WEBVTT - Bloomberg's Nicholson, Heilemann, on Trump Rhetoric (Audio) 0:00:02.240 --> 0:00:05.640 Global business news twenty four hours a day. If Bloomberg 0:00:05.680 --> 0:00:08.760 dot Com, the Radio plus Mobile Act and on your radio. 0:00:09.039 --> 0:00:13.360 This is a Bloomberg Business Flash from Bloomberg World Headquarters. 0:00:13.480 --> 0:00:16.720 I'm Charlie tell it is a down Friday for US 0:00:16.840 --> 0:00:20.119 equities Jobs Friday. This update brought to you by Van 0:00:20.360 --> 0:00:23.560 Eck Vectors e t f s. Expect more from your 0:00:23.640 --> 0:00:28.080 muti's target tax exempt income by maturity and credit quality, 0:00:28.440 --> 0:00:32.120 all with low cost ETFs. Visit van Eck dot com 0:00:32.200 --> 0:00:38.040 slash muti van Eck access the opportunities. Stocks paired losses 0:00:38.080 --> 0:00:41.560 as the dollar fell, treasuries and gold are gaining after 0:00:41.680 --> 0:00:44.760 US employers added the fewest jobs in almost six years 0:00:44.880 --> 0:00:47.360 in made bolstering the case for the Fed to leave 0:00:47.479 --> 0:00:51.560 rates lower for longer. The SMP five index down four 0:00:51.640 --> 0:00:54.840 to one, a drop of two tenths of one percent, 0:00:55.360 --> 0:00:59.200 as stacked down twenty three points to seven, a drop 0:00:59.240 --> 0:01:02.920 off point five percent down. Industrials down twenty a drop 0:01:03.000 --> 0:01:06.280 of point one percent. Gold surging two and a half 0:01:06.319 --> 0:01:09.520 percent to thirty ninety. The ounce thirty up thirty ninety, 0:01:09.520 --> 0:01:15.480 the ounce to twelve fifty crewed down one barrel on 0:01:15.600 --> 0:01:18.560 West Texas Intermedia crwede a drop of eight tenths of 0:01:18.680 --> 0:01:23.280 one percent. I'm Charlie Pellett. That's a Bloomberg business flash. 0:01:23.600 --> 0:01:27.040 You're listening to taking stock with Cale and pim Box 0:01:27.160 --> 0:01:32.480 on Bloomberg Radio. Republican candidate Donald Trump he emphasizes his 0:01:32.640 --> 0:01:36.959 business savvy as one reason to make him president. But 0:01:37.240 --> 0:01:41.400 is he business savvy about the US treasury market? Let's 0:01:41.440 --> 0:01:44.399 find out more from Jonathan Nicholson. He is Capitol Hill 0:01:44.440 --> 0:01:48.920 budget reporter for Bloomberg b NA, joining us from Arlington, Virginia, 0:01:49.080 --> 0:01:53.360 the metro area Washington, d C, home to Bloomberg twelve 0:01:53.880 --> 0:01:56.760 and nine. I beg your pardon one and one oh 0:01:56.840 --> 0:01:59.760 five point seven h d F M h D two. 0:02:00.720 --> 0:02:03.640 Jonathan tell us what exactly is this Trump talk? And 0:02:03.840 --> 0:02:09.840 is Wall Street taking him seriously? Well? The excuse me? Um, 0:02:09.880 --> 0:02:15.200 he talked about bondholders taking haircuts, discounts on bombs. He's 0:02:15.240 --> 0:02:19.239 talked about, you know, talked about a trade getting into 0:02:19.240 --> 0:02:23.760 retarritory trade uh A wars specifically about who cares if 0:02:23.760 --> 0:02:25.560 there's a who the hell cares if there's a trade 0:02:25.560 --> 0:02:28.280 war with China. Um. These are ordinary things that would 0:02:28.280 --> 0:02:30.919 make markets sort of spoopd uh for coming from a 0:02:30.960 --> 0:02:34.720 major part of the nominee. But so far, UM, really 0:02:34.760 --> 0:02:38.080 markets have shown very little reaction to this. So the 0:02:38.120 --> 0:02:41.480 debate is sort of come to why haven't they shown 0:02:41.480 --> 0:02:46.000 that reaction yet? Well? Could it be simply that they 0:02:46.080 --> 0:02:50.480 know that trade wars are not conducted solely by presidents. 0:02:50.760 --> 0:02:53.799 Congress has to be involved to uh, And so they 0:02:53.880 --> 0:02:56.200 realize that a president can push for certain things, but 0:02:56.240 --> 0:02:59.040 they don't necessarily get them. That's right there. There's sort 0:02:59.080 --> 0:03:03.680 of three theories. UH. One is is that some people 0:03:03.760 --> 0:03:07.240 say that they just simply don't believe that he doesn't 0:03:07.240 --> 0:03:09.359 believe what he's saying. That he's just started saying these 0:03:09.360 --> 0:03:12.960 things to get past the geop primary UH, to get 0:03:13.000 --> 0:03:14.239 to the right of the rest of what used to 0:03:14.240 --> 0:03:16.000 be the rest of the field. UM, and then he 0:03:16.040 --> 0:03:18.960 comes back to the general he'll say something much more, 0:03:19.080 --> 0:03:21.800 much more in line with mainstream thinking. The other aspect 0:03:21.880 --> 0:03:25.000 is yes, uh. Some people, such as the Congressman Dave Ratt, 0:03:25.680 --> 0:03:27.399 point out that some of these things are some things 0:03:27.440 --> 0:03:29.040 he cannot do on his own that he would have 0:03:29.080 --> 0:03:32.240 to have Congressional approval for, and therefore Congress would act 0:03:32.240 --> 0:03:34.400 to sort of a moderating influence even if he did 0:03:34.480 --> 0:03:37.480 believe some of these things. Uh. There's a third school 0:03:37.480 --> 0:03:39.960 of thought, um, which I think we may be borne 0:03:39.960 --> 0:03:41.960 out a little bit by Poles at this point, which 0:03:42.000 --> 0:03:45.240 is that simply people Wall Street at this point, you know, 0:03:45.320 --> 0:03:48.280 things still early, and that the odds of Trump being 0:03:48.280 --> 0:03:51.760 elected are still very much on the negative side. So 0:03:51.800 --> 0:03:55.240 it's not really a risk to be incorporating into into 0:03:55.280 --> 0:03:58.360 their into their trading decisions at this point. Well, let's 0:03:58.360 --> 0:04:01.880 bring another voice. He's not exactly Jonathan, but he is 0:04:01.920 --> 0:04:06.080 a John. Uh into this conversation now, John Hylemans in studio. 0:04:06.560 --> 0:04:09.680 He is host of with all due respect on Bloomberg 0:04:09.760 --> 0:04:12.800 Television and radio every day at five o'clock Wall Street Time. 0:04:13.320 --> 0:04:16.320 So what do you make of this question? John Hyleman, 0:04:16.360 --> 0:04:19.119 You've been following campaigns like this for a long time. 0:04:19.120 --> 0:04:23.880 Wall Street seems to be taken and stride. Why I'm sorry, 0:04:23.880 --> 0:04:27.240 what the precise question is? With the precise question, my 0:04:27.279 --> 0:04:31.040 friend is um, Donald Trump talks about trade wars, he 0:04:31.080 --> 0:04:34.720 talks about bonds in China, and you if people were 0:04:34.720 --> 0:04:37.920 taking seriously this is the question that Jonathan Nicholson has 0:04:37.960 --> 0:04:41.040 been raising Bloomberg b n A. So what gives Why 0:04:41.040 --> 0:04:43.000 do you think that's so? What would what do your 0:04:43.000 --> 0:04:46.080 sources tell you? Well, I think there's um. You know 0:04:46.160 --> 0:04:48.640 that The thing with Trump, right is that I think, uh, 0:04:49.040 --> 0:04:51.520 there's no doubt that if we get closer and closer 0:04:51.520 --> 0:04:54.680 to election day and people increasingly believe that Donald Trump 0:04:54.680 --> 0:04:57.240 will be president number one and number two, the Donald 0:04:57.279 --> 0:05:01.280 Trump actually means many of the things he says on 0:05:01.400 --> 0:05:05.080 economic policy that there will be um consequences in the 0:05:05.120 --> 0:05:09.200 financial markets. I think those two are two big contingencies 0:05:09.240 --> 0:05:11.679 at the moment still, right, One of which is people 0:05:11.800 --> 0:05:13.800 don't necessarily think that Trump is going to be the president. 0:05:13.800 --> 0:05:17.080 But more importantly, he everything he's been saying of late 0:05:17.440 --> 0:05:22.520 suggests that virtually everything he says on policy is I'm 0:05:22.520 --> 0:05:24.920 gonna use their variety of potential words here, right. One 0:05:24.920 --> 0:05:29.640 potential word would be um just a posture, Another would 0:05:29.680 --> 0:05:35.160 be a negotiating position. A third would be a fraud. Right. 0:05:35.200 --> 0:05:37.760 I mean, depending on what your your predisposition is. Some 0:05:37.839 --> 0:05:40.680 people think that Trump. There's there's one school of thought, 0:05:40.680 --> 0:05:44.000 which is Trump is a hundred percent transactional. He said 0:05:44.040 --> 0:05:46.400 a bunch of things in the course of the Republican 0:05:46.400 --> 0:05:49.440 nomination fight in order to get nominated, but he doesn't 0:05:49.440 --> 0:05:51.440 really believe any of those things. He's just saying what 0:05:51.480 --> 0:05:53.960 it takes to get elected. Other people think he basically 0:05:54.000 --> 0:05:57.599 believes most of what he says, but he's willing to negotiate. 0:05:57.600 --> 0:05:59.920 He's taken extreme positions that he understands he's going to 0:06:00.040 --> 0:06:02.440 have to back off from. UM. And other people believe 0:06:02.480 --> 0:06:04.760 he believes absolutely everything he says, he's a hundred percent 0:06:04.839 --> 0:06:08.280 sincere and that that would be scary if that were 0:06:08.320 --> 0:06:11.080 true on these questions of economic policy and trade, so 0:06:11.320 --> 0:06:14.000 for as as a good example. No one knows though 0:06:14.000 --> 0:06:16.400 at this point right and Trump seems to be trying 0:06:16.440 --> 0:06:20.880 to seed people's notion see the notion with people that 0:06:20.880 --> 0:06:23.360 that that many of the things he says are at 0:06:23.480 --> 0:06:28.480 minimum highly negotiable UM, and potentially entirely negotiable. Uh. And 0:06:28.600 --> 0:06:30.080 there are other people, I think who have this the 0:06:30.279 --> 0:06:32.400 final thing that the people believe. And again Mitch McConnell 0:06:32.480 --> 0:06:34.680 is someone and others who says things like this where 0:06:34.680 --> 0:06:36.880 they say, look, um, it sort of matters with Donald 0:06:36.880 --> 0:06:39.800 Trump thinks. But in the end, UM, accepting matters of 0:06:39.880 --> 0:06:43.680 national security, the president is doesn't have pure executive authority 0:06:43.680 --> 0:06:45.640 to do much of anything. If he wanted to pass 0:06:45.640 --> 0:06:47.160 a law, I'd have to go through Congress. They're all 0:06:47.200 --> 0:06:49.400 kinds of institutional restraints that would keep him from doing 0:06:49.440 --> 0:06:51.279 some of the more extreme things that he suggested. And 0:06:51.320 --> 0:06:54.320 so everyone just calmed down. The American system is designed 0:06:54.480 --> 0:06:57.160 to keep anyone from doing anything too radical if they 0:06:57.160 --> 0:07:00.440 get into the Oval office. John Hyman Europe well too. 0:07:00.960 --> 0:07:04.160 Based on your experience and based on covering this campaign, 0:07:04.520 --> 0:07:07.040 where do you fall in those three different areas of 0:07:07.360 --> 0:07:11.960 Donald Trump investigation analysis? Don't know. I don't know the answer, 0:07:12.000 --> 0:07:13.720 I really don't. I mean, if you looked at the 0:07:13.840 --> 0:07:18.800 history Trump's history, UM, there are some issues where um. 0:07:18.880 --> 0:07:22.040 For instance, on social issues, Trump's position on abortion, for instance, 0:07:22.040 --> 0:07:24.440 where um, not that long ago he was not only 0:07:24.520 --> 0:07:27.160 pro choice, but in favor of things like partial birth abortion, 0:07:27.200 --> 0:07:29.679 which he thought were fine. Now he says he's pro life. 0:07:30.120 --> 0:07:33.680 That seems to me to be the one that's most 0:07:33.800 --> 0:07:37.240 likely to be transparently um, a position that he's taken 0:07:37.280 --> 0:07:40.800 for purely political reasons on questions of foreign of his 0:07:40.920 --> 0:07:44.560 view of of of how the world economy works. He 0:07:44.600 --> 0:07:47.960 has been somewhat more cantilest for a long time, and 0:07:48.040 --> 0:07:51.600 his attacks on China, has attacks on Japan, his view 0:07:51.640 --> 0:07:54.920 of how foreign trade works, of how free trade hurts 0:07:54.920 --> 0:07:59.280 American workers, etcetera. Those seem to be more consistently applied 0:07:59.320 --> 0:08:01.080 across a long a period of time in his life, 0:08:01.080 --> 0:08:03.040 and so they seem to me to be maybe closer 0:08:03.080 --> 0:08:05.440 to where his actual heart and head are. But again, 0:08:05.520 --> 0:08:07.520 because he is a very transactional person, he is a 0:08:07.560 --> 0:08:10.200 dealmaker at heart. Right, it does even mean that even 0:08:10.240 --> 0:08:13.160 in those instances, those positions that he's put forward, like 0:08:13.440 --> 0:08:15.840 specific tariffs he wants to put on China, for instance, 0:08:16.000 --> 0:08:18.920 those may be really in the category of negotiating positions 0:08:19.000 --> 0:08:20.920 rather than things he will push for in their most 0:08:20.960 --> 0:08:25.240 absolute form. Uh. The primaries are coming up next week. 0:08:25.280 --> 0:08:28.600 They're big ones, certainly in the size of the states 0:08:28.640 --> 0:08:31.960 and the potential number of delicates, even though the presumptive 0:08:32.040 --> 0:08:35.600 nominees for both parties look, you know, like they're pretty 0:08:35.679 --> 0:08:38.600 much almost solid in that position, John Right, So you know, 0:08:38.640 --> 0:08:40.520 we have these a bunch of primaries coming up on Tuesday. 0:08:40.559 --> 0:08:42.560 The two big ones are California New Jersey, which have 0:08:42.559 --> 0:08:45.480 the biggest delegate halls. Obviously that there, Donald Trump is 0:08:45.520 --> 0:08:49.000 already um in in terms of the math has already 0:08:49.000 --> 0:08:52.040 gone over the magic number on the Republican side, and 0:08:52.040 --> 0:08:54.400 so he is officially kind of the presumptive nominee. That's 0:08:54.400 --> 0:08:57.120 not the case yet for Hillary Clinton. But no matter 0:08:57.240 --> 0:09:01.079 what happens on Tuesday, um she will um have. Because 0:09:01.080 --> 0:09:03.560 of the way Democrats allocate their delegates, she will um 0:09:03.880 --> 0:09:09.120 uh again with certainty she will have between her pledge 0:09:09.120 --> 0:09:11.480 delegates and her commitments from super delegates, she will go 0:09:11.559 --> 0:09:14.120 over the Democratic magic number on Tuesday night. The big 0:09:14.160 --> 0:09:17.640 issue in the Democratic Party is not about the delegate halls. 0:09:17.679 --> 0:09:22.360 It's about um bragging rights and the effect psychologically of 0:09:22.400 --> 0:09:25.600 what happens in California, particularly on Bernie Sanders, is he 0:09:25.679 --> 0:09:29.680 if he wins California, that may embolden him to continue 0:09:29.920 --> 0:09:32.640 fighting on even after the Primers event, and fighting on 0:09:32.679 --> 0:09:35.199 all the way to Philadelphia. The reason the Clinton campaign 0:09:35.200 --> 0:09:37.920 really wants to win California is now spending money there 0:09:37.920 --> 0:09:40.600 on the air, sending Bill Clinton there, sending Hillary Clinton there. 0:09:40.600 --> 0:09:43.360 They want to win so that they can strengthen their 0:09:43.400 --> 0:09:46.520 claim that it's time for Bernie Sanders to stop and 0:09:46.600 --> 0:09:49.120 to try to put his efforts into unifying the party 0:09:49.200 --> 0:09:53.280 rather than continuing to fight I'm Jonathan Nicholson, our Capital 0:09:53.360 --> 0:09:55.920 Hill budget reporter for Bloomberg BNA. Still with us, and 0:09:56.000 --> 0:09:57.959 Jonathan want to put to you the issue of trade 0:09:57.960 --> 0:10:02.080 wars that John Hayman raised. Trump says that he would 0:10:02.160 --> 0:10:08.280 rewrite international trade agreements. Has that reverberated in financial markets? UM, 0:10:08.320 --> 0:10:10.920 not so far. Uh. The interesting thing is if you 0:10:10.960 --> 0:10:12.280 kind of if you go and take a look at 0:10:12.320 --> 0:10:14.680 sort of like his written policy in terms of what 0:10:14.679 --> 0:10:17.040 he was put on his website, UM, in terms of 0:10:17.600 --> 0:10:21.920 what they're counting as policy paper type type material, UM, 0:10:22.160 --> 0:10:26.520 he actually talks more about designating China's a currency manipulator, UM, 0:10:26.760 --> 0:10:29.800 rather than more about tariffs. He'll talk about the tariffs 0:10:29.880 --> 0:10:32.760 UH and so on on the campaign trail and and 0:10:32.760 --> 0:10:35.640 and be very loud about it. But actually when you 0:10:35.679 --> 0:10:37.800 look at what he's got to put on paper, he's 0:10:37.880 --> 0:10:40.959 much more talked about, uh, doing this designation as a 0:10:41.000 --> 0:10:44.000 currency manipulator, which is certainly sort of an ongoing debate 0:10:44.080 --> 0:10:47.200 here in Washington for some time. And he's only talked 0:10:47.200 --> 0:10:50.600 about retaliatory tariffs UM in light of if China didn't 0:10:50.600 --> 0:10:52.720 open up their markets. That does play a little bit 0:10:52.720 --> 0:10:58.440 into into UH. John's point about transactionality that they might 0:10:58.480 --> 0:11:01.319 say that his arc maybe worse than his bike in 0:11:01.400 --> 0:11:04.480 some respect. Thank you very much, Jonathan Nicholson, Capitol Hill 0:11:04.480 --> 0:11:06.679 budget reporter for Bloomberg and b n A, or thanks 0:11:06.679 --> 0:11:10.079 to John Heilman, co host, with all due respect, weeknights 0:11:10.080 --> 0:11:12.760 five pm Bloomberg Television and Bloomberg nine and nine one 0:11:12.760 --> 0:11:13.679 in Washington, d C.