Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Bloomberg
Speaker 1: This Weekend Podcast with David Gura, Christina Raffini, and Lisa Matteo.
Speaker 2: Thanks for joining us for today's selection of conversations from
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Speaker 3: every Saturday and Sunday morning, starting at seven am Eastern.
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Speaker 5: The two chambers of Congress at an impasse over how
Speaker 5: to fund the Department of Homeland Security. That's after a
Speaker 5: series two late night votes, no clear solution. Both the
Speaker 5: House and the Senate are now on easter recess.
Speaker 2: President Trump signed a memo to PAYTSA workers who have
Speaker 2: worked without pay for weeks now, of course, leading to
Speaker 2: those sprawling lines that you've seen at US air Force Airports.
Speaker 2: Joining us now from Washington, we have Bloomberg News Congression
Speaker 2: reporter Eric Wilson. Eric, I appreciate you getting up. I
Speaker 2: saw you sending notes very late last night. We did
Speaker 2: offer to send you coffee but you told us shockingly
Speaker 2: and very impressively that you've never used door dash or
Speaker 2: uber eats.
Speaker 6: I wanted to focus on that before.
Speaker 2: We get to Congress because it's so lovely one night.
Speaker 7: As you can see behind me, I print books, you know,
Speaker 7: so we make our own breakfast.
Speaker 8: All right.
Speaker 7: I do appreciate the offera guys.
Speaker 9: All right, we're very grateful.
Speaker 2: Nonetheless, can you walk us through where everything is at?
Speaker 2: You know, the Senate passed a version of this with
Speaker 2: an ice carve out. It went to the House and
Speaker 2: then it went nowhere. The House has done something that's
Speaker 2: doa in the Senate. Just please update us on what's
Speaker 2: going on into the use chambers.
Speaker 7: It's an extraordinary breach between House and Senate Republicans, you know.
Speaker 7: John Thune crafted this bill middle of the night, basically
Speaker 7: funding the full Department of Homeland Security for the rest
Speaker 7: of the physical year till October, except for border patrol
Speaker 7: and ice immigration enforcement activities. That passed unanimously on a
Speaker 7: voice vote. As soon as to the House, it was
Speaker 7: promptly rejected by the House Freedom Caucus and Speaker of
Speaker 7: Mike Johnson, who's always, you know, trying to shore up
Speaker 7: support with different parts of his conference went along with
Speaker 7: that Freedom Caucus demand to reject the Senate bill. Instead,
Speaker 7: they passed an eight week continuing resolution for the whole department,
Speaker 7: but that again funds ICE without any new reforms that
Speaker 7: Democrats have demanded, and Chuck Schumer said that's da, So
Speaker 7: the standoff continues. Importantly, Trump has signed this memo paying
Speaker 7: TSA agents as soon as Monday, so that should alleviate
Speaker 7: the lines. But it's important to point out there are
Speaker 7: other members of the Department, whether your secret Service worker,
Speaker 7: you know, human trafficking, people in the Secretary's office, you know,
Speaker 7: people who are doing communications. You know, there are a
Speaker 7: lot of people who are not going to get paid,
Speaker 7: continue to not get paid. It's it's going to become
Speaker 7: a difficult thing. This is over forty days now, you know,
Speaker 7: and they're going to be held hostage. I don't see
Speaker 7: the Senate and House coming back during this two week recess.
Speaker 7: I don't really see a solution anytime soon. The main
Speaker 7: thing they're going to try to do is budget reconciliation
Speaker 7: bill and a massive package of the Trump tax bill,
Speaker 7: where they did put some immigration enforcement money, but they
Speaker 7: need all Republicans to unite. Everyone wants to throw their
Speaker 7: things in. I talked to a member of the New
Speaker 7: York delegation who wants the salt deduction of all things
Speaker 7: extended again. So this is going to become a massive
Speaker 7: food fight and these workers are going to be held hostage.
Speaker 7: Now that President could try an extraordinary measure to try
Speaker 7: to potentially illegally pay those other DHS workers from this
Speaker 7: fund for border security. But you know, I don't see
Speaker 7: a solution anytime soon that's really permanent.
Speaker 5: You bring up the President, and I want to play
Speaker 5: a little bit of sound here of the President in
Speaker 5: Miami last night speaking of that FII conference, addressing what's
Speaker 5: transpired here and also his relationship with the leadership in
Speaker 5: the Congress.
Speaker 10: To take a listen.
Speaker 8: I understand John Tune, and I understand Mike Johnson. They
Speaker 8: want to be sure that people aren't coming into our
Speaker 8: country like they have for the last four years.
Speaker 11: I don't want to say they've ruined it. They made
Speaker 11: my job a lot harder.
Speaker 5: They made my job a lot harder. The President, they're
Speaker 5: on the tarmac traveling to that conference. I'm Eric Watson.
Speaker 5: Talk a bit about the presence engagement not with this
Speaker 5: memo finding a way to pay these TSA workers, but
Speaker 5: with this issue more broadly, and what that says about
Speaker 5: even more broadly than that, the way that he's been
Speaker 5: interacting with this Congress and with congressional leadership.
Speaker 7: It was an extraordinary comment because it almost like Trump
Speaker 7: was playing peacemaker between feuding House and Senate Republican leaders,
Speaker 7: which I'm sure a role that he would enjoy. He
Speaker 7: is still questing after that Nobel Peace Prize AfterAll, you know,
Speaker 7: but he's trying to, I think, in that case, smooth
Speaker 7: over differences. It's extraordinary that that, you know, Speaker doesn't
Speaker 7: called what Fune did a joke ridiculousness. We asked him
Speaker 7: about it, he tried to sort of sidestep in and
Speaker 7: say that that was Chuck Schumer who really engineered this.
Speaker 7: But we're trying to see what kind of long term
Speaker 7: consequences of this rift will be. Can they do this
Speaker 7: new tax and spending bill? Are they able to unite
Speaker 7: in a midterm message? Certainly the tension between the two
Speaker 7: chambers is extraordinary, you know. But the immigration issue was
Speaker 7: historically one of Trump's strong suits. I think the American
Speaker 7: public generally want stronger borders. But then what happened in
Speaker 7: Minnesota with the ICE enforcement, the sort of chaos and
Speaker 7: the practices sort of weakened his popularity on that gave
Speaker 7: Democrats and opening to demand these changes.
Speaker 12: That was very interesting.
Speaker 7: Last night there was a small press conference barely attended
Speaker 7: by media of Brian Fitzpatrick and Tom Swasey, two members
Speaker 7: of the Problem Solvers Caucus, and they have a very
Speaker 7: intriguing idea to sort of pass some of these reforms.
Speaker 7: You know, a Congress that's more open to conference would
Speaker 7: probably embrace something like that, but such a long shot.
Speaker 7: They're even talking about a discharge petition, a really long
Speaker 7: shot petition to try to get this done. But Congress
Speaker 7: is nowhere near grappling with this. But I think if
Speaker 7: the public were to be consulted, they would want to
Speaker 7: see some kind of changes to ICE behavior, maybe not
Speaker 7: having masked agents, you know, being able to go willy
Speaker 7: nearly into people's homes.
Speaker 5: Eric Watson, thank you very much again, appreciate you joining
Speaker 5: us here on the Saturday morning earlier.
Speaker 2: We want to bring in Jill Degenevitch. She's a TSA
Speaker 2: worker in Las Vegas and the Nevada union representative Jill.
Speaker 2: First of all, I just want to check.
Speaker 11: In on you.
Speaker 2: How are you doing. I know you've got kids. I
Speaker 2: know I can't imagine how tough this has been. Missing
Speaker 2: a paycheck. Just bring us up to date about how
Speaker 2: you're doing and what your frustrations are.
Speaker 13: Well, yeah, definitely, very very frustrated. We are incredibly thankful
Speaker 13: that Trump did put out the executive order that we
Speaker 13: supposedly start to be paid on Monday. We're supposed to
Speaker 13: get our back pay, only nothing continuing on. So it's
Speaker 13: while we are thankful and we're grateful that we will
Speaker 13: supposedly be getting that, it's really just a temporary band
Speaker 13: aid because we're not going to be paid from here
Speaker 13: on out. It's just our back pay, so essentially we're
Speaker 13: just resetting the clock.
Speaker 5: What has the conversation been like among you and your
Speaker 5: colleagues as all of this is unfolded. We've seen the
Speaker 5: numbers of those who have left, decided to quit, or
Speaker 5: haven't gone to work because they have been getting paychecks.
Speaker 5: What have you been talking about with your colleagues about
Speaker 5: how this has gone and what it says just about
Speaker 5: the the state of the government, the state of the agency.
Speaker 13: It's frustrating because this is the third ten that this
Speaker 13: has happened in five months, and because it keeps happening,
Speaker 13: We're just wondering what that means for the future of
Speaker 13: our agency. You know, privatization has been thrown out there
Speaker 13: a lot, it's been being talked about a lot more,
Speaker 13: and the fact that they're so easily able to shut
Speaker 13: us down, we are frankly just worried about our jobs
Speaker 13: in the future.
Speaker 2: Is there any concern about this impacting the safety of
Speaker 2: the flying public. I know that the workers who are
Speaker 2: on the job are doing their absolute best, but you know,
Speaker 2: about forty percent of workers have called and stick across
Speaker 2: the country. According to the AP, there's about five hundred
Speaker 2: TSA workers who reportedly have quit due to lack of
Speaker 2: payment and frustration. At some point, is this going to
Speaker 2: start impacting safety or are we there already?
Speaker 8: No?
Speaker 10: I don't think.
Speaker 13: Safety is going to be affected because we still do
Speaker 13: have our very dedicated officers that are on the job
Speaker 13: serving the public. However, those lines will continue to go
Speaker 13: up the more that we lose officers and the more
Speaker 13: that people called out, so it'll just take a lot
Speaker 13: longer and people will end up missing their flights more
Speaker 13: because of it.
Speaker 5: Jill, what's it been like having ICE agents deployed in
Speaker 5: the airports? I think when that was first and Nounce,
Speaker 5: something that we were talking about on the show is
Speaker 5: what would that look like? Would they be doing some
Speaker 5: of the work that you and your colleagues do. Are
Speaker 5: they working alongside you or with you? Just on a
Speaker 5: very granular level. What has it been like having them
Speaker 5: in the airports.
Speaker 13: Well, we haven't actually had them deployed in Las Vegas
Speaker 13: because our lines haven't been that long. However, because they
Speaker 13: aren't trained to do our jobs, I don't know how
Speaker 13: much help they would actually be. Essentially, they would be
Speaker 13: delegated to roles serving out into queue, moving traffic, pushing
Speaker 13: it around, helping passengers divest items from their bags. Essentially,
Speaker 13: I don't know how helpful that would be to us,
Speaker 13: because again, they aren't trained to do our jobs like
Speaker 13: we are, so they aren't properly able to help passengers
Speaker 13: divest items from their bags, thus leading to more bag
Speaker 13: checks on our end while we are actually screening those
Speaker 13: that luggage.
Speaker 2: And that's kind of what we're seeing for audio listeners
Speaker 2: is ICE agents they are on the airport, but even
Speaker 2: in the video we're watching right now, they're mostly ushering
Speaker 2: traffic through those I don't know what they're called, those
Speaker 2: like dizzy world style rope lines that we all have
Speaker 2: to go through so much of our lives. I someone
Speaker 2: to ask you, I don't tell us how long you've
Speaker 2: been with TSA, And look, it's a tough job. People
Speaker 2: at airports are cranky. I always try to be nice.
Speaker 10: Not everyone tries.
Speaker 2: Sure I can be nice, just not to you. I
Speaker 2: love my TSA agents that am nice to you.
Speaker 10: But it's a tough job.
Speaker 2: It takes skill, and it takes patience, and it has
Speaker 2: to be stressful. And I would imagine adding this kind
Speaker 2: of stress and uncertainty to a job that people probably
Speaker 2: went to looking for security and sustainability in their lives
Speaker 2: has to undercut the desire to do this job and
Speaker 2: for recruitment. Do you have any concerns long term about
Speaker 2: people wanting to be or stay TSA agents?
Speaker 13: Definitely. I have been with TSA for almost three years now,
Speaker 13: and so this is my first real experience going through this.
Speaker 13: It is just like we are living in a twilight
Speaker 13: zone right now. It is crazy to me that this
Speaker 13: is happening. I did not expect that this would happen
Speaker 13: when I initially signed on to federal service three years ago.
Speaker 13: I believe that this would be a nice, safe, secure
Speaker 13: career job for me. I thought it was a great
Speaker 13: opportunity with recruitment. I believe that people will be coming
Speaker 13: in and they will be cognizant of the fact that, yes,
Speaker 13: this is an agency that can be shut down very easily,
Speaker 13: and so I don't know that we would get the
Speaker 13: highest quality of people that we normally would have because
Speaker 13: of that.
Speaker 12: Jill, I want to ask you where all this is headed.
Speaker 5: You brought up the specter of privatization a moment ago,
Speaker 5: and I've noticed, I'm sure you have editorials and newspapers
Speaker 5: articles being written about how at some airports that do
Speaker 5: have private security, there haven't been these lines. There's an
Speaker 5: effort here to make it seem like that might be
Speaker 5: the solution going forward. I'm very curious sort of how
Speaker 5: worried that makes you, and you, being a representative of
Speaker 5: your union, sort of what you're doing to make the
Speaker 5: case that that should not be the route that this
Speaker 5: country goes.
Speaker 13: Down with privatization. That is going to be a for
Speaker 13: profit model. I don't believe that aviation security should ever
Speaker 13: be a pro for profit model. The beauty of it
Speaker 13: being a federal program is that you're not there to
Speaker 13: make money. You're there to screen passengers and share the
Speaker 13: highest levels of security. That is my biggest fear with
Speaker 13: going private, that these private screening companies would come in
Speaker 13: and they would cut costs wherever they can, whether that
Speaker 13: be with training, whether that be with background checks, whether
Speaker 13: that would be with hiring and implementing new equipment and programs.
Speaker 13: So that is my biggest concern with that is that
Speaker 13: they would be here to make money rather than to
Speaker 13: actually do the job that we're here to put forth,
Speaker 13: which is to screen passengers and luggage and keep America safe.
Speaker 2: All right, Jesse Janovitch, thank you so much for joining us,
Speaker 2: and I promise I will be very nice if I
Speaker 2: see you in Vegas.
Speaker 6: We really appreciate it.
Speaker 5: Well, it's funny the lines haven't been that long at
Speaker 5: some Emerorks they have at others in New York, and
Speaker 5: there's like four four and a half hours, and just
Speaker 5: getting a grip on that throughout all of this, and
Speaker 5: it's unpredictable too.
Speaker 2: I think people are also getting to the airport's earlier,
Speaker 2: which you know they have usual peak times, they may
Speaker 2: not be used to because people are panicking. So is
Speaker 2: I my friend just want the JFCN. It was ninety
Speaker 2: minutes minutes, great but not terrible. It's workable.
Speaker 3: Stay with us for more on Bloomberg this weekend. Right
Speaker 3: after this.
Speaker 2: All right, a little while ago, we spoke to Senators
Speaker 2: Todd Young, a Republican from Indiana, and Alyssa Slotkin, a
Speaker 2: Democrat from Michigan. That was just hours before the Senate
Speaker 2: passed a DHS funding package, which, as we just mentioned,
Speaker 2: the House rejected a new funding package, of course, is
Speaker 2: now stalled on the hip.
Speaker 5: We're focused so much on funding for the Department of
Speaker 5: Homeland Security and know that there's a standoff there between
Speaker 5: these two parties. Let me start with you first, sent
Speaker 5: or Young, Where are we in this process? How much
Speaker 5: closer are we to any kind of resolution to this
Speaker 5: partial shutdown that stretched on longer than a month?
Speaker 14: Well, I know I speak in a broadly bipartisan way.
Speaker 14: I know Centator Slotkin agrees with me. Where we are
Speaker 14: is exhausted with this issue. We want to come to
Speaker 14: terms in a bipartisan way. We want to fund TSA
Speaker 14: on our homeland to be more secure and listen, there
Speaker 14: have been some principal disagreements about ICE and how they
Speaker 14: are to operate, and other important public policy issues that
Speaker 14: have been in play, But I think we're all getting
Speaker 14: much closer to a meeting of minds on these issues.
Speaker 11: That's my sense.
Speaker 14: Our leaders are now talking somewhat sometimes through intermediaries, and
Speaker 14: I think there's a sense of urgency that I feel
Speaker 14: here in the halls of Congress to finally get this
Speaker 14: result for the American people, your.
Speaker 15: Sense, as well as sentator slackin Yeah, I mean, I think, look,
Speaker 15: we're about to We're supposed to be going on two
Speaker 15: weeks of you know, home leave, and I don't think
Speaker 15: anyone feels that we should be leaving, at least I
Speaker 15: don't until we figure this out.
Speaker 11: Right.
Speaker 16: We also are the ones who travel through the airports
Speaker 16: twice a week and have to face the TSA officers
Speaker 16: who are keeping us safe while also not being paid.
Speaker 16: So I think it's coming to a head as it should.
Speaker 16: And I think, look, you know, personally, I think we're
Speaker 16: having a big cultural conversation on the roll of ICE
Speaker 16: and law enforcement in our streets. But the missions of
Speaker 16: all the other parts of homeland security. As a former
Speaker 16: CIA officer, I worked alongside those offices my entire career.
Speaker 16: I would fund them today, So I think there's actually
Speaker 16: a lot of overlap. We just need people to kind
Speaker 16: of buckle down, sit down, shut out the news media,
Speaker 16: no offense, and just get it done so we can
Speaker 16: go on with our lives. And then I think there's
Speaker 16: a bigger question about like we're the only country I
Speaker 16: know in the world that just constantly lives in these
Speaker 16: government shutdowns and allows people who are protecting us to
Speaker 16: be kind of at the mercy of these political conversations.
Speaker 16: I would be personally in full support of just not
Speaker 16: having this happen three times in a calendar year for
Speaker 16: these folks. So I think there's bigger reforms that we need,
Speaker 16: but at this point, just get or done. We all
Speaker 16: know what we need to do, and just sit in
Speaker 16: a room until you get it done.
Speaker 2: It does seem like dejevu all over again is happening
Speaker 2: again and again and again much sooner than it used to.
Speaker 2: At the risk of causing a rift in this lovely
Speaker 2: bi partisan tableau we have going on, I do want
Speaker 2: to ask both of you some questions about what's going
Speaker 2: on in Iran. Sana Sloka, and I'm starting with you
Speaker 2: four weeks and do you feel like the administration has
Speaker 2: a clear strategy in Iran?
Speaker 16: Well, look, I mean I serve three tours in Iraq
Speaker 16: alongside the military as a CIA officer, and you know,
Speaker 16: I know it is harder to get in to get
Speaker 16: out of a war that it is to get into
Speaker 16: a war. On the Armed Services Committee, so they've been
Speaker 16: briefing us. You know, I think it was hard to
Speaker 16: understand what the clear objectives are. So it's hard to
Speaker 16: understand exactly how we're doing. I have no love lost
Speaker 16: for the Iranian government. I watch them and the Iranian
Speaker 16: back militias kill friends of mine in Iraq. But until
Speaker 16: and unless we can have ships move through the state
Speaker 16: of Hormuz, until and unless you know, the average person
Speaker 16: in Michigan is actually not paying for this war through
Speaker 16: the pump, I think it's hard to say it's resolved.
Speaker 9: And I you know, I.
Speaker 16: Hope that we're figuring out quickly at the White House
Speaker 16: exactly how we're going to bring this to resolution. But
Speaker 16: right now, I think it's too soon to tell whether
Speaker 16: we're we can call ourselves winning, and certainly until the
Speaker 16: straits are open, we're not.
Speaker 2: Senator Young, same question to you, and do you have
Speaker 2: any idea what those two marine expeditionary units and the
Speaker 2: eighty second Airborne are planning to do once they arrive
Speaker 2: in the least Is that clear to you?
Speaker 11: No, I don't have great clarity on that.
Speaker 14: That's an operational matter, and I do believe that Congress
Speaker 14: has an important oversight role to play on such questions.
Speaker 14: I think that's the prerogative the Armed Services Committee and
Speaker 14: the Foreign Relations Committee, and I've indicated very publicly in
Speaker 14: the past that I think we needed to hold more
Speaker 14: hearings where possible, more public hearings before we get into
Speaker 14: major engagements. But that said, I know that President is
Speaker 14: determined to degrade any nuclear weapons development capabilities of the
Speaker 14: Islamic Republic of Iran. I know that he's determined to
Speaker 14: make sure that the Iranian proxies of this largest state
Speaker 14: sponsor of TAOR in the.
Speaker 11: World are degraded as well.
Speaker 14: We're making some good progress on that, and then the
Speaker 14: missile capabilities of this terroristic regime are also being degraded.
Speaker 14: So on all those fronts. We've made some positive progress.
Speaker 14: I think so many of us, the American people, back
Speaker 14: my Hoosier constituents and all across the country, want us
Speaker 14: to bring this to as quick of a close as possible.
Speaker 11: If we can.
Speaker 14: If we can indicate that across those three measures that
Speaker 14: I laid out, we've made some real progress and come
Speaker 14: up with a negotiated diplomatic solution to open up the
Speaker 14: Strait of Hormuz on an ongoing basis, then I think
Speaker 14: the President can rightly declare a victory, and the American
Speaker 14: people can resume their economic activity and ways of life,
Speaker 14: and our men and women in uniform who are performing
Speaker 14: so nobly and heroically can be safe and secure and
Speaker 14: proud of their mission.
Speaker 5: For each of you, just about that two hundred billion
Speaker 5: dollar supplemental that's being floated by it by the Pentagon.
Speaker 5: Is it something you support? What would it take for
Speaker 5: you to support it? I'll start with you, Senator Slockin.
Speaker 11: Yeah.
Speaker 16: I mean, look, we've seen it floated. We haven't seen
Speaker 16: anything in black and white. And something I always commit
Speaker 16: to my constituents in Michigan is I read everything. I'm
Speaker 16: going to look at everything objectively, but I will say,
Speaker 16: you know, at the height of the wars in Iraq,
Speaker 16: in Afghanistan, when we had hundreds of thousands of troop deployed,
Speaker 16: things worn't going well in places like a rock. The
Speaker 16: biggest supplemental we ever approved through this body was one
Speaker 16: hundred million, and the ass here is two hundred million.
Speaker 16: So I'm going to open up the hood and look
Speaker 16: at anything that comes that is that size. And I'm
Speaker 16: skeptical that after getting an extra one hundred and fifty
Speaker 16: billion this past summer, on top of a nearly one
Speaker 16: trillion dollar Pentagon budget that they got just last year,
Speaker 16: I'm skeptical that I'm going to be like, you know,
Speaker 16: just rubber stamping anything like that. So, you know, and
Speaker 16: I think the American people are concerned about spending that
Speaker 16: kind of money. I will always read everything that's my obligation,
Speaker 16: and we haven't seen anything formally.
Speaker 12: Senator Young, how.
Speaker 11: About you, Well, we need to be skeptical.
Speaker 14: That's our jobs to scrutinize individual line items of spending
Speaker 14: requests rather than just giving the green light, especially when
Speaker 14: a check to the tune of two hundred billion dollars
Speaker 14: is requested. But I will say the armaments that we
Speaker 14: have been expending to carry out these operations have been
Speaker 14: incredibly expensive, and as we adapt to this new age
Speaker 14: of warfare and have to invest in other types of
Speaker 14: armaments while replenishing these older school armaments, that can become
Speaker 14: very expensive as we sort of make that transition. So
Speaker 14: I enter this exercise of looking through the requested supplemental
Speaker 14: package objectively, and I want to support carrying out that
Speaker 14: deterrence mission so we don't have to fight in any
Speaker 14: more wars, which is the most expensive thing for the
Speaker 14: American people. I want to make sure we have everything
Speaker 14: possible needed to avoid any future conflict.
Speaker 2: Senators, thank you so much. I understand you have a
Speaker 2: vote and you have to run, but I really appreciate
Speaker 2: you both taking the time and good luck with the legislation.
Speaker 11: Thanks so much, thank you.
Speaker 9: I mean that was nice to have.
Speaker 2: I can't remember the last time two senators.
Speaker 12: In cool blood partisan unity.
Speaker 6: Yeah exactly, you're on the show.
Speaker 5: Appreciate that, Senators Young and Slocke and joining us there
Speaker 5: to talk about the state of play. Yes, with that
Speaker 5: DHS funding, but with the request forthcoming request here for
Speaker 5: two unredrellion dollars in supplemental funding for the war in Iran.
Speaker 2: Stay with us for more on Bloomberg this weekend. Right
Speaker 2: after this. The war in Iran, as we've been talking
Speaker 2: about all morning and really all week, is rattling the markets.
Speaker 2: The S and P five hundred has fallen more than
Speaker 2: seven percent in the last five weeks, and the Nasdaq
Speaker 2: is in correction territory. But news that SpaceX is targeting
Speaker 2: a potential blockbuster of an IPO seventy five billion dollars,
Speaker 2: potentially the largest one ever, could inject a little bit
Speaker 2: of enthusiasm into the market.
Speaker 5: Jota is said to break all of this down. Is
Speaker 5: Bayle Lipschialt, senior reporter here at Bloomberg News. Bailey, great
Speaker 5: to have you with us. We want to talk about
Speaker 5: this IPO. We're waiting for SpaceX to file this perspectives,
Speaker 5: which could happen any day now. Before we get there, though,
Speaker 5: I want to get your perspective on what we saw
Speaker 5: over the course of the last week. This has been
Speaker 5: a market that has been I don't want to say
Speaker 5: complace it as this war is unfolded, but it does
Speaker 5: seem like there were doubts sown among investors here at
Speaker 5: the end of the week and it was a nasty Friday,
Speaker 5: to say the least.
Speaker 17: No, it was a nasty Friday. And David, you know
Speaker 17: this as well as anyone. If you are an investor,
Speaker 17: one thing you hate is uncertainty and the other thing
Speaker 17: is being long stocks or risk assets over a weekend
Speaker 17: where pretty much it's anyone's guest what the next thirty
Speaker 17: six hours will look like. And so when you really
Speaker 17: look at the price action that we saw on Friday
Speaker 17: in particular, it did seem like people either were adding
Speaker 17: up on bearish hedges or really dumping anything that was
Speaker 17: particularly risky, just given we don't know what the weekend
Speaker 17: will bring and when it really when you lay that
Speaker 17: across the entire month that was March, we've had a
Speaker 17: lot of volatility. To your point, you talk to bullish investors, well,
Speaker 17: hey we're only down five six seven percent depending on
Speaker 17: the index that you look at. That's not that bad
Speaker 17: all things considered. In every potential headline that a resolution
Speaker 17: is on the horizon typically brings at least a knee
Speaker 17: jerk reaction. But when I talk to folks on Wall Street,
Speaker 17: there still is this resounding hope that the problems will
Speaker 17: be addressed and the war will be ended sooner than
Speaker 17: later and then business can get back to usual. There
Speaker 17: aren't many people thinking about what happens if this drags
Speaker 17: on for another four or five weeks.
Speaker 2: So with all that in the backdrop, why do this now?
Speaker 2: Why does SpaceX want to do this now? And is
Speaker 2: this a FATA complete? Are they definitely doing it soon
Speaker 2: or might they wait? Given all this volatility.
Speaker 17: So the thing with IPOs or they can be long
Speaker 17: drawn out processes. With SpaceX, every detail is closely watched.
Speaker 17: So what we're waiting for is a confidential filing which
Speaker 17: would formally kick off the potential IPO path. The big
Speaker 17: thing to keep in mind is that SpaceX has kind
Speaker 17: of been vocal, at least through various media reports that
Speaker 17: they want to go public in June, and if you
Speaker 17: think back to two and a half months ago, the
Speaker 17: market backdrop was quite different. So when you look at
Speaker 17: the timeframe for SpaceX to go public, we could be
Speaker 17: in a very different market by the time it actually
Speaker 17: gets kind of on the launch pad and potentially goes
Speaker 17: public versus where we are now where submitting this document
Speaker 17: to the SEC just makes it easier to market the
Speaker 17: deal more formally to investors as opposed to setting any
Speaker 17: time of a shot clock, if you will.
Speaker 2: When I have logistics questions for you, guys have covered
Speaker 2: IPOs before, which I have not on this level. Do
Speaker 2: you have to like constantly is it like a DOJ filing?
Speaker 2: Do you have to constantly refresh the page waiting for
Speaker 2: that to pop up? Or do you know that they've
Speaker 2: posted it and like you know you can go get it.
Speaker 17: So with the Jobs Act, they opened up confidential filing,
Speaker 17: so technically they could submit and know one knows. So
Speaker 17: this could be something that they announced via press release.
Speaker 17: This could be something that US and competitors find from
Speaker 17: our sourcing and report out. Or we were joking with
Speaker 17: a few bankers in theory, we are understanding this is
Speaker 17: not the case. In theory, they could have submitted this
Speaker 17: a month ago and we're able to keep it tight
Speaker 17: lift and no one actually knows.
Speaker 10: Like this is the one aspect of that filing.
Speaker 17: And the big thing is you file the submission, you
Speaker 17: submit the filing confidentially, then you wait a month to
Speaker 17: go back and forth with the SEC from there. And
Speaker 17: that's kind of why this March timeframe was so critical
Speaker 17: for Elon to potentially meet his goal of going public
Speaker 17: by his birthday, which is the end of June.
Speaker 5: I got to give you props for using the IPO
Speaker 5: on the launchpad hun there.
Speaker 12: Which I'm sure was delivered Bailey.
Speaker 5: I want to ask you about what this company is
Speaker 5: kind of picking up off of that. I think there
Speaker 5: are a lot of people who think of SpaceX as
Speaker 5: a company that makes and shoots off rockets into space.
Speaker 5: It has grown to such more than that over the
Speaker 5: last many years. This is a company that now owns Xai,
Speaker 5: which is Elon Musk's AI company, which is hemorrhaging money.
Speaker 5: I still like build up and build new data centers.
Speaker 5: Starlink of course has been bringing money in.
Speaker 12: It owns that too.
Speaker 5: And then what was formerly known as Twitter x is
Speaker 5: now part of XAI, so part of this whole.
Speaker 12: Conglomerate as well.
Speaker 5: How does that complicate the way that investors are looking
Speaker 5: at this company as an investment the fact that it
Speaker 5: really is this very multifaceted conglomerate.
Speaker 17: To your point, when you think back to February, before
Speaker 17: the merger of parent company XAI, which owns x and SpaceX,
Speaker 17: SpaceX was arguably one of the cleanest stories in the
Speaker 17: private market, it was essentially a space monopoly that owns
Speaker 17: launch getting rockets and satellites into space, and to your point,
Speaker 17: owning Starlink, which is the dominant player in potentially getting
Speaker 17: or actually actively getting direct to consumer, direct to cell
Speaker 17: phone and other devices internet connection.
Speaker 10: Now with this merger, when I talk.
Speaker 17: To investors, the pitch still is heavily predicated on the
Speaker 17: kind of old school SpaceX company, with Xai being a
Speaker 17: part of that. The one thing to keep in mind
Speaker 17: is if you talked to many people, and if you
Speaker 17: pulled I would say the smartest people on Wall Street
Speaker 17: and asked, well, what is Tesla?
Speaker 10: Is it a car company? Is it a robot company?
Speaker 17: Is it something that's going to be partnering with SpaceX
Speaker 17: for tarafab. It's just the entire Elon ecosystem that Elon
Speaker 17: premium that these companies are very complex and there are
Speaker 17: a lot of areas to look at that can justify
Speaker 17: higher valuations.
Speaker 5: I'm glad you bring up Tesla, and I think about
Speaker 5: the history of that company and how Elon Musk really
Speaker 5: valued the true believers among those investors who stood with him,
Speaker 5: even as Tesla wasn't able to make as many cars
Speaker 5: as it said it would as deadlines got pushed and
Speaker 5: Elon Musk has a real affection for the retail investor.
Speaker 5: I'm curious how SpaceX is going to benefit or serve
Speaker 5: those investors going forward. Do we have any sense of
Speaker 5: sort of how they will be able to take advantage
Speaker 5: of this IPO when in fact it happens.
Speaker 17: So we've put out reporting that they could allocate about
Speaker 17: thirty to thirty five percent of the IPO for retail investors.
Speaker 17: One thing to keep in mind, if the company does
Speaker 17: raise its targeted seventy five billion dollars, it's about twenty
Speaker 17: two and a half billion dollars for retail, which would
Speaker 17: be the third largest IPO in the history of IPOs.
Speaker 17: So that's an insane amount of money to just comprehend
Speaker 17: that could be allocated to retail. And to your point,
Speaker 17: the boardroom and these bankers are discussing the best way
Speaker 17: to allocate shares to the true believers, people who have
Speaker 17: held Tesla for a long time. Maybe people who own
Speaker 17: Tesla cars will be able to get better access at
Speaker 17: the IPO. At the end of the day, when we
Speaker 17: talk to bankers, finding seventy five billion dollars of demand.
Speaker 17: There's enough capital out there, but being able to execute
Speaker 17: the IPO in a way that delivers for both the
Speaker 17: company and investors is going to be closely watched.
Speaker 2: Bailey, We've got about thirty seconds left. But how much
Speaker 2: of this is trying to get ahead of Anthropic and
Speaker 2: what does this mean for open Ai? Open Ai, excuse me,
Speaker 2: and Anthropic.
Speaker 17: Yeah, it's a bit of a race, and SpaceX clearly
Speaker 17: is set the best timeline or the quickest timeline to
Speaker 17: circle that June target. We reported that Anthropic could go
Speaker 17: as soon as October, and open Ai, from our understanding,
Speaker 17: is kind of neck and neck potentially with trying to
Speaker 17: line up those prospects to go public. So when we
Speaker 17: think about twenty twenty six as a whole, we could
Speaker 17: see all three of these companies, or if the volatility continues,
Speaker 17: we could see one or two drag on into twenty
Speaker 17: twenty seven.
Speaker 2: All right, Bailey, Lifchell's Bloomberg News senior reporter, thank you
Speaker 2: for breaking that all down. And you'll have to what's
Speaker 2: app me when that ip filing happens.
Speaker 10: Yeah, I'm very curious.
Speaker 6: I was talking to our college Ed Ludlow about this.
Speaker 5: Who covers space, the business of space, and this is
Speaker 5: such an interesting moment for that as well. This is
Speaker 5: a really hot part technology generally, so this will be
Speaker 5: a real litmus and sort of investor enthusiasm for space related.
Speaker 9: Companies and for the man in charge of the company.
Speaker 12: There you go for Elon Musk as well.
Speaker 5: We'll see how much of the company ends up owning
Speaker 5: as a result of this IPO.
Speaker 4: Stay with us for more on Bloomberg this weekend.
Speaker 6: Right after this, well, it's time for.
Speaker 5: My favorite part of the show, that is Pointed the
Speaker 5: news quiz for takers right here on Bliberg this weekend.
Speaker 2: We've narrowed down the larger quiz that you can play
Speaker 2: online to three categories, and Lisa is going to test
Speaker 2: our knowledge and I'm sorry who is currently leading.
Speaker 12: It is still anyone's game.
Speaker 2: I'm very nervous about this though. I did overhear them
Speaker 2: saying how hard the quiz was this week.
Speaker 9: So it's gonna be your week. This is going to
Speaker 9: be a good one, guys. Okay, So for.
Speaker 4: Those of you at home who are like, what are
Speaker 4: you talking about?
Speaker 9: Pointed?
Speaker 4: Okay, So here's exactly how it works. In front of
Speaker 4: David and Christina. They each have thirty chips. Okay, so
Speaker 4: they've split it up and they have three categories, and
Speaker 4: they're going to place their bets depending on how they feel,
Speaker 4: how confident they feel about each category.
Speaker 9: Audience audience the sound effect she does. Okay, so we've
Speaker 9: got everyone covered.
Speaker 12: You're not intimidating.
Speaker 9: Are you ready for the category?
Speaker 12: Yes?
Speaker 9: Yes, please ready, David. Okay.
Speaker 4: The first category is ammunition ammunition, the second category is trade,
Speaker 4: and the third category.
Speaker 12: Is hoarding boarding hoarding.
Speaker 9: So it's quite a category.
Speaker 4: So place your bets depending on how confident you feel.
Speaker 4: Where are you going as first ammunition?
Speaker 5: Are you gonna I'm going to go none on ammunition? Okay,
Speaker 5: I'm going to go double on twenty on trade, and
Speaker 5: then according I'm I have no expertise, but I'm interested.
Speaker 2: I'm going to slid across the board because I don't
Speaker 2: feel overly confident in this category. So I'm doing ten,
Speaker 2: ten and ten.
Speaker 9: Excellent. All right, you're ready for your first question. It
Speaker 9: is a very evil I'm excited.
Speaker 4: Do you think this is this is the I only
Speaker 4: got one of them, so all right, okay, here we go.
Speaker 4: Ammunition arms manufacturer ZVS was once a Cold War casualty,
Speaker 4: but is being revitalized in which European nation. Which European
Speaker 4: nation is its starting to get back into it and
Speaker 4: see a surge. It's actually the world's biggest car producer
Speaker 4: per capital I just.
Speaker 12: Got that wrong then that it was very good?
Speaker 9: Okay, all right, change that.
Speaker 4: Yeah, I gave you a little hell all right, now
Speaker 4: I have no idea of it.
Speaker 12: Okay, you ready? Three Germany No.
Speaker 9: Is correct. That's what threw me.
Speaker 2: I had because I read something about the arms manufacturer,
Speaker 2: but I had cars.
Speaker 4: Cars, the world's biggest car producer per capita.
Speaker 9: Slovaki. Yes see, I confuse you there, David, But.
Speaker 2: What is the Slovakian cars?
Speaker 9: I mean it's not a Yugo.
Speaker 2: They don't make those anymore.
Speaker 4: But actually they have been ramping up their ammunition output
Speaker 4: some thirty thousand before NATO started ramping with the Ukraine
Speaker 4: Russia war full screen full invasion in twenty twenty two.
Speaker 2: So you bet yeah, it's one of those places they're
Speaker 2: getting those big shells.
Speaker 9: Correct, Yeah, you bet ten. So you keep your tent, David,
Speaker 9: you bet nothing. You know, all right, I'm going to
Speaker 9: get to trade trade. So that got me nothing. All right,
Speaker 9: here we go play along at home.
Speaker 4: Due to national security concern the FCC is banning imports
Speaker 4: of foreign based, foreign produced models of which product?
Speaker 9: Do you know this one? Because my brothers and nerds
Speaker 9: also talking a lot about Yeah, so.
Speaker 5: You though I didn't read up on this, I just
Speaker 5: know from Christina's talking about it sometimes.
Speaker 4: Sometimes he listens to Christine only occasionally.
Speaker 9: Let's go, okay, flipp it.
Speaker 2: What do you go?
Speaker 12: Right?
Speaker 9: Routers, routers, wireless routers. Correct.
Speaker 6: Do you both get it?
Speaker 9: You both get it. Cyber attacks.
Speaker 4: There's been a lot to talk about them for cyber attacks.
Speaker 9: Yes, all right, so you each have.
Speaker 12: Okay, so before we move on, I mean you've talked
Speaker 12: about it a lot.
Speaker 2: No, No, I mean my brother's concern is there are
Speaker 2: really no domestically manufactured wireless routers at the moment of
Speaker 2: that next generation. They're all made overseas, so it is
Speaker 2: going to be a problem, like if we can't upgrade them,
Speaker 2: we can't get.
Speaker 10: Them from anywhere.
Speaker 9: But that's the issue.
Speaker 4: Well, there is one company, Netgear they might investors might
Speaker 4: you know think because they moved them much of their
Speaker 4: are supply chain outside of China, so that might be one.
Speaker 4: Here we go, the more you know and shooting star
Speaker 4: moving on to hoarding. Okay, which household staple hoarded during
Speaker 4: the nineteen seventy three oil shock? Did Japan just worn
Speaker 4: shoppers not to.
Speaker 9: Buy in bulk? Is it hard staple? I wonder?
Speaker 12: I don't know.
Speaker 9: It's a good thought.
Speaker 4: This music is very it's like soothing.
Speaker 9: That's very soothing. What are you you're writing? You're writing
Speaker 9: too much? Okay, Okay, I wrote flipp What did you write.
Speaker 12: Toilet paper aka bathroom tissue?
Speaker 8: Toilet?
Speaker 12: I think a tie?
Speaker 9: Oh you know what that means?
Speaker 10: If we're question?
Speaker 9: Yes, I was so close. Okay, you know we have
Speaker 9: to take it to the bonus.
Speaker 4: Okay, the bonus is gaming gaming. Okay, it's not look okay, no, no, no, no,
Speaker 4: I think you got this, Christine other games. Fortnight's parent
Speaker 4: company cutting one thousand jobs due to spending concerns. What
Speaker 4: is the name of the company? So, what is the
Speaker 4: name of Fortnite's parent company?
Speaker 9: Do know this?
Speaker 12: It's gonna be a real time What if wait?
Speaker 9: What if you both get right? Then we have a
Speaker 9: tie again? Then do we have another breaker?
Speaker 13: We'll just leave.
Speaker 9: We'll just leave the day. All right, okay, flip it.
Speaker 9: What do you got?
Speaker 6: Epic epic epic games?
Speaker 4: The CEO said, they're spending a lot of money more
Speaker 4: than we're making.
Speaker 12: That's the base.
Speaker 9: We end in a tie. All right, that wasn't as
Speaker 9: bad as I thought. You guys said, well, thank you
Speaker 9: so much.
Speaker 2: Can be friends, Lisa, thank you to our production team
Speaker 2: as well.
Speaker 12: And you can always can find the rest of the game.
Speaker 9: Yes, yes, yes, you two can do it.
Speaker 4: Bloomberg dot Com slash pointed, play at home, at home.
Speaker 9: Hey, they give you some some options you have.
Speaker 2: That's a multiple choice at home, and you don't have
Speaker 2: to you don't have to write them on a whiteboard.
Speaker 9: Always play at home and you'll have just as much
Speaker 9: fun as you.
Speaker 5: Don't get my commentary, but maybe that's for the best.
Speaker 2: Thanks for joining us on today's Bloomberg This Weekend podcast.
Speaker 2: Don't forget to tune in live for the show every
Speaker 2: Saturday and Sunday mornings, starting at seven am Eastern.
Speaker 3: We're on Bloomberg Television Radio and the Bloomberg Business App,
Speaker 3: bringing you unique takes and in depth interviews on news, politics, lifestyle,
Speaker 3: and culture.