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SCOTUS Opinions, Debate Reaction · Bloomberg Intelligence

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Speaker 2: Here we go the breaking news from the Supreme Court.
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Speaker 2: Supreme Court overturning a Chevron ruling. And this really is
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Speaker 2: a blow to agency power. So this is truly about
0:35
Speaker 2: federal agencies and the current wide birth They have to
0:39
Speaker 2: interpret unclear laws, and it looks like the Supreme Court
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Speaker 2: has now overturned that Chevron deference. Let's get to June
0:48
Speaker 2: Grosso right away. She covers Bloomberg legal analysts and hosts
0:52
Speaker 2: of the Bloomberg Law Show. June We've been waiting for this.
0:55
Speaker 2: Walk us through what this means.
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Speaker 3: So the Chevron doctrine means, you know, the legal definition
1:00
Speaker 3: of it basically is that if there is an ambiguous
1:03
Speaker 3: statute and ambiguous law, then deference is given to the
1:07
Speaker 3: agency's interpretation. What it also means is, basically, you know
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Speaker 3: who has more power the administrators at agencies or judges,
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Speaker 3: you know, experts in the area or judges who have
1:18
Speaker 3: to sort of learn as they as the.
1:21
Speaker 4: Cases go on.
1:22
Speaker 3: So we have been suspecting that this court was going
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Speaker 3: to overturn Chevron because conservatives have for years been targeting it,
1:31
Speaker 3: and several of the justices, including Clarence Thomas, have been
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Speaker 3: talking about overturning Chevron.
1:37
Speaker 4: What this means.
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Speaker 3: And this case was just a case, actually it was
1:40
Speaker 3: two cases with the National Marine Fisheries where there's a
1:44
Speaker 3: rule that the fisheries have to have observers on the
1:48
Speaker 3: boats and they have to pay for those.
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Speaker 4: And that was being challenged here.
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Speaker 3: And so even though the fact is that they've never
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Speaker 3: actually had to pay for those fines, but theoretically they do.
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Speaker 4: So what the court is saying, and.
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Speaker 3: It's the chief road is it's six to three again,
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Speaker 3: second six to three decision in this case. And you know,
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Speaker 3: we suspected it that it would come out this way
2:11
Speaker 3: because of yesterday's opinion knocking back the sec and saying
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Speaker 3: it can't have in fraud cases, it can't have its
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Speaker 3: in house counsel. It has to be people have to
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Speaker 3: be able to go to the federal court and have
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Speaker 3: a trial by jury. So we expected this, and you know,
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Speaker 3: anyone knows. There are these people who say this is
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Speaker 3: the you know, basically the end of the world kind
2:34
Speaker 3: of things. This means that federal agencies are going to
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Speaker 3: you know, cut back on their regulations. Things are going
2:40
Speaker 3: to be challenged, they do things, you know, all of regulations,
2:43
Speaker 3: health and safety, consumer regulations, food and drug that all
2:48
Speaker 3: these are going to be affected by this, and they will.
2:51
Speaker 3: But the question is how much, and that remains to
2:55
Speaker 3: be seen. So and people on the other side say, well, no,
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Speaker 3: it's not going to really have that much of an effect.
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Speaker 3: We haven't been really using Chevron, and as I've said before,
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Speaker 3: the Department of Labor has already stopped using Chevron as
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Speaker 3: a reason for its regulations in light of this case
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Speaker 3: coming down.
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Speaker 4: So we just don't know what the effect will be,
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Speaker 4: whether it will be huge.
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Speaker 3: And also the Supreme Court hasn't really based any of
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Speaker 3: its decisions.
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Speaker 4: On Chevron in a while, so who knows. But is
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Speaker 4: a blow to agency power. As you said in the
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Speaker 4: first place.
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Speaker 5: Why do we call it the Chevron deference, Because, like
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Speaker 5: you said, this actual case at hand that the Supreme
3:34
Speaker 5: Court is making a ruling on right now didn't have
3:36
Speaker 5: anything to do with the actual company Chevron. Well, it
3:40
Speaker 5: was just a precedence walk us through life.
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Speaker 4: Well, in how we're understanding that.
3:44
Speaker 3: With Supreme Court precedents, often the name of the case
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Speaker 3: where it's decided is given the title. So Chevron difference
3:52
Speaker 3: comes from a case four decades ago involving Chevron. So
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Speaker 3: that's why we call it Chevron defference. It has that name.
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Speaker 3: Has nothing really to do with the case the fisheries
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Speaker 3: case here, but that's the name it's had for four
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Speaker 3: decades and that's the way it's referred to. So you know,
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Speaker 3: if you're in law school, that's what you're studying, the
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Speaker 3: Chevron Chevron.
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Speaker 4: It's called it's Chevron document.
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Speaker 3: It's called Chevron deference because you give deference to the
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Speaker 3: agency's interpretation.
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Speaker 2: So does this mean, though, that it's going to be
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Speaker 2: judges that are going to decide the laws versus experts
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Speaker 2: within agencies that aren't elected.
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Speaker 4: That decide laws.
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Speaker 3: Well, that is the intention of the what a judges
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Speaker 3: know about it interpreting? Well, what happens is judges, let's say,
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Speaker 3: you know, they'll learn, for example, you have anti trust cases. Right,
4:39
Speaker 3: judges do all kinds of complex cases, So you have
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Speaker 3: anti trust cases, and they take evidence from both sides,
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Speaker 3: they listen to all the experts, they study it, and
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Speaker 3: then they come out with a ruling. I mean the
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Speaker 3: Supreme Court, are they experts in the areas that they've
4:53
Speaker 3: been homelessness? You know, that's the way the judicial system works.
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Speaker 3: You have judges who are supposedly independent and are independent
5:00
Speaker 3: and they come to a decision based on the facts
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Speaker 3: and based on weighing both sides of the arguments. But
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Speaker 3: you know, it's going to make it more difficult for
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Speaker 3: some agency regulations and you can imagine that. And this
5:12
Speaker 3: was pushed by conservatives and business groups. They wanted to
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Speaker 3: get rid of Chevron. So and this is all about
5:18
Speaker 3: the you know, the war on the administrative state. How
5:22
Speaker 3: the six Conservatives have sort of been bent on not
5:26
Speaker 3: taking down the administrative state, but certainly lessening the power
5:30
Speaker 3: of federal agencies. And as last year there was a
5:33
Speaker 3: case involving the EPA and its control over water pollution,
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Speaker 3: and the Supreme Court invented a doctrine called the Major
5:44
Speaker 3: Questions doctrine so that they could take back some.
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Speaker 4: Of the power that the EPA has there.
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Speaker 3: So it's been going on for a while, but this
5:51
Speaker 3: has been sort of out there as a target of
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Speaker 3: conservatives and business groups. So the impact is who knows
5:59
Speaker 3: what the impact will really be.
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Speaker 5: So what exactly do the how do the businesses feel
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Speaker 5: about this decision? What is the general argument of why
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Speaker 5: the businesses want to overturn this.
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Speaker 3: Well, they think that agencies have too much power basically,
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Speaker 3: so they think that this is evening out the landscape,
6:20
Speaker 3: and you know, it just will make you know, businesses
6:23
Speaker 3: don't like restrictions, right, I mean the sec that all
6:27
Speaker 3: that we were talking about yesterday was in house you know,
6:30
Speaker 3: whether you can have your proceeding in house judged by
6:33
Speaker 3: an administrative law judge who knows the area.
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Speaker 4: Securities right, securities.
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Speaker 3: Lawyer who knows the area, versus being able to go
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Speaker 3: to court and have it, you know, a trial. So
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Speaker 3: obviously it's it's sort of the less restrictions on business,
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Speaker 3: the better it is. So that's I think what you know,
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Speaker 3: And so I haven't I haven't been able to read
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Speaker 3: it because I've been talking about it.
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Speaker 2: Yeah, but my question, how much of this do you
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Speaker 2: think is about climate and the EPA And they're really
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Speaker 2: tough restrictions that have come down through the agencies on interpretations.
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Speaker 3: That excuse me, that's one sort of big area here.
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Speaker 3: But it's not just climate that's going to be affected,
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Speaker 3: of course not.
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Speaker 2: But was that really why conservatives were pushing this or
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Speaker 2: we're not totally clear.
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Speaker 3: Conservatives have been pushing this for And what's funny is
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Speaker 3: this case, the Chevron doctrine was a conservative doctrine that
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Speaker 3: was put out forty years ago, and in time conservatives
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Speaker 3: have just you know, don't like it. They don't like
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Speaker 3: the restrictions that it imposes, and so they've.
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Speaker 4: They have attacked it.
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Speaker 3: But so it's it's just a you know, where you
7:45
Speaker 3: want less regulation. It's sort of you know, when Trump
7:48
Speaker 3: came in, less regulation, that's one of his things. I
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Speaker 3: took regulations away and he had this big stack of regulations.
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Speaker 3: So and it, you know, also depending on the administration
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Speaker 3: whether or not regulations are being enforced more what.
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Speaker 4: The regulations are.
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Speaker 3: But this you know, will affect everything, workplace rules, every rule.
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Speaker 3: And I think that what's gonna happen is a lot
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Speaker 3: of agencies are going to do what labor has been doing,
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Speaker 3: which is not rely on that say, it doesn't rely
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Speaker 3: on this. This is our agency power. It comes from
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Speaker 3: our agency power. We don't have to go to the
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Speaker 3: Chevron difference.
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Speaker 2: All right, June, thank you very much. I know we're
8:24
Speaker 2: not done with you yet. Stay tuned because you never
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Speaker 2: know what else is coming out. June Grassol Bloomberg, Senior
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Speaker 2: legal analyst, joining us. Let's continue the conversation here Anthony
8:32
Speaker 2: Sabino as professor at Saint John's University, Tobin College of Business,
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Speaker 2: and as a reminder, we're looking at the Chevron deference
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Speaker 2: has now been overturned. The Supreme Court throws out decades
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Speaker 2: old legal doctrine that empowered federal regulations to interpret unclear laws. Professor,
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Speaker 2: thank you for joining us. We appreciate it. You've had
8:52
Speaker 2: some time to read through the opinions, give us your
8:55
Speaker 2: takeaways here.
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Speaker 6: Yes, well, first of all, thank you for having me
8:58
Speaker 6: on on this important day. This decision is the right decision.
9:03
Speaker 6: It's a very good decision because it honors both the
9:05
Speaker 6: Constitution in terms of its text and its constitutional plan. Now,
9:10
Speaker 6: no doubt we have heard and we're going to hear
9:13
Speaker 6: a lot more of the ringing of hands and stermon
9:16
Speaker 6: drag about. This is the Supreme Court going off the rails,
9:21
Speaker 6: discarding story decisives, upending agency power and basically making life
9:26
Speaker 6: very difficult for the agencies. I respectfully disagree, And to
9:30
Speaker 6: use a word I've heard mister Biden used quite recently,
9:33
Speaker 6: quite a lot recently, is that's a lot of malarkey.
9:36
Speaker 6: First of all, it's not a radical decision. It's true
9:38
Speaker 6: to the Constitution's text and to the constitutional plan for
9:43
Speaker 6: the Supreme Court for all judges, wherever they may be.
9:46
Speaker 6: Their job description can be summed up in two words, judges.
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Speaker 6: Judge Chevron diminished that. Okay. It required judges to defer
9:55
Speaker 6: to agencies, and it was keeping judges from doing their
9:58
Speaker 6: jobs which is too independently, thoughtfully and of course forthrightly
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Speaker 6: use all their skills or their wisdom to interpret the law.
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Speaker 6: And as such, Sefron inflicted damage upon checks and balances
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Speaker 6: and separation of powers. In fact, Cheffron introduced an imbalance
10:15
Speaker 6: because it gave an advantage to the agencies, to the
10:19
Speaker 6: government side. And again, it's a zero sum game. If
10:22
Speaker 6: you advantage one side, then by force of logic, you
10:25
Speaker 6: disadvantaged the other. But this case now does low for
10:28
Speaker 6: bright is it levels the playing field. Now everyone comes
10:31
Speaker 6: into court, okay, and has the same situation. The agencies
10:35
Speaker 6: will still be able to advocate for their position, the public, okay,
10:39
Speaker 6: the American citizens, she will still be able to advocate
10:42
Speaker 6: for her position, and the court will listen to both sides,
10:46
Speaker 6: and we will take it. We will take it from there,
10:51
Speaker 6: and as such, now we will have that balance restored
10:54
Speaker 6: as the way it should be.
10:55
Speaker 4: Okay, how should.
10:57
Speaker 5: We understand what this means for business?
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Speaker 7: Is?
11:00
Speaker 4: We are Bloomberg.
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Speaker 5: We do follow markets very closely. What's your take on
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Speaker 5: the business implications of this decision?
11:10
Speaker 1: Right?
11:11
Speaker 6: Well, yes, yes, okay, right.
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Speaker 8: I'm sorry, sorry, I'm zooming I I'm zooming in at
11:17
Speaker 8: the same time. Okay, but I'll stay on the phone
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Speaker 8: with you.
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Speaker 3: All right, we got you.
11:23
Speaker 2: Can you hear us?
11:25
Speaker 9: Yes, yes, okay.
11:27
Speaker 8: Do you want me to stay on the phone or
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Speaker 8: the computer?
11:31
Speaker 2: This is a great question. I feel like the computer
11:34
Speaker 2: is just fine.
11:36
Speaker 4: All right.
11:36
Speaker 2: So let's get back to that question in tid that
11:38
Speaker 2: Emily was asking in terms of what businesses sort of
11:41
Speaker 2: think about.
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Speaker 8: Well, businesses are going to obviously welcome this because it
11:46
Speaker 8: removes that unfair advantage. It is not, in any way,
11:49
Speaker 8: shape or form, going to radically change how agencies do business.
11:53
Speaker 8: They still have all the enforcement tools available to them
11:55
Speaker 8: that they had previously. They're still going to be able
11:58
Speaker 8: to argue their position, for they simply will know no
12:00
Speaker 8: longer have that unfair advantage of coming in ahead of
12:03
Speaker 8: the game and already being able to basically tell federal judges, well, look,
12:07
Speaker 8: you don't have to apply your skills, you don't have
12:10
Speaker 8: to analyze these ambiguities and statutes. We're the experts. We
12:14
Speaker 8: will do that for you, and just listen to us.
12:16
Speaker 8: And again, that violates separation of powers and checks and
12:19
Speaker 8: balances because you diminish the power of the judges to
12:23
Speaker 8: do the job that they constitutionally bound to do, and
12:26
Speaker 8: you were expanding the power of the agencies, which are,
12:29
Speaker 8: of course, as we know, part of the executive branch
12:32
Speaker 8: part of Article two. So you elevate one branch over
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Speaker 8: the other branch and prevent the other branch, the judiciary,
12:39
Speaker 8: from doing its job. Now, certainly businesses will benefit by
12:43
Speaker 8: having this, but also enforcement actions are going to go around.
12:47
Speaker 8: They're going to continue and the way they have in
12:49
Speaker 8: the best.
12:51
Speaker 4: Going forward.
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Speaker 2: Do you think that laws will then be written with
12:56
Speaker 2: different kind of clarity then to prevent things being helped
12:59
Speaker 2: up courts like exactly.
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Speaker 4: Okay, so that's the whole point.
13:03
Speaker 2: Right, So if that's the case, can you give me
13:04
Speaker 2: an example of something that might have been that that
13:07
Speaker 2: might be rewritten or might be written differently, now that
13:09
Speaker 2: the Chevron deference is by the way aside.
13:12
Speaker 8: Okay, Well, for example, and I heard you discussing this
13:15
Speaker 8: for June a couple of moments ago. Is environmental laws
13:17
Speaker 8: and regulations promulgated there under Congress. And again this ships
13:23
Speaker 8: if anything shifts a burden slightly or basically is reminded
13:26
Speaker 8: to Congress that they need to do a better job.
13:28
Speaker 8: We have to remember that one of the reasons Chevron
13:30
Speaker 8: came about was that the Supreme Court at that time,
13:32
Speaker 8: in nineteen eighty fourth said all right, well, what do
13:34
Speaker 8: we do when there were ambiguities in the statute? Well,
13:38
Speaker 8: you have a statute that's ambiguous. You have an agency
13:41
Speaker 8: that promulgates regulation or brings some enforcement action to enforce
13:45
Speaker 8: that statute notwithstanding the ambiguity. And as such, a court
13:50
Speaker 8: at that time in Chefron said, well, let's listen to
13:52
Speaker 8: the experts, let's listen to the agencies. And that again
13:55
Speaker 8: at the time Chefron was a good decision and rightly
13:59
Speaker 8: decided and worked, but it's been taken too far where
14:02
Speaker 8: now again the difference has gotten out of hand and
14:06
Speaker 8: it has increased the imbalance of the favoritism of the
14:09
Speaker 8: agency's view and also again basically shutting out for closing
14:12
Speaker 8: judges from doing their job. Now back to again as
14:15
Speaker 8: an example environmental law bit it applies to securities law
14:18
Speaker 8: anti trust law as well because over the controversy presently therein,
14:22
Speaker 8: it's going to compel Congress to write better laws, to
14:26
Speaker 8: erase ambiguity, to iron out the ambiguities and the problems
14:29
Speaker 8: and the misconceptions in the words the statute, so that
14:32
Speaker 8: way you have clear statutory text. Therefore, regulations promulgated by
14:37
Speaker 8: agencies will just be just as clear because they are
14:40
Speaker 8: starting from the clear foundation of the statute itself. And
14:43
Speaker 8: enforcement actions in terms of what can be brought and
14:46
Speaker 8: what cannot be brought will likewise benefit from that same clarity,
14:50
Speaker 8: and judges of course will have an easier time because
14:53
Speaker 8: as again the Supreme Court has said, and the Supreme
14:56
Speaker 8: Court of two hundred years is said, we go by
14:58
Speaker 8: the plain English meaning of a statute and we apply
15:01
Speaker 8: it according to its plain English text.
15:04
Speaker 2: So in theory though in theory, businesses should have then
15:08
Speaker 2: more clarity, I think, is what you're saying, Like, if
15:10
Speaker 2: the law is written more clearly, then the business should say, Okay,
15:13
Speaker 2: now I got it. What's the reality though, like Congress
15:17
Speaker 2: can barely get you know, anything done, are they're really
15:19
Speaker 2: going to be able to write more clearly when it
15:21
Speaker 2: comes to certain laws, particularly confusing ones like climate or antitrust.
15:25
Speaker 8: That's their job, that's what we the people let them for.
15:28
Speaker 8: And if Congress cannot write laws with clarity, then it's
15:31
Speaker 8: up to the American people to exercise our will at
15:33
Speaker 8: the ballot box and put in people who know how
15:35
Speaker 8: to write a clear, unambiguous statute. It's as simple as that.
15:39
Speaker 8: That's the constitutional plan. That's separation of powers, that's checks
15:42
Speaker 8: and balances. So Congress needs to get to work. And
15:45
Speaker 8: in the instances where Congress cannot be okay, as clear
15:49
Speaker 8: as one might like, the bottom line is that also
15:51
Speaker 8: reflects political compromise, because, yes, ambiguities arise in statutes because
15:56
Speaker 8: of the political compromise that is undertaken in the halls
15:59
Speaker 8: of Congress, and of course with the President and ultimately
16:02
Speaker 8: sign it off and make it into law and so forth.
16:04
Speaker 8: So to that extent, that's a natural part of the process.
16:07
Speaker 8: That's democracy at its best. That's a republican form of government.
16:10
Speaker 9: That's it's best.
16:11
Speaker 1: All right.
16:12
Speaker 8: You're not always going to get perfectly clear statutes, okay,
16:14
Speaker 8: but again, there's nothing wrong with Congress trying to do that.
16:17
Speaker 8: And if I may, as you say, businesses, but let
16:20
Speaker 8: me broaden that, if you allow me. Okay, it's not
16:23
Speaker 8: just American businesses, it's all Americans. All Americans individual in
16:28
Speaker 8: their personal lives, their personal liberties, business people, okay, business persons, businesses,
16:33
Speaker 8: and entities. We're all entitled to statutes that clearly state
16:37
Speaker 8: what the law is. So that way we can look
16:39
Speaker 8: at them and we know that the law is consistent,
16:41
Speaker 8: it's applied to everybody the same way. It's predictable. So
16:45
Speaker 8: when I decide I'm going to take a certain course
16:47
Speaker 8: of action, okay, I know what the legal result is
16:49
Speaker 8: going to be. That's part of America. That's the way
16:51
Speaker 8: it should be. And once again, Local Right today restores
16:54
Speaker 8: that balance by letting judges judge.
16:57
Speaker 2: All right, professor, we hope that plays out that way.
17:00
Speaker 2: Anthony Sabino, Professor at Saint John's University Tobin College of Business.
17:03
Speaker 2: Just as a reminder to update you on this breaking news,
17:06
Speaker 2: the Supreme Court overturns a Chevron ruling in a blow
17:08
Speaker 2: to agency power, throwing a four decade old legal doctrine
17:13
Speaker 2: that empowered federal regulators to interpret unclear laws, and now
17:16
Speaker 2: that goes to judges and then back to Congress to
17:19
Speaker 2: write very clear laws.
17:22
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17:40
Speaker 2: It's definitely the Supreme Court decision day. The latest is
17:43
Speaker 2: the Supreme Court backs the January sixth defendant curbing the
17:46
Speaker 2: use of Enron law. Remember, nearly three hundred defendants, including
17:50
Speaker 2: Donald Trump, were charged under this twenty two thousand and
17:53
Speaker 2: two law that grew out of the Enron collapse regarding
17:56
Speaker 2: people who obstruct an official proceeding. And it looks like
17:59
Speaker 2: the Supreme Court is backed the January sixth defendant. June
18:03
Speaker 2: grasshow senior legal analyst is still with US June. What
18:05
Speaker 2: does this mean, Well.
18:07
Speaker 3: It means that some defendants are going to have their
18:11
Speaker 3: cases trim back. And this also affects Donald Trump because
18:15
Speaker 3: he's been charged with this same with the same crime.
18:20
Speaker 3: So it's going to affect a lot of January sixth cases.
18:24
Speaker 3: I think very few of the January sixth defendants just
18:28
Speaker 3: have this charge that they're facing, So if they've had
18:31
Speaker 3: a trial already, they'll probably still.
18:33
Speaker 2: Be And is this charge specifically against preventing approving President
18:38
Speaker 2: Biden or or is it like them breaking into Congress
18:43
Speaker 2: it's like listening Nancy Pelosi's desk.
18:45
Speaker 3: Well, it's yeah, it's about obstructing, that's the whole question.
18:48
Speaker 3: It's about obstructing official proceeding. And this was a law
18:52
Speaker 3: that came in as we know post and Ron, and
18:55
Speaker 3: so what the defendants were saying here is this law
18:59
Speaker 3: doesn't apply to this kind of a proceeding. This is
19:02
Speaker 3: a law about papers and disrupting papers and stuff. And
19:05
Speaker 3: so but you know, the law could be any law
19:08
Speaker 3: can be read broadly or narrowly. And it says that
19:12
Speaker 3: they said that the government must show that the defendant
19:15
Speaker 3: impaired the availability or integrity for use in an official
19:19
Speaker 3: proceeding of records, documents, objects, or other things used in
19:23
Speaker 3: an official proceeding, or attempting to do so.
19:25
Speaker 4: It's six to three again. But what's interesting is that
19:28
Speaker 4: the three are not the three liberals.
19:31
Speaker 3: The three are two liberals, Justice Kagan and Justice Soto
19:35
Speaker 3: Mayor and conservative Justice Amy Coney Barrett. So it'll be
19:39
Speaker 3: interesting to see. And this is a case.
19:41
Speaker 4: That the Chief wrote the majority opinion in.
19:44
Speaker 3: And you know, if you look back a lot of
19:46
Speaker 3: the most important cases, the Chief decided because the Chief
19:50
Speaker 3: has the ability if he's in the majority, to decide
19:53
Speaker 3: who will write the opinion, And so the Chief decided
19:56
Speaker 3: that he'll write it himself, meaning that you know, he
19:58
Speaker 3: thinks it's a very important case and he wanted to
20:00
Speaker 3: handle it. And I'm trying to see what else it says.
20:07
Speaker 2: While you're looking, I want to update our audience right now,
20:10
Speaker 2: the Supreme Court backs January sixth defendant, curbing the use
20:14
Speaker 2: of Enron law. This could affect President Trump as well
20:17
Speaker 2: as hundreds of January six cases. In this centers on
20:21
Speaker 2: the Enron rule that said that people who obstruct an
20:24
Speaker 2: official proceeding could be charged for that. This appears to
20:28
Speaker 2: them sort of put that on the sidelines and say, no,
20:30
Speaker 2: this was not a disruption of a official proceeding. We're
20:33
Speaker 2: talking something like nearly three hundred defendants, including Donald Trump,
20:37
Speaker 2: were charged under this two thousand and two law. So
20:41
Speaker 2: we are looking at that as we go. So if
20:44
Speaker 2: I'm one of the defendants, what happens June, like, do
20:47
Speaker 2: I go back and say.
20:48
Speaker 4: Yeah, what happens?
20:49
Speaker 3: You know, I don't know procedurally exactly how it works,
20:53
Speaker 3: but most likely the defendants in these cases, their attorneys
20:56
Speaker 3: will go to maybe the Justice Department will do something
20:59
Speaker 3: wholesale and you know, drop all that. The Justicepartment will
21:02
Speaker 3: just come in and drop all the charges that have
21:04
Speaker 3: to do with this and then you know, but it
21:07
Speaker 3: could it's going to cause a lot of hassles in that.
21:09
Speaker 3: So defendants might say I was sentenced to well, not
21:12
Speaker 3: many of them are serving long sentences. I was sentenced
21:15
Speaker 3: to six months, and now this came out, so maybe
21:18
Speaker 3: I should only be sentenced to three because I have
21:19
Speaker 3: two other charges. But I mean, this is about the
21:23
Speaker 3: interpretation of this law and whether you could interpret it
21:28
Speaker 3: as meaning more than you know the fact that it
21:33
Speaker 3: applies to January sixth actions that a decision. I'm trying
21:38
Speaker 3: to just see one thing and to see what they said.
21:41
Speaker 3: But in other words, it's they took the statute and
21:43
Speaker 3: it was a novel use of this statue. But they
21:45
Speaker 3: were trying to find something that would fit with the
21:48
Speaker 3: way the January sixth rioters went into Congress and obstructed
21:53
Speaker 3: what was going on there. So they were trying to
21:55
Speaker 3: find a way to fit it, and this, to them fit.
21:58
Speaker 3: But what the Supreme Court is saying is that, know,
22:01
Speaker 3: this is not about that kind of proceeding. This is
22:05
Speaker 3: about more about papers and documents, and that's what Enron
22:09
Speaker 3: was about. So you know, it's hard because I'm.
22:14
Speaker 4: You're talking as your as you read, Okay.
22:18
Speaker 3: So the case is going to go back to the
22:19
Speaker 3: DC Circuit and then it will assess whether the indictment
22:23
Speaker 3: can still stand, the Trump indictment in light of this
22:26
Speaker 3: new and narrow interpretation of the law. It'll be interesting
22:31
Speaker 3: to see what happened. Justice Jackson, who is siding with
22:34
Speaker 3: the with the five Conservatives here has a concurring opinion.
22:39
Speaker 4: It'll be interesting to see.
22:40
Speaker 3: Why she decided to side with the conservatives. And you know,
22:44
Speaker 3: we've seen this term that she's one of the liberal
22:47
Speaker 3: justices who has gone in different ways than the other
22:51
Speaker 3: liberal justices in different points in certain cases, and this
22:54
Speaker 3: is certainly one of them. So it's a narrow reading
22:58
Speaker 3: of this statute, is what it basically is. And I
23:02
Speaker 3: think you can see today we had there were all
23:05
Speaker 3: six to three decisions today.
23:07
Speaker 4: So I mean, this is a court so highly divided.
23:11
Speaker 3: And you know, at the beginning of the term, we
23:12
Speaker 3: had justices even Justice amy Cony Barrett and Justice Sonya
23:15
Speaker 3: so to Mayor and the Chief loves to say this,
23:17
Speaker 3: you know, most of our decisions, most of the decisions
23:20
Speaker 3: are unanimous.
23:21
Speaker 4: Well, those are unanimous.
23:23
Speaker 3: Because they are decisions in cases that you and the
23:26
Speaker 3: rest of the public doesn't hear about their technical or
23:28
Speaker 3: whatever when it comes to these hot button social issues,
23:32
Speaker 3: when it comes to this kind of a case things
23:33
Speaker 3: involving Trump, it's six to three yes.
23:36
Speaker 4: So this court is so divided.
23:39
Speaker 3: And this is exactly what they don't want to show
23:41
Speaker 3: the public that they're divided down, you know, ideological lines
23:45
Speaker 3: for the most part.
23:46
Speaker 2: Yeah, and Dune, it looks like we will see you
23:48
Speaker 2: on Monday. They're done for the day, and it looks
23:51
Speaker 2: like Supreme Court's last opinion day will be Monday. We
23:53
Speaker 2: know what that means. Trump Community will be coming at
23:55
Speaker 2: ten o'clock on Monday. We will be here with June
23:57
Speaker 2: Grasso for that Senior Legal and List joining us at Bloomberg.
24:02
Speaker 2: So again, we've had a lot going on. But the
24:04
Speaker 2: latest Supreme Court ruling is that they sided with the
24:07
Speaker 2: January sixth Capitol riot defendant in a ruling that could
24:09
Speaker 2: affect hundreds of prosecutions, including the criminal case in Washington
24:12
Speaker 2: against former President Trump. It Noah goes back to the
24:16
Speaker 2: d C Serga Court to rule on whether the indictments
24:18
Speaker 2: can still stand under this new interpretation of the Enron
24:22
Speaker 2: law that is designed to help ease official proceedings. That
24:28
Speaker 2: you cannot obstruct official proceedings. That is that Enron rule.
24:32
Speaker 2: All right, let's get more here with Caroline Frederickson, Senior
24:34
Speaker 2: Fellow at Brennan and Strategic Council Counselor on Democracy and
24:38
Speaker 2: Power at Open Markets Institute. Can you just walk me
24:42
Speaker 2: through what you expect to happen next?
24:45
Speaker 10: Well, I mean, I'm just like you. I'm trying to
24:47
Speaker 10: digest what happened but I think we're going to have
24:51
Speaker 10: a whole variety of cases that are going to be
24:54
Speaker 10: reopened for return to lower cour for you know, either
25:02
Speaker 10: dropping the charge all together and proceeding on the other charges,
25:06
Speaker 10: or adding further you know, evidence and qualifications to make
25:14
Speaker 10: it more pertinent to the actual connection.
25:19
Speaker 9: To the destruction of evidence.
25:20
Speaker 10: And you know, I think that's going to be obviously challenging.
25:23
Speaker 10: There are a lot of people who've been convicted already.
25:27
Speaker 5: Caroline, to what extent are you considering this a win
25:31
Speaker 5: for Donald Trump a positive development?
25:36
Speaker 10: You know, it's really hard to say on you know,
25:37
Speaker 10: the little that you know, we know, having just glanced
25:40
Speaker 10: at the headnotes to try and absorb it. But he's
25:43
Speaker 10: certainly going to make it out like it's a win
25:45
Speaker 10: and that the Justice Department has overreached and that it
25:49
Speaker 10: continues to overreach and his and it goes to his
25:53
Speaker 10: story about the vendetta that is has been waged against
25:58
Speaker 10: him by an over politicized Department of Justice. So he's
26:04
Speaker 10: going to call it a win regardless of what anybody
26:06
Speaker 10: else says. To the extent that it actually affects any
26:09
Speaker 10: case against him, We'll have to see again. I think
26:12
Speaker 10: the Justice Department is going to reformulate these cases. It's
26:15
Speaker 10: going to try and establish in some that they have
26:18
Speaker 10: the requisite connection to the charges that are listed. And
26:23
Speaker 10: this is you know, this is an interesting case because
26:25
Speaker 10: it follows on an earlier case dealing with the destruction
26:29
Speaker 10: of a fish. Actually when some fisher fisherman was was
26:36
Speaker 10: was picked up for violating laws regarding the kind of
26:40
Speaker 10: size and the fish he was he was pulling up
26:43
Speaker 10: and uh, and he threw he threw back some fish,
26:45
Speaker 10: and he was charged under this law. And the question was,
26:48
Speaker 10: you know, is a fish a tangible object under the law,
26:52
Speaker 10: And and they found in fact in that case that
26:56
Speaker 10: it wasn't. That it was supposed to be related to
26:58
Speaker 10: a document and so forth. So we're sort of seeing
27:00
Speaker 10: this as of a piece with that. Kagan was of
27:04
Speaker 10: dissent in both in both cases here this one and
27:08
Speaker 10: that one, your prior case, and so I think, you know,
27:12
Speaker 10: it'll be she's been trying to make the argument that
27:14
Speaker 10: this otherwise word in there is a broad sweeping term
27:19
Speaker 10: that should allow anything that's connected to the obstruction of
27:21
Speaker 10: an official proceeding. Then it doesn't have to be related
27:24
Speaker 10: to a particularly destruction of evidence, and so you know,
27:28
Speaker 10: I think, will the Justice Department be able to now
27:31
Speaker 10: show that they were trying to inhibit the actual uh
27:35
Speaker 10: counting of the ballots and you know, a physical piece
27:39
Speaker 10: of evidence a document. Maybe they will and they may
27:43
Speaker 10: be able to, but that remains to be seen.
27:46
Speaker 2: If they don't or they can't, then what happens with
27:49
Speaker 2: all of these defendants, including President Trump.
27:54
Speaker 10: Well, I mean just remember that there were multiple charges
27:56
Speaker 10: in all of these cases, and so I think there
28:00
Speaker 10: are probably any of them who were uh prosecuted simply
28:04
Speaker 10: on this on this particular charge. This was you know,
28:06
Speaker 10: I think an additional one that that allowed them to
28:10
Speaker 10: enhance these sentences, and so I think in this case,
28:13
Speaker 10: you know, they will be a potential lessening of the sentences.
28:17
Speaker 10: Some people will be sentenced to time served, uh and
28:21
Speaker 10: some people, you know, will perhaps get off altogether because
28:25
Speaker 10: they're their charges are so minimal that they will be
28:28
Speaker 10: uh uh kind of slap on the wrist. So I
28:31
Speaker 10: think it'll be seen, I mean there, it will remain
28:33
Speaker 10: to be seen. There'll be a lot of different outcomes
28:35
Speaker 10: depending on the level of engagement with with President Trump.
28:40
Speaker 10: You know, he obviously had greater involvement in in all
28:44
Speaker 10: of the different UH back and forth between members of
28:47
Speaker 10: his campaign and variety of people working on on thwarting
28:52
Speaker 10: the counting of ballots and UH on January sixth. There there,
28:59
Speaker 10: there they may be able to and Jack Smith may
29:01
Speaker 10: be able to assemble a greater amount of evidence that
29:03
Speaker 10: will continue to keep these charges more relevant for Donald
29:06
Speaker 10: Trump himself.
29:08
Speaker 5: Can we actually zoom out and could you talk a
29:10
Speaker 5: little bit more about the two thousand and two law
29:13
Speaker 5: that grew out of Enron that's kind of at the
29:16
Speaker 5: center of the question this decision.
29:20
Speaker 10: Right, Well, you know, it was an interesting in that
29:23
Speaker 10: particular situation. You had a statue that was not able
29:29
Speaker 10: to capture somebody who actually destroyed the documents and destroyed
29:33
Speaker 10: physical evidence, and instead it went after those who encouraged
29:41
Speaker 10: or embedded, but it didn't actually go after the direct perpetrator.
29:44
Speaker 10: And so what Congress tried to do is strengthen the
29:47
Speaker 10: law so that it would be broader in scope and
29:50
Speaker 10: enable the prosecution of those who'd actually been directly involved
29:54
Speaker 10: in trying to evade.
29:59
Speaker 9: Prosecution.
30:01
Speaker 10: So it let the big fish, so to speak, off,
30:05
Speaker 10: and those who are less responsible could be prosecuted. So
30:09
Speaker 10: they tried to fix that, and this this irony perhaps
30:14
Speaker 10: is that, at least according to the Supreme Court, they
30:16
Speaker 10: didn't do a very good job of it.
30:18
Speaker 2: Yeah, Caroline, we appreciate it. Thank you for walking us
30:21
Speaker 2: through all of this. Caroline Frederickson, Senior Fellow at Brennan
30:23
Speaker 2: and strategic counselor on Democracy and Power at Open Markets Institute.
30:27
Speaker 2: The Supreme Court is done for the day. They're coming
30:30
Speaker 2: back on Monday, and the Supreme Court will be issuing
30:32
Speaker 2: the Trump Community ruling on Monday around ten am. In
30:36
Speaker 2: that hour, we are going to have live coverage of that,
30:39
Speaker 2: so definitely stay tuned with us for that.
30:43
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
30:47
Speaker 1: weekdays at ten am Eastern on Apple car Play and
30:50
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30:53
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30:58
Speaker 2: With Radio Malex Deel Longside Emily, who just got a
31:00
Speaker 2: nice dose of Supreme Court awesomeness on her Friday. She
31:04
Speaker 2: helps me out. Paulsmini sitting on a beach off today.
31:07
Speaker 2: This is Bloomberg Intelligence. We bring you all the top
31:09
Speaker 2: news in business and finance and economics. There are lens
31:11
Speaker 2: of our Bloomberg Intelligence analysts. They cover two thousand companies
31:14
Speaker 2: and one hundred and thirty industries worldwide. Let's go to
31:17
Speaker 2: one of them right now, Nathan, Dean, Bloomberg Intelligence Senior
31:20
Speaker 2: policy analysts. Lots of stuff happening in DC. We are
31:23
Speaker 2: keeping an eye on those Supreme Court decisions, but we
31:26
Speaker 2: cannot lose sight of the complete disaster that was yesterday
31:29
Speaker 2: and that debate between President Trump and President Biden. I
31:32
Speaker 2: think the big question today, Nathan, is what does it
31:35
Speaker 2: look like to get Biden off the ticket? Like legally,
31:38
Speaker 2: how does that actually happen?
31:41
Speaker 11: So it's going to have to come from the President himself.
31:43
Speaker 11: I mean, this is going to be a decision that
31:45
Speaker 11: he's going to have to make, and I think that,
31:46
Speaker 11: you know, we'll see over the weekend as he's fundraising
31:49
Speaker 11: and meeting with advisors. But as of this morning, he
31:52
Speaker 11: was even saying to journalists that he is going to
31:54
Speaker 11: be on the ticket and he's looking forward to a
31:57
Speaker 11: second debate in September. Now, the way would work is
32:00
Speaker 11: that if President Biden were to decide that he's not
32:03
Speaker 11: going to run, then we go to the convention and
32:05
Speaker 11: the delegates would have to figure it out.
32:08
Speaker 3: Now.
32:08
Speaker 11: President Biden already has enough delegates to secure it in
32:10
Speaker 11: the nomination, but if he were to say I'm not
32:13
Speaker 11: going to run, he could release those delegates to then
32:16
Speaker 11: vote for whoever. But ultimately then it would become a
32:19
Speaker 11: race of who wants to be the nominee for three
32:22
Speaker 11: months before the election and trying to take down President Trump.
32:25
Speaker 11: It's gonna be very messy. You would have Kamala Harris
32:28
Speaker 11: the vice president. You have a lot of governors probably
32:30
Speaker 11: thinking about it. But if this were to happen, and
32:33
Speaker 11: it would happens soon, it's gonna be something that we
32:35
Speaker 11: haven't seen since Lyndon Johnson in nineteen sixty eight.
32:39
Speaker 5: Nathan, how soon must a decision be made? It's almost July.
32:45
Speaker 5: Biden doesn't seem to have a lot of time here.
32:47
Speaker 11: No, so, but he does have the advantage that the
32:49
Speaker 11: Democrats are going second in terms of the conventions, So
32:52
Speaker 11: the Republicans are meeting in July fifteenth, the Democrats aren't
32:55
Speaker 11: meeting until August, so really before the convention, there's a
33:00
Speaker 11: lot of bit of time in terms of least the
33:02
Speaker 11: logistics of getting on the ballot. If this were to
33:04
Speaker 11: happen after the election, Essentially Democrats would have to go
33:07
Speaker 11: to the polls and vote for Joe Biden, knowing that
33:09
Speaker 11: they would get somebody else. But if President Biden were
33:12
Speaker 11: to decide tomorrow that he's decided he's not going to run,
33:15
Speaker 11: you're going to see a scramble amongst the Democratic Party
33:18
Speaker 11: to try and figure out, Okay, is Kamala Harris the
33:21
Speaker 11: next nominee. You know, she doesn't pulling, She isn't pulling
33:24
Speaker 11: all that well against President Trump on a one on
33:26
Speaker 11: one race. You know, is Governor Newsome, Governor Pritzker, Governor Whitmer.
33:30
Speaker 11: You know, the governors I think would be able to
33:32
Speaker 11: put their hands up there and say we're interested. So
33:34
Speaker 11: you would almost have like this like uh, you know
33:37
Speaker 11: reality TV show, if you will, trying to fre exactly.
33:42
Speaker 11: And then ultimately it comes down to a vote in Chicago,
33:45
Speaker 11: which you know the last time, you know, you know,
33:48
Speaker 11: Chicago obviously doesn't have the best reputation when it comes
33:50
Speaker 11: to democratic conventions and open conventions, but you know, it
33:55
Speaker 11: would be quite a show in August.
33:56
Speaker 2: Hey, Nathan, what.
33:57
Speaker 4: Do you think is realistically going to happen?
34:00
Speaker 11: So look, this decision is going to come from President
34:03
Speaker 11: Biden and President Biden himself. I mean, it is extremely
34:06
Speaker 11: difficult for a politician, Republican or Democrat, who has served
34:10
Speaker 11: their entire life and is used to being a fighter
34:14
Speaker 11: to then say, you know what, I'm going to take
34:16
Speaker 11: a step back and it's time for me to move on.
34:18
Speaker 11: And so you know, we've seen this with a lot
34:20
Speaker 11: of other politicians, both in Congress and you know, the
34:23
Speaker 11: executive branch. Now, I think it comes down to two things. One,
34:26
Speaker 11: if President Biden believes that last night was just because
34:29
Speaker 11: of the cold and that he can then change the
34:32
Speaker 11: narrative in the next few months, he's going to stay in.
34:34
Speaker 11: If there's something more serious that President Biden begins to
34:37
Speaker 11: believe that there is something that you know, that this
34:39
Speaker 11: is an issue, then I think eventually we may say
34:43
Speaker 11: we're going to step out.
34:44
Speaker 4: All right, Nathan, we got to leave it there.
34:46
Speaker 2: Thank you so much for that, Nathan Dean Bloomberg Intelligence
34:48
Speaker 2: Senior Policy Analystic.
34:51
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
34:55
Speaker 1: weekdays at ten am Eastern on applecard Play and and
34:58
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35:01
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35:05
Speaker 1: Just say Alexa Play Bloomberg eleven thirty.
35:09
Speaker 2: We do want to keep you updated on the Supreme Court.
35:11
Speaker 2: We did get run one ruling that's coming out. The
35:13
Speaker 2: US Supreme Court reinstated in Oregon city's law banning public camping,
35:17
Speaker 2: and this is its first ruling on homelessness in about
35:21
Speaker 2: four decades. We're going to get you much more on
35:23
Speaker 2: this with June Grasso in just a moment. Let's go
35:25
Speaker 2: back to Nike and just the level of the stock
35:28
Speaker 2: drop that we're seeing here.
35:30
Speaker 4: Put him.
35:30
Speaker 2: Goyle, Senior US e Commerce and retail analyst at Bloomberg Intelligence,
35:34
Speaker 2: joins us. Now put him, I guess what would a
35:38
Speaker 2: turnaround for this company at this point look like and
35:41
Speaker 2: how long would something like that take?
35:44
Speaker 7: Sure, So I think it's all product dependent. They have
35:47
Speaker 7: introduced a new product as a recent and that product
35:50
Speaker 7: has done well, especially in their air franchise. I think
35:53
Speaker 7: it's a matter of time. Nike really took its foot
35:56
Speaker 7: off the pedal when it came to innovation since the pandemic,
35:59
Speaker 7: and now it's just starting to push the pedal harder.
36:03
Speaker 7: It won't happen overnight. We think it's going to take
36:05
Speaker 7: at least six to twelve months. So this year their
36:08
Speaker 7: fiscal twenty twenty five will be a wash year. It
36:11
Speaker 7: will be down, and I think we will have to
36:13
Speaker 7: look past that in another six months. But I do
36:16
Speaker 7: think the Nike has the ability to bring back innovation.
36:20
Speaker 7: It is the largest at leisure brand, and while it
36:23
Speaker 7: has lost shared at Hooka on and Running and Adidas
36:27
Speaker 7: in the lifestyle category, if they can get the right
36:30
Speaker 7: product out, they can do well. Their dunks for a
36:32
Speaker 7: huge success, but they need more.
36:35
Speaker 5: Can you talk about how much of the movement that
36:38
Speaker 5: we're seeing in Nike today has to do with company
36:41
Speaker 5: specific news and how much of it has to do
36:44
Speaker 5: with traders kind of telling us a signal about the
36:48
Speaker 5: consumer maybe being weaker than perhaps the numbers that we
36:52
Speaker 5: got this morning, the ego data that we got this morning,
36:54
Speaker 5: suggesting sure.
36:56
Speaker 7: I would say that the bulk of the move that
36:58
Speaker 7: you're seeing today is company specific, it's not the macro.
37:02
Speaker 7: When I look at the at leisure space, there's a
37:04
Speaker 7: lot of tailwinds in there, especially the sporting events. We
37:07
Speaker 7: have the paras Olympics coming up, and there is still
37:10
Speaker 7: brand Heat for sports to be outdoors. That provides a
37:14
Speaker 7: benefit to these at leisure brands. So I'd say, while
37:17
Speaker 7: the consumer is being picky and they're choosy, they're still
37:20
Speaker 7: spending where they want to spend and if you have
37:22
Speaker 7: the product, they will come to you.
37:25
Speaker 2: But nevertheless, why is it going so poorly? Like they
37:31
Speaker 2: want to sell direct to consumer and like not do
37:33
Speaker 2: the retail stores as much. But even that strategy didn't work.
37:36
Speaker 2: I mean, how do they fix a problem that has
37:39
Speaker 2: so many tentacles.
37:42
Speaker 7: The problem is at the core. The problem is at
37:45
Speaker 7: the product. So if they can fix the product, I
37:48
Speaker 7: think the problems almost resolve in themselves. It's not that
37:51
Speaker 7: Nike has lost its brand Heat. They still in basketball
37:55
Speaker 7: are the most preferred brand, They have the best sports flares,
37:59
Speaker 7: they have the highest endorsers. It's really in lifestyle where
38:03
Speaker 7: they're struggling and they've lost here, and you could say
38:05
Speaker 7: in running too. Those are the two categories that they
38:07
Speaker 7: need to bring forward more innovation. So I think the
38:10
Speaker 7: answer to their problem is product. It's innovation and Nike
38:15
Speaker 7: just needs to qush harder. And we'll have to watch
38:17
Speaker 7: execution to see over the next six months if they
38:20
Speaker 7: can really deliver on what they're promising.
38:22
Speaker 2: So Emily, Wait, so you do have Nike's or you don't.
38:25
Speaker 2: It's the Adidas ones that you don't have. The Zambas
38:27
Speaker 2: you don't have.
38:28
Speaker 5: I don't have the Sambus, but it really is incredible.
38:32
Speaker 5: I mean I like to think that I follow like
38:35
Speaker 5: sneaker trends, and the Adidas Szambus is a lifestyle sneaker
38:40
Speaker 5: that is so popular and has really driven a lot
38:43
Speaker 5: of Adidas's growth. Punam are you saying that Nike kind
38:46
Speaker 5: of has to come up with a product similar to that,
38:50
Speaker 5: kind of a product that everyone on the street is
38:53
Speaker 5: I guess obsessed with and wants to wear.
38:55
Speaker 6: Yeah.
38:56
Speaker 7: Absolutely, and they did right. They had the Air Forces,
38:59
Speaker 7: which were a life style shoe. They had their Dungks,
39:02
Speaker 7: which became a lifestyle shoe.
39:03
Speaker 9: But they need more.
39:04
Speaker 7: They need to continue to keep innovating because now they're
39:06
Speaker 7: camping those tough comparisons and they just need more innovation.
39:10
Speaker 7: So it's really really getting the product right here.
39:13
Speaker 2: I just like, how much more can you innovate a sneaker?
39:16
Speaker 4: Like?
39:16
Speaker 2: I mean, this is such a dumb question. I don't
39:18
Speaker 2: we're sneakers I have a weird foot. I gotta wear bionics,
39:21
Speaker 2: like you know, my feet are old feet. But I mean,
39:24
Speaker 2: how hard is it to innovate a sneaker?
39:27
Speaker 7: Well, I mean the palm was not really that innovative, right,
39:29
Speaker 7: I mean I grew up wearing salm as of the kids.
39:31
Speaker 7: So it's about just getting people comfortable and getting the
39:36
Speaker 7: trend right, getting the look right, to feel right, and
39:38
Speaker 7: being where the customer is and really bringing your brand
39:42
Speaker 7: forward with those customers. Look, Nike is still the largest
39:46
Speaker 7: active were brand, It's still the dominant player in sneakers,
39:51
Speaker 7: and Hoka and On are very small compared to Nike,
39:54
Speaker 7: so when they grow double digits, it's a small fraction
39:58
Speaker 7: of what Nike's sales are. So as I really do
40:01
Speaker 7: think that they can. They can bring something forward and
40:05
Speaker 7: really do well. If they get the product, and remember
40:07
Speaker 7: they also have to endorse the product right, the product
40:10
Speaker 7: could come out. But then they need athletes, they need celebrities,
40:14
Speaker 7: They need influencers to make that product develop grand heat
40:18
Speaker 7: and catch steam into the marketplace, because that's how it works,
40:21
Speaker 7: that's how products selve.
40:22
Speaker 2: Yeah, they need Emlin Graffeto. I think it's cool like
40:25
Speaker 2: her and all her buddies. She's going to be like,
40:26
Speaker 2: my cool like person.
40:29
Speaker 4: Like who knows supports?
40:31
Speaker 2: You have weird feed Emily, what is it?
40:34
Speaker 9: It's a life changing event with your sneaker or lifestyle, a.
40:37
Speaker 2: Life lifestyle sneakers like her, not her, she can't wear those,
40:42
Speaker 2: but like it's just like that's what all her cool
40:44
Speaker 2: friends wear. I have planner fasciitis, like you wear to
40:47
Speaker 2: hang out as opposed to a running sneaker.
40:49
Speaker 5: That's going to look more like.
40:51
Speaker 2: A John has two pairs of shoes.
40:52
Speaker 4: So let's just keep that in mind.
40:54
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41:02
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41:13
Speaker 2: All right, let's get to what's happening in the bond market.
41:15
Speaker 2: You're right, yields have moved higher despite the fact we
41:17
Speaker 2: got that PCE that seemed to be interpreted as okay,
41:19
Speaker 2: the Fed can cut It's okay. Inflation is coming down,
41:23
Speaker 2: spending an income is hanging in Okay, Danielle de Martino
41:26
Speaker 2: Booth is CEO and chief strategist for QI Research. Hey,
41:30
Speaker 2: what was your interpretation, Danielle about the data and then
41:33
Speaker 2: what we're seeing in the bond market right now.
41:36
Speaker 12: So, you know, a thanks for having me this morning.
41:39
Speaker 12: It's great to be with you again. And this is
41:42
Speaker 12: a real head scratcher for me. You know, unrounded zero
41:45
Speaker 12: point zero eight percent increase in the core the Fed's
41:50
Speaker 12: year end target is two point eight percent for the
41:53
Speaker 12: core PCE, it's down to two point six percent. Same
41:56
Speaker 12: with its unemployment target for the end of the year
41:59
Speaker 12: four point z z or percent.
42:00
Speaker 9: That's where the unemployment rate is right now.
42:02
Speaker 12: So it would seem to be, you know, a green
42:05
Speaker 12: light for the Fed to cut rates here. And we
42:09
Speaker 12: had University of Michigan see an appreciable decline in inflation
42:12
Speaker 12: expectations in both the short.
42:14
Speaker 9: And long term.
42:15
Speaker 12: So go figure on why bond yields are up. That's
42:18
Speaker 12: my honest answer here.
42:20
Speaker 5: So what about when you look to the rest of
42:23
Speaker 5: the year, we're just at the halfway mark. What do
42:26
Speaker 5: you really see is going to be drying the cross
42:29
Speaker 5: asset market action, So you know.
42:33
Speaker 12: There's a real tug of war there are a lot
42:36
Speaker 12: of good observations being made right now. But the K
42:39
Speaker 12: shaped economy, the haves and the have nots. You see
42:42
Speaker 12: that when you get the second print for the University
42:44
Speaker 12: of Michigan, and that you get tersiles of income broken out,
42:49
Speaker 12: and you see that there's a lot of anxiety among
42:53
Speaker 12: the lowest income earners. We've got an institutional client at
42:56
Speaker 12: QI who was saying that a Tampa food bank is
43:00
Speaker 12: on from twenty thousand to forty thousand per month households,
43:04
Speaker 12: that it's serving that a lot of these nonprofits are
43:06
Speaker 12: just overwhelmed.
43:08
Speaker 9: With the amount of demand.
43:09
Speaker 12: As we're seeing again, the difference between twenty twenty three
43:12
Speaker 12: and twenty twenty four is twenty twenty three, we're really
43:15
Speaker 12: white collar layoffs six to nine months of severance.
43:18
Speaker 9: And then you hear from the likes of Walgreens.
43:19
Speaker 12: Yesterday, you know, up to maybe sixty thousand jobs in
43:23
Speaker 12: peril there with all of those stores closing these types
43:27
Speaker 12: of job cuts.
43:29
Speaker 9: The people who lose their jobs only get six to
43:31
Speaker 9: nine weeks of severance. So it's a huge difference.
43:34
Speaker 2: So fair enough, Okay, So if we just sort of
43:37
Speaker 2: go with yield, are doing stuff, we're end of the
43:39
Speaker 2: second quarter, so things are moving, et cetera. Do you
43:41
Speaker 2: think the data that we got today can green light
43:44
Speaker 2: a cut from the FED? And when do you think
43:46
Speaker 2: that could be green lit?
43:48
Speaker 9: I do.
43:49
Speaker 12: We have seen revisions out of the state of California
43:52
Speaker 12: that show that net job losses through the second half
43:56
Speaker 12: of twenty twenty three, the last six months of twenty
43:58
Speaker 12: three were negative. We're going to get several revisions out
44:01
Speaker 12: of the Census Bureau for payrolls before even the July
44:06
Speaker 12: FED meeting, and certainly a very large one in August
44:09
Speaker 12: before the September meeting. So I'm looking at September as
44:12
Speaker 12: the definitive launch date for FED rate cuts.
44:15
Speaker 5: Does the equity market need a rate cut in September?
44:20
Speaker 5: Because here we are, we're at all time highs today
44:24
Speaker 5: and we still have, you know, yields moving a little
44:26
Speaker 5: bit higher. But I'm just wondering if we don't get
44:30
Speaker 5: that cut, maybe it's pushed out even further, maybe into
44:34
Speaker 5: twenty twenty five. Does it tank stocks you think? Or
44:38
Speaker 5: are we able to kind of stay here at these
44:41
Speaker 5: all time highs and continue chugging along for the rest
44:44
Speaker 5: of the year.
44:46
Speaker 12: I think the stock market does hang in there. Historically speaking,
44:50
Speaker 12: until the FED actually cuts rates, stocks are very well behaved.
44:55
Speaker 12: It's only after the FED actually makes that rate cut,
44:58
Speaker 12: no jaw boning, no quantitative tightening or quantitative using, but
45:02
Speaker 12: actual rate cuts that start, then you see stocks correct.
45:06
Speaker 9: Then you see stocks decline.
45:08
Speaker 12: And that's again historically back in the post war era,
45:12
Speaker 12: how the script is played out.
45:14
Speaker 2: Hey, Danielle, walk us through what you're expecting for jobs
45:16
Speaker 2: Friday next week, so we get the PCE. It seems
45:20
Speaker 2: to be okay. The infleetion story seems to be adjusting right,
45:23
Speaker 2: that super core is coming down. The data this week
45:27
Speaker 2: was very lumpy, not great, particularly when it comes to housing.
45:31
Speaker 2: You heard Mary Daily talking about worries about growth for example,
45:35
Speaker 2: and we had also worries about are we actually restrictive
45:39
Speaker 2: enough and if we're not, then that could really spur
45:41
Speaker 2: more growth issues. What reflection do you think we're going
45:44
Speaker 2: to get in that in the jobs from number next week?
45:48
Speaker 12: So I would be surprised, just on a pure databasis
45:52
Speaker 12: if we didn't see a little bit more weakness at
45:55
Speaker 12: the margin in the jobs data. The survey week for
45:59
Speaker 12: non farm hayrolls did see an uptick in both initial
46:03
Speaker 12: and continuing claims. Continuing claims in that survey week rising
46:07
Speaker 12: to the highest since twenty twenty one, and that is
46:11
Speaker 12: when the survey data are collected by their Buer of
46:13
Speaker 12: Labor statistics. So I would expect to see this weakness
46:16
Speaker 12: again a lot of the layoffs we're seeing. The reason
46:19
Speaker 12: we're seeing the four week moving average and initial jobless
46:21
Speaker 12: claims steadily march upward over the last few months is
46:25
Speaker 12: because the people who are losing their jobs get a
46:29
Speaker 12: very short period of pay from their former employer before
46:33
Speaker 12: they're filing that initial jobless claim.
46:35
Speaker 9: We're seeing that of very steadily rise this year.
46:39
Speaker 5: So that's the macro I want to go super micro maybe,
46:43
Speaker 5: and we don't have that much time left, Danielle, But
46:46
Speaker 5: what do you make of the volatility in these pet stocks?
46:50
Speaker 5: After Roaring Kitty comes on Twitter he posts a picture
46:54
Speaker 5: of a dog. I mean, just talk about what does
46:58
Speaker 5: this tell you about the market that we're in that
47:01
Speaker 5: we're still seeing He didn't even mention pet COO, and
47:04
Speaker 5: yet the stock kind of went crazy after his tweet.
47:08
Speaker 12: So again, I think this goes back to the point
47:10
Speaker 12: that I made earlier, and that would be one that
47:13
Speaker 12: we have not seen any capitulation in this stock market.
47:17
Speaker 12: The fervor to speculate is still very much alive, what
47:21
Speaker 12: we call animal spirits.
47:23
Speaker 9: It's still out there.
47:24
Speaker 12: People are still ready to gamble on the stock market,
47:27
Speaker 12: as if the pandemic just hit the shores. So it
47:31
Speaker 12: again shows you that there's a great, big willingness to
47:33
Speaker 12: take risk.
47:35
Speaker 2: Well said Emily's quoting you right now for an article.
47:38
Speaker 2: She was very excited to ask you that question. Yeah,
47:40
Speaker 2: and then you need it's too much liquidity. It's a
47:42
Speaker 2: lot of cool liquidity out there, even if that upside
47:44
Speaker 2: didn't continue into today. All right, Danielle, We really appreciate
47:47
Speaker 2: Danielle de Martino, Booth CEO and chief strategist for a
47:50
Speaker 2: QI Research, joining us there.
47:53
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