WEBVTT - An Inflation-Focused Election Day 0:00:01.840 --> 0:00:04.480 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.519 --> 0:00:07.320 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.360 --> 0:00:09.880 you the latest news from the world of business and finance, 0:00:09.880 --> 0:00:13.680 plus technology, politics, economics, all purtnising the power of Business 0:00:13.720 --> 0:00:17.200 Week reporters and editors, not to mention our journalists and 0:00:17.200 --> 0:00:20.040 analyst in more than one twenty countries. You can download 0:00:20.040 --> 0:00:23.480 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You 0:00:23.520 --> 0:00:25.479 can also listen to our radio show at two pm 0:00:25.520 --> 0:00:28.440 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.440 --> 0:00:32.240 search Bloomberg glovel News. Let's get your business week agenda 0:00:32.280 --> 0:00:34.880 on this midterm election day in the United States. Just 0:00:35.000 --> 0:00:37.960 metten in the house Bloomberg and director Broker's studio right 0:00:38.080 --> 0:00:40.960 to my left. She's deputy team leader for US Equities 0:00:40.960 --> 0:00:43.240 at Bloomberg News. And then we've got Red pick Heart, 0:00:43.280 --> 0:00:46.800 us economy reporter at Bloomberg News via zoom from Washington, 0:00:46.880 --> 0:00:48.760 d C. Where we're going to talk about. It's the 0:00:48.760 --> 0:00:51.440 economy stupid, So we'll get into that in just a moment, 0:00:51.440 --> 0:00:53.239 but just let's kick it off with you. We had 0:00:53.280 --> 0:00:56.319 a pretty strong rally, and yet what's happened. We've kind 0:00:56.320 --> 0:00:58.240 of run out of some steam here. We are seeing 0:00:58.280 --> 0:01:00.640 stocks coming off the highs and some that's interesting. I 0:01:00.680 --> 0:01:03.040 was looking at the volume for today, so over the 0:01:03.040 --> 0:01:05.240 past ten trading days for the SMP five hundred volumes 0:01:05.240 --> 0:01:08.280 about ten percent lower, and as you mentioned, stocks were 0:01:08.400 --> 0:01:11.120 higher or a lot higher earlier as far as just 0:01:11.200 --> 0:01:14.480 the prospects for maybe potential gridlock following the midterm elections. 0:01:14.520 --> 0:01:17.960 Also we did see treasury yields ease, so that was 0:01:18.000 --> 0:01:20.399 a big help as well as the dollar, but now 0:01:20.440 --> 0:01:22.960 you're seeing that not quite as helping as much of 0:01:22.959 --> 0:01:24.759 the broader market since it is a bit flat now. 0:01:24.800 --> 0:01:26.360 But still I was looking at as far as when 0:01:26.360 --> 0:01:29.959 it comes to a still right, still lower if you're 0:01:29.959 --> 0:01:32.479 looking at the tenure, I mean they fell as much 0:01:32.480 --> 0:01:34.880 as eight basis points today, So still it's not like 0:01:34.880 --> 0:01:38.119 there was a dramatic reversal there in yields. But again 0:01:38.280 --> 0:01:41.720 seeing sort of volume lights kind of at least making 0:01:41.760 --> 0:01:44.679 some digressions there for the markets. But again, when I'm 0:01:44.680 --> 0:01:46.680 talking to money managers, they're sort of because Paul and 0:01:46.720 --> 0:01:49.000 I saw the kids off right, because there are like 0:01:49.040 --> 0:01:50.880 schools it right, in New York, I think I end 0:01:50.920 --> 0:01:52.880 up getting closed because they use them for voting polls. 0:01:52.920 --> 0:01:54.040 I know in New Jersey, where I grew up, the 0:01:54.040 --> 0:01:56.720 school stayed open, but apparently in New York City. I 0:01:56.720 --> 0:01:58.160 guess the kids get the day off, So maybe there's 0:01:58.160 --> 0:02:01.120 a bunch of parents at home. Maybe that's why volumes like, 0:02:01.280 --> 0:02:04.320 I mean, potentially, maybe that could be one of the reasons. 0:02:04.560 --> 0:02:06.440 But also I think it has to just do what 0:02:06.480 --> 0:02:08.880 Paul and I has. I talked a lot about this 0:02:08.880 --> 0:02:11.000 this week as far as just the historical aspect of 0:02:11.040 --> 0:02:13.600 mid terms, how typically it kind of doesn't matter who 0:02:13.600 --> 0:02:15.359 you're pulling data from, whether it's see if we're a 0:02:15.400 --> 0:02:18.320 research or the Stock traders Almanac, how following midterms that 0:02:18.400 --> 0:02:20.519 typically vodes well for stocks. But when I've been talking 0:02:20.560 --> 0:02:22.520 to a lot of money managers, they've already kind of 0:02:22.560 --> 0:02:25.560 pointed out that even if there is say a Republican sweep, 0:02:25.560 --> 0:02:27.600 there already was a lot of grid luck in general 0:02:27.639 --> 0:02:29.480 with Congress, so they don't expect to see some sort 0:02:29.480 --> 0:02:32.680 of massive sort of rally following that. And I was 0:02:32.720 --> 0:02:37.760 talking to think gridlock was the norm. Well, plug out 0:02:37.760 --> 0:02:40.640 a second, let's bring in read read pickards US Economy 0:02:40.680 --> 0:02:43.680 Report Bloomberg. She's got something on the Bloomberg to about 0:02:44.400 --> 0:02:47.000 what really kind of matters, what are the most important 0:02:47.040 --> 0:02:50.919 issues for mid term voters read. So Paul's heading into 0:02:50.960 --> 0:02:53.880 the elections have shown us that the economy and inflation 0:02:54.000 --> 0:02:58.360 are ranking really high on voters concerns and higher than 0:02:58.400 --> 0:02:59.919 some of the other issues that are on the bout 0:03:00.040 --> 0:03:02.920 this year. And when we think about what the economy 0:03:03.000 --> 0:03:06.720 looks like, it's it's really this extreme scenario where on 0:03:06.840 --> 0:03:10.200 one hand, you have this really strong labor market, where 0:03:10.280 --> 0:03:13.200 the unemployment rate is near its lowest level in decades, 0:03:13.600 --> 0:03:16.600 Employers continue to add jobs at a good clip, and 0:03:16.840 --> 0:03:20.440 and wage growth has really been broad based and especially 0:03:20.520 --> 0:03:24.160 helpful for lower income workers. But then on the other hand, 0:03:24.320 --> 0:03:26.840 you have the fact that the highest inflation in a 0:03:26.960 --> 0:03:30.000 generation has essentially, you know, sucked the air out of 0:03:30.080 --> 0:03:33.400 the room. And so these rising costs from everything from 0:03:33.480 --> 0:03:37.120 you know, groceries to airline fairs has really you know, 0:03:37.280 --> 0:03:41.000 weighed on Americans. So when we think about those wage 0:03:41.040 --> 0:03:43.600 games that have come from this, you know, great jobs 0:03:43.640 --> 0:03:48.320 market adjusted for inflation, wages year or year or actually lower. 0:03:48.840 --> 0:03:51.560 So if you're a Republican running today, you're pointing at 0:03:51.600 --> 0:03:54.520 that horrible inflation, and if you're a Democrat, you're pointing 0:03:54.560 --> 0:03:57.160 at the awesome jobs market. And it's interesting read. We 0:03:57.240 --> 0:04:00.560 had Matt Miller, I'm sorry, Matt Winkler on earlier today. 0:04:00.680 --> 0:04:03.400 Matt Winkler is a founder of Bloomberg News and he 0:04:03.480 --> 0:04:05.560 has got a fascinating column out there today and he said, 0:04:05.880 --> 0:04:10.320 by just about any measure, the economy Underbiden is better 0:04:10.360 --> 0:04:14.320 than any president other than Jimmy Carter. So he the 0:04:14.440 --> 0:04:17.600 data is there. But I guess the question for um 0:04:18.000 --> 0:04:19.960 the candidates is kind of which day you're gonna focus 0:04:20.040 --> 0:04:24.440 on exactly. And from the perspective of a voter, you know, 0:04:24.600 --> 0:04:27.000 are you putting more value on the fact that you 0:04:27.440 --> 0:04:29.920 have a job right now and unemployment is really low, 0:04:30.440 --> 0:04:32.400 or are you looking at the fact that the rising 0:04:32.440 --> 0:04:36.280 cost of gasoline and groceries right and everything else is 0:04:36.760 --> 0:04:39.040 really weting on you in your household. Well, that's a 0:04:39.080 --> 0:04:41.080 good point, and you know, Jess, this is something we've 0:04:41.080 --> 0:04:43.400 seen throughout the corporate earning season, is that companies have 0:04:43.480 --> 0:04:45.720 to deal with those higher costs, and some have been 0:04:45.720 --> 0:04:47.640 able to pass it on to customers, some have been 0:04:47.680 --> 0:04:51.080 able to you know, reduce costs elsewhere. But that's a 0:04:51.200 --> 0:04:54.360 real thing, and the longer that sticks around, that's where 0:04:54.360 --> 0:04:56.480 we get into the questions of evaluation, certainly for the 0:04:56.520 --> 0:05:00.200 public markets right inequities correct and also the on going 0:05:00.279 --> 0:05:03.080 issue when it comes to margins. So that's slowly been 0:05:03.120 --> 0:05:08.360 spilling over beyond even just discretionary companies into communications services, staples, 0:05:08.720 --> 0:05:11.720 materials companies now and Gina Martin Adams and her team 0:05:11.720 --> 0:05:13.760 actually had some interesting data where they were looking at 0:05:13.800 --> 0:05:17.040 the correlation between operating margins as far as how does 0:05:17.080 --> 0:05:20.240 that mean for this process when markets bottom, and typically 0:05:20.600 --> 0:05:23.080 right now, the consensus for analyst they're thinking that margins 0:05:23.120 --> 0:05:25.960 could bottom in the third quarter, but that continues to 0:05:26.040 --> 0:05:28.520 get pushed back. So even though that could potentially past 0:05:28.600 --> 0:05:31.120 quarter correct, but that doesn't mean there's going to be 0:05:31.200 --> 0:05:33.480 a dramatic rebound because basically, if you're looking at the 0:05:33.640 --> 0:05:36.920 estimates in Bloomberg Intelligence, they're basically staying flat until the 0:05:37.040 --> 0:05:40.360 second quarter of next year. So for her, in her 0:05:40.440 --> 0:05:42.679 mind did her strategies. When we'm talking about Gena Martin Adams, 0:05:42.720 --> 0:05:45.799 they're thinking that doesn't necessarily bode well for the broader 0:05:45.839 --> 0:05:48.080 stock market because you need to see that swing higher. 0:05:48.160 --> 0:05:50.880 So say, if we do see a rebound there and 0:05:51.120 --> 0:05:53.760 more broadly with margins, that bodes well for the stock market. 0:05:53.839 --> 0:05:56.480 But if you continue to see animals keep pushing those 0:05:56.600 --> 0:05:58.480 estimates further and further back, that's going to be a 0:05:58.560 --> 0:06:03.720 challenge for stocks. Don't forget. We're gonna get important flation print. Yeah, 0:06:03.760 --> 0:06:05.200 so we'll get a little bit more in terms of 0:06:05.240 --> 0:06:07.080 how that's played out. Just Manton, thank you so much, 0:06:07.120 --> 0:06:09.560 Deputy team leader for US Equities at Bloomberg News. Here 0:06:09.600 --> 0:06:13.479 in our interactive broker's studio. Read Picker out there in Washington, 0:06:13.600 --> 0:06:16.480 d C. Via zoom She is US economy reporter Blomberg News. 0:06:16.520 --> 0:06:18.440 Be sure to check them both out at Bloomberg dot 0:06:18.440 --> 0:06:21.520 com for some of their stories dealing with peak inflation 0:06:21.600 --> 0:06:24.760 and also the US economy on election Day. This is 0:06:24.839 --> 0:06:28.799 Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes 0:06:28.880 --> 0:06:32.480 Tim Stinovic on Bloomberg Radio. We'll go figure it's the 0:06:32.520 --> 0:06:36.480 economy stupid again, or more specifically, it's inflation when it 0:06:36.560 --> 0:06:39.240 comes to today's midterm elections in the US. We talked 0:06:39.240 --> 0:06:42.480 about this earlier with Reid Picker. This story is this 0:06:42.640 --> 0:06:44.920 next story in the upcoming issue of Bloomberg Business Week, 0:06:44.920 --> 0:06:47.760 out on news stands later this week, already online at 0:06:47.760 --> 0:06:50.800 Bloomberg dot com, slash business Week, and on the Bloomberg terminal. 0:06:50.880 --> 0:06:52.880 So let's get into it with Nancy Cook, who wrote it, 0:06:52.920 --> 0:06:56.279 White House correspondent at Bloomberg News via zoom from our Washington, 0:06:56.400 --> 0:06:59.200 d C. Bureau. And also with us is Christina Limblad. 0:06:59.360 --> 0:07:01.880 She is echo ex editor a Bloomberg Business Week. She's 0:07:01.920 --> 0:07:05.000 here in our interactive broker studio. So Nancy, let's kick 0:07:05.040 --> 0:07:08.239 it off with you. I mean, it is really inflation, inflation, 0:07:08.320 --> 0:07:12.280 inflation right today when it comes to uh, the elections. 0:07:12.320 --> 0:07:16.720 It's amazing the narrative and coming from the Republicans versus 0:07:16.760 --> 0:07:21.120 the Democrats. Yeah, I mean, we really um over there 0:07:21.200 --> 0:07:23.440 in the closing weeks of the election, saw that inflation 0:07:23.600 --> 0:07:26.680 really has become the dominant issue. Um. You know a 0:07:26.760 --> 0:07:29.920 majority of voters say that inflation and the economy are 0:07:30.000 --> 0:07:32.600 really the most important things. And what's interesting is in 0:07:32.640 --> 0:07:35.880 the New York Times Siena College poll um that pollsters 0:07:35.920 --> 0:07:38.400 took a few weeks ago, it showed that voters, by 0:07:38.440 --> 0:07:41.200 a two to one margin, who said that the economy 0:07:41.280 --> 0:07:43.760 was a major issue of thought the Republicans were best 0:07:43.840 --> 0:07:47.160 boys to handle that. So Democrats certainly wanted the election 0:07:47.240 --> 0:07:49.720 to be about a range of issues, um, including the 0:07:49.920 --> 0:07:54.000 labor market. Uh, you know, abortion, threats to democracy, but 0:07:54.160 --> 0:07:58.000 really pull after polhos. Voters are really focused on inflation. Yeah. 0:07:58.040 --> 0:07:59.600 You guys have a great chart in here, and I 0:07:59.720 --> 0:08:01.320 like the pictures. They make it easy for me to 0:08:01.400 --> 0:08:04.280 understand things. And it's just like, you know, the list 0:08:04.400 --> 0:08:06.880 kind of what are the big issues for voters? What 0:08:07.000 --> 0:08:10.760 happened to abortion? Christina? It's number six on the list. 0:08:10.840 --> 0:08:12.560 What happened? I thought that was gonna be the Democrats 0:08:12.840 --> 0:08:14.920 calling card. Well, that was the hope in the summer 0:08:15.040 --> 0:08:17.160 that they were going to be able to energize voters 0:08:17.640 --> 0:08:20.720 along other you know, issues like abortion and gun rights 0:08:20.760 --> 0:08:25.680 because we had school shootings, um and and specifically you know, 0:08:25.880 --> 0:08:28.080 women's suburban voters. Those are going to be issues that 0:08:28.120 --> 0:08:31.840 hopefully would energize them. But it's been really hard to 0:08:32.080 --> 0:08:35.520 turn the channel on the narrative away from economic issues 0:08:35.559 --> 0:08:39.320 and about inflation. And I have to say the Republicans, Um, 0:08:40.280 --> 0:08:42.679 you know, Nancy, another great chart in the story is 0:08:42.720 --> 0:08:44.760 about ad spending. Maybe Nancy can tell us a little 0:08:44.800 --> 0:08:46.840 bit about how, you know, because that's a very clear 0:08:46.920 --> 0:08:52.040 trend lines you see. Yeah, basically, basically we saw that 0:08:52.200 --> 0:08:56.320 Republicans were outspending Democrats um four to one in ads 0:08:56.400 --> 0:09:00.360 talking about inflation, and that really became the dominant Republican message. 0:09:00.400 --> 0:09:02.839 And you know, in addition to just voters citing it, 0:09:02.960 --> 0:09:05.360 Republicans sort of really picked up the baton of that 0:09:05.640 --> 0:09:08.400 and really hammered at home and Democrats just have not 0:09:08.520 --> 0:09:11.280 been able to escape it or really come out from 0:09:11.320 --> 0:09:14.040 under that narrative. As Christina said, you know, Nancy would 0:09:14.040 --> 0:09:15.360 I really would have loved has been a fly on 0:09:15.400 --> 0:09:18.360 the wall in the White House. As Joe Biden said, hey, folks, 0:09:18.840 --> 0:09:21.319 fails smart economic people. You said this was going to 0:09:21.400 --> 0:09:25.439 be transitory. I mean it really right. He was thinking 0:09:25.520 --> 0:09:28.400 a message out there talking to the American public, and 0:09:28.520 --> 0:09:31.079 yet as it's become persistent, the White House has really 0:09:31.120 --> 0:09:32.839 kind of had to scramble and rethink its message a 0:09:32.840 --> 0:09:36.080 little bit. Absolutely. You know, I've been reporting on how 0:09:36.200 --> 0:09:38.319 the White House has been dealing with inflation really for 0:09:38.400 --> 0:09:40.680 the past year and a half, and my reporting shows 0:09:40.760 --> 0:09:44.599 that really starting last fall, when um inflation started to 0:09:44.640 --> 0:09:47.640 become a major political problem. The White House started to 0:09:47.640 --> 0:09:50.440 take it much more seriously, and the President um has 0:09:50.559 --> 0:09:53.160 privately expressed a lot of concern with the fact that 0:09:53.720 --> 0:09:55.839 his AIDS for so long kept telling him that it 0:09:55.920 --> 0:09:58.679 was so called transitory and temporary, when in fact it 0:09:58.800 --> 0:10:01.439 was not. He got angry a few times at the 0:10:01.520 --> 0:10:05.880 National Economic Council Director Brian D's for basically, the White 0:10:05.920 --> 0:10:09.040 House is handling of inflation and it's faulty messaging on 0:10:09.120 --> 0:10:12.080 it um and so it's been been a real source 0:10:12.120 --> 0:10:14.880 of tension inside the White House, even as they try 0:10:14.960 --> 0:10:17.120 to point to other great spots in the economy like 0:10:17.200 --> 0:10:19.760 the jobs market and Nancy. I guess it's a little 0:10:19.800 --> 0:10:22.280 bit of a messaging problem in a sense that when 0:10:22.280 --> 0:10:24.520 you think about inflation, it is a global issue. There's 0:10:24.520 --> 0:10:27.320 inflation all over this planet. Just go look at our 0:10:27.320 --> 0:10:30.000 good friends in the UK and across Europe and other places. 0:10:30.640 --> 0:10:33.280 Number one, Number two, A lot of the inflation was 0:10:33.400 --> 0:10:35.679 not the result of any particular policy measure, but it's 0:10:35.720 --> 0:10:39.120 simply supplying demand of global economies, think oil. But I 0:10:39.160 --> 0:10:41.679 guess that's not an easy message to get across to 0:10:41.760 --> 0:10:44.600 Middle America to everyone. Yeah, that has been a huge 0:10:44.640 --> 0:10:46.840 part of the White Houses message like, look, look at 0:10:46.880 --> 0:10:49.360 these other countries they're facing it to. UM. You know, 0:10:49.480 --> 0:10:52.839 this is a post COVID economy feature. This is also 0:10:52.960 --> 0:10:56.800 partly caused by um Putin's war in Ukraine. That is 0:10:56.840 --> 0:10:58.880 a big part of the White House this message. But 0:10:59.000 --> 0:11:00.960 the fact of the matter is Americans every day are 0:11:01.000 --> 0:11:03.400 going to the grocery store and they're seeing higher prices 0:11:03.480 --> 0:11:06.559 for things like meat and produce. They're paying more for 0:11:06.679 --> 0:11:10.360 airline tickets, are playing more for their rent or their house. UM, 0:11:10.480 --> 0:11:13.080 and Americans are just very frustrated by the rising prices 0:11:13.200 --> 0:11:16.320 and they sort of don't want these excuses. And even 0:11:16.400 --> 0:11:20.200 Democrats strategists say the White House UM and Democrats at 0:11:20.280 --> 0:11:22.720 large just have not done a good enough job talking 0:11:22.760 --> 0:11:25.320 about their economic record but also showing that they are 0:11:25.360 --> 0:11:30.280 trying to take action on inflation. So I guess the 0:11:30.400 --> 0:11:34.719 next question, uh, Nancy, it would just be simply and 0:11:34.800 --> 0:11:37.320 I will wake up tomorrow, and I guess the Democrats 0:11:37.360 --> 0:11:38.679 will have to see how it plays out. Of course, 0:11:38.760 --> 0:11:40.640 but to the extent that the polls hold true and 0:11:40.760 --> 0:11:43.880 some of the reporting today holds true, it'll be time 0:11:43.920 --> 0:11:47.480 for the Democrats to maybe re message some of their 0:11:47.600 --> 0:11:50.880 key Uh key tenants. Is that something you're hearing from 0:11:50.920 --> 0:11:53.320 some of the leaders down in Washington. Well, I think 0:11:53.360 --> 0:11:55.080 that the White House is trying to project a very 0:11:55.120 --> 0:11:58.320 optimistic view of what's going to happen at this point. 0:11:58.360 --> 0:12:00.920 I think that they're telling people that, you know, keeping 0:12:00.960 --> 0:12:03.319 the House will be very hard, that the sentiment is 0:12:03.400 --> 0:12:05.560 that the House will likely flip to Republicans. I think 0:12:05.600 --> 0:12:07.880 the question is just what happens with the Senate, And 0:12:08.000 --> 0:12:10.560 what I'll be looking for tomorrow is the exit polling, 0:12:10.679 --> 0:12:12.960 not just the results, but what voters say about why 0:12:13.040 --> 0:12:16.040 they voted and if inflation and the economy continues to 0:12:16.120 --> 0:12:18.400 be the dominant theme. Well, and the thing is, Nancy, 0:12:18.559 --> 0:12:20.800 I love. I think it's how you wrap up the story. 0:12:20.880 --> 0:12:23.520 The thing is, Republicans have been really smart in terms 0:12:23.559 --> 0:12:26.200 of ad spending and the narrative when it comes to inflation. 0:12:26.360 --> 0:12:30.360 But what's their plan for bringing inflation town? That's a 0:12:30.440 --> 0:12:33.360 great point, you know, um Rick's got the senator from 0:12:33.440 --> 0:12:38.000 Florida has talked about, you know, UM cutting Medicare and 0:12:38.080 --> 0:12:40.800 Social Security as a means of cutting in federal spending. 0:12:41.400 --> 0:12:43.199 UM as a way to fight you know, out of 0:12:43.240 --> 0:12:46.439 control government spending or out of control rising prices. But 0:12:46.559 --> 0:12:49.400 that's not really a plan that is uniformly embraced by 0:12:49.480 --> 0:12:52.680 all congressional leaders. And so the Republicans sort of don't 0:12:52.760 --> 0:12:55.360 have and across the board plan for fighting inflation. And 0:12:55.600 --> 0:12:57.280 I think that that's something to keep in mind too. 0:12:58.760 --> 0:13:01.679 So all right, Nancy, So the issue here is going 0:13:01.720 --> 0:13:04.480 to going to be the Senate. What's this state that 0:13:04.600 --> 0:13:08.839 you're really focusing on tonight? I'm focusing on a few. 0:13:09.080 --> 0:13:12.040 I mean, I'm very curious to see what happens in Pennsylvania. Um, 0:13:12.800 --> 0:13:15.640 I'm very very curious about Georgia, although I think that 0:13:15.720 --> 0:13:17.920 we we may not know the results of that tonight. 0:13:18.000 --> 0:13:21.079 And I'm really closely watching Nevada as well, just to 0:13:21.160 --> 0:13:23.439 see if Democrats that's been a really close race for 0:13:23.480 --> 0:13:25.720 a while. Um. You know, there's a lot of union 0:13:25.800 --> 0:13:28.800 workers there, um, and and also a lot of Hispanics. 0:13:28.840 --> 0:13:31.600 I'm really curious to see how Democrats fare there. Hey, Nancy, 0:13:31.640 --> 0:13:33.319 just got about thirty forty seconds left here. I was 0:13:33.320 --> 0:13:35.199 just thinking, going back to what you said about, you know, 0:13:35.760 --> 0:13:38.240 the Republicans and their plan or lack they off on inflation. 0:13:38.480 --> 0:13:40.880 Should this be an issue two years from now? And 0:13:41.040 --> 0:13:44.920 should the Republicans really make some inroads this time around. 0:13:45.320 --> 0:13:47.160 Will it work against them? Or do you think, based 0:13:47.200 --> 0:13:49.560 on what you're seeing that they're just better at messaging 0:13:49.640 --> 0:13:51.319 when it comes to things about the economy And just 0:13:51.400 --> 0:13:54.360 got about thirty seconds. I don't think they're better at messaging. 0:13:54.480 --> 0:13:56.800 I just think that the Democrats have held all the 0:13:56.880 --> 0:13:59.400 lovers of power at this point, and uh, you know 0:13:59.440 --> 0:14:01.640 Americans are very mad about inflation, so they're going to 0:14:01.679 --> 0:14:04.760 blame those in power. Yeah, it's kind of how it works, right, 0:14:05.480 --> 0:14:10.080 That is how it works. Well, really smart, really relevant, 0:14:10.360 --> 0:14:12.800 certainly to the conversations we're having today. Nancy Cook, Thank 0:14:12.800 --> 0:14:15.240 you so much, White House Correspondent, Bloomberg News via zoom 0:14:15.240 --> 0:14:17.880 from our Washington, d C. Bureau. This story in the 0:14:18.040 --> 0:14:20.800 upcoming issue of Bloomberg Business Week, but find it already 0:14:21.280 --> 0:14:23.880 on the Bloomberg terminal and online at Bloomberg dot com 0:14:23.960 --> 0:14:26.200 and or thanks to Christina Lynblad. She is the economics 0:14:26.320 --> 0:14:29.520 editor of Bloomberg Business Week magazine. Joining us in studio. 0:14:29.760 --> 0:14:33.320 You're listening to Bloomberg Business Week with Carol Messer and 0:14:33.440 --> 0:14:38.720 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Not so smart, 0:14:38.840 --> 0:14:42.480 certainly if you're holding bitcoin, Bitcoin extending its loss UH 0:14:42.680 --> 0:14:44.360 to more than fifteen Actually it was down more than 0:14:44.400 --> 0:14:48.040 sixteen percent to below seventeen thousand, five hundred. It is 0:14:48.080 --> 0:14:50.440 bouncing around now, it's still down about twelve percent. Man, 0:14:51.040 --> 0:14:54.360 It's an area, Paul, where I feel like one man's crisis, 0:14:54.400 --> 0:14:57.880 another man's opportunity, because we definitely saw some deal making 0:14:58.000 --> 0:15:02.880 and consolidation today. This deal, you know, it's interesting, it's 0:15:03.160 --> 0:15:06.560 financed by f t X TO exchanges, it's together and 0:15:06.880 --> 0:15:09.720 news broke this this morning is Katie Greyfeld and I 0:15:09.840 --> 0:15:12.720 were on air broadcast sounds like what happened there. So 0:15:13.160 --> 0:15:16.360 we have Katie Greifeld in our studio now hopefully we've 0:15:16.360 --> 0:15:18.520 got some more reporting on this because this was odd 0:15:18.600 --> 0:15:22.120 deal that's really rocking the Cryptosy Katie Greifeld, Bloomberg News 0:15:22.240 --> 0:15:26.040 Senior markets reporter, co host of Crypto I R l 0:15:26.120 --> 0:15:28.560 on Bloomberg Crriet Take joins us here in a Bloomberg 0:15:28.600 --> 0:15:31.280 in active broker studio. Katie, what's the backstory, what's going 0:15:31.320 --> 0:15:33.240 on here? First of all, it's nice to see you again. 0:15:33.680 --> 0:15:36.080 It feels feels like we've lived in multiple lives since 0:15:36.120 --> 0:15:38.840 I last saw you in terms of more reporting. I mean, 0:15:38.880 --> 0:15:42.640 there's still so many questions about this deal number one 0:15:42.720 --> 0:15:44.200 or what are the terms? I mean, what kind of 0:15:44.240 --> 0:15:46.240 money are we talking about here? But the big headline, 0:15:46.520 --> 0:15:49.680 of course, is that the world's biggest crypto exchange by 0:15:49.800 --> 0:15:52.920 far by spot volume, is buying the second largest again 0:15:53.040 --> 0:15:57.320 by spot volume. Again a lot of question marks here. 0:15:57.400 --> 0:15:59.440 We know that f t X was having some sort 0:15:59.480 --> 0:16:02.560 of liquid tod the event. Both CEOs tweeted to that effect. 0:16:02.640 --> 0:16:04.520 We know that f t X was being hit by 0:16:04.680 --> 0:16:07.480 massive withdrawals. We do have a tweet from f t 0:16:07.680 --> 0:16:10.080 X CEO Sam Bakman freed He said that the assets 0:16:10.160 --> 0:16:12.600 will be covered one to one quote, this is one 0:16:12.640 --> 0:16:15.360 of the main reasons we've asked finance to come in. 0:16:15.560 --> 0:16:18.800 So is this just about survival? You know, it's I 0:16:18.920 --> 0:16:21.360 think it's too early to say, but I would venture 0:16:21.400 --> 0:16:23.000 that a lot of people didn't even know f t 0:16:23.240 --> 0:16:25.760 X was for sale. I mean, this is shocking, This 0:16:25.920 --> 0:16:28.840 was shocking news. It's been a really dramatic forty eight hours. 0:16:28.920 --> 0:16:31.560 We had been seeing the two CEOs tweet back and 0:16:31.680 --> 0:16:34.120 forth at each other, but given this sort of white 0:16:34.400 --> 0:16:37.720 night in the industry that SPF has played, I think 0:16:37.760 --> 0:16:40.120 a lot of people were surprised by this nude and 0:16:40.200 --> 0:16:41.760 just the magnitude of it. When Paul and I were 0:16:41.800 --> 0:16:44.200 on radio, I was like, this is the biggest thing 0:16:44.280 --> 0:16:47.760 to happen since Terra, which I think was surprising to 0:16:47.840 --> 0:16:51.640 some of our producers. Like, we're going from crisis to crisis, 0:16:51.680 --> 0:16:55.280 is exactly. I mean, in crypto time may feels like 0:16:55.320 --> 0:16:57.440 a long time ago, but in the grand scope of time, 0:16:57.680 --> 0:17:01.160 you're right. I mean, we're just rolling crises. There's been 0:17:01.280 --> 0:17:04.160 periods of lulls. I mean, the stat we were looking 0:17:04.200 --> 0:17:06.639 at this morning before this news broke was bitcoin has 0:17:06.680 --> 0:17:10.119 been way less volatile than the stock market. That's not 0:17:10.240 --> 0:17:12.040 the case right now. That's not the case. And you know, 0:17:12.680 --> 0:17:15.879 the CEO, Sam Bankman Freed SPF is the you know 0:17:16.040 --> 0:17:18.720 the crypto folks referred to him as I kind of 0:17:18.760 --> 0:17:21.639 thought he was like this jillionaire. Where did all his 0:17:21.680 --> 0:17:24.679 gaions go in terms of why was there liquidity crisis 0:17:24.760 --> 0:17:28.040 at his company? Or was his jillion's all tied up 0:17:28.040 --> 0:17:29.960 in stock that's not liquid We didn't know any of 0:17:30.040 --> 0:17:32.800 that yet. A lot of great questions. Uh, this sort 0:17:32.840 --> 0:17:35.600 of factors into stuff that we're still reporting out that 0:17:35.680 --> 0:17:37.639 comes to the f t T token that is the 0:17:37.720 --> 0:17:42.080 native token of the exchange. Binance coin is the native 0:17:42.080 --> 0:17:46.240 token of the Binance exchange. So we don't know exactly 0:17:46.920 --> 0:17:50.520 necessarily what SPF states was. We know that the Binance CEO, 0:17:50.920 --> 0:17:53.760 Shan Pan's out. He's known as c Z. Of course, 0:17:53.800 --> 0:17:56.600 everyone has their initials. The big news over the weekend 0:17:56.640 --> 0:17:58.920 was that he was selling more than five hundred million 0:17:58.960 --> 0:18:02.240 dollars worth of that token. Coined Us had reported that 0:18:02.320 --> 0:18:06.280 Alameda Research, which is a trading shop owned by SPF, 0:18:07.000 --> 0:18:10.359 had significant assets in that token. So again the direct 0:18:10.480 --> 0:18:14.760 linkage is unclear here, but it's a very interconnected world 0:18:14.840 --> 0:18:17.400 the crypto industry. A day before reaching a deal, bank 0:18:17.520 --> 0:18:20.520 and Freed sent on Twitter that assets on FTX were fine. 0:18:21.640 --> 0:18:24.880 And I mean again, we know that they were really 0:18:25.000 --> 0:18:28.000 under a lot of pressure from those withdrawals. It seems 0:18:28.040 --> 0:18:30.080 like that was a big focus here and getting this 0:18:30.160 --> 0:18:32.560 deal done. But again, the terms of the deal. Should 0:18:32.600 --> 0:18:34.240 we assume when he said fine because he knew that 0:18:34.280 --> 0:18:36.520 he had a deal coming. You know, if I could 0:18:36.560 --> 0:18:39.080 get an interview with him, Carol, I would love that. 0:18:39.200 --> 0:18:41.880 If he's listening right now, please call me. Meanwhile, let's 0:18:41.880 --> 0:18:43.880 just say crypto across the board. We've got bit coining 0:18:43.920 --> 0:18:47.880 down twelve percent, Etherorium down almost seventeen percent, binance coin 0:18:47.960 --> 0:18:50.399 is down eight percent, x rps down twenty percent, so 0:18:50.440 --> 0:18:52.800 we are just seeing Salana is down twenty eight percent, 0:18:52.840 --> 0:18:54.639 so we're just seeing mass selling. So once there's a 0:18:54.720 --> 0:18:58.320 lot of systemic question marks right now. Systemic that's like that, 0:18:58.840 --> 0:19:00.480 but it's just for this, for the ticks out there 0:19:00.480 --> 0:19:02.840 of crypto, like a Jamie time In for example, just 0:19:03.240 --> 0:19:07.720 more ammunition for kids. I told you another man I 0:19:07.760 --> 0:19:10.440 would love to talk to right now. Right, he's still 0:19:10.480 --> 0:19:12.919 watching it. We love checking with you when it comes 0:19:12.960 --> 0:19:15.280 to the crypto space. Katy gray Felt, Bloomberg New Senior 0:19:15.280 --> 0:19:18.000 Markets reporter, reporter, co host of Crypto I r l 0:19:18.040 --> 0:19:21.000 on Bloomberg Crricktakes. She does that with Tim's Tanebeck. I'm 0:19:21.080 --> 0:19:31.320 broom mac journal now. But you let me drive, no, no, please, 0:19:31.440 --> 0:19:37.160 I'll do the riding gravels. I want to drive. Its 0:19:37.240 --> 0:19:45.160 good question drive. This is the drive to the Clobell 0:19:46.840 --> 0:19:50.240 on Bloomberg Radio. Right, folks, we just got about ten 0:19:50.240 --> 0:19:52.800 minutes luck in today's trading session. Definitely bouncing around those 0:19:52.840 --> 0:19:55.560 major equity averages off our highs and lows, but green 0:19:55.640 --> 0:19:57.960