Rosenstein Resignation Would Be Greatest Gift To Trump

he is going to resign or president. As we speak. It's just changing every every second because now there's an indication that perhaps he's resisting, which is what we would have expected before because he's been through so many of these turmoils and has always resisted. So that's why this report was so shocking to you when it said that he was going to just hanging in. Let's bring into Al Hunt's opinion columnist. I want to get your thoughts out about how how big of a deal this is. Basically,

what's the implication. I think that's what markets are trying to figure out. That's what a lot of political strategistic trying to figure out as well. If I were Joe Biden, I would say things I can't say in radio, to say there's a big deal, A big blanking deal. I mean it really, we got it. I think that I think most listeners got at the first time. Um it is. And whether he resigns or is fired is also a

very big deal. And there's a there's an uncertainty at this stage if he resigns because he feels he has to. That's a that's that's the greatest gift that Donald Trump has had, maybe in a year and a half. Because whoever takes over this investigation, and there is the law spells out who would who would be the next in line? It would be the Solicitor General, who would probably recuse himself because his law firm is involved in this. And then it would probably be the head of O l

C and Mr Angle. I think it's almost certain they're both movement conservatives. It's almost certain that they would not want to give Bob Mueller the kind of freedom and flexibility and independence the Rosen scene did. So therefore I doubt they would fire Mueller, but I think they would probably try to undercut the investigation. So it is a very big deal. Al hunt. Are there figures and individuals that are currently working in the White House that are

trying to undercut the president? Oh? Yeah, yeah, they really are. I mean, you know, every day he commands no loyalty, and there there are fights, they're internees, seeing warfarees that go on, those going and go have going on in other and other administrations. They're probably more in this administration. The stakes are probably more petty than before, and there

is almost no loyalty to this president. So every day there is a sense, I think among a number of people who work there is my god, what is he up to? I mean, we've had the quotes attributed to Gymatics and attributed to John Kelly and attributed to Gary Cone that he's a fifth or sixth grade education, he's an idiot. I think there's a widespread weef among a number of people who are in the administration that he's not up to this job and and and it's dangerous,

all right. So I want to want to push back on you with that, because the economy is doing well, and I'm looking at markets, and frankly, markets have not been taking that big of a hit from this. I mean Initially there was a spike down, but otherwise it's steady as she goes. We're down a little bit today, but that's to be expected in between earning season and then they're There are a bunch of other reasons, in particular trade, the idea that the US and trying to

trade discussions are not going that well. I'm just wondering, do you think that people are too sanguine about what's happening and that it will affect things, just not in the near term, or do you think that this is just you know, the political and economic are two totally

separate universes that aren't intersecting right now. You know probably better than I do, that it's impossible to separate the two um But I do think that there is a sense the economy is doing well, the underlying fundamentals are strong. There's not a sense there's going to be a problem in the foreseeable future, and there's a feeling that whatever the political instability in Washington is, that that's not going

to affect it much. Whether that's right or not, I'm not sure, uh, And I'd have to go back and check all the data during the next years, but my impression is that that that the the economy at least didn't tank because of the perception that there was a lack of stability in Washington back in seventy three and seventy four. So I'm not really surprised by that. L This is June. Um. What do you think will happen if it turns out that Rod Rosenstein is retiring? How

do you think Democrats will react? Well, you put it, you put it very diplomatically, retiring. Is he going to resign or resign? Sorry, resigning? I keep on saying retiring, because I think he's had a tough go of it.

He sure has. Um. Look, he was appointed in the first place by Jeff Sessions in order to run the Department of Justice manage U S attorneys, and then only after he was appointed did it come out that Sessions had his own conflict of interest with the Russians, so he was he was It was almost an accident that he was put in charge of this, which is what drives Trump so crazy. So if he is fired, I

think the Democrats will go ballistic. I think they will try to get legislation that some Republicans have sponsored to assure Mother's independence. I think there will be a sense that it could be very harmful for Republicans in the midterm elections if he, however, resigns because he says, I just can't, I can't, I can't stay there anymore because

of the perception. Although all of his people have said that whatever he said about wearing a wire and it's likely for the men's going for the men were said in jest. But if he feels he has to resign, I think that takes a lot of the pressure off Republicans al Hunt. The ongoing question of whether he resigns or whether he will be fired, does it really matter it? Does it? Does it matters? Uh? It certainly matters politically

number one. And secondly it matters and the kind of pressure that is brought to bear on whoever takes his place overseeing the Mueller investigation. If he is fired, and say Mr Engel, who is the head of the OLC, becomes in charge of the Mueller investigation, Uh, they're going to be whether it's the Congress, whether it's outside groups, whether it's the press, They're gonna be watching him like a hawk. And I think there'll be a lot more pressure on him not to blow out the case. So

I think it does matter. What do you expect us to actually find out what Mueller has been doing aside from the cases that currently have been prosecuted. In other words, does he have the goods to actually get up to the White House or is it just gonna be sort of left where we've seen it? Well, I don't think we're gonna know for certainly months. Um, you know, on the relative uh spectrum of independent councils, this has not

been in the joint out process. I mean, what can start to four years, five years and you know, much less serious charges and much less success. So, you know, I think we're talking about at least until the early part of next year. That assumes that there's not an interference in the investigation in the process. I don't think he's going to doing between now and November six, and

then afterwards, I'm not sure what he's gonna do. But there's a whole bunch of people, whether it's Michael Cohen or Paul Manaford or some of the others who you know who, as they say, flipped and they're telling him stuff they don't. He doesn't give them that kind of a deal unless he thinks they have something to tell, something to reveal, and that is almost always about someone higher up, and there's a limited number of people who were who are higher up. Yeah, Alhan, thank you so

much for being with us. I hear your phone beeping. I'm sure it's on fire. I'm sure you're getting calls from everyone under the sun, and I would love to hear what they have to say. Alhant Bloomberg Opinion columnists coming to us from Washington, d C. Just in the past a few weeks, leaders from the corporate as well as the governmental worlds came together to try to figure out how to steve off some of the malefacts of

global warming. One of them was Berry Parking is Chief Sustainability and procubent Officer for Mars Incorporated, and he joins us here in our studios. So, Brian and Barry, I was talking about the Global Climate Action Summit in San Francisco. You have pledged to reduce mars is economic ecological footprint carbon footprint by more than sixty percent by the year How do you plan to do that? Well, good morning, all um. It's an incredibly tough challenge because we plan

to do that while we continue to grow. So we're going to do that by getting to zero carbon from our own factories and then transforming what we buy and where we buy it. Because most of our greenhouse gas footprint is upstream in the raw materials in agriculture, So we have to change the way agricultural works today. Bart and One, if you could just suscribe a trip that you made to a Indonesian coconut supplier, tell that story about how that opened your eyes. I mean, you're a

veteran at Mars. How did this open your eyes to this new area for the company. Yeah? Absolutely, you know, I think I didn't grow up believing my career was going to be in sustainability. So it came to me, and it came to me through procurement and buying raw materials. So I guess maybe fifteen years ago I visited a coconut plantation in Southeast Asia and the scale of this

thing is incredible. Hundred kilometers by a hundred kilometers if you can imagine that, just coconut sixty miles by sixty miles, and you can't get to it by road. No, you get there by boats, and you get onto a canal system and you travel around the whole day and all you see is coconut. At the end of the day, I got back to the to their ports and they have two huge factories where they're processing this coconut and

a the thing that then it's a big place. And then they said, you're our biggest customer and this is quite a small ingredient for us. And I suddenly got a sense of the amount of land, the amount of people that were at that point almost invisible to us upstream in our supply chain. And and that's what got really really interested in. You know, what's our footprint on the planet and what's our footprint on people? And how do we bring that into our thinking and into our strategies.

So how do you make it more sustainable and how do you do it with a cost effectiveness that allows your business to grow? Well, you you start by setting the right goal, and we've talked about that extremely challenging goal, but you have to you have to drive transformation and and that means that we have to We have about

a million smallholder farmers in our supply chain. And you know the story about smallholder farmers today is they're they're either the victim of climate change, their livelihoods are going to get impacted. Although the villains of of climate change that they're the ones deforesting UH and an expand expanding their land use. So we believe we can move them from the victim or or them or the villain to the hero. And we can do that by the way

they grow the crops in the future. They grow diversified crops, lots of different plants and trees, and they work on the quality of the soil. They can actually pull carbon from the atmosphere and and actually be a big part of the change that we see. So we have to change. We have to go back. So we're you know, we're an industrial food business. We have to go back to agriculture and go all the way back to those farmers at the beginning our supply chain and work with them

to change what they do. That that's what will make the big difference. I just want to bring a headline to you that this is coming to to us from axios Is. The Deputy Attorney General Rod Rosenstein has verbally resigned to the Chief of Staff John Kelly in anticipation of being fired by President Donald Trump. This is according to a source with direct knowledge of the situation, and this of course from Axios. Will be bringing you more

details as we get them. And just to give you a sense of the market reaction, the SMP five hundred does is dropping to a session low in response to this news, but very you know, I want to pick up on what you're talking about, how you have to go to the farmers and I just want to go more to the corporate leaders. When you were in San Francisco, did you feel like there was sort of a ground swell of support for this view that you have and trying to push companies in this exact direction or is

there more pushback given the political situation? Talking about politics, uh, and sort of a reduction of some of the gas emitting regulations. I think everybody gets the size of the challenge and the urgency here and and most big companies are working on this. I think what we're saying is that the level of of disruption that has to happen is huge. And you know, we talk about a transparency race.

You know, we have to know where all of these materials come from, because that's what I can sumers expect and that's what the activists in our supply change. So we're seeing a level of disruption and transformation that perhaps others are not yet seeing. I talk about the end of the commodity's era. You know, we used to buy these raw materials at arm's length, not really knowing where they came from and not really knowing what conditions. We

think that's that era is over. You have to know where everything that's going into your products, whether it's food products or electronics or wherever, you have to know where

it all comes from. I just am struck by coconut water that there's an advertisement for it where it says feel good about your life and feel good about what you've putting your body in a cost about eight dollars to buy, you know, twelve ounces, and I just have to wonder, you know, is there a cost that people are not willing to pay in order to make things more sustainable? On the consumer side, yeah, you know, I think it's been slower than anybody would expect, but consumers

are moving towards sustainability. There's always been a few percent that really care about this, and I think we're slowly seeing that grow. It's not happening as fast there's probably any of us predicted, but our view going forward is that in five, ten, fifteen years, consumers will make more and more conscious choices around more sustainable products. And we

want to be at the forefront of that. And that means one of the things that they have to know where everything that's going into the product that they're going to eat comes from. And and that's the big change. And if you if you do that, then you're inevitably into longer term relationships and more direct relationships with those farmers. And and that's the big procurement sourcing change that's happening

in the world at the moment. Barry because of Eminem's, because of Mars Bars, because of all the great chocolate confectionery products that you make. I want you to talk if you can about coco supply because the whole supply chain topic that you just described as something that you're currently working on with Coco. Indeed, this is part of our overall initiative. You're going to be spending what a

billion dollars over the next decade. Yeah, you know, we all love chocolate and the that the truth is you can't make chocolate without cocoa. So we have to fix the supply chain of cocoa and and it's incredibly hard. Coco is grown by hundreds of thousands, millions of smallholder farmers and we have to help them become more productive and and increase their incomes. That many of them are

not doing great, and it's been really challenging. We and the rest of the instrument working on this for decades. So we announced in the last couple of days a big new investment, as you say, a billion dollars to be spent over the next ten years to to invest with farmers to move them from being smallholder farmers that just grow coco too larger farms. We think that that that will happen over time and they'll grow more things than coca. Because it's seventy five thou farmers. You're talking

about a lot of people right now. Yeah, that's the start. And I think what we need to do is we need to demonstrate at scale as a path to those farmers becoming more and more successful, employing other people and and you back to what we're talking about earlier, also pulling carbon out of the atmosphere into their into their farms. We've we've proven this at small scale. The challenge has always been to scale this up to tens and hundreds

of thousands, and that's why we're investing more money. So I'm just wondering which countries that are major farm producers have been the most eager to work with you and the most effective in making some of these changes. Um we source from Africa, Asia, all over the world. I think, you know, a good example would be on on deforestation in West Africa, where we've made a real breakthrough and building a public private partnership industry and the governments of

Code of War a Ghana. We've got a really strong Cocoa and Forests Initiative now where it lays up very clearly what government going to do and very clearly what industry is going to do. And I think that's a great example of you know, if you really spend the time to work out and get an alignment of interest, you can make progress. And and we think we can stop deforestation by working together. This is not easy, you know, and and many other countries were not yet necessarily on

the same wavelength. And but that's what we have to do. I think we've shown over and over the industry can't solve this on their own, and often government can't solve this on their own and it's the two together that will get this done. Berry Parkin, thank you so much for being with us. Truly a pleasure having you. Berry Parking his chief sustainability and procurement officer for Mars in

New York. They have a one billion dollar sustainability investment currently to reduce the carbon footprint of its businesses and supply chain by more than six A Crisis of Beliefs, Investor Psychology and Financial of fragility and is the title of a new book written by Professor Andre Schleifer. He is a professor of economics at Harvard University. His co author with the book is Nicola Genali is the professor of finance at the Bocona University in Italy. In Milan,

and Andre Schleifer joins us now. Professor, thank you very much for being here. Talk a little bit about the misconceptions that investors, or indeed anyone has about financial crises. Well. Thanks, it's a pleasure to be here. Uh. This is a book about financial crisis. It uh kind of takes off from where Charlie Kindelberger, the great economic historian, has left off, maybe forty years ago, and it says that, uh, most financial crisis are kind of the same, which is to

say that they start with a bubble. Uh. This time it was a bubble in the housing market sometimes as bubble and government bonds. When the bubbles collapse, people lose a lot of money, but more importantly, banks lose a lot of money. And that's how you get into a crisis. And oh, it was pretty similar. Now you asked about misconceptions that are kind of two stories that are often floating around that don't square well with this uh uh set of facts. The first one is that it's all

the bank's fault. You probably have heard about two big to fail and how banks were speculating, uh and getting homeowners to households to buy houses. The truth is everybody was in on it. People wanted to buy homes, banks wanted to finance homes. Rating agencies wanted to make it simpler. When you have a bubble, everybody is speculating. So it's not just the banks, Uh, it's everybody. The second misconception,

which is more dramatic one uh. And it's been a misconception that has been kind of um advocated or pursued by some of the protagonists, the policymakers in two thousand and eight, which is that the crisis is a total surprise, which is to say that Lehmann came out of nowhere. The fact of the matter is that bubbles move, bubbles and crisis move very very slowly, and there was eighteen months of banks facing stratospheric losses before we had Lehman.

That's really a very big misconception. There also is a misconception of behavioral economics and how that plays into things. People talk about the post two thousand and eight era and how millennials, for example, have not been investing in stocks as much as their peers, and not to mention the fact that, you know, the sort of fervor that creates bubbles. How does behavioral economics and psychology plan into this. Well,

the crucial part about bubbles is twofold. One is that people think that trees grow to the sky, which is to say, in this case that people felt that they would get ten percent a year returns on their homes forever, which is what happened for a few years, but it can't happen forever. The second part, and this is why behavioral economics also comes in, is that people don't see the risks of bubbles and in particular of imploding bubbles, and that gets them too optimistic. But then just as

you said, incredibly scared. So when you talk about the millennials, the millennials, of course, to the extent that they were involved in it, got really terrified and have now stayed out of the market. So talking about that balance of being overconfident and too overly terrified, where are we right now? I think we clearly are in the regime of overconfidence and extrapolation. You know, stock market is at very high levels, they volatility is very very cheap, credit spreads are very

very low, expectations are very optimistic. That are all the indicators of UH of financial markets being in a bubble. Now, the good news, just to finish this thought, is that, of course banks are in much better shape today than they were in two thou eight. So if this bubble starts UH imploding, I don't think we're going to see

the crisis that we saw ten years ago. But in that same vein, if indeed the banks are unduly blamed for the financial crisis one of the misconceptions, then do you believe that the policy responses were overdone and that they don't necessarily need all this additional capital, since perhaps they were not as responsible as many people believe. Well, actually,

I think quite the reverse. Um. It seems to me that to the extent that there was a policy here in two thousand and eight, it was that the policy makers were way too slow. They were way behind the curve. The way in which huge crisis like Liman occur is when banks UH lose a tremendous amount of money and when people think that there's ovency is threatened. When the economy or when the financial system in such a situation, the UH regulators and policymakers need to intervene fast, and

they need to intervene aggressively. And what happened in two thousand and eight is that policy was pretty passive until Lehman, and of course it was very active and very aggressive right after Lehman, but it was too late to save the U s economy. Yeah, I just want to go back to something you said, where you said we're definitely

in the overconfident part of the cycle. Some people would argue that you have so many daysayers out there threatening that we're going to see the downfall of markets, and they have been doing this for years that that is sort of a credible specter of threat that sort of keeps everything in check. Just quickly, here, we have a minute left. What's your what's your perspective on that. Look, it's one thing we know about bubbles is that it's impossible to call the top. All the evidence shows that.

And so right now I'm not telling you the markets are going to go down next month, or next year, or even in two years. They might keep going up for while. The point is that there are all the signs of a financial system in the state of quite extreme exuberance. Thank you so much for being with us.

Thank you, it's great to be here. Andre S. Lifers, Professor of economics at Harvard University in Boston, co author of a new book, A Crisis of Beliefs, Investor Psychology, and Financial Fragility, talking about some of the misconceptions of financial crises. So there has been a lot of discussion around investing with a lens toward gender, in other words, women and how much power they have in the workforce in a variety of different ways. Reading us now is

someone who's been working deeply on that. Alicia Levine, chief market strategist at bny Melon Investment Management. Thank you so much for being here. Before we get started, I know you are announcing a new fund that focuses on gender parity in the Japanese workforce, but can you just talk more broadly about the concept of women nomics. Well, thanks for having me here today. So this is actually very exciting because women omics is actually an an economic platform

of the Japanese government. In two thousand and thirteen, the Prime Minister san Zo Abe realized that there had to be socio economic changes in Japan in order to have economic growth. And that's because Japan has negative population growth, and in order to grow g g d P, you have to have a population that can work. And so with negative population growth, you can't grow g d P. So what does Japan have as a perfect resource, a highly educated population. Women were staying home and they weren't

going into the public sphere and working. And so women Omics, which was launched in two thousand and thirteen by the government, is a policy and economic and social policy to encourage women to work and go into the workforce. So that means everything from building daycare centers to rewarding companies who promote and hire women, to senior leadership, and so everybody has a stake in this now the dry Fast Japan Women Omics Fund. It's the first US thematic fund for

B N y Melon. Why was that the first one? So actually um B and y Melon Investment Management has launched eight thematic funds over the last seven years, but many in Europe and Asia. This is the first women on Mix fund that we're launching here in the US, and we think this is the perfect time for several reasons.

The first is that we have a four year track record, and as we know, institutional and on the retail side, clients wants to see a track record and evidence that the thematic investing is actually working, and in fact, we're very proud and happy with our manager's track record here. The other thing is that we just feel like this is the right moment for thematic funds and gender lends investing. With everything that's happening and the conversations that are happening daily,

we think there's a lot of interest. So it is the idea here to invest in companies that adhere to the sort of concepts of women omics. The most closely is that the idea so so the fund looks at companies through three different criteria. The first is do they hire and promote women into senior leadership? The second is is their consumer more likely to be a woman than a man? And third do they directly or indirectly benefit

from women omics? So here's my question, how do you sort of correlate performance with respect to company earnings with some of these policies, Because at the end of the day, people want to make money. That's true. So let's let's let's back up a little bit and talk about labor force participation. So it took twenty years for or labor the female labor force partition participation rate to go from

fifty to sixty percent, So that took twenty years. In five years too, from two thousand and thirteen to today, that rate went from six to sixty seven percent. It also means that the entire labor force is being driven by women entering the labor force, not by men. So if your consumer is a woman, you're more likely to

be a growth company, you're more likely to outperform. And it's kind of a simple topic, but you can actually draw the lines between women working having more economic power and the decisions they make with their capital and it's it's kind of a simple thing, but it works, and

it turns out that you can invest this way. In addition, it's UM companies which have or more women on executive committees or in senior leadership tend to outperform the Topics Index, So there is evidence that promotion of women to senior leadership does lead to company out performance. What would you measure the performance of the fund against? Since there is no specific benchmark, So so we use the Topics Index, which is uh an index of all the Japanese companies UM.

That index has over two thousand stocks right now. Our fund is a high conviction fund with fifty positions that are curated and and picked specifically on one of these three criteria, and also growth going forward and you know,

earnings going forward. One thing I'm wondering is how applicable this concept of women on mix is to say the US, because Japan is sort of uh its own story unto itself due to the population shrinkage, whereas a place like the United States has immigration, has a higher population rate.

So we think right now Japan is the place to actually test the gender lens thesis because it's the only place where you have an enormous change of women entering the workforce driven by the government, and it's measurable, it's

very hard. And other places where you already have very high labor force participation rates and closer gender parity in income, Japan still has a wage gap, a very wide wage gap, and as the government tries to get that to close, you can see that the spending power for women just increases. The criteria for the companies doesn't matter in terms of market cap size, it's all it's all sizes in our fund right now, it tends to be more skewed to

small cap. But for instance, we look at sectors all over the place, and one of the most interesting sectors were looking at is construction because you wouldn't think that this would be a sector that would benefit from women on However, they can't find labor. And as construction becomes more tech oriented and less heavy lifting, it turns out that the marginal marginal employee is a woman right now.

And so those are the kinds of decisions that we're looking and you can really only do it by fundamental analysis and knowing what you own. So we tend to be heavy in retail and services construction UM. But something for example as a as a UM, you know a when when when people are out of the house, you may need security services because there's nobody home. So security services are doing well because all of a sudden, the

women are not at home anymore. So things you wouldn't think of, but you can definitely draw the line A. Thank you very much for being with us and sharing this information. Alicia Levine is the chief strategist for a b N Y Melon, speaking about the Dreyfuss Japan equity women on mix fund. Thanks for listening to the Bloomberg p m L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox. I'm

on Twitter at Lisa Abramo. It's one before the podcast. You can always catch us worldwide on Bloomberg Radio m