Trumpworld Gets a Red-Carpet Welcome in Brazil

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. It is the Bloomberg Big Take Today. It's also the new issue of Business Week magazine just out. It's about the Trump allies, such as Steve Bannon, bonding with Brazil's president and f y Tim. It's a playbook we've seen before. It certainly is. We've seen it from President Trump himself. And joining us now

is Joel Weberter, editor at Bloomberg Business Week. He joins us on the remote from Brooklyn. Also joining us as Andrew Rosetti, Latin American reporter for Bloomberg News. He joins us uh from Rio. Great to have both of you on with us. Hey, Joel, I want to start with you, Um, what is the playbook that Bolsonaro's following specifically from President Trump right now? And it's important because hey, there's an

election coming up. There's an election coming up, and and just like the Trump playbook, you just immediately cast as much doubt on that election as you can. And he's already saying it's rigged, and you know, we've got months to go until then. He's offered no actual evidence of that, um, but it is a tactic and one that you could probably draw a dotted line directly to Trump World, which, as Andrew's story goes into, is actually had really interesting

links um with Brazil. Uh. So this is not like, you know, Trump and and Bolsonaro having lunch together anything like that. It's more of like, all the machinery behind Trump and all the machinery behind Billsonnaro, those gears are are uh increasingly linked. So Andrew take us into how

the story came about. Well, Um, about two weeks ago there was a brazil version of SEPAK was held in the capital, Brazilia, and former Trunk spokesperson Jason Miller was among the speaker speakers there and leaving Brazil, he was actually detained in an airport um UH in links to an ongoing federal inquiry and the spread of fake news

and misinformation here. He didn't speak to us, but from there we started digging into these ties, and what we found is that there's a long close relationship between Steve Bannon and Um Bosonaro's oldest Bosono's son, Ed Warlow, a congressman, and that relationship goes back to about eighteen and since then, you know, we were told that they're um in pretty constant contact and a lot of the tactics we're seeing from uh Bothonaro father is you know, direct links to

what we've seen in the US, whether their motorcycle rallies modeled off for Sturgis UH and pouring doubt on voting machines. These are all echoes of things we've seen in the US, and what we're hearing is it comes right from Trump world. Well, it's fascinating the things that yeah, please don't yeah no, I was gonna say, like, one of the things that I think is significant to the story, and this is something that um Um we go into, is that you know,

the Trump world, um kind of exporting of that Trump is. Um, it's it's kind of been something that's been attempted before, right Andrew like and how did that pain out? Well? Yes, Bandon has been trying this new UH in Europe with his with his so called the movement some of these UH, you know, far right groups, anti immigration groups in Europe, and it wasn't that successful. But what Bannon told us is he sees UH Brazil's presidential election next year as

a precursor from US midterms. So he and many of other you know, other such things likes Miller, they're really throwing their weight behind this. They you know, they think both to Naro going it's likely going against his likely opponent, former president Lula. Um. You know, they see this really hearkened and reverberate in the US, just like Brexit, in

their opinion, did in the update of Trump. So they're really really if you launched banners and talk shows and podcasts, they're going on there just constantly, and they're from what we hear is in touch with not just edward Son but other advisors as well. When if I'm fascinating, the more I feel like there's a lot of stories that been that have been in Business Week that just kind of remind us that Bannon still out there behind the scenes,

to be quite honest, Andrew, but he's still doing his thing. Yeah, definitely, definitely, And it's you know, it's really interesting too, is that you know, they've completely given Biden in one way is the cold shoulder with all this. Well, even though that Biden has gone uh fine is in the White House, they continue to follow Trump and this has caused some a lot of tension um uh on the diplomatic fronts

um uh. President bolson was one of the last world leaders to recognize uh Biden's victory over Trump, and since then we've what we've seen is that you know, very cool relationship between the two countries and this you know, Brazil is one of the one of the world's, the largest country in South America and I believe that sixth world, sixth most populous countries. So for the habit uh fixation

on Trump could cost Brazil during the town the line. Well, so, so give us the context for everything that's happening domestically right now ahead of the election and how this plays into the challenge that Bolsonaro is facing well, right now, President Bolsonos polombers at Aretta record low, inflation is rising, hunger is spreading, um, you know, as the economy is reopening,

but at the very uneven UH rebound here UM. And you know, Brazilians by and large are very very UM frustrated it and upset by Um Bolsonaro really, you know, doubting the coronavirus. He um had it himself. He's called

it a little flu last year. And right now, for those who haven't been watching the headlines, he and his and his cabinet were just in the US and his health minister just came down with COVID and UM, as did his son on the trip of the U n g A. So Brazilians are really frustrated with his antics in a lot of ways. And what Um Bolsonaro has done has gone full Trump. You know, he continues to

cast out on on COVID. He continues to call his critics, you know, UM, of spreaders of fake news and and saying that they're going to trying to hijack voting machines and steal the election next year. What people fear is

that he's really channeling Trump. And you know, for a January six, assault on the capitol situation, and he's really laying the groundwork to um, you know, contest the election of disregard the results next year if he uses speaking of that election, UM, Lula basically one of the most popular politicians in Brazilian history, and so what what are the meeting of those two politicians? What? What? What? What

can we expect? What's that going to look like? Well, right now, you know, poll very early polls are showing Lula cruising to a big, big victory right now. In Brazil, there is usually a it's a two round. Uh, it's a two round process. So if there's not a absolute majority in the first, it would go to his second round. But right now some polls suggest that Lula up by

as much as twenty points. And it's interesting this parallel to the US, because Lula, you know, not only being so popular, but he's really taken a step back and say like Biden did in the US and saying, you know, I am I'm taking the pandemic seriously. And this has been the thorn in Bolsonaro's side, uh, for you know, much of these recent months is that he can't shake the image that COVID has done um in his country,

and many people see that. As this fall, Brazil has just passed six hundred thousand cortified desk and so people are not willing to forget so soon. Well, it's fascinating to make the comparison between the United States Trump and what's going on in Brazil. Andrew, thank you so much. Andrew Rossotti, Uh, Latin American reporter on the phone in Rio, along with Chill Weber, Editor Bloomberg business Week. Check out

the new issue of Business Week. It is the sooner than you think issue on news stands, online at business Week dot dot com and of course on the Bloomberg terminal. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. All right, what a week. When it comes to again Andy Cohen drinking game. Every time we said China, we'd all be on the floor. Oh my god, we'll be

on the floor. Uh. Definitely control holding the news flow in a big way when it comes to markets, many industry. The latest we know, Tim on our radar once again, it's all about crypto. We talked about this with Katie and let's talk about it. With a really great voice. Who joins us once again talking all things China. Guy with so much experience in the country, Dexter tiff Roberts.

He's Mansfield Fellow at the University of Montana, also Senior Fellow at the Atlantic Council's AGIA Security Initiative, and our former colleague at Bloomberg Business Week. He was China bureau chief for years and the author of the myth of Chinese Capitalism, The Worker of the Factory and the Future of the World, that came out in March of He joins us once again on the phone from Montana. Dexter, how do we make sense of this week? Well, as

you say, it's been it's been quite a week. Uh, and we've seen it in the markets around the world. I think the bigger picture is China, and uh it's you know, it's leader she Jane Preeny is continuing with this effort to uh put politics back into the economy. There's a massive the Tory push throughout the tech sector,

the cryptocurrency, the latest ban on cryptocurrency. It seems like they've been numerous announcements over the last couple of years from China, where they've banned it and banned it again. Is also saying, you know, this industry crypto, which fluants its freedom from regulation, has no place in China. And then of course we have ever Grand And that's everything

about trying to deleverage the economy. But I think at the same time also send a message to the Chinese people that uh, the excessive wealth uh in some cases achieved through questionable means, uh, which I think is is rife throughout the real estate sector is no longer tolerated.

So I wonder if you, um, we're on the ground in China right now, over in Asia and you were, you know, putting your team and you're saying, Okay, here's the stories I want to tell, or we need to be telling when it comes to China, when it comes to ever Grand, and what what what? What are the questions that we need to be asking to be really smart, especially as investors. Former US Secretary of the Treasury Larry Summers telling our David Weston earlier, you know that people

should be on guard here. I don't think any of us have full transparency of what is going on in China. And that's the worry. So what are the questions, what are the things that we need to be probing to really understand stuff? Well, I think in terms of looking at future targets from the Chinese government in different industries and businesses, anything that really touches on the livelihood of

the Chinese people. Uh, they went after private education. Um, they've they've gone after the big tech platforms and now now real estate as well. All these things really matter to the Chinese people. So there we've heard about again and again about this new common Prosperity campaign. This is about trying to reduce wealth inequality and uh. And it's the same time have a private sector that is much more under the under the thumb of the government and

the Communist Party. So I think an investor needs to look at what might comes next, what might come next? What what matters to the Chinese people? Um? Well, what does in your view? Because they've covered a lot. Yeah, Well, I think obviously private health care, we've already seen signs of that. That's another big one. Um and UM I think in terms of you know, we'll see more on Uh. The other part of the coin is anywhere where you

see real extremes of wealth. You see business people making a lot of money, perhaps in industries that are destabilizing to the economy, like like real estate, which has built up so much leverage. Those are all going to be targets going forward. I've asked you this before, Tiff, but I want to ask you again, given that it's been a couple of months, what's the end game for Hijin Ping. I think that Jingping has made it abundantly clear over the last six months that he's actually willing to Uh.

First of all, he wants politics and control. He wants the politics in command economy. Uh. He he wants he sees the private sector as continuing to be important in creating jobs and vibrancy and innovation. But he wants it all under the thumb of the party and the government.

So I think the belief is that amongst the top leadership is that they can actually continue to carry out these crackdowns, uh, pull some of the excesses out of the economy, like the excess of leverage, get rid of some of the real extremes of wealth, and they can continue to grow. I'm not at all sure that they can pull that off. So, so he wants capitalism but

not too much capitalism. And you think it's fair to say that he thinks that some of these businesses and these people involved with these businesses became just simply too powerful. I think that's exactly what he thinks, um. And he's planning to again have a private sector that is much more answerable to the party. He wants to see, uh, you know, lesser extremes of wealth and he's going to try to pull that off, and that means we're gonna

see more crackdowns going forward. Hey, tif though, how do you reconcile what president is doing right now and wanting more industries under the thumb of the Chinese government with also his ambitious agenda being leaders on you know in the high tech world, really building out industries no longer being you know, the manufacturer to the world, which they are increasingly not. But how how can they do that?

Can they do both? Well? I think there's actually a real level of hubrists we're seeing and the sense that they can do both. They can become more self reliant, they can close off their economy to some degree to the rest of the world. You know, they've basically blocked all traveling and out of China and probably will continue until at least late next year when they have a party Congress um and maybe a bit more difficult for you know, companies and institutions around the world to work

with China. I think they have this idea that they can it. They can go it alone. They've reached a level of power and an economy of a certain size. I'm afraid that again, Hubris here, I don't think that it really is doable. Just in the last thirty seconds that we have. What are you watching for next? What's the next shoe to drop? Again? I I just mentioned the healthcare industry, for the private healthcare industry. China refers to three big mountains that contribute to inequality in the

wealth gap, housing, education, and healthcare. They've hit housing, They've hit education. I think healthcare is up map. It's really fascinating because in many ways that's the same three here in the United States, and the US is also looking to tackle it, but obviously, uh by different mode, not to mention, you know, quote unquote raining technology exactly exactly. So it's interesting to see the different um ways of

doing so. Tif, you are the best, Tif roberts uh he is man Mansfield Fellow at the University of Montana, author former Bloomberg BusinessWeek trying to be or achieved. His book The Myths of Chinese Capitalism, really plays into so much of what we're seeing right now. Well, the pandemic has up ended tim We know how we work, where we work, how bosses and workers think about the process. Sometimes process was overwhelming. Boundaries between work and life are unclear.

Sometimes the ability to just plow through without office distractions, not having to commute and so on created some clarity. So I'm guess that our next guest us something to say. It's Juliette Fund, founder and CEO of the Juliette Fund Group, and she joined us on the phone from Los Angeles. Julian's new Juliet's new book is called A Minute to Think, Reclaim creativity, conquer business, and do your best work. Juliet,

thanks so much for joining us on the show. What was it about the pandemic and everything that we've been through collectively? Um, and how it's contributed that that that that prompted you to write this? Well, I wrote the book before the pandemic, but the conditions of the pandemic have only amplified things that have been around and work

for for decades. I've been watching people for many, many years sit in tolerated misery of the day, you know, just trying to get through an earnest day's work and finding that it becomes the hardest part of their day. Unnecessary work, emails, meeting deck reports, a lack of connecting with meaning. These things have been around for a while before the pandemic, but the pandemic has certainly amplified them well.

And it's interesting, UM, I was going to ask you too about your company and what you were doing pre pandemic. TuS litle bit more about UM your consultancy and training firm, and again going back to kind of pre pandemic and maybe how you're thinking has changed a little bit. Sure, we've been doing this work for about ten years, and I did it ten years before that as a speaker and consultant independently. We go into companies, we help them to reduce wasteful work and basically find more time to

be thoughtful, strategic, connected. And the pandemic has been such a fascinating amplification of the worst of work and so certain ways, but also has given us a little tiny taste of what's possible with giving people more liberty, that when they do have flexibility and liberty, that there are ways that work can feel different in ways that we

haven't touched in a really, really long time. It's a it's a preview of what's possible if we use this window of opportunity to redesign the way works feel well. I want to follow up on that, Tim, and I've had a lot of conversations with heads of companies, well known companies, publicly traded companies, um. In fact, we're just talking about Franco Suitis of Cisco Systems yesterday, who is an executive EP chief People Policy, UH and Purpose officer,

and talking about hybrid work in particular. Do you think that seeing how productive people can be and maybe happier in terms of having some flexibility and how they work, that this idea of kind of being more liberal and opening up how we think about work work, does it stay you with us? Because there's a lot of executives who've got some pretty expensive office space who say I want you back in the office. Sure that we have to look at both populations of the pandemic evenly and fairly.

There has been a population that's tasted a little bit of liberty, and they're starting to realize that work can feel different with the freedom that they've been given. But there's also an enormous percentage of people for whom work has gotten worse in the sense that they've lost any semblance of boundaries that they had before. They used to have a little bit of separation maybe between work and life, and now it's just shuffled like a deck of cards,

and there is no separation. They don't know how to turn on or off. The zoom maholic zoom off on all day long has literally expanded to seven and to seven pm. So it's unsustainable and we have to dress both sides of that. Okay, Here in New York on Wall Street, it's you know, it's just twenty minutes before five roughly. What's one tip you can give us to to help us go into the weekend and and sort of enter the and stay unplugged. Sure, entering the weekend, we want to, first of all, have a way to

close the door on work. It's very very difficult. One technique is to take all of your work related things and make them in put them inside some sort of physical compartment of desk a drawer addresser so that you can't visually keep seeing them through the time when you're supposed to be disconnected. Another incredibly simple technique, although it sounds a little lighthearted, is if you just say out loud in front of the people that you love. I

call this trapping yourself and a promise. You say, well, I'm done for the weekend. No more work for me this weekend. And once you say out loud that you've made a commitment that there will be a boundary between work and leisure, it's really hard to go sneak that sip of the laptop. You can do this even alone. If you live alone, you can have a boundary buddy and just text each other and say work is over, um, really wonderful, hope we can get you back in the

future because some really great tip. And you're someone who works with Spotify, Nike, Costco, Cisco, the Food, Cisco, ESPN, so many companies. Juliet Fund founder and CEO of Julie Juliet Fund Group. Her book is a minute to think, reclaim creativity, conquer business, business and do your best work. Rolo Macro Journal. Yeah but you let me drive no, no, no's go dru home please, I'll do the right drivels me. I want to drive, just drive. The questions drying. This

is the drive to the globe. Give me thanks, We'll drive us to dawn. On Bloomberg Radio, all right, you just got about ten minutes left in today's trading session. We are near our highs of the session. On this Friday, what was been quite a week. Timmy and I were reaving some fun about like it's like Monday never happened. It's pretty wild to see that. I mean, if we take a look at where stocks are for the week, we're looking like we're gonna end how the higher by

six cents of one percent? A little bit of a game there. All right, let's get to it. Time to the dot, Time for the drive to the clothes. Chad Garcia is with s VP, Lead portfolio manager at Maria Funds, co portfolio manager of the Ave Maria Growth Fund. That fund, by the way up year today, putting it in the fort compared with other funds in the category. That's according to our data up the past one year. He joins us on the phone from Florida. Chat, how are you.

I'm doing great, thanks for having me on. Hey, this market environment, how would you describe it? Well, this week has been pretty volatile but mostly flat. Right, isn't that crazy? It is? It is. Although it is nice to be up at the end of the week given or restarted, it's always nice to be up on a Friday. Right. Does that tell you, though, that Chad, that you know buying the dip was the right move here? I was

buying the dip in in my portfolios. It was enough of the dip for you to buy because I think that's what I did well. I think I think that's the question that a lot of people had, is is this a precursor or something bigger that's going to come? Well, I mean the the what we were buying was, I think was a little bit more effective than than internal economy, and that was enough to make me buy um with respect is as a precursor of something more to come.

I think that the earnings it is strong strongly. It looks like the coronaviruses is dissipating in the hospital hospitalizations for the US is about eighty thousand, was just down from the recent peak of a hundred thousands. So I think that seeing the economy in the year strong and to the point where they're gonna they're gonna announce the taper in November and probably start that in December. Hey, let's go back to UM. I love talking about people

or with people who are managing funds. You mentioned you were buying on some of the declines that we saw. Obviously there were probably some more interesting entry points. What in particular were you buying. UM We don't disclose our our buises so after they've been publicly disclosed, but UM, but I can tell you some some interesting stocks that

we're definitely looking at. UM. Well, the biggest so you mentioned that the Nickel pultfolio managed the Growth Fund, also um pultfolio manager of the Focus Fund, which is in the top quartile UM year to date. In our largest position is e Dreams, which is an online travel agency in Europe, and this is interesting for a couple of reasons.

Number one is that they only focused on leisure travel, and leisure travel is going to rebound them much quicker than the overall travel market because business is going to take a little bit to recover, and we've already seen that They've they've announced their August bookings and the August bookings were up over the twenty eight pre COVID number. And so the consumers, whether it's in the US or um Europe, they want to they want to travel, and

so that's that's exciting. And then the other exciting part of this business is that they're switching from a transaction model to a subscriber model where the subscribers get discounts on trips that they book using them and they pay a fee up front for that privilege. And currently there A subscribers are up to a million and a half subscribers, which is exciting for them. It's been on quite a run. It's up about so far this year. But you think

there's more opportunity, more moved to the upside. I think that at one and a half million subscribers, they're at the subscribers are paying on sixty years a year. Just the cash lew stream from those subscribers alone, I think values this said ten to twenty euros is share and get the rest of the business were free. And the A d R S in the U S trade or the ticker E D d r F just in case anybody that the rs in the US aren't that liquid, so to be the one that you'd probably want to

buy in the primary market. Good to chat another stock our producers telling us that you have as a pick. Hiko has about sixteen billion dollars in market cap airplane parts. Take us into it, Yeah, Hiko. Hiko is also also related to travel. Like the Dreams, this one's gonna be a little slower to recover given that they're exupposed to the travel industry overall. But Hiko has two business is the largest is an aftermarket parts business for commercial planes.

And what they do is they put themselves in a duopoly position with the original equipment manufacturers. They charge about thirty less than the original equipment manufacturers and they capture about a third of the market and the secret sauces the buility. The ability to sell parts for airplanes is governed by the f A. A has to approve each

part that goes on an airplane. In Hike those advantages that they can get about five parts through the f A approval process per year, which is multiple higher than

anybody else. And so what they do is they allow the airlines an alternatives part supplier to to the original equipment manufacturers and they save the airline money so while Hiko is going to be a little slower to recover the kneed rooms because it's exposed to the overall travel market, it should do decently well because you know, in this challenging environment, the airlines are going to be looking to see this money anyway they can. Hey, just quickly, just

got about thirty seconds left. A p I Group is another one, an industrial maintenance company. It's up about this year four point seven billion dollar market quacked cap. Excuse me, just quickly your take on that, and why do you think it's a buy? Well, it's it's about an eight percent free cash real yielded for a company that has

an organic growth rate. This company has grown organically about seven percent per year for the for the decade prior to COVID, and then on top of that organic growth, they are able to roll up Momo pop small businesses paying between four UM four to six times Evada, which for further accelerates set that growth. They just bought Chub Fire and Safety, which is a large business that was an orphaned company out of Carrier, a pullet company that

gets them into multiple markets around the world. UM black Stone Group was also bids that business, but decided to back a PI S bid by investing an API through convertible preferred. I think a Blaxton is gonna open up their portfolio of real estate holdings and a lot well good to know, and unfortunately've got a round ched Garcia over at a Maria Funds joining us on the phone.

Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. H