Surveillance: NATO Is A Transatlantic Bridge With Stavridis

whether it really disrupts this f O WEMC. I think it's definitely disrupting for the f MC um or all these noise, all these rumors. Again, I'm on the same page as you are in that I don't subscribe to these rumors. I think the the the FMC, the Federal Reserve has maintained it's it's full independence and autonomy in

making all decisions. UM. One may has to question the timing of of the shift in what actually changed between December and January so that we have such a massive shift, because in December we already had a collapse in market. But nonetheless, you know, I'm still in the camp that the fed UM is operating in a total independent environment. But as you said, this is definitely not helpful and it is putting a lot of pressure on them now

in terms of the fifty basis points cards. Look at what I think is interesting is that we find ourselves free of us and potentially a lot of other people that are actually discussing that the US administration is the one that's looking for a fifty basis points card. And I find this absurd. This is the job of the Federal Reserve, that's the job of the Central Bank, and the US Administration has no business into contemplating hikes or cuts in in in the federal funds rate. Right, But

so as Kevin wars somewhat power. Like with Randall Crassner, appointed a zillion years ago, he got some real criticism on his confirmation, And I would suggest the zeitgeist as Governor worsh delivered the goods over his tenure, that he did a pretty darn good job. Given that the theories that he was younger and experienced and Morgan Evil Morgan Stanley and all that. Why would we think anyone appointed

by the president other than a complete homer. But why would we think Chairman worsh would do what the President wants. But I don't think this is the issue. I think the issues that it creates a precedent if something happens that I think the main problem is that it has never happened, and I'm not entirely sure that the legalities of it if it can actually happen. But let's say that it does happen, and and personally I think it's a very very low probability event, but if it does,

it creates a really ugly president. John I've got it interrupt. I believe right now I'm seeing live Prime Minister May and Mr Corbyn and they're going out at John is me as a foreigner, I've never seen it. Primenster's questions taking place in the house apart really going out. We'll try and bring you some highlights of that a little bit later. I think Vasilios, this issue is largely been resolved. I think the administration recognizes now that they can't get

rid of Chairman Poal. What I worry about is that the President is getting bad advice, and he's getting bad advice from those around him, and I think he realizes he's had some bad advice from Treasury Secretary Stephen Manuchin on Chairman Powell. These are the individuals in and around the President suggesting who he should nominate for the f m C. He chose Chairman pal on the advice of Secretary Manu Chin Chairman Poal was never going to be

the Federal Reserve chairman that the President wants it. And let's be clear, if Kevin Walsh was the second suggestion for the President of the United States, Kevin Walsh was never going to be the chairman of the Federal Reserve the President wants it. Kevin Walsh is not the uber dove of this cycle. It's no way, shape or food.

Which makes me one that why aren't they making suggestions to the president that a palatable for the Senate and ultimately have the policies that the president would like Once he sits down, she sits down, German Card in the chair, why not Sherman Card long, He's earned it with public service. Honestly, I don't know. I don't have the answer to this, and I have to say that, you know, I've been puzzled by a lot of things that this administration is

going through right now. I think I get the sense. However, and irrespective of specific names um for that could be nominated later for FED and everything. I think the administration right now is getting the feeling, is starting to get it that the fiscal stimulus that it was an active with, in my view, was totally untimely because it was implemented at the full employment exactly when the economy was firing

at all cylinders is going to start fading. These impult physical impulses are going to start fading and potentially getting war it about this because we're getting closer to the next elections, and then they are trying to come up with potential suggestions or discussions that will be able to cushion the blow that is going to come from waning physical impulses. This has been wonderful for Silius Jannakis. Thank

you so much. It's so feel very strong, and thank you so much at Lombard the Ft reporting that the US and China have resolved most of the key issues standing in the way of a deal, with the exception of two sticking points. One is the fate of existing tariffs and the second one, and maybe these two are combined, is the enforcement of any perspective trade deal. So that's

hanging over the market in a good way today. Together with the better than expected services data, I believe that we can get the thoughts now if Jane Furley of Rabba Bank she's the head of FX strategy and joins us from London for more Jane, the mood music is better this Wednesday morning. Is that all it is mood music or is it something better than that? You know? I agree. I think I think ned movement music is a good sign because certainly it does seem that risk

on has developed over the course of the week. We did, of course at the start of the we kept better manufacturing per marge for both China and the US, and I think that's at the market off on a positive turn. And of course the FT report about the the trade deal is almost done is it's just if you like the icing on the cake. But I don't think we need to scrape too far below that to see something a little more ominous, and that is of course related

to get the slower world growth story. Now, at the end of last week, that was the one that was rising to the surface and spooking investor sentiment, and I think that will probably happen again. It needs but potentially some bad news on the trade fronts and bad and I might news and the market is going to be fearful of this all over again. Are you in the camp Chayne where you believe that if we get a trade deal, it unlocks some of the global growth concerns,

does it? Well? I mean, it certainly would be good news to have some sort of trade deals that I think an awful lot of people are skeptical as to whether or not this is the end of the story. I mean, we know that the last parts of this trade deal are probably the ones that are most difficult to negotiate. We know that they're probably regarding how the US is possibly going to police some of the elements related to intellectual property rights, etcetera that that it wants

China to agree to. How is that going to happen without China saying we'll look, you know, we're not going to give up any sovereignty here. So it is going to be tough, and I would expect issues related to that are going to bubble up to the surface again over the next few years. My experience with trade deals, including more lateral trade deals, Jane Folly, is the entire exercise is to save face based on what you've learned, not only the ft story but everything else. Are we

in a position we're both parties quote unquote safe face. Well, again, I think China has been over the last month and say, quite concerned that they would have some sort of ceremony between the two presidents of the US and China, and then Trump would perhaps walk out in the way that he did in Vietnam. Hence the news that China just wants a signing ceremony. They want all the work to be done, first of all, because that would not be you know, a collection for China. So there is there

are certain concerns with respect to that. But certainly if they did get something across the finish line, yes it would say face for both. That dependent on how of course it was. But it doesn't mean to say it's the end of the story. So what's your dollar call in there? If we get to some form of face

saving solution, what bank dollar call? Well, this is quite interesting, you know, because I think the dollar has certain again you look at it today that the dollar has has fallen a little bit, and then and the dollar seems to be behaving as as a safe haven. So when the risk epitade is good. There is a tendency for investors to move into risky a current, you say, and away from the safe havens. And and that seems to be meaning that sometimes when there is good news, the

dollar isn't isn't faring so well. That said, you know, we do think that over the next few months there will be concerned about world growth, that they are there, that they are very real m, and there will be real concerns about some other gen economy. Is that the euro, I think is on a weak footing. So we are generally speaking quite constructive about the outlook for the dollar, not because of the US fundamentals, to say, but because

of concerns about fundamental elsewhere. Well, Jen, let's talk about how you plug in that view into G ten. Right now, it's been really difficult to get a weaker euro. Your dollar has been stuck in this really tight, narrow trading range, and I'm trying to work out how we break out to the downside because we have thrown everything at the Euro and it's still pretty resilient in the face of

it all. Well, you say that, but of course that the ure really did under play the majority or certainly the market consensus expectations stance over the last year and a bit year a year in a quarter. I mean, if we go back, you know, twelve months we were trading one and now we're down at one twelve um and an awful lot of people in the market and anticipated that we will be back in at one age twenty by the end of last year. So the euro,

you know, has softened. And of course the reason why the Euro has softened is because the performance of the Eurozone economy has been disappointing. We had that week number for Germany into three. Many people in many economists told us that we would see a rebound. We haven't seen that rebound. Germany, of course, is a massive export are very very sensitive to slow down in world grows and

that certainly does seem to be creeping through. Another really bad number earlier in the week for its for German final manufacturing p M I. So the Euro, I think is is really on the back foot. And of course

we have the May European elections. There could be uh the scope here for the far left of the far right to do relatively well in these European that they're all really really good points but a big move Law and euro Dalla were last spring when we came down from the one twenties down to sub one twenty in and around one fifteen. But since November we've tested one twelve. That's been the line in the sund three times and can't sustainably break below one twelve. So what's going to

do it well? Again? You know, I think, I mean, I do see that there is the potential for us to go to to one ten. But again, in the relects of what you've just been saying, this range trading, that would be quite a sizable movie. I think it might be the politics, and I think it might be the UCB. We have a situation where the US may need to add additional liquidity because of the European aspect and against some some potential for some wobbly politics in

the Eurozone too. Got a there in mine that begs it is something that doesn't reflect well on the eurozonal the EU either. Jane. I just got a brilliant idea for John Farrell's new property on Blueberg television parody watch. Do you want to do a show called parity watch? You should do? Can you imagine how boring that would be for the last couple of years. Haven't we been my parity watch since? But we're gonna get it in one ten and we're all gonna go hysterical over parody Watch.

You know, the notes will come. I don't know if they're gonna come from Jane Foley, but I'm just saying the notes will probably count there. Jane Folly, thank you so much a short notice. I didn't get to Sterling, but greatly greatly appreciate that as well. This is a joy, and I think I could state for all Americans in uniform, not me, but those that have served this nation a special moment that on the seventieth anniversary of NATO, we

have the advantage of James Travinus. You know him from Tells Fletcher School, his wonderful books, uh and also now at Carlisle Group. But of course he was a former Supreme Commander for NATO. Admiral, wonderful to have you with us to say good morning, Good morning Tom, big week for NATO, Big week for NATO. Let us go back to a president who supported NATO, and that would be H. S. Truman. April fourth, nineteen, The Echoes of World War Two we're in that room at the Oval Office. There was hunger

in Europe. The Martiall Plan was gearing up. It was I'm going to call it pre Korea is an amateur. What was a sweat factor day one for NATO? NATO had, right from the beginning of Crystal Clear mission which was to keep the Soviet Union out, to keep the Americans in. Because Tom, you'll remember in the nineteen twenties, after World War One, we walked away from Europe. We failed to join the League of Nations that led to the Second

World War. So a principal goal of NATO was not only keeping the Soviets out, but keeping the Americans in. Those were the two sweat factors. And also subliminally, people wanted to keep the Germans down. They were worried about a re arming of Germany. So there was sort of three big reasons play and they all came through. And

then Charles de gal six he says, France out. I remember that uproar in junior high or high school whatever us uh, Jim, But but the president, President Trump maybe would like out to explain to President Trump right now listening why de Caen wanted out and how did America react to that. Charles de Gaull wanted out because of his immense personal ego that he felt was being subliminated

by the continuing presence of France and the Alliance. And once de gall passed from the scene, France reintegrated with NATO. As you know, in terms of why we should stay in its excellent value proposition for the United States, those Europeans spent three hundred billion dollars a year on d sense. That's the second largest defense budget in the world. Tom, It's the larger than that of Russia and China combined. And so should they get up to the two person

of GDP, Yes they should. The President should continue to hit them on that, but overall it's good value for a dollar. Ambassador Burns an Ambassador Loot in a study for Harvard writing in the Washington Post, I believe it was yesterday, Really go after this president of the United States. What would you advise the president is his newly minted secretary Defense As a joke, folks, what would you advise a new president of the United States about writing his

message on NATO? I would tell him it's okay to push the Europeans and you want to kind of bend them a little bit to get them to spend a bit more, but you don't want to break this relationship. And boy, we think of it as a transatlantic bridge, Tom, and you kind of hear it creaking a little bit. Given some of the tone that's come out of President Trump, he could alter his tone, uh, and still get the benefits of NATO. That would be the approach to take.

How are Americans treated at NATO headquarters? You walked in the door one day with a lot of fancy brass on your shoulders. How are are Americans different at the NATO headquarters than those of Europe No? Uh. I would say that the Americans are viewed as the leaders of the alliance, but not the dominant nation in the alliance. It's a very collegial atmosphere, as between all the ambassadors from the twenty nine nations and from all the senior four star officers who were there as well. Um. I

had wonderful times with my European colleagues. They remain among my closest friends today and I think that level of collegiality is what the alliance is all about. And that's why the Europeans were willing to come with us to Afghanistan and fight after and eleven. The only time the NATO Alliance has energized Article five. An attack on one is an attack on all. Was after nine eleven. They came and fought and died with us in Afghanistan. Does

President Trump know that? I don't think he fully appreciates that. And I'll put a personal note on it, Tom, when I was Supreme Allied Commander, I signed over two thousand letters of condolence to young men and women who died under my command in Afghanistan, over a third or from Europe. That's an important point, to say the least. James de Vitis. Last week I was in front of college kids and I stopped the show two thirds of the way through when I said, look, I'm giving you all these books

to reading folks. You know, am I shut up and read this, shut up and read this. And I mentioned your leader's bookshelf. NATO is falling apart, the Transatlantic Alliance is falling apart. Which book does the President of United States? Which book does Nick Burns? Which book does Tom Kane? Which book to our listeners need to read on this magic of the Atlantic Charter and all of the North Atlantic.

I would say the right answer is the Second World War by Winston Churchill, because it is the ultimate cautionary tale for what happens when we don't work together as allies. And it's in the end a very reaffirming book about the work of the Alliance as it came together in the aftermath to World War Brilli Alliance exists, so we don't do that again. Was that shaped by the fascinatings? And this is an h. Larabie book, folks, on the

on the generals and admirals of World War Two? But was was Churchill's book shaped on the Battle of Fdr with the assistance of Marshall. Dealing with Churchill and then say dealing with Montgomery, just the the huge arguments that were in the middle of this war where everybody was on the same side. Indeed, and here I'm just going to draw a line under one admiral and one general.

The admiral was Admiral Leahy, who was the President's chief of Staff, five star fleet admiral, and the general, of course was George Marshall, effectively the chairman of the Joint Chiefs as we understand it today, those two were the steady, calm, quiet presence in Washington that helped forge the friendship and the alliance that ultimately ultimately carried the day between FDR and Churchill, which was the most important relationship in winning World War Two. James T. Venas, thank you so much.

This is a joy we've you know, within the debate, any given debate, there's always one side. It's easier to get, i would say, and it's easy to get euroskeptics. Brexiteers is one phrase. Roland Road is a little different. He is in the public relations business, but that barely describes his commitment to the fabric of London and actually doing

things instead of talking about it. Mr Rudd has an affiliation with one of the jewels of London, the Royal Opera House, where in a today rather you will see Barnie. Will you be going to the opera tonight? Mr Rudd, Well, I'm not actually going tonight. I've got a dinner with them very cent piece, where we're going to continue the great discussion that you were just touching on the fabric of London. If the Brexiteers win, if they push Prime Minister May and Mr Corbin aside and we go through

the tumult that we've we're all exhausted from. Will your London change, Well, it will undoubtedly change. I mean, if we go for a Brexit deal where we're closely aligned to the European Union, it will be you know, incremental slow,

but a clear decline over a decade. Whereas if we go for this, you know, for some reason we crashed out, which I really don't think will happen now, but if we did, it would be very quick and very brutal, and we would see the difference within and it would be quite catastrophic I think for our city and country. The Times of London has that Labor MP who writes without his name. I think it's almost every day in the in the newspaper, and he is a remain Labor

right whose constituents are Leave people. How prevalent is that would you say across the Great Britain? I mean, are there a lot of MPs talk and remain where their constituents are talking? Lee? Yeah, I wouldn't say there are a lot. I can think of quite a few Labor mtes who are basically remainers, who represent Leave constituencies and have steadfastly refused to support putting the any potential deal back to the people. So it works the other way

as well. But I think what you've seen recently is Parliament really reaffirming its its authority and really ensuring that ultimately it will have the final say, and even the Prime Minister, you know, last night when she made her decision to cut a drift the sort of far right of the party known as the e r G, the European Reformed Group UM, but she made clear that if she can't do a deal with Corbyn, that's plan A. Plan B is literally to allow Parliament to the side

in a sort of alternative vote system. So Roland, as we get down to the final days, although they're very well, maybe a further extension, what is the view of the EU right now? Do you think they're in more of a mood to do some type of deal, to be a little bit more flexible to help the UK. Long. I think they are, But I think you have to divide it. So if you take Germany and someone like Donald Tusk present uh, you know, or of the Council, If if you take them, then they are very much

UM in the basis of trying to help us. They would like to see us ask for long extension, so we could then put anything agreed back to the people. Um and of course you have to remember, you know with Germany they sell us much more than we sell them. If you take France, where we basically sell them by rough the same from each other, then President mcon has

taken a far tougher line on Britain. I would just add one rider to that, which is if we were clear with him that we wanted a longer extension because the plan was to allow the people to have a final say, and that there was an option of either remaining or revoking Article fifty, so we in effect remained, then I think he becomes our friend because he would then be able to say, look, here's a country that dabbled with this sort of populism and looked over the

abyss and decided, you know what, it's not worth it and came back. So at that point he'd be our friend. But before that point, in terms of if we tried to get a small extension, he won't agree to that. So Roland, you mentioned perhaps putting this whole issue quote unquote back to the people. What do you think is most likely in la scenario, would it be a second referendum or would it be you know, a new election. Well you can see you can see the possibility of both.

So you could have an election and out of from the election you then lead into having another um public vote, but of course in a referendum. But of course that the problem for that the Conservative Party, which of course empower, is that not only is Thereason May said she wouldn't be here for the next election, which is not really due until but she she of course also said she

would go if her Brexit deal got through. So you find it very hard to see any circumstance and which the reason May will leave the Conservative Party in the election, which means the consertive party then has to have a leadership election before a general election. So that makes it very contemplated, very very complicated in terms of being able to do all of that with in that pulp of times. Right, Roland Road, thank you so much, greatly greatly appreciate it.

With Finnsbury and of course uh with the Royal Opera House as well. He is decidedly remained. 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 Keane before the podcast. You can always catch us worldwide. I'm Bloomberg Radio