Speaker 1: Welcome to Bloomberg Opinion. I'm Vonnie Quinn. This week, what
Speaker 1: we know is certainly sufficient for impeachmentcy was still on
Speaker 1: the White House, and it may very well be invitable.
Speaker 1: Jonathan Bernstein on the New House January six committee revelations
Speaker 1: and the fallout from the Supreme Court overturning Row and
Speaker 1: later Julianna Goldman on what Mississippi has to teach just
Speaker 1: about the future of abortion politics. First to the markets,
Speaker 1: seemingly a little let's sea this week and generally getting
Speaker 1: warier of weaker economic data this though, as Fed officials
Speaker 1: continue to talk up rate increases, and Terry J. Powell
Speaker 1: talks about finding price stability in the new economy, where
Speaker 1: with Jared Dillion of The Daily Dirt Nap and Bloomberg Opinion.
Speaker 1: Hedgehone manager Michael Bury, famous obviously for getting the big
Speaker 1: short right as the Great Financial Crisis was unfolding, send
Speaker 1: a tweet out this week suggesting the Fed may actually
Speaker 1: pause or even reverse hikes because deflationary impulses are brewing
Speaker 1: in certain areas of the economy. We have seen a
Speaker 1: couple of people float this idea in recent weeks. Is
Speaker 1: he right? Uh? He is right, and what he was
Speaker 1: referring to in particular was this phenomenon where retailers are
Speaker 1: building inventories to record levels. Uh. And inevitably, if you're
Speaker 1: a retailer in your inventories are stuffed, then at some
Speaker 1: point you're gonna have to discount. You're gonna have to
Speaker 1: lower prices in order to get word of those inventories.
Speaker 1: And that is deplationary. I mean, it's inherently depletionary. And
Speaker 1: the inventories piece is just one piece of the puzzle.
Speaker 1: We're really getting a deplationary impulse throughout the economy. You're
Speaker 1: seeing in a lot of places like the manufacturing surveys,
Speaker 1: the regional manufacturing surveys, that that they're just you know,
Speaker 1: dropping like wet socks and a chicken. As one of
Speaker 1: my friends used to say. So, well, this is something.
Speaker 1: And you know, I was moderating pudlic quid space this
Speaker 1: week with four different firms representative and the figures we're
Speaker 1: both mentioned in relation to the prospect of recession. So
Speaker 1: it seems like there are more and more people turning
Speaker 1: a bit negative on the economy. Do we have to
Speaker 1: have the NB or call it before we really know,
Speaker 1: or before the FED even reacts, well, we might actually
Speaker 1: be in recession already. I mean, that's well, you know,
Speaker 1: the NBR uses a number of factors to calculate a recession,
Speaker 1: and it's possible that as months go by that you'll
Speaker 1: see some of the data that we're currently experiencing, you'll
Speaker 1: see that get revised lower. So it's possible that we're
Speaker 1: already in a recession, and then six months from now
Speaker 1: the NBR say, well, yes, we were actually in recession
Speaker 1: back in June. So I think it's totally possible. So
Speaker 1: is the Fed then waiting for more data to come
Speaker 1: in before it does something and kind of continue to
Speaker 1: hike interest rates if indeed there is a high possibility
Speaker 1: that we are in a recession. Well, I think I
Speaker 1: think the one data point that's going to get the
Speaker 1: Fed to stop hiking is the labor market, and really
Speaker 1: because of optics and because the politics around unemployment. If
Speaker 1: unemployment were to go up significantly, say the unemployment where
Speaker 1: it goes to five or five and a half or
Speaker 1: six percent, then you know that's that's a severely lagging indicator,
Speaker 1: but then would be absolutely clear that we're in recession.
Speaker 1: The problem with the FET doing that is that the
Speaker 1: problem doesn't really anticipate, uh, these moves in the economy,
Speaker 1: It really reacts to them after the fact. So yes,
Speaker 1: it's probably true that the FETCH stop hiking now, but
Speaker 1: they won't actually probably for three to six more months. Yeah,
Speaker 1: And I mean that's probably what we're seeing in the
Speaker 1: stock market right now, because it does seem a little
Speaker 1: at sea, you know. I mean we've had multiple days
Speaker 1: of barely any moves, but then sort of one random
Speaker 1: to percent drop on Tuesday. Yeah. I mean I'm actually
Speaker 1: I'm reasonably bullish on stocks. Um. You know, I think
Speaker 1: I think sentiment is pretty terrible here. I think sentiment
Speaker 1: is bombed out and I'm actually expecting a rally. Really,
Speaker 1: the worst the data is, the better it is for
Speaker 1: the stock market, because that builds more of a case
Speaker 1: for the FT to pause rays. Yeah. At the same time,
Speaker 1: the fact can't really pause Radix until we see it
Speaker 1: in inflation expectations, right, I mean, it's actually targeting inflation
Speaker 1: expectations right now, which it said it is. But how
Speaker 1: do we even try to bridge to what the impact
Speaker 1: of that will be on stock and modn markets. Well,
Speaker 1: the interesting thing is is we're getting a little bit
Speaker 1: of early evidence that inflation expectations are coming down. We
Speaker 1: got that the other day UNI University of Michigan survey
Speaker 1: UH that inflation expectations on a one year basis and
Speaker 1: applied to ten year basis had come down just a
Speaker 1: little bit. So, you know, even though they haven't really
Speaker 1: actually hyped interest rates a lot, they've done sort of
Speaker 1: this verbal tightening over the last six to nine months,
Speaker 1: and it has been having an effect. It's been having
Speaker 1: a huge effect. So I'm gonna quote from one of
Speaker 1: your pieces, you say, as laughable as it may seem,
Speaker 1: there may still actually be a transitory element of current
Speaker 1: inflation that was a function of quantitative using government spending
Speaker 1: and pandemic hoarding. You're really buying into this idea that
Speaker 1: we could see inflation coming down pretty precipitously soon. No, absolutely,
Speaker 1: I mean, I'm you know, I'm very confident that the
Speaker 1: eight point six percent print we got on CPI, I
Speaker 1: think that's going to be the highest. I think the
Speaker 1: next print is going to be lower. The economy has
Speaker 1: slowed quite a bit since that last CPI print, So yeah,
Speaker 1: I mean, I think it's very possible that by the
Speaker 1: end of the year we could have inflation somewhere around
Speaker 1: five percent or six percent. Jared, do we have to
Speaker 1: be confident in this Federal Reserve before we make a
Speaker 1: calculation on the economy though? I mean I asked that
Speaker 1: because I'm not sure that even this Federal Reserve is
Speaker 1: confident in itself on this particular cycle. Well, I mean,
Speaker 1: you know, Jerome Powell said that he isn't really you know,
Speaker 1: he doesn't really sure what causes inflation or I forget
Speaker 1: his exact quote, but nobody really is. I mean, it's
Speaker 1: really a psychological phenomenon, and um, you know that's really
Speaker 1: the purpose of the rate hikes is to crush the
Speaker 1: inflationary psychology. And I think it's I think it's doing
Speaker 1: actually a pretty good job. And someone pointed out recently that,
Speaker 1: you know, in previous inflationary episodes, you had to raise
Speaker 1: FED funds above the rate of inflation in order to
Speaker 1: get inflation down, which would mean we would have to
Speaker 1: take you know, FED funds up to nine percent. I
Speaker 1: don't think that's going to happen, and I don't even
Speaker 1: think that's necessary. I mean, I didn't think you could
Speaker 1: raise where it's to three percent, and you're going to
Speaker 1: be able to take this down because of this transitory element.
Speaker 1: You know, everybody made fun of the FETE calling a
Speaker 1: transitory and then capitulating, but I think it may in
Speaker 1: fact be transitory because of these one time factors. Yeah,
Speaker 1: and obviously we're seeing commodity prices coming down, which I'm
Speaker 1: not sure that many people would have predicted even recently. Yeah,
Speaker 1: I mean the uh, the CRB Commodity index is down
Speaker 1: about ten percent from the highs and it happened pretty quick,
Speaker 1: and I expect you're gonna get a little bit more
Speaker 1: downside there. Timing the markets you wrote a column about
Speaker 1: is obviously we're told time and again, you know, investing
Speaker 1: one on one, don't try to time the market. It's
Speaker 1: going to be financial armageddon. Explain your thesis, Jared, Yeah,
Speaker 1: I do. You know. Look, tim in the market is
Speaker 1: is for the people. You should never do it. It's
Speaker 1: really hard. You're gonna make your returns worse. Uh. And
Speaker 1: the reason that's true for most people is because, you know,
Speaker 1: because of human psychology, because people are hardwired to be
Speaker 1: bad investors, because when the market goes up, they get excited,
Speaker 1: they buy more. When the market goes down, they get
Speaker 1: discouraged and they sell, uh, And it's you know, that's
Speaker 1: that's the way people are wired. So but if you
Speaker 1: can sort of do that countercyclically, if you can, say,
Speaker 1: if you can kind of step back and get some
Speaker 1: perspective and examine your emotions and say, look like, I'm
Speaker 1: you knowl on the market and it's going up, and
Speaker 1: I feel really good and I feel very happy about
Speaker 1: my investments. That is actually the time you want to
Speaker 1: cut back exposure. You don't have to sell everything, but
Speaker 1: if you just reduced your exposure by about ten percent
Speaker 1: and then you know, a couple of years later, when
Speaker 1: the market is going down and you feel really terrible
Speaker 1: about your investments and you want to liquidate everything, that's
Speaker 1: actually the time to increase exposure. So just by doing
Speaker 1: these minor tweaks in your asset allocation based on sentiment,
Speaker 1: that's actually a way to outperform the market by a
Speaker 1: little bit over time. Yeah. So it sounds incredibly you know,
Speaker 1: obvious when you put it like that, and it sounds
Speaker 1: quite a drunk to ben packing. Why not do that?
Speaker 1: You get a few extra percentage points for yourself at
Speaker 1: the same time, Timing the market and timing sentiment has
Speaker 1: to be very difficult, or everybody would be doing it
Speaker 1: all of the time. Now, well, everybody does do it
Speaker 1: all the time. I mean, this isn't this isn't like
Speaker 1: a license to day trade. I mean it's not. It's not.
Speaker 1: It's not a license for active training. In the piece
Speaker 1: I have talked about, you know, this is something this
Speaker 1: is something you might do two or three times in
Speaker 1: your investing career. Uh. You know, like an obvious example
Speaker 1: would have been, you know, two thousand in the top
Speaker 1: of the dot com bubble. Another obvious example would have
Speaker 1: been two thousand nine when stocks bottomed at to the
Speaker 1: financial crisis. Um. But these are big, big sentiment turning points.
Speaker 1: And you don't even have to like catch the top
Speaker 1: or catch the bottom as long as you're in the neighborhood.
Speaker 1: And these are tiny adjustments and asset allocations, not saying
Speaker 1: you have to go all out of the marketer all in,
Speaker 1: as Bart says, are we there yet? Then if you
Speaker 1: compare sentiment now to how bad it got in two
Speaker 1: thousand nine, I mean, sentiment is bad now, um, And
Speaker 1: but I don't think where I don't think we're really
Speaker 1: close to where we were in two thousand nine. I
Speaker 1: think it could be a turning point, but I don't
Speaker 1: think it could be one of those generational turning points
Speaker 1: where you want to change your asset allocation, right, And
Speaker 1: do you think one is coming? This particular cycle seems
Speaker 1: so difficult to call because it's not just one thing.
Speaker 1: It's not just one asset clast that seems to be publicious.
Speaker 1: I mean, obviously crypto walls and there are parts of
Speaker 1: the market that are, but there are so many factors
Speaker 1: that are coming together now, from the Ukraine War to
Speaker 1: zero COVID and China to so many other things. Is
Speaker 1: it going to be even possible to time sentiments this time? No,
Speaker 1: I think it's possible, and I think you'll know when
Speaker 1: it happens. Um, you know, I mean I think a
Speaker 1: good analog for what's going on today is actually seventy four. Um.
Speaker 1: You know What's it's similar because you had inflation going
Speaker 1: up and the fet was kind of trapped and they
Speaker 1: had to high rates, and um, it really like the
Speaker 1: markets sort of got into this mode where you know,
Speaker 1: it was like, you know, just it was trapped by
Speaker 1: inflation basically. So it's I think it's similar to that
Speaker 1: in the market was down forty six or forty eight percent,
Speaker 1: I can't remember. Well, So, just quoting from a Bloomberg story,
Speaker 1: stock did buyers across the E t F world have
Speaker 1: vanished this year because they've tried three times, They've seen
Speaker 1: their account balances ravaged three times. So the number of
Speaker 1: five bounces that didn't endure is three. How do you
Speaker 1: then persuade somebody to try again a fourth time? Well,
Speaker 1: it's that's the that's the problem because really, like when
Speaker 1: the time to do it is when you really don't
Speaker 1: want to do it, is when it feels absolutely the worst,
Speaker 1: like when you're when really like you you want to
Speaker 1: do the opposite, you want to want to just liquidate
Speaker 1: everything and go to cash. That's actually the time to
Speaker 1: increase exposure. You know. The funny thing is that I've
Speaker 1: been doing this for twenty three years. So I was
Speaker 1: around for two thousand and I was around for two
Speaker 1: thousand nine, and uh, you know, I I successfully took
Speaker 1: down exposure in two thousand but in two thousand nine,
Speaker 1: I actually I was a victim of my own emotion,
Speaker 1: Like I actually didn't increase exposure because I was so
Speaker 1: scared because you know, City Group was trading at nine
Speaker 1: cents and BA was trading at three bucks. And you know,
Speaker 1: I got I got sucked into the bortex and I thought, well, like,
Speaker 1: the world is actually coming to an end. And it didn't.
Speaker 1: It never does. Well, it's easier to imagine something going
Speaker 1: to zero on it's three dollars then going to zero
Speaker 1: when it's three dollars, right, weird. I mean psychologically it
Speaker 1: shouldn't be, but it is. Yeah. So you know you
Speaker 1: talk about when you're feeling you're worse about your portfolio,
Speaker 1: how risky is acceptable? Then are you just talking equities here?
Speaker 1: Because some might take your advice and say, oh well
Speaker 1: I'll buy a bunch of crypto. Then oh no, we're
Speaker 1: just talking equity. This is just this is just the
Speaker 1: stock market. Yeah, I mean, having having said that, you know,
Speaker 1: I've invested in crypto a little bit, I have some
Speaker 1: right now, and I be a much better buyer here
Speaker 1: than six months ago, for sure. Yeah. Well, I mean
Speaker 1: it's lower. Yeah. Another thing I noticed, and I'm not
Speaker 1: sure if this should give us pause. The Federal Reserve
Speaker 1: Bank of New York launched a Corporate Bond Market Distress
Speaker 1: Index so it's supposed to track the health of a
Speaker 1: trillion dollars of US corporate bonds as financial conditions tightened.
Speaker 1: Should we be concerned that the Fed feels like it
Speaker 1: needs to have this new index? You know, actually, I
Speaker 1: don't think it's a terrible thing. You know, it's interesting
Speaker 1: because the last credit cycle that we had in two
Speaker 1: thousand twenty only lasted about four days. I mean, the
Speaker 1: pandemic happened, the bond market crashed, and then the Fed
Speaker 1: announces liquidity facility, they started buying corporate bonds, so you
Speaker 1: really only had a credit cycle that lasted for four days.
Speaker 1: Now the corporate bond market is actually, I don't want
Speaker 1: to say it's distressed, but it's not good. Like there's
Speaker 1: there's a lot of pain out there in the high
Speaker 1: yield and investment great So I think it's interesting. The
Speaker 1: timing on that is pretty interesting. How do you buy
Speaker 1: gauge sentiments if you're an amateur, Really, the best way
Speaker 1: to do it is to just pay attention to everything
Speaker 1: around you. Pay attention to every magazine cover, pay attention
Speaker 1: to newspapers, pay attention to TV shows, your neighbors who
Speaker 1: you talk to, listen to how they feel about the markets.
Speaker 1: You know, if you if you start getting this consensus
Speaker 1: around all these sources of information that things are really
Speaker 1: good or really bad, then it's probably time to go
Speaker 1: the other way. What are you doing right now? What
Speaker 1: am I doing right now? Not? Not much, not much
Speaker 1: of anything, actually so much. We're not taking your own advice.
Speaker 1: I mean, I'm just I'm not a hundred percent convinced
Speaker 1: we're at the bottom. Jared Dillion of The Daily Dirt,
Speaker 1: Nap and Bloomberg Opinion, We're back with David Fickling on
Speaker 1: global hunger, It's causes and potential alleviating factors. We know
Speaker 1: that there are wheat mountains backed up in ports because
Speaker 1: of Russia's war in Ukraine. Other factors, however, are contributing
Speaker 1: to this global intense hunger cry US. As David Fickling explains,
Speaker 1: how bad is it right now in terms of food
Speaker 1: and security in the world. I think we're approaching a
Speaker 1: quite unusual turn in the sort of history of global
Speaker 1: food security. To be honest, if you look back at
Speaker 1: the long history of this, you know, one of the
Speaker 1: crucial things that helps keep the world fed over the
Speaker 1: past fifty years, while the world population has doubled is
Speaker 1: actually trade. People talk a lot about the growth of
Speaker 1: sort of chemical fertilizers and farm machinery, which have both
Speaker 1: been very important in the twentieth century in keeping the
Speaker 1: world fed, but trade is a really important part of
Speaker 1: that because, of course, if you have drought and crop
Speaker 1: failures in your region, then there's no amount of fertilizer
Speaker 1: or farm machinery that will solve the fact that your
Speaker 1: crop just won't grow. So a really important thing that
Speaker 1: I think is underappreciated is that the cost of ocean
Speaker 1: trade in the nineteenth century dropped by about se and
Speaker 1: so you suddenly have this global trade in grains and
Speaker 1: about a quarter of all the calories we consume it
Speaker 1: and now traded across borders. So it's very important that
Speaker 1: this is a global trade. But I think something's undappreciated
Speaker 1: is that it's quite a concentrated trade. The world's bread
Speaker 1: baskets are rather few. There's probably about six of them,
Speaker 1: the US Midwest, the South America, sort of Argentina, Brazil,
Speaker 1: that area, areas of Western Europe and the Ukraine and
Speaker 1: the former Soviet Union and Russia. And I think most
Speaker 1: importantly the plain between the Indus and the Ganges in
Speaker 1: northern India and Pakistan and eastern China between the Yank
Speaker 1: Sea and the Yellow Rivers. Those six read baskets are
Speaker 1: absolutely crucial to the world's growth. Of these relatively few
Speaker 1: number of crops that we depend on, wheat, rice, corn, soybeans.
Speaker 1: More than half of wheat and rice and corn are
Speaker 1: grown if you put those those areas together, soybeans disclosed.
Speaker 1: Now for most of the time, that's not too much
Speaker 1: of a problem because although there's just half a dozen
Speaker 1: of these bread baskets, if you get a drought in
Speaker 1: one region, it tends to pair with good rainfall and
Speaker 1: another region that leads to higher crop yields, because essentially
Speaker 1: the rainfall has to go somewhere. It evaporates on one
Speaker 1: side of the ocean, it tends to drop on the
Speaker 1: other side of the ocean, and when we talk about
Speaker 1: things like El Nino and Landinia, that's essentially about rainfall
Speaker 1: ending up in different places. However, as the climate is changing,
Speaker 1: a lot of that is getting a lot less secure
Speaker 1: than it has been in the past, and I think
Speaker 1: that's really putting pressure on some of the fairly sort
Speaker 1: of shaky system that we have there in place over
Speaker 1: the stage half a dozen bread baskets to to keep
Speaker 1: the world said, we seeing several weather events right now,
Speaker 1: even just in the United States alone, So weather has
Speaker 1: a lot to do with the fact that there's going
Speaker 1: to be a shortage. It is not just Russias war
Speaker 1: in Ukraine. Absolutely, in normal times you would look to
Speaker 1: the world's other big wheat producers. Now one of the
Speaker 1: world's top three wheat producers may be slightly surprising in fact,
Speaker 1: is India. You don't think of India as a big
Speaker 1: wheat producer. There's not a big wheat exporter normally because
Speaker 1: it's almost all consumed at home for chiparties. And exactly
Speaker 1: what we've seen in India over the past a couple
Speaker 1: of months, we've seen this very extreme heat wave and
Speaker 1: that has caused India to embargo exports of wheat. Places
Speaker 1: like the Middle East. They were very dependent on wheat
Speaker 1: from Ukraine that's obviously been damaged by the war in Ukraine.
Speaker 1: The places they were hoping to get their wheat supplies
Speaker 1: from with India, but now injury is not supplying that either. Obviously,
Speaker 1: you see these high prices in the US as well,
Speaker 1: so you really see how some relatively small changes, and
Speaker 1: especially if you trow geo politics in the mix, as
Speaker 1: with the war in Ukraine, suddenly what looked like a
Speaker 1: decent spread of food baskets can very quickly that are
Speaker 1: rather short. You also point out on a recent piece
Speaker 1: food dependent nations can import nutrition, but they must have
Speaker 1: the foreign exchange to pay for it, and we know
Speaker 1: that because of the dollar strength, that's in short supply
Speaker 1: in many of these countries. Yeah. Absolutely, and of course
Speaker 1: a weak currency becomes a problem for especially the poorest
Speaker 1: in the country, even if there is the availability of
Speaker 1: imported nutrition. I mean, another interesting example you look at Brazil.
Speaker 1: Brazil recently not a country that you really associate with
Speaker 1: a sort of open trade policy, but they've been drastically
Speaker 1: cutting the tariff rates essentially to zero for all food
Speaker 1: imports the EGEA of values. Of course, that inflation is
Speaker 1: very high in Brazil and it is a problem for
Speaker 1: people in Brazil that they can't afford to twell. That
Speaker 1: is a decent policy approach, but the problem is it's
Speaker 1: not nearly sufficient, because if you look at the way
Speaker 1: the real the currency has fallen in recent years, Brazili
Speaker 1: is a big food producer anyway, and it's probably not
Speaker 1: going to lead to any increase in food imports because
Speaker 1: Brazilians simply can't afford the market global price of food. Now, David,
Speaker 1: how bad does this get in terms of people actually starving?
Speaker 1: People in places might even associate and food and security
Speaker 1: with I mean, the past few decades mostly have been
Speaker 1: an extremely successful period of bringing down rates of under
Speaker 1: nutrition under nourishment. That progress continued slowed down through the
Speaker 1: but then just in and then particularly twenties, since of
Speaker 1: course the COVID nineteen pandemic, we've really started to lose
Speaker 1: ground on that. Now, part of that is essentially driven
Speaker 1: by the pandemic and driven by incomes. People don't have
Speaker 1: the money to spend on food that they used to have,
Speaker 1: But it's not just because of that, and I think
Speaker 1: particularly at the moment, we see all sorts of fact
Speaker 1: are leading to a much more insecure environment for food.
Speaker 1: Then you throw into the mix the war in Ukraine
Speaker 1: is a factor. Ukraine and Russia are both big food
Speaker 1: exporters for that matter, and then led up at ports
Speaker 1: in Ukraine and Russia that just won't get out now
Speaker 1: absolutely absolutely, and then even on top of that, then
Speaker 1: you can add some of these export embargoes. Obviously, you know,
Speaker 1: an interesting one was India's wheat embargo follows very rapidly
Speaker 1: on the heels of an export embargo in Indonesia for
Speaker 1: palm oil, which has actually now been revoked, but went
Speaker 1: on for a while. Injury is one of the biggest
Speaker 1: importers of palm or India needs palm oil for basic
Speaker 1: nutrition for Indians. They lose that nutrition from Indonesia. They
Speaker 1: embargo their wet exports elsewhere, and you see these knock
Speaker 1: on effects everywhere. So there are all sorts of impacts
Speaker 1: like this. David Fickling there and don't forget to get
Speaker 1: in touch. All thoughts and opinions are very welcome. I'm
Speaker 1: at Vanney Quinn on Twitter or email v Quinn at
Speaker 1: Bloomberg dart Net. New and unexpected revelations from the House
Speaker 1: January sixth Committee the this week, and of course we're
Speaker 1: several days now post the Roe v Wade overturning Vicecotas.
Speaker 1: We're with Jonathan Bernstein. So, Jonathan, what an intense week
Speaker 1: we began with Row and all of a sudden the
Speaker 1: week has become quite the eventful week with the extra
Speaker 1: January six theory that we weren't anticipating as well, and
Speaker 1: a lot of quote unquote bombshells. I don't ask you, though,
Speaker 1: what really did we learn that was usable from former
Speaker 1: white outside Cassidy Hutchinson. Well, you know, there's different levels
Speaker 1: of who this is for, right, So, but I think
Speaker 1: just to begin with the fact that Donald Trump, we
Speaker 1: now have established, knew that there were armed people that
Speaker 1: he then urged on to attack the capital. That's pretty big, um.
Speaker 1: I don't think we'd had any kind of evidence before
Speaker 1: this that Trump knew that some of the crowd was armed.
Speaker 1: Not only is it, you know, reckless of him. Not
Speaker 1: only does it show that, you know, it shows that
Speaker 1: he thought of them as attacking a capital rather than
Speaker 1: just that they were going to peacefully march over there
Speaker 1: and hold the demonstration. So that's pretty big, big, big jump. So,
Speaker 1: I mean, if you were a prosecutor thinking about this,
Speaker 1: is there evidence that the former president knew or believed
Speaker 1: that these people would use their arms? I mean, you know,
Speaker 1: many people are armed in the streets in many states,
Speaker 1: more and more now these days. He said they're not
Speaker 1: here to hurt me or to hurt me. I mean,
Speaker 1: we don't fully can you make the jump and say
Speaker 1: that we knew that he knew that they were going
Speaker 1: to Well, that's where I think I have to take
Speaker 1: a step back and talk about different audiences. I'm not
Speaker 1: a lawyer. I'm not going to tell you what the
Speaker 1: prosecutors need. But in terms of us as citizens, yeah,
Speaker 1: I think that that's that's a pretty big deal that
Speaker 1: Trump knew that these people were armed, asked to remove
Speaker 1: the metal detectors so they could come and hear him
Speaker 1: talk saying, oh that you know they're not for those
Speaker 1: weapons aren't for me. I think, yeah, that that's a
Speaker 1: pretty big indication that he, at the very least, once
Speaker 1: there was trouble, once they attacked the cops and breached
Speaker 1: the capital, he had reason to believe that all kinds
Speaker 1: of things could happen. In fact, you know, as it
Speaker 1: turns out, we have a lot of evidence of weapons
Speaker 1: at the Capitol, not guns, but Trump didn't know that everything.
Speaker 1: One of the other things that was, you know, a
Speaker 1: shocker was what apparently happened in the beast where the
Speaker 1: President wanted to get to the capital and and wasn't
Speaker 1: allowed explain to me how how the Secret Services operating
Speaker 1: right now because apparently the Secret Service told the sitting
Speaker 1: president of the United States that he couldn't go somewhere,
Speaker 1: prevented him from doing that, and are now saying that, no,
Speaker 1: that didn't happen. We're gonna have to wait to see
Speaker 1: how everything shakes out in terms of you know who
Speaker 1: says what. It's not clear that the Secret Services denying
Speaker 1: that he asked them to go to the capital, and
Speaker 1: there seems to be a denial of the story of
Speaker 1: exactly what happened in the car. But I think everybody
Speaker 1: agrees this wasn't the first evidence that he wanted to
Speaker 1: go to the capital and sort of lead the mob
Speaker 1: to the capital. What I would say is that it's
Speaker 1: nothing new for Secret Service to tell the presidents, no,
Speaker 1: you can't do that, sir, And we have a wonderful
Speaker 1: example of it back when George W. Bush was president
Speaker 1: on September eleven, he said, take me back to the
Speaker 1: White House right now, and the Secret Service said, no, sir,
Speaker 1: you're staying up on the plane and flying around in
Speaker 1: circles because it's not safe to go to Washington right now.
Speaker 1: Part of this is very much about Trump, and part
Speaker 1: of it is about the structure of the presidency in
Speaker 1: the first place, that you know, the president can't get
Speaker 1: his way by ruling by edict, even with people who
Speaker 1: work in the White House, which is the closest units
Speaker 1: to people who are directly below him, people saying no
Speaker 1: to the president all the time. So, I mean, the
Speaker 1: other thing about that is that at the time, the
Speaker 1: Secret Serve didn't deny that they had tried to protect
Speaker 1: the president at the time Bush from getting into harm's way.
Speaker 1: But this time there's something strange going on. Also the
Speaker 1: fact that the vice president didn't want to get into
Speaker 1: the limousine. I mean, you know, obviously there are any
Speaker 1: number of ways to interpret what happened that day, But
Speaker 1: isn't that problematic in itself? I think that there's no
Speaker 1: question there's done a series of things about the Secret
Speaker 1: Service going back to at least the Obama presidency, maybe
Speaker 1: back you know before that that really could use a
Speaker 1: proper investigation, and whether it had to do with the
Speaker 1: shift of the Secret Service. It used to be in
Speaker 1: Treasuries now in Homeland Security. Of course, there was no
Speaker 1: Homeland Security on September eleven. That's a new department that
Speaker 1: came out of that, or maybe it's within the internal bureaucracy,
Speaker 1: internal culture of the agency itself that may really need
Speaker 1: some work. That's something that Congress certainly should be investigating,
Speaker 1: sort of separately from what happened on January six, But
Speaker 1: you know, it's also I'm I want to be very
Speaker 1: very cautious about what we know and what we don't know,
Speaker 1: and what we can know because a lot of Secret
Speaker 1: Service stuff has to be by its nature not public.
Speaker 1: So and that's partially the problem with what we heard
Speaker 1: the other day to write, we're hearing a lot of
Speaker 1: information that's not corroborable. Some of it yes, and some
Speaker 1: of it no. I think that the you know, in
Speaker 1: some ways you have to step back and say, well,
Speaker 1: we knew the broad outlines of what happened on that day,
Speaker 1: and within two days afterwards, we knew that former President
Speaker 1: Trump was publicly attempting and privately attempting to reverse the election,
Speaker 1: which is as he was doing. It was a form
Speaker 1: of undermining the constitutional order. We knew that he did
Speaker 1: not intervene when his supporters attacked the capital. He refused
Speaker 1: to say anything to tell him to stop, and in
Speaker 1: fact he did the opposite. You know, he continued to
Speaker 1: tweet that it was all pences fault for not doing
Speaker 1: the right thing, you know, as he saw it. So
Speaker 1: a lot of that, you know, in terms of what
Speaker 1: you could legitimately impeach a president on that he broke
Speaker 1: his oath of office, that he violated both of office
Speaker 1: in many serious ways. We knew that immediately, and in fact,
Speaker 1: you know, most of the Senate thought that you have
Speaker 1: seven Republicans out of fifty voted to convict, and about
Speaker 1: that many more, maybe maybe more than that, said well,
Speaker 1: we think he did it, but because of a technicality,
Speaker 1: we're not going to vote to convict. So you know,
Speaker 1: what we're getting now, to some extent, might be more
Speaker 1: than that. There's still a question of to what extent
Speaker 1: did Trump and the White House coordinate the violence on
Speaker 1: January six, We still have only seemed hints of that. Um,
Speaker 1: we know it was welcome, we know that he was
Speaker 1: for it, but we don't know, you know, whether there
Speaker 1: was actual coordination, and that's if that was true, that
Speaker 1: would be something significant that we didn't know back then.
Speaker 1: But what we know is certainly sufficient for impeachment if
Speaker 1: he was still in the White House, and it may
Speaker 1: very well be invitable. Yeah. I mean, the other thing
Speaker 1: that I'm curious to hear your thoughts on is Mark
Speaker 1: Meadows and his loyalty. I mean, the presidency isn't really
Speaker 1: supposed to be a cult of personality. We know that
Speaker 1: this presidency was a very different kind of one, but
Speaker 1: why is Mark Meadows continuing to be so loyal? Um? Yeah,
Speaker 1: that's a good question. Part of it is we don't
Speaker 1: know what Mark meadows criminal liability is. There's there was
Speaker 1: certainly some talk in the testimony on Tuesday about not
Speaker 1: just that Trump might be criminally liable for what was happening,
Speaker 1: but that Meadows and others in the White House might
Speaker 1: be as well. So if he feels that he's criminally liable,
Speaker 1: he may feel that not talking is the best course
Speaker 1: of action for himself. What happens in these things is
Speaker 1: that as some people start to talk, sometimes the incentives
Speaker 1: change and others feel like, you know, I'm in trouble.
Speaker 1: I need to cut a deal, or at least I
Speaker 1: need to give my side of in public. And we'll
Speaker 1: see if that happens coming out of this week's testimony. Yeah,
Speaker 1: there's certainly a lot of people having conversations behind closed
Speaker 1: doors these days. Jonathan got to ask you about the
Speaker 1: events of Friday and the weekend row getting overturned. I mean,
Speaker 1: we knew it was coming, it was still sort of
Speaker 1: pretty shocking. Now we have a whole patchwork of laws
Speaker 1: across the country, We have states going into action, we
Speaker 1: have courts in different states putting the palls button on.
Speaker 1: How does this get sorted out? Does it get sorted
Speaker 1: out state by state level? I have a very strong
Speaker 1: answer to this, which is, we don't know. Yeah. I
Speaker 1: think that there's there's people on both sides that are
Speaker 1: very certain of themselves, and I don't think that that's warranted.
Speaker 1: We don't know how this is going to play out
Speaker 1: state by state. We don't know. We don't know when
Speaker 1: is going to be either a larger democratic majority in
Speaker 1: unified democratic government than we have now or republican unified
Speaker 1: government at the national level. And if so, you know,
Speaker 1: how will take for that to happen, and then what
Speaker 1: they'll choose to do in that circumstance. You know, I
Speaker 1: think that the people who say, oh, this is only
Speaker 1: going to affect solidly republican states, and it's only going
Speaker 1: to affect divorce, it won't affect any of the other
Speaker 1: things that fall under the right to privacy. I think
Speaker 1: that's stilly. It already is starting to affect some of
Speaker 1: those things. But on the other hand, the people who say, ah,
Speaker 1: this is a step that is certain to result in
Speaker 1: rolling back every single privacy right nationally, we don't know
Speaker 1: that either. Um, we don't know how it's going to
Speaker 1: play out in this year's elections. We don't know how
Speaker 1: changes to both party coalitions may come out of this.
Speaker 1: That just are not that predictable because individuals and groups
Speaker 1: of people are going to make decisions about what to
Speaker 1: do exactly, And then the first question to ask even
Speaker 1: is doesn't even impact them in terms whether it be
Speaker 1: in turnout or in as you say, new coalitions being formed,
Speaker 1: or even as a gender item. We don't even know
Speaker 1: if people will vote on this. That's correct, And most
Speaker 1: of the time time for almost all Spreme Court decisions,
Speaker 1: I would say, you know, it'll fade from the headlines.
Speaker 1: That won't. It won't have a major effect. Probably it
Speaker 1: will have a negligible effect at best. This time, I
Speaker 1: would say, we don't know. I could definitely picture in
Speaker 1: the immediate event the people who are most engaged in
Speaker 1: this issue are people who, for the most part, are
Speaker 1: strong partisans. Strong voters are going to vote the same
Speaker 1: way they we're going to anyway. Could that change? Could
Speaker 1: the issues start affecting people who normally don't vote, who
Speaker 1: sometimes vote, who are not solidly partisan voters. It could.
Speaker 1: I have no idea. You know, we we do know
Speaker 1: that it's going to make abortion a more salient issue
Speaker 1: in state and local elections. But whether that means that
Speaker 1: people will vote on it, well, that's another question altogether.
Speaker 1: Jonathan Bernstein there, We're now choosing to end all conversations
Speaker 1: not with you, though, as always, do get in touch.
Speaker 1: I'm at Vney Quinn on Twitter or email me at
Speaker 1: v Quinn at Bloomberg dot Net and Bloomberger Innion is
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Speaker 1: you get your podcasts were produced by Eric mollow Till
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