1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,120 Speaker 1: noon and five pm Eastern on Alma Cocklay and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:24,560 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,239 --> 00:00:27,000 Speaker 2: Thanks for being with us on the Wednesday edition of 7 00:00:27,040 --> 00:00:29,200 Speaker 2: Balance of Power on Bloomberg TV and Radio. 8 00:00:29,280 --> 00:00:31,960 Speaker 3: Streaming live right now on YouTube. 9 00:00:32,000 --> 00:00:34,239 Speaker 2: We have a lot to talk about following the President's 10 00:00:34,240 --> 00:00:37,640 Speaker 2: address in Davos this morning, is ruling out of military 11 00:00:38,159 --> 00:00:43,320 Speaker 2: activity in Greenland, and of course the conversation about affordability 12 00:00:43,360 --> 00:00:45,720 Speaker 2: that he tried to inject into that speech, his claims 13 00:00:45,800 --> 00:00:49,360 Speaker 2: of economic growth all will be tested when we spend 14 00:00:49,360 --> 00:00:51,599 Speaker 2: some time with Lale Brainerd. But we've also got our 15 00:00:51,640 --> 00:00:54,240 Speaker 2: eyes on the Supreme Court today, and there is some 16 00:00:54,360 --> 00:00:57,240 Speaker 2: major crossover here as the Court weighs a very simple 17 00:00:57,320 --> 00:01:01,280 Speaker 2: question whether President Trump can fire Fed Governor Lisa Cook 18 00:01:01,320 --> 00:01:06,000 Speaker 2: over mortgage fraud allegations that, of course she has consistently denied. 19 00:01:06,160 --> 00:01:08,440 Speaker 2: We heard the President's side of this case, speaking for 20 00:01:08,480 --> 00:01:12,120 Speaker 2: the administration, Solicitor General John Sower in arguments, just a 21 00:01:12,120 --> 00:01:12,920 Speaker 2: couple of hours ago. 22 00:01:13,000 --> 00:01:16,080 Speaker 4: Listen, we would contend there's judicial review kind of at 23 00:01:16,120 --> 00:01:19,880 Speaker 4: the outer perimeters of cause, whether that's something goes to conduct, fitness, ability, 24 00:01:19,959 --> 00:01:22,800 Speaker 4: or competence at all. But once you're within that, and 25 00:01:22,880 --> 00:01:25,800 Speaker 4: we clearly are here, then there would be deference to 26 00:01:25,840 --> 00:01:29,640 Speaker 4: the president pustatory language cause without further qualifications itself, and 27 00:01:29,720 --> 00:01:33,280 Speaker 4: it's plain language, a broad conferral of authority on the 28 00:01:33,280 --> 00:01:34,120 Speaker 4: President himself. 29 00:01:35,480 --> 00:01:40,400 Speaker 2: Remembering that the Federal Reserve has been qualified as a 30 00:01:40,520 --> 00:01:43,759 Speaker 2: different entity than every other federal agency in the Court's 31 00:01:43,800 --> 00:01:47,680 Speaker 2: declaration last May, describing it as a uniquely structured, quasi 32 00:01:47,800 --> 00:01:51,360 Speaker 2: private entity that follows in the distinct historical tradition of 33 00:01:51,400 --> 00:01:54,200 Speaker 2: the First and Second Banks of the United States. As 34 00:01:54,200 --> 00:01:56,559 Speaker 2: we try to get closer to the center of this case, 35 00:01:57,080 --> 00:01:59,880 Speaker 2: we bring in Tyler Kendall. Bloomberg, Washington correspondent has spent 36 00:02:00,080 --> 00:02:03,720 Speaker 2: the day at the courthouse listening to arguments. Tyler, the 37 00:02:03,760 --> 00:02:07,040 Speaker 2: headline that we're running here on the terminal is that 38 00:02:07,200 --> 00:02:09,720 Speaker 2: justices are skeptical of the White House's case. 39 00:02:09,720 --> 00:02:10,560 Speaker 3: What are you hearing. 40 00:02:12,600 --> 00:02:14,960 Speaker 5: Right exactly, Joe, And that was the indication that we 41 00:02:15,040 --> 00:02:18,080 Speaker 5: got as we listened to the justices questioning not just 42 00:02:18,120 --> 00:02:21,440 Speaker 5: of the Solicitor General, but also of Lisa Cook's lawyer 43 00:02:21,520 --> 00:02:25,280 Speaker 5: as well, signaling this weariness over the Trump administration's efforts 44 00:02:25,280 --> 00:02:29,079 Speaker 5: to out fed Governor Lisa Cook and citing, interestingly enough, 45 00:02:29,080 --> 00:02:32,160 Speaker 5: the potential ripple impacts when it comes to the economy, 46 00:02:32,320 --> 00:02:35,600 Speaker 5: the markets, and of course the central banks independence. Now, 47 00:02:35,639 --> 00:02:37,560 Speaker 5: if we take a step back here, it's important to 48 00:02:37,560 --> 00:02:39,400 Speaker 5: note that the case in front of the Supreme Court 49 00:02:39,480 --> 00:02:42,000 Speaker 5: today has to do with the Trump administration's request for 50 00:02:42,080 --> 00:02:45,080 Speaker 5: what's known as a stay of a preliminary injunction that 51 00:02:45,160 --> 00:02:48,040 Speaker 5: has allowed Lisa Cook to retain her position while the 52 00:02:48,040 --> 00:02:51,680 Speaker 5: broader issue of her firing plays out in court. So essentially, 53 00:02:51,760 --> 00:02:54,960 Speaker 5: they're asking the justices if President Trump can fire Lisa 54 00:02:55,000 --> 00:02:58,399 Speaker 5: Cook for now. However, it does have implications for down 55 00:02:58,480 --> 00:03:01,440 Speaker 5: the road, because the justices we're really asking questions that 56 00:03:01,520 --> 00:03:05,240 Speaker 5: get to the heart of Lisa Cook's firing, and those 57 00:03:06,160 --> 00:03:08,840 Speaker 5: themes that we saw the justices pull on really have 58 00:03:08,919 --> 00:03:11,480 Speaker 5: to do with three different buckets. One is does President 59 00:03:11,520 --> 00:03:14,720 Speaker 5: Trump have sufficient cause to fire Cook? The second is 60 00:03:14,760 --> 00:03:18,120 Speaker 5: what she afforded due process? And the third are these 61 00:03:18,520 --> 00:03:21,320 Speaker 5: potential impacts down the road when it comes to the 62 00:03:21,320 --> 00:03:24,880 Speaker 5: economy and the central banks independence. And it was interesting 63 00:03:24,919 --> 00:03:27,560 Speaker 5: because we did hear from one of those justices appointed 64 00:03:27,600 --> 00:03:30,600 Speaker 5: by President Trump or Brent Kavanaugh, who in particular honed 65 00:03:30,639 --> 00:03:33,960 Speaker 5: in on that last bucket about what those impacts could be, 66 00:03:34,040 --> 00:03:36,560 Speaker 5: saying that he is thinking about the quote real world 67 00:03:36,920 --> 00:03:40,120 Speaker 5: downstream effects and any precedent that this could set not 68 00:03:40,200 --> 00:03:42,920 Speaker 5: just for the future of the Trump administration, but any 69 00:03:43,240 --> 00:03:46,320 Speaker 5: administration down the line. So Joe, well, it seemed that 70 00:03:46,400 --> 00:03:49,320 Speaker 5: we were getting this sort of consensus for how the 71 00:03:49,520 --> 00:03:53,240 Speaker 5: justices were feeling. There was less of a consensus about 72 00:03:53,240 --> 00:03:55,840 Speaker 5: what they're going to do next. We could see them 73 00:03:55,880 --> 00:04:00,440 Speaker 5: issue perhaps a narrow ruling citing concerns that we cook 74 00:04:00,480 --> 00:04:03,560 Speaker 5: didn't have enough time to address these allegations of mortgage 75 00:04:03,560 --> 00:04:04,280 Speaker 5: fraud against her. 76 00:04:04,360 --> 00:04:06,080 Speaker 3: We could see a broader ruling where. 77 00:04:05,920 --> 00:04:09,680 Speaker 5: They define what cause means, what that legal standard actually 78 00:04:09,680 --> 00:04:12,440 Speaker 5: should be defined as since it's not explicitly known in 79 00:04:12,480 --> 00:04:15,040 Speaker 5: the law, or ultimately, Joe, they could just kick this 80 00:04:15,200 --> 00:04:17,719 Speaker 5: back to the lower court and not issue an opinion 81 00:04:17,800 --> 00:04:20,039 Speaker 5: at all. So there's a lot of different threads that 82 00:04:20,040 --> 00:04:22,239 Speaker 5: we're watching here, and it's something that's going to develop 83 00:04:22,520 --> 00:04:23,240 Speaker 5: in the weeks and. 84 00:04:23,120 --> 00:04:26,200 Speaker 2: Months to come all right, Tyler, before you blow away, 85 00:04:26,279 --> 00:04:28,480 Speaker 2: just very quickly. Did you get eyes on Jay Powell? 86 00:04:28,520 --> 00:04:30,799 Speaker 2: Did anybody see him coming out of the Supreme Court today? 87 00:04:32,880 --> 00:04:35,440 Speaker 5: So we can confirm one of our colleagues inside the 88 00:04:35,520 --> 00:04:38,080 Speaker 5: room and did lay eyes on Jerome Powell as well 89 00:04:38,080 --> 00:04:41,080 Speaker 5: as Ben Bernaki was also in the room alongside FED 90 00:04:41,120 --> 00:04:44,600 Speaker 5: Governor Lisa Cook. However, it's our understanding that he did 91 00:04:44,640 --> 00:04:47,599 Speaker 5: not go out of the main public entrance here. There's 92 00:04:47,600 --> 00:04:50,719 Speaker 5: a few different entrances at the Supreme Court that Jerome 93 00:04:50,760 --> 00:04:51,680 Speaker 5: Powell could have used. 94 00:04:52,480 --> 00:04:53,560 Speaker 3: Got it, Tyler, Thank you? 95 00:04:53,640 --> 00:04:56,440 Speaker 2: Get warm, Tyler Kendall in front of the US Supreme 96 00:04:56,480 --> 00:04:59,279 Speaker 2: Court today with arguments being had. We discussed this a 97 00:04:59,320 --> 00:05:02,200 Speaker 2: bit with Kevin Hassett earlier, my colleague Ann Marie hor Dern. 98 00:05:02,600 --> 00:05:04,760 Speaker 2: Bringing us back to our other big story today the 99 00:05:04,800 --> 00:05:08,599 Speaker 2: President the administration. On the ground in Davos, we spoke 100 00:05:08,640 --> 00:05:11,560 Speaker 2: with Kevin Hassett, director of the National Economic Council, said 101 00:05:11,600 --> 00:05:14,320 Speaker 2: to be on the shortlist to replace j Powell as 102 00:05:14,360 --> 00:05:18,040 Speaker 2: FED share specific to the concept of FED independence. 103 00:05:18,120 --> 00:05:18,960 Speaker 3: Listen to what he said. 104 00:05:19,520 --> 00:05:21,560 Speaker 6: I was a young economist at the FED a long 105 00:05:21,600 --> 00:05:25,360 Speaker 6: time ago, and I worked with Alan Greenspan and he 106 00:05:25,400 --> 00:05:28,159 Speaker 6: was really really careful about keeping the FED out of 107 00:05:28,240 --> 00:05:32,480 Speaker 6: politics and keeping the FED focused on monetary policy and 108 00:05:32,560 --> 00:05:36,640 Speaker 6: interest rates and the dual mandate. And even to one point, 109 00:05:36,680 --> 00:05:39,800 Speaker 6: I wrote a paper at academic paper that he refused 110 00:05:39,800 --> 00:05:42,239 Speaker 6: to publish for the FED for over a year because 111 00:05:42,240 --> 00:05:44,839 Speaker 6: it was about carbon taxes at BTU taxes, and he 112 00:05:44,880 --> 00:05:47,520 Speaker 6: didn't want the FED to get involved in that fight 113 00:05:47,560 --> 00:05:49,440 Speaker 6: with Al Gore and Bill Clinton while it was still 114 00:05:49,480 --> 00:05:49,840 Speaker 6: going on. 115 00:05:50,200 --> 00:05:50,640 Speaker 3: And so I. 116 00:05:50,560 --> 00:05:55,640 Speaker 6: Think I really regrettably the bank presidents and the federals 117 00:05:55,680 --> 00:05:58,200 Speaker 6: or members seem to want to have an opinion about 118 00:05:58,279 --> 00:06:01,919 Speaker 6: everything every day, not just monetary. So for example, you 119 00:06:01,960 --> 00:06:04,280 Speaker 6: could go in and right after President Trump took office, 120 00:06:04,400 --> 00:06:07,680 Speaker 6: Austin Goolsby gave a speech where he said, well, econabas, 121 00:06:07,720 --> 00:06:10,000 Speaker 6: I'll agree that if there's a tariff that it doesn't 122 00:06:10,000 --> 00:06:12,359 Speaker 6: have an effect on inflation, it just affects the price level. 123 00:06:12,960 --> 00:06:14,560 Speaker 6: But he said, here's why you shouldn't think. 124 00:06:14,440 --> 00:06:15,120 Speaker 3: About it that way. 125 00:06:15,480 --> 00:06:18,400 Speaker 6: And I think that that's actually going into a politically 126 00:06:18,520 --> 00:06:20,440 Speaker 6: dangerous place for the FED. I mean, for sure, you 127 00:06:20,440 --> 00:06:22,840 Speaker 6: want to talk about inflation, but precisely then, right when 128 00:06:22,880 --> 00:06:25,599 Speaker 6: President Trump's coming in and setting his tariff agenda. To 129 00:06:25,600 --> 00:06:28,360 Speaker 6: have the FED criticize him so vehemently, I think is 130 00:06:28,400 --> 00:06:30,640 Speaker 6: inconsistent with the desire for independence. 131 00:06:30,720 --> 00:06:32,440 Speaker 3: Do you think it was appropriate that Jay Powell went 132 00:06:32,480 --> 00:06:33,880 Speaker 3: to the Supreme Court today? I do not. 133 00:06:35,520 --> 00:06:37,960 Speaker 2: Interesting he did not think it was appropriate. As we 134 00:06:38,000 --> 00:06:40,400 Speaker 2: heard j Powell was in fact there. And that's Kevin 135 00:06:40,440 --> 00:06:45,200 Speaker 2: Hassett speaking with Anne Marie Hora Dern after sundown in Davos. 136 00:06:45,360 --> 00:06:48,320 Speaker 2: The President still making his way through the World Economic Forum, 137 00:06:48,360 --> 00:06:50,680 Speaker 2: and we might catch him at a couple of different events. 138 00:06:50,720 --> 00:06:53,120 Speaker 2: He's got some sideline meetings with other world leaders following 139 00:06:53,160 --> 00:06:57,120 Speaker 2: his conversation with business leaders that just concluded. So we'll 140 00:06:57,160 --> 00:06:58,880 Speaker 2: let you know if he starts to speak and make 141 00:06:58,960 --> 00:07:03,640 Speaker 2: some news sees on this moment, though, following the arguments 142 00:07:03,680 --> 00:07:06,400 Speaker 2: before the Supreme Court, knowing that we have a lot 143 00:07:06,440 --> 00:07:09,000 Speaker 2: to talk about with our economy. In a special conversation 144 00:07:09,080 --> 00:07:11,960 Speaker 2: with Lalel Brainard, if there was one voice we wanted 145 00:07:11,960 --> 00:07:15,480 Speaker 2: to hear respond to the President and this entire conversation 146 00:07:15,520 --> 00:07:19,200 Speaker 2: about Lisa Cook's possible firing, we turned to the former 147 00:07:19,240 --> 00:07:22,040 Speaker 2: director of the National Economic Council in the Biden administration, 148 00:07:22,120 --> 00:07:25,280 Speaker 2: former vice chair of the Federal Reserve Distinguished Fellow now 149 00:07:25,280 --> 00:07:28,520 Speaker 2: at the Georgetown Sorrow Center for Financial Markets and Policy. 150 00:07:28,600 --> 00:07:30,680 Speaker 2: Leel Brainerd, welcome back to Bloomberg. It's great to see you. 151 00:07:31,200 --> 00:07:32,960 Speaker 2: Can I just start with what happened at the Supreme 152 00:07:33,000 --> 00:07:35,160 Speaker 2: Court today? Did you think it was appropriate for J. 153 00:07:35,280 --> 00:07:36,360 Speaker 2: Powell to be in attendance? 154 00:07:36,880 --> 00:07:40,640 Speaker 7: Look, I don't know whether it's appropriate not appropriate, but 155 00:07:40,680 --> 00:07:43,480 Speaker 7: I do know Treasury Secretary Besant showed up when there 156 00:07:43,520 --> 00:07:48,440 Speaker 7: were debates over terrors. And could anything be more important 157 00:07:49,000 --> 00:07:53,240 Speaker 7: to the Federal Reserve chair right now than how the 158 00:07:53,280 --> 00:07:59,600 Speaker 7: Supreme Court delineates the president's authorities on four cause firing 159 00:07:59,800 --> 00:08:00,720 Speaker 7: of board members. 160 00:08:00,800 --> 00:08:03,400 Speaker 2: Yeah, well, look, this is obviously something that will not 161 00:08:03,440 --> 00:08:05,280 Speaker 2: be resolved today, and we understand it could be months 162 00:08:05,320 --> 00:08:08,840 Speaker 2: before we know. Lisa Cook did issue a statement following 163 00:08:09,080 --> 00:08:12,240 Speaker 2: the arguments this morning and talked about the insulation that 164 00:08:12,320 --> 00:08:16,240 Speaker 2: Congress has put together to insulate the FED from political threats, 165 00:08:16,600 --> 00:08:19,680 Speaker 2: holding it accountable for delivering on the mandate. For as 166 00:08:19,680 --> 00:08:21,720 Speaker 2: long as I serve at the Federal Reserve, she writes, 167 00:08:21,760 --> 00:08:24,400 Speaker 2: I will uphold the principle of political independence in service 168 00:08:24,440 --> 00:08:26,640 Speaker 2: to the American people. We could be in a world 169 00:08:26,640 --> 00:08:28,760 Speaker 2: where she has another three or four FED meetings before 170 00:08:28,800 --> 00:08:29,720 Speaker 2: this case is decided. 171 00:08:29,720 --> 00:08:31,040 Speaker 3: Should she be in those meetings? 172 00:08:31,360 --> 00:08:31,520 Speaker 8: Well? 173 00:08:31,520 --> 00:08:38,199 Speaker 7: Look, I think what Justice Cavanaugh got to in his questioning, 174 00:08:38,240 --> 00:08:44,319 Speaker 7: which is, if a governor can be fired without any hearing, 175 00:08:44,760 --> 00:08:50,959 Speaker 7: without any due process, without any real establishment of for cause, 176 00:08:51,760 --> 00:08:56,360 Speaker 7: it really fundamentally means that the American economy can be 177 00:08:56,480 --> 00:08:59,640 Speaker 7: in for higher inflation less credibility on the part of 178 00:08:59,679 --> 00:09:02,840 Speaker 7: this bank, because that is what central bank independence is 179 00:09:02,880 --> 00:09:07,079 Speaker 7: so important for. So I do think this issue about 180 00:09:07,360 --> 00:09:14,360 Speaker 7: making sure that the president's ability to fire for cause 181 00:09:14,559 --> 00:09:18,840 Speaker 7: is carefully delineated, because otherwise we will lose that fundamental 182 00:09:18,880 --> 00:09:22,720 Speaker 7: bedrock of the American economic dynamism. 183 00:09:22,800 --> 00:09:24,360 Speaker 3: I want to get your take on the state of 184 00:09:24,640 --> 00:09:25,319 Speaker 3: the economy. 185 00:09:25,360 --> 00:09:27,240 Speaker 2: But as long as we're talking about this, you have 186 00:09:27,280 --> 00:09:29,400 Speaker 2: the case involving Lisa Cook, and you now have a 187 00:09:29,440 --> 00:09:31,880 Speaker 2: criminal investigation into Chairman J. 188 00:09:32,040 --> 00:09:32,439 Speaker 3: Powell. 189 00:09:32,520 --> 00:09:35,240 Speaker 2: What is it that the President is trying to do 190 00:09:36,040 --> 00:09:38,320 Speaker 2: in reshaping the FED if nothing short of that? 191 00:09:38,440 --> 00:09:42,160 Speaker 7: Yeah, well, I think really the criminal investigation just seems 192 00:09:42,200 --> 00:09:46,600 Speaker 7: like a spectacular misstep on his part. If anything, it 193 00:09:46,679 --> 00:09:51,520 Speaker 7: has really raised concerns. We've heard from financial market leaders, 194 00:09:51,760 --> 00:09:54,960 Speaker 7: we have now heard from prominent Senate Republicans who sit 195 00:09:55,000 --> 00:09:59,880 Speaker 7: on the Senate Banking Committee. The move to criminally invest 196 00:10:00,040 --> 00:10:04,760 Speaker 7: to gate the chair for some renovations has really, I 197 00:10:04,800 --> 00:10:08,199 Speaker 7: think set off alarm bells, and that could lead to 198 00:10:08,400 --> 00:10:12,040 Speaker 7: the chair staying in his seat as a governor for 199 00:10:12,120 --> 00:10:13,559 Speaker 7: longer than he might have done otherwise. 200 00:10:13,920 --> 00:10:14,839 Speaker 3: Isn't that something we had? 201 00:10:14,840 --> 00:10:17,240 Speaker 2: Tom Tillis on the program last week under no on 202 00:10:17,320 --> 00:10:20,640 Speaker 2: certain terms, says he will not consider a replacement until 203 00:10:21,080 --> 00:10:23,960 Speaker 2: this is resolved. As we spend time with Lale Brainerd, 204 00:10:23,960 --> 00:10:25,640 Speaker 2: I want to go through some of the notes that 205 00:10:25,679 --> 00:10:31,080 Speaker 2: I took during the President's address today before this crowd 206 00:10:31,120 --> 00:10:33,599 Speaker 2: in Davos that I think we can agree knows a 207 00:10:33,640 --> 00:10:35,599 Speaker 2: lot about the data. They probably have a couple of 208 00:10:35,600 --> 00:10:39,040 Speaker 2: Bloomberg terminals in that room. These are business leaders, These 209 00:10:39,120 --> 00:10:42,360 Speaker 2: are world leaders who are listening to the president. 210 00:10:42,520 --> 00:10:44,960 Speaker 3: Inflation has been defeated. Is that true? 211 00:10:45,200 --> 00:10:49,000 Speaker 7: Well, I think we know that inflation is still hovering 212 00:10:49,040 --> 00:10:52,559 Speaker 7: close to three percent. We'll get the PCEE inflation later, 213 00:10:53,280 --> 00:10:56,520 Speaker 7: but inflation has not been defeated. Inflation close to three 214 00:10:56,559 --> 00:11:00,520 Speaker 7: percent is not close to the Fed starge get. There's 215 00:11:00,559 --> 00:11:01,720 Speaker 7: more work to be done there. 216 00:11:01,840 --> 00:11:05,400 Speaker 2: The bold claim virtually no inflation he says, an extraordinarily 217 00:11:05,520 --> 00:11:08,480 Speaker 2: high economic growth over the past three months. He says 218 00:11:08,520 --> 00:11:12,160 Speaker 2: core inflation has been one point six percent. He's projecting 219 00:11:12,240 --> 00:11:14,880 Speaker 2: economic growth in the fourth quarter of almost five and 220 00:11:14,880 --> 00:11:15,600 Speaker 2: a half percent. 221 00:11:15,880 --> 00:11:18,360 Speaker 3: Will that happen seems very implausible. 222 00:11:18,440 --> 00:11:22,280 Speaker 7: Don't forget we had the shutdown in the fourth quarter, 223 00:11:22,320 --> 00:11:25,079 Speaker 7: and that's likely to to press growth in the fourth quarter. 224 00:11:25,280 --> 00:11:26,920 Speaker 7: Of course, we'll see a bounce back from that in 225 00:11:26,960 --> 00:11:30,200 Speaker 7: the first quarter. He's right that we've had several quarters 226 00:11:30,200 --> 00:11:34,280 Speaker 7: of very strong growth that has been entirely propelled by 227 00:11:34,320 --> 00:11:39,280 Speaker 7: the private sector AI boom. But if you look at jobs, 228 00:11:39,360 --> 00:11:42,360 Speaker 7: it's been entirely jobless growth. So the rate of job 229 00:11:42,400 --> 00:11:45,600 Speaker 7: creation has really plummeted during this time. And of course, 230 00:11:45,640 --> 00:11:49,000 Speaker 7: with inflation still high, that's why you see consumer sentiment 231 00:11:49,240 --> 00:11:50,280 Speaker 7: that's still very glum. 232 00:11:50,880 --> 00:11:53,640 Speaker 2: President said, people are doing very well, they're very happy 233 00:11:53,640 --> 00:11:56,160 Speaker 2: with me. We've lifted more than one point two million 234 00:11:56,240 --> 00:11:58,320 Speaker 2: people off of food stamps. 235 00:11:59,040 --> 00:12:00,560 Speaker 3: How do you interpret the those lines? 236 00:12:01,080 --> 00:12:04,640 Speaker 7: So look, I think the polling, similar to the consumer 237 00:12:04,760 --> 00:12:08,040 Speaker 7: sentiment data, suggests that actually there has been a precipitous 238 00:12:08,080 --> 00:12:11,640 Speaker 7: decline in sentiment about the economy. And what we've seen 239 00:12:11,720 --> 00:12:15,439 Speaker 7: in some recent elections. Is that a lot of Americans 240 00:12:15,840 --> 00:12:18,560 Speaker 7: want the President to deliver on his promise to bring 241 00:12:18,600 --> 00:12:22,000 Speaker 7: down prices on day one. Instead, prices have gone up 242 00:12:22,000 --> 00:12:26,920 Speaker 7: a lot, and people are very concerned about affordability. 243 00:12:27,559 --> 00:12:29,240 Speaker 2: Well, and you wonder as well, the one point two 244 00:12:29,280 --> 00:12:31,320 Speaker 2: million people off of food stamps. Is that because of 245 00:12:31,360 --> 00:12:34,040 Speaker 2: the changes in eligibility or is it because people are 246 00:12:34,040 --> 00:12:37,079 Speaker 2: lifting themselves up with new jobs or higher wages. 247 00:12:37,320 --> 00:12:39,959 Speaker 7: Well, we certainly know that the Big Beautiful Bill had 248 00:12:40,040 --> 00:12:45,480 Speaker 7: restrictions on snap food benefits that have been calamitous for 249 00:12:45,679 --> 00:12:49,680 Speaker 7: many American families. And of course the Medicaid cuts eleven 250 00:12:49,720 --> 00:12:53,840 Speaker 7: to thirteen million Americans that will potentially lose access that 251 00:12:53,920 --> 00:12:56,600 Speaker 7: won't kick in until after the mid terms. But I 252 00:12:56,640 --> 00:12:59,920 Speaker 7: think a lot of families are also already seeing the 253 00:13:00,160 --> 00:13:05,199 Speaker 7: premium tax credits expiration means that they are paying double 254 00:13:05,240 --> 00:13:09,720 Speaker 7: the premiums on their health insurance for another up to 255 00:13:09,760 --> 00:13:11,520 Speaker 7: twenty million Americans. 256 00:13:11,160 --> 00:13:12,679 Speaker 3: This may not be changing anytime soon. 257 00:13:12,720 --> 00:13:15,120 Speaker 2: As we watch the bead here, try to follow the 258 00:13:15,120 --> 00:13:17,280 Speaker 2: beat on Capitol Hill, I want to ask you about housing. 259 00:13:17,840 --> 00:13:18,400 Speaker 3: Really interesting. 260 00:13:18,400 --> 00:13:21,520 Speaker 2: The President wants to ban institutional buyers from the single 261 00:13:21,520 --> 00:13:25,560 Speaker 2: family home market. That's one initiative that's been fixed. I 262 00:13:25,600 --> 00:13:28,040 Speaker 2: suspect that'll be part of the State of the Union address. 263 00:13:28,400 --> 00:13:33,680 Speaker 2: But he's been recently talking about his concerns overrating people's 264 00:13:33,720 --> 00:13:36,400 Speaker 2: nest eggs in their homes, that making changes to the 265 00:13:36,440 --> 00:13:38,960 Speaker 2: market could lower their home values. Listen to the President 266 00:13:39,040 --> 00:13:40,800 Speaker 2: talking about this earlier in Davos. 267 00:13:41,679 --> 00:13:43,840 Speaker 9: Every time you make it more and more and more 268 00:13:43,840 --> 00:13:46,560 Speaker 9: affordable for somebody to buy house cheaply, you are actually 269 00:13:46,640 --> 00:13:49,760 Speaker 9: hurting the value of those houses. Now, if I want 270 00:13:49,800 --> 00:13:51,880 Speaker 9: to really crush the housing market, I could do that 271 00:13:52,080 --> 00:13:55,280 Speaker 9: so fast to people could buy houses, but you would 272 00:13:55,360 --> 00:13:58,840 Speaker 9: destroy a lot of people that already have houses. 273 00:14:00,280 --> 00:14:02,320 Speaker 2: I'm really curious your thoughts on this Number one. I 274 00:14:02,320 --> 00:14:05,680 Speaker 2: don't know how fast he could start building tens of 275 00:14:05,679 --> 00:14:07,400 Speaker 2: millions of homes that I guess would be needed to 276 00:14:07,400 --> 00:14:08,760 Speaker 2: actually lower home values. 277 00:14:09,240 --> 00:14:11,720 Speaker 3: But how destructive would this be to people's savings. 278 00:14:12,000 --> 00:14:14,640 Speaker 7: Look, I think it was interesting, as you say to 279 00:14:14,760 --> 00:14:18,160 Speaker 7: hear him, just reflect aloud. It seems like he's got 280 00:14:18,200 --> 00:14:22,440 Speaker 7: some real ambivalence. Most Americans don't have a lot of ambivalence. 281 00:14:22,480 --> 00:14:26,400 Speaker 7: They really do. They're hurting rent is too high. They 282 00:14:26,440 --> 00:14:30,720 Speaker 7: want to own homes, young families, first time homeowners who 283 00:14:30,800 --> 00:14:34,240 Speaker 7: are aspirational. They've been locked out of the market for 284 00:14:34,280 --> 00:14:37,520 Speaker 7: too long, and we know that the answer is more 285 00:14:37,600 --> 00:14:40,880 Speaker 7: housing to be built. We are short three to four 286 00:14:40,920 --> 00:14:45,880 Speaker 7: million units of housing at a minimum, and so in 287 00:14:46,000 --> 00:14:49,600 Speaker 7: order to do that, a very forceful and long term 288 00:14:49,640 --> 00:14:51,800 Speaker 7: agenda needs to be put in place. The Senate actually 289 00:14:51,840 --> 00:14:56,200 Speaker 7: had some good legislation the Road to Affordability on housing. 290 00:14:56,600 --> 00:14:58,720 Speaker 7: I think there's a lot of good ideas out there, 291 00:14:58,720 --> 00:15:01,840 Speaker 7: but it really has to go beyond a few band 292 00:15:01,880 --> 00:15:05,120 Speaker 7: aids and takes seriously the need for more supply. 293 00:15:05,640 --> 00:15:08,120 Speaker 2: It would take a lot to lower housing values. I 294 00:15:08,160 --> 00:15:11,280 Speaker 2: suspect that would dent people's retirements, although we've been through 295 00:15:12,160 --> 00:15:15,080 Speaker 2: a great recession before and we've seen the housing market 296 00:15:15,120 --> 00:15:18,720 Speaker 2: go through some pretty wild swings. Lastly, we have a 297 00:15:18,760 --> 00:15:21,400 Speaker 2: minute left interest rates. The President says in the old days, 298 00:15:21,400 --> 00:15:24,000 Speaker 2: he had big numbers, they lowered rates. He doesn't understand 299 00:15:24,000 --> 00:15:27,320 Speaker 2: the dynamic here with the Fed. We don't have time 300 00:15:27,360 --> 00:15:28,800 Speaker 2: to get into all of that. But do you see 301 00:15:28,800 --> 00:15:32,680 Speaker 2: a federal reserve that's on the precipice of cutting rates again. 302 00:15:32,840 --> 00:15:34,800 Speaker 7: So I think it'll all depend on the data. I 303 00:15:34,840 --> 00:15:37,720 Speaker 7: actually think this Federal Reserve is focused on the data. 304 00:15:37,840 --> 00:15:42,240 Speaker 7: We have seen that the unemployment rate has held steady. 305 00:15:42,280 --> 00:15:46,400 Speaker 7: Now they were extremely concerned about a weakening labor market 306 00:15:47,000 --> 00:15:50,360 Speaker 7: for a month or two. We've seen some reassuring data there, 307 00:15:50,680 --> 00:15:53,480 Speaker 7: which means they can take a little longer and see 308 00:15:53,480 --> 00:15:57,080 Speaker 7: how those inflation numbers really play out. But if the 309 00:15:57,120 --> 00:16:00,840 Speaker 7: present continues to threaten the Fed's independence, streets will actually 310 00:16:00,880 --> 00:16:01,200 Speaker 7: go up. 311 00:16:01,240 --> 00:16:02,800 Speaker 2: Well, we've seen that a bit on the long end, 312 00:16:02,840 --> 00:16:04,840 Speaker 2: haven't we. It's great to bring you back with us. 313 00:16:04,880 --> 00:16:06,640 Speaker 2: Lalel Brainard. I didn't even ask you who should be 314 00:16:06,680 --> 00:16:09,120 Speaker 2: the next FED chair. You wouldn't tell me, though, would you. 315 00:16:09,240 --> 00:16:11,760 Speaker 2: I would know she's been in the building, vice chair 316 00:16:12,520 --> 00:16:14,840 Speaker 2: at the Federal Reserve, and of course former director of 317 00:16:14,880 --> 00:16:17,520 Speaker 2: the National Economic Council. Lale Brainerd with us in studio 318 00:16:17,600 --> 00:16:19,800 Speaker 2: here at Bloomberg. We thank you for the insights, so 319 00:16:19,840 --> 00:16:22,560 Speaker 2: we'll assemble our panel next stay with us on Balance 320 00:16:22,600 --> 00:16:24,760 Speaker 2: of Power. We'll have much more coming up after this. 321 00:16:29,040 --> 00:16:32,520 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 322 00:16:32,600 --> 00:16:36,040 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 323 00:16:36,120 --> 00:16:39,120 Speaker 1: Cocklay and Android Auto with the Bloomberg Business app. You 324 00:16:39,160 --> 00:16:42,640 Speaker 1: can also listen live on Amazon Alexa from our flagship 325 00:16:42,720 --> 00:16:44,920 Speaker 1: New York station, Just say Alexa. 326 00:16:45,080 --> 00:16:49,520 Speaker 2: Play Bloomberg eleven thirty. I'm Joe Matthew in Washington. We 327 00:16:49,560 --> 00:16:51,680 Speaker 2: want to bring you back to Davos. As I just mentioned, 328 00:16:51,840 --> 00:16:54,400 Speaker 2: Mark Rout to the Secretary General of NATO sitting down 329 00:16:54,400 --> 00:16:58,360 Speaker 2: for a bilateral meeting with President Trump, remembering that President 330 00:16:58,400 --> 00:17:01,120 Speaker 2: Trump saying earlier today he did not believe NATO nations 331 00:17:01,520 --> 00:17:04,840 Speaker 2: would back the United States if attacked. Let's listen live 332 00:17:04,880 --> 00:17:05,879 Speaker 2: now on Bloomberg. 333 00:17:06,600 --> 00:17:09,480 Speaker 10: It's been amazing, as you know we're saying, and tomorrow 334 00:17:09,520 --> 00:17:13,000 Speaker 10: we're doing something else having to do with the boarder piece. 335 00:17:13,119 --> 00:17:16,720 Speaker 10: We're getting tremendous acceptance of that. 336 00:17:16,760 --> 00:17:18,440 Speaker 8: It's going to be great. So we'll see how that 337 00:17:18,520 --> 00:17:21,360 Speaker 8: all works out. But we're doing that tomorrow. So thank 338 00:17:21,359 --> 00:17:23,000 Speaker 8: you very much, Media, thank you very much. 339 00:17:23,040 --> 00:17:26,239 Speaker 11: And Mark Well, I just wanted to say again, as 340 00:17:26,280 --> 00:17:27,760 Speaker 11: I did this morning when I was in a panel, 341 00:17:27,800 --> 00:17:30,760 Speaker 11: I want to thank you again for what you did since. 342 00:17:30,560 --> 00:17:35,280 Speaker 12: Coming in in January two forty seven, basically get in 343 00:17:35,320 --> 00:17:37,639 Speaker 12: the Europeans and Canada to really step up and that 344 00:17:37,760 --> 00:17:40,359 Speaker 12: led to the enormous successful as any christ the five percent, 345 00:17:40,920 --> 00:17:44,400 Speaker 12: which is crucial to defend ourselves and to also equal 346 00:17:44,440 --> 00:17:46,320 Speaker 12: length visit to the US is paying this was a 347 00:17:46,359 --> 00:17:49,359 Speaker 12: problem or any there since Eisenhower. I always tell you 348 00:17:49,400 --> 00:17:52,280 Speaker 12: Europeans you're completely committed to NATO. But there's also that 349 00:17:52,400 --> 00:17:55,720 Speaker 12: one irritant and it is this factor that the Europeans 350 00:17:55,720 --> 00:17:58,080 Speaker 12: were not being the same as US was speaking. And 351 00:17:58,119 --> 00:17:58,639 Speaker 12: we solved it. 352 00:17:58,680 --> 00:18:00,800 Speaker 11: And this is crucial also because we need the money 353 00:18:00,840 --> 00:18:01,879 Speaker 11: to protect ourselves. 354 00:18:02,000 --> 00:18:04,159 Speaker 12: There's one thing or heard you say yesterday and today. 355 00:18:04,560 --> 00:18:07,320 Speaker 12: You are not absolutely sure that Europeans from would come 356 00:18:07,520 --> 00:18:09,639 Speaker 12: to the rescue of the US if you will be attacked. 357 00:18:10,040 --> 00:18:13,560 Speaker 12: Let me tell you they will. And it is in Afghanistan. 358 00:18:13,640 --> 00:18:18,360 Speaker 12: As you know, for every American who pays the ultimately 359 00:18:18,400 --> 00:18:20,800 Speaker 12: for every two Americans who paint the ultimate plies price, 360 00:18:21,320 --> 00:18:24,680 Speaker 12: there was one soldier from another natal country that does 361 00:18:24,720 --> 00:18:27,280 Speaker 12: come back to his family from an Atherlands, from Denmark. 362 00:18:27,440 --> 00:18:31,160 Speaker 12: Particularly for our countries, so you can be assured absolutely 363 00:18:31,240 --> 00:18:34,199 Speaker 12: if ever the US will be under attack, your allies 364 00:18:34,240 --> 00:18:37,159 Speaker 12: will be with you. Absolutely, there's an absolute guarantee. I 365 00:18:37,200 --> 00:18:39,040 Speaker 12: really want to tell you this because this is important. 366 00:18:39,119 --> 00:18:41,680 Speaker 12: It pains me if you think it is not. And 367 00:18:41,720 --> 00:18:44,200 Speaker 12: under your leadership, this alliance is stronger than effort. 368 00:18:44,920 --> 00:18:48,800 Speaker 8: Thank you very much, very compliment any questions. 369 00:18:49,000 --> 00:18:53,080 Speaker 13: Resident, The Danish foreign minister rejected your call to negotiate 370 00:18:53,160 --> 00:19:01,040 Speaker 13: on Greenland. Will sorry the Danish foreign minister what you 371 00:19:01,040 --> 00:19:03,639 Speaker 13: said in your speech that you were hoping to negotiate 372 00:19:03,720 --> 00:19:07,439 Speaker 13: to acquire Greenland, essentially saying that this is not something 373 00:19:07,480 --> 00:19:08,680 Speaker 13: that they are willing to discuss. 374 00:19:08,720 --> 00:19:10,360 Speaker 3: So what will those negotiate? 375 00:19:10,400 --> 00:19:12,480 Speaker 10: Well, they tell me that, So would they tell me, 376 00:19:12,520 --> 00:19:14,560 Speaker 10: because I don't like getting at second hand. 377 00:19:14,600 --> 00:19:16,160 Speaker 8: If he wants to tell me, he'll tell me. That's 378 00:19:16,200 --> 00:19:16,760 Speaker 8: in my face. 379 00:19:16,920 --> 00:19:18,280 Speaker 14: And when will you be discussing this? 380 00:19:18,680 --> 00:19:20,560 Speaker 10: I have no idea when you said you want to 381 00:19:20,560 --> 00:19:22,440 Speaker 10: be discussing over with this man right here? 382 00:19:22,720 --> 00:19:25,679 Speaker 8: It's the president more important. It's the president when. 383 00:19:25,520 --> 00:19:29,840 Speaker 12: You said you would remember if Denmark did not I agree. 384 00:19:29,560 --> 00:19:31,040 Speaker 15: That the yell on Greenland? 385 00:19:31,119 --> 00:19:31,880 Speaker 8: What did you mean? 386 00:19:31,920 --> 00:19:32,560 Speaker 12: What other constant? 387 00:19:32,840 --> 00:19:34,679 Speaker 8: You'll have to figure that out for yourself. You're a 388 00:19:34,680 --> 00:19:36,240 Speaker 8: smart guy, just the president. 389 00:19:36,280 --> 00:19:38,600 Speaker 16: Do you see a price for Greenland that's reasonable? 390 00:19:39,160 --> 00:19:41,480 Speaker 8: I can see that, Yeah, I can see. How would 391 00:19:41,520 --> 00:19:42,679 Speaker 8: you talk about I can see that. 392 00:19:42,760 --> 00:19:44,919 Speaker 14: But there's a bigger price, and that's the price of 393 00:19:46,000 --> 00:19:49,000 Speaker 14: the price of safety and security and national security and 394 00:19:49,040 --> 00:19:50,720 Speaker 14: the international security. 395 00:19:50,320 --> 00:19:53,080 Speaker 8: Having to do with many of your gunters. That's really 396 00:19:53,160 --> 00:19:54,639 Speaker 8: the price, and that's the big price. 397 00:19:55,680 --> 00:19:57,920 Speaker 10: And as you know, we're doing the Golden Dome, it's 398 00:19:57,920 --> 00:19:59,000 Speaker 10: gonna be very expensive. 399 00:19:59,680 --> 00:20:02,359 Speaker 8: And it's better if we have Greenland than it is without. 400 00:20:03,160 --> 00:20:04,920 Speaker 10: It's going to be safe, it's going to be stronger, 401 00:20:04,960 --> 00:20:06,480 Speaker 10: it's going to be better for Europe, and it's going 402 00:20:06,560 --> 00:20:07,359 Speaker 10: to be better for us. 403 00:20:08,400 --> 00:20:13,280 Speaker 8: And so we'll see what happens. Any other question reassuring 404 00:20:13,320 --> 00:20:13,760 Speaker 8: to hear the. 405 00:20:13,800 --> 00:20:17,000 Speaker 10: Natal Secretary General say NATO will defend the United States 406 00:20:17,000 --> 00:20:20,360 Speaker 10: and becomes under attack, Well. 407 00:20:20,200 --> 00:20:24,280 Speaker 8: I hope that that's true. I mean, he's a good man. 408 00:20:24,320 --> 00:20:25,600 Speaker 8: He's never lied to me before. 409 00:20:25,680 --> 00:20:27,560 Speaker 10: You know, we've had a good relationship, and he made 410 00:20:27,560 --> 00:20:30,399 Speaker 10: that statement that snatch. I just, you know, when I 411 00:20:30,400 --> 00:20:33,160 Speaker 10: see what's happening with Greenland, I wonder, because I want 412 00:20:33,160 --> 00:20:35,960 Speaker 10: Greenland for security, I don't want it for anything else. 413 00:20:36,000 --> 00:20:38,640 Speaker 8: We have so much rare earth we don't know what 414 00:20:38,680 --> 00:20:41,760 Speaker 8: to do with it. We don't need it for anything else. 415 00:20:42,640 --> 00:20:44,560 Speaker 10: And in terms of Greenland, you know you have to 416 00:20:44,640 --> 00:20:47,600 Speaker 10: go twenty five feet down through ice to get it. 417 00:20:46,680 --> 00:20:49,320 Speaker 10: It's not something that a lot of people are going 418 00:20:49,359 --> 00:20:52,040 Speaker 10: to do or want to do. No, this is security 419 00:20:52,080 --> 00:20:55,000 Speaker 10: with talking about and I can say one thing about Mark. 420 00:20:55,040 --> 00:20:57,200 Speaker 8: He wants security, and he wants security for all of us. 421 00:20:57,240 --> 00:20:58,880 Speaker 8: I think it's you know, we're a member of. 422 00:20:58,880 --> 00:21:03,159 Speaker 14: NATO on security for NATO and beyond. So when he 423 00:21:03,200 --> 00:21:06,920 Speaker 14: says that, Steve, I think it's you know, it's very nice. Okay, 424 00:21:07,280 --> 00:21:10,679 Speaker 14: thank you very much, everybody, Thank. 425 00:21:09,920 --> 00:21:13,600 Speaker 13: You, thank you, prest thank you. 426 00:21:14,119 --> 00:21:14,439 Speaker 3: All Right. 427 00:21:14,960 --> 00:21:18,119 Speaker 2: A live conversation there with President Trump and the Secretary 428 00:21:18,200 --> 00:21:20,760 Speaker 2: General of NATO Mark Ruta, who said, you can be 429 00:21:20,880 --> 00:21:24,760 Speaker 2: assured absolutely this is Ruda speaking. If ever the US 430 00:21:24,840 --> 00:21:28,159 Speaker 2: was under attack, your allies will be with you. He added, 431 00:21:28,280 --> 00:21:31,959 Speaker 2: it pains me if you think that's not so, following 432 00:21:32,000 --> 00:21:34,720 Speaker 2: the President's remarks earlier at the World Economic Forum in 433 00:21:34,760 --> 00:21:36,840 Speaker 2: which he said flat out he does not believe that 434 00:21:36,920 --> 00:21:40,280 Speaker 2: our NATO allies would be there to help support the 435 00:21:40,359 --> 00:21:43,600 Speaker 2: United States if attacked if there was in fact an 436 00:21:43,720 --> 00:21:47,879 Speaker 2: Article five violation, knowing that the only time there ever 437 00:21:48,040 --> 00:21:51,840 Speaker 2: has been one was on behalf of the United States 438 00:21:51,880 --> 00:21:54,200 Speaker 2: following nine to eleven. And of course Denmark did send 439 00:21:54,200 --> 00:21:58,840 Speaker 2: troops who died in Afghanistan. Let's assimil our political panel 440 00:21:58,920 --> 00:22:01,400 Speaker 2: to get their take on the comments from the President 441 00:22:01,480 --> 00:22:03,640 Speaker 2: so far today in Davos, and we're not done yet. 442 00:22:03,640 --> 00:22:07,520 Speaker 2: Bloomberg Politics contributors Genie Shanzano and Rick Davis are with 443 00:22:07,680 --> 00:22:12,080 Speaker 2: US Genius Democracy visiting fellow at Harvard Kennedy School's Ash Center. 444 00:22:12,280 --> 00:22:17,639 Speaker 2: Rick are Republican strategist and partner at Stone Court Capital. Genie, 445 00:22:17,640 --> 00:22:21,560 Speaker 2: the President, after the Secretary General of NATO just made 446 00:22:21,640 --> 00:22:25,159 Speaker 2: that pronouncement, seem to think it was kind of a 447 00:22:25,200 --> 00:22:27,919 Speaker 2: personal He said a thank you for the compliment. He 448 00:22:28,000 --> 00:22:30,880 Speaker 2: does not believe that other nations, based on the pushback 449 00:22:30,920 --> 00:22:32,960 Speaker 2: over Greenland, would be there to protect us. Do you 450 00:22:32,960 --> 00:22:35,080 Speaker 2: think he takes RUTA at his word. 451 00:22:37,040 --> 00:22:40,360 Speaker 16: I don't think he believes that, And you know, quite frankly, 452 00:22:40,600 --> 00:22:43,560 Speaker 16: I think we're seeing a rupture in NATO. I mean, 453 00:22:43,680 --> 00:22:46,280 Speaker 16: you look at the comments and that's what I think 454 00:22:46,320 --> 00:22:49,240 Speaker 16: has been so remarkable at Davos. You look at people 455 00:22:49,359 --> 00:22:53,240 Speaker 16: like Mark Karney, you look at people like the UK 456 00:22:53,440 --> 00:22:57,560 Speaker 16: Finance Minister, you look at others. They are starting to 457 00:22:57,680 --> 00:23:00,399 Speaker 16: say that they don't think they can try us to 458 00:23:00,440 --> 00:23:01,240 Speaker 16: the US to be. 459 00:23:01,240 --> 00:23:01,920 Speaker 3: There for them. 460 00:23:02,320 --> 00:23:04,880 Speaker 16: So I'm not so sure that Donald Trump is wrong 461 00:23:04,960 --> 00:23:07,080 Speaker 16: when he says they may not be there for us, 462 00:23:07,280 --> 00:23:09,840 Speaker 16: But of course what he's not saying is that this 463 00:23:10,040 --> 00:23:13,120 Speaker 16: is of his own doing, because to your point, they 464 00:23:13,119 --> 00:23:15,240 Speaker 16: have been there for us for the last eighty years. 465 00:23:15,520 --> 00:23:18,439 Speaker 16: And I think you know, Mark Ruda is standing a 466 00:23:18,480 --> 00:23:22,600 Speaker 16: little bit on his own there, still harboring the idea 467 00:23:22,960 --> 00:23:25,880 Speaker 16: that if he hugs close to Donald Trump he will 468 00:23:25,920 --> 00:23:28,320 Speaker 16: get something out of it, and I'm not so sure 469 00:23:28,400 --> 00:23:31,280 Speaker 16: many of our NATO and European allies feel that way anymore. 470 00:23:32,320 --> 00:23:34,840 Speaker 2: He did spend a lot of time thanking President Trump 471 00:23:34,880 --> 00:23:39,000 Speaker 2: for preserving funding for NATO. Rick, what's going through your 472 00:23:39,000 --> 00:23:41,440 Speaker 2: mind if you just heard this conversation. The US has 473 00:23:41,440 --> 00:23:45,560 Speaker 2: never doubted NATO allies and responding to an Article five has. 474 00:23:45,440 --> 00:23:47,760 Speaker 17: It no, and I don't think it will in the future. 475 00:23:48,359 --> 00:23:53,040 Speaker 17: The debate isn't about the ability for NATO to continue 476 00:23:53,080 --> 00:23:57,159 Speaker 17: to protect one another's interests. As you've pointed out, it 477 00:23:57,280 --> 00:24:00,199 Speaker 17: rarely comes into effect, but when it does, there's not 478 00:24:00,240 --> 00:24:04,800 Speaker 17: a question in the NATO country's responding kind. And certainly 479 00:24:05,720 --> 00:24:08,280 Speaker 17: Donald Trump has not said anything that would actually give 480 00:24:08,359 --> 00:24:12,800 Speaker 17: cause for the NATO countries to not think that the 481 00:24:12,920 --> 00:24:15,600 Speaker 17: US wouldn't be there too. And I think you got 482 00:24:15,600 --> 00:24:17,760 Speaker 17: to divorce some of this with just sort of the 483 00:24:17,760 --> 00:24:21,840 Speaker 17: typical Trump grandstanding, trying to leverage Europe into a place 484 00:24:22,200 --> 00:24:25,480 Speaker 17: where it hasn't wanted to be. Europe was not investing 485 00:24:25,960 --> 00:24:28,719 Speaker 17: in their lethality and now it's a much more lethal 486 00:24:29,240 --> 00:24:33,399 Speaker 17: enterprise in NATO than it has ever been. And Trump's 487 00:24:33,440 --> 00:24:37,200 Speaker 17: been a good part of his first term you want 488 00:24:37,200 --> 00:24:41,119 Speaker 17: to call it lobbying Europe more like lobbying bombs at Europe, 489 00:24:42,400 --> 00:24:44,600 Speaker 17: And obviously he's been committed to doing. 490 00:24:44,440 --> 00:24:46,640 Speaker 3: That again in this last year. 491 00:24:46,720 --> 00:24:51,280 Speaker 17: So it's how he gains leverage over these leaders is 492 00:24:51,320 --> 00:24:54,000 Speaker 17: to be able to throw these insults. I'm not saying 493 00:24:54,000 --> 00:24:56,320 Speaker 17: it's the right thing to do, but it's definitely a tactic. 494 00:24:57,160 --> 00:24:59,760 Speaker 17: And I don't think you want to look too far 495 00:24:59,760 --> 00:25:03,440 Speaker 17: past that tactic to see that things are actually improved 496 00:25:03,440 --> 00:25:06,520 Speaker 17: in NATO since twenty sixteen. 497 00:25:07,720 --> 00:25:09,959 Speaker 2: Well, when we move past some of the insults that 498 00:25:10,000 --> 00:25:13,439 Speaker 2: we heard this morning and some of the hot takes 499 00:25:13,440 --> 00:25:16,199 Speaker 2: on data that layel brainer helped us understand, we're not 500 00:25:16,320 --> 00:25:19,160 Speaker 2: always accurate. And of course the President Genie is talking 501 00:25:19,200 --> 00:25:21,560 Speaker 2: to a lot of people who are pretty smart in 502 00:25:21,640 --> 00:25:24,199 Speaker 2: that room. These are world leaders and corporate leaders who 503 00:25:24,320 --> 00:25:26,520 Speaker 2: know the data and they know the score. 504 00:25:27,400 --> 00:25:28,600 Speaker 3: But it wasn't just about that. 505 00:25:28,640 --> 00:25:31,159 Speaker 2: The President, when he got back on the script, started 506 00:25:31,200 --> 00:25:35,679 Speaker 2: talking about the cultural implications of our economies. 507 00:25:35,720 --> 00:25:38,200 Speaker 3: Genie, and I'm wondering your thoughts on this rhetoric. Listen 508 00:25:38,200 --> 00:25:38,800 Speaker 3: to what he said. 509 00:25:39,520 --> 00:25:45,560 Speaker 9: The explosion of prosperity and conclusion and progress that built 510 00:25:45,560 --> 00:25:49,560 Speaker 9: the West did not come from our tax coach. It 511 00:25:49,680 --> 00:25:53,600 Speaker 9: ultimately came from our very special culture. This is the 512 00:25:53,720 --> 00:25:57,719 Speaker 9: precious inheritance that America and Europe have income and we 513 00:25:57,760 --> 00:25:58,200 Speaker 9: share it. 514 00:25:58,920 --> 00:26:01,040 Speaker 8: We share it, have to keep it strong. 515 00:26:02,560 --> 00:26:06,000 Speaker 9: We have to become stronger, more successful, and more prosperous 516 00:26:06,040 --> 00:26:09,840 Speaker 9: than ever. We have to defend that culture and rediscover 517 00:26:10,000 --> 00:26:12,679 Speaker 9: the spirit that lifted the West from the depths of 518 00:26:12,720 --> 00:26:16,440 Speaker 9: the dark Ages to the pinnacle of human achievement. 519 00:26:18,520 --> 00:26:23,240 Speaker 2: This followed a pretty long rant insulting Somalia, which he 520 00:26:23,320 --> 00:26:25,320 Speaker 2: said was not a real country, and talked about the 521 00:26:25,359 --> 00:26:28,480 Speaker 2: impact of Somali migrants in the United States when you 522 00:26:28,560 --> 00:26:31,520 Speaker 2: consider that language. We have to defend that culture. Genie, 523 00:26:31,560 --> 00:26:32,920 Speaker 2: what culture is he talking about? 524 00:26:34,640 --> 00:26:34,840 Speaker 13: You know? 525 00:26:34,960 --> 00:26:37,320 Speaker 16: Number one, I think he's talking about a culture that 526 00:26:37,680 --> 00:26:40,879 Speaker 16: is scripted, and he is far less in my mind, 527 00:26:40,960 --> 00:26:43,560 Speaker 16: comfortable when he's forced to go back on script, which 528 00:26:43,560 --> 00:26:46,199 Speaker 16: he was doing at that point. And what strikes me 529 00:26:46,280 --> 00:26:50,560 Speaker 16: about that is, if his real interest is in preserving 530 00:26:50,840 --> 00:26:53,800 Speaker 16: the West and everything that has made the West what 531 00:26:53,880 --> 00:26:56,760 Speaker 16: it is since World War Two, since the ball of 532 00:26:56,800 --> 00:26:59,320 Speaker 16: the Berlin War, since the end of the Cold War, 533 00:26:59,760 --> 00:27:03,080 Speaker 16: why is he doing everything he can to blow those 534 00:27:03,160 --> 00:27:07,639 Speaker 16: relationships up. If that's his interest, why is he threatening 535 00:27:07,960 --> 00:27:11,919 Speaker 16: to send American troops into Greenland obviously before the script, 536 00:27:12,080 --> 00:27:13,840 Speaker 16: before this speech, rather he. 537 00:27:13,840 --> 00:27:15,119 Speaker 3: Is backed off from that. 538 00:27:15,600 --> 00:27:19,640 Speaker 16: Why is he consistently telling our NATO allies that they 539 00:27:19,640 --> 00:27:23,000 Speaker 16: wouldn't even be countries if it wasn't for the United States, 540 00:27:23,320 --> 00:27:26,040 Speaker 16: that they have done nothing, that NATO has done nothing 541 00:27:26,080 --> 00:27:28,800 Speaker 16: for the United States. So, you know, to me, this 542 00:27:28,880 --> 00:27:32,960 Speaker 16: seems like what his political strategists want him to say, 543 00:27:33,080 --> 00:27:36,120 Speaker 16: what his speech writers want him to say, and he'll 544 00:27:36,160 --> 00:27:38,720 Speaker 16: say it, but you can hear what he really wants 545 00:27:38,760 --> 00:27:41,200 Speaker 16: to say is what he has said since twenty sixteen, 546 00:27:41,720 --> 00:27:45,680 Speaker 16: that NATO is not serving the United States. We are 547 00:27:45,800 --> 00:27:48,920 Speaker 16: serving it and they owe us. That is Donald Trump's 548 00:27:48,920 --> 00:27:51,440 Speaker 16: message to NATO. And I think for the first time 549 00:27:51,480 --> 00:27:54,800 Speaker 16: we are hearing European leaders wake up and say, you know, what, 550 00:27:55,080 --> 00:27:57,639 Speaker 16: we're going to take his rhetoric seriously. 551 00:27:57,720 --> 00:27:58,879 Speaker 3: We aren't going to Oh, we. 552 00:27:58,880 --> 00:28:01,280 Speaker 16: Aren't going to keep going in say oh he's just 553 00:28:01,440 --> 00:28:04,240 Speaker 16: joking or he's just using this crazy rhetoric to move 554 00:28:04,320 --> 00:28:06,880 Speaker 16: us in a different direction. You see a split there, 555 00:28:06,920 --> 00:28:09,360 Speaker 16: and you see Carne and others who are saying, I'm 556 00:28:09,400 --> 00:28:11,280 Speaker 16: going to take him at his word. We need to 557 00:28:11,320 --> 00:28:14,760 Speaker 16: defend ourselves and look for allies in China and elsewhere. 558 00:28:16,160 --> 00:28:18,880 Speaker 2: Rick Davis, how should we interpret the cultural references? Are 559 00:28:18,880 --> 00:28:21,119 Speaker 2: these the fingerprints of Stephen Miller on the script? 560 00:28:21,720 --> 00:28:25,720 Speaker 17: Yeah, I think that anytime the word culture comes out 561 00:28:25,720 --> 00:28:28,919 Speaker 17: of Tom Trump's mouth, especially written in a speech, you 562 00:28:28,960 --> 00:28:32,359 Speaker 17: can pretty much rest assured that that's coming from, you know, 563 00:28:32,480 --> 00:28:35,200 Speaker 17: sort of the ideological center of the White House. 564 00:28:35,000 --> 00:28:36,040 Speaker 3: Which is Stephen Miller. 565 00:28:36,080 --> 00:28:40,440 Speaker 17: And and that is a reference to the Judeo Christian 566 00:28:40,600 --> 00:28:43,880 Speaker 17: values that are similar between the US and Europe. 567 00:28:44,400 --> 00:28:45,920 Speaker 3: It is not a modern conceit. 568 00:28:46,000 --> 00:28:49,760 Speaker 17: It's an ancient conceit, and it's a bit of a 569 00:28:49,800 --> 00:28:54,080 Speaker 17: dog whistle, you know, in today's domestic politics. So insomuch 570 00:28:54,120 --> 00:28:58,280 Speaker 17: as they're embedded into this speech, some of these kinds 571 00:28:58,320 --> 00:29:04,080 Speaker 17: of symbolism and messaging for the domestic US audience, at 572 00:29:04,120 --> 00:29:08,280 Speaker 17: least the MAGA audience. Then you can be rest assured 573 00:29:08,280 --> 00:29:10,280 Speaker 17: that that's going to make its way through social media 574 00:29:10,320 --> 00:29:11,080 Speaker 17: by the end of today. 575 00:29:11,400 --> 00:29:13,760 Speaker 2: Always a great conversation with these two Rick Davis and 576 00:29:13,800 --> 00:29:17,320 Speaker 2: Jeanie Shanzeo. That's why they are Bloomberg Politics contributors. Stay 577 00:29:17,360 --> 00:29:19,480 Speaker 2: with us on Balance of Power. We'll have much more 578 00:29:19,480 --> 00:29:20,440 Speaker 2: coming up after this. 579 00:29:24,680 --> 00:29:28,160 Speaker 1: You're listening to the Bloomberg Balance of Power Podcast. Catch 580 00:29:28,240 --> 00:29:31,320 Speaker 1: us live weekdays at noon and five pm Eastern on 581 00:29:31,400 --> 00:29:34,640 Speaker 1: Apple Corplay and Android Auto with the Bloomberg Business App. 582 00:29:34,680 --> 00:29:37,720 Speaker 1: You can also listen live on Amazon Alexa from our 583 00:29:37,760 --> 00:29:42,600 Speaker 1: flagship New York station, Just say Alexa Play Bloomberg eleven thirty. 584 00:29:43,800 --> 00:29:48,120 Speaker 2: Tentative calm. What a perfect way to describe this market today. 585 00:29:48,640 --> 00:29:51,040 Speaker 2: Monster rally this morning. We're not seeing it now, but 586 00:29:51,040 --> 00:29:54,240 Speaker 2: we're holding positive with some hope here that we might 587 00:29:54,400 --> 00:29:56,880 Speaker 2: find some stability in the days ahead. After the President 588 00:29:57,000 --> 00:30:01,400 Speaker 2: ruled out the idea of invading actually using military kinetic 589 00:30:01,520 --> 00:30:04,320 Speaker 2: action to take over Greenland, he says, we're not going 590 00:30:04,360 --> 00:30:06,400 Speaker 2: to do that, but if they say no, we'll remember 591 00:30:09,600 --> 00:30:11,920 Speaker 2: it's twenty six degrees right now in Davos. By the 592 00:30:11,960 --> 00:30:14,320 Speaker 2: way it's going to get down to eight degrees tonight 593 00:30:14,440 --> 00:30:15,560 Speaker 2: at Bloomberg House. 594 00:30:16,800 --> 00:30:18,640 Speaker 3: Amazing the news that we've been hearing from over there. 595 00:30:18,640 --> 00:30:20,840 Speaker 2: Of course, none bigger than the President's speech this morning, 596 00:30:20,840 --> 00:30:22,240 Speaker 2: and he talks so much about Europe. 597 00:30:22,280 --> 00:30:23,160 Speaker 3: That was the thrust. 598 00:30:23,400 --> 00:30:25,360 Speaker 2: I know, it was supposed to be about affordability, and 599 00:30:25,360 --> 00:30:26,680 Speaker 2: he did get into some of that. By the way, 600 00:30:26,760 --> 00:30:28,800 Speaker 2: half an hour from now, Lale Brainer is going to 601 00:30:28,840 --> 00:30:31,080 Speaker 2: be with us in studio to get her reaction to 602 00:30:31,120 --> 00:30:34,560 Speaker 2: the President's framing of the economy today, which ought to 603 00:30:34,600 --> 00:30:38,600 Speaker 2: be interesting. Never mind the arguments before the Supreme Court 604 00:30:38,880 --> 00:30:42,800 Speaker 2: this morning. But it wasn't only about Europe. He did 605 00:30:42,840 --> 00:30:45,920 Speaker 2: mention Venezuela as well, but in the line of attack 606 00:30:47,400 --> 00:30:51,720 Speaker 2: was our ally to the north. Yes, Canada. Having heard 607 00:30:51,720 --> 00:30:54,360 Speaker 2: from Mark Carney yesterday, we talked about it just a moment, 608 00:30:54,400 --> 00:30:58,120 Speaker 2: the Prime Minister delivering a very blunt address in which 609 00:30:58,120 --> 00:31:00,200 Speaker 2: he said we are in the midst of a yeh 610 00:31:00,240 --> 00:31:05,320 Speaker 2: sure not a transition when referring to the new world order. 611 00:31:05,360 --> 00:31:06,160 Speaker 3: Listen to what he said. 612 00:31:06,920 --> 00:31:10,960 Speaker 18: Every day we're reminded that we live in an era 613 00:31:11,600 --> 00:31:16,200 Speaker 18: of great power rivalry, that the rules based order is fading, 614 00:31:17,040 --> 00:31:19,600 Speaker 18: that the strong can do what they can, and the 615 00:31:19,600 --> 00:31:22,280 Speaker 18: week must suffer what they must. 616 00:31:23,560 --> 00:31:23,960 Speaker 3: Wow. 617 00:31:25,080 --> 00:31:29,440 Speaker 2: President Trump was listening, watching and had a message back 618 00:31:29,680 --> 00:31:32,760 Speaker 2: to Canada today. I don't know if you mentioned Carney 619 00:31:32,880 --> 00:31:35,040 Speaker 2: by name. He referred to the Prime Minister. Listen to 620 00:31:35,040 --> 00:31:37,400 Speaker 2: President Trump from his speech today in Dallas. 621 00:31:38,120 --> 00:31:41,680 Speaker 9: We're building a golden dome that's going to just by 622 00:31:41,720 --> 00:31:48,600 Speaker 9: its very nature, going to be defending Canada. Canada gets 623 00:31:48,600 --> 00:31:50,520 Speaker 9: a lot of freebies from US, by the way, they 624 00:31:50,560 --> 00:31:53,960 Speaker 9: should be grateful also. But then I watch your Prime 625 00:31:54,000 --> 00:31:57,600 Speaker 9: minister yesterday. He wasn't so grateful that they should be 626 00:31:57,640 --> 00:32:02,560 Speaker 9: grateful to Canada. Canada lives because of the United States. 627 00:32:02,600 --> 00:32:05,840 Speaker 9: Remember that, Mark, the next time you make your statements. 628 00:32:07,480 --> 00:32:12,440 Speaker 2: That's right, he called him Mark. Derek Daklue it covers 629 00:32:12,440 --> 00:32:15,760 Speaker 2: this for us from our Toronto bureau. Bloomberg News, Executive 630 00:32:15,840 --> 00:32:17,560 Speaker 2: editor for Canada, is with us live right now. 631 00:32:17,600 --> 00:32:17,840 Speaker 3: Derek. 632 00:32:17,840 --> 00:32:20,480 Speaker 2: It's great to see you. Welcome back to balance of power. 633 00:32:21,160 --> 00:32:23,280 Speaker 2: How's this all playing in Canada. 634 00:32:24,640 --> 00:32:27,800 Speaker 19: Well, Carney's speech is really reverberating around the country. I mean, 635 00:32:27,880 --> 00:32:30,160 Speaker 19: some people are talking about it as as as the 636 00:32:30,200 --> 00:32:34,840 Speaker 19: most significant foreign policy speech from a Canadian leader. Maybe 637 00:32:34,840 --> 00:32:37,960 Speaker 19: in decades, and it's it's all anybody can talk about 638 00:32:38,040 --> 00:32:40,400 Speaker 19: because because what Carney is saying. I mean, there are 639 00:32:40,400 --> 00:32:43,680 Speaker 19: a bunch of signals in that in those In that 640 00:32:43,760 --> 00:32:46,840 Speaker 19: speech that he gave, he didn't mention Trump, He really 641 00:32:46,920 --> 00:32:50,280 Speaker 19: barely mentioned the US. But it's you know, it's a 642 00:32:50,280 --> 00:32:53,520 Speaker 19: signal to Washington, but it's also a signal to Europe, uh, 643 00:32:53,600 --> 00:32:56,040 Speaker 19: you know, to the to the Nordic nations, and of 644 00:32:56,080 --> 00:33:00,160 Speaker 19: the Canadian population. The underlying message being don't expect the 645 00:33:00,200 --> 00:33:02,240 Speaker 19: world to go back to what it was. You know, 646 00:33:02,560 --> 00:33:05,240 Speaker 19: we are truly in a new era and that will 647 00:33:05,280 --> 00:33:09,200 Speaker 19: require a whole bunch of different policies, especially from countries 648 00:33:09,240 --> 00:33:13,040 Speaker 19: like Canada that have historically been very very allied with 649 00:33:13,240 --> 00:33:17,000 Speaker 19: the US on defense, trade and security matters. 650 00:33:17,880 --> 00:33:20,360 Speaker 2: Yeah, well i'll tell you you listen to what the 651 00:33:20,360 --> 00:33:24,520 Speaker 2: President just said, right, The line was Canada lives because 652 00:33:24,560 --> 00:33:27,880 Speaker 2: of the United States. Yet days ago we saw Mark 653 00:33:28,280 --> 00:33:32,240 Speaker 2: Carney signing a trade agreement with Beijing. How do we 654 00:33:32,360 --> 00:33:34,000 Speaker 2: rationalize these two. 655 00:33:35,360 --> 00:33:38,680 Speaker 19: Well, I mean, the trade agreement, let's be clear, is 656 00:33:38,760 --> 00:33:41,320 Speaker 19: quite a limited thing. There were high tariffs that have 657 00:33:41,560 --> 00:33:44,320 Speaker 19: existed for a while between Canada and China on a 658 00:33:44,320 --> 00:33:47,960 Speaker 19: handful of things. Canada was tariffing Chinese cars, which it 659 00:33:48,080 --> 00:33:51,880 Speaker 19: did to follow what the Biden administration wanted. I mean, 660 00:33:52,040 --> 00:33:54,840 Speaker 19: basically that was a match of what Biden had done 661 00:33:55,120 --> 00:33:59,400 Speaker 19: on Chinese evs, and the Chinese retaliated against Canadian food products. 662 00:34:00,080 --> 00:34:00,840 Speaker 12: They've agreed to. 663 00:34:01,040 --> 00:34:04,440 Speaker 19: You know, to to lower those tariffs. If the question 664 00:34:04,640 --> 00:34:09,120 Speaker 19: is how do how do Canadians react when when when 665 00:34:09,160 --> 00:34:12,040 Speaker 19: Trump says things like Canada lives because of the United States, 666 00:34:13,120 --> 00:34:15,919 Speaker 19: I mean, the answer really is not very well. I mean, 667 00:34:16,200 --> 00:34:18,640 Speaker 19: I mean, Canada has been a partner with the US 668 00:34:18,680 --> 00:34:22,200 Speaker 19: on NORAD and NATO and all sorts of things. But 669 00:34:22,280 --> 00:34:26,720 Speaker 19: something that many many Americans don't know is that after 670 00:34:26,800 --> 00:34:31,200 Speaker 19: nine to eleven, when the US went into Afghanistan, Canadian soldiers, 671 00:34:31,520 --> 00:34:35,160 Speaker 19: you know, went went too. And and there's a monument 672 00:34:35,239 --> 00:34:38,920 Speaker 19: with more than one hundred and fifty names of of 673 00:34:39,800 --> 00:34:42,759 Speaker 19: of Canadian soldiers who died in Afghanistan just sort of 674 00:34:42,760 --> 00:34:46,800 Speaker 19: responding as part of a broader NATO mission of post 675 00:34:46,840 --> 00:34:49,080 Speaker 19: nine to eleven. And people here do remember that sort 676 00:34:49,120 --> 00:34:52,200 Speaker 19: of thing when they when they hear the president or 677 00:34:52,239 --> 00:34:56,600 Speaker 19: other US policymakers talking talking in this way about about Canada. 678 00:34:57,680 --> 00:35:02,120 Speaker 2: Yeah, you saw this headline out there that Canadians are 679 00:35:02,280 --> 00:35:05,800 Speaker 2: modeling scenarios for a possible US invasion. 680 00:35:06,520 --> 00:35:08,719 Speaker 3: We've only got about a minute left here, Derek. Is 681 00:35:08,760 --> 00:35:09,160 Speaker 3: that real? 682 00:35:11,120 --> 00:35:14,240 Speaker 19: I mean yes in the sense that we believe that 683 00:35:13,960 --> 00:35:17,279 Speaker 19: it's it's real in the sense that they've discussed this 684 00:35:17,360 --> 00:35:19,960 Speaker 19: as you would always do, you know, scenario planning for 685 00:35:20,000 --> 00:35:23,640 Speaker 19: the worst case scenario. Everybody understands that Canadian military might 686 00:35:23,719 --> 00:35:28,120 Speaker 19: is vastly superior to Canadian military might, and and so 687 00:35:28,480 --> 00:35:30,080 Speaker 19: you know, you know that's the way it is. But 688 00:35:31,200 --> 00:35:34,880 Speaker 19: you know, the polls all show that there is huge 689 00:35:34,920 --> 00:35:37,279 Speaker 19: Canadian resistance to the idea of ever joining the US 690 00:35:37,400 --> 00:35:40,319 Speaker 19: fifty first state. None of that really has any real 691 00:35:40,400 --> 00:35:45,240 Speaker 19: traction here, and so you know that's that's the reality 692 00:35:45,280 --> 00:35:48,480 Speaker 19: of how you know, of how the Canadian public feels 693 00:35:48,480 --> 00:35:50,719 Speaker 19: about and thinks about this when you get past the 694 00:35:51,280 --> 00:35:54,480 Speaker 19: question of theoretical military invasions. 695 00:35:56,000 --> 00:35:58,160 Speaker 2: Derek, it's great to have you, as always from our 696 00:35:58,200 --> 00:36:02,520 Speaker 2: Toronto Bureau Cluett with the Canadian side of this whole story. 697 00:36:02,840 --> 00:36:05,520 Speaker 2: And we've got our eyes on Wall Street today following 698 00:36:05,560 --> 00:36:08,480 Speaker 2: the President's address. We had a very severe sell off 699 00:36:08,560 --> 00:36:11,160 Speaker 2: yesterday that we were told might be the beginning of 700 00:36:11,239 --> 00:36:15,319 Speaker 2: another Cell America moment, bringing us back to Liberation Day. 701 00:36:15,320 --> 00:36:19,200 Speaker 2: Everything was off stocks, bonds, the dollar. We are seeing 702 00:36:19,239 --> 00:36:21,560 Speaker 2: a recovery now, but it's been tempered. What was it 703 00:36:21,600 --> 00:36:27,359 Speaker 2: that Charlie said, tentative calm, which I think does kind 704 00:36:27,360 --> 00:36:29,080 Speaker 2: of illustrate where we're at right now. We wanted to 705 00:36:29,080 --> 00:36:31,120 Speaker 2: take a minute with Mike Reagan to see what he's 706 00:36:31,160 --> 00:36:33,719 Speaker 2: looking at Bloomberg, Managing editor for US Equities, as with 707 00:36:33,880 --> 00:36:36,319 Speaker 2: US Live from New York. Mike, it's great to see you. 708 00:36:36,719 --> 00:36:39,080 Speaker 2: Was that a one day event? Well, you know, Joe, 709 00:36:39,120 --> 00:36:39,600 Speaker 2: it's interesting. 710 00:36:39,640 --> 00:36:42,680 Speaker 15: I mean, the market seems laser focused on this Greenland 711 00:36:42,760 --> 00:36:46,760 Speaker 15: situation right now, and the rhetoric from Trump's social media 712 00:36:46,800 --> 00:36:49,719 Speaker 15: over the weekend was very alarming in that regard. Then 713 00:36:49,760 --> 00:36:52,680 Speaker 15: this morning we had his speech in Davos where he 714 00:36:53,000 --> 00:36:57,520 Speaker 15: seemed to indicate that a military invasion, if you will, 715 00:36:57,560 --> 00:36:59,600 Speaker 15: of Greenland is not in the cards. 716 00:37:00,040 --> 00:37:02,879 Speaker 3: Whoever, you know, that really shot the market. 717 00:37:02,560 --> 00:37:04,239 Speaker 15: Back up about one percent in the s and P 718 00:37:04,360 --> 00:37:07,759 Speaker 15: five hundred recruped about half of yesterday's drop. But then 719 00:37:08,120 --> 00:37:10,719 Speaker 15: right after his speech, you know, we started seeing headlines 720 00:37:10,920 --> 00:37:14,879 Speaker 15: that Greenland does not want to negotiate with him at all. 721 00:37:15,080 --> 00:37:18,760 Speaker 15: So really, you know, so really I think is calling 722 00:37:18,760 --> 00:37:22,160 Speaker 15: into question, well, what will Trump Trump's response be again, 723 00:37:22,400 --> 00:37:26,600 Speaker 15: So we've you know, we've come back down, erased almost 724 00:37:26,600 --> 00:37:28,680 Speaker 15: all that game we saw earlier in the session, up 725 00:37:28,680 --> 00:37:30,560 Speaker 15: about zero point three percent in the S and PP 726 00:37:30,719 --> 00:37:31,360 Speaker 15: right now. 727 00:37:32,560 --> 00:37:34,319 Speaker 2: Well, it certainly gives you a sense of what is 728 00:37:34,440 --> 00:37:39,879 Speaker 2: driving markets right now. Was was much technical damage done yesterday, Mike, 729 00:37:39,920 --> 00:37:41,719 Speaker 2: because it was what just a week and a half ago, 730 00:37:41,960 --> 00:37:43,560 Speaker 2: the S and P five hundred was at an all 731 00:37:43,560 --> 00:37:45,320 Speaker 2: time time Yeah, I think so. 732 00:37:45,560 --> 00:37:48,720 Speaker 15: I mean, we erased the gains for the year, granted 733 00:37:48,760 --> 00:37:50,839 Speaker 15: only three weeks into the year, so that's you know, 734 00:37:50,920 --> 00:37:53,560 Speaker 15: that's nothing to worry about. We are trading below that 735 00:37:53,600 --> 00:37:56,480 Speaker 15: fifty day moving average in the S and P five hundred. 736 00:37:57,360 --> 00:38:01,200 Speaker 15: I think the rhetoric is very damaged though. You know, 737 00:38:01,239 --> 00:38:04,719 Speaker 15: we've heard a lot about to your point about sell America. 738 00:38:06,040 --> 00:38:08,759 Speaker 15: You know, we've seen these strategists at Deutch Bank and 739 00:38:08,880 --> 00:38:12,439 Speaker 15: elsewhere sort of speculating on the possibility of the quote 740 00:38:12,480 --> 00:38:17,560 Speaker 15: unquote weaponization of US assets, both equities and treasuries. You know, 741 00:38:17,960 --> 00:38:21,239 Speaker 15: people in Europe, especially the countries that would be a 742 00:38:21,320 --> 00:38:26,279 Speaker 15: target of these potential tariffs over the Greenland issue. They 743 00:38:26,280 --> 00:38:28,439 Speaker 15: own a lot of stocks, you know, something like those 744 00:38:28,760 --> 00:38:31,120 Speaker 15: eight countries own about five trillion worth of stocks. They 745 00:38:31,120 --> 00:38:35,719 Speaker 15: own a big slug of treasuries. Most of the analyston 746 00:38:35,840 --> 00:38:38,879 Speaker 15: investors I've read or you know, heard their comments seem 747 00:38:38,920 --> 00:38:41,440 Speaker 15: to think, you know, it's kind of unlikely for this 748 00:38:41,480 --> 00:38:44,600 Speaker 15: to happen, that investors would be shooting themselves in the 749 00:38:44,640 --> 00:38:48,640 Speaker 15: foot if they were to sell US assets over this issue, 750 00:38:48,680 --> 00:38:51,640 Speaker 15: because it could have the potential to really drive down prices. 751 00:38:52,640 --> 00:38:55,600 Speaker 15: That said, just the fact jo that it's in the 752 00:38:55,680 --> 00:38:59,000 Speaker 15: conversation at all is I think, you know, it makes 753 00:38:59,040 --> 00:39:02,279 Speaker 15: us a pretty you know, pretty fragile market right now. 754 00:39:02,280 --> 00:39:05,320 Speaker 3: If that's the type of thing we're talking about, it looks. 755 00:39:05,120 --> 00:39:08,279 Speaker 2: Like the Nasdaq might actually turn negative while we're talking here. 756 00:39:08,280 --> 00:39:09,759 Speaker 3: It's up only three points now. 757 00:39:10,680 --> 00:39:12,600 Speaker 2: And much of this also has to do with this 758 00:39:12,680 --> 00:39:14,799 Speaker 2: new aversion that the market seems to have with all 759 00:39:14,840 --> 00:39:18,120 Speaker 2: things data center. The mag seven's been having a real 760 00:39:18,160 --> 00:39:22,160 Speaker 2: tough time here. Is this rotation into something I guess 761 00:39:22,200 --> 00:39:26,759 Speaker 2: we're calling quality, real and sustainable is the RSP we 762 00:39:26,760 --> 00:39:27,960 Speaker 2: should be looking at. 763 00:39:28,160 --> 00:39:29,640 Speaker 15: You know, I think they will get a lot of 764 00:39:29,680 --> 00:39:32,319 Speaker 15: the answers to these questions in the coming weeks when 765 00:39:32,360 --> 00:39:35,040 Speaker 15: we get the earnings reports and the conference calls from 766 00:39:35,520 --> 00:39:38,719 Speaker 15: the mag seven themselves to see what kind of pipeline 767 00:39:38,719 --> 00:39:40,960 Speaker 15: they're talking about, what kind of demand they're talking about. 768 00:39:41,000 --> 00:39:44,480 Speaker 15: I mean, this rotation certainly is real, and it's not 769 00:39:44,560 --> 00:39:46,919 Speaker 15: just this year. It sort of started late last year. 770 00:39:47,400 --> 00:39:49,560 Speaker 15: That said, there are pockets of the AI trade that 771 00:39:49,600 --> 00:39:52,520 Speaker 15: are still booming. Sand Disk is up, you know, a ton, 772 00:39:52,640 --> 00:39:56,840 Speaker 15: oh my god. Yeah, So it's not a wholesale rotation 773 00:39:56,920 --> 00:39:59,520 Speaker 15: out of it, but you know, people are looking for 774 00:39:59,560 --> 00:40:03,000 Speaker 15: the sort of more valued, undervalued stocks, and there's you know, 775 00:40:03,040 --> 00:40:07,400 Speaker 15: the AI trade sort of spills over into construction stocks 776 00:40:07,400 --> 00:40:09,799 Speaker 15: and you know those raw materials. 777 00:40:09,880 --> 00:40:11,319 Speaker 3: You know, you need copper, you need steel. 778 00:40:11,320 --> 00:40:14,640 Speaker 15: You look at the metal prices going crazy, So you 779 00:40:14,640 --> 00:40:17,759 Speaker 15: know there is a spillover beyond the meg seven to 780 00:40:17,840 --> 00:40:18,879 Speaker 15: the AI trade as well. 781 00:40:20,040 --> 00:40:22,760 Speaker 3: Really fascinating as always to spend some time with Mike Regan. 782 00:40:22,800 --> 00:40:23,279 Speaker 3: Thank you, Mike. 783 00:40:23,800 --> 00:40:26,239 Speaker 2: Great to see you from World's headquarters in New York. 784 00:40:26,560 --> 00:40:29,960 Speaker 2: And boy, isn't that the truth? These storage companies are incredible. 785 00:40:30,000 --> 00:40:32,080 Speaker 2: Sand Disc just keeps on rising. We've got a new 786 00:40:32,080 --> 00:40:35,760 Speaker 2: all time high today. Same from Micron. Thanks for listening 787 00:40:35,840 --> 00:40:39,120 Speaker 2: to the Balance of Power podcast. Make sure to subscribe 788 00:40:39,200 --> 00:40:41,880 Speaker 2: if you haven't already, at Apple, Spotify, or wherever you 789 00:40:41,920 --> 00:40:44,680 Speaker 2: get your podcasts, and you can find us live every 790 00:40:44,719 --> 00:40:48,239 Speaker 2: weekday from Washington, DC at New Time Eastern at Bloomberg 791 00:40:48,320 --> 00:40:49,000 Speaker 2: dot com.