WEBVTT - Surveillance: Trump’s Protest Crisis With Stavridis

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<v Speaker 1>Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jai Ley.

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<v Speaker 1>We bring you insight from the best in economics, finance, investment,

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<v Speaker 1>and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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<v Speaker 1>Bloomberg dot com, and of course on the Bloomberg David

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<v Speaker 1>Lee Bowoods joins us right now. He is with JP

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<v Speaker 1>Morgan Asset Management. Good morning, tell us simply how you

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<v Speaker 1>have changed your asset allocation? How do you change your

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<v Speaker 1>equity belief after up? So, you know, I think what's

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<v Speaker 1>what's most interesting from our vantage point is that we

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<v Speaker 1>haven't really changed things too much. Um. From the beginning,

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<v Speaker 1>from you know, the start of April, we were really

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<v Speaker 1>of the view that we wanted to center portfolios in

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<v Speaker 1>higher quality assets like technology, like healthcare, but we didn't

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<v Speaker 1>want to completely abandon cyclicality because if markets came back quickly,

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<v Speaker 1>we wanted to participate. UM. We obviously haven't been fully

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<v Speaker 1>positioned with a cyclical tilt, so we have been under

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<v Speaker 1>performing a bit over the past couple of days. But

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<v Speaker 1>some of our more value cyclical exposure to things like

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<v Speaker 1>financials has been helping. And so I think that you know,

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<v Speaker 1>when we look at where the market is today, Clearly

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<v Speaker 1>things have moved very far, very fast. Um there there

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<v Speaker 1>is room for markets to continue climbing higher, But I

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<v Speaker 1>think now is probably the wrong time to materially change

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<v Speaker 1>your asset allocation. Right, maybe a month and a half

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<v Speaker 1>ago this was the conversation to have. But I think

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<v Speaker 1>that the risk reward has continued to deteriorate here and

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<v Speaker 1>that makes me a little bit nervous about the direction

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<v Speaker 1>of travel for markets in the coming weeks. And it's

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<v Speaker 1>sometimes you've just got to take a step back and

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<v Speaker 1>look at the position we're in right now. If I

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<v Speaker 1>teld you twelve months ago that in twenty twenty we

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<v Speaker 1>would have a job sprint of negative two points seven

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<v Speaker 1>six million, and on the same day people would call

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<v Speaker 1>it a big bait and the SMP five hundred would

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<v Speaker 1>go through, there is no way that you would believe

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<v Speaker 1>me that that is what would happen. That's what happened

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<v Speaker 1>in the last twenty four as daven, How do you

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<v Speaker 1>explain that to clients? You know, I think that it's

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<v Speaker 1>important to recognize that there's there's a real technical nature

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<v Speaker 1>to everything that's going on here, and market structure is

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<v Speaker 1>just very different today than it has been historically, and

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<v Speaker 1>part of what we think has driven this big rebound.

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<v Speaker 1>You know, when we look at get cash balances of

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<v Speaker 1>non bank investors and things like that, they they still

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<v Speaker 1>look underweight equities. But where we've really seen money come

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<v Speaker 1>back into the market is through the more systematic strategies.

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<v Speaker 1>And so we had this enormous spike in volatility back

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<v Speaker 1>in the middle of March, and as volatility has trended

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<v Speaker 1>lower over the past couple of weeks, you've seen signals

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<v Speaker 1>triggered that bring the c t A s and the

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<v Speaker 1>momentum traders, and the risk parity funds and the ball

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<v Speaker 1>control funds back into the market. So I think that,

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<v Speaker 1>you know, as quickly as we went down, it actually,

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<v Speaker 1>with some hindsight doesn't necessarily surprise me the speed at

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<v Speaker 1>which things have bounced back. But I do think that

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<v Speaker 1>this is a function of the way that markets are

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<v Speaker 1>structured today, um, and that's created a pretty significant disconnect, John,

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<v Speaker 1>to your point between what we're seeing in the economic

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<v Speaker 1>data and the performance of equity markets, particularly US equity markets,

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<v Speaker 1>which have really led the charge here. All right, David,

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<v Speaker 1>So how long can these technical factors overwhelm the fundamental factors,

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<v Speaker 1>which are an increasing bankruptcy rate and increasing unemployment rate,

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<v Speaker 1>and concern that we could get some sort of W

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<v Speaker 1>shaped recovery or some sort of a second wave of

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<v Speaker 1>the virus. I'm just thinking, for example, high yield bond

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<v Speaker 1>yields right now are within one and a half percentage

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<v Speaker 1>points from the all time low at a time when

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<v Speaker 1>the bankruptcy to rate is climbing beyond what we saw

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<v Speaker 1>in two thousand and nine, How does this make sense

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<v Speaker 1>to So, you know, I think the market is very

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<v Speaker 1>much focused on on direction rather than level, and with

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<v Speaker 1>things reopening, that does seem to be overwhelming the market's

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<v Speaker 1>ability to look forward. You know, I acknowledge everything you said.

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<v Speaker 1>We've seen commercial mortgage back, UH security delinquency rates begin

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<v Speaker 1>to pick up. I mean, there there's a lot of

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<v Speaker 1>evidence of the stress in the economy, but the market

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<v Speaker 1>really seems much more focused on the direction of travel

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<v Speaker 1>of the virus itself and the ability of the economy

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<v Speaker 1>to reopen. So, you know, to my mind, there there

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<v Speaker 1>are really two big risks here that investors need to monitor.

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<v Speaker 1>The first is a potential for a second wave, and

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<v Speaker 1>I think it's an unfortunate reality given the the protests

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<v Speaker 1>over the past couple of days here in the US

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<v Speaker 1>that you know, to my mind, that risk has increased

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<v Speaker 1>as social distancing seems to have been put off to

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<v Speaker 1>the side temporarily. But the other thing that I think

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<v Speaker 1>we need to pay attention to, and you guys were

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<v Speaker 1>alluding to it a bit earlier, is simply the the

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<v Speaker 1>amount of stimulus that's been pumped into the economy, and

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<v Speaker 1>more importantly, the expectation that there's more stimulus coming. You know,

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<v Speaker 1>we have the e c B later today. The ECB

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<v Speaker 1>historically has tended to to pull out the bazuka when

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<v Speaker 1>things aren't looking good, not when we're in the midst

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<v Speaker 1>of a rally, and so it'll be really interesting to

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<v Speaker 1>see what happens in just under an hour here and

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<v Speaker 1>whether they go through and increase the size of the

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<v Speaker 1>of the emergency programs or whether they hold off of it.

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<v Speaker 1>But I think that there's an inherent expectation on the

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<v Speaker 1>part of the market that there's more stimulus coming. It's

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<v Speaker 1>a fantastic to catch up with you as always, David.

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<v Speaker 1>Believe it's the of JP Morgan Asset Management joining us

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<v Speaker 1>right now, getting right to it. On this busy, busy morning,

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<v Speaker 1>the Lieutenant Governor of the Empire State, Kathy Hockl, joins

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<v Speaker 1>us UH this morning. Kathy, what are you going to

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<v Speaker 1>work on today to move the trend of forward? We've

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<v Speaker 1>gone from rioting and louding to what was called relative

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<v Speaker 1>calm to an even calmer Wednesday night. What is next

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<v Speaker 1>for you and the governor? Well, the next step is

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<v Speaker 1>to really address the concerns of the community that have

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<v Speaker 1>finally come into a forefront. And it's a it's a

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<v Speaker 1>tragedy that it took a the leurder of an unarmed

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<v Speaker 1>African American and the streets of Minneapolis to get the

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<v Speaker 1>national tension. But if that's what it took, it's where

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<v Speaker 1>we are today. We're talking about how we can address

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<v Speaker 1>the inherent criminal justice injustice system, and we now have

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<v Speaker 1>that that African Americans are subjected to and white Americans

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<v Speaker 1>are not, and so we have an agenda of national

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<v Speaker 1>reforms that we believe should occur. I believe that when

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<v Speaker 1>we start taking concrete action that will address many of

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<v Speaker 1>the concerns of the protesters, they will feel that they've

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<v Speaker 1>been heard. And this conversation has to begin in earnest

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<v Speaker 1>starting today, we get the banned success. Of course, we

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<v Speaker 1>have to have independent investigations of police abuse and disclosing

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<v Speaker 1>disciplinary erected. These are things that the Governor and I

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<v Speaker 1>have proposed in the state of New York and they

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<v Speaker 1>should be national. So that's what we did. We start

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<v Speaker 1>cleaning up the streets, we start giving people hope that

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<v Speaker 1>we're going to go forward and uh, and we also

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<v Speaker 1>have to make some major systemic changes in order to

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<v Speaker 1>take this national moment that has focused the world on

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<v Speaker 1>what's happening in our country and come out and better

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<v Speaker 1>for it. Lieutenant Governor, it is an ageless tension between

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<v Speaker 1>governors and mayors. It goes back in New York State,

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<v Speaker 1>at least to Governor Clinton in the three day trip

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<v Speaker 1>up the Hudson to Albany. That doesn't happen now now

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<v Speaker 1>it's a media give us an update on the tension

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<v Speaker 1>between your offices and Mayor de Blasio of New York City.

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<v Speaker 1>There's certainly issue by issuing. Literally just a few days ago,

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<v Speaker 1>Mayor de Blasio did a joint press conference with the

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<v Speaker 1>Governor to talk about how far we've come in in

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<v Speaker 1>eradicating the virus and how we're ready to open New

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<v Speaker 1>York City the first phase starting literally on Monday, which

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<v Speaker 1>is just so such such good news for New Yorkers

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<v Speaker 1>that are desperate to start getting back to some semas

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<v Speaker 1>the normal. So they truly do have a working relationship. Uh.

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<v Speaker 1>They can disagree with each other, everybody can disagree, but

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<v Speaker 1>when it comes down to getting the job done to

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<v Speaker 1>the people of New York, Uh, they're able to get

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<v Speaker 1>it done. And I think the evidence is what we've

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<v Speaker 1>what we've been able to do with eradicating working on

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<v Speaker 1>the coronavirus together. That was intensive teamwork from the states

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<v Speaker 1>and city officials, and our teams have worked together for

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<v Speaker 1>the last three months on a day to day basis.

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<v Speaker 1>So it's really a case by case, Lieutenant Governor. Let's

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<v Speaker 1>talk more about the reopening that is supposed to happen

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<v Speaker 1>on Monday. There's a question of if you reopen, will

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<v Speaker 1>they come? And a big, big part of that question

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<v Speaker 1>is the m t A, the subway system. Will it

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<v Speaker 1>be prepared to take an increased number of writers with

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<v Speaker 1>respect to hygiene as well as service. How close are

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<v Speaker 1>we to that? Yes, And you're absolutely right that we

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<v Speaker 1>knew that we could not reopen society, reopen economy without

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<v Speaker 1>the ability to get people safely to their jobs. And yes,

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<v Speaker 1>we've had the scale down service and we've had the

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<v Speaker 1>subway closed from from the middle of the night down

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<v Speaker 1>to five am in order to do unpresented cleaning. You know,

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<v Speaker 1>you thought there are subways need to be cleaned, that

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<v Speaker 1>they have been uh sanitized top to bottom by individuals

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<v Speaker 1>that have just been working slowly through the night. So

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<v Speaker 1>we're going to continue those processes. We're going to add

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<v Speaker 1>more trains. We know that they'll be increased capacity. But

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<v Speaker 1>people are going to be anxious. You're absolutely right. Uh,

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<v Speaker 1>we we want they cannot get on unless they're wearing

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<v Speaker 1>a mask. We hope that people be using hand sanitizers

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<v Speaker 1>and you know, to the extent possible social distinct. But

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<v Speaker 1>if you have the mask on you, it's it's we

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<v Speaker 1>now know that that will protect you. Again, there's more

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<v Speaker 1>information out there than we didn't even have three months ago.

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<v Speaker 1>And three months ago we did not know that mask

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<v Speaker 1>was the primary way that you can stop to spread.

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<v Speaker 1>You know, people said, is all on surfaces. Well, we're

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<v Speaker 1>learning a lot and we're cleaning the surfaces requiring masks,

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<v Speaker 1>and we will get people to their jobs in New

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<v Speaker 1>York because when we start opening, it's going to be

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<v Speaker 1>in phased, a phased approach where it's manufacturing, construction, some

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<v Speaker 1>very limited retail at first, so people start getting afflimated

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<v Speaker 1>to the new system. Then Phase two, which most of

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<v Speaker 1>upstate New York or is in right now. I'm in

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<v Speaker 1>Western New York and we just started Phase two this week.

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<v Speaker 1>That's all retails, shopping, it's office spaces. I think you're

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<v Speaker 1>gonna see a lot more of that. But but truthfully,

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<v Speaker 1>we've talked about this on this show before. There's going

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<v Speaker 1>to be a different mindset when people have the ability

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<v Speaker 1>to continue working from home, at least perhaps for a

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<v Speaker 1>couple more months. I think it's going to be a

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<v Speaker 1>more gradual opening that people won't all of a sudden

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<v Speaker 1>descend on the subway system and overloaded. But if that

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<v Speaker 1>becomes the case, we're prepared, Lieutenant Governor. I just wanted

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<v Speaker 1>to wrap up the conversation by talking about lessons learned

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<v Speaker 1>with you. I'm a guest in this country, but New

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<v Speaker 1>York City is my home, and I, like many people,

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<v Speaker 1>were shocked to see the looting that took place on

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<v Speaker 1>Fifth Avenue a place that you cannot walk down without

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<v Speaker 1>usually bumping into a police officer. What happened the other

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<v Speaker 1>night and what have we learned from it? Well, the

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<v Speaker 1>governor addressed this, and he said that, you know, reminding

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<v Speaker 1>everyone that New York City does have the finest police

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<v Speaker 1>force in the nation. They are well trained. There's thirty

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<v Speaker 1>eight thousand of them. And the question became most efficient

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<v Speaker 1>number of individuals from the police force deployed on these

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<v Speaker 1>early nights when when there was looting going on, and

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<v Speaker 1>you know, again separating out the legitimate right of individuals

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<v Speaker 1>to protest that in our country was founded on a

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<v Speaker 1>protest that I don't want to remind anyone about the

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<v Speaker 1>Boston Tea Party, but you know, we we we by

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<v Speaker 1>nature are going to stand up to oppression and stand

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<v Speaker 1>with each other when others are opposed, are pressed, and

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<v Speaker 1>that's that's in our DNA as Americans. So the right

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<v Speaker 1>to protest is something that's enshrined in our constitution. And

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<v Speaker 1>we told very dear, but that does not give anyone

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<v Speaker 1>the right to commit criminal acts, and they must be

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<v Speaker 1>stopped and we need to regain order to ensure that

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<v Speaker 1>the safety of people's lives, people's communities and their businesses.

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<v Speaker 1>So we've now regained that control. It's important, but it

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<v Speaker 1>sends a message to the rest of the world that

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<v Speaker 1>we also support legitimate protests. People have the right to

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<v Speaker 1>bring their grievances to their government, to society, and we

0:11:32.840 --> 0:11:36.040
<v Speaker 1>in government have a responsibility to address them. Lieutenant Governor

0:11:36.160 --> 0:11:38.800
<v Speaker 1>of New York, Kathy Cathy, fantastic to catchup with you.

0:11:38.800 --> 0:11:45.000
<v Speaker 1>Thank you very much for j woanting. Guess John, As

0:11:45.040 --> 0:11:47.240
<v Speaker 1>you know, there's something about the first chart you look

0:11:47.280 --> 0:11:50.720
<v Speaker 1>at every morning. This morning's chart was a standard in

0:11:50.840 --> 0:11:54.079
<v Speaker 1>force made up of a few stocks. I can't remember

0:11:54.120 --> 0:11:56.360
<v Speaker 1>their names right now, but there's four or five stocks

0:11:56.559 --> 0:12:01.120
<v Speaker 1>that make up the stocks, and everybody else is trailing behind.

0:12:01.120 --> 0:12:04.079
<v Speaker 1>I'm kidding, but we're seven percent under where we were

0:12:04.200 --> 0:12:08.160
<v Speaker 1>Valentine's Day. An extraordinary bull market off the march bottom.

0:12:08.520 --> 0:12:11.880
<v Speaker 1>Greg Bottle of BMP perry By, he knows the mathematics

0:12:11.880 --> 0:12:16.079
<v Speaker 1>of this, He knows the derivative dynamics of this equity surge. Greg,

0:12:16.160 --> 0:12:19.040
<v Speaker 1>let me begin with first principles. Is it the renewance

0:12:19.080 --> 0:12:22.280
<v Speaker 1>of a bull market? I didn't think so. This is

0:12:22.280 --> 0:12:25.400
<v Speaker 1>a very large bear market rally. But I also think

0:12:25.440 --> 0:12:27.160
<v Speaker 1>we need to think about this in terms of a

0:12:27.200 --> 0:12:29.920
<v Speaker 1>two speed recovery. You touched on it there. I think

0:12:29.960 --> 0:12:33.520
<v Speaker 1>some of these mega caps, just these oligobalistic tech companies,

0:12:33.720 --> 0:12:36.280
<v Speaker 1>could potentially be in the start of a new bull market,

0:12:36.480 --> 0:12:38.640
<v Speaker 1>while the rest of the market could still potentially have

0:12:38.640 --> 0:12:41.120
<v Speaker 1>a much more difficult time ahead of it. Greg, I

0:12:41.120 --> 0:12:43.680
<v Speaker 1>want to talk about moral hazard. We were speaking yesterday

0:12:43.720 --> 0:12:46.559
<v Speaker 1>with Bill Dudley, formerly of the New York FED, saying

0:12:46.559 --> 0:12:50.199
<v Speaker 1>that the Fed's actions do increase the risk of moral hazard.

0:12:50.240 --> 0:12:53.000
<v Speaker 1>You could say the same thing about the ECB. As

0:12:53.080 --> 0:12:56.560
<v Speaker 1>an equity strategist, How concerned are you that this moral

0:12:56.640 --> 0:13:00.240
<v Speaker 1>hazard will lead to an overshooting and a crash? Well,

0:13:00.280 --> 0:13:02.120
<v Speaker 1>I think in some ways there are echoes of the

0:13:02.200 --> 0:13:06.320
<v Speaker 1>late nineties. We had this policy response to LTCM where

0:13:06.360 --> 0:13:08.840
<v Speaker 1>the FED came in and cut rates, and really that

0:13:09.280 --> 0:13:12.000
<v Speaker 1>drove the last legs of the bubble that resulted in

0:13:12.040 --> 0:13:14.000
<v Speaker 1>the in the in the tech bubble in the late

0:13:14.080 --> 0:13:17.440
<v Speaker 1>nineties and the subsequent bear markets No. One oh two.

0:13:17.760 --> 0:13:19.920
<v Speaker 1>And clearly we have a situation where we've had real

0:13:20.080 --> 0:13:22.840
<v Speaker 1>policies shock and awe, and some of the reasons that

0:13:22.880 --> 0:13:24.800
<v Speaker 1>people are giving to invest now is that there is

0:13:24.840 --> 0:13:27.199
<v Speaker 1>no alternative, and you can't fight the FED even though

0:13:27.280 --> 0:13:29.640
<v Speaker 1>fundamentals look terrible, and I think there's a real risk

0:13:29.640 --> 0:13:32.280
<v Speaker 1>of moral hazard for equty markets. Greg. Something that Jim

0:13:32.320 --> 0:13:35.760
<v Speaker 1>Bianca Bianca Research said recently I thought was really interesting.

0:13:35.840 --> 0:13:38.280
<v Speaker 1>It's about good hearts law that once a measure becomes

0:13:38.280 --> 0:13:40.920
<v Speaker 1>a target, it ceases to be a good measure. This

0:13:40.960 --> 0:13:43.200
<v Speaker 1>whole market has become a target. What's it a measure

0:13:43.240 --> 0:13:46.800
<v Speaker 1>of anymore? Yeah. I think there's definitely a big disconnect

0:13:46.880 --> 0:13:49.400
<v Speaker 1>in between the outlook for the U S economy and

0:13:49.440 --> 0:13:52.319
<v Speaker 1>the outlook for the equity market. Tom touched there the

0:13:52.400 --> 0:13:54.679
<v Speaker 1>lack of breadth in the rally that we have a

0:13:54.679 --> 0:13:58.160
<v Speaker 1>handful of stocks now, these megacap stocks that are driving

0:13:58.160 --> 0:14:02.520
<v Speaker 1>the market directionally, and it's become increasingly devolved from the economy,

0:14:02.720 --> 0:14:04.200
<v Speaker 1>Whereas I think when you look at some of the

0:14:04.240 --> 0:14:07.160
<v Speaker 1>smaller mitcaps for example, or some of those even second

0:14:07.160 --> 0:14:09.320
<v Speaker 1>tier large cap stocks, I think they're going to be

0:14:09.400 --> 0:14:12.920
<v Speaker 1>much more wedded to the cyclical um direction of the

0:14:13.000 --> 0:14:14.839
<v Speaker 1>U S economy and the outcome that we get there.

0:14:15.120 --> 0:14:18.200
<v Speaker 1>Good battle of BMP, panaback RAG fantastic to catch up

0:14:18.200 --> 0:14:24.840
<v Speaker 1>with you, SA now without question, our interview of the day.

0:14:25.000 --> 0:14:28.480
<v Speaker 1>Admiral James Trevitis, of course, an author of any number

0:14:28.520 --> 0:14:32.040
<v Speaker 1>of books and leaders, including The Leader's Bookshelf and Former

0:14:32.480 --> 0:14:36.160
<v Speaker 1>Service to this Nation, among other things. As Supreme NATO

0:14:36.240 --> 0:14:40.520
<v Speaker 1>Commander James Trevitas, the forty eight hours here have been extraordinary.

0:14:40.640 --> 0:14:45.600
<v Speaker 1>I wrote a script about Lieutenant Colonel Asper, about General Miley,

0:14:45.680 --> 0:14:49.720
<v Speaker 1>about General uh Maddis, and I wrote a script about

0:14:49.760 --> 0:14:53.000
<v Speaker 1>Admiral Mullen. They're all on board. Do the soldiers and

0:14:53.040 --> 0:14:59.000
<v Speaker 1>the sailors of the military, do they have their back? Yes?

0:14:59.280 --> 0:15:02.040
<v Speaker 1>I think so. Um. As I look out across the

0:15:02.120 --> 0:15:05.520
<v Speaker 1>force today, tom Um, we have one point two million

0:15:05.600 --> 0:15:09.880
<v Speaker 1>active duty military and they didn't sign up to uh

0:15:10.080 --> 0:15:14.800
<v Speaker 1>dominate protesters, peaceful protesters in a battle space. Um. We've

0:15:14.800 --> 0:15:17.920
<v Speaker 1>got plenty of law enforcement officers, plenty of National Guard

0:15:18.000 --> 0:15:22.640
<v Speaker 1>troops who can do the kind of attention to prevent

0:15:22.800 --> 0:15:26.280
<v Speaker 1>looting that is so important. But I think the military

0:15:26.920 --> 0:15:30.400
<v Speaker 1>recognizes his duty as to the Constitution of the United States.

0:15:31.040 --> 0:15:33.160
<v Speaker 1>They were ordered to stand on the steps of the

0:15:33.200 --> 0:15:35.960
<v Speaker 1>Lincoln Memorial as they did. What were your thoughts when

0:15:36.000 --> 0:15:41.080
<v Speaker 1>Martha Radditt's of ABC showed that image of our military,

0:15:41.160 --> 0:15:44.760
<v Speaker 1>of whichever flavor lined up like Game of Thrones on

0:15:44.840 --> 0:15:48.520
<v Speaker 1>the steps of the Lincoln Memorial. You know, Tom, I

0:15:48.520 --> 0:15:50.840
<v Speaker 1>don't think it's important what I think. Let's think about

0:15:50.880 --> 0:15:53.760
<v Speaker 1>what Abraham Lincoln must have thought about that as he

0:15:53.880 --> 0:15:57.920
<v Speaker 1>was looking down from that great Republic in the sky.

0:15:58.200 --> 0:16:00.600
<v Speaker 1>I think he would have been stunned to think that

0:16:01.080 --> 0:16:04.360
<v Speaker 1>we'd hit this point over the exact issues that he

0:16:04.440 --> 0:16:08.200
<v Speaker 1>had worked so hard to keep our country together, to

0:16:08.320 --> 0:16:13.880
<v Speaker 1>overcome the kind of racism at its absolute peak, and slavery.

0:16:13.920 --> 0:16:16.640
<v Speaker 1>He must have felt as though he had had that

0:16:17.160 --> 0:16:20.880
<v Speaker 1>occur through the Civil War, and all that work must

0:16:20.880 --> 0:16:24.240
<v Speaker 1>have felt so undone to him. To see armed troops

0:16:24.240 --> 0:16:28.880
<v Speaker 1>standing there. I find it saddening to think what Abraham

0:16:28.920 --> 0:16:32.120
<v Speaker 1>Lincoln would think of that moment. Admiral, just if you

0:16:32.200 --> 0:16:34.600
<v Speaker 1>could just give us a sense of how you think

0:16:35.360 --> 0:16:39.440
<v Speaker 1>maybe the most senior military commanders in this country, how

0:16:39.480 --> 0:16:41.920
<v Speaker 1>do they feel like they need to react to President

0:16:41.960 --> 0:16:44.600
<v Speaker 1>trumpall think about the joint chiefs when he issues an

0:16:44.720 --> 0:16:47.600
<v Speaker 1>edict about, you know, maybe deploying troops to the Lincoln Memorial.

0:16:47.680 --> 0:16:50.720
<v Speaker 1>I mean, is it simply he's my commander in chief,

0:16:50.760 --> 0:16:57.680
<v Speaker 1>and therefore I fulfill the order first, Any senior military

0:16:57.800 --> 0:17:02.480
<v Speaker 1>officer is gonna begin by saying, here's my advice on

0:17:02.520 --> 0:17:07.000
<v Speaker 1>this situation. Secretary of Defense and Mr President, Well, we

0:17:07.040 --> 0:17:09.719
<v Speaker 1>will never know because of the professionalism of our senior

0:17:09.760 --> 0:17:14.040
<v Speaker 1>military what the exact advice they gave the President, but

0:17:14.119 --> 0:17:17.320
<v Speaker 1>I would guess that they advised him not to do it,

0:17:17.359 --> 0:17:20.360
<v Speaker 1>that it would be the wrong thing, the wrong signal,

0:17:20.480 --> 0:17:24.879
<v Speaker 1>the wrong step forward. Um once the President then over rise,

0:17:25.359 --> 0:17:27.720
<v Speaker 1>then you have a very tough decision to make as

0:17:27.720 --> 0:17:30.879
<v Speaker 1>a senior military leader. If it is a lawful order,

0:17:30.880 --> 0:17:35.040
<v Speaker 1>and it is a lawful order, it's not a smart order,

0:17:35.040 --> 0:17:38.320
<v Speaker 1>but it's a lawful order, then you can either execute

0:17:38.320 --> 0:17:41.400
<v Speaker 1>it or you have to presign. I think what we've

0:17:41.400 --> 0:17:45.280
<v Speaker 1>seen in the last twenty four hours, both from Secretary

0:17:45.600 --> 0:17:49.120
<v Speaker 1>Esper and from General Millie, is them taking a step

0:17:49.160 --> 0:17:54.000
<v Speaker 1>back and effectively saying to the President through their public pronouncements, Okay,

0:17:54.040 --> 0:17:56.480
<v Speaker 1>we don't agree with this, and now we're going to

0:17:56.560 --> 0:17:59.320
<v Speaker 1>see what unfolds in the next four to forty eight hours.

0:17:59.680 --> 0:18:03.760
<v Speaker 1>Join us on Bloombert Radio across this nation. James Trevidus,

0:18:04.200 --> 0:18:06.600
<v Speaker 1>former admiral with the United States Navy and of course

0:18:06.640 --> 0:18:11.840
<v Speaker 1>Supreme Commander NATO. James trevinas the lieutenant colonel earned a

0:18:11.880 --> 0:18:15.919
<v Speaker 1>bronze star moving to the left on the road to Baghdad.

0:18:16.520 --> 0:18:19.520
<v Speaker 1>He's in a difficult position right now. What does the

0:18:19.640 --> 0:18:26.040
<v Speaker 1>Secretary Defense do? Is it constructive to resign or does

0:18:26.080 --> 0:18:30.399
<v Speaker 1>he carry forward waiting to be terminated as is the

0:18:30.520 --> 0:18:37.840
<v Speaker 1>speculation overnight. Certainly these are intensely personal decisions, and I'm sure,

0:18:37.920 --> 0:18:41.960
<v Speaker 1>for example, Secretary Maddison White House Chief of Staff Kelly

0:18:42.040 --> 0:18:45.600
<v Speaker 1>must have wrestled with these kind of thoughts after Charlotteesville,

0:18:45.880 --> 0:18:49.160
<v Speaker 1>when I think there were a lot of storm clouds

0:18:49.200 --> 0:18:52.320
<v Speaker 1>gathering and red flags flying about where this was all going.

0:18:52.800 --> 0:18:57.280
<v Speaker 1>So I am hopeful that Secretary Esper will convince the

0:18:57.359 --> 0:19:01.240
<v Speaker 1>President as is his job, to do the right thing here,

0:19:01.280 --> 0:19:05.440
<v Speaker 1>which is to let law enforcement, National Guard take care

0:19:05.480 --> 0:19:07.560
<v Speaker 1>of these kind of missions. We do not want to

0:19:07.600 --> 0:19:11.879
<v Speaker 1>turn this into a active duty military role in tank

0:19:12.080 --> 0:19:16.200
<v Speaker 1>down Pennsylvania Avenue or flying helicopters. We actually saw this

0:19:16.680 --> 0:19:21.000
<v Speaker 1>flying combat helicopters low over protesters. Hey, that's the stuff

0:19:21.040 --> 0:19:24.040
<v Speaker 1>we do in Afghanistan and Iracut war. We don't do

0:19:24.119 --> 0:19:27.040
<v Speaker 1>that in the United States of America. Edmon, I've had

0:19:27.080 --> 0:19:29.440
<v Speaker 1>some history today. What you are expert on and folks,

0:19:29.520 --> 0:19:32.800
<v Speaker 1>I can't say enough about The Leader's Bookshelf by James

0:19:32.840 --> 0:19:37.240
<v Speaker 1>stravit As it's really an important book. Douglas MacArthur didn't

0:19:37.240 --> 0:19:40.640
<v Speaker 1>he have a helicopter when he and a young Eisenhower

0:19:40.760 --> 0:19:44.200
<v Speaker 1>and Major Patton had to take on the bonus boys

0:19:44.240 --> 0:19:50.399
<v Speaker 1>of World War One, starving in in the depression. MacArthur

0:19:50.520 --> 0:19:54.159
<v Speaker 1>had a challenging career after that. Within his acclaim and

0:19:54.240 --> 0:19:58.280
<v Speaker 1>his bravery and leadership as well. Is that the kind

0:19:58.320 --> 0:20:02.000
<v Speaker 1>of person the president wants? Is he really in search

0:20:02.320 --> 0:20:07.160
<v Speaker 1>of the Douglas MacArthur that my grandfather worshiped. I think

0:20:07.320 --> 0:20:13.760
<v Speaker 1>all presidents reached for active engage, forceful leaders, and sometimes

0:20:13.840 --> 0:20:18.440
<v Speaker 1>the leader you inherit in a situation, let's say Lincoln,

0:20:18.480 --> 0:20:22.359
<v Speaker 1>we're talking about him earlier, gets McClellan, General McClellan, who's

0:20:22.359 --> 0:20:24.960
<v Speaker 1>a pretty boy soldier, but he has to go through

0:20:24.960 --> 0:20:28.560
<v Speaker 1>a lot of general still he gets to Grant and

0:20:28.640 --> 0:20:31.439
<v Speaker 1>so what we what we see I think is the

0:20:31.440 --> 0:20:35.359
<v Speaker 1>president reaching for active engaged generals. But what he really

0:20:35.400 --> 0:20:38.360
<v Speaker 1>wants is a general who will stand up to him

0:20:38.400 --> 0:20:41.080
<v Speaker 1>and tell him what he cannot do, what he should

0:20:41.160 --> 0:20:45.120
<v Speaker 1>not do. I think that's the General that that President

0:20:45.119 --> 0:20:48.680
<v Speaker 1>Trump needs desperately in this moment. James de Vita, thank

0:20:48.720 --> 0:20:51.960
<v Speaker 1>you so much. With illusions are of course to Mr

0:20:52.000 --> 0:20:55.720
<v Speaker 1>Grant as well, General Grant as well, almost to Vitas.

0:20:55.760 --> 0:20:57.720
<v Speaker 1>I would look forward to the next essays from you

0:20:58.119 --> 0:21:01.960
<v Speaker 1>on this historic moment in Washington. Thanks for listening to

0:21:02.000 --> 0:21:06.560
<v Speaker 1>the Bloomberg Surveillance podcast. Subscribe and listen to interviews on

0:21:06.600 --> 0:21:12.440
<v Speaker 1>Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm

0:21:12.480 --> 0:21:15.800
<v Speaker 1>on Twitter at Tom Keene before the podcast. You can

0:21:15.840 --> 0:21:19.040
<v Speaker 1>always catch us worldwide. I'm Bloomberg Radio