Will Hurd on Immigration Reform, Did US Shoot Down Hobby Balloon?

Policy and perspective from DC's top name. It's been nearly one year since Russia's cruel and unprovoked convasion of your Frank. A very significant grinding battle of attrition. When there is a hope and when there's a lost man standing, there is a chance to win this war. Bloomberg Sound On with Joe Matthew on Bloomberg Radio. Kevin McCarthy makes another run for the border with the stare offf with Democrats drags on. Welcome to the fastest hour in politics, as

we grab the third rail. In a conversation with former Texas Congressman Will heard for it in Biden is packing for poland we'll look at what's behind the mission with our signature panel including Bloomberg Politics contributors Rick Davis and Jeannie Chanzano. Don't bet on crypto regulations this year in Congress. Nathan Dean will join us from Bloomberg Intelligence that's actually running odds on legislation. Did the US just shoot down a thirteen dollar hobby balloon? We'll talk to the man

who builds them. Speaker Kevin McCarthy makes his first trip as speaker to the southern border, bringing a delegation of freshman Republican House members to Arizona. Are they toward customs and border protection operations in Coaches County? He spoke with reporters with the border wall as a backdrop. Listen, there has been no legislation change, But why has the border? Why has this region gone from sixty six thousand people

come across to fifty thousand? Why is everybody who comes across here where camouflage outfit and rugs on their feet? Why are we catching so much Finnel? The only thing that changed was the administration and the administration policies. He was ready and promised legislation here, but made clear in conversation with reporters you listen to this, that it's not ready yet. Here's McCarthy again. We've got a lot of

ideas inside Congress it's different than the Congress before. We're just not going to write the bill and put it onto the floor. We're gonna listen to the people that are on the border. We're gonna listen to border agents. We want the very best ideas, and we're gonna each other. Yes, we're moving it now, just as we bring our committee down here. Okay, So legislation forthcoming presumably, And we recall, of course President Biden's urgings at the State of the

Union to pass his immigration plan. Here he is again. Remember, we now have a record number of personnel working to secure the border, resting eight thousand human smugglers season over twenty three thousand pounds of fentin all in just the last several months. We launched a new border plan last month on lawful migration from Cuba. Hating Nicaragua in Venezuela has come down as a consequence of that. Remember, Kevin McCarthy was shaking his head when the President called on

Congress to pass his legislation. But all we have in the meantime here is a lot of photo opportunities. McCarthy's trip today followed by other Republican delegations the next couple of weeks. Minority Leader Hockeyen Jeffrey showed up on the border today with a trip to Laredo, Texas, and so we wanted to talk with Will Herd, who of course

represented a border district in Texas. The twenty three covers about five miles between San Antonio and El Paso, served on the Intelligence Committee, dealt with the immigration issue a lot after her career in the CIA, and wanted his view on all of this. Congressman, welcome back to Bloomberg. It's great to have you. Is there any chance of getting immigration reform through this Congress or is this really

all for show? I think it's going to be difficult because, unfortunately, um, a lot of folks are more interested in using this issue as a political legend against one another encamp pains, rather than actually solving the issue. And this is an issue that started becoming a crisis under the last administration and Trump administration and has just bloged um under under the Biden administration. And look, we know what fixes needs

to happen. It's not like there's some new thing that needs to become that needs to come up to be done. Got to stop treating everyone that's coming across the border as an asylum seeker. UM, we can talk further than that if you want. We need to stop. You know, I know when the President's mentioned these eight thousand human smugglers, I don't know where those eight thousand human smugglers were dismantled. Because we should be dismantling networks throughout Central in South America. UM.

We should be working on streamlining legal immigration as well. UM, and we should be still working on some of the root causes that is causing people to leave their homecome Historically speaking, you know, a lot of illegal immigration was coming from Hundre or so I'll sal what a Guatemala over the last year and a half or so, basically almost every country um, that that has been coming here but historically asked diploma. We can be addressed in those

root causes there. So, so those are those are some of the buckets that we need to be addressing. Well. Speaker McCarthy says, he's on a listening tour though, kind of like they're starting from scratch here. If you think that we already know the solutions, why can't we start writing a bill? Look so, so part of this also is is implementation of existing laws Um, there's been a lot of discussion about Title forty two. This is using health reasons to prevent somebody from coming in the country.

But there's already legislation, is already a role called Title eight. A Title eight basically says that if somebody is coming into the country illegally UM oftentimes defined by coming in between our points and intrigue, that doesn't have proper identification, that they're they're they're illegally in the country and can be deported. That doesn't have to go through an immigration court. It's it's it's expedited removal that can be happening immediately.

Why um, that's using that Title eight was something that stopped under the Trump administration and President Biden's administration has has continued this notion of asylum. Asylum is very clear

what asylum is. You have to be part of a protected class, meaning, um, you know, based on your your gender, your ethnicity, your sexual orientation, and that you're being persecuted by your government because you're a member of that protected class, or you're being persecuted by a group because you're part of that protected class, and your government won't defend you right that those are the reason doesn't cover pretty much all of Central America though, No, and it doesn't, it

actually doesn't. Right, What if you're coming from an oppressive, an oppressive regime and you're knocking on the door at the United States, how do you make that judgment? Well, so it's so it's it's it's clear in legal terms, right. So so Honduras, Guatemala, you know, Costa Rica, it's not happening now, Venezuela, Cuba, even Russia. Now that is something that is is it's it's a little bit, it's a little bit. You know, there's more likelihood that those grounds

are met. If you look over the last thirty years, I'm a people that have asked that have sought asylum in the United States, the numbers similar between like thirty five actually get asylum. Um so that means, you know, seventy are actually not. So so trying to come to the US to get a better paying job is not a reason to to to seek asylum. So oh and by the way, because this system is being abused, the people that really need asylum are getting impacted by this.

And so so that's a big reason why you're seeing this, this this influx um let me ask you we can just flip the coin here for a second. And something that Speaker McCarthy talked about today and I thought it was interesting because you know, there are different ways of looking at this, you know, do you go on the supply side or the demand side, and do you go outside of the country as he's suggesting in this case, to stop things before they ever get to the border.

Here's McCarthy again. So if you want to stop fitting on the first call you should make as the president. She's exactly what I told President Biden inside the Oval office the other week. Called President she and tell him to stop the chemicals coming down. If you want to stop the cartels, you've got to be serious about it. These are terrorist organizations. Calm as such and take the action to stop them. They are making billions of dollars.

They are human trafficking. So we'll heard how much of this is a diplomatic failure as opposed to a security failure at the border, and I think a lot of it. And I would even broaden that into saying a diplomatic failure of all when intelligence failure, um, you know, we it is hard to get from Guatemala City to del Rio Texas and people, you know, when when people are coming across the border and what people have to remember.

The two point five million people that came in the country legally last year, a lot of them in essence surrendered, you know, they came across the word legally trying to find someone from border patrol and surrendered themselves. Oftentimes they had a phone number of of someone who smuggled them. They had a license plate of a bus they were supposed to get on to transit through Central American in Mexico,

they had a meeting location and where to go. A lot of that information is being collected by border patrol. Our intelligence services need to be using that to work with partner countries in order to dismantle those those networks. See that sounds like a much more realistic or mightly more effective approach here. And I know that you were always known for having kind of a high tech view on this when it comes to border sex already. How do you layer that on on top of what we're

talking about here. I know that you were not a fan of the Wall, for instance, which is something that Speaker McCarthy was talking about. Your quote back then the wall was a third century solution to a twenty one century problem. So how do we employ better technology here? Yeah, and and it looks so we should be able to have what the official tip term is operational control of our border. We should know everything that's coming back and

forth across our border and guess what. Several mile by mile assessments of what kind of tool needs to go along that border has already been done. We know whether a physical barrier like like, a physical barrier makes sense when there is urban to urban contact, but in far West Texas, where it takes border patrol hours or days to respond to something at the border, a physical barrier is not going to stop anything. So you need technology that can detect the threat and monitor that threat until

someone is able to deploy. You need additional manpower for sure. So we know all of the different tools, and multiple administrations have done these mile by model assessments. Those mile by modele assessments have found out the same thing. So so this is an addition that we need, Like you know, everyone is to be a less expensive than building a

wall the length of the border. Correct, Yeah, it look it is, and and it's a fraction of the cost, you know, you know, we're talking about all these balloons, right that the Chinese surveillance balloon and potentially balloons plural. There's a number of drones that are coming across our border in the southern border, and that's bringing in drugs

and monitoring whether there's there's border patrol agents. We're also seeing um uh unmanned vehicles in the in the in the oceans um as well, and so so so we have to have an all of the above approach. And there's not one thing that's going to fix this problem. It's multiple things, and it starts at the source. It starts, you know, here in our country. Oh and by the way, it's a fraction on the cost to deal with these problems um you know, overseas and the arm before they

get through our border. And so so we need people, we need leaders and understand all these things that are more interested in solving the problem, that are going to work with people that to be honest, that don't like one another in order to have some common sense problems to what's really a crisis. The former Republican of Texas

congressman will hurt to really appreciate the time. Thanks for being with us as we assemble our panel here and their take on this whole matter and our conversation Rick Davis and Jeannie Chanzano Bloomberg Politics contributors Jenie are are we at the point here as Will hurt Is suggesting of needing to redefine asylum? You know, we very well

may need to be at that point. But the reality is, and I think he's absolutely right that the solutions are there, and the problem is, what we're getting is a lot of you know, politicking, certainly a lot of show voting. You know, you see, uh the Congress in the Republican side basically moving down to the southern border. They're planning to hold hearings for the next several months. But the reality is there are solutions in front of us that

take congressional implementation. And what we haven't heard from Kevin McCarthy is what the legislative agenda is going to be. He says he wants to hear from security people on the border. Yet, what about your legislative agenda? What do you want to do policy? What wise? Is the real question? And that's something we haven't heard from the GOP. We heard from a local rancher by the name of John Ladd who showed up at the border with Speaker McCarthy.

He was part of the group. They're talking to reporters. Interesting to get the I mean this, this is the real local view. Listen to what he said. I'm a fourth generation rancher down here. I haven't given up, but this is the best chance that we have to control the border. Uh. We talked about the Fenton all, we talked about the number of people that are coming to this country. But it's a national security threat and I think America understands it. But they better wake up and

get behind this group of congressmen coming from Washington. Rick Davis obviously he was brought there because he was agreeing with them and would say that in part. But tell our audience what us coastal elites don't get about that local view. You spent a lot of time in Arizona politics not far from where they were today. Yeah. No, I mean, with all due respect to John Light, I assume he was not talking about Hockeyen Jefferies as these congress he agreed with so much. Look, I mean, these

are these are real problems for local people. Right. There are a lot of ranches, a lot of farms. Um enormous amount of dairy is produced, you know, on the border between Mexico and Arizona, for instance, And and and you've got a lot of people just walking through these facilities. I mean, you know, it's a porest border. And that actually means that people just move right in and they move into these border towns, and they want to have

their kids go to school in those border towns. They want to get jobs in those border towns, and and it puts enormous pressure on him. But but with all due respect, I mean, it's it's it's that's not the problem, right, And I think that you know, what's what's really great about having someone like um uh, you know a conversation like this today is there are already solutions to these problems. Right, this has been picked apart a hundred times and it's

a combination of existing law and policies. We know, we we know we have to fix the dreamer's problem. The dreamers are now adults. I mean, like that should be the easiest thing in the world to do. Uh. We know we need workers. Uh. John ladd on his farm needs workers for that farm. And where do you think he gets them? You know, and uh so these are these are all solutions, with all due respect to the

Republicans and the Democrats going down the border. Uh, this is not the first generation to look at this crisis, and they ought to just get together and they can do it together at the border and come up with a plan and bring it back to Washington. But uh, it really is one of those issues that is not that hard to solve, vexing political problems. And and yet I think the politics is is so good for both parties that they don't want to actually take the time

and effort to fix it. Are these trips anything more than photo ops? Jennie Speaker McCarthy says, he's you know, he's on a listening tour essentially, what's Hockeen Jeffreys doing there? The Democrats were accusing Republicans of photo ops. Yeah, they're accusing of Republicans of photo ops. They themselves are down there to show they are not seating the border to the Republicans and of course down there to make the

case that they too want to own this issue. To Rick's point, it's a political win for both sides and until they get beyond that, they're not going to come to the solution. But we know what the solution is. You're listening to The Bloomberg Sound on podcast. Catch the program live weekdays at five pm Easter on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa playing

Bloomberg eleven. The President Biden's about to head overseas. It's Monday. He makes the trip to Poland. He'll be there Monday for two days. We'll meet with the Polish president there, and we heard a bit about it, a little bit of insight from Press Secretary Karine Jean Pierre on the purpose of the trip, remembering we're just a week out here now from the anniversary the first anniversary of the war in Ukraine. Here she is, look, this is going

to be the one year. He's going there ahead of the one year anniversary and sending a strong message of solidarity and UH and the President understanding to reaffirm right our support for the Ukrainian people as they're fighting back against the brutal war that Russia started almost a year ago. Also plans to meet with leaders of the so called Bucharest Nine group of Eastern Flank NATO allies that have a lot of skin in the game. Right now is we reassemble our panel with some thoughts on this, Rick

Davis and Jeannie Chanzino. It's an important trip, Rick, Uh. The President will be in Poland. There's been some talk of him maybe even creeping over the border, but certainly the White Houses has no plans to announce anything like that. Now, how important is the journey. He's the only Western leader that has not actually been to Ukraine since this war started. Sure, and obviously security matters are the deepest requirement in that construct. So they're going to be careful as to what they

do with the president. And and I don't think anyway doubts his his resolve on this issue. UH. It's a great lead up this week with the Munich Security Conference happening in Germany where leaders from all around the world were there to discuss primarily Ukraine UH and sixties senators from the United States went. There's no lack of UH support and commitment UH in the U s Government to UH to Ukraine. UH. And what is really interesting is Vladimir Putin who has attended this event in the past,

actually was disinvited. UH. So this is a great lead up to the anniversary of the invasion UH and I suspect that the President and his team will use it to leverage continuing UH commitments from Europe and other allies around the world UH and put increasing pressure on on on Vladimir Putin. He's got a few audiences on this trip, Genie, what is the most important one in Europe? Yeah, you know, I think it is, But I also think the American public is equally important. You look at the latest AP

and r C poll on this. Americans still support Ukraine, but there is signs of waning there. It's not as strong as it was a year ago. And so he needs to continually make the case that he has been making. And we'll hear Kamala Harris make it in Munich that we stand with Ukraine and this is a moral and just war and that there is no question about what

we should be doing. And of course Zelenski is going to keep asking for more money and more support, as he should, and the question is going to be how much can we how much can we support and for how long? Because you are hearing drop off on both the right and the far left. You know, questions about budget, questions about balancing budget debt, all of those things come

into play here. So while I think Europe is critically important, of course, there is also the public both in the United States States and in Europe who we need to appeal to. And let's not forget look over in Africa. Look at what Russia and China South Africa are doing just this week in terms of the these you know tests that they're running. You know, there is a worldwide audience here that has to get behind Ukraine to make it through this next really important spring. What are the

optics uh for this trip? Rick, It's it's gonna be a more casual Uh. Look, you have him go to a refugee camp at the border if if those are even still there. You have him mingling with locals. What's the what's the White House Communications Office cooking up for this? Yeah? I I get the impression, and it's going to be more like a working visit. Uh and uh And yet I would expect some kind of a central uh speech U themed around the anniversary and in the global resolve.

Uh and and I think it will be broadcast through the world. Right, this is an important moment, uh, both because of the anniversary, but also it just happens to be an important moment on the ground in Ukraine, UH, in the fighting, and so I think that he'll get

a lot of attention. But I agree with Jennie. I think he needs to come back from that trip and address the country because there is slippage in the polling around support for the Ukraine and in the Ukrainians in Munich right now are saying, hey, guys, shore up your base, make sure that the American public are behind you, because we need this to go the long haul. Uh. We got plenty of resources. They've only spent a fraction of the forty billion that have been allocated for the Ukrainians.

So it's not so much an economic issue. It's going to be an issue around can we can we stay in the fight as long as Vladimir Putin and and further than Vladimir Putin thinks will stay in the fight. Hearing General Mark Milley describe it, and he held a news conference earlier in the week ahead of the Munich conference with press with the Defense Secretary Lloyd Austin. I should say and he talked about the fight in the dun Boss specifically and what he was seeing on the battlefield.

Listen to General Mark Millie. Most of the uh dynamic movement back and forth is in generally in the vicinity of back moot. Uh. The Ukrainians are holding, uh, they're fighting the defense. The Russians, primarily the Wagner group, are attacking. But there's a what what I would describe it as as a really a very significant grinding battle of attrition with very high casualties, especially on the Russian side. Um. There there's no fancy arts of maneuver going on here.

This is frontal attacks, wave attacks, lots of artillery with extremely high levels of casualties in that particular area. It sounds brutal rick and and no end in sight. I mean, you're talking about shoring up support now. General Millie is making it sound like we're gonna be talking about this year from now. Well very well could Uh. That's certainly uh. The situation on the ground right now, there's no there's

no real movement um uh. And I think the point he's making about the fact that, you know, bach Mood has become such a meat grinder. Um. I heard reporting today that eight hundred to a thousand Russian troops are dying every day in that battle. Uh. It's just beyond my comprehension as to how long that is sustainable on a frontal assault, day after day. Um. But at the end of the day, UM, I think everyone has to

be committed to a long haul. UH. If that then means that that could generate a discussion around a a withdrawal troops in a in a peace agreement with Russia, great, But they're not gonna withdraw if they think we're in the process of of of minimizing our commitment. So Jeannie, zoom out the lens here and and look at this politically in a presidential campaign cycle, the war in Ukraine, funding for the war in Ukraine, or how you stand on this could really be one of the biggest issues

in the presidential debate. It certainly can. But I think the reality is that if you know, when we go you know, forty years from now and we look back, this will be the most important, if not one of the most important moments of Joe Biden's UH presidency is what he has done to shore up support for Ukraine. We go back a year how many people would have believed that Ukraine would be standing as strong as it is. That has a lot to do with the United States

Joe Biden's leadership on this. Even people like Lindsay Graham have given him props for that, So I think that that is really important. The reality is this is a fight between rules based international order and autocracy, and he's got to keep making making this case. This is not just about someplace far away that we haven't been, but it is about who we are and we need to

keep fighting for them. And for that reason, it's gonna play in four But he had he's on the right side of history here, but he's got to keep making the case. Donald Trump is gonna be on the other side of this issue right. Right by the time there's any kind of a real back and forth, Trump's gonna be saying, bring the money back home. Right, let's stop this war with Russia. I could, I could have ended this. It would never have happened if I was president. We're

wasting our money. Yeah. As we get into the presidential cycle, it will be interesting to see what kind of backbone these Republicans and Democrat candidates who are running have. Uh, you know when our campaign in two thousand eight was in the duldrums, uh last place, John McCain came up with a brilliant idea of sort of campaigning on pushing the surge and I rack very unpopular thing, but it

won't even the nomination. So are there are They're brave people running for president who are willing, especially when it looks bad, to stick their neck out and say no, we're staying at distance. We're gonna double down on this commitment. We're going to back them up for all the reasons that Jennie just said, Because this is a real, you know,

epic battle of good versus evil. You know, from what we understand Jennie, that Ukraine money has Rick pointed out, Uh, not a lot of it is and spent but won't likely last the year. Is that going to collide with the budget debate that surrounds the debt ceiling as well? It's certainly going to come up. And I think the case that the President has to make, and he has to use his supporters from Mitch McConnell to Lindsay Graham and other Republicans to make the case it all hasn't

been spent. We can do this. This is not an issue of money for us. And in terms of the campaign, this is why I'm going to be watching Monday, as I know everybody else will be. Does he go over there? Because that would be great video for the campaign. It would also help shore up public support. Otherwise we may see Zelensky, may see Zelynsky go to Poland, because you know, all the cool kids have gone over and so Biden

is the last, including our first lady. So Biden is the last, and I think we may see him go for that reason. If it's safe. You wonder, maybe not Keith, but maybe it is give into the GIV or somewhere kind of nearby. We'll see how that goes. You're listening to Bloomberg Sound On with Joe Matthew on Bloomberg Radio.

We've had a running conversation here in Washington about regulating crypto for months, what years now, and nothing has really, of course come to fruition, even doubts about whether lawmakers know what they're talking about. All the while the chair of the SEC has been cracking down on his own and creating some controversy along the way. Nathan Dean at Bloomberg Intelligence dares to use two words in his crypto policy watch out today, regulatory clarity, and he's with us

now to talk about it. The senior government analyst at Bloomberg Intelligence, Nathan Dean, welcome back, Thanks for having me. It's a pleasure to be here. So you're actually putting odds on crypto regulations happening this year in Congress, and they're actually not great, are they now? I mean, if you think about what the industry wants, and it's really like you, like I said before, regulatory clarity. You know, there's been a lot of proposals that came out of

the tail in two. There's going to be more proposals that are coming out this year. But even in the light of f t X and this current SEC crackdown, I mean even uh, just recently, the SEC came out and said that they've come to an agreement with former NBA player Paul Purse over his his crypto uh disclosures and so forth. Like I think he's gonna pay some like just north of a million dollars and penalties for

that um. But even with all that happening going on, and everybody's agreeing that we should do something or at least most people agreeing we should do something. There's just not general consensus on what that is. And so our take is is that you're gonna see a lot of proposals come up from the beginning of this year, a lot of debate. Key proposals to watch will probably come from the Senate Banking Committee, the Senate ad Committee. How

friendly they are to crypto still to be determined. But we're we're putting in about chance of passage this year because we're just not, uh, we're not feeling that Congress actually knows exactly what they want to do. Forty percent chance. This is why I love the analysis that comes out

of b I Bloomberg Intelligence. Uh, the SEC important that you mentioned this, And by the way, I'm looking at their announcement here charging NBA Hall of Famer Paul Pierce for unlawfully touting and making misleading statements about crypto security. My god, there's gonna be a lot of celebrities and athletes here looking their wounds, uh, for for what they got into in crypto. Just ask Tom Brady, right, yeah, exactly.

I mean, we saw Kim Kardashian, We've seen a couple of other celebrities over the years, and this is just all as part of one strategy that's going on over at the SEC. And my colleague Elliott Stein put out a note this morning highlighting all the actions that the SEC has done. I mean, if you think about the SEC has going after Ripple, the SEC is currently just this week, is going after Terraform the uh. You know, there was a settlement with Kracking for thirty million dollars.

And really this goes back to what Sherman Ginsler has been saying for the last year and a half. And he's what he's been saying is coming and register and coming and talk to us, because if on in in the SEC's mind, crypto tokens outside of bitcoin, Bitcoin is a commodity, it's deemed by the courts as a commodity, but pretty much everything else is a security. And therefore nineties era securities law still applies. If you talk to the industry, they'll say, we have a new digital asset class.

This is brand new regulations from you know, ninety years ago, just don't apply to us. And because neither side is actual acquiesced to the other, the SEC is bringing forth these cases and ultimately for the industry. They're gonna get clarity one of two ways. It's either going to come from Congress and we just said chance there, or it's gonna come from the courts. And our take is is that the courts actually may be looking favorably at the SEC and a lot of this. How about that? Okay,

Well you mentioned the crack and settlement. Every time Gary Gensler announces something like this, Nathan, the crypto community cries for that again, regulatory clarity. How how could legislation change that? If it's not this year, it's going to be eventually. Yeah. So there's really two mean pieces here, and you have the stable coin piece and then you have everything else.

And I'll start with stable coin here because even though we think that there's a chance of passage this year, we are more favorable on a stable coin specific piece of legislation. We're putting around a chance on that. And what this would probably entail, uh, this is actually probably coming from the House Financial Services Committee, is you're going to have a bill that would require stable coins to

be backed by a percent and high quality liquid assets. Uh. It would give bank issuers the ability to register with the Federal Reserve and go under Federal Reserve oversight. The hold up is on non bank issuers, so like paxos and so forth like that. Uh, you know, the current thinking is is that non bank issuers could potentially eventually regular or register with state regulators. But even just recently the SEC has put out statements sort of questioning whether

state regulators are there. So the stable thing stable coin piece, we think it happened this year for everything else. You know, some of the provisions you're looking for is what is a commodity versus a security. If you get a commodity status like bitcoin and the CFTC ultimately gets authority over spot markets, that's a lot less regulation in my view

than if you're dealing with the SEC. But anything that's gonna pass the crypto industry is going to remain under the jurisdiction of the SEC, and more likely than not, it's going to be very stringent on regulatory requirements in terms of customer protections, custodial governance, anti money laundering. Know your customer disclosures, which cost money. It's the cost of the industry may want to you know, some of the industry will absolutely want this, but for those that are

favoring a decentralized market. That's not exactly what they want. It's not at all. And it costs a lot of money to talk to the SEC, doesn't it, Nathan, Yeah, exactly. I mean it just in this is just ballpark figures. But you know when Chairman Gendler says, come in and talk to us, Well, if you're going to approach the SEC,

you need external legal counsel, and that costs money. I mean, we've heard we've heard folks say that they've spent somewhere a hundred thousand dollars to two fifty dollars just for one meeting. And if you and I decide to go to our garage and create a new crypto platform, they that's not money that we really want to spend at the moment. So it's not as easy as it sounds.

And you know what we see a lot of times in regulations is that when you have this type of industry altering regulation come out, it's usually the folks that are either have the cryptos, the technology, spend, the legal spend, the risk spend high backers. They usually gain market share as the mom and pop suffer. This is incredible insight you're suggesting that if I'm if I'm reading you right,

or maybe we can advance this a little bit. If you're a start up crypto firm, it's probably it's cheaper for you to run the risk of being fine than to actually interface with the SEC. Well, you know, a lot of the bloom In fact, Bloomberg News just reported today that you know, Bonance is thinking about just you know, essentially segregating itself from the United States. We've heard a lot of this from the crypt the community of why

should he even play in the United States. You know, there's this idea here is that the U S regulation is not going to change at least until let's say that the presidential election. If you get a Republican president, then maybe it would, but that's two years and for a lot of these firms, that's not that's two years day I want don't want to spend. So there's more of a momentum I think for crypto firms to move outside in the United States. The European Union has a

more favorable regulatory framework. The United Kingdom just put out a Treasury in the United Kingdom just put out a consultation that's more favorable du Bui, Hong Kong. So there's this idea out here is just, you know what, we're gonna take our toys and go play somewhere else that's set back to the US. And that's the great concern that pro crypto lawmakers have here, right, is that we blow our chance to regulate a nascent industry here or currency or whatever you want to call it, and you

just let the whole thing go off shore. Yeah, exactly. And there's a lot of there's a lot of policymakers that would just say, you know what, it's better to just let it go. You know, this is something that the crypto industry struggles with because you know, for those of us who work in crypto, we think it's a very big deal. But when you took it, when you look at the total market cap for crypto, you're just south of a billion or sorry, a trillion dollars. You know,

the New York Stock Exchange. The last time I saw it was like twenty nine trillion dollars. And so for all the attention it gets, it's scrypto is also just a second tier issue when you talk about things like inflation and China and stimulus and economics and so forth like that. And this is where I think the absence of you know, Sam Bank ben Free is going to

be felt, is uh. You know, he was very much a proponent of trying to get this regulation in front of policymakers and keep it at the high part of their priority lists. Certainly, we've seen coin based try this, We've seen the Trade Association to continue to try this. But somebody's gonna have to keep that issue at the forefront of this year or else it's just going to

get lost amongst a lot of other priorities. He's the senior government analyst at Bloomberg Intelligence with us here in our washing In Studios Nathan Dean find his column on the Terminal the b I Policy Watch us Crypto Framework Outlook. Nathan, thanks so much as ever for the insights today. Thanks for having me with the real player. Let's reassemble the panel for their take on at Bloomberg Politics contributors Jeanie Schanzano and Rick Davis, Genie Odds Bloomberg Intelligence cuts through

the muck here. Forget all the talk. They don't see it happening. I suspect you agree. I do. I love the percentage. Thank you Bloomberg Intelligence. I that that's the best And you know what you said towards the end is absolutely right. I mean, we heard the same thing from Tim Scott, who's the ranking member on the committee. He said, part of the problem is not just that the guidance has been unclear, but the lack of clarity is driving them out of the outside of the United States.

And so this is certainly a concern. And there are so many competing proposals and ideas out there, and quite frankly, the one that had the bipartisan support, that had some momentum last year was written by Bankman Freed, and of course that now has gone by the wayside, and so you know, we are left in this sort of no man's land. And I think that they are absolutely right when they say the chances right now look really dim.

It's a recurring message from the industry though, when we've had this talk and just the last week here with Harvey Pitt on this program, Rick Davis, the the industry is crying out for some rules of the road. Here all the while, uh, the SEC is kind of picking its battles and creating a lot of confusion. But it looks like that doesn't end anytime soon. Yeah. I was really surprised when Gary Gensler was picked to run the SEC.

I thought he'd be the leader of this right and and his Genny pointed out Tim Scott's been looking for guidance from Kinsler, shared Brown, the chairman of committee has been looking for guys from Gensler. And you know, pakasta, a hundred fifty thars have a meeting with you. That's a racket. How do I get into that? Um? But um, But at the end of the day, I do think.

I mean, like the only thing I would I would say, might sir vibe And it's not really regulatory, but uh, there is a lot of impetus for consumer protection around uh crypto in Washington, D C. And And so I I could see a consumer protection bill where members could go out and say, Okay, you know we've we've put up disclosure regulations, we put up you know, UH save harbors for for consumers to be able to play in this uh and and and yet not actually address the

big big issues of you know, whether or not these tokens are security or commodity, or whether or not they ought to be regulated as Nathan Dean has discussed, so so there may be some action. They're enormous pressure on this um and I would say to one thing that is a problem for Congress is this is a new industry. Uh. Wall Street's done a better job of sort of getting ahead of it and understanding it, uh than government hallways

in Capitol Hill or in the Treasury Department. Uh. It's hard to find experts on the Hill who can talk to members intelligently about, you know, what the impact of these various crypto opportunities are. And so that's one of the reason why you don't have a lot of action right now is because there's just no not the infrastructure that you would normally have. It's fascinating. Rick just outlined two great job opportunities for your up and coming students. Genie,

I hope that you're listening and taking notes here. The fact of the matter is a lot of the students in your class probably no more than we do about this, But if this does go off shore, they'll be on their VPNs buying uh, you know, coins or that we've never heard of through exchanges based in other countries. If they want to. It's it's it's a much different game than than traditional banking regulation. It is. I was taking notes on what Rick said. Forget the students, I'll get

that job that Rick's talking about. And you know VP what Joe mad No, I know what then is. But you know, listen, you know cryptocurrency. It was a libertarian revolution against government control of money. So in some ways it's not surprising where we are, and in other ways it's maddening, especially considering considering what work was just talking about the consumer issues at asked, which we all just lived through with FTX, And absolutely students understand this well.

I asked my sons to explain it to me constantly. Um, you know, they try and I shake my head, but you know, it is something that Congress, to Rick's point, has simply not been adept at regulating and talking about an understanding, you know. And of course that means they rely on insiders like Sam Bankman freedom. To me, that is always a concern. Yeah again, you saw how well that worked out. Rick Davis and Jennie Chanzano our signature panel for the rest of the hour. Here is it

possible the US just shot down a hobby balloon? Recall President Biden's remarks from yesterday. As we discussed, we still do not know exactly what the second, third, or fourth objects were that the US shot down. Listen, we don't yet know exactly what these three objects were, but nothing, nothing right now suggests they were related to Chinese spy balloon program or that there were surveillance vehicles from other

any other country. Intelligence community's current assessment is that these three objects were most likely balloons tied to private companies, recreation or research institutions studying weather or conducting other scientific research. Enter the Northern Illinois Bottle Cap Balloon Brigade, known as the n I b b B, which declared one of its balloons missing in action on February fift Aviation Week got the story rolling on this has been picked up everywhere.

The club's silver coated party style Pico balloon reported its last position on February at thirty eight thousand, nine ten feet off the west coast of Alaska, and a popular forecasting tool projected that the cylindricy shaped objects, of course one was described as such already by the government, would be floating high over the central part of the Yukon Territory ding on February Aviation Week reports and reminds us that is the same day in f twenty two shot

one down of cilinar description in that same in general area. And apparently the man that talked to you about this is Ron Meadows, the founder of Scientific Balloon Solutions, which is a company based in Silicon Valley that makes these purpose built pico balloons. I'm talking about for hobbyists, for educators, for scientists, exactly like President Biden said, I think even in the same order yesterday, Ron, I really appreciate your being with us here. Uh did they just shoot down

one of your balloons? Well, it's hard to say without seeing a picture, but the description of a cylindrical object is the shape of the balloons that we produce, typically the party balloons. UM. So there's two types of balloons that, um, the industry can fly. When I say industry, I mean HAM radio operators, people do in science, UM STEM education schools. UM. They can fly just an expensive party balloom that they can go by at a store. Typically they don't fly

as high and they typically are around UM. The one that was shot down UM near Michigan. Yeah, that one was probably a party ballooon. When they talked about the long wires hanging down underneath. Its probably twenty UM. They call it whispered WSPR. It's like short wave communications, long distance communication, and UM it fit that description of that group's balloon. So this is news to all of us. Run you're an expert. When you heard these reports, your

your own antenna went up. I'm guessing you had an idea what this was. Yes, yes, I had a real good idea. UM. The description of the cylindrical object is like our SPS thirteen that we build scientific balloon solutions, and we primarily build that for the education STEM community. UM. They buy these bloons, they put a small tracking system on them that is basically the size of a popsicle stick that weighs between ten and twenty grams. There's two

types of communications. One is called a p RS that carries about a nineteen inch antenna, and the other one is WHISPER and that's about a twenty ft long antenna. UM. The radar signature of these are minimal and none. Although I'm not an expert in that field, the long antenna for WHISPER may be picked up easier than UM the direct line of site communications type tracking system. But you have to keep in mind that these are UM ten to twenty gram tracking systems and we are f A

A exempt for launching them in the United States. Do they get lost pretty often? Typically they're never recovered. Every once in a while one will be really a big deal though, right because they I'm reading that they cost as little as twelve dollars each. Is that true? Um? Yeah, a party balloom does the ones we sell or in the hundred and fifty dollar range for education. So that's the that's like the sweet package. But the idea here is we we spent thousand dollar missile potentially to shoot

down a twelve dollar balloon. Yeah, and really all they had the jet had to do is to fly close to that balloon and it would have taken it out with You're ever going to know? Can we prove whether this is what you think it is? Uh? I haven't had the opportunity to see pictures. Do you add you reached out to the Pentagon? I read? Is that true? UM?

I tried calling d D, Homeland Security, UM, the Air Force, multiple UM, multiple calls local left B. I didn't seem to have any interest that the National FBI did take my report, but I haven't heard anything back. I was trying to let them know that these things have been flying the technology that we developed, because I believe we're the only company in the world that designs and bills and sells small super pressure balloons to the amateur and

stem education community. UM. It's it's something that we've been flying since two thousand fifteen. UM and a lot of UM universities, middle schools. In fact, we have one middle school was the first middle school to fly around the world. You're not going to tell me that some students lost that their balloon shotdown, are you. It's very possible. Ron. I appreciate your coming in to talk to us. We

learned a lot of Uran Meadows. His company is Scientific Balloon Solutions, the Silicon Valley based company that makes these balloons that we may well have shot down, trading in f twenty two mission and thousand dollars sidewinder missile for a twelve dollar balloon. Genie Schanzano and Rick Davis are

with us. Is this really how this story is gonna end? Rick? Yeah? Sure, I think this was the most entertaining part of the aerial objects debate this week that I've heard has answered more questions than the President United States could give us. So I think giving time to uh to Ron was a worthy task here. He knew exactly what it was when he heard the descriptions coming out of the Pentagon Genie.

I mean, we we think we we have figured this out, right. Yeah, Although I have mixed feelings about this, Joe, I'm very happy for Ron, and you know that he feels like he's identified it because on the one hand, yeah, we've were all waiting to see who owns this thing, because you shoot something down three times, clearly somebody owns these things.

But the reality is I thought maybe they were extraterrestrials, and as we know, I was waiting for us all to be visited on sound on and so it's a little sad for me that that's not going to happen. It would explain though, Rick. I mean, if, as we were talking yesterday, if these things are really lost, what kind of records are you going to have left from something from this twelve dollar balloon that weighs ounces? Yeah, no, wonder they can't find anything exactly it vanished. I mean,

as he said, the thing and it's gonna POPU. Look, this falls into the category in Washington, where if it's not true, it ought to be. I like that that's got to be the name of your of your book. That that's fantastic. But Ron, you know, I hope Ron Meadows understands that he's beaming at fifty thousand watts here across the Potomac from our transmitter in Washington to the Pentagon. Are you surprised, Jennie that he did not get a call back or are they still listening to that message

laughing about it. No, I think they're listening to sound don They're going to get roun right on the phone right now and they're going to clarify this. You know, I wish Ron had talked to Joe Biden before we all know idea. It wasn't a fan of that press conference yesterday. You know, if he had talked, we could have gotten more clarity on this. So, you know, maybe they will get back to Ron. I'm waiting to see

because I'm still a little unclear. Doesn't run is Ron saying he owns all three or just one and there's two other people out there. That's a great question that we only know of the one that was declared missing in action. By the Bottled Cap Balloon Brigade, but all jokeing a scythe here, Rick. This kind of like the guy the Pentagon we want to talk to, right, he runs the only company that makes balloons like this. It would be pretty interesting of a black Hawk helicopter lands

in his backyard. And where are these guys? Where's Harry Stamper, you know, like, hey, where Ron? We wanted dusr Meadows come with us? Yes, exactly. So look, I mean, Jeannie's still hoping that one of the other three were as her alien balloon. Um and uh, and I hope she's right. I'd hate her for her disappointed that, you know, she's

not going to have an alien encounter anytime. So I suppose the odds the odds with you still at this point, Genie, Um, is the trip next week gonna draw the attention away from the balloon gate debate here or whatever we're calling it at this point? Like is it done this week? In the news cyclo? Gene. I'm not if I can help it, Joe Matthew, but I think it might. I think trying hard to bury this thing on this program

right now. Yeah, we like this one a lot, but you know, I think Anthony B. Lincoln may meet with his counterpart at the Munich conference. That may sort of tamp things down a bit, But who knows. Over the weekend. You never know. They shoot, something melts down. We could be right back at this on Tuesday. That's true. It was a daily occurrence for a minute, wasn't it. Yes, the Fifth Dimension. Come on, let's do it right, Rick Davis, Genie Chanzano have a long weekend. I hope you do too.

I'm gonna try and I'll meet you back here Tuesday on the fastest hour in politics. I'm Joe, Matthew and Washington. Subscribe to the podcast go to Apple, Spotify, or wherever you find them. Search for sound on This is Bloomberg.