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Speaker 1: This is Bloomberg day Break Weekend, our global look at

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Speaker 1: the top stories in the coming week from our Daybreak

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Speaker 1: anchors all around the world, and just a hint on

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Speaker 1: the program, politicians are pushing for more regulation in the

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Speaker 1: crypto industry. I'm John Tucker in New York. I'm Stephen

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Speaker 1: Carol in London, where the economic picture across Europe looks

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Speaker 1: less gloomy than expected after inflation east up in November.

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Speaker 1: But there could be more body news on the way.

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Speaker 1: I'm dead Chrisner to the central banks of Australia and

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Speaker 1: India take cues from the Fed. I'm Amy Morris in Washington.

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Speaker 1: We're watching the Senate runoff in Georgia. That's all straight

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Speaker 1: ahead on Bloomberg Daybreak Weekend on Bloomberg eleven three on

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Speaker 1: New York, Bloomberg one, Washington d C, Bloomberg one oh

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Speaker 1: six one, Boston, Bloomberg nine sixties, San Francisco d A B,

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Speaker 1: Digital Radio, London, Sirius XM one nineteen and around the

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Speaker 1: world on Bloomberg Radio dot Com and via the Bloomberg

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Speaker 1: Business App. Hi, everybody, I'm John Tucker, and let's start

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Speaker 1: today's program with the swirl of crypto chaos and joining

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Speaker 1: me now Bloomber, Katie Greiphil and Katie, we've had some

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Speaker 1: big crypto companies go bust. The contagion and ripple effects

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Speaker 1: still swirling as we speak. Here's Tim Adams, he's the

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Speaker 1: CEO of the Institute of International Finance. Bubbles are gonna

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Speaker 1: pop and f t X as an example of business

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Speaker 1: plans are made on a napkin that just didn't work.

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Speaker 1: But I don't think it's crypto per se. I think

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Speaker 1: what we saw with that particular enterprise is just really

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Speaker 1: bad governance in bad oversight, bad governance and bad oversight,

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Speaker 1: as he puts it. In the other coming weeks, we're

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Speaker 1: gonna have the House Financial Committee convened for a hybrid

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Speaker 1: hearing entitled Investigating the Collapse of f t X, Part One.

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Speaker 1: So Katie, um, the horses left the barn and now

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Speaker 1: it's time to close the barn doors. Hab. I mean,

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Speaker 1: it's a complicated regulatory puzzle here. Who actually has oversight,

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Speaker 1: especially in the case of f t X. I mean,

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Speaker 1: clearly there was some failing here, but just a reminder

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Speaker 1: of what we're dealing with. This was a Bahamas based exchange.

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Speaker 1: What a US regulatory agency should have done about that

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Speaker 1: as an open question right now. Congressional hearings usually don't

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Speaker 1: get my attention, but I'll be sitting down with a

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Speaker 1: big bowl of popcorn for this one. What do you expect?

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Speaker 1: Is he going to show up? Sam Bankman Freed, the

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Speaker 1: head of bankrupt Well, he's given an interview to just

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Speaker 1: about everyone. It feels like I think that the reporting

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Speaker 1: has shown that they would like him to be in

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Speaker 1: person physically there, whether or not he will actually come

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Speaker 1: to you. Maybe he shouldn't come to the US because

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Speaker 1: somebody's gonna want to put some cufflings on him. Hopefully

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Speaker 1: he's talking to his lawyers. I'm not I'm not sure

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Speaker 1: who's advising him here. But in any case, uh, theoretically

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Speaker 1: he will be appearing in front of Congress, or at

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Speaker 1: least that is the hope. But I don't know he has.

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Speaker 1: We've heard a lot from him between the New York

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Speaker 1: Times interview, his tweets, the reporting from other outlets as well.

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Speaker 1: What did he say in that that interview with andrews

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Speaker 1: ross Sorkin? It was pretty amazing. I mean, the big

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Speaker 1: takeaway is that he said that he wasn't trying to

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Speaker 1: commit fraud. So the intent was, well, no, I'm not

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Speaker 1: sure that you know in the annals of fraud history

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Speaker 1: that you really start off trying. It's sort of like

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Speaker 1: a well worn path, like unless you're a cartoon villa

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Speaker 1: in theoretically most people don't start off with fraud in mind.

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Speaker 1: But I mean, he was very candid. It was a

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Speaker 1: long interview. First of all, this of course, was at

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Speaker 1: the New York Times deal Book summit with Andrew Ross Sorkin.

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Speaker 1: He said, I made a lot of mistakes. There are

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Speaker 1: things I would give to be able to do it

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Speaker 1: over again again and again. I didn't ever try to

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Speaker 1: commit fraud. There was a lot of talk about whether

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Speaker 1: he knew that the customer deposits at f t X

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Speaker 1: were being com mingled with the trading shop, which is

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Speaker 1: Alameda Research, which when you put you know, customers funds

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Speaker 1: into different accounts, that's that's a big no no. Yeah,

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Speaker 1: for sure that that is typically on the naughty list,

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Speaker 1: And the Wall Street Journal has reported that that's exactly

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Speaker 1: what was happening, that they were basically funneling those customer

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Speaker 1: funds into the trading shop to fuel those risky bets.

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Speaker 1: And you end up with a ton of leverage and

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Speaker 1: when the market moves against you, here we are. Yeah.

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Speaker 1: I don't want to get too complicated, but f t

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Speaker 1: X was not just a platform, but it was other

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Speaker 1: stuff too. There was a hedge fund, did you pointed

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Speaker 1: out and they had their own token, right, yes, So

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Speaker 1: the exchange out of token, the f t T token,

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Speaker 1: which it's hard to describe. I mean, Matt Levine of

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Speaker 1: Bloomberg Opinion has basically described it as kind of like

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Speaker 1: equity in the exchange itself. But I mean, to your point.

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Speaker 1: The thing about the crypto industry, the reason that it

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Speaker 1: has this very uh, these strong connections, this interconnectedness, is

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Speaker 1: because a lot of these companies are wearing a lot

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Speaker 1: of hats that would be separate roles in the traditional

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Speaker 1: finance world. It's not uncommon for a firm in the

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Speaker 1: crypto industry to be a custodian, to be a brokerage,

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Speaker 1: to be in exchange. Again, those are all distinct roles

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Speaker 1: in the world of traditional finance. But these crypto companies

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Speaker 1: were putting them all under one house, and then it

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Speaker 1: sort of creates this really what can be an unstable situation,

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Speaker 1: as we've seen play out and he complained about too

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Speaker 1: much regulation. He did so he felt like he had

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Speaker 1: spent too much time trying to get licenses for f

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Speaker 1: t x. Uh. He said of the regulatory process that

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Speaker 1: he had spent hundreds even thousands of hours meeting with

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Speaker 1: regulators to try and get approval for f t x US,

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Speaker 1: the US arm of the platform to offer futures trading

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Speaker 1: that of course didn't work out. Maybe for the best. Okay,

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Speaker 1: this I'm I'm betting this will be one of the

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Speaker 1: first questions if he shows up, if he's there for

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Speaker 1: any congressionally hearing, where's the money? It's a great question. No,

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Speaker 1: it's does he know they were still talking about missing

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Speaker 1: billions here? Uh. The the people who are handling the

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Speaker 1: liquidation process, of course, John Jay Ray, the third is

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Speaker 1: at the helm of it, the new fd X CEO.

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Speaker 1: He of course handled en Ron. He's the he's the

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Speaker 1: court a point at the bankruptcy court appointed dude who's

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Speaker 1: done every major bankruptcy you can think of. Yeah, he Ron,

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Speaker 1: I think exactly exactly. So he's been around the block

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Speaker 1: a few times, and I mean the words, he hasn't

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Speaker 1: minced words when it comes to ft X. He's talked

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Speaker 1: about completely just so unprofessional in terms of the record keeping,

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Speaker 1: basically that it didn't exist. So one of the things

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Speaker 1: they're trying to do right now is figure out where

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Speaker 1: all the billions of dollars of customer deposits when they've

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Speaker 1: located some of the bitcoin in cold wallets, for example.

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Speaker 1: But there's still a lot to uncover here. Katie, always

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Speaker 1: a pleasure to appreciate it. Bloomberg's Katie Grindfeld helping us

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Speaker 1: explore the world of crypto. Katie, thanks a lot, and

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Speaker 1: just to hand. On Bloomberg Daybreak weekend, I'll look at

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Speaker 1: the inflation picture and what next in Europe. I'm John Tucker.

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Speaker 1: This is Bloomberg. This is Bloomberg Daybreak Weekend, our global

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Speaker 1: look ahead of the top stories for investors in the

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Speaker 1: coming week. I'm John Tucker in New York. Up later

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Speaker 1: in the program, big week coming for central banks in

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Speaker 1: Australia and India. But first November's inflation numbers from the

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Speaker 1: countries using the Euro will lay the groundwork for the

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Speaker 1: European Central banks next decision December fift But in the

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Speaker 1: coming days a raft of other economic data will tell

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Speaker 1: us more about the state of economies across Europe and

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Speaker 1: from or lets into London and bring in Bloomberg Daybreak

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Speaker 1: Europe anchors Stephen Carroll John The predictions for this winter

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Speaker 1: were dire for Europe, warnings of blackouts forced factory shutdowns

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Speaker 1: due to the energy crisis provoked by Russia's invasion of Ukraine.

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Speaker 1: Milder weather, though until early November, has avoided the worst

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Speaker 1: scenario for many major European economy, but inflation remains close

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Speaker 1: to record high. As our tief eerupoconumis. Jamie Ross joins

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Speaker 1: us now for more Jamie's The latest CPI figures for

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Speaker 1: the Aurozone showed a slowdown to ten percent from ten

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Speaker 1: point six percent in October, better than had been expected.

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Speaker 1: What was driving us, so the bulk about has been

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Speaker 1: has been best news on energy prices, so particularly in

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Speaker 1: the Netherlands and Spain, and I think to some extent

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Speaker 1: Belgium that these countries see very quick paths through from

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Speaker 1: wholesale gas prices into into retail prices. So you know,

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Speaker 1: that's what we're seeing. It's taking some pressure off, it's

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Speaker 1: beaten consensus to the you know, to the downside, and

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Speaker 1: you know, actually the cp just needs that it just

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Speaker 1: needs some good news on inflation. We've had a year

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Speaker 1: and a half of upside surprises. This is the first

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Speaker 1: time I've got a downside one in that period. And

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Speaker 1: does it give us any indication as to whether or

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Speaker 1: not we could be close to a peak of inflation

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Speaker 1: and we're still talking about ten percent even though it

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Speaker 1: has come down slightly. I think we probably are past

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Speaker 1: the peak, depending on clearly things could things could change, right,

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Speaker 1: We're not only just it going into winter now, we're

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Speaker 1: not actually there and so it could easily prove cold things.

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Speaker 1: Could you know that the reason that gas prices have

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Speaker 1: fallen is partly because the risk premium has just gone

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Speaker 1: away that could come back. So it's I think it's

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Speaker 1: too early to say to you know, to rule out

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Speaker 1: another surgeon inflation. But my best guess is that from

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Speaker 1: what we know now, probably we've we've passed the peak

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Speaker 1: and we do like your best gases, they proved to

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Speaker 1: be right quite a lot of the time. How much

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Speaker 1: divergence are we seeing among countries in the euro Area,

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Speaker 1: because that's part of the picture now that's emerging as

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Speaker 1: we're getting you know, are the individual figures that we've

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Speaker 1: gotten from countries. France still seems a little bit sticky,

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Speaker 1: but we did get the sign of a slowdown in

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Speaker 1: Spain and in Germany. Yeah, that's right. I mean, we

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Speaker 1: know that there are quite big differences in the energy

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Speaker 1: mix in different European countries, France in particularly because it's

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Speaker 1: reliance on nuclear and also that you know, government policies

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Speaker 1: just cap prices there. So we've seen much low inflation

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Speaker 1: in France and the rest of the Eurozone, but it's

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Speaker 1: gonna last for much longer. So we have very different experiences,

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Speaker 1: which actually trying to say in different politics as well,

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Speaker 1: and just you know the way people are people are

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Speaker 1: viewing the crisis itself. Well, this figures that we've gotten

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Speaker 1: for the broader Eurozone will be complemented by more data

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Speaker 1: that's coming in the next few days, of course, going

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Speaker 1: to form the basis of the next rate eyed decision

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Speaker 1: by the European Central Bank. ECB President Christine Laud was

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Speaker 1: speaking to the European European Parliament in Brussels in the

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Speaker 1: past few days. She said she'd be surprised if inflation

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Speaker 1: has peaked. By reducing people's real income and pushing up

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Speaker 1: costs for firms, high inflation is dampening spending and production.

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Speaker 1: High uncertainty tied to financial conditions and weakening global demand

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Speaker 1: are also weighing on economic growth, which is expected to

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Speaker 1: continue weakening for the remainder of this year fourth quarter

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Speaker 1: and the beginning of next year first quarter of twenties three.

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Speaker 1: That's to be President Christine are talking there about the

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Speaker 1: outlook for the months to come, and we will get

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Speaker 1: final third quarter GDP data for the Eurozone coming up

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Speaker 1: in the next couple of days. The last you know

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Speaker 1: that the preliminary readings for the third quarter did show

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Speaker 1: small growth. But where where where does this go from here?

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Speaker 1: What's such ajectory for for the euro Area? But I

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Speaker 1: think most people are expecting a shallow ish recession over

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Speaker 1: the winter and going into next year. But I think

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Speaker 1: what's one thing that's interesting now is that because energy

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Speaker 1: prices have fallen back, the impact from the gas crisis,

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Speaker 1: that the direct impact could actually end up being smaller

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Speaker 1: then the e CBS response to it. Because the if

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Speaker 1: you just use like a simple model and you compare

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Speaker 1: what what the impact of gas prices is too to

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Speaker 1: the impact of higher higher interest rates, it's now looking

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Speaker 1: like higher interest rates could be the dominant factor driving

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Speaker 1: the slowdown in the Eurozone next year. So it's um,

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Speaker 1: you know, the the queue has been potentially worse than

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Speaker 1: the than the and the illness to start with. Well, this,

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Speaker 1: of course as we're looking ahead towards the next meeting

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Speaker 1: what is the calculation the ECB has to make here,

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Speaker 1: because it's this question of their only mandates is inflation.

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Speaker 1: So how much do they actually care about you know,

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Speaker 1: it's not the same as the fair so how much

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Speaker 1: they actually care about the rest of the economy and

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Speaker 1: kind of striking that balance. So I think there's two

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Speaker 1: things they need to think about. One is the risk

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Speaker 1: from just high headline inflation what that does for inflation expectations.

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Speaker 1: Now on that side, on that dimension, things are looking better, right,

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Speaker 1: So headline inflation surprises downside is lower. That on balance,

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Speaker 1: I think means that the UP doesn't need to do

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Speaker 1: seventy five when it meets in December. It can do fifty.

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Speaker 1: That's fine. Across another dimension though, they're going to be

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Speaker 1: looking much more closely in months to come at core inflation,

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Speaker 1: underlying inflation and that's going to be pretty sticky, so

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Speaker 1: we think that they're going to keep hiking rates in

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Speaker 1: twenty three UM. So it's it's those two things they're

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Speaker 1: looking at slightly. One one calls for urgent action headline inflation.

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Speaker 1: One calls for something that's going to be drawn out

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Speaker 1: into next year. Given that core inflation element, though, does

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Speaker 1: that also tell us that we're going to be looking

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Speaker 1: at rates higher for longer and that they will hold

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Speaker 1: at a certain position, which you know, in the history

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Speaker 1: happen is this this focus on core inflation. I think

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Speaker 1: they're only going to be able to bring the cycle,

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Speaker 1: the hiking cycle to a close once they see co

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Speaker 1: inflation dropping, and our forecasts show that happening around the

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Speaker 1: beginning of the second quarter next year, so we think

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Speaker 1: that's when they'll be they'll have like the breathing space

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Speaker 1: just to to stop hiking rates, and we think they'll

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Speaker 1: get to three percent on the refinancing rate. Then I

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Speaker 1: we are going to see potentially that the high relatively

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Speaker 1: high interest rate period for for much of next year.

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Speaker 1: And again, one of those challenges the ECB has is

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Speaker 1: a very diverse group of countries that it is, you know,

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Speaker 1: the monetary policy institution. For either countries within the euro

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Speaker 1: Area that are going to suffer more because of higher rates,

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Speaker 1: there are I mean, the CBS own models show that

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Speaker 1: And actually Italy is one of the country is just

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Speaker 1: going to be worse hit by the gas crisis, so

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Speaker 1: it just doesn't need it um So we are going

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Speaker 1: to see differing performances across the Eurozone going through when

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Speaker 1: we're looking at the broader economic picture, is it too

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Speaker 1: soon to worry about next winter or is this where

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Speaker 1: policymakers should be thinking too now about how the energy

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Speaker 1: crisis might play out over the more medium term. And

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Speaker 1: let's think about it. We've entered this winter missing six

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Speaker 1: months of gas flows from Russia. When we go into

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Speaker 1: next winter, we're gonna be missing twelve months of gas

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Speaker 1: flows from from Russia. So the problem is going to

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Speaker 1: be bigger The question is how quickly can the European

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Speaker 1: economy adapt to the new energy reality. We've been surprised

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Speaker 1: at how much energy has come into the Eurozone and

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Speaker 1: also we've got lucky with the weather. But I mean

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Speaker 1: it's not going to be an easy winter next year either.

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Speaker 1: Thank you very much to Boomberg Steve economist Jamie Rush.

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Speaker 1: I'm Stephen Carroll in London. You can catch us every

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Speaker 1: weekday morning here for Bloomberg Daybreak Europe, beginning at six

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Speaker 1: am in London and one am on Wall Streets. John

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Speaker 1: all right, Stephen, thanks a lot. Just ahead on Bloomberg

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Speaker 1: day Break weekend, look at inflation issues in Australia and India,

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Speaker 1: impossible central bank moves in those countries this coming week.

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Speaker 1: I'm John Tucker at This is Bloomberg broadcasting live from

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Speaker 1: the Bloomberg Interactive Broker Studio in New York. Bloomberg elmon

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Speaker 1: Frio to Washington, d C, Bloomberg to Boston, Bloomberg one

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Speaker 1: oh six one to San Francisco, Bloomberg six to the Country,

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Speaker 1: Serious XM Channel one nineteen to London d A B

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Speaker 1: digital radio, and around the globe. The Bloomberg Business APT

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Speaker 1: and Bloomberg Radio dot Com. This is Bloomberg day Break weekend.

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Speaker 1: I'm John Tuckery in New York with your global look

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Speaker 1: ahead of the top stories for investors in the coming week.

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Speaker 1: Policy Makers at central banks in Australia and India will

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Speaker 1: be grappling with some big questions this coming week, and

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Speaker 1: for more, let's go to Hong Kong and Bloomberg Daybreak

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Speaker 1: Asian host Brian Purtison and his colleague Doug Prisoner. John,

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Speaker 1: the central banks of both countries are facing interest rate

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Speaker 1: decisions as they grapple with the dominant issue across much

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Speaker 1: of the globe, high inflation, and both economies are now

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Speaker 1: feeling the effect of aggressive monetary tightening. We want to

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Speaker 1: take a closer look now with Bloomberg's Global Economics and

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Speaker 1: Policy editor Kathleen Hayes. Kathleen, let's begin with the Reserve

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Speaker 1: Bank of Australia. The RBA will meet on Tuesday, and

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Speaker 1: the question that I have for you will they borrow

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Speaker 1: from the Fed's playbook, at least what we seem to

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Speaker 1: know of it, as it was implied this week from

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Speaker 1: FED chair J Powell that the size of rate hikes

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Speaker 1: will be reduced going forward fair statement. Well, let me

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Speaker 1: tell you about the Reserve Bank of Australia. By starting

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Speaker 1: with the Bank of Korea. The Bank of Korea last Friday,

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Speaker 1: uh it was pretty widely expected they had they'd done

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Speaker 1: to fifty base point rate hikes July and October and

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Speaker 1: and other than that. When they started back in July one,

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Speaker 1: they had did twenty five basis point hikes. And one

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Speaker 1: of the big reasons they were expected to dial back

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Speaker 1: to the twenty five basis point hike was because the

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Speaker 1: feder Reserve has been signaling more and more strongly that

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Speaker 1: they're not going to do seventy five bases point rate hikes.

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Speaker 1: They're gonna go back to fifty in parts so they

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Speaker 1: can pause and see the impact of the recent rate

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Speaker 1: hikes to date. So that's another reason I think why

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Speaker 1: you know the b okay has gone in that direction,

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Speaker 1: that the r b A is expected to do so

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Speaker 1: as well. And I think just generally the conditions in

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Speaker 1: in Australia or another reason why they're expected to do that.

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Speaker 1: The Reserve Bank has surprised markets three out of ten

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Speaker 1: meetings this year. That's that's quite interesting in itself. It

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Speaker 1: means that their communication policy a little bit different from

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Speaker 1: the Fed. Is it likely that they'll surprise us again

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Speaker 1: this time? Well, certainly we can say Phil Low isn't

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Speaker 1: afraid to change his mind when he sees what's going

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Speaker 1: on in the economy around him, and go ahead and

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Speaker 1: do what he thinks needs to be done. And in

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Speaker 1: fact we know that now traders, instead of seeing the

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Speaker 1: twenty five basis paint rate hike that is is by

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Speaker 1: far and away the majority of view, they think it

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Speaker 1: could be a fifty basis point hike. And in fact,

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Speaker 1: when he started uh tightening last May, if he did

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Speaker 1: a quarter point hike to zero point three when the

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Speaker 1: market was pricing in fifteen basis points to start on

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Speaker 1: winding the last of the pandemic eric rate cuts and

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Speaker 1: returned to the usual basis point move, then he followed

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Speaker 1: that up with a surprise half point increase in June.

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Speaker 1: Then he broke ranks with central banks around the world

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Speaker 1: in October by down shifting to a quarter point. And

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Speaker 1: he was talking about the sharp tightening already delivered by

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Speaker 1: the r b A and that it had yet to

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Speaker 1: work it's ready through the economy, so a small hike

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Speaker 1: would actually leave him the key rate at three percent,

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Speaker 1: and a lot of investors are saying that will give

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Speaker 1: them some time to assess the incoming data flow over

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Speaker 1: the summer break. So I'm wondering whether or not he's

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Speaker 1: going to get any push back on reducing to twenty

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Speaker 1: five basis points that there is a contingent saying, hey,

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Speaker 1: it's time to remain aggressive, because what we've been hearing

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Speaker 1: from a number of central bankers, when you lose control

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Speaker 1: of the inflation problem, it's really really difficult as time

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Speaker 1: goes on to attack it in a way that's going

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Speaker 1: to be effective. There was an investment conference recently in

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Speaker 1: Australia that Bloomberg News wrote about, and the theme here

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Speaker 1: is that they're playing with fire by signaling a higher

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Speaker 1: tolerance for inflation, by slowing the pace of policy tightening

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Speaker 1: and trying to deliver a soft landing. That's one of

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Speaker 1: the things people criticize the FED for. It's a little

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Speaker 1: bit contradictory. Don't want to have a soft landing and

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Speaker 1: still be super aggressive or aggressive enough on inflation. Another comment,

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Speaker 1: it feels like they're playing with fire, but the payoff

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Speaker 1: is a pretty good one if they can achieve that.

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Speaker 1: Uh and of course that's as you just mentioned, I

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Speaker 1: mean risk the inflation expectations will become un anchored because

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Speaker 1: it's going to be a long time to keep inflation

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Speaker 1: outside of the target band. One estimate that Australia we

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Speaker 1: have four or five and six percent inflation for a

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Speaker 1: few years and that that could come back to haunt

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Speaker 1: them now the day after the r b A meets,

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Speaker 1: so we'll have an RBI decision. And is it is

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Speaker 1: it too early for them to take their foot off

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Speaker 1: the pedal. Yes, they're supposed to, although they are supposed

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Speaker 1: to do a smaller thirty five basis point hiked to

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Speaker 1: six and a quarter percent. About you know, well more

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Speaker 1: than half, about two thirds of investors saying they can't

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Speaker 1: stop fighting inflation. That's for sure. It's slow to six

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Speaker 1: point seven seven percent in October um, and it's been

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Speaker 1: but still it's been above the upper end of the

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Speaker 1: two to six percent band for all year. More modest,

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Speaker 1: modest rate rise of thirty five basis points would follow

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Speaker 1: a series of fifty basis point hikes. And it again

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Speaker 1: it's coincides with the fetter reserve sending a signal that

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Speaker 1: they're going to shift to smaller rating increases at their

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Speaker 1: policy meeting this month. Kathleen, thank you so much for

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Speaker 1: that preview of the r b A and RBI meetings.

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Speaker 1: Boomberg's Kathleen Hayes, Global Economics and Policy Editor. I'm Brian Curtis,

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Speaker 1: along with Doug Krisner. You can catch us every weekday

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Speaker 1: for Bloomberg Daybreak Asia, beginning at seven am in Hong

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Speaker 1: Kong and six pm on Wall Street. John, Thanks Brian

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Speaker 1: and Doug. And just to hand on Bloomberg Daybreak weekend,

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Speaker 1: they hotly contested Georgia runoff race. I'm John Tucker, and

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Speaker 1: this is Bloomberg. This is Bloomberg Daybreak Weekend, our global

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Speaker 1: look ahead of the top stories for investors in the

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Speaker 1: coming week. I'm John Tucker in New York. Send a

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Speaker 1: runoff election coming up Tuesday in Georgia and for more

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Speaker 1: LEDs in to the Bloomberg newsroom in Washington and Amy Morris. Amy,

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Speaker 1: thank you, John. This race is being very closely watched,

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Speaker 1: with incumbent Democratic Senator Raphael Warnock facing Republican Herschel Walker.

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Speaker 1: Joining me now to talk about all of this. Bloomberg

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Speaker 1: Washington correspondent Joe Matthew, host of sound on with Joe Matthew.

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Speaker 1: He'll be in Georgia covering this key race. Um, Joe

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Speaker 1: Warnock has been trying to pitch a pretty big Democratic

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Speaker 1: tent down there. This race really is not about party,

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Speaker 1: but it is about who has the character and the

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Speaker 1: competence to represent these students and to represent all the

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Speaker 1: people of Georgia. And meanwhile, herschel Walker has a different

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Speaker 1: style to him. He's fired to get out of that office.

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Speaker 1: And then what we no, no, no, what we need

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Speaker 1: to do is tell him, don't let that do hit

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Speaker 1: you in the bright side as you lead the people office.

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Speaker 1: And let's start by talking about what the polls are showing, Joe.

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Speaker 1: Let's look at the two candidates could not be more different.

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Speaker 1: And some of the latest polls that we've seen this

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Speaker 1: past week show that there's, uh, the margin is getting smaller. Yeah,

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Speaker 1: there hasn't really been a lot of research. It's interesting,

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Speaker 1: you know, you ask about polls, we don't have a

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Speaker 1: lot to pick from here. There was one from a

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Speaker 1: a r P over a week ago really that found

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00:23:01,040 --> 00:23:04,400
Speaker 1: that found Raphael Warnock actually ahead by four or five points,

432
00:23:04,400 --> 00:23:06,160
Speaker 1: but that was within the margin. And when you look

433
00:23:06,280 --> 00:23:10,520
Speaker 1: deeper inside. He's Warnock is leading by by double digits

434
00:23:10,520 --> 00:23:12,879
Speaker 1: among young voters eighteen to forty nine. He's got a

435
00:23:12,920 --> 00:23:17,960
Speaker 1: twenty four percentage point lead over herschel Walker. That is significant.

436
00:23:18,440 --> 00:23:22,080
Speaker 1: The more old the older voters are, the more they

437
00:23:22,200 --> 00:23:26,280
Speaker 1: tend to lean towards herschel Walker. Uh. Independence are also

438
00:23:26,440 --> 00:23:29,520
Speaker 1: breaking by just about inside the margin again four or

439
00:23:29,560 --> 00:23:33,560
Speaker 1: five points breaking uh for Senator Warnock. Once again, we

440
00:23:33,640 --> 00:23:35,960
Speaker 1: got another one uh, just a couple of days ago.

441
00:23:36,440 --> 00:23:40,080
Speaker 1: You know, these aren't often the normal polling agencies we

442
00:23:40,160 --> 00:23:44,440
Speaker 1: hear from. This is Frederick Poles compete digital and and political.

443
00:23:44,640 --> 00:23:48,440
Speaker 1: They have both candidates deadlocked, an actual toss up at

444
00:23:48,560 --> 00:23:52,560
Speaker 1: fifty percent each. Now, let's look at some of these numbers, um,

445
00:23:53,359 --> 00:23:55,040
Speaker 1: and let's try to break it down a little bit.

446
00:23:56,000 --> 00:23:58,520
Speaker 1: And let me give you a bit of a story here,

447
00:23:58,600 --> 00:24:03,080
Speaker 1: just some anecdotal. George's Republican Lieutenant Governor Jeff Duncan told

448
00:24:03,119 --> 00:24:05,800
Speaker 1: see an end that he cast his ballot, he voted early,

449
00:24:06,240 --> 00:24:08,480
Speaker 1: he didn't vote for Walker, he didn't vote for war

450
00:24:08,560 --> 00:24:11,120
Speaker 1: not on so hard to believe, called this the most

451
00:24:11,200 --> 00:24:13,320
Speaker 1: disappointing ballot. He oh, you don't buy it, so you

452
00:24:13,400 --> 00:24:15,080
Speaker 1: got out of bed that morning, waited in line for

453
00:24:15,119 --> 00:24:17,080
Speaker 1: an hour without knowing who you're voting for. As the

454
00:24:17,160 --> 00:24:23,240
Speaker 1: lieutenant governor, Brian Kemp with his boss, is all in

455
00:24:23,520 --> 00:24:27,359
Speaker 1: for herschel Walker. He's dedicated his entire ground game. He's

456
00:24:27,560 --> 00:24:30,760
Speaker 1: stumping for him, sharing a stage with him, and raising

457
00:24:30,800 --> 00:24:33,639
Speaker 1: money for him. Having not done that in the mid

458
00:24:33,800 --> 00:24:36,720
Speaker 1: term election cycle, he decided to do this for the runoff,

459
00:24:37,280 --> 00:24:39,160
Speaker 1: just to thumb his nose a bit at Donald Trump

460
00:24:39,320 --> 00:24:40,680
Speaker 1: is what we is, how we see that, But his

461
00:24:40,760 --> 00:24:43,720
Speaker 1: lieutenant governor has no idea who to vote for what

462
00:24:43,920 --> 00:24:45,720
Speaker 1: Maybe maybe you should wait a minute to go vote.

463
00:24:45,960 --> 00:24:50,000
Speaker 1: Well he My point, my question about this, pardon me,

464
00:24:50,200 --> 00:24:53,160
Speaker 1: is the divisiveness that you see now in the division,

465
00:24:53,280 --> 00:24:57,399
Speaker 1: even within the GOP itself. Yeah. Absolutely, Well, I'm not

466
00:24:57,520 --> 00:24:59,679
Speaker 1: sure how much division there is at this point. Following

467
00:24:59,720 --> 00:25:02,400
Speaker 1: the mid terms, Republicans have decided they need this. There's

468
00:25:02,400 --> 00:25:04,639
Speaker 1: a reason. It's not just because it's fun to have

469
00:25:04,800 --> 00:25:08,200
Speaker 1: one extra seat. If Rafael Warnock keeps his job, they'll

470
00:25:08,200 --> 00:25:10,800
Speaker 1: be able to have a majority on committees. If Republicans

471
00:25:10,880 --> 00:25:13,919
Speaker 1: get this seat herschel Walker wins, they keep Democrats from

472
00:25:13,960 --> 00:25:16,359
Speaker 1: doing that. So there is actually a matter of business

473
00:25:16,400 --> 00:25:18,920
Speaker 1: at hand here. It's not just having that extra layer

474
00:25:19,000 --> 00:25:22,719
Speaker 1: of protection, it'll dictate the way these committees are made up.

475
00:25:23,080 --> 00:25:25,800
Speaker 1: Republicans are all in on that, whether it's Lindsay Graham,

476
00:25:25,880 --> 00:25:29,639
Speaker 1: Tom Cotton, Rick Scott, they've all gone down there. Donald Trump,

477
00:25:29,720 --> 00:25:33,320
Speaker 1: of course picked this candidate. Now Brian Kemp is working

478
00:25:33,440 --> 00:25:36,440
Speaker 1: overtime to get him elected. Things have jelled pretty well

479
00:25:36,760 --> 00:25:39,159
Speaker 1: for herschel Walker inside the Republican Party. One of the

480
00:25:39,240 --> 00:25:41,159
Speaker 1: things I like to watch, especially when it comes to

481
00:25:41,240 --> 00:25:43,439
Speaker 1: a runoff, is how the early voting is turning out.

482
00:25:43,640 --> 00:25:45,439
Speaker 1: Is that going to make a difference here, the turnout

483
00:25:45,480 --> 00:25:47,560
Speaker 1: for early voting. That's the big question we're walking into

484
00:25:47,640 --> 00:25:49,919
Speaker 1: next week with because if they have set a record

485
00:25:50,600 --> 00:25:54,119
Speaker 1: for early voting here, we understand based on history that

486
00:25:54,280 --> 00:25:57,639
Speaker 1: that tends to benefit the Democrat. So Rafael Warnock is

487
00:25:57,640 --> 00:25:59,920
Speaker 1: feeling pretty good about those numbers. A hundred and eighty

488
00:26:00,000 --> 00:26:03,280
Speaker 1: on thousand people voted early last weekend uh and and

489
00:26:03,400 --> 00:26:05,680
Speaker 1: as and we've seen these numbers tick up over the

490
00:26:05,720 --> 00:26:08,440
Speaker 1: course of the week since. Let's talk about the money.

491
00:26:09,560 --> 00:26:11,880
Speaker 1: There's been a lot of money poured into this race.

492
00:26:12,160 --> 00:26:16,040
Speaker 1: Record breaking numbers. Does that make a difference. The more

493
00:26:16,119 --> 00:26:18,240
Speaker 1: person the more you spend, the more likely you are

494
00:26:18,280 --> 00:26:20,239
Speaker 1: to win. Doesn't seem to be right. You've got these

495
00:26:20,280 --> 00:26:24,760
Speaker 1: guys within a percentage point despite all the scandals, the

496
00:26:24,880 --> 00:26:29,640
Speaker 1: abortion stories, the endless talk of vampires and werewolves. It's

497
00:26:29,680 --> 00:26:34,080
Speaker 1: been a crazy campaign and they are essentially tied. So

498
00:26:34,240 --> 00:26:36,080
Speaker 1: it's hard to make the case for money. Although I

499
00:26:36,160 --> 00:26:38,000
Speaker 1: will say this, if you back up a little bit

500
00:26:38,359 --> 00:26:40,760
Speaker 1: to the mid term cycle before this turn into a runoff,

501
00:26:41,119 --> 00:26:43,840
Speaker 1: Mitch McConnell was the one spending money on Herschel Walker,

502
00:26:43,960 --> 00:26:46,240
Speaker 1: not Donald Trump, and if he hadn't done that, it

503
00:26:46,400 --> 00:26:48,359
Speaker 1: might not have gone as well as it did for

504
00:26:48,440 --> 00:26:50,720
Speaker 1: Herschel to begin with. He might not have actually gotten

505
00:26:50,720 --> 00:26:53,720
Speaker 1: into the runoff. So so money does have its time.

506
00:26:53,800 --> 00:26:56,439
Speaker 1: The question is how much Brian Kemp's money might make

507
00:26:56,480 --> 00:26:59,080
Speaker 1: a difference. Now, okay, so what are you watching for

508
00:26:59,520 --> 00:27:01,480
Speaker 1: as you get ready to pack your bags and head

509
00:27:01,520 --> 00:27:04,359
Speaker 1: down to Georgia. Well, you know, look, we're watching turnout.

510
00:27:04,400 --> 00:27:05,680
Speaker 1: To your point, a lot of the things that we've

511
00:27:05,720 --> 00:27:10,200
Speaker 1: discussed as well, and we've Barack Obama showing up has

512
00:27:10,320 --> 00:27:13,760
Speaker 1: its own factor that's difficult to quantify. He's certainly helped

513
00:27:13,800 --> 00:27:16,879
Speaker 1: Raphael Warnock during the general seems to me he's a

514
00:27:17,359 --> 00:27:22,200
Speaker 1: celebrity who wants to be a politician, and we've seen

515
00:27:22,280 --> 00:27:26,359
Speaker 1: how that goes. And then we're gonna see who shows

516
00:27:26,400 --> 00:27:28,480
Speaker 1: up day of. You know, if Republicans can get out

517
00:27:28,840 --> 00:27:32,200
Speaker 1: in force on Tuesday, they might be able to blunt

518
00:27:32,200 --> 00:27:34,800
Speaker 1: the impact of a record relea vote. And we are

519
00:27:34,840 --> 00:27:38,040
Speaker 1: talking with Bloomberg Washington correspondent Joe Matthew about the runoff

520
00:27:38,119 --> 00:27:41,080
Speaker 1: election in Georgia. Is it lost on anyone that this

521
00:27:41,240 --> 00:27:42,800
Speaker 1: is sort of a rerun of what happened a couple

522
00:27:42,840 --> 00:27:45,400
Speaker 1: of years ago. Well, it's not on Raphael Warnock. That's

523
00:27:45,400 --> 00:27:47,720
Speaker 1: part of his stump speech. Now he has run for

524
00:27:47,800 --> 00:27:51,359
Speaker 1: the same job something like five times in the last

525
00:27:51,440 --> 00:27:54,399
Speaker 1: two years. I mean, if you think about it, the general, uh,

526
00:27:54,480 --> 00:27:57,359
Speaker 1: the runoff, the general, the runoff. There he is again

527
00:27:57,600 --> 00:28:00,159
Speaker 1: and he's only been in office for two years. Yeah, mean,

528
00:28:00,240 --> 00:28:02,359
Speaker 1: my goodness, you need to really want that job to

529
00:28:02,520 --> 00:28:05,280
Speaker 1: keep going through this. But you could also argue that

530
00:28:05,359 --> 00:28:07,000
Speaker 1: it gives him a bit of an advantage. It's not

531
00:28:07,240 --> 00:28:09,760
Speaker 1: his first ball game, not by a lunch shot. Uh.

532
00:28:10,200 --> 00:28:13,000
Speaker 1: You mentioned, um, the former president Barack Obama down their

533
00:28:13,040 --> 00:28:15,400
Speaker 1: campaigning for Warnock. Does that help a lot. It made

534
00:28:15,400 --> 00:28:18,040
Speaker 1: a huge difference in the general election for Barack Obama

535
00:28:18,119 --> 00:28:21,680
Speaker 1: to go down there to help activate to mobilize African

536
00:28:21,720 --> 00:28:24,520
Speaker 1: American voters. And that's why he came back that that

537
00:28:24,640 --> 00:28:27,840
Speaker 1: poll that I mentioned from a ARP finds Black voters

538
00:28:28,040 --> 00:28:31,720
Speaker 1: fifty and up differ in preference from their age group,

539
00:28:31,800 --> 00:28:34,640
Speaker 1: right until as I mentioned that the older voters tend

540
00:28:34,720 --> 00:28:38,160
Speaker 1: to favor herschel Walker. In this case, Rafael Warnock has

541
00:28:38,240 --> 00:28:43,120
Speaker 1: an eighty three point lead over herschel Walker among Black

542
00:28:43,200 --> 00:28:46,000
Speaker 1: voters fifty and up, the margin of Ara's five points.

543
00:28:46,040 --> 00:28:48,560
Speaker 1: So I think we can call that. So I want

544
00:28:48,560 --> 00:28:51,880
Speaker 1: to make sure I understand older voters tend to lean

545
00:28:52,040 --> 00:28:57,960
Speaker 1: toward herschel Walker, not Warnock. Correct. With the exceptions specifically,

546
00:28:58,560 --> 00:29:01,520
Speaker 1: I'm sure they are. I mean that loyalty in Georgia

547
00:29:01,600 --> 00:29:05,960
Speaker 1: for football, for there's no doubt about, even though living

548
00:29:06,000 --> 00:29:09,000
Speaker 1: in Texas for most of this campaign, that's been an issue,

549
00:29:09,040 --> 00:29:13,520
Speaker 1: most recently as he got a homestead exception for moving

550
00:29:13,640 --> 00:29:16,320
Speaker 1: to Georgia. It's kind of an interesting thing here if

551
00:29:16,320 --> 00:29:17,560
Speaker 1: you go back and look at a lot of his

552
00:29:17,640 --> 00:29:19,360
Speaker 1: interviews on Fox, he was sitting at his home in

553
00:29:19,440 --> 00:29:22,280
Speaker 1: Texas for them, I think it's important to point out

554
00:29:22,360 --> 00:29:25,000
Speaker 1: that this runoff is so significant and there's so much

555
00:29:25,040 --> 00:29:27,760
Speaker 1: writing on it that we are actually Bloomberg is sending

556
00:29:27,880 --> 00:29:31,760
Speaker 1: you down to Georgia for the election results on Tuesday.

557
00:29:31,840 --> 00:29:33,960
Speaker 1: What are you going to be watching for? Well, again,

558
00:29:34,160 --> 00:29:37,320
Speaker 1: we're looking at turnout and to see how Republicans can

559
00:29:37,400 --> 00:29:40,320
Speaker 1: mobilize voters to come out the day of, whether they

560
00:29:40,360 --> 00:29:44,000
Speaker 1: can blunt the impact of a potential Democratic advantage in

561
00:29:44,120 --> 00:29:46,440
Speaker 1: record early voting. What are you going to be watching

562
00:29:46,520 --> 00:29:49,360
Speaker 1: for in the coming week, other issues that may be

563
00:29:49,520 --> 00:29:52,040
Speaker 1: percolating on Capitol Hill or at the White House? Is

564
00:29:52,120 --> 00:29:54,680
Speaker 1: there anything that's got your attention? Look, we could take

565
00:29:54,680 --> 00:29:56,760
Speaker 1: a couple of days to decide this race. First of all,

566
00:29:56,880 --> 00:29:58,840
Speaker 1: we may not know this on Tuesday night. I'd like

567
00:29:59,000 --> 00:30:01,160
Speaker 1: to think by when day will have a sense of it.

568
00:30:01,280 --> 00:30:03,680
Speaker 1: But it's gonna take a minute. This is really close.

569
00:30:03,720 --> 00:30:05,760
Speaker 1: Remember how long it took for them to call Pennsylvania,

570
00:30:06,160 --> 00:30:09,040
Speaker 1: to call Arizona some of these other states. Georgia's like that.

571
00:30:09,120 --> 00:30:11,160
Speaker 1: That's why it went to a runoff. So does it

572
00:30:11,240 --> 00:30:14,160
Speaker 1: take the week? I don't know. We're prepared to cover

573
00:30:14,320 --> 00:30:18,400
Speaker 1: that while the lame duck session continues here in Washington. Republicans,

574
00:30:18,440 --> 00:30:19,520
Speaker 1: you know, they have us in the back of their

575
00:30:19,560 --> 00:30:22,640
Speaker 1: mind here, uh and what a what a fifty first

576
00:30:22,680 --> 00:30:24,840
Speaker 1: seat might mean for them. But the lame duck session

577
00:30:24,920 --> 00:30:26,760
Speaker 1: needs to happen. First, we need to take care of

578
00:30:26,880 --> 00:30:30,560
Speaker 1: government funding, which runs out on December sixte uh. And

579
00:30:30,640 --> 00:30:34,200
Speaker 1: then there's a lot of question about about funding going forward,

580
00:30:34,200 --> 00:30:36,760
Speaker 1: whether they're going to kick the can down the road

581
00:30:36,880 --> 00:30:39,719
Speaker 1: for the entire year or into February. If we get

582
00:30:39,760 --> 00:30:42,160
Speaker 1: a short term cr it increases the risk of a

583
00:30:42,200 --> 00:30:45,920
Speaker 1: possible government shutdown. That's one thing we're watching. And Joe,

584
00:30:46,160 --> 00:30:48,480
Speaker 1: there's been a you know, power shake up in the House.

585
00:30:50,120 --> 00:30:53,320
Speaker 1: That's a great question. No, technically, no, it looks like

586
00:30:53,400 --> 00:30:56,280
Speaker 1: it's Kevin McCarthy. He's certainly been running for the job,

587
00:30:56,440 --> 00:30:57,960
Speaker 1: is cutting a lot of deals right now. But this

588
00:30:58,080 --> 00:30:59,600
Speaker 1: is going to go to the floor, right he's he's

589
00:30:59,840 --> 00:31:01,560
Speaker 1: he received the support of his caucus. But when it

590
00:31:01,600 --> 00:31:03,880
Speaker 1: goes to the full floor, it's just like when we

591
00:31:03,960 --> 00:31:06,120
Speaker 1: were there on midterm election night. You need to eight

592
00:31:06,200 --> 00:31:09,200
Speaker 1: team to win, and Democrats are not likely to help

593
00:31:09,280 --> 00:31:11,440
Speaker 1: him out. So there's a real question about whether he

594
00:31:11,520 --> 00:31:13,200
Speaker 1: comes out of this with the gavel or if Ace

595
00:31:13,240 --> 00:31:15,880
Speaker 1: Steve's callie. For instance, when this goes to round two

596
00:31:16,000 --> 00:31:19,800
Speaker 1: round three, maybe More comes from behind very quietly and

597
00:31:19,880 --> 00:31:22,240
Speaker 1: becomes the next speaker. That's not the most likely scenario,

598
00:31:22,320 --> 00:31:23,760
Speaker 1: but it's when we're hearing a lot more about now.

599
00:31:24,040 --> 00:31:26,560
Speaker 1: Is there a possibility you'd have a Democratic Speaker of

600
00:31:26,640 --> 00:31:29,280
Speaker 1: the House with a Republican majority? Not likely, No, but

601
00:31:29,400 --> 00:31:31,320
Speaker 1: I mean, look, you've got a Republican majority, so they

602
00:31:31,320 --> 00:31:34,680
Speaker 1: would they wouldn't allow that likely to happen, but it

603
00:31:34,880 --> 00:31:36,960
Speaker 1: may not be who they think it's going to be.

604
00:31:37,080 --> 00:31:38,320
Speaker 1: And you don't, by the way, you have to be

605
00:31:38,400 --> 00:31:40,120
Speaker 1: a city member of Congress, which is why they had

606
00:31:40,120 --> 00:31:42,120
Speaker 1: floated the idea at one point. And this was likely

607
00:31:42,200 --> 00:31:45,280
Speaker 1: just a rumor of having a speaker Donald J. Trump

608
00:31:45,440 --> 00:31:46,960
Speaker 1: come in there just to have some fun. If you

609
00:31:47,040 --> 00:31:50,760
Speaker 1: look at the language that the House rules make it

610
00:31:50,880 --> 00:31:53,719
Speaker 1: clear that anybody could actually be speaker if if they

611
00:31:53,920 --> 00:31:57,840
Speaker 1: managed to get to eighteen. Bloomberg Washington correspondent Joe Matthew,

612
00:31:57,920 --> 00:32:00,800
Speaker 1: host of Bloomberg Sound On, which you can hear weekday

613
00:32:00,840 --> 00:32:03,400
Speaker 1: afternoons at five Wall Street Time. Thanks so much for

614
00:32:03,480 --> 00:32:05,720
Speaker 1: taking the time with us, and you can get more

615
00:32:05,760 --> 00:32:08,280
Speaker 1: political news coverage by checking out Balance of Power with

616
00:32:08,400 --> 00:32:10,640
Speaker 1: David West. And that's weekdays at noon, Wall Street Time.

617
00:32:10,680 --> 00:32:13,960
Speaker 1: All right here on Bloomberg Radio, I'm Amy Morris and

618
00:32:14,040 --> 00:32:18,520
Speaker 1: this is Bloomberg John Amy Morris reporting from our Bloomberg

619
00:32:19,360 --> 00:32:22,520
Speaker 1: newsroom in Washington. Amy, thanks a lot, and that does

620
00:32:22,600 --> 00:32:25,600
Speaker 1: it for this edition of Bloomberg Daybreak Weekend. Join us

621
00:32:25,600 --> 00:32:27,960
Speaker 1: again Monday morning at five again Wall Street Time, for

622
00:32:28,040 --> 00:32:31,240
Speaker 1: the latest on markets overseas and the news you need

623
00:32:31,320 --> 00:32:34,920
Speaker 1: to start your day. I'm John Zucker. This is Bloomberg