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Speaker 1: Brunt You by Bank of America Mary Lynch. With virtual reality,

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Speaker 1: virtually everything will change. Discover opportunities in a transforming world.

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Speaker 1: Be of a, mL dot Com, slash VR, Mary Lynch,

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Speaker 1: Pierced Fenner and Smith Incorporated. Welcome to the Bloomberg Surveillance Podcast.

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Speaker 1: I'm Tom Keene with David Gura. Daily we bring you

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Speaker 1: insight from the best of economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com,

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Speaker 1: and of course, on the Bloomberg. It is a name

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Speaker 1: that all within Bloomberg if they pay attention to the

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Speaker 1: Federal Bureau of Investigation. Mr Gavin uh grew up in

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Speaker 1: the Venue north the Charles River from Cambridge over to

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Speaker 1: Revere and had a story career in the FBI through Denver, Miami,

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Speaker 1: and then in New York, including a tour of duty

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Speaker 1: during the bombings of two. He's a former Federal Bureau

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Speaker 1: of Investigation Assistant director who darkened the door a few

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Speaker 1: years ago at Boston College. David, why don't you bring

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Speaker 1: in William Gavin? Yeah, William Gavin. Great to have you

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Speaker 1: with us here on Bloombergs of Valance, joining us on

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Speaker 1: our phone line. Spill I. I was rereading this morning

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Speaker 1: that the testimony that James Combey is expected to give today,

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Speaker 1: and something I wondered about is the historical relationship between

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Speaker 1: the Federal Buer of Investigation and the executive branch. What's

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Speaker 1: it been like? How much has that changed over the

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Speaker 1: FBI's history. I think over the history it's been basically

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Speaker 1: the same. Relationships have been warmer with the White House

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Speaker 1: and cooler with the White all depends. I think you

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Speaker 1: can recall it when Louis Free was the director, he

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Speaker 1: got up his badge to the White House during the

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Speaker 1: last year he was with Clinton and and never went

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Speaker 1: to the White House again. So there are there are

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Speaker 1: there are different kinds of relationships in terms, but basically

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Speaker 1: extensive personality to the people involved in both sides of

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Speaker 1: the House. Bill Gavin, I don't know if you've you've

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Speaker 1: read the prepared testament. It there's a moment after the

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Speaker 1: first meeting between James Comey and the present elect at

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Speaker 1: Trump Tower in New York. James Coby returns to an

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Speaker 1: FBI vehicle and just begins to hammer out notes of

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Speaker 1: what happened there in tell us a bit about the

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Speaker 1: culture of note note keeping and record keeping within the FBI,

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Speaker 1: James Comey pointing out that he had two meetings with

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Speaker 1: the previous president, Barack Obama and did not feel compelled

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Speaker 1: to do this. How much does an FBI agent an

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Speaker 1: FBI director journal what he does? Dude, it's not necessarily

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Speaker 1: just the director. It's it's I want to say, it's

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Speaker 1: all agents. It's always assistant director. Is a fun thing.

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Speaker 1: What happens is you know he didn't document. Jim Comey

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Speaker 1: said he didn't document anything with uh Barack Obama, but

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Speaker 1: he did when he started talking to um President Trump.

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Speaker 1: Bottom line is, it's it's a it's a mechanism that

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Speaker 1: goes off inside your head. It's a little bell that says,

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Speaker 1: I need to record this conversation. It's an uncomfortable feeling perhaps,

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Speaker 1: or it's a feeling that says this is going someplace

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Speaker 1: out and I want to make sure I'm on the

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Speaker 1: right side of recording this the way I remember it,

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Speaker 1: and many many agents and that kind of stuff. Mr Gavin,

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Speaker 1: you remember, no doubt. John Bailey, also out of Massachusetts,

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Speaker 1: who died in the line of fire for the FBI

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Speaker 1: in Las Vegas, over twenty years ago. Um, if you

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Speaker 1: were to sit down with the President today and the

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Speaker 1: way that he talks about law enforcement in a very

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Speaker 1: simplistic way, I think we can all agree on that.

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Speaker 1: What would you tell the president about the agents like

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Speaker 1: John Bailey? Well, I don't know, as I can tell

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Speaker 1: a president anything, Tom, you know, that's that's the nature

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Speaker 1: of the beast. The bottom line is, though, I think

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Speaker 1: the President does understand the significance and the importance of

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Speaker 1: a competent, capable, ethical, independent law enforcement agency within the

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Speaker 1: United States government, that that has to happen not just

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Speaker 1: within the United States government, within the municipalities as well.

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Speaker 1: They have to have all those qualities. And I think

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Speaker 1: the President of Philly will understands that, and knowing full

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Speaker 1: well that there are every one of the people who

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Speaker 1: have sworn the fine men and women of the FBI

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Speaker 1: would give their life for their country and for his

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Speaker 1: life too. So it's I think I think he understands that. Okay,

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Speaker 1: let's let's leave it there. Bill Gavin, thank you so

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Speaker 1: much for your time today with Bloomberg Surveillance. Mr Gavin

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Speaker 1: as a former UH Assistant director of the Federal Bureau

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Speaker 1: of Investigation, David. This has been amazing. I can't say

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Speaker 1: enough about the different the many conversations we've had with

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Speaker 1: FBI agents. Yeah, the last few weeks, and and again

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Speaker 1: we're gonna be looking ahead to some confirmation hearings for

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Speaker 1: the man the president tends to dominate. Mr y f

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Speaker 1: Behind Christopher Ray, formerly of fIF Kings Balding had been

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Speaker 1: at the DJ for a long and by all accounts,

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Speaker 1: distinguished career will be following that. And of course that's

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Speaker 1: going to take some focus here after the hearing today

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Speaker 1: with with James Comey on Capitol Hill. What did you

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Speaker 1: learn last time in Washington you were out and about

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Speaker 1: I mean, everybody's focused on this. I got it here late.

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Speaker 1: But it's been interesting to hear everyone's perspective on what

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Speaker 1: stands out the most from the from the written testimony

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Speaker 1: that James Comby has been read from today, a lot

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Speaker 1: of people talking about remarks the President made about the

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Speaker 1: cloud hanging over the White House and how this investigation

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Speaker 1: was preventing him, in his estimation, from doing what he

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Speaker 1: he wanted to do. Seems like there's some consensus here

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Speaker 1: that that's a that's the major theme from from what

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Speaker 1: we've rang a lot going on here. We thought we'd

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Speaker 1: go finance on your right now, How strange, David Girl,

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Speaker 1: No politics? No, why are John Tucker not even approve

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Speaker 1: a party of credit squeeze with us? Now? On the

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Speaker 1: Fed and what we know about inflation? First of all,

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Speaker 1: why is the market so removed from the Fed about

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Speaker 1: where inflation is? What do the what did rivatives tell you? Well?

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Speaker 1: We have seen inflation break evens come off quite a

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Speaker 1: bit since the election, since immediately after the election, and

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Speaker 1: part of it is also actually inflation readings have been

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Speaker 1: softer than expected. Now the Fed is insisting that this

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Speaker 1: is temporary. They're willing to look through it. It remains

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Speaker 1: to be seen. I think markets are bought the low

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Speaker 1: inflation idea a little more than the Fed has. Uh.

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Speaker 1: We'll see who's right over the next couple of readings.

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Speaker 1: The five year five year break evens, which is a

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Speaker 1: pro phrase folks for looking out five years and then

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Speaker 1: five years in there. Is that a good indicator? It's

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Speaker 1: it seems a convenient indicator. Does it actually tell us

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Speaker 1: what the market believes? Uh? In a way it does? Uh,

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Speaker 1: And certainly that's something the Fed looks at as well.

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Speaker 1: The question is are they right? Uh? Well, often times

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Speaker 1: they've moved a fair amount with really little new information.

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Speaker 1: So sometimes it could be technical, but certainly it's something

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Speaker 1: the markets look at, and that's the best market gauge

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Speaker 1: that you do have, you know, Honor David of the

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Speaker 1: complete focus on Washingtonday, I am going to do a

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Speaker 1: five year, five year break even shart with the Fibonacci overlow,

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Speaker 1: just to push against the Comy testimony. I'll be showing

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Speaker 1: that everyone here in our we're here with priving core

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Speaker 1: party on Bloomberg surveillance. Help us look ahead to the

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Speaker 1: FED meeting next week, we're anticipating we might get some

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Speaker 1: more color on what the balance sheet unwind is gonna be. Like,

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Speaker 1: do you think we're gonna get anything more on the

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Speaker 1: inflation outlook with the balance of risks? I think the

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Speaker 1: balance of risk the Fed has moved from you know

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Speaker 1: for a while now to a more balanced approach, and

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Speaker 1: certainly I think the bigger concern that might come through

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Speaker 1: is what's happening to inflation? Right? I think in terms

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Speaker 1: of growth, they're comfortable with where we are, so really

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Speaker 1: the question is how they address inflation. To us, that's

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Speaker 1: the more interesting point. Now with regards to balance sheet, Uh,

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Speaker 1: you might get a bit of a bit more color.

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Speaker 1: But the staff proposal that we saw in the last

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Speaker 1: minute was very, very gradual. It's literally watching paint dry.

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Speaker 1: And so if you get, you know, some indication that is,

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Speaker 1: in fact where the actual voting members are, this may

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Speaker 1: prove to be much less rackfull. Event what do you

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Speaker 1: use is you get closer to June four, is there

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Speaker 1: some mechani that's the right word, David, thank you, mechanism

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Speaker 1: that you use to get a clearer picture within all

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Speaker 1: the media bladder that we create every day. So to

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Speaker 1: be clear, there's no uncertainty at least from markets perspective

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Speaker 1: about whether there's going to be a June hike. Right,

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Speaker 1: that's price it's like, yeah, almost certain, right. So the

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Speaker 1: real question is what happens thereafter, what happens in September?

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Speaker 1: Right now, September markets aren't really pricing much of a hike. Uh,

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Speaker 1: And that's where the FEDS thoughts on inflation will matter. Now,

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Speaker 1: I will say Septembers for different reasons shaping up to

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Speaker 1: be quite interesting. You have potentially the dead limit, death

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Speaker 1: ceiling mean rased. You know, the budget needs to be passed.

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Speaker 1: So there are a bunch of things, and then potentially

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Speaker 1: German elections and Italian elections, so that might give the

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Speaker 1: Fed some pause. Markets are aware that there's this timing issue,

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Speaker 1: so there's not more price in September at this point. Okay,

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Speaker 1: we gotta come back and do some more charts. I'm

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Speaker 1: putting out this chart down for David gur to get

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Speaker 1: them away. Phibology very good. David Crivne Herr party with

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Speaker 1: us in charge of Fibonacci overlays the credit sweet will continue.

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Speaker 1: Our discussion wonderful researchers, really really arcane finance and the

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Speaker 1: dynamics of the derivative market will continue with the discussion

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Speaker 1: on Then I want to bring in a little bit

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Speaker 1: of fat tale thought here as well. It's a good

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Speaker 1: time to have priving cor party with us with credit suites,

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Speaker 1: in derivatives, in fixed income and looking at what our

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Speaker 1: central banks too. I'm gonna call it a pretty careful

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Speaker 1: synodal function. Euro spike higher, spike stronger, and then massive

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Speaker 1: abrupt reversal to a weaker euro and now some stability.

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Speaker 1: The headlines were actually pretty interesting. This Drugg he got

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Speaker 1: out in front of his press conference with a set

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Speaker 1: of headlines, didn't he probably, yes, he did. Uh. We

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Speaker 1: were expecting the a bit more of a removal of

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Speaker 1: some of the more dubbish elements of their forward guidance.

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Speaker 1: They did some, for example, they did drop the lower

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Speaker 1: reference in terms of the rate, but we also thought

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Speaker 1: they would modify the well passed the end of Fassett

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Speaker 1: much is us to just passed? Right? It's I know

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Speaker 1: I'm shading words here. Well, I'm shocked. Excuse Colin. We

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Speaker 1: have a derivatives guy in the house and his shading words. Okay,

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Speaker 1: to protect the children, I continue. Yeah, So I think

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Speaker 1: there's a bit of you know, reassessment of how quickly

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Speaker 1: they may you know, pull back some of the stimulus.

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Speaker 1: But largely it was in line with what we expect.

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Speaker 1: And we're right there right now. We're you know, within

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Speaker 1: pips of where we were in line. If if I

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Speaker 1: look at the e C B and without all the

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Speaker 1: focus in Europe obviously, how do I bring that over

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Speaker 1: to June four in chair yelling because she's got an

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Speaker 1: inflation vector which they've bought a full bode and it's

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Speaker 1: rolled over a little bit. They got this rolling over

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Speaker 1: that rolling over GDP. Who knows how does all this

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Speaker 1: roll over to June fourteen? So, Uh, the inflation problem

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Speaker 1: that you mentioned is something that e c B has

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Speaker 1: as well. So I think the the uh stance lots

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Speaker 1: of these central bankers are taking at this point is

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Speaker 1: basically that we look through it for now, and I

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Speaker 1: think the fedest telegraphed that they will do that in

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Speaker 1: June fourteen. Beyond that remains to be seen. We just don't. Yeah,

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Speaker 1: how big a deal is this? Again? I look at

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Speaker 1: the headline they're emitting that guidance interest rates might be

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Speaker 1: be cut again? Uh? Is it? Is it taking a

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Speaker 1: big step? A small step? Here? Help me understand just

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Speaker 1: the gravity of the move that the Governing Council has made.

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Speaker 1: I would say it's a small step. It's something that

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Speaker 1: markets were largely expecting. And that's part of the reason.

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Speaker 1: Is Uh. Several ECB speakers have been clear that they

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Speaker 1: see in terms of the economy, UH, that there's no

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Speaker 1: longer any downside risk. Right, So if that's your view

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Speaker 1: of the economy, I think it's appropriate to be removing

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Speaker 1: that language. And now your geek moment for the morning, folks.

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Speaker 1: Here's the headline ECB drops reference to lower rates in

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Speaker 1: forward guidance. When you and I studied derivatives, forward guides

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Speaker 1: didn't exist. There were difference equations ex. Post x anti

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Speaker 1: t T plus one che plus two when you struggle

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Speaker 1: through first order and second order difference equations. Is forward

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Speaker 1: guidance nothing more than a pr event? Is it nothing

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Speaker 1: more than almost a marketing and pain by well meaning economists?

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Speaker 1: I would say it's more than a marketing campaign, particularly

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Speaker 1: if you view the central bank is credible right, and

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Speaker 1: you can make the argument that both the fat uh

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Speaker 1: you know Postwoker and certainly the easy be have earned

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Speaker 1: some amount of credibility. Yes, so if they pre commit

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Speaker 1: to say keeping great statement, but they don't pre commit,

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Speaker 1: they change. If the facts change I change, they do.

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Speaker 1: Kins if things change, they do. But again this is

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Speaker 1: where credibility is important. I would say, if there are

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Speaker 1: small changes in the economic outlook, they probably stick to

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Speaker 1: the forward guidance to be so as to be incredible.

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Speaker 1: But if there are a lot of changes, they will

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Speaker 1: make the change that you mentioned, and I think markets

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Speaker 1: will sort of overlook back. Okay, let's go to Bullard

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Speaker 1: small Paper and in in Jim bowder St Louis is

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Speaker 1: sat on surveillance. It said, it is a small paper

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Speaker 1: worth study. He wants a regime change where we wait,

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Speaker 1: we don't worry about tip US one, tip US two,

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Speaker 1: forward guidance dots and the rest until we see a

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Speaker 1: regime change. What's really going on in the last four

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Speaker 1: weeks is disappointment that the regime change isn't regiming, is it.

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Speaker 1: I mean, it's not happening. I think there's some of that.

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Speaker 1: I think there's a concern that, you know, maybe we

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Speaker 1: aren't getting out of this low inflation world after all.

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Speaker 1: So uh again, uh go back to my point that

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Speaker 1: inflation prints over the next three months are key to watch. Growth.

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Speaker 1: Remember has been pretty good. I mean I should say

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Speaker 1: good in the context of this recovery. Ah. So it's

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Speaker 1: really what we're talking about is, you know, both v

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Speaker 1: as market participants and the FED and the ECB watching inflation.

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Speaker 1: Excuse me, David, I wanted to bring us up. The

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Speaker 1: Atlanta g d P number is still very nice. It's

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Speaker 1: a ginormous like President Trump kind of three point, but

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Speaker 1: it's at the low end of the range. I mean,

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Speaker 1: it's I don't know, Mr com Comy is gonna comment

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Speaker 1: on the Atlanta now GDP four. Yes, but even g

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Speaker 1: d P is starting to roll over a little bit.

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Speaker 1: I don't want to oversell that. We'll know a lot

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Speaker 1: more about that in the next four weeks or so.

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Speaker 1: See how I got Mr Comey in there. Even pretty good.

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Speaker 1: We're talking Gaussian models for being Let me ask you

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Speaker 1: about personnel and the FED reporting this week that a

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Speaker 1: good friend of surveillance, Marvin good Friend, might be considered

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Speaker 1: for a post as a FED governor. Perhaps, what do

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Speaker 1: you make of that? What does that tell you about

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Speaker 1: the direction of the FED, the way that it's where

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Speaker 1: it might be headed? Uh, now, that's very interesting in

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Speaker 1: terms of, you know, developments for you know, the composition

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Speaker 1: of the FED. We have, in some sense now all

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Speaker 1: three candidates for the weekend slot right now, if you

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Speaker 1: make the assumption that Yellen might stay, which is clearly

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Speaker 1: a questionable assumption, but let's say that's the case. You're

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Speaker 1: making that assumption. Uh not right now, No, we're not.

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Speaker 1: But let's say Trump had to pick one of these three, uh,

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Speaker 1: gentlemen as the FED chair. Now it's a good friend.

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Speaker 1: We've heard him on record say he thinks the interest

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Speaker 1: rate should be a lot higher. By a lot higher,

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Speaker 1: I mean closer to two percent, which means I think

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Speaker 1: it will be a hawkish addition to the uh fed

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Speaker 1: to David's brilliant question, way more brilliant than anything I'd

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Speaker 1: come up with. Is the idea of rules versus discretion.

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Speaker 1: Mr good Friend clearly tilts over to a more rules

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Speaker 1: based appro Is that we're what we're really talking about here? Um, well, yes,

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Speaker 1: but we should also see what the rules are telling you. Right,

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Speaker 1: So the rules right now telling you the rate should

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Speaker 1: be higher, and so the net effect if you try

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Speaker 1: to gauge what that might mean in terms of the

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Speaker 1: palsy rate, it would argue for a higher rate. Now,

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Speaker 1: it's not clear that he'll be able to carry the

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Speaker 1: rest of the committee with him, but certainly that's where

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Speaker 1: he appears to me. But this is so important. The

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Speaker 1: two yearyeld. I did the chart yesterday. I'll send it

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Speaker 1: out again folks on Twitter. The two year yield less

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Speaker 1: the inflation, right, it's still negative? Right? What happens if

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Speaker 1: they raise rates in June and then one more time?

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Speaker 1: Does the world end as we know it? Uh? No,

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Speaker 1: that that's that's a great question. I think Uh, we've

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Speaker 1: had negative real rates at the front end for a

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Speaker 1: while back to zero, right, So we've had it for

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Speaker 1: a while. I don't necessarily think the world ends. I

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Speaker 1: think there's some room because remember the FED is still

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Speaker 1: hiking at a very gradual pace. Now, if they were

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Speaker 1: to accelerate, that might be a problem. Uh, we don't

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Speaker 1: see that happening anytime soon. We think they will still

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Speaker 1: be very measured. As I mentioned uh a little earlier

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Speaker 1: in the show. Uh, September for example, is not automatic,

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Speaker 1: right in terms of their right. Hy, this has been great.

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Speaker 1: Don't be a stranger proving core party with us with sweets.

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Speaker 1: Next time we'll do uh puss on distributions and brought

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Speaker 1: you by Bank of a America Mary Lynch. With virtual reality,

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Speaker 1: virtually everything will change. Discover opportunities in a transforming world.

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Speaker 1: VI of a mL dot Com slash VR, Mary Lynch,

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Speaker 1: Pierced Fenner and Smith Incorporated. The euro hunched pretty much

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Speaker 1: off of the ECB news No surprise it really went.

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Speaker 1: Is very technical term. But to give us really our

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Speaker 1: first briefing on what we're observing in Washington. Uh this morning,

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Speaker 1: what a joy to speak to William Gavin, the former

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Speaker 1: assistant director of the FBI, so associated with Boston, and

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Speaker 1: we say good morning Bloomberg, Boston and Cambridge and Revere

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Speaker 1: where Mr Gavin grew up and out of Boston College.

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Speaker 1: Now we got to go to the belt White David

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Speaker 1: with our esteem guests, give us a briefing. Yeah, Terry

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Speaker 1: hands with us here senior political strategises at ever Core

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Speaker 1: I s I has been kind enough to join us

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Speaker 1: a couple of times this week here with us now

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Speaker 1: in our Blue Breaking nine studios on what is a

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Speaker 1: big day in Washington, d C. What are we gonna

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Speaker 1: get out of this? There's the pomp and the circumstance,

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Speaker 1: there's the testimony, which we've seen in advance. There's going

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Speaker 1: to be some heated question. Where do things go from here?

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Speaker 1: How does this set the investigation on track? On a

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Speaker 1: different track? What do you think we're gonna learn? Good

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Speaker 1: morning David, Good morning Tom, and thanks again for having me.

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Speaker 1: H Well, I think on on track. You know it's

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Speaker 1: gonna what you're gonna see as an investigation that that

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Speaker 1: winds out over a period of months or even years.

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Speaker 1: You've you've had a special counsel appointed just within the

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Speaker 1: past few weeks, uh, former Director Mueller, that special counsel

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Speaker 1: is just setting up his own his own shop, taking

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Speaker 1: briefings from FBI people and others on the status of

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Speaker 1: the investigation and uh. And so they're probably at about

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Speaker 1: the point now where they get started. Uh. And they'll

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Speaker 1: wind through this and you know, as as Comey's statement

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Speaker 1: referenced yesterday, UH, you know, they'll do the best investigation

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Speaker 1: they can uh, as quickly as they can. But that

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Speaker 1: is not going to that that's not going to go

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Speaker 1: fast in market time. That's going to be a very

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Speaker 1: slow wind out event without bombshells every day, unlike what

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Speaker 1: we've seen over the past month or so. Uh. You

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Speaker 1: know what we're gonna learn today based on Comey's testimony

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Speaker 1: is is really not a lot new that you know,

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Speaker 1: there's a lot of reference in the political press to

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Speaker 1: you know, cinematic detail and the like. But fundamentally, two

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Speaker 1: things uh come out come out of this written testimony.

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Speaker 1: The first is that Comy confirms that the president is

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Speaker 1: not personally under investigation. UH. And the second thing that

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Speaker 1: comes out is really that there's no new detail at all. UH.

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Speaker 1: So things remain somewhat ambiguous, and I don't say that

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Speaker 1: as any sort of Trump supporter or de writer. I

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Speaker 1: mean they just the motivations here remain ambiguous, and ultimately

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Speaker 1: that's up to a former director Muller to try to

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Speaker 1: figure out. So this is gonna take a while. And

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Speaker 1: Sarah were talking with Jeenan Martin Adams yesterday, She's US

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Speaker 1: Equity Strategistic Bloomberg Intelligence talking with John Tucker, our friend

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Speaker 1: and colleague as well, expressing a little bit of skepticism

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Speaker 1: here about the market importance of what we're seeing here today.

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Speaker 1: What do you say to them, what do you say

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Speaker 1: to clients about how what will go on in the

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Speaker 1: heart Senate office building today, how that might matter to

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Speaker 1: markets if at all? Well, it matters if there's some

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Speaker 1: sort of bombshell beyond what we already know, uh, to

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Speaker 1: the extent that so that that uh, you know, there's

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Speaker 1: a shade or a clouds the president apparently puts it

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Speaker 1: on the presidency. It matters if there's something that comes

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Speaker 1: out of the Comy testimony that is a significant negative

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Speaker 1: beyond what we already know that he's going to say.

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Speaker 1: If not, uh, then it's not gonna be much of

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Speaker 1: a market event. And that that's probably the the that

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Speaker 1: that's probably the lead dog here. To be clear here,

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Speaker 1: Terry and I haven't had this answered yet. Does Mr

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Speaker 1: Comey is he under an obligation to say everything he knows?

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Speaker 1: Or has he basically gone to Mr Mueller and said,

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Speaker 1: what would you like me to say? So I don't

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Speaker 1: impede whatever you're doing. Is a public servant? Which way

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Speaker 1: does it cut? It's a very smart question, Tom, and

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Speaker 1: not in the usual Washington sense of if it's a

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Speaker 1: smart question, therefore I'm about to disagree with you. Uh,

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Speaker 1: It's a very smart question. And the answer the answer

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Speaker 1: is both. Uh. He isn't under an obligation to say everything.

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Speaker 1: But what I want to point out to both David

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Speaker 1: and you and the listeners as well, is that he's

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Speaker 1: not under obligation to say everything he knows in the

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Speaker 1: open sets. Just just like yesterday. Uh. There there were

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Speaker 1: general statements made by Admiral Rodgers, d N I. Coats

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Speaker 1: and others, and general statements about how they felt their

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Speaker 1: interactions with the President went, but they did not feel

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Speaker 1: comfortable testifying about the specifics in open session. I fully

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Speaker 1: expect that they offered those more specific opinions in the

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Speaker 1: close session, and there will be a close session here

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Speaker 1: for Comy this afternoon as well. So what you're gonna

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Speaker 1: get is you're gonna get generalities from Comy. You are

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Speaker 1: going to get some more specifics, uh, from the Intel Committee, who,

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Speaker 1: you know, let's remember our conduct is conducting their own

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Speaker 1: investigation here as well. You know, I'm wondering the degree

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Speaker 1: to which this is distracting from what Congress would like

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Speaker 1: to be doing otherways. This is, this is going to

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Speaker 1: create a lot of focus, take a lot of focus

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Speaker 1: away from taxi, former healthcare reform where uh the death

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Speaker 1: ceiling or funding all of that. How long is that

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Speaker 1: going to continue? This a one day event? You mentioned

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Speaker 1: that the long time horizon here we're looking at for

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Speaker 1: an investigation of of this nature. How worried are you

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Speaker 1: about legislative agenda items being scuttled because of this? Well,

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Speaker 1: I'm I'm less worried than most people, and I'm not

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Speaker 1: sanguine about any of this, but I'm less worried about

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Speaker 1: this than most people. But frankly because as I say, uh,

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Speaker 1: this investigation is in these investigations, I should say, both

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Speaker 1: from Mueller's side and from the Congressional side, are gonna

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Speaker 1: go on for months or or even longer. There won't

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Speaker 1: be them shells every day. There won't be public statements

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Speaker 1: every day or every week for that matter, I would

427
00:24:05,200 --> 00:24:08,000
Speaker 1: guess and uh, and so what you're gonna get as

428
00:24:08,000 --> 00:24:10,600
Speaker 1: a return to normality more than anything else. To me,

429
00:24:10,800 --> 00:24:15,159
Speaker 1: the bigger concern from markets is not so much juice

430
00:24:15,200 --> 00:24:17,960
Speaker 1: going out of the Trump presidency or momentum from the

431
00:24:17,960 --> 00:24:22,520
Speaker 1: White House side. It's what needs, What is happening right now,

432
00:24:22,560 --> 00:24:27,160
Speaker 1: I think is that Congress very much needs the Republican

433
00:24:27,200 --> 00:24:30,520
Speaker 1: majorities in Congress, particularly on the Affordable Care Act on

434
00:24:30,720 --> 00:24:33,760
Speaker 1: tax reform, which are closely linked, as you both know,

435
00:24:35,000 --> 00:24:38,240
Speaker 1: very much need to get their acts together and to

436
00:24:38,880 --> 00:24:41,600
Speaker 1: to actually figure out what the path forward is on that.

437
00:24:41,720 --> 00:24:45,920
Speaker 1: If they if they continue to dissipate and uh beny

438
00:24:45,960 --> 00:24:50,000
Speaker 1: momentum and bicker among themselves about what the big items

439
00:24:50,040 --> 00:24:53,440
Speaker 1: are and how and when they're going to achieve them, uh,

440
00:24:53,640 --> 00:24:55,560
Speaker 1: that becomes a problem. And that has little to do

441
00:24:55,600 --> 00:24:58,440
Speaker 1: with the Trump investigation. Frankly, that needs that that that

442
00:24:58,440 --> 00:25:01,240
Speaker 1: that needs to be a moment whe our Republicans get

443
00:25:01,280 --> 00:25:03,119
Speaker 1: to agree and move forward. I think most of our

444
00:25:03,160 --> 00:25:06,280
Speaker 1: audience understands David gurin Washington this morning. I'm in New York,

445
00:25:06,359 --> 00:25:09,560
Speaker 1: David Garin knowing a lot more about Washington and I do.

446
00:25:09,720 --> 00:25:13,639
Speaker 1: He's drunk the Kool Years and Terry Haynes with us

447
00:25:13,640 --> 00:25:16,320
Speaker 1: as well with Ed Hyman's I s I ever called

448
00:25:16,800 --> 00:25:19,920
Speaker 1: Terry um. Let me bring up a phrase which David

449
00:25:19,920 --> 00:25:23,000
Speaker 1: Gurry uses the other day. The President used it in

450
00:25:23,040 --> 00:25:30,359
Speaker 1: the testimony. What's a satellite associate? John Tucker? Are you

451
00:25:30,480 --> 00:25:38,280
Speaker 1: as satellitem? I as satellite associate? Spot Nick? What's a

452
00:25:38,359 --> 00:25:42,359
Speaker 1: satellite associate? Tom? I? I gotta say, I think of

453
00:25:42,440 --> 00:25:45,120
Speaker 1: you as one of the eight big planets rather than

454
00:25:46,200 --> 00:25:51,119
Speaker 1: than something in the asteroid belt from Pluto. Exactly, tell me,

455
00:25:51,600 --> 00:25:54,080
Speaker 1: satellite associate. I want Pluto to come back as a

456
00:25:54,119 --> 00:25:58,160
Speaker 1: full planet anyway. The satellite associate, I think, is anybody

457
00:25:58,160 --> 00:26:03,400
Speaker 1: else very simply? Uh, yeah, I don't know who. But

458
00:26:03,680 --> 00:26:06,400
Speaker 1: critically they're treated differently. The president is the president, whether

459
00:26:06,400 --> 00:26:10,119
Speaker 1: it's President Trump or President Garfield or President Jefferson. A

460
00:26:10,280 --> 00:26:15,439
Speaker 1: president has a different body of law, process, cadence, and

461
00:26:15,560 --> 00:26:20,720
Speaker 1: discourse right, uh, to some extent. But I think that

462
00:26:21,000 --> 00:26:23,480
Speaker 1: you know, if we learned, you know, but we have

463
00:26:23,520 --> 00:26:25,840
Speaker 1: to talk about Watergate at some point I think it's required.

464
00:26:26,520 --> 00:26:31,040
Speaker 1: But the uh, the Watergate analogy is appropriate here because

465
00:26:31,400 --> 00:26:35,479
Speaker 1: what we learned through Watergate and subsequently through a variety

466
00:26:35,520 --> 00:26:38,800
Speaker 1: of other Special Council investigations over the past forty years,

467
00:26:39,280 --> 00:26:42,720
Speaker 1: is that the body of law that applies to everybody

468
00:26:42,720 --> 00:26:46,080
Speaker 1: else by large, applies to the President. To David garr In.

469
00:26:46,080 --> 00:26:47,879
Speaker 1: Our Bloomberg nine on one studio is Tom Keene at

470
00:26:47,880 --> 00:26:50,040
Speaker 1: our headquarters in New York. This is Bloomberg Surveillance on

471
00:26:50,040 --> 00:26:52,480
Speaker 1: Bloomberg Radio. We're here with Terry Haynes, the senior political

472
00:26:52,520 --> 00:26:55,199
Speaker 1: strategist at EVER Corps. I s I and Terry I

473
00:26:55,200 --> 00:26:57,639
Speaker 1: think after the President did that joint speech before a

474
00:26:57,680 --> 00:27:00,159
Speaker 1: joint session of Congress, there was so much enthusiast him

475
00:27:00,160 --> 00:27:03,560
Speaker 1: about what he said about infrastructure in this country. Yesterday,

476
00:27:03,640 --> 00:27:06,800
Speaker 1: he was in Ohio, six miles east of Cincinnati on

477
00:27:06,840 --> 00:27:09,520
Speaker 1: the Ohio River. We saw the barges going by behind him,

478
00:27:09,520 --> 00:27:11,399
Speaker 1: and this was an opportunity for him to embrace what

479
00:27:11,480 --> 00:27:13,200
Speaker 1: was supposed to be, or what the White House wanted

480
00:27:13,240 --> 00:27:16,280
Speaker 1: to be Infrastructure Week. Instead, we had a twenty minute

481
00:27:16,280 --> 00:27:18,119
Speaker 1: wind up in which he talked about the Paris Accord,

482
00:27:18,119 --> 00:27:20,840
Speaker 1: his trip to Saudi Arabia. He talked about healthcare. Uh.

483
00:27:20,840 --> 00:27:23,000
Speaker 1: He finally got to infrastructure there at the end. But

484
00:27:23,480 --> 00:27:25,959
Speaker 1: UM for something the White House engineered wanted to be

485
00:27:26,600 --> 00:27:29,240
Speaker 1: the focus point this week, we really haven't gotten it.

486
00:27:29,280 --> 00:27:31,520
Speaker 1: We haven't gotten details on infrastructure from the White House.

487
00:27:31,960 --> 00:27:34,280
Speaker 1: I hate to draw the parallel here to tax reform,

488
00:27:34,359 --> 00:27:36,639
Speaker 1: but we're dealing with just a set of principles and

489
00:27:36,640 --> 00:27:41,760
Speaker 1: a little more. Yes, I realized, I realized that wasn't

490
00:27:41,760 --> 00:27:44,880
Speaker 1: a question. But I'm curious here just about we're talking

491
00:27:44,920 --> 00:27:47,800
Speaker 1: about agenda. Why hasn't the White House been better about

492
00:27:47,840 --> 00:27:50,840
Speaker 1: claiming that or reclaiming that agenda. I'm not often surprised,

493
00:27:50,880 --> 00:27:55,240
Speaker 1: but I am surprised by this. Uh. He had the

494
00:27:55,240 --> 00:28:01,320
Speaker 1: President has in Transpisitions Secretary Chow a very skilled operator,

495
00:28:01,480 --> 00:28:04,440
Speaker 1: not only on policy but on but on the ability

496
00:28:04,480 --> 00:28:09,160
Speaker 1: to bring political consensus. The infrastructure was one of the

497
00:28:09,200 --> 00:28:13,560
Speaker 1: top things that the President campaigned on. There's a lot

498
00:28:13,560 --> 00:28:19,280
Speaker 1: of enthusiasm about it among investors as well, and UH,

499
00:28:19,320 --> 00:28:22,199
Speaker 1: in the general public also and UH. And there are

500
00:28:22,200 --> 00:28:24,679
Speaker 1: a lot of promises made. And to be at a

501
00:28:24,680 --> 00:28:28,080
Speaker 1: point that's almost mid year and to not have a plan,

502
00:28:28,160 --> 00:28:31,480
Speaker 1: to not be engaging Congress on a bipartisan basis. UH,

503
00:28:31,520 --> 00:28:35,960
Speaker 1: and not moving forward UH is a surprise, and it

504
00:28:36,080 --> 00:28:41,560
Speaker 1: caused US UH this week to formally downgrade the chances

505
00:28:41,560 --> 00:28:46,360
Speaker 1: of infrastructure legislation until untillen. And that matters for a

506
00:28:46,400 --> 00:28:48,400
Speaker 1: couple of reasons. And one of the reasons it matters

507
00:28:48,800 --> 00:28:51,960
Speaker 1: is because infrastructure, unlike a lot of other government programs,

508
00:28:52,040 --> 00:28:54,440
Speaker 1: is not something where you merely splash out a bunch

509
00:28:54,480 --> 00:28:58,240
Speaker 1: of money and all of a sudden things start to happen. UH.

510
00:28:58,360 --> 00:29:04,240
Speaker 1: That that was shown very well in twenty nine during

511
00:29:04,280 --> 00:29:08,240
Speaker 1: after the stimulus, when lots of shove already jobs and

512
00:29:08,400 --> 00:29:12,440
Speaker 1: projects were we're promoted and thought to occur, and it

513
00:29:12,480 --> 00:29:15,000
Speaker 1: turns out a lot of that didn't happen, or happened

514
00:29:15,080 --> 00:29:18,040
Speaker 1: very slowly. Uh. These spend outs happen over a period

515
00:29:18,040 --> 00:29:22,240
Speaker 1: of two three five years. So so the delay here

516
00:29:22,920 --> 00:29:27,320
Speaker 1: is is consequential in a policy in a practical sense.

517
00:29:27,560 --> 00:29:32,360
Speaker 1: And UH and dramatically slows what the President said was

518
00:29:32,400 --> 00:29:34,880
Speaker 1: going to be one of his top priorities. It was

519
00:29:34,920 --> 00:29:36,920
Speaker 1: a free wheeling speech. As I said, there was a

520
00:29:36,920 --> 00:29:39,120
Speaker 1: moment where he brings up but Richard leftrack. There's the

521
00:29:39,120 --> 00:29:41,320
Speaker 1: head of Toronado Steve Roth there as well. He kind

522
00:29:41,360 --> 00:29:42,880
Speaker 1: of brings them up for an off the cuff, a

523
00:29:42,920 --> 00:29:45,680
Speaker 1: few off the cuff remarks, what does it say that

524
00:29:45,760 --> 00:29:48,560
Speaker 1: he didn't have surrounding this announcement. We're surrounding this week,

525
00:29:48,680 --> 00:29:51,400
Speaker 1: we have the panoply of business people we've seen before.

526
00:29:51,400 --> 00:29:54,360
Speaker 1: He's that an indication to you that what happened with

527
00:29:54,800 --> 00:29:56,920
Speaker 1: the Paris Agreement, what happened with the G seven sum,

528
00:29:56,920 --> 00:30:01,080
Speaker 1: it really has changed or turned or altered the way

529
00:30:01,120 --> 00:30:04,440
Speaker 1: that business leaders executives are are interfacing or interacting with

530
00:30:04,440 --> 00:30:07,960
Speaker 1: this administration. I think it's uh. I think that there's

531
00:30:07,960 --> 00:30:10,520
Speaker 1: some truth in that. I think it's also true, and

532
00:30:10,840 --> 00:30:12,880
Speaker 1: this is by inference, but I think this is it's

533
00:30:12,920 --> 00:30:16,800
Speaker 1: also true that for whatever reason, the administration is not

534
00:30:16,960 --> 00:30:20,520
Speaker 1: gathering up those folks and uh and and trying to

535
00:30:20,600 --> 00:30:22,920
Speaker 1: use them as a wedge for action. You know, one

536
00:30:22,920 --> 00:30:26,200
Speaker 1: thing that Congress always looks for when it's looking for

537
00:30:26,240 --> 00:30:31,120
Speaker 1: importance is not just importance and a priority in terms

538
00:30:31,120 --> 00:30:33,040
Speaker 1: of what they should do and how quickly they should do.

539
00:30:33,080 --> 00:30:35,720
Speaker 1: It is not just what the White House might want

540
00:30:35,880 --> 00:30:38,960
Speaker 1: or you know, how how the president's proposing something, but

541
00:30:39,040 --> 00:30:41,760
Speaker 1: also what kind of support it has out there in

542
00:30:41,800 --> 00:30:46,360
Speaker 1: the real world, uh, from business leaders, from investors, from

543
00:30:46,360 --> 00:30:50,600
Speaker 1: the general public, and so far they have not assembled

544
00:30:50,600 --> 00:30:53,600
Speaker 1: that at all. And it shows a lot of disarray

545
00:30:53,640 --> 00:30:58,400
Speaker 1: on policy. Start with the standard idea of why infrastructure

546
00:30:58,400 --> 00:31:01,120
Speaker 1: is such a struggle in Washington. It's just not in

547
00:31:01,200 --> 00:31:06,600
Speaker 1: my backyard. Nobody wants the budget in their backyard, isn't it. Um. Yeah,

548
00:31:06,680 --> 00:31:10,160
Speaker 1: it's partially that, but you know, it's awfully bipartisan in

549
00:31:10,240 --> 00:31:14,520
Speaker 1: many many ways. UH. For twenty thirty years and and

550
00:31:14,560 --> 00:31:19,480
Speaker 1: my my professional experience infrastructure policy, infrastructure legislation has always

551
00:31:19,480 --> 00:31:22,560
Speaker 1: been bipartisan. The last time we had the infrastructure legislation

552
00:31:23,200 --> 00:31:27,320
Speaker 1: most people don't know was just in December when there

553
00:31:27,400 --> 00:31:29,600
Speaker 1: was a new five year plan put into place that

554
00:31:29,680 --> 00:31:32,400
Speaker 1: was largely subsistence, but but it was agreed to on

555
00:31:32,400 --> 00:31:35,480
Speaker 1: a bipartisan basis. And what the President was talking about,

556
00:31:35,560 --> 00:31:37,720
Speaker 1: what Mrs Clinton was talking about during the campaign for

557
00:31:37,720 --> 00:31:41,120
Speaker 1: that matter, was it was a ramp up from that level. UH.

558
00:31:41,160 --> 00:31:44,960
Speaker 1: And there are and that includes both direct federal spending,

559
00:31:45,160 --> 00:31:47,280
Speaker 1: which we think can continue to think there's about three

560
00:31:47,680 --> 00:31:50,640
Speaker 1: billion available over three years, but also an expansion of

561
00:31:50,640 --> 00:31:54,960
Speaker 1: public private partnerships, all very bipartisan. UH. There. There's a

562
00:31:55,000 --> 00:31:57,640
Speaker 1: win politically speaking, there's a win out there to be had,

563
00:31:58,000 --> 00:32:00,800
Speaker 1: and uh, it is mildly prising to me that the

564
00:32:00,840 --> 00:32:04,880
Speaker 1: White House and the President aren't seizing that opportunity. Dr Hans,

565
00:32:04,880 --> 00:32:06,720
Speaker 1: thanks very much, appreciated it. Seen a political strategy that

566
00:32:06,960 --> 00:32:08,680
Speaker 1: Core and I side. Joining me here in our Bloomberg

567
00:32:08,720 --> 00:32:11,200
Speaker 1: Night on One studio in Washington, Tom, you're in your

568
00:32:11,200 --> 00:32:15,640
Speaker 1: Gucci gulch. I can spy it here from our studio

569
00:32:15,640 --> 00:32:18,400
Speaker 1: on the north the northeast quarter of the building. We've

570
00:32:18,440 --> 00:32:21,280
Speaker 1: got a press conference coming up in six moments. Matt

571
00:32:21,320 --> 00:32:25,280
Speaker 1: Miller and Estonia Tall in Estonia with Mr Dragon, Then

572
00:32:25,280 --> 00:32:28,719
Speaker 1: onto the comy testimony. This is Bloomberg. Stay with us.

573
00:32:42,360 --> 00:32:47,000
Speaker 1: I was watching Gabriel Euro weekend off inflation talk. You can,

574
00:32:47,360 --> 00:32:50,280
Speaker 1: folks hear the cadence of the words and look at

575
00:32:50,320 --> 00:32:54,000
Speaker 1: the Bloomberg and see things give way. There's a lot

576
00:32:54,000 --> 00:32:58,560
Speaker 1: of uncertainty about inflation right now, isn't there? Gabriel? Um, Yes,

577
00:32:58,640 --> 00:33:03,920
Speaker 1: there is um, But I think that's partly because UM

578
00:33:05,120 --> 00:33:09,680
Speaker 1: market participants want things to move steadily in one direction.

579
00:33:09,800 --> 00:33:13,880
Speaker 1: If inflation is rising, you would like inflation to keep rising.

580
00:33:13,920 --> 00:33:17,080
Speaker 1: If inflation is falling, you wanted to fall. You don't

581
00:33:17,200 --> 00:33:21,000
Speaker 1: want it to be on a vague but the ractic

582
00:33:21,200 --> 00:33:24,640
Speaker 1: upward trend, which which is my view of where we

583
00:33:24,720 --> 00:33:28,760
Speaker 1: are right now, and that is so in confusion, particularly

584
00:33:28,800 --> 00:33:34,000
Speaker 1: at the time when central banks still are concerned that

585
00:33:34,080 --> 00:33:39,960
Speaker 1: inflation may not be strong enough for them, and I

586
00:33:40,000 --> 00:33:45,400
Speaker 1: can understand market uncertainty. I think it's possibly exaggerated, Gabriel,

587
00:33:45,840 --> 00:33:49,800
Speaker 1: How effectively is the CCP is Mario drug TCP being patient,

588
00:33:50,120 --> 00:33:55,120
Speaker 1: confident and persistent. Well, he certainly is being persistent, that

589
00:33:55,480 --> 00:34:02,360
Speaker 1: projects confident, patient, is he? Well? I would actually look,

590
00:34:02,560 --> 00:34:07,160
Speaker 1: the ECB has done well in the sense that inflation

591
00:34:07,520 --> 00:34:12,040
Speaker 1: it headed towards targets. Compare this where we were two

592
00:34:12,120 --> 00:34:15,680
Speaker 1: or three years ago. Compare money and credit growth with

593
00:34:15,760 --> 00:34:17,759
Speaker 1: where we were two or three years ago. They've done

594
00:34:17,960 --> 00:34:21,560
Speaker 1: very well. However, I'm not entirely sure how much of

595
00:34:21,600 --> 00:34:23,880
Speaker 1: this is really the CB is doing. As you know,

596
00:34:23,960 --> 00:34:26,680
Speaker 1: I'm a monitorist. I look at money and credit data.

597
00:34:27,440 --> 00:34:31,200
Speaker 1: Broad money started growing quite rapidly and started picking up

598
00:34:31,200 --> 00:34:34,719
Speaker 1: in the Euro Area before the CD started its assets

599
00:34:34,719 --> 00:34:37,560
Speaker 1: as a purchases, so it may have been helped by it,

600
00:34:38,160 --> 00:34:42,040
Speaker 1: But that deflation was no longer a threat, that was

601
00:34:42,080 --> 00:34:45,920
Speaker 1: already clear three years ago. I think the CBS policies helping.

602
00:34:45,960 --> 00:34:49,839
Speaker 1: I don't think it's doing any harm um, but it's

603
00:34:49,880 --> 00:34:52,719
Speaker 1: also very clear in spite of what Mr Drug He says,

604
00:34:52,760 --> 00:34:55,960
Speaker 1: that there is a lively debate inside the CB where

605
00:34:56,000 --> 00:34:59,760
Speaker 1: particularly the Germans are not happy with ultra low interest,

606
00:35:00,560 --> 00:35:03,200
Speaker 1: with what they perceived to be bailing out of foreigner.

607
00:35:03,719 --> 00:35:06,480
Speaker 1: I'm watching the screen here, folks, and there is some

608
00:35:06,520 --> 00:35:09,799
Speaker 1: correlation going on in a weaker euro. Gabriel, We've got

609
00:35:09,840 --> 00:35:13,120
Speaker 1: time for one final question this morning. As you mentioned

610
00:35:13,160 --> 00:35:16,239
Speaker 1: that the Germans are watching this, I'm looking at a

611
00:35:16,400 --> 00:35:20,200
Speaker 1: rollover in the German two year to further negative low rates. No,

612
00:35:20,360 --> 00:35:23,480
Speaker 1: not the record lows that we saw in February, the

613
00:35:23,560 --> 00:35:26,960
Speaker 1: last week of February, but the last week or ten

614
00:35:27,040 --> 00:35:30,800
Speaker 1: days or fourteen days has been ugly for the German

615
00:35:30,840 --> 00:35:34,560
Speaker 1: two year to lower negative rates. How does the Bundesbank

616
00:35:34,680 --> 00:35:42,480
Speaker 1: perceive that it's a look Apart from being concerned, I

617
00:35:42,520 --> 00:35:46,080
Speaker 1: think that they're they're obviously worried about what it means

618
00:35:46,160 --> 00:35:48,920
Speaker 1: in terms of what is it markets perceived that they

619
00:35:48,960 --> 00:35:52,200
Speaker 1: don't perceive. The Bundesbank sees inflation is picking up the

620
00:35:52,200 --> 00:35:55,120
Speaker 1: economy is in great guns. We want hire interest rates,

621
00:35:55,760 --> 00:35:59,759
Speaker 1: wild markets incapable of taking that on board if you

622
00:35:59,800 --> 00:36:02,080
Speaker 1: don't new months ago. A month ago I would have

623
00:36:02,080 --> 00:36:05,800
Speaker 1: said it's political answer. Should no longer be the case.

624
00:36:07,360 --> 00:36:10,359
Speaker 1: I think the Bundesbank is as confused as we are.

625
00:36:10,440 --> 00:36:13,840
Speaker 1: But I also think the Bundesbank is happy with d

626
00:36:14,040 --> 00:36:17,040
Speaker 1: CV for all it's a doubbish tone having made at

627
00:36:17,120 --> 00:36:22,000
Speaker 1: least one tiny little hawkish move. Well, Gabriel got to

628
00:36:22,040 --> 00:36:24,960
Speaker 1: cut it off there. Gabriel Stein with r G forecast

629
00:36:25,080 --> 00:36:27,760
Speaker 1: r G, thank you so much, greatly appreciate you staying around.

630
00:36:40,160 --> 00:36:43,680
Speaker 1: Marty Schenker joining the Center studios in Washington and one

631
00:36:43,760 --> 00:36:47,120
Speaker 1: of them studios he has had all of government and

632
00:36:47,239 --> 00:36:49,799
Speaker 1: politics today. He is supposed to be at a heart

633
00:36:49,840 --> 00:36:53,520
Speaker 1: to sixteen, but fell on the general's sword and gave

634
00:36:53,560 --> 00:36:57,560
Speaker 1: it up for two corporals, colonel and a couple of

635
00:36:57,640 --> 00:37:01,279
Speaker 1: first lieutenants who may not survive party. If before we

636
00:37:01,360 --> 00:37:04,120
Speaker 1: go to Greg Villier, if you were hard to sixteen,

637
00:37:04,200 --> 00:37:07,200
Speaker 1: what would you be listening for today? Well, you know

638
00:37:07,360 --> 00:37:11,320
Speaker 1: the key thing is, is there anything in in Comy's

639
00:37:11,360 --> 00:37:14,040
Speaker 1: back pocket that he is wheld and it's just waiting

640
00:37:14,080 --> 00:37:17,160
Speaker 1: for the right question to provide it um. He has

641
00:37:17,239 --> 00:37:20,680
Speaker 1: a history of doing that kind of thing. Whether that

642
00:37:20,760 --> 00:37:24,080
Speaker 1: will happen today, that will be the key thing. Is

643
00:37:24,080 --> 00:37:26,479
Speaker 1: there anything new? Thank you so much Morty for joining

644
00:37:26,560 --> 00:37:28,759
Speaker 1: us today. Let's dive into some questions joining us now.

645
00:37:29,120 --> 00:37:31,480
Speaker 1: There is only one guest we can have right now,

646
00:37:32,040 --> 00:37:35,839
Speaker 1: and as Gregory Valier of Horizon Investments. What I love

647
00:37:35,920 --> 00:37:38,600
Speaker 1: to do greg in your morning note for Horizon is

648
00:37:38,680 --> 00:37:42,560
Speaker 1: going and find the one classic Valier sentence, and there

649
00:37:42,640 --> 00:37:48,200
Speaker 1: it is wild cards? Does anyone have anything on tape? Oh?

650
00:37:48,360 --> 00:37:52,080
Speaker 1: You Watergate type? You? I mean, that's the kind of bombshell.

651
00:37:52,480 --> 00:37:55,839
Speaker 1: Can we really find out today if there's something on tape? Oh?

652
00:37:56,000 --> 00:37:59,160
Speaker 1: John dene Well, I sort of agree with Marty. I

653
00:37:59,200 --> 00:38:01,640
Speaker 1: think he made a very point. There could be a

654
00:38:01,719 --> 00:38:05,760
Speaker 1: wild card here. In addition to tape. What about the leakers,

655
00:38:05,800 --> 00:38:08,920
Speaker 1: who were the leaders? What were their motives? What about

656
00:38:09,480 --> 00:38:15,080
Speaker 1: you know these are salacious sex tapes? What about financial entanglements.

657
00:38:15,120 --> 00:38:17,560
Speaker 1: There's a lot that could come up during Q and A.

658
00:38:17,960 --> 00:38:23,320
Speaker 1: What does he do when these embarrassing questions are sensitive questions,

659
00:38:23,360 --> 00:38:26,560
Speaker 1: I should say, are asked? Does he plead the fifth?

660
00:38:26,640 --> 00:38:29,120
Speaker 1: Does he plead the seventh, what does he you know,

661
00:38:29,760 --> 00:38:33,280
Speaker 1: what's he do? Well? His silence would speak volumes, wouldn't

662
00:38:33,320 --> 00:38:36,960
Speaker 1: it if he refuses to answer a question about uh

663
00:38:37,160 --> 00:38:40,920
Speaker 1: manaforts or you know, there's so many angles to this story. Uh.

664
00:38:41,080 --> 00:38:43,160
Speaker 1: If Comey says and then no, I can't go there,

665
00:38:43,480 --> 00:38:46,480
Speaker 1: I think it'll just raise suspicions even more. Let me

666
00:38:46,560 --> 00:38:49,239
Speaker 1: bring in my colleague in Washington with Greg del here

667
00:38:49,400 --> 00:38:53,640
Speaker 1: is Marty Schenker, Marty, Yeah, Well, among other things, UH

668
00:38:55,360 --> 00:39:00,800
Speaker 1: like Watergate, these hearings do tend to bring some of

669
00:39:00,880 --> 00:39:04,600
Speaker 1: the senators themselves, the questioners in focus. And if you

670
00:39:05,040 --> 00:39:06,879
Speaker 1: for those of us who remember the water get here

671
00:39:06,960 --> 00:39:12,000
Speaker 1: in sam Irvin became basically a cultural star through his

672
00:39:13,080 --> 00:39:16,800
Speaker 1: his his questioning during the water Game party. Villier was

673
00:39:16,880 --> 00:39:20,600
Speaker 1: too young a command I wish, but it will be

674
00:39:20,640 --> 00:39:23,720
Speaker 1: interesting to see who kind of pops on that screen today.

675
00:39:24,400 --> 00:39:26,120
Speaker 1: You know what I'm going to look for, guys, is

676
00:39:26,239 --> 00:39:30,120
Speaker 1: the Republicans. We all pretty much know the Democrats will

677
00:39:30,160 --> 00:39:33,000
Speaker 1: be scathing, but I thought it was interesting. Last night,

678
00:39:33,080 --> 00:39:36,040
Speaker 1: Paul Ryan was quite critical of Trump. He said it

679
00:39:36,120 --> 00:39:40,880
Speaker 1: was inappropriate for uh for Trump to ask Comey to

680
00:39:41,120 --> 00:39:43,719
Speaker 1: stop the investigation of Flynn, so let's see if this

681
00:39:43,800 --> 00:39:47,560
Speaker 1: starts a trend of Republicans who get critical. Let me

682
00:39:47,600 --> 00:39:49,799
Speaker 1: paint the picture right now, Marty. Another question for Greg

683
00:39:50,000 --> 00:39:52,640
Speaker 1: l but first looking at her to sixteen off our

684
00:39:52,680 --> 00:39:56,640
Speaker 1: Bloomberg Studio monitors here for those of you radio worldwide

685
00:39:56,680 --> 00:39:59,560
Speaker 1: and coast to coast, it is a enormous room. You

686
00:39:59,600 --> 00:40:02,320
Speaker 1: could play a Predators Penguin hockey game in it, with

687
00:40:02,520 --> 00:40:06,560
Speaker 1: about a hundred photographers milling around waiting for the next image.

688
00:40:06,600 --> 00:40:09,360
Speaker 1: The empty seat of Mr Komy and all the senators,

689
00:40:09,719 --> 00:40:11,880
Speaker 1: none of them have set yet. And above are the

690
00:40:11,960 --> 00:40:15,080
Speaker 1: boxes David Gurrow was talking about where the media will

691
00:40:15,120 --> 00:40:19,200
Speaker 1: look down behind Mr Komy is I'm making a joke

692
00:40:19,440 --> 00:40:25,080
Speaker 1: acres of people like Marty Schenker. Ready to listen, Marty, Marty,

693
00:40:25,840 --> 00:40:28,560
Speaker 1: question for Greg please, but Marty, really, all that's missing

694
00:40:28,640 --> 00:40:31,520
Speaker 1: from the days of Senator Urban and Senator Baker is

695
00:40:31,560 --> 00:40:36,800
Speaker 1: a cigar smoke. Yeah, that's right. Uh, it is definitely

696
00:40:36,960 --> 00:40:41,480
Speaker 1: riveting this town. And I would say in most businesses

697
00:40:41,520 --> 00:40:44,759
Speaker 1: across America or anybody who's at home, they're gonna be

698
00:40:44,840 --> 00:40:48,880
Speaker 1: watching this and uh that has that has a lot

699
00:40:48,960 --> 00:40:52,800
Speaker 1: of risks for this president, right because everybody will be

700
00:40:52,960 --> 00:40:56,880
Speaker 1: turning on every word. And if, in case there is

701
00:40:57,080 --> 00:41:00,239
Speaker 1: a wild card that comes out, it's gonna be through

702
00:41:00,320 --> 00:41:03,719
Speaker 1: social media, just wildfire, not just here in the US,

703
00:41:03,800 --> 00:41:06,279
Speaker 1: but around the world. And if I could add something, guys,

704
00:41:06,640 --> 00:41:10,480
Speaker 1: political capital is so important in this town. There's a

705
00:41:10,520 --> 00:41:13,719
Speaker 1: poll out this morning showing Trump's job approval rating down

706
00:41:13,760 --> 00:41:17,560
Speaker 1: to thirty percent. If he gets under thirty this summer,

707
00:41:17,920 --> 00:41:20,239
Speaker 1: his political capital will be such that a lot of

708
00:41:20,320 --> 00:41:25,400
Speaker 1: Republicans will abandon him. And that has implications for policy,

709
00:41:25,560 --> 00:41:27,480
Speaker 1: right because he has a lot of things on his

710
00:41:27,600 --> 00:41:30,440
Speaker 1: plate up front of Congress. Here we are with Greg

711
00:41:30,600 --> 00:41:33,880
Speaker 1: Ville and Marty Shanker waiting for the testimony. It's a

712
00:41:33,960 --> 00:41:37,880
Speaker 1: good uh twenty four minutes. Greg, Let me get in

713
00:41:37,960 --> 00:41:39,759
Speaker 1: one more question here, if I could I guess the

714
00:41:39,800 --> 00:41:43,000
Speaker 1: President's going to tweet and make a response. How's the

715
00:41:43,080 --> 00:41:46,840
Speaker 1: White House doing and organizing the president's day? Dann Balls

716
00:41:47,280 --> 00:41:51,000
Speaker 1: I thought wrote a really terse column in the Washington

717
00:41:51,080 --> 00:41:54,279
Speaker 1: Post last night of a president alone. What's the level

718
00:41:54,320 --> 00:41:57,680
Speaker 1: of aloneness as we go to a testimony, we may

719
00:41:57,760 --> 00:42:02,240
Speaker 1: find out Tom because early Trump's lawyers and his intimates,

720
00:42:02,280 --> 00:42:06,160
Speaker 1: maybe including Avanka, has told him do not tweet today.

721
00:42:06,600 --> 00:42:09,719
Speaker 1: If he tries to refute every point that Comy makes

722
00:42:10,040 --> 00:42:12,360
Speaker 1: that could be used against him down the road. So

723
00:42:12,480 --> 00:42:14,200
Speaker 1: I think an awful lot of people close to him

724
00:42:14,200 --> 00:42:17,160
Speaker 1: are saying, take our advice. So we'll find out he's

725
00:42:17,200 --> 00:42:20,839
Speaker 1: not known to take anybody's advice. I would be very

726
00:42:20,880 --> 00:42:24,600
Speaker 1: surprised to see him tweet in real time, given the

727
00:42:24,680 --> 00:42:27,440
Speaker 1: fact that you know, our reporting is that his personal

728
00:42:27,520 --> 00:42:30,680
Speaker 1: attorney is sitting there, were watching with him and his

729
00:42:30,840 --> 00:42:33,279
Speaker 1: legal team, and it would seem to me the moment

730
00:42:33,360 --> 00:42:37,319
Speaker 1: he raises his iPhone, they're going to say put that down. Yep.

731
00:42:38,200 --> 00:42:49,840
Speaker 1: Easier said than done, right. Thanks for listening to the

732
00:42:49,880 --> 00:42:56,719
Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,

733
00:42:57,120 --> 00:43:00,920
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at

734
00:43:00,960 --> 00:43:05,640
Speaker 1: Tom Keene. David Gura is at David Gura. Before the podcast,

735
00:43:05,960 --> 00:43:20,479
Speaker 1: you could always catch us worldwide. I'm Bloomberg Radio. Runt

736
00:43:20,520 --> 00:43:24,040
Speaker 1: you by Bank of America Mary Lynch. With virtual reality,

737
00:43:24,320 --> 00:43:29,680
Speaker 1: virtually everything will change. Discover opportunities in a transforming world,

738
00:43:30,120 --> 00:43:34,399
Speaker 1: be of a mL dot Com, slash VR, Mary Lynch,

739
00:43:34,520 --> 00:43:36,840
Speaker 1: Pierced Fenner and Smith Incorporated,