President Trump Facing Scrutiny Over Personal Finances

Week on iTunes, SoundCloud, bl Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio every weekday, or watch us on YouTube by searching Bloomberg Global News. Well, let's set the business week agenda, understand what investors may be thinking going into this week. Gina Martin Adams with this, chief equity strategist for Bloomberg Intelligence, joining us on the phone from New Jersey. So, Gina, nice to have you with us. A little bit of

a different tone. What are investors thinking about today? Yeah, Well, first, thank you for having me. It's always good to join you guys on a Monday afternoon. In terms of what investors are thinking, I think it's all actually started um as if Thursday's trade. We noticed in our chart book last week that some of the stocks that really got us into this mess, namely the technology, communications, consumer discretionaries, some of those really high flyers over the summer had

finally reached some signals of stabilization. As of Thursday's trades. We started to see a little bit of recovery in the broad market on Friday, and I think this is a lot of follow through of that recovery. Though I think it's really notable that it's not tech that's leading, and this has been part of our strategy really since

the beginning of September. Our sector scorecards suggested that we were moving into a new phase of the market where the leadership would have to rotate to the sectors where we're exposed to experience the biggest economic recovery into one eventually, and that means not the tech COVID sort of safety plays, but more value cyclical type of stocks like the industrials and materials and energy in the world and even energy. So I think that what's happening is a bit of

rotation and finally you get the tech sector stabilizing. So your primary source of downdraft in stocks is stable, and that allows for the sectors that have actually been performing reasonably well, like industrials and materials, to perform um and to continue to show that leadership well. And I do wonder Gina, and first of all, we love having you, so it's a great way for us to start off our week. Um is, do you think you're getting more

visibility at all from CEOs? Jason and I talked to a lot of CEOs, and I still feel like there's still that like, yeah, we don't quite know what's going you know one. But do you feel like you're starting to get a little bit more guidance? Uh, certainly when it comes to earnings and earnings growth. Yeah, I think you're getting guidance on some things, but not on others. I think I think CEO they're picking and choosing very

carefully where they can provide visibility, they will. For instance, you know, if you flashback six months ago, there was no visibility because there were companies were scrambling to such an extent that they were just working to survive, let alone thurrive. And I think that the converse that is slowly shifting to how do we thrive. How do we do well in an environment where we do have a

lot of people still working from home. There are still a lot of unemployed, but there is incremental improvement in the economy. How do we navigate an economy that's partially open but operating in a different way than economy. It's certainly not the crisis mode that we were in in the fall, but I do think that there is a little bit more forward looking commentary, more focus on how to grow rather than just how to survive. Now that we've gotten past the peak of the crisis period, it's

about how do we navigate this new recovery Either. That said, nobody has fantastic visibility into what the economy is going to look like, obviously, but there are some signs of light. There are some signs of improvement. There are the CEOs that have had the experience of recovery in China and can kind of take that story of Asian recovery and and place it on in the Western world and say, well, where could we go from here and what does our

outlook look like in a post COVID environment. Yeah, it's also interesting, Gina, And I know this is a loaded word when it comes to two markets, but there's almost this sense of capitulation or maybe resignation that, Listen, the virus is going to be with us for for some amount of time, and maybe longer than we certainly thought in March or April, but we're learning to live with

it in a certain way. Obviously, the next few months are going to be um difficult and and and we don't know what to expect, but investors sort of living with it to some extent and getting and maybe understanding that the new normal is a new normal with the virus, not a new normal post virus in some ways. Yeah, I think that. I think that's absolutely spought on correct

is and that's the change in the language. Right If you think six months ago, it was okay, well this might go away soon, and then it was okay, that's never going to go away, and now it's well, we're going to make incremental progress to improvement. But the reality is we're not going to go back to anytime soon. It's not going to just completely go away, but it also is not going to be crisis mode forever. So I think we're trying to kind of trying to find

that middle ground. It's a little bit more about realism and assessing where the realistic outlook is. At the same time, there obviously is a lot of fireworks coming out of Washington. I mean, you've got everything from what It's amazing how much we are contending with in terms of just political volatility right now in the midst of this virus environment.

And so I think that companies are going to have to address that in the post election period when we know who the players are in Washington, right and we don't even know when we're going to know at this point, so that even that is up for a speculation, all right, Gina Martin Adams, thank you so much. Great way to start the week, Chief Equity Strategies for Blueberg Intelligence. Joining

us on the phone from Jersey. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Well Global COVID nineteen cases topping thirty three million as infections in India reached the six million mark, the official death toll nearing one million worldwide. The experts say the real tally maybe almost double that. Let's get back to someone it's been one of our he has been one of our go to voices. During the COVID nineteen pandemic.

Dr Sandra Galia is back with us. Diana, professor at Boston University School of Public Health, author of Pained Uncomfortable Conversations about the public's health, and he joins us once again on the phone from Boston UM. Dr Galia, so nice to have you back with Jason and myself. How are you, how's this school? Tell us how things are going? Hi? Gerald, Hi Jason, Thank you for having me again. You know

it has been there has been a challenging month. I think it's a challenging month for everybody who is part of an institution that is trying to balance the risks of the moment we are. We are a university have been reopening cautiously, carefully with a lot of testing, a lot of contact, tracing, a lot of isolation as needed, and really working hard to keep the community safe. We'll also working on our mission and continuing teaching and containing

our research. And it's a tough balance. I think it's a tough balance for everybody, and and it's part of I think a broader societal place where we are at, where we are recognizing that we are living with COVID for some time now and uh, and we cannot afford to keep our world slow down because there are important

things that we have to do. And so give us a sense of that balance, Dr Galia, like, what is something where you feel like you've found it in terms of either staffing or class size or doing labs, Like, give us an example of where you feel like, Okay, well this this feels about as good as we can get. Well, Jason, I think, uh, I don't think I feel confident telling you anything as good as at the camp. I think I think everything is a working progress. Don't. Let's talk

about what we're doing. So we as a university are testing people extensively. We have about five to six thousand tests a day happening, so students are tested in multiple times a week. We have a lot of people who are involved bought in the testing, but then also somebody tests positive and the contact racing to see who they've

been in contact with. Right, So the idea is, and we had discussed this before in our previous conversations, the idea with testing is that you catch a case early so that it does not become a cluster that does not then continue the epidemic. So you find the case, you do contact tracing, you find the people around that case,

you quarantine those people, and you isolate the case. And of course all of that is superimposed over a very strict regiment of building hygiene, and by that I mean ventilation and the building wiping down surfaces, a very strong public campaign for people to remain safe, wearing masks, making sure that people are not in if they're sick, and

everyday doing symptoms screens for everybody. So it really is a fairly comprehensive effort, and it is in some respects I think the challenges that it's a comprehensive effort that has to happen now and has to keep happening really for weeks and months until there is a definitive vaccine for COVID. Talk to me about contact tracing, because I feel like we are getting very mixed results, mixed reviews in terms of people essentially saying yep, I'm not going

to cooperate. It's voluntary, and I'm not going to tell you either I don't want to get in trouble because I was at a party, or I feel like it's an invasion of my privacy. How do you manage that well. In some respects, I think it's easier to manage that within a closed system of one institution versus in the general population. Right, So in our in our system, in our system, we have been very clear that this is

part of the cost of citizenship. If you're if you're going to be part of the community, you have responsibility to work towards keeping others safe. And part of that responsibility is if you test positive, is that you talk to the contact tracers and you told them who you've been in contact with, so that they can reach out to those people and make sure we keep them safe as well. It's harder to do that in the general population. There's not a lot of reports about fifty people in

general population answer and talk to contact traitors. That's that's in the general population where I think there isn't as much of a sense of shared responsibility for one another there should be. I'm just reflecting on probably what's going out there. Yeah, now that's a big part of it. I mean, Jason and I've talked about it. I know, when my daughter got together with some classmates at the end of the summer and we had kind of quarantined her for months. You know, we as families went into

it saying Okay, what have you been doing? Who's getting tested? You know, like there was this sense of community to make sure everybody stayed safe. And I feel like, you know, there not everybody's on the same page with that. Also, to be fair and Dr Glaire, you understand that's not everybody can be on the same page. There are some people that you know, if they don't go to work, they don't get paid in it, they're in a tougher predicament.

And I just you know, I just well, I think, I mean, this is why, this is why Carol, I think the reopening is so important. I think it's a The data are very clear, for example, that your chances of being able to work from home are much higher if you're in the top quartile of income. So people who are who are who have to go to work are people who are already making less income. We know

that it overlaps with race, right. We know that the disproportionate burn of COVID in many respects was because we expose people that low income people of color often to work before we understood how COVID works. But the the economic shutdown, I feel like the public conversation about the economic slowdown hasn't been fair because, to be to be frank, it's been there. It's been directed by people whose livelihoods that's not really at risk from economic slowdown because they

can work from home. But the fact that more than half the population cannot work from home. So if we if we if we say, if we take the premise that well, we should reduce risk of COVID at all costs, well, do we really mean at all costs or do we mean at all costs to somebody else? I think we need to be honest with that, and and and and economic slowdowns hurt people who are already at the low end of making income, and that is something that we as a society have a responsibility to try to avoid

as much as possible. To get back to our conversation with Dr Sandro Galia, dean at the Boston University School of Public Health, also the author of the book Pained Uncomfortable Conversations about the Public's Health. So let's talk about the public's health. Dr Galia, What can we be doing before we get to the other side of this? What should we be doing to ensure that we don't lose sight of these inequalities that have been laid bare by

this pandemic. And Jason, I think what the pandemic has shown us, and I like your use of the term laid bare. It has shown us the inequalities that existed already before the pandemic. The country is really shaped by deep socio economic and equalities and deep racial inequalities. And those inequalities have helped analogus. Just like we have have the have not, we have held haves and have not

around those two acts. Now, the the pandemic revealed that we have Black Americans have two and a half times greater risk of dying during COVID than white Americans, and that is largely due to the double whammy of one greater burden of disease among the black Americans had convered the white Americans, and number two that a disproportionate number of them work in what we came to call sort of essential work, frontline work, work that exposed them to

get in COVID. So to my mind, what COVID is now letting us see what was already there for us to see had we looked for it. So the question you ask is, how do we not forget this, and I think we do not forget this frankly, by continue to have the conversation and and saying to ourselves the time to fix these inequities by socioconomic class, by by race is not when we're under dress room pandemic. It's

when the pandemic is over, before the next pandemic. So I really think that there's going to be and there should be a reckoning with what are the forces in our society economic forces to social forces that we need to realign once the pandemic is over. You know, the metaphor that keeps running through my mind is you're on a ship going through a storm, right, and the ship going through a storm, and the ship is not doing well because it's leaking or because the sailors don't know

what they're doing well. While you're going through the storm, the best you can do is try to patch up the patch, patch up the prow, and get your sailors to do something that's not too terrible. But really, the time when you should be fixing the ship is when you're past the storm, So you should be getting the

ship ready to face the next storm. And we as a country have ignored this for for decades, so it is if one were to be silver lining inclined, this could be a good time for reflection for us once we get past this pandemic and say, what are the structures we want to build to make the country healthier and ready for the next time. What would be the

structures you would build? Well, I think the big mistake carel that we've been making is we con late healthcare with health We spend more on healthcare than any the country in the world by a lot, by about more than any other country in the world, and yet compared to other high income countries, which is really only fair comparison, we have the worst health indicators compared to you know, we we have lower life expectancy, we have higher heart disease,

we have higher cancer mortality rates. Now why is that? The reason that is is very simple. It's because all our money goes into high tech medicine that's there to cure us when we all least sick. What we need to do is we need to prevent disease before it starts. And the way to do that is by having livable wages, safe housing, availability of nutritious food, gender equity, less violence, and unless we invest in those forces, we are going to keep pumping money into healthcare and our health is

still going to light behind. So that's at the fundamental level. It requires understanding what what produces health and invested in what produces health, not just investing in healthcare. Yeah, that's a really Dr Sandragolia, thank you so much. Really nice to have you back with us. We look forward to next time for sure. Dean of Boston University's School of Public Health also the author of Pained Uncomfortable Conversations about

the Public's Health, and it's such an important point. Carol and I had never really heard it distilled down like that we separate healthcare from health. We do think we think about it when we talk about it from an investment perspective. It's the health care industry. But all of those things that he talked about, and education, I feel like there's a pretty clear um path too. But nutrition, I feel like sometimes food we separate from health. We

totally do. But I thought what he said about livable wages, safe housing, you wouldn't necessarily correlate that right with better health either. But it's all intertwined. You need all of a total steps that that whole last thing, how he tied it up, I thought was just brilliant. That's a T shirt all on its own. That's that's like a jogging suit plus socks and sneaks. I'm just going to say, courtesy of Dr Sandrew Galleia, this is Bloomberg Business Week

with Carol Messer and Jason Kelly on Bloomberg Radio. Well, I'm really excited to talk about this next story because it's just in such the Bloomberg wheelhouse and so appropriate for a time when we're talking so much about it could be a Netflix series two and how it's managed. I know, it's so great. Neil Weinberg, one of our favorite reporters here are senior projects and an investigations reporter

for Bloomberg. Johnny is on the phone from New York along with Joel Webber, the editor of Bloomberg Business Week. He joins us from Massachusetts, and Joel, I feel like this is also one of these stories that's so in the Joel Webber wheelhouse too, because you were the editor of Bloomberg Markets before you became theater of Bloomberg Business Week, so you understand all the intricacies of this world. Set

this up for us. It's funny. It actually makes me remember a very similar story that Neil did for me once upon a time that actually goes to some similar places. And this is the story that Neil spent a lot of time on and it's a really interesting one because all rich people in their bankers UM and if that doesn't get your attention, I don't know what does, especially

here in September right exactly. So, So Neil, let's let's talk about this, because it's not a story that UM goes particularly well for the rich guy, or at least it hasn't so far. What's what are we talking about? No, I guess the sort of conceit of the of the story is the idea that when you're talking about private banking, the banking for the super rich, you're talking about the service that you don't get walking into your local branch office.

And this goes obviously to things like investing and putting your money in savings accounts, but it also goes to things that can include outside investments or sports tickets or dinner reservations or private planes or you name it, and they'll arrange it for you. And the question in the story is, at what point does it stop becoming banking and become something else. At what point are the clients lulled into sort of a sense of comfort with their

bankers where they're not exactly trusting but verifying. Yeah, who are the characters that you're talking about here, Neil? In this case, we're talking about a extremely wealthy young Mexican gentleman named Moises Coco Spinosa. He inherited a lot of money, went at a very young age, when he was in his teens. Among his holdings is a buildings fifty nine stories on the corner of Fifth Avenue and forty two Street, across from the New York Public Library, to name one.

Uh So, he had a lot of money at a very young age, and he was introduced to a pretty young banker banker who at the time was in his twenties, and they struck up a relationship which from our reporting indicates that it was professional, it was also social and uh it sort of gets into the story, gets into of the dark corners of you know, what is trust and what is appropriate uh in in banking and beyond. Well, I also feel, like you know, Neil, that it raises

questions like are these relationships usually mutually beneficial. I mean, there's fees that the banker gets for doing transactions and so on and so forth. But I do wonder there's a balance, right, and I feel like this story gets too Did the bankers go you know, over the line

in terms of what they did? Absolutely, And obviously you're always going to have attention in a sales environment, whether you're selling cards or computers or banking services, where the more revenue you generate for your employer probably means you'll get paid more too, which was the case here. And on the other hand, obviously it's a good deal for a client to get a good deal, so you have

to sort of strike a balance. And in this case, after many years where the banker and the client we're working together, the client came to the conclusion that no, he wasn't getting good service, he was getting ripped off Neil. Another UM element that it kind of stands out here is that the banker in question, who obviously UM has disputed the allegations UM, wasn't like he stuck at one bank, right, He actually moved around and brought the client with him.

Talk to us about that element exactly. Uh, this was a banker who started in his twenties after he had skied in the Olympics of all things. M a fellow Mexican UH, he joined City Bank. He then moved for a larger pay package to credit suee and ultimately ended up at Morgan Stanley in Miami, where he was part

of the Latin American practice. UH. The client, Moises Coco, followed him from one bank to the next, set up a family office along the way, and UH he and he hired to run his family the office another banker who was very familiar to both the banker and the client, which raised questions about UH conflicts of interest and whether the the relationship was too cozy for comfort, or at

least too cozy to work appropriately well. So, I wonder if the problems are because the investments didn't pay off and that's why we had lawsuits, because I feel like these cozy relationships maybe would be okay if everything went along fine. Is that is it a case that things didn't go so well and that's why we have lawsuits? I mean, I guess this is what we're trying to figure out. Well, it's important to say in this case

it's a hotly disputed legal dispute at this point. But what the client is alleging in a lawsuit and in a private arbitration before finra UH is that the bankers, he says, stepped way over the line and they were doing transactions inside the bank. In this case, the bank he is pointing UH finger at is credit SUEEE, and he is saying that the bankers were doing transactions purely

to profit themselves and their employer. In addition, he's alleging that they encouraged him to get involved in outside investment sort of private private equity or private placement type of deals where they say there was a lot of self He says, there was a lot of self dealing going on. The bankers, the one who was inside the bank and the one who was running the family office, have vehemently

denied the allegations. Yeah, it's interesting. I mean, you talk about in this story where you know that the lines blur in part because these are not always traditional straight ahead investments, and so it's hard, especially if you're not well versed in this area, to even know sort of what's cool and what is not cool exactly. And the other question is at what point should a client who is UH in control at a young age of ten's or hundreds of millions of dollars or potentially more. How

much attention should they pay? Should they have advisors to keep an eye on their advisors in this case? Uh? You know exactly what happens depends on which side you ask, but clearly the relationship went way off the rails. Well. Not surprisingly, it is one of the most read stories on the Bloomberg and will continue to be. I have to imagine a lot of our wealthier and maybe not so wealthy customers are sending this to the banker being like, call tomorrow, can we check in? Can we check in?

All right, Neil Weinberg, terrific piece of reporting. Thank you so much, senior Projects and Investigation supporter for Bloomberg. Check that story out online and on the Bloomberg Ard thinks as well. To Joel Webber, Carroll, it's like you got to read it too, because there's just some great detail exactly, Its just the way it starts. It's just wonderful. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. All right, let's do a little business

Week economics. Now, our pal Andy Brown is back with us, editorial director for Bloomberg New Economy, joins us on the phone from New Hampshire. So I am really into this reason. Tell him that you wrote, Andy, because it really brings to the forest something that I think is dare I say, sort of hiding in plain sight when it comes to China, which is around climate change. Tell us what you took on. Yeah. So, so the central point is that when it comes to

climate change, China is at war with itself. Um. You know, on the one hand, it's a global superpower when it comes to renewable energy batteries, soul wind. On the other hand, Um, you know, it minds and burns half the world's coal. And right now it has in its development pipeline power stations with a either approved or about to get the green light, with the capacity equal to the entire installed

coal capacity of the European Union. So you know, in a sense, it hardly matters what the rest of the world does, um, because China is going to swamp all of those efforts. And this is why she Campings announcement last week that China was to go is to go common neutral by two thousand and sixty. Why it is potentially potentially so important. Well, and I wonder Andy, I mean, I love what you wrote, this whole idea of two Titanic forces, one clean one dirty that are at constant war.

In China fractures domestic economy. I mean, like it or not, they still use so much coal and have to write as being you know, kind of the manufacturer to the world. They've got a lot to power. I mean, they needed to keep their economy growing. But at the same time, China is increasingly I feel like, you know, stepping or as you right, stepping into a void that the US has stepped out of when it comes to hey, world,

let's all work together to protect the climate exactly. So, so coal is shrinking in the rest of the world, and it's it's rising dramatically in China, particularly now that China wants to jump start its economy from the COVID lockdowns. Fire up, fire up the boilers. But here's the thing,

China doesn't actually need all the capacity it's building. Um. You know, these these power plants that that that that that it's cranking out, um, add to a fleet that is in massive overcapacity about fifty So what's happening is that China is exporting its self lest capacity to countries along its Belt and Road infrastructure megaproject, including Turkey, places like Pakistan, Indonesia, and worse than that, the technology that is exporting is its most basic, most polluting duty is technology.

So Andy, you mentioned President Hijimping earlier in the conversation, what is his role in all of this? Because more so it feels like than any world leader, he has not just a massive economy that he's responsible for, but he has control of that economy in a way that few world leaders do well. That is, that is that is somewhat true. But I mean if even Ji Jim ping um is subject to forces that are beyond his control um and and this is this sort of both

positive negative. So so if you think about why is China cranking out all these power plants, well, provincial governments need growth um and the easiest way they find to promote growth is by by by manufacturing uh, you know, coal gear. On the other hand, he's under huge domestic pressure to do something about the environment. So the legitimacy of his party state derives and has done for the

past forty years from rapid economic growth. Increasingly people in China to say, we want you to prioritize clean air, clean water. So that's on the sort of the public opinion side. There's also in a more positive vein this idea that China could actually use renewable or green technologies to become a world economic leader, industrial leader. We've already

talked about batteries and coal and so on. There are all these carbon capture and storage technologies that have yet to be develop Look, China could actually become a the the leader in these technologies of the future. So there is there is big incentive on the negative side. And and and this is very important to him. You know, China stuff as massive drought in the north, it has bloods in the south, the Yanks. The Yanks River has

has been has been swelling. There's putting huge pressure on the three gorgeous damn huge parts of coastal China's manufacturing could disappear if if you get rising sea levels. So it does have a great incentive to tackle climate. So will it This is the question. So a lot of people say, well, you know, easy to say, right, climate neutral by two thousand and sixty forty years away. You know, that's long after g J being himself is gonna will

have will have gone to meet marks. As they say, um so so so we said we'll talk is cheap. We will, however, find out whether there is some substance to what he said by looking at the details in the next five year plan right to thousand and one to two. Those will be coming out in the next few months, probably early next year, so we'll see. Um. You know, it's it's I don't think we should be we should we shouldn't take this at face value, but

nor I think should we be too skeptical? Right? All right, Well, it's very smart, as always, great context for us to consider. Andy Brown, editorial director for Bloomberg New Economy. Check out his latest column, China has a big climate change paradox. Just massive numbers, massive influence, but the scale of both the opportunity but also the challenge. He really laid them

out nicely there. But I do feel like anytime we talk to anybody in the alternative energy space or the e V space, they bring up China as being able. You know, that's a huge market and their way ahead in many ways. We do want to mention a headline crossing the Trump administration considering fresh sanctions to sever Iran's economy from the outside world, except in limited circumstance, says by targeting more than a dozen banks and labeling the

entire financial sector off limits. Is according to three people familiar with the matter. Our team at a d C reporting this. This is Bloomberg Business Week with Carol Masser

and Jason Kelly on Bloomberg Radio. The story, I think it's fair to say that just about everyone who looks at the world of politics and taxes for that matter, was really talking about was the blockbuster report in the New York Times all about President Trump's taxes over the past two decades, what he paid, what he didn't pay, maybe most importantly going forward, the debt that is coming to As we were reading this, we thought, who could tell us what this actually means? And we came up

with a perfect solution as a team. Laura Davison, Congressional tax reporter for Bloomberg, She joins us on the phone from d C. All right, so, Laura d words in the main story, A lot of us read it all. You read it though with me, be a different eye than someone who's just like, oh, what are the politics of this tell us what jumped out at you here. So some of the things that it talked about, the business losses, those are sort of ordinary uses of the

tax code. But in case, speaking with a bunch of tax layers all morning, there's a bunch of things that they said that looks a little bit funky, um, particularly the consulting fees those so high and going to employees like Ivanka Trump as the as the report detailed, they say that is highly unusual and and probably potentially could run against some some i r S rules. Other things like the Seven Springs estate in Westchester County. Uh, he has two different ways that he's sort of generating tax

breaks off of that. One is through this conservation easement deal where who's able to generate a really big charitable tax deduction. There lots of questions about whether the property was really valued correctly. The i r S has identified that sort of transaction is one that's ripe for abuse.

So a lot of questions they're also sort of on that same property Trump has has as an investment property for for business purposes, for tax purposes, but also publicly in the Trumps suns and set, oh, this is our family compound. On the Trump Organization website, it's listed as a family or treat There's some discrepancies there about how how it's being viewed kind of in the eyes of of the tax code, and then how they're actually treating it, which were things that would really raise red flags for

I R. S auditors. One thing that jumps out is um it also said he earned seventy three million dollars abroad in his first two years in the White House, including from authoritarian leaning countries as you point out in your story, such as the Philippines and Turkey, despite a pledge that he would pursue no new foreign deals while president. That's a big no no. Yeah, And this is one thing that Democrats in particular are leaning in really hard things. Is why we need to see, you know, more of

you know, the full extent of at tax returns. We need to have more financial disclosures. Uh. They're really pointing that is to you know, something that could be an issue. Um. There's also you know, some saying, look, this could be an issue for Trump in terms of him leaving office. He has all these can actions. You know, There's been a lot of kind of confusion and questions thrown into you know, kind of will there be a peaceful transfer

of power? And this sort of adds another layer of sort of confusion and murkiness around that about what Trumps ties maybe to the presidency, to his businesses, and to why kind of the stake he has in as staying in the Oval office. So, Laura, as you were talking to tax experts today and I guess you were texting with them last night as we all were, you know, trying to sort of figure out what what this all means.

As you had those conversations, how much of a tone of there was like, look, this is what rich guys do. They hire a bunch of lawyers, they hire a bunch of accountants, They pay as little tax as possible. And this is just kind of an extreme example of this. I think it's a little bit more than than an extreme example of you know, they're sort of you know, really using a tax code, uh, you know, to your advantage.

And then there's maybe crossing some lines. Here is the is the Times articles details several things that that tax lawyer said, Hey, look this is really beyond what I would advise my clients to do. But kind of in

the in the bigger picture here. This really is a demonstration of how there are sort of parallel tax codes, one for sort of just you know, quote average people who earn salaries versus if you have uh, you know a lot of different businesses and lots of different entities, and you know, can employ some smart tax people, you can really save a lot more and pay a lot lower rate than someone who is you know, just filing

with H and R block. But these are his actual tax forms, because it's interesting in your story, you knowe that a lawyer for the Trump organization tell the Times that quote most if not all, of the facts appear to be inaccurate. I mean they are reporting off of his tax forms. Yes, they didn't validate the forms with the Trump organization. They decided to protect their sources to keep those um in house. But they detailed you know, all the all the different information that was that was

listed on those tax forms. So there seems to be a discrepancy that I'm not proven to you between the Trump organization and the Times. But the Time says that they obtained the forms uh from a source that legally had access to them, and then you know, they verified the numbers um. You know, through reporting on their own. What about the three million dollars in loans um obligations for which the president is personally responsible that are going to come do I think in the next couple of years.

What do we know about that? So there's a lot of questions there about where those loans are tied to. Nancy Pelosi raised that today, Um how speaker in as one of her concerns if you know, you who has those obligations and and how might he be beholden to to those debtors um. The other thing, too, is just sort of bigger picture. You look at Trump has a

potentially very precarious financial situation going forward. He has these loans that will come do he potentially could have a very big tax bill from the I R. S Uh. There's lots of questions about sort of his financial situation and sort of you know, particularly if he's still in the government, Uh, you know, what incentives he might have to to make sure that he uh you know, he does it full he doesn't have to file for bankruptcy, right exactly, all right, Laura David's in great context. Thank

you so much. Congressional tax reporter for Bloomberg. Joonius on the phone from the nation's capital, every one trying to break down what it all means, what it means going forward. Carol as I couldn't get any more strata. Just wait. We've got the days to go. But he's still plenty of time. We got a little ele plenty of time, plenty of time for some more shenanigans. Don't you worry, don't you worry? You're a pretty little heads. I knew where that was going. I didn't say it, didn't say it.

I thought. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Let's get to the drive to the close. Happy to have back with this, Deepak Poory. He is c IO of the America's at Deutsche Bank Wealth Management. Johnny on the phone, tepack. Really nice to have you back with us. Great, thank you, Jason, good to be back. So what are you saying out there these days? We had a few kind of rough weeks and certainly a few rough days on the market

last week, but a little more optimism today. It looks like we're going to close in the green, and we've had a couple of experts ahead of you come in and say, well, some of it is just some rebalancing that's going on, some of it is optimism about the virus, some of it is optimism about banks. What do you think. I think it's a combination of these things that you

just mentioned. But I just would like to have your listeners go to the month of August, where the markets had a very significant rally, you know, in some cases low double digits. So I think September looks like we're going to be still down for the month. Um, you know, warrants that there was some profit taking in the month of September, which is not too out of for ordinary

given it's an election year. And um and I do feel that the nastac pullback that we saw is somewhat healthy because some of the front especially in the megacaf tech name, that has been really driving not just a naspact also FMP, you know, would make some money on the sideline, make it a better, more appealing investment for the long run. And I don't know, Jason, did you

mention this the portfolio rebalancing? I know, Okay, so yeah, so I know our Vinceagnerella had shared some some insight with both of us earlier and and talked about this, you know, month end quarter and portfolio rebalancing. I mean we I mean it's technical, but it happens, right, I mean, deep back, that's what we see kind of at the end of a month or end of a quarter, and we could be seeing you know, some investors, you know, kind of doing some rebalancing and bringing their asset allocations

back in line. Yes, indeed, and I think you know, one should also keep in mind that the entire attacks regime might also be in course for a change if there's a change in the White House, especially if there is a Blue Way. You know, I don't necessarily expect that to be the first course of order, but that's can potentially happen. The Biden you know, manifesto holds for an increase of taxes on both the long term tabital

gains in ordinary dividends. So I think might be you know, this time around, it's a normal rebalancing quarter end, but I think end of the rebalancing this particularly, it might be even more severe than what we are used to in other years. So when you think about sort of writing out this period, you know, we're getting closer and closer to thirty days out from the election, and you alluded to some of the different plans. Do you just kind of stay still here if you're an investor and

wait for it to play out? I mean, how do you uh anticipate or how difficult is it gonna be to just kind of do that given all the at least political and rhetorical volatility we expect to see. Yeah, I think this has been such a unique here, Jason, and I don't think it's going to really abate anytime soon. I think we're entering this heightened period of volatility. Normally in a general election year, that volatility tends to go down post election. I'm not sure that this time around

that happens. You know, we've already seen this rhetoric in terms of a contested election, and that might prolong the volatility. Case in point, if you look back to another contested election two thousand, you know, the SMP drop five percent from the date of the election to the time the

courts made their judgment. So, you know, what are what is most concerning to me this time around is that, you know, I think of a couple of months ahead, you have a court deciding the outcome of the election, and the Senate races on top of that, somehow you get the second wave within infections, and there's still no tangible movement on the next COVID relief package from the Congress because everyone is so sort of focused on what's

happening on the election outcome. And that's sort of a cocktail could be quite negative for the for the risky assets. Now that I wouldn't say that's our base case scenario, but the probability of that scenario has definitely gone up over the last month or so. Okay, So in terms of portfolios, fixed income, equity, how do you see it? What? What's what's your ideal portfolio right now? To be honest, it changes on a um you know, on a quite

frequent basis. It hasn't, but given so much stuff happening in the market, I think ideally it's it's a case by case study, as you can imagine, Carol. So there's no one size fits all. You have to look at your time horizon and what you're comfortable with in terms of drawdowns. What I would say is that the you know, the tailwind of this massive fiscal and monetary stimulus. And then I mentioned I think physical stimulus needs to again make a comeback, but it's just massive on a global scale.

And now that you have this optimism surrounding to the vaccine, I think that adds on to the to the positiveness that you know, equities represent. And in this kind of environment where everyone is going down to zero, you know, you want to be with long dated assets, and there's nothing more long dated than you know, quality equity names.

So hence one of the reasons why I feel equity still, you know, once we get over the next couple of months, because almost everything that is concerned right now to me seems to have a calendar date of expiry, you know, so you look at um you know the second way, for example, it is going to be are going to know in the next couple of that we are having Yeah, yeah, exactly. Well, sorry to U, Sorry to wrap you there, Deepac really appreciate your time. Deepat Pury is chief investment officer for

the America's at Jotscha Bank Wealth Management. Journing us on the phone from New York City, Takes a Bunch are listening to Bloomberg Business Week. Download the podcast on iTunes, Southcloud, Bloomberg dot Com, or wherever you get your podcasts, and of course you can always listen to our radio show at two pm Eastern on Bloomberg Radio, or watch us on YouTube by searching Bloomberg Global News