This is Bloomberg Wall Street Week. I mean may not have an overall recession, We're having a rolling recession. To kind of roll looks pretty strongly it is when it comes to jobs.

This is Bloomberg Wall Street Week. I mean may not have an overall recession, We're having a rolling recession. To kind of roll looks pretty strongly it is when it comes to jobs.

The financial stories that shape our world.

The financial stories that shape our world.

Three major regional bank failures send shockwaves through the banking system. We're all trying to figure out what to make of generative AI.

Three major regional bank failures send shockwaves through the banking system. We're all trying to figure out what to make of generative AI.

Through the eyes of the most influential voices.

Through the eyes of the most influential voices.

Welcome down, Doctor Paul Krugman, Ryan moynihan, a Bank of America, deebro Lair of the Paulson Institute, well Then Hubbard of the Columbia Business School.

Welcome down, Doctor Paul Krugman, Ryan moynihan, a Bank of America, deebro Lair of the Paulson Institute, well Then Hubbard of the Columbia Business School.

Bloomberg Wall Street Week with David Weston from Bloomberg Radio.

Bloomberg Wall Street Week with David Weston from Bloomberg Radio.

Fed up with an auto industry not sharing enough of its profits, with a government that keeps spending money like a drunken sailor, and with an internet retailer that's just too big for the government's comfort. This is Bloomberg Wall Street Week. I'm David Weston. This week is Zanny Minton Vedows of the Economists. I'm getting the best out of technology without losing too many workers along the way.

Fed up with an auto industry not sharing enough of its profits, with a government that keeps spending money like a drunken sailor, and with an internet retailer that's just too big for the government's comfort. This is Bloomberg Wall Street Week. I'm David Weston. This week is Zanny Minton Vedows of the Economists. I'm getting the best out of technology without losing too many workers along the way.

With unions, there's a bit of a sense of let's stop history. I want to get off and that's the worrying thing.

With unions, there's a bit of a sense of let's stop history. I want to get off and that's the worrying thing.

Portiamopori of HPS Investments on what higher rates and yields mean for the world of credit. And Usher Sharma of Rockefeller International on whether the US is running out of fiscal steam and what that means for the rest of the world.

Portiamopori of HPS Investments on what higher rates and yields mean for the world of credit. And Usher Sharma of Rockefeller International on whether the US is running out of fiscal steam and what that means for the rest of the world.

Because for fifty years we have run these deficits, the attitude has come to be a policy makers of deficits.

Because for fifty years we have run these deficits, the attitude has come to be a policy makers of deficits.

Going backive Global Wall Street spent some time this week watching a range of people who felt things had gone far enough. President Biden and former President Trump tried to outdo one another in traveling to Detroit with the message that the auto companies needed to step up and share their profits with the American workers.

Going backive Global Wall Street spent some time this week watching a range of people who felt things had gone far enough. President Biden and former President Trump tried to outdo one another in traveling to Detroit with the message that the auto companies needed to step up and share their profits with the American workers.

Her what you've heard, you've heard a hell rot more.

Her what you've heard, you've heard a hell rot more.

You're going to pray now.

You're going to pray now.

You built this country, you love this country.

You built this country, you love this country.

And you are the ones that make our country run.

And you are the ones that make our country run.

And the UAW responded on Friday by expanding its strike even further. The studios apparently decided that the writer's strike had gone on long enough, so it's settled with a WGA.

And the UAW responded on Friday by expanding its strike even further. The studios apparently decided that the writer's strike had gone on long enough, so it's settled with a WGA.

It is all at a divorce where you're like, whoever comes out of the room smiling.

It is all at a divorce where you're like, whoever comes out of the room smiling.

I felt like the dank a good one.

I felt like the dank a good one.

Smiling well, the actors still have a way to go. The FTC decided that Amazon had grown more than enough, filing a lawsuit claiming that it had violated the anti trust laws by using anti competitive practices to build and hold its dominant position in online retailing.

Smiling well, the actors still have a way to go. The FTC decided that Amazon had grown more than enough, filing a lawsuit claiming that it had violated the anti trust laws by using anti competitive practices to build and hold its dominant position in online retailing.

These there are a set of tactics, but ultimately Amazon has pursued them to deprive actual and potential competitors of the ability to gain the scale and momentum needed to effectively compete online.

These there are a set of tactics, but ultimately Amazon has pursued them to deprive actual and potential competitors of the ability to gain the scale and momentum needed to effectively compete online.

And the United States Congress, or at least some members of it, decided that the government had gone way too far in spending money, and so they moved toward shutting it all down, something that just about no one thought made any sense.

And the United States Congress, or at least some members of it, decided that the government had gone way too far in spending money, and so they moved toward shutting it all down, something that just about no one thought made any sense.

The failure of House Republicans to act would hurt American FIS families, and because economic kid wins, the S and P.

The failure of House Republicans to act would hurt American FIS families, and because economic kid wins, the S and P.

Five hundred didn't think much of all that disruption. This week, ending down another point seventy four percent, marking its longest losing street this year and moving further south through the median year end number. Our Bloomberg L's are projecting that's forty four to thirty five, while the nasdek eked out a positive result of point oh six percent. But the market story for the week really was in bonds, where the yield on the tenure was up almost fifteen basis points, all the way up to four point five eight. That's after touching your four point seven on Thursday. Take us through the week in the markets. Welcome back now, Rebecca Patterson, former chief investment strategist for Bridgewater, So welcome back, Rebecca. Always great to have you here. So I think a lot of us talk this week was about the yield on the tenure higher for longer The main thing not so much higher, but longer, How high and for how long do you think are we looking at? Well?

Five hundred didn't think much of all that disruption. This week, ending down another point seventy four percent, marking its longest losing street this year and moving further south through the median year end number. Our Bloomberg L's are projecting that's forty four to thirty five, while the nasdek eked out a positive result of point oh six percent. But the market story for the week really was in bonds, where the yield on the tenure was up almost fifteen basis points, all the way up to four point five eight. That's after touching your four point seven on Thursday. Take us through the week in the markets. Welcome back now, Rebecca Patterson, former chief investment strategist for Bridgewater, So welcome back, Rebecca. Always great to have you here. So I think a lot of us talk this week was about the yield on the tenure higher for longer The main thing not so much higher, but longer, How high and for how long do you think are we looking at? Well?

The Fed put.

The Fed put.

In one more possible hike in its projections for this year, and I think it did that really to give itself optionality in case the consumers stronger than expected, wage inflation's higher than expected. But I think they also did that one extra dot, one extra possible hike, to prevent financial conditions from working against them. If they had given the all clear signal, we probably would have had marginally higher stock markets, lower yields as people priced in the easing to come, and that would have worked directly against the Fed's goal. And then for next year, and I think, to your point, this is the bigger deal. Next year. The FED went from projecting one hundred bases points of cuts to fifty, so definitely higher for longer than we had previously thought. And so part of what we saw in the market this week, particularly in the bond market, was an adjustment to this new FED expectation.

In one more possible hike in its projections for this year, and I think it did that really to give itself optionality in case the consumers stronger than expected, wage inflation's higher than expected. But I think they also did that one extra dot, one extra possible hike, to prevent financial conditions from working against them. If they had given the all clear signal, we probably would have had marginally higher stock markets, lower yields as people priced in the easing to come, and that would have worked directly against the Fed's goal. And then for next year, and I think, to your point, this is the bigger deal. Next year. The FED went from projecting one hundred bases points of cuts to fifty, so definitely higher for longer than we had previously thought. And so part of what we saw in the market this week, particularly in the bond market, was an adjustment to this new FED expectation.

Where are we inflation? What kind of inflation pressure we see right now? We obviously have gas prices really going up substantially, but inflation hasn't gone away, No, not at all.

Where are we inflation? What kind of inflation pressure we see right now? We obviously have gas prices really going up substantially, but inflation hasn't gone away, No, not at all.

It's interesting. The market took a lot of solace today in that core PCE figure, the Fed's preferred inflation measure, because it came down as expected and the month on month number was just a little bit better than expected. But when you take a step back from that, right the FED is trying to get to two, we're still well over two. And to your point, you've got some risks out there, one from the service sector wages which are still rising, you know, depending on how you measure around five percent annually. The FED has suggested it that needs to get down around three to be in line with their target. And then to your point, commodities. You know, the FED tries to look through commodities in the short term, but oil and food especially have an outsized impact on the economy through the consumer. We spend so much of our disposable income on those things. And if oil keeps going, we're at ninety five ninety six dollars a barrel on Brent crude right now, we go to one hundred. Hold around those levels for a while. It hurts disposable income, it raises inflation and inflation expectations, and that again is going to work against what the Fed's hoping to do with its soft landing.

It's interesting. The market took a lot of solace today in that core PCE figure, the Fed's preferred inflation measure, because it came down as expected and the month on month number was just a little bit better than expected. But when you take a step back from that, right the FED is trying to get to two, we're still well over two. And to your point, you've got some risks out there, one from the service sector wages which are still rising, you know, depending on how you measure around five percent annually. The FED has suggested it that needs to get down around three to be in line with their target. And then to your point, commodities. You know, the FED tries to look through commodities in the short term, but oil and food especially have an outsized impact on the economy through the consumer. We spend so much of our disposable income on those things. And if oil keeps going, we're at ninety five ninety six dollars a barrel on Brent crude right now, we go to one hundred. Hold around those levels for a while. It hurts disposable income, it raises inflation and inflation expectations, and that again is going to work against what the Fed's hoping to do with its soft landing.

So much of this has been tight up for the labor market, and we've heard repeatedly how tight the labor market is. Loosened up some, but it still is a fairly tight labor market. What do we need to see? What does the FED need to see out of the labor market first to have that proverbial soft landing.

So much of this has been tight up for the labor market, and we've heard repeatedly how tight the labor market is. Loosened up some, but it still is a fairly tight labor market. What do we need to see? What does the FED need to see out of the labor market first to have that proverbial soft landing.

Yeah, so, you know, the soft landing, the idea that we can get inflation back down closer to two percent without a recession. That was what the FED projected last week. I think you need to see labor market normalization that comes mainly through a reduction of openings and increase in participation, with very few layoffs. Now to the Feds, no one that's off the Fed's credit. They didn't do this, but so far that is kind of what's happening. Participation has inched a little bit higher. Job openings had been twelve million, We're down to about nine. We get another report next week, it'll probably be around eight or nine. But pre pandemic, those openings were closer to five million, So we still have a long way to go if that happens. Think about it. If we just reduce openings, it reduces competition for workers, reduces wage inflation, but everyone who has a job and income keeps it. That's their soft landing scenario. But what's probably more reasonable is you get some of that and some job layoffs. And layoffs have been very, very modest so far, but we're seeing consumers get more cautious, We're seeing companies get more cautious and business sentiment surveys. If that translates into more layoffs going forward, then it's going to be harder for the FED to get that soft landing it'll be a greater risk that companies consumers keep pulling back and we have probably a modest recession at some point in the year ahead. That would probably be my base case, but I think it's going to be a close call.

Yeah, so, you know, the soft landing, the idea that we can get inflation back down closer to two percent without a recession. That was what the FED projected last week. I think you need to see labor market normalization that comes mainly through a reduction of openings and increase in participation, with very few layoffs. Now to the Feds, no one that's off the Fed's credit. They didn't do this, but so far that is kind of what's happening. Participation has inched a little bit higher. Job openings had been twelve million, We're down to about nine. We get another report next week, it'll probably be around eight or nine. But pre pandemic, those openings were closer to five million, So we still have a long way to go if that happens. Think about it. If we just reduce openings, it reduces competition for workers, reduces wage inflation, but everyone who has a job and income keeps it. That's their soft landing scenario. But what's probably more reasonable is you get some of that and some job layoffs. And layoffs have been very, very modest so far, but we're seeing consumers get more cautious, We're seeing companies get more cautious and business sentiment surveys. If that translates into more layoffs going forward, then it's going to be harder for the FED to get that soft landing it'll be a greater risk that companies consumers keep pulling back and we have probably a modest recession at some point in the year ahead. That would probably be my base case, but I think it's going to be a close call.

Rebecca. It's always such a treat to heavy with us. Thank you for being here this, Rebecca Patterson. The market spent much of the week trying to come to terms with higher rates that may well be with us for a good long time. To give us a sense of how that may affect the credit world, we welcome to down Purntum a poori HPS Investment Partners, governing partner and head of Liquid Credits. So great to have you here in person. We've talked in remote but not in person. Wonderfully have you here, so so give us your sense about if we have rates that go up, and if they stay there for a long time, what does it do the world of credit? And which is more important how high it is or how long it is.

Rebecca. It's always such a treat to heavy with us. Thank you for being here this, Rebecca Patterson. The market spent much of the week trying to come to terms with higher rates that may well be with us for a good long time. To give us a sense of how that may affect the credit world, we welcome to down Purntum a poori HPS Investment Partners, governing partner and head of Liquid Credits. So great to have you here in person. We've talked in remote but not in person. Wonderfully have you here, so so give us your sense about if we have rates that go up, and if they stay there for a long time, what does it do the world of credit? And which is more important how high it is or how long it is.

So that's a good question. I think I think what's more important is how long it is in terms of the impact of credit. So a couple of things. One is, you know, I I think the world's changed its narrative in instead of whether or not rates go up, it's how long rates stay up. And for corporate credit balance sheets, I think there's two things that are happening. The first is that there's a lot of investment grade and high yield and loans that will reprice over the course of time to into this higher rate environment. So that's one thing. And two is companies are living in this higher rate environment, which means they're getting cash flow squeezed a little bit as they're repricing their debt, and you'll see that across investment grade. I think you'll see it across high yield. Now the loan market's floating rate, so they're participating in the rate move. Uh, you know, they participate in the last year and are continuing to participate. But really it's high yield and investment grade and fixed rate assets that are starting to to reprice and you're going to start to see the impact.

So that's a good question. I think I think what's more important is how long it is in terms of the impact of credit. So a couple of things. One is, you know, I I think the world's changed its narrative in instead of whether or not rates go up, it's how long rates stay up. And for corporate credit balance sheets, I think there's two things that are happening. The first is that there's a lot of investment grade and high yield and loans that will reprice over the course of time to into this higher rate environment. So that's one thing. And two is companies are living in this higher rate environment, which means they're getting cash flow squeezed a little bit as they're repricing their debt, and you'll see that across investment grade. I think you'll see it across high yield. Now the loan market's floating rate, so they're participating in the rate move. Uh, you know, they participate in the last year and are continuing to participate. But really it's high yield and investment grade and fixed rate assets that are starting to to reprice and you're going to start to see the impact.

So interestation we're really low for a long time. To what extent did the corporations go and say, let's lock in a lot of long term debt really low rates, and so they're protected. I guess it's for some period of time to come.

So interestation we're really low for a long time. To what extent did the corporations go and say, let's lock in a lot of long term debt really low rates, and so they're protected. I guess it's for some period of time to come.

A lot of them did it, and they are protected and there is a you know, you'll hear the words maturity wall, but you're certainly starting to see that cliff come into play, not necessarily in twenty twenty four, but in twenty five and twenty six. And mind you that most companies don't wait until the maturity to refinance they're dead. So oftentimes you're seeing companies refinance twelve months inside, eighteen months inside. So the numbers are pretty big in that. In that, you know, the estimates are anywhere from thirty to forty percent of investment grade and high yield repricing into this higher rate environment over the next call it, you know, eighteen months plus.

A lot of them did it, and they are protected and there is a you know, you'll hear the words maturity wall, but you're certainly starting to see that cliff come into play, not necessarily in twenty twenty four, but in twenty five and twenty six. And mind you that most companies don't wait until the maturity to refinance they're dead. So oftentimes you're seeing companies refinance twelve months inside, eighteen months inside. So the numbers are pretty big in that. In that, you know, the estimates are anywhere from thirty to forty percent of investment grade and high yield repricing into this higher rate environment over the next call it, you know, eighteen months plus.

Remind us, so, what are.

Remind us, so, what are.

The most active parts of your business right now? In credit, where's the most activity.

The most active parts of your business right now? In credit, where's the most activity.

There's a lot of activity in the private credit world. I think you've probably read a lot about that also, but you know, that's a very very active world right now, the private credit.

There's a lot of activity in the private credit world. I think you've probably read a lot about that also, but you know, that's a very very active world right now, the private credit.

Look.

Look.

Private credit has been around for a long time, and private credit has taken share from the banks and they're taking share from the syndicated markets. So there's a ton of activity there up and down the capital structure and I would say there's more interest and activity across corporate credit. Certainly when you look at equities versus credit, there's been a veer towards credit because number one, the base rate environment is so high it's likely to stay high. And number two, they're spread across the market. Now, spread's not terribly attractive in and of itself, but yields are so investment grade, high yield levered loans. There's you know, the high old markets training at you know, four twenty four to thirty over in the loan market just around five point fifty over. So you're looking at eight to ten percent yields and high yield and loans, and in the private world, you know, it's it's a couple hundred basis points.

Private credit has been around for a long time, and private credit has taken share from the banks and they're taking share from the syndicated markets. So there's a ton of activity there up and down the capital structure and I would say there's more interest and activity across corporate credit. Certainly when you look at equities versus credit, there's been a veer towards credit because number one, the base rate environment is so high it's likely to stay high. And number two, they're spread across the market. Now, spread's not terribly attractive in and of itself, but yields are so investment grade, high yield levered loans. There's you know, the high old markets training at you know, four twenty four to thirty over in the loan market just around five point fifty over. So you're looking at eight to ten percent yields and high yield and loans, and in the private world, you know, it's it's a couple hundred basis points.

On top of that.

On top of that.

Thank you so much, really great to have you with this plano. It's pretty much POORI of HPS investments coming up, the summer of strikes turns into the autumn of strikes. We talk with Zanni mitten Vettos of the Economists about whether there's more at stake this time. That's next on Wall Street Week on Bloomberg.

Thank you so much, really great to have you with this plano. It's pretty much POORI of HPS investments coming up, the summer of strikes turns into the autumn of strikes. We talk with Zanni mitten Vettos of the Economists about whether there's more at stake this time. That's next on Wall Street Week on Bloomberg.

This is Bloomberg Wall Street Week with David Weston from Bloomberg.

This is Bloomberg Wall Street Week with David Weston from Bloomberg.

Radio workers on the March.

Radio workers on the March.

The US has just been through the summer of strikes.

The US has just been through the summer of strikes.

We're hopeful, we're hearing good things that they're making progress, but the UAW is at the table bargaining in good faith.

We're hopeful, we're hearing good things that they're making progress, but the UAW is at the table bargaining in good faith.

This could end today, it could end a few months from now.

This could end today, it could end a few months from now.

And we're not out of it yet. The Writer's Guild has apparently come to terms with the studios.

And we're not out of it yet. The Writer's Guild has apparently come to terms with the studios.

They got what they wanted basically, which is that the Hollywood studios agreed that they're not going to you know, feed of Bunshow's scripts into the AI machine and come back and credit a movie to an AI.

They got what they wanted basically, which is that the Hollywood studios agreed that they're not going to you know, feed of Bunshow's scripts into the AI machine and come back and credit a movie to an AI.

But the actors are still out. Let's get it done.

But the actors are still out. Let's get it done.

Unions haven't been sexy for a really long time, but I've always considered it a privilege to be part of this union.

Unions haven't been sexy for a really long time, but I've always considered it a privilege to be part of this union.

And the auto workers look to be ramped things up rather than down, as we've now seen both a sitting president and a former president make trips to Detroit to show their support. Wall Street did norma country, the middle class, PILMA count.

And the auto workers look to be ramped things up rather than down, as we've now seen both a sitting president and a former president make trips to Detroit to show their support. Wall Street did norma country, the middle class, PILMA count.

Class.

Class.

I side with the Auto Workers of American with those who want to make America great again.

I side with the Auto Workers of American with those who want to make America great again.

And I always will, but this time may truly be different. Sure, it's about wages and benefits, but it's also about the future and the worker's place in a world that technology is transforming faster than we may know. From writers concerned about artificial intelligence taking their jobs, the.

And I always will, but this time may truly be different. Sure, it's about wages and benefits, but it's also about the future and the worker's place in a world that technology is transforming faster than we may know. From writers concerned about artificial intelligence taking their jobs, the.

Clash that you're seeing with the writers.

Clash that you're seeing with the writers.

And the actors is that, of course that means the studios and networks may require fewer people to auto workers who know that those electric vehicles won't need as many of them on the job as before.

And the actors is that, of course that means the studios and networks may require fewer people to auto workers who know that those electric vehicles won't need as many of them on the job as before.

I fear that between the fact that electric vehicles take about four two percent fewer workers per automobile and the fact that a large part of the action in the automobile industry is moving to the southern part of our country, the industrial belt part of the country is gonna shrink no matter.

I fear that between the fact that electric vehicles take about four two percent fewer workers per automobile and the fact that a large part of the action in the automobile industry is moving to the southern part of our country, the industrial belt part of the country is gonna shrink no matter.

What, leaving us wondering whether this time we can embrace all that technology offers without leaving workers behind.

What, leaving us wondering whether this time we can embrace all that technology offers without leaving workers behind.

Looking out into the future, we're starting to ask ourselves, when are these computers going to be as smart as we are?

Looking out into the future, we're starting to ask ourselves, when are these computers going to be as smart as we are?

And to take us through what is going on with the labor markets, particularly in the United States. Welcome now back Zanni Mintenbto. She is the editor in chief of the Economist Danny. Great to have you back on Wall Street week. Thank you. So what are we seeing here? It has been a summer of strikes, We're not done even as we go into the autumn. But how much of this do you think is because of a basic shift in power toward labor. How much of it is new technology on the horizon.

And to take us through what is going on with the labor markets, particularly in the United States. Welcome now back Zanni Mintenbto. She is the editor in chief of the Economist Danny. Great to have you back on Wall Street week. Thank you. So what are we seeing here? It has been a summer of strikes, We're not done even as we go into the autumn. But how much of this do you think is because of a basic shift in power toward labor. How much of it is new technology on the horizon.

Well, Fasiva, it is great to be back here with you. I think it's a bit of both. I think there is definitely a sense that, you know, labor is in a stronger position than it has been for much of the past few decades. Unemployment is very low, the economy is very strong, there's the shortage of labor. The labor market has changed after the pandemic, and so there's a sense that labor is in a stronger position. But I think part of the motivation is also a concern about what the next wave of technology means, whether it's you know, with the UAW, whether it's EVS and the shift in the nature of car manufacturing, whether it's AI. All these technologies on the horizon, and there's a sense of concern about that change and a kind of grabbing of the gains while you can, and perhaps also as so often. Unfortunately with unions, there's a bit of a sense of stop, let's stop history.

Well, Fasiva, it is great to be back here with you. I think it's a bit of both. I think there is definitely a sense that, you know, labor is in a stronger position than it has been for much of the past few decades. Unemployment is very low, the economy is very strong, there's the shortage of labor. The labor market has changed after the pandemic, and so there's a sense that labor is in a stronger position. But I think part of the motivation is also a concern about what the next wave of technology means, whether it's you know, with the UAW, whether it's EVS and the shift in the nature of car manufacturing, whether it's AI. All these technologies on the horizon, and there's a sense of concern about that change and a kind of grabbing of the gains while you can, and perhaps also as so often. Unfortunately with unions, there's a bit of a sense of stop, let's stop history.

I want to get off.

I want to get off.

And that's the worrying bit.

And that's the worrying bit.

We lost out, particularly manufacturing jobs in the United States of America. Is there anything that can be done by corporations, by the government to try to avoid the problem that we had last time?

We lost out, particularly manufacturing jobs in the United States of America. Is there anything that can be done by corporations, by the government to try to avoid the problem that we had last time?

Absolutely there is. But first I think it's understanding what is going on right now. And you're right that in the past few decades two things were happening. There was a bunch of technological change, and there was globalization. There was competition from abroad.

Absolutely there is. But first I think it's understanding what is going on right now. And you're right that in the past few decades two things were happening. There was a bunch of technological change, and there was globalization. There was competition from abroad.

And what we're.

And what we're.

Seeing now in the kind of backlash against globalization in the US, and we're seeing it in both parties, is a much greater focus on protectionism. And if you look at Bidenomics, if you will, one of the problems with the president's policy is that they're conflating a whole bunch of things. There's a lot of subsidies to accelerate the green transition, to accelerate the shift to electrification. At the same time, there's quite a lot of protectionism in there, which is of course works at odds with the attempt to accelerate that transition. So what I think is important is to separate this out. I'm a free trader at heart, always have been. That's what we fought for for one hundred and eighty years. I don't think protectionism and tariffs is a sensible medium or indeed long term strategy for helping US workers. I think the goal needs to be how to to prepare workers to enable them to take advantage of new technologies. And so that's easily said, and you know, it's easy to say, well, yeah, yeah, yeah, you know you need to retrain, but you do need to work out what are the skills that people will need to thrive in the new economy and kind of stopping technology from being adopted is a very short sided solution. So I think that the challenge now, and we didn't get it right in the nineties. In the two thousands, we definitely didn't do enough to equip workers for new technologies. To think about from the education system, to the training system, to the kind of adoption and the factory, what is it that needs to be done to ensure that we have the workforce as needed. And to put this in very concretely, the context right now, if you look at the ambitions of the IRA, the ambitions of the elect for the electrification of this country. There are a huge number of jobs that are going to be created, whether it's in building the factories, whether it's then in actually manning the factories, and at the moment, the concerns are where will those people come from? And so rather than trying to stop that shift, I think the challenge for both unions and for companies is how do we ensure that we've got the right workers with the right skills that we will need, so that we aren't slowed in that transition by not having the right kind of people.

Seeing now in the kind of backlash against globalization in the US, and we're seeing it in both parties, is a much greater focus on protectionism. And if you look at Bidenomics, if you will, one of the problems with the president's policy is that they're conflating a whole bunch of things. There's a lot of subsidies to accelerate the green transition, to accelerate the shift to electrification. At the same time, there's quite a lot of protectionism in there, which is of course works at odds with the attempt to accelerate that transition. So what I think is important is to separate this out. I'm a free trader at heart, always have been. That's what we fought for for one hundred and eighty years. I don't think protectionism and tariffs is a sensible medium or indeed long term strategy for helping US workers. I think the goal needs to be how to to prepare workers to enable them to take advantage of new technologies. And so that's easily said, and you know, it's easy to say, well, yeah, yeah, yeah, you know you need to retrain, but you do need to work out what are the skills that people will need to thrive in the new economy and kind of stopping technology from being adopted is a very short sided solution. So I think that the challenge now, and we didn't get it right in the nineties. In the two thousands, we definitely didn't do enough to equip workers for new technologies. To think about from the education system, to the training system, to the kind of adoption and the factory, what is it that needs to be done to ensure that we have the workforce as needed. And to put this in very concretely, the context right now, if you look at the ambitions of the IRA, the ambitions of the elect for the electrification of this country. There are a huge number of jobs that are going to be created, whether it's in building the factories, whether it's then in actually manning the factories, and at the moment, the concerns are where will those people come from? And so rather than trying to stop that shift, I think the challenge for both unions and for companies is how do we ensure that we've got the right workers with the right skills that we will need, so that we aren't slowed in that transition by not having the right kind of people.

So come back to something you talked about, and that is President Biden's plan and Inflation Reduction Act. They're moving towards so called green He has caught a little bit between two stools here. On the one hand, he wants to go to electric vehicles really fast. On the other hand, people tell us they probably will need something like forty percent fewer workers. Is that as zero sum game? Is there a way to have both workers getting good wages, having good jobs, and moved to electric vehicles?

So come back to something you talked about, and that is President Biden's plan and Inflation Reduction Act. They're moving towards so called green He has caught a little bit between two stools here. On the one hand, he wants to go to electric vehicles really fast. On the other hand, people tell us they probably will need something like forty percent fewer workers. Is that as zero sum game? Is there a way to have both workers getting good wages, having good jobs, and moved to electric vehicles?

The OGS answer is yes, of course, because there will be demand for workers. They may just be doing different jobs. They maybe even be in different industries. But I think will you put your finger on a challenge that President Biden has because he has wrapped his push to green vehicles and his green transition in the Inflation Reduction Act in a kind of context of this is good for the American worker, and not just it's good for the American worker, it's good for the union worker and good for union jobs. And so he's that's where he's caught in a bit of a bind because he's trying to say that one policy is great for today's union jobs and is going to accelerate the green transition, and there really is a bit of a trade off there. I think the importance of accelerating the green transition means there will be good jobs in the future. The US will be greener, cleaner, and will be a stronger twenty first century economy, but it doesn't mean that the exact jobs that we have today will still be the jobs that are there tomorrow.

The OGS answer is yes, of course, because there will be demand for workers. They may just be doing different jobs. They maybe even be in different industries. But I think will you put your finger on a challenge that President Biden has because he has wrapped his push to green vehicles and his green transition in the Inflation Reduction Act in a kind of context of this is good for the American worker, and not just it's good for the American worker, it's good for the union worker and good for union jobs. And so he's that's where he's caught in a bit of a bind because he's trying to say that one policy is great for today's union jobs and is going to accelerate the green transition, and there really is a bit of a trade off there. I think the importance of accelerating the green transition means there will be good jobs in the future. The US will be greener, cleaner, and will be a stronger twenty first century economy, but it doesn't mean that the exact jobs that we have today will still be the jobs that are there tomorrow.

Artificial intelligence, at least has the potential to disrupt a very different part of the labor force. People who are much more trained, a lot of people who are college educated and who could really lose their jobs because it's being done by generative AI. How do we address that problem because you may have a different segment of society that is dislocated in the next ten years.

Artificial intelligence, at least has the potential to disrupt a very different part of the labor force. People who are much more trained, a lot of people who are college educated and who could really lose their jobs because it's being done by generative AI. How do we address that problem because you may have a different segment of society that is dislocated in the next ten years.

Absolutely, and the answer, I think the answer is that we don't know quite how big that group will be or exactly where it will be. Potentially, I think AI will disrupt huge swaths of the economy. It will probably take longer than many people right now in the midst of the hype belief, because quite often if you look at technologies, they take a little longer to integrate than people think, but then they have a much more fundamental impact. So I don't know exactly which industry is the impact will be biggest fastest, but it clearly will be there. I think the answer is and I think that sounds a bit like a broken record, but the answer is the same one, which is not to try and stop the adoption of the technology, because that yields the productivity improvements, which yield the economic growth, which yield the resources which enable you then to invest in and create new jobs. But it is to equip people with the means and the skills for the new kind of jobs. And I actually think that AI interestingly, is likely to be a big enhancer for many jobs.

Absolutely, and the answer, I think the answer is that we don't know quite how big that group will be or exactly where it will be. Potentially, I think AI will disrupt huge swaths of the economy. It will probably take longer than many people right now in the midst of the hype belief, because quite often if you look at technologies, they take a little longer to integrate than people think, but then they have a much more fundamental impact. So I don't know exactly which industry is the impact will be biggest fastest, but it clearly will be there. I think the answer is and I think that sounds a bit like a broken record, but the answer is the same one, which is not to try and stop the adoption of the technology, because that yields the productivity improvements, which yield the economic growth, which yield the resources which enable you then to invest in and create new jobs. But it is to equip people with the means and the skills for the new kind of jobs. And I actually think that AI interestingly, is likely to be a big enhancer for many jobs.

Say, and it's such a treat to have you on WILS. We've got Zanni Battis. She is the editor in chief of the Economists. Coming up, the summer of strikes turns into the autumn of strikes. We talk with Zanni Mitton Beadows of the Economists about whether there's more at stake this time. That's the next time Wall Street Week. I'm Bloomberg.

Say, and it's such a treat to have you on WILS. We've got Zanni Battis. She is the editor in chief of the Economists. Coming up, the summer of strikes turns into the autumn of strikes. We talk with Zanni Mitton Beadows of the Economists about whether there's more at stake this time. That's the next time Wall Street Week. I'm Bloomberg.

This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.

This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.

This is Wall Street Week. I'm David Weston. The US economy has thus far defied the gravity of higher interest rates, in part because of substantial fiscal stimulus, but that may be coming to an end. To take us through what that could mean to the United States and for that matter, for the rest of the world. Welcome back now, Rusher Sharma, he's chairman of Rockefeller International. Sure, thank you so much for being back on Wall Street Week. So you've written an article ECTRA on this very subject. Where are we fiscal stimulus? It lasted a little bit longer than maybe we understood, so.

This is Wall Street Week. I'm David Weston. The US economy has thus far defied the gravity of higher interest rates, in part because of substantial fiscal stimulus, but that may be coming to an end. To take us through what that could mean to the United States and for that matter, for the rest of the world. Welcome back now, Rusher Sharma, he's chairman of Rockefeller International. Sure, thank you so much for being back on Wall Street Week. So you've written an article ECTRA on this very subject. Where are we fiscal stimulus? It lasted a little bit longer than maybe we understood, so.

Much bigger in terms of the take up of some of these Biden plans was much higher than what anyone anticipated. So if you look at it at this time last year, the consensus forecast was that the US economy would be contracting by now in a recession. Instead, for this quarter, it looks like the US economy would have grown by more than three percent.

Much bigger in terms of the take up of some of these Biden plans was much higher than what anyone anticipated. So if you look at it at this time last year, the consensus forecast was that the US economy would be contracting by now in a recession. Instead, for this quarter, it looks like the US economy would have grown by more than three percent.

I can't remember.

I can't remember.

A period in history where the forecasters have been this wrong in terms of what they were predicting and what actually happened.

A period in history where the forecasters have been this wrong in terms of what they were predicting and what actually happened.

And substantio ABOB trend yes, three percent, the substantial ABOB trend, yes exactly.

And substantio ABOB trend yes, three percent, the substantial ABOB trend, yes exactly.

I think the US trend is closer to one and a half percent. This is like three percent.

I think the US trend is closer to one and a half percent. This is like three percent.

So why did this happen?

So why did this happen?

As you only pointed out that a lot of this was because the fiscal stimulus was much bigger than I think what people expected. There are some estimates that the fiscal stimulus may have added one and a half percentage points to GDP growth. That's a substantial amount, you know, like in terms of adding to economic growth. And then the US consumer has ended up being much more resilient, partly because so much of the borrowing that the US consumer does now is really at fixed rates, so it takes a long time for them to refinance and for the higher rates to bite them. On the other hand, they're earning much higher interest on their deposits in the bank, so it's ended up being much softer the blow of higher interest rates. But I think the fiscal shock in some way, which is so much bigger than what anybody had in their models a year ago, is the main reason why the US economy has done far better than what people expected. The only problem is this that you've done this once again by financing it by loads loads of debt. The bond market is beginning to sort of get troubled by the amount of supply that's coming their way, leading to even higher interest rates, and then this fiscal stimulus is bound to fade also because some of the stimulus is that some of these pandemic programs that we had were still rolling on.

As you only pointed out that a lot of this was because the fiscal stimulus was much bigger than I think what people expected. There are some estimates that the fiscal stimulus may have added one and a half percentage points to GDP growth. That's a substantial amount, you know, like in terms of adding to economic growth. And then the US consumer has ended up being much more resilient, partly because so much of the borrowing that the US consumer does now is really at fixed rates, so it takes a long time for them to refinance and for the higher rates to bite them. On the other hand, they're earning much higher interest on their deposits in the bank, so it's ended up being much softer the blow of higher interest rates. But I think the fiscal shock in some way, which is so much bigger than what anybody had in their models a year ago, is the main reason why the US economy has done far better than what people expected. The only problem is this that you've done this once again by financing it by loads loads of debt. The bond market is beginning to sort of get troubled by the amount of supply that's coming their way, leading to even higher interest rates, and then this fiscal stimulus is bound to fade also because some of the stimulus is that some of these pandemic programs that we had were still rolling on.

But it's not just the bond market. It's paying attention. Certain members of Congress are as well. As we're proceeding towards shutting down the government because of that issue. What does that portend for the US economy?

But it's not just the bond market. It's paying attention. Certain members of Congress are as well. As we're proceeding towards shutting down the government because of that issue. What does that portend for the US economy?

But it is an actual shutdown obviously, sort of it begins to detract from growth. But I think that so far most people think that the impact will be rather modest and the worst will be averted. But every week that we have the shutdown, it will obviously have an impact. The issue here is that no one is doing this on any great principled way, which is the fact that, as we have discussed in the past, that if you look at the last fifty years, the US has run a budget deficit practically every year in the last fifty years, no matter if you've had a Republican or a Democrat president, or whoever's been in Congress. And that's what's happened that because for fifty years we have run these deficits, the attitude has come to be of policy makers that deficits don't matter.

But it is an actual shutdown obviously, sort of it begins to detract from growth. But I think that so far most people think that the impact will be rather modest and the worst will be averted. But every week that we have the shutdown, it will obviously have an impact. The issue here is that no one is doing this on any great principled way, which is the fact that, as we have discussed in the past, that if you look at the last fifty years, the US has run a budget deficit practically every year in the last fifty years, no matter if you've had a Republican or a Democrat president, or whoever's been in Congress. And that's what's happened that because for fifty years we have run these deficits, the attitude has come to be of policy makers that deficits don't matter.

In one of the changes has been the interest rate. If you go back two years, four years, five years, we were told by policymakers, don't worry so much about the deficit. It doesn't really matter, as you say, because interest rates are essentially zero or very close to it. They're not zero anymore. So what does that start to do about US expenditures and our budget if we have to have that large a debt service.

In one of the changes has been the interest rate. If you go back two years, four years, five years, we were told by policymakers, don't worry so much about the deficit. It doesn't really matter, as you say, because interest rates are essentially zero or very close to it. They're not zero anymore. So what does that start to do about US expenditures and our budget if we have to have that large a debt service.

I think at some point in time it's going to start to impair other spending, including social spending, because this cost is going to go up and up, right, that's what the bond market is currently pricing in that we're going to have rates for higher for much longer. So at some point in time then that begins to eat up a significant part of the total budget. And if you look at the cross sectional evidence of what happened in other countries, once interest payments is a share of the total budget exceed a particular amount, then the pressure comes on to cut social programs. As I said, the central question here is this, when do international investors say enough is enough and they stop funding this kind of deficit. We haven't quite reached the point as yet because the dollar is still relatively strong. At some point in time, I think we could reach that point, and that's when it really begins to count. Is for the US is concerned that you can't run budget deficits of six percent of GDP every year and have a current account deficit, you know, which is three or four percent of GDP a year, a twin deficit of ten percent of GDP a year. At some point in time, maybe much sooner than we think that will begin to count Rushia.

I think at some point in time it's going to start to impair other spending, including social spending, because this cost is going to go up and up, right, that's what the bond market is currently pricing in that we're going to have rates for higher for much longer. So at some point in time then that begins to eat up a significant part of the total budget. And if you look at the cross sectional evidence of what happened in other countries, once interest payments is a share of the total budget exceed a particular amount, then the pressure comes on to cut social programs. As I said, the central question here is this, when do international investors say enough is enough and they stop funding this kind of deficit. We haven't quite reached the point as yet because the dollar is still relatively strong. At some point in time, I think we could reach that point, and that's when it really begins to count. Is for the US is concerned that you can't run budget deficits of six percent of GDP every year and have a current account deficit, you know, which is three or four percent of GDP a year, a twin deficit of ten percent of GDP a year. At some point in time, maybe much sooner than we think that will begin to count Rushia.

There's a follow one question I think too, when do investors stop funding that, which is, if they're not putting the money into US treasurers, where are they putting the money? If you look around the world right now, some prospects such as China for example, does not seem to be as attractive a place for foreign direct investment. So where does the money go if it doesn't come into US treasurers?

There's a follow one question I think too, when do investors stop funding that, which is, if they're not putting the money into US treasurers, where are they putting the money? If you look around the world right now, some prospects such as China for example, does not seem to be as attractive a place for foreign direct investment. So where does the money go if it doesn't come into US treasurers?

Well, that's what's really helping the US that it continues to be perceived as the best house in a bad neighborhood, right because you got in terms of China in trouble Europe, the perennial problem child of the global economy, Like it's the first country to sort of enter ric possibly even in this cycle. So I think that you seeing some other signs of life and other places like Japan is doing you know, much better, It's done much better this year. I think some of the emerging markets outside of China have done relatively well. These include places like India, include places like Indonesia, Mexico, Brazil, and even some places in Eastern Europe like Greece and even Poland. These countries have done well. Still relatively small to absorb too much capital. But you can see that this sort of new era is beginning. It takes a while, you know, for this to happen, but I think that that there will be a times pretty so I think soon this decade when you will see a much better environment for international investing because the dollar stops appreciating. Currently, the dollar keeps reacting to the fact that years are going higher, so it's like, okay, we must bid the dollar higher. Having said that, it's very it's quite interesting that even though the perception is that the dollar is the appreciating compared to the increase in yields that's taken place, the dollar hasn't gone up that much this time. The dollar is still well below the highs it hit in September October of last year. If you look at the DXY.

Well, that's what's really helping the US that it continues to be perceived as the best house in a bad neighborhood, right because you got in terms of China in trouble Europe, the perennial problem child of the global economy, Like it's the first country to sort of enter ric possibly even in this cycle. So I think that you seeing some other signs of life and other places like Japan is doing you know, much better, It's done much better this year. I think some of the emerging markets outside of China have done relatively well. These include places like India, include places like Indonesia, Mexico, Brazil, and even some places in Eastern Europe like Greece and even Poland. These countries have done well. Still relatively small to absorb too much capital. But you can see that this sort of new era is beginning. It takes a while, you know, for this to happen, but I think that that there will be a times pretty so I think soon this decade when you will see a much better environment for international investing because the dollar stops appreciating. Currently, the dollar keeps reacting to the fact that years are going higher, so it's like, okay, we must bid the dollar higher. Having said that, it's very it's quite interesting that even though the perception is that the dollar is the appreciating compared to the increase in yields that's taken place, the dollar hasn't gone up that much this time. The dollar is still well below the highs it hit in September October of last year. If you look at the DXY.

Well, investors start to look for other places to put the money. As you say, for example, India, Japan, Indonesia, places like that. Often you get into geopolitical questions. Not so much in Japan, but certainly Vietnam is an example where that's true. And India we've talked about before. Is moti getting is act together as a word to make India a more attractive place for forid director investment. In the past, you've expressed list of some questions about that.

Well, investors start to look for other places to put the money. As you say, for example, India, Japan, Indonesia, places like that. Often you get into geopolitical questions. Not so much in Japan, but certainly Vietnam is an example where that's true. And India we've talked about before. Is moti getting is act together as a word to make India a more attractive place for forid director investment. In the past, you've expressed list of some questions about that.

Yeah, I think like in India's case, the entire issue is that there's still a very strong socialist DNA no matter which government is in power. Having said that, in India, we've seen some pretty significant revolutions that have taken place, the entire digital revolution that's taken place in India. I think that's very significant in terms of how it's benefiting people out there, and how even welfare programs are now reaching the people in a more significant way. And just the fact that India in terms of currently is seen as the one large emerging market where you can heage your bit rather than be in China sort of really helps India a lot out here. The only issue with India, but this has always been an issue with that it's the most expensive.

Yeah, I think like in India's case, the entire issue is that there's still a very strong socialist DNA no matter which government is in power. Having said that, in India, we've seen some pretty significant revolutions that have taken place, the entire digital revolution that's taken place in India. I think that's very significant in terms of how it's benefiting people out there, and how even welfare programs are now reaching the people in a more significant way. And just the fact that India in terms of currently is seen as the one large emerging market where you can heage your bit rather than be in China sort of really helps India a lot out here. The only issue with India, but this has always been an issue with that it's the most expensive.

Market in the world.

Market in the world.

Just now, if we just we fret about the multiples of the US market being high, India's at a twenty percent premium to even the US market, which is arguably the most expensive market in the developed world. So I think that the only issue is that expectations out of India are very high. But the fundamental Indian story, driven by digitization, demographics and geography, I think is still very strong.

Just now, if we just we fret about the multiples of the US market being high, India's at a twenty percent premium to even the US market, which is arguably the most expensive market in the developed world. So I think that the only issue is that expectations out of India are very high. But the fundamental Indian story, driven by digitization, demographics and geography, I think is still very strong.

Sure's always so good to have you with us. Thank you so much, that's for sure. Sharma of Rockefeller International coming up. Sometimes is not just the other side you have to worry about. The bullets may be coming.

Sure's always so good to have you with us. Thank you so much, that's for sure. Sharma of Rockefeller International coming up. Sometimes is not just the other side you have to worry about. The bullets may be coming.

From your own troop.

From your own troop.

This is Wall Street Week on Bloomberg.

This is Wall Street Week on Bloomberg.

This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.

This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.

We asked our international economics and policy course, but I'm Michael McKee to look back at other times when the government moved to shut down and what the consequences were.

We asked our international economics and policy course, but I'm Michael McKee to look back at other times when the government moved to shut down and what the consequences were.

Mister Rukaiser was worried about the fight over a six hundred ninety five billion dollar budget. The budget they're fighting over up on Capitol Hill today is six point nine trillion dollars, ten times bigger. Does that worry Wall Street? Well, not so much. Shutdowns have become an almost regular thing, with twenty since nineteen seventy seven. Most of them have lasted only a couple of days, but even the two longest in nineteen ninety five in twenty eighteen produced only a yawn in the markets a brief dip and then a gain for stocks, So you might well ask, what's one more and you'd be right unless, well, here's what could go wrong first, and lets say this shutdown would last a lot longer. It's not a fight between Democrats and Republicans, but between Republicans and republicans first, until they can agree. They can't even begin to fight with Democrats. While the government is in what the Congressional Budget Office euphemistically calls a funding gap, roughly three million federal workers won't be paid. Many of them, including more than a million servicemen and women, will still have to work, but for free. Normally, it's a problem for those workers that is solved when the shutdown ends and they get back paid. But if this goes on for a month or so, it will affect consumer spending. While so far shutdowns have not hurt overall confidence in the economy, a long one might just do that. You can't see any of the other prior incidents in GDP, but there's a recession risk in a fragile economy these days. Also, a short shutdown won't affect the FED, which will be open, but a long one, although the economic data for September have been collected, the numbers can't be released if no one is there to release them. We may not have data on jobs or inflation before the next FED meeting on November first. Even worse, if the shutdown were to last through October or god forbid November, a lot of data won't even be collected. Or, as one observer put it, how do you achieve a soft landing if the pilots are blind David.

Mister Rukaiser was worried about the fight over a six hundred ninety five billion dollar budget. The budget they're fighting over up on Capitol Hill today is six point nine trillion dollars, ten times bigger. Does that worry Wall Street? Well, not so much. Shutdowns have become an almost regular thing, with twenty since nineteen seventy seven. Most of them have lasted only a couple of days, but even the two longest in nineteen ninety five in twenty eighteen produced only a yawn in the markets a brief dip and then a gain for stocks, So you might well ask, what's one more and you'd be right unless, well, here's what could go wrong first, and lets say this shutdown would last a lot longer. It's not a fight between Democrats and Republicans, but between Republicans and republicans first, until they can agree. They can't even begin to fight with Democrats. While the government is in what the Congressional Budget Office euphemistically calls a funding gap, roughly three million federal workers won't be paid. Many of them, including more than a million servicemen and women, will still have to work, but for free. Normally, it's a problem for those workers that is solved when the shutdown ends and they get back paid. But if this goes on for a month or so, it will affect consumer spending. While so far shutdowns have not hurt overall confidence in the economy, a long one might just do that. You can't see any of the other prior incidents in GDP, but there's a recession risk in a fragile economy these days. Also, a short shutdown won't affect the FED, which will be open, but a long one, although the economic data for September have been collected, the numbers can't be released if no one is there to release them. We may not have data on jobs or inflation before the next FED meeting on November first. Even worse, if the shutdown were to last through October or god forbid November, a lot of data won't even be collected. Or, as one observer put it, how do you achieve a soft landing if the pilots are blind David.

Thanks to Bloomberg's Michael McKee, friendly fire would hurt just as bad as enemy fire, so wrote Tom Clancy in his novel Locked On, and history has plenty of examples, like Robert E. Lee losing his best General Stonewall Jackson, shot by his own troops when returning to his lines after a nighttime reconnaissance mission during the Battle of Chancellorsville, And who can forget when someone at City mistakenly sent nine hundred million dollars to Revlon creditors and spent years suing to get it back. This week we had two more examples of just how painful friendly fire can be. The Canadian Parliament invited President Zelensky Ukraine to Ottawa to speak in its August Chamber and the Speaker of the House of Commons took the occasion to honor a constituent, a ninety eight year old from Ukraine who had become a Canadian citizen, someone the Speaker termed a hero of both Ukraine and Canada. Unfortunately, he turned out to have been a hero for the wrong side, having served in a Nazi SS unit in World War II. The leader of the Opposition blamed Prime Minister Justin Trudeau.

Thanks to Bloomberg's Michael McKee, friendly fire would hurt just as bad as enemy fire, so wrote Tom Clancy in his novel Locked On, and history has plenty of examples, like Robert E. Lee losing his best General Stonewall Jackson, shot by his own troops when returning to his lines after a nighttime reconnaissance mission during the Battle of Chancellorsville, And who can forget when someone at City mistakenly sent nine hundred million dollars to Revlon creditors and spent years suing to get it back. This week we had two more examples of just how painful friendly fire can be. The Canadian Parliament invited President Zelensky Ukraine to Ottawa to speak in its August Chamber and the Speaker of the House of Commons took the occasion to honor a constituent, a ninety eight year old from Ukraine who had become a Canadian citizen, someone the Speaker termed a hero of both Ukraine and Canada. Unfortunately, he turned out to have been a hero for the wrong side, having served in a Nazi SS unit in World War II. The leader of the Opposition blamed Prime Minister Justin Trudeau.

Prime Minister is responsible. He is in Ottawa today.

Prime Minister is responsible. He is in Ottawa today.

He can get on his feet and answer for his massive diplomatic embarrassment and shame. And the Prime Minister duly apologized.

He can get on his feet and answer for his massive diplomatic embarrassment and shame. And the Prime Minister duly apologized.

The Speaker has acknowledged his mistake and has apologized. But this is something that is deeply embarrassing to the Parliament of Canada and by extension, to all Canadians.

The Speaker has acknowledged his mistake and has apologized. But this is something that is deeply embarrassing to the Parliament of Canada and by extension, to all Canadians.

Turning what should have been an important and uplifting moment for a Prime minister, who after all, has other problems to address, into something far from what he wanted it to be. And then there's the case of the United States senator keeping his savings at home. Majority of leader Chuck Schumer already had his hands full. What was trying to keep the government funded and trying to hold on to his very slim Democratic majority. But this week, the majority leader learned that one of the senior members of his team, Senator Robert Menendez of New Jersey, the chair of the Foreign Relations Committee, had been caught with four hundred and eighty six thousand dollars in cash along with some gold bars in his house, with a cash stuffed into various items of his clothing. Senator Menendez was promptly indicted for bribery, leading his own Democratic colleagues to call for him to step down, though Senator Mendez doesn't seem inclined to take their advice. But as we've learned, you know this is never about the gold.

Turning what should have been an important and uplifting moment for a Prime minister, who after all, has other problems to address, into something far from what he wanted it to be. And then there's the case of the United States senator keeping his savings at home. Majority of leader Chuck Schumer already had his hands full. What was trying to keep the government funded and trying to hold on to his very slim Democratic majority. But this week, the majority leader learned that one of the senior members of his team, Senator Robert Menendez of New Jersey, the chair of the Foreign Relations Committee, had been caught with four hundred and eighty six thousand dollars in cash along with some gold bars in his house, with a cash stuffed into various items of his clothing. Senator Menendez was promptly indicted for bribery, leading his own Democratic colleagues to call for him to step down, though Senator Mendez doesn't seem inclined to take their advice. But as we've learned, you know this is never about the gold.

Whatever helps you sleep a night, sweetheart, that does it.

Whatever helps you sleep a night, sweetheart, that does it.

For this episode of Wall Street Week, I'm David Weston. This is Bloomberg. See you next week.

For this episode of Wall Street Week, I'm David Weston. This is Bloomberg. See you next week.