Surveillance: The Improbable Becomes Reality

Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and of course, on the Bloomberg Good Morning, David Gura with Tom Keene on Bloomberg Surveillance Wednesday, November the nine, the day after Election Day, two thousand sixteen. Since the polls closed yesterday, we've kept one eye on the popular vote in the Electoral College, the other eye on the markets.

Analyst said Donald Trump's path the White House would be narrow when it looked like he was indeed on that path, winning Florida, giving Hillary Clinton a run for her money in Virginia. The sell off began in earnest the Mexican pay so touching record lows. Overnight doubt futures down more

than seven hundred points from time to time. Around two am Wall Street time, The announcement came from John Podesta, Hillary Clinton's campaign chairman, telling her stunned supporters at the Jabbt Center they would not hear from the Democratic candidate, not until every vote is counted. Donald Trump, for his part, did not wait. He spoke at his election night headquarters about an hour later, thanked those supporters and made a constiliatory gesture or two to his opponent and her supporters.

President elect Donald Trump standing next to Vice President elect Mike Pence and now four hours later, seeing futures down less dramatically than they were last night, S and P futures down forty five points dollar pays so at N twelve and gold which we're keeping an eye on all last night at thirteen oh three fifteen. Joining us now in studios, Bob Formats, vice chairman of Kisinger and Associate's Bob. Great to have you here, great to bear Thanks. It's

played out just as you expected. Imagine. This is a big surprise to me, a big shock. But now we have a new president elect and we have to figure out a way of making sure that he succeeds in dealing with the problems that the country faces and pulling the country back together. This country. It's not just divided,

it's fractured. And healing this fracture is going to take a lot of work across party lines and within parties, because they're very very strongly held views in both parties that ultimately, if you're going to get any progress at all, you have to compromise on some things. I think there can be a deal on infrastructure, and I think both Clinton and Trump focused a lot on small business, and there are plans in the House Republican bill for lowering

taxes on small businesses. Uh that could be very helpful to individual proprietaryships or LLCs or individual companies, small businesses that now pay the individual income tax. If you lower taxes on small business, that can be very helpful, and I think there could be a consensus developed on that. For instance, among the things that we didn't talk about in much detail before last night was how Donald Trump would govern with a Republican Congress, Republican House, and Republican Senate.

It does make things easier here having republic control of both those houses, yes, it does. On the other hand, the rule of the Senators you have to get sixty votes to get legislation through and therefore having a slight majority in the Senate doesn't guarantee you're going to get what you want. In addition, there are divisions between Ryan and the President elect Trump on a certain issues, so he's got to work out arrangements with with Ryan and with others in the House to get the kind of

things he wants. So he's gonna even though they're all publicans, he still has to make deals with the House because they don't see things eye to eye with him. And on trade, he has a lot of authority. He's been delegated over decades, a huge amount of authority, and he can take action on trade without having to discuss it with the House. He may find it prudent to do so,

but he can. He has a lot of authority. And if he abuses that authority, if he does the kind of things he says he's going to do he said he's going to do in the campaign, you could have a great many problems. Even if fiscal policy is sound. You could have a trade war if he decides to go after China, impose unilaterally a forty cent tara for do the kind of things to abolish NAFTA. And I

think with the markets. More worried about is not so much his fiscal policy because our checks and balances, and there are a number of people he has to work with to get fiscal policy through. He is almost unlimited for the moment powers on trade to take tough action, and and that could cause huge problems in the market if he pursues the policies he said he could moderate them, and I think there will be people who would argue that they should be moderated tougher lines, but not these

kind of policies that would cause a trade war. David Gura. For me, it was a tell tale moment. Two things happened. Chris Matthews killed it on MSNBC with an analysis of the Philadelphia suburbs in particularly Bucks County, and the other was a loss of your North Carolina. What when for you in the heat of the coverage last night was

the shift made? It felt like for hours we were watching Pennsylvania, Michigan and Wisconsin, and I was sitting next to Megan Murphy, as you mentioned, and she also was looking at Pennsylvania very closely. And the story through the night when we're looking at Virginia as well, was about these suburbs about these ex serbs in Virginia. The story

was similar in Pennsylvania as well. We talked about the diaconomy there the two Pennsylvania's Barack Obama had a lot of success bringing in massive votes in and around Philadelphia. It appears Hillary Clint did not have the same success. I agree, And it's so much a type two. Not so much what Mr Trump did, but the analysis of post mortem of how Secretary Clinton perform. Robert Harmetts, you worked within the Obama administration and most directly with Secretary Clinton.

How would you suggest she will move on after this stunning defeat. It's gonna be tough. She is a tough person though, and she's I think able to deal with difficult circumstances, but this one. I think she felt very good about running, and I think she felt that she had a very good chance of winning. But she also is not going to back off from playing a role

in American politics, even if it's not as president. She has a number of strong views about issues, and I think she will weigh in and I think if the president's wise, President Elect Trump is wise, he will sit down and and talk to her and at least get some sense on some of the issues, perhaps issues on which they agree or could agree. We have to pull the country together. The fractured country, if it continues to be fractured from political and a social point of view,

we're not going to get very much done. One way he could do it is to reach out and UH talk to her and others in the Democratic Party. One of the things that was very interesting when Eisenhower won a very controversial nomination UH in nineteen fifty two, he ran against Taft. Taft was the one he defeated. On the floor of the of the of the convention, he walked over to Taft and said, look, we've got to

sit down together. I think what Trump is gonna have to do is be much more inclusive, talk to people in his own party like Ryan who have a lot of doubts about some of his policies, but also have a dialogue with UH senior Democrats in order to get the country moving together. Not in every area. It's not gonna work in every area, but in some areas. Having a conversation with her and other Democrats is going to

be important. If he wants to be the if he wants to get things done, and he wants to be the president, the inclusive president that he mentioned he wanted to be. Last night, that statement here from the White House. Just crossing a statement from the Press secretary from the White House residence, the President phone Donald Trump to congratulate

him on his victory early this morning. The President also called Secretary Clinton, expressed admiration for the strong campaign she waged throughout the country, and that just coming across it from the White House moments ago. Bob Formats. Donald Trump on the campaign trail said many times he was a candidate capable of change, often in the face of criticism. He said he would act differently if he were to become president. Did you see signs of that last night

in the speech that he gave. It wasn't a long speech, it wasn't a speech marked by sweeping rhetoric, but he was at points conciliatory. The tone of what he said last night, however, brief, as you say, was actually very constructive. And if he continues that tone, that notion of inclusivity, that he wants to be the president for all the people, that will be very important who he picks as his advisors,

if he picks people who are pragmatists. That will be a very important signal that progress is going to be made. If he picks ideologues, it'll be much more difficult to make progress. The President has invited President Elect Trump to meet him at the White House on Thursday of this week to update him on the transition planning. His team has been working on that for nearly a year as well. I just want to mention that to Tom Baba Herma,

it's very quickly you are out of Baltimore, Maryland. I would suggest that Mr Trump had to support just as one example of the Baltimore police officers are many of them as well. He has a constituency which he has to meet with, and he has to address the people that voted him in and their needs. How will he express that in the first critical hundred days he he does have to deal with his constituency. It's a constituency

that feels marginalized. It feels that the elites have not paid attention to them, that that that the people who are running the country have really not dealt with their issues. So he's got to figure out a way of addressing some of the grievances that his constituents, the people who supported in the movement is he calls it feel most strongly about and that I think requires him to try to figure out ways of dealing with it. With the

tax issue. Uh, the tax issue at this point, I think it is probably not gonna fly through the House, but he also finds some way of doing Let's come back. Robert Harmett's with us this morning. David Gura with me up until two thirty or three? Did you get any sleep at all? In a half hour He's got back to the hotel about about what I got. John Tucker has been up for forty eight hours enlivening. Is Governor Christie caud looking for you to take over as he

goes to Washington. Uh, you know it was all seriousness. You gotta wonder it's this, with this mess that's going on in federal courts in Newark, where does it stop? And I don't has that has come up with see that as well. We welcome all of you nationwide, indeed around the world. For those of you are on the world. This is remarkably American centric this morning, and we're thrilled to have with us Robert Orman, who has served administrations on both sides. I think I almost recently directly with

Secretary Clinton and President Obama State Boba Hormants. I I guess we defined that we redefine the phrase flyover America is David was mentioning on the break the map looks a little different, uh this morning. It is about demographics, it's about culture, it's about race. It's about a new America and the establishment. You're a card carrying a member must adapt. The establishment has to adopt. I think you're exactly right. At first. It has to understand what's going

on in Middle America. We in New York, I think live in a cocoon. Uh, we don't really understand what's going on in the Midwest and all these states or on Eleventh Avenue, but continue or eleventh Avenue right or

or or north of ninety s uh we. When I was under Secretary of State for Economic Affairs, I made a point of going to various parts of the country that had been hit by the downturn, the Great Recession, Gary, Indiana, Hammond, Indiana, hamm Trammic Michigan, New Orleans, and there it was palpable that these people felt that they had not benefited from the recovery that globalization was a threat that the money that was spent to restimulate the economy had not helped them.

It had helped Wall Street and big business, it had not helped them. They weren't getting any money. The financing wasn't there for them. Globalization was harmful to them, and new technology was displacing their I know David wants to get in here. He's got a surveillance bagel in his mouth right now, which is helping out. Bob Hormet's helped me here with your definition of Trump capitalism after what

you've observed for the last two years. Well, I think Trump capitalism, essentially, as he has described it, is to lower taxes not just on lower income people, but upper income people, hoping that will stimulate more demand. Uh. That is probably his his main thing. He also wants to

do certain things that will help small businesses. The House Ways and Means Committee, Kevin Brady and the and the and the Speaker have a very thoughtful plan to lower taxes for small businesses so that so called passed through income will be taxed at fift and not the thirty nine point six individual tax rate. I think there are things that can be done that will pull Democrats and Republicans together. Everyone knows you need to do things to

help small business. This at least is one area. There's also gonna be a lot of focus on how do you repatriate the two trillion or so dollars that are held abroad. Their numerous plans being developed again in the so called House Republican blueprint that can be utilized for this. I think there's gonna be a lot of discussion of these kinds of things, whether they're in Trump's program or they're in the House Republican programmers. And the program there is where I think you can get some degree of

of harmony amongst the various parties interests. The burden of expectations here is is heavy. Donald Trump is able to travel to western Pennsylvania and and talk to folks who have been out of work, say he's going to change things, say cold is coming back, for instance, that talked about the carrier conditioners, that companies sending jobs overseas, Ford sending jobs everse easier said than done, though, And these are

people who are angry who are expecting him to do something. Yes, expectations are very high because the main theme of his campaign was that people in Washington weren't listening to Middle America, to these people who feel disenfranchised, who feel the pain of of the downturn and haven't really recovered from it, so their expectations are very high. Finding answers to these problems not so easy, because you can bring manufacturing back,

but with new technology. The kind of manufacturing that is going to come back may produce more goods, but probably we'll produce them with fewer people because of newer technologies. So the changes really are more driven by technology, uh than by trade competition. Trade competition can display some jobs, but technology displaces a lot of jobs and doesn't create as many new jobs for the future as we had anticipated. Bob Hormets, thank you so much for coming in this morning.

You had eight reasons to cancel. So much going on today, but I greatly appreciate Ambassador Hormets. Uh. Look for is there a book coming out? Do we do? We? I haven't had time, but I'd like to write one. Since you and I collaborate on our last book, we ought to try another one two. But I do think we have to look ahead and think ahead, and and and plan. We've been very tactical as a country, and our governments

have been very tactical looking at the short term. We need a long term strategy for creating growth and opportunity. I can't just react to events of the day. Bob Horts, thank you so much. David Grein, Toime Key Bloomberg, throwed you where this David Gerr and Tom Keene. We're picking up the debris after an historic day for America, a nation and a world in shock over our political moment. We are honored to bring you now someone who was

in sharp support and strong support for Mr Trump. Uh Tom Barrick, who has been more than visible with Colony capital Um. What you need to know, folks, that he's does own the coolest bar in the world, raffles over in Singapore, and that is a good and beautiful thing. If you and I already have a beverage of our choice Singapore, Yeah, in Singapore today, Tom, I would point out your grandparents came over from Lebanon. How does your president elect speak to immigrants in America and the people

that want to come? And I think it's simple. I think it's a message of hope, opportunity and renewal. And I think what you saw last night was a blowout of of that immigrant mentality, right, of the beauty of America being a place where if you have a desire, if you have the opportunity, if you have the hard work, you can do it. And we've lost that over the last decade or so. So I think I'm a great

example of my grandparents. My parents coming over in the in the in the cargo whole of a ship, with nothing, and due to the beauty of the American system, had an opportunity to make a living in a life way beyond their dreams for the kids. Can we get legislation through that? It's Republican president, Republican House, Republican Senate. Is it a republican California? I don't even know. Can we get legislation finally done on immigration? I think absolutely so

the Vice president. Hence, when you think of the opportunity today, it's immense you have Trump leadership, and I think you're going to see the cadence of the man now as president much different than the cadence of the man as candidate.

The markets will will calm, the waters will will quiet, and Vice President Pence will have a role that probably no Vice President has had in leading and mentoring through that congressional lab Did Tom Barrick wake up this morning and look at the real estate listings in Washington, DC? Are you are you going to be headed to Washington? We're very curious here sort of what kind of team Donald Trump would assemble just broadly speaking here, whom does

he hire? Yeah, I mean that's that's right question, right, because if you look at President Reagan, a lot of the same questions. Right. He was an actor, He was from California, which was a horrible thing. He went to Eureka College, which nobody had heard of. He had no foreign policy experience, and he was divorced. What did he do? He surrounded himself with the best of class cabinet, so he had George schultzkap Winburger, Richard Allen. I think you're

gonna see that now happen. He Trump has a great transition team. But if if you think of who the availability those candidates were until yesterday, it was more limited because people who would consider it weren't taking it that seriously. So just in the last twelve hours on my iPhone alone, the quality of the candidates who now want to be

considered is dramatic. So I think you're going to see great choices of people who understand the system, who have used the system, but are not of the system, so that you can affect that gigantic aircraft carrier of bureaucracy and tiny degrees, not in jolts, but in tiny degrees. You're a successful businessman. You've heard Donald Trump talk about say that the Federal Reserve in political terms, terms that

he's been criticized for. For those in business who are worried about remarks like that that they might see as flippant, Can you offer some assurance here that he is going to move forward in a very measured way. Yes, I mean, I think what he was doing before I analogize it to the uf the UFC cage he was in political battle. He's using every known martial arts and slugfest tactic that

he can. Now he's president United States. Every word that he says reflects global terror, fear, or confidence, and I think you'll see him be much more judicious about what his statements are. Help me with the Republican Party, for for you grew up in the collegial love fest known as Southern California, Republican What a mess that used to be back and forth? You work with Mr Komback and

the personal attorney to President Nixon. How do you perceive the new Republican Party with a different demographic in America? Where do the next Republicans come from? Yeah? We we we don't have a deep bench. And I think what we've seen in both parties is a redefinition of everything of the parties, of the way we analyze um social agendas and and monetary agendas and fiscal agendas. And when when you look at the polling and the exit polling of what happened, what we realize is we have no

tools anymore. Right, the tools were totally useless, and I think I think they're equally use useless. In both parties. You find people are tired of rhetoric. They want action. A lot of people are very liberal on social issues in the Republican Party and very conservative on fiscal issues, but they don't know what it means. You you own the earthquake free part of Santa Barbara because there's only two acres of it. I didn't hear anything on Green

America climate change. What what's the strategy here for something dear to the heart of every California. What is President Trump going to do on these huge issues of climate change? I think I think it'll evolve and and you know, the priorities of the first hundred days, of course, are a little bit like when you're in an airplane and you're losing altitude. The first thing the captain says is take the oxygen mask and put it on. We do that every morning to get out of it. By the way,

I love it. I love it here. You guys have a very cool place. But he doesn't says, He doesn't say, take the mask and put it on your four friends, and then go across the island put it on three other people. And I think that's what you're gonna see is those priorities are priorities of an entitled society that needs that focus. But right now we need other focus on our monetary policies. Wanning, you're gonna see fiscal policy be instilled. You need a new task code, you need

you need a new health program, you need schooling. Our foreign policy has got to be restabilized. You have an opportunity for a man like Trump with a elegant foreign service bureaucracy to change the fabric of how we deal with the Middle East, of how we deal with China, of how we deal with Russia. It's an opportunity and it's going to take a very sophisticated team in order

to implement all of that at one time. You've watched your your friend Donald Trump go through this here over the last many months, and we have seen a lot written about Jared Kushner, his his in law, as somebody who was playing a very active role in the campaign going forward, What kind of role do you see him playing in administration? Significant? I mean, Jared is exceptional, as

is Ivanka and Donald's other kids. But Jared has a a very refined mind, a very soft and consensual approach, and most importantly, Donald trust, which for this president is critically important. So I think Jared as an advisors, a confidante. You'd have to ask Donald what what position other than that? But for a young man, he has an old soul

and a very sophisticated mind. I assume you were at the Hilton last night for for all the goings on after the polls closed, there was a moment when Donald Trump, Beck and Rhyn's previous up to the stage gave him a big hug. President Elect Donald Trump gave him a big hug and thanked him for it. The symbolism was not lost on me there. This has spented times an uneasy relationship with the Republican Party officials. What's the importance of party allegiance in light of the campaign that we've

seen here? Uh? Do people have as much allegiance to their parties to be the Republican and Democrat going forward? I think the truth Lanzers know and and I think what happened in that alignment was um was a forced marriage. And what you saw and Donald bring him up to the stage was we did it you. You may have questioned me getting us here, but I got us here.

And I think he is he You know what what a capable head of a It's a hopeless tasking head of the Republican Party under those circumstances when you have a candidate that the party didn't even want in the first place. Now, the man is exceptionally capable. He'd be a great chief of staff. He could he could roll over into and other pieces. But I think exactly as you as you said, the definition of what is the party? What is the purpose and do people really vote that

way anymore? I think it's a different game. Could you bring rugby to America? I hope then? Then then at least I could get something. Did you watch All Blacks in Ireland the other day? Unbelievable. I don't know much about it. You did it, you played it at USC but it was extraordinary. It wasn't it was? And you know, I look at the election kind of the same ways

what I loved about rugby. As you go out, you you compete to the fullest extent known demandkind killing you and when that whistle blows at the end, they bring out a keg, it's over. Yeah. What I don't get is you've got a gorgeous face. How did your this mut be all the money you got your I mean you like it's perfect figure. Eyesight must be failing. Yes it is, and it's I told Daily tom By so much. Clearly in support, in an early support of your president elected.

He is a former governor of Minnesota. The hockey player from South St. Paul Jim Polini, Governor, Good morning, Well thanks for that introduction, particularly like that one. I was thrilled to have you from our studios in Washington. It is a different morning for Republicans in Washington. How do they adapt and adjust to their president elect? I think

fairly easily. I think most of the Republicans if you look at their wish list, which is makes some progress on the debt and the deficit, get tougher with respect to immigration, make sure it's legal as opposed to illegal, try to get some regulatory reform and relief, try to better unleash of the American energy sector, fix or repeal Obamacare, and more. And you line that up with most of

the Donald Trump's agenda. There's there's really good alignment, so I think for the Republican Congress, and that's sort of president You could see people get very busy in Washington very quickly. Governor Polanta, you now helm the financial services roundtable there in in Washington, d C. Your constituents, your members are big investors, the heads of big companies. What assurance are they getting this morning from the Trump campaign

about a path forward here once he begins the transition. Well, he hasn't said a lot about financial services in detail, but he said a few things over the course of the campaign. Wondering the Republican Convention, they put a return to Glass Stiegel the breaking up of investment and commercial banking in the Republican platform, and his then campaign manager embrace that. I'm not sure how vigorously he'll embrace that

as a president. He also said he wants to get rid of DoD Frank or at least substantially overhaul it and try to uh create more lending opportunities. And so that's hopeful from a industry standpoint. He attacked carried interest specifically in a couple of junctures that really affects more hedge funds than the regulated banks. The group that I represent and lead. He's also talked about the need to provide some relief for small banks and community banks in

particular midsize banks. So and the list goes on a little bit, but but basically that's a list that is pretty uh I think would be hopeful from the industry feeling like that they've been overregulated in some respects. You're in the information business, your lobbying, you're talking to lawmakers about policy, what you'd like to see, what shape you'd like to see policy take. From what you know of Donald Trump, from what exposure you've had to him here

over these last few months. How amenable is he to listening to people like you amid the rhetoric, of course of draining the swamp of Washington, d C. I think, you know, there's a big difference between what you do on the campaign trail and now the active governing. And I think it's going to be fair to say, based on the arc of his life and what we saw during the campaign, he's never going to be the kind

of person who dives into policy details. So I think he's going to set a direction in a tone, and then try to trust people around him to build out the details and move it forward. And so who he appoints to these positions is going to be very telling and very impactful and very important the governor. I mentioned this morning, elections of eighteen hundred, of nineteen sixteen, and of course the history of nineteen sixty. Uh. You are a Catholic, but you have, with your wife, spent much

more time within the evangelical movement. How did Donald Trump gain the evangelical vote was some of the outrages of this campaign. You lived it out in Minnesota. How did he pull that off? I think Donald Trump is somebody who benefited from his own charisma his own projection of strength people wanted and perceived strength. And then there's a whole bunch of people in this country who were either

afraid of being disenfranchised or were disenfranchised. And one group of that where people who are concerned about their faith and religious freedom, the future of the Supreme Court. And while they may not have love Donald Trump's behavior at certain chapters in his life, they were very much fearful of what Hillary Clinton might do in that regard as it relates to religious freedom, Supreme Court appointments, and the like.

And they realize those appointments in particular will last and have an impact for twenty or thirty years, and so they I think, we're willing to make some concessions and realize it's an imperfect package, but on balance, they'd rather have Trump for those reasons. Then Clinton, let's turn our attention to your home state, the state of Minnesota. Donald Trump and his campaign saying and the days leading up to the election that the campaign had a real shot

of winning that state doesn't look like that happened. But what did he see in Minnesota? What did you see him seeing in Minnesota there that that others didn't well Minnesota has some characteristics of Wisconsin and some of the other Iowa and some of the other Midwestern states, but it also has some things that are you know, like other parts of the country, like Boston, for example. So we have a big med tech, high tech, more diverse economy frankly than some of the other parts of the Midwest.

So it's a blend between some of the states that went for Trump and some of the states that went for Clinton. Clinton eked it out, but barely. It was much much closer than people would have imagined, and he actually, with a little bit more about boost could have potentially won it. But Minnesota hasn't voted Republican for presidents since

Richard Nixon. Is the longest unbroken streak of any state in the nation voting for Democrat for president, and in part that's because Reagan won all the states and Monde was on the ballot and he didn't. He carried Mondale carried Minnesota governor there, former governor of Minnesota now c of the Financial Services Roundtable in Washington, d C. Next Ian Bremer joins us, of course it was a rasier group. He is picking up the debris of the international relations

of your raisier group with a domestic focus today. Uh. Dr Bremer, good morning to you. There was a moment where Mexican Peso signaled Secretary Clinton would do what the elite said, and then things and then things changed. Why did they change at ten pm last night? Look, I mean there's no question as comes to the shock to everybody that was watching the polls. Um. You know, I think what happened is not the structural issues aren't different.

It's just that they hit harder, right. I mean, you have a population with a very strong anti establishment sensibility. That's not just about democratic leadership, that's Republican leadership. Um, it's the mainstream media. Uh. Those You have an economic rebound, but a feeling that that rebound is not getting two lots of people in the middle and working classes. Um. And you also were running the most establishment candidate with a lot of negatives that either side could have put forward.

Given all of that, the polls were still showing a very significant Hillary win towards the end um and a lot of it was it's about the question of turnout and a lot of people not telling you what they're planning on doing in the polls. Even given that the United States demographics should have given you a different outcome than what you saw in the UK. That just wasn't the case. And uh and and now, of course you're going to see a dramatically different US foreign policy in

the rest of the world. Remember, let's talk a little bit about that policy. We we we have a situation in Syria that continues to worsen. We have fighting in most once again. We have a relationship with Russia that is fractious, to say the least. What's at the top of the agenda here for President elect Trump when it comes to foreign policy, Well, uh, you know, the wall is what he says is at the top of the agenda. Um, but nobody really believes that it's going to get built.

I think the thing, the thing is that he talks about and the constraints that he will face in foreign policy will be very great. I mean, Obama was a radical departure from Bush's foreign policy. And you know, if you look at what Obama's foreign policy is actually accounted to over the course of eight years, you see that in most cases it's not all that different. You still have wars going on in Iraq, uh and Afghanistan, Guantanamo is still open. Um, European relations aren't that great. Israel

Palestine hasn't gotten sex. I mean something's happened, of course, and Iran you know. Um. But you know, if you ask where Trump is going to matter most, He's gonna matter most in terms of the fact that every single US ally thinks that he's a disaster for their relationship in the future, thinks that he's not committed to American alliances, thinks he's not committed to American trade, thinks he's not

committed to American values. And so therefore you're going to see an incredible amount of international hedging away from America and not towards any single thing. It's an absence of American leadership and an absence of global leadership, and so the Middle East in particular that means a lot more violent. Interestingly enough, in Syria's the one place that's given his relationship his desire to have a closer relationship with Russia.

I do think the view will be as Sade isn't going anywhere, there's a big win for assad Um and uh, and let's just do what we can to get out and keep the fighting off. We continue with Ian Bremer of Eurisier Group, David guru quickly, a dated check with the tape improves particularly off where we were ten pm in the midnight futures negative thirty dramatically worse earlier. The down not negative four und negative three negative to thirty two.

That's quite an improvement. Just over eighteen thousand yields come in, come in from where they were one point nine on the tenure yield David ian Bremer. Last night we heard Donald Trump doing CONCILIU tory as best he could around three o'clock in the morning when he delivered his speech at the at the at the Hilton here in Midtown Manhattan. He said that we would be willing to the U s, would be willing to meet with with any countries, again

just emphasizing that he wants fair deals with them. Who's going to lead his efforts to engage with other foreign leaders around the world, Well, so far it's been his son in law, Jared Kushner. He's the one that's actually organized the meetings that Trump has had with heads of state. He's been in those meetings individually, um and he is he does have a strong view on foreign policy. Clearly

wants to play a role. Um but in terms of who's going to be the Secretary of State or who's going to be, you know, sort of the Secretary of Defense. I mean, frankly, there's no one that's been around Trump that's considered radically credible on those issues. So either he goes for a complete outsider, uh, he takes one of his advisors that you know doesn't have experience on these points.

I mean, you know, Lute gang Ridge would be an obvious choice, um or, or you know you're gonna see him reach out some of the Republican establishment and and on foreign policy. Literally everyone in the Republican establishment has said that this strongly opposed to the guy who you put your trust in matters. Investors have put their trust in independent registered investment advisors to the tune of four trillion dollars. Why they see their role is to serve,

not sell. That's why Charles Schwab is committed to the success of over seven thousand independent financial advisors who passionately dedicate themselves to helping people achieve their financial goals. Learn more and find your independent advisor dot com. David Garrow with Tom Keane on the day after election Day two thousand sixteen, the ninth of November. Looking at economic indicators here brought to you by Commonwealth Financial Network. It's time

to change the conversation. Talk with a broker dealer. Are I a that's ready to listen? Call eight six six four six two three six three eight or visit Commonwealth dot com to learn more. Tom at ten o'clock to the wholesale inventories wholesale trade sales coming out as weal tomorrow looking ahead to initial jobless claim. Suffice to say, the biggest economic indicator is Donald Trump President elect Donald Trump, and the uncertainty surrounding that, who will be on his cabinet,

what his economic policy will look like. That's we're continuing to follow here this morning. And with that, I want to bring in the honorable Dick Gephard, former Congressman, former Democratic leader, joining us now by phone. He is now the president and CEO of the Get Heart Group and Congression Gap hard Pring to bear your experience governing in the minority when you have such a majority the other

party in Washington. You take us back to how useful is it to look at that when you're when you're looking at the way things took out last night, Well, I think it is useful to look at history always an experience. Uh. You know, that was tumultuous election. We lost the House for the first time in forty years. So it was a big devastating loss to Democrats, just like this is today for Democrats. But it's a great country and we have to move forward together and you

have to make decisions. And you know, I always remind people that in that period after ninety four, you know, the Republicans shut down the government twice and they impeach President Clinton. And in the midst of all that, we were solving problems. We balance the budget, we got welfare reform done. So you can do these things even in the midst of lots of disagreement and difficulty. And that's kind of the story of democracy. You know, it's a

substitute for violence. Uh. You we put our ancestors, put five and thirty five people in the room, not one, and that means you've got to work hard every day, but among that group and with the president to get hard things done to resolve those inevitable conflicts that come on policy between this vast diverse country. Congressman gap Hard what happens to the anger that we have seen on the campaign trail here you mentioned with their proxies for that anger, how does that play out? Well, it's a

real it's a real problem. But again, you have to deal with what you've got. Um, there were a lot of grievances, in my view, that were expressed last night. It's wrong, I think to make all this statements about what was being expressed. I think a lot of different things were being expressed. Economic grievances, gender grievances, social grievances, racial grievances, and and a lot of others. And and so there was a lot of anger out in the

country for a variety of reasons that got expressed. The people make the decision, and so the people that got elected have a duty a responsibility to come to Washington and try painstakingly, which it always is, to find compromises they can allow the country to move forward. That's their job, and that's what they need to do. Mr Goodhart. It has been a tumultuous two weeks. I guess the election counts is a smaller item than the Chicago Cubs winning. Uh,

And you know, I don't know what that means. To a gentleman from St. Louis. But I give us a perspective on how you are. And truly, your St. Louis has changed over the years. It's changed America. It is a different America. This was to happen, That was to happen. All the pundit's got it wrong. How is your St. Louis changed over the ensuing years. Well, there there's so

much change. It's it's hard to know where to start. Uh. First of all, when I was growing up in the fifties and St. Louis, it was you know, uh, midwestern industrial town. We had big corporation headquarters. We had lots of jobs. My dad was a milk truck driver. Uh, delivered milk door to door. Uh. He didn't get through high school. And he used to always say to me,

you know you have clothes on your back. You have Uh, we're in the middle class, he used to say, because I'm in a union that gets me fair wages for my hard work. That was the world I grew up in. That world is gone, and now you're into a completely different world. From all aspects. Our economy has changed dramatically

in the last four fifty years. Our information revolution is to me bigger than the Industrial Revolution, and that's changed everything, disrupted everything, And and you've got a more multiracial society than we had. Women have obtained many more abilities to do things in the economy and in our society. So there's a lot of, you know, really earth moving change that's going on. And in a way, this this election and pat some past elections have been a reaction to

a lot of that. We have a minute left only, sir, from our studios in Washington, how does your Democratic Party regroup? What do you need to see from the present leadership, Speaker Polosy and such Well. I think both parties are faced with grappling with all of this change and the grievances that and so you know, in our primary for president, we had the Bernie Sanders effect and that expressed a lot of these grievances that are out there. And I guess you can say, we've got to deal with that.

The Democratic Party has to get back in touch with working class Americans. They've got to really address I think most importantly the Democrats a's have to be able to address with the Republicans these urgent issues that are in front of us. As a country and work with Republicans as best they can to find those magic compromises that allow us to move forward. He has Gobbard from St. Louis. Mr Gobert, thank you so much from our studios in

Washington this morning. And you know this is remarkable, David. I mean, I just can't say enough about the guests we're having. They're truly the shock of this moment for all, including the supports Mr Trump. Unexpected by many. But yeah, we're gonna speak with another one. David mal passed me, joined me shortly the moon Shot near North Carolina last night from eighteen ish up to record weakness twenty five zero on Mexican pay, so a little better recovery through

the morning, give Mr Trump speech, etcetera. But we've just had a new leg up and pay, so it'll be interesting to see if we break through the new weakness for all Americans. I really can't convey enough a careful read of always wonderful Michael Barone at the American Enterprise Institute. If you are the most die hard Bernie Sanders supporter or a supporter of Secretary Clinton and obviously Republican, Peru's

his November five essay on royaltist royalist America. It is really something he leaves no and no candidates unscarred joining us. Now we are honored to have with his secretary mail Pass. Excuse me, I'm trying to get at, David, congratulations on your economic instincts, in your persistency of advocating a Republican party policy around the candidate you were del When did you become a Trump supporter? I don't think I Tom, good morning, and David um, I don't think. Uh, that's

the right way to think about this. Donald Trump is very strongly knowledgeable about where he wants to take the country, and that's what drove this. It wasn't it wasn't people creating the plan. It was him saying, look, remember the knowledge of the tax code. The tax code is really screwed up. So that was the principal focus of of the of the campaign and so on down the list. Someone have suggested if school taxes, maybe we would have been able to focus on the code. Okay, but school

choice is a really important thing to Americans. He identified that, talked about it a lot and did these, uh lots of addresses on policy change. So we ought to look at it that way. Can he affect policy now that the strategy has led to victory. I think so definitely. And so look at the republic can House incident. That's going to be a critical aspect of this. I liked last night how he reached out to lots of people, to foreign countries saying saying, we're gonna America is going

to be fair for everyone. He reached out to rents previous, and so these were strong ways to bring people together. House and Senate will be critical in policy implementation. A lot of stuff he can do through leadership, and Americans in the exit polls yesterday, we're saying, above all, they want a strong leader, and he's showing that. And also I think UH showed a very good UH speech last night to bring people together. David Malpass, you have served

in federal government, Donald Trump? No, no, please, you guys, that's not right. We'll talk to tomorrow. Let's see what the story is. You've served in government. Donald Trump very proudly has not served in government. If you had a few minutes with him to talk about what what he needs to know going into to running the federal government, what would you say, Again, that's not the way it works.

He knows a lot about how government operates. He's been uh watching government and and thinking about how it should be done. He's already said that he wants a business like government, that the way the government has been operating is sloppy, it doesn't work, it's very costly. So we know one of the things he'll want to do is bring very qualified people into positions and allow them to

operate the way he does in his business enterprises. We joke about you being Secretary Maupasspeter, are you convinced here that there are Republicans, establishment Republicans, others who will take the call when Donald Trump calls offering them positions in his government who may not have supported him here on the campaign trail. I don't mean to be cynical, but there are a lot of people who would like to

like to help who weren't helping before. And so I think there is going to be a need for everybody in the country to kind of pull together and with there are millions of people not in the labor force. We've talked about this a lot, and that need jobs need to be have, small businesses that create new investments. Everybody has to pull together. You are the physicist from Colorado College. I want to not go over the physics of something complex. Steve Roach mentioned this yesterday before this

shocking election. David mel Pass explain the physics of dynamics scoring. It's hugely controversial. People have beat you. Wilbert Ross and others of Peter Navarro tell me why the critics of male Pass dynamic scoring are wrong. Dynamic scoring simply means that the economy changes when you change policy. It's dynamic, and so we know that if you put in a better tax code, people are gonna work harder, they're going

to invest more. There's a divide in the party. Sometimes Democrats say, oh no, people won't work more, they'll work less because they're getting more take home pay. That's not actually the way it works. When you have lower rates on a broader base, as Ronald Reagan did, you got more business involvement and more hiring, more people that wanted to advance, and the median income went up very rapidly.

That's dynamics your model that into the portfolio and into the plug ins and predictions CBO for just for example, before the fact, or does President Trump and his administration have to wait as everyone else does tell after the fact. One way to do numbers is to say, if we grow four percent, what happens to revenues? And so if you keep revenues constant as a percentage of GDP, as you accelerate the GDP, it actually turns out that the

debt to GDP ratio starts going down. If you then project that to the business community, say, look, things are getting better from the government's debt standpoint, they're going to invest more. And so you end up with a dynamic business investment environment that creates jobs like crazy. So and Mr Trump knew that from the beginning. He said, well, it's not just four percent. There can be more than that.

I know there million jobs. The distinction here, using a phrase from President Obama, is the hope and audacity of modeling the success before you get that payoff from fiscal policy. Exactly right. Well, but if you model uh, stagnation, then businesses aren't going to invest. My current Forbes column, which is which I think is on newstands, says that straight out, when you d do a shameless plug, like when you're

a secretary mailbost you just let it pass. Available on newsstands David belt Fast before before you went to Colorado Springs, you were in you were in northern Michigan looking at the election results last night, Donald Trump carrying Michigan, the first time Republican has done that since he tapped into something there. We were talking about the burden of expectations earlier, a lot of rhetoric here about Ford sending jobs to Mexico, the carrier air conditioning company sending jobs out of the

country as well. You've got people now who are expecting action. How is Donald Trump going to deliver? Yeah, So I grew up in a very small town in in in blue collar my uh in in iron iron foundry country, and so it's very challenging for American workers to see iron coming in from India castings that are landed in Michigan at a lower cost than what could possibly be

produced in the US. And so that that Trump was able to explain that to Americans that the system, the global government system that we've been operating under hasn't worked for Americans. I think there can be constructive changes, And he reached out to everybody in the world yesterday and said let's make this work. Actually was Secretary male Pass I want to know bring that. I want to bring up one name. We're trying to avoid the uh, the guessing of the administration, but there is one name to

the service nation. You and I know him quite well, and that is Roger Ferguson. Is it time for Mr Ferguson to re enter the political maelstrom and serve the nation again? He was a great FED vice chair. I don't so, I really don't have comments on personnel. Um there you know, uh. President elect Trump has said that he's going to reach out to lots, to the best, most talented. He used a Kennedy phrase, I think last night, best and brightest to make the country grow again and

great again. And so certainly anyone who can contribute to that, there is the need for them to do it, either in their own business or in government. Both ways. We need a government that's working effectively for the American people. We haven't had that and that can be repaired. David, congratulations on the wisdom of this election. From the eyes

of the mel best. Just congrats to Trump worked. Think how hard he worked every day for two years, giving speech after speech to explain this to the biggest part of the American public. You know, David Melpos, thank you so much. Within SEEMA Global and an early supporter of the economics of President elect Trump. It is a most odd market. It is uncorrelated, and its levels in search of new levels yields eleven basis points higher one point

nine seven. As we mentioned earlier, the probability of that action coming in decisively off the Bloomberg on December roughly right now green on the screen, the dots sixty eight points. But stocks going this way and that David Wilson, of course mentioning the hospital stocks crushed off of thoughts on the Affordable Care Act. We afford a good time to speak with Mohammed el Arian. It is wonderful to speak to him, of course. Pub and the Ft a bit ago.

Dr Larin, Good morning your book, When Markets Collide, Change the Language of Game Theory, page two eighty. Pascal's wager applies to a situation in which there is a small probability of an event that has an enormous consequence. Thank you for predicting the Trump election. Good morning Tom, Tom. It's it's just one of a long list of improbable,

if not unthinkables, that have become reality. And it's the system telling us something, which is, if you run advanced economies at low speed for a long time, and if the low speed is non inclusive, things great. My chart of the year is real g d P down forty percent on a rate basis from four points some percent to two point one back thirty years or so, and it really speaks to the slowdown. What policy persu scryption can there be to jump start this economy to the

quoted Trump number of four percent. So the good news is there's pretty broad based consensus in the profession that you need to move on four things. One pro growth structural reforms such as corporate tax reform, to a more balanced demand management including infrastruction, infrastructor spending on fiscal side. Three deal with the debt problems in Greece and elsewhere. And finally, better global policy coordination. So there with an

engineering solution, it's whether the politics will implement it. You grew up in a house of diplomacy, doctor l Arion. You have an esteemed British education or game theory is a cottage industry. What should be the game theory of Mr Trump? As he moves from movement as he called it in his acceptance speech to the reality of executing politics. What's the change agent he needs within Donald Trump's game theory?

So I think it's to move quickly in areas that have an immediate positive impact and where there is broad based agreement. So he has promised, for example, infrastructure spending, corporate tax reform, raising the tax on kine, interest the regulation. If he moves quickly on this but refrains from moving on other things he promised, particularly protectionism, slapping tariffs on

China in Mexico, breaking up NaSTA. If he was able to do this combination and communicated as he did at two thirty this morning in a consuliatory fashion, he could get moments. He could get positive moment two themes to speak of in our final minutes with you this morning. Can Prime Minister may avoid a hard Brexit? The language of Parliament seems to be towards moderation. Is that feasible within the British system? Um? It is? It is? It

is feasible she can avoid a hart Brexit. Um right now things have moved towards a softer Brexit and a longer Brexit process, so clearly that there is a way out. But the politics again are complicated, and we haven't even spoken about what's happening with the Italian referendum. Politics will remain a big issue on your show, Tom in the in the weecent months to come, we'll see that we had wonderful perspective. Thank you to Richard House and Robert

Hormeance for perspective this morning. Finally, Dr Hilarion to your Egypt. The depreciation, the unpegging, if you will, of the Egyptian pound was extraordinary. How does the LCC government, whatever you want to phrase it as a government, how do they deal with a black market Egyptian pound effect the effect of that upon the people of Cairo in Egypt. So, first and foremost, they need to protect the most vulnerable segment of the population, and the program that they've agreed

to the i m F attempts to do that. Secondly, they need to promote higher growth quickly and there are the reforms. And thirdly they have to make sure that the exchange system work works properly. Um this is probably the most comprehensive reform program that Egypt has put together, and there's commitment from the very top to its implementation.

It's it's going to be really critical for them to follow through and for them to get the external assistance that the program assumes, but doesn't it assume domestic reform

as well? And can the LCC government do that? Can they domestically reform away from international rulemakers like Madame Legarde in the i m F. So what they're hoping to do is to reform with the support of the international community UM and implement a program that they have stressed is designed in Egypt for Egypt, but needs to support

of the outside world. That that is the approach, that's that's being adopted, and we will see as as the various components come together and whether that sustained or not. Duch Llarian, thank you so much, greatly appreciate Muhammeddlarian, folks. I can't say enough about his more recent a book is well and frankly becomes ever more interesting given the political festivities of the last twenty four hours. Just truly

truly extraordinary. Muhammadalarian, of course, writing off in for Bloomberg View. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on iTunes, SoundCloud, or whichever podcast platform you prefer. I'm out on Twitter at Tom Keene. David Gura is at David Gura. Before the podcast, you can always catch us worldwide. I'm Bloomberg Radio. Who you put

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