1 00:00:02,440 --> 00:00:09,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:09,160 --> 00:00:13,280 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:13,360 --> 00:00:16,360 Speaker 1: Eastern on Focar playing and broud Auto with the Bloomberg 4 00:00:16,400 --> 00:00:19,720 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:19,960 --> 00:00:23,480 Speaker 1: or watch us live on YouTube. 6 00:00:23,600 --> 00:00:25,639 Speaker 2: Falls when you're live here on our Bloomberg Interactive Broker 7 00:00:25,720 --> 00:00:28,800 Speaker 2: Studio streaming live on YouTube as well YouTube, dot com 8 00:00:28,800 --> 00:00:33,479 Speaker 2: search Bloomberg Podcast. Policy changes. A lot of folks are 9 00:00:33,560 --> 00:00:36,400 Speaker 2: highlighting the financial services industry to benefit from a lot 10 00:00:36,400 --> 00:00:40,720 Speaker 2: of policy changes. The absolute author on all of the 11 00:00:40,720 --> 00:00:43,960 Speaker 2: Bloomberg Intelligence work on this is Nathan Dean, Senior policy 12 00:00:43,960 --> 00:00:46,800 Speaker 2: ANALYSTO Bloomberg Intelligence. Nathan, I know you guys have gamed 13 00:00:46,800 --> 00:00:50,320 Speaker 2: this out. You've kind of looked at financial industry some 14 00:00:50,360 --> 00:00:52,839 Speaker 2: of the regulations that are that it's dealing with now 15 00:00:52,880 --> 00:00:55,000 Speaker 2: and that are still kind of on the table. What 16 00:00:55,080 --> 00:00:57,160 Speaker 2: do you think you're with what we're seeing here with 17 00:00:57,200 --> 00:00:57,760 Speaker 2: the elections. 18 00:00:58,440 --> 00:01:01,080 Speaker 3: Yeah, so, you know, with the fal services industry, it 19 00:01:01,080 --> 00:01:03,320 Speaker 3: all came down to this rule called the Basel three endgame. 20 00:01:03,920 --> 00:01:06,080 Speaker 3: You know, as outlined by the FED. You're talking about 21 00:01:06,080 --> 00:01:08,600 Speaker 3: a nine percent increase for the GESIPS, the Bank America 22 00:01:08,680 --> 00:01:11,160 Speaker 3: JP Morgan's of you will about three to four percent 23 00:01:11,240 --> 00:01:13,920 Speaker 3: in terms of the regional banks. Now, with President Trump 24 00:01:13,959 --> 00:01:16,399 Speaker 3: winning the Office of the Control of the Currency is 25 00:01:16,480 --> 00:01:18,759 Speaker 3: likely going to flip on day one of next year. 26 00:01:19,080 --> 00:01:22,360 Speaker 3: So this rule is effectively indefinitely delayed. You know this, 27 00:01:22,440 --> 00:01:24,880 Speaker 3: you would need to fed the OCC and the FDIC 28 00:01:25,040 --> 00:01:27,440 Speaker 3: to move forward. Now we think at thirty percent chance 29 00:01:27,480 --> 00:01:29,720 Speaker 3: of it being finalized by twenty twenty six. The reason 30 00:01:29,760 --> 00:01:32,000 Speaker 3: why we're not down to zero is because there is 31 00:01:32,080 --> 00:01:35,560 Speaker 3: potential out there that a Republican led regulator may try 32 00:01:35,560 --> 00:01:37,520 Speaker 3: and move forth with it, but the idea is going 33 00:01:37,560 --> 00:01:39,480 Speaker 3: to be completely different and they're going to essentially start 34 00:01:39,520 --> 00:01:42,040 Speaker 3: from scratch. So if you're talking about capital requirements on 35 00:01:42,040 --> 00:01:45,000 Speaker 3: a global scale, remember the European banks have already implemented 36 00:01:45,000 --> 00:01:47,600 Speaker 3: their version of this. There could be some questions here 37 00:01:47,640 --> 00:01:49,720 Speaker 3: on if the Americans aren't going to do this, why 38 00:01:49,720 --> 00:01:51,960 Speaker 3: should the Europeans on the same side. So certainly a 39 00:01:52,000 --> 00:01:54,160 Speaker 3: lot to play here in terms of the you know, 40 00:01:54,200 --> 00:01:56,559 Speaker 3: deregulatory efforts amongst the investment banks. 41 00:01:56,720 --> 00:01:59,120 Speaker 4: Nathan Dean, you are the consummate Washington insider. When I 42 00:01:59,160 --> 00:02:02,400 Speaker 4: need to get my IF's answered about what's happening in Washington, 43 00:02:02,520 --> 00:02:04,680 Speaker 4: I call you so I have a question here. What 44 00:02:04,880 --> 00:02:07,560 Speaker 4: name should I be looking at more closely than others? 45 00:02:07,800 --> 00:02:10,840 Speaker 4: Bill Lackman, Elon Musk's got Bess and Howard Lucknet. I mean, 46 00:02:10,880 --> 00:02:12,880 Speaker 4: talk to us about what the potential for a Trump 47 00:02:12,919 --> 00:02:14,400 Speaker 4: cabinet may very well look like. 48 00:02:15,360 --> 00:02:15,600 Speaker 2: Yeah. 49 00:02:15,680 --> 00:02:18,800 Speaker 3: So you know, obviously the big question is you going 50 00:02:18,840 --> 00:02:22,280 Speaker 3: to get the Wall Street President Trump? Or are you 51 00:02:22,360 --> 00:02:24,480 Speaker 3: going to get a populist President Trump? And that's the 52 00:02:24,560 --> 00:02:26,760 Speaker 3: question that I don't think anybody really has an answer 53 00:02:26,760 --> 00:02:29,080 Speaker 3: to because you know, for example, at the SEC, you 54 00:02:29,080 --> 00:02:31,160 Speaker 3: know you have Commissioner Hester Purse, who I think would 55 00:02:31,200 --> 00:02:34,640 Speaker 3: be a very popular SEC chair coming from more of 56 00:02:34,639 --> 00:02:37,320 Speaker 3: the conservative wing the populist side of the party. But 57 00:02:37,360 --> 00:02:39,480 Speaker 3: then there's also going to be folks like former J. Clayton. 58 00:02:39,520 --> 00:02:41,800 Speaker 3: You know, obviously his name's been in there for a Treasury, 59 00:02:42,440 --> 00:02:45,280 Speaker 3: but you know, somebody like a disciple, if you will, 60 00:02:45,520 --> 00:02:48,320 Speaker 3: a commissioner or chairman Clayton could be also a name 61 00:02:48,360 --> 00:02:50,400 Speaker 3: at the SEC. So the question that we have, and 62 00:02:50,440 --> 00:02:52,120 Speaker 3: we should find out about this more over the next 63 00:02:52,160 --> 00:02:54,079 Speaker 3: few weeks, is are you going to get the populist Trump? 64 00:02:54,200 --> 00:02:56,520 Speaker 3: Are the Wall Street Trump, and I think you're probably 65 00:02:56,560 --> 00:02:59,320 Speaker 3: going to get a combination of the both, where if 66 00:02:59,320 --> 00:03:02,000 Speaker 3: President Trump cares about your issue in terms of he 67 00:03:02,160 --> 00:03:05,400 Speaker 3: specifically wants to be involved, you'll get a populist Trump. 68 00:03:05,960 --> 00:03:07,919 Speaker 3: If it's something where he's happy to delegate to other 69 00:03:07,960 --> 00:03:10,000 Speaker 3: folks in Washington, then I think you may get a 70 00:03:10,000 --> 00:03:10,680 Speaker 3: Wall Street Trump. 71 00:03:10,720 --> 00:03:12,640 Speaker 4: Only think it took a long time for Trump to 72 00:03:12,639 --> 00:03:15,120 Speaker 4: pick his cabinet and his players back the first time around. 73 00:03:15,120 --> 00:03:17,200 Speaker 4: Apparently he's much more prepared this time. Talk to us 74 00:03:17,200 --> 00:03:19,560 Speaker 4: about timing around some of those selections. When can we appear, 75 00:03:19,919 --> 00:03:21,359 Speaker 4: When can we expect to hear something there? 76 00:03:21,919 --> 00:03:24,040 Speaker 3: Yeah, so I think you're gonna hear it, probably before, 77 00:03:24,160 --> 00:03:26,360 Speaker 3: probably within the next few weeks. I mean, to your point, 78 00:03:26,440 --> 00:03:28,760 Speaker 3: you know they've been talking about this for some time. 79 00:03:28,760 --> 00:03:31,160 Speaker 3: But I would also note that the Republicans have somewhere 80 00:03:31,200 --> 00:03:34,080 Speaker 3: between fifty two potentially as much as fifty six seats 81 00:03:34,080 --> 00:03:36,520 Speaker 3: in the Senate, and as a result, the Republican Senate 82 00:03:36,600 --> 00:03:38,520 Speaker 3: is going to be able to confirm a lot of 83 00:03:38,560 --> 00:03:41,640 Speaker 3: President Trump's appointees on a much quicker basis than if 84 00:03:41,640 --> 00:03:43,560 Speaker 3: you were to have a Democrat controlled Senate or even 85 00:03:43,560 --> 00:03:46,080 Speaker 3: a fifty or fifty one. Now why do we care 86 00:03:46,080 --> 00:03:48,920 Speaker 3: about this, Well, because the faster that those regulatory leaders 87 00:03:48,960 --> 00:03:52,440 Speaker 3: come in place, the faster they can start these deregulatory efforts. 88 00:03:52,600 --> 00:03:54,720 Speaker 3: You know, a regulatory leader, for the most part, can't 89 00:03:54,760 --> 00:03:57,280 Speaker 3: just come in and say, right, this regulation, We're going 90 00:03:57,360 --> 00:03:59,320 Speaker 3: to just completely roll it back on day one. It's 91 00:03:59,320 --> 00:04:01,800 Speaker 3: gonna take nine months, twelve months, if not even two 92 00:04:01,840 --> 00:04:04,120 Speaker 3: years to move forth on that effort. So the quicker 93 00:04:04,120 --> 00:04:06,600 Speaker 3: those regulatory leaders come in place, the quicker the de 94 00:04:06,720 --> 00:04:08,080 Speaker 3: regulatory effort can take place. 95 00:04:08,440 --> 00:04:11,800 Speaker 2: Red headline crossing the Bloomberg terminal. Harris to deliver remarks 96 00:04:11,800 --> 00:04:15,240 Speaker 2: at Howard University at four pm Eastern time, so we 97 00:04:15,280 --> 00:04:21,640 Speaker 2: will have more reporting on that. Nathan is Brice president elect? 98 00:04:21,680 --> 00:04:23,560 Speaker 2: I mean, is President elect Trump is see had Lamed 99 00:04:23,640 --> 00:04:26,760 Speaker 2: Duck president? Is that a fair way to look at it? Now? 100 00:04:26,839 --> 00:04:29,320 Speaker 3: So generally, and I say this generally, in the second 101 00:04:29,400 --> 00:04:32,520 Speaker 3: term of a presidential term, if you will think President 102 00:04:32,560 --> 00:04:35,559 Speaker 3: Obama or President George W. Bush, you usually have about 103 00:04:35,760 --> 00:04:38,880 Speaker 3: eighteen months to expend your political capital. First one hundred 104 00:04:38,960 --> 00:04:41,000 Speaker 3: days of the presidency is critical. But as soon as 105 00:04:41,040 --> 00:04:43,760 Speaker 3: Congress begins to think about their midterm elections, and then 106 00:04:43,800 --> 00:04:46,160 Speaker 3: as the result when they come back, you know, why 107 00:04:46,200 --> 00:04:48,160 Speaker 3: should they stick their necks out for the president who's 108 00:04:48,160 --> 00:04:50,240 Speaker 3: going to be gone. So what do presidents tend to do. 109 00:04:50,279 --> 00:04:52,200 Speaker 3: They tend to go internationally, and they tend to travel 110 00:04:52,200 --> 00:04:54,839 Speaker 3: because the power of the presidency it's more powerful there. So, 111 00:04:55,000 --> 00:04:56,640 Speaker 3: you know, we do think President Trump is going to 112 00:04:56,640 --> 00:04:59,279 Speaker 3: be spending a lot of time abroad Ukraine, Middle East, 113 00:04:59,279 --> 00:05:01,720 Speaker 3: for example. There's a lot of stuff that he can 114 00:05:01,760 --> 00:05:03,920 Speaker 3: do there. But I wouldn't call him a lame duck 115 00:05:03,960 --> 00:05:06,200 Speaker 3: just yet, because again, the power of the presidency is 116 00:05:06,200 --> 00:05:06,920 Speaker 3: more powerful there. 117 00:05:07,160 --> 00:05:10,080 Speaker 4: Nathan, it'sok till ten thirty two am Eastern Time this 118 00:05:10,120 --> 00:05:13,440 Speaker 4: morning for China's Mystery of Foreign Affairs To congratulate President 119 00:05:13,520 --> 00:05:16,760 Speaker 4: elect Donald Trump. You know that China tariffs are coming. 120 00:05:17,400 --> 00:05:19,840 Speaker 4: You're betting man, what kind of tariff regime do you 121 00:05:19,839 --> 00:05:21,560 Speaker 4: think we're entering into. Is it going to be that 122 00:05:21,720 --> 00:05:23,839 Speaker 4: ten percent broad? Is it going to be sixty percent 123 00:05:23,880 --> 00:05:25,279 Speaker 4: on China? What are you hearing? 124 00:05:26,000 --> 00:05:28,200 Speaker 3: So this is where I think the process of tariff 125 00:05:28,320 --> 00:05:31,360 Speaker 3: is key. Now, remember, let's just say January twentieth, President 126 00:05:31,440 --> 00:05:33,520 Speaker 3: comes in. You see a red line over the terminal. 127 00:05:33,560 --> 00:05:36,080 Speaker 3: You say, President Trump signs an executive order saying tariffs 128 00:05:36,120 --> 00:05:38,880 Speaker 3: are coming. In the language of that executive order, however, 129 00:05:38,960 --> 00:05:40,880 Speaker 3: I think you'll see language that says the tariff is 130 00:05:40,880 --> 00:05:42,680 Speaker 3: not coming for two hundred and seventy days or three 131 00:05:42,760 --> 00:05:46,080 Speaker 3: hundred and sixty five days. Why, because tariffs are negotiation tools. 132 00:05:46,200 --> 00:05:48,560 Speaker 3: President Trump doesn't know what the reciprocal tariff on China 133 00:05:48,640 --> 00:05:51,200 Speaker 3: from China would be, and President Trump wants to use 134 00:05:51,240 --> 00:05:53,680 Speaker 3: this as a negotiation. So I think there's going to 135 00:05:53,720 --> 00:05:56,320 Speaker 3: be language in there allowing flexibility, allowing President Trump to 136 00:05:56,320 --> 00:05:58,960 Speaker 3: come back and say, eh, maybe not sixty percent, maybe 137 00:05:58,960 --> 00:06:00,719 Speaker 3: we'll go to ten percent because gave us a win 138 00:06:00,800 --> 00:06:03,400 Speaker 3: or something like that. So what we're saying is watch 139 00:06:03,400 --> 00:06:05,200 Speaker 3: out for that headline risk in the first or second 140 00:06:05,279 --> 00:06:07,719 Speaker 3: quarter of next year. But then you're gonna get probably 141 00:06:07,760 --> 00:06:10,560 Speaker 3: six months to actually truly understand what that tariff will 142 00:06:10,560 --> 00:06:12,239 Speaker 3: look like before it goes into fruition. 143 00:06:12,800 --> 00:06:15,120 Speaker 2: All right, Nathan, as always, thank you very much for 144 00:06:15,279 --> 00:06:17,520 Speaker 2: your analysis. Nathan Dean see your policy on US at 145 00:06:17,480 --> 00:06:21,440 Speaker 2: Bloomberg Intelligence. You find all of Nathan's research at Big 146 00:06:21,720 --> 00:06:24,800 Speaker 2: on the Terminal. He really boils down some of this 147 00:06:24,960 --> 00:06:28,719 Speaker 2: very difficult policy minutia into something that like real people 148 00:06:28,720 --> 00:06:30,880 Speaker 2: can you know that real people can understand and use. 149 00:06:32,440 --> 00:06:36,320 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 150 00:06:36,400 --> 00:06:39,920 Speaker 1: weekdays at ten am Eastern on applecard Play and Android 151 00:06:39,960 --> 00:06:42,760 Speaker 1: Auto with the Bloomberg Business App. You can also listen 152 00:06:42,839 --> 00:06:45,960 Speaker 1: live on Amazon Alexa from our flagship New York station 153 00:06:46,320 --> 00:06:50,880 Speaker 1: Just Say Alexa playing Bloomberg eleven thirty. 154 00:06:50,520 --> 00:06:53,039 Speaker 2: Live here in our Bloomberg and Actor Brokers studio, streaming 155 00:06:53,080 --> 00:06:56,159 Speaker 2: live on YouTube as well. All Right, we've got a 156 00:06:56,200 --> 00:06:59,400 Speaker 2: Republican in the White House, got a Republican Senate in 157 00:06:59,600 --> 00:07:02,840 Speaker 2: the houses yet to be determined. What does it mean 158 00:07:02,880 --> 00:07:04,720 Speaker 2: for policy? Our next guest has got some thoughts here. 159 00:07:04,839 --> 00:07:08,719 Speaker 2: Ed Mills, managing director in Washington, Policy analysts for Raymond 160 00:07:08,800 --> 00:07:13,880 Speaker 2: James ed, Okay, it's kind of a red wave. The 161 00:07:13,920 --> 00:07:17,560 Speaker 2: House is still to be determined. Now, what what policies 162 00:07:18,000 --> 00:07:21,080 Speaker 2: should we expect from a second Trump administration? 163 00:07:23,040 --> 00:07:24,840 Speaker 5: So I think one of the questions we've been answering 164 00:07:24,880 --> 00:07:28,200 Speaker 5: for folks here at Raymond James is what is different 165 00:07:28,320 --> 00:07:32,240 Speaker 5: this year from twenty sixteen? So, first and foremost, Trump 166 00:07:32,280 --> 00:07:34,520 Speaker 5: did not expect to win a twenty sixteen and didn't 167 00:07:34,560 --> 00:07:37,040 Speaker 5: have a transition Cheam, that's not true. 168 00:07:37,080 --> 00:07:37,559 Speaker 6: This time. 169 00:07:37,800 --> 00:07:41,000 Speaker 5: He's going to have a lot more personnel to start off, 170 00:07:41,360 --> 00:07:46,600 Speaker 5: a playbook that they've been developing to implement, and so 171 00:07:46,720 --> 00:07:49,880 Speaker 5: I do anticipate a lot of robust policies to start 172 00:07:49,920 --> 00:07:55,040 Speaker 5: off twenty twenty five. That's on taxes, on tariffs, on trade, 173 00:07:55,440 --> 00:07:58,640 Speaker 5: on immigration. Now, to get taxes done, you probably need 174 00:07:58,680 --> 00:08:01,400 Speaker 5: the House of Representatives. As we're speaking right now, it's 175 00:08:01,440 --> 00:08:05,320 Speaker 5: starting to inch towards that complete sweep, and Republicans are 176 00:08:05,600 --> 00:08:08,920 Speaker 5: slightly better positioned to have a majority in the House 177 00:08:09,000 --> 00:08:12,000 Speaker 5: than Democrats. But there's a big difference between having a 178 00:08:12,040 --> 00:08:14,760 Speaker 5: majority and being able to govern ed mills. 179 00:08:14,760 --> 00:08:16,440 Speaker 4: I'm looking at the smp OR up two percent on 180 00:08:16,480 --> 00:08:19,560 Speaker 4: the day, led by the financial sector, the banks four 181 00:08:19,600 --> 00:08:21,840 Speaker 4: point seven percent on the day. We are up. Talk 182 00:08:21,960 --> 00:08:24,920 Speaker 4: us about financial regulation under a Trump administration, I mean, 183 00:08:25,000 --> 00:08:26,920 Speaker 4: is bar going to step down? Who's going to replace 184 00:08:26,960 --> 00:08:28,800 Speaker 4: Powell at the FED? I mean, who's going to be 185 00:08:28,880 --> 00:08:29,760 Speaker 4: controlling the Fed? 186 00:08:29,800 --> 00:08:30,000 Speaker 1: Here? 187 00:08:30,040 --> 00:08:32,960 Speaker 4: I mean, we know deregulation is good for the banking sector. 188 00:08:33,000 --> 00:08:33,880 Speaker 4: What are your thoughts there? 189 00:08:34,600 --> 00:08:37,840 Speaker 5: Yeah, Damian, you mentioned the two people that probably are 190 00:08:37,920 --> 00:08:41,760 Speaker 5: the only ones that stay with a Trump victory. Here, 191 00:08:42,280 --> 00:08:47,560 Speaker 5: every single federal financial regulator will lose his or her job. 192 00:08:47,960 --> 00:08:51,520 Speaker 5: This is the largest transition in US history. This has 193 00:08:51,559 --> 00:08:55,000 Speaker 5: become some court cases in the last couple of administrations 194 00:08:55,480 --> 00:08:58,520 Speaker 5: because of precedent. But we've been in what I've described 195 00:08:58,520 --> 00:09:02,360 Speaker 5: as a regulatory supersite. We've talked about higher capital standards 196 00:09:02,360 --> 00:09:05,559 Speaker 5: for big banks following the bank crisis last year and 197 00:09:05,600 --> 00:09:08,400 Speaker 5: the implementation of what's known as Basil three capital standards. 198 00:09:08,600 --> 00:09:12,720 Speaker 5: The regulators came out with new restrictive merger guidance in September. 199 00:09:13,200 --> 00:09:16,800 Speaker 5: Throw all of that out the window with the Trump victory, 200 00:09:17,000 --> 00:09:20,400 Speaker 5: and so that's what financials are reacting to. Not only 201 00:09:20,440 --> 00:09:22,960 Speaker 5: are their capital standards not going to get higher, we 202 00:09:23,040 --> 00:09:28,160 Speaker 5: could see significant regulatory relief because there is a deregulatory bent, 203 00:09:28,679 --> 00:09:31,640 Speaker 5: and we're probably likely to see a considerable amount of 204 00:09:31,640 --> 00:09:35,400 Speaker 5: consolidation in the bank space, which has been almost non existent, 205 00:09:35,520 --> 00:09:38,640 Speaker 5: lower than it was during the financial crisis. So the 206 00:09:38,679 --> 00:09:42,160 Speaker 5: financials are being viewed as a clear winner this morning. 207 00:09:42,559 --> 00:09:44,920 Speaker 4: Well, Paul and I are thinking about allocating the merger arbitrage. 208 00:09:44,920 --> 00:09:46,319 Speaker 4: I mean, talk to us a little bit about anti 209 00:09:46,320 --> 00:09:48,240 Speaker 4: trust regulation here in the US. I mean, can we 210 00:09:48,280 --> 00:09:50,400 Speaker 4: expect that to lighten up under Trump administration. 211 00:09:51,360 --> 00:09:53,679 Speaker 5: This is where it gets a little bit more interesting. 212 00:09:54,200 --> 00:09:57,800 Speaker 5: First and foremost, at the anti trust regulators. I look 213 00:09:57,840 --> 00:10:01,839 Speaker 5: at the FTC and Cheerly con Well. Her term's actually 214 00:10:01,880 --> 00:10:05,640 Speaker 5: already expired, but she gets to stay on as cheer 215 00:10:06,080 --> 00:10:09,040 Speaker 5: or as a commissioner in a democratic majority until the 216 00:10:09,120 --> 00:10:13,800 Speaker 5: president appoints in the Senate confirms her replacement. We'll be 217 00:10:13,840 --> 00:10:15,880 Speaker 5: watching to see if she steps down and goes on 218 00:10:15,920 --> 00:10:18,160 Speaker 5: to a different job. But in that case, it's still 219 00:10:18,160 --> 00:10:20,840 Speaker 5: only a two to two tie. So Donald Trump is 220 00:10:20,880 --> 00:10:23,840 Speaker 5: going to have to nominate someone to replace her and 221 00:10:23,960 --> 00:10:28,800 Speaker 5: elevate maybe one of the existing FTC commissioners to Cheer 222 00:10:29,120 --> 00:10:31,959 Speaker 5: before we have that change. At the Department of Justice 223 00:10:32,000 --> 00:10:35,240 Speaker 5: Anti Trust Division, Jonathan Canter will be gone on January 224 00:10:35,320 --> 00:10:38,800 Speaker 5: twentieth at twelve oh one. How long does it take 225 00:10:38,840 --> 00:10:41,760 Speaker 5: for Trump to make that change. That's something that we'll 226 00:10:41,800 --> 00:10:44,440 Speaker 5: be watching. Who is his attorney general, That's something that 227 00:10:44,480 --> 00:10:48,000 Speaker 5: we need to watch. That said, a lot of anti 228 00:10:48,040 --> 00:10:51,600 Speaker 5: trust activities started when Donald Trump was president. The lawsuit 229 00:10:51,640 --> 00:10:54,840 Speaker 5: against Google that we've been talking about in recent weeks, 230 00:10:55,120 --> 00:10:57,800 Speaker 5: that's finally gotten to the point where we might see 231 00:10:58,080 --> 00:11:02,719 Speaker 5: some action by the court to implement remedies that was 232 00:11:02,760 --> 00:11:06,520 Speaker 5: stuttered under Donald Trump. So populism is driving anti trust. 233 00:11:06,600 --> 00:11:10,240 Speaker 5: Populism drove Donald Trump. We will see some changes, but 234 00:11:10,320 --> 00:11:12,839 Speaker 5: it's not as clear cut of a change as we 235 00:11:12,920 --> 00:11:15,040 Speaker 5: discussed with financials. 236 00:11:14,520 --> 00:11:17,280 Speaker 4: And markets have been looking to, for example, comments by 237 00:11:17,280 --> 00:11:21,040 Speaker 4: Scott Besson x Soros of increasing domestic oil supplied by 238 00:11:21,040 --> 00:11:23,320 Speaker 4: three million oil equivalent barrels per day. People are looking 239 00:11:23,400 --> 00:11:25,720 Speaker 4: at Elon Musk. I mean, is Who's going to be 240 00:11:25,720 --> 00:11:28,640 Speaker 4: in Trump's cabinet here? I mean, is Scott Bessont really 241 00:11:28,679 --> 00:11:31,360 Speaker 4: a candidate for US Treasury Secretary? Is Elon Musk going 242 00:11:31,400 --> 00:11:34,480 Speaker 4: to be running the Department of Transportation? I mean, talk 243 00:11:34,520 --> 00:11:35,839 Speaker 4: to us a little bit about what we can expect 244 00:11:35,840 --> 00:11:37,199 Speaker 4: in the weeks ahead on Trumps cabinet. 245 00:11:38,160 --> 00:11:40,920 Speaker 5: Yeah. So when I look at one of the bigger 246 00:11:40,960 --> 00:11:44,240 Speaker 5: surprises of the election results was the size of the 247 00:11:44,360 --> 00:11:48,319 Speaker 5: victory for Republicans in the Senate, and the more that 248 00:11:48,480 --> 00:11:51,680 Speaker 5: Republicans pick up those seats, it could be a fifty 249 00:11:51,679 --> 00:11:55,439 Speaker 5: five seat majority when all is said and done from Republicans. 250 00:11:55,720 --> 00:11:58,440 Speaker 5: The higher that is, the more Trump is going to 251 00:11:58,480 --> 00:12:01,559 Speaker 5: be able to get anyone that he wants. And we 252 00:12:01,600 --> 00:12:05,280 Speaker 5: wouldn't have to worry about one or two senators denying 253 00:12:05,320 --> 00:12:09,720 Speaker 5: that nomination. Scott Bessen absolutely could be Treasury Secretary. There's 254 00:12:09,840 --> 00:12:12,960 Speaker 5: others leading that role. I'm a little bit more skeptical 255 00:12:13,000 --> 00:12:18,280 Speaker 5: as it comes to Elon Musk. To be a confirmed individual, 256 00:12:18,480 --> 00:12:21,360 Speaker 5: you have to divest a lot from what you own. 257 00:12:21,640 --> 00:12:24,079 Speaker 5: I just don't see that happening. The question I get 258 00:12:24,080 --> 00:12:26,120 Speaker 5: a lot from Elon too, is is he going to 259 00:12:26,240 --> 00:12:30,200 Speaker 5: drive all of these cuts? Call me skeptical of Congress 260 00:12:30,240 --> 00:12:34,120 Speaker 5: actually passing significant budget cuts. We get asked that after 261 00:12:34,160 --> 00:12:38,079 Speaker 5: every election, and our federal budget just continues to go up. 262 00:12:38,920 --> 00:12:40,640 Speaker 2: Ed, thank you so much for joining us. I appreciate 263 00:12:40,640 --> 00:12:43,320 Speaker 2: getting your perspectives. Ed Mills. He's a managing director and 264 00:12:43,520 --> 00:12:47,240 Speaker 2: Washington policy analyst over there at Raymond James joining us 265 00:12:47,440 --> 00:12:48,680 Speaker 2: from New York via a zoom. 266 00:12:50,120 --> 00:12:54,000 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 267 00:12:54,080 --> 00:12:56,840 Speaker 1: weekdays at ten am Eastern on fo card Playing and 268 00:12:56,920 --> 00:12:59,760 Speaker 1: broun Otto with the Bloomberg Business app. Listen on demand 269 00:13:00,120 --> 00:13:04,199 Speaker 1: ever you get your podcasts, or watch us live on YouTube. 270 00:13:05,080 --> 00:13:08,360 Speaker 2: Damian Sasauer sitting in for Alex deel On paulse When 271 00:13:08,360 --> 00:13:10,880 Speaker 2: You're live, here in a Bloomberg Interactive Brokers studio streaming 272 00:13:10,920 --> 00:13:14,600 Speaker 2: live on YouTube as well. Donald Trump was elected the 273 00:13:14,600 --> 00:13:17,360 Speaker 2: forty seventh President of the United States, pulling off a 274 00:13:17,400 --> 00:13:20,120 Speaker 2: political comeback in one of the most polarized contests for 275 00:13:20,160 --> 00:13:23,719 Speaker 2: the White House in US history. While attending his supporters, 276 00:13:24,280 --> 00:13:27,959 Speaker 2: he said, this will truly be the Golden age of America. 277 00:13:28,120 --> 00:13:31,200 Speaker 7: I will not rest until we have delivered the strong, safe, 278 00:13:31,240 --> 00:13:35,600 Speaker 7: and prosperous America that our children deserve and that you deserve. 279 00:13:35,720 --> 00:13:39,719 Speaker 7: This will truly be the golden age of America. This 280 00:13:39,800 --> 00:13:43,800 Speaker 7: is a magnificent victory for the American people that will 281 00:13:43,880 --> 00:13:47,880 Speaker 7: allow us to make America great again. 282 00:13:48,760 --> 00:13:49,080 Speaker 6: All Right? 283 00:13:49,120 --> 00:13:53,640 Speaker 2: That was President elect Donald Trump's addressing his supporters last evening. 284 00:13:53,760 --> 00:13:56,800 Speaker 2: The question I think for the Democratic Party is where 285 00:13:56,840 --> 00:13:57,280 Speaker 2: does it. 286 00:13:57,240 --> 00:13:58,040 Speaker 1: Go from here? 287 00:13:58,120 --> 00:14:01,040 Speaker 2: Let's check in with Wendy Schuler, Professor Brown University and 288 00:14:01,160 --> 00:14:04,680 Speaker 2: interim director of the Watson Institute, joining us from Providence, 289 00:14:04,720 --> 00:14:08,160 Speaker 2: Rhode Island via zoom. Wendy, we've had, you know, a 290 00:14:08,200 --> 00:14:11,960 Speaker 2: few hours here to digest the news. If you're the 291 00:14:12,000 --> 00:14:15,360 Speaker 2: Democratic Party, how deep do you really have to look 292 00:14:15,760 --> 00:14:18,600 Speaker 2: inside the party to get a sense of what needs 293 00:14:18,640 --> 00:14:19,080 Speaker 2: to be done? 294 00:14:20,240 --> 00:14:22,680 Speaker 8: Well, you have to ask yourself why, you know popular 295 00:14:22,680 --> 00:14:28,120 Speaker 8: incumbent senators have been reelected before shared Brown, Tammy, Baldwin, Casey, 296 00:14:28,160 --> 00:14:32,600 Speaker 8: and Pennsylvania could not withstand the red wave, and so 297 00:14:32,640 --> 00:14:35,880 Speaker 8: you can attribute it to Trump charisma. The Trump followers. 298 00:14:35,960 --> 00:14:38,240 Speaker 8: We can do that if we want to as observers. 299 00:14:38,560 --> 00:14:42,960 Speaker 8: But you know, this ran deep, This reaction across voters, 300 00:14:43,200 --> 00:14:47,120 Speaker 8: across different kinds of voters, from different backgrounds, different ages. 301 00:14:47,400 --> 00:14:49,960 Speaker 8: This ran deep, and it was a signal that said, 302 00:14:50,000 --> 00:14:53,080 Speaker 8: we don't like the policies that you're enacting. So what 303 00:14:53,120 --> 00:14:55,080 Speaker 8: can they do. I think it's curious to go back 304 00:14:55,240 --> 00:14:57,360 Speaker 8: to or I'm sorry, not curious informative to go back 305 00:14:57,360 --> 00:15:01,360 Speaker 8: to Obama. Obama had a much strict border policy than 306 00:15:01,440 --> 00:15:04,000 Speaker 8: Joe Biden, and I think he did that because he 307 00:15:04,160 --> 00:15:06,800 Speaker 8: sensed there wasn't enough support in America for something more 308 00:15:07,000 --> 00:15:09,720 Speaker 8: liberal and more open. So you can say to yourselves, 309 00:15:09,720 --> 00:15:13,000 Speaker 8: the Democrats close the border for too late. The Democrats 310 00:15:13,040 --> 00:15:15,240 Speaker 8: didn't push hard enough to get those interest rates down. 311 00:15:15,720 --> 00:15:18,360 Speaker 8: The Democrats didn't pay attention to the price of eggs, 312 00:15:18,680 --> 00:15:21,480 Speaker 8: and that's unusual for the Democrats, who usually care a 313 00:15:21,480 --> 00:15:23,920 Speaker 8: lot about the price of eggs. So I think this 314 00:15:24,000 --> 00:15:27,520 Speaker 8: is not necessarily a reboot completely, but they have got 315 00:15:27,560 --> 00:15:30,280 Speaker 8: to meet the voter where the voter is, and last 316 00:15:30,400 --> 00:15:32,800 Speaker 8: night the voter was not with the Democratic Party. 317 00:15:33,040 --> 00:15:34,800 Speaker 4: When do you mention the border? And let's look ahead here. 318 00:15:34,800 --> 00:15:36,520 Speaker 4: Trump is about to embark on what many believed to 319 00:15:36,520 --> 00:15:41,080 Speaker 4: be the largest deportation program in US history. How does 320 00:15:41,120 --> 00:15:43,080 Speaker 4: he expect to round them all up? And where does 321 00:15:43,120 --> 00:15:44,120 Speaker 4: he intend to send them? 322 00:15:45,240 --> 00:15:48,400 Speaker 8: Well, you know, Trump always surprises us in the sense 323 00:15:48,440 --> 00:15:50,120 Speaker 8: that he'll sort of go off the ranch and then 324 00:15:50,120 --> 00:15:53,000 Speaker 8: I'll kind of moderate. You know. The idea is how 325 00:15:53,040 --> 00:15:55,120 Speaker 8: long does Trump want to be president? You know, he's 326 00:15:55,120 --> 00:15:59,320 Speaker 8: constitutionally prohibited from electing, being elected, and serving, not from running, 327 00:16:00,080 --> 00:16:01,840 Speaker 8: and so you know, does he want to last a 328 00:16:01,920 --> 00:16:04,520 Speaker 8: long time? Maybe get rid of the twenty second Amendment. 329 00:16:04,720 --> 00:16:07,000 Speaker 8: I don't know what he plans, but I think he 330 00:16:07,040 --> 00:16:10,400 Speaker 8: will scale this idea up back, especially since the border 331 00:16:10,440 --> 00:16:14,120 Speaker 8: has been shut down and you know, undocumented migration has 332 00:16:14,120 --> 00:16:16,960 Speaker 8: slowed so much. Does he really have to do this? 333 00:16:17,080 --> 00:16:20,000 Speaker 8: Does he have to disrupt the country this way? You know, 334 00:16:20,040 --> 00:16:21,880 Speaker 8: he could do some of it, but I don't think 335 00:16:21,880 --> 00:16:24,080 Speaker 8: the pressure's on him to do all of it because 336 00:16:24,120 --> 00:16:26,240 Speaker 8: Biden has already taken this step, and he'll keep that 337 00:16:26,280 --> 00:16:27,120 Speaker 8: policy in place. 338 00:16:27,400 --> 00:16:29,080 Speaker 4: When do you mention the twenty second Amendment? You're not 339 00:16:29,160 --> 00:16:30,680 Speaker 4: the first one today to talk about it, but you 340 00:16:30,720 --> 00:16:33,040 Speaker 4: know what I'm most interested in, And John Tucker mentions 341 00:16:33,080 --> 00:16:35,000 Speaker 4: it's the FED right. And Trump has made no secret 342 00:16:35,040 --> 00:16:37,760 Speaker 4: about his intention to have a greater say and monetary 343 00:16:37,800 --> 00:16:39,920 Speaker 4: policy here in the US. My question for you is 344 00:16:39,960 --> 00:16:42,640 Speaker 4: what legal mechanisms can Trump take advantage of in order 345 00:16:42,640 --> 00:16:45,080 Speaker 4: for the to give the Oval Office more control more 346 00:16:45,120 --> 00:16:46,280 Speaker 4: saying monetary policy. 347 00:16:47,280 --> 00:16:49,600 Speaker 8: Well, I mean the Federal Reserve Act. I mean literally 348 00:16:49,640 --> 00:16:51,640 Speaker 8: the Act creating Federal Reserve and all the bills that 349 00:16:51,640 --> 00:16:54,160 Speaker 8: have come you know after that and reauthorizing it. You know, 350 00:16:54,280 --> 00:16:57,480 Speaker 8: that's something that's been sort of a partnership with private 351 00:16:57,800 --> 00:17:02,160 Speaker 8: monetary institutions BANG and the federal government. And the thing 352 00:17:02,200 --> 00:17:04,920 Speaker 8: about Donald Trump is gonna need cash, right, You can't, 353 00:17:05,040 --> 00:17:07,840 Speaker 8: you know, you can't crash the government and crash the 354 00:17:07,880 --> 00:17:11,199 Speaker 8: economy by the federal government running out of cash. So 355 00:17:11,400 --> 00:17:14,679 Speaker 8: there is a symbiotic relationship between really big banks and 356 00:17:14,720 --> 00:17:17,480 Speaker 8: the Federal Reserve itself and the success of a president. 357 00:17:17,840 --> 00:17:20,720 Speaker 8: So there's going to have to be negotiations there. But 358 00:17:20,800 --> 00:17:22,679 Speaker 8: I don't think the heads of big banks. You're just 359 00:17:22,680 --> 00:17:24,480 Speaker 8: going to hand over the keys of the kingdom to 360 00:17:24,520 --> 00:17:26,080 Speaker 8: the president of the United States and amount of who 361 00:17:26,080 --> 00:17:28,439 Speaker 8: they are, and so that will be a negotiation, and 362 00:17:28,480 --> 00:17:30,560 Speaker 8: Trump fancies himself as a very good negotiator. 363 00:17:31,240 --> 00:17:33,680 Speaker 2: Wendy, does Kamala Harris have a future as a leader 364 00:17:33,680 --> 00:17:36,320 Speaker 2: of the Democratic Party. I'm thinking maybe in four years time. 365 00:17:37,560 --> 00:17:40,480 Speaker 8: I think, all things considered, she ran a good campaign 366 00:17:40,600 --> 00:17:43,160 Speaker 8: what she was given, the time frame that she had 367 00:17:43,160 --> 00:17:45,679 Speaker 8: to work within, and her balancing act of trying to 368 00:17:45,720 --> 00:17:48,600 Speaker 8: separate from the Biden record and also present some sort 369 00:17:48,640 --> 00:17:51,720 Speaker 8: of plan for the future and bringing in and solidifying 370 00:17:51,800 --> 00:17:55,240 Speaker 8: particularly younger women, even older women. I think there's still 371 00:17:55,240 --> 00:17:58,359 Speaker 8: a block and a constituency that she can tap if 372 00:17:58,400 --> 00:18:00,919 Speaker 8: she wanted to run again. I just don't see this 373 00:18:01,000 --> 00:18:03,640 Speaker 8: as a Kamala Harris failed campaign. I see it as 374 00:18:03,800 --> 00:18:07,199 Speaker 8: Trump being a former president and energizing their base and 375 00:18:07,240 --> 00:18:09,800 Speaker 8: not making the same campaign mistakes they did in twenty 376 00:18:09,840 --> 00:18:13,199 Speaker 8: twenty and the Biden record. You know those numbers from 377 00:18:13,240 --> 00:18:16,960 Speaker 8: exit polls yesterday on the wrong track, Those were extraordinarily 378 00:18:17,080 --> 00:18:19,560 Speaker 8: high numbers. And I don't know if anybody could have 379 00:18:19,760 --> 00:18:21,480 Speaker 8: won in the face of those numbers. 380 00:18:21,320 --> 00:18:23,200 Speaker 4: Wendy, I wonder if you could shift your attention here 381 00:18:23,200 --> 00:18:26,199 Speaker 4: to what's going on in Ukraine. Obviously, Zelenski was the 382 00:18:26,200 --> 00:18:29,640 Speaker 4: firebrand who rejected Trump's request for information on Hunter Biden's 383 00:18:29,640 --> 00:18:32,680 Speaker 4: dealings back during his first tenure. And look the battlefield's changing. 384 00:18:32,720 --> 00:18:35,000 Speaker 4: Just yesterday, right, Ukrainian forces had their first run in 385 00:18:35,000 --> 00:18:37,399 Speaker 4: with North Korean troops in the Kurk region. What comes 386 00:18:37,480 --> 00:18:41,679 Speaker 4: next for the Ukraine, for Zelenski, for Central Europe, and 387 00:18:41,720 --> 00:18:43,399 Speaker 4: for Russia under a Trump administration. 388 00:18:44,680 --> 00:18:46,959 Speaker 8: Well, I think Trump is a fan of Putin, and 389 00:18:47,000 --> 00:18:49,400 Speaker 8: I think Trump has said before that he thinks there's 390 00:18:49,400 --> 00:18:52,439 Speaker 8: a deal that can be reached. So my guess is 391 00:18:52,440 --> 00:18:54,280 Speaker 8: Trump says, listen, we're not going to send you the 392 00:18:54,280 --> 00:18:56,960 Speaker 8: same kind of weaponry, We're not going to support you 393 00:18:56,960 --> 00:18:59,600 Speaker 8: the same way. Go to the table, cut a deal, 394 00:19:00,200 --> 00:19:02,480 Speaker 8: up crimea I mean literally, these are the things that 395 00:19:02,520 --> 00:19:04,840 Speaker 8: he'll say. And maybe we'll make sure that more of 396 00:19:04,840 --> 00:19:06,720 Speaker 8: your people don't get chilled. I mean, I think that's 397 00:19:06,720 --> 00:19:08,719 Speaker 8: what we'll do. And in the Middle East, you know, 398 00:19:08,760 --> 00:19:10,560 Speaker 8: I think people who think that he'll be a diehard 399 00:19:10,600 --> 00:19:13,280 Speaker 8: suborner of Israel, maybe, but he may go to the 400 00:19:13,320 --> 00:19:14,920 Speaker 8: saudiast and say, what kind of deal do you want 401 00:19:14,920 --> 00:19:17,080 Speaker 8: to cut to get this thing over with against Iran. 402 00:19:17,119 --> 00:19:19,760 Speaker 8: I mean, he wants to make deals and be the hero. 403 00:19:20,080 --> 00:19:22,359 Speaker 8: And that's something we've seen before and we'll see again. 404 00:19:22,600 --> 00:19:25,480 Speaker 8: So whatever whoever's dealing with him has to be able 405 00:19:25,480 --> 00:19:27,159 Speaker 8: to give him some sort of victory he can walk 406 00:19:27,160 --> 00:19:27,560 Speaker 8: away with. 407 00:19:28,080 --> 00:19:30,080 Speaker 2: Wendy, thank you so much. We appreciate that. 408 00:19:30,200 --> 00:19:30,639 Speaker 1: As always. 409 00:19:30,680 --> 00:19:33,520 Speaker 2: Wendy Schilder, Professor Brown University and Interim Director of the 410 00:19:33,560 --> 00:19:37,000 Speaker 2: Watson Institute. Joining us from Providence, Rhode Island. 411 00:19:38,480 --> 00:19:42,359 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 412 00:19:42,440 --> 00:19:45,960 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 413 00:19:46,000 --> 00:19:48,800 Speaker 1: Auto with the Bloomberg Business Act. You can also listen 414 00:19:48,920 --> 00:19:52,000 Speaker 1: live on Amazon Alexa from our flagship New York station 415 00:19:52,359 --> 00:19:55,399 Speaker 1: Just say Alexa, play Bloomberg eleven thirty. 416 00:19:56,560 --> 00:20:00,000 Speaker 2: He Bloomberg Interactive, Brooker Studio, or streaming live over YouTube 417 00:20:00,160 --> 00:20:02,040 Speaker 2: as well as to check that out Over there, the 418 00:20:02,080 --> 00:20:04,760 Speaker 2: world is reacting, trying to make sense of kind of 419 00:20:04,800 --> 00:20:07,800 Speaker 2: the political elections we held here last evening in the 420 00:20:07,880 --> 00:20:11,600 Speaker 2: United States, new president, new Senate, and still to be determined, 421 00:20:12,000 --> 00:20:15,080 Speaker 2: a House of Representatives, so we're trying to talk to 422 00:20:15,119 --> 00:20:17,320 Speaker 2: some smart people around the world about kind of the 423 00:20:17,400 --> 00:20:21,040 Speaker 2: views of what might change going forward. Our next guest Mukunda. 424 00:20:21,119 --> 00:20:24,760 Speaker 2: He's a professor, a lecturer of management practice at the 425 00:20:24,840 --> 00:20:28,679 Speaker 2: Yale School of Management. So gotam a big surprise for 426 00:20:28,880 --> 00:20:30,960 Speaker 2: a lot of people waking up this morning to find 427 00:20:31,000 --> 00:20:34,320 Speaker 2: out that Donald Trump is the president elect and that 428 00:20:34,400 --> 00:20:38,560 Speaker 2: the Republicans have retaken the Senate. Here, what was your takeaway? 429 00:20:38,600 --> 00:20:40,679 Speaker 2: What do you hear when you when you talk to people. 430 00:20:41,440 --> 00:20:44,200 Speaker 9: Hi, Paul, So, first one is if you were surprised, 431 00:20:44,240 --> 00:20:46,920 Speaker 9: that kind of means weren't paying attention, right, the polling 432 00:20:47,000 --> 00:20:50,400 Speaker 9: was very clear this could go either way that right, 433 00:20:50,440 --> 00:20:53,199 Speaker 9: You know, maybe you're surprised by the magnitude of Trump's victory, 434 00:20:53,600 --> 00:20:55,480 Speaker 9: but this was a fifty to fifty election going in. 435 00:20:55,560 --> 00:20:57,440 Speaker 9: Then fifty fifty elections have to get resolved one way 436 00:20:57,520 --> 00:21:01,159 Speaker 9: or the other. For what's going to happen next, I 437 00:21:01,200 --> 00:21:02,919 Speaker 9: think there's some things you can kind of bet on. 438 00:21:03,000 --> 00:21:05,840 Speaker 9: It looks at this point increasingly likely that Republicans are 439 00:21:05,840 --> 00:21:08,080 Speaker 9: going to take the House of Representatives too. If you 440 00:21:08,119 --> 00:21:10,679 Speaker 9: have Republicans in the House, the Senate, and the presidency, 441 00:21:11,000 --> 00:21:12,840 Speaker 9: you can expect the tax cut. It'll be a realm 442 00:21:12,840 --> 00:21:15,159 Speaker 9: almost certainly a deficit finance tax cut, because that's what 443 00:21:15,280 --> 00:21:20,359 Speaker 9: always happens. Second, I think Trump has committed himself to 444 00:21:20,440 --> 00:21:23,000 Speaker 9: tariffs in a way that I suspect he's not likely 445 00:21:23,040 --> 00:21:26,400 Speaker 9: to back off from right away. But once he does that, 446 00:21:26,440 --> 00:21:28,879 Speaker 9: you're going to see economic impacts within the United States, 447 00:21:28,880 --> 00:21:31,920 Speaker 9: going to see retaliatory tariffs. Like the way in which 448 00:21:32,040 --> 00:21:34,920 Speaker 9: that trade struggle escalates is going to shape the political 449 00:21:35,000 --> 00:21:38,240 Speaker 9: dynamic going forward in ways that we can't predict right 450 00:21:38,280 --> 00:21:39,959 Speaker 9: now because we just don't know what the reactions are 451 00:21:39,960 --> 00:21:44,000 Speaker 9: going to be. That's all domestic domestic policy. On foreign policy, 452 00:21:44,480 --> 00:21:47,119 Speaker 9: I think we can pretty quickly get some insight, and 453 00:21:47,200 --> 00:21:50,640 Speaker 9: there I would be really concerned. If I were the Ukrainians, 454 00:21:50,760 --> 00:21:54,040 Speaker 9: I would just I'm not sure Ukraine's position is tenable anymore. 455 00:21:54,240 --> 00:21:58,119 Speaker 9: They will essentially have to rely on Western Europe to 456 00:21:58,119 --> 00:22:00,520 Speaker 9: supply them for their defense. I just don't know that 457 00:22:00,520 --> 00:22:04,439 Speaker 9: that's within Western Europe's industrial capacity, and I, you know, 458 00:22:04,480 --> 00:22:06,119 Speaker 9: for my friends in Ukraine, I don't know what to 459 00:22:06,119 --> 00:22:11,240 Speaker 9: say to them right now. And Second, the basic underpinning 460 00:22:11,240 --> 00:22:14,240 Speaker 9: of international politics since the Second World War has been 461 00:22:14,320 --> 00:22:16,320 Speaker 9: in a lot of different countries. We're willing to bet 462 00:22:16,359 --> 00:22:19,000 Speaker 9: their survival on the reliability of the United States as 463 00:22:19,040 --> 00:22:22,240 Speaker 9: an ally. That is not an overstatement. South Korea has 464 00:22:22,440 --> 00:22:24,399 Speaker 9: North Korea, but that has nuclear weapons, and they do 465 00:22:24,440 --> 00:22:27,600 Speaker 9: not have nuclear weapons. Japan has China not too far away, 466 00:22:27,600 --> 00:22:30,160 Speaker 9: that has nuclear weapons. They do not have nuclear weapons. 467 00:22:30,320 --> 00:22:33,000 Speaker 9: They had said that we trust the United States so 468 00:22:33,200 --> 00:22:36,280 Speaker 9: much to protect us that we are willing to risk 469 00:22:36,320 --> 00:22:39,879 Speaker 9: our national survival all that. If you are a defense 470 00:22:39,920 --> 00:22:41,600 Speaker 9: that you know you are part of the defense statism 471 00:22:41,640 --> 00:22:43,920 Speaker 9: in South Korea Japan, I don't see how you make 472 00:22:43,960 --> 00:22:46,040 Speaker 9: that bet anymore. I don't see how you could possibly 473 00:22:46,080 --> 00:22:49,399 Speaker 9: do that given Trump's express beliefs about alliances, and in 474 00:22:49,440 --> 00:22:53,080 Speaker 9: that situation, I would suspect both significant increase in defense spending. 475 00:22:53,119 --> 00:22:56,560 Speaker 9: And you know, right now, I'm sure they're having meetings 476 00:22:56,560 --> 00:23:00,240 Speaker 9: about whether they need to acquire a nuclear and Drumman, if. 477 00:23:00,119 --> 00:23:01,399 Speaker 4: You could talk to us a little bit about the 478 00:23:01,440 --> 00:23:04,359 Speaker 4: timeline between now and when Trump is expected to announce 479 00:23:04,400 --> 00:23:06,239 Speaker 4: some of his cabinet picks, I mean any color air. 480 00:23:07,760 --> 00:23:09,840 Speaker 9: So we'll find out a lot more because the cabinet 481 00:23:09,840 --> 00:23:12,320 Speaker 9: picks will determine, you know, a huge amount of what 482 00:23:12,359 --> 00:23:17,400 Speaker 9: happens next. Democrats were obviously deeply concerned by rumors that, 483 00:23:17,880 --> 00:23:21,480 Speaker 9: you know, Steve Bannon and Michael Flynn and Stephen Miller 484 00:23:21,520 --> 00:23:23,600 Speaker 9: would have very very senior roles in the Trump administration 485 00:23:23,680 --> 00:23:26,720 Speaker 9: and shaping its policy. But it's also possible that we'll 486 00:23:26,720 --> 00:23:30,680 Speaker 9: get the second term version of Steve Mnuchen and Jem 487 00:23:30,680 --> 00:23:32,680 Speaker 9: Mattison people like that. And I know when you talk 488 00:23:32,720 --> 00:23:34,800 Speaker 9: to people, you know, very sect people in the financial sector, 489 00:23:35,000 --> 00:23:37,600 Speaker 9: their expectation is that some of their peers will go 490 00:23:37,600 --> 00:23:40,240 Speaker 9: into this administration and act in the same way that 491 00:23:40,280 --> 00:23:42,560 Speaker 9: they did in the last one. Which one of those 492 00:23:42,600 --> 00:23:45,199 Speaker 9: happens is entirely up to Trump. And my guess is 493 00:23:45,200 --> 00:23:47,800 Speaker 9: what we'll start to see is if we look at 494 00:23:47,840 --> 00:23:50,280 Speaker 9: the people around him, the way I would say is 495 00:23:50,640 --> 00:23:53,080 Speaker 9: they're all ambitious and they don't play well with others. 496 00:23:53,480 --> 00:23:55,119 Speaker 9: That would be a characteristic describe to a lot of 497 00:23:55,119 --> 00:23:58,440 Speaker 9: these people, and so I think we're likely to see 498 00:23:58,640 --> 00:24:02,359 Speaker 9: some really intensive what you might call court politics. I 499 00:24:02,440 --> 00:24:04,040 Speaker 9: was just telling a bunch of students earlier today that 500 00:24:04,040 --> 00:24:05,800 Speaker 9: if you want to understand what's going to happen next, 501 00:24:05,880 --> 00:24:08,400 Speaker 9: you need to go back and read histories. The Byzantine Empire, 502 00:24:08,680 --> 00:24:11,080 Speaker 9: because that's kind of what we're thinking about, is lots 503 00:24:11,080 --> 00:24:13,880 Speaker 9: and lots of different people struggling to capture the ear 504 00:24:13,920 --> 00:24:16,479 Speaker 9: of the king and to get his support for what 505 00:24:16,520 --> 00:24:19,080 Speaker 9: they want to do and for their own strength and power. 506 00:24:19,320 --> 00:24:21,280 Speaker 9: And given what we've seen about Trump and Trump and 507 00:24:21,320 --> 00:24:24,399 Speaker 9: how fast he goes through staff, we might see that 508 00:24:24,480 --> 00:24:26,600 Speaker 9: shifting for a moment to moment, because if you look 509 00:24:26,600 --> 00:24:29,480 Speaker 9: at sort of what Stephen Miller wants to do and 510 00:24:29,560 --> 00:24:31,959 Speaker 9: what say Elon Musk wants to do, there's not a 511 00:24:31,960 --> 00:24:33,480 Speaker 9: lot of overlap between those two. 512 00:24:34,480 --> 00:24:36,840 Speaker 2: Gotham talk to us about the idea of checks and 513 00:24:36,880 --> 00:24:42,119 Speaker 2: balances here, Trump and the White House, Republican Senate, perhaps 514 00:24:42,640 --> 00:24:47,199 Speaker 2: a Republican led a House. Is it up to the 515 00:24:47,240 --> 00:24:50,560 Speaker 2: Supreme Court to act as a final check on a presidency? 516 00:24:50,760 --> 00:24:53,040 Speaker 2: Is because there are some concerns that how the Supreme 517 00:24:53,040 --> 00:24:55,240 Speaker 2: Court has evolved over the last several years that even 518 00:24:55,280 --> 00:24:57,120 Speaker 2: that may not be an effective check. 519 00:24:58,040 --> 00:24:59,680 Speaker 9: Well, I think that's right. I mean, it'll be the 520 00:24:59,680 --> 00:25:02,840 Speaker 9: super because there's not it. There's no one else, especially 521 00:25:02,880 --> 00:25:06,680 Speaker 9: if Republicans take the House, that right, that that'll just 522 00:25:06,800 --> 00:25:09,919 Speaker 9: pit for the next two years. There will be no 523 00:25:10,040 --> 00:25:12,440 Speaker 9: center of power significant enough to stand up to the 524 00:25:12,480 --> 00:25:14,680 Speaker 9: White House. And I agree with you. The Supreme Court 525 00:25:14,720 --> 00:25:17,600 Speaker 9: has made a series of rulings that no significant, no 526 00:25:17,680 --> 00:25:21,000 Speaker 9: major legal scholar would have predicted, giving sort of the 527 00:25:21,440 --> 00:25:24,520 Speaker 9: Trump presidency and levels of authority that are unprecedented in 528 00:25:24,560 --> 00:25:27,520 Speaker 9: American history. But the other half of that, I'll say 529 00:25:27,560 --> 00:25:30,400 Speaker 9: is is two years is not that long, and American 530 00:25:30,400 --> 00:25:34,160 Speaker 9: politics is deeply reactive. Political scientists referred to it as thermostatic. Basically, 531 00:25:34,280 --> 00:25:37,399 Speaker 9: whatever the president does, the average Americans starts to oppose it, 532 00:25:37,880 --> 00:25:40,080 Speaker 9: and so we might, you know, ten years later, maybe 533 00:25:40,119 --> 00:25:42,680 Speaker 9: the support at the classic example that is Obamacare, where 534 00:25:42,720 --> 00:25:45,560 Speaker 9: when Barack Obama passed it, it cost him an enormous 535 00:25:45,600 --> 00:25:48,680 Speaker 9: landslide defeat in the next set of elections, but ten 536 00:25:48,760 --> 00:25:51,480 Speaker 9: years later it's actually quite popular. So what we could 537 00:25:51,480 --> 00:25:54,159 Speaker 9: expect is whatever Trump does, whether you agree with it 538 00:25:54,280 --> 00:25:56,760 Speaker 9: or disagree with it, everything we know about political science 539 00:25:56,760 --> 00:25:59,080 Speaker 9: says that the average American is going to disapprove because 540 00:25:59,080 --> 00:26:02,520 Speaker 9: that's just how big America free responder chain. If that 541 00:26:02,760 --> 00:26:06,280 Speaker 9: is strong enough, then you'll see the House switch sides 542 00:26:06,320 --> 00:26:09,720 Speaker 9: again in twenty twenty six, and then you'll might start 543 00:26:09,720 --> 00:26:11,320 Speaker 9: to see some real checks and balances. But for the 544 00:26:11,359 --> 00:26:14,359 Speaker 9: next for the next twenty four months, I expect them 545 00:26:14,359 --> 00:26:15,520 Speaker 9: to have essentially a free hand. 546 00:26:16,280 --> 00:26:18,480 Speaker 2: All right, Gotham, thank you so much. We appreciate that. 547 00:26:18,560 --> 00:26:23,240 Speaker 2: Gotham mccondac Professor, Lecturer of Management Practice at the Yale 548 00:26:23,280 --> 00:26:27,080 Speaker 2: School of Management up in New Haven. 549 00:26:27,359 --> 00:26:31,240 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 550 00:26:31,320 --> 00:26:34,840 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 551 00:26:34,840 --> 00:26:37,639 Speaker 1: Otto with the Bloomberg Business app. You can also listen 552 00:26:37,760 --> 00:26:40,840 Speaker 1: live on Amazon Alexa from our flagship New York station. 553 00:26:41,200 --> 00:26:44,000 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 554 00:26:45,560 --> 00:26:48,080 Speaker 2: Let's see about policy, because a lot of changes to 555 00:26:48,119 --> 00:26:50,879 Speaker 2: be expected from a global policy here in a Trump administration, 556 00:26:50,920 --> 00:26:55,439 Speaker 2: particularly one where it also has a Republican in the 557 00:26:55,560 --> 00:26:58,359 Speaker 2: Senate as well in the leadership roles. Monica guerre joins 558 00:26:58,440 --> 00:27:01,359 Speaker 2: US executive director and head US Policy from Morgan Stanley 559 00:27:01,440 --> 00:27:04,040 Speaker 2: Wealth Management. Monica, thanks so much for joining us here. Uh, 560 00:27:04,400 --> 00:27:07,879 Speaker 2: I say, huge political news over last evening and into 561 00:27:08,000 --> 00:27:11,240 Speaker 2: this morning. How do you frame that out for your 562 00:27:11,280 --> 00:27:15,920 Speaker 2: Morgan Stanley Wealth Management customers as it relates to their portfolios? 563 00:27:17,320 --> 00:27:19,359 Speaker 6: Yeah, no, that's that's a great question, you know, one 564 00:27:19,400 --> 00:27:22,800 Speaker 6: of the things that you know, we are really focusing 565 00:27:22,840 --> 00:27:26,040 Speaker 6: on is, you know, what does the president have control over, 566 00:27:26,160 --> 00:27:29,200 Speaker 6: especially since we don't have the full outcome on Congress. 567 00:27:29,240 --> 00:27:32,040 Speaker 6: So that's what we're talking about right now. And what 568 00:27:32,080 --> 00:27:35,080 Speaker 6: we see is trade tariffs and energy policy really being 569 00:27:35,119 --> 00:27:39,520 Speaker 6: the most sensitive to President along Trump's second term. So 570 00:27:39,800 --> 00:27:42,159 Speaker 6: for example, you know, you can have higher tariffs on 571 00:27:42,240 --> 00:27:44,919 Speaker 6: China and a potential universal tariff and those could you know, 572 00:27:44,960 --> 00:27:49,920 Speaker 6: potentially negatively drag on growth and boost inflation in the 573 00:27:50,000 --> 00:27:53,040 Speaker 6: short term. But you know, we're also focusing on some 574 00:27:53,119 --> 00:27:56,160 Speaker 6: of the other you know, fact winners that could come 575 00:27:56,200 --> 00:27:59,159 Speaker 6: out of you know, his executive branch. 576 00:27:59,640 --> 00:28:01,760 Speaker 4: True Baby Drill, I mean, Monica talk to us a 577 00:28:01,800 --> 00:28:03,879 Speaker 4: little bit about what we're seeing in the commodity complex here. 578 00:28:03,920 --> 00:28:05,320 Speaker 4: I mean, I see it off one and a half 579 00:28:05,320 --> 00:28:07,080 Speaker 4: percent year to date. It was just up a few 580 00:28:07,119 --> 00:28:09,680 Speaker 4: weeks ago. You would think maybe perhaps with some of 581 00:28:09,680 --> 00:28:12,040 Speaker 4: the policies that Trump is floating here on the energy sector, 582 00:28:12,040 --> 00:28:14,160 Speaker 4: are certainly you know, minerals that are hard to get 583 00:28:14,160 --> 00:28:16,640 Speaker 4: et cetera, that we would see something bounce back here. 584 00:28:16,640 --> 00:28:18,400 Speaker 4: But it seems like things are kind of rolling over. 585 00:28:18,680 --> 00:28:19,800 Speaker 4: Curious to hear your thoughts there. 586 00:28:20,840 --> 00:28:23,040 Speaker 6: Yeah, and you know, the partment of energy. That's a 587 00:28:23,040 --> 00:28:25,520 Speaker 6: great example of you know where Trump has a lot 588 00:28:25,560 --> 00:28:28,600 Speaker 6: of control to acting the laterally on the on the 589 00:28:28,680 --> 00:28:31,720 Speaker 6: drilling side, and we don't see that really impacting the 590 00:28:31,840 --> 00:28:36,200 Speaker 6: market positively because you know, more supply could put pressure 591 00:28:36,280 --> 00:28:39,400 Speaker 6: on pricing as you're thinking about from the from the 592 00:28:39,440 --> 00:28:44,120 Speaker 6: market's perspective, that set. If we're thinking about energy broadly 593 00:28:44,200 --> 00:28:48,280 Speaker 6: inclusive of a clean energy agenda, there's a real risk 594 00:28:48,360 --> 00:28:51,880 Speaker 6: there to clean energy from my policy perspective, from a 595 00:28:52,560 --> 00:28:57,640 Speaker 6: you know, rollback and potential inflation reduct Reduction Act tax credits. 596 00:28:58,120 --> 00:28:59,680 Speaker 6: But one of the things we want to highlight here 597 00:28:59,720 --> 00:29:03,000 Speaker 6: on energy is that even though you could have sort 598 00:29:03,040 --> 00:29:08,520 Speaker 6: of a deconstructive approach to tax credits, clean energy policy, 599 00:29:08,680 --> 00:29:13,240 Speaker 6: et cetera, what you're really focusing on here is rates 600 00:29:13,400 --> 00:29:16,360 Speaker 6: the rate environment. Clean energy is an industry functions like 601 00:29:16,440 --> 00:29:20,160 Speaker 6: growth stocks, and so when rates are low and markets 602 00:29:20,200 --> 00:29:22,520 Speaker 6: right now are currently pricing in four cuts through the 603 00:29:22,600 --> 00:29:27,480 Speaker 6: end of twenty twenty six, essentially energy clean energy can outperform. 604 00:29:27,840 --> 00:29:30,240 Speaker 6: And so that's that's what we're focusing on in the 605 00:29:30,320 --> 00:29:33,160 Speaker 6: energy sector, is that while from a policy perspective, you 606 00:29:33,160 --> 00:29:36,520 Speaker 6: don't see much movement on traditional You could see movement 607 00:29:36,960 --> 00:29:40,000 Speaker 6: sort of negatively placing a drag on clean energy. The 608 00:29:40,080 --> 00:29:42,680 Speaker 6: real story is the rate story on clean energy. 609 00:29:44,720 --> 00:29:46,760 Speaker 4: So I'm looking at the vix here. As my colleague 610 00:29:46,760 --> 00:29:49,240 Speaker 4: Paul Sweeney, you know, rightly points out, we're back down 611 00:29:49,280 --> 00:29:53,400 Speaker 4: to sixteen, off twenty two percent day over day, you know, 612 00:29:53,520 --> 00:29:56,440 Speaker 4: off nearly a third since you know, the fourth since Monday. 613 00:29:56,600 --> 00:29:58,520 Speaker 4: You know, talk to us a little bit about, you know, 614 00:29:58,600 --> 00:30:01,640 Speaker 4: expectations for volatility under a Trump regime. I remember during 615 00:30:01,680 --> 00:30:04,920 Speaker 4: his first term, you know, you know, it was jump risk, right, 616 00:30:04,960 --> 00:30:06,840 Speaker 4: it was, you know, one day he says something, you know, 617 00:30:06,880 --> 00:30:08,480 Speaker 4: his left leg is feeling one thing, and all of 618 00:30:08,520 --> 00:30:10,080 Speaker 4: a sudden he says it, and the markets kind of 619 00:30:10,120 --> 00:30:11,920 Speaker 4: react to that. You know, we've been in an environment 620 00:30:11,960 --> 00:30:13,880 Speaker 4: for the better part of the last four years, Monica, 621 00:30:14,000 --> 00:30:17,120 Speaker 4: where it's been all about rate differentials, all about monetary policies, 622 00:30:17,160 --> 00:30:19,800 Speaker 4: all about the Fed. Is there any chance that the Fed, 623 00:30:19,880 --> 00:30:22,360 Speaker 4: that you know, rate differentials, can retake control of the 624 00:30:22,360 --> 00:30:24,480 Speaker 4: market narrative here or are we just in Trump's world 625 00:30:24,520 --> 00:30:25,520 Speaker 4: and everyone's just living in it. 626 00:30:27,280 --> 00:30:29,600 Speaker 6: That's a that's a great question. I mean, I think 627 00:30:30,040 --> 00:30:33,080 Speaker 6: the drop off in the vix that we're seeing that's 628 00:30:33,120 --> 00:30:36,360 Speaker 6: just par for the course with normal election year activity. 629 00:30:36,680 --> 00:30:40,200 Speaker 6: Once you have right the president set, you have a 630 00:30:40,240 --> 00:30:42,440 Speaker 6: sense of what's happening with Congress. Granted we don't really 631 00:30:42,480 --> 00:30:46,680 Speaker 6: know what's happening with a House, volatility plummets. Yes, you're 632 00:30:46,680 --> 00:30:48,760 Speaker 6: going to see a headline response. One of the one 633 00:30:48,800 --> 00:30:51,400 Speaker 6: of the sort of murky areas around Trump is which 634 00:30:51,440 --> 00:30:53,440 Speaker 6: Trump are we going to get? Does that mean that 635 00:30:53,440 --> 00:30:56,280 Speaker 6: we get more disruption or is it really a story 636 00:30:56,360 --> 00:30:58,840 Speaker 6: all about Congress and what they do with taxes. In 637 00:30:58,840 --> 00:31:01,160 Speaker 6: that case, if it's focused on is things are likely 638 00:31:01,200 --> 00:31:04,720 Speaker 6: to remain more stable, especially as we lost the play 639 00:31:04,720 --> 00:31:08,400 Speaker 6: by play as they debate each provision under the Tax 640 00:31:08,440 --> 00:31:11,520 Speaker 6: Cuts and Jobs Act, you could get you an extension 641 00:31:11,560 --> 00:31:13,680 Speaker 6: of most of it. But what's important here is that 642 00:31:13,840 --> 00:31:16,480 Speaker 6: even if you have you know that's a shallow red 643 00:31:16,520 --> 00:31:18,960 Speaker 6: wave in the House and you have that unified government, 644 00:31:19,360 --> 00:31:22,200 Speaker 6: those thin margins mean that they're still room for the 645 00:31:22,240 --> 00:31:24,440 Speaker 6: GOP to play. So we are going to be watching 646 00:31:24,440 --> 00:31:26,640 Speaker 6: that for a while and I think that yes, Trump 647 00:31:27,160 --> 00:31:32,360 Speaker 6: is the disruptive, disruption president. Right, we're thinking about headline 648 00:31:32,400 --> 00:31:37,320 Speaker 6: reaction volatility that's short lived, but over the long run, 649 00:31:37,400 --> 00:31:39,080 Speaker 6: what we're all going to be focusing on is that 650 00:31:39,240 --> 00:31:41,280 Speaker 6: tax agend and what happens in Congress. 651 00:31:41,680 --> 00:31:43,800 Speaker 2: All right, Monica, thanks so much for joining us. Monica Aguera, 652 00:31:44,120 --> 00:31:46,920 Speaker 2: executive director a head of US policy for Morgan Stanley 653 00:31:47,040 --> 00:31:48,160 Speaker 2: Wealth Management. 654 00:31:48,440 --> 00:31:52,960 Speaker 1: This is the Bloomberg Intelligence Podcast, available on apples, Spotify, 655 00:31:53,160 --> 00:31:56,360 Speaker 1: and anywhere else you get your podcasts. Listen live each 656 00:31:56,400 --> 00:31:59,760 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 657 00:32:00,120 --> 00:32:03,480 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 658 00:32:03,520 --> 00:32:06,720 Speaker 1: can also watch us live every weekday on YouTube and 659 00:32:06,880 --> 00:32:08,520 Speaker 1: always on the Bloomberg terminal