:00,640 --> 00:07:07,160 Speaker 1: at agriculture, they're not. So these are areas of of agreement, 119 00:07:08,000 --> 00:07:11,000 Speaker 1: but they have their own agenda and we have ours, 120 00:07:11,080 --> 00:07:14,240 Speaker 1: and they're not perfectly coincident. Looking at your note here, 121 00:07:14,280 --> 00:07:17,680 Speaker 1: you talk about the biggest risks here going forward. Uh. 122 00:07:17,680 --> 00:07:19,800 Speaker 1: And you put them down in shorthand let's read between 123 00:07:19,800 --> 00:07:22,280 Speaker 1: the lines a little bit. Here you say precipitous, thoughtless 124 00:07:22,280 --> 00:07:26,240 Speaker 1: actions and misinterpretation. Uh. I can't help but think of 125 00:07:26,240 --> 00:07:28,240 Speaker 1: that tweet that the President fired off a few weeks ago, 126 00:07:28,800 --> 00:07:31,440 Speaker 1: UH visa v. North Korea, talking about how we had 127 00:07:31,440 --> 00:07:33,760 Speaker 1: to try with with China and didn't it didn't work out. 128 00:07:34,400 --> 00:07:36,480 Speaker 1: What's your sense of the strength of this relationship? The 129 00:07:36,480 --> 00:07:38,440 Speaker 1: President said at mar Lago he was committed to this 130 00:07:38,480 --> 00:07:41,360 Speaker 1: new friendship he had with his Chinese counterpart. Do you 131 00:07:41,400 --> 00:07:43,520 Speaker 1: get the sense that he and his administration investing in 132 00:07:43,520 --> 00:07:48,760 Speaker 1: that relationship. Now, this is like President bush Um look 133 00:07:49,200 --> 00:07:53,520 Speaker 1: having a his first meeting with Putin and saying, I 134 00:07:53,520 --> 00:07:57,160 Speaker 1: I could see his soul through his eyes. So the 135 00:07:57,240 --> 00:08:01,080 Speaker 1: mar Lago meeting was a useful get together. First meeting 136 00:08:01,160 --> 00:08:04,640 Speaker 1: is not a time in which you make a deal. Uh. 137 00:08:04,640 --> 00:08:07,600 Speaker 1: They talked to each other, that's fine. They came up 138 00:08:07,640 --> 00:08:11,520 Speaker 1: with this idea, well, let's have a second hundred days. 139 00:08:11,560 --> 00:08:13,160 Speaker 1: It was a basically at the end of the first 140 00:08:13,240 --> 00:08:18,800 Speaker 1: hundred days and um. And so that's the comprehensive economic 141 00:08:18,840 --> 00:08:24,560 Speaker 1: dial orgue dialogue is happening today. Um, but there's no 142 00:08:24,680 --> 00:08:29,560 Speaker 1: great relationship there. And I do not believe that Washington 143 00:08:29,840 --> 00:08:32,160 Speaker 1: is going to get what it wants out of China, 144 00:08:32,600 --> 00:08:38,040 Speaker 1: which is for China to strangle economically North Korea to 145 00:08:39,000 --> 00:08:42,120 Speaker 1: ostensibly get them to stop their nuclear and missile What 146 00:08:42,640 --> 00:08:48,840 Speaker 1: China's incentive to accommodate the requests of Navarro ross economics. 147 00:08:49,160 --> 00:08:52,720 Speaker 1: I can't figure out the motivation, the first order condition 148 00:08:53,120 --> 00:08:54,960 Speaker 1: for them to sit up straight at the table and 149 00:08:55,000 --> 00:08:58,920 Speaker 1: say we would consider this. Where where where is that? 150 00:08:59,600 --> 00:09:02,400 Speaker 1: I I quite frankly don't think there is any great 151 00:09:02,840 --> 00:09:11,240 Speaker 1: uh intersection here. Um, Washington has has its agenda very different. 152 00:09:11,720 --> 00:09:15,320 Speaker 1: We backed away, We are we Washington, Washington. The US 153 00:09:15,400 --> 00:09:20,360 Speaker 1: is now in this bilateral mindset, no more multilateral. So 154 00:09:20,400 --> 00:09:23,280 Speaker 1: it's either going to be US in China or US 155 00:09:23,320 --> 00:09:28,840 Speaker 1: and somebody else. And so TPP is dead and any 156 00:09:28,880 --> 00:09:32,720 Speaker 1: kind of multilateral is dead. I think that's uh, that's 157 00:09:32,720 --> 00:09:34,600 Speaker 1: a bad sign, not a good one. Let me rip 158 00:09:34,640 --> 00:09:36,040 Speaker 1: up the script a little bit here. Usually Tom's the 159 00:09:36,080 --> 00:09:37,560 Speaker 1: one doing that, but I'll do it this morning. And 160 00:09:37,760 --> 00:09:39,280 Speaker 1: Tom alluded to the fact that I I was in Idaho 161 00:09:39,400 --> 00:09:42,079 Speaker 1: last week for the Alman Company conference there and talked 162 00:09:42,080 --> 00:09:43,839 Speaker 1: to a number of people who are in AI and 163 00:09:43,880 --> 00:09:45,719 Speaker 1: autonomous vehicles, and a lot of them have a lot 164 00:09:45,720 --> 00:09:49,120 Speaker 1: of enthusiasm for what could happen for electric cars in 165 00:09:49,120 --> 00:09:51,600 Speaker 1: the Chinese marketplace. I know you've looked into this a 166 00:09:51,600 --> 00:09:55,000 Speaker 1: little bit as well. How transformative could that be socially, 167 00:09:55,080 --> 00:09:59,560 Speaker 1: environmentally economically to have more widespread adoption of electric vehicles 168 00:10:00,120 --> 00:10:05,560 Speaker 1: massively transformative. They are building their recharging grid if you will, 169 00:10:05,679 --> 00:10:12,120 Speaker 1: uh mechanism as fast as as they can. Uh. They're 170 00:10:12,160 --> 00:10:15,400 Speaker 1: in the lead in terms of penetration now they will 171 00:10:15,400 --> 00:10:19,560 Speaker 1: continue to be uh. They have a giant air pollution problem. 172 00:10:20,080 --> 00:10:22,280 Speaker 1: Oil is used in Shoon only really for two things, 173 00:10:22,520 --> 00:10:25,880 Speaker 1: as a petrochemical feedstock and it's a transportation fuel. If 174 00:10:25,920 --> 00:10:28,920 Speaker 1: they can knock a big share of the transportation fuel 175 00:10:28,960 --> 00:10:35,160 Speaker 1: out by going electric, and they then need to make 176 00:10:35,200 --> 00:10:43,200 Speaker 1: sure that the electricity generation is done by renewable not 177 00:10:44,040 --> 00:10:48,520 Speaker 1: by coal. And as they do that, um, this will 178 00:10:48,559 --> 00:10:52,160 Speaker 1: make a big difference. How much difference it makes in 179 00:10:52,200 --> 00:10:55,200 Speaker 1: the oil markets, I'd leave to others who are more 180 00:10:55,200 --> 00:10:57,240 Speaker 1: more oil exports. But this is gonna be a big 181 00:10:57,320 --> 00:10:59,920 Speaker 1: change to something you were talking about with regard to 182 00:11:00,000 --> 00:11:03,120 Speaker 1: military technology, telecommunications technology. A couple of years back, I 183 00:11:03,160 --> 00:11:05,319 Speaker 1: was in a conference room at a Western and Shanghai 184 00:11:05,360 --> 00:11:07,680 Speaker 1: and a guy from Huawei was there talking about his 185 00:11:07,720 --> 00:11:10,280 Speaker 1: desire to get Huawei products into the to the US, 186 00:11:10,320 --> 00:11:12,920 Speaker 1: and I was struck by how glacially that process seemed 187 00:11:12,920 --> 00:11:15,320 Speaker 1: to be moving along, but how much that company wanted 188 00:11:15,360 --> 00:11:19,080 Speaker 1: to be in this marketplace. Have concerns about back ends 189 00:11:19,080 --> 00:11:20,920 Speaker 1: and all of that stuff? Have they ebbed a little 190 00:11:20,920 --> 00:11:23,080 Speaker 1: bit with this administration? Do you sense this administration here 191 00:11:23,080 --> 00:11:26,120 Speaker 1: in the US is more willing to wag allowing Chinese 192 00:11:26,160 --> 00:11:29,920 Speaker 1: made telecommunications military products into the US. I think they 193 00:11:29,960 --> 00:11:32,400 Speaker 1: are more willing, but I think there's a price to that, 194 00:11:33,679 --> 00:11:36,560 Speaker 1: and the price to that is for some kind of 195 00:11:37,080 --> 00:11:41,480 Speaker 1: aggregate progress macero progress on the trade balance. And until 196 00:11:41,800 --> 00:11:45,640 Speaker 1: they see that, I don't think these Chinese companies have 197 00:11:45,720 --> 00:11:48,480 Speaker 1: much of a chance here. How does their steel come 198 00:11:48,520 --> 00:11:51,400 Speaker 1: into our country? I don't know. They just unloaded off 199 00:11:51,400 --> 00:11:54,400 Speaker 1: a boat in Long Beach and there it is, uh sure, 200 00:11:54,400 --> 00:11:58,280 Speaker 1: are they? Um? Uh? They export a lot of steel 201 00:11:58,720 --> 00:12:03,160 Speaker 1: around the world, actually not as much to us as 202 00:12:03,200 --> 00:12:06,680 Speaker 1: we might think, and they don't produce any specialty steel 203 00:12:06,840 --> 00:12:08,840 Speaker 1: so speak of Okay, I'm glad you mentioned that they 204 00:12:08,880 --> 00:12:12,480 Speaker 1: don't produce specialty steel. It's really basic. I get that idea. 205 00:12:12,840 --> 00:12:16,600 Speaker 1: Air Mr Nusian and Mr Ross talking about the steel 206 00:12:16,760 --> 00:12:22,160 Speaker 1: price or the unit of steel coming into America. I 207 00:12:22,200 --> 00:12:24,880 Speaker 1: think there, I think they well, I think they're mostly 208 00:12:24,920 --> 00:12:29,640 Speaker 1: talking about the volume of the unit. That's right. The stuff, 209 00:12:30,000 --> 00:12:34,160 Speaker 1: the stuff, and um so, China is the biggest steel 210 00:12:34,240 --> 00:12:39,080 Speaker 1: consumer and biggest steel producer in the world by far. 211 00:12:39,440 --> 00:12:43,800 Speaker 1: They decided in about the year two thousand, even earlier, 212 00:12:43,960 --> 00:12:46,439 Speaker 1: we're gonna use a lot of steel to builder infrastructure. 213 00:12:46,480 --> 00:12:50,160 Speaker 1: Let's make it, not buy it. And so unfortunately now 214 00:12:50,240 --> 00:12:54,160 Speaker 1: they have a far more steel capacity than they need 215 00:12:54,640 --> 00:12:56,360 Speaker 1: and we're trying to get them to shut it down. 216 00:12:56,800 --> 00:13:00,200 Speaker 1: And uh but these these stat an enterprise is there 217 00:13:00,200 --> 00:13:03,920 Speaker 1: a blooming agencies not profit maximizers? Thank you so much? 218 00:13:04,160 --> 00:13:06,319 Speaker 1: Stressed with this whatever corp I s. I just to 219 00:13:06,760 --> 00:13:16,080 Speaker 1: just really honored you could come into our studios, brunt 220 00:13:16,120 --> 00:13:19,640 Speaker 1: you by Bank of America, Mary Lynch. With virtual reality, 221 00:13:19,880 --> 00:13:25,320 Speaker 1: virtually everything will change. Discover opportunities in a transforming world, 222 00:13:25,720 --> 00:13:30,000 Speaker 1: be of a mL dot Com, slash VR, Mary Lynch, 223 00:13:30,120 --> 00:13:39,960 Speaker 1: Pierced Fenner and Smith Incorporated. Someone could always always always 224 00:13:40,000 --> 00:13:44,240 Speaker 1: talk to about the greater sprawl of American economics with 225 00:13:44,320 --> 00:13:47,640 Speaker 1: a wonderful perspective of North Dakota State and the A 226 00:13:47,720 --> 00:13:51,040 Speaker 1: and M College of Texas is Douglas Duncan. He is 227 00:13:51,040 --> 00:13:54,000 Speaker 1: the zero B S economist at Fannie May. Are you 228 00:13:54,080 --> 00:13:56,520 Speaker 1: under pressure? And he joins us in our studios which 229 00:13:56,559 --> 00:13:59,640 Speaker 1: is a great and beautiful thing. Are you under pressure 230 00:13:59,640 --> 00:14:03,400 Speaker 1: by any May to do like any kind of tone 231 00:14:03,600 --> 00:14:06,400 Speaker 1: about housing? I get this question when you're on all 232 00:14:06,440 --> 00:14:08,160 Speaker 1: the time. I don't buy it for a minute, but 233 00:14:08,880 --> 00:14:11,120 Speaker 1: now you know what they like. When I was hired 234 00:14:11,120 --> 00:14:13,480 Speaker 1: by the company, I've had a big conversation with the CEO, 235 00:14:13,600 --> 00:14:15,719 Speaker 1: Dan Moudd at that time, and I said, exactly what 236 00:14:15,800 --> 00:14:17,439 Speaker 1: do you expect me to do for you? You're gonna 237 00:14:17,559 --> 00:14:18,880 Speaker 1: hire me and pay me some money, what do you 238 00:14:18,960 --> 00:14:21,160 Speaker 1: want from me? We had a long conversation. At the 239 00:14:21,240 --> 00:14:22,920 Speaker 1: end he said, well, I guess what we needed somebody 240 00:14:22,960 --> 00:14:25,080 Speaker 1: that can call bs on us when we're reading our 241 00:14:25,160 --> 00:14:29,320 Speaker 1: own press releases. So that's I'm intended to have an 242 00:14:29,360 --> 00:14:31,200 Speaker 1: independent point of view. So the answer is knowing And 243 00:14:31,360 --> 00:14:34,160 Speaker 1: in the cheery you're in yesterday is Jonathan Miller, who's 244 00:14:34,240 --> 00:14:37,240 Speaker 1: the best appraisal guy. I know, and he says the 245 00:14:37,280 --> 00:14:40,080 Speaker 1: same thing. You say. There's no housing stock, and particularly 246 00:14:40,120 --> 00:14:44,680 Speaker 1: there's no housing stock and people that have merely mortal incomes, 247 00:14:44,760 --> 00:14:47,520 Speaker 1: the poor people making a hundred eight or two hundred 248 00:14:47,560 --> 00:14:53,120 Speaker 1: thousand a year. Where is the national policy to house 249 00:14:53,240 --> 00:14:57,600 Speaker 1: people in California, to house people forty seven miles outside 250 00:14:57,680 --> 00:15:01,480 Speaker 1: Washington who are stuck in traffic on commute hopefully listening, 251 00:15:03,960 --> 00:15:08,320 Speaker 1: Where is the housing policy for mere mortals? Yeah, it's 252 00:15:08,520 --> 00:15:11,320 Speaker 1: it's really not there. One of the things that that 253 00:15:11,840 --> 00:15:15,120 Speaker 1: we're being encouraged to do by our regulator is to 254 00:15:15,280 --> 00:15:19,760 Speaker 1: find ways which are fiscally prudent and also from an 255 00:15:19,840 --> 00:15:23,040 Speaker 1: underwriting credit prudent if there's anything that we can do 256 00:15:23,640 --> 00:15:26,480 Speaker 1: to enable credit. But I will say this, at this 257 00:15:26,560 --> 00:15:28,840 Speaker 1: point in the economic cycle, you have to be really 258 00:15:28,880 --> 00:15:32,880 Speaker 1: careful with that because with the supply shortage, if we 259 00:15:33,000 --> 00:15:36,720 Speaker 1: ease credit conditions, we could lead to a pro cyclical 260 00:15:37,400 --> 00:15:41,200 Speaker 1: rise in house prices, which in the downturn. We're talking 261 00:15:41,280 --> 00:15:46,880 Speaker 1: the distribution of square footage of where we understood. I mean, 262 00:15:46,920 --> 00:15:49,480 Speaker 1: I look at the Wall Street Journal mansion section on 263 00:15:49,640 --> 00:15:53,400 Speaker 1: Fridays is almost obscene. It's no different than Victoria's secrets 264 00:15:53,480 --> 00:15:57,880 Speaker 1: or or whatever. Where is our policy to get three 265 00:15:57,920 --> 00:16:01,640 Speaker 1: bedrooms two baths, that's somebody can afford. Yeah. Part of 266 00:16:01,640 --> 00:16:04,960 Speaker 1: the problem is is that a lot of the restrictions 267 00:16:04,960 --> 00:16:08,320 Speaker 1: on development are local, so there's not really a federal 268 00:16:08,400 --> 00:16:10,720 Speaker 1: law that you can pass. You need to attack at 269 00:16:10,800 --> 00:16:14,440 Speaker 1: jurisdiction by jurisdiction. Take for example, recently, somebody from San 270 00:16:14,480 --> 00:16:16,320 Speaker 1: Jose sent me a picture of a two bedroom, one 271 00:16:16,320 --> 00:16:20,040 Speaker 1: bathhouse that sold for one point two million. To your 272 00:16:20,080 --> 00:16:23,800 Speaker 1: point about UH, starter homes, and if you look across 273 00:16:23,880 --> 00:16:27,240 Speaker 1: every market, it's the same story. If within market you 274 00:16:27,320 --> 00:16:31,240 Speaker 1: compare low priced home pace of appreciation compared to middle 275 00:16:31,240 --> 00:16:35,680 Speaker 1: priced home compared to upper price in every jurisdiction, UH, 276 00:16:35,920 --> 00:16:39,360 Speaker 1: the low priced homes are appreciating fastest, which tells you 277 00:16:39,640 --> 00:16:41,880 Speaker 1: the demand is there for entry level but there's just 278 00:16:42,000 --> 00:16:45,200 Speaker 1: not supply. Talking duck in Fannie may here, chief economists 279 00:16:45,200 --> 00:16:47,080 Speaker 1: at Fanni Mayze await comments from the Secretary of the 280 00:16:47,080 --> 00:16:49,880 Speaker 1: Treasury Stephen Monution and from Secretary of Commerce Wilbert Ross 281 00:16:49,880 --> 00:16:51,800 Speaker 1: as well. We'll bring you those live when they take 282 00:16:51,840 --> 00:16:55,160 Speaker 1: place in Washington. At that US trying to comprehensive economic dialect, 283 00:16:55,200 --> 00:16:56,840 Speaker 1: Doc ducan. Let me ask you about the housing starts 284 00:16:56,920 --> 00:17:00,080 Speaker 1: numbers that divid delG Dice just mentioned. What import do 285 00:17:00,080 --> 00:17:01,240 Speaker 1: you give them? What do they tell you about the 286 00:17:01,240 --> 00:17:03,120 Speaker 1: health of the U S housing market? Well, first of all, 287 00:17:03,120 --> 00:17:06,160 Speaker 1: they're right on what our forecast is. It's that's right 288 00:17:06,160 --> 00:17:08,720 Speaker 1: where we expect this year to be. Uh. That's two 289 00:17:08,800 --> 00:17:12,280 Speaker 1: hundred and fifty to three hundred and fifty thousand housing starts, 290 00:17:12,400 --> 00:17:16,359 Speaker 1: less than what demographics suggests we should be building. And 291 00:17:16,400 --> 00:17:19,639 Speaker 1: that ignores the catch up in household formation from the 292 00:17:19,800 --> 00:17:22,240 Speaker 1: very low levels during the middle of the crisis. So 293 00:17:22,920 --> 00:17:25,240 Speaker 1: just to get back to normal, we need to see 294 00:17:25,920 --> 00:17:29,959 Speaker 1: a construction rise. So that number doesn't do that. So 295 00:17:30,080 --> 00:17:34,720 Speaker 1: I expect to see strong house price appreciation continue. The 296 00:17:35,320 --> 00:17:40,240 Speaker 1: trick here is the Feds tightening late cycle. Uh, you 297 00:17:40,280 --> 00:17:45,480 Speaker 1: see some slowing and economic activity. What happens if inflation 298 00:17:45,560 --> 00:17:47,320 Speaker 1: numbers don't come to where the Fed wants to go 299 00:17:47,400 --> 00:17:50,600 Speaker 1: and they start shrinking their portfolio and they continue to 300 00:17:50,640 --> 00:17:54,399 Speaker 1: tighten and you tip over. Actually housing would do pretty 301 00:17:54,400 --> 00:17:57,040 Speaker 1: well in that environment because what would happen is demand 302 00:17:57,040 --> 00:17:59,320 Speaker 1: would slow some, so the pace of price appreciation with 303 00:17:59,480 --> 00:18:02,879 Speaker 1: slow right, would not rise, and so housing could actually 304 00:18:02,920 --> 00:18:05,960 Speaker 1: be a support in a mild recession. How much rates 305 00:18:05,960 --> 00:18:07,800 Speaker 1: anxiety is there out there as we hear the FED 306 00:18:07,840 --> 00:18:10,159 Speaker 1: talk about raising rates for those who are considering or 307 00:18:10,200 --> 00:18:12,600 Speaker 1: buying homes. How much worrior concern is there do you 308 00:18:12,680 --> 00:18:15,240 Speaker 1: to detect in terms of sentiment about that. Yeah, it's 309 00:18:15,240 --> 00:18:18,040 Speaker 1: only on the refive side. And frankly, with all the 310 00:18:18,080 --> 00:18:21,520 Speaker 1: policy induced refinances that we've had, there's really not a 311 00:18:21,560 --> 00:18:25,920 Speaker 1: lot of of demand for that forward, so we see 312 00:18:25,920 --> 00:18:30,919 Speaker 1: the refi pieces dropping off. Actually, the existing coupons, that is, 313 00:18:31,000 --> 00:18:33,240 Speaker 1: interest rates on mortgages out there to refinance are in 314 00:18:33,320 --> 00:18:35,800 Speaker 1: a very narrow band because rates have been for so 315 00:18:36,040 --> 00:18:39,600 Speaker 1: long low so long. In order to get a refinance boom, 316 00:18:39,680 --> 00:18:43,280 Speaker 1: you'd have to get the tenure treasury under about one 317 00:18:43,320 --> 00:18:46,040 Speaker 1: in a quarter, which we don't certainly don't see that 318 00:18:46,119 --> 00:18:49,399 Speaker 1: unless there was a real serious recession. If it goes 319 00:18:49,520 --> 00:18:53,480 Speaker 1: above two and a half, then I'd probably see a 320 00:18:53,480 --> 00:18:56,800 Speaker 1: big drop off. Infest Duck Duncan joining in our studios 321 00:18:56,880 --> 00:19:01,159 Speaker 1: with Fannie may Uh their chief economist, Docton, let me 322 00:19:01,200 --> 00:19:03,520 Speaker 1: ask you just about what you're seeing regionally. You keep 323 00:19:03,840 --> 00:19:06,000 Speaker 1: a good watch on the country as a whole. How 324 00:19:06,119 --> 00:19:08,840 Speaker 1: much of the housing terrain is shifting where we seeing growth, 325 00:19:08,920 --> 00:19:11,120 Speaker 1: but parts of the country we've seen growth in well, 326 00:19:11,160 --> 00:19:14,359 Speaker 1: there's no no question. It is a very much a 327 00:19:14,400 --> 00:19:19,200 Speaker 1: regional issue. And my earlier comment about the potential recession, 328 00:19:19,359 --> 00:19:22,520 Speaker 1: we would see that as a regional event. One of 329 00:19:22,560 --> 00:19:24,520 Speaker 1: the things that we're seeing is, for example, in the 330 00:19:24,560 --> 00:19:27,879 Speaker 1: San Francisco area, the the high end house prices is 331 00:19:27,920 --> 00:19:31,440 Speaker 1: actually coming down, so you've you've sort of seen the 332 00:19:31,520 --> 00:19:33,359 Speaker 1: top of that market come out, and I think some 333 00:19:33,440 --> 00:19:36,320 Speaker 1: of the similar things maybe in New York, UH, where 334 00:19:36,400 --> 00:19:38,560 Speaker 1: the top end of the market is starting to come down. 335 00:19:38,880 --> 00:19:42,359 Speaker 1: A question there is when the FED starts to remove liquidity, 336 00:19:43,119 --> 00:19:46,040 Speaker 1: is they're going to be an impact on say the 337 00:19:46,119 --> 00:19:50,879 Speaker 1: venture capital space, will and will you see some reduction 338 00:19:51,040 --> 00:19:53,600 Speaker 1: in liquidity available to some of those firms that might 339 00:19:53,680 --> 00:19:56,560 Speaker 1: play out in an employment space. So I think that's 340 00:19:56,600 --> 00:20:01,840 Speaker 1: one of the things to think about. Um uh. Overall, 341 00:20:02,000 --> 00:20:04,640 Speaker 1: you have a lot of structural shift taking place in retail, 342 00:20:04,720 --> 00:20:07,680 Speaker 1: which is actually leading to at the margin, some shifts 343 00:20:07,960 --> 00:20:11,040 Speaker 1: to places which can be distribution centers. I flew out 344 00:20:11,080 --> 00:20:12,720 Speaker 1: to the Midwest and one of the places that we 345 00:20:12,840 --> 00:20:17,879 Speaker 1: flew overhead these huge warehouses which are actually regional distribution 346 00:20:17,960 --> 00:20:20,480 Speaker 1: points for people like Amazon in places like that. So 347 00:20:20,600 --> 00:20:24,240 Speaker 1: you're seeing in the industrial property area, you're seeing some 348 00:20:24,440 --> 00:20:28,440 Speaker 1: shifts in valuation by different kinds of properties because of 349 00:20:28,840 --> 00:20:31,520 Speaker 1: some of the structural shifts taken place in in retail. 350 00:20:31,960 --> 00:20:34,399 Speaker 1: So I think you'll and in those places where the 351 00:20:34,440 --> 00:20:37,440 Speaker 1: distribution centers are often more affordable, and so you're seeing 352 00:20:37,480 --> 00:20:42,000 Speaker 1: some job arrangement and housing changes in those spaces. It's 353 00:20:42,200 --> 00:20:44,200 Speaker 1: it's good fortune to have you here. We've got China 354 00:20:44,280 --> 00:20:47,600 Speaker 1: talking right now with the Chinese official speaking and perhaps 355 00:20:47,680 --> 00:20:51,280 Speaker 1: Secretary Ross were wandered by here in a minute, Um 356 00:20:51,480 --> 00:20:53,399 Speaker 1: dug Duncan you grew up with a fabric of the 357 00:20:53,440 --> 00:20:56,159 Speaker 1: Midwest upon you north Dakota State down to Texas, A 358 00:20:56,280 --> 00:21:01,080 Speaker 1: and M and had huge agricultural read and moves a 359 00:21:01,200 --> 00:21:05,760 Speaker 1: lot of product abroad. To me, it's almost simplistic. In 360 00:21:05,960 --> 00:21:09,520 Speaker 1: Washington and Washington they almost think like food comes in 361 00:21:09,640 --> 00:21:12,879 Speaker 1: saran wrap out of the produce section and whole foods 362 00:21:13,000 --> 00:21:18,119 Speaker 1: or you know whatever the Wegmans whatever. I mean. Export 363 00:21:18,280 --> 00:21:23,520 Speaker 1: of agriculture is still fundamental to a huge body of 364 00:21:23,600 --> 00:21:26,119 Speaker 1: this country. Yeah, it's something on the order of our 365 00:21:26,200 --> 00:21:30,960 Speaker 1: exports are agricultural nature there's the whole question of trade 366 00:21:31,040 --> 00:21:35,040 Speaker 1: and how we structure trade is UM is a pretty 367 00:21:35,280 --> 00:21:39,560 Speaker 1: critical issue for a US economic activity, not just an agriculture. 368 00:21:39,640 --> 00:21:41,680 Speaker 1: But as an example, I had one of my vice 369 00:21:41,760 --> 00:21:46,560 Speaker 1: presidents has a two thousand uh twelve autie a six 370 00:21:46,720 --> 00:21:50,679 Speaker 1: in in the bumper. There's this you know what can 371 00:21:50,760 --> 00:21:52,680 Speaker 1: I say? He's a good VP, so I try to 372 00:21:52,760 --> 00:21:54,680 Speaker 1: keep him around. But he has a plug in his 373 00:21:54,800 --> 00:21:59,199 Speaker 1: bumper which was intended to be a camera which showed 374 00:21:59,440 --> 00:22:01,240 Speaker 1: on your day sport where you were going when you 375 00:22:01,320 --> 00:22:05,080 Speaker 1: backed up. But that camera wasn't there in two thousand 376 00:22:05,119 --> 00:22:07,960 Speaker 1: twelve because of the tsunami and nuclear milttown in Japan. 377 00:22:08,640 --> 00:22:10,840 Speaker 1: So I use that as an example because it shows 378 00:22:11,440 --> 00:22:15,600 Speaker 1: the food chain that is global, whether it's in agriculture 379 00:22:15,840 --> 00:22:18,560 Speaker 1: or whether it's in automobiles. We now have a global 380 00:22:18,640 --> 00:22:22,200 Speaker 1: supply chain, and when you start to discuss re orienting trade, 381 00:22:22,240 --> 00:22:24,959 Speaker 1: I think it was it was really signal that one 382 00:22:25,000 --> 00:22:28,320 Speaker 1: of the first people into Trump's office after became president 383 00:22:28,480 --> 00:22:31,399 Speaker 1: was the CEO of Ford Motor because they're in that 384 00:22:31,600 --> 00:22:37,360 Speaker 1: same global supply chain. So UM, no question agg policy 385 00:22:38,240 --> 00:22:42,159 Speaker 1: fundamental to economic growth because of the export components of it, 386 00:22:42,720 --> 00:22:46,000 Speaker 1: and and that relatively few people in Washington have ever 387 00:22:46,560 --> 00:22:49,480 Speaker 1: brought a chicken's life to an end to make it 388 00:22:49,600 --> 00:22:55,359 Speaker 1: show up in UH. In the grocery store, they okay, 389 00:22:57,880 --> 00:23:08,879 Speaker 1: project are great to artisanal this searing. Uh, Doug, let 390 00:23:08,920 --> 00:23:10,800 Speaker 1: me ask you about how strong the connected tissue is 391 00:23:10,800 --> 00:23:13,560 Speaker 1: between the labor economy and the housing e commy at 392 00:23:13,600 --> 00:23:16,080 Speaker 1: this time. We had Michael McKeon Boston a few weeks 393 00:23:16,080 --> 00:23:18,760 Speaker 1: ago talking about the skills gap and how even a 394 00:23:18,760 --> 00:23:21,399 Speaker 1: place like Boston with access to all these educational institutions, 395 00:23:21,480 --> 00:23:23,960 Speaker 1: is struggling to find people to do Sir John Mason, 396 00:23:24,000 --> 00:23:26,719 Speaker 1: wonder about other parts of the country as well. How 397 00:23:26,760 --> 00:23:30,040 Speaker 1: does that play into the housing market, the skill scap. Yeah, well, 398 00:23:30,119 --> 00:23:35,240 Speaker 1: you you've seen an increasing share of builders over the 399 00:23:35,359 --> 00:23:38,400 Speaker 1: last several years say they can't find skilled labor. Well, 400 00:23:39,040 --> 00:23:42,040 Speaker 1: there's two things we're on there. One is, if the 401 00:23:42,200 --> 00:23:46,440 Speaker 1: ratio of skilled to unskilled labor is fixed and everyone's 402 00:23:46,480 --> 00:23:51,680 Speaker 1: trying to increase output, then necessarily the demand and the 403 00:23:51,960 --> 00:23:56,000 Speaker 1: unsatisfied demand for skilled labor will increase. Right. Takes time 404 00:23:56,040 --> 00:23:58,159 Speaker 1: to build those skills, So that's the first thing. The 405 00:23:58,280 --> 00:24:01,920 Speaker 1: second thing is we don't incourage people to go into 406 00:24:02,040 --> 00:24:06,159 Speaker 1: some of the trades which are productive. It's almost a stigma. 407 00:24:06,200 --> 00:24:09,520 Speaker 1: If you're not going to the college of choice, it's 408 00:24:09,560 --> 00:24:12,159 Speaker 1: a stigma to you. And so to some degree that 409 00:24:12,280 --> 00:24:15,040 Speaker 1: those are those are jobs that are reasonably compensated. If 410 00:24:15,040 --> 00:24:18,040 Speaker 1: you look at the real wage of skilled labor in 411 00:24:18,600 --> 00:24:22,120 Speaker 1: UH construction, it's been rising and it's back above where 412 00:24:22,119 --> 00:24:25,399 Speaker 1: it was at the peak before the crisis. So there's 413 00:24:25,560 --> 00:24:28,840 Speaker 1: you know, there's no question that that that is an issue. 414 00:24:29,119 --> 00:24:30,920 Speaker 1: And then in the final minutes we got left with you, 415 00:24:31,040 --> 00:24:34,320 Speaker 1: what's in the oxygen and the arid college station economics? 416 00:24:34,800 --> 00:24:37,600 Speaker 1: I mean out of Phil Graham and in Mr hensling 417 00:24:37,800 --> 00:24:40,760 Speaker 1: House Financial Services Committee, they want to turn the Fed. 418 00:24:41,240 --> 00:24:43,360 Speaker 1: Mr Hansling wants to turn the Fed on its ear. 419 00:24:43,720 --> 00:24:46,520 Speaker 1: What is it about A and M graduate school economics 420 00:24:46,920 --> 00:24:49,240 Speaker 1: that makes him on the edge of commies for Washington. 421 00:24:50,920 --> 00:24:54,520 Speaker 1: That's funny. Well, there's no question, uh that Texas is 422 00:24:54,600 --> 00:24:59,119 Speaker 1: a free market state. College Station is way over college station. 423 00:24:59,160 --> 00:25:02,080 Speaker 1: I think it is the largest student body and a 424 00:25:02,119 --> 00:25:05,239 Speaker 1: public university in the country that voted majority Republican. When 425 00:25:05,280 --> 00:25:08,440 Speaker 1: I was there, it was the Reagan election and the 426 00:25:08,480 --> 00:25:11,879 Speaker 1: students voted for Reagan. So very it's very much a 427 00:25:11,960 --> 00:25:14,280 Speaker 1: free market kind of an orientation. I will say this 428 00:25:14,400 --> 00:25:18,080 Speaker 1: about the FED. The fact that they chose to enter 429 00:25:19,119 --> 00:25:22,960 Speaker 1: to put in their portfolio assets from a particular sector 430 00:25:23,720 --> 00:25:26,960 Speaker 1: is part of the reason that they're getting political pressure 431 00:25:27,440 --> 00:25:31,479 Speaker 1: because they they advantage the housing sector by buying mortgage 432 00:25:31,520 --> 00:25:34,359 Speaker 1: backed securities. So that is part of their political problem 433 00:25:34,400 --> 00:25:36,600 Speaker 1: in the in the DC market. Don't be a stranger. 434 00:25:38,040 --> 00:25:39,720 Speaker 1: Where are you based? I mean, are you based in 435 00:25:40,160 --> 00:25:42,840 Speaker 1: my offices? And what force you to move to Washington? 436 00:25:43,080 --> 00:25:46,240 Speaker 1: They did? But I fly outside the Beltway a lot. 437 00:25:46,320 --> 00:25:47,960 Speaker 1: Do you have to leave your cowboy boots at the 438 00:25:48,040 --> 00:25:51,840 Speaker 1: front door. People who say that don't understand cowboy boots. 439 00:25:54,240 --> 00:25:57,920 Speaker 1: I have Lucuez, I have Tony Lamas, I have I 440 00:25:58,000 --> 00:26:00,240 Speaker 1: have four different brands. David Gerry, you did know I 441 00:26:00,320 --> 00:26:04,840 Speaker 1: had a pair of those old two toned Tonys today 442 00:26:04,960 --> 00:26:10,440 Speaker 1: and the Luke Casey low heels. Yeah, the low heels 443 00:26:10,480 --> 00:26:12,520 Speaker 1: for office where no, the low heels so you don't 444 00:26:12,560 --> 00:26:16,240 Speaker 1: trip over him with a guitar cable, which is the reality. 445 00:26:16,440 --> 00:26:19,120 Speaker 1: Doug duncan, thank you so much, greatly appreciate it. Never 446 00:26:19,480 --> 00:26:21,280 Speaker 1: and every wonderful day have you here? He is with 447 00:26:21,400 --> 00:26:25,280 Speaker 1: Fannie May and give this is what surveillance is about, folks. 448 00:26:25,640 --> 00:26:29,640 Speaker 1: John Miller one day appraising year abode, and then Doug 449 00:26:29,720 --> 00:26:45,000 Speaker 1: Duncan from sixty feet on the next day, David Girt 450 00:26:45,080 --> 00:26:47,760 Speaker 1: and Tom Keen Bloomberg surveillance now for a generous amount 451 00:26:47,800 --> 00:26:50,520 Speaker 1: of time. One of my favorite, Jared Bernstein, joins us. 452 00:26:50,560 --> 00:26:54,240 Speaker 1: He's with a senate, senior fellow, ancient fellow, grizzled fellow 453 00:26:54,280 --> 00:26:57,879 Speaker 1: at the Center on Budget and Policy Administration. Let me 454 00:26:57,920 --> 00:26:59,720 Speaker 1: cut to the chase, folks, this is the liberal that 455 00:26:59,800 --> 00:27:02,840 Speaker 1: can servatives must read Jared Bernstein, of course, with his 456 00:27:02,960 --> 00:27:06,720 Speaker 1: public service and advising Vice President Biden, his view of 457 00:27:06,880 --> 00:27:10,040 Speaker 1: liberal and Democrat politics, but also with a careful and 458 00:27:10,160 --> 00:27:14,119 Speaker 1: respectful understanding of the middle terrain. Jaredy, is there a 459 00:27:14,160 --> 00:27:17,680 Speaker 1: middle terrain in our political economics now or as we 460 00:27:17,800 --> 00:27:21,080 Speaker 1: as polarized as it seems, Well, there isn't middle term. 461 00:27:21,160 --> 00:27:23,520 Speaker 1: There is a middle terrain, but it's awfully hard to 462 00:27:23,640 --> 00:27:28,440 Speaker 1: find given the polarization. And you're absolutely right. Absence that 463 00:27:29,320 --> 00:27:33,359 Speaker 1: middle ground, it's been very hard to move anything. And 464 00:27:33,520 --> 00:27:36,640 Speaker 1: I think way too many of our our businesses are 465 00:27:36,760 --> 00:27:41,000 Speaker 1: stuck with a level of policy uncertainty that is really 466 00:27:41,040 --> 00:27:43,000 Speaker 1: pretty damage. I want to cut to the chase because 467 00:27:43,040 --> 00:27:45,000 Speaker 1: the time we've got you here in our next section 468 00:27:45,440 --> 00:27:48,399 Speaker 1: as well, what is going to be the new Democrat 469 00:27:48,560 --> 00:27:52,200 Speaker 1: Party message? I know it's premature progressives and you know 470 00:27:52,359 --> 00:27:55,520 Speaker 1: Secretary Clinton did this. Secretary Clinton did forget about that? 471 00:27:56,240 --> 00:28:01,320 Speaker 1: What is but what's the economic part? Where are they 472 00:28:01,400 --> 00:28:06,879 Speaker 1: going economically to win again? Well, my my answer to 473 00:28:07,000 --> 00:28:11,040 Speaker 1: that would be that the messages, uh, those of you 474 00:28:11,200 --> 00:28:15,040 Speaker 1: who have been left behind by globalization and inequality, by 475 00:28:15,119 --> 00:28:18,600 Speaker 1: technological change. Uh. President Trump said he would help you, 476 00:28:18,840 --> 00:28:21,600 Speaker 1: but he's really not going to we will. I think 477 00:28:21,680 --> 00:28:25,080 Speaker 1: that's probably the message. Where's the we will versus a 478 00:28:25,160 --> 00:28:29,040 Speaker 1: bunch of East and left coasts, highly educated progressives that 479 00:28:29,160 --> 00:28:32,480 Speaker 1: have lost touch with a core democratic instituency. Well so 480 00:28:32,640 --> 00:28:35,680 Speaker 1: there there's the problem with the way the question you've 481 00:28:35,760 --> 00:28:37,640 Speaker 1: tied up, which is that you know, you asked what's 482 00:28:37,680 --> 00:28:39,800 Speaker 1: going to be the Democratic message? As if there's sort 483 00:28:39,840 --> 00:28:44,040 Speaker 1: of this unified Democratic party. I think that the group, 484 00:28:44,120 --> 00:28:48,680 Speaker 1: the kind of elite Democrat establishment really took a hit 485 00:28:48,800 --> 00:28:51,200 Speaker 1: in the last election, and there's a movement within the 486 00:28:51,280 --> 00:28:53,680 Speaker 1: party to suggest that if we can't help the folks 487 00:28:53,680 --> 00:28:56,920 Speaker 1: who have been left behind by economic change, then I'm 488 00:28:57,080 --> 00:28:59,840 Speaker 1: not sure we really can call ourselves democrats. Remember, going 489 00:29:00,040 --> 00:29:02,080 Speaker 1: to the election, Jarry, there was a lot of conversation 490 00:29:02,160 --> 00:29:04,120 Speaker 1: about how the Republican Party was going to need to 491 00:29:04,160 --> 00:29:06,120 Speaker 1: do a post mortem after November the eighth, and then, 492 00:29:06,160 --> 00:29:07,760 Speaker 1: of course the outcome was what it was in the 493 00:29:07,800 --> 00:29:10,840 Speaker 1: same conversation was happening about the Democratic Party? Is that 494 00:29:10,960 --> 00:29:13,600 Speaker 1: conversation happening, Has it happened in Washington, d c. And 495 00:29:13,880 --> 00:29:16,600 Speaker 1: And where is the leadership on that conversation. Who's going 496 00:29:16,640 --> 00:29:19,920 Speaker 1: to determine the future of the Democratic Party. My sense 497 00:29:20,000 --> 00:29:23,040 Speaker 1: is that it's not happening enough. It's been almost too 498 00:29:23,120 --> 00:29:26,560 Speaker 1: easy for Democrats to unify around the message that Donald 499 00:29:26,600 --> 00:29:30,120 Speaker 1: Trump is really very problematic as a president, and particularly 500 00:29:30,560 --> 00:29:33,080 Speaker 1: uh in not really helping the people who he was 501 00:29:33,160 --> 00:29:36,120 Speaker 1: elected to help. That that's an important message. I don't 502 00:29:36,160 --> 00:29:39,000 Speaker 1: want to disparage it. But at the same time, I 503 00:29:39,120 --> 00:29:41,280 Speaker 1: think there has to be a positive message of the 504 00:29:41,360 --> 00:29:43,520 Speaker 1: type that I suggested earlier, and I don't know that 505 00:29:43,600 --> 00:29:46,080 Speaker 1: there's enough caalescing around that. You got a piece in 506 00:29:46,120 --> 00:29:48,360 Speaker 1: the Post this morning, the Washington Post this morning, a 507 00:29:48,480 --> 00:29:50,560 Speaker 1: letter to the President. You're taken your pen to paper 508 00:29:50,600 --> 00:29:52,880 Speaker 1: to write the president with some suggestions about how he 509 00:29:52,960 --> 00:29:55,600 Speaker 1: can write the ship. What's the first, the most paramount 510 00:29:55,640 --> 00:29:58,160 Speaker 1: suggestion that you make. Well, first of all, it's it's 511 00:29:58,200 --> 00:30:01,480 Speaker 1: it's from the other Jared. That's me. You know, there's 512 00:30:01,480 --> 00:30:03,400 Speaker 1: a different Jared up there he's talking to. But I 513 00:30:03,440 --> 00:30:05,480 Speaker 1: think he should talk to me. And what I said 514 00:30:05,560 --> 00:30:08,520 Speaker 1: is he should really surprise everybody and come out and say, look, 515 00:30:08,840 --> 00:30:11,840 Speaker 1: Obamacare is certainly not where I would have started, but 516 00:30:11,960 --> 00:30:14,480 Speaker 1: it's what we're stuck with. And you know, my job 517 00:30:14,640 --> 00:30:16,480 Speaker 1: is to deliver on the promise that I made to 518 00:30:16,560 --> 00:30:20,600 Speaker 1: people of comprehensive affordable coverage. That is very much the 519 00:30:20,680 --> 00:30:23,400 Speaker 1: promise he made. It's certainly not what the Republicans offered 520 00:30:23,480 --> 00:30:27,360 Speaker 1: up and he should form a bipartisan commission with Democrats 521 00:30:27,440 --> 00:30:31,800 Speaker 1: from both and Republicans from both chambers, a scientist figure 522 00:30:31,800 --> 00:30:33,640 Speaker 1: out how to get majority votes in the House and 523 00:30:33,720 --> 00:30:37,040 Speaker 1: filibuster proof votes in the Senate to stabilize the insurance 524 00:30:37,320 --> 00:30:41,600 Speaker 1: UH industry and the policy uncertainty that I discussed earlier. 525 00:30:42,320 --> 00:30:44,760 Speaker 1: Should get to our next section, Jaredy to keep people 526 00:30:44,880 --> 00:30:48,240 Speaker 1: around here, a really really important question. Can we do 527 00:30:48,400 --> 00:30:54,840 Speaker 1: fiscal economics and give up budget neutrality? You know, the 528 00:30:55,320 --> 00:30:59,280 Speaker 1: fiscal discussion has been really one of the most misleading 529 00:30:59,360 --> 00:31:01,800 Speaker 1: and miss guy it of all, because there continue to 530 00:31:01,920 --> 00:31:05,440 Speaker 1: be budgets put forth that, if anything, are going to 531 00:31:05,720 --> 00:31:10,880 Speaker 1: destabilize our fiscal accounts, oftentimes with imaginary growth projections that 532 00:31:11,080 --> 00:31:14,480 Speaker 1: simply aren't going to materialize, and no plan b when 533 00:31:14,560 --> 00:31:17,440 Speaker 1: we don't achieve three or four percent crows. So that's 534 00:31:17,440 --> 00:31:20,640 Speaker 1: an area where I think we need much more, uh 535 00:31:21,240 --> 00:31:23,720 Speaker 1: much much more thinking and work. Let's come back and 536 00:31:23,800 --> 00:31:27,360 Speaker 1: do thinking and work with Jared Bernstein on this. The 537 00:31:27,480 --> 00:31:30,840 Speaker 1: Center on Budget and Policy Priorities really looking forward to 538 00:31:30,960 --> 00:31:34,920 Speaker 1: that in honor of McCormick's taking our French is mustard 539 00:31:35,240 --> 00:31:37,160 Speaker 1: mustard to catch up on a hot dog. What does 540 00:31:37,200 --> 00:31:40,400 Speaker 1: the Bernstein house do. I'm sixty one years old. That's 541 00:31:40,480 --> 00:31:44,920 Speaker 1: that's mustard, right, I mean, thank you, thank you, okay, 542 00:31:45,440 --> 00:31:48,000 Speaker 1: And Frank's hot sauce is a staple in my house. 543 00:31:48,040 --> 00:31:49,600 Speaker 1: I don't I don't know that an egg has been 544 00:31:49,640 --> 00:31:51,719 Speaker 1: eaten in this house in ten years without Frank's hot 545 00:31:52,080 --> 00:31:54,360 Speaker 1: I will go out and make an acquisition today in 546 00:31:54,520 --> 00:31:58,520 Speaker 1: Frank's hot sauce. Clearly I'm missing I'm missing something here. 547 00:31:58,840 --> 00:32:03,360 Speaker 1: Jared um, active Vice President Biden in your public service 548 00:32:03,520 --> 00:32:07,920 Speaker 1: with him, he had an acute understanding of the legislative process. 549 00:32:08,320 --> 00:32:12,200 Speaker 1: Are we prepared for tax reform given the process that 550 00:32:12,320 --> 00:32:17,040 Speaker 1: you see in place? Well, not tax reform, No, I 551 00:32:17,120 --> 00:32:19,560 Speaker 1: think when when you're listeners, and I know you talk 552 00:32:19,600 --> 00:32:21,720 Speaker 1: about this a lot, so they know what we're talking about. 553 00:32:22,320 --> 00:32:25,440 Speaker 1: When you're listeners here tax reform, they probably think of 554 00:32:25,520 --> 00:32:29,440 Speaker 1: a comprehensive overhaul of a system, particularly on the corporate side, 555 00:32:29,480 --> 00:32:32,040 Speaker 1: that's really pretty much a hot mess. Now we're we're 556 00:32:32,120 --> 00:32:33,480 Speaker 1: what we're going to see at the end of the day, 557 00:32:33,480 --> 00:32:36,160 Speaker 1: if anything, are going to be tax cuts uh and 558 00:32:36,240 --> 00:32:39,160 Speaker 1: again unpaid for. So we get back to that fiscal 559 00:32:39,240 --> 00:32:43,120 Speaker 1: problem I mentioned earlier. Probably more likely something on the 560 00:32:43,200 --> 00:32:46,000 Speaker 1: corporate side than the individual side. But based on budget rules, 561 00:32:46,040 --> 00:32:47,920 Speaker 1: it's not going to be bipartisan. It's going to be 562 00:32:47,960 --> 00:32:50,720 Speaker 1: Republicans by themselves. And that means there's going to have 563 00:32:50,800 --> 00:32:52,840 Speaker 1: to be a sunset built into the thing, kind of 564 00:32:52,960 --> 00:32:55,360 Speaker 1: like what Bush two did. So that's what I think 565 00:32:55,400 --> 00:32:59,800 Speaker 1: we might be looking at. What's the what's the appetite for, 566 00:33:00,400 --> 00:33:02,920 Speaker 1: you know, a fuller version of tax reform? Are you? 567 00:33:03,000 --> 00:33:05,080 Speaker 1: Are you one who believes that progress could have been 568 00:33:05,080 --> 00:33:06,840 Speaker 1: made if this were started earlier, if it were perhaps 569 00:33:06,880 --> 00:33:10,200 Speaker 1: the conversation that preceded conversation about healthcare REFORMIA, it would 570 00:33:10,240 --> 00:33:12,720 Speaker 1: have had to be a completely different conversation. Let me 571 00:33:12,840 --> 00:33:16,520 Speaker 1: very simply explain to my tax quote reform always founders 572 00:33:16,560 --> 00:33:19,960 Speaker 1: in this town because tax reform simply means lowering the 573 00:33:20,080 --> 00:33:22,360 Speaker 1: rates and broadening the base. Well, when you broaden the base, 574 00:33:22,440 --> 00:33:25,560 Speaker 1: you've got to close loopholes. And remember, you know, my 575 00:33:25,720 --> 00:33:28,840 Speaker 1: loophole is your favorite job creation program that you pay 576 00:33:28,920 --> 00:33:31,880 Speaker 1: lobbies hundreds of thousands of millions of dollars to protect. 577 00:33:32,200 --> 00:33:34,680 Speaker 1: So unless you're willing to do the legwork and work 578 00:33:34,760 --> 00:33:37,160 Speaker 1: with the industries, work with the lobbyists, work with those 579 00:33:37,200 --> 00:33:41,320 Speaker 1: who will resist their loopholes being closed, their tax expenditures, 580 00:33:41,360 --> 00:33:44,520 Speaker 1: their favored aspects of the code, you're never going to 581 00:33:44,600 --> 00:33:47,280 Speaker 1: get to real reform. Tom. You don't know this, but 582 00:33:47,320 --> 00:33:49,120 Speaker 1: when I was a rookie report, I would call Jared 583 00:33:49,200 --> 00:33:50,880 Speaker 1: up and we got the jobs report to ask him 584 00:33:50,920 --> 00:33:54,000 Speaker 1: what he saw in that that document, and you use 585 00:33:54,120 --> 00:33:56,280 Speaker 1: that in the pieces that I was. Let me ask 586 00:33:56,320 --> 00:33:58,320 Speaker 1: you what you're looking at lately at Jared, we talked 587 00:33:58,320 --> 00:34:00,719 Speaker 1: about the top line number. We dig deep to uh 588 00:34:00,920 --> 00:34:02,920 Speaker 1: to various points of interest within the job sports. What 589 00:34:03,200 --> 00:34:05,160 Speaker 1: what are you seeing now? Of course, there's the conversation, 590 00:34:05,240 --> 00:34:08,480 Speaker 1: the ongoing conversation about wage growth or the lack thereof. 591 00:34:08,560 --> 00:34:11,560 Speaker 1: What are the bright spots or the deficits as you 592 00:34:11,640 --> 00:34:13,879 Speaker 1: see them in the job supports that we've been seeing lightly, Well, 593 00:34:13,920 --> 00:34:16,360 Speaker 1: you hit on a really important one. I do the 594 00:34:16,520 --> 00:34:20,080 Speaker 1: job market is closing in on full employment and the 595 00:34:20,160 --> 00:34:24,319 Speaker 1: unemployment rate, while it probably is biased down somewhat by 596 00:34:24,400 --> 00:34:28,439 Speaker 1: the fact that there's still some slack in labor force participation. 597 00:34:29,480 --> 00:34:31,480 Speaker 1: A non trivial part of that declient has to do 598 00:34:31,560 --> 00:34:33,719 Speaker 1: with retirement. But still, if you look at the prime age, 599 00:34:33,760 --> 00:34:36,719 Speaker 1: it's there, uh, and so you would expect there to 600 00:34:36,800 --> 00:34:39,880 Speaker 1: be more wage pressure than than there is. And that's that, 601 00:34:40,080 --> 00:34:42,080 Speaker 1: I think is the one outstanding point. And from a 602 00:34:42,160 --> 00:34:46,560 Speaker 1: macroeconomic sense, if the vast majority of wage earners, I mean, 603 00:34:46,600 --> 00:34:49,960 Speaker 1: let's face it, most people don't finance their consumption out 604 00:34:50,000 --> 00:34:52,680 Speaker 1: of their stock portfolios. It's out of their paycheck. And 605 00:34:53,040 --> 00:34:56,839 Speaker 1: even with relatively low inflation, if if wage growth kind 606 00:34:56,880 --> 00:34:59,719 Speaker 1: of stagnates it somewhere around you know, to two point 607 00:34:59,760 --> 00:35:02,160 Speaker 1: five percent, I think it's gonna be hard to fuel 608 00:35:02,320 --> 00:35:07,560 Speaker 1: much in terms of consumption going forward. Are there? Are there? You? Okay? 609 00:35:07,680 --> 00:35:12,040 Speaker 1: I'm okay. You know, I think what's your policy prescription 610 00:35:12,080 --> 00:35:14,759 Speaker 1: for for getting wage growth? Hi? What can Washington do 611 00:35:14,880 --> 00:35:17,880 Speaker 1: to to elevate that? Well, there's this group in Washington 612 00:35:17,920 --> 00:35:19,840 Speaker 1: called the Federal Reserve, and I think they have a 613 00:35:19,920 --> 00:35:22,279 Speaker 1: really important role to play in that regard. And I'm 614 00:35:22,320 --> 00:35:25,160 Speaker 1: not saying that the you know, they should never engage 615 00:35:25,200 --> 00:35:27,880 Speaker 1: in any sort of tightening or quote normalization as they 616 00:35:27,960 --> 00:35:30,480 Speaker 1: put it, but I do think given the lack of 617 00:35:30,600 --> 00:35:34,400 Speaker 1: inflationary pressure and the fact that really our understanding of 618 00:35:34,520 --> 00:35:38,320 Speaker 1: what the full employment rate is has a huge confidence 619 00:35:38,360 --> 00:35:40,359 Speaker 1: interval around it, I think the best thing the Fed 620 00:35:40,480 --> 00:35:43,239 Speaker 1: can do is let the labor market run hot for 621 00:35:43,239 --> 00:35:44,800 Speaker 1: a while, and I think that will in and of 622 00:35:44,920 --> 00:35:47,239 Speaker 1: itself create more wage pressure. In the time we got 623 00:35:47,280 --> 00:35:49,560 Speaker 1: left with you, Dr Brinstein, I want to really look 624 00:35:49,600 --> 00:35:53,960 Speaker 1: at the budget. In the ballet towards September, your leader, 625 00:35:54,080 --> 00:35:57,320 Speaker 1: Mr Greenstein, Robert Greenstein uh at Center and Budget and 626 00:35:57,320 --> 00:35:59,640 Speaker 1: Policy Priorities, really takes a harsh and we know he's 627 00:35:59,640 --> 00:36:01,680 Speaker 1: going to do that. He's died in the world liberal. 628 00:36:01,760 --> 00:36:05,200 Speaker 1: I get all that. I looked at CBO Executive Summary 629 00:36:05,840 --> 00:36:10,120 Speaker 1: and I don't understand how those budget cuts get made. 630 00:36:10,640 --> 00:36:14,960 Speaker 1: Are they a fiction or can there actually be a 631 00:36:15,160 --> 00:36:18,600 Speaker 1: committee debate in the House to cut whatever part of 632 00:36:18,640 --> 00:36:23,920 Speaker 1: the budget x percent? If they cuts that are being 633 00:36:24,040 --> 00:36:27,640 Speaker 1: proposed are really unrealistic. And so when I look at 634 00:36:27,680 --> 00:36:30,200 Speaker 1: these budget documents like the resolution put out by the 635 00:36:30,239 --> 00:36:33,400 Speaker 1: House yesterday, and they and they have seven hundred billion 636 00:36:33,480 --> 00:36:36,600 Speaker 1: in cuts and something called improper payments. Well, you know 637 00:36:36,680 --> 00:36:39,160 Speaker 1: that the Trump administration put about a hundred and fifty 638 00:36:39,239 --> 00:36:42,080 Speaker 1: billion in their budget and CBO said, it's not realistic, 639 00:36:42,160 --> 00:36:44,799 Speaker 1: it's not going to happen. So then the House goes 640 00:36:44,880 --> 00:36:47,719 Speaker 1: and pluses that up by four or five x U. 641 00:36:48,120 --> 00:36:51,320 Speaker 1: These are nonfible numbers. And in a given Department of 642 00:36:51,360 --> 00:36:54,920 Speaker 1: Agriculture budget, Okay, we can have austerity and have it 643 00:36:55,040 --> 00:36:58,360 Speaker 1: lift by one percent versus nominal GDP of four percent, 644 00:36:58,760 --> 00:37:01,560 Speaker 1: or we can flatline it, which is a ra rare occurrence. Folks, 645 00:37:02,080 --> 00:37:07,400 Speaker 1: How do you cut an actual budget that affects American 646 00:37:07,520 --> 00:37:11,800 Speaker 1: citizens and their good representatives. Well, I think that you 647 00:37:11,920 --> 00:37:15,120 Speaker 1: can do it from forty feet by going on about wasting. 648 00:37:15,760 --> 00:37:17,880 Speaker 1: But can you do it in committee? No, you can't. 649 00:37:17,960 --> 00:37:20,080 Speaker 1: I mean and and and in fact that you you 650 00:37:20,239 --> 00:37:22,600 Speaker 1: you wouldn't, you wouldn't necessarily want to. I'm not saying 651 00:37:22,640 --> 00:37:25,239 Speaker 1: every dollar spent is perfect, no, but there's people down 652 00:37:25,320 --> 00:37:28,800 Speaker 1: there that want to. But the fact is that the 653 00:37:28,920 --> 00:37:32,440 Speaker 1: population is growing, inflation is growing, we have an aging population. 654 00:37:32,719 --> 00:37:35,040 Speaker 1: So the functions that we saw this in the healthcare debate, 655 00:37:35,320 --> 00:37:39,120 Speaker 1: the functions that government does are actually things that people want. 656 00:37:39,280 --> 00:37:42,200 Speaker 1: Medicaid matters, and not just to liberals, but the Republicans 657 00:37:42,239 --> 00:37:44,680 Speaker 1: and the governors. So medicaid matters. And if you go 658 00:37:44,719 --> 00:37:45,880 Speaker 1: out and you say we're going to cut it, by 659 00:37:46,760 --> 00:37:49,640 Speaker 1: guess what, people have a problem with that. So I'd 660 00:37:49,680 --> 00:37:51,880 Speaker 1: love everybody to get a little bit more realistic in 661 00:37:51,920 --> 00:37:55,400 Speaker 1: this defection. Not enough time, Jared Bernstein, David Girl will 662 00:37:55,440 --> 00:37:58,319 Speaker 1: be calling you. Just stay to get a quote at 663 00:37:58,400 --> 00:38:01,520 Speaker 1: some point. Mr Bernstein a legend in his own time. 664 00:38:01,640 --> 00:38:04,640 Speaker 1: Center and Budget and Policy Parties, David Gurrol. What gets 665 00:38:04,719 --> 00:38:09,040 Speaker 1: me going here is whatever anybody's politics, you lose so 666 00:38:09,239 --> 00:38:12,399 Speaker 1: much less political capital by just saying, look, we want 667 00:38:12,440 --> 00:38:16,400 Speaker 1: to be responsible and flatline or come a hundred basis 668 00:38:16,440 --> 00:38:19,560 Speaker 1: points under real or nominal GDP. You know the calculus 669 00:38:19,600 --> 00:38:24,080 Speaker 1: can be decided versus this draconian set, which is that's 670 00:38:24,120 --> 00:38:27,040 Speaker 1: one person's opinion. I get it, but how does it 671 00:38:27,160 --> 00:38:29,400 Speaker 1: get through a given committee. For the life of me, 672 00:38:29,920 --> 00:38:31,560 Speaker 1: I don't understands well. And I wonder if we're gonna 673 00:38:31,600 --> 00:38:33,720 Speaker 1: meet Mr Burnstein on the edge of that precarious fiscal 674 00:38:33,800 --> 00:38:36,640 Speaker 1: cliff here in a little while as well, of course, 675 00:38:36,640 --> 00:38:39,239 Speaker 1: as we near the range of the death ceiling here 676 00:38:39,239 --> 00:38:41,359 Speaker 1: at the middle of October. I believe it's the latest 677 00:38:41,400 --> 00:38:44,480 Speaker 1: testament that we've early to mid Octobers when we're gonna 678 00:38:44,600 --> 00:38:47,560 Speaker 1: watching the Spice Company from Baltimore McCormick. They buy french 679 00:38:47,680 --> 00:38:51,759 Speaker 1: Is mustard down seven percent, now down only five point 680 00:38:51,840 --> 00:38:55,080 Speaker 1: six percent, railing off the bottom here down five point 681 00:38:55,160 --> 00:38:57,879 Speaker 1: six percent. Frank's red Hot. Never eating an egg without 682 00:38:57,880 --> 00:38:59,960 Speaker 1: Frank's Redhot. I'm gonna we'll bring a bottle into myrow. 683 00:39:00,000 --> 00:39:02,960 Speaker 1: Get an informed listener, say all it is is Tabasco 684 00:39:03,120 --> 00:39:07,440 Speaker 1: for people. Thank you for that email, greatly, greatly appreciate it. 685 00:39:16,320 --> 00:39:20,360 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 686 00:39:20,520 --> 00:39:25,880 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 687 00:39:25,960 --> 00:39:29,480 Speaker 1: platform you prefer. I'm on Twitter at Tom Keene. David 688 00:39:29,560 --> 00:39:33,759 Speaker 1: Gura is at David Gura. Before the podcast, you could 689 00:39:33,760 --> 00:39:48,600 Speaker 1: always catch us worldwide. I'm Bloomberg Radio runt You by 690 00:39:48,880 --> 00:39:53,160 Speaker 1: Bank of America Mary Lynch. With virtual reality, virtually everything 691 00:39:53,239 --> 00:39:58,120 Speaker 1: will change. Discover opportunities in a transforming world. Be of 692 00:39:58,239 --> 00:40:02,160 Speaker 1: a mL dot com so I h v R. Mary Lynch, 693 00:40:02,239 --> 00:40:04,560 Speaker 1: Pierced Fenner and Smith Incorporated