1 00:00:00,880 --> 00:00:04,360 Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us 2 00:00:04,400 --> 00:00:07,600 Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the 3 00:00:07,640 --> 00:00:10,760 Speaker 1: iHeartRadio app and the Bloomberg Business app, or listen on 4 00:00:10,800 --> 00:00:12,960 Speaker 1: demand wherever you get your podcasts. 5 00:00:13,320 --> 00:00:17,000 Speaker 2: Welcome to the Tuesday edition of Sound on. Washington is girding, 6 00:00:17,720 --> 00:00:20,119 Speaker 2: just like the financial markets for today's meeting at the 7 00:00:20,120 --> 00:00:23,040 Speaker 2: White House, the second round for President Biden, Speaker McCarthy, 8 00:00:23,440 --> 00:00:27,080 Speaker 2: the rest of the congressional leadership, and the staffers. I 9 00:00:27,120 --> 00:00:29,319 Speaker 2: see Kamala Harris is in this meeting as well. Based 10 00:00:29,320 --> 00:00:32,960 Speaker 2: on the guidance all has. Treasury Secretary Janet Yellen sounds 11 00:00:33,000 --> 00:00:35,040 Speaker 2: the alarm again. That is her job here on a 12 00:00:35,120 --> 00:00:38,320 Speaker 2: daily basis, spoke earlier today at the Independent Bankers of 13 00:00:38,360 --> 00:00:39,920 Speaker 2: America's summit Here in Washington. 14 00:00:40,040 --> 00:00:45,960 Speaker 3: US economy hangs in the balance. The livelihood livelihoods of 15 00:00:46,120 --> 00:00:51,519 Speaker 3: millions of Americans do too, So there's no time to waste. 16 00:00:51,920 --> 00:00:56,280 Speaker 3: Congress should address the limit as soon as possible. 17 00:00:56,400 --> 00:00:58,520 Speaker 2: It's clearly no time to waste. But if you've been 18 00:00:58,560 --> 00:01:02,520 Speaker 2: paying attention, you do know that both sides have started 19 00:01:02,560 --> 00:01:05,959 Speaker 2: identifying elements of a possible deal. Now, look, this whole 20 00:01:05,959 --> 00:01:08,720 Speaker 2: thing could blow up still, but there is at least 21 00:01:08,800 --> 00:01:12,280 Speaker 2: a punch list. Clawback unspent COVID funding from the states, 22 00:01:12,680 --> 00:01:15,039 Speaker 2: set the budget caps. There's a whole bunch to talk 23 00:01:15,080 --> 00:01:19,880 Speaker 2: about there, address permitting reform, and increase work requirements for 24 00:01:19,920 --> 00:01:24,000 Speaker 2: food stamps and other social programs. Something Speaker McCarthy talked 25 00:01:24,000 --> 00:01:25,559 Speaker 2: about with reporters last evening. 26 00:01:25,720 --> 00:01:28,960 Speaker 4: What work requirements actually do help people get a job? 27 00:01:29,920 --> 00:01:33,200 Speaker 4: Every data point shows that and it helps people move forward. 28 00:01:33,560 --> 00:01:38,959 Speaker 4: So the public wants it. Both parties wanted the idea 29 00:01:39,040 --> 00:01:41,400 Speaker 4: that they want to put us into a default because 30 00:01:41,400 --> 00:01:44,240 Speaker 4: they will not work with on That is ludicrous to me. 31 00:01:44,800 --> 00:01:47,360 Speaker 5: And you're talking about snap. Are you which program you're 32 00:01:47,360 --> 00:01:48,240 Speaker 5: talking about specifically? 33 00:01:48,920 --> 00:01:50,760 Speaker 4: We're talking about all the programs. 34 00:01:50,320 --> 00:01:55,000 Speaker 2: All the programs. Indeed, progressives do not like this idea. 35 00:01:55,120 --> 00:01:58,760 Speaker 2: And the President has drawn a line at Medicare. We'll 36 00:01:58,800 --> 00:02:03,400 Speaker 2: see if that's clarified at all in this meeting this evening. 37 00:02:03,440 --> 00:02:06,200 Speaker 2: So how urgent is this session today? And must there 38 00:02:06,240 --> 00:02:08,720 Speaker 2: be a deal before the President flies to Japan tomorrow. 39 00:02:08,800 --> 00:02:12,239 Speaker 2: That's where we begin with Max Bauchus, former Democratic senator, 40 00:02:12,320 --> 00:02:15,359 Speaker 2: former Ambassador to China who chaired the Senate Finance Committee 41 00:02:15,360 --> 00:02:18,600 Speaker 2: and survived a few of these debt ceiling battles. Mister ambassador, 42 00:02:19,120 --> 00:02:22,000 Speaker 2: welcome back. How would you frame this session today? How 43 00:02:22,000 --> 00:02:24,600 Speaker 2: important is it for them to find a framework before 44 00:02:24,639 --> 00:02:25,960 Speaker 2: the president leaves the country. 45 00:02:27,120 --> 00:02:30,799 Speaker 6: I think it's critical, and I do think they probably 46 00:02:30,880 --> 00:02:33,359 Speaker 6: will reach a deal before the president does leave. It's 47 00:02:33,400 --> 00:02:37,000 Speaker 6: critical because the president really in a certain sense, can't 48 00:02:37,080 --> 00:02:39,680 Speaker 6: leave until it deals done. And if the longer this 49 00:02:40,520 --> 00:02:43,280 Speaker 6: lays out, the US can't get his act together, the 50 00:02:43,320 --> 00:02:46,880 Speaker 6: more we egg on our face worldwide with Japan and 51 00:02:46,960 --> 00:02:51,840 Speaker 6: G seven and other countries. You know, basically, this happens frequently. 52 00:02:51,919 --> 00:02:55,760 Speaker 6: It's a game at chicken, and usually both sides blake 53 00:02:55,840 --> 00:02:59,240 Speaker 6: near the end. This time it's a little different. The 54 00:02:59,320 --> 00:03:04,480 Speaker 6: country is much more polarized. McCarthy got his budget passed 55 00:03:04,720 --> 00:03:09,440 Speaker 6: housepy only two vote margin. Add to that, President, former 56 00:03:09,480 --> 00:03:13,320 Speaker 6: President Trump is going to urged and egged on to the 57 00:03:13,280 --> 00:03:16,519 Speaker 6: House Republic as to hold fast. And so it's even 58 00:03:16,560 --> 00:03:19,639 Speaker 6: though it's these games at chicken tend to lay out 59 00:03:19,680 --> 00:03:22,440 Speaker 6: well at the last minute, it's a little more dicey 60 00:03:22,480 --> 00:03:23,000 Speaker 6: at this point. 61 00:03:23,400 --> 00:03:27,600 Speaker 2: It just sure feels dicey, and the markets agree with you, Ambassador. 62 00:03:27,680 --> 00:03:31,359 Speaker 2: I wonder your thoughts on the items that we're hearing 63 00:03:31,400 --> 00:03:34,920 Speaker 2: about here. Seems like bringing back clawing back COVID funding 64 00:03:34,960 --> 00:03:36,880 Speaker 2: is kind of a no brainer. Everyone's on the same page. 65 00:03:37,240 --> 00:03:39,640 Speaker 2: Setting budget caps is where the real fight is going 66 00:03:39,720 --> 00:03:43,560 Speaker 2: to be, and maybe work requirements are to you know 67 00:03:43,600 --> 00:03:47,200 Speaker 2: what it's like to try to straddle both sides here, 68 00:03:47,640 --> 00:03:50,880 Speaker 2: and the President has some very conserved concern progressives in 69 00:03:50,920 --> 00:03:54,680 Speaker 2: his caucus in his party about what this might mean 70 00:03:55,280 --> 00:03:57,840 Speaker 2: for food stamps and other programs. Are you worried about that? 71 00:03:59,520 --> 00:04:03,000 Speaker 6: Yes, you're right about COVID, that's basically a no rater 72 00:04:03,440 --> 00:04:06,200 Speaker 6: budget caps, so you know, I think they'll find a 73 00:04:06,200 --> 00:04:09,680 Speaker 6: way to deal with that, even though the limit camps 74 00:04:09,720 --> 00:04:13,400 Speaker 6: are a bit achronistic and in this modern times, I 75 00:04:13,440 --> 00:04:17,920 Speaker 6: think work requirements going more difficult. But I think both 76 00:04:17,960 --> 00:04:21,919 Speaker 6: sides have to remember that the compromises very much in 77 00:04:22,400 --> 00:04:24,640 Speaker 6: not only the country's best interest, but add to that, 78 00:04:25,040 --> 00:04:27,800 Speaker 6: people tend to forget the United States is going to 79 00:04:27,800 --> 00:04:31,560 Speaker 6: still survive if there's a compromise. Members of the House, the Senate, 80 00:04:31,600 --> 00:04:34,719 Speaker 6: publics and democratsy, they sure they're fighting hard and so forth, 81 00:04:34,760 --> 00:04:37,919 Speaker 6: but it is hard to compromise. But once the compromis 82 00:04:37,960 --> 00:04:41,560 Speaker 6: has reached the airs out of balloon, everything's back to 83 00:04:41,600 --> 00:04:44,719 Speaker 6: normal again, and tomorrow's another day. So I do think 84 00:04:44,720 --> 00:04:45,479 Speaker 6: they'll compromise. 85 00:04:46,240 --> 00:04:48,240 Speaker 2: You were, of course, our ambassador to China, and you 86 00:04:48,240 --> 00:04:51,239 Speaker 2: know how important these foreign trips are for the commander 87 00:04:51,279 --> 00:04:53,280 Speaker 2: in chief. It's a G seven we're talking about. He's 88 00:04:53,279 --> 00:04:57,000 Speaker 2: flying off to Hiroshima, at least scheduled to tomorrow. They're 89 00:04:57,040 --> 00:04:59,760 Speaker 2: having questions about whether he should go. Ambassador. Here's what 90 00:04:59,800 --> 00:05:01,800 Speaker 2: the Speaker said about this last night. 91 00:05:01,920 --> 00:05:03,480 Speaker 4: The president of the President of United States, he can 92 00:05:03,520 --> 00:05:05,320 Speaker 4: make that decision one way or another. But all I 93 00:05:05,360 --> 00:05:07,400 Speaker 4: know is, we've got sixteen more days to go. I 94 00:05:07,440 --> 00:05:09,840 Speaker 4: don't think i'd spend eight days some out of the country. 95 00:05:10,160 --> 00:05:13,240 Speaker 4: I think the country wants an American president focused on 96 00:05:13,360 --> 00:05:16,200 Speaker 4: solving American problems. That's exactly what the House is doing. 97 00:05:16,200 --> 00:05:18,680 Speaker 2: Of course, the Speaker is going to say that, Ambassador, 98 00:05:18,680 --> 00:05:20,200 Speaker 2: what do you think about this trip. Would it be 99 00:05:20,200 --> 00:05:23,479 Speaker 2: a bold statement in a good way for the President 100 00:05:23,480 --> 00:05:25,240 Speaker 2: to stay right here till it's hammered out or does 101 00:05:25,279 --> 00:05:28,279 Speaker 2: that create a new sense of urgency and maybe concerned 102 00:05:28,279 --> 00:05:29,320 Speaker 2: on the other side of the world. 103 00:05:30,400 --> 00:05:36,480 Speaker 6: Well, frankly, it's high stakes. I think that they should 104 00:05:36,560 --> 00:05:39,920 Speaker 6: do whatever is necessary to reach a deal, to compromise 105 00:05:40,080 --> 00:05:43,640 Speaker 6: so that the president can go because that will certainly 106 00:05:43,760 --> 00:05:47,520 Speaker 6: enhance America's prestige in the world. We must remember that 107 00:05:47,800 --> 00:05:52,839 Speaker 6: we are very inrelated certainly economically around the world. China 108 00:05:52,920 --> 00:05:56,119 Speaker 6: number one, but Japan and other G seven countries as well. 109 00:05:56,480 --> 00:05:58,480 Speaker 6: So if I were the president, I'd go the extra 110 00:05:58,560 --> 00:06:00,200 Speaker 6: mile to find some way to get a deal I 111 00:06:00,200 --> 00:06:02,599 Speaker 6: could go over. In addition to that, though, I think 112 00:06:02,640 --> 00:06:07,320 Speaker 6: that House Republicans deep down know what's best the United 113 00:06:07,360 --> 00:06:10,040 Speaker 6: States is to reach a deal. They do not want 114 00:06:10,080 --> 00:06:12,680 Speaker 6: to be the ones that are portrayed as the spoilers. 115 00:06:12,960 --> 00:06:16,000 Speaker 6: This is mart icy that summarize. But I do think 116 00:06:16,040 --> 00:06:16,760 Speaker 6: they'll reach a deal. 117 00:06:18,520 --> 00:06:20,680 Speaker 2: That's really nice to hear. By the way, and our 118 00:06:20,720 --> 00:06:22,880 Speaker 2: listeners should know that you have been through a couple 119 00:06:22,880 --> 00:06:24,960 Speaker 2: of these, and by that I mean nineteen ninety eight, 120 00:06:25,000 --> 00:06:27,800 Speaker 2: two eight, twenty eleven, the fiscal cliff that was the 121 00:06:27,839 --> 00:06:30,120 Speaker 2: big one that we like to compare all. 122 00:06:30,000 --> 00:06:30,200 Speaker 7: Of this. 123 00:06:31,800 --> 00:06:36,280 Speaker 2: Eleven that that was the time. That was the fun time, Ambassador, 124 00:06:36,360 --> 00:06:38,440 Speaker 2: So bring us back, because I keep hearing this is 125 00:06:38,480 --> 00:06:41,200 Speaker 2: not twenty eleven, and I realize a lot of things 126 00:06:41,200 --> 00:06:44,640 Speaker 2: are different here, including the polarization that you just pointed out. 127 00:06:44,760 --> 00:06:47,120 Speaker 2: Is it more difficult this time to come to a deal? 128 00:06:47,880 --> 00:06:51,160 Speaker 6: I think it is. It is because the countries were polarized. 129 00:06:51,480 --> 00:06:55,120 Speaker 6: House Republicans are much more extreme, House Democrats are much 130 00:06:55,200 --> 00:07:00,120 Speaker 6: more extreme. Is very, very difficult, but you know, and 131 00:07:00,200 --> 00:07:02,520 Speaker 6: to run for office, hire out to be leaders, and 132 00:07:02,760 --> 00:07:04,760 Speaker 6: Biden's got to figure out a way to get this 133 00:07:04,839 --> 00:07:08,640 Speaker 6: thing put together. And McCarthy has certain responsibilities as well. 134 00:07:09,040 --> 00:07:11,920 Speaker 6: And to remember, remember two thousand Eve was so ugly, 135 00:07:12,000 --> 00:07:15,360 Speaker 6: you know, people laid off, employees, laid off, just that's 136 00:07:15,400 --> 00:07:17,760 Speaker 6: such a bad taste in people's mouths. Light problem though, 137 00:07:17,880 --> 00:07:20,400 Speaker 6: is that twenty eleven, and that's about twelve years ago. 138 00:07:20,520 --> 00:07:24,600 Speaker 6: Sometimes people have short memories. Good get how bad twenty eleven. 139 00:07:25,040 --> 00:07:27,640 Speaker 6: But the more they're reminded of that, I think they'll 140 00:07:27,640 --> 00:07:28,360 Speaker 6: reach a dale. 141 00:07:30,440 --> 00:07:32,720 Speaker 2: This is all happening, of course, against the backdrop of 142 00:07:32,760 --> 00:07:37,800 Speaker 2: the Federal Reserve trying to beat inflation and a nation's 143 00:07:37,840 --> 00:07:41,360 Speaker 2: capital trying to understand what happened with the banks that failed. 144 00:07:41,520 --> 00:07:45,440 Speaker 2: A couple of weeks back. There's another round of hearings, Ambassador, 145 00:07:45,440 --> 00:07:50,800 Speaker 2: including your old committee, the Senate Financial Services Finance Committee, 146 00:07:50,800 --> 00:07:52,920 Speaker 2: I should say, is digging into this stuff. And we've 147 00:07:52,920 --> 00:07:57,160 Speaker 2: got executives from SVB, the former bank, the former signature bank, 148 00:07:57,200 --> 00:08:00,840 Speaker 2: we've got regulators like Michael Barr from the Fed. Is 149 00:08:00,880 --> 00:08:04,960 Speaker 2: this just one big theatrical exercise because lawmakers seem to 150 00:08:04,960 --> 00:08:07,760 Speaker 2: not agree on any of the remedies that have been 151 00:08:07,760 --> 00:08:10,400 Speaker 2: put forth here to prevent another bank failure, and we 152 00:08:10,440 --> 00:08:14,120 Speaker 2: can't even get a budget written. What do you think, Well. 153 00:08:15,160 --> 00:08:17,440 Speaker 6: It's important to have the hearing. It's port to ask 154 00:08:17,480 --> 00:08:21,400 Speaker 6: the questions, ask the questions of the Silicon Valley Bank 155 00:08:21,480 --> 00:08:25,480 Speaker 6: and the public bank of officers and of the regulators, etc. 156 00:08:27,280 --> 00:08:30,920 Speaker 6: I think, frankly, the mistake made was the regulators just 157 00:08:31,000 --> 00:08:33,840 Speaker 6: did not pay sufficient attention to the regional banks compared 158 00:08:33,880 --> 00:08:36,760 Speaker 6: with the big banks, and second and doing so and 159 00:08:36,880 --> 00:08:40,360 Speaker 6: Congress and doing so did not really posts and the 160 00:08:40,480 --> 00:08:44,440 Speaker 6: Fed significant capital requirements on the regionals as they have 161 00:08:44,559 --> 00:08:47,640 Speaker 6: on the big banks that I think will hop out 162 00:08:47,840 --> 00:08:50,120 Speaker 6: now that the big debate and whether deposits should be 163 00:08:50,120 --> 00:08:54,360 Speaker 6: insured or not, it's a little dicey. It turns out 164 00:08:54,400 --> 00:08:57,400 Speaker 6: Silicon Valley and depositors came out okay. After the fat 165 00:08:57,559 --> 00:09:01,160 Speaker 6: change its mind said ensure all depositors, the bondholders, and 166 00:09:01,200 --> 00:09:03,200 Speaker 6: the investors did not come out okay. And that's a 167 00:09:03,240 --> 00:09:06,440 Speaker 6: good result because they that should be holding the bank. 168 00:09:06,600 --> 00:09:10,960 Speaker 6: So it's this is America, that is, we have hearings, 169 00:09:11,280 --> 00:09:14,760 Speaker 6: we ask questions, and then it's up to the decision 170 00:09:14,840 --> 00:09:18,880 Speaker 6: makers Congress and the regulators say okay, now what's best. 171 00:09:18,880 --> 00:09:21,280 Speaker 6: And I just hope that they just keep in mind 172 00:09:21,360 --> 00:09:23,839 Speaker 6: which what's best for the country and not get too 173 00:09:23,880 --> 00:09:26,600 Speaker 6: wrapped around the axle on politics one way or the other. 174 00:09:26,679 --> 00:09:31,920 Speaker 6: Because Americans really care about their livelihood and Congress doing 175 00:09:31,960 --> 00:09:34,960 Speaker 6: what's right, they care much less about the politics. 176 00:09:35,280 --> 00:09:38,120 Speaker 2: It's kind of amazing the number of cross currents that 177 00:09:38,160 --> 00:09:40,199 Speaker 2: we're talking about here. All of them bring a certain 178 00:09:40,280 --> 00:09:42,880 Speaker 2: level of risk. And when you consider the banking crisis, 179 00:09:43,200 --> 00:09:46,720 Speaker 2: when you consider the fight against inflation, predictions of a 180 00:09:46,760 --> 00:09:51,319 Speaker 2: possible recession here we haven't even mentioned the geopolitical world 181 00:09:51,320 --> 00:09:54,440 Speaker 2: that you specialized in, whether it's Ukraine, China, or Russia. 182 00:09:54,920 --> 00:09:57,880 Speaker 2: Do all of these add up to create an even 183 00:09:58,040 --> 00:10:01,760 Speaker 2: greater urgency for us to solve this debt ceiling issue. 184 00:10:02,240 --> 00:10:05,080 Speaker 2: It feels more precarious than ever. Do you feel that way? 185 00:10:05,880 --> 00:10:06,080 Speaker 8: I do. 186 00:10:07,280 --> 00:10:10,599 Speaker 6: It's it's it's critical because, as a secretary Yellen have 187 00:10:10,679 --> 00:10:13,400 Speaker 6: said and others have said, if it's not my God, 188 00:10:13,559 --> 00:10:18,600 Speaker 6: it's it's chaos, it's it's a catastrophe. Dollar will plummet, 189 00:10:18,960 --> 00:10:22,240 Speaker 6: the statue of the US will decline precipitously, There's no question, 190 00:10:22,800 --> 00:10:27,360 Speaker 6: because the consequences are so dire. I think that's an 191 00:10:27,559 --> 00:10:29,240 Speaker 6: added impetus to get this done. 192 00:10:30,720 --> 00:10:35,280 Speaker 2: Lastly, Ambassador, you've been to your share of G seven's 193 00:10:35,280 --> 00:10:37,440 Speaker 2: and dealt with many of the leaders the President will 194 00:10:37,440 --> 00:10:40,360 Speaker 2: be talking to, assuming he goes on this trip. What's 195 00:10:40,400 --> 00:10:43,040 Speaker 2: he going to be hearing from his counterparts and other 196 00:10:43,120 --> 00:10:45,480 Speaker 2: nations about this debt ceiling issue? Will they express that 197 00:10:45,520 --> 00:10:46,480 Speaker 2: concern in person? 198 00:10:48,120 --> 00:10:50,240 Speaker 6: Well, I think there's a there's a big issue here. 199 00:10:51,160 --> 00:10:55,160 Speaker 6: Overriding issue. That is it's deficit spending. It's not just 200 00:10:55,200 --> 00:10:59,199 Speaker 6: the United States, but other major countries in the world 201 00:10:59,320 --> 00:11:02,160 Speaker 6: trying to hear I've been spending a lot of money, 202 00:11:02,480 --> 00:11:05,800 Speaker 6: and our debt percent of GDP is rising significantly. I 203 00:11:05,800 --> 00:11:07,560 Speaker 6: saw someone astibate that it could be as high as 204 00:11:07,600 --> 00:11:11,600 Speaker 6: seven percent by the end of this decade. And if 205 00:11:11,800 --> 00:11:15,240 Speaker 6: the US it's the pandemic spending, it's you know, although 206 00:11:15,280 --> 00:11:18,760 Speaker 6: the Inflation Reduction Act is supposed to reduce the deficite, 207 00:11:18,840 --> 00:11:21,560 Speaker 6: actually going to increase the depicite out of that chips, 208 00:11:21,760 --> 00:11:25,079 Speaker 6: infrastructure and so forth. And China's got to spend a 209 00:11:25,080 --> 00:11:30,199 Speaker 6: lot of money onto some housing industry. It's they're way 210 00:11:30,240 --> 00:11:34,840 Speaker 6: over leveraged. So it's the bigger overrun issue is excessive spending. 211 00:11:34,920 --> 00:11:38,079 Speaker 6: And I very much expect, hope that that's going to 212 00:11:38,120 --> 00:11:41,240 Speaker 6: be addressed significantly because governments have to begin to get 213 00:11:41,559 --> 00:11:45,040 Speaker 6: their finances under control, otherwise that could be the next 214 00:11:45,120 --> 00:11:49,040 Speaker 6: big bubble that's going to cause some kind of collapse here. 215 00:11:49,520 --> 00:11:51,400 Speaker 2: It's the one thing we all seem to have in 216 00:11:51,480 --> 00:11:54,679 Speaker 2: common in the industrialized world. I guess, Ambassador, what a 217 00:11:54,720 --> 00:11:56,760 Speaker 2: great conversation. I'm glad you could join me today. Max 218 00:11:56,800 --> 00:11:59,240 Speaker 2: Bock is the former Ambassador to China, former Senator from 219 00:11:59,280 --> 00:12:02,720 Speaker 2: Montana who shared the Senate Finance Committee. As we get 220 00:12:02,760 --> 00:12:05,520 Speaker 2: things rolling here on Bloomberg Sound On, we'll take a 221 00:12:05,559 --> 00:12:07,560 Speaker 2: swing at the panel while we have some time here. 222 00:12:07,880 --> 00:12:11,400 Speaker 2: Rick Davis and Genie Shanz no Bloomberg Politics contributors with 223 00:12:11,600 --> 00:12:14,839 Speaker 2: us to share some insights here, and namely the debt ceiling. 224 00:12:15,080 --> 00:12:16,720 Speaker 2: I'd love to hear from you both as we get 225 00:12:16,800 --> 00:12:20,520 Speaker 2: ready for this meeting. Genie, you know we've talked about this. 226 00:12:20,679 --> 00:12:22,880 Speaker 2: We talked about it yesterday. Now that we're actually here 227 00:12:23,400 --> 00:12:25,679 Speaker 2: and Speaker McCarthy threw down the markers that he did 228 00:12:25,800 --> 00:12:28,840 Speaker 2: last night, and he's suggesting that no progress has been made. 229 00:12:29,360 --> 00:12:31,319 Speaker 2: Is this actually the meeting where this is solved? 230 00:12:32,400 --> 00:12:35,240 Speaker 9: I don't think so, at least that is what we 231 00:12:35,360 --> 00:12:37,400 Speaker 9: are hearing. And I agree with the ambassador. It is 232 00:12:37,400 --> 00:12:39,520 Speaker 9: a critical point. It's a critical time, and I'm glad 233 00:12:39,559 --> 00:12:41,960 Speaker 9: to hear he's optimistic this is going to get done, 234 00:12:42,320 --> 00:12:43,079 Speaker 9: and I hope. 235 00:12:42,920 --> 00:12:43,360 Speaker 10: He is right. 236 00:12:43,440 --> 00:12:45,599 Speaker 9: We keep hearing, you know, things look worse when the 237 00:12:45,679 --> 00:12:48,520 Speaker 9: storm gets worse with Congress before they solve this. But 238 00:12:48,679 --> 00:12:51,319 Speaker 9: the reality is there's very few people that we hear 239 00:12:51,400 --> 00:12:53,440 Speaker 9: from who say they think out of the meeting today 240 00:12:53,920 --> 00:12:56,480 Speaker 9: that there will be an agreement. Now, hopefully we're wrong, 241 00:12:56,800 --> 00:12:59,640 Speaker 9: but these sites are so far apart it's hard to 242 00:12:59,679 --> 00:13:03,040 Speaker 9: image how they actually would come to an agreement that 243 00:13:03,200 --> 00:13:05,120 Speaker 9: could be sold to their respective caucuses. 244 00:13:06,040 --> 00:13:08,800 Speaker 2: What's your thought here walking into this meeting, Rick, will 245 00:13:09,080 --> 00:13:11,000 Speaker 2: there be significant progress today? 246 00:13:12,280 --> 00:13:15,160 Speaker 11: Yeah? I think by the rules of Capitol Hill, negotiating 247 00:13:15,200 --> 00:13:17,599 Speaker 11: with the administration. When you have a principal's meeting, you 248 00:13:17,720 --> 00:13:20,360 Speaker 11: have to show progress. And so the staff has been 249 00:13:20,440 --> 00:13:24,599 Speaker 11: under enormous pressure to find some progress in the negotiations. 250 00:13:24,960 --> 00:13:27,800 Speaker 11: And so even though I think the Speaker has been 251 00:13:27,920 --> 00:13:34,920 Speaker 11: using his bullypulpit to push for a more draconian proposal 252 00:13:35,040 --> 00:13:38,400 Speaker 11: than I think the administration wants, I think you have 253 00:13:38,640 --> 00:13:42,360 Speaker 11: to actually show progress today. So and I think the 254 00:13:42,440 --> 00:13:44,439 Speaker 11: Speaker knows that he has to come out of there 255 00:13:44,960 --> 00:13:47,360 Speaker 11: with like a win in his hands, and I think 256 00:13:47,440 --> 00:13:50,360 Speaker 11: Biden understands that too. So my guess is on a 257 00:13:50,480 --> 00:13:53,400 Speaker 11: number of these issues they will find common ground and 258 00:13:53,480 --> 00:13:55,319 Speaker 11: can talk about that at the end of the day. 259 00:13:56,120 --> 00:13:58,120 Speaker 11: Whether or not that's enough to make a final deal, 260 00:13:58,760 --> 00:14:02,839 Speaker 11: who knows, Because you do have this complication that the 261 00:14:02,960 --> 00:14:05,079 Speaker 11: Speaker has to try to figure out how to get 262 00:14:05,600 --> 00:14:08,480 Speaker 11: a vast majority of his caucus because the Democrats simply 263 00:14:08,480 --> 00:14:11,120 Speaker 11: aren't going to walk the plank for a Republican speaker 264 00:14:11,160 --> 00:14:12,480 Speaker 11: who can't deliver his own caucus. 265 00:14:12,880 --> 00:14:15,120 Speaker 2: Rick makes a few good points there, Genie, doesn't it 266 00:14:15,320 --> 00:14:19,120 Speaker 2: behoove President Biden to help Kevin McCarthy get a win 267 00:14:19,240 --> 00:14:21,440 Speaker 2: here so we can move the ball, so he can 268 00:14:21,480 --> 00:14:23,560 Speaker 2: actually say hey, look we're making progress. 269 00:14:24,640 --> 00:14:27,520 Speaker 9: Yeah, it would behoove him, especially because he has to leave. 270 00:14:27,680 --> 00:14:30,520 Speaker 9: But the reality is, you know, progress is different than 271 00:14:30,560 --> 00:14:33,800 Speaker 9: an agreement. So agreement I don't think so sure, progress 272 00:14:33,920 --> 00:14:37,040 Speaker 9: we hope so absolutely. But the reality is, look at 273 00:14:37,080 --> 00:14:40,000 Speaker 9: what the OMB put out just this morning. They say 274 00:14:40,120 --> 00:14:44,000 Speaker 9: Republicans have to slash thirty percent to get the spending levels, 275 00:14:44,120 --> 00:14:47,720 Speaker 9: spending cups they want. That's almost impossible. Democrats know that 276 00:14:47,840 --> 00:14:49,920 Speaker 9: that's wind at their back. That's why they're sticking where 277 00:14:49,960 --> 00:14:50,200 Speaker 9: they are. 278 00:14:56,240 --> 00:14:59,520 Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the 279 00:14:59,600 --> 00:15:03,480 Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the 280 00:15:03,600 --> 00:15:06,840 Speaker 1: tune in alf, Bloomberg dot Com, and the Bloomberg Business app. 281 00:15:07,040 --> 00:15:09,880 Speaker 1: You can also listen live on Amazon Alexa from our 282 00:15:09,920 --> 00:15:14,400 Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 283 00:15:16,280 --> 00:15:19,040 Speaker 2: The headline on the terminal says that all bank executives 284 00:15:19,120 --> 00:15:22,880 Speaker 2: grilled as lawmakers pry into failures. Those would be the 285 00:15:22,960 --> 00:15:27,640 Speaker 2: failures of Silicon Valley Bank and Signature Bank. This, of 286 00:15:27,760 --> 00:15:31,160 Speaker 2: course the Senate Banking Committee. How'd you like to be? 287 00:15:31,360 --> 00:15:36,160 Speaker 2: Gregory Becker, the former CEO of SVB, I. 288 00:15:36,240 --> 00:15:39,920 Speaker 12: Worked at a place I truly loved, alongside our dedicated 289 00:15:39,960 --> 00:15:44,160 Speaker 12: employees to support our clients who are invading in astonishing ways. 290 00:15:45,440 --> 00:15:47,720 Speaker 12: I believe that SVB had a positive impact on the 291 00:15:47,840 --> 00:15:51,880 Speaker 12: roughly one hundred thousand companies we supported over multiple decades. 292 00:15:54,120 --> 00:15:54,840 Speaker 5: The takeover of. 293 00:15:54,960 --> 00:15:59,080 Speaker 12: SVB has been personally and professionally devastating, and I'm truly 294 00:15:59,160 --> 00:16:03,120 Speaker 12: sorry for how this has impacted svb's employees, our clients, 295 00:16:03,760 --> 00:16:04,720 Speaker 12: and our shareholders. 296 00:16:05,240 --> 00:16:06,320 Speaker 1: And that's how it started. 297 00:16:08,920 --> 00:16:12,320 Speaker 2: He of course drawing much criticism for selling three and 298 00:16:12,360 --> 00:16:14,720 Speaker 2: a half million dollars three point six million dollars in 299 00:16:14,800 --> 00:16:17,400 Speaker 2: company stock on a retraining plan less than two weeks 300 00:16:18,040 --> 00:16:22,920 Speaker 2: before the firm disclosed its extensive losses ahead of the failure. 301 00:16:23,400 --> 00:16:26,680 Speaker 2: Has also taken a lot of criticism for receiving a bonus, 302 00:16:26,760 --> 00:16:29,840 Speaker 2: As we heard from Republican Senator jd. 303 00:16:29,880 --> 00:16:32,520 Speaker 13: Vance, what were the amounts of your cash bonuses in 304 00:16:32,600 --> 00:16:33,360 Speaker 13: twenty twenty one? 305 00:16:33,400 --> 00:16:37,920 Speaker 5: Do you recall twenty twenty one, I believe was three million. 306 00:16:37,640 --> 00:16:40,280 Speaker 13: Dollars and your cash bonus in twenty twenty two was 307 00:16:40,680 --> 00:16:43,800 Speaker 13: one point five million. So in twenty twenty two, in particular, 308 00:16:44,240 --> 00:16:47,320 Speaker 13: you paid yourself a one point five million dollar cash bonus, 309 00:16:47,440 --> 00:16:50,160 Speaker 13: even as the stock the value of the company that 310 00:16:50,200 --> 00:16:52,720 Speaker 13: you were managing declined by two thirds. That's not bad 311 00:16:52,800 --> 00:16:55,200 Speaker 13: work if you can get it. As Senator Kramer and 312 00:16:55,240 --> 00:16:57,480 Speaker 13: I were joking, we would be willing to screw something 313 00:16:57,520 --> 00:16:59,720 Speaker 13: up for much less than one point five million dollars. 314 00:17:00,600 --> 00:17:03,920 Speaker 2: No comment there. It's not just Republicans beaten up. 315 00:17:03,960 --> 00:17:04,600 Speaker 13: Far from. 316 00:17:06,080 --> 00:17:09,159 Speaker 2: This is like the sweet spot for Elizabeth Warren, the 317 00:17:09,240 --> 00:17:13,639 Speaker 2: senator from Massachusetts, went after mister Becker repeatedly yes on 318 00:17:13,760 --> 00:17:16,320 Speaker 2: the bonuses as well as the salary increases that he 319 00:17:16,480 --> 00:17:20,000 Speaker 2: received in a very peculiar period of time. 320 00:17:20,119 --> 00:17:24,359 Speaker 14: It costs the FDIC fund twenty billion dollars. You made 321 00:17:24,480 --> 00:17:27,520 Speaker 14: four hundred million dollars doing that. How much are you 322 00:17:27,640 --> 00:17:29,240 Speaker 14: planning to return to the fund? 323 00:17:29,720 --> 00:17:34,560 Speaker 5: We go, Senator, I disagree with the number you just quoted. 324 00:17:34,600 --> 00:17:35,360 Speaker 9: But but you don't. 325 00:17:35,480 --> 00:17:38,159 Speaker 14: That's not your paycheck, or it's not how much it 326 00:17:38,280 --> 00:17:41,040 Speaker 14: costs the FDIICEE. So those are both a matter of 327 00:17:41,119 --> 00:17:44,480 Speaker 14: public record. How much are you planning to return to 328 00:17:44,600 --> 00:17:45,040 Speaker 14: the fund? 329 00:17:45,960 --> 00:17:48,480 Speaker 5: Centator, the number you just quoted was four hundred million dollars. 330 00:17:49,160 --> 00:17:53,280 Speaker 14: Forty million dollars, sorry forty disagree with that? How much 331 00:17:53,400 --> 00:17:55,719 Speaker 14: of the forty million. Are you planning to return How 332 00:17:55,760 --> 00:17:56,400 Speaker 14: many times. 333 00:17:56,240 --> 00:17:57,399 Speaker 13: Do we go do this dance? 334 00:17:57,600 --> 00:18:01,440 Speaker 5: Senator? I promised to cooperate with the regulators as they do. 335 00:18:01,520 --> 00:18:04,320 Speaker 14: Are you planning to return a single nickel? Do what 336 00:18:04,480 --> 00:18:07,200 Speaker 14: you cost the fun Centator? 337 00:18:07,560 --> 00:18:10,000 Speaker 5: I know there's going to be a process review of compensation. 338 00:18:10,240 --> 00:18:11,400 Speaker 14: I'll take that as a noe. 339 00:18:11,560 --> 00:18:15,119 Speaker 2: Okay, then how long are we going to do this dance? 340 00:18:15,720 --> 00:18:18,560 Speaker 2: There's three days of hearings this week. They start on 341 00:18:18,600 --> 00:18:20,239 Speaker 2: the Senate, then they go to the House, they come 342 00:18:20,280 --> 00:18:22,200 Speaker 2: back to the Senate on the other side. Today the 343 00:18:22,280 --> 00:18:24,720 Speaker 2: House doing the hearings with the FED, the banking regulators. 344 00:18:24,920 --> 00:18:29,120 Speaker 2: They're swapping witnesses, so everybody gets a piece. But does 345 00:18:29,160 --> 00:18:31,639 Speaker 2: anything come of it? We reassemble our panel, Rick Davis 346 00:18:31,680 --> 00:18:36,320 Speaker 2: and Jeanie Shanzano or with us watching along Bloomberg Politics contributors. 347 00:18:37,400 --> 00:18:38,080 Speaker 2: What do you think about this? 348 00:18:38,240 --> 00:18:38,520 Speaker 1: Genie? 349 00:18:38,560 --> 00:18:42,199 Speaker 2: We're in a world where jd Vance, Elizabeth Warren, Ted Cruz, 350 00:18:42,240 --> 00:18:44,080 Speaker 2: and Shared Brown all get along. And that's not the 351 00:18:44,160 --> 00:18:44,960 Speaker 2: beginning of a joke. 352 00:18:45,920 --> 00:18:46,399 Speaker 10: No, it's not. 353 00:18:46,840 --> 00:18:50,880 Speaker 9: We've even seen legislation introduced about clawing back executive pay 354 00:18:50,960 --> 00:18:54,520 Speaker 9: for Warren, Hawley Cortes Masto and bron So that's quite 355 00:18:54,560 --> 00:18:58,000 Speaker 9: a pair or quite a group. But you know, I 356 00:18:58,200 --> 00:19:01,240 Speaker 9: have to say this was I couldn't keep my eyes 357 00:19:01,320 --> 00:19:03,800 Speaker 9: off this hearing, and I don't say that about most hearings. 358 00:19:04,040 --> 00:19:06,560 Speaker 9: The one in the Senate was fascinating. I don't know 359 00:19:06,600 --> 00:19:09,639 Speaker 9: if you caught Senator Kennedy, but the signature video that 360 00:19:09,800 --> 00:19:14,920 Speaker 9: he played for Scott Shay and his questioning was amazing. 361 00:19:15,000 --> 00:19:17,720 Speaker 9: And you know, I have to say the same thing 362 00:19:17,800 --> 00:19:22,560 Speaker 9: with Warren and Menendez. But Kennedy as usual, was very 363 00:19:22,680 --> 00:19:25,679 Speaker 9: colorful and the reality was as you just played. They 364 00:19:25,760 --> 00:19:28,720 Speaker 9: all said to Elizabeth Warren and others that they weren't 365 00:19:28,760 --> 00:19:31,680 Speaker 9: intending to pay back anything or give back anything. And 366 00:19:31,840 --> 00:19:34,920 Speaker 9: I should say she also criticized Becker for lobbying Congress, 367 00:19:35,000 --> 00:19:38,520 Speaker 9: which is another area that for loosening regulations, which is 368 00:19:38,520 --> 00:19:40,720 Speaker 9: another area that I think needs to be explored. And 369 00:19:41,000 --> 00:19:43,000 Speaker 9: to your point, there was an awful lot of bipurtis 370 00:19:43,040 --> 00:19:45,960 Speaker 9: in agreement on some of this. So it was just 371 00:19:46,040 --> 00:19:48,520 Speaker 9: a fascinating hearing that's going to continue in the House tomorrow. 372 00:19:48,880 --> 00:19:53,040 Speaker 2: Does clawing back executive pay see the light of day, Rick, 373 00:19:53,359 --> 00:19:55,400 Speaker 2: or does nothing come from this? It's just a big 374 00:19:55,520 --> 00:19:56,480 Speaker 2: wig of grand standing. 375 00:19:56,840 --> 00:19:59,440 Speaker 11: Yeah, certainly, it's a big week of grandstanding no matter what. 376 00:20:00,080 --> 00:20:02,920 Speaker 11: Whether or not anything actually passes Congress and gets signed 377 00:20:02,960 --> 00:20:05,760 Speaker 11: in the law is I think pretty speculative. 378 00:20:06,080 --> 00:20:06,960 Speaker 2: Although I would. 379 00:20:06,840 --> 00:20:11,399 Speaker 11: Say the number of Republicans who are attacking the compensation 380 00:20:11,640 --> 00:20:15,400 Speaker 11: system is surprising to me. I mean, the Republicans really 381 00:20:15,480 --> 00:20:18,920 Speaker 11: had focused on the fdi C, the FED and the 382 00:20:18,960 --> 00:20:23,080 Speaker 11: Controller's Office for failed oversight, and that that would be 383 00:20:23,280 --> 00:20:27,280 Speaker 11: a traditional Republican response to this, and that generally leave 384 00:20:27,800 --> 00:20:31,119 Speaker 11: the businesses to their own They made bad decisions and 385 00:20:32,080 --> 00:20:35,760 Speaker 11: they'll have to pay the fact that they're all piling 386 00:20:35,840 --> 00:20:39,840 Speaker 11: on this compensation issue and the clawback concept that is 387 00:20:40,000 --> 00:20:44,920 Speaker 11: uniquely you know, Elizabeth Warrens is an indication that maybe 388 00:20:45,000 --> 00:20:47,840 Speaker 11: they will get something done on this. The outrage is 389 00:20:47,920 --> 00:20:49,280 Speaker 11: pretty stiff on both sides. 390 00:20:49,960 --> 00:20:54,080 Speaker 2: Well so, but does that challenge the conservative view here? 391 00:20:54,800 --> 00:20:54,960 Speaker 9: Rick? 392 00:20:55,080 --> 00:20:57,480 Speaker 2: Or is this kind of a one off because these 393 00:20:57,560 --> 00:21:01,960 Speaker 2: failures were so predictable? I guess in retrospect, well. 394 00:21:01,840 --> 00:21:05,199 Speaker 15: It's excessive failure, right, I mean, they were told repeatedly 395 00:21:05,400 --> 00:21:11,200 Speaker 15: that they were, you know, violating regulatory regimes and bad 396 00:21:11,480 --> 00:21:15,280 Speaker 15: business practices, and so they aren't really defensible in any way. 397 00:21:15,359 --> 00:21:17,560 Speaker 2: But it's not a shifting party view, though, I guess, 398 00:21:17,640 --> 00:21:17,840 Speaker 2: you know. 399 00:21:19,200 --> 00:21:21,680 Speaker 11: I must admit there have been a shift in party 400 00:21:21,760 --> 00:21:24,840 Speaker 11: view within a Republican caucus in both the House and 401 00:21:24,920 --> 00:21:28,520 Speaker 11: the Senate about whether or not you are the extension 402 00:21:28,560 --> 00:21:31,480 Speaker 11: of the Chamber of Commerce in Washington, and we've seen 403 00:21:32,480 --> 00:21:36,600 Speaker 11: a diversion of that, and certainly candidates like Donald Trump 404 00:21:36,840 --> 00:21:42,440 Speaker 11: and potential candidates like Ron DeSantis are noticeably anti corporate America. 405 00:21:42,760 --> 00:21:46,159 Speaker 11: And so yeah, I do think you're seeing some of 406 00:21:46,240 --> 00:21:48,880 Speaker 11: that play out in Congress for the first time really 407 00:21:49,760 --> 00:21:51,000 Speaker 11: as long as I can remember. 408 00:21:51,280 --> 00:21:55,200 Speaker 2: That's a pretty crowded club already for progressive Democrats. Genie, 409 00:21:56,119 --> 00:21:58,639 Speaker 2: What does that mean for the Democratic view on this? 410 00:21:58,840 --> 00:21:59,840 Speaker 2: Does everyone just get in this? 411 00:22:01,080 --> 00:22:01,800 Speaker 7: I think on this? 412 00:22:02,359 --> 00:22:04,560 Speaker 9: You know, my read of this is we saw a 413 00:22:04,680 --> 00:22:08,240 Speaker 9: lot of anger over CEO Pay fifteen years ago with 414 00:22:08,320 --> 00:22:11,399 Speaker 9: the financial crash, and I think what has happened is 415 00:22:11,560 --> 00:22:15,720 Speaker 9: over the last fifteen years that has solidified, and it's 416 00:22:15,760 --> 00:22:19,359 Speaker 9: an anger. I think as usual, congressional members, senators and 417 00:22:19,600 --> 00:22:23,480 Speaker 9: representatives are reflecting what their constituents feel, which is that 418 00:22:23,760 --> 00:22:26,440 Speaker 9: we are bailing out. Regardless of what anybody wants to 419 00:22:26,480 --> 00:22:29,040 Speaker 9: call it. We are bailing out these big banks while 420 00:22:29,160 --> 00:22:33,120 Speaker 9: CEOs are going off with big payoffs and selling big 421 00:22:33,240 --> 00:22:36,560 Speaker 9: time stock, and so they're echoing what their constituents are saying. 422 00:22:36,640 --> 00:22:39,879 Speaker 9: So I think the shift has goes back to twenty 423 00:22:39,920 --> 00:22:41,959 Speaker 9: oh eight when we saw that. And I also, by 424 00:22:42,000 --> 00:22:43,800 Speaker 9: the way, think we're going to see a closing or 425 00:22:43,800 --> 00:22:46,280 Speaker 9: an attempt to close that loophole for the one for 426 00:22:46,400 --> 00:22:49,080 Speaker 9: the ten B five to one rule, because there's also 427 00:22:49,359 --> 00:22:51,800 Speaker 9: questions of abuse there, and we saw the SEC talk 428 00:22:51,800 --> 00:22:54,600 Speaker 9: about that in December, and I think we will maybe 429 00:22:54,680 --> 00:22:58,320 Speaker 9: see some movement there, which obviously won't require congressional action 430 00:22:58,600 --> 00:23:01,280 Speaker 9: like the clawback of executive pay would. But if there's 431 00:23:01,320 --> 00:23:05,120 Speaker 9: one thing I can foresee coming this year, if anything legislatively, 432 00:23:05,520 --> 00:23:08,040 Speaker 9: it would be the clawback on pay. It's very popular. 433 00:23:08,359 --> 00:23:09,640 Speaker 2: I have to cough up some money. 434 00:23:09,680 --> 00:23:10,400 Speaker 5: It looks like here. 435 00:23:11,280 --> 00:23:14,720 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us 436 00:23:14,840 --> 00:23:17,960 Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the 437 00:23:18,040 --> 00:23:21,119 Speaker 1: iHeartRadio app and the Bloomberg Business app, or listen on 438 00:23:21,200 --> 00:23:23,200 Speaker 1: demand wherever you get your podcasts. 439 00:23:24,560 --> 00:23:29,440 Speaker 2: Three hundred and six pages some serious reading from the 440 00:23:29,680 --> 00:23:33,119 Speaker 2: US Special Council. I'm Joe Matthew along with Kayley Lions 441 00:23:33,200 --> 00:23:36,960 Speaker 2: and I'm not talking about Jack Smith here, John Durham. 442 00:23:37,640 --> 00:23:39,919 Speaker 2: You might actually have to google it to bring yourself 443 00:23:40,040 --> 00:23:43,680 Speaker 2: just to picture the mustache. US Special Council faulted the 444 00:23:43,800 --> 00:23:48,359 Speaker 2: FBI and the Justice Department's probe into Russia. Russia, Russia, 445 00:23:48,840 --> 00:23:52,639 Speaker 2: whether Donald Trump's campaign conspired with Russia to interfere in 446 00:23:52,720 --> 00:23:56,160 Speaker 2: not the twenty election, but way back in twenty sixteen. 447 00:23:57,320 --> 00:24:00,560 Speaker 2: Longest serving ever Special Council Kayley, and he's lee folks 448 00:24:01,240 --> 00:24:03,920 Speaker 2: wanting a four year probe six and a half million 449 00:24:04,000 --> 00:24:06,919 Speaker 2: dollars and no charges filed. 450 00:24:07,000 --> 00:24:10,000 Speaker 16: Huh, Nope, just a conclusion that the Justice Department and 451 00:24:10,040 --> 00:24:13,440 Speaker 16: the FBI failed to uphold their important mission of strict 452 00:24:13,480 --> 00:24:15,760 Speaker 16: fidelity to the law in connection with certain events and 453 00:24:15,840 --> 00:24:20,960 Speaker 16: activities that are described in this report. So basically pointing 454 00:24:21,000 --> 00:24:24,160 Speaker 16: a finger at the investigators in the DOJ and saying, 455 00:24:24,240 --> 00:24:26,800 Speaker 16: you guys did mess up here. I guess it's a question, Joe, 456 00:24:26,840 --> 00:24:29,639 Speaker 16: of how validating this is for former President Trump. 457 00:24:29,720 --> 00:24:32,879 Speaker 2: That's right, Vindication is the way he sees it. Durham 458 00:24:33,000 --> 00:24:36,879 Speaker 2: was tapped by then Attorney General William Barr and this 459 00:24:37,000 --> 00:24:38,840 Speaker 2: we're talking about it because The report was submitted to 460 00:24:39,359 --> 00:24:42,520 Speaker 2: current Attorney General Merrick Garland last week, and now it 461 00:24:42,600 --> 00:24:45,560 Speaker 2: has been made public. Donald Trump responds on the truth 462 00:24:45,640 --> 00:24:50,639 Speaker 2: social writing quote wow all caps exclamation point. After extensive research, 463 00:24:50,680 --> 00:24:53,320 Speaker 2: Special counsel John Durham concludes the FBI never should have 464 00:24:53,400 --> 00:24:56,160 Speaker 2: launched the Trump Russia probe. In other words, the American 465 00:24:56,240 --> 00:24:59,240 Speaker 2: public was scammed. That's, of course what he was saying 466 00:24:59,320 --> 00:25:01,359 Speaker 2: going into this. Have an opportunity to talk about it 467 00:25:01,440 --> 00:25:05,280 Speaker 2: now with Rachel Dean Wilson, Managing Director, Alliance for Securing 468 00:25:05,320 --> 00:25:09,560 Speaker 2: Democracy at the German Marshall Fund. Rachel, thanks for being 469 00:25:09,600 --> 00:25:12,920 Speaker 2: with us. Should this report have ever been made? Was 470 00:25:13,000 --> 00:25:13,760 Speaker 2: this a waste of money? 471 00:25:16,119 --> 00:25:18,359 Speaker 8: You know, I won't say whether it should have ever 472 00:25:18,480 --> 00:25:21,280 Speaker 8: been made or not, but I think it's like that 473 00:25:21,760 --> 00:25:28,600 Speaker 8: we're coming away from it with it's lacking, right. It's 474 00:25:28,880 --> 00:25:33,119 Speaker 8: Trump is heralding it as you know, some kind of vindication. 475 00:25:33,720 --> 00:25:35,960 Speaker 8: If you actually read the report, it reads more like 476 00:25:36,040 --> 00:25:42,439 Speaker 8: an internal review document on how FBI should approach more 477 00:25:42,480 --> 00:25:47,159 Speaker 8: politically sensitive cases and where they fell down. And that's valid, right, 478 00:25:47,280 --> 00:25:48,959 Speaker 8: like we should always we should want all of our 479 00:25:49,000 --> 00:25:53,480 Speaker 8: federal agencies to to really make sure that there are 480 00:25:53,560 --> 00:25:57,359 Speaker 8: procedures and processes in place that make sure that we 481 00:25:57,920 --> 00:26:01,880 Speaker 8: don't have political bias for confirmation bias, you know, coming 482 00:26:01,920 --> 00:26:05,960 Speaker 8: into investigations. That being said, what I think is really 483 00:26:06,160 --> 00:26:10,119 Speaker 8: damaging here is just the constant back and forth for 484 00:26:10,400 --> 00:26:15,360 Speaker 8: impoliticization of the issue of foreign interference in elections. Here 485 00:26:15,359 --> 00:26:19,920 Speaker 8: are now seven years out from Russian interference in the 486 00:26:19,960 --> 00:26:22,800 Speaker 8: twenty sixteen election, and it didn't stop on election day. 487 00:26:24,000 --> 00:26:27,720 Speaker 8: They're still trying to interfere in our democracy. China and 488 00:26:27,800 --> 00:26:31,040 Speaker 8: Iran are also kind of playing their own games on 489 00:26:31,080 --> 00:26:34,800 Speaker 8: the influence and interference side in the United States, and 490 00:26:35,119 --> 00:26:39,080 Speaker 8: it really is damaging from a national security perspective that 491 00:26:39,880 --> 00:26:45,119 Speaker 8: the politics of this issue allows for dismissal on one 492 00:26:45,240 --> 00:26:49,120 Speaker 8: side and a real lack of solutions and focus looking 493 00:26:49,160 --> 00:26:50,119 Speaker 8: at the elections ahead. 494 00:26:50,840 --> 00:26:53,920 Speaker 16: So in other words, you think this really undermines the 495 00:26:54,000 --> 00:26:57,080 Speaker 16: credibility of these investigators as they look into some of 496 00:26:57,119 --> 00:26:57,679 Speaker 16: these issues. 497 00:26:59,160 --> 00:27:03,440 Speaker 8: Yeah, I mean, and in the report, Derham actually lauds 498 00:27:03,560 --> 00:27:08,280 Speaker 8: the Molo Report and the Senate, the bipartisan Senate investigation 499 00:27:08,359 --> 00:27:12,399 Speaker 8: into Russian interference from the intelligence community, and and so 500 00:27:12,680 --> 00:27:16,600 Speaker 8: there's really good information on this. It's the political uses 501 00:27:16,640 --> 00:27:20,920 Speaker 8: that are really problematic here. And so the more we 502 00:27:21,119 --> 00:27:25,520 Speaker 8: get wrapped up in political point scoring, that erodes trust 503 00:27:25,560 --> 00:27:28,359 Speaker 8: and government. It muddies the facts. So your average person 504 00:27:29,000 --> 00:27:31,560 Speaker 8: can't figure out where we are in this thread. They 505 00:27:31,600 --> 00:27:35,000 Speaker 8: don't care, and so they're missing the big picture here, 506 00:27:35,160 --> 00:27:38,200 Speaker 8: and it ultimately benefits our foreign competitors. 507 00:27:38,680 --> 00:27:41,920 Speaker 2: To be clear, Durham's investigation led to charges against three 508 00:27:42,240 --> 00:27:44,920 Speaker 2: low level figures, two of whom were acquitted by a jury. 509 00:27:45,880 --> 00:27:49,639 Speaker 2: What did we learn of value here, Rachel six and 510 00:27:49,680 --> 00:27:51,560 Speaker 2: a half million dollars? We must have learned something. 511 00:27:53,480 --> 00:27:57,160 Speaker 8: Yeah, Like I said, it is always a good thing 512 00:27:57,440 --> 00:28:00,440 Speaker 8: to be checking your procedures in citeed agency. Make sure 513 00:28:00,480 --> 00:28:05,200 Speaker 8: that you're handling politically sensitive cases fairly. You know, does 514 00:28:05,240 --> 00:28:07,960 Speaker 8: that take four years? Does that take a b amount 515 00:28:07,960 --> 00:28:12,440 Speaker 8: of money? I'm not sure it needs to. But but 516 00:28:12,560 --> 00:28:17,440 Speaker 8: there was no bombshell here. But in the actual report itself, 517 00:28:17,720 --> 00:28:21,080 Speaker 8: the you know that that is not the same case. 518 00:28:21,480 --> 00:28:24,320 Speaker 8: Whenever you look at how Trump is is spinning it 519 00:28:24,400 --> 00:28:27,000 Speaker 8: and taking this report conclusion. 520 00:28:27,040 --> 00:28:29,719 Speaker 16: Well, there's also the question of how other lawmakers are 521 00:28:29,880 --> 00:28:32,359 Speaker 16: taking this report. There was a statement out from the 522 00:28:32,400 --> 00:28:35,920 Speaker 16: House Intelligence Committee Chairman Mike Turner that said such actions 523 00:28:36,160 --> 00:28:38,880 Speaker 16: should never have occurred. It is essential that Congress codifies 524 00:28:38,960 --> 00:28:42,840 Speaker 16: clear guardrails that prevent future FBI abuses and restores the 525 00:28:42,920 --> 00:28:46,560 Speaker 16: public's trust in our law enforcement institutions. Do you think 526 00:28:46,600 --> 00:28:49,160 Speaker 16: we'll see something legislative come out of this episode? What 527 00:28:49,200 --> 00:28:51,200 Speaker 16: do you think the likely response from Congress is. 528 00:28:52,240 --> 00:28:53,320 Speaker 10: I think you'll see an effort. 529 00:28:53,400 --> 00:28:56,520 Speaker 8: I think the kind of divided Congress makes the actual 530 00:28:56,600 --> 00:29:00,560 Speaker 8: legislation difficult, but I think they will. It will probably 531 00:29:00,600 --> 00:29:02,959 Speaker 8: be some movement on the House side to at least investigate. 532 00:29:03,440 --> 00:29:06,520 Speaker 8: I will say that FBIS came out with a statement 533 00:29:06,600 --> 00:29:08,040 Speaker 8: that they you know, I think it was back in 534 00:29:08,120 --> 00:29:13,400 Speaker 8: twenty nineteen. They implemented some changes to their procedure, dozens 535 00:29:13,480 --> 00:29:17,440 Speaker 8: of them. I believe that would have caught most of 536 00:29:17,600 --> 00:29:21,600 Speaker 8: the problems that are identified in the report. So that's 537 00:29:21,680 --> 00:29:26,120 Speaker 8: important information. I don't think that'll stop Congress from trying 538 00:29:26,280 --> 00:29:28,840 Speaker 8: to look active on this topic. 539 00:29:29,600 --> 00:29:33,320 Speaker 10: To what end, I'm not sure by SO. 540 00:29:33,440 --> 00:29:36,280 Speaker 2: Not the greatest scam against the American people, as Donald 541 00:29:36,320 --> 00:29:39,760 Speaker 2: Trump said, No, I don't. 542 00:29:39,600 --> 00:29:42,200 Speaker 10: Think SO would not classify it as such. 543 00:29:43,080 --> 00:29:45,600 Speaker 16: Speaking of things that Donald Trump has said, when we 544 00:29:45,760 --> 00:29:48,160 Speaker 16: talk about, you know, how he kind of is touting 545 00:29:48,240 --> 00:29:51,040 Speaker 16: this as a vindication. I wonder what this does to 546 00:29:51,240 --> 00:29:54,440 Speaker 16: his ability to continue pushing other mis troops, like the 547 00:29:54,520 --> 00:29:58,160 Speaker 16: idea that the twenty twenty election was stolen. What is 548 00:29:58,200 --> 00:29:59,560 Speaker 16: your take on that, Rachel? 549 00:30:00,960 --> 00:30:04,720 Speaker 8: Unfortunately, I think it's just going to continue. We've seen 550 00:30:04,800 --> 00:30:07,520 Speaker 8: time and again that there are so many kind of 551 00:30:07,800 --> 00:30:10,040 Speaker 8: different framings of falsehoods coming out that it's hard to 552 00:30:10,120 --> 00:30:12,800 Speaker 8: keep track and it's hard to robut and it kind 553 00:30:12,800 --> 00:30:19,120 Speaker 8: of undermines a shared truth. We're seeing platform fragmentation that's 554 00:30:19,200 --> 00:30:21,960 Speaker 8: kind of adding to who's getting what news and from home. 555 00:30:23,080 --> 00:30:27,720 Speaker 8: In this kind of this division and this lack of 556 00:30:27,800 --> 00:30:31,320 Speaker 8: a shared understanding of the facts, it's really damaging to 557 00:30:31,360 --> 00:30:35,680 Speaker 8: democracy and it plays right into the hands of our 558 00:30:35,840 --> 00:30:39,400 Speaker 8: foreign adversaries. I mean, twenty sixteen, the Russian our fans 559 00:30:39,400 --> 00:30:42,080 Speaker 8: in twenty sixteen is the gift that keeps on giving. 560 00:30:42,160 --> 00:30:44,160 Speaker 10: From the Russian perspective, the idea. 561 00:30:43,960 --> 00:30:46,560 Speaker 8: That we are still have a political fallout and we 562 00:30:46,640 --> 00:30:49,320 Speaker 8: are still being divided and this is still an issue 563 00:30:49,920 --> 00:30:52,800 Speaker 8: that causes so much strife here in the United States 564 00:30:53,280 --> 00:30:57,000 Speaker 8: is exactly what they want and is exactly what's intended. 565 00:30:58,160 --> 00:31:03,840 Speaker 8: And so you know, I that is from a geopolitical standpoint, 566 00:31:05,120 --> 00:31:09,880 Speaker 8: the worst US democracy looks the better for our competitors abroad, 567 00:31:10,760 --> 00:31:13,000 Speaker 8: and that's they're playing that game and we are. 568 00:31:13,280 --> 00:31:14,640 Speaker 10: We're fighting amongst ourselves. 569 00:31:15,600 --> 00:31:18,320 Speaker 2: Rachel, thanks for joining us. Rachel. Dean Wilson, Managing Director, 570 00:31:18,440 --> 00:31:22,240 Speaker 2: Alliance for Securing Democracy at the German Marshall Fund. 571 00:31:27,640 --> 00:31:30,960 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the 572 00:31:31,040 --> 00:31:34,880 Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the 573 00:31:35,000 --> 00:31:38,280 Speaker 1: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 574 00:31:38,440 --> 00:31:41,280 Speaker 1: You can also listen live on Amazon Alexa from our 575 00:31:41,360 --> 00:31:46,080 Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty. 576 00:31:48,720 --> 00:31:53,880 Speaker 2: Earlier. Today, the FED came up shockingly in the Senate 577 00:31:54,000 --> 00:31:56,640 Speaker 2: Banking Committee hearing on the failures of SVB and sagas 578 00:31:56,760 --> 00:31:58,760 Speaker 2: you were there, Kaylie. You don't need me to tell you, 579 00:31:58,920 --> 00:32:01,360 Speaker 2: but pretty remark able to hear Gregory Becker, who was 580 00:32:01,400 --> 00:32:05,440 Speaker 2: the CEO, very well compensated CEO of SVB, basically blame 581 00:32:05,520 --> 00:32:05,760 Speaker 2: the Fed. 582 00:32:06,320 --> 00:32:06,480 Speaker 7: Yeah. 583 00:32:06,560 --> 00:32:08,720 Speaker 16: Well, this is the idea that the Fed hiked interest 584 00:32:08,800 --> 00:32:11,600 Speaker 16: rates so quickly, so high that it left kind of 585 00:32:11,680 --> 00:32:14,960 Speaker 16: banks scrambling with what to do in this higher interest 586 00:32:15,040 --> 00:32:17,560 Speaker 16: rate environment. When their assets and liabilities then just became 587 00:32:17,640 --> 00:32:20,720 Speaker 16: greatly mismatched. Listen to what he had to say about it. 588 00:32:20,960 --> 00:32:24,840 Speaker 12: Throughout twenty twenty and late twenty twenty one, the messaging 589 00:32:24,920 --> 00:32:27,320 Speaker 12: from the Federal Reserve was that interest rates would remain 590 00:32:27,400 --> 00:32:30,160 Speaker 12: low and that inflation, when that was starting to bubble up, 591 00:32:30,600 --> 00:32:35,480 Speaker 12: would only be transitory. During this time, SVB invested in 592 00:32:35,600 --> 00:32:40,920 Speaker 12: low risk, highly rated government backed securities. These securities were 593 00:32:41,000 --> 00:32:43,960 Speaker 12: safe assets as they were backed by the US government 594 00:32:44,680 --> 00:32:47,800 Speaker 12: and could be used as collateral for borrowing for liquidity 595 00:32:48,360 --> 00:32:49,400 Speaker 12: if SVB needed it. 596 00:32:50,120 --> 00:32:52,960 Speaker 2: So called j Powell. Yeah, to think that we're still 597 00:32:52,960 --> 00:32:56,000 Speaker 2: blaming things on transitory at this point is really remarkable. 598 00:32:56,080 --> 00:32:56,960 Speaker 2: My god, what a guess. 599 00:32:57,080 --> 00:32:59,920 Speaker 16: Yeah, we all know how transitory is going to go 600 00:33:00,080 --> 00:33:02,600 Speaker 16: down in the history books, Joe. But basically, the idea 601 00:33:02,840 --> 00:33:05,720 Speaker 16: of saying that they couldn't that the Fed didn't properly 602 00:33:05,760 --> 00:33:07,400 Speaker 16: telegraph what it was going to do. The thing is 603 00:33:07,560 --> 00:33:10,200 Speaker 16: is that by the time this bank actually failed in 604 00:33:10,280 --> 00:33:12,800 Speaker 16: March of twenty twenty three, we were a year into 605 00:33:12,880 --> 00:33:16,320 Speaker 16: the hiking cycle in which rates had already gone much higher. 606 00:33:16,360 --> 00:33:17,560 Speaker 2: In that r it had a justice. 607 00:33:17,680 --> 00:33:20,240 Speaker 16: Yeah, and that's something that the lawmakers were really pushing 608 00:33:20,320 --> 00:33:22,479 Speaker 16: not just Greg Becker, but the other executives from Signature 609 00:33:22,520 --> 00:33:24,400 Speaker 16: Bank there as well as you should have seen this coming, 610 00:33:24,440 --> 00:33:27,520 Speaker 16: as Senator Mark Warner described it, it was banking one 611 00:33:27,600 --> 00:33:29,880 Speaker 16: oh one, and they just didn't do it right. 612 00:33:30,200 --> 00:33:33,240 Speaker 2: You talked to a few skeptical lawmakers today from the 613 00:33:33,520 --> 00:33:38,280 Speaker 2: Senate Banking Committee DS and rs yep, all skeptical, all 614 00:33:38,440 --> 00:33:40,120 Speaker 2: united at least in their skepticism. 615 00:33:41,120 --> 00:33:44,200 Speaker 16: Yeah, including the chairman of this committee, Senator Shared Brown, 616 00:33:44,280 --> 00:33:47,920 Speaker 16: the Democrat from Ohio. I asked him, you know, how 617 00:33:48,080 --> 00:33:50,800 Speaker 16: do how does hearing from lawmakers bring us closer to 618 00:33:50,960 --> 00:33:55,040 Speaker 16: a potential legislative solution. What are you hoping to understand? 619 00:33:55,080 --> 00:33:58,520 Speaker 16: And he basically said, executives were incompetent and greedy. 620 00:33:59,040 --> 00:34:01,240 Speaker 7: They ran these banks to the ground. We want to 621 00:34:01,800 --> 00:34:04,080 Speaker 7: learn more about what they did and how they did it. 622 00:34:04,880 --> 00:34:07,160 Speaker 7: We want the message to go out loud and clear 623 00:34:08,160 --> 00:34:12,759 Speaker 7: that that kind of behavior will not be tolerated, and 624 00:34:12,880 --> 00:34:16,680 Speaker 7: we want other banks to know that they can't operate 625 00:34:16,800 --> 00:34:20,880 Speaker 7: this way and be holding these bankers accountable. Greg Becker 626 00:34:21,480 --> 00:34:26,000 Speaker 7: of Silicon Valley Bank, the two executives from Signature, and 627 00:34:26,160 --> 00:34:29,040 Speaker 7: we will then pursue legislation to hold them further accountable. 628 00:34:29,120 --> 00:34:31,320 Speaker 10: Would that include executive compensation clouduts. 629 00:34:31,800 --> 00:34:34,280 Speaker 7: It will include a number of things. It will include 630 00:34:34,960 --> 00:34:38,000 Speaker 7: recovering the money that they made as they ran this 631 00:34:38,200 --> 00:34:42,439 Speaker 7: bank into oblivion. Essentially, it will mean they can't work 632 00:34:42,520 --> 00:34:46,120 Speaker 7: at other banks and do the same thing. We know 633 00:34:46,360 --> 00:34:49,640 Speaker 7: that one of these executives sold millions of dollars of 634 00:34:49,760 --> 00:34:53,319 Speaker 7: stock in his own bank not long before he saw 635 00:34:53,400 --> 00:34:56,160 Speaker 7: these problems, not long before we didn't fix the problems, 636 00:34:56,200 --> 00:34:59,359 Speaker 7: he sold his own stock and made a killing, if 637 00:34:59,400 --> 00:35:03,120 Speaker 7: you will, far beyond what executives should make, especially an 638 00:35:03,160 --> 00:35:04,799 Speaker 7: executive that ran the bank end of the ground. 639 00:35:05,440 --> 00:35:07,239 Speaker 2: So I guess one thing they really can't agree on 640 00:35:07,400 --> 00:35:10,399 Speaker 2: is cling back. Yes, executive compensation. Everybody's on the same 641 00:35:10,440 --> 00:35:11,319 Speaker 2: page there, Yeah. 642 00:35:11,400 --> 00:35:13,879 Speaker 16: And Senator Elizabeth Warren was talking about a bill she'd 643 00:35:13,960 --> 00:35:16,200 Speaker 16: like to see introduced and marked up in this committee 644 00:35:16,440 --> 00:35:18,840 Speaker 16: to do just that, hoping to get bipartisan support, and 645 00:35:18,920 --> 00:35:20,880 Speaker 16: she told me she's working on that with her colleagues 646 00:35:20,920 --> 00:35:22,840 Speaker 16: in the House as well. So that does seem to 647 00:35:22,880 --> 00:35:26,320 Speaker 16: be like one area of potential consensus in other areas, 648 00:35:26,400 --> 00:35:29,600 Speaker 16: though still very much a question mark. We perhaps will 649 00:35:29,640 --> 00:35:33,280 Speaker 16: get more clarity around what we could see in regard 650 00:35:33,320 --> 00:35:36,440 Speaker 16: to deposit insurance or could not see in all likelihood 651 00:35:36,520 --> 00:35:38,719 Speaker 16: on Thursday when there's going to be another hearing in 652 00:35:38,800 --> 00:35:40,400 Speaker 16: the sign Banking Committee with the regulators. 653 00:35:40,480 --> 00:35:42,640 Speaker 2: How about your conversation with Kevin Kramer. You've got a 654 00:35:42,640 --> 00:35:45,880 Speaker 2: Republican in this case North Dakota, similar views or do 655 00:35:45,960 --> 00:35:48,080 Speaker 2: they start to break apart on some of these in. 656 00:35:48,160 --> 00:35:51,520 Speaker 16: Some ways similar in that he also isn't letting management 657 00:35:51,600 --> 00:35:54,600 Speaker 16: off the hook here, and he too expressed some support 658 00:35:54,719 --> 00:35:57,960 Speaker 16: of the idea of executive compensation Clawbax. Here's this conversation. 659 00:35:58,320 --> 00:36:01,800 Speaker 17: Management is has some culpability in all of this, but 660 00:36:01,880 --> 00:36:04,080 Speaker 17: so do the regulators. And I think, if you know, 661 00:36:04,440 --> 00:36:08,759 Speaker 17: hearing from both sides will be helpful in determining what 662 00:36:09,000 --> 00:36:10,839 Speaker 17: what a solution may be. If it's if there's one 663 00:36:10,920 --> 00:36:11,719 Speaker 17: necessary at all. 664 00:36:12,040 --> 00:36:14,360 Speaker 10: What about something like executive compensation clawback? 665 00:36:14,840 --> 00:36:19,359 Speaker 17: Well, I like the idea of executive compensation clawbacks. I'm 666 00:36:19,440 --> 00:36:22,640 Speaker 17: not sure how broad the net are to be thrown 667 00:36:22,800 --> 00:36:25,440 Speaker 17: or how far back it out to go. Those are 668 00:36:25,520 --> 00:36:29,360 Speaker 17: some of the details of legislation. As you maybe know 669 00:36:29,480 --> 00:36:33,920 Speaker 17: that Sanator Warren has currently that I'm considering, but certainly 670 00:36:33,960 --> 00:36:41,080 Speaker 17: if something criminal has happened and if executives knowingly provided 671 00:36:41,120 --> 00:36:44,400 Speaker 17: themselves and their management team with big bonuses or large 672 00:36:44,480 --> 00:36:49,680 Speaker 17: raises or adjustments of some sort right before unknown catastrophe, 673 00:36:50,320 --> 00:36:52,760 Speaker 17: that's a pretty big problem. And I think the challenge 674 00:36:52,880 --> 00:36:55,840 Speaker 17: is how do you prove intent? How do you prove 675 00:36:56,400 --> 00:36:59,120 Speaker 17: that something criminal happened and they shouldn't be able to 676 00:36:59,200 --> 00:37:04,160 Speaker 17: skate under a standard of criminality when you're already being 677 00:37:04,200 --> 00:37:06,120 Speaker 17: compensated a great deal to run, you know, to run 678 00:37:06,160 --> 00:37:08,640 Speaker 17: the business. So again, trying to find that balance is. 679 00:37:08,640 --> 00:37:09,280 Speaker 1: Going to be important. 680 00:37:09,360 --> 00:37:11,520 Speaker 16: And of course we're talking here about failures that already 681 00:37:11,600 --> 00:37:14,000 Speaker 16: have happened, right concerned are you that there could be 682 00:37:14,120 --> 00:37:14,600 Speaker 16: more to come? 683 00:37:14,760 --> 00:37:18,760 Speaker 17: Well, I'm becoming more concerned. However, one of the problems 684 00:37:18,800 --> 00:37:22,120 Speaker 17: with a lot of the failures is concern becomes contagious 685 00:37:22,480 --> 00:37:27,160 Speaker 17: and contagious in some really, really detrimental ways, because I 686 00:37:27,480 --> 00:37:30,600 Speaker 17: frankly I think that but for the runs on the banks, 687 00:37:31,120 --> 00:37:33,800 Speaker 17: that most of them probably could have survived what was 688 00:37:34,239 --> 00:37:37,520 Speaker 17: clearly an upside down situation with their deposits based on 689 00:37:38,400 --> 00:37:41,920 Speaker 17: interest rates, things that were beyond their control, although things 690 00:37:41,960 --> 00:37:44,480 Speaker 17: that they certainly should have been able to see coming 691 00:37:44,560 --> 00:37:45,879 Speaker 17: and probably didn't manage as well. 692 00:37:45,880 --> 00:37:46,520 Speaker 1: As they could have. 693 00:37:47,160 --> 00:37:49,239 Speaker 17: But I don't know that that means that you need 694 00:37:49,800 --> 00:37:55,000 Speaker 17: a massive legislative or regulatory response so much as you 695 00:37:55,080 --> 00:37:57,759 Speaker 17: know better behavior by people in charge. But I don't 696 00:37:57,800 --> 00:37:59,839 Speaker 17: want to be contributor to the contagion, if you will, 697 00:37:59,880 --> 00:38:02,960 Speaker 17: and so I think how we talk about it is important, 698 00:38:03,080 --> 00:38:05,320 Speaker 17: and choosing net words carefully is also important. 699 00:38:05,400 --> 00:38:06,879 Speaker 2: That funny they know the markets are listening. 700 00:38:07,040 --> 00:38:07,640 Speaker 16: Yes, we have to. 701 00:38:07,640 --> 00:38:09,960 Speaker 2: Actually, you've got to be careful here. I know everyone's 702 00:38:10,000 --> 00:38:14,000 Speaker 2: blaming people and all the usually the FED, but these 703 00:38:14,080 --> 00:38:17,600 Speaker 2: hearings do more than give lawmakers a chance to grandstand. 704 00:38:18,080 --> 00:38:19,520 Speaker 2: The markets are listening, right. 705 00:38:19,600 --> 00:38:22,799 Speaker 16: They want to know how concerned congressional leaders still are 706 00:38:23,200 --> 00:38:25,160 Speaker 16: about the health of the banking system, because we are 707 00:38:25,200 --> 00:38:28,279 Speaker 16: all still trying to figure that out. And as we 708 00:38:28,400 --> 00:38:30,839 Speaker 16: talk about the speed with which some of these failures happened, 709 00:38:30,880 --> 00:38:32,960 Speaker 16: the idea that it was perpetuated by social media, and 710 00:38:33,040 --> 00:38:37,480 Speaker 16: so much of it felt psychological, it maybe logically follows 711 00:38:37,560 --> 00:38:39,719 Speaker 16: that you're going to be very very careful about what 712 00:38:39,920 --> 00:38:42,000 Speaker 16: you say so as not to fuel a fire that 713 00:38:42,040 --> 00:38:43,000 Speaker 16: could then start raging. 714 00:38:43,160 --> 00:38:45,560 Speaker 2: I'm curious, Kaylee, you were there at the first hearing. 715 00:38:46,320 --> 00:38:49,400 Speaker 2: As these continue and with not a lot of promise 716 00:38:49,440 --> 00:38:51,359 Speaker 2: of a lot to come out of them, and we've 717 00:38:51,400 --> 00:38:52,920 Speaker 2: got a debt ceiling and so many other things to 718 00:38:53,000 --> 00:38:56,000 Speaker 2: focus on. Are the reporters starting to dwindle or you know, 719 00:38:56,120 --> 00:38:57,080 Speaker 2: is Bloomberg covering this? 720 00:38:57,719 --> 00:38:57,919 Speaker 7: Yeah? 721 00:38:58,360 --> 00:38:59,239 Speaker 2: Does anyone else cover? 722 00:38:59,280 --> 00:38:59,400 Speaker 7: Right? 723 00:38:59,400 --> 00:39:01,400 Speaker 16: I've been lonely staking out to you of this. There 724 00:39:01,440 --> 00:39:03,960 Speaker 16: were other people there today, but it does feel like, 725 00:39:04,160 --> 00:39:06,160 Speaker 16: you know, people have other things they're focus on. 726 00:39:06,280 --> 00:39:08,520 Speaker 2: Senators, listen up. If you see Kaylee Lines alone in 727 00:39:08,560 --> 00:39:16,239 Speaker 2: the hall, let's do an interview. Thanks for listening to 728 00:39:16,320 --> 00:39:18,640 Speaker 2: the Sound On podcast. Make sure to subscribe if you 729 00:39:18,680 --> 00:39:21,560 Speaker 2: haven't already, at Apple, Spotify, and anywhere else you get 730 00:39:21,600 --> 00:39:24,600 Speaker 2: your podcasts, and you can find us live every weekday 731 00:39:24,680 --> 00:39:27,520 Speaker 2: from Washington, d C. At one pm Eastern Time at 732 00:39:27,560 --> 00:39:28,560 Speaker 2: Bloomberg dot com