1 00:00:02,560 --> 00:00:12,640 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance podcast and I'm Tom 2 00:00:12,720 --> 00:00:15,720 Speaker 1: Keene Jay Leye. We bring you insight from the best 3 00:00:15,800 --> 00:00:21,240 Speaker 1: in economics, finance, investment and international relations. Find Bloomberg Surveillance 4 00:00:21,280 --> 00:00:25,720 Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course, 5 00:00:26,040 --> 00:00:36,800 Speaker 1: on the Bloomberg. According to a person familiar with the situation, 6 00:00:37,120 --> 00:00:39,559 Speaker 1: the British Prime Minister to reason May calling off a 7 00:00:39,680 --> 00:00:43,680 Speaker 1: crucial vote in Parliament on whether to approve her Brexit deal. 8 00:00:43,800 --> 00:00:46,040 Speaker 1: It all changed in the last Now what a difference 9 00:00:46,200 --> 00:00:49,559 Speaker 1: ten minutes makes. The office of Prime Minister May publicly 10 00:00:49,680 --> 00:00:52,760 Speaker 1: insisting it was going ahead as recently as six twenty 11 00:00:53,159 --> 00:00:57,360 Speaker 1: Eastern time. Then the Prime Minister started a call with 12 00:00:57,440 --> 00:01:01,000 Speaker 1: her most senior ministers about thirty minutes ago, and seemingly 13 00:01:01,200 --> 00:01:05,600 Speaker 1: everything changed. Neil Sharing joining us now from London, Capital Economics, 14 00:01:05,640 --> 00:01:09,560 Speaker 1: Growth Chief Economists. Good morning to Nil. Good morning. Just 15 00:01:09,600 --> 00:01:12,160 Speaker 1: putting off the inevitable. I guess, which is this vote 16 00:01:12,319 --> 00:01:15,200 Speaker 1: wasn't going to go through, Neil. It was always unlarnly 17 00:01:15,280 --> 00:01:18,840 Speaker 1: to go through, and it's obviously it would be irresponsible 18 00:01:18,840 --> 00:01:20,959 Speaker 1: of a government to put a vote like this to Parliament. 19 00:01:20,959 --> 00:01:22,919 Speaker 1: I think when there's a chance that the Prime Minister 20 00:01:22,959 --> 00:01:25,280 Speaker 1: might lose by a hundred or so votes, particularly over 21 00:01:25,319 --> 00:01:28,160 Speaker 1: an issue so important. So I think it would have 22 00:01:28,160 --> 00:01:30,680 Speaker 1: been a bigger surprise had this vote have gone ahead. 23 00:01:30,680 --> 00:01:32,680 Speaker 1: The crey cushion now, of course, is what comes next. 24 00:01:32,680 --> 00:01:35,120 Speaker 1: Are there any big concessions to this deal? Is it 25 00:01:35,160 --> 00:01:37,520 Speaker 1: in the withdrawal agreement, the political statement? There's a European 26 00:01:37,520 --> 00:01:41,800 Speaker 1: Council meeting later this week on Thursday. Um does that 27 00:01:42,000 --> 00:01:46,200 Speaker 1: perhaps pressage some changes or as the currency markets may 28 00:01:46,200 --> 00:01:49,280 Speaker 1: seem to be interpreting that, is this just more uncertainty? Well? 29 00:01:49,280 --> 00:01:51,320 Speaker 1: The guard Hian reporting now that the Prime Minister will 30 00:01:51,320 --> 00:01:53,640 Speaker 1: make a statement to the House of Commons at three 31 00:01:53,720 --> 00:01:56,640 Speaker 1: thirty UK time, so that will be a ten thirty 32 00:01:57,000 --> 00:02:00,680 Speaker 1: Eastern time Neil. What is next for the Prime minister? 33 00:02:00,760 --> 00:02:03,760 Speaker 1: Because seemingly this was the deal according to the Europeans 34 00:02:03,760 --> 00:02:06,200 Speaker 1: and there is no other deal. This was the deal 35 00:02:06,240 --> 00:02:08,120 Speaker 1: and what's more, was it not it wasn't only the 36 00:02:08,240 --> 00:02:10,080 Speaker 1: deal and it was her deal. She was very personal 37 00:02:10,120 --> 00:02:12,359 Speaker 1: about this is this is my deal and it's quite 38 00:02:12,360 --> 00:02:16,160 Speaker 1: clear that Parliament was going to reject this in large numbers. 39 00:02:17,000 --> 00:02:18,760 Speaker 1: I think the key question now is can she go 40 00:02:18,840 --> 00:02:21,000 Speaker 1: back to Brussels, and because she in particular managed to 41 00:02:21,120 --> 00:02:25,120 Speaker 1: negotiate some changes to this backstop, which is the kind 42 00:02:25,120 --> 00:02:27,680 Speaker 1: of arrangements around the Northern ed and Southern Island border. 43 00:02:28,200 --> 00:02:31,200 Speaker 1: Uh and in particular the extent to which there might 44 00:02:31,240 --> 00:02:34,239 Speaker 1: be a unimactual vote by the UK to get out 45 00:02:34,240 --> 00:02:36,720 Speaker 1: of that. The backstop wants to be implemented. That's the 46 00:02:36,760 --> 00:02:39,200 Speaker 1: critical thing. Um. If she can, then I think there's 47 00:02:39,200 --> 00:02:40,520 Speaker 1: a good chance that it could go through on a 48 00:02:40,760 --> 00:02:44,800 Speaker 1: perhaps a vote after Christmas. If she can't, that that 49 00:02:45,080 --> 00:02:50,160 Speaker 1: the uncertainty continues. There's a headline Neil sharing. Sterling declines 50 00:02:50,200 --> 00:02:56,480 Speaker 1: to one fifty one a dollar, one lowest since June 51 00:02:56,520 --> 00:03:02,160 Speaker 1: two thousand seventeen. President Trump, I will cares about dollar dynamics. 52 00:03:02,760 --> 00:03:05,480 Speaker 1: Does the Prime Minister and other worthies in the United 53 00:03:05,560 --> 00:03:09,160 Speaker 1: Kingdom do they care about sterling level? If we're having 54 00:03:09,320 --> 00:03:14,480 Speaker 1: forbid to retest twenty two twenty four? No, I think 55 00:03:14,480 --> 00:03:17,679 Speaker 1: there's is much less of a How's much less weight 56 00:03:17,720 --> 00:03:21,880 Speaker 1: in the UK discourse at least so long as it 57 00:03:21,919 --> 00:03:24,280 Speaker 1: doesn't create a big inflationary spike. That's the big question. 58 00:03:24,320 --> 00:03:26,440 Speaker 1: Does it Does this feed through to a big spike inflation? 59 00:03:26,760 --> 00:03:29,240 Speaker 1: That's when consumers starts to feel the squeeze here in 60 00:03:29,240 --> 00:03:32,200 Speaker 1: the UK. And just like the US is a consumer 61 00:03:32,280 --> 00:03:35,160 Speaker 1: driven economy, so the UK is a consumer driven economy. 62 00:03:35,800 --> 00:03:37,840 Speaker 1: Of course, this is happening against the batchdrop of lower 63 00:03:38,080 --> 00:03:40,760 Speaker 1: global oil prices, so that's helping, that's helping to kind 64 00:03:40,760 --> 00:03:43,800 Speaker 1: of work against the inflationary consequences of a of a 65 00:03:43,800 --> 00:03:46,080 Speaker 1: weaker pound kneel. In the summer of twenty sixteen, when 66 00:03:46,080 --> 00:03:48,480 Speaker 1: the vote came through from the British people to leave 67 00:03:48,520 --> 00:03:51,120 Speaker 1: the European Union, it was a global story. It very 68 00:03:51,200 --> 00:03:54,400 Speaker 1: quickly became a European story, then very quickly became a 69 00:03:54,600 --> 00:03:58,440 Speaker 1: UK story. Is this a one issue country and this 70 00:03:58,480 --> 00:04:01,120 Speaker 1: issue doesn't really resonate with many other people, many other 71 00:04:01,120 --> 00:04:04,400 Speaker 1: countries around world. It's flattering to think it's a one 72 00:04:04,440 --> 00:04:06,400 Speaker 1: country story at this At this stage, I think most 73 00:04:06,440 --> 00:04:08,240 Speaker 1: of the British public kind of rolled their eyes at 74 00:04:08,320 --> 00:04:11,240 Speaker 1: the whole, the whole kind of sorry mess of it all. 75 00:04:11,760 --> 00:04:13,400 Speaker 1: And it has been a story of that kind of 76 00:04:13,400 --> 00:04:16,560 Speaker 1: abject political failure on every side in the In the UK, 77 00:04:17,320 --> 00:04:19,800 Speaker 1: I think this starts to matter for the UK populace 78 00:04:19,839 --> 00:04:22,680 Speaker 1: again if it starts to hit the economy. But I 79 00:04:22,720 --> 00:04:24,360 Speaker 1: think most people are kind of lling their eyes here 80 00:04:24,400 --> 00:04:27,040 Speaker 1: in the UK. I tried to be a dutiful student 81 00:04:27,040 --> 00:04:29,479 Speaker 1: over the weekend, you know, I mean pharaohs forcing me 82 00:04:29,520 --> 00:04:33,960 Speaker 1: to watch four English football games. I mean it was painful. Meal. Well, 83 00:04:34,000 --> 00:04:37,640 Speaker 1: I hope you managed to watch Fulham. Actually we lost 84 00:04:37,680 --> 00:04:39,680 Speaker 1: this weekend to Man United, So let's say about that. 85 00:04:39,720 --> 00:04:42,720 Speaker 1: When was the last time full on one? Uh, that's 86 00:04:42,760 --> 00:04:48,640 Speaker 1: a good question. Two weeks ago we beat one of them, 87 00:04:48,760 --> 00:04:52,680 Speaker 1: Edward whatever. I love how quickly we get off script 88 00:04:52,720 --> 00:04:55,760 Speaker 1: on this. But you know, in it all, I read 89 00:04:55,800 --> 00:04:59,359 Speaker 1: a lot on Brexit. Of course, preparing for my trip 90 00:04:59,440 --> 00:05:02,000 Speaker 1: over there. We'll be in London tomorrow, folks looking forward 91 00:05:01,960 --> 00:05:07,200 Speaker 1: to that. Well, maybe we'll see. But but but Neil, seriously, 92 00:05:07,960 --> 00:05:10,279 Speaker 1: I mean, is that the best thing to do is 93 00:05:10,320 --> 00:05:12,680 Speaker 1: to do like the British people and just ignore all 94 00:05:12,720 --> 00:05:16,560 Speaker 1: this mumble jumbo. So there's so much noise around this 95 00:05:16,600 --> 00:05:19,960 Speaker 1: at the moment, and there's so many different possible outcomes. Um. 96 00:05:20,200 --> 00:05:22,120 Speaker 1: I think part of the issues that is polarized on 97 00:05:22,200 --> 00:05:23,960 Speaker 1: both sides. So if you care about bricks, that you 98 00:05:24,000 --> 00:05:26,279 Speaker 1: care about it in one direction or the other. Most 99 00:05:26,279 --> 00:05:28,080 Speaker 1: of the country, you speak to people in the street 100 00:05:28,400 --> 00:05:30,920 Speaker 1: they're like, Okay, that's the way Faral is, which I get. 101 00:05:31,240 --> 00:05:33,680 Speaker 1: But but you know, what we would say in America 102 00:05:33,839 --> 00:05:36,560 Speaker 1: is this is a constitutional crisis. I don't know if 103 00:05:36,600 --> 00:05:40,240 Speaker 1: that's the right phrase, but is there's a constitutional crisis 104 00:05:40,640 --> 00:05:43,320 Speaker 1: in the United Kingdom. If you're telling me nobody, including 105 00:05:43,560 --> 00:05:48,080 Speaker 1: Farll cares about it, I think it's potentially a constitutional crisis. 106 00:05:48,120 --> 00:05:49,440 Speaker 1: And this is part of the issue that we have, 107 00:05:49,720 --> 00:05:53,200 Speaker 1: is that um parliaments rejecting the deal that the executives 108 00:05:53,200 --> 00:05:56,839 Speaker 1: put before it. There's now there's a meaningful vote that 109 00:05:56,839 --> 00:05:58,280 Speaker 1: we know we're going to have in Parliament. There's also 110 00:05:58,320 --> 00:06:00,279 Speaker 1: an amendment to that meaningful vote that says if the 111 00:06:00,400 --> 00:06:04,080 Speaker 1: voter is defeated, then Parliament can essentially instruct the government 112 00:06:04,120 --> 00:06:07,080 Speaker 1: to do next. But of course Parliament can only approve legislation, 113 00:06:07,120 --> 00:06:10,440 Speaker 1: it can't actually propose it. So we we do get 114 00:06:10,480 --> 00:06:12,960 Speaker 1: into lots of murky legal territory. I mean, I'm a 115 00:06:13,000 --> 00:06:16,080 Speaker 1: loadly macro economist in all of this, but there is 116 00:06:16,600 --> 00:06:19,400 Speaker 1: we certainly get into kind of dubious legal grounds and 117 00:06:19,480 --> 00:06:22,640 Speaker 1: potential for constitution. I draw a distinction between not caring 118 00:06:22,680 --> 00:06:24,640 Speaker 1: about it and just being exhausted by it. I think 119 00:06:24,640 --> 00:06:27,960 Speaker 1: most people still care about it, they're just totally exhausted 120 00:06:27,960 --> 00:06:31,039 Speaker 1: by it. Neil. Looking across Europe right now, how politically 121 00:06:31,120 --> 00:06:33,280 Speaker 1: unstable is the region at the moment? We all saw 122 00:06:33,640 --> 00:06:36,159 Speaker 1: the incredible pictures coming out of Paris, France over the 123 00:06:36,200 --> 00:06:40,120 Speaker 1: weekend as well, it looks like Europe's very distracted. Um, 124 00:06:40,279 --> 00:06:42,680 Speaker 1: never mind dealing with just Brexit. France has its own 125 00:06:42,680 --> 00:06:46,479 Speaker 1: issues as well. France has its own issues. Italy of 126 00:06:46,520 --> 00:06:50,080 Speaker 1: course has its own issues. Germany has its issues too. 127 00:06:51,480 --> 00:06:53,240 Speaker 1: I think this would have been a very different type 128 00:06:53,240 --> 00:06:55,599 Speaker 1: of crisis for Europe have we had a strong center 129 00:06:55,680 --> 00:06:58,599 Speaker 1: around Macron and Merkele. But obviously we don't have that 130 00:06:58,720 --> 00:07:01,479 Speaker 1: now um And I think that's perhaps part of the 131 00:07:01,520 --> 00:07:03,800 Speaker 1: power of vacuum at the House of Europe is feeding 132 00:07:03,800 --> 00:07:06,760 Speaker 1: into this Brexit debacle, because had this happened two or 133 00:07:06,800 --> 00:07:08,440 Speaker 1: three years ago, I'm pretty sure that Merca would have 134 00:07:08,480 --> 00:07:10,080 Speaker 1: got everyone in the room knock some heads together and 135 00:07:10,160 --> 00:07:11,800 Speaker 1: we would have ended up in a much better place. 136 00:07:12,520 --> 00:07:14,000 Speaker 1: We don't have that name. I don't know who an 137 00:07:14,040 --> 00:07:17,400 Speaker 1: American football gets relegated, not that you can. That would 138 00:07:17,400 --> 00:07:19,200 Speaker 1: be a very cool thing in the what if we 139 00:07:19,640 --> 00:07:23,320 Speaker 1: be great? We could relegate politicians well or radio host. 140 00:07:24,040 --> 00:07:27,720 Speaker 1: But you know I'm ready for my relegation. But I 141 00:07:27,720 --> 00:07:35,400 Speaker 1: didn't realize. No, but but I look at Fulham. They're 142 00:07:35,400 --> 00:07:38,880 Speaker 1: in last place. Seriously, Neil, what happens to the world 143 00:07:38,880 --> 00:07:42,160 Speaker 1: of Fulham if they're thrown out of the Premier League. 144 00:07:42,560 --> 00:07:45,360 Speaker 1: We get we go back to the Championship, which is, 145 00:07:45,720 --> 00:07:48,679 Speaker 1: in my humble opinion, the best division in world football. 146 00:07:48,760 --> 00:07:51,800 Speaker 1: It's a great division. But it says something about how 147 00:07:52,160 --> 00:07:54,440 Speaker 1: distracted my life is with Brexit and everything else that 148 00:07:54,520 --> 00:07:57,040 Speaker 1: actually the football despite being impossom of the Premier League 149 00:07:57,000 --> 00:07:59,680 Speaker 1: because a little ray of way of hope at the moment. Neil, 150 00:07:59,760 --> 00:08:02,440 Speaker 1: thank you, thank you for joining us. Someone we got 151 00:08:02,440 --> 00:08:06,080 Speaker 1: off topics so quickly, Neil Ship We talked about chief 152 00:08:06,160 --> 00:08:22,720 Speaker 1: economist and I wasn't talking about the football. John Farrell 153 00:08:22,760 --> 00:08:24,920 Speaker 1: and Tom Keane with us and now for a one 154 00:08:24,960 --> 00:08:30,960 Speaker 1: hour interview commercial free, Mark Chandler. We should that's how 155 00:08:31,040 --> 00:08:33,720 Speaker 1: much we got to talk about. How long we got 156 00:08:33,800 --> 00:08:39,040 Speaker 1: nine minutes, eighteen seconds. Let's go, okay, Indian rupie, the 157 00:08:39,120 --> 00:08:44,520 Speaker 1: central bank governors out, there's domestic politics, there's independence in 158 00:08:44,679 --> 00:08:48,560 Speaker 1: all these are the little exogenous e M shocks that 159 00:08:48,720 --> 00:08:51,000 Speaker 1: just sort of happened, aren't they. Yeah, And I think 160 00:08:51,040 --> 00:08:53,640 Speaker 1: you're right. These are not the things about FED tightening, 161 00:08:54,000 --> 00:08:57,240 Speaker 1: they're not about oil prices. They're little things. And let 162 00:08:57,240 --> 00:09:02,040 Speaker 1: me say this, Chandler Nail four months ago. The importance 163 00:09:02,320 --> 00:09:04,920 Speaker 1: are watching India continue And so I think that what's 164 00:09:04,960 --> 00:09:07,760 Speaker 1: happening we've seen that's not only in countries like Hungary, 165 00:09:07,800 --> 00:09:10,720 Speaker 1: but in India and even in the United States where 166 00:09:10,720 --> 00:09:14,960 Speaker 1: the central banks independence is being challenged by policymakers. And 167 00:09:15,000 --> 00:09:19,559 Speaker 1: in India it reached a breaking point. So what happens next? 168 00:09:20,480 --> 00:09:22,079 Speaker 1: So I think that it's going to take a while 169 00:09:22,080 --> 00:09:23,600 Speaker 1: in India they get a new they'll get a new 170 00:09:23,600 --> 00:09:25,319 Speaker 1: central bank governor, but it'll take a while to re 171 00:09:25,520 --> 00:09:28,520 Speaker 1: establish that independence of the central bank and for to 172 00:09:28,520 --> 00:09:30,560 Speaker 1: get credibility in the market. So this will keep some 173 00:09:30,640 --> 00:09:33,800 Speaker 1: downward pressure on the RUPEA. It looks like they've got 174 00:09:33,800 --> 00:09:37,120 Speaker 1: a serious problem with the financial system and the banks 175 00:09:37,120 --> 00:09:39,280 Speaker 1: and non performing loans, and I just wonder how they're 176 00:09:39,280 --> 00:09:41,199 Speaker 1: going to clean that up, and whether that is really 177 00:09:41,200 --> 00:09:43,440 Speaker 1: the responsibility of the central bank or whether it's the 178 00:09:43,440 --> 00:09:45,760 Speaker 1: government that's really going to do something care But what 179 00:09:45,840 --> 00:09:47,960 Speaker 1: we learned in a great financial crisis is there's not 180 00:09:48,080 --> 00:09:52,040 Speaker 1: much of a difference between the fiscal officials and the 181 00:09:52,080 --> 00:09:55,000 Speaker 1: central bank. They have to cooperate, work together to zave 182 00:09:55,040 --> 00:09:57,720 Speaker 1: a banking crisis. And I think you're right that the 183 00:09:57,760 --> 00:10:02,400 Speaker 1: depreciation of the rupee, the UH balance, the payments deficit, 184 00:10:02,440 --> 00:10:06,200 Speaker 1: that bad loan situation, all negatives for India. Is the 185 00:10:06,320 --> 00:10:10,640 Speaker 1: United Kingdom heading towards emerging market status, And obviously that's 186 00:10:10,640 --> 00:10:13,880 Speaker 1: a snarky question, but I mean not an emerging market, 187 00:10:13,920 --> 00:10:17,200 Speaker 1: but come on, there's a set of things we've covered 188 00:10:17,760 --> 00:10:20,800 Speaker 1: that really moved them away from like G two, G 189 00:10:21,080 --> 00:10:24,280 Speaker 1: seven quality, isn't it. Yeah? But I wonder if that's 190 00:10:24,320 --> 00:10:25,960 Speaker 1: been the case for quite a while. I mean that 191 00:10:26,000 --> 00:10:28,320 Speaker 1: the UK is not as significant of an economy I 192 00:10:28,360 --> 00:10:30,760 Speaker 1: say it was a hundred years ago, fifty years ago even, 193 00:10:31,160 --> 00:10:35,600 Speaker 1: and whether it still even has the fiscal fiscal strength 194 00:10:35,600 --> 00:10:40,000 Speaker 1: really to support its nuclear especially on the submarines and 195 00:10:40,040 --> 00:10:42,760 Speaker 1: the ships. I think that the death a little danger 196 00:10:42,800 --> 00:10:45,400 Speaker 1: is that the UK, by leaving the EU, is going 197 00:10:45,440 --> 00:10:48,520 Speaker 1: to become more marginalized in the world economy. And I 198 00:10:48,520 --> 00:10:50,520 Speaker 1: think that the people who are in favor of the 199 00:10:50,600 --> 00:10:53,880 Speaker 1: UK leaving haven't really thought through that the UK is 200 00:10:53,920 --> 00:10:57,199 Speaker 1: likely to be weaker rather than stronger going forward. Weaker 201 00:10:57,240 --> 00:10:59,679 Speaker 1: in what sense? Just elaborate on that a little bit more. 202 00:10:59,720 --> 00:11:02,679 Speaker 1: Mount Well, if it's part of the EU, it can be, 203 00:11:02,679 --> 00:11:04,400 Speaker 1: it could, it could bulk up. It's part of like 204 00:11:04,600 --> 00:11:07,160 Speaker 1: force multiplier. But now that it's going to be independent 205 00:11:07,840 --> 00:11:11,000 Speaker 1: standing on its own, how important is the sixty million 206 00:11:11,160 --> 00:11:16,280 Speaker 1: people economy that's barely growing even in good times. What 207 00:11:16,280 --> 00:11:18,040 Speaker 1: what do they really do? What is it really needed 208 00:11:18,080 --> 00:11:20,440 Speaker 1: for in the global division of labor? Can I just 209 00:11:20,520 --> 00:11:23,000 Speaker 1: mention the submarine thing? Because everybody's going, what are you 210 00:11:23,000 --> 00:11:26,040 Speaker 1: talking about? It's an island nation like the Chinese, they're 211 00:11:26,080 --> 00:11:28,640 Speaker 1: doing the subs and John, every time I go to London, 212 00:11:28,880 --> 00:11:32,600 Speaker 1: it's it's it's visible, it's the subs are always visible. 213 00:11:32,880 --> 00:11:35,360 Speaker 1: Just this is just a quick look. Forty one billion 214 00:11:35,400 --> 00:11:39,959 Speaker 1: dollars to replace their Vanguard class submarines. I don't know 215 00:11:39,960 --> 00:11:43,240 Speaker 1: what they're replacing them with, but John Mark rather mentions this, 216 00:11:43,400 --> 00:11:46,040 Speaker 1: it's a big deal. They are huge military power still 217 00:11:46,640 --> 00:11:49,600 Speaker 1: and I don't think that changes off the Brexit, does it. Well, 218 00:11:50,080 --> 00:11:53,679 Speaker 1: huge military power compared to whom, compared to other people 219 00:11:53,679 --> 00:11:56,720 Speaker 1: in Europe, perhaps only the trench you have nuclear weapons. 220 00:11:56,840 --> 00:11:58,880 Speaker 1: You know, at this interesting point, the UK does have 221 00:11:58,920 --> 00:12:02,200 Speaker 1: a permanent of a seat on the Security Council. That's 222 00:12:02,240 --> 00:12:04,320 Speaker 1: their claim to fame, and I think that they were 223 00:12:04,400 --> 00:12:06,760 Speaker 1: to stay in the EU. There's already pressure for the 224 00:12:06,760 --> 00:12:09,719 Speaker 1: EU to have one seat. It s used to be 225 00:12:09,760 --> 00:12:11,640 Speaker 1: the UK seat, or should be the French seat, And 226 00:12:11,840 --> 00:12:14,880 Speaker 1: despite the French wine to cooperate more and have more integration, 227 00:12:15,080 --> 00:12:17,120 Speaker 1: they're very reluctant to give up that seat on the 228 00:12:17,200 --> 00:12:20,160 Speaker 1: UN Security Council. Two years after the vote, more than 229 00:12:20,200 --> 00:12:21,959 Speaker 1: two years after the vote, we still have no idea 230 00:12:22,000 --> 00:12:23,800 Speaker 1: what this relationship has gone to look like. So I 231 00:12:23,840 --> 00:12:26,000 Speaker 1: find it difficult to really make conclusion as to what 232 00:12:26,600 --> 00:12:28,840 Speaker 1: and where it leaves the UK. Do you have any 233 00:12:28,880 --> 00:12:31,400 Speaker 1: idea where this is going? Mark? I wish I could 234 00:12:31,440 --> 00:12:32,760 Speaker 1: tell you I had a clue where it's going, but 235 00:12:32,960 --> 00:12:35,040 Speaker 1: I don't think the British nowhere it's going. You know, 236 00:12:35,040 --> 00:12:38,720 Speaker 1: they voted in a non binding referendum two years ago. 237 00:12:39,320 --> 00:12:42,120 Speaker 1: Policy makers say it's gonna be binding, and they really 238 00:12:42,120 --> 00:12:44,360 Speaker 1: didn't they agree. That's sort of like on our healthcare. 239 00:12:44,400 --> 00:12:46,880 Speaker 1: They agree they didn't like what was existed, but they 240 00:12:46,920 --> 00:12:49,840 Speaker 1: can't agree on what should be the alternative. And that's 241 00:12:49,880 --> 00:12:51,800 Speaker 1: where the problem lies. Well, let's talk about where the 242 00:12:51,800 --> 00:12:53,599 Speaker 1: problem lies in Europe. At the moment, there's an a 243 00:12:53,679 --> 00:12:56,120 Speaker 1: c B meeting light to this week. I have to 244 00:12:56,160 --> 00:12:58,400 Speaker 1: say President Drogg is in a tough spot. What are 245 00:12:58,400 --> 00:13:02,960 Speaker 1: you expecting from this news conference and the forecast this Thursday? 246 00:13:03,000 --> 00:13:04,640 Speaker 1: So a couple of things. One is, I think drag 247 00:13:05,000 --> 00:13:07,560 Speaker 1: is going to stay to his knitting and say that 248 00:13:07,559 --> 00:13:10,240 Speaker 1: they're going to finish the asset purchases at the end 249 00:13:10,240 --> 00:13:13,319 Speaker 1: of this month. The next important thing is what did 250 00:13:13,320 --> 00:13:15,280 Speaker 1: he say about the economy? And I think what we 251 00:13:15,320 --> 00:13:18,920 Speaker 1: saw last week was wages are still rising, and this 252 00:13:18,960 --> 00:13:22,640 Speaker 1: is where he's pinning his optimism. Tighter labor market is 253 00:13:22,679 --> 00:13:27,080 Speaker 1: going to equal stronger economy, higher wages, inflationary John, I 254 00:13:27,080 --> 00:13:30,080 Speaker 1: think your observation is brilliant and that he is going 255 00:13:30,160 --> 00:13:34,800 Speaker 1: to be visible into a feed that has radically changed 256 00:13:34,840 --> 00:13:37,200 Speaker 1: in tone. Well, I mean, I mean from the last 257 00:13:37,200 --> 00:13:39,760 Speaker 1: press conference. The base case now just in terms of 258 00:13:39,800 --> 00:13:42,720 Speaker 1: market pricing, implied by market pricing is one hike from 259 00:13:42,720 --> 00:13:46,320 Speaker 1: the Federal Reserve through through the whole year, through the 260 00:13:46,320 --> 00:13:49,800 Speaker 1: whole year. How did you find that that is all 261 00:13:49,840 --> 00:13:53,200 Speaker 1: that is price now for just the single right hike. Now, 262 00:13:53,240 --> 00:13:55,280 Speaker 1: if that's all the FETED can deliver, how is the 263 00:13:55,280 --> 00:13:58,160 Speaker 1: e c B gun to deliver a right hike? I 264 00:13:58,200 --> 00:13:59,960 Speaker 1: think that's why the dollar is holding up so well 265 00:14:00,200 --> 00:14:03,640 Speaker 1: despite the shift and FED expectations, because as the markets 266 00:14:03,640 --> 00:14:07,480 Speaker 1: adjusting FED expectations, they've adjusted everybody else else's expectations as well. 267 00:14:07,600 --> 00:14:10,360 Speaker 1: They've taken out the ECB hike for next year, they're 268 00:14:10,360 --> 00:14:12,959 Speaker 1: removing the Bank of Canada's rate move, They're removing the 269 00:14:13,000 --> 00:14:15,679 Speaker 1: Bank of England's rate move. I think this is why 270 00:14:15,760 --> 00:14:18,240 Speaker 1: the dollar is able to hold up despite the shift 271 00:14:18,320 --> 00:14:20,480 Speaker 1: we've had in FED expectations. So the challenge for Drunk 272 00:14:20,640 --> 00:14:23,280 Speaker 1: on Thursday, I think is pretty clear. At a meeting 273 00:14:23,320 --> 00:14:25,960 Speaker 1: several months ago, and it's a meeting they got your attention, Tom, 274 00:14:26,040 --> 00:14:28,880 Speaker 1: he managed to pretty much pre announce the end of quantitasvazing, 275 00:14:29,240 --> 00:14:32,760 Speaker 1: but supplement it with very very dovish right guidance. So 276 00:14:32,880 --> 00:14:35,640 Speaker 1: President Drunk he walks away from a meeting essentially ending 277 00:14:35,720 --> 00:14:39,240 Speaker 1: q A begetting expectations for monetary policy incredibly dovish from 278 00:14:39,280 --> 00:14:42,160 Speaker 1: the market. What is the dovish twist on Thursday? Because 279 00:14:42,200 --> 00:14:44,480 Speaker 1: I really struggled to say it. I think the dovish 280 00:14:44,480 --> 00:14:47,520 Speaker 1: twist coming with the forecasts. He's likely to see the 281 00:14:47,600 --> 00:14:51,040 Speaker 1: staff with the eurosystem central banks, they are likely to 282 00:14:51,080 --> 00:14:55,080 Speaker 1: cut growth forecasts and inflation forecast and that will tell 283 00:14:55,120 --> 00:14:58,000 Speaker 1: the market they're not going to raise rates in maybe 284 00:14:58,040 --> 00:15:01,560 Speaker 1: not until into Mark. Thank you so much, Mark Chandler 285 00:15:01,600 --> 00:15:13,840 Speaker 1: with his Gary showing with us, and this is a 286 00:15:13,880 --> 00:15:17,640 Speaker 1: massive victory lab once again with the yield two point 287 00:15:17,720 --> 00:15:22,880 Speaker 1: eight five thirty year bonds three showing with a long 288 00:15:23,000 --> 00:15:28,840 Speaker 1: term call of surprise lower interest rates has been absolutely 289 00:15:28,920 --> 00:15:31,360 Speaker 1: dead on. There's no other way to put it. Gary, 290 00:15:31,360 --> 00:15:35,920 Speaker 1: congratulations getting the persistency of your call. What is the 291 00:15:36,080 --> 00:15:40,120 Speaker 1: single thing the rates are going to higher? People get wrong? 292 00:15:40,240 --> 00:15:42,840 Speaker 1: Is it a miscuess of g d P? Is it 293 00:15:42,920 --> 00:15:46,080 Speaker 1: a miscuess of what they get wrong? That we're in 294 00:15:46,120 --> 00:15:49,480 Speaker 1: a deflationary climate. If you look at the entire post 295 00:15:49,520 --> 00:15:53,360 Speaker 1: World War two period and you correlate treasury bonds, long 296 00:15:53,440 --> 00:15:57,880 Speaker 1: term bonds with inflation, there's a sixty correlation. Now that's 297 00:15:57,920 --> 00:16:01,880 Speaker 1: amazing considering everything else is going on fiscal policy, what 298 00:16:01,960 --> 00:16:05,880 Speaker 1: the Fed is doing, War's piece, etcetera, etcetera. But what 299 00:16:05,960 --> 00:16:08,200 Speaker 1: it says is, if you're right on inflation, you've got 300 00:16:08,400 --> 00:16:11,600 Speaker 1: you got the lion's share of the forecast on treasury bonds. 301 00:16:12,120 --> 00:16:14,640 Speaker 1: And I think we're in a very deflationary world. You know, 302 00:16:14,680 --> 00:16:18,760 Speaker 1: you look what's happening here, um continually under shooting the 303 00:16:18,760 --> 00:16:23,120 Speaker 1: feds two percent target on inflation. You see oil falling 304 00:16:23,120 --> 00:16:27,840 Speaker 1: out of bed, copper, other commodities, weak economies around the 305 00:16:27,880 --> 00:16:31,080 Speaker 1: world weaking. But this is a long term phenomenon, and 306 00:16:31,120 --> 00:16:34,400 Speaker 1: I think a short term situation is really verifying it 307 00:16:34,720 --> 00:16:37,080 Speaker 1: just in terms of the undershooting. Gary, to what extent 308 00:16:37,120 --> 00:16:39,640 Speaker 1: will be undershooting because to my knowledge, over the last 309 00:16:39,720 --> 00:16:42,360 Speaker 1: year or so, we've been in and around the federal 310 00:16:42,360 --> 00:16:46,160 Speaker 1: reserves inflation target. But kind of there aren't we Well, 311 00:16:46,240 --> 00:16:47,960 Speaker 1: if you look at the last few months, yeah, you're 312 00:16:47,960 --> 00:16:49,520 Speaker 1: over here, you're right, John, But if you look at 313 00:16:49,600 --> 00:16:53,000 Speaker 1: last few months, it's been it's been under shooting intercourse 314 00:16:53,040 --> 00:16:56,680 Speaker 1: with a weakness in oil. Now, uh, it will it 315 00:16:56,680 --> 00:16:58,720 Speaker 1: will be a lot lower. Now. Of course, you can 316 00:16:58,760 --> 00:17:01,120 Speaker 1: say you want to look at the core throughout food 317 00:17:01,160 --> 00:17:04,680 Speaker 1: and energy, but I eat, I drive a car. They 318 00:17:04,680 --> 00:17:07,800 Speaker 1: are they're they're more volatile, but they but they certainly 319 00:17:07,800 --> 00:17:10,399 Speaker 1: are important components. The market is beginning to price this 320 00:17:10,480 --> 00:17:12,639 Speaker 1: in quite a drastic way. I would start over the 321 00:17:12,720 --> 00:17:15,280 Speaker 1: last couple of weeks, we've had a real repricing of 322 00:17:15,359 --> 00:17:18,879 Speaker 1: inflation expectations. Are you saying this further to go, that 323 00:17:18,920 --> 00:17:20,720 Speaker 1: this is the market plan catch up in the world 324 00:17:20,720 --> 00:17:23,480 Speaker 1: that you think is there? Yeah? I think that you 325 00:17:23,520 --> 00:17:27,680 Speaker 1: know the underlying deflationary forces of there. I I sir, 326 00:17:28,080 --> 00:17:30,479 Speaker 1: first talked about these and wrote a book in nine 327 00:17:31,040 --> 00:17:33,840 Speaker 1: one about this. It's it's been a long term unwinding. 328 00:17:34,200 --> 00:17:36,320 Speaker 1: But you get a lot of random noise. You've got 329 00:17:36,359 --> 00:17:41,040 Speaker 1: things happening on a daily, weekly, monthly, uh even quarterly basis. 330 00:17:41,400 --> 00:17:45,639 Speaker 1: But then you see the underlying trends come up and 331 00:17:45,640 --> 00:17:48,160 Speaker 1: it's it's very cyclical, but it's I would say, it's 332 00:17:48,200 --> 00:17:51,800 Speaker 1: a it's a saw tooth pattern along our declining trend 333 00:17:51,840 --> 00:17:56,480 Speaker 1: of inflation. How do you parse wage inflation? There's wages 334 00:17:56,520 --> 00:17:59,800 Speaker 1: are benefits? In your forty page research note you always 335 00:18:00,400 --> 00:18:05,920 Speaker 1: labor into price change. Is there legitimate wage inflation when 336 00:18:05,920 --> 00:18:08,200 Speaker 1: you look at wages and benefits? Think the E C 337 00:18:08,400 --> 00:18:12,440 Speaker 1: I series? Now there there? Really? There? Really isn't. Now? 338 00:18:12,440 --> 00:18:14,240 Speaker 1: There a lot of reasons for that. I mean, you 339 00:18:14,240 --> 00:18:16,720 Speaker 1: can you can find any series you want to prove anything, 340 00:18:17,119 --> 00:18:19,080 Speaker 1: but we have a number of things that are going on. 341 00:18:19,520 --> 00:18:24,120 Speaker 1: First and foremost is globalization, probably the most important phenomenon 342 00:18:24,119 --> 00:18:26,720 Speaker 1: on the global scene in the last thirty years. And 343 00:18:26,760 --> 00:18:29,520 Speaker 1: it really amounts to, among other things, that transfer massive 344 00:18:29,560 --> 00:18:34,120 Speaker 1: transfer of manufacturing other production jobs out of North American 345 00:18:34,200 --> 00:18:38,440 Speaker 1: Europe to China and elsewhere in Asia. And that's hugely inflationary. 346 00:18:38,640 --> 00:18:42,160 Speaker 1: Then you've got other factors like like the uberization, if 347 00:18:42,160 --> 00:18:47,159 Speaker 1: you will, people trading off freedom of hours for lower pay. Um. 348 00:18:47,440 --> 00:18:50,439 Speaker 1: You've got unionization, you know, you go back, you go 349 00:18:50,480 --> 00:18:54,880 Speaker 1: back to early seventies percent of the private sector was unionized, 350 00:18:54,920 --> 00:18:58,120 Speaker 1: now at seven percent, and even the public sector unionization 351 00:18:58,200 --> 00:19:00,920 Speaker 1: is declining. And that's and they they get paid much 352 00:19:00,960 --> 00:19:04,800 Speaker 1: more um. And uh, you look at you look at 353 00:19:04,840 --> 00:19:08,639 Speaker 1: what people are doing in terms of the private activity. Uh, 354 00:19:08,760 --> 00:19:10,760 Speaker 1: a lot of people are really scratching. So you just 355 00:19:10,880 --> 00:19:13,920 Speaker 1: you just don't have inflation in the wage sector of 356 00:19:14,000 --> 00:19:17,320 Speaker 1: the fet is. Fet is obviously, uh, finally coming around 357 00:19:17,359 --> 00:19:19,560 Speaker 1: the fact that that what didn't happen. But they were 358 00:19:19,560 --> 00:19:22,159 Speaker 1: fighting that because they look at the unemployment rate. But 359 00:19:22,200 --> 00:19:25,480 Speaker 1: the unemployment rate doesn't doesn't measure anything, It doesn't measure 360 00:19:25,520 --> 00:19:27,840 Speaker 1: all the people have dropped out we're coming back into 361 00:19:27,840 --> 00:19:30,000 Speaker 1: the labor force. If you're just joining us, Gary showing 362 00:19:30,040 --> 00:19:32,640 Speaker 1: of a Gary shilling company for years with Merrill Lynch 363 00:19:32,760 --> 00:19:37,560 Speaker 1: and definitive on believing in a lower interest rate structure? 364 00:19:37,600 --> 00:19:39,280 Speaker 1: What do you make of the yield curve has become 365 00:19:39,280 --> 00:19:41,679 Speaker 1: a parlor game. My problem is most of the people 366 00:19:42,040 --> 00:19:44,879 Speaker 1: talking about the yield curve didn't read for BOSI and 367 00:19:44,920 --> 00:19:49,320 Speaker 1: they didn't read the dynamics and the multi factor reality 368 00:19:49,440 --> 00:19:52,359 Speaker 1: of a yield curve. How should we look at the 369 00:19:52,400 --> 00:19:55,760 Speaker 1: yield curve? Doctor showing, Well, the yield curve is statistics, 370 00:19:55,840 --> 00:19:58,280 Speaker 1: and the statistics are every time you get the yeld 371 00:19:58,320 --> 00:20:00,680 Speaker 1: curve inverted. And most people look at the two year 372 00:20:00,920 --> 00:20:04,600 Speaker 1: treasury note versus a tenure when it you can look 373 00:20:04,600 --> 00:20:06,639 Speaker 1: at you can look at bills, you can look at 374 00:20:06,720 --> 00:20:09,280 Speaker 1: two to five, you can look at two to tens. 375 00:20:09,800 --> 00:20:12,200 Speaker 1: You know, I just I just I don't have any 376 00:20:12,200 --> 00:20:14,159 Speaker 1: particular pick. But you have to talk about two to 377 00:20:14,240 --> 00:20:16,919 Speaker 1: ten because mostly people talk about But the point is 378 00:20:17,440 --> 00:20:20,040 Speaker 1: that it isn't that's a statistic. A question is why 379 00:20:20,080 --> 00:20:23,359 Speaker 1: does that happen. What happens is the FED is raising 380 00:20:23,480 --> 00:20:27,440 Speaker 1: race and there is a spillover from from uh FED 381 00:20:27,520 --> 00:20:31,840 Speaker 1: funds rake to the to the tenure yield, but on 382 00:20:31,880 --> 00:20:34,560 Speaker 1: the post, over the whole post or a period the average, 383 00:20:34,560 --> 00:20:37,240 Speaker 1: for a hundred basis point increase in FED funds, you 384 00:20:37,359 --> 00:20:40,520 Speaker 1: get a forty four basis point increase in the tenure. 385 00:20:40,560 --> 00:20:42,280 Speaker 1: In other words, you don't get anything like a one 386 00:20:42,320 --> 00:20:45,120 Speaker 1: to one pass through to begin with. And also right 387 00:20:45,160 --> 00:20:47,560 Speaker 1: now the FED has been raising races, and I think 388 00:20:47,920 --> 00:20:50,240 Speaker 1: that investors are looking out and they're saying, wait a minute, 389 00:20:50,240 --> 00:20:52,680 Speaker 1: there's there's more deflation out there. I don't think this 390 00:20:52,800 --> 00:20:56,439 Speaker 1: economy is that strong, So you're not getting anything like 391 00:20:56,480 --> 00:20:58,359 Speaker 1: a pass through on the on the long end. In 392 00:20:58,359 --> 00:21:01,439 Speaker 1: other words, it's the reality and the yield curve. But 393 00:21:01,440 --> 00:21:03,320 Speaker 1: but the point is that every time the yield curve 394 00:21:03,440 --> 00:21:07,280 Speaker 1: is has invoted has inverted since the early fifties, you've 395 00:21:07,280 --> 00:21:10,040 Speaker 1: had a recession, no exceptions. There is some real debate 396 00:21:10,080 --> 00:21:13,000 Speaker 1: over the signal the time of rising that we should 397 00:21:13,000 --> 00:21:15,520 Speaker 1: really pay attention to. Maybe it's two years for looking 398 00:21:15,520 --> 00:21:17,760 Speaker 1: at some very specific part of the yield curve. What 399 00:21:17,840 --> 00:21:21,200 Speaker 1: about the consequences. What are the consequences of a flat 400 00:21:21,280 --> 00:21:23,679 Speaker 1: yield curve regardless of what it signals? What are the 401 00:21:23,720 --> 00:21:26,040 Speaker 1: consequences of it. Well, it's not very good for spread 402 00:21:26,160 --> 00:21:29,240 Speaker 1: lenders to begin with, and you see what happened to 403 00:21:29,280 --> 00:21:32,720 Speaker 1: bank banksto actual lately. I mean, obviously you simply do 404 00:21:32,800 --> 00:21:36,879 Speaker 1: not have that opportunity to to borrow short land long 405 00:21:37,720 --> 00:21:41,240 Speaker 1: But beyond that, I think it's more in indication of 406 00:21:41,840 --> 00:21:45,760 Speaker 1: what's going on in the economy and investor sentiment. UH 407 00:21:45,960 --> 00:21:48,879 Speaker 1: the Fed on the wind in and bond biers on 408 00:21:48,920 --> 00:21:50,679 Speaker 1: the other end. But if we're interested in the signal, 409 00:21:51,080 --> 00:21:53,080 Speaker 1: I think it is important to realize that the Federal 410 00:21:53,080 --> 00:21:56,200 Speaker 1: Reserve and global central banks have deeply depressed the term premium, 411 00:21:56,720 --> 00:21:59,480 Speaker 1: and therefore I would imagine that you would invert earlier 412 00:21:59,520 --> 00:22:02,600 Speaker 1: than you other white Wood because of that. Yeah, that 413 00:22:02,840 --> 00:22:05,000 Speaker 1: that certainly is a point, and you know, a lot 414 00:22:05,000 --> 00:22:07,800 Speaker 1: of a lot of people in effects say, well, it's 415 00:22:07,840 --> 00:22:11,359 Speaker 1: been the flood of of central bank money which is 416 00:22:11,400 --> 00:22:14,040 Speaker 1: held down long rates, and therefore you get the inversion. 417 00:22:14,119 --> 00:22:17,199 Speaker 1: It may not may not mean anything, but you know, 418 00:22:17,280 --> 00:22:19,280 Speaker 1: you can you can explain your way in or out 419 00:22:19,280 --> 00:22:22,119 Speaker 1: of any statistics. And I don't put full faith in 420 00:22:22,160 --> 00:22:24,399 Speaker 1: the Yelk curve. I mean, I've got a list of 421 00:22:24,560 --> 00:22:28,920 Speaker 1: thirteen UH indicators of a recession coming. None of them 422 00:22:28,920 --> 00:22:31,840 Speaker 1: are really definitive. But you know, the stock market selling off, 423 00:22:31,880 --> 00:22:36,600 Speaker 1: the YELD curve close to inversion, consumers very optimistic. Uh. 424 00:22:36,760 --> 00:22:38,239 Speaker 1: You know, You've got a number of things that are 425 00:22:38,359 --> 00:22:42,680 Speaker 1: very typical at jobs, but there isn't one standing out 426 00:22:42,760 --> 00:22:45,360 Speaker 1: right now that says we're gonna have a recession immediately, 427 00:22:45,680 --> 00:22:50,040 Speaker 1: showing thank you so much, showing company, thanks, great research 428 00:22:50,119 --> 00:23:05,920 Speaker 1: as well. Whatever the president wants doesn't seem to materialize. 429 00:23:05,920 --> 00:23:10,119 Speaker 1: President Donald Trump, of course, looking for a new chief 430 00:23:10,240 --> 00:23:12,159 Speaker 1: of staff and here to tell us all about the 431 00:23:12,160 --> 00:23:17,119 Speaker 1: shake up in the White House. Cheryl Bolan Bloomberg Government 432 00:23:17,359 --> 00:23:21,679 Speaker 1: White House reporter, Cheryl, do you have a special scorecard 433 00:23:22,160 --> 00:23:25,720 Speaker 1: that you use to keep track of all the possibilities 434 00:23:25,760 --> 00:23:30,960 Speaker 1: and perhaps even the betting odds of who gets what job? No? 435 00:23:31,400 --> 00:23:33,720 Speaker 1: I think I could. I could make some money though, 436 00:23:33,760 --> 00:23:37,280 Speaker 1: because the lists are long and the odds are are crazy. 437 00:23:37,400 --> 00:23:41,040 Speaker 1: But so, what's the latest? So a lot of drama 438 00:23:41,119 --> 00:23:45,680 Speaker 1: over the weekend. Um. The drama really started on Saturday 439 00:23:45,720 --> 00:23:49,800 Speaker 1: when President Trump told reporters that his chief of staff 440 00:23:49,920 --> 00:23:52,960 Speaker 1: John Kelly, would be gone by the end of this year, 441 00:23:53,920 --> 00:23:57,680 Speaker 1: but didn't say who would replace him. Um. Now, the President, 442 00:23:57,800 --> 00:24:01,159 Speaker 1: we know had been in talks with Nick Ayers, who 443 00:24:01,320 --> 00:24:04,840 Speaker 1: is chief of staff to Vice President Mike Pence. But 444 00:24:05,000 --> 00:24:08,359 Speaker 1: by Sunday afternoon, Airs had taken himself out of the 445 00:24:08,440 --> 00:24:12,119 Speaker 1: running by tweet saying that he too would be departing 446 00:24:12,520 --> 00:24:15,640 Speaker 1: the White House by the end of the year. So 447 00:24:15,800 --> 00:24:18,240 Speaker 1: Kelly and Airs are just the latest to leave this 448 00:24:18,320 --> 00:24:23,000 Speaker 1: administration UM, which has really seen unprecedented turnover. What are 449 00:24:23,040 --> 00:24:25,439 Speaker 1: we doing Monday morning? What's the president doing right now? 450 00:24:26,880 --> 00:24:29,280 Speaker 1: So there is a list right now, a lot of 451 00:24:29,359 --> 00:24:35,840 Speaker 1: rumored replacements. So one of them that a lot of 452 00:24:35,840 --> 00:24:41,040 Speaker 1: people are looking at. Representative Mark Meadows, Congressman from North Carolina. 453 00:24:41,119 --> 00:24:45,760 Speaker 1: He is chairman of the Conservative House Freedom Caucus UM 454 00:24:45,800 --> 00:24:50,199 Speaker 1: a long time rumored Office of Management and Budget Director 455 00:24:50,359 --> 00:24:54,440 Speaker 1: mc mulvaney is on the list. The US Trade Representative 456 00:24:55,000 --> 00:24:59,480 Speaker 1: Robert Leitheiser UM, the acting Attorney General right now, Matthew Whittaker. 457 00:25:00,119 --> 00:25:04,080 Speaker 1: There could be others, but really, uh, it's it's kind 458 00:25:04,080 --> 00:25:07,119 Speaker 1: of a free for all right now. And what's the 459 00:25:07,200 --> 00:25:09,720 Speaker 1: betting on. Well, maybe it's a more of a short thing. 460 00:25:09,840 --> 00:25:13,560 Speaker 1: But the US Ambassador to the United Nations, that seems 461 00:25:13,560 --> 00:25:17,320 Speaker 1: a little more straightforward right now. That was another change 462 00:25:17,440 --> 00:25:21,720 Speaker 1: that was announced on Friday. UM. Trump has already announced 463 00:25:21,760 --> 00:25:26,040 Speaker 1: that he is going to be nominating a State Department spokeswoman, 464 00:25:26,440 --> 00:25:29,879 Speaker 1: Heather now Are, to be the next US Ambassador to 465 00:25:29,920 --> 00:25:34,000 Speaker 1: the United Nations UM. If she's confirmed, she would replace 466 00:25:34,080 --> 00:25:36,920 Speaker 1: NICKI Haley, who said earlier this fall that she would 467 00:25:36,920 --> 00:25:39,680 Speaker 1: be gone by the end of the year. UM. Now, 468 00:25:39,800 --> 00:25:43,359 Speaker 1: the one of the challenges is that now it doesn't 469 00:25:43,440 --> 00:25:50,880 Speaker 1: have really any diplomatic or quart experience, UM, but there is. 470 00:25:51,160 --> 00:25:54,359 Speaker 1: It's looking like that to sort of compensate that post 471 00:25:54,400 --> 00:25:58,359 Speaker 1: maybe turned into a subcabinet position. Could you can you 472 00:25:58,680 --> 00:26:01,280 Speaker 1: just we gotta run here? But can you sure? I'll 473 00:26:01,359 --> 00:26:07,359 Speaker 1: explain what a chief of staff actually does? Really, the 474 00:26:07,359 --> 00:26:09,800 Speaker 1: biggest thing in chief of staff does is keep the 475 00:26:09,800 --> 00:26:15,400 Speaker 1: trains running on time, UM. Really controlling the president's time, meetings, 476 00:26:15,480 --> 00:26:19,159 Speaker 1: who he meets with, what information he sees. Okay, why 477 00:26:19,200 --> 00:26:22,960 Speaker 1: would this why would this be any different than General Kelly? Why? 478 00:26:22,960 --> 00:26:25,120 Speaker 1: Why were we Why would there be a change here? 479 00:26:27,000 --> 00:26:30,120 Speaker 1: I'm sorry, a change change in the process. I mean, 480 00:26:30,119 --> 00:26:33,760 Speaker 1: the president has his process with his chief of staff. 481 00:26:34,320 --> 00:26:36,119 Speaker 1: Is this going to be a different process with the 482 00:26:36,160 --> 00:26:38,800 Speaker 1: new chief of staff? It could be, and it really 483 00:26:38,840 --> 00:26:45,440 Speaker 1: depends on the personality of whoever is put into that position. UM. 484 00:26:45,680 --> 00:26:49,359 Speaker 1: Rans previous who is who is President Trump's first chief 485 00:26:49,400 --> 00:26:53,320 Speaker 1: of staff? Uh, you know, really allowed a lot more 486 00:26:53,600 --> 00:26:57,840 Speaker 1: free flow of people coming into the open office. UM. 487 00:26:57,920 --> 00:27:01,200 Speaker 1: John Kelly was was brought in to restore a little 488 00:27:01,240 --> 00:27:05,240 Speaker 1: more discipline and to keep keep people from just sort 489 00:27:05,240 --> 00:27:10,520 Speaker 1: of wandering in and out. Um, restore a little more order. Um. Really, 490 00:27:10,560 --> 00:27:14,800 Speaker 1: the next chief of staff is going to have a 491 00:27:14,880 --> 00:27:18,520 Speaker 1: challenge of trying to, uh, to keep a little control 492 00:27:18,560 --> 00:27:21,360 Speaker 1: over this president who obviously likes to set his own schedule, 493 00:27:21,800 --> 00:27:24,440 Speaker 1: do his own thing. UM, so that he's got to 494 00:27:24,480 --> 00:27:27,280 Speaker 1: find that balance to to keep the president happy but 495 00:27:27,400 --> 00:27:31,600 Speaker 1: also make sure that the work gets done. Thank you 496 00:27:31,680 --> 00:27:35,199 Speaker 1: very much for being with us. Excellent Cheryl Bowing Bloomberg 497 00:27:35,440 --> 00:27:38,720 Speaker 1: Government White House reporter, and I think she's gonna be 498 00:27:38,760 --> 00:27:40,720 Speaker 1: busy for the rest of the week just trying to 499 00:27:40,800 --> 00:27:48,359 Speaker 1: keep all of the names and potential roles straight. Thanks 500 00:27:48,400 --> 00:27:52,639 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 501 00:27:52,880 --> 00:27:58,240 Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform 502 00:27:58,320 --> 00:28:01,919 Speaker 1: you prefer. I'm on Twitter her at Tom Keene. Before 503 00:28:01,960 --> 00:28:05,800 Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg 504 00:28:05,880 --> 00:28:06,160 Speaker 1: Radio