1 00:00:04,200 --> 00:00:08,520 Speaker 1: Broadcasting live to New York, Bloomberg eleventh Rio to Washington, 2 00:00:08,600 --> 00:00:13,560 Speaker 1: d C, Bloomber to Boston, Bloomberg twelve hundred to San Francisco, 3 00:00:13,720 --> 00:00:18,159 Speaker 1: Bloomberg to the Country series Exam General one nine and 4 00:00:18,280 --> 00:00:21,600 Speaker 1: around the globe the Bloomberg Radio, Plum, DAP and Bloomberg 5 00:00:21,600 --> 00:00:26,600 Speaker 1: dot Com. This is taking stock a political earthquake. That's 6 00:00:26,760 --> 00:00:30,440 Speaker 1: what Britain's vote to leave the European Union is being 7 00:00:30,560 --> 00:00:35,320 Speaker 1: likened to, with after shocks hitting markets policy makers. In fact, 8 00:00:35,360 --> 00:00:39,280 Speaker 1: it has led Prime Minister David Cameron to resign. I 9 00:00:39,360 --> 00:00:42,839 Speaker 1: want to know now, Pam, what next? What is the 10 00:00:42,920 --> 00:00:45,920 Speaker 1: next step for the for the UK, not just internally 11 00:00:45,920 --> 00:00:49,320 Speaker 1: but externally well internally it would have to be passed 12 00:00:49,320 --> 00:00:52,800 Speaker 1: by Westminster, by Parliament. And are an estimated one hundred 13 00:00:52,800 --> 00:00:55,240 Speaker 1: and sixty of the six hundred and fifty MP's elected 14 00:00:55,320 --> 00:00:58,320 Speaker 1: last year they want Britain to leave. The majority want 15 00:00:58,360 --> 00:01:01,160 Speaker 1: them to stay. So we'll find out more coming up 16 00:01:01,240 --> 00:01:03,240 Speaker 1: right now, let's go to Charlie Pellegan the Bloomberg news 17 00:01:03,280 --> 00:01:06,679 Speaker 1: room with the Bloomberg Business flag political earthquake. Indeed, markets 18 00:01:06,720 --> 00:01:10,000 Speaker 1: are tumbling, and thank you very much, Pim, Thank you, Kathleen, 19 00:01:10,040 --> 00:01:14,559 Speaker 1: the DAL, the SMPNAZDAK all declining U S stocks, joining 20 00:01:14,560 --> 00:01:17,440 Speaker 1: a sell off in global risk assets on speculation that 21 00:01:17,480 --> 00:01:20,600 Speaker 1: the UK decision to leave the European Union would hamper 22 00:01:20,760 --> 00:01:24,480 Speaker 1: worldwide growth. The victory of the Leave campaign stunned many 23 00:01:24,520 --> 00:01:27,399 Speaker 1: investors who put wagers on risk your assets over the 24 00:01:27,400 --> 00:01:30,920 Speaker 1: past week, as book makers odds suggested the chance of 25 00:01:30,920 --> 00:01:34,119 Speaker 1: a so called Brexit was less than one in four. Well, 26 00:01:34,120 --> 00:01:37,240 Speaker 1: now that the vote is done, Jacob Kirkergard, senior fellow 27 00:01:37,240 --> 00:01:41,240 Speaker 1: at the Peterson Institute for International Economics, is now the 28 00:01:41,240 --> 00:01:43,760 Speaker 1: Britain has voted to leave, don't let the door you 29 00:01:43,840 --> 00:01:46,120 Speaker 1: know the rest. I certainly believe that it should be 30 00:01:46,200 --> 00:01:49,000 Speaker 1: handed as quickly as possible because their long word draws 31 00:01:49,000 --> 00:01:54,320 Speaker 1: on uncertainty will weigh on not just the UK economy, 32 00:01:54,360 --> 00:01:58,160 Speaker 1: but on the entire European economy. Uh and I think, 33 00:01:58,240 --> 00:02:02,720 Speaker 1: quite frankly believe that the once again David Cameron has 34 00:02:02,760 --> 00:02:08,440 Speaker 1: put basically conservative party politics over the broader destiny of 35 00:02:08,880 --> 00:02:12,320 Speaker 1: European integration, which is something that isn't gonna endear him 36 00:02:12,440 --> 00:02:14,560 Speaker 1: very much to the other leaders that he's going to 37 00:02:14,639 --> 00:02:16,720 Speaker 1: be meeting with in just a few days and We'll 38 00:02:16,760 --> 00:02:18,880 Speaker 1: have more coming up in just a moment on what's 39 00:02:18,960 --> 00:02:22,000 Speaker 1: next for the United Kingdom post Brexit. Here's where we 40 00:02:22,040 --> 00:02:24,840 Speaker 1: stand in terms of US equities bouncing along the bottom 41 00:02:24,960 --> 00:02:28,040 Speaker 1: right now, with the SMP down seventy two thousand, forty two, 42 00:02:28,320 --> 00:02:32,079 Speaker 1: a drop of three point three percent down, industrials down 43 00:02:32,120 --> 00:02:34,600 Speaker 1: five hundred seventy eight, a drop there of three point 44 00:02:34,639 --> 00:02:38,919 Speaker 1: two percent, gold surging four point four percent, and a 45 00:02:39,000 --> 00:02:41,400 Speaker 1: two thirty two on Wall Street. Now, let's take a 46 00:02:41,400 --> 00:02:45,400 Speaker 1: look at other news from around the world. Thank you, 47 00:02:45,480 --> 00:02:49,560 Speaker 1: Charlie from the Bloomberg Newsroom. I'm Julie Hyman. President Obama 48 00:02:49,639 --> 00:02:52,280 Speaker 1: reacting moments ago to the British vote to leave the 49 00:02:52,280 --> 00:02:55,320 Speaker 1: European Union. I do think that yesterday's vote speaks to 50 00:02:55,480 --> 00:02:59,079 Speaker 1: the ongoing changes and challenges that are raised by globalization. 51 00:03:00,120 --> 00:03:03,560 Speaker 1: But while the UK's relationship where the EU will change, 52 00:03:04,360 --> 00:03:07,240 Speaker 1: one thing that will not change is the special relationship 53 00:03:07,320 --> 00:03:10,400 Speaker 1: that exists between our two nations. Donald Trump is calling 54 00:03:10,440 --> 00:03:13,799 Speaker 1: the British vote a positive one, despite concern and financial 55 00:03:13,800 --> 00:03:16,799 Speaker 1: markets in Scotland for the opening of a Trump golf course. 56 00:03:16,840 --> 00:03:20,320 Speaker 1: The likely Republican nominee said he saw parallels between frustrations 57 00:03:20,360 --> 00:03:23,920 Speaker 1: expressed by British voters. That's really what's happening in the 58 00:03:24,000 --> 00:03:26,680 Speaker 1: United States, and I think you see that, and that's 59 00:03:26,720 --> 00:03:29,480 Speaker 1: what's happening in many other places in the world. They're 60 00:03:29,480 --> 00:03:31,400 Speaker 1: tired of it. They want to take their countries back. 61 00:03:33,000 --> 00:03:36,600 Speaker 1: Democratic presumptive nominee Hillary Clinton says we need to respect 62 00:03:36,600 --> 00:03:39,520 Speaker 1: the choice the United Kingdom has made. Clinton also said 63 00:03:39,520 --> 00:03:41,600 Speaker 1: our first task has to be to make sure the 64 00:03:41,640 --> 00:03:45,240 Speaker 1: economic uncertainty created by these events does not hurt working 65 00:03:45,280 --> 00:03:49,080 Speaker 1: families here in the United States. Scottish First Minister Nicola 66 00:03:49,120 --> 00:03:52,560 Speaker 1: Sturgeon said it is highly unlikely Scotland will hold a 67 00:03:52,640 --> 00:03:56,560 Speaker 1: second independence referendum following Britain's decision to withdraw from the EU. 68 00:03:57,040 --> 00:04:02,040 Speaker 1: Six of Scottish voters backed remaining in the EU. City 69 00:04:02,040 --> 00:04:04,880 Speaker 1: officials have slapped the Trump organization with the ten thousand 70 00:04:04,960 --> 00:04:08,240 Speaker 1: dollar fine after company representatives missed a hearing to resolve 71 00:04:08,320 --> 00:04:11,400 Speaker 1: zoning violations. A Trump attorney was supposed to attend an 72 00:04:11,440 --> 00:04:15,360 Speaker 1: administrative hearing yesterday over violations of a special permit, but 73 00:04:15,560 --> 00:04:18,200 Speaker 1: no one showed up. The Trump executive says the company 74 00:04:18,320 --> 00:04:21,440 Speaker 1: is asking for a new hearing. Global News twenty four 75 00:04:21,440 --> 00:04:23,520 Speaker 1: hours a day, powered by more than twenty six hundred 76 00:04:23,560 --> 00:04:26,520 Speaker 1: journalists and analysts and more than one twenty countries from 77 00:04:26,560 --> 00:04:30,200 Speaker 1: the Bloomberg newsroom. I'm Julie Hyman. This is Bloomberg, Charlie, 78 00:04:30,600 --> 00:04:33,039 Speaker 1: and we thank you. In the SMP, five hundred indecks 79 00:04:33,120 --> 00:04:36,640 Speaker 1: just turning negative for the year, down point one percent 80 00:04:36,800 --> 00:04:39,920 Speaker 1: year to date. Down Jones Industrial Average now unchanged year 81 00:04:39,960 --> 00:04:43,840 Speaker 1: to date. Recapping the numbers SMP falling seventy two points 82 00:04:43,839 --> 00:04:47,039 Speaker 1: to two thousand forty one, a drop there of three 83 00:04:47,160 --> 00:04:52,200 Speaker 1: point four percent. I'm Charlie Pellatar. Brexit coverage continues, and 84 00:04:52,240 --> 00:04:57,279 Speaker 1: that's a Bloomberg business flash. This is taking stock with 85 00:04:57,440 --> 00:05:02,680 Speaker 1: Kathleen Hayes and Pim Fox on Bloomberg. Britten's political earthquake 86 00:05:03,000 --> 00:05:08,480 Speaker 1: has created after shocks, buffeting markets, policymakers, political upheaval in London. 87 00:05:08,520 --> 00:05:13,200 Speaker 1: The pound now at its lowest level since Prime Minister 88 00:05:13,440 --> 00:05:18,000 Speaker 1: David Cameron resigning. Joining us now to put this in perspective, 89 00:05:18,080 --> 00:05:20,200 Speaker 1: not only what happened, but where we go next. John 90 00:05:20,240 --> 00:05:23,720 Speaker 1: Michael Thwaite, editor in chief for Bloomberg Editorial and of 91 00:05:23,760 --> 00:05:28,440 Speaker 1: course a man who knows the UK very well. Yes, 92 00:05:28,960 --> 00:05:31,280 Speaker 1: well you know this. It's funny even if you're on 93 00:05:31,320 --> 00:05:33,920 Speaker 1: the side that wanted to leave. Somehow, this doesn't feel 94 00:05:33,960 --> 00:05:38,200 Speaker 1: like a day when people are waving flags and and celebrating, 95 00:05:38,240 --> 00:05:40,120 Speaker 1: because even if you wanted to go and imagine you 96 00:05:40,240 --> 00:05:44,279 Speaker 1: just you, you must feel something kind of somber, and 97 00:05:44,279 --> 00:05:46,560 Speaker 1: I think there is that. Actually, what's interesting is even 98 00:05:46,600 --> 00:05:49,040 Speaker 1: in Boris Johnson, one of the great jokers, you know, 99 00:05:49,080 --> 00:05:51,960 Speaker 1: he made a very kind of dead pan speech, not 100 00:05:52,120 --> 00:05:55,320 Speaker 1: least also saying let's not rush into this, Let's do 101 00:05:55,400 --> 00:05:58,520 Speaker 1: this in three four months time after we've selected a 102 00:05:58,520 --> 00:06:02,080 Speaker 1: new Tory leader, records him. But then then let's go 103 00:06:02,080 --> 00:06:05,120 Speaker 1: and approach Brussels. And there's that side. But I rememb 104 00:06:05,120 --> 00:06:07,360 Speaker 1: watching the results last night with a young guy who 105 00:06:07,400 --> 00:06:10,560 Speaker 1: was sort of said he was mildly pro Brexit, and 106 00:06:10,560 --> 00:06:12,760 Speaker 1: then after once it's sort of sunk in, he's only 107 00:06:12,760 --> 00:06:15,000 Speaker 1: thought I might lose my job. I might You know 108 00:06:15,080 --> 00:06:17,279 Speaker 1: that all those things are playing out at the moment, 109 00:06:17,839 --> 00:06:20,040 Speaker 1: and you even see an attempt to sort of put 110 00:06:20,040 --> 00:06:21,960 Speaker 1: around the petition to say maybe there should be a 111 00:06:21,960 --> 00:06:24,680 Speaker 1: second referendum. All those things are out there at the moment, 112 00:06:25,040 --> 00:06:27,800 Speaker 1: and people, I think people are still coming to terms 113 00:06:27,800 --> 00:06:31,880 Speaker 1: with it. Explain if you can what happens next, particularly 114 00:06:31,880 --> 00:06:34,880 Speaker 1: in terms of Parliament. Yes, I should say what what 115 00:06:34,960 --> 00:06:37,880 Speaker 1: happens is the referendum has to do with Parliament, so 116 00:06:37,960 --> 00:06:40,239 Speaker 1: it has to do with the recommendation de Parliament. Parliament 117 00:06:40,240 --> 00:06:45,240 Speaker 1: then has to vote basically to take file effect what 118 00:06:45,240 --> 00:06:49,200 Speaker 1: they call Section fifty, which is part of the part 119 00:06:49,200 --> 00:06:51,800 Speaker 1: of the European Union's constitution. It basically says, if you 120 00:06:51,839 --> 00:06:54,159 Speaker 1: want to leave, you know, you apply under this and 121 00:06:54,200 --> 00:06:58,120 Speaker 1: then there's a two year um negotiating period. Now, the 122 00:06:58,120 --> 00:07:01,640 Speaker 1: obvious point is that you could start negotiating before you 123 00:07:01,720 --> 00:07:04,000 Speaker 1: do that, and so what is happening at the moment 124 00:07:04,240 --> 00:07:06,760 Speaker 1: is Angler Merkel is a bit like a rather angry 125 00:07:06,760 --> 00:07:10,080 Speaker 1: spouse who's just saying, forget it, let's get a quickie 126 00:07:10,080 --> 00:07:12,200 Speaker 1: divorce and get out of this. By contrast, on the 127 00:07:12,280 --> 00:07:16,160 Speaker 1: other side, you've got, as I said, Boris Johnson and 128 00:07:16,200 --> 00:07:18,320 Speaker 1: also the general the British thing is no, no, let's 129 00:07:18,400 --> 00:07:20,200 Speaker 1: let's kind of get an idea where things are and 130 00:07:20,200 --> 00:07:25,800 Speaker 1: then we're coming. We won't petition until September October, and 131 00:07:26,960 --> 00:07:29,760 Speaker 1: so you've got this process that could go on to 132 00:07:30,040 --> 00:07:32,640 Speaker 1: three years and that that actually is in some ways 133 00:07:32,720 --> 00:07:36,080 Speaker 1: quite worrying because it's over that period that a lot 134 00:07:36,080 --> 00:07:39,000 Speaker 1: of companies will start to decide is it worth investing 135 00:07:39,000 --> 00:07:42,880 Speaker 1: in Britain at this precise moment? Would you buy real 136 00:07:43,000 --> 00:07:44,800 Speaker 1: estate in London? It could be one of the great 137 00:07:44,800 --> 00:07:47,080 Speaker 1: buys of our time, but it's it could also be 138 00:07:47,120 --> 00:07:49,560 Speaker 1: something which everyone thinks is about to go down, and 139 00:07:49,600 --> 00:07:52,360 Speaker 1: what happens with that uncertainty continues and so on and 140 00:07:52,400 --> 00:07:54,520 Speaker 1: so on. So how does how is this go with 141 00:07:54,560 --> 00:07:57,400 Speaker 1: the rest of Europe? Does it do? Do? Do you? Germans? 142 00:07:57,440 --> 00:07:59,720 Speaker 1: Does do the Germans? And the other The most powerful 143 00:07:59,800 --> 00:08:01,680 Speaker 1: kind is there to say, well, gosh, I guess we 144 00:08:01,840 --> 00:08:05,040 Speaker 1: better like help them. We connact angry, but help this 145 00:08:05,240 --> 00:08:08,720 Speaker 1: not fall apart and and and enter these negotiations in 146 00:08:08,760 --> 00:08:12,760 Speaker 1: that spirit or this story that um let's see, it's 147 00:08:12,760 --> 00:08:16,800 Speaker 1: a senior Spanish minister, according to our Bloomberg News stories, 148 00:08:16,840 --> 00:08:19,280 Speaker 1: saying that Britain leaving the European Union has opened up 149 00:08:19,280 --> 00:08:23,960 Speaker 1: a new panorama on the status of Gibraltar. He called 150 00:08:23,960 --> 00:08:26,840 Speaker 1: on Britain to enter negotiations on joint sovereignty. I mean 151 00:08:27,440 --> 00:08:28,720 Speaker 1: there will be a lot of things that suddenly go 152 00:08:28,800 --> 00:08:30,600 Speaker 1: up in the air against the background of that, because 153 00:08:30,600 --> 00:08:32,920 Speaker 1: I think you brought her way back in the nineteen seventies. 154 00:08:33,040 --> 00:08:35,560 Speaker 1: Is one of the issues between Britain and the EU. 155 00:08:35,679 --> 00:08:39,760 Speaker 1: When when when when Britain joined I think more seriously 156 00:08:39,840 --> 00:08:42,920 Speaker 1: or or or certainly a bigger issue. Look at what 157 00:08:43,200 --> 00:08:47,000 Speaker 1: is happening between France and Germany. You know, Germany has 158 00:08:47,040 --> 00:08:49,320 Speaker 1: tended to take the following attitude that it is more 159 00:08:49,400 --> 00:08:52,720 Speaker 1: pro the British view of Europe. Wants reforms, it wants 160 00:08:52,720 --> 00:08:54,920 Speaker 1: things to get on, it wants to do stuff, and 161 00:08:54,920 --> 00:08:59,080 Speaker 1: why isn't France doing stuff because it isn't. And Furnish, 162 00:08:59,080 --> 00:09:02,600 Speaker 1: by contrast, have been slightly, kind of not entirely enthusiastic 163 00:09:02,600 --> 00:09:05,679 Speaker 1: about the British participation in the EU. I think, by 164 00:09:05,720 --> 00:09:08,160 Speaker 1: one measure, even more French people wanted the British out 165 00:09:08,200 --> 00:09:11,880 Speaker 1: than Britain's wanted the British out. But the French starting 166 00:09:11,920 --> 00:09:14,959 Speaker 1: point is let's just say goodbye to Britain and get 167 00:09:14,960 --> 00:09:19,079 Speaker 1: them out and warn other people by treating Britain toughly. 168 00:09:19,280 --> 00:09:22,800 Speaker 1: We put it that way, But then the question about 169 00:09:22,840 --> 00:09:25,400 Speaker 1: how much reform goes with that is unclear. On the 170 00:09:25,480 --> 00:09:28,480 Speaker 1: German side, I think on this thing, they are more 171 00:09:28,520 --> 00:09:30,640 Speaker 1: likely to be a little bit similar to the French 172 00:09:30,720 --> 00:09:33,360 Speaker 1: on one thing on the treat them tough, because I 173 00:09:33,360 --> 00:09:36,000 Speaker 1: think Anglo Merkele's starting point is she doesn't want this 174 00:09:36,080 --> 00:09:39,400 Speaker 1: to happen again. And what better way of giving a 175 00:09:39,440 --> 00:09:42,880 Speaker 1: reason not to do this to the Netherlands, to any 176 00:09:42,920 --> 00:09:45,280 Speaker 1: of the other people who might go, than for the 177 00:09:45,280 --> 00:09:49,120 Speaker 1: British to get a conspicuously bad deal. Pick up on that, 178 00:09:49,200 --> 00:09:54,640 Speaker 1: because the political implications for France with the far right 179 00:09:55,880 --> 00:10:00,200 Speaker 1: National Front Marine leper is that going is this this 180 00:10:00,280 --> 00:10:03,800 Speaker 1: vote going to help her campaign very much? So, I 181 00:10:03,840 --> 00:10:06,440 Speaker 1: mean she is that. All across Europe you have these parties, 182 00:10:06,960 --> 00:10:10,600 Speaker 1: some of them on the more extreme side, others increasingly mainstream. 183 00:10:10,679 --> 00:10:12,560 Speaker 1: She is a good example, you know, she has She 184 00:10:12,679 --> 00:10:16,560 Speaker 1: is almost certain under current polls to reach the last 185 00:10:16,640 --> 00:10:18,839 Speaker 1: round of the presidential election in France because she will 186 00:10:18,840 --> 00:10:21,320 Speaker 1: be that she will be the first candidate, and the 187 00:10:21,400 --> 00:10:23,719 Speaker 1: general view they have a runoff which they come down 188 00:10:23,760 --> 00:10:26,360 Speaker 1: to the two most popular candidates. The general view is 189 00:10:26,360 --> 00:10:28,160 Speaker 1: that you know, she will get to the vote and 190 00:10:28,200 --> 00:10:31,840 Speaker 1: whoever gets five or whatever will be the other candidate 191 00:10:32,000 --> 00:10:35,760 Speaker 1: in a sort of multi party m a multi candidate system. 192 00:10:35,840 --> 00:10:38,760 Speaker 1: But for her, this backs up her idea that Europe 193 00:10:38,800 --> 00:10:41,480 Speaker 1: is heading the wrong direction. She's also talking about leaving it. 194 00:10:41,520 --> 00:10:43,439 Speaker 1: You know this, this is there are a lot of 195 00:10:43,480 --> 00:10:46,480 Speaker 1: other people out there. The level to which Europe as 196 00:10:46,480 --> 00:10:49,760 Speaker 1: a whole is coming undone is there. Thank you very 197 00:10:49,840 --> 00:10:52,040 Speaker 1: much for spending time with this. John Mickle twaite, editor 198 00:10:52,080 --> 00:10:56,880 Speaker 1: in chief, Bloomberg Editorial. More Brexit coverage coming up on 199 00:10:56,960 --> 00:11:02,320 Speaker 1: Bloomberg Radio. It Hampton's Commuter Minute is brought to you 200 00:11:02,360 --> 00:11:06,119 Speaker 1: by Landrover. Visit your local Tri state area Landrover retailer 201 00:11:06,360 --> 00:11:11,280 Speaker 1: for special lease and finance offers. Landrover above and beyond