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P&L: Cyberattacks Are the Biggest Threat to the Global Economy · Bloomberg Intelligence

• 0:04
  Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
• 0:14
  Speaker 1: you and your money, whether at the grocery store or
• 0:16
  Speaker 1: the trading floor. Find the Bloomberg P L Podcast on iTunes,
• 0:20
  Speaker 1: SoundCloud and at Bloomberg dot com. This is the time
• 0:29
  Speaker 1: of year when people get a chance to scare everybody
• 0:32
  Speaker 1: with potentially negative predictions for the year ahead, or potentially
• 0:36
  Speaker 1: cheer them up with positive predictions. Here with a perhaps
• 0:39
  Speaker 1: a negative one, but but a very important one, is
• 0:42
  Speaker 1: a Gran, a senior software and I T Services analyst
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  Speaker 1: for Bloomberg Intelligence Umora. One of your predictions for two
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  Speaker 1: thousand seventeen is that cyber attacks are going to be
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  Speaker 1: the biggest threat to the global economy. Can you please elaborate, Thanks, Lisa. So,
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  Speaker 1: you know, cyber attacks have been going on for a
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  Speaker 1: very long period of time and it's nothing new, frankly,
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  Speaker 1: but what we have seen, at least in the past
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  Speaker 1: six months, is that both the number of attacks and
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  Speaker 1: the sophistications of these attacks have actually accelerated. So we are,
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  Speaker 1: you know, running in terms of you know, new malvery
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  Speaker 1: discovered every day is growing at a rate we have
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  Speaker 1: never seen before. So as you look into businesses that
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  Speaker 1: are unable to protect themselves properly, uh, I mean we
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  Speaker 1: just saw the big attack on div Ian, which you know,
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  Speaker 1: paralyzed a lot of the UM Internet infrastructure for a while. UM.
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  Speaker 1: If you could have those kinds of attacks on critical
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  Speaker 1: infrastructures of a country, whether it would be you know, transportation,
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  Speaker 1: logistics utilities, you know, those has the capacity to seriously
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  Speaker 1: dent the economy of a particular country. Ana, can you
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  Speaker 1: speak about shadow brokers because I was reading a story
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  Speaker 1: having to do with a dump of information, aation that
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  Speaker 1: came supposedly from the NSA, the National Security Agency, and
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  Speaker 1: these are cyber weapons that are for sale on the internet.
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  Speaker 1: Is that something that can be stopped or is you
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  Speaker 1: just have to accept that this stuff is always going
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  Speaker 1: to be there. So we have to accept that there
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  Speaker 1: is a lot of bad stuff that's coming almost for
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  Speaker 1: every industry, every vertical, every government. And the problem is
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  Speaker 1: that no individual, no individual company UM, no matter what
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  Speaker 1: their sizes, would have a very difficult time to block
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  Speaker 1: any of these things. Because of the changing nature of
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  Speaker 1: these attacks, so it is it is going to be,
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  Speaker 1: you know it truly an extremely collaborative effort that would
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  Speaker 1: involve both the private sector and the public sector, and
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  Speaker 1: government's really big involvement in it to come up with
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  Speaker 1: a system of information sharing for these attacks, just so
• 2:53
  Speaker 1: that people are aware, you know, off of what kind
• 2:57
  Speaker 1: of new malverda is coming out? Anara, can you walk
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  Speaker 1: us through how a malware attack could directly lead to
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  Speaker 1: a substantial slowdown in a specific economy? I mean, think
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  Speaker 1: about it if in just in the financial services vertical, Um,
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  Speaker 1: if I get up tomorrow morning and I don't find
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  Speaker 1: my money into the Schwab account, I mean, what would
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  Speaker 1: it what would it do? What? What? Think about the
• 3:19
  Speaker 1: stock exchanges, think about the airlines, think about you know,
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  Speaker 1: just the power grids. Um, what would happen is you
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  Speaker 1: can have malware is going through the network for any
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  Speaker 1: of these critical infrastructure you know elements, and sometimes these
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  Speaker 1: infrastructures are provided by third parties, which is you know
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  Speaker 1: what we saw for example, in the case of Target,
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  Speaker 1: it was in targets main infrastructure, but it was one
• 3:43
  Speaker 1: of the third party vendors. So are you seeing that
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  Speaker 1: a lot of companies are substantially boosting their expenditures on
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  Speaker 1: uh software safety. And do you think it's enough? No,
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  Speaker 1: I mean, they are boosting. There is a blank check
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  Speaker 1: for most you know, companies, for their security departments as
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  Speaker 1: to what they go to buy. But frankly, you know,
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  Speaker 1: in that grand sense, it's not enough, just because, as
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  Speaker 1: I said, the number and the sophistication of these attacks
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  Speaker 1: are growing at a much faster rate than we have
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  Speaker 1: ever seen before. So mathematically it's very difficult for an
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  Speaker 1: I T department to prevent these numbers from flowing into
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  Speaker 1: their system. They just have to you know, vision um,
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  Speaker 1: you know, basically pray that it's it's you know, they
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  Speaker 1: can detect it much faster than um, you know in
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  Speaker 1: the previous times. I don't know praying is necessarily going
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  Speaker 1: to work. But is there a proactive position that companies
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  Speaker 1: can adopt. I mean, as I said, they are spending
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  Speaker 1: a lot of money to prevent this. So that's the
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  Speaker 1: first thing that to prevent I'm talking about going out
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  Speaker 1: and actually combating the cyber attacks. You know, the financial industry,
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  Speaker 1: for example, is has made an effort to share information
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  Speaker 1: between banks as to you know, who attacks. Then what
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  Speaker 1: kind of viruses are there, but you really need this
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  Speaker 1: in my view, at the at the government level, where um,
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  Speaker 1: you know, the government gets kind of a database of
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  Speaker 1: a lot of these viruses coming in and is able
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  Speaker 1: to quickly, um you know, share that information with the
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  Speaker 1: rest of the world. One of the things we wrote
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  Speaker 1: on our on our piece was a large portion of software.
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  Speaker 1: You know, it's still extremely old in terms of people
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  Speaker 1: don't update their firmware, either in their hardware or networking equipment,
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  Speaker 1: even simple stuff like that. Can you know, prevent from
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  Speaker 1: both consumers as well as companies to uh, you know,
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  Speaker 1: against attacks and arch You're talking about how the the
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  Speaker 1: amount and the sophistication of the attacks has increased meaningfully
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  Speaker 1: this year. Is there a sense of who is behind
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  Speaker 1: that or whether some of the players imagine it's not
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  Speaker 1: just one No, I mean, in fact, the you know
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  Speaker 1: more increasing partners. I mean it used to be state sponsored.
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  Speaker 1: It is still you know, a portion of that is
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  Speaker 1: state sponsored, but there is a lot more money to
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  Speaker 1: be made here. Ransomwarees have become extremely large over the
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  Speaker 1: last two one and a half two years because they
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  Speaker 1: can What they can do is they can walk up
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  Speaker 1: your you know, take control of all your files. They
• 6:04
  Speaker 1: put an encryption on it and they will say, well,
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  Speaker 1: if you need us to decrypt it, just bus ten
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  Speaker 1: thousand dollars for example, or twenty dollars. The amounts are
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  Speaker 1: not that large, but the number has become extremely large
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  Speaker 1: for a small and medium sized business, and that's becoming
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  Speaker 1: a very lucrative business for a lot of people. Now
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  Speaker 1: this is in addition to this simple stuff as credit
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  Speaker 1: card information, you know, healthcare information, your social Security numbers,
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  Speaker 1: all of those are up for sales that you know,
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  Speaker 1: anywhere from ten dollars a piece to fifty bucks out there.
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  Speaker 1: Happy New Year, Thank you so much on our Grana
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  Speaker 1: Senior Software and I T Services analyst for Bloomberg Intelligence.
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  Speaker 1: We've all been talking about the food deflation trend that
• 6:54
  Speaker 1: we've seen growing across the world really but particularly in
• 6:59
  Speaker 1: the US with worn wheat and other commodity prices falling.
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  Speaker 1: But will be a bit of a different year. I
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  Speaker 1: want to bring in Mike mcloan commodity Strategies for Bloomberg
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  Speaker 1: Intelligence and Sal Giberti, president and founder of two Creum
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  Speaker 1: Trading and Agricultural UH commodity Trading firm. So Uh, Mike,
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  Speaker 1: I want to start with, you are you expecting to
• 7:21
  Speaker 1: see some kind of resurgence in the prices for some
• 7:24
  Speaker 1: of these uh hallmark commodities. I think that's a high risk,
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  Speaker 1: most most notably in the grains. And if you look
• 7:33
  Speaker 1: at it from a you know, forty thou um feet overview,
• 7:37
  Speaker 1: this year is quite significant because the entire agriculture market
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  Speaker 1: was actually up. Grains were actually up despite the largest
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  Speaker 1: harvests and history of the world in US basically US harvest.
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  Speaker 1: If it's not gonna you know, if the market won't
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  Speaker 1: go down an environment like that, it's probably at risk
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  Speaker 1: of doing the opposite. And the main reason is demand.
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  Speaker 1: Demand has just picked up exponentially. We've had thirty year
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  Speaker 1: highs in the velocity of the increase in demand and
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  Speaker 1: lone of the grains, So that makes the market more
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  Speaker 1: susceptible to potential risk of lower production next year. And
• 8:09
  Speaker 1: now I'm not predicting the weather, but generally if we
• 8:12
  Speaker 1: have you know, agriculture is always about the weather, but
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  Speaker 1: if we have a weather event, is more likely to
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  Speaker 1: probably increase more than in history because of this substantial
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  Speaker 1: shift in increase in demand. Sal do you agree with
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  Speaker 1: with Mike, And maybe you could then get into some details.
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  Speaker 1: I want to start with soybeans and Chinese imports. Sure,
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  Speaker 1: I do agree with Mike in that, I mean the
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  Speaker 1: velocity of demand. That's an interesting statistic. Demand is rising,
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  Speaker 1: and you know every year in recent memory we have
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  Speaker 1: had an increase in demand, primarily because global population is increasing.
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  Speaker 1: So all the grains, you're using more grains because there
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  Speaker 1: are more people, more animals to feed. People eat the
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  Speaker 1: animals um soybeans in particular. They're kind of like the
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  Speaker 1: lost middle child. So the big three graine of coin, corn, soybeans,
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  Speaker 1: and wheat. Soybeans and corn share acreage, so you either
• 8:58
  Speaker 1: plant soybeans or corn in the same dirt. And soybeans
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  Speaker 1: the import pace of China has been beyond people's wildest expectations.
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  Speaker 1: It's primarily feeding, uh, their swine, poultry, and aquaculture industries
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  Speaker 1: because they are increasing the meat intake and protein and
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  Speaker 1: take via meats in their diets. It's beyond anything anyone
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  Speaker 1: could have predicted. I was gonna futures are up in
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  Speaker 1: Chicago this year. Uh, that's correct. And our you know
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  Speaker 1: of our funds, we we have the e t F
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  Speaker 1: out there and corn soybeans and wheat. There each a
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  Speaker 1: different ETF and soybeans the smallest. It's like the lost child,
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  Speaker 1: you know, that middle child that's ignored, but it's the
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  Speaker 1: smartest one. They soybeans have really been the best performer
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  Speaker 1: this year in the AGGS sector, and UM wheat has
• 9:43
  Speaker 1: been the worst. And wheat is very interesting as well,
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  Speaker 1: because you had some winter killed we believe two nights
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  Speaker 1: ago in the in you know, the prime winter wheat
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  Speaker 1: growing areas of the United States have less than two
• 9:54
  Speaker 1: inches of snow and thirty below temperatures a couple of
• 9:57
  Speaker 1: days ago. That's of some concern and only farmers are
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  Speaker 1: talking about it. So it's very interesting that you have
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  Speaker 1: increasing demand and you you really do have uncertainty of
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  Speaker 1: supply in that um. Every five to seven years, if
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  Speaker 1: you look back statistically, there tends to be a major
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  Speaker 1: drought in one of these big three crops, and price
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  Speaker 1: history shows us that the prices rise very significantly. I mean,
• 10:19
  Speaker 1: when you have increasing demand that does not abate even
• 10:22
  Speaker 1: if it doesn't rain somewhere that you know you can
• 10:24
  Speaker 1: figure out what's going to happen in the price. So
• 10:27
  Speaker 1: if there is a weather event Mike like you are
• 10:29
  Speaker 1: talking about just how much could the prices of wheat
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  Speaker 1: and corn increase? Well, use the most recent history two
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  Speaker 1: thousand twelve is the last significant weather event. US is
• 10:41
  Speaker 1: basically the flash drought was only one month that you know,
• 10:43
  Speaker 1: we've basically got no rain in the grain belt in
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  Speaker 1: July August area, and the price of corn sowing beans
• 10:48
  Speaker 1: and we normably corn beings doubled at least double. They
• 10:51
  Speaker 1: went about eight bucks in corn currently in corn or
• 10:53
  Speaker 1: below four dours. So that's the risk, um, And so
• 10:57
  Speaker 1: here we are about about the same prices when we
• 10:59
  Speaker 1: started out in two thousand twelve. So that's I guess
• 11:01
  Speaker 1: that's the key risk. And then that was a bit
• 11:03
  Speaker 1: of an extreme event. And I think, um, it's not
• 11:07
  Speaker 1: so much a drought we have to worry about. It's
• 11:08
  Speaker 1: just as Sale mentioned, that increase usually in production usually
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  Speaker 1: last in five year increments. Now we're into the fifth year.
• 11:18
  Speaker 1: It's just we can't expect this type of production to
• 11:20
  Speaker 1: continue increase as records. We expect some normalization. Normalization means
• 11:25
  Speaker 1: potentially market should recover. Now were already starting to price
• 11:27
  Speaker 1: a little bit in that in soybeans are up in
• 11:29
  Speaker 1: the year and we'll see how you know, we're waiting
• 11:31
  Speaker 1: for the next month or two to see how production
• 11:33
  Speaker 1: comes in South America. That's the first indication. Sal Well,
• 11:37
  Speaker 1: I got a thought for a trade going into seventeen
• 11:41
  Speaker 1: where you'd like to be positioned right now. Um, you know,
• 11:44
  Speaker 1: we're not investment advisors, but I think people should speak
• 11:47
  Speaker 1: very seriously with their advisors and look at you know,
• 11:51
  Speaker 1: it's not necessarily a trade when things turned. Grains are
• 11:54
  Speaker 1: definitely in a downsideways market right now because of the supply.
• 11:57
  Speaker 1: But again, demand is steady, supply is uncertain every year.
• 12:02
  Speaker 1: There are no seeds in the ground in the Northern
• 12:04
  Speaker 1: Hemisphere right now, and so I think that what people
• 12:07
  Speaker 1: should look at is maybe looking at an allocation and
• 12:10
  Speaker 1: talk to their advisor about into directly these grain products, because,
• 12:14
  Speaker 1: as Mike said, the upside is actually explosive. And I
• 12:17
  Speaker 1: know this time of year people look to put you know,
• 12:19
  Speaker 1: ex percent of their portfolio and gold and do a
• 12:21
  Speaker 1: little rebalancing. I think people should discuss very seriously with
• 12:25
  Speaker 1: their advisors. Corn wheat, soybeans, these things are atted near
• 12:29
  Speaker 1: their cost of production. They're very low. They're in a
• 12:31
  Speaker 1: four year down trend, which is very very rare, and
• 12:35
  Speaker 1: they're they're upside is quite significant, I think on a
• 12:37
  Speaker 1: risk reward just from a farmer. If you're a farmer,
• 12:39
  Speaker 1: you're looking at three fifty corn right now. Could it
• 12:42
  Speaker 1: go to three dollars? Of course it can. If we
• 12:43
  Speaker 1: have another bumper crop year. Can it go to eight
• 12:46
  Speaker 1: dollars where it was a few years ago. Anything's possible.
• 12:50
  Speaker 1: With with the demand the way it is, any anything's possible.
• 12:53
  Speaker 1: All right, Thanks very much, sal GILBERTI. He is the
• 12:55
  Speaker 1: president of the chief investment officer and the co founder
• 12:58
  Speaker 1: of two Cream Trade Eating Uh. He's the sponsor of corn, soybean, wheat, cane.
• 13:04
  Speaker 1: These are all single commodity agriculture et f s and
• 13:07
  Speaker 1: they trade on the New York Stock Exchange. And our
• 13:09
  Speaker 1: thanks of course to Mike mclogan, commodity strategist, Bloomberg Intelligence.
• 13:24
  Speaker 1: Deutsche Bank. It is the bank of choice for President
• 13:28
  Speaker 1: elect Donald Trump, or at least one of them, and
• 13:31
  Speaker 1: it has about three hundred million dollars and loans extended
• 13:34
  Speaker 1: to the Trump organization. With US is Carrie Geiger, Bloomberg
• 13:39
  Speaker 1: News reporter who co authored a really interesting story that
• 13:43
  Speaker 1: I thought illuminated this issue in sort of some of
• 13:45
  Speaker 1: the potential conflicts that could arise. SIT Bank is reportedly,
• 13:49
  Speaker 1: according to her reporting, UM, trying to renegotiate some of
• 13:54
  Speaker 1: the rewrite some of these contracts. Can you explain what
• 13:57
  Speaker 1: they're trying to accomplish, right, So, so Trump it's done
• 14:00
  Speaker 1: business with Deutsche Bank for the last couple of decades,
• 14:03
  Speaker 1: starting with you know, relatively small lending projects for his
• 14:08
  Speaker 1: forty Wall Street project back in the nineties, and the relationship,
• 14:12
  Speaker 1: despite some pretty messy legal battles between the two, has
• 14:17
  Speaker 1: stayed and they Deutsche Bank is essentially one of the
• 14:21
  Speaker 1: main banks for Donald Trump's business now. To keep him mind,
• 14:23
  Speaker 1: Donald Trump does not have a lot of debt compared
• 14:25
  Speaker 1: to the size of his overall empire UM, so it's
• 14:29
  Speaker 1: not a significant amount of money if you look at
• 14:31
  Speaker 1: that UM. But these loans were basically done on a
• 14:34
  Speaker 1: recourse level, which means that there are some personal guarantees
• 14:37
  Speaker 1: tied to these loans, and these are not an uncommon
• 14:40
  Speaker 1: way to do these types of loans. UM. But as
• 14:43
  Speaker 1: we've seen in some court documents and other types of
• 14:45
  Speaker 1: reporting with some previous loans where he's had recourse if
• 14:49
  Speaker 1: you don't pay the full amount of the loan when
• 14:51
  Speaker 1: it comes due, then you would personally be have to
• 14:55
  Speaker 1: make a subscizable payment that can be in the tents
• 14:57
  Speaker 1: and millions of dollars. So you of this extremely unusual,
• 15:02
  Speaker 1: probably unprecedented, I think we could say situation where you
• 15:06
  Speaker 1: have a president that owes a bank money um, and
• 15:11
  Speaker 1: basically how do you manage that relationship going forward. Now,
• 15:14
  Speaker 1: it's not Deutsche Bank's fault. They didn't do anything wrong
• 15:17
  Speaker 1: that Donald Trump got elected president. It's nott Donald Trump's
• 15:20
  Speaker 1: fault that he's got a personal um and business loans
• 15:23
  Speaker 1: with this bank, um. So the two of them just
• 15:26
  Speaker 1: kind of have to figure out how to do this. Obviously,
• 15:28
  Speaker 1: one of the big big topics with the Trump presidency
• 15:31
  Speaker 1: is conflict of interest and how his business empire will
• 15:35
  Speaker 1: influence decisions in the White House and vice versa. And
• 15:38
  Speaker 1: this is just one of one of many things that
• 15:41
  Speaker 1: they're looking at for this. Kerry, isn't there an ongoing
• 15:44
  Speaker 1: investigation into Deutsche Bank? So this is the other kind
• 15:47
  Speaker 1: of interesting, um, kind of ethical question that we're looking at.
• 15:53
  Speaker 1: So Deutsche Bank is under investigations for a couple of
• 15:55
  Speaker 1: different things. One is for mortgage backed security sales, which
• 16:00
  Speaker 1: every bank on Wall Street has has to go through
• 16:02
  Speaker 1: with a settlement process with the Department of Justice. It's
• 16:06
  Speaker 1: their turn. Now we're likely to see that settlement relatively soon.
• 16:10
  Speaker 1: It's going to be in the billions of dollars probably. Um.
• 16:13
  Speaker 1: They're also in investigations for the way that they did
• 16:16
  Speaker 1: some trading in Russia. Um. That is a criminal investigation
• 16:19
  Speaker 1: being done by the Department Justice. So the issue with
• 16:22
  Speaker 1: that is if you have a relationship between the standing
• 16:25
  Speaker 1: president of the United States and an investment bank that's
• 16:28
  Speaker 1: under investigation by the Department of Justice, what is the
• 16:33
  Speaker 1: issue if the person overseeing the Department of Justice is
• 16:37
  Speaker 1: a presidential appointee of his choice. Does it create I mean,
• 16:42
  Speaker 1: is it just bad optics? Does it create a situation
• 16:46
  Speaker 1: where Deoytscha Bank could get more favorable terms? I mean,
• 16:50
  Speaker 1: we don't really know what this what what the outcome is,
• 16:53
  Speaker 1: or what's going to happen. What are the potential conflicts
• 16:55
  Speaker 1: of interest? Um, Given the way that these three billion
• 16:59
  Speaker 1: dollars and loans currently arranged, you talked about how UH
• 17:02
  Speaker 1: as one sort of potential collateral measure they could Deutsche
• 17:06
  Speaker 1: Bank could access the President himself or the president elect himself. Uh,
• 17:10
  Speaker 1: and require millions of dollars of payments. Uh. Is that
• 17:13
  Speaker 1: the main concern or is there something else? I think
• 17:16
  Speaker 1: for Deutsche Bank, you know, and I can't speak on
• 17:18
  Speaker 1: their behalf. They obviously did not comment for the article.
• 17:21
  Speaker 1: But you know, in talking to people that follow this
• 17:23
  Speaker 1: issue quite closely, in the whole conflict of interest issue closely,
• 17:27
  Speaker 1: you know, it really is an issue of of awkwardness
• 17:29
  Speaker 1: for the bank. It's it's it's very low probability that
• 17:32
  Speaker 1: these loans will default and they'll ever have to call
• 17:34
  Speaker 1: on those personal guarantees. Um. But if they wanted to
• 17:39
  Speaker 1: restructure the loans to kind of remove that basically to
• 17:43
  Speaker 1: kind of ease some of those concerns, you know, typically
• 17:46
  Speaker 1: the way you would do that is you would increase
• 17:48
  Speaker 1: the interest rate because you're taking away a guarantee. You
• 17:51
  Speaker 1: would make the requirements on how the money has spent
• 17:53
  Speaker 1: a little bit more restrictive. So there's all sorts of
• 17:56
  Speaker 1: ways that you can do this, and they're not necessarily
• 17:58
  Speaker 1: in favor for the bank or Trump. Thanks very much.
• 18:02
  Speaker 1: Carry Geiger, financial crimes reporter for Bloomberg News, telling us
• 18:07
  Speaker 1: about President elect Donald Trump and his relationship with Deutsche Bank.
• 18:23
  Speaker 1: When I think of Carl Icon, I think of the
• 18:26
  Speaker 1: history of US business R j R, Nabisco, t w A, Texico,
• 18:30
  Speaker 1: Gulf and Western Uni, Royal, Blockbuster, Motorola. Well, now you
• 18:36
  Speaker 1: think of Bill Ackman. Indeed, I wonder what Bill Ackman's
• 18:39
  Speaker 1: thinking today as Carl Icon has been named as President
• 18:43
  Speaker 1: elect Donald Trump's special advisor. Here to tell us more,
• 18:47
  Speaker 1: Mike Dorning, Bloomberg's White House correspondent. Mike tell us about
• 18:52
  Speaker 1: this selection of Carl Icon as a special advisor. Do
• 18:56
  Speaker 1: we know any details about what he'll be advising on.
• 19:00
  Speaker 1: We know that he'll be focused on reducing regulation, as
• 19:05
  Speaker 1: as President Electrump put it on. He'll be a czar
• 19:08
  Speaker 1: on quote unquote strangling regulations UM and how to remove
• 19:15
  Speaker 1: regulations to improve economic growd. Mike, you know this is
• 19:19
  Speaker 1: not a post that's ever been held before. It's a
• 19:22
  Speaker 1: newly created post that has no particular that I know of,
• 19:27
  Speaker 1: conflicts of interest, types of laws governing it. UM. What
• 19:33
  Speaker 1: will Carl icon steps be, if any. Are we gonna
• 19:37
  Speaker 1: get into any indication whether he'll divest himself of any
• 19:40
  Speaker 1: of his holdings in some of these companies that would
• 19:42
  Speaker 1: most benefit from deregulation in certain industries and thinking specifically
• 19:46
  Speaker 1: and energy among others. We haven't gotten any indications on
• 19:51
  Speaker 1: what he'll do on that yet. Um Now, Democrats have
• 19:54
  Speaker 1: already criticized this, saying, you know, this man has huge
• 19:58
  Speaker 1: interests in oil refineries fornch to which you have an
• 20:01
  Speaker 1: interest in the lower costs conclusion regulations. But obviously people
• 20:07
  Speaker 1: live around the refiners have an interest in cleaner air
• 20:10
  Speaker 1: and stuff like that. And they've gone down the line
• 20:13
  Speaker 1: and say a lot of his business investments would benefit
• 20:18
  Speaker 1: directly if regulations that helped the public health and public
• 20:22
  Speaker 1: safety were reduced. So this issue of a conflict of
• 20:26
  Speaker 1: interest is something that will be hearing a lot about politically.
• 20:29
  Speaker 1: Is there any kind of disclosure that he will have
• 20:32
  Speaker 1: to make prior to attending any meetings with the President elect?
• 20:38
  Speaker 1: You know, I actually I am not sure what the
• 20:41
  Speaker 1: disclosure requirements are if you're not paid. And it's not
• 20:45
  Speaker 1: clear whether this special advisor role is going to be
• 20:48
  Speaker 1: something akin to what Paul Volker did, where he was
• 20:52
  Speaker 1: essentially didn't work for the president, but he was just
• 20:55
  Speaker 1: giving him advice and convening a council, or whether he
• 20:58
  Speaker 1: will be a paid person on the White House staff um,
• 21:03
  Speaker 1: but the issue of what conflicts he has is one
• 21:06
  Speaker 1: that will be litigated politically. And as far as confirmation goes,
• 21:11
  Speaker 1: since it's a new post that hasn't been had before,
• 21:14
  Speaker 1: does he have to be confirmed in any way? No,
• 21:17
  Speaker 1: you do not have to be confirmed unless the post
• 21:20
  Speaker 1: is created by law and requires a Senate confirmation. So
• 21:23
  Speaker 1: most of the President's advisors are not confirmed that some
• 21:27
  Speaker 1: exceptions are like the Chairman of the Council of Economic Advisors.
• 21:31
  Speaker 1: That is a post created by law which has to
• 21:36
  Speaker 1: be confirmed. On the other hand, the Director of the
• 21:38
  Speaker 1: National Economic Council to post Garry Tone from Golden Sex
• 21:42
  Speaker 1: has been appointed to, which is a more powerful position.
• 21:46
  Speaker 1: Usually there's no confirmation apart on that. The only thing
• 21:49
  Speaker 1: is the President relying on you for advice. Would this
• 21:52
  Speaker 1: be the same case for Kelly and Conway, former campaign
• 21:56
  Speaker 1: manager and advisor to President Electron. She would have to
• 22:00
  Speaker 1: make a disclosure as an employee, but you wouldn't be
• 22:03
  Speaker 1: subject to confirmation. And indeed Gary Collen will have to
• 22:07
  Speaker 1: make a disclosure to as do other employees of the
• 22:11
  Speaker 1: executive branch in high positions. What's been the reaction to
• 22:15
  Speaker 1: carl icons appointment to this position from from Washington folks. Well, Um,
• 22:22
  Speaker 1: the main reaction so far was coming from Democrats and
• 22:27
  Speaker 1: Democratic Party organizations, which have said it's a terrible conflict
• 22:30
  Speaker 1: of interest. Um, there hasn't been a huge sense of
• 22:35
  Speaker 1: surprise in Washington because carl Icon was someone who uh
• 22:40
  Speaker 1: President Electron repeated when talked about in campaign as a
• 22:44
  Speaker 1: hype of person whose advice you would like to get.
• 22:47
  Speaker 1: The only surprised here in what capacity is being used.
• 22:51
  Speaker 1: So there hasn't been huge reaction yet in Washington. Also,
• 22:55
  Speaker 1: Congress is, um, you know, not working this week. Well,
• 22:59
  Speaker 1: thank you so much. I appreciate you talking about this.
• 23:01
  Speaker 1: Mike Dorning, Bloomberg White House correspondent h joining us from Washington.
• 23:07
  Speaker 1: So Trump is going to have carl Icon by his side,
• 23:11
  Speaker 1: as widely expected throughout the campaign as he figures out
• 23:15
  Speaker 1: how to slash regulations. Thanks for listening to the Bloomberg
• 23:24
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• 23:28
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• 23:33
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• 23:36
  Speaker 1: I'm out there on Twitter at Lisa Abramo. It's one
• 23:39
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• 23:42
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