tv Bloomberg Daybreak Australia Bloomberg June 11, 2018 6:00pm-7:00pm EDT
>> next few hours, we will see history being made. the summit at the capella hotel is outcomes. haidi: the world watches this remarkable event. no sitting american president has ever met with a north american leader. pecial coverage of the tp ummit. >> the preparations are done. and all culminates to today where it starts with the firsthand shake when president trump and kim jong un in less than three hours time. the stakes are ever higher and expect the unexpected. this is going to be a one-on-one
conversation along side their interpretters. we could be seeing surprises and jong-unfanfare when kim made a midnight stroll and taking selfies. it certainly was a sight to see. wasn't all work and no play and certainly, it is a pretty common popular for them. nice to know that the north korean leader is not an exception of wanting to see that beautiful view. ving a little bit -- part of that entourage. look at how the markets are digesting the day before this historic event is about to happen. ant session.
give up some of those earlier gains and managing to close in positive territory. the risk for investors, looking past this event and more into the fed in the second half of the week. let's look at how we are setting. a holiday is in session in indonesia and the phillipines are off today. but setting up going into the early opening. sydney futures and little bit of resilience for these risk currencies. and let's get into the meeting between the u.s. president and north korean leader. we are on long at sentosa island in front of the capella hotel. set the scene for us why the early departures for these
leaders? >> what a night, i went to bed about midnight and so much was happening. but i had to get the rest because the day is the big day and culminates in that face-to-face. and we are here on the island. you can't see it. the sun is not up yet. will be up at five minutes to 7:00. but the capella hotel. and what a night it was coming out of the hotel and being seen n public and going on that walkabout and that is the key as come jong-un and preside trump, how are the talks going to go today and going to center ound the u.s. assurances for kim's region emsecurity and that he is committed that he has
repeatedly said to complete denuclearization. that is what the first minutes are going to be as well, to establish that kind of rapport and will have talks until the afternoon and we are learning that kim jong un will go back to pyongyang at 2:00 p.m. president trump will have a press briefing before wheels up at 7:00 p.m. so much for the possibility of day two. the reason for this, miami pompeo saying that talks had been progressing faster. i s that's a goosign. if things are going quickly, but it looks as though they are putting a positive spin and finding common ground. when it comes to what we
heard from the secretary of state, you mentioned about the secretary of guarantees that the u.s. may offer, perhaps offering different options. >> that's right. let me read some of the comments and put on my old-man glasses because it's dark and i cannot see. mike pompeo said it's the only outcome that the united states will accept, complete verifiable,rreversible denuclearization and said that maximum pressure will continue. they must get some sort of timetable and their position, the united states' position has not changed on that matter. at the same time, mike pompeo said they are willing to offer some sort of unique guarantees. we don't know what that means. let me read what mike pompeo said.
that looks like they are going to be offering some sort of unique scenario, but at the same time, it has led to speculation that the united states may offer some sort of withdrawal of troops from asia. there are 28,000 soldiers in south korea. james mattis says troop levels in asia will not be on the table. a couple of mixed signals there. >> uld raise eye brows among the allies. the precursor was that night-time stroll made by kim. he was waving, smiling. what can we glean from his mood
last night? >> well, you can demreen that he seemed to be in a pretty jubilant mood. he was smiling and there were crowds and odd that they were cheering him on. ut the real star was the singapore, maybe the first ever selfie with a foreign dig in a tower with kim jong un. it is being called the big walkabout and taking in the sites. maybe it is addictive. >> we'll see how the selfie game plays out. our north asia correspondent joining us from sentosa. the market highlights that happened on wall street, they shrugged off the trade drama and
if we go into the bloomberg and u.s. volatility. the index, the korean index here, you can see it has been up. but we are down and slightly moving higher but still below average. oil, above average reaction to a pipeline crack in nigeria. and focus on the opec meeting and highest we have been in a eek.
daimler has denied cheating and escaped more costly measures, such as fines. the crypto selloff is deepening nd wiping $40 billion. it's extending the 2018 slump to 50%. they pin the retreat to an exchange in south korea and thers say it is fromal clamp down. and market manipulation and money laundering. ♪ >> still ahead, just hours ahead of that summit and dig into the role of economic sanctions with
>> and seeing unified korea and using that as an element in its containment strategy towards china. >> when you think about what the united states is actually willing to depiff the north koreans, the north koreans are not going to depiff awayir nuclear weapons. what is the price here, really? and some assurances are going to have to be offered. you might get a declaration of an intent to replace the armistice. but i don't think the united states will sign a peace agreement with the nuclear north korea. >> that was the global reaction
ahead of president trump's summit with north korea. let's bring in the executive director. phillip is a former senior adviser to the assist anti-secretary of state and joins us from san francisco. phillip, thanks for joining us. a tweet that the president put out. he seemed to be up this hour and said the fact that i'm having a meeting is a major meeting. we have our hostages testing and all missile launches have stopped. and they have nothing else with we can say. how prepared is the president do you think he is? >> he says he can assess kim jong un in minutes. i'm doubtful. but i'm confident about the people who are supporting him.
i think the folks at the state department and those who have been supporting the c.i.a. are well prepared. i hope they have done an incredible amount -- i know they are working around the clock. i'm feeling there is going to come something out of this that will make us hopeful. whether it amounts to anything. it's about in the follow-up and what happens moving forward and that's unclear. >> we learned they are going to kick this off with a one-on-one along side their interpretors. what is the risk reward and who stands to gain with with such an intimate setting? >> the buck stops here but it stops with kim jong un. when he makes a commitment. there is value related to that. and donald trump is his own decisionmaker. there is value and both of them coming together and having a
conversation, i think if i was donald trump, there are four questions he has to answer, is north korea willing to give up the nuclear weapons? it's been a while we had a conversation, buweon't know and we have to hear it. are they willing to give it over the short-term, which i doubt, medium term or longer term? and the third question is how much is it going to cost us and what does north korea want? we don't know. and can the united states actually politically and the international community pay that particular price. these are all unknowns, but it is now finally noticeable and those questions if we answer them will determine whorn we can make a deal with kim jong un and north korea after so long. > kim and his military certainly not interested in giving up their nuclear arsenal,
but a lot of uncertainty. you point out the gap where the likes of pompe how much pressure is the president under toave these different parties and you can see itough the tweet earlier? >> there is ongoing battle in the white house and in the u.s. administration, people who believe that negotiating with north korea is wasteless and there are others that i would say don't trust north korea but want to find out. from my standpoint, sin it is noticeable and we have the opportunity to find out, if we are going to base a decision such as risking war and hundreds of thousands of cambingts as a result of threats and miscalculation, which could happen on the peninsula, i want to make sure we are going to do it based on facts and not
assumptions. that's what is the most important thing out of this particular summit to find out what we can and based on that and hopefully if we get the right answers to set a process. setting high expectations of north korea giving up its nuclear weapons in the space of two years is not in the cards. if that's what the u.s. goal is going to be, it's going to end in failure. >> how risky is this tactic where you have the u.s. going into this with a very specific set of demands as to what denuclearization needs to be. what happens if kim doesn't come to the table with these requirements, does that take us closer to the cusp of where we were six months ago? >> we cannot -- if we try to get
-- i think this is an opening bargaining position. if it's our desire to have complete peace and nuclearization, this will break down and go back to where we were less than a year ago with more nuclear tests and more threats. this is not where with want to be. you have kim jong un who is relatively inexperienced and quite aggressive and loves predictability. the same goes for donald trump. in a one-on-one, anything can happen. this is why people are a bit concerned. both of these leaders and the leaders of china and south korea want this to succeed. they are going to be on their best behavior and bridge whatever gaps they have and move forward. >> and phillip, i mentioned here
back in 2000, you were part of that delegation that traveled to north korea with madeline albright. you know how theyperate. what can we make of these latest moves dictating when to leave their negotiations. they think they are going to pack their is this a positive sign? >> it's unclear. it could be a sign, that the u.s. government is saying things are progressing quickly. north korea's bargaining tactic is to keep pressing and pressing. this is a summit. so it will be very interesting to see what happens. we know that north korea has wanted the summit. when i was in government, the
north koreans wanted kim jong ill to meet bill clinton and he met the number two envoy and they were motivated to move quickly in many respects. that's the dynamic here. but very much, they are holding everything in suspense and this is a reality show for real and see what the outcome is going to be. >> tweeting it out on twitter. just a couple of hours now away from that meeting. and you can get a roundup of the stories you need to get your day going. top story, showtime with the summit hours away.
minister towered. and trying to spruce up his image. he tested nuclear bombs and long-range ballistic missiles. mattis has suggested that troop levels won't be on the table. any discussion about reducing the soldiers in south korea would be between washington and seoul. u.s. first repeatedly said that the trump administration is willing to offer security guarantees. the u.k. prime minister is in advanced talks to hold off talks . we are told that the brexit secretary is back to an amendment. brexit legislation goes to parliament. .he faces
powered by more than 2,700 jourmists in 120 countries. this is bloomberg. china is nt officially represented but that hasn't stopped beijing from making its presence felt. we are having more. how beijing trying to assert its influence. >> you may have well noticed when kim stepped off the plane he was coming off an air china 747 that was provided by beijing and the analysts are saying it was sending a message saying we have your back from china. china has a lot at stake even if you say not an active
partnership papt in the talks that is going to take mace, pause if these talks fail, thin there is the heightened risk on china's border. if they succeed, there is a risk that pyongyang is drawn closer. so there are those aspects to consider and kim jong un doesn't have the aircraft to have made to scrourny from pyongyang singapore safely. hence the need. it's the same plane that president xi uses. so the symbolism is there, chipe saying, we are supporting you and saying to the rest of the world we are having some influence as these talks get under way in singapore. >> what is the desired outcome. what would beijing be hoping
for? >> the scenario for beijing would be to see reduced tensions and a drawdown of u.s. troops in south korea. pyongyang's void flipping. and in terms of any successful summit, beijing will want to be involved and also involved in the opportunity around rebuilding north korea's community. and interesting we have seen talking about china, flights pyongyang.jing and and we shouldn't forget that relations were very frosty since 2012, 2013, when you hat jim jong-un and refusing to meet with president x inch and he executed an uncle who was a key liaison and alleged to
assassinate his half brother and china played this crucial role. so you have had a rap i had about-face in the relationship between them. kim jong-un coming over to china. so the chinese wanting to improve the relationship and make sure they have a foothold n the process going forward. >> a crucial element in the puzzle piece of negotiations. we are a couple of hours away. let's look at what we should be watching. and we are seeing efforts pretty much going into the summit. any signs? >> not a huge amount. i was looking at volatility gauges and earning at levels
that they were at the independent of last month. we are going to get a lot of watching and waiting during the day. creep assets haven't had a particularly good last few weeks, i think some of the trade tension have been a big part of that. but one sign we did get a sign of nervousness is the e.t.f., major outflows on friday. friday actually saw a lot of riskoffs and that was in general. we have the g7 and the korean summit and the feds, e. crfrlt b. and brexit and all the rest of it. i think it was a good time to take mup out. now watching and waiting and see if that money comes back on the
sidelines. we have to chart up now and find these charts in the library, about how the price to book ratio has lagged behind the global index and wide end in recent years. that is your korean discount there. if we do get a good result, you would expect korea to catch up and outperform. and asian investors, good news these days. bust-up heightened trade wars and concerns. china, one of the biggest losers, what can we do to turn things around? >> china has a lot of inside domestic concerns as it seeks to transition and that's part of
what has been driving again and another chart we will pull up for you. and the chinese market stayed down and kept going south. part of that what is going on domestically and trying to manage liquidity and they wouldn't allow liquidity to get tighter and some people say to loose yep it. but there needs to be progress on the trade spat with the u.s. and if we get a good result out of the korean summit today, that would create cooperation. perhaps behind the scenes and we could get some progress between the u.s. and china on trade. >> probably what the market are
and demands that the u.s. remove nuclear weapons. trump will want to see the time line. >> washington saying nothing less than complete denuclearization. one big question looms, how much will it cost? our editor has been looking at this. how do we start to tally this bill? >> one way to look at this in cost is looking at the costs of kim jong-un. we know that president trump has dangled the possibility of economic aid and assistance but he has threatened sanctions if no deal is made. here is secretary of state mike pompeo. >> the complete and verifiable and irreverse able denuclearization of the nuclear.
sanctions will remain until north eliminates its weapons of mass destruction programs. if diplomacy does not move in the right direction and we are hopeful it will continue to do so, those measures will increase. >> let's say a deal is made for the korean peninsula. ization of how much will it cost. a study that tallies around $20 bill. they start by comparing this to denuclearization of the awe crane. u.s. provided about a fourth of that. they say the dismantling of north korea's arsenal will be $5 pillion there is a 1994 agreement to build light water reactors. that is $5 billion and economic aid taking 3,000 to 10,000
workers in north korea's nuclear industry. stanford university said it wil and interesting that president trump when he talks about paying fothe cost of all this, he said north korea should be looking to the governments of outh korea and japan for that. haidi: how more these sanctions could impact. joining us on the line is dan the principal and global financial sanctions leader. how much in your notes, nine rounds of sanctions since 2006. we have been here before although not with a u.s. sitting president. how much are you tempering? >> it's a bit of grouped hog day
of people who spent years. there have been attempts to try and push north korea towards having a deal on the table. but any sort of tangible movement in the poft steps will be the opening of a discussion because this is a regime that spent building up their nuclear weapons technology. haidi: i want to put out this ick chart how we had is some exuberance and if this is successful conversation and business opportunities going to the north, this is a chart showing the erm industries have and surging while the kospi that came up after kim said in the second meeting that key
infrastructure in the north needs updeprading. are investors getting ahead of themselves and that you actually see a pent-up flow of business coming through? >> investors are getting ahead of themselves. if you look at the outcome of the iran deal, sanctions released don't force businesses to come back in even i sampings are relieved. businesses and banks won't likely pick up the activity for fear of retaliation from the u.s. regulatory regime. i wouldn't expect to see any sort of significant sanctions. if any sort of relief is to come, it will follow the model of the iran deal itself which was labeled as the worst deal which forced the iranian deal in terms of relief once that
commitment has been verified. >> i guess i'm curious how complicated will the process be of winding sanctions and building the infrastructure for business to occur?>> i think th involve presidential executive orders for the government to wind back the sanctions that have been in place. you have to remember there is a fairly significant multi lateral package which has to be unwound. o once those regulations being wound back, you begin to lay t groundwork for business to re-enter. you would likely see a measured approach. and you wouldn't necessarily see large retail companies being the first on the ground. >> dan, we heard stern words
from mike pompeo reiterating committed to is this denuclear rizzation, this is going to raise eyebrows and more relate particular to do a temporary sanctions relief? >> you are going to see if there are some sort of commitments made on the part of the north korean regime that could be argued as a victory. and so much ends up being the optics of how these individuals are playing to their home audiences in what determines success and the u.s. has laid the grouped work saying complete denuclearization means. we don't know what the north koreans are looking to get out of this but the summit is a
significant step forward to legitimatize the regime. >> we are seeing quite a bit of plomed. he has met with the south korean twice and president x inch twice. does that limit the white house its campaign? >> it doesn't limit the trump house. we have seen them go against the allies. i think you will hear the cry of denuclearization, but there is a there is adebate and definition between the u.s. and north korean regime. >> we talked about the parallels of iran nuclear deal and what could come out with north korea. do you think if we see some type
of limited relief, this could prevent one of the outcomes we got from the iran deal where u.s. companies were no longer able to operate in the country but european and asian companies could? >> there is some irony, if they embark on that strategy and follow that medthoddoling, the challenge that the north koreans can look at the deal and basically walk out of the deal. i'm not sure what kind of confidence that could inspire and the deal to relieve sanctions if the u.s. has shown an ability to not maintain the deal that it maintained a few years ago. a lot of hint calls.
they are looking for a new c.e.o. plans to merge a gas pipeline into one company. regulators want to combine oil before ipeline assets the northern winter. and there is a $250 million investment in a data storage firm. three ing included companies and takes total equity rates. that is for us. taking a look of what is coming p. >> yeah. all these stories today. we are going to take the group, joining us to talk about what's
to come here. the high politics, high-stakes talks. it could be a couple of hours, because the north koreans are ready to and press believing with president trump in the afternoon hours. one-on-one meeting, what are the riskswith just president trump and kim jong un and the former ambassador to south korea to talk about what is at stake and how this is drality show that is coming into fruition. we saw the drama yesterday when im jong union made a moonlight stroll.and director of ritz res joining us. theyd career expert of how operate and their style when it comes to their high-level talks.
pres. trump: a year of strategic patience. regime hasorean failed. they will be met with fire and fury. man is on a suicide mission for himself. sensely believe it makes for north korea to come to the table. we are going to make a great deal for the world, for north korea, for south korea, for japan, for china.