WEBVTT - US House Speaker Kevin  McCarthy Ousted

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<v Speaker 1>Good morning. I'm Brian Curtiz and I'm Doug Prisner. Here

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<v Speaker 1>are the stories we're following today. Kevin McCarthy no longer

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<v Speaker 1>Speaker of the House of Representatives. Let's get to ed

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<v Speaker 1>Baxter Eddie.

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<v Speaker 2>Yeah, quite a day, Doug history. The vote turned out

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<v Speaker 2>to be relatively close.

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<v Speaker 3>The Ya's are two sixteen, the nays are two ten.

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<v Speaker 3>The resolution is adopted without objection. The motion to reconsider

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<v Speaker 3>is laid on the table. The office of Speaker of

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<v Speaker 3>the House of the United States House of Representatives is

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<v Speaker 3>hereby declared vacant.

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<v Speaker 2>Now, there was a thought that Democrats might rescue McCarthy.

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<v Speaker 2>Democratic Congressman Adam Schiff says the Democrats didn't vote to

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<v Speaker 2>save him because he's just plainly not trustworthy. We don't

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<v Speaker 2>feel that it's in the best interest of the country

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<v Speaker 2>to have the House of Represents continue to alert from

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<v Speaker 2>crisis to crisis. Now right wing republic and Matt Gates

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<v Speaker 2>has been the lightninggrod behind this movement and says nobody

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<v Speaker 2>trusts McCarthy, and.

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<v Speaker 3>McCarthy has made multiple contradictory promises, and when they all

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<v Speaker 3>came to he lost votes of people who maybe don't

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<v Speaker 3>even ideologically agree with me on everything.

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<v Speaker 2>Now, McCarthy before the vote said he doesn't regret any

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<v Speaker 2>decisions he's made.

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<v Speaker 1>The end of the day, keeping government open and paying

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<v Speaker 1>our troops was the right decision.

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<v Speaker 4>I stand by that decision.

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<v Speaker 2>So next well, electing a new speaker. Now, the last

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<v Speaker 2>one resembled mud wrestling, and Bloomberg's Wendy Benjaminson says, backroom

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<v Speaker 2>deals or what ultimately brought McCarthy down.

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<v Speaker 4>That's right. And the one backroom deal he made that

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<v Speaker 4>presumably the next person who's up for speaker will not

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<v Speaker 4>make is the concession to allow any one member to

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<v Speaker 4>post this motion to vacate. And that's what Matt Gates

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<v Speaker 4>demanded in return for to vote to make McCarthy the speaker.

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<v Speaker 4>And now that has come up home to rust and

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<v Speaker 4>Matt Gates has vacated him a speaker. So that was

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<v Speaker 4>a deal that you know didn't turn out so well

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<v Speaker 4>for McCarthy.

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<v Speaker 2>So now, if you want to put another wrinkle on

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<v Speaker 2>all of this, Bloomberg's Rick Davis says, McCarthy still has

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<v Speaker 2>cards to play.

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<v Speaker 5>It's really up to Kevin McCarthy right now, do you

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<v Speaker 5>want to be nominated to try another run for speaker

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<v Speaker 5>where you think you can get more than two hundred

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<v Speaker 5>and ten votes next time, or do you open it

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<v Speaker 5>up to somebody else to be nominated and see how

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<v Speaker 5>their luck fares. This is really the biggest question on

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<v Speaker 5>the floor of the House of Representatives right now.

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<v Speaker 2>Yeah, so your witnessing history. Next steps are to try

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<v Speaker 2>and elect a new House Speaker that will suck up

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<v Speaker 2>most of the energy out of the chamber until the

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<v Speaker 2>process is completed. Global News powered by more than twenty

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<v Speaker 2>seven hundred journalists and and lists over one hundred and

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<v Speaker 2>twenty countries, and we'll continue to have more details on

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<v Speaker 2>this breaking story in San Francisco. I'm Ed Baxter. This

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<v Speaker 2>is Bloomberg Brian.

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<v Speaker 6>It absolutely will have a lot more on this coming

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<v Speaker 6>up shortly with Henrietta Treys, managing partner and director of

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<v Speaker 6>Economic Policy at Vada Partners and get her insights. But

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<v Speaker 6>first we'll take a look at some of the other

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<v Speaker 6>top stories. Treasury yields hitting new multi year highs after

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<v Speaker 6>the government reported an unexpected increase in US job openings

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<v Speaker 6>during August. We get more here from Bloomberg's Michael McKee.

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<v Speaker 7>We've gone up in terms of job openings by six

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<v Speaker 7>hundred and ninety thousand, two over nine million. Again, that

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<v Speaker 7>is a significant increase. For the Jolts report job openings

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<v Speaker 7>and labor turnover hirings. The number of people getting hired

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<v Speaker 7>changed little, is still at about five point nine million,

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<v Speaker 7>so a very stable situation there. And then the quit

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<v Speaker 7>rate everybody's been focused on. The quit rate doesn't change

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<v Speaker 7>at all. Quits three point six million, pretty much the

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<v Speaker 7>same as the prior month, and that leaves the quit

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<v Speaker 7>rate unchanged at two point three percent.

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<v Speaker 6>Berg's Michael McKee the jump in job openings was mainly

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<v Speaker 6>driven by white.

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<v Speaker 1>Collar position and today's data on the labor market did

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<v Speaker 1>boost the case for the Fed to keep rates elevated.

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<v Speaker 1>We heard today from the head of the Atlanta Fed,

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<v Speaker 1>rafae Elbostik. He was saying rates should be held at

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<v Speaker 1>elevated levels for a long time as a way of

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<v Speaker 1>bringing inflation back down to the Fed's two percent target.

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<v Speaker 1>He also said he is expecting just one rate cut

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<v Speaker 1>being appropriate in twenty twenty four, and that would happen

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<v Speaker 1>sometime near the end of next year. Meantime, the head

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<v Speaker 1>of the Cleveland Fed, Lorettamester, was saying she would support

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<v Speaker 1>another rate hike. In November, we also heard from US

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<v Speaker 1>Treasury Secretary Janet Yellen, and she said she's keeping an

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<v Speaker 1>eye on this run up in market interest rates.

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<v Speaker 8>I'm very optimistic about the US economic outlook. Short term

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<v Speaker 8>inflation is coming down in the context of an extremely

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<v Speaker 8>strong labor market. We are now engaging in a very

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<v Speaker 8>substantial program of investments to strengthen our economy.

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<v Speaker 1>That is US Treasury Secretary Janet Yellen. Interestingly, she said

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<v Speaker 1>it's not a given that interest rates wilstay elevated for

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<v Speaker 1>a long period of time, right.

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<v Speaker 6>Well, a lot of uncertainty in the markets, and we

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<v Speaker 6>saw that with what happened to the end, the yen

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<v Speaker 6>rebounded from the weakest levels of the year with a

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<v Speaker 6>strong rally. Bloomberg's Joan Wong has the story.

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<v Speaker 9>Japan's currency reached one fifteen point one six per dollar

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<v Speaker 9>on Tuesday in New York trading. The yen then sold

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<v Speaker 9>nearly two percent in a matter of seconds to as

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<v Speaker 9>strong as one hundred and forty seven point four to

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<v Speaker 9>three per dollar. It lasts traded at around one forty nine,

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<v Speaker 9>with traders selling yen again as US yields rose to

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<v Speaker 9>the highest level since two thousand and seven. There's speculation

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<v Speaker 9>that Japanese officials were acting to slow the currency slide,

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<v Speaker 9>and official with Japan's Ministry of Finance had no comment

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<v Speaker 9>on whether Japan had intervened on the yen in Hong

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<v Speaker 9>Kong joined Wang Bloomberg Radio later.

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<v Speaker 1>Today, the Reserve Bank of New Zealand has a rate decision,

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<v Speaker 1>and the RBNZ is seen keeping rates on hold at

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<v Speaker 1>five and a half percent. Even so, the central bank

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<v Speaker 1>is also expected to keep open the option of future

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<v Speaker 1>rate hikes. We have a preview from Bloomberg's Paul Allen.

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<v Speaker 10>All Twenty two economists surveyed by Bloomberg expect a hawkish

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<v Speaker 10>hold from the Reserve Bank of New Zealand. Today. Inflation

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<v Speaker 10>is trending down but still well outside the target band,

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<v Speaker 10>but growth is holding up. Revised data shows the country

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<v Speaker 10>actually dodged a shallow recession in the second quarter. A

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<v Speaker 10>hold would certainly come as a relief to the governing

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<v Speaker 10>Labor Party, with opinion polls indicating a heavy election defeat

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<v Speaker 10>and store in ten days time. Uncertainty over who forms

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<v Speaker 10>the next government may also tempt the RBNZ to wait

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<v Speaker 10>and see if changes to fiscal policy are coming, Paul

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<v Speaker 10>Allen Bloomberg radio.

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<v Speaker 6>Back in the United States, jurious election was conducted today

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<v Speaker 6>in the trial of Sam Bankman Freed, he's accused of

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<v Speaker 6>swindling billions of dollars from the crypto Exchange FTX. Tomorrow,

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<v Speaker 6>the prosecution will begin laying out its case. Here's Bloomberg's

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<v Speaker 6>Kayley lines.

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<v Speaker 11>The prosecution also will be assisted by the accounts of

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<v Speaker 11>multiple key witnesses, some of the Bankman Fried's closest associates

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<v Speaker 11>at the time all of this went down, Gary Wong,

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<v Speaker 11>who co founded FTX with him, Nishad Saying who used

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<v Speaker 11>to be ftx's head of engineering, and Caroline Ellison, who

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<v Speaker 11>was the CEO of alime To Research, the aforementioned training firm,

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<v Speaker 11>and also his ex girlfriend. All of them have already

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<v Speaker 11>pleaded guilty to federal charges and are cooperating with prosecutors,

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<v Speaker 11>so they will be able to lean on their testimony

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<v Speaker 11>on the defense side. Though Sam Bankman Freeing already leading

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<v Speaker 11>up to this trial, has said repeatedly it was never

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<v Speaker 11>his intention to commit fraud, and intention is what is

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<v Speaker 11>going to have to be proven over the course of

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<v Speaker 11>this trial.

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<v Speaker 6>That's Bloomberg's Kayley Lines bankman. Freed has pleaded not guilty

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<v Speaker 6>to all seven charges, including fraud and conspiracy to commit

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<v Speaker 6>money laundering. I'm Brian Curtis along with Doug Christner, and

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<v Speaker 6>the big story of the day Republican Kevin McCarthy ousted

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<v Speaker 6>by this disas within his own party. Joining us now

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<v Speaker 6>is Henrietta Trees, managing partner and director of Economic Policy

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<v Speaker 6>at Veda Partners. Henrietta, thanks so much for joining us.

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<v Speaker 6>I think that's the right way to put it, that

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<v Speaker 6>he was ousted by dissidence within his own party. We

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<v Speaker 6>know that the big part of the story, as well

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<v Speaker 6>as the Democrats refusing to rescue him, and we talk

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<v Speaker 6>about that in a moment. In the short term, it

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<v Speaker 6>means that the speakership battle will begin again, and it

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<v Speaker 6>doesn't mean that Kevin McCarthy won't get the job back.

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<v Speaker 6>So how do you see that moving and is there

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<v Speaker 6>a lot of horse trading coming?

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<v Speaker 12>I think it's a very good point. The unknowns are

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<v Speaker 12>more voluminous than anybody would care to admit. I think

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<v Speaker 12>that what is plaining is that his replacement, Patrick McHenry

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<v Speaker 12>is not there of his own volition. You could see

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<v Speaker 12>that as he gabbled out this afternoon. I think Speaker

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<v Speaker 12>McCarthy would be just a glutton for punishment if you

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<v Speaker 12>tried to go for this again. More realistically, you'll see

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<v Speaker 12>representatives emerans plice either have their names thrown into the

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<v Speaker 12>ring to either be dismissed by themselves personally Scalise for example,

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<v Speaker 12>for health issues, or they will immediately sort of be

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<v Speaker 12>rejected by the far right again for being part of

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<v Speaker 12>the establishment or old guard. There are one hundred and

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<v Speaker 12>ninety six to two hundred and ten members of the

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<v Speaker 12>Republican Party who have supported Kevin McCarthy over the last

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<v Speaker 12>five days, and for many in the far right that's

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<v Speaker 12>just an untenable position for them to take. So I

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<v Speaker 12>think the effort to get to two eighteen is going

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<v Speaker 12>to be fraught, and we could easily be here for

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<v Speaker 12>weeks before we have a final speaker.

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<v Speaker 1>Yeah. Late last month, I don't need to remind you.

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<v Speaker 1>Moody's the only remaining major credit greater to give the

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<v Speaker 1>US a top rating, said confidence in the US was

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<v Speaker 1>wavering a bit insofar as the firm was concerned because

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<v Speaker 1>of their concern about governance. Where does that leave us

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<v Speaker 1>right now in terms of how markets have to discount

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<v Speaker 1>the dysfunction that we seem to be seeing.

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<v Speaker 12>I think it's a perfectly valid position at this point.

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<v Speaker 12>They do not have anything to take to any incoming

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<v Speaker 12>speaker and say this is our clear list of demands.

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<v Speaker 12>They are worried about the border, but don't know if

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<v Speaker 12>they can send border funding or border policy to a

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<v Speaker 12>piece of legislation. They're worried about Ukraine funding, but the

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<v Speaker 12>Senate Republican Conference wants all the Ukraine funding that they

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<v Speaker 12>can get. They are worried about the debt and the deficit,

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<v Speaker 12>but they're looking to trim sixty billion dollars in spending

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<v Speaker 12>this year when sixteen trillion dollars needs to actually be eliminated.

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<v Speaker 12>So I think that what's happening is you're confronting a

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<v Speaker 12>bunch of freshmen and relatively new House members who want

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<v Speaker 12>it all and don't know how to get any of it.

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<v Speaker 12>And that's effectively what the ratings agencies have called them

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<v Speaker 12>out for.

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<v Speaker 6>Let's talk for a moment about the Democrats refusing to

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<v Speaker 6>rescue McCarthy. Is that pure politics? I mean, this puts

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<v Speaker 6>the Republican Party in disarray. Some might even say chaos.

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<v Speaker 6>Is it the right thing for the country or was

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<v Speaker 6>this a move really just to get a leg up

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<v Speaker 6>on the Republicans.

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<v Speaker 12>You know, there were what five or six House Democrats

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<v Speaker 12>that didn't vote today that should have been more than

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<v Speaker 12>enough for McCarthy to work with. He got more than

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<v Speaker 12>that in the previous votes that he needed to maintain

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<v Speaker 12>the speakership or to even secure the speakership. He has

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<v Speaker 12>lost less members than that on certain key and procedural votes,

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<v Speaker 12>such as the ones on the motion to adjourn over

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<v Speaker 12>the weekend. There were plenty of Democrats that were not

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<v Speaker 12>present and voting had he been able to keep the

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<v Speaker 12>far right from eating into his caucus, So I'd have

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<v Speaker 12>a hard time ascribing blame to Democrats here. It's also

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<v Speaker 12>really hard to imagine Minority Leader Jeffries given an opportunity

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<v Speaker 12>to say, you know, go vote for another speaker, when

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<v Speaker 12>of course they have the permission and the ability to

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<v Speaker 12>vote for Jeffries, which is what we'll see from them

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<v Speaker 12>throughout next week as they start taking votes on the

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<v Speaker 12>speaker's position.

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<v Speaker 1>I think we can agree this rebellion was precipitated by

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<v Speaker 1>some of the bipartisan deals McCarthy put together one on

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<v Speaker 1>preventing a default on us, said the other just the

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<v Speaker 1>other day on government funding, which only takes us through

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<v Speaker 1>November seventeenth. What happens after November seventeenth.

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<v Speaker 12>Yeah, that's the question. The bipartisanship is really obviously the

0:12:27.120 --> 0:12:29.440
<v Speaker 12>problem for the far right, but that is the math

0:12:29.520 --> 0:12:31.280
<v Speaker 12>that we have to work with. The Senate is controlled

0:12:31.280 --> 0:12:35.240
<v Speaker 12>by Democrats, so that doesn't change here. I think what

0:12:35.360 --> 0:12:37.520
<v Speaker 12>immediately needs to happen is we need to reassess our

0:12:37.520 --> 0:12:40.440
<v Speaker 12>odds or I certainly do, about what the prospect is

0:12:40.440 --> 0:12:46.480
<v Speaker 12>for a shutdown on November eighteenth. And I think that

0:12:47.080 --> 0:12:50.400
<v Speaker 12>what we need to start off with is a hope

0:12:50.480 --> 0:12:53.720
<v Speaker 12>at the barest level that we can get some standalone

0:12:53.760 --> 0:12:58.440
<v Speaker 12>appropriations bills done for perhaps defense or maybe agriculture, get

0:12:58.480 --> 0:13:01.040
<v Speaker 12>those buils done so that when we do face November eighteenth,

0:13:01.080 --> 0:13:03.560
<v Speaker 12>it's not a full shutdown. But the odds of a

0:13:03.559 --> 0:13:06.440
<v Speaker 12>shutdown have to start at sixty five percent or higher.

0:13:06.920 --> 0:13:10.040
<v Speaker 12>For my clients, I usually am at about five percent.

0:13:10.080 --> 0:13:12.520
<v Speaker 12>I'm very bearish on these kinds of things. I was

0:13:12.520 --> 0:13:14.600
<v Speaker 12>only at twenty five percent we would shut down going

0:13:14.640 --> 0:13:18.000
<v Speaker 12>into this weekend. Now that we're in this new world.

0:13:18.040 --> 0:13:19.960
<v Speaker 12>I think you have to start at least sixty five.

0:13:20.400 --> 0:13:22.360
<v Speaker 12>There's a strong argument to make for seventy five, and

0:13:22.400 --> 0:13:23.960
<v Speaker 12>I bet the street will be much higher than me

0:13:24.240 --> 0:13:25.079
<v Speaker 12>come Monday morning.

0:13:26.160 --> 0:13:28.760
<v Speaker 6>We could talk until the cows come home about this story.

0:13:29.360 --> 0:13:32.480
<v Speaker 6>From the inside look out, but I want to go

0:13:32.520 --> 0:13:35.720
<v Speaker 6>outside the United States. I look at the press out

0:13:35.720 --> 0:13:38.199
<v Speaker 6>here in Asia a lot for a feature that we do,

0:13:38.760 --> 0:13:43.320
<v Speaker 6>and oftentimes you hear people talk about American exceptionalism. Is

0:13:43.360 --> 0:13:45.520
<v Speaker 6>this the opposite of that? I mean, does the US

0:13:46.720 --> 0:13:49.400
<v Speaker 6>look somewhat in disarray with something like this?

0:13:50.640 --> 0:13:54.440
<v Speaker 12>We are in an exceptional state of disarray. And there's

0:13:54.480 --> 0:13:59.760
<v Speaker 12>a great quote that's effectively, we are a functional dysfunctional unit.

0:14:00.160 --> 0:14:02.600
<v Speaker 12>And I wouldn't be surprised if you hear that all

0:14:02.600 --> 0:14:04.320
<v Speaker 12>over the world. Now, I mean, this is the height

0:14:04.400 --> 0:14:08.320
<v Speaker 12>of dysfunction. And it's not even party on party, you know,

0:14:08.360 --> 0:14:10.600
<v Speaker 12>this is intra party fighting that we see here, and

0:14:10.960 --> 0:14:13.440
<v Speaker 12>these slim majorities are exactly what it makes it so

0:14:13.559 --> 0:14:16.920
<v Speaker 12>difficult to govern. I can imagine some of the old

0:14:16.920 --> 0:14:19.080
<v Speaker 12>guards coming out and saying, you know, this kind of

0:14:19.120 --> 0:14:23.520
<v Speaker 12>dysfunction is what keeps America, you know, and our democratic

0:14:23.600 --> 0:14:27.240
<v Speaker 12>rights alive. But it is obviously the kind of thing

0:14:27.680 --> 0:14:29.360
<v Speaker 12>you think of. If you want to say something good

0:14:29.360 --> 0:14:31.320
<v Speaker 12>about a dictatorship, you don't have to go through this.

0:14:31.920 --> 0:14:34.760
<v Speaker 12>So I wouldn't be surprised if that's the argument. I mean,

0:14:34.760 --> 0:14:37.880
<v Speaker 12>the disarray in the US, particularly when it has real

0:14:38.000 --> 0:14:42.000
<v Speaker 12>ramifications on things like at Ukraine, are understandably a big

0:14:42.040 --> 0:14:46.040
<v Speaker 12>concern for our allies and not so allies abroad.

0:14:46.320 --> 0:14:50.720
<v Speaker 1>So the temporary speaker now is Representative Patrick McHenry Henrietta.

0:14:50.760 --> 0:14:53.720
<v Speaker 1>Can he bring the temperature down? Do you think effectively?

0:14:55.120 --> 0:14:57.320
<v Speaker 12>I actually have a lot of questions about what he

0:14:57.400 --> 0:14:59.720
<v Speaker 12>can do. I want to know if he's capable of

0:14:59.720 --> 0:15:01.840
<v Speaker 12>path legislation. I want to know if he could put

0:15:01.920 --> 0:15:06.960
<v Speaker 12>legislation on the floor. I don't expect him to immediately

0:15:07.000 --> 0:15:09.480
<v Speaker 12>come in and claim the mantle of speaker. I think

0:15:09.480 --> 0:15:12.040
<v Speaker 12>he's going to, at least for several hours or days,

0:15:12.080 --> 0:15:14.280
<v Speaker 12>make it plain that he did not want this position.

0:15:14.560 --> 0:15:16.920
<v Speaker 12>He was on McCarthy's shortlist and is not doing this

0:15:17.000 --> 0:15:19.880
<v Speaker 12>of his own volition. I don't know a happy warrior

0:15:20.000 --> 0:15:21.680
<v Speaker 12>is quite the way to term this yet, because I

0:15:21.680 --> 0:15:24.640
<v Speaker 12>don't think he's very happy. But I do think that

0:15:24.720 --> 0:15:26.520
<v Speaker 12>he is going to be the person that's in power

0:15:26.600 --> 0:15:30.200
<v Speaker 12>for probably a few weeks, which will give him time

0:15:30.320 --> 0:15:34.280
<v Speaker 12>to secure a foothold within the conference and try to

0:15:34.360 --> 0:15:37.400
<v Speaker 12>unite them around him. And it's the heavy task but

0:15:37.480 --> 0:15:38.720
<v Speaker 12>certainly could be accomplished.

0:15:40.240 --> 0:15:43.080
<v Speaker 6>This is Bloomberg Daybreak Asia, your morning brief on the

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