francine: impeached again. donald trump becomes the only president to be impeached twice. he now faces trial in the senate. treasury yields rise on a report that president-elect biden plans a covid relief package of about $2 trillion. his inauguration is in six days. and italy's government risks collapse after giuseppe conte's junior coalition partner pulls out. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene in new york. tom, i think the story in politics -- we have various political stories, about the u.s., about inauguration, but also it is the impact on treasuries because the covid relief package is much bigger than the markets we are expecting. tom: the numbers shifted on stimuli, and i mean that as a plural idea. we have gone from a general zeitgeist of $1.2 trillion, $1.3 trillion, and getting out to a

conversation around the $2 trillion number, which tells me it's going to go higher than that. francine: if you look at the markets, it is definitely repricing, and i think we will have more details on joe biden's economic plan today. what is important is how joe biden shifts the narrative away from trump, trump, trump, almost hourly, and that feels significant. tom: it is going to be a problem. someone asked me about that this money, and i said i don't know when the pardons come, but the problems will come from president trump. shifting the story from this narrative in the united states is going to be a challenge. francine: can the president pardon himself? tom: don't know. that is way above my pay grade. marty schenker has all the answers, but my feel is that it is untested. ritika: now it is up to the

senate. the house put president trump in the history books, impeaching him on a single charge of insurrection. it is the first time any president has been impeached twice. the resolution was supported by all democrats and 10 republicans. it now goes to the republican-controlled senate emma which has refused to bring back senators for the trial before inauguration. president trump on americans to unite and avoid further violence. the video released one week after his supporters stormed the capitol. he condemned the violence and set it goes against everything his movement stands for. lawmakers have been told that a coronavirus relief plan will be in the $2 trillion range. biden says that it will include direct payment to american families and state and local funding. in china, a record high in

december, rising more than 18% from a year earlier. demand for medical supplies and electronic goods surged in 2020. for a full year, the trade deficit is 27% higher. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i am ritika cooped up. this is bloomberg. -- i am ritika gupta. this is bloomberg. tom: i'm going to call a further turn in the market. we are beginning to see some earnings appear. yields, as francine mentioned, two basis point move. oil churns, and currency markets , no information. sterling buttressed right up just under 1.37. francine: there is a lot of news out there. treasury yields rising -- you mentioned that -- it is all

suggestion that joe biden's relief plan will be at $2 trillion. there is a government crisis come a constitutional crisis, given italian politics have the way it works, it is unclear whether we will have a new prime minister, whether the current prime minister will have enough votes in parliament to form another coalition. i also want to spend some time on this french company, yesterday it was up 10% after a canadian grocer wanted to make an offer on it, and other french government is trying to block it. this is politics taking over m&a . the french finance minister is saying carrefour is a strong company and can survive its model. the president has been charged with incitement for his role in

the capitol rights. rep. pelosi: he must go. he is a clear and present danger to the nation that we all love. francine: joining us now is marty schenker, who oversees all of our coverage. first of all, good morning. when you look at what yesterday was, did this just show us the division within the republican party and how difficult it will be for them to take a stance against donald trump? marty: there is no question the republican party is divided, but what it did show is that you had 10 republican representatives cross over with the democrats to vote to convict. it may seem like a small number, but it is the most bipartisan impeachment vote ever taken in the united states, and so it does show that there is a block of republicans who are willing to vote against this president,

and the question is, what happens in the senate now. francine: what happens to the republican party? it is 10 out of 200 representatives, i believe. marty: it is not that many, but i think the battle lines have been drawn between mcconnell separate republican party and donald trump's republican party. mcconnell has said he is not disappointed with the impeachment action but he has not said whether he would vote to convict. on the other, donald trump released a video last night, which was a full throated condemnation of violence. there is reporting that his closest aide said he must do it to avoid legal problems once he leaves office. so it is unclear. meanwhile, the republicans who support trump seem to think that his actions last week have no impact on their support. tom: marty, good morning.

did we learn anything about the phrase that was written about -- high crimes and misdemeanors? what a wonderful phrase. did we identify yesterday high crimes and misdemeanors? marty: well, there is no question that sedition and excitement are very strong words. unlike the first impeachment, where the test whether this represented high crimes is fully debated, this when i think will be very difficult to counter. so the question is, what is going to happen in a senate trial? will donald trump send people for his defense? who would those persons be? would rudy giuliani actually show up in the senate to defend donald trump?

it would be quite a show. francine: you and i -- tom: you and i remember when -- there is a point in lincoln where you understand washington was at risk of being taken, and they had soldiers in washington protecting across the potomac what was then robert e. lee's mansion. what is the symbolism to you, of all the soldiers at the capitol come as bloomberg brilliantly in their headline alludes back to the civil war? marty: it is a symbol of the division within this country that forces us to deploy troops in order to protect our democracy. tom: is it a separation of the south and the north? i don't mean the romance of south carolina in all the movies that we know. but are we setting up a new divide with the deep south? marty: it is hard to say that that is the case, because the people who stormed to the

capitol came from all over this country, and there are pockets of conservatism and even white supremacy in new york state as much as in alabama. it is an urgent question for the united states. how do you bring these people who think that storming the capitol is an expression of democracy back into the mainstream. francine: how does joe biden regain the airwaves to talk about policy? marty: well, today he is going to reintroduce -- he is going to introduce his economic plan, or some people speculate could be as high as $2 trillion. clearly joe biden wants to bring the discussion back to bringing the country together and to work with republicans to get a stimulus plan. that conflicts with a senate trial. now, if they move immediately to a trial, under senate rules,

that is the only thing they can do. he has to make a determination whether he wants the senate to proceed with that. francine: marty, thank you so much. coming up, we speak about fixed income, we talk about treasuries with andrew balls. that is coming up shortly, and this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

tom: good morning, everyone. bloomberg surveillance from new york and london. the continued story in washington throughout the day. look for kevin cirilli from coast-to-coast tonight. david westin holding court on all of washington at 12:00 noon

today. we try to get back to normal, and normal is 12 and 15 page reports that are compelled to be read. that is usually the case with pimco. andrew bells -- andrew balls joins us now. i like the behavioral contract of the -- construct of the pimco report. i'm going to go back to a tv show long ago and far away of the police in brooklyn -- be careful out there. you make it very clear within the certitudes of 2021, we need to be careful. what does that mean? >> i like the hill street blues reference, if that's right. this is the way markets work. it may look very difficult out there now in terms of covid across the world, but the market looks forward to vaccination and the recovery. we forecast a strong recovery from the second quarter onwards.

the strongest growth in a decade this year. but the markets have priced this in if you look at equity markets, risk asset hate your. as we say, we have a pretty optimistic view on the outlook, looking through this difficult first quarter. but be careful because there is a lot of risk and a lot of good news priced in. francine: the -- tom: the acclaimed concept of the new normal, people are always citing pimco. forget about it, what is the new normal at pimco? andrew: i think that construct has served us well, and if you look at the level of interest rates, central banks anchoring as it occurs, then that has served it well. looking forward, i think as you look beyond this year, you start to see real uncertainty in terms

of the outlook, and there is always uncertainty in the outlook. but plausible cases for higher inflation, plausible cases deflation, plausible cases for ongoing fiscal activism -- we are talking about the biden economic plan today, but also the potential for fiscal retrenchment. yes, we may have another year or so, another couple of years for the new normal to go, but looking beyond that, i think that as investment managers we are going to be in a world with -- positive and negative. francine: what is your feeling right now? is this reflationary trade, does it have legs? andrew: i think the reflationary trade has legs in the near term because i do think that it is

darkest before the dawn. there is a lot of good news in terms of the progression on vaccines, and there should be a lot of pent-up demand so you can get to very strong growth outlooks. central banks have told us that they can remain very supportive, and we expect that to be interesting when this gets challenged, you know, the reflation runs into greater uncertainty on central banks later. but that is not going to be, i don't think, a story for this year. certainly not the six months to come. so, yes, i think that is -- there is further room to run. but that said, we should take treasuries -- you are anchored by the federal reserve which is going to not raise -- sorry,

going to continue quantitative easing, tapering at the end of this year but much more likely next year, years to come before we have rate increases. janet yellen, the treasury, somebody is going to be working very closely, very supportive from the fed. you had yield curve control, not formal, but informal, and i think that should be anchoring for fixed income yields. if treasuries go up too much further, then they will start to look attractive, even at relatively low yields compared with history. francine: andrew, where are you expecting the 10 year yield to end? andrew: i think around these levels, 1% to 1.5% would be reasonable. i think as an expectation. as we get confirmation of the

sort of outlook that we are forecasting in our pimco outlook. but you do have that push and pull, lockdowns versus vaccines, unknowns from the medical experts -- i think it makes sense for fixed income markets and markets more generally to look to the other side, to price in the recovery. but once you have priced in all the good news, you're just left with the downside risks, disappointments on fiscal is one example. scarring in the economy is another. tom: you have mentioned it twice. andrew balls with us on the fiscal disappointment. he tries to look over the biden valley. he is with pimco, and we are thrilled that he can stay with us this morning. futures up eight, dow futures up 1.14. a churn to the market. we are tuned to washington. that will be our major focus

today across all of bloomberg news, but we cannot stop considering the economics of the moment. mary daly -- i will get it out. too early in the morning. mary daly of the san francisco fed in the 11:00 hour. this is bloomberg. good morning. ♪

francine: this is bloomberg surveillance. tom, we are having a good

conversation about treasuries. i know you want to go back and talk with andrew balls, who is still with us. you want to talk about negative rates. before we go to all of that, there is another constitutional crisis in italy. if the government falls, i think it would be the 72nd government in about 78 years. tom: i was going to say the 72nd government since, what, christmas? francine: very funny, tom. it is amazing, but actually for once it is difficult for an american to criticize italian politics. [tom laughs] andrew: i think italian yields benefit a lot from the ecb policy and from the fiscal support, the funds. so you have seen the rally. you have seen that in the past nine months. i think here it is business as

usual, another risk to the italian government. i think it is very unlikely that you are going to have another election, because the incumbent, to have an incentive to election, it would be supported by the far right party. i don't think that is likely. mr. enzi -- mr. renzi -- my expectation is that the coalition, maybe with some reformulation, maybe some support from the berlusconi mps, maybe it continues. but it is a reminder with italy, as always, there is always going to be that fragility. tom: andrew, i want you to take

a page from the wonderful samuel britton, or even the great work of john from the financial times from years ago. the idea is that if we look out into the mist, fiscal debt is coming. can we see the tipping point when it becomes a challenge? andrew: i think it is really important to focus on the low funding rate. so if you look at the cost, even with on the government side, even with higher government debt, it is not problematic. in the case of italy, this is particularly important full-time in general, this is important. so i think it means that central banks are going to remain pretty weathered to the fiscal authorities, that you are going to have forms of ongoing yield

curve control, in effect, to maintain the stability and create the room for much-needed fiscal support, as we are going to see in terms of the biden proposal. think where it gets difficult would be in the future, in the world of rising interest rates. for example, if you did have upside inflation pressures. that's where the monetary fiscal part gets harder. francine: thank you so much. coming up on lumber surveillance simulcast, jeffrey currie, goldman sachs global head of the commodities. that is coming up at 1:30 p.m. in london, 8:30 a.m. in new york. this is bloomberg. ♪

francine: this is bloomberg surveillance.

italy's government at a risk of collapse. the former primary pulled his ministers from the coalition attacking the prime minister for failing to do enough to tackle the problems. we are looking at the various scenarios and what is happening next. as always, thank you for joining us. when you look at the various possibilities, how unlikely is it that fresh elections are called for? >> thank you for having me. i would say it is really an extreme scenario right now for a number of reasons. it is very delicate for the country. the president of the republican will go to great lengths to avoid an election on top of the pandemic and economic crisis. on top of that, the recent reform of parliament implies

that the confirmation of parliament that will come out of the election would be difficult -- different and there is little political incentive on the side of parliament to end their term. it is very unlikely in my view. francine: on twitter, you have a great to explain possibilities. i tried to go with -- go through it with tom. does this just go to the heart of a technocratic government? a prime minister staying in charge but does this go to the heart of the problem of italy's sustainability? silvia: i would say the two main possibilities are discovering that we get a different prime minister of political extraction . it is not possible to find a majority for that type of solution.

it takes a technocratic solution backed by a national unity government, the only thing that keeps the country together. i would argue, i would favor this solution for the election coming after that. that is a different topic that we can talk about. talking about sustainability, that is not much of a problem because of the environment we are in, the very low rates and part of issuance in 2021 and 2022 puts this political crisis in a favorable environment. tom: again, your feed is phenomenal. i learned so much. [speaking foreign language] i got two choices.

cut to the chase. if we have a redo, a technocratic solution, can they set up foundries to bring order -- set up boundaries to bring order to the chaos? silvia: theoretically, yes. the prime minister will have some ownership on the government and parliament that will back him or her. the big question is whether in practice this is possible and for how long. if you look in the past, he was a skilled technocrat coming to power where urgency was stronger than what we are facing now in terms of the likelihood of italy back then. the boundaries were in place and they stayed in place for about one year but soon after, when the urgency subsided and the support from parties started

also to be lower and eventually turned into a government crisis again. i would say it is possible to put boundaries around where you can and what to do. any government still needs to survive and for how long this will be available, it is unclear right now. francine: first of all, shout out to tom. i'm so glad his italian lessons have paid off because he speaks with a decent accent. in the next six months, how important is it that italy knows where to spend recovery funds? if they are squandered in the next six months, got it put italy back like years -- does it put italy back rideshares -- back lightyears?

silvia: restarting growth and putting the country on a higher potential growth that is fundamental, but also for the entire european continent because this is the furthest we have gone toward having some fiscal union, common spending, and very much of whether this will turn into a permanency of the european project is relying on countries doing the right thing for the money and spending them in a proper way and in an accountable way. to be entirely honest, we are not part of the initial draft of the national recovery plan which has improved lately. in the next six months, it will really make the difference not only in terms of italy surviving in the future, but also the european project turning into

something more stable and strong. francine: thank you so much, silvia merler. let's get straight to first word news. ritika: president trump has become the first president ever to be impeached twice. the resolution was approved by democrats in the house and 10 republicans. the president was accused of one count of incitement and insurrection. the next move is up to the republican that controls the senate. it has already rejected requests to bring senators back early. mitch mcconnell says he has not decided whether to vote to impeach president trump. he sent a note to colleagues after reports that he had agreed to vote in favor of impeachment. he intends to listen to the legal arguments before deciding. national guard troops have taken positions up to u.s. capitol. more than 20,000 personnel have been summoned. that is in -- that turned the

capital into an armed camp. there is a major security threat of the round -- threat around the inauguration and trying to prevent a repeat of the riots. prime minister boris johnson warns that hospitals could be overwhelmed after the country hit its highest daily coronavirus death toll since the pandemic began. johnson said there is risk of intensive care capacity being exceeded. lockdown rules to curb the spread of the disease. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta, this is bloomberg. tom: thank you so much. we move on from the history of this impeachment to january 19 and the senate's return to washington. we frame out for the president-elect, his past to january 20.

-- his path to january 20. early morning in washington, this is bloomberg.

♪ rep. pelosi: we know that the president incited this insurrection, this rebellion against our country. >> spares no way this helps the nation deal with the tragic events of last week -- there is no way this helps the nation deal with the tragic events of last week. >> if we give a fiery speech to a crowd of partisans, this capital would be to sergeant. >> you must not remain in power longer. >> we must impeach and remove this president. >> gift and siding and -- if and

siding an insurrection -- inciting an insurrection is not enough -- >> hey vote to -- a vote to impeach will further damage. >> he is capable of starting a civil war. he must be impeached. >> this threat must be extinguished immediately. >> last week there was a domestic threat at the door of the capital and he did nothing to stop it. i will vote yes on these articles of impeachment. tom: an important vote from the gentleman from washington state, mr. newhouse joining another washington state college and 10 republicans in voting against their president. thank you so much to our team for putting that together through the night, the voices of impeachment. joining us now, francine lacqua

in london, tom keene in new york. he has a unique set of qualifications to talk about this historic moment. i want to fold in here your international experience with the response of big business. big business, including new york, is pulling away from mr. trump and his supporters. there is no question about that. do you perceive it as an interim moment or is there a permanence to how business will disassociate themselves from a certain part of the republican party? >> that actually might hinge on impeachment. if the president himself is impeached, then he is going to have a hard time getting support from any business in the future. it is pragmatic. they will be looking at who is in charge at what moment in time. they are identifying the fact that the senate, the house and

the president are all democrat and there has been a turning point. i think this is an interim moment, really. it has been a really horrific and shocking week in the face of the violence. tom: within your perspective, does the establishment republican party have a constituency or has that constituency left the barn? amy: they definitely have a constituency. these constituency -- the constituency of the trump supporters seems to be louder. that is putting tremendous pressure on the members of congress who would traditionally expect to support a more traditional conservative republican agenda. francine: what is the state of the republican party right now? i know we talk about divisions

and possible splitting. given the votes yesterday, a lot of commentators say 10 representatives from the republican party voting against the president was brave. but this is 10 out of 211 of them. amy: i think the republican party has a lot of work to do. they need to figure out where their center is and whether or not it can be big enough to accommodate the traditional business and traditional conservative republican along with the more populist wing of the party. right now, those factions are in tension. we know mitch mcconnell has been leaking to the press that he is done with the president. but that does not mean that the republican party is done with the president. they need to figure out how they are going to take the moment and move forward. there is no clear answer. francine: what do you think will happen? amy: i think ultimately the conviction in the senate will

not happen. i think republicans will become too afraid of the price that they will pay in the future. they know there is support for the president and they are not going to want to sacrifice their own political and professional goals. tom: a philosophical question, you are good at this. that is, the greatest trust of conservatives is if we spend a lot of money at the government, it will be ill spent or inefficiently spent. how do you spend $2 trillion and do it the good way? amy: that is a bigger question than i have time to answer. this is a moment in time where people across the world, including in the united states are really struggling. what we are seeing is a significant difference in approach to the problem. if you look in london where i am

or across europe and in the united states and in the united states in particular, there is a sense that there is not a safety net and that the chasm is growing larger. both parties need to come to terms with that and find a way forward through this unprecedented moment in time. tom: amy pope, thank you so much. very interesting this morning. terrific experience working for president obama. i thought of him in the early morning and i am so happy that david westin will speak to him. it matters what the friend of donald trump says, wilbur ross, secretary of commerce, balance of power with david westin in the 12:00 news hour. that will be an interesting conversation. this is bloomberg.

>> how different will the beauty market be? >> i have been through many crisis and they have all been very different. ♪ ritika: this is "bloomberg surveillance." the owner of the animal supply chain petco saw $864 million in an ipo. they are turning to the public market 15 years after it was

taken private. they will continue to be controlled by the current owners which include cbc capital partners. chesapeake energy has approval for a reorganization plan that flashes about $7 billion in debt. ownership is being handed over to senior lenders. that caps a years long effort to repair the company's finances. chesapeake became bloated after repeated borrowing to fuel expansion. and that is your bloomberg business flash. francine: thank you so much. boris johnson is warning that intensive care units could be overwhelmed as the country hit its highest daily coronavirus death since the pandemic began. this comes as j&j's experimental vaccine generated a long-lasting immune response. we are joined by dr. lucy mcbride, foxhall internal physician. you are also based in

washington, d.c. when you look at this one-shot vaccine, how quickly could it be approved if everything goes to plan and how much of a game changer with this actually be? dr. mcbride: it is a great question. a one-shot vaccine would be a game changer. we are struggling with vaccine rollout and with administrative everywhere you look. if you could have just one-shot instead of two, we went a long way to achieve herd immunity. if the vaccine looks as good as it does so far and gets approved as soon as next month, that would accelerate the ability to get most people the immunity they need to be able to open up their lives, the economy, and to curb this extraordinary surge in

the number of cases in this country. francine: what is the biggest problem in terms of vaccination? is it people that don't want the vaccine? is it not enough vaccine doses? is it just the freezing method you need to be able to keep it? dr. mcbride: there are three main problems right now. number one is, we are asking the busiest people in the country right now, hospital workers, to administer these doses. we need to work on getting vaccination sites outside of hospitals and get a core of people who are not already busy taking care of sick patients to get a shot into arms. secondly, supply is not big enough. we are trying to decide whether to give more people one-shot instead of fewer people the two shot series which is what has been studied in the trial.

and three, there is hesitancy that is very real. one of the things i talk about with patients every day is, i'm trying to dispel myths and separate facts from fears. there are some very real fears and naturally people have concerns. it is important to note that most people who have concerns are not anti-factors. they have concerns about a new vaccine. it is important to field those questions and help people understand. tom: it is a joy to speak to you because you are in the real world. as you come down the potomac just before georgetown is where simply hospital is, you fly right over where dr. mcbride practices. i am surprised we are not distributing the vaccine through doctors offices because i remember that in my youth with the cold liquid nitrogen thing in the corner.

are we constrained by the refrigeration? are we constrained by the vaccines where we cannot get it in the private offices of people like you? dr. mcbride: that is exactly right. the vaccine requires extreme refrigeration and freezing. not every doctor's office has the ability to have that kind of machinery. moreover, one of the problems with the moderna vaccine is every vial has 10 doses. it is not a single dose. when you crack open a file of the vaccine, you only have two people on your schedule to give the vaccine to and your pharmacy is about to close, you have to waste doses. what we also need is a waiting list of people at the ready to be able to access those vaccine doses. we have a lot of work to do to get these things out there into

arms. tom: are you waiting for what peter is waiting for and trying to develop at baylor college of medicine which is a traditional low-cost vaccine that does not involve refrigeration? dr. mcbride: that would be ideal. we will take whatever we can get at this point. with 380,000 americans dead from covid-19, we need as many vaccines as possible. it takes a lot of shots to get it right and we have been fortunate to have two very effective vaccines. if we could get one that is single dose, we would be better off. tom: do you see how dr. rick bright does that? -- dr. mcbride does that? that is washington talk right now. dr. mcbride, thank you so much, in the real world of getting the vaccine out to us.

on the markets, futures up three. francine and i'm watching yields higher on the migration to $2 trillion in stimulus. we could frame out where the markets are. it has been quiet this week. francine: it has been quiet because the focus is on politics. you can see the world of politics, we are thinking about italy, but even france with the french government saying they are not interested in the approach that the canadian company did and that is moving stocks. tom: extraordinary news. please stay with us to frame out the greek letters of the market. this is bloomberg. good morning.

♪

tom: this morning, jordan of ohio says it has always been about getting the president. hoyer of maryland speaks of lies, fear mongering and sedition. there is order in the house, a quiet in the capitol. the president is impeached a second time. biden considers the urgent business of this nation. could the stimuli be in excess of $2 trillion? and we affirm that the firm is changing the technology of finance. the gentleman of paypal does it again. i'm tom keene in new york. francine lacqua in london. this is a huge deal. it is not another ipo. it is about the guy from paypal. what he has done is just were markable to level the financial services business.

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