WEBVTT - Bloomberg Businessweek Weekend - January 28th, 2022 0:00:01.080 --> 0:00:05.400 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.200 global business, finance and tech news As it happened. Sloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messier and Bloomberg Quick Takes Tim 0:00:16.800 --> 0:00:21.239 Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend 0:00:21.400 --> 0:00:24.440 edition of Bloomberg Business Week. A volatile week for markets, 0:00:24.480 --> 0:00:27.080 to say the least, headline by the Federal Reserves first 0:00:27.080 --> 0:00:30.640 policy meeting and him, it looks like the devish side 0:00:30.640 --> 0:00:34.920 of Jerome Powell is no more. He's definitely gone more hawkets. Yeah, 0:00:34.920 --> 0:00:36.600 you can see that again, the Fed chair saying that 0:00:36.640 --> 0:00:39.760 he's open to more interest rate increases than forecast if 0:00:39.760 --> 0:00:42.640 needed to help curb inflation. Those hikes almost certain to 0:00:42.720 --> 0:00:45.400 begin in mid March. Risk assets taking big hits so 0:00:45.440 --> 0:00:47.560 far this year, and there's a big chill settling over 0:00:47.800 --> 0:00:50.360 market sentiment these days. It is the subject of this 0:00:50.400 --> 0:00:52.680 week's cover story of More than That in just a Moment. 0:00:52.800 --> 0:00:55.120 Also ahead in the broadcast, how the US is preparing 0:00:55.160 --> 0:00:57.720 for a major attack on its power grid, the next 0:00:57.760 --> 0:01:00.319 big breakthrough in genetic testing, and we'll also to hear 0:01:00.320 --> 0:01:03.200 how monetary policy and inflation are affecting main Street. We're 0:01:03.240 --> 0:01:05.440 gonna do that with Jeff Jones. He's the CEO of 0:01:05.560 --> 0:01:07.520 H and R Block. All of that to come first up, though, 0:01:07.560 --> 0:01:10.400 let's welcome the editor of Bloomberg Business Week magazine, Joel 0:01:10.400 --> 0:01:12.560 Webber and Joe. We're gonna go in depth on the 0:01:12.600 --> 0:01:15.840 cover story in our next segment. Um, we know a 0:01:15.880 --> 0:01:18.600 big sell office underway. Your team, though, was all over 0:01:18.640 --> 0:01:21.280 it was it almost impossible not to do the markets 0:01:21.280 --> 0:01:24.480 as the cover story this week. Yeah, sometimes you just 0:01:24.480 --> 0:01:28.679 have to recognize that something is happening and that um, 0:01:28.720 --> 0:01:31.800 it's involving the markets and and uh, that's where we 0:01:31.880 --> 0:01:34.040 kind of went to with this one. And we just 0:01:34.040 --> 0:01:37.680 have this had a spiky sense that there's this change 0:01:37.840 --> 0:01:41.760 that's underway um uh, and that markets are trying to 0:01:41.760 --> 0:01:45.280 figure out what what to make of a rising rate environment. Um. 0:01:45.680 --> 0:01:48.360 And you know, we had this statement from Jay Pal 0:01:48.560 --> 0:01:51.800 that really took the markets in another direction. Um. And 0:01:51.840 --> 0:01:54.440 to see the boomerang that started at the beginning of 0:01:54.440 --> 0:01:57.480 the week where things were read and then rebounded, that 0:01:57.560 --> 0:02:00.280 was it was just really funny and we were like, 0:02:00.320 --> 0:02:02.520 what's going on here? And who can we talk to 0:02:02.520 --> 0:02:03.760 to get it right, and that's what led us to 0:02:03.760 --> 0:02:05.440 Mike Creagan. And we're gonna hear much more from Mike 0:02:05.480 --> 0:02:08.320 Reagan in just a few minutes with details on that 0:02:08.400 --> 0:02:11.560 cover story from cold Markets though to hot Sauce, because 0:02:11.560 --> 0:02:13.480 we did hear Joel and look, this is how the 0:02:13.480 --> 0:02:15.840 sausage is made right, we heard that there was another 0:02:15.880 --> 0:02:18.000 candidate in the running for this week's cover story. Had 0:02:18.000 --> 0:02:19.959 it not been for the big dip in markets, we 0:02:20.120 --> 0:02:22.760 likely be talking more about Austin Carr's great feature on 0:02:22.960 --> 0:02:25.680 big Hot Sauce. Um. I'm a big hot sauce guy 0:02:26.040 --> 0:02:27.840 and I do my I do my part to support 0:02:27.840 --> 0:02:29.880 big hot sauce. What do we need to know? Yeah, 0:02:29.880 --> 0:02:32.280 we can still talk about hot sauce. Um. So there's 0:02:32.280 --> 0:02:34.880 a company called McCormick and I think for the most 0:02:34.919 --> 0:02:38.400 part you probably know McCormick as a spice company. Yeah, um, 0:02:38.560 --> 0:02:40.200 you know you. I opened my spice s rawer and 0:02:40.200 --> 0:02:43.720 there's a bunch of red capped little little containers of spices. 0:02:43.760 --> 0:02:46.600 That's McCormick. Um. But in the last few years, and 0:02:46.639 --> 0:02:49.520 under a new CEO, they've really um doubled down on 0:02:49.520 --> 0:02:52.240 a growth strategy, which is hot sauce UM and it 0:02:52.320 --> 0:02:55.799 actually started. The first acquisition they made was Fringes the 0:02:55.880 --> 0:02:59.000 mustard Um, and then they went for Frank's Hot Sauce 0:02:59.520 --> 0:03:03.519 and then and they recognized that that was going well, 0:03:03.560 --> 0:03:05.600 and so they decided they needed more hot sauce and 0:03:05.639 --> 0:03:10.320 they went for Cholula. That's my Yeah, that's a lot 0:03:10.320 --> 0:03:12.800 of people feel that same way. So they've really turned 0:03:12.800 --> 0:03:16.040 into this little it's like a hot sauce roll up almost, 0:03:16.520 --> 0:03:20.519 and that's giving the company new growth, new markets, UM 0:03:20.560 --> 0:03:24.400 and it could you know, unlock some There's the condiment 0:03:24.480 --> 0:03:27.519 rivalry is just priceless. There's the catch up world, there's 0:03:27.560 --> 0:03:30.440 the mayonnaise world, and the hot sauce one. You know, 0:03:30.480 --> 0:03:32.600 people just keep coming back for more and more and 0:03:32.639 --> 0:03:34.920 more UM and it could give them a leg up 0:03:34.960 --> 0:03:37.520 in terms of what the next kind of condiment breakthroughs 0:03:37.560 --> 0:03:39.240 might look like. Okay, well, we can't talk about McCormick 0:03:39.280 --> 0:03:41.760 though without talking about you know that the surge in 0:03:41.880 --> 0:03:44.080 at home cooking at the beginning of the pandemic. And 0:03:44.280 --> 0:03:45.640 I thought you were gonna say you can't talk about 0:03:45.640 --> 0:03:47.480 it without talking about pet prikup. But well, we'll talk 0:03:47.480 --> 0:03:49.600 about that later. We will talk about that later. And 0:03:49.640 --> 0:03:52.400 I'm just wondering about how the company sees Hot Sauces 0:03:52.400 --> 0:03:55.280 sort of getting them through and pass the pandemic and 0:03:55.520 --> 0:03:58.240 beyond beyond spices that they're known for. Well, the the 0:03:58.280 --> 0:04:00.640 spice thing is really interesting, just to kind of take 0:04:00.640 --> 0:04:03.000 a moment with that. Um And And Austin Carr writes 0:04:03.040 --> 0:04:05.880 about this Tamaric shortage, which is I think one of 0:04:05.880 --> 0:04:08.440 the kind of great things in the story, just like 0:04:08.480 --> 0:04:11.280 thinking through logistics of like, you know your main source 0:04:11.280 --> 0:04:13.360 of tamaric, suddenly you're not gonna be able to rely 0:04:13.400 --> 0:04:15.400 on them. It's one of the ingredients. And in the 0:04:15.480 --> 0:04:18.880 mustard American give became very close to having this massive 0:04:18.960 --> 0:04:23.000 mustard shortage that people probably didn't realize. People really have 0:04:23.120 --> 0:04:25.280 these brand affinities, right, and we think about that through 0:04:25.320 --> 0:04:28.120 consumer goods a lot. Um and Hot Sauce is sort 0:04:28.160 --> 0:04:30.960 of like a way that I think people um have 0:04:31.240 --> 0:04:34.880 an affinity for brands. And so McCormick is moving in 0:04:34.920 --> 0:04:37.359 behind the scenes. You don't necessarily know that in the 0:04:37.400 --> 0:04:40.000 same way that their Red Cap spices. You don't know 0:04:40.080 --> 0:04:44.040 that Cholula even owns is owned by McCormick. McCormick's name 0:04:44.080 --> 0:04:46.200 shows up. Now we're on the bottle, and yet they 0:04:46.240 --> 0:04:48.919 get all the goodness that comes from a brand that 0:04:48.960 --> 0:04:50.920 people have affinity for. You know, it was really cool 0:04:50.960 --> 0:04:52.800 about this story. It was such a deep dive into 0:04:52.839 --> 0:04:55.960 the company's history and understanding, like its origins. But it 0:04:56.000 --> 0:04:59.640 also I had no idea about the work that McCormick 0:04:59.640 --> 0:05:01.720 does for a lot of other well known brands in 0:05:01.839 --> 0:05:04.799 terms of developing products. Yeah, you won't get a whole 0:05:04.839 --> 0:05:10.320 lot of details from this because flavor since fragrances, all 0:05:10.360 --> 0:05:15.000 of that stuff, it's pretty uh covert, top secret stuff 0:05:15.000 --> 0:05:18.080 because people don't wanna let it be known that they 0:05:18.120 --> 0:05:21.000 partner with others. So one of the things that McCormick 0:05:21.120 --> 0:05:23.480 is it's pretty quiet about this side of its business. 0:05:23.480 --> 0:05:26.680 But it basically consults with a lot of different brands 0:05:26.720 --> 0:05:30.240 and food manufacturers on the flavoring side, and that is 0:05:30.279 --> 0:05:33.119 another opportunity for growth. Part of that has been driven 0:05:33.120 --> 0:05:36.160 by tech um. For instance, one of the sources that 0:05:36.200 --> 0:05:39.600 we talked to is said that basically, you know, not 0:05:39.680 --> 0:05:41.719 so long ago, there was not that many types of 0:05:41.800 --> 0:05:45.120 cherry flavoring, and now there's kind of hundreds of them 0:05:45.200 --> 0:05:47.800 because of what they've been able to unlock. Yeah, and 0:05:47.839 --> 0:05:51.640 who knew that snack espionage was a threat? I think 0:05:51.640 --> 0:05:55.280 about cyber so cybersecurity and other things. Um. It is 0:05:55.360 --> 0:05:57.840 a great deep dive and a really great read by 0:05:57.839 --> 0:06:00.479 Austin carr Um. Joel. Thank you so much, Burg Business. 0:06:00.480 --> 0:06:03.120 We get her Joel Webber and he's gonna stick around 0:06:03.120 --> 0:06:04.760 with us. For our next segment, we're gonna talk about 0:06:04.800 --> 0:06:06.840 this week's cover story. Yeah, we're gonna break down the 0:06:07.000 --> 0:06:10.720 stock markets ugly start too and why investors might want 0:06:10.760 --> 0:06:13.559 to have the CFO put on their radar. You're listening 0:06:13.560 --> 0:06:31.400 to Bloomberg Business Week. This is Bloomberg. This is Bloomberg 0:06:31.400 --> 0:06:35.039 Business Week with Carol Messer and Bloomberg Quick Takes Tim 0:06:35.080 --> 0:06:39.440 Stinovik from Bloomberg Radio. As we mentioned at the top 0:06:39.440 --> 0:06:42.200 of our program, this week's cover story zeroing in on 0:06:42.279 --> 0:06:45.039 the sharp downturn in markets to start off this year. 0:06:45.480 --> 0:06:47.440 It was also Bloomberg big take by the way this week, 0:06:47.480 --> 0:06:50.240 and it couldn't have been time to any better. Talk 0:06:50.279 --> 0:06:52.720 about the magazine just hitting it right on the money. Yeah, 0:06:52.880 --> 0:06:55.040 shout out to Joel Webber and the team at Bloomberg 0:06:55.040 --> 0:06:57.840 Business Week. This story Carol coinciding with the Federal Reserve 0:06:57.960 --> 0:07:01.200 Chair Jerome Powell, saying that the Central Bank its poised 0:07:01.240 --> 0:07:04.160 to move away from what he called quote highly accommodative 0:07:04.160 --> 0:07:07.520 policy definitely a much more hawkish jay back to help 0:07:07.600 --> 0:07:09.560 investors find out what's real and what's not in a bid. 0:07:09.640 --> 0:07:12.240 All the talk of bubbles and high flyers is Bloomberg 0:07:12.280 --> 0:07:15.000 Business Week editor Joe Weber and the individual who wrote 0:07:15.000 --> 0:07:18.280 the piece we're talking about, Bloomberg Market Senior editor Mike Reagan. 0:07:18.560 --> 0:07:21.080 You know, the so called uh FED put the notion 0:07:21.160 --> 0:07:23.880 that the Fed would sort of come to the rescue 0:07:23.920 --> 0:07:27.600 of the stock market if their plans to tighten policy. Uh, 0:07:27.720 --> 0:07:31.240 you know, cause some volatility that is not exactly alive 0:07:31.280 --> 0:07:35.760 and healthy right now, you know, and if it is, 0:07:36.240 --> 0:07:38.240 you know, it's certainly going to take a lot more 0:07:38.280 --> 0:07:40.840 than what we've seen. It's going to take enough flatility 0:07:40.880 --> 0:07:43.080 in the market that it really starts to threaten the economy. 0:07:43.280 --> 0:07:46.800 And I think that's the underlying tension here. Uh, for 0:07:46.840 --> 0:07:50.119 a lot of investors, is okay. You know this easy 0:07:50.160 --> 0:07:53.760 money monetary policy really and low interest states really sort 0:07:53.760 --> 0:07:58.080 of boosted valuations, lifted all boats among the boats that 0:07:58.160 --> 0:08:01.680 were left at the most clearly though we're highly speculative, 0:08:02.360 --> 0:08:06.520 you know, innovative but not yet profitable companies in the market. 0:08:07.000 --> 0:08:08.760 So I think it's just a down draft that is 0:08:08.880 --> 0:08:11.280 that is infected the blue chips as well. But I 0:08:11.320 --> 0:08:14.760 do think, you know, the comparison everyone likes to make 0:08:14.880 --> 0:08:17.440 is to the dot com bubble, because it was very 0:08:17.520 --> 0:08:21.840 much UH evaluations got out of hand and then you know, 0:08:21.880 --> 0:08:24.440 the fall was much harder as a result. I think 0:08:24.440 --> 0:08:26.600 the big difference is those blue chips this time, they're 0:08:26.680 --> 0:08:31.360 just so healthy, They're so integral to UH, you know, 0:08:31.400 --> 0:08:35.880 the backbone of the economy. Your Amazon's, your Microsoft, your Apple, um, 0:08:35.920 --> 0:08:38.800 and there's just so much cash on their balance sheets 0:08:38.840 --> 0:08:41.480 that I think, rather than thinking about the FED put, 0:08:41.600 --> 0:08:43.320 I tend to think about sort of we call it 0:08:43.360 --> 0:08:45.880 the CFO put. You know, the notion that there's so 0:08:45.960 --> 0:08:49.400 much cash sitting UH in accounts at these firms that 0:08:49.720 --> 0:08:51.280 what are they gonna do about it if their own 0:08:51.320 --> 0:08:54.320 stocks get caught up in this down draft. Well, maybe 0:08:54.320 --> 0:08:57.120 they'll increase buybacks, Maybe they'll buy up some of the 0:08:57.160 --> 0:08:59.040 weaker names that are getting hit the hardest. I want 0:08:59.040 --> 0:09:00.679 to bring in Bloomberg Busines, we get it, or Joel 0:09:00.679 --> 0:09:02.600 Webber Chris Joel. You know, Tim and I were talking 0:09:02.600 --> 0:09:05.719 about what we're thinking about Mike's story back in December. 0:09:05.760 --> 0:09:09.440 A wild emotional year has changed investing maybe forever. And 0:09:09.480 --> 0:09:14.360 the wild emotional year continues in UM markets, no doubt 0:09:14.360 --> 0:09:17.200 about it. It is the big story this week. That 0:09:17.320 --> 0:09:23.280 was really good radio voice that thank you very much. UM. Yeah, 0:09:23.440 --> 0:09:25.880 so you look like we uh we we kind of 0:09:25.920 --> 0:09:28.480 spooled this one up. I like it to picking up 0:09:28.760 --> 0:09:32.000 a bat or putting a bat light up in the 0:09:32.000 --> 0:09:35.360 the sky for for Mike to see. And after last 0:09:35.360 --> 0:09:37.360 week and heading into this week, I was we knew 0:09:37.440 --> 0:09:39.920 we needed to do something big in the magazine about it. 0:09:40.080 --> 0:09:42.360 UM We called it the Big Chill as the cover story, 0:09:42.400 --> 0:09:45.000 and then of course we publish it in the morning. 0:09:45.400 --> 0:09:49.720 Markets go up and with like holding my breath about 0:09:49.760 --> 0:09:52.640 like wow, did I just make a mistake, And then 0:09:52.800 --> 0:09:57.200 on behold uh j Pal speaks and and things turn red, 0:09:57.360 --> 0:10:00.400 and and you know, I feel like it's all worked out, 0:10:00.400 --> 0:10:03.880 except rooting for Red can be slightly weird. I want 0:10:03.880 --> 0:10:07.720 your crystal ball, That's all I'm gonna say. But it 0:10:07.800 --> 0:10:11.719 does feel like there's this kind of just mood change. 0:10:12.280 --> 0:10:15.360 It feels like the winds have really changed, Mike, that 0:10:15.360 --> 0:10:18.680 that you know, this euphoria that um, and this big 0:10:18.720 --> 0:10:22.080 punch bowl where everybody was having a good time suddenly 0:10:22.080 --> 0:10:25.880 like maybe the party's really ending here, right, Yeah. Absolutely, 0:10:25.920 --> 0:10:28.920 And I think you know, we've grown so accustomed in 0:10:28.960 --> 0:10:31.960 the decade after the financial crisis to sort of, you know, 0:10:32.600 --> 0:10:34.880 rely on the FED to kind of you know, pause 0:10:35.240 --> 0:10:38.360 or to get a little more stimulative whenever ever we needed, 0:10:38.440 --> 0:10:40.520 you know, the market needed it. It's just such an 0:10:40.640 --> 0:10:43.520 different different environment this time. I mean, obviously cp I 0:10:43.600 --> 0:10:48.920 at seven percent unemployment rate, near those pre pandemic lows, 0:10:48.960 --> 0:10:52.480 you know, some of the lowest unemployment readings of our lifetime. 0:10:52.559 --> 0:10:54.560 So you know, you just get back to the basics. 0:10:54.640 --> 0:10:58.400 What's the FEDS role, what's their duty? Well, it's to 0:10:58.480 --> 0:11:03.080 keep inflation reasonable around two not seven, and it's to 0:11:03.160 --> 0:11:06.000 keep the job market strong. So um, you know, the 0:11:06.080 --> 0:11:08.280 job markets fine, there's no need to keep you know, 0:11:08.360 --> 0:11:10.720 keep stimulating the economy with the job market the way 0:11:10.760 --> 0:11:14.000 it is. But that inflation, and you know, I think 0:11:15.120 --> 0:11:16.920 probably a hundred years from now, we'll be able to 0:11:16.960 --> 0:11:19.199 figure out how much of it was just the supply 0:11:19.320 --> 0:11:23.800 chain problems, how much of it was the easy monetary 0:11:24.440 --> 0:11:27.960 accommodations umal talked about in the press conference, you know, 0:11:28.080 --> 0:11:30.120 in terms of I hope I'll be here to look 0:11:30.160 --> 0:11:33.920 back and see how we assess everything exactly. But certainly, 0:11:34.160 --> 0:11:36.600 you know, their back is sort of to the wall 0:11:36.880 --> 0:11:39.960 that um, they have to they have to do whatever 0:11:40.000 --> 0:11:43.800 they have in their tool kit to attain this inflation, um, 0:11:43.800 --> 0:11:45.880 regardless of the of the cause of it, because they, 0:11:46.120 --> 0:11:48.200 you know, put their money, put all their chips on 0:11:48.240 --> 0:11:52.520 it being transitory. Uh. That's clearly transitory. Has clearly turned 0:11:52.559 --> 0:11:54.839 out to be a lot longer than anyone realized. And 0:11:54.920 --> 0:11:57.120 look the market. The U S stock market has been 0:11:57.240 --> 0:11:59.840 up in average of twenty four percent per year for 0:11:59.840 --> 0:12:04.760 the last three years, uh, two thousand twenty. So it's 0:12:04.760 --> 0:12:07.040 really hard to make the case that this temper cent 0:12:07.120 --> 0:12:10.240 dip in the SPI is enough to cause the FED 0:12:10.520 --> 0:12:13.319 to to reverse course. Um. And I think that was 0:12:13.360 --> 0:12:16.760 hammered home in the market action. But the third part 0:12:16.760 --> 0:12:19.240 of the FED mandate is to reduce my four A 0:12:19.280 --> 0:12:25.560 one came. I didn't hear that from didn't get that memo. Well, 0:12:26.559 --> 0:12:29.360 but Mike, how you mentioned the CFO put earlier, which 0:12:29.400 --> 0:12:31.840 I thought was just a genius part of the story. 0:12:32.559 --> 0:12:36.960 How how big and how did that compare? So like 0:12:37.000 --> 0:12:40.840 you know with the fed put has looked like and 0:12:41.040 --> 0:12:43.760 like just break that down for for folks are well, 0:12:43.800 --> 0:12:45.319 you know it's not going to be the type of thing. 0:12:45.320 --> 0:12:49.240 I mean, the fed put can get exercised, uh in 0:12:49.280 --> 0:12:51.360 the blink of an eye if if pal says, you know, 0:12:51.480 --> 0:12:55.600 gives a speech or the statement indicates that they're they're pausing. 0:12:56.000 --> 0:12:59.199 I think you know this CFO put that we made up, 0:13:00.240 --> 0:13:03.600 it's something that is gonna play out over time, you know, uh, 0:13:03.640 --> 0:13:06.880 and not all at once. It's uh, you know what 0:13:07.000 --> 0:13:08.800 does a company and that The example I used in 0:13:08.800 --> 0:13:14.000 the story was, um, Microsoft's takeover of Activision Blizzard. You know, uh, 0:13:14.160 --> 0:13:16.800 a stock that just went through the roof during the pandemic. 0:13:16.840 --> 0:13:19.719 Everyone was Stockholm playing video games and then that you 0:13:20.200 --> 0:13:22.800 for your faded fast and the stock crashed and then 0:13:23.040 --> 0:13:25.520 Microsoft comes in and swoops in and says, you know, 0:13:25.640 --> 0:13:27.120 we've got a lot of cash on the bounce sheet. 0:13:27.480 --> 0:13:29.480 This is a company that fits in perfectly as a 0:13:29.480 --> 0:13:33.280 bolt on acquisition, uh for US. So um, you know 0:13:33.320 --> 0:13:36.360 they took a big swing at that, a big premium 0:13:36.400 --> 0:13:39.080 on what the stock was trading at. That's those type 0:13:39.080 --> 0:13:41.800 of things. You know, they'll support the target company obviously, 0:13:41.840 --> 0:13:43.480 but they kind of have a halo effect on the 0:13:43.480 --> 0:13:46.720 whole space. Now everyone's thinking, Okay, what's the next company 0:13:46.760 --> 0:13:49.800 like that that these tech shians are gonna be shopping for? So, 0:13:50.360 --> 0:13:52.240 you know, I think we'll have to see it play 0:13:52.240 --> 0:13:54.960 out over time. That was Bloomberg Market Senior editor Mike 0:13:55.000 --> 0:13:57.600 Reagan and the editor of Bloomberg Business Week, Joel Weber. 0:13:57.720 --> 0:14:00.520 I feel like I'm not kidding that crystal ball that 0:14:00.679 --> 0:14:04.760 Joel has so right on. How does he know? I 0:14:04.800 --> 0:14:06.840 don't know. He's just smart, all right. Coming up next, 0:14:06.840 --> 0:14:09.080 the power and influence a big tech on Capitol, what 0:14:09.200 --> 0:14:12.240 lawmakers are investing in, and whether a stock trading band 0:14:12.280 --> 0:14:15.160 for members of Congress could be in the offing. Finally, 0:14:15.200 --> 0:14:16.920 haven't they been talking about this for a long time? 0:14:17.200 --> 0:14:19.800 They have, but now we're finally hearing more and more 0:14:19.880 --> 0:14:27.840 public calling for it. This is Bloomberg Broadcasting from the 0:14:27.920 --> 0:14:31.800 financial capital of the World, Bloomberg eleven Rio in New 0:14:31.880 --> 0:14:36.360 York to Washington, d C. Bloomberg to Boston, Bloomberg one 0:14:36.360 --> 0:14:39.480 O six one does San Francisco, Bloomberg nine six to 0:14:39.600 --> 0:14:43.200 the country, Sirius XM, Chamber one nine and around the globe, 0:14:43.280 --> 0:14:47.520 the Bloomberg Business and Bloomberg Radio dot Com. This is 0:14:47.520 --> 0:14:51.520 Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes 0:14:51.560 --> 0:14:56.800 Tim Stenovan on Bloomberg Radio. So we talked a lot 0:14:56.800 --> 0:14:59.160 about the influence of America's largest tech companies have on 0:14:59.160 --> 0:15:02.600 the stock market, and some feel they also have sway 0:15:02.720 --> 0:15:05.160 of the members of Congress as well. In the politics 0:15:05.160 --> 0:15:08.280 section this week, Bloomberg Business Week National correspondent Josh Green 0:15:08.360 --> 0:15:11.080 takes a look at a brewing antitrust fight on Capitol Hill. 0:15:11.600 --> 0:15:15.200 It's getting a bit awkward, Carol, for lawmakers to own 0:15:15.200 --> 0:15:17.440 big tech stocks. One of the things that sort of 0:15:17.520 --> 0:15:19.960 launched this piece was, you know, there's just a lot 0:15:20.040 --> 0:15:22.840 of talk in Washington, a lot of joking among congressional 0:15:22.880 --> 0:15:25.720 staffers that if somebody wanted to start a hedge fund 0:15:25.760 --> 0:15:27.360 and opening ETF, what they ought to do is just 0:15:27.480 --> 0:15:30.600 mimic Nancy Pelosi's trade to make some of the money. 0:15:31.480 --> 0:15:36.120 You know, I went through painstakingly congressional disclosure filings to 0:15:36.240 --> 0:15:40.320 look at how many members of Congress own the four 0:15:40.440 --> 0:15:42.680 big tech stocks that I wrote about, and I chose 0:15:42.720 --> 0:15:48.440 the four Apple, Amazon, Google Alphabet, and Facebook Meta because 0:15:48.720 --> 0:15:51.040 they're the ones targeted by an anti trust build. It's 0:15:51.040 --> 0:15:53.760 moving through the Senate that that, unlike most things in Washington, 0:15:53.800 --> 0:15:57.200 actually has some biports and support. And yeah, I mean 0:15:57.200 --> 0:15:59.080 the numbers that come out that we shown the new 0:15:59.120 --> 0:16:01.720 issues that big, we are just shocking. I mean they are. 0:16:02.320 --> 0:16:06.520 We found ninety five congressmen and senators to collectively own 0:16:07.280 --> 0:16:09.720 um tens of millions, if not over a hundred millions 0:16:09.760 --> 0:16:13.080 of dollars of these just these four tech stocks alone. 0:16:13.240 --> 0:16:16.040 And of course these are the same members of Congress 0:16:16.040 --> 0:16:19.240 they're ultimately going to be designing these companies regulatory fate 0:16:19.840 --> 0:16:21.480 when it comes time to vote on this bill. Do 0:16:21.480 --> 0:16:24.080 you think it could possibly sway them in any way? 0:16:24.160 --> 0:16:27.920 Just say something? I have to say. We talked about 0:16:27.920 --> 0:16:29.640 this so much in the newsroom and it's been something 0:16:29.640 --> 0:16:32.880 that our team we've really been thinking a lot about. Like, 0:16:32.960 --> 0:16:37.120 I am amazed that there isn't already something um uh 0:16:37.560 --> 0:16:39.600 in terms of the Laura are on the books already 0:16:39.600 --> 0:16:43.520 that says no, of course you can't own them. It's 0:16:43.640 --> 0:16:46.120 it's absolutely insane and I think it's right in the 0:16:46.160 --> 0:16:47.960 piece you know, I did a little research, a little 0:16:47.960 --> 0:16:50.560 reporting on like like how did we get to this state? 0:16:50.760 --> 0:16:52.480 And one of the answers I got from people in 0:16:52.520 --> 0:16:55.480 Congress is that, look, it's actually kind of hard. A 0:16:56.000 --> 0:16:58.520 Comress doesn't make it easy to find this stuff. They 0:16:58.600 --> 0:17:01.400 do have to publish disclosure of filings, but like some 0:17:01.480 --> 0:17:03.680 of them are handwritten, like in pen you know what 0:17:03.680 --> 0:17:04.840 I mean. It's not the kind of thing we can 0:17:04.880 --> 0:17:07.480 easily be searched for and rogated. And then it's also 0:17:07.520 --> 0:17:10.760 difficult to figure out from legislation moving through Congress, like 0:17:11.160 --> 0:17:13.119 to be able to connect the dots will center so 0:17:13.200 --> 0:17:16.240 and so owned this company and this bill is going 0:17:16.280 --> 0:17:19.400 to affect it. What makes the current moment so interesting 0:17:19.480 --> 0:17:21.480 is that there's a nanti trust will going through the Senate. 0:17:21.600 --> 0:17:25.240 It really only affects four big companies that are all 0:17:25.400 --> 0:17:28.280 hot tech stocks, and so it was this rare moment 0:17:28.320 --> 0:17:32.240 of convergence what was unusually easy to see and the 0:17:32.280 --> 0:17:35.760 fact that the ownership is so extreme and the public 0:17:35.800 --> 0:17:38.159 has begun to notice this. Uh, you know, there's a 0:17:38.200 --> 0:17:41.120 center from North Carolina, Richard Burr, who was just investigated 0:17:41.119 --> 0:17:44.480 by the SEC. They're not pressing charges, but for his 0:17:44.560 --> 0:17:48.199 ample stock trading. David Produce, a Georgia senator who lost 0:17:48.240 --> 0:17:52.280 his reelection last November in part because of stock trades 0:17:52.320 --> 0:17:54.280 and the impression that he was doing inside of trading. 0:17:54.520 --> 0:17:57.080 So I think the public is finally kind of cottoning 0:17:57.080 --> 0:18:00.359 onto their realization that, oh my gosh, there's so much 0:18:00.400 --> 0:18:02.800 money at stake here, should they really be allowed to 0:18:02.800 --> 0:18:05.080 do this? Most people, if you look at Pole City, 0:18:05.080 --> 0:18:06.960 answer is no. Well it's so interesting, Josh, and I 0:18:07.000 --> 0:18:11.720 remember Senator Kelly Leffler falling under similar criticism in about 0:18:11.720 --> 0:18:14.679 her stock trades. Former senator, everyone's always surprised when I 0:18:14.680 --> 0:18:18.240 tell them that business journalists, if you work for, you know, 0:18:18.280 --> 0:18:21.040 a respectable media outlet, you are not allowed to hold 0:18:21.200 --> 0:18:24.840 individual stock and companies that you follow, Like no brainer. 0:18:25.000 --> 0:18:26.639 Like it's a no brainer because there could be an 0:18:26.680 --> 0:18:29.560 appearance of a conflict of interest, and I'm including myself 0:18:29.600 --> 0:18:33.639 in that category. Right, So it's like it's just I 0:18:33.640 --> 0:18:35.680 think mind blowing to a lot of people that the 0:18:35.680 --> 0:18:39.960 people who are making the rules can also benefit uh 0:18:40.119 --> 0:18:42.160 because of information that they know about what they're going 0:18:42.160 --> 0:18:44.520 to do. Not just that though, but it's about the 0:18:44.560 --> 0:18:47.239 regulatory part of this, right, So okay, take us now 0:18:47.280 --> 0:18:49.159 to where we are because they're The tone has shifted 0:18:49.160 --> 0:18:51.520 a little, even coming from Nancy Pelosi, who has said 0:18:51.720 --> 0:18:53.520 recently that you know, it's a free market, that she 0:18:53.560 --> 0:18:56.960 doesn't think that she should not be allowed to trade stocks. Um, 0:18:57.000 --> 0:19:00.119 what has she said lately? Well, so she said, it's 0:19:00.119 --> 0:19:02.040 just a couple of day reporters went to her and said, hey, 0:19:02.080 --> 0:19:03.879 should this really be allowed? And like, you know, you 0:19:03.920 --> 0:19:06.960 just have ungodly amounts of money any stock that you're regulating, 0:19:07.200 --> 0:19:09.480 and she she kind of haughtily dismissed the idea. Today, 0:19:09.480 --> 0:19:11.760 it's the free country. I should be litist. I mean, 0:19:11.840 --> 0:19:14.480 since then, there has been all sorts of criticism, not 0:19:14.560 --> 0:19:17.960 just a Pelosi um about members of Congress and generally, 0:19:18.440 --> 0:19:21.800 but it's it's just such an easy um. It's so 0:19:21.840 --> 0:19:24.000 easy to the public to see the conflict of interest, 0:19:24.040 --> 0:19:28.119 and it really did draw criticism. Pelosi yourself was criticized 0:19:28.200 --> 0:19:31.280 quite vocally by a former President Trump who who said, look, 0:19:31.320 --> 0:19:34.119 an enormous conflict of interest here. That's coming from a 0:19:34.119 --> 0:19:36.600 guy who knows a thing or two about conflicts of interest. 0:19:37.119 --> 0:19:40.240 I need Pelosi decided that it was just impossible to 0:19:40.400 --> 0:19:42.480 keep up that guy until last week she came out 0:19:42.480 --> 0:19:44.679 and said, well, you know, look, if if Congress decides 0:19:44.760 --> 0:19:47.359 they wants to pass rules, you know, that's up to them. 0:19:47.760 --> 0:19:50.240 And in speaking to kind of good government types who 0:19:50.240 --> 0:19:52.280 are usually very down on this kind of thing, there 0:19:52.280 --> 0:19:54.879 really is some optimism that that these rules are finally 0:19:54.880 --> 0:19:57.600 going to pass and there may finally be um some 0:19:57.680 --> 0:20:00.720 kind of a ban on congressional stock rating. But we'll 0:20:00.760 --> 0:20:02.720 just ratching it back to like what we had Bloomberger 0:20:02.760 --> 0:20:04.680 allowed to do. Right, we can invest our foreign case 0:20:04.720 --> 0:20:07.760 and index funds. No reason that members of the Congress 0:20:07.760 --> 0:20:09.919 shouldn't have to do that too. That was our national 0:20:09.960 --> 0:20:12.680 correspondent for the magazine, Josh Green, also joining as Bloomberg 0:20:12.680 --> 0:20:15.680 Business Week editor Joel Webber. You're listening to Bloomberg business Week. 0:20:15.720 --> 0:20:18.080 Coming up a company well known for its assist come 0:20:18.160 --> 0:20:20.679 tax time, it's now lending a helping hand to its 0:20:20.760 --> 0:20:22.960 main street base. We'll speak with H and R. Blocks 0:20:23.040 --> 0:20:26.040