WEBVTT - Bloomberg Surveillance TV: June 3rd, 2026 0:00:02.360 --> 0:00:06.720 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.640 --> 0:00:15.400 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordert join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.240 Terminal and the Bloomberg Business app. We begin this hour, 0:00:37.360 --> 0:00:39.640 which starts looking to build on a record breaking nine 0:00:39.720 --> 0:00:42.320 day winning streak. Cameron Dawson of New Wege Wealth, writing, 0:00:42.400 --> 0:00:45.080 you can't stop the beats, with earning speeds and raises 0:00:45.120 --> 0:00:48.320 continuing to be the justification for new highs in equity markets, 0:00:48.320 --> 0:00:50.360 Cam joins us for more. Cameron, good morning, Good morning, 0:00:50.479 --> 0:00:51.040 it's going to see you. 0:00:51.080 --> 0:00:51.239 Look. 0:00:51.280 --> 0:00:53.720 The fundamental story I think is well understood at this point. 0:00:53.920 --> 0:00:56.400 The earnings have been super, super powerful. Where is the 0:00:56.440 --> 0:00:58.360 more speculative story emerging for you? 0:00:58.600 --> 0:00:58.800 Oh? 0:00:58.800 --> 0:01:01.880 Well, we've seen an incredible rally in the most speculative 0:01:01.920 --> 0:01:04.960 portions of the market. Look at the Goldman Sachs Unprofitable 0:01:04.959 --> 0:01:08.560 Tech Index, up fifteen percent in last week alone. It's 0:01:08.680 --> 0:01:12.000 up sixty five percent since the March lows. You look 0:01:12.000 --> 0:01:15.120 at the cohort of space names, most of them are unprofitable. 0:01:15.160 --> 0:01:17.759 They're up one hundred percent year to date. You look 0:01:17.800 --> 0:01:20.240 at the Russell twenty five hundred, the leaders in that 0:01:20.400 --> 0:01:23.760 index are all coming from very unprofitable names. If you 0:01:23.920 --> 0:01:25.480 take out or if you look at the names that 0:01:25.520 --> 0:01:29.760 are actually generating profit and up and trading at a discount, 0:01:29.760 --> 0:01:32.319 they're only up about eight percent. So if you're a 0:01:32.400 --> 0:01:35.080 high quality name, you've been sitting out on that. You've 0:01:35.120 --> 0:01:37.280 been sitting out on this rally. So the question is 0:01:37.560 --> 0:01:40.360 how much can this speculative portion of markets continue. 0:01:40.400 --> 0:01:43.280 So we've got some froth, you've identified it. Technico's a stretched. 0:01:43.280 --> 0:01:46.240 People have talked about that endlessly over the last two 0:01:46.280 --> 0:01:48.480 months or so. Is that enough reason to sit this out? 0:01:48.920 --> 0:01:51.880 No, it's not, because the earnings picture is so very strong. 0:01:51.880 --> 0:01:53.800 But I think what we have to appreciate with the 0:01:53.840 --> 0:01:56.840 earning story is two really big things. The first one 0:01:56.880 --> 0:01:59.800 is the upside in the hyperscaler capex. This time last year, 0:01:59.840 --> 0:02:03.400 we're expecting hyperscaler capex to be up ten percent. That 0:02:03.480 --> 0:02:06.800 number today is eighty percent. So you remember that one 0:02:06.840 --> 0:02:09.840 man's capex is another man's profit. And that brings you 0:02:09.880 --> 0:02:12.680 to the other really important point about this earning story, 0:02:12.720 --> 0:02:15.880 which is that we are in an operating leverage boom 0:02:16.000 --> 0:02:20.240 driven by the semiconductors. These are typically high operating leverage businesses, 0:02:20.280 --> 0:02:22.639 which just means that a little bit of sales growth 0:02:22.760 --> 0:02:25.400 generates a lot of earnings growth. And you've seen that 0:02:25.440 --> 0:02:29.359 because margins for semiconductors have expanded from thirty percent just 0:02:29.480 --> 0:02:33.120 nine months ago to forty five percent today. So because 0:02:33.120 --> 0:02:35.919 we're seeing this increase in sales, it's causing a huge 0:02:35.919 --> 0:02:38.400 boom in profits. But what we have to watch is 0:02:38.400 --> 0:02:40.960 that if sales slow down a little bit, what you 0:02:41.000 --> 0:02:44.520 could see is this de leveraging of operating profits that 0:02:44.600 --> 0:02:47.640 could cause earnings growth to not be as robust as 0:02:47.680 --> 0:02:49.040 we look into twenty twenty seven. 0:02:49.200 --> 0:02:50.720 I feel like we should have a bell that dings 0:02:50.720 --> 0:02:53.760 every time some with seven earnings earnings. You know, if 0:02:53.760 --> 0:02:57.080 you think drinking game, drug show, bramo, Okay, well we 0:02:57.080 --> 0:02:58.880 can plate for drinks, so you never know, you know, 0:02:58.960 --> 0:03:02.560 drinking coffee, there is an ultimate question, is it just 0:03:02.600 --> 0:03:04.920 going to be an earnings acceleration that's going to potentially 0:03:05.000 --> 0:03:07.360 drive some sort of correction to this, or could it 0:03:07.440 --> 0:03:10.200 just be by virtue of the supply that's coming to market. 0:03:10.360 --> 0:03:13.360 Oh. I think that's a really interesting and important point 0:03:13.400 --> 0:03:15.640 because we've been in a world for the last few 0:03:15.680 --> 0:03:20.000 years where we've seen equity supply effectively falling. We've seen 0:03:20.080 --> 0:03:22.600 much more buybacks than we've seen any new equity issuance 0:03:22.919 --> 0:03:25.959 at the same time as equity demand has been very strong, 0:03:26.040 --> 0:03:28.720 simply because we push so much liquidity into the system 0:03:28.800 --> 0:03:31.720 during the COVID era. So we learn in economics one 0:03:31.720 --> 0:03:34.440 oh one when supply drops and demand goes up, prices 0:03:34.520 --> 0:03:37.160 go up. So now we're in an environment where supply 0:03:37.400 --> 0:03:39.720 is certainly going up, whether it's from the IPOs or 0:03:39.720 --> 0:03:42.400 the Google issuance, and that just suggests that there is 0:03:42.480 --> 0:03:44.680 a lot of supply for this market to take down. 0:03:44.800 --> 0:03:47.680 And the question is is there the incremental demand to 0:03:47.880 --> 0:03:51.120 absorb all this incremental supply. So it very much is 0:03:51.160 --> 0:03:53.800 what we think of as a Shakespearean see change when 0:03:53.840 --> 0:03:56.560 it comes to that supply demand balance for the equity market. 0:03:56.640 --> 0:03:58.920 How do you clear space to participate in some of 0:03:58.920 --> 0:04:01.160 these IPOs, do you, I mean, how do you sort 0:04:01.200 --> 0:04:05.240 of understand what to sell in order to playball right now? 0:04:05.360 --> 0:04:08.080 Yeah, Well, the indices are forced to and I think 0:04:08.120 --> 0:04:10.680 that that's probably one of the most important points is 0:04:10.720 --> 0:04:12.920 that the industries are now being forced to put a 0:04:12.920 --> 0:04:15.480 weight in these names, and mostly for the Nasdaq, where 0:04:15.480 --> 0:04:17.760 there's going to be a multiplier on the float for 0:04:17.800 --> 0:04:20.360 a name like SpaceX. I think the question for us 0:04:20.440 --> 0:04:22.120 is that we will stick to our knitting when it 0:04:22.160 --> 0:04:24.680 comes to valuation, discipline, and quality. And you look at 0:04:24.760 --> 0:04:27.719 name like SpaceX trading at what could be eighty to 0:04:27.800 --> 0:04:30.440 one hundred time sales on sales that have been growing 0:04:30.480 --> 0:04:34.039 about thirty percent. They've decelerated to fifteen percent back in 0:04:34.080 --> 0:04:36.599 the first quarter. But when you traded at eighty to 0:04:36.640 --> 0:04:39.960 one hundred time sales, even when those sales actually become 0:04:40.279 --> 0:04:43.400 something that becomes reality, the problem is you have to 0:04:43.400 --> 0:04:46.880 grow into that fulsome multiple. Palenteer is a great example 0:04:46.920 --> 0:04:50.080 of this. Palenteer traded to ninety times sales in the 0:04:50.080 --> 0:04:53.080 middle of last year during that big, huge rally we had, 0:04:53.360 --> 0:04:55.480 and then the sales came. Sales are going to grow 0:04:55.600 --> 0:04:58.320 seventy two percent this year, but the stock has been 0:04:58.400 --> 0:05:01.480 flat because we've had to row into that high price 0:05:01.480 --> 0:05:04.440 of sales multiple. So for us as quality investors will 0:05:04.480 --> 0:05:07.640 always stay balanced with that valuation discipline. 0:05:07.760 --> 0:05:10.360 Kern, though, do you think it's uncomfortable that, I mean, 0:05:10.360 --> 0:05:12.720 the Bank of America fund manager survey show this record 0:05:12.720 --> 0:05:16.000 inflow most overweight positions since twenty two thousand and two 0:05:16.040 --> 0:05:18.320 into equities. Is it uncomfortable that everyone is there? 0:05:19.240 --> 0:05:22.279 Well, what's fascinating is that we are seeing those inflows 0:05:22.320 --> 0:05:25.000 because people are having to chase. If you look at 0:05:25.000 --> 0:05:29.040 the Deutsche Bank Consolidated Equity Positioning Index, it's only in 0:05:29.080 --> 0:05:31.880 the sixty first percentile, and that has gone into the 0:05:31.920 --> 0:05:34.200 danger zone. If you go back to late twenty twenty one, 0:05:34.279 --> 0:05:37.840 you were in the ninetieth percent plus. So there are 0:05:38.000 --> 0:05:41.760 signs that institutions have somewhat sat on the sidelines of 0:05:41.800 --> 0:05:44.080 this rally. I don't think that you can say the 0:05:44.120 --> 0:05:47.960 same thing for households. Household equity allocations are still at 0:05:48.000 --> 0:05:50.400 all time highs. If you look at things like the 0:05:50.440 --> 0:05:53.480 put call ratio, that speaks to some of that complacency, 0:05:53.480 --> 0:05:56.760 and already there put call ratios are incredibly low, which 0:05:56.800 --> 0:06:00.000 just means that nobody is caring about downside protection right now. 0:06:00.440 --> 0:06:04.080 So the balance of overall of overall positioning is that 0:06:04.160 --> 0:06:06.159 it's not enough to be a tail end of this market, 0:06:06.200 --> 0:06:09.000 but it's probably not quite enough to be an absolute 0:06:09.040 --> 0:06:11.080 headwind like we got you back at the end of 0:06:11.080 --> 0:06:11.840 twenty twenty one. 0:06:12.040 --> 0:06:15.000 To Lisa's point, though, where are people selling? Is it 0:06:15.040 --> 0:06:17.919 other equities or are they just maybe selling things like 0:06:18.080 --> 0:06:21.039 crypto treasury to make sure they can get into some 0:06:21.200 --> 0:06:22.240 of these high flyers. 0:06:22.440 --> 0:06:25.080 The fact that Crypto is sitting out on this risk 0:06:25.160 --> 0:06:28.440 on rally does suggest that people are potentially using that 0:06:28.520 --> 0:06:31.839 as liquidity to chase other areas of the market, because look, 0:06:31.880 --> 0:06:34.120 we know that there are a lot of momentum traders 0:06:34.120 --> 0:06:37.719 out there that are just chasing strong returns. So potentially 0:06:37.800 --> 0:06:40.400 that is the area where people are using that as 0:06:40.480 --> 0:06:44.200 liquidity to chase into into something like SpaceX. 0:06:44.680 --> 0:06:48.120 Stay with us, mulplempeg Savannah's coming up off to this. 0:06:57.600 --> 0:07:00.400 If there is the greatest hits of topics, people on 0:07:00.440 --> 0:07:03.320 Wall Street do not want to talk about. The stratiformos 0:07:03.440 --> 0:07:05.839 is up there, and this is too. The Trump administration 0:07:06.000 --> 0:07:08.640 fighting back against the Supreme Court's tariff defeat with a 0:07:08.680 --> 0:07:11.400 fresh wave of levies, including a ten percent charge on 0:07:11.480 --> 0:07:16.040 imports from sixty different trading partners, leyby canselor Pimco joins us. 0:07:16.080 --> 0:07:17.240 Now for more, LIDDI, good morning. 0:07:17.280 --> 0:07:18.200 Can you here to talk about this? 0:07:18.280 --> 0:07:19.320 I'm so here for it. 0:07:19.440 --> 0:07:21.880 You get the short straw, we can change the topic 0:07:21.880 --> 0:07:25.440 pretty quickly. Your thoughts on this action, where's this going? 0:07:25.480 --> 0:07:26.840 And how big is this wall going to be? 0:07:26.960 --> 0:07:28.320 Even though I think this was sort of in the 0:07:28.400 --> 0:07:30.960 rear view mirror for the for Wall Street, this is 0:07:31.000 --> 0:07:35.000 actually very much expected. As a reminder, when the AIPA 0:07:35.040 --> 0:07:37.960 tariffs were struck down by the Supreme Court, the President 0:07:38.000 --> 0:07:40.520 of the USTR moved forward with something called Section one 0:07:40.640 --> 0:07:43.720 twenty two tariffs, the sort of blanketed ten percent tariffs 0:07:43.760 --> 0:07:46.760 across the board. Those expire though, on July twenty fourth, 0:07:47.040 --> 0:07:49.080 so those have sort of a limit to this. So 0:07:49.120 --> 0:07:51.760 we were expecting that they would be using some of 0:07:51.800 --> 0:07:55.280 these other tools that Congress has actually provided to the 0:07:55.320 --> 0:07:58.400 President to move forward to try to rebuild that tariff wall. 0:07:58.440 --> 0:08:00.320 As you said, I think some of the interesting is 0:08:00.320 --> 0:08:02.960 that this tariff rate is maybe a little bit more benign, 0:08:03.280 --> 0:08:05.440 a little bit more reasonable. Certainly than those that we 0:08:05.480 --> 0:08:08.840 had seen a liberation day, but even those that we 0:08:08.840 --> 0:08:11.080 had seen kind of post liberation day. So I think 0:08:11.160 --> 0:08:13.920 by the effect of average terifry, this might actually land 0:08:13.920 --> 0:08:17.480 it at a lower rate at the end of the day. 0:08:17.680 --> 0:08:20.200 But again, none of this is surprising. I also think 0:08:20.320 --> 0:08:22.600 there's a deficit angle here, which I know Lisa does 0:08:22.680 --> 0:08:25.400 like to talk about. Of course, this is revenue that 0:08:25.760 --> 0:08:28.520 the Treasury likes, that the US is sort of getting 0:08:28.760 --> 0:08:30.600 addicted to it, if you will. It's one of the 0:08:30.600 --> 0:08:32.520 reasons why we think tariffs are going to be sticky 0:08:32.559 --> 0:08:35.480 sort of regardless of who wins in twenty twenty eight, 0:08:35.679 --> 0:08:38.240 because this is something that is generating quite a lot 0:08:38.240 --> 0:08:41.840 of revenue and again sort of politically is salient on 0:08:41.880 --> 0:08:42.640 both sides of the island. 0:08:42.679 --> 0:08:44.240 Where does this put some of the trade deals though, 0:08:44.280 --> 0:08:47.280 that they have with Switzerland, the European Union. His massive 0:08:47.679 --> 0:08:49.000 summit was Shijing, Pang. 0:08:49.920 --> 0:08:51.720 Yeah, I mean that is I think an open question 0:08:51.880 --> 0:08:53.800 a Marie. I think we've been a little bit skeptical 0:08:53.840 --> 0:08:57.040 of some of those pledges around those trade deals. Anyway, 0:08:57.080 --> 0:09:00.680 you haven't necessarily seen some of those investments come to fruition. 0:09:00.840 --> 0:09:03.760 For instance, you know, we'll see with the sort of 0:09:03.760 --> 0:09:07.760 the European trade deal in particular, just given that that 0:09:07.920 --> 0:09:10.440 is you know, sort of pending in the in the EU. 0:09:10.720 --> 0:09:12.720 So yeah, I have I think that's an open question 0:09:12.840 --> 0:09:13.560 for for sure. 0:09:13.600 --> 0:09:16.240 Obviously a PIMPCO, you're tracking the mortgage market and what 0:09:16.320 --> 0:09:20.040 is going on with FHFA, and the director of fh 0:09:20.200 --> 0:09:24.320 FA now is the acting Director of National Intelligence. What 0:09:24.480 --> 0:09:27.320 was your reaction to Bill Poulty moving over to this space. 0:09:27.520 --> 0:09:29.080 Yeah, I would say, you know, I think we would 0:09:29.120 --> 0:09:31.560 argue that second to the treasury market, the agency NBS 0:09:31.640 --> 0:09:34.520 market is probably the most important market, particularly to US. 0:09:34.520 --> 0:09:36.000 But I think, you know, just sort of writ large 0:09:36.040 --> 0:09:39.040 because of course that sets the mortgage rate that you know, 0:09:39.120 --> 0:09:42.040 consumers access. You know, this is I mean, it's an 0:09:42.080 --> 0:09:45.679 interesting choice. Obviously, Bill Poulty has been said, doesn't necessarily 0:09:45.760 --> 0:09:49.720 have the traditional background for an act for a DNA director. 0:09:49.800 --> 0:09:52.360 I think the one thing that is important though is 0:09:52.400 --> 0:09:55.640 this is an acting position. And just as a reminder, 0:09:55.840 --> 0:09:59.560 something called the Vacancies Act that allows the President to 0:09:59.720 --> 0:10:03.920 move somebody in a vacant position, which is a Senate 0:10:03.960 --> 0:10:06.760 confirmed position, only at that other person is Senate confirmed 0:10:06.800 --> 0:10:08.360 only for two hundred and ten days, so I think 0:10:08.360 --> 0:10:10.760 it was very I think the present was very specific 0:10:11.120 --> 0:10:14.280 that this was an acting position. He hasn't actually nominated 0:10:14.360 --> 0:10:17.240 him for the permanent position. That would of course require 0:10:17.280 --> 0:10:20.760 Senate confirmation. So I think my view we'll see is 0:10:20.800 --> 0:10:23.880 that this is probably a temporary post, not a permanent post. 0:10:24.040 --> 0:10:26.240 I do think though, as it relates to the mortgage market, 0:10:26.440 --> 0:10:30.480 this takes the chances of IPO for Fanny and Freddy 0:10:30.920 --> 0:10:32.679 very much off the table. That has been our view 0:10:32.720 --> 0:10:35.880 at PIMCO for many years. We think that risks actually 0:10:35.880 --> 0:10:38.679 increasing the mortgage rate, not decreasing the mortgage rate, which 0:10:38.720 --> 0:10:41.480 is anathemach to what the administration wants at this point. Anyway, 0:10:42.000 --> 0:10:43.960 we think this is sort of the death knell for 0:10:44.160 --> 0:10:45.439 the IPO of Fany and Freddy. 0:10:45.520 --> 0:10:47.280 This is actually incredibly important for a lot of people 0:10:47.280 --> 0:10:49.320 in the market, and they actually might view this as 0:10:49.320 --> 0:10:51.800 a bullish sign because there won't be more at risk 0:10:51.920 --> 0:10:56.120 introduced into the privatization of these particular agencies. Do you 0:10:56.200 --> 0:10:57.960 have the same kind of view, Yeah. 0:10:58.040 --> 0:11:00.960 I think We've been engaging with policymakers and we said 0:11:00.960 --> 0:11:03.520 one thing that they could do was clarify the future 0:11:03.600 --> 0:11:06.320 of Fanny and Freddy and sort of take this idea 0:11:06.400 --> 0:11:09.320 of privatization off the table. I mean, they are, you know, 0:11:09.360 --> 0:11:11.480 for better or for worse, they're functioning in credibly well 0:11:11.559 --> 0:11:15.080 in conservatorship in terms of providing liquidity to the secondary 0:11:15.120 --> 0:11:17.720 mortgage market. And if you do anything to sort of 0:11:17.800 --> 0:11:21.560 upset the relationship between the government and Fanny and Freddy, 0:11:21.880 --> 0:11:24.679 you do see that risk premium come back into mortgage yields, 0:11:24.760 --> 0:11:26.800 and so, you know, we think that there's an argument 0:11:26.840 --> 0:11:29.800 to be made that maybe some more clarification can actually 0:11:30.000 --> 0:11:32.839 decrease mortgage yields. Of course that's what the administration wants. 0:11:33.080 --> 0:11:35.960 I find it fascinating. You're right, Tariff's not that exciting 0:11:35.960 --> 0:11:37.920 to me right now, just because it seems to leave 0:11:37.960 --> 0:11:39.840 us in the same place. The straight up from Moos 0:11:39.960 --> 0:11:44.480 isn't necessarily analyzable. But this particular administration Washington, d C. 0:11:44.800 --> 0:11:48.040 Has had more direct influence on markets than any I 0:11:48.120 --> 0:11:51.280 can remember in recent and modern history, whether it's personal 0:11:51.320 --> 0:11:55.040 sign off by the President on specific transactions, whether it's 0:11:55.240 --> 0:11:58.439 jaw owning specific companies that are doing different things. How 0:11:58.440 --> 0:12:00.280 big are the lobbying bills? I mean, do you see 0:12:00.280 --> 0:12:02.960 all the lobbyists to sort of gathering around there to 0:12:03.000 --> 0:12:04.839 try to make sure that that deal gets in front 0:12:04.880 --> 0:12:05.520 of the right person. 0:12:05.840 --> 0:12:07.800 Well, I think this is sort of interesting about this 0:12:07.960 --> 0:12:10.000 president is that, you know, a lot of what he 0:12:10.160 --> 0:12:12.600 is doing in terms of private industry is very much 0:12:12.600 --> 0:12:16.319 more indicative or in sort of parallel with what Democrats 0:12:16.320 --> 0:12:19.840 have done, right, sort of the state capitalism industrial policy. 0:12:19.880 --> 0:12:22.559 This used to be sort of the purview of Democrats 0:12:23.360 --> 0:12:26.000 picking winners and losers. Now you know President Trump is 0:12:26.040 --> 0:12:29.400 doing it. So yes, absolutely, our lobbyists kind of lining up. 0:12:29.480 --> 0:12:32.200 I would say, just going back to the discussion of 0:12:32.200 --> 0:12:35.080 the mortgage market, something important that Fanny and Freddie have 0:12:35.120 --> 0:12:37.079 done is that they've been in the market. They've been 0:12:37.120 --> 0:12:40.640 buying agency nbs to try to decrease that mortgage rate. 0:12:40.720 --> 0:12:43.240 We think that's actually been quite effective. Now that was 0:12:43.240 --> 0:12:45.880 sort of upset by the Iran war, so I think 0:12:45.920 --> 0:12:47.640 in some ways it was negated by that. But it 0:12:47.679 --> 0:12:49.760 will be interesting, I think just in terms of the 0:12:50.280 --> 0:12:53.640 PULTI discussion, will that continue, Will they continue to be 0:12:53.679 --> 0:12:56.240 in the market trying to decrease yields? But yeah, I 0:12:56.280 --> 0:13:00.480 mean broadly, this administration obviously much more interventionists than traditional 0:13:00.480 --> 0:13:01.280 Republican imagry. 0:13:01.360 --> 0:13:04.240 You've got a really think through about what we're normalizing care. 0:13:04.640 --> 0:13:08.160 Stay with us. More Bloomberg Surveillance coming up after this. 0:13:17.520 --> 0:13:20.600 The former US Vice President Mike Pence warning of threats 0:13:20.600 --> 0:13:24.240 to the Republican Party in his latest book What Conservatives Believe, 0:13:24.360 --> 0:13:28.520 Rediscovering the Conservative Conscience, Pence writing, quote, Trump has not 0:13:28.600 --> 0:13:31.920 always governed as a conservative. The result is that many 0:13:31.920 --> 0:13:35.559 Americans are confused about what it means to be a conservative. 0:13:35.640 --> 0:13:38.200 I'm very pleased to say the forty eighth Vice President 0:13:38.320 --> 0:13:40.760 of the United States, Mike Pence, joins us now for more. 0:13:40.800 --> 0:13:44.040 Mister Vice President. Welcome back to Bloomberg Surveillance on Bloomberg TV. 0:13:44.280 --> 0:13:45.960 Thank you great to be back on. It's good to 0:13:45.960 --> 0:13:48.080 see you, sir. I'll ask that question to you, what 0:13:48.160 --> 0:13:49.839 does it mean to be a conservative? 0:13:49.960 --> 0:13:54.400 Well, for decades, the Republican Party has really been the 0:13:54.400 --> 0:13:59.240 home of conservatism in this country. It's a commitment to 0:13:59.360 --> 0:14:04.520 limited govern free market economics, strong defense, American leadership in 0:14:04.559 --> 0:14:07.520 the world, and traditional values has really guided the Republican 0:14:07.559 --> 0:14:10.760 Party since Ronald Reagan came to the White House. And 0:14:10.800 --> 0:14:14.240 it's why I and millions of Americans were drawn to 0:14:14.320 --> 0:14:18.520 the Republican Party over the years. Our principal contest was 0:14:18.640 --> 0:14:22.840 against the liberal Democratic Party over those decades. But as 0:14:22.920 --> 0:14:28.840 the Democratic Party has been overtaken by more progressive left policies, 0:14:28.880 --> 0:14:33.280 including socialist policies, not just in New York but all 0:14:33.320 --> 0:14:37.720 around the country. I wrote the book because I wanted 0:14:37.760 --> 0:14:40.240 Republicans to know that there's a new threat to that 0:14:40.320 --> 0:14:45.360 conservative agenda within our movement from a populist right that 0:14:45.400 --> 0:14:51.440 would really challenge our commitment to limited government, to free enterprise, 0:14:51.880 --> 0:14:57.800 challenge America's role as leader of the free world, marginalized values. 0:14:57.960 --> 0:15:02.240 And I do think, as you quoted from the book, 0:15:02.280 --> 0:15:04.560 that many are confused about what it means to be 0:15:04.560 --> 0:15:08.440 a conservative. So that's what inspired what conservatives belief. 0:15:08.600 --> 0:15:11.080 Well, you served alongside him, of course in the first term. 0:15:11.280 --> 0:15:12.119 Was he a conservative? 0:15:12.160 --> 0:15:12.320 Then? 0:15:13.040 --> 0:15:16.000 Well I think, Look, I say this in the book. 0:15:16.040 --> 0:15:18.480 You know, I know Donald Trump better than his most 0:15:18.600 --> 0:15:23.640 ardent defenders. We worked together every day and spoke every 0:15:23.720 --> 0:15:26.440 day for four and a half years, and in fairness 0:15:26.440 --> 0:15:29.880 to the President, he's actually never said he was a conservative. 0:15:29.920 --> 0:15:31.840 In fact, I lost count of the number of times 0:15:31.840 --> 0:15:35.040 that I would say in conversations in the Oval office. Well, 0:15:35.080 --> 0:15:37.840 that position is a conservative position, and he would he 0:15:37.880 --> 0:15:41.040 would wave his hand and say, what conservative, It's just 0:15:41.120 --> 0:15:45.800 common sense and so. But in our administration, I will 0:15:45.840 --> 0:15:49.320 tell you I think we were very faithful in most 0:15:49.440 --> 0:15:55.560 cases to the traditional conservative agenda, appointing conservative judges, upholding 0:15:55.560 --> 0:15:59.720 the rule of law, and particularly in the area of 0:15:59.760 --> 0:16:04.320 free market and economics and free enterprise. We cut taxes, 0:16:04.400 --> 0:16:09.440 rolled back regulations, unleashed American energy. But on economic issues, 0:16:09.480 --> 0:16:12.680 I think it's becoming more apparent, particularly in the business 0:16:12.720 --> 0:16:16.320 community across this country, with the advent of broad based 0:16:16.360 --> 0:16:19.280 tariffs imposed on friend and foe alike that while they 0:16:19.320 --> 0:16:22.520 were turned back by the Supreme Court, we saw the 0:16:22.560 --> 0:16:26.920 news this morning of a new round of tariffs attempted 0:16:26.960 --> 0:16:31.960 by the USTR, the nationalization of American businesses with something 0:16:32.000 --> 0:16:36.000 we never countenance in our administration, is much more part 0:16:36.000 --> 0:16:42.200 of a traditional socialists thinking around the world. Price controls 0:16:42.280 --> 0:16:46.720 on pharmaceuticals and credit cards, these are I think these 0:16:46.880 --> 0:16:50.440 are policies that come out of the populous right amory 0:16:50.680 --> 0:16:54.280 and they represent a real shift. Now me, can I 0:16:54.360 --> 0:16:57.440 just say I think the second Trump administration has gotten 0:16:57.440 --> 0:17:01.640 a lot right, standing up to Iran, standing with Israel, 0:17:01.760 --> 0:17:05.880 extending those tax cuts, securing our border. But on some 0:17:06.000 --> 0:17:10.800 key issues, we've seen those populist right policies take hold. 0:17:11.760 --> 0:17:14.280 And I want conservatives around the country to know that. 0:17:14.240 --> 0:17:17.080 These are ideas that you'd hear from a Senator Elizabeth 0:17:17.119 --> 0:17:21.080 Warren or Senator Bernie Sanders. But the issue in Washington 0:17:21.160 --> 0:17:22.880 right now is there's a lot of people speaking out 0:17:23.200 --> 0:17:26.160 against this in Congress. Do you feel that Trump has 0:17:26.160 --> 0:17:28.240 gotten a lot more carte blanche this time around? 0:17:28.720 --> 0:17:31.800 Well, I think so. I mean, the president is the 0:17:31.920 --> 0:17:34.640 leader of the party, and with majorities in the Congress, 0:17:34.680 --> 0:17:38.040 I think there's been a tremendous amount of deference to 0:17:38.160 --> 0:17:41.639 the president. But you put a fine point on it. 0:17:41.680 --> 0:17:44.639 In fact, in my book, I point out when the 0:17:44.640 --> 0:17:47.959 president first announced a nationalization policy, it might have been 0:17:48.000 --> 0:17:52.040 the Golden chairs in US steel, Elizabeth Warren said memorably, 0:17:53.560 --> 0:17:55.960 Donald Trump has come across an idea that I came 0:17:56.040 --> 0:17:59.800 up with years ago, and John might argue with the 0:17:59.880 --> 0:18:03.200 nationalization with something Elizabeth Warren came up with. There might 0:18:03.240 --> 0:18:05.919 be a deeper history in other parts of the world, 0:18:06.359 --> 0:18:10.879 But I honestly believe that there's not been a great 0:18:10.960 --> 0:18:15.359 deal of awareness broadly among grassroots Americans about some of 0:18:15.400 --> 0:18:18.280 these shifts, but people are starting to wake up to it, 0:18:18.880 --> 0:18:21.399 and I hope my book is a part of that awakening. 0:18:21.440 --> 0:18:24.840 Not just because I think conservative policies are good for 0:18:24.880 --> 0:18:29.000 the Republican Party. It's because I believe freedom, free market economics, 0:18:29.800 --> 0:18:33.080 commitment to limited government, and American leadership in the world 0:18:33.359 --> 0:18:34.280 is good for America. 0:18:34.680 --> 0:18:36.680 To build on what Emory was talking about, though, we've 0:18:36.720 --> 0:18:39.840 seen recent primary elections and the people who are considered 0:18:40.119 --> 0:18:42.240 a bit more populist have been the winners of the 0:18:42.280 --> 0:18:44.679 Republican primary process. Those are the ones that have been 0:18:44.720 --> 0:18:47.680 backed by President Trump. He still has quite a bit 0:18:47.720 --> 0:18:51.040 of clout in getting those to Congress, to Washington, d C. 0:18:51.240 --> 0:18:54.480 He is, in many ways the Republican Party. Do you 0:18:54.560 --> 0:18:58.440 think that the Republican Party that you're talking about still exists? 0:18:59.040 --> 0:18:59.880 Oh? I do. 0:19:00.520 --> 0:19:04.600 And don't leave out his influence in primaries in Louisiana 0:19:04.720 --> 0:19:09.680 and Kentucky and Indiana, some state senate races in Indiana. Look, 0:19:10.520 --> 0:19:16.439 the President enjoys tremendous support among Republican primary voters, and 0:19:16.480 --> 0:19:18.399 I think it derives from the fact that from the 0:19:18.400 --> 0:19:21.679 time he came down that Golden escalator here in New 0:19:21.760 --> 0:19:25.359 York City. He has been willing to fight the radical left. 0:19:25.359 --> 0:19:28.720 He did it during our years together, he did it since, 0:19:28.880 --> 0:19:32.040 battled through law Fair, won back the White House. And 0:19:32.080 --> 0:19:36.720 I think there's a great appreciation by Republican voters for 0:19:36.800 --> 0:19:40.879 his continued fight against the radical left. But what I 0:19:40.920 --> 0:19:43.480 wrote the book for was just to make sure that 0:19:43.960 --> 0:19:48.320 we don't conflate the loyalty to the president, as some 0:19:48.480 --> 0:19:51.080 on the populous right would have an embrace of a 0:19:51.119 --> 0:19:55.160 new agenda for the Republican Party. I think the Republican 0:19:55.160 --> 0:19:58.240 Party has to be a party committed to free market 0:19:58.280 --> 0:20:02.800 economics and limited government and all the ideals and principles. 0:20:03.000 --> 0:20:09.080 I'm particularly troubled am read with your background on foreign affairs, particularly, 0:20:09.640 --> 0:20:15.120 I'm particularly troubled about the stops and starts on American 0:20:15.280 --> 0:20:20.480 support for Ukraine. It was the populous right, voices inside 0:20:20.520 --> 0:20:24.360 and outside the administration that actually argued against striking Iran's 0:20:24.440 --> 0:20:29.160 nuclear facilities a year ago and even launching Operation Epic Fury, 0:20:29.280 --> 0:20:32.880 and even more troubling to me, voices on the populace 0:20:32.920 --> 0:20:39.760 writer questioning America's support for Israel, and with that rhetoric 0:20:40.160 --> 0:20:46.639 actually descending at times into the dark hallways of anti Semitism. Look, 0:20:46.680 --> 0:20:49.720 that's not who conservatives are in this country. It's not 0:20:49.840 --> 0:20:52.600 what conservatives believe, and try and call it out in 0:20:52.600 --> 0:20:52.920 the book. 0:20:53.080 --> 0:20:55.560 Let's finish on one particular policy debate that I think 0:20:55.600 --> 0:20:58.760 we'll be at, defining policy debate for the next decade perhaps, 0:20:58.800 --> 0:21:01.720 and that's Ai. I've sat he wondering at times, what 0:21:01.880 --> 0:21:05.159