WEBVTT - Surveillance: Economic Data Is Decelerating, Golub Says 0:00:00.080 --> 0:00:13.040 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jai Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.320 Bloomberg dot Com, and of course on the Bloomberg And 0:00:33.440 --> 0:00:35.360 let's talk about that ugly tait a raut Europe just 0:00:35.360 --> 0:00:38.840 to begin with it. I think that really brings potentially 0:00:38.840 --> 0:00:43.120 brings forward an ECP decision from September to tomorrow. John, 0:00:43.240 --> 0:00:45.760 you're the first person to say that. I totally agree. 0:00:45.840 --> 0:00:49.400 Let's bring in Michael mcaplin Bag International Economics and Policy correspondent. 0:00:49.400 --> 0:00:52.040 Your thoughts, Mike, Well, let maybe the second person to 0:00:52.080 --> 0:00:54.400 say that it could easily bring forward the decision. The 0:00:54.400 --> 0:00:56.920 problem that they have is what are they going to do, 0:00:56.960 --> 0:00:58.600 which tool are they going to use, and how are 0:00:58.600 --> 0:01:00.600 they going to set that up? Presuma believe they've been 0:01:00.600 --> 0:01:02.640 working in that for some time. But the hope was 0:01:02.760 --> 0:01:05.240 that Jogging could float some ideas and see how they 0:01:05.280 --> 0:01:08.360 would play and see what kind of impact that might 0:01:08.440 --> 0:01:10.480 have in the markets, and they would have to forego 0:01:10.640 --> 0:01:14.240 that sort of preliminary testing period if they go ahead 0:01:14.240 --> 0:01:17.000 and move it, But you're right, the numbers so bad. 0:01:17.080 --> 0:01:21.560 German manufacturing the flash p m I forty three, and 0:01:21.600 --> 0:01:26.640 that signals significant contraction in manufacturing. That is definitely going 0:01:26.680 --> 0:01:29.360 to be a drag on growth there, Mike. The parallel 0:01:29.360 --> 0:01:32.039 of the analog to the United States is a linkage 0:01:32.040 --> 0:01:36.600 of the service sector economy to what's clearly a manufacturing recession. 0:01:37.040 --> 0:01:39.800 Is there service sector economy the same as our service 0:01:39.800 --> 0:01:43.880 sector economy. Well, they're manufacturing is a much bigger component 0:01:43.920 --> 0:01:45.840 of the German economy. But yes, they have a large 0:01:45.840 --> 0:01:50.320 services uh component to their economy and the services sector 0:01:50.440 --> 0:01:53.200 is hanging in there. Um. Their p m I for 0:01:53.280 --> 0:01:56.760 services fifty four, that's a trivial change from what it 0:01:56.840 --> 0:01:59.920 was a month ago. Uh, it's not services, it's manufacturing. 0:02:00.040 --> 0:02:01.640 A lot of that has to do with trade. Germany 0:02:01.680 --> 0:02:04.120 is one of the biggest trading nations in the world, 0:02:04.280 --> 0:02:09.600 and with China shut down and the US engaged in 0:02:09.639 --> 0:02:12.040 the trade war with them, You've got a lot of 0:02:12.040 --> 0:02:15.799 other nations that are engaged in many trade skirmishes. It's 0:02:15.840 --> 0:02:19.440 tough for Germany. Those trade talks can't begin fast enough 0:02:19.639 --> 0:02:22.080 for the likes of Germany in Europe, the United States 0:02:22.080 --> 0:02:26.959 and officials heading over to Beijing. I believe ka which 0:02:26.960 --> 0:02:30.440 is significant in and of itself. The Chinese are basically 0:02:30.440 --> 0:02:34.000 saying trade is trade. Let's keep it out of politics 0:02:34.040 --> 0:02:37.040 for now, because the politics between the US and I'm 0:02:37.080 --> 0:02:39.400 sure Bob will know more about those. Politics between the 0:02:39.480 --> 0:02:41.960 U S and China not very good right now. But 0:02:42.400 --> 0:02:44.880 if they can focus on the trade numbers and the 0:02:44.919 --> 0:02:47.480 trade negotiations and try to work on that, it does 0:02:47.520 --> 0:02:50.960 signal there may be farther away from getting somewhere, but 0:02:51.280 --> 0:02:53.680 at least they're starting. Let's bring in Bob Homa, shall 0:02:53.760 --> 0:02:56.079 we kissing your associates? Vice Chair, Bob, you know a 0:02:56.120 --> 0:02:58.840 little something about Germany. I'd love your thoughts on it. 0:02:59.280 --> 0:03:01.520 We're now looking at the water levels in the river Rhine, 0:03:01.560 --> 0:03:04.640 which which to anyone outside of Europe sounds absolutely ridiculous, 0:03:04.639 --> 0:03:07.360 but the weather is being so dry, so hot over 0:03:07.360 --> 0:03:10.239 in Europe that it's actually becoming an economic issue. Bob, 0:03:10.440 --> 0:03:12.519 your knowledge on the country, your knowledge on that area, 0:03:12.800 --> 0:03:15.679 just walkestry has significant. That is well, it is a significant. 0:03:15.760 --> 0:03:18.720 I live for summer in bun which was then the 0:03:18.760 --> 0:03:22.840 capital of what was then West Germany, and the Rhine 0:03:23.080 --> 0:03:27.840 is really the major artery for a lot of trade 0:03:27.919 --> 0:03:31.880 that goes from the western part of Germany through to 0:03:32.160 --> 0:03:35.440 Rotterdam and other ports and then to other parts of 0:03:35.440 --> 0:03:38.120 the world. So the Rhine is very important, and the 0:03:38.240 --> 0:03:40.840 trade link with China that Mike talked about a moment 0:03:40.880 --> 0:03:44.600 ago is also critically important. We talked in this country 0:03:44.640 --> 0:03:49.960 blithely about decoupling and delinking with China. China is an 0:03:50.000 --> 0:03:55.280 integral part of the manufacturing network in Europe and in 0:03:55.320 --> 0:03:58.480 the United States as well. And a weaker China, which 0:03:58.480 --> 0:04:04.080 we've seen their growths diminishing rather substantially, not disastrously, but 0:04:04.200 --> 0:04:07.520 certainly lower than it was, and that affects their demand 0:04:07.640 --> 0:04:11.000 for manufactured goods from Europe and from the United States 0:04:11.000 --> 0:04:15.480 as well. So some normalization of economic relations and alleviation 0:04:15.520 --> 0:04:19.000 of the threat of higher tariffs, and perhaps even reducing 0:04:19.000 --> 0:04:22.400 the tariffs um and improving the investment environment in China 0:04:22.440 --> 0:04:24.680 would be very helpful to the Europeans. It would take time, 0:04:24.680 --> 0:04:27.520 but it would have an impact on the market. The 0:04:27.600 --> 0:04:30.800 limited time that we have with you today, ambassadors extraordinary. 0:04:30.920 --> 0:04:34.760 I I am really taken them back by the diversity 0:04:34.839 --> 0:04:39.279 of the proposed cabinet or speculated cabinet of Prime Minister Johnson. 0:04:39.800 --> 0:04:43.000 It truly to me seems to be a generational shift 0:04:43.480 --> 0:04:48.920 in the United Kingdom. Yes, well, he's got an interesting agenda. 0:04:49.000 --> 0:04:51.560 One is he is and if you look at the 0:04:51.600 --> 0:04:54.440 Tory Party there it is a much more diverse party 0:04:54.440 --> 0:04:56.320 than it was ten years ago. When he wants to 0:04:56.320 --> 0:04:59.240 be able to pick people who represent various elements of 0:04:59.279 --> 0:05:03.240 the Tory Party. But basically on one issue he's going 0:05:03.279 --> 0:05:07.599 to get a lot of levers, people who want a 0:05:08.160 --> 0:05:12.440 bregsit and so he's going to be diversified ethnically and culturally. 0:05:12.600 --> 0:05:14.919 But on the question of Brexit, he's gonna want to 0:05:14.920 --> 0:05:20.440 have relatively hard line. But John it's extraordinary. An Indian 0:05:20.480 --> 0:05:24.599 family that went to Uganda thrown out of anyonever it was. 0:05:25.240 --> 0:05:29.600 We've got a Pakistani possibly appointed times actually just for 0:05:29.680 --> 0:05:32.120 pulling the headline, crossing the bloom bag that Sage Javid 0:05:32.680 --> 0:05:37.719 may be the chancellors. To many people, that's story news. 0:05:37.760 --> 0:05:44.839 But for Americans, the diversity proposed is unprecedented. There's no equivalent. Actually, 0:05:45.000 --> 0:05:46.720 the Conservative Party has done a really good job of 0:05:46.760 --> 0:05:49.520 bringing minority figures into the full front of the party 0:05:49.720 --> 0:05:51.839 and we could well see that in the Boris Johnson 0:05:51.880 --> 0:05:56.240 cabinet quite a big way. Yeah, and it's healthy for 0:05:56.240 --> 0:05:58.080 for Britain and I think it's healthy for Britain in 0:05:58.120 --> 0:06:00.920 the world because it enables them to have these links 0:06:00.920 --> 0:06:04.440 with other countries. How does Boris Johnson attend to the 0:06:04.480 --> 0:06:06.920 President of the United States. We've heard in the last 0:06:06.960 --> 0:06:11.320 hours they may visit three times to September. Well. I 0:06:11.320 --> 0:06:14.160 think Boris Johnson wants to a demonstrate with people that 0:06:14.200 --> 0:06:16.880 he can work with the United States. Be He's gonna 0:06:16.920 --> 0:06:21.960 want to develop some closer economic ties with the EU, 0:06:22.080 --> 0:06:24.040 even if there is a heart break that he wants 0:06:24.040 --> 0:06:26.719 to sure that there's some kind of trade deal. But 0:06:27.240 --> 0:06:30.159 if he cannot get that, then he's going to have 0:06:30.240 --> 0:06:32.440 to have some deal with the United States on trade. 0:06:32.440 --> 0:06:36.800 They're gonna need them. He sold his candidacy in part 0:06:36.839 --> 0:06:39.400 on the idea that we can leave the European Union 0:06:39.400 --> 0:06:42.240 with no real ill effects because will immediately be able 0:06:42.279 --> 0:06:44.200 to put together a trade deal with the United States. 0:06:44.520 --> 0:06:47.479 They haven't been legally allowed to negotiate because they're still 0:06:47.520 --> 0:06:49.560 part of the EU, but they've still been talking on 0:06:49.600 --> 0:06:52.479 the sidelines for quite some time. It's still it's still 0:06:52.520 --> 0:06:56.039 true that Europe's biggest trading partners. So finding some deal 0:06:56.120 --> 0:06:58.400 or trade with Europe's important. But if he can work 0:06:58.440 --> 0:07:01.720 with the United States, it's anthan's his leverage with the Europeans, 0:07:01.920 --> 0:07:03.920 and if he can't get a deal, he's gonna want 0:07:03.960 --> 0:07:06.160 a good deal with The question is will the United States, 0:07:06.440 --> 0:07:09.600 in the way it negotiates, give him a really good deal, 0:07:09.960 --> 0:07:11.480 and that's going to be a challenge. We're going to 0:07:11.560 --> 0:07:15.920 continue five hour discussion with Robert Harman's today. We'll try 0:07:15.960 --> 0:07:28.560 to get to death as well Alicia Levine with this 0:07:28.640 --> 0:07:30.200 bn y mel and Alicia, I want to go right 0:07:30.240 --> 0:07:33.440 to the terminal rate. Everything squeezing down. John mentioning of 0:07:33.560 --> 0:07:36.520 negative negative rates in Europe as well. You're supposed to 0:07:36.560 --> 0:07:39.920 flip the reciprocal and get a higher pe. What's the 0:07:40.000 --> 0:07:44.080 new twelve multiple? I mean value stocks were very twelve. 0:07:44.880 --> 0:07:48.240 Is it fifteen or is it eighteen? So I'm not 0:07:48.240 --> 0:07:49.880 going to put a number on it, but it's come on, 0:07:50.120 --> 0:07:52.119 come on, you look for a bank put a number 0:07:52.160 --> 0:07:56.119 on it, not the sales side. Um, you know, look 0:07:56.160 --> 0:07:58.680 it's higher. It's clearly higher. When your rates are lower, 0:07:58.960 --> 0:08:02.000 you discount rate as ower, your multiple as higher, and 0:08:02.160 --> 0:08:04.240 markets go up. And we see that not just in 0:08:04.280 --> 0:08:07.360 the US but also globally, which is why markets don't 0:08:07.440 --> 0:08:11.920 feel frothy. They feel more or less fairly valued, but 0:08:12.040 --> 0:08:17.040 not frothing four L four, not level five, Level four. 0:08:17.800 --> 0:08:20.240 I was listening to Andrew Sheets of Morgan Stanley quite 0:08:20.280 --> 0:08:22.880 recently and he makes a really interesting point. They make 0:08:22.920 --> 0:08:25.200 it very simple over at Morgan Stanley. We're going to 0:08:25.200 --> 0:08:27.360 get easing. That is the consensus view in the market 0:08:27.440 --> 0:08:30.520 right now. What is the accompanying data. Does it continue 0:08:30.560 --> 0:08:33.360 to weaken, does it stabilize, or does it accelerate? And 0:08:33.360 --> 0:08:35.360 that's the real judgment call here as to what is 0:08:35.360 --> 0:08:37.800 about to happen with risk assets and right now the 0:08:37.840 --> 0:08:39.640 Andrew Sheets take on this, and at least sure I'd 0:08:39.640 --> 0:08:41.600 love your insight on it as well. Is that if 0:08:41.640 --> 0:08:45.560 this market was bettering beyond just easing and to something 0:08:45.720 --> 0:08:51.040 like sustainable economic growth, why inflation expectations higher? Why commodities 0:08:51.120 --> 0:08:54.200 rallying across the whole complex? And why aren't long end 0:08:54.240 --> 0:08:56.719 rates pushing higher as well? Why aren't we factoring then 0:08:56.840 --> 0:09:00.000 those things? If we believe these central banks can end 0:09:00.040 --> 0:09:03.559 genia about a growth picture, Well, it's a great question, 0:09:03.679 --> 0:09:06.360 and we've had this discussion now for several weeks, which 0:09:06.440 --> 0:09:11.080 is what actually is the transition mechanism between lower rates 0:09:11.320 --> 0:09:13.840 and economic growth. And if you look at Germany and 0:09:13.880 --> 0:09:16.240 you look at Europe and the e c B, it's 0:09:16.280 --> 0:09:19.840 that's the perfect example of the muddy nature of it 0:09:19.920 --> 0:09:22.120 and how it's not actually direct transmission, because if you 0:09:22.120 --> 0:09:23.400 look at the p m I is coming out of 0:09:23.440 --> 0:09:27.840 Germany today, it's very clear that negative rates actually have 0:09:28.000 --> 0:09:31.840 not helped the economy or manufacturing, or investment or anything 0:09:31.840 --> 0:09:34.080 of the sort. So we come back to America and 0:09:34.120 --> 0:09:36.760 ask the question, what can the central bank here do 0:09:36.960 --> 0:09:39.840 by easing. Clearly it's going to be in the interest 0:09:39.920 --> 0:09:43.440 rate sectors, interest rates sensitive sectors of the economy, housing 0:09:43.960 --> 0:09:46.199 and autos. Autos have their own issue because there's a 0:09:46.200 --> 0:09:48.800 structural change going on in auto ownership. We can see 0:09:48.800 --> 0:09:51.720 that in right sharing, but we should see it there first. 0:09:52.120 --> 0:09:54.959 The other issue is on the on the yield question. 0:09:55.120 --> 0:09:59.840 If we think growth is stabilizing and turning, you can 0:10:00.040 --> 0:10:05.120 not escape the global negative yield here in the US, 0:10:05.360 --> 0:10:08.320 and you have thirteen trillion dollars of negative yielding debt 0:10:08.600 --> 0:10:10.520 and that's going to come into America and you can't 0:10:10.559 --> 0:10:13.120 you can't engineer your way out of it. It's capital flows. 0:10:13.200 --> 0:10:16.400 Let's talk about earnings quickly as well. Caterpillar delivering results. 0:10:16.440 --> 0:10:18.599 I believe in about eight minutes time looking at the 0:10:18.600 --> 0:10:20.720 semi Semmy's have had a massive run over the last 0:10:20.720 --> 0:10:23.480 couple of days. Taiwan Semmy I believe last week came 0:10:23.480 --> 0:10:25.839 out with some pretty decent numbers relative to an ugly 0:10:26.160 --> 0:10:29.839 expectation looking forward. I believe Texas Instruments did the same 0:10:29.840 --> 0:10:32.000 thing after the close yesterday. You'll take on that area 0:10:32.040 --> 0:10:34.600 of the market right now. I think it's interesting what 0:10:34.600 --> 0:10:36.960 what the semis are telling you is that cyclicals are 0:10:37.000 --> 0:10:39.800 the play here and the u S data is interesting 0:10:39.800 --> 0:10:42.480 because the u S data in June clearly was better 0:10:42.880 --> 0:10:45.160 than than April or May. So you have a turn 0:10:45.200 --> 0:10:47.280 here in the US. The semis are saying that you 0:10:47.320 --> 0:10:50.280 play the cyclicals because they're the forward looking that they're 0:10:50.320 --> 0:10:53.400 the forward looking sector. This is really the interesting thing here. 0:10:53.440 --> 0:10:56.600 While everybody is so worried about growth falling apart, corporates 0:10:56.600 --> 0:10:59.840 are coming in pretty decent. Are you happy advising clients 0:10:59.840 --> 0:11:01.800 for not to add a little bit more sticklaricality to 0:11:01.840 --> 0:11:04.839 that portfolios? Given the economic data we're seeing a swell. 0:11:05.240 --> 0:11:07.959 I am actually, and I am because you don't. You 0:11:08.000 --> 0:11:10.400 don't fight central banks. So you have the FED, you've 0:11:10.440 --> 0:11:12.600 got the e c B, you've got other central banks 0:11:12.640 --> 0:11:15.640 already easing as of last week, so you have to 0:11:15.679 --> 0:11:19.080 play into that. Your multiple is higher. You support corporates. 0:11:19.200 --> 0:11:21.280 You can't go bankrupt in Europe. How are you gonna 0:11:21.320 --> 0:11:24.120 go bankrupt? The ECB is buying every bond out there. 0:11:24.720 --> 0:11:28.000 We're too short. We've got to come back Alicia for 0:11:28.040 --> 0:11:42.400 another visit here soon out there and darkening the door 0:11:42.480 --> 0:11:45.280 right now. Timthey O'Brien spiriting with David Shipley all that 0:11:45.440 --> 0:11:48.760 his Bloomberg opinion. Many of you have seen him waxing 0:11:48.800 --> 0:11:52.560 philosophical in Washington, and this morning we begin by speaking 0:11:52.559 --> 0:11:57.080 to Mr O'Brien about these Mueller hearings. The photo this 0:11:57.120 --> 0:12:00.920 week out on Twitter of a lieutenant in vian and 0:12:00.960 --> 0:12:03.120 there was another photo the President doing whatever he was 0:12:03.120 --> 0:12:06.080 doing at the time. Do we really know who Robert 0:12:06.160 --> 0:12:08.800 Mueller is? I mean, do we have a clue who's 0:12:08.840 --> 0:12:12.839 actually gonna be the focus of attention in Washington this morning? Yeah? Yeah, 0:12:12.920 --> 0:12:15.720 Robert Mueller is a by the books prosecutor. He's he 0:12:15.840 --> 0:12:19.640 follows the rules. Uh, you know, he's a long standing 0:12:20.280 --> 0:12:25.240 classic Republican conservative. Um, he's well, why can't this president 0:12:25.280 --> 0:12:28.600 get along with him? Well, because it's not about politics. 0:12:28.679 --> 0:12:31.120 You know. Trump doesn't like the fact that Mueller's steward 0:12:31.000 --> 0:12:35.760 an investigation that potentially could have gone into into an 0:12:35.760 --> 0:12:39.120 exploration of Trump's finances, but certainly looked obviously at what 0:12:39.120 --> 0:12:43.520 happened in the twenty sixteen campaign and Trump's UM teen's 0:12:43.559 --> 0:12:46.200 interactions with Russians. He didn't like any of that because 0:12:46.240 --> 0:12:48.439 it was an existential threat. So Tim, we have two 0:12:48.480 --> 0:12:51.120 herrings today. One starts rather readly for Washington. The House 0:12:51.200 --> 0:12:54.800 Judiciary Committee hearring beginning hasn't been up to so early 0:12:54.880 --> 0:12:58.160 in three months. Tim's in New York here at Blomberg. 0:12:58.200 --> 0:13:00.199 Tim is still getting up early. Don't worry about you know, 0:13:00.320 --> 0:13:01.880 I'm not going to pay attention to Tom. Can you 0:13:01.880 --> 0:13:06.640 ask me a question, please, let's talk about it. What 0:13:06.640 --> 0:13:09.080 are you expecting? What are you expecting from this? Because 0:13:09.080 --> 0:13:11.080 so many of our listeners it just thinking about this. 0:13:11.120 --> 0:13:14.840 So I've got hours of testimony. Perhaps do I tune in? Well, 0:13:14.880 --> 0:13:17.880 here's the thing. The MULA report is an extraordinary document. 0:13:17.920 --> 0:13:20.720 Its fourty eight pages long, and it is one of 0:13:20.720 --> 0:13:24.680 the most incriminating documents ever put together about a sitting president. 0:13:24.880 --> 0:13:27.520 Here's the other reality. Most of the country and most 0:13:27.520 --> 0:13:30.480 politicians have not read it. So one of the things 0:13:30.559 --> 0:13:33.520 that's important about today is its political theater. This is 0:13:33.559 --> 0:13:36.880 the power of TV and radio to broadcast something that 0:13:36.880 --> 0:13:40.400 people aren't reading on with the idea that they might 0:13:40.440 --> 0:13:43.800 engage with it. So to the extent that this brings 0:13:43.920 --> 0:13:47.360 the Mala Report into people's living rooms, it's important and 0:13:47.360 --> 0:13:49.800 we've seen that before over the last year. We saw 0:13:49.840 --> 0:13:53.000 it with Kavanaugh's confirmation earrings for the Supreme Court. We 0:13:53.000 --> 0:13:56.760 saw with Michael Koh's hearings UM people really engaged with those. 0:13:56.840 --> 0:13:59.240 Having said that, I do feel like a little bit 0:13:59.240 --> 0:14:00.960 of light has run out of the lamp. I think 0:14:01.240 --> 0:14:03.800 people have had are sort of in a PTSD state 0:14:03.920 --> 0:14:07.680 with Trump, and I don't know how much more generally 0:14:07.720 --> 0:14:09.319 people want to absorb. So I think this will be 0:14:09.320 --> 0:14:11.160 a litmus test of that today. But let's explore that 0:14:11.160 --> 0:14:13.000 a little bit further. The idea that this is about 0:14:13.120 --> 0:14:15.920 almost defining the perceptions or shaping the perceptions of the 0:14:15.960 --> 0:14:20.000 Muller Report. You've written this morning the role that Attorney 0:14:20.040 --> 0:14:22.880 General William Barr has had. You've written about that this morning, 0:14:22.880 --> 0:14:25.640 that he's almost defined. He shaped the perception, perhaps more 0:14:25.720 --> 0:14:28.160 so than the individual that wrote it. Just walks us 0:14:28.160 --> 0:14:30.400 through the important self. That's him. Yeah, you know, this 0:14:30.440 --> 0:14:33.240 isn't Bill Barr's first rodeo. He was. He was an 0:14:33.240 --> 0:14:36.640 attorney general for George H. W. Bush in the early 0:14:37.000 --> 0:14:41.040 nineties when the Orian contrainvestigation was underway, and he was 0:14:41.160 --> 0:14:45.040 very shrewd about how we protected the president during that investigation. 0:14:45.120 --> 0:14:46.960 So he had been there before, and I think he 0:14:47.000 --> 0:14:48.920 came into this with a playbook, and I think his 0:14:49.000 --> 0:14:52.440 playbook was he was going to define what the report 0:14:52.600 --> 0:14:55.840 was about before Bob Muller or anyone else did, including 0:14:55.880 --> 0:14:59.920 the Democrats. And what Bill Barr said was, um, there's 0:15:00.040 --> 0:15:04.920 no collusion, there's no criminal conspiracy. The president wasn't fully exonerated, 0:15:05.120 --> 0:15:07.800 and Bob Mueller made no ruling on obstruction of justice, 0:15:07.960 --> 0:15:11.640 so I will he didn't obstruct. And that basically became, 0:15:12.120 --> 0:15:14.560 you've gotten a clean bill of health, Mr President, even 0:15:14.560 --> 0:15:17.080 though that's not what the report says. And moll and 0:15:17.400 --> 0:15:20.280 Bar really stayed by that. You know, when the report 0:15:20.320 --> 0:15:23.360 was finally released in full. He had a press conference 0:15:23.360 --> 0:15:25.040 to day came out and he said a lot of 0:15:25.080 --> 0:15:28.440 misleading things about what was in the report. So you know, 0:15:28.520 --> 0:15:31.640 bar has been an ally of the president and has 0:15:31.640 --> 0:15:34.560 really running interference for hmat. Is Mr Mueller a private 0:15:34.680 --> 0:15:39.280 citizen today? Is he uh employee of the government? Is 0:15:39.320 --> 0:15:43.040 he a legacy to the Department of Justices or code? 0:15:43.040 --> 0:15:46.360 Did he has to? I think he had a personal code. 0:15:46.400 --> 0:15:48.680 There is not an institutional coach. It's not a d 0:15:49.000 --> 0:15:52.920 J code er fl he he resigned in May. They 0:15:52.920 --> 0:15:55.680 shut his office down, I believe in late May, so 0:15:55.720 --> 0:15:58.880 he's no longer implied by the employed by the Justice Department. 0:15:59.360 --> 0:16:02.920 Um this letter he sought this week from Justice Department 0:16:02.920 --> 0:16:07.120 offering guidance about what he could say. My colleague No Feldman, 0:16:07.160 --> 0:16:09.920 who knows about all things legal, said that it's not 0:16:10.000 --> 0:16:13.280 a legally binding letter. I think Mueller asked for it 0:16:13.600 --> 0:16:17.040 because it's yet another indication that Mueller really wants he 0:16:17.080 --> 0:16:19.040 does not want to testify in public about what he 0:16:19.080 --> 0:16:22.720 regards as a private investigation. What are these shining lights 0:16:22.720 --> 0:16:26.440 of our American politics gonna do? When he says it's 0:16:26.440 --> 0:16:28.560 not gonna be the drama? I plead the Fifth Amendment. 0:16:28.560 --> 0:16:31.680 But he's gonna say, I don't want to answer that, correct. 0:16:31.680 --> 0:16:33.480 So I think what they're gonna have to probably do 0:16:33.600 --> 0:16:37.480 is ask him to read passages from the report. And 0:16:37.520 --> 0:16:40.640 there's some really extraordinary passages in there where Trump is asking, 0:16:40.680 --> 0:16:42.680 is they're going to force Mr Mueller to do that. 0:16:43.080 --> 0:16:46.280 He's a citizen, he's appearing before the Congress. He should 0:16:46.360 --> 0:16:48.320 do what they asked him to do, include read from 0:16:48.320 --> 0:16:50.520 the document. And now beyond that, of course, this is 0:16:50.560 --> 0:16:53.440 going to dominate the headlines in Washington, d C. Something 0:16:53.440 --> 0:16:55.720 that's attracted a little attention from our listeners here at 0:16:55.760 --> 0:16:57.720 Bloomberg Tim is what is happening with the d l 0:16:57.800 --> 0:17:01.320 J and big tech. Some people are struggling to get 0:17:01.320 --> 0:17:03.400 their head around the idea that the United States is 0:17:03.440 --> 0:17:06.080 involved in a trite dispute with the Chinese and also 0:17:06.160 --> 0:17:08.440 simultaneously going off to some of the big tech firms 0:17:08.480 --> 0:17:12.680 here in the United States. Two things for us, well, 0:17:12.840 --> 0:17:15.240 you know, as a you know, as as business journalists, 0:17:15.280 --> 0:17:19.520 I find the schizophrenia in the Trump administration curious and 0:17:19.560 --> 0:17:22.479 it and it often feels to me like where they 0:17:22.480 --> 0:17:25.480 are on policy is a little bit shoot from the hip. 0:17:25.720 --> 0:17:28.800 And you don't know who where the inputs are coming from. 0:17:28.840 --> 0:17:31.880 You know, as you just said, he came into office 0:17:31.920 --> 0:17:34.280 as a champion of business. He had a you know, 0:17:34.280 --> 0:17:37.440 a tech council meet at Trump Tower with the head 0:17:37.480 --> 0:17:40.919 of the Fangs and other and other another leading CEOs. 0:17:41.440 --> 0:17:44.439 Now he's authorized it would appear in anti trust investigation. 0:17:44.720 --> 0:17:48.560 You are considered Timothy O'Brien the expert on the president's 0:17:48.600 --> 0:17:52.320 previous finances. I believe in the last twenty four hours 0:17:52.920 --> 0:17:55.840 he's saying I want my state tax returns to be 0:17:55.960 --> 0:17:59.840 private in New York is reasserting that he doesn't want 0:17:59.840 --> 0:18:02.560 his state tax returns, not only saying that he's suing 0:18:02.600 --> 0:18:06.000 as a private citizen to prevent that as the same 0:18:06.000 --> 0:18:07.800 as the federal return they're not. They don't have the 0:18:07.800 --> 0:18:10.000 same depth as the as the federal returns, but they 0:18:10.040 --> 0:18:13.600 have a lot of the same information directionally. Obviously, I 0:18:13.640 --> 0:18:15.080 think what people want to see is what kind of 0:18:15.119 --> 0:18:18.840 income he has from abroad and in any possible malfeasance 0:18:18.880 --> 0:18:22.280 that might be inside the documents to be Governor Cuomo 0:18:22.840 --> 0:18:27.359 past legislation to allow this. The President is saying, no, 0:18:27.600 --> 0:18:30.760 is a citizen. We're not going to do this, what 0:18:30.840 --> 0:18:33.560 would you suggest will be the outcome? I don't think 0:18:33.600 --> 0:18:35.280 the courts are going to be on the President's side 0:18:35.280 --> 0:18:39.520 and this. You know, they've made a similar, you know, 0:18:39.800 --> 0:18:42.840 slate of arguments about access to his financial records and 0:18:42.880 --> 0:18:46.399 other records. And his argument has been these are political 0:18:46.440 --> 0:18:49.719 efforts and therefore they should be knocked down. And the 0:18:49.760 --> 0:18:54.240 Congress has said, we're exercising oversight per the Constitution. The 0:18:54.280 --> 0:18:57.320 courts have tended to decide with Congress on that. What 0:18:57.440 --> 0:18:59.240 will you look for the rest of the summer from 0:18:59.240 --> 0:19:02.280 the president we've and talking you're about has been almost 0:19:02.280 --> 0:19:05.480 two administrations. In the first term, there's been such turnover 0:19:05.560 --> 0:19:08.720 and all, what's sort of your crystal ball into the 0:19:08.760 --> 0:19:11.879 cooling months of September and October. Um, well, he doesn't 0:19:11.880 --> 0:19:15.240 have cooling months, so we meet with Prime Minister Johnson. 0:19:15.280 --> 0:19:17.000 I mean you know that. Yeah, I think and I 0:19:17.040 --> 0:19:20.160 think that I think that, you know, Iran, and and 0:19:20.160 --> 0:19:22.320 and North Korea have to remain sort of front and 0:19:22.320 --> 0:19:27.200 center in people's minds. Uh, the southern border remains unresolved. 0:19:27.200 --> 0:19:30.000 What's gonna happen with immigration policy there? And then I 0:19:30.000 --> 0:19:34.640 think obviously he's positioning and um, you know there's gonna 0:19:34.640 --> 0:19:36.480 be some key issues that the Republicans have to pull 0:19:36.560 --> 0:19:39.720 together on to have an agenda behind and beyond just 0:19:40.320 --> 0:19:42.120 Trump the showman. And I think they've got to figure 0:19:42.119 --> 0:19:45.159 out where they are on healthcare, where they are in immigration, 0:19:45.800 --> 0:19:48.560 and and and make sure that the fruits of their 0:19:49.080 --> 0:19:51.240 tax cut are apparent to their support. We're gonna stay 0:19:51.240 --> 0:19:53.880 and listen to the testimony live here in Bloomberg Radio. 0:19:53.920 --> 0:19:56.000 I want to watch you translated for me. Tom. I 0:19:56.560 --> 0:19:59.400 would that that we supported if you read the document. 0:19:59.440 --> 0:20:00.880 Full of school, I was sure, I have not read. 0:20:00.960 --> 0:20:03.000 I have not read the document, So you guys should 0:20:03.000 --> 0:20:05.200 not host a show about an event if you haven't 0:20:05.200 --> 0:20:07.760 read the document. Really, I don't think the members, honestly, 0:20:07.840 --> 0:20:10.240 I don't think every day there was all these this 0:20:10.359 --> 0:20:12.840 jockeying in Washington about who would get to ask questions, 0:20:12.840 --> 0:20:16.119 and they were postponing the hearings, and my feeling was 0:20:16.200 --> 0:20:18.439 only let the people ask questions who've actually read the 0:20:18.480 --> 0:20:21.840 moment when I agree with that that, right, it's it's interesting. 0:20:22.359 --> 0:20:24.680 Jim O'Brien, thank you so much, of course, with Blueberg 0:20:24.760 --> 0:20:27.159 opinion and driving so much to the smart that the 0:20:27.280 --> 0:20:40.000 every day right now on the equity markets, John, why 0:20:40.040 --> 0:20:43.679 don't you bring him? Mr Golub who has been persistently 0:20:44.160 --> 0:20:47.240 in the markets through gloom, thick and thin, joined just 0:20:47.320 --> 0:20:49.840 from Credit Swacee, the chief US equity strategist. It's been 0:20:49.840 --> 0:20:51.720 a while, John, it's quite a catch. Elby. Let's talk 0:20:51.760 --> 0:20:54.760 about earning season so far. What are you looking at? 0:20:54.800 --> 0:20:58.160 What's your school can't John, it's you know, it's it's 0:20:58.280 --> 0:21:01.119 pretty good. If you look at the the level of 0:21:01.320 --> 0:21:04.919 earnings surprises, you have something like three cores of the 0:21:04.960 --> 0:21:08.040 company's beating expectations, and the beats are coming in more 0:21:08.080 --> 0:21:11.600 than six percent, which is really strong. The level of 0:21:11.640 --> 0:21:15.760 the earnings growth is quite weak. We'll probably by the 0:21:15.760 --> 0:21:19.600 time this is over only have about two EPs growth 0:21:19.640 --> 0:21:21.680 and when you take out the buybacks, that's pretty close 0:21:21.720 --> 0:21:25.160 to zero. But but compared to expectations, things are coming 0:21:25.160 --> 0:21:27.560 in pretty well. What's the guidance like at the moment 0:21:27.640 --> 0:21:31.920 for the rest of this year going? UM? I think 0:21:31.960 --> 0:21:34.520 the guidance is finding what we knew we were going 0:21:34.560 --> 0:21:40.400 to get was um, you know, comments about about trade 0:21:40.480 --> 0:21:43.960 and potential headwinds, and so I'm not sure we're seeing 0:21:44.000 --> 0:21:50.040 anything that's um that's out of the ordinary. But you know, Prepsy, 0:21:50.240 --> 0:21:54.720 the more important issue here is that the media company, 0:21:54.760 --> 0:21:58.679