Mueller’s Low-Key Rebuttal Blows Hole In Exoneration

at Bloomberg dot com. With us is Andy Harris, who is a legal reporter for Bloomberg News and joining us here in our Bloomberg Interactive Proper Studios can nowaday former corruption and fraud prosecutor for the U. S. Attorney's Office in the Southern District of New York and a partner at Ventable uh Con. I want to start with you, what was your biggest takeaway from those statements. I think the big takeaway is Bob Mueller is a consummate professional.

He speaks through his indictments and through his report, and that's very clear from his statement. If you noticed, he kept quoting from the indictments from what the grand jury returned, and he's said, basically, I speak as a prosecutor, as a law enforcement officer, through my report and through my charging documents, and that's all you're gonna get from me. So, Conn, I think one of the interesting aspects, and from his commentary, was that the UH did not believe that he could

or the office could indict a sitting president. What is your understanding of that? Is that A is that a constitutional issue? Is that a d J policy issue? Because I know there's certainly some question about that. It's d o J policy based on reading of the Constitution, and

that's been d o J policy for quite some time. UM. What what I find interesting is you have a G. Barr Attorney General Bar, on the one hand, being surprised that Bob Mueller didn't reach a conclusion, a prosecutorial conclusion, UH, implying that he could, and on the other hand, Bob Muller Mueller hewing close to d o J policies and playing the role of a prosecutor. Andy, come on in here,

what was your takeaway from this? Uh? These comments? Well, onto that observation, I think that the Special Counsel's remarked that quote, if we had confidence that the president clearly did not commit a crime, we would have said so

is pregnant with portent. UH. It runs expressly counter that the presidence no obstruction, no collusion narrative and infers that he's been anything but cleared, but that the Special Council believed that there was some other process for addressing that, i e. Congress and potentially the unspoken eye word impeachment. So this was as low key as it was, uh, something of a rebuttal to the President and to his allies who have said that he's been cleared. So con

do you believe that? Do you believe that Special Council Mala will be called in front of Congress to testify? And if so, you know, is he going to expand anywhere outside of the scope of that agreement our findings? Well, Paul, you just heard him. He basically said he's going to you very closely to the report, and that's what he's gonna do. So I think he's signaling to Congress, you know,

call me. But that's all you're getting. Well, But but Andy raises a really good point, which is, yes, he was hewing closely the report, but he curated the statements that he made from said report, and and really that one statement saying if he believed if the group had believed the President had committed no crime, they would have said. So is that the key takeaway from this report? And does that indicate that he's sort of nudging other parts

of government to take action? Uh? I absolutely agree with you, because he is a shrewd man. He's very wise, and he picked very few words to say today, and that was one of the words he said, those words about how guess what everybody going back to that report headline, I couldn't say, and I can't say today that the president didn't commit a crime. So, Andy, what is the

feeling within the Beltway here? What is your sense of what we how Democrats will maybe take this commentary, the statement from Mr Mueller as it relates to kind of how they view the presidency, whether you know, continued oversighter, even the impeachment proceedings, Well, it could tie House Democrats and not not. Obviously, Speaker Pelosi has been under substantial pressure from some factions in the House to initiate impeachment

proceedings immediately. UH Judiciary Committee Chairman Gerald Nadler has been trying to get a less redacted version of the report, plus the underlying UH evidentiary materials that were gathered up by the Special Council's office. Um, clearly, there's it's almost a volcanic pressure, uh to do something in response to this. But an impeachment is tantamount to a criminal proceeding brought by Congress, as we saw during President Clinton's term. And

you can't really initiate this. You can't go off half cock. You've got to have your gunloaded. You got to know what the evidence is before you can start casting allegations. This will, no doubt ramp up the pressure on Speaker Pelosi. It may even ramp up the pressure on Attorney General bar in the Justice Department to turn over some of

the information that the House Judiciary Committee is demanding. So, con I'm wondering about Attorney General William Barr and his role in this, the idea that Robert Muller was sort of contradicting some of the things that William Barr had said about being surprised that they didn't come to some sort of recommendation. What do you make of Attorney General Barr's performance up to date and what his likely response

will be? UM? So, taking your your your first question, UH, you know, I think turning General Bar is in a

tough position. UM. I think both Bob Mueller and Attorney General Bar are coming at this situation from a viewpoint of how to be fair, and Bamler just said, listen to reason, we didn't say that the president committed to crimes because we can't charge him, and that's unfair, right to say somebody committed a crime and then there's no court, there's no criminal case for the president to defend himself.

I can imagine the Attorney General Barr having the flip side of that, uh, saying, listen, you have this report with all this stuff in it, and you didn't say either way what your viewpoint was, and now this report will be out there, so I'm going to have to say, listen, there's not enough to charge obstruction because that the report itself is unfair. So I think there are two ways

to to look at that. UM. From Attorney General Barr's perspective, trying to be fair to the president by saying, well, this report is out there, they're gonna want to know what does d O J think? UM, So it's unfair to him if I don't say something. So con what do you think your former colleagues in the Southern District of New York are going to do next. Um, They're going to keep doing what they do every day, which

is investigate, investigate crimes. Um. I think Uh, Bob Muller just made a very important point by saying, you know, the OLC opinion allows us to investigate the president, and this is an investigation that should have happened. So that kind of insulates that investigation. At same time, the prosecutions on the District of New York, they're investigating, uh, things related to Manafort there. They just charged the uh, the

banker with bribery who's involved with manifort Um. They have other investigations going on and those will continue, Those will continue beyond this presidency. Uh. Andy, I'm wondering we are expecting to hear from Attorney General bar within the next few weeks. Isn't that so? I believe that we are. Of course, you know, again, this is a very fraught relationship that the Attorney General has right now, uh with House Democrats. It will be interesting to see in what

context we do here. Uh. A committee there believer it's a judiciary committee actually voted to hold the Attorney General and contempt for spurning a subpoena to appear before them that has not yet gone to the full House for a vote, So it's kind of hanging out there in the ether. But at some point, in some format we will likely hear from the A G. And just we have a sense of what Attorney General bars reputation is, sort of how his comments have been perceived, and sort

of what you're hearing from the legal community. Boy, that's really an eye of the beholder question. This isn't his first go around as Attorney General. He also served on the administration of President George Herbert Walker Bush. And we're on the one hand, some people see him as a dedicated and experienced law man and a good choice for the job. On the other hand, people from across the aisle look at him as somebody who is a partisan, and I think it was WILLIAMS. Sapphire at one point

called him general cover up. So bars reputation is again depending on who's looking at him and wearing out the glass is half half or half full. Andy Harris, thank you so much. Andy Harrison Berk Legal Report are joining us and giving his thoughts on the Moller's statement. Joining us right now is Tim O'Brien, executive out of her Bloomberg opinion on staying with us as kind of nowadays.

Former corporation and fraud prosecutor for the U. S. Attorney's Office in the Southern District of New York and a partner at Ventable l LP. So, Tim, just love to get your takeaway from the statement by Mr Mueller. I don't think he was saying anything particularly new. I think he clearly used this opportunity to talk about the fact that his investigation was wrapped up, and then he was moving on to emphasize what he think was was important

about his work. And to me, the two things that popped out were obstruction of justice undermines the core mission of the law enforcement investigation, and and I think he chose to emphasize that perhaps because the Attorney General, William Barr did not, especially when he first rolled out the Mall reports findings. I think secondly, he made a very I think, uh trenchant point about the fact that if they could have absolved the president of not committing a crime,

they would have done so. On the other hand, they didn't feel it was within their power to charge the president with a crime. And I think that that really highlights again the second half of the Malla Report, which focused in great detail and at great length on obstruction of justice issues. And I think that that's going to be one of the things that lingers over analysis of the Malla Report, analysis of what Bob Mueller chose to do and not to do, and why the Attorney General

took the actions he did. In your view, does this change the political calculus at all in terms of what Congress does with the Malla Report. Uh? Well, I think there's two things here that that make that a difficult question, Leasa. I think the first is there's a political analysis as to whether or not impeaching the president or going down a more hardcore path presents political problems with the Democrats. That's certainly what Nancy Pelosi is is weighing in all

of this. On the other hand, we are a nation of laws and and we live in the idea that there is a rule of law and no one is above the law, and if laws have been broken, justice should be meted out. And so there's a second piece of this that should just correspond with what the laws tell us to do. And to a certain extent, these things are knocking heads the political calculus versus what we should do as a national laws And I'm just wondering, con come on in here, because a nation of laws,

it definitely does go to Congress. But there is a question of what other courts could do and what other prosecutorial offices could do if it is not possible to indict a setting president through the legal system. So that raises a question about some of the investigations at s d n Y. Right, that's that's absolutely right. Um, you know, beyond the investigations that the Southern District of New York

has going on, um charge cases and other kinds of cases. Um, there's also the New York Attorney General's Office is being very aggressive with going after Trump or the Trump organization as well as people related to the Trump organization. So, um, you know that if people investigate things, that's what prosecutors do. And there is the report shows the moral report shows there's a lot to investigate, and there's a lot to do. There are a lot of trails to go down, and

once you open an investigation, it's very hard to close. Um, it's easy. It's easier to open one than close one because you have people invested and people follow trails. People do their jobs So, Tim, what do you think the response will be from the President to Mr Mueller's statement. I imagine that they'll say, but again I don't know, but that that Robert Mueller came out to say that this investigation is over and it's time to move on.

That's what the President has said consistently. A more colloquial version of that would be get over it, um. But the reality again is that there are facts left that need to be explored. I think around uh, financial conflicts of interest, actions taken by the President and members of his team during the election, as it pertains, substruction of justice during the transition into the White House and thereafter

that are still unresolved. Any idea what the Republican response will be just real quick, get over it, you know. So they're gonna they're gonna stay behind the very consistent and solid on their messaging around this. I really appreciate both of you being here with us today. It really is an interesting conclusion to a very high profile case. Understated perhaps, but trenchant is a great word. Uh really

every word that Bob Muller speaks incredibly powerful. Tim O'Brien, thank you so much for being here with as executive editor, columnist all things having to do with President Trump and everything related for Bloomberg Opinion. Also can Nowaday thank you so much for being with us, former corruption and fraud prosecutor for the U. S. Attorney's Office in the Southern District of New York and a partner at Venable l LP. But first, let's take a look at the bond market.

Bond yields continue to grind lower. The yield curve has inverted. The question for many investors is does this mean a recession is imminent? To answer that in other issues, we will speak to our good friend Jim Bianco. Jim as president, founder of Bianco Research. He's also a contributor to Bloomberg Opinion based in Chicago. Jim, thanks so much for joining us. So do you think the Fed will heat these warnings of inverted yield curve and so on and cut rates

or with a risk creating a recession. That's a good question, and um, they should heat the warnings. It's a market signal that policy is too tight. But if you look at their public statements over the last couple of weeks, the vast majority of Federal Reserve officials have said that they do not see a need to cut rates anytime soon, and in a couple of them are even still talking about that the next move would be a hike. So I would like them to listen to this statement or

to this market signal that policy is too tight. That's why the yeld curve inverts. If the yelk curb stays inverted for a protracted period of time, it just concumulatively weighs on the economy until you potentially get a recession. The way you steep in the yeld curves, you cut short term interest rates. I hope the Fed listens to

that and does that exact thing. Well, Jim, it depends which yield curve you look at, because actually they are different stories being told depending on where in the curve you look. Yes, we are seeing an inversion in the ten year three months curve, but further out not so much. In fact, you're seeing a steepening. The extra yeld investors are getting to own thirty year treasuries over ten year treasuries has actually increased a little bit. So why should

we pay attention to that one? Uh, that is sort of what people are worried about right now. You're right, that the thirty year yield has got a massive steepening. It's forty five basis points, almost half a percent higher than the ten year note. But the thirty year tends to be kind of a special trading vehicle with not as much economic implication as say the tenure in the three months to Most economic studies have been done on

the tenure in the three months. It's been modeled off of the that you'll curve, and that one seems to play the best with giving us an economic signal. The signals you'll get from the bat from the far end of the curve, like the thirty year tenure spread, tend to be more technically driven about flows and about traitor sentiment and a lot of things that do not directly impact the economy. That's why I focus on that ten

year three months as much as I do so. Jim, the you curve inverted earlier this year, it's it's inverted now. But is there a certain time period where in terms of duration, that it starts to get your attention and you think it should get the markets attention. Yes, I've used ten consecutive days and we're in day four right now. Back in March, we got the five days and then it uninverted. Now why do I use that conceptually? What I'm trying to say here is the your curve is

inverted today, it means policy is too tight today. It means policy was too tight yesterday. If it continues week after week, month after month, and I'll use ten consecutive days, because once you start getting into that room, you usually don't uninverted. But if you stay inverted for a month or two months or three months, the cumulative effect of saying policy is too tight every single day starts to

weigh on the economy. Could handle a couple of weeks of it, could maybe handle a month of it, but beyond that you start getting in the problems. And what I found is after ten days that usually is a good enough signal that usually it means we're inverted, We're going to stay there, and it will continue on until the Fed changes policy. So what actually happened to trigger this latest bout of yield tightening? I mean, honestly, we've

been talking about trade concerns for a while. Morgan Stanley coming out this morning and saying that actually some of these jitters began well before that, and for and foretell a downturn that would have happened regardless of trade. Do you agree, Yeah, I do agree with that, and I think that what's changed is the perception on inflation, and the answer is there isn't any and there's none coming.

And now we've got crudeoil prices, which is a big input to headline inflation falling, and it also has an additive effect on core inflation as well too. Most economists will say, look, the Fed's not going to cut rates. Look at the economy. The economy is fine. That's not what the market is looking at the markets looking at

no inflation at all. Now you've got falling crude oil prices. Maybe, as Gary Schilling wrote in a Bloomberg opinion column yesterday, and I thought he made a credible case, trade wars and tariffs could maybe even be deflationary for the economy too. If that's going to depress inflation, then I think that's what the markets focused on saying, Look, you've got very

low inflation. That's what's restrictive about interest rates, and that's why you need to cut It's not about real GDP at this point, So Jim, the FED has said pretty consistently recently that it is data dependent. What data are you looking at? What what data are you putting into your model. I'm looking at the inflation data right now.

I think that that is the data that is going to that is driving why the YEL curve is inverted, why the Fed fund futures are saying that there will be a hike, I excuse me, a cut in September. So I'm looking at the inflation compensation from the from the Treasury inflation protected securities market or the tips market.

I'm looking at a lot of the inflation numbers as well to some of the surveys UH and it's and the price of crudhile, because that is a big input into what people's perceptions are inflation, and all of that is going down right now, especially overseas in Europe. You're at multi year lows and some of those market measures of inflation expectations. UH screaming at Mario Drag that he should be considering something as well too, in terms of

cutting rates or easing policy. So those are the inputs I'm looking at, and all these inflation expectation and actual inflation numbers are heading lower, and that's why this market wants a cut we're speaking with Jim Bianco, the president and founder of Bianco Research, talking about the story of today, which is the drive lower in benchmark government bond yields

globally and developed markets. And I'm trying to figure out, Jim, what exactly does this say about risk assets because up until now, lower yields has meant support for risk gear credits as well as equities. Is this time different with respect to that too? Is it's getting there? You're definitely right that normally would is seen um lower yields be

somewhat supportive. But I think that the reason you're starting to see risk assets wobble with falling interest rates is that there is a heightened fear of too low inflation. Let me let me put a definition on that. Why do we worry that inflation is too low? Because in the next recession, and there will be one at some point we haven't repealed the business cycle, inflation will fall.

If we start that recession with a one percent inflation rate, the fear is it will fall to deflation, which is very stressful on the financial services community, very stressful on the banking system. And that's what the FED will pull out and all central banks will pull it all stops to prevent deflation. In one of the ways they try to do it is let's not start at a very

low inflation rate. So I think what you're seeing in risk gassets is as interest rates go down and as risk gas has fall, a classic risk off sentiment that is worrying that we might start to see too low of inflation. I don't know if I'd go as far as deflation, but too low and definitely not where you'd want to start if we're going to have a downturn. So, Jim, to what extent do you think this Federal Reserve is

influenced by the market. There's certainly been some concerns that, you know, the move in December and the and then the the easing in the first part of the year, where market influence. Is that a real concern? Yeah, I think it is a concern. And I was going to answer the question that they seemed to be reactionary. There was plenty of evidence going into that December rate hike that the markets were unsettled by the idea of another

rate hike. The markets were unsettled by automatic pilot, with the balance sheet continuing to move lower and the fed pushed ahead with it anyway, and it kind of blew up in their face. Remember that the Dow Jones industry ravage saw six h points during the one hour of J. Paul's December press conference, and then two weeks later he did what we now, if you sphemistically, called the pulp pivot, where he said, Okay, forget everything I said on December nineteenth.

Here's the new scenario. We're not going to be raising rates nearly as much, and we're going to back off on the balance sheet. So I wish they would be a little bit more proactive in looking at what markets are telling them instead of reactive. Just we'll do what we'll do, what the models in the academics say, until the markets blow up, and then we'll just completely reverse ourselves. That's not a good way to run policy. Just quickly hear, what what's the next recession gonna look like? Is it

going to be a repeat of Uh? If you can tell me if there's an over leveraged sector that could actually drag the economy down, then yeah, it could be. But I don't see that, and I don't see that in the leverage loan space as well too. I think The thing that could really hurt this economy, which is what I think the markets were signaling in the fall, is higher interest rates. As the old thing goes um,

usually the FED raises rates until something breaks. Well, we got the three and a quarter and the tenure in the fall, and all of a sudden the market seemed to get you know, they didn't break, but they got really wobbily at that point. As long as interest rates don't shoot higher, I think that this If we have another recession, I'm a saying we will. But when we do, uh,

it will be more of the garden variety. If it comes on the back of spiking inflation and driving up interest rates with all the debt we have, that could be problematic. But like I said, the problem now is too low inflation, not too high inflation. Jim Bianco, thank you so much for being with us. Jim Bianco, President and founder of Bianco Research, also a contributor to Bloomberg Opinion.

In March of this year, and Upstart mobile phone manufacturer entered the market with what it builds as a state of the art mobile handsets and wireless connectivity at an unabeatable value. And I took a look at the phone. It is very cool to help us walk us through this story. John Paul de Joria. John Paul is a co foundered CEO of r Okay Group, also the CEO and co founder Paul Mitchell and patron Spirits. I believe Patrona sold the Bacardi in four five point one billion

dollars or something that was evaluation. Congratulations on that trade, John Paul, thanks so much for joining us. You walked in, you showed us this phone, and what Lisa amazed Lisa and I was there's three D stuff and we weren't watching we didn't have glasses on. Yeah, it's three D without glasses, a technological breakthrough, and it's a rocket phone, like a rocket ship going on the moon. Are okay?

I t rocket phone and it's very very advanced. The phone has dual sims, it has it's unblocked for the world, which is kind of cool. WiFi comes with it in a year's worth of telemedicine, plus other little bundles we have. I think what really blows people away is not only is it advance and two cameras regular camera and three D camera, but blows most people away is the price, especially the retailers during the United States and the consumers. We wanted to have a little bit of profit out

a lot, but get them out there. The price on the phone is are big one is only two hundred and nine. In our normal one, which is what most mote phonts are, smartphones are is a hundred and that's the retail price. And that comes with the three D and everything. And you don't have to be attached to any carrier. You go with any carrier you want, any plan you want, because you remember, it's worldwide WiFi, so you can make calls all over the world free. You know.

Paul said that he was struck by the phone. I was struck by John Paul de Joria, your enthusiasm for it and the sparkle and and and just sort of her energy given the fact and to what was interesting to me is sort of it explains how you UH at one point where homeless and ended up co founding Paul Mitchell's and UH and Patrone Spirits and now you've moved into phones and and sort of the energy that

sort of drove that. I'm just wondering here. Your focus on content is very interesting because a lot of other big cell phone companies and tech companies have been trying to move into the media space. How did you do it here? Well, we ended up with this great technology of three D that actually works on a smartphone. It actually will work. People have tried it before. Dingman across as good anyways, came across really great. So once we had that and we started tying up exclusives on content,

we were anticipating this would work. So we went to studios and think of it, if you have a three D movie, it's in the theater or imax, but after there it sets on the shelf because there's no other you know, format to put it on. Well, so we took it off the shelf, gave them some money for it, of course, paid you know, some nice money for it, and then got the exclusive on it for the next three to five years with these various things. So it all it kind of was in harmony and were so excited.

I know that it was unbelievable. Like, for example, take Walmart who's starting to launch at June sevent in their stores, and right behind that as Costco and many others. But Walmart was hard to believe. They sent a team over to Asia to check out where they're made, how perfectly they were made. They worked exactly as we said, with the capacity to make a lot, and they said, yeah, this is great. So right now, the only place you get it now would be either on Walmart's website or

go to rocket r okay i T dot com. So talking about the pricing a little bit, that the the the handset pricing you mentioned, how about some of the packages of surrounding it. If I want to get these three D movies and maybe the telemedicine and all that kind of stuff, how are you guys packaging that? Yeah, we have these unbelievable bundles the best ways to tell your audience and yourself, especially small businesses that can't afford insurance,

life insurance or health insurance for their staff. Our most expensive bundle that you can put on any smartphone, by the way, is only fourteen dollars and ninety five cents a month. But here's what happens to a small business. For fourteen dollars and cents a month per family or per phone, the whole family uses it, you have a hundred thousand dollars worth of accidental life insurance. Twenty thousand dollars with a burial insurance, so the beneficiary gets some money.

Tell themedicine seven days a week, twenty four hours a day. A doctor's on the phone with you, diagnosing you and writing you a prescription of necessary and set to get down or saying hey, you're the tycent to go see go see a regular doctor emergency immediately. And then roadside assistance similar to a triple A. And then uh legal advice a thousandars with the legal advice. And the great thing for cities and business people is one hour a week of a therapist on the phone with you. That's

our big bundle. That's our four and we've posted for four dollars fine hours. You know other little bundles. But that gives you an idea. So we want to change the game and make affordable for everybody insurance and things of that nature. You know, there are a lot of aspects to this. You're sort of at the epicenter of a lot of the revolutions that are going on right now. One of them people talk about is the slowdown in the smartphone market, and I'm wondering, you know, how you're

sort of fitting in there. I understand that your your product is different but not only is there slow down in demand, but there are also are pressures when it comes to trade tensions and supply chains correct on these particular phones. What makes the difference is we put an entire famili's lifestyle, a good portion of it in the phone. We're onto that phone. You have your insurance, you have your roadside assistance, you have a therapist, you have emergency,

you know medical things that doctor on the phone. So the big changes and people say, oh my god, this this does five or ten things for me at a very low cost. And your rocket phone is just, you know, pretty incredible. So we're a whole different app universe. We thought it years ago what we need to step up so that we could compete and give the public something they don't have right now, and we have the patent. By the way, I'm bundling on celluator phones twenty seconds.

Do you sell anyone's data? Do you collect it? Do you sell anyone's data that you collect? No, we don't take collect anybody's data in order we sell them the data. By the way, most of the parts are not made in China. They're made another place. Especially the United States ship there and China wants to distribute our phones because they can't get the content. I asked that just simply because if everybody is talking to their therapists on the phone, you know they might be worried about No. No, no,

we don't do that. We don't collect anything. We collect now. We're all about peace, love and happiness. It's like the culture and all the Paul Mitchell schools. Our peace, love and happiness is a hairstyle is how do you have peace, love and happens in your life. One of them is that you don't have to be afraid of anybe listening in or or tampering with your freedom and privacy in our great country. John Paul de Joria, thank you so

much for being here with John. Paul Degoria is co founder and chief executive officer of the Rock Group, talking about his rocket phone. Also the CEO and co founder of Paul Mitchell and Patron Spirits. Thanks for listening to the Bloomberg pl podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa abram Woyds. I'm on Twitter at Lisa Abram wits one

before the podcast. You can always catch us worldwide. I'm Bloomberg Radio.