tv Bloomberg Markets Balance of Power Bloomberg September 21, 2018 12:00pm-1:00pm EDT
i am david westin and welcome to balance of power, where the world of business meets politics. theresa may putting it to europe. kevin cirilli on capitol hill on the confirmation of brett kavanaugh and president trump calls the question on china. first, london. we had a dramatic announcement from theresa may as she said she is sticking to her core, is this where we need to get to where brexit? >> it has been humiliating week for theresa may as she woke up to gruesome headlines in the newspapers after a terrible summit in salzburg, austria where she went hoping to have warm words from her fellow eu leaders but they rejected her so-called brexit plan for a future and she has come out and set it is not good enough and you need to show me some respect. she was angry and annoyed. if we step back we have to see
that this is also maybe part of the theatrics of the negotiations appeared some eu officials said they expected her to say the kind of things she had said and help desk and still hope for a deal in october or maybe november. -- and still hope for a deal in october or maybe november. david: something going on at capitol hill regarding brett kavanaugh, will we have a hearing? >> we do not know, dr. ford said she cannot make it on monday but is willing to testify, so when would the testimony take place? she alleges sexual misconduct against judge brett kavanaugh at a high school party 36 years ago, allegations that the judge denies. within the last 12 hours, mitch mcconnell saying privately and reportedly that he doesn't believe he has the votes to get judge kavanaugh -- he does believe he has the votes to get judge kavanaugh confirmed, we do not know when the boat is,
likely not before october 1 deadline. republicans optimistic they could get the vote when that comes. he republican senators undecided, murkowski, collins, a host of other senators, jeff flake, a source said that he is urging the white house not to stop communication with senator flake given their back-and-forth history of how critical senator flake and president trump have been of each other. the president also tweeting out controversial statements against dr. ford which have gotten rebukes from victims right advocates. david: we will get back to those tweets. we go to washington to learn about trade. so much on trade, specifically the president said it is time to put the question to china. >> absolutely. donald trump showing no signs of backing down on china, telling fox news yesterday that it is
time to stand up to china. that is what he will be doing on monday when tariffs on another $200 billion in chinese imports take affect. we are in ramping up mode in terms of the trade war with china and the big questions about the endgame. we should remember that there is negotiations going on over nafta. it is not clear when we may get a deal between the u.s. and canada. the trump administration trying to increase pressure on canada to do something. a lot going on on trade which will continue to the next couple of weeks. david: thank you, shawn. let's go back to london. let's talk about theresa may and what she had to say, this is what she had to say earlier today. >> no one wants a good deal more than me but the eu should be clear, i will not overturn the results of the referendum, nor
will i break up my country. we need serious engagement on resolving the two big problems in the negotiations, and we stand ready. david: she is ready, the europeans ready? she went to salzburg and said here is our proposal and they said no thank you. click, -- after that clip, she looked at the people in front of her, and turned around and walked out, wanting to show the eu she wasn't avoid. -- she was annoyed. one of the interesting things in the speech she gave, despite the rhetoric, there was a hint she is ready to compromise and ready to make a few concessions on the key sticking point, the irish border issue. had a plane may be around the northern irish border that she would put forward.
this is the interesting dynamic in play, the way theresa may has handled negotiations. she did it in july with the chequers deal and needs to satisfy both sides of her party, satisfying hartline brexiteers and those who want a softer brexit. bossi says u.s. prepared to walk out if the eu would not give her what she wanted, she was hinting of a compromise. a bit smarter than people think she is. david: maybe but we have a question not only about the substance but the process. how could it be that she went in to salzburg and was surprised by the response of the europeans? tells youour staff what to expect. >> that is right and the morning she read a strong opinion piece in the european paper that did not go down well.
it, other way of looking at some of the european leaders did have warm words for her. it was a lost in translation and lost in the cultural differences and maybe britain's expected something warmer than they thought they were given. in two weeks, theresa may has a conservative party conference, which will be difficult for her, given that her party is split down the middle on brexit. david: how confident are we and is she that she will come out of the conference still the leader of her party? >> she has survived this long, and one of the key points about theresa may's leadership is that nobody else wants the job. probably one of the worst jobs to have in britain, if not in europe.
there are people who want to be the leader of the conservative party, but they want to be leader bobby brexit negotiations are done and they can take over -- when you brexit negotiations are done and they can take over. david: not a good thing when you have a job because nobody else wanted. time for a check on the markets and we go to abigail doolittle. >> relatively small moves for the major averages, modest gains on the dow and s&p 500, but another day all-time highs for the dow and s&p 500. yesterday for the doubt was the first all-time high since january. some bullish conviction and for the s&p 500, up nine of the last 10 days but the tech heavy nasdaq has slipped slightly in over, the emergence is interesting because of -- the emergency is -- dow and s&p 500 higher. let's look at a five day chart of the dow, on the week, a very solid game, -- gain, the numbers
are wrong, the dow up more than 2% on the week, on paper the best week since june. investors looking past raise fears -- past trade fears. nasdaq only slightly higher. interesting to see whether the tech heavy index can close higher on the week. apple, amazon, adobe, all down, not big but these are the big point drags. nasdaq on pay for the monthly decline, the first since march. a lot of technology companies have exposure to china. overall, investors with the dow and s&p 500 choosing to look at the strong economic data. that is true of the 10 year yield. the 10 year yield this week of eight basis points, that tells us that haven bonds are pulling back and we do have the 10 year yield well above the 3% mark, head of next week's big that
man with an impeccable record -- reputation who is under saw by radical left-wing politicians." the president has questioned why like user christine blasey ford -- accuser christine blasey ford did not file charges when he allegedly assaulted took place. has said -- the justice department internal watch job best watchdog has been asked to look at documents from the russian mitigation company president had earlier ordered the documents declassified and he said then that that that would explain -- expose really bad things at the fbi. theresa may is sticking to her guns when it comes to brexit. she says divorce negotiations with the european union are at an impasse. the two sides divided over the irish border and the future economic relationship. theresa may said --
>> no one wants a good deal more than me. but the eu should be clear, i will not overturn the result of the referendum. nor will i break up my country. we need serious engagement on resolving the two big problems in the negotiations and we stand ready. may beicane florence gone but the storm is still causing problems for people in south carolina. a new round of evacuations was ordered today as the trillions of gallons of water dumped by florence continues to go riverream and raising levels and threatening more destruction with 55,000 homes and businesses are still without power. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg.
david: thank you. it is friday and that means time for the end of the week review on politics. with our political roundtable. welcome jeanne zaino and joseph presidentho served in george herbert walker bush's white house. john -- joe, i start with the tweak from the president -- he said i -- if the attack on dr. ford was as bad, charges would have been filed immediately by her or her loving parents, i asked she bring the filings forward so we can learn date, time, place. as somebody who worked in a republican white house but as a pastor, if this language helpful to anyone? >> i do not know if the language is helpful, the president is a very shrewd politician.
even though he says he is not a politician, he is shrewd and the tweets have an impact. he knows that kavanaugh is about 10 points worst in terms of people opposing his nomination in public opinion polls then a few weeks ago. president trump is working hard to change that. to bring the numbers back down and improve his favorability rating. i think people want a fair hearing for the accuser and for brett kavanaugh. that will be hard. it will be very, very hard for a fair hearing because this event took place decades ago and there is no credible evidence to my knowledge. but we want to see a fair hearing and hear what the accuser has to say, and what kavanaugh has to say. david: the implication or the statement, if there has been an event, it should have been reported, that will resonate with women because we have
talked to victims and there are all sorts of recent a woman who has been attacked may not report it. -- all sortsrrect of reasons a woman who has been attacked may not report it. >> that is correct. i think the president is looking at how does he support this supreme court nominee whose polling numbers are trending in the wrong direction. i think he is making an effort to send the polling numbers the other way. what really matters is how the senate feels about this and how they are likely to vote, and whether there are enough votes for kavanaugh to be confirmed in the end. i think he still has the votes he needs to be confirmed but there are key votes that will determine this, susan collins, various others, red state democrats who will have a hand in this. david: mitch mcconnell says he apects a vote and
confirmation, how may this affect the midterms? the new york times says evangelicals want him confirmed or they will not vote. >> i would respectfully disagree with my friend, reverend joe, who i am delighted to see but i do not think the president has made a good political and sound judgment with the tweet. he was doing a good job the last few days but what he has done now is not understanding the 35, 36, 40 women, years ago and which reporting these incidents is as a teenager was almost unheard of. to suggest that is evidence it did not happen will rub very many women wrong and the political problem from the president is this, this accuser is facing an all white and male senate judiciary committee on the republican side. women are the key to this election. republicans are losing women in droves.
as voters and as people running for office. republicans have to be very worried about this. i do not think it is smart for the president. up until the day, i gave him high marks for the way he handled this. what should happen is the republicans, judge kavanaugh, everyone should be asking for an investigation into this. that is what happened with anita other cases inl which these allegations have been brought forth during a confirmation hearing. that is what needs to happen. i agree with the reverend that a full hearing on both sides. david: another issue in the midterms, and rnc commission saysis out that basically the republicans are losing the battle on tax cuts because most people think it is for the rich and not for middle-class families. this is an rnc sponsored poll and they said that we have a
problem. is that your perception? >> i think so, democrats have a lot of momentum into the with as, not unusual republican president and a republican house and senate for democrats to have momentum going to the midterm. republicans have a challenge with their message and the tax-cut, which should have been a good talking point for republicans running for reelection in this cycle, is a challenge because it looks like it was done for the rich and changing that message, changing that opinion in the minds of so many voters who are charged up about other things, whether russia related charges or the supreme court hearings, makes it difficult for republicans in this cycle. i still give democrats the advantage in flipping the house. they are making strong headway in the senate.
if you look at texas and arizona, and nevada, three states where it is anybody's guess who will win, republicans running for reelection will be able to retain those. question, theer way the republicans and democrats perceive the economy going into this election. there is a great and growing favors,ce between which republicans being quite pleased with the economy but democrats not so much. >> that is something we have seen in the past midterm elections. by and large, the economy, the numbers have been good. it favors republicans. both unemployment rate and how well the country is doing in terms of the stock market and in other ways. the problem is what you just mentioned in terms of the tax bill. many democrats feel that there are certain portions of this country that are benefiting from
this strong number. and those tend to be people of means. other people are being left behind. that remains a huge kabul for republicans, particularly in the states donald trump, to his credit, flipped that other republicans have not, that is where the terrorists come in. -- tariffs come in. as we go forward, states in which the terrorists hit hard, he will -- tariffs hit hard, he will have trouble. david: thank you to jeanne zaino and reverend joseph watkins, former aid to present george herbert walker bush. a new national lender for germany, the germany governor meeting between two of the countries biggest banks and a tie up between them. this is bloomberg. ♪
you are watching balance of power. i am david westin. deutsche bank is our stock of the hour come in the crosshairs of the german government because stocks rising on a report that the german government is set to favorite merger with commerzbank. emma chandra is said to tell us about it. >> according to bloomberg reporting which is according to sources in germany that says the german government would favor a tie up between deutsche bank and commerzbank to create a national lender, the first and second largest bank in germany. the government is set to want a strong domestic bank for germany and a merge between them, they think that the domestic tie up would be useful in terms of creating and that's a bank that could finance germany's companies, should there be a financial crisis and when a foreign investor may be likely to pull capital from germany. germany has a 50% stake in commerzbank which states back to
the on enterprises and are very interested in what happens. no comment yet from either deutsche bank were commerzbank. david: the german government saying it would be ok, but what does commerzbank under -- deutsche bank want to do? commerzbank has said we think we are just find the way we are. >> both of them have had struggles, a chart which shows how they have been performing year to date, both doing pretty badly. both have been questioning the viability of their long-term strategies. this focus is on deutsche bank, it is lagging the american peers. the white lineis versus jpmorgan is the blue line and city which is the green line. -- citi, which is the green line. it needs to catch up with its american peers. a merger between them what
create some synergy and may help strategically. there are those that say another european bank might be the best. david: a fascinating development. if you take two companies and make one, typically you do not get a healthy company. , whatvoter participation can be done about it, we speak to a man who has written a book on the subject. that is next and this is bloomberg. ♪
the latest round of u.s. sanctions as unfair. blacklisted 30 russian nationalists and three entities on thursday for russia's interference in the 2016 election.al washington imposed sanctions on the purchase of russian weapons. china has amended the sanctions be revoked -- demanded the sanctions being provoked. pope francis has accepted the resignation of two bishops and chile. in june, all of chile's bishops offered to resign. he has now accepted the resignations of seven of them. a private survey conducted for the republican national committee finds nancy pelosi is more popular than president trump. pelosi beats and when the midterm election his friend is a contest between the two.
it was conducted by public opinion strategies. bloomberg businessweek obtained a copy. midterm elections are officially underway while election day is technically november 6. early voting began today in minnesota and south dakota. four more states begin voting in the next week, including key states like new jersey and missouri. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i mark crumpton. this is bloomberg. david: thanks so much. voter participation has been a cause for concern, maybe even for dismay for years. professor alan lichtman has studied the question and written about the causes and possible solutions in his new book "the embattled vote in america." welcome alan lichtman from washington. i want to start with a quote to summarize for me a lot of the
reason you wrote the book. "the only cure for an human democracy is more participation in voting and representation by ordinary americans. common sense reforms, most of them within the authority of congress, would recharge the dimmed beacon of american democracy." that is a lofty goal. is it anyway to achieve it? allan: the way to achieve it is the have the american people demand it that is how we got the great civil rights advances of the 1960's, because of a grassroots movement. perform almost never comes from the top down. it almost always comes from the bottom up. i wrote the embattled vote in america to alert the american people to the fact that they don't have a constitutional guarantee of the right to vote. that their voting rights are perilous and fundamental reform is needed, and they need to
demand it. david: it's a really detailed account of voter participation. you describe how dismal participation is in the country. it compares to -- compares unfavorably to other countries in the world. world. 50% voters dissipated in 45 contestant states in 2014. the situation is really dismal. they thought they had a constitutional right, but back at them out of the house to vote? allan: i think it would make a big difference of people have a constitutional right. it would spur turnout in terms of people's motivations, what it would also be a powerful tool for combating what is going on today in our country. that is efforts and voter suppression. it takes many form.
stringent photo voter id laws. trek coney and purges of voter rolls. draconian any and -- purges of voter rolls. in this country we have egregious political and racial gerrymandering, which in effect makes politicians rather than voters decide the outcome of elections. if we had a constitutional right to vote, wicked have affected challenges to these egregious mechanisms that disenfranchise many millions of our fellow citizens. said: will rogers famously "i don't vote. them."d only encourage when it comes to trust in government, and we will put up numbers from your book about how dismal this is, is it a cause or effect? is if people don't trust the government to carry it out or
they don't participate in voting that reduces their trust in government? allan: it is both. one effect reinforces the other. is the unfortunate effect of low turnout. when turnout is low, it enables wealthy special interest groups to gain outside control of our elections. and low turnout elections, endorsements, money makes a huge difference. elections are tilted away from the will of the people and towards the interest of the very few. there have been shattering political science studies that show an america ineffective use of ordinary americans count for nothing. whenever they clash against the use of wealthy special interests, for near americans lose. they are not going to win unless they close the turnout gap. it is a crying shame we are near the bottom of other advanced
democracies when it comes to voter participation. david: you not only diagnose the illness that you have some prescriptions. things like reducing gerrymandering. things like making sure voting is on the weekends. you talk about registration promoting, particularly in oregon. they adopted a law that seven get agistered to drivers license, you registere to vote. interesting is increase voter turnout apparently by 4%. allan: that's right. perhaps a quarter of americans are automatically disenfranchised because they are not registered to vote. it is a two-step process to vote in this country. every other democracy has government assistance and government help to get people registered. we are the only advanced oregon and other
states are following suit in saying when you get a drivers license or review your driver's license, you are automatically registered to vote unless you opt out. this could be extended to people who apply for any kind of government assistance. as you saw from those statistics, it gives a real shot in the arm to voter turnout and make some difference for our democracy. it is something every state should do. david: what was striking about the numbers was all of that uptick in registration came from young people. 18 to 29-year-olds. allan: the lowest turnout in america is among young people. to a great extent that is because they are not registered and because they are not motivated, and things like what is going on in oregon make a big difference. the other reform that would make a huge difference for voter turnout is same-day registration. a number of states have that as well. you can register on the day you
show up to vote. these are common sense reforms that congress could enact overnight. unfortunately for one of our parties, the republican party, they think glover to turn out, young peopleamong and minorities help them so they don't want increased turnout. about howhave to talk that might overcome impediment. american university history professor allan lichtman. congratulations on the book. talked to the supreme court clerk who worked in the judiciary committee, susan estrich, on brett kavanaugh. this is bloomberg. ♪
of power. she was the first woman to head the harvard law review and work for justice stevens on the supreme court, work for the judiciary committee under teddy kennedy, and ran the presidential campaign for michael dukakis. she comes to us from los angeles. it is great to see you. you and i worked together once a long time ago. susan: we want say how many years. david: i don't want to think about that. we will start with the judge kavanaugh nomination, the talk of much of the nation. you have written a piece on the subject. "this is not the right place or time or way for national referendum on the me too movement. even if the headlines try to collect that, we should be honest enough to admit it isn't what this is at all." an interesting point. let me ask you something maybe related. too,e had not had me
would we be in the same place? do they deserve credit or blame for the same attention given to this? susan: i think he gets credit for the fact that we now are not tolerating conduct that was once considered acceptable. i think that is an enormous step forward. what i meant was that it was just a few years ago that al franken was under attack for hugging and touching in a comedic routine. all my friends on the democratic said, what is the big deal? it's just a hug. it is comedy. this is nothing. and we all switched sides again. it is hard not to notice everybody on the democratic side is sort of saying, it's an attempted rape. people on the republican side don't know quite what to say. is, is this is, is this really
the key issue for kavanaugh? i have a lot of issues in terms of his position on choice, on guns on assault weapons, but i'm not sure how we will get to the bottom of what happens at a party 30 years ago, and i'm not sure we should be trying on national television after the hearings are already over. if you are back in your old job at the judiciary committee, and it would be greater teddy kennedy was with us, would you be urging him not to call her as a witness and not keep the hearings open? would you just say let's have a vote? susan: what i don't understand about this is when you get a report like this, whether it is on a nominee -- i went through with presidential vetting processes, buys presidential possibilities. when you get a report like this, you generally preferred to the fbi or to your investigators and you say is there anything to
this? the woman doesn't want to come forward. you want to look and see if this is part of a pattern. are there other instances like this. this should have been investigated back in july. a decision should of been made by the senators, potentially enclosed session, whether they wanted to talk to her about it or talk to him about it, whether there was more to this, whether they could figure out what actually happened 30 years ago and whether it was relevant. what i am troubled by now is we are facing a circus. it is going to be a circus with no winners. the four woman is being attacked. her children are being attacked. judge kavanaugh is being attacked. on not sure i can remember what happened 30 years ago. i'm to admit both are probably telling the truth as best they can remember it. i'm not sure that is the real reason anybody is going forward with these hearings.
i have a feeling it is a lot more circus and show that it is a real deliberate process. david: let's get to the substance of it. someone you know and respect wrote for bloomberg recently the question is, is there a significant chance of happened? in his hypothetical a 30% chance it happened as she describes it, would he ever have been nominated? is that a fair look? what is the question for the senators? who has the verdict? how do they decide that? susan: i think the real question even if she is telling the truth and she remembers it, is this a reason that this man should not be on the supreme court? if your answer is yes, fine. you need to know the truth. if your answer is, wait a minute. ofs is an isolated incident something that happened in high
school and both of them were a little bit drunk and never went further than his attempting to put his hand under her bathing suit, if that is all there is to it, should this hold someone back from being on the supreme court? barack obama, for whom i have the greatest respect, was honest enough to admit he had a history with illegal drugs. i worked for ted kennedy. he had a terrible accident at chappaquiddick. i'm not sure we want to send out the sex police going to everybody's high school records to find out who is qualified to serve on the bench. i'm really not. david: let's assume it gets approved and he becomes just as kavanaugh -- justice kavanaugh. does it affect the court or the way the court is perceived? susan: i'm not sure this one doessusan:. thes much more troubled by whole and needed hill-clarence thomas issued. not because the accusations against clarence thomas would have bothered me that much.
i have put up with much worse than jokes and bad language. but because he was chairman of the eeoc and she was a young lawyer working for him and have the smacking's of abuse of power. this is about something that happened when they were teenagers. i just hope you don't use it to tear the country apart when what we are really fighting about is what happened in the last election and perhaps what will happen in the next one. david: how much more difficult is this issue because of who the president is? we have a president on tape saying things he would do with women that would not be acceptable in most places. he says i believe in this man. does that impose an amount of freight -- frake in people's minds? susan: i think the president's morning made people furious. of course she would have told
her parents. just what we don't need in the middle of this, a president who has no understanding whatsoever about what it must be like to be a teenage girl in a bad situation giving his opinion on this. the more the president ways in, the more it will hurt judge kavanaugh. david: is really great to talk to you. think you so much. usc law professor susan estrich. tries to hold onto its hedge fund managers by getting around those salt notations. we will look at how that is going next on bloomberg. ♪ ♪
president suggested a wall across the sahara desert that might limit the flow of african migrants. trump suggested this and then asked if he have biggest sahara was. the president said he cannot be bigger than the border with mexico. visit maps. the mexican border is roughly 2000 miles. the sahara is 3000 miles. 1 how long is that -- david: my first thought was how long that wall is going to be? there was going to pay for it? emma: mexico perhaps. david: we will not get on the ja -- ma miller president trump -- met with president trump.
he said alibaba would create one million jobs. this week he said the trade war is putting that in jeopardy and making it difficult to achieve that. david: the president gave him an excuse. we look forward to nike. emma: 12 he interesting is if people are asking about the impact of colin kaepernick ad. see howwhere you can social media reacted to the colin kaepernick ad. this is labor day and the stock price plunged, but it has been on a bit of a tear since that ad came out. david: there are reports the sales are way up. emma: that is right. a number of people viewed it very positive. david: thank you so much.
three stories you need to know about. it will turn to taxes. connecticut may have more to like about the state's novel workaround for a workaround. i'm joined now by laura davidson. yesterday we had the mayor of tampa on. he said they have a lot of people and companies looking at moving to florida. will they keep them in connecticut for this new device? laura: it is certainly a way to enhance the tax breaks for fund managers. a lot of the northeast states were upset about the new tax law that capped the property tax deduction. connecticut found a way for owners of small businesses, your law firms and a lot of hedge funds and private equity funds based in connecticut. they can get a deduction not only on property taxes but a bigger tax break on their carried interest, profits they and for managing the fund. this is a big deal. specifically it is designed for
these fund managers. as people are looking at doing lots of moved to florida or this or a low tax state, is one way to get the high earners within the boundaries of connecticut. david: i took tax law long time ago. simply put, where does the money come from? if they are not paying as much taxes, the state does not get as much money or the federal government does not get as much money. laura: they had designed a workaround where the business pays the taxes and the individual gets a credit. ultimately it will reduce revenue for the federal government. people will be able to deduct more. a lot tried to shrink the amount of the seduction -- this deduction. this is one of the ways they paid for it. we could see in five or six years after this plays out how the revenues are shaping out. is important to know the irs
could say we don't like this. we will invalidate this program. stated that earlier this summer with some programs set up in new york and new jersey. this is something the treasury is closely watching. david: steve mnuchin said no way, no how. laura: they have to kind of figure out how to do this. they have to find somewhere in the tax code. there are lots of ways to do that. so far, so good. treasury said this is something we are closely watching. it is not a done deal. -- no note: coincidence that connecticut is ready hedge funds are. ways tohere are two tabulate your taxes, and one is clearly helping those managers. david: laura davidson reporting from washington. we would like to sign up for the balance of power newsletter at bloomberg.com.
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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. jonathan: i am jonathan ferro with 30 minutes dedicated to fixed income. this is "bloomberg real yield." ♪ jonathan: a slow most selloff in the global bond market driving treasury yields towards 2018 highs. investors driving back towards emerging markets, feeling a big bid into corporate loans. we begin with the big issue, the quiet climb through 3%. timer take is it's about the 10-year started