Bloomberg's Nicholson, Heilemann, on Trump Rhetoric (Audio)

slash muti van Eck access the opportunities. Stocks paired losses as the dollar fell, treasuries and gold are gaining after US employers added the fewest jobs in almost six years in made bolstering the case for the Fed to leave rates lower for longer. The SMP five index down four to one, a drop of two tenths of one percent, as stacked down twenty three points to seven, a drop off point five percent down. Industrials down twenty a drop of point one percent. Gold surging two and a half

percent to thirty ninety. The ounce thirty up thirty ninety, the ounce to twelve fifty crewed down one barrel on West Texas Intermedia crwede a drop of eight tenths of one percent. I'm Charlie Pellett. That's a Bloomberg business flash. You're listening to taking stock with Cale and pim Box on Bloomberg Radio. Republican candidate Donald Trump he emphasizes his business savvy as one reason to make him president. But is he business savvy about the US treasury market? Let's

find out more from Jonathan Nicholson. He is Capitol Hill budget reporter for Bloomberg b NA, joining us from Arlington, Virginia, the metro area Washington, d C, home to Bloomberg twelve and nine. I beg your pardon one and one oh five point seven h d F M h D two. Jonathan tell us what exactly is this Trump talk? And is Wall Street taking him seriously? Well? The excuse me? Um,

he talked about bondholders taking haircuts, discounts on bombs. He's talked about, you know, talked about a trade getting into retarritory trade uh A wars specifically about who cares if there's a who the hell cares if there's a trade war with China. Um. These are ordinary things that would make markets sort of spoopd uh for coming from a major part of the nominee. But so far, UM, really markets have shown very little reaction to this. So the debate is sort of come to why haven't they shown

that reaction yet? Well? Could it be simply that they know that trade wars are not conducted solely by presidents. Congress has to be involved to uh, And so they realize that a president can push for certain things, but they don't necessarily get them. That's right there. There's sort of three theories. UH. One is is that some people say that they just simply don't believe that he doesn't

believe what he's saying. That he's just started saying these things to get past the geop primary UH, to get to the right of the rest of what used to be the rest of the field. UM, and then he comes back to the general he'll say something much more, much more in line with mainstream thinking. The other aspect

is yes, uh. Some people, such as the Congressman Dave Ratt, point out that some of these things are some things he cannot do on his own that he would have to have Congressional approval for, and therefore Congress would act to sort of a moderating influence even if he did

believe some of these things. Uh. There's a third school of thought, um, which I think we may be borne out a little bit by Poles at this point, which is that simply people Wall Street at this point, you know, things still early, and that the odds of Trump being elected are still very much on the negative side. So it's not really a risk to be incorporating into into their into their trading decisions at this point. Well, let's bring another voice. He's not exactly Jonathan, but he is

a John. Uh into this conversation now, John Hylemans in studio. He is host of with all due respect on Bloomberg Television and radio every day at five o'clock Wall Street Time. So what do you make of this question? John Hyleman, You've been following campaigns like this for a long time. Wall Street seems to be taken and stride. Why I'm sorry,

what the precise question is? With the precise question, my friend is um, Donald Trump talks about trade wars, he talks about bonds in China, and you if people were taking seriously this is the question that Jonathan Nicholson has been raising Bloomberg b n A. So what gives Why do you think that's so? What would what do your

sources tell you? Well, I think there's um. You know that The thing with Trump, right is that I think, uh, there's no doubt that if we get closer and closer to election day and people increasingly believe that Donald Trump will be president number one and number two, the Donald Trump actually means many of the things he says on economic policy that there will be um consequences in the

financial markets. I think those two are two big contingencies at the moment still, right, One of which is people don't necessarily think that Trump is going to be the president. But more importantly, he everything he's been saying of late suggests that virtually everything he says on policy is I'm gonna use their variety of potential words here, right. One potential word would be um just a posture, Another would be a negotiating position. A third would be a fraud. Right.

I mean, depending on what your your predisposition is. Some people think that Trump. There's there's one school of thought, which is Trump is a hundred percent transactional. He said a bunch of things in the course of the Republican nomination fight in order to get nominated, but he doesn't really believe any of those things. He's just saying what it takes to get elected. Other people think he basically believes most of what he says, but he's willing to negotiate.

He's taken extreme positions that he understands he's going to have to back off from. UM. And other people believe he believes absolutely everything he says, he's a hundred percent sincere and that that would be scary if that were true on these questions of economic policy and trade, so for as as a good example. No one knows though at this point right and Trump seems to be trying to seed people's notion see the notion with people that that that many of the things he says are at

minimum highly negotiable UM, and potentially entirely negotiable. Uh. And there are other people, I think who have this the final thing that the people believe. And again Mitch McConnell is someone and others who says things like this where they say, look, um, it sort of matters with Donald Trump thinks. But in the end, UM, accepting matters of national security, the president is doesn't have pure executive authority to do much of anything. If he wanted to pass

a law, I'd have to go through Congress. They're all kinds of institutional restraints that would keep him from doing some of the more extreme things that he suggested. And so everyone just calmed down. The American system is designed to keep anyone from doing anything too radical if they get into the Oval office. John Hyman Europe well too. Based on your experience and based on covering this campaign, where do you fall in those three different areas of

Donald Trump investigation analysis? Don't know. I don't know the answer, I really don't. I mean, if you looked at the history Trump's history, UM, there are some issues where um. For instance, on social issues, Trump's position on abortion, for instance, where um, not that long ago he was not only pro choice, but in favor of things like partial birth abortion, which he thought were fine. Now he says he's pro life.

That seems to me to be the one that's most likely to be transparently um, a position that he's taken for purely political reasons on questions of foreign of his view of of of how the world economy works. He has been somewhat more cantilest for a long time, and his attacks on China, has attacks on Japan, his view of how foreign trade works, of how free trade hurts

American workers, etcetera. Those seem to be more consistently applied across a long a period of time in his life, and so they seem to me to be maybe closer to where his actual heart and head are. But again, because he is a very transactional person, he is a

dealmaker at heart. Right, it does even mean that even in those instances, those positions that he's put forward, like specific tariffs he wants to put on China, for instance, those may be really in the category of negotiating positions rather than things he will push for in their most absolute form. Uh. The primaries are coming up next week.

They're big ones, certainly in the size of the states and the potential number of delicates, even though the presumptive nominees for both parties look, you know, like they're pretty much almost solid in that position, John Right, So you know, we have these a bunch of primaries coming up on Tuesday. The two big ones are California New Jersey, which have

the biggest delegate halls. Obviously that there, Donald Trump is already um in in terms of the math has already gone over the magic number on the Republican side, and so he is officially kind of the presumptive nominee. That's not the case yet for Hillary Clinton. But no matter

what happens on Tuesday, um she will um have. Because of the way Democrats allocate their delegates, she will um uh again with certainty she will have between her pledge delegates and her commitments from super delegates, she will go over the Democratic magic number on Tuesday night. The big issue in the Democratic Party is not about the delegate halls.

It's about um bragging rights and the effect psychologically of what happens in California, particularly on Bernie Sanders, is he if he wins California, that may embolden him to continue fighting on even after the Primers event, and fighting on all the way to Philadelphia. The reason the Clinton campaign really wants to win California is now spending money there on the air, sending Bill Clinton there, sending Hillary Clinton there.

They want to win so that they can strengthen their claim that it's time for Bernie Sanders to stop and to try to put his efforts into unifying the party rather than continuing to fight I'm Jonathan Nicholson, our Capital Hill budget reporter for Bloomberg BNA. Still with us, and Jonathan want to put to you the issue of trade wars that John Hayman raised. Trump says that he would rewrite international trade agreements. Has that reverberated in financial markets? UM,

not so far. Uh. The interesting thing is if you kind of if you go and take a look at sort of like his written policy in terms of what he was put on his website, UM, in terms of what they're counting as policy paper type type material, UM, he actually talks more about designating China's a currency manipulator, UM, rather than more about tariffs. He'll talk about the tariffs UH and so on on the campaign trail and and

and be very loud about it. But actually when you look at what he's got to put on paper, he's much more talked about, uh, doing this designation as a currency manipulator, which is certainly sort of an ongoing debate here in Washington for some time. And he's only talked about retaliatory tariffs UM in light of if China didn't open up their markets. That does play a little bit into into UH. John's point about transactionality that they might say that his arc maybe worse than his bike in

some respect. Thank you very much, Jonathan Nicholson, Capitol Hill budget reporter for Bloomberg and b n A, or thanks to John Heilman, co host, with all due respect, weeknights five pm Bloomberg Television and Bloomberg nine and nine one in Washington, d C.