the volcker rule is still subject to the filibuster.60 votes in the senate to get this through. republicans only have 52. it will not happen this year or next year. there is bipartisan support for tweaking the volcker rule. tweaking it to small banks, like $10 billion in assets or below, but that will not go through unless it is a last-minute scenario. it will be up to the regulators to tweak this thing. nejra: right, so a full repeal not likely, as you say, but about those amendments, what might they look like? nathan: there are two we are telling investors to keep an eye out which are applicable to the large investment banks. first, proprietary trade. the definition of what is market making versus proprietary trading has been a complaint from the banks, so i would not be surprised to see the federal reserve will move to expand the market-making exemption, making it easier for banks to make markets. d.ere is something called rent the federal reserve, and the five regulators that have to work on the volcker rule, you could see actions l

when it comes to the volcker rule, how likely is a repeal?s for more is our bloomberg government analyst from washington, d.c. nathan, great to see you, it is are for all the presidents talk about repealing dodd-frank, it is going to take a lot of time for some of the key issues to be rolled back. let's talk about the volcker rule first and foremost. the congressional talk, is that just talk? natahan: it is just talk. you will see people trying to produce bills to repeal or change the volcker rule, but it will not get past the senate. the volcker rule is still subject to the filibuster. you need 60 votes. in the senate to get this through. republicans only have 52. it will not happen this year or next year. there is bipartisan support for tweaking the volcker rule. the small banks, like $10 billion in assets or below but that will not go through unless it is a last-minute scenario. it will be up to the regulators to tweak this thing. nejra: right, so a full repeal not likely, as you say, but about those amendments, what might they look like?

when it comes to the volcker rule, how likely is repeal? is our bloomberg government analyst from washington, d.c. you, it isat to see going to take a lot of time for some of the key issues to be rolled back. let's talk about the volcker rule first and foremost. the congressional talk, is that just talk? natahan: it is just talk. you will see people trying to produce beals to repeal or change the volcker rule, but it will not get pass the senate. the volcker rule is still subject to the filibuster. you need 60 votes. republicans only have 52. it will not happen this year or next year. there is bipartisan support for tweaking the volcker rule. that will not go through and less it is a last-minute scenario. , so a full repeal not likely, as you say, but about those amendments, what might they look like? are two we are telling investors to keep an eye out applicable to the large investment banks. first, preparatory trade. -- proprietary trade. complaint from the banks, so i would not be surprised if you see that expand reserve move to the mark

that paul volcker and alan greenspan.

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendednks from doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. dagen: here is a look at some of the biggest market events coming up next week that could impact your wallet. the markets are closed for labor day. but later we'll get the beige book, jobless claims, wholesale trade and consumer credit. we are waiting on numbers from barnes & noble and kroger. on the political front congress back in session tuesday. tax reform expected to be the top agenda item. that will do it for "wall street week." thanks for watching us. maria bartiromo will be back next week. but first bob massi "property man" tarts right now. >> i'm bob massi. for 35 years, i've been practicing law and living in las vegas, ground zero for the american real-estate crisis. but it wasn't just vegas that was hit hard. lives were destroyed from coast to

. >> they were but you're starting to see the effect, the real effect medium term of the volcker rule which is the banks can't trade their own accounts anymore. so trading is now customer business and you saw it with goldman it was relatively weak on the commodity side and fixed income side surprising goldman made money trading their own account. they can't do that anymore the banks have had to find new way dshs >> they haven't been able do that for a while why has golden fallen so sharply behind its peer. trading has not been great any way. why is goldman behind its peers the last two, three quarters in a way it had not been since volcker came into play in 2010 >> it's a couple things. execution on their own part, and they're competing with large institutions like jpmorgan who are coming after them. the competition is fewer than 2008 you had a lot of second tier firms like bear stearns, they're all gone in a dwindling pool of revenue, the bigger firms with the bigger balance sheets can come after a firm like goldman, a trillion dollars or less is not that big what about the retail si

>> volcker's too complex. you why everyone us admission. -- by everyone's admission.stion is, can you make it a straightforward execution? that is probably a good idea because you have six agencies working on different sets of principles and they all know it is too complex. he is proposed, make it simpler. -- he has proposed, make it simpler. now we have to figure out what we mean by that. we don't have proprietary trading, were not doing it. how many times do we have to disprove it? that is where it gets tricky. >> as you know, people are beginning to freak out about these new european rules known as mifid ii. how big a deal as it for bank of america? >> it costs us money to implement it and things like that but if you think about it, we have the number one research class in the world six years in a row. i'm sure people will pay us for that. >> $80,000 a year? >> i assume they will because that is how they have to get it. with our customers and clients that do tens of millions of dollars of volume in the stuff, to me, it is not the biggest issue i have been worried a

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendedevent banks from doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. ♪ it's a highly contagious disease that can be really serious... especially for my precious new grandchild. it's whooping cough. every family member, including those around new babies, should talk to their doctor or pharmacist about getting vaccinated. when this guy got a flat tire in the middle of the night. hold on dad... liberty did what? yeah, liberty mutual 24-hour roadside assistance helped him to fix his flat so he could get home safely. my dad says our insurance doesn't have that. don't worry - i know what a lug wrench is, dad. is this a lug wrench? maybe? you can leave worry behind when liberty stands with you™. liberty stands with you™. liberty mutual insurance. dagen: here is a look at some of the biggest market events coming up next we

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendedfrom doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. rethink what's possible. rethink your allergy pills. flonase sensimist allergy relief helps block 6 key inflammatory substances with a gentle mist. most allergy pills only block one. and 6 is greater than one. flonase sensimist. ♪ looking for adventure this labor day? holy smokes. oh man, that's pretty intense. look no further than chevrolet. this is a fast car. i feel like i left my soul back there. wow. this has power! head to the chevy labor day sales event and ride out the summer in a new chevrolet. current chevy owners can use labor day bonus cash to get a total value of eleven thousand- six hundred dollars on this silverado all star. or, get 0% financing for 72 months on all tahoe and suburban models. find new roads at the chevy labor day sales event. d

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendedprevent banks from doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. it's time to rethink what's possible. rethink the experience. rethink your allergy pills. flonase sensimist allergy relief uses unique mistpro technology and helps block 6 key inflammatory substances with a gentle mist. most allergy pills only block one. and 6 is greater than one. rethink your allergy relief. flonase sensimist. ♪ dagen: here is a look at some of the biggest market events coming up next week that could impact your wallet. the markets are closed for labor day. but later we'll get the beige book, jobless claims, wholesale trade and consumer credit. we are waiting on numbers from barnes & noble and kroger. on the political front congress back in session tuesday. tax reform expected to be the top agenda item. that will do it for "wal

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendedprevent banks from doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. prudential asked these couples: how much money do you think you'll need in retirement? then we found out how many years that money would last them. how long do you think we'll keep -- oooooohhh! you stopped! you're gonna leave me back here at year 9? how did this happen? it turned out, a lot of people fell short, of even the average length of retirement. we have to think about not when we expect to live to, but when we could live to. let's plan for income that lasts all our years in retirement. prudential. bring your challenges. ostriches don't really stick their heads in the sand. a peanut is not a nut. and a real john deere... is actually real affordable. you learn something new every day. the surprisingly affordable john deere e series tracto

some of the regulations that we've put in place with other regulators since the crisis, like the volcker rule are really quite complex, and we're working, we believe we should, and we're working with other regulators to try to see if we can find ways while carrying out what dodd-frank intended that banking organizations not be involved in proprietary trading. nevertheless, the implementation can be less complex. so that was -- that was my main message. your second question asked about what impact the fed has had on income distribution because of the fact that stocks and homes tend to be disproportion at least. i would say look, we were faced with a huge recession that took an enormous toll in terms of depriving large numbers of people and disproportionately lower income people who are less advantaged in the labor markets found themselves without work. we had a 10% unemployment rate, and our congressional mandate is maximum employment and price stability. so we set monetary policy not with the view toward effecting the distribution of income, but pursuing the congressionally mandated goal

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendedt banks from doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. ♪ it's a highly contagious disease that can be really serious... especially for my precious new grandchild. it's whooping cough. every family member, including those around new babies, should talk to their doctor or pharmacist about getting vaccinated. ...nausea, heartburn, when indigestion, upset stomach, diarrhea! nausea, heartburn, indigestion, upset stomach, diarrhea! here's pepto bismol! ah. nausea, heartburn, indigestion, upset stomach, diarrhea. dagen: here is a look at some of the biggest market events coming up next week that could impact your wallet. the markets are closed for labor day. but later we'll get the beige book, jobless claims, wholesale trade and consumer credit. we are waiting on numbers from barnes & noble and kroger. on the po

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendeds from doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. i just want to find a used car without getting ripped off. start at the new carfax.com show me used trucks with one owner. pretty cool. [laughs] ah... ahem... show me the carfax. start your used car search at the all-new carfax.com. hi, i'm mindy kearns. it's great nice to meet you too. your parents have been talking about you for years. sorry about that. they're all about me saving for a house, or starting a college fund for my son. actually, i want to know what you're thinking. have a seat. knowing that the most important goals are yours. multiplied by 14,000 financial advisors, it's a big deal. and it's how edward jones makes sense of investing. you won't see these folks they have businesses to run. they have passions to pursue. how do they avoid trips t

back to work for washington, how likely is the repeal of the volcker rule?he crisis. we hear on regulation over banking and the low rate environment. welcome to "bloomberg markets: rules & returns."

how likely is the repeal of the volcker rule? and what will it mean for u.s. banks?k. we would hear what he has to say

specter of inflation and the ensuing recession, which was engineered by the federal reserve when paul volcker was chairman. to crush inflation. there was a purpose to it. unlike today's recession which is basically the outcome of the financial market excesses, the recession of the 1980's was an active policy. that is a fundamental difference which people tend to lose sight of now. there are several other consequences to the rise of inflation. again, i think they are reasonably well known among economists. one, i would say, was the stagnation of productivity. that is somewhat controversial, because we do not really understand what caused productivity to grow and to decline or stagnate in any detailed way. but there is a coincidence between the stagnation of productivity in the late 1970's and the rise of inflation. and in the book i argue that the two of them were not unconnected and that, rising prices essentially caused diverted management's attention from the details of actually running their businesses to the more pressing task of how much or how often they should raise prices, because it

how likely is the repeal of the volcker rule? and what will it mean for u.s. banks?need to learn the lessons from the crisis. that is the message from bundesbank. we would hear what he has to say on regulation, over banking, and the low rate environment. welcome to "bloomberg markets: rules & returns." i am nejra.

back to work for washington, how likely is the repeal of the volcker rule? it mean for u.s. banks? plus, we need to learn the lessons from the crisis. we hear on regulation over banking and the low rate environment. welcome to "bloomberg markets: rules & returns."

how likely is the repeal of the volcker rule? and what will it mean for u.s. banks?lessons from the crisis. we would hear what he has to say on regulation, over banking, and the low rate envnt

there should nexts be a giant asterisk to the argument the tax cuts fueled the growth because paul volcker interest rates in the intervening time. when george bush -- george w. bush did this, it lost a lot of revenue. we should be completely honest about it. all of the objective analysts recognize the cutting taxes for high income people and big coorations do not pay for themselves. if you want to cut them, outline how youso far, they haven't. shery: the logic right now, the argument, at least when it comes to mr. trump's land, is that they focus on business tax cuts, which is different from reagan or bush. would you not expect more economic gains from this? >> it's not just focused on business tax cuts, first. abolish the estate tax for a tiny number of very high income of states. -- the states. cut the top individual tax rate while raising the lowest income tax rate. there are a lot of high income individual cuts and some large corporate cuts. if we were talking about cutting the corporate rate in a revenue neutral way like we did in 1986, we would be having a totally different discussio

because in my conforms, confirmation, i now have a rule named after me there's the buffett rule and volckerule and the mnuchin rule named after what i said and the objective, i think, sas you know, we're looking at a system that gets rid of state and local tax deductions so in the high-tax states, two of which i've had the opportunity to live in, new york and california, yes, i can assure that there will not be a tax decrease >> what will that mean more states like new york, connecticut, new jersey, california if those -- they can no longer be backed up by the federal government that they will have to have these high rates and realize their taxpayers are going to get crushed? >> i'm hopeful in these states that taxes don't go up so we'll have a slight rate decrease on the high end, to offset the deductions. and i'm hopeful we can size that so that it doesn't hurt new york and california they may not get a tax decrease, but these are the details that will be -- >> a federal tax decrease, but we'll end up paying it in state taxes? that's how it's going to go down >> again, i'm hopeful that th

volcker, i admire many people because of the ability to go above things and to look down at the worldality machine. think, how does that reality machine work? everythinggnize happens over and over again. everything is another one of those. when you start to think about how does reality work, principles and so on. he thinks of human nature. it is basically almost that there are a limited number of personality types. there is a limited number of situations. in these things keep happening over and over again. it's almost like you can see the universal theory of reality. he looks at the world that way. emotionally carried away. that.dmire them for charlie: i assume you are in constant pursuit of greater understanding because the principles -- bad worried about appearing good. dad, making first-order of consequences. good, make your decisions based on consequences. you are constantly adding to the principles. you started with 10. now you have 11. ray: as i learn something, i get into the habit of taking the time and writing down what is my principle for dealing with that thing. i am consta

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendednks from doing proprietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. ♪ you know how painful heartburn can be. for fast-acting, long-lasting relief, try doctor recommended gaviscon. it quickly neutralizes stomach acid and helps keep acid down for hours. relieve heartburn with fast- acting, long-lasting gaviscon. and helps keep acid down for hours. you won't see these folks they have businesses to run. they have passions to pursue. how do they avoid trips to the post office? stamps.com mail letters, ship packages, get a 4 week trial, plus $100 in extras right on your computer. including postage and a digital scale. go to stamps.com/tv and never go to the post office again. because we have the resources, and we have the focus, and so, if st. jude doesn't do it, who will? ♪♪ dagen: here is a look at some of the biggest market

a number of regulators, including outgoing fed governor talked about the volcker rule which is intendedietary funding on their own accounts. maybe there is a way to make the stress testing of baingss to assess how much capital they have during a tough period. there are ways to maybe make that less onerous for banks. liberty mutual stood with me when i was too busy with the kids to get a repair estimate. i just snapped a photo and got an estimate in 24 hours. my insurance company definitely doesn't have that... you can leave worry behind when liberty stands with you™ liberty mutual insurance. it's a highly contagious disease that can be really serious... especially for my precious new grandchild. it's whooping cough. every family member, including those around new babies, should talk to their doctor or pharmacist about getting vaccinated. dagen: here is a look at some of the biggest market events coming up next week that could impact your wallet. the markets are closed for labor day. but later we'll get the beige book, jobless claims, wholesale trade and consumer credit. we are waiting o

catch our new program on bloomberg about the ever-changing regulatory landscape from the volcker ruleng the applications and opportunities of regulatory change by drawing on our own in-house expertise and industry figures on the frontline. watch it on the bloomberg this weekend. next, 35ean close is minutes away from the end of the friday session, a little bit of a reaction to the jobs report but pretty much the main index, stoxx europe 600 is higher throughout the day, 7/10 of 1%. i will leave you with the bond the board. the jobs report, maybe the ecb will push back news on ending the qe program until the end of december. the close is next. this is bloomberg. ♪ mark: 11:00 a.m. in new york and 11:00 p.m. in hong kong. from london, i am mark barton. vonnie: i am vonnie quinn. this is the european close on bloomberg markets. ♪ mark: big top stories we are covering from the bloomberg and around the world with the euros fighting high and loses gains after a bloomberg scoop, the ecb may hold off on finalizing its qe plans until december, what it means for mario draghi. investors confiden

volcker is too complex by everybody's admission. is bloomberg. ♪ so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. ♪ julia: welcome back to "bloomberg best." i am julia chatterley. last week, central bankers gathered at the jackson hole economic symposium. in addition to speeches by janet yellen and mario draghi, plenty of conversations on the sidelines. let's start with boj governor haruhiko kuroda. he sat down for an exclusive interview with our kathleen hays. in the u.s. and in europe, inflation rates are actually close to their target, close to 2%. in japan, the inflation rate is still 0.5%, far away from our 2% target, so there is some difference b

volcker is too complex by everyone's admission. welcome back to "bloomberg best." i am julia chatterley. last week, central bankers gathered at the jackson hole economic symposium. in addition to speeches by janet yellen and mario draghi, plenty of conversations on the sidelines. let's start with boj governor haruhiko kuroda. he sat down for an exclusive interview with our kathleen hays. >> in the u.s. and in europe, inflation rates are actually close to their target, close to 2%. in japan, the inflation rate is still 0.5%, far away from our 2% target, so there is some difference between u.s. and europe on the one hand and japan on the other hand. wages are not rising so fast, that is true. mostly in japan, but prices are not rising. here there is some kind of differentiation in the mindset, strong among business leaders, labor union leaders. they tend to be cautious in raising prices. so what companies are doing is they are heavily investing in labor, equipment, and so on and so forth, and also they are changing the business model

volcker and many people. because of the ability to go above things.srk down at the a reality machine, and to just think how does that reality machine work and to recognize that everything happens over and over again through the same things happen over and over again. everything is another one of those. when we start to think about how does reality work and what are the principles for dealing with reality? we can talk about principles for parenting and so on. he thinks of human nature. it is basically almost that there are a limited number of personality types. maybe there are 20 personality types. there is a limited number of situations, and these things keep happening over and over again. when we start to see the patterns and look for the patterns, it is almost like you can see the universal theory of reality. he is striving to do that and he looks at the world that way. it is intelligent. it is not emotionally carried away. he appreciates the beauty of reality, even the harsh realities. so i admire him for that. charlie: i assume you are in constant

when lord king first joined the bank of england, he asked paul volcker, the chairman of the federal reserve.a.r.t r carter and reagan, what body should represented the bank of england? mystique was the reply many has changed in the years since and for the better you, governor, have contributed to that improvement with the reforms you led. today openness and transparency are defining characteristics of a modern central bank. this conference celebrates an important milestone in the evolution of this institution. the granting of operational independence the newly elected labor government decided after the 1997 general election that they would do what's successive governors and some conservative chancellors had long talked about, give the bank responsibility for setting the official short-term interest rate as a newly elected mp at that time, i remember those debates well looking back on them now after 20 years in which independent monetary policymaking has become the norm around the world, the disagreements which then divided the house of commons on the issue seemed rather academic the success

tom: in the middle is paul volcker and the years of skyhigh inflation and michael mckee, the 10 year yield and the great moderation down to the lower right corner which is the volatility we have seen. the generational scope of stan fischer and others has been exceptional success in definitely the inflation of another time and place. the fed has this rather steep job to do as they always do to figure out a rather to raise rates in december or going forward and maybe a little too touchy-feely. tom: why are you looking at me? [laughter] julie: how much more difficult is it when you are getting new people, a new dynamic to figure out the personalities? yes, you can have all the background but you have to figure out how to make big decisions with your coworkers. michael vick maybe only one more -- michael: maybe only one more member. you can that what he is confirmed, janet yellen will be reaching out on regular basis and a chatting about his beliefs and trying to steer him and the direction she wants to go. the bank presidents are all pretty much set in their ways and views. it is really

you know, remember paul volcker raised rates, people may have forgotten, 2%. 25 basis points. 2% sundayht. not in between meetings. on a sunday. okay and he did it because inflation was going up. stagflation at the time. that's a bad why the why, doing well, jobs coming back, people entering the labor force, the economy will dwarf rates, the importance of rates so far, that's what they've been doing. they've been watching the economy and growing rates. i'm hopeful that will continue i think rates do need to go up and the economy continues to be stable you know, people join the workforce, a lot of capital, markets are wide open. no major potholes in the american economy i'm putting geopolitics aside because that would change, might treat some of these things if they continue to raise rates and start qe, it's in a healthy economy, you'll all be fine. but as a matter of risk management, don't assume that. so when we look at our risk -- our risks we take, we also run the other scenario that inflation rears its ugly head, growth is slowing down and still have to do it. that's a very differen

and respecting the minx accord through the wasmity process that actively being worked by ambassador volcker, our special representative for ukraine affairs. it is an important issue, not just for ukraine, for the region, but for people in the united states. that will be an important area. then we have issues such as space, which for example, it must be the level of oxygen when you're at that level. maybe no oxygen at all that keeps us together in a collaborative fashion. there has been a great success between the united states and russia. example, liesr out there, is another issue we will have to come together on. and maybe in ways that are positive. i see the balance sheet. i see the need to come up with a very clear and crisp list of priorities that we can meet on, we can hopefully make progress on, and i can return to you and report on. >> thank you. and ambassador, can you talk about whether you are going to be willing to continue to meet with opposition figures in russia, canada citizens who may not agree with the 10 rain -- putin reign? mr. huntsman: that has always been my practice.

i admire paul volcker, i admire many people, because of the ability to go above things and to look downrld as a reality machine. and to just think, how does that reality machine work? and to recognize everything happens over and over again. the same things happen over and over again. charlie: history has patterns. ray: yes everything is another , one of those. when you start to think about how does reality work, and what are the principles of dealing with reality -- that implies everything. we can think about principles of skiing, parenting, and so on. he thinks of human nature. it is basically almost that there are a limited number of personality types. maybe there are 20 personality types, i could not tell you the number. there is a limited number of situations. and these things keep happening over and over again. when you start to see the patterns are look for the patterns it's almost like you , can see the universal theory of reality. he is striving to do that. he looks at the world that way. it is intelligent, it is not emotionally carried away. he appreciates the beauty of reality

jimmy carter wanted him to do which is kill inflation which was, there's a big political problem and volcker knew how to do it. he was a banker and he, i'll give you a little story about that. he called bob barkley and me over to the new york fed right after he was hired and it was a nice lunch and then he said okay, when there's blood all over the floor, will you guys support me? i held up my hand first, and we both agreed yes, we would. >> and there was blood all over the floor. we had a sharper sash in the latin american companies that were borrowed and they were in trouble, farmers were in trouble they over borrowed and there was a lot of blood on the floor , and we stopped by him and when it was all over after the sharp recession, we got economic growth again. >> that's a great story. taking a blood on the floor, you spent a lot of your career overseas at the foreign columnist, reporter. give us some of the highlights. what was it like being a foreigncorrespondent back then? i'm always jealous of that era. i feel like you guys got to do incredible cool things . >> guest: you could be be

that paul volcker and alan greenspan. rate was near 60% down reagan'sthe end of term. a couple that, you had a decline in energy prices. all tax reform is helpful, you cannot look at it in a vacuum. what we're saying is reagan worked well. there are a lot of circumstances tailwind.a huge >> remember, it took five years. this was 1986 when we got the comprehensive tax reform. to get it done by next year at this time is a tall order. julia: a lot of people are saying to look at kansas and this experiments of tax reform. why is it different today? scarlet: that is a precedent that will sit uneasily with some republicans. we will see if it becomes an obstacle. what about deficits? to be anseen obstacle. it looked like the freedom caucus signed off on it. >> there are rules. the deficit keep neutral outside of 10 years. they can louse as much money as they want to the next decade. i am a kansas girl and i thought of my parents at home. they lose a lot of money and do not get the growth they think they might get. investments are always rosy and then they do not can out. they

there's differing opinions on any decision not like the volcker or greenspan years where it was a heavy-handed chairman and i don't think that genie goes back in the bottle >> you don't think the known versus the unknown. >> i don't think it matters that much. >> in terms of how easy policy has been. >> i think it's a committee decision more now than ever. >> hold on. >> go ahead. >> you want to react to that comment? >> i think there's two competing ideas for the president. one is that he's a guy who wants to put his stamp on it and saying i'm going with janet yellen is that right what he said, it's more of a consensus -- >> that's the way the fed has operated it was sort of determined that the way that alan greenspan ran the fed was not the optimal way to do monetary policy and this sort of much more cacophonous way where you've got to listen to all 17 members of the fomc has seep as increasing better results. i think the president wants to put his own stamp on it and a president who get up in front. united nations and the first words out of his mouth is how great the u.s. stock market is do

he appoints a new federal reserve chair, paul volcker, who enacts tight money, meeting higher interestonstricting the amount of money coming out of the federal reserve to the banks. that should cool down the economy so there is not as much spending and inflation. it takes time, and by that point it was too late to save carter's term. and, in fact his approval , ratings fell to 33%, which was lower than nixon's during watergate. sad state of affairs. so we see that the three e's, despite to this gap between the , are and the presidency still challenging. i love this movie for a lot of reasons. but i also glad that he is very wrong in its predictions. let's talk about why. why is it so wrong? especially given that the world's population has expanded. it did not expand as much as ehrlich predicted, but we don't have the global food shortages, the widespread famine they were predicting. market prices have declined, and we are using the same amount of farmland now that we were in the 30 or 40 years ago. so of course there is still , hunger in the world. there is a famine situation that is t

i admire i will qunogu, paul volcker, i admire many people because of the ability to go above things and look down on the reality as-- the world as a reality machine. and to think how does that reality machine work. and to recognize that everything happens over and over again. the same things happen over and over again. everything. >> history has patterns. >> yes, everything is another one of those. and so when you start to think about how does reality work and what are the principles for dealing with reality. and that applies to everything. we can talk about principles to skiing, principles for parenting, and so on. so he thinks of human nature. it's basically almost that there are a limited number of personality types. maybe there are 20 personality types. i couldn't tell you the number. and there is a limited number of situations. and these things keep happening over and over again. and when you start to see the patterns or look for the patterns, it's almost like you can see the universallal theory of reality. and he's strifing to do that. and he looks at the world that way. it's

diplomatic efforts to implement minsk -- i appoint kurt volcker, this prospects for success remain dim. and moscow is intent on keeping the situation at a low boil and trying to topple the government and bring to power leaders who will abandon the ukraine people's dream for a future. the challenge is how to change president putin's calculus and convince him to negotiate in good faith on implementing minimum nsk. congress has provided needed leverage withthe sanctions bull the sanctions alone don't seem to be enough. we need additional pressure on putin to convince him that prolonging the -- that time is not on his side. the best way to do that is to significantly expand u.s. security assistance and in particular to lust the obama administration's -- lift the obama administration's embargo on lethal defensive weapons. the aim is not to encourage ukraine to seek a military voc and they know it's impossible. the purpose of providing defensive weapons is to help ukraine deter the russians from carrying out further attacks by raising the cost of further aggression, and ultimately to increas

that's the model that volcker used and greenspan used very, very successfully. >> i want to throw an analogy out -- the fed has a system they believe predicts inflation imagine the mayas built a pyramid and it's supposed to line up with the sun in the fall, the spring, and the winter and all of a sudden, it's not lining up. the edifice that they have built, which is designed to predict control and otherwise be able to set inflation rate, is t not working. what i think is significant, what larry is saying, larry has o another idea i don't necessarily agree with larry's idea, but it's an opening not only for people like mr. kudlow, but for people like mr. president trump that might appoint to the federal reserve that might come in with a different idea they've been covering the fed for 20 years at no time in this 20-year period is the essential inflation dynamic under question now -- >> let me take it even more bluntly. what i believe the president wants is a reformer at the fed, who will get rid of the models or at the very least, put a new model in to counter the old models so you ca

years -- volcker years on down. where in here did you say you guys are all wrong? laughingstock of wall street. you see what passes here. to be clear, you are way over on the right side and you are going under 2% inflation? what will drive is there? gary: globalization is certainly one. wages because of globalization and because most of the jobs being created now are in low income areas -- hospitality, retail, and so on. because you have declining commodity prices, extra supply in the world. it is physics friday. let's go to first derivatives. stanley fischer's altra economy, a poor rate increase. the stability of the economy because we are up, up, up, or can we afford a few more rate increases? been while the fed has raising rates come along treasury yields have been going down, and it really raises two questions. one is -- is the fed credible? their lack of ability to forecast in the last five years is marked, let's put it that way, euphemistically. the other point is a lot of forces are acting on long rates that really do not have to much ado with what the fed i