alan greenspan on the political economics and turbulence we have seen across america politics and for that matter the global economic system. chairman greenspan, wonderful to see you. i must flip here. let's go immediately to the death and the deficit of this nation. you and i celebrate the life of pete peterson, one of our leaders, insane watch out for the debt. on, $155ent on and billion in 1987 when you took over stewardship of the fed, and

tom: alan greenspan, thank you. with your reading list for this summer, look back at some of the challenges of the reagan budget policy. thank you to bloomberg radio and television from washington. vonnie: wonderful conversation between bloomberg's tom keene and former fed chair alan greenspan, finishing on politics and how they had the third rail of u.s. politics. the long-term spending is not being taken care of with those concerns. mark: word he have passed the tax legislation? is the in itself, but it fact it is unfunded, and the first question was, what do you make of the debt burden. -- former chairman clearly when you have a choice as a politician to cut taxes and raise spending, you do want the obvious one, which is cut taxes and raise spending.let's look at what is happening to equities on both sides of the atlantic. one hour until the end of the wednesday session. stocks rising. midsession of the united states. this is bloomberg. ♪ retail. under pressure like never before. and it's connected technology tha

alan greenspan.greenspan on the ecb and draghi, but more than anything, alan greenspan on our trillion dollar deficit. this is bloomberg. ♪ heineken got a boost from beer sales in asia in the first order. the world's second-largest less thand 4.3%, expected. strong demand for the tiger brand has offset the impact of cold weather in europe. tesla will begin round-the-clock production of its model three. ceo elon musk told employees in and in a mile -- gmail the carmaker will try to build 6000 sedans by the end of june. tesla needs revenue from delivering more cars to customers after spending billions in pre-manufacturing capacity. that is your bloomberg business flash. it will not be the major --k of these imf meetings you never know what it will be by thursday, but it is a parlor game right now of economics. four ratings,o others disagree. william gross, janice henderson was heated in a recent conversation. maybe one at the most, two more rate increases. , whous, komal sri-kumar agrees with mr. gross

among luminaries attending the imf spring meeting in washington with -- was alan greenspan.wn with tom keene, who asked if he would have approved the tax bill that congress enacted in 2017? the tax legislation was not bad in and of it self. moving the corporate marginal .ates down was very important as ireland demonstrated in 1998. tom: does it skewed to a new gilded age? >> the route they did, where they cut and the regulatory structure they changed has been quite positive. but they have not attacked the issue of entitlements. you did this 30 and 40 years ago, is that the immediate task, that we must revisit social security legislation before the 13 years are over, where that becomes a real problem? alan: we are long overdue on that issue. cutting social security or i would saythink, the most inconceivably -- i'm trying to find the appropriate word to describe how important this is. you cannot cut benefits now. it is the third rail of american politics. , what want to get this in does the republican party need to do to get back conservative debt policy? reread ronald reagan

alan greenspan also weighs in on the pros and cons of the gop tax overhaul. >> cannot cut benefits now is the third rail of american politics. taylor: up next, more of the week's top business headlines. a vote on brexit in the house of lords does not go theresa may's way. >> if i was theresa may and philip hammond, i would be saying game's over. taylor: this is bloomberg. ♪ ♪ taylor: this is "bloomberg best." i'm taylor riggs. another week, another pointed exchange of trade measures between the world's two largest economies. the latest tit-for-tat began with u.s. sanctions aimed at a chinese tech company. >> chinese telecoms gear maker zte has been barred from the -- exporting sensitive technology from the u.s. after the commerce department alleged it made false statements to officials. our china correspondent is standing by in beijing, in front of the zte headquarters. tom, the details here. go -- here? tom: this isn't about one single corporate, this is about a broader effort by the administration it seems, in the u.s. to further restrict chinese access to that crucial u.s. technolog

captured regulator that we've never had it such an obvious example but they claim according to alan greenspan going back to some of his testimony when he was federal reserve chairman back in the day he claimed to congress that manipulation spiffing and and crookery was necessary to keep markets liquid so you know that's his rationality for maintaining a status quo of crooks is that while we need it for liquidity krag your thoughts max s. is such a nonstarter i mean he's control everything all markets now and this claim of the end liquidity is a joke i mean the liquidity ad is a mile wide and six inches deep because it can all be canceled in a microsecond by these computers you know getting back to see if you see you know they had this this investigation allegedly for five years and whether silver was manipulated and as soon as the whistleblower showed up to give them the absolute proof they swept it all on the rug and closed it and then oh i don't know what about two years later three years later there was class a. ass action suit in two thousand and sixteen that finally was allowed to go thr

coming up tomorrow, we are live with the former fed chairman alan greenspan.. ♪ >> from bloomberg world headquarters in new york, i am shery ahn. david: i am david westin. focused on the intersection of the economy. ahn: a challenge for getting republicans in the house. president trump meets with japanese prime minister abe this afternoon and we will look at the key issue. trumppublicans make the tax cut permanent before the .idterm elections ? ♪ david: white house reversal. sunday, nikki haley said the trump administration would be imposing more this time in response to alleged russian support fo

coming up later today, alan greenspan, former federal reserve chairman.se theard -- i'm in hewlett-packard enterprise green room. coming up later today, alan greenspan, former federal reserve chairman. david took that and went broader with it about the various giants of industry has been able to work with. i think about my last 30 years in the business and it sort of is like what you want for your children. you are who you hang out with. and it really helps define you. the narratives you here and the questions you here. i look back over the last 30 years and 15 years and listening to why jack didn't want to do an acquisition or what we need to do with cable. bob wright, one of the most successful guys running nbc, the newhouse family, bob miron, a genius. and john malone. when i think about where people should be spending their time, yes, you would like to get the right job. yes, you would like to think you will make money, but i took a from a cut to go to nbc law firm. because maybe someday i was going to get to meet jack. a lot of the way i see the worl

actually alan greenspan family family -- famously set time for reading and thinking. i said i wish. when i went into the job it is there to be done. >> let me ask you, the fed is somehow not like the rest of washington we're hearing about today. we don't hear about backbiting. we don't hear about leaks, about drama in the fed. how is the governance structure lend to the collegiality and consensus nature that you have? >> the culture is very much a, i love working there. i love this culture. really is, it is non-political. it is not bipartisan, it is apolitical. people bring their best thinking, economists, non-economists bring their best thinking to these things. it is very collegial. there is a strong sense of mission among the people that work there. a lot of smart people are working really hard on these problems and admitting there is a tremendous amount of uncertainty about the economy. so it is a, i find it a really great place to work. you know, also, the things we do are important. they have real effects on people's lives. we're very, very mindful of that, very, very fortunat

not have that, but i have a lot of time to read and think and talk to people and actually come alan greenspan famously said, set aside if and again amount of time for reading and thinking, and i thought, 'i wish.' and i went into the job and realized it is there to be done. >> the fed is not like the rest of washington that we hear about today, we do not hear about backbiting, about leaks, we do not hear about drama in the fed. how is a government structure really lend itself to the congeniality and consensus nature that you have? chairman powell: the culture is very much, i love working there, it really is. nonpolitical. it is not bipartisan, it is a political. people bring their best thinking to these things and it is very collegial. there is a strong shared sense of mission among the people who work there. and a lot of smart people work really hard on these problems. and just admitting that there is a tremendous amount of uncertainty about the economy, so i find it really, i find it a really weird place to work, but the things that we do are important and they have real effects on people's

there was a situation where that was the only measure that mattered for the fed in the alan greenspan era. that was up at over a 4% annual rate in the first quarter, we have not seen that since 2004 that will crimp margins over the course of the next year at a time when interest expense will crimp margins, we won't get tax cuts every year. so i think you will find earnings expectations coming down over the course of the next year that's not priced into the market right now >> bob, really quick, to david's point, to the degree you're screening companies, how much are you looking at either their debt to equity ratio or their refinancing calendar they may have over the next year or two >> we're watching that you don't get a great picture when you do. that's a problem for later right now we're getting amazing earnings and to counter david we're getting amazing earnings revisions to the upside. he said down revisions there are no down revisions. estimates are moving up because the economy is reasonably good and the tax tailwind is pretty strong 15%, 20% earnings, that's good news we have p

economy and the central bank with alan greenspan at 10:00 eastern time. 3:00 in london.. ♪ scarlet: this is bloomberg markets. ven, weback with ste were talking to you off-camera and you were saying how many questions you are getting about europe. how concerned should we be? >> i am not concerned yet. i think we have had a couple of years experiencing bad data in the u.s.. market sentiment and consumer sentiment all seem to overreact to the weather, which we should be able to see through. the same thing should be happening in europe. particularly from the pmi. we are in expansionary territory as well. it feels like there is an alarm. >> you have to be careful. >> this goes back to the idea people are wary and looking for anything that signals expansion is coming to an end. this has been explained in many ways. this is technically driven. people are still worried. ofthey see it in the context the flat yield curve. wondering if there is some signal. it was mentioned before when williams talks about it, it feeds that kind of worried. you're not seeing that much pressure bey

you ran all of research for alan greenspan. greenspan in our trip to washington a few days ago. how does the research capabilities the fed shift with the new chairman? does everybody put on a new bowtie? what's the body language in the building? >> voelker was different than greenspan. bernanke was different than greenspan. and yellen is probably closer to bernanke in terms of mindset. you have to adapt to what your audience wants and you have an audience in poorly of one, the chair. a lotk they are spending more time explaining themselves because think about chairman powell's press conferences. he was a lot more low key. you saw it speech he gave a while back where he may not be an economist but he was pretending to be one on tv. he wanted to show that he was in was making the case simpler and easier to understand. tom: that's what we do every day on surveillance. pretending where economists -- we are economists on tv. this has been a wonderful -- thank you so much. coca-cola out with a penny beat. we will have much more on tha

neil: alan greenspan. all right. that solved that problem. we've got a lot more, dow in and out of session highs up 306 points. we're also keeping an eye on mike pompeo confirmation hearings, the cia director who wants to replace rex tillerson. so far understanding he is comporting himself very well. toughest line of questioning from the get-go senator menendez from new jersey whether he would be able to tell the president to his face you're wrong on this decision and tweeting about it is dangerous? he comported himself enough to say i'm my own man. we'll see whether that means he will be the next secretary of state. more after this. i am an independent financial advisor. for our firm, it's all about trust and transparency. trust that we do what's right for our clients, without the constraints imposed by the traditional brokerage houses. transparency in the way we're compensated. our philosophy is one of service, not sales... that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients t

meetings, but i have lots and lots of time to read and think and talk to people and actually, alan greenspan famously said that you should set aside a significant amount of time for reading and thinking i thought, i wish. then i went into the job and i realized, it's there to be done. >> let me also ask you, the fed somehow is not like the rest of washington that we're hearing about today. we don't hear about back biting. we don't hear about leaks. we don't hear about drama in the fed. how is the governance structure really lending itself to the kind of collegiality and consensus nature you have? >> the culture, i love working there. i love this culture. really, it's nonpolitical. it's not bipartisan. it's apolitical. so people bring their best thinking, economists, noneconomists bring their best thinking to these things it's very collegial. there's a strong shared sense of mission among people who work there. and you know, a lot of smart people working really hard on these problems just admitting there's tremendous amount of uncertainty about the economy, so it's -- i find it a really great

alan greenspan, fired up at 92 years old yesterday.at the politicians simply do nothing until crisis. jason furman, frame for us a crisis that would get the politicians going. i question whether a be social security -- i do not buy that. what would get them going? jason: that is the problem. the united states can make extended economic policy mistakes without paying a huge cost. you see that on the fiscal side where we have exorbitant privilege and you see that on the trade side. in sweden, no one is discussing a massive trade war because they know they would be devastated by it. if we embarked on a massive trade war, it would hurt our economy but we could survive in the united states. , but weurvive as well are big enough and strong enough that it enables us to make mistakes that are costly but are not so devastating. maybe we will get time here with nathan sheets on tpp. nathan sheets is with pgim and jason furman with the pearson institute. coming up, senator mike rounds with the agriculture of the south -- of south dakota. this is

tom: i had a very emotional conversation with alan greenspan. his good friend just died.crying wolf for years. are we still crying wolf on the debt and deficit? adam: we will find out. i hope not. douglas: the cry is certainly real. the problem is here and very large. it will have significant consequences. will we see actual action by the u.s. congress and president? to date there is no evidence of that. tom: congratulations on getting out front on the vector of our debt and deficit to gdp. this is a wonderful conversation as well. we will continue with dr. posen. we will link it to the markets and we will do that with isabel of blackrock. stay with us. from washington, francine lacqua and tom keene. this is bloomberg. ♪ francine: good morning, everyone. we have live pictures from washington. there is good weather, that's a good sign. good morning to you from washington. this is the second day of the world bank imf meetings. we are hearing from the may.sman for theresa the u.k. is confident of reaching a solution on the irish border. this is one of the sticking points whe

i remember in the late '90s when alan greenspan was hurrying to raise interest rates and we had tremendous productivity, growth and low inflationary pressures then so, again, you know, bottom line here is that the market -- >> is is it a mistake? was it a mistake then? >> i won't say that. i'm not in -- that's the federal reserve chairman's lane. we've got a good - >> i think you're hinting that it's -- hinting at a mistake. >> all the i'm saying is the vinnestevi vinnest -- investors watching cnbc here, the economy looks very, very strong on all parameters and doesn't seem to be significant infralationary pressures to detract from that strength >> thank you peter that nnavarn. >> what are your thoughts? >> one thing echoed from me is the idea this brick and mortar aspect is a fabric of the american society i would say this much of america probably agrees with him the idea that the evolution of retail, everything else, is going to be something we have to deal with no matter what we just don't know what it means for amazon on balance. i mean, on the one hand, many american shoppers pay less

greenspans alan speaking with tom in washington. .> tune in tomorrow and friday tom and francine -- froms is bloomberg. ♪ julie: it is time now for options insight. joining me now is a derivative strategist for macro risk advisors. butow they will talk later has not beenend higher. it has been a lower trend. what have you been watching on that front? >> it is interesting. volatility has been crushed in the past week. i do not know if you remember charlie brown, what you know how lucy would always say the ball and charlie brown would fall. i feel like that is how they felt. volatility, let's start to own this for once. all just collapses and we think there are a number of reasons for this. reason -- there are a couple of facts we look at but the number ones are economic is very strong, economic policy, which is rising , and then corporate performance. the other thing we're looking at is volatility. the vix is pretty high relative to other assets. >> we have an -- a chart. it shows the cross at set volatility, which has in declining in tandem. went to 40 plus and u.s. equity volatility has

alan greenspan testifying in favor of the bush tax cuts said, we have to have bush -- we have to pass these tax cuts because otherwise we'll photoly pay off the national debt and that's a bad thing for various reasons. so we passed the bush tax cuts, the republicans did. and we -- between that and funding the iraq and afghanistan wars without a tax increase off the credit card, we greatly increased the national debt again. so the democrats have come in and cleaned up the messes that republicans have left on the national debt by their huge tax cuts for the rich. this legislation and now they tell us we can't afford social security and medicare and medicaid because we must keep these tax cuts for the rich going. this legislation would also undermine the federal government's ability to respond to an economic crisis. when the nation's economy weakens, incomes of individuals and businesses decrease because of job and business losses buzz of unemployment increasing which in term automatically results in reduced tax revenues. meanwhile spending on unemployment insurance benefits and food sta