WEBVTT - Rate Cuts, FedEx, and Trump 0:00:00.120 --> 0:00:04.360 Bloomberg is now on your dashboard with Apple CarPlay and 0:00:04.360 --> 0:00:08.160 Android Auto. It gives you access to every Bloomberg podcast, 0:00:08.280 --> 0:00:11.560 live audio feeds from Bloomberg Radio, print stories from Bloomberg 0:00:11.640 --> 0:00:14.920 News in audio form, and the latest headlines of the 0:00:14.920 --> 0:00:18.600 click of a button with Bloomberg News. Now it's free 0:00:18.680 --> 0:00:21.439 with the latest version of the Bloomberg Business App. That's 0:00:21.680 --> 0:00:24.400 the Bloomberg Business App. Get it on your phone in 0:00:24.440 --> 0:00:27.760 the Apple App Store or on Google Play. Just download 0:00:27.800 --> 0:00:30.560 the app, connect your phone to your car and get started. 0:00:30.960 --> 0:00:34.400 And it's all presented by our sponsor, Interactive Brokers. 0:00:35.400 --> 0:00:38.600 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:38.640 --> 0:00:39.800 my co host Matt Miller. 0:00:40.200 --> 0:00:44.279 Every business day we bring you interviews from CEOs, market pros, 0:00:44.320 --> 0:00:48.160 and Bloomberg experts, along with essential market moven News. 0:00:48.720 --> 0:00:51.839 I'm the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:51.960 --> 0:00:55.080 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:55.800 --> 0:00:59.600 Let's look at in. I'm mix here, soft landing, hard landing. 0:01:00.000 --> 0:01:01.440 I don't it looks like the Fed's trying to help 0:01:01.520 --> 0:01:03.760 us out Here? We welcome Francis Donald here. She is 0:01:03.760 --> 0:01:06.680 the chief economist at Manual Life Investment Management. She joins 0:01:06.760 --> 0:01:08.720 us Life here in our Bloomberg Interactive Broker studio. We 0:01:08.760 --> 0:01:11.399 appreciate you coming into the office. So, Francis, what are 0:01:11.440 --> 0:01:14.160 you guys over at Manu Life thinking about this economy? 0:01:14.200 --> 0:01:16.840 The markets just un last five or six weeks just 0:01:16.880 --> 0:01:19.200 said this thing's rippen here. I mean, we have the 0:01:19.240 --> 0:01:21.480 yields on ten year treasury we go from five percent 0:01:21.920 --> 0:01:24.160 to now less than three point nine percent. I mean, 0:01:24.800 --> 0:01:28.240 what's your call on economy for twenty four. 0:01:27.720 --> 0:01:30.200 Well, there's a lot of questions in there, because if 0:01:30.200 --> 0:01:31.760 you ask me what do I think happens in the 0:01:31.800 --> 0:01:35.280 next month, we couldn't possibly have a better economic setup. 0:01:35.360 --> 0:01:35.520 Right. 0:01:35.560 --> 0:01:38.640 You've got growth holding in there, the consumer hasn't given 0:01:38.720 --> 0:01:42.800 up just yet. Inflation data globally just coming in downside 0:01:42.800 --> 0:01:45.400 surprises every morning when we wake up, and a FED 0:01:45.440 --> 0:01:47.520 that said, you know what, we don't even need a 0:01:47.560 --> 0:01:50.400 recession to cut. We're ready to cut even into this 0:01:50.520 --> 0:01:54.000 soft landing. You get support for equities, you get support 0:01:54.040 --> 0:01:56.320 for bonds. Just about every asset class does well there. 0:01:56.520 --> 0:02:00.400 But remember your investment horizon, because we are still looking 0:02:00.400 --> 0:02:02.880 at a material slow down in the middle of twenty 0:02:02.960 --> 0:02:06.920 twenty four, recession risk is still elevated. And even let's 0:02:06.920 --> 0:02:09.799 just throw out that term recession stop thinking about is 0:02:09.840 --> 0:02:12.200 a two quarters of negative GDP one quarter of negative 0:02:12.480 --> 0:02:15.800 Markets don't care as much as headlines do. We're going 0:02:15.840 --> 0:02:18.680 into a growth slow down middle year. So this is 0:02:18.720 --> 0:02:22.120 a tactical goldilocks, a nice air pocket that you can trade. 0:02:22.400 --> 0:02:24.840 You can also still believe there's a recession on the horizon. 0:02:24.840 --> 0:02:26.440 Two things can be true at the same time. 0:02:27.200 --> 0:02:29.840 The people who are calling for a soft landing right now, 0:02:29.880 --> 0:02:32.160 what do you think they're missing? What are they not 0:02:32.320 --> 0:02:35.119 seeing in the data that maybe you are noticing? 0:02:35.560 --> 0:02:39.440 Right Well, there's a whole difference of opinion is too 0:02:39.480 --> 0:02:43.400 And this is the core question. Is this time really different? 0:02:43.639 --> 0:02:46.440 Because if you look at the wealth of leading indicators 0:02:46.480 --> 0:02:51.000 that have traditionally helped you forecast a recession, every economist 0:02:51.040 --> 0:02:55.320 knows those are flashing red. The difference between those calling 0:02:55.320 --> 0:02:57.040 for a soft landing and those calling for a hard 0:02:57.080 --> 0:02:59.320 landing is really how much of a factor do you 0:02:59.360 --> 0:03:02.120 apply to saying there are things at play that are 0:03:02.120 --> 0:03:06.360 different than past cycles that will mute or mitigate And frankly, 0:03:06.440 --> 0:03:09.320 even those shops that are calling for mild recessions, And 0:03:09.600 --> 0:03:11.600 if you look at a list of consensus calls, it's 0:03:11.639 --> 0:03:14.160 either soft landing or mild recession. You don't have very 0:03:14.200 --> 0:03:17.000 many who are actually calling for a traditional deepercession, and 0:03:17.080 --> 0:03:18.800 you don't have very many that are calling for this 0:03:19.160 --> 0:03:22.919 reacceleration in twenty twenty four. But if you look at that, 0:03:23.000 --> 0:03:26.320 what they are effectively calling for is that the feed 0:03:26.480 --> 0:03:29.399 is easing a little bit. This time is different. It's 0:03:29.440 --> 0:03:32.400 going to be very mild. So this is really a 0:03:32.400 --> 0:03:35.200 difference of opinion, not a difference of data sets. 0:03:36.120 --> 0:03:38.360 How important is the labor market here, because the labor 0:03:38.360 --> 0:03:41.680 market has just been incredibly resilient here. I even had 0:03:41.680 --> 0:03:44.800 a tick down in the unemployment rate last month, which 0:03:44.800 --> 0:03:47.080 I don't think many people were forecasting. It's kind of 0:03:47.080 --> 0:03:49.120 tough to have a slow down in the economy if 0:03:49.120 --> 0:03:51.800 everybody's got a job and wages are going up. 0:03:51.920 --> 0:03:56.040 A job full recession. Have we had the jobless recoveries 0:03:56.040 --> 0:03:58.560 coming out of the GFC. Now this concept of job 0:03:58.640 --> 0:04:01.520 full recession, but there's a few things going on there, 0:04:01.760 --> 0:04:03.760 one of which is you don't actually need the consumer 0:04:03.840 --> 0:04:06.000 to be in a recession for the US economy to 0:04:06.160 --> 0:04:09.200 have two quarters of negative GDP that can come from 0:04:09.480 --> 0:04:14.760 housing capex. Let's not forget manufacturing is in a recession globally. 0:04:14.840 --> 0:04:17.520 We've actually had the longest manufacturing recession, one of the 0:04:17.560 --> 0:04:21.159 longest ever. So there are sectors and pockets of this economy. 0:04:21.360 --> 0:04:24.040 Existing home sees, rotation companies will tell you they've been 0:04:24.040 --> 0:04:25.279 in a good recession. 0:04:25.320 --> 0:04:27.360 I don't have to convince anyone who's on the good 0:04:27.520 --> 0:04:29.839 side of the business. I don't have to convince small 0:04:29.920 --> 0:04:33.080 cap portfolio managers that we're in a recession. They believe me. 0:04:33.160 --> 0:04:35.640 And frankly, I don't have to convince anyone in Germany, 0:04:35.760 --> 0:04:38.839 Canada and Japan or outside the United States that we're 0:04:38.839 --> 0:04:42.320 in a hard landing. This is a US story very specifically, 0:04:42.360 --> 0:04:45.800 and it's about services holding on. How much do jobs 0:04:45.839 --> 0:04:48.440 matter here? Well, one of the big challenges is jobs 0:04:48.480 --> 0:04:51.640 always break last, and they don't break in a linear fashion. 0:04:51.800 --> 0:04:55.200 It's a hockey stick, forgive my Canadian reference. It goes 0:04:55.400 --> 0:04:58.160 hard and fast upwards. And if you take a look 0:04:58.200 --> 0:05:01.960 at some of this underlying data, life continuing claims, if 0:05:02.000 --> 0:05:04.960 you look at that big drop down in vacancies, the 0:05:05.080 --> 0:05:08.320 risk is that the unemployment rate rises. Now when you're 0:05:08.360 --> 0:05:10.799 an economist working for a bank or the cell side, 0:05:10.880 --> 0:05:12.640 You've got to come out with a forecast. You've got 0:05:12.640 --> 0:05:14.560 to come out with conviction. When you're in a role 0:05:14.680 --> 0:05:16.840 like mine, you work with portfolio managers every day. They 0:05:16.839 --> 0:05:19.279 don't really care what my point forecast is. They want 0:05:19.279 --> 0:05:21.800 to know what is the balance of risks. And the 0:05:21.920 --> 0:05:25.240 risk is not that the unemployment rate declines and the 0:05:25.320 --> 0:05:28.440 job market strengthens from this point, it's that the job 0:05:28.480 --> 0:05:32.359 market weakens, and it's really asymmetric risk going into twenty 0:05:32.400 --> 0:05:36.240 twenty four. Does it matter for the economy, absolutely, But 0:05:36.360 --> 0:05:38.200 here I would say this is the difference between that 0:05:38.279 --> 0:05:41.840 mild recession soft landing and a worse recession. It's not 0:05:41.880 --> 0:05:44.919 about upside, it's about what downsides are not being recognized. 0:05:45.200 --> 0:05:48.040 So then against that, what do you make of all 0:05:48.080 --> 0:05:50.960 of the Fed speak that we've seen recently. I mean, 0:05:51.000 --> 0:05:53.760 first Powell kind of not pushing back on that idea 0:05:53.800 --> 0:05:56.800 that financial conditions have loosened, and then in the wake 0:05:56.880 --> 0:05:59.440 of that, a few officials coming out and maybe trying 0:05:59.480 --> 0:06:02.440 to walk back those expectations just a little bit. 0:06:02.520 --> 0:06:04.360 Yeah, you know, we're always trying to get a sense 0:06:04.360 --> 0:06:06.599 of what exactly is the FED watching as if they 0:06:06.640 --> 0:06:08.919 sit in a secret room. Well, I guess they do 0:06:09.040 --> 0:06:11.000 have a little bit of a secret room, and they 0:06:11.040 --> 0:06:12.960 have this magic formula, and we're all just trying to 0:06:13.000 --> 0:06:15.800 guess exactly what that magic formula is. I don't think 0:06:15.839 --> 0:06:18.040 it's that at all. I think, just like economists and 0:06:18.040 --> 0:06:21.000 strategists and portfolio managers, the weight that they put on 0:06:21.040 --> 0:06:24.320 different factors changes. But again, if I'm sitting at the FED, 0:06:24.400 --> 0:06:26.680 what is the balance of risks? Here's a risk that 0:06:26.760 --> 0:06:31.120 I haven't heard anybody talk about downshooting on inflation sub 0:06:31.200 --> 0:06:34.279 two percent inflation. Why are we not talking about that 0:06:34.480 --> 0:06:37.920 risk when we see this material decline in inflation expectations, 0:06:38.120 --> 0:06:41.320 energy costs, there's a wide range of goods prices that 0:06:41.360 --> 0:06:44.320 are dropping really quickly. That's not my point forecast, but 0:06:44.360 --> 0:06:46.360 it's a risk that need to be assessed and has 0:06:46.400 --> 0:06:48.440 to be taken into account by the FED. At the 0:06:48.480 --> 0:06:50.320 end of the day, I don't know how much it 0:06:50.400 --> 0:06:53.800 matters why they pivoted. It just matters that, as I've 0:06:53.839 --> 0:06:56.040 been saying, the toothpaste is out of the tube. It's 0:06:56.160 --> 0:06:59.120 real hard to walk it back. And I hear every day, Oh, 0:06:59.160 --> 0:07:01.559 but they're pushing back. They're saying they're not talking about 0:07:01.680 --> 0:07:04.080 rate cuts. Well, how come every day I turn on 0:07:04.600 --> 0:07:06.560 my news, my Bloomberg terminal and I see all the 0:07:06.600 --> 0:07:09.680 talk about how we're not talking about not talking about 0:07:09.760 --> 0:07:13.400 rate cuts. It's too late. And even you know, the 0:07:13.400 --> 0:07:15.920 ECB and the Bank of England they try to push 0:07:16.000 --> 0:07:18.960 back as well. The market says, we don't believe you. 0:07:19.080 --> 0:07:22.200 We don't believe you because you get UK inflation this morning. 0:07:22.320 --> 0:07:25.080 That just says you can walk that talk as much 0:07:25.120 --> 0:07:27.760 as you want, but the data is not supporting that. 0:07:27.800 --> 0:07:30.320 We are not in a disinflation and growth slow down 0:07:30.400 --> 0:07:31.240 type of environment. 0:07:31.760 --> 0:07:33.880 Stepping back a little bit from a global perspective, how 0:07:33.920 --> 0:07:36.800 concerned are you about China? Because it's just been a 0:07:36.840 --> 0:07:38.800 lot of soft the data coming out of China. The 0:07:38.840 --> 0:07:42.120 reopening wasn't what I think a lot of investors anticipated 0:07:42.120 --> 0:07:45.120 at the beginning of twenty twenty three. As you look 0:07:45.160 --> 0:07:47.320 forward to twenty twenty four, how do you feel like 0:07:47.400 --> 0:07:50.400 China is can impact maybe the global economy the US economy. 0:07:50.640 --> 0:07:53.680 Yeah, So we think about China in terms of fat tails, 0:07:54.560 --> 0:07:57.640 and by that I mean that the distribution of risks 0:07:58.040 --> 0:08:01.120 on both the downside and the upside are quite large. 0:08:01.360 --> 0:08:04.400 So on one hand, we you know, as I said earlier, 0:08:04.440 --> 0:08:06.600 we're talking so much about soft landing hardlining in the 0:08:06.680 --> 0:08:09.000 United States. The rest of the world is already in 0:08:09.040 --> 0:08:13.280 hard landing territory. Emerging markets lad interest rates higher coming 0:08:13.280 --> 0:08:16.320 out of COVID, and they are now actively cutting. China 0:08:16.440 --> 0:08:19.880 is in a very significant fiscal and monetary easing cycle. 0:08:20.160 --> 0:08:22.880 We've got a range of emerging markets that are already 0:08:22.960 --> 0:08:25.640 in easing. The FED and the rest of the developed 0:08:25.680 --> 0:08:28.840 market central banks are laggarts. When it comes, they will 0:08:28.880 --> 0:08:32.000 be the last ones to go. So following China through 0:08:32.040 --> 0:08:34.880 this disinflation, I think is really clutch. And let's also 0:08:34.920 --> 0:08:38.760 remember China is in deflation. They have negative CPI right now, 0:08:39.080 --> 0:08:41.640 so they are a really important leading story. What I 0:08:41.640 --> 0:08:44.080 think is telling about China is that they've put the 0:08:44.200 --> 0:08:47.960 pressure on the fiscal side to ramp up support. That's 0:08:48.000 --> 0:08:51.040 an upside risk to the global economy, But fiscal doesn't 0:08:51.040 --> 0:08:53.800 impact your economy overnight, so that's more of an upside 0:08:53.840 --> 0:08:56.520 risk to later twenty twenty four into twenty twenty five. 0:08:56.800 --> 0:08:59.960 When you look at the lags between Chinese economic activity 0:09:00.040 --> 0:09:03.599 and US economic activity, China's slow down becomes very impactful 0:09:03.600 --> 0:09:06.520 to the United States in the first the next six months. 0:09:06.760 --> 0:09:08.719 Right interesting and just we had some you know, some 0:09:08.840 --> 0:09:10.840 data that just came out at ten o'clock today. The consumer, 0:09:11.400 --> 0:09:13.960 the Conference Board consumer confidence came in much better than expected. 0:09:14.040 --> 0:09:15.839 So the consumer still hanging in there. 0:09:15.840 --> 0:09:16.040 Good. 0:09:16.080 --> 0:09:19.840 You know what, the consumer loves lower gas prices. How 0:09:19.880 --> 0:09:23.320 interesting is it that we are always talking about, you know, 0:09:23.360 --> 0:09:26.920 the central banks they have to contain infleetion expectations. You know, 0:09:28.080 --> 0:09:30.439 I worked at a central bank and when I did, 0:09:30.640 --> 0:09:33.079 I told some friends and they said, oh, you must 0:09:33.120 --> 0:09:35.880 be a bank teller. And I tend to think about 0:09:35.920 --> 0:09:38.880 that because the perception is that what a central banker 0:09:38.880 --> 0:09:43.080 does meaningfully moves infleetion expectations. And that's true in some components. 0:09:43.280 --> 0:09:46.040 But if you track where consumer expectations are for inflation, 0:09:46.120 --> 0:09:48.319 they just track on top of gas prices. That's what 0:09:48.320 --> 0:09:49.360 people see over time. 0:09:49.520 --> 0:09:51.319 And I can tell you it's three dollars at the 0:09:51.679 --> 0:09:54.640 huahwah and Wall township. Francis Donald, thanks so much. We 0:09:54.679 --> 0:09:58.400 appreciate it. Chief econmis Menu Life Investment Management joining us 0:09:58.440 --> 0:10:01.559 Live Instituto even after being lin on television earlier today. 0:10:01.679 --> 0:10:03.040 So we appreciate that commitment. 0:10:04.679 --> 0:10:08.079 You're listening to the team. Ken's our live program Bloomberg 0:10:08.160 --> 0:10:11.559 Markets weekdays at ten am Eastern on Bloomberg dot Com, 0:10:11.600 --> 0:10:14.720 the iHeartRadio app, and the Bloomberg Business App, or listen 0:10:14.800 --> 0:10:16.920 on demand wherever you get your podcasts. 0:10:18.559 --> 0:10:21.439 I want to get to the latest on former President 0:10:21.480 --> 0:10:25.400 Donald Trump. We welcome Caroline Frederickson, Distinguished Visiting Professor at 0:10:25.400 --> 0:10:29.360 Georgetown Law. Caroline, can you encapsulate for us, summarize for 0:10:29.440 --> 0:10:32.520 us what you think the risk is here to former 0:10:32.559 --> 0:10:35.520 President Trump from this ruling from the Colorado Supreme Court 0:10:35.760 --> 0:10:38.160 taking mister Trump off the ballot. 0:10:39.679 --> 0:10:42.200 You know, the risk obviously is not so great for 0:10:42.280 --> 0:10:45.000 him in terms of winning Colorado in the general election, 0:10:45.120 --> 0:10:48.080 because that wasn't really destined to happen in any case, 0:10:48.200 --> 0:10:50.280 there has been a Republican who won that. 0:10:50.280 --> 0:10:51.600 State since two thousand and four. 0:10:52.120 --> 0:10:54.640 But nonetheless, it's such a precedent for the other states 0:10:54.640 --> 0:10:56.720 and there will be, no doubt a number of other 0:10:58.120 --> 0:11:02.560 states deciding this same issue about whether or not Trump 0:11:02.640 --> 0:11:05.000 can appear on the ballot. And for those in those 0:11:05.000 --> 0:11:09.120 states where there's actually a viable race, which is most 0:11:09.120 --> 0:11:11.800 states in the country, you will actually have a significant 0:11:11.840 --> 0:11:14.640 effect because if other states are going to rule that 0:11:14.640 --> 0:11:17.160 Trump can't be on the ballot, and we have a 0:11:17.240 --> 0:11:20.760 situation where it's obviously very closely divided electorate, it could 0:11:20.840 --> 0:11:23.480 be the difference whether he wins or loses. 0:11:24.120 --> 0:11:26.640 How do you see this situation faring out in the 0:11:26.679 --> 0:11:27.400 Supreme Court? 0:11:28.760 --> 0:11:31.160 Well, that's really hard to say. This is a completely 0:11:31.200 --> 0:11:31.920 novel question. 0:11:32.760 --> 0:11:36.520 This has never gotten to the Supreme Court, even involving 0:11:36.720 --> 0:11:41.200 someone of a lower level, let alone a president, presidential 0:11:41.200 --> 0:11:45.199 candidate and former president. So I think it's quite complex 0:11:45.400 --> 0:11:49.280 because the issues have never been addressed. There have been 0:11:49.320 --> 0:11:54.200 some lengthy dueling larvae articles trying to explain the meaning 0:11:54.240 --> 0:11:57.400 of the provision. It's the insurrectionist clause in the Fourteenth Amendment, 0:11:57.480 --> 0:12:01.520 section three, by the ball The bast bulk of scholarly 0:12:01.600 --> 0:12:06.000 opinion is that President Trump is squarely within the sights 0:12:06.280 --> 0:12:11.520 of that provision. But you know, there are those questions 0:12:11.559 --> 0:12:13.480 are open, and we you know, we can only think 0:12:13.520 --> 0:12:16.520 that the Supreme Court is going to have to approach them. 0:12:16.640 --> 0:12:20.280 Anew, are there other states that you're aware of that 0:12:20.480 --> 0:12:23.120 are maybe in advanced stages of doing something similar to 0:12:23.120 --> 0:12:23.920 what Colorado did? 0:12:24.800 --> 0:12:29.199 Well, there is an appeal from a ruling that kept 0:12:29.400 --> 0:12:32.679 Donald Trump on the ballot that is going up, I 0:12:32.679 --> 0:12:35.560 believe in Michigan to their Supreme Court, so that one 0:12:36.160 --> 0:12:39.719 could pose a problem for him. Michigan is a you know, 0:12:39.840 --> 0:12:44.880 fierce battleground state. So and I think the advocates and 0:12:45.080 --> 0:12:47.839 the voters who've been bringing these cases are surely looking 0:12:47.880 --> 0:12:53.040 at every opportunity now to make to use the Colorado 0:12:53.120 --> 0:12:55.600 ruling as a president because it was very thorough, it 0:12:55.640 --> 0:12:59.520 was very thoughtful, so it will be weighed very carefully. 0:12:59.640 --> 0:13:01.160 Ya other or other state courts. 0:13:02.040 --> 0:13:04.720 Can we backtrack for a second, What does it actually 0:13:04.760 --> 0:13:07.600 mean that Trump is not on the ballot? 0:13:09.880 --> 0:13:13.240 Well, I just it will be an empty line, I suppose. 0:13:13.280 --> 0:13:15.120 I mean they haven't printed the ballots. This is still 0:13:15.160 --> 0:13:20.679 for the primary in Colorado, and it will mean that 0:13:20.720 --> 0:13:23.920 the other Republican candidates will be listed and Donald Trump 0:13:23.920 --> 0:13:24.240 will not. 0:13:24.559 --> 0:13:26.800 This is only for the primary, or he can't appear 0:13:26.800 --> 0:13:29.000 in any election for public office. 0:13:29.040 --> 0:13:31.480 It will be any election right now, it's just the 0:13:31.480 --> 0:13:35.280 primary and the court itself. The Colorado Supreme Court has 0:13:36.200 --> 0:13:43.680 held its opinion until early January because it's very possible 0:13:43.720 --> 0:13:46.640 the Supreme Court might be able to we'll decide whether 0:13:46.720 --> 0:13:50.960 to take an appeal and will rule very quickly, but 0:13:51.080 --> 0:13:53.240 after January four it will go forward. 0:13:53.920 --> 0:13:57.480 So you know, is Caroline, what is the kind of 0:13:57.520 --> 0:13:59.280 the real legal argument that if it gets to the 0:13:59.320 --> 0:14:03.040 Supreme Court or maybe put to simply, what did the 0:14:03.080 --> 0:14:07.920 State of Cholrador court find that A he was an insurrectionist? 0:14:08.000 --> 0:14:12.120 And be the Constitution says insurrectionists can't be elected to office. 0:14:12.160 --> 0:14:13.920 I'm a little unclear as to the legal issue. 0:14:14.440 --> 0:14:17.640 So there are two elements here, and it's basically that 0:14:18.080 --> 0:14:21.400 for someone who has taken an oath to the Constitution, 0:14:21.520 --> 0:14:26.320 they cannot be an officer of the United States. So 0:14:26.480 --> 0:14:28.840 that is Donald Trump took an oath to the Constitution 0:14:28.880 --> 0:14:32.479 when he was president, and then under the factual analysis 0:14:32.480 --> 0:14:35.680 of the trial court, he engaged an insurrection, and that 0:14:35.760 --> 0:14:39.640 judge used the January sixth report and its extensive evidence 0:14:39.680 --> 0:14:44.400 of the ways in which former President Trump had been 0:14:44.520 --> 0:14:48.560 fanning the flames of the insurrection to find that he 0:14:48.600 --> 0:14:51.800 had engaged an insurrection. But that judge on the legal question, 0:14:51.880 --> 0:14:56.960 which is is Donald Trump is the president one of 0:14:57.000 --> 0:15:03.000 those officers that is barred from being a candidate, And 0:15:04.040 --> 0:15:06.280 it seems pretty clear I think to most people that 0:15:06.400 --> 0:15:08.920 the president is an officer of the United States. 0:15:09.280 --> 0:15:11.240 But that's the legal question, all right. 0:15:11.280 --> 0:15:15.200 If we step out kind of and look at former 0:15:15.240 --> 0:15:21.680 President Donald Trump's legal issues in mass I have, where 0:15:21.720 --> 0:15:23.800 is the greatest risk do you think to him? I 0:15:23.800 --> 0:15:26.960 guess as it relates to the election. Not personally, I guess, 0:15:27.000 --> 0:15:30.720 but just in terms of his ability to run and 0:15:30.840 --> 0:15:32.360 potentially you know, be elected. 0:15:33.360 --> 0:15:35.720 Well, I really think the actually biggest risks to him 0:15:35.720 --> 0:15:39.680 are the other cases. I mean, you know, it's a 0:15:39.800 --> 0:15:44.120 you know, certainly an important finding that he engaged in insurrection, 0:15:45.400 --> 0:15:47.720 you know, really just taking up what the January sixth 0:15:47.760 --> 0:15:50.000 Commission had already had already done. 0:15:50.800 --> 0:15:52.360 But I think the other. 0:15:52.280 --> 0:16:00.600 Cases, the Georgia case involving election interference and the the 0:16:01.200 --> 0:16:05.960 case in DC involving January sixth then an election interference, 0:16:05.960 --> 0:16:08.320 I think those are the ones that really could well 0:16:08.320 --> 0:16:12.480 bite him, because even you know, the kind of the 0:16:12.520 --> 0:16:17.320 most hardcore MAGA voters may start to question their candidate 0:16:17.520 --> 0:16:20.960 if there's a rock solid criminal case against him and 0:16:21.000 --> 0:16:22.680 it's moving forward and he's losing. 0:16:23.600 --> 0:16:27.200 And just one final question here, Caroline, does he get 0:16:27.200 --> 0:16:29.640 good representation? I Mean, it just seems like I don't 0:16:29.720 --> 0:16:32.040 know any of the firms that he hires these various things. 0:16:32.040 --> 0:16:34.040 They're not firms I've ever heard of. And do you 0:16:34.040 --> 0:16:35.479 think he gets quality representation? 0:16:36.280 --> 0:16:39.560 Well, you know, I think just ask Rudy Giuliani how 0:16:39.560 --> 0:16:42.560 he's doing. I think he's got some big bills right 0:16:42.600 --> 0:16:44.000 now and I don't see Donald. 0:16:43.800 --> 0:16:45.240 Trump stepping in to pay them. 0:16:45.280 --> 0:16:47.240 So, you know, I think, you know, one of the 0:16:47.320 --> 0:16:50.120 problems is the kind of relationships he's had with lawyers 0:16:50.120 --> 0:16:52.600 over the years haven't really meant that those lawyers have 0:16:53.040 --> 0:16:57.120 been able to succeed in their businesses. So I think 0:16:57.160 --> 0:17:01.720 a lot of very more serious, US reputable lawyers have 0:17:01.800 --> 0:17:02.440 stepped away. 0:17:02.520 --> 0:17:04.120 It's it's a dangerous place to go. 0:17:04.520 --> 0:17:06.880 Interesting, all right, Well, there's a lot to follow there. 0:17:07.080 --> 0:17:09.720 Caroline Frederickson, thank you so much for joining us. Caroline Frederickson, 0:17:09.840 --> 0:17:12.879 she's a distinguished visiting professor at Georgetown Law. Kind of 0:17:12.880 --> 0:17:16.640 breaking down some of the legal issues surrounding former President 0:17:16.640 --> 0:17:19.920 Donald Trump in Colorado, where they had the state has 0:17:19.960 --> 0:17:23.399 removed him, at least at this stage from the ballot 0:17:23.400 --> 0:17:27.120 for the upcoming primary. So another issue for the former 0:17:27.160 --> 0:17:29.960 president deal with from a legal perspective, and it's tough 0:17:30.000 --> 0:17:33.320 to keep tracking. You need you need like a you know, 0:17:33.359 --> 0:17:35.560 Bingo card to kind of keep track of everything. 0:17:35.359 --> 0:17:38.440 You're listening to the tape. Can's are live program Bloomberg 0:17:38.560 --> 0:17:42.159 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:17:42.200 --> 0:17:45.440 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:17:45.480 --> 0:17:48.280 You can also listen live on Amazon Alexa from our 0:17:48.320 --> 0:17:54.400 flagship New York station, Just say Alexa play Bloomberg eleven thirty. 0:17:54.200 --> 0:17:57.520 Bed X, f d X stocks down eleven percent. It 0:17:57.560 --> 0:18:01.440 was up like fifty percent yesterday day on year to date, 0:18:01.680 --> 0:18:04.840 So a big surprise here company before to earnings disappointed 0:18:05.560 --> 0:18:08.320 with their financial results. Here at lead Lascow, he covers 0:18:08.359 --> 0:18:11.359 all the transports and logistic stuffs for Bloomberg Intelligence. Second 0:18:11.400 --> 0:18:13.520 day in a row in studio. How about that man, 0:18:14.480 --> 0:18:15.600 what's going on in FedEx? 0:18:15.720 --> 0:18:18.800 Lucky me? Lucky? Yes, how you doing? Yeah? 0:18:18.880 --> 0:18:20.800 So FedEx, it's really the express business. 0:18:21.040 --> 0:18:22.479 If you think about their air freight business. 0:18:22.520 --> 0:18:24.840 So they have air freight ground and express is that 0:18:24.880 --> 0:18:26.560 how expresses. 0:18:26.600 --> 0:18:28.879 The air freight ground is the stuff that comes to 0:18:28.920 --> 0:18:32.600 your house, and then freight is the less than truckload business. 0:18:32.600 --> 0:18:36.320 Okay, and the express business that most of us think about. 0:18:36.720 --> 0:18:38.399 Yeah, kind of the planes, because that's what they were 0:18:38.400 --> 0:18:38.760 built on. 0:18:38.800 --> 0:18:41.080 They were first an express company that built out a 0:18:41.080 --> 0:18:43.600 ground network, where UPS was a ground network that built 0:18:43.600 --> 0:18:46.879 out an air network. See because fred Smith kind of 0:18:46.920 --> 0:18:48.680 invented that air network. 0:18:49.119 --> 0:18:51.000 So what's going wrong with that network? 0:18:51.520 --> 0:18:55.280 It's just gotten too big. So they're trying to do 0:18:55.320 --> 0:18:57.480 a lot of cost savings, but the cost savings aren't 0:18:57.480 --> 0:19:00.879 coming up to the I guess they're servicing in the 0:19:00.920 --> 0:19:04.639 ebit line because they're facing some headwinds, whether it's demand 0:19:04.680 --> 0:19:08.760 headwinds from just consumers not buying as much. The US 0:19:08.880 --> 0:19:12.560 Postal Service was a big customer. They're actually using less 0:19:12.600 --> 0:19:15.480 air more ground and so that's not great for FedEx. 0:19:16.440 --> 0:19:19.480 So there's a lot of headwinds that they're facing and 0:19:20.000 --> 0:19:23.480 it's really impacting their overall margins. And their margins were 0:19:23.600 --> 0:19:26.600 you know, below two percent wow, which is not great, 0:19:26.600 --> 0:19:28.399 and it was about two hundred and twenty basis points 0:19:28.480 --> 0:19:30.880 less than what analysts were expecting. 0:19:30.440 --> 0:19:31.000 For the quarter. 0:19:32.000 --> 0:19:34.920 What did we learn about the health of the US 0:19:35.000 --> 0:19:38.280 economy and the US consumer from these FedEx earnings. 0:19:38.400 --> 0:19:39.280 It's a great question. 0:19:39.440 --> 0:19:42.160 I didn't learn much because I was more or less 0:19:42.200 --> 0:19:45.760 focused on you know, their businesses, you know what we 0:19:46.000 --> 0:19:47.760 But what I would say is that. 0:19:47.720 --> 0:19:49.920 You know, we are recalibrating demand. 0:19:50.440 --> 0:19:54.280 We're still coming off of those creamy highs in the pandemic, 0:19:54.359 --> 0:19:57.600 so we're still normalizing and that's going to continue to 0:19:57.640 --> 0:20:00.919 take time. But you know, the consumer seems to be 0:20:01.080 --> 0:20:03.800 in a pretty good spot. They mentioned that their peak 0:20:03.880 --> 0:20:08.240 season was running relatively well, but it's also worth noting 0:20:08.280 --> 0:20:11.800 that they were expecting probably more volumes in their express 0:20:11.880 --> 0:20:16.040 business and that kind of misaligned costs and kind of 0:20:16.560 --> 0:20:19.160 added to the margin pressure that they faced in their 0:20:19.359 --> 0:20:20.320 physical second quarter. 0:20:20.560 --> 0:20:23.960 So during the pandemic, everybody started shopping more and a 0:20:24.040 --> 0:20:27.120 lot more packages were going through the FedEx system. Did 0:20:27.119 --> 0:20:30.480 they add a bunch of fixed costs to service that 0:20:30.600 --> 0:20:33.040 demand and now we're at a point of, oh, now 0:20:33.040 --> 0:20:35.160