tv Bloomberg Markets Balance of Power Bloomberg May 8, 2018 12:00pm-1:00pm EDT
the intersection of politics and the economy. david: decision time, president trump is about to announce his decision on withdrawing from the nuclear deal with iran. there are conflicting reports on what he will do. will it put an end to the question or lead to further negotiation? how will u.s. allies react? it is primary day in four states. what will we learn about the elections in november and the odds of republicans holding onto the house? we will meet with tom price, former secretary of hhs. we will talk to him about washington and the trump administration. oil has been all over the place,
trying to react to possible headlines from iran. here is julie hyman. julie: ahead of the announcement this afternoon, there is a lot of confusion as to what the president is going to say. oil was trending lower today after falling yesterday when he treated he was going to -- we weeted he was going to make announcement. it rebounded to some extent after the new york times reported that donald trump that told emmanuel macron of france that he was going to withdraw from the deal. a lot of confusion until we get the news at 2:00 p.m. from a new headlines service saying china and the u.s. will try to find proper deals on trade. this follows what president xi has told president trump.
a softening of the rhetoric at least. if you take a look at stocks, we are not seeing the bouncing around in the oil market. investors are keeping their pow der. the dow and nasdaq are trending lower. someussell 2000 is showing strength. if you look at some of the , yous in the small caps have earnings beating estimates. these earnings winners, if you take a look at the bloomberg, there is an index that tracks average geopolitical risk in the u.s. in 2017, you can see the risk has doubled this year versus last year. some ofps to explain the domestically oriented small caps trending higher versus large caps and what we have seen
particularly over the last several weeks. we will keep watching those oil prices. shery: thank you so much for that. let's get more on that breaking news. the new york times reporting that president trump told emmanuel macron that he will withdraw from the iran nuclear agreement, coming ahead of the official announcement at 2:00 p.m. oil tumbles well below $70 a barrel. we are joined by eli lake, bloomberg opinion columnist who covers national security and foreign policy. if you look at the new york times report, they say it may include additional economic penalties on top of reinstating those sanctions. is this the nuclear option analysts have been fearing? eli: you cannot get much more significant than blacklisting iran's central bank.
that would have enormous repercussions. there would be more sanctions that would have to be waived in about a month that involve iran's oil exports. the u.s. is the largest economy, so these secondary sanctions mean that anyone who deals with iran's petroleum sector or the central bank would have to choose between their ringing economy and -- iranian economy and american economy. it is going to increase the risk enormously already of investing in iraq, which was already -- iran, which was already pretty risky. from that respect, i think it is significant. the last time this was done under obama before the negotiations, there was an enormous amount of diplomacy involved in this. there were other countries working with the u.s. trying to enforce this.
i don't think you will have that this time. that will be interesting to see how this is enforced after the edict is put down. shery: european allies are not very happy with president trump withdrawing from the deal. you have this period of time before companies need to decide what they need to do. it is 180 days, could that be used? e eli: we don't know. that could be more of a grace. -- period. was predicted to happen after 2016 did not happen. there will be more people pulling back at this point like it is a hard stop saying don't go in. david: we are waiting on the president's decision. why do we expect to know the answer that? china,u look at nafta,
steel and aluminum tariffs, there has been a lot of talk, but then the president says we want to talk about it for a while. columnsave written in saying that i think the smart play would be to let the iranian regime twist in the wind because the negotiations could continue with europe. this is a matter of law. this is different. this is a matter of the implementation of the deal. he has to either waive these sanctions or not. that is why this is different from some of the other stuff you mentioned like steel tariffs. ure, the law says that, and supposedly it says we will have sanctions. it is the executive branch that has to enforce those. hat if he tells the treasury branch to hold off? that, suppose he could do
and then it looks like another delay to buy more time. that would be very trumpian. he has a lot of latitude in this respect. it seems with all of the build up and the signals and the fact that john bolton, who has written publicly that the u.s. should get out of the deal for a number of reasons, the positions of mike pompeo, they are moving to getting out of the deal. it could be that he told us to macron but he believes another offer is coming and will get a better deal. i'm not counting on it. shery: mostly because i ran does not any -- iran does not want anything other than the deal now. eli: before this thread was at was complaining
under obama that the u.s. was not doing enough to encourage investment. the jcpoa is so prone to different interpretations that there were always going to be these issues. the one thing you can say that trump has done in the last year and a half is he has deprived hreat toians the t walk away unless they got a better deal. entirely, you out would lose visibility in declared nuclear sites. i don't think anyone wants that. the one side benefit to the u.s. and the rest of the world as it makes it much harder for the iranians to threaten to leave unless they get further concessions. shery: thank you for that analysis. we have breaking news crossing the bloomberg. argentina is starting talks with the imf on a flexible credit
line after news that the argentine peso has erased some losses. now onresident speaking national television. argentina has been taking the brunt of the emerging market selloff, pushing the argentine to a low. david: we want to come back to the discussion on the iranian nuclear deal. one of the members of congress charged with for viewing deals like this is democratic representative john garamendi. they can bring much for joining us. let me start with the most basic question. we are about 50 minutes away on the announcement by the present. do you know anything more than we do about what the president is going to say? rep. garamendi: to anticipate what president trump is going to
do or say is a fool's errand. you talked about geopolitical risks. he is the geopolitical risk. with this particular deal, he may well pull out of it, which would be a major mistake, one with very serious repercussions, which you talked about in the preceding moments. the bottom line of this is the a hadway had one -- jcpo one purpose, to stop iran from developing a nuclear weapons. it has done that. iran has destroyed many of its centrifuges to generate the necessary highly enriched uranium. they poured concrete into the reactor that could have created plutonium. we have access to raptors
throughout the country that could produce nuclear material. working to its intended purposes. what is the result of the president's actions? we don't know, but it could be serious. david: as you say, we don't know. you have said that you agree there are other issues with iran, things like the missile technology and their support of terrorists in the region. don't you agree that however he has come to this point, he has brought the europeans to talking about this more than we ever before president trump was there? rep. garamendi: i don't think that is the case. there has been a lot of talk during the jcpoa process, and it was determined at that time, let's deal with the most eminent problems, which was the development of a nuclear weapon.
there were discussions at that time of these other issues, has a lot, syria, -- hezbollah, syria, support of the islamic state in iran and iraq. how do you deal with that? jcpoa or quite possibly putting iran on the path to pursuing nuclear weapons moving forward to deal with these other areas through the jcpoa? congress has put in place sanctions to deal with the issues of terrorism, the issues of support for the programs we don't like in syria as well as the ballistic missiles. the sanctions are in place. we need to move forward.
do not destroy the foundation, which is the nuclear weapons issue. shery: lawmakers also have a range of options you can take if president trump pulls out of the iran nuclear deal. what do you expect from congress? rep. garamendi: the second most chaotic place in washington is congress. the first most chaotic is the president in the white house. what is going to happen if the president were to pull out? there would probably be a lot of talk for some while. the question is going to be what is iran and europe going to do? our success thus far with regards to iran and sanctions has been the unified response of america together with its european allies and russia and china. pulling out of the iran deal, the united states pulling out, could and probably would disrupt that
alliance, which was the reason we had any success at all. the question is how what europe and russia and china and others respond if the u.s. does try to impose serious sanctions on the central bank in iran? that will have very serious repercussions with regards to our allies in this case. why would the president take a successful program and destroy it with all of the risks going forward t? to achieve a better deal? perhaps. clear reason that it would create a better deal, but it could have a far worse reaction. ,hery: thank you for your time
he says it does not do enough to address concerns with their ballistic missile program. the hang seng and kim jong-un held two days of talks. and kim jong-un have held two days of talks. the new york city district attorney's office says it is opening a criminal investigation into accusations of physical abuse by attorney general eric schneiderman. federmann have accused of physical violence while they were dating. at the he will resign end of business today. he has denied the allegations. global news 24 hours a day on air and at tic-toc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. shery: thank you.
president trump spoke with the chinese president this morning by phone. the two talked trade agreed to stay in contact on the issue. joining me now his ben nelson, a democrat who served as governor and senator of nebraska, a state where agriculture is a key part of the economy. before we get to china, we have to talk about the iran nuclear deal and the new york times reporting president trump pulling out of the agreement. this would put it at odds with european allies with steel and has this putffs, the u.s. at odds with the rest of the world? mr. nelson: i hope not. ignoring the rest of the world is not good for the world economy, not good for the u.s.
economy, and it is certainly not good for farmers and inspectors in the united states that make their living from trade. are a big promoter of nebraska products while you were governor. harderou are job be now? certainty: you need when it comes to trade. that is one of those things we need to respect when it comes to the transpacific partnership. there are other countries are from china we can continue to work with and find relationships with and expand their economies while we expand hours and work with china separately if that is necessary. the trip by secretary mnuchin was very important. i hope this will help us resolve this skirmish or trade war or whatever it may be before gets larger. shery: uncertainty is out there.
people don't want to ship their products to china because they don't know when the tariffs the chinese side could begin. hurting already business in the u.s.? mr. nelson: certainly it is hurting agriculture products manufactured products. we should go to our allies such stableysia with a environment, economy based on their trade, and we can find trade, and we can find ways to work with malaysia that will not be affected directly by issues with china. shery: malaysia, vietnam, all of these countries the u.s. is expanding trade with, but at the same time states within the u.s. rely heavily on canada and
mexico. there have been some sort points within nafta when it comes to agricultural products. you are saying mexico increasing subsidies for agriculture. do you expect any of these issues to be ironed out during the nafta negotiations this week? mr. nelson: they have to be. the uncertainty is not good for the world economy. it is certainly not good for the american economy. they have to get worked out. we cannot continue to live in uncertainty. if you go back to malaysia and area if you think we impacting china by throwing trade barriers on solar panels those are produced primarily by countries like malaysia. you don't want to hurt your other partners when you think you are hurting the person you are having the most the
ultimate. we have to -- most difficulty with. we have to come to terms with china. shery: do you expect a nafta deal anytime soon? the house and senate also have to approve it. mr. nelson: we are not seeing anything happening anytime soon. shery: not within the year? mr. nelson: i hope within the year. no one can predict with any certainty how soon things can be brought together with nafta or china. to get things tpp going with those countries. if we have three things going, we have one that has the potential of working, we have to put our emphasis on this. shery: you are very optimistic. tpp the present has mentioned it, withdrawn it, we don't know where the u.s. stands on it. mr. nelson: ultimately, we need those trade relationships. it will happen.
shery: meanwhile, the u.s. farmer is struggling. according to the omnibus spending bill that was just passed there is emergency assistance for the farmer. when is the right time to trigger that emergency assistance? mr. nelson: we don't want to wait too long, but we also don't want to create a situation where that becomes the fix rather than a temporary situation for people. we cannot let that keep us from continuing to work and find a permanent truthful solution to it that is based on their trade across the world. shery: the midterms are coming in november. cutting soybean imports, the counties that rely most on soybeans, republicans
democrats hold five. how will this impact the elections? to nelson: it is hard evaluate the impact this fall. i am a political observer but not a political scientist. shery: thank you for your time today. former nebraska senator and governor ben nelson. david: comcast is the worst performer of the s&p 500 at this hour. abigail dolittle joins us with details. abigail: there are two pieces we need to focus on. comcast has a formal bid out there for the sky assets in london. according to a source familiar
with the matter, comcast is seeking up to $60 billion in additional financing to perhaps make this bid for certain fox assets including star india, 21st century fox, trying to build up distribution, international, and content. disney already has that bid. possible bidding war here. much. thank you very to thei will be talking disney ceo. live from new york, this is bloomberg. ♪ mr. elliot, what's your wifi password?
so sophie, i have an xfi password. and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. retail. 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 "bloomberg markets." i am david westin in new york. shery: i am shery ahn in washington. we are seeing u.s. stocks lower
today. the dow is down 0.2%. the s&p 500 is being led lower by utilities, telecom, and the energy sector today. wti is moving 2.7%, following the most since april 2. we saw oil prices reaching the highest since 2017 yesterday. we see investors cashing in on some of those big bets. today, president trump announces his decision on the iran nuclear deal today. david: we turn now to mark crumpton. mark: republican leaders have sounded the alarm over today's west virginia senate primary. they are worried about a late blankenship who served prison time and launched racially tinged attacks against
senator mitch mcconnell's wife. republicans are worried that he cannot win the general election against the incumbent democratic senator. while impeaching president trump would be popular in her home district, nancy pelosi said talk of impeachment is a distraction for democrats while they attempt to retake control of the house. she said house members should focus on policy issues such as affordable health care. carryingonvoy of buses opposition fighters have left syria. the evacuation is part of an agreement reached last week between insurgents and russia for those fighters to leave the area or surrender. the syrian government will take control of the area after all of the rebels have left.
french president emmanuel macron led ceremonies today following 73 years since the defeat of the nazis and the end of world war ii in europe. wreaths relay at the tomb of the unknown soldier and charles de gaulle. global news 24 hours a day on air and at tic-toc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. shery: thank you. mp effect will be put to the test today as voters head to the primaries in four states. joined by larry sabato from the university of virginia. which of these votes are the
most interesting and consequential? larry: the headline tomorrow will inevitably be west virginia senate on the republican side however it turns out. there are hot disputes as to what will happen tonight. the reason we are focused on that is there is such a dramatic difference among the three candidates, particularly don blankenship, who is very wealthy, kind of trumpian in a lot of ways, speaks very bluntly, and has a very unusual piece of his resume. he spent a good part of the year in federal prison because of his connection to a mining explosion that killed 29 west virginia miners. even if he does not win the election, he is still going to be celebrating because within this 24 hour period, his parole ends. it is unusual to have someone like that competitive. he is competitive for the
nomination. seeing senator joe manchin in one of the most pro-trump states. what are his chances against a gop candidate in november? if it is don blankenship, i can only tell you what every republican leader in west virginia and national leader have predicted, it is over. they will not invest in the race. i don't think that is possible. even after donald trump, i don't think it is possible that someone like don flickinger could be elected to the senate. kenship could be elected to the senate. if it is one of the other two, i think it will be a competitive contest, and joe manchin will be pressed harder than he has ever been. if don blankenship wins,
then that means likely the democrats will keep one of the seats they are to have. what about the other four states and whether or not the democrats can take back the house? we have to be careful in interpreting primaries because turnouts are relatively low, and they do not reflect what actually happens in november. we obviously look at the tea leaves and some of that is partisan turnout. our democrats still energized the way they have been since trump's election? are they turning out disproportionately at the polls? are republicans energized because trump is doing well on the economy or intervening in west virginia? we will look at the comparable turnout. david: is it possible to over
energized the democratic base? sayingnancy pelosi today let's back off on the impeachment talk. as a practical matter, even if they can get someone nominated with impeachment talk, they will have problems in the general. larry: she is right about this. republicans are using her as the symbol of the democratic party as much or more so than hillary clinton this year. to the extent that democratic candidates for the house and senate focus on impeachment, they are probably going to alienate middle-of-the-road voters. there are not that many, but they can make the difference in close races. actually, people don't want the election to be about impeachment. bey want the election to about the issues they care about. criticize president trump all you want, but calling for impeachment is probably going to
far for this election. shery: how much will the tax cuts play into the election? larry: it is fascinating. the people who follow political ads and see which issues are being discussed have told us in the last 48 hours that the number of ads on tax cuts being promoted by republicans has fallen dramatically. it has fallen even in relatively republican districts and states. that is a sign that the tax cuts either have lost their appeal or they are not high on the the list of voter concerns. david: that is a big shift. always great to have you with us. larry sabato of the university of virginia. coming up, and unlikely voice against the repeal of the individual mandate.
shery: this is bloomberg markets balance of power. i'm shery ahn in washington. inid: and i am david westin new york. one of the things republicans did get done is limit the individual mandate that penalize people for not signing up for health care. underm price who served secretary of hhs under president trump is now the senior health care fellow of the job creators network. thank you for joining us today.
>> thank you. with you today. david: you gave a speech that got attention. of the manyam one that believes this will harm the pool because you have people not participating in the market. that makes sense to me. it will cost more. that is what democrats were saying all along. republicans said we will get rid of it anyway. where are you? dr. price: repealing the individual mandate was important. mandates actually force people to buy things they don't want and drive up costs and lower choices. what i have said and what you identified appropriately is that in that pool, and that exchange market, it affects the cost for other people. , which iser reforms
the key, it changes the price. those other reforms are important to look at. that is why i am excited about what the department of labor is doing to give individuals and small businesses and the small group market the opportunity to purchase the kind of coverage they want. david: we want to talk about those changes, but one last thing. for someone who is not a student of this, why is this different from uninsured motorist requ irements? why is this any different from that? larry: -- dr. price: it may be appropriate to encourage individuals to have health insurance. that is why we want everybody to be covered. we want folks to select the kind of coverage they want for themselves and their families, not the kind that government is forcing them to buy. that is where obamacare got off
on the bronco foot. it was saying the government knows the best for the american people. paid as of americans fine for the privilege of not buying health coverage. that may work for the government and insurance companies, but it does not work for people. i am so excited about what job creators network is doing to encourage folks in small business, which is one area where we have seen a remarkable decrease in the number of folks being covered because of the cost. shery: will that do anything with rising insurance premiums because republicans will have to face the challenge during the midterm elections? dr. price: this is one of the problems, premiums are up and choices are down as a direct result of the affordable care act, the law. when you're not able to have an
overall comprehensive reform, which is what the house passed in the senate was unable to get done, then the consequences are that you have to live with what exists. that is why we continue to need appropriate reforms and the kinds of things sharp graders network and associate health plans will put in place and that the department of labor is working on with a new rule likely to come out in the next month or so. this is exciting because it smallallow smokes in businesses to gather together for the purpose of purchasing health coverage, which is not possible right now. that offers decrease costs, increased choices. shery: in the meantime, insurance premiums will rise. you have written that democrats plan to blame the obamacare debt spiral on the republican repeal of the individual mandate. how do you cope with the results
going into november? would that we would be able to have a conversation about health care that was not politicized. that does not seem to be possible in our nation. what we are living with are the effects of the aca, obamacare dropping of premiums, driving up that manys so much so of my colleagues tell me now that there are patients they have who come into their office for whom they have recommended a procedure and they say i cannot do that because i cannot afford the deductible. this is not a system that is working for patients. this is key. association health plans, the kinds of things the job creators network is working on will truly move us in the direction of a positive solution.
there are still 28 million individuals in the station who do not have health coverage. on the other side act like everyone has health coverage. the fact is a lot of people don't. we need viable solutions. david: love it or hate it, obamacare did increase the number of people with health care coverage. that is reversing again. will these association health plans take up that slack or go beyond? dr. price: i think so. there are easily somewhere around 15 million to 20 million or even more individuals out there who would like a more responsive plan for themselves. as i mentioned, small businesses, which create more jobs for americans than anybody else, two thirds of the jobs created are through small businesses, the number of small businesses that have not provided coverage for employees between 2005 2015
decreased by one third. that is not because they don't want to. that is because it costs too much or the choices are to few . what this potential rule coming from the department of labor will do is provide more choices lowering the costs costs -- david: how long will it take for this alternative to kick back in and reverse the trend in health care coverage? dr. price: it can happen quickly. there was an increase in coverage that happened through the aca, but it had some of the people covered who could not afford the care they need
because premiums have increased and the adoptable's are through ded roof -- uctibles are through the roof. doesn't workn that for individuals. what we need to do is find those solutions that will allow for folks to buy the coverage they want themselves. that is the whole purpose of the s network.or shery: finally, let me ask you about you leaving hhs after criticism over spending. what do you make of the current allegations against epa administrator scott pruitt? dr. price: i cannot tell you what a privilege it was for me to serve the american people as health and human services secretary even for a short time.
we worked tirelessly day in and day out to improve the health and well-being of women people. that is how i would like to answer that question. shery: do you think it distracts from actual policy? dr. price: i will leave that for others to decide. i am happily trying to continue to be a positive and productive voice in the area of health care and looking forward to working with anyone who wants to truly solve problems. shery: thank you for your time pricedr. price, tom former hhs secretary. to that may not translate gains in congress. that is next. this is bloomberg. ♪ is bloomberg. ♪
>> it does. it doesn't necessarily mean it will translate at exactly the same ratios. number ofing a record women running for office. a record number of women in governors races. that has the potential to translate into the record number of women serving as governors. -- there are a handful of states where there are no women on the ballot. there are some prospects that -- of these women could there are concerns about president trump. it is a combination of two things. it is a reflection of consistent years of women rising up through
offices. david: sorry to interrupt. we have an instruction on the bloomberg saying that president trump has decided to pull out of the iran nuclear deal. we are now reporting that on the bloomberg that he said to decide to pull out of the iran nuclear deal. they: whether or not impose additional economic penalties will be an issue. if they do pull out of the deal and put additional sanctions on iranians and businesses, how big of a deal is this? is this the nuclear option? margaret: we are seeing a real effort by europe to hold this deal together and some interest on the part of iranians to hold the agreement together. the global climate deal that the
u.s. doesn't want to play ball, they don't need the u.s.. david: finally, he is negotiating with the europeans and iranians at the same time. margaret: he is also negotiating with the midterms and his party. this is a multilateral, multinational party. -- agreement. this is huge. david: we have the headline saying president trump has decided to a lot of out of the deal, something reported earlier. thank you very much for being with us today. coming up, president donald trump announces his decision on the iran nuclear deal. we will have complete coverage on bloomberg. this is bloomberg. ♪ is bloomberg. ♪
the president will officially announce his decision at 2:00 p.m. washington time. he has called it the "were still ever." -- worst deal ever." iran can theee program but also become a nation is not funding terrorism and not attacking israel and not looking to continue to attack allies we have. mark: eight months after hurricane maria struck causing the largest power outage, 23,000 people remain without power. u.s. officials say they plan on winding down the efforts on theto rico and will return remainder over to local officials who struggled even before the storm to provide reliable electricity. but the army corps of engineers and others say they will wrap up restoration efforts by next