1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amerie Hordern join us each day 4 00:00:18,760 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,440 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,960 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,319 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,120 Speaker 2: Terminal and the Bloomberg Business app. We begin this out 10 00:00:37,159 --> 00:00:39,560 Speaker 2: with stocks extending their sell off as President Donald Trump's 11 00:00:39,560 --> 00:00:42,960 Speaker 2: push to take control of Greenland is sending fresh volatility 12 00:00:43,040 --> 00:00:46,760 Speaker 2: into markets worldwide. The IBM Vice chairman and former NEC 13 00:00:46,960 --> 00:00:49,480 Speaker 2: director Gary Cohne joins us now for more carry good 14 00:00:49,479 --> 00:00:51,559 Speaker 2: to see you, good, Thanks for having me. You heard 15 00:00:51,560 --> 00:00:53,519 Speaker 2: the way we open the program. There seem to be 16 00:00:53,560 --> 00:00:56,720 Speaker 2: a concrete ideology when you were alongside the president in 17 00:00:56,760 --> 00:00:59,920 Speaker 2: his first term or how would you describe this moment? 18 00:01:00,080 --> 00:01:01,080 Speaker 3: What is this all about? 19 00:01:02,280 --> 00:01:05,000 Speaker 4: No one knows for sure, but I think what we've 20 00:01:05,080 --> 00:01:08,560 Speaker 4: seen evolve in the Trump presidency is this desire to 21 00:01:08,680 --> 00:01:12,319 Speaker 4: negotiate and get a deal. So ultimately, is Greenland all 22 00:01:12,360 --> 00:01:15,520 Speaker 4: about getting a deal? We know that the North Atlantic 23 00:01:16,120 --> 00:01:18,759 Speaker 4: is becoming much more of a sought after territory from 24 00:01:18,760 --> 00:01:22,440 Speaker 4: a militaristic standpoint, So I understand the presence concerned to 25 00:01:22,520 --> 00:01:25,720 Speaker 4: have a military presence and protection of the North Atlantic 26 00:01:26,080 --> 00:01:29,880 Speaker 4: is if we want to expand our air defenses. Greenland 27 00:01:29,920 --> 00:01:32,679 Speaker 4: is a pretty strategic spot, so I understand what the 28 00:01:32,680 --> 00:01:33,600 Speaker 4: President's interest is. 29 00:01:33,760 --> 00:01:35,520 Speaker 5: They also have rarers, which is. 30 00:01:35,480 --> 00:01:38,520 Speaker 4: Something that we in the United States can't supply to ourselves. 31 00:01:38,680 --> 00:01:42,600 Speaker 4: So the question is is this a negotiating posture to 32 00:01:42,680 --> 00:01:45,800 Speaker 4: get a deal with Greenland, to get more rarers, to 33 00:01:45,800 --> 00:01:48,720 Speaker 4: get a larger naval and air force presence. And it 34 00:01:48,760 --> 00:01:51,680 Speaker 4: may be it does seem like that's on the table, 35 00:01:51,840 --> 00:01:53,920 Speaker 4: and this may all evolve in a place where the 36 00:01:54,000 --> 00:01:56,440 Speaker 4: United States ends up in a very good strategic position. 37 00:01:56,480 --> 00:01:58,120 Speaker 2: Do you think that's the way the business world sees 38 00:01:58,160 --> 00:02:00,360 Speaker 2: it coming into the world economy before in this week? 39 00:02:00,440 --> 00:02:02,880 Speaker 4: You know, I think the business world's split on it. 40 00:02:02,960 --> 00:02:04,840 Speaker 4: You know, you've a these got a European presence here 41 00:02:04,840 --> 00:02:06,800 Speaker 4: in the US presence here. I think the US presence 42 00:02:06,880 --> 00:02:08,960 Speaker 4: is a little bit more optimistic that this is going 43 00:02:09,040 --> 00:02:11,240 Speaker 4: to end in the right place, and we've seen this before. 44 00:02:11,520 --> 00:02:14,560 Speaker 4: I think the European contingency is a little more leary 45 00:02:14,639 --> 00:02:15,880 Speaker 4: and say, look, you. 46 00:02:15,840 --> 00:02:18,560 Speaker 5: Know, maybe you're confident this ends well. We don't like 47 00:02:18,639 --> 00:02:20,360 Speaker 5: being in the middle of this right now, which is. 48 00:02:20,360 --> 00:02:23,400 Speaker 6: A reason why in European hours, treasuries are selling off 49 00:02:23,480 --> 00:02:26,000 Speaker 6: much more of the dollar was much lower, and as 50 00:02:26,040 --> 00:02:28,600 Speaker 6: the US wakes up, people are coming in and buying it. 51 00:02:29,040 --> 00:02:32,240 Speaker 6: How much is the sell America trade real and how 52 00:02:32,320 --> 00:02:35,560 Speaker 6: much is it a perception based on these moments, the 53 00:02:35,560 --> 00:02:36,320 Speaker 6: ones that we saw on. 54 00:02:36,360 --> 00:02:39,760 Speaker 4: Liberation Day, there is some sell America going on right now. 55 00:02:39,760 --> 00:02:42,639 Speaker 4: I've met with a couple of different asset managers this morning, say, 56 00:02:42,680 --> 00:02:45,880 Speaker 4: the global funds are reallocating a little bit out of 57 00:02:45,919 --> 00:02:46,440 Speaker 4: the United. 58 00:02:46,280 --> 00:02:47,600 Speaker 5: States, so you see that. 59 00:02:47,639 --> 00:02:49,680 Speaker 4: You know, interest rates are higher, so people selling bonds 60 00:02:49,760 --> 00:02:52,760 Speaker 4: rates go higher. People are repatriating currency back home. They're 61 00:02:52,800 --> 00:02:55,680 Speaker 4: selling dollars to buy local currency, they're selling stock market 62 00:02:55,680 --> 00:02:58,079 Speaker 4: they've got to repatriate currency. So I think we're seeing 63 00:02:58,160 --> 00:03:01,080 Speaker 4: a little bit of that. I don't think that's what's 64 00:03:01,160 --> 00:03:03,800 Speaker 4: driving the overall market right now. It doesn't feel like 65 00:03:03,840 --> 00:03:06,000 Speaker 4: we've got a liquidate in America. It feels like we've 66 00:03:06,040 --> 00:03:09,640 Speaker 4: got a trim around the edges in asset allocation models 67 00:03:09,680 --> 00:03:09,960 Speaker 4: going on. 68 00:03:10,120 --> 00:03:12,760 Speaker 6: This goes back to the wrestling match we were describing 69 00:03:12,960 --> 00:03:15,040 Speaker 6: AI on one side. You've got politics on the other, 70 00:03:15,080 --> 00:03:17,520 Speaker 6: and they're facing off and sort of sell America until. 71 00:03:17,280 --> 00:03:19,440 Speaker 7: AI rears its head and get into the lead. And 72 00:03:19,440 --> 00:03:20,160 Speaker 7: that's where it is. 73 00:03:20,200 --> 00:03:22,680 Speaker 4: Sell America until the light turns green and everyone has 74 00:03:22,720 --> 00:03:26,640 Speaker 4: to buy America. Because in the real reality, if you 75 00:03:26,720 --> 00:03:28,760 Speaker 4: look at the US economy and what's going on, we've 76 00:03:28,760 --> 00:03:30,840 Speaker 4: got one of the strongest economies in the world today. 77 00:03:31,120 --> 00:03:33,200 Speaker 4: You know, we're growing at five plus percent and growth. 78 00:03:33,639 --> 00:03:36,400 Speaker 4: We've got a pretty good tail wind going on behind US. 79 00:03:36,520 --> 00:03:38,960 Speaker 4: I mean, right now, the only thing stopping is all 80 00:03:39,000 --> 00:03:42,520 Speaker 4: this geopolitical risk. If and when, and I say, when 81 00:03:43,160 --> 00:03:46,440 Speaker 4: this geopolitical risk settles down, the market's probably going to 82 00:03:46,480 --> 00:03:48,640 Speaker 4: take off again. That's been the history of this pattern. 83 00:03:48,760 --> 00:03:51,560 Speaker 8: Settles down Gary. Two and a half weeks ago, we 84 00:03:51,680 --> 00:03:54,720 Speaker 8: captured Nicholas Madora. It feels like a decade ago. Now 85 00:03:54,760 --> 00:03:57,640 Speaker 8: we're sitting in Davos talking about Greenland. You think you 86 00:03:58,160 --> 00:03:59,240 Speaker 8: to settle down under a. 87 00:03:59,280 --> 00:04:02,400 Speaker 5: Recadministry two weeks Yeah, we're going to settle down. 88 00:04:03,360 --> 00:04:05,720 Speaker 4: I think that there's a couple of balls up in 89 00:04:05,720 --> 00:04:06,600 Speaker 4: the air right now. 90 00:04:07,480 --> 00:04:09,960 Speaker 5: But you know, this two show pass. 91 00:04:10,520 --> 00:04:13,280 Speaker 4: We can go back in the last eight twelve years, 92 00:04:13,320 --> 00:04:15,640 Speaker 4: and there's been periods of time where we've had these, 93 00:04:16,040 --> 00:04:17,000 Speaker 4: you know, highly. 94 00:04:16,920 --> 00:04:18,520 Speaker 5: Volatile geopolitical moments. 95 00:04:18,600 --> 00:04:21,240 Speaker 4: We're in a highly valuatible geopolitical. 96 00:04:20,480 --> 00:04:21,239 Speaker 5: Moment right now. 97 00:04:21,680 --> 00:04:23,600 Speaker 4: And by the way, I'm not sure as a coincidence 98 00:04:23,640 --> 00:04:24,919 Speaker 4: that Davis is right in the middle. 99 00:04:25,040 --> 00:04:27,120 Speaker 8: All right, Interesting, I want to ask you about the 100 00:04:27,120 --> 00:04:29,440 Speaker 8: FED chair race because you were in the room with 101 00:04:29,480 --> 00:04:31,960 Speaker 8: the president in Trump won when he decided to go 102 00:04:32,000 --> 00:04:32,240 Speaker 8: for J. 103 00:04:32,400 --> 00:04:32,799 Speaker 3: Powell. 104 00:04:32,880 --> 00:04:35,080 Speaker 8: What kind of questions do you think he's lobbing at 105 00:04:35,080 --> 00:04:37,280 Speaker 8: these individuals and in the end, who do you think 106 00:04:37,279 --> 00:04:38,120 Speaker 8: it's going to come down to. 107 00:04:38,520 --> 00:04:40,600 Speaker 5: Look, the president's in an enviable position right now. 108 00:04:40,640 --> 00:04:43,479 Speaker 4: He's got what we know, He's got four really highly 109 00:04:43,560 --> 00:04:46,680 Speaker 4: qualified candidates. Any one of those four could do a 110 00:04:46,720 --> 00:04:49,080 Speaker 4: really good job in there. I think the President at 111 00:04:49,080 --> 00:04:54,120 Speaker 4: this point is trying to understand the sort of mindset 112 00:04:54,240 --> 00:04:56,359 Speaker 4: of the person he's going to put into the position. 113 00:04:56,680 --> 00:04:59,560 Speaker 4: The President clearly has a view on what interest rate 114 00:04:59,600 --> 00:05:02,880 Speaker 4: policy should be. The problem or the opportunity with the 115 00:05:02,880 --> 00:05:05,760 Speaker 4: FED job is once he appoints someone into that job, 116 00:05:05,920 --> 00:05:09,520 Speaker 4: they're an independent agency and he loses his day to 117 00:05:09,560 --> 00:05:12,279 Speaker 4: day contact with that person. So I think the President 118 00:05:12,360 --> 00:05:15,719 Speaker 4: learned in the first administration that it's very important to 119 00:05:15,720 --> 00:05:17,799 Speaker 4: who he puts in that job, and that he should 120 00:05:17,880 --> 00:05:20,520 Speaker 4: make sure that he's very comfortable with their policy mandate 121 00:05:20,720 --> 00:05:21,839 Speaker 4: before he appoints them. 122 00:05:21,920 --> 00:05:23,960 Speaker 2: Do you think it's become even more important now that 123 00:05:24,000 --> 00:05:27,400 Speaker 2: that individual needs to have the ability to persuade the 124 00:05:27,400 --> 00:05:30,039 Speaker 2: rest of the committee in a way that maybe a 125 00:05:30,080 --> 00:05:32,800 Speaker 2: few years ago that wasn't as relevant. There's just a 126 00:05:32,839 --> 00:05:35,279 Speaker 2: sense on Wall Street that the President's approach in the 127 00:05:35,320 --> 00:05:38,200 Speaker 2: last twelve months has galvanized the rest of the committee 128 00:05:38,200 --> 00:05:38,600 Speaker 2: to dig in. 129 00:05:39,440 --> 00:05:41,800 Speaker 4: Look, I think the committee's structure is going to be 130 00:05:41,800 --> 00:05:45,680 Speaker 4: the committee structure. I'm not sure if the chairperson can 131 00:05:45,839 --> 00:05:49,240 Speaker 4: ultimately sway the committee that far. Could they sway one 132 00:05:49,600 --> 00:05:52,720 Speaker 4: vote or two votes potentially? But you've got some very 133 00:05:52,760 --> 00:05:56,599 Speaker 4: strong regional bank presidents, You've got some very strong governors 134 00:05:56,960 --> 00:05:59,400 Speaker 4: in the FED. I think the FED, ultimately, at the 135 00:05:59,480 --> 00:06:01,040 Speaker 4: end of the day, is going to be a tough 136 00:06:01,080 --> 00:06:03,760 Speaker 4: group to persuade. I think they'll come out in the 137 00:06:03,839 --> 00:06:06,400 Speaker 4: right place I mean, historically, the FED has done a 138 00:06:06,520 --> 00:06:09,200 Speaker 4: very good job. Have they been a little bit late? Yeah, 139 00:06:09,320 --> 00:06:13,599 Speaker 4: they were late in the transitory inflationary problem of COVID, 140 00:06:13,800 --> 00:06:14,640 Speaker 4: but they've caught up. 141 00:06:14,680 --> 00:06:15,839 Speaker 5: They've gotten to the right place. 142 00:06:15,920 --> 00:06:17,840 Speaker 4: I think if you look at the FED through the cycle, 143 00:06:18,040 --> 00:06:19,200 Speaker 4: they end up getting. 144 00:06:18,960 --> 00:06:19,640 Speaker 5: To the right place. 145 00:06:19,800 --> 00:06:23,039 Speaker 2: He was diplomatic about the four candidates. Can I just 146 00:06:23,080 --> 00:06:27,240 Speaker 2: talk about some of them individually? You can Governor Chris Waller? 147 00:06:27,320 --> 00:06:30,159 Speaker 2: You can too, You can governor Chris Waller. I believe 148 00:06:30,240 --> 00:06:33,640 Speaker 2: you were part of that process, right, Vice Chef Clarity, 149 00:06:33,680 --> 00:06:36,240 Speaker 2: you were part of that process too. What was the 150 00:06:36,279 --> 00:06:39,440 Speaker 2: president's approach to that process back then? Was he as 151 00:06:39,480 --> 00:06:40,960 Speaker 2: involved as he appears to be now? 152 00:06:41,760 --> 00:06:45,800 Speaker 4: He was not as involved then, But you remember he 153 00:06:45,960 --> 00:06:49,440 Speaker 4: was a first term president who was an outsider to Washington. 154 00:06:49,680 --> 00:06:51,479 Speaker 4: That was part of his mystique. As he was an 155 00:06:51,520 --> 00:06:54,839 Speaker 4: outsider to Washington. He knew he had to put someone 156 00:06:54,880 --> 00:06:58,400 Speaker 4: into the FED chair's role, and he approached it. But 157 00:06:58,680 --> 00:07:02,480 Speaker 4: I think now, understanding the importance of interest rate policy 158 00:07:02,839 --> 00:07:06,440 Speaker 4: and understanding his view of interest rate policy, he's taking 159 00:07:06,520 --> 00:07:09,680 Speaker 4: considerably more time talking to the various candidates. 160 00:07:09,680 --> 00:07:12,120 Speaker 2: Ill asked you the question, Mike got even trouble. Is 161 00:07:12,200 --> 00:07:15,440 Speaker 2: Kevin Wash a chameleon? Is he a hawk? Is he 162 00:07:15,480 --> 00:07:17,720 Speaker 2: a dove? Is he whatever it takes to get the job? 163 00:07:17,840 --> 00:07:19,960 Speaker 2: Why didn't you get the job last time? Look, Kevin 164 00:07:20,000 --> 00:07:22,400 Speaker 2: is highly qualified, without doubt. Kevin has served in the 165 00:07:22,440 --> 00:07:24,960 Speaker 2: FED without a doubt. Kevin was there during some of 166 00:07:24,960 --> 00:07:27,800 Speaker 2: the toughest days of the FED during the financial crisis. 167 00:07:28,120 --> 00:07:31,360 Speaker 2: I personally was dealing with Kevin on an hourly basis 168 00:07:31,680 --> 00:07:33,400 Speaker 2: as we were trying to figure out what was going 169 00:07:33,440 --> 00:07:36,440 Speaker 2: on in the United States financials system. Kevin was an 170 00:07:36,520 --> 00:07:40,280 Speaker 2: active participant in the outcome that we all benefited from. 171 00:07:40,440 --> 00:07:42,360 Speaker 2: And without Kevin's wisdom, I'm not sure we would have 172 00:07:42,400 --> 00:07:45,520 Speaker 2: ended up in the same place. He's a highly qualified candidate. 173 00:07:45,600 --> 00:07:47,320 Speaker 2: It sounds like out of the thought that's who he'd 174 00:07:47,320 --> 00:07:48,920 Speaker 2: like to see in the seat. Based on that strong 175 00:07:48,920 --> 00:07:50,160 Speaker 2: defense of Kevin Wood. 176 00:07:49,960 --> 00:07:52,840 Speaker 4: I think Kevin Hasset's a great quality candidate. I worked 177 00:07:52,880 --> 00:07:54,280 Speaker 4: with Kevin Hasse when I was in the White House. 178 00:07:54,320 --> 00:07:56,960 Speaker 4: He was the CEA director. You thought Kevin Kevin Hasse 179 00:07:57,160 --> 00:07:58,760 Speaker 4: was an excellent CEA. 180 00:07:58,920 --> 00:08:00,520 Speaker 2: Let me tell you what some people say about Kevin 181 00:08:00,560 --> 00:08:02,880 Speaker 2: has said that if he's appointed, that's a puppet of 182 00:08:02,920 --> 00:08:04,640 Speaker 2: the President of the United styce sit. 183 00:08:04,680 --> 00:08:06,160 Speaker 3: They're small and do whatever it takes. 184 00:08:06,640 --> 00:08:09,200 Speaker 4: Is that unfat You know, you and I both know 185 00:08:09,520 --> 00:08:12,160 Speaker 4: whoever gets appointed, there will be people that are disappointed 186 00:08:12,200 --> 00:08:14,240 Speaker 4: and will have negative things to say about them. On 187 00:08:14,280 --> 00:08:16,160 Speaker 4: the flip side, there will be people that'll be very 188 00:08:16,200 --> 00:08:18,600 Speaker 4: happy with whoever one of those four gets appointed, and 189 00:08:18,640 --> 00:08:21,080 Speaker 4: if it's if it's a fifth candiate we haven't seen yet, 190 00:08:21,200 --> 00:08:22,480 Speaker 4: they'll be equally happy. 191 00:08:22,200 --> 00:08:22,640 Speaker 5: With that one. 192 00:08:22,960 --> 00:08:24,400 Speaker 6: There is a sense of whoever's going to be there, 193 00:08:24,400 --> 00:08:26,480 Speaker 6: they're going to cut rates. How much is the entire 194 00:08:26,520 --> 00:08:28,160 Speaker 6: buildout of AI, which is what you spend most of 195 00:08:28,200 --> 00:08:31,200 Speaker 6: your time talking about here, based on the idea that 196 00:08:31,240 --> 00:08:32,880 Speaker 6: the FED is going to be easying policy. 197 00:08:32,520 --> 00:08:36,920 Speaker 4: No matter what the AI buildout in rates their link, 198 00:08:37,000 --> 00:08:39,840 Speaker 4: but they're not in a strictly link. This AI buildout 199 00:08:39,920 --> 00:08:43,079 Speaker 4: is being built because there's demand, there's forward demand, and 200 00:08:43,120 --> 00:08:46,120 Speaker 4: the AI companies feel like they are behind the curve 201 00:08:46,200 --> 00:08:48,880 Speaker 4: and being able to facilitate the needs of their clients. 202 00:08:49,040 --> 00:08:51,120 Speaker 4: They are going to build these data centers. The only 203 00:08:51,200 --> 00:08:53,320 Speaker 4: question that rates have is what is the ultimate all 204 00:08:53,400 --> 00:08:55,720 Speaker 4: in cost to build these things? And interest rates are 205 00:08:55,720 --> 00:08:58,959 Speaker 4: going to be important These are big, huge capex expenditures 206 00:08:59,080 --> 00:09:01,319 Speaker 4: with thirty year life, so you know the amount of 207 00:09:01,360 --> 00:09:03,079 Speaker 4: interest you're going to pay to finance win these centers 208 00:09:03,160 --> 00:09:05,920 Speaker 4: is important. So twenty five or fifty basis points has 209 00:09:05,960 --> 00:09:09,440 Speaker 4: a lot to do with these decisions. But I will 210 00:09:09,480 --> 00:09:12,760 Speaker 4: caution you, like I always do, the FED only controls 211 00:09:12,760 --> 00:09:15,959 Speaker 4: FED funds, they control overnight rates. You've been talking all 212 00:09:16,000 --> 00:09:18,320 Speaker 4: morning about the tenure, the ten years at four thirty 213 00:09:18,920 --> 00:09:21,200 Speaker 4: where these where these data centers are going to be financed. 214 00:09:21,200 --> 00:09:23,080 Speaker 4: They're going to be financed to the medium to the 215 00:09:23,120 --> 00:09:25,040 Speaker 4: long to the very long end of the curve. It's 216 00:09:25,080 --> 00:09:28,160 Speaker 4: going to the combination of duration. FED funds is not 217 00:09:28,160 --> 00:09:30,520 Speaker 4: going to affect that. So FED funds could possibly go 218 00:09:30,600 --> 00:09:33,280 Speaker 4: down and the interest rate to finance a data setting 219 00:09:33,400 --> 00:09:34,320 Speaker 4: could be unchanged. 220 00:09:34,360 --> 00:09:35,520 Speaker 3: Do you miss the trident floor? 221 00:09:35,840 --> 00:09:37,040 Speaker 5: Of course you missed the trading floor. 222 00:09:37,120 --> 00:09:38,839 Speaker 2: Yeah, if you missed the tread and floor, can you 223 00:09:38,840 --> 00:09:40,760 Speaker 2: imagine how scary things were back at Goment back in 224 00:09:40,760 --> 00:09:42,520 Speaker 2: the day. But that's when the first year round list. 225 00:09:42,520 --> 00:09:43,720 Speaker 2: Gary's walking the trident floor. 226 00:09:43,800 --> 00:09:46,240 Speaker 4: Yeah, I think that he But John, that's when they 227 00:09:46,360 --> 00:09:48,840 Speaker 4: really were trading floor us. Like he actually stood up 228 00:09:48,920 --> 00:09:50,840 Speaker 4: and talked on phones and smoked each other. 229 00:09:50,880 --> 00:09:53,760 Speaker 5: And did it prepare now now it's machines. Now it's machines. 230 00:09:53,800 --> 00:09:55,080 Speaker 7: Did it prepare you for the West Wing? 231 00:09:55,559 --> 00:09:57,480 Speaker 5: I did it? Did it? Very much? Did? 232 00:09:57,679 --> 00:09:58,160 Speaker 3: In what way? 233 00:09:58,200 --> 00:09:58,520 Speaker 5: Gary? 234 00:09:59,280 --> 00:10:03,000 Speaker 4: Just they think the ability to be watching five different 235 00:10:03,040 --> 00:10:05,040 Speaker 4: things going on at the same time and be listening 236 00:10:05,040 --> 00:10:05,920 Speaker 4: in five places. 237 00:10:06,240 --> 00:10:09,600 Speaker 5: People in the White House were always amazed that I. 238 00:10:09,600 --> 00:10:12,000 Speaker 4: Could be like having a conversation over here and talking 239 00:10:12,000 --> 00:10:14,200 Speaker 4: to someone behind me because I heard them talking. But 240 00:10:14,240 --> 00:10:15,680 Speaker 4: when you grew up in a trading floor, and you 241 00:10:15,679 --> 00:10:18,200 Speaker 4: grew up in a trading environment, your eyes and ears 242 00:10:18,280 --> 00:10:19,280 Speaker 4: have to see everything. 243 00:10:19,880 --> 00:10:23,400 Speaker 2: Stay with us more Bloomberg surveillance coming up after this. 244 00:10:32,520 --> 00:10:34,840 Speaker 2: Joining us now in Dallas, Switzerland's Paul Ryan, the former 245 00:10:34,880 --> 00:10:37,400 Speaker 2: House Speaker and now today Vice Chef Speaker. 246 00:10:37,480 --> 00:10:38,200 Speaker 3: Ryan, Good morning, good to. 247 00:10:38,160 --> 00:10:40,080 Speaker 2: See you, Good morning to see I had this question 248 00:10:40,160 --> 00:10:42,679 Speaker 2: planned for a while. Does your party now have more 249 00:10:42,720 --> 00:10:45,040 Speaker 2: in common with Senator Bernie Sanders than the one hundred 250 00:10:45,040 --> 00:10:47,160 Speaker 2: and fourteenth and one hundred and fifteenth Congress that you 251 00:10:47,200 --> 00:10:47,520 Speaker 2: ever saw? 252 00:10:47,559 --> 00:10:51,640 Speaker 9: Apparently in economics, maybe the case is right on tariffs 253 00:10:51,679 --> 00:10:54,760 Speaker 9: and on interest rate caps and things like that. Perhaps 254 00:10:55,600 --> 00:10:58,079 Speaker 9: I'm a conservative. This is not conservative economics. 255 00:10:58,200 --> 00:10:59,760 Speaker 2: It's the space for that in your party. 256 00:10:59,840 --> 00:11:02,600 Speaker 10: Now, yeah, there is. Our party is a big ten party. 257 00:11:02,600 --> 00:11:03,800 Speaker 10: It's got a lot of different factions. 258 00:11:03,840 --> 00:11:05,880 Speaker 9: The dominant faction right now is more of an economic 259 00:11:05,920 --> 00:11:06,840 Speaker 9: populist faction. 260 00:11:07,400 --> 00:11:09,560 Speaker 10: That's the President's faction. That's MAGA. 261 00:11:10,480 --> 00:11:12,880 Speaker 9: I'm a conservative, I'm in the minority of my own party. 262 00:11:12,920 --> 00:11:17,239 Speaker 8: But that happens when John's talking about having this relationship, 263 00:11:17,320 --> 00:11:19,240 Speaker 8: say the MAGA wing with Bernie Sanders. 264 00:11:19,280 --> 00:11:21,720 Speaker 7: We're seeing that with a ton of issues. 265 00:11:21,720 --> 00:11:24,920 Speaker 8: The president's talking about that the defense sector shouldn't have 266 00:11:25,000 --> 00:11:27,760 Speaker 8: dividends or buybacks, credit card interest rate caps. Bernie Sanders 267 00:11:27,760 --> 00:11:31,520 Speaker 8: literally wrote the bill. How do individuals in the minority 268 00:11:31,600 --> 00:11:34,160 Speaker 8: of the Republican Party right now make their voices heard. 269 00:11:34,200 --> 00:11:37,880 Speaker 9: This is populism, but it's populism tethered to whatever people 270 00:11:37,880 --> 00:11:42,360 Speaker 9: think is popular, not tethered to certain core principles like liberty, freedom, 271 00:11:42,400 --> 00:11:45,240 Speaker 9: free enterprise, private property rights, et cetera, et cetera. So 272 00:11:45,400 --> 00:11:47,360 Speaker 9: my wing of the party, which is the classical liberal 273 00:11:47,360 --> 00:11:49,360 Speaker 9: conservative winging the free market wing of the party, is 274 00:11:49,360 --> 00:11:51,520 Speaker 9: in the minority, and we just have to make our 275 00:11:51,520 --> 00:11:53,600 Speaker 9: case for why we believe what we believe in why 276 00:11:53,640 --> 00:11:55,040 Speaker 9: we think people are better off. At the end of 277 00:11:55,080 --> 00:11:58,360 Speaker 9: the day, the challenge is it's hard to defeat populism 278 00:11:58,640 --> 00:12:01,760 Speaker 9: in sound bites, in emotion, and that's what can win 279 00:12:01,800 --> 00:12:03,640 Speaker 9: the day, but it doesn't win the issue. It doesn't 280 00:12:03,640 --> 00:12:06,200 Speaker 9: actually deliver the results. So the end of the day, 281 00:12:06,520 --> 00:12:08,840 Speaker 9: I think results are what matter, and I think people 282 00:12:09,240 --> 00:12:13,520 Speaker 9: voters vote for results. If they're going to vote for populism, 283 00:12:13,600 --> 00:12:15,800 Speaker 9: that that that that speaks to their concerns and their 284 00:12:15,840 --> 00:12:18,360 Speaker 9: grievances and their their and their frustrations. 285 00:12:18,679 --> 00:12:19,320 Speaker 10: That's one thing. 286 00:12:19,360 --> 00:12:23,199 Speaker 9: But if that populism doesn't deliver policies that actually solve problems, 287 00:12:23,559 --> 00:12:25,520 Speaker 9: then they're going to look elsewhere and hopefully we can 288 00:12:25,600 --> 00:12:29,720 Speaker 9: have a better discussion about what actually works. What principles 289 00:12:29,880 --> 00:12:32,840 Speaker 9: that build our country, that make our economy strong. It's 290 00:12:32,840 --> 00:12:35,679 Speaker 9: our private property rights, our deep liquid capital markets, our 291 00:12:35,720 --> 00:12:36,360 Speaker 9: rule of law. 292 00:12:36,880 --> 00:12:39,280 Speaker 10: That's why America is America. That's why we've done so well. 293 00:12:39,360 --> 00:12:41,680 Speaker 9: We have to defend those principles, even if those principles 294 00:12:41,720 --> 00:12:42,520 Speaker 9: aren't that popular. 295 00:12:42,640 --> 00:12:44,199 Speaker 7: You're a free market individual. 296 00:12:44,280 --> 00:12:47,439 Speaker 8: This administration is taking equity stakes in companies. 297 00:12:47,960 --> 00:12:50,319 Speaker 7: Is that state capitalism the way that Chinese do it, 298 00:12:50,440 --> 00:12:52,400 Speaker 7: or say, like the Europeans in the seventies. 299 00:12:52,480 --> 00:12:55,400 Speaker 9: Yeah, it's more of Europeans more, it's more Japanese, it's 300 00:12:55,480 --> 00:12:58,720 Speaker 9: more Europeans. It's it's not Chinese, it's it's it's not 301 00:12:58,760 --> 00:13:00,839 Speaker 9: what conservatives are for. We don't believe in doing that. 302 00:13:01,400 --> 00:13:05,839 Speaker 9: But this is more industrial policy, less, less communist dictatorship. 303 00:13:05,880 --> 00:13:07,120 Speaker 10: It's very different. 304 00:13:07,720 --> 00:13:10,320 Speaker 6: Your role right now is to advise companies, and you're 305 00:13:10,360 --> 00:13:12,400 Speaker 6: coming at a time where companies have no clue what's 306 00:13:12,400 --> 00:13:14,199 Speaker 6: going on at the White House or what might come 307 00:13:14,280 --> 00:13:14,800 Speaker 6: out of it. 308 00:13:15,080 --> 00:13:16,040 Speaker 10: What do you tell them? 309 00:13:16,480 --> 00:13:18,280 Speaker 9: Yeah, I mean, we just did a survey actually of 310 00:13:18,320 --> 00:13:22,080 Speaker 9: seven hundred and fifty CEOs that Tonayo just did, and frankly, 311 00:13:22,120 --> 00:13:23,840 Speaker 9: a lot of them are pretty optimistic about. 312 00:13:23,679 --> 00:13:23,960 Speaker 10: M and A. 313 00:13:24,040 --> 00:13:28,920 Speaker 9: They're optimistic about economic growth. Where they're uncertain is tariffs. 314 00:13:29,240 --> 00:13:32,520 Speaker 9: So they have to plan for resiliency. They're basically building 315 00:13:32,559 --> 00:13:35,000 Speaker 9: resilience systems because they don't know what's going. 316 00:13:34,960 --> 00:13:35,800 Speaker 10: To happen on tariffs. 317 00:13:35,840 --> 00:13:38,360 Speaker 9: I actually think and I hope, that the Supreme Court 318 00:13:38,440 --> 00:13:41,240 Speaker 9: may take away the IEP authority. I don't think that 319 00:13:41,360 --> 00:13:44,600 Speaker 9: law was written for tariffs. It's a sanctions law. We'll 320 00:13:44,600 --> 00:13:46,480 Speaker 9: find out and maybe even later today, I don't know 321 00:13:46,520 --> 00:13:48,720 Speaker 9: when the court's going to rule, but that's a tool 322 00:13:48,800 --> 00:13:52,040 Speaker 9: the president's been using far beyond Congress's intents. 323 00:13:52,080 --> 00:13:53,320 Speaker 10: In my that's my opinion. 324 00:13:54,240 --> 00:13:56,600 Speaker 9: But if that happens, then he'll have to go to 325 00:13:56,640 --> 00:13:58,960 Speaker 9: other trade laws that aren't as easy to use, like 326 00:13:59,000 --> 00:14:02,080 Speaker 9: the IEPA laws have been used, and so that takes 327 00:14:02,080 --> 00:14:04,240 Speaker 9: away some uncertainty. But we're going to have trade uncertainty, 328 00:14:04,240 --> 00:14:07,840 Speaker 9: tear if uncertainty. But there's good regulatory posture, we have 329 00:14:07,920 --> 00:14:08,960 Speaker 9: good tax policy. 330 00:14:09,240 --> 00:14:10,360 Speaker 10: There's gonna be a lot of M and A. 331 00:14:10,559 --> 00:14:12,680 Speaker 9: So I think there's it's we're driving the car with 332 00:14:12,720 --> 00:14:14,640 Speaker 9: two feet. We got one foot on the gas, one 333 00:14:14,679 --> 00:14:17,760 Speaker 9: put on the brake, and that's what That's what CEOs 334 00:14:17,760 --> 00:14:19,840 Speaker 9: are trying to plan for. How do they respond, how 335 00:14:19,880 --> 00:14:22,840 Speaker 9: do they seize the opportunities and plan for the uncertainties. 336 00:14:22,920 --> 00:14:25,200 Speaker 6: We just had the head of General Atlantic on who 337 00:14:25,200 --> 00:14:28,120 Speaker 6: said that resilience to him, means diversifying, and it means 338 00:14:28,120 --> 00:14:29,880 Speaker 6: diversifying away from the United States. 339 00:14:30,760 --> 00:14:32,760 Speaker 7: This is the what if scenario. 340 00:14:32,920 --> 00:14:35,000 Speaker 6: In the meantime, businesses have to plan how much are 341 00:14:35,000 --> 00:14:37,440 Speaker 6: the people you're talking to moving capital flows outside of 342 00:14:37,440 --> 00:14:39,480 Speaker 6: the US in a way that concerns you. 343 00:14:39,560 --> 00:14:40,480 Speaker 10: I worry about that. 344 00:14:40,560 --> 00:14:43,080 Speaker 9: I worry more frankly about a long term debt posture 345 00:14:43,520 --> 00:14:45,000 Speaker 9: and the fact that we're not doing anything to deal 346 00:14:45,040 --> 00:14:46,640 Speaker 9: with our debt, which means our dollar. 347 00:14:47,160 --> 00:14:48,040 Speaker 10: So I think there. 348 00:14:47,920 --> 00:14:49,840 Speaker 9: Are things that are that are good that are happening, 349 00:14:50,040 --> 00:14:52,160 Speaker 9: Say the stable coins being deployed. 350 00:14:51,840 --> 00:14:53,960 Speaker 10: That's good for the dollar. If we got our fiscal 351 00:14:53,960 --> 00:14:55,240 Speaker 10: house in order, that'd be great for the dollar. 352 00:14:55,240 --> 00:14:57,560 Speaker 9: But I don't see the populist politics lending itself to 353 00:14:57,600 --> 00:15:00,480 Speaker 9: doing those things. But we do have the best economy 354 00:15:00,480 --> 00:15:03,320 Speaker 9: in the world. We have the deepest, most liquid capital markets, 355 00:15:03,360 --> 00:15:05,160 Speaker 9: so I still think we're going to be there. We 356 00:15:05,200 --> 00:15:07,800 Speaker 9: have better regulations than what we had in the last administration. 357 00:15:07,840 --> 00:15:11,040 Speaker 9: We have good tax policy. But there's a lot of uncertainty. 358 00:15:11,040 --> 00:15:14,760 Speaker 9: So yeah, it bothers me when I hear companies feel 359 00:15:14,800 --> 00:15:17,320 Speaker 9: they need to diversify away from America because of the uncertainty. 360 00:15:17,760 --> 00:15:20,000 Speaker 9: But if we get this uncertainty dealt with, if the 361 00:15:20,080 --> 00:15:23,400 Speaker 9: uncertainty tamps down, then I think we'll be back in business. 362 00:15:23,440 --> 00:15:25,480 Speaker 10: So overall, I think we're going to be okay. At 363 00:15:25,520 --> 00:15:27,160 Speaker 10: the end of the day. I think our institutions stick. 364 00:15:27,360 --> 00:15:29,360 Speaker 2: Can we finish on the debt market you took us 365 00:15:29,440 --> 00:15:32,200 Speaker 2: that there's a sale off in today's session. Look four 366 00:15:32,400 --> 00:15:34,760 Speaker 2: thirty on a ten year bonb yeld. It's not a crisis. 367 00:15:34,800 --> 00:15:37,040 Speaker 2: I'm not going to pretend it is. But the direction 368 00:15:37,120 --> 00:15:39,640 Speaker 2: of travel is just to push more and push more. 369 00:15:39,840 --> 00:15:42,160 Speaker 2: And it's not just America anymore, that's right, Abe, Japan 370 00:15:42,280 --> 00:15:44,400 Speaker 2: is leaning in the same direction, and that'll loosened things 371 00:15:44,440 --> 00:15:45,080 Speaker 2: up as well. 372 00:15:45,360 --> 00:15:46,560 Speaker 3: What do you think we're building up to? 373 00:15:47,520 --> 00:15:49,240 Speaker 10: What I worry about our auction failures. 374 00:15:49,480 --> 00:15:52,920 Speaker 9: They won't technically be a failure because they'll make the primary. 375 00:15:52,600 --> 00:15:53,560 Speaker 10: Dealers buy the paper. 376 00:15:53,600 --> 00:15:56,320 Speaker 9: But I worry if we see that an auction would 377 00:15:56,360 --> 00:15:59,280 Speaker 9: have failed, that what the spike and yields will look like, 378 00:15:59,360 --> 00:16:01,520 Speaker 9: and then what that does to our fiscal policy. So 379 00:16:01,640 --> 00:16:03,640 Speaker 9: if we could get ahead of our fiscal policy problems 380 00:16:03,680 --> 00:16:06,960 Speaker 9: by reforming our entitlement programs prospectively for the X generation 381 00:16:07,040 --> 00:16:09,440 Speaker 9: on down, I think we could calm the bomb markets 382 00:16:09,440 --> 00:16:11,680 Speaker 9: down and we could be the flight to quality. Again, 383 00:16:12,280 --> 00:16:14,520 Speaker 9: We're not there and our politics aren't there yet, so 384 00:16:14,800 --> 00:16:16,680 Speaker 9: because that's not anywhere near. 385 00:16:16,720 --> 00:16:17,840 Speaker 10: Being politically viable. 386 00:16:18,360 --> 00:16:20,080 Speaker 9: You have these kinds of things, then you have all 387 00:16:20,120 --> 00:16:22,240 Speaker 9: this terarif uncertainty, all the things that are happening there 388 00:16:22,440 --> 00:16:23,880 Speaker 9: that are going to spook to markets. I don't know 389 00:16:23,880 --> 00:16:25,880 Speaker 9: if this is a Japan story today or if there's 390 00:16:25,880 --> 00:16:27,640 Speaker 9: a denmarket. I don't know what this is about. But 391 00:16:28,440 --> 00:16:30,480 Speaker 9: if we had our fiscal outs in order, I don't 392 00:16:30,480 --> 00:16:31,920 Speaker 9: think you'd see these kinds of shocks. 393 00:16:32,520 --> 00:16:36,000 Speaker 2: Stay with us multiple impeg Savannah's coming up off to this, 394 00:16:45,400 --> 00:16:48,680 Speaker 2: the President threatening to impose additional tariffs on some European 395 00:16:48,720 --> 00:16:53,520 Speaker 2: allies supporting Denmark while he pursues Greenland. The Finland President 396 00:16:53,640 --> 00:16:56,320 Speaker 2: Alexanders Stoop joins U snaffle moments the President, good to 397 00:16:56,320 --> 00:16:58,400 Speaker 2: see it, nice to say, thanks for always making some 398 00:16:58,440 --> 00:17:01,040 Speaker 2: time for us. Look, I would never traditionally start a 399 00:17:01,080 --> 00:17:03,840 Speaker 2: conversation like this with the head of state, but given 400 00:17:03,920 --> 00:17:06,280 Speaker 2: the news flow and the headlines and the pictures of 401 00:17:06,320 --> 00:17:08,960 Speaker 2: text we've seen over the past few days, I have 402 00:17:09,040 --> 00:17:11,840 Speaker 2: to get a better understanding from you directly. I understand 403 00:17:11,880 --> 00:17:13,840 Speaker 2: you were on an exchange with the President of the 404 00:17:13,920 --> 00:17:18,120 Speaker 2: United States where the President almost explicitly linked his failure 405 00:17:18,400 --> 00:17:21,159 Speaker 2: to win the Nobel Priest Prize with a more assertive 406 00:17:21,200 --> 00:17:22,680 Speaker 2: stance on Greenland. 407 00:17:23,040 --> 00:17:24,040 Speaker 3: Did that actually happen? 408 00:17:25,160 --> 00:17:27,439 Speaker 1: Well, yeah, I mean we do message a lot with 409 00:17:27,520 --> 00:17:30,400 Speaker 1: the President and sometimes I message together with the Prime 410 00:17:30,440 --> 00:17:33,400 Speaker 1: Minister of Norway, you and US Guard Sturta. So yes, 411 00:17:33,720 --> 00:17:37,159 Speaker 1: the response was as has been reported, and this is 412 00:17:37,200 --> 00:17:38,960 Speaker 1: what frank diplomacy is all about. 413 00:17:39,080 --> 00:17:39,760 Speaker 5: This is quite. 414 00:17:39,640 --> 00:17:42,879 Speaker 1: Normal in our engagements behind the scenes, and it's good 415 00:17:42,920 --> 00:17:44,080 Speaker 1: that we have these conversations. 416 00:17:44,119 --> 00:17:44,960 Speaker 3: You'd have to forgive me. 417 00:17:45,040 --> 00:17:47,280 Speaker 2: But for many people that don't feel that it's normal 418 00:17:47,520 --> 00:17:50,040 Speaker 2: to connect the failure to win a prize with a 419 00:17:50,080 --> 00:17:53,000 Speaker 2: more assertive stance over someone else's territory. 420 00:17:53,080 --> 00:17:55,600 Speaker 5: It is normal to have direct talks. 421 00:17:56,240 --> 00:18:01,840 Speaker 1: Of course, on the Greenland issue, I agree with the President. 422 00:18:03,119 --> 00:18:05,080 Speaker 1: I think now what we need to do is to 423 00:18:05,320 --> 00:18:08,080 Speaker 1: bring down the temperature. We need to find an off 424 00:18:08,200 --> 00:18:12,120 Speaker 1: ramp and probably create some kind of a process which will. 425 00:18:11,920 --> 00:18:13,600 Speaker 5: Strengthen Arctic security. 426 00:18:13,840 --> 00:18:16,359 Speaker 1: And sort of at the end of the tunnel, I 427 00:18:16,440 --> 00:18:19,760 Speaker 1: wish we could have a NATO summit in Ankara where 428 00:18:19,760 --> 00:18:23,399 Speaker 1: we all agree on a new Arctic security structure. 429 00:18:23,680 --> 00:18:25,160 Speaker 5: I come from an Arctic country. 430 00:18:25,680 --> 00:18:27,240 Speaker 1: I come from a country which has one of the 431 00:18:27,240 --> 00:18:30,640 Speaker 1: biggest militaries in Europe. I come from a country which 432 00:18:30,760 --> 00:18:34,680 Speaker 1: has the best know how in Arctic defense. So these 433 00:18:34,720 --> 00:18:36,960 Speaker 1: are the types of things that we need to work 434 00:18:37,000 --> 00:18:39,280 Speaker 1: with the alliance, including the United States. 435 00:18:39,440 --> 00:18:42,480 Speaker 8: President Trump has been talking about Greenland since twenty nineteen. 436 00:18:42,840 --> 00:18:44,920 Speaker 8: What makes it different this time? What does an off 437 00:18:45,000 --> 00:18:46,000 Speaker 8: ramp actually look like. 438 00:18:47,080 --> 00:18:50,000 Speaker 1: I think there's a short term scenario here. This is 439 00:18:50,000 --> 00:18:53,280 Speaker 1: a long term. Short term is to basically de escalate 440 00:18:53,320 --> 00:18:55,600 Speaker 1: the language, and I hope we'll see some of that 441 00:18:55,680 --> 00:18:59,240 Speaker 1: here in Davos, here today, tomorrow and the day after tomorrow. 442 00:19:00,200 --> 00:19:02,600 Speaker 1: And then the second one is a long term strategic 443 00:19:02,640 --> 00:19:05,639 Speaker 1: thinking on Okay, is this an issue of sovereignty or 444 00:19:05,720 --> 00:19:08,320 Speaker 1: is it an issue of security? I hope that it 445 00:19:08,400 --> 00:19:11,280 Speaker 1: is an issue of security, and then we start looking 446 00:19:11,320 --> 00:19:15,480 Speaker 1: at how we can beef up security in the Arctic region. Now, 447 00:19:15,760 --> 00:19:20,399 Speaker 1: the latest conversations that I've had about this subject in 448 00:19:20,480 --> 00:19:22,879 Speaker 1: the past two to three hours, this is how fast 449 00:19:22,920 --> 00:19:26,280 Speaker 1: things are changing in the new foreign policy world. Gives 450 00:19:26,359 --> 00:19:28,480 Speaker 1: me a little bit of hope that we'll find a way. 451 00:19:28,560 --> 00:19:30,080 Speaker 7: It feels like a live negotiation. 452 00:19:30,240 --> 00:19:32,440 Speaker 8: The President a lot of the time does come out 453 00:19:32,440 --> 00:19:34,800 Speaker 8: with something very aggressive to get to an endpoint, which 454 00:19:34,840 --> 00:19:36,680 Speaker 8: really is just a better deal. 455 00:19:37,000 --> 00:19:38,679 Speaker 7: I like this to NATO. 456 00:19:39,240 --> 00:19:40,880 Speaker 8: At one point there was reports you want to pull 457 00:19:40,880 --> 00:19:42,199 Speaker 8: out NATO, but really, at the end of the day, 458 00:19:42,240 --> 00:19:43,760 Speaker 8: you wanted Europe to spend more. 459 00:19:44,119 --> 00:19:46,320 Speaker 7: Is that how you view this through that lens. 460 00:19:46,680 --> 00:19:49,200 Speaker 1: Well, first of all, the president of the United States 461 00:19:49,359 --> 00:19:53,119 Speaker 1: has a capacity to deal with the multiplicity of issues 462 00:19:53,160 --> 00:19:55,560 Speaker 1: at the same time. I mean, you only look at 463 00:19:55,600 --> 00:20:03,720 Speaker 1: what's happened this year Venezuela, Iran, Greenland, Gaza, the Peace Board, 464 00:20:04,080 --> 00:20:06,000 Speaker 1: and many other things at the same time. And of 465 00:20:06,000 --> 00:20:11,280 Speaker 1: course add on to that domestic issues on the NATO issue. 466 00:20:11,560 --> 00:20:14,119 Speaker 1: If someone would have told me at the seventy fifth 467 00:20:14,480 --> 00:20:18,960 Speaker 1: anniversary of NATO in Washington, d C. In twenty twenty four, 468 00:20:19,040 --> 00:20:23,280 Speaker 1: I think it was that we are looking at increasing 469 00:20:23,280 --> 00:20:25,600 Speaker 1: our defense expenditure to five percent next year. 470 00:20:25,600 --> 00:20:27,080 Speaker 5: I please go and see a. 471 00:20:27,000 --> 00:20:30,480 Speaker 1: Doctor or consult the Foreign Affairs magazine because this. 472 00:20:30,520 --> 00:20:32,119 Speaker 5: Is not going to happen now. 473 00:20:32,200 --> 00:20:34,560 Speaker 1: If at the end of the day, after this what 474 00:20:34,680 --> 00:20:38,320 Speaker 1: could be called rhetorical escalation, we come up with a 475 00:20:38,320 --> 00:20:43,680 Speaker 1: stronger Arctic security, then that is good. And obviously we're 476 00:20:43,720 --> 00:20:46,720 Speaker 1: seeing foreign policy done in a slightly different way from 477 00:20:46,760 --> 00:20:47,480 Speaker 1: what we're used to. 478 00:20:48,000 --> 00:20:48,880 Speaker 5: But you know, I'm a finn. 479 00:20:49,240 --> 00:20:51,080 Speaker 1: I thought you'd ask the first question that you know, 480 00:20:51,160 --> 00:20:53,840 Speaker 1: what do you do? I said, in these coins of situations, 481 00:20:53,920 --> 00:20:56,119 Speaker 1: you take a deep breath, you go in the sauna 482 00:20:56,160 --> 00:20:58,240 Speaker 1: and you take an ice bath, and that's what we're 483 00:20:58,280 --> 00:20:58,600 Speaker 1: a missing. 484 00:20:58,680 --> 00:20:59,639 Speaker 5: That's what we're missing. 485 00:21:00,119 --> 00:21:02,960 Speaker 8: See sauna where they have had diplomatic dealings done. 486 00:21:03,640 --> 00:21:06,359 Speaker 7: Quite a scene. You can have the ice path right there. Look, 487 00:21:06,480 --> 00:21:07,200 Speaker 7: then there's this. 488 00:21:07,240 --> 00:21:11,560 Speaker 6: Question, mister President, about why European nations were sending more 489 00:21:11,600 --> 00:21:14,560 Speaker 6: troops to Greenland over the past couple of days in 490 00:21:14,600 --> 00:21:17,159 Speaker 6: the past week. At first it was to beef up 491 00:21:17,359 --> 00:21:20,639 Speaker 6: and show that they were serious about the security. 492 00:21:20,200 --> 00:21:21,440 Speaker 5: Not what it was about at all. 493 00:21:21,480 --> 00:21:24,359 Speaker 6: Okay, okay, So whether it was taken by President Trump 494 00:21:24,400 --> 00:21:25,600 Speaker 6: was I. 495 00:21:25,520 --> 00:21:28,560 Speaker 1: Think there was probably a misunderstanding or not. Probably there was. 496 00:21:28,680 --> 00:21:33,640 Speaker 1: So basically, let me explain. There is something called Arctic Endurance, 497 00:21:34,080 --> 00:21:37,320 Speaker 1: which is basically a NATO training exercise. 498 00:21:38,080 --> 00:21:40,560 Speaker 5: That exercise has eight different. 499 00:21:40,240 --> 00:21:44,960 Speaker 1: Components, all of which the United States is present. We 500 00:21:44,960 --> 00:21:47,760 Speaker 1: were asked by our allies to go and do a 501 00:21:47,840 --> 00:21:52,360 Speaker 1: reconnaissance miss mission to check out the territory, the landscape, 502 00:21:52,400 --> 00:21:54,400 Speaker 1: and how it's going to work out. This is completely 503 00:21:54,440 --> 00:21:58,480 Speaker 1: normal procedure and obviously I can't talk about the specifics 504 00:21:58,480 --> 00:22:01,840 Speaker 1: of that exercise, but trust me, it is not trying 505 00:22:01,880 --> 00:22:04,600 Speaker 1: to protect anything westbound, it's more eastbound. 506 00:22:04,960 --> 00:22:06,440 Speaker 7: At what point do. 507 00:22:06,440 --> 00:22:08,640 Speaker 6: You feel like you're just fielding calls because you thought 508 00:22:08,640 --> 00:22:10,119 Speaker 6: of as a Trump whisperer. I mean, what are you 509 00:22:10,160 --> 00:22:14,400 Speaker 6: telling your colleagues and other European nations how to deal 510 00:22:14,440 --> 00:22:14,960 Speaker 6: with mister. 511 00:22:14,960 --> 00:22:16,800 Speaker 5: Well, I think you know diplomacy. 512 00:22:17,480 --> 00:22:20,480 Speaker 1: A lot of times when people analyze diplomacy, they look 513 00:22:20,520 --> 00:22:22,800 Speaker 1: at it on a state to state relations. You know, 514 00:22:22,840 --> 00:22:27,960 Speaker 1: what's the values, interests, power, culture, history, geography, But they 515 00:22:28,000 --> 00:22:31,879 Speaker 1: forget that a lot of it is actually about person 516 00:22:31,920 --> 00:22:36,359 Speaker 1: to person engagement and the fact that I'm able to 517 00:22:36,400 --> 00:22:40,000 Speaker 1: communicate directly with the president puts me as president of 518 00:22:40,000 --> 00:22:42,879 Speaker 1: filling into good position. But I have no illusions about 519 00:22:42,920 --> 00:22:47,280 Speaker 1: being a Trump whisperer. You know, he's the President of 520 00:22:47,320 --> 00:22:51,160 Speaker 1: the United States. He decides completely for himself. I throw 521 00:22:51,200 --> 00:22:54,160 Speaker 1: out a couple of ideas, sometimes he likes them, sometimes 522 00:22:54,160 --> 00:22:56,400 Speaker 1: he doesn't, and then I throw ideas to our other 523 00:22:56,480 --> 00:22:57,840 Speaker 1: European allies and friends. 524 00:22:57,840 --> 00:23:02,320 Speaker 5: That's what diplomacy is about. Last week, Oh, we spoke. 525 00:23:02,480 --> 00:23:05,520 Speaker 1: It was a collective phone call I think in Paris 526 00:23:05,560 --> 00:23:09,200 Speaker 1: on the fifth of December or Berly, I forget when 527 00:23:09,200 --> 00:23:09,520 Speaker 1: it was. 528 00:23:09,760 --> 00:23:12,200 Speaker 5: But the president yeah, yeah, But that was sort of 529 00:23:12,240 --> 00:23:13,119 Speaker 5: a collective. 530 00:23:12,760 --> 00:23:14,960 Speaker 2: And the last message with each other was in the 531 00:23:15,000 --> 00:23:15,840 Speaker 2: last time I. 532 00:23:15,760 --> 00:23:18,320 Speaker 5: Think it's been made public. That was the last time 533 00:23:18,320 --> 00:23:20,359 Speaker 5: you spoke. That's the last time message. Ye. 534 00:23:20,440 --> 00:23:21,920 Speaker 2: The reason I asked this is I'm trying to engage 535 00:23:21,960 --> 00:23:24,879 Speaker 2: whether there was a misunderstanding. It certainly seems like you 536 00:23:24,920 --> 00:23:26,320 Speaker 2: perceive there was a misunderstand. 537 00:23:26,440 --> 00:23:28,720 Speaker 5: My perception is that it was a misunderstanding. 538 00:23:28,880 --> 00:23:31,639 Speaker 1: So now we need to, you know, sit down, discuss, 539 00:23:32,040 --> 00:23:34,360 Speaker 1: get an off ramp and at the end of the day, 540 00:23:34,480 --> 00:23:39,440 Speaker 1: we need more Arctic security and with European and American presence. 541 00:23:39,960 --> 00:23:43,479 Speaker 2: This is clearly played out very publicly, and you've been 542 00:23:43,520 --> 00:23:45,320 Speaker 2: transparent about how frank things are. 543 00:23:45,240 --> 00:23:46,359 Speaker 3: Often behind the scenes. 544 00:23:46,359 --> 00:23:48,960 Speaker 2: But given how publicly this has played out, what kind 545 00:23:48,960 --> 00:23:50,440 Speaker 2: of a message you think this is sending to the 546 00:23:50,520 --> 00:23:52,920 Speaker 2: Russians at the moment, the way this is playing. 547 00:23:52,640 --> 00:23:58,560 Speaker 1: Out, well, any time there is a diplomatic issue, to 548 00:23:58,600 --> 00:24:04,280 Speaker 1: put it diplomatically between us the Transatlantic partners. I'm sure 549 00:24:04,320 --> 00:24:07,080 Speaker 1: that the Kremlin is enjoying it, I mean, and they 550 00:24:07,080 --> 00:24:10,360 Speaker 1: will use it as they best can, as we saw, 551 00:24:10,440 --> 00:24:13,440 Speaker 1: you know, I mean, for a Minister of Russia, love 552 00:24:13,520 --> 00:24:18,680 Speaker 1: Rov puts out a tweet and saying that for the US, 553 00:24:18,760 --> 00:24:21,960 Speaker 1: Greenland is what Crimea is for Russia. And obviously, you 554 00:24:22,000 --> 00:24:25,320 Speaker 1: know that's an insult and we all understand that. So 555 00:24:25,359 --> 00:24:27,480 Speaker 1: we always have to be careful with the Russians because 556 00:24:27,480 --> 00:24:31,560 Speaker 1: they will use any moment and any possibility for good 557 00:24:31,600 --> 00:24:34,040 Speaker 1: old information warfare and propaganda. 558 00:24:34,119 --> 00:24:38,560 Speaker 8: The unintended consequences just creates more of a positive attitude 559 00:24:38,600 --> 00:24:42,720 Speaker 8: towards Russia and China and divides the Transatlantic relationship. 560 00:24:42,840 --> 00:24:43,440 Speaker 7: How may a. 561 00:24:43,400 --> 00:24:45,359 Speaker 8: Concern is that, especially as we just saw Mark Karney 562 00:24:45,440 --> 00:24:46,680 Speaker 8: go over to Beijing and say. 563 00:24:46,600 --> 00:24:48,160 Speaker 7: They have this new strategic partnership. 564 00:24:48,720 --> 00:24:52,400 Speaker 1: Yeah, I mean I think you know, I'm very pro European, 565 00:24:52,560 --> 00:24:56,119 Speaker 1: I'm very pro American, and I'm a transatlanticist. So it 566 00:24:56,240 --> 00:24:59,560 Speaker 1: is in my interests and also based on my values 567 00:24:59,600 --> 00:25:02,760 Speaker 1: that we have a closer relationship with the United States. 568 00:25:02,840 --> 00:25:05,520 Speaker 1: That's why I'm also very pragmatic. I understand that the 569 00:25:05,600 --> 00:25:09,439 Speaker 1: United States is the number one superpower and what we 570 00:25:09,520 --> 00:25:13,000 Speaker 1: need to avoid, of course, is a certain disengagement. At 571 00:25:13,000 --> 00:25:15,680 Speaker 1: the same time, I have to say that Europe needs 572 00:25:15,760 --> 00:25:20,200 Speaker 1: to use this moment as well. You know, it needs 573 00:25:20,240 --> 00:25:23,159 Speaker 1: to beef up its defense, it needs to get stronger economically, 574 00:25:23,440 --> 00:25:26,320 Speaker 1: and I think, you know, my big ceasis is that 575 00:25:26,440 --> 00:25:28,639 Speaker 1: it's going to be the global South that decides the 576 00:25:28,680 --> 00:25:31,000 Speaker 1: new world order. So that means that we need to 577 00:25:31,040 --> 00:25:34,399 Speaker 1: engage more with the likes of India. I really like 578 00:25:34,560 --> 00:25:39,000 Speaker 1: the free trade agreement that the EU forged with Mercosur, 579 00:25:40,359 --> 00:25:42,920 Speaker 1: and I think people will start looking a little bit elsewhere, 580 00:25:42,960 --> 00:25:45,640 Speaker 1: but I really still want to contain and bring back 581 00:25:45,680 --> 00:25:47,600 Speaker 1: the US as best we can on. 582 00:25:47,680 --> 00:25:49,000 Speaker 7: Top of Russia. 583 00:25:49,040 --> 00:25:51,720 Speaker 8: On that conversation, I've been told those discussions are going 584 00:25:51,800 --> 00:25:54,280 Speaker 8: very well between the United States and Ukrainians, the United 585 00:25:54,280 --> 00:25:57,320 Speaker 8: States and the Russians. Krauel Dimitriev reportedly is here having 586 00:25:57,359 --> 00:26:01,359 Speaker 8: a conversation with Steve Wikoff today. How much longer do 587 00:26:01,440 --> 00:26:03,120 Speaker 8: you think it will take to get that deal done? 588 00:26:03,160 --> 00:26:04,560 Speaker 8: Do you think Putin even wants a deal? 589 00:26:04,720 --> 00:26:07,720 Speaker 1: Okay, So two observations on this. The first one is 590 00:26:07,760 --> 00:26:11,400 Speaker 1: that I'm afraid that the Greenland issue will take all 591 00:26:11,440 --> 00:26:14,800 Speaker 1: the oxygen here in Davos from the Ukraine dossier, which 592 00:26:16,000 --> 00:26:19,520 Speaker 1: I still think is fundamentally important acute. 593 00:26:19,920 --> 00:26:21,480 Speaker 5: But the second point is good news. 594 00:26:21,560 --> 00:26:24,800 Speaker 1: I think ever since Jared Kushnaier came into the game, 595 00:26:25,520 --> 00:26:28,760 Speaker 1: actually in Geneva right after the g twenty summit, and 596 00:26:28,840 --> 00:26:31,280 Speaker 1: we had another meeting in Berlin and then in Paris. 597 00:26:31,320 --> 00:26:35,120 Speaker 1: We have a lot of more practicality, so we basically 598 00:26:35,119 --> 00:26:38,520 Speaker 1: have depends on how you count six documents or two 599 00:26:39,160 --> 00:26:43,159 Speaker 1: or two plus five documents. The good news is that Ukraine, 600 00:26:43,240 --> 00:26:45,720 Speaker 1: the United States, and the Coalision of the Willing or 601 00:26:45,720 --> 00:26:48,399 Speaker 1: Europe we're on the same page. The big question is 602 00:26:48,560 --> 00:26:52,800 Speaker 1: are the Russians. I'm quite skeptical about that. I think 603 00:26:52,880 --> 00:26:56,120 Speaker 1: we might get a deal on security arrangements, we might 604 00:26:56,160 --> 00:26:59,240 Speaker 1: get a deal on territory. Certainly on the prosperity package. 605 00:26:59,359 --> 00:27:01,639 Speaker 1: I'm quite hope that will get something here this week. 606 00:27:02,240 --> 00:27:04,440 Speaker 1: But then the Russians will say and yet, well, if. 607 00:27:04,400 --> 00:27:07,080 Speaker 8: Russer continues to drag the United States along, do you 608 00:27:07,119 --> 00:27:09,560 Speaker 8: have a sense of what Trump's red line is with Putin. 609 00:27:10,000 --> 00:27:12,359 Speaker 1: I'm not going to start interpreting the red lines of 610 00:27:12,440 --> 00:27:14,320 Speaker 1: the President of the United States, but I have to 611 00:27:14,359 --> 00:27:16,080 Speaker 1: say that I really like what he did on Luke 612 00:27:16,080 --> 00:27:20,040 Speaker 1: Oil and Rosneft, on the sanctions, and to be honest, 613 00:27:20,119 --> 00:27:23,479 Speaker 1: I mean putin light to President Trump about the drones 614 00:27:23,520 --> 00:27:26,959 Speaker 1: hitting his dutcha they fired ballistic missiles. So this is 615 00:27:27,000 --> 00:27:30,119 Speaker 1: something that certainly will shorten the fuse of the President 616 00:27:30,119 --> 00:27:32,679 Speaker 1: of the United States. And it of course depends on 617 00:27:32,880 --> 00:27:35,000 Speaker 1: how much carrot do you put before you hit with 618 00:27:35,040 --> 00:27:35,600 Speaker 1: the big stick. 619 00:27:35,840 --> 00:27:37,480 Speaker 2: Just to find a question, we often ask our guests 620 00:27:37,480 --> 00:27:40,440 Speaker 2: for forecasts the World Economic Forum. I'm not going to 621 00:27:40,480 --> 00:27:42,200 Speaker 2: ask for a long term one. Where do you think 622 00:27:42,200 --> 00:27:43,920 Speaker 2: will be at the end of this week? 623 00:27:45,480 --> 00:27:48,679 Speaker 1: I think we will have defused the Greenland issue. I 624 00:27:48,680 --> 00:27:52,919 Speaker 1: think we will have made progress on Ukraine, and I 625 00:27:52,960 --> 00:27:54,959 Speaker 1: am one hundred percent sure that the world will not 626 00:27:55,040 --> 00:27:55,879 Speaker 1: be finished by that. 627 00:27:57,040 --> 00:28:00,359 Speaker 2: This is the bloomberg S Events podcast, bringing you the 628 00:28:00,359 --> 00:28:03,640 Speaker 2: best in markets, economics, an gient politics. You can watch 629 00:28:03,640 --> 00:28:06,440 Speaker 2: the show live on Bloomberg TV weekday mornings from six 630 00:28:06,480 --> 00:28:10,040 Speaker 2: am to nine am Eastern. Subscribe to the podcast on Apple, 631 00:28:10,320 --> 00:28:13,159 Speaker 2: Spotify or anywhere else you listen, and as always, on 632 00:28:13,160 --> 00:28:15,680 Speaker 2: the Bloomberg Terminal and the Bloomberg Business app.