WEBVTT - Even McConnell Is Happy to See Trump Impeached: Timothy O'Brien 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.960 and on Bloomberg dot Com. Timothy O'Brien, Senior Columns from 0:00:20.960 --> 0:00:23.920 Bloomberg Opinion, is out with a beautifully crafted opinion today. 0:00:23.920 --> 0:00:27.280 It begins with a quotation of Frank Sinatra's My Way, 0:00:27.800 --> 0:00:30.600 and it continues on and essentially it says that the 0:00:30.600 --> 0:00:34.080 president barely seems to notice that the fishers he's opened 0:00:34.159 --> 0:00:38.160 are now swallowing him. Even Mitch McConnell happy to see 0:00:38.200 --> 0:00:41.960 the president impeached. Tim, thanks for joining. You could go 0:00:42.040 --> 0:00:44.520 so far as to say, especially Mitch McConnell is happy 0:00:44.560 --> 0:00:46.720 to see the president impeached because now he gets to 0:00:46.760 --> 0:00:49.760 get rid of President Trump and all the bad things 0:00:49.760 --> 0:00:52.360 that are associated with him. But a lot of the 0:00:52.360 --> 0:00:54.680 work that he wanted to see don got done during 0:00:54.720 --> 0:00:57.360 this last four years. Well, Vonny, the first thing I 0:00:57.360 --> 0:00:58.720 want to say is that I'm well aware of your 0:00:58.720 --> 0:01:02.600 own prodigious musical Ellen, I'm grateful that you gave a 0:01:02.640 --> 0:01:06.200 ad tip to Frank Sinatra um in this one on 0:01:06.720 --> 0:01:09.959 you know, on McConnell, I think this is a very 0:01:10.000 --> 0:01:14.160 interesting moment because they did get a lot of practical 0:01:14.840 --> 0:01:20.319 conservative policy out of Trump that they that um Republicans wanted, 0:01:20.959 --> 0:01:24.440 a tax cut, deregulation in a more conservative court. I 0:01:24.480 --> 0:01:29.200 think the question that's always hung over that processes was 0:01:29.280 --> 0:01:32.480 getting those things worth all of the other trade offs, 0:01:32.560 --> 0:01:37.959 the debased public dialogue, breaching the rule of law, and 0:01:38.120 --> 0:01:40.800 on and on and on, culminating in in an insurrection 0:01:40.840 --> 0:01:44.160 at the Capitol last week. And I think, you know, 0:01:44.200 --> 0:01:47.880 it's certainly a safetime for McConnell. See he's rethinking those 0:01:47.920 --> 0:01:50.920 things because he already got them trumps in his twilight 0:01:51.040 --> 0:01:55.360 days as president. Uh. Nonetheless, I think what you're seeing 0:01:55.480 --> 0:01:58.840 is this existential debate within the Republican Party about what 0:01:59.000 --> 0:02:00.880 does the party want to be and how should it 0:02:00.960 --> 0:02:06.920 represent conservatism and should it be classic um you know, uh, 0:02:07.120 --> 0:02:13.480 fiscal uh hawkishness, foreign policy hawkishness UM, or be a 0:02:13.560 --> 0:02:18.640 more of the cultural um uh moment that involves a 0:02:18.639 --> 0:02:22.000 lot of cultural division, and the party's really split between 0:02:22.000 --> 0:02:24.520 it's far right and what I would call them McConnell wing. 0:02:24.560 --> 0:02:27.160 And I think McConnell is now saying I wanted to 0:02:27.200 --> 0:02:29.760 be otherwise, and if that comes at the expense of 0:02:29.800 --> 0:02:33.040 Donald Trump's future, so be it. So, Tim, that's a 0:02:33.040 --> 0:02:35.520 real question. I think, as you mentioned, for a lot 0:02:35.600 --> 0:02:40.880 of Republican semi four million people voted for Trump, presumably 0:02:41.800 --> 0:02:44.760 a sizeable portion of those semi four million people were 0:02:44.760 --> 0:02:47.760 represented by the people that did, in fact march on 0:02:47.840 --> 0:02:51.560 the Capitol UH last week. Is that a wing of 0:02:51.600 --> 0:02:55.840 the party that is just lost to that, I guess 0:02:55.840 --> 0:02:58.239 the core Republican Party, or is that now the core 0:02:58.400 --> 0:03:01.079 Republican Party? Well, I think first and foremost, you know, 0:03:01.120 --> 0:03:03.120 I think when we when we talk about huge blocks 0:03:03.120 --> 0:03:05.280 of voters want to acts who a Republican or who 0:03:05.280 --> 0:03:09.840 are Democrat. If you go back to every UM UH 0:03:10.080 --> 0:03:14.680 presidential election through the nine twenties, most of them, except 0:03:14.760 --> 0:03:18.640 for one of Roosevelt's elections maybe two and Ronald Reagan 0:03:18.960 --> 0:03:23.480 in most of them were decided by very narrow margins. 0:03:23.480 --> 0:03:27.760 It was rare to have the country tilt overwhelmingly Republican 0:03:27.960 --> 0:03:33.240 overwhelmingly Democrat. This last one UM was relatively narrow, but 0:03:33.360 --> 0:03:36.160 that's that's not out of keeping with where we've been. 0:03:36.160 --> 0:03:38.840 And I think the reality is that most Republicans and 0:03:38.920 --> 0:03:41.240 most Democrats vote by default. And I think we get 0:03:41.280 --> 0:03:44.960 into very dangerous area when we start to say, do 0:03:44.960 --> 0:03:48.400 do extreme members of the Republican Party actually represent the 0:03:48.400 --> 0:03:51.200 party itself? And does that mean the party has to 0:03:51.240 --> 0:03:55.880 accommodate them permanently? And and I would say, and I 0:03:55.880 --> 0:03:59.320 think that again, that's what I think that the party 0:03:59.360 --> 0:04:01.360 is trying to get armed around. You know, they let 0:04:01.880 --> 0:04:05.200 essentially with Trump the monster out of the cave, the 0:04:05.240 --> 0:04:08.320 monster turned around and ate the children. And now they've 0:04:08.360 --> 0:04:10.760 got to figure out what to do. And and I 0:04:10.800 --> 0:04:13.080 think the impeachment is part of that. I think where 0:04:13.120 --> 0:04:17.080 Mitch McConnell and and over, I think at least two 0:04:17.080 --> 0:04:19.520 dozen Republicans who were going to vote for impeachment are 0:04:19.960 --> 0:04:22.520 they're saying, no, it's time for a change. Well, And 0:04:22.560 --> 0:04:25.240 in fact, Joshua Green did a great thing, and he 0:04:25.279 --> 0:04:28.360 went back through the voting records of those that were 0:04:28.400 --> 0:04:32.120 identified storming the Capitol Hill the other day, as many 0:04:32.120 --> 0:04:33.880 as he could find, as many as he could get 0:04:33.920 --> 0:04:37.039 access to, and found that those who stormed the Capital 0:04:37.080 --> 0:04:39.960 have very erratic voting records, and some of them, you know, 0:04:40.240 --> 0:04:44.240 are not even registered Republican. So, Tim, what happens to 0:04:44.400 --> 0:04:49.320 the likes of Josh Holly, the likes of Ted Cruz. Uh, 0:04:49.520 --> 0:04:52.440 you know, that's to be seen. I think it's it's 0:04:52.560 --> 0:04:56.479 very hard to find ways to punish senators outside of 0:04:56.520 --> 0:05:02.159 the voting booth. And and um, I think McConnell is 0:05:02.160 --> 0:05:04.440 is going to flex his muscles around here that might 0:05:04.480 --> 0:05:09.480 involve stripping them of committee assignments. Um. Their hometown newspapers 0:05:09.640 --> 0:05:14.240 have called on them to resign. Ron Johnson's as well. Um. 0:05:14.839 --> 0:05:17.960 I think that the dispiriting and damaging thing about Cruise 0:05:18.000 --> 0:05:21.040 and Holly in particulars they're both trained lawyers. Holly went 0:05:21.080 --> 0:05:24.039 to Yale, Crews went to Harvard. Holly was the attorney 0:05:24.080 --> 0:05:26.640 general of Missouri. These are men who have been trained 0:05:26.720 --> 0:05:29.080 to respect the law and the rule of law, and 0:05:29.120 --> 0:05:34.000 they were out fomenting an insurrection. Um uh it. You know, 0:05:34.200 --> 0:05:36.800 it remains to be seen what happens to them, But 0:05:36.839 --> 0:05:39.640 I suspect, at least until they're up for re election again, 0:05:40.000 --> 0:05:42.560 they may just skate along. Tim. I'm so glad we're 0:05:42.640 --> 0:05:45.240 chatting with you today because not just about the impeachment, 0:05:45.279 --> 0:05:47.120 but another piece of news. I know you're gonna have 0:05:47.160 --> 0:05:51.479 an interesting take on New York City pulling contracts with 0:05:51.520 --> 0:05:54.640 the Trump organization for you know, the ice rinks and 0:05:54.680 --> 0:05:57.320 the golf courses. What do you think the reaction is 0:05:57.480 --> 0:06:00.200 by the President and by the Trump organization here because 0:06:00.200 --> 0:06:02.640 these are near and dear to their hearts. I would 0:06:02.640 --> 0:06:05.599 think that that's a great question, Paul. It's not only 0:06:05.640 --> 0:06:07.920 near and dear to their hearts because it's in New York, 0:06:08.240 --> 0:06:11.400 it's also real money, and and real money is near 0:06:11.400 --> 0:06:14.200 and dear to his heart. He Uh, those properties in 0:06:14.240 --> 0:06:17.240 New York generated about seventeen million dollars a year in revenue. 0:06:17.279 --> 0:06:21.000 I suspect that's around five or so of the Trump 0:06:21.080 --> 0:06:24.839 organization's pre pandemic revenue. But a lot of the you know, 0:06:24.880 --> 0:06:28.360 the meat in the Trump Organization's revenue stream came from 0:06:28.680 --> 0:06:32.200 um urban commercial and residential real estate. That's all been 0:06:32.320 --> 0:06:36.720 very stressed. Whereas those city payments are steady cash flow. 0:06:36.760 --> 0:06:39.279 They can rely on them. And Trump is certainly in 0:06:39.320 --> 0:06:42.960 the short term possibly squeezed for funds because he has 0:06:43.680 --> 0:06:47.960 um over a billion dollars in debt on a portfolio 0:06:48.040 --> 0:06:50.120 that's worth in the neighborhood of two point seven to 0:06:50.360 --> 0:06:53.920 three billion dollars pre pandemic. But he's got four hundred 0:06:53.960 --> 0:06:57.600 billion coming to relatively soon, so he's gonna need cash. 0:06:57.920 --> 0:07:00.400 So not having access to cash in these New York 0:07:00.400 --> 0:07:05.360 properties is a problem, uh, monetary, financially, but it's also 0:07:05.600 --> 0:07:10.880 you know, it's a problem um almost spiritually emblematically, because 0:07:10.920 --> 0:07:13.800 Donald Trump, for as much as he disparages New York, 0:07:13.800 --> 0:07:16.840 prides himself on being a New Yorker, and this is 0:07:16.960 --> 0:07:20.280 yet another rejection of him by New York. Tim, we're 0:07:20.360 --> 0:07:22.280 really out of time. But you say at the end 0:07:22.280 --> 0:07:24.600 that as he self emolates, you know, he will move 0:07:24.640 --> 0:07:28.040 forward with few regrets, but with plenty of plans for payback. 0:07:28.400 --> 0:07:32.000 How do you envision that? To quote Joe Kennedy, don't 0:07:32.040 --> 0:07:34.640 get mad get even I think Donald Trump lives by 0:07:34.640 --> 0:07:38.000 that mantra. Hey, Tim, thanks so much for joining us. 0:07:38.000 --> 0:07:40.600 It's gonna be interesting to see the post White House 0:07:40.920 --> 0:07:45.040 time for President Trump. Tim O'Briant, senior columnists for Bloomberg Opinion, 0:07:45.360 --> 0:07:49.280 joining us from Lovely Montclair, New Jersey. We appreciate him 0:07:49.280 --> 0:07:51.240 taking the time, and Vannie will be very interesting not 0:07:51.320 --> 0:07:54.160 only the next uh, you know, several days as it 0:07:54.200 --> 0:07:58.640 relates to the impeachment, but also again how President Trump, um, 0:07:58.680 --> 0:08:03.480 you know, what his post administration, post official office time 0:08:03.520 --> 0:08:05.720 will look like. Where will he be, what will he do? 0:08:07.000 --> 0:08:10.680 Phrase likely to get mad? Yeah, that's right, we'll see. 0:08:10.720 --> 0:08:16.320 We'll certainly follow up on that. This is Bloomberg. Well, 0:08:16.320 --> 0:08:18.640 a lot of investors last week, as they looked on 0:08:18.720 --> 0:08:21.400 in horror at the insurrection that took place at the 0:08:21.480 --> 0:08:26.080 Capitol on Wednesday, were pleasantly surprised, shocked. I'm not sure 0:08:26.080 --> 0:08:28.000 which way to really call it about how the market 0:08:28.080 --> 0:08:32.200 can trade up in the face of such uncertainty. Uh 0:08:32.360 --> 0:08:34.800 in Washington, d c our next guest, I've never received 0:08:34.840 --> 0:08:37.920 lots of phone calls from her clients asking the same. 0:08:38.000 --> 0:08:42.000 Let's check in with Christina Hooper, Chief Global Market Strategies 0:08:42.080 --> 0:08:45.680 for Investco. They have one point three five trillion dollars 0:08:45.920 --> 0:08:49.960 assets under management. Christina, thanks so much for joining us again. 0:08:50.400 --> 0:08:53.319 You know, at this time of year, we would typically 0:08:53.360 --> 0:08:55.520 just say, hey, we'd love to get your year head view. 0:08:55.559 --> 0:08:57.600 And while we certainly want to get that, we want 0:08:57.600 --> 0:09:00.520 to get that in the context of what happened last week. 0:09:00.559 --> 0:09:03.199 Did you have to change your outlook at all based 0:09:03.240 --> 0:09:06.640 upon what we saw in Washington last week. No, we didn't, 0:09:06.800 --> 0:09:10.240 because markets looked through what happened. I mean, it was 0:09:10.280 --> 0:09:15.160 really amazing that stocks barely flinched because they're looking ahead 0:09:15.320 --> 0:09:18.640 to a lot more certainty than we had at any 0:09:18.640 --> 0:09:21.840 time during up until really the end of the year, 0:09:21.960 --> 0:09:24.240 and that is that we are going to have broad 0:09:24.280 --> 0:09:27.400 distribution of effective vaccines and that is going to be 0:09:27.440 --> 0:09:32.199 a game changer for the economy. In also, of course, 0:09:32.240 --> 0:09:35.280 the market doesn't month this to stop. The market wants 0:09:35.320 --> 0:09:38.480 us to keep going, and there are enough things underpinning 0:09:38.520 --> 0:09:40.960 it from you know, FED moves to as you say, 0:09:41.040 --> 0:09:43.720 the Biden administration potentially helping the market. But at some 0:09:43.760 --> 0:09:47.800 point a democratic administration is not so good for stocks, right, Christina, 0:09:47.880 --> 0:09:51.400 When do we see that, Well, that's when we start 0:09:51.480 --> 0:09:56.480 hearing the Biden administration talking about raising taxes and seeing 0:09:56.600 --> 0:10:00.839 that there's enough support in the House and in particular 0:10:00.920 --> 0:10:04.320 the Senate. Keep in mind that we did, of course 0:10:04.559 --> 0:10:08.240 see last week at the facto majority for Democrats in 0:10:08.240 --> 0:10:12.040 the Senate, but it is razor sin and that suggests 0:10:12.080 --> 0:10:15.480 that it is unlikely that any kind of very significant 0:10:15.559 --> 0:10:19.240 tax hikes would get past UM. Maybe we could see 0:10:19.360 --> 0:10:22.640 some small increases, particularly in the corporate tax, but we're 0:10:22.679 --> 0:10:27.880 not going back to pre Trump levels in terms of taxes. So, Christina, 0:10:27.960 --> 0:10:31.280 how about from the regulatory perspective, some are concerned that 0:10:31.440 --> 0:10:35.280 under a democratic administration and one that has albeit a 0:10:35.400 --> 0:10:38.240 razor thin margin in both the House and the Senate, 0:10:38.720 --> 0:10:41.800 that regulatory risk is something that investors may have to 0:10:41.840 --> 0:10:46.080 deal with more going forward. How do you view that? Definitely, 0:10:46.160 --> 0:10:50.760 regulatory risk is an issue for investors. There's no two 0:10:50.800 --> 0:10:54.520 ways about it. Um, But it's all about UM. What 0:10:54.880 --> 0:11:00.160 is the more important factors driving stocks higher and right now? Out? 0:11:00.480 --> 0:11:05.120 The potential for more fiscal stimulus, including the potential for 0:11:05.280 --> 0:11:11.720 UM a pretty significant infrastructure package, outweighs the regulatory risk. 0:11:13.000 --> 0:11:15.040 How many people in the service sector can we put 0:11:15.080 --> 0:11:18.440 to work in construction? Christina? And I'm not being funny. 0:11:18.160 --> 0:11:21.040 I'm suppose I'm trying to say, we can have all 0:11:21.080 --> 0:11:23.560 the construction and all the infrastructure projects in the world, 0:11:23.600 --> 0:11:26.080 but we still need the service sector to be able 0:11:26.120 --> 0:11:28.120 to get back to work. When do you see that happening? 0:11:28.880 --> 0:11:31.600 I think once we had that broad distribution of the vaccine. 0:11:32.440 --> 0:11:35.000 Keep in mind that this is such a different crisis 0:11:35.040 --> 0:11:40.079 than the global financial crisis, that recovery was anemic and 0:11:40.840 --> 0:11:44.640 was for much of its time a jobless recovery. I 0:11:44.720 --> 0:11:46.960 believe strongly that this is going to be a very 0:11:47.000 --> 0:11:49.280 different kind of recovery, that it is going to be 0:11:49.360 --> 0:11:52.400 more robust and more inclusive, so that when we do 0:11:52.480 --> 0:11:55.640 have that broad distribution of vaccines, were likely to see 0:11:55.640 --> 0:11:59.800 the service sector bounce back very very strongly. But I 0:11:59.880 --> 0:12:01.280 do want to push you ll not because what about 0:12:01.320 --> 0:12:03.959 small business. I mean a lot of service sector employees 0:12:03.960 --> 0:12:07.080 are employed by small restaurants and by you know, bars 0:12:07.240 --> 0:12:10.920 and other you know, cafeterias and things like that. Will 0:12:10.960 --> 0:12:13.640 they just be able to open doors again? Surely all 0:12:13.679 --> 0:12:17.720 their capital is gone. Well, certainly some have fallen victim. 0:12:17.880 --> 0:12:21.320 But having said that, we do reduce the odds um 0:12:21.400 --> 0:12:25.200 and we do reduce the level of economic scarring by 0:12:25.320 --> 0:12:29.640 offering more fiscal stimulus. Now, damage was certainly done because 0:12:29.640 --> 0:12:32.760 we went for months without any additional fiscal stimulus, but 0:12:32.840 --> 0:12:35.360 we did get a relatively small package at the end 0:12:35.360 --> 0:12:38.199 of the year, and we're likely to get more. So um, 0:12:38.440 --> 0:12:41.920 I do believe that that, yes, there has been damage 0:12:41.960 --> 0:12:45.479 done to the services sector. But there are some restaurants 0:12:45.480 --> 0:12:47.800 and bars that will be able to reopen and there 0:12:47.840 --> 0:12:50.480 will be new ones coming uh, and so I do 0:12:50.600 --> 0:12:54.800 expect a very significant bounce back in services. Christina. On 0:12:54.840 --> 0:12:57.720 the equity side, you know, how are you thinking about 0:12:58.200 --> 0:13:01.680 UM this rotation trade that's been working so well in 0:13:01.720 --> 0:13:04.480 the markets over the last four or five months, UM 0:13:04.720 --> 0:13:08.040 folks kind of getting into the more cyclical names, maybe 0:13:08.120 --> 0:13:10.920 some small cat names, anticipating kind of what I think 0:13:10.960 --> 0:13:13.640 you're looking for, which is a strong rebound in the 0:13:13.640 --> 0:13:16.319 economy beginning, you know, maybe the second third quarter of 0:13:16.360 --> 0:13:18.280 this year. How do you think about that rotation trade. 0:13:18.960 --> 0:13:21.360 I think that continues. I mean, we certainly have to 0:13:21.400 --> 0:13:23.960 expect that there are going to be difficult days in 0:13:23.960 --> 0:13:27.000 the first quarter, that we are going to get really 0:13:27.080 --> 0:13:31.320 negative news slow We're going to see statistics around the 0:13:31.400 --> 0:13:35.920 virus that are very very concerning UM. But I do 0:13:36.080 --> 0:13:39.560 believe that the stock market will look through that and 0:13:39.760 --> 0:13:44.520 look to that more robust economic recovery. So I think 0:13:44.640 --> 0:13:49.040 that the the rotation remains, but that doesn't mean we 0:13:49.080 --> 0:13:53.400 want to abandon all of the more secular growth defensive names. 0:13:53.440 --> 0:13:56.880 I do believe tech has legs even as we see 0:13:56.880 --> 0:13:59.960 that strong rotation continued towards the cyclicals and small cap 0:14:00.360 --> 0:14:03.200 What concerns you Christina? Right now? It doesn't seem like 0:14:03.240 --> 0:14:07.480 there's that much out there that does well. Certainly there 0:14:07.520 --> 0:14:11.040 are risks as we head into one. I think the 0:14:11.160 --> 0:14:16.760 first risk is around the virus and combating that. UM. 0:14:16.920 --> 0:14:22.840 We've already seen variants of COVID nineteen, including one where 0:14:22.840 --> 0:14:26.200 it's questionable to South African variant questionable whether or not 0:14:26.840 --> 0:14:31.480 current vaccines can protect against it. If we find that 0:14:31.720 --> 0:14:34.920 the current vaccines are unable to protect against it, that 0:14:35.160 --> 0:14:38.880 is a real, real problem. UM. I think that's a 0:14:38.960 --> 0:14:41.760 low probability event, but it is a very significant risk. 0:14:41.880 --> 0:14:45.359 The other big risk, which is also I think lower probability, 0:14:46.000 --> 0:14:50.200 is that we see monetary accommodation pull away too quickly. 0:14:50.480 --> 0:14:53.320 And I think certainly what we've heard from recently from 0:14:53.400 --> 0:14:56.480 beneficials suggest that's not going to happen. But those are 0:14:56.560 --> 0:14:59.800 two very significant risks. So how do you expect the 0:15:00.000 --> 0:15:02.000 Do you expect the FED to continue with that messaging 0:15:02.600 --> 0:15:05.920 of moderate rates for the first table future? I do. 0:15:06.520 --> 0:15:09.480 I don't think the FED will make the mistake of 0:15:09.600 --> 0:15:13.400 starting to talk about withdrawing accommodation, even if we do 0:15:13.520 --> 0:15:16.480 get more fiscal stimulus, even if we do see signs 0:15:16.480 --> 0:15:22.200 of inflation which have yet to really show. All right, Christina, 0:15:22.360 --> 0:15:25.600 thank you very much. That is Christina Hooper of Investco. 0:15:25.840 --> 0:15:29.120 Always absolutely thrilled to have your thoughts, and of course, 0:15:29.120 --> 0:15:31.600 so the market just continues on the pace we are 0:15:31.640 --> 0:15:34.800 hearing from Reuters. I do want to mention Paul, an 0:15:34.880 --> 0:15:37.000 aide to Reuter, is saying that the son of Gop 0:15:37.280 --> 0:15:40.600 is thinking about starting an impeachment trial Friday, that is 0:15:40.640 --> 0:15:42.960 two days from now. Yeah, that's the big news. The 0:15:42.960 --> 0:15:45.280 real question is timing for the Senate. We may be 0:15:45.360 --> 0:15:48.480 getting a little bit of not here. Yeah, exactly, much 0:15:48.560 --> 0:15:52.880 much sooner than we anticipated. Obviously, a lot of today's 0:15:52.880 --> 0:15:55.080 market action will be lead my Intel, which is the 0:15:55.080 --> 0:15:58.160 best performer in the SMPI. But there are other stocks 0:15:58.240 --> 0:16:01.880 hired to Dave Wilson, including some of the pharmaceuticals like Eli, 0:16:01.960 --> 0:16:06.240 Lily and Regeneral with with all the developments of the 0:16:06.280 --> 0:16:09.200 COVID nineteen front and other types of drugs where you've 0:16:09.240 --> 0:16:13.760 really seen uh drug maker's benefit at General Motors is 0:16:13.800 --> 0:16:17.640 another example. And remember those shares hit a record yesterday. 0:16:18.000 --> 0:16:20.520 Uh since the company returned to the public markets. In 0:16:21.640 --> 0:16:26.760 all this coming with enthusiasm for GM's electric vehicles, that 0:16:27.160 --> 0:16:30.640 clearly Intel is sort of the class of the field. 0:16:30.720 --> 0:16:33.160 You might say in today's trading. You know, it's funny, 0:16:33.320 --> 0:16:35.480 I was singing back to yesterday. We were talking about 0:16:35.760 --> 0:16:38.920 Las Vegas Sands and the death of their founder, Shell 0:16:39.200 --> 0:16:42.360 Sheldon Adelson, and you know what might happen because of that, 0:16:42.440 --> 0:16:45.160 and you didn't really see the stock move in response. 0:16:45.480 --> 0:16:49.040 Today it's a much more obvious example. You got CEO 0:16:49.200 --> 0:16:52.320 Bob Swan leaving the chip maker after just two years 0:16:52.360 --> 0:16:55.320 of running the company and on the heels of a 0:16:55.480 --> 0:16:59.840 push by activist investor Dan Lowe for some kind of change, 0:17:00.160 --> 0:17:04.200 possible break up ASTs say, oh, other strategic options. So 0:17:04.560 --> 0:17:08.640 you've got sort of a cause and effect arguably that 0:17:08.720 --> 0:17:11.720 people are seeing in that move, and you know the 0:17:11.720 --> 0:17:14.920 potential for things to happen down the line. And by 0:17:14.960 --> 0:17:17.240 the way, we should point out it's not just Intel 0:17:17.359 --> 0:17:21.280 moving because uh, you know, the chip maker is bringing 0:17:21.280 --> 0:17:25.840 in vm Ware's had Pat Gelsinger to take over from Swan, 0:17:26.160 --> 0:17:29.439 and vm Ware shares them down five point three percent 0:17:29.480 --> 0:17:32.320 as we speak, so you know it's being seen as 0:17:32.359 --> 0:17:35.920 a loss for vm Ware and a win for Intel 0:17:36.040 --> 0:17:39.480 this management change. Let's bring in an A. Rock Ran, 0:17:39.560 --> 0:17:42.639 a senior technology analyst for Bloomberg Intelligence. He's been covering 0:17:42.640 --> 0:17:45.639 the tech space for decades. A Rod, thanks so much 0:17:45.680 --> 0:17:49.199 for joining us here. What does it mean for a 0:17:49.359 --> 0:17:53.080 tech giant like Intel to bring in, uh, someone like 0:17:53.160 --> 0:17:57.280 Pat Gelsinger from vm ware? What's it mean for Intel? So? 0:17:57.560 --> 0:17:59.760 I think it's going to be any interesting move, largely 0:17:59.800 --> 0:18:02.720 big because perhaps one of the strongest CEOs in the 0:18:02.760 --> 0:18:06.000 software world. You know, in our opinion right after you know, 0:18:06.040 --> 0:18:09.080 Microsoft CEO, I would rank Path as the number two 0:18:09.320 --> 0:18:11.920 in the software land. And frankly, you know, the whole 0:18:11.960 --> 0:18:15.920 world is moving towards more software define defined work no 0:18:15.920 --> 0:18:19.040 matter where it is, and Intel really needs some kind 0:18:19.080 --> 0:18:21.600 of a push behind them to you know, get their 0:18:21.640 --> 0:18:24.120 act together. So so I think it's a very sharp 0:18:24.200 --> 0:18:26.800 move for Intel and obviously a big loss for vm 0:18:26.800 --> 0:18:31.399 There who will vm We're fine to take over. So 0:18:31.840 --> 0:18:35.359 they've already announced their CFO as the internim CEO. UM. 0:18:35.520 --> 0:18:38.440 There are a few candidates. There is one particular candidate 0:18:38.480 --> 0:18:42.080 internally that I I really admire. He's their chief operating 0:18:42.200 --> 0:18:45.800 officer for customer operations called Sanja putin. UM. I think 0:18:45.800 --> 0:18:48.560 he could be one person that that could take over 0:18:48.640 --> 0:18:52.400 the real the helm. But you know, it's a it's 0:18:52.400 --> 0:18:55.639 a software company with a number of assets. UM. It 0:18:55.640 --> 0:18:57.560 could be somebody from outside, but you know, my my 0:18:57.640 --> 0:19:01.240 money would be on Sanjai. It's is this signify on 0:19:01.359 --> 0:19:05.760 a rug A push or a bigger push by Intel 0:19:06.080 --> 0:19:08.920 into the cloud? Do they feel like they have relating 0:19:09.480 --> 0:19:13.920 lag behind some of the technology peers. I think, Paul, 0:19:13.960 --> 0:19:16.439 it's more than that. It's just a matter of execution. 0:19:16.520 --> 0:19:19.440 It's a matter of getting their manufacturing problem fixed, getting 0:19:19.440 --> 0:19:22.520 their roadmap fixed. Um. And you know, if I go 0:19:22.640 --> 0:19:25.000 back and think about vm Ware just about four or 0:19:25.000 --> 0:19:27.200 five years ago, you know, it was in a similar 0:19:27.240 --> 0:19:29.960 spot that it was always thought of as a company 0:19:30.040 --> 0:19:33.399 with only on premise products and not doing well. And 0:19:33.440 --> 0:19:35.560 then packed with his genius, you know, came up with 0:19:35.600 --> 0:19:39.040 a couple of acquisitions that were very sharp. Then he um, 0:19:39.359 --> 0:19:41.600 you know, did a deal with Amazon Web Services, just 0:19:41.720 --> 0:19:45.400 a deal to move some of their workloads over to Amazon, 0:19:45.560 --> 0:19:47.720 and boyd what it did to the stock from that 0:19:47.840 --> 0:19:50.680 point onwards. The stock hasn't looked back. And that's been 0:19:50.720 --> 0:19:53.439 about five years. So I mean, this guy knows what 0:19:53.480 --> 0:19:56.640 he's doing when it comes to strategic partnerships as well 0:19:56.680 --> 0:20:01.600 as you know, relevant acquisitions. Deb Swan steer the company 0:20:01.640 --> 0:20:05.920 pretty well until now it doesn't look like see I mean, 0:20:06.080 --> 0:20:09.920 inters been interest and really poorly over the last few years. 0:20:09.920 --> 0:20:12.040 I mean, if you were to take away to push 0:20:12.119 --> 0:20:14.680 the seared or the stock price improvement in the past 0:20:14.720 --> 0:20:18.200 few days, it's not performed well. And you know, evaluation 0:20:18.280 --> 0:20:21.320 wise also it's it's it's it's fairly poor and it 0:20:21.400 --> 0:20:24.240 seems am d is you know, gaining share from them, 0:20:24.320 --> 0:20:27.560 So you know they really need to do something um, 0:20:27.600 --> 0:20:30.040 you know, quickly and and and I would say more 0:20:30.119 --> 0:20:33.359 aggressively to turn the things around. So, Dave, this is 0:20:33.359 --> 0:20:35.679 a big win for Dan Loeb and for you know, 0:20:36.560 --> 0:20:39.480 activist investors perhaps in general. What are we seeing in 0:20:39.480 --> 0:20:43.840 the world of activism, um, in the marketplace here, given 0:20:43.840 --> 0:20:47.439 what's happened uncertainly in the markets, Well, it's kind of 0:20:47.440 --> 0:20:50.159 been a constant over the last few years for for 0:20:50.240 --> 0:20:54.040 activists to step in and push for change. And it 0:20:54.080 --> 0:20:57.760 will be interesting to see how much Dan Lobe actually 0:20:57.800 --> 0:21:00.200 wins because you know, when he came out last month 0:21:00.280 --> 0:21:03.920 with this letter to Intel's chairman. He said that his 0:21:04.160 --> 0:21:07.840 hedge fund Third Point had significant steak. We don't know 0:21:07.880 --> 0:21:10.000 how big the steak is yet, and we may not 0:21:10.200 --> 0:21:14.439 know until mid February, when you know, institutional investors have 0:21:14.560 --> 0:21:17.520 to report on their whole things as of the end 0:21:17.600 --> 0:21:20.560 of December, so you know, that will be sort of 0:21:20.600 --> 0:21:25.920 another piece of the puzzle. How does Bob and his uh, 0:21:26.080 --> 0:21:30.520 you know, shareholders in essence benefit from what's happening at Intel, 0:21:30.640 --> 0:21:32.960 and you know, will they be making moves with the 0:21:33.000 --> 0:21:36.240 shares now that they're running up today? And it's interesting 0:21:36.240 --> 0:21:38.240 how he phrased it in his tweet. He said Swan 0:21:38.320 --> 0:21:39.960 as a contact and did the right thing for old 0:21:39.960 --> 0:21:43.200 steak over orders, stepping aside for Gil Singer, almost taking 0:21:43.200 --> 0:21:44.880 a little bit of credit. But it's not quite clear 0:21:44.920 --> 0:21:47.680 of what was happening behind the scenes. That will take 0:21:47.920 --> 0:21:52.400 a lot of investigation. Really, a Swan named CEO back 0:21:52.400 --> 0:21:55.000 in January of twenty nineteen. He had served as interim 0:21:55.040 --> 0:21:57.960 CEO for about six months before that. But certainly, as 0:21:58.000 --> 0:22:01.080 you both said, Intel shares are up more than nine 0:22:01.119 --> 0:22:08.479 percent today, VM, we're down about five. Well. One of 0:22:08.520 --> 0:22:11.960 the many things on President elect Biden's to do list 0:22:12.080 --> 0:22:15.760 is likely the challenge of repairing the relationship between the 0:22:15.800 --> 0:22:17.400 U S and many of its allies around the world. 0:22:17.400 --> 0:22:20.359 To get a sense of how that might be achieved, 0:22:20.440 --> 0:22:23.639 we welcome Bill Rhodes, President and CEO of William R. 0:22:23.720 --> 0:22:27.960 Rhodes Global Advisors, former chairman at City Bank, and Bill 0:22:28.040 --> 0:22:30.960 is also the author of Banker to the World, Leadership 0:22:31.040 --> 0:22:34.680 Lessons from the front Lines of Global Finance. Bill, thanks 0:22:34.680 --> 0:22:37.320 so much for joining us here and again, the to 0:22:37.359 --> 0:22:40.560 do list for President elect Biden must be, uh, you know, 0:22:40.720 --> 0:22:45.080 quite long. I'm wondering as it relates to China in particular, 0:22:45.600 --> 0:22:48.159 how do you think President LEC. Biden and his administration 0:22:48.200 --> 0:22:51.359 should approach China given what we've experienced over the last 0:22:51.359 --> 0:22:55.200 four years. Great to be on with you, Paul and Vanni. 0:22:55.840 --> 0:23:00.119 I think he puts a real priority on working with 0:23:00.200 --> 0:23:02.840