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Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm term Keene

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Speaker 1: jay Leye. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. So

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Speaker 1: the trade story once again front and center, the clock ticking,

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Speaker 1: but President Donald Trump said he won't meet Chinese President

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Speaker 1: Jejing thing before a March first deadline to avert high

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Speaker 1: US tariffs on Chinese goods, injecting some pessimism into the market.

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Speaker 1: Global equities well on course for the first weekly drop

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Speaker 1: for this year. David Balin dropping by City Private Bank

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Speaker 1: chief investment officer here in New York. Good money to David,

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Speaker 1: Good morning to you. Your confidence not shaken, But the

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Speaker 1: last twenty four hours why not not? Really? I think

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Speaker 1: that the expectations that people had are are are probably muted.

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Speaker 1: I think that the best thing that could happen in

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Speaker 1: March is that the there's an agreement to continue to talk,

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Speaker 1: maybe an agreement on a couple of major points in

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Speaker 1: an agreement to continue to talk. The fact that Trump

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Speaker 1: is not traveling is actually a head fake takes weeks

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Speaker 1: to prepare for a president to travel abroad, and the

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Speaker 1: whole idea that was going to travel before March first

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Speaker 1: seems like a kind of a misnomer to me. Sounds clichey,

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Speaker 1: but it feels like an excuse to sell, not a reason,

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Speaker 1: and perhaps tells me a little bit more about the

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Speaker 1: low levels of conviction people have about this reabout in January, David, well,

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Speaker 1: you know, if I look at the headlines in last December,

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Speaker 1: it was the worst December in thirty years. Right in

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Speaker 1: January the best January and thirty years. I think we're

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Speaker 1: in a situation where people got well ahead of their

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Speaker 1: negativity in in in December, and they're probably very optimistic

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Speaker 1: in catching back up in January. We're going to a

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Speaker 1: more more normal, normal market environment. We're gonna see more volatility,

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Speaker 1: and we're going to see markets tend to trend up

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Speaker 1: for the remainder of the year. Frankly, though, amongst people

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Speaker 1: would say it's right to price out recession risk after

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Speaker 1: overly pricing it in through December, the argument now, I think,

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Speaker 1: is whether we should have any kind of multiple expansion

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Speaker 1: on a year where earnings are being revised lower they're

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Speaker 1: not being revised higher, and uncertainty is increasing worldwide, and

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Speaker 1: there's a real question markets to whether that feeds back

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Speaker 1: in the United States into what degree. Right, Let's let's

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Speaker 1: assume that you're right and that there is no multiple expansion.

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Speaker 1: We actually think that the US market in general, it's

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Speaker 1: going to be up in terms of earning seven. We've

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Speaker 1: taken a look at our growth statistics. Let's you know,

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Speaker 1: we think the US is a two and a half

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Speaker 1: percent grower, Emerging markets four and a half percent grower.

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Speaker 1: China is stimulating their economy at six percent grower, So

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Speaker 1: we don't see the recession that everyone is sort of

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Speaker 1: talking about as in two thousand nineteen, and maybe not

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Speaker 1: even in early two thousand and twenty. That's the blue

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Speaker 1: button right there. What's that means? That's the first time

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Speaker 1: I've been in the studios I see the blue button

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Speaker 1: is a Tottenham blue. As they take on lest is

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Speaker 1: it Lester or Luster? It's Lester. I was stopped by

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Speaker 1: John from your Castle, who said, talk up Lester Castle.

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Speaker 1: I have no I think is Dodger blue. That's Dodger blue.

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Speaker 1: It does look Dodger blue. Friends, and Lue needs a

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Speaker 1: baseball cap. Maybe we'll do that is sound confused, now,

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Speaker 1: so am I? You talk about granular fundamentals. Okay, granular fundamentals, David,

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Speaker 1: Do they come from the revenue line surprises the gloom crew,

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Speaker 1: The operating income line surprises the bloom crew. How do

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Speaker 1: you get multiple expansion? I'm not suggesting that we're going

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Speaker 1: to see a significant amount of multiple expansion. You're dealing

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Speaker 1: in what I think is pessimism, which is when will

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Speaker 1: the recession occur? And yet the data doesn't suggest that

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Speaker 1: there should. Clare agrees with you, right and so so

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Speaker 1: the so the question then is what should stocks do

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Speaker 1: if multiples don't expand? And the answer is they should

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Speaker 1: go up somewhere between eight and ten percent from where

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Speaker 1: they were let's say at the beginning of the year.

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Speaker 1: For sure, given where we started. But when you look

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Speaker 1: at global equities, travel outside of the United States, Tom,

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Speaker 1: and you're gonna see in the emerging markets, you know,

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Speaker 1: a much or robust environment right now for the much

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Speaker 1: more constructive given that rates in the United States have peaked,

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Speaker 1: this is a time when you can actually see you know,

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Speaker 1: growth in those markets come through. And John also lingoes

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Speaker 1: earlier this morning with the RBC was adamant about this

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Speaker 1: are the title shifts of em where you're gonna see

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Speaker 1: real currency dynamics that will support a more stable a

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Speaker 1: global economy. Let's fold the bond market into all of this.

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Speaker 1: And there's two ways of looking at the bond market

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Speaker 1: right now. The bullish way of looking at things for

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Speaker 1: equities to say, well, yield to low with that supportive

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Speaker 1: of equities. The negative way of looking at all of

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Speaker 1: this is saying, one on Earth, the Bundy yields doing

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Speaker 1: back at ten basis points on a German ten year

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Speaker 1: the curves negative all the way out, and then year

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Speaker 1: nine years the tenure treasury yield is now to sixty four.

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Speaker 1: That doesn't spell out a nice, good, beautiful global growth story.

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Speaker 1: How do you look at it right? It actually, Uh,

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Speaker 1: I've learned over the last ten years, certainly a city

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Speaker 1: that the bond guys tend to have it right more often.

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Speaker 1: And I want to just acknowledge that to all of

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Speaker 1: the people out there listening. This is a big statement.

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Speaker 1: They're very happy this morning because they're faster now. But

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Speaker 1: but this is the thing. It's uh, it's hard to imagine,

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Speaker 1: but if you if you look back at what the

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Speaker 1: Fed has done. They've had nine rate increases, but they've

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Speaker 1: done it over a very long period of time. Yelling

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Speaker 1: and Powell looking very similar in terms of their approach. There.

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Speaker 1: Inflation not a big deal. Unemployment you know at four percent,

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Speaker 1: these are these are positive things in terms of sustaining

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Speaker 1: an economy that's growing slowly. What you just said is

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Speaker 1: vitally important for all equity people always listen to the

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Speaker 1: bond guys, So I'll pick on Steve Major HSBC, who

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Speaker 1: looks like a genius this morning with a thirty year bond.

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Speaker 1: John two point nine eight seven three on a thirty

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Speaker 1: year bond. What do those yields signal in the bond

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Speaker 1: space for the equity space, Well, what they're signaling is

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Speaker 1: a very long term outlook of benign inflation in greater

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Speaker 1: vailue on equity cash flows, righty, cash flows on dividends,

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Speaker 1: on buy backs. If you think about where your total

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Speaker 1: return is going to be greatest over the course of

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Speaker 1: the next decade, you can't help but think that this

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Speaker 1: is going to be bullish frequities. I think he's auditioning

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Speaker 1: for the real yield job. I mean, I think you

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Speaker 1: can come on that guy on the Real Yield, which

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Speaker 1: you can see on Fridays. It would be a short

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Speaker 1: will give you ninety seconds. Seriously, the real Yield today,

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Speaker 1: he's like a real show because these are real bud yeles. Yeah,

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Speaker 1: and not just in the sovereign space, but the credit

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Speaker 1: space as well. We've just had the biggest net increased,

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Speaker 1: biggest inflows into high yield bond funds since huge amount

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Speaker 1: of money feeling against It's not just equities running away

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Speaker 1: on their own. I mean, we've had a big move,

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Speaker 1: a corresponding move in the credit spaces. While David right,

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Speaker 1: and I mean we are advising our clients now opportunistic

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Speaker 1: their core portfolios. We've moved them already into like EM

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Speaker 1: dead in some of the high yield spaces, but opportunistically

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Speaker 1: we think that EM dead in local currency is going

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Speaker 1: to turn out be a terrific opportunity because again benign

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Speaker 1: outlook for the dollar, and ultimately you're going to see uh,

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Speaker 1: you know, emerging market currencies rally. So it's a good

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Speaker 1: combination for bond invests. Assuming the FED is out of

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Speaker 1: the game, is that the central assumption here that the

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Speaker 1: Federals has done that well, not necessarily done, but very

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Speaker 1: nearly done. Like another rate rise. One more type of

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Speaker 1: thing could happen, depending on whether there's an optimistic burst

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Speaker 1: in the US, but largely done. That's right, Devin Bannon writes,

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Speaker 1: to catch you out with the City Private Bank chief

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Speaker 1: investment officer here in New York City right now, Gregg

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Speaker 1: failure joining us. He is with the Horizon Investments. And

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Speaker 1: of course let's go to the political score. Woodrow Wilson

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Speaker 1: forty or four thirty five electoral votes. Mr Roosevelt from

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Speaker 1: New York eighty eight electoral votes, William Howard Taff eight

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Speaker 1: electoral votes, and Eugene Debs Socialist, zero electoral votes. And

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Speaker 1: this is of course the election of n when yug

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Speaker 1: Villier began his work UH in political economics. Greg, it's

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Speaker 1: all the rage. I'm talking about it. Mike Allen, are

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Speaker 1: over to Axios leading with the Greg ipp in the

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Speaker 1: Wall Street Journal. It's a new socialism described for our audience,

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Speaker 1: the new socialism of the Democratic Socialists of the Democratic Party. Well,

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Speaker 1: it's very big government. On the proposal unveiled yesterday by

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Speaker 1: the left, UH talks about an enormous role for government.

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Speaker 1: How you pay for this stuff as a mystery to me,

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Speaker 1: even with confiscatory taxation, I don't see how they can

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Speaker 1: pay for all this stuff. So to me, it gives

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Speaker 1: the Republicans a potential foil. Reagan had to win. He

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Speaker 1: went right and then, like clockwork, and you know it

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Speaker 1: better than me, he moved back to the middle. In

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Speaker 1: this polarized time, if it's Trump and somebody leftish, do

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Speaker 1: they move back to the middle as they moved to

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Speaker 1: November of two thousand and twenty. It's a great opportunity

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Speaker 1: for Trump. I think getting two hundred and seventy votes

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Speaker 1: is a little more difficult this time. But if he

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Speaker 1: shows some willingness to compromise and we get a litmus

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Speaker 1: test in the next week on the wall, if he says, well,

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Speaker 1: I'll take whatever deal I can get. I'm not going

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Speaker 1: to declare an emergency. I'm not going to shut down

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Speaker 1: the government. That would be a sign that he may

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Speaker 1: be turning a little more pragmatic. What does it mean

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Speaker 1: for the pragmatic Vice President Biden? I mean, in terms

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Speaker 1: of the decision tree of all this, we can assume

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Speaker 1: that the gentleman is now Biden for Hick and Looper,

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Speaker 1: the former governor of Colorado. Maybe from Michael Bloomberg. There

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Speaker 1: clearly is an avenue where I think a moderate Democrat

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Speaker 1: could have a chance. Now we note that Mr Bloomberg

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Speaker 1: is an audien acquaintance with Bloomberg Radio and Bloomberg Television

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Speaker 1: and as the principal owner. If that's true, Greg Valier,

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Speaker 1: If if if we have a middle ground of Democratic party,

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Speaker 1: can there be a middle ground of Republican Party to

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Speaker 1: take on Mr Trump? No? I don't see that. When

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Speaker 1: when you look at the pulse time you see the

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Speaker 1: Republican base is overwhelmingly supportive of Trump coming like Mitt Rodney,

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Speaker 1: Jeff Flake, uh, Bob Corker, they'd have no chance. Okay,

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Speaker 1: this goes back to my you know, I'm talking about

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Speaker 1: nineteen twelve Eugene debs a socialists. Have the Republicans Now

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Speaker 1: with the last election, are they getting whiggish? Are they

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Speaker 1: beginning to look like this is before your time? Greg Bellier?

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Speaker 1: But are they look in eighteen eighty five where they

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Speaker 1: disappear into the minority? Ether Well, they have their divisions,

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Speaker 1: just because the Democrats have a division. On the Republican side,

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Speaker 1: there's the Chamber of Commerce, pro business, pro free trade

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Speaker 1: Republicans there in retreat, and then you've got the much

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Speaker 1: stronger social conservatives populist that trumpet. So the Republicans have

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Speaker 1: a division too, But I would argue the division that's

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Speaker 1: going to be the most apparent is going to be

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Speaker 1: among the Democrats. And then John Farroll, you mentioned this

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Speaker 1: the other day brilliantly. I can't remember on Mike Off

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Speaker 1: Mike about in England, there's a whole socialist debate, you know,

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Speaker 1: going back with the memories of the nineteen seventies in

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Speaker 1: the minds of a lot of people that do not

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Speaker 1: want to go back there. Greg you do an excellent

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Speaker 1: job of falling in the world of Washington, d C.

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Speaker 1: Into the world of Wall Street. Does some extreme left

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Speaker 1: wing proposals coming from some Democrats. As we've talked about,

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Speaker 1: when does Wall Street start to listen, and when I

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Speaker 1: mean listen, start to move, start to act, start to care.

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Speaker 1: Is it a twelve month story? How far away we

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Speaker 1: from that moment? It's it's not imminent. And I tell

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Speaker 1: you guys, but I think is the key is what

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Speaker 1: happens in the Senate. If the Senate stays Republican and

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Speaker 1: and there's a chance it will that's the that's the firewall.

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Speaker 1: All of this very activists led dislation would die in

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Speaker 1: the Senate. So I think Wall Street would correctly think

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Speaker 1: even if a Democrat became president, the chances of getting

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Speaker 1: really sweeping stuff enacted really hinges on a Senate that

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Speaker 1: may stay Republican. Is you right for Friday and into

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Speaker 1: the weekend? Greg? Set us up for Monday Tuesday next week?

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Speaker 1: What are you looking at? I'm trying to think. I

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Speaker 1: think it's probably going to be two stories. One the

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Speaker 1: titilating one about the National Enquirer. That's legs and there

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Speaker 1: may be a lot more looming there. And secondly the wall.

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Speaker 1: I think that there's going to be a deal proposed

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Speaker 1: to the president. Who proposes that in the Republican side.

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Speaker 1: We spoke to the congressman from Chattanooga and he said

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Speaker 1: it was basically going to come out of thin air blowney.

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Speaker 1: Who comes up with that deal to give it to

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Speaker 1: the president? Oh, I think they have one already, and

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Speaker 1: I think they have a messenger. The messenger is Lindsey Graham.

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Speaker 1: I think he'll tell the President, look, this is the

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Speaker 1: best you can get. We'll get you to three of

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Speaker 1: four billion for border security, and since the president's other

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Speaker 1: options are so unpalatable, he just might take it to

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Speaker 1: wrap things up. We've tried if we can. Greg, I

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Speaker 1: thought the discussion yesterday with a whether this deal would

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Speaker 1: or wouldn't get done by the end of the month

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Speaker 1: was ridiculous. But it was ridiculous because it was based

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Speaker 1: on a bunch of reporters shouting at the president whether

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Speaker 1: a meeting with him or Jing Ping would happen by

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Speaker 1: the end of the month. He shook his head, he said, no,

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Speaker 1: we're trading headlines here, Greg and big time without much context.

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Speaker 1: What do you make of that? Well, that's a good point,

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Speaker 1: and I think that we're not close to a deal

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Speaker 1: by March first or March second, I guess is the deadline.

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Speaker 1: I think there'll be an extension. What I think happens

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Speaker 1: is in the spring or maybe early summer, there's a crescendo,

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Speaker 1: a meeting between Trump and z in which they reach

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Speaker 1: an agreement in principle. But an agreement in principle is

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Speaker 1: not imminent. Greg, thank you so much, greatly appreciate it.

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Speaker 1: Really looking forward to the comments from Mr Value into

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Speaker 1: the political season as well. David Stubbs, where us, who

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Speaker 1: was a senior vice president of surging at JP Morgan

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Speaker 1: Asset Management, as terrific economics in folds it into market analysis. David,

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Speaker 1: what are you writing Friday from Monday morning? Tom, I'm

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Speaker 1: writing about the hope that we'll see some kind of

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Speaker 1: turnaround soon in China and European data, because if we don't,

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Speaker 1: we're looking increasingly, um, you know, in a very difficult

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Speaker 1: situation for both earnings, for macro economics and um, you know,

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Speaker 1: a continuation of the theme of the last twelve months

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Speaker 1: where the US was leading, uh, you know, the global economy,

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Speaker 1: earnings and equity markets. Um. We expect the US are

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Speaker 1: slow late New year, but that's no good for the

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Speaker 1: rest of the world if the rest of the world

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Speaker 1: is already in great difficulty. Well, David, you know this

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Speaker 1: weekend our listeners are gonna be at the kitchen table.

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Speaker 1: John Farrell and his family is going to be watching Luster,

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Speaker 1: tottson and all that, and they're gonna be talking about

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Speaker 1: their investment allocation. When the facts change, David Stubbs change,

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Speaker 1: what's the new allocation? Given the January February shift, we've

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Speaker 1: seen what's on We're still absolutely advising clients to use

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Speaker 1: strengthen markets, to gradually retool their portfolios to be slightly

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Speaker 1: more defensive, because we see twenty as a time when

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Speaker 1: the US economy is going to be slowing significantly. Um.

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Speaker 1: We don't yet have the faith that international markets are

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Speaker 1: going going to to you know, to pick up. So

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Speaker 1: it really depends obviously on the goal of the money

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Speaker 1: the time Horise and I saw that. Yeah, I had

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Speaker 1: the intro about the pension funds and there you know,

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Speaker 1: and the sovereign wealth companies, insurance companies. We advise a

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Speaker 1: lot of those and they are obviously been as as

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Speaker 1: John said, extending equity allocations over the last few for years.

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Speaker 1: But we see now after you know, a very long cycle, um,

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Speaker 1: too many portfolio years with very short duration allocations, with

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Speaker 1: too much cyclical exposure in the equities, and so we

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Speaker 1: have a range of things we're recommending. Firstly, you know,

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Speaker 1: right size the kind of safe havens of the portfolio

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Speaker 1: lengths and that duration if you if you're if it's

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Speaker 1: quite short, we do like gold tactically as well. Over

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Speaker 1: the next year or so, don't just go to cash,

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Speaker 1: because if this situation is going to get worse. Other

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Speaker 1: things are going to perform better than than cash and

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Speaker 1: last year, just on the equity side, we still like

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Speaker 1: a large chunks of technology and healthcare as secular growth themes.

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Speaker 1: We don't want clients backing away from all growth assets.

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Speaker 1: We do want them to folks on the secular themes

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Speaker 1: who other than the secular local drivers. So remove some cigulicality,

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Speaker 1: add to the secular themes. That's the equity story for you, David,

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Speaker 1: I want to pick up on the bond story. Let's

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Speaker 1: do a little bit of a bonds clinic for those

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Speaker 1: listeners who are outside of the bond market world. The

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Speaker 1: concept of duration and being long duration. David, just walk

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Speaker 1: us through the concept and why it's important to add

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Speaker 1: some duration right now. It's it's it's actually important to

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Speaker 1: understand again the total return of your bond fund. It's

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Speaker 1: not just about clipping that coupon. It's about a movement

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Speaker 1: in the price. And if yields go down, price goes up,

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Speaker 1: and the relationship between the two is a sensitivity the

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Speaker 1: change industrates. That's duration. It tends to be bigger, longer

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Speaker 1: duration in the further go out the curve, the longer

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Speaker 1: than maturity. So if you have say only say two

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Speaker 1: or three year bonds um is as yields full potentially

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Speaker 1: as markets fear risk off, you get some movement in

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Speaker 1: the price minology, but not a huge huge movement. If

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Speaker 1: you're owning ten year, let alone twenty thirty year bonds,

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Speaker 1: you get a very very significant move up as well.

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Speaker 1: And that's indeed what we've seen. Your long bonds have

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Speaker 1: performed very well since they October and you know in November.

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Speaker 1: And also you want to inside uh you know the

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Speaker 1: you know you're fixed income. I see a lot of

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Speaker 1: people pointing at corporate credit and saying, well, there's my duration.

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Speaker 1: That's what's gonna gonna protect me on the way down.

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Speaker 1: That's right. As long as as long as the bonds

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Speaker 1: of the corporate bonds are high enough quality. We want

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Speaker 1: people to getting out of the triple b's where I

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Speaker 1: know you've talked a lot on your show, The Real

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Speaker 1: Yield about the big growth of triple B market. We

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Speaker 1: put you want to go up into this single as

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Speaker 1: double as um and be tached going to high into

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Speaker 1: high yield. Who want to not be holding that paper

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Speaker 1: when there's any rewrating stories. We think that's going to

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Speaker 1: be a big story in the corporate credit market. As

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Speaker 1: we go into who wrote David Stubbs a check to

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Speaker 1: to plug real yield one pm Eastern Time, it's it's

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Speaker 1: I guess beautiful. I'm in restaurants bars. I was a

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Speaker 1: trembling madness about three weeks ago in New York. Minsters

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Speaker 1: they have the TV on. They don't have a TV.

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Speaker 1: They don't do that. It's like eleven year or whatever.

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Speaker 1: But everywhere I go that the ned across from Queen

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Speaker 1: Victoria's Street, Ah, they talk about is the roof. It's

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Speaker 1: very nice of David. Let's reverse engineering just a little bit. Conversely,

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Speaker 1: if yields go up at the long end, you can

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Speaker 1: really have to absorb some damage. Why is that not

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Speaker 1: going to happen? Why is the why is the possibility

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Speaker 1: of that happening limited in your mind? You know, we

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Speaker 1: don't get don't get us wrong. We think that you

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Speaker 1: know that yields could you know, move higher up towards

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Speaker 1: three per cent. As we go to the next couple

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Speaker 1: of quarters, if US growth hangs in there, you get

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Speaker 1: a resolution of some of these political overhand issues Italy trade, Brexit,

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Speaker 1: government shut shut down, sentiment, can push yields up there.

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Speaker 1: I think the change inside JP Morgan in the last

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Speaker 1: six or twelve months is just to lower the kind

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Speaker 1: of yield levels where we would be more enthusiastic buyers.

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Speaker 1: We used to say three percent and up. I think

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Speaker 1: if we get you know, uh, your your two point

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Speaker 1: eight or or up, and then we start to get

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Speaker 1: more and more aggressive. Now. I think that markets are

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Speaker 1: telling you that the neutral rate is lower than you

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Speaker 1: thought it was. The FED, I think, is listening to markets,

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Speaker 1: and you have around the world, as you were just

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Speaker 1: talking about the dramatic move lower in some of the

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Speaker 1: Eurozone bond yields. You know, two point eight two point

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Speaker 1: nine in the US tenure looks good valued to us.

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Speaker 1: So yes, we there's possibility there could be some mark

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Speaker 1: to market losses if you go out and buy a

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Speaker 1: long government bond now. But the starting point of portfolio matters.

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Speaker 1: If you have none of this stuff right now, you

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Speaker 1: need to start accumulating where we are. If you have

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Speaker 1: quite a lot relative to your risk profile, maybe you're

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Speaker 1: not an aggressive by today, but you give another ten

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Speaker 1: fifteen basis points on that yield, I think we should

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Speaker 1: start buying again. Another hour David stuff, JP Morgan, don't

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Speaker 1: be a stranger thing, greatly greatly, greatly appreciated. Yeah, he's

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Speaker 1: he's just he's just wonderful again out of London School

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Speaker 1: of Economics, and he's got a very cool doctorate from

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Speaker 1: the New School in New York, which is a wonderful

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Speaker 1: twisted program. Good morn into the memory of Mr Heilbronner

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Speaker 1: among others in Peter Bernstein and the Academic Energy School

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Speaker 1: from JP MULGANESM management. We always have our good friend

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Speaker 1: Margaret Brennan joined us Margaret as he hosts of CBSS

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Speaker 1: Face the Nation, and she always gives us her sense

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Speaker 1: of what is going on in Washington and market. We

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Speaker 1: have so many topics that I'm sure you're looking at,

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Speaker 1: the on again off again trade talks, the possible second

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Speaker 1: government shutdown. But where I want to lead off, Margaret,

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Speaker 1: is where I left off with Tom just recently. Is

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Speaker 1: that is my dupe Devils are going to pay a

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Speaker 1: visit to your University of Virginia Cavaliers tomorrow for big

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Speaker 1: basketball game. My question to you, Margaret is will you

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Speaker 1: be watching um Well, Saturday is usually prep time for me,

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Speaker 1: but I will hopefully watch a little bit of the game.

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Speaker 1: My husband's also a wah who, and my five almost

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Speaker 1: five months old son already has Virginia gay or waiting

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Speaker 1: for him. Where all right, Well, I'm gonna shift gears

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Speaker 1: a little bit away from the game because you interview

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Speaker 1: President Trump last weekend and I thought that it was

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Speaker 1: a great interview. Congratulations. I want to ask what was

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Speaker 1: his demeanor like? Um, you know, it's rare that the

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Speaker 1: president sits to talk to a network like CBS. He's

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Speaker 1: very often on television, so it's normally on cable with

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Speaker 1: Fox News. Um, And so it's rare for him to

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Speaker 1: sit for an extended interview with the Sunday show host

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Speaker 1: like myself, where you get to talk about for an

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Speaker 1: extended period, very serious topics and follow up and follow through.

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Speaker 1: And the President, I will say, seemed to be prepared

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Speaker 1: for that moment, seemed to actually want to engage. Um.

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Speaker 1: He uh sat down and gave us about forty five

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Speaker 1: minutes of time. That's not what we walked in thinking

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Speaker 1: we'd get who was supposed to be less time than that.

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Speaker 1: But he had a number of things he wanted to say.

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Speaker 1: He I think enjoyed the back before. Um, you know,

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Speaker 1: I was tough on a few things, but I felt

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Speaker 1: fair in uh the approach and challenging him where I did.

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Speaker 1: Um And to his credit, Uh, you know, he gave

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Speaker 1: us that lengthy amount of time on some really serious issues. Well, Margaret,

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Speaker 1: one of those serious issues that is confronting the president

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Speaker 1: administration is the trade talks with China. They are on again,

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Speaker 1: off again. Uh, it appears that they might be off again,

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Speaker 1: at least at the presidential level before the March first deadline.

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Speaker 1: What is your sense of what is going on with

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Speaker 1: the trade talks and how they might play out. Well,

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Speaker 1: that March first deadline is looming large. And I know

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Speaker 1: there was some disappointment yesterday to hear from the White

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Speaker 1: House that they did not plan for the President to

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Speaker 1: tack on a trip to China on the back end

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Speaker 1: of his North Korea summit which will be upcoming last

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Speaker 1: week of February in Vietnam. Um. And I think that

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Speaker 1: was definitely in about face for the White House. They

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Speaker 1: had expected to be invited to China. They had been

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Speaker 1: um talking about the potential of going there. You know,

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Speaker 1: the President said at least one to two meetings with

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Speaker 1: Shi Jumping himself, he may have gotten ahead of his

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Speaker 1: skis on that because those doing the negotiations, Robert Leightheiser,

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Speaker 1: that's the trade representative and his team, UH, don't appear

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Speaker 1: to want to um go full steam ahead and go

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Speaker 1: to a country without having a deal hammered out um

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Speaker 1: in the first place. The optics of that obviously was difficult. UM.

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Speaker 1: And so the president seems have pulled back some of

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Speaker 1: his enthusiasm, I would argue intentionally there. So, Margaret, the

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Speaker 1: reason why I started by asking about President Trump's demeanor

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Speaker 1: is because the way he has portrayed of late is

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Speaker 1: kind of embattled a little bit more than he has

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Speaker 1: been earlier in his president see certainly feeling the fact

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Speaker 1: that Congress is not with him anymore, even Republicans are

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Speaker 1: pushing back more. Did you get a sense that he

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Speaker 1: felt more isolated? Uh? And and and whether he felt

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Speaker 1: cowed by that or emboldened. Well, you know, because of

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Speaker 1: what you just laid out, And certainly on the end

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Speaker 1: of the thirty five days shutdown where he didn't get

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Speaker 1: a single thing he asked for and seemed to lose

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Speaker 1: that political battle, I was expecting him to be, you know,

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Speaker 1: coming from that place of deep frustration, uh, and to

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Speaker 1: sound like it. What's clear is he is frustrated. He

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Speaker 1: seems to be giving up on Congress. But that didn't seem,

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Speaker 1: at least in the demeanor in our conversation, to be

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Speaker 1: disrupting his confidence level. If anything, he Um was dismissive

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Speaker 1: of the majority of Senate Republicans who rebuked his foreign

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Speaker 1: policy choices, you know, voting to say you're endangering national

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Speaker 1: security by withdrawing from Syria and Afghanistan. I mean, that's

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Speaker 1: a significant and rare break for s Republicans to do

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Speaker 1: something like that, uh, when they've largely fallen in line,

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Speaker 1: even if privately they have problems with some of the

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Speaker 1: president's policies. He didn't seem swayed in any way by that. Um.

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Speaker 1: He also it was very clear in our conversation that

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Speaker 1: the facts and changing facts as presented by the intelligence

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Speaker 1: community aren't going to change his opinion. He said, I

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Speaker 1: have intelligence people, and I don't have to listen to them.

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Speaker 1: I don't have to agree with them. That's a true statement,

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Speaker 1: but that causes some concern among um those who say,

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Speaker 1: is there a political filter that's going to be put

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Speaker 1: on intelligence in the way that it was arguably um

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Speaker 1: going into the Iraq War that it wasn't just a

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Speaker 1: problem with intelligence, it was cherry picking intelligence to meet

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Speaker 1: your thesis. So if the facts and the changing facts

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Speaker 1: aren't influencing opinion, where does that lead us? But I'd

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Speaker 1: say for the President himself, he seems very confident in

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Speaker 1: his convictions despite these breaks from him, he seems to

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Speaker 1: enjoy uh the being in that old Margaret Brennon, we

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Speaker 1: really appreciate you taking the time. We're very much looking

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Speaker 1: forward to you seeing the next episode of Face the

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Speaker 1: Nation on CBS Market. Brennon of course, is host of

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Speaker 1: that show, and you can hear Margat Brennon this weekend

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Speaker 1: on Bloomberg Radio. Listen to Face the Nation's Sunday at

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Speaker 1: two pm in New York, Washington, d C. And Bloomberg

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Speaker 1: One of six one in Boston, Newberry Pork. Let's Face

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Speaker 1: the Nation this Sunday at two on Bloomberg Radio. Thanks

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Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

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Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.

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Speaker 1: You can always catch us worldwide I'm Bloomberg Radio