David the trade with china has dropped off. There might be a rollback of some of the tariffs. Might that turn that around . Mike it all happens behind closed doors. The chinese are looking for the president to roll back the tariffs imposed in september and canceled the tariffs he will impose in theory in december. Another story said the white house is considering that. We dont know if they will actually make that deal. David what would they want in return . They would want more out of the chinese. Now lets go to kevin cirilli. We spend a lot of time on the national elections. Why are mississippi and kentucky important . Kevin two gubernatorial races that captured the attention of political scientists around the country. That open seat in mississippi, that could be a bellwether of sorts. Its been an opportunity for democrats to score a political win there. If you head over to kentucky where President Trump rally last night at a Campaign Style rally, governor bevins is in a close race, closer than republicans would like. I spoke with a republican strategist in the last day or so. The fact that President Trump would was in kentucky campaigning chose in these more conservative states, he is not nationally popular, is popular in conservative states and viewed as a political asset. David they have a commanding lead in statehouses across the country. That might be important. 2020 is a census. Census is going to be crucial in terms of redistricting lines and allocations for funding for a host of different programs. Beyond that, i would note the New York Times poll that came out in the last they are so. It showed President Trump not popular nationwide is much more competitive in headtohead matchups in battleground states like michigan, pennsylvania, wisconsin, florida. David lets go to jesse westbrook. They are kicking the can down the road. Jesse they are not very hugely important to wall street. Its a european rule that bans Brokerage Firms from splitting up the costs of everything they do, trading services, from research services. This is a huge existential ,hreat to the analysis business bond analysis, we know it so well from wall street. Areoddity is the sec rules in conflict with the european rules. The sec had given the industry threeyear reprieve. 2023. Oing to be wall street has three more years to not worry about the headaches ifid might cause. David you have to get it all a car. In the u. S. A la carte. In the u. S. , you have to register. What is the way around that . Jesse they will have to figure that out. The rule you were talking about is two sets of regulations. They regulate brokers a certain way and they regulate advisors, big fund managers, blackrock, fidelity. More aggressive most the time. If you start selling research, you underestimate the rules. You are an investment advisor. No broker wants to be an investment advisor. Thats the whole conundrum. The sec is so complicated they need three more years to find out a solution. David thanks to jesse westbrook. Lets get a check on how the markets are reacting. The marketsthought when. They are mixed. Abigail they are moving around. Record highs once again. There is a possibility that those tariffs wont go into place. There are some perceived misses. One of those is uber. Its down 9 . Its interesting, they put up a good quarter and a bad quarter. Getting to this faster than we thought. They would be great on delivering food. Its not as good as we thought. Abigail investors want it all. They are in a big rally. It looks like theyre going to have a nice end of the year rally. We saw this value out of growth. Uber is one of these high momentum growth. The sector is doing very well. David ive heard about this rotation. Its going to go back into the value. Abigail the Energy Sector is up three days in a row. The best three days are going back to 2016. Year, this is up 20 . Energy is up 6 . Investors want to go in those sectors that have not done quite as well. Lets see whether or not it continues. David we are always looking for bargains. Beijing wants the u. S. To rollback tariffs on 360 billion worth of chinese imports. This to sign an interim trade deal with the u. S. China could remove tariffs on u. S. Goods, o sleep farm products. Both sides are hoping to wrap up the deal. China and the u. S. Will highlight joint efforts to crack down on fentanyl smuggling. They want to help alleviate the opioid problem. This is part of larger trade talks. Opioids are blamed for thousands of deaths in the United States. More transcripts are due out from a house impeachment inquiry. Envoythem, the special kurt volker. We would get the hearing from gordon sondland. He was the ambassador to the eu. More will be released in coming days. With the u. K. Entering another election campaign, there is one thing Boris Johnson can count on. That is the support of hedge funds. 516,000 from Hedge Fund Executives and bankers. The supporters held a secret fundraiser to cap Prominent Fund managers. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. David the price tag for for all. Elizabeth warren finally says how she will pay for her plan without taxes going up for the class. We will talk about that next. This is bloomberg on television and radio. David this is balance of power on Bloomberg Television. Inch by a, the u. S. And china appear to be working their way toward a first phase trade deal with reporting that they might rollback some existing tariffs. He is now a fellow at the Hoover Institute as well as director of policy studies at stanford. He joins us from california. Its great to have you here. Lets talk about this trade development. If it goes so far as to rollback how significant could that be as we look at trade deficit numbers that show a drop off. What we have seen is a decrease in exports, a lessening of tariffs would be of benefit to both china and the United States. If we zoom out and think about the Bigger Picture for President Trump, this agreement, the more they could get in there on some of the low hanging fruit, the better off its going to be because it gives him a political xi aand gives president win. I think the reason you see this thesesm is people realize with the issues President Trump wanted out of this deal. These are the issues that are being resolved. We dont know what to the phase one deal. From what we know and understand, if that deal gets done, would we be farther ahead compared to china and where we were when we started. Some people have described this as a resolution to a problem of the president s on making. There is truth to that. Run, anytime the United States and china can reach an agreement on issues relating to trade, the balance of trade, you have to celebrate that. There is no question that some of this is a lot of noise and energy that has been created since the president took office. Its very difficult to tell exactly if we come out ahead or the same place. David turning now to another how to approach health care. Theres been a lot of division among the candidates. Onspoke to Speaker Pelosi friday. She would not be a fan of medicare for all. This is what she said. Im not a big fan of medicare for all. I welcome the debate. I think we should have health care for all. Hink the offended Affordable Care act is better. David we had Elizabeth Warren come out and say this is my plan, this is how much it will cost. Does it make sense . Doesnt make sense for a number of different reasons. We can start with her optimistic assumption about how little medicare for all would cost. Beimates suggest she might 10 trillion off in the cost. When you look at the financing mechanism, thats when things fall apart. She talks about Immigration Reform being one of the things it can pay for this. This would be passed through to middle income workers. There are things that dont add up. I think the interview was very interesting. She understands the political dynamic. Are going toy they get into if they nominate Elizabeth Warren or someone like Elizabeth Warren with those proposals is a huge liability. Talking about medicare for all in the plan on health care. When we talk about the political calculus, it looks like some of the way she pays for it is by reducing the cost. That before. There is a lot of resistance from the lobby. If you look historically at entitlement programs like medicare, one of the big excuses has been how to provide pay providers. This would have automatically cut physician reimbursement. To nullifyuld vote those decreases. Nottical pressure would result in congress wanted to hide reimbursements. ,f you put the plan into effect you will put out of business a number of rural hospitals and drive physicians away from the practice of medicine. This is a challenge is graded by a planet requires low reimbursements. You heard the speaker say she wants health care for all. When you look at the alternatives like joe bidens plan, does it come close to that . Some of the details are still missing. Joe biden and others are proposing is a public option. Some form of a public plan people could enroll in as an alternative to private plans. The challenge is the public option would end up being quite costly. Beyond that, if you have a successful public option, you have variants of medicare for all. People will move to public coverage. That will create challenges in private marketplaces. How you pay for it . A lot of these conversations they end up in the same place. David finally, we have various plans, is there a plan out of President Trump . What are they running against . I think he is going to amplify his record and what hes done which is to expand some choice on the Affordable Care market. Hes done some things to cut regulation, to try to address costs and give states more flexibility. Remember, once you get into this campaign cycle, its going to be less about the policy specifics and more about the grand vision. The question will be if the democrats nominate somebody who is for a takeover of the health care system, how will that compare with whatever vision President Trump has. David thank you so much. Its always great to have you with us. Still ahead, we hear from the Goldman Sachs ceo about trade and the Global Economy. This is balance of power on Bloomberg Television and radio. David this is balance of power on bloomberg. Chairman satachs down with matt miller and they talked about where he sees the u. S. Trade deal. Wasf you are watching coming out of the administration, if youre listening to china. Is a phaseke there one deal, it looks like there are some progress. The issues are complicated. I am relatively optimistic based on the data points. It feels like we are to get something constructive. How much damage has been done . Can that be reversed . Can the economy be salvaged . The Global Economy is still growing. The trajectory has slowed. Donethe trade tension has has acted as a headwind to growth. If you remove that headwind, it should be positive for momentum in the short term. Its not the only uncertainty. U. S. , more and more the political situation has been uncertain. The democrats are moving toward an impeachment. Youve got very progressive candidates on the democrat side. Concern is a impeachment for you . Look, i think that process of impeachment and how it plays out that there was an impeachment hearing on the president of the United States and he was moved from office, that would be a significant event. I dont see that is something thats likely. I think we are at a political process. The bigger thing markets are focused on is not the impeachment process, what is happening in the election. I think its very early to predict. Were watching the election like everybody else. Its going to be a very interesting process. An interesting election in the United States. David that was David Solomon speaking with Bloomberg Television. Its time for the stock of the art. Boeing rallied 2 on news that the ceo will forgo his bonus until the 737 max 8 is flying again. That may be a long time. Equitys declining any rants until the fleet is in the air. Thats coming from the chairman of boeing. He used to be the chairman. He is still the ceo. He says the company is still behind him. They have been under pressure in the last week. There were two days of grilling on capitol hill. In addition to safety and the companies role, he also was grilled on the compensation issue. They were taking aim at him for that. Toy Million Dollars was in cash. He could be taking a doubledigit hit here by doing this. Take capitol hill first, will this help them . To give up the bonus . There was a concern around him. It goes far deeper than the compensation issue. Night puttors last out a letter to lawmakers saying we didnt get enough from him. He didnt answer our questions. There is a long way to go in this investigation of the company. You still have to get the faa to get the planes back in the air. Thats an open question. David weve got regulators around the world that have to clear this. Europe iscess in going more slowly. There are still a lot of hurdles. Its not just getting regulatory approval. You have to get travelers willing to get back on that airplane. Airlines will give customers a choice, tell them what plane they are on. There is a Ripple Effect that goes on. David the stock is up today. How much of that is because of the new sheriff in town and the board is asserting itself more than they have the past . There might be some optimism. Hes the bests man for the job getting the jet back in the air. David thank you so much. That is the report on boeing. Up next, making antitrust great again. Trust busting his gone mainstream with both sides striking big tech. We will talk about the different approach to regulation. Thats next. This is balance of power on Bloomberg Television and bloomberg radio. Sometimes your small screen is your big screen. And with the Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Whether youre travelling around the country or around the house, keep what you watch with you. Download the Xfinity Stream app and watch all the shows you love. York, this isw balance of power on Bloomberg Television and radio. Im david westin. For bloomberg first word news, we go to mark crumpton. Mark opec sees its market share shrinking for years to come. They foresee the demand for oil to fall 7 over the next four years. They say the big reason is the big blood of u. S. Shale oil supplies. That could lead group to cut production further. Former u. K. Chancellor of the exchequer Philip Hammond has announced he is quitting parliament. He served in former Prime Minister theresa mays cabinet for three years. In a letter to constituents, he said he would not run in the december election as an independent, and that the situation left him saddened. In nigeria, officials are battling a fire that broke out at a busy market in central lagos. It is unclear if anyone has been hurt. Whatever threw belongings they could from the buildings. In mexico, nine members of a local family of mormons were killed in an ambush. They travele as between sonora and chihuahua. The attackers were related to be members of organized crime. The family lived in a fundamentalist Mormon Community in mexico for decades. Global news 24 hours a day, onair, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. David thanks her much, mark. Not many people who will that reitman, the texas congressman who served for half a century, but one student has studied how we have done with economic powers since the 19th century and concluded that his approach may be part of the key to how we go forward with things like breaking up things like tech. Was a budget analyst to the budget committee, now a fellow at the open markets institute. Welcome him now. Good to have you here. A brief compass, exactly what the problems you identify. You believe there is a crisis in america today. Goliath, as a history book but it is conceptualized around todays crisis. In Big Companies like search, airlines, cables muc monopolies, oligopolies, but you also see it in small markets. Nicole, a munitions sold to the pentagon. It slows productivity growth, corrupts our politics. You are seeing a kind of political reaction to that. I trace this problem and show that we have had this problem before him in the late 19th and 20th century. Address thisto monopoly problem and restore open and competitive markets. In the second half of the 20thcentury, we allow these robber barons to come back because of some changes in the 1950s and 1970s. He rolled up forward to today where you enable concentration, and you have a world dominated by monopolies. David you focus on right patent. Beid not know much about him on that, a price discrimination bar that was enacted. Why do you think his approach makes sense today . Foe ofe was a monopolists and concentrated power. He was an antifascist. He was in congress between 19 29 and 1936. He came from a poor area in northeast texas. What he saw was wealth being stripped from his community and more autocratic forms of politics happening in the 1920s because im robber barons controlling our politics, markets, imposing their way of doing things on us. It was a dark decade when democracy a lot of people did not believe democracy could work. Over the course of the next four to half decades in congress, he thought to constrain concentrated power and open up our markets so people could freely traded goods and Services Without a thirdparty dominant intermediary, either government or monopolies bossing people around. That was his politics. He learned it from louis brandeis, from a set of farmers and merchants, and that is the politics that we are returning to now. David we are talking with matt stoller, the author of goliath. In your analysis, is big necessarily bad . Thickness iset is not equal to badness. It can be bad or not bad. His bigness inherently bad . Matt generally, yes. Take an example like boeing. The reality is, boeing is a mess because in the 1990s they bought mcdonnell douglas, rolled up the entire civilian Aerospace Sector into one company, which pulled expertise and risk. It got corrupted in the late 1990s, you saw the dreamliner, a whole bunch of problems that culminated in the 737 max. Now our civilian Aerospace Industry in the u. S. Is in crisis because we have pooled risk. That is true with the banking system, pharmaceuticals, across the board. We have pooled risk an extraordinarily dangerous ways, not because there are any economies of scale there. David do you see any instance where economies of scope and scale benefit the consumer overall . That has been the theory. You can be more efficient, have Better Services delivered. Does that ever happen . Matt absolutely. You cannot have familyrun steel mills. In a lot of industries, unique technical expertise, scientific, engineering expertise, networking expertise, telecommunications, airlines, a lot of different networking, the post office, where you need a economies of scales, network effects. There are ways to address that to make sure that to make sure that nobody can use that to dominate or pick winners and losers. What happens when you have a large, scalable form that is unregulated and privately owned, you get a private government. Mark zuckerberg has said facebook is more like a government and a business. What is happening in our culture right now is not business, but across all of these markets, you have these private governing forces making political choices about the markets in which we interact. That is a political crisis, not just economic. David your book is also about politics. Many thanks to matt stoller, the author of goliath. It is a fascinating and provocative piece. Weeks ago, regulators approved tmobiles bid for sprint. Clear someill has to state litigation hurdles, contending the merger will harm consumers. Shery ahn spoke with the fcc chairman on the deal. Certainly, i would hope those states would recognize with the sec has recognized, with many others have, that the consummation of this transaction would be in the public interest. One of the commitments that i got was to deploy 5g to 99 of the American Population within six years. Service orper second greater to 99 of americans. More inhome fixed broadband competition, price commitments. These are the kinds of things that will be consistent with the public interest. That wouldment is have happened anyway because tmobile and sprint had committed to 5g anyway. That is not the case. Tmobile has a good low band and and spectrum assets. Sprint has a good middle band spectrum asset. Or 5g, you need all three, low, middle, and high. We think this new company will be a greater competitor. Especially when youre talking about an industry were the two largest operators have 90 of the cash flow. We want to turbocharge a third competitor to compete with them. When will this happen . It has been 18 months. Wendy expect that hearing . How thenot forecast litigation will turn out. That depends on the state ag lawsuit here in new york. From our perspective, we want to make sure the public can benefit from some of these commitments that we have gotten from the parties, to deliver faster, Better Internet services. You have also spoken extensively about regulating big the freedom of speech, especially with companies being able to block content they dont want to see. What do you think about twitter banning political ads and facebook not doing so . We dont discuss the content decisions they make. It is will say is, important to have transparency across the entire internet economy. Tell the american consumer, government how you are making these decisions, and that will give people a better insight into why you are making these decisions. David that was the fcc chairman. Coming up, President Trump has fundamentally changed the u. S. Approach to the middle east. Aboutak to martin indyk how it is working, or not working. That is coming up next. This is balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Im david westin. Martin indyk has had a distinguished career as a u. S. Diplomat serving twice as u. S. Ambassador to israel as assistant secretary for near east affairs. He is now interesting with fellow at the council of foreign relations. We welcome him back to bloomberg for todays conversation in chief. You have a fascinating piece in foreign affairs, summarizing President Trumps policy in the middle east and how he has fundamentally tried to redo u. S. Policy. It particularly focuses on israel and saudi arabia. Start with israel. Martin it is important to understand, President Trump intends to retrench from the middle east, essentially disengage from the region the best he can. Is do this, he subcontracting to israel and saudi arabia, trying to get them to take on the responsibilities the u. S. Has traditionally done for the last 40 years. That does not work well. Israel is a strong power in the region, probably the strongest, but there is a Glass Ceiling on how much it can work with the sunni arab leaders because of failure to make progress on the palestinian issue. They are happy to have covert limited relation but there is a limit to how far they can work with each other. In syria, israel is dependent on the u. S. To help them in what is becoming a war with iran. Trumps withdraw from syria has really created a problem for israel in terms of its ability to intervene there. Saudi arabia, with its more in yemen, the murder of jamal in yemen, thear murder of jamal khashoggi, the way the crown prince is running a policy that is basically aggressive and brash and not thought out, is getting the United States into all sorts of difficulties in the region. Rather than advancing our interest, it is causing detriment to our interest. David in israel, part of the theory was President Trump would help Bibi Netanyahu and help him win election. That has not worked out as planned, even though the president gave up things like dominion over the golan heights. What is going on in israel with their government . Trump intervened heavenly on behalf of netanyahu, in two elections, and it didnt work. In both cases, netanyahu is unable to form a government. Going tols he is lose their, which he does not like. On top of that, they dont agree on syria. And there is also tension over iran because netanyahu was a robust policy of confrontation with iran, and the president has drawn back from that, specifically avoided retaliating from this egregious iranian attack on the saudi oil fields. That sent a signal, that the president is not interested in confrontation with iran. Has led to an estrangement, i would say, between netanyahu and trump. He did not call him on his 70th birthday day, they have not talked for a long time now. I think that underscores the way iswhich u. S. Retrenchment really straining our traditional relationships with our allies in the region. Id we are targeting what talking with martin indyk. Talk about israel and syria particularly. At one point, he thought he could go to moscow and get Vladimir Putin to help them out. That did not work out well either. Martin no. Notwithstanding the terrible deficit from netanyahu, i think he has made more than six trips to see putin and kiss the ring. Are in iranrests because he depends on those hisnd troops bolstering client, bashar alassad, the syrian regime. They are aligned in supporting conquering of re syria. Netanyahu once a free hand to take care of the iranian threat they are posing in syria to israel. Putin is for parents to give him that, but not one step further, which netanyahu is pushing him to do, which is to use russias influence to push iran out of syria. Because there is a limit to how far russia is prepared to go, netanyahu cannot achieve his objectives in syria. David you say there is a limit on how much israel can do in the region because of the palestinian issue. It appeared at one point, perhaps, the white house, particularly Jared Kushner, had an understanding with the crown salman toammad bin say that we will take care of the problem. That does not seem to have played out. Martin what happened was, the president wanted to move the u. S. Embassy to jerusalem, recognize it as the capital. Kushner went to see mohammad bin salman who told him it will be ok, things will calm down, which gave trump the green light to do it. If it was not going to offend the saudis, others would come along. Noturns out, it may have offended the crown prince, but it mightily offended the king, and he is still the king. He has come out repeatedly, condemning trumps decision, making clear saudi arabia will not support anything short of an independent palestinian state with East Jerusalem as its capital, which is not part of kushners peace plan at all. , kushners of that move in recognizing jerusalem as israels capital, the United States is no longer a promised broker, but it also forced the saudis out. Without that, they dont have the arabs. You cannot make peace if you dont have an error of interlocutor. David we are talking with martin indyk. Understand, you know better than i do, comes down to alignment of interest. To what extent does the u. S. Have a partial alignment with saudi arabia . Sometimes the president and Jared Kushner talks like we are friends, and that will take care of it. No was it that said there is such thing as permanent friends but only permanent interests . Martin we still have an interest in saudi arabia, but its important to understand the change. It used to be a vital strategic interest for the United States. We went to war twice in iraq, you could say, because of the threat to saudi arabia, the free flow of oil at reasonable price. Now that we are an exporter of oil, now that we have fracking, production of natural gas in the ted dates, dependence states, dependence on saudi arabia is much less. That does not mean that the ,orld is less dependent and our Major Trading partners, so we still have a strategic interest in saudi arabia, but it is not vital. That means trump is essentially right when he says we dont need to go to war for that oil. That is a fundamental difference. Plus, you have the war weariness of the American People after a decade of war with nothing to show for it in iraq, afghanistan. The huge sacrifice of blood and treasure. I think the combination leads to this retrenchment, which started under obama, but which trump has given a turbo boost. The problem is, that leaves a vacuum. That vacuum is filmed by the russians, the turks, iranians, israel, and saudi arabia will try, but without the u. S. Supporting them more overtly and effectively, it will be hard for them to fill the vacuum. David many thanks to martin indic. Inwill have more coming up the second hour of balance of power on bloomberg radio. We will talk about the iranians. Live from new york, this is bloomberg. David this is balance of power on Bloomberg Television and radio. Im david westin. To impose a new ban on the sale of flavored smoking products. To take us to the what and why, we welcome drew armstrong. Great to have you here. What do we think the fda is about to do . Drew we know the fda has been looking at and danone flavors in vaping products. The things that was talked about earlier was that they went and everything but tobacco. That would have meant mint and mental off the market. A lot of pushback over that, saying if you do this, people will go back to regular cigarettes. Is, we have seen some new data that has shown that young kids, high school and middle school, like the midflavors. The worry is it that you leave these flavors, it will be attractive to kids. There is a huge debate about how far this band goes, which flavors they actually been. You are seeing huge pushback from the vaping industry which says this guidance will destroy jobs. Public health books on the other side saying we have to do this to protect teenagers. David lets assume they allow menthol. What would it do to the vaping industry . You have seen some Companies Grow up and add a lot of market value. To understand the vaping market, you have to understand you have really Big Companies like juul who sell their products in convenience stores, they have an online market, selfcontained systems. Separate from that you have an independent vaping market, people Walking Around with these clunky devices, those are more custom things. People mix flavors in these vape shops. It is a Small Business market that allows more interchangeability of flavors. Those are separate businesses. The small guys who say we are independent proprietors, the vaping shops around the corner, we are going to get crushed by this if we cannot give people what they want. David what is the fundamental health risk the fda is addressing . The worry is these products in particular, juul, which is the most popular among newg users has created a population of smokers. We know that cigarettes are very bad for people, kills over 400,000 people a year. An alternative of that would be desirable for existing adult smokers. What you dont want is a whole bunch of people getting hooked on the scene who were not nicotine who were not smoking before. David we will keep on watching. Thank you so much. Up, balance of power continues on bloomberg radio. We will get more from martin indyk. We discussed the latest in impeachment. This is balance of power on Bloomberg Television and radio. Lisa im lisa abramowicz. Welcome to bloomberg money undercover , a show that provides valuable insight into alternative investment. Lets go straight into the burning issue in private markets. Retailers keep filing for bankruptcy, which will likely translate into more pain for mall owners. Food delivery indigestion. Companies running into potholes after receivingil