WEBVTT - US Inflation Finally Offers Relief 0:00:01.840 --> 0:00:04.480 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.519 --> 0:00:07.320 Bloomberg Quick Takes Tim Stanovik. We're here every day bringing 0:00:07.360 --> 0:00:09.880 you the latest news from the worlds of business and finance, 0:00:09.880 --> 0:00:13.680 plus technology, politics, economics, all partnising the power of Business 0:00:13.720 --> 0:00:17.200 Week reporters and editors, not to mention our journalists and 0:00:17.200 --> 0:00:20.040 analyst in more than one twenty countries. You can download 0:00:20.040 --> 0:00:23.480 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You 0:00:23.520 --> 0:00:25.479 can also listen to our radio show at two pm 0:00:25.520 --> 0:00:28.440 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.440 --> 0:00:32.120 search Bloomberg glovel News. Let's get your business week agenda 0:00:32.200 --> 0:00:36.279 on this Thursday afternoon. We've got Michael McKee, international Economics 0:00:36.280 --> 0:00:39.240 and Policy correspondent at Bloomberg News here in our interactive 0:00:39.280 --> 0:00:41.519 broker studio, So too is Creaty Group to anchor and 0:00:41.560 --> 0:00:44.280 Markets correspondent at Bloomberg. Got to start with the trade 0:00:44.320 --> 0:00:46.360 here because I agree, you know, like we just haven't 0:00:46.400 --> 0:00:48.280 seen a rally like this in a long time. We 0:00:48.320 --> 0:00:50.760 absolutely haven't, and you know this is going to be 0:00:50.960 --> 0:00:54.720 a a fun combination of or confluence of a bunch 0:00:54.720 --> 0:00:57.160 of different factors. Now the immediate one. The biggest one 0:00:57.200 --> 0:00:59.600 I would argue is that CPI report we saw this 0:00:59.680 --> 0:01:03.160 morning eight thirty am. Future shot up like uh like 0:01:03.160 --> 0:01:05.240 like a kind of way. I said, yeah, absolutely, so 0:01:05.360 --> 0:01:07.240 to see this is pretty interesting. I want to put 0:01:07.240 --> 0:01:10.959 some context though, because Dan Curtis, our markets producer DJOR, 0:01:11.080 --> 0:01:13.319 did actually crunch the numbers a little bit and he said, 0:01:13.520 --> 0:01:15.959 if you invest in the SMP five hundred year to date, 0:01:16.280 --> 0:01:20.720 you lost about on your portfolio if you invested only 0:01:20.800 --> 0:01:24.320 on the days that you had a CPI report. So basically, 0:01:24.360 --> 0:01:26.360 the ten days it was had reports you've had, you've 0:01:26.400 --> 0:01:29.320 only lost seven percent. So basically a third of the 0:01:29.319 --> 0:01:32.960 markets losses this year so far have been a direct 0:01:33.520 --> 0:01:37.039 uh relationship to those CPI numbers, which speaks to just 0:01:37.080 --> 0:01:39.880 how sensitive the market is. Also, keep in mind that 0:01:39.959 --> 0:01:42.320 a lot of these shorts that were into that were 0:01:42.480 --> 0:01:44.320 kind of positioned in the market in the last couple 0:01:44.360 --> 0:01:46.840 of weeks. A lot of them were kind of liquidated 0:01:47.080 --> 0:01:49.800 before the election. The midterm election. The idea here being 0:01:49.800 --> 0:01:51.360 that gridlock was going to be a good thing for 0:01:51.360 --> 0:01:54.880 the markets. A Republican red wave would then once again 0:01:55.000 --> 0:01:57.320 be a positive, So a lot of shorts were taken 0:01:57.360 --> 0:01:59.240 out of the market. So the confluence of that, the 0:01:59.280 --> 0:02:01.840 CPI report work, and then of course the idea I 0:02:01.840 --> 0:02:04.600 would say a little bit of a short covering because 0:02:04.600 --> 0:02:06.400 they were already taken out. It's not a short cover 0:02:06.840 --> 0:02:09.079 um from what I from what I hear just from 0:02:09.080 --> 0:02:10.760 my sources. But then also keep in mind a little 0:02:10.760 --> 0:02:13.000 bit of a side relief what's going on in the cryptosphere, 0:02:13.240 --> 0:02:15.400 because yesterday there was the big question of is there 0:02:15.440 --> 0:02:19.920 contagion this? Uh, today perhaps not so much? Right, right, exactly, 0:02:19.960 --> 0:02:21.840 all right, So let's come in with Mike. I was 0:02:21.880 --> 0:02:24.600 listening to him this morning break it on Bloomberg surveillance 0:02:24.600 --> 0:02:31.160 that cp I print. It's it's down. We still have 0:02:31.160 --> 0:02:32.760 a ways to go, but it's a trend line that 0:02:32.800 --> 0:02:35.359 continues to go down. Right if you look at the 0:02:35.400 --> 0:02:40.480 reaction in the equity market, certainly you're welcome. Rooster gets 0:02:40.480 --> 0:02:45.720 credit for the sunrise, I get credit breaking Um, it's down, 0:02:45.880 --> 0:02:49.280 and it was down more than anybody could have anticipated. 0:02:49.320 --> 0:02:53.880 Now that's a relative judgment because seven point seven percent 0:02:53.960 --> 0:02:56.040 out the head like six point three on the core 0:02:56.160 --> 0:03:01.240 is still quite a bit. But uh, guests that we're 0:03:01.280 --> 0:03:04.760 going in the right direction. We don't know because it's 0:03:04.760 --> 0:03:09.760 only one month, but the overall number, especially in the core, 0:03:10.639 --> 0:03:13.080 there were a lot of things that went down in 0:03:13.160 --> 0:03:16.120 price which we had not seen. For the most part, 0:03:16.160 --> 0:03:19.600 what you're looking for is the rate of inflation slows, 0:03:20.000 --> 0:03:23.240 but in this case there were actual declines. Milk went down, 0:03:23.280 --> 0:03:27.600 orange juice went down, um bacon went down, which is 0:03:27.600 --> 0:03:32.720 always the most important item used. Cars went down. So yeah, 0:03:33.360 --> 0:03:38.360 basically you're you're looking at what could be a turning point, 0:03:38.360 --> 0:03:40.400 and I think that's what the markets were reacting to 0:03:40.600 --> 0:03:44.200 is because it was more than expected, more than anybody 0:03:44.200 --> 0:03:48.080 had thought possible. It's okay, this is this is a change, 0:03:48.160 --> 0:03:51.960 this is the turning point. It will lead the FED 0:03:52.040 --> 0:03:56.320 to put some sort of uh stopping point in place 0:03:56.400 --> 0:04:00.160 soon enough and maybe we get that soft landing. But 0:04:00.280 --> 0:04:02.440 is the headline number coming to Like I thought I 0:04:02.480 --> 0:04:04.920 had seen something on the TV side that they were 0:04:04.920 --> 0:04:06.920 talking about. This was like the fourth month in a row. 0:04:07.880 --> 0:04:11.040 Is there is there a trendline yet or no, there's 0:04:11.080 --> 0:04:14.280 not a trend line yet. The problem being with the 0:04:14.280 --> 0:04:17.640 headline is that food and gasoline are still going up. 0:04:17.680 --> 0:04:21.480 Food increased less than it did the month before, Gasoline 0:04:21.520 --> 0:04:27.400 was down five in September and up in September, so 0:04:28.360 --> 0:04:32.160 in October, brothers. So you know, the headline is subject 0:04:32.200 --> 0:04:34.880 to the vagaries of things that the FED has nothing 0:04:34.920 --> 0:04:37.000 to do with, so safe to say crety when you 0:04:37.000 --> 0:04:38.680 look at the markets and certainly what happened on the 0:04:38.720 --> 0:04:41.200 fixed income side of things. I mean, investors are expecting 0:04:41.279 --> 0:04:44.080 that the FED is kind of done with not that 0:04:44.120 --> 0:04:46.760 they're done raising rates, but done with those big rates. Well, 0:04:46.839 --> 0:04:49.000 I'm not going to use the word pivot, as I 0:04:49.040 --> 0:04:52.080 was told not to by someone in this room, but 0:04:52.320 --> 0:04:54.760 what I will say is that there is there is. 0:04:54.800 --> 0:04:58.200 I mean, look, the commentary has already changed in literally 0:04:58.279 --> 0:05:01.440 the last six hours or so since we've gotten this data. 0:05:01.800 --> 0:05:04.280 The idea that the conversation of soft landing is back 0:05:04.320 --> 0:05:08.080 into the narrative, The idea of that perhaps another seventy 0:05:08.080 --> 0:05:10.760 five basis point hike is thrown out the window. Um 0:05:10.839 --> 0:05:14.640 so far that the quote unquote pivot that everyone was 0:05:14.720 --> 0:05:17.440 expecting going into I want to say, even last month 0:05:17.880 --> 0:05:20.640 is actually coming the slow down that you will of 0:05:20.760 --> 0:05:23.120 rate hikes, and that is actually a good sign. There's 0:05:23.200 --> 0:05:26.800 also this commentary on the jobs market, specifically because look 0:05:26.800 --> 0:05:28.560 at the layoff numbers that you are starting to see 0:05:28.560 --> 0:05:31.360 in corporate America, people all of a sudden are saying, 0:05:31.360 --> 0:05:33.080 and I want to say on Wall Street and off 0:05:33.080 --> 0:05:35.240 Wall Street, because that matters. The markets are always going 0:05:35.320 --> 0:05:38.160 to talk about sentiment off Wall Street, They're gonna not 0:05:38.200 --> 0:05:41.000 necessarily have that same timeline. They're talking about the fact 0:05:41.040 --> 0:05:44.480 that the economy is actually turning. Yeah, exactly, all right, 0:05:44.680 --> 0:05:46.680 Mike twenty seconds. I say for you in terms of 0:05:46.680 --> 0:05:49.240 FED talk, because we are FED speakers, anything that's a 0:05:49.320 --> 0:05:52.480 note for you, No, they basically followed a script. We've 0:05:52.480 --> 0:05:54.200 had a lot of FED speakers today and almost all 0:05:54.200 --> 0:05:56.919 of them said the same thing that, um, it is 0:05:57.040 --> 0:06:00.400 time to consider slowing down the pace of rating races. 0:06:00.640 --> 0:06:02.719 But we've got a long way to go, and the 0:06:02.720 --> 0:06:06.000 inflation battle is not one. Inflation still way too high. 0:06:06.360 --> 0:06:11.240 So if heeds the narrative, not gonna be but probably 0:06:11.279 --> 0:06:13.040 going to be fifty and then there'll be another one 0:06:13.080 --> 0:06:15.720 after that. All right, Michael McKee and Crety Groupta, thank 0:06:15.720 --> 0:06:17.720 you so much for our markets set up here on 0:06:17.760 --> 0:06:22.000 this Thursday. This is Bloomberg Business Week with Carol Messer 0:06:22.240 --> 0:06:26.599 and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio Paul 0:06:26.640 --> 0:06:28.839 and I were just talking. He got his COVID vaccine, 0:06:28.880 --> 0:06:33.480 the number five COVID vaccine. Me too this morning. It's 0:06:33.480 --> 0:06:35.880 the one against the O macron variants. Uh. This as 0:06:35.880 --> 0:06:39.520 we see COVID nine hospitalizations rising among babies under six 0:06:39.560 --> 0:06:42.840 months old, and the US CDC is urging mothers to 0:06:42.839 --> 0:06:45.080 get vaccinated to reduce the risk of infection that was 0:06:45.120 --> 0:06:48.240 not yet eligible for shots. That was coming from the 0:06:48.279 --> 0:06:51.560 CDC director Rochelle Wallinski. Well back with us is Dr 0:06:51.600 --> 0:06:53.800 Ian LUs Beder, clinical Professor of Medicine at n y 0:06:53.880 --> 0:06:56.279 U Land God he is once again on the phone 0:06:56.320 --> 0:06:59.080 in New York City. Hey Ian, Dr LUs Beder, good 0:06:59.080 --> 0:07:01.479 to have you here with Paul and myself. So I 0:07:01.560 --> 0:07:03.320 got my COVID chat. I'm feeling kind of good. I'm 0:07:03.360 --> 0:07:06.120 running out of space on my card. Um tell us 0:07:06.120 --> 0:07:08.640 about the what's going on? First of all, how are you? 0:07:10.360 --> 0:07:13.840 Everything is great, Nice to be with you, Carol and 0:07:13.920 --> 0:07:16.560 Paul and uh, yep, COVID is still with us. So 0:07:16.600 --> 0:07:19.679 we've talked about us for several years and not going 0:07:19.720 --> 0:07:22.160 away yet. And some of the data which we can 0:07:22.200 --> 0:07:24.520 talk about this time or next time. In Nature Journal, 0:07:24.520 --> 0:07:28.800 the prestigious journal we're seeing more variants out there. Dr 0:07:29.000 --> 0:07:34.400 Lensky raises a point about seeing more COVID in really 0:07:34.400 --> 0:07:36.720 the very young and the very old. They're the most susceptible, 0:07:37.120 --> 0:07:41.000 and the CDC does not recommend vaccines for babies under 0:07:41.000 --> 0:07:45.960 six months, so that group is somewhat more susceptible. According 0:07:46.000 --> 0:07:50.320 to my sources, they're seeing a number of infections r SC, 0:07:50.480 --> 0:07:54.280 power influenza, add no rhinoviruses, well, this sort of virus 0:07:54.320 --> 0:07:57.080 soup that kids are coming in with. So I don't 0:07:57.120 --> 0:07:59.840 think we can say kids are getting sicker from or 0:08:00.120 --> 0:08:05.400 dying from, but they're certainly being hospitalized with COVID. And 0:08:05.440 --> 0:08:09.760 so the thought is, since antibodies crossed the placenta, that 0:08:09.920 --> 0:08:15.520 mothers or pregnant women probably would benefit from getting vaccines 0:08:15.560 --> 0:08:18.880 and being boosted because that should gives passive immunity for 0:08:18.920 --> 0:08:22.560 the first few months after delivery to the babies. UH 0:08:22.800 --> 0:08:26.080 complicating that, and certainly that's true for older people. To 0:08:26.240 --> 0:08:29.400 definitely be up to date, we've talked for a long 0:08:29.440 --> 0:08:33.400 time diabetes, heart disease, lung disease. Those people are much 0:08:33.440 --> 0:08:37.040 more at risk. So we're not seeing a big increase 0:08:37.080 --> 0:08:40.640 in COVID deaths the opposite. We're seeing fewer cases nationally 0:08:40.679 --> 0:08:44.840 and the death rate is dropping as well. But for 0:08:44.960 --> 0:08:47.839 vulnerable populations, they need to be aware of this not 0:08:48.080 --> 0:08:52.160 less fare for folks. To characterize where we are in 0:08:52.200 --> 0:08:58.080 this process, is covid Is is endemic not pandemic. Yes, 0:08:58.200 --> 0:09:01.080 I think that's a very good and I think you 0:09:01.080 --> 0:09:03.640 know that's what we will see. In other words, endemic. 0:09:04.160 --> 0:09:06.160 We're going to be living with it for a long time. 0:09:06.160 --> 0:09:09.400 We're seeing more and more variance. This Nature Journal talked 0:09:09.440 --> 0:09:14.479 about variant soup XBB. Different countries are having different offshoots 0:09:14.480 --> 0:09:17.000 of O macron u, you know, which is why in 0:09:17.080 --> 0:09:19.280 part we need to find out the origin of the virus, 0:09:19.480 --> 0:09:22.600 you know, because this is new. We are not really 0:09:23.080 --> 0:09:26.520 living with viruses in the past that have had the 0:09:26.520 --> 0:09:30.960 ability to mutate this much and really um be in 0:09:31.000 --> 0:09:34.360 every area, and vaccines are not able to keep up 0:09:34.360 --> 0:09:38.199 with the mutations. We're seeing um more mutations in what's 0:09:38.240 --> 0:09:42.040 called the receptor binding domain, right, so that's where the 0:09:42.160 --> 0:09:46.160 virus attaches and when you have more rb D changes, 0:09:46.200 --> 0:09:50.479 and we're seeing really an exponential increase in those mutations 0:09:50.480 --> 0:09:53.400 and variants. You can have as many vaccines as you 0:09:53.440 --> 0:09:56.560 want the virus outruns you, So there's a lot more 0:09:56.600 --> 0:09:59.440 work to do. The good news is um over time, 0:09:59.440 --> 0:10:02.720 whether it'svaccines, are just getting COVID a few times, people 0:10:02.760 --> 0:10:05.720 seem to be more resistant. But how this will end 0:10:05.800 --> 0:10:08.439 we don't really know yet. Certainly we're going to live 0:10:08.480 --> 0:10:10.320 with it for a while, but how it will end, 0:10:10.360 --> 0:10:13.560 we don't know. So are you anticipating I'm curious, you know, 0:10:13.920 --> 0:10:16.480 you guys at n y U Land going or what's 0:10:16.520 --> 0:10:19.360 the talk of the medical community. Are we anticipating some 0:10:19.440 --> 0:10:22.160 other kind of spike among the general population come to 0:10:22.240 --> 0:10:24.679 fall in winter months or is it just like we'd 0:10:24.720 --> 0:10:26.959 see a spike in flu cases, which we know can 0:10:27.000 --> 0:10:32.120 also be deadly right, Unfortunately, vaccines are not perfect. Right, 0:10:32.160 --> 0:10:35.720 the flu vaccine is about fifty effect of UM. You know, 0:10:35.800 --> 0:10:38.760 we have to take it. Certainly, you don't want the flu. 0:10:39.320 --> 0:10:42.400 It's not fun and it does kill certainly people. So 0:10:42.440 --> 0:10:45.439 I think vaccines are helping. But all of these viruses 0:10:45.960 --> 0:10:49.600 are piercing a lot of those vaccines. I do think 0:10:49.600 --> 0:10:51.240 we are going to see a bit of a rise, 0:10:51.679 --> 0:10:55.640 and I'm concerned about other countries where these other variants 0:10:55.640 --> 0:10:59.319 are going on that are resistant to our by valence vaccine, 0:10:59.679 --> 0:11:02.200 So we don't really know will that be another way? 0:11:02.640 --> 0:11:04.640 It doesn't look that way at this point. The number 0:11:04.640 --> 0:11:08.720 of cases are dropping, hospitalizations from COVID or dropping. What 0:11:08.800 --> 0:11:12.120 will happen in the winter. Uh, hopefully it will stay 0:11:12.120 --> 0:11:14.080 in those other countries and not come to the US, 0:11:14.160 --> 0:11:17.440 but we're not sure. Yeah, right, Uh, stay tuned for 0:11:17.480 --> 0:11:19.600 all of this. Um Ian, Thank you so much. Dr 0:11:19.640 --> 0:11:21.880 Ian los bad Our, Clinical Professor Medicine at n y 0:11:21.960 --> 0:11:25.400 U Landgoing Medical Center. You're listening to Bloomberg Business Week 0:11:25.600 --> 0:11:29.520 with Carol Messer and Bloomberg Quick Takes Tim Stinovic on 0:11:29.720 --> 0:11:33.040 Bloomberg Radio. The new issue of Bloomberg Business Week is out. 0:11:33.200 --> 0:11:35.600 Is on newsstands, it's online of Bloomberg dot com slash 0:11:35.640 --> 0:11:39.360 business weekend of course, on the Bloomberg terminal. The cover story, 0:11:39.400 --> 0:11:42.719 appropriately so, is about this week's midterm elections. It's a 0:11:42.760 --> 0:11:45.840 story you'll find in the issue's remarks. It's about Republican 0:11:45.880 --> 0:11:50.360 Congressman Kevin McCarthy's dream and nightmare coming true. Here to explain, 0:11:50.400 --> 0:11:53.679 Bloomberg Business Week National correspondent Josh Green. He's with us 0:11:53.720 --> 0:11:57.120 on the phone in Washington, d C. Josh, good to 0:11:57.160 --> 0:11:59.920 have you here with Paul and myself, So tell us 0:11:59.920 --> 0:12:02.679 about Kevin McCarthy his dream come true, And yeah, it's 0:12:02.679 --> 0:12:06.920 probably not exactly maybe like he envisioned. Well. McCarthy is 0:12:07.000 --> 0:12:10.600 a longtime Republican House leader who has wanted to be 0:12:10.679 --> 0:12:13.280 Speaker of the House for years and years and years. 0:12:13.480 --> 0:12:17.160 UM was expected to be in UM and was sort 0:12:17.200 --> 0:12:21.480 of uh forced out, forced to remove himself from the 0:12:21.559 --> 0:12:24.559 race uh in favor of Paul Ryan before he could 0:12:24.559 --> 0:12:26.520 get in there, because he just didn't have the trust 0:12:26.600 --> 0:12:28.400 to the right wing of this caucus. Over the last 0:12:28.400 --> 0:12:32.120 seven years, he's plotted, he's raised money, he's campaigned, uh, 0:12:32.120 --> 0:12:33.840 and it seemed like on election night he was on 0:12:33.880 --> 0:12:37.200 the cost of taking over the speakership, maybe by a 0:12:37.280 --> 0:12:39.960 pretty wide margin. And then of course the red wave 0:12:40.640 --> 0:12:42.480 uh turned out not to be much of a wave 0:12:42.600 --> 0:12:45.040 after all. So we're I write in the New Business Week, 0:12:45.160 --> 0:12:47.839 is that it still looks like Republicans and win the House, 0:12:47.840 --> 0:12:50.520 but it's gonna be a very very narrow majority. And 0:12:50.559 --> 0:12:53.439 so it's it's the dream for McCarthy in the sense 0:12:53.440 --> 0:12:56.559 that he'll finally realize the speakership, but it's a nightmare 0:12:56.600 --> 0:12:59.480 because it means that the right wing of his caucus. 0:12:59.520 --> 0:13:03.000 You know, rat icals like Marjorie Taylor Green are really 0:13:03.000 --> 0:13:04.800 going to have a lot of leverage over him, and 0:13:04.840 --> 0:13:07.560 I think that's a recipe for chaos. This is a 0:13:07.600 --> 0:13:11.560 great quote in here, uh that from Senator Green quote. 0:13:11.760 --> 0:13:13.480 She made this to the New York Times. I think 0:13:13.520 --> 0:13:15.440 that to be the best Speaker of the House and 0:13:15.520 --> 0:13:18.480 to please the base, he's going to give me a 0:13:18.480 --> 0:13:21.640 lot of power and a lot of leeway. So that's 0:13:21.679 --> 0:13:25.040 some pressure on the next Speak of the House, whoever 0:13:25.080 --> 0:13:27.640 that is, to really do cater to some of the 0:13:27.760 --> 0:13:31.240 right wing elements of the Republican Party. Is McCarthy willing 0:13:31.240 --> 0:13:33.960 able to do that? Well, I think he's in a 0:13:33.960 --> 0:13:37.000 position where he's not going to have much of a choice. Um, 0:13:37.040 --> 0:13:39.120 you know, he he needs in order to elected speaker, 0:13:39.160 --> 0:13:41.320 he needs two hundred eighteen votes. And if you've got 0:13:41.360 --> 0:13:42.840 you know, had there been a big wave and they 0:13:42.880 --> 0:13:44.720 were you know, let's say, you know, two hundred fifty 0:13:44.720 --> 0:13:47.120 two and sixty Republicans, I think he might have been 0:13:47.160 --> 0:13:51.400 able to marginalize people like Representative Green. And just to 0:13:51.440 --> 0:13:54.120 be clear for for listeners, um, you know, this isn't 0:13:54.120 --> 0:13:56.880 somebody who wants aggressive tact cuts. She is someone who 0:13:57.000 --> 0:14:00.960 suggested a while back, um that forest fires in California 0:14:01.000 --> 0:14:04.920 were caused by lasers from space. Um, She's retweeted a 0:14:04.920 --> 0:14:07.880 lot of q and on conspiracy theories. And she was 0:14:07.960 --> 0:14:11.760 stripped in this current Congress of her committee assignments for 0:14:11.840 --> 0:14:17.240 having endorsed social media posts calling on Democratic officials to 0:14:17.280 --> 0:14:19.960 be assassinated. So we're talking way way off the deep 0:14:20.080 --> 0:14:23.040 end um extreme right. And yet you hear from the 0:14:23.080 --> 0:14:25.800 quote you just read that she expects and is getting 0:14:26.480 --> 0:14:29.760 a lot of catering to by McCarthy simply because he 0:14:29.880 --> 0:14:33.360 needs her vote in order to assemble those two eighteen votes. 0:14:33.640 --> 0:14:37.240 The smaller the Republican margin is, uh, the more leverage 0:14:37.320 --> 0:14:40.080 people like Green and the House Freedom Caucus are going 0:14:40.120 --> 0:14:44.120 to have. You know, Josh, it feels like the Republicans 0:14:44.120 --> 0:14:47.320 over the last few years, five years, ten years, I guess, 0:14:47.640 --> 0:14:49.160 you know, have been smart when they're all kind of 0:14:49.200 --> 0:14:52.760 on a singular mission and whether it's Supreme Court justices 0:14:52.840 --> 0:14:57.040 and you know, different initiatives that are out there, abortion 0:14:57.120 --> 0:15:00.120 and so on and so forth. Um, what is the 0:15:00.120 --> 0:15:02.840 the Republican mission at this point? What is the agenda? 0:15:02.840 --> 0:15:05.280 Because you kind of you right, that that's a problem 0:15:05.280 --> 0:15:08.240 for McCarthy because they don't really have an agenda. Yeah, 0:15:08.280 --> 0:15:09.560 you know, it is, I mean one of the one 0:15:09.600 --> 0:15:12.200 of the difficulties when you have a kind of chaotic 0:15:12.240 --> 0:15:15.400 Republican party like like McCarthy does, it's hard to get 0:15:15.400 --> 0:15:17.400 people to degree of an establishment wing that wants you 0:15:17.440 --> 0:15:19.840 to government responsibly. You have a radical ring that wants 0:15:19.840 --> 0:15:23.400 to impeach Joe Biden, and so Republicans this election really 0:15:23.400 --> 0:15:26.240 didn't agree on a clear set of legislative goals the 0:15:26.280 --> 0:15:30.080 way that let's say New Gingrich did in the Contract 0:15:30.160 --> 0:15:33.280 with America UM. That was in order to focus attention 0:15:33.360 --> 0:15:37.120 on on Biden and the problems with inflation and crime. Uh. 0:15:37.120 --> 0:15:38.720 And it you know, it looks like that's worked to 0:15:38.840 --> 0:15:41.400 a very narrow extent of Republicans do wind up winning 0:15:41.400 --> 0:15:43.280 the House. But the problem is it leaves a vacuum 0:15:43.320 --> 0:15:46.080 for anybody to rush in uh and push their issue. 0:15:46.120 --> 0:15:48.200 And so one of the things that we're gonna be 0:15:48.200 --> 0:15:50.400 contending when the Republicans are gonna be contending with is 0:15:50.440 --> 0:15:53.640 there's an element that wants to engineer another debt ceiling 0:15:53.680 --> 0:15:56.760 showdown in order to cut Medicare and Social Security. I'm sure. 0:15:56.760 --> 0:15:59.960 You guys, remember eleven years ago, after Republicans won the 0:16:00.040 --> 0:16:01.840 House tried to do that same thing. We came to 0:16:01.880 --> 0:16:05.120 the brink of default and US government uh dead wound 0:16:05.160 --> 0:16:08.240 up or credit wound up being written down. So a 0:16:08.320 --> 0:16:11.760 lot of concern among both Republicans and Democrats are at 0:16:11.800 --> 0:16:16.400 least the more responsible ones about what exactly h McCarthy 0:16:16.520 --> 0:16:18.640 led the House would look like, what they'd be able 0:16:18.640 --> 0:16:21.200 to engineer, and what kind of problems that might cost 0:16:21.200 --> 0:16:24.160 with the global economy. So, I mean, you point out 0:16:24.160 --> 0:16:26.680 in your piece here that boy, it's tough to be 0:16:26.720 --> 0:16:28.880 a Republican Speaker of the House. The last two John 0:16:28.920 --> 0:16:32.200 Baynard and Paul Ryan, they were effectively hounded out of 0:16:33.040 --> 0:16:35.640 the position and out of politics in general by the 0:16:35.760 --> 0:16:40.200 right wing of their caucus. I mean, McCarthy, representative McCarthy 0:16:40.280 --> 0:16:44.560 has to be sensitive to that, cognizant of that, you know, absolutely. 0:16:44.600 --> 0:16:46.880 I mean, the lifespan of a Republican House speaker, it's 0:16:46.880 --> 0:16:48.960 sort of like being the drummer for spinal tap, Like 0:16:49.040 --> 0:16:52.480 you're not gonna be around for very long. Um, And 0:16:52.520 --> 0:16:55.320 you know, arguing McCarthy actually has a tougher job than 0:16:55.400 --> 0:16:58.160 John Bayner or Paul Ryan, the last two Republican speakers 0:16:58.160 --> 0:17:00.480 who were both hounded out of the job by their wings. 0:17:01.040 --> 0:17:03.680 Um A, because the right wing is just more radical today, 0:17:03.960 --> 0:17:06.280 there's gonna be a narrow majority. But the other reason 0:17:06.440 --> 0:17:09.760 is that, you know, the big influential voice on the 0:17:09.800 --> 0:17:13.640 outside who's dictating a lot of behavior. Donald Trump wasn't 0:17:13.640 --> 0:17:15.680 on the scene for for John Banner. Mean, John Bender 0:17:15.720 --> 0:17:17.199 couldn't hold on to his job, and it was you know, 0:17:17.280 --> 0:17:19.399 Donald Trump wasn't even weighing in. Well he's going to 0:17:19.440 --> 0:17:23.080 be now. Uh. You know, everybody's expecting a presidential announcement 0:17:23.119 --> 0:17:25.480 from Trump in the next couple of days or in 0:17:25.480 --> 0:17:27.720 the next week. Uh, you know, and he's somebody who 0:17:27.760 --> 0:17:32.160 likes to weigh in and criticize people Kevin McCarthy in particular. Uh. 0:17:32.160 --> 0:17:34.520 And you know, that's one more headache that McCarthy is 0:17:34.520 --> 0:17:36.600 going to have to grapple with as he tries to 0:17:36.720 --> 0:17:40.679 cobble together this narrow majority, uh and keep his Republican 0:17:40.720 --> 0:17:44.560 caucus from revolting. So does that mean you're expecting that 0:17:44.600 --> 0:17:49.840 he doesn't really get anything done? Or maybe I think 0:17:49.880 --> 0:17:51.760 that's right. Uh, you know, I think it would be 0:17:51.800 --> 0:17:54.840 considered a win for from McCarthy and Democrats. You know, 0:17:54.880 --> 0:17:58.400 if we're just able to avoid a death ceiling to fall. Um. 0:17:58.400 --> 0:18:01.480 But as far as passing legis flation, if McCarthy takes 0:18:01.520 --> 0:18:04.359 over and Republicans win the House, that effectively ends the 0:18:04.400 --> 0:18:06.560 period of the bride and presidency where we're getting big 0:18:06.560 --> 0:18:09.760 pieces of legislation through the House. Um, nothing's really going 0:18:09.800 --> 0:18:11.600 to kind of get through. The thing that I think 0:18:11.600 --> 0:18:13.800 a lot of people are worried about is will mccorthy 0:18:13.880 --> 0:18:17.400 be able to do basic things like pass an appropriation bill, 0:18:18.200 --> 0:18:20.479 have the the U. S Government payoff its debts by 0:18:20.560 --> 0:18:23.000 raising the debt limit. The basic kind of blocking and 0:18:23.080 --> 0:18:26.239 tackling that didn't used to be contentious ten years ago. Uh, 0:18:26.520 --> 0:18:28.640 but now has become very much so. And it's really 0:18:28.640 --> 0:18:30.919 not clear is there going to be an adult in 0:18:30.960 --> 0:18:33.720 the room who can make these things happen or is 0:18:33.800 --> 0:18:36.960 McCarthy in trouble. Josh really quickly twenty seconds here an 0:18:37.000 --> 0:18:39.600 impeachment of President Biden. Is that likely to happen with 0:18:39.640 --> 0:18:43.400 him as speaker? It's certainly possibility. A lot of Republicans 0:18:43.400 --> 0:18:46.080 telling Bloomberg News that that's something they want to push 0:18:46.119 --> 0:18:48.840 in the new Congress. It will be made more difficulty 0:18:49.000 --> 0:18:51.280 by the narrow majority, but I think it's something that's 0:18:51.280 --> 0:18:54.640 certain to come up interesting times. They just continue, Josh Green, 0:18:54.760 --> 0:18:56.919 great cover story of Bloomberg Business Week. It is the 0:18:56.920 --> 0:19:00.000 remarks of the new issue of Bloomberg Business Week on newstands, 0:19:00.040 --> 0:19:02.720 on the Bloomberg terminal and at Bloomberg dot com slash 0:19:02.760 --> 0:19:05.680 business Week. Josh by the way, national correspondent Bloomberg Business Week, 0:19:05.720 --> 0:19:08.800 joining us on the phone in d C. And we 0:19:08.840 --> 0:19:13.160 appreciate that, like job, be careful what you wished exactly. 0:19:13.280 --> 0:19:17.280 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:19:17.359 --> 0:19:21.960 Quick Takes Tim Stinovic on Bloomberg Radio. You're listening to 0:19:22.040 --> 0:19:26.000 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes 0:19:26.119 --> 0:19:30.280 Tim Stinovic on Bloomberg Radio. The crypto story that was 0:19:30.320 --> 0:19:33.199 the recent cover, really entire issue of Bloomberg Business Week 0:19:33.240 --> 0:19:35.639 was written by Bloomberg opinion columnist Matt Levin. So I 0:19:35.760 --> 0:19:38.359 knew we wanted Matt to weigh in on this week's 0:19:38.359 --> 0:19:41.280 flurry of activity and calamity surrounding the meltdown of the 0:19:41.320 --> 0:19:43.959 crypto Exchange f t X. Matt is a Bloomberg opinion 0:19:43.960 --> 0:19:46.960 calumnist covering finance, former editor of deal Breaker from her 0:19:47.040 --> 0:19:49.440 investment banker colgmnacts so much more. He is back in 0:19:49.480 --> 0:19:52.199 our Bloomberg Interactive Broker studio. Thank you, thank you, thank you. 0:19:52.240 --> 0:19:56.399 I know you're busy. Um, you went through all the 0:19:56.520 --> 0:19:59.480 nix and crannies of how the crypto world came to be. 0:19:59.600 --> 0:20:02.679 Really taught us kind of the understanding of all of 0:20:02.680 --> 0:20:06.240 the terminology of the significance of the development since crypto 0:20:06.320 --> 0:20:08.800 has come to be, how do you then take this 0:20:08.880 --> 0:20:13.000 week and kind of cross it with what you wrote about? Well, 0:20:13.040 --> 0:20:15.199 I mean, one thing that I wrote towards the end 0:20:15.200 --> 0:20:17.800 of that piece was that Crypto this summer had its 0:20:17.840 --> 0:20:20.720 own two thousand eight where it had a financial crisis 0:20:20.760 --> 0:20:24.680 caused by like over leverage and opaque interconnections between firms. 0:20:25.160 --> 0:20:28.960 And you know, in the summer, the person bailing out 0:20:29.080 --> 0:20:31.040 the you know, providing the bailouts to these firms that 0:20:31.040 --> 0:20:35.280 we're wearing bust was f t X. And this week 0:20:35.440 --> 0:20:38.000 ft X is having its two thousand eight crisis. So 0:20:38.040 --> 0:20:40.320 what does that mean when the White Night, as everybody 0:20:40.400 --> 0:20:43.560 keeps calling him, has his own crisis. Well, it's bad, 0:20:45.359 --> 0:20:49.080 I mean, I mean it's it's bad because like the 0:20:49.080 --> 0:20:51.080 place where you thought your money was safe in crypto 0:20:51.200 --> 0:20:53.760 is not safe. It's bad also because like if your money, 0:20:53.880 --> 0:20:55.600