tv Bloomberg Markets Balance of Power Bloomberg March 16, 2018 1:00pm-2:00pm EDT
of the hour. watching the white house, national security adviser h.r. mcmaster be next? we have latest on staff turmoil and the mueller probe. and a permanent extension of the tax cuts, we ask whether democrats in congress will get on board. and the continuing isolation of russia, the country facing international pressure over the poisoning of a former spy as president putin comes to a new term in this week's election. ♪ david: news continues to pour out of the trump white house with reports that national security adviser h.r. mcmaster will be the next to go, perhaps as soon as today. but the president spokesperson
says there is no changes in for the benefit of yet another developing story of the trump white house we welcome chief content officer, marty shanker. let's talk about the overall question, there is a lot of news coming out every single day and often several times a day. is it just for show or is it making a difference in the real world? it makes aink difference in the real world in the sense that people around the president are reacting as if there is essentially chaos in the white house and that policy cannot get done. but i do think that when you say there is a lot of news, there is lots of reports that are in the press, like the mcmaster departure. on the face it may not actually be news. there was a report on the wall street journal just a few hours trump havemaster and decided that he is going to
continue until he has figured out a graceful way to actually exit him. it may both be true that he has made the decision that mcmaster will eventually go, but they are looking for an opportunity to do it in a constructive way. david: from your substantial experience in washington, does it matter to the function of the white house? i am not sure this white house works to wait any other white house works and it looks like the president decides everything anyway, so it doesn't matter whether or not the staff is distracted. they: we did a story of administration of a president and how donald trump wants to run his presidency as he is running a business and he is actually doing that. his business was done with him chair, and if
people didn't execute their orders that he would execute them. and accept that is the type of white house he wants and is comfortable with. he is running himself with people he knows will execute what he wants, to the extent that is the presidency he wants to assume, that is what is going to happen. shery: to your point given the way president trump wants to the, which ones would be the partners that will shake the country? marty: i think jim mattis is the key here. in some ways there is indication he has distanced himself from donald trump. he works at the pentagon and not at the white house. all reports are he has helped moderate or at least helped shape donald trump's opinion on some critical issues like north korea. i think that would rattle markets if people like mattis
were to leave. there is no indication whatsoever that he is thinking about doing that. he was also a key ally of rex tillerson. they did get along but the relationship between mattis and tillerson is not nearly as important as mattis and the president. shery: of course, and we have the news that robert miller has subpoenaed the trump organization. marty: it is interesting to me since the report came out because there has been nothing out of donald trump on twitter or public comments. the white house as it continues to cooperate. it is logical that the special prosecutor would go for a blanket subpoena for all records. they have turned over hundreds of thousands of documents to the special prosecutor. this may be a mopping up
operation and is making sure he is not missing anything. would be embarrassing if the special prosecutor were to issue any kind of report and then subsequently find out he missed something. it may not be as sinister as it sounds. and it is awfully tricky to infer what investigators are doing. at the same time one thing we do know is the treasury department is taking action to impose sanctions that appear on the last indictment of russian individuals. is that an endorsement of what the special prosecutor is doing? marty: it is interesting. secretary mnuchin said that ed, would impose sanctions and weeks passed and they did not impose. i think they used the mueller indictment as a guide to who they should sanction, and why
not take advantage of it? and so they did. i don't think they thought let's make this an endorsement of what mueller is doing rather than make it a convenient way to backup sanctions. shery: we got a statement from the white house. what they are saying is they are on track to meet with kim jong-un by may. president trump reaffirming will meet with the north korean leader by the and of may. given this crucial summit coming will all theacting changes in the white house and the miller probe continue to be for such an important point in time? as we all know he is comfortable with mike pompeo in the cia. that is another reason why mcmaster is hanging around down such time as they go
to brass tacks with north korea. for is a critical meeting this country and presidency and donald trump realizes this. the people who influence him will influence him on how that goes. shery: marty, thank you so much. tosee u.s. stocks continuing gain ground on this trading session and let's get abigail doolittle with the latest. abigail: here are the gains you are talking about, the dow and s&p 500 on pace for their best days and weeks. the s&p 500 tried to get back to session highs and the nasdaq coming off of session lows so divergence on the week. where at declines for all major averages of 1%, but one bullish hell went, crude oil. we are going to see a spike higher late in the morning.
is not entirely clear what is behind that but we see crude oil up 1.7% and some are saying it may be position covering into the weekend. we will take into that more but a bullish tell went for stocks from a sector standpoint and energy is the top sector for the s&p 500. these are the top names in the energy sector. williams baker exploration trading higher at this point. this is a recovery for williams. they are killing a key income tax and that stock had been down in a big way, but they are up sharply. where we see weakness is wells fargo comment an inverse move in oil. take a look at wells fargo dropping late in the morning. the wall street journal is saying the u.s. is widening its probe into the company's wealth business. is thi
and finally let's look at volatility over the last two days with the nasdaq because something we have today for both the s&p 500 and the dow, we haven't had any trading to the downside. -- lotsa two day chart of volatility and today the nasdaq did briefly go negative but now it is higher. it will be interesting to see if the tech heavy nasdaq can hold onto small gains. just a couple of hours we will know. david: coming up, the former ceo of a publicly traded company serving in the house of representatives and now running for president. carter smith john delaney of maryland was us next. shery: and speaking right now in paris, the french president reiterating russian was behind
the gas attack on the u.k. when a former spy and his daughter were poisoned. also saying allies have full solidarity with the u.k. after the attacks, and also addressing issues in europe saying that france and germany must outline the eurozone vision, according to president macron. and also the roadmap will be clear and ambitious. this is bloomberg. ♪
turn to mark crumpton. tens of thousands of people including women and children continue to flee g houta in syria. president assad has redeployed eastern forces to the southern suburb where they hope to eliminate the last rebel stronghold on the edge of the capital with the eighth of russian airpower. have killed more than 1200 people in recent weeks despite a cease-fire adopted by the un security council. the council met to hear about conditions in syria as the country enters that eight euro conflict. the told reporters it could escalate further the council fails to act. >> there are reports of a lot of people fleeing from eastern ghouta. any resolution we have
adopted unanimously is about access. it is not about forcing people to run away. mark: france's ambassador called eastern ghouta an open air cemetary. the swedish minister says his country will act as a mediator in relations between north korea and the international community following speculation about a possible meeting in sweden between president trump and north korean leader kim jong-un. they get press conference in berlin, swedish prime minister said it is important for sweden and the rest of the world that pensions don't escalate between the two countries. the global chemical weapons watchdog says the class of nerve agent that britain alleges are used the boys and a russian former spy and his daughter has
never been declared to the organization any member state. the organization for the prohibition of chemical weapons also says it expects some action will be taken soon in response and offers to help the british investigation. represented organization says british authorities and police opcw toing to allow the independently verify the type of nerve agent used. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. shery: the passage of past reform is a significant edges late of achievement in the first year of the trump administration and other gop may be ready for phase two of tax reform which will make the tax cuts permanent. and coming white house economic adviser larry kudlow called for such a move.
>> i would like to see us bring that for to make those tax cuts permanent. in some cases senate rules permit us from doing that but let's have a vote on that. every democrat voted against cutting taxes so i am not sure where it would be on this if they voted to make tax cuts permanent. to be interesting because they really against us for cutting taxes. shery: joining us as progress -- congressmany, john delaney. democrat from maryland. great to have you again. you heard congressman sculley's. if the vote comes to you this year -- would you make tax cuts permanent? i have no idea because i do not support the first bill back up has been congress because i thought was bad policy.
you are certain aspects i supported but in general we could have done a much better job with the tax reform basel and could have been more responsive to the problems of the economy and could have been done in a way goes more fiscally responsible for the long-term. it sounds like what steve scalise is talking about this for political purposes, which is not how i think about tax policy. i cannot comment because i don't know what they are talking about. that being the key criticism from democrats of not supporting this package. rep. delaney: the corporate rates were permanent and the individual rates weren't, which many of us didn't see why that was fair. in general the corporate reform wasn't done right in the spill and i was in favor of lowering the tax or for our country to make it more competitive and was focused on taking the international taxes which is the most double some part of the tax code. i think they overshot it and the business have lobbied for
corporate tax rates to make coats more competitive. and i would much rather see that money go towards making the individual rates permanent or doing it for sector plan -- infrastructure plan. i do not know what version 2.0 is going to be. david: the corporate park is -- the corporate part is done. anyway tax cuts is not going to be a popular position. rep. delaney: nothing is permanent and that is why we have a congress and legislation to do the right thing for the people. if they want to open the tax discussion we should do that and do some things mark because i do support making a bunch of these individual tax cuts permanent. also support the notion we shouldn't be leaving a moral depth to the next generation of the country.
the future generation in 20 years is going to look around and realize that work has changed because of automation and artificial intelligence and see people are living longer, which is a blessing, but is going to put a huge straight to our deficit. and weaponize artificial intelligence -- cap and make investments to deal with those things. what we are doing now is putting them in a position where they have no financial flexibility. i do think anything is not probably be i would in favor of making taxed as permanent but we should look at other things to paper this and do something that is more responsive to the problems we have in the economy. david: that is a great point because we are spending a lot of our grandchildren's and children's money and a lot of people on wall street are concerned about that. but does that line up with democrats? are amongwks republicans but democrats are never known to be frugal with
money, let's be honest. rep. delaney: for a generation we have been prudent with the resources we have in this amazing nation of ours. that old campsite rule was supposed to leave the place better than you found it, which is how i try to live my life with every organization. we are not doing that in washington. we are fundamentally leaving two major debts. we're not doing anything about climate change each the future generation is going to deal with an cost a lot of money. we are shortsighted and the problem i have with the administration is it is backward looking. if you talk to people in this is elected dania and people outside of government -- if you look at people outside of government, they are having a profound effect on our society and economy and where going to need to make investments in this in institutions that
support people so they are prepared for this new economy. that is frustrating for someone like me actually as a businessperson is an entrepreneur. i am focused on the future and help things are changing and how you prepare for it. shery: as a businessperson how you feel about regulations? senate pushing out legislation to ease the burden on community banks. rep. delaney: i am supportive of alleviating relations on small banks. my first company i was the and the ceo in the stock exchange. i think the democratic party hasn't rained in enough to the notion that relations that exist in our economy and how we need to clean those up if we want to have a entrepreneurial startup oriented economy. regulations hurt smaller businesses relative to bigger businesses. smaller businesses often find themselves in a noncompetitive
place because of relations. i am in favor of ingrid of we haves and miggy sure relations that do what they intend to do, well to make sure we don't go overboard and don't take away protections from consumers warren fact important. i think the right balance is important. congressmanthanks, john delaney of maryland. coming up the former chief of staff talks about what is needed in the world. this is bloomberg. ♪
business. joining us is taylor riggs. we know right now that fbi agents are talking to the wealth management unit and some employees in phoenix as soon as this week, both wells fargo and sec and u.s. officials have declined to comment. this is separate from the banks inquiry. will make that clear. if you look at overall wells fargo in your terminal. shery's terminal we can see since the wells fargo scandal began, there has been some underperformance by wells fargo. begin in august of 2016 and the bank tried to move forward from this but it has been a struggle. i don't want to complicate the viewers but if you come into my terminal a little bit we can look at the fundamentals behind the headlines. on a fundamental level something slick ok regardless of share price. revenue has trailed peers that
under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. david: this is balance of power and i am david westin. shery: let's get a quick check of major averages. the s&p 500 rebounding after
four sessions of losses, up to dance of 1%. tech the only sector falling but do keep an eye on volumes. the s&p 500 rebounding and the last time we saw this was back in december which was the busiest day of the year. david: bloomberg headlines come to us from mark crumpton. secretary steven mnuchin says he is not supportive of proposals to the organization for economic cooperation and development to single out they tech companies -- big tech companies. that are essential for job ration on economic growth and imposing taxes on the sector will harm workers and consumers. his remarks come after governments look to modernize tax laws and how digital companies make profits from users based on jurisdictions. mistake union must a
unequivocal solidarity with the u.k. in the face of the nerve agent attack. the attack was and why by moscow and is rated at the agenda in next week's eu summit. a jury has convicted and iraqi teenager of attempted murder. prosecutors said labonte expulsion could have been worse and the 18-year-old will be sentenced later. prosecutors plan to charge jacob zuma with corruption. laid years agoen for political interference and underscores zoo must dramatic fall from power. was forced to step down as president two months ago. the top democrat on the house rules committee like today following an injury see suffered.
she is widely known as one of congress is most influence show champions of women's rights and was first elected to congress in 1986. congresswoman louise slaughter was 83 years old. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. crumpton. this is bloomberg. leadership is something everyone talks about but far too people practice it. martin dempsey is the exception as he rose to through the ranks of the most challenging times in the war in iraq and became the most senior military officer in the country. the chairman of the joint chief of staff. general dempsey has written a book on leadership called "radical inclusion".
we welcome general dempsey the bloomberg. great to have you here. general.art with you, one of the things you say in your book is that leadership changed in the digital world. what is the biggest change in what state the same -- what stayed the same? all the time and on the move means all leaders actions are highly scrutinized in real-time. that is part of it and can affect the weight leader determines the decisions he or she has to make. it is a interesting dynamic where we used to debate issues whether it was right or wrong. now that tends to be more about narratives because a narrative can be introduced to social media and then echo as people
passed from individual to individual in real-time. we think that makes a leader's job harder and more important. david: the title of the book is "radical inclusion". apply your lessons to the present day world and take it to washington. doesn't feel like a lot of inclusion going on in washington right now. with the leaders learn from your buck about how to lead in washington? >> it sure doesn't feel that way. i teach at a business school and i would say we don't have cases of military leadership. what surprised me as a berkeley guy is how much the military ofends about crating a sense longing and how important that is. whether that is a corporation or national level we have to create a sense of belonging. inclusion is a way for us to more effectively get for
mission and to effectively disseminate information through an organization. shery: how important is it for everyone to participate? how do you apply the book onto students? >> we need to realize we need an instinct to listen, amplify, and include. one of the most inspiring things i have seen as the students in florida and their demand for a voice. is up to us to be able to amplify that, especially in this age of the digital echo. this restriction has been criticized as the presidency of one, on the context of your buck, can one person or country take a leadership here especially when you have to deal iran,ussia, north korea, and so many other fronts? you quickly point
out the complexity of security challenges we face. 2014 were thisto all began to coalesce. the lingering threat of terrorism -- no one country can andibly have the resources the knowledge that they would need to deal with every one of those by themselves, which is why we had this exquisite system of allies and partners that has been a existence since the 50's. if you align those partners to understand the challenges we face, and secondly to share the burden so that the solutions we find our affordable and will endure over time. david: one of the great challenges when one writes about challenges is it becomes abstract and book addresses that by having concrete examples it or through your experience or other leaders experience in the real world. let's take a real-world example right now.
i was talking to an ambassador about the situation with respect to russia and the poisoning of a former russian spy on british soil. with that regard of where you are leading to, everyone agrees we need u.s. leadership in this area. how it you apply your leadership to what the u.s. should be doing right now? how do they lead? his dempsey: first of all, security challenges like russia should just be, about the united states and russia, our nato allies have huge stakes in the behavior of russia on their eastern borders. and now you see inside of their borders, at the middle with elections that becomes even a threat to the very basis of democracy, which is about trust in the process. i think the answer is self evident. this is about nato and the european union, we are part of
the north atlantic treaty organization. coming to an agreement on the behavior and collaboratively finding a way to have all of our thaties, met each other so we provide a unified front on that threat. david: one of the things you talk about in your book is when you define a community you define a team and also the fine who is not on the team and not participating in it. one is the basic theme of president trump is america first. how should he go about in determining who should be on the team at heart of the committee and who should be outside of it? ora: i don't think america first is an effective winning strategy. one of the stories we look at in the book is this company called impossible burger. whoever would want to try a veggie burger? what they realized is in order
to best market their burger, they offered high and steakhouses. a couple of days ago in new york i got martin dempsey to try one, and he never thought he would. [laughter] able to gety are the former head of the military to try it is an effective winning strategy. we to ask ourselves where there is national security and if it has inclusion. if we do not we are not going to be ultimately effective. shery: i am going to try it now. [laughter] dempsey. general coming up, cumbersome in denny ny heck congressman den on the russia probe. this is bloomberg. ♪
david: this is work "markets: balance of power". shery: western governments are taking a harder line on russia and the chemical attack on a former spy in the u.k. and influencing the campaign during the press presidential election and the sport of the assad regime in syria has brought combinations of sanctions and exp sions, at any -- xpulsions. joining us is denny heck who introduced a bipartisan bill last week that calls on harsher treatment for russia before the 2018 midterm elections. he is now in capitol hill.
what exactly do you think should be done against russia? rep. heck: we should up limit sanctions that congress passed that hasn't been done. with the administration announced is not only is the section lighter, it is the equivalent of someone having committed a capital crime and being given operation for it. all they did is sanction one military one intelligence officer what already been sanctioned and a bunch of 23-year-old hackers who sat in windowless rooms that this damage during the presidential election. what want the administration to do is what we voted for last year. shery: what about the sentience that were implemented on these intelligence agencies, on the business, and people? you don't think it will harm or scare moscow? --. heck: was a decent start
but what is at issue is what is it going to take to take vladimir putin to stop and step down and step back from interfering in the elections of western democracies? here is what we believe. yet the squeeze on him and yet the sanction is circle of oligarchs friends, and that is not what has happened in the sections we adopted. we will know if the sanctions are working when he stops interfering. he isspeak here today, continuing to interfere not only in america but also in the mexican national elections that are upcoming. david: we have reasons to believe sanctions will work? that have been sections on russia for a long while, not just in the u.s. but also europe. doesn't seem like we have deterred his behavior one lick. white you think doubling down is going to change? rep. heck: what we haven't done
is levy sanctions against the oligarchs. that is his inner circle and people who are millionaires. if want to change behavior, that is where we must hit. david: why aren't we doing that? administration resisting this? -- why is the administration resisting this? rep. heck: demonstration in the form of the president is not speaking harshly of the attempted murder of two people in london last week. why is he resisting to criticize vladimir putin? that is a good question. asked the president that. shery: the continued committee investigation on the trump campaign in russia, what
measures are you taking right now and what are you pursuing? rep. heck: a like to respectfully disagree with your phrasing. there was collusion. define theuld you evidence? house can you explain some of the secret meetings that occurred and communications between donald trump, jr. and others involved? there is collusion, no doubt. shery: are you afraid that the president will fire robert miller given that he is asking for documents from the trump organization? rep. heck: i would be afraid if robert mueller did not ris equest those documents. i do notirst of all, have eyes on the mueller investigation. there is a firewall against us
and them, i am a person following these events and looks to meet that where this is heading towards is a forensic accounting of possible money-laundering. david: i understand you do not know what is going on with the -- the investigation, robert mueller investigation. does that seem likely that robert mueller will make progress? to borrow a phrase from a famous beer commercial, it is mueller time. if they can come together on proposing some protective measures going into the 2018 election and beyond -- we are getting late for that at this point. i think there is a possibility we can come together on that and i hope we will and i certainly
director of the eurasia group. as we go into this week, there is not much question of the results. the question is what is russia about and what is vladimir putin about nyc poisoning former spies in the u.k.? what is in it for him? alex: for him going into this election this is about talking to the russian public which is not necessarily focused on these issues with the west. with some exceptions. was int campaign rally crimea and the russian occupation is still popular throughout the country. for a lot of russian voters there's a focus on the domestic issues. that economy for example they have not heard a lot about that, but by the mirror putin is popular with the public and he is going to get very high percentage of the vote this weekend.
but the borders are not that enthusiastic. david: let me ask the blood -- let me ask the blunt question, why should we care? election is about continuity for vladimir putin going into the next six your term and it suggests there is not to be a lot of changes there when it comes to the foreign policy with the west. if anything there is some risk to the downside in terms of the potential for the relationship with the u.s. and the u.k. to worsen given what has happened in the last week. i think for a lot of western governments, what they're going to be focused on in the next few years with the longer-term view is what happens in terms of transition from vladimir putin
to a new generation of leadership. there's certainly a lot of question if this is the last an office sod there be more attention paid to that over the long term. this election is and give all the answer to that but it will provide some indicators. shery: why are we seeing mr. putin is not reacting to sanctions? alex: the russian foreign-policy goals have not necessarily been deterred fully by the sanctions we have seen so far. it is case of crimea, quite popular with the russian public and something that mr. putin considers to be a close subject and is not something that comes up in discussions between russian and western officials about the future of the ukraine. i think the sanctions announced this week were probably expected
to a certain extent by the russian government. the reaction from their point of view, they will respond to a certain degree, but i think they feel a lot of foreign policy objectives are being met despite reactions from the west. shery: what sort of long-term impact will the sanctions have? the problem for the russian government going forward is they need to focus on how to boost long-term economic growth. we are not seeing signs that there will be a lot of domestic policy changes that might lead to fewer investments in the country. was that might help diversifying the economy in a way for oil and natural gas. the oil sector has been hit by sanctions, such a combined -- the lack of structural concerns, the growth rates that the russian public
has been accustomed to in the early years of vladimir putin's time in power are not going to return. the estimates going for the next two years are 2% or less, so that is a problem for the russian state, for putin, and the kremlin. as they try to keep the public engaged with them and supportive of them -- as time goes on there's going to be more concerned that the economy is -- reducing for the public not producing for the public. with protestsies happening to our small but more widespread happening over a broader section of the country and that is going to be something it will be worried about over the long-term. david: data in multiple sanctions on russia for a long time and it was expected it will bring them to their knees economically but it doesn't seem to happen. is the west sending a message
that you can basically get away with murder? you can go to the ukraine, and you did not directly should down a plane come in yet the material to do it, you can poison spies in the u.k. and get away with it. alex: i think the intent of the sanctions and the more recent ones have been intended to punish and that is what we saw of the law passed in 2017. think a lot of sanctions put in place to hurt the economy over the long-term, particularly when it comes to oil. david: thank you alex brideau. live from new york, this is bloomberg. ♪
scarlet: we are live in bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on the bloomberg and from around the world. a decadefference makes. we will look at how jpmorgan's decision to buy bearish in a fire sale has paid off big time. and we will discuss the watershed call to sell stocks and hold cash. what this means for investors in this high volatility landscape. and as bright as it hangs in the balance, we speak with the prime minister of ireland about the crucial role he plays in the eu discussions. we have u.s. markets closing in about two hours time. abigail doolittle, we had some strong factory data this morning? had strong also gains, and now we are starting to look at intraday mixed activity. the dow and s&p 500 are still higher, but the tech heavy nasdaq and the nasdaq