1 00:00:01,720 --> 00:00:06,240 Speaker 1: Now from our nation's capital. This is Floomberg's Sound on 2 00:00:07,040 --> 00:00:11,440 Speaker 1: great a report today, the GDP report. Things are looking good. 3 00:00:11,560 --> 00:00:13,119 Speaker 1: If we were to get under the hood, what we 4 00:00:13,160 --> 00:00:16,000 Speaker 1: saw is that there is continued resilience in consumer spending, 5 00:00:16,040 --> 00:00:18,480 Speaker 1: but it didn't eat. The problem is the fourth quarter 6 00:00:18,600 --> 00:00:22,160 Speaker 1: and into two thousand twenty three. Bloomberg Sound on Politics, 7 00:00:22,200 --> 00:00:26,000 Speaker 1: Policy and perspective from DC's top name. Maybe I'm a 8 00:00:26,000 --> 00:00:28,280 Speaker 1: little fashion but I think the marriage I ought to 9 00:00:28,320 --> 00:00:32,520 Speaker 1: be between a man and a woman. It's and Governor 10 00:00:32,560 --> 00:00:35,360 Speaker 1: McMaster wants a banned same sex marriage. You just heard 11 00:00:35,360 --> 00:00:39,199 Speaker 1: that tonight called Floomberg Sound On with Joe Matthew on 12 00:00:39,400 --> 00:00:44,080 Speaker 1: Bloomberg Radio. The Economy strikes back. Welcome to the fastest 13 00:00:44,120 --> 00:00:47,159 Speaker 1: hour in politics. As the White House cheers today's GDP 14 00:00:47,400 --> 00:00:50,720 Speaker 1: reports showing the economy back to growth. But what does 15 00:00:50,760 --> 00:00:53,920 Speaker 1: it mean for interest rates, for the prospect of a recession, 16 00:00:54,640 --> 00:00:56,760 Speaker 1: and for the mid term elections. We'll talk about it 17 00:00:56,760 --> 00:00:59,960 Speaker 1: with Marks Andy, chief economist at Moody's Analytics. Later, Walt 18 00:01:00,040 --> 00:01:03,319 Speaker 1: Street votes with donations, of course, ahead of election day, 19 00:01:03,320 --> 00:01:07,160 Speaker 1: we follow the money with Bloomberg's Shinali Bass. Vladimir Putin 20 00:01:07,200 --> 00:01:10,520 Speaker 1: denies he's planning to use nuclear weapons, just as the 21 00:01:10,520 --> 00:01:14,600 Speaker 1: Pentagon rejects a ban on using nukes for conventional threats. 22 00:01:14,600 --> 00:01:17,120 Speaker 1: We're gonna talk about it all with our signature panel 23 00:01:17,120 --> 00:01:21,160 Speaker 1: Bloomberg Politics contributors Jeannie Chanzano and Rick Davis here for 24 00:01:21,200 --> 00:01:25,080 Speaker 1: the hour the big news this morning before tech earning 25 00:01:25,120 --> 00:01:28,800 Speaker 1: stole the market's attention. Gross domestic product rising by two 26 00:01:28,800 --> 00:01:31,559 Speaker 1: point six percent, rebounding from a negative number. Great news 27 00:01:31,560 --> 00:01:33,319 Speaker 1: for the White House. You heard President Biden as he 28 00:01:33,360 --> 00:01:34,960 Speaker 1: came out the door on his way to the chopper, 29 00:01:35,520 --> 00:01:39,240 Speaker 1: flying today to Syracuse, where he's been upstate New York 30 00:01:40,680 --> 00:01:43,640 Speaker 1: to look at Microns new plant that they're building there 31 00:01:43,680 --> 00:01:47,200 Speaker 1: for computer chips. He was all smiling. Report today, the 32 00:01:47,360 --> 00:01:50,720 Speaker 1: GDP report, Things are looking good. Yeah, as I read 33 00:01:50,720 --> 00:01:54,520 Speaker 1: in the terminal, though economy shows worst yet to come 34 00:01:54,640 --> 00:01:59,320 Speaker 1: as cooling is just starting. The recent rebound is looking 35 00:01:59,400 --> 00:02:02,520 Speaker 1: like a high watermark for the expansion. So what does 36 00:02:02,600 --> 00:02:05,720 Speaker 1: that mean for the economic message coming out of the 37 00:02:05,720 --> 00:02:09,000 Speaker 1: White House? With less than two weeks to go? Mark 38 00:02:09,120 --> 00:02:12,280 Speaker 1: Dandy joins us now for his insights, of course, the 39 00:02:12,360 --> 00:02:17,600 Speaker 1: chief economist at Moody's Analytics, Mark, welcome back. It's good 40 00:02:17,600 --> 00:02:19,360 Speaker 1: to be with you, Joe, thanks for having me. So 41 00:02:19,440 --> 00:02:22,720 Speaker 1: President Biden is calling out the doomsayers. He says, this 42 00:02:22,840 --> 00:02:25,760 Speaker 1: is further evidence today that the recovery is continuing. To 43 00:02:25,840 --> 00:02:31,120 Speaker 1: quote power forward, is he right? Well, it's moving forward. 44 00:02:31,200 --> 00:02:33,919 Speaker 1: I don't know I'd use the word power, but it 45 00:02:34,120 --> 00:02:37,720 Speaker 1: definitely is, uh, moving forward. You know, it does dispel 46 00:02:37,960 --> 00:02:40,720 Speaker 1: I think the concern that the economy is in recession 47 00:02:41,680 --> 00:02:43,480 Speaker 1: nor hasn't been up at this point in time, but 48 00:02:44,160 --> 00:02:46,800 Speaker 1: you know it's struggling to grow. We spoke today with 49 00:02:46,840 --> 00:02:49,480 Speaker 1: Cecilia Rouse, of course heads the White House Council of 50 00:02:49,480 --> 00:02:52,960 Speaker 1: Economic Advisors. Her job today was to make all of 51 00:02:53,000 --> 00:02:55,840 Speaker 1: this sound orderly. Listen to how sheep would it if 52 00:02:55,840 --> 00:02:57,520 Speaker 1: we were to get under the hood. What we saw 53 00:02:57,560 --> 00:03:00,239 Speaker 1: is that there is continued resilience and consumers think but 54 00:03:00,320 --> 00:03:02,760 Speaker 1: it did ease. So that is consistent with what the 55 00:03:02,840 --> 00:03:05,160 Speaker 1: FETE is trying to do. We also so that saw 56 00:03:05,240 --> 00:03:08,320 Speaker 1: that businesses continue to invest, but again that is slowing 57 00:03:08,440 --> 00:03:10,919 Speaker 1: as the FED as we would hope. She seems to 58 00:03:10,960 --> 00:03:14,280 Speaker 1: be pointing to a soft landing mark without using those words. Uh, 59 00:03:14,480 --> 00:03:16,960 Speaker 1: and we know the President still thinks one is possible. 60 00:03:17,040 --> 00:03:20,880 Speaker 1: Do you yeah, I do and she makes a good point. 61 00:03:20,960 --> 00:03:25,639 Speaker 1: I mean, consumers and businesses remain uh in the game. 62 00:03:26,040 --> 00:03:30,119 Speaker 1: They're they're not spending with gusto, they're not investing aggressively, 63 00:03:30,200 --> 00:03:33,160 Speaker 1: but they're doing their part. As long as that continues, 64 00:03:33,280 --> 00:03:36,240 Speaker 1: I think the economy has a fighting chance of getting 65 00:03:36,280 --> 00:03:38,800 Speaker 1: through without a recession. So yeah, I think the soft 66 00:03:38,840 --> 00:03:42,120 Speaker 1: planning is still a real possibility. But you know, obviously, 67 00:03:42,160 --> 00:03:45,120 Speaker 1: having said that, as the feed is raising interest rates 68 00:03:45,120 --> 00:03:47,880 Speaker 1: here aggressively trying to quell inflation, recession risks are going 69 00:03:47,960 --> 00:03:50,000 Speaker 1: to be awfully high over the next year or so. Yeah. 70 00:03:50,040 --> 00:03:52,000 Speaker 1: So if I asked you that question in reverse, you know, 71 00:03:52,080 --> 00:03:55,040 Speaker 1: as a recession still possibly, you would say, yeah, that too, 72 00:03:55,720 --> 00:03:59,040 Speaker 1: good point, that's yes, exactly right. You know, my base case, 73 00:03:59,120 --> 00:04:01,880 Speaker 1: my most likely to area is we make our way through. 74 00:04:02,040 --> 00:04:04,520 Speaker 1: But I wouldn't argue with anyone too strongly they said, no, 75 00:04:04,680 --> 00:04:08,200 Speaker 1: we're going into recession. The biggest contributor to growth here 76 00:04:08,360 --> 00:04:12,000 Speaker 1: was net exports. Mark. Is that is that sustainable? No, 77 00:04:13,600 --> 00:04:15,880 Speaker 1: especially if you're going into a global recession and you're 78 00:04:16,000 --> 00:04:20,600 Speaker 1: counting on other partners to contribute to growth. Yeah, exactly. 79 00:04:20,680 --> 00:04:23,520 Speaker 1: I I think the deficit will continue to wide. We 80 00:04:23,600 --> 00:04:26,520 Speaker 1: got a bit of a repriet here in the third quarter. 81 00:04:26,720 --> 00:04:30,960 Speaker 1: I think that's more timing technical matters. But the trade 82 00:04:31,000 --> 00:04:32,840 Speaker 1: deficit is going to continue to wide now, so that's 83 00:04:32,839 --> 00:04:35,040 Speaker 1: not going to be a source of growth. That'll continue 84 00:04:35,040 --> 00:04:39,960 Speaker 1: to be a headwind going forward. Residential investment was pretty tough. 85 00:04:40,120 --> 00:04:41,800 Speaker 1: I mean, it fell off a cliff here, down over 86 00:04:43,600 --> 00:04:46,800 Speaker 1: continuing a trend. How worried are you about a real 87 00:04:46,880 --> 00:04:49,760 Speaker 1: crash in the housing market in the next year. I 88 00:04:49,839 --> 00:04:52,880 Speaker 1: don't think a crash. I mean, obviously it's correcting. Prices 89 00:04:52,920 --> 00:04:55,320 Speaker 1: are down and i'll continue to fall. I mean, affordability 90 00:04:55,360 --> 00:04:58,360 Speaker 1: has been hammered by the brought up in mortgage race 91 00:04:58,440 --> 00:05:00,719 Speaker 1: from north to seven percent of the a year fixed 92 00:05:00,760 --> 00:05:03,000 Speaker 1: that's more than double what it was just a little 93 00:05:03,000 --> 00:05:06,200 Speaker 1: over a year ago. And that combines with the previously 94 00:05:06,200 --> 00:05:08,160 Speaker 1: a high house prices of people just can't afford that 95 00:05:08,839 --> 00:05:12,240 Speaker 1: the demands falling in. Prices are weakening. But I don't 96 00:05:12,400 --> 00:05:15,920 Speaker 1: expect to crash, primarily because I don't expect a lot 97 00:05:16,000 --> 00:05:21,160 Speaker 1: of foreclosures and distress sales. I mean, borrowers in recent 98 00:05:21,279 --> 00:05:24,680 Speaker 1: years have been a good quality, high credit scores, and 99 00:05:25,200 --> 00:05:28,320 Speaker 1: they're they're taking on plane Vanilla thirty year, fifteen year 100 00:05:29,160 --> 00:05:33,280 Speaker 1: rate mortgages. So I just don't expect a lot of ceclosures. 101 00:05:33,279 --> 00:05:34,560 Speaker 1: And if we don't get a lot of foreclosures, I 102 00:05:34,600 --> 00:05:36,480 Speaker 1: don't I don't think we'll get a crash. A lot 103 00:05:36,560 --> 00:05:38,960 Speaker 1: different than where we were in two thousand seven. Yeah, 104 00:05:39,040 --> 00:05:41,480 Speaker 1: there's no comparison. You know, back then, the quality of 105 00:05:41,480 --> 00:05:45,400 Speaker 1: the borrowers very low. It's prime obviously, and the mortgage 106 00:05:45,440 --> 00:05:49,040 Speaker 1: products were just bizarre, you know, two year exploding arms, 107 00:05:49,839 --> 00:05:52,080 Speaker 1: uh a gam loans, I mean, just a lot of 108 00:05:52,120 --> 00:05:55,640 Speaker 1: weird stuff that didn't perform well when it came under 109 00:05:55,640 --> 00:05:57,880 Speaker 1: a lot of stress. But a thirty year mortgage, the 110 00:05:57,920 --> 00:06:00,360 Speaker 1: fifteen year mortgage, you know, the race took a state 111 00:06:00,680 --> 00:06:03,200 Speaker 1: low for these borrowers, and so I think that takes 112 00:06:03,200 --> 00:06:05,480 Speaker 1: a lot of pressure off. Well, Mark, Andy, what do 113 00:06:05,560 --> 00:06:07,000 Speaker 1: we have to look forward to between now in the 114 00:06:07,040 --> 00:06:08,920 Speaker 1: midterms we talked so much about I guess the White 115 00:06:08,960 --> 00:06:12,040 Speaker 1: House and Democrats will We'll try to turn this GDP 116 00:06:12,200 --> 00:06:14,200 Speaker 1: reported to a good story today and say no, by 117 00:06:14,240 --> 00:06:16,120 Speaker 1: the way, we were not in a recession, as you 118 00:06:16,240 --> 00:06:18,640 Speaker 1: made clear. The next couple of weeks though, we're creeping 119 00:06:18,720 --> 00:06:21,360 Speaker 1: up on another FED meeting. What will happen that day 120 00:06:21,560 --> 00:06:24,880 Speaker 1: as people are prepared to vote, Well, they're gonna raise rates. 121 00:06:24,920 --> 00:06:26,880 Speaker 1: They's called us pretty clearly that they're going to raise 122 00:06:27,200 --> 00:06:31,000 Speaker 1: three quarters or percentage point that Yeah, I don't know 123 00:06:31,080 --> 00:06:33,760 Speaker 1: anything that would change that does a hurdle for changing 124 00:06:33,800 --> 00:06:35,720 Speaker 1: that is awfully high. And then we get one more 125 00:06:35,800 --> 00:06:39,160 Speaker 1: data point tomorrow, the Employment cost Index, which is important 126 00:06:39,200 --> 00:06:42,760 Speaker 1: because that's the best measure of wage growth and the 127 00:06:42,839 --> 00:06:45,200 Speaker 1: FED is trying to slow the job market. Slow that 128 00:06:46,440 --> 00:06:49,840 Speaker 1: get inflation back in. So that's that's an important number, 129 00:06:49,960 --> 00:06:53,480 Speaker 1: but it's hard to envisage any number that would just 130 00:06:53,600 --> 00:06:56,160 Speaker 1: waged the Fed from not raising great three quarters from 131 00:06:56,160 --> 00:06:59,160 Speaker 1: a point when they beat in the week next week. 132 00:07:00,120 --> 00:07:03,400 Speaker 1: Considerating everything we hear from the White House about the 133 00:07:03,440 --> 00:07:08,400 Speaker 1: strength of the economy, historically strong job market, historically low unemployment. 134 00:07:08,440 --> 00:07:11,680 Speaker 1: Then you hear from Republicans this is the worst economy. 135 00:07:12,400 --> 00:07:15,679 Speaker 1: Inflation is through the roof, and it's become the biggest 136 00:07:15,760 --> 00:07:17,920 Speaker 1: issue on the campaign trail. A lot of people cite 137 00:07:17,960 --> 00:07:20,840 Speaker 1: the economy as their biggest concern when they talk about 138 00:07:21,400 --> 00:07:27,680 Speaker 1: preparing to vote in November. Who's right, Well, they're both right, Yeah, 139 00:07:27,800 --> 00:07:31,120 Speaker 1: it spends much you know, your prism I mean, the 140 00:07:31,320 --> 00:07:34,040 Speaker 1: Democrats are right that the job markets very strong, everyone 141 00:07:34,080 --> 00:07:37,520 Speaker 1: has a job. Unapployment is very low. Layoffs are about 142 00:07:37,520 --> 00:07:39,280 Speaker 1: as low as they've ever been, so that's all good. 143 00:07:40,120 --> 00:07:43,440 Speaker 1: But if people can't afford to live, and that doesn't matter, right, Yeah, 144 00:07:43,480 --> 00:07:45,360 Speaker 1: well that's the point. I mean, Republicans are right, and 145 00:07:45,400 --> 00:07:48,880 Speaker 1: inflation is just painfully high, and you know that that 146 00:07:49,080 --> 00:07:51,640 Speaker 1: we can't stand that for very long. Instead, the fetch 147 00:07:51,800 --> 00:07:55,080 Speaker 1: raising industrates very aggressively to quell it. So, you know, 148 00:07:56,160 --> 00:07:59,120 Speaker 1: I think it spends on you know, your your perspective 149 00:07:59,160 --> 00:08:03,520 Speaker 1: and your prism, which part of the economic telephonpor touching, um, 150 00:08:03,920 --> 00:08:06,080 Speaker 1: you know, But you know, I think it's fair to 151 00:08:06,160 --> 00:08:08,800 Speaker 1: say over the next twelve eighteen months is going to 152 00:08:09,080 --> 00:08:11,680 Speaker 1: feel a lot more uncomfortable that you know, more and 153 00:08:11,720 --> 00:08:13,120 Speaker 1: more people are going to think this is a bad 154 00:08:13,160 --> 00:08:15,840 Speaker 1: economy rather than a good one because the FED has 155 00:08:15,920 --> 00:08:18,960 Speaker 1: to slow growth, has to get inflation down, and that's 156 00:08:18,960 --> 00:08:21,480 Speaker 1: going to take some some pain and suffering. I think 157 00:08:21,560 --> 00:08:26,200 Speaker 1: financially we're strapping in Mark Sandy, chief economist Boody's Analytics. 158 00:08:26,280 --> 00:08:28,040 Speaker 1: Many thanks for jumping on the line with us. As 159 00:08:28,080 --> 00:08:31,920 Speaker 1: always on Bloomberd anytime, Joe, Thanks for the opportunity. So 160 00:08:32,080 --> 00:08:34,040 Speaker 1: some of the panel just to get a quick take 161 00:08:34,080 --> 00:08:37,880 Speaker 1: from Rick Davis and Jeanie Schanzano Bloomberg Politics contributors of course, 162 00:08:37,920 --> 00:08:40,920 Speaker 1: our signature panel here on sound On. It sure looks 163 00:08:40,960 --> 00:08:42,640 Speaker 1: like the White House is trying to keep the ball 164 00:08:42,679 --> 00:08:44,920 Speaker 1: in the air here. You know, everyone's onto Amazon and 165 00:08:45,000 --> 00:08:49,280 Speaker 1: Apple earnings. But I mentioned that tweet from the President Rick. 166 00:08:49,400 --> 00:08:52,360 Speaker 1: For months, doomsayers have been arguing the economy is in 167 00:08:52,400 --> 00:08:55,760 Speaker 1: a recession, indicating that this proves it is not, and 168 00:08:55,840 --> 00:08:58,920 Speaker 1: he's they're they're calling out Republicans in a news release 169 00:08:59,400 --> 00:09:02,760 Speaker 1: in fact checking some of them, including Kevin Brady, who 170 00:09:02,800 --> 00:09:06,079 Speaker 1: called the g d P report uh the claiming it 171 00:09:06,200 --> 00:09:11,400 Speaker 1: was about ghost growth. The politics behind this are running 172 00:09:11,440 --> 00:09:13,559 Speaker 1: pretty thick. Here is this good news? Are bad news? Rick? 173 00:09:14,280 --> 00:09:15,880 Speaker 1: You know? Look, I mean I think this is gonna 174 00:09:15,920 --> 00:09:18,520 Speaker 1: be a good news day for him for the President. 175 00:09:18,640 --> 00:09:20,839 Speaker 1: He obviously jumped on it and tried to drive it 176 00:09:20,920 --> 00:09:23,160 Speaker 1: first thing this morning, which was smart to get out 177 00:09:23,160 --> 00:09:25,640 Speaker 1: there and define the numbers the way you want them, because, 178 00:09:25,640 --> 00:09:28,280 Speaker 1: as Marks Andy pointed out, I mean it's just in 179 00:09:28,360 --> 00:09:30,760 Speaker 1: the eye of the beholder, right, I mean, if you're Democrats, 180 00:09:30,800 --> 00:09:34,400 Speaker 1: you can crow about and and spending, and if you're 181 00:09:34,480 --> 00:09:36,880 Speaker 1: Republicans you can talk about the pain and inflation. Um. 182 00:09:37,280 --> 00:09:39,360 Speaker 1: The reality is people have gotten used to the pain 183 00:09:39,440 --> 00:09:42,640 Speaker 1: of inflation, right, no matter what happens. If you still 184 00:09:42,679 --> 00:09:45,720 Speaker 1: see those grocery prices up, if you see gas prices 185 00:09:45,720 --> 00:09:48,720 Speaker 1: start taking up, um, you know you feel pinching your wallet. 186 00:09:49,000 --> 00:09:51,280 Speaker 1: You're not taking that vacation this winter. You know, you're 187 00:09:51,320 --> 00:09:54,079 Speaker 1: gotta put on those skis. That's that's what you're feeling 188 00:09:54,120 --> 00:09:58,560 Speaker 1: at home. And all this just becomes noise, a noise. 189 00:09:59,360 --> 00:10:01,480 Speaker 1: We're not talking about g d P over dinner tonight. 190 00:10:01,520 --> 00:10:04,800 Speaker 1: I'm assuming, uh, Genie. And the fact of the matter is, 191 00:10:04,880 --> 00:10:07,560 Speaker 1: if the White House has to celebrate it not being 192 00:10:07,679 --> 00:10:11,880 Speaker 1: a recession, you've sort of lost that war already, haven't you. 193 00:10:12,520 --> 00:10:15,719 Speaker 1: You have And this is a really difficult sell for 194 00:10:15,840 --> 00:10:18,480 Speaker 1: the White House. Obviously, the g d P up growth 195 00:10:18,679 --> 00:10:21,319 Speaker 1: is good. But you know, the reality is this is 196 00:10:21,440 --> 00:10:25,719 Speaker 1: the old tale of two realities, macro versus micro. The 197 00:10:25,840 --> 00:10:28,400 Speaker 1: macro numbers are good, look at the micro. Look at 198 00:10:28,440 --> 00:10:31,280 Speaker 1: the US Census household servit that Bloomberg reported on just 199 00:10:31,440 --> 00:10:34,880 Speaker 1: the other day overt of households feel it somewhat are 200 00:10:35,040 --> 00:10:38,280 Speaker 1: very difficult to cover their expenses. That is the highest 201 00:10:38,360 --> 00:10:41,959 Speaker 1: number we've seen in to almost three years. That's the 202 00:10:42,200 --> 00:10:45,120 Speaker 1: reality people are feeling on the ground. Mortgage rates topping 203 00:10:45,240 --> 00:10:48,040 Speaker 1: seven percent, and the White House is, you know, required 204 00:10:48,080 --> 00:10:50,599 Speaker 1: now to go out and celebrate these good numbers. So 205 00:10:50,800 --> 00:10:53,800 Speaker 1: how you do that is a very difficult dance. And 206 00:10:54,240 --> 00:10:56,839 Speaker 1: you know it's the reality. The difference between an economist 207 00:10:56,880 --> 00:11:00,640 Speaker 1: and a political scientist, or or somebody looking at these numbers, 208 00:11:00,640 --> 00:11:03,319 Speaker 1: They're looking at very different numbers which tell two very 209 00:11:03,360 --> 00:11:06,079 Speaker 1: different tales. The presidents on his way to Pennsylvania, Rick 210 00:11:06,200 --> 00:11:09,720 Speaker 1: is telling this story make him sound tone deaf? Uh 211 00:11:09,880 --> 00:11:12,400 Speaker 1: it could? I mean, if he doesn't, If he starts saying, oh, 212 00:11:12,480 --> 00:11:14,880 Speaker 1: you're so much better off today because of GDP growth, 213 00:11:14,880 --> 00:11:17,319 Speaker 1: people are gonna scratch their heads. Well that'll be the 214 00:11:17,440 --> 00:11:20,800 Speaker 1: conversation tomorrow. Genie and Rick with us. Our signature panel 215 00:11:20,920 --> 00:11:26,160 Speaker 1: is back with more from here in Washington. I'm Joe 216 00:11:26,240 --> 00:11:29,480 Speaker 1: Matthew check traffic and markets on the way. This is Bloomberg. 217 00:11:33,400 --> 00:11:37,199 Speaker 1: You're listening to Bloomberg. You sound on with Joe Matthew 218 00:11:37,600 --> 00:11:42,480 Speaker 1: on Bloomberg Radio. The White House trying trying to tell 219 00:11:42,520 --> 00:11:46,319 Speaker 1: a good story about the economy, pointing to strong numbers 220 00:11:46,400 --> 00:11:48,960 Speaker 1: in the job market. Today's g d P report trying 221 00:11:49,000 --> 00:11:52,360 Speaker 1: to fan those flames a little bit before the election. 222 00:11:52,480 --> 00:11:55,079 Speaker 1: Knowing us we're all reading here on the terminal, this 223 00:11:55,200 --> 00:11:59,360 Speaker 1: GDP report today shows well, the worst is yet to come. 224 00:12:00,200 --> 00:12:02,800 Speaker 1: This is the high water mark for the expansion right here, 225 00:12:02,920 --> 00:12:06,240 Speaker 1: right now. A lot of people are predicting a recession 226 00:12:07,120 --> 00:12:10,000 Speaker 1: next year, including some very smart people here at Bloomberg 227 00:12:10,800 --> 00:12:15,800 Speaker 1: in our economics department. It's pretty grim. The President today 228 00:12:15,880 --> 00:12:18,160 Speaker 1: taking the road on the word on the road, I 229 00:12:18,160 --> 00:12:20,839 Speaker 1: should say to Syracuse, that's where Microns building, that big 230 00:12:21,640 --> 00:12:24,920 Speaker 1: chip plant is up there, trying to again get the 231 00:12:25,120 --> 00:12:29,360 Speaker 1: story told. Just as we learned that House Republicans are 232 00:12:29,440 --> 00:12:34,000 Speaker 1: launching an investigation in what they are calling potential misuse 233 00:12:34,679 --> 00:12:38,720 Speaker 1: of the Strategic Petroleum Reserve, one of the other levels 234 00:12:38,800 --> 00:12:41,800 Speaker 1: that the White House has been pulling here to try 235 00:12:41,880 --> 00:12:46,880 Speaker 1: to create a better economic environment before everyone votes. This 236 00:12:47,400 --> 00:12:50,560 Speaker 1: is just the beginning, right The Oversight Committee is gonna 237 00:12:50,559 --> 00:12:52,959 Speaker 1: be busy. Let's reassemble the panel. Rick Davis and Jennie 238 00:12:53,000 --> 00:12:56,400 Speaker 1: Chanzaniol Boomberg Politics contributors UH the White House knows this 239 00:12:56,480 --> 00:12:58,199 Speaker 1: kind of stuff is coming here, right, Genie, it's just 240 00:12:58,240 --> 00:13:00,200 Speaker 1: a matter of getting through the mid terms, and it's 241 00:13:00,240 --> 00:13:03,640 Speaker 1: going to be investigation heaven. Yeah, and Joe you just 242 00:13:03,800 --> 00:13:06,319 Speaker 1: said it as good as it gets, both economically and 243 00:13:06,640 --> 00:13:10,319 Speaker 1: you know, it's hard to imagine, but maybe even politically 244 00:13:10,400 --> 00:13:13,560 Speaker 1: for this White House because as we expect the House 245 00:13:13,679 --> 00:13:17,319 Speaker 1: to move Republican, we are going to be looking at 246 00:13:17,520 --> 00:13:21,160 Speaker 1: these kinds of investigations, this kind of oversight of we're seeing, 247 00:13:21,480 --> 00:13:24,960 Speaker 1: you know, reported about the spr but also we're hearing 248 00:13:25,000 --> 00:13:29,440 Speaker 1: talk about a potential Biden impeachment. That's you know, there's 249 00:13:29,480 --> 00:13:31,920 Speaker 1: already been calls for that we know before. But the 250 00:13:32,040 --> 00:13:33,880 Speaker 1: minute they have the numbers to do that, it's going 251 00:13:33,920 --> 00:13:36,640 Speaker 1: to be very hard for Kevin McCarthy to resist that call. 252 00:13:37,080 --> 00:13:41,079 Speaker 1: So the administration is facing real headwinds visa VI the House, 253 00:13:41,440 --> 00:13:43,800 Speaker 1: and that's going to be true whether the Democrats are 254 00:13:43,800 --> 00:13:46,400 Speaker 1: able to narrowly retain the Senate or not the House 255 00:13:46,440 --> 00:13:48,960 Speaker 1: can go forward with this oversight. Is this a real 256 00:13:49,440 --> 00:13:51,640 Speaker 1: investigation or would it be rick or is this just 257 00:13:51,720 --> 00:13:54,040 Speaker 1: the type of messaging that will we should expect from 258 00:13:54,160 --> 00:13:57,280 Speaker 1: a Republican House. You know, it just depends upon the 259 00:13:57,840 --> 00:14:00,200 Speaker 1: leadership of the committee and whether or not they at 260 00:14:00,240 --> 00:14:02,240 Speaker 1: this as a biparson opportunity to try and get to 261 00:14:02,240 --> 00:14:03,679 Speaker 1: the bottom of I mean, like, there are a lot 262 00:14:03,720 --> 00:14:05,520 Speaker 1: of people on both sides of the aisle who are 263 00:14:05,520 --> 00:14:09,640 Speaker 1: concerned about these repeated releases of the Strategic Patrollum reserve, 264 00:14:10,120 --> 00:14:12,760 Speaker 1: not for the stated reason of the reserve, which is 265 00:14:12,920 --> 00:14:15,320 Speaker 1: to ensure that we have a ready supply of gas 266 00:14:15,360 --> 00:14:18,079 Speaker 1: in case of shortages, but to manipulate price. And so 267 00:14:18,640 --> 00:14:21,160 Speaker 1: their Republicans on that committee aren't the only one asking 268 00:14:21,240 --> 00:14:23,200 Speaker 1: questions is whether or not we're supposed to be using 269 00:14:23,240 --> 00:14:26,120 Speaker 1: this pro for this House Committee on Oversight and Reform. 270 00:14:26,160 --> 00:14:28,160 Speaker 1: I mean, they would have subpoena power because it is 271 00:14:28,200 --> 00:14:31,280 Speaker 1: it worth using that power in this particular case. We're talking, 272 00:14:31,360 --> 00:14:33,960 Speaker 1: as Genie said, all the way up to the idea 273 00:14:34,040 --> 00:14:36,560 Speaker 1: of impeachment. You know, look, I mean you only have 274 00:14:36,640 --> 00:14:39,080 Speaker 1: to use the subpoena if people aren't willing to cooperate. 275 00:14:39,160 --> 00:14:41,800 Speaker 1: I mean, no indication at this stage at Jennifer Granholm, 276 00:14:41,840 --> 00:14:45,080 Speaker 1: for instance, Secretary of Energy is going to like uh 277 00:14:45,400 --> 00:14:49,320 Speaker 1: avoid uh testifying to Congress. So I think it's you 278 00:14:49,400 --> 00:14:51,920 Speaker 1: gotta wait and see what people's reactions are to this. 279 00:14:52,120 --> 00:14:54,440 Speaker 1: But uh, look, Republicans aren't the only ones who've got 280 00:14:54,440 --> 00:14:56,440 Speaker 1: concerns about it. I mean, you know, even the folks 281 00:14:56,520 --> 00:14:58,240 Speaker 1: running O pick of said, Hey, you guys are trying 282 00:14:58,280 --> 00:15:00,840 Speaker 1: to do price manipulation. Say problem you have with us, 283 00:15:00,920 --> 00:15:03,800 Speaker 1: now you're trying to do the same thing. Well, Jenny, 284 00:15:03,800 --> 00:15:06,480 Speaker 1: I don't know if we're gonna be talking so much 285 00:15:06,520 --> 00:15:10,120 Speaker 1: about impeaching Joe Biden. Marjorie Taylor Green would tell you that, 286 00:15:10,880 --> 00:15:13,840 Speaker 1: but there are serious conversations about an impeachment beginning with 287 00:15:13,960 --> 00:15:17,080 Speaker 1: the Secretary of Homeland Security. Right, make this a border issue. 288 00:15:17,400 --> 00:15:19,560 Speaker 1: I just wonder why spending time on the spr when 289 00:15:19,600 --> 00:15:21,440 Speaker 1: the Biden administration is already out with a plan to 290 00:15:21,480 --> 00:15:25,360 Speaker 1: start refilling it. Well, you know, there has been by 291 00:15:25,720 --> 00:15:30,080 Speaker 1: partisan rather bickering on the stockpile for a long time, 292 00:15:30,560 --> 00:15:33,800 Speaker 1: so this is nothing new. It's always been a politicized issue. 293 00:15:34,080 --> 00:15:37,080 Speaker 1: We heard John Barosso from Wyoming come out when when 294 00:15:37,160 --> 00:15:40,400 Speaker 1: the Biden administrations first announced what it was doing, and 295 00:15:40,560 --> 00:15:42,520 Speaker 1: he said something to the effect of this is not 296 00:15:42,720 --> 00:15:46,880 Speaker 1: for a Democrat election crisis. And so these are questions 297 00:15:46,920 --> 00:15:49,000 Speaker 1: that they're going to ask. But what they haven't addressed 298 00:15:49,120 --> 00:15:51,880 Speaker 1: is the fact that presidents from both parties have ordered 299 00:15:51,920 --> 00:15:56,720 Speaker 1: sales from this. That's after the First Gulf War, Hurricane Katrina, Libya, 300 00:15:56,840 --> 00:15:59,480 Speaker 1: and so on. And so this is a long time 301 00:15:59,680 --> 00:16:02,920 Speaker 1: issue that has you know, erupted many times over the 302 00:16:03,000 --> 00:16:06,000 Speaker 1: last several decades, and we'll continue to But to your point, 303 00:16:06,400 --> 00:16:09,960 Speaker 1: this type of investigation at all levels is going to continue. 304 00:16:10,120 --> 00:16:14,440 Speaker 1: You mentioned Alejandro Majorchis. People talk about an Anthony B Lincoln, 305 00:16:14,760 --> 00:16:17,560 Speaker 1: Marrick Garland certainly is going to get hit, Kamala Harris, 306 00:16:17,840 --> 00:16:20,760 Speaker 1: and of course Joe Biden. Those are probably the top five. 307 00:16:21,080 --> 00:16:24,560 Speaker 1: We're going to see investigations, talk of impeachment for the 308 00:16:24,680 --> 00:16:27,000 Speaker 1: next two years if the Republicans take the House. And 309 00:16:27,120 --> 00:16:29,600 Speaker 1: that's the reality. And you know, there was a time 310 00:16:29,640 --> 00:16:32,360 Speaker 1: we all lived through no impeachments. We're going to be 311 00:16:32,480 --> 00:16:35,920 Speaker 1: living through impeachment. Heaven or heaven talk of impeachment for 312 00:16:36,000 --> 00:16:40,480 Speaker 1: a long time. Rick, The national average gallon of gas 313 00:16:40,680 --> 00:16:45,160 Speaker 1: today triple a three dollars seventy six cents. The White 314 00:16:45,200 --> 00:16:46,920 Speaker 1: House will tell you what is that that's down a 315 00:16:47,120 --> 00:16:49,600 Speaker 1: dollar in fifteen or something like that. Where where does 316 00:16:49,640 --> 00:16:53,800 Speaker 1: that factor into people's decision making? It's it's obviously not 317 00:16:53,920 --> 00:16:55,720 Speaker 1: as low as people wanted, but it has come down 318 00:16:55,800 --> 00:16:57,880 Speaker 1: quite a bit. Yeah, it's come down quite a bit. 319 00:16:58,280 --> 00:17:00,440 Speaker 1: People got stung over the summer when it was so high. 320 00:17:01,000 --> 00:17:05,520 Speaker 1: I think that obviously is better above five in June. Yeah, 321 00:17:05,560 --> 00:17:07,600 Speaker 1: above five, And it was painful. I mean we saw 322 00:17:07,760 --> 00:17:10,440 Speaker 1: people's reaction. I mean it was coming out in the surveys. 323 00:17:10,480 --> 00:17:13,960 Speaker 1: Two people were angry. Uh, and so uh, this is 324 00:17:14,000 --> 00:17:16,320 Speaker 1: an improvement to that. But then the offset to that 325 00:17:16,520 --> 00:17:19,800 Speaker 1: or food prices where they have skyrocketed, and so you 326 00:17:19,840 --> 00:17:21,640 Speaker 1: know what you're saving now for a gallon of gas, 327 00:17:21,720 --> 00:17:25,040 Speaker 1: you're spending on malk and and bread. So the tradeoff 328 00:17:25,119 --> 00:17:27,760 Speaker 1: isn't good. Well, you know we've we've just found that 329 00:17:27,920 --> 00:17:31,200 Speaker 1: direct correlation with gas prices and the president's approval rating, 330 00:17:31,240 --> 00:17:33,320 Speaker 1: both of which are going to factor in to the 331 00:17:33,400 --> 00:17:37,280 Speaker 1: results on election night, whenever those are going to be complete. 332 00:17:37,320 --> 00:17:39,800 Speaker 1: We could be talking about it for weeks. A lot 333 00:17:39,880 --> 00:17:42,800 Speaker 1: more to follow as we turned to Wall Street votes 334 00:17:43,000 --> 00:17:46,320 Speaker 1: and follow the money with Shinali next, I'm Joe Matthew. 335 00:17:46,440 --> 00:17:50,800 Speaker 1: This is Bloomberg. So you know, everyone wants to pick 336 00:17:50,840 --> 00:17:52,840 Speaker 1: a winner here in Wall Street is no exception. As 337 00:17:52,880 --> 00:17:56,480 Speaker 1: we look ahead to election night. Even if sometimes the 338 00:17:56,520 --> 00:17:58,760 Speaker 1: politics don't agree, everyone wants to be in good favor 339 00:17:58,880 --> 00:18:02,520 Speaker 1: once the winner are chosen. So where's the money going 340 00:18:02,600 --> 00:18:05,439 Speaker 1: this time? Bloomberg's Shanali Bossik has been doing great reporting 341 00:18:05,520 --> 00:18:08,240 Speaker 1: on this. She has the cell phone numbers of the 342 00:18:08,320 --> 00:18:11,560 Speaker 1: biggest bankers on Wall Street and she joins us now, Shanalie, welcome. 343 00:18:12,040 --> 00:18:14,880 Speaker 1: What issues are Wall Street focused on? What's most important 344 00:18:14,960 --> 00:18:17,720 Speaker 1: right now? It's so interesting because there are so many 345 00:18:17,800 --> 00:18:20,960 Speaker 1: mixed feelings on Wall Street between personal interests and professional ones. 346 00:18:21,200 --> 00:18:22,960 Speaker 1: And when you look at it, the first two years 347 00:18:23,000 --> 00:18:25,880 Speaker 1: of the Biden administration has really been defined on Wall 348 00:18:25,920 --> 00:18:29,760 Speaker 1: Street by tough regulation, a historic amount of rulemaking by 349 00:18:30,160 --> 00:18:33,480 Speaker 1: SEC Chair Gary Gensler, as the House Republicans really like 350 00:18:33,600 --> 00:18:37,560 Speaker 1: to point out with some regularity, And so what does 351 00:18:37,600 --> 00:18:40,119 Speaker 1: that mean for the second half when there's kind of 352 00:18:40,200 --> 00:18:43,680 Speaker 1: potentially more control in Congress from the Republican side of 353 00:18:43,720 --> 00:18:46,000 Speaker 1: the party. Does that mean that some of these regulators 354 00:18:46,040 --> 00:18:48,920 Speaker 1: particular can be reined in? Can that mean their budgets 355 00:18:48,960 --> 00:18:53,200 Speaker 1: can be constrained? And those are certainly things that a 356 00:18:53,280 --> 00:18:55,760 Speaker 1: lot of Wall Street is looking out for and in 357 00:18:55,920 --> 00:18:58,879 Speaker 1: some cases pressing for. So that seems to fulfill the 358 00:18:58,960 --> 00:19:04,080 Speaker 1: stereotype a bit at Wall Streets at least views Republicans 359 00:19:04,320 --> 00:19:07,080 Speaker 1: as more business friendly certainly when it comes to regulations. 360 00:19:07,119 --> 00:19:08,680 Speaker 1: To your point, is it is it fair to say 361 00:19:08,720 --> 00:19:12,199 Speaker 1: that out loud? Absolutely? And listen what does this mean. 362 00:19:12,320 --> 00:19:14,399 Speaker 1: It means the eyes are all on the SEC and 363 00:19:14,480 --> 00:19:17,320 Speaker 1: who controls the budget there and who regulates them. The 364 00:19:17,400 --> 00:19:20,760 Speaker 1: eyes are all on the FED, of course, and what 365 00:19:20,920 --> 00:19:23,400 Speaker 1: kind of pressure there is on the Fed to control 366 00:19:23,480 --> 00:19:26,560 Speaker 1: the inflation story versus the direction of rates and you 367 00:19:26,640 --> 00:19:28,840 Speaker 1: know what, what levers do they actually have at the 368 00:19:28,960 --> 00:19:30,720 Speaker 1: end of the day. And I had to push this 369 00:19:30,880 --> 00:19:32,639 Speaker 1: right to the lawmakers to watch. How can you not 370 00:19:33,119 --> 00:19:35,760 Speaker 1: because sometimes if not about just what seats are up, 371 00:19:36,040 --> 00:19:38,920 Speaker 1: sometimes it's about who is gaining more power as some 372 00:19:39,040 --> 00:19:41,280 Speaker 1: of these seats start to change. And one of the 373 00:19:41,320 --> 00:19:42,920 Speaker 1: person people that comes up in a lot of my 374 00:19:43,000 --> 00:19:47,520 Speaker 1: conversations as Senator Susan Collins because of her place as 375 00:19:47,560 --> 00:19:50,879 Speaker 1: taking over as the top Republican on the Appropriations Committee. Meanwhile, 376 00:19:50,920 --> 00:19:54,119 Speaker 1: Patrick mckenry on the House Financial Service Committee is also 377 00:19:54,440 --> 00:19:58,080 Speaker 1: very highly watched. And Jason Smith, who serves on Budget 378 00:19:58,160 --> 00:20:01,800 Speaker 1: and Ways and Means, and so of course you know, 379 00:20:02,119 --> 00:20:04,400 Speaker 1: let's see how the tides turn after the mid terms. 380 00:20:04,480 --> 00:20:07,479 Speaker 1: But these are certainly folks that are considered allies, if 381 00:20:07,520 --> 00:20:09,359 Speaker 1: you will, of a lot of the agenda on Wall Street, 382 00:20:09,440 --> 00:20:12,000 Speaker 1: does chelig does Wall Street care as much as we 383 00:20:12,400 --> 00:20:16,040 Speaker 1: like to think about crypto regulations or or or just 384 00:20:16,160 --> 00:20:18,639 Speaker 1: just so much other stuff to be focused on right now. Well, 385 00:20:18,680 --> 00:20:21,879 Speaker 1: what's interesting is some of the biggest donors this cycle 386 00:20:22,000 --> 00:20:26,400 Speaker 1: are coming from the crypto industry. Think Sam Bankman Freed. 387 00:20:26,440 --> 00:20:28,359 Speaker 1: Although a lot of the giving had gone to primaries, 388 00:20:28,480 --> 00:20:31,080 Speaker 1: you have Sam big Madrid emerging as this massive political donor, 389 00:20:31,200 --> 00:20:33,680 Speaker 1: mostly known in the democratic sphere. Some of the money 390 00:20:33,720 --> 00:20:35,520 Speaker 1: goes to crypto interests, but a lot of it is 391 00:20:35,560 --> 00:20:38,760 Speaker 1: said to go to pandemic preparedness. But his number two 392 00:20:38,880 --> 00:20:42,240 Speaker 1: guys or you know, one of his deputies rather Ryan Salem, 393 00:20:42,440 --> 00:20:45,520 Speaker 1: who works at the Bohemian subsidiary. But you know also 394 00:20:45,600 --> 00:20:48,480 Speaker 1: in American himself, he is one of the top Republican 395 00:20:48,640 --> 00:20:51,879 Speaker 1: donors in the United States now. And so you have 396 00:20:52,040 --> 00:20:55,040 Speaker 1: two folks in the same kind of kind of world 397 00:20:55,160 --> 00:20:58,040 Speaker 1: here who are fighting for two different things. This is 398 00:20:58,119 --> 00:21:01,080 Speaker 1: fascinating and I love I of that You're dropping names 399 00:21:01,119 --> 00:21:03,200 Speaker 1: on the air here. What are they What are you 400 00:21:03,400 --> 00:21:08,159 Speaker 1: hearing over the clinking of cocktails when comes up? What 401 00:21:08,280 --> 00:21:11,159 Speaker 1: does Wall Street think about another Donald Trump run or 402 00:21:11,280 --> 00:21:13,239 Speaker 1: or is that not part of the conversation right now? Well, 403 00:21:13,320 --> 00:21:15,359 Speaker 1: I think it's very, very very much a part of 404 00:21:15,400 --> 00:21:17,440 Speaker 1: the conversation. And I thought it was going to be 405 00:21:17,560 --> 00:21:19,520 Speaker 1: more of the conversation than the mid terms, but a 406 00:21:19,600 --> 00:21:22,440 Speaker 1: lot of government affairs offices tell me that the midterms 407 00:21:22,480 --> 00:21:25,280 Speaker 1: matter more. And the reason being is because the lawmakers, 408 00:21:25,320 --> 00:21:26,760 Speaker 1: at the end of the day have the control over 409 00:21:26,840 --> 00:21:29,880 Speaker 1: the policy, but the president has control over the over 410 00:21:29,960 --> 00:21:32,920 Speaker 1: the national discourse and rhetoric, and the question of Trump 411 00:21:33,040 --> 00:21:36,159 Speaker 1: is very polarizing, even on Wall Street. And that's the 412 00:21:36,200 --> 00:21:39,160 Speaker 1: reality we're hearing that people are giving more, for example, 413 00:21:39,520 --> 00:21:42,640 Speaker 1: quietly than they used to, more quietly than they used 414 00:21:42,640 --> 00:21:45,440 Speaker 1: to because of the polarization even among their peers on 415 00:21:45,480 --> 00:21:47,840 Speaker 1: Wall Street. Well, that makes a lot of sense. She'll 416 00:21:47,880 --> 00:21:49,560 Speaker 1: be with us on election and I can't wait to 417 00:21:50,040 --> 00:21:54,439 Speaker 1: have you with us. Chanali Bassik from Bloomberg Finance correspondent 418 00:21:54,480 --> 00:21:57,560 Speaker 1: talking a lot about politics these days, and Shanali, thank you, 419 00:21:58,160 --> 00:22:01,199 Speaker 1: one of the hardest working people in the newsroom. As 420 00:22:01,280 --> 00:22:04,080 Speaker 1: we reassemble the panel. Rick Davis has a good sense 421 00:22:04,160 --> 00:22:06,320 Speaker 1: of this with his role as a partner at Stone 422 00:22:06,359 --> 00:22:08,880 Speaker 1: Court Capital. Jeanie Schanzano is with us as well Bloomberg 423 00:22:08,920 --> 00:22:12,520 Speaker 1: Politics contributors. Where do you see the money going? Rick? 424 00:22:12,560 --> 00:22:14,520 Speaker 1: It's interesting, you know, is this more about influencing the 425 00:22:14,600 --> 00:22:17,320 Speaker 1: outcome of a race or investing in the in the 426 00:22:17,440 --> 00:22:20,880 Speaker 1: potential good graces of a potential winner. You know, that's 427 00:22:20,880 --> 00:22:23,119 Speaker 1: a it's a really good point. Uh. A lot of 428 00:22:23,160 --> 00:22:25,040 Speaker 1: people give money because I just want to be friends 429 00:22:25,160 --> 00:22:27,960 Speaker 1: long term. You know, let's let's let's get together. I'm 430 00:22:27,960 --> 00:22:31,120 Speaker 1: gonna write a check to your committee. But like those 431 00:22:31,200 --> 00:22:35,040 Speaker 1: checks are small here and that kind of thing regulated 432 00:22:35,080 --> 00:22:37,440 Speaker 1: money that goes straight to the member, uh, the super 433 00:22:37,480 --> 00:22:40,840 Speaker 1: PACs or where the big money go. And they're conceptually 434 00:22:40,880 --> 00:22:43,560 Speaker 1: not even supposed to be associated with the campaign anyway. 435 00:22:43,880 --> 00:22:47,320 Speaker 1: But your name gets out there, uh, and you look 436 00:22:47,359 --> 00:22:49,800 Speaker 1: like you're being supportive. The really big money tends to 437 00:22:49,880 --> 00:22:52,560 Speaker 1: hide in the five oh one c fours where there's 438 00:22:52,600 --> 00:22:55,440 Speaker 1: no identification. They just want the right person to pull 439 00:22:55,520 --> 00:22:59,600 Speaker 1: the levers of power, like Sonny suddenly said, whether or 440 00:22:59,640 --> 00:23:02,600 Speaker 1: not it's ripping off regulations that are currently on uh. 441 00:23:03,000 --> 00:23:05,879 Speaker 1: Because of this current administration or or the opposite, and 442 00:23:06,560 --> 00:23:08,440 Speaker 1: and so there are a lot of places to play, 443 00:23:08,680 --> 00:23:10,720 Speaker 1: and a lot of these guys who are really putting 444 00:23:11,000 --> 00:23:14,359 Speaker 1: to work big money, uh tend to do it behind 445 00:23:14,440 --> 00:23:17,080 Speaker 1: the scenes. There are more places to play. I guess 446 00:23:17,119 --> 00:23:19,840 Speaker 1: you could say than ever, Genie, how dangerous is that 447 00:23:20,000 --> 00:23:23,280 Speaker 1: for politics? It is that. And I was so glad 448 00:23:23,320 --> 00:23:27,040 Speaker 1: Sinali mentioned of Pat mckenry because he's been telegraphing, i 449 00:23:27,080 --> 00:23:29,920 Speaker 1: should say, more than telegraphing, talking about what he would do. 450 00:23:30,480 --> 00:23:33,920 Speaker 1: And he's talking about allowing fin techs to grow, clarifying 451 00:23:34,040 --> 00:23:36,879 Speaker 1: rules for crypto companies, and of course, much to the 452 00:23:36,960 --> 00:23:40,679 Speaker 1: dismay of many Democrats, cracking down on the CFP bureau. 453 00:23:41,119 --> 00:23:43,240 Speaker 1: So you know, you have a clear sense as to 454 00:23:43,320 --> 00:23:46,119 Speaker 1: what he would do. And Democrats in contrast, saying they 455 00:23:46,160 --> 00:23:49,080 Speaker 1: would focus more on the issues they've been focused on already, 456 00:23:49,160 --> 00:23:52,920 Speaker 1: like housing in consumer protection, and you know the CFP 457 00:23:53,040 --> 00:23:55,560 Speaker 1: a part of their discussions as well, but certainly not 458 00:23:55,640 --> 00:23:58,200 Speaker 1: in terms of a crackdown on its director. So you 459 00:23:58,359 --> 00:24:00,760 Speaker 1: really do have a very good set if you listen 460 00:24:00,840 --> 00:24:03,240 Speaker 1: carefully to some of these folks who will potentially be 461 00:24:03,600 --> 00:24:06,200 Speaker 1: be handling these committees where they're going to go, and 462 00:24:06,359 --> 00:24:08,159 Speaker 1: that tells people where to put their money and what 463 00:24:08,280 --> 00:24:11,200 Speaker 1: they hope to see and how to influence the conversation policy. 464 00:24:11,280 --> 00:24:14,520 Speaker 1: Why is going forward? Regulation and taxes? This is what 465 00:24:14,760 --> 00:24:17,359 Speaker 1: we're talking about on Wall Street and who has a 466 00:24:17,400 --> 00:24:20,320 Speaker 1: better story to tell? Great panel will be back with 467 00:24:20,560 --> 00:24:22,840 Speaker 1: Rick and Jeanie. And thanks to Chinali for setting us 468 00:24:22,880 --> 00:24:27,160 Speaker 1: straight as Wall Street votes on the fastest hour in politics. 469 00:24:27,200 --> 00:24:33,399 Speaker 1: I'm Joe Matthew. This is Bloomberg. You're listening to Bloomberg. 470 00:24:33,480 --> 00:24:39,240 Speaker 1: You sound on with Joe Matthew on Bloomberg Radio. Vladimir 471 00:24:39,320 --> 00:24:43,920 Speaker 1: Putin has no idea what you are talking about. Days 472 00:24:44,000 --> 00:24:48,480 Speaker 1: of talk about a dirty bomb and shocker, Vladimir Putin 473 00:24:48,560 --> 00:24:52,320 Speaker 1: says there's no need for Russia to launch a nuke 474 00:24:52,440 --> 00:24:57,680 Speaker 1: strike on Ukraine. Who brought that up? What's the assutment? 475 00:24:57,760 --> 00:25:01,000 Speaker 1: The Western recent years and a special in recent months 476 00:25:01,040 --> 00:25:04,000 Speaker 1: has taken a number of steps to escalate. Well, as 477 00:25:04,000 --> 00:25:06,600 Speaker 1: a matter of fact, they always played for escalation. There 478 00:25:06,680 --> 00:25:09,119 Speaker 1: is nothing new here. This is the incitement of war 479 00:25:09,200 --> 00:25:13,440 Speaker 1: in Ukraine. These are provocations around Taiwan. The destabilization of 480 00:25:13,520 --> 00:25:16,159 Speaker 1: the global food and energy markets is your fault. It 481 00:25:16,240 --> 00:25:20,560 Speaker 1: turns out interesting as this speech is being delivered here, 482 00:25:20,640 --> 00:25:24,640 Speaker 1: big speech by Vladimir Putin, uh speaking to a room 483 00:25:24,760 --> 00:25:29,160 Speaker 1: full as I read on the terminal of foreign policy experts, 484 00:25:29,400 --> 00:25:32,320 Speaker 1: with the West wing trying to influence Moscow's friends and 485 00:25:32,359 --> 00:25:37,360 Speaker 1: allies by showing quote how terrible Russia is unquote really 486 00:25:37,440 --> 00:25:41,000 Speaker 1: sore all the time, you know. But as this is happening, 487 00:25:41,080 --> 00:25:46,879 Speaker 1: Lloyd Austin, the Secretary of Defense, acknowledges, as Vladimir Putin mentions, Taiwan. 488 00:25:47,000 --> 00:25:49,840 Speaker 1: Yet China actually is the great long term threat. But 489 00:25:50,000 --> 00:25:54,159 Speaker 1: right now we're looking at you. Russian aggression does pose 490 00:25:54,200 --> 00:25:58,680 Speaker 1: any mediate and sharp threat to our interests and values. 491 00:26:00,000 --> 00:26:03,320 Speaker 1: And Putin's reckless of reckless war of choice against Ukraine 492 00:26:04,240 --> 00:26:07,399 Speaker 1: the worst threat to European security since the end of 493 00:26:07,440 --> 00:26:11,159 Speaker 1: World War Two, has made that very clear for the 494 00:26:11,240 --> 00:26:14,960 Speaker 1: whole world. And now from the Bloomberg Pentagon Bureau, Pentagon 495 00:26:15,080 --> 00:26:18,400 Speaker 1: rejects ban on using nukes for conventional threats. This is interesting, 496 00:26:18,480 --> 00:26:22,880 Speaker 1: the new national Defense strategy rejecting limits on using nuclear 497 00:26:23,000 --> 00:26:29,680 Speaker 1: weapons in the face of a conventional military threat. A 498 00:26:29,760 --> 00:26:32,800 Speaker 1: lot of messaging going on here as we reassemble the 499 00:26:32,800 --> 00:26:36,080 Speaker 1: panel with Rick Davis and Jeannie Chanzano Bloomberg Politics contributors 500 00:26:36,119 --> 00:26:37,600 Speaker 1: getting a lot out of you guys today. I hope 501 00:26:37,600 --> 00:26:42,000 Speaker 1: everyone ate their wheaties. This is pretty important stuff here, though, Rick, 502 00:26:42,119 --> 00:26:45,320 Speaker 1: does this actually tamp down talk of nukes? Though, well, 503 00:26:45,359 --> 00:26:47,720 Speaker 1: it certainly changes in the conversation. I mean, we entered 504 00:26:47,760 --> 00:26:51,040 Speaker 1: the Obama or the Biden administration with conversations about no 505 00:26:51,200 --> 00:26:54,080 Speaker 1: first strike capability, right, this is what he talked about 506 00:26:54,119 --> 00:26:57,160 Speaker 1: on a campaign trail. And this is a complete reversal 507 00:26:57,200 --> 00:26:59,800 Speaker 1: of that. And not only is it an opportunity to 508 00:27:00,080 --> 00:27:03,200 Speaker 1: nuclear weapons, but in a conventional fashion. And and that 509 00:27:03,320 --> 00:27:05,399 Speaker 1: of course plays right into the conversation that we've been 510 00:27:05,440 --> 00:27:08,280 Speaker 1: having for the last month about the saber rattling with 511 00:27:08,359 --> 00:27:11,280 Speaker 1: nuclear weapons by Moscow. So, uh, this is gonna be 512 00:27:11,320 --> 00:27:14,520 Speaker 1: a hot topic all summer. I think the microcosm you 513 00:27:14,640 --> 00:27:17,840 Speaker 1: talked about was it's all under the under the rubric 514 00:27:17,920 --> 00:27:19,960 Speaker 1: of the fact that, you know, the biggest build up 515 00:27:20,000 --> 00:27:22,399 Speaker 1: in the world's happening right now around nuclear weapons is 516 00:27:22,440 --> 00:27:25,679 Speaker 1: with China. I find this fascinating. Genie the Defense Department 517 00:27:25,760 --> 00:27:29,119 Speaker 1: saying in this document that quote, by the twenty thirties, 518 00:27:29,160 --> 00:27:30,720 Speaker 1: the U s will for the first time in its 519 00:27:30,800 --> 00:27:35,000 Speaker 1: history faced two major nuclear powers as strategic competitors and 520 00:27:35,160 --> 00:27:39,480 Speaker 1: potential adversaries. In response, the US will maintain a very 521 00:27:39,560 --> 00:27:43,560 Speaker 1: high bar for nuclear employment without ruling out using the 522 00:27:43,600 --> 00:27:47,879 Speaker 1: weapons and retaliation to a non nuclear strategic threat to 523 00:27:48,040 --> 00:27:53,119 Speaker 1: the homeland that doesn't include NATO nations, doesn't, you know, 524 00:27:53,320 --> 00:27:56,560 Speaker 1: it doesn't. And this is quite a difference from what 525 00:27:56,760 --> 00:28:00,399 Speaker 1: we heard originally. Um. You know, for many people listening 526 00:28:00,480 --> 00:28:03,800 Speaker 1: to and watching Joe Biden on the campaign trail, he 527 00:28:04,000 --> 00:28:07,639 Speaker 1: was talking about a sole purpose in terms of nukes, 528 00:28:07,800 --> 00:28:10,600 Speaker 1: and that was deterrence, and all of a sudden, we 529 00:28:10,720 --> 00:28:13,320 Speaker 1: are seeing him move away from that. Now, we have 530 00:28:13,520 --> 00:28:15,760 Speaker 1: to be clear, a lot of that movement from this 531 00:28:15,960 --> 00:28:18,800 Speaker 1: sole purpose language, and there was a great foreign affairs 532 00:28:18,840 --> 00:28:21,959 Speaker 1: piece he wrote about this all of that, not all, 533 00:28:22,080 --> 00:28:24,120 Speaker 1: but a lot of that movement is because of pressure 534 00:28:24,200 --> 00:28:26,600 Speaker 1: from our allies. And you also see this all over 535 00:28:26,680 --> 00:28:29,720 Speaker 1: the document you're referencing, which is that our European and 536 00:28:29,840 --> 00:28:33,119 Speaker 1: Asian allies have said that that language puts them in danger. 537 00:28:33,600 --> 00:28:37,080 Speaker 1: And that is probably a good explanation as to why 538 00:28:37,160 --> 00:28:40,120 Speaker 1: we're seeing this movement, because one thing Joe Biden has 539 00:28:40,200 --> 00:28:43,720 Speaker 1: been committed to is building alliances or as he thinks 540 00:28:43,720 --> 00:28:47,560 Speaker 1: about it, rebuilding alliances that Donald Trump you know, started 541 00:28:47,600 --> 00:28:52,120 Speaker 1: to that he caused to deteriorate during his administration. But 542 00:28:52,360 --> 00:28:54,600 Speaker 1: it has also angered a lot of people who are 543 00:28:54,680 --> 00:28:58,280 Speaker 1: concerned about nuclear control and they are saying that this 544 00:28:58,480 --> 00:29:01,560 Speaker 1: is the wrong message to send because it is really 545 00:29:01,680 --> 00:29:05,200 Speaker 1: raising the specter of a nuclear war at some point 546 00:29:05,240 --> 00:29:08,520 Speaker 1: in the future. Well that's the of a statement where Rickett, 547 00:29:09,480 --> 00:29:11,480 Speaker 1: is this really about the homeland or does this also 548 00:29:11,560 --> 00:29:14,640 Speaker 1: apply to an Article five attack on a NATO country 549 00:29:14,680 --> 00:29:17,640 Speaker 1: with this standoff right now in Europe? You know, look, 550 00:29:17,680 --> 00:29:20,840 Speaker 1: all those UM rules already apply, right, I mean, there's 551 00:29:20,840 --> 00:29:22,880 Speaker 1: nothing new when it but for a nuclear response to 552 00:29:22,960 --> 00:29:26,760 Speaker 1: a conventional front specific again, I mean, it was never 553 00:29:26,840 --> 00:29:29,480 Speaker 1: taken off the table. Uh. It was just in this 554 00:29:29,720 --> 00:29:35,480 Speaker 1: case because we've got an updated National Defense UM Report strategy, 555 00:29:35,960 --> 00:29:38,120 Speaker 1: UH that they put a lot of thought around it. 556 00:29:38,200 --> 00:29:41,680 Speaker 1: And my suspicion is from everything I've heard and read 557 00:29:42,040 --> 00:29:43,920 Speaker 1: that they've put out of the Defense Department the last 558 00:29:43,960 --> 00:29:47,880 Speaker 1: two years, Uh, this is really more to address UM, 559 00:29:48,560 --> 00:29:51,640 Speaker 1: the growing threat that China has. I mean, China had 560 00:29:51,800 --> 00:29:55,680 Speaker 1: virtually no nuclear weapons, uh, and just a few years 561 00:29:55,720 --> 00:29:57,880 Speaker 1: ago and they are now looking at having a thousand 562 00:29:57,960 --> 00:30:00,400 Speaker 1: nuclear weapons before the end of the decade. Uh, this 563 00:30:00,600 --> 00:30:03,600 Speaker 1: is the most advanced build up we've ever seen. Well, 564 00:30:03,720 --> 00:30:06,760 Speaker 1: what could be causing that? Right, you'd ask yourself. And 565 00:30:06,840 --> 00:30:10,160 Speaker 1: then you overlay that with a much more aggressive approach 566 00:30:10,200 --> 00:30:12,960 Speaker 1: towards China that both the Trump administration and the Biden 567 00:30:12,960 --> 00:30:16,120 Speaker 1: administration have been pursuing. And you've got a lexer for 568 00:30:16,240 --> 00:30:19,960 Speaker 1: a new strategy when it comes to conventional warfare, that 569 00:30:20,240 --> 00:30:23,520 Speaker 1: you might use tactical nuclear weapons. How much of a 570 00:30:23,600 --> 00:30:26,040 Speaker 1: problem is this going to be for progressive Democrats, Genie, 571 00:30:26,640 --> 00:30:30,719 Speaker 1: knowing that President Biden pledged Candidate Biden pledged to declare 572 00:30:30,760 --> 00:30:34,480 Speaker 1: the US nuclear arsenal used only to deter or retaliate 573 00:30:34,520 --> 00:30:38,960 Speaker 1: against a nuclear attack, not a conventional one. Yeah, I mean, 574 00:30:39,120 --> 00:30:42,640 Speaker 1: we are already hearing from that group and others who 575 00:30:42,680 --> 00:30:46,120 Speaker 1: are saying that this is, you know, diametrically opposed to 576 00:30:46,200 --> 00:30:49,400 Speaker 1: your commitment to a sole purpose of deterrence. Because, of course, 577 00:30:49,480 --> 00:30:52,080 Speaker 1: what this does it leaves over the possibility that the 578 00:30:52,200 --> 00:30:56,120 Speaker 1: United States could strike first, and that is a real concern. 579 00:30:56,240 --> 00:30:58,840 Speaker 1: And you know, to Rick's point, the document is very clear, 580 00:30:59,040 --> 00:31:02,560 Speaker 1: we're talking about twin threats from China and Russia. And 581 00:31:02,880 --> 00:31:04,880 Speaker 1: for those of us who lived through nine eleven and 582 00:31:05,240 --> 00:31:08,480 Speaker 1: the Obama years, this is a stark difference from the 583 00:31:08,560 --> 00:31:11,200 Speaker 1: focus on say, terrorist groups like the Al Qaeda and 584 00:31:11,280 --> 00:31:14,000 Speaker 1: Islamic State. While we still are hearing talk about that, 585 00:31:14,400 --> 00:31:16,680 Speaker 1: there is a you know, a real focus in this 586 00:31:16,840 --> 00:31:19,480 Speaker 1: document on China and Russia as the threat and no 587 00:31:19,640 --> 00:31:21,880 Speaker 1: longer are we talking just about nukes at least from 588 00:31:21,880 --> 00:31:25,320 Speaker 1: the U. S perspective as deterrence only. And politically, the 589 00:31:25,400 --> 00:31:27,880 Speaker 1: President is going to have to answer to that. He's 590 00:31:27,920 --> 00:31:30,520 Speaker 1: going to be relying a good deal on Russia's incursion 591 00:31:30,720 --> 00:31:34,000 Speaker 1: or attack against Ukraine to justify what he's saying here, 592 00:31:34,080 --> 00:31:36,160 Speaker 1: or what at least what the Pentagon is saying here. Well, 593 00:31:36,200 --> 00:31:39,520 Speaker 1: with all this talk of using nuclear weapons, it's worth 594 00:31:39,600 --> 00:31:44,000 Speaker 1: sharing the story of Vasily Archipov. I hope I'm pronouncing 595 00:31:44,000 --> 00:31:47,080 Speaker 1: it right. You just mentioned in this morning's Daybreak column, which, 596 00:31:47,120 --> 00:31:48,760 Speaker 1: by the way, I highly recommend you wake up, you 597 00:31:48,800 --> 00:31:51,680 Speaker 1: look at the app go to Daybreak. D A. Y b. 598 00:31:52,440 --> 00:31:56,600 Speaker 1: A Soviet naval officer credit with single handedly preventing a 599 00:31:56,680 --> 00:31:58,960 Speaker 1: nuclear war. His story was the inspiration for the movie 600 00:31:59,000 --> 00:32:02,480 Speaker 1: Crimson Tide. You guys for this, right, Denzel Washington Gene Hackman, 601 00:32:03,200 --> 00:32:06,000 Speaker 1: the two officers fighting over whether to follow orders to 602 00:32:06,120 --> 00:32:10,200 Speaker 1: war after the message from Washington was interrupted. We cannot 603 00:32:10,280 --> 00:32:13,240 Speaker 1: launch our missiles unless both you and I agree. How 604 00:32:13,320 --> 00:32:17,200 Speaker 1: do sir? This is expressly why your command must be repeated. 605 00:32:17,360 --> 00:32:19,560 Speaker 1: It requires my assent. I do not give it in 606 00:32:19,640 --> 00:32:22,920 Speaker 1: for them. That's great movie. The real story, by the way, 607 00:32:22,960 --> 00:32:31,640 Speaker 1: hang on, let's do this right. Let's dive first. Excellent. Yeah, 608 00:32:32,240 --> 00:32:34,080 Speaker 1: you with me, Rick, This is okay. Here we go. 609 00:32:34,960 --> 00:32:39,440 Speaker 1: Hold your breath, everybody. Nineteen sixty two. Here we go. 610 00:32:40,760 --> 00:32:46,840 Speaker 1: We're going deep. The Cuban Missile Crisis. Alarkapov was second 611 00:32:46,880 --> 00:32:50,760 Speaker 1: in command of the diesel powered submarine B fifty nine. 612 00:32:50,800 --> 00:32:53,440 Speaker 1: They were off the coast of Cuba when a U. S. 613 00:32:53,520 --> 00:32:56,760 Speaker 1: Navy battle group spotted them and started dropping depths charges. 614 00:32:56,880 --> 00:33:01,160 Speaker 1: The Soviet crew just leave the movie, lost contact with Moscow, 615 00:33:01,280 --> 00:33:04,480 Speaker 1: thought war was breaking out, and the captain wanted to 616 00:33:04,560 --> 00:33:09,280 Speaker 1: launch a nuke, a nuclear torpedo the sky I'm telling 617 00:33:09,320 --> 00:33:12,960 Speaker 1: you about. Officer Arkipov disagreed. He refused to second the 618 00:33:13,080 --> 00:33:18,360 Speaker 1: order and averted a nuclear war that certainly would have followed. 619 00:33:18,840 --> 00:33:20,959 Speaker 1: They have made a documentary. This is the man who 620 00:33:21,040 --> 00:33:25,360 Speaker 1: saved the world. It was called and it happened on 621 00:33:25,440 --> 00:33:28,680 Speaker 1: this day in history in nineteen sixty two. My question 622 00:33:29,640 --> 00:33:32,640 Speaker 1: for the panel here is what would happen today? The 623 00:33:32,680 --> 00:33:35,480 Speaker 1: moral of the story here right is sort of personal integrity, 624 00:33:35,600 --> 00:33:40,120 Speaker 1: personal principle in a time of war. What would happened today, 625 00:33:40,600 --> 00:33:43,720 Speaker 1: Rick in the war in Ukraine, for instance, if something 626 00:33:43,800 --> 00:33:48,440 Speaker 1: like this came about or a different Russian military than 627 00:33:49,080 --> 00:33:52,160 Speaker 1: was around in the Soviet times. Now, uh yeah, I 628 00:33:52,240 --> 00:33:54,680 Speaker 1: mean you would hope that they would actually be more 629 00:33:54,960 --> 00:33:58,200 Speaker 1: cautious about the use of a nuclear weapon. But we 630 00:33:58,280 --> 00:34:00,920 Speaker 1: had a little bit of this, uh scenes center in 631 00:34:01,000 --> 00:34:03,120 Speaker 1: the United States just a few years ago under the 632 00:34:03,160 --> 00:34:06,880 Speaker 1: Trump administration, where there was some concern about nuclear weapons 633 00:34:06,920 --> 00:34:09,480 Speaker 1: being used and what safeguards do we have in place, 634 00:34:09,600 --> 00:34:12,080 Speaker 1: and what are the rules that attached to it? And 635 00:34:12,320 --> 00:34:15,479 Speaker 1: and I think we the good news is we learned 636 00:34:15,520 --> 00:34:18,200 Speaker 1: that President United States just can't press a button and 637 00:34:18,360 --> 00:34:21,760 Speaker 1: launch nuclear weapons, and so there's a much more elaborate 638 00:34:21,800 --> 00:34:25,560 Speaker 1: process that that has safeguards. And so, look, these are 639 00:34:25,680 --> 00:34:29,640 Speaker 1: incredibly powerful weapons that can cause you know, enormous destruction 640 00:34:29,840 --> 00:34:33,239 Speaker 1: and start wars that have no end. And and so 641 00:34:33,840 --> 00:34:37,160 Speaker 1: you're it's good to find out that today we don't 642 00:34:37,280 --> 00:34:42,080 Speaker 1: have as many um uh chances of having that kind 643 00:34:42,120 --> 00:34:44,239 Speaker 1: of mistake made, if you want to call it that. 644 00:34:44,400 --> 00:34:47,239 Speaker 1: But in this case you also have to feel good 645 00:34:47,280 --> 00:34:49,920 Speaker 1: about the fact that there are people in and around 646 00:34:49,960 --> 00:34:53,359 Speaker 1: these weapons systems that have a moral compass. That's where 647 00:34:53,719 --> 00:34:56,440 Speaker 1: let them be used unless they absolutely have to, and 648 00:34:56,560 --> 00:34:58,680 Speaker 1: you do wonder if they would be there. I'm assuming 649 00:34:58,719 --> 00:35:04,319 Speaker 1: that these redundancies exists for the Russian military, is well, Genie, Yeah, 650 00:35:04,480 --> 00:35:06,799 Speaker 1: let's hope so. And and Joe, I'm happy to talk 651 00:35:06,840 --> 00:35:10,360 Speaker 1: about this movie happier than Talladega Nights, which you mentioned yesterday. 652 00:35:10,440 --> 00:35:13,239 Speaker 1: So the movies are improving, Joe mant you back. Just 653 00:35:13,520 --> 00:35:17,239 Speaker 1: stick with me. I'll tell you what. Apologies and thanks 654 00:35:17,320 --> 00:35:20,680 Speaker 1: to our panel, Rick and Genie. That's one ping only fleas. 655 00:35:21,640 --> 00:35:23,600 Speaker 1: We'll meet you back here tomorrow on the fastest hour 656 00:35:23,680 --> 00:35:25,480 Speaker 1: in politics. This is Bloomberg