tv Bloomberg Markets Balance of Power Bloomberg September 14, 2018 12:00pm-1:00pm EDT
from bloomberg world headquarters, welcome to balance of power where the world of politics meets the world of business. we're going now to fayetteville north carolina. london. let's start with fatal, north carolina. can you hear is a can you give us a report? >> i can hear you just fine. so far, the biggest areas of concern are on the far east side to the north end of the coast around new bern. that is where the outer band lashed out overnight. you are starting to see it move inward a little bit. where i am, in cumberland county, it is not quite so bad. you see some steady rain and ponding is so far nothing terrible.
you see warnings from the national weather service for overflowing of rivers sometime by sunday. >> most of the talk has been about rain. we have a sense of how much rain you might be looking for? >> that is the problem. the storm is slowing down. not as far as intensity but just moving along. spot hovering in the same and dumping a lot of rain. there is a potential for bigger problems over the next few days. the governor talked about it and said this is not over. we have a potential for it to be a thousand year reign event area in the raleigh area, you are seeing this becoming a water event. now we are going to london to talk about mark carney.
they may have to raise rates if they have a hard brexit. >> it's been a big week for mark carney. he has agreed with the chancellor that he will going to stay on for another seven months to help steer the country through brexit and any potential economic turmoil that may cause. on thursday he was invited in to talk to the cabinet ministers in a three-hour meeting about what the impact of a no deal would be on the u.k.. they didn't get a deal with the eu when it left and just walked away from the table. he had some severe potential outcomes like house prices could drop by 35%. we could see inflation go up and also see interest rates rise which obviously isn't what happened during the last financial crash. it is a different fundamental story here. >> thank you. as we have been talking there is a headline coming up.
president trump says he would like to go ahead with the 200 billion dollars in chinese imports despite the fact that they are trying to have negotiations with mnuchin. they are taking into account the public comments and making adjustments and how this tariffs get applied. joining us from washington is our bloomberg reporter. is this a surprise? is this a surprise? >> it is and to a certain extent, the markets were cheered by the news that steven mnuchin had invited his chinese counterpart to sit down for another round of negotiations. we also have the president make clear that he still thought he had a lot of leverage in these talks. he raised questions about whether these talks with lead anywhere. what we are really seeing here is that the administration is planning to keep going ahead. the plowing ahead with the tariffs and while it is willing
to talk with the chinese and sit down, it is not putting all of its hopes in that basket. >> we have had wilbur ross tell us the president wants to see how the chinese react to more pressure. this is a negotiating style. >> absolutely. throughout this year, what we have seen as the president likes to increase pressure. he thinks these tariffs give him leverage. there is certainly a faction in the white house that sees these tariffs as a long-term adjustment. these are a new normal. these will help rebalance the trade relationship. trump in a president place where he feels happy about either outcome. either the tariffs raise the leverage and you get a better deal and you might have reducese or the tariffs the deficit with china. there may be some consumers
to get hit along the way. they had the consumer yet but if they hit it can they avoid having consumers -- tariffs hit what we buy at the market? there are 6000 products on the list and it is already starting to hit some things that we look at buying. i just bought a new but for my daughter. i got ahead of the tariffs there. that may not be the case for other people. concern, is what comes afterwards. if you are last week president trump also threatened another $267 billion which would mean all of the imports from china are covered by tariffs. there is a debate in the white house about that as well. the big question is, whether you are willing to hit consumers. two categories to keep an eye on their. smartphones and laptops and computers. a hundred billion in
trade every year with china. if you will hit everything that means consumers will pay more for smartphones and laptops. >> thank you. we going to another development. going on with paul manafort. he is pleading guilty. pleading guilty, it is clear that the door is open to corporation. some media are reporting he has a cooperation agreement. we are being careful because the documents suggest that if he cooperates, in the near future the government will drop the other five counts that he did not plead guilty to today. if they drop counts like that, what do they get in return? >> we can only speculate, but clearly his relationships with who are close to
the kremlin and operated with the ukraine might be sources of information about russia's interference in the elections. >> might he go to collusion? indictmentsa lot of but none of them have gone to the central coat -- question of collusion with the truck campaign? collusion, was any the highest possibility would be manafort would know about it. we will find out in the next few weeks whether or not it was collusion. >> thank you. great set of gloom bloomberg reporters. now let's look at markets. we're are looking at small declines for the major averages on the headline the president trump wants to hundred billion worth of tariffs even if there are trade talks. look at the small declines.
the word is small and we are at session lows at this point. we will see this to be the case. a lot of of uncertainty flipping between gains and losses. we started higher than a little lower. then on the headlines, down a little bit more than 1/10 of 1%. we still have bonds trading lower as the 10 year yield is higher. overall, the appetite is neutral despite the headlines. >> thank you. coming up next, we will talk to jerry brown. makingsigned legislation california carbon free by 2025. is bloomberg. ♪
this is balance of power. >> forecasters say the center of hurricane florence is hovering just inland near cape fear north carolina. it remains a category one hurricane with 80 mile-per-hour winds and the potentially deadly storm surge. buildings were ripped apart in more than 60 people had to be rescued from a motel the collapsed. a half a million homes and businesses have lost power. meanwhile forecasters expect the carolinas to be drenched -- drenched with up to 40 inches of rain. president trump once tariffs on $200 billion more in chinese products. bloomberg has learned the president has instructed his aides to proceed with tariffs despite the treasury secretary attempt to restart talks with beijing to resolve the trade war. a new round would be in addition to 50 billion and chinese goods
that already faced a 25% duty. the chinese have italian with tariffs on an equal amount of u.s. exports. the japanese prime minister says he will meet again this year for more talks with president vladimir putin. vladimir putin wants the countries to sign a peace treaty. shinzo wants to settle the territorial dispute for signing the treaty. russia afterrom speaking with vladimir putin and attending an economic conference. andeast 16 people are dead more are injured after a bus slid off the road into a gorge in kashmir. authorities say the driver was speeding and lost control of the bus on a sharp bend. india has the world's deadliest roads with more than 110,000 people killed each year. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries.
i'm mark crumpton, this is bloomberg. changeissue of climate has taken a roller coaster ride from the paris accords to president trump declaring we have to promote the use of coal. the state of california has the lead on climate change for over a decade now. we now speak to governor jerry brown. >> good to be here. know a report was announced today after about -- about the progress that has been made. , how muchn california progress in it without the federal government? >> we can make a lot of progress bigger. we need all the help. pending that, we have the
ability of states like california vermont new york and washington colorado new jersey all of the states are willing to do their part. we have to cut carbon emissions. we see the storms off north carolina. thatis the kind of thing will happen more and more often and more and more deadly. the reports that are issued that you referenced, we can do a lot. we're getting more electric cars and warmer noble energy. we are supporting more insulation of batteries. often things to do. ultimately, we need the leaders of every country in the world like russia china and the u.s. all in on trying to combat climate change before it gets so deadly that we see mass migrations, tropical diseases, and widespread deaths from suffocating heat. those are all real. it may be 30 years away, but the
lifetime of most of your listeners. >> you need and want support from the federal government. are inhibiting the progress you are making. there is a fight between california and the federal government on fuel standards. does the state of california have the right to proceed? right under athe .aw signed by richard nixon we have the power. under certain procedures, president trump can try to eliminate that and he is doing that and we are fighting him in court. i believe we will be in court longer than he will be president. he will not take with the power. it is crucial that we maintain our efforts. let me tell you why. ,t is not just about clean air
it is about efficiency of our cars. the next 10 years will show the dominance of the electric car. , or will be a china america be in the game? president trump is sabotaging the american car industry. before he gets away with it, we have to wake up the country to say america has to invest in batteries and hydrogen cars electric cars and charging stations. if we don't do that, we will suffer an onslaught of foreign electric cars that will be coming our way. cars that will be coming our way. not only is it that the environment, it is bad for the economy and bad for america's position in the world. trump must be stopped. he must be stopped now. that is what californians commitment is.
must be stopped. he must be stopped now. that is what californians commitment is. >> you have an aggressive goal. you signed into law goal of having california carbon free by 2025. charts familiar with the that show a breakdown in oil for california. while renewables have been growing, it is a relatively modest or should of the energy demands for the state of california. , you are theberg second largest consumer of oil in the country as a state. how will the state of california reach these goals? >> three things. the electric car. currently being pushed forward by china. looking for 5ely million electric cars by 2030. maybe more. can we get there? only if china california and other states and the auto industry make that investment. number two, we need the electric areas for storage. we need storage to complement intermittent power that comes
from wind and solar. grid, we need a regional that will allow us to share power at the times with other states. then, we need other technologies like commitments by builders and healthier soil and capturing carbon in our forests. it is a very daunting task but if we don't get there, what you see in north carolina will be 18 party. the fires have never been worse and they will get times worse if we don't deal in reduce our carbon. when hillary was moving across europe, it was not going to be cheap to fight him back. fighting back climate change is not cheap either. if we don't do it, we will suffer. i can do will be directed at the effort of getting the state in this country on the side of sanity. that is a zero carbon emissions
by 2045. >> that will cost a fair amount. >> can you get there without a carbon tax? >> can you get there without a carbon tax? >> we have it. some states may want a carbon tax. if you want less of something, you need to tax it. if you want more of something, you relieve the burdens on it. we want less carbon unless luton in the pricing is a very important way to get there. if you want less of something, you need to taxwe also need reg. it will be expensive. it is less expensive than doing nothing. the path we were on now is trillions of dollars more than tot it would be if we get zero carbon emissions. we have no choice. this is the way the world is going. >> i am mindful you are approaching the end of your term. -- had quite a
career. have you accomplished everything you want? i don't rule anything out. i have a lot of ideas and i am more experienced and skilled after having done this for the last 45 years. i am also realizing that the end of my time as governor has come. i am open to working for whatever endeavor my services and experience can be of help. you running for office or someone else, social media has come very much into play when it comes to politics. there are lots of issues now. where advertisers are coming from. what do you see as your experience with politics? what can be done to retain the best of social media which originates in your state? and lead out to the things that
undermine our democracy? we have to have enough media savvy insight and sophistication that we can deal. don't worry about social media. , puts moren fox news poison into the body politic than putin does in 10 years. tv and certain commentators and radio, they are doing plenty of damage. what we need to do is leaders from both parties from a wide variety of backgrounds need to raise the level of public discourse. otherwise, democracy will have a hard time keeping an even keel. what you point to is a threat but i would say it is much bigger.
it is all over the channels of communication that are constructing democracy in america and europe throughout the entire world. have aple at bloomberg lot of work to do. >> many thanks to governor jerry brown. breaking news, paul manafort has pleaded guilty to conspiracy charges. i will talk about that with ken starr. in the meantime, let's new york, this is bloomberg. ♪ markets are reacting to a
the s&p 500 is down 2/10 of an percent. rate the dow jones is down 2/10 of 1%. thating to the news president trump has instructed aides to proceed with tariffs on $200 billion more in chinese products. >> the whole market is in the crosshairs today. >> there were some other problems again, we have been a canadian cannabis company. there was news yesterday saying willthe u.s. officials still look to stop industry workers investments from entering the u.s.. canada legalizing the use of recreational marijuana in october. all of those stocks to turn for the worse. they had been in a massive run-up.
people have looked to canada legalizing marijuana. forget that there is a federal statute making marijuana illegal. thank you so much. up next, metaphor pleads guilty. the former trump campaign chairman admits to conspiracy charges and agrees to cooperate with federal prosecutors. ken starr will be here weighing in on that and more. this is bloomberg. ♪
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enforcement. storm is say while the active, they will not enforce immigration laws unless there is a's serious public safety threat. public officials say they don't want people to fear going to shelters. former trump campaign chairman paul manafort plea guilty in washington today. the charges are related to his ukrainian consulting mark not russian interference in the 2016 election. -- central issue of central mueller's investigation. we will have more coming up in a few moments area. brette court nominee kavanaugh is denying an allegation of sexual misconduct reported in the new yorker. the magazine cited a letter written by a woman who said kavanaugh try to support -- force himself on her during a party in the 1980's.
the letter was sent to us democratic senator who turned it over to the fbi. the white house says it is not considering pulling his nomination. elizabeth smart is urging utah officials to reconsider releasing a woman who helped abduct her when she was 14. the woman is expected to be freed next week despite an original release date of 2024. smart, who is now 20 years old and an activist for victims rights, so she believes the woman is still dangerous. smart was kidnapped at knife point from her home in 2002 and rescued nine months later. her other abductor is serving a life sentence. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> it was a constitutional crisis that consumed the country
for more than a year. the impeachment and trial of president clinton divided the country and raised fundamental questions about the u.s. and what about use. ken starr was at the center of the crisis. his investigation and report formed the basis for the house indictment. judge starr has written a personal account of his career and how it changed based on a single intern. welcome. >> thank you. >> having read the book, it is a moving personal account of how difficult this was. was it worth it? >> it had to be done. in that sense, it was worth it. it was wildly unpleasant for everyone involved. obviously the president, the first family.
also for the prosecutors. we were under unrelenting assault. there were echoes of what happened now 20 years ago and what is happening now. >> exactly. with the paul manafort pleading guilty today in the mueller investigation. talk about that echoes. what are the parallels you see? we see a white house that is not supporting the mueller investigation. >> that is a very graphic similarity. president clinton did not attack the prosecutor and the team it throughat he did surrogacy. lots of allegations including leaks. think we are seeing the same kind of dynamic. i have seen attributions to the trump legal teams saying we're just taking a play out of the bill clinton playbook. demonize the prosecutor and the team. we are also seeing an and go today with the guilty plea of
paul manafort. now, the indication that he will become operating the investigation. you know that as a lawyer, prosecutors would prefer for a defendant to say i will cooperate with you as opposed to let's have another trial. >> something that might be different, when all is said and done with monica lewinsky, it was about a sexual act and the president lying under oath. if there is something here, and we don't know, but if the worst is true, we have a possible collusion with a foreign power. isn't that more fundamentally a risk to the country than a president lying about his sexual act? >> it is a very different kind of risk and it is found. -- profound. there has been no indication of actual collusion. the indictments from bob mueller
suggest a very vicious and well-funded campaign by russian interests to sow seeds of discord. in one of the indictments there is the funding by russian interests of two campaign rallies here in new york on the same day. one for trump, one anti-trump. let's start the pot. we are a strong people and we will overcome that. we go back to the lewinsky phase of the investigation, if you read the final count in our referral to the house of representatives, you will see that it was about abuse of power. the invocation of executive privilege improperly. the creative of a phantom privilege. >> you had janet reno as
attorney general who did not fire you, did not stop you, but did not give you much support. wef sessions is saying shouldn't be there in the first place. can mueller go forward without support from jeff sessions? think he he can. bob mueller is just fine. he has the full support of robertson stein who is the acting attorney general. the parallel is quite different. reno,ht of the janet there were two janet reno's friend the one of the first clinton town and early in the second term there. with the monica lewinsky situation, a cold breeze blew over the justice department and we felt the chill. the cooperation at that stage not only ended but turned into
active investigation and the like. >> the attorney general does report to the president. why doesn't president just fire jeff sessions? what would be the consequence if he did it? >> there would be hell to pay if the president fired mueller. an honorable is person who understandably recused himself. the president obviously has the prerogative but it would be hard to get a new attorney general can armed so we would have robert rosenstein is the active -- acting attorney general. >> in the meantime it appears becomeavanaugh might just as kavanaugh. tell us what you know about him. >> he is a person of great ability and integrity. everyone who turned into the
confirmation hearings saw that. he was 12 years on the court of appeals. his credentials are sterling. in terms of where he will be, i think he will be in the vein of those who take the constitution seriously. he will be in the vein of antonin scalia. that is what is causing a lot of people to say we better try to stop this. it appears given his credentials and the support that he has, he will be fine. >> to represent and get back to your book, in the end, is the republic stronger for having had the ken starr investigation? suppose we had diverted our gaze. >> he committed perjury. and he obstructed justice so the committed crimes.
as odd as it seems, still 20 years later, i think we are stronger because the system worked and we held a president accountable. we also erred on the side of stability. that's the use impeachment lightly. it is one of the echoes of the past that we are hearing today. the what we learn from that entire episode is, impeachment is hell. >> thank you. congratulations on your book. now coming up, we will get important insight from the former fema administrator. live from new york, this is bloomberg. ♪
michael brown led relief efforts in hurricane katrina 13 years ago. for his views on hurricane florence and how it compares, we welcome him from denver. give us a sense of the magnitude of katrina compared to florence. katrina downflate to just new orleans. katrina, if you think about the devastation, you think about gulfport biloxi mississippi. alabama, mississippi, louisiana. it was a massive storm the people because of the new york thinksuperdome, tend to of katrina justin that visual. that oftentimes drives the narratives. let me make a few other
comparisons. florence, in terms of the scope geographically, is almost as large as katrina was. the difference is this. once florence got to the coastline, it dropped from a category for 201. now it is a tropical storm tropical depression. disasteree the first was caused by the wind. and the storm surge surge. now, we will see a second disaster which is the flooding that comes, particularly flash flooding throughout the heels -- hills of the carolinas. in katrina, you have a similar double when he. was a categoryna five in the gulf, it deteriorated to a category 3 by the time it hit new orleans. the damage to new orleans is not that bad initially, but because of the storm surge and the winds across lake county train, it caused the levees to break.
then you had a flooding disaster which is what everyone focused on areas these two are similar in the sense that there is the one disaster of the hurricane been the second disaster of the flooding. retrospect, there is a lot of second-guessing about how we as a country handle katrina. too big to handle? did we learn things from it? >> what we learned is this, imagine the emergency response. it isou are responding like this chair i am sitting on. the four legs are citizens. then it is state government and local government. in the fourth leg is the federal government. those fails to do what they are expected to do, then the response to a resent disaster is going to be inefficient and ineffective. that is what happened with katrina. we have people who could not and
would not even a qa. -- evacuate. then we had the breach of the levees. what you see in florence is entirely different. is, peoplee learned understand the need to evacuate. understand we have people who did not who are waiting to be rescued. we should not be surprised. but we see state local the storm ahead of trying to describe to people what they can and should do to avert disaster. you see pre-disaster close to the so that once the danger they can immediately
start recovery efforts. >> there was a report that five years ago state of north carolina cut back on their building codes and made it easier to build things at a lower scale. mistake in not requiring stricter building codes? particularly as climate change is causing more extreme weather? should we be eating up the building codes? >> irrespective of climate change, they should follow the florida model. any area that will face a flooding or hurricanes should follow that model. walking up to2004 a gigantic high school complex and half of the complex was completely undamaged. the other half, totally destroyed. why? florida adopted strict building codes and strict andrews because they know where they live. if the carolinas have done
something to weaken something, they shouldn't do that. they should recognize that they have a responsibility to make that people assume the risk and government needs to say if you are going to build here or live here here is the kind of building you have to build. thank you. coming up, a series of gas explosions described is armageddon like happened in boston. this is bloomberg. ♪
campaign chairman paul manafort has pled guilty to federal charges in part of a corporation deal with prosecutors. we're now joined from outside the courthouse. >> it was a day that we suspect it was coming. this was a moment that seemed almost inevitable because paul manafort have been convicted last month on felony charges. jury selection was slated to start on monday. he faced seven more felony counts. he was running out of options short of a presidential pardon. the big news out of today's plea
deal is that paul manafort has agreed to cooperate. what did he get for that agreement? did they drop charges? >> yes to some but not all of those. there was a seven count indictment. they dropped five of the charges. conspiracy to to obstruct justice. that was the witness tampering charge. they will take into account his cooperation when it comes time to sentencing. >> did they set a time for sentencing? >> they have not. >> thank you.
dozens of explosions and fires happened just outside of boston yesterday killing at least one person and injuring 13. i saw this on the news last night i could not believe it. >> it is a horrible thing. explodes big pipeline it is massive destruction. do we know what caused it? i haven't seen anything that says we do. , you will have state and federal authorities investigating four months of not years to determine a cause. >> is a pipeline? there are reports that say is a pipeline. >> every indication is that it .s not an interstate pipeline it is a distribution system the ghost to the houses. that appears to be what happened. >> there was one out in california a few years ago. was that interstate? >> that was a bigger one.
that was the san bruno explosion outside of san francisco. >> did anyone see this coming? there are lots of old pipelines. 100 years and more in a lot of cases. obviously, they generally do not explode. sometimes they do. there is a big effort underway but it is very expensive to replace the old pipelines but that will take decades. >> whose pipeline is it? columbia gas is the subsidiary. stock is down 10% today. >> have they been asking to fix these? >> yes they want to fix them but it would take doubling everybody's bill to get it done in a prompt away.
typically, they stretch it out over 30 years. occasionally, something terrible happens. >> what is the likely response? probably some of both. typically what you look for is that there will be a penalty but then also the state regulators saying here we will help you along and try to make things better. >> what comes next? who does the investigating? >> typically state federal and local authorities. exactly who will do it. the ntsb often does it but that may be an interstate situation. people.ll be a bunch of >> we are mindful of florence coming ashore. what is the utility situation down there? >> a lot of outages area the shutdown the nuclear plant so you have less exposure there.
there are lots of wires down and pulls down and they have thousands of people trying to fix them. >> who pays for all that? >> it gets added up and the ratepayers pay for it. if the utility has a good relationship with the regulators, as a straightforward situation. these are areas that get hurricanes quite a bit. it is a cost of doing business. isiously, a big storm something that people agree you cannot really prevent from having that cause me problems for utilities. finally, the nuclear plants got shut down. how long does it take to get them back up? >> a few days. until the storm is over and read them back up. >> thank you.
now we want to check in on the markets and see how they are doing. you can see a lot of red. on the dow, s&p 500, and nasdaq. we want you to sign up for the .alance of power newsletter kerry is going to talk about efforts to fight climate change and the state of u.s. foreign-policy today. that is coming up next. this is bloomberg. ♪ . .
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jonathan: from new york city kanaan jonathan ferro. this is "bloomberg real yield." ♪ jonathan: coming up, treasuries gearing up with higher rates, it a one-month t-bill breaking 2% and emerging-market central banks tighten policy, russia's the high-grade and 10 years since the lehman collapse to postcrisis market have a liquidity problem? is the story of divergence becomes a story of convergence. quentin snider euro diversions. >> united states and the rest of