tv Bloomberg Markets Balance of Power Bloomberg October 25, 2018 12:00pm-1:00pm EDT
talking to balance of power where the world of politics meets the world of business. we have tenants really coming to us from washington on the search for the pipe bomber -- we have kevin cirilli coming to us from washington on the search for pipe bomb -- the pipe bomber. kevin, let's start with you. yesterday we heard the president speak out and respond to the search for the bomber, saying this is a time to come together as a nation. this morning he tweeted a very big part of the anger that we see today in our society is caused by the purposely false and inaccurate reporting of the mainstream media that i referred -- referred to as the fake news. -- refer to as the fake news. kevin: president trump striking a somber tone at the white house and then strike a summer tone at his rally last night and then today, the tweet targeting what he calls the fake news media, this after cnn putting in a
statement saying that the president is somewhat responsible for the increase in polarizing rhetoric in the u.s. political culture regarding the u.s. political discourse. the search for the bomber continues. the president has been briefed by fbi officials but to your point specifically, this increase rhetoric we have seen trickle down from 1600 pennsylvania avenue all the way to races, gubernatorial races in pennsylvania for example, comes at a time in which there have a complete wreck -- lack of regard for political correctness. the question becomes whether or not this will change anything. i have spoken with consultants on both sides of the aisle within the past 24 hours about this specific incident and there is no sign this is going to unify the political discourse or make a posit all. -- make a policy at all -- make a pause at all. david: we will turn to bill in
washington. an announcement that this joint committee from the turks in the saudi's have a report and apparently they agree it was a premeditated killing. bill: the story has a shifted again in saudi arabia over the killing of jamaal schick -- the withng of jamal khashoggi, the prosecutor saying they have received reports from the turkish counterparts that the killing was premeditated. this changes the previous description of the events as some sort of interview or interrogation gone awry. it is another sign of backtracking by saudi arabia on what happened to the critic jamal khashoggi after he entered the consulate. david: in the meantime, in washington where you are, the director of the caa has returned from her trip to turkey with a report. do we think we know what really happened? >> there is a report that the
cia director heard an audiotape of khashoggi's interrogation and killing. we don't know that. they caa is cut -- is not commenting on that. president has an intelligence briefing at 11:30 or had one and we expect that is where he would get some details from the cia director, and that will really shape to a large degree the u.s. reaction going forward. david: from washington, we are going to come back to new york with the chief u.s. economist for bloomberg intelligence. a big speech coming up. >> we will be hearing from the new vice chair of the board of governors in his first public remarks. he has spoken a lot in the past that not in the context of vice-chairman at the fed. his tone will significantly moderate towards that of chair
powell. david: people will pay even more attention. >> you will know those words carry more weight. he is very savvy in the financial markets. he understands the significance. job number one of the vice chair is to agree with the chair. this will provide more insight into chair powell's line of thinking and interpretation of recent economic and financial markets. david: and it goes to the heart of the matter right now because chair powell is saying the economy is in good shape and yet we see this real turmoil in the markets and a fair amount of value being destroyed. >> the fed likes to say we don't watch financial market development and will not respond to short-term moves in the market. we see equities moving into correction territory, more than that ahead of a december meeting, it is possible the fed messaging is going to evolve over the course
of that period. very sensitive to financial market conditions and while the fed should not be providing support to the markets in trying to reverse relatively minor moves like what we have seen year to date, absolutely they have to be sensitive to the implication for animal spirits and corporate activity if you are in a sour market environment. the risk is this could drive hesitation in either hiring or investment trends and have brought economic consequences. david: thank you very much. we return now to kevin cirilli. tell us all we know about the investigations. do we have a sense on whether they are making progress? kevin: there is a manhunt underway for what the fbi is treating is an issue of domestic terrorism. this afternoon, there is going to be an update with new york city mayor bill de blasio as
well as the new york city police commissioner. they will be speaking with an fbi official at a public briefing later this afternoon. the attorney general jeff sessions has received a briefing from the fbi and the white house is saying president trump has received briefings on this issue which is being treated as a matter of domestic homegrown terrorism. no reporting right now to suggest there was a foreign entity involved in this. the investigation is ongoing. david: you mentioned the effect on the midterms. we are only 12 days away. is this likely to have any effect one way or the other? ivin: politically speaking, don't think this would be able to factor into an issue of something that voters are going to be weighing on. i do think it is an illustration of the heightened political rhetoric that you and i have talked about on this program for quite some time and i think you are seeing democrats and even republicans, most notably jeff
flake, has spoken out critic -- publicly, criticizing the president for his rhetoric, saying that rhetoric does ultimately trickle down into the political discourse. it is notable that cnn's jeff zucker putting out a statement publicly criticizing president trump for that rhetoric. it is also notable how the president has responded. ultimately, this gets factored into whatever you believe. if you believe the president is to blame or that the media or democrats are to blame, i think that is what it is going to do. right now it is unknown. the bottom line is this investigation is still very much ongoing. david: thank you very much. now we want to check in on the markets because this feels like a whip saw. we have emma chandra here to explain. emma: seeing a big rally in u.s. markets and that is following wednesday's rout which a race
all of the gains on the year. all the major index in the green today. the dow jones in the positive territory for the first time in several days. the nasdaq up to it half percent, tech leading the rally after a round of positive likesgs reports from them of -- from the likes of microsoft, tesla and twitter. let's look at the debt -- at the up to .8% -- up 2.8%. amazon and output that as all of the other companies posted earnings. apple -- and off of that report after the bell today so we should see whether this rally in tech will continue once we get those other earnings later in the day. i mentioned tesla as well.
tesla finally posting a profit in the market and investors rewarding elon musk and tesla. the other autos also having a good day. most up 8.5%.e updated guidance, this despite investors -- despite the fact that there was softer news out of china. ppg, this on news that -- is looking to oust ceo michael mcgarry at ebg and reinstall his predecessor to improve performance at the chemical manager. ppg has issued profit warnings each of the last three years, when they said that third and fourth quarter earnings would be lower than expected. david: coming up, we will talk
david: this is balance of power on bloomberg television. we will turn now to mark crumpton for bloomberg's "first word news." sarah huckabee sanders is dismissing criticism of trump, saying that the notion that the president is responsible for the packages sent to democrats is disgraceful. she said law-enforcement officials are working hard to find out who is sending these packages. >> it is an ongoing
investigation. we will not get ahead of law enforcement. we will continue to do everything we can to provide the resources they need to investigate and hold the person or persons responsible for this fully accountable and put the full of the -- full extent of the law behind them. mark: suspicious packages are sent to robert deniro and joe biden were intercepted today. president trump a report that chinese spies listened to his cell phone calls is wrong. according to the new york times, u.s. intelligence reports indicate that those spies are getting invaluable insight into how to affect in administration policy when they hear the president talk on an unsecured iphone. saudi arabia is getting closer to deluging the killing of journalists jamal khashoggi was premeditated. according to the official saudi news agency, turkish
investigators have given saudi prosecutors information that suggests the suspects planned to kill khashoggi. british prime minister theresa may has invited 120 business leaders to a brexit q&a session next week. business groups are desperate for some kind of certainty from what can of trade terms the split with the european union will deliver. global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. david: thank you. president trump traveled to wisconsin last night to give a campaign rally boost to governor scott walker. theegan by condemning suspected pipe bombs that were sent to leading democrats including former president obama. >> any acts or threats of
political violence are attack on our democracy itself. succeed that tolerates violence or the threat of violence as a method of political intimidation, coercion or control. david: then this morning, the president struck it somewhat different -- different tone, putting the blame for the bombings back of the media itself, tweeting. for more, we welcome congressman ryan castillo, a republican from pennsylvania. i think most of us want to get back to a world where we can disagree with each other but not make it personal and not get angry and yet every time there is an incident even like what is going on right now, we seem to not be able to help ourselves.
the head of cnn responded to the president and kind, putting the blame back on him. is there any hope for us to get the national discourse back to where we would like it to be. rep. costello: i think there is an it starts with the fact that most of us want to get to the bottom of whoever is behind this deplorable very dangerous act of domestic terrorism and we don't necessarily want to point the finger and blame president trump , the republicans in congress, members of the media or anyone else. as americans, we want to find out who did it and hold them accountable. david: answer this for me. you have run campaigns and have won campaigns. do people do this because it works? they did very personal and over-the-top in the rhetoric because the voters respond to that and they don't respond to a moderate voice? rep. costello: there was a time campaigns and commercials was a way to accentuate differences with your
opponent. now with the news media cycle so accelerated and with social media playing an even bigger the incentives on social media to say things that are bombastic and are turbulent, that i think has created a dynamic where those in office and those who evaluate those in office place more emphasis and value on those that are saying divisive things. ultimately that leads to much more destructive discourse and it also turns a lot of people off to politics and thereby those who are doing that have bigger and bigger microphones. we have a speech coming up from president trump this that he is going to really propose some things on drug pricing in particular, about having more competition to get the price of drugs down. how important is this to people?
the polls indicate people really care about health care. will they vote on that? poll, youllo: in any will see that the economy, jobs and health care are the number one and two issue unless we are in a time of national emergence see or there is some front and center national security issues. on health care specifically, democrats are going to run against the republican health care plan we voted on. republicans want to highlight the pocketbook issues related to health care cost and in the pharmaceutical drug space, we have seen the fda accelerate the ability of generics to get products to market place, create more competition. i think the president and the hhs secretary will lay out how to better bring down the cost of health care, specifically drugs. atyou are a voter looking who is taking action in order to allow me to put more money back in my pocket, i think there was
the case to be made that that could be a motivating factor when folks go to the polls. david: whether it is taxes, immigration or health care, what do you think the likelihood is that the democrats will take over the house? rep. costello: i would slightly favor republicans and here is why. they need 24 seats. there will be a couple seeds that republicans take from democrats. seatsn see about a dozen where democrats are likely to win but then there -- but then there are two dozen seats that are tossups right now. in most of those seats, you have battle tested incumbents, experience republican incumbents who i think we'll get to the finish line because they have good teams around them. this is ultimately going to be a referendum on the president and how well incumbent members on the republican side are able to differentiate and have their own brand so that they get those swing voters. david: does it matter? what will happen differently if
the democrats control the house versus republicans, assuming republicans control the senate? rep. costello: you would see a plethora of investigations and you would see the far left side of the democratic party really pushing for impeachment and whether you are talking about regulatory reforms or some of the economic growth measures that you have to make their way opioids --gress, the opiates bill that we signed into law, you would have to see much more in the way of compromise but also a lot more antagonism shown towards a president's trophy's and it would be that much more difficult to get things done. david: as we enter these last 12 days, given the rhetoric in the country and given this incident with these pipe bombs, should the pelican party take it on themselves to ask the president to dial it back? rep. costello: there are republican members and people
within the administration that encourage them not to say certain things and participate in certain tweets. he is who he is and the reality is in large parts of this country, he is culturally where a lot of voters are and he does somestuff and it drives crazy, but there are those out there who absolutely love it and they feel he is speaking to his for -- and they feel he is speaking to their forgotten voice. david: off in media misses that, a very important point to make -- often the media misses that, a very important point to make. thank you very much, ryan costello, republican represented a from pennsylvania -- representative from pennsylvania. -- things that further gradual rates adjustment is appropriate and it sounds like he is backing his chairman, jay powell.
david: you are watching balance of power. twitter is our stock of the hour. at onepany is surging, point more than 20% early in the session after an earnings report that investors appear to be cheering on. emma chandra is here. with a 4%are that loss in the third quarter of 2017. the cfo said this was down to fostering a more engaged user and delivering a better return to the advertisers. twitter has been working on creating a more personalized service. people often felt barraged by information they were not necessarily interested in. this positive investor reaction
even as twitter saw a second straight get in monthly users, they fell by 9 million. you can see the average monthly users fell in the third quarter. it was something they also forecast could happen. david: is this a matter of quality over quantity? not as many people coming but more quality. emma: they do. advertisers are happier with the way their ads are reaching customers and what they are seeing is they are reaching real users of twitter as opposed to a number of fake users. the ceo saying that the fall in the number of accounts is due to policing accounts putting out fake news. david: that is one of the questions. the dhs said they are going to be monitoring this. how are they doing on cleaning
up that feed? emma: twitter is making a big push into it, spending money on trying to clean up twitter. gross margins rose and what we have seen is they were challenging accounts 9 million twitter accounts, so they are making big progress in trying to a fake news less of place. democrats are, betting their blue wave hopes on groups of voters who are not known for showing up in the midterm elections. we will tell you how both parties are playing or hispanic votes. ♪
suspected mail bombs is now getting larger. the fbi investigated two suspicious packages in delaware this morning. in new york, the bomb squad removed a suspicious mail bomb that was addressed to a home owned by robert deniro. he is a frequent and sometimes vulgar critic of president trump's. one of the targets in that wave of mail bombs is telling president trump to stop blaming others for the anger in society. former cia director john brennan tweeted quote, look in the mirror. your inflammatory rhetoric, lies and encouragement of illegal violence or disgraceful. he continued, clean up your act, try to act presidential. that was followed by a tweet by president trump blaming the
media for stoking the anger. director gina haspel is back from turkey today and is briefing president trump on the killing of journalist jamal khashoggi. according to the washington post, the director heard a tape that an audiotape of khashoggi's interrogation and alleged murder at the saudi consent -- at the saudi consulate. premeditate -- premeditated, according to the saudi -- it is not clear how far the talks in ottawa will go. both united states and china .ere excluded global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. david: florida has its fair
share of close and fascinating elections coming up, including a race for the senate and two colorful candidates running for governor in rick to santos and andrew gillam who squared off last night. >> he wants you to believe he is not under investigation. why what an undercover fbi and that -- agent posing as a contractor give him $1000 ticket to hamilton? governor, i will represent everyone but i will not bow down to the altar of political correctness. i will not let the media smear me. >> a hit dog will holler. it hollered to this room. hehas spoken, first of all has neo-nazis helping them out in this state. he has spoken at races conferences and accepted a contribution and would not return it from someone who referred to the former president of united states as a muslim. david: welcome now someone who knows the ins and outs of 40
politics, al cardenas. he has served under president reagan and george h.w. bush as well as chairman of the florida republican party. thank you very much for joining us. al: my pleasure. david: let's start with the governor's race. you heard these candidates really going at each other. the polls seem to indicate that has an advantage of five to six points. how do you see it? al: it is close. he seems to have an advantage in the public polls. ise internal polls of desant believe he is a couple points ahead. i believe it will be a tight race that is based on the turnout of the last 15% of no party affiliation undecided voters feel. it will be a high turnout, much
higher than 2014. about 1.5 million votes have already been cast. we've got to hang on to our seatbelts and see what the outcome looks like. the democrats have not had a winner in 24 years for the governor see -- governor's seat. they arehe first time in a position of the quality and this will be an interesting turnout. david: some people suggest that has been aillum better job of persuading people he is more moderate whereas mr. desantis has run more right and that has turned off more people. al: i think that is unfair. both candidates are trying to play to the middle. you don't see mr. gillum campaigning with elizabeth warren or bernie sanders and you isn't see ron desant
campaigning with president trump although he said -- he endorsed him. they both realize the middle is going to be there. is smart, he is articulate. i have known him since he was 21 years of age. they are both good candidates. they both revisited themselves well in the debates. they have thrown a lot of mud at each other. ultimate deciders of this race are going to be the base turnout of the undecided voter and that is who they have been playing too in these debates. david: let's talk about a different turnout and that is the hispanic turnout. that is across the country. if you look at polls, overall, hispanics tend to go democrat. how do you see it? is that changing? al: i think it is going to get worse for three reasons. there is a true fear in what i call my community involving this
ice. people are afraid that ice are going to show up at these voting precincts. they may be citizens but someone living at home may not be. they are afraid of being interrogated. the second one is, frankly that neither party engages with the minority communities as they should. spent look at the amounts per capita on hispanics as compared to others, it is the minimum and the third factor is we don't recruit enough hispanic candidates to run for office, neither party does. party do aepublican worse job. if you want people to participate in the process, you need to engage and neither party does enough of a good job of that. i anticipate a lower turnout from the hispanic community. david: from the republic -- republican point of view, there
is at least one poll that suggests if you are hispanic and vote republican, it is more likely that you hear from the party and if you are a democrat who is a hispanic. al: i think that is based on two things. one is resources. democratsact that think with a three fourths margin, they don't need to try as hard. don't be surprise that republicans are making a bigger effort. 75%'ve got to overcome a share lead. david: at the same time, if the president of the united states and the ministry doing things such as deploying ice in communities and has taken a very strong line on immigration, is that going to defeat the whole purpose? al: of course. let me say this if i can. republican party is going but it a bad marriage,
is staying married because if they divorce, the democrats win. you have two sides of the party, the populist side led by donald trump. he calls it the nationalist side and there is the ronald reagan conservatives, bush conservatives like myself on the other side of the party. we don't like the populists and they don't like us, but we have this marriage going on through this election cycle. we want to broaden the tent, they want to narrow it and that does not help the party overall succeed at the ballot box. it looks like the democrats are not doing themselves any favors. you would think based on the climate at hand that they would be doing better nationally but this looks like a close race all over the country. david: when you talk about that bad marriage, is that as pronounced as it was two years ago? there were reports coming out that president trump is winning over a lot of the more traditional george w. bush, the
george h.w. bush conservatives. al: in north florida where i have a home, i asked people that question and most of the people answer me and say i don't pay it no mind, i don't listen to the man, but i have a job and the economy is doing well. where he has expanded his bandwidth is two factors. the economy is doing pretty well and people don't like to shake the democratswo, of late have not been offering republicans or even former republicans any alternatives. we don't agree with redistribution of wealth, we don't agree with the help -- free health care or college education. this is not the publican party of 50 years ago -- i mean the democrat party. elizabeth warren and bernie sanders. people like me, what do you do? you don't want to join a nationalist effort but at the same time you don't find a
philosophical home on the other side, so you stay in a bad marriage and that is where many of us are. david: a very compelling analogy. great to have you on, al cardenas, chairman of the florida republican party. our next guest says we are in a cyber cold war. formeru.s. assistant -- u.s. attorney general, john carlin. he weighs in on how to combat this new type of attack. this is bloomberg. ♪
ultimately as assistant attorney general. he is now chair of the horse and forrester global crisis and risk management team and he has written a new book, dawn of the code war. quite a tome you have written here. reportingimes is president trump uses reportedly an iphone and he has been warned that foreign agencies may be tapping in. this morning, the president tweeted out that is a fake news story and that the russians and chinese are not listening to his calls. how big of a security threat is this, but do they really listen to almost all of his calls, whether it is president trump or somebody else? surveillance by
nationstates inside our country is real and is the reason why government officials use classified lines, lines that are not connected to the normal telephone system, they use a special type of broadband that encrypts the traffic. mobile phone traffic is regularly intercepted, certainly by russia and by chinese officials. is there active surveillance? yes. the way i first met the obama officials was when i was at the fbi, i met them because we were going to tell them that the renal systems had been compromised by chinese intelligence. we told both the obama campaign and the mccain campaign. david: you tell that story in the book and i want to get to the end of your term, when you come back to election protection. the new york times wrote the -- is reporting that so much the president trump is disclosing state secrets but that the chinese cannot figure him out
and so they are trying to figure out who is he talking with and can they talk to those people to get a read on this president? does that seem plausible? john: it does. i don't know if the reporting is accurate about the use of the phones but the fact that not just china but nationstates like tryingould be actively to figure out the intentions of our leadership and doing that both by electronic surveillance, emails, phone calls and then using that to try to scope out who can give us insight into how this foreign leader thinks, from their perspective, what is president trump going to do next? our own domestic politics, everyone is trying to figure out what he is going to do next. it is no surprise that that is one of their top priorities. david: you mentioned the chinese hacking into the obamas' emails.
the real dilemma within the administration about whether to go public with that or not. do you regret the decision in retrospect? john: there is no doubt that russia views its campaign to undermine confidence in our democratic elections in 2016 as a success. we have to learn from that. if they continue to view it as a success, they are going to do it we have to learn from that. again and that complaint which did not get enough attention showed that there was a current multimillion dollar russian intelligence led campaign to interfere with our 2018 election. until we raise the cost such tot they view it more costly stop interfering in our election, they are going to continue. how can we do a better job of
raising the cost? it was great that the department of justice on september 25 said our new policy is we are going to make this type of meddling public and the case that went is -- a week or two ago the other part is we need to sanction, take action against operatives overseas cap --, -- overseas, keep making cases and keep raising that cost until russian behavior continues. david: the russian woman indicted for attempt to try to subvert the election on november indicted,d one and are there are five 420 or 100 that we did not? or 20 or 100 that we did not? is ranged in the different charging documents but we are talking 50 -- $50
million, $100 million being spent just in that strategy to put out social influence which shows they are compartmented into six or seven different compartments all working on the same strategy of undermining democracy. it is not just against the united states. that democracyew itself is an existential threat to the regime. is why a wine -- that the havoc -- they have attacked elections in germany and france and around the world. we will continue to see these , well-funded and directed from the highest levels of russian government. david: that is just one country. when you read your book, it is not just russia, it is china, north korea. that is the state actors and then you have nonstate actors like islamic state. it is almost overwhelming. it constantly changes.
whatever you found out they did yesterday, they are not doing tomorrow. john: one of the reasons i wrote the book is thanks to great work by law enforcement and intelligence analysts, we have been able to figure out who have done these attacks in the past and one thing i am finding as i talk to victims out there, companies, individuals, is that people don't know. they think it is science fiction or these attacks are going to occur in the future when they have already happened. part of being able to protect ourselves is recognizing what has already happened so we can take steps. these days, there is no internet connected system that is safe from a dedicated adversary who wants to get in. a sophisticated criminal group or nation state. part of your planning has to be i should not put my crown jewels in a folder called crown jewels because they may be poking around and taking stuff. maybe i put something in that does not work.
do that in the france election. he put fake emails and and the russians took it and when the media was going to report on it, they -- the campaign said we are not going to tell you which is which. david: what is the price? it is costing us a lot of money. john: estimates are over $1 trillion worth of damage and it has been well into the hundreds of billions just in the effect of -- just to the effect of intellectual property alone. as we move toward the internet of things and white is so urgent we focus on this problem now before the pacemakers in our hearts are reliant on internet technology or the cars on our road is we assert switching from dollars to lives.
some photographs of his sons basically. >> i was chatting with the reporters who went to the cabinet and they said this is not the typical cap debt that you have in the office. it is very personal. he has all of these gun replicas on the walls, nra signs, pro-life. david: nra sounds like our nra. >> also something about the second amendment which is not an issue you hear about a lot in brazil. david: to be clear, this is his son who is himself a legislator. >> that's right. andas been reelected now, they are all very close. three sons that are all politicians and his office is right next to his father's. david: we are trying to find out more. he is not well known.
that it may rip -- we may think the sun may reflect some of what the father thanks. >> he has been a very vocal voice in his father's campaign. he has spoken to us about shifting away from -- possibly changing the resilient embassy in israel to jerusalem. he has spoken for his father a lot because his father has not spoken a lot since he got stabbed. david: there is actually a gun control issue pending in brazil or could the pending. -- could be pending. the fact that he has the second amendment stuff and an array is not just atmospheric. >> there is a bill in congress that could be voted this year and with the likelihood election, it will likely move forward. david: what other principal changes do you expect? what we areelected,
looking at is a large change in the economic policy at this time, continuation of reforms and shrinking of the state. we expect a lot of the family and guns issue which is largely part of his campaign. david: so far, the markets like it. sunday we will now. many thanks. sign up for the balance of power newsletter at bloombergpolitics.com. get the latest on global politics to your inbox every day. coming up, we are following markets. stocks are gaining, back up after being down yesterday. live from new york, this is bloomberg. ♪