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Speaker 1: one percent. I'm Charlie Pellett. That's a Bloomberg business flash.
Speaker 1: You're listening to taking stock with Cale and pim Box
Speaker 1: on Bloomberg Radio. Republican candidate Donald Trump he emphasizes his
Speaker 1: business savvy as one reason to make him president. But
Speaker 1: is he business savvy about the US treasury market? Let's
Speaker 1: find out more from Jonathan Nicholson. He is Capitol Hill
Speaker 1: budget reporter for Bloomberg b NA, joining us from Arlington, Virginia,
Speaker 1: the metro area Washington, d C, home to Bloomberg twelve
Speaker 1: and nine. I beg your pardon one and one oh
Speaker 1: five point seven h d F M h D two.
Speaker 1: Jonathan tell us what exactly is this Trump talk? And
Speaker 1: is Wall Street taking him seriously? Well? The excuse me? Um,
Speaker 1: he talked about bondholders taking haircuts, discounts on bombs. He's
Speaker 1: talked about, you know, talked about a trade getting into
Speaker 1: retarritory trade uh A wars specifically about who cares if
Speaker 1: there's a who the hell cares if there's a trade
Speaker 1: war with China. Um. These are ordinary things that would
Speaker 1: make markets sort of spoopd uh for coming from a
Speaker 1: major part of the nominee. But so far, UM, really
Speaker 1: markets have shown very little reaction to this. So the
Speaker 1: debate is sort of come to why haven't they shown
Speaker 1: that reaction yet? Well? Could it be simply that they
Speaker 1: know that trade wars are not conducted solely by presidents.
Speaker 1: Congress has to be involved to uh, And so they
Speaker 1: realize that a president can push for certain things, but
Speaker 1: they don't necessarily get them. That's right there. There's sort
Speaker 1: of three theories. UH. One is is that some people
Speaker 1: say that they just simply don't believe that he doesn't
Speaker 1: believe what he's saying. That he's just started saying these
Speaker 1: things to get past the geop primary UH, to get
Speaker 1: to the right of the rest of what used to
Speaker 1: be the rest of the field. UM, and then he
Speaker 1: comes back to the general he'll say something much more,
Speaker 1: much more in line with mainstream thinking. The other aspect
Speaker 1: is yes, uh. Some people, such as the Congressman Dave Ratt,
Speaker 1: point out that some of these things are some things
Speaker 1: he cannot do on his own that he would have
Speaker 1: to have Congressional approval for, and therefore Congress would act
Speaker 1: to sort of a moderating influence even if he did
Speaker 1: believe some of these things. Uh. There's a third school
Speaker 1: of thought, um, which I think we may be borne
Speaker 1: out a little bit by Poles at this point, which
Speaker 1: is that simply people Wall Street at this point, you know,
Speaker 1: things still early, and that the odds of Trump being
Speaker 1: elected are still very much on the negative side. So
Speaker 1: it's not really a risk to be incorporating into into
Speaker 1: their into their trading decisions at this point. Well, let's
Speaker 1: bring another voice. He's not exactly Jonathan, but he is
Speaker 1: a John. Uh into this conversation now, John Hylemans in studio.
Speaker 1: He is host of with all due respect on Bloomberg
Speaker 1: Television and radio every day at five o'clock Wall Street Time.
Speaker 1: So what do you make of this question? John Hyleman,
Speaker 1: You've been following campaigns like this for a long time.
Speaker 1: Wall Street seems to be taken and stride. Why I'm sorry,
Speaker 1: what the precise question is? With the precise question, my
Speaker 1: friend is um, Donald Trump talks about trade wars, he
Speaker 1: talks about bonds in China, and you if people were
Speaker 1: taking seriously this is the question that Jonathan Nicholson has
Speaker 1: been raising Bloomberg b n A. So what gives Why
Speaker 1: do you think that's so? What would what do your
Speaker 1: sources tell you? Well, I think there's um. You know
Speaker 1: that The thing with Trump, right is that I think, uh,
Speaker 1: there's no doubt that if we get closer and closer
Speaker 1: to election day and people increasingly believe that Donald Trump
Speaker 1: will be president number one and number two, the Donald
Speaker 1: Trump actually means many of the things he says on
Speaker 1: economic policy that there will be um consequences in the
Speaker 1: financial markets. I think those two are two big contingencies
Speaker 1: at the moment still, right, One of which is people
Speaker 1: don't necessarily think that Trump is going to be the president.
Speaker 1: But more importantly, he everything he's been saying of late
Speaker 1: suggests that virtually everything he says on policy is I'm
Speaker 1: gonna use their variety of potential words here, right. One
Speaker 1: potential word would be um just a posture, Another would
Speaker 1: be a negotiating position. A third would be a fraud. Right.
Speaker 1: I mean, depending on what your your predisposition is. Some
Speaker 1: people think that Trump. There's there's one school of thought,
Speaker 1: which is Trump is a hundred percent transactional. He said
Speaker 1: a bunch of things in the course of the Republican
Speaker 1: nomination fight in order to get nominated, but he doesn't
Speaker 1: really believe any of those things. He's just saying what
Speaker 1: it takes to get elected. Other people think he basically
Speaker 1: believes most of what he says, but he's willing to negotiate.
Speaker 1: He's taken extreme positions that he understands he's going to
Speaker 1: have to back off from. UM. And other people believe
Speaker 1: he believes absolutely everything he says, he's a hundred percent
Speaker 1: sincere and that that would be scary if that were
Speaker 1: true on these questions of economic policy and trade, so
Speaker 1: for as as a good example. No one knows though
Speaker 1: at this point right and Trump seems to be trying
Speaker 1: to seed people's notion see the notion with people that
Speaker 1: that that many of the things he says are at
Speaker 1: minimum highly negotiable UM, and potentially entirely negotiable. Uh. And
Speaker 1: there are other people, I think who have this the
Speaker 1: final thing that the people believe. And again Mitch McConnell
Speaker 1: is someone and others who says things like this where
Speaker 1: they say, look, um, it sort of matters with Donald
Speaker 1: Trump thinks. But in the end, UM, accepting matters of
Speaker 1: national security, the president is doesn't have pure executive authority
Speaker 1: to do much of anything. If he wanted to pass
Speaker 1: a law, I'd have to go through Congress. They're all
Speaker 1: kinds of institutional restraints that would keep him from doing
Speaker 1: some of the more extreme things that he suggested. And
Speaker 1: so everyone just calmed down. The American system is designed
Speaker 1: to keep anyone from doing anything too radical if they
Speaker 1: get into the Oval office. John Hyman Europe well too.
Speaker 1: Based on your experience and based on covering this campaign,
Speaker 1: where do you fall in those three different areas of
Speaker 1: Donald Trump investigation analysis? Don't know. I don't know the answer,
Speaker 1: I really don't. I mean, if you looked at the
Speaker 1: history Trump's history, UM, there are some issues where um.
Speaker 1: For instance, on social issues, Trump's position on abortion, for instance,
Speaker 1: where um, not that long ago he was not only
Speaker 1: pro choice, but in favor of things like partial birth abortion,
Speaker 1: which he thought were fine. Now he says he's pro life.
Speaker 1: That seems to me to be the one that's most
Speaker 1: likely to be transparently um, a position that he's taken
Speaker 1: for purely political reasons on questions of foreign of his
Speaker 1: view of of of how the world economy works. He
Speaker 1: has been somewhat more cantilest for a long time, and
Speaker 1: his attacks on China, has attacks on Japan, his view
Speaker 1: of how foreign trade works, of how free trade hurts
Speaker 1: American workers, etcetera. Those seem to be more consistently applied
Speaker 1: across a long a period of time in his life,
Speaker 1: and so they seem to me to be maybe closer
Speaker 1: to where his actual heart and head are. But again,
Speaker 1: because he is a very transactional person, he is a
Speaker 1: dealmaker at heart. Right, it does even mean that even
Speaker 1: in those instances, those positions that he's put forward, like
Speaker 1: specific tariffs he wants to put on China, for instance,
Speaker 1: those may be really in the category of negotiating positions
Speaker 1: rather than things he will push for in their most
Speaker 1: absolute form. Uh. The primaries are coming up next week.
Speaker 1: They're big ones, certainly in the size of the states
Speaker 1: and the potential number of delicates, even though the presumptive
Speaker 1: nominees for both parties look, you know, like they're pretty
Speaker 1: much almost solid in that position, John Right, So you know,
Speaker 1: we have these a bunch of primaries coming up on Tuesday.
Speaker 1: The two big ones are California New Jersey, which have
Speaker 1: the biggest delegate halls. Obviously that there, Donald Trump is
Speaker 1: already um in in terms of the math has already
Speaker 1: gone over the magic number on the Republican side, and
Speaker 1: so he is officially kind of the presumptive nominee. That's
Speaker 1: not the case yet for Hillary Clinton. But no matter
Speaker 1: what happens on Tuesday, um she will um have. Because
Speaker 1: of the way Democrats allocate their delegates, she will um
Speaker 1: uh again with certainty she will have between her pledge
Speaker 1: delegates and her commitments from super delegates, she will go
Speaker 1: over the Democratic magic number on Tuesday night. The big
Speaker 1: issue in the Democratic Party is not about the delegate halls.
Speaker 1: It's about um bragging rights and the effect psychologically of
Speaker 1: what happens in California, particularly on Bernie Sanders, is he
Speaker 1: if he wins California, that may embolden him to continue
Speaker 1: fighting on even after the Primers event, and fighting on
Speaker 1: all the way to Philadelphia. The reason the Clinton campaign
Speaker 1: really wants to win California is now spending money there
Speaker 1: on the air, sending Bill Clinton there, sending Hillary Clinton there.
Speaker 1: They want to win so that they can strengthen their
Speaker 1: claim that it's time for Bernie Sanders to stop and
Speaker 1: to try to put his efforts into unifying the party
Speaker 1: rather than continuing to fight I'm Jonathan Nicholson, our Capital
Speaker 1: Hill budget reporter for Bloomberg BNA. Still with us, and
Speaker 1: Jonathan want to put to you the issue of trade
Speaker 1: wars that John Hayman raised. Trump says that he would
Speaker 1: rewrite international trade agreements. Has that reverberated in financial markets? UM,
Speaker 1: not so far. Uh. The interesting thing is if you
Speaker 1: kind of if you go and take a look at
Speaker 1: sort of like his written policy in terms of what
Speaker 1: he was put on his website, UM, in terms of
Speaker 1: what they're counting as policy paper type type material, UM,
Speaker 1: he actually talks more about designating China's a currency manipulator, UM,
Speaker 1: rather than more about tariffs. He'll talk about the tariffs
Speaker 1: UH and so on on the campaign trail and and
Speaker 1: and be very loud about it. But actually when you
Speaker 1: look at what he's got to put on paper, he's
Speaker 1: much more talked about, uh, doing this designation as a
Speaker 1: currency manipulator, which is certainly sort of an ongoing debate
Speaker 1: here in Washington for some time. And he's only talked
Speaker 1: about retaliatory tariffs UM in light of if China didn't
Speaker 1: open up their markets. That does play a little bit
Speaker 1: into into UH. John's point about transactionality that they might
Speaker 1: say that his arc maybe worse than his bike in
Speaker 1: some respect. Thank you very much, Jonathan Nicholson, Capitol Hill
Speaker 1: budget reporter for Bloomberg and b n A, or thanks
Speaker 1: to John Heilman, co host, with all due respect, weeknights
Speaker 1: five pm Bloomberg Television and Bloomberg nine and nine one
Speaker 1: in Washington, d C.