WEBVTT - Surveillance: US Inflation Cools 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.200 --> 0:00:13.200 with Jonathan Ferrell and Lisa Abramowitz. Daily we bring you 0:00:13.280 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.960 --> 0:00:23.799 Find Bloomberg Surveillance on Apple, podcast, SoundCloud, Bloomberg dot Com, 0:00:23.920 --> 0:00:29.280 and of course on the Bloomberg terminal. He has been 0:00:29.440 --> 0:00:32.879 fabulous out front on the slowdown in GDP. Matthew Lazetti 0:00:32.960 --> 0:00:35.320 joins us with Deutsche Bank with one of the great 0:00:35.360 --> 0:00:38.480 calls of two thousand twenty three or recession. But it's 0:00:38.479 --> 0:00:40.360 out there, son there. I've got to ask you your 0:00:40.479 --> 0:00:44.960 arch call. How have you recalibrated your recession call? And 0:00:45.000 --> 0:00:49.440 how do you recalibrate after this inflation report today? Sure? First, 0:00:49.479 --> 0:00:51.720 thanks so much for having me, Uh, no doubt. You know, 0:00:51.760 --> 0:00:53.440 you look at the headline numbers, you look at core 0:00:54.160 --> 0:00:57.440 better than expected decelerations in a in a number of items. 0:00:58.280 --> 0:01:00.640 I think, interestingly we didn't mention it yet, but rent 0:01:00.640 --> 0:01:03.360 to know we are were actually strong. They rebounded, uh 0:01:03.400 --> 0:01:05.959 and bounce back up point eight point seven percent. Those 0:01:05.959 --> 0:01:07.720 are the sticky items we know we're going to be there. 0:01:08.640 --> 0:01:10.160 I think in terms of you know, the market certainly 0:01:10.160 --> 0:01:11.800 doesn't look at nuance at this point, and I think 0:01:11.880 --> 0:01:14.720 rightfully so because it's at a lower print. But if 0:01:14.760 --> 0:01:16.640 you think about some of the nuances here we u 0:01:16.959 --> 0:01:20.119 Mike mentioned you have medical services inflation in the CPI 0:01:20.319 --> 0:01:22.840 very very weak. That's something that sticks with with us 0:01:22.840 --> 0:01:24.720 throughout the rest of the year. But it's a completely 0:01:24.760 --> 0:01:27.199 different story in PC and so I think a big 0:01:27.920 --> 0:01:30.160 question and kind of story over the next year will 0:01:30.200 --> 0:01:33.200 be PC and cp I are going to converge a lot. Uh, 0:01:33.200 --> 0:01:35.280 They're converge a lot because you have different measures of 0:01:35.319 --> 0:01:37.840 health care inflation in the two of those, and you're 0:01:37.840 --> 0:01:39.880 gonna se disinflation in both of them, but it's gonna 0:01:39.880 --> 0:01:42.160 be less disinflation in the metric that the FED looks 0:01:42.160 --> 0:01:43.920 at and the and the metric that the FED targets. 0:01:43.920 --> 0:01:47.800 How do you think Cham and Pound aviogates this one tomorrow? Uh, 0:01:48.080 --> 0:01:50.200 you know, it's it's one where obviously they can step 0:01:50.240 --> 0:01:52.560 down to fifty basis points. I really do think that 0:01:52.600 --> 0:01:54.360 they want to step down to twenty five basis points 0:01:54.400 --> 0:01:57.160 as quickly as they can, and so data of this 0:01:57.280 --> 0:02:00.000 nature allows them likely to do that. In the February meeting. 0:02:00.040 --> 0:02:02.360 If we get another data point like this, and that 0:02:02.440 --> 0:02:04.760 really then allows them to calibrate policy the best that 0:02:04.800 --> 0:02:06.680 they can. If there is a path to US soft landing, 0:02:07.000 --> 0:02:09.480 going to down to bass points in February helps to 0:02:09.520 --> 0:02:11.760 optimize that. I think they also want to avoid this 0:02:11.840 --> 0:02:14.560 kind of stop start tightening cycle that they may have 0:02:14.600 --> 0:02:17.280 to do, meaning pause only to rehike at some point. 0:02:17.360 --> 0:02:19.520 I think they can avoid that the best by stepping 0:02:19.560 --> 0:02:21.520 down to twenty basis points at the February winning this 0:02:21.560 --> 0:02:23.440 type of data helps that well. Although I do want 0:02:23.480 --> 0:02:24.919 to go to nil Dot's point because it is a 0:02:25.000 --> 0:02:28.160 salient one that this essentially gives people more money on 0:02:28.200 --> 0:02:31.000 a real term, on a real basis in order to 0:02:31.080 --> 0:02:35.200 spend further, which only prolongs this economic cycle for longer. 0:02:35.520 --> 0:02:37.959 How do you factor that into the flip side the 0:02:38.000 --> 0:02:40.440 bullet case, which is saying that there is this natural 0:02:40.480 --> 0:02:44.280 disinflationary cycle that is taking hold and set to accelerate. Yeah, 0:02:44.280 --> 0:02:45.560 and I think it's best to to think of that 0:02:45.600 --> 0:02:48.280 through chair PILs three different components that in the basket. 0:02:48.400 --> 0:02:51.400 You know, we're seeing very clearly core goods and disinflation 0:02:51.400 --> 0:02:53.720 and deflation coming in, you know, Rent and know we 0:02:53.720 --> 0:02:55.920 are we think twelve months ahead, given private rents are 0:02:55.960 --> 0:02:58.560 really going to be decelerating. It's that third part of 0:02:58.560 --> 0:03:00.400 the basket that creates a lot of uncertain DAN is 0:03:00.400 --> 0:03:02.560 tied to the labor market and wage growth, and there 0:03:02.600 --> 0:03:06.040 I think core services X shelter where we're likely to 0:03:06.040 --> 0:03:08.480 see in healthcare and these other components as we look ahead. 0:03:08.840 --> 0:03:10.960 If you're not seeing demand destruction as much as the 0:03:10.960 --> 0:03:14.120 FED needs, if you're seeing financial conditions ease substantially on 0:03:14.200 --> 0:03:16.800 these data, it does make their job harder. On that 0:03:16.840 --> 0:03:18.360 part of the basket. We can still see a lot 0:03:18.360 --> 0:03:20.920 of disinflation, but the question is does that get us 0:03:20.960 --> 0:03:22.679 simply from where we are to three percent? How do 0:03:22.720 --> 0:03:24.320 we get from three percent to two percent? And that's 0:03:24.360 --> 0:03:25.959 I think the more difficult part. I think on number 0:03:26.000 --> 0:03:28.720 one question for cham and Pounds tomorrow, the risk of 0:03:28.800 --> 0:03:30.679 doing too little? Does it still out why the risk 0:03:30.680 --> 0:03:32.960 of doing too much? How do you think he answers 0:03:33.040 --> 0:03:38.080 that tomorrow? I think he's still leans towards yes, meaning 0:03:38.120 --> 0:03:42.240 that they still want to lean towards overtightening rather than undertightening. 0:03:42.760 --> 0:03:44.520 But I think the committee is very divided on that 0:03:44.520 --> 0:03:46.960 that question um and I think he will have to 0:03:47.000 --> 0:03:49.640 balance that, and the more data we get of this nature, 0:03:49.680 --> 0:03:52.360 certainly that the risk balance comes comes into better balance 0:03:52.480 --> 0:03:55.240 as we look ahead, you know, stepping back, it's two 0:03:55.320 --> 0:03:59.360 data points. We're still at above course c P. I uh. 0:03:59.400 --> 0:04:01.200 They've been harised a few times in the past, and 0:04:01.200 --> 0:04:02.920 so I think that they will be very cautious about 0:04:02.920 --> 0:04:04.840 pulling the PUG. I think that's why I'm far more 0:04:04.880 --> 0:04:08.160 interesting Tom in the risk management question for Chairman Poal. 0:04:08.520 --> 0:04:11.000 You brought, agree with Max, a couple of months of data. 0:04:11.320 --> 0:04:13.560 We'll get the projections for whatever they're worth. But ultimately 0:04:13.560 --> 0:04:16.320 the risk management question tells you a little something actually 0:04:16.360 --> 0:04:18.320 about the bus of this FED going forward. I agree, 0:04:18.360 --> 0:04:21.520 And I had fold into that another phrase financial stability, 0:04:21.600 --> 0:04:24.080 which has really slipped away in the dialogue the last 0:04:24.160 --> 0:04:27.240 number of weeks. It was their big particularly the I 0:04:27.360 --> 0:04:29.760 m F perhaps on the SMPS back at four k, right, 0:04:30.000 --> 0:04:33.800 people aren't so worried about financial stability. Apparently we want 0:04:33.800 --> 0:04:35.480 to see it. I mean, we've got to continue to 0:04:35.560 --> 0:04:37.960 answer John, are we threw highs yet in this recovery 0:04:38.000 --> 0:04:40.839 and we went up and we pulled back, But I 0:04:40.839 --> 0:04:42.440 mean there's still a move from more than two percent 0:04:42.600 --> 0:04:46.760 on sp it's a party. Move yelds down by fourteen 0:04:46.839 --> 0:04:48.920 or fifteen basis points right the way through the curve. 0:04:48.960 --> 0:04:51.200 Two's out to tens and that dollar witness and make 0:04:51.240 --> 0:04:54.760 sure wrote dollar one six thirty four and big deal. 0:04:55.640 --> 0:04:57.640 I've got my cat ready to go to John. Very 0:04:57.640 --> 0:05:01.479 good to get to am as well, Matthew Lozetti of 0:05:01.560 --> 0:05:05.560 Deutsche Bank. Thank you so uh this is important. Now 0:05:05.600 --> 0:05:08.560 we need to get an equity update as well. John, 0:05:08.560 --> 0:05:09.880 do you want to tell us about the nine o'clock 0:05:09.920 --> 0:05:12.680 and something about moving on? Well, I want to move on, 0:05:12.760 --> 0:05:18.080 but you know I'm not focused on Croatia beat Argentina 0:05:18.360 --> 0:05:20.640 with the new slow that we had to shocked. I 0:05:20.680 --> 0:05:22.560 mean Troy guy asked his only book because you want 0:05:22.560 --> 0:05:25.039 to talk World Cup soccer with him? Does have a 0:05:25.160 --> 0:05:27.880 chance of Mark and Stanley. That's the tastes it. Troy's 0:05:27.880 --> 0:05:31.320 here to talk football, FS investments, Matt hornback to talk 0:05:31.320 --> 0:05:34.440 about what he's here for football Stanley. Gary Chattery has 0:05:34.440 --> 0:05:38.160 given us the preview for tomorrow France. Yeah, big fan. 0:05:38.240 --> 0:05:40.160 Looking forward to that conversation and the next time I'm 0:05:40.160 --> 0:05:43.600 blame back answer my question. You have a choice, just 0:05:44.200 --> 0:05:47.080 Lozette does Deutsche Bank. Just that's not even set down 0:05:48.440 --> 0:05:50.800 Deutch Bank, Like does the whole place just stop at 0:05:50.800 --> 0:05:59.560 two o'clock. Yeah, okay, you can go to I can 0:05:59.640 --> 0:06:03.120 leave us. Wonderful this CoA have a chance. The answer 0:06:03.240 --> 0:06:05.159 is yes, of course they have a chance. Look what 0:06:05.200 --> 0:06:08.280 they did to Brazil. Okay, okay, that's a final word 0:06:08.279 --> 0:06:21.080 here we get lucky this morning. Joanna us around the table. 0:06:21.279 --> 0:06:25.320 Julian Emmanuel, the chief equity strategistic ever Core Si. Julian, 0:06:25.360 --> 0:06:28.320 good morning, good morning. We haven't had the cathartic moment 0:06:28.440 --> 0:06:31.000 according to you that the low earlier on this year 0:06:31.080 --> 0:06:33.520 is a low, not v low of this bear market. 0:06:33.600 --> 0:06:37.680 Why look, if you look at past bear markets, there 0:06:37.800 --> 0:06:40.120 is always that moment, and even in the sort of 0:06:40.160 --> 0:06:43.960 strange ones like the fourth quarter of ofen when we 0:06:43.960 --> 0:06:47.000 were in that you know, three month de grossing bear market, 0:06:47.400 --> 0:06:50.040 you still had a cathartic moment where people just said 0:06:50.400 --> 0:06:54.160 get me out um. And essentially that kind of selling 0:06:54.600 --> 0:06:57.920 pressure really creates the buying opportunity. And for us, when 0:06:57.960 --> 0:07:01.960 you look at two, yes, fatility has remained elevated and 0:07:02.000 --> 0:07:04.680 we have strangeness going on this week with the Vicks 0:07:04.720 --> 0:07:08.039 climbing as the market has climbed, but you have not 0:07:08.279 --> 0:07:11.160 had that moment of pat There really has been very 0:07:11.200 --> 0:07:13.640 little emotion in this two questions. What's a vixed level 0:07:13.640 --> 0:07:16.480 you need to see? It's not forty, is it? Uh? 0:07:16.760 --> 0:07:21.880 Ultimately will be cool. Everybody wants to know when you're 0:07:21.920 --> 0:07:24.560 sitting at that little table that that ed Hyman's got 0:07:24.600 --> 0:07:27.640 with a black pen. How you link the Emmanuel world 0:07:27.680 --> 0:07:30.120 into the ed Hyman world? You do it? In your 0:07:30.120 --> 0:07:33.920 note is ad alludes back to the seventies, the forties 0:07:34.040 --> 0:07:37.160 and the thirties. How is this inflation in this moment 0:07:37.240 --> 0:07:40.200 in the next year allude back to those troubled times. 0:07:40.400 --> 0:07:43.400 So it is very clear on this and and we 0:07:43.400 --> 0:07:47.040 we certainly agree wholeheartedly this is not the nineties seventies. 0:07:47.240 --> 0:07:51.160 The metastasizing effect of inflation uh at that we had 0:07:51.240 --> 0:07:54.200 for an entire decade is not there. Uh you know, 0:07:54.320 --> 0:07:57.520 clearly we've had these problems. However, we're on the other 0:07:57.560 --> 0:08:00.120 side of it. We're seeing these readings start to come in. 0:08:00.760 --> 0:08:03.640 But the other aspect of it, thinking about the nineteen 0:08:03.680 --> 0:08:07.640 thirties and the es and actually en seventy itself, is 0:08:07.680 --> 0:08:11.640 this decline in in money supply. M two going negative. 0:08:12.200 --> 0:08:16.000 That's a risk that the FED might have to step 0:08:16.040 --> 0:08:20.440 back and reassess. Just do you understand that so ce 0:08:20.600 --> 0:08:22.920 J Lawrence. I mean you're taking head back to see J. 0:08:23.040 --> 0:08:25.600 Lawrence when we go into him three m. This Well, 0:08:26.120 --> 0:08:29.920 it's look that Thursday afternoon release of the money supply 0:08:30.120 --> 0:08:34.040 was world stopped. Absolutely. What's going to lead the equity 0:08:34.080 --> 0:08:37.040 index is lower at this point, given that big tech 0:08:37.080 --> 0:08:42.800 has already sold off disproportionately, we think that story has 0:08:43.200 --> 0:08:46.080 more to be written. If you look at it value 0:08:46.200 --> 0:08:50.680 versus growth. The extremes are certainly less extreme after the 0:08:50.760 --> 0:08:53.880 year that we've had of growth under performance, but there 0:08:54.000 --> 0:08:59.320 is still really an embedded passion for let's say, fang 0:08:59.800 --> 0:09:03.280 uh amongst the part of the public whose equity holdings 0:09:03.559 --> 0:09:07.199 remain near all time highs as a percentage of household 0:09:07.200 --> 0:09:09.160 net worth, and we think that is going to be 0:09:09.200 --> 0:09:12.680 worked off in certainly the first six months or so. 0:09:12.800 --> 0:09:15.719 Can we talk about consensus just briefly. You published a 0:09:15.720 --> 0:09:17.880 little bit later in the year you white it. You 0:09:17.960 --> 0:09:19.720 white it, you published, and it sounds a lot like 0:09:19.840 --> 0:09:22.120 what we've heard already, which is next year dip and 0:09:22.120 --> 0:09:25.480 then we rip when we end the year at that's 0:09:25.480 --> 0:09:27.760 the call from ever coot Julian. How do you feel 0:09:27.760 --> 0:09:30.880 when everyone sank the same thing about a year ahead? 0:09:31.200 --> 0:09:35.560 Very uncomfortable, very no bones about it. And I will 0:09:35.600 --> 0:09:39.960 say that the most bullish thing about the set up 0:09:40.080 --> 0:09:43.480 right now is the fact that my competition on the 0:09:43.520 --> 0:09:47.640 strategy side, the average price target is four thousand. Okay, 0:09:47.720 --> 0:09:50.839 And you know I am not a raging bull by 0:09:50.880 --> 0:09:53.240 having a last time we were forecast in a flat 0:09:53.280 --> 0:09:57.000 market rent. I don't remember it. I don't know that 0:09:57.040 --> 0:10:01.800 there's any precedent for whatsoever. And that, along with the 0:10:01.840 --> 0:10:06.640 fact that this recession is the most anticipated recession of 0:10:06.679 --> 0:10:10.720 our entire lifetimes, really gives you pause for the potential 0:10:10.760 --> 0:10:13.480 for upside here. So where could the consensus and you 0:10:13.600 --> 0:10:18.040 be wrong if the recession doesn't come. Okay, we all 0:10:18.080 --> 0:10:21.160 know what's happening, we all know what the components of 0:10:21.200 --> 0:10:24.400 it are. But again, think about it. Would we have 0:10:24.520 --> 0:10:27.959 ever thought that we would have seen two negative quarters 0:10:28.000 --> 0:10:30.640 of GDP like we saw in the beginning of this 0:10:30.760 --> 0:10:33.680 year and that not be labeled a recession for the 0:10:33.720 --> 0:10:37.160 first time since the nineties. If somehow we skate on 0:10:37.280 --> 0:10:41.640 through you know, zero growth slightly below zero, Ed's forecasts 0:10:41.720 --> 0:10:45.559 zero percent GDP. That implies a mild recession. But if 0:10:45.559 --> 0:10:49.000 it doesn't happen, there is you know, upside in our view. 0:10:50.000 --> 0:10:53.160 Do you remember when you were challenged with talking about bitcoin? Gentmen, 0:10:53.200 --> 0:10:57.440 A good old thanks. I do. And and basically from 0:10:57.440 --> 0:11:00.360 our point of view in in thinking about it though 0:11:00.880 --> 0:11:04.680 is and we talked about this constantly, is that you're 0:11:04.720 --> 0:11:10.800 interviewing it continue is that there's an aspect of the technology, 0:11:10.920 --> 0:11:14.199 the blockchain. Most people would agree that there's validity to 0:11:14.800 --> 0:11:19.120 that technology, the same way there was validity to the 0:11:19.120 --> 0:11:23.559 transcontinental railroad system in the eighteen seventies, but yet the 0:11:23.760 --> 0:11:27.880 entire industry went bankrupt during the decade of the eighteen seventies. 0:11:28.520 --> 0:11:33.160 Before for further economics, a space that attracted a lot 0:11:33.160 --> 0:11:36.160 of capital and a lot of coverage, you covered it 0:11:36.200 --> 0:11:38.480 at your own shop. And I just wonder, for let's 0:11:38.559 --> 0:11:41.200 use that the core as an example, how difficult would 0:11:41.200 --> 0:11:43.120 it be to convince Himan now that this is something 0:11:43.120 --> 0:11:46.200 we should cover at the firm. Well, look, and isn't 0:11:46.200 --> 0:11:47.520 that kind of the point right now that this is 0:11:47.520 --> 0:11:49.079 going to be kind of hands off for the doubts 0:11:49.120 --> 0:11:51.800 for a long long time still to come. There's no 0:11:51.880 --> 0:11:54.480 question about the fact. And then again, if you think 0:11:54.520 --> 0:11:57.680 about the price action, the price action is telling you something. 0:11:58.000 --> 0:12:01.680 The fact that since this scandal was uncovered, the price 0:12:01.720 --> 0:12:07.679 of bitcoin really hasn't moved materially lower after the initial uh, 0:12:07.720 --> 0:12:11.120 you know, tribulations. It tells you that there is a 0:12:11.160 --> 0:12:15.680 fundamental belief in the technology, but yet is is typical 0:12:16.000 --> 0:12:19.040 for most markets. Once there's that sort of feeling of disgust, 0:12:19.440 --> 0:12:22.240 you're gonna have a year, two years, three years, maybe 0:12:22.240 --> 0:12:25.560 more of just sideways price action to where only the 0:12:25.600 --> 0:12:29.240 true believers remain in the industry, and then likely you 0:12:29.240 --> 0:12:31.480 have your next bat of progress to you were taken 0:12:31.520 --> 0:12:36.880 about exactly that. I'm trying. I go with the railroad analogy, 0:12:36.920 --> 0:12:39.160 but I can't go there. I think this is something else, 0:12:39.440 --> 0:12:41.880 and I go back to Ken Rogoff in his most 0:12:41.880 --> 0:12:45.240 courageous book I've ever seen of the Generation, The Curse 0:12:45.360 --> 0:12:49.960 of Cash. This is about non regulation. It's like finance, 0:12:50.080 --> 0:12:52.680 far more international than ft X. I'm speaking as an 0:12:52.679 --> 0:12:55.520 amateur there, don't quote me. And the idea of this 0:12:55.679 --> 0:12:58.960 not that it was a scam, but it was wrapped 0:12:59.000 --> 0:13:03.199 around un regulated activity from day one and this morning, 0:13:03.320 --> 0:13:06.680 John the regulators. The adults showed up this morning. Well, 0:13:06.720 --> 0:13:11.000 the headlines and the adults, the sec challenging bankman freight 0:13:11.040 --> 0:13:15.000 with the frauding investors, Judy, and this was great. He 0:13:15.200 --> 0:13:17.240 can we just do this on a monthly basis, maybe 0:13:17.240 --> 0:13:19.480 even you know, every two weeks, just coming to the 0:13:19.480 --> 0:13:23.720 studio him and along, I'll sit out, you can, you know, okay? 0:13:23.760 --> 0:13:34.080 Instead of counting a proto conversation. It's extremely important that 0:13:34.120 --> 0:13:36.480 we dovetail in here first of all, to find the 0:13:36.480 --> 0:13:40.160 one congressman in America that will root for Croatia today 0:13:40.200 --> 0:13:43.280 against Argentina. And that would be the gentleman who is 0:13:43.320 --> 0:13:46.680 the fabric and soul of Dutch America. This is in 0:13:46.760 --> 0:13:51.680 western Michigan, North Kalamazoo. It is the second Congressional district 0:13:51.679 --> 0:13:56.640 of Michigan. Yes conservative, Yes, Dutch American, but also fixated 0:13:56.760 --> 0:14:00.320 on the new finance of America. Buildozinga joins us right now, 0:14:00.400 --> 0:14:03.920 Republican from Michigan, thrilled he could uh join us today. 0:14:03.920 --> 0:14:06.480 I've got to talk world coupy of the congressman first though, 0:14:06.760 --> 0:14:09.199 you've got to be rooted after what the Netherlands went 0:14:09.200 --> 0:14:13.679 through with Argentina. I mean Croatia has a chance today, right, Yeah, 0:14:13.760 --> 0:14:16.120 Croatia has got a chance today. Now, I will note 0:14:16.160 --> 0:14:20.040 that the Dutch beat the United States. That was a 0:14:20.040 --> 0:14:23.680 little tougher conversation. But I know all the football talk 0:14:23.720 --> 0:14:26.800 has gotten me very excited about my Detroit Lions. So 0:14:26.840 --> 0:14:29.000 that's true, hottest team in the NFL. So a little 0:14:29.000 --> 0:14:31.240 different football that is. I've got it's it's gonna be 0:14:31.320 --> 0:14:33.560 a good day. I've got Michael Barb briefing me on 0:14:33.600 --> 0:14:36.240 that in Bloomberg Radio on a daily basis a legend 0:14:36.280 --> 0:14:39.560 from Detroit to the east. Congressman, I must ask you 0:14:39.680 --> 0:14:43.480 about this meeting this morning at ten am, all the 0:14:43.480 --> 0:14:46.480 emotion and all the politics. I want you to take 0:14:47.240 --> 0:14:54.400 the bizarreness of bitcoin, crypto, blockchain. How do you explain 0:14:54.640 --> 0:15:00.840 this moment to your conservative constituency. Yeah, Constituty, seeing frankly 0:15:01.040 --> 0:15:05.080 two colleagues as well, and uh, we've all of us 0:15:05.120 --> 0:15:08.320 on the Financial Services Committee have had uh colleagues of 0:15:08.320 --> 0:15:11.120 ours coming up to us. Uh and you know, and 0:15:11.320 --> 0:15:14.960 and not to mention obviously the constituents saying what is 0:15:15.000 --> 0:15:18.440 going on with this? And the sad element of this, 0:15:18.520 --> 0:15:22.640 Tom is that this situation is creating the conversation, which 0:15:22.800 --> 0:15:24.800 is not a healthy one, or the direction we should go, 0:15:25.200 --> 0:15:27.600 which is maybe we should just ban all of this. 0:15:27.960 --> 0:15:30.400 You know, it's too confusing, it's a way too many 0:15:30.640 --> 0:15:33.920 options and our opportunities to to cheat, lie, steal in it. 0:15:34.200 --> 0:15:36.760 So how about we just ban it? Well, that's not 0:15:36.760 --> 0:15:39.560 gonna happen, you know, and we we've got to remember 0:15:39.640 --> 0:15:41.880 that this is more than just about crypto. It is 0:15:41.920 --> 0:15:45.320 about the blockchain technology that underlies that, and that is 0:15:45.320 --> 0:15:49.440 going to be transformative for the financial services but also healthcare, 0:15:49.560 --> 0:15:52.080 you name it. I mean, on my backgrounds in construction 0:15:52.120 --> 0:15:54.720 and housing, Um, you look at what you're gonna be 0:15:54.760 --> 0:15:57.880 able to do in that field with with blockchain technology. 0:15:57.960 --> 0:16:01.440 It's all very exciting. But this which appears to have 0:16:01.520 --> 0:16:05.680 all the hallmarks of Enron and Bertie Maynoff blended together, 0:16:05.880 --> 0:16:08.920 named Sam Bankman freed Uh, that is putting a very 0:16:08.960 --> 0:16:11.800 different spin on what the what the conversation has been 0:16:11.840 --> 0:16:15.760 here in Washington. Congressman, how give you the timing of 0:16:15.800 --> 0:16:19.480 the arrest given the planned meeting this morning on Capitol 0:16:19.560 --> 0:16:24.080 Health Well, um, I would assume I would certainly, let's 0:16:24.120 --> 0:16:29.000 hope that that Ginzler's revised calendar release yesterday had nothing 0:16:29.040 --> 0:16:31.480 to do with that. But I have been talking to 0:16:31.720 --> 0:16:36.320 a number of my colleagues who were former prosecutors, who 0:16:36.400 --> 0:16:38.560 are saying, well, wait a minute, this if if you're 0:16:38.640 --> 0:16:44.680 giving a witness or a potential UH potential mark UH 0:16:44.720 --> 0:16:48.320 an opportunity to come in under oath, spend four hours 0:16:48.400 --> 0:16:52.720 in you know, just freewheeling conversation with Congress where they 0:16:52.800 --> 0:16:55.680 might just end up purjuring themselves. Why would you not 0:16:55.840 --> 0:16:58.520 give them that opportunity. So it's got a lot of 0:16:58.560 --> 0:17:01.400 just kind of question marks around own that about the timing. 0:17:02.160 --> 0:17:04.960 I'm welcome his arrest. I what I don't understand is 0:17:04.960 --> 0:17:07.600 why it wasn't a week ago or a week from now. 0:17:08.119 --> 0:17:10.399 Why did it have to be yesterday or last evening? 0:17:10.440 --> 0:17:12.280 What do you think would have been accomplished and what 0:17:12.320 --> 0:17:16.400 do you want to be accomplished at today's meeting. Yeah. Well, 0:17:16.960 --> 0:17:19.440 and of course, as you know we're having UH the 0:17:20.000 --> 0:17:23.760 new interim CEO Ray is coming in UH and I 0:17:23.760 --> 0:17:26.760 would have wanted to hear his answer. The conversation that 0:17:26.800 --> 0:17:29.280 I was going to have was going to be surrounding 0:17:29.720 --> 0:17:33.479 uh FTX dot com. You know, the separation between uh 0:17:33.880 --> 0:17:37.560 US as well as international funds, and was there commingling 0:17:37.640 --> 0:17:41.399 of that illegally potentially if there was a U S 0:17:41.400 --> 0:17:45.639 dollars getting put into those international funds like that, I 0:17:45.680 --> 0:17:48.600 wanted to hear from both of them what their take 0:17:48.760 --> 0:17:51.000 was and whether there was any any evidence of that, 0:17:51.040 --> 0:17:53.640 because I want to protect US consumers and I want 0:17:53.640 --> 0:17:56.199 to protect US taxpayers as well, because there's obviously been 0:17:56.200 --> 0:17:59.280 some plans for we gotta bail it out, which can't happen. 0:17:59.359 --> 0:18:01.560 I mean, people have looking for the Secretary of Treasury, 0:18:01.560 --> 0:18:03.800 whether it's yelling or before. I mean, you know this 0:18:03.800 --> 0:18:08.240 stretches back a number of years and administrations, Congressmen, but 0:18:08.400 --> 0:18:11.920 you've got to believe at some point we decide if 0:18:12.000 --> 0:18:15.840 bitcoin and all that is an asset, is it blodable, 0:18:15.920 --> 0:18:20.160 can you audit it? And can it provide text advantage 0:18:20.240 --> 0:18:22.200 when it has a huge gain to the I R 0:18:22.359 --> 0:18:24.560 S and such? Are we at that point right now 0:18:24.840 --> 0:18:27.040 where we need to codify bitcoin to be an I 0:18:27.200 --> 0:18:31.040 R S item? Well, there's not consensus of that yet. 0:18:31.800 --> 0:18:35.000 And look you've got you've got some arguing it's commodity, 0:18:35.119 --> 0:18:37.600 some arguing it's a security. Uh, you know, we like 0:18:37.720 --> 0:18:40.080 things to be either fish or foul here in Washington, 0:18:40.119 --> 0:18:42.640 d C. And it turns out this is a platypus right, 0:18:42.680 --> 0:18:46.000 it's got it's got hallmarks of both UH and we 0:18:46.000 --> 0:18:51.520 we have not reached that consensus. Clearly, Gensler Chair Gensler believes, well, 0:18:51.640 --> 0:18:53.119 he did believe when he has had to see f 0:18:53.200 --> 0:18:55.600 TC that it was a commodity. He now seems to 0:18:55.640 --> 0:18:59.439 think it's a security. But you know, we we we 0:18:59.480 --> 0:19:02.040 are going have to wrestle with this one right now. 0:19:02.320 --> 0:19:03.960 I should know it. Also, by the way, we have 0:19:04.080 --> 0:19:06.800 not seen Gary Ginsler in front of our committee in 0:19:06.960 --> 0:19:10.679 over a year. It was last October. So Lisa was asking, 0:19:10.680 --> 0:19:12.199 you know, what kind of questions you would like to 0:19:12.240 --> 0:19:15.080 ask today. I'd like to ask what has the interaction 0:19:15.160 --> 0:19:19.080 been with this Curies in Exchange Commission UH leading up 0:19:19.080 --> 0:19:22.040 to this point? And that's a very important thing. Sam 0:19:22.040 --> 0:19:24.200 Bankman Freed was here in December of twenty one. It's 0:19:24.240 --> 0:19:26.440 ironic that he would have been here more often than 0:19:26.440 --> 0:19:29.240 Gary Ginslo in front of our committee. Carson, I've got 0:19:29.240 --> 0:19:30.920 to ask you this, and we do this with all 0:19:30.960 --> 0:19:34.840 of our politicians, particularly when they're not lawyers. You are 0:19:35.080 --> 0:19:41.200 steeped in the core industrial process of America and sand, gravel, 0:19:41.800 --> 0:19:44.920 crushed stone, that's what you do out in western Michigan. 0:19:45.400 --> 0:19:50.800 How do we jump start investment in those core industrial 0:19:51.040 --> 0:19:55.560 and housing construction processes. What does Washington need to do 0:19:56.080 --> 0:20:00.920 to help somebody not busy and gravel right now? Yeah, Well, 0:20:00.960 --> 0:20:03.480 and here's the interesting thing, Tom, is we actually are 0:20:03.520 --> 0:20:06.800 pretty busy. Infrastructure has continued to go on, and your 0:20:06.880 --> 0:20:09.320 last guest was talking about that, you know, some of 0:20:09.320 --> 0:20:13.800 those underlying pressures that normally would have had us going 0:20:13.800 --> 0:20:17.640 in a different direction. As we've seen inflationary pressures still continue. 0:20:17.960 --> 0:20:20.080 There's still a lot of activity, but we've got to 0:20:20.400 --> 0:20:24.120 we've got to solve this. Uh. The supply chain part 0:20:24.119 --> 0:20:27.679 of that is in construction, is is making sure that 0:20:27.680 --> 0:20:31.240 we've got domestic oil production in world oil production because 0:20:32.320 --> 0:20:34.960 of a barrel of oil goes into PVC pipe, shingles, 0:20:35.000 --> 0:20:37.800 ash for all the you know, siding, all of those things. 0:20:37.840 --> 0:20:40.040 So if we're if we're looking at how to housing 0:20:40.160 --> 0:20:43.360 and infrastructure, we've got to make sure that the materials 0:20:43.480 --> 0:20:46.800 and the labor is actually there and available. Cox thank 0:20:46.840 --> 0:20:48.560 you so much for your time today. From the second 0:20:48.600 --> 0:21:02.119 District of Michigan, Billa Zinga, thank you. We have inflation 0:21:02.280 --> 0:21:05.240 here in two hours, and part of inflation has been 0:21:05.359 --> 0:21:08.080 your gallon of gas. And for business diesel and Maria 0:21:08.200 --> 0:21:11.320 send has been a huge value of Bloomberg surveillance in 0:21:11.320 --> 0:21:15.639 Bloomberg worldwide and joins US now from energy aspects uh 0:21:15.680 --> 0:21:19.560 A Marina. Is oil disinflating or is it becoming a 0:21:19.640 --> 0:21:23.920 true deflation area item within the reports at eight thirty. 0:21:24.840 --> 0:21:28.680 I mean, look, in the near term, it's obviously been deflationary, right, 0:21:28.760 --> 0:21:32.600 We've seen all the prices collapse. But I will say 0:21:32.600 --> 0:21:35.000 this has got very little to do with fundamentals. Yes, 0:21:35.000 --> 0:21:37.760 there were good fundamental reasons why you know, we were 0:21:37.760 --> 0:21:40.720 expecting around the year end that did materialize, given the 0:21:40.760 --> 0:21:45.240 new Chinese long gowns, French strikes, all of those factors. Right, Sure, 0:21:45.320 --> 0:21:48.840 we should have probably been in the low nineties, late eighties, 0:21:48.960 --> 0:21:51.960 but not collapsing down to where we have. I'm talking 0:21:52.000 --> 0:21:54.920 about Brent here of fort Um. This has been a 0:21:55.000 --> 0:21:58.359 massive year end liquidation event, Lots and lots of funds 0:21:58.359 --> 0:22:01.440 of liquidated and I think that's what's drag prices here, 0:22:01.480 --> 0:22:05.439 and that's obviously been deflationary, at least in the near term. 0:22:05.480 --> 0:22:07.760 I just don't think this is gonna last. Well, it's 0:22:07.800 --> 0:22:09.520