Dollar’s Strength Shows Trust in Trump, Mnuchin Says (Correct)

and of course, on the Bloomberg Future. Slat down, futures up, nine equities churning. But look at the doubt twenty one thousand, five to eight, and you weren't in a market because the market, the economy, it was terrible. Things are terrible.

On Friday, you read four dooming gloom articles to get you through the terrible weekend, to get to the terrible Monday where Drew Madis the stock market goes up again because in your wonderful days a U B S with more Harris you were right, then, you're right now It's a resilient American economy. Can you link your g d P optimism right over to the stock market Uh No,

but I think it's reflecting it. I mean, I think when you look at the world today, you see a moderate growth environment with moderate inflation, very low interest rates, uh, and very low volatility in the economy itself. And so you know, when you look at the equity market, for example, uh, you know, there's less volatility around everything. So you know, you that's why the multiple I think keeps going up is because people are like, well, you know, I'm not

gonna get six percent in terms of nominal growth. I'm gonna get four. But I know it's a solid for as opposed to six percent us OUR minus four. Let's let's go back to original drumatics before we get to the markets here, and that is the idea of justifying two point eight or three percent g d P. Is it a consumer we misjudge? Do we get an investment buoyancy or does trade light up like a candle because of dollar dynamics. What's gonna be the partial differential that

makes that happen. Well, so I think the consumer is going to have a lot to do with it. Uh. And I think we're going to see that investment cycle begin because I think the thing that's being misjudged and misunderstood. The most uh, and that everyone is getting wrong is that productivity. Productivity is cyclically low. This is not a structural story. This is a cyclical story and it's been persistent because of the low rate environment we've been in.

This is a really important comment, folks. Let's dive deeper into this. And this goes back to how any number of Nobel laureates and frankly people that are truly acclaimed thinking about efficiency of capital, efficial see of labor. In this technological overlay, everybody focuses on technology. It's structural. The world's gonna come to an end. You're saying, yeah, that's there, but no, it's about a cyclical Dejanet Yellen force low

productivity because she kept rates low. I wouldn't say she forced it, but if you think about what low rates have done, low rates have effectively allowed companies that perhaps should have gone out of business to stay in business. Uh. And so every year that goes by, where that occurs, and you have companies that should be getting churned because they're they're cost of financing what they're trying to do. Uh. Oh, come on, look at the free lunch. Well, they're staying

in business. And what that's doing is is it's taking a percentage of the U S workforce and growing percentage of the US workforce and keeping them at firms that are not productive. They're not being churned out, and so we're not getting the turnover in the labor market that puts people to their most efficient use and best use.

So it's not good for the employees. It hurts their wages actually because low productivity firms can't afford to pay better um, but they can if they're staying in business. A greater and greater percentage of the York's US workforce is working at these firms that are not productive, and

then we wonder why US productivity is. But then the review this These are really important comments, folks, whether you agree or not with Mr Madison that life the first order condition for the FED is to provide financial stability at lowered rates to save the banks, except we all know the story the second order condition. Are these knock

on effects of the first order condition? What's the lead knock on effect right now of Bill Gross's financial repression or the idea of looking at a negative two year yield since time real to year yield since time began. What's the key second order effect? Uh, A very low level of economic volatility, which is bad for the economy we need as a country. The US has always thrived in creative destruction. UH. And without creative destruction, we do

not get to our efficient operating level. And there's another reason why perhaps productivity might be too low, which is that we are not operating at the right UH. If you think of the economy as an engine where we don't have the RPMs up high enough with the within within the r p ms of the U S economy, how many rate rises changes the oil in the tank? So maybe we've got a Velveolin moment? Can we does Velveolan sponsor us under the under the star under the

Texico sign something like that? But but but that was a Midwest moment, folks, excuse me there. But the basic idea we got to get the oil in the engine. How many rate increases does it take to get the oil in the engine? I think you have to get to a more normal level. I also think the balance sheet has something to do with it. So I don't have the answer for that because I think it's a mix of the two. But I do think the FED is moving in the right direction, which is towards higher

FED funds rates, towards normalizing the balance sheet. Uh. And I would say that, you know, one of the things that concerns me is this idea that the balance sheet is going to remain excessively enlarged for an extraordinary period of time and that we don't have to return to kind of a more historically normal size balance sheet. I think in the end, the FED will have to retreat from that and move back towards a more normal balance sheet, which is somewhere in the order of six to seven

percent nominally. How long is it gonna take? Because when I spoke with the President Caplain of the Dallas FED, he kept moving his hand. For those of you who can see this on radio, I'm moving my hand down, and he was moving it out years. I mean, he was on the edge of decades. Are you suggesting this is all gonna happen a lot quicker? I think it's going to take a decade. On the balance sheet, uh. And on interest rates, I'm not sure we'll have a

decade before the next before the next downturn. But I do think we've got a few years, and I think by the time we get there, we will have rates in a more reasonable place. What what does what does the low I want to do? The MetLife angle, the institutional angle here in our next section, but in this section, what does this world we're in that we've created do

for investors and savers mean? Forget about somebody who wants to buy six thousand shares of Amazon to make a quick hitoff whole foods to mom and pop out there, what does this environment mean? Well, for people who are approaching retirement, they're saving more. And so this is something that we've looked at a lot. If you look at ten year yields versus savings rates, the relationship is not linear, meaning that below a certain interest rate, people save more,

and above a certain interest rate people save more. When it's above it, they're saving because they think the economy is going to go into recession. There's this fear out there. Below a certain interest rate, there the fear is that they're not going to be able to have enough for retirement to actually meet their their income needs and retirement, so they save more. So in order to kind of get people to save less and to boost economic spending in the economy, you actually need to move rates up.

Well maybe that's a paradox and the paradox to take it back to econ one oh one. But there's a lot of ducks. But how how many rate increases are we too normal? Within this really interesting general discussion. I mean I would say three. I think he would be on the verge of normal with another three or so. Yes. Uh, you know historically the FED saw anything below one is abnormal. Uh, and then obviously the crisis happened, they went to zero. Um.

I think once you're above one, you're in a better spot. Uh. You know, something on the closer to three in my mind is better than two. But I'll take two and kind of pinch. You know what's great Aboutdrew maddisas he brings the entire entourage from MetLife with him, including a general council. He's gonna need his general counsel. And the next section as we talk about UH insurance portfolios and actual reial assumption, something I know he spends a lot

of time on as well. We got a little geeki there for Global wall Streets where with Drew Maddis of MetLife, drew insurance companies of all flavors, including his venerable is the Metropolitan Life Insurance Company have to worry about meeting the actuarial assumption that has been challenging since his financial crisis began. Is there light at the end of at the extraally real tunnel? Well, I mean, you know, with you know, we haven't had rates move up to the

way we would have liked. My forecast for the end of year tenure is to seventy five. I still think we can get there. You know, if you look at it from a kind of a monthly move perspective, you're looking at eight basis points a month, which is not unreasonable, particularly given some of the moves we've seen around some of the bigger events. Uh. But yes, it's challenging, and that's why we have, uh, you know, we have a

very solid um team. We have hundreds of people met Life Investment Management working uh to kind of you know, hit our hit our targets. Uh, and we have a lot of expertise in areas that that kind of enable us to invest in places you know that that can help us as well. So um, you know, uh, you know, higher rates would be helpful, but you know, we can we can get through without them, our bonds and stocks

correlated right now? Uh? You know, um, yes, but I think you know, fundamentals are actually now beginning to be the driver. So one of the things we've created is as a proprietary index of um of fundamental activity. And what we see is that fundamentals now are driving things, not kind of the shock factors anymore. Uh. And so we watch this index that we've created to give us a sense of whether that's beginning to move or not. Uh. And right now, at least our fundamental index is telling

us that fundamentals are driving things. And then we have actually underlying fundamental indicase for credit, real state, uh, the consumer, and all of those are suggesting pretty much a goldilocks not too hot, not too cold environment. I like the goldilocks ideas of goldilocks in the oil patch. I meant three seven percent Bob Moon saying it's two move. We had to readjust from a hundred down to forty at

one point, I would suggest we cleared most of the market, right. Uh. You know, I think so, I think you know, the you know, the the key really for me when when we think about oil, uh, in the context of the U S at least is it um because the US has become this kind of swing producer. Whatever we thought the peak oil price was that you could get to maybe ten or fifteen years ago, that number has got

to be lower. And so when you look at the average price that you can expect over the next ten years, it's something divided by two, right, and so uh, it's you know, it's lower than it would have been if you asked the same question fifteen or twenty years ago. And for me, that's the key feature of kind of the U S oil revolution. Dumas thank you so much, with met Life, their chief market strategist. It's a huge responsibility, folks to try to gauge equities, bonds, currencies, commodities and

economics across the liabilities of any given insurance company. There, what short term it that life? Five years? We have a very long run perspective. Come on, give me an answer. What short term? Ten years? You're trying to get on fired? Yeah, well we're not. The General Council's hanging on every syllable. Five of years. I mean, seriously, five years a short term for an insurance company. We we make investments, We are a liability driven investor, and that means we make

investments for the long term. There he is with the c y a answer. Drew Maddis of MetLife, thank you so much worldwide. This is Bloomberg right now with as William Priest for a brief time, as we await a conversation with a Secretary of Treasury. William Priest wrote an iconic book. It was instantly classic and has stayed that that's hard to do on shareholder yield. A number of

years ago. This would be the measurement and cash flow, which would we see more of in the next five or ten years, dividend growth or share buybacks, which has the high ground now in terms of use of cash. I think what's gonna happen is, first of all, you have to take one step back and say should I reinvest or should I return capital? What's critical to that is can you earn a premium over your cost of capital?

If you can indeed reinvest at a premium over your cost of capital, you should reinvest or require But for many companies, particularly large ones, that's almost impossible. So they will return much of that cash to the owners of the business, and they will do that either through cash buy backs or debt paid down. From a tax standpoint, buy backs are favorite. Wall Street doesn't always treat buy backs with the same value. It depends on the reason.

If the reason for the buy back is to get management paid because earnings for share or hire and they get a bonus, that's a misuse of cash flow. But in theory they are identical. So and and if you don't want to talk about this bill, we know each other so well that if you want to step aside on this, IBM is financial engineering. They basically did William Priest one oh one the first four pages of their annual report for years and years and years and years,

and then the show game broke? Did you own IBM? As they were financially engineering their way to oblivion. We have been negative on IBM for years. They had an up quarter. Why have been negative? No revenue growth? No revenue growth from umpty ump quarters. Uh, there are too many games you can play with a counting, and many many years ago, it was uh, Louis when lou rock Hiser Show was on, LOUI asked me a question. Because I'm I'm a CPO. My background includes that at one

point I was an accountant. We won't hold that against you. Well, he asked me a question. It was one of the great straight lines I was ever given. Uh And he said, Bill, being an accountant and being a c p A is a helpful and being a security analyst or portfolio management. And I basically said, well, Lou, you know, accounting is a lot like a bathing suit. What it reveals is interesting, but what it conceals is vital. And I think accounting is a way to obfuscate truth. And it's gotten worse

and worse as you've gone through time. These sensors just gagged me here at surveillance. So I can't respond, okay to that. Mr Rukeyser could respond to that, and in the modern day even Luu Keiser couldn't respond to the bathing suit priest analogy? Am I doing? Okay? John? Yeah, that whole really you got the shovel on. Think the whole ever deeper? Okay? But IBM, seriously here you look at the IBM pages. Everybody thinks it's c P A c F A one oh one. And you're saying the

revenue growth isn't there? Amazon has revenue growth than God is. Mr Bezos did he read William priest, I have no idea. Why not Why can't you look at why can't you? You should? Well, well, who do we have on yesterday? Uh? That was wonderful about this. Uh David Rubinstein saying he made the same mistake you made, and you know, the underestimated Bezos she got revenue growth of Amazon. Does that

count towards shareholder yield? I think at the end of the day, you're going to look at does the entity generate cash flow? All businesses are driven ultimately by their ability to generate cash flow. Now, we have a definition for free cash flow, which essentially indicates that the definition that we use, it's the cash available for distribution to shareholders after all planned capitals, adpenditures, and all cash taxes.

So what Bezos has done is essentially say, you know what, I can reinvest my capital at a higher than my cost of capital, which has been true in this era we've been in where the cost of capital is following year after year after year. So this is the money question, folks. This is critically important as well. This is so important. He's got a game going and like Brian Roberts ad Comcast, someday you shift Comcast brilliantly shifted from CAPEX development over

to use the cash to shareholders to great advantage. Do you believe Jeff Bezos can shift from revenue high return new businesses to a more mature business X number of years down the road. I jury is out, but I would say probably can. But right now he just looks at He is a major disruptor in business today. You don't want to be on the other side of what he's doing. It's too disruptive. Brunt 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. Welcome to our viewers around the world, our listeners on Bloomberg Grady as well. I'm joined by the seventy seventh Secretary of the Treasury, Steve Monition. Here uh the Gaylord Resort a South Washington. See. Thank you very much. Thank you. You become familiar with the idiosyncrasies of this town, the strange customs you're about to become familiar with another, that

is the semi regular debate about the debt limit. When are we going to get it. How how soon is that debate going to happen? Follow Let me just say we're already having the discussion on it, and I don't think it's a debate. Let me be clear. I think everybody realizes we need to raise the debt ceiling. The government debt is the most important credit in the world and where the reserve currency. So this is just a

little bit of a process. That's the government process of how we go about and one of the things I think we think about over time is changing this process. It should be once we've spent the money that the debt limit goes along with the commitment to spend. Is it the beginning of September when you think we we hit that limit? Is it later in the month. Do you have a specific date at this point? We constantly review these numbers internally. UM, I don't want to give

exact projections. As I've said, I've encouraged Congress to act before they leave for the summer, but we do have enough money to get us through September and case they don't back in January. Before you were confirmed, you spoke against prioritization of debt payments. Now that you've been on the job, You're familiar with the office and the way things work here in Washington. Do you still feel that way?

Are you against prioritization? Let me just say I think that the Congress should raise the debt ceiling so that we don't have to talk about prioritization. That's really the focus. We should be paying our bills when they're due, and we shouldn't put the government at risk. There hasn't been what I would call a course of consensus around this issue.

And a few others within the administration. There were some of your colleagues who are calling for a clean raise of the debt limit, through others who think it should be tethered to spending cuts. What's it going to take to get to unanimity on this issue? And others within the within the administration. Well, I think we have a general understanding within the administration and we're clear on that,

and we're working with Congress. This is really up to Congress to raise the debt limit, and again it's something I'm confident that they'll do. Before we get to a point. That's critical on the issue of unanimity is the White House saying there is a date by which we will a tax reform proposal from the White House. Are you

speaking with one voice on that issue? Well, I think we've been pretty consistent and saying we're working every week very closely with the House and the Senate to have a joint plan when we come out, and the idea is to get us all on the same page. So when we release the combined plan, it's gonna get passed, and it's going to get passed by the House and the Senate and the President will sign it. And it's

our focus to get that done this year. It's critical to the economy and we're working every day to get that done. What's your relationship like with lawmakers on Capitol Hill? How have you found that being new to watching, being new to this job. I think we're very good relationships and uh, I think it's a team effort. I think the good news is we understand what we want to do. We want to get growth in this country. We want to have tax reform. It hasn't been done in thirty years.

It's critical. We want to simplify personal taxes, we want to create a middle income tax cut, and we want to make business taxes competitive. We have one of the highest tax rates in the world, old with worldwide taxes and deferral, which leads to trillions of dollars left off shore. You bring up growth. I must say that's the thing

of this conference. I talked to maybe a half dozen economists to every day, and almost without exception, they disagree with the projections that you have that we can attain three or four percent and growth in the near tow to medium term. What are you seeing that they're not? Well? Again, I just want to put this in perspective. When Obama came into office, he was projecting over four economic growth.

We obviously haven't tag necked. We've had one of the lowest growth rates in modern history, and we're just not going to be satisfied with two percent growth. We're gonna work every day in this administration and do everything we possibly can to unlock the economic capital to create jobs, to create better wages, and get growth above three percent. We're committed to doing that. You're here among and talking

to foreign investors. Let me ask you about Siphias. You've said your decisions on foreign investment are based largely on national security. That's the cornerstone. Would you be in favor of an economics benefit test it for investment in the U S Well, let me just say they're not largely on national security. They're completely on national security, and no I I favor sifious to be for national security. There's other things we can do to make sure that we

are economically competitive. But the US is one of the freest trading markets in the world. It's one of the freest investment markets in the world. We welcome foreign investors to invest here, and we just want to make sure we get treated the same way abroad. That's really our focus. You've talked about a strong dollar and a dependable dollar. Not to get into the semantics here, but what's the difference between the two. How do you define a dependable dollar. Well, again,

the dollar is the reserve currency the world. Um, Again, it's not our focus where the dollar is in the short term. There's obviously certain negative aspects of a strong dollar as it relates to our exports. But on the other hand, the strong dollar is a vote of confidence in the US economy and the Trump administration, similarly to

what is going on with the stock market. So this is one of the most important economic investment opportunities the US and we're seeing a lot of attractions here and that's a lot about what this conference is today on the issue of investment. A few months back, you're talking to a colleague of mine out in l a at the Milk and Conference, and you suggested that ultra long bonds absolutely made a sense. Do you still believe that? Are you walking back from that a little bit in

la I'm not. I'm not walking back again. It's something that we're very seriously considering. UM. I do think it's a tool that the government should strongly consider, and we're reaching out through the Borrowing Committee and investors to to see what the demand is. I mean, what we don't want to do is create a program that's a completely one off program. We want to see if it would

be an important part of our borrowing capabilities. In the past, people in your position have been advisors to the President on picking future chairs of the Federal Reserve? Has the presidents solicited your advice on who the next FED chair should be? Well on all the financial regulatory positions. Gary Koon and I are working very closely together in making recommendations to the President so that he he and I have have interviewed all the people and have made joint

recommendations to the President. What do you think constitutes a good FED chair? In other words, broadly speaking, what do you what do you think the president should be looking for gonna in a FED share this next turn, Well, let me just say we haven't made any decisions yet on the FED chair um whether we're gonna have a new one or we're not going to have a new one, and uh, we'll be working closely together with the President as we consider all the issues. What is your relationship

like with that, Mr Cone? We we hear so much about the palace intrigue, reports of division or discord within within the White House. What's your sense of how the economic team is working, how it's working together. I think the Economic team couldn't be working better together. And that's a combination of myself, Gary Cohne, Wilbert Ross, It's Bob Leitheiser on trade, it's mcmilvany on the budget. We meet constantly,

and Uh, I think we couldn't be working together. As it relates to Gary and I, he and he and I have known each other for a very long in period of time and we're worked together very closely in the past otto warm beer has passed away from the twenty two year old student who was in North Korea from more than a year. The President has passed along his condolences and said that he's reaffirming his opposition to the policies of the North Korean regime. What more can

you do? We've seen the Treasury Department deploy and implement sanctions against North Korea. As you react to this news and think about steps forward, are there more tools in the Treasury Department's tool kit when it comes to sanctions. Well, let me first say it's a it's a very unfortunate situation, and I also pass on my condolences to his family. Uh. He was treated very poorly and nobody should be treated

like that. And as we've said before, we are firmly committed at Treasury to use all our powers to put sanctions on North Korea and work with our allies to stop what they're doing. And that's the missile testing, the nuclear testing. Um this is something we're working very closely with our allies on. I spoke with your predecessor about sanctions.

It was something he was very we sted in and worked hard to raise the status of that's a policy tool implementing sanctions in the in the realm of national security. Do you see your sanctions policy as an extension of that. Are you doing anything differently than Secretary louis doing when it comes to sanctions, Well, let me just comment. You know, sanctions have been around for a long period of time, and specifically post nine eleven. They are a very important

tool for policy makers. So we will continue to use sanctions to the maximum amount that we can. And I constantly meet with Secretary Tillerson and Secretary Matters and at the National Security Council. This is one of the tools we talk about and all of our foreign policy objectives.

I don't know if you've opened your mail from yesterday, but a number of Congressman, Republicans Democrats wrote you about Rose and Potential Investing are becoming a controlling investor of SITCO given the status of that company, raising concerns about what that might mean for sanctions, having a company with so much infrastructure in the U S under Russian control?

Are you concerned about that as well? Well? First of all, I do read my math because again late yesterday, Um, you know I can't comment on any specific cases and Siphius, but I can assure them and I can assure others. I take my role as chair of Cephius very seriously. We will use Ciphius solely for the purposes of protecting our national security, and any transaction that's within our jurisdiction

we will look at very careful. Like just the last question here about an op ed that Gary Code and Aatrian McMaster read for The Wall Street Journal on the arena seeing the world community as less of a community, as a place where countries are competing against one another in that space. What's what's the what's the role of multi ladder institutions. Oh, I think there's a significant role. I mean, I think there's a lot of common objectives

that we have. I think whether it's the World Bank, whether it's the I m F or or others, there's definitely a role for us, working with our allies with these institutions to to create fixes for problems around the world. I think, as you know, kind of we've been worked being with the Greeks on the dead crisis. They are we're pleased that we've come to an agreement, or the Europeans have come to an agreement. Then I worked closely

with the I m F and with our partners. Although this is primarily a European issue, we wanted to make sure that this was done. And uh, we're very pleased with the I m f S role in those negotiations, sectual menation. Thank you very much, The seventy seventh Secretary of the Treasury back to you. This is a great pleasure, great great pleasure. This is truly one of the nation's leaders.

I'm trying to get your kids to learn a multiplication, label tables and actually get through trigonometry in high school. Here's what you need to know. He was what was called a Westinghouse scholar. This is a few years ago, before Princeton, before this, before that, everybody who was cool didn't want to do what you and I did, which is a lot of science and a lot of math, and you took a trophy in high School's a Westinghouse scholar. It's like the movie October Sky. It's a nerd on

the block. How did you get through the social impact of math and science where everybody said what Tom Layton did, that's not cool. Well, I just love math and science, so I had a lot of fun doing it and uh, there are a few other kids. At the time, there were there were a few others, but there was also that social tension of that's not cool what Tom Layton of acomy is doing. That's not cool. Yeah, no, that's true,

and we we faced that same challenge today. I think in terms of what is emphasized and um, it is a challenge I think for the country with with within this and within your public service. Along with the success of acama ie and and what you've done in the the internet is the idea of the rigor of mathematics. How do we help kids get through the tough moments the rigor where you're looking at signed, co sign, tangent and there's other three functions on the other how do

we get through the rigor? You know? I think one key is to make math be interesting. I and to show kids what it can be used to do. Uh, you know, take search, that's all math, and you know, I think when you expose it to kids in the right way, show them the magic of math, of power of math, that goes a long way to increasing interest. Later on. Tom Layton, of course, is a co founder of Amy Technologies in the Internet, in video and all a lot of the nuts and bolts of how what

we take for granted happens every day. I've got about eight themes to go with you, but I'm gonna go right now to the M and A market of Silicon Valley, which is we extrapolate out valuations of tech up starts. This didn't happen when ak am I was around. You didn't get money come in and then they'd say it's a forty two billion dollar company, and that's the vogue right now. How did this begin to happen? Like with Uber? How do we extrapolate Uber into an umpteen billion dollar company? Well,

we act shliakam I went through that. Did you go through? We did? We started and in nine did one of the largest I p O s ever and did get a very high got up to about thirty five billion shot chart Luncher. Yeah. And then of course reality does set in and during the bubble bursting had a tremendous crash. We've lost you know, seven one in value and you know managed through a lot of hard work from very talented employees to survive that and then grow into a

very profitable, uh and fast growing company today. Yeah, the rate to return folks off the tobacco of two thousand. One of them is jaw dropping and really speaks. It's pretty much a linear function of of double digit excellence and shareholder return. I guess I got to go to the video question. I perceived video on the Internet as a kid's domain. Kids love it. We all know that. I mean, I get all the statistics. Do adults want video? Oh?

I think so. And you know, kids grow up and you to doing some of the same things as when they were kids. So we see the video coming over the top as being increasing. Uh And ultimately I think in the long run, most all video will be over. I P. It'll be over, I P. But within the video that you're the backbone of, there's got to I get the generational shift that the young kids today on YouTube, etcetera. Will use video more. Do you see evidence now that

adults want video? In journalism, it's a real debate. Yes. Now you see the video traffic and share substantially increasing. We see the traffic on akama I, you know, growing at very substantial rates. And I do think and you talk to the world's major broadcasting executives, and I think now they all believe that the large majority of video watching across you know, the globe will be digital and that includes adults. Of course, how do you retain employees today?

I don't know what the headcount is it ACoM, but you got the young upstarts gonna they think they know everything and you're like, yeah, please is come on? How do you retain that that constructive ego of those bright kids today? Well, we work hard to make OKAM would be a great place to work. Part of that is having a really innovative culture with teamwork. You know, it's what matters that Akama is the quality of the idea,

not the rank of the person who said it. Uh, you know, and that really is very helpful and to grow innovation. And you get a lot of innovation from folks coming out of school, uh, you know that have fresh ways of looking at things, and that's that's vital for engineering and mathematics is a is an area where you love to start projects and you keep them going way too long. How do you do with Christiansen talks about which is disrupt the failed projects? How do you

get rid of failed projects? That it's always hard to shut something down and you know we're we're not perfect aut it either. But you know, in order to be able to continue to fund innovation or new ideas, you do have to terminate objects that you know, at one point seemed like they had a lot of promise but no longer do and that you've invested in you say, okay,

that one didn't work out. You know, innovation is always a high risk endeavor and most ideas are not going to work out, and you do need the discipline to shut him down when it's when that becomes clear. One final question, did ad more Rick Over come over for dinner? Your father knew ad Rick Over? This is for those of you younger, this was an extraordinary and unique individual. How every navy did ad more Rick Over come over for dinner? Yes, many times, and he was an extraordinary

human being. He was wound up like a top. He made the submarines go, didn't he? He did? And uh, you know, I had the benefit of growing up in a home where science was really important. My dad worked very closely with add more rick Over and uh, you know, very hard working man. This has been great. Thomas Layton back and I thank you so much thanks for listening

to the Bloomberg Surveillance Podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene. David Gura is at David Gura. Before the podcast, you could 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. VI of a mL dot Com slash Vr, Mary Lynch, Pierced Fenner and Smith Incorporated