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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether at the grocery store or

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Speaker 1: the trading floor. Find the Bloomberg P and L Podcast

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Speaker 1: on iTunes, SoundCloud and at Bloomberg dot com. Let's turn

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Speaker 1: our attention now to the world of international trade with

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Speaker 1: Robert Lawrence. He is Professor of International Trade and Investment

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Speaker 1: at the John F. Kennedy School of Government at Harvard University.

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Speaker 1: He's also a Senior Fellow at the Peterson Institute for

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Speaker 1: International Economics. He's also a former economic advisor to President

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Speaker 1: Bill Clinton. Joining us from Boston home to Bloomberg t D.

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Speaker 1: Robert Lawrence, How are you, sir? I'm very good. Thank

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Speaker 1: you all right? So, what you know if you are

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Speaker 1: going to be a trade advisor to foreign governments, particularly

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Speaker 1: a China right now, what would you be telling them

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Speaker 1: about the direction of U. S Trade policy? Well, I

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Speaker 1: tell them that they have to take uh President Trump

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Speaker 1: very seriously because although you need the Congress to approve

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Speaker 1: trade agreements unilaterally, on his own, the President has the

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Speaker 1: executive power to withdraw from trade agreements that the United

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Speaker 1: States assigned. So UM, I do think they have to

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Speaker 1: take him his his his threats seriously, although it's still

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Speaker 1: there's still a huge amount of uncertainty is exactly what

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Speaker 1: he intends to do, uh, Professor Lawrence, there's a lot

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Speaker 1: of discussion about t p P and NAFTA when we

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Speaker 1: talk about t p P UH, which provisions are sort

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Speaker 1: of most important to highly to understand what the substance

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Speaker 1: of this would mean and kind of how this would

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Speaker 1: affect specific trade relationships with specific countries. Well, t p

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Speaker 1: P is is now basically dead because the US is

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Speaker 1: not going to participate in it, UH, and there's not

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Speaker 1: going to be no vote UH in this Congress. But

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Speaker 1: the basic idea of t p P was to have

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Speaker 1: very deep connections and to facilitate international trade among twelve

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Speaker 1: twelve countries. The most important for US would have been Japan. UM.

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Speaker 1: There the provisions eventually would have implemented free trade in

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Speaker 1: goods and in many services and also facilitated investment by

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Speaker 1: firms by US firms abroad and foreign firms in the

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Speaker 1: United States. Professor I just sorry this, I just want

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Speaker 1: to keep focused for a second on China for just

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Speaker 1: a moment here, because you know, China is attending obviously

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Speaker 1: the Asia Pacific Economic Cooperation Summit that's taking place in

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Speaker 1: uh in Lima, Peru. Um, is there a chance that

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Speaker 1: China will become the most obvious and dominant economic power

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Speaker 1: when it comes to global trade because they've also moved

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Speaker 1: to international transactions in Yuan in Ramindi, and we've got

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Speaker 1: a counterweight to the World Bank and perhaps even in

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Speaker 1: the International Monetary Fund. Yes, So in addition to all

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Speaker 1: those other institutions which China has founded and is now

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Speaker 1: taking a leadership role, what the failure of passing TPP

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Speaker 1: will mean is basically that the Asian economies will be

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Speaker 1: increasingly relying on China for leadership in the trading system.

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Speaker 1: There's a lot of disenchantment with globalization in Europe and

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Speaker 1: we've seen Brexit and now we see it in the

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Speaker 1: United States, but that's not true of the Asians. And

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Speaker 1: many of those countries in t p p UH showed

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Speaker 1: a willingness to open their economies to each other and

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Speaker 1: they will continue I be eaves to pursue free trade agreements.

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Speaker 1: But now these are going to be under the aegis

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Speaker 1: of of China, who was originally excluded from our TPP.

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Speaker 1: But they've already launched a massive negotiations UH called our CEP,

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Speaker 1: where India, China and other Asian economies are going to

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Speaker 1: liberalize their trade and investment. Does that mean that they're

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Speaker 1: going to charge tariffs on goods coming from the US?

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Speaker 1: Precisely American goods. They all lower their tariffs against UH

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Speaker 1: their own goods, on their own goods and so, but

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Speaker 1: American goods are going to face higher tariffs. So when

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Speaker 1: we try to sell in Japan, for instance, it's likely

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Speaker 1: we'll have to our goods will have high tariffs on them,

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Speaker 1: whereas other Asian products won't have to pay the tariffs.

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Speaker 1: So there's some news that just came in this morning

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Speaker 1: that Senate Democrats elected New York Senator Chuck Schumer to

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Speaker 1: be a minority leader. I believe that he has been

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Speaker 1: prod these trade agreements. UM. Is there any chance that

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Speaker 1: some of the aspects of the now dead t p

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Speaker 1: P UH could be salvaged? Well, I I doubt it

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Speaker 1: because it is UH. It's a very extensive package and

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Speaker 1: lots of parts depended on other parts. In other words,

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Speaker 1: some countries made concessions in some areas, but they were

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Speaker 1: looking for concessions reciprocally, and I think a lot of

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Speaker 1: them were motivated by uh improved entry into the US marketplace.

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Speaker 1: And so we drove that negotiation. It's going to be

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Speaker 1: very difficult, I think, just to take to pick and

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Speaker 1: choose certain parts of the agreement. Robert Lawrence, would you

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Speaker 1: say that there's going to be a trade war between

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Speaker 1: the United States and other countries? Well, I I think

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Speaker 1: before we get to the war, what we're going to

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Speaker 1: have is a huge amount of uncertainty. You know, we

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Speaker 1: have our economy, say, and the Mexican economy are intertwined products. UH,

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Speaker 1: final products are made up of components from both sides

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Speaker 1: of the border, and if you affirm on either side

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Speaker 1: of the border, you have a great deal uncertainty as

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Speaker 1: to what are the rules of the game going to be.

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Speaker 1: And the result is we're going to see a depression

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Speaker 1: in investments on both sides of the border. So I

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Speaker 1: think it's so that's the first phase is going to

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Speaker 1: be a huge amount of uncertainty if we do enter

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Speaker 1: into negotiations. UH, it's possible that we could withdraw from

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Speaker 1: from NAFTA, we would raise tariffs on Mexican products. They

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Speaker 1: would raise tariffs on our products. Now, ironically, the PASO

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Speaker 1: is weakened considerably, So actually the greatest manipulator of exchange

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Speaker 1: rates today. The process that's weakening foreign currencies and strengthening

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Speaker 1: the US dollar are the prospect of of of of

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Speaker 1: a trade war. So if China does sort of take

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Speaker 1: the lead in Asia and there is more free trade

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Speaker 1: in that region, how big of a hit could the U. S.

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Speaker 1: Economy take as a result. Well, I think it could be.

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Speaker 1: It could be very damaging. There are estimates, you know,

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Speaker 1: it's it's the trade WARUM requires a lot of imagination.

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Speaker 1: How what do we what measures do we take? What

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Speaker 1: measures do they take. I think there's just a fundamental

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Speaker 1: lack of appreciation of the degree as I said, to

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Speaker 1: which we have, UH, we're part of global supply chains.

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Speaker 1: Two thirds of all of our imports are not finished products,

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Speaker 1: and so when we impose tariffs on those imports, we're

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Speaker 1: going to hurt production in the United States. So I

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Speaker 1: think there will be a hit from that. UM In general,

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Speaker 1: what people are looking at is a weakening of the U. S.

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Speaker 1: Economy from the trade side, with a hope that the

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Speaker 1: infrastruct just spending on the tax cuts will upset them.

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Speaker 1: Robert Lawrence, thank you so much for being with us.

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Speaker 1: Robert Lawrence, Professor of International Trade and Investment at the

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Speaker 1: JFK School of Government at Harvard University. This is Bloomberg,

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Speaker 1: or let's turn our attention now to the oil industry.

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Speaker 1: NIMEX crude is up about a half a percent right now.

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Speaker 1: Taking a look at oil, We've got Javier Blass. He

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Speaker 1: is the chief energy correspondent for Bloomberg and he joins

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Speaker 1: us from London. Javier, thank you very much for being

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Speaker 1: with us. Tell us a little bit about the context

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Speaker 1: of oil trading right now. Is everyone waiting for that

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Speaker 1: OPEC meeting. Everyone is waiting for the OPEC meeting November,

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Speaker 1: but also looking at the diplomatic activity that the Oil

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Speaker 1: Group is a display in this week, We're going to

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Speaker 1: have several oil ministers, including the minister from Saudi Arabia

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Speaker 1: in event in Doha, Qatar, having informal discussions ahead of

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Speaker 1: that meeting. And what we are gathering now is a

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Speaker 1: big effort over the last three days and continuing over

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Speaker 1: the next ten days to try to reach an agreement.

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Speaker 1: Really seems that OPEC is trying hard to get all

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Speaker 1: the ministers talking to each other and trying to breage

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Speaker 1: the differences, but they're still as we are today. There

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Speaker 1: is no deal to reduce production and try to increase prices.

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Speaker 1: How has Donald trump selection as the next US president

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Speaker 1: affected the dynamic here? I mean he said some some

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Speaker 1: some negative things about the US agreement with Iran and

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Speaker 1: and possibly has raised the spector of further sanctions. I mean,

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Speaker 1: does this Does this play into the negotiations at all?

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Speaker 1: I think that they plays at least on this on

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Speaker 1: the psychological background of the negotiations. For sure, the Iranian

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Speaker 1: negotiation is going to be thinking what he's gonna be

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Speaker 1: coming next year in terms of oil oil sanstions from

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Speaker 1: the United States, and whether the hand is weaker or

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Speaker 1: stronger with Trump in in the White House. I have

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Speaker 1: been talking to traders. There are many different views about

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Speaker 1: what this could make for the Iranians, for the Iranian

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Speaker 1: negotiation position, but certainly it looks like more oil coming

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Speaker 1: from Iraq is going to be more difficult next year.

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Speaker 1: But also the other big problem for OPEC is that

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Speaker 1: Trump has talked about US oil independence a big support

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Speaker 1: for the domestic oil industry and that could be a

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Speaker 1: source of competition for OPEC. So you are OPEC, you

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Speaker 1: can think, now do we cut production, increased prices juice

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Speaker 1: as a new president which friendlier to the domestic US

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Speaker 1: industry is coming, because what you could do is basically

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Speaker 1: bankroll the shale producers in the United States. So certainly

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Speaker 1: it changed completely the dynamics within OPEC, both internal negotiations

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Speaker 1: and relationship between Iran and Saudi Arabia, but also the

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Speaker 1: view of the group of what is happening in the

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Speaker 1: United States. Well, have you let's stay in the United

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Speaker 1: States for just a moment and give us your thoughts

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Speaker 1: on increased activity in construction of pipelines, for example the

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Speaker 1: Keystone Excel pipeline. Well, we're probably are gonna see the

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Speaker 1: new the president elect Donald Trump green line new pipelines.

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Speaker 1: That could mean more Canadian crude oil coming into the

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Speaker 1: market in the next few years. Uh E couldming also

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Speaker 1: that US shell producers enjoy better prices because they can

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Speaker 1: easily sell their crude oil without having to rely on

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Speaker 1: trains and tracks to move the crude. So in general,

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Speaker 1: more pipelines and a presidency of Donald Trump means higher

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Speaker 1: production from Canada, higher production from the United States. But

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Speaker 1: this will take time. A pipeline doesn't build overnight, and

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Speaker 1: a production decisions are not make overnight. So we're talking

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Speaker 1: about probably twenty eighteen the earliest where we're going to

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Speaker 1: see impact, and probably is more a question of two

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Speaker 1: thousand and nineteen. So we're talking about the supply side.

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Speaker 1: What about the demand side. I mean, it seems like

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Speaker 1: people are thinking that perhaps demand for oil will increase

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Speaker 1: as there is less emphasis on environmental regulations and carbon caps.

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Speaker 1: It could be very well be the case for the

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Speaker 1: United States, but also Donald Trump presidency, particularly some of

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Speaker 1: his promises on trade come through our particularly negative for China,

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Speaker 1: India and other American countries. Those are the countries that

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Speaker 1: they're the real engine of global oil demand. That's that's

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Speaker 1: where drivers are buying new cars, that's where motorcycles have

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Speaker 1: been added to the two the roads every day. So

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Speaker 1: if it's a Trump presidency means a lower economic growth

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Speaker 1: in American countries in general, that's very negative for oil

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Speaker 1: for oil demand, Yes, there will be a positive in

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Speaker 1: the United States that probably less regulation could mean a

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Speaker 1: healthier or a more stronger increase in oil demand, but

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Speaker 1: certainly China and India are the big, the big, the

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Speaker 1: big warriors here. Howevier could this also be reflected in

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Speaker 1: changes to the standards for miles per for US automakers,

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Speaker 1: if indeed they are at least repealed or health current levels.

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Speaker 1: Will that affect people's driving habits and therefore the use

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Speaker 1: of gasoline? It could be very well. And what we

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Speaker 1: have seen already is that the lowest gasoline prices in

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Speaker 1: the United States in twelve years this driving season during

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Speaker 1: the summer holidays, US drivers enjoyed the lowest prices have

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Speaker 1: to go back to the early two thousands to find

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Speaker 1: lower prices. That is meaning that actually the drivers are

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Speaker 1: buying a lot of larger cars. UH. The share of

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Speaker 1: s ubs in total sales of passenger cars have increased

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Speaker 1: to about sixty that is contrary to what the government

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Speaker 1: was predicting that it was more or less around forty percent.

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Speaker 1: So the decisions that the U S consumers are already

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Speaker 1: taking are moving us into that direction of larger cars,

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Speaker 1: and even the subs of today a lot a lot

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Speaker 1: more efficient that they were ten years ago. That's meaning

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Speaker 1: that the MPG rate, it's outlining and he's actually decreasing

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Speaker 1: contrary to what the Obama administration was trying to achieve.

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Speaker 1: Xavier Blast, thank you so much for joining us. Have

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Speaker 1: your Blast chief Energy correspondent for b London for Bloomberg

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Speaker 1: coming to us from London. All right, we want Lowell

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Speaker 1: euro to put his knowledge to work. He is the

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Speaker 1: head of multi Asset Solutions at b MO Global Asset Management,

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Speaker 1: where he helps oversee two hundred and thirty three billion

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Speaker 1: dollars BEMO, you're the name, you're the word. All right,

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Speaker 1: little tell us. Have you told clients they should change

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Speaker 1: anything in their investment allocation? No, we haven't. In fact,

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Speaker 1: we're looking at an environment that is very well set

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Speaker 1: up for further upside and equity, particularly UH in the US.

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Speaker 1: The one area that we've been very cautious about, and

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Speaker 1: the one area that this election in the US has

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Speaker 1: UH taken folks eyes off the ball on is with

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Speaker 1: what's going on in Europe. And so we've all been

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Speaker 1: focused on the US election, and what we've been ignoring

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Speaker 1: and we think are potentially bigger risks are the elections

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Speaker 1: going on in Europe, and starting with the Italian referendum,

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Speaker 1: in December. Then moving into the first quarter, you've got

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Speaker 1: the Dutch elections, the French election, and the big election

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Speaker 1: next year. To watch is what goes on with Angela

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Speaker 1: Merkel in Germany, and those could rewrite the playbook in Europe.

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Speaker 1: I want I want to get to Europe in a second,

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Speaker 1: but I wanna just press you a little bit on

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Speaker 1: what you're talking about with stocks, particularly US stocks. One

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Speaker 1: of the big argument for why stocks were rallying is

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Speaker 1: that bond deals were so low and benchmark rates were

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Speaker 1: so low, uh that there was no alternative. People were

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Speaker 1: going into stocks for dividends, and they were considering them

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Speaker 1: a proxy almost for bonds, because at least you were

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Speaker 1: getting more income from the dividends than you were from

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Speaker 1: uh some benchmark bonds. That's going away as bond yields rise.

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Speaker 1: Isn't that going to be a big effect. We don't

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Speaker 1: think so. Um. If you look at just the fundamentals

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Speaker 1: and evaluations, you know, you could argue that US equities

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Speaker 1: are a bit expensive, but history would show us that

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Speaker 1: at the levels they're trading at today, historically you still

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Speaker 1: get pretty decent returns out of equities. Now we might

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Speaker 1: not be talking about the nine returns that investors have

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Speaker 1: been used over the last thirty years. But a five

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Speaker 1: to six percent return out of equity should be very

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Speaker 1: good in the context of low BONN yields still and

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Speaker 1: potentially higher bonields moving higher. Could you just explain you

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Speaker 1: said earlier that you think that stocks are poised for

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Speaker 1: another leg up. Why is that, Well, you've got a

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Speaker 1: couple of things. You've got a environment that is going

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Speaker 1: to be UM supportive of growth. So some of the

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Speaker 1: policies that are trickling to the top that are that

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Speaker 1: Obama Trump is focusing on, uh, that are supportive to

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Speaker 1: growth are the tax policy, less regulation UM, and greater

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Speaker 1: fiscal spending. And those are very strong supporters to potentially

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Speaker 1: top line growth, which has been missing throughout this entire recovery.

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Speaker 1: So those are really good drivers of further growth. UM.

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Speaker 1: So let's let's go Let's go back now to what

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Speaker 1: you're talking about with Europe, because uh, certainly within the

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Speaker 1: bond world, we're hearing a lot of concern about Italy

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Speaker 1: and you're seeing yields on Italian and Portuguese bonds rise

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Speaker 1: considerably just in preparation for what is to come. How

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Speaker 1: will investors in the US feel the effects of some

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Speaker 1: of these elections. If say, uh, the Italian voters do

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Speaker 1: vote no on the referendum, or you know, if on

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Speaker 1: glammercal is not anymore the president or the the head

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Speaker 1: of Germany, Well you don't have to look too far

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Speaker 1: back to get an sense as to how problems in

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Speaker 1: Europe have manifested in US equity. So go back to

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Speaker 1: the summers of two thou thirteen, go back to the

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Speaker 1: summers where we debated about what was going to happen

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Speaker 1: with Greece. So specific to the Italian elections, You've got

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Speaker 1: a situation here with a lot of the progress have

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Speaker 1: been made with fixing the Italian banks gets thrown and

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Speaker 1: turned on its head, and that could put further scare

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Speaker 1: into the election elements earlier coming up. And you might

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Speaker 1: have this situation where the euro which many have been

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Speaker 1: calling and we might agree under this march that we're

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Speaker 1: taking here from these elections, really gets called into question.

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Speaker 1: It's a sustainability of euro and the unwinding of that

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Speaker 1: will cause chaos that will be definitely felt in the

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Speaker 1: United States. Well, well, you know, I was just to

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Speaker 1: take your three points right regulation you say, okay, a

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Speaker 1: rollback of regulations. Well, if those regulations were put in

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Speaker 1: place after the debacle of two thousand eight two thousand

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Speaker 1: uh two recession, you could argue that not having those

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Speaker 1: regulations may have contributed to that debacle. Plus, you talk

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Speaker 1: about tax policy, there's no real indication about where the

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Speaker 1: extra revenue is going to come from in order to

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Speaker 1: pay for any of this. And then you said stimulus

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Speaker 1: that kind of combines with tax policy. How are we

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Speaker 1: going to afford this? Yeah, And I think that's where

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Speaker 1: I think we need to watch where um the potential

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Speaker 1: for threatening the needle, where you can provide enough infrastructure

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Speaker 1: spending without alienating the far right Tea Party folks that

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Speaker 1: have been, you know, advocating for balanced budgets and on

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Speaker 1: what every mind. Then the bond vigilantes, right, people in

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Speaker 1: the bond market. We saw that just recently bond yields increasing.

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Speaker 1: People don't want to hold those bonds. Well, certain people

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Speaker 1: don't want to hold the bonds. Don't forget how many

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Speaker 1: investors want to hold US treasuries. So you've got foreign

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Speaker 1: buyers of treasuries that look at these yields and say

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Speaker 1: they're very attractive you've got pension plans that have been

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Speaker 1: waiting for years for yields to move up so they

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Speaker 1: can immunize their liabilities. And so you've got a lot

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Speaker 1: of buyers that will naturally come into the market as

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Speaker 1: yields go higher. Hurts stocks, not necessarily because they're not

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Speaker 1: rotating necessarily massively out of stocks. Although you know what

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Speaker 1: you were talking about in Europe, should the euro unravel,

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Speaker 1: the dollar will become even more of a haven trade,

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Speaker 1: right perhaps you know, I think you know, as we've

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Speaker 1: seen in this situation, the yend is becoming the safe

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Speaker 1: haven trade, and potentially the swissy becomes the safe haven trade.

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Speaker 1: But but by my point being that this could even

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Speaker 1: support another leg up in the dollar, you know, strengthening

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Speaker 1: against other comfortable currencies, and couldn't that slow growth and

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Speaker 1: sort of add a drag effect to US stocks. It could,

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Speaker 1: But let's look back at periods where we've had a

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Speaker 1: strong dollar before we're stocked have done very very well.

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Speaker 1: So if you go back to the ninety nine in use,

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Speaker 1: where the dollar had this regime change and a large

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Speaker 1: move up, U S equities outperformed non US equities significantly,

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Speaker 1: and so we don't want to get two caught into

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Speaker 1: these you know rules of thumb where a strong dollar

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Speaker 1: is all of a sudden bad for stocks. If you

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Speaker 1: have a strong dollar with growth and potential wild card

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Speaker 1: up potentially productivity games, this could be a very good

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Speaker 1: environment for stocks. I have to wait and see what happens, right,

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Speaker 1: I mean, that's the key thing. But you say right now,

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Speaker 1: no change, don't don't, don't do anything drastic to your portfolio.

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Speaker 1: Don't change your asset allocation, and you're You're in good company.

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Speaker 1: A lot of people are saying the same thing. It's

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Speaker 1: hard to sort of make concrete moves based on a

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Speaker 1: lot of speculation. Lower Euro head of multi Asset Solutions

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Speaker 1: at b MO Global Asset Management, which oversees two dty

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Speaker 1: three billion dollars. Luckily, he is in Chicago and can

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Speaker 1: avoid the gridlock that we are seeing in Midtown Manhattan

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Speaker 1: around the Trump Tower. So we wish you a safe

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Speaker 1: travels back to Chicago. We are starting to have a

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Speaker 1: sense of what we can imagine from uh. The Senate.

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Speaker 1: Senate Republicans re elected Mitch McConnell of Kentucky on Wednesday

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Speaker 1: to be a majority leader next year. Also, the Democrats

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Speaker 1: UH selected Chuck Schumer, a New York's state Democrat, to

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Speaker 1: be the most powerful Democrat in the Senate. Um, I

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Speaker 1: want to bring in Mark Niquette of Bloomberg Politics team

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Speaker 1: here and Mark, what are these appointments? Tell us about

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Speaker 1: the direction? Is anything surprising, particularly with Chuck Schumer's UH

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Speaker 1: coming in and replacing the former leadership. No, I think

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Speaker 1: that's sort of what was expected to happen. You know,

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Speaker 1: certainly we thought the Republican leadership wouldn't change, and you

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Speaker 1: know there were signs, you know, with Harry read leaving

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Speaker 1: that Chuck Schumer was a mind to become minority leader

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Speaker 1: and majority leader actually if the Democrats had managed to

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Speaker 1: take control of the Senate during the elections. Mark, tell

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Speaker 1: us a little bit about who is vying for various

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Speaker 1: spots in a Trump administration. Well, we're here all kinds

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Speaker 1: of names being floated about, and maybe one of the

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Speaker 1: most interesting ones is Ted Cruz, the Texas senator who

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Speaker 1: competed hard, obviously for the presidential nomination against Trump. And

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Speaker 1: you know, um, you know, with with Trump, you know,

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Speaker 1: calling him lying Ted constantly, and you know Cruz um

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Speaker 1: with the last day UH of his campaign actually was

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Speaker 1: was Indiana and I was there, and he essentially had

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Speaker 1: this press conference where he you know, claimed that he would,

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Speaker 1: you know, the civilization as we know it would end

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Speaker 1: if they nominated Trump and about never to support him.

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Speaker 1: Will Now he's being considered, we're told, for attorney general possibly,

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Speaker 1: and his name has also been thrown out as a

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Speaker 1: potential Supreme Court appointment. So we're seeing a lot of

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Speaker 1: people sort of you know, work their way through Trump

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Speaker 1: Tower during this vetting processes of deciding on names, and

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Speaker 1: you know, it's a little unclear at this point who's

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Speaker 1: actually being seriously considered and who's just being sort of

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Speaker 1: trotted out there in front of the reporters. Um Mark,

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Speaker 1: you know, ford a bunch of stories about sort of

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Speaker 1: the push pull between people who are saying, uh, we're

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Speaker 1: established people in Washington, d C. And we don't want

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Speaker 1: to serve in the Trump administration and others saying we're

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Speaker 1: established people in in DC and we think it's important

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Speaker 1: to serve in the Trump as administration administration regardless of

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Speaker 1: what we think about um some of what he said

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Speaker 1: on the campaign trail, what do you hear from people

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Speaker 1: as far as the vast majority of people who are

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Speaker 1: longtime Washington operatives, and whether or not they're willing to serve, Well,

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Speaker 1: there's sometimes there's just a fundamental um um, you know,

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Speaker 1: put contention between wanting to have a job and you know,

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Speaker 1: be involved in the administration and sort of the principles.

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Speaker 1: You know, like you said of maybe in the past

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Speaker 1: saying you would never serve whether Trump or you can't fathom,

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Speaker 1: you know, some of his policies. So I think what

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Speaker 1: we're seeing going on, frankly, is you know some folks

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Speaker 1: thinking about, well, do I want to be have a

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Speaker 1: seat at the table with this new administration, even if

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Speaker 1: I have reservations or are my objections to the policies

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Speaker 1: or the proposals or the you know, the presidency itself

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Speaker 1: of Donald Trump just so disqualifying. I can't even consider

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Speaker 1: consider serving. Mark. Is it a foregone conclusion that Republicans

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Speaker 1: will rubber stamp whatever Donald Trump wants in terms of

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Speaker 1: people and policies, Not at all. Just like we're sort

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Speaker 1: of un sure and certain about you know, who Donald

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Speaker 1: Trump will actually end up appointing to some of these

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Speaker 1: key positions. You know, there's no, it's not a foregone conclusion.

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Speaker 1: They'll all get a smooth sale and through confirmation in

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Speaker 1: the Senate um. You know, the the margin is still

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Speaker 1: pretty narrow. Republicans only have a edge in UM control

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Speaker 1: of the Senate. And you know, you know, assume the Democrats,

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Speaker 1: you know, don't go along. We don't know exactly how

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Speaker 1: they're going to play all these individual appointments. We have

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Speaker 1: Republicans who have not been enamored of Trump and you know,

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Speaker 1: have a right opposed him during the primary, the nominating

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Speaker 1: process UM and have already been on record UM saying

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Speaker 1: they might not support some of the names that are

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Speaker 1: being floated. Ran Paul for example, the Kentucky Center said

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Speaker 1: that if you know, former Ambassador John Bolton or former

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Speaker 1: New York mayor Rudy Giuliani get tapped as Secretary of State,

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Speaker 1: you know he can't go along with that. So the

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Speaker 1: question will be how much how united are both the

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Speaker 1: Republicans and the Democrats on various appointments. And you know,

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Speaker 1: if we see, you know, the willingness of either Democrats

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Speaker 1: to break ranks or you know, Republicans you just can't

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Speaker 1: go along, we might have some some nasty fights for confirmation.

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Speaker 1: So at this point, I mean normally when a new

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Speaker 1: president elect starts preparing for his administration. Are there basic

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Speaker 1: sort of mundane aspects of how the government operates that

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Speaker 1: he needs to get in order before he uh takes

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Speaker 1: the oath in January? Yes, and there's also certain sort

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Speaker 1: of you know key you know, almost routine UM procedures

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Speaker 1: for the transfer of power. You know, for example, there's

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Speaker 1: a non disclosure agreement that the incoming folks and the

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Speaker 1: current administration signed just so that the inner workings of

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Speaker 1: government aren't exposed. Well, in form nation is being shared

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Speaker 1: to the incoming administration and teams are being put together

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Speaker 1: what we're told that was not signed until last night,

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Speaker 1: essentially that you know, we had to shake up in

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Speaker 1: the transition team for Donald Trump or Chris Christie was

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Speaker 1: shown the door in in UH on Friday and Mike

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Speaker 1: Pence came in while apparently nobody signed this letter until

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Speaker 1: yesterday with Mike Pence heading the transition. So consequently we

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Speaker 1: lost you know, three or four days there where information

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Speaker 1: was not shared from the administration side to the incoming

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Speaker 1: Trump teams looking at key areas like foreign um relations

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Speaker 1: and you know, even internal agency type information. UM. So

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Speaker 1: it's been you know, probably the most charitable word to

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Speaker 1: describe the transition so far has been chaotic. Thanks for

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Speaker 1: listening to the Bloomberg P and L podcast. You can

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Speaker 1: subscribe and listen to interviews at iTunes, SoundCloud, or whatever

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Speaker 1: podcast platform you prefer. I'm Pim Fox. I'm out there

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Speaker 1: on Twitter at Tim Fox. I'm out there on Twitter

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Speaker 1: at Lisa Abramo. It's one before the podcast. You can

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Speaker 1: always catch us worldwide on Bloomberg Radio