Central Banks Around the World Have Overreached, Plosser Says

Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course, on the Bloomberg Good Morning everyone, David Gura and Tom came. Mr Gura on assignment in Sun Valley, Idol. How do you be scarlet? How do you be on assignment in Sun Valley Idole? Myself? Come on, you know they never say scarlet food. Please go to Idaho or no they and you know it's it's so odd. He goes for an entire week at a time in the

middle of July. It's it's all very suspicious. It's very suspicious. Scarlet food with us. If you didn't notice that, it's always a good thing. We will try to refrain. Diminished down, the hockey, diminished down, the New York Rangers discussions. There's a lot to be excited for on that front. There is two and Howard Word will be with us here in a moment. Sometimes Howard where's his New York Rangers

tie into Bloomberg surveying? Not doing it today though exactly Bluin blew what white Bluin it's British, It's it's it's British to do. We'll get to Howard Ward in a minute. We say good morning, economics, finance, investment, politics, international relations. Huge day, huge news flow out of Washington, will do that along the way. Bloomberg surveillance this morning, Howard Ward

with us, with Gabelly. And it's a wonderful time to talk to Howard Ward because he stated earlier how you're more cautious here the the elevation the multiples in such when do or are we even close to getting back to where yield is competition for dividend? Are we are? We miles away from where we go? I can make this in a bond, I can make this in a

stock um well not really. When you look at the historical numbers where you had, let's say for the last thirty years and average yield on the tenure treasury of six and now it's two point four percent. That's still in that very attractive dividend yields right around two percent. So dividend really is for people that can have the patients to buy stocks and let the dividends grow. You're probably if you can handle the f altility of stocks,

probably better offgoing the dividend route. I think that's been a major source of demand for stocks in recent years. So bonds bonny yields have a long ways to go before they really start to uh be competition for stocks. That's not to say that higher interest rates will not uh force a penalty on stocks, because I think they will. But I will say this that with all the talk about where bond yields are today, they're basically where they were in December of two thousand and fifteen when the

FED made their very first tightening measure of this cycle. So, um, we've been trading between let's say a two percent yield and a two point six percent yield ever since, and right now we're sort of in the middle of that. How are you one of those people who are worried about an unwind of the risk parity trade? Uh, specifically

in what sense well, with bonds and stocks falling. I mean, things have stabilized the last two days, but for a while last week there was a lot of talk that there is going to be this unwinding of UH risk parity trades in which stocks and bonds would fall at the same time, and there are so many lever bets on that positive rate stock correlation. Yeah, I Scarlet, I think that's a possibility, and it it certainly could happen

over a very short term. But what I do think is more likely to happen is that bond yields decline in the face of weakening economic activity, and the stock market declines um due to issues that might have to do with growing trade friction, because I think that's going to be a big issue over the next several months. UH, because the FED is also tightening. I think that's another problem in terms of policy. Trade policy is a problem headwind for stocks, Monetary policy is a headwind for stocks.

Fiscal policy is doing nothing to help stocks, and so I think the economic news deteriorates, UH bonny yields go down, not up, and the risk parity trade may they may go down. In sympathy every now and then, But but I think the primary trend for the next five percent move. Let's say in stocks, I think stocks are down UH is the next five percent move and UH and bonny yields will likely be going down with them, all right, so we'll continue to see a move into the safe

haven of bonds UM. You mentioned the economic surprise index and how the rate of surprises from the data has been coming down. There's been some research done. People have pointed out how if you look at a sitecre economic surprise index over the last seven or eight years, it bottoms around June and each of the previous six years, and this is a self reverting, self correcting mean for reverting index for the most part, and we've bounced back up.

What does that tell you, Well, we've had a little bit of a bounce after a really a three month collapse. And so if we look a little bit deeper at some of the underlying economic data, we know that auto sales are soft and production cuts have been announced for this quarter. We know housing activity has slowed. We know commercial industrial loan growth is slowing. We know credit delinquencies

are growing across the credit chain. We know retail sales have been soft, and inventory to sales ratios have been rising. We know durable goods orders, especially X defense and aircraft are soft. We know payroll growth is slowing. NIPPA profits actually declined in the press when somebody get by medications, please, NIPPA profits actually declined last quarter. They didn't rise like

S and P profits. And uh we we've we And as I mentioned earlier, trade policy is about to get I think very heated because the one hundred days that Trump gave China to negotiate a trade deal expires next week. So are we in cash? No, because you know this is this is really hard, this market time and stuff. I don't advocate it. I'm just saying that you will probably get a better entry point for stocks and and otherwise you should try to be defensively. What does that mean.

That's a great phrase. It's a famous Howard word phrase to help our our our audience. What is the tactical to do given an uber bulls caution, Well, if you want to stay in the market, you you you gravitate towards the more defensive names, the names that have lower beta, specifically lower beta, because that's been the most reliable banks metric. No,

not not the banks. The banks the bank trade has been conditioned upon rising rates and rising loan growth, and I don't think either one of those is going to pan out. So what's a lower beta defensive position. Healthcare, consumer staples, utilities would be the three primary sectors. In fact, the latest new position in my portfolio is next Era Energy, which is in electric Italy, the old Florida Power and Light.

It's the meeting. It's the leading generator of UH solar and principally when alternative energy in the United States where you're you are CEO of Growth Equities, right, Yes, So this is a business that is growing at around in total, including the regulated part, at about eight percent. And I will challenge you to find consumer staples names that are growing at eight percent. They're probably growing much less and they're priced much higher. This is fascinating. This is the

old Florida Power Light. It is back in our back on Scarlett. How did I remember this? Where you owned like six utilities and one was always FPL And this is next What separates them from Dominion or the other victims of our ute, it's their large presence in wind power and solar power. And I think it's not well known than in much of the South and central United States. Right now, without any subsidies, wind power is cheaper than

the alternatives. Can you can you book in here five year dividend growth of ten percent per year, that's a phenomenal number for for next Terra Energy, I would feel more comfortable with an eight percent dividend growth. That's yielding two point eight percent now. And UH there is a much smaller cap subsidiary that they have a big stake

and called next Era UH Energy Partners. It's about a one point two or three billion dollar MLP, and the dividend yield is higher, and the dividend growth rate is going to be tied to their growth and alternative energy, and that might be a better play for people that are really focused on the income. And you tell these four scurs you can't make money in utilities ten year track record of Florida Power and Light thirteen point one

percent per year. It's just a scarlett. You can't make money and you tie per years extraordinary, that is the cliche. And looking here at the utilities index in the SMP five hundred, price earnings eighteen point two times for next to any that took her correct. Uh, the pe is twenty two and the estimated p the and I think and again, if you go back and look at the beta, you'll probably find it's something like fifty. So Uh, it's going to give you a lot of protection. Historically has

provided a lot of protection in a down mark. It's outperformed in the last decade dominion by two fifty basis points. This is a very wonky This is almost like a pim Fox conversation. Scarlett. We've gotten into the land of fox Well on a Tuesday morning. How appropriate, right? That would be very good. Yeah, there's a lot going on this morning. We'll have much more for you, including the politics of Land State Bank rumor has it. Will have that on news as well. Features yet Futures negative to

Doubt features Negative. Seventeen, Bloomberg Business Week relaunched. I want to bring into your attention every week an issue has a different theme. Last week it was technology. Uh, the week before it was Job's a really good jobs issue as well. They'll be out with a new issue in forty eight hours. But Bloomberg Business Week we launched. I really can't say enough about it. Uh is a is a great overview of whatever their theme of the week is.

I like the thematic approach to it as well. David gurn Tom Keane, Mr Gurra on assignment in Idaho, scarlet food the short straw. We'll get here a few more minutes with Howard warding than we have to turn to an important global debate. Um, Howard, I look at the equity markets. I look at all the mumbo jumbo of Graham, Dott and Coddle and an investment finance. The bottom line is a lot of people are wrong. The certitude was it's a single digit world and we haven't had that.

Do you regress to the mean? Do you say, look, we had a double digit reality and are we going to be negative to get back to a single digit world? I don't buy that for a minute. I just can't get that defeatist. No, but Tom thinks have changed. So we got a ten percent long term compounded return on stocks by way of essentially a seven percent nominal GDP number and a three percent dividend yield. That's and and the GDP number correlated exact almost exactly to the rate

of earnings growth. And we're no longer in a nominal seven percent world. We're in a at the moment a nominal three and a half percent GDP world, and maybe we can get that to four or four and a half percent, and we have a two percent dividend yield on the SMP. So from this vantage point, the longer term returns on stocks are no longer going to be

ten percent. They're more like seven percent um. And in fact, if you now look back over the last ten years, I think that's just about exactly what we've had, although with a lot of volatility in between. So, uh, you know, and this this, this, this is part of the you know, we had for thirty years or so real g D real GDP growth of three point three percent in the US that was the trend line, and that's now closer to two. You talk about the dividends and how it's not as rich as it could be or it has

been in the past. We've seen companies, of course plowed their extra cash back into share buy backs, but that's tapered off quite a bit because prices are pretty high. And Gina Martin Adams and her team at Bloomberck Intelligence have done the research that show that the rate of buybacks has slowed down quite a bit. What are you looking for this earning season when it comes to returning

cash to shareholders? Well, I think Scarlett, it's worth mentioning that corporations went on a binge of borrowing money in the in the debt market and using the proceeds to buy back stock to the extent that their balance sheets are not nearly as secure are safe as they were prior to all this. And I think it's also worth mentioning because if there is only one metric you want to look at to ask yourself, is the stuff? How

how fairly valued or how attractive the stock market is? Uh, don't even look at earnings, but but look at the value of the entire stock market relative to GDP, and currently it's one. There's only one time in history when it's been higher, and that was in the first quarter of two thousand when it was one d and sixty seven of g d P. So having said all that, when you're looking at earnings expectations for the current quarter,

I don't think that they're going to be bad. I mean, we all know that these corporate managers are so good at managing earnings that every single quarter, seventy some percent of the earnings beat the estimates and continue to be there. That's going to continue to be the case. So I'm not so focused on that. I think the guidance could

be critical. I do expect that there will be some negative surprises on the guidance front, but in terms of the overall market, I'd be looking at the evaluation and the fact that we we typically have three five percent corrections every year and we haven't had one for the last year. We're going to rip up the script here with the Howard Ward right now, Scarlet fod with this is well for a global audience. Um I I can't begin to convey the excitement about Howard Ward and Scarlet Foods.

New York Rangers. There's a gentleman named Shatton Kirk who I first saw with the St. Louis Blues Good Morning Bloomberg, one of six one FM Boston, who was a pride

of Boston University and Howard. Before that, he was playing pond hockey just north of New York City, wasn't he well, Kevin's from New Marshall, and you know, he spent some time local boy and he wanted to come back to the Rangers, and he spent some time at the Brunswick School in Greenwich, where he played hockey with my son Chriss, and uh, it was evident from the moment that Kevin hit the ice that this young man was a very

special hockey player. And he progressed from Brunswick to the us UH Olympic or Junior Olympic programming on Arbor, spent a couple of years there before becoming a terrier at BU And Mrs Lund, quiz, this is good for your husband, isn't it? This is very good. This is very good for for the goaltenders of the New York Rangers. UM. One thing, of course that people were worried about last spring was that he signed on with the Washington Capitals and that that was our one opportunity to get him,

But of course it ended up not being. It was a tactical move on his part to get into the layoffs. And yes, Kevin wasn't Kevin was in big demand as one of the top defenseman and and an offensive defenseman at that and UH, he did not go for the top dollar. Everyone knows that he wanted to be a Ranger. He wanted to come home and play for his the team that he grew up with and so there's no doubt he took less money and he took a shorter

contract than he could have had elsewhere. I should point out, folks, for those of you that follow basketball, it's the same idea. There's a huge pressure to leave college early, and he stayed at BEU. He could have left be you early. Well, I think he left a year earlier. He left year early. But a lot of other people have to win national championship, I might add, but they leave after their freshman of

their sophtware year. He didn't do that. Hockey, it tends to be more I think the more standard situation if you are a college hockey player that Ghost Bros. You typically go after your junior Yearkay, is this a hockey talks so you'll stay around at the end of the show? Okay, very good, Howard Ward, Thank you so much. She's our expert on the New York Rangers, and we're Shuldis here today.

I can say without question this is the most important interview for all of us today across economics, finance, and politics. And no, we don't have to talk about the madness of the Beltway. David Schulkin has about eight other things to do besides serve the nation. He does that now in the tinder box known as Veterans Affairs. He is the President's Secretary of Veterans Affairs and has brought a medical, tactical approach to what we do with their veterans. Secretary,

wonderful to have you with us, uh today. I remember whatever the Politzer Prize winning article was about the scandal of Walter Reid Hospital a decade ago or whatever. We all have our horror stories of veterans affairs. You've brought a can do, solution braced approach. Give us one example of what you did day one. Well, first of all, Uh, it's good to be here. And I think that the country agrees that we're tired of reading about all the ways that we failed our veterans and it's time to

fix this. And everybody agrees on this. This is not a political debate, is it. No, this is really a bipartisan issue. And um, so we're serious about making these changes, and this is something that the President actually ran on and is committed to doing this. So we're doing a lot of things, but one of the things we're making sure is those who have healthcare needs are being seen

and being seen in a timely fashion. So we've put into place same day services and every one of our v A medical centers throughout the country for primary care and mental health, and we've also posted all of our weight times for everybody to see. I mean, they don't they scarlet. They don't do that. At the hospital up in Westchester, they don't do that. You know, it's a

it's a revolutionary idea. How bureaucratic is it? You did service at the Great Institution in Pittsburgh, you did service here, service there in general medicine, did you expect a bureaucracy of doctors and nurses saying no, no, no, we don't do it that way. Guy, Well, uh, what my experience was, I've spent my entire career in the private sector, so I came expecting it was going to be tough to make change. What I found was was that, um, what the system needed was just new ideas and needed people

to show them the way. But people want to be successful, particularly when they work in the v A. Their very mission driven, and when you show them a different way of doing things, they're very open to it. And so I have not found it to be resistant to change. Do you have the institutional support though for UH to make all these changes? You were confirmed by the Senate one zero, which is unheard of in this very partisan environment right now, What kind of support do you have

from Congress, from the executive branch. Well, I'm very fortunate that there's just great leadership in Congress. Um are chairman of our committees and our ranking members, both the Democrats and the Republicans are completely united around making the changes necessary. And so when we have our committee hearings, there's of course debate over the right approach, but in the end they get in a room, they decide what the right

decision is, and they move forward. And does it matter that you were part of the Obama administration as the Undersecretary or of Health at the Department of Veterans Affairs. Does that play into anything? Well, I think that people understand that I don't approach to this job in a political way. I approach it that this is a job that the country needs to get done, and I'm here

to get it done. I also think it does help that people understand that I haven't changed my position on what needs to happen to fix the v A. Whether I was in the administration or in the Trump administration. I think that President Trump wasn't as concerned about anything other than getting this fixed for our veterans. Veterans medicine has been a lightning rode back to the Revolutionary War.

Had to be honest, I've got ancestors has fought in this war that warn't forty years later they were trying to get a check cut from somebody like Veterans Affair. Help our audience that believes it's a money pot for anybody that wants to come get it. How is the budget integrity? Folks, we say this about the guy that were in Morristown Memorial Hospital, like a real practicing hospital. How do you handle the cash and the money so

that we know it's fair and audited. Well, I think what we've seen over the past couple of administrations is more and more money flowing into v A, and it's not necessarily translated into better service or better results. So I've been very clear, I do not believe that fixing and reforming v A is a money issue. This isn't that we need, um, you know, more funds to get

this fixed. What we need are the best practices from the private sector, and we need to modernize the system and in terms of auditing where our money is going. Right now, one of my major initiatives is to bring much more integrity to our fraud wasted abuse systems because I do believe that there are inefficiencies and areas that we do need to audit much closer to make sure

taxpayers are getting the best value. Well, speaking of modernizing the system, there are a lot of concerns for anyone who runs a huge bureaucracy about how to protect your system from cyber from hacking. What are you doing on that and how do you make the v A department hack proof or as hack proof as possible. Yeah, I wish that there was a way to be hack proof. But we have invested significantly in the last few years in cybersecurity, and we have systems in place that I

feel confident in. We essentially identify and protect against thousands of threats every day, and some of the recent threats that have hit hospitals we have been able to detect and stop. So you've you've it's been tested several times, absolutely tested every day. Your father had the courage to deal with psychiatry. I believe it forth shared and ages ago. This is a very delicate topic, the psychiatric framework of our veterans, the trauma of battle and combat. What is

the new new there? We've been fighting two wars and what I noticed, Sir, is the is the chronic nature of a year after your commitment to Afghanistan interact. What will the v A do on the mental health front to assist these people? Well, first of all, when I talk about the priorities that I have a secretary, there's only one clinical area that I talk about, and that is reducing veterans suicide. Twenty veterans a day are taking their life, which is really just a statistic that just

hard to ever get used to accepting. And so we are focused on this in a way that unlike any other problem that we have in the v A UM, no other system is doing as much for behavioral health as the v A. And having said that, we have to be doing more, and that more includes reaching out to the community, making sure that we're involving family members and others in veterans lives, making sure that they're getting access in the right treatment, but also additional research so

that we can find way is to make sure that we have more effective treatments. Obviously for those who have fought on the front lines, there's a lot of damage done to you. If you've been at the forefront of the fighting. What about from drone attacks? What kind of psychological impact does that have? Have you started to see that yet, Yes, we have UM. I believe that UM. In every war, there's a different way of experiencing conflict.

Of course, in our most recent conflicts, they have been the I E. D s that have caused not only tremendous physical damage, but significant invisible wounds and emotional damage. And so in drones it's a very similar type of emotional experience as an I E. D. You're having UH devices come out of nowhere UH and surprise attacks, and so it causes an emotional startle reaction that is very similar to what we see in post traumatic stress. You think you're visiting us today, David Schalkin Folks is the

ninth United States Secretary for veteran MR Secretary. Look forward to seeing our studios at Washington as well. David Short, Conductor Schulkin, thank you, Brunch you by Bank of America, Mary Lynch. With virtual reality, virtually everything will change, discover opportunities in a transforming world b of a mL dot Com slash VR, Mary Lynch, Pierced Fentner and Smith Incorporated. That wasn't David Gurria heard that was Scarlet Foo and I told her, if the Rangers pick up Kevin Shatton Kirk,

you have to host. We did that with Howard Ward. Thank you to Howard Ward for and I'm going to be here all week as a results resul. We talked about the Rangers and this big trade they had for Mr Schatton Kirk and so then Scarlett will stay through the which is a good thing. Mr Gurra on assignment and has it been a Gura siding Scarlet? You know what he did post on Instagram. I did spot some kale in the background. So he's he's holding true to

what he normally does. Yeah. Um, Doug Bondo with us with a Cato Institute libertarian some would say more conservative, but on an idea that that is away from the normal budget things of the Cato Institute, and that's North Korea. He's senior fellow. Uh, working a few years ago with President Reagan. That ages him right there. We're thrilled that he's with us right now. Uh, Doug, wonderful to have

you with us. What is the distinctive CATO view on how we should adapt and adjust to a unique North Korea. I think we have to kind of look for some alternatives to the current policy that we're at. I mean, the North Korea is a very problematic actor, and no one that I know of wants them to have nuclear weapons. But the reality is they want them, not because they're crazy and nubs. They want them, I think largely because they fear the US and view this is being the

best to terror possible. You know, they've looked at Afghanistan, They've looked at the Rock, They've looked at Libya, where the more market Dafi negotiates away his nuclear weapons and his missiles, and as soon as the opportunity arises, the U. S And Europe helped take him out. You know, this is a regime that's committed to moving ahead. You know, it's not at all clear that even sanctions supported by

China would necessarily stop them. We don't have any good options here for more threats we make, frankly, the more justification we give them from building unclear weapons. One of the characters of your note is you worry less about bombing Alaska or for that matter, the circle of that missile if they ever developed it would go to Ueen, Queensland in Australia. And you take a real interest in the border between North North Korea North Carolina. Help me,

Scarlet nor I stayed up for the home run. Yeah, this is your speechless after the home in Derby, Doug, I look at the China border. It's really the first order condition give us an update. As you see that river between China and North Korea, Well, the Allu is not much of a barrier. You know, the North Koreans are working harder now to stop people from going across. But what if you want Chinese support? What you have

to recognize. China looks at that and thinks, oh boy, we put sanctions on North Korea, collapses, we get five million refugees across the Yalu, we get factional fighting, we get maybe military combat, you know, we get stuff flowing across. This is not good for us. They also look at that and say, you know, isn't that nice? The US wants us to essentially give them North Korea so they can have a United Korea aligned with America and US troops on the Yalu. We went to war in nineteen fifty.

Stop that. You know, we're trying to put pressure on China without acknowledging why they view this as a security interest, and again very problematic. Unless you're willing to acknowledge what is motivating them, it's very hard to get them on our side. You just came back from North Korea as well, didn't you. That's what I was there a month ago. What did you observe. I mean, there's obviously the official version, what the Korean officials want you to see, want you

to report back on, versus what you saw in the undercurrent. Well, let's say interesting, I was there twenty five years ago. I mean peong Yang has changed a lot. I mean it's much more kind of money. Their newer buildings, has private automobiles, people have cell phones. You know, women dressed very nice. They were very plain twenty five years ago.

Men are still very plain. But you know that there are changes that suggests there's money, and to some extent that's good in the sense that it suggests they have something to lose, and the other hand, it also shows that they've done reasonably well despite the sanctions. Regime, you know, reasonably well over the years, despite you know, all of the pressure of the US has put on them. You know, the consistent message I got to that, you know, was they look at this as being you Americans who put

pressure on us, threatened us. We're doing this because we're we don't like that, and we're afraid of that. We're gonna match nuke for nuke, as they put it. And it struck me that as part of the challenge, which is, you know, they look at this as being a national security you should they don't. You know, this is a weird political system and there's one person there. It's Kim Jong un, the supreme leader. He's the guy everybody refers to,

you know. But despite that, it doesn't mean they're not rational. I mean, they're evil, but they're not crazy. And I think that's the problem of the US as yet to really address their reasons why they do what they do. That came out of the meetings I had very consistently. You know, there's an argument and I think you referred to it as well, that some people make about how the US could just accept the reality of North Korea

having nuclear weapons. Um, we spent more than a decade before finally acknowledging, for instance, that Indian Pakistan have nuclear weapons for us to get there, what would need to have then? Well, I think that what we need to look at, you know, is the question of do we think it's possible. Again, this is the issue of bringing China in, you know, to get a verifiable freeze on activity. I don't think they will ever voluntarily give them up, you know. So then the question is is can you

put pressure on the regime, can you destroy it? Can you get regime change? All of those are things which frankly everybody would like, but the process of getting there is what scares the Chinese. So could we come up with this process and say, look, the reality is they have them. I mean we're talking perhaps twenty or so. Now, how better if you could freeze that to deal with them a few years from now and they have a

hundred and they're still building more. Those are two very different scenarios, Doug, is our traditional military off the coast of North Korea? Is there a benefit to that? I think of six thousand sixty two is the crew of the Carl Vincent. I don't know if that's the number. That's what Wikipedia says, but does it does it matter that the Navy has planted off North Korea again as a deterrent? Well, I mean the problem here is the North Koreans, I don't believe have any interest in starting

a war. They know they lose. So sending another aircraft carrier there's you know, sending B two bombers flying over in and of itself is probably more relevant to South Korea than North Korea. That is, if you want to reassure the South Koreans were there, It doesn't. It doesn't really tell the North Koreans anything. They don't know. You know, they know the U s could bombom them out of existence. And we don't even have to have an aircraft carrier that we could use. I mean, if we really wanted to,

we could use nuclear weapons on our cb ms. So the question is what are you achieving anything in terms of the North Are you making them more pliable? I think the answer is no. So then the question, well, does it help with China? Does it help with South Korea? Those are the questions you've really got to ask. I do think the problem is that when you're out there saying we planned to bomb them, we're going to threaten them.

We're thinking preemptive action. From this standpoint, if the US is thinking about launching a preventive war, that's an even good better reason to have a missile that could hit the US. So the US knows there's a cost to that. Well, let's thank you so much. We look forward to continuous discussion. Unfortunately, I think we will given the news flow. That's other UH. It's out there. Mr Bando's with a CATO Institute their senior fellow, and we speak on our international relations with

North Korea. It was a few years ago and it was an important discussion and essay commitment, rules and discretion. Charles Plasser has said this for his career, this at CATO, but also really across every other speech as a former president of the Federal Reserve System in Piladelphia. Professor Plaster joins us UH. Now Charles Plaster is Randall Corals is vice Chairman and regulation is he the beginning of a

rules based Trump Federal Reserve System. Good morning, Tom, It's good to be with you as always, and I'm very pleased with the appointment, our nomination of Randy Quarrels. I think he's going to be a great addition to the board. And um so I'm actually a very UH encouraged by his his nomination and I think he'll be a great addition, particularly in supervisionary. See that he didn't he didn't answer

my question. He ploster is taped to answer around it, just like a pro FEDERSTI come on, come on, Charl, We've known each other forever. Randy Corals has published on rules based UH advantages are we Is this the beginning of a rules based Trump Federal Reserve? Readjust it's I think Randy can contribute to that debate and how push the debate along, as you know, As you said, I've tried to push this along for many, many years. It's

not it's an uphill battle. But I do think that he will be a contribute to help do that, and I think depends on what other appointments are made and other things that um I'm hopeful that we can make progress in that direction with Randy. I think it very

much depends on what other poems are made. And I'm glad you bring that up because our Bloomberg Intelligence analysts Nathan Dean and Ben Elliott have made the point that Randy Karl's as the Fed Vice Chair for Supervision would have limited clout as long as Janet Yellen is chair um and of course he still needs to be confirmed as well, so his start day may not be until fourth quarter or later. What does he do in the

meantime to get his ducks in order? Who, Yeah, he's got He's got to prepare for confirmation hearings, and that's that's a huge undertaking for anybody. So he has he has, Uh, he has a lot of work work to do. I suspect in preparing himself for that, both for questions coming from on on the regulatory side and supervision, but also on monetary policy. So I think he has he has a lot of homework to do, But I think he's

perfectly capable and a good person for this. What would be his first order of business presuming he is confirmed and Janet Yellin is still sent share. I think he's certainly on the supervision side. Uh, he is vice chair for Supervision and he will have a lot of responsibility about how the supervisory process unfold, how the set approaches regulatory issues, whether they cut back on things like UH reviews of community banks and and I means there's lots

of things on the table. Dance Rule left the whole menu of things in his last speech about things that the FEND needed to consider. So I think there's a lot of opportunities he can his leadership can do. Professor Plats or cher Yelling, will will speak, will have testimony tomorrow before the House. Is she presenting a limited central bank? Or is a central bank of which you remember for a bit, would you suggest they have overreached and be

gone and gone beyond your acclaimed phrase a limited central bank? Well, I take the central central banks around the world have overreached, and I think it's it's it's very dangerous. And it's because then the risks we face in the coming years of the consequences of that could be long time. What could be felt. Are the risks there that we need to be a coordinated action. As we see out of Portugal a few weeks ago. Will coordination diminished the overreach

of central banks? No? In fact, I'm afraid that if their efforts, if their efforts to coordinate, it will be quite the opposite, because they'll be central banks reacting to what other central banks are doing in other countries. And you know who's to say, do I reacted. Does the Central Bank react to Portugal to the act of ECB, the react to Russia. It's just it's I think that's a dangerous path to go down. The coordination ought to be. Setting setting common inflation targets would be a better way

at form of coordination. Charles Plaster, thank you so much. He's a former president of the Fullers Bank of Philadelphia, of course associated with Chicago, Vanderbilt, and of course with his years at Rochester and the Simon School or Mr Kachel Coote as a shingle out. I believe at the moment we are honored to bringing out someone that David Remnick wrote about. I believe it was yesterday for the

New Yorker magazine. Let me quote completely. There has also been a great deal of solid journalism committed by Adam Davidson of The New Yorker, Timothy O'Brien of Bloomberg and others on Trump's business history and his links to etcetera, etcetera. Not joining us from Bloomberg view Timothy O'Brien, Tim, I'm gonna go to the heart of your reporting and the heart of your acclaim. I'm looking at the president of

the United States. In your acclaim book of years ago, you said, this guy is not as rich is we think we are. With everything that's going on. Do you have a sense or do you have reporting that there were agreements made with outside parties because he wasn't that well off. Were there periods in oh eight, oh seven, oh nine, or he had to sign some kind of deal.

I mean, I think if you look at his his business career, Tom he hits the skids in the late eighties and early nineties, He loses the real estate, he ends up giving up a big chunk at the casinos, and from the early nineties really until The Apprentice launches in two thousand and four, Um, the large banks have shunned him. He's lost most of his key holdings, and he's really willing to do deals almost any Boddy who

walks into Trump Tower. I mean, so much of this, And there was a great essay today about just the facts. Just what everybody just get back to, you know, reporting and not getting ahead of the facts, like Woodward and Bernstein ran into some trouble even with Watergate. To you animals who are doing adult journalism, what's the focus in the cacophony of Washington right now, What are the pros focusing on who are grinding the story out every day?

I think it's always got to be on the money trail, Tom. I think it's this is an old adage, follow the money in journalism, but it's it is the source of power and influence ultimately in all things. And um I think that that's a very fruitful path to people to

stay on with Trump. We've obviously looked at it here a bloomberg in terms of both his and his son in law and his children's relationships with UM Russian business partners, and and funds that have come through unexpected locales like Iceland.

When we look at the fact that this is Don Trump Jr. Who has reportedly had these conversations, can we presume that the president directed any of this or is it something where Donald Trump Jr. Acted out on his own accord that he did it on his own and there was a Chinese wall between him and his father. I don't think we should presume anything, Scarlett, I think

we should wait for the facts. Having said that, there's never really been a Chinese wall between Donald Trump Junior and his father in their whole existence um in fact in uh in the In the last one of the last articles I wrote about the Trump family's relations with Russian business partners, one of Trump's old business partners gave me this very great quote, a guy named Jody Chris, about how Donald Jr. And his father operated, and he

said Donald was always in charge. Donald had to agree to every term of every deal and had to sign off on everything. Nothing happened unless he said it was okay to do it. Even if Donald Jr. Shook your hand on a deal, he came back downs renegotiate if his father told him to. And that would be the case now as well. Oh, I'm certain of it. Yeah, And I think they've had very flimsy um trust set up to insulate the family business from White House decision making.

I don't. I I think they've shown actually disdain for having strong barriers between their business life and their pology. Your new essay in Bloomberg Few I think encapsulates great defining presidential downward. And we have many people listening who are supporters of the president, many people who have levels of outrage. How do you perceive Tim O'Brien, the counsel that he's receiving within the White House, and let me reverse that, how alone is his president? Um, he's someone

who's never really taken counsel from anyone. He has his own first and last counsel. There's a there's a little separate tier there that I think involves Ivanka, his daughter, and Jared Kushner has done in law. He will listen to them at the end of the day, and then it just drops off a steep cliff there in terms of him listening to other people. Uh So, in that sense, he's always been a loner. But that's how he prefers

to operate. Would we have heard of all the stuff of the last two or three days unless somebody was getting in front of the news slow like Mr Mueller's coming out with something or this, that or other thing. Are they essentially front running what was going to become news as well? I don't know. I think the Times, I think the Time stories are from just good, solid, gum shoe reporting, and I think they intersued a storyline knowing Trump as you do from writing his biography, um,

which he didn't appreciate because he sued you. Um and the case was later dismissed. Right right, Um, what he participated extensively with the book, and I think it's a I think the book is a fairly row toned, three sixty degree look at his life and career. I like that rotuned Look what did you was looking at me when he said it? What do you think is happening

when it comes to his discussions with his lawyers? I mean that the president now has so many different legal consultants or or folks um consulting him on legal issues. What what? What are the conversations he's having because Mark Casswitz, his personal attorney, does not exactly have a background in doing what he's being asked to do well. In fact, Mark cass Wits was the attorney he used when he sued me and when they litigated with with my legal

team and myself um. Mark Casswitts had no background in libel litigation. He was somebody who filled Trump's comfort zone. And the issue now in Washington is Casswitz has no background in handling congressional investigations, but Trump is comfortable with the way he rolls, and is Trump also directing him as a result, if you're talking about a lawyer who doesn't have familiarity with congressional testimony, with congressional investigations, with

libel laws for instance. This is all being directed by the president. Well, I think he's going to have to try to take some advice around some of this stuff because it's unfamiliar territory. But again, Trump often does what he wants to do. Let me talk like a Republican woman one of our listeners who maybe they voted for Trump, but they're not a big Trump fan. All the Democrats are an outraged liberal media is an outraged The Post,

the Times, and all the rest of it. Do you see Republicans wavering that maybe supported the president, but just the day after day drip of all this stuff is beginning to have an effect or are they still dying? You know, we're going to support the president. Look, I think the people who supported the president um are looking. One part of his support group wants jobs. I think that's the post industrial blue collar worker that's voted for him.

I think affluent Republicans who voted for him wanted tax cuts, and they wanted to see smart deregulation. He's not delivering on policy so to the extent that they like his mojo and the way that he runs in Washington. Great, but at the end of the day, the president, like all presidents, are gonna have to deliver the goods. Uh. Tim O'Brien, thank you so much. Let me do a shout out, folks for bloom Review. You can make it a regular morning and a Twitter feed kind of thing.

What do you get? Let me explain what O'Brien and David Shipley have done just on the cover of Bloomberg View today. First of all, you don't get Tim O'Brien, they buried him before. Below the fold. You get Muhammad Larrian Nariana cauche Lakota, who we just mentioned that Rochester were professor Plaster used to be. You get a view of Grand Rapids, Michigan and the great economist Tyler Cowen, the great George Mason. Uh joy on what China may

never moved to? A more modern China. Bloomberview, smart and eclectic. Look for that from Shipley and O'Brien. This is Bloomberg. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, on Cloud or whichever podcast platform you prefer. I'm on Twitter at Tom Keene David Gura is at David Gura. Before the podcast, you can always catch us worldwide. I'm Bloomberg Radio. Runt You by Bank of America Mary Lynch. With virtual reality, virtually

everything will change. Discover opportunities in a transforming world. Be of a mL dot Com, slash VR, Mary Lynch, Pierced Fenner and Smith Incorporated,