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Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple, CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube with eyes and ears on the Treasury Secretary Today, we're going to get back to the debate around Homeland Security funding. Two important conversations coming up. Nicole Malliotakis, the Republican from New York, is with us. We'll have to compare notes with Brendan Boyle, the Democrat from Pennsylvania as well. Eight days until another possible shutdown for Homeland Security. The issue of affordability, though, and the future of the Fed were on the table today before the Senate Banking Committee, where Scott Besant spent a second day of testimony. It was House side yesterday. Finn served today to banking, where Senator Elizabeth Warren was looking forward to spending some time with the secretary. She had already telegraphed her questioning and went, Mr. Bessen, on the issue of affordability, which the president has called a Democrat hoax. She asked him about that rhetoric. Listen, Senator, it may be a bit nuanced for you, but what President Trump is referring to is the media saying that the affordability crisis was generated by this administration when it was you and President Biden who destroyed the buying power of the American people. So there is an affordability crisis and you were front and center in it.
- [02:02]
D
So let me make sure that I understand.
- [02:04]
C
Donald Trump is not saying that affordability.
- [02:08]
D
What'S happening to families right now, is a hoax.
- [02:11]
B
He is saying that trying to lay the blame at this administration rather than the Biden Warren economy is a hoax. A hoax. He used the word on the microphone and said it would be up to the president if he wants his nominee for chair of the Federal Reserve to not lower interest rates to his liking. Imagine suing Kevin Warsh. We'll have much more to talk about here with Tyler Kendall, who's actually been in the room and on Capitol Hill for the balance of Testimony outside room 538 in the Dirksen Senate Office Building. Tyler, I know you've Been talking to members of the panel, including Thom Tillis, on their way in and out of questioning. How's it been going there?
- [02:56]
C
Yeah, hey, Joe, I mean, you mentioned there one of the highlight moments of this hearing was when Senator Elizabeth Warren, the ranking member on this Banking Committee, pressed the Treasury Secretary about whether or not a potential confirmed Fed chair, Kevin Warsh, would be protected from criminal prosecution if he didn't lower rates. And he said that that would be up to the President. Because really, the issue of the future Fed Chair is dominating the conversation here in front of the Senate Banking Committee because this is the committee considered to be the gatekeeper when it comes to that. Nomin. It has to go through Senate Banking first before it can advance to the full floor. And you mentioned Thom Tillis because he is that swing vote on the committee. Republicans have a 13 to 11 majority and he is threatening to block that nomination until the legal matter against Jerome Powell is ultimately resolved. I asked him if he had any update when it comes to his opposition here. He says that he doesn't. As of now, it still remains the same. He needs to see that legal matter to be resolved in order to get his vote. I also asked him if he's been in touch with the administration. He says that he hasn't when it comes to this very point. He also said that he's not sure when a potential confirmation hearing date would even be set. Because, Joe, that's going to be absolutely critical as we wait to see what this potential timeline could be, considering that Jerome Powell's term is up as chair in May of 2026. I will leave you with that. I spent a lot of time with some other Republicans on this committee. We're starting to see a theme emerge. While they haven't gone as far as Thom Tillis, a lot of them are saying that they do not think that Powell conducted anything criminal during his testimony to this committee last year. That is currently the subject of the Department of Justice's investig.
- [04:30]
B
It's an awfully active environment. You're in there in the corridor at Dirksen, Tyler, so we won't take too much of your time here. Do we have any sense of when a Kevin Wash confirmation hearing might be scheduled?
- [04:43]
C
Joe, at this point, I've asked a few different senators what that mechanism, what that procedure is going to look like, considering that we have this threat from Senator Thom Tillis hanging over it. And at this point we haven't gotten any confirmation on what that would look like. But we know that we're up against a timeline here, May of 2026. That is when Jerome Powell's is going to be up. And this is raising questions. We've done a few deep dives on the terminal looking into this about what would happen if a pick isn't yet confirmed. So a lot of different factors that are swirling here, though they all tell me, Joe, that they want to see this done quickly. They want to get the president's pick in. Because while Kevin Warsh does have pretty broad support among Republicans, it is rather questions about whether or not they support the investigation into Powell that is starting to become a fissure here for the nomination.
- [05:30]
B
Well, this has been a fascinating exercise today, Tyler. Thank you so much. Tyler Kendall with us from the Senate Banking Committee hearing room just down the street from our bureau here in Washington. Must be lunchtime. Everybody is everywhere in the corridor. But thank you, Tyler. As we turn our attention to the big debate in the building, which is not so much about Kevin Worsh right now, but funding for the Department of Homeland Security. We just went through all of this. The government was just reopened. And now, of course, we're looking at the potential for another partial shutdown just with respect to the this agency coming at the end of next week, eight days away. Which brings us to the list of demands that we have here. This is the letter from Chuck Schumer and Hakeem Jeffries that went to Republican leaders in the House and the Senate. We're going to walk through these demands, having heard from President Trump in his interview yesterday with NBC News talking about a softer approach, maybe a different posture in cities like Minneapolis when it comes to ice. Listen, I learned that maybe we can use a little bit of a softer touch. Look, I'm not happy with the two incidents. It's not, you know, it's both of them, not one or the other. He was not an angel and she was not an angel. You know, you look at some tapes from back, but still, I'm not happy with what happened there. Nobody could be happy. And ICE wasn't happy either. But I'm going to always be with our great people of law enforcement. Which brings us to the gentlelady from Staten Island. And I'll remind everybody that we have been talking with Congresswoman Nicole Maliatakis about the issue of immigration specific to border enforcement for years now. And now we're getting to this place in time where it's very interesting to hear from members of both sides of the aisle when it comes to enforcement in cities like Minneapolis. She's representing, of course, New York's 11th district congresswoman, it's great to have you back on Bloomberg. Good to see you.
- [07:22]
D
Good to be with you. Thank you.
- [07:23]
B
So let's go through a couple of these things. We'll run through these lists, this list of demands. How do you interpret the President's remarks? Because it hasn't necessarily signaled a change in policy. Is it a change in approach on any level for you?
- [07:36]
D
Look, I think the President, the administration recognizes that the tactics that ICE was using has not been popular. Have not been popular. Regardless of where you sit on the spectrum, I think people who wanted to see strong border enforcement, we achieved that, right? There's no more border crossings. People are not being released in the country. The border has been secured. Municipalities like mine who had migrant gangs and drug traffickers and criminals wreaking havoc, that has been cleaned up, those individuals are being deported. But I think when they see the aggression of ice, there is a concern there. And now ice, you know, ICE has really no choice but to go in the municipalities and find these perpetrators. Why? Because these local municipalities are not cooperating. New York City's not cooperating. Minneapolis is not cooperating. We used to be able to have ICE in Rikers island and they would take the criminals directly from there upon release from jail and go into federal custody. Bill de Blasio unfortunately changed that. This mayor wants to continue having that policy of no cooperation. And so ICE has no choice but to go into these cities and find these individuals, which makes it less safe for the officers, for the community, for the immigrants. But I should remind people, when they were in Minneapolis a couple weeks ago and this happened, they were arresting two murderers who had detained orders of removal going back to 2013 and 2015. A guy with 24 criminal convictions, a guy was convicted, convicted of sodomizing a 12 year old girl. So these are real criminals they're going after. And unfortunately, when they don't get cooperation, it makes it less safe for everyone.
- [09:17]
B
So what do you think of the contours of this debate? We've been spending time this week with a number of Republican senators, John Corden, Ted Cruz, Ted Budd, largely opposed to what Democrats are offering specifically when it comes to demasking. That seems to be a real flashpoint here. And I know that there are worries about officers being targeted, being doxed and so forth. But when you look at this list, this is a lot more lengthy and a lot more detailed than I think a lot of Republicans saw coming. We've been dealing with kind of four buckets, masks, body cams, warrants and Training. This goes a lot further when we talk about targeted enforcement. DHS cannot enter a private property without a judicial warrant. No masks, require id, protect sensitive locations, stop racial profiling, uphold use of force standards. Are these controversial or could they end up in a piece of legislation?
- [10:11]
D
I think a lot of them actually will hinder their ability to do their job, which is to actually get these individuals. Aside from the body cameras. Body cameras. I know a lot of Republicans are against them. I do support it and I support it. Why? Because it tells the whole story. And we have them in nypd and I was a skeptic of them in the very beginning when this became a law on the state level. And I was a state legislator at the time. But the unions even support them and the officers support them. And why? Because it tells the full story. And that's important, right? Because most of the time, if not all the time, these officers are actually following the book, they're following the training manual, how they're supposed to perform in certain situations. And if the camera tells the full story, it helps clear their names and can really put a lot to rest. And so I think that that is one where I would disagree with some of the folks in my party, but some of the. A judicial warrant is an issue simply because the time it's going to take to get a court order is going to be really hindering the operations. I mean, if you have a murderer that you're trying to get or any type of convicted criminal who should not be in this country, to have to go to court and get in a warrant and do all these things, I think could be a real complication and hinder the operations, the masks. If these municipalities cooperated, we wouldn't have these raids where the agitators are disrupting. And that could be avoided if there was just some more cooperation with these sanctuary cities. So I think there's. Look, I think there's going to be some type of compromise. There needs to be, because you need those 60 votes in the Senate. And it's going to have to be a little bit of a give and take. And I think that there's some common ground, maybe not necessarily with the enforcement. Some stuff with the enforcement, but I would say, what about just regular immigration policy? I've been pushing the administration to approve the backlog of renewals for work authorization. This is a big issue, not just in my district, across the country. Employers who rely on these people for employees, they're filling an economic need, they're contributing to our society. They don't have Any work, criminal history. They're paying taxes. They're losing their status because of the lack and the time that it's taking to approve these work authorization renewals. They lose their job as a result, and the employer loses a good worker. So if we can just make some progress in some of that stuff, it shows compassion from the administration, it helps our economy, and it helps these people who are here trying to find a better life.
- [12:39]
B
This is a big deal for our audience. As an issue, do you think we can avoid a shutdown next Friday? Does there need to be another CR before we move on to some other issues?
- [12:48]
D
So there won't be a shutdown. It's just the Homeland Security funding. Yeah, look, I hope not. I mean, I hope the Democrats recognize here that when they mess with the Department of Homeland Security, it's not just ice. In fact, ICE has the resources from.
- [13:02]
B
That's kind of the irony of this.
- [13:03]
D
Yeah, ICE has the resources. You're shutting down the tsa, airport screening and flight security. You're shutting down counterterrorism, cybersecurity programs and Coast Guard. You know, these are important operations that need, you know, don't mess with our Homeland Security. And especially these legislative leaders, they're from New York. Schumer and Jeffrey should know better than to try to play politics with Homeland Security. So I do hope that there's some compromise here. We get to a resolution so there won't be a lapse in funding for all those other critical agencies under Department of Homeland Security.
- [13:35]
B
FEMA is in that group as well. I was shocked to see 17 people have died in New York from freezing cold weather. And this has been one heck of a winter. Congresswoman, another cold front is coming this weekend, though. Is Mayor Mamdani on top of this?
- [13:51]
D
Look, I hope he's, you know, it seems like he's doing some on the job training. I hope he's paying attention to how this first storm went, what happened there. That change in policy to not remove people who are homeless from the streets in these frigid weathers was obviously a deadly mistake. Mayors in the past have always proactively sought shelter for those individuals. And there's no reason why we shouldn't be able to do that. Remember, we had all these migrants in luxury hotel rooms at taxpayer expense. There's no reason why you can't help these individuals. And a lot of them are mentally ill. They don't know. They can't make a decision for themselves in some cases to seek shelter. And so I think the mayor made a big mistake there. And not to mention the disaster that we're seeing in terms of garbage piling up all over the streets of New York City. That's not common, you know. That's not common. You know, maybe some of his advocates are saying, well, it's a snowstorm. That's what happens. No, no, no. He needs to put resources back into the basic services that people deserve. He's cutting over time for our public safety officers. He's not putting the resources necessary to get the streets cleaned in a timely manner. And I think, you know, I hope he's learning for this, learning from this and adjusting as we go along. Well.
- [15:03]
B
Well, in our remaining moment here, I had to note that he has now endorsed Kathy Hochul's reelection campaign with Adrian Adams. What does Bruce Blakeman need to do to be the first Republican in about two decades to win that seat?
- [15:18]
D
I think Bruce needs to remind everyone the radical positions that these two individuals have taken. Not only did they support the bail law that was disastrous and led to crime skyrocketing, but Adrienne Adams in particular, I mean, she voted for. She was a co sponsor of noncitizen voting, which is a law that we went to court and we stopped from taking effect, thankfully. But she also voted to defund the NYPD by a billion dollars, tied the hands of our NYPD officers, voted to increase the property tax levy year after year. So I would say that these are radical positions that are hurting the cost of living and making it much less affordable in New York City to live, particularly for our middle class. And they've made us less safe. Now we've seen some crime come down. It's a result of President Trump. People need to recognize that, that he's deported criminals. He's put pressure on these municipalities. That's why New York City is safer today than it was just a little over a year ago.
- [16:13]
B
I know Your new congressional map is due tomorrow. Come back and talk to us next time about what's going to happen with your district.
- [16:19]
D
We're appealing the decision. Yeah, we hope to keep our map as is because this is a grab by the Democrats to try to take the only Republican voice in New York City.
- [16:27]
B
First time for you either. Nicole. Molly, attack us from New York live on Bloomberg. Stay with us on balance of power. We'll have much more coming up after this. This.
- [16:38]
A
Support for the show comes from public, the investing platform for those who take it seriously. On public. You can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and based on your thesis, not someone else's. Go to public.com podcast and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com podcast paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available@public.com disclosures you're listening to.
- [17:40]
B
The Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30. Thanks for being with us on the Thursday edition. Live from Washington, I'm Joe Matthew with our eyes on the White House here on Bloomberg TV and on Wall street with another doozy of a session. It's been difficult so far. The S&P 500 now down another 1% today, losing about 68 points and we're watching bitcoin tumble further. It just now broke through 66,000 on the way down. We have a 65 handle on Bitcoin for the first time in a long time. It is down 10%, more than 7,000 to $65,500 for one Bitcoin. This is a cascade of selling that continues following earnings from Google Alphabet, also lower today. We should mention Google is down about 2% seeing a bid in some stocks, but this has been a difficult session. The NASDAQ down 267points, a little more than 1%. Big questions about what takes place a week from tomorrow with regard to the Department of Homeland Security, as we just illuminated in our conversation with Nicole Malliotakis, is eight days enough to strike a deal on ice. Restrictions with new restrictions, new proposals, demands you might say, put forth by Chuck Schumer and Hakeem Jeffries that we will run through in a moment with Democrat Brendan Boyle of Pennsylvania, the top Democrat on the Budget Committee, whose district attorney in Philadelphia, Larry Krasner, had some pretty tough remarks about ICE in Minneapolis and other cities around the country. Let's there will be accountability now, There will be accountability in the future.
- [19:30]
E
There will be accountability after Trump is out of office.
- [19:38]
B
If we have to hunt you down the way they hunted down Nazis for decades, we will find your identities, we will find you. We will achieve justice, and we will.
- [19:52]
E
Do so under the Constitution and the.
- [19:54]
B
Laws of the United States. Democratic Congressman Brendan Boyle of Pennsylvania's 2nd district ranking member of the House Budget Committee, is with us now live on Bloomberg TV and radio. Congressman, thanks for your patience, and it's great to have you back on balance of power. Let's start with the rhetoric. Do you worry that Democrats will be tied to rhetoric like this when we hear abolish ICE equated with defund the police? Senator Ted Cruz was on the program last evening decrying Democrats use of the term Nazi. In that case, how worried are you about this moment we're in?
- [20:29]
E
Well, first, the only people I hear using the term defund the police anymore are Republicans saying that Democrats stand for that when that's patently false. I have never stood for that. And I've actually publicly, going back years, criticized that sort of rhetoric. That, again, I don't know one elected Democratic colleague of mine in Congress who supports that or uses that phrase. I do understand, though, why Ted Cruz and other Republicans want to distract from the issues because, let's face it, they're very afraid about this November midterm election. We just saw a special election in Texas in which a Democratic candidate won a district that Donald Trump had won last November in a landslide. So we're in an environment right now in which Democrats are overperforming by double digits on average every single special election that's taken place ever since January of last year. So it's not surprising to me that Republicans want to talk about anything other than their pitiful record in office.
- [21:31]
B
Well, I'm sure you've seen this letter that I refer to. It is addressed to Mike Johnson and John Thune. It is from your leader in the House, Hakeem Jeffries, and the Senate leader for Democrats, the minority leader, Chuck Schumer. Targeted enforcement is number one. There are 10 on here. DHS officers cannot enter private property without a judicial warrant. This is something Republicans have pushed back hard on, suggesting it would simply take too long for an enforcement action to come together. Number two, congressman has been extremely controversial, which is curious to some, and that's demasking no masks allowed. Prohibit ICE and immigration enforcement agents from wearing face coverings. John Cornyn 2 days ago on Bloomberg called that an insult to the agents. Is this going to be the sticking point on a deal?
- [22:19]
E
Well, I have to say I'm very confused by that. Although I understand why John Cornyn wants to pretend to be more conservative than he is at the moment, facing a very difficult Republican primary for reelection. You know, I represent a lot of Philadelphia police officers, live in a neighborhood that actually has a lot of Philly police. The officers here in Philadelphia and indeed every community in the country, they don't wear masks. They're public people. They're professionals. They wear uniforms. They have their names in the right by their chests. Their faces are visible. Why is ICE any different? Why is ICE acting like they're somehow above the law? Why should they get special treatment? You know, one of the reasons why law enforcement doesn't wear masks is because they want to have the trust of the community. I think that ICE is, and again, I have respect for anyone who's in law enforcement. I've always said that this is one of the most difficult jobs in society. But I think the majority of the American people, as polling shows, are pretty disturbed by what we're seeing in terms of what's happening on the streets of Minneapolis and the way ICE is conducting itself. So I'm someone who has always been pro law enforcement, understands the difficult jobs they have, but also recognizes that we see real chaos and mayhem on the streets of Minneapolis. That isn't making any of us safer, frankly, it's making us less safe.
- [23:54]
B
So what's more likely here with eight days to go, a deal that resembles this list of restrictions or a one year or full year cross for the Department of Homeland Security?
- [24:07]
E
Well, so just to be clear, I think reining in ICE and having it act like a normal law enforcement agency is the appropriate and right policy. I think a pretty solid majority of Americans agree with me that on that, as recent polling has showed. Now the question is, will the Trump White House back down and accept that over the course of the next eight days? I have to be honest, I'm very skeptical that that will happen. So I do fear that specifically to dhs, that we will face either another CR or possibly a long shutdown, the quicker that this White House recognizes that the way ICE is behaving is not right and not helping achieve their stated mission is the best route to go.
- [24:57]
B
Do you worry that Philadelphia is on the list? What happens if Dan Bongino shows up in Your town, your neighborhood.
- [25:06]
E
You know, I have to say I would not. And I have a number of friends were in Minneapolis. They've talked about just how horrific it's been. I certainly don't want to see that on the streets of Philadelphia. By the way, I would point out, if you mind a moment of bragging, Philadelphia had fewer violent crimes last year and fewer murders than at any point in the last 60 years. So this is literally the safest. And I say this as someone who's a born and raised Philadelphian and represents the district where he grew up. Philadelphia has actually never been safer at any point in my lifetime than it is now. That's something that we should celebrate and that other communities can learn from. The last thing we need is a repeat of Minneapolis here on the streets of Philadelphia.
- [25:56]
B
Well, this is a heck of a time to be a member of Congress. Once this is resolved and we start getting into the throes of primary season, Congressman, what's the appropriations process going to be like from your view on the Budget Committee? Do we go into campaign mode or is there going to be an agenda for this Congress? I suspect you're going to point me to Mike Johnson on that one.
- [26:16]
E
Well, you know, the reality is with two year terms, by the way, the provision of the Constitution, my wife most dislikes the fact that members of the House of Representatives have to run every two years. I don't think you're ever really out of election cycle on the positive. It does keep you connected to the community that you represent. I'm back home here in Philadelphia because we adjourned session late yesterday. So, you know, I think that over the last dozen years or so that I've been in Congress, I've been able to balance the Washington, D.C. aspect of the job as ranking member of the Budget Committee. It's obviously an enormously time consuming position that I have within the Congress, yet at the same time being back home and being connected to the constituents that I represent. So I don't foresee any sort of change over the next few months compared to the way it's been the previous year. With one exception. With one exception. Perhaps when we get beyond these primary dates and primary elections, perhaps we will see more House Republicans finally begin to break from this White House and actually vote according to how they actually act in private and what they say about the Trump White House in private, but are too afraid to say that or to act on that in public because they're so afraid of their Republican primary electorate as they're facing what will probably be a very difficult midterm election in November. I think you will see more and more of them attempt to drive some distance between themselves and the Trump White House because it'll be in their electoral best interest to do so.
- [28:00]
B
It's great to have you back, Congressman. Thanks for the time as always. Brendan Boyle from Pennsylvania, or maybe I should just say Philadelphia Democrats ranking member, House Budget Committee. I'm Joe Matthew in Washington. Let's assemble our panel to consider what we just heard from Mr. Boyle and from Miss Molly. It's not as Bloomberg Politics contributors Rick Davis and Adam Hodge are with us. Rick is our Republican strategist, of course, partner at Stone Court Capital. Adam is our Democratic strategist partner at Bully Pulpit International. I'd love for both of you to take a swing on this because I have to admit I'm not feeling too optimistic about a deal coming together before next Friday based on what we just heard. Adam, do you feel any differently? It sure seems like we're far off, Joe, and I think that the Democrats putting forward illicit demands, which seem more clearly to be, you know, a kind of a laying down a marker and not a real expectation that they'll get all 10 of those things passed. But I think Democrats feel like they're on a bit of an offensive on the issue that it traditionally has bedeviled our party. We have not been able for decades to be able to mount an effective push on immigration issues. What you're seeing right now is a very coordinated and effective response to clearly an issue that the American people overwhelmingly support our position. Look, NPR had a poll today that showed 60% of the people don't approve of the job ICE is doing. That puts them a stronger footing to actually try to get some of these demands passed. I think the White House's political interest should be to find a resolution in the middle, get a deal, and keep the government open. Well, we'll see to what extent President Trump gets involved here. Rick, is there an ask for Republicans to try to pull Democrats closer on this, maybe involving sanctuary cities? What's your thought after hearing from these two lawmakers? I thought Representative Mali Takas made a really strong case for opening up a discussion around sanctuary cities and defined by the fact that illegal immigrants violated the laws, are currently incarcerated. There may be some due process issues. Immigration courts are choked full and so what do you do with them?
- [30:16]
E
Right.
- [30:16]
B
And right now there's not an easy way for the immigration officers to pick them up and either deport them or put them in some kind of immigration incarceration so the reality is that is a problem. I mean, it's not that they give sanctuary to people. It's these are the violators of our laws who have been picked up by cities, you know, not by ice, not by border security, border patrol. And, and, and so I think there's a deal to be cut there. I just can't imagine a scenario where the American public thinks it's a bad idea to remove immigrants who have violated our laws. So let's see. Interesting. Well, we're going to find out. And something tells me we might be talking about this a week from today on the the threshold of another deadline. Rick Davis and Adam Hodge, thank you so much for spending another hour with us here On Balance of Power. I'm Joe Matthew in Washington. We'll get the advice of Patrick McHenry, former speaker pro tems on his way in next only on Bloomberg. Stay with us On Balance of Power. We'll have much more coming up after this.
- [31:27]
A
Support for the show comes from Public, the investing platform for those who take it seriously. On Public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and based on your your thesis, not someone else's. Go to public.com podcast and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com podcast paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor. Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available@public.com disclosures.
- [32:29]
B
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. You know, if you want somebody to give you bad news, it may as well be Charlie Pallet, the voice of the New York subway. We'll take normal Linda as well, because we're trying to plumb the depths of this market here and figure out exactly what's going on and maybe if there's going to be a floor in place when it comes to Bitcoin, we're still talking about software. How's there anything left to sell? Well, when it comes to software, Microsoft is about to sink below $400. Nora. Melinda, I'm looking at Salesforce that gave up $200 a long time ago. It's down 5%. Microsoft down 3. Everybody thinks that we're going to vibe code our way around all these companies in the future, but this is much bigger than software, isn't it?
- [33:21]
F
Well, it's definitely bigger than software. We're really seeing it spreading across the broader tech sector. We did get earnings out of Alphabet, which people really parsing. But a lot of the focus there, people are really concerned about, about too much spending on artificial intelligence. We did see a positive report out of the company, stellar numbers. But people are still concerned as to whether or not these heavy, these massive investments into artificial intelligence are actually going to pay off. And this is a long journey that we're going to have to sit on to actually see this come to fruition and seeing things physically in place. But for right now, it's really just a bet on the future, Joe. And a lot of investors are concerned about that.
- [33:59]
B
Well, it's something though. If we're all upset because Google and the rest are going to spend too much on AI, then how come in videos lower? Isn't that where all the money is going?
- [34:09]
F
Well, Nvidia is definitely taking it to the chin today as well. I mean, take a look at the Mag 7 stocks. I'm looking at an index right now on the terminal down by about 1 1/2% on the day. So you're really seeing widespread fears across the board. We've also been talking about memory shortage concerns. We've been looking, looking at Qualcomm shares also lower. So a lot of these mega cap names are really taking it to the chin as people start to figure out whether or not they should be rotating into other sectors now.
- [34:36]
B
Yeah, right. Yeah, the, the storage stocks have been struggling this week as well. I will know Broadcom is moving higher, which of course is going to be getting money from Alphabet to make TPU's. Let's talk about crypto, though, Nora. This is a big part of the story today. And we're going to spend some time with Patrick McHenry in just a moment, who's very sensitive to Changes in the crypto market here. 65. We've got a 65 handle on Bitcoin. Does that mean the charts broken? So we're kind of beyond technical support. What, what happens from here?
- [35:06]
F
Well, I've been keeping an eye on bitcoin all day, and we're just continuing to see it fall and fall and fall. Really tumbling here. And we are seeing that this is hitting its third straight day of declines, of course, dropping below that key $70,000 level. Level now hanging around 70 or $65,000. So we did see that the coin actually lost nearly half of its value since the record it hit just four months ago. So clearly we are seeing retail investors and those who are really just interested in the more speculative space really read configuring what they think about how much of an investment they should be putting into this coin. We've been hearing from Michael Burry also casting doubts on the space. So there's a lot of uncertainty right now as a relates to bitcoin and we're really starting to see a lot of outflows coming out of this group.
- [35:51]
B
So much for a store of value, I guess. You know, there's an ETF if everyone's upset about the ETF vacation of crypto or whatever we call this. Nora, there's an ETF that short crypto, short Bitcoin, biti. It's up over 10% today.
- [36:06]
F
There's an ETF for everything, as always.
- [36:08]
B
There really is. Let me know when you get yours, Norma. Linda covering the markets for us at world headquarters in New York. I did think today we were talking to producer James before we got on the air and said, boy, this is a great day to have Patrick McHenry. I wonder what he thinks of this. Does this color the debate around crypto regulation in Washington? Does it cause the institutions to back off looking at 65,000? It was a big deal, of course, when we first reached 65,000, but this is a far cry from 120,000. Plus. He's a Bloomberg Politics contributor, of course. Former speaker pro tem used to run the Financial Services Committee. They had some fun with Scott Bessant yesterday. It's good to see you back.
- [36:48]
G
That was lively yesterday.
- [36:50]
B
No, no doubt. I can only imagine as a chair. What do you think when all the other members show up like this for a fight, including the witness?
- [36:57]
G
Tough to be a referee.
- [36:58]
B
Yeah, no, thanks like that. It's tough to be in this market right now. I'm looking at the numbers while we talk down $7,000 per coin. About 10%. Yeah, we're plumbing the depths as we say. How concerned are you about the halo effect just vanishing over crypto?
- [37:19]
G
Well, look, this is a four year cycle that crypto is traditionally been on and we've seen these retreats and advances. The last time we went through this where you had this major fallout, nothing broke of substance and it was around rtx which was the breaking point point. And then there's all the fraud around that and the prison sentences. But. But what, what remained was were the key assets here and what came into the space were the true builders that are doing something with crypto and the crypto rails and enabling real work on those, on those technological innovations. We're going to likewise see that here. AI has been the darling and crypto has been taken second place. And that's not the normal space for crypto. But what this does highlight with this major reset and crypto coin prices is the need for market clarity, need for clear rules of the road here in the United States, which is stalled on Capitol Hill.
- [38:20]
B
Yeah. So does this hasten legislation around market structure because this market's telling us it needs it, or are there more Brad Shermans who say this is fraught with risk and the currency of criminals?
- [38:35]
G
Someone like him is unconvinced how bold.
- [38:37]
B
Okay.
- [38:38]
G
And so he'll still fight that fight regardless of what happens here. But by and large, what you see on Capitol Hill is a bipartisan consensus.
- [38:47]
E
Right.
- [38:47]
G
I mean that's the significant thing that we've seen this Congress post election is you have Republicans and Democrats working together on crypto legislation. It's almost all the Republicans, Republicans and then about a third to 40% of Democratic senators and House members are supportive of crypto. The House bill was passed last year, the Clarity Act. It's taken the Senate a long time to actually get to a markup. And the House Ag Committee passed a bill last week on providing clarity around CFT regulation of what is it, what are decentralized commodities, number one and number two, the banking space, which is really where you need the work done. They stalled out over the issue of yield on stablecoins which the banks are fighting to regain policy space that they lost in the Genius act which enabled a federal regulatory regime around stablecoins. So that's held up around really one big issue that is extraneous to market structure. The market structure bill.
- [39:51]
B
Yeah.
- [39:51]
G
When you see a market reset like this, it is, it is urging Congress on to provide clear rules of the road so you don't have knock on effects when you Have a market shakeout like this.
- [40:01]
B
Really interesting. It's something that obviously our audience is very curious about. We're going to get another dose of news. When strategy reports after the bell. If this kind of, and I know you're not a stock analyst, I don't want to turn you into one. If losses like this continue, does this idea of a crypto treasury company go up in smoke?
- [40:19]
G
I think, I think when the market was looking at these six months ago.
- [40:24]
B
Yeah.
- [40:25]
G
And not even a year ago, it was. There's a lot of skepticism around whether or not if there's a price reset, how many of these things break, how these, how many of these things are nonfunctional business entities. I think we're going to see that pretty quickly in the shakeout here. I think it's an obvious thing, thing of a financial innovation that was short run in duration because you did. Because of a regulatory, a lack of a regulatory change.
- [40:52]
B
Wow.
- [40:53]
G
So if Congress comes in and says if you're a participant, a traditional asset holder, if you're a stockbroker for an average everyday retail investor, you can go purchase these coins in a normative way under a clear set of rules. When you have that, you don't need a secondary or third party holding those assets for you in a corporate wrap. So these DATs were short duration vehicles. I think that that is what will shake out for most of them really quickly, much, much faster than anything anyone anticipates.
- [41:30]
B
Isn't that something? We've got some breaking news, Congressman. I just want to mention the President on Truth Social. He's posting about a new nuclear deal with Russia. This is happening before our eyes. Should work on a new nuclear treaty, not extend new start. He says we should have our nuclear experts work on a new deal. This is just breaking right now. President Trump says the US should work on a new nuclear pact with Russia, saying that I completely rebuilt military in my first term. He says I've stopped nuclear wars from breaking out across the world between Pakistan and India, Iran and Israel, Russia, Ukraine. Rather than extend new start, a name he apparently does not like, we should have our nuclear experts work on a new improved modernized treaty. Is that something that Congress would support?
- [42:15]
G
Yes. I think we haven't addressed nuclear disarmament in over a generation here in the United States. I think it's a worthwhile endeavor. I think the complexity of this administration's foreign policy is not well understood by the market. Market everything is interconnected. Russia, the Middle East, China, Russia, Ukraine, Middle East, China, Canada, all the trade conversations all the foreign policy and, and Department of War actions. They're all connected in the President's mind and the President's advisors minds that they have a chessboard that they're looking at in real time. Yeah, I think this is just an example of it unexpected today, but a significant sign and hopefully a sign for the good.
- [43:02]
B
I don't know if it brings progress in talks with Ukraine, but this has been interesting. I need to ask you with our remaining couple of minutes here about Department of Homeland Security. You've seen the new list of demands. I have them here. There are 10 of them, no masks. Were told as a non starter by any number of Republicans in the Senate this week, targeted enforcement, protecting sensitive locations requiring id. Could these end up in legislation or are you and I talking on the verge of another deadline next week?
- [43:32]
G
We're talking on the verge of a tight deadline that is likely to fail. You know, with a two week deadline. My original thought about this short term funding mechanism is they are ahead of deal. When you have a two week extension of funding and it takes a week, week for Congress to actually produce that funding. Yeah, you need to have the deal done.
- [43:53]
B
That's why you said it needed to be done by now. Right. When we talked a week ago for this to happen, it would be today. Basically.
- [43:59]
G
Basically before they leave town for the week, for the weekend, that's not going to happen. So what we're looking at is another extension of Homeland Security funding, a continuing resolution. You have a list of demands from the two Democratic leaders on Capitol Hill. If that's a, if that's a list to negotiate from, that is different than a list of demands. If they're withholding their votes unless they get all the Items here neatly 10. Because that's where we are in our politics. Right. Could be a list of 7 or 8 or 11. Had to be 10. So if this is a list of demands that they all have to be met, we're going to have a shutdown. If this is, if they're reasonable enough in their assumption here with some pledges by the White House of and Holman on what's going to happen in Minneapolis, I think you can, you can get a deal done, but probably not by Thursday or Friday of next week.
- [44:51]
B
When you hear John Thune suggesting that he might be open to a year long CR for dhs, does that make you feel like.
- [44:58]
G
Well, it makes me feel like we've gone back in time.
- [45:00]
B
Okay.
- [45:01]
G
Because when President Obama had his approach to immigration, which was daca, Republicans in the House said We don't want to fund daca. We don't want to fund your immigration policy. So we funded all of government except for the Department of Homeland Security and it was called the CR Omnibus. The Cromnibus.
- [45:18]
B
Yeah, the Chromnibus taking you.
- [45:20]
G
It's a way back machine.
- [45:21]
B
This is amazing.
- [45:22]
G
Yes, we are coming back around and now it's the left saying they don't want the rights immigration policy.
- [45:29]
B
Yeah.
- [45:29]
G
And nothing is new again. So this my favorite quote quote about our politics and popular culture from how I was growing up was same as it ever was. Right. And it is true in this atmosphere there will be deal making. I don't think the Democrats want to own the shutdown of all the Department of Homeland Security measures.
- [45:49]
B
Right.
- [45:50]
G
That would be a huge political failure on their part.
- [45:52]
B
I thought James was going to come in with the talking heads. That would have been so cool if that happened. The crumb did you come up with crime to bust back?
- [45:58]
G
It was not me.
- [45:59]
B
Wow, that's. Wait, just Google it. You'll have something to laugh about later. Patrick McHenry, of course, Bloomberg Politics contributor and former speaker pro tem. He knows what he's talking about. So how about we all meet back here this time next week and see where we are. I'm Joe Matthew. This is Bloomberg. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already. Apple, Spotify or wherever you get your podcast. And you can find us live every weekday from Washington D.C. at Noontime eastern@bloomberg.com.
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D
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