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Speaker 2: I'm looking at shares of Coinbase in the after hours.
Speaker 2: They're taking a leg lower, and like you said, Carol,
Speaker 2: this stock was under pressure but still down one point
Speaker 2: seven two percent, bouncing around but in the red as
Speaker 2: we speak. In terms of fourth quarter total revenue that
Speaker 2: missed estimates, the company expects headcount to grow slightly higher
Speaker 2: than in Q four. Fourth quarter adjusted IBADA came in
Speaker 2: below estimates. Fourth quarter adjusted EPs came in at sixty
Speaker 2: six cents below estimates.
Speaker 3: What are you saying, I'm looking at the release looking
Speaker 3: forward to twenty twenty six. We continue to be optimistic
Speaker 3: about the long term trajectory of the crypto industry. And
Speaker 3: they also said it was a strong year in twenty
Speaker 3: twenty five for Coinbase, both operationally and financially, and so yeah,
Speaker 3: they say, as regulatory clarity emergence, we believe crypto will
Speaker 3: update all financial services and Coinbase as well positioned to
Speaker 3: capitalize on that transition. So, you know, but connect Start underperformed.
Speaker 2: It was down nine percent in twenty twenty five. So
Speaker 2: even if it was a good year financially for the company,
Speaker 2: investors didn't reward it.
Speaker 4: Yeah, let's see what.
Speaker 3: Monique Malema has to say. She's Bloomberg News equities reporter.
Speaker 3: She's in Toronto, follows this name. Was twenty twenty five
Speaker 3: a strong year for coinbase and does twenty twenty six
Speaker 3: should they be Coinbase optimistic about the year and the
Speaker 3: long term trajectory of the crypto industry at this point
Speaker 3: in time.
Speaker 5: So twenty twenty five was a mixed year for Coinbase.
Speaker 5: We saw at the start of the year there was
Speaker 5: a lot of momentum as the Trump administry came in
Speaker 5: was really embracing crypto, and we saw a huge wave
Speaker 5: of investment into cryptocurrencies, which benefited Coinbase on their transactions
Speaker 5: and trading. But as we've seen crypto prices pullbacks and
Speaker 5: that record high they hid in October, we've seen that
Speaker 5: way on coinbas as, shares and We've also seen it
Speaker 5: way on their revenue as less people are trading on
Speaker 5: the platforms, which means less transaction revenue and also less volumes.
Speaker 3: Monique, what is their bal what does their balance sheet
Speaker 3: look like? I'm just looking at it, says In January
Speaker 3: twenty twenty six, we know this. Our board expanded our
Speaker 3: share and long term debt repurchase authorization by an addicitial two
Speaker 3: billion dollars. We were mindful of reducing our overall dilution opportunistically.
Speaker 4: We are deliberately well.
Speaker 3: Capitalized with eleven point three billion in cash and cash equivalents,
Speaker 3: to weather these cycles and continue to invest in the
Speaker 3: future of finance.
Speaker 4: Is their balance sheet solid?
Speaker 5: So analysts do think that their balance sheet is still solid.
Speaker 5: You know, Coinbase, they are the largest cryptocurrency exchange in
Speaker 5: the US. There are on much solid fitting compared to
Speaker 5: some of the smaller crypto firms that are out there.
Speaker 5: But you know, analysts are also expecting that cryptocurrency is
Speaker 5: going to continue to kind of see a downturn going
Speaker 5: through this year. So that's going to continue to weigh
Speaker 5: on coin Base, even if they can weather it for now.
Speaker 5: And we've seen some analysts already pull back their price
Speaker 5: targets and their estimates for coinbasis earnings for this year
Speaker 5: and next year.
Speaker 2: Yeah, how do you explain the analyst community has just
Speaker 2: been a brutal to this company over the past few weeks.
Speaker 2: You had a great article. It was kind of an
Speaker 2: earning's preview, but also much more than that because it
Speaker 2: gave the context for what all these analysts are saying
Speaker 2: about the company recent double downgrade to the company as well.
Speaker 2: Why are analysts so bearish?
Speaker 5: So anamals are really beverish because of the downturn we've
Speaker 5: seen in crypto markets. Bitcoin is down over forty percent
Speaker 5: from the higatt hidden October, and that's really weighing across
Speaker 5: the whole crypto ecosystem. We had an analyst at Lonesse,
Speaker 5: crispian Heart, say today that they felt that they were
Speaker 5: foolish for thinking that crypto markets were going to be
Speaker 5: recovering more quickly than they are, and they're the ones
Speaker 5: that did the double downgrade on Coinbase. We've seen six
Speaker 5: analysts cut their price targets on Coinbase this month alone,
Speaker 5: so they're really realizing that this downturn we're seeing in
Speaker 5: crypto people are thinking is not going to be changing
Speaker 5: anytime soon. They think prices are going to continue to
Speaker 5: be depressed, and with so much of Coinbase's business at
Speaker 5: this point being focused on cryptocurrency, they think that's really
Speaker 5: going to weigh on the company's shares.
Speaker 3: What do you think they're going to be kind of
Speaker 3: hammered on on the call with investors and analysts. I mean,
Speaker 3: the stock it is still down, but it's pairing some
Speaker 3: of its deeper losses after it reported earnings. It's still
Speaker 3: down though, about two point two percent.
Speaker 4: Here.
Speaker 5: A lot of the focus for analysts has been how
Speaker 5: was this company going to expand its revenue base. We've
Speaker 5: seen that coinbas announce last year that they're going to
Speaker 5: be venturing more into prediction markets, into equities trading, and
Speaker 5: all these other products that are hoping to diversify the
Speaker 5: company from being so concentrated in the crypto industry. And
Speaker 5: that's something analysts think can help kind of balance out
Speaker 5: some of these declines that are happening in the crypto space.
Speaker 5: But they really want to see more gains in those areas,
Speaker 5: particularly in prediction markets, which has become such a massive market,
Speaker 5: to really see that there is more longevity and more
Speaker 5: sustainability outside of this downturn that's in crypto right now,
Speaker 5: what I.
Speaker 6: Don't I mean?
Speaker 2: Correct, help me understand this this monique. If stock prices
Speaker 2: go down to exchanges that have stock suffer because they're
Speaker 2: still buying and they're still selling. Is the crypto industry
Speaker 2: different in that the exchanges only do well when the
Speaker 2: prices go up.
Speaker 5: So redactions are transactions, Yeah, transactions are transactions, But for crypto,
Speaker 5: the difference is that a lot of crypto is sentiment driven.
Speaker 5: So when crypto prices are depressed, that means that a
Speaker 5: lot of people in the crypto industry start pulling out.
Speaker 5: We've seen that that there's been mass liquidations in crypto
Speaker 5: that we've seen people go to other markets like prediction markets,
Speaker 5: or to the stock market, or just sitting back when
Speaker 5: prices become depressed. So it's not just about the fact
Speaker 5: that the crypto prices are lower. It's that then that
Speaker 5: also leads to lower volumes, which isn't necessarily the same
Speaker 5: in stock markets, even when the stock markets down, people
Speaker 5: might be switching to other areas of the stock market,
Speaker 5: versus in cryptos, some people are just choosing to lead.
Speaker 3: You know, I'm looking at ogu caref for the write
Speaker 3: through on Coinbase here in the aftermarket, and she reminds
Speaker 3: us about rival exchange Gemini space Station, saying this week
Speaker 3: that it plans to cut up to twenty five percent
Speaker 3: of its workforce and scale back international operations, so underscoring
Speaker 3: how these rapidly weaker markets can basically translate into operational pressure.
Speaker 3: Is there any operational pressure on Coinbase that we know of?
Speaker 5: Not that I'm aware of. In terms of the operation pressure,
Speaker 5: like I'd mentioned, they're really focusing right now on expanding
Speaker 5: their products so that there's not going to be so
Speaker 5: much concentration in crypto, and so there will be a
Speaker 5: focus on the prediction markets, on the equities trading, on options.
Speaker 3: But the production markets have their problems too, right, I mean,
Speaker 3: especially when so much as sports right and sports gambling
Speaker 3: or gaming if you will, I mean, the gambling guys
Speaker 3: and the gambling platforms who are highly regulated have got
Speaker 3: to be looking and say, well, wait a minute, you know,
Speaker 3: there's got to be some regulation that's going to come
Speaker 3: in to these prediction markets.
Speaker 5: Yes, definitely. It's not an area without its own issues.
Speaker 5: We know the CFTC had said that they are looking
Speaker 5: at creating some types of rules or frameworks around prediction
Speaker 5: markets when it comes to things like sports. But for
Speaker 5: people who are in this space, the idea of something
Speaker 5: being a little volatile of operating, you know, somewhat in
Speaker 5: a bit of an area that hasn't been fully regulated,
Speaker 5: it isn't out of the ordinary. For crypto you know,
Speaker 5: this is something they are used to. They're used to
Speaker 5: the fact that, you know, even for crypto markets, we're
Speaker 5: still seeing legislation being debated. So for them, it's not
Speaker 5: as much of a fear of going into prediction markets
Speaker 5: with that uncertainty because they've already been for so long
Speaker 5: having to operate in uncertainty.
Speaker 2: Hey, speaking of prediction markets, we're getting DraftKings results. Crossing
Speaker 2: shares fell as much as fourteen percent in the immediate
Speaker 2: aftermath of these, now down about nine and a half percent.
Speaker 2: The company sees twenty twenty six revenue six and a
Speaker 2: half to six point nine billion dollars that came in
Speaker 2: below estimates of seven point three to two billion dollars.
Speaker 2: The twenty twenty sixth revenue outlook miss is what is
Speaker 2: pushing the stock lower. Fourth quarter revenue did meet estimates,
Speaker 2: fourth quarter adjusted Ibada did come in above estimates. Fourth
Speaker 2: quarter earnings per share coming in above estimates too.
Speaker 3: Yeah, and I think it's interesting fourth quarter looking back
Speaker 3: at the quarter that was monthly unique payers four point
Speaker 3: eight million. The estimate was five point forty three million,
Speaker 3: so a.
Speaker 4: Little bit below as well as you look.
Speaker 3: But that out look as certainly what Scott investors a
Speaker 3: little bit, a little bit nervous. The stock, by the way,
Speaker 3: is down twenty seven percent already in twenty twenty six.
Speaker 2: Monique Malima, we are going to let you go. She's
Speaker 2: Equity's reporter for Bloomberg News. She joins us from Toronto.
Speaker 2: She covers coinbase. She covers the entire crypto industry. Check
Speaker 2: out her reporting and more on the Bloomberg terminal and
Speaker 2: at Bloomberg dot Com. Stay with us more from Bloomberg
Speaker 2: business Week Daily coming up after this.
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Speaker 2: Eric Wiener, he walked into our studio.
Speaker 7: He's like, what okay, and like you could almost say
Speaker 7: that every day, but there are days where it's like,
Speaker 7: oh my god, right, why do you say that though
Speaker 7: specifically because it's not like everything was down today, No,
Speaker 7: not at all.
Speaker 8: It was a weird day. See we've been having a
Speaker 8: lot of weird days. Is that it is the AI
Speaker 8: scare and and it's you have this roving AI worry
Speaker 8: that's just taking out entire industries at once, sort of
Speaker 8: a cell now and then see what happens later. So
Speaker 8: today we saw like logistics stocks get hammered because the
Speaker 8: company that was the singing machine company and made karaoke
Speaker 8: equipment now has an AI bot that does logistics and
Speaker 8: they're taking out you know, billions of dollars in market cap.
Speaker 9: From logistic is a real thing. It's a real thing. Okay,
Speaker 9: well yeah, like what is that? Well it's really strange.
Speaker 9: So what you have is the idea. You have two
Speaker 9: ideas that are filtering through the market right now, both
Speaker 9: related to AI, that seem to be at conflict with
Speaker 9: each other. You have on one level, big company spending
Speaker 9: a ton to develop AI, and the market saying, you know, when.
Speaker 8: Are we going to start seeing some returns from this?
Speaker 8: And are you spending too much and is this throwing
Speaker 8: good money after bat? So they get hit. Then you
Speaker 8: start seeing some little obscure company that used to make
Speaker 8: karaoke machines saying we've got an AI bot that is
Speaker 8: going to fix logistics, and all of a sudden they
Speaker 8: sell off logistics companies. Now, I don't necessarily know that
Speaker 8: the market knows exactly how this is going to play out.
Speaker 8: They're just thinking that right now, sentiment is so soft
Speaker 8: that you just get get out, well you can, and
Speaker 8: then buy back in twenty five percent later.
Speaker 2: I want to bring in Bloomberg News senior editor and
Speaker 2: author of the Everything Risk newsletter, Ed Harrison. He joins
Speaker 2: us from our Washington dcbureau, and I want to bring
Speaker 2: you in because you write about risk the Everything Risk newsletter,
Speaker 2: and it seems like the risk right now is that
Speaker 2: there's going to be you know that old commercial from Apple,
Speaker 2: there's an app for that. Well, as soon as there's
Speaker 2: an AI for that, whatever sector that is sells off.
Speaker 2: What's going on?
Speaker 10: Yeah? Hey, Tim, So remember we were talking a few
Speaker 10: days ago. I was saying that there was people were
Speaker 10: de risking ahead of time and that this was building.
Speaker 10: But we're at an inflection point where we really don't
Speaker 10: know how that's going to work out. I think Eric
Speaker 10: is hitting the nail on the head that people are,
Speaker 10: you know, selling a bit and asking questions later. But
Speaker 10: obviously if the if the economy holds up, then you
Speaker 10: know they can re risk. You know, from where I
Speaker 10: sit today, this has an algo selling momentum driven.
Speaker 6: Feel to it.
Speaker 10: When you look at like the mag seven as an example,
Speaker 10: apples down the most there. There wasn't really any news
Speaker 10: flow on this, so this is really just the algos,
Speaker 10: you know, taking the moment some of this trade into
Speaker 10: small caps, the rotation, et cetera, and then we just
Speaker 10: have to see, you know, does this have legs as
Speaker 10: a results of the economy.
Speaker 3: Yeah, I'm looking at the VIX too, and we did
Speaker 3: go a little bit above twenty one today, but we
Speaker 3: closed just at twenty or just below twenty one. Is
Speaker 3: that significant, Eric?
Speaker 9: Yes?
Speaker 8: Yes, I mean that will to feed into what's going
Speaker 8: on in the equity markets. When you get these selling pressures,
Speaker 8: you often see the VIX bomp of over twenty. If
Speaker 8: it holds there, yeah, then it means that there's real
Speaker 8: sustained fear. But today was one of those days where
Speaker 8: you know, we had a pretty significant downdraft, so it
Speaker 8: jumping over twenty twenty isn't and not necessarily holding there
Speaker 8: isn't exactly you know, a fear gauge.
Speaker 4: Is this just a case though things just feeling jittery?
Speaker 3: Yes, And then it doesn't take much for people to
Speaker 3: be like, Okay, maybe logically or fundamentally this doesn't make sense, but.
Speaker 8: I'm out that well, that's it. So if you look
Speaker 8: look at what's going on with the real estate firms
Speaker 8: or whatever that we're hit by THEAI selling, yeah, this
Speaker 8: is actually going to help them, like it's not necessarily
Speaker 8: going to help or financial services, you know, the wealth managers, right,
Speaker 8: Schwab is going to do well with this. Employees that
Speaker 8: Schwab may not do well with this because you're going
Speaker 8: to lose some workers. You're going and your salaries are
Speaker 8: going to go down, but the stock should do well.
Speaker 8: So exactly what the logic is behind this is hard
Speaker 8: to say. It's really, you know, to paraphrase ad, it's
Speaker 8: really you know, sell now and sort of wait. And
Speaker 8: where you start seeing it pop up like in places
Speaker 8: like in small caps, that's where you start thinking This
Speaker 8: doesn't exactly make sense because they would normally be risk
Speaker 8: off too.
Speaker 2: So if we move past the sort of day to
Speaker 2: day market swings here and look at the fundamentals of
Speaker 2: the US economy, we're getting more data. We got more
Speaker 2: data this week. We got a jobless report for last
Speaker 2: month on Wednesday with was weird. We got initial job
Speaker 2: list claims. Today you are getting a post on the
Speaker 2: lifelog that together the shows a weakening employment picture. What
Speaker 2: are you looking at?
Speaker 10: Yeah, So what I'm thinking is is that generally we
Speaker 10: have a decent employment market, but it's weakening. And the
Speaker 10: number that we saw on Wednesday wasn't reflective of the
Speaker 10: weakness that we're seeing. Number one, we saw a lot
Speaker 10: of layoff announcements. Number two, we also saw weather that
Speaker 10: should be negative for jobs, at least in a temporary sense.
Speaker 10: And then we've seen two consecutive upticks and initial claims,
Speaker 10: and we saw continuing claims tick up this past week
Speaker 10: as well. All of that speaks to when you look
Speaker 10: at the BLS data, that these are things that weren't
Speaker 10: in the actual numbers for January. In fact, on the
Speaker 10: BLS website they say specifically, none of the weather was
Speaker 10: in the you know, in our collection period. So the
Speaker 10: February number is going to be worse, and so we're
Speaker 10: seeing a little bit that will help in terms of
Speaker 10: the jitters, unfortunately, help continue those jitters going forward. The
Speaker 10: only positive I could say is that we're looking at
Speaker 10: CPI potentially coming down that's going to be released tomorrow.
Speaker 10: Two point five percent is demonstrably below three percent. That
Speaker 10: would be a good number that would help perhaps stop
Speaker 10: some of the jitters that we're seeing now.
Speaker 3: To be fair, and everybody always reminds us, you know,
Speaker 3: you got to look longer term. S and P was
Speaker 3: up sixteen percent last year, twenty three percent twenty twenty four,
Speaker 3: and up twenty four percent in twenty twenty three. Eric,
Speaker 3: We've talked about these three consecutive years, a very strong gains.
Speaker 3: I mean, at some point the market.
Speaker 4: Takes a little bit of breather.
Speaker 3: We've seen this where we'll get a ten percent correction
Speaker 3: and then it moves to the upside again.
Speaker 8: Well that's I mean, in the longer term scheme of things,
Speaker 8: the market is okay. The concern would be that sentiment
Speaker 8: has been pretty lousy since October really, so you're starting
Speaker 8: to see real kind of pain come through when you're
Speaker 8: talking about employment and you're seeing like what's going on
Speaker 8: with crypto, You're what the concern there is is that
Speaker 8: people aren't spending, people aren't investing, Individuals are stepping aside,
Speaker 8: and that can bleed into a lot of different industries.
Speaker 8: So the concern, you know, the idea that like you
Speaker 8: would have a sluggish year isn't necessarily the problem. It's
Speaker 8: the reasons behind it. And if we're not getting growth,
Speaker 8: if jobs aren't there, then this can be more.
Speaker 3: Sustained and economic growth.
Speaker 8: Yeah, we do have economic growth right now, but the
Speaker 8: question is what it's measuring, because it's that ky you know.
Speaker 8: So if we're having economic growth but investors but individuals
Speaker 8: aren't spending, then the question is how much can like
Speaker 8: the top twenty percent keep the market of keep the
Speaker 8: economy afloat two?
Speaker 2: Eric's point ed Airbnb shares hire right now. They rose
Speaker 2: four and a half percent and extended trading. The company's
Speaker 2: first quarter revenue forecast exceeded the average annal assessment. Is
Speaker 2: this that top twenty percent that Eric's talking about right here?
Speaker 10: Yeah, that case shaped economy is really creating a lot
Speaker 10: of uncertainty about what's happening. And I would also reiterate
Speaker 10: what Eric said about the jitters beginning in October. I
Speaker 10: thought it was interesting, you know, the vics actually bottomed
Speaker 10: in the day before Christmas, and so you could the
Speaker 10: jitters that we had during the shutdown were sort of
Speaker 10: overtaken by year in a buying into the year end,
Speaker 10: and then people took a week off between Christmas and
Speaker 10: New Year's and then suddenly people came in with fresh eyes,
Speaker 10: and those same sort of concerns that Eric was talking
Speaker 10: about that people had during the shutdown October and November
Speaker 10: have now come back. And then the question is can
Speaker 10: the top twenty percent actually pull this market along. So
Speaker 10: far they have, but that retail sales report that we had,
Speaker 10: you know, causing the question whether that's actually the case.
Speaker 3: I want to go back to some of the earnings
Speaker 3: after the close. Applied materials out and we're seeing the
Speaker 3: stock rally in a big way in the aftermarket, largest
Speaker 3: US supplier of chip making equipment giving an upbeat sales
Speaker 3: forecast for the current quarter, signaling that demand for artificial
Speaker 3: intelligence and memorysetment conductors are fueling purchases. So ed there
Speaker 3: is this kind of yin and yang, like we're watching consumers,
Speaker 3: we're watching the economy. There's also that AI trade, which
Speaker 3: in some ways there's the AI scare that is freaking
Speaker 3: out some sectors, and then there's that spend in AI.
Speaker 3: You know, when you've got something like this, it just
Speaker 3: to some extent points to some cross currents in the market. Right,
Speaker 3: there's some good, there's some bad.
Speaker 10: Yeah, And what I would say is is that if
Speaker 10: you look at it from a very very macro perspective,
Speaker 10: we have six percent deficits, we have tax cuts coming,
Speaker 10: and we have massive AI spend. As we've seen the
Speaker 10: likes of Alphabet, you know, the likes of Amazon say
Speaker 10: they're going to continue to spend more. They're taking on
Speaker 10: debt to spend more. Those are tailwinds that are very
Speaker 10: difficult for you know, barring some sort of macro shop
Speaker 10: to overcome. So really, the economy might be slowing, but
Speaker 10: it's not you know, slowing into anything that should have
Speaker 10: a sustained negative impact in the near term.
Speaker 3: A Matt shares up more than nine percent. Eric wreen
Speaker 3: Or Bloomberg new Senior Editor, Equities Americas and Bloomberg new
Speaker 3: Senior editor and author of the Everything Risk newsletter, Ed Harrison,
Speaker 3: I thank you.
Speaker 4: Stay with us. More from Bloomberg Business Week Daily coming
Speaker 4: up after this.
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Speaker 2: I said, we were going all in on the economy
Speaker 2: this hour. We kind of do that every day, but
Speaker 2: you know, that's kind of what we do, but we're
Speaker 2: doing it from a few different angles on that. I
Speaker 2: want to bring in Stuart Pauli's US and Canada economists
Speaker 2: for Bloomberg Economics. He joins us here in the Bloomberg
Speaker 2: Interactive Brokers studio. We want to broaden this out to
Speaker 2: the entire world. The economic effect of potential conflicts. Bloomberg
Speaker 2: Economics team is out with a special report about global
Speaker 2: risk is called Flashpoint Counting the cost of potential conflicts
Speaker 2: US China war over Taiwan, the cost of escalation on
Speaker 2: the Korean Peninsula, war between Russia and Europe, kind of
Speaker 2: modeling this stuff out. Venezuela is in there as well.
Speaker 2: In addition to others. We should know the team does
Speaker 2: right that the human cost of conflict is tragically high.
Speaker 2: We recognize that each time we talk about a potential
Speaker 2: conflict or a conflict, but the economic cost is also rising.
Speaker 2: If we sit here in the United States, you're in
Speaker 2: charge of US and Canada economics for Bloomberg economics. If
Speaker 2: you look around the world, where do you see the
Speaker 2: biggest risk?
Speaker 12: Well, we can think about risk on two different dimensions.
Speaker 12: We have the probability of risk and then the consequence
Speaker 12: if something were to become let's say a hot war. Right,
Speaker 12: So if we were to just think strictly about the
Speaker 12: consequences of global conflict, really, any conflict that takes place
Speaker 12: in the South China, see an attempt to control the
Speaker 12: Taiwan straight on, attempt to control territorial Taiwan would be
Speaker 12: the most consequential for the global economy. If we think
Speaker 12: about semiconductor production, about sixty percent of global semiconductor production
Speaker 12: takes place in Taiwan. These are the primary inputs to
Speaker 12: about one fifth of These are the primary inputs to
Speaker 12: about five percent excuse me of global GDP. Right, So
Speaker 12: we're thinking about just how much GDP can get dented
Speaker 12: by shutting down exports of semiconductors from Taiwan. And we're
Speaker 12: really talking about five point three percentage points of global GDP,
Speaker 12: trillions of dollars of economic activity. And if we think
Speaker 12: about the amount of cargo that just flows through the
Speaker 12: Taiwan straits, we're talking about a fifth of global shipments.
Speaker 12: Another two and a half trillion dollars of goods that
Speaker 12: are shipped through there every year. So again we're talking
Speaker 12: about trillions of dollars of economic consequential activity that's flowing
Speaker 12: through the region. And so of course it's going to
Speaker 12: matter most if tensions heat up between the two largest
Speaker 12: geopolitical rivals in the world.
Speaker 3: I want to just if I can highlight that you say,
Speaker 3: you guys say the damage would be global. Taiwan's economy
Speaker 3: would be decimated, and that you folks estimate China's GDP
Speaker 3: would fall by eleven percent, the US is by six
Speaker 3: point six percent in the first year.
Speaker 4: In addition to the main actors, the EU.
Speaker 3: European Union could have GDP drop by almost eleven percent,
Speaker 3: India by eight percent, the UK buy more than six percent,
Speaker 3: and then closer to the fighting, something like South Korea
Speaker 3: could shave twenty three percent off GDP in Japan fourteen
Speaker 3: point seven percent. I have to believe we talked about,
Speaker 3: you know, during the build up of the nuclear arms race,
Speaker 3: there was a nuclear deterrence. There has to be to
Speaker 3: some extent in economic deterrence, that understanding that doing things
Speaker 3: like this, it's not like you hurt one person, maybe
Speaker 3: your original or initial foe. Everybody's going to feel it.
Speaker 12: That's very true, and it's important that you bring it
Speaker 12: up because an outright hot war is something that's incredibly
Speaker 12: improbable because of the economic consequence. We're talking about denting
Speaker 12: global GDP growth by about ten percent.
Speaker 4: Nobody wins there.
Speaker 12: Nobody wins there. So what happens along the gradient of outcomes.
Speaker 12: Let's dial it back and say, okay, what if it's
Speaker 12: not a hot war. What if China just imposes a
Speaker 12: blockade on Taiwan and asserts its authority through the Taiwan
Speaker 12: straight preventing cargo from flowing through. That's still dense global
Speaker 12: growth by about five percent. Right, So it's the sort
Speaker 12: of thing where now it becomes a little bit more
Speaker 12: economically viable. The deterrence, now we're not talking about a
Speaker 12: sort of nuclear type deterrence, a mutually assured economic destruction
Speaker 12: like we were contemplating during the Cold War. Instead, we're
Speaker 12: talking about more like regional skirmishes or something that's more
Speaker 12: akin to a proxy war during the Cold War. Five
Speaker 12: point three percent percentage points of global GDP is nothing
Speaker 12: to sneeze at, but it's a little bit more of
Speaker 12: a realistic expectation, and so it does put something alike
Speaker 12: China asserting its authority in the South China. See, it
Speaker 12: makes it a little bit more viable.
Speaker 2: Hey, we want to kind of go around the world
Speaker 2: in the time that we have left with you, and
Speaker 2: you're going to hang out with us for a little
Speaker 2: bit until the end of trading here. So we're looking
Speaker 2: forward to that. But Stuart, the Middle East right now
Speaker 2: and the build up of resources from the United States
Speaker 2: in the Middle East. We talked about some of those
Speaker 2: headlines earlier this week. There's a section in here called
Speaker 2: the one hundred and eight dollars oil War. How the
Speaker 2: Middle East could crash the world economy. How does that happen?
Speaker 12: Well, it's so interesting because we think about North American
Speaker 12: energy independence and we think that, okay, well, maybe the
Speaker 12: Middle East doesn't play as much of a role as
Speaker 12: it did in global economics let's say two decades ago.
Speaker 12: But if we think about energy consumption and where the
Speaker 12: energy is produced that ends up getting consumed globally, the
Speaker 12: Middle East is still a major actor. Still about fifteen
Speaker 12: percent of global energy production is initially sourced from the
Speaker 12: Middle East. That's the same as what we saw in
Speaker 12: the early seventies, right, So the Middle East still the
Speaker 12: key player globally when it comes to energy production and
Speaker 12: energy consumption.
Speaker 2: Not the US US.
Speaker 12: Matters a lot, and it and certainly for our standard
Speaker 12: of living, which was a phrase that mattered a lot
Speaker 12: during the Bush Hour. For our standard of living here
Speaker 12: in the United States, the Middle East is a little
Speaker 12: bit less relevant. But globally, the Middle East is as
Speaker 12: relevant today as it was even in the early nineteen seventies.
Speaker 12: If we think about where conflict can arise, the places
Speaker 12: that are in control of oil are the places that
Speaker 12: matter most. So the conflict in Israel and Gaza didn't
Speaker 12: matter as much as let's say, the US sending an
Speaker 12: aircraft carrier toward the Strait of Horror moves for a
Speaker 12: potential conflict with Iran.
Speaker 2: Could what's happening in Venezuela change this equation. We just
Speaker 2: heard from Chris Wright, the Energy Secretary. He was in
Speaker 2: he's in Venezuela with an Marie hort Dern. They're talking
Speaker 2: about the opportunity for US oil companies there. He said
Speaker 2: he will not the US will not guarantee security. But
Speaker 2: it seems like this the administration in Venezuela is receptive
Speaker 2: to US company's increasing output there. Does that change the equation?
Speaker 12: Well, so let's just put orders of magnitude on everything, okay, right,
Speaker 12: So middle are big reserves, They are pretty big reserves.
Speaker 12: But only about ramping up Venezuela production to where it was,
Speaker 12: let's say before the Chaves era, would just add about
Speaker 12: one and a half percentage points to global oil supply. Yeah, right,
Speaker 12: So that's just one and a half percentage points we're
Speaker 12: talking about fifteen percent. Coming from the.
Speaker 3: Middle East doesn't move the needle in the same way.
Speaker 12: Right, So it doesn't move the needle in the same
Speaker 12: way when we think though about regional trade alliances. It
Speaker 12: again creates a sort of hemispheric independence from the Middle East. Already,
Speaker 12: the Western hemisphere is relatively insulated from the goings on
Speaker 12: in the Middle East, but bringing that additional supply online
Speaker 12: from Venezuela would do good in the Western Hemisphere.
Speaker 3: All right, Stud's going to stay with us because we
Speaker 3: want tout broaden out our conversation even more and ad
Speaker 3: a really interesting voice to it as well.
Speaker 2: So I want to bring in Steve Moore. He's the
Speaker 2: co founder of the nonprofit Unleashed Prosperity. He's a former
Speaker 2: economic and senior at policy advisor to President Trump in
Speaker 2: twenty sixteen and twenty twenty four. He served as Chief
Speaker 2: Economists and Distinguished Visiting Fellow at the Heritage Foundation for
Speaker 2: twelve years. He's the author of a couple books, including
Speaker 2: Trumpanomics Inside the America First Planned to Revive Our Economy
Speaker 2: in twenty eighteen and more recently twenty twenty four, The
Speaker 2: Trump Economic Miracle. And then in twenty nineteen, President Trump
Speaker 2: selected Steve Moore for the Federal Reserve Board of Governor
Speaker 2: more ultimately withdrew from that.
Speaker 3: All right. He is also the author of Trumpnomics, Inside
Speaker 3: the America, First Plan to Revive Our Economy and The
Speaker 3: Trump Economic Miracle. I think you said that, but we
Speaker 3: always say it again. So there's a lot going on
Speaker 3: Steve joining us from Washington, d C. Steve, it's good
Speaker 3: to have you here. Bloomberg Economics US economist Canada economist
Speaker 3: Stuart Paul is also with us. You know, we're talking
Speaker 3: about a lot of issues, and it does feel like
Speaker 3: when we think about what's going on in the world,
Speaker 3: geopolitics largely at play in a big way. We're trying
Speaker 3: to assess the different trade deals, the different alliances. Ste
Speaker 3: just laying out if we had problems, certainly in Taiwan
Speaker 3: or in the area, in terms of what that could be,
Speaker 3: it could be a ten trillion dollar global economic hit.
Speaker 3: These are big important things. The world though, is changing.
Speaker 3: What do you assess when it comes to some of
Speaker 3: these global alliances, trade or other and how that could
Speaker 3: impact the global economy and the US economy? That for me, Yes,
Speaker 3: that's for you.
Speaker 6: So uh.
Speaker 13: I mean, let's start with the fact that, you know,
Speaker 13: we have a very very strong economy right now in
Speaker 13: the US. It's it's all the all the economic make
Speaker 13: indicators are pointing north. We have declining inflation, we got
Speaker 13: really good job report yesterday. We are seeing, you know,
Speaker 13: a booming stock market over the last a year or so.
Speaker 13: We're seeing real wage increases for workers. So it's about
Speaker 13: as good a picture as you can get right now.
Speaker 13: And you know Trump was right when he went to
Speaker 13: Davos and said, if you want to grow, because we're
Speaker 13: growing much faster than virtually any of our competitor.
Speaker 6: Countries, do what we're doing.
Speaker 13: Promote lower tax rates, promote energy production in your home country, deregulate,
Speaker 13: and don't forget that's a huge, huge burst to the
Speaker 13: economy in terms of increasing the productivity of our of
Speaker 13: our businesses. So I feel very confident about the economy
Speaker 13: in twenty twenty six. I think that I don't think
Speaker 13: we're going to see the fifteen percent growth that Donald
Speaker 13: Trump said we could see, but I think we could
Speaker 13: easily grow at three, four or five percent, and those
Speaker 13: are very positive numbers.
Speaker 12: One of the things that I'm thinking about, mister Moore,
Speaker 12: is that there's sort of a reshuffling of a lot
Speaker 12: of a reshuffling of the global commercial order. There's a
Speaker 12: reshuffling of global alliances. There's a reshuffling of military alliances.
Speaker 12: There's a reconsideration of tax policy, there's a reconsideration of
Speaker 12: regulatory policy. Big structural changes that have a lot of
Speaker 12: growing pains.
Speaker 6: Yes.
Speaker 12: On the other hand, you have the FED, you have
Speaker 12: the President calling for interest rate cuts perhaps to smooth
Speaker 12: over some of those growing pains. But all the data
Speaker 12: that we're seeing so far that you're alluding to is
Speaker 12: pointing to a relatively resilient US economy. Sure, we didn't
Speaker 12: see a ton of job growth last year, but it
Speaker 12: looks like kicking off twenty twenty six really strong. Where
Speaker 12: do you think that these two different tensions, these two
Speaker 12: different things end up shaking out. On the one hand,
Speaker 12: we have really resilient economic activity right now, but there's
Speaker 12: a lot of risk in the reshuffling of these major
Speaker 12: structural factors.
Speaker 13: Well, there's no question you're exactly right that Trump does
Speaker 13: want to It has reshuffled the deck when it comes
Speaker 13: to bother foreign policy and our trading policy. I'm much
Speaker 13: more of a conventional Ronald Reagan free trader, and so
Speaker 13: President Trump knows I don't always agree with him on
Speaker 13: his trade policies. There's no question that when we had
Speaker 13: the Liberation Day that that really royal markets and did
Speaker 13: cause a temporary reduction in economic output. On the other hand,
Speaker 13: the one thing that I try to let people understand
Speaker 13: that don't necessarily understand how Trump operates. Is the guy
Speaker 13: is a deal maker. That's an obvious point, and he
Speaker 13: has the way I like to put it is, Look,
Speaker 13: the global economy is pretty simple to understand. The United
Speaker 13: States is the hub of the world economy and every
Speaker 13: other country as a spoke, and that gives the United
Speaker 13: States an enormous economic advantage, just as we are so
Speaker 13: majorly benefited by the fact that we have the world reserve.
Speaker 6: Currency and the dollar.
Speaker 13: And so Trump is for the first president in my
Speaker 13: lifetime that is sort of using flexing America's economic muscle
Speaker 13: to force other countries to do things that are in
Speaker 13: many cases of their own interests, but also in America's
Speaker 13: interests as well. And so what I'm saying is that
Speaker 13: I don't I'm not a big fan of the trade
Speaker 13: tariffs that Trump is put into effect, but some of
Speaker 13: these trade deals that he has delivered, But we don't
Speaker 13: know for sure yet because it's still early in the game,
Speaker 13: but it looks like if Trump is even nearly right
Speaker 13: on this, that they will bring a lot of capital
Speaker 13: investment in the United States, will see lower terriffts applied
Speaker 13: on American manufact during and agricultural products and that will
Speaker 13: only make America strong.
Speaker 2: You mentioned the president is a deal maker. One of
Speaker 2: the deals that he made in his first term was
Speaker 2: the US MCA Trade Pact. Our team reporting that the
Speaker 2: President is privately a musing about exiting that trade pact,
Speaker 2: according to people familiar with the matter. Earlier today, we
Speaker 2: heard from White House trade advisor peat In Navarro. He
Speaker 2: said the North American Trade Pact has significant flaws. He
Speaker 2: expressed worries about China shipping goods through Mexico and Canada
Speaker 2: should the US get out of the US MCA.
Speaker 6: Now, I'm a big fan of that.
Speaker 13: In fact, I mean I was a big fan of
Speaker 13: NAFTA when it was first talked about on O'ronald Reagan,
Speaker 13: then then signed into law by Bill Clinton, a Democrat.
Speaker 13: It's been enormously advantaged to the whole North American continent.
Speaker 13: It's critically important that we trade with Mexico because for
Speaker 13: many reasons, we want to make sure that Mexico remains
Speaker 13: politically stable, and we want to see higher living standards
Speaker 13: in Mexico and Canada. Is a lot of people don't
Speaker 13: realize by the way that Canada Mexico are our biggest
Speaker 13: trading partners, not China, not Europe, but Canada, Mexico, Nory.
Speaker 2: The Bloomberg audience know, Steve.
Speaker 6: That's for sure.
Speaker 13: So the well I was even surprised, frankly, when I
Speaker 13: was looking at these statistics. I thought our trade with
Speaker 13: China might might have been larger than Canada Mexico, but
Speaker 13: it's not. And so look, you're talking to somebody who
Speaker 13: is very much in favor of continuing free trade flows
Speaker 13: between our three countries. Now it is I think Trump
Speaker 13: has a legitimate complaint that if we have a free
Speaker 13: trade deal with Canada Mexico, and then Canada Mexico are
Speaker 13: bringing in goods from China, and then the China is
Speaker 13: using them as a port of entry to bring in
Speaker 13: things to the United States, that's a problem.
Speaker 3: But are we doing that? I mean, that's I guess
Speaker 3: we should know, you know, you know, we have to
Speaker 3: be careful about what is said right to understand exaust
Speaker 3: because I think Mexico and Canada understand the importance of
Speaker 3: an ally the United States, and certainly when it comes
Speaker 3: comes to China. What do you think, Steve, is the
Speaker 3: damage though that is being done to the United States
Speaker 3: on a global level because alliances, the EUS moving on,
Speaker 3: China's moving on, and I do wonder that those aren't
Speaker 3: quick fixes necessarily. Are we being kind of hurt longer
Speaker 3: term by some of these you know, former allies or
Speaker 3: allies still in name, but also they're looking elsewhere because
Speaker 3: they don't love the volatility and instability of this White House.
Speaker 6: Yeah, that's a great question.
Speaker 13: And the last thing we want to do is send
Speaker 13: these other nations running into the arms of China. I
Speaker 13: don't quite get the logic of that, by the way,
Speaker 13: on the part of the Europeans who've really been saying, well,
Speaker 13: maybe we'll try it with China. I mean, my goodness,
Speaker 13: se there's the same countries for the last fifteen years
Speaker 13: have talked about, you know, climate change being the most
Speaker 13: important issue on the planet, and here they are running
Speaker 13: to the country that's the biggest polluter in the world.
Speaker 13: So that's a little hypocritical. But look, we want to
Speaker 13: trade with Europe, we want to trade with Canada.
Speaker 3: I think it's do we need to do We need
Speaker 3: to to keep the US economy you talked about earlier. Yeah,
Speaker 3: that this economy is doing well, don't we need.
Speaker 6: Yes, trade is critically important here.
Speaker 13: I believe that, you know, in fact, the one thing
Speaker 13: I would say that I disagree with Trump about him
Speaker 13: he thinks that the free trade regime over the last
Speaker 13: fifty years has been negative for the US. And my
Speaker 13: own opinion is I don't think there's any country in
Speaker 13: the world that has benefited more from free trade than
Speaker 13: the United States. I mean, my goodness, when I first
Speaker 13: came to Washington in nineteen eighty two, eighty three, the
Speaker 13: Dow Jones was at a thousand. Now we've got the
Speaker 13: Dow Jones at fifty thousand. I mean, we have so
Speaker 13: dominated the world economy in terms of the competitiveness of
Speaker 13: our businesses. No other country, not even China, comes close.
Speaker 13: I mean, our our net worth as a country in
Speaker 13: terms of our businesses are almost as large as the
Speaker 13: rest of the world comes about. Yeah, and that's largely
Speaker 13: because not not just just but that means that trade
Speaker 13: has actually benefit of the United States, not hurt our workers.
Speaker 12: As an economic competitor. I'm sure the US has been
Speaker 12: a tour to for us. If you ask somebody like JD.
Speaker 12: Vance whether it's been worth the toll that it's taken,
Speaker 12: Let's say, on the rust Belt. It seems like he's
Speaker 12: a little bit unsure. And Scott Best and of course
Speaker 12: famously has the line that the American dream is not
Speaker 12: having cheap imports and cheap labor flooding the country. Instead,
Speaker 12: it's about, you know, having having a job and building
Speaker 12: a future. We were just talking about housing affordability. Having
Speaker 12: a stable job and being able to afford a home
Speaker 12: one of the things though, that I think about in
Speaker 12: terms of free trade. So at a minimum, it seems
Speaker 12: like there's at least a questioning in the White House
Speaker 12: whether free trade has truly benefited us. What I'd like
Speaker 12: to hear your opinion on is whether free trade for
Speaker 12: manufactured goods is different, let's say, than free trade for
Speaker 12: input inputs to production. Like we definitely need graphite, we
Speaker 12: definitely need nickelsthium, copper, things that we don't necessarily have
Speaker 12: under our feet. Is that different to some extent than
Speaker 12: trade for cheap manufactured goods that the White House seems
Speaker 12: to be so upset about.
Speaker 13: Well, let's put a little bit political angle on this,
Speaker 13: because look, as I said before, I think this is
Speaker 13: a strong economy, but a lot of the American people
Speaker 13: don't agree with me, Right now if you look at
Speaker 13: the polling, you know, middle class Americans have a lot
Speaker 13: of anxiety right there. Now, some of it is many
Speaker 13: people just don't like Trump, but some of it is,
Speaker 13: you know, people aren't feeling the love, so to speak,
Speaker 13: and they're not feeling the positive effects of the kind.
Speaker 6: Of statistics that I mentioned. And so.
Speaker 13: That's a political problem because we do objectively see a
Speaker 13: lot of things moving in the right direction. But you're right,
Speaker 13: you go to these, you know, towns in the Midwest.
Speaker 13: I grew up in the Midwest, and they're not feeling
Speaker 13: like it's a sort of shared prosperity.
Speaker 3: Well is it because they're not? For Steve, is it
Speaker 3: not that they're not feeling it. It's the reality of it.
Speaker 3: It isn't a shared prosperity.
Speaker 6: Well maybe not.
Speaker 13: I mean, although even the statistics show that, you know,
Speaker 13: the incomes for even the lowest income groups have been rising.
Speaker 13: And you can tell I'm kind of flummings by this
Speaker 13: because it does look from the objective evidence like things
Speaker 13: are getting better. But there are there are you know,
Speaker 13: certainly patches of the country that have not felt the
Speaker 13: kind of prosperity that other parts of the country, and
Speaker 13: So that's why it applies to manufacturing jobs, because a
Speaker 13: lot of Americans believe, you know, we're losing a lot
Speaker 13: of those old, you know, nineteen seventies, eighties, nineties jobs
Speaker 13: that that gave people a middle class living.
Speaker 6: Now the prob if I may, I mean, what's.
Speaker 13: Sort of interesting about this subject, though, is that many
Speaker 13: of those sort of manufacturing jobs won't even exist in
Speaker 13: twenty years. I mean, we are moving into a new
Speaker 13: era of artificial intelligence or robotics. It's you know that
Speaker 13: just are changing so dramatically and so rapidly, the way
Speaker 13: we work, the way our businesses worked, the way we play.
Speaker 13: I mean, how many trucking jobs will we have in
Speaker 13: twenty years?
Speaker 6: Not many?
Speaker 2: Yeah, maybe, you know, if the tech there and if
Speaker 2: the legislation gets there. But I kind of see that happening.
Speaker 2: We're speaking with Steve Moore. He's the co founder of
Speaker 2: in Leashed Prosperity's a former Trump economic advisor. He joins
Speaker 2: us this afternoon from Washington, DC. Also joining us to
Speaker 2: Stuart paul Us and Canada economists for Bloomberg Economics. Steve,
Speaker 2: the president is trying to bolster the shrinking US coal
Speaker 2: power industry he'll use one hundred and seventy five million
Speaker 2: dollars in government funds, tax payer money to upgrade six
Speaker 2: plants and have the Defense Department by power from others.
Speaker 2: We had an interesting conversation with our colleague Will Wade,
Speaker 2: who covers energy here and power at Bloomberg News, and
Speaker 2: we asked him why the US moved away from cole
Speaker 2: and I was expecting an answer from him to be honest,
Speaker 2: that it was about, you know, environmental reasons. But he
Speaker 2: had one word. He said, money. It's cheaper to use
Speaker 2: natural gas and have natural gas fired power plants. Is
Speaker 2: this a bad move by the Trump administration because it's
Speaker 2: it kind of goes against the free market forces. Well,
Speaker 2: that's a tough question too, because it's also intertwined into politics.
Speaker 2: You know, the the coal is still a fairly important
Speaker 2: source of our energy, and we get much more energy
Speaker 2: from coal than we do from green energy, for example,
Speaker 2: not that muchmore. We get about sixteen percent from coal,
Speaker 2: and then if you take all renewables together, you get
Speaker 2: twenty percent. I'm not sure about those stats, but but
Speaker 2: the point is that coal is still it's basically, you know,
Speaker 2: been an important part of our energy mix.
Speaker 6: I happen to believe that we should use all.
Speaker 13: Forms of our power that are competitive, and coal was
Speaker 13: made uncompetitive in no small part because of the regulations.
Speaker 13: But we also all want clean air as well. But
Speaker 13: I look, I'm not going to count out coal. I
Speaker 13: don't want government subsidies to call I certainly. I think
Speaker 13: I'm glad that Trump is getting rid of the Remember
Speaker 13: those green the green movement grew only because they were
Speaker 13: lapping up, you know, tens and tens of billions of
Speaker 13: dollars from tax payers. They just weren't competitive. So look,
Speaker 13: my view is very simple on the future of energy.
Speaker 13: It's the two wins. It's natural gas and nuclear power,
Speaker 13: and ultimately those are going to be I think the
Speaker 13: fuels of the future. And that means that in the
Speaker 13: good news about that is both of those are very
Speaker 13: clean burning fuels.
Speaker 12: Is it possible to have your nukes without subjecties?
Speaker 6: Yeah, that's what without news? That is a good question.
Speaker 6: I don't know the answer to that. I mean, you
Speaker 6: may know better than I do.
Speaker 13: But but because nuclear power has been subsidized. But I
Speaker 13: think I'm going to go with with the optimistic forecast
Speaker 13: that we will we will see nuclear power becoming more
Speaker 13: efficient and more productive and competitive without any government subsidies.
Speaker 3: Hey, least times to eve you were with us. This
Speaker 3: was at the end of the year, before we knew
Speaker 3: the President would pick Kevin Warsh as his nomination to
Speaker 3: the Federal Reserve. Is this a good choice in your view?
Speaker 3: Does this ensure that there will be an independent FED?
Speaker 3: And I'm assuming you think an independent FED is important?
Speaker 6: Yeah.
Speaker 13: Look, I told the President early on in this process
Speaker 13: that I thought that the three people I thought would
Speaker 13: be the best for that position, where Kevin has Kevin
Speaker 13: Worsh or Outhro Laffer, And so I'm glad he picked
Speaker 13: somebody off of that list. I am incredibly excited about
Speaker 13: Kevin Worsh. He will be independent, and he's a smart guy.
Speaker 13: He understands monetary policy. He understands the importance of keeping
Speaker 13: The most important thing that FED needs to do right now,
Speaker 13: in my humble opinion, is to keep the dollar strong
Speaker 13: and stable. And by the way, Trump isn't always in
Speaker 13: favor of a strong dollar. Sometimes he favors a weaker dollar.
Speaker 13: I disagree with them on that. I think we clearly
Speaker 13: benefit from having a st under dollar. And by the way,
Speaker 13: if you want to afford. You want to have things
Speaker 13: more affordable, you want the dollar to be stronger and
Speaker 13: not weaker. So I think he's got all the right
Speaker 13: economic instincts and I think he will he will once
Speaker 13: the Democrats on the you know, because the big committee
Speaker 13: hearings will be coming up for his Senate approval, and
Speaker 13: I think he will do very well with that.
Speaker 6: I think he will be confirmed and.
Speaker 3: It'll be an independent fed just quickly.
Speaker 6: I hope. So I think it will look.
Speaker 13: I think he's not a political guy for the most part,
Speaker 13: and so I mean he's a Republican. But I've known
Speaker 13: Kevin worsh for many years and he will and he's
Speaker 13: a real professional, and I can't think of any any
Speaker 13: better really, truly, I think he was about the best
Speaker 13: choice that we could have.
Speaker 2: All right.
Speaker 3: Stephen Moore, thank you so much, co founder on Leash Prosperity,
Speaker 3: former Trump economic advisor joining us from the nation's capital.
Speaker 3: Stutpaul still here in studio, part of our Bloomberg Economics team.
Speaker 3: We're counting down to the clothes. Got about a minute.
Speaker 3: Hear your thoughts on that.
Speaker 12: Well, So I think that Kevin Warsh actually runs the
Speaker 12: risk of being a little bit too political. I think
Speaker 12: that when we saw an additional half a cut or
Speaker 12: so priced in upon the announcement that he'd be the nominee,
Speaker 12: I think that that was markets reconciling this fact that
Speaker 12: there's going to be a little bit more of a
Speaker 12: political charge to monetary policy if we were to see
Speaker 12: somebody like Kevin Walsh. But the Senate Banking Committee members
Speaker 12: know this to be true. That's why Senator Tom Tillis
Speaker 12: is going to prevent that nomination from going forth until
Speaker 12: we see the DOJ probe into the FED stopped, and
Speaker 12: we'll see just how much President Trump is devoted to
Speaker 12: Kevin Walsh as a nominee, because he would have to
Speaker 12: direct the dj to stop the probe into the FED,
Speaker 12: something that it doesn't sound like he's been willing to
Speaker 12: do to this point.
Speaker 2: Yeah, we'll see what Tom Tillis and the Senate Finance
Speaker 2: or Senate Banking Committee rather ends up doing. I do
Speaker 2: want to point out I'm looking at the US Energy
Speaker 2: Information Administration data for twenty twenty three. It's the most
Speaker 2: recent data that's available in terms of total electricity generation
Speaker 2: here in the US. Because we just had this debate
Speaker 2: with Steve Moore, sixty percent comes from fossil fuels, sixteen
Speaker 2: point two camp percent came from coal, and then renewables
Speaker 2: accounted for twenty one point four percent of those. Of
Speaker 2: that twenty one point four percent total generation, more than
Speaker 2: ten percent came from wind power. Back then hydropower was
Speaker 2: at five point seven and solar was at three point
Speaker 2: nine percent. Yes, so we do have we do do
Speaker 2: more renewables than cole.
Speaker 3: Yeah, at least does a film that move good stuff
Speaker 3: ster Paul, Thank you so much, Thank you really appreciate it.
Speaker 3: Here is us and Kenada e Commerce, with our Bloomberg
Speaker 3: Economics team joining us here in our Bloomberg Interactive Broker studio.
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