Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
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Speaker 1: of the Supreme Court's decision to overturn Roe v. Wade,
Speaker 1: wiping out the constitutional right to abortion. Earlier in the afternoon,
Speaker 1: President Joe Biden weighed in. Check out what he had
Speaker 1: to say. It's a realization of an extreme ideology and
Speaker 1: a tragic error by the Supreme Court. In my view,
Speaker 1: the Court has done what has never done before, expressly
Speaker 1: takeaway a constantial right. It is so fundamental, so many
Speaker 1: Americans that have already been recognized. That was President Joe
Speaker 1: Biden with his initial response at least to the Roe v.
Speaker 1: Wade ruling today or the ruling overturning Roe v. Wade
Speaker 1: joining us our Bloomberg in Actor Broker Studios, Jim Grasso,
Speaker 1: Bloomberg News legal analyst. She and I spent most of
Speaker 1: the morning together today talking about this story, and I
Speaker 1: know since that time she has literally been boring over
Speaker 1: uh this uh statement and the case. What's new? Well
Speaker 1: what I this morning we were talking about, you know,
Speaker 1: the repercussions of this decision and what it might mean
Speaker 1: for contraception and gain marriage and all these decisions based
Speaker 1: on privacy, and the dissent predicted that quote, no one
Speaker 1: should be confident that this majority is done with its work.
Speaker 1: And Justice Thomas in his concurrence, he actually said we
Speaker 1: should reconsider all of the Court's substantive due process precedents,
Speaker 1: including Griswold that's privacy lawrence, that's marriage, and oh Berger Fell,
Speaker 1: which is same sex marriage. So he's inviting people to
Speaker 1: challenge that. So people who say let's not panic read
Speaker 1: that opinion. So you're saying, you were saying that Justice
Speaker 1: Clarence Thomas in the text today is essentially inviting cases
Speaker 1: to overturn gay marriage to overturn the right to be
Speaker 1: in the same sex relationship. Yes, and he has succeeded.
Speaker 1: He has been saying that people should challenge the Second Amendment,
Speaker 1: that the Second Amendment was uh not, you know, was
Speaker 1: a secondary people considered a secondary constitutional right. It wasn't
Speaker 1: like on the same level as the First Amendment, etcetera.
Speaker 1: And he and he won with that one yesterday. So
Speaker 1: you know, I mean, so anything in the there's really
Speaker 1: nothing surprising and how the vote went down, is that right?
Speaker 1: I mean, there's no, there's nothing surprising because we got
Speaker 1: that draft and do we know anything more about that
Speaker 1: where that may have No, we don't know anything about that.
Speaker 1: And that's sort of what's puzzling to me, is that.
Speaker 1: Now my opinion, this is just my opinion. No basis
Speaker 1: in fact for this. But we know it is true
Speaker 1: that the Justice Chief Justice decided that the Marshal the
Speaker 1: Supreme Court Martial would do the investigation instead of, for example,
Speaker 1: the FBI. That lets them have control over what the
Speaker 1: marshal finds. They may know at this point who leaked that,
Speaker 1: they may not tell us. Why does that matter so much? Well,
Speaker 1: it matters to the court because after that leak. Justice
Speaker 1: Clarence Thomas said something to the effect of, I'm looking
Speaker 1: over my shoulder now there's has destroyed the confidence and
Speaker 1: trust on the Court, and it's something that they want
Speaker 1: to find out so that doesn't happen again. It's interesting
Speaker 1: that you mentioned the confidence and trust of the Court
Speaker 1: because Susan Collins, Senator Susan Collins, uh, you know, voted
Speaker 1: to confirm uh, Kavanaugh and Gore such and earlier today
Speaker 1: she put out a statement that said, this decision is
Speaker 1: inconsistent with what Justices Gore such in Kavanaugh said in
Speaker 1: their testimony and their meetings with me, where they both
Speaker 1: were insistent on the importance of supporting longstanding precedents that
Speaker 1: the country has relied upon. Well, it's not only inconsistent
Speaker 1: with what they told her. Also, Joe Manchin said something
Speaker 1: similar Senator Joe Mansion. But all the Supreme Court conservative
Speaker 1: Supreme Court justices in their testimony, because I've gone back,
Speaker 1: had said that row is an established right, even Justice Alito,
Speaker 1: so he said that then, and Kavanaugh was really emphatic
Speaker 1: about it. It's an established right, It's been established. So,
Speaker 1: I mean, did their minds change when they were these
Speaker 1: arguments for your oral arguments, or would it be fair
Speaker 1: to say that they perhaps weren't necessarily being truthful in
Speaker 1: their testimony. M I don't want to say they weren't
Speaker 1: being truthful in their testimony. Perhaps the way they felt,
Speaker 1: the way they worded it. I mean, I have to
Speaker 1: say that Amy Coney Barrett, just as Amy Coney Bartt was,
Speaker 1: was more forthcoming in her testimony. She said it's not
Speaker 1: a super right whatever. She called it a super precedent.
Speaker 1: So she said it's a precedent, but not a super precedent.
Speaker 1: She said that only super precedents can be overturned. It's
Speaker 1: not a thing. It wasn't wasn't a thing at Harvard.
Speaker 1: I don't know if maybe where she goes she went
Speaker 1: to Notre Dame. So all right, uh Noah Feldenberg opinion
Speaker 1: comp So I'm gonna call out and refer to this
Speaker 1: note probably a couple of times today out with a
Speaker 1: column today, and the title just grabbed me. The headline
Speaker 1: abortion ruling is suicidal for the Supreme Court. That strong
Speaker 1: language there, it's strong language. But we have a Supreme
Speaker 1: Court that the super majority on the Court now is
Speaker 1: out of step with the majority of Americans, because in
Speaker 1: every single time kind of goes to how you interpret
Speaker 1: the Constitution. Is it just a concrete thing that doesn't change,
Speaker 1: or does it expand and contract with society and evolved
Speaker 1: and things like that. When Justice um Scalia was alive,
Speaker 1: he and Justice Brier would do these um sort of
Speaker 1: dueling constitution lectures, and Justice Scalia would talk about originalism
Speaker 1: and textualism, and Justice Brier would talk about the living Constitution.
Speaker 1: The problem now is you have six people who believe
Speaker 1: in textualism and some who are real adherence to textualism.
Speaker 1: So that's how we got, I believe, to these two decisions,
Speaker 1: which yesterday they went back to the seventeen hundreds and
Speaker 1: eighteen hundreds. Today's decision they went back to the fifteen
Speaker 1: hundred sixteen hundred. I mean, it's it's it's starring for
Speaker 1: someone to think that, you know, I don't. I think
Speaker 1: the founders were very wise, But how could the founders
Speaker 1: anticipate the kind of world we have today? I mean,
Speaker 1: look with the Founders included in the Constitution about slavery,
Speaker 1: and then you have to look no further than the
Speaker 1: fourteenth Amendment to understand that that document was something that
Speaker 1: has been living and changing. That's why this decision today
Speaker 1: is so shaking. It so it's it's sort of put
Speaker 1: you off balance because you know what about precedent? Now,
Speaker 1: does that mean that there's no They're not going to
Speaker 1: rely on precedent anymore. It's very scary in a way. Well,
Speaker 1: we'll certainly keep turning to you. That's June Grasso. She's
Speaker 1: Bloomberg News Legal analyst, also the host of Bloomberg Law
Speaker 1: weeknights at ten pm Wall Street Time on the Bloomberg
Speaker 1: Radio with us in the Bloomberg Interactive Broker's Studio. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovic on Bloomberg Radio. Well, he's a
Speaker 1: Nobel Laureate, a columnist for The New York Times, and
Speaker 1: the Distinguished Professor of Economics at the City University of
Speaker 1: New York Graduate Center. Also the author or editor of
Speaker 1: more than two dozen books, including the Return of Depression,
Speaker 1: Economics and Arguing with Zombies, among others. Paul Krugman, Welcome
Speaker 1: back to Bloomberg Business Week Radio. It's it's great to
Speaker 1: have you with us. How are you I I'm good.
Speaker 1: How are you. We're doing okay? I want to start
Speaker 1: with the Supreme Court decision. I saw you were tweeting
Speaker 1: about it. We learned today, of course, that the Supreme
Speaker 1: Court overturned at Roe v. Wade, wiping out the constitutional
Speaker 1: right to an abortion. Now we've already seen companies like
Speaker 1: JP Morgan and others come out today and say that
Speaker 1: they're gonna pay for employees to travel to other states
Speaker 1: if needed to obtain a legal abortion. I'm wondering about
Speaker 1: the economic effects of this. Do you see any ripple
Speaker 1: effect in the U s economy as a result of
Speaker 1: this decision? Well, it probably not in terms of the
Speaker 1: macro numbers. I think there may be some regional aspects.
Speaker 1: I mean it too. One of the big driving forces
Speaker 1: of change in the US economy over the past couple
Speaker 1: of decades has been this um kind of unequalizing as
Speaker 1: the knowledge economy has wanted to gravitate towards big cities
Speaker 1: with highly educated populations. Um. And now there's gonna be
Speaker 1: additional factor, which is um if companies want the kind
Speaker 1: of workers that they can get in those locations, are
Speaker 1: they going to want to locate in the states that
Speaker 1: are going to be have really overregressive social policies, the
Speaker 1: kinds of social policies that that they're the workers they
Speaker 1: want really don't like. So you really have to think,
Speaker 1: you know, how, how does Texas or Florida fair in
Speaker 1: this kind of competition for business and in this new
Speaker 1: legal environment. Florida seems to be doing pretty well. We
Speaker 1: saw citadel Um move down there and lots of other companies.
Speaker 1: Means to see how that plays out of our time.
Speaker 1: So Paul, just wondering here. I think you know, as
Speaker 1: Tim and I speak to various fund managers and uh
Speaker 1: uh C suite folks, one of the questions obviously today
Speaker 1: is this Federal Reserve. They have a balancing act. They're
Speaker 1: very tough balancing act to reign in inflation while not
Speaker 1: going too far and pushing this economy into recession. How
Speaker 1: do you think that plays out well? It's I mean,
Speaker 1: the fundamental problem is not does not actually look to
Speaker 1: me to be all that hard. It's a weird thing
Speaker 1: to say, but it's pretty clear that the US economy
Speaker 1: got overheated UH fiscal monetary policy. UM, it was misjudged.
Speaker 1: I was among the people who misjudged it. And the
Speaker 1: u s economy got overheated, and so we have most
Speaker 1: of the inflation we're seeing as special factors that will
Speaker 1: go away. Russia won't evade Ukraine every every month, but
Speaker 1: there's a good, solid extra maybe two points of inflation.
Speaker 1: Excess inflation that results from an overheated economy. Cooling off
Speaker 1: that overheating is not fundamentally a hard thing to do,
Speaker 1: and and needn't be all that hard, needn't even involve
Speaker 1: a recession, just a little bit of a an uptick
Speaker 1: in the unemployment rate. The problem is precision. I mean,
Speaker 1: the Fed is not sure however heated the economy is.
Speaker 1: It doesn't know exactly how much of our of a
Speaker 1: rate rise is needed to do this. So the chance
Speaker 1: of of you know, overdoing it, of slamming that breaks
Speaker 1: a little too hard and causing a bit of a
Speaker 1: skid is deathly there. So it's a reasonable chance that
Speaker 1: will have something that will be formally a recession. But
Speaker 1: the chance of a really you know, sort of early
Speaker 1: eighties type grueling and anti inflation flight, uh that that
Speaker 1: doesn't look serious. How deep of a recession could we have,
Speaker 1: How long have the recession? How high could unemployment go
Speaker 1: it's well, how high it could go could be over
Speaker 1: I mean, it probably has to rise over four. And
Speaker 1: it's not hard to come up with a story in
Speaker 1: which the FED bobbles the thing badly enough that it
Speaker 1: briefly goes above five. But briefly. There's nothing at all
Speaker 1: in there to suggest that we need UM an unemployment
Speaker 1: rate that's over five for any extended period of time,
Speaker 1: and the Fed will of course correct if it does
Speaker 1: look like we're heading in that direction. So just to
Speaker 1: that point, Paul Larry Sumners is out with an idea
Speaker 1: of five years five percent unemployment needed to bring down
Speaker 1: cp I. That doesn't necessarily seem to hold water to you.
Speaker 1: That looks to me like Larry is for reasons, I
Speaker 1: do not understand thinking that we need something that's like
Speaker 1: a UM sort of a half vocre that we need
Speaker 1: a massive period of excess unemployment for an extended period
Speaker 1: of time to crush inflationary expectations, so which is what
Speaker 1: we had in the early eighties, except everything every indicator
Speaker 1: I look as says that inflationary expectations are actually pretty muted.
Speaker 1: When you consider the price of gas, the fact that
Speaker 1: surveys are showing that people expect only three percent inflation
Speaker 1: over the next five years um that they break even rate,
Speaker 1: and the bond market is is well under three percent. Now,
Speaker 1: I just don't understand where the idea that we need
Speaker 1: to do something like a volcre in the economy of
Speaker 1: twenty two is coming from. But what about the idea
Speaker 1: that so much of this inflation is outside of the
Speaker 1: Fed's control, and so much is due to demand to
Speaker 1: supply constraints. Excuse me, and the FED, you know, has
Speaker 1: famously blunt tools. How can the FED get this under control?
Speaker 1: If if they can't drill for oil, if they can't
Speaker 1: refine oil, and if they can't build houses. Know what
Speaker 1: the FED does? Is it? It? It? Uh you know,
Speaker 1: give me the monetary policy to deal with the things
Speaker 1: I can and to accept the things I can't. The
Speaker 1: Montreal J. Powell, it's a it's a these these things
Speaker 1: will pass. That's the whole point. I mean, the big
Speaker 1: misjudgment that many of us made was to focus only
Speaker 1: on these things and think that they were transitory and
Speaker 1: uh um and would pass fairly quickly. But they will pass.
Speaker 1: And so what the FED needs to do is to
Speaker 1: get some kind of underlying inflation rate back to around
Speaker 1: his two percent range, and then the other stuff will eventually.
Speaker 1: I mean, gas prices are already coming down. So think
Speaker 1: about the the things that that really are the appropriate
Speaker 1: targets of monetary policy on a global perspective, Paul, I mean,
Speaker 1: you know a lot of folks have said to the
Speaker 1: US federal reserves behind the curve, but I look across
Speaker 1: the pond and I see the Bank of England. Okay,
Speaker 1: twenty five basis points. We heard from Christine Lookard at
Speaker 1: the ECB that they're thinking about raising interest rates next meeting.
Speaker 1: How do you think about the the European response and
Speaker 1: meeting from the Bank of Japan as well, relative of
Speaker 1: where the were The FED is, well, what's the funny
Speaker 1: thing about terrey policy? Is it? Um? It's it Terrey
Speaker 1: policy starts having an effect before it actually happens, right
Speaker 1: the uh So, we look at the actual amount by
Speaker 1: which the FED has raised rates, and it isn't that
Speaker 1: much yet. But if you look at the rates don't
Speaker 1: matter for the economy, mortgage rates, corporate bond grades, they're
Speaker 1: way way up. So the anticipation of future FED rate
Speaker 1: hikes has already done a lot and the peculiar thing
Speaker 1: is that although the ECB hasn't raised rates as much
Speaker 1: as the FED um the those indicators of what people
Speaker 1: are expecting are every bit as big, if anything bigger,
Speaker 1: in Europe than they are right now. De fact, the
Speaker 1: e c B is is pursuing a tighter monetary policy
Speaker 1: than the FED is, which seems to me to be crazy.
Speaker 1: I mean, the the underlying inflation rate in Europe is
Speaker 1: probably substantially lower than it is here. They didn't have
Speaker 1: an American rescue plan. They don't have the rapid wage
Speaker 1: increases that we've been seeing. So I'm my concern is
Speaker 1: not that the e CP is behind the curve. My
Speaker 1: concern is actually that the u CP is way ahead
Speaker 1: of the curve, and that that they're going to do
Speaker 1: what historically the e CP has tended to do, which
Speaker 1: is to over contract. Interesting, all right, so you mentioned
Speaker 1: kind of wages. That's kinda where I wanted to go.
Speaker 1: The The labor market has been just spectacular. We've got,
Speaker 1: you know, more job openings and we know what to
Speaker 1: do with here. Are you concerned? Do you think we
Speaker 1: will in fact see meaningful wage inflation because the five percent? Uh,
Speaker 1: you know, we we see it's just not keeping up
Speaker 1: with that headline number. Yeah. Well, the the numbers, i mean,
Speaker 1: wage rates now are are rising depends on We're having
Speaker 1: a lot of problems with adjusting because we have a
Speaker 1: changing composition, the pandemic and all of that has really
Speaker 1: screwed up with our ability to interpret the data. But
Speaker 1: I would have said that we seem to be having
Speaker 1: wage growth in the fine ish percent range, which given
Speaker 1: productivity growth, is underlying inflation, and the probably full or
Speaker 1: a bit less range, which is consistent with the other
Speaker 1: indicators we have. So basically and wage growth, if anything,
Speaker 1: seems to be slowing, even though we haven't yet had
Speaker 1: a uh significant rise. And unemployment, it looks as if
Speaker 1: the wage numbers are are coming down a bit. So
Speaker 1: wages are not They're they're not They're not an additional problem.
Speaker 1: They're basically telling the same story as everything else is.
Speaker 1: I'll have some anecdotal evidence of inflation. Did you get
Speaker 1: a raise? The best hogies in the world are hog
Speaker 1: Haven from Princeton, New Jersey, and they actually did raise
Speaker 1: the prices on the hogies there. I was down there
Speaker 1: a couple of weeks ago, and they haven't raised I
Speaker 1: mean I don't think so. So they're making up for
Speaker 1: some lost time. Paul Krug down in Printon, you're seeing
Speaker 1: some inflation down there. Oh yeah, well, I mean it
Speaker 1: looked lots of things. I mean it's uh um, I'm
Speaker 1: surprised actually give them the way that a lot of
Speaker 1: companies that behave, they didn't just make the hogies smaller,
Speaker 1: which would both be a way to conceal the price
Speaker 1: increase and probably be good for your health. Inflation, it's
Speaker 1: a real thing. I've actually noticed it happening with ice
Speaker 1: cream containers I'm buying are smaller. Uh. Paul, I'm wondering
Speaker 1: about the peak federal funds rate. If you would give
Speaker 1: a prediction as to where you think it will end up? Yeah,
Speaker 1: I mean that this is that's that's that's a that's
Speaker 1: a mystical art. And um, even the people who do
Speaker 1: it well do it badly. Uh So you know, I'd
Speaker 1: say three d paces points. What do I know? It's
Speaker 1: and the truth there's nobody knows. J Powell doesn't know.
Speaker 1: We're we really are the fittest feeling its way forward
Speaker 1: here as it should be. I mean, the at any time,
Speaker 1: any attempt to lock in a rigid path given the
Speaker 1: uncertainties about not just about the effects of policy, but
Speaker 1: even about where we are. I mean, the US economy
Speaker 1: is clearly overheated. How much overheated? I don't know. So No,
Speaker 1: I mean this is yeah, I uh, I mean I
Speaker 1: I don't have any reason to think that the No.
Speaker 1: I my guess is that the markets are probably overstating
Speaker 1: how much the FED is going to raise rates. That
Speaker 1: it's probably um, we're probably going to be seeing just
Speaker 1: as inflation went up faster than people thought it would
Speaker 1: as the economy overheated, inflation probably coming down faster than
Speaker 1: people thought it would as the economy cools off. But
Speaker 1: I can't give you a number on that. Okay, Well,
Speaker 1: last question, just in the last thirty seconds that we
Speaker 1: have with you, what's the biggest economic risk that lies
Speaker 1: ahead for the U s economy? Oh? I mean right now?
Speaker 1: I mean that's short term. Long term, there's always horrible
Speaker 1: things like climate change and more and all that, but
Speaker 1: short term it is I think the biggest risk is
Speaker 1: that the FED will overdo it, that it will slam
Speaker 1: on the brakes too hard. All right, There you have
Speaker 1: Paul Krugman, Noble Laureate economist New York Times columnist. He's
Speaker 1: Distinguished Professor of economics at the City University of New
Speaker 1: York Graduate Center. He's the author or editor of more
Speaker 1: than two dozen books. Joining us via Zoom from Princeton,
Speaker 1: New Jersey, Paul Krugman. Really appreciate your time this afternoon.
Speaker 1: Thanks so much for joining us on Bloomberg Business Week.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Our coverage
Speaker 1: of the Supreme courts overturning of Roevie Wade continues this afternoon.
Speaker 1: We're very pleased right now to be joined by Sonya Sarrio,
Speaker 1: the president of the National Organization for Women in New
Speaker 1: York City. The National Organization for Women is the largest
Speaker 1: organization of feminist grassroots activists in the United States. Sonia
Speaker 1: joining us this afternoon from the city, Sonja, Good afternoon. UM.
Speaker 1: I want to just you know this. I think this
Speaker 1: decision for a lot of people was anticipated because of
Speaker 1: the leak from May, but I'm wondering your reaction as
Speaker 1: soon as you saw just after ten clock Wall Street time,
Speaker 1: the Supreme Court's ruling. You know, I've been checking my
Speaker 1: phone over the last days, with each passing day being
Speaker 1: a little bit more nervous knowing that the decision was
Speaker 1: was imminent. Uh, And I have to say, it's still
Speaker 1: was shocking to see, and my reaction, um was certainly
Speaker 1: one that was shared by many many people. I mean,
Speaker 1: my phone, UM has just been blowing up all day
Speaker 1: with people's just shock and and fear and disappointment over
Speaker 1: the turn of events here in this country for women,
Speaker 1: you know, a right that we have had for more
Speaker 1: than fifty years to fundamentally be able to make decisions
Speaker 1: about our lives, about our bodies. UM. And it's um,
Speaker 1: it's it's moving forward. It is going to be a
Speaker 1: very very difficult situation for a lot of people, purely
Speaker 1: imminently as this change goes, it starts to take place.
Speaker 1: So that's kind of where I wanted to go, Sonya.
Speaker 1: How do you anticipate, uh, this practically unrolling over the
Speaker 1: upcoming days, weeks, and months. I know you and your
Speaker 1: organization and others have been you know, kind of thinking
Speaker 1: about this and probably planning for it to some degree.
Speaker 1: How do you think this is gonna play out? Well?
Speaker 1: You know, we have we have Texas in Oklahoma to
Speaker 1: look at for what has happened over the last eight
Speaker 1: weeks or so there. Um. You know, some of the
Speaker 1: stories that we are hearing are are just um devastating.
Speaker 1: You know, we have the the states that remain legal
Speaker 1: that are in the vicinity of those states where there
Speaker 1: may have only been one clinic to begin with are
Speaker 1: up to five and six weeks with waiting periods. So
Speaker 1: you can imagine for those women who are pregnant now
Speaker 1: and our look for care, it's uh, it's it's a panic,
Speaker 1: a panicked scramble to figure out what to do. And
Speaker 1: you know, there's one woman story that resonates so much
Speaker 1: with me to think about what so many women and
Speaker 1: families are going through. This was a Texas woman who
Speaker 1: um had to drive to Virginia to get to a
Speaker 1: clinic because that was the soon as she could get
Speaker 1: an appointment, which she needed to get one soon she
Speaker 1: had to do. So what this meant for her family
Speaker 1: was her and her husband packed up their two little kids,
Speaker 1: drove to Virginia, had the appointment, and they had to
Speaker 1: get back in the car and drive back. Because this family,
Speaker 1: these parents had to get to their job in the morning.
Speaker 1: That's the burden that the U. S. Government is putting
Speaker 1: on women and their families in our country now. And
Speaker 1: when you think about what women have been through over
Speaker 1: the last two years and what they're going through now,
Speaker 1: um baby formula shortages, childcare shortages, and outrageous prices for childcare.
Speaker 1: The she session losing their jobs at really high rates, inflation,
Speaker 1: gas at five more than five bucks a gallon UM.
Speaker 1: It's it's really really um a big problem for families.
Speaker 1: It's go ahead, sonya. I I wonder from a medical
Speaker 1: perspective what this means for for people, For for women
Speaker 1: who are pregnant but then find themselves with pregnancy challenges.
Speaker 1: Perhaps their pregnancy was planned, but then they find that
Speaker 1: it's an ectopic pregnancy perhaps, or that there's no way
Speaker 1: that she will be able to carry the baby to
Speaker 1: term because of genetic mutations within the embryo. What is
Speaker 1: what are those women to do? Well? I really appreciate
Speaker 1: you bringing that up because that it's such a significant point.
Speaker 1: You know, that's really when things become a very serious
Speaker 1: health care issues. And to talk about morality or uh
Speaker 1: ideology and what what people think about abortion in general
Speaker 1: really goes out the window when we're talking about people's
Speaker 1: health and life. Um, and you know, this has always
Speaker 1: been a problem. I mean, this has been a problem
Speaker 1: for a very long time. The particularly for the later
Speaker 1: term abortions if they're if they're needed, very very few
Speaker 1: places do them. And it's a huge burden to women.
Speaker 1: So it's just going to compound that. It's absolutely going
Speaker 1: to compound that. And you know, also, let's keep it
Speaker 1: into perspective. We've lost Roby Wade. But the truth is
Speaker 1: that it's been death by a thousand cuts for number
Speaker 1: of years every year. At the state level. Uh, there
Speaker 1: are so many restrictions put into place, and there have
Speaker 1: been there have been women who haven't had access too
Speaker 1: for any kind of reproductive health care of this sort um,
Speaker 1: anything that's that's convenient or within within their state. So
Speaker 1: what do you expect to develop here in the city
Speaker 1: of New York, in the state of New York. How
Speaker 1: do you think this will play out from uh? In
Speaker 1: terms of response? Right, so, we are gonna we are
Speaker 1: certainly going to be seeing those women who have to
Speaker 1: get on a plane to come to New York City
Speaker 1: to have those uh, those terminations that are endangering their
Speaker 1: their health. UM. And you know, one of the things
Speaker 1: that the National Organization for Women here is launching is
Speaker 1: a it's an escort service of sorts, a buddy system
Speaker 1: so that people who are coming we can we can
Speaker 1: connect people who are coming to the city for services
Speaker 1: with locals here who will help them navigate the city,
Speaker 1: help them make appointments, go to the appointment with them
Speaker 1: that they want. Whatever the volunteers UH are are comfortable doing.
Speaker 1: It may be even offering them a place to stay.
Speaker 1: We certainly are asking people to UH donate at this
Speaker 1: point to the many funds that exist to help cover
Speaker 1: the cost for the for people that are going to
Speaker 1: need to travel. UM. And that's particularly important now because
Speaker 1: as we as we've talked about, it's a crunch time
Speaker 1: now for people who are pregnant with all the changes
Speaker 1: that have been happening. And there are clinics who have
Speaker 1: been have been shutting down their operations over the last
Speaker 1: couple of weeks because they have businesses that have to
Speaker 1: that have to be shut down and they've started that process. UM.
Speaker 1: So it's a very uh, it's it's a dangerous time
Speaker 1: right now. UM. But we are going to be working
Speaker 1: to making sure that those those avenues for people to
Speaker 1: be able to get here that they need if they
Speaker 1: have to travel here or to the other. You know,
Speaker 1: there's only in the country, Sonia. We unfortunately have to
Speaker 1: leave it there, but we really appreciate you taking the time.
Speaker 1: We know you're very busy today. Sonia Osorio is the
Speaker 1: president of the National Organization for Women in New York City.
Speaker 1: The National Organization for Women is the largest organization of
Speaker 1: feminist grassroots activists here in the United States. This is
Speaker 1: Bloomberg Business Way. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio.
Speaker 1: All right, Tim, let's stick with the crypto storyline. We
Speaker 1: were just talking about a story where hackers looted about
Speaker 1: a hundred million dollars from a so called cryptocurrency bridge,
Speaker 1: again exposing key vulnerability in that that is real money.
Speaker 1: But that's the trend. That's clearly the trend. Dannell Dixon,
Speaker 1: CEO and Executive director for Stellar Development Foundation, joins us
Speaker 1: on the phone from San Francisco and Stellar you know,
Speaker 1: it's interesting. It is a nonprofit organization using blockchain technology.
Speaker 1: To unlock the world's economic potential by making money more fluid,
Speaker 1: markets more open, and people more empowered. Denil, thanks so
Speaker 1: much for joining us. Really appreciate it. I know you
Speaker 1: guys recently announced a partnership with money Graham tell us
Speaker 1: about that. Yeah, thanks so much for having me. It's
Speaker 1: a really awesome it's how we actually announced the launch
Speaker 1: of it. So it's really focused on reaching those one
Speaker 1: point seven billion folks around the world that don't have
Speaker 1: access to the formal financial system, and it's really about
Speaker 1: giving these cash economies an opportunity to be able to
Speaker 1: get into crypto. Uh. Think about it from the standpoint
Speaker 1: of we've said always all along that blockchain is about
Speaker 1: those folks out there who don't have access and yet
Speaker 1: to be able to get on and to purchase assets,
Speaker 1: you had to have a bank account or a credit card,
Speaker 1: but you don't need to anymore because you could walk
Speaker 1: into a MoneyGram location with your cash. You can make
Speaker 1: sure that you you set this up in your digital
Speaker 1: wallet in advance, and then you can convert that cash
Speaker 1: into USBC on Stellar and then hold those assets or
Speaker 1: do whatever you want with them in your wallet. It's
Speaker 1: a and you can also do cash out so that
Speaker 1: you can take the assets that you hold, you can
Speaker 1: convert them uh into cash by doing the same thing
Speaker 1: in reverse and going to money grabbing and picking up
Speaker 1: your cash. So it's a really transformational opportunity. And while
Speaker 1: payments and and getting access by access like this might
Speaker 1: not be the sexy part of crypto and the stuff
Speaker 1: that you guys were just talking about before, but this
Speaker 1: is what brings blockchain and crypto to the masses. So
Speaker 1: it's just so exciting for us to be able to
Speaker 1: see this. Well, it is interesting you say that to know,
Speaker 1: because I do think a lot about the promise of
Speaker 1: crypto and the idea of this sort of stateless currents,
Speaker 1: in the idea of cross border transactions being able to
Speaker 1: happen seamlessly. I was reminded of trying to, you know,
Speaker 1: get eighty bucks for a concert years ago from my
Speaker 1: friend who lives in England, and it was just impossible
Speaker 1: for him. It was impossible for him to send me
Speaker 1: the money. And at one point he was just like,
Speaker 1: you know what, next time I'm in the US, I'll
Speaker 1: give you eighty bucks. And I'm like, don't even worry
Speaker 1: about it, Matt, because you're one of my best friends
Speaker 1: and I don't even care, and it was a great show,
Speaker 1: but I do know. It brings me to my point
Speaker 1: about adoption, and Paul mentioned this most recent bridge attack
Speaker 1: of a hundred million dollars. It comes after we've seen
Speaker 1: other vulnerability with the bridge and other vulnerabilities with crypto,
Speaker 1: but it also comes at a time when the value
Speaker 1: of crypto has just fallen so much, and I'm wondering
Speaker 1: what that does for mass adoption. If people say, you
Speaker 1: know what, I was into this, but now I'm going
Speaker 1: to stay away because I don't want to touch the stuff.
Speaker 1: It's too volnable. Well, first of all when it comes
Speaker 1: to payment, so when it comes to being able to
Speaker 1: move your assets. We really really believe in stable coins,
Speaker 1: and this this relationship that we have with money gram
Speaker 1: when all these wallet partners out there can leverage his
Speaker 1: money Gram table coin Danelle. As Kati Grayfield said yesterday,
Speaker 1: stable coin is almost a dirty word these days in
Speaker 1: crypto because of what happened with the you know, algorithmic
Speaker 1: stable coins recently. Well, I think that's an excellent point
Speaker 1: to bring up, because stable coins, coins that are called
Speaker 1: stable coins should live up to their names and they
Speaker 1: should be stable. When you think about USDC, for example,
Speaker 1: that's the Circle issued stable coin. It's backed one to
Speaker 1: one by FIAT and they hold those and they actually
Speaker 1: keep it so it's transparent for folks to be able
Speaker 1: to see it. That's crucially important. We support those stable
Speaker 1: coins that are issued globally. There are more than thirty
Speaker 1: issued on Stellar with that area by their local FIAT
Speaker 1: in much the same way. That's what we think is
Speaker 1: really important for that. So I want to talk I
Speaker 1: mean the recent turmoil and the crypto markets. I just
Speaker 1: want to emphasize that blockchain technology serves a purpose. It's
Speaker 1: serving the unbanked, the underbanked populations that are cash based,
Speaker 1: and many of them don't have bank accounts, and these
Speaker 1: two billion people depend on cash for their livelihoods. What
Speaker 1: we're focused on, and what we've always been focused on,
Speaker 1: is making this real for them. So six percent of
Speaker 1: the world's adults globally operate the informal economy in some capacity,
Speaker 1: and so if you think about giving them the opportunity
Speaker 1: to be able to hold their value in a way
Speaker 1: that's secure, it's in their hands that they control. This
Speaker 1: is what you can do now when you walk into
Speaker 1: MoneyGram with your cash and put it into your whatever
Speaker 1: whilet you choose it's connected to this service, you can
Speaker 1: do that right now. Moneygram's offering this for zero fees
Speaker 1: for the first year, to be able to get folks
Speaker 1: on boarded, to get them used to the service, and
Speaker 1: to be able to demonstrate the power of it. This
Speaker 1: is truly transformational and remarkable, and I think there's a
Speaker 1: lot of really interesting stuff going on in crypto bock chain,
Speaker 1: but this is a bread and butter, So as we
Speaker 1: get more and more, this goes more and more of
Speaker 1: a retail product, and the extent that it is adopted
Speaker 1: kind of raises a question regulation. Where do you think
Speaker 1: we are in the regulatory framework? Where do you think
Speaker 1: we're going? Is this an SEC type of issue or CFTC.
Speaker 1: How do you think about it? Yeah, it's a fascinating question.
Speaker 1: They think domestically in the US, we're going to first
Speaker 1: see regulation around the issue that you just raised on
Speaker 1: stable coins. I think we'll see actually some stable coin legislation.
Speaker 1: We already see some bills being proposed that's going to
Speaker 1: give us some some clarifying uh language there that will
Speaker 1: make it so that financial institutions that are not thanks
Speaker 1: will be able to issue stable coins and do it
Speaker 1: in a way that's valuable to the end consumer. And
Speaker 1: I think we see a lot of these administrative bodies
Speaker 1: right now out there really tackling these issues in different ways.
Speaker 1: And I'll just tell you what I think. I think
Speaker 1: the most important thing is that governments have always been
Speaker 1: super successful and really good at regulating money. They've done
Speaker 1: this from the very beginning, whether it was pay for
Speaker 1: money that we're used to today or goal So we
Speaker 1: already have all of these activities set out in all
Speaker 1: these different regulatory bodies. They know how to regular rate
Speaker 1: the activity. Stop focusing on the technology layer, and focus
Speaker 1: on the activity because the truth of the matter is
Speaker 1: it's not that different, Dion, We're going to meet that.
Speaker 1: Tonel Dickson, CEO and executive director of the Stellar Development Foundation,
Speaker 1: joining us on the phone from San Francisco. You're listening
Speaker 1: to a Bloomberg Business Week Kim Stanevick and Paul Sweeney
Speaker 1: Live and the Bloomberg Interactive Broker Studio in New York.
Speaker 1: This is Bloomberg. I'm roc journal, but you let me drive.
Speaker 1: Oh no, no, no no, no, please I'll do the revels.
Speaker 1: I want to drive. It's a good question. Drive. This
Speaker 1: is the drive to the clothes music on Bloomberg Radio.
Speaker 1: All right. I like nice round numbers as much as
Speaker 1: the next person. For your SMP five hundred up two
Speaker 1: point eight percent today is Charlie Poullet reported. Uh, this
Speaker 1: will be the first up week in about a month
Speaker 1: over a month here, So I'm not sure what to
Speaker 1: make it happen. Maybe our next guest who does this
Speaker 1: for a living, he might know. David Deet's managing principal
Speaker 1: and senior portfolio strategist at Peapack Private Wealth Management, joins
Speaker 1: us on the phone from the bustling metropolis of Summit,
Speaker 1: New Jersey. David, what do you make it this week's trading?
Speaker 1: What do you make it today's trading? A little bit
Speaker 1: of a dead cat bounce? Or do we have the
Speaker 1: makings of something here? Well, so that's the sixty four
Speaker 1: thousand dollar question, is just is this just an oversold
Speaker 1: bounce or could it have some legs here? Certainly there's
Speaker 1: a lot of positives. We started this year at about
Speaker 1: twenty two times earnings. We came into this week at
Speaker 1: just sixteen times earnings, and of course you just look
Speaker 1: at the numbers, we're having one of the worst first
Speaker 1: halves of the year for stock since about nineteen seventy
Speaker 1: and quite frankly, when you look at history, bad first
Speaker 1: halves are typically followed by good second halves. The other
Speaker 1: the thing I like here is we're detecting some softening
Speaker 1: in the economic conditions, which could help with the market's
Speaker 1: worst bugaboo, that would be inflation. So for example, if
Speaker 1: you look at real estate, a lot of people are
Speaker 1: crying in their beer right now as layoffs are starting
Speaker 1: to mount, as those higher mortgage rates are starting to bite,
Speaker 1: and of course leading indicators like commodities are rolling back.
Speaker 1: So for example, look at copper entered this week at
Speaker 1: a sixteenth month low. Sometimes people call a copper doctor
Speaker 1: Copper dr Copper because this uncanny ability to predict the
Speaker 1: economic uh fortunes ahead um And so that suggests weakening
Speaker 1: in the economy and some softening inflation, and then ultimately
Speaker 1: could help the third bugaboo, which is what the throw
Speaker 1: reserves can to do. And they're seeming to become increasingly
Speaker 1: sensitized to possible economic weakness. So perhaps higher interest rates
Speaker 1: won't continue forever. Okay, so higher interest rates perhaps won't
Speaker 1: continue forever. And you know, I think we had a
Speaker 1: guest on last week. I forget who it was. I
Speaker 1: know Ari's gonna say the name as soon as I
Speaker 1: say this, who said that the average amount of time
Speaker 1: between a tightening and a loosening schedule is only eight months.
Speaker 1: So when the Fed stops tightening on average, we start
Speaker 1: to see looser monetary policy eight months. Uh. I think
Speaker 1: it's still too early for us to talk about that,
Speaker 1: but I do wonder, David, how far you think the
Speaker 1: Fed will have to go in order to bring inflation
Speaker 1: under control? And then what will be the consequences of that? Well,
Speaker 1: you know, no one knows for sure, but remember the
Speaker 1: bond market has done a lot of the work for
Speaker 1: the Federal Reserve already. We started the year with that
Speaker 1: ten year at just one and a half percent UM.
Speaker 1: It briefly got up to about three point four percent,
Speaker 1: more than a doubling. Is still well above three. And
Speaker 1: look at what corporations are using and relying on. For example,
Speaker 1: UM the most credit challenged borrowers the high yield market.
Speaker 1: The yields there are now trading between eight and nine
Speaker 1: and so that's got to slow the economy. We know
Speaker 1: it's slowing the real estate market. So between the market
Speaker 1: itself and of course a lot of jaw boning, you know,
Speaker 1: a lot of sturm and dragged by the Federal Reserve,
Speaker 1: I think we've already started to slow the economy. So
Speaker 1: it could be a shorter period of time rather than
Speaker 1: a longer period of time for these rate hikes by
Speaker 1: the Fed. So again, I think a lot of folks,
Speaker 1: you know, look at this federal reservances and boy, they've
Speaker 1: got a tough balancing act, you know, trying to rein
Speaker 1: in inflation while not pushing the economy, uh into a recession,
Speaker 1: at least not a deep one. Do you think the
Speaker 1: Federal Reserve can in fact kind of thread that needle?
Speaker 1: F you will, Well, you know they've admitted this one
Speaker 1: of the toughest jobs on the planet here is to
Speaker 1: create that soft landing. And I think the problem is,
Speaker 1: of course, they're key metrics that they're looking at to
Speaker 1: guide their policy is joblessness and inflation, and those are
Speaker 1: both lagging indicators, while monetary policy acts with anywhere from
Speaker 1: a six to twenty four month lag, right, So they're
Speaker 1: trying to predict the weather when they land the plane
Speaker 1: based on whether when the plane takes off, and so
Speaker 1: it's not easy. I guess the good news about that,
Speaker 1: although history doesn't favor them being able to create the
Speaker 1: soft landing, the good news is they're talking about how
Speaker 1: difficult it is, and so perhaps they're gonna be a
Speaker 1: little bit more dubblish, a little bit more cautious in
Speaker 1: terms of those rate hikes, and with some softening in
Speaker 1: the economic metrics that we saw, for example even today,
Speaker 1: with the Purchasing Managers Index softing a little bit, they
Speaker 1: may have less rate hikes and that could help prevent
Speaker 1: a hard landing. Anyway, what's the other data that we
Speaker 1: need to be looking at or what are you looking
Speaker 1: at for indicators that we are starting to see some
Speaker 1: softening happening. And certainly, you know, the inflation expectations from
Speaker 1: University of Michigan pulling back slightly from fourteen year highs
Speaker 1: was was welcome news to the market. But what else
Speaker 1: did we need to be looking at? Well, next week,
Speaker 1: all eyes are going to be on Thursday's personal consumption
Speaker 1: expenditures inflation data. You know, that's the Federal Reserve preferred
Speaker 1: inflation gauge UM, and if that shows the inflation is
Speaker 1: continuing to worsen, I think we're going to see some volatility. If,
Speaker 1: on the other hand, we just see a little a
Speaker 1: little bit less inflation in the latest month versus the
Speaker 1: prior month, I think markets could cheer that news. And
Speaker 1: of course, from a stock industris point of view, all
Speaker 1: eyes are going to be on those earnings, those Q
Speaker 1: two earnings. We're gonna get them in waves starting in
Speaker 1: mid July. We're gonna see whether stock analysts have been
Speaker 1: too bullish and and and how those companies meet those expectations.
Speaker 1: And of course we're gonna be listening carefully to the outlook.
Speaker 1: We know that things did cool up premendously in Q two.
Speaker 1: How bad was that and how is that going to
Speaker 1: affect what the Fed may do and what investors are
Speaker 1: gonna do. As a former equity analys IM glad you
Speaker 1: brought up earnings. They do matter, they do count, uh
Speaker 1: and certainly your initial thoughts on evaluation here. One of
Speaker 1: the challenges, I think, and one of the concerns for
Speaker 1: analysts is you know margins are to what extent our
Speaker 1: margins under pressure given some of these inflationary trends that
Speaker 1: we see out there, is that kind of where you
Speaker 1: see the risk for earnings here not so much the
Speaker 1: top line that maybe those profit margins. Yeah, absolutely, I
Speaker 1: mean you put it in context, which is basically macro
Speaker 1: analysts see hi earnings in the second half and higher
Speaker 1: earnings in two thousand three. That doesn't square too well
Speaker 1: with just the overall our sessionary concerns. But then you
Speaker 1: point to where it could be the weak link, and
Speaker 1: that could easily be the margins, as you point out,
Speaker 1: because with these inflationary pressures pushing up the inputs for
Speaker 1: production and for services, and of course we know that
Speaker 1: wages are starting to go up, and so the question
Speaker 1: is if companies are not able to increase prices and
Speaker 1: past thus along, then you're gonna have that shrinking of
Speaker 1: the margins. We do know that margins are close to
Speaker 1: all time hides when you look at history, so it
Speaker 1: wouldn't be surprising to see those diminishing a little bit,
Speaker 1: and of course that's going to weigh heavily on earnings. David,
Speaker 1: we only have thirty seconds left here, the sving its
Speaker 1: best day in more than a month. It's May four,
Speaker 1: two is the worst behind us. Yeah, for some sectors
Speaker 1: who possibly some of the some of the tech names
Speaker 1: look pretty washed out here with the naztack down. What
Speaker 1: we're seeing from history is there's not one bottom, but
Speaker 1: there is this theories of bottoms. So some things I
Speaker 1: would point out is, for example, some of the retailers
Speaker 1: have really been washed out here. You look at a
Speaker 1: couple of like Best Buy five, but they've increased that
Speaker 1: dividen per year. Energy of course is pulled back dramatically,
Speaker 1: but they're expected to show some of the high earns
Speaker 1: growth going forward here. All right, David Deets, we love
Speaker 1: it when you join us. Managing principal and senior portfolio
Speaker 1: strategist at Pepack Private Wealth Management. They've got ten point
Speaker 1: seven billion dollars in assets under management. Joining us from
Speaker 1: Beautiful Summit, New Jersey. Thanks for listening to Bloomberg Business Week.
Speaker 1: Download the podcast on iTunes, SoundCloud, or Bloomberg dot com,
Speaker 1: and you can also listen to our radio show at
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