1
00:00:02,520 --> 00:00:08,320
Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

2
00:00:09,840 --> 00:00:13,160
Speaker 2: This is your weekly Washington policy Pulse the Balance of

3
00:00:13,240 --> 00:00:17,680
Speaker 2: Power Podcasts. I'm Joe Matthew. Every Monday, Bloomberg Intelligence, senior

4
00:00:17,720 --> 00:00:20,800
Speaker 2: policy analyst and friend of the show, Nathan Dean shares

5
00:00:20,840 --> 00:00:24,200
Speaker 2: his weekly call on upcoming catalysts in the nation's capital.

6
00:00:24,720 --> 00:00:27,360
Speaker 2: Listen for the most recent and relevant policy research from

7
00:00:27,400 --> 00:00:30,880
Speaker 2: our team at Bloomberg Intelligence. Now with today's installment, here's

8
00:00:30,960 --> 00:00:31,480
Speaker 2: Nathan Dean.

9
00:00:31,560 --> 00:00:33,599
Speaker 3: Good afternoon, everybody. My name is Nathan Dean.

10
00:00:33,640 --> 00:00:36,280
Speaker 1: I'm a senior policy analyst with Bloomberg Intelligence here in

11
00:00:36,280 --> 00:00:38,479
Speaker 1: the Washington DC Bureau. I want to say thank you

12
00:00:38,600 --> 00:00:41,800
Speaker 1: very much for attending in thebi Washington Policy Pulse. We

13
00:00:41,920 --> 00:00:43,559
Speaker 1: also want to say thank you to those of you

14
00:00:43,600 --> 00:00:46,239
Speaker 1: who are listening to us via the Balance of Power podcast.

15
00:00:46,280 --> 00:00:49,960
Speaker 1: We always appreciate your listening and go ahead and get started.

16
00:00:49,960 --> 00:00:53,519
Speaker 1: Today is March twenty third, twenty twenty six. And for

17
00:00:53,560 --> 00:00:55,640
Speaker 1: those of you in the Washington, DC area, I hope

18
00:00:55,640 --> 00:00:57,960
Speaker 1: you had a wonderful weekend just because the weather was

19
00:00:58,120 --> 00:01:01,200
Speaker 1: absolutely amazing. So the first thing I want to talk

20
00:01:01,200 --> 00:01:03,280
Speaker 1: about is just some of the updates that we saw

21
00:01:03,480 --> 00:01:06,399
Speaker 1: just this morning in terms of the US Iran conflict.

22
00:01:06,760 --> 00:01:08,640
Speaker 1: President Trump came out and said that there would be

23
00:01:08,680 --> 00:01:12,839
Speaker 1: a five day pause ceasefire, if you will, from attacking

24
00:01:13,120 --> 00:01:16,760
Speaker 1: Iranian energy infrastructure. If you remember, over the weekend, he

25
00:01:16,800 --> 00:01:20,440
Speaker 1: gave a forty eight hour deadline for Iran to essentially,

26
00:01:21,360 --> 00:01:23,800
Speaker 1: I don't know, surrender or any type of I don't

27
00:01:23,800 --> 00:01:26,520
Speaker 1: know exactly what the outgame was, the endgame here was.

28
00:01:26,600 --> 00:01:29,240
Speaker 1: But President Trump announced this morning that they would not

29
00:01:29,280 --> 00:01:33,319
Speaker 1: attack US or sorry, Iranian energy infrastructure for five days

30
00:01:33,800 --> 00:01:37,319
Speaker 1: due to indirect talks. Now Axios is reporting that talks

31
00:01:37,360 --> 00:01:40,240
Speaker 1: between the United States and Iran are taking place, and

32
00:01:40,280 --> 00:01:43,759
Speaker 1: they're not exactly talks. Their messages being sent via Turkey, Pakistan,

33
00:01:44,160 --> 00:01:49,080
Speaker 1: and Egypt. Now Iran denied that there were talks taking place.

34
00:01:49,560 --> 00:01:52,280
Speaker 1: The President Trump just gave an impromptu press conference just

35
00:01:52,320 --> 00:01:54,960
Speaker 1: a few minutes ago at the airport he's heading to

36
00:01:55,680 --> 00:01:57,920
Speaker 1: setting out of Palm Beach and he's heading to Tennessee

37
00:01:58,000 --> 00:02:01,600
Speaker 1: this morning before he returns to Washington. And a couple

38
00:02:01,600 --> 00:02:03,480
Speaker 1: of things that he just said was a he's talking

39
00:02:03,480 --> 00:02:07,800
Speaker 1: with somebody who's not the Supreme Leader, not the commanee.

40
00:02:08,240 --> 00:02:10,400
Speaker 1: And he said that they have no indication that Commane

41
00:02:10,480 --> 00:02:14,239
Speaker 1: is still alive. They're talking to this individual but potentially

42
00:02:14,360 --> 00:02:17,560
Speaker 1: reopening the horror moves or and honestly, it's just at

43
00:02:17,560 --> 00:02:21,320
Speaker 1: a very high level talk, you know. He also said that,

44
00:02:21,919 --> 00:02:23,760
Speaker 1: you know, he could see a deal coming together within

45
00:02:23,840 --> 00:02:26,320
Speaker 1: five days. But then when a reporter asked, well, why

46
00:02:26,320 --> 00:02:29,960
Speaker 1: are the marine steaming towards the region from California, he

47
00:02:30,040 --> 00:02:31,560
Speaker 1: also said, well, look, I'm not going to tell you

48
00:02:31,600 --> 00:02:33,960
Speaker 1: what our future plans were. So this is just I guess,

49
00:02:34,320 --> 00:02:36,160
Speaker 1: you know, going to have to just go back and

50
00:02:36,160 --> 00:02:37,959
Speaker 1: put in the hip pocket if everybody's just gonna have

51
00:02:38,000 --> 00:02:40,799
Speaker 1: to stay attached to their Bloomberg terminals and see what's

52
00:02:40,800 --> 00:02:43,800
Speaker 1: coming up next. However, there was a comment about the

53
00:02:43,840 --> 00:02:47,000
Speaker 1: Iranian supplemental defense package that I think is somewhat interesting

54
00:02:47,000 --> 00:02:48,440
Speaker 1: that I wanted to break down a little bit further

55
00:02:48,480 --> 00:02:51,120
Speaker 1: on this call now over the weekend, it was reported

56
00:02:51,120 --> 00:02:53,800
Speaker 1: at the Late Land last week over the weekend that

57
00:02:53,840 --> 00:02:57,320
Speaker 1: the Pentagon is asking two hundred billion dollars for additional

58
00:02:57,320 --> 00:02:59,880
Speaker 1: funding for this Iran supplemental package.

59
00:03:00,120 --> 00:03:01,520
Speaker 3: Now, in a press conference.

60
00:03:01,160 --> 00:03:03,320
Speaker 1: Last week in the Oval Office, President Trump actually said

61
00:03:03,360 --> 00:03:06,160
Speaker 1: it would be for I Ran and other things, and

62
00:03:06,160 --> 00:03:09,640
Speaker 1: everybody in Washington and other things would be Cuba. But

63
00:03:09,800 --> 00:03:12,040
Speaker 1: just this morning, President Trump was asked, do you still

64
00:03:12,080 --> 00:03:15,160
Speaker 1: need the two hundred billion dollars if I ran in

65
00:03:15,160 --> 00:03:17,080
Speaker 1: the United States were to come to a peace agreement,

66
00:03:17,639 --> 00:03:19,240
Speaker 1: And he just said, look, it's a nice to have.

67
00:03:19,400 --> 00:03:20,880
Speaker 3: It's not essential. It's a nice to have.

68
00:03:21,560 --> 00:03:24,360
Speaker 1: That's not going to go over well in Congress because

69
00:03:24,440 --> 00:03:27,720
Speaker 1: the response from congressional leadership, and this is both the

70
00:03:27,760 --> 00:03:31,520
Speaker 1: Republicans and Democrats for difference of views, but the response

71
00:03:31,720 --> 00:03:34,040
Speaker 1: was from the Republican side is this is not something

72
00:03:34,080 --> 00:03:37,080
Speaker 1: we should be jumping into too quickly. A because the

73
00:03:37,120 --> 00:03:41,200
Speaker 1: I ran more again remains unpopular with independence and non

74
00:03:41,240 --> 00:03:45,800
Speaker 1: political affiliated individuals. And B you know, there are some

75
00:03:45,880 --> 00:03:47,920
Speaker 1: Republicans out here that think that we should either be

76
00:03:47,960 --> 00:03:51,640
Speaker 1: doing this via the normal appropriations process or we should

77
00:03:51,680 --> 00:03:54,960
Speaker 1: be doing this via reconciliation package. Neither of those can

78
00:03:54,960 --> 00:03:58,840
Speaker 1: take place right now, super quickly. And so you know,

79
00:03:58,880 --> 00:04:01,360
Speaker 1: you're not really seeing any movement on Congress to fully

80
00:04:01,400 --> 00:04:03,520
Speaker 1: embrace this two hundred billion dollar package.

81
00:04:04,160 --> 00:04:05,720
Speaker 3: Like I mentioned before, you know.

82
00:04:05,680 --> 00:04:07,440
Speaker 1: If you see this come out from the White House,

83
00:04:07,920 --> 00:04:10,160
Speaker 1: call it two hundred called three hundred billion, you know,

84
00:04:10,240 --> 00:04:12,760
Speaker 1: Congressional appropriators are going to try and attach other things

85
00:04:12,800 --> 00:04:15,559
Speaker 1: to it. Fifteen billion dollars Infarm made it in particular,

86
00:04:15,880 --> 00:04:17,760
Speaker 1: So again keep that in mind when you see any

87
00:04:17,800 --> 00:04:21,560
Speaker 1: type of movement on this Iran Supplemental Defense package over

88
00:04:21,680 --> 00:04:24,080
Speaker 1: on the Capitol Hill side as well. Just remember we

89
00:04:24,160 --> 00:04:27,520
Speaker 1: have a recess that begins on Friday. This is a

90
00:04:27,520 --> 00:04:30,880
Speaker 1: two week recess. Now that's important for two reasons. One

91
00:04:30,960 --> 00:04:33,000
Speaker 1: is the Save America Act. President Trump wants you to

92
00:04:33,000 --> 00:04:34,960
Speaker 1: call it the Save America Act, not the Save Act,

93
00:04:35,320 --> 00:04:36,440
Speaker 1: but the Save America Act.

94
00:04:36,480 --> 00:04:38,240
Speaker 3: This is obviously the voting rights bill.

95
00:04:38,320 --> 00:04:40,720
Speaker 1: Voting again, like I mentioned before and last week's call

96
00:04:41,000 --> 00:04:43,760
Speaker 1: for those of you not familiar with it, voting is

97
00:04:43,760 --> 00:04:47,000
Speaker 1: held by the States Rights This would actually put federal

98
00:04:47,040 --> 00:04:50,200
Speaker 1: standards in terms of requiring citizenship and ID There were

99
00:04:50,200 --> 00:04:53,680
Speaker 1: other provisions included, like transgender sports and so forth like that.

100
00:04:54,080 --> 00:04:55,720
Speaker 1: Where you need to go is that it's not going

101
00:04:55,800 --> 00:04:58,120
Speaker 1: to pass. There's really no way that this thing is

102
00:04:58,160 --> 00:05:00,520
Speaker 1: going to pass. The Republicans aren't to get rid of

103
00:05:00,560 --> 00:05:02,839
Speaker 1: the filmbuster. They're not going to convert to a talking filmbuster.

104
00:05:03,160 --> 00:05:05,240
Speaker 1: So you're going to see continued votes through the end

105
00:05:05,240 --> 00:05:08,040
Speaker 1: of this week and Ultimately, this BIALE is going to fail. Now.

106
00:05:08,120 --> 00:05:12,920
Speaker 1: The reason why it's important is because of the DHS shutdown. Now,

107
00:05:12,960 --> 00:05:15,160
Speaker 1: just this past weekend, I think a lot more Americans

108
00:05:15,400 --> 00:05:17,719
Speaker 1: woke up to the fact that TSA un lines are

109
00:05:17,720 --> 00:05:20,720
Speaker 1: getting worse and worse. I saw some statistics that Houston

110
00:05:20,720 --> 00:05:23,800
Speaker 1: Hobby had fifty six percent of their TSA agents outsick.

111
00:05:24,080 --> 00:05:26,480
Speaker 1: Atlant they had thirty eight percent of their TSA agents

112
00:05:26,480 --> 00:05:29,040
Speaker 1: at SICK. If you fly out of La Guardia, obviously

113
00:05:29,080 --> 00:05:30,640
Speaker 1: you know it's a ground stop today because of the

114
00:05:30,680 --> 00:05:33,919
Speaker 1: Air Canada crash, but also yesterday you may see TSA

115
00:05:34,000 --> 00:05:37,080
Speaker 1: lines going outside into the parking lot. This is the

116
00:05:37,120 --> 00:05:39,920
Speaker 1: point in which Americans are waking up to the TSA

117
00:05:40,040 --> 00:05:41,320
Speaker 1: and the DHS shutdown.

118
00:05:41,720 --> 00:05:42,000
Speaker 3: Now.

119
00:05:42,200 --> 00:05:44,160
Speaker 1: I haven't been able to find any pulling on this

120
00:05:44,680 --> 00:05:47,080
Speaker 1: in terms of like who's getting to blame for this,

121
00:05:47,560 --> 00:05:50,040
Speaker 1: but generally thinking, I think that if you're Democrat, you're

122
00:05:50,040 --> 00:05:53,279
Speaker 1: blaming Republicans, if you're a Republican, you're blaming Democrats, and

123
00:05:53,360 --> 00:05:57,240
Speaker 1: if you're an independent, you're probably blaming Washington. So what's

124
00:05:57,240 --> 00:05:59,279
Speaker 1: happening at the moment is there is a group of

125
00:05:59,560 --> 00:06:02,440
Speaker 1: by party artisan senators. This is the same group that

126
00:06:02,560 --> 00:06:06,039
Speaker 1: ended the shutdown last year. From the Democratic side, it's

127
00:06:06,080 --> 00:06:09,720
Speaker 1: like a Senator Cortez Mastro from Nevada, Senator Murray, the

128
00:06:09,800 --> 00:06:12,760
Speaker 1: chief appropriator. From the dem side, Senator King, who's an

129
00:06:12,760 --> 00:06:16,680
Speaker 1: independent of caucuses with the Democrats. There are some negotiations

130
00:06:16,720 --> 00:06:20,680
Speaker 1: taking place both with Republican senators and also representatives from

131
00:06:20,680 --> 00:06:24,760
Speaker 1: the White House. Now you could see a deal come together,

132
00:06:25,360 --> 00:06:28,800
Speaker 1: but remember they're negotiating over ice tactics. They're not negotiating

133
00:06:28,800 --> 00:06:31,200
Speaker 1: over ice funding. Ice funding has already gone through the

134
00:06:31,200 --> 00:06:33,839
Speaker 1: one B Beautiful Bill. It's funded through twenty twenty nine.

135
00:06:34,320 --> 00:06:37,080
Speaker 1: There is a Senator conservative plan that's coming out from

136
00:06:37,120 --> 00:06:40,440
Speaker 1: Senator Cruz and Senator Throon even floated this with the

137
00:06:40,480 --> 00:06:43,120
Speaker 1: White House over the weekend that would say, look, why

138
00:06:43,120 --> 00:06:46,920
Speaker 1: don't we just bypass TSA and I'm sorry, bypass ICE

139
00:06:47,080 --> 00:06:49,359
Speaker 1: and bypass the Customs and Border Patrol.

140
00:06:49,720 --> 00:06:51,080
Speaker 3: Let's fund everything.

141
00:06:50,720 --> 00:06:52,960
Speaker 1: Else and then we'll deal with those other two in

142
00:06:52,960 --> 00:06:55,800
Speaker 1: a reconciliation bill. And this is where President Trump comes in.

143
00:06:56,120 --> 00:06:58,880
Speaker 1: President Trump said that he's not passing anything until the

144
00:06:58,960 --> 00:07:02,600
Speaker 1: Save America Act passes. And I think he can say that,

145
00:07:02,960 --> 00:07:04,800
Speaker 1: but I don't think he can actually follow through it.

146
00:07:04,920 --> 00:07:07,400
Speaker 1: On that, because if the Senate comes together and there

147
00:07:07,480 --> 00:07:10,040
Speaker 1: is a deal this week, they're gonna say we have

148
00:07:10,080 --> 00:07:12,600
Speaker 1: a deal. The House will most likely pass that deal,

149
00:07:12,840 --> 00:07:14,760
Speaker 1: and at that point it's up to President Trump. Are

150
00:07:14,800 --> 00:07:16,760
Speaker 1: you going to continue this or are you going to not?

151
00:07:17,240 --> 00:07:20,520
Speaker 1: I think President Trump ultimately signs this deal because at

152
00:07:20,520 --> 00:07:21,960
Speaker 1: the end of the day, there is this two week

153
00:07:22,000 --> 00:07:25,200
Speaker 1: recess that starts on Friday, and there's no bigger pressure point.

154
00:07:25,200 --> 00:07:27,160
Speaker 1: I hate to say this, but there's no bigger pressure

155
00:07:27,160 --> 00:07:29,960
Speaker 1: point than telling senators or policymakers that they can't go

156
00:07:30,040 --> 00:07:32,040
Speaker 1: home and they have to work on recess when they

157
00:07:32,080 --> 00:07:34,480
Speaker 1: already have their two week plans are already laid out now

158
00:07:34,560 --> 00:07:36,920
Speaker 1: for what it's worth, if we get into a situation

159
00:07:36,960 --> 00:07:39,480
Speaker 1: where there is no deal this week, I do anticipate

160
00:07:39,520 --> 00:07:42,360
Speaker 1: the Senate sticking around. I anticipate the House going home.

161
00:07:42,640 --> 00:07:45,200
Speaker 1: That's okay, you know, because the House is ultimately going

162
00:07:45,280 --> 00:07:47,520
Speaker 1: to just pass whatever the Senate passs. So if the

163
00:07:47,560 --> 00:07:50,000
Speaker 1: Senate comes up with a deal like say Monday next week,

164
00:07:50,360 --> 00:07:52,040
Speaker 1: House won't like it, but they are going to have

165
00:07:52,040 --> 00:07:53,800
Speaker 1: to come back and they'll pass it. So just keep

166
00:07:53,800 --> 00:07:57,560
Speaker 1: that in mind for the DHS shutdown. Let's talk a

167
00:07:57,600 --> 00:08:01,200
Speaker 1: little bit on regulatory side at the moment. First, you know,

168
00:08:01,320 --> 00:08:04,000
Speaker 1: last week we saw the Federal Reserve pass not pass,

169
00:08:04,080 --> 00:08:08,640
Speaker 1: but a release. It's Baso endgame Buzzo three endgame proposal.

170
00:08:08,920 --> 00:08:11,160
Speaker 1: Now this is the big bank capital requirements. Now, last

171
00:08:11,160 --> 00:08:14,160
Speaker 1: week I said three to seven percent increase in capital

172
00:08:14,200 --> 00:08:15,880
Speaker 1: for the Buzzo three in game, and then you get

173
00:08:15,920 --> 00:08:19,760
Speaker 1: a lot less due to the gesup surcharge. The situation

174
00:08:19,840 --> 00:08:21,960
Speaker 1: has changed just a little bit so according to the

175
00:08:22,000 --> 00:08:25,160
Speaker 1: Federal Reserve, and we're still doing our calculations. Our Nunkokuda

176
00:08:25,240 --> 00:08:27,160
Speaker 1: is a great piece that's out on the terminal right now.

177
00:08:27,640 --> 00:08:30,080
Speaker 1: But according to the Federal Reserve, the Bozo three end

178
00:08:30,080 --> 00:08:32,800
Speaker 1: game would actually increase capital requirements by about one to

179
00:08:32,840 --> 00:08:36,000
Speaker 1: eight percent, and the g SIP surcharge would decrease it

180
00:08:36,040 --> 00:08:36,640
Speaker 1: by just a.

181
00:08:37,000 --> 00:08:39,880
Speaker 3: Round four percent in dollar terms.

182
00:08:40,240 --> 00:08:44,080
Speaker 1: Taking those two inc into conjunction, for those six g SIPs,

183
00:08:44,160 --> 00:08:47,040
Speaker 1: you're looking at eighteen billion dollars in net relief. That

184
00:08:47,160 --> 00:08:50,560
Speaker 1: is much less than what we had anticipated earlier this year.

185
00:08:50,960 --> 00:08:53,120
Speaker 1: And we did get the question from some clients of okay,

186
00:08:53,160 --> 00:08:55,760
Speaker 1: well why aren't the bank stops moving on this? It

187
00:08:55,880 --> 00:08:58,800
Speaker 1: was largely priced in everybody knew this was coming, so

188
00:08:58,840 --> 00:09:01,079
Speaker 1: both of these proposals have a ninety day comment period.

189
00:09:01,080 --> 00:09:03,319
Speaker 1: I'm actually gonna be going through these proposals in greater detail.

190
00:09:03,320 --> 00:09:06,280
Speaker 1: It's about fifteen hundred pages, So that's what I'm going

191
00:09:06,320 --> 00:09:08,760
Speaker 1: to be working on this week. But again, you know,

192
00:09:08,880 --> 00:09:11,800
Speaker 1: it looks like just from a high level perspective, eighteen

193
00:09:11,840 --> 00:09:14,600
Speaker 1: billion dollars is going to be re is released, and

194
00:09:14,600 --> 00:09:17,160
Speaker 1: then when you take into account the stress testing proposals

195
00:09:17,160 --> 00:09:19,320
Speaker 1: that we've talked about on this call, you're looking at

196
00:09:19,320 --> 00:09:23,120
Speaker 1: a six percent decrease across all banks because of all

197
00:09:23,160 --> 00:09:26,319
Speaker 1: of these four or five proposals, including the enhanced Supplementary

198
00:09:26,400 --> 00:09:29,079
Speaker 1: lever t ratio. So I think all this is finalized

199
00:09:29,080 --> 00:09:31,440
Speaker 1: at the end of this year. The stress testing proposals

200
00:09:31,480 --> 00:09:33,559
Speaker 1: go much sooner, but the BOZZLE three D game, the

201
00:09:33,600 --> 00:09:36,720
Speaker 1: g sub surcharge in the Standardized Approaches proposal or finalized

202
00:09:36,760 --> 00:09:38,520
Speaker 1: at the end of this year, and then the FED

203
00:09:38,559 --> 00:09:40,760
Speaker 1: moves on to other things like regional bank relief.

204
00:09:41,000 --> 00:09:43,880
Speaker 3: So that's what we're seeing at the BUZZLE three end game.

205
00:09:44,600 --> 00:09:47,040
Speaker 1: We also put out a piece this morning talking about

206
00:09:47,080 --> 00:09:49,320
Speaker 1: what's happening at the Financial Stability Oversight Council.

207
00:09:49,360 --> 00:09:51,480
Speaker 3: There is a meeting this week of the f SOCK.

208
00:09:51,559 --> 00:09:53,800
Speaker 1: Remember this is the superbody think of like the super

209
00:09:53,800 --> 00:09:57,160
Speaker 1: friends of regulatory agencies. It's led by Treasury, but it's

210
00:09:57,200 --> 00:10:00,679
Speaker 1: the FED, the SEC, the CFTC, et cetera. If you're

211
00:10:00,679 --> 00:10:02,680
Speaker 1: in the private equity space or in the fund space

212
00:10:02,760 --> 00:10:04,600
Speaker 1: or blackrock, this is a little bit of an interest

213
00:10:04,640 --> 00:10:07,400
Speaker 1: to you because the FSOCK is the one that deals

214
00:10:07,480 --> 00:10:11,200
Speaker 1: with the systemic risk of asset managers and the systemic

215
00:10:11,320 --> 00:10:16,360
Speaker 1: risk of anything like private markets or anything to that standpoint. Now,

216
00:10:17,080 --> 00:10:20,080
Speaker 1: in twenty nineteen, there was guidance under the Trump administration

217
00:10:20,200 --> 00:10:22,240
Speaker 1: that made it more difficult for the f SoC to

218
00:10:22,280 --> 00:10:25,600
Speaker 1: go forth and deem a company or an activity to

219
00:10:25,600 --> 00:10:29,200
Speaker 1: be systemically risky. And if something is deemed systemically risky,

220
00:10:29,400 --> 00:10:31,400
Speaker 1: then the Fed can come in and say, here's new

221
00:10:31,440 --> 00:10:35,000
Speaker 1: capital requirements to safeguard against that systemic risk. So under

222
00:10:35,000 --> 00:10:37,520
Speaker 1: the Trump administration, they actually put in new guidance that

223
00:10:37,600 --> 00:10:39,480
Speaker 1: made it more difficult for the f SoC to go

224
00:10:39,559 --> 00:10:43,719
Speaker 1: in and make it systemically risky. In twenty twenty three,

225
00:10:43,840 --> 00:10:46,400
Speaker 1: the Biden error FSOC came in and said, okay, we're

226
00:10:46,400 --> 00:10:49,920
Speaker 1: going to withdraw that standard and make it easier to

227
00:10:50,000 --> 00:10:52,600
Speaker 1: deem things that are going to be systemically risky. Now

228
00:10:52,640 --> 00:10:54,640
Speaker 1: the pendulum has come back, and this week you're going

229
00:10:54,679 --> 00:10:57,320
Speaker 1: to see the FOC say we're going to take steps

230
00:10:57,320 --> 00:10:59,839
Speaker 1: to withdraw the twenty twenty three guidance, go back to

231
00:10:59,880 --> 00:11:03,520
Speaker 1: twenty nineteen. So think activities based, think of you know,

232
00:11:03,600 --> 00:11:07,199
Speaker 1: specific activities could be systemically risky. But again, I get

233
00:11:07,200 --> 00:11:09,600
Speaker 1: this question on private markets all the time. You know,

234
00:11:09,640 --> 00:11:10,880
Speaker 1: what are the regulators thinking.

235
00:11:11,120 --> 00:11:11,440
Speaker 3: They're not.

236
00:11:12,000 --> 00:11:14,920
Speaker 1: Yes, they are aware of private markets, and they're aware

237
00:11:14,960 --> 00:11:18,160
Speaker 1: of private credit, and they're aware of Jamie Diamond's statements

238
00:11:18,160 --> 00:11:21,480
Speaker 1: of cockroaches somewhere out there. But it's largely hands off.

239
00:11:21,760 --> 00:11:24,080
Speaker 1: There's really nobody looking at it all that much. So

240
00:11:24,240 --> 00:11:25,960
Speaker 1: just keep that in mind, and that's what's coming from

241
00:11:25,960 --> 00:11:28,560
Speaker 1: the f STOCK this week. We also put a little

242
00:11:28,600 --> 00:11:30,960
Speaker 1: piece of just talking about the state of play quarterly reporting.

243
00:11:30,960 --> 00:11:34,040
Speaker 1: I talked about this last week just because now out

244
00:11:34,040 --> 00:11:35,839
Speaker 1: on the terminal, which you should know is that next

245
00:11:35,880 --> 00:11:37,640
Speaker 1: month we think the SEC is going to put our

246
00:11:37,679 --> 00:11:41,320
Speaker 1: proposal that will allow companies to go to semi annual

247
00:11:41,400 --> 00:11:43,719
Speaker 1: reporting as opposed to quarterly reporting in the in the

248
00:11:43,800 --> 00:11:45,000
Speaker 1: US States.

249
00:11:45,760 --> 00:11:48,280
Speaker 3: You know, I worked with our ESG team on this.

250
00:11:48,960 --> 00:11:51,080
Speaker 1: Some of the governance analysts that we've been looking at

251
00:11:51,160 --> 00:11:53,439
Speaker 1: this is Robbie Boff and I were putting this out

252
00:11:53,640 --> 00:11:56,040
Speaker 1: and our thesis is essentially is that investors are going

253
00:11:56,080 --> 00:11:59,480
Speaker 1: to push most publicly traded companies to keep it four quarters. Look,

254
00:11:59,520 --> 00:12:02,160
Speaker 1: if you're on the you know this, you want you

255
00:12:02,160 --> 00:12:04,880
Speaker 1: know that fourth quarter, that fourth quarter reporting, you want

256
00:12:04,880 --> 00:12:08,319
Speaker 1: that data and you want investor relations to responsive to you.

257
00:12:08,679 --> 00:12:10,960
Speaker 1: But we could see a scenario where small companies and

258
00:12:11,000 --> 00:12:13,520
Speaker 1: newly publicly traded companies come in here and say, right,

259
00:12:13,760 --> 00:12:16,680
Speaker 1: we're gonna do semi annual from the get go, and

260
00:12:16,760 --> 00:12:20,680
Speaker 1: over time you could see a transition to semi annual. Now, look,

261
00:12:20,720 --> 00:12:22,720
Speaker 1: if we get into a situation where a semi annual,

262
00:12:22,760 --> 00:12:25,199
Speaker 1: I'm not thinking quarterly is going away. I do think

263
00:12:25,200 --> 00:12:26,560
Speaker 1: a lot of companies out there are going to be

264
00:12:26,559 --> 00:12:28,559
Speaker 1: forced to do what they do in the UK, for example,

265
00:12:28,559 --> 00:12:32,280
Speaker 1: in terms of releasing sales releases and revenue releases, et cetera.

266
00:12:32,800 --> 00:12:34,800
Speaker 1: But just keep that in mind as the SEC puts

267
00:12:34,800 --> 00:12:39,200
Speaker 1: out its proposal. A couple other things, Well, we saw

268
00:12:39,240 --> 00:12:42,040
Speaker 1: some statements from Senator Tillis, so we're leaving the regulatory world.

269
00:12:42,440 --> 00:12:45,480
Speaker 1: Going back to Capitol Hill, we saw Senator Tom Tillis

270
00:12:45,520 --> 00:12:49,079
Speaker 1: over the on Thursday last week say that there potentially

271
00:12:49,160 --> 00:12:51,320
Speaker 1: is an agreement on stable cooin yield when it comes

272
00:12:51,400 --> 00:12:54,959
Speaker 1: to this crypto market structure bill. Now, I'm not going

273
00:12:54,960 --> 00:12:57,360
Speaker 1: to rehash this because look, if you've attended this call,

274
00:12:57,400 --> 00:12:58,319
Speaker 1: you've you've heard.

275
00:12:58,120 --> 00:12:59,120
Speaker 3: This multiple times.

276
00:12:59,640 --> 00:13:02,439
Speaker 1: But you know banks don't want crypto platforms like coinbas

277
00:13:02,520 --> 00:13:07,920
Speaker 1: to offer reward rewards on their stable coin partnerships, if

278
00:13:07,960 --> 00:13:11,559
Speaker 1: you will, it's prohibited under the Genius Act. Where it

279
00:13:11,600 --> 00:13:14,440
Speaker 1: looks like this is all headed is again it's going

280
00:13:14,480 --> 00:13:18,520
Speaker 1: to be a prohibition on paying interest or yield on balances,

281
00:13:19,280 --> 00:13:23,280
Speaker 1: potentially not on usage. Now it's still not at the

282
00:13:23,360 --> 00:13:26,160
Speaker 1: legislative text level. It's only at the high level bullet

283
00:13:26,160 --> 00:13:27,280
Speaker 1: point level, so.

284
00:13:27,240 --> 00:13:28,120
Speaker 3: Anything can change.

285
00:13:28,120 --> 00:13:30,000
Speaker 1: And my guess is they're going to hash this out

286
00:13:30,080 --> 00:13:32,880
Speaker 1: later this week and then they won't deal with crypto

287
00:13:33,000 --> 00:13:35,640
Speaker 1: until the end of that two week recess. So a

288
00:13:35,640 --> 00:13:37,480
Speaker 1: lot of our crypto clients have asked me, when do

289
00:13:37,520 --> 00:13:39,199
Speaker 1: I think we're going to see momentum in the spell.

290
00:13:39,960 --> 00:13:42,440
Speaker 1: I think you'll see a centenate banking markup towards the

291
00:13:42,559 --> 00:13:45,760
Speaker 1: end of April, call it April twentieth, April twenty seventh,

292
00:13:45,840 --> 00:13:48,080
Speaker 1: right around there, and then if you don't get passage

293
00:13:48,120 --> 00:13:50,400
Speaker 1: on this by May, then the momentum is really going

294
00:13:50,440 --> 00:13:53,160
Speaker 1: to be struggling. Because the stable coin yield it was

295
00:13:53,200 --> 00:13:56,000
Speaker 1: the largest roadblock. There's still a couple of other roadblocks

296
00:13:56,000 --> 00:13:58,440
Speaker 1: out there, but I think they can be dealt with.

297
00:13:58,559 --> 00:14:01,200
Speaker 1: But again, it's being in the right direction for this

298
00:14:01,280 --> 00:14:04,880
Speaker 1: crypto market structure bill. So again, but we won't see

299
00:14:04,880 --> 00:14:09,200
Speaker 1: anything until after the two week recess. We're also getting

300
00:14:09,280 --> 00:14:12,280
Speaker 1: questions on a bipartisan bill that the Wall Street Journal

301
00:14:12,360 --> 00:14:14,880
Speaker 1: is reporting that's coming out in the Senate that would

302
00:14:14,920 --> 00:14:18,400
Speaker 1: ban prediction markets. For what it's worth, there's already House

303
00:14:18,440 --> 00:14:21,160
Speaker 1: bill out there that would do this. This is just

304
00:14:21,200 --> 00:14:23,200
Speaker 1: now the Senate bill, and I think because it's Senate

305
00:14:23,200 --> 00:14:25,880
Speaker 1: and it's bipartisan, it's making people a little bit more

306
00:14:25,920 --> 00:14:29,680
Speaker 1: excited about this bill. Just note bills that come this

307
00:14:30,000 --> 00:14:33,840
Speaker 1: close to the elections very rarely pass. You know, this

308
00:14:33,920 --> 00:14:38,000
Speaker 1: bill is coming from Senator Curtis from Utah, who also,

309
00:14:38,160 --> 00:14:40,000
Speaker 1: just by the way, the House bill also came from

310
00:14:40,000 --> 00:14:43,480
Speaker 1: a Utah congressman. Because Governor Cox of Utah is the

311
00:14:43,480 --> 00:14:48,520
Speaker 1: one who's spearheading a Republican called opposition to the prediction Markets.

312
00:14:48,840 --> 00:14:51,000
Speaker 1: So this sounds like a lot of the Utah delegation

313
00:14:51,080 --> 00:14:53,880
Speaker 1: coming together and supporting each other. But bills that come

314
00:14:53,880 --> 00:14:57,160
Speaker 1: out this early are this late, come to the midterms

315
00:14:57,200 --> 00:15:00,680
Speaker 1: really struggle to gain gain attraction. I'd put this in

316
00:15:00,720 --> 00:15:02,600
Speaker 1: your hip pocket and say put this in the bill

317
00:15:02,880 --> 00:15:06,680
Speaker 1: for next year, because if the CFTC doesn't tightly regulate

318
00:15:06,760 --> 00:15:10,560
Speaker 1: these markets and we begin to see Americans really losing

319
00:15:10,640 --> 00:15:13,400
Speaker 1: out in terms of prediction markets or betting markets or

320
00:15:13,880 --> 00:15:16,000
Speaker 1: you know, prop bets or anything like that in terms

321
00:15:16,080 --> 00:15:19,400
Speaker 1: of prediction markets, I could see this coming out. I'll

322
00:15:19,400 --> 00:15:21,600
Speaker 1: have more thoughts coming out on this later this week.

323
00:15:21,640 --> 00:15:24,800
Speaker 1: But again, if you're looking at this from a headline perspective,

324
00:15:24,920 --> 00:15:28,040
Speaker 1: you know because draft Kings for example, and FanDuel had.

325
00:15:27,920 --> 00:15:31,160
Speaker 3: Some reactions to this, just keep that in mind.

326
00:15:31,680 --> 00:15:33,920
Speaker 1: And then finally, the last thing is the White House

327
00:15:33,960 --> 00:15:36,800
Speaker 1: just last week released it a three page bullet point

328
00:15:37,400 --> 00:15:41,920
Speaker 1: framework on artificial intelligence. This is the White House's policy

329
00:15:42,000 --> 00:15:45,080
Speaker 1: framework for AI. Our colleague Matt Schannaum put out a

330
00:15:45,080 --> 00:15:47,600
Speaker 1: piece just this morning on this. What you need to

331
00:15:47,640 --> 00:15:50,920
Speaker 1: know is is that it's three pages You really don't

332
00:15:50,960 --> 00:15:55,960
Speaker 1: need any type of analysis to know that it's very

333
00:15:55,960 --> 00:15:58,480
Speaker 1: difficult to come buy in an election year, very difficult

334
00:15:58,520 --> 00:16:02,560
Speaker 1: to come by any type of year. You're not going

335
00:16:02,600 --> 00:16:07,400
Speaker 1: to see this really Congress playing in the Artificial Intelligence framework,

336
00:16:07,720 --> 00:16:11,640
Speaker 1: safety standards or anything like that. Maybe next year, but again,

337
00:16:12,440 --> 00:16:14,800
Speaker 1: i'll you know, maybe we'll have Matt come on later

338
00:16:14,840 --> 00:16:16,680
Speaker 1: this week to talk about it in greater detail. But

339
00:16:16,720 --> 00:16:19,600
Speaker 1: that's just our initial reaction. So with that, I'm gonna

340
00:16:19,600 --> 00:16:21,760
Speaker 1: say thank you very much, yes to the client, real quick.

341
00:16:21,880 --> 00:16:23,920
Speaker 1: This is the DHS shutdown. I apologize you may have

342
00:16:23,920 --> 00:16:26,200
Speaker 1: missed this. I think there is a decent chance they

343
00:16:26,200 --> 00:16:29,480
Speaker 1: finish this this week, you know, just because of the TSA.

344
00:16:29,960 --> 00:16:33,480
Speaker 1: The TSA stickouts are approaching thirty to fifty percent at

345
00:16:33,520 --> 00:16:37,880
Speaker 1: major market airports. President Trump just authorized ice agents to

346
00:16:37,880 --> 00:16:40,920
Speaker 1: be at the airports. According to the news reports I've seen,

347
00:16:40,960 --> 00:16:44,160
Speaker 1: they're already in Atlanta. They are not wearing masks. President

348
00:16:44,160 --> 00:16:46,440
Speaker 1: Trump just put out a truth social posts saying, you know,

349
00:16:46,480 --> 00:16:49,360
Speaker 1: don't wear masks at the airport. But you know, I

350
00:16:49,400 --> 00:16:51,760
Speaker 1: think the combination of look, at the end of the day,

351
00:16:52,160 --> 00:16:54,600
Speaker 1: there comes a point where Americans just say, is enough enough?

352
00:16:55,000 --> 00:16:58,760
Speaker 1: This past weekend was most likely it, so I wouldn't

353
00:16:58,800 --> 00:17:01,280
Speaker 1: be surprised if you saw We're not putting odds on this,

354
00:17:01,560 --> 00:17:03,320
Speaker 1: but I wouldn't be surprised if you saw a solution

355
00:17:03,440 --> 00:17:06,160
Speaker 1: later this week on this, so I'll pause there any

356
00:17:06,160 --> 00:17:09,360
Speaker 1: other questions, comments, concerns, if not, Thank you very much

357
00:17:09,359 --> 00:17:09,800
Speaker 1: for attending.

358
00:17:09,840 --> 00:17:11,520
Speaker 3: We always appreciate it and have every wonderful week and

359
00:17:11,600 --> 00:17:12,520
Speaker 3: we'll talk shit. Thank you.

360
00:17:12,880 --> 00:17:16,719
Speaker 2: Our thanks to Nathan Deed, Bloomberg Intelligence senior policy analyst,

361
00:17:16,840 --> 00:17:20,479
Speaker 2: bringing you the latest installment of his weekly Washington Policy Pulse.

362
00:17:20,880 --> 00:17:23,679
Speaker 2: For more from BI or to join this call live

363
00:17:23,880 --> 00:17:27,600
Speaker 2: each week, you can email Nathan at ndan at Bloomberg

364
00:17:27,640 --> 00:17:30,879
Speaker 2: dot net. That's n d e a n at Bloomberg

365
00:17:30,960 --> 00:17:33,600
Speaker 2: dot net and come back to the podcast later today

366
00:17:33,840 --> 00:17:35,840
Speaker 2: for the latest edition of Balance of Power