Latest / Bloomberg Intelligence / It's the President's Choice to Disclose Info, Ex-CIA Head Says

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It's the President's Choice to Disclose Info, Ex-CIA Head Says · Bloomberg Intelligence

• 0:05
  Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Bramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
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  Speaker 1: you and your money, whether you're at the grocery store
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  Speaker 1: or the trading floor. Find the Bloomberg p m L
• 0:20
  Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. I
• 0:32
  Speaker 1: want to bring in Robert James Woolsey Jr. He was
• 0:35
  Speaker 1: the former head of the Central Intelligence Agency from through
• 0:41
  Speaker 1: and uh, Mr Wolsie, thank you so much for joining us.
• 0:44
  Speaker 1: I would love to get your take on what the
• 0:48
  Speaker 1: leak that we have been hearing about and reading about
• 0:50
  Speaker 1: in the Washington Post, what damage that could do to
• 0:54
  Speaker 1: relationships in the intelligence community, and how long lasting the
• 0:58
  Speaker 1: ramifications could be. We don't know without knowing the substance
• 1:02
  Speaker 1: of the league, and I very much hope we don't
• 1:04
  Speaker 1: know the substance of the league because it could be
• 1:07
  Speaker 1: quite damaging. It could be anything from quite damaging to innocuous.
• 1:13
  Speaker 1: We don't know, and that's part of the nature of
• 1:17
  Speaker 1: this intelligence businesses. You often don't know whether something is
• 1:21
  Speaker 1: important or not important, or discloses a source and method
• 1:25
  Speaker 1: or not, Uh, based on what can be said publicly.
• 1:30
  Speaker 1: And Uh, there's different stories and different approaches coming out
• 1:35
  Speaker 1: on this, so it's really hard to tell. Well, although
• 1:37
  Speaker 1: you you have to imagine that the New York Times
• 1:40
  Speaker 1: in the Washington Post aren't completely baseless in the reporting.
• 1:43
  Speaker 1: So you do have to wonder even if, say, the leak,
• 1:47
  Speaker 1: as you say, was not necessarily as potentially harmful as
• 1:51
  Speaker 1: it's necessarily being reported, you do have to wonder somebody
• 1:55
  Speaker 1: was upset enough in the intelligence community two leak this well. Uh,
• 2:01
  Speaker 1: upset is not a good judgment criterion. I had found
• 2:07
  Speaker 1: through a panel four people inside the CIA when I
• 2:10
  Speaker 1: was a director who had made serious mistakes. Uh. And
• 2:14
  Speaker 1: that had led to Ulrich James being able to spy
• 2:17
  Speaker 1: for for several years and then we finally caught him. Uh.
• 2:21
  Speaker 1: He was a mole for the Russians. Uh. And UH.
• 2:26
  Speaker 1: I had a lot of people tell me, Okay, fire
• 2:28
  Speaker 1: somebody Wolsey and uh, I said, but the four people
• 2:32
  Speaker 1: who messed up are all retired, and you can't fire
• 2:34
  Speaker 1: somebody who's retired. And they kept saying, it doesn't matter,
• 2:38
  Speaker 1: fire somebody, fire somebody. Uh. And so you know, sometimes
• 2:45
  Speaker 1: you don't have the tools that you need in order
• 2:47
  Speaker 1: to implement an ideal decision. UH, and that may be
• 2:52
  Speaker 1: the case here. Well, I have to wonder though. Last
• 2:54
  Speaker 1: night we heard from Secretary of State Rex Tillerson as
• 2:58
  Speaker 1: well as President Trump's National Secure Already Advisory hr McMaster,
• 3:01
  Speaker 1: and both of them came out and categorically denied the stories.
• 3:06
  Speaker 1: And then President Trump came out this morning and tweeted
• 3:09
  Speaker 1: basically what is being taken as a confirmation of some
• 3:13
  Speaker 1: elements of the story, namely that that he did share
• 3:16
  Speaker 1: some information with the Russian UH foreign minister and others
• 3:21
  Speaker 1: just to get some cooperation. I mean, what does this
• 3:24
  Speaker 1: do necessarily to the credibility? Sharing information is done all
• 3:29
  Speaker 1: the time, even sometimes with countries with which we have
• 3:33
  Speaker 1: a very tough, difficult relations. Uh. It's the president's decision
• 3:39
  Speaker 1: whether that information, uh is whether or not it's formally classified,
• 3:44
  Speaker 1: is UH if revealed to the Russians damaging or not.
• 3:48
  Speaker 1: He may have some other reason that he wanted to
• 3:51
  Speaker 1: disclose it. UH. He's the authority to to decide. And UH,
• 3:58
  Speaker 1: whoever is leaking this uh information may or may not
• 4:04
  Speaker 1: be substantively correct that it is serious. So we don't
• 4:09
  Speaker 1: know because we don't know what the information is. Um.
• 4:11
  Speaker 1: You were involved in treating negotiations with the Soviet Union
• 4:15
  Speaker 1: for five years in the nineteen eighties, So I think
• 4:17
  Speaker 1: that it puts you uh in a uniquely good position
• 4:20
  Speaker 1: to comment on what the U. S. S. Relationship with
• 4:23
  Speaker 1: Russia could be in its ideal and what it should be.
• 4:26
  Speaker 1: I mean, basically, does this is this issue complicated by
• 4:30
  Speaker 1: our sort of uh difficult past with Russia. Well, not
• 4:35
  Speaker 1: particularly by that. It's complicated by Russia's instinct to want
• 4:40
  Speaker 1: to continue to absorb, sometimes by force, nations that are
• 4:46
  Speaker 1: near them, uh, Ukraine, etcetera. Uh, So that's a major
• 4:54
  Speaker 1: part of the problem. I was in foreign negotiations with
• 4:57
  Speaker 1: the Soviets still at all those times, and UH three
• 5:02
  Speaker 1: of them uh limped along and took a long time.
• 5:05
  Speaker 1: One succeeded very quickly. And that was mainly, however, because
• 5:09
  Speaker 1: the Berlin Wall had collapsed in the eighty nine and
• 5:13
  Speaker 1: in early ninety. Uh the Russians were extremely cooperative. You've
• 5:17
  Speaker 1: never seen such nice Russians as after the Berlin Wall collapsed.
• 5:21
  Speaker 1: So UH, when they feel they're at a strategic disadvantage,
• 5:26
  Speaker 1: they can be really rather easy to get along with.
• 5:28
  Speaker 1: When they do not feel that way, they could be
• 5:31
  Speaker 1: extremely difficult to get along with. Last question, given your
• 5:36
  Speaker 1: sense and your contacts within the intelligence community, do you
• 5:39
  Speaker 1: feel like the media is making too big a deal
• 5:41
  Speaker 1: of this? Well, the media needs to distinguish between UH,
• 5:47
  Speaker 1: counter intelligence investigations and criminal investigations. And UH, the FBI,
• 5:55
  Speaker 1: as far as I can tell here, is conducting a
• 5:58
  Speaker 1: counterintelligence investigation. And UH, I can't find any crime. And
• 6:04
  Speaker 1: Andy McCarthy says it's very well again in his blog today,
• 6:07
  Speaker 1: I can't find what crime anybody might theoretically be investigating.
• 6:11
  Speaker 1: So assume I believe that you should that it's such
• 6:14
  Speaker 1: counterintelligence investigation, and that means that all of the things
• 6:17
  Speaker 1: that people are saying about the obstruction of justice and
• 6:20
  Speaker 1: so forth don't really apply. Thank you so much for
• 6:23
  Speaker 1: joining us. Truly appreciate your insights. James Wilsey Jr. Was
• 6:27
  Speaker 1: the former head of the Central Intelligence Agency from through
• 6:32
  Speaker 1: Thank you very much for your insights. Stephen Dennis, who's
• 6:47
  Speaker 1: a congressional reporter for Bloomberg. We are awaiting the press
• 6:52
  Speaker 1: conference from hr McMaster, who's National Security Advisor. UH. And
• 6:56
  Speaker 1: while we while we wait to hear what he has
• 6:58
  Speaker 1: to say. Steve, I'd love to get your take on
• 7:01
  Speaker 1: the interview with Senate Majority Leader Mitch McConnell that our
• 7:04
  Speaker 1: colleague Kevin's really did earlier today. Um, what did you
• 7:08
  Speaker 1: think was the most important takeaway? Front? Yeah, yeah, I'm sure.
• 7:12
  Speaker 1: We also had them for half an hour with the
• 7:14
  Speaker 1: editorial board down here. And you know, it's clear that
• 7:18
  Speaker 1: Ms McConnell is sort of exasperated and frustrated. That was
• 7:22
  Speaker 1: my take on the body language more than his actual words.
• 7:25
  Speaker 1: He didn't really want to comment too much on Trump
• 7:28
  Speaker 1: other than to say he wishes he had a little
• 7:30
  Speaker 1: less drama and focused on their agenda more than on
• 7:33
  Speaker 1: other things. And uh, but you know, I think McConnell
• 7:39
  Speaker 1: is doing his best to try to avoid getting, you know,
• 7:44
  Speaker 1: giving this story any more oxygen. And he's basically saying
• 7:48
  Speaker 1: trying to have things bottled up in the Senate Intelligence Committee,
• 7:52
  Speaker 1: deferring to them on whether there should be tapes that
• 7:56
  Speaker 1: are subpoened, whether they should even investigate what happened last
• 8:00
  Speaker 1: week with the Russian ambassador and the classified information. This
• 8:04
  Speaker 1: is a storyline that the Republicans on Capitol Hill cannot stand.
• 8:10
  Speaker 1: They want to be talking about tax cuts. They want
• 8:13
  Speaker 1: to be talking about regulatory reform, they want to be
• 8:15
  Speaker 1: talking they wanted to be getting healthcare over the finish line.
• 8:19
  Speaker 1: And as long as the White House is sort of
• 8:20
  Speaker 1: in a meltdown moad every week or every other day,
• 8:24
  Speaker 1: it makes that that job a little bit harder. What
• 8:26
  Speaker 1: kind of recourse do you get the sense that they
• 8:29
  Speaker 1: have Republican leadership to potentially damp in some of the
• 8:33
  Speaker 1: drama and just push forward their agenda. You know, I
• 8:37
  Speaker 1: think that they're talking to Trump and trying to diffuse
• 8:41
  Speaker 1: it as best they can. One of the things that
• 8:43
  Speaker 1: McConnell told us is that the next FBI director should
• 8:47
  Speaker 1: you know, told Trump this should be somebody a political
• 8:51
  Speaker 1: somebody like America Garland, not a politician, i e. Not
• 8:56
  Speaker 1: McConnell's number two, John Cornyn. And just so it's a
• 8:58
  Speaker 1: cerator at Merck. Garland had been nominated to fill the
• 9:02
  Speaker 1: empty role that was emptied by Antonin Scalia by so
• 9:06
  Speaker 1: he was nominated to fill out on the Supreme Court
• 9:08
  Speaker 1: by President Obama, but was not voted on UH and
• 9:12
  Speaker 1: was therefore dropped as a candidate. Correct. Yeah, and he
• 9:14
  Speaker 1: was a former prosecutor, so I mean theoretically he could
• 9:18
  Speaker 1: do the job, though apparently he's indicated he wants to
• 9:21
  Speaker 1: stay a judge and the chief judge on the d
• 9:23
  Speaker 1: C Circuit Court of Appeals, which is of course as
• 9:26
  Speaker 1: a lifetime appointment, instead of working at the pleasure of
• 9:29
  Speaker 1: Donald Trump. So I don't think that's likely. But the
• 9:32
  Speaker 1: kind of thing that the McConnell's emphasizing here is that
• 9:35
  Speaker 1: Trump needs to show the country that he understands the
• 9:39
  Speaker 1: role of the FBI director. That should be somebody a political,
• 9:42
  Speaker 1: somebody with a law enforcement background. And you know, I
• 9:45
  Speaker 1: think one of the things that we're hearing from other
• 9:47
  Speaker 1: senators on on the on the hill this week is
• 9:51
  Speaker 1: that it's absolutely critical that they try to get democratic
• 9:54
  Speaker 1: votes given that this. You know, the President said on
• 9:58
  Speaker 1: Thursday to NBC that the reason why fire James James
• 10:02
  Speaker 1: Comey was because he was upset about the Russian investigation.
• 10:06
  Speaker 1: So that I think there's a there's a credibility problem
• 10:09
  Speaker 1: here on both sides of the island. Who knows who
• 10:12
  Speaker 1: he can who's going to pick, But that is a
• 10:14
  Speaker 1: critical issue on the minds of a lot of Republicans,
• 10:17
  Speaker 1: is that he needs to pick somebody's credibility. Stephen. One
• 10:20
  Speaker 1: of the most interesting is interesting things that I found
• 10:22
  Speaker 1: from the interview with a Majority Leader Mitch McConnell was
• 10:25
  Speaker 1: that he said that he would like any tax plan
• 10:28
  Speaker 1: to be revenue neutral, and this kind of went against
• 10:31
  Speaker 1: some things that we've heard from President Trump. Can you elaborate, Yeah, So,
• 10:35
  Speaker 1: I think McConnell is really laying down the law and
• 10:38
  Speaker 1: the deficit here on both taxes, on infrastructure, Uh, just
• 10:43
  Speaker 1: in general. He's saying, look, we don't want to pass
• 10:45
  Speaker 1: bills that are going to increase our debt. We already
• 10:48
  Speaker 1: have a twenty trillion dollar debt. It's alarming. I'm not
• 10:51
  Speaker 1: interested in passing a bill that's going to increase the deficit.
• 10:55
  Speaker 1: He is willing to have some you know what they
• 10:58
  Speaker 1: called dynamic scoring to give some credit for tax cuts
• 11:01
  Speaker 1: to reduce the economy, but uh, in the end that
• 11:05
  Speaker 1: score has to come across as not adding to the deficit.
• 11:08
  Speaker 1: That's very different from what we've heard from some conservatives
• 11:12
  Speaker 1: as well as the President, who is much more focused
• 11:14
  Speaker 1: on tax cuts. And so it's sort of like Mitch
• 11:19
  Speaker 1: McConnell's sort of rotting shaff here um. While the President
• 11:23
  Speaker 1: may want to borrow money to build Rhodes and bridges.
• 11:26
  Speaker 1: Mr McConnell says, hey, you have to pay for it.
• 11:29
  Speaker 1: And while the President might want to have the biggest
• 11:31
  Speaker 1: tax cut since Reagan or ever, Mitch McConnell saying, hey, uh,
• 11:35
  Speaker 1: we actually have to pay for it by closing loophole
• 11:38
  Speaker 1: somewhere else. And so that's going to be a very
• 11:41
  Speaker 1: you know, hey, sort of saying we're gonna have to
• 11:43
  Speaker 1: eat our vegetables with our dessert here, Steven, you know,
• 11:47
  Speaker 1: I wanted to get your take. There is this feeling
• 11:49
  Speaker 1: right now that Washington is at a sort of stasis, uh,
• 11:53
  Speaker 1: embroiled in this drama, unable to move forward with some
• 11:57
  Speaker 1: basic legislation. You're on the ground there is that an
• 12:00
  Speaker 1: accurate portrayal or is their actual work getting done and
• 12:03
  Speaker 1: it's just the media that are buzzing around and sort
• 12:07
  Speaker 1: of getting lost in the drama. I think legislators are
• 12:10
  Speaker 1: trying to compartmentalize. Um. You know, they have to react
• 12:14
  Speaker 1: to the tweets of the moment, or the controversies or
• 12:16
  Speaker 1: the firings or this this huge story on leaking classified
• 12:21
  Speaker 1: uh information allegedly. Uh, that's frustrating to them, but they
• 12:26
  Speaker 1: are trying to compartmentalize that with what they're trying to accomplish.
• 12:30
  Speaker 1: At the same time. They were able to keep the
• 12:32
  Speaker 1: government open, had a big omnibus spending deal of course
• 12:35
  Speaker 1: a few weeks ago. They are trying to come up with,
• 12:38
  Speaker 1: you know, the first parts of a bunchet deal for
• 12:41
  Speaker 1: next to you to keep the government open. And on healthcare,
• 12:44
  Speaker 1: Republicans and even some Democrats are starting to meet all
• 12:48
  Speaker 1: over campel Hill every single day and they're hashing out
• 12:51
  Speaker 1: things like medicaid, whether the tax cut stay in the bill, uh,
• 12:55
  Speaker 1: sort of the whole, all the pieces of healthcare, and
• 13:00
  Speaker 1: and an on the ground behind those closed doors. They're
• 13:02
  Speaker 1: really focused on those details, not so much on the
• 13:05
  Speaker 1: president's tweet. But you know, it does take an awful
• 13:09
  Speaker 1: lot of the political oxygen out of the room. Stephen Dennis,
• 13:12
  Speaker 1: thank you so much for joining us. Stephen Dennis is
• 13:14
  Speaker 1: a progressional reporter for Bloomberg. Coming to us from Washington,
• 13:19
  Speaker 1: d C. We want to take a moment to let
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  Speaker 1: it out. Learn more at Bloomberg dot com slash lens Well.
• 14:08
  Speaker 1: Emerging markets debt has been one of the hottest asset
• 14:12
  Speaker 1: classes this year. Investors have been piling in money at
• 14:15
  Speaker 1: a really at a record pace into mutual funds that
• 14:18
  Speaker 1: owned this debt. And yet typically this asset class is
• 14:23
  Speaker 1: correlated to both the Federal Reserve raising rates as well
• 14:26
  Speaker 1: as oil prices which have been declining. Why are they
• 14:29
  Speaker 1: not this time around? I want to bring a Damien Sassaur,
• 14:32
  Speaker 1: who's our Bloomberg intelligence strategists focusing on fixed income in
• 14:36
  Speaker 1: the emerging market space. Amy, and I'm so glad that
• 14:38
  Speaker 1: you could join us. You wrote a piece that I
• 14:42
  Speaker 1: thought was really compelling talking about how the correlation between
• 14:46
  Speaker 1: emerging markets debt, in particular in company in countries that
• 14:50
  Speaker 1: are oil dependent, has completely broken down from energy prices
• 14:54
  Speaker 1: what's going on here? Yeah, no, I mean so UM
• 14:56
  Speaker 1: corporate and quasi sovereign debt. Actually the corporations themselves, so
• 15:00
  Speaker 1: Petro Brass, CINEPEC, uh, Pemmic, some of the you know
• 15:04
  Speaker 1: upstream producers, they have historically had a very high correlation
• 15:08
  Speaker 1: to the price of oil and UM. On the latest
• 15:10
  Speaker 1: down turn, all the oil prices have come back, you know,
• 15:13
  Speaker 1: pretty shockingly in the last week and a half. Uh,
• 15:15
  Speaker 1: those spreads are broken down. I mean you have equity prices,
• 15:18
  Speaker 1: you know, trading in line with UM with oil prices
• 15:21
  Speaker 1: falling effectively, but bond spreads have tightened, and that's something
• 15:25
  Speaker 1: new that certainly is not what we saw when CREWD
• 15:28
  Speaker 1: plunged from sixt So what's going on here is it's
• 15:31
  Speaker 1: just a matter of people closing their eyes and covering
• 15:34
  Speaker 1: their ears and going la la, la, la la. Or
• 15:35
  Speaker 1: is there something real in it? Well, at leastly. I mean,
• 15:37
  Speaker 1: this is basically the microcosm of a much broader trend
• 15:40
  Speaker 1: that you and I have talked about. You know, this
• 15:42
  Speaker 1: is this is about fund flows. This is about e
• 15:44
  Speaker 1: M cash flows, which were improving. These are about it's
• 15:47
  Speaker 1: about new issues. You know, we've we've seen record new
• 15:49
  Speaker 1: wish ones here to day an emerging market debt. Yet
• 15:52
  Speaker 1: the fund flows into the asset class and you know
• 15:56
  Speaker 1: the cash flows that the asset classes is basically returning
• 15:59
  Speaker 1: to investors has exceeded that. And so you know it's
• 16:02
  Speaker 1: just um yeah, I mean it's it's really structural. It's
• 16:05
  Speaker 1: really supplied demand technicals that are driving spreads right now. Okay,
• 16:08
  Speaker 1: So when I talk to investors who still are bullish
• 16:11
  Speaker 1: on emerging markets credit, they say a couple of things
• 16:13
  Speaker 1: to be They say, first of all, Uh, these nations,
• 16:16
  Speaker 1: the developing nations are de leveraging compared to developed nations
• 16:21
  Speaker 1: which are boosting their leverage. They also are growing at
• 16:24
  Speaker 1: faster paces. Uh. They also have more stability than they
• 16:28
  Speaker 1: used to. Uh, let's talk about de leveraging. Are they deleveraging? Um?
• 16:32
  Speaker 1: So it depends, right, You've got certain nations where you
• 16:35
  Speaker 1: are in facting that's GDP UM decline um, like the
• 16:39
  Speaker 1: Philippines for example. But you know, by and large, and
• 16:42
  Speaker 1: permit me, the data is a little bit. It's lagged,
• 16:45
  Speaker 1: you know. That's GDP figures don't normally come out you know,
• 16:48
  Speaker 1: as they report. They're usually a three to six month lag,
• 16:50
  Speaker 1: but by and large we're not seeing m de leveraging
• 16:53
  Speaker 1: at the sovereign level and emerging markets UM. In fact,
• 16:56
  Speaker 1: if you look at countries, for example, Saudi Arabia, they've
• 16:58
  Speaker 1: gone from zero to death to GDP in less than
• 17:01
  Speaker 1: a year and UM and that's a single A, well
• 17:04
  Speaker 1: double a single A depending upon which rating agency you're
• 17:06
  Speaker 1: looking at credit right now, and one of the largest
• 17:09
  Speaker 1: issuers in the past twelve months. So you know, You've
• 17:11
  Speaker 1: got others though, like Russia who have been effectively UM
• 17:15
  Speaker 1: blocked out of the international capital markets right because of
• 17:17
  Speaker 1: the sanctions with the U S and EU, and so
• 17:20
  Speaker 1: they've seen, you know, that levels decline simply because they
• 17:22
  Speaker 1: can't access the markets. So you're saying it's patchy, and
• 17:25
  Speaker 1: so some people could say, well, it's a great time
• 17:27
  Speaker 1: for security selection to go in and find the UH
• 17:30
  Speaker 1: the credits and nations that have been deleveraging. One counter
• 17:34
  Speaker 1: argument to that could be that, as we've been talking about,
• 17:37
  Speaker 1: this is a mood driven as a class. When people
• 17:40
  Speaker 1: pour money in, they pile in, When they take money out,
• 17:42
  Speaker 1: they pile out. So couldn't regardless of your security selection,
• 17:46
  Speaker 1: couldn't people be left in a bad spot if the
• 17:49
  Speaker 1: tide turns absolutely. I mean, my colleague Mike mcgloan, as
• 17:53
  Speaker 1: he always says, these as a classes take the escalator
• 17:55
  Speaker 1: up in the elevator down right, so and emerging markets
• 17:58
  Speaker 1: that it's it's a exactly the same thing. I think.
• 18:01
  Speaker 1: What's drawing in investors, it's really four things right now.
• 18:03
  Speaker 1: It's it's carry right, I mean, it's always been a
• 18:05
  Speaker 1: carry play the yield to higher and emerging markets. Historically
• 18:09
  Speaker 1: they have been. Anyway, they're getting to a point now
• 18:11
  Speaker 1: where you know they're they're trading in line, and certainly
• 18:14
  Speaker 1: as investment grade issuers such as you know, I mean
• 18:16
  Speaker 1: China has been a third of new issuance this year
• 18:19
  Speaker 1: and most of those new issuers are i G so
• 18:21
  Speaker 1: are high grades. So effectively, this emerging market index that
• 18:25
  Speaker 1: used to sit with high yield is now becoming a
• 18:28
  Speaker 1: much broader, more diversified, massive class. And that's the other thing.
• 18:32
  Speaker 1: The opportunity set has expanded. We've seen two hundred ninety
• 18:34
  Speaker 1: two billion of new issuance here to date and the
• 18:37
  Speaker 1: diversification by issuers. I mentioned Saudi Arabia, but you've also
• 18:40
  Speaker 1: had benchmark new issuance from Kuwait aman Argentina all access
• 18:45
  Speaker 1: the market this year, so you've got a diversified uh
• 18:49
  Speaker 1: you know, opportunity set more so than you had you
• 18:51
  Speaker 1: know when years passed, right, and so, um, take all
• 18:54
  Speaker 1: of that into consideration, and then you see the fun flows.
• 18:56
  Speaker 1: I mean, this year we've seen twenty billion at the
• 18:58
  Speaker 1: hard currency another you know, this is just this year,
• 19:01
  Speaker 1: another five billion into local currency emerging market debt. This
• 19:04
  Speaker 1: is unprecedented. I have to double check on that, but
• 19:07
  Speaker 1: I would say it's pretty close. I mean, the fund flows,
• 19:10
  Speaker 1: and these are retail fund flows and I'm only looking
• 19:12
  Speaker 1: at the top fifty. Um, you know, uh, open end
• 19:17
  Speaker 1: and exchange traded funds you know that are listed effectively.
• 19:20
  Speaker 1: So but yeah, I mean it's been it's been gangbusters.
• 19:22
  Speaker 1: And I think the one area that we probably should
• 19:25
  Speaker 1: also mention here are our cash flows from the asset class,
• 19:29
  Speaker 1: you know, coupon income, principal redemptions, it's all fueling you know. Yeah,
• 19:34
  Speaker 1: people just keep piling that money back into this debt.
• 19:37
  Speaker 1: The question is what will come when the tide does turn.
• 19:40
  Speaker 1: Damien Sassaur, thank you so much for joining us. Damien
• 19:42
  Speaker 1: Sassaur is fixed Income Strategists for Bloomberg Intelligence here in
• 19:47
  Speaker 1: New York City. Well, for now is infrastructure where it
• 20:01
  Speaker 1: is happening. From May fifteenth through May nineteen, UH and
• 20:05
  Speaker 1: two UH officials wanted to highlight their plan for making
• 20:10
  Speaker 1: the infrastructure system of the US great again. Ray Lehood
• 20:13
  Speaker 1: is former U S Department of Transportation Secretary from two
• 20:16
  Speaker 1: thousand nine to two thousand thirteen, and Ed Rendal is
• 20:19
  Speaker 1: former Pennsylvania governor from two thousand three to two thousand eleven,
• 20:23
  Speaker 1: as well as the Democratic National Committee chairman during the
• 20:26
  Speaker 1: two thousand presidential election. Ray and Ed thank you so
• 20:29
  Speaker 1: much for joining me. One thing I wanted to start
• 20:31
  Speaker 1: with I was reading through your proposal for a two
• 20:34
  Speaker 1: trillion dollar UH infrastructure investment that combines public and private spending.
• 20:39
  Speaker 1: Between now and Ray, I'd love to start with you.
• 20:44
  Speaker 1: Based on your conversations with officials in Washington, UH and
• 20:47
  Speaker 1: some of the rhetoric that we've heard out of the
• 20:49
  Speaker 1: Trump administration, are you more optimistic that there will be
• 20:53
  Speaker 1: some kind of extensive infrastructure spending plan that will be
• 20:56
  Speaker 1: implemented in the short term. Well, I am optimistic because
• 21:00
  Speaker 1: President Trump talked about this in his campaign. He's talked
• 21:04
  Speaker 1: about it since he was elected president. More recently, UH,
• 21:09
  Speaker 1: in the last ten days, he talked about raising the
• 21:11
  Speaker 1: gas tax to pay for his trillion dollar infrastructure program.
• 21:15
  Speaker 1: His Secretary of Transportation, Eline Child gave a speech yesterday
• 21:19
  Speaker 1: at the beginning of Infrastructure Week talking about the use
• 21:24
  Speaker 1: of federal dollars for with public private partnership money. All
• 21:29
  Speaker 1: of the signals are very, very good, and it's about time.
• 21:33
  Speaker 1: America's infrastructure is rotting and we don't have the money
• 21:37
  Speaker 1: to to pay for fixing up our bridges and our
• 21:41
  Speaker 1: roads and our transit systems. And uh, now now is
• 21:44
  Speaker 1: the time to be doing it. And it appears that
• 21:48
  Speaker 1: the administration is talking a good game about it, and
• 21:51
  Speaker 1: it's time for Congress to take action. Well, Governor Rendall,
• 21:54
  Speaker 1: I'd love to get your take on what has taken
• 21:57
  Speaker 1: so long. I mean, according to proposal, it would combine
• 22:00
  Speaker 1: public funding as well as private sources of financing, but
• 22:05
  Speaker 1: it would include a more Build America bonds as well
• 22:08
  Speaker 1: as other you know, potential stripping away some of the
• 22:11
  Speaker 1: restrictions on taxing inner interstate highways. Can you give me
• 22:15
  Speaker 1: a sense of why there's been resistance up till now
• 22:18
  Speaker 1: for a program like this, Well, I think it all
• 22:22
  Speaker 1: stems from Washington's rocks to raise revenue. I mean, Grower
• 22:26
  Speaker 1: nord Quest has done a great job scaring the living
• 22:28
  Speaker 1: daylights at up most of the Republicans and some of
• 22:30
  Speaker 1: the Democrats about doing anything to fund infrastructure or pair.
• 22:36
  Speaker 1: Everyone says, we need to do something about our infrastructure,
• 22:39
  Speaker 1: but no one wants to pay for it. And uh,
• 22:43
  Speaker 1: obviously we can't do it. We need to pay for
• 22:46
  Speaker 1: it some way. We can get the private sector involved,
• 22:48
  Speaker 1: but they are only going to be part of the problem.
• 22:51
  Speaker 1: The solution, we need the government to step up. Twenty
• 22:54
  Speaker 1: three states in the last five years have raised their
• 22:57
  Speaker 1: own gas tax. Uh, and we ought to be raising
• 22:59
  Speaker 1: the federal gas tax. The bill proposed by Senator Bob Corker,
• 23:04
  Speaker 1: a conservative from Tennessee, that would raise the gas tax
• 23:07
  Speaker 1: ten cents gallon index it to inflation. That's a step
• 23:11
  Speaker 1: in the right direction. And to tell you the truth,
• 23:13
  Speaker 1: at least a very few Americans. I give this speech
• 23:16
  Speaker 1: all the time, and I asked people what is the
• 23:18
  Speaker 1: federal gas tax per gallon? And one out of people
• 23:22
  Speaker 1: know it's seventeen point eight cents a gallon. It hasn't
• 23:27
  Speaker 1: been raised since when both Plant was president and before him,
• 23:32
  Speaker 1: the great conservative of Ronald Reagan raised the gas tax
• 23:35
  Speaker 1: and said, why would we put off doing something today?
• 23:38
  Speaker 1: But if we wait ten years, it's gonna be twice
• 23:40
  Speaker 1: as expensive. Ronald Reagan was right. It's time for us
• 23:43
  Speaker 1: to build it now. It's time for the Congress to
• 23:48
  Speaker 1: step up, to remove the ban up on the states
• 23:51
  Speaker 1: for trolling roads, to give more money to the tiffied program,
• 23:55
  Speaker 1: but to do build America's bonds, and to raise the
• 23:58
  Speaker 1: gas tax. If we do all these things, private sector involved,
• 24:02
  Speaker 1: the states and local government involved, and get some real
• 24:05
  Speaker 1: sederal dollars best in our growth, we'll have a revitalized infrastructure,
• 24:09
  Speaker 1: will be competitive again with the rest of the world,
• 24:12
  Speaker 1: and will create two or three million uh first class
• 24:16
  Speaker 1: family sustaining job as a pay somewhere between sixty and
• 24:20
  Speaker 1: hundred past dollars working on the roads and bridges and
• 24:23
  Speaker 1: working on the water systems, doing the things that are
• 24:25
  Speaker 1: necessary and manufacturing and steal as full and the aggregate
• 24:30
  Speaker 1: that they're necessary. Do Infrastructure Secretary Lohood, I'd love to
• 24:34
  Speaker 1: get your sense on the most pressing project that really
• 24:38
  Speaker 1: needs to get done within the next few years in
• 24:40
  Speaker 1: order to keep the US competitive. I thought that it
• 24:44
  Speaker 1: was really compelling that you highlighted how the US was
• 24:47
  Speaker 1: ranked eleventh by w e F in a recent survey
• 24:51
  Speaker 1: for its infrastructure system. From what was it number one
• 24:54
  Speaker 1: in two thousand five? What does it needs to get
• 24:57
  Speaker 1: back up to speed? Or we have sixty structurally deficient bridges.
• 25:03
  Speaker 1: They need to be fixed in the Northeast corridor. Certainly,
• 25:07
  Speaker 1: the Gateway project, which would add additional new capacity uh
• 25:12
  Speaker 1: to people in the New York New Jersey region, is
• 25:15
  Speaker 1: an important project. The California High Speed Rail project in
• 25:20
  Speaker 1: California is an important project. There are important projects all
• 25:24
  Speaker 1: over America. I mean we could go, you can go
• 25:26
  Speaker 1: region by region or state by state. Every state has
• 25:30
  Speaker 1: a one or two or three very very important projects
• 25:35
  Speaker 1: that have kind of languished because the federal government has
• 25:39
  Speaker 1: has really uh stepped aside from its responsibility to provide
• 25:44
  Speaker 1: the money. And now there seems to be some leadership
• 25:47
  Speaker 1: and some good discussion about a trillion dollar infrastructure program
• 25:53
  Speaker 1: and uh, if that happens, every state in the country
• 25:57
  Speaker 1: will benefit from it. Well, Secretary Hood, I wanted to
• 26:00
  Speaker 1: follow up on that because you wrote a book seeking
• 26:02
  Speaker 1: bipartisanship my life in politics, and right now we are
• 26:06
  Speaker 1: seeing anything but bipartisanship in Congress. And I'm wondering, you know,
• 26:11
  Speaker 1: given the developments in Washington over the past few weeks,
• 26:15
  Speaker 1: has that put a damper on some of your enthusiasm
• 26:18
  Speaker 1: and optimism about the potential for a one trillion infrastructure
• 26:21
  Speaker 1: spending plan, which we really haven't heard much about. I
• 26:24
  Speaker 1: do think transportation has been and should continue to be
• 26:28
  Speaker 1: a bipartisan issue that Congress can deal with. I served
• 26:32
  Speaker 1: in Congress for fourteen years. I was on the Transportation
• 26:36
  Speaker 1: Committee for six of those years. We passed two six
• 26:39
  Speaker 1: year bills. We did it in a bipartisan way. UH,
• 26:43
  Speaker 1: seventy five members on the committee. All seventy five members
• 26:46
  Speaker 1: voted for the bill. Over four members of the House
• 26:50
  Speaker 1: voted for those bills, over eighty members of the Senate.
• 26:53
  Speaker 1: That's what we need to get back to. And UH,
• 26:56
  Speaker 1: in spite of the fact that there is a lot
• 26:58
  Speaker 1: of acrimony and angst about UM some of the things
• 27:03
  Speaker 1: that the Trump administration has done, I do think that
• 27:07
  Speaker 1: the idea of transportation and infrastructure and fixing are are
• 27:14
  Speaker 1: ailing transportation system UH can can be bipartisan and um
• 27:21
  Speaker 1: I hope that it will be Relorhood, former U S
• 27:24
  Speaker 1: Department of Transportation secretary from two thousand and nine to
• 27:27
  Speaker 1: two thirteen, as well as a former Pennsylvania Governor Ed
• 27:31
  Speaker 1: Rendal and Democratic National Committee chairman during the two thousand
• 27:35
  Speaker 1: presidential election. Thank you both so much for joining us
• 27:38
  Speaker 1: on this Infrastructure week day talking about how we really
• 27:43
  Speaker 1: need a two trillion dollar infrastructure investment between now and
• 27:47
  Speaker 1: to close an investment gap that is becoming ever more
• 27:50
  Speaker 1: prevalent each day. And just to sort of reiterate an
• 27:54
  Speaker 1: earlier point, the World Economic Forum ranked the competitiveness of
• 27:58
  Speaker 1: the US infrastructre your system as number eleven, down from
• 28:02
  Speaker 1: number one in two thousand and five, so it definitely
• 28:05
  Speaker 1: points to much needed infrastructure. Thanks for listening to the
• 28:11
  Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
• 28:14
  Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform
• 28:18
  Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox.
• 28:22
  Speaker 1: I'm on Twitter at Lisa abramoids one. Before the podcast,
• 28:26
  Speaker 1: you can always catch us worldwide on Bloomberg Radio