Summers as Smart as He Thinks He Is: Hunt

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Aug. 29 (Bloomberg) -- Bloomberg Contributing Editor Bill Cohen and "Political Capital" host Al Hunt examine the career of Larry Summers and the reasons why he is considered such a strong contender to be the next chairman of the Federal Reserve. They spoke Wednesday on Bloomberg Television's "Market Makers."

Live from market makers , this is erik schatzker and stephanie roll.

Red hat has its entire fleet of hybrid vehicles at one place for the first time.

Oddly enough, they show detroit as their location.

Toyota's vp of automotive sales, bob carter.

You're in your favorite place, detroit.

I am in my favorite place, but the whole crew here has come from california.

They have come here to short of -- sort of show the rest of detroit that you own the hybrid line of vehicles and you will stay that way.

16% of your volume is hybrid, 70% of hybrid comes from toyota.

Are you going to be that up?

We believe hybrid is the core technology for the industry moving forward.

From today to the mid- 2000. it offers real benefits for consumers in terms of lower cost of ownership and benefits to the environment.

Toyota developed hybrid technology.

It has been -- it really changed the industry.

We think it will continue to change the industry.

We're sitting in front of 27 or 28 hybrid cars that you guys sell.

Here is the rav4 with the tesla powered engine.

Before the new store, a lot of people did not know you have a tesla powered car.

How much do you think tesla has helped the rise of the electric vehicle and how involved will the two of you be together.

It is a great collaboration.

Tesla is a great company.

Their engineering some great vehicles.

We have a collaboration with them for the last three years.

We worked together to develop the hybrid technology and specifically the battery technology.

The underpinnings of our full electric raft are the same you would have on a tesla.

It is currently on limited distribution in the state of california.

It is going well there.

It is a very competitive market but that collaboration helped us with that entrepreneurial spirit that tesla has.

We have helped them with some of the expertise of designing an engine for the the consumers.

It has been a great collaboration and one we look forward to continuing.

No limited production basis for the camry.

You are starting to see real competition from the ford fusion.

How do you deal with that.

Are you going to see a redesign soon?

We are always working on the future.

We introduce this generation two years ago.

We are talking to our consumers and owners and asking what they would like to see in the future.

We feel very confident.

It is important to us, the minute size of savanna and -- midsize sedan is the most important in the country.

That is important to us.

It is validation that consumers like it.

A lot of incentive there.

That is the reflection on the economy.

Through the first seven months, camrys and joined leadership in that market and we were confident we will remain that way.

I will give you a forecast.

I was for a sneak preview of august sales.

With regard to camera, it is the number one for 12 years.

What about right now?

August sales, where are they?

The entire industry is having a spectacular month.

Consumer confidence moved up this week.

We are seeing consumers buying new toyotas and in the entire industry.

We are forecasting that year- over-year there will be upwards of over 200,000 more cars purchased this august and august 1 year ago.

That should equate to about $60 million.

We are doing fantastic.

We are seeing year-over-year increases of 11% to 12%. that will depend on how the labor day weekend turns out.

Luxury lexus long-held the crown.

It is getting to be a crowded space.

How important is that to you and what are your plans.

It is extremely important to our business.

It is really competitive.

We enjoy seeing that.

More competition is good for the consumers.

Very price-sensitive market.

We think it will be a fantastic year.

Thank you for joining us.

A real pleasure.

Even though we are so close to ann arbor, back to you.

Look at the joy in matt miller's face.

That is our own matt miller.

He will be on the road and keeping autos and focus all week.

Tomorrow morning he will be sitting down with ford.

Cover starts at 8:00 a.m. eastern.

Here is one thing you need to know about larry summers.

He gets praise and blame for his role in the financial crisis.

More on the man who could be the next fed chairman.

? larry summers is not about to win any popularity contests.

The former treasury secretary has a reputation for being an intellectual bully and another who doesn't suffer fools gladly.

Could it be true that his iq is the reason for his ego?

It may be that he has emerged to be the next federal chairman next year.

One of the youngest requesters to ever win tenure at harvard.

The deputy treasury secretary who spirit the u.s. to the asian crisis back in 1998 and then one decade later the chairman of the council for economic advisers . he blames summers for the regulation that brought on the financial crisis in the first place.

He is a smarty-pants.

We will take you deeper and get a look at how this man could be the fed chairman.

He is a writer, a former banker, and a bloomberg contributing editor.

He is a bloomberg economist and host on bloomberg capital on tv.

What is your take on him?

I understand why president obama is enthralled by larry summers.

I totally understand why he was head of the national economic chairman back a few years ago.

I understand why he wants to be fed chairman and why he wants them to be because he is so palpably smart.

You are in the room with him, as i have been on several occasions, and you just feel brain power like you don't feel from anyone else.

Is he likable?

He can be incredibly charming.

Like all ceo's, they can be incredible charming when they want to be.

Bill says that summers intellect is one of the reasons that president obama might want him to be chairman of the fed.

Why does larry summers want to be chairman of the fed?

Because it may be the second most important job in washington, perhaps the world.

Just look at the history of greenspan and bernanke.

There is an old expression in texas, it isn't bragging if you can do it.

Larry summers is every bit as smart as he thinks he is.

I was with a nobel prize-winning economist and noticed that -- noted his difficulties.

I said that larry can be dismissive of fellow economists and he said, you can delete fellow economists.

Almost every decision he made was right but he often did it in a heavy-handed way.

He is incredibly smart and dazzles almost everyone who is around him.

Is that all we need from the fed chair?

Do you have to be likable or does that not really matter?

I think it helps to be smart.

I sure do not want a numbers and to head the fed.

I don't think there's any candidate up there who isn't smart.

There is a question of how you work.

The fed is not a one-man show.

Paul volcker got in trouble when he lost support of his fellow governors.

Larry's record on this is mixed.

They say they have worked fabulously with him and others have a different take.

This is bill.

You have mentioned that three of the many people who are in what i call the bob rubin orbit, which larry summers is one.

Burwell on the other two you mentioned, among others, they are all enthralled to bob rubin.

That is like a little club.

Of course they will say great things about each other.

I think you are right.

A look.

I am convinced of this.

Some of this is instinct.

He would take tim geithner for a whole host of reasons.

I think the only reason he might not take larry and i bet he would at this stage is it may be a difficult to win conversation.

Back in 1998, larry summers described himself as a market oriented progressive, someone who favors neither the heavy- handed or the invisible hand but back then he was still an academic turned policymaker.

Since then, he has made an awful lot of money.

Here is the question many americans are concerned with and perhaps the democrats, too.

Is he a progressive or given the fact that he is wealthy will he be protective of his wealthy friends and benefactors?

He will definitely be protective of his wealthy friends and benefactors.

Again, i think that is one of the aspects of the bob rubin orbit.

They are wealthy and focus on protecting the status quo.

Just on fed policy alone, we think janet yellin is more consistent with keeping qe3 in place longer.

Larry has written an occasional column here where he talks about may be winding that down a little bit.

The key role for the next fed chairman is how they unwind qe3. how they unwind quantitative easing.

It is a massive job and a massively important job.

To larry's credit, he does understand that markets a slightly better than perhaps a janet yellin does.

He has worked at a hedge fund and been involved more in the private sector.

Neither has a great track record in understanding capital markets.

How do you balance the facts that he is in the financial industry and that is such a branded the u.s., it is like people don't like them?

Rex's is a big problem.

On the other hand, these days the fed chairman -- i concerned it has gotten so politicized.

It's janet yellin going to be the first woman?

You need somebody to understand these very complex capital markets in this great unwind that is coming with quantitative easing.

It does help to have an understanding of these markets.

I do not want someone who is politically astute but does not have a first clue about the way markets work.

You can understand economics but you might not know markets.

Absolutely.

How do you read the tea leaves?

I think it is likely, but not a certainty.

You cannot but the ranch on it yet.

Larry understands the global economy.

May i just added quickly, he also understands the role of the fed.

He wrote a paper about the role of the fed.

We have a better understanding of who larry summers is.

Al hunt, host of political capital.

When we come back, we will talk about something al cares about because he is a vc guy.

Pan does.

What kind of persons hates -- he is a d.c. guy.

Pandas.

? look at that panda.

Total cutie.

Who could hate something so adorable?

Guess what, our next guest does.

He wrote a column calling pandas a hopeless and wasteful species that the world should have taken up on blogger go.

-- given up on long ago.

I have to start with, do you have a heart and soul?

Good morning.

I do have a heart and soul.

In fairness, i don't actually have any personal animus towards pandas.

I just think we need to speak about conservation rationally and pandas fail a cost-benefit test.

When you speak -- think about conservation rationally, why?

Because spending money on pandas is a waste of money?

I can think of a lot of waste of money we can get rid of tomorrow that would do more good for society in the sum total than we spend on pandas.

That is fair.

You have to look at the total funds available for conservation.

People think they are cute i'm a but from an evolutionary standpoint, they're pretty much doomed.

They have a hard time breathing.

They abandoned their young.

They each one thing, bamboo, which has no nutritional value.

You end up with a situation where zoos and research centers -- you are making a darwinian argument that pandas are not built to survive.

What animal is built to survive in a mankind's world?

That is fair.

Conservation is always a virtue act.

I think we should spend more money on it, it would be great if we could save every species on earth.

There is a finite amount of money that human beings are willing to spend.

Given those limits, the amount of money we devote to pandas is out of proportion.

But how about the fact that people love pandas?

You have to put a dollar value on that?

No, you don't. but look, you are saving pandas at the expense of other species that have a viable long-term future.

It is out of proportion for what you will be able to accomplish long-term.

We will agree to disagree mr.

Lavin because this girl loves pandas.

We will be back into.

? that is going to do it for "market makers." stephanie, what do you say?

I love pandas.

I'm also a fan of larry's comments.

Separated at birth?

Tomorrow we will see how automakers are cashing in on booming car sales.

We have the ceo of subaru america.

We will leave it there and have you head out to the newsroom where it is time for a little on the markets.

Thanks so much, guys.

Taking a look at what markets are doing.

Green across your screen.

Shaking off to class but only in europe, but also emerging markets.

How do you measure the quality?

A make it or break it level here.

Premature here to adopt any long position.

First, we want to highlight blackberry.

Sprints 46 million subscribers -- blackberry hopes it might soften the blow to its market share.

Also, check out tivo.

The digital video recorder getting a boost from a legal settlement.

Now it is time for today's options update.

The s&p index dropped yesterday.

That was on speculation of a u.s.-military strike in syria.

His options play on the fighter.

When you take a look at a bounce we are seeing today, what is your interpretation of that?

Good morning.

You could say it is a little bit of short covering overall.

Yesterday's selloff which was ugly for everyone really sums up what has been a tough month for everyone, but more importantly, we believe the next few weeks leading up to the meeting in mid september is going to be a pivotal point for a loss of asset classes.

Hearing that across the board, how much more downside are you expecting in stock?

We would like to see 1600 of key levels.

Whether or not we get there is another question.

It could be relatively narrow because of this nervousness in the situation in the middle east and developing.

A little tentative on how much lower we could go.

How does that factor into your options strategy.

We are looking at a very near-term modestly bearish strategy.

We'll use the spider and then take a near-term position where we collect premiums by selling the call spread.

We are looking for the s&p. what would be a game changer for you?

You mentioned it was a modestly bearish strategy.

The headline news obviously is syria and what is going on there.

We don't believe it will be resolved any time soon.

Whether we would get development remains to be seen.

If we get a continued selloff, they will look to close that position.

This text has been automatically generated. It may not be 100% accurate.

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