WEBVTT - A More Hawkish Foreign Policy Ahead, Bremmer Says

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<v Speaker 1>Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane.

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<v Speaker 1>Daily we bring you insight from the best in economics, finance, investment,

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<v Speaker 1>and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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<v Speaker 1>Bloomberg dot Com, and of course on the Bloomberg Martin

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<v Speaker 1>Secker joins us head of all of our content and

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<v Speaker 1>of course, uh running all of our Washington operation for years,

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<v Speaker 1>and Nick Wadhams joins us in Washington in the blur

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<v Speaker 1>of the day, Nick, I want to drive right down

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<v Speaker 1>to task one, which is Mike Pompeo. Is he going

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<v Speaker 1>to be different than Rex Tillerson and getting us to

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<v Speaker 1>an operational, functional State Department or the will the President

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<v Speaker 1>block that effort? I mean, you know, I think he

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<v Speaker 1>his foreign policy views are generally much more in line

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<v Speaker 1>with the President Trump's, so much more hard line. I

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<v Speaker 1>think Secretary Tillerson did have a foreign policy outlook that

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<v Speaker 1>was much more conventional and sort of in line with

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<v Speaker 1>what we would have thought of the more republican, moderate

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<v Speaker 1>republican administration in the past. Uh that had led to

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<v Speaker 1>a sort of war between the Secretary Tillerson and the

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<v Speaker 1>White House where uh, there we was there was a

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<v Speaker 1>lot of sparring over nominees for posts. That was one

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<v Speaker 1>of the big reasons why, uh, these slots were not

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<v Speaker 1>getting filled. He was objecting to some of the President

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<v Speaker 1>Trump's nominees for posts. The Trump White House was objecting

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<v Speaker 1>to his positions, so usually had this sort of deadlock

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<v Speaker 1>over these nominees. Well, just thirty five days ago, or

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<v Speaker 1>excuse me, forty five days ago, Thomas Shannon left the

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<v Speaker 1>State Department is under Secretary of State for Political Affairs.

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<v Speaker 1>That's just one example of people leaving the door. When

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<v Speaker 1>does the hemorrhagen stop? Nick, Well, I don't think this

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<v Speaker 1>is something that is going to end with Mike Pompeo.

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<v Speaker 1>If anything, it will only hasten it. Um Uh. There's

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<v Speaker 1>a lot of criticism of recky Dollerson, but actually when

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<v Speaker 1>you look at his foreign policy prescriptions, they were fairly

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<v Speaker 1>standarded in line with past administrations. If anything, Mike Pompeo

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<v Speaker 1>will be even more harder to the right and and

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<v Speaker 1>will alienate this building even more. Those those these these

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<v Speaker 1>people tend to be sort of cautious and careful um

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<v Speaker 1>and orthodox and their prescriptions. So when you put in

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<v Speaker 1>someone like Mike Pompeo. They're going to have allergic reaction

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<v Speaker 1>to him. Marta Shanka, I want you to come in

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<v Speaker 1>on this and tell us your thoughts. But specifically, does

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<v Speaker 1>this have anything to do with the ongoing or non

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<v Speaker 1>ongoing relationship that the United States has with Russia. I

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<v Speaker 1>note that that Retch to Listen yesterday was quoted as

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<v Speaker 1>saying that the United States has tried to work more

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<v Speaker 1>diligently and more carefully with the Russians on a variety

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<v Speaker 1>of issues, but said that the Russians have taken it

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<v Speaker 1>upon themselves to us. He says, pivot, Uh in a

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<v Speaker 1>more hardline direction. You know, to me, that's one of

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<v Speaker 1>the more fascinating things. And Nick and chime in on

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<v Speaker 1>this is just what Mike Pompeo thinks about the Russian

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<v Speaker 1>interference in the two thousand and sixteen election. The CIA

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<v Speaker 1>has a central role in looking at that issue. Um.

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<v Speaker 1>Does his political alignment with Donald Trump preclude him from

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<v Speaker 1>being outspoken about the Russians meddling in the election? Or

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<v Speaker 1>does he speak the truth to the president? Uh? That

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<v Speaker 1>will be something that will be fascinating and it will

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<v Speaker 1>come out in his confirmation hearing. UM, I would suspect

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<v Speaker 1>he would get confirmed. But they're going to be some

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<v Speaker 1>hard questions asked at that at that hearing when it

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<v Speaker 1>had when it happens, Marty are they're hard questions to

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<v Speaker 1>be asked about the actual role of the State Department

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<v Speaker 1>no matter who is in charge, because, I mean, there

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<v Speaker 1>has been money allocated for the State Department that is

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<v Speaker 1>yet to be spent. There are a variety of ambassadorial

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<v Speaker 1>posts that have been vacant and have not received any

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<v Speaker 1>specific appointments. Is there a philosophical issue of about how

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<v Speaker 1>the president views the State Department and its use for

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<v Speaker 1>peign policy. Well, traditionally state departments have been really run

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<v Speaker 1>out of the White House. I mean it's the President

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<v Speaker 1>of the United States who sets policy and directs the

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<v Speaker 1>state head of state to actually execute it. One of

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<v Speaker 1>those things that Rex Tillerson did, which was very controversial,

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<v Speaker 1>is a strict adherence to budget restraints and a lot

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<v Speaker 1>of the lack of people in those posts was a

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<v Speaker 1>philosophical issue that we didn't need to Now the question

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<v Speaker 1>is does Mike Pompeo take the same approach and then

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<v Speaker 1>Nick Adams, for example, to your coverage of former Secretary

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<v Speaker 1>of State Tillerson in Chad the other day. How alone

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<v Speaker 1>is he out there compared to Secretary carry traveling three

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<v Speaker 1>and four and five years ago. Oh, I mean, this

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<v Speaker 1>is fascinating. We literally just ended that trip to Africa

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<v Speaker 1>about four hours ago. We got back about five am

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<v Speaker 1>from Nigeria, and on the plane with us he did

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<v Speaker 1>when he obviously knew what was going on. He didn't

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<v Speaker 1>give any indication of it to us at the time,

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<v Speaker 1>but he did have this very rare moment where he

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<v Speaker 1>spoke with us on the record in the back of

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<v Speaker 1>the plane, which he had not traditionally done, very harsh

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<v Speaker 1>words for Russia, which was in dissonance with with the administration.

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<v Speaker 1>H a lot of confidence, he said, he was very

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<v Speaker 1>confident in himself and his own abilities. Um, when we

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<v Speaker 1>asked him about the possibility of negotiations with Kim jongun,

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<v Speaker 1>and then you see this over and over, this dissonance

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<v Speaker 1>with the administration in Chad. He said, Chattians are welcome

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<v Speaker 1>in the United States. Whether it was the administration that

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<v Speaker 1>had imposed this travel panactual reporting and he's in the

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<v Speaker 1>back of the plane coming back from Nigeria. Would you

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<v Speaker 1>suggest that the secret of the former Secretary of State

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<v Speaker 1>in his interview with you and other reporters on that airplane,

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<v Speaker 1>supported the President's efforts with Mr Kim and North Korea. Yes,

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<v Speaker 1>there's there's no question that he did. But he was

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<v Speaker 1>clearly blindsided by the President's decision to accept the meeting

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<v Speaker 1>with Kim Jong hun on on spur of the moment.

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<v Speaker 1>I mean, this goes against everything Rex Tillerson believes in,

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<v Speaker 1>which is deliberation, process, doing things right, making sure you

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<v Speaker 1>have all the bases covered before you go into a meeting.

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<v Speaker 1>So he was not surprised by the president's decision to

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<v Speaker 1>meet with Kim Jong un. He was very surprised by

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<v Speaker 1>the President's decision to say, yes, let's just do this meeting,

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<v Speaker 1>uh quickly without the proper preparation. She's just joining us worldwide.

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<v Speaker 1>Pim Fox and Tom King with our foreign policy reporter,

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<v Speaker 1>State Department reporter, Nick Waddams, and Martin Schenker with us

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<v Speaker 1>of course running all of our Washington shop and now

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<v Speaker 1>head of all of content for Bloomberg News. Marty a

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<v Speaker 1>question for Mr Wadhons just off the plane. Yeah, Nick,

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<v Speaker 1>What's interesting to me is that you're convinced that Rex

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<v Speaker 1>Tillison absolutely knew what was going on? What makes you

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<v Speaker 1>think that that's so? I mean, this president sometimes keeps

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<v Speaker 1>his own counsel, even on things like this. Uh. Two reasons. One,

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<v Speaker 1>on the plane, he he cut this trip short by

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<v Speaker 1>a day, which struck us as extremely odd. You're on

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<v Speaker 1>a five nations trip to Africa. Why come home only

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<v Speaker 1>one day early? If you're gonna cut it short, you

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<v Speaker 1>know why. He he also had he was ill at

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<v Speaker 1>one point in Nairobi, so he spent the entire day off.

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<v Speaker 1>That struck us as odd. He basically had no appointments

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<v Speaker 1>on on that one day. Um. He also said that

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<v Speaker 1>he got a call on Friday morning. He had gotten

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<v Speaker 1>a call on Thursday about North Korea that kept him

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<v Speaker 1>up all night. Then he said, I got another call

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<v Speaker 1>on Friday and I asked him specifically what was that

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<v Speaker 1>call about, and he said, I can't tell you about

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<v Speaker 1>that yet. But so clearly there was a lot going on.

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<v Speaker 1>This is critical. Nick Wadhams, have you seen a change

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<v Speaker 1>behavior in the former Secretary of State over the last

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<v Speaker 1>week or so on this trip to Africa? Well, interestingly,

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<v Speaker 1>the changing behavior I think was the fact that he

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<v Speaker 1>was more willing to speak to us generally he's been

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<v Speaker 1>quite cautious and uh not very outspoken. He would rarely

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<v Speaker 1>do on the record uh interviews with us in the

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<v Speaker 1>back of the plane. This time he did, and he

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<v Speaker 1>was very forth right, particularly in his condemnation of Russia. UM.

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<v Speaker 1>And then, you know, just looking back and piecing some

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<v Speaker 1>of these things together, it is interesting that he obviously canceled,

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<v Speaker 1>he cuts the trip short, which struck us all as odd.

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<v Speaker 1>He had this day where he didn't emerge from his

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<v Speaker 1>hotel room. They said he was ill, which you know,

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<v Speaker 1>obviously in Africa is entirely possible. But when you look

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<v Speaker 1>back and sort of connect the dots like that, it

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<v Speaker 1>does seem that there was a level of sort of

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<v Speaker 1>strain and chaos about this trip. You know, there's also

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<v Speaker 1>this fascinating moment where he basically took the entire afternoon

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<v Speaker 1>off on Sunday to do a game drive with his

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<v Speaker 1>staff in that Roby National Park, UM, which you know,

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<v Speaker 1>for Secretary Kerry had done something similar when he was

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<v Speaker 1>when he was on the job. To do it for

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<v Speaker 1>so many hours on a trip like that, it's just interesting.

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<v Speaker 1>You know, another sort of data point, uh, Nick, just

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<v Speaker 1>quickly give you about thirty seconds here. Gina haspell named

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<v Speaker 1>to become the head of the Central Intelligence Agency. As

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<v Speaker 1>Mike Pompeo looks to the next Secretary of State, tell

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<v Speaker 1>us about the challenges that she faces. Well, I mean again,

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<v Speaker 1>you're gonna have this issue of the intelligence community colliding

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<v Speaker 1>against the Trump administration. Mike Pompeo has been adamant that

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<v Speaker 1>he has not shaded intelligence at all to fit what

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<v Speaker 1>President Trump wants. But there's a huge war going on

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<v Speaker 1>over the exact role that Russia played, you know, obviously

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<v Speaker 1>in the middle of the US elections, and the role

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<v Speaker 1>it continues to play. She's going to be under a

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<v Speaker 1>lot of pressure from both sides, the intelligence community and

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<v Speaker 1>the administration to get this right. Fascinating. Nik Wadhams greatly

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<v Speaker 1>appreciate your travels for Bloomberg News, and of course this

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<v Speaker 1>reporting from the plane was Secretary Tillerson over the last

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<v Speaker 1>few days. Mr Wadhams is our foreign policy reporter in Washington.

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<v Speaker 1>We think Martin Schenker as well, particularly Marty pointing out

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<v Speaker 1>the hearings that are to come with the new Secretary

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<v Speaker 1>of State. Mr Pompeio wanted to bring you now a

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<v Speaker 1>gentleman that we opened the year with with his top

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<v Speaker 1>Rists of the Year, Ian Bremer of Eurasia Group. Dr Bremer,

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<v Speaker 1>thank you for making time with us today. Frankly, this

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<v Speaker 1>instability within six Pennsylvania Avenue and the administration was one

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<v Speaker 1>of your risks this year. We're not surprised, though, are we.

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<v Speaker 1>Uh No, And let's keep in mind that you know

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<v Speaker 1>the initial firings, which you know are at an unprecedented level. Uh.

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<v Speaker 1>Senior posts worried about something like almost double that we've

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<v Speaker 1>seen any any modern day administration in the first year.

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<v Speaker 1>But most of those that were forced out early were

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<v Speaker 1>people that really were not competent to govern needed to

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<v Speaker 1>be out. We're problematic for a bunch of reasons. Most

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<v Speaker 1>recently the Gary Cone and now Rex Tillerson removals are

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<v Speaker 1>actually very different. These are people that are clearly very competent,

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<v Speaker 1>lots of experience, Uh maybe maybe not the best fits

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<v Speaker 1>for the administration for lots of reasons, and certainly king

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<v Speaker 1>with their own problems, but will make it harder to

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<v Speaker 1>do them. Ian, do you just assume that Secretary of

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<v Speaker 1>State Pompeo, if he's more aligned with President Trump, will

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<v Speaker 1>have a State Department that is ever more empty than

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<v Speaker 1>the one that Secretary of State Tillerson enjoyed. No, I

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<v Speaker 1>wouldn't assume that. I mean tell us it was truly

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<v Speaker 1>loathed by the diplomats. Uh. He kept his own counsel,

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<v Speaker 1>a very small basically kitchen cabinet within State, and people

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<v Speaker 1>he brought over from his days at X on Mobile. Uh,

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<v Speaker 1>there was enormous Uh. You know, I had to do

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<v Speaker 1>with more of his management style, and I suspect Pompeo

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<v Speaker 1>is not going to do much force might do a

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<v Speaker 1>little better on that front and on the people around

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<v Speaker 1>him immediately around him issue. The issue had much more

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<v Speaker 1>to do with the actual policies, to listen, has a

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<v Speaker 1>lot of experience dealing with difficult leaders all over the world. Um,

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<v Speaker 1>he had been a moderating force and a fairly independent

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<v Speaker 1>force on trade, on trade with China, on North Korean negotiations,

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<v Speaker 1>on the Iran deal, on Russia. Pompeo will be none

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<v Speaker 1>of those things. Will be you geological hawkus and much

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<v Speaker 1>willing to do whatever Trump wants. Here the bell there

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<v Speaker 1>markets open up a hundred and zero five Ian bremer Ian.

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<v Speaker 1>If I know Pim Fox wants to jump in here,

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<v Speaker 1>if I can play off your new book, US versus Them,

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<v Speaker 1>the failure of globalism, US versus them, the failure of

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<v Speaker 1>our foreign policy. What does Secretary of State Pompeio need

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<v Speaker 1>to fix day one? Uh, He's not gonna fix anything

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<v Speaker 1>they want. That's not why he's being brought in. I mean,

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<v Speaker 1>you know, you now have a president that is saying

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<v Speaker 1>he's going to meet with Kim Jong run um and

0:12:59.000 --> 0:13:02.480
<v Speaker 1>wants to play nice if that works, but if he doesn't,

0:13:02.559 --> 0:13:05.560
<v Speaker 1>he's prepared to become a hard line. Pompeo, I think,

0:13:05.600 --> 0:13:08.480
<v Speaker 1>doubles down on that message. You have an Iran deal,

0:13:08.760 --> 0:13:11.040
<v Speaker 1>the Trump says he wants it better or he wants

0:13:11.080 --> 0:13:14.439
<v Speaker 1>to break it. By May, Pompeo doubles down on that.

0:13:14.640 --> 0:13:17.520
<v Speaker 1>He creates a much more binary set of outcomes that

0:13:17.640 --> 0:13:19.800
<v Speaker 1>either the US gets it the way we want on

0:13:19.840 --> 0:13:22.320
<v Speaker 1>all of these issues, or you're going to see a

0:13:22.360 --> 0:13:27.360
<v Speaker 1>considerably more hawkish policy. Um. Trump might consider that fixed

0:13:27.480 --> 0:13:31.320
<v Speaker 1>in the sense that it's more of what Trump wants,

0:13:32.080 --> 0:13:34.760
<v Speaker 1>but it's much more dangerous world it's and it's more

0:13:34.840 --> 0:13:38.000
<v Speaker 1>volatile for the market. And just a little bit more

0:13:38.000 --> 0:13:42.240
<v Speaker 1>on Mike Pompeo graduated first in his class at West Point.

0:13:42.240 --> 0:13:47.480
<v Speaker 1>His law degree at Harvard and was a congressman from Kansas.

0:13:47.840 --> 0:13:52.280
<v Speaker 1>He also desires regime change in North Korea. What's his

0:13:52.360 --> 0:13:56.440
<v Speaker 1>position going to be as the President prepares for his

0:13:56.440 --> 0:14:01.680
<v Speaker 1>historic meeting with Kim Jong Long of North Korea? Well, again,

0:14:01.800 --> 0:14:04.280
<v Speaker 1>I mean, I think if you're Pumpel in this environment,

0:14:04.320 --> 0:14:06.320
<v Speaker 1>you know the reason you're being brought in is to

0:14:06.360 --> 0:14:08.520
<v Speaker 1>tell Trump that you're right about everything. So it's much

0:14:08.559 --> 0:14:13.240
<v Speaker 1>more like Lightheiser as US trade representatives. It's hearing what

0:14:13.280 --> 0:14:16.520
<v Speaker 1>Trump wants and figuring out a way to deliver that

0:14:16.600 --> 0:14:19.400
<v Speaker 1>message to others and get it back to the Boss.

0:14:19.440 --> 0:14:23.840
<v Speaker 1>So you're never gonna see him making statements on television

0:14:24.160 --> 0:14:26.320
<v Speaker 1>which you're not aligned with Trump. He'll be much more

0:14:26.360 --> 0:14:30.040
<v Speaker 1>like Minute And in that regard and on and because

0:14:30.080 --> 0:14:32.880
<v Speaker 1>we're gonna be talking a lot about North Korea going forward,

0:14:33.160 --> 0:14:35.440
<v Speaker 1>he's gonna be a hot He's gonna be one saying

0:14:35.880 --> 0:14:38.600
<v Speaker 1>um that if we don't see a path or deuterization,

0:14:39.240 --> 0:14:41.880
<v Speaker 1>the military option is on the table. You never hate

0:14:41.960 --> 0:14:45.720
<v Speaker 1>that he's gonna be one talking about maximum sanctions and

0:14:45.760 --> 0:14:50.240
<v Speaker 1>pressure until we get something from Kim Jong lend he

0:14:50.600 --> 0:14:55.440
<v Speaker 1>makes it more likely that the North Koreans offer something substantive,

0:14:55.760 --> 0:14:58.880
<v Speaker 1>but he also makes it more likely the talks breakdown

0:14:59.080 --> 0:15:02.320
<v Speaker 1>or even never happen. What has been his role at

0:15:02.360 --> 0:15:05.640
<v Speaker 1>the at the Central Intelligence Agency? Has it changed under

0:15:05.760 --> 0:15:09.960
<v Speaker 1>the direction of Mr Pompeo. Uh, you know, I think

0:15:09.960 --> 0:15:15.560
<v Speaker 1>that it's been pretty aggressive in terms of counter terrorism efforts. UH.

0:15:15.760 --> 0:15:21.720
<v Speaker 1>Certainly support for an expanded US presents internationally in places

0:15:21.800 --> 0:15:25.080
<v Speaker 1>where we're going with bad actors. UM. You've seen that

0:15:25.200 --> 0:15:28.440
<v Speaker 1>in American support for the saudiast on Yemen. Pompeo has

0:15:28.480 --> 0:15:31.200
<v Speaker 1>played a significant role there. A lot of people say

0:15:31.240 --> 0:15:34.240
<v Speaker 1>that to war the Americans shouldn't be involved in. I

0:15:34.240 --> 0:15:37.240
<v Speaker 1>think Pompeo's position is these are bad guys. They need

0:15:37.280 --> 0:15:40.200
<v Speaker 1>to take military and intelligence efforts everything we can. We

0:15:40.240 --> 0:15:43.720
<v Speaker 1>need to hit them hard. Also, Pompeo's replacement in c

0:15:43.920 --> 0:15:47.000
<v Speaker 1>i A UH was in charge of one of the

0:15:47.040 --> 0:15:51.000
<v Speaker 1>most important black side CIA operated UM, you know, with

0:15:51.400 --> 0:15:55.320
<v Speaker 1>lots of enhanced interrogation techniques. Again, what you're seeing is

0:15:55.360 --> 0:15:59.560
<v Speaker 1>a move towards a more focus, more certaive American foreign policy,

0:15:59.600 --> 0:16:02.760
<v Speaker 1>but more in the lateral as well. Well. In that context,

0:16:03.200 --> 0:16:06.880
<v Speaker 1>Mike Pompeo was in charge of the Counterintelligence Mission Center.

0:16:07.280 --> 0:16:11.320
<v Speaker 1>I believe right. This is at the CIA, and that's

0:16:11.360 --> 0:16:15.200
<v Speaker 1>the department which began the investigation into possible links between

0:16:15.640 --> 0:16:20.640
<v Speaker 1>associates of Donald Trump and Russian officials. Yeah, I mean,

0:16:20.640 --> 0:16:22.680
<v Speaker 1>I get. I think that what we're gonna see on

0:16:22.800 --> 0:16:27.120
<v Speaker 1>Russia is very interesting to watch. That Trump removed Tillerson.

0:16:27.600 --> 0:16:29.880
<v Speaker 1>By the last thing we heard from Tillison were a

0:16:29.920 --> 0:16:33.760
<v Speaker 1>couple of very strong statements that the United States fully

0:16:33.920 --> 0:16:38.720
<v Speaker 1>supported um Theresa May uh in the belief that the

0:16:38.800 --> 0:16:43.320
<v Speaker 1>Russians were behind these nerve agent attacks against British nationals,

0:16:43.560 --> 0:16:48.640
<v Speaker 1>that the Americans would support action against Russia. UM. Pillison's

0:16:48.720 --> 0:16:54.240
<v Speaker 1>also supported sanctions against Russia expanding Uh. The White House

0:16:54.280 --> 0:16:57.880
<v Speaker 1>has absolutely refused to mention the Russians explicit regists. I

0:16:57.920 --> 0:17:01.200
<v Speaker 1>think that Pompeo will know way took a hard wine

0:17:01.240 --> 0:17:05.160
<v Speaker 1>on Moscow unless we see a shift from Trump going forward. Um.

0:17:05.320 --> 0:17:07.600
<v Speaker 1>That's it's very clear we're going to see no daylight

0:17:07.680 --> 0:17:09.879
<v Speaker 1>between these two. Well, can you tell us about his

0:17:09.920 --> 0:17:15.080
<v Speaker 1>relationship with James Madis, Secretary of Defense and specifically the

0:17:15.160 --> 0:17:18.720
<v Speaker 1>military's awareness of climate change as a as a threat

0:17:18.760 --> 0:17:21.280
<v Speaker 1>to US security. That doesn't seem to be consistent with

0:17:21.359 --> 0:17:25.600
<v Speaker 1>Mr Pompeo's views, it's not. But having said that, Madis's

0:17:25.680 --> 0:17:27.840
<v Speaker 1>views have not been consistent with much of the Trump

0:17:27.960 --> 0:17:30.199
<v Speaker 1>in the race. And Madis been very good at not

0:17:30.280 --> 0:17:32.880
<v Speaker 1>getting in the limelight, not making big statements that he's

0:17:32.880 --> 0:17:36.119
<v Speaker 1>going to get criticized for UM and UH and and

0:17:36.480 --> 0:17:39.880
<v Speaker 1>I think that keeping his own counsel UH. The morale

0:17:40.040 --> 0:17:42.840
<v Speaker 1>at the Pentagon, unlike the State Department on the Tilliston,

0:17:42.880 --> 0:17:46.399
<v Speaker 1>has been very high. Maddis as one of the generals,

0:17:46.400 --> 0:17:50.000
<v Speaker 1>has held in very high refused by both both Trump

0:17:50.080 --> 0:17:52.960
<v Speaker 1>and the White House. I actually think everyone that talked

0:17:52.960 --> 0:17:55.320
<v Speaker 1>about a suicide path that the past and was gone,

0:17:55.520 --> 0:17:57.920
<v Speaker 1>that Maddis was gone to I think that was complete

0:17:57.960 --> 0:18:02.600
<v Speaker 1>b speculation that we time mad Dr Bremer. One more question,

0:18:02.640 --> 0:18:05.040
<v Speaker 1>if we could generous of your time this morning the

0:18:05.040 --> 0:18:07.720
<v Speaker 1>President Tilts and his recent comments I don't know you've seen,

0:18:07.760 --> 0:18:12.160
<v Speaker 1>I mean towards Iran. How will our relationship with Iran

0:18:12.320 --> 0:18:17.800
<v Speaker 1>change and does that provide for further Middle East instability? Well,

0:18:17.920 --> 0:18:21.520
<v Speaker 1>there's been a lot of negotiation with Killerson and with

0:18:22.400 --> 0:18:27.560
<v Speaker 1>his advisors, with the Europeans transpiring the way to UM

0:18:28.119 --> 0:18:32.480
<v Speaker 1>continue to ensure that the Iranians will not be able

0:18:32.760 --> 0:18:35.960
<v Speaker 1>to develop nuclear capacity at the end of the tenure period.

0:18:35.960 --> 0:18:39.919
<v Speaker 1>Other words, strengthen uh de termined it the deal without

0:18:39.960 --> 0:18:43.760
<v Speaker 1>breaking the deal. Um. I think that Pompeo is going

0:18:43.800 --> 0:18:46.840
<v Speaker 1>to be less interested um in that path, is going

0:18:46.880 --> 0:18:49.120
<v Speaker 1>to be more interest in trying to bring the iranience

0:18:49.160 --> 0:18:51.680
<v Speaker 1>back to the table to change or break the deal.

0:18:52.119 --> 0:18:54.639
<v Speaker 1>Like with North Korea, it's a more digital and it's

0:18:54.640 --> 0:18:57.080
<v Speaker 1>a more risky out. The new book Us versus then

0:18:57.119 --> 0:19:00.639
<v Speaker 1>the failure of globalization. Ian Bremer with us this morning.

0:19:12.880 --> 0:19:16.919
<v Speaker 1>We're honored now him to bring in George Friedman with us.

0:19:17.000 --> 0:19:20.359
<v Speaker 1>Really really, uh, I think this is a timely interview. Pim.

0:19:20.359 --> 0:19:23.800
<v Speaker 1>Why don't you bring in Mr Freedman with geopolitical futures

0:19:23.840 --> 0:19:27.160
<v Speaker 1>on defense and how it links into the State Department. Well,

0:19:27.200 --> 0:19:28.600
<v Speaker 1>just let him go ahead and tell us what he

0:19:28.640 --> 0:19:31.520
<v Speaker 1>thinks about this new appointment of Mike Pompeio as our

0:19:31.640 --> 0:19:35.240
<v Speaker 1>u S Secretary of State. George Freedman, your thoughts not

0:19:35.440 --> 0:19:38.920
<v Speaker 1>very important at all. Uh. First, this president's which is

0:19:39.000 --> 0:19:42.879
<v Speaker 1>people around. Secondly, a large number of presidents, most of

0:19:42.920 --> 0:19:46.600
<v Speaker 1>them are their own secretaries of state. Trump just made

0:19:46.640 --> 0:19:50.760
<v Speaker 1>a decision, really radical decision to go to North Korea

0:19:51.080 --> 0:19:55.639
<v Speaker 1>to meet with Kim on a major crisis. Uh. He

0:19:55.760 --> 0:19:59.800
<v Speaker 1>obviously doesn't feel that Tillerson is prepared to take you know,

0:19:59.840 --> 0:20:03.960
<v Speaker 1>the he's kind of changes. Tillersen is a very conservative player,

0:20:04.680 --> 0:20:06.960
<v Speaker 1>and he wants somebody backing him who is going to

0:20:07.000 --> 0:20:10.280
<v Speaker 1>be more in tune with him. But I mean, in

0:20:10.359 --> 0:20:14.560
<v Speaker 1>terms of foreign policy, I mean Trump is very, very radical.

0:20:14.600 --> 0:20:17.119
<v Speaker 1>I mean, any other presidents who said, look, I'm not

0:20:17.160 --> 0:20:18.719
<v Speaker 1>going to go to war with North Korea, I'm going

0:20:18.760 --> 0:20:22.440
<v Speaker 1>to talk to them, well be praised a high heaven. Uh.

0:20:22.480 --> 0:20:25.359
<v Speaker 1>In this case, of course, everything he does is going

0:20:25.400 --> 0:20:28.119
<v Speaker 1>to be condemned. But in general, he's had a very

0:20:28.160 --> 0:20:31.879
<v Speaker 1>conservative foreign policy. Tillerson has backed it, but he loves

0:20:31.920 --> 0:20:37.320
<v Speaker 1>shifting personnel around for whatever reason. So in general, the

0:20:37.320 --> 0:20:40.800
<v Speaker 1>Tillerson leaving doesn't mean a whole lot. Pompeo coming in

0:20:40.800 --> 0:20:43.320
<v Speaker 1>doesn't mean a whole lot. Trump is running the show.

0:20:44.119 --> 0:20:47.360
<v Speaker 1>If that's the case, If President Trump is running the show,

0:20:47.359 --> 0:20:51.560
<v Speaker 1>why would Mike Pompeo want this job. Well, to be

0:20:51.600 --> 0:20:55.000
<v Speaker 1>called Secretary of State means a lot. Pompeo seems to

0:20:55.040 --> 0:20:57.560
<v Speaker 1>be closer to the President this week than the other.

0:20:58.760 --> 0:21:00.560
<v Speaker 1>But there have been a lot of press who have

0:21:00.720 --> 0:21:03.560
<v Speaker 1>been whose nowhere to the Secretary of States. When Henry

0:21:03.600 --> 0:21:07.920
<v Speaker 1>Kissinger went to China to open China, William Rodgers, whose

0:21:07.920 --> 0:21:11.600
<v Speaker 1>Secretary of State, was never told that it was happening

0:21:11.160 --> 0:21:13.680
<v Speaker 1>in The reason was it didn't trust the State's Department,

0:21:14.240 --> 0:21:16.640
<v Speaker 1>not the leak. What George treatment from where you set

0:21:16.680 --> 0:21:19.800
<v Speaker 1>with your defense abilities? What is the linkage of our

0:21:19.840 --> 0:21:23.840
<v Speaker 1>State Department with our defense department? Is that overdone? Is

0:21:23.880 --> 0:21:27.600
<v Speaker 1>it overrated? Or is there a real tangible working relationship

0:21:27.640 --> 0:21:31.320
<v Speaker 1>between the two Well depend on the level. There's lots

0:21:31.320 --> 0:21:34.359
<v Speaker 1>of routine things going on that they work together on.

0:21:35.160 --> 0:21:38.200
<v Speaker 1>They have different perspectives on the world at different missions,

0:21:38.320 --> 0:21:42.879
<v Speaker 1>different jobs. But this president and other presidents had felt

0:21:43.000 --> 0:21:45.480
<v Speaker 1>that they could not trust the State Department to follow

0:21:45.520 --> 0:21:49.320
<v Speaker 1>their policies. The State Department has a reputation earned or

0:21:49.359 --> 0:21:52.000
<v Speaker 1>not that they have a view of the world and

0:21:52.080 --> 0:21:55.080
<v Speaker 1>whatever the president says, they're going to go and do it.

0:21:55.880 --> 0:21:59.159
<v Speaker 1>And so in many administrations, the State Department has been

0:21:59.200 --> 0:22:01.960
<v Speaker 1>cut out. They have been left with the routine things,

0:22:01.960 --> 0:22:05.879
<v Speaker 1>but the major breakthroughs they haven't touched. Killerson was told

0:22:05.920 --> 0:22:08.840
<v Speaker 1>to cut the State Department. The budget has been cut.

0:22:09.080 --> 0:22:12.359
<v Speaker 1>We'll see what happens with that, But I mean there's

0:22:12.400 --> 0:22:15.880
<v Speaker 1>always been attention between the Defense Department's view of the world,

0:22:15.920 --> 0:22:17.920
<v Speaker 1>the State department ze of the world, and the CIA's

0:22:18.200 --> 0:22:21.800
<v Speaker 1>department of the world due the world, and good presidents

0:22:21.840 --> 0:22:26.000
<v Speaker 1>have always allowed that to go on, and you know,

0:22:26.240 --> 0:22:29.520
<v Speaker 1>try to have a foreign policy that kind of combines

0:22:29.600 --> 0:22:33.320
<v Speaker 1>the two at that level. So in this particular case,

0:22:33.640 --> 0:22:37.800
<v Speaker 1>this president doesn't trust the State Department. He clearly trust

0:22:37.880 --> 0:22:40.920
<v Speaker 1>the Defense Department, and he has a love hate relationship

0:22:41.000 --> 0:22:45.800
<v Speaker 1>the Sea. The most one of the more more important

0:22:45.800 --> 0:22:48.160
<v Speaker 1>books that you put out is the Flashpoints the emerging

0:22:48.200 --> 0:22:51.000
<v Speaker 1>crisis in Europe. What do you expect Mike Pompeio to

0:22:51.080 --> 0:22:54.920
<v Speaker 1>contribute to the alleviation of any crisis in Europe? Well,

0:22:54.920 --> 0:22:58.040
<v Speaker 1>the crisis in Europe is a European crisis. Uh. Their

0:22:58.160 --> 0:23:01.240
<v Speaker 1>failure to deal with the two thousand eight crisis has

0:23:01.359 --> 0:23:05.919
<v Speaker 1>generated fragmentation among nations, bricksit being only the most visible

0:23:06.560 --> 0:23:10.439
<v Speaker 1>and within nation the rise of nationalist movements. There's the

0:23:10.560 --> 0:23:15.520
<v Speaker 1>United States has not touched the European situation by and large,

0:23:15.680 --> 0:23:20.760
<v Speaker 1>there's nothing we can do and the Europeans wouldn't respond.

0:23:21.520 --> 0:23:24.000
<v Speaker 1>So when we talk about the crisis in Europe, it

0:23:24.119 --> 0:23:27.200
<v Speaker 1>is the crisis, the fact the EU is failing, failing

0:23:27.280 --> 0:23:31.080
<v Speaker 1>is an entity, and that it's kicked off a political

0:23:31.119 --> 0:23:34.080
<v Speaker 1>crisis where even the Germans don't have a coherent government.

0:23:34.880 --> 0:23:38.159
<v Speaker 1>So it's an internal process that really doesn't affect us.

0:23:38.200 --> 0:23:41.439
<v Speaker 1>One of the things. Remember Trump, oddly enough, he's pulled

0:23:41.480 --> 0:23:46.400
<v Speaker 1>back from being responsible for the world. George Freeman, thank

0:23:46.400 --> 0:23:50.640
<v Speaker 1>you so much. That geopolitical futures greatly appreciate the time

0:23:50.680 --> 0:24:09.360
<v Speaker 1>today on short notice. We're there. Economic data, Vincent del Judas,

0:24:09.600 --> 0:24:13.680
<v Speaker 1>good morning time. The consumer price indext the CPI February,

0:24:14.080 --> 0:24:16.919
<v Speaker 1>both the headline and the core rising at a slower

0:24:17.000 --> 0:24:20.119
<v Speaker 1>pace than the prior month, both up point two percent

0:24:20.280 --> 0:24:22.520
<v Speaker 1>c p I in the core month over month February

0:24:22.800 --> 0:24:25.280
<v Speaker 1>up point two percent year over year. We see a

0:24:25.280 --> 0:24:28.399
<v Speaker 1>little bit of a pickup in the CPI two point

0:24:28.440 --> 0:24:31.240
<v Speaker 1>two percent versus two point one, but the all important

0:24:31.280 --> 0:24:34.440
<v Speaker 1>core year over year holding steady at one point eight percent.

0:24:34.480 --> 0:24:36.800
<v Speaker 1>I'm Vinnydale Juda, so let's go back to New York. Vinny,

0:24:36.920 --> 0:24:40.119
<v Speaker 1>thank you very much. The number bang in line, the

0:24:40.160 --> 0:24:44.960
<v Speaker 1>market going nowhere. Treasuries unchanged, the US tenure at two six,

0:24:45.000 --> 0:24:48.199
<v Speaker 1>pretty much unchanged on the session. Euro dollar unchanged off

0:24:48.200 --> 0:24:51.240
<v Speaker 1>the back of this as well. At one fifty two,

0:24:51.440 --> 0:24:53.679
<v Speaker 1>we're up about a tenth of one percent. That we

0:24:53.720 --> 0:24:56.240
<v Speaker 1>do start to climb a little bit higher on euro

0:24:56.320 --> 0:24:58.399
<v Speaker 1>dollar now by about two tents of one percent. A

0:24:58.520 --> 0:25:01.440
<v Speaker 1>very marginal reaction in the f facts market, a weak

0:25:01.880 --> 0:25:05.320
<v Speaker 1>dollar story, and a very small reaction in the bond market,

0:25:05.320 --> 0:25:07.679
<v Speaker 1>which just a tiny bit coming into thrice ras Now

0:25:07.760 --> 0:25:10.840
<v Speaker 1>drama here, Michael McKay, Blind Black's very joining us in

0:25:10.880 --> 0:25:14.320
<v Speaker 1>the studio in New York. No drama in the numbers, Mike, No,

0:25:14.480 --> 0:25:18.159
<v Speaker 1>I'm straining here to find something exciting to talk about.

0:25:18.520 --> 0:25:21.240
<v Speaker 1>We did see a small decline and energy prices that

0:25:21.320 --> 0:25:23.800
<v Speaker 1>probably has to do with seasonals. Energy prices did not

0:25:24.000 --> 0:25:28.080
<v Speaker 1>rise as much as they usually do during the month.

0:25:28.080 --> 0:25:31.480
<v Speaker 1>They're kind of flat, uh down to a certain extent.

0:25:31.560 --> 0:25:34.160
<v Speaker 1>Gasoline prices where so you get a one tenth rise

0:25:34.560 --> 0:25:40.879
<v Speaker 1>that's certainly shaved some off. But almost every category was up,

0:25:41.359 --> 0:25:46.320
<v Speaker 1>which is something that will you know, encourage the the

0:25:46.359 --> 0:25:51.120
<v Speaker 1>inflation hawks. But not up by much. I mean, cannot

0:25:51.280 --> 0:25:56.040
<v Speaker 1>change significantly from January. But Michael McKee, if Mark Mobius,

0:25:56.200 --> 0:26:00.119
<v Speaker 1>legendary investor per chance, was here, he would tell me

0:26:00.280 --> 0:26:03.360
<v Speaker 1>Tom do what the cf as do. Run the smooth

0:26:03.560 --> 0:26:07.920
<v Speaker 1>moving averages, exponential or simple. I run simple moving averages.

0:26:08.000 --> 0:26:12.760
<v Speaker 1>Mike mr Mobius always runs exponential moving averages. The vectors

0:26:12.840 --> 0:26:17.399
<v Speaker 1>going up. But we can't break out of the moving

0:26:17.480 --> 0:26:20.880
<v Speaker 1>averages that we saw four years ago or longer ago,

0:26:21.040 --> 0:26:24.399
<v Speaker 1>you know, pre crisis. All this. Where's the breakout? Where's

0:26:24.440 --> 0:26:28.440
<v Speaker 1>the breakout? Breakout? It's on about the fifteen of April

0:26:28.800 --> 0:26:32.760
<v Speaker 1>when we get the CPI numbers for March. Is that

0:26:32.840 --> 0:26:38.800
<v Speaker 1>a base effect issure effect issue? But what you're seeing

0:26:38.800 --> 0:26:41.679
<v Speaker 1>here is inflation starting to rise across the board. A

0:26:41.800 --> 0:26:45.239
<v Speaker 1>lot of things are moving up in price. And we

0:26:45.320 --> 0:26:48.879
<v Speaker 1>used to have a much more uh stratified, you know,

0:26:49.400 --> 0:26:52.720
<v Speaker 1>diversified thing where if some things went up, something you down.

0:26:52.800 --> 0:26:54.919
<v Speaker 1>Most most are going up, they're just not going up

0:26:54.920 --> 0:26:59.600
<v Speaker 1>by much. I mean, airline fares rose by six tenths

0:26:59.680 --> 0:27:03.840
<v Speaker 1>during a month. Um the motor vehicle insurance last month

0:27:03.920 --> 0:27:05.360
<v Speaker 1>was a big deal because it was up one point

0:27:05.400 --> 0:27:07.520
<v Speaker 1>three percent. Was at one point seven percent this time.

0:27:08.000 --> 0:27:10.880
<v Speaker 1>So you're you're still seeing a lot more stuff going up.

0:27:11.040 --> 0:27:13.520
<v Speaker 1>We're going to hear a lot about goldilocks in the

0:27:13.600 --> 0:27:16.600
<v Speaker 1>days to come. Michael McKey because this is fertile ground

0:27:16.640 --> 0:27:18.400
<v Speaker 1>for for risk assets in the minds of a lot

0:27:18.400 --> 0:27:21.720
<v Speaker 1>of people. Inflation, Yes, things are moving high, they're drifting higher,

0:27:21.760 --> 0:27:24.360
<v Speaker 1>but it's so gradual and the pressure is so subdued

0:27:24.720 --> 0:27:26.560
<v Speaker 1>that what you see in terms of reaction on the

0:27:26.600 --> 0:27:28.960
<v Speaker 1>screen today, Tom, it's not in effect. It's not in

0:27:28.960 --> 0:27:31.439
<v Speaker 1>the bond market, it's in the equity market. Equity future

0:27:31.480 --> 0:27:33.560
<v Speaker 1>is really spiked off the back of that inflation print.

0:27:33.600 --> 0:27:38.200
<v Speaker 1>It's the fear of inflation, Michael, is what's gripping investors.

0:27:38.920 --> 0:27:41.360
<v Speaker 1>And I guess this report this morning says, at least

0:27:41.359 --> 0:27:44.119
<v Speaker 1>for now, nothing to fear, though as you've pointed out,

0:27:44.400 --> 0:27:46.359
<v Speaker 1>next month, in the month after that could be quite

0:27:46.359 --> 0:27:50.000
<v Speaker 1>critical in the next move fear itself, Tom, And we're

0:27:50.000 --> 0:27:53.119
<v Speaker 1>talking about this on surveillance television this morning. Uh, the

0:27:53.200 --> 0:27:58.040
<v Speaker 1>idea that the markets are really really terrified of inflation

0:27:58.160 --> 0:28:00.520
<v Speaker 1>out there, but it's going to be very gradual and

0:28:00.520 --> 0:28:02.679
<v Speaker 1>it's not going to be the inlation of your past.

0:28:02.880 --> 0:28:04.800
<v Speaker 1>Mike McKee, Thank you so much. Much more on this

0:28:04.880 --> 0:28:13.560
<v Speaker 1>in the coming weeks. Thanks for listening to the Bloomberg

0:28:13.560 --> 0:28:19.520
<v Speaker 1>Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts. SoundCloud,

0:28:19.880 --> 0:28:24.120
<v Speaker 1>or whichever podcast platform you prefer. I'm on Twitter at

0:28:24.160 --> 0:28:28.400
<v Speaker 1>Tom Keene before the podcast. You can always catch us worldwide.

0:28:28.840 --> 0:28:29.960
<v Speaker 1>I'm Bloomberg Radio