Speaker 1: This is Bloomberg day Break Weekend, our global look at
Speaker 1: the top stories in the coming week from our Daybreak
Speaker 1: anchors all around the world, and straight ahead on the
Speaker 1: program gearing up for a highly anticipated Bedrooll Reserve decision.
Speaker 1: I'm Tom Busby in New York.
Speaker 2: I'm Brian Curtis in Hong Kong. We check in with
Speaker 2: Bloomberg's Kathleen Hayes on the boj Will they or won't They?
Speaker 3: I'm Caroline Hepga in London, where we've been speaking to
Speaker 3: Nigel Fouers about the decision by coops to close his
Speaker 3: bank accounts.
Speaker 4: I'm Kaylee Lyons in Washington, where the Biden family is
Speaker 4: brison for Hunter Biden to appear in a Delaware court.
Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg Eleve,
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Speaker 1: Good day to you. I'm Tom Busby, and we begin
Speaker 1: today's program with the FEDS big policy meeting coming up
Speaker 1: this week, which Bloomberg Radio will be covering live. Now
Speaker 1: joining me now to talk about what could be a
Speaker 1: pivotal decision from the Central Bank. Bloomberg's Global Economics and
Speaker 1: Policy editor Michael mckeep well. The Federal Open Market Committee
Speaker 1: will wrap up a big two day meeting this Wednesday
Speaker 1: with a decision on interest rates and a press conference
Speaker 1: from Chairman J.
Speaker 5: Powell.
Speaker 1: What do you see happening? Do they pause again? Do
Speaker 1: they hike by how much? What is Chairman Powell expected
Speaker 1: to signal for the rest of the year.
Speaker 6: You know, they better move or there could be a
Speaker 6: lot of disappointed people on Wall Street. Futures markets are
Speaker 6: pricing in at this point a ninety five percent chance
Speaker 6: that they will raise rates, which is as good as
Speaker 6: one hundred percent given the complexities of figuring all that out,
Speaker 6: and so you can expect a rate increase twenty five
Speaker 6: basis points. Then the question becomes, what does J. Powell
Speaker 6: tell us about the future. We do not get a
Speaker 6: new set of Dot plot projections, and we don't get
Speaker 6: new economic projections, but in general economists think inflation will
Speaker 6: continue to fall for a little bit, and unemployment will
Speaker 6: hang in around the level it is. So does that
Speaker 6: mean the FED is done? They did tell us in
Speaker 6: June they thought they would go two more times, So
Speaker 6: is that second one still on the table, And if so,
Speaker 6: would it be in September at the next meeting or
Speaker 6: would they do another skip and go on to November.
Speaker 6: So the press conference is going to draw a lot
Speaker 6: of interest.
Speaker 1: Well, let's break down some of the data points that
Speaker 1: Chairman Palell and the other members of the FED are
Speaker 1: going to use to determine this decision. CPI.
Speaker 6: For June, the CPI numbers were very encouraging because they
Speaker 6: came in lower than anticipated, and a lot of categories
Speaker 6: did show some movement in the direction the FED wants,
Speaker 6: including rents, used cars, things that have been keeping the
Speaker 6: CPI higher. So if you believe that trend is going
Speaker 6: to continue, and the FED does believe that rents will
Speaker 6: continue to go down and use car prices acording to
Speaker 6: wholesalers are going to continue to go down, then that
Speaker 6: could be good news. They'll be watching the services industries
Speaker 6: to see if wage pressure is driving the service industry
Speaker 6: inflation higher, but so far in the last couple of months,
Speaker 6: it hasn't been, so the FED is on track. It
Speaker 6: just gets to the point where, because we've only got
Speaker 6: a percentage point to go on the CBI down to
Speaker 6: two percent, that it takes a little more than you
Speaker 6: each month to bring it down faster. We get very
Speaker 6: small moves and that's good news, but it isn't where
Speaker 6: they want to be.
Speaker 1: But the labor market resilient, still strong, the jobless rate
Speaker 1: last month falling down a three point six percent in June.
Speaker 1: That's got to be encouraging.
Speaker 6: Well, that's an argument that the FED has been considering
Speaker 6: for a couple of years now. They have felt, and
Speaker 6: most economists felt, that you have to drive unemployment up
Speaker 6: because historically that's what you do to bring down demand.
Speaker 6: But demand seems to be softening and inflation seems to
Speaker 6: be coming down without unemployment rising. Last month it actually
Speaker 6: went down a tick. So is this time different? It
Speaker 6: does seem that way. We had some economists saying you
Speaker 6: had to go as high as six percent. FED now
Speaker 6: thinks that you'll get to four point one percent. But
Speaker 6: is that even going to be the case. It's not
Speaker 6: going to matter to them. They'd be very happy to
Speaker 6: leave unemployment at three point six percent if inflation comes down,
Speaker 6: because that might show this is a different kind of recovery.
Speaker 1: Now, this doesn't impact the Fed's thinking too much, but
Speaker 1: certainly Wall Street and that is bank earnings have been
Speaker 1: a lot stronger than forecasts coming off that crisis in March.
Speaker 1: Everyone on Wall Street expecting the same thing. With tech
Speaker 1: earnings that are coming up.
Speaker 6: Well, you got to think that maybe the same thing
Speaker 6: will happen. The tech earnings will be a little bit
Speaker 6: better than anticipated. I was at a conference last week
Speaker 6: with some tech officials who said the business is pretty
Speaker 6: good and that the worst is over for the tech industry.
Speaker 6: There has been a lot of talk that we're still
Speaker 6: having trouble finding workers, and therefore companies are going more
Speaker 6: into automation, which should help boost that sector. And the
Speaker 6: other thing, of course, obviously, is AI artificial intelligence and
Speaker 6: what that means and how fast that is expanding.
Speaker 1: Let's turn to someone we haven't heard from it in
Speaker 1: a while, former FED chairman Ben Bernanke. Just last week
Speaker 1: he said on a webinar organized by Fidelity Investments he
Speaker 1: thinks the FED will raise rates by another twenty five
Speaker 1: basis points. This week, As you mentioned, ninety five percent
Speaker 1: of economists do. But he also said it might be
Speaker 1: the last one for the year. Now, what are your
Speaker 1: thoughts on that.
Speaker 6: Well, you'd have to parse that and whether he means
Speaker 6: they'll do something next year. But one assumes that he
Speaker 6: means that's it, that this is the end of the
Speaker 6: tightening cycle. Then the question moves on to how long
Speaker 6: does the FED leave rates high? Markets think by March
Speaker 6: or April, the Fed might be cutting rates, not because
Speaker 6: the economy is in recession, that narrative is starting to change,
Speaker 6: but because inflation is coming down, so that pushes up
Speaker 6: real rates if that happens, and they want to keep
Speaker 6: those from getting too high, So they might be cutting
Speaker 6: rates in response to a much lower inflation rate. But
Speaker 6: that's months away. We'll see if ben Berdenke's prognostication is
Speaker 6: any better than anyone else's now.
Speaker 1: In the upcoming months, there's a few things that could
Speaker 1: really impact the Fed's thinking, the markets, the general economy,
Speaker 1: and let's break down a few of these. Number one,
Speaker 1: labor strife. There are things going on right now. Since
Speaker 1: May second, we've had this writer strike, now a sag
Speaker 1: after it, But there are a few others you're watching closely.
Speaker 6: Yeah, the thing for the FED is that, yes, the
Speaker 6: data have been going in the right direction, but there is,
Speaker 6: as you mentioned, a lot that could change that, and
Speaker 6: of course one of them is the possibility of labor action. Obviously,
Speaker 6: the the actors and writers are on strike already. The
Speaker 6: Yellow truck Company Yellow Trucking is looking at a possible
Speaker 6: strike at the end of July, and that would be
Speaker 6: about one hundred thousand workers. UPS and the Teamsters are negotiating,
Speaker 6: and that's over two hundred thousand workers. So we could
Speaker 6: see some major issues out there with people being off work.
Speaker 6: And if you're off work and you're being paid on
Speaker 6: a strike fund, you're getting less money and so you're
Speaker 6: spending may go down. Now, the FED would look past
Speaker 6: that initially to see if these things get settled quickly,
Speaker 6: and if they do, it really isn't going to have
Speaker 6: much of an impact. But if those things drag on,
Speaker 6: then you could see major problems. Not to mention that
Speaker 6: bad enough that Yellow Trucking might be down, but if
Speaker 6: UPS stops delivering packages, that slows the whole economy because
Speaker 6: so much of it is intermediate good that gets then
Speaker 6: put into other goods, and so you could have a
Speaker 6: real roadblock. I guess we go back to this supply
Speaker 6: chain problems that we've been worried about for years. Those
Speaker 6: come back and the economy takes a hit.
Speaker 1: Well, another thing they come back is food inflation after
Speaker 1: Russia broke a grain export agreement, which is obviously already
Speaker 1: having an impact not so much here in the US,
Speaker 1: but in Africa, in the Middle East, in Europe, and
Speaker 1: that could really burge in into something really awful.
Speaker 6: Yeah, that's a little bit longer term because and let's
Speaker 6: say we've got good grain supplies. It's gonna be a
Speaker 6: good harvest year in the Western Hemisphere, and so the
Speaker 6: grain's going to be out there, be a little more
Speaker 6: expensive because it has to travel longer distances. But next
Speaker 6: year you run into a problem. And so the FED
Speaker 6: can't go to sleep on this and say, well, inflation
Speaker 6: is going to go away. When this is lurking out there.
Speaker 6: They can't do anything about food inflation, but it does
Speaker 6: influence psychology, and if you're cutting back on spending because
Speaker 6: you're having to pay more for food, that's a problem.
Speaker 6: The other issue that comes out of the war is
Speaker 6: also energy. Energy prices. What's OPEC and OPEC plus which
Speaker 6: includes Russia going to do? Are they going to keep
Speaker 6: cutting rates? So I mean keep raising prices cutting I'm
Speaker 6: thinking FED keep raising prices so they can make up
Speaker 6: for some of the lost revenue they've gotten to come
Speaker 6: more countries start trying to evade the embargoes on oil
Speaker 6: energy prices could be another wild card for the FED
Speaker 6: out there.
Speaker 1: And another really bump on the horizon, but maybe be
Speaker 1: more impactful for the fed's next meeting in September. But
Speaker 1: the resumption of federal student loan payments.
Speaker 6: That is going to be an interesting question because we
Speaker 6: have a lot of numbers, but we don't know exactly
Speaker 6: how this will play out. In September, they start collecting
Speaker 6: interest again on the loans, and in October people have
Speaker 6: to start paying. And so the question is have people
Speaker 6: been spending all this extra money on other things and
Speaker 6: that spending goes away and the money goes straight back
Speaker 6: to the student loan servicers and sort of disappears from
Speaker 6: the overall economy. There are some surveys that show a
Speaker 6: lot of people continued to make their payments even though
Speaker 6: they didn't have to. So if they did, then you
Speaker 6: won't see a huge a huge problem, but it is
Speaker 6: expected to hit a significant number of people, especially at
Speaker 6: the lower levels of income, who spend pretty much everything
Speaker 6: they have, and so that could be another problem.
Speaker 1: That was Bloomberg's Global Economics and Policy editor Michael McKee,
Speaker 1: and coming up on Bloomberg day Break weekend, decision day
Speaker 1: for the Bank of Japan also about to hit us
Speaker 1: this week. I'm Tom Busby, and this is Bloomberg. This
Speaker 1: is Bloomberg Daybreak Weekend, our global look ahead at the
Speaker 1: top stories for investors in the coming week. I'm Tom
Speaker 1: Busby in New York. As we've been reporting, investors are
Speaker 1: watching the coming week's Federal Reserve meeting. We're also watching
Speaker 1: events in Togyo very closely. And for more, let's go
Speaker 1: to Hong Kong and Bloomberg Daybreak Asia host Brian Curtis.
Speaker 2: Tom, we look forward to the upcoming meeting of the
Speaker 2: Bank of Japan with more than an ounce of anticipation.
Speaker 2: Calls abound for change in the boj's ultra loose monetary policy. However,
Speaker 2: Governor Kazua Ueitas said recently that the central Bank was
Speaker 2: continuing with easing on the premise, the premise that Japan
Speaker 2: is still some distance from achieving its two percent inflation goal.
Speaker 2: Now we set a change in that premise is needed
Speaker 2: in order to shift policy. The end weakened as the
Speaker 2: market appeared to conclude that no change is in the offing.
Speaker 2: Yet some strategists are saying that they won't rule out
Speaker 2: a change in yield curve control policy sometime soon.
Speaker 5: Well.
Speaker 2: Joining us now for some insights on all of this
Speaker 2: is Kathleen Hayes, Bloomberg's Global Economics and Policy editor. Kathleen
Speaker 2: the boj has a tradition of not liking to be
Speaker 2: pushed around to a certain degree by the media or
Speaker 2: the investor community. So it seems like people are expecting something.
Speaker 2: Does that maybe mean given that that we might see
Speaker 2: more delay, Well.
Speaker 7: People have changed their minds. It's interesting, Brian. If you
Speaker 7: look at the Bloomberg Eco team survey that they did
Speaker 7: just in these past few days, you'll see that in
Speaker 7: they do an April survey, they do a July survey.
Speaker 7: They do these surveys before the meetings. Anyway, before people
Speaker 7: were looking forty percent of them thought that there would
Speaker 7: be some kind of move of this July meeting, and
Speaker 7: now it's eighty two percent who don't see a move
Speaker 7: at this meeting. People are now looking to October, nothing
Speaker 7: in September, something in October. And if you add up
Speaker 7: all the people who see a chance of July and
Speaker 7: the people who see a chance of September and then October,
Speaker 7: you get over fifty percent. So that's where the market
Speaker 7: expectation has moved.
Speaker 2: The BOJ is a funny institution. It's unlike they're fed
Speaker 2: in that it does like to surprise markets.
Speaker 7: Why is that, Well, it's kind of old fashioned if
Speaker 7: you ask me. That's what Paul Wolker used to do.
Speaker 7: And back in the day, back when you had the
Speaker 7: worst still inflation ever in the US, he wanted to
Speaker 7: get more impact on the markets. And I expect that
Speaker 7: the BOJ has that same sense that if you want
Speaker 7: markets to react, if you want expectations to change, when
Speaker 7: you surprise people, you have a longer lasting effect potentially.
Speaker 2: Yeah, and Alan Greenspan didn't exactly tip his hand.
Speaker 7: Much, did he not, like they knew nowadays?
Speaker 2: Yeah, absolutely, So how likely is it then, do you
Speaker 2: think that we might see perhaps something like yield curve
Speaker 2: control adjusted at the next meeting.
Speaker 7: Not too likely. What I has struck me so far
Speaker 7: has become a very good communicator. He keeps saying that
Speaker 7: he just wants to be sure that inflation is stably
Speaker 7: and sustainably at two percent, and he often refers to
Speaker 7: twenty twenty two when he was back on the board
Speaker 7: of the BOJ and he dissented against a hike. They
Speaker 7: went ahead and hiked, and it turned out what was
Speaker 7: the wrong thing to do. Japan economy fell back. They
Speaker 7: had to cut raids. And I've been told there's a
Speaker 7: lot of BOJ staffers, you know, they've been there since
Speaker 7: then and they don't want to make that mistake again.
Speaker 7: And as I recall recently, former Deputy Governor Marca Tabe
Speaker 7: told me, you know, the BOJ wants to be behind
Speaker 7: the curve. They don't want to get out front because
Speaker 7: they want to make sure that they don't mess things up.
Speaker 7: And they feel that they for now they can wait.
Speaker 7: The YenS well behaved, the bond market's better behave. There's
Speaker 7: just no big pressure on them. And even though inflation
Speaker 7: is so far over target, and even though they'll probably
Speaker 7: boost their inflation forecast at the next meeting to just
Speaker 7: two point three per perhaps is what our survey said.
Speaker 7: They don't feel in a hurry to move.
Speaker 2: It's an interesting environment. Policy makers clearly think that the
Speaker 2: current levels of inflation are not sticky, and we've seen
Speaker 2: a lot of sticky inflation everywhere around the world, but
Speaker 2: the policymakers in Japan think that they will receive One
Speaker 2: of the main reasons that they think inflation will fall back.
Speaker 7: Well, one of the things they're watching very closely is
Speaker 7: the global economy. And in fact, another thing I was
Speaker 7: recently told we should be watching for is a change
Speaker 7: in the GDP outlook to less growth next year. And
Speaker 7: look what's happening in China, right, I mean, they're a
Speaker 7: big driver in the Asian economy. Overall, US economy holding
Speaker 7: up pretty well, but if the FED keeps hiking, what
Speaker 7: does that mean for demand for Japanese exports. I think
Speaker 7: that's a factor. The wage increases this past year were
Speaker 7: pretty good, and in terms of there's the summer bonuses
Speaker 7: which would start going out now, which apparently are still
Speaker 7: expect to be pretty good. But there's just that chance
Speaker 7: that you know that something will happen that it isn't
Speaker 7: that inflation they're going to have deflation. It's just not
Speaker 7: that they're going to have inflation staying so far above
Speaker 7: two percent on the core right now. I believe it's
Speaker 7: at like three point two to three point three percent
Speaker 7: year over there. That takes out fresh food prices. But
Speaker 7: they I think they still see not that they're so vulnerable,
Speaker 7: but the global economy is vulnerable, and that's something that
Speaker 7: keep an eye on.
Speaker 2: So obviously there's a lot of debate about growth, global growth,
Speaker 2: US growth. If we don't get a recession, if we
Speaker 2: actually have a little bit stronger growth than expected, I
Speaker 2: wonder whether or not that counter is the trend of
Speaker 2: what the boj would be. You know, that inflation would
Speaker 2: fall back below the target all the way to back
Speaker 2: below two percent, which is why they would want to
Speaker 2: keep the loose policy. How does it look for growth
Speaker 2: in Japan at the moment.
Speaker 7: Well, I think there's some there's some clouds over manufacturing.
Speaker 7: I think investments held up reason well, but that's something
Speaker 7: else they're looking at. Consumption spend holding up reasonably well.
Speaker 7: There's no big red flag, and again it's it's it
Speaker 7: remains to be seen, and what if China does finally
Speaker 7: take some more steps what if they bring back confidence
Speaker 7: in their domestic economy to get their their internal demand
Speaker 7: growing again. There's a lot of ifs there and what
Speaker 7: could happen. Just to speak about the FED for a minute,
Speaker 7: we spoke in the last couple of days with Rob Kaplan,
Speaker 7: former Dallas FED president, and his point is that what
Speaker 7: we're seeing in the US economy in this all these
Speaker 7: are Fed raid hikes in inflation coming down but not
Speaker 7: down enough. Potentially, all the fiscal stimulus, all the fiscal
Speaker 7: stimulus starting in you know, twenty twenty one, that's putting
Speaker 7: it's that's still flooding through the economy, and that's one
Speaker 7: reason why services are strong and why we see services inflation.
Speaker 7: So that could be, yes, a welcome sign for the
Speaker 7: boj because.
Speaker 2: It's really it's really interesting when you look at it
Speaker 2: in the US and think of the long and variable
Speaker 2: lag of fiscal policy matched up against the long and
Speaker 2: variable lag of FED interest rate hikes.
Speaker 7: Well, and then what you have to figure out if
Speaker 7: then you it isn't just the lag from the past,
Speaker 7: If you're still pouring money into the economy, if the
Speaker 7: federal government's doing that, out in that lag is going
Speaker 7: to get out even further right, it's going to continue
Speaker 7: to continue to continue. But even so people are figuring
Speaker 7: what to maybe three hikes. I think people figure it'd
Speaker 7: be a bit much for the Fed at this point
Speaker 7: and for getting back to the BOJ. They have also
Speaker 7: made it clear that if they do a tweak in
Speaker 7: yield curve control, they will still be easy on monetary policy,
Speaker 7: because they will not anytime soon be actually taking that
Speaker 7: negative rate, the key rate at the short end, and
Speaker 7: pushing it up to zero or higher.
Speaker 2: How closely aligned is the Keisha to administration with the BOJ.
Speaker 7: Seems it seems that there is a pretty good alignment
Speaker 7: right now, And of course that's the Keisha administration probably
Speaker 7: doesn't isn't looking forward to seeing any kind of reduction
Speaker 7: in monetary stimulus. Number one, because they do want to
Speaker 7: keep the economy growing, but also because they don't want
Speaker 7: to see yields rising. They've got a big debt to finance.
Speaker 7: They're going to be doubling what their defense spending this year.
Speaker 7: They don't want to have to raise taxes, so right now,
Speaker 7: I don't think that's why I don't really think there's
Speaker 7: any inch of the BOJ that's saying oh, we have
Speaker 7: to keep rates low to help the government finance its debt.
Speaker 7: At the same time, they probably realized that it's a
Speaker 7: nice spot to be in. You don't need to raise rates,
Speaker 7: you don't need to get in the government's way. So
Speaker 7: everybody's everybody's on the same page right now.
Speaker 2: Kathleen, thanks so much for your insights. Really appreciate it.
Speaker 2: Kathleen Hayes, Bloomberg Global Economics and Policy Editor. I'm Brian Curtis.
Speaker 2: You can catch Doug Krisner and me every weekday for
Speaker 2: Bloomberg day Break Gays at the beginning at six am
Speaker 2: in Hong Kong and six pm on Wall Street.
Speaker 1: Tom, thank you, Brian. And coming up on Bloomberg day
Speaker 1: Break weekend, we go to the UK and what's happening
Speaker 1: behind the scenes with an eyebrow raising story unfolding in
Speaker 1: the banking industry there right now. I'm Tom Busby, and
Speaker 1: this is.
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Speaker 5: in Bloomberg Radio dot com. This is Bloomberg Daybreak weekend.
Speaker 1: I'm Tom Busby in New York with your global look
Speaker 1: ahead at the top stories for investors in the coming week.
Speaker 1: Nat West will report second quarter earnings next week in
Speaker 1: the UK after two quarters in which the bank missed
Speaker 1: on the key metric of net interest income. But the
Speaker 1: bank and its CEO, Alison Rose, are also under scrutiny
Speaker 1: for a very different issue, the closure the bank account
Speaker 1: of Brexit advocate Nigel Farage by Coots. That's a unit
Speaker 1: of Newest. Let's head over to our London bureau now
Speaker 1: and Bloomberg Daybreak anchor Caroline Hepgar.
Speaker 3: The former leader of the UK Independence and Brexit Party,
Speaker 3: Nigel Farage, has called for a parliamentary inquiry into why
Speaker 3: Coots closed his bank account last month. So the pro
Speaker 3: exit politician, speaking of Bloomberg Radio, says that the internal
Speaker 3: documents from the bank, a unit of nat West, show
Speaker 3: that his account was closed because of his views. Farage
Speaker 3: published a forty page report from Couts is not limited
Speaker 3: to Farage's financial position. It also includes analysis of his
Speaker 3: public comments and media coverage. And I'm sure you know,
Speaker 3: but this issue has created a media storm which has
Speaker 3: drawn in the Prime Minister Johiny Now in studio as
Speaker 3: Bloomberg's finance reporter Will Shaw, We've been tracking this story
Speaker 3: and we interviewed Nigel Farage together. How did first of
Speaker 3: all this route actually all start.
Speaker 8: So a few weeks ago, Coots, which is a banker
Speaker 8: to the wealthy, including the royal family, closed down his
Speaker 8: bank account. Now, at the time, people familiar with that
Speaker 8: decision indicated that that was because he hadn't deposited enough
Speaker 8: money with the firm. Similar stories round in the BBC
Speaker 8: and the Financial Times. Nigel Farage, however, had put in
Speaker 8: a subject access request to KUTS, asking documents that would
Speaker 8: indicate why the decision was made. Now, these documents appear
Speaker 8: to suggest that they considered his political views and made
Speaker 8: an assessment that his values didn't match to Kotz's wider
Speaker 8: commitment to inclusion.
Speaker 3: Well, you and I spoke to the politician and broadcaster
Speaker 3: Nigel Farag, so I want us to listen to that
Speaker 3: extensive interview.
Speaker 9: Well, it's pretty clear, isn't it that when that decision
Speaker 9: was taken it was because I do not.
Speaker 5: Fit with their agenda.
Speaker 9: I do not fit with their policies apparently of diversity
Speaker 9: and inclusion. I do not represent their values. I am
Speaker 9: a very very bad person because I happen to hold
Speaker 9: views which are legal and our majority views in the
Speaker 9: country that the upper class, upper middle class types than
Speaker 9: habit coots don't share. So it's pretty clear if you
Speaker 9: look at the seventeenth of November, it's pretty night that
Speaker 9: decision was made.
Speaker 3: Nigel. Have they lied then, They've.
Speaker 9: Lied about the They've lied about the initial reason for
Speaker 9: closing the account. Yes, I mean what they would say
Speaker 9: in their defense is that since November twenty twenty two
Speaker 9: there was a big draw down on the account, a
Speaker 9: temporary draw down on the account, but it's now back
Speaker 9: up to the levels that they themselves described as commercially viable.
Speaker 9: So look, you know they've been absolutely dishonest about this
Speaker 9: all the way through.
Speaker 8: In this document it says that at one point says,
Speaker 8: it's clear that you project cenophobic, chauvinistic and racist views,
Speaker 8: although you've done it within the law, and there's also
Speaker 8: they also say there's a perception of you as a
Speaker 8: disingenuous grifter. Do you have any plans to sue the bank?
Speaker 8: Or is it your view that anyone NatWest or cootsort
Speaker 8: to resign over this?
Speaker 9: It is bile, it is poison, It is written with venom.
Speaker 9: It is prejudiced in a most extraordinary way that only
Speaker 9: the upper middle classes who live in central London postcodes
Speaker 9: could possibly do. And I think this is why airing
Speaker 9: it in public is causing them such a panic.
Speaker 8: Look should should someone?
Speaker 5: Do you?
Speaker 8: Do you think that someone ought to resign over it?
Speaker 8: And if so, who don't.
Speaker 9: Want to think? I don't want to think should happen?
Speaker 9: I think the bosses of the RBS group should appear
Speaker 9: before a parliamentary committee to explain why they now make
Speaker 9: political and moral judgments on customers of THEIRS who meet
Speaker 9: their financial requirements and who give it opinions that are
Speaker 9: entirely within the law and our majority views in this country.
Speaker 3: In terms of the timing. Then that was the other
Speaker 3: question I was going to ask you. Obviously, you were
Speaker 3: leader of u KIT between two thousand and six two
Speaker 3: thousand and nine Brexit party leader twenty ten to twenty sixteen.
Speaker 3: Why do you think the bank made the decision now?
Speaker 9: I think it's the whole RBS group. I think that
Speaker 9: the boss of the group now, Alison Rose, has taken
Speaker 9: Coots and taken nat West into territory that I think
Speaker 9: is highly political. I think it's been a shift in
Speaker 9: the way these banks view the world and view their customers.
Speaker 9: And that is my best guess as to the timing
Speaker 9: of it. There's nothing I've said or done there's any
Speaker 9: different to what I've said and done for the previous
Speaker 9: twenty years.
Speaker 8: Bloomberg last year wrote about the performance of an investment
Speaker 8: advice service that you were promoting, and if people had
Speaker 8: followed that advice, they would have lost quite a bit
Speaker 8: of money.
Speaker 9: The performance was they'd have been in gold and in
Speaker 9: sterling terms, gold's been at all time highs. And if
Speaker 9: you want to talk to me about anything else you
Speaker 9: can do. What the hell you're like, I'm not interested
Speaker 9: or I'm.
Speaker 3: In terms of Alison Rose, you think that she has
Speaker 3: questions to answer personally for this situation.
Speaker 9: I think she's going to be questioned by I think
Speaker 9: mainstream media as we speak are asking those questions you know,
Speaker 9: what have you done? What have you done with this
Speaker 9: banking group? What direction are you taking it in? Aren't
Speaker 9: you beginning to behave to behave a bit more like
Speaker 9: a political organization than a bank. That is that a
Speaker 9: bank group that is forty percent owned by the taxpayer.
Speaker 9: So yeah, look, I just hope by coming out in public,
Speaker 9: I sponsor a very very big debate about what banks
Speaker 9: are for. And ultimately, ultimately what I want is for
Speaker 9: everybody to have the right to a bank account, the
Speaker 9: right to their own business account. This used to exist
Speaker 9: in our country before the privatization of the post office.
Speaker 9: It still exists in comparable countries like France and Germany.
Speaker 9: And I think this is a very very important and
Speaker 9: fundamental issue because as we move toward more and more
Speaker 9: digitized society, whether we like it or not, without a
Speaker 9: bank account, you simply can't exist. I mean, you've virtually
Speaker 9: become a non person.
Speaker 3: So that was the politician and broadcaster Nigel Farage talking
Speaker 3: about the contents of that report. Why Coots made the decision. Now,
Speaker 3: in response to Farage's comments, a spokesperson for Coots has
Speaker 3: given us this statement. It's being read here in full
Speaker 3: by Ablinberg journalist.
Speaker 10: We recognize the substantial interest in this case. We cannot
Speaker 10: comment on the detail given our customer confidentiality obligations. However,
Speaker 10: it is not Kotz's policy to close customer accounts solely
Speaker 10: on the basis of legally held political and personal views.
Speaker 10: Decisions to close an account are not taken lightly and
Speaker 10: involve a number of factors, including commercial viability, reputational considerations,
Speaker 10: and legal and regulatory requirements. We recognize the critical importance
Speaker 10: of access to banking. When it became clear that our
Speaker 10: client was unable to secure banking facilities elsewhere, and as
Speaker 10: he has confirmed publicly, he was offered alternative banking facilities
Speaker 10: with that West that offer stands. We understand the public
Speaker 10: concern that the process for ending a customer relationship and
Speaker 10: how that is communicated are not sufficiently transparent. We welcome
Speaker 10: the anticipated HM Treasury recommendations in this area, alongside the
Speaker 10: ask to prioritize the review of the regulatory rules related
Speaker 10: to politically exposed persons. We look forward to working with
Speaker 10: the government, the regulator, and the wider industry to ensure
Speaker 10: that universal access to banking is maintained.
Speaker 3: Okay, so that is the Cootes response. Then to Nigel
Speaker 3: Farage's comments there in full, Bluebig's finance reporter Will Shaw
Speaker 3: is still with me, just really go through this story.
Speaker 3: How significant an issue actually is this idea of closing
Speaker 3: bank accounts for customers.
Speaker 8: I think it would be easy to say, oh, this
Speaker 8: is just Nigel Farage, this is just something that affects
Speaker 8: one person. He obviously he has a very unique political
Speaker 8: standing in UK life. Despite his sort of class war rhetoric.
Speaker 8: He's for a wealthy background. He's a former trader until
Speaker 8: very recently he even had an account with coots. However,
Speaker 8: like there is concern that this might well set a
Speaker 8: wider precedent. As you heard in warning there, there are
Speaker 8: lots of people that share Nigel Farage's views, as he
Speaker 8: would be he would be quick to point out, and
Speaker 8: as the Brexit vote demonstrated in twenty sixteen, so he
Speaker 8: would argue that if he can be targeted on his
Speaker 8: political values, all kinds of people can be targeted in
Speaker 8: the same way.
Speaker 3: So that was Willshaw and I speaking to Nigel Farage.
Speaker 3: My thanks to Bloomberg Finance report at Will Shaw. I'm
Speaker 3: Calline Hepge here in London you can catch us every
Speaker 3: weekday morning for boom Big day Break here at beginning
Speaker 3: at six am in London. That's one am on Wall Street.
Speaker 1: Tom, Thank you, Caroline. And coming up here on Bloomberg
Speaker 1: day Break Weekend, Hunter Biden and the challenges Democrats may
Speaker 1: face on that front. I'm Tom Busby, and this is Bloomberg.
Speaker 1: This is Bloomberg day Break Weekend, our global look ahead
Speaker 1: at the top stories for investors in the coming week.
Speaker 1: I'm Tom Busby in New York. Hunter Biden facing a
Speaker 1: court date in the coming week, and for more, Let's
Speaker 1: head to our Bloomberg ninety nine one newsroom in Washington
Speaker 1: and Bloomberg Sound On. Co host Kaylee Lines.
Speaker 4: That's right, Tom. This coming Wednesday, July twenty sixth, Hunter
Speaker 4: Biden is expected to formally plead guilty in a Delaware
Speaker 4: court to two misdemeanor tax charges and in theory avoid
Speaker 4: prosecution on a separate gun related charge. The judge Mary
Speaker 4: Ellen nor aka, a Trump APPOINTEEPS still has to sign
Speaker 4: off on the Plea deal that we first learned about
Speaker 4: last month, a deal that has drawn the ire of
Speaker 4: many Republicans. It's a political firestorm, to say the least
Speaker 4: joining me now to discuss this is Wendy Benjaminson, our
Speaker 4: Washington senior editor. So Wendy, what exactly do we expect
Speaker 4: to go down in court this coming week? Is this
Speaker 4: going to be pretty steamless?
Speaker 11: I think that court appearance will be yes, Killy, you know,
Speaker 11: pretty straightforward. It's what's happening in the courtroom of the
Speaker 11: House of Representatives, where it is far less seamless, and
Speaker 11: on the twenty twenty four campaign trail. But in Delaware
Speaker 11: he's going to plead guilty to gun and tax charges.
Speaker 11: He already has made a deal with prosecutors, so there
Speaker 11: should be no surprises there whatsoever, except the spectacle of
Speaker 11: a son of the United States President President excuse me,
Speaker 11: being charged with kind of low level crime.
Speaker 4: Well, speaking of spectacles and Whndy, you just mentioned the
Speaker 4: House of Representatives. Just this past week, Oversight Committee had
Speaker 4: a hearing with two irs whistleblowers who talked about the
Speaker 4: investigation into Hunter Biden, and even members of not this
Speaker 4: committee showed up, including Houseways and Means Committee chairman Jason Smith.
Speaker 4: Here's a taste of what he had to say about this.
Speaker 12: The Department of Justice engaged in a campaign to delay, divulge,
Speaker 12: and deny that investigation. They delayed investigators for years, leading
Speaker 12: to the expiration of the Statute of limitations for many
Speaker 12: of the crimes involved.
Speaker 4: So, Wendy, it speaks to just how political this is
Speaker 4: and how conservatives see this as another example of a
Speaker 4: two tier justice system where the president and his family
Speaker 4: are being treated differently than say, the former president.
Speaker 11: Well exactly, kay, this is you know, this sort of
Speaker 11: all goes to the taste of what the campaign is
Speaker 11: going to be like through next year. The thing is
Speaker 11: that the House Republicans are sort of on a revenge
Speaker 11: tour after the Trump Russia investigation, which consumed the first
Speaker 11: part of Trump's presidency while he was doing his own
Speaker 11: you know, sort of unusual actions as president, and then
Speaker 11: this Trump Russian investigation which turned out to be really nothing,
Speaker 11: you know, in what Republicans are mad at and what
Speaker 11: is driving them to pretty much do the same thing
Speaker 11: with Hunter Biden. There is a circumstantial case for what
Speaker 11: the Houseways and Means Chairman there said, the Justice Department
Speaker 11: did let the statute of limitations expire. What we don't
Speaker 11: have is motive. What we don't have is whether this
Speaker 11: is just bureaucracy speed, you know, the flowness of bureaucracy,
Speaker 11: whether it was incompetence or whether as Republicans seemed to
Speaker 11: firmly believe, this was a political operation.
Speaker 4: And given that we're talking about the president's son, it's
Speaker 4: worth pointing out, Wendy, that he hasn't had that much
Speaker 4: to say on this, the President himself, just that he
Speaker 4: loves his son, that kind of thing, very little comment.
Speaker 4: How big of a headache is this for him?
Speaker 11: It's a pretty big headache because every time, you know,
Speaker 11: I'm not sure it's pretty big headache, because every time
Speaker 11: he wants to talk about you know, bid nomics his
Speaker 11: coined phrase for you know, his economic policies, he wants
Speaker 11: to talk about that, he wants to talk about his record,
Speaker 11: and the Republicans respond with Biden crime family.
Speaker 4: Definitely something that is going to be difficult for President
Speaker 4: Biden to escape. But also Biden seeking re election in
Speaker 4: twenty twenty four, I would imagine if this narrative is
Speaker 4: going to feature pretty prominently in campaigns against him. Wendy
Speaker 4: Benjamins in Washington, Senior Editor, thank you so much, and Tom,
Speaker 4: we'll send it back to you.
Speaker 1: Thank you, Kaylee. That was Bloomberg's sound on co host
Speaker 1: Kaylee Lines, reporting from our Bloomberg ninety nine one newsroom
Speaker 1: in Washington. And you can hear sound on weekdays one
Speaker 1: to three pm on Bloomberg Radio. And that does it
Speaker 1: for this edition of Bloomberg Daybreak Weekend. Join us again
Speaker 1: Monday morning at five am Wall Street Time for the
Speaker 1: latest on markets overseas and the news you need to
Speaker 1: start your day. I'm Tom Buzzby. Stay with us. Top
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