Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm term Keene
Speaker 1: jay Leye. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
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Speaker 1: the trade story once again front and center, the clock ticking,
Speaker 1: but President Donald Trump said he won't meet Chinese President
Speaker 1: Jejing thing before a March first deadline to avert high
Speaker 1: US tariffs on Chinese goods, injecting some pessimism into the market.
Speaker 1: Global equities well on course for the first weekly drop
Speaker 1: for this year. David Balin dropping by City Private Bank
Speaker 1: chief investment officer here in New York. Good money to David,
Speaker 1: Good morning to you. Your confidence not shaken, But the
Speaker 1: last twenty four hours why not not? Really? I think
Speaker 1: that the expectations that people had are are are probably muted.
Speaker 1: I think that the best thing that could happen in
Speaker 1: March is that the there's an agreement to continue to talk,
Speaker 1: maybe an agreement on a couple of major points in
Speaker 1: an agreement to continue to talk. The fact that Trump
Speaker 1: is not traveling is actually a head fake takes weeks
Speaker 1: to prepare for a president to travel abroad, and the
Speaker 1: whole idea that was going to travel before March first
Speaker 1: seems like a kind of a misnomer to me. Sounds clichey,
Speaker 1: but it feels like an excuse to sell, not a reason,
Speaker 1: and perhaps tells me a little bit more about the
Speaker 1: low levels of conviction people have about this reabout in January, David, well,
Speaker 1: you know, if I look at the headlines in last December,
Speaker 1: it was the worst December in thirty years. Right in
Speaker 1: January the best January and thirty years. I think we're
Speaker 1: in a situation where people got well ahead of their
Speaker 1: negativity in in in December, and they're probably very optimistic
Speaker 1: in catching back up in January. We're going to a
Speaker 1: more more normal, normal market environment. We're gonna see more volatility,
Speaker 1: and we're going to see markets tend to trend up
Speaker 1: for the remainder of the year. Frankly, though, amongst people
Speaker 1: would say it's right to price out recession risk after
Speaker 1: overly pricing it in through December, the argument now, I think,
Speaker 1: is whether we should have any kind of multiple expansion
Speaker 1: on a year where earnings are being revised lower they're
Speaker 1: not being revised higher, and uncertainty is increasing worldwide, and
Speaker 1: there's a real question markets to whether that feeds back
Speaker 1: in the United States into what degree. Right, Let's let's
Speaker 1: assume that you're right and that there is no multiple expansion.
Speaker 1: We actually think that the US market in general, it's
Speaker 1: going to be up in terms of earning seven. We've
Speaker 1: taken a look at our growth statistics. Let's you know,
Speaker 1: we think the US is a two and a half
Speaker 1: percent grower, Emerging markets four and a half percent grower.
Speaker 1: China is stimulating their economy at six percent grower, So
Speaker 1: we don't see the recession that everyone is sort of
Speaker 1: talking about as in two thousand nineteen, and maybe not
Speaker 1: even in early two thousand and twenty. That's the blue
Speaker 1: button right there. What's that means? That's the first time
Speaker 1: I've been in the studios I see the blue button
Speaker 1: is a Tottenham blue. As they take on lest is
Speaker 1: it Lester or Luster? It's Lester. I was stopped by
Speaker 1: John from your Castle, who said, talk up Lester Castle.
Speaker 1: I have no I think is Dodger blue. That's Dodger blue.
Speaker 1: It does look Dodger blue. Friends, and Lue needs a
Speaker 1: baseball cap. Maybe we'll do that is sound confused, now,
Speaker 1: so am I? You talk about granular fundamentals. Okay, granular fundamentals, David,
Speaker 1: Do they come from the revenue line surprises the gloom crew,
Speaker 1: The operating income line surprises the bloom crew. How do
Speaker 1: you get multiple expansion? I'm not suggesting that we're going
Speaker 1: to see a significant amount of multiple expansion. You're dealing
Speaker 1: in what I think is pessimism, which is when will
Speaker 1: the recession occur? And yet the data doesn't suggest that
Speaker 1: there should. Clare agrees with you, right and so so
Speaker 1: the so the question then is what should stocks do
Speaker 1: if multiples don't expand? And the answer is they should
Speaker 1: go up somewhere between eight and ten percent from where
Speaker 1: they were let's say at the beginning of the year.
Speaker 1: For sure, given where we started. But when you look
Speaker 1: at global equities, travel outside of the United States, Tom,
Speaker 1: and you're gonna see in the emerging markets, you know,
Speaker 1: a much or robust environment right now for the much
Speaker 1: more constructive given that rates in the United States have peaked,
Speaker 1: this is a time when you can actually see you know,
Speaker 1: growth in those markets come through. And John also lingoes
Speaker 1: earlier this morning with the RBC was adamant about this
Speaker 1: are the title shifts of em where you're gonna see
Speaker 1: real currency dynamics that will support a more stable a
Speaker 1: global economy. Let's fold the bond market into all of this.
Speaker 1: And there's two ways of looking at the bond market
Speaker 1: right now. The bullish way of looking at things for
Speaker 1: equities to say, well, yield to low with that supportive
Speaker 1: of equities. The negative way of looking at all of
Speaker 1: this is saying, one on Earth, the Bundy yields doing
Speaker 1: back at ten basis points on a German ten year
Speaker 1: the curves negative all the way out, and then year
Speaker 1: nine years the tenure treasury yield is now to sixty four.
Speaker 1: That doesn't spell out a nice, good, beautiful global growth story.
Speaker 1: How do you look at it right? It actually, Uh,
Speaker 1: I've learned over the last ten years, certainly a city
Speaker 1: that the bond guys tend to have it right more often.
Speaker 1: And I want to just acknowledge that to all of
Speaker 1: the people out there listening. This is a big statement.
Speaker 1: They're very happy this morning because they're faster now. But
Speaker 1: but this is the thing. It's uh, it's hard to imagine,
Speaker 1: but if you if you look back at what the
Speaker 1: Fed has done. They've had nine rate increases, but they've
Speaker 1: done it over a very long period of time. Yelling
Speaker 1: and Powell looking very similar in terms of their approach. There.
Speaker 1: Inflation not a big deal. Unemployment you know at four percent,
Speaker 1: these are these are positive things in terms of sustaining
Speaker 1: an economy that's growing slowly. What you just said is
Speaker 1: vitally important for all equity people always listen to the
Speaker 1: bond guys, So I'll pick on Steve Major HSBC, who
Speaker 1: looks like a genius this morning with a thirty year bond.
Speaker 1: John two point nine eight seven three on a thirty
Speaker 1: year bond. What do those yields signal in the bond
Speaker 1: space for the equity space, Well, what they're signaling is
Speaker 1: a very long term outlook of benign inflation in greater
Speaker 1: vailue on equity cash flows, righty, cash flows on dividends,
Speaker 1: on buy backs. If you think about where your total
Speaker 1: return is going to be greatest over the course of
Speaker 1: the next decade, you can't help but think that this
Speaker 1: is going to be bullish frequities. I think he's auditioning
Speaker 1: for the real yield job. I mean, I think you
Speaker 1: can come on that guy on the Real Yield, which
Speaker 1: you can see on Fridays. It would be a short
Speaker 1: will give you ninety seconds. Seriously, the real Yield today,
Speaker 1: he's like a real show because these are real bud yeles. Yeah,
Speaker 1: and not just in the sovereign space, but the credit
Speaker 1: space as well. We've just had the biggest net increased,
Speaker 1: biggest inflows into high yield bond funds since huge amount
Speaker 1: of money feeling against It's not just equities running away
Speaker 1: on their own. I mean, we've had a big move,
Speaker 1: a corresponding move in the credit spaces. While David right,
Speaker 1: and I mean we are advising our clients now opportunistic
Speaker 1: their core portfolios. We've moved them already into like EM
Speaker 1: dead in some of the high yield spaces, but opportunistically
Speaker 1: we think that EM dead in local currency is going
Speaker 1: to turn out be a terrific opportunity because again benign
Speaker 1: outlook for the dollar, and ultimately you're going to see uh,
Speaker 1: you know, emerging market currencies rally. So it's a good
Speaker 1: combination for bond invests. Assuming the FED is out of
Speaker 1: the game, is that the central assumption here that the
Speaker 1: Federals has done that well, not necessarily done, but very
Speaker 1: nearly done. Like another rate rise. One more type of
Speaker 1: thing could happen, depending on whether there's an optimistic burst
Speaker 1: in the US, but largely done. That's right, Devin Bannon writes,
Speaker 1: to catch you out with the City Private Bank chief
Speaker 1: investment officer here in New York City right now, Gregg
Speaker 1: failure joining us. He is with the Horizon Investments. And
Speaker 1: of course let's go to the political score. Woodrow Wilson
Speaker 1: forty or four thirty five electoral votes. Mr Roosevelt from
Speaker 1: New York eighty eight electoral votes, William Howard Taff eight
Speaker 1: electoral votes, and Eugene Debs Socialist, zero electoral votes. And
Speaker 1: this is of course the election of n when yug
Speaker 1: Villier began his work UH in political economics. Greg, it's
Speaker 1: all the rage. I'm talking about it. Mike Allen, are
Speaker 1: over to Axios leading with the Greg ipp in the
Speaker 1: Wall Street Journal. It's a new socialism described for our audience,
Speaker 1: the new socialism of the Democratic Socialists of the Democratic Party. Well,
Speaker 1: it's very big government. On the proposal unveiled yesterday by
Speaker 1: the left, UH talks about an enormous role for government.
Speaker 1: How you pay for this stuff as a mystery to me,
Speaker 1: even with confiscatory taxation, I don't see how they can
Speaker 1: pay for all this stuff. So to me, it gives
Speaker 1: the Republicans a potential foil. Reagan had to win. He
Speaker 1: went right and then, like clockwork, and you know it
Speaker 1: better than me, he moved back to the middle. In
Speaker 1: this polarized time, if it's Trump and somebody leftish, do
Speaker 1: they move back to the middle as they moved to
Speaker 1: November of two thousand and twenty. It's a great opportunity
Speaker 1: for Trump. I think getting two hundred and seventy votes
Speaker 1: is a little more difficult this time. But if he
Speaker 1: shows some willingness to compromise and we get a litmus
Speaker 1: test in the next week on the wall, if he says, well,
Speaker 1: I'll take whatever deal I can get. I'm not going
Speaker 1: to declare an emergency. I'm not going to shut down
Speaker 1: the government. That would be a sign that he may
Speaker 1: be turning a little more pragmatic. What does it mean
Speaker 1: for the pragmatic Vice President Biden? I mean, in terms
Speaker 1: of the decision tree of all this, we can assume
Speaker 1: that the gentleman is now Biden for Hick and Looper,
Speaker 1: the former governor of Colorado. Maybe from Michael Bloomberg. There
Speaker 1: clearly is an avenue where I think a moderate Democrat
Speaker 1: could have a chance. Now we note that Mr Bloomberg
Speaker 1: is an audien acquaintance with Bloomberg Radio and Bloomberg Television
Speaker 1: and as the principal owner. If that's true, Greg Valier,
Speaker 1: If if if we have a middle ground of Democratic party,
Speaker 1: can there be a middle ground of Republican Party to
Speaker 1: take on Mr Trump? No? I don't see that. When
Speaker 1: when you look at the pulse time you see the
Speaker 1: Republican base is overwhelmingly supportive of Trump coming like Mitt Rodney,
Speaker 1: Jeff Flake, uh, Bob Corker, they'd have no chance. Okay,
Speaker 1: this goes back to my you know, I'm talking about
Speaker 1: nineteen twelve Eugene debs a socialists. Have the Republicans Now
Speaker 1: with the last election, are they getting whiggish? Are they
Speaker 1: beginning to look like this is before your time? Greg Bellier?
Speaker 1: But are they look in eighteen eighty five where they
Speaker 1: disappear into the minority? Ether Well, they have their divisions,
Speaker 1: just because the Democrats have a division. On the Republican side,
Speaker 1: there's the Chamber of Commerce, pro business, pro free trade
Speaker 1: Republicans there in retreat, and then you've got the much
Speaker 1: stronger social conservatives populist that trumpet. So the Republicans have
Speaker 1: a division too, But I would argue the division that's
Speaker 1: going to be the most apparent is going to be
Speaker 1: among the Democrats. And then John Farroll, you mentioned this
Speaker 1: the other day brilliantly. I can't remember on Mike Off
Speaker 1: Mike about in England, there's a whole socialist debate, you know,
Speaker 1: going back with the memories of the nineteen seventies in
Speaker 1: the minds of a lot of people that do not
Speaker 1: want to go back there. Greg you do an excellent
Speaker 1: job of falling in the world of Washington, d C.
Speaker 1: Into the world of Wall Street. Does some extreme left
Speaker 1: wing proposals coming from some Democrats. As we've talked about,
Speaker 1: when does Wall Street start to listen, and when I
Speaker 1: mean listen, start to move, start to act, start to care.
Speaker 1: Is it a twelve month story? How far away we
Speaker 1: from that moment? It's it's not imminent. And I tell
Speaker 1: you guys, but I think is the key is what
Speaker 1: happens in the Senate. If the Senate stays Republican and
Speaker 1: and there's a chance it will that's the that's the firewall.
Speaker 1: All of this very activists led dislation would die in
Speaker 1: the Senate. So I think Wall Street would correctly think
Speaker 1: even if a Democrat became president, the chances of getting
Speaker 1: really sweeping stuff enacted really hinges on a Senate that
Speaker 1: may stay Republican. Is you right for Friday and into
Speaker 1: the weekend? Greg? Set us up for Monday Tuesday next week?
Speaker 1: What are you looking at? I'm trying to think. I
Speaker 1: think it's probably going to be two stories. One the
Speaker 1: titilating one about the National Enquirer. That's legs and there
Speaker 1: may be a lot more looming there. And secondly the wall.
Speaker 1: I think that there's going to be a deal proposed
Speaker 1: to the president. Who proposes that in the Republican side.
Speaker 1: We spoke to the congressman from Chattanooga and he said
Speaker 1: it was basically going to come out of thin air blowney.
Speaker 1: Who comes up with that deal to give it to
Speaker 1: the president? Oh, I think they have one already, and
Speaker 1: I think they have a messenger. The messenger is Lindsey Graham.
Speaker 1: I think he'll tell the President, look, this is the
Speaker 1: best you can get. We'll get you to three of
Speaker 1: four billion for border security, and since the president's other
Speaker 1: options are so unpalatable, he just might take it to
Speaker 1: wrap things up. We've tried if we can. Greg, I
Speaker 1: thought the discussion yesterday with a whether this deal would
Speaker 1: or wouldn't get done by the end of the month
Speaker 1: was ridiculous. But it was ridiculous because it was based
Speaker 1: on a bunch of reporters shouting at the president whether
Speaker 1: a meeting with him or Jing Ping would happen by
Speaker 1: the end of the month. He shook his head, he said, no,
Speaker 1: we're trading headlines here, Greg and big time without much context.
Speaker 1: What do you make of that? Well, that's a good point,
Speaker 1: and I think that we're not close to a deal
Speaker 1: by March first or March second, I guess is the deadline.
Speaker 1: I think there'll be an extension. What I think happens
Speaker 1: is in the spring or maybe early summer, there's a crescendo,
Speaker 1: a meeting between Trump and z in which they reach
Speaker 1: an agreement in principle. But an agreement in principle is
Speaker 1: not imminent. Greg, thank you so much, greatly appreciate it.
Speaker 1: Really looking forward to the comments from Mr Value into
Speaker 1: the political season as well. David Stubbs, where us, who
Speaker 1: was a senior vice president of surging at JP Morgan
Speaker 1: Asset Management, as terrific economics in folds it into market analysis. David,
Speaker 1: what are you writing Friday from Monday morning? Tom, I'm
Speaker 1: writing about the hope that we'll see some kind of
Speaker 1: turnaround soon in China and European data, because if we don't,
Speaker 1: we're looking increasingly, um, you know, in a very difficult
Speaker 1: situation for both earnings, for macro economics and um, you know,
Speaker 1: a continuation of the theme of the last twelve months
Speaker 1: where the US was leading, uh, you know, the global economy,
Speaker 1: earnings and equity markets. Um. We expect the US are
Speaker 1: slow late New year, but that's no good for the
Speaker 1: rest of the world if the rest of the world
Speaker 1: is already in great difficulty. Well, David, you know this
Speaker 1: weekend our listeners are gonna be at the kitchen table.
Speaker 1: John Farrell and his family is going to be watching Luster,
Speaker 1: tottson and all that, and they're gonna be talking about
Speaker 1: their investment allocation. When the facts change, David Stubbs change,
Speaker 1: what's the new allocation? Given the January February shift, we've
Speaker 1: seen what's on We're still absolutely advising clients to use
Speaker 1: strengthen markets, to gradually retool their portfolios to be slightly
Speaker 1: more defensive, because we see twenty as a time when
Speaker 1: the US economy is going to be slowing significantly. Um.
Speaker 1: We don't yet have the faith that international markets are
Speaker 1: going going to to you know, to pick up. So
Speaker 1: it really depends obviously on the goal of the money
Speaker 1: the time Horise and I saw that. Yeah, I had
Speaker 1: the intro about the pension funds and there you know,
Speaker 1: and the sovereign wealth companies, insurance companies. We advise a
Speaker 1: lot of those and they are obviously been as as
Speaker 1: John said, extending equity allocations over the last few for years.
Speaker 1: But we see now after you know, a very long cycle, um,
Speaker 1: too many portfolio years with very short duration allocations, with
Speaker 1: too much cyclical exposure in the equities, and so we
Speaker 1: have a range of things we're recommending. Firstly, you know,
Speaker 1: right size the kind of safe havens of the portfolio
Speaker 1: lengths and that duration if you if you're if it's
Speaker 1: quite short, we do like gold tactically as well. Over
Speaker 1: the next year or so, don't just go to cash,
Speaker 1: because if this situation is going to get worse. Other
Speaker 1: things are going to perform better than than cash and
Speaker 1: last year, just on the equity side, we still like
Speaker 1: a large chunks of technology and healthcare as secular growth themes.
Speaker 1: We don't want clients backing away from all growth assets.
Speaker 1: We do want them to folks on the secular themes
Speaker 1: who other than the secular local drivers. So remove some cigulicality,
Speaker 1: add to the secular themes. That's the equity story for you, David,
Speaker 1: I want to pick up on the bond story. Let's
Speaker 1: do a little bit of a bonds clinic for those
Speaker 1: listeners who are outside of the bond market world. The
Speaker 1: concept of duration and being long duration. David, just walk
Speaker 1: us through the concept and why it's important to add
Speaker 1: some duration right now. It's it's it's actually important to
Speaker 1: understand again the total return of your bond fund. It's
Speaker 1: not just about clipping that coupon. It's about a movement
Speaker 1: in the price. And if yields go down, price goes up,
Speaker 1: and the relationship between the two is a sensitivity the
Speaker 1: change industrates. That's duration. It tends to be bigger, longer
Speaker 1: duration in the further go out the curve, the longer
Speaker 1: than maturity. So if you have say only say two
Speaker 1: or three year bonds um is as yields full potentially
Speaker 1: as markets fear risk off, you get some movement in
Speaker 1: the price minology, but not a huge huge movement. If
Speaker 1: you're owning ten year, let alone twenty thirty year bonds,
Speaker 1: you get a very very significant move up as well.
Speaker 1: And that's indeed what we've seen. Your long bonds have
Speaker 1: performed very well since they October and you know in November.
Speaker 1: And also you want to inside uh you know the
Speaker 1: you know you're fixed income. I see a lot of
Speaker 1: people pointing at corporate credit and saying, well, there's my duration.
Speaker 1: That's what's gonna gonna protect me on the way down.
Speaker 1: That's right. As long as as long as the bonds
Speaker 1: of the corporate bonds are high enough quality. We want
Speaker 1: people to getting out of the triple b's where I
Speaker 1: know you've talked a lot on your show, The Real
Speaker 1: Yield about the big growth of triple B market. We
Speaker 1: put you want to go up into this single as
Speaker 1: double as um and be tached going to high into
Speaker 1: high yield. Who want to not be holding that paper
Speaker 1: when there's any rewrating stories. We think that's going to
Speaker 1: be a big story in the corporate credit market. As
Speaker 1: we go into who wrote David Stubbs a check to
Speaker 1: to plug real yield one pm Eastern Time, it's it's
Speaker 1: I guess beautiful. I'm in restaurants bars. I was a
Speaker 1: trembling madness about three weeks ago in New York. Minsters
Speaker 1: they have the TV on. They don't have a TV.
Speaker 1: They don't do that. It's like eleven year or whatever.
Speaker 1: But everywhere I go that the ned across from Queen
Speaker 1: Victoria's Street, Ah, they talk about is the roof. It's
Speaker 1: very nice of David. Let's reverse engineering just a little bit. Conversely,
Speaker 1: if yields go up at the long end, you can
Speaker 1: really have to absorb some damage. Why is that not
Speaker 1: going to happen? Why is the why is the possibility
Speaker 1: of that happening limited in your mind? You know, we
Speaker 1: don't get don't get us wrong. We think that you
Speaker 1: know that yields could you know, move higher up towards
Speaker 1: three per cent. As we go to the next couple
Speaker 1: of quarters, if US growth hangs in there, you get
Speaker 1: a resolution of some of these political overhand issues Italy trade, Brexit,
Speaker 1: government shut shut down, sentiment, can push yields up there.
Speaker 1: I think the change inside JP Morgan in the last
Speaker 1: six or twelve months is just to lower the kind
Speaker 1: of yield levels where we would be more enthusiastic buyers.
Speaker 1: We used to say three percent and up. I think
Speaker 1: if we get you know, uh, your your two point
Speaker 1: eight or or up, and then we start to get
Speaker 1: more and more aggressive. Now. I think that markets are
Speaker 1: telling you that the neutral rate is lower than you
Speaker 1: thought it was. The FED, I think, is listening to markets,
Speaker 1: and you have around the world, as you were just
Speaker 1: talking about the dramatic move lower in some of the
Speaker 1: Eurozone bond yields. You know, two point eight two point
Speaker 1: nine in the US tenure looks good valued to us.
Speaker 1: So yes, we there's possibility there could be some mark
Speaker 1: to market losses if you go out and buy a
Speaker 1: long government bond now. But the starting point of portfolio matters.
Speaker 1: If you have none of this stuff right now, you
Speaker 1: need to start accumulating where we are. If you have
Speaker 1: quite a lot relative to your risk profile, maybe you're
Speaker 1: not an aggressive by today, but you give another ten
Speaker 1: fifteen basis points on that yield, I think we should
Speaker 1: start buying again. Another hour David stuff, JP Morgan, don't
Speaker 1: be a stranger thing, greatly greatly, greatly appreciated. Yeah, he's
Speaker 1: he's just he's just wonderful again out of London School
Speaker 1: of Economics, and he's got a very cool doctorate from
Speaker 1: the New School in New York, which is a wonderful
Speaker 1: twisted program. Good morn into the memory of Mr Heilbronner
Speaker 1: among others in Peter Bernstein and the Academic Energy School
Speaker 1: from JP MULGANESM management. We always have our good friend
Speaker 1: Margaret Brennan joined us Margaret as he hosts of CBSS
Speaker 1: Face the Nation, and she always gives us her sense
Speaker 1: of what is going on in Washington and market. We
Speaker 1: have so many topics that I'm sure you're looking at,
Speaker 1: the on again off again trade talks, the possible second
Speaker 1: government shutdown. But where I want to lead off, Margaret,
Speaker 1: is where I left off with Tom just recently. Is
Speaker 1: that is my dupe Devils are going to pay a
Speaker 1: visit to your University of Virginia Cavaliers tomorrow for big
Speaker 1: basketball game. My question to you, Margaret is will you
Speaker 1: be watching um Well, Saturday is usually prep time for me,
Speaker 1: but I will hopefully watch a little bit of the game.
Speaker 1: My husband's also a wah who, and my five almost
Speaker 1: five months old son already has Virginia gay or waiting
Speaker 1: for him. Where all right, Well, I'm gonna shift gears
Speaker 1: a little bit away from the game because you interview
Speaker 1: President Trump last weekend and I thought that it was
Speaker 1: a great interview. Congratulations. I want to ask what was
Speaker 1: his demeanor like? Um, you know, it's rare that the
Speaker 1: president sits to talk to a network like CBS. He's
Speaker 1: very often on television, so it's normally on cable with
Speaker 1: Fox News. Um, And so it's rare for him to
Speaker 1: sit for an extended interview with the Sunday show host
Speaker 1: like myself, where you get to talk about for an
Speaker 1: extended period, very serious topics and follow up and follow through.
Speaker 1: And the President, I will say, seemed to be prepared
Speaker 1: for that moment, seemed to actually want to engage. Um.
Speaker 1: He uh sat down and gave us about forty five
Speaker 1: minutes of time. That's not what we walked in thinking
Speaker 1: we'd get who was supposed to be less time than that.
Speaker 1: But he had a number of things he wanted to say.
Speaker 1: He I think enjoyed the back before. Um, you know,
Speaker 1: I was tough on a few things, but I felt
Speaker 1: fair in uh the approach and challenging him where I did.
Speaker 1: Um And to his credit, Uh, you know, he gave
Speaker 1: us that lengthy amount of time on some really serious issues. Well, Margaret,
Speaker 1: one of those serious issues that is confronting the president
Speaker 1: administration is the trade talks with China. They are on again,
Speaker 1: off again. Uh, it appears that they might be off again,
Speaker 1: at least at the presidential level before the March first deadline.
Speaker 1: What is your sense of what is going on with
Speaker 1: the trade talks and how they might play out. Well,
Speaker 1: that March first deadline is looming large. And I know
Speaker 1: there was some disappointment yesterday to hear from the White
Speaker 1: House that they did not plan for the President to
Speaker 1: tack on a trip to China on the back end
Speaker 1: of his North Korea summit which will be upcoming last
Speaker 1: week of February in Vietnam. Um. And I think that
Speaker 1: was definitely in about face for the White House. They
Speaker 1: had expected to be invited to China. They had been
Speaker 1: um talking about the potential of going there. You know,
Speaker 1: the President said at least one to two meetings with
Speaker 1: Shi Jumping himself, he may have gotten ahead of his
Speaker 1: skis on that because those doing the negotiations, Robert Leightheiser,
Speaker 1: that's the trade representative and his team, UH, don't appear
Speaker 1: to want to um go full steam ahead and go
Speaker 1: to a country without having a deal hammered out um
Speaker 1: in the first place. The optics of that obviously was difficult. UM.
Speaker 1: And so the president seems have pulled back some of
Speaker 1: his enthusiasm, I would argue intentionally there. So, Margaret, the
Speaker 1: reason why I started by asking about President Trump's demeanor
Speaker 1: is because the way he has portrayed of late is
Speaker 1: kind of embattled a little bit more than he has
Speaker 1: been earlier in his president see certainly feeling the fact
Speaker 1: that Congress is not with him anymore, even Republicans are
Speaker 1: pushing back more. Did you get a sense that he
Speaker 1: felt more isolated? Uh? And and and whether he felt
Speaker 1: cowed by that or emboldened. Well, you know, because of
Speaker 1: what you just laid out, And certainly on the end
Speaker 1: of the thirty five days shutdown where he didn't get
Speaker 1: a single thing he asked for and seemed to lose
Speaker 1: that political battle, I was expecting him to be, you know,
Speaker 1: coming from that place of deep frustration, uh, and to
Speaker 1: sound like it. What's clear is he is frustrated. He
Speaker 1: seems to be giving up on Congress. But that didn't seem,
Speaker 1: at least in the demeanor in our conversation, to be
Speaker 1: disrupting his confidence level. If anything, he Um was dismissive
Speaker 1: of the majority of Senate Republicans who rebuked his foreign
Speaker 1: policy choices, you know, voting to say you're endangering national
Speaker 1: security by withdrawing from Syria and Afghanistan. I mean, that's
Speaker 1: a significant and rare break for s Republicans to do
Speaker 1: something like that, uh, when they've largely fallen in line,
Speaker 1: even if privately they have problems with some of the
Speaker 1: president's policies. He didn't seem swayed in any way by that. Um.
Speaker 1: He also it was very clear in our conversation that
Speaker 1: the facts and changing facts as presented by the intelligence
Speaker 1: community aren't going to change his opinion. He said, I
Speaker 1: have intelligence people, and I don't have to listen to them.
Speaker 1: I don't have to agree with them. That's a true statement,
Speaker 1: but that causes some concern among um those who say,
Speaker 1: is there a political filter that's going to be put
Speaker 1: on intelligence in the way that it was arguably um
Speaker 1: going into the Iraq War that it wasn't just a
Speaker 1: problem with intelligence, it was cherry picking intelligence to meet
Speaker 1: your thesis. So if the facts and the changing facts
Speaker 1: aren't influencing opinion, where does that lead us? But I'd
Speaker 1: say for the President himself, he seems very confident in
Speaker 1: his convictions despite these breaks from him, he seems to
Speaker 1: enjoy uh the being in that old Margaret Brennon, we
Speaker 1: really appreciate you taking the time. We're very much looking
Speaker 1: forward to you seeing the next episode of Face the
Speaker 1: Nation on CBS Market. Brennon of course, is host of
Speaker 1: that show, and you can hear Margat Brennon this weekend
Speaker 1: on Bloomberg Radio. Listen to Face the Nation's Sunday at
Speaker 1: two pm in New York, Washington, d C. And Bloomberg
Speaker 1: One of six one in Boston, Newberry Pork. Let's Face
Speaker 1: the Nation this Sunday at two on Bloomberg Radio. Thanks
Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen
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Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.
Speaker 1: You can always catch us worldwide I'm Bloomberg Radio