Surveillance: Unrest in Washington

And we're thrilled at Andy card could join us this morning. Andy, what was your first day like under the purview of President Reagan? Oh, it was tremendous excitement. I remember first of all, Uh, everybody was chipper. They had a wonderful attitude and there were there was It was a very positive experience from day one because we welcomed you. There was a celebration of our great democracy. And Uh. Ronald Reagan was a great communicator, not only with the public,

he was a great communicated with his staff. So he made you feel as if you were very much part of the game, and he encouraged you to be candid with him and not to take his word as if it was gospel. With what you observed yesterday. Is it the reaffirmation of a republican Reaganism or did the Reagan era die yesterday in this unrest. Well, yesterday was a

very sad day for our democracy. It was I was in tears, and it troubles me because I'm also the chairman of the National Endowment for Democracy, which Ronald Reagan founded almost thirty five years ago, and it was amazing for me to be part of the effort of creating a climate with democracy was going to be spread all around the world. And we were a shiny example. We were a city on the hill. And today we attarnished. Our democracy is tarnished, and the world is looking at

us and say this is not right. Maybe democracy isn't the right way to go. Well, it is the right way to go. And we've got to get everybody in America, I don't care whether you're left or right, up or down, get involved and help polish our democracy. Let's restore confidence in our institutions of democracy and polished them so that the world will recognize it's the right way to go.

We don't want autocracies or cleptocracies or communism. We want the people to have to say that was reaffirmed last night the speeches on the floor of the House and the Senate after the dust kind of settled and people the Congress got back to doing its constitutional business or remarkable speeches. They were saying polishized democracy. The people spoke, we have a new president. He's going to take the oath of office, and we know that as a fact. It's not a fraud, it's a fact. Andy, who is

the leader of the Republican Party today? Well, first of all, Donald Trump stole the Republican Party, so yes, he used in a view used it. Um. I don't know who the leader of our party was is today. I do look at the kind of the former leaders of the party speaking up to say, do a little soul searching and take a look at what's been happening and see

where you want to go. But I think it started with the speeches and the Senate last night, uh, where many senators kind of acknowledged the angst of America at the same time they said what happened yesterday was not good for our democracy. Were much better than that, and we can do it. So I think the party is it's gonna be. It's gonna be struggling right now. We're gonna have to struggle. But I look at outstanding governors

like Charlie Baker and Chris Sunu this steady. They've done a great job even in the midst of the pandemic. And Charlie Baker is in a democratic state, Massachusetts, and he's doing a remarkable job of leading. And I think those people, those leaders helped give definition to the what it means to be a Republican. I'm a proud Republican. I was not a Trump Republican. Okay, you're a proud Republican. With the soul searching that you're talking about, what will

people find what is the current soul of the Republican Party? Well, first of all, I hope that it's a respect for institutions, respect for democracy. You know, when I got involved in politics, the rug of American politics had more rugged than fringe. Today it has more fringe than rug. You really can't govern unless you find your way to stand on the rug and invite people to be part of a solution. And I think that's what we have to look for. Which about meeters today are looking to be part of

a solution, not part of a problem. And that's that's right. We have to I think we can find it, Andrew card I think of the images across centuries of photographs. I think, say, of Queen Mary and the young Queen Elizabeth and the George's sixth funeral. You are part of one of the most famous photos in history, that of your whisper in the ear of President Bush on September eleven. If you were to whisper into the ear of President

Trump this morning, what would you say? The humble acknowledge reality, celebrate our constitution and our great democracy, and celebrate how many votes you got. Even though you didn't win. You got the second most number of votes of anybody who ever ran for president. Unfortunately for you, Joe Biden got even more votes, but he had. Our democracy showed up in unbelievable numbers on election Day in two thousand twenty, and we should be celebrating that a record number of

people showed the vote. And and yes, Donald Trump did not win, he lost, but he got a remarkable number of votes, and Joe Biden got even more votes, and that turned into an electrical college victory that made the difference. Andy Kurt, your comment on The Gentleman from Belmont, Mass Governor Romney's speech yesterday on the Senate floor. I tell

you I've always been a fan of Mitt Romney. I thought he has been a real steady person who celebrates our democracy and invites speed to be part of the solution. I was very proud of Rodney yesterday. One final question, very quickly unfortunately, Mr card where's the common ground that you have with Howard Dean of the Democrats? Look at I've known Governor Dean for a long time, all the way back when he first became governor of Vermont, and

I have great respect for him. You know, he and I have a lot of reason to disagree on policy, but we both celebrate the great country we live in. And I actually like Howard Dean and get along well with him. But I do remember talking to him literally the day that he became the governor of New Hampshire. I'm the governor of Vermont, and and UH followed with

great interest when he was running for president. And remember he was a rocket out of the launch pad, but he was Andy Carr, thank you so much for joining us. A former chief of staff for President or thrilled to have him in to give republican perspective and the store twenty four hours. And to get perspective, it is important to speak to all. There is justice, There is a Supreme Court, the House, we had any number of legislative types today, and the executive branch. And then there is

the Pentagon. James de Vitas, a serve nation as an admiral with NATO, were thrilled that he could join us this morning. Admirals Sdrvidas. There was in the misty memory a president who wanted a Fourth of July parade with tanks in the street off of the French parade of Macroft and others. I've actually witnessed the Friends Parade at Something to Behold yesterday. Selected Americans were looking for tanks

in the street to defend the capital. Explain the Pentagon's relationship with the various police forces of our nation's capital. Let's start with the fact that the capitol is defended by the Capitol Police, which report to the federal government. And then within the District of Columbia, of course you have the d C Metropolitan Police and the deep back up tom as I'm sure you know, is the d

C National Guard. So there's sort of three layers UH policing and security that should have been far better aware than they were. What you saw yesterday was a massive failure, I would say, at a nine eleven level, at a nine eleven level, and there's a Hollywood movies of helicopters overhead and somebody that looks a lot like handsome James Travitez comes to the rescue. Yesterday wasn't Hollywood. What was

the optionality that the Pentagon had? They were waiting for direction from the Commander in chief because of the unique status of the District of Columbia not a state. Normally, a state governor could call his or her UH state Guard to quell a riot, and that's what we had. Unfortunately, it had to come from the Commander in Chief, who dithered all day. By all accounts, ultimately it was the Vice President of the United States who ordered the acting

Secretary of Defense to deploy the d C Guard. So President Trump was clearly not only inciting the riot but then missing an action and trying to resolve it. Admiral with your global experience, how do you think our foes around the world, those that would, you know, not wish us well? How did they view yesterday, high fives, Beijing, Moscow, tyrant, pun Yang, caracous, greatest day in recent dictator history watching this unfold, and I'll give you two specifics to be

aware of. Uh Russia will be leveraging this for intelligence gathering inside the United States, and they will seek to prolong this agony by getting into the social networks, getting into our cyber nets, as we saw them do just recently in the fire Eye hack China. I think, unfortunately, may miscalculate and decide this might be a good time to do something pretty dramatic in Asia. Could that be leaning in very hard on Taiwan. Could it be further

crackdowns in Hong Kong? They just rounded up yet another round of the protesters in Hong Kong. Makes it pretty difficult for us as we turn to our allies, partners, and friends to generate a team that can stand in the face of this. When we can't even defend our own capital. It's a disgraceful day for the United States. So, Admiral, the average serviceman or woman serving on the high seas or some far flung army post, how do you think they're processing what they saw yesterday? Many of them are

just you know, kind of waking up and seeing the images. Well, let's face one fundamental fact about those in the armed forces, their volunteers, who swear an oath to the Constitution of the United States to support and defend that constitution. What they saw yesterday was a blatant attempt by tens of thousands of rioters incited by the President, to interrupt that constitutional process. It's very significant that this occurred not just on any given Tuesday, but on the days which were

certifying the democratic results of the entirely legitimate election. So I think the average serviceman and woman is shaking their head at disbelief at this threat to the constitution. I know they are, in fact. And one final questioned an updated on your thoughts is uh, the domination of General Lloyd Austin moves forward to be Defense Secretary. Some controversy there. You've written about it. Give us an update. Um, he

will be confirmed. We ought to, as a general proposition, look for individuals to lead the Department of Defense who have been out of uniform for a long time. But General Austin brings a great deal of experience in the Middle East. I know him personally, extremely well. He's a rock solid professional. He will be confirmed. Um, we need to get the new team in place across the board as quickly as possible. The next thirteen days are going

to be dangerous for this country until we do. James Trevitus, thank you so much to Emeralds Trevinus of course, with among others of Carlisle group. I can't say enough about his books. Maybe it's a good time, after what we saw yesterday to look at his leader's bookshop bookshelf. Further, it was a wonderful, wonderful, wonderful set of about fifty

books from people like General Austin as well. The divise between a good senator from Texas and the gentleman from New York State, Cruz and Schumer going at it yesterday. I'm sure many view on radio and TV observe so much of this moment just extraordinary, the back and forth and of course off camera, some real emotions. Someone used to the emotion of politics is Kathy Hocle. She's from Buffalo,

New York. She is the Lieutenant Governor of New York and joins us from a lockdown New York City as well. Governor Hocle, we have not touched the pandemic since about three pm yesterday afternoon. How locked down is your New York City right now? Well, basically, I would say the restaurants are still not open. We have I had outdoor dining last fight, had a hammoger on a street next to a heater, so that is available to people who

are hungry. Not ideal, but it's in recognition that we're doing everything we can to keep the infection right down. If you just see your neighboring states were surrounded by states with the numbers of the go up. You clearly can't go to a Broadway play. You're not going to go to any man yet. But I didn't get the sense of lockdown because people are still working here still, you know, still a live city. So I think lockdown over the states where we are right now, Lieutenant Governor,

we cannot ignore Washington. Matthew Pottinger resigning your midnight from the Trump White House, and moments ago se NBC mentioning that Mr Mulvaney will resign from a Trump administration. You are in the executive branch. When you d people an executive branch, Lieutenant Governor, how do you move forward? You

just hold on. You have people around you, hopefully put the interest of this country first and do everything they can to personally contain Donald Trump until sanity reigns once again in this country and Joe Biden takes his zot of office on January Secies. We have to get to that date. It seems like an eternity from now, but if we can just get the people around him who understand that the verity of what he's done, inciting people to riot and leading an insurruction, they have to understand

that there are consequences in our country. We have a constitution that must be adhered to. So I am an executive branch. This will never happen in the state of New York because we would never elect someone who has is destructive of our democracy as someone like Donald Trump. But that's what happened. He lost the election. I think

that's the message around the world. He did not win, and in just a few short weeks we're going to have Democrats who have who put the constitution first, apparently over what Republicans are doing running the Senate, running the House, and now running the White House. So well have era that's going to allow us to sweep clean all the vestiges of Donald Trump and what he has done to our nation. Katthew, how much will a Senator Schumer led Senate help in the New York State budget? The New

York State prospects going forward? Unbelievably, It's going to be great, Lisa, And what we talked about, you and I had this conversation. It's like twentieth visit on your on your show, and we talked about what's it going to take for New York to be able to come back. We have a fifteen billion dollar hole. We need that from the federal government and Senator Schumer, who knows New York State better than anybody. He goes all sixty two counties just like

I do. He knows what this state need that he'll be in a position of power. Now. It's not just wishing we could get this done, it is being able to deliver with President Joe Biden, who also understands you can't starve the state and local governments when you're trying to get a vaccine in the arms of three million people,

not once, but twice. So we need more resources to offset our our losses, our financial hits that we took in order for us to be able to fund programs like the vaccinine vaccine rollout, which is going to stave this country, and we get that into people's arms sooner, the sooner we come back, the sooner we can sooner we can supercharge our econmy So it's going to be very good having him that position. So, Cathy, where are we in terms of the vaccination schedule? When will you

and I be able to go and get inoculated? At least I'm gonna assume that you are under the age of seventy five, so you'll not be in one A. You're not in one bould you know I would disabuse you of your notion, Kathy, carryad Tom you will be in the same categories I am. I'm not being a very good politician. You're killing it. Republican in New York, Please, we have one A people, the frontline health scare work

is still being vaccinated in our hospitals. We've tripled the number of vaccines that have gone out just in the last week. So it all is a function of supply, so we get more vaccines where government right now, Kathy, I'm gonna cut you, Kathy, I'm gonna cut you off. This is so important. Peter Hotez of Baylor College of Medicine says, we need to open up Yankee Stadium, and the only way we can do that is money. Money, money.

You Republicans, Democrats in every state don't have it. What do you need from the federal government to do a Hotez Yankee Stadium vaccination program? Oh, we we will do that. We're going to open up the Javits Center I we can do. We already have plans for this time. We have thirties six hundred and seventy two locations identified. We simply have to get to our first category of healthcare workers done in a priority. Are they go first when it comes time for mass vaccinations. There is no limit

to the locations We're going to do this. It will be massive locations. What funding you need from the Biden administration? Come on, you've got democratic president right now. You need one billion to get this done. To get that done, but also to offset the loss and revenues so we can continue to fund these workers. We don't want to have cutbacks or police, law enforcement healthcare workers, which is what we're facing in our budget. In March, Lieutenant Governor Okay,

this this has been an incredibly important conversation. None of it matters Bills cults first time since Can your Bills keep it on? Of course they can. The momentum is with us. You saw the energy and guess what we're going to actually have fans in the stand. We've accomplished being impossible this year, an amazing season, lifting the spirits of people, not just in Buffalo but all over the state. And I'm going to say this is America's due team.

So America will be rooting for the Buffalo Bills this weekend as we have our first first playoff game at home in twenty five years. So I'm really energized by this. It's going to be a great game, Governor, no doubt. In the seventh row fifty yard line as well. Cathy Yako, thank you so much, greatly appreciate that. Uh this one the Russell two thousand, John from Capri emails in and says, talk about Penn National Gaming, Caesar's entertainment plug, power Sun Run.

How about Darling Ingredients up twenty percent per year, A moonshot coming off of March for Darling Ingredients of Irvine Tech or Irving, Texas ten thousand employees. Good morning, Mr Stewart, Randall Stewart and and Darling Ingredients. They collect animal processing by products and used restaurant cookie oil. That's the moon shot of the Russell two thousand. That's the moon shot. Had not heard about it. You just sent it to me.

Look at it. This has got a ten billion dollar market cap, Tom So this is this has been around, it's it's sizeable, and they're in the animal processing byproduct business. Tello meat, bone meal, all the good things John Gallab uses every day. John Gallab with credit sweez. This is an important conversation because of his view to two thousand twenty one, John, before we get to tech, in your view on the bigger market, how do you adapt and adjust to a small cap surge? You know, we we

just did a note on this. In the consumer space, the small caps are a much better plays on reopening. And if you look at UM, you know, you know, like for consumer discretionary UM, the big cap you know, Internet retailers are are you know, very different than those mall retailers and restaurants and hotels that make up the small cap universe. And that's just one example on where I think there's real solid fundamentals here in the near term. I've got to get to your call. John, it's literally

an outlier. I believe you told us the last time you visited stay with tech. Is that true? It was? And you know, we we just um today tom um up our number for the broad market. But we also took what we call tech plus that all that broadly defined tech basket from overweight to neutral. And I did that. I did that with such pain because I'm such a believer that over the long run you want to ride this trade hard reopening. I think they're gonna be a

source of capital and this is what we love. Folks have Bloomberg surveillance, real news from a major house, John Galbin Credit Suite. With that shift, do you mean, particularly if it's a taxable event, do you cash it in or do you just reallocate new funds away from whatever your tech disbelief is. You know, most of our clients are running tax except um money, so they're not worrying

about pension plan or endowment. If you're an individual, the if I believe that you're gonna want to be in tech for the next two or three years, you don't want to pay a lot of taxes to make that switch in your portfolio. However, if you have new funds today allocative to things that are more cyclical, um, that's the time you get paid over the new ye like

the Boston Red Sox. So Jonathan. So if if I'm maybe taking a little off the table in tech or reallocating some capital, am I jumping both feet into that cyclical reopening trade? Well maybe maybe maybe let me like kind of twist your question a little bit. Where do you play the reopening trade most effectively? And I don't think it's the suff It's not in the stuff that I just upgraded. That the areas that think they're gonna be a big win are actually gonna be in healthcare

and financials. And let me explain quickly why for each um, a lot of us have not been to the dentist or to a doctor. And when we go back out there, Um, you don't think about a healthcare company as being cyclical, but there's gonna be companies that process your your blood tests and and you know, or people who have held up putting braces on their kids. All those kinds of things get a big cyclical reopening jump. Even though they're

not really cyclical companies. The banks. If you have interest rates move up a little like they did today, if the credit environment improved because of these checks, we're all gonna get people gonna pay their bills with that, those

are all really great for the banks. So while I'm moving up your industrials and materials and energy, I still rather be in financials and healthcare in this environment, all right, Johnathan, want the questions to have about this rotation trade which has worked so well, and the folks that were on it, you know, kind of August September, We're suppression is kind of the legs that it has. I know, I could buy Amazon and Apple and stick them away for a

decade and not have to think about the story. What's the Historically, how long does this rotation into cyclicals typically lasted? Well, you know, it's it's a funny thing if if you take a look at since let's say September one, um and values beaten growth over that period, it all came

down to four days. Only the four days were the three days when you got big drug announcements from you know, Fiser and Maderna and Astra Zeneca, and the day that Janet Yellen was selected to head Treasury by by Joe Biden. If you took those four days out, there's no value rotation here whatsoever. And I do think there's gonna be a really a a cyclical trade. But it's going to be when you and I go and get airline tickets for our summer vacation because we realized that we're gonna

have we we have been vascinated. That's the that's the mother of all trades. And the reason that I put this the the made the chain today is how close do you want to get to that May June July vaccine date for yourself before you rotate? The market's going to move ahead of that. My call today was don't be too cute, don't wait to the last minute, because somebody else will have made money on the trade. And this is really really important, John, I mean, the market

always discounting them out. How far out is the market discounting now July of this year or next year or the year following. Where's the reach now, the mental reach of the market, you know, Tom, it's the single biggest question that we're getting from the smartest headge from guys, who do you think how long do you wait. How long do you wait before that July event before the market's going to discount it? Three months? Six months? And if you're going to try to get too cute and

try to time it perfectly, you're gonna miss it. And if you wait for people to actually buy their concert tickets for a music festival this summer, the trade is already over. So that's why we put it in now. Even though I'm probably a little bit early, I just think I have no choice but to but to get in early, all right, just gives a quick overview of evaluation. And we've seen this market just rock it up from the March lows without a commensurate increase in earnings. Should

should I be concerned? Um? No, I don't think it should be concerned evaluation. But here's what you have. At the beginning of the year, um the year last year you had, the market was trading at an eighteen multiple. At the end of the year, it was trading at a twenty two and a half um. The peak in the internet period was like is So this is a very high multiple, and it's also moved a lot. There's a whole bunch of reasons why I think that these

multiples are gonna stay in overtime drift even higher. The first thing is there's a lot more tech in the market today than in the past, and those are higher pe names. It's just a mix of companies, that's number one. Number two, companies are doing a better job of generating cash flow from every dollar of earnings in sale, so you're actually getting more money back from companies over time when you invested them. And number three, interest rates are

are a lot lower. And whether you look at that as a cost of capital for company or lack of an alternative, all of those things say that multiples are going to stay in the twenties, probably drift higher over interesting. John Gold, thank you so much. With Cardio Suite's hugely valuable. Uh there. 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 before the podcast, you can always catch us worldwide. I'm Bloomberg Radio