WEBVTT - Markets Must Support Treasuries as Fed Exits, Whalen Says

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<v Speaker 1>Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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<v Speaker 1>Along with my co host Lisa A. Bramowitz. Each day

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<v Speaker 1>we bring you the most important, noteworthy, and useful interviews

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<v Speaker 1>for you and your money, whether you're at the grocery

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<v Speaker 1>store or the trading floor. Find the Bloomberg p m

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<v Speaker 1>L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com.

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<v Speaker 1>You know that you have. Treasury had issued a statement

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<v Speaker 1>yesterday saying that if the Federal Reserve ceases to reinvest

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<v Speaker 1>some or all of its maturing Treasury securities, Treasury would

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<v Speaker 1>likely need to increase the amount of borrowing from the public,

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<v Speaker 1>and under the planned officials would increase both Treasury bill

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<v Speaker 1>and Treasury nominal coupon auction sizes. Here to tell us

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<v Speaker 1>more about this potential process is Chris Whalen. He is

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<v Speaker 1>the chairman of Whalen Global Advisors, and he is the

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<v Speaker 1>author of a new book entitled Ford Men From Inspiration

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<v Speaker 1>to Enterprise. Chris Whalen, thank you for being with us.

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<v Speaker 1>Maybe just comment on what the Treasury Secretary with the

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<v Speaker 1>Treasury Department rather is putting out in a statement that

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<v Speaker 1>they're just going to have to increase borrowing in order

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<v Speaker 1>to make up for the runoff that or the lack

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<v Speaker 1>of buying from the federals arve. Well, of course, pim M,

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<v Speaker 1>thank you for having me on. By the way, the

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<v Speaker 1>government has been subsidized by the FED. That's been the

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<v Speaker 1>primary you know, benefit of quantitative easing and all the

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<v Speaker 1>rest of this. It hasn't really helped the private economy.

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<v Speaker 1>It's been mostly a subsidy program for indented governments. So absolutely,

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<v Speaker 1>if the FED is no longer buying uh, treasuries, if

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<v Speaker 1>they're no longer buying all of the agency issuance in

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<v Speaker 1>the mortgage market, which they are today, Uh, then yeah,

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<v Speaker 1>obviously the markets would have to support that issuance. You know, Chris,

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<v Speaker 1>it seems like we don't hear that much about the

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<v Speaker 1>relationship or discussions between the Treasury Department and the Federal Reserve,

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<v Speaker 1>I mean, how much they're coordinating or not. I mean,

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<v Speaker 1>because as you were saying, the Fed's bomb buying program

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<v Speaker 1>certainly acted as a support to valuations and suppress borrowing

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<v Speaker 1>costs for the US government. Now though not only is

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<v Speaker 1>the is the FED considering allowing its balance sheet to

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<v Speaker 1>run off, but the Treasury came out today with a

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<v Speaker 1>statement saying that they are seriously considering longer dated, ultralong

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<v Speaker 1>dated treasuries, possibly selling fifty or one hundred year bonds.

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<v Speaker 1>I mean, do you think that there's an increasing tension

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<v Speaker 1>between these two agencies? No, no, absolutely not, because the

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<v Speaker 1>Fed is the alter ego of the Treasury. This is

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<v Speaker 1>why it's not allowed to do business directly with the Treasury.

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<v Speaker 1>When they buy and sell debt, they have to go

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<v Speaker 1>through a dealer because otherwise it would be the snake

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<v Speaker 1>eating its tail. Right, Um, the FED doesn't make money.

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<v Speaker 1>They only incur expenses. So whatever they earn off their

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<v Speaker 1>portfolio in terms of interest, right, they subtract or operating

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<v Speaker 1>expenses and they remit that back to the Treasury is

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<v Speaker 1>essentially their forgiving that debt. So Congress pretends that this

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<v Speaker 1>is income, but it's really not. It's it's simply another phase,

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<v Speaker 1>like a Hindu god, of of our government, one being

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<v Speaker 1>the Treasury, the other being the Federal Reserve system. But

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<v Speaker 1>they are back to back there one entity that the

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<v Speaker 1>in economic terms, and you know who's written beautifully about

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<v Speaker 1>this is a good friend Bobby's andvice than a Cumberland advisers,

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<v Speaker 1>you know, he worked at the Atlanta FED. He knows

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<v Speaker 1>this subject cold and when people talk about the FED

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<v Speaker 1>making money, he just laughs because they clearly don't understand

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<v Speaker 1>the relationship. Chris, one of the things that I know

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<v Speaker 1>that my colleague Lisa has Lisa Brahmas has been following

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<v Speaker 1>has been the increase in charge in charge offs for

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<v Speaker 1>subprime automobile loans and also the increase in provisions that

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<v Speaker 1>such as Capital One have had to put aside in

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<v Speaker 1>order to well with and that has to do also

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<v Speaker 1>now with credit, with revolving credit or credit card loans.

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<v Speaker 1>I'm wondering if you could speak to that issue. Do

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<v Speaker 1>you see this as part of a largest cycle trend. Yes,

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<v Speaker 1>Credit costs generally bottomed out in two thousand fourteen or

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<v Speaker 1>early two thousand fifteen, So both for bondholders PIM and

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<v Speaker 1>for banks, the cost of credit is going up. We

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<v Speaker 1>had again a FED induced boom in consumer credit UH

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<v Speaker 1>and also another asset classes and so now we're going

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<v Speaker 1>to see the result of that. Whenever you have a

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<v Speaker 1>period of really low rates, when the central banks are

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<v Speaker 1>out trying to make things easy for debt ors, you

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<v Speaker 1>hide the cost of credit, and when you pull back

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<v Speaker 1>on that and you try to normalize the market, you

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<v Speaker 1>start to see the costs in terms of the faults,

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<v Speaker 1>and certainly in autos you're going to see that. So, Chris,

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<v Speaker 1>when I talk to analysts about this particul uller increase

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<v Speaker 1>in consumer charge offs, uh, they all say, this does

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<v Speaker 1>not appear to be a systemic risk at this point. Um, First,

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<v Speaker 1>do you agree with that? But second, if it's not,

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<v Speaker 1>are there specific companies that you're watching that could suffer

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<v Speaker 1>disproportionately from this deterioration in consumer credit. Well, the companies

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<v Speaker 1>who are really on the front lines with autos or

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<v Speaker 1>the private less source. These are companies that would buy

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<v Speaker 1>cars from the automakers and turn around at least them,

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<v Speaker 1>but they own the residual risk. In other words, if

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<v Speaker 1>that car is not worth dollars when it comes back

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<v Speaker 1>on the lease and they have to sell it for

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<v Speaker 1>eight team, they lose to grant. So the smaller players

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<v Speaker 1>who have done the below prime lending, they're pulling back.

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<v Speaker 1>They saw the losses go up and they're starting to

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<v Speaker 1>take less risk. This means that General Motors Forward all

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<v Speaker 1>the rest of them can sell fewer cars because there's

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<v Speaker 1>less credit in the system. That support the inventory. Right.

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<v Speaker 1>So the real issue to me is the banks are

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<v Speaker 1>going to get more careful. Clearly, bond holders are also

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<v Speaker 1>unnoticed now and they're going to demand better terms, higher

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<v Speaker 1>coupons and you know, in consideration for the losses. But

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<v Speaker 1>they're the non banks, I think, the smaller players who

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<v Speaker 1>have predominated in the subprime sector. They're going to pull

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<v Speaker 1>back a lot, the auto nations and the rest of

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<v Speaker 1>them because they just can't sit there and take losses

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<v Speaker 1>every quarter. They're gonna try and adjust supply it demand

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<v Speaker 1>and as you see the the retail pricing for used

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<v Speaker 1>cars is reflecting this. It's you know, there's too much

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<v Speaker 1>product out there. And as they say, you know, we

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<v Speaker 1>got back to record levels over five years thanks to uh,

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<v Speaker 1>you know, thanks to the FED, and they it helped

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<v Speaker 1>save the automakers. If they don't run at least seventy utilization,

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<v Speaker 1>they're not making money. You know, it's costing them cash.

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<v Speaker 1>So the whole system was driven by credit. And again,

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<v Speaker 1>you know, there are many bubbles and this is just

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<v Speaker 1>one of them. And the who's the Fed desperately trying

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<v Speaker 1>to make something happen. But you know, the economy, population

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<v Speaker 1>growth is half flat. Yeah. Chris Whalen, thank you so

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<v Speaker 1>much for joining us. Chris Whale and as chairman of

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<v Speaker 1>Whale Global Advisors in New York. He is also the

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<v Speaker 1>author of a new book Ford Men, From Inspiration to Enterprise. So,

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<v Speaker 1>as we keep talking about Puerto Rico is moving to

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<v Speaker 1>restructure it's seventy billion dollars of debt in a bankruptcy

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<v Speaker 1>like proceeding that will happen in the US. To get

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<v Speaker 1>more details on how this may proceed, let's bring in

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<v Speaker 1>Michelle Caski, who covers all things Puerto Rico for us

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<v Speaker 1>here at Bloomberg News. And Michelle, can you give us

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<v Speaker 1>a little bit of a sense of how expected or

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<v Speaker 1>not this pretty rapid move to a Title three restructuring happened.

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<v Speaker 1>It does seem very rapid, although um, they've been negotiating

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<v Speaker 1>for a while with creditors, it wasn't getting anywhere, you know,

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<v Speaker 1>some At some moments it looked like maybe, um, something

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<v Speaker 1>would happen m or that they were actually making some progress.

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<v Speaker 1>But unfortunately, um, they just they didn't reach that common ground.

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<v Speaker 1>And the governor to today announced that the Federal Control

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<v Speaker 1>Board would file. He requested that they would file and

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<v Speaker 1>we just have UM just a few moments ago, UM,

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<v Speaker 1>it was filed in court. Well, and I'm looking at

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<v Speaker 1>the letter that Governor Ricardo Rossello UH filed and he

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<v Speaker 1>actually highlighted the stay, the fact that UH, Puerto Rico's

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<v Speaker 1>immunity to lawsuits was lifted earlier this week and that

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<v Speaker 1>that expiration was really what pushed them into having to

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<v Speaker 1>file for this forrastructure. Definitely, without that legal stay, UM,

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<v Speaker 1>then Puerto Rico faces UM lawsuits from creditor seeking repayment

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<v Speaker 1>considering that Puerto Rico has not been paying on its

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<v Speaker 1>debts and UM there's also existing lawsuits out there that

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<v Speaker 1>could move forward. So in order to get additional protection

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<v Speaker 1>from UM new and existing lawsuits, Title three does offer

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<v Speaker 1>Puerto Rico. That what does Title three offer the people

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<v Speaker 1>of Puerto Rico, Well, like you have mentioned, it does

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<v Speaker 1>offer them a more orderly process to restructure the the

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<v Speaker 1>seventy billion that they want to reduce and UM, and again,

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<v Speaker 1>the the creditor lawsuits are suspended UM during a Title three.

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<v Speaker 1>So let's talk about the legal bills because I know

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<v Speaker 1>that you reported several years ago that the bills at

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<v Speaker 1>that point for Puerto Rico were already in the excess

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<v Speaker 1>of sixty million dollars. That was just a beginning salvo,

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<v Speaker 1>and I'm sure that they have only continued to mount.

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<v Speaker 1>Does it mean that Puerto Rico will have to pay

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<v Speaker 1>less in legal fees if there is a restructuring that's

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<v Speaker 1>in a more orderly bankruptcy type of way, or is

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<v Speaker 1>that not part of this picture? Well? I think either

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<v Speaker 1>way with or without a title three, Um, Puerto Rico, UM,

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<v Speaker 1>you know, needs to pay their lawyers, and they will

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<v Speaker 1>be they will be um needing this outside legal help.

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<v Speaker 1>And it's going to be very costly. All right, it's

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<v Speaker 1>gonna be we know this is gonna be very very costly.

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<v Speaker 1>It already is very very costly. Will this allow the

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<v Speaker 1>Puerto Rican I was trying to get it with the people.

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<v Speaker 1>Will this allow the Puerto Rican commonwealth to focus on

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<v Speaker 1>fixing the economy, which then will supposedly create revenue, tax

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<v Speaker 1>revenue that will be able to support the commonwealth, because

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<v Speaker 1>otherwise this is like a uh you know there, it's

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<v Speaker 1>like a double track reality. You've got one group over

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<v Speaker 1>here and then you've got the people who are actually

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<v Speaker 1>living the problems of Puerto Rico on the other side. No, definitely,

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<v Speaker 1>I mean that is that that is their Their biggest

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<v Speaker 1>challenge right now is to get economic activity going again

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<v Speaker 1>on the island. They need that and hopefully the you know,

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<v Speaker 1>the court will see that as well. And um, have

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<v Speaker 1>they enacted anything. I mean, for example, one of the

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<v Speaker 1>reasons that Puerto Rico is in such dire straits as

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<v Speaker 1>the federal government granted a triple tax free UH status

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<v Speaker 1>for municipal bond investors. Plus they gave huge tax breaks

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<v Speaker 1>to the pharmaceutical industry to manufacture their products there. Sure,

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<v Speaker 1>I mean the new governor, I mean, his plan is

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<v Speaker 1>he wants to increase tourism on the island. He wants

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<v Speaker 1>to um have the private sector more involved in in

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<v Speaker 1>hiring and and taking over some, um, some of the

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<v Speaker 1>programs that the central government has been doing. He definitely

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<v Speaker 1>wants to increase job creation in the private sector and

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<v Speaker 1>to reduce the government's pay payroll. Michelle, I'm not seeing

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<v Speaker 1>much of reaction in Puerto Rico bonds. Why is that? Well, remember,

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<v Speaker 1>the news just came out. The headlines first came out

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<v Speaker 1>at about ten forty and so it's only been about

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<v Speaker 1>an hour and we don't typically see as much active

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<v Speaker 1>trading in municipal bonds as you would see in for instance,

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<v Speaker 1>the stock market. Um so, but we will see some

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<v Speaker 1>some trading today and um in the past couple of days, actually,

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<v Speaker 1>Puerto Rico bonds have been trading up in price. And

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<v Speaker 1>what I've been hearing from people as they believe that's

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<v Speaker 1>because of the medicaid money that the island did receive

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<v Speaker 1>from from Congress. I just want to say, just breaking

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<v Speaker 1>across the bloomberg that assured Guarantee and MBI a drop

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<v Speaker 1>their legal cases against Puerto Rico after this latest filing.

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<v Speaker 1>So it seems like, uh, this is moving toward the

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<v Speaker 1>direction a lot of people thought was inevitable. Right, the

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<v Speaker 1>game of chicken maybe actually over by now. How long

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<v Speaker 1>is this going to take? Michelle? Oh gosh, I mean

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<v Speaker 1>today the governor was saying that it could take years. Um,

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<v Speaker 1>you know it. It all depends on how in what

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<v Speaker 1>a judge can do. Can you bring everybody together? Um?

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<v Speaker 1>And he or she can can that pon that judge

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<v Speaker 1>bring everyone together and and and strike a deal? Thank

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<v Speaker 1>you so much, Michelle Casky. Yeah, I was just gonna

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<v Speaker 1>send following the news in Puerto Rico just to put

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<v Speaker 1>it into perspective, the unemployment rate for Puerto Rico is

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<v Speaker 1>over eleven and a half percent. Just to get that

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<v Speaker 1>information out there a lot of problems. Yeah, Michelle Casky

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<v Speaker 1>is our Puerto Rico reporter for can be doing this

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<v Speaker 1>for a long time. It's not going to be over.

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<v Speaker 1>But there's so much money at stake, and as you

0:13:36.440 --> 0:13:38.280
<v Speaker 1>keep pointing out, and rightly so, Paim, there are a

0:13:38.280 --> 0:13:39.719
<v Speaker 1>lot of people at stake as well. Well. You have

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<v Speaker 1>people at universities who wonder whether they're gonna be able

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<v Speaker 1>to get a job when they graduate. We want to

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<v Speaker 1>take a moment to let you know about something new

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<v Speaker 1>Bloomberg dot com. Slash lens. What do Filipino President Rodrigo

0:14:33.640 --> 0:14:39.080
<v Speaker 1>Dutarte have in common with egypt General Abdela l c

0:14:39.320 --> 0:14:44.640
<v Speaker 1>C and Turkey's President Richie Urigon. Well, here to tell

0:14:44.760 --> 0:14:47.800
<v Speaker 1>us is Eli Lake. Eli Lake is a columnist for

0:14:47.920 --> 0:14:51.840
<v Speaker 1>Bloomberg View. He can be followed on Twitter at Eli

0:14:52.080 --> 0:14:54.800
<v Speaker 1>Lake and Eli Go ahead, tell us what do these

0:14:54.880 --> 0:14:58.000
<v Speaker 1>three world leaders have in common? Well, they've all been

0:14:58.120 --> 0:15:02.720
<v Speaker 1>courted by President Trump. Uh. In slightly over the top

0:15:02.840 --> 0:15:06.720
<v Speaker 1>rhetoric for an American president. Um. You know, in the

0:15:06.800 --> 0:15:09.760
<v Speaker 1>case of Duterte, you've got somebody who who's boasted about

0:15:10.440 --> 0:15:15.480
<v Speaker 1>um an absolutely vicious campaign against his nation's drug dealers. Um,

0:15:15.760 --> 0:15:19.200
<v Speaker 1>and has basically admitted that this sort of vigilante campaign

0:15:19.240 --> 0:15:24.440
<v Speaker 1>its results in the extradicial, extra judicial killings of drug dealers. Um.

0:15:25.080 --> 0:15:27.480
<v Speaker 1>You know, he has widely seen as a sort of

0:15:27.480 --> 0:15:29.920
<v Speaker 1>scoge from the world stage. And yet in the phone

0:15:30.000 --> 0:15:33.440
<v Speaker 1>call over the weekend, Trump invited him to the White House. UM.

0:15:34.400 --> 0:15:38.160
<v Speaker 1>You know. In in the case of Urdawan, the president

0:15:38.200 --> 0:15:42.560
<v Speaker 1>of Turkey, you know, he has been driving Turkey into autocracy. Uh,

0:15:42.720 --> 0:15:46.200
<v Speaker 1>you know, over a period of several years now. But

0:15:46.360 --> 0:15:49.080
<v Speaker 1>last month there was a referendum that consolidated his power

0:15:49.600 --> 0:15:52.720
<v Speaker 1>and could keep him in office until, you know, for

0:15:52.800 --> 0:15:56.560
<v Speaker 1>the next dozen years. Uh. This was widely condemned by

0:15:56.560 --> 0:16:00.280
<v Speaker 1>people who care about Turkey's democracy, and Trump called up

0:16:00.880 --> 0:16:04.400
<v Speaker 1>after the referendum results came in to congratulate him. Um,

0:16:04.600 --> 0:16:06.440
<v Speaker 1>so all of this sort of an example of how

0:16:06.560 --> 0:16:09.760
<v Speaker 1>he has buttered up these authoritarians. Yeah, Eli, you wrote

0:16:09.800 --> 0:16:12.080
<v Speaker 1>a column. I love the title, Trump decides to make

0:16:12.120 --> 0:16:15.400
<v Speaker 1>it springtime for despots. Uh, you know, talking about all

0:16:15.440 --> 0:16:20.960
<v Speaker 1>of these overtures too widely feared and frankly reviled, certainly

0:16:21.080 --> 0:16:24.360
<v Speaker 1>by human rights organizations leaders but who have sort of

0:16:24.440 --> 0:16:28.440
<v Speaker 1>autocratic rule. That said, in this column, you point out

0:16:28.760 --> 0:16:31.480
<v Speaker 1>that it does not appear that there is necessarily a

0:16:31.600 --> 0:16:36.280
<v Speaker 1>strategy behind these overtures by President Trump. And you know,

0:16:36.880 --> 0:16:39.760
<v Speaker 1>can we just chalk this up to shock value and

0:16:40.160 --> 0:16:41.840
<v Speaker 1>you know, headlines that are going to get a lot

0:16:41.880 --> 0:16:44.920
<v Speaker 1>of clicks. Well, there may be there may be strategies

0:16:45.000 --> 0:16:48.000
<v Speaker 1>that say, um, you know, in the case of dot

0:16:48.720 --> 0:16:52.520
<v Speaker 1>really bad guy, very repressive for danger to the Philippines.

0:16:52.720 --> 0:16:56.840
<v Speaker 1>But somebody who under the last year of Obama really

0:16:56.880 --> 0:16:59.000
<v Speaker 1>did threaten to come out of the US Alliance orbit

0:16:59.080 --> 0:17:01.880
<v Speaker 1>and into China's embrace that would be very bad for

0:17:01.960 --> 0:17:05.560
<v Speaker 1>US strategically. Um, you know, you could argue that Trump

0:17:05.680 --> 0:17:08.480
<v Speaker 1>is trying to sort of woo him back in this

0:17:08.640 --> 0:17:11.440
<v Speaker 1>fairly unconventional way. What I would say is that you

0:17:12.000 --> 0:17:14.800
<v Speaker 1>America is an accessible nation, and we don't need to

0:17:15.960 --> 0:17:20.760
<v Speaker 1>basically forget our values and our principles as a as

0:17:20.800 --> 0:17:24.960
<v Speaker 1>a as a liberal democracy in order to work practically

0:17:25.160 --> 0:17:27.959
<v Speaker 1>with countries like the Philippines when they have less than

0:17:28.040 --> 0:17:31.320
<v Speaker 1>ideal leaders. And it's Trump's style to sort of be

0:17:31.440 --> 0:17:33.840
<v Speaker 1>over the top in both directions. When he really doesn't

0:17:33.880 --> 0:17:37.679
<v Speaker 1>like something, he uses hyperbolic rhetoric in one direction. When

0:17:37.720 --> 0:17:41.240
<v Speaker 1>he decides he likes somebody, he used a hyperbolic language

0:17:41.280 --> 0:17:43.080
<v Speaker 1>in the other direction. We're all kind of getting used

0:17:43.080 --> 0:17:46.280
<v Speaker 1>to that, um you know, more than a hundred days

0:17:46.320 --> 0:17:48.080
<v Speaker 1>in now. But at the same time, it is a

0:17:48.119 --> 0:17:50.560
<v Speaker 1>troubling trend, and I thought it was important to sort

0:17:50.560 --> 0:17:53.000
<v Speaker 1>of highlight it. Eli, would you have any idea why

0:17:53.040 --> 0:17:58.440
<v Speaker 1>he castigates the allies of the United States, such as Canada, Mexico, Germany,

0:17:58.680 --> 0:18:01.399
<v Speaker 1>even NATO. Well, you know, it's a little bit of

0:18:01.440 --> 0:18:03.720
<v Speaker 1>a mixed bag. I have also heard that Trump does

0:18:03.840 --> 0:18:06.760
<v Speaker 1>talk a lot with justin Trudeau. He has a lot

0:18:06.840 --> 0:18:09.600
<v Speaker 1>of communications with Theresa May of the United Kingdom, and

0:18:09.720 --> 0:18:12.760
<v Speaker 1>even recently he's had, you know, a few phone calls

0:18:12.800 --> 0:18:15.000
<v Speaker 1>with angel Angelo Merkel, who he showed up when she

0:18:15.160 --> 0:18:19.080
<v Speaker 1>visited early in his presidency, wouldn't shake her hand. Um.

0:18:19.320 --> 0:18:21.000
<v Speaker 1>But I think you know, this gets back to some

0:18:21.160 --> 0:18:25.640
<v Speaker 1>of his you know, longstanding uh campaign Radican worldview. Um.

0:18:25.920 --> 0:18:27.399
<v Speaker 1>And this is something that he's been talking about for

0:18:27.480 --> 0:18:29.520
<v Speaker 1>like twenty thirty years, which is that he deals with

0:18:29.560 --> 0:18:33.800
<v Speaker 1>the United States kits uh screwed on trade fields. And

0:18:33.960 --> 0:18:36.000
<v Speaker 1>so this is something that's really the top of his

0:18:36.119 --> 0:18:39.000
<v Speaker 1>mind in a way that we haven't seen in recent

0:18:39.119 --> 0:18:41.200
<v Speaker 1>modern presidents, where you know, the idea that we would

0:18:41.200 --> 0:18:43.679
<v Speaker 1>have these free trade deals was not debated really between

0:18:43.680 --> 0:18:46.160
<v Speaker 1>the two major parties, with the exception of maybe Ross

0:18:46.240 --> 0:18:49.239
<v Speaker 1>Perrot and NAFTA. But he was member an independent candidate. Well,

0:18:49.280 --> 0:18:52.040
<v Speaker 1>Trump's the president now, and this is he he represents

0:18:52.080 --> 0:18:54.119
<v Speaker 1>the world view we associate with guys like pack you

0:18:54.240 --> 0:18:57.080
<v Speaker 1>cat and and others. Let's say, um, you know, um,

0:18:57.240 --> 0:18:59.440
<v Speaker 1>the global economy hurts a lot of Americans and we

0:18:59.720 --> 0:19:02.720
<v Speaker 1>just about that. Well, Eli, when you talk with people

0:19:02.880 --> 0:19:07.200
<v Speaker 1>in Washington off the record, do you hear more support

0:19:07.600 --> 0:19:11.879
<v Speaker 1>for alliances with some of these UH countries that have

0:19:12.040 --> 0:19:15.560
<v Speaker 1>been otherwise shut out by virtue of their being good

0:19:15.640 --> 0:19:21.719
<v Speaker 1>trade partners regardless of their humanitarian policies. It depends. I mean,

0:19:22.160 --> 0:19:25.480
<v Speaker 1>what's interesting here is that UM a lot of Democrats

0:19:25.520 --> 0:19:29.000
<v Speaker 1>and liberals really jumped on the decarc comments in Urdawan

0:19:29.640 --> 0:19:32.520
<v Speaker 1>UM from Trump. But you know, if you go back

0:19:32.600 --> 0:19:35.800
<v Speaker 1>ten years, the major criticism of George W. Bush was

0:19:35.880 --> 0:19:39.200
<v Speaker 1>that he was too much of an idealistic ideologue when

0:19:39.240 --> 0:19:41.560
<v Speaker 1>it came to the U S. Roland spreading democracies, and

0:19:41.600 --> 0:19:43.920
<v Speaker 1>this is one of the impulses that got us into

0:19:43.920 --> 0:19:46.880
<v Speaker 1>the Iraq War. So we've seen such a dramatic shift

0:19:47.000 --> 0:19:49.800
<v Speaker 1>in the Republican Party in a decade on this that

0:19:49.920 --> 0:19:52.359
<v Speaker 1>I think a lot of people do have whiplash. I

0:19:52.400 --> 0:19:54.680
<v Speaker 1>would say that the Trump approach where it seems like,

0:19:55.040 --> 0:19:57.440
<v Speaker 1>you know, it doesn't even factor in his public comments

0:19:57.480 --> 0:20:00.159
<v Speaker 1>at times, although I was told by my gla On,

0:20:00.200 --> 0:20:02.159
<v Speaker 1>the spokesman for the National Security Council, that he does

0:20:02.240 --> 0:20:04.520
<v Speaker 1>bring up human rights issues in private with some of

0:20:04.560 --> 0:20:08.720
<v Speaker 1>these leaders, like the Egyptian General l cc um. But

0:20:09.320 --> 0:20:11.160
<v Speaker 1>in that in that respect, I think that we're sort

0:20:11.160 --> 0:20:12.800
<v Speaker 1>of still looking for a bit of a middle ground.

0:20:12.840 --> 0:20:14.680
<v Speaker 1>And what we've seen is that even in the first

0:20:14.760 --> 0:20:17.160
<v Speaker 1>hundred days, Trump has shown that he's willing to evolve

0:20:17.280 --> 0:20:19.480
<v Speaker 1>his position. Just look at what he's done on China

0:20:19.520 --> 0:20:23.240
<v Speaker 1>and Russia. Um, he's pretty much flip flop those countries

0:20:23.280 --> 0:20:26.280
<v Speaker 1>in his mind in some ways. Um. So there is

0:20:26.320 --> 0:20:27.920
<v Speaker 1>a chance, I think where you could sort of see

0:20:28.040 --> 0:20:30.600
<v Speaker 1>some of this rhetoric maybe calm down. But I think

0:20:30.760 --> 0:20:32.560
<v Speaker 1>the other real prospect theories that we just have to

0:20:32.600 --> 0:20:34.320
<v Speaker 1>adjust for the fact that we have a president who

0:20:34.359 --> 0:20:37.080
<v Speaker 1>pops off, says what's on his mind doesn't always go

0:20:37.200 --> 0:20:39.720
<v Speaker 1>here with our far with the rest of his government's

0:20:39.720 --> 0:20:42.000
<v Speaker 1>foreign policy. But you know we're gonna have to adjust

0:20:42.040 --> 0:20:45.080
<v Speaker 1>for that. Well, well, thanks for helping us adjust to it.

0:20:45.359 --> 0:20:48.560
<v Speaker 1>Eli la is a Bloomberg View contributor. Remember to read

0:20:48.720 --> 0:20:52.760
<v Speaker 1>his most recent column, Trump decides to make it springtime

0:20:52.840 --> 0:21:00.040
<v Speaker 1>for Despots. That's on Bloomberg View dot com. Thanks for

0:21:00.160 --> 0:21:02.760
<v Speaker 1>listening to the Bloomberg P and L podcast. You can

0:21:02.800 --> 0:21:06.560
<v Speaker 1>subscribe and listen to interviews at Apple Podcasts, SoundCloud, or

0:21:06.680 --> 0:21:10.080
<v Speaker 1>whatever podcast platform you prefer. I'm pim Fox. I'm on

0:21:10.200 --> 0:21:14.040
<v Speaker 1>Twitter at pim Fox. I'm on Twitter at Lisa Abramo.

0:21:14.160 --> 0:21:16.760
<v Speaker 1>It's one before the podcast. You can always catch us

0:21:16.800 --> 0:21:18.359
<v Speaker 1>worldwide on Bloomberg Radio