Latest / Bloomberg Intelligence / Trump Indictment, PCE Inflation Data, and Markets

Transcript

Trump Indictment, PCE Inflation Data, and Markets · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
0:04
Speaker 1: my co host Matt Miller. Every business day, we bring
0:06
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
0:11
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
0:15
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast News. Over the last
0:22
Speaker 1: cycle here twenty four hours has been former President Donald
0:25
Speaker 1: Trump indited in New York and that is a developing story.
0:29
Speaker 1: We want to get some perspective on that, and the
0:31
Speaker 1: first call we put out was to Tim O'Brien. He's
0:34
Speaker 1: his senior executive editor for Bloomberg Opinion. He's been doing
0:38
Speaker 1: that since twenty thirteen. I think before that he was
0:40
Speaker 1: at the Huffington Post, The New York Times, the Wall
0:42
Speaker 1: Street Journal. My takeaway from all over that is the
0:45
Speaker 1: guy has a hard time keeping a job, but he's
0:47
Speaker 1: done a pretty good job here at Bloomberg. He wrote
0:49
Speaker 1: a book back in the day, Trump Nation, The Art
0:52
Speaker 1: of Being the Donald, in two thousand and five, that
0:54
Speaker 1: is the definitive biography of Donald Trump. He got sued
0:57
Speaker 1: by the former president of that but he won and
0:59
Speaker 1: if he wants to talk about it, Ken, But Tim,
1:01
Speaker 1: what do you make of the news about the New
1:04
Speaker 1: York indictment? What's your initial read? Well, well, Paul, the
1:08
Speaker 1: first thing I'm to say, the reason I have a
1:09
Speaker 1: hard time keeping a job is because of mean colleague.
1:12
Speaker 1: You no support? Yeah, I think we don't know, right.
1:18
Speaker 1: I think this is one of those moments in which
1:21
Speaker 1: everyone wants to a pine and analyze, and I think
1:26
Speaker 1: until we actually see the indictment itself, it's underseal, I
1:29
Speaker 1: imagine it we'll get unsealed Monday or Tuesday. Trump is
1:33
Speaker 1: likely to be arraigned on Tuesday. But that's not completely
1:36
Speaker 1: written in the stone either. I've written before that I
1:40
Speaker 1: think that Alvin Bragg's case is relatively flimsy relative to
1:46
Speaker 1: some of the other investigations and prosecutions that are ongoing.
1:51
Speaker 1: I don't know that this was the best case you
1:54
Speaker 1: would want to bring to him, bring it out of
1:56
Speaker 1: that office at this point in time against a former president,
2:00
Speaker 1: but he's chosen to do so. And Donald Trump has
2:05
Speaker 1: spent decades weaponizing the law law and avoiding any accountability
2:10
Speaker 1: in courtrooms, and at a minimum that that's been pierced
2:16
Speaker 1: you know, he's going to be indicted for the first time.
2:19
Speaker 1: He's the first president to be indicted. But I think
2:21
Speaker 1: in his own narrow world, it's also the first time
2:24
Speaker 1: he's been indicted, and he's going to react against that
2:30
Speaker 1: in strident ways. Let me let me ask Tim Matt
2:35
Speaker 1: Miller here, by the way, thanks for joining us. Let
2:37
Speaker 1: me let me ask about Alvin Bragg, because I thought
2:42
Speaker 1: Bragg was less likely to indict Trump. In fact, I
2:47
Speaker 1: thought a couple of the people in his office wanted
2:49
Speaker 1: to indict Trump previously and quit because they were so
2:53
Speaker 1: angry that they weren't able to stopped by their boss,
2:57
Speaker 1: Alvin Bragg. So what's the deal with this? Remember remember
3:01
Speaker 1: the context of that. So Albert Bragge inherits, the case
3:03
Speaker 1: built by Cybance and sivances on. Prosecutors were very split
3:07
Speaker 1: around whether or not they had enough evidence to take
3:12
Speaker 1: to court on a criminal charge. Remember a criminal charge,
3:14
Speaker 1: the standard is the you have to prove intent on
3:18
Speaker 1: the part of the perpetrator. It's a very high bar,
3:20
Speaker 1: and I think the people in Sivance's office were very
3:25
Speaker 1: split down the middle on this around whether or not
3:27
Speaker 1: they had the mojo to take it to court. Dance
3:31
Speaker 1: basically leaves dumps this on Bragg's desk without resolving it.
3:35
Speaker 1: Brad comes in, he looks at it. He decides that
3:39
Speaker 1: there's too much division here. We can't bring this particular
3:42
Speaker 1: case involving you know, I think years and years of
3:46
Speaker 1: financial fraud allegation. But he goes down a new path
3:52
Speaker 1: based on other evidence he has involving the payments to
3:55
Speaker 1: store Mey Daniels and bookkeeping fraud attendant to that that.
4:00
Speaker 1: We know that that's one thing he's looked at. Here's
4:02
Speaker 1: the coveat on that. There's been reporting out there that
4:05
Speaker 1: say there maybe more than thirty counts in this indictment.
4:09
Speaker 1: He could well have assembled other evidence well beyond the
4:12
Speaker 1: Stormy Daniels thing. I think for this case to app
4:14
Speaker 1: gravitas and traction, it needs to have actually much more
4:19
Speaker 1: than that. Well is this reminds me of you know,
4:23
Speaker 1: when Merrick Garland had the FED raid Mara Lago. We
4:28
Speaker 1: all thought, man in order to do that, he must
4:31
Speaker 1: have something serious, But it so far doesn't look like
4:35
Speaker 1: he has anything serious. Well, wait a minute, you know,
4:38
Speaker 1: we have to let the legal system work through these things.
4:43
Speaker 1: The Moral Lago incident is very serious. Federal authorities believe
4:48
Speaker 1: he violated the Aspeona Jact. Potentially there are classified documents
4:53
Speaker 1: that he took down there without handling it in proper
4:57
Speaker 1: ways that any president, regardless of par or persuasion, should observe. Well,
5:02
Speaker 1: I mean, we have a president in office right now
5:04
Speaker 1: who don't interrupt me. Matt. I know you're prone to
5:07
Speaker 1: do that, but i'm your cast, so hear me out.
5:12
Speaker 1: The legal system is there as a process to protect
5:16
Speaker 1: all of us, regardless of party. It can be flawed,
5:19
Speaker 1: it can be inexact, but it is there for a reason,
5:22
Speaker 1: and there's very good reason. The Moral Lago incident is
5:25
Speaker 1: being examined, and it should be regardless who was in
5:29
Speaker 1: the in the white outs, and we don't know what
5:30
Speaker 1: they have yet. So we have to be patient with
5:33
Speaker 1: this so we can get properly aired publicly. And I
5:37
Speaker 1: think that's true of all of these cases. Patience is
5:39
Speaker 1: not one of my virtues. I know that. So Tim,
5:43
Speaker 1: help us put into content. I mean, we have the
5:45
Speaker 1: New York City issue, won't get more clarity on it
5:47
Speaker 1: next week when it's unsealed. Help us frame out the
5:50
Speaker 1: other risks for the former president in terms of this
5:55
Speaker 1: federal investigation as well as the investigation in Georgia, because
5:58
Speaker 1: those seems to seem to be on the first read,
6:01
Speaker 1: more serious and perhaps more of a problem for mister Trump.
6:05
Speaker 1: I don't know that they are. I honestly think you know.
6:08
Speaker 1: There's a civil case in New York, New York ag
6:11
Speaker 1: she's a Democrat, that one could it's a civil case.
6:15
Speaker 1: It could result in a serious financial penalty. It could
6:18
Speaker 1: put him out of business in New York. It's not
6:20
Speaker 1: going to put him in prison. It's not going to
6:23
Speaker 1: prevent him from running for the president. For the presidency
6:26
Speaker 1: in Georgia, there's a criminal case there by the Fulton
6:29
Speaker 1: County District Attorney Fani Willis that involves voting fraud. That
6:32
Speaker 1: is also unlikely to put him in jail. It also
6:35
Speaker 1: won't prevent him for running for president. Eugene Debs ran
6:38
Speaker 1: for president as a socialist from jail about one hundred
6:42
Speaker 1: years ago. Lyndon the Lararuge, a serial tax dodger, ran
6:46
Speaker 1: the for presidency for the presidency a number of times,
6:50
Speaker 1: even though he've been convicted of tax run crimes. Don't
6:53
Speaker 1: keep you out of the office. What keeps you out
6:55
Speaker 1: of the office is if you've led an insurrection. The
6:58
Speaker 1: fourteenth Amendment specifically points at insurrection as a disqualifying factor.
7:04
Speaker 1: It was instituted after the Civil War to prevent Confederate
7:07
Speaker 1: seditionists from running for office. That's in the DOJ case
7:12
Speaker 1: with the January sixth prosecution. In my mind, the moral
7:16
Speaker 1: Lago case, the in the January sixth case, those investigations
7:21
Speaker 1: are the only things that's going to keep him out
7:23
Speaker 1: of office. And potentially, and even they may not so
7:27
Speaker 1: for I think for people who have an emotional investment
7:29
Speaker 1: in the outcome of these that they think ultimately these
7:32
Speaker 1: are the only things they're going to stop Donald Trump
7:34
Speaker 1: from inhabiting the White House. That's a splender threat. The
7:36
Speaker 1: only they keeps Trump out of the White House ultimately,
7:39
Speaker 1: I think our voters. So by the way, I just
7:42
Speaker 1: want to point out we were talking this morning, and
7:44
Speaker 1: I'm sure a lot of people we'll talk about this.
7:47
Speaker 1: Tim you probably already know about it. I thought Trump
7:50
Speaker 1: would be would have been the first president ever arrested
7:53
Speaker 1: after office, and some reports of surface that Ulysses S.
7:56
Speaker 1: Grant had been arrested for speeding in the late eighteen
8:00
Speaker 1: on a horse's feeding on a horse, Yes, exactly. I
8:04
Speaker 1: find it incredibly hard to believe that's a good story, though, Tim,
8:08
Speaker 1: what do you think this? How do you think the
8:10
Speaker 1: other I don't know, Republican potential nominees. How do you
8:14
Speaker 1: think they're going to position themselves here? Are they going
8:17
Speaker 1: to just maybe lay low and let a play out.
8:20
Speaker 1: I think it's tricky, you know. I think Pence came
8:23
Speaker 1: out and defended Trump the Santis has. I think the
8:27
Speaker 1: tricky thing in terms of the politics of this is
8:30
Speaker 1: that Donald Trump has a very firm hold on about
8:32
Speaker 1: thirty percent of the Republican Party. It makes them an
8:35
Speaker 1: important fact in the primary races. He has I think
8:38
Speaker 1: statally turned off independent moderate Republicans and moderate Democrats, like
8:43
Speaker 1: the sort of middle middle tier of voters I think
8:47
Speaker 1: now know who he is, and it hobbles him as
8:50
Speaker 1: a national candidate. So the party has kind of held
8:52
Speaker 1: hostage to getting new people out on the stage who
8:57
Speaker 1: can get through the primary process without being capped by
9:00
Speaker 1: Trump while still being viable national candidates. And I think
9:04
Speaker 1: each of those individuals, Santists, Haley, they're all trying to
9:08
Speaker 1: navigate around that. I think they don't want to be
9:12
Speaker 1: appearing to be exactly in the same boat as Trump
9:14
Speaker 1: or supporting some of his you know, some of his
9:18
Speaker 1: greater obscenities. On the other hand, they also know that
9:20
Speaker 1: they need his voters. So it's a tricky balance. I think, Tim,
9:24
Speaker 1: just about twenty thirty seconds, is a Trump voter? Can
9:28
Speaker 1: a Trump voter be a Decantist voter supporter or a
9:31
Speaker 1: Haley supporter? Yeah, they can, I think so. I mean,
9:36
Speaker 1: I think I think they can. I think that, I
9:38
Speaker 1: think that. I just don't think enough. I don't think
9:42
Speaker 1: you can. I don't think de Santists or Haley can
9:44
Speaker 1: win only with Trump voters. Yeah, I think they need
9:47
Speaker 1: Trump voters plus moderates. And how do you thread that needle.
9:51
Speaker 1: It's like watching a hostage video. Yeah, yeah, all right, Tim,
9:54
Speaker 1: thanks so much for taking the time. You really wanted
9:56
Speaker 1: to get your perspective and opinion here. Tim O'Brien's is
10:00
Speaker 1: a senior executive editor for Bloomberg Opinion Again. He wrote
10:04
Speaker 1: The Trump Nation, The Art of Being the Donald in
10:06
Speaker 1: two thousand and five. It was described as the definitive
10:09
Speaker 1: biography of Donald Trump. So he has a lot of
10:11
Speaker 1: personal experience reporting on President Trump. We're gonna more coming up.
10:15
Speaker 1: This is Bloomberg. You're listening to the Team Cancer Live program,
10:20
Speaker 1: Bloomberg Markets weekdays at ten am easting on Bloomberg dot Com,
10:24
Speaker 1: the I Heart Radio app, and the Bloomberg Business App.
10:27
Speaker 1: We're listening on demand wherever you get your podcast. Some
10:32
Speaker 1: latest reporting on this Trump in Diamond that hit the
10:35
Speaker 1: tape late afternoon yesterday. Amory Horder in Washington, correspondent with
10:38
Speaker 1: Bloomberg Television and Bloomberg Law hosts June Grasso. They joined
10:42
Speaker 1: us here, both in studio. We appreciate that they both
10:45
Speaker 1: get the coveted gold star for being in studio. So, June,
10:49
Speaker 1: I want to start with you from a legal perspective,
10:52
Speaker 1: is this a good case? Well, first, let me say
10:56
Speaker 1: that we do not know exactly what the case is. Yeah,
10:59
Speaker 1: this is all speculation because the grandjury indictment is still
11:03
Speaker 1: under seal. If what we think it is is actually
11:08
Speaker 1: what it is, then it's a novel case. I mean,
11:11
Speaker 1: week or strong. It's it's different, It's never been done before.
11:14
Speaker 1: It's taking as it's taking a misdemeanor, which is the
11:18
Speaker 1: falsifying of business records and do and in order to
11:23
Speaker 1: make it a felony. I mean, they're not. They don't
11:25
Speaker 1: want to bring a People are complaining that they're even
11:27
Speaker 1: bringing this case. They don't want to bring a misdemeanor
11:29
Speaker 1: against the president. So former president, and so you take
11:32
Speaker 1: the falsifying business records, and you have to show that
11:35
Speaker 1: that Trump also had an intent to defraud that included
11:39
Speaker 1: an intent to commit we're thinking a second crime of
11:43
Speaker 1: election campaign finance violations. I mean, that's what we're thinking.
11:47
Speaker 1: So you're taking two, you're taking a felony and a
11:49
Speaker 1: misdemeanor and hooking them together. And it's it hasn't been
11:53
Speaker 1: done by New York prosecutors. I don't know if it's
11:55
Speaker 1: been done by any want anyone. So there's a chance
11:58
Speaker 1: that I don't think a judge would dismiss it before
12:01
Speaker 1: went to trial, because you want to get the jury verdict,
12:03
Speaker 1: and a judge is not going to be the one
12:04
Speaker 1: that wants to say that. People say I threw that
12:06
Speaker 1: out against Donald Trump. So but after on appeal, I
12:10
Speaker 1: mean an appellate cord could reverse Okay, So, Anne Marie
12:14
Speaker 1: from the political perspective, here again, the first time a
12:17
Speaker 1: former president has been indicted. What's the feeling in Washington,
12:21
Speaker 1: what's the feeling about and the first time Trump's been
12:22
Speaker 1: indicted and the first time Trump's which that's I think
12:25
Speaker 1: more shocking. Exactly exactly what's the feeling from Washington. Well,
12:29
Speaker 1: he's not just a former president, he's also a candidate
12:32
Speaker 1: right on the Republican Party to be their front runner.
12:35
Speaker 1: And he's right now he's is their front runner. He's
12:37
Speaker 1: winning in all their polls for twenty twenty four. So
12:41
Speaker 1: what you can imagine is that for Washington, this is
12:44
Speaker 1: just hardening those political divides. The one place you will
12:49
Speaker 1: not see a comment from is the White House. President
12:52
Speaker 1: Biden left this morning to go to Mississippi, and he
12:55
Speaker 1: was asked repeatedly, you have a comment asking anything about
12:58
Speaker 1: the indictment, any thoughts at all. I'm not going to
13:01
Speaker 1: comment on that. I'm not going to comment on that.
13:03
Speaker 1: The Republicans in Congress, though, there's talk of them even
13:06
Speaker 1: sending out a subpoena to Alvin brag because they think
13:09
Speaker 1: that this is well, they're calling it outrageous. So this
13:13
Speaker 1: is not going away. But we should also know, and
13:16
Speaker 1: this is something that potentially can coalesce around the president
13:21
Speaker 1: in the next few months, is this is only one
13:24
Speaker 1: of a number of cases that their former president is
13:28
Speaker 1: under investigation for and looks like right now, from what
13:31
Speaker 1: we know, and as June points out, we don't yet
13:33
Speaker 1: know what the act looks like the weakest and least
13:38
Speaker 1: important of any right. I mean, you've got a much
13:43
Speaker 1: more important case, it seems in Georgia. You've got a
13:46
Speaker 1: much more serious civil case. Here in New York you've
13:50
Speaker 1: got a serious federal capital cases. So yeah, but the
13:54
Speaker 1: prosecutor can't look at what other prosecutors are doing. He's
13:59
Speaker 1: got his own grand jury that he called. What is
14:01
Speaker 1: he supposed to say, Okay, grand jury, go home for
14:03
Speaker 1: a year, come back. Wish you can anyway, go home
14:06
Speaker 1: and come back, and will you know, after Georgia indits,
14:09
Speaker 1: then will indite. He's on his own track, and he
14:12
Speaker 1: has other problems to think about. He has statute of limitations,
14:15
Speaker 1: problems and all kinds of things to think about it.
14:17
Speaker 1: I mean, I do admit. You know Mark Palmerantz, who
14:20
Speaker 1: was a former prosecutor there who made a big deal
14:22
Speaker 1: about Trump, right, he called this case the zombie case.
14:27
Speaker 1: He said, it's been called the zombie case because it's
14:29
Speaker 1: been dead and then revived so many times. So obviously,
14:33
Speaker 1: you know, if it's been dead and then revived that
14:36
Speaker 1: it's not the strongest of cases. So but you got
14:38
Speaker 1: to sound resilient, are resiliently exactly how you watch that
14:43
Speaker 1: this is us? Yes? Yeah, the last of us that
14:46
Speaker 1: was they did you? I mean, you've heard the criticisms
14:52
Speaker 1: from Republicans that this is you know, personal even um,
14:56
Speaker 1: that it's a witch hunt. Obviously that's the term that
14:58
Speaker 1: they've used since before he was an elected the first time.
15:00
Speaker 1: But does Alvin brag have some kind of personal vendetto
15:05
Speaker 1: or issue with Donald Trump that we've seen any hint
15:07
Speaker 1: of previously. No. I mean, he did have a case
15:11
Speaker 1: against him when he was in the Attorney General's office,
15:14
Speaker 1: but he wasn't one of the people who ran on
15:18
Speaker 1: I'm going to prosecute Trump. He didn't. He would say
15:21
Speaker 1: I can't really talk about that in case the case
15:23
Speaker 1: comes before me. That old line. So, I mean, there's
15:26
Speaker 1: no And he's also a very careful man. He's a
15:30
Speaker 1: very known as a careful prosecutor who'll go over things
15:33
Speaker 1: and over things. So I have to believe that if
15:36
Speaker 1: he's bringing this case he thinks he can get a conviction.
15:40
Speaker 1: I mean, he's pretty sure of himself, because I don't
15:42
Speaker 1: think you'd bring a case like this unless you're sure
15:45
Speaker 1: that you can get a conviction. Remember he was the
15:47
Speaker 1: one that initially decided in February of twenty twenty two
15:50
Speaker 1: not to pursue an indictment. Yeah. Well, I mean this
15:56
Speaker 1: reminds me to some extent of the Marlagoid, which we
16:01
Speaker 1: said at the time, like, wow, you can't raid the
16:04
Speaker 1: ex president's house. We also said that it wasn't a
16:06
Speaker 1: raid because it was it has subpoena to get there.
16:09
Speaker 1: Only people who are divorced from reality only needed a
16:12
Speaker 1: subpoena because they wouldn't turn over these highly classified documents.
16:18
Speaker 1: I just everyone was waiting to see a smoking gun
16:21
Speaker 1: from Merrick Garland and we haven't. Well, no, there's a
16:23
Speaker 1: special counsel. This is being investigated. Special the special counsel
16:28
Speaker 1: is has been serving subpoenas on people. He's gotten He's
16:33
Speaker 1: gotten Trump's lawyer to testify about attorney client privilege by
16:38
Speaker 1: using the crime fraud exception that tells you that a
16:41
Speaker 1: judge thinks there's a crime there. Otherwise you don't have
16:44
Speaker 1: the crime fraud exception. Right, He's got all these pieces
16:46
Speaker 1: got Mark Meadows coming in vice president of Evans Mike
16:50
Speaker 1: Pants he also had a He also just won this
16:53
Speaker 1: week his case against Mike Pens, forcing him to come
16:56
Speaker 1: in to testify, but leaving a few things out because
16:59
Speaker 1: of the all the balls in the air, Guys, do
17:01
Speaker 1: we have any sense of timing for the federal case
17:04
Speaker 1: the Georgia? Is this measured in weeks? Months? Even more? Yeah?
17:09
Speaker 1: More more? Okay? But first of all, you know, we
17:12
Speaker 1: don't know yet when Georgia. That investigation has been going
17:16
Speaker 1: on longer than any other, and special grand jury came
17:19
Speaker 1: back with its recommendations and she's still as as far
17:22
Speaker 1: as I know, has not called another grand jury to
17:24
Speaker 1: indict the you know, the special Council. Who knows how
17:27
Speaker 1: long that'll take. But in this case, the last trial
17:31
Speaker 1: against Trump took up eighteen months I think to get
17:33
Speaker 1: to trial, and that was the checks Broad case. So
17:37
Speaker 1: who knows how long this will take to get to Well,
17:38
Speaker 1: hopefully it gets steals before November twenty twenty four, right, Well,
17:43
Speaker 1: that would be ideal. But June's point, that's we don't
17:46
Speaker 1: know that this stuff takes a very long time. Also,
17:51
Speaker 1: it doesn't matter, I mean in our history, American history.
17:55
Speaker 1: We had Eugene Devs who campaigned and ran for president
17:58
Speaker 1: when he was in jail on the Socialist part in
18:00
Speaker 1: the nineteen twenty Okay, this no. What I'm saying is
18:03
Speaker 1: even if the president, even if the president is going
18:06
Speaker 1: through this, maybe his party will want to say, we
18:09
Speaker 1: don't want to deal with this drama and we're going
18:10
Speaker 1: to choose another candidate. But he could still run for president. True,
18:13
Speaker 1: unless he gets busted for inciting an insurrection. Right, I'm
18:18
Speaker 1: talking about specifically about the New York case. Oh well,
18:21
Speaker 1: I'm talking about the other cases, the big ones. You know,
18:23
Speaker 1: Georgia him from holding federal office one hundred percent. And
18:29
Speaker 1: it's unlikely now that he lacks support from his party,
18:34
Speaker 1: right because complete opposite what you are seeing is the
18:37
Speaker 1: base is coming out, they are donating. He is campaigning
18:41
Speaker 1: off of this. Since he said I will be arrested,
18:44
Speaker 1: he has been sending out campaign letters. He has been
18:47
Speaker 1: talking about it. You saw his rally in Waco, Texas, saying,
18:51
Speaker 1: I am the one that it is a victim here.
18:54
Speaker 1: I need your support. Look at what these Democrats are doing,
18:57
Speaker 1: and he's forcing every Republican to make decision on who
19:01
Speaker 1: they stand by. So not only going to see the
19:04
Speaker 1: hardening of politics between Democrats and Republicans, I think you'll
19:06
Speaker 1: see a hardening of politics within the Republican Party. Those
19:09
Speaker 1: that say we need to lean into him and support
19:11
Speaker 1: the former president, those that say he didn't win us
19:14
Speaker 1: the midterm elections. He didn't win the last election. It's
19:16
Speaker 1: time we move on to a new leader. When does
19:18
Speaker 1: it get tiring? The witch hunt thing? I'm a victim.
19:22
Speaker 1: I can't. I can't believe he's still able to raise
19:24
Speaker 1: money on that. He's been saying that for how many
19:26
Speaker 1: years before he became a president. So, I mean, it'd
19:30
Speaker 1: be interesting to see how this shakes out. And from
19:33
Speaker 1: the Washington perspective, how aggressive do you think the Republicans
19:35
Speaker 1: and Congress will get here? Well, they'll be incredibly aggressive.
19:39
Speaker 1: We already before the former president was indicted, you had
19:43
Speaker 1: Jim Jordan, you had James Komer. They're coming out sending
19:46
Speaker 1: letters to Alvin Bragg. They want him to come to DC.
19:49
Speaker 1: They want a hearing about this. But it's it's adhering
19:52
Speaker 1: to nowhere. Right, the Republicans only hold the House. All
19:55
Speaker 1: of this is going to be posturing and it does
19:57
Speaker 1: remove a lot of oxygen in the room for some
19:59
Speaker 1: other big issues they're supposed to be tackling. I just
20:02
Speaker 1: have to say one thing. I can't imagine Alvin Bragg
20:06
Speaker 1: going to Washington heard a committee. They want information on
20:10
Speaker 1: a grand jury that's secret, and they want information on
20:14
Speaker 1: what the prosecutor's office is doing before a trial that's
20:18
Speaker 1: not going to happen. Posturing. Posturing is a word, all right. Guys,
20:21
Speaker 1: Hemory Horder and Jeran Grassop, both from Bloomberg News and
20:25
Speaker 1: Bloomberg Television, bring us the latest year. You're listening to
20:28
Speaker 1: the tape Cancer Live program Bloomberg Markets weekdays at ten
20:31
Speaker 1: am Eastern on Bloomberg Radio. Tune in alf Bloomberg dot
20:35
Speaker 1: Com and the Bloomberg Business Half. You can also listen
20:38
Speaker 1: live on Amazon Alexa from our flagship New York station,
20:41
Speaker 1: Just Say Alexa playing Bloomberg eleven thirty. Take a look
20:48
Speaker 1: again at this story President Trump being former President Trumping
20:51
Speaker 1: indicted by New York and what it really means for
20:55
Speaker 1: the political landscape, not just for mister Trump, but also
20:59
Speaker 1: for the general presidential election coming up in twenty twenty four.
21:02
Speaker 1: We can do that today with the Director of the
21:05
Speaker 1: Center for American Politics and Policy for Around University, Professor
21:09
Speaker 1: Wendy Schiller joins us professor, thanks so much for taking
21:12
Speaker 1: the time here. I mean, just you know, incredible news
21:15
Speaker 1: broke yesterday about the indictment from New York. What do
21:20
Speaker 1: you think the political implications are for Let's just start first,
21:23
Speaker 1: for the former president. Well, I mean, he'll get a
21:28
Speaker 1: lot of attention. Trump loves attention, and he will be
21:31
Speaker 1: able to shore up his support within the Party's already
21:35
Speaker 1: asking for small level donations like twenty four, twenty five
21:38
Speaker 1: dollars or something. I think he's doing twenty four dollars
21:40
Speaker 1: for twenty twenty four for his defense, So it'll be
21:44
Speaker 1: a short term boost for him. And if people like
21:48
Speaker 1: Ronda Santis or Tim Scott or thinking he's already in
21:50
Speaker 1: the race, but Mike Pompeo anybody else is thinking of running,
21:53
Speaker 1: if they wait too long, he'll just soak up all
21:56
Speaker 1: of that momentum, energy and oxygen and he may actually
22:00
Speaker 1: gain a lead that might be hard to surmount, even
22:03
Speaker 1: though voting hasn't even begune in the primers, does this case,
22:06
Speaker 1: Wendy matter to potential Trump voters? I mean, even Republicans
22:11
Speaker 1: who don't necessarily support them all the time. Do they
22:14
Speaker 1: care if he paid hush money to a former porn star.
22:18
Speaker 1: I'm not sure. It's the nature of the accusations as
22:21
Speaker 1: the fact that the doors now open to indict them
22:24
Speaker 1: for other things that I think they do care about,
22:26
Speaker 1: like interfering with the election results in Georgia or promoting
22:29
Speaker 1: violence on January sixth. I mean, I think that's the
22:32
Speaker 1: big question mark here. The political jeopardy for Donald Trump
22:36
Speaker 1: is not necessarily in this indictment. It's the fact that
22:39
Speaker 1: he is indicted at all, and that the Manhattan DA
22:42
Speaker 1: has taken this step means that other district attorneys or
22:46
Speaker 1: the United States Justice Department could feel a little bit
22:49
Speaker 1: more comfortable indicting a former president since they won't be
22:53
Speaker 1: the first ones. Now, all right, So let's say your
22:56
Speaker 1: Rhonda Santis or any of the other Mister Mike Pence
22:59
Speaker 1: and the other folks think, hey, Nicky Haley, thank you
23:03
Speaker 1: that maybe considering running against former President TRUMPO. How do
23:09
Speaker 1: you think they should play her? How do you think
23:10
Speaker 1: they will play it? Well, you know, there's a real
23:12
Speaker 1: big gulf. I mean, it's a really great question. There's
23:14
Speaker 1: a big gulf between how the potential presidential candidates should
23:17
Speaker 1: play and how the House of Representatives. Republicans are going
23:20
Speaker 1: to have to play it because you know, you can
23:22
Speaker 1: get in, get out, and you can say, well, maybe
23:24
Speaker 1: it doesn't go his way, or you can't give them
23:27
Speaker 1: all that you know, it's just going to cloud everything
23:30
Speaker 1: else is going to be the Trump story. You can't
23:31
Speaker 1: give them all that press all the time, you just
23:33
Speaker 1: will never get any momentum. Nicky Haley already announced essentially,
23:37
Speaker 1: and we're still treating her as a maybe. So I
23:40
Speaker 1: think this is the big dilemma for them. And if
23:41
Speaker 1: you're Lawanda Santis and your argument is that, well, i'll
23:44
Speaker 1: have to wait till the Florida legislature goes out, I
23:45
Speaker 1: think that's the end of April, if I'm not mistaken.
23:48
Speaker 1: You know that's a whole month away. That's you know,
23:50
Speaker 1: you're leaving a month full of a press hole for
23:53
Speaker 1: Donald Trump. And if you want to be president United States,
23:56
Speaker 1: chops take a risk. You have to be willing to
23:58
Speaker 1: jump in and say I support at the former president,
24:00
Speaker 1: but I also think I'll be a good president. Pay
24:03
Speaker 1: attention to me. Are there any Republicans who other than
24:07
Speaker 1: Liz Cheney who say I don't support the former president.
24:11
Speaker 1: I think he incited violence at the Capitol and did
24:17
Speaker 1: a disservice to our democracy by doubting the twenty twenty election.
24:21
Speaker 1: Or are they all pretty much behind him, because even
24:24
Speaker 1: Mike Pence, you know, even Mike Pence seems to still
24:28
Speaker 1: support Donald Trump. After Trump essentially like put the knife
24:32
Speaker 1: in his back. Well, I've actually left him in an
24:36
Speaker 1: extraordinarily dangerous situation, not just like not just you know, literally,
24:41
Speaker 1: it's really it's something to behold. I don't think we've
24:44
Speaker 1: ever seen a former president. Even Nixon when he came
24:47
Speaker 1: back in one in sixty eight, didn't have a hold
24:49
Speaker 1: on the party in sixty four. So it's really you
24:52
Speaker 1: just haven't seen this kind of hold. And for the
24:55
Speaker 1: House Republicans who just won, particularly in New York and
24:58
Speaker 1: California for example, the newbies, they're worried about a primary.
25:01
Speaker 1: I mean, they're always worried about a primary, but they're
25:03
Speaker 1: really worried about a primary, and that primary challenge will
25:05
Speaker 1: come from an avid Trump supporter. So the House Republicans
25:10
Speaker 1: have to be behind Donald Trump now for their own
25:12
Speaker 1: individual survival. That means McCarthy has to be behind him
25:15
Speaker 1: a speaker, because he can't stay speaker if he doesn't
25:18
Speaker 1: keep the house. So it puts them in his bind,
25:21
Speaker 1: and then the party can't move forward, and so they're
25:24
Speaker 1: they're really stuck. And unless somebody else is an alternative,
25:28
Speaker 1: they can say they believe everything Trump believes, but without
25:31
Speaker 1: the baggage, then there's nowhere for them to turn and
25:34
Speaker 1: it's sort of almost a stalemate within the Republican Party.
25:37
Speaker 1: All right, profession we want to get the legal side
25:39
Speaker 1: of this right now. We can do that with a
25:40
Speaker 1: former federal prosecutor and former special counsel to Robert Mueller
25:44
Speaker 1: when you worked at the DOJ, that is Michael Zelden. Michael,
25:48
Speaker 1: thanks so much for joining us here. What do you
25:50
Speaker 1: make of the legal case for New York against former
25:54
Speaker 1: President Trump? Here that was I know it hasn't been unsealed,
25:57
Speaker 1: but what we know now, Well, first, of course, as
26:00
Speaker 1: you just said, we have to wait for it to
26:02
Speaker 1: be unsealed to see exactly what he's charged with, because
26:05
Speaker 1: there's been a lot of speculation about that. But going
26:08
Speaker 1: with what's been available to us in the public record,
26:10
Speaker 1: it appears that he'll be charged with multiple counts of
26:14
Speaker 1: business record misstatements that will be each time Trump Org
26:21
Speaker 1: made a repayment to Michael Cohen as quote unquote a
26:25
Speaker 1: legal fee about ten or twelve of those those will
26:28
Speaker 1: be separate counts of business records violations. Then the question'll
26:34
Speaker 1: be will they make that into that group of misdemeanors
26:37
Speaker 1: into a felony by saying all those payments were made
26:41
Speaker 1: for the purpose of evading federal election or state election
26:47
Speaker 1: violations because they were hiding him from the Federal Elections Commission,
26:52
Speaker 1: and therefore it's a felony. So that's what we're thinking
26:55
Speaker 1: will likely be the case, multiple business records cases and
26:58
Speaker 1: then federal election felony on top of the business records. Michael,
27:04
Speaker 1: what's the distinction here between state and federal because this is,
27:08
Speaker 1: you know, a New York DA and I've heard a
27:13
Speaker 1: lot of people say, well, it's going to be hard
27:15
Speaker 1: to appeal it to a federal appeals corrid or get
27:18
Speaker 1: it up to that level from here. Well, it's not
27:20
Speaker 1: a matter of whether it's appealed or not appealed. The
27:22
Speaker 1: question is a difficult legal question is can you take
27:26
Speaker 1: a state violation the business records and turn it into
27:30
Speaker 1: a felony where the felony is a federal felony. If
27:35
Speaker 1: they have a state felony and they say the business
27:39
Speaker 1: records misstatements were made to further the state felony, then
27:44
Speaker 1: they're on solid ground. If they're saying it was to
27:47
Speaker 1: further a federal felony, then you have this tricky business
27:50
Speaker 1: of a state crime being enhanced by violating a federal law,
27:55
Speaker 1: and that has not been tested, Professor Schiller. To the
27:59
Speaker 1: extent that these federal issues move forward in the does
28:03
Speaker 1: that change the calculus a political calculus for for mister Trump,
28:07
Speaker 1: for maybe presidential Candidas, and maybe in his supporting Congress.
28:15
Speaker 1: He's the political calculation. Mister Dulton's incredibly articulate. And I
28:19
Speaker 1: was listening closely, but not everybody has the time to
28:22
Speaker 1: listen this closely. This is a complicated case. It's probably
28:25
Speaker 1: the most complicated indictment that might come down against the
28:28
Speaker 1: former president if we look at all the possible ranges
28:30
Speaker 1: of charges he faces in other cases. It's very hard
28:34
Speaker 1: to sell, it's very hard to explain. Republicans know that,
28:38
Speaker 1: and Democrats are just chomping at the bit to have
28:40
Speaker 1: this man held accountable whatever way they can, so they
28:44
Speaker 1: don't really care what the nature of the case is.
28:47
Speaker 1: It matters, I think also to know that it's unclear
28:50
Speaker 1: this would even prohibit him from running for office. Even
28:52
Speaker 1: it gets convicted and serves time and comes out again,
28:55
Speaker 1: he may still be able to run for office. So
28:58
Speaker 1: I mean, there are all sorts of ways in which
29:00
Speaker 1: the real on the ground applications for most people are,
29:03
Speaker 1: you know, did he d lie, did he break the law,
29:05
Speaker 1: what did he do? Or I just I can't stand
29:08
Speaker 1: them and I want to see him punished. And I
29:10
Speaker 1: think these are this is the political environment in which
29:12
Speaker 1: these messages are going to be sent out by both parties.
29:15
Speaker 1: He does seem to be the test Tethlon Don does
29:18
Speaker 1: Michael Zelden, do you see in any of these cases
29:22
Speaker 1: in Georgia on the federal level, any likelihood that Donald
29:26
Speaker 1: Trump is you know, found guilty and you know, not
29:30
Speaker 1: able to run for president because he claims he's a
29:32
Speaker 1: completely innocent person. Well, let's leave his claim aside for
29:38
Speaker 1: a second. The only crime that would in theory bar
29:43
Speaker 1: him from running for president again is if he's convicted
29:46
Speaker 1: of seditious conspiracy. In the January Sixth case, the Florida case,
29:52
Speaker 1: the Georgia case, this New York case. None of them
29:55
Speaker 1: would bar him from running for office again. He might
29:58
Speaker 1: have convicted as a felon not be able to vote,
30:02
Speaker 1: but he can still run. And so that's not really
30:05
Speaker 1: on the table except for a seditious conspiracy. And you know,
30:09
Speaker 1: whether he is able to capitalize this on political grounds
30:14
Speaker 1: really remains to be seen, because, as the professor indicated,
30:18
Speaker 1: there is a need, I think in the Republican Party
30:21
Speaker 1: for them to move past Trump and his demagoguery. I
30:25
Speaker 1: don't think that is a sustainable general election party, but
30:30
Speaker 1: they're right now tethered to him, and they are unwilling
30:34
Speaker 1: for short term benefit to individual members willing to move
30:38
Speaker 1: beyond that. So they're sacrificing the long term health of
30:41
Speaker 1: their party for their individual short term benefit, like Speaker McCarthy,
30:47
Speaker 1: and that's you know, their choice. YEP, it is all right, Michael,
30:50
Speaker 1: Thank you so much for joining us. Michael Zelden, former
30:52
Speaker 1: federal prosecutor, the former special counselor Robert Muller when he
30:55
Speaker 1: worked at the DJ and also the professor Wendy Schiller.
30:59
Speaker 1: She's a director of the Center for American politics and
31:02
Speaker 1: policy for Brown University. You're listening to the Team Cancer,
31:06
Speaker 1: a live program Bloomberg Markets weekdays at ten am easting
31:10
Speaker 1: on Bloomberg dot Com, the I Heart Radio app, and
31:12
Speaker 1: the Bloomberg Business App. We're listening on demand wherever you
31:15
Speaker 1: get your podcast. I'm gonna go rate to our next guest,
31:20
Speaker 1: John Authors. He's an opending columnist for Bloomberg News. And
31:24
Speaker 1: you can probably tell he's not from these parts. He's English,
31:29
Speaker 1: he's not from around He's not from around here. But
31:32
Speaker 1: somehow he's become a rabid Red Sox fan. I have
31:35
Speaker 1: no idea how that happened. But he's got a piece
31:38
Speaker 1: out today where he's gonna tie in moneyball the opening
31:42
Speaker 1: of baseball season to investing. I have no idea how
31:46
Speaker 1: he tried to do that, But John, give us your
31:48
Speaker 1: thoughts here on moneyball investing. Okay, just first making sure
31:52
Speaker 1: you know that I do have a US passport. Okay, yeah,
31:55
Speaker 1: but you live in New York. Why are you Red
31:57
Speaker 1: Sox fan? My first experience that this wonderful country was
32:01
Speaker 1: an exchange student of the high school in Belmont, mass
32:05
Speaker 1: And this is true. So I stayed with a family
32:09
Speaker 1: and the oldest brother was away at college, and I
32:12
Speaker 1: had his bedroom, and I slept my first night in
32:15
Speaker 1: this country underneath a signed photograph of Bobby or I
32:21
Speaker 1: had no choice. I have been a hardcore Boston plan
32:24
Speaker 1: even though I've never never picked up a Boston accent,
32:28
Speaker 1: which is which I think it could all be grateful now.
32:31
Speaker 1: In terms of baseball, basically, the rule changes that they've
32:37
Speaker 1: made for this season are very interesting, and I think
32:40
Speaker 1: they reflect the way baseball has moved in its use
32:45
Speaker 1: of stats and data, and that there's a very close
32:49
Speaker 1: parallel there with the way markets have moved. That quants
32:55
Speaker 1: and factory investors have steadily got ever more sophisticated in
33:00
Speaker 1: their use of stats, which has required everybody else to
33:04
Speaker 1: get that much more sophisticated, with the result that you
33:08
Speaker 1: have a market where it's very difficult for new entrance
33:13
Speaker 1: to have any success at all unless they've got some
33:16
Speaker 1: really powerful computers, which is not so dissimilar from the
33:21
Speaker 1: baseball revolution of looking at the launch angle with which
33:25
Speaker 1: you hit the ball, looking at measures for applying the shift,
33:31
Speaker 1: and so on, that ruthlessly using stats to organize your
33:38
Speaker 1: baseball team increases your chance of winning and makes it
33:42
Speaker 1: a much worse spectacle and much harder for others to compete.
33:47
Speaker 1: So that was that's my basic comparison there, and so
33:50
Speaker 1: bringing it to investing, how does that work? Which is
33:52
Speaker 1: much less interesting. So, well, we don't have the same
33:57
Speaker 1: kind of rule changes, do we. I mean, baseball started
34:00
Speaker 1: yesterday and they got a twenty second shot clock essentially
34:03
Speaker 1: pitch clock. You can only what you can only try
34:06
Speaker 1: and pick off a runner twice. Yes, then apparently the
34:10
Speaker 1: bigger Yeah, the basses are bigger. Fourteenth inning, you get
34:13
Speaker 1: a runner on base if you get out that far
34:15
Speaker 1: on second base. Um, that's I have a bit of
34:18
Speaker 1: a problem with it. But then I'm a purist. That
34:21
Speaker 1: seems gimmicky to me. Yes, but the I mean, the
34:24
Speaker 1: Red Sox managed to lose their first game of the
34:27
Speaker 1: season ten nine, and even though there was that much scoring,
34:30
Speaker 1: it barely lasted more than three hours, which which is
34:34
Speaker 1: something you'd normally expect the game. If only soccer would
34:37
Speaker 1: do something like that, well, sucker lasting more than nineteen
34:41
Speaker 1: minutes or less than nineteen minutes. And anyway, Okay, I
34:45
Speaker 1: thought you wanted to worth investing, so yeah, in terms
34:47
Speaker 1: of in terms of investing, yes, You're quite right. There
34:50
Speaker 1: is no um. There's no equivalent of theo Epstein to
34:54
Speaker 1: come in and change the rules on you. In investing,
34:58
Speaker 1: it's ultimately the market. The way people behave, the way
35:04
Speaker 1: they invest, the way they deploy funds changes the way
35:07
Speaker 1: the market behaves. But there is no opportunity to just
35:12
Speaker 1: change the rules. I think what you have is an
35:15
Speaker 1: arms race where more and more people are going to
35:18
Speaker 1: spend ever more money trying to get data for every subtle,
35:24
Speaker 1: little extra edge they can get. So it's no longer
35:28
Speaker 1: about analyzing, which is this is what happened in money ball.
35:32
Speaker 1: You take these traditional statistics like batting average, which is
35:38
Speaker 1: a really misconceived notion, unfortunately, dating back to a British
35:43
Speaker 1: journalist called Henry Chadwick in the nineteenth century look him up,
35:47
Speaker 1: who misapplied concepts from crickets. I'm very embarrassed about this,
35:51
Speaker 1: but initially looking for things like value stocks, momentum stocks,
35:57
Speaker 1: and so on was analogous what Michael Lewis wrote about
36:02
Speaker 1: in Moneyball. It's taking the stats we can all see
36:05
Speaker 1: and looking at them more cleverly. This now is like
36:09
Speaker 1: using your laser gun and your brilliant cameras to see
36:13
Speaker 1: launch angles and defensive positioning or whatever. It's a crunching
36:19
Speaker 1: data on trades, on credit card purchases, on you name.
36:23
Speaker 1: It's analyzing text of every time of CEO speaks in
36:28
Speaker 1: public or whatever, anything that might conceivably get a new edge. Yes, yes, exactly.
36:38
Speaker 1: See who's see who's still got a lot of cars
36:40
Speaker 1: in there in their warehouse or who hasn't or whatever.
36:44
Speaker 1: And I don't see how this ends because there is
36:49
Speaker 1: no CEO epstein of the market to just say no,
36:52
Speaker 1: we're going to stop doing it that way now. So
36:55
Speaker 1: I suspect what you see is that investing will become
36:59
Speaker 1: a game of people investing ever more silly amounts of
37:03
Speaker 1: money in crunching data ever more precisely. And that does
37:10
Speaker 1: you know. Obviously this concerns about TikTok and so on,
37:13
Speaker 1: about the lack of privacy these days. I think that
37:16
Speaker 1: probably means that the investment industry will come face to
37:20
Speaker 1: face with the people who are worried about that private
37:24
Speaker 1: privacy in the in the surveillance state. So, I mean,
37:28
Speaker 1: we've had data, high speed trading, all this stuff has
37:31
Speaker 1: been in the market for a while now, I mean
37:34
Speaker 1: in AI yeah, so I guess your contention, John, and
37:38
Speaker 1: you know, get used to it, because it ain't going
37:39
Speaker 1: any word, and in fact, it's going to get become
37:41
Speaker 1: more the piece I wrote, just remember the main point.
37:47
Speaker 1: There was a very interesting piece of research coming out
37:49
Speaker 1: of Mannumert showing that factors are decaying, that they are
37:53
Speaker 1: not so the value factor, of the momentum factor and
37:56
Speaker 1: so on are not working as well as they used to.
37:59
Speaker 1: They have ask people have thrown more armory at exploiting
38:04
Speaker 1: anomalies when they can find them, those anomally steadily go away,
38:09
Speaker 1: and so yes, a lot of this has been around
38:11
Speaker 1: for a long time, but we're getting to the point
38:13
Speaker 1: where you no longer have an edge by doing those
38:18
Speaker 1: things in the same way that Billybean no longer has
38:20
Speaker 1: an age by looking on base percentage, and that requires
38:23
Speaker 1: you to pay more money to get ever more. Excuse dates, John,
38:28
Speaker 1: We had some economic data came out today. A lot
38:31
Speaker 1: of folks are focusing on inflation these days. Came in
38:34
Speaker 1: a little bit better than expect it a little bit
38:37
Speaker 1: a little bit, and what's your region as to how
38:40
Speaker 1: our federal reserve will We'll look at this data. I
38:44
Speaker 1: haven't had the chance to go crunching through all of
38:47
Speaker 1: the angles of it. Yet I, at first glance, I
38:51
Speaker 1: don't think it means that they don't hike. I think
38:55
Speaker 1: the way the market has recovered as swiftly as it has,
38:59
Speaker 1: and that the early signs that there really is so
39:02
Speaker 1: much deposit flight going on suggest that the banking crisis
39:08
Speaker 1: really isn't a reason for them to stay their hand,
39:12
Speaker 1: and it's still too far above targets for them to
39:15
Speaker 1: seem to change course at this point. Isn't it comforting
39:18
Speaker 1: if they hike a little? I mean, I felt good
39:20
Speaker 1: after the ECB did exactly There was a risk. I
39:26
Speaker 1: criticized for saying this at the time, and if if
39:28
Speaker 1: they had not hiked at all, or even cutters, some
39:31
Speaker 1: people would have thought that would have been a very
39:33
Speaker 1: clear signal. The said is a charge of regulating the
39:37
Speaker 1: banking system, and they obviously think something really bad has
39:40
Speaker 1: just happened. That confidence does have its own self reinforcing factors,
39:48
Speaker 1: particularly when you're talking about banking. If people lose confidence
39:52
Speaker 1: in the back, it will lose it will lose all
39:55
Speaker 1: its deposits, even though there's nothing wrong with it. So
39:58
Speaker 1: I think they probably made the right call this month
40:02
Speaker 1: with the twenty five bits, the market at the moment
40:06
Speaker 1: thinks we'll get another twenty five bits and that will
40:09
Speaker 1: be the end of it. I think that's a reasonable baseline.
40:12
Speaker 1: I'm still nervous about we need more inflation. I'm still
40:16
Speaker 1: nervous about the notion that Rachel will be coming down
40:19
Speaker 1: by the end of being Hey, Johnny, you mentioned that
40:22
Speaker 1: you've gained your US citizenship. Good for you, but I'm
40:25
Speaker 1: guessing you're still an Englishman at heart. May eighth, the
40:29
Speaker 1: Carnation of King Charles the third, How locked in or
40:31
Speaker 1: are you going to be on that or not? I
40:34
Speaker 1: had forgotten that was happening on I thought you were
40:40
Speaker 1: going to sell me the FA Cup final the day
40:42
Speaker 1: we see I know that's unblazed these it still feels
40:46
Speaker 1: very strange that the national anthem has actually changed to
40:50
Speaker 1: God's Save the King. It's very strange that the barristers
40:54
Speaker 1: who bring prosecutions in course aren't gold QC for Queen's
40:58
Speaker 1: cancel anymore. They oh interesting in the sunshine bands and yes,
41:04
Speaker 1: so it feels very strange that right this guy's in charge. Well,
41:12
Speaker 1: I suggest just get a nice point, raise a glass
41:15
Speaker 1: and toast your your new King. John Author, Senior editor
41:18
Speaker 1: for Bloomberg Opinion. You're listening to the tape cans are
41:21
Speaker 1: live program Bloomberg Markets weekdays at ten am Eastern on
41:25
Speaker 1: Bloomberg Radio, tune in app, Bloomberg dot Com, and the
41:28
Speaker 1: Bloomberg Business App. You can also listen live on Amazon
41:32
Speaker 1: Alexa from our flagship New York station. Just say Alexa
41:35
Speaker 1: play Bloomberg eleven thirty. Good way to end the week
41:41
Speaker 1: here on an up note. Good way to end the solid,
41:44
Speaker 1: ending the week, ending the month, ending the quarter. Exactly right,
41:47
Speaker 1: that's not too bad again, sp up nine tenths to
41:49
Speaker 1: one percent. Let's get a sense of kind of what
41:51
Speaker 1: some of these professional folks are doing at there, what
41:53
Speaker 1: kind of advice that they given to their clients? And
41:56
Speaker 1: Ahn equity strategist at Wells Fargo joins us, and she was,
42:00
Speaker 1: I'm going to the part of the Yale varsity sailing team.
42:03
Speaker 1: That's pretty cool. My son was a sailor at Penn State,
42:06
Speaker 1: so that's kind of cool. Those sailing people are a
42:08
Speaker 1: little strange though, Anna, and thanks for joining us here.
42:12
Speaker 1: What are you telling your clients here these days? After
42:14
Speaker 1: a brutal twenty twenty two, but a nice snapback so
42:17
Speaker 1: far in the first quarter. Well, you know, the good
42:20
Speaker 1: thing about being a sailor, you have that spatial awareness. Yeah,
42:23
Speaker 1: we're pretty good at that big macro picture, and what
42:26
Speaker 1: we're talking to clients spout right now is to not
42:29
Speaker 1: be fooled by sort of the headstake we've been getting out.
42:32
Speaker 1: You're right, according to date, markets are up. You're seeing
42:35
Speaker 1: pretty strong rally recently, but I think a lot of
42:38
Speaker 1: that's driven by what we've seen aggressive lowering in yields
42:42
Speaker 1: and the perception of the head of the end of
42:45
Speaker 1: the tightening cycle. I think that's premature and a lot
42:48
Speaker 1: of that's going to give back. This is the opportunity
42:50
Speaker 1: to reposition the portfolio. So do you think that means
42:54
Speaker 1: this is going to be a pivot point for markets
42:56
Speaker 1: as well? The last few days there didn't seem to
42:59
Speaker 1: be much reason for Ralley, and I think a lot
43:01
Speaker 1: of it was window dressing and momentum. Does that change
43:04
Speaker 1: in Q two now? You bring up a good point
43:06
Speaker 1: about momentum. Part of it was a sort of initial
43:09
Speaker 1: fight to safety, and then another part of it was
43:12
Speaker 1: just the natural mechanics the window dressing lower yield growthier stocks,
43:17
Speaker 1: especially more tech, and you saw the Nastac really rally.
43:20
Speaker 1: But that rotation for US is coming in which we
43:23
Speaker 1: think a lot of those trades could be a longer
43:26
Speaker 1: term We want to see growth in the longer term,
43:28
Speaker 1: but in the immediate term we were pretty much shedding
43:31
Speaker 1: a lot of that value exposure. We're staking for lower
43:33
Speaker 1: balance sheets. That's kind of the direction we're going in.
43:37
Speaker 1: And how did you in your team at Wells Fargo,
43:40
Speaker 1: how are you kind of factoring in some of the
43:43
Speaker 1: termoil we've seen in the US regional banking space, and
43:46
Speaker 1: then of course the news which made meet idiosyncratic over
43:50
Speaker 1: credit suite. So the regional banking fallout that we've seen,
43:54
Speaker 1: we think there could be much bigger ripple effects because
43:57
Speaker 1: what we're talking about here, it's not just a couple
43:59
Speaker 1: of banks that had a very peculiar situation. It's interest
44:03
Speaker 1: rate risk. We had the FED tighten at an extremely
44:07
Speaker 1: aggressive pace, almost unprecedented in history, and that interest rate
44:11
Speaker 1: risk affects more than just a handful of banks. We
44:14
Speaker 1: just haven't seen it all come to light yet. On
44:16
Speaker 1: top of that, you're already seeing regulations coming down, So
44:20
Speaker 1: that combination of additional regulation and what could be more
44:25
Speaker 1: problems for banks as they realize their unrealized losses or
44:29
Speaker 1: as we see more difficulty with credit liquidity due to
44:33
Speaker 1: the caution in the financial industry. This combined just tightened
44:38
Speaker 1: financial conditions even if the FED decides to stop. So
44:41
Speaker 1: that's what we're concerned about here and why we're taking
44:43
Speaker 1: a little more negative view. But the FED isn't going
44:46
Speaker 1: to stop, at least this next meeting. We still expect
44:49
Speaker 1: them to hike twenty five bases points, right, And I
44:52
Speaker 1: also wonder what your take is on the market pricing
44:56
Speaker 1: in cuts by year, and it seems terribly unlikely to me,
44:59
Speaker 1: but it's happening. If you look at the w RP
45:02
Speaker 1: function on the Bloomber terminal, Yeah, looking at it right now,
45:05
Speaker 1: and you're right, it's happening. But remember about a year ago,
45:09
Speaker 1: people thought they were going to be cut to mid
45:10
Speaker 1: year as well, and that had to get priced out.
45:13
Speaker 1: As that got priced out, you saw yield rise again
45:16
Speaker 1: and equities have a difficult time. I think that's something
45:19
Speaker 1: that we're going to expect again. I think these cuts,
45:21
Speaker 1: You're right, they're premature and as a market has to
45:24
Speaker 1: reprice that that kind of turmoil is where we want
45:27
Speaker 1: to be cautious and make sure we're position in the
45:30
Speaker 1: right way. But I think longer term when we talk
45:33
Speaker 1: longer term, right now you've got the ten year nomen
45:35
Speaker 1: of three half. We think that it can go up
45:38
Speaker 1: to about three sixty three seventy. The longer term it's
45:41
Speaker 1: coming back down, and that longer term trend is how
45:44
Speaker 1: we want a position. That's why we're favoring that long
45:46
Speaker 1: duration trade. How about valuation here? A lot of folks say,
45:51
Speaker 1: all right, we might get a trade here on you know,
45:53
Speaker 1: a pause in the FED, but long term valuation still
45:56
Speaker 1: not our friend here. And given maybe some of the
45:59
Speaker 1: macro uncertainties out there, how are you guys thinking about that.
46:03
Speaker 1: We're being very careful about valuation, very particular. What we
46:07
Speaker 1: want here is growth at the right price. Now that
46:10
Speaker 1: sounds cheesy and it sounds money on that back in
46:13
Speaker 1: the day, right and it sounds obvious, But right now
46:18
Speaker 1: it's easy to grab for growth because you're fearful of
46:21
Speaker 1: a recession, or grab for growth because that's kind of
46:24
Speaker 1: the safety trade that was ingrained in US when we
46:26
Speaker 1: had that nice growth momentum trade pre pandemic. But what
46:29
Speaker 1: we've got to notice now is the better valuations are
46:32
Speaker 1: slightly down the cap we like, especially the mid growth
46:35
Speaker 1: MidCap growth space. You're seeing more friendly valuations, you're still
46:39
Speaker 1: seeing steady growers, and you're still seeing clean balance sheets.
46:43
Speaker 1: So this combination is a pretty sweet spot for us
46:46
Speaker 1: that we think there could be more edge rather than
46:48
Speaker 1: chasing these really big large cap growth names that may
46:51
Speaker 1: already be too expensive, in particular with some of the
46:55
Speaker 1: rally we've seen in the last few weeks. What kind
46:59
Speaker 1: of advice do you give just your average retail investor,
47:04
Speaker 1: maybe somebody at a bar or ask your take on
47:06
Speaker 1: a sixty forty portfolio? Is that dead or is that
47:10
Speaker 1: still something to stick with after you know it was
47:13
Speaker 1: turned on its head last year? You know, I really
47:16
Speaker 1: like that question, because when we're talking for the average investor,
47:19
Speaker 1: I don't think that sixty forty is dead. You know,
47:21
Speaker 1: you look at certain deals, you look at the market volatility.
47:24
Speaker 1: Our price target is forty two hundred on that SMP.
47:27
Speaker 1: We're already at forty eighty five. You know, it's not
47:29
Speaker 1: the most attractive price return there. But I think what
47:32
Speaker 1: I'm emphasize here is to be lower risk when you're
47:36
Speaker 1: uncertain and we're not sure they fall out, and really
47:39
Speaker 1: the full impact of this regional banking crisis. We're expecting
47:44
Speaker 1: tighter financial conditions and you just have this turmoil. I
47:48
Speaker 1: think as a retail investor, you want to be a
47:50
Speaker 1: little more high quality, lower leverage, you want lower volatility
47:54
Speaker 1: names and kind of a tighten the book a little
47:56
Speaker 1: bit so you can see where things shake out. Because
47:58
Speaker 1: if things turn out for the better, I think that's
48:01
Speaker 1: something you will have time to reposition into. But for now,
48:04
Speaker 1: the pain point could really be a downturn in the markets.
48:08
Speaker 1: We want to avoid that in particular, you know, no
48:10
Speaker 1: need to get burned in the high risk names. So
48:13
Speaker 1: and as some of the big cap tech names that
48:15
Speaker 1: had been in stalwarts for the last decade plus a'
48:17
Speaker 1: actually had a really good start to the year here.
48:19
Speaker 1: I think Microsoft, Apple, of course Met has got its
48:22
Speaker 1: own story on the cost cuts. Have they got ahead
48:25
Speaker 1: of themselves? I think a bit. You know, these big
48:29
Speaker 1: cap tech names, it's easy to lump them all together,
48:31
Speaker 1: but you look at a lot of it. It's duration risk,
48:34
Speaker 1: and you know, as you see yields come lower, they
48:36
Speaker 1: can have that nice rally. They also had some tough
48:39
Speaker 1: underperformance from last year, so you're seeing a little bit
48:42
Speaker 1: of that give back. But to us, when we look
48:44
Speaker 1: at big cap tech, it's too much of a lump sum,
48:48
Speaker 1: you know, it's a darling favorites that we see in
48:50
Speaker 1: the headlines. For us, we like to be particular, you know,
48:53
Speaker 1: within tech, if you want to be a little more defensive,
48:57
Speaker 1: I would suggest more leaning towards software, particularly ven Semis
49:01
Speaker 1: Semmes had a little more of that cyclical exposure traditionally.
49:05
Speaker 1: But still it's not that there aren't opportunities in big
49:07
Speaker 1: cap tech. We just think it's a little premature because
49:10
Speaker 1: you're seeing that risk rally here. But really, if you're
49:13
Speaker 1: positioning for a year out, then there are opportunities to
49:17
Speaker 1: be had, but look for that right valuation. All right,
49:19
Speaker 1: and I thank so much for joining us. Really appreciate
49:21
Speaker 1: getting your perspective and a hunt. She's an equity strategist
49:23
Speaker 1: at Wells Fargo. Thanks for listening to the Bloomberg Markets podcast.
49:27
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
49:31
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
49:35
Speaker 1: on Twitter at Matt Miller nineteen seventy three and I'm
49:38
Speaker 1: fall Sweeney. I'm on Twitter at pt Sweeney Before the podcast.
49:41
Speaker 1: You can always catch us worldwide at Bloomberg Radio