Loading summary
Transcript78 lines
- [00:01]
IBM AI Representative
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM,
- [00:33]
Bloomberg Podcast Host
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
Thank you for joining us here on Bloomberg TV and radio. To think that there are still yellow cake manufacturing facilities in Iran to hit is quite remarkable as both sides continue lobbing missiles here, even though the President has extended the ultimatum. It was big news last evening as we came to air on the late addition of balance of power an additional 10 days. This came about on Truth Social, the President saying that things are going very well, talks going very well with Tehran and therefore the extension. In fact, he put his own voice to this in an interview on Fox News last evening. The decision to go for 10 even though Iran didn't even ask for that much of a timeline, according to the President. Here's what he said.
- [01:36]
Ivo Daalder
I gave them a 10 day period. They asked for seven. You're going to say, oh Trump's a terrible negotiator.
- [01:44]
Joe Weisenthal
They asked for seven and I said
- [01:46]
Ivo Daalder
I'm going to give you 10 because
- [01:48]
Joe Weisenthal
they gave me ships. We talked about the eight chips, you
- [01:51]
Ivo Daalder
know, the President that I talked about the other day. But they asked for seven and I gave them 10. You got 10 days. And they were very thankful about that.
- [02:00]
Joe Weisenthal
They have been thankful. But the market, not so much. As we just heard from Charlie, each attempt the President has made here to soothe markets, to lower the temperature, to extend the ultimatum, as we've already seen a couple of times now, have gone over pretty well. Markets are not responding that way this time as we know this will be underway for at least another 10 days. And when you look at the price of oil here, it's not reassuring. In New York, WTI selling for 9,870. Now we're up almost four and a half percent, getting closer to $100 a barrel for West Texas Brent crude $111 right now up 3%, the Vix approaching 30. And of course you know the risk off mood for stocks with a 10 year now yielding 44130 year at 495 and a market that's not in a good mood. NASDAQ in correction territory, as Charlie Pellet told us. And the s and P500 is back below the 200 day right where we last Friday when the president again attempted to sue the markets and it worked that time. It's feeling different right now as Donald Trump speaks to farmers on the South Lawn. We bring you to the north lawn for a conversation with Bloomberg White House correspondent Courtney Subramanian, who's following all of these storylines. And Courtney, we welcome you back to Balance of Power. It's great to have you here on a Friday. The president is going to be speaking again a bit later. He's got an appointment in Miami to be speaking before an investment conference. But is this it? Investors are looking for more tangible information as we go into another weekend of uncertainty. What are we hearing from the administration?
- [03:36]
Courtney Subramanian
Yeah, the president continues to strike this very positive tone about the talks. Right. He keeps saying talks are going very well, which is why he has agreed to extend the deadline and push it by 10 days. This, of course, the big question is, you know, is this him actually, you know, allowing time for the talks to continue or is he just buying time to amass more troops in the in the region before a potential ground invasion or should he decide to take over Kharg island, which of course is important to Iran's oil exports. So there is a lot of uncertainty. And as you and I both know, the president likes to make these decisions, these big military decisions on the weekend. He is headed to Miami, as you said. So we should hear from him later and hopefully get a bit more about what he's thinking about doing this weekend.
- [04:31]
Joe Weisenthal
Well, certainly we're going to be all ears and I suspect he could talk to reporters, including yourself, when he leaves a little bit later on to go to Miami. Courtney, it's been interesting watching this. Of course, we remember what happened after Liberation Day, but even just in the last week, it was a week ago today when he dropped the 48 hour ultimatum, right. He was going to obliterate the company's power plants. Then of course, markets freaked out and the president on Monday issued a new five day timeline that pulled everybody back from the ledge. We felt better about things. Now we got the 10 day extension. Since that does not seem to be soothing markets, do you suspect we might hear from the president again with more calming words when he leaves the White House later on or in a truth, social Post. You know how concerned he's been about these markets lately, with a lot of worry on Wall Street.
- [05:22]
Courtney Subramanian
I think that's right. I think we should hear from him either before he leaves the White House today or before, you know, he may speak on the plane on the way to Miami this evening. I'm sure he'll address the war later tonight in his remarks in Miami as well. But as you again, as you and I both know, he is watching very closely and they are projecting just the most optimistic attitude about these talks, even though both sides remain pretty far apart. We know that Iran rejected the 15 point proposal that the US put forth through intermediaries in Pakistan and they put forth their own demands, five conditions that of course, we don't think the US Would agree to, which includes sovereignty over the Strait of Hormuz. So again, it's, it's unclear exactly how these two can meet when they remain so far apart. But I'm sure we'll hear from the president later today about, you know, his efforts to again try and soothe those markets as we head into the weekend.
- [06:30]
Joe Weisenthal
Just lastly, Courtney, we just ran a headline, the US Signaling to allies, no immediate plans for an Iran invasion. And we saw a report today in the Wall Street Journal that the Pentagon is looking at considering sending up to 10,000 additional ground troops to the Middle East. Is the White House acknowledging or denying that?
- [06:49]
Courtney Subramanian
You know, they continue to say publicly that this is a decision that rests with the president alone. But we do know, I know from speaking to, you know, some of the president's administration officials that he, he wants options. He wants to, you know, be able to have the ability to, to move on a ground invasion if that's something he decides to do. And so they are, they are weighing all their options and that includes deploying thousands of troops to the region. I think we'll continue to see that.
- [07:21]
Joe Weisenthal
Courtney Subramanian live at the White House. It's always a pleasure to have you, Courtney. We appreciate it very much. Reporting for Bloomberg at 1600 Pennsylvania Avenue, want to add the voice of Ivo Daalder. I was delighted to hear that the former ambassador to NATO was joining. This brings us back to the Obama administration, now senior fellow at the Harvard Belfer Center. Mr. Ambassador, welcome back to Bloomberg TV and Radio. I'm deeply curious to hear your thoughts today as the president drops this additional 10 days on the ultimatum. Do you think this is an opportunity to let talks breathe or to actually prompt them to begin?
- [07:59]
Ivo Daalder
Yes and yes. Also on putting more escalation options into the, into the Hopper, the problem here seems to be that the President is kind of losing the thread about what it is that we're trying to achieve here. Why did we go to war in the first place? All the focus is now on opening up the Strait of Hormuz. Of course, the Strait of Hormuz was open on February 28 when the bombing started. It was a consequence of the bombing. It was a foreseeable consequence of the bombing. But somehow the President and his advisors didn't do the planning and didn't take into account the need to ensure that the strait was going to be open. So we're in a new ballgame, and we're trying to figure out a way. The President is trying to figure out a way to get out of it, and it is through some negotiated solution. Because other than occupying Iran and taking over the government and having a government that is more conducive to American persuasion, it's got to be a deal. Some deal has to be struck in which Iran agrees to no longer threaten shipping through the strait. And right now, the table seems to be turned to some extent where Iran holds, to use the President's favorite phrase, the cards. Iran is the one that is keeping the strait closed. It is opening it up for those who are willing to pay it sufficient amount of money or its friends, but it's keeping the strait closed to those it doesn't like. And the President is running out of options to figure out how to do this militarily threatening, in my view, in order to see if we can get a deal that at least achieves some of the objectives that were set when we started the bombing campaign back four weeks ago now?
- [09:47]
Joe Weisenthal
Yeah, but this isn't a surprise, though, right? Ambassador, isn't this in every. Every model that the Pentagon has ever had about a potential conflict with Iran? The first thing they would do is close the strait. Everyone in the energy market knew this, right?
- [10:01]
Ivo Daalder
Yeah. It's not a surprise, but apparently was a surprise for the President of the United States who decided to engage in a second bombing campaign. Remember, he already did so in June of 20 when he said he obliterated the nuclear program. He did so without paying attention. He was warned about this. I think it's reporting in the New York Times by the Chairman of Joint Chiefs of Staff, Dan Kaine, who said that this is a possibility. He said, oh, I'm not worried about that. Our military, your military, we're so good, we can take care of it. What we see here is a president, and this happens to other presidents. It happened To George W. Bush, after Afghanistan, it's happened before. We, they become enamored with the military tool. Our military is extraordinary. It's the best military in the world. It can do things that no other military can do, but it can't do everything through military force. And we know that from Afghanistan, we know that from Vietnam, we know it from Iraq. But somehow because Venezuela, the bombing campaign against Iran in June went so well, the President assumed that we could just change the regime with a bit of bombing and things would be fine. Well, turned out that as as a military strategist like to say, the enemy has a vote. And in this case the vote was to close the straight to Hormuz and they didn't prepare for it.
- [11:21]
Joe Weisenthal
The enemy has a vote and Iran is not Venezuela. Ambassador, I want to ask you about NATO, its potential involvement or lack thereof. This is something the President certainly been talking about a lot as recently as yesterday in the Cabinet meeting. Listen to what Donald Trump said. One thing, we're very disappointed, I'll say it publicly, we're very disappointed with NATO
- [11:41]
Ivo Daalder
because NATO has done absolutely nothing.
- [11:43]
Joe Weisenthal
And I've always said 25 years ago, I mean, I was somebody that wasn't
- [11:47]
Ivo Daalder
a politician, but I was always involved in politics and I understood politics.
- [11:52]
Joe Weisenthal
I said 25 years ago that NATO is a paper tiger, but more importantly
- [11:57]
Congressman Troy Downing
that we'll come to their rescue, but
- [11:59]
Joe Weisenthal
they will never come to ours. The President has called NATO a paper tiger there. He has called NATO cowards for not joining him in the strait. NATO is talking as well, though. We just heard from the Chancellor of Germany again. Chancellor Mayor is saying the US And Israel have no strategy in the war on Iran and says German contribution in resolving the crisis is an option. Interestingly, here as Marco Rubio urges maximum partner contributions from G7 nations over Iran. Distill this for US Ambassador to the point where the Chancellor is compelled to speak like this publicly. What is the conversation between the White House and our NATO allies right now?
- [12:43]
Ivo Daalder
Well, I'm not sure there is much of a conversation other than perhaps Marco Rubio talking to his G7 counterparts in Paris. I mean, let me make two points. Number one, 25 years ago, the United States was attacked by Al Qaeda. And for the first and only time, NATO at the behest of not of the United States but of its allies, invoked Article 5, which is the collective defense provision of the North Atlantic Treaty, saying that an armed attack against one shall be regarded as an armed attack against all. Not only did they invoke Article 5, they deployed massive amounts tens of thousands of troops to Afghanistan. Our allies lost well over a thousand troops in a war. So for the President of the United States to say today that NATO doesn't do anything for the United States, that NATO is never there for us, when in fact, the 25 years he invokes was the timeframe in which NATO did that, is frankly obscene. And it is regarded by Europeans as obscene because they lost troops to defend the United States and the United States security interest, not because they thought it was important for their security, but they thought it was important for America's security. And that's what allies do. Number two, NATO is a defensive alliance. It responds to an armed attack on it. There is no armed attack on NATO. The only attack that occurred was an Israeli US Attack on Iran, which many, in fact, I would say most Europeans regard as illegal under international law, unnecessary given that the diplomacy was still a possibility and reckless in ignoring the outcome that could have happened. And I think Chancellor Merz is expressing that. So under those circumstances, to say that this was, quote, a test for NATO, or second, that NATO is a paper tiger, is never willing to do anything, is frankly beside the point. It's not going to work and it's not going to lead NATO countries to deploy the forces. Now, if hostilities have ended, there probably is going to be a European contribution to helping to keep the strait open or even to open it. After all, NATO, European countries have capabilities the United States no longer longer has, like minesweepers. And finally, just to point out, NATO bases in Germany, in other countries, are being used every single day to facilitate the ability of the United States to conduct this war. Without Naito, without Europe, the United States couldn't be doing what it's doing today.
- [15:15]
Joe Weisenthal
Well, what would happen if every NATO nation with the ship showed up when the President initially asked them to in advance of, of the strikes? Would that have made the difference? The President says you need volume, you need scale to reopen the strait. If we showed up with all of our NATO allies, would the strait be open? Ambassador?
- [15:34]
Ivo Daalder
Well, if we hadn't bombed, the strait would be open. And I think that's the fundamental point. The strait was open, it was closed because of the bombing. I think if there had been consultations with the European nations, as indeed there was prior to the Iraq war, deep consultations. Although Europe was divided, NATO was divided, that we might have come up with a strategy to say how do we put maximum pressure on Iran to achieve what we want to achieve, which is an Iran that does not have nuclear weapons, which by the way it doesn't. And it hasn't had nuclear weapons, in part because of negotiations, in part because of sanctions, in part because of pressure, but certainly because of diplomacy that it reduces its ballistic missile inventory and that it cuts its support for proxies. We could have had a joint strategy. That's not what the president of the United States did. He worked it out with the Israeli government. He ignored pleas and from the Gulf allies who said, do not do this because it is going to affect our security, as indeed it has. And he failed to even talk to our major allies, both in Asia and in Europe. So as a result, the Europeans and the Asian allies said we're suffering the consequences for a decision we had no input in, and now you're asking us to solve it.
- [16:48]
Joe Weisenthal
With the diplomat's perspective. Ivo Daalder, the former US Ambassador to NATO and the Obama administration Senior fellow, Harvard Belfer Center Mr. Ambassador, it's always great to compare notes. We appreciate your insights. Stay with us. On balance of power. We'll have much more coming up after this.
- [17:06]
IBM AI Representative
So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM.
- [17:37]
Bloomberg Podcast Host
You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay Play and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [17:54]
Joe Weisenthal
Thank you for joining us on the Friday edition here on Bloomberg TV and Radio with our eyes on Iran and a market that's having more fits today. Not unlike the same situation we were in a week ago today. Remembering that is when the president dropped the ultimatum. It was Friday, the 48 hour ultimatum and he climbed back knowing that the markets were in a bit of a tizzy going into that weekend, saying we're getting very close to meeting our objectives as we consider winding down. Remember winding down our great military efforts in the Middle east with respect to the terrorist regime of Iran. We had the 48 hour ultimatum became a 5 day ultimatum. Now a 10 day ultimatum on top of that. And each attempt to climb down corresponded with an uptick in the market. Market investors were reassured. Call it the Trump put the taco, whatever you want to say. It's been different this time, however, with a market that seems to be very reluctant to go long into the weekend, despite any rhetoric that is coming from the White House. In fact, we were in the throes of a deep sell off when we spoke to David Westin right at this time last week. Investors looking for a reprieve may not be getting the same treatment today as David joins us, of course, the host of Bloomberg Wall Street Week who's been through a couple of these before. And David, it's great to you again. I think I gave you the the same awful doom and gloom set up when we spoke last week with now a Nasdaq in correction and S&P 500 below the 200 day. We've got a Vix approaching 30 risk off 4, 42 on the 10 year, 4 9, 6 on the 30. Wall Street's not buying this most recent attempt to step down. And I'm wondering what you think about this reaction.
- [19:35]
David Westin
Well, the media reaction is just exactly what you said, which is there's just so many times you can say we're going to back off, we're going to back off before they don't believe it. But I think we have to also, as I'm sure many on Wall street are thinking it could be real, it could be that you really are negotiating, it may actually work out. I mean, they're just too wide a range of possibilities here. And we always want to figure out what's going to happen immediately. And I certainly don't know right now. I don't see a lot of reason for hope of anything getting resolved very quickly. But I could be wrong. I've been wrong in the past. I hope I'm wrong this time.
- [20:08]
Joe Weisenthal
Well, boy, that's for sure. The scenario is becoming pretty easy to see, though, as soon as oil goes up, stocks go down and the energy market really seems to be keying off everything that's happening in the Strait of Hormuz here, David. It's almost like a slow motion movie. We were talking about this very same issue last week. Any attempts that we've made to reopen the Strait diplomatically have not helped. And even doing strafing runs and bombing that area has not helped. NATO is obviously, obviously not joining us in this endeavor. And now Iran wants to start charging for passage. So the gates remain closed effectively.
- [20:38]
David Westin
And you really, Joe, taking us beautifully to what we're doing in part on Wall street week tonight. We're going to talk to Nick Burns, the former US Ambassador of China, about that. Remember that summit that was supposed to happen right about now? They got post May about where China is and all this. But also we went beyond the oil and gas markets you mentioned. They certainly have been roiled by what's happened in Iran. But it's not just them. There's something else being rolled, and that is fertilizer at a critical moment. April is the critical moment in the Northern hemisphere for planting. And we found a couple of people who really know fertilizer well. One whose title is vice president of fertilizer, believe it or not, for Stonex out in the middle, Middle West. His name is Josh Linville, who really knows it backwards and forward. And also our new contributor, special contributor, Christia Freeland, who, it turns out, knows a lot about fertilizer. This is part of what they had to tell us.
- [21:25]
Joe Weisenthal
Everybody is talking about the oil and the gas and everything else that flows through there. Few people know urea being the most commonly traded nitrogen product of the world. About a third of the world's product flows through that Strait of Hormuz. When you look at the top 10
- [21:38]
Congressman Troy Downing
list of global urea exporters, three of
- [21:41]
Joe Weisenthal
them sit behind the Strait of Hormuz. That's Iran, that's Qatar, and that's Saudi Arabia.
- [21:45]
Congressman Troy Downing
Those three nations represent three of the
- [21:48]
Joe Weisenthal
10 largest anhydrous exporting nations.
- [21:50]
Courtney Subramanian
Farmers are very affected by the price of fertilizer. Fertilizer accounts for, you know, about 25% of the costs for a farmer. And this is happening just at seeding time, as they're getting ready to plant their crops. And it's happening at a time when farmers have been really beaten up. You know, the trade wars have been really hard for farmers. For American farmers, I should say. Covid was really, really hard for farmers. And Russia's invasion of Ukraine and the economic impact was really hard for farmers. So they've been having a hard time. And then on top of that, you see the price of fuel, the price of fertilizer skyrocket at a time when you're just, you know, going into your shop, looking at your seed drill, checking that everything works, getting ready to get out in the fields.
- [22:46]
David Westin
So, Joe, that was Christopher Freeland there, you heard, and we know her as the former deputy prime minister of Canada, the former finance minister of Canada. But what I didn't necessarily know is she says herself she's a farmer's daughter. She comes from Alberta. Her father is back on the family farm out there. So she knows fertilizer and knows farming backwards and forwards. And she said one of the first thoughts she had when she heard about this attack on Iran was, oh my goodness, what's going to happen to the farmers? So she's got that very as we as you know, as we're seeing President Trump with a look like a golden tractor right at the White House today, reaching out to farmers, saying, I don't
- [23:20]
Joe Weisenthal
know how many farmers are using golden tractors, but yeah, David, your timing is impeccable. The South Lawn is full of farmers wearing cowboy hats right now. There's indeed a golden tractor and a red, white and blue one. And the president was talking to them about how much he has done for farmers. He said, I gave you $12 billion and I'm wondering if there's going to be another subsidy coming here. We're talking about Farm Bill again and obviously an industry that is maybe more impacted than any by what's happening in the strait.
- [23:46]
David Westin
Well, and you remember Joe, he did this the first time around, too, in the first administration. He had a big subsidy for farmers because of what happened with China. And we went out, as you call to Iowa and talk to the farmers and said, well, that's okay, but we'd rather actually earn it ourselves. We don't love these subsidies. The one thing in the markets I will say is I think I want to go long on sprague, gold, rust, oleum. I think you could make a lot of money on that right now because we're going to have to spray everything gold. I think from now on, if you
- [24:11]
Joe Weisenthal
want to get it in the White House, you got to see what he's doing to the Treaty Room. David, I know you know the White House pretty well. That is another report we haven't even touched yet. The Nasdaq 100 extending its decline to 1.6%. We're now at session lows here, S&P 500, down 85, little more than 1%. Not a great situation. And you wonder, David, how resilient, how elastic this market might be when good news arrives. You just said, look, this could be real. If the president shows up in 10 or fewer days here and says we've got a deal in Iran, what would this market look like?
- [24:44]
David Westin
Most people on the street say that it would rebound really quickly, including oil would come down quite quickly as well. Having said that, you know so well, Joe, business is based on prediction and having some certainty about what's going on. I think there is a cost being paid for all the ups and downs, even if it comes out all right. In the end, and at this point, we don't see that, but it could. Even if it does, there's a price to be paid. And one of the questions we're going to be taking a look at is what does it do, for example, to the US Dollar as a reserve currency if we really push this to the edge and we can do longer term damage that it may be difficult to come back out of?
- [25:19]
Joe Weisenthal
Fascinating stuff. That's why you want to stick around. After the late edition of Balance of Power, it's Wall Street Week with David Westin, 6pm Wall street time here on Bloomberg TV and radio. Great to compare notes with you always, David. Thank you so much and enjoy the weekend. Let's assemble the panel and get their take on all of this because the economic impact of this war is severe, even though it could be immediately reversed. As we just established again with David Bloomberg Politics contributors Jeannie Shan Zaino, Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ashe center and Rick Davis, Republican strategist and partner at Stone Court Capital, with us right now. Gina, you saw those farmers out there listening to the president when they go back home. It's a grim reality as we just established. Not only are they preparing for planting season here, they can barely afford to fill the tank. And now fertilizer is going to be prohibitively expensive. And guess what, all this comes through at the grocery store in the end, doesn't it?
- [26:17]
Bloomberg Podcast Host
That's right. You know, I heard somebody who is an expert on these things say that there's eight months out of the year that if you're going to close the straight, that you would do that. And the United States chose the exact wrong time to do that because of course, it is planting season. So you've got the fertilizer, you've got the oil problems. And this is why, of course, Donald Trump is in big trouble politically. He's under 40% in three of the latest polls, making him not just unpopular, but the most unpopular president in the modern era at this point in his time in office. And to make matters worse, I'm sure for Donald Trump because he always likes to compare himself to Joe Biden, Joe Biden's numbers on the economy, his approval for the economy were better than Donald Trump. And that's a real problem for Donald Trump because there's one thing people have always trusted about him is he's a businessman. He knows how to manage the economy. He knows what he is doing. And from farmers to people across the country, they are feeling now like Their economic situation under this president is worse. That is setting up some very bad political realities for Donald Trump and the gop. And of course, I will let my dear friend Rick Davis talk about consumer sentiment because I wouldn't dare step on it. But that is very bad numbers for them as well.
- [27:38]
Joe Weisenthal
Well, yeah, lower than expected today. That final number is ugly. And I know that's your favorite political poll, Rick, when you look at you, Mitch, the president today just told farmers, by the way, he's going to be asking Congress to pass a new farm bill with more extensive farm relief. Will there be any appetite for that in this environment? You know, think about the environment that they're going into to talk about that. You know, with a reconciliation bill now, almost a certainty if you want to actually fund ICE and $200 billion supplemental that may get tacked onto that debt for the military. And now you're talking about, you know, $12 billion for farmers. And, and, and I mean, you're talking now about like almost a $300 billion reconciliation or supplemental bill. I mean, like at a time when we're running the highest national debt in history, that our deficits every year continue to climb and it is impacting our, our capacity to function as a country. When, when you start spending this much on debt service, you have to spend less on national security. It's just a certainty. And so I think that, I think it's going to be a very difficult discussion, especially into an election year where, you know, Congress typically saves up some capital to spend so that they can have a good attitude going into election. But I think the barrel is going to be dry. I think it's going to be very difficult to get these big spending bills through the Congress this year with that $200 billion supplemental request still looming. And we don't know that that will be the number. That's the report. Jeannie. The Washington Post today in our remaining moments as the military has fired more than 850 Tomahawk cruise missiles in four weeks of war and they need to buy a lot more. We know this story. They cost three and a half million dollars each, at least the more recent versions. Is that supplemental going to run into headwinds?
- [29:35]
Bloomberg Podcast Host
Oh, it's going to run into big headwinds. And Rick just went through some of the numbers here as again, our debt reaches the highest in American history. And of course, what is the president saying politically at that very strange cabinet meeting yesterday? He's saying, I thought things were going to be worse. This isn't so bad. It's not as severe as I thought. Politically, he is more out of touch than Joe Biden sounded. And that's saying a lot because Joe Biden sounded out of touch even more than George Bush with his grocery, you know, grocery not understanding how we price groceries.
- [30:10]
Joe Weisenthal
So the grocery scanner and the price of a gallon of milk. The great panel, Rick Davis and Jeannie Shan Zaino, let's meet back here on the late edition of Balance of Power right here on Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this.
- [30:28]
IBM AI Representative
So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM.
- [30:59]
Bloomberg Podcast Host
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 11:30.
- [31:17]
Joe Weisenthal
The president might be speaking again in a short time. He's leaving the White House, having spoken to farmers on the South Lawn on He's now headed out of town to Miami where he's going to be speaking at an investment conference a bit later on today. He's scheduled to start talking after the close, but we could get some driveway remarks from the president. And of course, we'll be listening as always to Jeff, who checked in watching us today on Bloomberg TV with the big question that we get from a lot of listeners and viewers. Those of you who see us on Balance of Power on television or on YouTube, I can tell you it's real. The question is Rick Davis dog that sits on the leather chair behind him real or is it fake? It's not AI and it's no, that's real. Bendy's a celebrity with our eyes on Capitol Hill today, it looks like a deal to fund DHS that everyone woke up feeling very optimistic about may have just been dashed in the House. The Senate was up almost all night. 2:30 in the morning. Eric Wasson was there as they passed the bill on a voice vote to fund DHS in its entirety. Except for ice. The plan was Republicans would come back and do that through reconciliation later on in the year, even though ICE has plenty of money. But it would get DHS open again, get TSA agents paid past the Senate. As I said in the middle of the night, it took a lot of cajoling day long, well into the wee hour meetings in John Thune's office and the whole thing just crashed on the rocks in the House with Republican leaders saying no, and mainly the Freedom Caucus no, not going to pass a vote in this case a bill that does not fund ice. And so we have a stopgap here. And the fact of the matter is any bill that would have been different from the Senate would have been a problem because senators have already left town. So it looks like this is going to drag on for some time. Eric Wasson is with us now, Bloomberg Congressional Correspondent with the very latest on this. Eric, I hope you got some sleep here because it looks like we're far from done. Is there a chance this could be rescued today or is it all up in smoke?
- [33:19]
Eric Wasson
There is a chance. It's a very fluid situation. You know, Speaker Mike Johnson is on a call with his members. Certainly the Freedom Caucus wants this eight week stopgap bill that would pay, would fund all of dhs. It's dead on arrival in the Senate. Chuck Schumer just issued a statement saying that House Democrats wouldn't go for it, but it's not really clear that the House could even pass an 8 week cr. Moderates in Johnson's party are pushing back on the call. So this is going to be potentially an embarrassing attempt on his part. He had scheduled a press conference at 1pm to announce this plan that was put off and we were all told to come back later. So it's a very fluid situation. Certainly if they stick with this plan, the shutdown would continue. I will note for air travelers, the president did issue or is about to issue an executive order paying TSA agents. So I think, you know, no matter what happens with the House and Senate this weekend, you know, the airline situation should abate as CSA agents are starting to get paid. It's not a fund to find about $10 billion. It probably won't pay the full year, but it could last for several months to pay those agents.
- [34:22]
Joe Weisenthal
I'm really glad you mentioned that, Eric. We're going to talk to Congressman Troy Downing in just a moment. But to clarify, the president did late yesterday drop this executive order to pay TSA agents. So even if the agency stays closed, if senators don't come running back to town or if there isn't A different vote in the House today. Agents know that checks are coming. And would that be retroactive?
- [34:44]
Eric Wasson
I believe it would be retroactive. It should stop the staffing shortages, the sickouts and other problems that have caused these massive three or four hour lines. But there are other elements of dhs, you know, whether you're in the Secretary of Homeland Security's office, whether you're working on other projects related to, to Border Patrol, you know, that are not actually patrolling the border but supporting them, those guys are not being paid and it's unclear if there's a legal authority to pay them through an executive order. So I think there's certainly some motivation for moderate Republicans and certainly there's a motivation for Senate Republicans just to in the middle of the night, agree to fund most of these agencies. And again, the thing that passed the Senate funds everything except ICE and Border Patrol. And those could be backfilled through a special budget process later.
- [35:27]
Joe Weisenthal
Boy, Eric, you've been great. I guess we'll sleep when we die. Eric Watson reporting for Bloomberg. Throughout the night on Capitol Hill, I mentioned the gentleman from Montana. You know, it's one thing if you're a congressman from Virginia or Maryland or even New York. If you're a congressman from Montana, you don't have any choice but to get on an airplane. And Troy Downing will tell you all about it. He's the Republican representing Montana's 2nd District, a U.S. air Force veteran who was deployed twice in Afghanistan. Congressman, it's great to see you back on Bloomberg and we appreciate the time today. I don't know how you're feeling about getting to the airport at this point, but what do you think about everything that has transpired in the House today? Would you have voted to approve that Senate bill if it got to the House?
- [36:10]
Congressman Troy Downing
Well, let's just go back to the beginning of this. I mean, we've. What's happened is politics has taken the place of policies. And obviously, when we started out, we had the great work that were done in appropriations on both the House and Senate side. We had a bipartisan, bicameral bill to actually get our 12th appropriation bill through. And then the Democrats completely blew this up in the Senate. And we've been, what's been 42 days now that DHS has been unfunded. And it's clear that they put politics above public safety, and not just public safety, but just the welfare. Think of all those TSA agencies, agents that are now, you know, continue to go unpaid. Think of, you know, all the issues with the Coast Guard, with FEMA with everything that falls under dhs. And I'll tell you what we've done in the House is we have continued to pass a bill to fund DHS in its entirety as we got out, a committee, bipartisan and bicameral. So of course there's some heartburn about passing this.
- [37:16]
Joe Weisenthal
Okay, so can I get back to that question though? I mean, we, we're steeped in this wonky stuff every day, Congressman, and we understand the stakes here and the rhetoric that's coming from both sides. Is there a way out of this today or is everybody going home for another couple of weeks?
- [37:32]
Congressman Troy Downing
Well, what I, what I understand is going to happen now because we've had conversations about, you know, trying to get a vote on suspension on whether we could get, you know, the votes to get that through or not, whether we had to go through process. But what I understand now is there is a CR that's on the table that will be an eight week continuing resolution so that we can continue, so we can fund everything that we need to fund and give us eight weeks of, of time to actually negotiate and try to get some good policy through and hopefully cut through the politics and what we're expecting. Now, I believe if they haven't started that at some point, point today the Rules Committee is going to meet to try to get this through for this cr and I've heard it's possible that we'll vote on that as early as tonight, it may be tomorrow. But this is, this is Congress. Who knows what else might be thrown in there, but that's the current expectation.
- [38:24]
Joe Weisenthal
All right, we're going to the source here. This is really fascinating, Congressman. Is the, is the Republican conference largely or entirely on board? And, and if this passes, do we think the Senate comes back to vote on it?
- [38:38]
Congressman Troy Downing
Well, I mean the Senate is, that's a big, that's a big. Who knows. But what I'm sure, I'm hoping is that we can get everybody on board because this is critical. As I mentioned, it's become very political and not about the policy. We need to get this agency refunded for all the reasons I've already articulated. But if the Senate continues on this path, that they're willing to put the politicians ahead of the people and not actually pass this bicameral bipartisan bill that they've already agreed to. I'm not sure where we get to at this point. But we continue to pass this bill in the House as everybody's agreed to. We're going to continue trying to do this and hopefully calmer heads can prevail if we get the CR passed and have that eight weeks to negotiate a final version of this.
- [39:26]
Joe Weisenthal
Really interesting. It's a long ride to Montana, Congressman. I know you got to wait in some lines here. And I'll remind our listeners and viewers, you deployed twice in Afghanistan as, as an airman, and I'm wondering your thoughts right now. You know that first batch of Marines.
- [39:43]
Congressman Troy Downing
Go ahead, Search and rescue squadron. Sorry I stepped on you there.
- [39:46]
Joe Weisenthal
Yes, sir. No, not at all. I just say airmen, as a member of the Air Force, we've got troops on the way right now that first, as I understand it, first Marine Corps Expeditionary Unit could arrive as early as today. And others are on, on the way. There's a Wall Street Journal report out today whether it ends up being true that the Pentagon is considering calling up another 10,000 troops. As probably the only person I'll speak with today who's been deployed in harm's way. I'm just wondering where your head is on all of this, if you're worried about these men and women or if they are exactly what's needed to apply pressure at the negotiating table.
- [40:21]
Congressman Troy Downing
Well, you never take the decision to put boots on the ground lightly, and there's always concerns about that. And what I come back to in this is you've got to weigh the risks not just to our allies, not just to the, to the region, but to the United States of America and to this planet in having a terrorist Islamist regime that has access to nuclear weapons. And we needed to make sure that we completely foreclosed on their opportunity to do that and to make sure that they continue to comply and not be developing that, we needed to make sure that we were taking out their ballistic and their naval capabilities. So now move to where we're at right now. Obviously, there's been a lot that's happened since this started, and we need to find a way of opening up the port of Hormuz. And I think that we're starting to move on that line. Nobody takes sending troops into harm's way lightly. But the other part, the alternative is having a terrorist Islamist regime that has access to nuclear weapons. And whether they can send those ballistically or send them in containers or some other way, it still puts this planet at risk. And I think that we need to make sure that we completely foreclose on that opportunity for them.
- [41:39]
Joe Weisenthal
Well, most analysts have told us it will require actual people, it will require troops to get our hands on that enriched uranium that has gone missing. And apparently that is in fact, one of the objectives that the White House has here, was it a smart move for the President to give this another 10 days?
- [41:55]
Congressman Troy Downing
Well, I, as it should be because the concern is now, you know, I've heard different numbers of 60% enriched uranium and the, the ability to get that to weapons grade is, it's pretty close already. So we need to make sure we're pulling that out so that it's not used. Like I said, even if you've got completely disabled their ability to send anything ballistically, that doesn't mean something's going to be, you know, sent and harm us in a much bigger way, you know, in a shipping container or some other means. So we need to make sure that that's all accounted for and, or destroyed. But account, you know, obviously if we can get in there and pull it out so we know that they don't have access to any material, I think that's the best outcome we can, we can get to. And as the President said, as we said from the beginning, you know, the goals here is to make sure that they never have the capability of nuclear weapons. They don't have ballistic capability and they don't have naval capability. And that's that last part of the stated goals.
- [42:51]
Joe Weisenthal
Are you glad the president gave this another 10 days or should he be less forgiving?
- [42:56]
Congressman Troy Downing
Well, I, you know, I'm not going to, you know, speculate on what intel the President had access to to make that decision, but I will tell you that I have faith in this administration and doing the right thing and making sure that we prevail in our stated goals in this operation. And you don't ever want to be overzealous and put anybody in harm's way that you shouldn't. But you need to make sure that we are getting to that stated goal. And as everybody said from the beginning of this, we're, you know, this is not intended to be and we don't expect it to be a prolonged operation, but we do need to get those stated goals and I'm still confident that we can do it without this turning into a long, drawn out deal.
- [43:39]
Joe Weisenthal
He is a member of the House Financial Services Committee, small business, natural resources and an Air Force veteran. Congressman, it's good to have you back as part of our conversation. I appreciate the insights. That's Congressman Troy Downing, the Republican from Montana facing a long airplane, airplane ride home whenever this resolves and it looks like it could go in to tomorrow based on what the Congressman just told us. Fascinating again to get it from the source with Republicans in motion today in the House. It appears they will not be accepting the bill that was passed in the Senate to fund DHS with the exception of ice. And again, fluid. As Eric Watson told us, anything could change by the end of the day. And as Rick Davis predicted this hour, the House will pass that Senate bill before they leave. We don't know if that's going to happen, but right now we've got an eight week CR for dhs. It does fund ICE that apparently will get to the floor according to what the Congressman told us. Whether or not Senators come back to address it is another thing that executive order the President put forth to pay TSA agents might be the only way they get a paycheck anytime in the near term 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 there's no championship league for small business owners, but if there was, you'd be at the top of the standings. Because going pro with Lenovo Pro means you've got the winning formation. One on one advice IT solutions and customized hardware powered by Intel Core Ultra processors help you stay ahead of the competition. Business goes pro with Lenovo Pro Sign up for free@lenovo.com Pro.
- [45:30]
Courtney Subramanian
Premier Protein it's for getting after life, not just Fitness. With 30 grams of protein, 160 calories
- [45:37]
Joe Weisenthal
and no sugar added, helping people fuel their joyful lives with Premier Protein, you you can say yes to more. Whether it's crushing a big presentation at work, building an epic fort with the
- [45:47]
Courtney Subramanian
kids, or hitting the hiking trail with
- [45:48]
Bloomberg Podcast Host
friends, Premier Protein offers delicious flavors like cafe latte, chocolate, caramel, vanilla, strawberry and
- [45:55]
Joe Weisenthal
cake batter, to name a few. Find your favorite flavor at premierprotein.
- [45:59]
IBM AI Representative
Com.