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- [00:34]
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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.
- [00:57]
Michelle Jamrisko
Monday bringing a lot of news much of broke over the weekend, including the President's 180 on the Jeffrey Epstein Files as we try to get to the bottom of all of this. And we'll be talking in a moment with Wendy Benjamin so we'll bring it back to the truth. Social Post this hit on Sunday, as he said on Friday night aboard Air Force One to the fake news media. As he writes here, House Republicans should vote to release the Epstein files because he says we have nothing to hide and it's time to move on from this Democrat hoax, he writes, perpetrated by radical left lunatics in order to deflect from the great success of the Republican Party, knowing as well that only days earlier Congresswoman Lauren Boebert was in the Situation Room at the White House for a high stakes meeting with the President in which the administration tried to peel her off of the discharge petition. He was said to be playing phone tag with Nancy Mace to accomplish the same thing. He had a falling out with a dear friend and loyal politician named Marjorie Taylor Greene. You've likely heard of all to keep this from happening and so it's considered curious the President is now urging Republicans to vote for it. Ro Khanna, the Democrat on this bill, told US last week 40 to 50 Republicans could vote for it. Now we're hearing from Tom Massie. It could be closer to 100. Rick Davis, our Bloomberg Politics contributor, suggesting it could be a unanimous vote in the House, which would make it very difficult for the Senate to ignore. So what's the calculus here? And is this new investigation into Democrats purported to be in the Epstein files the smokescreen for them ever being released? It's where we start our conversation with the aforementioned Wendy Benjaminson, Bloomberg News Senior Editor who you want on that wall? She was on duty all weekend while this stuff broke. And it's great to see you. Thank you for going through the motions here. Am I getting warmer or has Donald Trump found religion on the Epstein files?
- [02:51]
Wendy Benjaminson
You know what you sort of said in the opening, it's really hard to tell with Donald Trump because he's either a bull careening into a china shop or he's playing four dimensional chess. Like, I, I don't know, it could be that he's just, he's had it up to here. He's fed up. Just go ahead and release them. Perhaps he's either, and even now I have subpar, sub paragraphs here, either he is confident that there's nothing incriminating that he did in there, or the House can say go ahead and release the files. It may not pass the Senate, he may not sign it, or the Justice Department can just say, wow, this is an ongoing investigation, I'm sorry, I can't release it. And then he would get what he wants. But that's more the four dimensional chess. Sure thing here. But yes, the shift is, is absolutely remarkable. Also, remember he took a shellacking in the elections to quote President Obama a couple of weeks ago, where Democrats swept all the elections. Then of course they caved on the shutdown. But, but he's, he's at a point where he's feeling a little bit with his back to the wall and that's, you know, when I think you have to watch for strange things to happen. Like go ahead and release the files.
- [04:07]
Michelle Jamrisko
Yeah. Also his evolution on Nick Fuentes and the writing, maybe it's not an evolution, but his, his decision to weigh in on this.
- [04:16]
Wendy Benjaminson
The funny thing about that was where his defense was. Well, he came with Kanye West. Okay.
- [04:22]
Michelle Jamrisko
When you're explaining, as they say. But it's also happening against the backdrop of some very high stakes real policy with affordability being an issue here at home.
- [04:33]
Wendy Benjaminson
Right.
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Michelle Jamrisko
The Crown Prince of Saudi Arabia about to arrive for the full flourish of a state visit tomorrow. And the question of whether we're about to go to war in Venezuela. How do you rationalize all of these extremes?
- [04:45]
Wendy Benjaminson
This is the way Donald Trump likes to operate. But it is a, just as you point out, this is a tremendous load on him. I mean, there is the Saudi visit alone should be weeks and weeks of prep for the president. The, the, the carrier group being staged off the coast of South America with who knows what going on. And remember the southcom commander quit over this A few weeks ago. So we're not really sure who's running things and how this is going. And then, and then the Epstein files and then the shutdown. And then, yes, the midterms, politically speaking, are right around the corner, even though they're a year away. But that is politically zero time. And if he doesn't seize this successfully seize this affordability message which the Democrats got right finally on last Tuesday, then, then he's looking at another shellacking next year. And so, yeah, he's, this is, this is a really tough time for him.
- [05:47]
Michelle Jamrisko
And the matter of recrafting the nation's health care system and you might need a little extra time on your hands here. What's going to happen in Venezuela? Do we have any idea? The president said at one point he had decided effectively what to do. And then a headline over the weekend that you're well aware of, that he's open to sitting down with Maduro for talks. Is this all one big military deterrent that's supposed to bring Maduro to the table?
- [06:14]
Wendy Benjaminson
Yes, I mean, I think that's the end goal is either to bring Maduro to the table or like Noriega, out of the country. Got it Way back in the old days when they got rid of.
- [06:22]
Michelle Jamrisko
So regime change is still on your list of possibilities.
- [06:25]
Wendy Benjaminson
Yeah. And you know, the US Has a long history of regime change in South America. And you know, the trouble is the Venezuelan people, I think are not entirely opposed to get. I mean, they're not opposed to getting rid of Maduro, but it's always the then what? And I think if Trump did seem to indicate last night that he was open to negotiations with Maduro, maybe it's you step down and get out of town. Maybe it's something more complicated. Again, there isn't a lot of transparency here.
- [06:53]
Michelle Jamrisko
You surely remember the fist bump heard around the world when Joe Biden went to Saudi Arabia. Jamal Khashoggi, his name was still fresh in our minds. There won't be any such criticism or skepticism when NBS rolls up the driveway tomorrow in the age of Trump, will there?
- [07:13]
Wendy Benjaminson
No, no, this is a full on, you know, I think it's not quite a state visit, but it's just shy of a full state visit. He's getting D at the White House. There is a chips deal on the table which is making some members of Congress and others nervous because some of that could end up with the Chinese. The he wants, the prince wants F35 jets. He wants to buy those, which would be a change in US Policy because the US Long standing policy has been that Israel has functional military superiority or words to that effect. So that Israel always has the strongest military in the region. They have. And not only does the US not want China to get the F35 technology, it also then would put Saudi Arabia at an not equal, but it would raise up their military capabilities vis a vis Israel. MBS is not going to sign the Abraham Accords at this point. And so that's maybe the one point of tension between them. But otherwise it's all a big deal and quite remember the Trump family has a real estate deal going in Saudi Arabia. Right.
- [08:20]
Michelle Jamrisko
Deep ties, deep ties on a lot of levels here. Wendy, it's great to see you. Thank you. I hope you actually get to rest after your very newsy weekend. When you see these headlines cross The Terminal and Bloomberg.com over the weekend, you know where they're coming from. Wendy Benjamin said, thank you. As we add the voice of experience in former Ambassador James Jeffrey, distinguished fellow at the Washington Institute for Near East Policy, former ambassador to Iraq and Turkey, former deputy national security adviser and former special assistant presidential envoy, I should say to defeat isis that was in the first Trump administration. He's a man who knows this region extremely well. And ambassador is good to have you back. You were just listening to our conversation with Wendy Benjamin. Son, NBC will be at the White House by this time tomorrow. We're going to be listening in on a bilateral lunch that will presumably include some press. How are you viewing the stakes surrounding this visit and what is in it for the United States?
- [09:17]
James Jeffrey
Thanks for having me on. The stakes are high and a great deal is in it for the United States. We were talking about four dimensional chess on the Epstein case domestically a moment ago. It's this same in the Middle East. While Saudi Arabia is a hugely important country in the region and for US Relations, this is even bigger than Saudi Arabia. It's locking in a regional security, trade and diplomatic coalition that will build on the defeat first of Daesh, the Islamic State, about seven years ago, and now the defeat of Iran, its proxy empire over the past two years to allow the region finally to enjoy peace, prosperity, political independence and allow the United States slowly to back out of the region. So lots at stake. The Saudis, like the Israelis, like the Turks, like a couple of other countries, are central to it. Trump is pushing forward on all of these fronts.
- [10:19]
Michelle Jamrisko
And what does Saudi Arabia get out of this visit?
- [10:22]
James Jeffrey
Ambassador, first of all, acknowledgement, this is almost a state visit, although technically the crown prince is the crown prince not the king. The king is still there, but he's also getting to build on the Biden fist bump forgiveness for the Khashoggi case. But more importantly, he needs economic coordination. He needs US investment. He's promised 600 billion in Saudi investment in the US and that's a good deal for Saudi Arabia, given the way our economy is cooking. But also he wants progress on a pathway, that's the word we're using now, to a Palestinian state. That is a requirement before the Abraham Accords. He wants a nuclear accord. He wants a deal like we just gave to the state of Qatar. That is an executive order stipulating that any attack on Saudi Arabia or attack on its territorial integrity will be seen as an attack on the United States. That's what the countries just got. The Saudis will want that, too. They will probably get something like it.
- [11:32]
Michelle Jamrisko
They'll probably get something like it. How about F35 fighter jets?
- [11:37]
James Jeffrey
I think that they'll have to be more progress on the Abraham Accords and more assuaging of the Israelis. As Wendy said, the Israeli military advantage is a critical part of our relationship with Israel in the whole region. But for example, the Israelis use a lot of F16 other countries in the region and have F16s. There are ways to work this, but it is sensitive and it's delicate.
- [12:08]
Michelle Jamrisko
When the president was in Riyadh in May, Ambassador, he said, talking about mbs, remember, there was this big love fest. The president brought a number of executives with him from the United States. And he said, I like him a lot. I like him too much. What do you think he meant by that?
- [12:27]
James Jeffrey
He. It's a rift on how you hear a lot of people in the Middle east who are native Arab speakers use very to. We hear this all the time. And Trump along the way has picked it up and was using it back. But what he means is this is my guy.
- [12:45]
Michelle Jamrisko
Mm. You know, he had the new president of Syria with him in the Oval Office quite recently, Ambassador. And that raised a lot of eyebrows. It's not something that we would have even considered a couple of months ago, as this was an individual involved in a Syrian branch of Al Qaeda. How does that inform this meeting tomorrow?
- [13:07]
James Jeffrey
Very much, because Syria is another critical piece. And here Trump has, by embracing literally Al Shara, formerly Al Jalani, he's signaling how important Syria and Syrian involvement in this growing region wide coalition is. I worked indirectly with Al Shara in the first Trump administration. He was fighting the real bad guys, the Islamic State, as early as 2016. Importantly, he was also fighting the Russians, Iran and Assad. So he might have been a former terrorist, but he was a former terrorist who is effectively on our side. And we have honored that with his visit to the United States last week.
- [13:54]
Michelle Jamrisko
Does a global deal, to the extent that you're describing, involving potentially investment here, direct foreign investment, fighter jets, maybe even more than that, Ambassador, make the United States safer?
- [14:09]
James Jeffrey
Yes. First of all, we've remained safe, all in all, since the 1940s by the same recipe, which is keep the global Eurasian island free of domination by a single power or a coalition that is hostile to us by working by, with and through other countries, be it China and France and Britain in World War II, be it the NATO alliance, be it our friends in the Middle East. This allows us, with only 3% of our gross national product going to defense, to maintain a relatively stable world. And that is secure and peaceful, not only for the American people, but for people all around the world. And that's a huge plus for global development, for economic trade and everything else that's important to the American family. Hmm.
- [15:01]
Michelle Jamrisko
You mentioned in the outset a Palestinian state and the extent to which Saudi Arabia would like to engage the US on this. Where's Donald Trump's head here? He's spoken around this issue a bit, knowing, of course, what has transpired in Gaza. That's something that NBC is not very fond of, is he?
- [15:19]
James Jeffrey
He's not fond of the terrible deprivations of the Gazan people, but he's very happy that one of Iran's major arms, Hamas, has been defeated. And he will be happy if President Trump continues pushing for, in the language we're using in our latest diplomatic statements, is a pathway to a Palestinian state that's not a Palestinian state, and that has made the Israelis nervous, or at least some Israelis. But nonetheless, it's where Trump is now, and it will help him in these meetings tomorrow with the crown prince.
- [15:56]
Michelle Jamrisko
How long is that pathway? Is that beyond this president's tenure?
- [16:01]
James Jeffrey
Well, we started 30 years ago with the Oslo Accords, and we came very close in 2000. In the view of then President Clinton, the fault was the Palestinian leader Arafat, who could not take a deal when one was offered. The overall question is, are the Palestinians really, in their hearts, willing to accept a Jewish Israel as a neighbor? And that question has not been finally answered. We also need to know if all Israelis are willing to let the west bank eventually be on a pathway to a separate state, given the claims of settlers. So there's several things at play here, but nonetheless, less President Trump is pushing this as all presidents have before him.
- [16:48]
Michelle Jamrisko
I'm really glad we could have this conversation ahead of the visit. Ambassador, good to see you. James Jeffrey, Distinguished Fellow, Washington Institute for Near East Policy and a voice of experience in the region. He's been in the room. We'll assemble our political panel next, only here On Balance of Power on Bloomberg. Stay with us. On Balance of Power. We'll have much more coming up after this.
- [17:12]
Bloomberg Announcer
Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there. Plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing. All investing involves the risk of loss, including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC Crypto trading provided by Zerohash. Complete disclosures available@public.com disclosures.
- [18:12]
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.
- [18:30]
Michelle Jamrisko
This is quite a day in politics as the president who had been at least leaning away from the Epstein story, not one to mention Nick Fuentes, is now embracing both Michelle Giamrico at my side today when it comes to Epstein. We've got a vote tomorrow, a discharge petition that's going to force this floor vote on the Epstein files. President's just decided to rip off the band aid. He is now urging Republicans to vote for it instead of the opposite.
- [19:00]
Joe Matthew
And he's giving them the freedom to do what perhaps they would have done anyway, I think is the point. Yeah, he's seen the writing on the wall that they want to move a certain direction and maybe he was going to lose the vote. So why not own it?
- [19:11]
Michelle Jamrisko
Why not own it? Writing on Truth Social House Republicans should vote to release the Epstein files because we have nothing to hide and it's time to move on. He says the House Oversight Committee can have whatever they are legally entitled to. I don't care, exclamation point. Having just days ago brought the likes of Congresswoman Boebert to the Situation Room to try to convince her to take her name off the discharge petition. Remember, Ro Khanna told us last week could be 30 or 40 Republicans voting for this on the floor. Tom Massie said On Sunday morning TV it could be 100. And in that world, will the Senate have any choice? Will the president enter Nick Fuentes? This is the other big one, Michelle, that's been dogging the White House and splitting, in many cases Republicans. After Tucker Carlson interviewed the notorious. What am I supposed to call him? White nationalist? I mean, seriously.
- [20:07]
Joe Matthew
Well, provocateur, I think to the extent that he embraces those labels himself, you.
- [20:12]
Michelle Jamrisko
Can call him what, Fair enough, he does. Right.
- [20:15]
Joe Matthew
So, yeah, I mean, it's, it's another tricky subject that's kind of splitting the MAGA world apart. And interesting that we heard the president weigh in on this.
- [20:23]
Michelle Jamrisko
You've had the Heritage foundation backing Tucker Carlson. A lot of folks in the Republican Party, a lot of folks in the MAGA world don't believe Tucker Carlson should be platforming an individual like Fuentes, who will remind everybody had dinner with the president at one point. Donald Trump was asked about this over the weekend down in West Palm Beach. Here's what he said. We've had some great interviews with Tucker Carlson, but you can't tell him who to interview. I mean, if he wants to interview Nick Fuentes, I don't know much about him, but if he wants to do it, get the word out, let him. You know, people have to decide. Ultimately, people have to decide. All right. I don't know what get the word out means. It's a really interesting response. If he wants to interview Nick Fuentes, I don't know much about him, but if he wants to do it, get the word out, let him. He said people have to decide. Ultimately, people have to decide. Let's assemble our panel for their take on on this move across the board by Donald Trump to lean into the opposition. Rick Davis and Jeannie Shan Zaino are with us Bloomberg Politics contributors. Rick is our Republican strategist and partner at Stone Court Capitol. Jeannie is our Democratic analyst and democracy visiting fellow at Harvard Kennedy School's Ashe Center. Rick, is this a strategy to just own it?
- [21:47]
Rick Davis
I'm not sure what he's owning. I mean, you know, he Talked about, well, I barely know this guy, Nick Fuentes, except he had dinner with him at Mar A Lago that blew up during the campaign.
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Michelle Jamrisko
Yeah.
- [21:57]
Rick Davis
And he says people have to decide. That last clip you just said, and I'm like, decide about what? Whether Nick Fuentes is a racist, anti Semite, I mean, or anti Semitism is bad. I mean, like, what is it we're undecided about here? And the thing is, it's not that Tucker Carlson interviewed the guy. On its own, Tucker Carlson should be able to interview anybody he wants to. I mean, for heaven's sakes, he interviewed Vladimir Putin in Moscow. But at the end of the day, it's the fact that he didn't challenge Nick Fuentes on any of his racist, anti Semite comments. And so that's the backlash. There are MAGA people in an uproar that Tucker Carlson has been, you know, helping this guy by not challenging him.
- [22:46]
Joe Matthew
Well, Jeannie, I mean, can you address this sort of free speech argument here? I mean, Trump is saying, let's just air this out. Let's let him have his due. You know, he can interview whoever he wants. And to Rick's point, you know, he has interviewed some pretty controversial characters and given a platform to others. I mean, do you think this has legs at all, the Fuentes argument, or is this just going to kind of go away and then in lieu of it, we'll talk Epstein? Because there are bigger fish to fry on that front.
- [23:15]
Jeannie Shan Zaino
Yeah, this has been what Tucker Carlson has been saying to put himself in a victim position essentially is, oh, they are trying to cancel me and not let me interview who I want to interview. And the reality is nobody is saying he can't interview Nick Fuentes or anybody else. There is a long history, as you know, Michelle, of reporters interviewing the worst type of people, but it is the way in which that that went forward and how he embraced, how he, as Ben Shapiro, called gloss to Nick Fuente, how he went on there and described Christian Zionists as the worst people in the world, how he hugged Nick Fuentes. That's what people are objecting to. And I think what we heard from Donald Trump in both of these stories is something pretty sad for Donald Trump, which is a surrender to the worst parts of this MAGA coalition. In both cases, as much as Donald Trump wants to yell at Marjorie Taylor Greene and say, I am maga, I created it, I know what they want, he is being led around by the chain from the most extreme elements of this coalition, and he has zero control over it. He can't get them not to release the Epstein files. And he can't even denounce Nick Fuentes, who, as was noted, he ate with with Kanye west, much to the chagrin of many on his own team during the campaign. So Donald Trump is losing control of his own, his own MAGA group, and he can cry to the wind, but these are two sure signs of it.
- [24:58]
Michelle Jamrisko
Wow, led by the chain. Jeannie's not mincing words today. Rick, what do you make of the Jeffrey Epstein salvo here on Truth Social? I mentioned it coming into our conversation, and you know how Washington is. Everyone's trying to figure out two steps ahead here. Knowing that the president also dispatched his Department of Justice to investigate Democrats who were reportedly on on the list here in the black book, like Bill Clinton, among others. Is this a way now for the Department of Justice to say, hey, sorry, it's an ongoing investigation. I know you voted to release the files, but we can't do that now?
- [25:36]
Rick Davis
Yeah, I mean, you know, by the time the buck stops here on the president's desk, it may be sent back over to the Justice Department as you talk about it. I mean, look, who knew on Friday night that this thing would breeze through, which may be a unanimous vote in the House of Representatives, something that took a discharge petition, very unusual, I mean, almost unheard of in Washington, that a group of members could overrule the speaker of the House and as a result may turn out to be everyone voting for this thing and it gets to the Senate. And everyone was saying on Friday, hey, no way is it going to get through the Senate. Oh, really? Donald Trump can get it through the senate. He has 13 Republicans. You don't think he can get 13 Republicans. So, I mean, like. But then the question is, why in the world would he want it to get through if he has to sign it? The reality is, if he wants he's released, all he has to do is pick up the phone, call his buddy Pam Bondi and say, release him. He has that power. He doesn't need Congress to sign off on that. Congress needs to sign off on that if they want it done over his head. So somebody is going to win, somebody's going to lose. And I sure don't want to place a bet on this one, the way it's headed.
- [26:49]
Joe Matthew
Well, Rick, just to build off that, I mean, if you're a political consultant in the White House right now, considering all these factors, considering what the DOJ might be able to do to protect the president, considering the writing on the wall that the House was already going to vote in favor and perhaps the Senate too, as you mentioned. Would you have said, hey, Mr. President, yeah, just, just say, you know, let them free to vote for the release knowing that there are risks here for the release for Donald Trump himself?
- [27:18]
Rick Davis
Well, I would assume that I was just brought in today because I would have never suggested the track they've been on all this time. I think I'd have blown my brains out, you know. So the reality is they should have dispatched with this a long time ago. Either had decided to get it out and done it themselves without any congressional activity or had cold sweated enough Republicans to get off that discharge position petition before it was signed off on. I mean, like it looked like they just reacted at the last minute as if they didn't know this was coming. I mean, we've been talking about it for months. And so, yeah, I think that it's going to be the kind of thing now where it's not clear what the position is to take. I mean, I'm not sure I could take a poll today that said, hey, is it better or worse for Donald Trump to actually do this himself and preempt Congress or let Congress roll him. Nobody buys this fact that he is now saying, oh, I'm for this. Now I want everybody to get this word out because the reality is you don't think they're going to be a massive number of redactions in this material. I mean, a thousand FBI agents were dispatched earlier to go through this stuff and redact all the important names Trump included out of that material. From what the reporting is, you don't think that's going to have a backlash if it gets out. So look, I think we're just seeing the beginning of this story. This could take us all the way through to Christmas Day.
- [28:43]
Michelle Jamrisko
Incredible, Jeannie. Just the beginning. What happened to Donald Trump at the end of last week or over the weekend? He had Lauren Boebert in the Situation Room days earlier to peel her name off the discharge petition. Now he's urging everyone to vote for it.
- [28:59]
Jeannie Shan Zaino
Absolutely. I sat here on the show late Friday afternoon with a theory that I was told was a conspiracy theory, but not so much. Donald Trump has ordered an investigation of the Democrats. Tom Massie brought it up on ABC this weekend saying it is a big smokescreen so he can allow Republicans encourage them to vote for it, let it go through the Senate, let him sign it. He said in his statement they will get what they are legally entitled to. And in fact, Bloomberg's Katherine Lucy asked the president about that over the weekend, saying is this investigation a smokescreen, as Massie called it, so that those files will not be released. And look at his response to Catherine, you are fake news. You know all of the he went on and on about fake news. That is a sure sign. This is Donald Trump's playbook. He did this before, as we remember, Joe, the irs, he can't release his tax files because they are under audit. That is the same thing Cam Bondi will say about these files. So all that they're legally entitled to is all we will see. Not a conspiracy theory anymore.
- [30:05]
Michelle Jamrisko
I will say, wow, this is a great panel today. This guy's only Monday. Think of where we'll be this time tomorrow. Jeannie Shan Zaino and Rick Davis Davis, Bloomberg Politics contributors bringing us analysis and truth every day here On Balance of Power. I'm Joe Matthew alongside Michelle Jam Risko who's going to be back with us tomorrow on the program. Looking forward to it.
- [30:27]
Joe Matthew
Happy to be here.
- [30:28]
Michelle Jamrisko
Stay out of trouble in the meantime because we have much more trouble to find. Stay with us On Balance of Power. We'll have much more coming up after this.
- [30:39]
Bloomberg Announcer
Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto, it's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing. All investing involves the risk of loss, including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by Zerohash. Complete disclosures available@public.com disclosures.
- [31:39]
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 Listen on demand wherever you get your podcasts or watch us live on YouTube.
- [31:55]
Michelle Jamrisko
Boy, it's been a moving target recently and Bitcoin has all of our attention today as the chart just looks Broken. We talked about Bitcoin with Mike McGlone next week, and I think we've got to do it again. Down $870 right now, about 1% to fall back below $93,000. And if you're a technician, this is a problem. If you're an investor who bought at 120 something, well, this is an even bigger problem. Mike McGlone covers commodities for us at Bloomberg Intelligence, our senior commodity strategist, and therefore owns the bitcoin beat. It's great to see you, Mike, and I'm just trying to figure this out here. If we take a look at what's happening with gold today, it's still holding above $4,000 an ounce. So is bitcoin the store of value we thought it was?
- [32:45]
James Jeffrey
No.
- [32:45]
Mike McGlone
Unfortunately, we're finding out it has a much higher correlation to the stock market, which some people consider a store of value. But it got way too expensive. And I, Joe, I really appreciate you putting bitcoin and gold in the same sentence because my old mantra used to be we can't really hold gold anymore without some bitcoin in that space with the word going digital. But sometimes there's, it's better to overweight gold. And that's been the case since last year, certainly since Mr. Trump was elected and since ETFs were launched. So right now, Bitcoin's hovering around 92,000. It took. It was up 34% on the year. Now it's down. The key question is what does it do until the end of the year? I think it's going to go a lot lower. Unfortunately, I don't think it's. It's going to stay above 100,000 and it could bring a lot of things down with it. And one key indicator for that is the ounces of gold equal to one bitcoin. It's been a great leading indicator. It's just broken down through key support. Right now it's about 22.7. The high was 35 and key support was 25. So it's breaking down. And Joe, also Keith, remember, it's the end of the end of the year. Petitionally, this is the time of year we get position squaring and people hit and stops. I'll end with one key thing. The Bloomberg Galaxy crypto index was up above 30% on the year. Now it's down about 12% a year. So hit and stops.
- [33:57]
Michelle Jamrisko
Wow. How much do we need to worry about the technical factors here? Is there support in the 70,000 or 77,000 range? Here, Mike, or is the chart broken to the point where it doesn't matter now?
- [34:11]
Mike McGlone
Well, it's always going to matter. We initially bounced from 100,000. I think the next key level is around 84,000. But the key thing is that we have to talk about technicals because there's no fundamental underlying. There's no basis. Like, I mean, I track crypto dollars. There's a basis. I trade crude oil futures and there's a basis. There's nothing in these 27 million cryptos. And I think that's what's happening. Joe's we're finding out, yes, a lot of this was pie in the sky, Hubert, and now we're getting towards the realization that it's just potentially a start of a bear market and bitcoin's a big one. But here's the key thing to remember. There was only one in 2009, and now there's about 27 million of an unlimited supply of these things.
- [34:50]
Michelle Jamrisko
How about that? Well, you wonder about some of the forecasts. I think Tom Lee had it around $250,000. I think Cathie Wood's got like $1 million price target in five years or something. I don't know how you can even issue a forecast when you're in the throes of this kind of volatility. But I'm curious, Mike, what does this mean for the treasury companies that, you know these crypto treasury, like strategy and others that have promised an even better hedge on crypto, sort of crypto on steroids. They're going down hard with this, too.
- [35:22]
Mike McGlone
Exactly. Strategy is one of the worst performing stocks this year. I know Michael Saylor well. He's one of my key indicators. Got me bullish Bitcoin around 10,000 in 2020 when he turned toward bitcoin. But what he did is he doubled down on the 10x. He double dog dared the market guys with a 10x. It's not a good idea. So it's starting to lead the way lower. But the key thing, remember, about crypto treasuries is it's an oxymoron. Treasuries should be in the same sentence as treasuries. As treasuries. It doesn't make sense. And I just look at this as a classic stuff. So here's what I think is going to end up my book someday, Joe. It's going to either read that this time was different, this time wasn't different. I think it's going to make this time wasn't different.
- [35:59]
James Jeffrey
We're going to look back at all.
- [36:01]
Mike McGlone
These silly crypto things as just pine sky things like pets.com in 1999.
- [36:07]
Michelle Jamrisko
Can I get the first interview when the book comes out? I'm looking forward to that. Michael Bloomberg, Intelligence SENIOR Commodity Strategist thank you, Mike. We'll keep tabs on Bitcoin for you. Like I said, we're below $93,000 right now, down more than 6.10of a percent. President Trump is putting the apron back on this evening. I'm just assuming that that's what happened the last time he had a McDonald's. McDonald's event. The Impact Summit hosted by McDonald's here in Washington is going to draw the president. This is an event that he'll be attending a little bit later on, I believe, within the White House campus. I don't know what the venue is going to be here, but he's going to be talking about his affordability message, of course, with an audience of McDonald's owners and operators and suppliers who are all coming together. His favorite restaurant chain, knowing he loves a Big Mac and a Diet Coke, loved making the fries, too, when he was at McDonald's on the campaign trail. So this one's got our attention, knowing that this is such an important message for the president, affordability. It's not just food after the president issued those exemptions on tariffs last week on everything from beef to cocoa to bananas. It's also health care. And this is what draws our attention to our conversation with Congresswoman Gwen Moore. Knowing that we've got a couple of weeks to figure something out here, either to extend Obamacare premiums having reopened the government or, if you ask the president, recraft the entire health care system in the United States. I suppose a third option would be doing nothing. But here's what the president said about this over the weekend. We're negotiating with lawmakers and I've had personal talks with some Democrats. I can't tell you who they are. I just don't want to do that. It's not fair to them about paying large amounts of dollars back to the people. Maybe he's talking to Gwen Moore, the congresswoman from Wisconsin's 4th district, Democrat with us live from Capitol Hill. Congresswoman, it's great to see you. Welcome back to Bloomberg TV and Radio. Have you received any overtures from Republicans when it comes to negotiating health care?
- [38:16]
Congresswoman Gwen Moore
I have not received any overtures, nor have I in the entire time that I've been in Congress and since we've passed the Affordable Care act gotten any sort of Alternatives to the aca, also known as Obamacare. And with regard to the President giving us all a couple of thousand dollars for our health savings account, last time I checked, that, that really didn't work. Last time I checked. And I've been around for a while. People have had these health care plans, as it were, that barely cost anything, had high deductibles, didn't provide any health care at all. And it looks like Obamacare is on life support right now.
- [39:02]
Michelle Jamrisko
Well, if we do not see an extension of these Covid era subsidies that we've been talking about straight through the shutdown, this is a big reason why Democrats and Republicans could not get on the same page what happens to people in Wisconsin. This is something that could cause premiums to double or quadruple depending on where you are.
- [39:23]
Congresswoman Gwen Moore
Yeah, that's true, 114% and that's an average. But it's even more than that. I had a conversation with folks this weekend, you know, and, and they've been seeing and listening to something other than the TV commercials and Republican and Democratic talking points. They are actually getting the proposals in the mail and they can see that they've gone from paying, you know, $150 for coverage to like $800 a month for coverage. Just the couple of people I talked to this weekend, you know, so the whole notion that that costs are going down under President Trump's administration and they're going to have an alternative. I mean, people are not stupid. They, they are experiencing this shift.
- [40:17]
Michelle Jamrisko
Congresswoman, the president, you might have heard me mention, is going to be having an event with McDonald's owners and operators this evening. And we've heard from McDonald's just a couple, couple of weeks ago in its earnings report and it told us that low income customers were actually falling off its list of customers and that people with more money were trading down. If we're in a world now, I don't know if, if you prefer an extra value meal or the dollar menu at McDonald's, Congressman, but if we're in a world where low income people are not able to afford a $1 meal or whatever it costs for an extra value meal at McDonald's, what does that tell us about where we are here in the affordability conversation?
- [40:58]
Congresswoman Gwen Moore
Well, the extra value meals are no longer an extra value. You know, of course I fed my kids my grandkids on McDonald's. And I mean, this is one of the canaries in the coal mine when you can't afford to just drive through without being concerned that you're spending your kids lunch money for the whole week. When you, when you drive through one time, you know, that's a measurement of people's well being. People don't have to discern whether or not they can afford a lobster. When you can't take your kids drive through McDonald's, you know you're in trouble.
- [41:35]
Michelle Jamrisko
Well, that might be where we are here depending on how this all works out. Congresswoman, the President is putting exemptions on certain food items when it comes to tariffs. If you're with us on Bloomberg TV you can see them reaching out of the the drive thru window there from the campaign trail. What are we going to see happen to prices when it comes to food and energy in the weeks ahead?
- [41:58]
Congresswoman Gwen Moore
Well, price volatility, where it goes, I don't know that people are going to experience those drops right away. You know, a lot of these tariffs have been baked into the economy. I have one vendor in my district and I won't mention the name but they bought some equipment to expand their business. Those tariffs have been paid and they've already had to either pay them or bake them into the price of their product. I mean you can't just hit the undo button on everything. And I think that that's where we are. Our farmers in Wisconsin, I represent Milwaukee but I'm very sensitive to the farm to table catastrophe. Our farmers have completely lost all their markets for their soybeans to China. You can't just hit the undo button and snap your fingers and have that return.
- [42:54]
Michelle Jamrisko
You know, the next vote you might take from what we understand is on this discharge petition to release the Epstein files. Congress will woman the President has, has turned a 180 on this to tell Republicans to vote for it. So this could pass, we understand with a pretty remarkable vote tomorrow. I'm wondering if you expect a unanimous results and to what extent this has hit your conference. As a Democrat.
- [43:20]
Congresswoman Gwen Moore
Well, I can tell you if the President has told Republicans to vote for it, I'm sure they will. Of course this is a defensive tactic on his part because what he'll do is he'll say that oh, we're investigating this thing. We're looking at what Democrats Larry Summers or Bill Clinton has done. We're investigating it. So therefore the Justice Department just can't release the information. You know, the bottom line is that the President of the United States does not want his relationship with Epstein which, which you know is extensive and over long periods of time. And is that at least embarrassing to come out?
- [44:03]
Michelle Jamrisko
Well, we'll have a lot more to learn about this, I guess, in the days ahead. Congresswoman that's Gwen Moore live on Capitol Hill, the Democrat from Milwaukee, Wisconsin's 4th district, talking with us live here on Bloomberg TV and radio. We should mention Larry Summers as a paid contributor to Bloomberg TV tv, and we'll have a lot more on this conversation as we move forward here on Bloomberg TV and Radio. 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 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 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.
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- [45:11]
Michelle Jamrisko
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