Even McConnell Is Happy to See Trump Impeached: Timothy O'Brien

It begins with a quotation of Frank Sinatra's My Way, and it continues on and essentially it says that the president barely seems to notice that the fishers he's opened are now swallowing him. Even Mitch McConnell happy to see the president impeached. Tim, thanks for joining. You could go so far as to say, especially Mitch McConnell is happy to see the president impeached because now he gets to get rid of President Trump and all the bad things

that are associated with him. But a lot of the work that he wanted to see don got done during this last four years. Well, Vonny, the first thing I want to say is that I'm well aware of your own prodigious musical Ellen, I'm grateful that you gave a ad tip to Frank Sinatra um in this one on you know, on McConnell, I think this is a very interesting moment because they did get a lot of practical conservative policy out of Trump that they that um Republicans wanted,

a tax cut, deregulation in a more conservative court. I think the question that's always hung over that processes was getting those things worth all of the other trade offs, the debased public dialogue, breaching the rule of law, and on and on and on, culminating in in an insurrection at the Capitol last week. And I think, you know, it's certainly a safetime for McConnell. See he's rethinking those things because he already got them trumps in his twilight

days as president. Uh. Nonetheless, I think what you're seeing is this existential debate within the Republican Party about what does the party want to be and how should it represent conservatism and should it be classic um you know, uh, fiscal uh hawkishness, foreign policy hawkishness UM, or be a more of the cultural um uh moment that involves a lot of cultural division, and the party's really split between it's far right and what I would call them McConnell wing.

And I think McConnell is now saying I wanted to be otherwise, and if that comes at the expense of Donald Trump's future, so be it. So, Tim, that's a real question. I think, as you mentioned, for a lot of Republican semi four million people voted for Trump, presumably a sizeable portion of those semi four million people were represented by the people that did, in fact march on

the Capitol UH last week. Is that a wing of the party that is just lost to that, I guess the core Republican Party, or is that now the core Republican Party? Well, I think first and foremost, you know, I think when we when we talk about huge blocks of voters want to acts who a Republican or who

are Democrat. If you go back to every UM UH presidential election through the nine twenties, most of them, except for one of Roosevelt's elections maybe two and Ronald Reagan in most of them were decided by very narrow margins. It was rare to have the country tilt overwhelmingly Republican overwhelmingly Democrat. This last one UM was relatively narrow, but that's that's not out of keeping with where we've been. And I think the reality is that most Republicans and

most Democrats vote by default. And I think we get into very dangerous area when we start to say, do do extreme members of the Republican Party actually represent the party itself? And does that mean the party has to accommodate them permanently? And and I would say, and I think that again, that's what I think that the party is trying to get armed around. You know, they let essentially with Trump the monster out of the cave, the monster turned around and ate the children. And now they've

got to figure out what to do. And and I think the impeachment is part of that. I think where Mitch McConnell and and over, I think at least two dozen Republicans who were going to vote for impeachment are

they're saying, no, it's time for a change. Well, And in fact, Joshua Green did a great thing, and he went back through the voting records of those that were identified storming the Capitol Hill the other day, as many as he could find, as many as he could get access to, and found that those who stormed the Capital have very erratic voting records, and some of them, you know, are not even registered Republican. So, Tim, what happens to the likes of Josh Holly, the likes of Ted Cruz. Uh,

you know, that's to be seen. I think it's it's very hard to find ways to punish senators outside of the voting booth. And and um, I think McConnell is is going to flex his muscles around here that might involve stripping them of committee assignments. Um. Their hometown newspapers have called on them to resign. Ron Johnson's as well. Um. I think that the dispiriting and damaging thing about Cruise and Holly in particulars they're both trained lawyers. Holly went

to Yale, Crews went to Harvard. Holly was the attorney general of Missouri. These are men who have been trained to respect the law and the rule of law, and they were out fomenting an insurrection. Um uh it. You know, it remains to be seen what happens to them, But I suspect, at least until they're up for re election again, they may just skate along. Tim. I'm so glad we're chatting with you today because not just about the impeachment,

but another piece of news. I know you're gonna have an interesting take on New York City pulling contracts with the Trump organization for you know, the ice rinks and the golf courses. What do you think the reaction is by the President and by the Trump organization here because these are near and dear to their hearts. I would think that that's a great question, Paul. It's not only near and dear to their hearts because it's in New York, it's also real money, and and real money is near

and dear to his heart. He Uh, those properties in New York generated about seventeen million dollars a year in revenue. I suspect that's around five or so of the Trump organization's pre pandemic revenue. But a lot of the you know, the meat in the Trump Organization's revenue stream came from um urban commercial and residential real estate. That's all been very stressed. Whereas those city payments are steady cash flow.

They can rely on them. And Trump is certainly in the short term possibly squeezed for funds because he has um over a billion dollars in debt on a portfolio that's worth in the neighborhood of two point seven to three billion dollars pre pandemic. But he's got four hundred billion coming to relatively soon, so he's gonna need cash.

So not having access to cash in these New York properties is a problem, uh, monetary, financially, but it's also you know, it's a problem um almost spiritually emblematically, because Donald Trump, for as much as he disparages New York, prides himself on being a New Yorker, and this is yet another rejection of him by New York. Tim, we're really out of time. But you say at the end that as he self emolates, you know, he will move forward with few regrets, but with plenty of plans for payback.

How do you envision that? To quote Joe Kennedy, don't get mad get even I think Donald Trump lives by that mantra. Hey, Tim, thanks so much for joining us. It's gonna be interesting to see the post White House time for President Trump. Tim O'Briant, senior columnists for Bloomberg Opinion,

joining us from Lovely Montclair, New Jersey. We appreciate him taking the time, and Vannie will be very interesting not only the next uh, you know, several days as it relates to the impeachment, but also again how President Trump, um, you know, what his post administration, post official office time will look like. Where will he be, what will he do? Phrase likely to get mad? Yeah, that's right, we'll see.

We'll certainly follow up on that. This is Bloomberg. Well, a lot of investors last week, as they looked on in horror at the insurrection that took place at the Capitol on Wednesday, were pleasantly surprised, shocked. I'm not sure which way to really call it about how the market can trade up in the face of such uncertainty. Uh in Washington, d c our next guest, I've never received lots of phone calls from her clients asking the same.

Let's check in with Christina Hooper, Chief Global Market Strategies for Investco. They have one point three five trillion dollars assets under management. Christina, thanks so much for joining us again. You know, at this time of year, we would typically just say, hey, we'd love to get your year head view. And while we certainly want to get that, we want to get that in the context of what happened last week. Did you have to change your outlook at all based

upon what we saw in Washington last week. No, we didn't, because markets looked through what happened. I mean, it was really amazing that stocks barely flinched because they're looking ahead to a lot more certainty than we had at any time during up until really the end of the year, and that is that we are going to have broad distribution of effective vaccines and that is going to be a game changer for the economy. In also, of course,

the market doesn't month this to stop. The market wants us to keep going, and there are enough things underpinning it from you know, FED moves to as you say, the Biden administration potentially helping the market. But at some point a democratic administration is not so good for stocks, right, Christina, When do we see that, Well, that's when we start hearing the Biden administration talking about raising taxes and seeing that there's enough support in the House and in particular

the Senate. Keep in mind that we did, of course see last week at the facto majority for Democrats in the Senate, but it is razor sin and that suggests that it is unlikely that any kind of very significant tax hikes would get past UM. Maybe we could see some small increases, particularly in the corporate tax, but we're

not going back to pre Trump levels in terms of taxes. So, Christina, how about from the regulatory perspective, some are concerned that under a democratic administration and one that has albeit a razor thin margin in both the House and the Senate, that regulatory risk is something that investors may have to deal with more going forward. How do you view that? Definitely, regulatory risk is an issue for investors. There's no two ways about it. Um, But it's all about UM. What

is the more important factors driving stocks higher and right now? Out? The potential for more fiscal stimulus, including the potential for UM a pretty significant infrastructure package, outweighs the regulatory risk. How many people in the service sector can we put to work in construction? Christina? And I'm not being funny. I'm suppose I'm trying to say, we can have all the construction and all the infrastructure projects in the world, but we still need the service sector to be able

to get back to work. When do you see that happening? I think once we had that broad distribution of the vaccine. Keep in mind that this is such a different crisis than the global financial crisis, that recovery was anemic and was for much of its time a jobless recovery. I believe strongly that this is going to be a very different kind of recovery, that it is going to be more robust and more inclusive, so that when we do have that broad distribution of vaccines, were likely to see

the service sector bounce back very very strongly. But I do want to push you ll not because what about small business. I mean a lot of service sector employees are employed by small restaurants and by you know, bars and other you know, cafeterias and things like that. Will they just be able to open doors again? Surely all their capital is gone. Well, certainly some have fallen victim. But having said that, we do reduce the odds um and we do reduce the level of economic scarring by

offering more fiscal stimulus. Now, damage was certainly done because we went for months without any additional fiscal stimulus, but we did get a relatively small package at the end of the year, and we're likely to get more. So um, I do believe that that, yes, there has been damage done to the services sector. But there are some restaurants and bars that will be able to reopen and there will be new ones coming uh, and so I do

expect a very significant bounce back in services. Christina. On the equity side, you know, how are you thinking about UM this rotation trade that's been working so well in the markets over the last four or five months, UM folks kind of getting into the more cyclical names, maybe some small cat names, anticipating kind of what I think you're looking for, which is a strong rebound in the economy beginning, you know, maybe the second third quarter of

this year. How do you think about that rotation trade. I think that continues. I mean, we certainly have to expect that there are going to be difficult days in the first quarter, that we are going to get really negative news slow We're going to see statistics around the virus that are very very concerning UM. But I do believe that the stock market will look through that and

look to that more robust economic recovery. So I think that the the rotation remains, but that doesn't mean we want to abandon all of the more secular growth defensive names. I do believe tech has legs even as we see that strong rotation continued towards the cyclicals and small cap What concerns you Christina? Right now? It doesn't seem like there's that much out there that does well. Certainly there are risks as we head into one. I think the

first risk is around the virus and combating that. UM. We've already seen variants of COVID nineteen, including one where it's questionable to South African variant questionable whether or not current vaccines can protect against it. If we find that the current vaccines are unable to protect against it, that is a real, real problem. UM. I think that's a low probability event, but it is a very significant risk.

The other big risk, which is also I think lower probability, is that we see monetary accommodation pull away too quickly. And I think certainly what we've heard from recently from beneficials suggest that's not going to happen. But those are two very significant risks. So how do you expect the Do you expect the FED to continue with that messaging of moderate rates for the first table future? I do.

I don't think the FED will make the mistake of starting to talk about withdrawing accommodation, even if we do get more fiscal stimulus, even if we do see signs of inflation which have yet to really show. All right, Christina, thank you very much. That is Christina Hooper of Investco. Always absolutely thrilled to have your thoughts, and of course, so the market just continues on the pace we are

hearing from Reuters. I do want to mention Paul, an aide to Reuter, is saying that the son of Gop is thinking about starting an impeachment trial Friday, that is two days from now. Yeah, that's the big news. The real question is timing for the Senate. We may be getting a little bit of not here. Yeah, exactly, much much sooner than we anticipated. Obviously, a lot of today's market action will be lead my Intel, which is the

best performer in the SMPI. But there are other stocks hired to Dave Wilson, including some of the pharmaceuticals like Eli, Lily and Regeneral with with all the developments of the COVID nineteen front and other types of drugs where you've really seen uh drug maker's benefit at General Motors is another example. And remember those shares hit a record yesterday.

Uh since the company returned to the public markets. In all this coming with enthusiasm for GM's electric vehicles, that clearly Intel is sort of the class of the field. You might say in today's trading. You know, it's funny, I was singing back to yesterday. We were talking about Las Vegas Sands and the death of their founder, Shell Sheldon Adelson, and you know what might happen because of that, and you didn't really see the stock move in response.

Today it's a much more obvious example. You got CEO Bob Swan leaving the chip maker after just two years of running the company and on the heels of a push by activist investor Dan Lowe for some kind of change, possible break up ASTs say, oh, other strategic options. So you've got sort of a cause and effect arguably that people are seeing in that move, and you know the

potential for things to happen down the line. And by the way, we should point out it's not just Intel moving because uh, you know, the chip maker is bringing in vm Ware's had Pat Gelsinger to take over from Swan, and vm Ware shares them down five point three percent as we speak, so you know it's being seen as a loss for vm Ware and a win for Intel this management change. Let's bring in an A. Rock Ran, a senior technology analyst for Bloomberg Intelligence. He's been covering

the tech space for decades. A Rod, thanks so much for joining us here. What does it mean for a tech giant like Intel to bring in, uh, someone like Pat Gelsinger from vm ware? What's it mean for Intel? So? I think it's going to be any interesting move, largely big because perhaps one of the strongest CEOs in the software world. You know, in our opinion right after you know, Microsoft CEO, I would rank Path as the number two

in the software land. And frankly, you know, the whole world is moving towards more software define defined work no matter where it is, and Intel really needs some kind of a push behind them to you know, get their act together. So so I think it's a very sharp move for Intel and obviously a big loss for vm There who will vm We're fine to take over. So they've already announced their CFO as the internim CEO. UM. There are a few candidates. There is one particular candidate

internally that I I really admire. He's their chief operating officer for customer operations called Sanja putin. UM. I think he could be one person that that could take over the real the helm. But you know, it's a it's a software company with a number of assets. UM. It could be somebody from outside, but you know, my my money would be on Sanjai. It's is this signify on a rug A push or a bigger push by Intel into the cloud? Do they feel like they have relating

lag behind some of the technology peers. I think, Paul, it's more than that. It's just a matter of execution. It's a matter of getting their manufacturing problem fixed, getting their roadmap fixed. Um. And you know, if I go back and think about vm Ware just about four or five years ago, you know, it was in a similar spot that it was always thought of as a company with only on premise products and not doing well. And then packed with his genius, you know, came up with

a couple of acquisitions that were very sharp. Then he um, you know, did a deal with Amazon Web Services, just a deal to move some of their workloads over to Amazon, and boyd what it did to the stock from that point onwards. The stock hasn't looked back. And that's been about five years. So I mean, this guy knows what he's doing when it comes to strategic partnerships as well

as you know, relevant acquisitions. Deb Swan steer the company pretty well until now it doesn't look like see I mean, inters been interest and really poorly over the last few years. I mean, if you were to take away to push the seared or the stock price improvement in the past

few days, it's not performed well. And you know, evaluation wise also it's it's it's it's fairly poor and it seems am d is you know, gaining share from them, So you know they really need to do something um, you know, quickly and and and I would say more aggressively to turn the things around. So, Dave, this is a big win for Dan Loeb and for you know,

activist investors perhaps in general. What are we seeing in the world of activism, um, in the marketplace here, given what's happened uncertainly in the markets, Well, it's kind of been a constant over the last few years for for activists to step in and push for change. And it will be interesting to see how much Dan Lobe actually wins because you know, when he came out last month with this letter to Intel's chairman. He said that his

hedge fund Third Point had significant steak. We don't know how big the steak is yet, and we may not know until mid February, when you know, institutional investors have to report on their whole things as of the end of December, so you know, that will be sort of another piece of the puzzle. How does Bob and his uh, you know, shareholders in essence benefit from what's happening at Intel, and you know, will they be making moves with the

shares now that they're running up today? And it's interesting how he phrased it in his tweet. He said Swan as a contact and did the right thing for old steak over orders, stepping aside for Gil Singer, almost taking a little bit of credit. But it's not quite clear of what was happening behind the scenes. That will take a lot of investigation. Really, a Swan named CEO back in January of twenty nineteen. He had served as interim

CEO for about six months before that. But certainly, as you both said, Intel shares are up more than nine percent today, VM, we're down about five. Well. One of the many things on President elect Biden's to do list is likely the challenge of repairing the relationship between the U S and many of its allies around the world.

To get a sense of how that might be achieved, we welcome Bill Rhodes, President and CEO of William R. Rhodes Global Advisors, former chairman at City Bank, and Bill is also the author of Banker to the World, Leadership Lessons from the front Lines of Global Finance. Bill, thanks so much for joining us here and again, the to do list for President elect Biden must be, uh, you know, quite long. I'm wondering as it relates to China in particular,

how do you think President LEC. Biden and his administration should approach China given what we've experienced over the last four years. Great to be on with you, Paul and Vanni. I think he puts a real priority on working with the Chinese, but in a very realistic way. He's talking about appointing a czar for Asia UH, and I think he recognizes that there's no quick fix to our trade situation and to some of the other problems Taiwan UH, the problems of Chinese penetration in the South China see

A set could run on through them. UH, And of course the deficit in trade is a big problem. I think that he's going to move very cautiously. I don't think he's going to move rapidly to take off the three and seventy billion dollars of tariffs we've put on the Chinese. But I think he's willing to dialogue with him on things like climate change and perhaps some other issues. But he's going to move very cautiously on on China. Bill. I have to ask you about your reaction to events

last week. Of course, you would have been around, you know, during so many previous administrations, growing right back as far as Nixon Ford even through the Vietnam War. What did you make of what you saw in Capitol Hill last week? Well, first of all, I've been inundated with calls from around the world asking me that same question, Monny, because people

are really horrified with what happened there. Because although we've had our problems over the last few years, the great democracies in Europe and elsewhere, UH, places like Australia New Zealand always looked to us as a beacon of democracy, UH, in their in their way of doing business, and they

couldn't believe what happened on Capitol Hill. Now I've been through, as you point out, Vietnam Watergate, and the United States UH had a real problem UH internally with its relationships and also how the view the view of the world was towards us. But we managed to work our way out, because we always do. I think we will again here what UH. It will not be easy or quick, but I think that Joe Biden will want to play the role at Jerry Ford did in trying to bring the

country back together again. I think this whole process we're going through now of impeachment will probably go right through the Senate because my own feeling. I haven't spoken to him, but I think Mitch McConnell will not oppose it. He will go along with it because he's very concerned about the future of the Republican Party UH and what's happened with Trump hijacking it. So we are in for a

difficult period of time. But I think Biden, with his relationships with the Republicans, including Mitch McConnell and others, I think he's probably the right person to be in the job at this time to heal us. Just as Jerry Ford was at the time of Watergate in Vietnam. So, Bill, there are a lot of obviously issues here domestically in terms of wounds that need to be healed that they became obviously those wounds became just most apparent last week.

But there's also issues with our global allies. I mean, presumably president elected Biden will attempt to re engage with some of our core allies in Europe in Asia. To what extent do you think they're going to welcome us back with open arms given the last four years? Well, Europe has its own problems. You've seen Brexit, and there are differences right within the EU and the euro Zone. So I think they will welcome us in the sense of wanting to cooperate, but the agenda has changed somewhat.

So I think what you have with with Biden as he has as his secretary when he's not been approved yet but is UH candidate for Secretary of State, Tony B. Lincoln is very pro European and believes in the Atlantic Alliance and actually was educated part of his life UH in Europe, and he always demonstrated in his you know, his previous role in the State Department and as an assistant to to then plays President Biden his interest in in doing that, and I think Biden also believes very

much in the Atlantic Alliance. But the world is shifted and towards Asia, and I think we need to watch what the policies are going to be towards Asia, particularly on trade. UH. I would like to see them resurrect the Transpacific Partnership, which UH Trump left the first day in office, decided to to reject it, and the other nations UH in Asia went ahead with it on their own, Japan, Australia, others.

I don't think that will happen anytime soon, but I think that's the type of spirit I think you're going to see out of this new administration you lead that they're going to go back to to push the efforts on climate change, green finance. UH, They're going to want to strength in the Atlantic Alliance. UH. They will be very prone job and they will want to re engage our allies in Asia much more so than the Trump administration.

Bill Rhodes, you are sticking around. We have lots more to talk about, and we want to get into more detail regarding what you just said about Asia. That's Bill Rhodes, banker to the world and author by the way of a book of the same name, And really no matter what country you're in the world, you'll be able to get a local language translation of that book by Bill Rhodes. Just keep you updated. There is some procedureal votes going on in the House now before the debate on impeachment.

Thanks for listening to Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio