Sound On: Positive GDP, Putin Nuke Denial

McMaster wants a banned same sex marriage. You just heard that tonight called Floomberg Sound On with Joe Matthew on Bloomberg Radio. The Economy strikes back. Welcome to the fastest hour in politics. As the White House cheers today's GDP reports showing the economy back to growth. But what does it mean for interest rates, for the prospect of a recession, and for the mid term elections. We'll talk about it

with Marks Andy, chief economist at Moody's Analytics. Later, Walt Street votes with donations, of course, ahead of election day, we follow the money with Bloomberg's Shinali Bass. Vladimir Putin denies he's planning to use nuclear weapons, just as the Pentagon rejects a ban on using nukes for conventional threats. We're gonna talk about it all with our signature panel Bloomberg Politics contributors Jeannie Chanzano and Rick Davis here for the hour the big news this morning before tech earning

stole the market's attention. Gross domestic product rising by two point six percent, rebounding from a negative number. Great news for the White House. You heard President Biden as he came out the door on his way to the chopper, flying today to Syracuse, where he's been upstate New York to look at Microns new plant that they're building there for computer chips. He was all smiling. Report today, the

GDP report, Things are looking good. Yeah, as I read in the terminal, though economy shows worst yet to come as cooling is just starting. The recent rebound is looking like a high watermark for the expansion. So what does that mean for the economic message coming out of the White House? With less than two weeks to go? Mark Dandy joins us now for his insights, of course, the chief economist at Moody's Analytics, Mark, welcome back. It's good to be with you, Joe, thanks for having me. So

President Biden is calling out the doomsayers. He says, this is further evidence today that the recovery is continuing. To quote power forward, is he right? Well, it's moving forward. I don't know I'd use the word power, but it definitely is, uh, moving forward. You know, it does dispel I think the concern that the economy is in recession nor hasn't been up at this point in time, but you know it's struggling to grow. We spoke today with Cecilia Rouse, of course heads the White House Council of

Economic Advisors. Her job today was to make all of this sound orderly. Listen to how sheep would it if we were to get under the hood. What we saw is that there is continued resilience and consumers think but it did ease. So that is consistent with what the FETE is trying to do. We also so that saw that businesses continue to invest, but again that is slowing as the FED as we would hope. She seems to

be pointing to a soft landing mark without using those words. Uh, and we know the President still thinks one is possible. Do you yeah, I do and she makes a good point. I mean, consumers and businesses remain uh in the game. They're they're not spending with gusto, they're not investing aggressively, but they're doing their part. As long as that continues, I think the economy has a fighting chance of getting through without a recession. So yeah, I think the soft

planning is still a real possibility. But you know, obviously, having said that, as the feed is raising interest rates here aggressively trying to quell inflation, recession risks are going to be awfully high over the next year or so. Yeah. So if I asked you that question in reverse, you know, as a recession still possibly, you would say, yeah, that too, good point, that's yes, exactly right. You know, my base case, my most likely to area is we make our way through.

But I wouldn't argue with anyone too strongly they said, no, we're going into recession. The biggest contributor to growth here was net exports. Mark. Is that is that sustainable? No, especially if you're going into a global recession and you're counting on other partners to contribute to growth. Yeah, exactly. I I think the deficit will continue to wide. We got a bit of a repriet here in the third quarter.

I think that's more timing technical matters. But the trade deficit is going to continue to wide now, so that's not going to be a source of growth. That'll continue to be a headwind going forward. Residential investment was pretty tough. I mean, it fell off a cliff here, down over continuing a trend. How worried are you about a real crash in the housing market in the next year. I don't think a crash. I mean, obviously it's correcting. Prices

are down and i'll continue to fall. I mean, affordability has been hammered by the brought up in mortgage race from north to seven percent of the a year fixed that's more than double what it was just a little over a year ago. And that combines with the previously a high house prices of people just can't afford that the demands falling in. Prices are weakening. But I don't expect to crash, primarily because I don't expect a lot

of foreclosures and distress sales. I mean, borrowers in recent years have been a good quality, high credit scores, and they're they're taking on plane Vanilla thirty year, fifteen year rate mortgages. So I just don't expect a lot of ceclosures. And if we don't get a lot of foreclosures, I don't I don't think we'll get a crash. A lot different than where we were in two thousand seven. Yeah, there's no comparison. You know, back then, the quality of

the borrowers very low. It's prime obviously, and the mortgage products were just bizarre, you know, two year exploding arms, uh a gam loans, I mean, just a lot of weird stuff that didn't perform well when it came under a lot of stress. But a thirty year mortgage, the fifteen year mortgage, you know, the race took a state low for these borrowers, and so I think that takes

a lot of pressure off. Well, Mark, Andy, what do we have to look forward to between now in the midterms we talked so much about I guess the White House and Democrats will We'll try to turn this GDP reported to a good story today and say no, by the way, we were not in a recession, as you made clear. The next couple of weeks though, we're creeping up on another FED meeting. What will happen that day as people are prepared to vote, Well, they're gonna raise rates.

They's called us pretty clearly that they're going to raise three quarters or percentage point that Yeah, I don't know anything that would change that does a hurdle for changing that is awfully high. And then we get one more data point tomorrow, the Employment cost Index, which is important because that's the best measure of wage growth and the FED is trying to slow the job market. Slow that

get inflation back in. So that's that's an important number, but it's hard to envisage any number that would just waged the Fed from not raising great three quarters from a point when they beat in the week next week. Considerating everything we hear from the White House about the strength of the economy, historically strong job market, historically low unemployment. Then you hear from Republicans this is the worst economy. Inflation is through the roof, and it's become the biggest

issue on the campaign trail. A lot of people cite the economy as their biggest concern when they talk about preparing to vote in November. Who's right, Well, they're both right, Yeah, it spends much you know, your prism I mean, the Democrats are right that the job markets very strong, everyone has a job. Unapployment is very low. Layoffs are about as low as they've ever been, so that's all good. But if people can't afford to live, and that doesn't matter, right, Yeah,

well that's the point. I mean, Republicans are right, and inflation is just painfully high, and you know that that we can't stand that for very long. Instead, the fetch

raising industrates very aggressively to quell it. So, you know, I think it spends on you know, your your perspective and your prism, which part of the economic telephonpor touching, um, you know, But you know, I think it's fair to say over the next twelve eighteen months is going to feel a lot more uncomfortable that you know, more and more people are going to think this is a bad economy rather than a good one because the FED has to slow growth, has to get inflation down, and that's

going to take some some pain and suffering. I think financially we're strapping in Mark Sandy, chief economist Boody's Analytics. Many thanks for jumping on the line with us. As always on Bloomberd anytime, Joe, Thanks for the opportunity. So some of the panel just to get a quick take from Rick Davis and Jeanie Schanzano Bloomberg Politics contributors of course, our signature panel here on sound On. It sure looks like the White House is trying to keep the ball

in the air here. You know, everyone's onto Amazon and Apple earnings. But I mentioned that tweet from the President Rick. For months, doomsayers have been arguing the economy is in a recession, indicating that this proves it is not, and he's they're they're calling out Republicans in a news release in fact checking some of them, including Kevin Brady, who called the g d P report uh the claiming it was about ghost growth. The politics behind this are running

pretty thick. Here is this good news? Are bad news? Rick? You know? Look, I mean I think this is gonna be a good news day for him for the President. He obviously jumped on it and tried to drive it first thing this morning, which was smart to get out there and define the numbers the way you want them, because, as Marks Andy pointed out, I mean it's just in the eye of the beholder, right, I mean, if you're Democrats, you can crow about and and spending, and if you're

Republicans you can talk about the pain and inflation. Um. The reality is people have gotten used to the pain of inflation, right, no matter what happens. If you still see those grocery prices up, if you see gas prices start taking up, um, you know you feel pinching your wallet. You're not taking that vacation this winter. You know, you're gotta put on those skis. That's that's what you're feeling at home. And all this just becomes noise, a noise.

We're not talking about g d P over dinner tonight. I'm assuming, uh, Genie. And the fact of the matter is, if the White House has to celebrate it not being a recession, you've sort of lost that war already, haven't you. You have And this is a really difficult sell for the White House. Obviously, the g d P up growth is good. But you know, the reality is this is the old tale of two realities, macro versus micro. The

macro numbers are good, look at the micro. Look at the US Census household servit that Bloomberg reported on just the other day overt of households feel it somewhat are very difficult to cover their expenses. That is the highest number we've seen in to almost three years. That's the reality people are feeling on the ground. Mortgage rates topping seven percent, and the White House is, you know, required now to go out and celebrate these good numbers. So

how you do that is a very difficult dance. And you know it's the reality. The difference between an economist and a political scientist, or or somebody looking at these numbers, They're looking at very different numbers which tell two very different tales. The presidents on his way to Pennsylvania, Rick is telling this story make him sound tone deaf? Uh it could? I mean, if he doesn't, If he starts saying, oh, you're so much better off today because of GDP growth,

people are gonna scratch their heads. Well that'll be the conversation tomorrow. Genie and Rick with us. Our signature panel is back with more from here in Washington. I'm Joe Matthew check traffic and markets on the way. This is Bloomberg. You're listening to Bloomberg. You sound on with Joe Matthew on Bloomberg Radio. The White House trying trying to tell a good story about the economy, pointing to strong numbers

in the job market. Today's g d P report trying to fan those flames a little bit before the election. Knowing us we're all reading here on the terminal, this GDP report today shows well, the worst is yet to come. This is the high water mark for the expansion right here, right now. A lot of people are predicting a recession next year, including some very smart people here at Bloomberg

in our economics department. It's pretty grim. The President today taking the road on the word on the road, I should say to Syracuse, that's where Microns building, that big chip plant is up there, trying to again get the story told. Just as we learned that House Republicans are launching an investigation in what they are calling potential misuse of the Strategic Petroleum Reserve, one of the other levels that the White House has been pulling here to try

to create a better economic environment before everyone votes. This is just the beginning, right The Oversight Committee is gonna be busy. Let's reassemble the panel. Rick Davis and Jennie Chanzaniol Boomberg Politics contributors UH the White House knows this kind of stuff is coming here, right, Genie, it's just a matter of getting through the mid terms, and it's

going to be investigation heaven. Yeah, and Joe you just said it as good as it gets, both economically and you know, it's hard to imagine, but maybe even politically for this White House because as we expect the House to move Republican, we are going to be looking at these kinds of investigations, this kind of oversight of we're seeing, you know, reported about the spr but also we're hearing talk about a potential Biden impeachment. That's you know, there's

already been calls for that we know before. But the minute they have the numbers to do that, it's going to be very hard for Kevin McCarthy to resist that call. So the administration is facing real headwinds visa VI the House, and that's going to be true whether the Democrats are able to narrowly retain the Senate or not the House can go forward with this oversight. Is this a real investigation or would it be rick or is this just the type of messaging that will we should expect from

a Republican House. You know, it just depends upon the leadership of the committee and whether or not they at this as a biparson opportunity to try and get to the bottom of I mean, like, there are a lot of people on both sides of the aisle who are concerned about these repeated releases of the Strategic Patrollum reserve, not for the stated reason of the reserve, which is to ensure that we have a ready supply of gas

in case of shortages, but to manipulate price. And so their Republicans on that committee aren't the only one asking questions is whether or not we're supposed to be using this pro for this House Committee on Oversight and Reform. I mean, they would have subpoena power because it is it worth using that power in this particular case. We're talking, as Genie said, all the way up to the idea

of impeachment. You know, look, I mean you only have to use the subpoena if people aren't willing to cooperate. I mean, no indication at this stage at Jennifer Granholm, for instance, Secretary of Energy is going to like uh avoid uh testifying to Congress. So I think it's you gotta wait and see what people's reactions are to this. But uh, look, Republicans aren't the only ones who've got concerns about it. I mean, you know, even the folks running O pick of said, Hey, you guys are trying

to do price manipulation. Say problem you have with us, now you're trying to do the same thing. Well, Jenny, I don't know if we're gonna be talking so much about impeaching Joe Biden. Marjorie Taylor Green would tell you that, but there are serious conversations about an impeachment beginning with the Secretary of Homeland Security. Right, make this a border issue. I just wonder why spending time on the spr when the Biden administration is already out with a plan to

start refilling it. Well, you know, there has been by partisan rather bickering on the stockpile for a long time, so this is nothing new. It's always been a politicized issue. We heard John Barosso from Wyoming come out when when the Biden administrations first announced what it was doing, and he said something to the effect of this is not for a Democrat election crisis. And so these are questions

that they're going to ask. But what they haven't addressed is the fact that presidents from both parties have ordered sales from this. That's after the First Gulf War, Hurricane Katrina, Libya, and so on. And so this is a long time issue that has you know, erupted many times over the last several decades, and we'll continue to But to your point, this type of investigation at all levels is going to continue.

You mentioned Alejandro Majorchis. People talk about an Anthony B Lincoln, Marrick Garland certainly is going to get hit, Kamala Harris, and of course Joe Biden. Those are probably the top five. We're going to see investigations, talk of impeachment for the next two years if the Republicans take the House. And that's the reality. And you know, there was a time we all lived through no impeachments. We're going to be living through impeachment. Heaven or heaven talk of impeachment for

a long time. Rick, The national average gallon of gas today triple a three dollars seventy six cents. The White House will tell you what is that that's down a dollar in fifteen or something like that. Where where does that factor into people's decision making? It's it's obviously not as low as people wanted, but it has come down quite a bit. Yeah, it's come down quite a bit. People got stung over the summer when it was so high. I think that obviously is better above five in June. Yeah,

above five, And it was painful. I mean we saw people's reaction. I mean it was coming out in the surveys. Two people were angry. Uh, and so uh, this is an improvement to that. But then the offset to that or food prices where they have skyrocketed, and so you know what you're saving now for a gallon of gas, you're spending on malk and and bread. So the tradeoff

isn't good. Well, you know we've we've just found that direct correlation with gas prices and the president's approval rating, both of which are going to factor in to the results on election night, whenever those are going to be complete. We could be talking about it for weeks. A lot more to follow as we turned to Wall Street votes and follow the money with Shinali next, I'm Joe Matthew. This is Bloomberg. So you know, everyone wants to pick a winner here in Wall Street is no exception. As

we look ahead to election night. Even if sometimes the politics don't agree, everyone wants to be in good favor once the winner are chosen. So where's the money going this time? Bloomberg's Shanali Bossik has been doing great reporting on this. She has the cell phone numbers of the biggest bankers on Wall Street and she joins us now, Shanalie, welcome. What issues are Wall Street focused on? What's most important

right now? It's so interesting because there are so many mixed feelings on Wall Street between personal interests and professional ones.

And when you look at it, the first two years of the Biden administration has really been defined on Wall Street by tough regulation, a historic amount of rulemaking by SEC Chair Gary Gensler, as the House Republicans really like to point out with some regularity, And so what does that mean for the second half when there's kind of potentially more control in Congress from the Republican side of the party. Does that mean that some of these regulators

particular can be reined in? Can that mean their budgets can be constrained? And those are certainly things that a lot of Wall Street is looking out for and in some cases pressing for. So that seems to fulfill the stereotype a bit at Wall Streets at least views Republicans as more business friendly certainly when it comes to regulations. To your point, is it is it fair to say that out loud? Absolutely? And listen what does this mean. It means the eyes are all on the SEC and

who controls the budget there and who regulates them. The eyes are all on the FED, of course, and what kind of pressure there is on the Fed to control the inflation story versus the direction of rates and you know what, what levers do they actually have at the end of the day. And I had to push this right to the lawmakers to watch. How can you not because sometimes if not about just what seats are up, sometimes it's about who is gaining more power as some

of these seats start to change. And one of the person people that comes up in a lot of my conversations as Senator Susan Collins because of her place as taking over as the top Republican on the Appropriations Committee. Meanwhile, Patrick mckenry on the House Financial Service Committee is also very highly watched. And Jason Smith, who serves on Budget and Ways and Means, and so of course you know, let's see how the tides turn after the mid terms.

But these are certainly folks that are considered allies, if you will, of a lot of the agenda on Wall Street, does chelig does Wall Street care as much as we like to think about crypto regulations or or or just just so much other stuff to be focused on right now. Well, what's interesting is some of the biggest donors this cycle are coming from the crypto industry. Think Sam Bankman Freed.

Although a lot of the giving had gone to primaries, you have Sam big Madrid emerging as this massive political donor, mostly known in the democratic sphere. Some of the money goes to crypto interests, but a lot of it is said to go to pandemic preparedness. But his number two guys or you know, one of his deputies rather Ryan Salem, who works at the Bohemian subsidiary. But you know also in American himself, he is one of the top Republican

donors in the United States now. And so you have two folks in the same kind of kind of world here who are fighting for two different things. This is fascinating and I love I of that You're dropping names on the air here. What are they What are you hearing over the clinking of cocktails when comes up? What does Wall Street think about another Donald Trump run or or is that not part of the conversation right now? Well, I think it's very, very very much a part of

the conversation. And I thought it was going to be more of the conversation than the mid terms, but a lot of government affairs offices tell me that the midterms matter more. And the reason being is because the lawmakers, at the end of the day have the control over the policy, but the president has control over the over the national discourse and rhetoric, and the question of Trump

is very polarizing, even on Wall Street. And that's the reality we're hearing that people are giving more, for example, quietly than they used to, more quietly than they used to because of the polarization even among their peers on Wall Street. Well, that makes a lot of sense. She'll be with us on election and I can't wait to have you with us. Chanali Bassik from Bloomberg Finance correspondent talking a lot about politics these days, and Shanali, thank you,

one of the hardest working people in the newsroom. As we reassemble the panel. Rick Davis has a good sense of this with his role as a partner at Stone Court Capital. Jeanie Schanzano is with us as well Bloomberg Politics contributors. Where do you see the money going? Rick? It's interesting, you know, is this more about influencing the outcome of a race or investing in the in the potential good graces of a potential winner. You know, that's

a it's a really good point. Uh. A lot of people give money because I just want to be friends long term. You know, let's let's let's get together. I'm gonna write a check to your committee. But like those checks are small here and that kind of thing regulated money that goes straight to the member, uh, the super PACs or where the big money go. And they're conceptually not even supposed to be associated with the campaign anyway. But your name gets out there, uh, and you look

like you're being supportive. The really big money tends to hide in the five oh one c fours where there's no identification. They just want the right person to pull the levers of power, like Sonny suddenly said, whether or not it's ripping off regulations that are currently on uh. Because of this current administration or or the opposite, and and so there are a lot of places to play, and a lot of these guys who are really putting to work big money, uh tend to do it behind

the scenes. There are more places to play. I guess you could say than ever, Genie, how dangerous is that for politics? It is that. And I was so glad Sinali mentioned of Pat mckenry because he's been telegraphing, i should say, more than telegraphing, talking about what he would do. And he's talking about allowing fin techs to grow, clarifying rules for crypto companies, and of course, much to the dismay of many Democrats, cracking down on the CFP bureau. So you know, you have a clear sense as to

what he would do. And Democrats in contrast, saying they would focus more on the issues they've been focused on already, like housing in consumer protection, and you know the CFP a part of their discussions as well, but certainly not

in terms of a crackdown on its director. So you really do have a very good set if you listen carefully to some of these folks who will potentially be be handling these committees where they're going to go, and that tells people where to put their money and what they hope to see and how to influence the conversation policy. Why is going forward? Regulation and taxes? This is what we're talking about on Wall Street and who has a better story to tell? Great panel will be back with

Rick and Jeanie. And thanks to Chinali for setting us straight as Wall Street votes on the fastest hour in politics. I'm Joe Matthew. This is Bloomberg. You're listening to Bloomberg. You sound on with Joe Matthew on Bloomberg Radio. Vladimir Putin has no idea what you are talking about. Days of talk about a dirty bomb and shocker, Vladimir Putin says there's no need for Russia to launch a nuke strike on Ukraine. Who brought that up? What's the assutment?

The Western recent years and a special in recent months has taken a number of steps to escalate. Well, as a matter of fact, they always played for escalation. There is nothing new here. This is the incitement of war in Ukraine. These are provocations around Taiwan. The destabilization of

the global food and energy markets is your fault. It turns out interesting as this speech is being delivered here, big speech by Vladimir Putin, uh speaking to a room full as I read on the terminal of foreign policy experts, with the West wing trying to influence Moscow's friends and allies by showing quote how terrible Russia is unquote really sore all the time, you know. But as this is happening, Lloyd Austin, the Secretary of Defense, acknowledges, as Vladimir Putin mentions, Taiwan.

Yet China actually is the great long term threat. But right now we're looking at you. Russian aggression does pose any mediate and sharp threat to our interests and values. And Putin's reckless of reckless war of choice against Ukraine the worst threat to European security since the end of World War Two, has made that very clear for the whole world. And now from the Bloomberg Pentagon Bureau, Pentagon

rejects ban on using nukes for conventional threats. This is interesting, the new national Defense strategy rejecting limits on using nuclear weapons in the face of a conventional military threat. A lot of messaging going on here as we reassemble the panel with Rick Davis and Jeannie Chanzano Bloomberg Politics contributors getting a lot out of you guys today. I hope everyone ate their wheaties. This is pretty important stuff here, though, Rick,

does this actually tamp down talk of nukes? Though, well, it certainly changes in the conversation. I mean, we entered the Obama or the Biden administration with conversations about no first strike capability, right, this is what he talked about on a campaign trail. And this is a complete reversal of that. And not only is it an opportunity to

nuclear weapons, but in a conventional fashion. And and that of course plays right into the conversation that we've been having for the last month about the saber rattling with nuclear weapons by Moscow. So, uh, this is gonna be a hot topic all summer. I think the microcosm you talked about was it's all under the under the rubric of the fact that, you know, the biggest build up in the world's happening right now around nuclear weapons is

with China. I find this fascinating. Genie the Defense Department saying in this document that quote, by the twenty thirties, the U s will for the first time in its history faced two major nuclear powers as strategic competitors and potential adversaries. In response, the US will maintain a very high bar for nuclear employment without ruling out using the weapons and retaliation to a non nuclear strategic threat to the homeland that doesn't include NATO nations, doesn't, you know,

it doesn't. And this is quite a difference from what we heard originally. Um. You know, for many people listening to and watching Joe Biden on the campaign trail, he was talking about a sole purpose in terms of nukes, and that was deterrence, and all of a sudden, we

are seeing him move away from that. Now, we have to be clear, a lot of that movement from this sole purpose language, and there was a great foreign affairs piece he wrote about this all of that, not all, but a lot of that movement is because of pressure from our allies. And you also see this all over the document you're referencing, which is that our European and Asian allies have said that that language puts them in danger.

And that is probably a good explanation as to why we're seeing this movement, because one thing Joe Biden has been committed to is building alliances or as he thinks about it, rebuilding alliances that Donald Trump you know, started

to that he caused to deteriorate during his administration. But it has also angered a lot of people who are concerned about nuclear control and they are saying that this is the wrong message to send because it is really raising the specter of a nuclear war at some point in the future. Well that's the of a statement where Rickett, is this really about the homeland or does this also apply to an Article five attack on a NATO country

with this standoff right now in Europe? You know, look, all those UM rules already apply, right, I mean, there's nothing new when it but for a nuclear response to a conventional front specific again, I mean, it was never taken off the table. Uh. It was just in this case because we've got an updated National Defense UM Report strategy, UH that they put a lot of thought around it.

And my suspicion is from everything I've heard and read that they've put out of the Defense Department the last two years, Uh, this is really more to address UM, the growing threat that China has. I mean, China had virtually no nuclear weapons, uh, and just a few years ago and they are now looking at having a thousand nuclear weapons before the end of the decade. Uh, this is the most advanced build up we've ever seen. Well,

what could be causing that? Right, you'd ask yourself. And then you overlay that with a much more aggressive approach towards China that both the Trump administration and the Biden administration have been pursuing. And you've got a lexer for a new strategy when it comes to conventional warfare, that

you might use tactical nuclear weapons. How much of a problem is this going to be for progressive Democrats, Genie, knowing that President Biden pledged Candidate Biden pledged to declare the US nuclear arsenal used only to deter or retaliate against a nuclear attack, not a conventional one. Yeah, I mean, we are already hearing from that group and others who are saying that this is, you know, diametrically opposed to

your commitment to a sole purpose of deterrence. Because, of course, what this does it leaves over the possibility that the United States could strike first, and that is a real concern. And you know, to Rick's point, the document is very clear, we're talking about twin threats from China and Russia. And for those of us who lived through nine eleven and the Obama years, this is a stark difference from the focus on say, terrorist groups like the Al Qaeda and

Islamic State. While we still are hearing talk about that, there is a you know, a real focus in this document on China and Russia as the threat and no longer are we talking just about nukes at least from the U. S perspective as deterrence only. And politically, the President is going to have to answer to that. He's going to be relying a good deal on Russia's incursion or attack against Ukraine to justify what he's saying here,

or what at least what the Pentagon is saying here. Well, with all this talk of using nuclear weapons, it's worth sharing the story of Vasily Archipov. I hope I'm pronouncing it right. You just mentioned in this morning's Daybreak column, which, by the way, I highly recommend you wake up, you look at the app go to Daybreak. D A. Y b. A Soviet naval officer credit with single handedly preventing a nuclear war. His story was the inspiration for the movie

Crimson Tide. You guys for this, right, Denzel Washington Gene Hackman, the two officers fighting over whether to follow orders to war after the message from Washington was interrupted. We cannot launch our missiles unless both you and I agree. How do sir? This is expressly why your command must be repeated. It requires my assent. I do not give it in for them. That's great movie. The real story, by the way, hang on, let's do this right. Let's dive first. Excellent. Yeah,

you with me, Rick, This is okay. Here we go. Hold your breath, everybody. Nineteen sixty two. Here we go. We're going deep. The Cuban Missile Crisis. Alarkapov was second in command of the diesel powered submarine B fifty nine. They were off the coast of Cuba when a U. S. Navy battle group spotted them and started dropping depths charges.

The Soviet crew just leave the movie, lost contact with Moscow, thought war was breaking out, and the captain wanted to launch a nuke, a nuclear torpedo the sky I'm telling you about. Officer Arkipov disagreed. He refused to second the order and averted a nuclear war that certainly would have followed. They have made a documentary. This is the man who saved the world. It was called and it happened on this day in history in nineteen sixty two. My question

for the panel here is what would happen today? The moral of the story here right is sort of personal integrity, personal principle in a time of war. What would happened today, Rick in the war in Ukraine, for instance, if something like this came about or a different Russian military than was around in the Soviet times. Now, uh yeah, I mean you would hope that they would actually be more

cautious about the use of a nuclear weapon. But we had a little bit of this, uh scenes center in the United States just a few years ago under the Trump administration, where there was some concern about nuclear weapons being used and what safeguards do we have in place, and what are the rules that attached to it? And and I think we the good news is we learned that President United States just can't press a button and launch nuclear weapons, and so there's a much more elaborate

process that that has safeguards. And so, look, these are incredibly powerful weapons that can cause you know, enormous destruction and start wars that have no end. And and so you're it's good to find out that today we don't have as many um uh chances of having that kind of mistake made, if you want to call it that. But in this case you also have to feel good about the fact that there are people in and around

these weapons systems that have a moral compass. That's where let them be used unless they absolutely have to, and you do wonder if they would be there. I'm assuming that these redundancies exists for the Russian military, is well, Genie, Yeah, let's hope so. And and Joe, I'm happy to talk about this movie happier than Talladega Nights, which you mentioned yesterday. So the movies are improving, Joe mant you back. Just stick with me. I'll tell you what. Apologies and thanks

to our panel, Rick and Genie. That's one ping only fleas. We'll meet you back here tomorrow on the fastest hour in politics. This is Bloomberg