Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.
Speaker 1: Along with my co host Lisa Bramowitz. Each day we
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Speaker 1: are here live from the Bloomberg Invest Conference at Bloomberg's
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Speaker 1: This is the big week, the week when we're finally
Speaker 1: going to hear some of these details about President Trump's
Speaker 1: infrastructure spending plan and to break down exactly what we
Speaker 1: can expect and what potential opportunities there are for private investors.
Speaker 1: Glenn young Ken is here to make it all makes
Speaker 1: sense for me anyway, President and Chief operating Officer of
Speaker 1: the Carlisle Group, and he joins us here in our
Speaker 1: Bloomberg headquarters. Glenn, let's start with good morning, good morning,
Speaker 1: thank you for joining me. Let's start with the idea
Speaker 1: of this two hundred billion dollars of federal money and
Speaker 1: eight hundred billion dollars of private money that comes in
Speaker 1: because these private investors are promised incentives. What are these incentives? Yeah,
Speaker 1: I actually think, um, the incentives are going to be
Speaker 1: more for the jurisdictions that take on new projects. So
Speaker 1: how's this really going to work? Um, First, the government's
Speaker 1: incentives are going to be are going to be put
Speaker 1: in place so that cities and states could actually earn
Speaker 1: a bonus if they take on public private partnerships for
Speaker 1: critical assets. So, for example, if you're the mayor of
Speaker 1: a city and you have an airport, and you have
Speaker 1: big plans for that airport, and you actually put it
Speaker 1: into a public private partnership process and bring in private
Speaker 1: capital to fund the expansion of that airport, and oh,
Speaker 1: by the way, most likely receive a payment up front. Um,
Speaker 1: the government will in fact provide an incremental incentive on
Speaker 1: top of that for the city. The city then has
Speaker 1: the capital that they liberated from that airport plus incremental
Speaker 1: capital from the government to invest in new things. All right,
Speaker 1: back up, when you say they get this extra incentive,
Speaker 1: they get this extra bonus. That money is coming from somewhere.
Speaker 1: Where does that come from? Does that mean higher tolls.
Speaker 1: Does that mean higher taxes federally? Well, first of all,
Speaker 1: the two hundred billion was in the president's plan that
Speaker 1: they submitted two weeks ago, which was a ten year
Speaker 1: a ten year a budget frame plus a ten year forecast.
Speaker 1: And it's over the ten year period the two billion
Speaker 1: um and they actually hope to liberate more than eight
Speaker 1: hundred billion. They hope to actually attract a billion trillion
Speaker 1: I'm sorry, they hope to attract a trillion into this
Speaker 1: and so, which I actually think they will because the
Speaker 1: asset base that the private sector has a chance to
Speaker 1: invest in is already existing. Very interesting fact, just in
Speaker 1: the airports alone in the United States today, which are
Speaker 1: up and running commercial entities, right They get landing fees,
Speaker 1: they have passenger traffic, they have restaurants and shopping in them.
Speaker 1: There's there's an estimate that that's already a half a
Speaker 1: trillion of value that exists in just airports in the
Speaker 1: United States today. Okay, so I love the idea of
Speaker 1: liberating cash. By the way that my mind is going wild,
Speaker 1: but I'm trying to understand, uh, this idea of attracting
Speaker 1: when trillion dollars in investment capital. It seems like private
Speaker 1: equity firms in particular, which are despot for opportunities in
Speaker 1: this overvalued market, at least ind of some. I'm surprised
Speaker 1: that there haven't already been more investments made in infrastructure.
Speaker 1: And if they're not, are there structural reasons as to
Speaker 1: why not? For example, whether it's certain interests or whether
Speaker 1: it's certain obstacles that are just physical. You can't construct
Speaker 1: a new airport when there's one that needs to operate,
Speaker 1: right at least that's It's a great question, and I
Speaker 1: think there's two primary um factors to make sure we
Speaker 1: look at first. Outside of the United States, this concept
Speaker 1: has flourished so in Europe, in Canada, and particularly in Australia.
Speaker 1: The concept of bringing private investors into infrastructure and have
Speaker 1: them almost recapitalize that infrastructure in a partnership with the
Speaker 1: government has flourished for years and years and years. It
Speaker 1: hasn't happened here because there's been a hesitancy to actually
Speaker 1: take on what is something new, because there's been this
Speaker 1: expectation that the government is just gonna pay for it.
Speaker 1: We'll don't worry, We're just gonna pay for it. And
Speaker 1: the reality today is we can't afford to pay for
Speaker 1: it any longer. There are critical infrastructure needs that the
Speaker 1: government can pay for, but it can't pay for the
Speaker 1: two trillion dollar gap that exists today in our infrastructure requirements.
Speaker 1: And so it is the need to actually uncover this
Speaker 1: new technique for this country. And it's not perfectly new,
Speaker 1: because we've done a few already that in fact will
Speaker 1: will gain some momentum and actually begin to start filling
Speaker 1: that gap. So, Carlisle overseas about a hundred and sixty
Speaker 1: two billion dollars of assets. How much money do you
Speaker 1: expect Carlyle to invest should this plan come to fruition
Speaker 1: in infrastructure. That's that's that's a very nice direct question,
Speaker 1: and so I'm going to dodge it a little bit.
Speaker 1: I imagine that you would find a way. But we
Speaker 1: in fact, we in fact have funds and are raising funds,
Speaker 1: and so in energy and infrastructure today we manage across
Speaker 1: equity and debt capital about twenty eight billion dollars. Infrastructure
Speaker 1: needs extend from energy infrastructure to airports, to toll roads,
Speaker 1: to telecom infrastructure, and so the depth of this market
Speaker 1: is big. It's big, and so what I think what
Speaker 1: we're gonna end up seeing, however, is a few key
Speaker 1: critical projects out front that blaze a trail. Airports. Airports
Speaker 1: particularly because they're commercial entities that are up and running
Speaker 1: there and as a result, people understand them. They've been
Speaker 1: done in other countries, um, and that to me is
Speaker 1: a decision that a mayor can make and the f
Speaker 1: a A can make and they don't really need government
Speaker 1: intervention from the from Washington to do this. And that's
Speaker 1: the great part about A Reports today. This is a
Speaker 1: fascinating conversation. I could speak with you all morning because
Speaker 1: it really highlights a lot of interesting angles such as
Speaker 1: if you do have airports that are successful at pairing
Speaker 1: partner private and public money, then what does this lead
Speaker 1: to next? But unfortunately have to leave their Glenn at Calfkin,
Speaker 1: thank you so much for joining us at President and
Speaker 1: chief operating Officer at the Carlyle Group. It's private equity
Speaker 1: firm that oversees a hundred and sixty two billion dollars
Speaker 1: in Washington, d C. We are broadcasting alive from the
Speaker 1: Bloomberg Invest Conference at Bloomberg's New York City headquarters. Coverage
Speaker 1: of the Bloomberg Invest Conference on Bloomberg Radio is brought
Speaker 1: to you by s EI And of course no investing
Speaker 1: conference or conversation would be complete unless we addressed the
Speaker 1: big elephant in the room, which is passive investing and
Speaker 1: the shift that's been going on. Moody's put out our
Speaker 1: report earlier. This you're saying the passive investing will overtake
Speaker 1: active management by twenty twenty four in the US. From
Speaker 1: more perspective on this, I want to bring in Christie Mitchem.
Speaker 1: She is chief executive officer of Will's Fargo Asset Management,
Speaker 1: which has four hundred and eighty billion dollars of assets
Speaker 1: under management and is based in San Francisco, which has
Speaker 1: much better weather than there is in New York City.
Speaker 1: Yet today and yet here she is and she joins
Speaker 1: us here in New York. Christie, thank you so much. UM.
Speaker 1: You know, we hear so much about this accelerating shift
Speaker 1: to passive management, particularly with respect to equities. Uh is
Speaker 1: now any different? I mean, it's time with such low volatility,
Speaker 1: won't this just absolutely accelerate? You know? I think today
Speaker 1: is different, and I think one of the things that
Speaker 1: investors may be missing that really sits below overall low
Speaker 1: volatility levels is a real c shift in the marketplace,
Speaker 1: and that's a change in the para wise correlation between stocks.
Speaker 1: You know, we saw that correlation actually hit a low
Speaker 1: in January of this year after hitting a high back
Speaker 1: in two thousand twelves. Hold on sec let's just back up.
Speaker 1: In other words, the correlation between stocks, all stocks moving
Speaker 1: in tandem broke down earlier this year reach the lowest
Speaker 1: point ever. It reached the lowest points since two thousand
Speaker 1: eight in the Lehman bankruptcy. So a really big shift
Speaker 1: um and one of the things that's really characterized the
Speaker 1: big market rally that we've seen since the global financial
Speaker 1: crisis has been strong correlations that's changing and that presents
Speaker 1: real opportunities for active managers. Let me just give you
Speaker 1: a playbook from from what we're seeing in terms of
Speaker 1: our own stable of managers. Since the beginning of the year,
Speaker 1: seventy of our active managers are outperforming their respective benchmarks.
Speaker 1: And just to put that in perspective, they're outperforming by
Speaker 1: a lot. On average asset weighted outperforming respective benchmarks by
Speaker 1: over seventy five basis points. Is that including fees or
Speaker 1: not including that is after fees, that is after fees. Okay,
Speaker 1: and this is the biggest out performance in a while
Speaker 1: that you've seen. Absolutely, I mean, two thousand thirteen to
Speaker 1: two thousand sixteen really difficult years for active managers. The
Speaker 1: number of active managers out performing in the large caps
Speaker 1: ace in two thousand sixteen, that's the lowest number since
Speaker 1: n So if investors are looking for a place to
Speaker 1: put money, I think that place today is active managers.
Speaker 1: And active managers also performed better in a downturn, so
Speaker 1: it's a great way to pick up excess return today
Speaker 1: but also put a little insurance cushion inside your portfolio. Okay,
Speaker 1: So you said that seventy of Wells Fargo asset managements
Speaker 1: active fund management have been outperforming their perspective benchmarks. Have
Speaker 1: they seen inflows? Have they seen flows follow that performance?
Speaker 1: Or is is marketing still a really big issue. I
Speaker 1: still think we're a little bit late to see I
Speaker 1: mean we're a little bit early to seeing flows, you
Speaker 1: know where I think people are still really focusing on
Speaker 1: this sort of you know, um phenomena in terms of
Speaker 1: a trend towards passive investing. And that's why I think
Speaker 1: this is really an important story and a potentially important
Speaker 1: inflection point for asset management. So is there a particular
Speaker 1: equity market where you're seeing correlations breakdown even more than others? Well,
Speaker 1: I think, you know, across the board we're seeing correlations breakdown,
Speaker 1: but I think where it's particularly impactful is in the
Speaker 1: sectors where it's been difficult to outperform, and that is
Speaker 1: US large large cap and oh, by the way, that's
Speaker 1: a big part of the investors portfolio in the U
Speaker 1: S so UM. Just to sort of back up, the
Speaker 1: correlations were tightly moving together just simply because of the
Speaker 1: central banks and the fact that the Federal Reserve was
Speaker 1: basically driving all of the risk on sentiment. Now, however,
Speaker 1: it's unclear what's really driving it. And as we talk
Speaker 1: about with Dave Wilson or Bloomberg Soocks editor and calumnist,
Speaker 1: uh here uh you know, every day, you know you
Speaker 1: have big losers and big winners. How long can we
Speaker 1: continue with this type of activity and this type of
Speaker 1: dispersion before something macro kind of gets in the way
Speaker 1: and drives us all, especially with all the noise that
Speaker 1: we're hearing on the geopolitical side. Listen, I do think
Speaker 1: there is tons of noise on the geo political side. Obviously,
Speaker 1: if we just look to tomorrow, there's a lot going on.
Speaker 1: We've got Comely, we've got the ECB, we've got UK elections.
Speaker 1: I mean, there's a ton of focus on. But at
Speaker 1: the end of the day, stock market valuations and performance
Speaker 1: comes down to, you know, how our corporate earnings performing.
Speaker 1: And we've really seen, you know, really strong growth. So
Speaker 1: we look at top line growth, we're looking at numbers
Speaker 1: in the six to seven percent range um bottom line growth,
Speaker 1: you know, similar numbers, so, you know, really outstanding growth
Speaker 1: both in the top line and the bottom line compared
Speaker 1: to last year. And I think that's what's supporting the
Speaker 1: valuations that we see in the marketplace today. So a
Speaker 1: couple of years ago, there was a lot of fear
Speaker 1: among investors about rising rates and about a big sell
Speaker 1: off in markets. And at that time, liquid alternatives and
Speaker 1: other types of unconstrained funds were the rage. People piled
Speaker 1: into these things, saying, please protect me in a downturn.
Speaker 1: Not anymore? Are these things were going to be popular again? Oh?
Speaker 1: I think so. I mean, you know, I think everything
Speaker 1: has its space in the marketplace, and it has its time,
Speaker 1: and I think, you know, those products in particular, did
Speaker 1: not perform well in a market that was really doing, um,
Speaker 1: you know, quite well. Um. So I think we'll continue
Speaker 1: to see people put rainy day strategies in their portfolio portfolios,
Speaker 1: and I think that's a good thing to do. So. Um.
Speaker 1: With respect to Wells Fargo asset management, what area in
Speaker 1: asset management, uh do you see as having the biggest
Speaker 1: opportunity for potential expansion? Well, I think the biggest opportunity
Speaker 1: is undeniably multi asset class solutions. I think as investors,
Speaker 1: individual investors continue to get more sophisticated about what they
Speaker 1: want and what they need, we're going to see a
Speaker 1: world drive towards customization. You're not gonna want the market portfolio.
Speaker 1: You're gonna want a portfolio that that actually matches your
Speaker 1: specific needs, desires, and obviously liabilities, and that's going to
Speaker 1: be a big shift. I think the undeniably the biggest
Speaker 1: opportunity is multiasset class solutions and personalized investment. So what
Speaker 1: will a computer be giving me that? I think it's
Speaker 1: highly likely that a computer will be part of that solution, absolutely,
Speaker 1: and that's not a bad thing. Actually, you know, what
Speaker 1: I think, you know, robo advisory, and you know, as
Speaker 1: we call it, is actually highly enabling, right. It allows
Speaker 1: us to take the kind of insights and strategies that
Speaker 1: have typically been only accessible to the largest institution to
Speaker 1: the world and put them in the hands of individual investors.
Speaker 1: And that's an incredibly important and valuable shift. Do you
Speaker 1: think that there's any area of the market that's going
Speaker 1: to continue to shrink and will eventually become obsolete with
Speaker 1: respect to active asset management, Well, then I think we're
Speaker 1: going to continue to face pressures in the large cap
Speaker 1: marketplace as it relates to active management. I think we
Speaker 1: do see opportunities or at least in more readily available
Speaker 1: opportunities and less efficient spaces, so that small cap stocks,
Speaker 1: mid cap stocks, international stocks, emerging markets. So you know,
Speaker 1: I'm not saying it's we're not going to have to
Speaker 1: fight the good fight in large cap I think we are,
Speaker 1: and I think we'll be able to generate alpha more
Speaker 1: easily in other spaces. But I still think it has
Speaker 1: a real place in the portfolio. Christie Mitchum, thank you
Speaker 1: so much for joining us to really a question to
Speaker 1: speak with you. Christie Mitchum is chief executive officer of
Speaker 1: Wells Fargo Asset Management UH in San Francisco. It overseas
Speaker 1: four hundred and eighty billion dollars in assets and is
Speaker 1: on the forefront of this transition, this changing investment landscape
Speaker 1: that we have talked so much about. One of the
Speaker 1: things that is being talked about is the revolution that
Speaker 1: is going on in consumer lending, in particular the way
Speaker 1: that people UH investors are mining big data to get
Speaker 1: a better sense of what the potential for defaults and
Speaker 1: delinquencies could be. To get more of a sense of
Speaker 1: just where this is in the mortgage market in particular,
Speaker 1: I want to bring Emmanuel Shireff. He is executive vice
Speaker 1: president and a portfolio manager at PIMCO, which is based
Speaker 1: in Newport Beach. Emmanuel, thank you so much for joining us.
Speaker 1: So you know, we hear a lot about the ability
Speaker 1: for online lenders to mind big data and understand people's
Speaker 1: Facebook feeds and whatever else and credit scores to get
Speaker 1: a an accurate sense of whether they will default. What
Speaker 1: do you look at? What do you think is the
Speaker 1: most important online data indicator that is a deciding factor
Speaker 1: for whether somebody will make good on their bills? So
Speaker 1: thank you for having me. First of all, at PIMCO,
Speaker 1: we have been doing machine learn in big data for
Speaker 1: a very long time in the mortgage and real estate space. UM.
Speaker 1: I've been heavily involved in that. And UH We've built
Speaker 1: out a fairly significant infrastructure that allows us to gather
Speaker 1: information on local real estate markets, UM on all the
Speaker 1: mortgage performance, on consumer credits, on local demographics and economics
Speaker 1: and and and all of that, and we use that
Speaker 1: in order to build up our mortgage lending models and
Speaker 1: our mortgage performance models. UM. With with kind of Internet
Speaker 1: related big data, UH, it's worth being a little bit
Speaker 1: skeptical of some of the claims that are that are
Speaker 1: being put out there. UM. Whenever we analyze data, we
Speaker 1: spend a lot of time cleaning data, understanding the provenance
Speaker 1: of of where it comes from, how it was collected,
Speaker 1: adjusting for potential biases and other related issues that may
Speaker 1: arise with the data in order to try and extract
Speaker 1: correct UM signals from it and adjust for whatever biases
Speaker 1: may exist. And and so with a lot of online data,
Speaker 1: the collection methods are a little bit uncertain and subject
Speaker 1: to change at any time. So, for example, if you
Speaker 1: there there's a idea of vendors out there that have
Speaker 1: sprung up over the last few years selling you know,
Speaker 1: Twitter sentiments, location data, you know Facebook feed information and
Speaker 1: all of that, and the populations can change very rapidly,
Speaker 1: the methods of collection can change all the time. There's
Speaker 1: not a whole lot of history for most of these things,
Speaker 1: so it's difficult to calibrate what exactly all this information
Speaker 1: means for future mortgage performance, especially for signals that have
Speaker 1: only been around post crisis, that you have never even
Speaker 1: observed in in a high stress situation. So, um, this
Speaker 1: is fascinating. The amount of time and attention focusing on
Speaker 1: exactly where the data is from, how it's been collected,
Speaker 1: and it's track record of potential biases. I'm wondering, do
Speaker 1: you have a track record with respect to how accurate
Speaker 1: pimco's model is in predicting tolinquencies in the mortgage debt mark. Well,
Speaker 1: when you're working with long term data that has existed
Speaker 1: for some time, it's possible to back test it, to
Speaker 1: build a variety of models surrounding it. Um with with
Speaker 1: bigger data, it's much more challenging to do that, and
Speaker 1: you have to kind of depend on whether or not
Speaker 1: you've um correctly made those those adjustments. And whenever a
Speaker 1: high stress period occurs, such as it is now, you
Speaker 1: start seeing things potentially breaking down or you're forced to
Speaker 1: high stress period of time like now now as a
Speaker 1: high stress period of time, it's it's becoming a little
Speaker 1: bit more stressful. Please explain, um, So, as I think
Speaker 1: you mentioned, some of the online lenders are seeing a
Speaker 1: little bit of increases in the faults and delinquencies. So
Speaker 1: it's never been unexpected and unpleasant surprises in the prospers
Speaker 1: of the world and the lending clubs of the world,
Speaker 1: and there has been a certain wave of cynicism over
Speaker 1: some of these models correct exactly. So, so I think
Speaker 1: now they're seeing a little bit of um, maybe not
Speaker 1: stressed in the world, but stressed to their models that
Speaker 1: they have to make adjustments for. But are you seeing
Speaker 1: stressed to the underlying US mortgage market. Uh, We're still
Speaker 1: very constructive on the mortgage market, on the housing market overall.
Speaker 1: But do we do we want to talk more about
Speaker 1: big data machine learning? All right? Well, I mean with
Speaker 1: big data and machine learning, what are the signs that
Speaker 1: you look for, uh, to sort of lead up to
Speaker 1: a potential deterioration of the market. UM. So we track
Speaker 1: UM a lot of information on the local demographics and economics.
Speaker 1: We track affordability ratios, UM, we track UM. The consumer
Speaker 1: performance overall always tracked credit scores and so on. But
Speaker 1: a lot of this is built into a variety of
Speaker 1: nested models that rely on each other and build upon
Speaker 1: each other to build a complete picture of the consumer
Speaker 1: and projected mortgage performance. So in some cases the signals
Speaker 1: interact in ways that with machine learning you don't always
Speaker 1: entirely understand why a signal is showing what is showing?
Speaker 1: So how much work is done after you get you know,
Speaker 1: you put something into your model and it spits out
Speaker 1: you know six, and you look at the six and
Speaker 1: then what do you do with it? You know? I
Speaker 1: mean do do people basically do portfolio managers take the
Speaker 1: input from the models and just going directly put it
Speaker 1: out there or is there analysis and a discussion about
Speaker 1: what to do with that? The models with with any
Speaker 1: model that we use is UM. The model is just
Speaker 1: an additional tool in our toolbox that is given to
Speaker 1: the portfolio manager and the trader. So the models allow
Speaker 1: us to synthesize a huge amount of information UM in
Speaker 1: order to help us make a better investment decision more quickly. UM.
Speaker 1: But it's not making an investing decision by itself. And
Speaker 1: maybe that's part of the issue that some of the
Speaker 1: consumer lenders you mentioned are are facing. UM, that the
Speaker 1: models are effectively making decisions by themselves without additional human
Speaker 1: input or review. Do you think that social media is
Speaker 1: a viable tool to understand somebody's ability to pay their debts?
Speaker 1: I don't know. I haven't spent a lot of time
Speaker 1: looking into social media effects because on on debt repayment
Speaker 1: and some of some of them would say that, but
Speaker 1: it might also be UM might also be completely unpredicted
Speaker 1: depending on what it is that people post fascinating. I
Speaker 1: honestly this is this is an important area and it's
Speaker 1: one that an increasing number of investors are turning to UM.
Speaker 1: And just real quick, how many people do you have
Speaker 1: at PIMCO who are focusing on maintain these databases? Depending
Speaker 1: on the sector we have UM, I don't actually know
Speaker 1: how many we have in total at PIMCO. We have
Speaker 1: many dozens of people working on these things, and UH,
Speaker 1: depending on depending on the sector, there's more fewer Emmanuel Sharreff,
Speaker 1: Thank you so much for joining. Emmanuel Sharreff is executive
Speaker 1: vice president and portfolio manager at PIMCO, which is based
Speaker 1: in Newport Beach, and we are broadcasting live from the
Speaker 1: Bloomberg invest Conference at Bloomberg Bloomberg's New York City headquarters.
Speaker 1: We had some breaking news this morning. President Donald Trump
Speaker 1: tweeted I will be nominating Christopher A. Ray, a man
Speaker 1: of impeccable credentials, to be the new Director of the FBI.
Speaker 1: Details to follow. We are not going to wait for
Speaker 1: him to give us some details before getting some of
Speaker 1: our own from Larry Liebert, national Security Team editor for
Speaker 1: Bloomberg in Washington, d C. Larry, what do we know
Speaker 1: about Christopher Ray, the nominee for the new director of
Speaker 1: the FBI. Well, he's quite well known. He's a white
Speaker 1: color defense attorney now, but he served at the Justice
Speaker 1: Department for a number of years, including prosecuting the infamous
Speaker 1: in Ron uh financial scandal. UH. The initial response UH,
Speaker 1: including from some critics of President Trump, has been that
Speaker 1: he's a good, solid choice, although he didn't have specific
Speaker 1: experience as some previous FBI directors heading the agency. So UM.
Speaker 1: All in all, considered a respectable, solid choice. But uh,
Speaker 1: there'll be confirmation here he is. Well, he'll be asked
Speaker 1: a lot of tough questions, including whether um, he was
Speaker 1: promised independence by President Trump or whether President Trump asked
Speaker 1: him for loyalty as uh the fired FBI director Comey
Speaker 1: apparently alleges, Yeah, this is this is important. The other
Speaker 1: thing that I find interesting is the timing of President
Speaker 1: Trump's announcement this day before fired FBI Director James Comey
Speaker 1: is set to testify in front of Congress about his
Speaker 1: discussions with President Trump. Uh, what is the significance of this?
Speaker 1: I mean, is it just a coincidence? Has this been
Speaker 1: a word in the works for a long time, or
Speaker 1: is this a move to perhaps um pull attention away
Speaker 1: from the hearings and towards the future. Well, there's no
Speaker 1: pulling attention away for these theories where are fair enough dramatic.
Speaker 1: But I think you're right. The the President's message is
Speaker 1: returning the page. That's all history. We have chosen a
Speaker 1: new uh appropriate FBI chief that we're nominating. Let's get
Speaker 1: on with it. And that's certainly the best, politically speaking,
Speaker 1: the best message he could send. Uh. You know, there's
Speaker 1: been a lot of talk about whether he'll be able
Speaker 1: to resist tweeting all day long tomorrow Comey's testifying, But
Speaker 1: in terms of using his Twitter handle this morning, he
Speaker 1: sent an effective message show going into tomorrow's hearing. Right, Um, Larry,
Speaker 1: and before we get to getting a sense of what
Speaker 1: the big issues are tomorrow, I really want to touch
Speaker 1: on Attorney General Sessions because there are reports that he
Speaker 1: offered to resign after getting some pressure from President Trump
Speaker 1: based on his decision to accuse himself from the Russia inquiry.
Speaker 1: Do you think that this is realistic the color that
Speaker 1: you're getting from people in Washington, d C. Do they
Speaker 1: really expect that Attorney General sessions proposal might be accepted
Speaker 1: and is a realistic possibility? Well, the sets are reporters
Speaker 1: Chris Stroman and others get is that, Uh, President Trump
Speaker 1: tended to lash out at those around him when he
Speaker 1: feels they haven't come through. In this case, Uh, he's
Speaker 1: never forgiven, reportedly Attorney General Sessions for recusing himself and
Speaker 1: which led to a whole series of events, including naming
Speaker 1: a former FBI Chief of Special Prosecutor And with that
Speaker 1: kind of festering um that Attorney General Sessions said, if
Speaker 1: you'd like me to resign, I will. But I think
Speaker 1: the sense was it was more a message to the president,
Speaker 1: if I don't have your faith, I'll go, rather than
Speaker 1: a resignation we should expect in the near future. Okay,
Speaker 1: So people don't think it's realistic. They think it's more
Speaker 1: sort of a an ultimatum. Look, you have you have,
Speaker 1: you have carte launch here. Do you want me to go? Right? Exactly?
Speaker 1: And of course you never know this. This president has proven,
Speaker 1: uh if if nothing else, that he's done predictable, that
Speaker 1: he goes his own way, uh, and that he has
Speaker 1: been frustrated. He attacked the Justice Department for the revised
Speaker 1: UH travel ban that he signed uh in a tweet.
Speaker 1: And that's unprecedented. So we're always ready for surprising. All right, Larry,
Speaker 1: now to turn to the center stage event tomorrow, James
Speaker 1: Comey heading to Capitol Hill. What are the main issues
Speaker 1: that he's going to be talking about. What are the
Speaker 1: main things that people want to hear, Well, they really
Speaker 1: want to hear what he and Donald Trump discussed, As
Speaker 1: has been reported, did the President repeatedly ask him for loyalty, uh,
Speaker 1: which he apparently sidestepped. Did the president ask him, can't
Speaker 1: you let this go? After? Uh? General Flynn was fired
Speaker 1: as National Security Advisor? Uh? And did he feel that
Speaker 1: that was a clear effort in interference? Uh? And the
Speaker 1: question is, will well we hear from people familiar with
Speaker 1: UH with Comey who changed to speak? His mind is
Speaker 1: that he will recount those discussions, but he'll leave it
Speaker 1: to others to decide whether it was obstruction of justice
Speaker 1: or otherwise deeply inappropriate. Larry, does it matter? Does it
Speaker 1: matter what he says? Because let's say he says, uh,
Speaker 1: you know, anything, everything, but that it was obstruction of justice,
Speaker 1: and then it's clear that congressmen feel like it is. UM,
Speaker 1: then what Well, that's always the question because practically speaking,
Speaker 1: you know, prosecute a president but uh. And peachment is
Speaker 1: not on anybody's lips really at this point. But that
Speaker 1: would keep alive not only the investigation of Russian interference,
Speaker 1: but whether those close to the present were involved and
Speaker 1: whether there's any effort to suppress that information. So it's
Speaker 1: it's a key moment, and I should add that right
Speaker 1: now send an intelligence committee is hearing from Dan Coates,
Speaker 1: the Director of National Intelligence, and others suppressing them on
Speaker 1: their conversations with UH with President Trump, and so there's
Speaker 1: quite a build up to tomorrow's Comy testimony. Larry, your
Speaker 1: head must be spinning concertainly, Larry Liebert, thank you so
Speaker 1: much for distilling all of the activities that are going
Speaker 1: on in Washington, d C right now what we can
Speaker 1: inspect or expect for tomorrow. Larry Leebert is National Security
Speaker 1: Team editor for Bloomberg News and he is UH there
Speaker 1: in the heat of the action in Washington, d C.
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