1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul Swinge. You, 2 00:00:05,360 --> 00:00:07,640 Speaker 1: along with my co host Lisa Brahma wits each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg penl podcast on Apple 6 00:00:15,520 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:24,880 Speaker 1: at Bloomberg dot com. With us is Andy Harris, who 8 00:00:24,920 --> 00:00:27,240 Speaker 1: is a legal reporter for Bloomberg News and joining us 9 00:00:27,240 --> 00:00:30,520 Speaker 1: here in our Bloomberg Interactive Proper Studios can nowaday former 10 00:00:30,560 --> 00:00:33,360 Speaker 1: corruption and fraud prosecutor for the U. S. Attorney's Office 11 00:00:33,440 --> 00:00:35,960 Speaker 1: in the Southern District of New York and a partner 12 00:00:36,000 --> 00:00:38,480 Speaker 1: at Ventable uh Con. I want to start with you, 13 00:00:38,560 --> 00:00:42,120 Speaker 1: what was your biggest takeaway from those statements. I think 14 00:00:42,120 --> 00:00:47,600 Speaker 1: the big takeaway is Bob Mueller is a consummate professional. 15 00:00:48,080 --> 00:00:52,040 Speaker 1: He speaks through his indictments and through his report, and 16 00:00:52,080 --> 00:00:55,280 Speaker 1: that's very clear from his statement. If you noticed, he 17 00:00:55,400 --> 00:00:59,360 Speaker 1: kept quoting from the indictments from what the grand jury returned, 18 00:00:59,640 --> 00:01:03,320 Speaker 1: and he's said, basically, I speak as a prosecutor, as 19 00:01:03,320 --> 00:01:06,720 Speaker 1: a law enforcement officer, through my report and through my 20 00:01:06,880 --> 00:01:10,319 Speaker 1: charging documents, and that's all you're gonna get from me. So, Conn, 21 00:01:10,360 --> 00:01:12,680 Speaker 1: I think one of the interesting aspects, and from his commentary, 22 00:01:12,800 --> 00:01:15,600 Speaker 1: was that the UH did not believe that he could 23 00:01:15,680 --> 00:01:18,800 Speaker 1: or the office could indict a sitting president. What is 24 00:01:18,840 --> 00:01:20,640 Speaker 1: your understanding of that? Is that A is that a 25 00:01:20,680 --> 00:01:23,760 Speaker 1: constitutional issue? Is that a d J policy issue? Because 26 00:01:23,760 --> 00:01:26,039 Speaker 1: I know there's certainly some question about that. It's d 27 00:01:26,160 --> 00:01:29,440 Speaker 1: o J policy based on reading of the Constitution, and 28 00:01:29,520 --> 00:01:33,160 Speaker 1: that's been d o J policy for quite some time. UM. 29 00:01:33,400 --> 00:01:37,080 Speaker 1: What what I find interesting is you have a G. 30 00:01:37,280 --> 00:01:40,319 Speaker 1: Barr Attorney General Bar, on the one hand, being surprised 31 00:01:40,800 --> 00:01:46,119 Speaker 1: that Bob Mueller didn't reach a conclusion, a prosecutorial conclusion, UH, 32 00:01:46,440 --> 00:01:48,960 Speaker 1: implying that he could, and on the other hand, Bob 33 00:01:49,080 --> 00:01:53,000 Speaker 1: Muller Mueller hewing close to d o J policies and 34 00:01:53,160 --> 00:01:55,960 Speaker 1: playing the role of a prosecutor. Andy, come on in here, 35 00:01:56,200 --> 00:01:59,440 Speaker 1: what was your takeaway from this? Uh? These comments? Well, 36 00:02:00,200 --> 00:02:05,440 Speaker 1: onto that observation, I think that the Special Counsel's remarked 37 00:02:05,440 --> 00:02:08,120 Speaker 1: that quote, if we had confidence that the president clearly 38 00:02:08,200 --> 00:02:10,480 Speaker 1: did not commit a crime, we would have said so 39 00:02:10,880 --> 00:02:16,040 Speaker 1: is pregnant with portent. UH. It runs expressly counter that 40 00:02:16,120 --> 00:02:21,120 Speaker 1: the presidence no obstruction, no collusion narrative and infers that 41 00:02:21,200 --> 00:02:25,480 Speaker 1: he's been anything but cleared, but that the Special Council 42 00:02:25,560 --> 00:02:29,000 Speaker 1: believed that there was some other process for addressing that, 43 00:02:29,080 --> 00:02:32,799 Speaker 1: i e. Congress and potentially the unspoken eye word impeachment. 44 00:02:33,000 --> 00:02:36,760 Speaker 1: So this was as low key as it was, uh, 45 00:02:36,800 --> 00:02:40,040 Speaker 1: something of a rebuttal to the President and to his 46 00:02:40,120 --> 00:02:43,200 Speaker 1: allies who have said that he's been cleared. So con 47 00:02:43,240 --> 00:02:46,560 Speaker 1: do you believe that? Do you believe that Special Council 48 00:02:46,600 --> 00:02:48,680 Speaker 1: Mala will be called in front of Congress to testify? 49 00:02:48,720 --> 00:02:52,880 Speaker 1: And if so, you know, is he going to expand 50 00:02:52,960 --> 00:02:57,079 Speaker 1: anywhere outside of the scope of that agreement our findings? Well, Paul, 51 00:02:57,320 --> 00:02:59,799 Speaker 1: you just heard him. He basically said he's going to 52 00:03:00,040 --> 00:03:02,000 Speaker 1: you very closely to the report, and that's what he's 53 00:03:02,000 --> 00:03:05,720 Speaker 1: gonna do. So I think he's signaling to Congress, you know, 54 00:03:06,240 --> 00:03:08,160 Speaker 1: call me. But that's all you're getting. Well, But but 55 00:03:08,320 --> 00:03:11,560 Speaker 1: Andy raises a really good point, which is, yes, he 56 00:03:11,639 --> 00:03:14,720 Speaker 1: was hewing closely the report, but he curated the statements 57 00:03:14,760 --> 00:03:17,959 Speaker 1: that he made from said report, and and really that 58 00:03:18,080 --> 00:03:21,360 Speaker 1: one statement saying if he believed if the group had 59 00:03:21,400 --> 00:03:24,480 Speaker 1: believed the President had committed no crime, they would have said. 60 00:03:24,520 --> 00:03:27,560 Speaker 1: So is that the key takeaway from this report? And 61 00:03:27,600 --> 00:03:31,720 Speaker 1: does that indicate that he's sort of nudging other parts 62 00:03:31,720 --> 00:03:36,400 Speaker 1: of government to take action? Uh? I absolutely agree with you, 63 00:03:36,480 --> 00:03:40,200 Speaker 1: because he is a shrewd man. He's very wise, and 64 00:03:40,640 --> 00:03:44,200 Speaker 1: he picked very few words to say today, and that 65 00:03:44,280 --> 00:03:46,560 Speaker 1: was one of the words he said, those words about 66 00:03:46,680 --> 00:03:50,640 Speaker 1: how guess what everybody going back to that report headline, 67 00:03:51,040 --> 00:03:53,720 Speaker 1: I couldn't say, and I can't say today that the 68 00:03:53,760 --> 00:03:56,680 Speaker 1: president didn't commit a crime. So, Andy, what is the 69 00:03:56,720 --> 00:03:59,480 Speaker 1: feeling within the Beltway here? What is your sense of 70 00:03:59,560 --> 00:04:03,680 Speaker 1: what we how Democrats will maybe take this commentary, the 71 00:04:03,760 --> 00:04:06,840 Speaker 1: statement from Mr Mueller as it relates to kind of 72 00:04:06,840 --> 00:04:10,400 Speaker 1: how they view the presidency, whether you know, continued oversighter, 73 00:04:10,640 --> 00:04:14,520 Speaker 1: even the impeachment proceedings, Well, it could tie House Democrats 74 00:04:14,520 --> 00:04:18,560 Speaker 1: and not not. Obviously, Speaker Pelosi has been under substantial 75 00:04:18,560 --> 00:04:23,280 Speaker 1: pressure from some factions in the House to initiate impeachment 76 00:04:23,360 --> 00:04:28,000 Speaker 1: proceedings immediately. UH Judiciary Committee Chairman Gerald Nadler has been 77 00:04:28,000 --> 00:04:30,400 Speaker 1: trying to get a less redacted version of the report, 78 00:04:30,440 --> 00:04:35,640 Speaker 1: plus the underlying UH evidentiary materials that were gathered up 79 00:04:35,640 --> 00:04:41,200 Speaker 1: by the Special Council's office. Um, clearly, there's it's almost 80 00:04:41,200 --> 00:04:45,280 Speaker 1: a volcanic pressure, uh to do something in response to this. 81 00:04:46,120 --> 00:04:50,800 Speaker 1: But an impeachment is tantamount to a criminal proceeding brought 82 00:04:50,880 --> 00:04:54,839 Speaker 1: by Congress, as we saw during President Clinton's term. And 83 00:04:55,000 --> 00:04:58,200 Speaker 1: you can't really initiate this. You can't go off half cock. 84 00:04:58,279 --> 00:05:00,440 Speaker 1: You've got to have your gunloaded. You got to know 85 00:05:00,480 --> 00:05:04,520 Speaker 1: what the evidence is before you can start casting allegations. 86 00:05:04,520 --> 00:05:08,520 Speaker 1: This will, no doubt ramp up the pressure on Speaker Pelosi. 87 00:05:08,560 --> 00:05:10,760 Speaker 1: It may even ramp up the pressure on Attorney General 88 00:05:10,760 --> 00:05:13,080 Speaker 1: bar in the Justice Department to turn over some of 89 00:05:13,080 --> 00:05:17,560 Speaker 1: the information that the House Judiciary Committee is demanding. So, 90 00:05:17,760 --> 00:05:21,680 Speaker 1: con I'm wondering about Attorney General William Barr and his 91 00:05:21,880 --> 00:05:24,760 Speaker 1: role in this, the idea that Robert Muller was sort 92 00:05:24,800 --> 00:05:27,400 Speaker 1: of contradicting some of the things that William Barr had 93 00:05:27,440 --> 00:05:31,080 Speaker 1: said about being surprised that they didn't come to some 94 00:05:31,120 --> 00:05:34,559 Speaker 1: sort of recommendation. What do you make of Attorney General 95 00:05:34,600 --> 00:05:38,240 Speaker 1: Barr's performance up to date and what his likely response 96 00:05:38,240 --> 00:05:44,520 Speaker 1: will be? UM? So, taking your your your first question, UH, 97 00:05:44,600 --> 00:05:46,520 Speaker 1: you know, I think turning General Bar is in a 98 00:05:46,560 --> 00:05:52,000 Speaker 1: tough position. UM. I think both Bob Mueller and Attorney 99 00:05:52,000 --> 00:05:55,320 Speaker 1: General Bar are coming at this situation from a viewpoint 100 00:05:55,320 --> 00:05:59,760 Speaker 1: of how to be fair, and Bamler just said, listen 101 00:05:59,800 --> 00:06:03,200 Speaker 1: to reason, we didn't say that the president committed to 102 00:06:03,240 --> 00:06:05,880 Speaker 1: crimes because we can't charge him, and that's unfair, right 103 00:06:05,960 --> 00:06:09,280 Speaker 1: to say somebody committed a crime and then there's no court, 104 00:06:09,320 --> 00:06:11,640 Speaker 1: there's no criminal case for the president to defend himself. 105 00:06:12,160 --> 00:06:15,479 Speaker 1: I can imagine the Attorney General Barr having the flip 106 00:06:15,520 --> 00:06:19,760 Speaker 1: side of that, uh, saying, listen, you have this report 107 00:06:19,839 --> 00:06:22,159 Speaker 1: with all this stuff in it, and you didn't say 108 00:06:22,279 --> 00:06:25,520 Speaker 1: either way what your viewpoint was, and now this report 109 00:06:25,560 --> 00:06:28,240 Speaker 1: will be out there, so I'm going to have to say, listen, 110 00:06:28,360 --> 00:06:32,200 Speaker 1: there's not enough to charge obstruction because that the report 111 00:06:32,240 --> 00:06:34,480 Speaker 1: itself is unfair. So I think there are two ways 112 00:06:34,560 --> 00:06:38,080 Speaker 1: to to look at that. UM. From Attorney General Barr's perspective, 113 00:06:38,240 --> 00:06:40,640 Speaker 1: trying to be fair to the president by saying, well, 114 00:06:40,640 --> 00:06:42,640 Speaker 1: this report is out there, they're gonna want to know 115 00:06:42,720 --> 00:06:45,680 Speaker 1: what does d O J think? UM, So it's unfair 116 00:06:45,680 --> 00:06:48,000 Speaker 1: to him if I don't say something. So con what 117 00:06:48,000 --> 00:06:50,000 Speaker 1: do you think your former colleagues in the Southern District 118 00:06:50,040 --> 00:06:53,159 Speaker 1: of New York are going to do next. Um, They're 119 00:06:53,160 --> 00:06:55,880 Speaker 1: going to keep doing what they do every day, which 120 00:06:55,960 --> 00:07:00,559 Speaker 1: is investigate, investigate crimes. Um. I think Uh, Bob Muller 121 00:07:00,640 --> 00:07:02,840 Speaker 1: just made a very important point by saying, you know, 122 00:07:03,400 --> 00:07:07,440 Speaker 1: the OLC opinion allows us to investigate the president, and 123 00:07:07,480 --> 00:07:10,680 Speaker 1: this is an investigation that should have happened. So that 124 00:07:10,800 --> 00:07:15,000 Speaker 1: kind of insulates that investigation. At same time, the prosecutions 125 00:07:15,000 --> 00:07:18,200 Speaker 1: on the District of New York, they're investigating, uh, things 126 00:07:18,200 --> 00:07:21,800 Speaker 1: related to Manafort there. They just charged the uh, the 127 00:07:21,840 --> 00:07:27,120 Speaker 1: banker with bribery who's involved with manifort Um. They have 128 00:07:27,160 --> 00:07:30,120 Speaker 1: other investigations going on and those will continue, Those will 129 00:07:30,120 --> 00:07:33,800 Speaker 1: continue beyond this presidency. Uh. Andy, I'm wondering we are 130 00:07:33,840 --> 00:07:36,760 Speaker 1: expecting to hear from Attorney General bar within the next 131 00:07:36,800 --> 00:07:39,600 Speaker 1: few weeks. Isn't that so? I believe that we are. 132 00:07:39,840 --> 00:07:42,200 Speaker 1: Of course, you know, again, this is a very fraught 133 00:07:42,240 --> 00:07:45,720 Speaker 1: relationship that the Attorney General has right now, uh with 134 00:07:45,920 --> 00:07:48,160 Speaker 1: House Democrats. It will be interesting to see in what 135 00:07:48,280 --> 00:07:52,040 Speaker 1: context we do here. Uh. A committee there believer it's 136 00:07:52,040 --> 00:07:54,920 Speaker 1: a judiciary committee actually voted to hold the Attorney General 137 00:07:54,920 --> 00:08:00,240 Speaker 1: and contempt for spurning a subpoena to appear before them 138 00:08:00,280 --> 00:08:02,200 Speaker 1: that has not yet gone to the full House for 139 00:08:02,240 --> 00:08:04,040 Speaker 1: a vote, So it's kind of hanging out there in 140 00:08:04,040 --> 00:08:07,000 Speaker 1: the ether. But at some point, in some format we 141 00:08:07,000 --> 00:08:09,360 Speaker 1: will likely hear from the A G. And just we 142 00:08:09,400 --> 00:08:13,800 Speaker 1: have a sense of what Attorney General bars reputation is, 143 00:08:13,840 --> 00:08:16,760 Speaker 1: sort of how his comments have been perceived, and sort 144 00:08:16,800 --> 00:08:19,360 Speaker 1: of what you're hearing from the legal community. Boy, that's 145 00:08:19,400 --> 00:08:22,680 Speaker 1: really an eye of the beholder question. This isn't his 146 00:08:22,760 --> 00:08:25,640 Speaker 1: first go around as Attorney General. He also served on 147 00:08:25,720 --> 00:08:30,400 Speaker 1: the administration of President George Herbert Walker Bush. And we're 148 00:08:30,440 --> 00:08:32,520 Speaker 1: on the one hand, some people see him as a 149 00:08:32,640 --> 00:08:35,600 Speaker 1: dedicated and experienced law man and a good choice for 150 00:08:35,640 --> 00:08:39,400 Speaker 1: the job. On the other hand, people from across the 151 00:08:39,440 --> 00:08:43,560 Speaker 1: aisle look at him as somebody who is a partisan, 152 00:08:44,160 --> 00:08:46,520 Speaker 1: and I think it was WILLIAMS. Sapphire at one point 153 00:08:46,559 --> 00:08:52,760 Speaker 1: called him general cover up. So bars reputation is again 154 00:08:52,840 --> 00:08:55,040 Speaker 1: depending on who's looking at him and wearing out the 155 00:08:55,040 --> 00:08:58,880 Speaker 1: glass is half half or half full. Andy Harris, thank 156 00:08:58,880 --> 00:09:01,200 Speaker 1: you so much. Andy Harrison Berk Legal Report are joining 157 00:09:01,240 --> 00:09:04,520 Speaker 1: us and giving his thoughts on the Moller's statement. Joining 158 00:09:04,640 --> 00:09:07,040 Speaker 1: us right now is Tim O'Brien, executive out of her 159 00:09:07,080 --> 00:09:09,959 Speaker 1: Bloomberg opinion on staying with us as kind of nowadays. 160 00:09:10,000 --> 00:09:12,640 Speaker 1: Former corporation and fraud prosecutor for the U. S. Attorney's 161 00:09:12,640 --> 00:09:14,520 Speaker 1: Office in the Southern District of New York and a 162 00:09:14,600 --> 00:09:18,280 Speaker 1: partner at Ventable l LP. So, Tim, just love to 163 00:09:18,280 --> 00:09:22,560 Speaker 1: get your takeaway from the statement by Mr Mueller. I 164 00:09:22,600 --> 00:09:25,600 Speaker 1: don't think he was saying anything particularly new. I think 165 00:09:26,200 --> 00:09:30,000 Speaker 1: he clearly used this opportunity to talk about the fact 166 00:09:30,000 --> 00:09:31,920 Speaker 1: that his investigation was wrapped up, and then he was 167 00:09:31,960 --> 00:09:35,079 Speaker 1: moving on to emphasize what he think was was important 168 00:09:35,120 --> 00:09:38,000 Speaker 1: about his work. And to me, the two things that 169 00:09:38,080 --> 00:09:43,480 Speaker 1: popped out were obstruction of justice undermines the core mission 170 00:09:44,000 --> 00:09:47,120 Speaker 1: of the law enforcement investigation, and and I think he 171 00:09:47,200 --> 00:09:50,960 Speaker 1: chose to emphasize that perhaps because the Attorney General, William 172 00:09:50,960 --> 00:09:54,440 Speaker 1: Barr did not, especially when he first rolled out the 173 00:09:54,480 --> 00:09:58,439 Speaker 1: Mall reports findings. I think secondly, he made a very 174 00:09:59,160 --> 00:10:04,280 Speaker 1: I think, uh trenchant point about the fact that if 175 00:10:04,320 --> 00:10:09,000 Speaker 1: they could have absolved the president of not committing a crime, 176 00:10:09,080 --> 00:10:12,079 Speaker 1: they would have done so. On the other hand, they 177 00:10:12,080 --> 00:10:14,520 Speaker 1: didn't feel it was within their power to charge the 178 00:10:14,559 --> 00:10:17,360 Speaker 1: president with a crime. And I think that that really 179 00:10:17,440 --> 00:10:21,360 Speaker 1: highlights again the second half of the Malla Report, which 180 00:10:21,400 --> 00:10:25,480 Speaker 1: focused in great detail and at great length on obstruction 181 00:10:25,520 --> 00:10:27,559 Speaker 1: of justice issues. And I think that that's going to 182 00:10:27,640 --> 00:10:31,040 Speaker 1: be one of the things that lingers over analysis of 183 00:10:31,040 --> 00:10:34,120 Speaker 1: the Malla Report, analysis of what Bob Mueller chose to 184 00:10:34,200 --> 00:10:37,960 Speaker 1: do and not to do, and why the Attorney General 185 00:10:38,000 --> 00:10:40,600 Speaker 1: took the actions he did. In your view, does this 186 00:10:40,720 --> 00:10:43,640 Speaker 1: change the political calculus at all in terms of what 187 00:10:43,679 --> 00:10:47,559 Speaker 1: Congress does with the Malla Report. Uh? Well, I think 188 00:10:47,559 --> 00:10:50,200 Speaker 1: there's two things here that that make that a difficult question, Leasa. 189 00:10:50,240 --> 00:10:53,800 Speaker 1: I think the first is there's a political analysis as 190 00:10:53,840 --> 00:10:56,960 Speaker 1: to whether or not impeaching the president or going down 191 00:10:57,600 --> 00:11:02,520 Speaker 1: a more hardcore path presents political problems with the Democrats. 192 00:11:03,320 --> 00:11:06,319 Speaker 1: That's certainly what Nancy Pelosi is is weighing in all 193 00:11:06,360 --> 00:11:08,760 Speaker 1: of this. On the other hand, we are a nation 194 00:11:08,800 --> 00:11:11,640 Speaker 1: of laws and and we live in the idea that 195 00:11:11,679 --> 00:11:13,079 Speaker 1: there is a rule of law and no one is 196 00:11:13,120 --> 00:11:16,400 Speaker 1: above the law, and if laws have been broken, justice 197 00:11:16,440 --> 00:11:18,959 Speaker 1: should be meted out. And so there's a second piece 198 00:11:19,000 --> 00:11:20,920 Speaker 1: of this that should just correspond with what the laws 199 00:11:21,000 --> 00:11:23,160 Speaker 1: tell us to do. And to a certain extent, these 200 00:11:23,160 --> 00:11:27,320 Speaker 1: things are knocking heads the political calculus versus what we 201 00:11:27,320 --> 00:11:29,720 Speaker 1: should do as a national laws And I'm just wondering, 202 00:11:29,800 --> 00:11:31,839 Speaker 1: con come on in here, because a nation of laws, 203 00:11:31,840 --> 00:11:34,120 Speaker 1: it definitely does go to Congress. But there is a 204 00:11:34,240 --> 00:11:37,920 Speaker 1: question of what other courts could do and what other 205 00:11:38,000 --> 00:11:42,880 Speaker 1: prosecutorial offices could do if it is not possible to 206 00:11:42,960 --> 00:11:46,080 Speaker 1: indict a setting president through the legal system. So that 207 00:11:46,160 --> 00:11:48,880 Speaker 1: raises a question about some of the investigations at s 208 00:11:48,920 --> 00:11:53,280 Speaker 1: d n Y. Right, that's that's absolutely right. Um, you know, 209 00:11:54,040 --> 00:11:57,520 Speaker 1: beyond the investigations that the Southern District of New York 210 00:11:57,559 --> 00:12:01,800 Speaker 1: has going on, um charge cases and other kinds of cases. Um, 211 00:12:01,800 --> 00:12:04,920 Speaker 1: there's also the New York Attorney General's Office is being 212 00:12:05,080 --> 00:12:10,880 Speaker 1: very aggressive with going after Trump or the Trump organization 213 00:12:10,920 --> 00:12:14,439 Speaker 1: as well as people related to the Trump organization. So, um, 214 00:12:14,480 --> 00:12:19,319 Speaker 1: you know that if people investigate things, that's what prosecutors do. 215 00:12:19,840 --> 00:12:22,600 Speaker 1: And there is the report shows the moral report shows 216 00:12:22,640 --> 00:12:25,320 Speaker 1: there's a lot to investigate, and there's a lot to do. 217 00:12:25,480 --> 00:12:27,440 Speaker 1: There are a lot of trails to go down, and 218 00:12:28,160 --> 00:12:32,559 Speaker 1: once you open an investigation, it's very hard to close. Um, 219 00:12:33,000 --> 00:12:35,120 Speaker 1: it's easy. It's easier to open one than close one 220 00:12:35,160 --> 00:12:38,160 Speaker 1: because you have people invested and people follow trails. People 221 00:12:38,160 --> 00:12:41,320 Speaker 1: do their jobs So, Tim, what do you think the 222 00:12:41,360 --> 00:12:45,000 Speaker 1: response will be from the President to Mr Mueller's statement. 223 00:12:46,120 --> 00:12:49,160 Speaker 1: I imagine that they'll say, but again I don't know, 224 00:12:49,280 --> 00:12:51,400 Speaker 1: but that that Robert Mueller came out to say that 225 00:12:51,480 --> 00:12:53,839 Speaker 1: this investigation is over and it's time to move on. 226 00:12:53,960 --> 00:12:58,160 Speaker 1: That's what the President has said consistently. A more colloquial 227 00:12:58,280 --> 00:13:01,360 Speaker 1: version of that would be get over it, um. But 228 00:13:01,480 --> 00:13:04,480 Speaker 1: the reality again is that there are facts left that 229 00:13:04,559 --> 00:13:08,720 Speaker 1: need to be explored. I think around uh, financial conflicts 230 00:13:08,760 --> 00:13:11,920 Speaker 1: of interest, actions taken by the President and members of 231 00:13:11,920 --> 00:13:16,560 Speaker 1: his team during the election, as it pertains, substruction of 232 00:13:16,640 --> 00:13:19,840 Speaker 1: justice during the transition into the White House and thereafter 233 00:13:19,960 --> 00:13:24,040 Speaker 1: that are still unresolved. Any idea what the Republican response 234 00:13:24,040 --> 00:13:27,400 Speaker 1: will be just real quick, get over it, you know. 235 00:13:27,720 --> 00:13:30,239 Speaker 1: So they're gonna they're gonna stay behind the very consistent 236 00:13:30,280 --> 00:13:34,080 Speaker 1: and solid on their messaging around this. I really appreciate 237 00:13:34,080 --> 00:13:36,480 Speaker 1: both of you being here with us today. It really 238 00:13:36,840 --> 00:13:42,199 Speaker 1: is an interesting conclusion to a very high profile case. 239 00:13:42,559 --> 00:13:47,040 Speaker 1: Understated perhaps, but trenchant is a great word. Uh really 240 00:13:47,080 --> 00:13:52,040 Speaker 1: every word that Bob Muller speaks incredibly powerful. Tim O'Brien, 241 00:13:52,440 --> 00:13:54,960 Speaker 1: thank you so much for being here with as executive editor, 242 00:13:55,559 --> 00:13:59,120 Speaker 1: columnist all things having to do with President Trump and 243 00:13:59,480 --> 00:14:03,680 Speaker 1: everything related for Bloomberg Opinion. Also can Nowaday thank you 244 00:14:03,720 --> 00:14:05,880 Speaker 1: so much for being with us, former corruption and fraud 245 00:14:05,880 --> 00:14:07,920 Speaker 1: prosecutor for the U. S. Attorney's Office in the Southern 246 00:14:07,960 --> 00:14:11,240 Speaker 1: District of New York and a partner at Venable l LP. 247 00:14:25,640 --> 00:14:27,280 Speaker 1: But first, let's take a look at the bond market. 248 00:14:27,320 --> 00:14:31,080 Speaker 1: Bond yields continue to grind lower. The yield curve has inverted. 249 00:14:31,120 --> 00:14:33,520 Speaker 1: The question for many investors is does this mean a 250 00:14:33,600 --> 00:14:36,920 Speaker 1: recession is imminent? To answer that in other issues, we 251 00:14:36,960 --> 00:14:39,360 Speaker 1: will speak to our good friend Jim Bianco. Jim as president, 252 00:14:39,400 --> 00:14:42,720 Speaker 1: founder of Bianco Research. He's also a contributor to Bloomberg 253 00:14:42,840 --> 00:14:46,280 Speaker 1: Opinion based in Chicago. Jim, thanks so much for joining us. 254 00:14:46,360 --> 00:14:49,320 Speaker 1: So do you think the Fed will heat these warnings 255 00:14:49,320 --> 00:14:51,960 Speaker 1: of inverted yield curve and so on and cut rates 256 00:14:52,120 --> 00:14:55,840 Speaker 1: or with a risk creating a recession. That's a good question, 257 00:14:55,920 --> 00:14:59,400 Speaker 1: and um, they should heat the warnings. It's a market 258 00:14:59,480 --> 00:15:03,880 Speaker 1: signal that policy is too tight. But if you look 259 00:15:03,920 --> 00:15:08,000 Speaker 1: at their public statements over the last couple of weeks, 260 00:15:08,040 --> 00:15:10,960 Speaker 1: the vast majority of Federal Reserve officials have said that 261 00:15:11,040 --> 00:15:14,680 Speaker 1: they do not see a need to cut rates anytime soon, 262 00:15:15,160 --> 00:15:17,080 Speaker 1: and in a couple of them are even still talking 263 00:15:17,120 --> 00:15:19,240 Speaker 1: about that the next move would be a hike. So 264 00:15:19,760 --> 00:15:22,040 Speaker 1: I would like them to listen to this statement or 265 00:15:22,160 --> 00:15:26,040 Speaker 1: to this market signal that policy is too tight. That's 266 00:15:26,080 --> 00:15:29,240 Speaker 1: why the yeld curve inverts. If the yelk curb stays 267 00:15:29,280 --> 00:15:33,800 Speaker 1: inverted for a protracted period of time, it just concumulatively 268 00:15:33,920 --> 00:15:37,080 Speaker 1: weighs on the economy until you potentially get a recession. 269 00:15:37,680 --> 00:15:39,800 Speaker 1: The way you steep in the yeld curves, you cut 270 00:15:39,920 --> 00:15:42,680 Speaker 1: short term interest rates. I hope the Fed listens to 271 00:15:42,720 --> 00:15:45,800 Speaker 1: that and does that exact thing. Well, Jim, it depends 272 00:15:45,800 --> 00:15:48,080 Speaker 1: which yield curve you look at, because actually they are 273 00:15:48,080 --> 00:15:51,240 Speaker 1: different stories being told depending on where in the curve 274 00:15:51,360 --> 00:15:53,920 Speaker 1: you look. Yes, we are seeing an inversion in the 275 00:15:54,000 --> 00:15:58,240 Speaker 1: ten year three months curve, but further out not so much. 276 00:15:58,280 --> 00:16:01,400 Speaker 1: In fact, you're seeing a steepening. The extra yeld investors 277 00:16:01,400 --> 00:16:03,720 Speaker 1: are getting to own thirty year treasuries over ten year 278 00:16:03,760 --> 00:16:07,080 Speaker 1: treasuries has actually increased a little bit. So why should 279 00:16:07,080 --> 00:16:10,120 Speaker 1: we pay attention to that one? Uh, that is sort 280 00:16:10,120 --> 00:16:13,320 Speaker 1: of what people are worried about right now. You're right, 281 00:16:13,400 --> 00:16:16,280 Speaker 1: that the thirty year yield has got a massive steepening. 282 00:16:16,280 --> 00:16:19,680 Speaker 1: It's forty five basis points, almost half a percent higher 283 00:16:19,720 --> 00:16:22,600 Speaker 1: than the ten year note. But the thirty year tends 284 00:16:22,640 --> 00:16:25,280 Speaker 1: to be kind of a special trading vehicle with not 285 00:16:25,360 --> 00:16:28,960 Speaker 1: as much economic implication as say the tenure in the 286 00:16:29,000 --> 00:16:32,400 Speaker 1: three months to Most economic studies have been done on 287 00:16:32,480 --> 00:16:34,960 Speaker 1: the tenure in the three months. It's been modeled off 288 00:16:35,000 --> 00:16:37,560 Speaker 1: of the that you'll curve, and that one seems to 289 00:16:37,640 --> 00:16:41,960 Speaker 1: play the best with giving us an economic signal. The 290 00:16:42,400 --> 00:16:44,760 Speaker 1: signals you'll get from the bat from the far end 291 00:16:44,760 --> 00:16:47,400 Speaker 1: of the curve, like the thirty year tenure spread, tend 292 00:16:47,480 --> 00:16:50,360 Speaker 1: to be more technically driven about flows and about traitor 293 00:16:50,440 --> 00:16:53,280 Speaker 1: sentiment and a lot of things that do not directly 294 00:16:53,320 --> 00:16:56,280 Speaker 1: impact the economy. That's why I focus on that ten 295 00:16:56,320 --> 00:16:59,600 Speaker 1: year three months as much as I do so. Jim, 296 00:17:00,120 --> 00:17:03,960 Speaker 1: the you curve inverted earlier this year, it's it's inverted now. 297 00:17:04,000 --> 00:17:07,840 Speaker 1: But is there a certain time period where in terms 298 00:17:07,880 --> 00:17:10,600 Speaker 1: of duration, that it starts to get your attention and 299 00:17:10,640 --> 00:17:13,800 Speaker 1: you think it should get the markets attention. Yes, I've 300 00:17:13,880 --> 00:17:17,120 Speaker 1: used ten consecutive days and we're in day four right now. 301 00:17:17,280 --> 00:17:19,160 Speaker 1: Back in March, we got the five days and then 302 00:17:19,200 --> 00:17:22,119 Speaker 1: it uninverted. Now why do I use that conceptually? What 303 00:17:22,160 --> 00:17:24,639 Speaker 1: I'm trying to say here is the your curve is 304 00:17:24,680 --> 00:17:28,040 Speaker 1: inverted today, it means policy is too tight today. It 305 00:17:28,080 --> 00:17:32,560 Speaker 1: means policy was too tight yesterday. If it continues week 306 00:17:32,640 --> 00:17:35,600 Speaker 1: after week, month after month, and I'll use ten consecutive days, 307 00:17:35,600 --> 00:17:38,440 Speaker 1: because once you start getting into that room, you usually 308 00:17:38,480 --> 00:17:41,400 Speaker 1: don't uninverted. But if you stay inverted for a month 309 00:17:41,480 --> 00:17:44,520 Speaker 1: or two months or three months, the cumulative effect of 310 00:17:44,560 --> 00:17:47,439 Speaker 1: saying policy is too tight every single day starts to 311 00:17:47,560 --> 00:17:50,040 Speaker 1: weigh on the economy. Could handle a couple of weeks 312 00:17:50,040 --> 00:17:52,119 Speaker 1: of it, could maybe handle a month of it, but 313 00:17:52,280 --> 00:17:54,480 Speaker 1: beyond that you start getting in the problems. And what 314 00:17:54,520 --> 00:17:57,359 Speaker 1: I found is after ten days that usually is a 315 00:17:57,400 --> 00:18:00,240 Speaker 1: good enough signal that usually it means we're inverted, We're 316 00:18:00,240 --> 00:18:03,399 Speaker 1: going to stay there, and it will continue on until 317 00:18:03,440 --> 00:18:06,879 Speaker 1: the Fed changes policy. So what actually happened to trigger 318 00:18:06,920 --> 00:18:10,320 Speaker 1: this latest bout of yield tightening? I mean, honestly, we've 319 00:18:10,320 --> 00:18:13,080 Speaker 1: been talking about trade concerns for a while. Morgan Stanley 320 00:18:13,119 --> 00:18:15,600 Speaker 1: coming out this morning and saying that actually some of 321 00:18:15,640 --> 00:18:18,600 Speaker 1: these jitters began well before that, and for and foretell 322 00:18:18,720 --> 00:18:21,600 Speaker 1: a downturn that would have happened regardless of trade. Do 323 00:18:21,600 --> 00:18:25,399 Speaker 1: you agree, Yeah, I do agree with that, and I 324 00:18:25,440 --> 00:18:29,040 Speaker 1: think that what's changed is the perception on inflation, and 325 00:18:29,119 --> 00:18:32,040 Speaker 1: the answer is there isn't any and there's none coming. 326 00:18:32,520 --> 00:18:35,520 Speaker 1: And now we've got crudeoil prices, which is a big 327 00:18:35,560 --> 00:18:39,160 Speaker 1: input to headline inflation falling, and it also has an 328 00:18:39,200 --> 00:18:44,200 Speaker 1: additive effect on core inflation as well too. Most economists 329 00:18:44,200 --> 00:18:46,760 Speaker 1: will say, look, the Fed's not going to cut rates. 330 00:18:46,920 --> 00:18:49,280 Speaker 1: Look at the economy. The economy is fine. That's not 331 00:18:49,359 --> 00:18:51,240 Speaker 1: what the market is looking at the markets looking at 332 00:18:51,640 --> 00:18:56,440 Speaker 1: no inflation at all. Now you've got falling crude oil prices. Maybe, 333 00:18:57,080 --> 00:18:59,920 Speaker 1: as Gary Schilling wrote in a Bloomberg opinion column yesterday, 334 00:19:00,000 --> 00:19:02,960 Speaker 1: and I thought he made a credible case, trade wars 335 00:19:03,160 --> 00:19:07,560 Speaker 1: and tariffs could maybe even be deflationary for the economy too. 336 00:19:07,840 --> 00:19:12,280 Speaker 1: If that's going to depress inflation, then I think that's 337 00:19:12,280 --> 00:19:14,800 Speaker 1: what the markets focused on saying, Look, you've got very 338 00:19:14,840 --> 00:19:18,320 Speaker 1: low inflation. That's what's restrictive about interest rates, and that's 339 00:19:18,320 --> 00:19:20,639 Speaker 1: why you need to cut It's not about real GDP 340 00:19:21,440 --> 00:19:24,760 Speaker 1: at this point, So Jim, the FED has said pretty 341 00:19:24,760 --> 00:19:27,680 Speaker 1: consistently recently that it is data dependent. What data are 342 00:19:27,800 --> 00:19:29,880 Speaker 1: you looking at? What what data are you putting into 343 00:19:29,920 --> 00:19:33,120 Speaker 1: your model. I'm looking at the inflation data right now. 344 00:19:33,280 --> 00:19:35,040 Speaker 1: I think that that is the data that is going 345 00:19:35,119 --> 00:19:37,520 Speaker 1: to that is driving why the YEL curve is inverted, 346 00:19:37,840 --> 00:19:40,040 Speaker 1: why the Fed fund futures are saying that there will 347 00:19:40,080 --> 00:19:42,399 Speaker 1: be a hike, I excuse me, a cut in September. 348 00:19:42,880 --> 00:19:46,640 Speaker 1: So I'm looking at the inflation compensation from the from 349 00:19:46,640 --> 00:19:50,399 Speaker 1: the Treasury inflation protected securities market or the tips market. 350 00:19:50,840 --> 00:19:53,600 Speaker 1: I'm looking at a lot of the inflation numbers as 351 00:19:53,640 --> 00:19:56,760 Speaker 1: well to some of the surveys UH and it's and 352 00:19:56,920 --> 00:19:59,880 Speaker 1: the price of crudhile, because that is a big input 353 00:20:00,280 --> 00:20:03,640 Speaker 1: into what people's perceptions are inflation, and all of that 354 00:20:03,760 --> 00:20:07,960 Speaker 1: is going down right now, especially overseas in Europe. You're 355 00:20:08,000 --> 00:20:10,840 Speaker 1: at multi year lows and some of those market measures 356 00:20:10,840 --> 00:20:14,639 Speaker 1: of inflation expectations. UH screaming at Mario Drag that he 357 00:20:14,640 --> 00:20:17,520 Speaker 1: should be considering something as well too, in terms of 358 00:20:17,560 --> 00:20:21,159 Speaker 1: cutting rates or easing policy. So those are the inputs 359 00:20:21,200 --> 00:20:23,840 Speaker 1: I'm looking at, and all these inflation expectation and actual 360 00:20:23,880 --> 00:20:26,679 Speaker 1: inflation numbers are heading lower, and that's why this market 361 00:20:26,720 --> 00:20:29,880 Speaker 1: wants a cut we're speaking with Jim Bianco, the president 362 00:20:29,880 --> 00:20:33,600 Speaker 1: and founder of Bianco Research, talking about the story of today, 363 00:20:34,280 --> 00:20:38,760 Speaker 1: which is the drive lower in benchmark government bond yields 364 00:20:38,760 --> 00:20:42,040 Speaker 1: globally and developed markets. And I'm trying to figure out, Jim, 365 00:20:42,160 --> 00:20:46,040 Speaker 1: what exactly does this say about risk assets because up 366 00:20:46,080 --> 00:20:50,000 Speaker 1: until now, lower yields has meant support for risk gear 367 00:20:50,080 --> 00:20:53,639 Speaker 1: credits as well as equities. Is this time different with 368 00:20:53,720 --> 00:20:58,320 Speaker 1: respect to that too? Is it's getting there? You're definitely 369 00:20:58,440 --> 00:21:03,040 Speaker 1: right that normally would is seen um lower yields be 370 00:21:03,119 --> 00:21:06,240 Speaker 1: somewhat supportive. But I think that the reason you're starting 371 00:21:06,240 --> 00:21:09,919 Speaker 1: to see risk assets wobble with falling interest rates is 372 00:21:09,960 --> 00:21:13,240 Speaker 1: that there is a heightened fear of too low inflation. 373 00:21:13,880 --> 00:21:16,040 Speaker 1: Let me let me put a definition on that. Why 374 00:21:16,040 --> 00:21:18,960 Speaker 1: do we worry that inflation is too low? Because in 375 00:21:19,040 --> 00:21:22,120 Speaker 1: the next recession, and there will be one at some 376 00:21:22,200 --> 00:21:25,760 Speaker 1: point we haven't repealed the business cycle, inflation will fall. 377 00:21:26,359 --> 00:21:30,520 Speaker 1: If we start that recession with a one percent inflation rate, 378 00:21:31,080 --> 00:21:34,639 Speaker 1: the fear is it will fall to deflation, which is 379 00:21:34,880 --> 00:21:38,399 Speaker 1: very stressful on the financial services community, very stressful on 380 00:21:38,440 --> 00:21:41,320 Speaker 1: the banking system. And that's what the FED will pull 381 00:21:41,359 --> 00:21:43,320 Speaker 1: out and all central banks will pull it all stops 382 00:21:43,320 --> 00:21:45,800 Speaker 1: to prevent deflation. In one of the ways they try 383 00:21:45,840 --> 00:21:48,280 Speaker 1: to do it is let's not start at a very 384 00:21:48,359 --> 00:21:51,320 Speaker 1: low inflation rate. So I think what you're seeing in 385 00:21:51,440 --> 00:21:54,399 Speaker 1: risk gassets is as interest rates go down and as 386 00:21:54,840 --> 00:21:58,000 Speaker 1: risk gas has fall, a classic risk off sentiment that 387 00:21:58,359 --> 00:22:02,160 Speaker 1: is worrying that we might start to see too low 388 00:22:02,200 --> 00:22:03,760 Speaker 1: of inflation. I don't know if I'd go as far 389 00:22:03,800 --> 00:22:07,360 Speaker 1: as deflation, but too low and definitely not where you'd 390 00:22:07,400 --> 00:22:10,320 Speaker 1: want to start if we're going to have a downturn. So, Jim, 391 00:22:10,359 --> 00:22:12,800 Speaker 1: to what extent do you think this Federal Reserve is 392 00:22:13,000 --> 00:22:16,280 Speaker 1: influenced by the market. There's certainly been some concerns that, 393 00:22:16,880 --> 00:22:19,080 Speaker 1: you know, the move in December and the and then 394 00:22:19,080 --> 00:22:21,920 Speaker 1: the the easing in the first part of the year, 395 00:22:21,960 --> 00:22:25,520 Speaker 1: where market influence. Is that a real concern? Yeah, I 396 00:22:25,600 --> 00:22:28,560 Speaker 1: think it is a concern. And I was going to 397 00:22:28,640 --> 00:22:32,320 Speaker 1: answer the question that they seemed to be reactionary. There 398 00:22:32,440 --> 00:22:36,280 Speaker 1: was plenty of evidence going into that December rate hike 399 00:22:36,720 --> 00:22:39,520 Speaker 1: that the markets were unsettled by the idea of another 400 00:22:39,600 --> 00:22:43,280 Speaker 1: rate hike. The markets were unsettled by automatic pilot, with 401 00:22:43,480 --> 00:22:46,680 Speaker 1: the balance sheet continuing to move lower and the fed 402 00:22:46,760 --> 00:22:49,960 Speaker 1: pushed ahead with it anyway, and it kind of blew 403 00:22:50,040 --> 00:22:52,200 Speaker 1: up in their face. Remember that the Dow Jones industry 404 00:22:52,240 --> 00:22:56,040 Speaker 1: ravage saw six h points during the one hour of J. 405 00:22:56,240 --> 00:22:59,359 Speaker 1: Paul's December press conference, and then two weeks later he 406 00:22:59,400 --> 00:23:01,800 Speaker 1: did what we now, if you sphemistically, called the pulp pivot, 407 00:23:02,040 --> 00:23:04,360 Speaker 1: where he said, Okay, forget everything I said on December nineteenth. 408 00:23:04,400 --> 00:23:07,399 Speaker 1: Here's the new scenario. We're not going to be raising 409 00:23:07,520 --> 00:23:09,720 Speaker 1: rates nearly as much, and we're going to back off 410 00:23:09,760 --> 00:23:12,320 Speaker 1: on the balance sheet. So I wish they would be 411 00:23:12,359 --> 00:23:16,040 Speaker 1: a little bit more proactive in looking at what markets 412 00:23:16,040 --> 00:23:18,800 Speaker 1: are telling them instead of reactive. Just we'll do what 413 00:23:19,280 --> 00:23:22,120 Speaker 1: we'll do, what the models in the academics say, until 414 00:23:22,119 --> 00:23:24,880 Speaker 1: the markets blow up, and then we'll just completely reverse ourselves. 415 00:23:24,960 --> 00:23:27,600 Speaker 1: That's not a good way to run policy. Just quickly hear, 416 00:23:27,760 --> 00:23:29,760 Speaker 1: what what's the next recession gonna look like? Is it 417 00:23:29,760 --> 00:23:33,640 Speaker 1: going to be a repeat of Uh? If you can 418 00:23:33,680 --> 00:23:36,280 Speaker 1: tell me if there's an over leveraged sector that could 419 00:23:36,320 --> 00:23:39,320 Speaker 1: actually drag the economy down, then yeah, it could be. 420 00:23:39,359 --> 00:23:41,479 Speaker 1: But I don't see that, and I don't see that 421 00:23:41,520 --> 00:23:45,320 Speaker 1: in the leverage loan space as well too. I think 422 00:23:45,320 --> 00:23:47,760 Speaker 1: The thing that could really hurt this economy, which is 423 00:23:47,800 --> 00:23:50,040 Speaker 1: what I think the markets were signaling in the fall, 424 00:23:50,440 --> 00:23:53,880 Speaker 1: is higher interest rates. As the old thing goes um, 425 00:23:54,000 --> 00:23:56,280 Speaker 1: usually the FED raises rates until something breaks. Well, we 426 00:23:56,359 --> 00:23:58,240 Speaker 1: got the three and a quarter and the tenure in 427 00:23:58,280 --> 00:24:00,800 Speaker 1: the fall, and all of a sudden the market seemed 428 00:24:00,800 --> 00:24:02,520 Speaker 1: to get you know, they didn't break, but they got 429 00:24:02,560 --> 00:24:06,359 Speaker 1: really wobbily at that point. As long as interest rates 430 00:24:06,400 --> 00:24:09,520 Speaker 1: don't shoot higher, I think that this If we have 431 00:24:09,640 --> 00:24:12,960 Speaker 1: another recession, I'm a saying we will. But when we do, uh, 432 00:24:13,040 --> 00:24:15,200 Speaker 1: it will be more of the garden variety. If it 433 00:24:15,240 --> 00:24:18,520 Speaker 1: comes on the back of spiking inflation and driving up 434 00:24:18,520 --> 00:24:21,080 Speaker 1: interest rates with all the debt we have, that could 435 00:24:21,080 --> 00:24:23,320 Speaker 1: be problematic. But like I said, the problem now is 436 00:24:23,359 --> 00:24:26,920 Speaker 1: too low inflation, not too high inflation. Jim Bianco, thank 437 00:24:26,960 --> 00:24:29,320 Speaker 1: you so much for being with us. Jim Bianco, President 438 00:24:29,359 --> 00:24:34,400 Speaker 1: and founder of Bianco Research, also a contributor to Bloomberg Opinion. 439 00:24:47,640 --> 00:24:50,200 Speaker 1: In March of this year, and Upstart mobile phone manufacturer 440 00:24:50,280 --> 00:24:52,800 Speaker 1: entered the market with what it builds as a state 441 00:24:52,880 --> 00:24:56,000 Speaker 1: of the art mobile handsets and wireless connectivity at an 442 00:24:56,080 --> 00:24:59,399 Speaker 1: unabeatable value. And I took a look at the phone. 443 00:24:59,480 --> 00:25:01,600 Speaker 1: It is very cool to help us walk us through 444 00:25:01,640 --> 00:25:04,359 Speaker 1: this story. John Paul de Joria. John Paul is a 445 00:25:04,400 --> 00:25:07,320 Speaker 1: co foundered CEO of r Okay Group, also the CEO 446 00:25:07,359 --> 00:25:10,800 Speaker 1: and co founder Paul Mitchell and patron Spirits. I believe 447 00:25:10,920 --> 00:25:14,679 Speaker 1: Patrona sold the Bacardi in four five point one billion 448 00:25:14,720 --> 00:25:18,720 Speaker 1: dollars or something that was evaluation. Congratulations on that trade, 449 00:25:19,160 --> 00:25:21,119 Speaker 1: John Paul, thanks so much for joining us. You walked in, 450 00:25:21,240 --> 00:25:24,560 Speaker 1: you showed us this phone, and what Lisa amazed Lisa 451 00:25:24,560 --> 00:25:27,280 Speaker 1: and I was there's three D stuff and we weren't 452 00:25:27,359 --> 00:25:29,879 Speaker 1: watching we didn't have glasses on. Yeah, it's three D 453 00:25:29,920 --> 00:25:32,840 Speaker 1: without glasses, a technological breakthrough, and it's a rocket phone, 454 00:25:32,880 --> 00:25:34,800 Speaker 1: like a rocket ship going on the moon. Are okay? 455 00:25:34,840 --> 00:25:37,720 Speaker 1: I t rocket phone and it's very very advanced. The 456 00:25:37,760 --> 00:25:41,080 Speaker 1: phone has dual sims, it has it's unblocked for the world, 457 00:25:41,080 --> 00:25:43,199 Speaker 1: which is kind of cool. WiFi comes with it in 458 00:25:43,240 --> 00:25:46,840 Speaker 1: a year's worth of telemedicine, plus other little bundles we have. 459 00:25:47,119 --> 00:25:49,200 Speaker 1: I think what really blows people away is not only 460 00:25:49,240 --> 00:25:51,760 Speaker 1: is it advance and two cameras regular camera and three 461 00:25:51,800 --> 00:25:54,679 Speaker 1: D camera, but blows most people away is the price, 462 00:25:54,800 --> 00:25:57,600 Speaker 1: especially the retailers during the United States and the consumers. 463 00:25:58,000 --> 00:26:00,160 Speaker 1: We wanted to have a little bit of profit out 464 00:26:00,200 --> 00:26:02,399 Speaker 1: a lot, but get them out there. The price on 465 00:26:02,440 --> 00:26:04,359 Speaker 1: the phone is are big one is only two hundred 466 00:26:04,359 --> 00:26:07,359 Speaker 1: and nine. In our normal one, which is what most 467 00:26:07,560 --> 00:26:10,880 Speaker 1: mote phonts are, smartphones are is a hundred and that's 468 00:26:10,880 --> 00:26:13,600 Speaker 1: the retail price. And that comes with the three D 469 00:26:13,720 --> 00:26:15,399 Speaker 1: and everything. And you don't have to be attached to 470 00:26:15,400 --> 00:26:18,560 Speaker 1: any carrier. You go with any carrier you want, any 471 00:26:18,560 --> 00:26:21,600 Speaker 1: plan you want, because you remember, it's worldwide WiFi, so 472 00:26:21,640 --> 00:26:23,800 Speaker 1: you can make calls all over the world free. You know. 473 00:26:24,320 --> 00:26:26,639 Speaker 1: Paul said that he was struck by the phone. I 474 00:26:26,720 --> 00:26:29,679 Speaker 1: was struck by John Paul de Joria, your enthusiasm for 475 00:26:29,800 --> 00:26:32,280 Speaker 1: it and the sparkle and and and just sort of 476 00:26:32,280 --> 00:26:34,840 Speaker 1: her energy given the fact and to what was interesting 477 00:26:34,880 --> 00:26:37,680 Speaker 1: to me is sort of it explains how you UH 478 00:26:37,760 --> 00:26:40,720 Speaker 1: at one point where homeless and ended up co founding 479 00:26:40,720 --> 00:26:44,520 Speaker 1: Paul Mitchell's and UH and Patrone Spirits and now you've 480 00:26:44,520 --> 00:26:47,600 Speaker 1: moved into phones and and sort of the energy that 481 00:26:47,720 --> 00:26:51,920 Speaker 1: sort of drove that. I'm just wondering here. Your focus 482 00:26:51,960 --> 00:26:55,040 Speaker 1: on content is very interesting because a lot of other 483 00:26:55,840 --> 00:26:58,800 Speaker 1: big cell phone companies and tech companies have been trying 484 00:26:58,840 --> 00:27:02,399 Speaker 1: to move into the media space. How did you do 485 00:27:02,440 --> 00:27:05,080 Speaker 1: it here? Well, we ended up with this great technology 486 00:27:05,119 --> 00:27:09,359 Speaker 1: of three D that actually works on a smartphone. It 487 00:27:09,400 --> 00:27:12,320 Speaker 1: actually will work. People have tried it before. Dingman across 488 00:27:12,359 --> 00:27:15,080 Speaker 1: as good anyways, came across really great. So once we 489 00:27:15,160 --> 00:27:18,800 Speaker 1: had that and we started tying up exclusives on content, 490 00:27:18,880 --> 00:27:21,359 Speaker 1: we were anticipating this would work. So we went to 491 00:27:21,480 --> 00:27:23,080 Speaker 1: studios and think of it, if you have a three 492 00:27:23,160 --> 00:27:26,120 Speaker 1: D movie, it's in the theater or imax, but after 493 00:27:26,480 --> 00:27:28,800 Speaker 1: there it sets on the shelf because there's no other 494 00:27:28,960 --> 00:27:31,040 Speaker 1: you know, format to put it on. Well, so we 495 00:27:31,080 --> 00:27:33,040 Speaker 1: took it off the shelf, gave them some money for it, 496 00:27:33,040 --> 00:27:34,719 Speaker 1: of course, paid you know, some nice money for it, 497 00:27:34,920 --> 00:27:36,760 Speaker 1: and then got the exclusive on it for the next 498 00:27:36,800 --> 00:27:39,199 Speaker 1: three to five years with these various things. So it 499 00:27:39,200 --> 00:27:41,400 Speaker 1: all it kind of was in harmony and were so excited. 500 00:27:41,480 --> 00:27:43,920 Speaker 1: I know that it was unbelievable. Like, for example, take 501 00:27:43,960 --> 00:27:47,399 Speaker 1: Walmart who's starting to launch at June sevent in their stores, 502 00:27:47,440 --> 00:27:49,800 Speaker 1: and right behind that as Costco and many others. But 503 00:27:49,920 --> 00:27:52,920 Speaker 1: Walmart was hard to believe. They sent a team over 504 00:27:53,280 --> 00:27:55,880 Speaker 1: to Asia to check out where they're made, how perfectly 505 00:27:55,880 --> 00:27:58,000 Speaker 1: they were made. They worked exactly as we said, with 506 00:27:58,119 --> 00:28:00,720 Speaker 1: the capacity to make a lot, and they said, yeah, 507 00:28:00,720 --> 00:28:03,080 Speaker 1: this is great. So right now, the only place you 508 00:28:03,119 --> 00:28:07,000 Speaker 1: get it now would be either on Walmart's website or 509 00:28:07,080 --> 00:28:10,080 Speaker 1: go to rocket r okay i T dot com. So 510 00:28:10,160 --> 00:28:12,200 Speaker 1: talking about the pricing a little bit, that the the 511 00:28:12,200 --> 00:28:15,359 Speaker 1: the handset pricing you mentioned, how about some of the 512 00:28:15,400 --> 00:28:17,920 Speaker 1: packages of surrounding it. If I want to get these 513 00:28:17,920 --> 00:28:19,720 Speaker 1: three D movies and maybe the telemedicine and all that 514 00:28:19,760 --> 00:28:21,720 Speaker 1: kind of stuff, how are you guys packaging that? Yeah, 515 00:28:21,720 --> 00:28:24,400 Speaker 1: we have these unbelievable bundles the best ways to tell 516 00:28:24,440 --> 00:28:28,840 Speaker 1: your audience and yourself, especially small businesses that can't afford insurance, 517 00:28:28,880 --> 00:28:32,040 Speaker 1: life insurance or health insurance for their staff. Our most 518 00:28:32,080 --> 00:28:34,639 Speaker 1: expensive bundle that you can put on any smartphone, by 519 00:28:34,640 --> 00:28:37,760 Speaker 1: the way, is only fourteen dollars and ninety five cents 520 00:28:37,760 --> 00:28:39,640 Speaker 1: a month. But here's what happens to a small business. 521 00:28:39,680 --> 00:28:43,160 Speaker 1: For fourteen dollars and cents a month per family or 522 00:28:43,200 --> 00:28:45,800 Speaker 1: per phone, the whole family uses it, you have a 523 00:28:45,880 --> 00:28:49,400 Speaker 1: hundred thousand dollars worth of accidental life insurance. Twenty thousand 524 00:28:49,440 --> 00:28:52,200 Speaker 1: dollars with a burial insurance, so the beneficiary gets some money. 525 00:28:52,400 --> 00:28:55,160 Speaker 1: Tell themedicine seven days a week, twenty four hours a day. 526 00:28:55,160 --> 00:28:57,840 Speaker 1: A doctor's on the phone with you, diagnosing you and 527 00:28:57,880 --> 00:29:00,360 Speaker 1: writing you a prescription of necessary and set to get 528 00:29:00,400 --> 00:29:02,880 Speaker 1: down or saying hey, you're the tycent to go see 529 00:29:02,920 --> 00:29:05,920 Speaker 1: go see a regular doctor emergency immediately. And then roadside 530 00:29:05,960 --> 00:29:09,320 Speaker 1: assistance similar to a triple A. And then uh legal 531 00:29:09,320 --> 00:29:11,840 Speaker 1: advice a thousandars with the legal advice. And the great 532 00:29:11,880 --> 00:29:15,440 Speaker 1: thing for cities and business people is one hour a 533 00:29:15,520 --> 00:29:18,120 Speaker 1: week of a therapist on the phone with you. That's 534 00:29:18,120 --> 00:29:21,480 Speaker 1: our big bundle. That's our four and we've posted for 535 00:29:21,520 --> 00:29:24,360 Speaker 1: four dollars fine hours. You know other little bundles. But 536 00:29:24,640 --> 00:29:26,560 Speaker 1: that gives you an idea. So we want to change 537 00:29:26,600 --> 00:29:30,200 Speaker 1: the game and make affordable for everybody insurance and things 538 00:29:30,240 --> 00:29:32,440 Speaker 1: of that nature. You know, there are a lot of 539 00:29:32,480 --> 00:29:34,960 Speaker 1: aspects to this. You're sort of at the epicenter of 540 00:29:35,000 --> 00:29:37,320 Speaker 1: a lot of the revolutions that are going on right now. 541 00:29:37,360 --> 00:29:40,240 Speaker 1: One of them people talk about is the slowdown in 542 00:29:40,280 --> 00:29:43,520 Speaker 1: the smartphone market, and I'm wondering, you know, how you're 543 00:29:43,560 --> 00:29:46,120 Speaker 1: sort of fitting in there. I understand that your your 544 00:29:46,160 --> 00:29:48,720 Speaker 1: product is different but not only is there slow down 545 00:29:48,720 --> 00:29:50,680 Speaker 1: in demand, but there are also are pressures when it 546 00:29:50,680 --> 00:29:54,560 Speaker 1: comes to trade tensions and supply chains correct on these 547 00:29:54,560 --> 00:29:57,160 Speaker 1: particular phones. What makes the difference is we put an 548 00:29:57,280 --> 00:30:01,040 Speaker 1: entire famili's lifestyle, a good portion of it in the phone. 549 00:30:01,320 --> 00:30:03,600 Speaker 1: We're onto that phone. You have your insurance, you have 550 00:30:03,640 --> 00:30:06,880 Speaker 1: your roadside assistance, you have a therapist, you have emergency, 551 00:30:06,920 --> 00:30:08,760 Speaker 1: you know medical things that doctor on the phone. So 552 00:30:09,040 --> 00:30:11,640 Speaker 1: the big changes and people say, oh my god, this 553 00:30:11,640 --> 00:30:13,440 Speaker 1: this does five or ten things for me at a 554 00:30:13,520 --> 00:30:16,080 Speaker 1: very low cost. And your rocket phone is just, you know, 555 00:30:16,120 --> 00:30:18,959 Speaker 1: pretty incredible. So we're a whole different app universe. We 556 00:30:19,120 --> 00:30:21,719 Speaker 1: thought it years ago what we need to step up 557 00:30:21,800 --> 00:30:24,360 Speaker 1: so that we could compete and give the public something 558 00:30:24,400 --> 00:30:26,240 Speaker 1: they don't have right now, and we have the patent. 559 00:30:26,280 --> 00:30:29,200 Speaker 1: By the way, I'm bundling on celluator phones twenty seconds. 560 00:30:29,200 --> 00:30:32,320 Speaker 1: Do you sell anyone's data? Do you collect it? Do 561 00:30:32,360 --> 00:30:34,560 Speaker 1: you sell anyone's data that you collect? No, we don't 562 00:30:34,600 --> 00:30:37,160 Speaker 1: take collect anybody's data in order we sell them the data. 563 00:30:37,200 --> 00:30:38,920 Speaker 1: By the way, most of the parts are not made 564 00:30:38,920 --> 00:30:41,200 Speaker 1: in China. They're made another place. Especially the United States 565 00:30:41,240 --> 00:30:43,840 Speaker 1: ship there and China wants to distribute our phones because 566 00:30:43,880 --> 00:30:46,680 Speaker 1: they can't get the content. I asked that just simply 567 00:30:46,720 --> 00:30:49,280 Speaker 1: because if everybody is talking to their therapists on the phone, 568 00:30:49,320 --> 00:30:51,479 Speaker 1: you know they might be worried about No. No, no, 569 00:30:51,520 --> 00:30:55,320 Speaker 1: we don't do that. We don't collect anything. We collect now. 570 00:30:55,720 --> 00:30:58,040 Speaker 1: We're all about peace, love and happiness. It's like the 571 00:30:58,080 --> 00:31:00,840 Speaker 1: culture and all the Paul Mitchell schools. Our peace, love 572 00:31:00,840 --> 00:31:02,760 Speaker 1: and happiness is a hairstyle is how do you have peace, 573 00:31:02,800 --> 00:31:04,560 Speaker 1: love and happens in your life. One of them is 574 00:31:04,600 --> 00:31:06,440 Speaker 1: that you don't have to be afraid of anybe listening 575 00:31:06,480 --> 00:31:08,920 Speaker 1: in or or tampering with your freedom and privacy in 576 00:31:08,960 --> 00:31:11,280 Speaker 1: our great country. John Paul de Joria, thank you so 577 00:31:11,360 --> 00:31:14,240 Speaker 1: much for being here with John. Paul Degoria is co 578 00:31:14,360 --> 00:31:17,680 Speaker 1: founder and chief executive officer of the Rock Group, talking 579 00:31:17,680 --> 00:31:21,400 Speaker 1: about his rocket phone. Also the CEO and co founder 580 00:31:21,400 --> 00:31:24,560 Speaker 1: of Paul Mitchell and Patron Spirits. Thanks for listening to 581 00:31:24,560 --> 00:31:27,320 Speaker 1: the Bloomberg pl podcast. You can subscribe and listen to 582 00:31:27,360 --> 00:31:30,600 Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer. 583 00:31:31,000 --> 00:31:33,760 Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa 584 00:31:33,800 --> 00:31:36,440 Speaker 1: abram Woyds. I'm on Twitter at Lisa Abram wits one 585 00:31:36,640 --> 00:31:39,280 Speaker 1: before the podcast. You can always catch us worldwide. I'm 586 00:31:39,280 --> 00:31:40,120 Speaker 1: Bloomberg Radio.