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Speaker 1: Ye, Welcome to the Bloomberg Surveillance podcast. I'm Tom Keene

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Speaker 1: Jay Ley. We bring you insight from the best in economics, finance,

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Speaker 1: investment and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com and of course on the Bloomberg the

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Speaker 1: interview of the morning We've been were delighted to be

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Speaker 1: joined by the former UK Prime Minister. He is a

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Speaker 1: Tony Blair, who opposes Brexit and of course has campaigned

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Speaker 1: for a second referendum. Mr Tony Blair, thank you for

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Speaker 1: joining Surveillance once again. What is the chance now of

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Speaker 1: a no deal? Is it fifty fifty? I think the

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Speaker 1: chances of a no deal are very small actually, But

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Speaker 1: it's really what's happened in the in the past few

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Speaker 1: days is that Parliament in a sense has taken charge

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Speaker 1: of this process, and there was a defeat for the

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Speaker 1: government the other night, which effectively means that Parliament now

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Speaker 1: has the right to go through all the different options

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Speaker 1: on bre Exit. So I think what will happen is

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Speaker 1: it's highly unlikely that her deal will pass because it's

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Speaker 1: being attacked on many different fronts by many different groups.

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Speaker 1: But then I think Parliament will go through what are

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Speaker 1: all the potential alternatives, and that will include obviously the

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Speaker 1: possibility that if Parliament can't reach an agreement, if there's

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Speaker 1: a blockage essentially in Parliament, then we go back to

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Speaker 1: the people in order for the issue to be resolved

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Speaker 1: and resolved finally. So, but I don't think there's a

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Speaker 1: majority in Parliament for no deal. I think, on the contrary,

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Speaker 1: there's a big majority in Parliament against no deal. The

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Speaker 1: question is is another deal of her deal fails, and

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Speaker 1: then if you can't get an agreement for anything, go

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Speaker 1: back to the people. All right? Have you spoken Mr

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Speaker 1: Blair to the Prime Minister recently about how to handle Brexit? No,

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Speaker 1: I'm afraid this is a situation of which although I

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Speaker 1: have immense sympathy for the difficulty for her position, by

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Speaker 1: the way, and I you know, having done the job,

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Speaker 1: I know how hard it is and she's been dealt

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Speaker 1: a very very difficult hand, but I'm afraid we're just

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Speaker 1: in fundamental disagreement with this. She she believes the important

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Speaker 1: thing is to do Brexit even if we still remain

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Speaker 1: tied to Europe's rules. In my view, if we do

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Speaker 1: that type of brexit, it's effectively pointless, and the people

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Speaker 1: who support Brexit don't like it, and the people like

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Speaker 1: me who want to remain in the European Union don't

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Speaker 1: like it either. And the trouble is all the way

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Speaker 1: through this negotiation, you hither to minimize economic damage as

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Speaker 1: a result of Brexit, because we've been four and a

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Speaker 1: half decades in the European Union. We build up investment

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Speaker 1: and commercial and trading relationships there. You why the stay

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Speaker 1: close to Europe's rules to minimize e can make damage.

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Speaker 1: But in which case, in a way, you've got the

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Speaker 1: pointless Brexit, or you break out of those rules, in

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Speaker 1: which case there will be economic damage, and that's the

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Speaker 1: painful Brexit. So this is the This is the dilemma

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Speaker 1: at the heart of the negotiation, and I think there's

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Speaker 1: such disagreement now about what form breaks that should take.

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Speaker 1: Really the only way you can resolve this, and we've

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Speaker 1: had thirty months of negotiation is to go back and

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Speaker 1: ask that people, come on, what what do you really

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Speaker 1: think now? Do we carry on with Brexit? And if

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Speaker 1: we do, then it's going to be, you know, the

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Speaker 1: heart Brexit that the true Brexit people want, or do

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Speaker 1: you remain in the European Union, and you've asked for

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Speaker 1: a second referendum for quite some time and it's definitely

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Speaker 1: gathering momentum. But talk me through about what strategy you're

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Speaker 1: now employing to try and get that through. So there's

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Speaker 1: a vote next Tuesday, Um, it's almost impossible for the

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Speaker 1: Prime Minister get it through. Do attach to that vote

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Speaker 1: a second referendum or does it come later? And what's

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Speaker 1: the timeline for a possible second referendum. There's all sorts

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Speaker 1: of various procedure of ways you can get to the vote.

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Speaker 1: But I think the political reality is people will only

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Speaker 1: go for a second referendum if it's clear Parliament can't

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Speaker 1: agree what should happen in respect to Brexit. And I

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Speaker 1: think therefore what will happen is that her deal will

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Speaker 1: be put If her deal cannot succeed, then I think

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Speaker 1: there may well be other types of Brexit that could

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Speaker 1: be put forward. You could have either a closer relationship

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Speaker 1: with Europe or a less close relationship. I personally think

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Speaker 1: all of those will fail as well. And then it's

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Speaker 1: really at the point at which is clear Parliament can't

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Speaker 1: agree that you go back to the people. Is the

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Speaker 1: only way of resolution. Mr Blair, wonderful to speak to

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Speaker 1: you from America. I'm a confused American over Brexit. Of course,

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Speaker 1: we've just seen her the passing of the forty one president.

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Speaker 1: There's an existential crisis in the Republican Party in America,

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Speaker 1: and I would respectfully suggest an existential pride crisis in

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Speaker 1: the Labor Party of the United Kingdom. You need to

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Speaker 1: clement autly win of is this vote December eleven the

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Speaker 1: opportunity for your Labor Party to get its act together? Um? Well,

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Speaker 1: I think it's highly unlikely that in the event of

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Speaker 1: the Prime Minister being defeated on Brexit that you end

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Speaker 1: up with the general election. You know, I think this

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Speaker 1: for the Conservative Party to risk a general election with

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Speaker 1: Brexit as an issue in that election would risk them

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Speaker 1: rerunning the problem they had last year when they called

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Speaker 1: the snap election, expected to win by large majority and

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Speaker 1: then lost their majority altogether. So my best guess is,

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Speaker 1: actually Tom that what happens is that, even though, of

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Speaker 1: course the Labor Party would like to have a general election,

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Speaker 1: I think the Labor leaderships attempt to do so is

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Speaker 1: most likely to be voted down. So you would have

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Speaker 1: a situation where the Prime Minister's deal ails, you have

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Speaker 1: an attempt to pass a motion of no confidence. I

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Speaker 1: would be surprised if that succeeded, and then I think

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Speaker 1: you get into a much more vigorous debate about how

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Speaker 1: do you resolve this Brexit issue, because remember, if we

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Speaker 1: don't resolve it come the end of March, we go

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Speaker 1: out of the European Union. But can this be an

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Speaker 1: opportunity for the United Kingdom to find some new middle

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Speaker 1: ground in its politics? We're having the same discussion in

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Speaker 1: America and that there's raging Brexit debate in the polarities

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Speaker 1: and fracturing of the Conservative Party the Tories. Fine, is

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Speaker 1: it an opportunity for your nation to find a new

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Speaker 1: middle ground? Right? So what you've got in the UK

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Speaker 1: today is you've got a Conservative Party that's deeply split

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Speaker 1: over Brexit, which is in a sense a debate about

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Speaker 1: national identity. And then you've got a Labor Party. I'm

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Speaker 1: afraid that it is also very divided at the moment

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Speaker 1: between what if you like as a leadership that's moved

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Speaker 1: very far to the left, and then you know those

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Speaker 1: that stand more and frankly, my tradition within the Labor

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Speaker 1: party that we've much more centrist. So I think whilst

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Speaker 1: Briggs is being resolved, all those bigger political issues, what

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Speaker 1: happens to the future British politics. I think those will be,

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Speaker 1: as it were, on the back burner whilst Briggs it

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Speaker 1: is the issue that gets decided. But I think the

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Speaker 1: moment breaks this out of the way, there will be

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Speaker 1: a pretty vigorous debate about where does British politics go. Um,

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Speaker 1: Tony Blair, can I go back to the second referendum

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Speaker 1: that you've been pushing for. First of all, do you

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Speaker 1: have any private polling um and what does it show

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Speaker 1: support for Remain? What does that polling show and what

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Speaker 1: question would you put in that referendum? So it does

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Speaker 1: show support for Remain, but I think you have to

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Speaker 1: say it's still very very contested within the opinions of

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Speaker 1: the British people, so there's still a great division about it.

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Speaker 1: The thing that's interesting though, is that the people who

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Speaker 1: vote to for Brexit, and we're most ardently in favor

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Speaker 1: of Brexit, they're not really in favor of the British

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Speaker 1: Prime Minister's deal. They think that's much too soft. They're

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Speaker 1: in favor of a much tougher, harder Brexit. So you've

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Speaker 1: got that division within the British people. As for the

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Speaker 1: question in the referendum, I mean, this is again a

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Speaker 1: big debate, what question do you ask? But I think

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Speaker 1: in the end the British people they want either to

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Speaker 1: have a proper Brexit or they want to stay. I

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Speaker 1: don't think there's really support amongst the British people for

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Speaker 1: a half in, half out solution because the problem with

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Speaker 1: that is, as I say, it leaves you tied to

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Speaker 1: Europe's rules but still um you know. Therefore, and as

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Speaker 1: a result of being tied to the rules, you're unable

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Speaker 1: to do the things the Brexiteers say they want to do,

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Speaker 1: but you're out of the European Union decision making apparatus.

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Speaker 1: So I think the weirdest thing would be to end

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Speaker 1: up in a situation where we still remain anchored in

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Speaker 1: Europe's rules in some way in the Customs Union and

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Speaker 1: actually in a single market, but we've lost our say

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Speaker 1: over those. That's why I think in the end the

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Speaker 1: question probably has got to address the two propositions that

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Speaker 1: overwhelmingly have most support amongst the British people, which is

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Speaker 1: a clear stay or a clear leave. How many people

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Speaker 1: in the cabinet do you think support a second referendum

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Speaker 1: At the moment, the cabinet would be against the second referendum. Um.

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Speaker 1: But here's the problem, and it's one of the reasons why.

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Speaker 1: For example, I completely understand from the business point of view,

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Speaker 1: many business people say to me, Look, Theresa May's deal, okay,

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Speaker 1: is not a very good deal, but it's the only

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Speaker 1: deal we've got at least it settles the situation. Let's

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Speaker 1: just go with it. And the point you raised about

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Speaker 1: the cabinet is very apposite in this sense. The truth

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Speaker 1: is this deal won't really settle anything because some members

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Speaker 1: of the cabinet don't really agree with the deal, but

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Speaker 1: just believe tactically it's better to get Britain out of

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Speaker 1: the European Union post March and then carry on the debate,

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Speaker 1: whereas other members of the cabinet would genuinely support her deal.

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Speaker 1: So the problem in a way is that even within

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Speaker 1: the cabinet there isn't really cohesion or agreement as to

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Speaker 1: what the future holds. And that's why I think that

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Speaker 1: you will continue over the next couple of weeks or so,

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Speaker 1: maybe slightly longer than that to get a sort of

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Speaker 1: debate around which version of breaks it should prevail. That

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Speaker 1: my instinct is that when each of these versions is

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Speaker 1: put before the House of Commons, none will actually command

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Speaker 1: the majority, because there will be enough volks against each

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Speaker 1: one of them to create this blockage. And therefore, even

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Speaker 1: if the Cabinet at the moment is saying no, no,

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Speaker 1: we don't want another referendum, if you end up with

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Speaker 1: this stalemate, this gridlock in parliament, it really does become

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Speaker 1: the only sensible way of resolving this, Mr Blair, one

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Speaker 1: final question if I may, and of course we know

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Speaker 1: the fans at your Newcastle, United can be upset from

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Speaker 1: time to time. We have as upset within the Bank

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Speaker 1: of England. This essay, Mr Blair, from Governor King was

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Speaker 1: extraordinary for Bloomberg two days ago, three days ago. If

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Speaker 1: the United Kingdom Parliament supports Prime Minister May's plan, it

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Speaker 1: will never be forgiven more the result of incompetence of

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Speaker 1: a high order. Governor King goes on to say, the

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Speaker 1: worst of all worlds not facing an economic crisis, the

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Speaker 1: nation is confronting a deep political crisis, and then he

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Speaker 1: quotes the poet from Wales vassal states do not go

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Speaker 1: gently into that good night. They rage. Will we see

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Speaker 1: a rage in the United Kingdom and what will be

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Speaker 1: the character of it if Brexit goes through. Well, I

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Speaker 1: think what what Governor King has done is put his

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Speaker 1: finger on the problem, which is the risk of Theresa

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Speaker 1: Maze deal. Isn't it really satisfies no one? And therefore

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Speaker 1: this is what one of the reasons why I think

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Speaker 1: you've got to go back to the people, but because

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Speaker 1: her deal is this kind of halfway house. But if

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Speaker 1: it doesn't satisfy the people who most vigorously campaigned for leave,

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Speaker 1: and it doesn't satisfy the people like me who want

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Speaker 1: to remain, then and by the way, when you look

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Speaker 1: at the detailers Governor King's doing, it's not really a

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Speaker 1: very good deal. Then yes, your risk is that rather

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Speaker 1: than settling this issue and calming everyone down, you just

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Speaker 1: have a great sense in the country that this thing

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Speaker 1: hasn't been properly resolved, and both sides remain angry. This

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Speaker 1: is why I think, you know, when even though it

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Speaker 1: sounds improbable, the only way actually reuniting the country is

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Speaker 1: to say, look, we've had thirty months from negotiation, our

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Speaker 1: knowledge of this issue is vastly enlarged. Parliament can't reach

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Speaker 1: an agreement. So let's go back and we go back

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Speaker 1: on the paces that each side remain and leave say okay,

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Speaker 1: this is it. Um, this will determine it. If there

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Speaker 1: is even a narrow vote one way or another, that's

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Speaker 1: for a generation. But both sides can make their case

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Speaker 1: and make their case with the knowledge of what has

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Speaker 1: happened in the negotiation and without this deal, which comes

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Speaker 1: from a good place. I mean, let me say this

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Speaker 1: to you. The Prime Minister is genuinely try to do

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Speaker 1: a best with this issue. But what Governor King has

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Speaker 1: put his finger on is the central weakness of the deal.

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Speaker 1: In the end, it's not a very good deal and

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Speaker 1: it doesn't really please anyone, and that's why I think

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Speaker 1: it will struggle to pass the House of Commons. All right,

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Speaker 1: Mr Tony Blair, thank you so much. That was of

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Speaker 1: course the former UK Prime Minister, Tony Blair and Court

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Speaker 1: will have special coverage on Bloomberg TV all week. Tom

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Speaker 1: Keen will be joining me at Westminster from Monday. Right now,

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Speaker 1: I want all of our global audience to know the

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Speaker 1: distinctions of the market reaction last night. I was occupied

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Speaker 1: at some fancy hotel, relaxing pharaoh always Annis Bloomberg, you

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Speaker 1: saw the reaction, John, Yeah, I was logged in like

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Speaker 1: I always am at that time of the evening, just

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Speaker 1: to get a feel for the Asian session, see what's happening,

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Speaker 1: and get a film for the news. And then the

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Speaker 1: headline dropped, and the headline dropped from the Globe and

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Speaker 1: Mail in Canada that Canada has arrested the w CFO.

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Speaker 1: And then I looked for the price action. It was early, okay,

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Speaker 1: but it just wasn't there in FX that didn't see it.

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Speaker 1: Then about an hour later, you've got US futures opening

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Speaker 1: as the news slowly came out, we got to build

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Speaker 1: a bit of a picture. When was the CFO detained?

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Speaker 1: Will December feet the same day that the President of

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Speaker 1: the United States and President Shi Jing Ping were down

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Speaker 1: in Buenosara's, Argentina negotiating a trade deal. So the big

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Speaker 1: question now is what happens next. This was at the

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Speaker 1: request of the United States. Does it go any further?

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Speaker 1: And atensions escalate with China? Tim Colpan joining US from

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Speaker 1: high pay Tim. It's me by surprise. I'm surprised it

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Speaker 1: stayed quiet for as long as it did. Where does

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Speaker 1: this go next? Well, that's the fantastic question, because you know,

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Speaker 1: if you look back to the ZT case which you mentioned,

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Speaker 1: you know, they managed to find ZT guilty of breaking

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Speaker 1: sanctions on selling stuff to Iran. ZT was copped with

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Speaker 1: a fine and told you have to fire some key

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Speaker 1: staff who organized those dealings with Iran. Z said all right,

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Speaker 1: no problem, we'll do that. Very sorry, um, and we're

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Speaker 1: very contrite about the whole thing. But not long later,

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Speaker 1: they actually renamed on that deal, didn't fire the staff

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Speaker 1: for all the things that the US said they should do.

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Speaker 1: And so the US turned around and put a clamp

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Speaker 1: on them being able to buy US technology you know, uh,

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Speaker 1: components and so forth from from US companies. But again,

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Speaker 1: instead of getting like a seven year ban, the very

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Speaker 1: transactional US administration just said, okay, just pay a bigger

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Speaker 1: fine and we'll walk all it even. And so now

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Speaker 1: that brings us to Huawei, right, I mean, what is

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Speaker 1: what the US wants is that they just want more

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Speaker 1: money out of Huawei. Is they just want to be

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Speaker 1: able to say, give us a whole lot of money

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Speaker 1: and we'll call it even Do they have a bigger

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Speaker 1: plan here? And that's the really that the key question.

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Speaker 1: You know, my call today, I call them, you know,

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Speaker 1: the dogs that caught the car. They're barking and barking.

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Speaker 1: Now they've got Huawei in their sights. What do they want?

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Speaker 1: They're not exclusive to the United States government either. BT

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Speaker 1: in the UK are planning to remove equipment from its

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Speaker 1: four G network Huawei equipment. They're planning to exclude Huawei

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Speaker 1: from bidding for five G contracts as well. It seems

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Speaker 1: to me that this company is not just in the

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Speaker 1: headlights of the US government, but in governments around the world,

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Speaker 1: including the United Kingdom too. That's true. Now, there is

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Speaker 1: two separate issues we're talking about here, and it's really

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Speaker 1: important to get them clear. One is breaking sanctions on

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Speaker 1: dealings with Iran selling equipment to a rum that the

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Speaker 1: U S says you shouldn't do. The other is cybersecurity

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Speaker 1: and the concerns about Huawei but backdoors into their equipment,

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Speaker 1: on and so forth. They are separate issues. Now you

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Speaker 1: wrap them all together on the fact that you know,

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Speaker 1: Donald Trump and she jimping a kind of juking it out,

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Speaker 1: so to speak, over a trade war, and they do

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Speaker 1: become part of a bigger issue, another sort of attention,

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Speaker 1: but they are separate issues. What's the transparency of Wawei?

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Speaker 1: I don't think I've got to hear well, I don't

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Speaker 1: think I know what Ali babe is. Maybe I don't

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Speaker 1: know what the sovereign wealth from the Singapore is. But

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Speaker 1: within the tim Corp and Asia meter, how how opaque

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Speaker 1: is WAWE? Do you really know what it is? Well?

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Speaker 1: I look frankly that we actually know more about them

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Speaker 1: than you might expect. They're not a publicly listed company,

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Speaker 1: and it doesn't look like they will ever be publicly listed.

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Speaker 1: But you know what on their website they do put

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Speaker 1: an annual report every year. Uh and in that any report,

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Speaker 1: it's in English. Anybody can go there Huawei and you

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Speaker 1: will see that you know, they brought in nineties three

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Speaker 1: billion dollars of revenue. Could but Tim quickly or this

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Speaker 1: is this is important within any book on China. There's

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Speaker 1: a red phone in the corporate office. Is Whawei just

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Speaker 1: a direct verssel of Beijing? At least indirect, if not direct,

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Speaker 1: they are very much a player and part of our

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Speaker 1: Beijing's global strategy to influence the world and also to

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Speaker 1: build a tone technology. Absolutely, Hey, Tim, if you're a

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Speaker 1: US tech executive with a flight book from Jeff k

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Speaker 1: to Shankhio, Beijing today, you cancel the flight. I would.

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Speaker 1: I would ask my, my, my staff, my secretaries if

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Speaker 1: I could just find that one in. I don't think

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Speaker 1: it's that's the first thing about it, but I imagine

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Speaker 1: a lot of people internally at these companies are thinking

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Speaker 1: about the same thing we're now making. You know, it's serious,

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Speaker 1: and it's always great to get one day, and very

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Speaker 1: very important that you separate those two stories. The concerns

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Speaker 1: over the equipment and the spy that could take pace

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Speaker 1: back door that are shared by a lot of people,

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Speaker 1: and the concerns about the U S laws that prohibit

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Speaker 1: the sales of in US origin technology to places like

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Speaker 1: Iran that the United States clearly believe, at least alleged

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Speaker 1: that lights. I'll get Tim Coulpin's essay out on Twitter

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Speaker 1: as well with Bloomberg Opinion. Just superb for those of

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Speaker 1: you honoring George Herbert Walker Bush without question for me.

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Speaker 1: This is the interview of the day. David Rubinstein has

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Speaker 1: been modest in his financial success with the Carlisle Group.

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Speaker 1: He's indeed been modest with his peer to peer television

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Speaker 1: program and radio program for Bloomberg this year with a

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Speaker 1: triumph of his interviews with Madame Legard, Jeffrey Bezos and others.

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Speaker 1: But far more has been his quiet philanthropy to the nation.

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Speaker 1: And David, you were at the National Cathedral yesterday, and

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Speaker 1: I am most certain that the Bush family wanted you

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Speaker 1: to be there because of the historic legacy you have

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Speaker 1: codified in Washington. If I go to the Library of Congress,

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Speaker 1: and I was saying, David to someone a few days ago,

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Speaker 1: maybe David Rubinstein's Library of Congress a wonderful resource page

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Speaker 1: on George H. W. Bush added that page right now,

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Speaker 1: your relationship with the forty one president. After President Bush

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Speaker 1: lost the re election effort in UM, I was able

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Speaker 1: to convince Jim Baker, his good friend, his best friend,

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Speaker 1: UH to join our firm as an advisor and as

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Speaker 1: a partner. And subsequently Jim Baker said that maybe former

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Speaker 1: President Bush would like to be an advisor as well.

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Speaker 1: And so from about nine three or four. Um. He

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Speaker 1: was for about ten years an advisor to our firm,

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Speaker 1: And what that really meant was that he would speak

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Speaker 1: to groups of investors or or other individuals that we

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Speaker 1: had relationships with. And I traveled the world with him

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Speaker 1: and with Secretary Baker, the Middle East, the Far East,

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Speaker 1: throughout the United States, Europe, and I would say, with

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Speaker 1: respect to President Bush, I never saw anybody who was

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Speaker 1: so admired everywhere in the world. Uh. He was a

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Speaker 1: person that I thought was the most decent person I

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Speaker 1: ever met, and as I've said, probably the nicest person

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Speaker 1: I ever met in my life. He just was such

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Speaker 1: a kind soul. He was always trying to do things

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Speaker 1: to help other people, very loyal, as was pointed out

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Speaker 1: yesterday in many of the remarks that David, in the

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Speaker 1: comments I've seen over the last few days, Mr Baker

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Speaker 1: comes up and I think you can provide important perspective.

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Speaker 1: You're not only with your knowledge of history, your contribution

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Speaker 1: to Ford's theater in the museum across the street where

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Speaker 1: the sixteenth President died. But there wasn't a team of rivals.

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Speaker 1: There was Mr Baker to me, and I said this,

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Speaker 1: and correct me if I'm wrong, David, there is no

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Speaker 1: parallel in our history of this president and that one

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Speaker 1: close friend. Well, I don't know of any situation where

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Speaker 1: the president's closest friend was also his secretary of State.

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Speaker 1: And what Jim Baker would always say is that nobody

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Speaker 1: could get between him and President Bush, and that eliminated

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Speaker 1: a lot of potential rivalries. In addition, Brent Scokroft, who

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Speaker 1: was an obscurity advisor, was also very close to George Bush,

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Speaker 1: and he recognized the relationship that President Bush had with

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Speaker 1: Jim Baker. So Jim Baker would say that if you're

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Speaker 1: going to be a successful secretary of State, and make

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Speaker 1: sure you have a close relationship with the with the president.

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Speaker 1: And there wasn't the kind of team of rivals that

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Speaker 1: you've often read about it you now see in some respects,

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Speaker 1: so it was a different administration. Nothing was perfect. Of course,

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Speaker 1: there's always disagreements from time to time, but basically it

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Speaker 1: would work pretty smoothly. David Rubinstein with us of the

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Speaker 1: Carlisle Group, and of course his effort for Bloomberg Television

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Speaker 1: and Bloomberg Radio ap peer to peer with us today

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Speaker 1: on his thoughts on George H. W. Book Mr Rubinstein,

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Speaker 1: what was it like at the National Cathedral yesterday. Well,

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Speaker 1: everybody who new President Bush seemed to be there, and

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Speaker 1: there was obviously a feeling that a great man has

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Speaker 1: passed away and that people wanted to respect him. I

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Speaker 1: think that the press commentarius obviously focused on the presidents

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Speaker 1: and some somewhat, but really, so many people were there,

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Speaker 1: several thousand. I guess who had known President Bush, admired him,

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Speaker 1: respected him, work with him, and it was really a

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Speaker 1: joyful occasion, even though it was a sad situation, and

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Speaker 1: you had your public service across the aisle with President

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Speaker 1: Carter as well. I spoke with Prime Minister Blair this

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Speaker 1: morning and we're talking about this nostalgic idea of bringing

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Speaker 1: in this case the Republican Party back to the middle

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Speaker 1: ground or to the edge of it, much as labor

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Speaker 1: has the same challenge in the United Kingdom. From from

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Speaker 1: your perspective, David, do we have any chance of migrating

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Speaker 1: our extremism back towards the middle? Well, hope springs eternal,

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Speaker 1: and obviously a lot of the things that were said

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Speaker 1: about George Bush yesterday, my resonate with people were there,

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Speaker 1: but you know it takes a while to bring about

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Speaker 1: the kind of change we we we really would like.

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Speaker 1: I would say with respect to President Carter that he's

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Speaker 1: roughly the same age as President Bush, but I think

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Speaker 1: it resentably good health. He did suffer um brain melanoma,

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Speaker 1: but that has been um, you know, removed. I hope

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Speaker 1: to do an interview of him tonight via Skype. Uh,

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Speaker 1: I'm going to interview my former boss, Jimmy stuartize Stat,

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Speaker 1: who was the domestic advisor to Jimmy Carter, and Jimmy

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00:24:30,880 --> 00:24:33,040
Speaker 1: Carter will come in through Skype and I'll try to

432
00:24:33,080 --> 00:24:36,400
Speaker 1: interview him. And um, I didn't not talk to him yesterday,

433
00:24:36,400 --> 00:24:38,680
Speaker 1: but he seemed to be in resonably good shape. Yeah,

434
00:24:38,680 --> 00:24:42,600
Speaker 1: they'll will look forward to seeing that here at some point. Uh.

435
00:24:43,000 --> 00:24:45,880
Speaker 1: Back to the forty first president is well, he will

436
00:24:45,920 --> 00:24:51,600
Speaker 1: arrest it College station. And you know I had u

437
00:24:51,720 --> 00:24:54,600
Speaker 1: a new immigrants say to the country. Say to me yesterday,

438
00:24:54,680 --> 00:24:58,520
Speaker 1: David Rubinstein, Well, why isn't he being buried at Arlington Cemetery?

439
00:24:58,560 --> 00:25:00,919
Speaker 1: And these are some of these decisions, and part of

440
00:25:00,960 --> 00:25:03,679
Speaker 1: them to do your contribution to the nation. Is this

441
00:25:03,720 --> 00:25:08,160
Speaker 1: new product a presidential museum. I remember going to Kansas

442
00:25:08,440 --> 00:25:11,520
Speaker 1: to see Ike's museum when that was an oddity there

443
00:25:11,560 --> 00:25:15,240
Speaker 1: now applaud us. Are they any good? David Rubinstein? I

444
00:25:15,240 --> 00:25:17,840
Speaker 1: think they served several purposes. The first one was really

445
00:25:17,880 --> 00:25:21,280
Speaker 1: built for FDR. It was a presidential library. Since then,

446
00:25:21,400 --> 00:25:25,040
Speaker 1: the they have morphed into a combination of library, museum,

447
00:25:25,119 --> 00:25:28,520
Speaker 1: and foundation office is to perpetuate the work of the

448
00:25:28,560 --> 00:25:32,159
Speaker 1: former president. And for example, Barack Obama's now building one

449
00:25:32,200 --> 00:25:35,760
Speaker 1: in Chicago. President George Herbert Walker Bush when he left

450
00:25:35,800 --> 00:25:39,400
Speaker 1: office UM had an opportunity to build one at Texas

451
00:25:39,400 --> 00:25:41,760
Speaker 1: A and M, which in College Station. He had not

452
00:25:41,840 --> 00:25:45,359
Speaker 1: had a really close relationship with that university before, but

453
00:25:45,480 --> 00:25:47,760
Speaker 1: they worked together closely to build this and now that's

454
00:25:47,760 --> 00:25:51,080
Speaker 1: where he uh and UH Barbara Bush are going to

455
00:25:51,160 --> 00:25:53,600
Speaker 1: be buried in their Their young daughter Robin is there

456
00:25:53,600 --> 00:25:56,439
Speaker 1: as well. David. One final question, give us an update.

457
00:25:56,560 --> 00:25:59,480
Speaker 1: I love saying this on your Library of Congress. What

458
00:25:59,600 --> 00:26:03,240
Speaker 1: is the initiative you see this year two thousand nineteen

459
00:26:03,440 --> 00:26:08,200
Speaker 1: for our nation's library. The Library of Congress is really

460
00:26:08,320 --> 00:26:10,640
Speaker 1: the library of the nation. It really has the name

461
00:26:10,680 --> 00:26:13,320
Speaker 1: Library Congress, but that's a bit of a misnomer. Anybody

462
00:26:13,359 --> 00:26:16,239
Speaker 1: can use it, and we are working now with the

463
00:26:16,240 --> 00:26:19,800
Speaker 1: Library of Congress Carla Hayden, to make it more accessible

464
00:26:19,840 --> 00:26:22,280
Speaker 1: to people to see the treasures of the Library Congress.

465
00:26:22,680 --> 00:26:26,000
Speaker 1: Congress and I and others are working to put together

466
00:26:27,240 --> 00:26:29,399
Speaker 1: parts of the Library Congress where people can come in

467
00:26:29,840 --> 00:26:33,560
Speaker 1: and see the greatest treasures libraries Congress has more excessively.

468
00:26:33,840 --> 00:26:36,840
Speaker 1: In addition, working on a place where children can learn

469
00:26:36,920 --> 00:26:40,879
Speaker 1: to read and practice reading in the Library Congress, and

470
00:26:40,920 --> 00:26:42,480
Speaker 1: so that will be an important part of what we're

471
00:26:42,480 --> 00:26:45,159
Speaker 1: trying to build their David Rubinstein, thank you so much

472
00:26:45,200 --> 00:26:47,880
Speaker 1: for joining us this morning. Of course, his program Peer

473
00:26:47,960 --> 00:26:50,440
Speaker 1: to Peer. You can see that on Bloomberg Television here

474
00:26:50,640 --> 00:26:54,080
Speaker 1: on Bloomberg Radio as well, his thoughts on the forty

475
00:26:54,119 --> 00:27:10,960
Speaker 1: one president oil it's beneath the ground, but it's sinking

476
00:27:10,960 --> 00:27:13,280
Speaker 1: in value down two and a half percent right now

477
00:27:13,359 --> 00:27:17,639
Speaker 1: on then imax oil down as well as gasoline heating

478
00:27:17,640 --> 00:27:21,160
Speaker 1: oil not gas. And here to tell us why, of course,

479
00:27:21,960 --> 00:27:26,760
Speaker 1: is our expert Tina Davis all things energy related for Bloomberg.

480
00:27:26,840 --> 00:27:29,600
Speaker 1: Thank you for being here. So, why why are the

481
00:27:29,640 --> 00:27:33,080
Speaker 1: oil prices are what you're saying that like it's a

482
00:27:33,080 --> 00:27:36,800
Speaker 1: bad thing. Nor handle in front of oil in front

483
00:27:36,800 --> 00:27:39,159
Speaker 1: of w T I which considering where we've been for

484
00:27:39,200 --> 00:27:40,880
Speaker 1: the past few weeks, it's not the end of the the world.

485
00:27:40,880 --> 00:27:45,240
Speaker 1: And even today, um the price sank five earlier today,

486
00:27:45,320 --> 00:27:48,760
Speaker 1: so it's coming back and we've seen a little bit

487
00:27:48,760 --> 00:27:51,000
Speaker 1: of stability right now. The market is still trying to

488
00:27:51,040 --> 00:27:53,320
Speaker 1: parse out exactly what's going to come from. You don't know.

489
00:27:53,480 --> 00:27:55,880
Speaker 1: You don't know right now what's happening in Vienna's. It's

490
00:27:55,880 --> 00:28:00,840
Speaker 1: a mystery. Yeah, but there's a lot of discussion happening

491
00:28:00,920 --> 00:28:03,639
Speaker 1: right so we a cut has been agreed to, and

492
00:28:03,680 --> 00:28:05,800
Speaker 1: that's a great thing. But what is uncertain now is

493
00:28:05,840 --> 00:28:08,439
Speaker 1: what the number is and who does what exactly. So

494
00:28:08,480 --> 00:28:11,399
Speaker 1: we've heard, you know, anywhere from five thousand barrels a

495
00:28:11,440 --> 00:28:15,000
Speaker 1: day to a million five um. The Saudi oil minister

496
00:28:15,080 --> 00:28:16,800
Speaker 1: we talked to him this morning and he said he

497
00:28:16,840 --> 00:28:19,320
Speaker 1: was comfortable with a million barrels a day cut. The

498
00:28:19,359 --> 00:28:21,920
Speaker 1: market did not like that. That's when you immediately saw

499
00:28:21,960 --> 00:28:25,800
Speaker 1: the five percent drop, so they wanted more. They wanted more. UM.

500
00:28:25,880 --> 00:28:28,440
Speaker 1: So what we're hearing now is it may be about

501
00:28:28,560 --> 00:28:31,320
Speaker 1: a million from OPEC and then something additional from the

502
00:28:31,440 --> 00:28:35,000
Speaker 1: plus part of OPEC, which is mostly Russia. Is there

503
00:28:35,040 --> 00:28:39,560
Speaker 1: a penalty that you incur if you break your promise

504
00:28:39,680 --> 00:28:42,480
Speaker 1: the OPEC. If you're remember what do you just leave

505
00:28:43,400 --> 00:28:46,280
Speaker 1: to leave the party like cut her Although that's natural gas,

506
00:28:46,280 --> 00:28:48,280
Speaker 1: I know, but that is there a penalty you mean

507
00:28:48,320 --> 00:28:50,240
Speaker 1: if you if you actually you know, agree at the

508
00:28:50,280 --> 00:28:52,760
Speaker 1: meeting to the cuts and then just go ahead and

509
00:28:52,800 --> 00:28:55,840
Speaker 1: do whatever you want. Anyway. Compliance has always been a

510
00:28:55,920 --> 00:28:59,280
Speaker 1: huge issue for this for OPAQUE as a group. And

511
00:28:59,360 --> 00:29:01,160
Speaker 1: you know, my favorite quote on this is the former

512
00:29:01,200 --> 00:29:03,640
Speaker 1: Stati oil minister said quite clearly, you know the thing

513
00:29:03,720 --> 00:29:06,640
Speaker 1: is we cheat. Um. You know, you make a promise,

514
00:29:06,680 --> 00:29:09,720
Speaker 1: you set quotas and then countries kind of do whatever

515
00:29:09,760 --> 00:29:12,640
Speaker 1: they want to do. Hopefully they stick to those quotas.

516
00:29:12,680 --> 00:29:14,680
Speaker 1: And certainly we saw a great deal of compliance with

517
00:29:14,720 --> 00:29:17,840
Speaker 1: the last round. Um, but who knows. I mean, you

518
00:29:17,880 --> 00:29:19,600
Speaker 1: also have as part of the OPEC, plus you have

519
00:29:19,640 --> 00:29:23,920
Speaker 1: companies are countries rather like Mexico, their output is sinking anyway,

520
00:29:24,000 --> 00:29:26,360
Speaker 1: and they need to agree to a cut. That's that's

521
00:29:26,440 --> 00:29:28,959
Speaker 1: no big of a deal because they're falling from natural

522
00:29:29,000 --> 00:29:31,800
Speaker 1: reads for natural reasons. Anyway, Can I rip up the script?

523
00:29:31,800 --> 00:29:34,280
Speaker 1: I'm doing this because they get cused from pim Fox,

524
00:29:34,600 --> 00:29:40,640
Speaker 1: who was brilliant to notice Looney a weaker Canadian. It

525
00:29:40,760 --> 00:29:45,479
Speaker 1: is original for you and for St Stuart Stuart Wallace,

526
00:29:45,520 --> 00:29:48,360
Speaker 1: our head of commodities in London, to see what's happened

527
00:29:48,360 --> 00:29:51,960
Speaker 1: to Western Canada, will you explain for our audience coast

528
00:29:51,960 --> 00:29:55,520
Speaker 1: to coast and on serious XM Channel one nineteen across

529
00:29:55,600 --> 00:30:01,160
Speaker 1: Canada the symbolism for the nation that the Nadian oil

530
00:30:01,240 --> 00:30:05,840
Speaker 1: experiment has just simply failed. Well, that is fascinating because

531
00:30:05,840 --> 00:30:08,560
Speaker 1: at one point this year you saw the differential between

532
00:30:08,680 --> 00:30:11,200
Speaker 1: Western Canadian Select and w t I the U S

533
00:30:11,240 --> 00:30:16,080
Speaker 1: benchmark fall to as much as fifty five zero, So

534
00:30:16,160 --> 00:30:18,680
Speaker 1: that's more than has pit and pointed out, that's more

535
00:30:18,680 --> 00:30:21,400
Speaker 1: than w t I is worth at these rates. So

536
00:30:21,480 --> 00:30:24,360
Speaker 1: you could buy Western Canadian Select for something, you know,

537
00:30:24,560 --> 00:30:26,840
Speaker 1: a couple of Looney's if you wanted to try to

538
00:30:26,880 --> 00:30:28,280
Speaker 1: try to get it out of there. And that's a

539
00:30:28,440 --> 00:30:30,400
Speaker 1: that's another place, just like the Permian which has sort

540
00:30:30,440 --> 00:30:32,320
Speaker 1: of been a victim of its own success. You're choking

541
00:30:32,360 --> 00:30:34,920
Speaker 1: on your own supply. You don't have enough infrastructure in

542
00:30:34,960 --> 00:30:37,680
Speaker 1: the form of pipelines, trains, whatever to bring all that

543
00:30:37,720 --> 00:30:40,320
Speaker 1: crew to market. So you see the price of your

544
00:30:40,360 --> 00:30:43,200
Speaker 1: commodity dropped to almost nothing, and then we've seen the

545
00:30:43,880 --> 00:30:46,800
Speaker 1: Alberta government response now right where they've said we're doing

546
00:30:46,840 --> 00:30:50,920
Speaker 1: these production cuts across the Boarford pricing totally unprecedented, but

547
00:30:51,000 --> 00:30:54,000
Speaker 1: they had been asked by the producers there please do something.

548
00:30:54,400 --> 00:30:57,320
Speaker 1: And there's a few producers who obviously were benefiting from

549
00:30:57,480 --> 00:31:00,800
Speaker 1: low feedstock prices for refineries, so they kind of got

550
00:31:00,880 --> 00:31:03,760
Speaker 1: some benefit out of the low oil price. But basically

551
00:31:03,880 --> 00:31:06,560
Speaker 1: the industry was begging the government to intervene, which is

552
00:31:06,760 --> 00:31:09,240
Speaker 1: you know, a unique place in a nation like Canada

553
00:31:09,280 --> 00:31:12,320
Speaker 1: where you don't think is of a lot of resource nationalism.

554
00:31:12,320 --> 00:31:17,240
Speaker 1: As our managing editor for America's you have larger purview,

555
00:31:18,200 --> 00:31:20,800
Speaker 1: tell us anything about natural gas and what is going

556
00:31:20,880 --> 00:31:23,880
Speaker 1: on there, because I was interested that Qatar announced that

557
00:31:23,920 --> 00:31:26,800
Speaker 1: it wants to leave OPEC because it wants to further

558
00:31:26,920 --> 00:31:31,080
Speaker 1: develop and expand its natural gas business. Does it have

559
00:31:31,240 --> 00:31:33,600
Speaker 1: an outlet because this is the same kind of situation

560
00:31:33,680 --> 00:31:35,640
Speaker 1: you were just describing in the Permian. You have a

561
00:31:35,640 --> 00:31:39,000
Speaker 1: lot of fossil fuel, but how do you get it

562
00:31:39,040 --> 00:31:40,520
Speaker 1: to the people in the countries that are going to

563
00:31:40,680 --> 00:31:43,920
Speaker 1: use it? Well? With cutar, I mean, look, they're they're

564
00:31:44,000 --> 00:31:46,960
Speaker 1: natural gas business is not a new business, right, So

565
00:31:47,800 --> 00:31:49,680
Speaker 1: you take what they say with a slight grain of

566
00:31:49,720 --> 00:31:53,320
Speaker 1: salt about this being a shift in focus. Um, this

567
00:31:53,400 --> 00:31:56,360
Speaker 1: is obviously a nation that has had considerable differences, will

568
00:31:56,400 --> 00:31:58,760
Speaker 1: put it that way with Saudi Arabia, which is sort

569
00:31:58,760 --> 00:32:01,840
Speaker 1: of the de facto leader of op back. Um. But yeah,

570
00:32:01,880 --> 00:32:04,440
Speaker 1: if you're talking about the l G business of liquefied

571
00:32:04,520 --> 00:32:06,680
Speaker 1: natural gas, because this is something that the US is

572
00:32:06,800 --> 00:32:09,760
Speaker 1: ramping up exports of. We've seen the third terminal that's

573
00:32:09,800 --> 00:32:14,120
Speaker 1: just recently started commercial production down in Texas. So we're

574
00:32:14,160 --> 00:32:17,280
Speaker 1: also seeing huge LLENG come out of Australia. So if

575
00:32:17,320 --> 00:32:19,800
Speaker 1: you're cut are, if you're the nation who's the you know,

576
00:32:20,120 --> 00:32:23,760
Speaker 1: acknowledged number one exporter of gas, you're seeing these upstarts

577
00:32:23,800 --> 00:32:26,480
Speaker 1: come in, and you don't necessarily want to have the

578
00:32:26,520 --> 00:32:29,240
Speaker 1: same ramifications that we've seen without Beck, where they sort

579
00:32:29,240 --> 00:32:31,520
Speaker 1: of ignored the shale boom until they had to come

580
00:32:31,520 --> 00:32:33,840
Speaker 1: and try to make peace with the shale producers in

581
00:32:33,880 --> 00:32:37,680
Speaker 1: an attempt to save their market share. Does there does

582
00:32:37,720 --> 00:32:42,600
Speaker 1: there in your mind sort of create does well? Okay,

583
00:32:42,680 --> 00:32:45,959
Speaker 1: let me just mention that the Dow Jones industrial leverage

584
00:32:46,000 --> 00:32:48,760
Speaker 1: is down more than five hundred points and the Adacks

585
00:32:48,760 --> 00:32:51,480
Speaker 1: in Germany is set to enter a bear market. It

586
00:32:51,560 --> 00:32:55,080
Speaker 1: is down a little bit more than three per cent. Yeah,

587
00:32:55,520 --> 00:32:57,600
Speaker 1: you know, just as as we finish up with teenagre,

588
00:32:57,640 --> 00:32:59,800
Speaker 1: I would just say the correlation is remarkable, and then

589
00:32:59,800 --> 00:33:01,600
Speaker 1: no ever one thing to look at, folks. Well, two

590
00:33:01,680 --> 00:33:05,240
Speaker 1: things yen one twelve thirty two, that pro metric is

591
00:33:05,280 --> 00:33:08,400
Speaker 1: still strong yen and ever finding ever stronger yen strength

592
00:33:08,440 --> 00:33:11,160
Speaker 1: towards one eleven. And the tenure yield as a life

593
00:33:11,200 --> 00:33:14,240
Speaker 1: of its own higher note price, lower yield two point

594
00:33:14,280 --> 00:33:18,440
Speaker 1: eight four five two on the tenure yield. Why don't you, Tina,

595
00:33:18,760 --> 00:33:20,560
Speaker 1: this has been so good? What are you doing tomorrow

596
00:33:20,560 --> 00:33:22,840
Speaker 1: at five ten am? You want to come in and

597
00:33:22,880 --> 00:33:25,840
Speaker 1: talk to hydrocarbons with Stewart Wallace will be with us.

598
00:33:25,920 --> 00:33:29,040
Speaker 1: We can do it. I warm breakfast for me, thank you.

599
00:33:29,120 --> 00:33:34,520
Speaker 1: I don't warm breakfasts are optionally comics. Great. Yeah, you

600
00:33:34,560 --> 00:33:38,040
Speaker 1: know we have the surveillance kitchen where we Tina Davis,

601
00:33:38,120 --> 00:33:39,920
Speaker 1: thank you so much. We've got to leave too early

602
00:33:40,360 --> 00:33:42,040
Speaker 1: right here with the markets on the move into a

603
00:33:42,080 --> 00:33:45,080
Speaker 1: complete data check for people. Ms Davis running all of

604
00:33:45,120 --> 00:33:55,240
Speaker 1: our hydrocarbon coverage across the America's thanks for listening to

605
00:33:55,320 --> 00:33:59,800
Speaker 1: the Bloomberg Surveillance podcast, Subscribe and listen to interviews on

606
00:34:00,000 --> 00:34:05,720
Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm

607
00:34:05,760 --> 00:34:09,080
Speaker 1: on Twitter at Tom Keene before the podcast. You can

608
00:34:09,120 --> 00:34:12,320
Speaker 1: always catch us worldwide. I'm Bloomberg Radio