WEBVTT - Bremmer: much more complicated geopolitical environment

0:00:03.120 --> 0:00:06.840
<v Speaker 1>This is Bloomberg surveillance. The lows have been seen in

0:00:06.880 --> 0:00:09.879
<v Speaker 1>the commodity markets generally, whether it's in the soft whether

0:00:09.920 --> 0:00:13.000
<v Speaker 1>it's in the grains, whether it's in crude oil. Has

0:00:13.039 --> 0:00:16.160
<v Speaker 1>the FED laid out a new rationale for running monitory

0:00:16.239 --> 0:00:19.200
<v Speaker 1>policy other than looking at the labor market and looking

0:00:19.239 --> 0:00:22.360
<v Speaker 1>at inflation US We think that people have leapfrogged what

0:00:22.600 --> 0:00:27.480
<v Speaker 1>is reasonable into excessive worry. Bloomberg Surveillance your link to

0:00:27.560 --> 0:00:31.920
<v Speaker 1>the world of economics, finance, and investment on Bloomberg Radio.

0:00:32.920 --> 0:00:35.480
<v Speaker 1>Good Morning, I might Coael mc key along with Tom Keane.

0:00:35.560 --> 0:00:38.360
<v Speaker 1>It's seven am on Wall Street where we are five

0:00:38.400 --> 0:00:41.599
<v Speaker 1>weeks into a rally and counting stocks closed Friday up

0:00:41.640 --> 0:00:44.680
<v Speaker 1>for the year finally, and indications are we'll at least

0:00:44.720 --> 0:00:47.479
<v Speaker 1>start the day higher in the U S something we

0:00:47.520 --> 0:00:50.120
<v Speaker 1>haven't had for a while. A merger Monday. Among the

0:00:50.159 --> 0:00:52.360
<v Speaker 1>deals and ounce so far, data company i H just

0:00:52.479 --> 0:00:55.760
<v Speaker 1>buying market Shurewin Williams buying val Spar, and W. L

0:00:55.880 --> 0:01:00.240
<v Speaker 1>Ross buying chemical and plastics distributor next Eos Solutions has

0:01:00.240 --> 0:01:03.200
<v Speaker 1>also talked Monsanto is exploring deals with b A, s

0:01:03.280 --> 0:01:05.800
<v Speaker 1>F and Beer that's helping stocks in Europe right now,

0:01:06.200 --> 0:01:10.000
<v Speaker 1>the stock six hundred is we'll call it unchanged on

0:01:10.319 --> 0:01:14.120
<v Speaker 1>the day. The Docks Index at the moment is up

0:01:14.200 --> 0:01:18.520
<v Speaker 1>forty eight points half a percent. In the euro at

0:01:18.600 --> 0:01:22.440
<v Speaker 1>the moment is a liqupit higher one twelve eighty, not

0:01:22.520 --> 0:01:27.360
<v Speaker 1>a whole lot. Here In the US, futures are little changed.

0:01:27.400 --> 0:01:30.080
<v Speaker 1>We'll call the SNP up by a point. The Dow

0:01:30.240 --> 0:01:33.160
<v Speaker 1>futures are up thirteen points, that's a tenth of a percent,

0:01:33.160 --> 0:01:36.520
<v Speaker 1>and Anti one hundred evening features up by three points

0:01:36.640 --> 0:01:40.440
<v Speaker 1>right now a tenth as well. Dollar index is lower

0:01:40.680 --> 0:01:44.440
<v Speaker 1>still ninety five O four three heading for ninety four

0:01:44.600 --> 0:01:47.480
<v Speaker 1>perhaps h bonds at the moment, the ten year one

0:01:47.520 --> 0:01:50.160
<v Speaker 1>point eight seven or five year note going for one

0:01:50.200 --> 0:01:54.400
<v Speaker 1>point three three eight three basis points. The two year note.

0:01:54.800 --> 0:01:57.840
<v Speaker 1>Oil has been lower all morning, paired its losses. Brent

0:01:57.960 --> 0:02:03.400
<v Speaker 1>crude seen on a tenth West Texas at down one

0:02:03.480 --> 0:02:06.520
<v Speaker 1>point two percent. That's a little bit of drag on

0:02:06.720 --> 0:02:10.720
<v Speaker 1>stocks as well, but for the moment, in general, investors

0:02:10.880 --> 0:02:15.799
<v Speaker 1>shrugging off geopolitical concerns something Ian Bremer can't do. The

0:02:15.880 --> 0:02:20.640
<v Speaker 1>head of the Arasia Group worries for a living good morning. Uh,

0:02:20.840 --> 0:02:22.959
<v Speaker 1>there are a lot of things that could go wrong

0:02:23.080 --> 0:02:26.400
<v Speaker 1>out there. Obviously, what's the top thing or two that

0:02:26.560 --> 0:02:29.480
<v Speaker 1>likely will go wrong? What are you advising clients to

0:02:29.639 --> 0:02:33.400
<v Speaker 1>most watch out for. This is a weird environment because, um,

0:02:33.600 --> 0:02:36.880
<v Speaker 1>you have an enormous number of tail risks that are

0:02:36.960 --> 0:02:39.880
<v Speaker 1>things are that should be like not worry about at all,

0:02:40.280 --> 0:02:43.520
<v Speaker 1>that actually do have a meaningful prospect even though they're

0:02:43.560 --> 0:02:47.720
<v Speaker 1>not likely. So Brexit for example, or a Trump presidency

0:02:47.960 --> 0:02:51.560
<v Speaker 1>for example, Um, I mean a nine eleven, a true

0:02:51.639 --> 0:02:56.120
<v Speaker 1>nine eleven in continental Europe. Um, the implosion of a

0:02:56.240 --> 0:02:59.040
<v Speaker 1>Turkey or even of a Saudi Arabia. Those are the

0:02:59.120 --> 0:03:01.840
<v Speaker 1>sorts of things that you know. In the Cold War,

0:03:02.360 --> 0:03:05.040
<v Speaker 1>you had the Cuban missile crisis. You had a shot

0:03:05.120 --> 0:03:08.080
<v Speaker 1>that the whole damn world was gonna blow itself up,

0:03:08.160 --> 0:03:10.440
<v Speaker 1>but you couldn't really do anything about that, so you

0:03:10.560 --> 0:03:13.040
<v Speaker 1>just kind of ignored it. And if the markets blew up,

0:03:13.080 --> 0:03:16.320
<v Speaker 1>well everything else did too. Today it's not you don't

0:03:16.320 --> 0:03:18.679
<v Speaker 1>have the prospect of arm again. What you have is

0:03:18.720 --> 0:03:22.120
<v Speaker 1>a meaningful possibility that one of these ten horrible things

0:03:22.280 --> 0:03:24.600
<v Speaker 1>is actually gonna happen, and you don't know which one.

0:03:24.800 --> 0:03:28.240
<v Speaker 1>It's a much more complicated geopolitical environment if markets let

0:03:28.280 --> 0:03:29.919
<v Speaker 1>me just sat her up for a second. We have

0:03:30.000 --> 0:03:32.720
<v Speaker 1>another hot headline. Apparently, Marriott came back with a new

0:03:32.840 --> 0:03:37.240
<v Speaker 1>offer for Starwood thirty six cents a shared. Starwood now

0:03:37.320 --> 0:03:41.080
<v Speaker 1>says that's the superior proposal to end BANG. The Chinese

0:03:41.640 --> 0:03:45.120
<v Speaker 1>proposal came out the last week, so, um, the bidding

0:03:45.120 --> 0:03:48.800
<v Speaker 1>war underway for Starwood. Interestingly enough, you mentioned Cuba star

0:03:48.920 --> 0:03:52.480
<v Speaker 1>Wood uh signing a deal to open to manage hotels

0:03:52.920 --> 0:03:56.600
<v Speaker 1>in Cuba. Um, as long as the president's there, let's

0:03:56.600 --> 0:03:58.800
<v Speaker 1>start with that. That's not a threat, is it. I mean,

0:03:59.120 --> 0:04:01.680
<v Speaker 1>how does Cuba out? Well, first of all, I mean

0:04:01.800 --> 0:04:04.000
<v Speaker 1>you can't have star Ward go and open a few

0:04:04.080 --> 0:04:06.800
<v Speaker 1>hotels and then have the Chinese by Starwood in Cuba

0:04:06.880 --> 0:04:09.400
<v Speaker 1>because it's like the communism never left at that point, right,

0:04:09.440 --> 0:04:11.920
<v Speaker 1>So you know, there's just too much for me. I'm

0:04:11.920 --> 0:04:15.280
<v Speaker 1>glad Marriott came back. Um. Well, I mean Obama, this

0:04:15.440 --> 0:04:17.920
<v Speaker 1>is one of his biggest wins under his administration. His

0:04:17.920 --> 0:04:21.120
<v Speaker 1>administration is not replete with foreign policy wins. Most American

0:04:21.200 --> 0:04:25.440
<v Speaker 1>allies feel worse off today than they did when Obama

0:04:25.520 --> 0:04:27.200
<v Speaker 1>first came in. The world is certainly not in a

0:04:27.279 --> 0:04:28.960
<v Speaker 1>happier place, So I mean, if that's the way you

0:04:29.120 --> 0:04:32.599
<v Speaker 1>judge it on balance, you'd say it's negative. But I mean, Cuba,

0:04:32.680 --> 0:04:34.760
<v Speaker 1>this is we're talking fifty years now. Look at the

0:04:34.800 --> 0:04:37.240
<v Speaker 1>cars on Cuba streets and realize that the Americans haven't

0:04:37.240 --> 0:04:40.280
<v Speaker 1>been selling since people used to drive cars like that, right,

0:04:40.720 --> 0:04:43.800
<v Speaker 1>And and this this is long overdue. There's going to

0:04:43.839 --> 0:04:47.520
<v Speaker 1>be extraordinary tourism, is going to be extraordinary investment, and

0:04:47.600 --> 0:04:50.560
<v Speaker 1>the Cuban government itself won't be able to stand up

0:04:50.600 --> 0:04:53.159
<v Speaker 1>to it for very much longer. That's that's a positive.

0:04:53.240 --> 0:04:56.480
<v Speaker 1>That's a key question because the Cuban government hasn't seemed

0:04:56.640 --> 0:04:59.800
<v Speaker 1>very interested in a lot of what American companies are

0:05:00.000 --> 0:05:02.919
<v Speaker 1>shing down there and offer no. And it's precisely because

0:05:03.000 --> 0:05:06.840
<v Speaker 1>they understand that American style globalization will mean the end

0:05:06.960 --> 0:05:09.840
<v Speaker 1>of that regime pretty quickly. But the Cubans don't have

0:05:09.960 --> 0:05:13.719
<v Speaker 1>other places to turn. They're not getting huge cash from China,

0:05:14.160 --> 0:05:18.200
<v Speaker 1>the Soviet unions not around anymore, um, the Russians don't

0:05:18.240 --> 0:05:21.200
<v Speaker 1>really care. And the Venezuelans, who were the one hold

0:05:21.240 --> 0:05:23.880
<v Speaker 1>out that we're putting cash in, I mean, they're about

0:05:23.880 --> 0:05:25.960
<v Speaker 1>to default by the end of this year. And Maduro

0:05:26.080 --> 0:05:28.680
<v Speaker 1>is basically done. Low oil prices will do that to you.

0:05:28.960 --> 0:05:31.120
<v Speaker 1>So Cuba had nowhere else to go. And when the

0:05:31.200 --> 0:05:34.360
<v Speaker 1>Americans cracked their foot in the door. The relation, the

0:05:34.480 --> 0:05:38.880
<v Speaker 1>size of that relationship is so overwhelmingly asymmetrical that it's

0:05:38.920 --> 0:05:41.280
<v Speaker 1>going to be almost impossible for the Cuban government to

0:05:41.320 --> 0:05:44.040
<v Speaker 1>stand up and say, no, mass we can't handle it anymore. Right.

0:05:44.080 --> 0:05:47.360
<v Speaker 1>I noticed Tom that he had tweeted over the weekend, Uh,

0:05:47.440 --> 0:05:50.279
<v Speaker 1>they withstood fifty years of embargo, but can they withstand

0:05:50.400 --> 0:05:55.760
<v Speaker 1>Starbucks or five minutes of Starbucks as well? Good morning everyone.

0:05:55.800 --> 0:05:59.480
<v Speaker 1>Bloomberg's Surveillance brought you by invest Goo to the day's headlines.

0:05:59.480 --> 0:06:04.080
<v Speaker 1>Have you searched for more investment views? Investcos experts can

0:06:04.160 --> 0:06:08.279
<v Speaker 1>help find out the latest thought leadership at the investco blog.

0:06:08.440 --> 0:06:13.760
<v Speaker 1>Visit investco dot com, slash us to subscribe. Ian Bremmer

0:06:13.839 --> 0:06:18.920
<v Speaker 1>with us With a huge bout of international relations going on,

0:06:19.000 --> 0:06:22.680
<v Speaker 1>the President goes to Cuba. I guess we have an

0:06:22.760 --> 0:06:26.400
<v Speaker 1>Obama doctrine. I guess that's open to debate. Do we

0:06:26.520 --> 0:06:31.719
<v Speaker 1>have a Clinton or Trump doctrine? Discernible? Yet? The Clinton doctrine,

0:06:32.000 --> 0:06:34.400
<v Speaker 1>certainly when she was Secretary of State I think was

0:06:34.440 --> 0:06:36.760
<v Speaker 1>pretty clear. It's that the Middle East is the past,

0:06:37.400 --> 0:06:44.080
<v Speaker 1>Asia is the future, China economics, but also security, that

0:06:44.240 --> 0:06:47.000
<v Speaker 1>the concern should be about the rise of China. You

0:06:47.080 --> 0:06:48.840
<v Speaker 1>want to get them on side. If you can't, you

0:06:48.920 --> 0:06:52.000
<v Speaker 1>want to have options. Their containment is an option if

0:06:52.120 --> 0:06:55.520
<v Speaker 1>the Chinese don't behave well. And that's both a security

0:06:55.520 --> 0:06:59.280
<v Speaker 1>concern but also a rise of state capitalism concern. So

0:06:59.560 --> 0:07:02.640
<v Speaker 1>I've think that Hillary laid that out. She certainly made

0:07:02.640 --> 0:07:04.800
<v Speaker 1>plenty of mistakes when she was Secretary of State. She

0:07:04.880 --> 0:07:08.040
<v Speaker 1>had some wins to um. But if you don't have

0:07:08.120 --> 0:07:11.560
<v Speaker 1>a problem with clarity of thinking for what she the

0:07:11.600 --> 0:07:14.720
<v Speaker 1>way that Hillary viewed the world um, and it's fairly

0:07:14.760 --> 0:07:17.200
<v Speaker 1>pragmatic too. I mean, she was the one that said

0:07:17.600 --> 0:07:20.679
<v Speaker 1>that on China that it's hard to lecture your banker

0:07:20.840 --> 0:07:23.760
<v Speaker 1>on human rights. And that's the kind of thing that

0:07:23.840 --> 0:07:27.320
<v Speaker 1>you wouldn't necessarily expect, for example, from some of the

0:07:27.600 --> 0:07:30.960
<v Speaker 1>you know, sort of more traditional indispensable America type leaders

0:07:31.160 --> 0:07:33.040
<v Speaker 1>that we've seen on the repolicy. Trump is going to

0:07:33.120 --> 0:07:35.000
<v Speaker 1>go before to be you know, I mean, I mean

0:07:35.040 --> 0:07:38.600
<v Speaker 1>it's within a general and respectful phrase, the Israeli lobby,

0:07:39.040 --> 0:07:42.480
<v Speaker 1>we're gonna learn more about Mr Trump's doctrine in the

0:07:42.680 --> 0:07:45.640
<v Speaker 1>coming weeks. Do you discern it at this time? Can

0:07:45.680 --> 0:07:48.240
<v Speaker 1>you give us a briefing on what you've seen so

0:07:48.360 --> 0:07:50.360
<v Speaker 1>far and foreign policy. I don't know why you'd think

0:07:50.400 --> 0:07:53.400
<v Speaker 1>we're going to learn anymore from Trump. We've gotten, you know,

0:07:53.560 --> 0:07:57.000
<v Speaker 1>Trump saturation coverage for about eight months now, and we've

0:07:57.080 --> 0:08:01.640
<v Speaker 1>learned nothing but repetition but disclosure. Ambassador Hass was on

0:08:01.800 --> 0:08:04.320
<v Speaker 1>from the Council for Relations. He made clear he speaks

0:08:04.360 --> 0:08:07.000
<v Speaker 1>to everyone. He talked to Trump, but he he talks

0:08:07.040 --> 0:08:09.760
<v Speaker 1>to everybody as well. Let's sefr Yeah. Well, I don't

0:08:09.760 --> 0:08:11.840
<v Speaker 1>have a problem with the fact that Richard hass runs

0:08:11.880 --> 0:08:14.760
<v Speaker 1>the most important foreign policy institution in this country, the

0:08:14.800 --> 0:08:17.480
<v Speaker 1>Counsel and Foreign Relations, And I think it's it's almost

0:08:17.480 --> 0:08:20.880
<v Speaker 1>incumbent on him, given his job to make himself available

0:08:21.120 --> 0:08:24.040
<v Speaker 1>to the to the candidates of any stripe on both sides,

0:08:24.360 --> 0:08:26.520
<v Speaker 1>Trump is the one that you might consider saying no

0:08:26.760 --> 0:08:30.480
<v Speaker 1>to simply because he reflects such a subversion of the

0:08:30.640 --> 0:08:33.880
<v Speaker 1>values that the Americans were actually created their system on.

0:08:34.280 --> 0:08:37.440
<v Speaker 1>But look, the fact is that Trump doesn't have foreign policy.

0:08:37.840 --> 0:08:41.720
<v Speaker 1>Trump has a set of excuses that are ready made

0:08:42.160 --> 0:08:46.360
<v Speaker 1>for American populism. They are. You're not feeling good, and

0:08:46.440 --> 0:08:49.119
<v Speaker 1>the reason for it is because you're being taken advantage

0:08:49.160 --> 0:08:51.560
<v Speaker 1>of by all of these other countries. And I'm gonna

0:08:51.600 --> 0:08:53.839
<v Speaker 1>give you permission to hate them. I'm gonna give you

0:08:53.880 --> 0:08:56.480
<v Speaker 1>permission to point the finger. It's their fault. It's a

0:08:56.559 --> 0:08:59.680
<v Speaker 1>very it's an American exceptionalism in a very narrow way.

0:09:00.040 --> 0:09:02.800
<v Speaker 1>And we're gonna blame the Mexicans for raping our women.

0:09:03.200 --> 0:09:06.480
<v Speaker 1>We're gonna blame the Europeans for taking advantage of our

0:09:06.720 --> 0:09:10.000
<v Speaker 1>security largesse and being refused to pay it freeloading. We're

0:09:10.040 --> 0:09:13.080
<v Speaker 1>gonna blame the Muslim States for creating terrorists that want

0:09:13.120 --> 0:09:14.560
<v Speaker 1>to come over and blow us up. And we're gonna

0:09:14.559 --> 0:09:18.520
<v Speaker 1>blame the Chinese and the Japanese from stealing us blind if.

0:09:18.679 --> 0:09:22.080
<v Speaker 1>If that's a doctrine, Uh, the average Americans should want

0:09:22.160 --> 0:09:26.480
<v Speaker 1>no part of it. What is it that we should

0:09:26.600 --> 0:09:30.800
<v Speaker 1>want in the next president? You mentioned that we Obama

0:09:30.920 --> 0:09:33.720
<v Speaker 1>leaves office with the US maybe in worse shape overseas

0:09:34.240 --> 0:09:37.959
<v Speaker 1>than it was. What we turn that around? What do

0:09:38.040 --> 0:09:40.520
<v Speaker 1>we need to do? Well? Look, I mean, some of it,

0:09:40.920 --> 0:09:43.240
<v Speaker 1>um is that it's just getting harder. Some of it

0:09:43.400 --> 0:09:46.480
<v Speaker 1>is that the world, the foreign policy influence for the

0:09:46.559 --> 0:09:48.760
<v Speaker 1>United States is going to be uphill because in the

0:09:48.800 --> 0:09:51.679
<v Speaker 1>Middle East there are no easy solutions. No one's offering them,

0:09:51.760 --> 0:09:56.439
<v Speaker 1>not the Democrats or the Republicans. And China increasingly has power,

0:09:56.559 --> 0:09:59.199
<v Speaker 1>economic power in particular, and is willing to use it

0:09:59.240 --> 0:10:01.880
<v Speaker 1>in ways that will subvert u s national interests. And

0:10:01.960 --> 0:10:04.360
<v Speaker 1>that's so it's just a harder slog for the Americans.

0:10:04.600 --> 0:10:07.800
<v Speaker 1>But what you don't want is for American allies to

0:10:07.920 --> 0:10:10.440
<v Speaker 1>not be certain that they can count on the commitments

0:10:10.520 --> 0:10:13.680
<v Speaker 1>that the Americans have set up for decades and decades.

0:10:13.720 --> 0:10:16.559
<v Speaker 1>You want the alliances to be If there's gonna be

0:10:16.640 --> 0:10:19.160
<v Speaker 1>a slip, you want that slip to be as incremental

0:10:19.320 --> 0:10:22.000
<v Speaker 1>as possible. You don't want the alliances falling apart. You

0:10:22.080 --> 0:10:24.480
<v Speaker 1>want people still wanting to use the dollar. You want

0:10:24.520 --> 0:10:26.720
<v Speaker 1>people still wanting to come to the US and study

0:10:26.800 --> 0:10:30.080
<v Speaker 1>and make lives here. Um. And you also want them

0:10:30.080 --> 0:10:34.160
<v Speaker 1>feeling that American influence and projection of power is significant.

0:10:35.240 --> 0:10:37.760
<v Speaker 1>Let's come back with Ian Bremer from your Asia group,

0:10:37.840 --> 0:10:41.600
<v Speaker 1>Tom A tough world. Yeah, it is interesting that there

0:10:41.760 --> 0:10:45.840
<v Speaker 1>lots to talk about with dr the career. The markets

0:10:46.080 --> 0:10:53.000
<v Speaker 1>very quiet right now, futures up one. That's our surveillance,

0:10:53.040 --> 0:10:55.199
<v Speaker 1>brought to you by MASDA White Planes. Visit MASDA White

0:10:55.240 --> 0:10:58.440
<v Speaker 1>Planes dot com. Here's Michael Barr with news headlines. Mike Tom,

0:10:58.520 --> 0:11:01.040
<v Speaker 1>thank you very much. President of bob and Cuban President

0:11:01.120 --> 0:11:04.439
<v Speaker 1>our Lekestro will sit down at Havannah's Palace of the

0:11:04.480 --> 0:11:08.480
<v Speaker 1>Revolution today. The president and his family arrived yesterday in Havannah.

0:11:08.960 --> 0:11:13.160
<v Speaker 1>President Raoul Castro will formally greet President Obama today. North

0:11:13.240 --> 0:11:17.480
<v Speaker 1>Korea is continuing its weapon launches. It is apparently carrying

0:11:17.600 --> 0:11:21.680
<v Speaker 1>out in response to South Korea the US military drills

0:11:22.000 --> 0:11:25.720
<v Speaker 1>it sees as a provocation. Soul officials say the North

0:11:25.880 --> 0:11:30.240
<v Speaker 1>fired five short range projectiles into the sea today. Vice

0:11:30.280 --> 0:11:34.120
<v Speaker 1>President Joe Biden defended President Obama's policy towards Israel and

0:11:34.240 --> 0:11:37.079
<v Speaker 1>took a swipe at Donald Trump. Biden, speaking to the

0:11:37.160 --> 0:11:41.800
<v Speaker 1>American Israel Public Affairs Committees policy conference in Washington yesterday,

0:11:42.160 --> 0:11:45.280
<v Speaker 1>said the future belongs to the bridge builders, not the

0:11:45.440 --> 0:11:48.800
<v Speaker 1>wall builders. Global News twenty four hours a day, powered

0:11:48.840 --> 0:11:51.920
<v Speaker 1>by our two hundred journalists and more than a hundred

0:11:51.960 --> 0:11:54.720
<v Speaker 1>fifty news bureaus from around the world. Michael Bar, Mike Tom,

0:11:55.440 --> 0:11:57.839
<v Speaker 1>thank you so much. Michael greatly appreciate it. With Ian

0:11:57.920 --> 0:12:01.720
<v Speaker 1>Bremer on America's foreign I we'll see this is Bloomberg's surveillance.

0:12:05.840 --> 0:12:08.480
<v Speaker 1>Bloomberg surveillance brought you by your tri State BMW center's

0:12:08.559 --> 0:12:11.280
<v Speaker 1>visits of online at tri State BMW dot com. At BMW,

0:12:11.559 --> 0:12:14.200
<v Speaker 1>they make only one thing, the ultimate driving machine,