1 00:00:00,800 --> 00:00:04,320 Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us 2 00:00:04,360 --> 00:00:07,560 Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the 3 00:00:07,600 --> 00:00:10,720 Speaker 1: iHeartRadio app, and the Bloomberg Business App. We're listening on 4 00:00:10,760 --> 00:00:15,200 Speaker 1: demand wherever you get your podcast. And thanks for starting 5 00:00:15,200 --> 00:00:17,560 Speaker 1: your week with us here on Bloomberg sound On. I'm 6 00:00:17,640 --> 00:00:20,760 Speaker 1: Joe Matthew in Washington as we assemble our panel on 7 00:00:20,800 --> 00:00:24,599 Speaker 1: a busy Monday here, coming off another busy weekend with news, 8 00:00:24,600 --> 00:00:27,080 Speaker 1: and we had a couple of lead stories that we're balancing. 9 00:00:27,160 --> 00:00:30,360 Speaker 1: Want to start with the whole banking situation here, because 10 00:00:30,440 --> 00:00:32,520 Speaker 1: people do seem to be feeling a little bit better 11 00:00:32,560 --> 00:00:34,760 Speaker 1: about things, and it has a lot to do with 12 00:00:34,840 --> 00:00:38,800 Speaker 1: the sale of Silicon Valley Bank, or what's left of it, following, 13 00:00:38,800 --> 00:00:40,800 Speaker 1: of course, the run that wiped out the company. First 14 00:00:40,800 --> 00:00:44,640 Speaker 1: Citizens Bank shares the buyer the deal to settle svb's fate, 15 00:00:44,840 --> 00:00:46,920 Speaker 1: tamping down as I read on the terminal some of 16 00:00:46,920 --> 00:00:49,040 Speaker 1: the turmoil that has engulfed the financial world. But of 17 00:00:49,040 --> 00:00:52,440 Speaker 1: course we also know that the administration, and by that 18 00:00:52,800 --> 00:00:55,360 Speaker 1: I mean you know all of government here, really regulators 19 00:00:55,520 --> 00:00:59,240 Speaker 1: and the White House and the Fed stand ready to 20 00:00:59,280 --> 00:01:03,160 Speaker 1: do moreties are considering now expanding this emergency lending facility 21 00:01:03,160 --> 00:01:05,760 Speaker 1: for banks in ways that would give, for instance, First 22 00:01:05,760 --> 00:01:08,840 Speaker 1: Republic more time to shore up its balance sheet. And 23 00:01:08,959 --> 00:01:11,399 Speaker 1: that is also why there seems to be a little 24 00:01:11,440 --> 00:01:15,520 Speaker 1: more confidence in the air. Let's take a quick spin 25 00:01:15,600 --> 00:01:17,959 Speaker 1: with Rick and Genie on everything before we talk to 26 00:01:18,000 --> 00:01:21,319 Speaker 1: Mick mulvaney, who's with us today as well Rick Davis. 27 00:01:21,360 --> 00:01:22,880 Speaker 1: Even on Friday, we didn't know what kind of a 28 00:01:22,920 --> 00:01:25,399 Speaker 1: weekend it would be. We didn't have another bank collapse. 29 00:01:25,440 --> 00:01:27,479 Speaker 1: It's quite the opposite. We've got the sale of SVB 30 00:01:27,640 --> 00:01:29,720 Speaker 1: that's kind of off the plate now and a government 31 00:01:29,760 --> 00:01:32,000 Speaker 1: that stands at the ready. Are we in better shape 32 00:01:32,000 --> 00:01:34,080 Speaker 1: than we were three days ago? Yeah, it makes sense 33 00:01:34,120 --> 00:01:36,360 Speaker 1: that there's been some stability. I mean, you had to 34 00:01:36,360 --> 00:01:38,640 Speaker 1: hold your breath over the weekend. It's last two weekends 35 00:01:38,640 --> 00:01:41,319 Speaker 1: have not been good, very rocky for the banking community, 36 00:01:41,360 --> 00:01:44,319 Speaker 1: and this one. The fact that there weren't any glaring 37 00:01:44,360 --> 00:01:47,440 Speaker 1: headlines of something that could make the process work even 38 00:01:47,520 --> 00:01:52,600 Speaker 1: worse is a positive. And I think right now you 39 00:01:52,640 --> 00:01:55,200 Speaker 1: actually see a lot of the shift of the dialogue 40 00:01:55,200 --> 00:01:57,640 Speaker 1: in Washington going toward what's going to go on Capitol Hill. 41 00:01:58,200 --> 00:01:59,720 Speaker 1: Is there going to be a new regulation. Is there 42 00:01:59,720 --> 00:02:05,720 Speaker 1: going to increase in the deposit payments? So sure, I 43 00:02:05,760 --> 00:02:08,480 Speaker 1: think that these are the things that I think are 44 00:02:08,600 --> 00:02:10,760 Speaker 1: going to be a positive for this administration if they 45 00:02:10,760 --> 00:02:14,440 Speaker 1: can start to shift into a more stable environment. Genie, 46 00:02:14,440 --> 00:02:15,760 Speaker 1: I know you don't speak for the White House, but 47 00:02:15,800 --> 00:02:17,800 Speaker 1: why not have Joe Biden out there before the open 48 00:02:17,840 --> 00:02:21,560 Speaker 1: today saying, guess what, you still have nothing to worry about. 49 00:02:21,600 --> 00:02:23,480 Speaker 1: I told you that two weeks ago, and we made 50 00:02:23,520 --> 00:02:26,840 Speaker 1: sure that your money was safe. You know, I do 51 00:02:26,919 --> 00:02:29,240 Speaker 1: think it makes sense. It is good news. It is 52 00:02:29,320 --> 00:02:31,960 Speaker 1: making people feel better and feel like they can have 53 00:02:32,080 --> 00:02:34,840 Speaker 1: more faith in the system. Things aren't as jittery potentially 54 00:02:34,840 --> 00:02:37,400 Speaker 1: as they felt like a late last week. So I 55 00:02:37,440 --> 00:02:39,280 Speaker 1: do think the White House needs to do more of that. 56 00:02:39,320 --> 00:02:41,720 Speaker 1: But you know, I also take a weight and see 57 00:02:41,760 --> 00:02:45,160 Speaker 1: attitude on this. We have the Senate Banking Committee hearing tomorrow, 58 00:02:45,480 --> 00:02:48,400 Speaker 1: and for all the issues involving banking, there are a 59 00:02:48,440 --> 00:02:50,760 Speaker 1: lot of politics there. You know, just start with Kristen 60 00:02:50,880 --> 00:02:54,480 Speaker 1: Cinema and this newly independent who's been attacking Democrats. You 61 00:02:54,520 --> 00:02:57,040 Speaker 1: have Shared Brown, Tim Scott. I mean, the list goes 62 00:02:57,040 --> 00:02:59,000 Speaker 1: on and on, and you're going to have regulators out there. 63 00:02:59,040 --> 00:03:00,520 Speaker 1: I think they're going to be on the seat. So 64 00:03:00,560 --> 00:03:02,520 Speaker 1: that is going to be one to watch just for 65 00:03:02,600 --> 00:03:06,480 Speaker 1: the politics, let alone the regulation discussions that potentially emerge 66 00:03:06,520 --> 00:03:09,160 Speaker 1: from it. Rick Davis and Jeanie Schanzano are back with 67 00:03:09,240 --> 00:03:11,239 Speaker 1: us in a moment as we add McK mulvaney's voice 68 00:03:11,280 --> 00:03:14,840 Speaker 1: to the conversation. Of course, former OMB director, former US 69 00:03:14,919 --> 00:03:19,520 Speaker 1: Special Envoy for Northern Ireland, and former acting White House 70 00:03:19,560 --> 00:03:22,280 Speaker 1: Chief of Staff. He's with us now as he joins 71 00:03:22,360 --> 00:03:25,000 Speaker 1: us each week around this time. Nick, thanks for coming along. 72 00:03:25,440 --> 00:03:27,639 Speaker 1: I don't know if you heard Rick and Jeanie's take 73 00:03:27,680 --> 00:03:29,359 Speaker 1: on this, but there does seem to be a feel 74 00:03:29,480 --> 00:03:33,359 Speaker 1: that confidence is restored today. Do you agree? I do 75 00:03:33,400 --> 00:03:35,880 Speaker 1: a little bit. And you know, Jeannie was probably afraid 76 00:03:36,080 --> 00:03:37,760 Speaker 1: to say what a lot of folks would say to 77 00:03:37,800 --> 00:03:39,760 Speaker 1: the answer that question. But wise bide now that he's 78 00:03:39,800 --> 00:03:42,400 Speaker 1: not the person right now who's sort of he doesn't 79 00:03:42,440 --> 00:03:44,880 Speaker 1: embody a lot of confidence. I think Janet Yellen has 80 00:03:44,880 --> 00:03:47,160 Speaker 1: been the right person to come up and deliver this message. 81 00:03:47,240 --> 00:03:49,280 Speaker 1: So I think that's why you're not seeing the President 82 00:03:49,360 --> 00:03:51,440 Speaker 1: much and you're seeing Yellen a good But I do 83 00:03:51,520 --> 00:03:54,120 Speaker 1: think things have calmed down I think the purchase of 84 00:03:54,320 --> 00:03:58,160 Speaker 1: spby by First Citizens, which is a fairly local bank 85 00:03:58,160 --> 00:04:01,119 Speaker 1: to meet here in the Carolinas, have also calmed people down, 86 00:04:01,160 --> 00:04:03,040 Speaker 1: knowing that there's still value there and they're still ask 87 00:04:03,120 --> 00:04:05,120 Speaker 1: It's clearly the stock is up forty percent today, so 88 00:04:05,160 --> 00:04:07,480 Speaker 1: if some folks are no, that's got a lot to 89 00:04:07,480 --> 00:04:09,160 Speaker 1: calm down a little bit at least for the for 90 00:04:09,200 --> 00:04:12,240 Speaker 1: the near term. And news that the US stands by 91 00:04:12,320 --> 00:04:16,200 Speaker 1: to do more. They're they're looking at First Republic still meck, 92 00:04:16,400 --> 00:04:18,440 Speaker 1: but the next couple of days could actually bring it 93 00:04:18,440 --> 00:04:21,680 Speaker 1: seems to me at least a feeling when it comes 94 00:04:21,680 --> 00:04:23,880 Speaker 1: to the political side of this, that we're getting beyond it. 95 00:04:23,960 --> 00:04:26,159 Speaker 1: Yet we're also going to be having the banking hearings 96 00:04:26,200 --> 00:04:29,159 Speaker 1: this week in Washington. It's probably pretty well timed that 97 00:04:29,200 --> 00:04:31,680 Speaker 1: this SVB matter was wrapped up before those began, just 98 00:04:31,720 --> 00:04:34,720 Speaker 1: for the sake of everyone's nerves, don't you think, for 99 00:04:34,720 --> 00:04:37,320 Speaker 1: the sake of everybody's nerves and the and the amount 100 00:04:37,360 --> 00:04:39,880 Speaker 1: of political grandstanding that will go on. Yeah, there'll be 101 00:04:39,920 --> 00:04:43,120 Speaker 1: a good bit of that anyway. But listen, I think 102 00:04:43,120 --> 00:04:45,880 Speaker 1: the better question is is looking forward. I think Genie 103 00:04:45,920 --> 00:04:50,400 Speaker 1: mentioned it is what happens next legislatively. Will Congress used 104 00:04:50,440 --> 00:04:53,840 Speaker 1: this whole episode as a way to change the regulation, Well, 105 00:04:53,839 --> 00:04:55,960 Speaker 1: I have to raise the insurance rates. I mean, if 106 00:04:55,960 --> 00:04:58,360 Speaker 1: they're going to take the insurance rates above two hundred 107 00:04:58,360 --> 00:05:01,320 Speaker 1: and fifty thousand dollars or at least coverages above two fifty, 108 00:05:01,360 --> 00:05:03,960 Speaker 1: they'll probably have to raise rates there. But there'll be 109 00:05:04,000 --> 00:05:05,560 Speaker 1: a lot of activity I would think in the next 110 00:05:05,600 --> 00:05:07,920 Speaker 1: couple of weeks. The big question, obviously, Joe, is what 111 00:05:08,000 --> 00:05:11,080 Speaker 1: don't we know? We didn't see SVB coming. We didn't 112 00:05:11,080 --> 00:05:13,040 Speaker 1: see first for a public coming. There's many people who 113 00:05:13,040 --> 00:05:15,880 Speaker 1: say that we should have, but we didn't. The question is, 114 00:05:15,920 --> 00:05:18,159 Speaker 1: can we get a couple of weeks under our belt 115 00:05:18,279 --> 00:05:23,000 Speaker 1: of no panic, no turmoil before before another shoe drops? 116 00:05:23,320 --> 00:05:25,840 Speaker 1: What do you expect that these hearings beyond the grandstanding 117 00:05:25,839 --> 00:05:27,640 Speaker 1: that your reference that. I'm sure there's going to be 118 00:05:27,680 --> 00:05:30,120 Speaker 1: a free for all for a lot of lawmakers, but 119 00:05:30,160 --> 00:05:32,279 Speaker 1: we'll get a swing, you know, in the House and 120 00:05:32,320 --> 00:05:35,000 Speaker 1: in the Senate. Or are we going to learn a lot? 121 00:05:35,120 --> 00:05:37,919 Speaker 1: Or is it too early to have I know it 122 00:05:37,960 --> 00:05:41,200 Speaker 1: sounds weird, but too early to have the autopsy? Yeah, no, 123 00:05:41,880 --> 00:05:44,279 Speaker 1: it is, and it isn't Yes, a good question. What 124 00:05:44,480 --> 00:05:46,800 Speaker 1: might we learn beyond the grand standing people just trying 125 00:05:46,800 --> 00:05:49,640 Speaker 1: to get stuff on social media? Why did the regulators 126 00:05:49,680 --> 00:05:52,160 Speaker 1: miss it? I think there may be some sort of 127 00:05:52,200 --> 00:05:54,280 Speaker 1: overlap in terms of the venda I granted, between the 128 00:05:54,279 --> 00:05:56,400 Speaker 1: Republicans and Democrats or what they want to talk about. 129 00:05:56,920 --> 00:05:59,080 Speaker 1: I think they both might want to talk about why 130 00:05:59,200 --> 00:06:02,599 Speaker 1: the regulators might have missed or seemed to have missed 131 00:06:02,640 --> 00:06:05,480 Speaker 1: some glaring sort of risks on the books at SVB. 132 00:06:06,160 --> 00:06:08,520 Speaker 1: Again that you get Republicans beating up on the Bide 133 00:06:08,520 --> 00:06:11,039 Speaker 1: administration that that that doesn't help. You get Democrats saying 134 00:06:11,040 --> 00:06:13,599 Speaker 1: it's Trump's fault. That doesn't help. So what where's that 135 00:06:13,680 --> 00:06:16,120 Speaker 1: middle of that Van diagram? And I think it might 136 00:06:16,160 --> 00:06:19,719 Speaker 1: be okay, who missed the duration risk? Why didn't we 137 00:06:19,760 --> 00:06:22,800 Speaker 1: see this? If if the FDIC was talking about this 138 00:06:22,839 --> 00:06:25,680 Speaker 1: just a couple of weeks beforehand, and Gruenberg was making 139 00:06:25,720 --> 00:06:27,839 Speaker 1: comments about it, why why did anybody do anything about 140 00:06:27,880 --> 00:06:31,800 Speaker 1: it that might be helpful as we move forward? Yeah, 141 00:06:31,880 --> 00:06:35,520 Speaker 1: I boy, I don't know. You've got voices from the 142 00:06:35,600 --> 00:06:39,159 Speaker 1: FDIC and the FED up here in fact, that you 143 00:06:39,200 --> 00:06:43,039 Speaker 1: know from FED supervision no less. Who would you rather 144 00:06:44,160 --> 00:06:46,480 Speaker 1: have some time with when it comes to this issue 145 00:06:46,480 --> 00:06:50,159 Speaker 1: of svb N signature for that matter. Um, you know, 146 00:06:50,279 --> 00:06:52,920 Speaker 1: I guess as a former regulator, you know, I sort 147 00:06:52,920 --> 00:06:55,320 Speaker 1: of took the FDIC a little Excuse me. I took 148 00:06:55,320 --> 00:06:57,599 Speaker 1: the FED a lot more seriously than the FDICE. I 149 00:06:57,640 --> 00:07:00,080 Speaker 1: took them both seriously, don't get me wrong. Yeah, But 150 00:07:00,160 --> 00:07:02,440 Speaker 1: when it came to sort of who, I would too who, 151 00:07:02,480 --> 00:07:03,800 Speaker 1: I pick up the phone first, and I wanted the 152 00:07:03,800 --> 00:07:05,440 Speaker 1: answer the question I called the said before I called 153 00:07:05,440 --> 00:07:08,760 Speaker 1: the FTIC. Spending time with Nick mulvaney here on Bloomberg 154 00:07:08,839 --> 00:07:11,200 Speaker 1: Sound On. I'm Joe Matthew in Washington, and of course 155 00:07:11,200 --> 00:07:13,480 Speaker 1: we're coming off the big good night in Waco here 156 00:07:13,480 --> 00:07:16,320 Speaker 1: that I of course have to ask you about. This 157 00:07:16,360 --> 00:07:19,320 Speaker 1: is Donald Trump Waco, Texas, the first big bash rally 158 00:07:19,400 --> 00:07:21,560 Speaker 1: of the twenty four campaign. Although I feel like I 159 00:07:21,640 --> 00:07:23,960 Speaker 1: heard that already either way, he went to Waco in 160 00:07:23,960 --> 00:07:26,680 Speaker 1: twenty twenty four. Is the final battle. That's gonna be 161 00:07:26,720 --> 00:07:29,960 Speaker 1: the big one. Have you put me back in the 162 00:07:29,960 --> 00:07:34,000 Speaker 1: White House? Their rain will be over and America will 163 00:07:34,080 --> 00:07:39,080 Speaker 1: be a free nation once again. He's getting a lot 164 00:07:39,080 --> 00:07:41,920 Speaker 1: of talk here, Mick, not for the political messaging or 165 00:07:42,080 --> 00:07:44,840 Speaker 1: policy that came up, but an airing of grievances that 166 00:07:44,920 --> 00:07:49,239 Speaker 1: even include playing a video from January six, violent video 167 00:07:49,280 --> 00:07:51,880 Speaker 1: of you know, people rioting and bashing up the place 168 00:07:51,920 --> 00:07:55,440 Speaker 1: as he played the anthem from the so called January 169 00:07:55,520 --> 00:07:58,520 Speaker 1: six choir. This felt like new level to some people? 170 00:07:58,560 --> 00:08:01,640 Speaker 1: Do you agree it did? It felt like that to me. 171 00:08:01,720 --> 00:08:03,600 Speaker 1: In fact, guy's trying to figure out what's going on 172 00:08:03,760 --> 00:08:06,440 Speaker 1: why gould a Waco, Texas? And I know that Lieutenant 173 00:08:06,520 --> 00:08:09,280 Speaker 1: Governor said, there's all sorts of good reasons. Infrastructure, little 174 00:08:09,280 --> 00:08:11,280 Speaker 1: proximity to all that kind of stuff, but it's going 175 00:08:11,320 --> 00:08:14,880 Speaker 1: to be inevitable to draw connections with what happened in Waco, 176 00:08:15,040 --> 00:08:17,400 Speaker 1: you know, two decades ago, especially at the anniversary coming up. 177 00:08:17,440 --> 00:08:19,480 Speaker 1: So with that in mind, and with that video playing 178 00:08:19,520 --> 00:08:22,080 Speaker 1: and him putting his hand over the heart during the 179 00:08:22,320 --> 00:08:24,680 Speaker 1: during the video, and the and the great sort of 180 00:08:24,720 --> 00:08:28,800 Speaker 1: airing of grievances, um, maybe wonder if he's not sort 181 00:08:28,840 --> 00:08:31,760 Speaker 1: of if he's just not raising money because he's not 182 00:08:31,800 --> 00:08:34,400 Speaker 1: adding any votes, right, He's not adding any any any 183 00:08:34,480 --> 00:08:36,880 Speaker 1: any votes. He's not adding anybody who didn't vote for 184 00:08:36,960 --> 00:08:39,440 Speaker 1: him in twenty twenty to get them to vote him 185 00:08:39,440 --> 00:08:41,920 Speaker 1: in twenty twenty four, you know, no one. It's like 186 00:08:41,960 --> 00:08:44,360 Speaker 1: his tweets last week about death and destruction that doesn't 187 00:08:44,400 --> 00:08:48,120 Speaker 1: add a single you know, white suburban housewife in Minneapolis 188 00:08:48,120 --> 00:08:50,800 Speaker 1: to the base. So it's almost like he's out there 189 00:08:50,800 --> 00:08:53,240 Speaker 1: just trying to get the thirty percent of the country 190 00:08:53,240 --> 00:08:56,079 Speaker 1: that loves him to get more engaged and send him 191 00:08:56,080 --> 00:08:59,160 Speaker 1: more money, which is a bizarre thing to sort of 192 00:08:59,160 --> 00:09:01,120 Speaker 1: look at, but I sort of got the impression that's 193 00:09:01,120 --> 00:09:03,840 Speaker 1: what this is. He's andreck to the base more and 194 00:09:03,960 --> 00:09:06,440 Speaker 1: more instead of trying to grow it, which is usually 195 00:09:06,440 --> 00:09:08,719 Speaker 1: assigned for failure in that business. Is there going to 196 00:09:08,760 --> 00:09:11,600 Speaker 1: be a real effort here on his part or in 197 00:09:11,640 --> 00:09:14,120 Speaker 1: the part of the so called MAGA wing, And I 198 00:09:14,120 --> 00:09:16,880 Speaker 1: guess it's already underway, but it's not only justified January 199 00:09:16,880 --> 00:09:19,360 Speaker 1: six foot make heroes out of these people who are 200 00:09:19,480 --> 00:09:22,960 Speaker 1: who have been convicted, who aren't now in prison. Yeah, 201 00:09:23,000 --> 00:09:25,120 Speaker 1: that's new to me. I have heard the last week. 202 00:09:25,160 --> 00:09:27,839 Speaker 1: I was on TV last week with a representative of 203 00:09:28,120 --> 00:09:30,760 Speaker 1: the Trump's he Liz Harrington, who for the first time 204 00:09:30,760 --> 00:09:32,480 Speaker 1: I've heard and a long time, starting to try to 205 00:09:32,520 --> 00:09:35,120 Speaker 1: make the case that there were FBI informants in the 206 00:09:35,240 --> 00:09:38,280 Speaker 1: rioters to try and stir things up to sort of 207 00:09:38,440 --> 00:09:42,199 Speaker 1: entrap the people and make Donald Trump look bad. If 208 00:09:42,200 --> 00:09:44,960 Speaker 1: she's talking about that on television, that's what they're hearing 209 00:09:44,960 --> 00:09:47,240 Speaker 1: at Marlago. That is a chatter at mar Lago, and 210 00:09:47,240 --> 00:09:49,400 Speaker 1: that's what they're told to go and talk about when 211 00:09:49,400 --> 00:09:51,840 Speaker 1: they get on these these news hits, which means that 212 00:09:51,920 --> 00:09:54,839 Speaker 1: this is being cultivated in the Trump camp right now. 213 00:09:54,920 --> 00:09:58,040 Speaker 1: And I think it's a huge electoral mistake. I certainly 214 00:09:58,080 --> 00:09:59,679 Speaker 1: don't think it helps the country very much. But yeah, 215 00:09:59,679 --> 00:10:01,440 Speaker 1: I and see the same thing as they're trying to 216 00:10:01,520 --> 00:10:05,120 Speaker 1: sort of recast what happened on January sixth. You've got 217 00:10:05,120 --> 00:10:09,600 Speaker 1: Marjorie Teller Green visiting them in prison. It's really getting 218 00:10:09,600 --> 00:10:13,000 Speaker 1: to be an interesting turn in the conversation. Instead of 219 00:10:13,000 --> 00:10:15,960 Speaker 1: trying to, you know, forget move center, but move away 220 00:10:16,000 --> 00:10:19,679 Speaker 1: from some of the uglier stuff at January six as 221 00:10:19,679 --> 00:10:23,640 Speaker 1: you're prepared for a reelection bid, instead he's embracing it 222 00:10:23,880 --> 00:10:26,080 Speaker 1: and even said at the at the event that he 223 00:10:26,200 --> 00:10:30,160 Speaker 1: chose Waco specifically because it wasn't a fifty fifty. He 224 00:10:30,200 --> 00:10:33,680 Speaker 1: said it was one hundred percent Trump. So I guess 225 00:10:33,720 --> 00:10:36,880 Speaker 1: it's you go all in when somebody like Rhonda Santis 226 00:10:36,960 --> 00:10:39,400 Speaker 1: is around. Is that the strategy? Well, I think I 227 00:10:39,400 --> 00:10:41,880 Speaker 1: think the calculation is they can't lose a Republican primary 228 00:10:41,880 --> 00:10:43,960 Speaker 1: at least that's that's that's what they're thinking right now. 229 00:10:43,960 --> 00:10:47,880 Speaker 1: They're in that ninety nine likelihood on a Republican primary 230 00:10:47,960 --> 00:10:50,280 Speaker 1: just because of the way things shake out in a 231 00:10:50,320 --> 00:10:52,840 Speaker 1: winner take all system, which is what most of our 232 00:10:52,840 --> 00:10:54,920 Speaker 1: primaries are. Then the plurality is going to win it 233 00:10:55,000 --> 00:10:57,000 Speaker 1: is you get thirty five percent to five percent race. 234 00:10:57,400 --> 00:11:00,839 Speaker 1: That's a plurality almost every single time. So I think 235 00:11:00,840 --> 00:11:04,120 Speaker 1: they're just that comes back to my concept of they 236 00:11:04,280 --> 00:11:06,559 Speaker 1: sort of think they're going to win the Republican primary. 237 00:11:06,720 --> 00:11:08,040 Speaker 1: They know if they need a lot of money going 238 00:11:08,080 --> 00:11:09,520 Speaker 1: into the general, so they're trying to raise as much 239 00:11:09,559 --> 00:11:11,079 Speaker 1: money as they can from these folks. They go to 240 00:11:11,120 --> 00:11:13,680 Speaker 1: these rallies, and then there's a pivot at some point. 241 00:11:15,280 --> 00:11:19,040 Speaker 1: Um no, okay, just check it. I don't think he'd pivot, 242 00:11:19,040 --> 00:11:20,920 Speaker 1: because again, if he does, I think he's a he's 243 00:11:20,920 --> 00:11:23,920 Speaker 1: a political force. But at some point people don't believe 244 00:11:23,960 --> 00:11:26,880 Speaker 1: a pivot. Right If you've been x x x x 245 00:11:27,080 --> 00:11:28,960 Speaker 1: X for twenty years and then you pivot to why 246 00:11:29,120 --> 00:11:31,320 Speaker 1: you know, three months before an election, people don't buy it, 247 00:11:31,920 --> 00:11:33,800 Speaker 1: and he's getting to the point where he might not 248 00:11:33,880 --> 00:11:36,439 Speaker 1: be capable of pivoting even if he wanted to. Isn't 249 00:11:36,440 --> 00:11:39,800 Speaker 1: that something well, Mick, thank you for talking to us. 250 00:11:39,800 --> 00:11:41,600 Speaker 1: Has always come to it in First and Next Time. 251 00:11:41,600 --> 00:11:43,840 Speaker 1: Mick mulvaney back with us here on Bloomberg's sound Out 252 00:11:43,880 --> 00:11:46,320 Speaker 1: as we reassemble the panel for they're taking what we 253 00:11:46,400 --> 00:11:49,800 Speaker 1: just heard. Rick Davis and Genie Schanzano are with us here. Rick, 254 00:11:49,920 --> 00:11:52,840 Speaker 1: is that message market marketable? I should say, beyond what 255 00:11:52,920 --> 00:11:55,640 Speaker 1: twenty or thirty percent maybe of the electorate when you're 256 00:11:55,840 --> 00:11:59,880 Speaker 1: when you're adding the January sixth stuff and some of 257 00:11:59,880 --> 00:12:02,640 Speaker 1: the other extreme rhetoric we heard in Waco. No, I 258 00:12:02,679 --> 00:12:05,360 Speaker 1: think makes spot on. I think this is not even 259 00:12:05,400 --> 00:12:08,800 Speaker 1: designed to appeal to other people. It's designed to mobilize 260 00:12:09,320 --> 00:12:11,959 Speaker 1: his bass m There's something to be said for that, right, 261 00:12:12,040 --> 00:12:15,520 Speaker 1: Start with your basse, get it mobilized, raise money, and 262 00:12:15,559 --> 00:12:20,160 Speaker 1: then find ways to extend your your value politically to 263 00:12:20,240 --> 00:12:22,880 Speaker 1: other people. But I think makes also right in that 264 00:12:23,000 --> 00:12:25,720 Speaker 1: he is so hardcore here, right, I mean the idea 265 00:12:25,800 --> 00:12:29,240 Speaker 1: that you know you're going to deploy the criminal choir 266 00:12:29,400 --> 00:12:32,120 Speaker 1: to sing at the beginning of your your rallies and 267 00:12:32,120 --> 00:12:33,920 Speaker 1: this may not be the only time we see them. 268 00:12:34,800 --> 00:12:38,280 Speaker 1: Is a real hard slog to then try and pivot 269 00:12:38,320 --> 00:12:42,320 Speaker 1: to other voters who see this as an an anathema. 270 00:12:42,840 --> 00:12:44,840 Speaker 1: Joe Biden, all the while is trying to play team 271 00:12:44,920 --> 00:12:49,480 Speaker 1: normal genie, and his approval numbers are are back near 272 00:12:49,520 --> 00:12:54,280 Speaker 1: their lows. How do you have both? Well? Yeah, I 273 00:12:54,280 --> 00:12:56,760 Speaker 1: mean this is the reality what the Biden team is 274 00:12:56,760 --> 00:12:59,679 Speaker 1: aware of. He won in twenty twenty, and they did 275 00:12:59,720 --> 00:13:03,280 Speaker 1: well in twenty twenty two from being quote the adult 276 00:13:03,360 --> 00:13:05,600 Speaker 1: in the room or team normal, as you say, and 277 00:13:05,640 --> 00:13:08,920 Speaker 1: they're hoping that they can do that again this time around. 278 00:13:09,240 --> 00:13:12,440 Speaker 1: That's going to depend on running against somebody who's defined 279 00:13:12,480 --> 00:13:15,520 Speaker 1: as crazy, and that's why they're hoping it's Trump. But 280 00:13:15,559 --> 00:13:18,480 Speaker 1: I have to say, you know, Trump, you know, we 281 00:13:18,679 --> 00:13:21,800 Speaker 1: count him out. It's he's not adding votes, certainly, but 282 00:13:21,920 --> 00:13:24,520 Speaker 1: let's not forget voter turnout in twenty twenty was at 283 00:13:24,520 --> 00:13:28,640 Speaker 1: a record high sixty seven percent and eighty million people 284 00:13:28,679 --> 00:13:30,760 Speaker 1: did not get out. So it is not, you know, 285 00:13:31,160 --> 00:13:34,200 Speaker 1: beyond the pale that he could he could take this 286 00:13:34,240 --> 00:13:36,600 Speaker 1: thing if he's able to win the primary. And so 287 00:13:36,640 --> 00:13:38,839 Speaker 1: it is a very scary proposition after you listen to 288 00:13:38,920 --> 00:13:41,920 Speaker 1: what he didn't wakeco this weekend? Yeah, what's Rhonda Santis's 289 00:13:41,920 --> 00:13:44,280 Speaker 1: moviere Just does he be quiet here, Rick? Or can 290 00:13:44,360 --> 00:13:48,080 Speaker 1: he actually take a stand on principle against some of 291 00:13:48,080 --> 00:13:50,360 Speaker 1: the stuff that was seen and heard? Yeah, he could 292 00:13:50,400 --> 00:13:52,400 Speaker 1: certainly take a stand on principle. And you know he 293 00:13:52,440 --> 00:13:54,600 Speaker 1: was thrown under the bus during this rally too. I mean, 294 00:13:54,760 --> 00:13:57,800 Speaker 1: Donald Trump is not sparing any time going right after him, 295 00:13:58,600 --> 00:14:00,480 Speaker 1: and he's got to make a calculation and so whether 296 00:14:00,600 --> 00:14:03,760 Speaker 1: how much that he can withstand before he has to 297 00:14:03,760 --> 00:14:07,920 Speaker 1: actually do something about it. His attempt last week at 298 00:14:07,920 --> 00:14:13,160 Speaker 1: pushing back on Trump a little bit regarding the the 299 00:14:13,200 --> 00:14:15,760 Speaker 1: court case in New York stuff, Yeah, yeah, it was funny, 300 00:14:15,800 --> 00:14:18,520 Speaker 1: but it wasn't really effective. So at some point I 301 00:14:18,520 --> 00:14:21,520 Speaker 1: think he's going to notice that he's slipping and not 302 00:14:21,520 --> 00:14:25,400 Speaker 1: not really engaged. But he's he's he's got to try 303 00:14:25,400 --> 00:14:27,560 Speaker 1: to stay out of the fire if he can, because 304 00:14:27,760 --> 00:14:30,920 Speaker 1: the one thing we've learned in twenty sixteen is those 305 00:14:30,960 --> 00:14:33,040 Speaker 1: people who wrestle with the pig get muddy and the 306 00:14:33,080 --> 00:14:37,640 Speaker 1: pig gets happy. The truth you're listening to Bloomberg who 307 00:14:37,720 --> 00:14:43,840 Speaker 1: sound on with Joe Matthew on Bloomberg Radio News. The 308 00:14:44,000 --> 00:14:48,920 Speaker 1: Israeli embassy in Washington will reopen tomorrow after the country's 309 00:14:49,080 --> 00:14:52,160 Speaker 1: main labor group called off a strike that's been a 310 00:14:52,200 --> 00:14:55,880 Speaker 1: big part of this. The airport's been closed as now. 311 00:14:55,920 --> 00:14:58,640 Speaker 1: We know that Benjamin nett Yah, who is pausing the 312 00:14:58,760 --> 00:15:03,480 Speaker 1: legal overhaul following some serious protests that have been going 313 00:15:03,560 --> 00:15:06,120 Speaker 1: on for days here. If you like car horns, this 314 00:15:06,200 --> 00:15:12,360 Speaker 1: is what it sounded like earlier today, thousands of people 315 00:15:12,440 --> 00:15:17,360 Speaker 1: and in some cases actually breaking out in confrontation with 316 00:15:17,440 --> 00:15:20,560 Speaker 1: authorities in front of Netanya, who's home. It's been quite 317 00:15:20,560 --> 00:15:24,040 Speaker 1: a time here demonstrating against this plan again to overhaul 318 00:15:24,080 --> 00:15:26,760 Speaker 1: the nation's judiciary. This has been shelved, at least delayed. 319 00:15:26,800 --> 00:15:29,480 Speaker 1: We don't know exactly what's going to happen at this point. 320 00:15:29,560 --> 00:15:31,760 Speaker 1: Is it's just developed in the past twenty minutes or so. 321 00:15:31,840 --> 00:15:34,920 Speaker 1: Rick Davis and Jeanie Schanzano are with us, and we're 322 00:15:34,960 --> 00:15:37,800 Speaker 1: also going to add the voice of Joel Rubin, president 323 00:15:37,840 --> 00:15:41,200 Speaker 1: of Washington Strategy Group, former Deputy Assistant Secretary of State, 324 00:15:41,200 --> 00:15:43,280 Speaker 1: of course with us regularly on sound on as part 325 00:15:43,320 --> 00:15:45,600 Speaker 1: of our panel. We wanted to hear from Joel and 326 00:15:45,720 --> 00:15:48,400 Speaker 1: just to kind of frame this its significance and its 327 00:15:48,440 --> 00:15:53,440 Speaker 1: context here from the view in Washington, Joel, thanks for 328 00:15:53,640 --> 00:15:56,360 Speaker 1: jumping on with us here. The White House was clearly 329 00:15:56,560 --> 00:15:59,120 Speaker 1: very concerned about this. What does the development mean for 330 00:15:59,160 --> 00:16:03,320 Speaker 1: our relationship with Netanyahu? Joe, It's great to be with 331 00:16:03,360 --> 00:16:07,240 Speaker 1: you and my colleague panelists here. The development right now 332 00:16:07,240 --> 00:16:10,600 Speaker 1: in Israel is still a crisis and it's putting severe 333 00:16:10,640 --> 00:16:14,600 Speaker 1: stress right now on the bilateral relationship, not in terms 334 00:16:14,600 --> 00:16:17,880 Speaker 1: of security, not in terms of overall American support for Israel, 335 00:16:17,960 --> 00:16:21,440 Speaker 1: but on a question of democracy. You know, this week, 336 00:16:21,600 --> 00:16:27,400 Speaker 1: the President's convening his second democracy summit, and the question 337 00:16:27,480 --> 00:16:30,760 Speaker 1: of Israel and is it backsliding into an autocratic system 338 00:16:31,320 --> 00:16:34,040 Speaker 1: is on everyone's mind. So there's a lot of a 339 00:16:34,040 --> 00:16:38,160 Speaker 1: lot of concern. There's questions about how will Israel move 340 00:16:38,280 --> 00:16:41,560 Speaker 1: forward in this in a consensus manner that will not 341 00:16:41,760 --> 00:16:44,920 Speaker 1: have the kinds of disruptions and eruptions that we've seen 342 00:16:44,920 --> 00:16:48,120 Speaker 1: over the last few days, especially the last forty eight hours. 343 00:16:48,320 --> 00:16:50,800 Speaker 1: Does Benjamin who try to bring this idea back to life? 344 00:16:50,880 --> 00:16:54,640 Speaker 1: Or we pass this phase here? Oh no, We're we're 345 00:16:54,680 --> 00:16:56,840 Speaker 1: not at all past this. This is a pause. It's 346 00:16:56,840 --> 00:17:04,359 Speaker 1: a tactical retreat, not a strategic one. He's gonna try 347 00:17:04,359 --> 00:17:06,920 Speaker 1: to strengthen up his coalition and sure that he has 348 00:17:06,960 --> 00:17:11,280 Speaker 1: the votes. And that means understanding that the protests right 349 00:17:11,320 --> 00:17:14,080 Speaker 1: now and as you point out, the Histade Ruth, the 350 00:17:14,440 --> 00:17:18,240 Speaker 1: Labor Union of Israel, the top business leaders, military leaders, 351 00:17:18,240 --> 00:17:21,400 Speaker 1: everybody's out on the streets protesting. So he understands this 352 00:17:21,480 --> 00:17:23,440 Speaker 1: is a moment he can't push. So he's going to 353 00:17:23,520 --> 00:17:26,280 Speaker 1: try to regroup, strengthen his base, and then I push 354 00:17:26,320 --> 00:17:29,920 Speaker 1: it through after the past Silver holidays. Is he taking 355 00:17:29,960 --> 00:17:32,720 Speaker 1: Joe Biden's calls on this or is it you know, okay, 356 00:17:32,760 --> 00:17:35,920 Speaker 1: we delayed it. Uh, we're not. We're not talking any further. 357 00:17:36,000 --> 00:17:38,200 Speaker 1: I just wondered to what extent the administration can provide 358 00:17:38,240 --> 00:17:42,199 Speaker 1: guidance here. Yeah, you know, President Biden has known the 359 00:17:42,240 --> 00:17:46,479 Speaker 1: Prime Minister for decades upon decades, back to when the 360 00:17:46,480 --> 00:17:49,040 Speaker 1: Prime Minister was serving here in the Israeli embassy in 361 00:17:49,080 --> 00:17:52,720 Speaker 1: the eighties. So they go a ways back. And they 362 00:17:52,760 --> 00:17:55,560 Speaker 1: did speak a week ago, about eight nine days ago. 363 00:17:55,840 --> 00:17:58,320 Speaker 1: On that call, the President did talk about the need 364 00:17:58,359 --> 00:18:02,600 Speaker 1: for consensus. He's issued a gentle statement about that. That 365 00:18:02,720 --> 00:18:05,960 Speaker 1: was the talking point last night from the National Security 366 00:18:06,000 --> 00:18:09,280 Speaker 1: Council spokeswoman who made it very clear that the United 367 00:18:09,280 --> 00:18:12,879 Speaker 1: States is concerned. And that's because the Defense Minister was 368 00:18:12,960 --> 00:18:16,280 Speaker 1: fired by primis Units and Yahoo for having the audacity 369 00:18:16,640 --> 00:18:20,240 Speaker 1: to declare opposition to a policy position of the Prime Minister. 370 00:18:20,800 --> 00:18:23,119 Speaker 1: And that Defense Minister is the point person to the 371 00:18:23,160 --> 00:18:26,760 Speaker 1: United States Defense Department on our military cooperation. So that 372 00:18:26,800 --> 00:18:30,280 Speaker 1: didn't sit well with the national security leadership here in Washington, 373 00:18:30,359 --> 00:18:33,560 Speaker 1: and that's why there was that strong statement last night. 374 00:18:34,080 --> 00:18:36,919 Speaker 1: Really something I appreciate the insights Joel Ruben of the 375 00:18:37,080 --> 00:18:40,720 Speaker 1: Washington Strategy Group, former Deputy Assistant Secretary of State in 376 00:18:40,800 --> 00:18:43,440 Speaker 1: both the Obama and Bush administrations, checking in today on 377 00:18:43,560 --> 00:18:45,800 Speaker 1: breaking news here from Israel. Let's bring the panel back in. 378 00:18:45,920 --> 00:18:49,199 Speaker 1: Rick Davis and Jeanie Schanzano have certainly their own ideas 379 00:18:49,240 --> 00:18:51,880 Speaker 1: on this, Genie, how does Joe Biden move forward here? 380 00:18:52,359 --> 00:18:57,280 Speaker 1: If only to just watch quietly for now? I was 381 00:18:57,359 --> 00:18:59,920 Speaker 1: so glad to hear the mention of the summit this week. 382 00:19:00,119 --> 00:19:02,040 Speaker 1: I mean, this is a summit. It's the second one, 383 00:19:02,080 --> 00:19:05,760 Speaker 1: one hundred and twenty countries coming. It's a huge challenge 384 00:19:05,760 --> 00:19:08,439 Speaker 1: for this administration because they have, you know, not a 385 00:19:08,600 --> 00:19:11,480 Speaker 1: very limited power in terms of what you want. Joel 386 00:19:11,560 --> 00:19:16,639 Speaker 1: describes these backsliding democracies like potentially Israel, poland India, and 387 00:19:16,720 --> 00:19:19,960 Speaker 1: yet they're trying to hold them together. And this is 388 00:19:20,119 --> 00:19:22,439 Speaker 1: you know, when we talk about Ukraine, how can you 389 00:19:22,480 --> 00:19:26,240 Speaker 1: confront a Russia or China, you know, support Ukraine unless 390 00:19:26,240 --> 00:19:29,159 Speaker 1: you hold the democratic states together. So this is what 391 00:19:29,359 --> 00:19:32,639 Speaker 1: is at risk here. And so of course Biden has 392 00:19:32,720 --> 00:19:36,119 Speaker 1: to confront and you know, maybe not a face on, 393 00:19:36,400 --> 00:19:40,359 Speaker 1: but confront Benjamin Yahoo on this because it really does 394 00:19:40,600 --> 00:19:43,960 Speaker 1: raise all kinds of questions about what is his primary 395 00:19:44,000 --> 00:19:47,199 Speaker 1: foreign policy goals, and so he is going to have 396 00:19:47,320 --> 00:19:49,480 Speaker 1: to address this, and they are starting to do that, 397 00:19:49,760 --> 00:19:52,960 Speaker 1: Benjamin Yahoo sort of retreating. But if he starts to 398 00:19:53,000 --> 00:19:55,960 Speaker 1: come back again on this, the US and the administration 399 00:19:55,960 --> 00:19:57,560 Speaker 1: are going to be in a position where they're going 400 00:19:57,600 --> 00:20:00,560 Speaker 1: to have to respond. Do we need to help Israel 401 00:20:00,960 --> 00:20:03,400 Speaker 1: get its economy back open? Rick? I mean, things are 402 00:20:03,520 --> 00:20:06,920 Speaker 1: in a pretty strange state over there. I realized they 403 00:20:06,960 --> 00:20:10,880 Speaker 1: called off strikes following the comments, but this has turned 404 00:20:10,920 --> 00:20:14,320 Speaker 1: into a pretty ugly display for a good couple of weeks. Now. Yeah, 405 00:20:14,400 --> 00:20:18,000 Speaker 1: I think that this is what's complicating any real good 406 00:20:18,040 --> 00:20:22,960 Speaker 1: economic viability that the country needs right now. Is the 407 00:20:23,000 --> 00:20:25,959 Speaker 1: fact that they everyone has been gripped with this this issue. 408 00:20:26,320 --> 00:20:30,600 Speaker 1: When you have the army reserves out protesting, it's really 409 00:20:30,720 --> 00:20:34,960 Speaker 1: quite incredible because they are so incredibly important to Israel 410 00:20:35,040 --> 00:20:38,479 Speaker 1: and its security, which has been under siege by renewed 411 00:20:38,560 --> 00:20:42,760 Speaker 1: rocket attacks and other incursions into the States. So at 412 00:20:42,760 --> 00:20:46,680 Speaker 1: a time when their economy sagging, they have attacks from 413 00:20:46,960 --> 00:20:50,520 Speaker 1: from outside the country, and now they have this massive 414 00:20:51,760 --> 00:20:56,000 Speaker 1: dislocation Politically, I think we're yet to see how this 415 00:20:56,040 --> 00:20:58,720 Speaker 1: resolves itself. I mean, there's a good indication that maybe 416 00:20:59,000 --> 00:21:03,120 Speaker 1: but Ninyah Who's Justice Minister Yeri Levine, who has been 417 00:21:03,119 --> 00:21:08,280 Speaker 1: behind these these these uh provisions with the Supreme Court, 418 00:21:08,760 --> 00:21:11,520 Speaker 1: could wind up resigning because of the delay. So you know, 419 00:21:11,560 --> 00:21:14,960 Speaker 1: we have one one defense minister who hits the bricks 420 00:21:15,000 --> 00:21:18,200 Speaker 1: because of his opposition to this, and now potentially ministers 421 00:21:18,359 --> 00:21:21,920 Speaker 1: leaving because of nah Who's delay. So all of this 422 00:21:22,080 --> 00:21:27,320 Speaker 1: I think stands h to reason that Israel is not 423 00:21:27,640 --> 00:21:29,720 Speaker 1: out of the woods on this in any way, shape 424 00:21:29,800 --> 00:21:31,840 Speaker 1: or form. How does this impact that ye know, who's 425 00:21:31,880 --> 00:21:33,800 Speaker 1: tenure Rick or is it too really to weigh in 426 00:21:33,840 --> 00:21:36,280 Speaker 1: on that. I mean, look, I think this Likud party 427 00:21:36,320 --> 00:21:39,200 Speaker 1: discipline is a question, right. I mean, his party has 428 00:21:39,480 --> 00:21:42,920 Speaker 1: been on rocky straits for some time. There's no question 429 00:21:43,359 --> 00:21:45,720 Speaker 1: that if this doesn't resolve itself in a way that 430 00:21:45,760 --> 00:21:48,639 Speaker 1: holds the coalition together, we'll know right away because the 431 00:21:49,440 --> 00:21:52,600 Speaker 1: farther right members of his coalition are gonna make their 432 00:21:52,680 --> 00:21:55,399 Speaker 1: voices known now that he's done this, and that could 433 00:21:55,440 --> 00:21:59,440 Speaker 1: that could break apart the coalition and start talk about 434 00:21:59,480 --> 00:22:02,480 Speaker 1: another election, the fifth election, and in almost a year 435 00:22:02,640 --> 00:22:05,119 Speaker 1: we'll be measuring things in Net and Yahoo's instead of 436 00:22:05,119 --> 00:22:09,520 Speaker 1: Scaramucci's Genie. Yeah, that's right. And you know, on the 437 00:22:09,640 --> 00:22:12,400 Speaker 1: economic front, I don't think we can underscore that enough. 438 00:22:12,800 --> 00:22:16,040 Speaker 1: Many people see that net and Yahoo did great things 439 00:22:16,119 --> 00:22:20,280 Speaker 1: for Israel as it pertains to the economy. You're listening 440 00:22:20,280 --> 00:22:23,880 Speaker 1: to the Bloomberg Sound On podcast. Catch the program live 441 00:22:24,000 --> 00:22:27,600 Speaker 1: weekdays at one Eastern on Bloomberg Radio, the tune in app, 442 00:22:27,680 --> 00:22:30,760 Speaker 1: Bloomberg dot Com, and the Bloomberg Business App. You can 443 00:22:30,800 --> 00:22:34,080 Speaker 1: also listen live on Amazon Alexa from our flagship New 444 00:22:34,119 --> 00:22:40,320 Speaker 1: York station, Just Say Alexa. Play Bloomberg eleven thirty Joe 445 00:22:40,359 --> 00:22:43,400 Speaker 1: Matthew and Kaylee Lines on Bloomberg sound On we're live 446 00:22:43,400 --> 00:22:46,399 Speaker 1: in Washington with a couple of pretty important headlines. Kaylee, 447 00:22:46,440 --> 00:22:49,000 Speaker 1: I didn't know if they'd call you in over the weekend. 448 00:22:49,440 --> 00:22:51,479 Speaker 1: It didn't come to that. It didn't come to it 449 00:22:51,560 --> 00:22:54,399 Speaker 1: this weekend, this weekend as it did the one before. 450 00:22:54,440 --> 00:22:57,560 Speaker 1: But SVB is sold, or at least the carcass of yes, 451 00:22:57,760 --> 00:23:01,480 Speaker 1: SVB is sold, Yes, seventy two and be making people 452 00:23:01,480 --> 00:23:03,960 Speaker 1: feel kind of good today. Yeah, it's definitely checked the box. 453 00:23:04,000 --> 00:23:07,200 Speaker 1: I guess better mood music. First citizens hearing to take 454 00:23:07,200 --> 00:23:10,119 Speaker 1: those seventy two billion dollars in assets for a pretty 455 00:23:10,119 --> 00:23:12,159 Speaker 1: sweet deal of sixteen and a half billion dollars from 456 00:23:12,200 --> 00:23:14,800 Speaker 1: the FDIC. That is one thing helping, the other being 457 00:23:15,040 --> 00:23:18,119 Speaker 1: reports from Bloomberg over the weekend, because while I wasn't working, 458 00:23:18,200 --> 00:23:21,200 Speaker 1: others were doing always doing the good work of talking 459 00:23:21,200 --> 00:23:23,719 Speaker 1: about what's going on in regulation, talking about the possibility 460 00:23:23,800 --> 00:23:26,080 Speaker 1: that US authorities are going to try to help First 461 00:23:26,080 --> 00:23:29,320 Speaker 1: Republic through by changing some measures. So all of that 462 00:23:29,800 --> 00:23:32,199 Speaker 1: is setting a better tone ahead of these hearings on 463 00:23:32,280 --> 00:23:35,080 Speaker 1: Capitol Hill that we're expecting in the Senate tomorrow and 464 00:23:35,160 --> 00:23:38,520 Speaker 1: the House Financial Services Committee on Wednesday. And we're starting, 465 00:23:38,800 --> 00:23:41,840 Speaker 1: Joe to get the planned testimony from those who will 466 00:23:41,840 --> 00:23:43,919 Speaker 1: be testifying there. We got Michael Barr, the fed's Vice 467 00:23:44,000 --> 00:23:46,280 Speaker 1: Chair of Supervision, earlier today and we just had the 468 00:23:46,359 --> 00:23:49,640 Speaker 1: testimony drop from Marty Grumberg at the FDC. Yeah, you'll 469 00:23:49,640 --> 00:23:52,120 Speaker 1: be hearing more as we kind of pick our way 470 00:23:52,119 --> 00:23:54,840 Speaker 1: through that. But the other headline that catches our attention 471 00:23:54,880 --> 00:23:58,680 Speaker 1: here is small US banks lose one hundred nine billion 472 00:23:58,720 --> 00:24:02,080 Speaker 1: dollars in deposits in a single week. Moody's has numbers 473 00:24:02,080 --> 00:24:05,720 Speaker 1: on this. The biggest twenty five banks gained one hundred 474 00:24:05,720 --> 00:24:08,840 Speaker 1: and twenty billion at that same time. So, you know, 475 00:24:08,880 --> 00:24:11,040 Speaker 1: we've been talking about this in real time. To actually 476 00:24:11,080 --> 00:24:13,560 Speaker 1: get numbers like that to kind of confirm what you've 477 00:24:13,600 --> 00:24:16,479 Speaker 1: already been talking about, Kyley, is remarkable. Yeah, this concern 478 00:24:16,520 --> 00:24:19,399 Speaker 1: around deposit flight, the idea that if you want your 479 00:24:19,440 --> 00:24:21,600 Speaker 1: deposits to be safe, maybe you go to the banks 480 00:24:21,640 --> 00:24:24,080 Speaker 1: that are deemed too big to fail because you don't 481 00:24:24,119 --> 00:24:27,840 Speaker 1: know that everything will be guaranteed at another bank just 482 00:24:27,880 --> 00:24:30,080 Speaker 1: because they were at Silicon Valley Bank and Signature Bank. 483 00:24:30,119 --> 00:24:32,480 Speaker 1: That is definitely a subject of conversation that will be 484 00:24:32,880 --> 00:24:36,080 Speaker 1: I'm sure elevated at the hearing yesterday. Let's get the 485 00:24:36,119 --> 00:24:38,919 Speaker 1: take from someone who had a hand in regulating banks. Now, 486 00:24:39,000 --> 00:24:41,440 Speaker 1: Keith and Rocca is joining us. He is currently executive 487 00:24:41,520 --> 00:24:45,160 Speaker 1: vice president and Chairman of Banking Supervision and Regulation at 488 00:24:45,160 --> 00:24:49,199 Speaker 1: Potomac Global Partners, but he previously served as Acting Comptroller 489 00:24:49,240 --> 00:24:51,040 Speaker 1: of the Currency. So Keith, thank you so much for 490 00:24:51,119 --> 00:24:53,520 Speaker 1: joining us. It is great to have you with us. 491 00:24:53,600 --> 00:24:57,040 Speaker 1: If you could pick one question for Marty Grunberg and 492 00:24:57,240 --> 00:25:01,160 Speaker 1: Michael Barr and Nellie Lange tomorrow, what would it be? Well, 493 00:25:01,200 --> 00:25:04,879 Speaker 1: thanks for having Michael and Joe. UM look a different, 494 00:25:05,119 --> 00:25:09,320 Speaker 1: difficult situation all around, um, but it's I think my 495 00:25:09,400 --> 00:25:13,639 Speaker 1: one question would be what is the extent of mismatch 496 00:25:13,720 --> 00:25:19,119 Speaker 1: books on balance sheets of banks that they supervise, and 497 00:25:19,440 --> 00:25:21,440 Speaker 1: what's the plan to deal with that? And how are 498 00:25:21,440 --> 00:25:26,120 Speaker 1: we going to internalize that into the metrics that regulators 499 00:25:26,240 --> 00:25:30,480 Speaker 1: use to evaluate the health of banks and then make 500 00:25:30,520 --> 00:25:33,480 Speaker 1: it public to the markets, Because you know, we're seeing 501 00:25:33,600 --> 00:25:38,400 Speaker 1: different divergence between regulatory reports, you know, saying banks are 502 00:25:38,400 --> 00:25:42,840 Speaker 1: well capitalized, and you know anyone on the internet going 503 00:25:42,880 --> 00:25:46,800 Speaker 1: and marketing banks books to market their securities portfolios and 504 00:25:46,920 --> 00:25:49,119 Speaker 1: a different story. And so I think there's going to 505 00:25:49,200 --> 00:25:53,159 Speaker 1: have to be some some overtime some matching up of 506 00:25:53,560 --> 00:25:56,680 Speaker 1: those two expectations, Keith. Once we get through these two hearings, 507 00:25:56,720 --> 00:26:00,119 Speaker 1: will there be a concerted debate about raising fd I 508 00:26:00,160 --> 00:26:03,280 Speaker 1: see insurance caps, particularly for individuals. Or are they going 509 00:26:03,320 --> 00:26:04,720 Speaker 1: to come out of this and say, you know what, 510 00:26:05,280 --> 00:26:09,359 Speaker 1: the system worked, the contagion has been blocked. There's no 511 00:26:09,440 --> 00:26:13,520 Speaker 1: stomach to really get anything big done here in Washington. Well, 512 00:26:13,560 --> 00:26:17,800 Speaker 1: there's always that, right, that's true, sitting here in Washington 513 00:26:17,920 --> 00:26:22,440 Speaker 1: next to the lighthouse. But look, I think it's a 514 00:26:22,680 --> 00:26:25,399 Speaker 1: it's a it's a big lift to you know, have 515 00:26:25,520 --> 00:26:30,000 Speaker 1: unlimited deposit insurance, and it fundamentally transforms the industry in 516 00:26:30,080 --> 00:26:33,560 Speaker 1: ways that may not be favorable to the smaller banks. 517 00:26:33,560 --> 00:26:35,480 Speaker 1: I mean, one thing they have going for them now 518 00:26:36,040 --> 00:26:39,280 Speaker 1: is in sweet type arrangements. They have a charter and 519 00:26:39,400 --> 00:26:41,840 Speaker 1: they can they can take in two hundred and fifty 520 00:26:41,840 --> 00:26:44,720 Speaker 1: thousand dollars worth of deposits. So, you know, I think 521 00:26:44,880 --> 00:26:47,240 Speaker 1: we're going to have to think about this as a 522 00:26:47,280 --> 00:26:50,640 Speaker 1: policy matter and really look at sort of what might 523 00:26:50,840 --> 00:26:54,640 Speaker 1: need more extended deposit insurance, such as like payroll accounts 524 00:26:55,240 --> 00:26:59,280 Speaker 1: or transaction accounts, but maybe not all accounts. And then 525 00:26:59,520 --> 00:27:01,480 Speaker 1: you know, or to work from there. It's also, you know, 526 00:27:01,560 --> 00:27:05,359 Speaker 1: fairly expensive proposition and that's going to have to go 527 00:27:05,400 --> 00:27:08,560 Speaker 1: in as well. So there's the question of those potential changes. 528 00:27:08,600 --> 00:27:11,840 Speaker 1: There's also just the question of what regulatory and supervisory 529 00:27:11,960 --> 00:27:14,480 Speaker 1: changes may stem from this. I mentioned we just got 530 00:27:14,480 --> 00:27:17,280 Speaker 1: the planned testimony of the FDIC chair Murdy Gronberg. Part 531 00:27:17,280 --> 00:27:20,680 Speaker 1: of it reads that the prudential regulation of these institutions 532 00:27:20,720 --> 00:27:26,000 Speaker 1: merit serious attention, particularly for capital liquidity and interest rate risk. 533 00:27:26,080 --> 00:27:28,000 Speaker 1: There has been a lot of back and forth Keith, 534 00:27:28,040 --> 00:27:30,480 Speaker 1: around the role of the twenty eighteen rollback of certain 535 00:27:30,520 --> 00:27:33,439 Speaker 1: Dodd Frank requirements for banks of a certain size. I 536 00:27:33,520 --> 00:27:35,280 Speaker 1: remember speaking with you at the beginning of all this, 537 00:27:35,400 --> 00:27:37,199 Speaker 1: calling you up and you know, getting your take on 538 00:27:37,200 --> 00:27:38,600 Speaker 1: what is going on, and you said, this is really 539 00:27:38,600 --> 00:27:41,520 Speaker 1: just about the duration gap. It's an agil problem. So 540 00:27:41,560 --> 00:27:44,240 Speaker 1: how much attention really should be paid to these capital 541 00:27:44,280 --> 00:27:46,119 Speaker 1: requirements or is this just the wrong thing to be 542 00:27:46,160 --> 00:27:48,439 Speaker 1: looking at. Well, I think they all need to be 543 00:27:48,560 --> 00:27:51,440 Speaker 1: married up, Kaylee. You know, we put in a lot 544 00:27:51,480 --> 00:27:56,919 Speaker 1: of requirements and Dodd Frank with capital liquidity, and in 545 00:27:56,960 --> 00:28:00,159 Speaker 1: some ways the infest rate duration gap got left and 546 00:28:00,280 --> 00:28:03,120 Speaker 1: that was you know, a few scandals are a few 547 00:28:03,160 --> 00:28:07,200 Speaker 1: crises before the financial crisis and the SNL crisis. So 548 00:28:07,480 --> 00:28:09,159 Speaker 1: you know, if you think about an old agency that 549 00:28:09,200 --> 00:28:13,399 Speaker 1: actually got abolished during Frank, the Office of Risk Supervision, 550 00:28:13,520 --> 00:28:17,400 Speaker 1: that actually kept interest rate risk reports and published them 551 00:28:17,960 --> 00:28:20,280 Speaker 1: on the industry, and those kind of went away and 552 00:28:20,359 --> 00:28:22,920 Speaker 1: everyone was fighting the last battle, and not a few 553 00:28:22,920 --> 00:28:26,680 Speaker 1: battles before that, So you know, it may make sense, 554 00:28:27,240 --> 00:28:29,760 Speaker 1: you know it. Certainly, capital I think is top of mind. 555 00:28:30,200 --> 00:28:32,520 Speaker 1: Liquidity rules I think are a little bit harder, right 556 00:28:32,600 --> 00:28:36,520 Speaker 1: because they could actually be contributing to this problem if 557 00:28:36,560 --> 00:28:41,160 Speaker 1: they don't also incorporate infrastrate risk into those models. So 558 00:28:41,200 --> 00:28:45,240 Speaker 1: liquidity obviously super important for banks, super expensive, but it 559 00:28:45,360 --> 00:28:47,920 Speaker 1: has to be done in a way that doesn't exacerbate 560 00:28:48,680 --> 00:28:52,920 Speaker 1: interest rate risks. So it's all on the table, you know, clearly, 561 00:28:53,040 --> 00:28:57,040 Speaker 1: and has been. I mean, the FEDS rules apply these 562 00:28:57,120 --> 00:29:01,000 Speaker 1: requirements to banks over one hundred billion dollars even after 563 00:29:01,160 --> 00:29:04,640 Speaker 1: the reforms of twenty and eighteen. But we kind of 564 00:29:04,680 --> 00:29:07,160 Speaker 1: got got to get back to basics. There was like 565 00:29:07,200 --> 00:29:10,080 Speaker 1: a little bit of a regulatory blind spot with forty 566 00:29:10,160 --> 00:29:14,920 Speaker 1: years of easy money and those old lessons of the 567 00:29:15,200 --> 00:29:19,120 Speaker 1: seventies and eighties are coming back with a vengeance. Now, 568 00:29:19,400 --> 00:29:22,400 Speaker 1: what's your take a Keith on the role that those 569 00:29:22,440 --> 00:29:27,000 Speaker 1: twenty eighteen changes played the fact that those banks weren't 570 00:29:27,040 --> 00:29:32,480 Speaker 1: subject to as stringent a stress test as might have 571 00:29:32,560 --> 00:29:35,200 Speaker 1: happened during Dodd Frank, was that to blame? Would it 572 00:29:35,240 --> 00:29:39,440 Speaker 1: have actually pointed something out that regulators missed? Yet not 573 00:29:39,600 --> 00:29:41,800 Speaker 1: so much in the case of these banks, because they 574 00:29:41,840 --> 00:29:45,040 Speaker 1: would have, like, um, they were always under two hundred 575 00:29:45,040 --> 00:29:47,960 Speaker 1: and fifty, so they never were subject to the stringent 576 00:29:48,320 --> 00:29:52,280 Speaker 1: liquidity rules. And they were also you know, for many 577 00:29:52,320 --> 00:29:55,080 Speaker 1: parts of their ten year under fifty, so even under 578 00:29:55,120 --> 00:29:57,920 Speaker 1: the old rules they wouldn't have been captured. I think 579 00:29:58,080 --> 00:30:03,440 Speaker 1: it's and you see this Michael Barr's written testimony that 580 00:30:03,600 --> 00:30:07,000 Speaker 1: just came that Kaylee was talking about. There is also 581 00:30:07,040 --> 00:30:11,640 Speaker 1: a notion of like the accelerated growth and whether that 582 00:30:11,760 --> 00:30:14,960 Speaker 1: you know, should be an independent flag aside from size, 583 00:30:15,800 --> 00:30:19,280 Speaker 1: you know, never been kind of incorporated into the prudential 584 00:30:19,320 --> 00:30:22,840 Speaker 1: standards since Frank, but probably needs to be. This could 585 00:30:22,840 --> 00:30:26,720 Speaker 1: be a bad day for Michael Barr, right, I'd rather 586 00:30:26,760 --> 00:30:28,960 Speaker 1: be sitting there representing the FD, I see, than the 587 00:30:28,960 --> 00:30:31,480 Speaker 1: FED tomorrow. I don't know your thought on that. Well, 588 00:30:31,520 --> 00:30:34,600 Speaker 1: I think he is in a very difficult political position because, 589 00:30:34,600 --> 00:30:37,600 Speaker 1: on the one hand, the FED board has been made 590 00:30:37,600 --> 00:30:39,520 Speaker 1: a point to come out and say that, yes, they 591 00:30:39,560 --> 00:30:42,600 Speaker 1: did know about some of these concerns, because perhaps they 592 00:30:42,640 --> 00:30:45,400 Speaker 1: don't want to be caught seeming as though they hadn't 593 00:30:45,400 --> 00:30:47,080 Speaker 1: been paying any attention at all. On the other hand, 594 00:30:47,080 --> 00:30:49,280 Speaker 1: that then puts you in the position of looking like 595 00:30:49,360 --> 00:30:51,840 Speaker 1: you knew about it, yet you didn't act quickly enough 596 00:30:51,880 --> 00:30:54,080 Speaker 1: to make sure that this didn't happen. So he's definitely 597 00:30:54,640 --> 00:30:56,800 Speaker 1: gonna get some tough questions. I wouldn't I wouldn't want 598 00:30:56,800 --> 00:30:58,880 Speaker 1: to be in his chair, Joe, You're absolutely right. There 599 00:30:58,920 --> 00:31:02,160 Speaker 1: also is the question, Keith, about how this moment is different. 600 00:31:02,200 --> 00:31:05,880 Speaker 1: You mentioned how we had seen just it was incredibly quick, 601 00:31:05,960 --> 00:31:08,960 Speaker 1: how quickly the deposit pace was growing, and that maybe 602 00:31:08,960 --> 00:31:11,680 Speaker 1: that should have been concerned concerning the other thing that 603 00:31:11,720 --> 00:31:14,800 Speaker 1: was incredibly quick was how quickly the run happened, something 604 00:31:14,840 --> 00:31:19,040 Speaker 1: that was accelerated perhaps by social media and digital banking. 605 00:31:19,160 --> 00:31:22,880 Speaker 1: How do you regulate for this new world? Well, I 606 00:31:22,920 --> 00:31:25,280 Speaker 1: think you have to be very careful, right because I 607 00:31:25,320 --> 00:31:28,320 Speaker 1: know this is a little bit of debate. You know, 608 00:31:28,400 --> 00:31:30,880 Speaker 1: others and I've had, But like social media is kind 609 00:31:30,880 --> 00:31:33,440 Speaker 1: of also as an equalizer, right, because in a bank run, 610 00:31:33,520 --> 00:31:36,360 Speaker 1: there no you know, no price or second prey at place, 611 00:31:36,480 --> 00:31:39,920 Speaker 1: and you know you wouldn't want just a well positioned 612 00:31:40,360 --> 00:31:44,360 Speaker 1: to be advantaged and everyone else to come up short. 613 00:31:44,480 --> 00:31:48,960 Speaker 1: So it certainly accelerates things. And we saw some things 614 00:31:49,040 --> 00:31:52,560 Speaker 1: new happen as far as bank closures go, like closing 615 00:31:52,600 --> 00:31:55,240 Speaker 1: Silicon Valley Bank at the beginning of a work day 616 00:31:55,320 --> 00:31:57,920 Speaker 1: on a Friday rather than at the end of the day. 617 00:31:58,280 --> 00:31:59,880 Speaker 1: The regulator likes to do it at the end of 618 00:31:59,880 --> 00:32:02,680 Speaker 1: the day. But but I think the regulators have to 619 00:32:02,720 --> 00:32:06,719 Speaker 1: more adjust than sort of blaming social media because you know, 620 00:32:06,960 --> 00:32:10,360 Speaker 1: it's it's sort of everyone's in it for themselves, and 621 00:32:10,760 --> 00:32:14,680 Speaker 1: the more transparency information is, the fairer it is. So ironically, 622 00:32:15,080 --> 00:32:17,800 Speaker 1: I take your point on social media, but on just 623 00:32:18,360 --> 00:32:21,280 Speaker 1: the ability to move money around quickly in digital banking. 624 00:32:21,320 --> 00:32:24,720 Speaker 1: Should should regulators and policymakers be thinking about ways in 625 00:32:24,760 --> 00:32:28,440 Speaker 1: which to slow that down? Well, Kaylee, I think we're 626 00:32:28,440 --> 00:32:30,440 Speaker 1: ating in the other direction, right, I mean, isn't like 627 00:32:30,560 --> 00:32:33,400 Speaker 1: a sort of maybe another question for Michael Bart tomorrow, 628 00:32:33,480 --> 00:32:38,160 Speaker 1: But like you know, fed now is going live July yeah. 629 00:32:38,200 --> 00:32:40,880 Speaker 1: I mean you wonder what these things would look like 630 00:32:40,920 --> 00:32:43,600 Speaker 1: if you could move money over the weekend right or 631 00:32:43,760 --> 00:32:48,000 Speaker 1: after business hours, and that's going to presumably be available 632 00:32:48,640 --> 00:32:51,560 Speaker 1: in a few short months, so so yeah, I think 633 00:32:51,640 --> 00:32:56,320 Speaker 1: those are certainly issues you'd want to have top of mind. 634 00:32:56,440 --> 00:32:59,160 Speaker 1: And because like these breaks in the business days and 635 00:32:59,200 --> 00:33:02,240 Speaker 1: all to give people a chance to you know, like 636 00:33:02,320 --> 00:33:07,320 Speaker 1: a circuit breaker in the market. And I think we're 637 00:33:07,360 --> 00:33:10,040 Speaker 1: sort of headed past in the other direction, and people 638 00:33:10,120 --> 00:33:13,400 Speaker 1: may want to rethink that before like FEDNA now goes 639 00:33:13,440 --> 00:33:16,080 Speaker 1: live for instance, Keith, are you worried these two hearings 640 00:33:16,160 --> 00:33:19,320 Speaker 1: drag this into the political morass from which it will 641 00:33:19,400 --> 00:33:22,480 Speaker 1: not be saved? You know, people have very strong opinions 642 00:33:22,600 --> 00:33:25,760 Speaker 1: and but yet no consensus on Capitol Hill. Yeah, well 643 00:33:25,760 --> 00:33:28,520 Speaker 1: that's Washington. I don't think you're ever going to avoid 644 00:33:28,560 --> 00:33:32,320 Speaker 1: a political morass and and to like but in terms 645 00:33:32,320 --> 00:33:35,360 Speaker 1: of people at home learning about what actually happened and 646 00:33:35,600 --> 00:33:39,920 Speaker 1: seeing policies, you know, move to potentially correct it or 647 00:33:40,280 --> 00:33:42,000 Speaker 1: prevent it from happening again, or we're just going to 648 00:33:42,080 --> 00:33:45,800 Speaker 1: make commercials all week. No, I think I think over time, 649 00:33:45,880 --> 00:33:49,920 Speaker 1: they're generally the banking laws other than Dodd Frank maybe, 650 00:33:49,960 --> 00:33:54,280 Speaker 1: but like have generally been contentus driven, certainly in my lifetime. 651 00:33:54,360 --> 00:33:57,200 Speaker 1: You know, probably every five to ten years there's a 652 00:33:57,240 --> 00:34:00,440 Speaker 1: big banking legislation go through, and then they be other 653 00:34:00,520 --> 00:34:02,840 Speaker 1: than Dodd Frank. But you know, the Democrats had pretty 654 00:34:02,880 --> 00:34:06,000 Speaker 1: much a supermajority at that point. So even Dodd Frank 655 00:34:06,120 --> 00:34:09,040 Speaker 1: maybe you'd say, we're, you know, consensus bill. Certainly, the 656 00:34:09,080 --> 00:34:13,200 Speaker 1: twenty eighteen law was with like sixty six you know 657 00:34:13,280 --> 00:34:16,640 Speaker 1: senator supporting it, a big group of Democrats. So I 658 00:34:16,640 --> 00:34:20,239 Speaker 1: think I think they'll be a consensus over time. As 659 00:34:20,239 --> 00:34:22,840 Speaker 1: we're talking to you, Keith, the White House Press Secretary 660 00:34:22,920 --> 00:34:25,960 Speaker 1: Karin Jean Pierre's briefing reporters, and a headline just crossed 661 00:34:25,960 --> 00:34:29,160 Speaker 1: the terminal that she just said that regional banks deposits 662 00:34:29,200 --> 00:34:32,239 Speaker 1: have stabilized. There does seem to be a sense that 663 00:34:32,800 --> 00:34:36,080 Speaker 1: we're in calmer waters now. But as a regulator, who 664 00:34:36,080 --> 00:34:38,279 Speaker 1: I'm sure is a former regulator, who I'm sure is 665 00:34:38,320 --> 00:34:42,200 Speaker 1: still very plugged into the conversations with those still closely 666 00:34:42,239 --> 00:34:45,760 Speaker 1: monitoring this here in Washington, how concerned should we be still? 667 00:34:45,760 --> 00:34:49,440 Speaker 1: How concerned are you? Well, look, if I'm looking at 668 00:34:49,480 --> 00:34:52,040 Speaker 1: the value of these thanks, I would you know you 669 00:34:52,120 --> 00:34:57,279 Speaker 1: have a potential capital hole in the market value or 670 00:34:57,320 --> 00:35:00,719 Speaker 1: you know the given if you mark the market securities 671 00:35:00,760 --> 00:35:03,279 Speaker 1: book and then so you have to plug that, and 672 00:35:03,320 --> 00:35:05,440 Speaker 1: then you have to look at what the franchise value 673 00:35:05,480 --> 00:35:09,560 Speaker 1: of the bank is going forward if the duration gap 674 00:35:09,680 --> 00:35:13,759 Speaker 1: issues are fixed, so you can't sort of arbitrage mismatched 675 00:35:13,840 --> 00:35:17,719 Speaker 1: duration of a book. And then sort of what does 676 00:35:17,760 --> 00:35:20,160 Speaker 1: the bank look like? So I think, like, you know, 677 00:35:20,280 --> 00:35:23,040 Speaker 1: there's a lot of liquidity in the market. It may 678 00:35:23,080 --> 00:35:26,719 Speaker 1: be funding slow runs, and which is what you're kind 679 00:35:26,760 --> 00:35:30,320 Speaker 1: of talking about earlier. I think, you know, the equity 680 00:35:30,440 --> 00:35:35,200 Speaker 1: value of these banks is probably driven by it's what 681 00:35:35,680 --> 00:35:37,360 Speaker 1: the bank is going to look like in the future. 682 00:35:37,480 --> 00:35:42,240 Speaker 1: Are their potential buyers? And so one of the signals 683 00:35:42,239 --> 00:35:45,320 Speaker 1: I think was interesting last night with this First Union, 684 00:35:45,520 --> 00:35:50,080 Speaker 1: First Citizens acquisition of SBB, It's like, you know, maybe 685 00:35:50,239 --> 00:35:52,600 Speaker 1: this set of regulators is going to be okay with 686 00:35:52,640 --> 00:35:56,200 Speaker 1: some bank mergers and consolidation of especially this segment of 687 00:35:56,239 --> 00:35:58,560 Speaker 1: the marketplace, which I think they need to be And 688 00:35:58,600 --> 00:36:01,440 Speaker 1: I think that then sends a good signal of private 689 00:36:01,560 --> 00:36:05,560 Speaker 1: capital coming in to stabilize that part of the market. Again, 690 00:36:05,960 --> 00:36:08,640 Speaker 1: this particular set of regulators hasn't been too keen on 691 00:36:08,680 --> 00:36:10,520 Speaker 1: Bank m and A. It's been kind of a red 692 00:36:10,560 --> 00:36:13,719 Speaker 1: line for progressive but they seem to be loosening up 693 00:36:13,760 --> 00:36:16,600 Speaker 1: on that a little bit. Key, thanks for the insights. 694 00:36:16,600 --> 00:36:18,440 Speaker 1: Great to have you with us today at this important time. 695 00:36:18,480 --> 00:36:21,239 Speaker 1: There's so little that has really settled yet, and it's 696 00:36:21,239 --> 00:36:25,279 Speaker 1: great to hear from Keith Noraca Kaylee. Fascinating insights on 697 00:36:25,320 --> 00:36:29,000 Speaker 1: a story that's still unfolding. But to your's point, there 698 00:36:29,040 --> 00:36:31,960 Speaker 1: does seem to be a little bit of confidence, a 699 00:36:32,000 --> 00:36:35,319 Speaker 1: little bit more optimism today than there was even on Friday. Yeah, 700 00:36:35,440 --> 00:36:38,240 Speaker 1: that's not to say that we don't have still unanswered questions. 701 00:36:38,280 --> 00:36:40,600 Speaker 1: We don't fully know what the fate a first Republic 702 00:36:40,640 --> 00:36:42,680 Speaker 1: will be, but we do know that SBB found a 703 00:36:42,680 --> 00:36:45,919 Speaker 1: buyer finally. It took some time, took longer than many 704 00:36:45,960 --> 00:36:48,239 Speaker 1: may have liked, but republic is in the wings here 705 00:36:48,239 --> 00:36:51,640 Speaker 1: waiting for athletics right right. So there's still questions that 706 00:36:51,719 --> 00:36:53,560 Speaker 1: we are looking for answers for, and I'm sure that 707 00:36:53,600 --> 00:36:55,960 Speaker 1: while marriers are going to try to get some answers 708 00:36:56,120 --> 00:37:00,279 Speaker 1: over the next couple days. You're listening to Bloomberg Owned 709 00:37:00,320 --> 00:37:05,720 Speaker 1: On with Joe Matthew On Bloombird Radio. We're standing body 710 00:37:05,800 --> 00:37:07,719 Speaker 1: here from President Biden. Just want to let you know 711 00:37:07,760 --> 00:37:11,120 Speaker 1: he's actually hosting the SBA Women's Business Summit today at 712 00:37:11,120 --> 00:37:13,520 Speaker 1: the White House, but that is not what he's likely 713 00:37:13,520 --> 00:37:16,000 Speaker 1: to address in the outset from the East Room in 714 00:37:16,040 --> 00:37:18,239 Speaker 1: just about ten minutes at least, that's the schedule. Now, 715 00:37:18,280 --> 00:37:20,280 Speaker 1: you may have heard about this shooting at a school 716 00:37:20,320 --> 00:37:24,920 Speaker 1: in Nashville, where a female assailant shotting killed three children 717 00:37:24,960 --> 00:37:27,160 Speaker 1: and three adults. The President, as we understand from the 718 00:37:27,160 --> 00:37:29,040 Speaker 1: Press Secretary, is going to be speaking to the nation 719 00:37:29,040 --> 00:37:32,319 Speaker 1: about that. We will carry his remarks as soon as 720 00:37:32,360 --> 00:37:36,080 Speaker 1: they begin, knowing that they are not always aligned with 721 00:37:36,120 --> 00:37:38,680 Speaker 1: the schedule at the White House. I'm Joe Matthew along 722 00:37:38,680 --> 00:37:42,480 Speaker 1: with Kaylee Lines in Washington as we add Kate Davidson 723 00:37:42,560 --> 00:37:45,080 Speaker 1: to the conversation. I've been looking forward to this as 724 00:37:45,120 --> 00:37:47,240 Speaker 1: we get our arms around what happened over the weekend 725 00:37:47,239 --> 00:37:49,440 Speaker 1: and what is about to unfold, Kayley in the next 726 00:37:49,480 --> 00:37:52,600 Speaker 1: couple of days. It's House and Senate, lots of grands dandy, 727 00:37:52,600 --> 00:37:55,360 Speaker 1: but also hopefully some learning about what led to that. 728 00:37:55,360 --> 00:37:57,080 Speaker 1: We're going all the way back here to the very 729 00:37:57,080 --> 00:38:00,600 Speaker 1: beginnings of this crisis with SVB and Signature, Yeah, expecting 730 00:38:00,600 --> 00:38:03,600 Speaker 1: to get a breakdown of what exactly transpired that led 731 00:38:03,640 --> 00:38:05,960 Speaker 1: to the failures of these two banks. We've been hearing 732 00:38:06,000 --> 00:38:08,320 Speaker 1: from lawmakers all throughout the course of the last several 733 00:38:08,360 --> 00:38:10,319 Speaker 1: weeks that before they decide what they want to do 734 00:38:10,360 --> 00:38:12,840 Speaker 1: in the future, they want to get to the bottom 735 00:38:12,960 --> 00:38:15,080 Speaker 1: of what actually happened. So that's what they're going to 736 00:38:15,120 --> 00:38:18,280 Speaker 1: attempt to do. In conversation with Nellie Lang from the Treasury, 737 00:38:18,480 --> 00:38:20,759 Speaker 1: with Michael Barr, the fed's Vice chaff of Supervision, and 738 00:38:20,880 --> 00:38:23,200 Speaker 1: with the fdi C Chair Marty Grumberg over the next 739 00:38:23,200 --> 00:38:25,799 Speaker 1: couple of days, I was joking, but not joking Kate 740 00:38:25,840 --> 00:38:27,320 Speaker 1: a couple of minutes ago that would not want to 741 00:38:27,360 --> 00:38:29,920 Speaker 1: be Michael Barr tomorrow. I'm thinking that that he's he's 742 00:38:29,960 --> 00:38:31,879 Speaker 1: gonna take the most heat from lawmakers who have really 743 00:38:31,880 --> 00:38:34,160 Speaker 1: gone out of their way to point out lapses in 744 00:38:34,200 --> 00:38:36,799 Speaker 1: the Fed's oversight. I think that's safe to assume for 745 00:38:36,800 --> 00:38:39,200 Speaker 1: sure he is going to be in the hot seat. 746 00:38:39,680 --> 00:38:41,560 Speaker 1: You know, Silicon Valley Bank, which, of course there have 747 00:38:41,640 --> 00:38:44,399 Speaker 1: been a few banks that have collapsed, but Silicon Valley 748 00:38:44,440 --> 00:38:46,520 Speaker 1: kind of the first one that I think folks on 749 00:38:46,560 --> 00:38:49,239 Speaker 1: the Hill certainly are most focused on and they of 750 00:38:49,239 --> 00:38:52,560 Speaker 1: course were regulated by California state regulators, but also supervisors 751 00:38:52,560 --> 00:38:55,480 Speaker 1: at the San Francisco FED. So bar of course, you know, 752 00:38:55,719 --> 00:38:59,160 Speaker 1: he only came into this position fairly recently, was confirmed 753 00:38:59,200 --> 00:39:02,320 Speaker 1: by a Congress by the Senate last year. But nevertheless, 754 00:39:02,320 --> 00:39:04,719 Speaker 1: I mean as the fed's vice chair for supervision, he 755 00:39:04,840 --> 00:39:06,800 Speaker 1: is the person who is meant to have a broad 756 00:39:06,880 --> 00:39:09,280 Speaker 1: view of all of these issues in the FED system. 757 00:39:09,600 --> 00:39:11,400 Speaker 1: So I think for sure he's going to get a 758 00:39:11,400 --> 00:39:15,160 Speaker 1: lot of tough questions about what officials at the FED 759 00:39:15,239 --> 00:39:18,040 Speaker 1: knew when they knew it, what they did to address 760 00:39:18,080 --> 00:39:21,399 Speaker 1: these problems, and what were the shortcomings. And I really 761 00:39:21,440 --> 00:39:24,000 Speaker 1: expect that Michael Barr is going to be pretty circumspect 762 00:39:24,040 --> 00:39:26,680 Speaker 1: because the FED is conducting an investigation, so they're going 763 00:39:26,719 --> 00:39:29,359 Speaker 1: to push him to say as much as he can, 764 00:39:30,360 --> 00:39:32,480 Speaker 1: and if he's not forthcoming, I don't think they're going 765 00:39:32,520 --> 00:39:36,400 Speaker 1: to take that. Well. Well, you mentioned the idea of 766 00:39:36,440 --> 00:39:39,880 Speaker 1: what they knew when we have heard from the chairman. 767 00:39:39,920 --> 00:39:42,319 Speaker 1: Powell addressed this at the press conference last week that 768 00:39:42,360 --> 00:39:44,839 Speaker 1: they were aware of some of these issues going back 769 00:39:44,880 --> 00:39:48,200 Speaker 1: a couple of years, which confirmed the reporting that Bloomberg 770 00:39:48,200 --> 00:39:50,879 Speaker 1: and other outlets had had in the aftermath. So if 771 00:39:50,920 --> 00:39:53,960 Speaker 1: they knew and it still happened, I would imagine that 772 00:39:54,000 --> 00:39:56,840 Speaker 1: just makes it a little bit tougher for them to 773 00:39:56,840 --> 00:39:59,560 Speaker 1: defend themselves. I think they are in a tough spot. 774 00:39:59,680 --> 00:40:01,719 Speaker 1: It is tricky to explain that, right. I mean, I 775 00:40:01,719 --> 00:40:04,240 Speaker 1: think I don't think the FED wants to be perceived 776 00:40:04,239 --> 00:40:06,360 Speaker 1: at all as being clueless here. They don't want to 777 00:40:06,400 --> 00:40:08,279 Speaker 1: look like they didn't know what was happening. So right, 778 00:40:08,280 --> 00:40:10,000 Speaker 1: they're coming out and saying, yes, we were aware of 779 00:40:10,040 --> 00:40:12,680 Speaker 1: some of these issues, but right, that naturally raises the 780 00:40:12,800 --> 00:40:14,799 Speaker 1: question of okay, well, so then what did you do 781 00:40:15,160 --> 00:40:18,960 Speaker 1: and why wasn't it effective? Or why wasn't it quick enough? 782 00:40:19,280 --> 00:40:21,239 Speaker 1: And those are the kinds of questions that he's going 783 00:40:21,239 --> 00:40:23,879 Speaker 1: to get tomorrow. What does he differ on? What does 784 00:40:23,920 --> 00:40:26,960 Speaker 1: he you know because of an ongoing investigation. I'm sure 785 00:40:26,960 --> 00:40:28,200 Speaker 1: I'll have a card in front of him with a 786 00:40:28,280 --> 00:40:30,600 Speaker 1: disclaimer on it. Right, what's the stuff we want to 787 00:40:30,640 --> 00:40:33,640 Speaker 1: know that he cannot tell us this week? Sure? So 788 00:40:33,800 --> 00:40:36,640 Speaker 1: I think that, I mean, I think a big question 789 00:40:36,680 --> 00:40:38,799 Speaker 1: that lawmakers will really be trying to home in on 790 00:40:38,920 --> 00:40:42,080 Speaker 1: is to what extent was this a problem with legislative 791 00:40:42,160 --> 00:40:46,200 Speaker 1: changes right that the Republicans and some Democrats supported in 792 00:40:46,200 --> 00:40:50,560 Speaker 1: twenty eighteen. That essentially, I think the idea was to 793 00:40:50,640 --> 00:40:53,440 Speaker 1: make it easier for supervisors to have more discretion when 794 00:40:53,480 --> 00:40:56,160 Speaker 1: it came to banks, that we're in this midsized category, 795 00:40:56,200 --> 00:40:58,879 Speaker 1: which of course was what SVB was in. And so 796 00:40:59,040 --> 00:41:01,760 Speaker 1: I think that Amocrats are going to try and push 797 00:41:01,840 --> 00:41:05,120 Speaker 1: Michael Barr to endorse this idea that it was these 798 00:41:05,239 --> 00:41:08,920 Speaker 1: terrible changes pushed by Republicans and I'm not going there. 799 00:41:09,160 --> 00:41:11,120 Speaker 1: He's not going to go there, right, And I think 800 00:41:11,120 --> 00:41:14,680 Speaker 1: that the Republicans will be a little more interesting to 801 00:41:14,719 --> 00:41:16,640 Speaker 1: see how how they approach it. I don't want to 802 00:41:16,640 --> 00:41:19,120 Speaker 1: do the opposite of him say that they hes never 803 00:41:19,160 --> 00:41:22,239 Speaker 1: would have been caught in a stress test under Dodd Frank, Right. Well, 804 00:41:22,280 --> 00:41:23,799 Speaker 1: I mean that's that's the thing. I think that they 805 00:41:23,880 --> 00:41:27,560 Speaker 1: probably will direct more of their their energy at you 806 00:41:27,600 --> 00:41:29,759 Speaker 1: know what Mary Daily at the San Francisco FED was 807 00:41:29,800 --> 00:41:34,319 Speaker 1: doing and the supervisory shortcomings here. So that's my sense 808 00:41:34,320 --> 00:41:38,440 Speaker 1: of how lawmakers will approach those questions. Well, it also 809 00:41:38,640 --> 00:41:41,359 Speaker 1: raises the question around the fact that this is all 810 00:41:41,440 --> 00:41:44,200 Speaker 1: happening when Michael Barr already was doing a holistic review 811 00:41:44,280 --> 00:41:47,680 Speaker 1: of bank capital requirements. I mean, this was pre bank failures, 812 00:41:47,719 --> 00:41:50,440 Speaker 1: something that on Capitol Hill, his boss, Jay Palet was 813 00:41:50,440 --> 00:41:52,840 Speaker 1: getting a lot of questions about the tailoring in the 814 00:41:52,880 --> 00:41:56,200 Speaker 1: capitol requirements. When are we going to get insight into 815 00:41:56,239 --> 00:41:59,400 Speaker 1: what he's actually thinking. When do we expect those changes 816 00:41:59,440 --> 00:42:03,160 Speaker 1: in the results of that particular review to come. Yeah, 817 00:42:03,200 --> 00:42:04,759 Speaker 1: it's a really good question. I mean, I think all 818 00:42:04,800 --> 00:42:07,160 Speaker 1: of the energy right now, of course, is focused on 819 00:42:07,440 --> 00:42:10,040 Speaker 1: what's happening in the banking system, not just what happened 820 00:42:10,040 --> 00:42:12,440 Speaker 1: a couple of weeks ago with these banks that failed 821 00:42:12,480 --> 00:42:15,520 Speaker 1: or and collapsed, but also what other vulnerabilities there are 822 00:42:15,600 --> 00:42:18,440 Speaker 1: right now. So so Michael Barr, I think he has 823 00:42:18,480 --> 00:42:21,080 Speaker 1: to lead this internal review. He has to make sure 824 00:42:21,160 --> 00:42:23,480 Speaker 1: that at the FED they're keeping a close eye on 825 00:42:23,560 --> 00:42:26,840 Speaker 1: other instability issues. So it feels a little bit like 826 00:42:27,080 --> 00:42:30,160 Speaker 1: that other review and that look at capital is perhaps 827 00:42:30,200 --> 00:42:31,879 Speaker 1: a little bit on the back burner, but right that's 828 00:42:31,920 --> 00:42:34,160 Speaker 1: something that we'll be listening for tomorrow and find out 829 00:42:34,200 --> 00:42:36,120 Speaker 1: if we get more insight on that. But I think 830 00:42:36,120 --> 00:42:38,040 Speaker 1: that it harkens back a little bit to what happened 831 00:42:38,040 --> 00:42:41,000 Speaker 1: after the financial crisis where there was there were a 832 00:42:41,040 --> 00:42:44,520 Speaker 1: lot of questions about what regulators got wrong and whether 833 00:42:44,560 --> 00:42:47,800 Speaker 1: they should maintain the kind of powers that they had 834 00:42:48,120 --> 00:42:51,080 Speaker 1: in The FED ended up consolidating a lot of authority 835 00:42:51,200 --> 00:42:54,600 Speaker 1: over bank regulation and supervision. And there are definitely folks 836 00:42:54,640 --> 00:42:57,000 Speaker 1: out there now who think that that was a mistake 837 00:42:57,040 --> 00:42:59,640 Speaker 1: and it ought to be revisited. So that will also 838 00:42:59,680 --> 00:43:02,839 Speaker 1: be interesting to hear from from lawmakers how how they 839 00:43:02,920 --> 00:43:04,759 Speaker 1: view that and whether they ask Michael bar to sort 840 00:43:04,760 --> 00:43:07,640 Speaker 1: of defend the Fed's role, um, you know, more broadly 841 00:43:07,719 --> 00:43:11,640 Speaker 1: in these in supervision. Kaylie mentioned there were some some 842 00:43:11,680 --> 00:43:14,640 Speaker 1: brief comments from Karine Jehan Pierre today on stabilizing banks. 843 00:43:14,680 --> 00:43:17,880 Speaker 1: Does the administration believe the worst of the crisis is 844 00:43:17,880 --> 00:43:22,040 Speaker 1: now behind us? What needs to be the posture of 845 00:43:22,080 --> 00:43:24,560 Speaker 1: the administration from here? They're going to be watching these 846 00:43:24,600 --> 00:43:26,520 Speaker 1: hearings next couple of days. They feel like their job 847 00:43:26,600 --> 00:43:31,080 Speaker 1: is done? Well, I don't, I don't know. I think 848 00:43:31,520 --> 00:43:33,440 Speaker 1: I think it remains to be seen. Right, It's it's 849 00:43:33,440 --> 00:43:37,080 Speaker 1: really important. I think that the you know, the regulators, 850 00:43:37,120 --> 00:43:39,520 Speaker 1: into some extent, the administration, they don't want to scare 851 00:43:39,520 --> 00:43:41,480 Speaker 1: people or they don't want any more panic. And I 852 00:43:41,520 --> 00:43:43,640 Speaker 1: do think that there's a view in the administration that 853 00:43:43,680 --> 00:43:46,720 Speaker 1: a lot of what's happening is psychological to some extent, 854 00:43:47,040 --> 00:43:50,279 Speaker 1: a lot of the concern by depositors um and we've 855 00:43:50,320 --> 00:43:52,600 Speaker 1: seen officials like Janet Yellen try to come out and 856 00:43:52,640 --> 00:43:55,680 Speaker 1: stumble a little bit and sort of explaining how the 857 00:43:55,680 --> 00:43:58,880 Speaker 1: administration is viewing this issue, whether all deposits are protected, 858 00:43:58,920 --> 00:44:01,240 Speaker 1: what they would do if there's more there are more vulnerabilities, 859 00:44:01,440 --> 00:44:04,359 Speaker 1: So they have to sort of express, you know, confidence 860 00:44:04,360 --> 00:44:06,680 Speaker 1: that they've got to handle on this. But you know, 861 00:44:06,719 --> 00:44:09,360 Speaker 1: they don't want to be too sanguine either, because I 862 00:44:09,400 --> 00:44:11,319 Speaker 1: think there is still a lot of uncertainty about what's 863 00:44:11,440 --> 00:44:14,760 Speaker 1: what's to come. So it's a very careful line to walk. Character. 864 00:44:14,800 --> 00:44:16,239 Speaker 1: If that's why we didn't hear from the president of 865 00:44:16,239 --> 00:44:17,960 Speaker 1: this morning, I thought when I saw the headlines that 866 00:44:18,000 --> 00:44:19,879 Speaker 1: you know what, he'll come out maybe like two weeks ago, 867 00:44:20,040 --> 00:44:23,120 Speaker 1: nine am before the market's just to push that message 868 00:44:23,120 --> 00:44:25,160 Speaker 1: home that you know what, we took care of it. 869 00:44:25,200 --> 00:44:26,919 Speaker 1: You don't you don't have to worry about your money. 870 00:44:27,120 --> 00:44:29,479 Speaker 1: But it was silent. Yeah, that's a really good point. 871 00:44:29,640 --> 00:44:32,040 Speaker 1: But also to your point, Kate, about the kind of 872 00:44:32,080 --> 00:44:35,440 Speaker 1: consistent message and projecting calmn, sound and resilient. We have 873 00:44:35,560 --> 00:44:40,040 Speaker 1: heard that countless time, and including from FED share J. Powell, 874 00:44:40,080 --> 00:44:43,160 Speaker 1: who talked about the soundness and resilience of the US 875 00:44:43,239 --> 00:44:46,080 Speaker 1: banking system after the FED did hike rates last week. 876 00:44:46,120 --> 00:44:48,560 Speaker 1: I also have to wonder how those testifying tomorrow maybe 877 00:44:48,600 --> 00:44:53,279 Speaker 1: pushed about the impact of continued tightening monetary policy on 878 00:44:53,320 --> 00:44:56,120 Speaker 1: the banking system now as we go forward, Right, it 879 00:44:56,160 --> 00:44:59,800 Speaker 1: feels like that's kind of the bigger question that obviously 880 00:44:59,840 --> 00:45:02,440 Speaker 1: the FED has to contend with, and that others, including 881 00:45:02,719 --> 00:45:05,520 Speaker 1: ourselves reporters here on the FED team, are focusing on 882 00:45:05,920 --> 00:45:09,520 Speaker 1: what are the broader economic implications And so right there 883 00:45:09,920 --> 00:45:12,480 Speaker 1: might not be a risk of further bank failures. They 884 00:45:12,560 --> 00:45:16,880 Speaker 1: might have that issue and that potential contagion sort of contained, 885 00:45:16,880 --> 00:45:18,919 Speaker 1: and I think they feel pretty good that they do. 886 00:45:19,440 --> 00:45:21,719 Speaker 1: But what are the knock on effects even if there 887 00:45:21,760 --> 00:45:24,799 Speaker 1: are no more bank failures? How do banks respond, how 888 00:45:24,880 --> 00:45:27,640 Speaker 1: do credit conditions tighten, and what does that mean for 889 00:45:27,680 --> 00:45:29,399 Speaker 1: the economy and what does it mean for the FED 890 00:45:29,440 --> 00:45:31,359 Speaker 1: and FED policy. As we know, over one hundred billion 891 00:45:31,400 --> 00:45:35,200 Speaker 1: dollars in bank deposits moved from smaller banks to bigger ones. 892 00:45:35,239 --> 00:45:37,319 Speaker 1: According to moodies. I think it was one hundred and 893 00:45:37,360 --> 00:45:41,040 Speaker 1: nine billion affair. Remember correctly, we were talking about that earlier. 894 00:45:41,080 --> 00:45:43,720 Speaker 1: But if no more banks fail, and if we're feeling 895 00:45:43,760 --> 00:45:46,600 Speaker 1: pretty good about the way SVB worked out, I keep 896 00:45:46,640 --> 00:45:49,839 Speaker 1: asking people, we're done right, nothing's happening in Congress. It's 897 00:45:49,840 --> 00:45:52,520 Speaker 1: going to change any rules of the road here. If 898 00:45:52,560 --> 00:45:56,520 Speaker 1: they think there's no further contagion. Yeah, I think you can. 899 00:45:56,680 --> 00:45:58,319 Speaker 1: By the way, I'm totally putting you on the spot. 900 00:45:58,320 --> 00:46:01,040 Speaker 1: You could look into your crystal ball if you choose. Well. 901 00:46:01,080 --> 00:46:03,640 Speaker 1: I certainly think there are some lawmakers that will continue 902 00:46:03,719 --> 00:46:05,960 Speaker 1: using this episode as a reason to try to push 903 00:46:06,000 --> 00:46:08,840 Speaker 1: a legislative changes. But right, will there be broad support 904 00:46:08,960 --> 00:46:11,839 Speaker 1: if things calm down? Yeah? Probably not. I think that's 905 00:46:11,840 --> 00:46:14,879 Speaker 1: fair to say. So what you see is what you get, Kaylee. Yeah, well, 906 00:46:14,880 --> 00:46:17,040 Speaker 1: I can't wait to see what we get all tomorrow 907 00:46:17,080 --> 00:46:20,040 Speaker 1: And how much of each five minutes that lawmakers are 908 00:46:20,040 --> 00:46:22,880 Speaker 1: allotted to ask questions of those testifying, how much of 909 00:46:22,880 --> 00:46:25,759 Speaker 1: it is actually going to be questions? Right? How many 910 00:46:25,920 --> 00:46:28,920 Speaker 1: times will we hear the word transitory? How about that 911 00:46:28,960 --> 00:46:31,040 Speaker 1: one that could be a drinking game tomorrow, because that's 912 00:46:31,040 --> 00:46:34,360 Speaker 1: been another part of the knock on the fed here right, 913 00:46:34,400 --> 00:46:37,000 Speaker 1: as if he started earlier, this might not have happened. Yeah, 914 00:46:37,040 --> 00:46:41,040 Speaker 1: I think there's that's definitely going to come up, and 915 00:46:41,160 --> 00:46:44,760 Speaker 1: I think it will be interesting. You know, you always 916 00:46:44,760 --> 00:46:46,920 Speaker 1: when we watch these hearings, you expect some of the 917 00:46:46,960 --> 00:46:48,920 Speaker 1: newsier moments to happen at the very beginning, but some 918 00:46:48,960 --> 00:46:51,000 Speaker 1: of the real interesting stuff can come at the end 919 00:46:51,040 --> 00:46:53,480 Speaker 1: where they get into these sort of second order issues, 920 00:46:53,520 --> 00:46:55,640 Speaker 1: and I definitely think that's going to be one of 921 00:46:55,640 --> 00:46:58,440 Speaker 1: That's a good pro tip if you're watching, by the way, 922 00:46:58,520 --> 00:47:02,040 Speaker 1: tune in after the chair A great to have you 923 00:47:02,080 --> 00:47:03,879 Speaker 1: come in on what I know as a busy time. 924 00:47:04,160 --> 00:47:05,960 Speaker 1: Thanks for the time today on sound Off.