Speaker 1: Now from our nation's capital. This is Bloomberg sound On.
Speaker 1: I'm here today to announce the appointment of a special
Speaker 1: council charging the president with a crime. Was not at options.
Speaker 1: We first went through Russia, Russia, Russia, it was all.
Speaker 1: We then went through the Muller Record, Bloomberg sound on Politics,
Speaker 1: Policy and perspective from DC's top names. While higher interest rates,
Speaker 1: slower growth, and software labor market conditions will bring down inflation,
Speaker 1: they will also bring some pain. People were pretty you know,
Speaker 1: in shock by those common Floomberg sound On with Joe
Speaker 1: Matthew on Bloomberg Radio, there is another Welcome to the
Speaker 1: fastest hour in politics, with another special council announced by
Speaker 1: the Department of Justice to investigate Donald Trump, the documents
Speaker 1: of mar A Lago, the effort to overturn the twenty election.
Speaker 1: Will it be different this time? We talked with two experts,
Speaker 1: Rebecca roy Fee of New York Law School, former District
Speaker 1: Attorney for New York County and former Watergate prosecutor Nick
Speaker 1: Ackerman later f t X SBF and the a b
Speaker 1: C's of the crypto crisis, in a special conversation with
Speaker 1: Bloomberg's Joe Wisenhal, columnist and host of the Odd Lots podcast.
Speaker 1: Looking forward to it. I'd call it a Friday news dump,
Speaker 1: but it happened around lunchtime. Does does that count when
Speaker 1: it's at noon? It was to something in the afternoon.
Speaker 1: Attorney General Merrick Garland, in a hastily scheduled announcement here
Speaker 1: he is, I'm here today to announce the appointment of
Speaker 1: a special council in connection with two ongoing criminal investigations
Speaker 1: that have received significant public attention. Uh huh d J
Speaker 1: T Donald J. Trump. Garland determined that it was in
Speaker 1: the public interest here for yes, another special council to
Speaker 1: oversee criminal investigations related to Trump deciding whether to bring charges, and,
Speaker 1: as he indicated, timing is everything. Listen again, Based on
Speaker 1: recent developments, including the former president's announcement that he has
Speaker 1: a candidate for president in the next election and the
Speaker 1: sitting president stated intention to be a candidate as well,
Speaker 1: I have concluded that it is in the public interest
Speaker 1: to appoint a special council. Yeah, so, John or Jack
Speaker 1: as you will hear him, refer to Smith the new
Speaker 1: special Council under the order signed today. Since eighteen he
Speaker 1: has served as Chief prosecutor for the Special Court in
Speaker 1: the Hague charged with investigating adjudicating war crimes in Kosovo.
Speaker 1: He is a former acting U S Attorney. Uh. This
Speaker 1: is going to be something. And we start our conversation
Speaker 1: to get a sense of what this means and what
Speaker 1: we can expect, having of course gone through the Motor
Speaker 1: probe already had a special counsel with this same Now
Speaker 1: former President Rebecca Royfi joins as professor of law at
Speaker 1: New York Law School. Former assistant District attorney for your county. Rebecca,
Speaker 1: it's really great to have you back. I have some
Speaker 1: really pretty straightforward and simple questions for you to start with,
Speaker 1: and and to begin with, why announce a special counsel?
Speaker 1: People watched what happened last time. Uh, and and remember
Speaker 1: back to ken Starr, they're not used to seeing these
Speaker 1: lead to a lot. Why now? First of all, thanks
Speaker 1: for having me, And yeah, you know, I think that
Speaker 1: the purpose here is to try to create a separation
Speaker 1: between the politically appointed Attorney general and this highly sensitive,
Speaker 1: highly charged investigation into the former president. You raise a
Speaker 1: good question into well, you know, how effective is that
Speaker 1: separation actually? Will people really look at this and think
Speaker 1: this is an independent investigation, and you know, I think
Speaker 1: Attorney General Garland has to hope so. And I think
Speaker 1: there are some set of people who will always assume
Speaker 1: that any investigation into the former president is politically motivated,
Speaker 1: as he as already and will no doubt continue to suggest.
Speaker 1: But hopefully there are some people who will view this
Speaker 1: as a sign that this further stage of the investigation
Speaker 1: is being conducted by somebody who is a career prosecutor
Speaker 1: and really doesn't have uh course in the race, and
Speaker 1: in that way can act as a more independent, um
Speaker 1: and hopefully more legitimate source of this investigation and if
Speaker 1: if it ends up happening, prosecution to be clear, for
Speaker 1: some of our listeners probably hearing about this as they're
Speaker 1: you know, coming out of work or just beginning to
Speaker 1: pay attention here, uh, this will this will bring oversight
Speaker 1: to this Special Council of the two investigations the January
Speaker 1: six insurrection of the Capitol, including any role that Trump
Speaker 1: may have played, as well as the documents case, the
Speaker 1: president's handling a classified documents after he left office. So
Speaker 1: those are the two cases. Well, does that mean that
Speaker 1: Merrick Garland will not be connected to them? Will there
Speaker 1: be a firewall between the Special Counsel and the Attorney General.
Speaker 1: I think a firewall is an exaggeration. The Council is
Speaker 1: really embedded um within the Department of Justice, but there
Speaker 1: are levels of separation that make it such that this
Speaker 1: investigation is insulated from direct control by the Attorney General. Okay,
Speaker 1: got it. Now what do you know about Jack Smith,
Speaker 1: the investigator you mentioned? We have a serious contender here,
Speaker 1: a life a lifetime prosecutor, and experienced prosecutor. But you know,
Speaker 1: my goodness, this this sounds like deep experience when we're
Speaker 1: talking about war crimes, and Kosovo not not the typical
Speaker 1: candidate for such a role. Yeah, I mean, you know,
Speaker 1: I think it's interesting. I first of all, I think
Speaker 1: one of his strengths is that people don't know much
Speaker 1: about him. He has a kind of anonymity, and that
Speaker 1: makes it more likely that he will be seen as
Speaker 1: a you know, kind of a career prosecutor who's just
Speaker 1: doing his job, rather than somebody who has any political,
Speaker 1: uh connection ends or investment in the outcome of the case.
Speaker 1: So I think that's probably why they chose him. As
Speaker 1: you said, he has a lot of experience, and I
Speaker 1: think that that's you know, important and both for his
Speaker 1: you know, projecting his reputation and also for actually doing
Speaker 1: his job. And the experience in the international criminal court
Speaker 1: is important. Of course, he's looked into, you know, war crimes,
Speaker 1: he's looked into investigate likely investigated heads of state, and
Speaker 1: so he has some experience with you know, how sensitive
Speaker 1: these kinds of issues are and can be. He helped
Speaker 1: to convict the former governor of Virginia, Bob McDonald. He's
Speaker 1: not a stranger. It's a political corruption, if if I
Speaker 1: can call it that. But you know, it's interesting, Rebecca.
Speaker 1: A lot of people thought she's after the mid terms.
Speaker 1: Merrick Garland comes out with an indictment following the documents case.
Speaker 1: Is this what's happening instead of that he made this
Speaker 1: decision instead of to announce an indictment today to a
Speaker 1: point a special counsel and create the distances that a
Speaker 1: fair well, you know, I don't think that he has
Speaker 1: decided that an indictment is necessarily um the way to go.
Speaker 1: I don't think that. I think if you're you know,
Speaker 1: if you're handing something over to a special counsel, I
Speaker 1: think it's because there are you seriously think an indictment
Speaker 1: might be warranted, and you know, I don't imagine that
Speaker 1: he would have handed this over to Jack Smith thinking
Speaker 1: to himself, yeah, Jack Smith will wind up this case
Speaker 1: and do nothing. So I think it's reasonable to conclude
Speaker 1: that the Attorney General thinks that there are, um, you know,
Speaker 1: some serious criminal conduct and potential charges that are warranted.
Speaker 1: But I doubt that he has reached a conclusion because
Speaker 1: you know, he's relying on Jack Smith for his judgment
Speaker 1: in that regard. I wonder does this slow he mentioned,
Speaker 1: you know, this will help agents continue their work. Will
Speaker 1: it slow things down as this architecture is put in place,
Speaker 1: or does it accelerate the investigations that are already running.
Speaker 1: You know, that's a great question. I don't really think
Speaker 1: it will slow things down much. You know, obviously, the
Speaker 1: as he explained in the press conference, some of the
Speaker 1: investigators who have been working on this case for a
Speaker 1: long time will continue on and they can create continuity.
Speaker 1: So all that really needs to happen is that, uh,
Speaker 1: the new special counsel needs to be briefed on everything
Speaker 1: that's going on. But that really can happen at the
Speaker 1: same time as they're progressing so my guess is if
Speaker 1: it slows things down, it's really not by a significant amount.
Speaker 1: And um, you know it can proceed pretty much on pace.
Speaker 1: I want to bring people back, uh, not very long
Speaker 1: to the former Special Counsel Robert Mueller as he was
Speaker 1: announcing the results the Mueller Report had finally concluded. Listen,
Speaker 1: and as that fourth in the report after that investigation,
Speaker 1: if we had had confidence that the president clearly did
Speaker 1: not commit a crime, we would have said so. We did, not, however,
Speaker 1: make a determination as to whether the president did commit
Speaker 1: a crime that day let down a lot of people
Speaker 1: who were hoping that this would lead to an indictment
Speaker 1: or some sort of criminal charge. He mentioned at that
Speaker 1: time that because it was outside the scope of his
Speaker 1: of his authority, but he would not be the one
Speaker 1: to bring charges. Is that going to happen again? Does
Speaker 1: this have to go back to the d o J,
Speaker 1: back to the Attorney General for that determination. No, this
Speaker 1: is entirely different because now Donald Trump is no longer president.
Speaker 1: So what happened there was that the special counsel Special
Speaker 1: Counsel Mueller had no had no power at least interpreted
Speaker 1: his role as having no power to indict because you cannot,
Speaker 1: at least in his interpretation, indict a sitting president. And
Speaker 1: that's why he didn't come to any conclusion, because he figured, well,
Speaker 1: you know, people want to know the facts, and the
Speaker 1: exactly the proper way of holding him responsible is impeachment,
Speaker 1: and then once he's out of office, a set of
Speaker 1: prosecutors can proceed if they want to proceed. But of
Speaker 1: course things are different right now because even if president,
Speaker 1: even if the former president is a candidate, he has
Speaker 1: announced his candidacy in his campaign, he's not the president,
Speaker 1: and so there is no barrier to indicting him here.
Speaker 1: And so it's well within the job description of the
Speaker 1: special counsel to determine that charges are necessary and to
Speaker 1: bring those charges through a grand jury. So I don't
Speaker 1: think we would end up seeing that again. So the
Speaker 1: talk about the timing of Donald Trump's campaign announcement this week,
Speaker 1: he was saying, you know, he thinks he's bringing himself
Speaker 1: some protections potentially by doing this. Legal protections means nothing
Speaker 1: in this case, right, I mean, it means nothing. You know,
Speaker 1: it certainly has um political meaning, and it certainly makes
Speaker 1: the job of the special counsel harder. But in terms
Speaker 1: of its ultimate effect on whether or you know, on
Speaker 1: the decision whether to charge, it doesn't. It doesn't bear
Speaker 1: on that. We're learning a lot as we as we
Speaker 1: do this all over again. But do you have a
Speaker 1: gut check that that this leads to something meaning full
Speaker 1: and if it does in the throes of a presidential campaign,
Speaker 1: you know, I, I really don't know. It's hard to
Speaker 1: read the tea leaves. I would say that what we
Speaker 1: can conclude is that Attorney General Garland thinks that there's
Speaker 1: at least substantial evidence of criminal conduct here and that
Speaker 1: it's worth an independent person taking a look at that.
Speaker 1: Two separate cases mean two separate results, or is this
Speaker 1: all kind of be folded into one massive investigation. My
Speaker 1: guess is it's it's going to be one investigation, although
Speaker 1: it is two distinct pieces of that investigation. So how
Speaker 1: that proceeds, I'm not entirely sure either. We have a
Speaker 1: lot to learn yet. I hope you're going to come
Speaker 1: back and walk us through it. Rebecca. It's very great
Speaker 1: to have you back, very helpful to hear your insights.
Speaker 1: Rebecca roy Fee, Professor of law at New York Law School,
Speaker 1: has been very helpful to us as we've worked our
Speaker 1: way through a legally challenged existence. Here for Donald Trump,
Speaker 1: the former assistant d A for New York County, and
Speaker 1: up next former assistant US Attorney and former Watergate prosecutor
Speaker 1: Nick Ackerman. He's been there. Does it go that far again?
Speaker 1: We'll find out. Coming up on the fastest hour in
Speaker 1: politics with breaking news on a Friday. This is Bloomberg
Speaker 1: breaking news now as we learned that Elizabeth Holmes is
Speaker 1: sentenced to eleven years for Thearo Nos fraud. The headline
Speaker 1: just crossing the terminal now order to spend more than
Speaker 1: eleven years in prison. Of course, this is a pregnant
Speaker 1: Elizabeth Holmes for fraudulently building her blood testing start up
Speaker 1: Sarous into a nine billion dollar company that collapsed in scandal.
Speaker 1: We've been waiting for this all day. The sentence imposed
Speaker 1: by US District Judge Edward de Villa. This came out
Speaker 1: of San Jose, California, and a lot closer to the
Speaker 1: fifteen year term that prosecutors asked than what Holmes lawyers
Speaker 1: saw that they were looking for either home detention or
Speaker 1: eighteen months in prison at most. We are going to
Speaker 1: go straight now to Bloomberg's June Grosso, the host of
Speaker 1: Bloomberg Law, who is with us in the clutch, June,
Speaker 1: It's great to have you with us. A surprised by
Speaker 1: this number. I am surprised, actually, Joe. I mean, as
Speaker 1: you say, the prosecution asked for fifteen years. Homes made
Speaker 1: the ridiculous request for eighteen months home detention, but the U. S.
Speaker 1: Probation Office asked for nine years. So it's very close
Speaker 1: to what the prosecution asked for and more than the
Speaker 1: probation office asked for. So I think it is. It's
Speaker 1: a tough sentence, and I think you know sentence. It's
Speaker 1: not only punishment, but it's deterrence. And the judge is
Speaker 1: sending a message an example to the world that startup.
Speaker 1: What happens to a pregnant, thirty eight year old woman
Speaker 1: facing a sentence like this? How does law enforcement handle this? Well,
Speaker 1: First of all, I think the judge, I'm sure I
Speaker 1: don't know what's happened at this point, but the judge,
Speaker 1: I'm sure it is going to let her remain on
Speaker 1: sale until she has her child. And knowing the amount
Speaker 1: of litigation that that she has been doing in this case,
Speaker 1: I think that will be years before she actually goes
Speaker 1: to prison, because she's going to appeal the sentence. There
Speaker 1: are other appeals. I mean, she has her team litigated
Speaker 1: every single thing in this trial that's possible to litigate.
Speaker 1: She um, she has and you know, it's curious and
Speaker 1: you can't really a lot of people thought, well, the
Speaker 1: judge might give her a little time off because she
Speaker 1: has a toddler at home and she's pregnant again. Other
Speaker 1: people said it's her choice to get pregnant, and the
Speaker 1: judge can't really take that into consideration. So there's sort
Speaker 1: of a split on that. But I have to tell
Speaker 1: you that in the letters that that we're sending her,
Speaker 1: her her how should I say, her better half, her boyfriend,
Speaker 1: her h sent sent uh, you know, a letter with
Speaker 1: all kinds of colored pictures of her and him and
Speaker 1: the baby and and all this, and um, there was
Speaker 1: to be a little tabloid e. Do you want to
Speaker 1: be a little tabloidy for me? Okay? So, the the
Speaker 1: US Probation Office, which there's also a question of how
Speaker 1: much she's going to pay, the prosecution, asked for eight
Speaker 1: hundred thousand. The Probation Office asked for five in fifty thousand,
Speaker 1: which is supposedly more than she had, but they intimated
Speaker 1: almost said that she's hiding some assets and that there
Speaker 1: are family members i e. Her boyfriend who is the
Speaker 1: heir to a hotel fortune, that are trying they're trying
Speaker 1: to avoid subjecting those assets to the judgment of the court.
Speaker 1: So there was a sort of a little bit of
Speaker 1: a tabloid e element of it here. And then then
Speaker 1: she came back for lawyers came back and said, are
Speaker 1: you saying that she has to marry him? It gets
Speaker 1: very very uh tabloids. Billy Evans goes as partner from
Speaker 1: what I'm here. By the way, No, I'll try to
Speaker 1: remember that myself. Uh. If you're just joining us, we
Speaker 1: do have breaking news on this Elizabeth Holmes sentence. It
Speaker 1: is just out and it's quite more severe than a
Speaker 1: lot of people expected here. Uh when we're talking about
Speaker 1: this going ahead as as you know, a criminal punishment, June,
Speaker 1: I just wonder how much of this is an example
Speaker 1: to Silicon Valley for instance. You know, there was an
Speaker 1: idea here that the judge wanted to make an example
Speaker 1: out of her, even as she said she was devastated
Speaker 1: by her failings. She said she was here to stand
Speaker 1: and take responsibility for paraos. It was her life's work.
Speaker 1: It didn't seem to make a difference. Well, you know,
Speaker 1: the thing that the judge is thinking about is the
Speaker 1: hundreds of millions of dollars that she built investors out of.
Speaker 1: And yes, it is is deterrence to say to you know,
Speaker 1: to give her this tough sentence, and this is is
Speaker 1: really a tough sentence to give her this sentence, and
Speaker 1: to warn other people who are involved in startup to
Speaker 1: you know, to not to embellish, to tell the truth
Speaker 1: as there as they're trying to get investors. I mean,
Speaker 1: she told all these things. I mean she did some
Speaker 1: she did some wild things. I mean she on her
Speaker 1: letter head took letterhead from Walgreens and write aid and
Speaker 1: sake things. I mean, really a lot of things were done.
Speaker 1: And it's easy to look back now and say, oh,
Speaker 1: she's a nice woman who has a child and another coming,
Speaker 1: but you have to remember what she did in building
Speaker 1: up that blood testing startup into this nine billion dollar
Speaker 1: company that collapsed in scandal. And you know, it's it
Speaker 1: was unrealistic to think that she was going to get
Speaker 1: home detention for that, I mean, the judge would not
Speaker 1: be sending the right signal. And I think it will
Speaker 1: be interesting too is to see now remember her former boyfriend,
Speaker 1: um Sonny Belwani has also been convicted. It will be
Speaker 1: interesting to see how much the judge gives to him,
Speaker 1: how it compares to this. Maybe you did give her
Speaker 1: a little bit of a break because she was Maybe
Speaker 1: he wanted to give her fifteen years and he gave
Speaker 1: her less. But you know, I think this was going
Speaker 1: to be caught up in so many appeals and so
Speaker 1: many different kinds. Any kind of motion she can make.
Speaker 1: She has the money to spend on litigators making those motions. Juhen,
Speaker 1: the judge asked, and I'll leave you with this A
Speaker 1: couple of important questions as the sentence was delivered. Was
Speaker 1: there a loss of a moral compass? Here? Was it
Speaker 1: the intoxication of fame? What do you think? I think
Speaker 1: it was probably a little bit of both, but mostly
Speaker 1: a loss of a moral compass. I mean, some of
Speaker 1: the things she did, we're just just something that an
Speaker 1: average person when you're one to one with someone you
Speaker 1: couldn't do. And you if you listen to some of
Speaker 1: the especially in the belt Wanni trial. They brought in
Speaker 1: a lot of the investors and some people who were
Speaker 1: sick and were fooled by this machine. And it really
Speaker 1: was tragic what she did. It was more than just
Speaker 1: a company that failed. I mean, she hurt people and
Speaker 1: I think she lost She just lost her moral compass. June,
Speaker 1: thanks for jumping on. I'm sure you're going to have
Speaker 1: a lot more to say about this. The host of
Speaker 1: Bloomberg Lodging Grasso with us just as the news breaks
Speaker 1: here eleven years Uh, pretty remarkable to consider here in
Speaker 1: the Elizabeth Holmes case. We'll see obviously how this pans out.
Speaker 1: Will have a lot more for you over the course
Speaker 1: of the evening here on Bloomberg Radio. I'm Joe, Matthew
Speaker 1: and Washington are other big story today came only hours
Speaker 1: before that sentencing, and that was the announcement of a
Speaker 1: special counsel by the Department of Justice, Attorney General Merrick Garland.
Speaker 1: Uh coming forth with very little warning today in a
Speaker 1: news briefing. I won't call it a news conference because
Speaker 1: I don't believe there were any questions answered. That has
Speaker 1: kept us moving through this hour. In a great conversation
Speaker 1: with Rebecca roy Fee that we turned now for help
Speaker 1: with Nick Ackerman, the former Watergate prosecutor, former assistant U S.
Speaker 1: Attorney in the Southern District of New York, is with
Speaker 1: us now. It's great to have you with us here. Nick.
Speaker 1: I appreciate the time when you hear the term special council,
Speaker 1: it almost makes you break out in a sweat when
Speaker 1: you're used to these. At this point in Washington, they've
Speaker 1: become a lot more common they were around the time Watergate. Well,
Speaker 1: I mean Archibald Cox was really the first special water
Speaker 1: prosecutor to be appointed in a long time. I mean,
Speaker 1: I don't really think there was much precedent before that
Speaker 1: for appointing a special counsel as special prosecutor. Well, so
Speaker 1: where do you think we're going here? Um, we've got
Speaker 1: two different cases. Will they both be investigated and resolve simultaneously?
Speaker 1: I think they're gonna take their course as to I'm
Speaker 1: not sure it's gonna be simultaneous. But clearly Merrick Garland
Speaker 1: believed that there was an appearance of a conflict of
Speaker 1: interest in the sense that he's beholden to President Biden,
Speaker 1: that's his boss. Um, Donald Trump is running against his
Speaker 1: boss and so I think what he really did was
Speaker 1: put the charging decision in the hands of somebody who
Speaker 1: was completely independent and independent of him, UM and the
Speaker 1: department and so UM. What he's done is essentially provided
Speaker 1: total independence to this person to make that decision, which
Speaker 1: I think was probably the right thing to do. UM.
Speaker 1: But it also shows the seriousness of both of these investigations.
Speaker 1: I mean, if Garland thought that neither of these investigations
Speaker 1: amounted to anything, he wouldn't bother to do this. So
Speaker 1: if I were Donald Trump, this is not a positive fact.
Speaker 1: And I also might add that this is not going
Speaker 1: to slow down these investigations. UM. This is pretty analogous
Speaker 1: to what I experienced when I was with Archibald Cox.
Speaker 1: He was fired, the staff, all the assistant special prosecutors
Speaker 1: hung in there, and Leon Jaworski came in and we
Speaker 1: never lost a beat. I mean, he just came in,
Speaker 1: he was briefed by all of us, he read the
Speaker 1: grand jury testimony, were appropriate, he made the decisions. I
Speaker 1: don't think we lost any time whatsoever, And I think
Speaker 1: that is exactly what's happening here. So that's really important. Actually,
Speaker 1: we were talking about that whether this would slow or
Speaker 1: potentially accelerate the pace of these two cases. And how
Speaker 1: long it takes to build the infrastructure of a Special
Speaker 1: Council's office. Well, I don't think there's gonna be much infrastructure. No, No.
Speaker 1: When Jorsky came in, he didn't bring one single person
Speaker 1: with him. He kept the entire staff and everybody just
Speaker 1: kept doing what they're doing. And I would imagine that's
Speaker 1: pretty much what's going to happen here. They're not going
Speaker 1: to start investigating this from scratch. I mean, I think
Speaker 1: Merrick Garlin made it pretty clear that he's going to
Speaker 1: take over what is there, that the people who are
Speaker 1: running these investigations know what they're doing. They're all independent, um,
Speaker 1: And simply the Special Council here is going to be
Speaker 1: charged with ultimately making the charging decision. That's that's the
Speaker 1: key here. This is very limited. This is not why
Speaker 1: even um, you know the Mueller investigation. I mean, this
Speaker 1: is something where he's stepping in to ultimately make the
Speaker 1: decision ye or nay as to indicting on either or
Speaker 1: both of these cases. Well, with that said, a lot
Speaker 1: of this has been made public, right, We've been hearing
Speaker 1: about the documents case in mar lago. Now for a
Speaker 1: couple of months, with a lot of leaks, we've been
Speaker 1: hearing about obviously January six and excruciating detail through the
Speaker 1: January six Committee, and I realized d o J has
Speaker 1: had its own track on that. But with what you've
Speaker 1: seen and based on your experience with cases like this,
Speaker 1: I can't ask many people that a question like this
Speaker 1: on the planet, is there enough evidence to convict Um?
Speaker 1: It certainly seems like there is. I mean, at least
Speaker 1: on the January six it certainly seems like based on
Speaker 1: what the January six Committee has done, they have presented
Speaker 1: plenty of evidence, firsthand evidence of Trump's knowledge intent, emails
Speaker 1: that have come out that, for example that Judge Carter
Speaker 1: released in California against John Eastman Um. I think there's
Speaker 1: evidence there, and you've got to look at the whole picture, though,
Speaker 1: and that is what we don't have at this point.
Speaker 1: I mean, the Department of Justice has a lot more
Speaker 1: information than we do. People have been put before the
Speaker 1: grand jury. They've got two cases that are extremely significant,
Speaker 1: the Proud Boys and the Oathkeepers. Or you've got three
Speaker 1: cooperating witnesses with the Oathkeepers. You've got to cooperating witnesses
Speaker 1: with the Proud Boys. We don't know what they're telling
Speaker 1: the Department. We don't know what they're saying about, for example,
Speaker 1: Roger Stone, who is on the scene on January if
Speaker 1: with both the Proud Boys and the Oathkeepers and could
Speaker 1: be the connection to Donald Trump. We just don't know, um,
Speaker 1: and I don't think we're gonna find out until unless
Speaker 1: there's an indictment. This is incredible, Nick, I mean you
Speaker 1: appreciate the politics at hand here. This is all going
Speaker 1: to resolve in the middle of a presidential campaign. How
Speaker 1: are we going to get through that? Well, it's just
Speaker 1: gonna happen. I mean, how does the Department of Justice
Speaker 1: get through that to maintain credibility? I mean, this is
Speaker 1: gonna be the most divisive moment potentially in our history. Well,
Speaker 1: but that's that's all the more reason to have somebody
Speaker 1: who's if they're going to pull the trigger, it should
Speaker 1: be somebody who's independent that makes the decision. And it's
Speaker 1: not somebody who is in a sense subservient to the
Speaker 1: President of the the United States who's running against Donald Trump.
Speaker 1: I mean that that's the key here. Wow, So you say,
Speaker 1: good call um, Yes, I think this was the right
Speaker 1: thing to do. UM. It's sort of a hybrid on
Speaker 1: this whole Special Council idea. UM, with the notion it's
Speaker 1: not somebody who's coming in and start an investigation from scratch.
Speaker 1: He's coming in basically to make a decision. He's going
Speaker 1: to be overseeing this and you will ultimately be the
Speaker 1: person to either pull the trigger or not. And UM,
Speaker 1: you know, there's a lot of other stuff going on,
Speaker 1: including this investigation in Georgia that also right, I could
Speaker 1: have an impact on the prosecut's rail decision here with
Speaker 1: respect to the January six material to set up a
Speaker 1: weekly conversation with you. I hope you're all right with that. Listen,
Speaker 1: it's an honor to have you. Nick Ackerman, former Watergate prosecutor.
Speaker 1: Thank you Nick for being here. Former Assistant U S
Speaker 1: Attorney Southern District of New York. Voices of experience. You
Speaker 1: hear on this program that you're not going to hear
Speaker 1: anywhere else. What a week it was for Crypto. This
Speaker 1: is what I thought we'd be leading with today until
Speaker 1: we heard about the announcement from Merrick Garland, now a
Speaker 1: CFTC commissioner is urging whistleblowers in the crypto industry to
Speaker 1: come forward in the aftermath of f t X, the
Speaker 1: implosion of f t X, saying tipsters have previously received
Speaker 1: millions of dollars for their help. Now we haven't touched
Speaker 1: this story because it's been such a crazy week with
Speaker 1: mid terms of the Trump announcement in our fastest hour
Speaker 1: in politics here, but that changes right now because of
Speaker 1: course this leads over into politics right SBF was a
Speaker 1: big donor, but that also involves potential regulatory changes here
Speaker 1: in Washington, not to mention the overall freak out in
Speaker 1: the markets that have come from this, And that's why
Speaker 1: we want to talk to our friend Joe Wise and Fall,
Speaker 1: the co host of Bloomberg's Odd Lots podcast. The Stalwart
Speaker 1: is back with us now, Hey, Joe, thank you for
Speaker 1: having me as this FDx bankruptcy moves forward. And I
Speaker 1: know that's even got its own complexity. As we keep
Speaker 1: reading these wild tweets from Sam Bankman free, do you
Speaker 1: have any sense yet of the amount of damage done
Speaker 1: when you pull back and look at this and think
Speaker 1: of the last year that crypto has had. This is
Speaker 1: being compared to Enron, to Lehman, but a lot of
Speaker 1: us are having trouble quantifying the damage. Maybe that's because
Speaker 1: we're right in the middle of it. I mean, I
Speaker 1: think it's hard to say. You know, one way to
Speaker 1: simply think about it is just the numerous billions that
Speaker 1: have been lost in the price of various coins. But
Speaker 1: I think it is an existential moment for the crypto
Speaker 1: industry specifically. It's like, look like when Enron collapsed, I
Speaker 1: don't think anyone was like, oh, well, this is the
Speaker 1: end of energy, right, and when Lehman collapsed, maybe, but
Speaker 1: I don't think there are many people like, oh, this
Speaker 1: is like the end of like banking. I mean there
Speaker 1: was maybe there was some view that like the nature
Speaker 1: of Wall Street was like fundamentally going to change, and
Speaker 1: maybe it even kind of did. But I think in
Speaker 1: this case, it's like, wait, is there like is this
Speaker 1: the end of crypto itself? And I think that part
Speaker 1: of like the whole crypto story has been this idea.
Speaker 1: It's like, you know, it's an endless front run in
Speaker 1: a way, It's like everybody wants to get in before
Speaker 1: everyone else. It's like people wanted to get in before
Speaker 1: the institutions and so forth, and the institutions are gonna
Speaker 1: look at this and says, we have someone we thought
Speaker 1: we knew and could trust. It was the professional and
Speaker 1: had a great finance pedigree at James Street. And if
Speaker 1: we can't trust him, who is there? And so I
Speaker 1: think this is like an existential moment in a way
Speaker 1: that maybe some of those others even were. Well, so
Speaker 1: are you surprised there has not been more carnage in
Speaker 1: you know, in the big ones in bitcoin for instance,
Speaker 1: it hasn't fallen out of bed i am And actually
Speaker 1: a lot of these coins are still above where they
Speaker 1: were like in June. And this is a thing that
Speaker 1: many people in the industry are talking about. It's like,
Speaker 1: what are they following more? It's kind of weird and
Speaker 1: everyone's like, you know, with the pace of the news
Speaker 1: flow over the last two weeks, everyone is trying to
Speaker 1: scratch their head and sort of figure out, like why
Speaker 1: aren't coins following more? And my understanding there is no
Speaker 1: one has any good answers. It kind of feels like
Speaker 1: there's very little liquidity on these markets right now and
Speaker 1: there's not many people buying, but there's also not many
Speaker 1: people selling. Tell me more about s BF. I know
Speaker 1: when it. When it comes down to just three letters,
Speaker 1: you've got to be important. You have them several times
Speaker 1: on the podcast. On one in particular, I went back
Speaker 1: to listen again to the April two episode when You
Speaker 1: Sat Down, in which he said this, there is a
Speaker 1: huge tidal wave of money trying to come into the space,
Speaker 1: is what I would say, just you know, gobbling jobs
Speaker 1: of it, that that sort of has been desperately you know,
Speaker 1: sort of like trying to to to like find its
Speaker 1: way in desperate gobs and gobs. Has this collapse change
Speaker 1: the way you listen to that statement now? I mean no,
Speaker 1: because in a way it sort of fits with like, like,
Speaker 1: here's the thing that I keep going back to think about.
Speaker 1: It's like everybody sort of thought, oh, he's SPF as
Speaker 1: a genius, and he went to M I. T. And
Speaker 1: he was a quantitative trader at Jane Street, and maybe
Speaker 1: the facts are true, but what he describes in that
Speaker 1: clip is not that sophisticated. You have the gobs and
Speaker 1: gobs of money, and so you want to get in
Speaker 1: front of it, right. You want to be there before
Speaker 1: the gobs and gobs of money so that the gobs
Speaker 1: and gobs of money buy up the coins that you
Speaker 1: bought yesterday. Excuse me? So, like, does that sound like
Speaker 1: a trading strategy that like uh genius mathem. Find No,
Speaker 1: it sounds like a pretty crude trading strategy. And it's
Speaker 1: even necessarily wrong. It's just in a particularly like subtle
Speaker 1: or sophisticated. And so what also sounds misguided when everyone
Speaker 1: is losing billions of dollars? Now, well that's true, because yeah,
Speaker 1: I mean it's certainly not. There aren't gobs and gobs
Speaker 1: of money today, so us not clear that there even
Speaker 1: gob gobs on money by April. I mean, the market
Speaker 1: had peaked in November and we had a pretty even
Speaker 1: By April, we had a pretty sharp sell off. But
Speaker 1: you know what's interesting, is okay, So we published that
Speaker 1: at the end of April. Two days later, after that
Speaker 1: episode came out, they held Crypto Bahamas, which was a
Speaker 1: conference that FTX put out in the Bahamas near their offices,
Speaker 1: and he was on stage with Bill Clinton and Tony Blair.
Speaker 1: Where he was they were wearing suits, He was wearing
Speaker 1: T shirts, shorts and sandals, and it was sort of
Speaker 1: the scond of moments like here's this guy and just
Speaker 1: a week ago on a podcast. He didn't describe his
Speaker 1: company as a Ponzi scheme. He didn't even describe crypto
Speaker 1: as a Ponzi scheme per se, but he did describe
Speaker 1: a pretty big element of it in terms that could
Speaker 1: be like fairly likened to a Ponzis game. And then
Speaker 1: a week later he's talking to two former heads of
Speaker 1: state in the case to player former prime minister, and
Speaker 1: you know, it's like this kind of a moment, but
Speaker 1: I do think like it has been one blow after another.
Speaker 1: Not long after that conversation, we had to blow up
Speaker 1: of Luna. Three are its capital Celsius voyager Um block
Speaker 1: Fine Voyager on life support. So it didn't take long
Speaker 1: before those gobs and gobs of money did not materially.
Speaker 1: He talked about the concept of yield farming I learned
Speaker 1: about I never heard that before this happens. Maybe that
Speaker 1: says something about me, But you know, subscribe to odd Lots,
Speaker 1: you'll learn a lot um. He described it as a
Speaker 1: sort of magic box. Here here's how he said it.
Speaker 1: It's a box and you can take it token, take
Speaker 1: a theory, and you can put it in the box
Speaker 1: and take it out of the box like you put
Speaker 1: it in the box, and you get like, you know,
Speaker 1: an IOU for for having put it in the box,
Speaker 1: and then you can redeemed that I owe you back
Speaker 1: out for the token. So so far, what we've described
Speaker 1: is the world's dumbest e t F or a d
Speaker 1: R or something like that. It's a it doesn't do
Speaker 1: anything but let you put things in it if he
Speaker 1: so chose. And then this protocol issues a token we'll
Speaker 1: call it whatever ex token and X token promises that
Speaker 1: anything cool that happens because of this box is gonna
Speaker 1: ultimately be usable by you know, governance vote of holders
Speaker 1: X token. Are we getting closer to where things went
Speaker 1: wrong here? Well? So I would say three things about that,
Speaker 1: maybe four. There's a lot there that he said. So
Speaker 1: I'll say the first thing. My thought is that at
Speaker 1: a minimum, that's very cynical. And my interpretation of SBF
Speaker 1: as like I sort of like what he was doing
Speaker 1: was that he did not I never got the impression
Speaker 1: that he was like a big crypto believer. And if
Speaker 1: you listen to like, you know, you people who are
Speaker 1: into crypto are like really into it, right. They think
Speaker 1: it's gonna change the relige, Yeah, religion or it's going
Speaker 1: to like change how corporations and governments operate. I never
Speaker 1: got that impression from SBF. I always got the impression
Speaker 1: that he saw a chance to make lots and lots
Speaker 1: of money. And so when I listened to that, I
Speaker 1: was like, Okay, here he's like describing a pretty cynical
Speaker 1: characterization of like what crypto is right now, like a
Speaker 1: magic money box. But doesn't matter because being in the
Speaker 1: service of that, providing a market exchange for these boxes
Speaker 1: is like a very profitable business, but a cynical one
Speaker 1: because it didn't sound like someone who wants to really
Speaker 1: make the case for like the underlying activity that's been happening.
Speaker 1: It's also interesting that not once this sort of like
Speaker 1: poor quality of the books. So, you know, with the
Speaker 1: bankruptcy and we're learning, well, what did FTX and ELM
Speaker 1: me to have as their assets? A lot of it
Speaker 1: was exactly what was described there, which is these tokens
Speaker 1: that they themselves controlled, are they more or less basically
Speaker 1: and through the magic of the box, were able to
Speaker 1: inflate the veil you beyond like any sort of like
Speaker 1: reasonable pricing in the market. And so they're like, oh,
Speaker 1: we have billions of UH dollars worth of assets on
Speaker 1: our books. Okay, that's good, but the only way we
Speaker 1: get there is via these tokens that we issue that
Speaker 1: we are priced nominally at billions in market camp but
Speaker 1: realistically could never be sold into the market at anywhere
Speaker 1: near these levels. So I think that like there's quite
Speaker 1: a bit in there in that answer that helps sort
Speaker 1: of us understand where we are today. Absolutely, And then
Speaker 1: of course the follow on is the reaction from Washington
Speaker 1: what kind of regulation? I assume this accelerates the conversation,
Speaker 1: but do they know what they're doing at the SEC
Speaker 1: or the CFTC and preventing something like this from happening again, Yeah,
Speaker 1: it's a really good question. I mean, I think that
Speaker 1: I think there's two schools of thought here. So there's
Speaker 1: one is, uh, Okay, we need to write we need
Speaker 1: to come up with new regulation, which I guess it's
Speaker 1: not that controversial. It's always how it is right, people
Speaker 1: lose a lot of money and uh, then the then
Speaker 1: the regulators come in. The flip side is that this
Speaker 1: happened on an offshore exchange outside of the jurisdiction of
Speaker 1: u S regulators, and the entities that were sort of
Speaker 1: like we you know, crypto entities that are in the US,
Speaker 1: you know, haven't had the same fate, and be like
Speaker 1: it's a little unclear. I guess you could say, why
Speaker 1: crypto deserves new regulations. We already have regulations. Right, You're
Speaker 1: not allowed to steal people's money, violate terms of service.
Speaker 1: If you are a broker, there's certain obligations you have, Like,
Speaker 1: there are a lot of laws that capture all of this.
Speaker 1: So I think there is another view out there that
Speaker 1: rather than rushing to write new regulations specifically for crypto,
Speaker 1: a lot we enforced the laws that we already have.
Speaker 1: And you know, there's a widespread view that a lot
Speaker 1: of these tokens are in fact securities. Um, so we
Speaker 1: have a securities regulator, it's called the SEC, and there's
Speaker 1: already things that SEC can do if it deems certain
Speaker 1: assets to be securities in terms of disclosure requirements and
Speaker 1: so forth. And so one view is that, well, let's
Speaker 1: just have the uh, let's just divide these up. Maybe
Speaker 1: some of these tokens our commodities and should be traded more,
Speaker 1: should be regulated more by the CFTC. Maybe some our
Speaker 1: securities trade by the SEC. Maybe the brokerages like coin
Speaker 1: base should be like regulated like a you know, a
Speaker 1: traditional broker like a Schwab or something like that. And
Speaker 1: so I do think there's a view of like, well,
Speaker 1: let's just start getting more aggressive about putting these things
Speaker 1: in the categories that we already have loss for Did
Speaker 1: you miss an opportunity to do your remote broadcast from
Speaker 1: the Bahamas? It's funny, you know, uh yeah, kind of
Speaker 1: we were invited not I bet you were. Yeah, They're like,
Speaker 1: why don't you do a lot? We didn't make it work,
Speaker 1: you know, we uh you know, weren't gonna like fly
Speaker 1: all the way to the Bahamas. And just wonder if
Speaker 1: that's a warning sign when when it's coming from the Bahamas,
Speaker 1: you know, why do you do an episode on stage
Speaker 1: or it didn't happen. Um, there's a reason. There's a
Speaker 1: lot of this that's offshore. And I do feel for
Speaker 1: a lot of you know, people have lost a lot
Speaker 1: of money and had like their life savings completely ruined people.
Speaker 1: But on the other hand, like you know, you're dealing
Speaker 1: with a offshore entity outside the scope of like most
Speaker 1: established regulators who are in the business of like sort
Speaker 1: of like facilitating de facto casino of sorts. So the
Speaker 1: there's some sort of uh your uh, you know, buyer
Speaker 1: beware here spending time on a Friday with Joe Wise
Speaker 1: and fall on the fastest hour in politics. Big questions,
Speaker 1: by the way, about what happens with the lawmakers who
Speaker 1: received millions of dollars from s b F campaign donations.
Speaker 1: In the case of Dick Durbin, the Senator from Illinois,
Speaker 1: he'll contribute the money to charity, apparently from SPF, but
Speaker 1: next will be the hearings. Recipients of those contributions say
Speaker 1: they are prepared to grill s BF about why his
Speaker 1: crypto exchange suddenly crashed. He donated tens of millions of dollars,
Speaker 1: the politicians second largest donor to the party this election
Speaker 1: for Democrats, So standby. That'll be a show coming up.
Speaker 1: We'll get to fed speak and the doom scroll this week. Boy,
Speaker 1: it was one after the other, leading minute to wonder,
Speaker 1: do you have to damage the job market? You have
Speaker 1: to force unemployment to rise to stop inflation? And if
Speaker 1: the answer is yes, what's the point of the dual mandate?
Speaker 1: That's where we pick up with Joe. This is Bloomberg,
Speaker 1: So no with Joe Matthew on Bloomberg Radio and they
Speaker 1: asked Flever Lang and Rocky three for his prediction to
Speaker 1: what's your prediction for the fight with prediction, Yes, prediction
Speaker 1: m sort of like j. Powell. While higher interest rates,
Speaker 1: slower growth, and software labor market conditions will bring down inflation,
Speaker 1: they will also bring some pain to households and businesses. Yeah,
Speaker 1: these are the unfortunate costs of reducing inflation, and it's
Speaker 1: starting to look like the pain is going to be
Speaker 1: more real. Some of the comments we heard this week,
Speaker 1: uh from Fed officials, you know, the Bullard comments about
Speaker 1: going to a seven handle freaked out the market. I
Speaker 1: was more taken by Kansas City Fed President Esther George
Speaker 1: looking at a labor market that is so tight. This
Speaker 1: is a quote. I don't know how you continue to
Speaker 1: bring this level of inflation down without having some real
Speaker 1: slowing and maybe we even have contraction in the economy
Speaker 1: to get there. I've I've asked about this before. The
Speaker 1: fact of the matter is you might have a dual mandate,
Speaker 1: But isn't that a false promise? You have to break
Speaker 1: the job market to beat inflation? You know, that is
Speaker 1: the that is the that is the widespread view of
Speaker 1: many economists that history is pretty strict on this that
Speaker 1: when you have extremely elevated inflation, you know that there's
Speaker 1: no painless way to do it. That you don't get
Speaker 1: this immaculate disinflation so to speak, that you need to
Speaker 1: have layoffs and there need to be a meaningful number. Now,
Speaker 1: the hope would be, I would say, the hope is,
Speaker 1: this is a weird time. We just had a once
Speaker 1: in a century pandemic, and we have had major disruptions
Speaker 1: in the past. We tend to it's a historical phenomenon.
Speaker 1: We do have higher higher inflation after wartime typically is
Speaker 1: common because again you sort of similar story or major
Speaker 1: disruption to supply side capacity. You have all this investment
Speaker 1: that went into munitions and factories for the war, and
Speaker 1: then they're not there. You know, then the soldiers come
Speaker 1: back and then there isn't the productive capacity to supply them.
Speaker 1: There are examples, and so the hope would be, and
Speaker 1: so the question to some extent is, well, why do
Speaker 1: we have this inflation. Do we have it because there
Speaker 1: was this huge disruption to society, in which case maybe
Speaker 1: a lot of inflation comes down to a normalization or
Speaker 1: do we have the inflation because the Fed kept rates
Speaker 1: too load too long and the government spend too much
Speaker 1: money in checks and so now we have to have
Speaker 1: the pain. I think we're still kind of in that debate,
Speaker 1: And honestly, funny, it depends what party you're intends to
Speaker 1: determine your answer to that question, right. I do think
Speaker 1: there's a big political element. But on the other hand,
Speaker 1: I will say, you know, look, there's a lot of
Speaker 1: like sort of like mainstream democratic economists Larry Summers, Jason
Speaker 1: Fermant among them, who are in that camp that the
Speaker 1: Biden administration did too much. Sure that j Powell was
Speaker 1: too easy for too long. But I will I but
Speaker 1: these questions are always like really political. Absolutely, if you
Speaker 1: talk to a Democrat on Capitol Hill, and unfortunately we
Speaker 1: do this every day here sometimes uh it's you know what,
Speaker 1: I'll tell you, this is a global problem, this is
Speaker 1: a supply chain problem. Look at other countries. Why we're
Speaker 1: not alone in this? And Republicans say, you know, Joe
Speaker 1: Biden poured gasoline on the fire with the American Rescue Act,
Speaker 1: And you tend to think the truth might be somewhere
Speaker 1: in between. Yeah, and there a lot of you know,
Speaker 1: I think economists don't know that. I've seen all these
Speaker 1: studies like six transitor embedded or who knows how about
Speaker 1: what we saw on the campaign trail. Sometimes you can
Speaker 1: learn from the argument when when politicians are campaigning, and
Speaker 1: certainly when voters actually go to the polls. Uh, if
Speaker 1: people blamed if Americans blamed Democrats for this, wouldn't it
Speaker 1: have gone worse? Well, I will say this, and again,
Speaker 1: you know, what do I know about politics? I don't
Speaker 1: know anything, but I will say this. You know, the
Speaker 1: inflation is pretty bad, right, It's at the highest level
Speaker 1: in like four decades, and the Republican Party chose to
Speaker 1: run many candidates whose core position was like cha lunching
Speaker 1: the results of election. It's like, yeah, that was like
Speaker 1: a number of Republicans like made that a big thing.
Speaker 1: It's like maybe real introspectation because there is a big problem, right,
Speaker 1: Inflation is a real issue. And in a way, you know,
Speaker 1: I think a lot I think the Republicans sort of
Speaker 1: assumed that that they wouldn't have to like really try
Speaker 1: to like fight that point, because so obvious everyone's gonna
Speaker 1: punish the Democrats for inflation. So they ended up with
Speaker 1: like a lot of candidates that didn't really talk about
Speaker 1: that they like talked about like Trump and changing how
Speaker 1: people vote and stuff. If the messaging had been better,
Speaker 1: you're saying it could have been a different result. It
Speaker 1: could have been. I mean, it's just weird. Did the
Speaker 1: like for as bad as inflation is? Did can anyone
Speaker 1: point to say or Republican proposal or story about how
Speaker 1: to address it? And I don't. I don't think I
Speaker 1: heard any You know, I heard a lot about investigating
Speaker 1: the White House. I heard a lot about Hunter Biden's laptop,
Speaker 1: or you heard a lot of blame on inflation, but
Speaker 1: maybe not. But now you don't hear a lot of solutions.
Speaker 1: So I do wonder if like maybe Republicans were a
Speaker 1: little bit um in retrospect, naive about the sales job
Speaker 1: that they had to do and they should have done more.
Speaker 1: Are these FEDE officials George Bullard doing the job by
Speaker 1: speaking and freaking everyone out right now? Or is this
Speaker 1: the real indicator of how bad it's going to hurt
Speaker 1: next year? No? I mean, look, monetary policy is works
Speaker 1: through financial markets, and paulic has talked about this a
Speaker 1: lot that it's not really the rate per se that matters.
Speaker 1: It's you know, if if you raise rates and the
Speaker 1: stock market weekend and credit conditions tightened and so forth,
Speaker 1: and that constricts demand. And so if you just talk
Speaker 1: about it, you're conducting monetary policy. Every one of these
Speaker 1: speeches is a conduct of monetary policy. And so trying
Speaker 1: to like, we're in this interesting moment where it looks
Speaker 1: like the feed is going to downshift from a series
Speaker 1: of seventy basis point hikes to fifty basis point hikes.
Speaker 1: And Waller had a speech this week, I think where
Speaker 1: he liked it to take you off an airplane where
Speaker 1: it's like you go really hard in the beginning, and
Speaker 1: then you get to like a cruising altitude and then
Speaker 1: you like you ease up a little bit. It doesn't
Speaker 1: mean you're like easing by the getting off the ground
Speaker 1: is like the really hard part that takes a lot
Speaker 1: of like fuel and stuff like that. Then you can
Speaker 1: glide a little bit. So, you know, we're in this
Speaker 1: sort of interesting moment, and there are signs that inflation
Speaker 1: is maybe cooling. You know that last CPI report was encouraging.
Speaker 1: We've had oil prices, commodity prices coming down, some signs
Speaker 1: that food prices maybe easing. But what the FED does
Speaker 1: not want to see is the FED does not want
Speaker 1: the market and investors to look at signs of easing,
Speaker 1: look at signs of downshift, and say party time. We're
Speaker 1: gonna go buy stocks, right, because that's the worry. I
Speaker 1: was like, well, what do we accomplish a here if
Speaker 1: everyone just gonna go buy stocks again and bit up
Speaker 1: financial markets and and speculate again that we're just gonna
Speaker 1: be right in the same boat that we were a
Speaker 1: year ago or six months ago. So the feed is
Speaker 1: in this position now where it's like, Okay, how can
Speaker 1: we acknowledge that there's some shift in the general trajectory
Speaker 1: without letting things get out of hand and for everyone
Speaker 1: I say party time. And so I kind of think
Speaker 1: that's what you're getting from some of these speakers, which
Speaker 1: is like, yes, we're gonna hike a little less fast
Speaker 1: than we have been, but don't use this as an excuse.
Speaker 1: No more spending, you know, fifty on the bitcoin. Okay,
Speaker 1: Like that's sort of like the message. So is Mr
Speaker 1: T right? Yeah? I mean you know what, I hope not. Like,
Speaker 1: here's the thing. It's like you have two camps. So
Speaker 1: you have the camp to say, Okay, we need labor
Speaker 1: market pain um in order to bring down inflation, and
Speaker 1: then you have another camp to say, these fed rate
Speaker 1: hikes are going to crush the labor market and make
Speaker 1: things worse. Right, the Dovish viewed, it's like, and I
Speaker 1: kind of hope that there is this middle ground where
Speaker 1: everyone turns out to be wrong. That the hawks are wrong,
Speaker 1: that we need higher unemployment in order to uh defeat inflation.
Speaker 1: That would be nice. And I hope the doves are wrong,
Speaker 1: that the higher rates and the aggressive pace of hiking
Speaker 1: that we've seen in the series of seventy bases point
Speaker 1: hikes crush the labor market. And so the dream scenario
Speaker 1: is one in which inflation does come down, but also
Speaker 1: the rate hikes never really did much to the labor side.
Speaker 1: Way too early to say that. But I don't think
Speaker 1: there's a I don't think that. I think it's a
Speaker 1: non zero a chance that that's the outcome here, non
Speaker 1: zero chance. I don't think it's zero. From your lips
Speaker 1: to God's ears, I hope. So let's get a beer
Speaker 1: next time I'm in New York anytime, any time I
Speaker 1: love talking to you. I always enjoy it. The great
Speaker 1: Joe Wisenthal. His podcast is called Odd Lots. Ours is
Speaker 1: called sound On. You should give it a try, you know, subscribe,
Speaker 1: share it with your friends. I can just keep thinking
Speaker 1: of him down there in the Bahamas, you know, hanging
Speaker 1: with SPF. It never happened, but I could use a
Speaker 1: little time of the Bahamas, don't you think. I mean?
Speaker 1: What a week? Not just the volatility on Wall Street
Speaker 1: we hear about from Charlie Pellett, the scary fed speak,
Speaker 1: whether we finally got through the mid terms, Republicans take
Speaker 1: the House. Nancy Pelosi retires as speaker. Donald Trump announces
Speaker 1: his next presidential campaign. I could keep going just this week.
Speaker 1: Carry Lake loses the Arizona governor's race to Katie Hobbs.
Speaker 1: Lawyers up for a fight. Adam Fresh concedes to Lauren Boeberg.
Speaker 1: Did you hear that? By the way, Yeah, I'll take
Speaker 1: up Margarita, and I'll meet you back here on Monday.
Speaker 1: Holiday week Ahead, we'll have Rick and Jeannie on the
Speaker 1: fastest hour in politics. Thanks for spending time with us.
Speaker 1: This is Bloomberg