Transcripts For BLOOMBERG Bloomberg Markets Balance Of Power

Two other topics. Second, whether or not Mitch Mcconnell will form some type of bipartisan consensus around gun control. Those Mass Shootings over the summer weighing heavily on the minds of lawmakers as they return. Last but not least, they still have to pass spending bills by the end of the month or else we will have a government shutdown. David over the weekend, an extraordinary story about the camp david accords that did not happen. Therese rafael in london. It is a law. Does that mean Boris Johnson cannot leave the eu without an agreement . Therese it means he has to request an extension from the European Union if he cannot get an agreement. There is some question about whether he will find some kind of legal wiggle room on that extension, or whether he would then make it so unattractive to the eu to grant the extension, which needs to be done unanimously by the other 27 members. It is not for certain yet there will be in extension. Law puts a huge roadblock in Boris Johnsons way, and the other roadblock is the election he has been seeking, that he wanted to have in the middle of october, before october 31 and the deadline for brexit, it is probably not going to happen. Parliament is set on denying him that. It has not been happy days for Boris Johnson. David as i understand it, they only have it for tonight. Doesnt parliament go out of existence for a while . Therese that is right. Move tonight, johnson will to suspend parliament until october 14, when a new session of parliament will begin with the queens speech. What will happen the next five weeks is crucial. That is where johnson will attempt to get a deal. That is what he says he will seek to do. Having been thwarted from having an early election, that seems to be his best bet to try to avoid the extension that parliament is trying to force him into. David thank you so much. Lets stay in london and go to our colleague stuart wallace. We have a new oil minister in saudi arabia. A member of the royal family. At the same time they say no change in policy. If there is no change of policy, why a new minister . Stewart two big takeaways from this. If you are in the oil market, the minister said there would be no change in policy. Was expected, but youre seeing a rally in the price their. Was expected, but youre seeing a rally in the price their. The second big take away and the thing you mentioned, this is the first member of the royal family ever to hold this position. Held byly it was always a technocrat, in part to reassure the markets that you had someone who knew the industry, and also to make sure no individual member of the house held that lever of power, all of the revenue. What this is telling you is there a shift in sentiment in saudi arabia. In this instant, he also happens to be supremely qualified. He has been going to opec meetings for a quarter of a century. They found the right guy for the job, but also more importantly a member of the royal family and that says a lot about semi domestic policy. David is this about oil or domestic politics within the royal family . Is this a move to consolidate. The new oil minister is the halfbrother of the crown prince. Business of consolidation of power . Stuart it feels like it. While technocrats have only ever industry, the royal family has been calling the shots. By transferring that position to the royal family, they expose themselves to any mistakes they make in policy. ,hen the Oil Price Goes south than that will fall squarely on the royal family for the first time. David thank you so much. Now lets go back to kevin cirilli. I mentioned the afghanistan incident where President Trump told us he was going to have a meeting we never knew he was going to have to bring peace to afghanistan. This is what mike pompeo said over the weekend. We finally reached a point where we were close. We make progress and then the taliban failed to live up to a series of commitments. When that happened, President Trump set i will not take that deal. I will not work with someone who cannot deliver. David the question for all of us is what comes next . It sounded like maybe they were moving to some sort of agreement, good or bad. Where are they . Kevin President Trump said he was working with taliban leaders in order to lead to a troop withdrawal in americas longest running war. On saturday, the president weeding something unbeknownst to reporters, that he was canceling that meeting at camp david as well as with the afghani president. It comes at a time following a deadly attack in cabell in kabul thursday that left 12 dead and more injured, the taliban has claimed responsibility for that attack. It comes just two days before the anniversary of the september 11 terrorist attacks. It dominated discussions. Criticisms from the democrats about the president considering to meet with taliban leaders at camp david. In terms of foreign policy, it looks like the president striking a new town against the taliban following the wake of those deadly attacks they claimed credit for. David the timing was at best unfortunate. The taliban hosted al qaeda, who attacked us 18 years ago. Now it is time to find out what is going on in the markets. We turned to abigail doolittle. Abigial we are looking at small gains for the major averages in the u. S. At this point. Take a look at the dow, the s p 500, and the nasdaq. Even though the gains are as modest as they are, a continuation of the risk on town, the Risk Appetite we have had as investors look past trade fears and other macro uncertainty ahead to the fed next week. Confirming that risk on town, take a look at bonds. Haven bonds pulling back, the 10 year yield up six basis points. A risk on town. If we switch to sectors, two of the top sectors on the day, energy and financials. Financials being helped out by rising yields. An interesting divergence. We have the Goldman Sachs index of the most shorted stocks. That index is up 2. 2 . Those are the more momentum stocks. We have a momentum Index Trading lower, down 1. 3 . An interesting divergence to Pay Attention to and see how it plays out. We have had this rally over the last couple of weeks. This is the New York Stock Exchange composite index. We see that it is in this range over the last year and a half. On the bottom is the number of components above the 50 day moving average. We see as this index has gone higher, it tends to be above the 50 mark, right now right on the 50 mark. The recent rally is not great. The buyers have to step up more. Speaking up speaking of stepping up, lots of activist buyers. We have shares of at t up as Elliott Management has announced a 3. 2 billion state. They are looking to boost the stock by 50 by making cost cuts and divesting assets. Up. Es of callum petroleum finally, take a look at the shares of the personal brand company, they are lower. Last week it was said the company was making bad acquisitions. Those shares down 3. 3 . David coming up, three years later and everything about brexit still seems up in the air. We will talk to jacob kierkegaard of the Peterson Institute about where things are headed. That is next and this is bloomberg. David this is balance of power on bloomberg television. We turn to Mark Crumpton for bloomberg first word news. Mark Boris Johnson is trying to make it harder for lawmakers to block his plan for a do or die brexit. He is deciding to suspend the u. K. Parliament at the end of Business Today and talked over 14. Prime minister johnson has insisted the u. K. Must leave the eu on october 31 with or without a divorce agreement. Some lawmakers are calling the suspension a coup. In the meantime, house of wills speaker says he cap down october 30 he will step down by october 31. He says he could leave earlier if lawmakers unexpectedly back Boris Johnsons call for a snap election in midoctober. The u. S. Treasury secretary Steven Mnuchin is sounding optimistic about u. S. China trade talks. He says progress has been made in chinese officials will travel to washington next month and what he calls a sign of good faith. Of thepect the Governor Peoples Bank of china to come over for these tops. Part of the conversation we will for these talks. Part of the conversation is around currency manipulation. Mark secretary mnuchin told foxbusiness news President Trump is willing to continue with tariffs on chinese goods if there is no deal. He also added he sees no signs of u. S. Recession. The House Judiciary Committee will vote thursday to set rules for impeachment hearings. It is a technical step. The panel will still have to introduce impeachment articles against the president and win approval from the house if it wanted to pursue the process. Nancy pelosi has urged caution, saying the public does not support impeaching President Trump. Israeli Prime Minister Benjamin Netanyahu lost his 11 hour bid to have cameras installed in polling stations during next weeks elections. The Prime Minister insists the measure is a matter of transparency to prevent voting fraud in arab districts. After storming setting, a Parliamentary Committee rejected the measure. In of facebook video sunday, netanyahu hinted that air of forgery prevented him from winning the 8 that arab forgery prevented him from winning the april vote. 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 . Isid the British Parliament about to suspend its operations for a month at the request of Boris Johnson and the order of the queen, but not before enacted legislation barring the Prime Minister from leaving the eu without an agreement. We welcome jacob kierkegaard, Pearson Institute for International Economics senior fellow. The first question i have is is it over . Parliament sit a no deal brexit. Parliament said you cannot do it and it does not look like Boris Johnson said you cannot turn it around. Jacob it is over for a no deal brexit on october 31. What we would see probably around the end of october is therell be a new snap election ,alled in Great Britain sometime in november or december, and then we will see what the outcome of those elections are. If Boris Johnson wins in out light election wins an outright election and becomes Prime Minister again, i would say the risk of a no deal is still on the table. David that is interesting. You think there will be a snap election. Parliament has turned that down twice. I believe they are turning it down again today. What will change . Will people change their vote because they feel more comfortable having the legislation in place for no deal brexit . Jacob yes. It is partly a political game. The labour party and the opposition in parliament basically want to be able to campaign that Boris Johnson broke his promise. , theber he said do or die u. K. Is leaving on october 31. If you only have the election after that date, when Boris Johnson had to eat crow and go back and ask the eu for another extension, they will paint him as a weak and indecisive leader and then hope in their mind that will be enough to defeat him. David it is fair to say one of the biggest stumbling blocks has been the backstop. What to do on that irish border. We had Boris Johnson go to ireland and make another promise. Listen to what he said. Is someone who went to the border several times before the good friday agreement and shuttered to see watchtowers on u. K. Soil, i can say now, as i said many times before, the u. K. Will never ever institute checks at the border. David i do not get it. Even if he gets the election and gets extended into 2020, what is the solution . Theresa may tried again and again to find one. How can you not have a border there and have the u. K. Outside the eu and ireland in . Jacob there is only one solution, which is to have the border in the irish sea, so that Northern Ireland remains a member of the eu, the internal market, the customs union, and other things. This is something Boris Johnson and the British Government has previously rejected. Unless you do that, it is very difficult for me to see how you avoid having some sort of border with physical infrastructure in Northern Ireland. Somewhere, put it thereby splitting the u. K. Apart. David there is a lot of pressure on Boris Johnson and the u. K. As they try to figure out a way out of the eu. Is there increasing pressure across the channel as they see their economy slow down, they feel any more pressure to get this resolved . They have other fish to fry, so to speak. Jacob there has been a lot of other issues on the european agenda at the moment. Climate change, the iran deal, refugees, we can go down the list. It is fair to say the never ending brexit saga is increasingly wearing patients then across the eu. I do not think the recent economic slowdown has changed that calculus very much because the countries most significantly affected by a no deal brexit ireland, the netherland, and germany, are all countries in relatively economic good situation still, not ones that are going to change their principal position on brexit just for a quarter or two of better economic performance. David at the same time, the eu exports far more to the u. K. Than the reverse. If you took away those exports, or diminished them because of barriers, couldnt that damage the european economy . Jacob no doubt this would hitificantly a negative to ireland, to the netherlands, to germany. The biggest exporters to the u. K. If you do not have a principal approach and do not solve the Northern Ireland border problem in a satisfactory manner, you fundamentally undermine the integrity of the internal market in the eu. You create a potential backdoor in and out of the eu. Exporters willan certainly say that is a far bigger risk than a shortterm hit to exports to the u. K. Expert,ou are european but let me do a compare and contrast. We saw in the u. K. Extraordinary events, various conservative members leaving are being kicked out of the party. There is a division in the conservative party. People are abandoning Boris Johnson. That does not seem to be happening with republicans with President Trump. What is the difference . Jacob the difference is that many conservatives in the Republican Party think President Trump is only going to be around for eight years, and then they can live to fight another day. Many conservatives know that if you end up leaving the eu, especially with the no deal, you may find the u. K. In a political wilderness for a generation. Therefore, they have less of a choice in standing up to the leadership and the policies they oppose. David very good point. The stakes are so much higher with respect to brexit. Many thanks to jacob cure regard , Peterson Institute for International Economics senior fellow. Still ahead, fannie and freddie. Shareholders get a double those of good news. Will be enough to finally escape government control . That is next. This is bloomberg. David you are watching balance of power. We are looking at fannie mae and freddie mac, each rally more than 27 after a Court Victory and encouraging comments from treasury secretary Steven Mnuchin. Kailey leinz is here with more. After 10 long years, they will finally get out from under . Kailey last thursday was when all of this was started when the treasury gave a proposal for an overhaul finally releasing these two from government control. Since then, all of the companys profits have gone to the treasury, even 100 billion in dividends they paid to the treasurer beyond their actual bailout. That is something called the net worth sweep. That is what is at stake in the court case. The ruling came on friday. A victory for some of these investors. Supported the idea shareholders have been long been arguing that is illegal. Than 200 s up more for both of these on a yeartodate basis because investors have long been betting that change is finally going to,. That court ruling inspired and upgraded at Compass Point that may inspire the administration, and we had an Administration Official speaking on foxbusiness, Steven Mnuchin, saying he could see soon that the companies will be able to retain their profits. He said that could happen in the next month or so. But as a double boost to the stock. David last week the Treasury Department came out with a plan. A fairly elaborate plan. Now Mitch Mcconnell<\/a> will form some type of bipartisan consensus around gun control. Those Mass Shootings<\/a> over the summer weighing heavily on the minds of lawmakers as they return. Last but not least, they still have to pass spending bills by the end of the month or else we will have a government shutdown. David over the weekend, an extraordinary story about the camp david accords that did not happen. Therese rafael in london. It is a law. Does that mean Boris Johnson<\/a> cannot leave the eu without an agreement . Therese it means he has to request an extension from the European Union<\/a> if he cannot get an agreement. There is some question about whether he will find some kind of legal wiggle room on that extension, or whether he would then make it so unattractive to the eu to grant the extension, which needs to be done unanimously by the other 27 members. It is not for certain yet there will be in extension. Law puts a huge roadblock in Boris Johnson<\/a>s way, and the other roadblock is the election he has been seeking, that he wanted to have in the middle of october, before october 31 and the deadline for brexit, it is probably not going to happen. Parliament is set on denying him that. It has not been happy days for Boris Johnson<\/a>. David as i understand it, they only have it for tonight. Doesnt parliament go out of existence for a while . Therese that is right. Move tonight, johnson will to suspend parliament until october 14, when a new session of parliament will begin with the queens speech. What will happen the next five weeks is crucial. That is where johnson will attempt to get a deal. That is what he says he will seek to do. Having been thwarted from having an early election, that seems to be his best bet to try to avoid the extension that parliament is trying to force him into. David thank you so much. Lets stay in london and go to our colleague stuart wallace. We have a new oil minister in saudi arabia. A member of the royal family. At the same time they say no change in policy. If there is no change of policy, why a new minister . Stewart two big takeaways from this. If you are in the oil market, the minister said there would be no change in policy. Was expected, but youre seeing a rally in the price their. Was expected, but youre seeing a rally in the price their. The second big take away and the thing you mentioned, this is the first member of the royal family ever to hold this position. Held byly it was always a technocrat, in part to reassure the markets that you had someone who knew the industry, and also to make sure no individual member of the house held that lever of power, all of the revenue. What this is telling you is there a shift in sentiment in saudi arabia. In this instant, he also happens to be supremely qualified. He has been going to opec meetings for a quarter of a century. They found the right guy for the job, but also more importantly a member of the royal family and that says a lot about semi domestic policy. David is this about oil or domestic politics within the royal family . Is this a move to consolidate. The new oil minister is the halfbrother of the crown prince. Business of consolidation of power . Stuart it feels like it. While technocrats have only ever industry, the royal family has been calling the shots. By transferring that position to the royal family, they expose themselves to any mistakes they make in policy. ,hen the Oil Price Goes<\/a> south than that will fall squarely on the royal family for the first time. David thank you so much. Now lets go back to kevin cirilli. I mentioned the afghanistan incident where President Trump<\/a> told us he was going to have a meeting we never knew he was going to have to bring peace to afghanistan. This is what mike pompeo said over the weekend. We finally reached a point where we were close. We make progress and then the taliban failed to live up to a series of commitments. When that happened, President Trump<\/a> set i will not take that deal. I will not work with someone who cannot deliver. David the question for all of us is what comes next . It sounded like maybe they were moving to some sort of agreement, good or bad. Where are they . Kevin President Trump<\/a> said he was working with taliban leaders in order to lead to a troop withdrawal in americas longest running war. On saturday, the president weeding something unbeknownst to reporters, that he was canceling that meeting at camp david as well as with the afghani president. It comes at a time following a deadly attack in cabell in kabul thursday that left 12 dead and more injured, the taliban has claimed responsibility for that attack. It comes just two days before the anniversary of the september 11 terrorist attacks. It dominated discussions. Criticisms from the democrats about the president considering to meet with taliban leaders at camp david. In terms of foreign policy, it looks like the president striking a new town against the taliban following the wake of those deadly attacks they claimed credit for. David the timing was at best unfortunate. The taliban hosted al qaeda, who attacked us 18 years ago. Now it is time to find out what is going on in the markets. We turned to abigail doolittle. Abigial we are looking at small gains for the major averages in the u. S. At this point. Take a look at the dow, the s p 500, and the nasdaq. Even though the gains are as modest as they are, a continuation of the risk on town, the Risk Appetite<\/a> we have had as investors look past trade fears and other macro uncertainty ahead to the fed next week. Confirming that risk on town, take a look at bonds. Haven bonds pulling back, the 10 year yield up six basis points. A risk on town. If we switch to sectors, two of the top sectors on the day, energy and financials. Financials being helped out by rising yields. An interesting divergence. We have the Goldman Sachs<\/a> index of the most shorted stocks. That index is up 2. 2 . Those are the more momentum stocks. We have a momentum Index Trading<\/a> lower, down 1. 3 . An interesting divergence to Pay Attention<\/a> to and see how it plays out. We have had this rally over the last couple of weeks. This is the New York Stock Exchange<\/a> composite index. We see that it is in this range over the last year and a half. On the bottom is the number of components above the 50 day moving average. We see as this index has gone higher, it tends to be above the 50 mark, right now right on the 50 mark. The recent rally is not great. The buyers have to step up more. Speaking up speaking of stepping up, lots of activist buyers. We have shares of at t up as Elliott Management<\/a> has announced a 3. 2 billion state. They are looking to boost the stock by 50 by making cost cuts and divesting assets. Up. Es of callum petroleum finally, take a look at the shares of the personal brand company, they are lower. Last week it was said the company was making bad acquisitions. Those shares down 3. 3 . David coming up, three years later and everything about brexit still seems up in the air. We will talk to jacob kierkegaard of the Peterson Institute<\/a> about where things are headed. That is next and this is bloomberg. David this is balance of power on bloomberg television. We turn to Mark Crumpton<\/a> for bloomberg first word news. Mark Boris Johnson<\/a> is trying to make it harder for lawmakers to block his plan for a do or die brexit. He is deciding to suspend the u. K. Parliament at the end of Business Today<\/a> and talked over 14. Prime minister johnson has insisted the u. K. Must leave the eu on october 31 with or without a divorce agreement. Some lawmakers are calling the suspension a coup. In the meantime, house of wills speaker says he cap down october 30 he will step down by october 31. He says he could leave earlier if lawmakers unexpectedly back Boris Johnson<\/a>s call for a snap election in midoctober. The u. S. Treasury secretary Steven Mnuchin<\/a> is sounding optimistic about u. S. China trade talks. He says progress has been made in chinese officials will travel to washington next month and what he calls a sign of good faith. Of thepect the Governor Peoples Bank<\/a> of china to come over for these tops. Part of the conversation we will for these talks. Part of the conversation is around currency manipulation. Mark secretary mnuchin told foxbusiness news President Trump<\/a> is willing to continue with tariffs on chinese goods if there is no deal. He also added he sees no signs of u. S. Recession. The House Judiciary Committee<\/a> will vote thursday to set rules for impeachment hearings. It is a technical step. The panel will still have to introduce impeachment articles against the president and win approval from the house if it wanted to pursue the process. Nancy pelosi has urged caution, saying the public does not support impeaching President Trump<\/a>. Israeli Prime Minister<\/a> Benjamin Netanyahu<\/a> lost his 11 hour bid to have cameras installed in polling stations during next weeks elections. The Prime Minister<\/a> insists the measure is a matter of transparency to prevent voting fraud in arab districts. After storming setting, a Parliamentary Committee<\/a> rejected the measure. In of facebook video sunday, netanyahu hinted that air of forgery prevented him from winning the 8 that arab forgery prevented him from winning the april vote. 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<\/a>. This is bloomberg. David . Isid the British Parliament<\/a> about to suspend its operations for a month at the request of Boris Johnson<\/a> and the order of the queen, but not before enacted legislation barring the Prime Minister<\/a> from leaving the eu without an agreement. We welcome jacob kierkegaard, Pearson Institute<\/a> for International Economics<\/a> senior fellow. The first question i have is is it over . Parliament sit a no deal brexit. Parliament said you cannot do it and it does not look like Boris Johnson<\/a> said you cannot turn it around. Jacob it is over for a no deal brexit on october 31. What we would see probably around the end of october is therell be a new snap election ,alled in Great Britain<\/a> sometime in november or december, and then we will see what the outcome of those elections are. If Boris Johnson<\/a> wins in out light election wins an outright election and becomes Prime Minister<\/a> again, i would say the risk of a no deal is still on the table. David that is interesting. You think there will be a snap election. Parliament has turned that down twice. I believe they are turning it down again today. What will change . Will people change their vote because they feel more comfortable having the legislation in place for no deal brexit . Jacob yes. It is partly a political game. The labour party and the opposition in parliament basically want to be able to campaign that Boris Johnson<\/a> broke his promise. , theber he said do or die u. K. Is leaving on october 31. If you only have the election after that date, when Boris Johnson<\/a> had to eat crow and go back and ask the eu for another extension, they will paint him as a weak and indecisive leader and then hope in their mind that will be enough to defeat him. David it is fair to say one of the biggest stumbling blocks has been the backstop. What to do on that irish border. We had Boris Johnson<\/a> go to ireland and make another promise. Listen to what he said. Is someone who went to the border several times before the good friday agreement and shuttered to see watchtowers on u. K. Soil, i can say now, as i said many times before, the u. K. Will never ever institute checks at the border. David i do not get it. Even if he gets the election and gets extended into 2020, what is the solution . Theresa may tried again and again to find one. How can you not have a border there and have the u. K. Outside the eu and ireland in . Jacob there is only one solution, which is to have the border in the irish sea, so that Northern Ireland<\/a> remains a member of the eu, the internal market, the customs union, and other things. This is something Boris Johnson<\/a> and the British Government<\/a> has previously rejected. Unless you do that, it is very difficult for me to see how you avoid having some sort of border with physical infrastructure in Northern Ireland<\/a>. Somewhere, put it thereby splitting the u. K. Apart. David there is a lot of pressure on Boris Johnson<\/a> and the u. K. As they try to figure out a way out of the eu. Is there increasing pressure across the channel as they see their economy slow down, they feel any more pressure to get this resolved . They have other fish to fry, so to speak. Jacob there has been a lot of other issues on the european agenda at the moment. Climate change, the iran deal, refugees, we can go down the list. It is fair to say the never ending brexit saga is increasingly wearing patients then across the eu. I do not think the recent economic slowdown has changed that calculus very much because the countries most significantly affected by a no deal brexit ireland, the netherland, and germany, are all countries in relatively economic good situation still, not ones that are going to change their principal position on brexit just for a quarter or two of better economic performance. David at the same time, the eu exports far more to the u. K. Than the reverse. If you took away those exports, or diminished them because of barriers, couldnt that damage the european economy . Jacob no doubt this would hitificantly a negative to ireland, to the netherlands, to germany. The biggest exporters to the u. K. If you do not have a principal approach and do not solve the Northern Ireland<\/a> border problem in a satisfactory manner, you fundamentally undermine the integrity of the internal market in the eu. You create a potential backdoor in and out of the eu. Exporters willan certainly say that is a far bigger risk than a shortterm hit to exports to the u. K. Expert,ou are european but let me do a compare and contrast. We saw in the u. K. Extraordinary events, various conservative members leaving are being kicked out of the party. There is a division in the conservative party. People are abandoning Boris Johnson<\/a>. That does not seem to be happening with republicans with President Trump<\/a>. What is the difference . Jacob the difference is that many conservatives in the Republican Party<\/a> think President Trump<\/a> is only going to be around for eight years, and then they can live to fight another day. Many conservatives know that if you end up leaving the eu, especially with the no deal, you may find the u. K. In a political wilderness for a generation. Therefore, they have less of a choice in standing up to the leadership and the policies they oppose. David very good point. The stakes are so much higher with respect to brexit. Many thanks to jacob cure regard , Peterson Institute<\/a> for International Economics<\/a> senior fellow. Still ahead, fannie and freddie. Shareholders get a double those of good news. Will be enough to finally escape government control . That is next. This is bloomberg. David you are watching balance of power. We are looking at fannie mae and freddie mac, each rally more than 27 after a Court Victory<\/a> and encouraging comments from treasury secretary Steven Mnuchin<\/a>. Kailey leinz is here with more. After 10 long years, they will finally get out from under . Kailey last thursday was when all of this was started when the treasury gave a proposal for an overhaul finally releasing these two from government control. Since then, all of the companys profits have gone to the treasury, even 100 billion in dividends they paid to the treasurer beyond their actual bailout. That is something called the net worth sweep. That is what is at stake in the court case. The ruling came on friday. A victory for some of these investors. Supported the idea shareholders have been long been arguing that is illegal. Than 200 s up more for both of these on a yeartodate basis because investors have long been betting that change is finally going to,. That court ruling inspired and upgraded at Compass Point<\/a> that may inspire the administration, and we had an Administration Official<\/a> speaking on foxbusiness, Steven Mnuchin<\/a>, saying he could see soon that the companies will be able to retain their profits. He said that could happen in the next month or so. But as a double boost to the stock. David last week the Treasury Department<\/a> came out with a plan. A fairly elaborate plan. Now Steven Mnuchin<\/a> says three to six months we can get this done. Does he need congress, penny get it through congress in three to six months . Kailey the election was almost three years ago and we just now got the treasury report. This has been a slow rolling ball. Some of it the administration could bypass. Congressman mnuchin said he would be comfortable doing that and the net suite would be one of those things. He will be appearing on capitol hill tomorrow and the administration is against the clock. You have the election coming in 2020, and should a democrat take the white house this overall could be thrown out. There is concern fannie and freddie could lead to more extensive mortgages. That is concern for the president going into 2020. If you already have signs of a slowing economy, that is not something you want going into an election year. David we have to remember fannie and freddie are there to make mortgages cheaper. One of the costs we discovered in 2008 was they are cheaper, but that is because people are taking more risks. How can they keep the mortgages cheaper not take more risks . Kailey that is it exactly. Because they dominate about half of the mortgage market, one of the treasury plans is to great more competition. The question is how long it will take to do that. David thanks to kailey leinz. Coming up, he spent more than four decades in the marine serving as a commander in the gulf war and the war in iraq. Jim mattis then answered the call of duty to be defense secretary. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. David this is balance of power on bloomberg television. Im david westin. For bloomberg first word news, we go to Mark Crumpton<\/a>. Mark north korea says its willing to resume disarmament talks with the United States<\/a> this month but the country says the u. S. Must come to the negotiating table with proposals that satisfy pyongyang, or dealings within the countries will come to an end. Talks fell apart in february. Kim jongun had demanded sweeping sanctions relief in return for partial disarmament. 27 members have been named in a European Commission<\/a> but one name was missing from the list. No british commissioner was named on the assumption that brexit will happen october 31. Chose 14 menelect and 13 women for the commission with proposes laws to the block and insurers they are put into practice. Coast guard Officials Say<\/a> four south korean crewmembers are ok and are working to rescue them. They were trapped inside a massive cargo ship that capsized sunday. Rescuers had to repel down the side of the vessel and drill a hole through the hull to contact four. President trump heads to North Carolina<\/a> tonight, head of a closely watched special election therefore original seats. Lastials invalidated years election following allegations of voter fraud by a gop operative. The president is expected to visit coastal North Carolina<\/a> to inspect the damage left by Hurricane Dorian<\/a>. 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<\/a>. This is bloomberg. Trump came tont office promising Economic Growth<\/a>, but the markers have started signaling that some sign of a risk of recession. There is evidence some parts of the economy may have already been hit by recession. In august, u. S. Manufacturing activity contracted for the First Time Since<\/a> 2016 and recent job losses are concentrated in states that the president needs to win like wisconsin and pennsylvania. We welcome our Political Panel<\/a> genevieve wood, and basil smikle. Welcome to both of you. Genevieve, are you getting concerned, particularly as you look at wisconsin, pennsylvania, that there may be real job losses in manufacturing . Not if we continue the path that we are on and start another tariff war. The economy has been very strong under President Trump<\/a> and you will have a few places here and there will you will not have the growth that you had before, but if you look at 2016 and beyond, the economy has done very well, basically for everybody. When you look at the most recent jobs report, manufacturing was one of the top five areas where you saw an increase in jobs. This will become interesting as the political cycle moves on because you have the democrats talking about getting rid of a lot of energy jobs, and many of those are in places like pennsylvania, ohio, places you mentioned. Number,he ism indicating manufacturing activity, tracks employment pretty directly. Sooner or later, employment comes down if manufacturing continues to slide off. Basil even some of the metrics that may be described as good for the economy, there are businesses and voters who still feel a tremendous amount of exam today. When we talk about trade wars, the u. S. Is only 4 of the world population. 95 of the worlds population lives outside our borders. There is only so much we can make and sell to each other. When you have folks in the country that feel the president is closing markets for some of our businesses, as opposed to opening them, that generates real concern. , as was said earlier, we may have talked about coal and other manufacturing jobs declining, but we have also offered recommendations on the other end that could benefit those workers. My big point in saying all of this is that it does spell some trouble for the president. Someas he benefited from obama era policies going into voterssidency, will blame him directly for any sign of recession. David genevieve, talk about the democrats on stage. All of them on one stage. Do any of them have a plan that may appeal to the voters in wisconsin, michigan, pennsylvania . Genevieve not right now, if voters look at the plants all. Ly at go back to the green new deal, the medicare for all plants they are talking about. That will destroy probably 7 million jobs within the energy sector. Then youll have taxes rising on everybody. We saw what happened recently in australia with the talk of the economy doing well there, but the people were so concerned about Climate Change<\/a>, and that that would shift the election. People voted with their pocketbooks, voted for what they knew, or what they thought was a solid plan, not these Climate Change<\/a> plans, and that is what you see in the left. You saw it last week with the debate. We will see more this coming week when they talk about some other issues. Losing somee democratic candidates, picking up some republicans. Mark sanford says that he will officially run, and he really cares about the deficit, something that nobody else is talking about. Is he running on principle, or does he think there is weakness in President Trump<\/a> to get the nomination . Basil a little of both. It is unlikely a sitting president loses a primary race. The real question for mark sanford and others is, do you have the energy and support, can you marshal the support among theblicans to at least hold president more accountable, and not just leave it to democrats to do that . From the democratic point of view, what he and others do, is keeps the president busy, a little distracted, to the extent he can be, so we can promote our policies. Genevieve, as a conservative, you must be open to the possibility of somebody talking about the debt and deficit. Genevieve yes, it is great to have somebody talking about the deficit, but unfortunately for mark sanford, the president went into that state when he was running for the house, and mark sanford ended up losing. I am happy when anybody talks about the deficit as a real problem. We talked about Economic Growth<\/a> earlier. In addition to tariffs, Something Else<\/a> that drives down the economy in economic numbers for everybody is a growing deficit that we are not willing to deal with. David of those democrats on stage tonight, who has the most to lose . Basil i think joe biden does. That has been the case. Elizabeth warren is creeping in the polls. Im not sure when she will separate from Bernie Sanders<\/a> in that regard. Biden is certainly feeling some heat on his back. If he doesnt have a strong performance, that mediocre performers that he has had no not stand. When you are on stage with others, youren, need to get into that next tier. David thank you. Coming up, general jim mattis is here to tell us what for decades in the marine corps taught him about leadership. That is next. This is bloomberg. David you are watching balance of power. Im david westin. Former secretary of defense jim mattis served over and for your decades in the marine corps, as well as a Major General<\/a> commanding the First Marine Division<\/a> into baghdad. He retired as a fourstar general and then was asked to return to duty under President Trump<\/a>. He has written a memoir about his experiences. It is called call sign chaos learning to lead. We welcome general mattis to bloomberg. Good to have you here. Lets start with something you know terribly well, afghanistan. I will not ask you to comment on current policy, but from what you know, let me put it simply as a layperson. How do we avoid is being vietnam , if we pull out and have a total collapse of the regime . Jim you are hitting the essence of the issue. We have to go back to what secretary pompeo referred to as first principles. We are here in new york city. On 9 11, we were attacked by people who were stationed there, so to speak, their home base, and over 3000 people from 91 countries were murdered. We may want the war over, we may even declare the war over, but in the military we learn the enemy gets a vote. We have to work internationally to keep building the coalition against terrorism so they they have no say payment on earth. When we find a country like iran that uses terrorism as an instrument of foreign policy, as they do with lebanese hezbollah, we have to make sure the cost is high enough that they seize that behavior. David the one thing we dont want is some version of al qaeda coming back online in afghanistan, which is what happened 18 years ago. Can we do that without boots on the ground, with special forces and in the air . Do it without boots on the ground, but the whole point is to keep other countries strengthening their internal controls, processes, improve their education system, economic system, so the root causes disappear. The bottom line is we are going to have to Stay Together<\/a> as an international community. We are going to have to do this and stick with those countries that are not yet ready to do it on their own, and keep enough boots on the ground. Normally the number dropping yearbyyear as they mature, but enough boots on the ground to simply not turn the ground over to the enemy that attacked us before. David you spent over four decades protecting this country in the marine corps. I have heard you say one of the biggest threats to us is our debt and deficit. At the same time, we are spending a lot of money in the military. How do you reconcile those two things . Is that really consistent with the National Interest<\/a> in the longterm . Jim the first point i would make is we can afford survival in our experiment that we call america. That is all that is, a government by the people, of the people, or the people, is seen as a threat by authoritarians. Right now we are spending a little over 3. 1 on our military. We can afford to do even more than that, if it comes down to our survival. No matter how much it costs, it is cheaper than stumbling into ar because an adversary things we are weak. We have to align ourselves with allies, so we do not bear the full burden of this, nato being foremost, and recognize we have to adjust to it. I just finished a book called appeasement about how we stumbled into world war ii. Itn churchill asked was not named world war ii yet, it was named the great war. He said, we should call war were to the unnecessary war. Had the democracies come forward, worked together, we could have stopped the fascist must sooner. It is critical if we want to mean the piece. I have never seen these strengthened through weakness. David it is wanting to talk about how much we spend, it is another how we are spending it. How do we make sure those dollars are going to things that we need . It is possible we should be spending money in other places than we are spending now. Jim that is exactly the kind of discussion we have to have. The first up is to figure out what it is to western democracies, and in our case, americas, but they stand for and what they will not stand for. Threats, assess them, and come up with a strategy that keeps us out of war, align with our likeminded democratic nations. In that regard, you put a strategy together that recognizes reality. All strategy is a setting priorities. Then you set the priorities for what youll do. I would say america can afford survival. We can do this. Especially if we do it in league with other nations. David two lessons i took in from thep, intent commander, and then letting the troops figure out how to do it. Another is speed, tempo. When cannot get in our way . We talk about business here a lot. Even in the iraq war, you went past an ambush, and you were on the board of theranos, trying to get something out to help people. How does a leader know how fast to act and when to slow down . You have to analyze risks, quantify it to the degree you can. Businesspeople, as a group, are some of the best at this. Quantify the risk, and then determine what element of your war fightingort, machine, will take that risk, and for how long. That, youave done know, should you employ strategic patients and delay things because you dont have information. I would also point out when you are in a time competitive environment, i dont care if it is a Football Game<\/a> or a Market Opportunity<\/a> opening or closing, the morebattlefield the leader can set the vision and set the tempo and then take his hands off the Steering Wheel<\/a> and then let the subordinates he has trained and selected and now trusts to make their own cause, then you are probably going to be better calls most of the time. Not always. Then you have to adapt come improvise, and overcome. David what keeps you up at night with National Security<\/a> . Jim mostly how we treat each other as americans. George washington had a way of leading a revolutionary army. He called it, listen, you learn, you help, and then you lead. I would point out, today come in america, i dont think we are listening to one another enough. At times, we deny the reality that perhaps, the person that we disagree with maybe write every once in a while. We are going to have to make this work if we are going to keep does democracy alive. David going to that point, let me go to something you say in your book. And alle that i americans need to recognize democracy is an experiment, one that can be reversed. We all know we are better than our current politics. Tribalism need not disrupt our experiment. You come from marines, where tribalism is anathema. You are always looking out for the guy or woman next to you. We dont always have that in washington, society. How did you learn that, and what could we do to return some of that concern for the fellow american, the person on our right and left . Back to ad to get fundamental friendliness, respect for each other as americans. If we have different visions of where we want to go, lets talk about it, lets not just get into our own communities and echo chambers. We were set up to require compromise to make our government work. It is not a dirty word. What we really need to look at is, what are we turning over to our children . World war ii veterans, home and say, what a crummy world. We have been through a terrible war, and what do we do . Of that we are part world whether we like it or not, and they put up the United Nations<\/a> to talk about things. Maybe we need to be a little bit more united and be our own ally and Start Talking<\/a> and respecting one another and figure out where we have common ground, and talk about that, as much as where we dont have common ground. David so great to have you here, general jim mattis. He is the author of call sign chaos learning to lead. From new york, this is bloomberg. David this is balance of power on bloomberg television. Im david westin. Bmw is facing increasing numbers of geopolitical headwinds. The automaker was just downgraded from outperform to neutral, citing risks from brexit as well as global trade uncertainty. Matt miller caught up with the cfo at the frankfurt auto show and asked for his outlook. The group is in a complex market environment in 2019, a little bit more complicated than we anticipated, but we are doing well. Inare gaining segment share all three major areas of the , and, europe, u. S. , asia this is thanks to our strong momentum. , the financial impacts of the trade tensions is not comparable to 2018. Why . We did not have punitive tariffs in place between the u. S. And china in 2019. What will happen in 2020 will, of course, very much depend on one hand side, what is happening between the u. S. And china in the coming weeks, and on the other side, we have yes or no on the hard brexit. Are you concerned this trade war, plus a slowdown in Global Demand<\/a> will have a downside effect on bmw cars Going Forward<\/a> in 2020 . Bmw group is probably the manufacturer that is best prepared for a volatile market. Why . Is clearly one of the areas, particularly in production, where we most focus on. We know from the past, markets are volatile. We have more volatility in the last couple of years yhan we than we have had in previous years. We like to see volatile markets . F course not it is always easier if everything is predictable but we are well prepared. Prepared . Will we have a Strong Production<\/a> footprint in the u. S. We invest in the u. S. As we speak. We are strong in europe. We are investing in europe, in hungary. And we are extending our chinese production as well. In europe, the main concern is brexit uncertainties. Have you set aside any provisions in case of a hard brexit . Concernsve increased what will happen after the october 31 deadline, given what is happening in the u. K. Right now . As you know well, we have communicated and mentioned over the past year at every possible opportunity, bmw stands for free trade. Having said this, what would we do in case of a hard brexit from october 31 onward . Brexit makes it extremely likely wto tariffs would be introduced. Mean that weould would have to raise prices in many markets to offset the negative impact. Would have ase, Volume Impact<\/a>, and the Volume Impact<\/a> is finally leading to negative production impact. This is why we really urge to find a solution to a hard brexit. David that was the bmw chief Financial Officer<\/a> over other frankfurt auto show. Sign up for the balance of power newsletter at bloomberg. Com to get the latest on Global Politics<\/a> in your inbox every single day, and also check out ni balance on the terminal. Wilson is nigel joining Bloomberg Markets<\/a> to talk about the effects of brexit. Bloomberg users can interact with charts shown here on gtv. Live from new york, this is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Mark im Mark Crumpton<\/a> with bloomberg first word news. Members of the British Parliament<\/a> are debating whether to force Boris Johnson<\/a>s government to publish its preparations for a no deal brexit. They are also weighing whether the Prime Minister<\/a> can ignore a law intended to stop the u. K. From leaving the European Union<\/a> without an agreement on october 31. Prime minister johnson is trying to make it harder for lawmakers to block his plans for a do or die brexit. He had decided to suspend parliament at the end of Business Today<\/a> until october 14. In the bahamas, the death toll from Hurricane Dorian<\/a> has risen to you or before. Tens of thousands of people have lost their homes and desperate survivors are fleeing the worst hit areas. 44. Isen to afghanistan is bracing for more violence after the president canceled secret meetings with the taliban and an afghan leaders. It appeared in deal to end the war in afghanistan was imminent. 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