1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,760 --> 00:00:09,639 Speaker 2: Here in New York City, Mack Show the film A 3 00:00:09,680 --> 00:00:11,440 Speaker 2: chief of staff to the foam of Vice President of 4 00:00:11,440 --> 00:00:13,200 Speaker 2: my Pench joins us now for Mo MO, good morning, 5 00:00:13,280 --> 00:00:14,840 Speaker 2: good morning, Thanks for having me. Thank you for big 6 00:00:14,920 --> 00:00:17,520 Speaker 2: kay a much more interventionist white House over the past week, 7 00:00:17,560 --> 00:00:19,759 Speaker 2: and I've maybe the last number of months as well. Yeah, 8 00:00:19,840 --> 00:00:21,400 Speaker 2: can you just weigh in how you framing things at 9 00:00:21,440 --> 00:00:22,880 Speaker 2: the moment well on. 10 00:00:23,160 --> 00:00:26,119 Speaker 1: This pretty quod topic. I actually think there is probably 11 00:00:26,320 --> 00:00:29,480 Speaker 1: broader support among a lot of small government people who say, 12 00:00:29,520 --> 00:00:32,839 Speaker 1: you know what, the notion of a FED truly being 13 00:00:32,880 --> 00:00:36,160 Speaker 1: independent was a nice notion, went before it had seven 14 00:00:36,280 --> 00:00:39,680 Speaker 1: trillion dollars of assets on its books, and so you 15 00:00:39,760 --> 00:00:41,680 Speaker 1: have a lot of unlike to people with fourteen year 16 00:00:41,800 --> 00:00:45,360 Speaker 1: terms have enormous influence over the economy. Having said that, 17 00:00:45,440 --> 00:00:48,000 Speaker 1: I think there's probably a desire also that if there 18 00:00:48,040 --> 00:00:51,760 Speaker 1: was actually effort to change it, it'd be more above 19 00:00:51,800 --> 00:00:54,360 Speaker 1: board than coming up with sort of these fraudulent charges 20 00:00:54,720 --> 00:00:57,640 Speaker 1: against the board governor, because there's probably plenty of political 21 00:00:57,720 --> 00:01:00,760 Speaker 1: pointees administration of multiple mortgages too, said they're both their 22 00:01:00,800 --> 00:01:03,600 Speaker 1: primary residents, so I'm sure there's a double standard here, 23 00:01:03,840 --> 00:01:06,440 Speaker 1: and I wish there is a more intellectual appeal about 24 00:01:06,440 --> 00:01:08,679 Speaker 1: the fed's role as a postcon with bogus chargers. 25 00:01:08,680 --> 00:01:10,040 Speaker 2: I just want to pick up on the language a 26 00:01:10,120 --> 00:01:12,840 Speaker 2: difference between challenges of fraud and fortullent challenges. Which one 27 00:01:12,880 --> 00:01:13,479 Speaker 2: do you think it is? 28 00:01:14,360 --> 00:01:16,680 Speaker 1: I think these are bogus charges. I mean, what makes 29 00:01:16,720 --> 00:01:19,600 Speaker 1: you believe that, Well, I don't know how many how 30 00:01:19,640 --> 00:01:21,200 Speaker 1: many homes she has or if she listed both as 31 00:01:21,200 --> 00:01:22,880 Speaker 1: private resident, is that really a reason you're going to 32 00:01:22,959 --> 00:01:26,480 Speaker 1: remove somebody as a board governor? And once again, I 33 00:01:26,560 --> 00:01:28,560 Speaker 1: believe there's probably plenty of people in the indministration have 34 00:01:28,560 --> 00:01:29,960 Speaker 1: done the same on their mortgage file. 35 00:01:30,040 --> 00:01:32,640 Speaker 3: Well, lots of reporting over this summer about Ken Paxton, 36 00:01:32,680 --> 00:01:34,840 Speaker 3: who's the Attorney General of Texas, who's running to be 37 00:01:34,840 --> 00:01:37,680 Speaker 3: the senator. Point and do you think this litmus test 38 00:01:37,720 --> 00:01:39,440 Speaker 3: now for the president. He's going to decide whether or 39 00:01:39,480 --> 00:01:41,759 Speaker 3: not he's going to back Ken Paxton because he has 40 00:01:42,000 --> 00:01:45,000 Speaker 3: three residences listen as a primary more you know memory, he's. 41 00:01:44,880 --> 00:01:47,360 Speaker 1: Very flexible in these things. I think this is this 42 00:01:47,440 --> 00:01:49,800 Speaker 1: is more about his effort to exert control over the 43 00:01:49,800 --> 00:01:53,160 Speaker 1: FED because I think they're concerned that their trade agenda 44 00:01:53,320 --> 00:01:56,680 Speaker 1: is causing great weakness in the labor market, and they 45 00:01:56,680 --> 00:01:59,080 Speaker 1: want rates lower, and to be fair, this is what 46 00:01:59,160 --> 00:02:01,360 Speaker 1: the President has always one of his lower rates. Even 47 00:02:01,440 --> 00:02:03,800 Speaker 1: when he had the option to appoint Jerome Powell in 48 00:02:03,880 --> 00:02:06,840 Speaker 1: the first administration, there were three options between Kevin Warsh, 49 00:02:06,920 --> 00:02:10,400 Speaker 1: John Taylor, and Jerome Powell, and the President asked who's 50 00:02:10,400 --> 00:02:12,280 Speaker 1: going to make rates lower? And that's one of the 51 00:02:12,320 --> 00:02:15,040 Speaker 1: ironies is that he chose the person who Steve Nuchen 52 00:02:15,080 --> 00:02:17,200 Speaker 1: told him is going to keep rates lower, but obviously 53 00:02:17,280 --> 00:02:18,079 Speaker 1: he wants even lower. 54 00:02:18,120 --> 00:02:20,800 Speaker 3: They are Now, how difficult is next week going to be? 55 00:02:20,880 --> 00:02:23,360 Speaker 3: If the Senate Banking Committee begins their hearing of Steve 56 00:02:23,440 --> 00:02:25,359 Speaker 3: Myron and you look at some of the Republicans on 57 00:02:25,400 --> 00:02:27,520 Speaker 3: that committee. Are we going to see pushback not just 58 00:02:27,520 --> 00:02:30,080 Speaker 3: from the likes of Elizabeth Warren but also like Tom 59 00:02:30,120 --> 00:02:30,520 Speaker 3: tell Us. 60 00:02:31,000 --> 00:02:32,920 Speaker 1: We haven't seen it yet, Henry. He said, I'm not 61 00:02:33,000 --> 00:02:35,320 Speaker 1: so confident that it's going to be significant pushback on 62 00:02:35,720 --> 00:02:38,480 Speaker 1: his appointment. And I look, again, I think this is 63 00:02:38,520 --> 00:02:40,840 Speaker 1: about effort, exert control, want to have a majority so 64 00:02:40,880 --> 00:02:43,639 Speaker 1: he can lower rates faster. But again I think it's 65 00:02:43,680 --> 00:02:46,720 Speaker 1: reflective of a concern about where the labor market's going. 66 00:02:46,880 --> 00:02:49,240 Speaker 2: I remember Stephen Mall nominated for a seat on the 67 00:02:49,280 --> 00:02:52,880 Speaker 2: Federal sev The Senate was Republican at the time, and 68 00:02:52,960 --> 00:02:54,880 Speaker 2: he didn't make it, and that was pushback. What's the 69 00:02:54,919 --> 00:02:58,080 Speaker 2: difference between that first time for the president and this second? 70 00:02:58,320 --> 00:03:00,000 Speaker 1: Yeah, yeah, great question, because think this is much brought 71 00:03:00,200 --> 00:03:01,639 Speaker 1: than the Federal Reserve. I think it's about all of 72 00:03:01,639 --> 00:03:03,680 Speaker 1: his nominations. I think that you know, you go to 73 00:03:04,520 --> 00:03:06,800 Speaker 1: his cabinet, and I think it'd be hard to envision 74 00:03:06,880 --> 00:03:09,920 Speaker 1: that RFK would have gotten confirmed in a previous Republican 75 00:03:09,960 --> 00:03:13,720 Speaker 1: controlled Senate. I think this is basically a reflection that 76 00:03:13,760 --> 00:03:17,160 Speaker 1: Republicans are very worried about the president primary. He has 77 00:03:17,240 --> 00:03:20,320 Speaker 1: shown his ability to engage in primaries and exert that control, 78 00:03:20,520 --> 00:03:22,920 Speaker 1: and there's just an enormous fear factor, and he's using 79 00:03:22,960 --> 00:03:25,960 Speaker 1: that with great leverage amongst Senate Republicans. Has the ponce 80 00:03:26,000 --> 00:03:28,760 Speaker 1: he changed, the party's absolutely changed. I mean, I think 81 00:03:28,760 --> 00:03:32,000 Speaker 1: the party has certainly become far more populous. I think, 82 00:03:32,280 --> 00:03:36,200 Speaker 1: you know, when you see basically the federal government looking 83 00:03:36,200 --> 00:03:38,920 Speaker 1: to seize means of production and the biggest cheerleaders are 84 00:03:38,960 --> 00:03:42,640 Speaker 1: Elizabeth Warren and Bernie Sanders, and there's not a Republican 85 00:03:42,680 --> 00:03:45,840 Speaker 1: speaking out about the government taking over ten percent of Intel. 86 00:03:46,200 --> 00:03:49,040 Speaker 1: On the heels of saying, you know, in selling we 87 00:03:49,080 --> 00:03:50,960 Speaker 1: have export controls, we don't want to sell these chips 88 00:03:51,000 --> 00:03:52,680 Speaker 1: to China. Oh, but if you allow us to take 89 00:03:52,680 --> 00:03:55,440 Speaker 1: fifteen percent of the profits of a vidiot, it's okay. 90 00:03:55,640 --> 00:03:57,560 Speaker 1: And on the heels of say we're gonna take golden 91 00:03:57,560 --> 00:04:01,320 Speaker 1: shares of Nippon Steel, US Steel. It's like this is 92 00:04:01,440 --> 00:04:05,000 Speaker 1: clearly moving a direction where the populism and the progressive merge, 93 00:04:05,000 --> 00:04:08,000 Speaker 1: and there's been total silence among center Republicans. 94 00:04:07,480 --> 00:04:11,680 Speaker 3: And centered Republicans with their silence, you say, potentially though, 95 00:04:11,720 --> 00:04:14,680 Speaker 3: they're interested in revamping the Federal Reserve because they're in 96 00:04:14,680 --> 00:04:17,440 Speaker 3: favor of small government. Nothing you just listed in terms 97 00:04:17,480 --> 00:04:20,599 Speaker 3: of taking shares of companies is small government, imriy. 98 00:04:21,240 --> 00:04:22,960 Speaker 1: That's I think one of the shocking parts is that 99 00:04:23,040 --> 00:04:25,839 Speaker 1: I do believe that the first Trump administration was predominantly 100 00:04:25,839 --> 00:04:29,520 Speaker 1: small government. It was deregulatory, it reduced taxes, and I 101 00:04:29,560 --> 00:04:32,080 Speaker 1: feel like the second administration is exerted its influence in 102 00:04:32,160 --> 00:04:35,240 Speaker 1: all sectors of the economy and looking to exert its muscle. 103 00:04:35,240 --> 00:04:38,240 Speaker 1: And I think it's a very different agenda. 104 00:04:37,640 --> 00:04:39,600 Speaker 3: To be more constructive about what they're doing in terms 105 00:04:39,640 --> 00:04:41,920 Speaker 3: of say Intel, there's been a lot of criticism that 106 00:04:42,160 --> 00:04:45,080 Speaker 3: they're mirroring what China does, or this is state capitalism 107 00:04:45,200 --> 00:04:48,320 Speaker 3: like Europeans did in the nineteen sixties. What do you 108 00:04:48,320 --> 00:04:50,760 Speaker 3: actually think Trump is thinking? Is this about building a 109 00:04:50,800 --> 00:04:53,400 Speaker 3: sovereign wealth fund? What is actually the strategy? 110 00:04:53,880 --> 00:04:56,360 Speaker 1: I think that he kind of rejected the sovereign wealth 111 00:04:56,360 --> 00:04:58,520 Speaker 1: fund the other day, but I do think it's concerning 112 00:04:58,560 --> 00:05:03,839 Speaker 1: that the projectory there is basically Saudi Arabia, China, Iran, Russia. 113 00:05:03,839 --> 00:05:06,040 Speaker 1: Those are the ones with sovereign well funds. I certainly 114 00:05:06,080 --> 00:05:08,159 Speaker 1: hope that's not where we're going. I do think it's 115 00:05:08,160 --> 00:05:10,560 Speaker 1: more for in his mind simply about leverage and where 116 00:05:10,600 --> 00:05:13,800 Speaker 1: he can have leverage. But again, the basis of it 117 00:05:13,880 --> 00:05:16,039 Speaker 1: was two weeks before he more or lessens anyway the 118 00:05:16,040 --> 00:05:20,040 Speaker 1: Intel CEOs and Chinese spy and then basically allowing that, 119 00:05:20,480 --> 00:05:22,720 Speaker 1: basically saying Okay, well, we're not so worried about the 120 00:05:22,760 --> 00:05:24,200 Speaker 1: national security and more as long as we can have 121 00:05:24,240 --> 00:05:27,080 Speaker 1: ten percent. It's like, what's the justification. I feel like 122 00:05:27,360 --> 00:05:29,760 Speaker 1: when you do this, you crowd out private investors. I 123 00:05:29,760 --> 00:05:31,280 Speaker 1: don't think this would be good for either side. I 124 00:05:31,279 --> 00:05:34,520 Speaker 1: think you can see intel shock. Intel stock probably declined 125 00:05:34,520 --> 00:05:36,840 Speaker 1: because what private investor wants to engage If they feel 126 00:05:36,839 --> 00:05:38,320 Speaker 1: like the federal government can just come in and take 127 00:05:38,360 --> 00:05:39,880 Speaker 1: ten percent or more. 128 00:05:40,000 --> 00:05:42,800 Speaker 2: They suffering well fenced, the ships ACKed, that's the investment vehicle. 129 00:05:42,880 --> 00:05:44,400 Speaker 2: I didn't see that coming, but that's why this is 130 00:05:44,400 --> 00:05:45,599 Speaker 2: coming apparently. 131 00:05:45,240 --> 00:05:48,200 Speaker 3: Well, yeah, potentially, I mean. And it's also not just 132 00:05:48,360 --> 00:05:51,120 Speaker 3: the examples Mark Short brought up. You also had the 133 00:05:51,160 --> 00:05:54,239 Speaker 3: DoD recently take a stake in a company as well, 134 00:05:54,320 --> 00:05:57,520 Speaker 3: and Howard Ludnik is basically saying that this might be 135 00:05:58,320 --> 00:06:01,120 Speaker 3: potentially direction or travel for other defense companies. 136 00:06:01,120 --> 00:06:02,560 Speaker 2: Mark, this was great. It's going to see you. 137 00:06:02,600 --> 00:06:03,719 Speaker 1: Thanks for breaking it down. 138 00:06:03,920 --> 00:06:06,760 Speaker 2: The traditional Republican view of was playing out down in Washington, 139 00:06:06,800 --> 00:06:07,000 Speaker 2: d C.