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- [00:01]
Joe Weisenthal
With stays under $250 a night, VRBO.
- [00:04]
Michelle Fox
Makes it easy to celebrate sweater weather.
- [00:06]
Meghan O'Sullivan
You could book a cabin stay with.
- [00:08]
Joe Weisenthal
Leaf views for days, or a brownstone.
- [00:10]
Michelle Fox
In a city where festivals are just a walk away.
- [00:13]
Joe Weisenthal
Or a lakeside home with a fire.
- [00:15]
Meghan O'Sullivan
Pit for cozy nights with friends. Or if you're not a sweater person, we can call it corduroy weather.
- [00:21]
Joe Weisenthal
More flexible and with stays under $250.
- [00:24]
Meghan O'Sullivan
A night, you can book a home that suits your exact needs. Book now@vrbo.com.
- [00:33]
Jeannie S. Zaino
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.
- [00:55]
Joe Weisenthal
When they asked Mr. T Ba Barakis what his prediction was for the fight, he said, pain. But this may not be Rocky 3 today in the Oval Office. Not after what we heard from President Trump this morning. He showed up on Fox News Radio talking to Brian Kilmeade, predicting a civil meeting with Zoran Mamdani, the man he calls a communist, the next mayor of New York, who's going to be in the Oval a little more than two hours from now. It's scheduled for 3pm Eastern time. And this will have a lot to do with what we discuss on the latest deal of balance of power. Everybody's ginning for a fight though, right? This is going to be pay per view is what they said. Must CTV pop the corn? You know, when we start talking like that and creating these expectations, it usually doesn't happen, right? Is this going to be some kind of love fest? The president saying again on Fox, quote, I was hitting a little hard too, in all fairness. What? Well, he sure was. They've both been swinging. And as we witnessed over the course of Mandani's campaign, listen, if anyone can show a nation betrayed by Donald Trump how to defeat him, it is the city that gave rise to him. He's a communist. I don't think our country is ready for a communist. I have four words for you. Turn the volume up. He has to come right through this building to get his money. And don't worry, he's not going to run away with anything. I will not be intimidated by this president. I will not be intimidated by anyone. And then they became friends. I don't know. That might not happen. Ceci thinks this could be Carney esque. Donald Trump does have a history, ask Jay Powell, of saying really nasty things about you when you're not around, leading up to a meeting in which he's very kind, actually, everybody seems to kind of get along. Let's see what the panel thinks. They've had a minute to settle on this. Rick Davis and G.D. shan Zaino are back on a Friday, which means it's a good one. Bloomberg Politics contributors Jeannie Shann Zaino, Democracy visiting fellow at Harvard Kennedy School's Ash Center. Rick is partner at Stone Court Capital, our Republican strategist. What do you think after hearing all of that, Jeannie, and what the president said today? I mean, it's going to be a civil meeting. Are these guys looking to get along?
- [03:21]
Jeannie S. Zaino
I'm still back on your reference to Mr. T. Joe. That, that just threw me back several years.
- [03:28]
Joe Weisenthal
Or decades.
- [03:29]
Jeannie S. Zaino
You know, it is, yeah, decades. That's true. It is a clash of the men from Queens who are themselves separated by decades. I mean, they are not only, you know, so different ideologically, but they are so different generationally. And I think each has a grudging respect for the other. And you've heard some, some of that in the comments, as nasty as they have been. And of course, I think it is an opportunity for Donald Trump to focus where he ran on and has lost his way, which is affordability, and for Zoran Mandani to go into the lion's den, so to speak, and to come out unscathed. So they both got their work cut out for them. I can't imagine they don't have a press pool or maybe I'm just hoping. But I do think it's an opportunity. I was so glad you mentioned Jerome Powell, because I think for all the people who've gone in and out of the White House, I think Jerome Powell did it in a way that people should try to emulate. He has handled this masterfully. And so I think he's the one that I would look to as sort of an example of how to stay your ground and not to get wrapped up in the performative nature of it all.
- [04:41]
Joe Weisenthal
What do you think about that, Rick? Donald Trump does have a pattern of talking tough. It's kind of like road rage. But then all of a sudden you get out of the car, you're pretty nice to that person who is tailgating you. I don't know.
- [04:56]
Rick Davis
Sometimes that happens and sometimes the trash talk continues right into the Oval Office. Yeah, I err toward the Mr. T line. I pity the fool. I think that Mannami's walking into something that, you know, maybe he thinks, oh, this is what I should be doing as a mayor elect, I should be, you know, checking the boxes. With all these powerful people who hold sway over the city, how do I work with them? This is the first Republican that he's really having that conversation with and any MAGA Republican. So we may not know what happens inside that room. I mean, certainly the President is turning down the temperature on this meeting quite a bit. Not currently showing that it's going to be a press pool. Certainly the press pool is going to be pretty, pretty sweet to Mr. Trump. I mean, it's Fox and MK Media and Newsmax. And I mean, like when your press pool is basically all your greatest supporters, it's kind of hard for Mandami to think he's going to get a fair shake if they do come in. But my real question is, regardless what happens in the meeting, is the mayor going to go out, you know, and do a, you know, press veil on the, you know, front lawn of the White House like so many of these guys do after they meet with the President? Yeah, because I think that could be more telling than if we're not going to see inside the Oval Office. So we'll see. I think, I think it could be full of surprises.
- [06:32]
Joe Weisenthal
This. That was. Okay, great insider take. You're right. The Bondani might come out to the sticks, as they call it, the stakeout in the driveway. And just like you'd see Chuck Schumer come out there. That was a terrible meeting. And they kind of framed things the way they can in front of the media. By the way, he just posted on Twitter this morning a shot from the airplane. We don't have that, do we? To show everybody. Look at this. There's no writing, just an airplane emoji smiling. Is that first class? What do we think, James? I can't tell that. Either that or he's sitting. You think that's coach, that seat? I don't know if that's coach. Just curious. You guys weigh in. As you wish. Jeannie. The, the question here about press being allowed. Rick brings up a great point. Look at the in town pool. I love the fact that this is something we can talk about. Fox, newsmax, Washington Times, MK Media, America's urban radio network. And then you've got the photos. Apafp, New York Times, Reuters, Getty, Washington Times for print. I think I said that. Does he need to bring them into the room? Jeannie, how is this not open press already?
- [07:38]
Jeannie S. Zaino
Yeah, I can't imagine it's going to be the best TV of the day, if not the week. So I can imagine either one of them exactly avoid it. But, you know, they say, so far I believe that it's closed. And absolutely, it is a friendly press corps. If they're not friendly, he berates them, yells at them, shames them, threatens their licenses. But I don't think anybody should estimate Zoran Mamdani's skills here. You know, he came blasting out of nowhere in New York City, literally, with almost 1% name recognition, because he went into those boroughs that increased their support for Donald Trump after the 2020 election. And he asked those people, creating viral videos along the way, why did you turn to the president? Every time he heard it was about the economy, about affordability. And he's so disciplined, he has stuck, stayed on that message also throughout the campaign. After the primary, he went and he spoke to business leaders, he went and he spoke to Jewish leaders, people who opposed him, people who don't support his policies. Every single one of them came out saying the same thing. We liked him. He's very charming, which sounds a bit like Donald Trump. So I don't think we should underestimate, underestimate his abilities to go into this room and to be prepared for what he finds. And of course, Donald Trump is in a much different position now than he has been. Whether it was Gretchen Whitmer or the president of South Africa, he is weaker. And saying the issue that's number one on Americans minds, cost of living, is a hoax. And that is not Mandani's message. So Donald Trump has a lot at stake here as well.
- [09:20]
Joe Weisenthal
I'm fascinated by the prep that's been reported here on behalf of the mayor elect Rick Mamdani joined a video call with Robert Wolff, former chief executive, UBS America's, of course, a close ally of President Barack Obama, and also plan to speak with Governor Kathy Hochul, Senator Chuck Schumer, Hakeem Jeffries, the Reverend Al Sharpton and others. Mamdani adviser Patrick Gaspard said the level of groundwork was critical for a meeting he characterized as absolutely essential for the future of the city. What do you make of the groundwork going into this meeting?
- [09:58]
Rick Davis
Yeah, look, I mean, it's something that you would likely want to see from a highly inexperienced, you know, newly elected official in a major post, like, you know, mayor of New York City, 34 years old, he doesn't really have a track record. He hasn't had long experience with public officials who are governors and senators and congresspeople. And so it's impressive, I think, any way you market. He's not he's not just, you know, focused on his agenda. He's, he's reached out to find other people who've had experience dealing with this administration and probably pretty confident that he's, he's going to get a meeting that they're not going to get. Right. I mean, like, Kathy Hochul is not going to be in the Oval Office anytime soon. Right. Yet he is going to be talking about the state of play and the biggest city in her state. So it's a, it's a, it's a really unique position for such a young individual who is now going to become one of the most powerful people in the United States. And so it's a good indication that he isn't just, you know, shooting from the hip, that, that he's going to be well prepared by the time he gets in there.
- [11:15]
Joe Weisenthal
Jeannie, you're the New Yorker on the line here. What is Zoran Mamdani going to learn from the Reverend Al Sharpton about Donald Trump?
- [11:24]
Jeannie S. Zaino
Oh, a lot. You know, Al Sharpton and Donald Trump, as we know, famously go back decades. Al Sharpton has spent a lot of time with Trump. So, you know, it is an impressive array of people he's spoken to. But this is the Zoran Mandani we've come to know. He is always at least tries to be the most well prepared in the room. And I know that that is what he is aiming to do. He's going to try to be strong. He's going to try to focus on New York and the issue of cost. Cost. He is incredibly disciplined in that way. And I also think it's really important to just note that in the last few days he had a big win in terms of keeping the police commissioner, Tish, she is going to serve under his administration. And that takes away the argument of those who are saying the city may careen towards, you know, an unsafe, anti police, all of this stuff. Jessica Tisch, they meddle many times and she said they share a vision and she's going to remain so. He's even early on had some wins like that.
- [12:27]
Joe Weisenthal
Rick got less than a minute. If your mom, Donnie, do you show up with an entourage or do you show up alone?
- [12:35]
Rick Davis
My understanding from what I read this morning is he's got, you know, five or six folks coming with him, none of the which are over the age of 32. So it's a young sort of excited crowd of advisors and staffers who will accompany him. And that seems appropriate.
- [12:54]
Joe Weisenthal
The optics are going to be fascinating. Is Lina Khan going to be sitting in the Oval. I can't wait to see this. Of course, if they allow the reporters in. Stay with us on balance of Power. We'll have much more coming up after this.
- [13:08]
Rick Davis
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Joe Weisenthal
Gift of 50% off unlimited. To be clear, that's half the price, not half the service. Mint is still proof premium unlimited wireless for a great price.
- [13:24]
Rick Davis
So that means a half day.
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Jeannie S. Zaino
Yeah.
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Joe Weisenthal
Give it a try@mintmobile.com switch upfront payment.
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Jeannie S. Zaino
Of $45 for three month plan equivalent to 15 per month required new customer.
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Meghan O'Sullivan
Offer for first three months only.
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Jeannie S. Zaino
Speed slow after 35 gigabytes of networks.
- [13:36]
Joe Weisenthal
Busy, taxes and fees extra.
- [13:37]
Jeannie S. Zaino
See mint mobile.com 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 live on YouTube.
- [13:56]
Joe Weisenthal
The backdrop for some pretty serious business coming out of the White House today. We've been talking for days now about this 28 point peace plan for Ukraine, one that Ukraine apparently was not consulted on. We've had some pretty good discussions about it this week knowing that most of this plan is a non starter for Ukraine, giving up the land that's been occupied and then some by Russia, limiting its ability to defend itself, promising to never join NATO. But a lot has happened just in the last 24 hours on this with an ultimatum effectively coming from the president. He says take it or leave it by Thanksgiving, less than a week away and a pretty remarkable flurry of phone calls for President Zelensky this morning as well.
- [14:37]
Michelle Fox
Well, that's right. And who knows where this will go, Joe, in the days ahead. But I want to pick up on what you mentioned as the ultimatum because if you listen to what President Trump said this morning, he had a very vintage Trump line. He says, I've had a lot of deadlines, but if things are working well, you tend to extend the deadline. So certainly keeping the door open for some sort of conversation, some sort of agreement, some sort of flexibility on what is being reported as a very lopsided plan in Russia's favor.
- [15:04]
Joe Weisenthal
That was his interview on Fox News Radio.
- [15:06]
Michelle Fox
That's right.
- [15:06]
Joe Weisenthal
Made a lot of news there this morning on a number of topics. With regard to this one, though, we know that Zelensky has spoken today with J.D. vance. There was a call earlier. He is supposed to speak in the days ahead with President Trump. Spoke with Mark Ruda at Naito. And we understand he just spoke with the prime Minister of Germany. President Trump, I should say, spoke with the prime minister of Germany. And it'd be very curious to see his disposition coming out of that meeting. German US Security advisers continue discussions. The headline on the terminal merged to brief European leaders on a call now about what was said with Donald Trump.
- [15:43]
Michelle Fox
Yeah, and we just don't know the reacts of the call. It's also important to note that President Zelensky released an address where he's talking about either losing his dignity or, you know, losing the support of a key partner in the war, namely the US but he recorded that or released it at least before he had the phone call with Vice President Vance. So there's a lot we have to learn about how those conversations went today, which are, as you say, ongoing.
- [16:07]
Joe Weisenthal
The ultimatum does seem to be real, whether it's going to be next Tuesday or some other point, as you suggest, Michelle, the president has, has made it pretty clear to the point where Zelensky is calling this one of the most difficult moments in our history. The threat is to cut off weapons support, and there's not much left of that. But also intelligence support, which has really helped to keep Ukraine afloat in this fight beyond the hardware that would all presumably go away by Thursday if this deal doesn't happen.
- [16:37]
Michelle Fox
Yeah, it's unclear how that leverage is going to play out, but of course, we've seen being pushed on both sides by President Trump, you know, trying to leverage Putin into getting it to a deal. Now he's putting more pressure on Zelensky. It's been quite a roller coaster this.
- [16:52]
Joe Weisenthal
Year, is that for sure? I'm glad to say that we have Meghan o' Sullivan with us here to talk about a former deputy national security adviser in the George W. Bush administration, now director of the Harvard Belfer Center. Meghan, it's great to see you. I'm curious your thoughts on the ultimatum and whether next Thursday is real.
- [17:12]
Meghan O'Sullivan
I find it very hard to believe that a proposal this far reaching could be hammered out in a way that would be agreeable not just to the Russians and the Ukrainians, but to the Europeans in some fashion as well. I personally, in diplomacy, am a big believer in putting, you know, hardcore ideas on the table as a starting point. But expecting that it could be resolved and that these issues could be negotiated by Thursday seems inconceivable to me.
- [17:43]
Michelle Fox
Well, Megan, let's talk about the pressure on the other side because we have the two Russian oil giants that are supposed to be sanctioned as of today. Now, President Trump said this morning that it would happen very soon. We're not, not clear on what that means. The first question is, are those sanctions going to go into effect, do you think? And secondly, perhaps more importantly, do those sanctions work? We've seen this time and again, administrations that you worked for and all up into the current one, is this going to work?
- [18:13]
Meghan O'Sullivan
So several questions there. One, are those sanctions going to go into place? I would say we don't know at this point. The whole proposal is a little bit of a surprise because it really did seem that President Trump was moving in the direction where he understood that Putin was playing him to some extent. And so there was that momentum to put more economic pressure on Russia. My guess is that there'll be some kind of suspension while this is being worked out and while as long as there are genuine negotiations going on around these ideas in the 28 point plan. Now, do these sanctions work if they are put into place? That's a big question in the sense of do they work? Will they, will they lead Russia to be more accommodating is hard to know, but they will have an effect on Russia's economy. So these sanctions, we've had sanctions in a place, Russia now for three and a half years, as has the European and many other countries. They have had an effect, but they haven't been implemented very strongly. And so this is a move in the direction for more economic pressure. There's frankly a lot more that could be done with sanctions and they could be implemented even more aggressively. That would create more economic pressure on Putin. And the extent to which that will change his calculations on something that he sees as existential to his rule and to his legacy is another question we learned.
- [19:43]
Joe Weisenthal
The President spoke with German Chancellor Mears a short time ago. Megan, I'm curious what Mears thinks of this, what Macron thinks of this, what Starmer makes of this deal.
- [19:55]
Meghan O'Sullivan
I think what we're seeing is the European leaders in private are probably very alarmed, but in public, I think they're taking the appropriate approach to say, let's see if we can come to an agreement that creates a just and lasting peace. And that's what the UK Prime Minister, Keir Starmer, said on his way to the G20 meetings, that, you know, we're all interested in the same objective. Now, this agreement or this proposal as we've seen it in the provisions discussed, has major implications for Europe. This is not just about Ukraine. This essentially would say that NATO can no longer expand. Keep in mind that Sweden and Finland just joined NATO last year. This is something that the Europeans will want to have a say in. It also limits and and downsizes what is currently Europe's largest and most battle tested and probably most technologically innovative military on the entire continent. So that is something that the Europeans will have a major interest in. It also, as I understand, it commits the Europeans to funding a significant part of the Ukrainian reconstruction. That should be part of the incentive for Ukrainians to agree to this. So the Europeans may have been treated as if they're superfluous to this agreement, but they're not. They're actually their interests are very core. The idea that one could promise to Putin and to Russia that Russia will be integrated into the global economy if Europe is offside, I think is not a realistic one. You just have to think of how Iran was promised that it would be integrated into the global economy after the nuclear deal under President Obama. And that didn't happen for a whole lot of reasons, even though the US Administration really wanted to see it.
- [21:46]
Joe Weisenthal
Megan, I just want to step in with some breaking news here that just crossed the terminal. A red headline on in Video of all companies, of course, a big newsmaker this week for the better with regard to its earnings report. It was dogged in the sell off yesterday. It's back up today and rising on a headline. Nvidia shares climbing to session high as US Officials have early discussions about whether to allow the company to sell its H200 artificial intelligence chips to China. The H20s here. Pretty interesting moment to see in Video Shares now really taking off on this news. Up almost 2%, more than $3. Broadcom is just barely positive right now and AMD is up about a half percent. A redhead on in video. It's something that we're going to be talking about here with regard to export controls and national security, whether we're talking about China or Saudi Arabia. Michelle, the, the stories seem to start bumping into each other here.
- [22:40]
Jeannie S. Zaino
Well, for sure.
- [22:40]
Michelle Fox
And it all goes back to this argument of tech transfers. And can you always be sure that these pledges can remain in place and provide the national security protections that we need?
- [22:50]
Joe Weisenthal
Meghan o', Sullivan, of course, coming from her role as former deputy national security adviser, probably has some thoughts about this. Megan, I don't mean to sneak up with you on that, but there are concerns here in Washington that we're mortgaging our national security when it comes to providing AI chips like these F35s to Saudi Arabia. Where do you fall on it?
- [23:11]
Meghan O'Sullivan
Yeah, I Think this is a very large concern on the part of Washington. I think some of it goes not, I think I'm aware like some of this goes to how far ahead you think China is. Is it actually very close to reaching or matching the US capability when it comes to these chips and it comes to the development of AI. And if you think it is right on America's heels, then maybe you think allowing them to import very high end chips is not going to change the landscape very much. But I am much more sympathetic to the argument that America still has a substantial lead in keeping high end chips from China for as long as we can is probably in our national security interests. Now that doesn't mean that we can keep China from developing AI and that it won't make progress over time. But export controls have been a very important part of our ability to maintain a technological political edge which I believe the US still maintains.
- [24:11]
Michelle Fox
Well, Megan, there's also this kind of prosperity argument on the part of particularly those from Silicon Valley that say, including Jensen Huang, that say that you can provide this technology with the protections and actually the benefits outweigh any of those risks which they see as diminished. How do you respond to that?
- [24:29]
Meghan O'Sullivan
Well, I think how I would respond to that is I would like to see some more data on that. I think Jensen Huang clearly has an interest in expanding sales into China for reasons that, that are clear. And whether or not this is a prosperity argument in the sense a global prosperity argument, I think really overlooks the key dynamic in the global international system, which is the competitive dynamic between the United States in China. And that dynamic is not going to be glossed over. It's not going to be diminished simply because we lift export controls on our most sensitive technologies. That dynamic is going to maintain, be maintained and be one of the fiercest competitions in the global arena for the coming years. And technology is the key component of that competition between the US and China. And I think, you know, selling high end chips is not going to make that dynamic disappear. It just might yield one of America's competitive edges.
- [25:37]
Michelle Fox
Well, Megan, as I understand, I don't want to turn away from this conversation, which is an important one, but when we look at South Africa today, this week, we're headed into a weekend where the US will not be present at the G20. You've done a lot of work at the Belfer center at what you call the middle powers. I want to know what is your reaction to that? How do you frame this snub in the context of what it means for the world middle powers and for the us.
- [26:03]
Meghan O'Sullivan
So thanks for mentioning the work that we do here at Belfer on middle powers. It's a new project that really acknowledges there are a large number of powerful countries. For those of you my age and older, you know, certainly we used to think about non aligned powers and they weren't really consequential. But middle powers today are those countries that have prospered over the last 30 years, the Brazil, Saudi Arabia, South Africa's Indonesia, others that actually have a real influence on the global economy, have an influence on global issues like climate and trade and technology. And they are core to the G20. And so for the US to snub the G20 I think is not very forward looking because right now the US and China are involved not only in that competitive dynamic with one another, they're involved in competing for the alliance, the friendship and the sympathy of these middle powers who matter more and more.
- [27:03]
Joe Weisenthal
Meghan, thank you so much. The former Deputy National Security Advisor Director of the Harvard Belfort Center. Stay with us On Balance of Power. We'll have much more coming up after this. Pro drivers live for race day, but for small business owners, every day is race day. That's why going pro with Lenovo Pro matters one on one advice, IT solutions and customized hardware powered by Intel Core Ultra processors. Keep your business on the right track. Business goes pro with Lenovo Pro Sign up for free@lenovo.com.
- [27:48]
Jeannie S. Zaino
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. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130 and.
- [28:07]
Joe Weisenthal
We'Re basically the reverse of what we had this time yesterday. This has been a remarkable recovery. If this thing holds until 4 o', clock, there's going to be some fun reading to do a little bit later on. S&P 500 up over 1%. Same for the NASDAQ. The Dow's up over 1 1/2%, 700 points. These are going to make for great headlines later. And they'll say, you know retailers, they couldn't avoid the opportunity to buy the dip. Bitcoin is still lower. It's down about $2,000, back above 85,000. You got a Vix at 24. That's not exactly low. So we're trying to figure out what in the world is going on and what happened in the last 24 hours that has brought us all the way back to where we were feeling pretty good about things yesterday morning after the Nvidia report. Now some people will tell you it's comments from the Fed. The dovish Fed will be cutting rates next month. So don't worry because a quarter percentage point is going to make that much of a difference for you right now. Stephen Myron talked about it even against the backdrop of no data. Did you hear they cancel in another cpi? We didn't get October jobs and so you have a dovish Fed. According to Myron. Here's what he said on Bloomberg surveillance. The lack of data doesn't mean that we don't have a forecast. We did have a forecast and all it gives us is opportunities to falsify our forecast. And there hasn't been anything in the data, in the news, in media stories, in private sector data, alternative data that's available to us that would make us think that the forecast is somehow nullified and there's been a big shock to it. So if anything, all the information that we've gotten, the interim since, since the, since September, FOMC has inclined to the dovish side. Inclined to the dovish side. Time to buy, right? A quarter percentage point that'll change everyone's lives. The thing is when you read market coverage from yesterday, depending on where you look, you might hear about it was concerns that the Fed wouldn't cut. Right. That's why everyone decided to sell their retirement plan yesterday over a quarter percentage point. They'll tell you that there are worries about the AI spend, that it's a bubble circular investing. Everyone all woke up same morning after a glowing Nvidia report and decided to sell. There might be something else involved here which is why we wanted to talk to Edward Harrison, the force behind the Everything Risk newsletter. This is the guy you call at a moment like this because you should be watching Bitcoin crypto as maybe not the canary in the coal mine. How about the locust in the market? I heard somebody use that term yesterday and it sounded good to me. Let's see what Edward thinks. Bloomberg's senior strategist, author of the Everything Risk newsletter. It's great to have you back. Let's. Let's get to some truth here because what we saw in the crypto market may have played a huge role in what we saw in every other market. How does this come together for you?
- [30:55]
Edward Harrison
You know, I think your intro Joe was right on in that it comes together in Nvidia, you know, knocked it out of the park. The market reaction was positive to that and then Suddenly, you know, around 11 o', clock, things started to fall apart. Even after we got the data on the jobs at 8:30, you know, nonfund payrolls up. I think what happened is that there was, you know, bitcoin infected the rest of the market. Bitcoin was selling off. It was doing a very bad thing for bitcoiners and they had to get collateral somewhere else. They sold some stocks, etc.
- [31:34]
Joe Weisenthal
Yes.
- [31:35]
Edward Harrison
And that precipitated a move.
- [31:38]
Joe Weisenthal
And if you need to raise cash, what better place to look than in video that's been on fire for the last several years?
- [31:44]
Edward Harrison
Exactly.
- [31:45]
Joe Weisenthal
Not to mention the ecosystem around it.
- [31:47]
Edward Harrison
So, you know, people make up narratives. You know, when things happen, they say, you know, all of these different things that are happening. Let's pin it on this one thing.
- [31:57]
Joe Weisenthal
Right.
- [31:57]
Edward Harrison
We can't say for sure one way or the other, but what we do know now is that the move that we had after in video and after the jobs report is now back to where it was before. After that 24 hours.
- [32:11]
Joe Weisenthal
Yeah.
- [32:12]
Edward Harrison
And bitcoin is, is, is up off its lows. I mean, it got as low as below 81,000.
- [32:18]
Joe Weisenthal
Yeah, 80. We crack 81,000. And people said, oh man, we're going down to the mid-70s. We'll be back in the mid-60s before you know it. And the fact is that could still happen. Right, and how concerned should we be about a season that's supposed to bring cheer to Wall street being dampened by this crypto market?
- [32:36]
Edward Harrison
Yeah, I think that the concern is definitely still there that we had these crypto treasury companies that are actually borrowing money in order to get into bitcoin.
- [32:48]
Joe Weisenthal
Mike Shaylor's strategy in particular got bit miner now with. That's Tom Lee, he's doing the same thing with Ether. So are these the most at risk companies tied to crypto?
- [33:01]
Edward Harrison
Yeah, I mean, because you're looking at a volatile asset and then you're looking at leverage in that asset. And we know that when those two mix, if the asset drops, then there are margin calls and as. And it's not just like mom and pop margin calls. We're talking about, you know, large institutional buyers and sellers, and they'll have to sell into the market and where that hits the regular market, you know, the NASDAQ in particular is where they have other assets because they're not all only in bitcoin. Now, Bitcoin as of 2000, 20, 24 with the Bitcoin ETF.
- [33:39]
Joe Weisenthal
Right.
- [33:40]
Edward Harrison
And you know, stablecoin from the genius act, you know, there's a nexus between stocks and bitcoin.
- [33:49]
Joe Weisenthal
This is really something as opposed to that decentralized hedge. Now it trades with the Nasdaq. Apparently it trades like in video, which is interesting. Is that because of the institutionalized nature of bitcoin now what's the ETF effect? Because I keep hearing, you know, retail bros are running the market. What are, what are the ETFs and the hedge funds doing?
- [34:09]
Edward Harrison
Yeah, well you know the 30 day correlation between Bitcoin and the Nasdaq is at the highest since 2022.
- [34:16]
Joe Weisenthal
Look at that.
- [34:17]
Edward Harrison
And if you look at the correlation pre2020, that's when we had the stimulus check rally. It was like back and forth between positive and negative. Now it's mostly positive between the NASDAQ and Bitcoin. And so you know, because of that you can think that people who are going into bitcoin are also going into other risk assets in the same way. So that correlation means that there's also going to be negativity when bitcoin sells off.
- [34:49]
Joe Weisenthal
When you talk about retail investors as well though, and the so called wealth effect, think about the people who bought into bitcoin who went through, they, they got in their Fidelity account, they were going to be really responsible about it. Institutionalized. They told me this thing is on fire. The best you buy in at $120,000 or whatever the heck the peak was here. And all you know, is losses. That's a lot of people even who bought just after the election. All they know about crypto is losses. That's the kind of experience for a young investor that kick them out of the market for life.
- [35:21]
Edward Harrison
The thing is, is that if you think back to a term that was used during the stimulus check rally. Yeah, diamond hands.
- [35:29]
Joe Weisenthal
Yes, right.
- [35:29]
Edward Harrison
Yes, total. I think that people are going to be saying you have to have diamond hands.
- [35:33]
Joe Weisenthal
So it's time to hodl again.
- [35:35]
Edward Harrison
Exactly.
- [35:35]
Joe Weisenthal
Wow.
- [35:36]
Edward Harrison
So you know, just like with the meme stocks, you need to like see it through. I think people are going to say the same thing about bitcoin.
- [35:43]
Joe Weisenthal
That's why you've got a bit under it now.
- [35:45]
Edward Harrison
Thomas Lee is talking about 200,000 by.
- [35:48]
Joe Weisenthal
The end of January.
- [35:49]
Edward Harrison
Exactly.
- [35:49]
Joe Weisenthal
So he would says a million dollars by what, 20, 30 or something like that. We can't seem to keep this thing above 100 grand.
- [35:57]
Edward Harrison
So really you've got to have some seriously negative information from the US economy in order to shake the fervor for riskier assets. And I don't think that that that negative Information is there despite what Stephen Myron was saying.
- [36:12]
Joe Weisenthal
Right.
- [36:13]
Edward Harrison
I think that the US economy is still doing well and that, you know, because of, of the, the stimulus that's coming to the US in 2026 and because of AI, we should expect the US economy to continue to do well. And that will be very positive not only for stocks but also for bitcoin in that time frame.
- [36:34]
Joe Weisenthal
Now, the Trump impact on bitcoin was very real coming off the election. You just have to look at where we were. I think it was about 67,000 before Donald Trump was elected. And this was going to be the new golden age. Right. This is America's crypto age. And I wonder to what extent if any politics is playing into this. You can't tell that now, right? This is the unquantifiable.
- [36:55]
Edward Harrison
It's the unquantifiable. I would say that it's a double edged sword because obviously as soon as you make crypto available to everyone, when assets go up, crypto will go up more in concert with those assets than it would otherwise. Because now it's not just crypto bros who are in the market. It's every Tom, Dick and Harry is out there and they that the interconnection creates the potential for Bitcoin to be infected by normal markets and vice versa. And I think we're seeing the reverse right now.
- [37:31]
Joe Weisenthal
Wow, this is really something. I guess some shorts made money over the past couple of days here. Of course now they're all covering it. Is this nothing more you're going to tell me when I come in on Monday, when we're back in the tank? This is nothing more than a short squeeze today.
- [37:44]
Edward Harrison
The real question I think is with all this data that we have a backlog, what happens between now and Friday, the end of Friday, because you know, we could close down, we just don't know. There's so much volatility associated with the fact that we're getting these reports from September at the same time that we're getting coincident data like we did yesterday with jobless claims, etc. It could be a short squeeze, we just don't know. Because until that backlog of data is run through and we get a firm understanding of where the US economy is and also I would say the holiday shopping season will play into that.
- [38:24]
Joe Weisenthal
Yes. Right.
- [38:25]
Edward Harrison
Then we won't really know, you know, what the macro trend in the market markets is.
- [38:31]
Joe Weisenthal
This is a noisy place right now. In our remaining minute then, let's fast forward to next Friday, Black Friday. We're going to wake up and see all these funny local news reporters in their coats and hats standing in front of Best Buy where no one is actually shopping. Will that be the next leg in the market? If these numbers are strong, do we actually care about holiday shopping the way we used to?
- [38:52]
Edward Harrison
I think we do because number one, if you open your inbox, you've got gotten tons of early Black Friday sales already to, you know, given the tariffs, it takes on special meaning for retailers. And then the final thing is, is that the Fed is going to cut. We're pricing in about 70% chance of a cut now. It was before John Williams, the president of the New York Fed, spoke earlier today. More like 30%. So we're still in that range where it could be a cut or no cut. And I think that the retail data will be the last piece of really big data they'll need. If it's bad, yeah, the Fed might actually go for a cut.
- [39:35]
Joe Weisenthal
So pay attention to those Adobe numbers on Black Friday. It sounds like Edward Harrison. Where in the world are you going to hear an interview like that? Other than Bloomberg, we'd be fired if we did this anywhere else. Edward, thank you so much. Great to see you as always. I'll shake your hand on camera. The Everything Risk newsletter. Beware the stories that try to ascribe a daily move in the market to a single point. I think that's what we learned today on Bloomberg. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcasts. And you can find us live every Weekday from Washington D.C. at Noontime Eastern@Bloomberg.com Pro. Drivers live for race day, but for small business owners, every day is race day. That's why going pro with Lenovo Pro matters one on one advice. IT solutions and customized hardware powered by Intel Core Ultra processors. Keep your business on the right track. Business goes pro with Lenovo Pro Sign up for free@lenovo.com Pro.
- [40:42]
Michelle Fox
Amazon five Star Theater presents real customer reviews performed by a real serious improv podcaster. Tonight's review Spatula for the Stars. When I'm dead and civilization eventually collapses, this spatula will remain. It will be the only rune uncovered.
- [40:59]
Meghan O'Sullivan
By some unknown species of the future.
- [41:02]
Michelle Fox
Upon which they base their assumptions of our existence.
- [41:05]
Joe Weisenthal
Eggs they were positive it these extinct.
- [41:09]
Jeannie S. Zaino
People like to eat their eggs and this was their primary tool for cooking them. Let us teleport and put this device.
- [41:18]
Joe Weisenthal
In the Milky Way exhibit.
- [41:20]
Michelle Fox
5 stars Zachary, find your perfect gift this holiday on Amazon.