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Trump Floats Temporarily Withdrawing Blanche Nomination · Balance of Power

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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the
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Speaker 2: Live from Washington here.
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Speaker 3: On Balance of Power, we continue our conversation about politics
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Speaker 3: and apparently a confirmation process now on Ice that would
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Speaker 3: be Todd Blanche, the President's acting attorney general, because of
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Speaker 3: as we already laid out, the opposition from two senators
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Speaker 3: who have crossed the president, or maybe it was the
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Speaker 3: other way around. They want actual hard paper and a
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Speaker 3: guarantee that the President's proposed anti weaponization fund will not happen,
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Speaker 3: and they have not received it yet. The President's not
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Speaker 3: pleased about this, and we bring in Tyler Kendall from
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Speaker 3: the North Lawn of the White House. He was out
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Speaker 3: posting early on this, Tyler, and it looks like he
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Speaker 3: says he might even withdraw Todd Blanche's name.
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Speaker 4: Well, Joe, that's the latest strategy point from President Trump
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Speaker 4: that we could see Todd Blanche's nomination withdrawn. On a
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Speaker 4: temporary basis, seeming to indicate that he would then renominate
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Speaker 4: him after these two Republican senators John Cornyn, the Republican
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Speaker 4: from Texas and Tom Tillis, the Republican from North Carolina,
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Speaker 4: or out of office after the midterm elections. Now, the
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Speaker 4: understanding here is that Todd Blanche would very likely continue
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Speaker 4: in an acting basis, so not much would change, But
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Speaker 4: it's an interesting political calculus considering that there are no
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Speaker 4: assurances that Republicans will maintain control of the Senate Chamber.
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Speaker 4: So the idea had been trying to get these nominees
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Speaker 4: through as quickly as possible if they do need Senate confirmation. Now,
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Speaker 4: as you're laying out here, the demands from these senators
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Speaker 4: is that there has to be something actually in writing,
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Speaker 4: put pen to paper, that that one point eight billion
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Speaker 4: dollar fund, that alleged anti weaponization fund, those plans are
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Speaker 4: being scrapped. As well as that these senators want assurances
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Speaker 4: that this provision in that legal settlement struck between President
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Speaker 4: Trump and the IRS giving him members of his family
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Speaker 4: business immunity from this past IRS audits that this will
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Speaker 4: not extend to any third parties. They want a little
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Speaker 4: bit more of a firmer guardrail around that IRS settlement.
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Speaker 5: This point, we'll have to see where it goes from here.
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Speaker 4: But President Trump clearly putting out one option when it
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Speaker 4: comes to holding firm I guess with his political agenda.
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Speaker 6: Yep, So he has options domestically, Tyler. He also has suggested,
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Speaker 6: and it's been widely reported, that he's considering his options
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Speaker 6: for escalation or the lack thereof when it comes to Iran.
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Speaker 6: Until yesterday, it seems that he wanted to pursue diplomacy
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Speaker 6: anew and that surprise attack on US forces in Jordan
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Speaker 6: led to the US retaliating in strikes last night. Do
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Speaker 6: we know if there will be another round this evening?
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Speaker 4: Well, Kayley, At this point the White House has kept
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Speaker 4: both options on the table, one for further escalation and
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Speaker 4: this continuation of strikes and retaliation that cycle it feels
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Speaker 4: like we're in, but also the potential that we could
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Speaker 4: see maybe some sort of diplomatic channel open here. We
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Speaker 4: did hear from Pakistan's Foreign ministry earlier today, of course,
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Speaker 4: a key mediator in this conflict, seeming to imply that
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Speaker 4: there are negotiations happening between the US and Iran when
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Speaker 4: it comes to potentially reopening the strait of her moves.
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Speaker 4: But at the same time, pair of that with other
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Speaker 4: headlines this morning that said, Irani and state media reported
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Speaker 4: that the IRGC had targeted again US forces in Kuwait
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Speaker 4: and Jordan. And we have this now potential, as you
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Speaker 4: both were outlining at the top of the program, that
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Speaker 4: the conflict could spill over to the broader region, including
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Speaker 4: the fact that we saw overnight two L and G
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Speaker 4: tankers hit off the coast of Egypt, marking the first
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Speaker 4: such attacks in Egyptian water since the conflict began. So,
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Speaker 4: Joe and Kelly, there is a lot of room for
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Speaker 4: escalation here.
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Speaker 6: Indeed, all right, Tyler Kendall reporting live from the north
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Speaker 6: lawn of the White House for us.
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Speaker 5: Thank you so much, and as we.
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Speaker 6: Consider the room that exists for escalation or for diplomacy,
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Speaker 6: we turn now to former Congressman Jane Harmon, the former
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Speaker 6: ranking member of the House Intelligence Committee, who is here
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Speaker 6: with us in our Washington, d C.
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Speaker 5: Studio.
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Speaker 6: Good to see you again, Jane, Thanks for being back
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Speaker 6: on Gloomberg TV and radio. We seem to be stuck
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Speaker 6: in this cycle here of we're talking, we're striking we're talking,
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Speaker 6: we're striking. What breaks us out of it and in
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Speaker 6: what direction?
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Speaker 7: I just think Trump is afraid to lose, and he's
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Speaker 7: keeping everything going hoping he won't lose. But guess what.
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Speaker 7: I think he's likely to lose, and not just lose here,
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Speaker 7: but the fact that missile interceptors are tied up in
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Speaker 7: the Middle East instead of going to Ukraine, or instead
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Speaker 7: of being prepositioned in Asia against a possible China takeover
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Speaker 7: of Taiwan means he may lose elsewhere. So I think
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Speaker 7: this is hugely dangerous, even more destabilizing than before. The
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Speaker 7: Senate's about to go out. The house is out. There
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Speaker 7: hasn't been a really serious, focused authorization to use force here,
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Speaker 7: and we could lose more Americans while we're at it.
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Speaker 3: What does Jane Harmon think when Saudi Arabia puts fighter
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Speaker 3: jets in the air to strike targets in Iraq, when
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Speaker 3: Egypt is being targeted by we're not even sure who
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Speaker 3: drones are hitting LNG We talked about Kuwait in Jordan.
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Speaker 3: At what point do we start calling this a Middle
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Speaker 3: Eastern war?
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Speaker 2: Well, I'll go right there.
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Speaker 7: It is a Middle Eastern war. It's not that every
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Speaker 7: country is at war, but every country is a target.
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Speaker 7: Think Egypt hasn't been a target. Think Jordan, which is
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Speaker 7: a target, and the Saudis haven't been getting along with
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Speaker 7: the neighborhood. So maybe there's some play there that I'm missing.
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Speaker 7: But my point is the danger of this spreading is huge,
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Speaker 7: and we are tying up what's left of our pathetic,
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Speaker 7: fragile defense industrial base in a region where it shouldn't
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Speaker 7: be well.
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Speaker 6: That probably is sending something of a signal to our adversaries. Jane,
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Speaker 6: to your point about we could lose elsewhere if we
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Speaker 6: lose in the Middle East, is that genie already out
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Speaker 6: of the bottle? Or if all of this were to
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Speaker 6: stop now, is the US adequately prepared to address needs
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Speaker 6: should they arise in other things?
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Speaker 2: Not really.
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Speaker 7: I chaired something called the Commissioner on the National Security Strategy.
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Speaker 7: I know you both have read the report and loved
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Speaker 7: it two years ago, and on a unanimous bipartisan basis,
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Speaker 7: we said the DIB the defense industrial base is anemic.
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Speaker 7: We made all kinds of suggestions, many of which were ignored.
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Speaker 7: We also said our diplomacy was being starved and that's
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Speaker 7: a huge risk here too. Because I don't know who
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Speaker 7: is talking to the Iranians and whether we have a serious,
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Speaker 7: sophisticated team doing this in Pakistan or anywhere else. But yes,
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Speaker 7: think Ukraine. Zelenski was just here begging for missile interceptors.
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Speaker 7: Trump promised them and promised that some US prime would
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Speaker 7: be able to build some of these with Ukraine in Ukraine. However,
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Speaker 7: that's going to take years, and Ukraine is a big,
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Speaker 7: fat target right now for Russia.
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Speaker 3: I want to ask you about the rhetoric that the
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Speaker 3: President has been using, because there's a lot of tough talk,
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Speaker 3: even as he says that they're begging for a deal
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Speaker 3: and we could have a breakthrough.
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Speaker 2: We're going to have a deal, you know.
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Speaker 3: Donaldly as he threatened civilian targets like power plants and
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Speaker 3: water desalination plants. He told Fox yesterday he was going
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Speaker 3: to beat the fings out of him, Which draws me
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Speaker 3: to this quick if you would data from Cardiff University,
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Speaker 3: you spent enough years of politics to appreciate this cursing
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Speaker 3: is in presidents, vice presidents, presidential hopefuls have used profanity
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Speaker 3: at least six hundred and ninety two times in public
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Speaker 3: since nineteen nineteen, six hundred and five of those were
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Speaker 3: in the last ten years. A lot of it is
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Speaker 3: because of Donald Trump's approach to politics.
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Speaker 2: Bernie Moreno is using the.
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Speaker 3: F word with doctor Fauci there, But how does that
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Speaker 3: resonate overseas in a different language and a different culture.
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Speaker 2: How is that interpreted by Iran?
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Speaker 7: It's by Iran. I'm sure it's offensive, but they're offended anyway,
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Speaker 7: and frankly, their behavior doesn't really justify their offense. But
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Speaker 7: broadly across the world, people are really insulted. And just
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Speaker 7: to even think our neighbors in Canada, this language is terrible.
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Speaker 7: Do you want your children to use these words? I
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Speaker 7: remember my grandchildren had the Bad Word club, which I
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Speaker 7: unfortunately qualified for a few times and had to run
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Speaker 7: around their apartment not you even me, But it wasn't
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Speaker 7: that bad and it was in private. But this is ugly,
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Speaker 7: and both sides are using it. It's not just Republicans,
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Speaker 7: but to have the president of our country use words
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Speaker 7: on a regular basis that are truly inflammatory is very
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Speaker 7: troubling and hurts further US leadership well.
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Speaker 6: As Joe mentioned, the colorful language from one Senator Bernie Marino, yesterday,
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Speaker 6: I had my eye on all of the Senators as
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Speaker 6: they Jane, as we were having this conversation. We're just
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Speaker 6: taking the vote on another War Powers resolution, and yet
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Speaker 6: another has failed forty nine to fifty.
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Speaker 5: Are you surprised by that?
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Speaker 7: Well, I remember the days in the George W. Bush administration,
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Speaker 7: not my party, when we voted when first of all,
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Speaker 7: the President made the case to Congress about the need
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Speaker 7: for an AUMF, first for Afghanistan and then for Iraq,
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Speaker 7: and Congress voted aumfs for both. The first one was justified.
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Speaker 7: The problem there was, once we satisfied it's objective, which
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Speaker 7: was to go after those who attacked us, we stayed there.
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Speaker 7: That was a mistake. On Iraq, it turns out that
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Speaker 7: the intelligence was wrong and my vote for it was wrong.
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Speaker 7: But at least it was a deliberative process. This is
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Speaker 7: more performative. This is let's do a press release today
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Speaker 7: and let's do a press release tomorrow. And the two
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Speaker 7: sides are really I mean, the Congress, House and Senate
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Speaker 7: really not addressing the specific issues. What is authorized, what
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Speaker 7: isn't authorized? Are we going to justify more American deaths?
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Speaker 2: I hope not.
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Speaker 7: I see this war war as very dangerous, not just
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Speaker 7: for US security but for world security.
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Speaker 3: Even got dangerous in the Caspian Sea this week as
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Speaker 3: Ukraine enters the Fray and attacks an Iranian commercial cargo
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Speaker 3: ship that you probably saw. It's unclear what was on
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Speaker 3: this vessel. They thought maybe missile parts or something.
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Speaker 2: On the way Rush did it.
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Speaker 3: But again we get back to Kelly's point, the radius
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Speaker 3: is widening.
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Speaker 7: It's worldwide, and the suffering from the lack of oil, supplies,
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Speaker 7: fertilizer and so forth is worldwide.
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Speaker 6: Well, yeah, that certainly is true, and it's being felt
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Speaker 6: here at home domestically. For all of the president's public
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Speaker 6: statements that he doesn't care about the midterms, out of
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Speaker 6: Iran is trying to essentially put price pressure on him
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Speaker 6: ahead of the midterms that they would be mistaken. Do
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Speaker 6: you believe that that's actually true? The closer we get
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Speaker 6: to November.
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Speaker 7: Well, he's not on the ballot. That would be something
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Speaker 7: he would say, so why should he care. On the
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Speaker 7: other hand, he's going to be really hemmed in if
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Speaker 7: both houses flip or I think he will be, and
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Speaker 7: I even think not just the people he didn't enduse.
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Speaker 7: I mean, he's mad at Cornyn and Tillis. But I
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Speaker 7: think a lot of other people are going to get
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Speaker 7: braver because they're going to realize, as his poll numbers
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Speaker 7: sink and the popularity of this war is below zero,
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Speaker 7: that they better move away from it and him.
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Speaker 2: Once a primary season is over.
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Speaker 3: It's going to be interesting to see some of these Goodness, Jane,
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Speaker 3: stay in touch with us.
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Speaker 2: It's great to have you here, and hope your summer's
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Speaker 2: going well. Jane, I'm here. She's here, very nice. I'm
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Speaker 2: here were last time too.
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Speaker 3: She's I mean, she's practically living in the bureau now,
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Speaker 3: I think, which is good for everybody. Jane, Thank you
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Speaker 3: so much. Stay with us on Balance of Power. We'll
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Speaker 3: have much more coming up after this.
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Speaker 5: Thank you very much.
12:23
Speaker 6: We always love an IPO day here on Bloomberg TV
12:25
Speaker 6: and Radio. Billion dollars for Jersey Mikes Yeah, everybody have
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Speaker 6: a sandwich. Obviously a smaller IPO and not as stellar
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Speaker 6: of a debut as ones we have experienced recently, including,
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Speaker 6: of course, perhaps the mother of all IPOs in SpaceX
12:38
Speaker 6: earlier this year, even if it has fallen back below
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Speaker 6: its IPO price. And Elon Musk, the leader of the company,
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Speaker 6: is no longer a trillionaire on paper. He still has
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Speaker 6: plenty of money though, and plenty of places he can
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Speaker 6: spend it. And we're getting some new reporting now, first
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Speaker 6: from Axios and now in the New York Times with
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Speaker 6: some finer details about the way in which he's planning
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Speaker 6: to spend money in this midterm cycle. According to the
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Speaker 6: New York Times, Elon Musk has authorized his superpack to
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Speaker 6: spend one hundred to one hundred and twenty million dollars
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Speaker 6: on a new field program and at least eight states
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Speaker 6: to help elect Republicans in November. They're trying to focus
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Speaker 6: on turnout jet like.
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Speaker 2: A rounding error for him.
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Speaker 3: But that's a lot of sandwiches, yes, And so we
13:19
Speaker 3: assemble our political panel for their take on this. The
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Speaker 3: re emergence of Elon Musk as a political force joining
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Speaker 3: us today. Rosemary Becky our Republican strategist founder President Jersey
13:29
Speaker 3: First on this Jersey Mix Ipoday, Doug Ferrer is here
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Speaker 3: as well. Principle at Maywood Strategy is are democratic strategist Rosemary.
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Speaker 3: Let's put down the sub for a minute. Is this
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Speaker 3: good for Republicans? I realize it's a financial boost, but
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Speaker 3: Elon Musk is a controversial figure. We remember that Tesla's
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Speaker 3: all burning and the Doe jeffort and the rest. Will
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Speaker 3: he help Republicans win in November?
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Speaker 8: Oh?
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Speaker 5: Yes, absolutely.
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Speaker 9: I think that this will be actually very helpful for
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Speaker 9: Republicans having him get involved in this. You know, there
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Speaker 9: are so many, you know, things out there that are swirling,
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Speaker 9: and frankly, you know, as we look across the country
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Speaker 9: and we see all these different proposals out there with
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Speaker 9: regards to wealth taxes right at the state level, and
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Speaker 9: we're starting to see it emerge even at the federal level.
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Speaker 9: So he's got a vested interest right in getting involved
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Speaker 9: at this point. And I think that that's an important,
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Speaker 9: you know, opportunity, and I do think that it will
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Speaker 9: help Republicans this fall.
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Speaker 10: Well.
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Speaker 6: So when we consider then, is the Democrat Doug, how
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Speaker 6: worried you feel about this. If Elon Musk is having
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Speaker 6: to spend this kind of money to focus on turnout,
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Speaker 6: does that say something about the turnout concerns that Republicans
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Speaker 6: have going into the midterm that may, at least for
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Speaker 6: the time being, advantaged Democrats.
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Speaker 2: Yeah.
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Speaker 11: I mean Republicans aren't thrilled by and large with how
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Speaker 11: things are going. You know, they're probably not inclined to
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Speaker 11: turn out because gas prices are high, grocery prices are high,
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Speaker 11: and Trump's basically broken all of his promises. Look, that's
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Speaker 11: a lot of money. I mean, Democrats should be worried.
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Speaker 11: And the fact that we have a campaign system where
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Speaker 11: a once trillionaire can drop a rounding error across the
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Speaker 11: country and maybe affect the outcome of races is a
15:19
Speaker 11: huge problem of its own. Musk has tried to pay
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Speaker 11: for elections before. You guys might remember he paid ten
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Speaker 11: million dollars to a candidate in Kentucky who decided instead
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Speaker 11: to take a position in the Trump administration. He tried
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Speaker 11: to make himself the face of the Wisconsin a Supreme
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Speaker 11: Court election, lost by ten So hopefully Democrats will attach
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Speaker 11: his name to this effort. But I would say one
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Speaker 11: other thing, it's all going towards knocking on doors, and
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Speaker 11: this is actually one of the worst places or the
15:44
Speaker 11: least effective places you can spend a lot of money
15:46
Speaker 11: because people will just fake door knocks and.
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Speaker 2: Collect their cash.
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Speaker 11: So yes, big problem, but maybe not, you know, doomsday
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Speaker 11: for the Democrats.
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Speaker 3: Democrats can have fun with this though, right what about
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Speaker 3: the chainsaw of Buaq, the falling out with Trump, the
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Speaker 3: black eye from Scott Bessant. This is not your everyday
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Speaker 3: political donor here, Doug. You can make a lot of
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Speaker 3: commercials with that, can't you.
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Speaker 2: I totally agree.
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Speaker 11: I look, Trump or Musk isn't even popular with Republicans.
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Speaker 11: I saw a poll that had him at forty two
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Speaker 11: percent favorable, down from seventy five percent when he started doze.
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Speaker 11: You know, people don't love rich guys, you know, messing
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Speaker 11: up people's lives and destroying things like usaid that you know,
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Speaker 11: ended up probably calming thousands and hundreds of thousands of
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Speaker 11: people across the world. So yeah, I think Democrats will
16:37
Speaker 11: try to attach Musk's name to this effort. They're happy
16:39
Speaker 11: to welcome another toxic billionaire into the Republican fold ahead
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Speaker 11: of the elections for sure.
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Speaker 6: Of course, there's also a billionaire in the White House,
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Speaker 6: Rosemary and his political entity, the MAGA Inc.
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Speaker 2: Pack has way more.
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Speaker 6: Money than Elon Musk is prepared to spend. They're sitting
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Speaker 6: on four hundred million dollars and they've hardly spent any
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Speaker 6: of it in this cycle. Is it time to start
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Speaker 6: deploying that capital?
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Speaker 9: Yeah, I think it is, and I think they certainly will. Look,
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Speaker 9: this is going to be a hard fought battle this fall.
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Speaker 9: And you know, and for the House itself, we've got,
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Speaker 9: you know, eighteen races that are considered toss up. Fourteen
17:23
Speaker 9: of those are Republican and so you know, the White
17:27
Speaker 9: House is going to have to start to spend some
17:29
Speaker 9: money on these races. And and you know, there's it's
17:33
Speaker 9: going to be about the message, and it's going to
17:36
Speaker 9: be about who has a better solution, right, who can
17:40
Speaker 9: solve the affordability issue? And that's what it's all going
17:44
Speaker 9: to come down to. And so it's going to be
17:46
Speaker 9: really important to get those messages, you know, out, whether
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Speaker 9: it's social media or or just good old fashioned knocking
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Speaker 9: on doors.
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Speaker 5: You really got to get that message out.
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Speaker 3: This scallop pull out today, Doug might give you pause
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Speaker 3: when you consider what Americans think about our election process,
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Speaker 3: and it just is. It's the backdrop of everything we're
18:12
Speaker 3: talking about here. With deep unease around election integrity, sixty
18:18
Speaker 3: seven percent worry that political leaders will pressure officials to
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Speaker 3: change outcomes. Democrats, as you might expect, more than Republicans,
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Speaker 3: far more anxious seventy seven percent to fifty six percent
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Speaker 3: with Republicans, and fifty seven percent overall doubt ballots will
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Speaker 3: be properly handled or secured. Republicans more than Democrats. Does
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Speaker 3: this lack of trust and the flames are being fanned
18:43
Speaker 3: frequently by the president himself result in a lack of turnout.
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Speaker 11: It might, hopefully as a Democrat, result in the lack
18:52
Speaker 11: of Republican turnout. But I think Democrats are pretty fired up.
18:56
Speaker 11: I think they want to prove that democracy and voting
18:59
Speaker 11: in our vote system can work by going to the
19:01
Speaker 11: polls and making it clear that they opposed Donald Trump
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Speaker 11: and his Republican colleagues in the House and Senate. Look,
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Speaker 11: the way people feel about the election system here in
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Speaker 11: this country is one hundred percent Donald Trump's fault because
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Speaker 11: he can't admit he lost an election in twenty twenty. Okay,
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Speaker 11: he has made Republicans think that it's all rigged, which
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Speaker 11: it is not. It is the freest and fairest election
19:23
Speaker 11: system in the world. And he's made Democrats rightly feel
19:27
Speaker 11: that he's trying to steal elections.
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Speaker 5: This is a mess.
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Speaker 11: And I hope that there is a big turnout and
19:33
Speaker 11: that all of the elections go well, because I believe
19:37
Speaker 11: the state people in charge of those will do a
19:39
Speaker 11: good job and hopefully we can start to rebuild this
19:42
Speaker 11: trust across the partisan gap.
19:45
Speaker 6: Well, of course, there's more primary elections coming up, and
19:48
Speaker 6: a big one on Tuesday for your party, especially Doug,
19:52
Speaker 6: as we watch the Democratic Senate primary in Michigan, the
19:55
Speaker 6: established back to congresswoman, establishment back Congresswoman Haley Stevens up
19:59
Speaker 6: against aggresive Abdul Alsayad. And we have some pretty incredible
20:02
Speaker 6: polling that's just come out from Emerson College in the
20:05
Speaker 6: aftermath of their last debate that finds el Sayed up
20:09
Speaker 6: fourteen fifteen points on Hailey Stevens fifty four percent to
20:13
Speaker 6: thirty nine percent. The age breakdown is perhaps even more remarkable,
20:18
Speaker 6: as it's only voters sixty and over who prefer Hailey Stevens,
20:22
Speaker 6: but elsaid gets sixty one percent of those between eighteen
20:25
Speaker 6: and twenty nine, eighteen and thirty nine, actually seventy three
20:29
Speaker 6: percent of those between forty and forty nine. And I wonder,
20:33
Speaker 6: as you look at these figures, Doug, in this kind
20:35
Speaker 6: of internal war that's happening within the Progressive Party, in
20:39
Speaker 6: the progressive wing of it, in the Democratic Party, if
20:43
Speaker 6: if it makes you nervous about the prospects of keeping
20:46
Speaker 6: this seat blue in November, or if this might be
20:50
Speaker 6: a good thing for your party overall.
20:53
Speaker 2: There are a lot of different takes.
20:54
Speaker 11: I think it's a good thing. Look, Hailey Stevens has
20:57
Speaker 11: benefited from something like seventy million dollars in outside spending,
21:01
Speaker 11: some of it coming from APEC, lots of it coming
21:03
Speaker 11: from corporations. And for the Democrats, a lot of voters
21:07
Speaker 11: are looking at that and saying, no thanks, we don't
21:09
Speaker 11: want this anymore. We want change. We want someone who's
21:12
Speaker 11: really going to do something about our affordability crisis. Abdul
21:15
Speaker 11: Alsaiad is pitching Medicare for all, He's pitching lots of
21:18
Speaker 11: different policies that I think are right on the economy
21:21
Speaker 11: and the Demo that you noted, which I'm just outside
21:25
Speaker 11: of I'm afraid to say, is looking around, having graduated
21:28
Speaker 11: high school, gone to college, and now is trying to
21:30
Speaker 11: figure out what their future is going to be like
21:31
Speaker 11: and saying this economy is not working for me. And
21:34
Speaker 11: when you have a fired up base and a super
21:36
Speaker 11: unpopular president, I think you could see Elsaya do really
21:39
Speaker 11: well in the selection despite some of the establishment concerns
21:43
Speaker 11: about his electability against Rogers.
21:45
Speaker 3: Yeah, I'm pretty sure Rosemary is liking that idea.
21:49
Speaker 2: Rosemary, am I right?
21:50
Speaker 3: Mike Rogers thinks he can beat elsaiat a lot easier
21:53
Speaker 3: than dealing with Haley Stevens.
21:54
Speaker 2: How about you?
21:56
Speaker 9: Yeah, No, I think that's a great matchup here. Look,
22:01
Speaker 9: I think at the end of the day, you know,
22:05
Speaker 9: the American people, and particularly in Michigan, are not looking for,
22:10
Speaker 9: you know, socialists to be running this country. And I
22:13
Speaker 9: do think, you know, Mike Rogers is a very strong
22:16
Speaker 9: candidate and will do frankly, extraordinarily well if in fact
22:22
Speaker 9: Elsa ed does win that primary.
22:26
Speaker 6: Although he is not we should mention a Democratic Socialist,
22:30
Speaker 6: He is not a member of that even if the
22:32
Speaker 6: DSA may be campaigning for him in Michigan. But Rosemary,
22:36
Speaker 6: I would imagine you're not going to be the only
22:38
Speaker 6: Republican we talk to between now and November. If he wins,
22:41
Speaker 6: that's going to try to cast him as one. Is
22:44
Speaker 6: that not the point?
22:46
Speaker 9: That's absolutely the point I mean, And frankly, it's so
22:51
Speaker 9: fascinating to see what's kind of occurring with these primaries
22:56
Speaker 9: and these potential new members of both the Senate and
23:00
Speaker 9: and the House. You're going to have, you know, similar
23:03
Speaker 9: to a freedom caucus or a tea party on the
23:08
Speaker 9: left side, right, and frankly, it's going to end up
23:11
Speaker 9: pulling you know, pulling the agenda and show. It'll be
23:18
Speaker 9: very fascinating to watch as that potentially could play out
23:22
Speaker 9: in both the House and the Senate.
23:24
Speaker 6: Frankly, indeed, all right, Rosemary Becky, founder and president of
23:29
Speaker 6: Jersey First and Republican Strategists, alongside Democratic strategist Doug Fair,
23:33
Speaker 6: principle at Maywood Strategies, thank you both for joining us
23:36
Speaker 6: as we look ahead to that crucial primary on Tuesday.
23:40
Speaker 6: It's going to be one to watch as we beat
23:42
Speaker 6: the drum to November and consider what the ballots of
23:44
Speaker 6: the Senate may ultimately look like, especially Joe if the
23:47
Speaker 6: president is considering on the post midterm Senate being the
23:51
Speaker 6: one to advance the confirmation of Todd Blanche. We'll see
23:54
Speaker 6: how that all works out.
23:55
Speaker 3: For the Lame Duck Report, we're looking forward to hosting
23:58
Speaker 3: that as well after November.
24:00
Speaker 2: Stay with us on Balance of Power. We'll have much
24:02
Speaker 2: more coming up after this.
24:07
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
24:11
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24:14
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24:18
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24:24
Speaker 3: Watching Wall Street on a much better day than yesterday,
24:26
Speaker 3: and kind of nice to see someone rewarded for good
24:30
Speaker 3: news here. With again Microsoft up seventeen points. It'd be
24:33
Speaker 3: interesting to see how Apple and Amazon fare this evening.
24:36
Speaker 3: With Apple coming in off the top rope here. It's
24:38
Speaker 3: up quite a bit yere to date, more than twenty percent,
24:41
Speaker 3: Amazon a little bit less, so it's up about five
24:42
Speaker 3: percent year to date, so might not be judged quite
24:48
Speaker 3: as brutally as some of these others. Big question we
24:51
Speaker 3: keep hearing though, is about a bubble, and Kevin Hassett
24:55
Speaker 3: isn't having any of it. The idea of AI spending
24:58
Speaker 3: bumping into a ceiling and leaving enormous amounts of money
25:04
Speaker 3: that have been met on the building of data centers
25:06
Speaker 3: and the advancement of AI at risk. He actually joined
25:10
Speaker 3: us earlier today on Bloomberg, of course, the President's Economic
25:14
Speaker 3: advisor live from the White House.
25:16
Speaker 2: Here's what he said.
25:18
Speaker 8: The difference between the dot com boom of the nineties
25:21
Speaker 8: and what we're seeing now with AI is that the
25:23
Speaker 8: AI companies are actually making money. So remember back then,
25:26
Speaker 8: we had insane valuations for firms that had yet to
25:29
Speaker 8: make any money at all.
25:33
Speaker 6: So as we consider who is making money and who's
25:37
Speaker 6: spending a lot of money that the market is ensure
25:39
Speaker 6: is necessarily going to pay off, and look at what's
25:42
Speaker 6: happening in tech and AI plays overall. We turned to
25:45
Speaker 6: the Bloomberg Tech host ed Ludlow, who's joining us now
25:47
Speaker 6: from San Francisco. It's, of course a very busy week
25:49
Speaker 6: for him as he covers earnings across the board, and
25:52
Speaker 6: before we talk about the earnings that we're going to
25:54
Speaker 6: get in just a few hours after the bell had
25:56
Speaker 6: if we could recap the earnings we got yesterday, we're
25:58
Speaker 6: looking at the biggest move for Microsoft going back to
26:01
Speaker 6: two thousand and eight with this seventeen percent gain. Is
26:05
Speaker 6: this just a matter of the stock having been beaten
26:08
Speaker 6: down somewhat so now we're seeing a massive recovery or
26:11
Speaker 6: is the cloud growth really that good?
26:13
Speaker 10: Well, good point, because it was down year to date
26:15
Speaker 10: in a laggard of the biggest technology names, right the
26:18
Speaker 10: MAGS seven. The other way I look at it is
26:19
Speaker 10: that you can look at the percentage gain. But as
26:21
Speaker 10: we write on the Bloomberg, it's on track to add
26:24
Speaker 10: almost five hundred billion dollars in market value in a
26:27
Speaker 10: single day, which would be a record just on market
26:30
Speaker 10: value terms. No one's ever done that in the history
26:32
Speaker 10: of the stock market. But it's so interesting because, like
26:35
Speaker 10: you know, for each of these companies, the math, the
26:38
Speaker 10: equation is the same. Here is some data of how
26:41
Speaker 10: much we're spending on AI infrastructure, and then the Wall
26:44
Speaker 10: Street says, what is the return on that investment? What
26:47
Speaker 10: have you got to show for it? And in Microsoft's case,
26:49
Speaker 10: it was really simple. They gave financial metrics like their
26:52
Speaker 10: cloud computing unit growing at the fastest pace since twenty
26:55
Speaker 10: twenty two, but they also said, this is the product
26:58
Speaker 10: that we sell Copilot and people use it, and that
27:01
Speaker 10: seems to have been a good message at Wall Street.
27:03
Speaker 10: Like I think Joe Mathew said, rewarding good news, but
27:06
Speaker 10: I would just say it's a different type of news
27:08
Speaker 10: beyond financial numbers.
27:10
Speaker 3: Thirty million seats was a pretty good number there. And
27:14
Speaker 3: I wonder if Amazon will be able to tell a
27:16
Speaker 3: similar cloud story or if Apple, you know, with Microsoft,
27:20
Speaker 3: as we've been discussing, has been rewarded for not spending
27:23
Speaker 3: beyond its means. Apple's been rewarded for kind of not
27:27
Speaker 3: spending at all. Does that continue tonight.
27:30
Speaker 10: Well, the Apple story has almost been like Apple is
27:33
Speaker 10: the AI safety trade. Apple doesn't have a CAPEX story.
27:36
Speaker 10: It's CAPEX number is probably going to be twelve billion
27:39
Speaker 10: dollars for the fiscal year, maybe just slightly over Amazon
27:42
Speaker 10: by comparison two hundred billion dollars, and so like, you know,
27:45
Speaker 10: Amazon story is very aligned with Microsoft. You know, they
27:48
Speaker 10: expect the cloud unit AWS to grow at the fastest
27:52
Speaker 10: pace in some time. But Amazon more recently has been
27:55
Speaker 10: giving these kind of other metrics about how its investments
27:58
Speaker 10: in AI make traction and comparing contrast with Meta. Last night,
28:03
Speaker 10: you know, Metta just wasn't able to say, here's something tangible.
28:07
Speaker 10: Here's the other side of all of the work we've done,
28:09
Speaker 10: not just in the research and development side of AI,
28:12
Speaker 10: but all the infrastructure they've built, so Amazon like again
28:15
Speaker 10: in line with Microsoft, it's a more clear cut story.
28:18
Speaker 10: Apple really is a story about Tim Cook and smartphones.
28:22
Speaker 3: Well, we're going to have a lot more for you
28:23
Speaker 3: coming up later on today after the bell and on
28:26
Speaker 3: the late edition of Balance of Power. We'll be joined
28:28
Speaker 3: by the great ed Ludlow. It's good to see you,
28:30
Speaker 3: and thank you so much. Bloomberg Tech of course, and
28:32
Speaker 3: the man behind it. It's going to be something else
28:35
Speaker 3: after four o'clock. The building here at Bloomberg will shake
28:38
Speaker 3: again as we add the voice of Bloomberg Politics contributor
28:42
Speaker 3: Patrick McHenry. Of course, the former Republican congressman w used
28:45
Speaker 3: to chair the House Financial Services Committee. Speaker pro Tem
28:49
Speaker 3: is with us right now. Mister McHenry, welcome back. I
28:52
Speaker 3: wasn't planning to talk to you about this, but our
28:55
Speaker 3: audience should know that you do a lot of workout
28:56
Speaker 3: in Silicon Valley now, and you're a big player in
28:59
Speaker 3: the corpace. You probably have a much better seat for
29:03
Speaker 3: this show than a lot of investors do.
29:05
Speaker 2: When you hear questions.
29:07
Speaker 3: About the durability of this AI build out, the race
29:11
Speaker 3: against China, and the questions of what inning we are in,
29:16
Speaker 3: what are you hearing well?
29:18
Speaker 12: Mythos was a defining moment and a shifted debate in
29:22
Speaker 12: Washington and among corporate players on the use of AI.
29:27
Speaker 12: We see the token tracking that every corporate is now
29:30
Speaker 12: engaged in CFOs went from spend it all costs on
29:35
Speaker 12: AI to now, let's make sure we're getting something for
29:39
Speaker 12: this engagement and this extraordinary cost on tokens going to
29:44
Speaker 12: the frontier labs. So we've seen a large shift this
29:47
Speaker 12: calendar year distinct from what we saw last year. Last
29:51
Speaker 12: year is all about the build and the competition with
29:53
Speaker 12: China to make sure that we're ahead. This year, we're
29:55
Speaker 12: seeing a shift post Mythos to ensure we have competition
30:00
Speaker 12: and on the frontier and in the second generation, and
30:04
Speaker 12: and and on with the use of AI and the
30:08
Speaker 12: rising use and need for open models and open weights
30:13
Speaker 12: so that we have open source as a as a
30:17
Speaker 12: key player to balance out this rising cost of AI usage.
30:22
Speaker 5: So there's a lot happening here.
30:24
Speaker 12: Uh this this Microsoft story is absolutely fascinating because it's
30:28
Speaker 12: a you know, one of the long term old players
30:33
Speaker 12: in tech and still had such a massive move today.
30:36
Speaker 12: You're seeing something likewise in Washington policy circles that the
30:41
Speaker 12: shifts on AI, the uncertainty on what AI will mean
30:46
Speaker 12: for the economy. That's a huge driver of our politics,
30:49
Speaker 12: not just the day to day stuff, but this is
30:51
Speaker 12: going to be the really the large debate within the parties,
30:56
Speaker 12: uh and with the electorate, not just for the midterm
30:59
Speaker 12: but going into the next presidential It will be defining
31:02
Speaker 12: a defining issue of the debate between the candidates and
31:05
Speaker 12: the parties.
31:07
Speaker 3: I just knew I could turn him into a tech
31:09
Speaker 3: stock analyst. It was just a matter of time.
31:10
Speaker 6: One hundred percent speaking of tech stocks really quickly. Obviously,
31:14
Speaker 6: it's been pretty easy to get on the wrong side
31:15
Speaker 6: of a trade given all the volatility in AI and
31:18
Speaker 6: software names as of late. That is a problem for
31:21
Speaker 6: the hedge fund situal awareness, situational awareness, which there's been
31:24
Speaker 6: a lot of reporting about today.
31:25
Speaker 5: This was a hedge fund started by a.
31:28
Speaker 6: Very young man who used to work for Open Ai,
31:30
Speaker 6: and Bloomberg is now reporting a redhead just crossing the
31:33
Speaker 6: terminal that its assets have fallen to about ten billion
31:37
Speaker 6: dollars after having to offload a bunch of stock and
31:40
Speaker 6: a sale to Citadel. CNBC had reported earlier today that
31:43
Speaker 6: the assets as of July first, or the net asset
31:45
Speaker 6: value rather, was forty five billion dollars. So clearly this
31:50
Speaker 6: is a material drop after the losses that they experienced
31:53
Speaker 6: with some wrong way bets on software names and AI names.
31:57
Speaker 3: Yeah, that's for sure, and it really speaks to just
31:59
Speaker 3: the incredible amount of leverage that's spent find these trades.
32:01
Speaker 3: I mean, look at Micron today, one of the three
32:03
Speaker 3: top holdings in this hedge fund, just moving with abandon.
32:07
Speaker 3: It's up one hundred and thirty one dollars or eighteen
32:09
Speaker 3: percent now Kayley, after dropping by similar fashion yesterday. People
32:14
Speaker 3: are wondering what these breakneck moves are all about, and
32:17
Speaker 3: situational awareness raises its head as at least one of
32:21
Speaker 3: the reasons.
32:22
Speaker 6: Yeah, a lot of attention on Leo Paul Deschenbrenner twenty
32:25
Speaker 6: five years old, yeap, and under a.
32:27
Speaker 5: Lot of pressure.
32:28
Speaker 6: I would imagine we bring the conversation though, back to
32:30
Speaker 6: Chairman McHenry as we have this conversation around the artificial
32:33
Speaker 6: intelligence trade on the artificial intelligence regulatory race, whether or
32:37
Speaker 6: not we're going to see more action on that, either
32:39
Speaker 6: from the White House or from Capitol Hill.
32:41
Speaker 2: I wonder if the way AI is.
32:43
Speaker 6: Being treated now reminds you of how Crypto was being
32:46
Speaker 6: treated at the beginning. Crypto which, mind you, we still
32:50
Speaker 6: don't necessarily have our regulatory arms around as the Clarity
32:53
Speaker 6: Act still doesn't seem like it has a clear we're
32:55
Speaker 6: way forward in the Senate at least as of now, mister.
32:58
Speaker 5: Chairman, Well, here we're in a different context.
33:03
Speaker 12: AI can run very hard and grow at a very
33:07
Speaker 12: large rate without the need for clear rules of the
33:10
Speaker 12: road from Washington. What Crypto needs is clear rules of
33:14
Speaker 12: the road for mass adoption across heavily regulated financials.
33:19
Speaker 5: The Clarity Act is that.
33:22
Speaker 12: Opportunity on Capitol Hill to define the clear rules of
33:26
Speaker 12: the road in law on what is the digital.
33:29
Speaker 5: Asset that means of exchange in its use.
33:32
Speaker 12: We see the Clarity Act having passed the House Representatives
33:35
Speaker 12: over a year ago. Now the Senate has been wrestling
33:38
Speaker 12: with this publicly for the last couple of months. The
33:41
Speaker 12: final key issues for the Clarity Act are number one,
33:45
Speaker 12: conflicts of interest for the centralized exchanges. Number one, Number two,
33:51
Speaker 12: law enforcement, the clear definition of developer protections for open
33:56
Speaker 12: source software developers in defive, and then third and five. Finally,
34:00
Speaker 12: and most importantly politically, is a debate around ethics. You
34:05
Speaker 12: have serious policy makers engaged on that, on defining what
34:10
Speaker 12: is a set of ethics restrictions on the person of
34:13
Speaker 12: the president and elected officials. And you see leaders like
34:19
Speaker 12: Senator Gago Senator Tillis who are formulating policy, not just
34:24
Speaker 12: the rhetoric around this, but actually writing policy.
34:28
Speaker 5: That is enforceable and durable under law.
34:30
Speaker 12: Here this is tough stuff, and I think Senator Gego
34:34
Speaker 12: and Senator Tillis have shown real leadership and working together
34:38
Speaker 12: on something that could pass Muster and help unlock the
34:43
Speaker 12: ability for the Clarity Act to pass either this next
34:46
Speaker 12: week or in September or in the full.
34:51
Speaker 3: Senator till has showing up on a lot of stories
34:53
Speaker 3: these days. Yes, your old friends.
34:57
Speaker 5: Ban He's a one man marching band.
34:59
Speaker 3: Isn't that true? We're going to play this for him,
35:01
Speaker 3: tell them we have this conversation. Because the President wants
35:05
Speaker 3: his attorney general to be confirmed Todd Blanche. That confirmation
35:08
Speaker 3: vote has been postponed because of Tillis and John Cornyn,
35:12
Speaker 3: both of whom not great fans. I guess so the
35:15
Speaker 3: President and vice versa. He primaried them, and they're giving
35:17
Speaker 3: him a hard time back. They want a piece of
35:19
Speaker 3: paper that says there will be no Anti Weaponization Fund
35:23
Speaker 3: before they nominate or confirm, I should say, the nominee
35:27
Speaker 3: in this case, President Trump posting on truth social he
35:29
Speaker 3: might just withdraw.
35:30
Speaker 2: The name over this. What's going to happen here, mister chairman.
35:34
Speaker 12: Well, look, the senators that have the deciding votes here
35:38
Speaker 12: are going to get what they want or they're going
35:40
Speaker 12: to get Todd Blanch's head.
35:42
Speaker 5: They're not fighting directly.
35:43
Speaker 12: If you listen to senators, they're not saying that President
35:46
Speaker 12: Trump is wrong. They're even going out of office. That's
35:50
Speaker 12: not something they think is wise. What they're saying is
35:53
Speaker 12: that the president's being ill served by his advisors. That
35:56
Speaker 12: is what you're hearing from Senator Cornyn. Senator tell us.
36:00
Speaker 12: What they want is an assurance of the Attorney General's
36:04
Speaker 12: proper actions, specifically on the Anti Weaponization Fund and a
36:09
Speaker 12: few other limitations. The Attorney General, I think, in a
36:13
Speaker 12: normal process, would be able to come to terms with
36:15
Speaker 12: directly with these centers and give them that assurance. In
36:19
Speaker 12: this case, it's going to be the White House, the
36:21
Speaker 12: White House staff that's going to determine whether or not
36:24
Speaker 12: those assurances can be given. And until that time, you're
36:27
Speaker 12: not going to see a vote on Todd Blanche's Attorney
36:30
Speaker 12: General nomination, even if he is well qualified, which is
36:34
Speaker 12: what these senators are saying. Those things will be delayed,
36:38
Speaker 12: and I don't think it's forever, but it could be
36:41
Speaker 12: for a period of time. With Senator Thune trying to
36:45
Speaker 12: manage the Senate floor, this is a very very complicated
36:49
Speaker 12: closeout before the August recess. The next week week and
36:53
Speaker 12: a half are going to be very very challenging for
36:55
Speaker 12: the Senate to get through these set of issues and
36:58
Speaker 12: any sort of reasonable.
37:00
Speaker 6: Way, Yeah, I wouldn't necessarily want to be Majority Leader
37:04
Speaker 6: John Thune right now, mister Chairman, thank you so much
37:08
Speaker 6: as always for joining us. The former Chair of the
37:10
Speaker 6: House Financial Services Committee, Patrick mc henry, now a Bloomberg
37:13
Speaker 6: Politics contributor.
37:16
Speaker 3: Thanks for listening to the Balance of Power podcast. Make
37:19
Speaker 3: sure to subscribe if you haven't already, at Apple, Spotify,
37:22
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37:24
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37:28
Speaker 3: at Bloomberg dot com.