WEBVTT - Bloomberg's Coleman-Lochner on Sears, Gordon on Clinton (Audio)

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<v Speaker 1>I'm Charlie Peblett, and that's a Bloomberg Business flash. This

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<v Speaker 1>is taking stock with Pim Box and Kathleen Hays on

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<v Speaker 1>Bloomberg Radio. Sears Holdings. What is left of Sears Holdings

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<v Speaker 1>after the CFO departs and Eddie Lampert, who controls Sears Holdings,

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<v Speaker 1>decides to perhaps put the brands of Ken Moore, die

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<v Speaker 1>Hard and Craftsman on the auction block. Let's find out

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<v Speaker 1>more From Lauren Coleman Lochner, retail reporter for Bloomberg News. Lauren,

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<v Speaker 1>thanks very much for coming in. Much appreciate it. All right,

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<v Speaker 1>so give us the news. Tell us what's going on. Sure, So,

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<v Speaker 1>Sears for the last few years has been selling or

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<v Speaker 1>spinning off assets. Um as it's been burning through quite

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<v Speaker 1>a bit of cash. It's was more than two billion

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<v Speaker 1>in cash burn last year. So they're just not funding

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<v Speaker 1>the operations. Um they need to go to outside sources

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<v Speaker 1>of money. The stores sales declining sales, UH, same store sales,

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<v Speaker 1>which is a measure that we look at since it met,

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<v Speaker 1>you know, it's like it's apples to apples. They've been declining.

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<v Speaker 1>I think it's been every quarter but one since the

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<v Speaker 1>company's merged. So operationally, they've had a lot of problems

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<v Speaker 1>and they've tried a lot of things, but nothing that

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<v Speaker 1>they've tried is really managed to turn the business around.

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<v Speaker 1>So what is the problem here? I love the way

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<v Speaker 1>you start your story today. You say, you know Sears

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<v Speaker 1>chief executive officer Eddie Lampert is in a bad spot

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<v Speaker 1>when he's considering selling off three of the retailer's crown jewels,

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<v Speaker 1>Ken More Craftsman, and I heard, look, he's like cutting

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<v Speaker 1>off the arms, arms and legs pretty soon. You know,

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<v Speaker 1>what do you have left to stand on? Right? Because

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<v Speaker 1>you have the licensing stream of revenue from those brands. Now, um,

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<v Speaker 1>they did look a couple of years ago at exploring

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<v Speaker 1>outside companies licensing the brands as well, but then you're

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<v Speaker 1>giving people less of a reason to come into your

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<v Speaker 1>own store. Worse, Sears is still the major appliance seller

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<v Speaker 1>and Ken Moore is a big draw for customers. If

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<v Speaker 1>you don't have that, it's you know, you could sell

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<v Speaker 1>it in license at bat too. But if you don't

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<v Speaker 1>have that, what do you have to bring people in there?

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<v Speaker 1>Not coming in for clothing. That's not an area that

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<v Speaker 1>they've been able to fix. They've been struggling on most fronts,

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<v Speaker 1>most categories ever since the company has merged, and even

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<v Speaker 1>before Sears and Kmart were merged, Lauren I was looking

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<v Speaker 1>at the details of things like ken More products and

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<v Speaker 1>so on. They're made by Whirlpool, ge Panissan. They don't

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<v Speaker 1>make any of this, They just put their brand on it.

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<v Speaker 1>Now they may have some unique features tea so UM,

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<v Speaker 1>it's all contained in this special purpose vehicle, this k

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<v Speaker 1>C D I P Intellectual Property LLC. Who do you

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<v Speaker 1>think's gonna buy it? I mean, who would be interested?

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<v Speaker 1>Husky Apex Tool Group makes some of the tools, so right,

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<v Speaker 1>you might. You know. What's been suggested to me is

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<v Speaker 1>that you might have manufacturers UM looking at some of

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<v Speaker 1>these brands. UM. In terms of the tools, at least

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<v Speaker 1>batteries is tough. It's really almost a commod commodity these days.

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<v Speaker 1>UM as far as the appliances go. One thought has

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<v Speaker 1>been that you could have a retailer like home Depot,

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<v Speaker 1>which now has its own brands, but this would be

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<v Speaker 1>a draw and it's a successful retailer, and that this

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<v Speaker 1>could really revitalize the brands. Now, we don't know whether

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<v Speaker 1>they're going to sell these, and Sears has put a

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<v Speaker 1>lot of stuff on the block where you know it

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<v Speaker 1>hasn't completed the transaction, or it's you know, done something

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<v Speaker 1>different like spinning off the entity instead. So it's possible

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<v Speaker 1>that nothing will happen as well. But Eddie Lamport will

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<v Speaker 1>stay in his seat running the company and just keep

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<v Speaker 1>selling things off until there's nothing left to sell. Is that? Oh?

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<v Speaker 1>They you know, they're they're really emptying the shelves here. Um,

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<v Speaker 1>there isn't a lot left. There are a lot of

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<v Speaker 1>stores still left. They only put about two fifty into

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<v Speaker 1>the into the red that they spun off last year,

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<v Speaker 1>but those were two fifty of their best stores. They

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<v Speaker 1>have some other stores pledged um already, so the value

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<v Speaker 1>of the remaining real estate is probably not as strong

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<v Speaker 1>as what's already been spun or pledged elsewhere. Well, um,

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<v Speaker 1>we'll see what happens next. I'm sure you'll be back soon.

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<v Speaker 1>Though it seems like this is the story. Is that

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<v Speaker 1>the plot is thickening, So it seems Lauren Colemanlauter, thank

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<v Speaker 1>you so very much for joining US retail reporter for

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<v Speaker 1>Bloomberg News, reporting on Stears plans to considering options for

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<v Speaker 1>Ken Moore, Craftsman, and die Hard, some of its most

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<v Speaker 1>iconic brands, to politics. We go taking a look at

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<v Speaker 1>some of the comments that the President Obama made at

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<v Speaker 1>the G seven meeting in Japan about Hillary Clinton's emails,

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<v Speaker 1>also about Donald Trump. Craig Gordon joins us now managing

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<v Speaker 1>editor for Bloomberg Editorial in Washington. Craig, Welcome to the show. Hey,

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<v Speaker 1>thanks for having me so, uh, you know, it's interesting.

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<v Speaker 1>I think people were waiting to hear the president asked

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<v Speaker 1>at that press conference today some questions about G seven

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<v Speaker 1>ministers and economies, but a lot of political questions. What

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<v Speaker 1>did you make about his comments on Hillary Clinton's emails.

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<v Speaker 1>I mean, look, this has been an uncomfortable topic for

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<v Speaker 1>the Obama administration. I think they know what that report

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<v Speaker 1>says that she obviously did not really follow the rules

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<v Speaker 1>and actually took some steps that we now know from

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<v Speaker 1>this report where she cut some corners for the sake

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<v Speaker 1>of privacy, for the sake of her emails not being

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<v Speaker 1>archived for all eternity and different things. This is not

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<v Speaker 1>something that President Barack Obama really wants to stand up

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<v Speaker 1>there and have to defend and have to, you know,

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<v Speaker 1>sort of answer for, because it really he has said

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<v Speaker 1>in prior things that he did not he would not

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<v Speaker 1>have done it this way he had wished, you know,

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<v Speaker 1>says she could have done it differently. So it puts

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<v Speaker 1>Obama in a very tough spot. Obviously, he's a loyal Democrat.

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<v Speaker 1>He would like Hillary Clinton succeed him versus Donald Trump.

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<v Speaker 1>So he has to walk a very fine line. But

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<v Speaker 1>I don't think the White House is enjoying having to

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<v Speaker 1>defend email practices by Hillary Clinton that they actually don't

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<v Speaker 1>agree with themselves. Craig, can you comment on Bernie Sanders

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<v Speaker 1>and what he's trying to do with the convention committee

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<v Speaker 1>and the various platforms that the Democratic Party will have

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<v Speaker 1>to adopt. Yeah. Sure, I mean, look at every national

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<v Speaker 1>political convention, each party adopts a party platform that is

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<v Speaker 1>supposed to be sort of the guiding principles, the bedrock

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<v Speaker 1>principles of that political party. Um, Bernie Sanders, you know,

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<v Speaker 1>I think even Bernie Sanders is that he's a little surprised.

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<v Speaker 1>And when he started running for president, he really was

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<v Speaker 1>just trying to influence the conversation. He was trying to

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<v Speaker 1>pull the party towards the left, toward the liberal side

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<v Speaker 1>of the spectrum. Um in the eventual nominee, of course,

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<v Speaker 1>he ended up coming much closer to winning than even

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<v Speaker 1>he might have expected. But at the end of the day,

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<v Speaker 1>this always was about getting more progressive policies into the

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<v Speaker 1>party conversation and eventually into the party platform. Things like

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<v Speaker 1>a fifteen dollar minimum wage nationally, things like you know,

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<v Speaker 1>fully paid college, things like fully paid healthcare. And so

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<v Speaker 1>right now, look, you know, Hilly Clinton is within a

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<v Speaker 1>hundred delegates of being the nominee. The Democratic Party officially

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<v Speaker 1>shall clear that bar easily in California and June seventh, um,

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<v Speaker 1>So Bernie Sanders at this point, you know, he can

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<v Speaker 1>say he's still in the race a little bitter end,

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<v Speaker 1>but he But can he influence the platform perhaps in

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<v Speaker 1>foreign policy? Uh, that's a little trickier. I think he

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<v Speaker 1>I think he is mostly interested in the domestic policies.

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<v Speaker 1>I think he's mostly interested in trying to get the

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<v Speaker 1>Democratic Party to be the Democratic Party, perhaps the FDR,

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<v Speaker 1>you know, sort of that that old that thing where

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<v Speaker 1>the government is truly providing for people a living wage, healthcare, education,

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<v Speaker 1>all of those things. He has talked less about foreign

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<v Speaker 1>policy doing the campaign, just by nature of it. But

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<v Speaker 1>he so his money focuses on domestic and I think

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<v Speaker 1>you will see a Democratic Party platform that sounds a

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<v Speaker 1>lot like Bernie Sanders party platform because frankly, it doesn't

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<v Speaker 1>really cost Hilly Clint anything to have it in the platform,

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<v Speaker 1>and nobody, we blunt, nobody really reads the platform. After

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<v Speaker 1>the conventions over, Bernie can declare, when Clinton can declare,

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<v Speaker 1>she kept Bernie happy and hopefully Bernie supporters come onto

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<v Speaker 1>her side. That would be the ultimate endgame failure Clinton.

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<v Speaker 1>Some interesting comments from President Obama when it comes to

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<v Speaker 1>Donald Trump, and of course Trump saying today he'd be

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<v Speaker 1>delighted to debate Bernie Sanders. Uh. Donald President Obama saying

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<v Speaker 1>that world leaders are rattled by the prospect of a

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<v Speaker 1>Trump presidency, and Donald Trump shoots back that it's good

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<v Speaker 1>to be uh rattled in a friendly way. Were you

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<v Speaker 1>surprised to hear the president speaking this way of Trump,

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<v Speaker 1>although you know he is sitting down with leaders from

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<v Speaker 1>all over the world. Yeah. And it's interesting because a

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<v Speaker 1>lot of our Bloomberg reporters and editors, we we sort

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<v Speaker 1>of get these reports back in Washington that they'll go

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<v Speaker 1>interview off in the CEO or the kind of folks

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<v Speaker 1>that Bloomberg obviously would interview and they all are a

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<v Speaker 1>bit of gas that was happening in America. They're sort

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<v Speaker 1>of puzzled and looked to our reporters to try to

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<v Speaker 1>explain it, and and even some of us in Washington

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<v Speaker 1>are still trying to explain to ourselves. So I'm not

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<v Speaker 1>surprised that that sentiment is out there, and nor am

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<v Speaker 1>I surprised that Barack Obama's talking about it. Um. I

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<v Speaker 1>actually think that he is. Um. He is sort of

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<v Speaker 1>frustrated that what he thinks has been some bridges bridge

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<v Speaker 1>building that he's done in his eight years in office.

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<v Speaker 1>You know that it seems like Donald Trump is plating

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<v Speaker 1>stick of dynamite under those bridges, and I think he's

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<v Speaker 1>frustrated about that, And I think as he gets closer

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<v Speaker 1>to the end of his term, he will feel, you know,

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<v Speaker 1>freer and freer almost at every passing day to say

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<v Speaker 1>that about Donald Trump. He's made comments like this before.

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<v Speaker 1>This is obviously a very high profile international setting, so

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<v Speaker 1>it's a little bit unusual maybe to hear the president

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<v Speaker 1>talk about domestic politics and a foreign trip. But no,

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<v Speaker 1>I think he's made it very clear that he is

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<v Speaker 1>troubled by Trump. He is worried that he will diminish

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<v Speaker 1>US influence in the world and actually damage, you know,

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<v Speaker 1>damage our prospects abroad. That that's Barack Obama's opinion. He's

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<v Speaker 1>he's certainly entitled to it, and he feels more free

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<v Speaker 1>every day to share it with us. Craig Gordon, thank

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<v Speaker 1>you very much for sharing all this information with us.

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<v Speaker 1>Managing editor, Bloomberg News, Washington d C. Bureau. You're listening

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<v Speaker 1>to Taking Stock on pim Fox, my co host Kathleen Hayes,

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<v Speaker 1>Craig Gordon speaking about Trump crossing the delicate threshold and

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<v Speaker 1>Clinton emails and the fallout from that Inspector General report.

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<v Speaker 1>This is Bloomberg Radio.