Surveillance: Earnings Move Stocks, Not Washington, Doll Says

ordered him to do it. Moments later, the president's former campaign chairman, Paul Manifold was convicted on eight counts of tax and bank fraud charges. Joining us from Capitol Hill is bloombergs Kevin so really our chief Washington correspondent. Good morning to you, Kevin. On a busy day for Washington d see what has changed for the president. Well, there's an increasing pressure, Jonathan from Democrats to avoid the abuse

of pardoning power as it's being described. There's a legislation in the Democratic controlled Attorney General's Office in New York that would close what they argue is a loophole for the president's to pardon someone like Paul Manaport. Democrats up on Capitol Hill in the House and the Senate, urging Republicans to avoid the issue by by also joining them

and avoiding having the President part of them. Books for the President's next twenty four hours, he's said to have lunch with the Secretary of Defense and then have an awarding of the Medal of Honor later this afternoon. The President, while speaking last night in West Virginia, UH prior to that speech, criticized Paul Manafort. UH criticized UH Paul Manaford UH in saying I'm sorry defendant Paul Manaport, but made

no mention of Michael Cohen. So far, we haven't had really a fitial response from the President of the United States apart from that rally and heading to that rally, Kevin, what's expected in Washington, d C. What comes next? Well, when I seek the Republicans, they they have echoed the President in the sense that they've said that there is

no evidence of collusion. Polls suggests that the base of the Republican Party is still very much behind the President in terms of UH agreeing and echoing him when they say that the investigation of the witch hunt. In terms of what comes next, really it becomes whenever Bob Mueller

wraps up his investigation. And I spoke with several sources yesterday, Jonathan, who said to me that this is a win for the for the Special Council's investigation because of the court documents that you've got In the intro, which is essentially Michael Cohen says he was instructed by the only candidate he was working for at the time, Donald Trump, to

provide those touch money payments. Kevin Si really great to cant show me this morning on a busy morning for Kevin Sirillian everyone in Washington, d C. Joining us now from New York and place to say that. Kim Wallace joins us now. You're as your group managing Die Rector. He served in President Obama's administration as Assistant Secretary for Legislative Affairs at the Treasury Department. Kim, it's always great to get your insights. So let's begin with an extreme question.

Does any of this as it stands incrementally impact the odds of the president staying in the White House. Good morning, Jonathan. I think it's premature to take these disparate acts, although they are coming fast and furious, and extrapolate out that far. I would say this that the president is under pressure. That's unique for presidency. Is not only multitasking on an array of transformative policy agendas, he's also now got to worry about a few different legal processes under way that's

going to tax this staff. That will tax obviously his legal staff, but it will more importantly make more reticent to partisans on Capitol Hill to venture out on any other policy excursion. So it's it's less whether or not, in my view, whether or not impeachment is around the corner more or whether or not Washington has become a risk to market. Kim, do you just assume that Republicans, you know, is in a general statement, will do nothing

until the election. We're seventy six days away, and even with the historic moment that we saw yesterday afternoon, and folks, for those of uliciting worldwide in Radio London, was extraordinary to see John Farrell the split screen on on television of the two trials going on at the same time, just extraordinary. But within this, Kim, do the Republicans just keep doing what they're doing, which is maybe living in silence while they support the president? You know, time that

had been my working assumption up until yesterday. Seventy six days is a long time, and it depends, in my view, GOP behavior going into the election depends on public opinion. If the polls that we start getting in you know, five days, add on to the polls we've already seen where the issue of correct option the president is in double digit negatives net negatives. If that grows and worsens, it's going to make some of these thirty forty competitive races.

And the Republicans and am very nervous and likely they're going to seek some distance from the White House. That was Greg Valier's legally thought was this is about public opinion, less about all the nuances and the Bellway stuff. Mr. Really so, so let me ask you another question, Kim. Does any of this incrementally damaged Republicans mid term election prospects? You know, Jonathan, they weren't right going into this, and certainly this issue of corruption and the president's legal problems

have been long enough. It hasn't effected the basis support for him. What will What will note retrospectively is whether or not it hurt turnout in the base, whether that is what they're telling posters about their support for the president doesn't show up on November seven when they actually have to go to the polls and vote for establishment Republicans who are different from the president. Can you brought up the market? So I want to talk about them markets.

We caught up with Bob Dollar new VNSA Management a little bit earlier, and he brought up two extremely imperfect parallels, Nixon and Clinton, and both of those issues. And the way those episodes unfolded for the financial markets is that with Nixon, markets went down and with Clinson markets went up. And it was nothing really to do with any of

the individuals or any of the episodes specifically. It was about earnings and it was about growth and earnings and growth weren't good in the seven season, they were good in the nineties. Isn't that really the story here, Kim? How insulated markets will be is dependent on something else, completely separate from Washington d C. I think that's true a large part. The fundamentals always matter most to the markets.

But going back to Bob's nineteen seventy three point, in January of seventy three, the SMP cracked, that didn't regain its nominal value of one or two for seven and a half years, and that's because wars, energy embargoes, other supplied to problems and hyperinflation. So the problem with confidence in the White House being cracked is that the funder mentals have to go well for a long time to restore confidence in the markets. Kim Wellas to your expertise

with Treasury, where does Secretary Minution fit into this? He's been, I'm going to suggest, relatively quiet recently. Is he an important player in the next seventies six days? The Secretary might be tested in ways over the next seventy six days that he hasn't been in the previous seven quarters. Tom, I would it would seem to me that he would want to remain quiet so as not to change his behavior and therefore have markets notice that he's acting differently.

But he's certainly going to be more circumspect than what he's willing to say, whether it's about the dollar or whether it's about markets. Kim Wells, thank you so much with your raiser group this morning. Truly timely as as we all adjust what we saw to that question on Washington and the events of the last twenty four hours. Our interview of the day Robert ray is with us, which barely describes his work on any number of cases. The attraction of Robert Ray Uh is the former Uh

the head of the Office of Independent Council. This after Ken of Star and with Ken Starr is a number of cases he's been involved with. And all of this, Bob, came out of your work at Washington in Lee Law School, which to me is the most interesting law school in America. You went from Princeton down the Shenandoah Valley until this little little school, which is a jewel of law. What is Washington Lee. The history there in that law school

there tell you about the moment we witnessed yesterday. Well uniquely, Washington and Lee, of course came largely into existence and was furthered as the result of a gift by President Washington. It steeped in our history, so it travels all the way back to the Revolution and before, and of course it um It is the place what was then Washington College where Robert E. Lee went and became president of the college after the Appomattox and the end of the

Civil War. So last night, near twelve midnight, Lawfare published their long article and then they clear what happened yesterday has never happened in the Washington and Lee Republic. Was it that original what happened yesterday? It certainly was, um a significant moment. I'm not sure I would quite compare it to um that date in nineteen seventy four when a slew of the president's men, meaning Presidents Nixon's men

were Archibald Cox, you know, subject to to indictment. Um. But having said that, I mean, obviously you can certainly criticize, and fair criticism, and the fact that the president during the campaign and thereafter surrounded himself with at least in this instance, two very questionable figures, and it creates legal problems obviously for the president as a result, at least in part of the but particularly the Michael Cohen play, and whether or not, you know, as has been now reported,

whether there's more to come with regard to further implicating the president in connection with an alleged campaign finance violation. So let's talk about Michael Cummin. He's effectively all but named the president as having ordered him to commit a crime. Well, I'd be careful about effectively. I mean he he was directed by the candidate UH to make a payment. Whether you can turn that into the president knowingly and willfully violated the campaign finance laws is at least in my judgment,

altogether another question. And you know, to put it in layman's terms that you know, the jury is still out on that question. So the jury is still out Covins law. As you say, there could be some escalation risk embedded into this episode because he's gone on MSNBC and said that Covin has knowledge of Russian conspiracy. Let's talk about best practice. Then, how would you advise the president to

conduct himself over the coming months with this going on? Well, I I think I have said previously that I think the president's best strategy at this point is to ride

this thing out to a conclusion. I think it does raise the specter and the prospect of the significance of the midterm elections and whether or not the president would face impeachment in the event that the House of Representatives went to the Democrats, because they would have subpoena power, and there's already some indication that leading figures in the Democratic Party seemed to be hell bent and determined to turn this into an impeachment proceeding query whether that really

is where they want to go and whether or not campaign finance violations really if there's nothing more, and I guess we still don't know yet because Bob Muller has not concluded his instigation. But you know where this goes, obviously, is the sixty four thousand dollar questions. That basic question on violations of campaign finance rules before you are the president of the United States. Is that grants for impeachment? Well, it's obviously, at the end of the day, a political

judgment rather than a legal judgment. And it it is whatever the Congress of the United States decides. I mean, they get to decide whether or not under the Constitution that would constitute high crimes and misdemeanors. If some people would argue yes and some people would argue no, at the end of the day, what is it. It's whatever Congress decides it is. But remember also, and this is

I think that the lesson of history. If we go back to the beginning, there have only been impeachment proceedings twice against a president, the first Andrew Johnson and the second Bill Clinton, neither of which were successful. What people need to understand and remember is it is a partisan and political proceeding, but it requires under the constitution because

it's a very high bar. The only way a president can be removed and the result of an election overturned is if there is a conviction in the Senate, and because it is required under the Constitution, that would be a two thirds majority. The only way that's ever going to happen is if the party in power deserts the president and as a result of that, as was the case with Richard niction Um since although he was never impeached Um and removed from office, obviously he resigned before

that happened. But the reason he resigned is because it was a foregone conclusion that the Republican Party had abandoned him, and you know, facts being stubbornd stubborn things, Um, they came to the conclusion that, in fact, he was involved in a conspiracy to obstruct justice. You're just joining us vert ray with this prosecutor? Is what is Wikipedia as which barely describes as public service, including writing the actual reports on Lewinsky, Madison, Guarantee, on Mrs Clinton, Bernard Um

and others over the years. What does the media get wrong in their coverage? You are like Mr Mueller total business, total grizzled legal. It's a Now I assume it's a word processor, but you've got a quill in your hand and you're writing it out these actual documents. What's the media get wrong in its coverage? Well, there seems to be largely an overreaction to every single thing that comes out. I mean, we have to do that. Well, I guess

that's I mean, I guess that's right. But I mean, you know, a dispassionate prosecutor asked the question just be caused. For example, Michael Cohen says that Donald Trump directed him to make a campaign contribution, begs the question about whether or not Donald Trump was knowingly in violation of the campaign finance laws. I mean, one you'd think about some very relevant considerations, not the least of which is, Hello, Michael Cohen was Donald Trump's lawyer. Donald Trump has an

advice of counsel defense. I mean, you know, I assume his defense is going to be Listen, I asked Michael Cohen to take care of this, but I never told Michael Cohen to violate the law. In any event, I'm

not a lawyer. He is. I depend on his legal advice, and I depend and relied on the fact that he wouldn't be engaged in a campaign finance violence points out is his farm on nuanced and complex, And I think people appreciate just because Michael Cohen has committed a crime and it admitted he's committed a crime and said the president was the person that ordered him to do whatever he has done, does not mean necessarily the president has committed not the same thing as ordering him to commit

a federal felony. So look, I don't know what the conversations were. I think I would be surprised if the conversations are what I guess the media seems to speculate automatically. Well, she's not means he has the keys to the kingdom and he knows that Donald Grump is a felon that

Bob Mower's office would already have known that. And if they already knew that and had that was surprising to me that they would have a let go of the prosecution by giving it to the Southern District of New York and be um if if they had that information, then why didn't they sign them up to a cooperation agreement? Which is not what happened yesterday in court so again, I mean I don't need to you know, spread uh, you know, a big blanket of cold water over all

of this. But I guess my point is is that there's a bit of an overreaction to its significance. I'm not saying it's insignificant. It is significant. When two members of the president's inner circle have now been found guilty or by a jury and or pleaded guilty to federal felonies. That's not an insignificant development. One final question in your experience, how do these discussions change when it's about you're not going to be with your kids or your kids are

going to get involved? When families are drawn into this, Well, that's the other missing piece to all of this, in addition to the overreaction. You know, there's a human story here that gets completely lost. Tell us about that. Let me tell let me tell you how it feels to be on the receiving end of the full weight and authority of the United States government and the United State It's Justice Department zeroed in and targeted on your head to have you brought to justice. That is a a

harrowing moment. I used to say, I would never wish a special counsel or independent Council investigation on my worst enemy because of the frightening power that is exercised in order to hold people to justice. Now, you know, that's the beauty of this country is that we do hold people accountable. But you know, taking a just a pause and a deep breath to reflect on how difficult that

must be. The one thing that will be that will be true here that both Michael Cohen and Paul man Offort will face now quickly over the next several weeks, will be whether or not they've got anything further to give, because if there's something there to give, it will be gotten as the result of this pressure. You gotta leave it there, Robert Ray, thank you so much. Former Prosecutor John.

I want you to bring in our next esteem guests, but I just want to say that he and many others need a massive and subtle victory lap for not one saying stay in the market, have courage, but in this great bull market, just time after time after time, it's been extraordinary run, staying long and strong. Bubb Doll moving asset management portfolio manager. He joins us. Now, well, great to catch up. It's a record run for the

bull market, depending on how you measure it. It's a record high and yesterday's session and it's still the most unloved bull market in history. Why Bob, Yes, there are so many skeptics on things, as you well know, and bull markets love to climb those walls of worry. And the list of reasons to worry it is long and seems to be increasing. Oh, you knows the economy running out of eam, Is the bullmarket too old? Is the

president not going to be able to govern? And the list goes on and on and on and in the meantime, the economy's left I checked really good and earnings are even better, and that's what move stocks. Last year, the most often question, the question I got was with Washington d C such a mess? How can the stock market be so good? And my response, as you answered your own question, Washington d C does not move stocks. Earnings move stocks. Yes, DC does things from a policy standpoint

that can affect earnings over the long term. But but you know that earning story, the earning story right now is pretty good, and it's juced by a tax cut, juice by a tax cut, and you just wonder how sustainable it is do you take some optimism by how

good top line growth is being Bob. Yes, we estimate of the call it earnings growth from the first half of the year, about a third of it has come from extraordinarily top top line growth, which means the US economy is doing well in most pockets and outside the U s well, It's fraid a little bit on the edges is pretty good as well. And so the multinationals have some revenue growth. Revenue growth is awesome. And you

mentioned the tax bill. Thank goodness, all this political noises coming after that tax bill is an effect, and that's the stimulus that we will enjoy no matter how these proceedings go. Where's your favorite sector? I mean, if if we're if we're rich, I got to get in the market. I'm a sector generator. What's the sector I want to be in? Right now? I will answer your question, but let me put a theme on the table, Tom, if I might, that I think is even more important owning companies.

As a US investor, they get most their earnings from inside the US. Therefore, de emphasizing multinational earnings has had major tales tail winds the text bill, relative economic and earnest growth, the trade issue currency. All of them have been supportive of that theme. So question where do you find those names? A lot of healthcare names, insurers, etcetera, tend to be more domestic. The retailers here's target with

another wonderful earnings report. The retailers mostly domestic industry. They're the kind of places I would partner money. Where are you seeing with use of money right now? I mean, you know, we came out of this and there were some real skeptics about investment and what was this going to be? A share buy back and dividend growth? What's the actual numbers that you calculate with Nvine every day? So so we're looking at h We're looking at earnings

growth peaking, but earnings still being strong. I mean a lot of people earnings growth peaked. There for the stock market's got to have trouble. No, no, no, no no. If we go from plus twenty five to minus two, yeah, the stock market have trouble. We're going from plus twenty five to plus eight team plus twenty. What are they doing with the cash. They're taking the cash and reinvest

in their business. Capital expenditures up fifteen depending what's hereies you look at and yes they're buying backstock, and yes they're raising dividends. Because cash flow is so strong they can do all the above, and M and A buying the company down the street. There are lots of great usay cash when this is strong. And if we go to William Priest and free cash flow in use of cash, shareholder yield, what's my yield on the market January one? I mean, if you look at use of cash plus

cash dividends, what is it? Four or five in one? Four to five is our guests um. But dividends are moving up because of the cash flow. Share buy backs have increased, but as the percentage of the capitalization not as much. Thank goodness, corporate CEOs are more optimistic on their business and more willing to reinvest. So we'll take a dividend increase or a share buy back in a company that's net free cash flow positive, but we much

prefer reinvest in your business. Show me you're investing, your improve your return on equity, where turn on assets, returning investment, and your growthery. Bob, you and I talked about this before. Let's talk about the yield curve. Two stands is just broken down today two new cycle tights. So the spread between the two you and the tenure and the treasury market around about twenty two basis points. We dropped below

that very briefly in today's session. How do you communicate to clients that they shouldn't worry yet, because historically, when the yield curve narrows, it is because the economy is doing well, earnings are doing the well, and the fit is normalizing. Right, it's usually a period when stocks do extraordinarily well. The yield curve began to narrow, of note about a year ago, and if I sold stocks based

on that, I've been made a mistake. The yellow light doesn't go on for me until the yield curve actually inverts. And yellow doesn't mean I run, It just SEMs I have a bunch of green flags, and I would add one yellow flag in the mix of all the good things I look at. So watch it carefully. It's it's not a positive for the stock market, but not yet.

An if you know Bob, you know what I've known each other for years, explained to those younger how original this cycle is and how you can stay invested because John Farrell and I are positive. On Friday, there will

be gloom, essays Galore. Yes, there will be um. I guess to keep it simple, Tom, if you told if you dropped me on the planet and told me that real GDP in the US was three, the nominal GDP in the US was five, the unemployment rate was below four, and wager rate inflation was two points something, I'd say, Wow, either you're lying to me or this is an unbelievable

city circus. What I gotta stop the show, folks. What Mr Doll just said there is so important, John just it's incredibly important to take all the noise away that we all live with. Like A C. Mullon and Juventus. You take the noise away, the noise and Bob Bob nails it, Bob Dove. We've also got to say thank you to you, Bob, thank you for joining the show today. Call us when you go negative, portfolio manager, We'll be talking to Bob long before it turns negative. John, We've

got to do a surveilling's correction. Phil saves the day with Mark McCormick of TD Securities looking for Capital's maple leafs. In January. Uh, it's the Scotia Arena. Scotia wait a second way, Scotia Bank is you is you pulled me out on air about calling at the stadium the garden. It's the garden, garden. But is it the garden or not? It will always be the maple leaf it is. It is the Montreal Forum, right, the maple leaf garden. Maple leaf garden. But it's sponsored now by Scotia. Bas is

the most complex correction it is. This is what that's millions of dollars are involved. It's not even a correction. They don't they do this in Chicago. They don't. They don't. You know, it's it's it's the house of Stanma. Someone email you annoyed? Phil was annoyed? Yeah, Phil, something an email also annoyed? Is Diane Swank Chicago. No, no, come on, Diane Swank knows how sad I am. And we covered it a few weeks ago on the passing Diane of

the giant of a Chicago black Hawk, Stan Makeita. He meant a lot to the city of Chicago, didn't he? He absolutely did. In fact, you know, I'm not a huge hockey fanel though I come from Detroit originally, as they can imagine the hockey there as well. But one of my colleagues a very long time ago, and all my Mac equipment played a hockey puck and I called him up and I said, you know it's still there as my screen saver is the hockey stick with the

hockey puck. And he laughed and he said, that's just because you just don't know how to remove it. Because I'm in Chicago. Particularly Stanmakeita with his contribute to the deaf community across Illinois in America, Diane Swark, we're looking at an economy that is buoyant. John and Ivor to interview after interview today, saying it is about the economy. Where are we migrating to a three percent run rate

or will it be lower? Well, we'll see I think close to three percent in the second half the year. We'll move down a bit as we move into one of the big hurdles out there is some of the data that's coming out today and to see what's going on with housing. Housing has been a disappointment. We don't want it to be the coal the canary in the

coal mine. It has been a laggered We've seen a lot of foreign investment pull out of some of the major cities, which may be an opportunity for millennials trying to buy and unable to get to some of the price points that we've been seeing out there. But it is something that's been a rocky road is the housing market. That said, we still have momentum going into The other question is what's going to happen on the trade front. We've seen some cooling of heads on the escalation of

trade traiffs. We hope that continues. That's very, very important because uncertainty regarding terrorists has already taken a toll on some plants and retailers, warehouses, and transportation industry plans in terms of their twenty nineteen spend budgets on what they want to invest in the U. S. Economy. And at the moment, as you point out that the fundamentals of the U. S. Economy are really rather strong, and they're set to say strong at least through the end of

this year, the politics is becoming much more complex. And I'm just wondering how you think about the politics right now. What is the channel that the politics can feed through and infect the strength of this U. S. Economy? Do you think there is one? Certainly there is. I mean, politics is policy, the politics of uncertainty. That's one of the things that we're grappling with right now. I think the economy um is very robust. We're getting an extra

boost from fiscal steamers. We may have to pay for that later on, in fact, they think we will. But I never begrudge us a great economy or a better economy, and that's something that we have to embrace. What I worry about is the uncertainty surrounding what comes next, un certainty about where policy will go, who will make the decisions about policy, how those decisions will be executed. All of those things do play into long term plans by companies.

And we're also short term oriented in terms of what happens quarter to quarter. But over the longer term, we have a world in which we've seen many populist leaders rise. People look at Venezuela today, a true mass with a populist leader, and those leaders tend to think the invisible hand in the market belongs to them, and they choose

winners and losers. And the more that we see leaders, whether it be in the developed or the developing world, pick winners and losers in an economy, it undermines efficiency and undermines those bets we have to make going forward, right, Diane, to get to our next section is Jackson All will have value this year. Jackson All always has value. I love Jackson Hall. I don't have to regoing there this year, um,

but I think it's an amazing place. It's one of the few places where you see academics, you see policymakers and the press altogether, and the opinions that go around and the thought that comes out of that kind of unique sort of mingling of thought is really important, just on the trails and things like that. This year, I think the most important thing is actually to make less news than more news. J Powell, as we know, is sort of feeling little pressure right now, and now we

have to get him. He's gonna he's going to justify a rate high in September and later for one in December. This is classic. We're gonna come back with Diane Swank of Grant Thornton John. I love it. Now. It's live or dead checks at all. Are you upset you're not going this year? I'm always upset. Is exactly as Dr Swank said. The idea, the idea that you just calm down and mingle is, I've had some treasured moments, Michael. We're going to catch out with mine. I believe we will. Dan,

thank you so much. Dan swank with us today with Grant Thornton and fiery discussion there on too many themes at the moment. What's some wonderful folks about what Mr Rubinstein is doing with peer to peer. It's not just easy lay up conversations right now anything. For example with Tim Cook of Apple, well, you know what, it's one big victory lap and that is not the case of your guests this week. I was amazed, David looking at United Airlines stock the terrific performance over the last decade.

And yet for Mr Muni has Oscar mullions. This has been a fractious era, hasn't it. It's been difficult for him for a couple of reasons. When he first took over the job, within a month he had a heart attack. He then had a heart transplant at the age of fifty two. So he's a vegan, a marathon runner, and all of a sudden he has a heart attack, and not only a heart attack, a heart transplant. A week after the transplant he's back at work and uh, so he had to overcome that, but he also had the

challenges of of of people being dragged off. Someone being dragged off the airline. You'll probably remember that, and that was a very unfortunate incident that they now apologized for and corrected your procedures. And also they had some animals die on on board and they corrected procedures for that. So um, he's but the stock has done well, and as you know, all airlines have done reasonable, but United's done particularly now. And I think Oscar is a really,

really good manager. He came from a complicated environment. He was one of eight children, grew up in southern California, was a long haired hippie um surfer by his own description, got into Harvard but didn't think he would fit in there in state at USC and the Pepperdine Law School eventually, and then worked his way up at CSX and other places. But then when an emergency of arose at United Airlines, say came in as a board member to be the CEO,

and he had his health challenges. David, I can't wait to hear this interview. I'm particularly interested, uh in what Mr Mineo's view on support animals is sort of this trend where everybody and their mom is bringing a peacock on board to sit next to them and provide them comfort.

What do you say about that? Yes, he describes what he describes how um many people are used to the idea of bring a support animal on who might be a dog, and some have brought on other animals, and one person brought on a peacock, which is hard to see how that supports you. But the one that he describes is probably the stroller brook. The camel's back is an emotional support animal had to have its own emotional

support animal on the plane. So the person brought on it an emotional support animal, and that animal had its own emotional support animal. At that point they realized they had a change of rule. This is amazing, you know, And just so everybody knows, I've never done this stunt. That Bill loves to travel. But the problem is Bloomberg has me back Lisa in deep economy on United Airlines and that Bill will only go up with Rubinstein in first class. Well, I love that. I love the idea

of that. I mean, I guess, David, I haven't you know, I've never actually seen an emotional support animal need its own emotional support animal. But I guess it's in a growing problem in our country. Yeah, well, I mean I've heard of actually animals being put on prozac. Actually, Um, I knew of a couple who's dog was somewhat depressed and they put the dog on prozac. So it's a logical stuff to have Sie here to something. You're Maine, all right, David, I'm really curious to know, I mean,

going forward, what the big challenges are for him? And uh, did he talk at all about what he's doing going forward or has he done? Is he just enjoying the sweet life? Well, the challenges that all airlines have is that they they really depend on the price of oil being a big factor. And airlines have made a lot of money in recent years because of oil sent them low and therefore gas prices and low. As oil prices

come up, it's going to be more challenging. It's interesting to think about this, all the things that airlines do to get you to go on their planes. Um, you know, Miles the bologist that you give you a mologe, clubs of nice lounges, they might give you better food. In the end. The only thing that really matters, he says, is price and availability of time or which. All the other things are nice, but in the end, price is

the most important thing, and then you your availability. So price is going to be a factor for all these airlines because the soil prices go up, they don't have the ability to really cost that much. It's a bit of a challenge, David. I've got to ask this question of historic import and I say this folks with exceptional interests in the fact that Mr Rubinstein one in two years beyond Watergate, served as Chief council for the United

States Senate Judiciary Committees Subcommittee on Constitutional Amendments. David, that means you and I have a collective memory of other challenges for the nations. Simply, Attorney Rubinstein, your thoughts on what this nation observed yesterday afternoon. Well, it was a surprise to many people that both of these events happen at the same time. Um as we learned from Watergate

other complicated things in our country's history. It's hard to make a judgment on day one if that's what you think is going to happen on day one doesn't actually happen on you know, through thirty days out or sixty days out, so I wouldn't pre judge what's going to happen, but it's clearly uh an episode of a teaching moment for younger people who haven't lived through these kind of things.

And I just wouldn't rush the judgment about what's going to happen, but it's clearly something that will have an impact on the way our government operates. I just don't know what the outcome will be, and I hope it will be the best for everybody. Well, David, can you connect the dots from Washington, d C? To Wall Street? Given your experience in Carlisle and and as as a long time investor, you know, how when does it sort

to filter down to the economics of this country? Well, why does this become more than just Washington d C. Noise?

As long as the stock market isn't pretty good shape, As long as the economy is growing at the pace it is, I don't think you're going to see big political problems in Washington, d C. Um if the stock market would go down, the economy goes into a slower growth or even low growth no growth mode, then you'll see the politicians in Washington, I think doing different things but right now, the economy is pretty good and we're growing in a bigger clip than people expected. So I

just don't think you see it right now. But you know, think things will change if if the economy falls before the let's say, the November elections, they don't have some impact and elections, but the economy is as good as it is now, I'm not sure they'll have the impact the events of Yes, you have the impact that that a weak economy would have. David, then bring us forward to what that generation would be doing in Washington now, And I think of the Great ab of Connecticut. I mean,

they were. It was a different Capitol Hill during Watergate and after Watergate, wasn't it. Yes? And then when I worked in Capitol Hill in the late mid seventies, Democrats and Republicans did talk to each other, and Democrats and Republicans did work to get legislation together. Um, there have been some signs of progress in that regard, though lately, as you probably know, the appropriations process seems to be working.

We haven't had a full set of appropriations bills passed in the regular order for about fifteen years or so. Now it looks as if Congress might actually pass all the appropriation bills on time. That would be good. I started a program a few years ago, very modest and impact probably on what I'm talking about. Democrats and Republicans together.

I host a dinner on Capitol Hill once a month and bringing in a great American story and like Darris Karrent's Goodwinner, David McCullough interviewed them in front of members of Congress, and members of Congress used that as a way to socialize people from the opposite party. And they tell me that today they are they never get a chance to talk to you from the opposite party because this situation is not very good for that now. And this has no press there and no media, there's no fundraising.

So a lot of different things are being done in Washington, kind of thing the parties together. Hopefully we'll be able to have a more bipartisan approach in future years. David Rubinstein, thank you so much for joining us today from his travels in Switzerland. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom

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