Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa Bramowitz. Each day we
Speaker 1: bring you the most important, noteworthy and useful interviews for
Speaker 1: you and your money, whether you're at the grocery store
Speaker 1: or the trading floor. Find the Bloomberg p m L
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. If
Speaker 1: you thought the Brexit was over, you were wrong. We
Speaker 1: actually got that vote yesterday against Theresa May, prime Minister
Speaker 1: of the United Kingdom, against her plan for Brexit. Not surprising, however,
Speaker 1: it was surprising the magnitude of her loss. Today she
Speaker 1: faces a no confidence vote. The pound up against the
Speaker 1: euro and the dollar. Go figure on that one. Joining
Speaker 1: us now to explain what we should look for and
Speaker 1: whether we're going to soon come out of this Brexit malaise.
Speaker 1: Dr Sam nap President of em Are Global Ventures, joining
Speaker 1: us here in our BLOOMBERGNNA Active Brokers Studios. So, Dr
Speaker 1: and natapoff, what do you think will happen today? Well,
Speaker 1: remember what happened yesterday, Prime Minister Theresa May suffered an
Speaker 1: historic political defeat. Today she in about four hours she's
Speaker 1: going to have a vote of no confidence and these
Speaker 1: don't happen very often. The last one happened twenty four
Speaker 1: years ago, and the last time someone lost one was
Speaker 1: forty years ago. If she loses the vote today, which
Speaker 1: is very unlikely, she'll probably win it by about ten votes.
Speaker 1: If she loses it today, the pound could drop by
Speaker 1: between five and ten percent. This is a totally unpredictable,
Speaker 1: unpredicted event, and the capital and financial markets would go
Speaker 1: and say, so, let's say that she does win, as
Speaker 1: you say, by ten or twelve votes. Boy, where do
Speaker 1: we go next here? Well, now there are only three
Speaker 1: there's only three options for Britain right now. There's a
Speaker 1: modified deal Brexit, a no deal Brexit, or no Brexit. Now,
Speaker 1: the problem is in Britain is that each one of
Speaker 1: these groups thinks that they have victory within their grasp.
Speaker 1: There reason may think that, you know, as we get
Speaker 1: closer to March twenty nine, the day that Britain actually
Speaker 1: formally leaves the EU, recalcitrant MPs will come back to
Speaker 1: her side and vote her deal through in some form.
Speaker 1: The Brexiteers who want Britain to go back to their
Speaker 1: pre lapse arian form they are are desperate for this,
Speaker 1: you know, purifying no deal Brexit until they can go
Speaker 1: back and be Britain of the nineteenth century. And the
Speaker 1: remainders are desperate to redo the referendum, and they're thinking
Speaker 1: this is a huge step forward towards a second referendum.
Speaker 1: Do you think that's going to happen. I actually think
Speaker 1: that Britain will stay in the European Union in some form,
Speaker 1: whether it's a Norway Plus which is a lesser version
Speaker 1: of membership, or there'll be a second referendum. But that
Speaker 1: brings us back to the vote of no confidence today again.
Speaker 1: The Labor Party in Jeremy Corbyn, it's leader, brought this
Speaker 1: brought this vote today, which is the first one in
Speaker 1: twenty four years. It's very rare. His party said they're
Speaker 1: open to bringing more of them in the near future.
Speaker 1: What that means is that the Labor Party has committed
Speaker 1: more towards trying to get a new general election than
Speaker 1: pushing for a second referendum. For some reason, I've always
Speaker 1: felt a second referendum is kind of where the country
Speaker 1: should go, given the greater knowledge of what is really entails.
Speaker 1: But that doesn't that may may not happen what side
Speaker 1: do you think of? This argument will move first towards accommodation.
Speaker 1: The problem with Brexit is that it has only two constants.
Speaker 1: It's totally irrational and totally unpredictable. Uh. A lot of
Speaker 1: the opponents of a second referendum UM have an argument
Speaker 1: that Trump supporters here would would would support, which is,
Speaker 1: we had to vote, the country spoke, we got an outcome,
Speaker 1: and now you want to revisit it. Donald Trump is president,
Speaker 1: get used to it. Well, hold on, if you if
Speaker 1: they did hold another referendum, do you think that most
Speaker 1: people in the United Kingdom would vote against Brexit? Now
Speaker 1: there seems to be in in polling and people have
Speaker 1: pulled this extensively, about a fifty one percentage in favor
Speaker 1: of remain. Now now that the the the facts are
Speaker 1: coming out. The amazing thing about the Brexit referendum was
Speaker 1: that the Leave folks campaigned on things that weren't true
Speaker 1: and rubbish the things that were. Now we are in
Speaker 1: exactly the reverse situation. So what is your sense of
Speaker 1: timing here? I see discussions about delays and delays? Is
Speaker 1: that the mode written now? Or do you expect something
Speaker 1: quickly to happen? One way or the other. Theresa May
Speaker 1: is required on Monday to provide her Plan B for
Speaker 1: what comes next. Uh. In many ways, Theresa May is
Speaker 1: no longer in charge of this process because she's Prime
Speaker 1: Minister in name only, with enormously diminished powers of executive office,
Speaker 1: much the same way that Donald Trump is as president
Speaker 1: after the election. Now he's balanced by the House of
Speaker 1: Representatives led by nance Dallassandro Pelosi. So we're not going
Speaker 1: to explain all that right now, but there's a backstory.
Speaker 1: But um on Monday, Theresa May will put out a
Speaker 1: new plan and it won't be terribly relevant because she's
Speaker 1: already so damaged and in a normal year she would
Speaker 1: have been she would have resigned yesterday. But we're not
Speaker 1: in a normal year. This isn't in a normal situation,
Speaker 1: and no one can predict what comes next. Here's my question,
Speaker 1: at what point will the European Unions say we want
Speaker 1: to be negotiating with Prime Minister May. She has shown
Speaker 1: her grit, she has shown stomach through all of the
Speaker 1: jeers and the and the rowdy meetings in Parliament. We
Speaker 1: want to deal with them, so so let's throw her
Speaker 1: a bone. We don't want to be dealing with Corbin.
Speaker 1: Is that likely? No, it's not, You're like, no, that
Speaker 1: not because the European Union doesn't want to get involved
Speaker 1: in internal British politics, because not even Britain's understand internal
Speaker 1: British politics. And I'll just remind you that back in
Speaker 1: when Margaret Thatcher went under a leadership challenge, she won
Speaker 1: the first vote, the first out, but not by that
Speaker 1: much and she said, I fight on, I fight to win.
Speaker 1: Twenty four hours she resigned. Theresa May's on very thin nice.
Speaker 1: Is there any scenario where the EU would accommodate anything
Speaker 1: at this point just to get a deal done? Are
Speaker 1: they just gonna let the Britain's figure it out? They
Speaker 1: probably want this to fail, right as sort of an
Speaker 1: example to the rest of the Nation's Well, yeah, you
Speaker 1: have to remember what Britain brings to the table for
Speaker 1: the EU, which is considerable. One is Britain as a
Speaker 1: net contributor to the EU budget. They give more money
Speaker 1: to Brussels than they take and that's not true of
Speaker 1: a lot of the members of the European Union. Secondly,
Speaker 1: Britain is the second largest economy and an important economic
Speaker 1: part and home to the europe to the European capital Um,
Speaker 1: the European financial capital. But also important, let's just say
Speaker 1: still is and is moving. But the final thing is
Speaker 1: there are social and legal issues within the European Union.
Speaker 1: Their Eastern European members are becoming a little bit more authoritarian.
Speaker 1: And Britain has long been a pillar of the rule
Speaker 1: of law and and it's importance that EU wants to
Speaker 1: keep Britain in. If Britain wants to stay in. It's
Speaker 1: just Brussels has no idea what Britain wants right now. Wow,
Speaker 1: this is something. Uh, you know we're gonna be talking
Speaker 1: about this, We've been talking about for over two and
Speaker 1: a half years. It's just it's not gonna go away.
Speaker 1: And here we go. All I know is I think
Speaker 1: we're gonna be having Sam uh Not in our studios
Speaker 1: more often going forward, just because it's never gonna end. Uh.
Speaker 1: Thanks Dr Sam not a president Empire Global Ventures. Uh
Speaker 1: here with us in the Bloomberg Interactive Broker studio. So
Speaker 1: let's talk a little Netflix. Netflix is reporting earnings tomorrow
Speaker 1: after the close. Stocks had a phenomenal run. What else
Speaker 1: is new? It's up? Uh, I guess you know, thirty
Speaker 1: percent year to date, up about six over the last
Speaker 1: twelve months, so stock continues to perform extremely well. The
Speaker 1: company announced yesterday a significant price increase, the four one
Speaker 1: we've seen recently. Uh and stock traded up on that news.
Speaker 1: So let's get some more color on Netflix with Mark
Speaker 1: Douglas Marcus the CEO of Steelhouse. It's based in Los Angeles, California,
Speaker 1: but Marcus with us is here at the Bloomberg eleven
Speaker 1: three oh Studios. Mark, welcome. What do you make of
Speaker 1: the price increase? That was an aggressive price increase yesterday.
Speaker 1: What does it tell you about the company and its future? Yeah, so,
Speaker 1: I think in the immediate literally tomorrow, I think it's
Speaker 1: an indicator, a pretty strong indicator that they're gonna report
Speaker 1: really good numbers. I don't think. I don't think most
Speaker 1: people would basically report something that could make people think
Speaker 1: that maybe they might the growth might slow, and then
Speaker 1: report slower numbers. So I'm betting that they report really
Speaker 1: good earnings. I think. The other thing is is that
Speaker 1: I think there's no place else for you to go
Speaker 1: as a consumer. Netflix is the for everyone I know,
Speaker 1: Netflix and in their numbers, the first place to go. Second,
Speaker 1: I want to because I want to push back Disney
Speaker 1: coming out with their own streaming service, supposedly the Netflix
Speaker 1: killer right this year, and they're gonna take some of
Speaker 1: their movies off of Netflix rotation. Is that going to
Speaker 1: matter or you think no, it doesn't matter that Disney
Speaker 1: is now irrelevant. I think that basically the consumers have
Speaker 1: a short list and starts with Netflix. That's where the
Speaker 1: money goes first. A monthly subscription is less than the
Speaker 1: cost of a single movie. It's increasingly all new, all
Speaker 1: original content. They crushed it with bird Box at the
Speaker 1: end of the year. Another reason why I think they're
Speaker 1: going to report really good numbers and then everything after
Speaker 1: that is where do I go next? Do I go
Speaker 1: to Hulu? Do I go to Disney? You don't have
Speaker 1: kids to you? I actually do. But they're not Disney age,
Speaker 1: the Netflix age. So from the computer, from the competitive
Speaker 1: lent landscape perspective, You're right. Netflix has been it. They've
Speaker 1: been first to market. They've got the market share a
Speaker 1: hundred thirty seven million subscribers globally. Everybody else is playing catchup.
Speaker 1: But I'll come back to what I heard from some
Speaker 1: of the Redstone thirty years ago, where content is king
Speaker 1: the big media companies are pulling their content off of Netflix. Uh,
Speaker 1: Disney doubles down the twenty one century Fox acquisition, so
Speaker 1: it loads up it's it's content. It does feel like
Speaker 1: the competitive landscape in ten is going to be materially
Speaker 1: more difficult for Netflix, and it's been in the past. Yeah,
Speaker 1: but I think they look, you know, Toyota and Ferrari
Speaker 1: don't compete right the the you can it's where money
Speaker 1: goes to a number of these companies. Where does it
Speaker 1: go from consumers? Where does it go first? Where's it
Speaker 1: go second? Where does it go third? Until you see
Speaker 1: people saying I'm going to cancel my Netflix subscription to
Speaker 1: get a Disney subscription, then not really competing. So you
Speaker 1: think there's a the marketplace can support two or three
Speaker 1: or four. Yeah. I would be concerned about NBC Universal,
Speaker 1: like I wouldn't be concerned about Hulu. I wouldn't be
Speaker 1: concerned about Disney. I wouldn't be concerned about Netflix. So
Speaker 1: let's talk about, um my fixed expenses. How much can
Speaker 1: Netflix raise prices before people push back? In other words,
Speaker 1: a year from now, could they say, you know what,
Speaker 1: you love our stuff so much? A month? I think
Speaker 1: that their next price increase is very quiet. There was
Speaker 1: a meme, so bird Box spawned all these memes on
Speaker 1: Instagram and other social media. One of the funniest ones
Speaker 1: was how those forty five million people watch bird Box
Speaker 1: with twelve Netflix accounts? Right, so everyone knows is sharing accounts.
Speaker 1: I think Netflix's next price increases to start locking down
Speaker 1: the ability to share the accounts starting to drive consumers
Speaker 1: who are borrowing accounts to buy. How do they do
Speaker 1: that and why haven't they done it already? Well, because
Speaker 1: it's a form of free trial to to basically allow
Speaker 1: accounts to be as easily shared. There's a little bit
Speaker 1: of control on it, but for the most part, every
Speaker 1: you can easily get access to Netflix account without paying
Speaker 1: for it. The locking it down technically is is pretty easy.
Speaker 1: Hulu does it. So I think their next price increases
Speaker 1: not announced. It's just it's harder to share, which creates
Speaker 1: more subscribers. I would I'm bullish on Netflix. I would
Speaker 1: be that that that's a whole another increase in revenue
Speaker 1: that's not accounted for. They still have so many levels
Speaker 1: to push. They're basically the biggest production company in the world.
Speaker 1: Let's go to that point. That you know, on the
Speaker 1: other side of the income statement, where it's not just
Speaker 1: a revenue story, it's a call story. And they're spending
Speaker 1: like drunken sailors in Hollywood. The Ted Serrando's checkbook is open,
Speaker 1: nobody spends more money. Nobody's got a bigger check book
Speaker 1: is there, and they have no free cash flow. By
Speaker 1: the way, they can't pay for it, so they're going
Speaker 1: to the bond market. Is there a point where you
Speaker 1: get concerned that they're spending too much? Um, Well, they
Speaker 1: just generated another billion dollars in cash annually with the
Speaker 1: price increase they announced yesterday. I mean, that's the that's
Speaker 1: the that is the long term concern they I think
Speaker 1: they have twelve billion dollars in debt um they're negative
Speaker 1: cash flow three billion dollars a year. But they're expanding
Speaker 1: their user bay rapidly. And you know that they added
Speaker 1: a billion dollars in cash all jess with Essay's announcement,
Speaker 1: assuming that there's no consumers don't leave, so you know
Speaker 1: they're managing it for now. Two or three years from now,
Speaker 1: I might be a little more concerned. I think for
Speaker 1: the foreseeable future, they have a lot of levers to
Speaker 1: continue to generate subscriptions and generate cash in literally ten seconds.
Speaker 1: Who's their biggest competitor. I think Disney is the biggest competitors,
Speaker 1: so they're not they can't really compete, but they can compete.
Speaker 1: They can compete, but I don't think they take subscriptions
Speaker 1: away yet. But they are the number two. They become
Speaker 1: the number two choice. Mark Douglas, thank you so much
Speaker 1: for being with us. Always a pleasure. Mark Douglas is
Speaker 1: chief executive of Steelhouse based in Los Angeles, but he
Speaker 1: joins us here in our Bloomberg Interactive Broker's studios. You know,
Speaker 1: one of the fastest growing segments of the consumer products
Speaker 1: business has been the cannabis sector. UH. We have thirty
Speaker 1: eight states approximately in the US right now that have
Speaker 1: legalized cannabis. There's companies coming public, much greater awareness and
Speaker 1: acceptance of legal cannabis. UH. Joining us today is Kevin Hart,
Speaker 1: founder and CEO of green Check Verified out of New Haven, Connecticut.
Speaker 1: He joins us in the Bloomberg eleven three oh studios
Speaker 1: to talk to us a little bit about what how
Speaker 1: his company is playing in the food chain, if you will,
Speaker 1: of the legal cannabis business. So, Kevin, thanks for being
Speaker 1: here with us real quick, you give us our listeners
Speaker 1: kind of the thirty second elevator pitch for what your
Speaker 1: company doesn't, how you fit into the ecosystem. Sure, we
Speaker 1: recognize three years ago that you know, the banking for
Speaker 1: the cannabis industry was believed to be illegal, and that's
Speaker 1: simply not true. It's it's legal within the states where
Speaker 1: those programs are compliant and they're recognized to the number
Speaker 1: that you said. The challenges, it's just very complex and
Speaker 1: very expensive for state charter banks and financial institutions, which
Speaker 1: means it's impossible for a cannabis business to actually be
Speaker 1: able to do this. So you have these two independent,
Speaker 1: highly regulated industries that really don't know much about each
Speaker 1: other but would love to work together. That screams the
Speaker 1: opportunity for technology. So we developed the technology framework of
Speaker 1: platform and web AP that integrates all the rules and
Speaker 1: regulations at the local level that the cannabis business operates on.
Speaker 1: We monitor their them for compliance. We monitor every individual
Speaker 1: transaction at the dollar level, and therefore that information has
Speaker 1: passed along to the financial institutions so they can review
Speaker 1: the money bring it into deposit accounts and financial institutions,
Speaker 1: state charter banks and credit unions are dying for new
Speaker 1: deposit dollars. It's a challenged industry because of the bigger banks.
Speaker 1: They can bring that money in and they can pass
Speaker 1: their rules and their risk profile internally, and then they
Speaker 1: can pass that information back all the way through to
Speaker 1: the exam cycle on the back end. So it is
Speaker 1: a holistic, integrated, horizontal approach to attacking the banking challenge.
Speaker 1: And we work within the banking system, not around it. Okay,
Speaker 1: So rather than just saying we'll use bitcoin, right, you're saying, actually,
Speaker 1: here is an ecosystem that can that can perhaps be
Speaker 1: sustainable within the existing financial world. What I'm trying to
Speaker 1: understand is first of all, how you make money, who
Speaker 1: pays you? And then second of all, is it just
Speaker 1: state and local UH financial firms that adhere to this
Speaker 1: sort of local guidance from the rules or can it
Speaker 1: be the JP Morgan to Bank America On the back
Speaker 1: end here, the larger financial institutions aren't going to get
Speaker 1: involved in this industry yet, it's not worth the reputational risk.
Speaker 1: And you know candidly, they just don't have the monitoring
Speaker 1: ability of those individual transactions and the rules and regulations
Speaker 1: at that local level. Um. You know, at some point
Speaker 1: in time is laws change and regulations evolve. I think
Speaker 1: we'll see the bigger banks getting involved. You can't deny
Speaker 1: the size of the industry and the growth, but not today.
Speaker 1: And so this is a ripe opportunity for those state
Speaker 1: charter banks, great unions that are looking for new deposit dollars. Um.
Speaker 1: You know there are the reason why Bitcoin and the
Speaker 1: others don't participate is, you know, it's it's complex enough.
Speaker 1: You take non regulated currencies and you add that to
Speaker 1: the mix, and that's just gonna push people farther and
Speaker 1: farther away. So you know, this is about monitoring cash.
Speaker 1: You know, it's eight plus percent of the transactions are
Speaker 1: still done in cash. This is an essentially cash intensive business.
Speaker 1: Where do you get your cash? Our fee structure is
Speaker 1: based upon the dispensary. They pay a nominal fee structure.
Speaker 1: It's cheaper than the cost of a debit or credit
Speaker 1: card transaction fee. And we also have a tiered pricing
Speaker 1: structure with the financial institutions, so we do collective fee
Speaker 1: on both ends, but it's still cheaper than the cost
Speaker 1: of cash. So how are the local financial institutions viewing
Speaker 1: the cannabis business. Are they receptive to it? Are they
Speaker 1: still resistant to it? Does your presence and your regulatory
Speaker 1: framework help ease that? Where are they in the general? Okay,
Speaker 1: I'll do business with the local cannabist company. It's a
Speaker 1: fascinating process that we've been involved with so far. We
Speaker 1: knew we had to not convince, but we knew we
Speaker 1: had to be able to position our value to the
Speaker 1: financial institution. And to date, the street will end. And
Speaker 1: you know, I'm a sports person. I believe in hot streaks.
Speaker 1: The street will end. Every financial institution that we've had
Speaker 1: conversations with and demo this platform too, has asked us
Speaker 1: for an exclusive on the product and the geography there.
Speaker 1: And I've been selling enterprise software for forty years and
Speaker 1: been involved. Nobody's ever done that before. So this is
Speaker 1: compliance software, but it's compliance that comes with new business.
Speaker 1: It actually comes with the deposit dollars attached to it,
Speaker 1: and they see those opportunities, so they're very excited about it.
Speaker 1: So what's the longer term plan for green check Verified.
Speaker 1: I'm just wondering, do you see this is eventually being
Speaker 1: acquired by a major bank when the reputational risk goes away,
Speaker 1: or will there be an I p o UM. We
Speaker 1: look at all those options. I'm a big believer to
Speaker 1: begin with the end of mind and you always have
Speaker 1: to keep your options open as to what you might
Speaker 1: do from a company perspective. But our goal right now
Speaker 1: is to continue our growth trajectory. We started our national
Speaker 1: launch that's rolling out. We're in fifteen states right now,
Speaker 1: and for levels of conversation and implementation, we'll see where
Speaker 1: the market goes. There will be some changes as things
Speaker 1: involve in Washington, but legalization and State's Right Act actually
Speaker 1: are going to become an accelerant for us because the
Speaker 1: Treasury is never going to turn a green line onto
Speaker 1: banking and all the black market money that's out there.
Speaker 1: And I wonder if actually federal law legalizing marijuana fight
Speaker 1: her no, and it will actually help Okay, it will
Speaker 1: actually help us. All right, Well, we'll have to continue
Speaker 1: exactly how that would help you at another time. Unfortunately
Speaker 1: out of time. But Kevin Hart, really interesting having you on.
Speaker 1: Thank you for being with us. It's important to kind
Speaker 1: of look at the infrastructure of the cannabis industry. I
Speaker 1: speak to so many people on Wall Street who say, Gosh,
Speaker 1: I coul should have gotten into cannabis, not training play
Speaker 1: and consumer. Kevin Hart is a founder and chief executive
Speaker 1: officer of green Check Verified, which is based in New Haven,
Speaker 1: Connecticuty choices here in our New York City headquarters of
Speaker 1: Bloomberg LP. Lisa, I think we're on day if I'm
Speaker 1: not mistaken of this partial government shutdown. And obviously, in
Speaker 1: addition to the question of how long will it last? Uh?
Speaker 1: And is there any end in sight? The question is
Speaker 1: can it get any worse than what we're seeing right now?
Speaker 1: It looks like President Trump has ordered thousands of federal
Speaker 1: employees back to work, most notably without pay. But let's
Speaker 1: bring in Chris Flavel, Bloomberg policy reporter for Bloomberg News.
Speaker 1: He's at studio in Washington, d C. And he's out
Speaker 1: with a story on this topic. So, Chris, thanks so
Speaker 1: much for joining us. You know, where do you think, uh,
Speaker 1: this shutdown goes maybe over the near term, the next
Speaker 1: week or so. Yeah. So we've got a story where
Speaker 1: we put that to people who follow this stuff and
Speaker 1: to people inside and around government. And there's a list
Speaker 1: and I would, you know, I'd be folly to try
Speaker 1: and say here are the scariest things. But one that
Speaker 1: certainly is alarming is what happens to government workers who
Speaker 1: decide they just no longer want to be working for free.
Speaker 1: You mentioned that the president has ordered more federal employees
Speaker 1: back to work, even though they're not paid. That's certainly
Speaker 1: one way of addressing this. But the problem that we're
Speaker 1: told is really concerning people at senior levels of government
Speaker 1: is what if people in vital functions like T s
Speaker 1: A just stop showing up. They can call in sick,
Speaker 1: they can quit, they can do anything else, but if
Speaker 1: they're not they're doing their job, really vital functions start
Speaker 1: to stop, whether that is food inspection, whether it's people
Speaker 1: getting on planes, whether it's prison guards. And we've never
Speaker 1: been here before, so we're not really sure if it
Speaker 1: goes on weeks or even months, how they'll respond. Well,
Speaker 1: And Chris, I mean, we haven't we seen that to
Speaker 1: some accent already with the lines at uh it sort
Speaker 1: of security checkouts at airports, T S agents showing up. Yeah,
Speaker 1: that's a great example. So the latest figures I heard
Speaker 1: yesterday where I think somewhere in the neighborhood of seven
Speaker 1: percent of workers calling in sick. That's almost three times
Speaker 1: the typical number. Look at the chaos we've seen with
Speaker 1: just seven percent of workers not showing up imagines ten fifty. Uh,
Speaker 1: it's really I don't want to suggest we're predicting it.
Speaker 1: No one knows. I think the concern is there's nothing
Speaker 1: really stopping that from happening, and if it does, I
Speaker 1: don't know what, if anything, the government can do to
Speaker 1: deal with it. What are some of the areas and
Speaker 1: your reporting that you found that you know might be
Speaker 1: you know, the most problematic for Americans. Um, you know
Speaker 1: we mentioned T s A. What are some of the
Speaker 1: other parts of government that could be impacted? Certainly if
Speaker 1: you're looking at the sort of the wide spread impacts,
Speaker 1: food stamps are a huge issue. The administration has found
Speaker 1: a way to keep on sending food stamps for now,
Speaker 1: it's made clear that that can't continue forever, perhaps through February.
Speaker 1: There's an enormous share of American families that rely on
Speaker 1: food stamps, thirty eight million people. They account for ten
Speaker 1: of all food people buy in stores and take them
Speaker 1: to eat. If those food stands stopped it would be
Speaker 1: catastrophic for a significant share American families housing support. There's
Speaker 1: a huge number of housing families that need help getting housing.
Speaker 1: If that couldn't be processed anymore because HUD the anecy
Speaker 1: in charge could no longer work, that be very traumatic.
Speaker 1: And then company and batch. This is a big deal
Speaker 1: because we don't really know what happens when, for example,
Speaker 1: I p O stop, when the patent office closes. These
Speaker 1: are things that we haven't really experienced, so we're, in
Speaker 1: a sense we're speculating, but based on pretty good information.
Speaker 1: The core of it is a lot of these agencies
Speaker 1: have sort of clever workarounds that will keep them performing
Speaker 1: vital functions for a certain amount of time, but not forever,
Speaker 1: and we're approaching that limit. So I should give you
Speaker 1: a sense of some of the numbers behind this. Ian Bremer,
Speaker 1: who is the president of your Asia group, just tweeting
Speaker 1: out this data from the New York Times. The typical
Speaker 1: federal worker has five thousand dollars in pay since the
Speaker 1: shutdown began. That's a total of two hundred million dollars
Speaker 1: and unpaid wages each work day. I'm just wondering what
Speaker 1: President Trump's power actually is to order people to go
Speaker 1: to work even though they're not being paid. So this
Speaker 1: is before the courts. Yesterday here in d see a
Speaker 1: federal judge dismissed for now a request by a union
Speaker 1: of federal employees to insist that they be paid. So
Speaker 1: that is still winding its way through the courts. But
Speaker 1: look at a legitimate question, right what is the limit
Speaker 1: of the government's legal ability to order people to work
Speaker 1: without pay and for how long? Even if that gets
Speaker 1: worked out, you still have the issue of funding right now.
Speaker 1: One thing that we looked at in our story is
Speaker 1: the federal government is an enormous landlord. They pay out
Speaker 1: almost half a billion dollars in rent every month to
Speaker 1: landlords around the country. That could stop as the g
Speaker 1: s A either runs out of workers to process those
Speaker 1: checks or money to pay that rent. So again, sort
Speaker 1: of a cascading effect in ways that we can guess
Speaker 1: at but won't really know until it happens. So, Chris,
Speaker 1: and you're reporting just real quickly. Did you get any
Speaker 1: sense anywhere that these mounting, exponentially mounting problems are weighing
Speaker 1: on Congress at all one one way or the other
Speaker 1: to get a deal done. You know. It's it's so
Speaker 1: it strikes me as a black box. It's hard to
Speaker 1: see a link between how bad things are in the
Speaker 1: real world and what's happening in Congress. Uh, And and
Speaker 1: it would seem just impossible to meaningfully predict what's going
Speaker 1: to happen. The one thing we can say from our
Speaker 1: reporting is these effects are real. Uh, They're bigger than before,
Speaker 1: and they affect really almost every facet of the economy
Speaker 1: and the country. So certainly, Uh, they are painful for
Speaker 1: a lot of people and extremely so for many and
Speaker 1: they will again just get worse. Chris, I'm shocked that
Speaker 1: you didn't want to go out there and speculate what
Speaker 1: Congress is going to do. Next time you come on,
Speaker 1: we expect you to have a full eight ball prediction
Speaker 1: of what's going to happen in Washington. Thank you. I
Speaker 1: appreciate that. Chris Flavell is policy reporter for Bloomberg News
Speaker 1: down in the nation's capital, Washington, d C. Where at
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