Bloomberg Businessweek Weekend - August 28th, 2026

0:00Carol Massar:Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

0:42This is Matt Rogers from Las Culture East. That's with Matt Rogers and Bowen Yang. This is Bowen Yang from Las Culture East. That's with Matt Rogers and Bowen Yang. You know when people try on new food and suddenly it's like, wait. That's the reaction a lot of people are having when they first try Kewpie mayo. It's the one with the red cap and the little baby on the bottle. You've probably seen it in the grocery store before. And if you've ever just walked past it, some people would say that's a huge mistake. Because this mayo is different. Most mayonnaise uses whole eggs. Kewpie only uses egg yolks, which gives it this rich umami flavor.

1:15It's smoother, deeper, and almost buttery. Once people try it, they start putting it on everything. Egg sandwiches, fries, burgers. Some fans even swear by dipping pizza crust in it. And once you notice it, you start seeing it everywhere. Chefs use it. Restaurants use it. People who really care about flavor use it. Never tried it? Grab the bottle with the red cap next time you're at the store. Put it on just about anything. Then you'll understand. QP, the original Japanese mayonnaise.

1:41Carol Massar:If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play, so you can lock your phone, and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies, terms apply, cancel anytime. time.

2:13Bloomberg Audio Studios.

2:15Carol Massar:Podcasts. Radio. News. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. Hi, everyone. Welcome to the weekend edition of Bloomberg Business Week. I'm Tim Stenevek. Carol is off this week. This past week, Treasury Secretary Scott Besson declared a, quote, economic D-Day against Iran. The U.S.-Canada trade fight escalated and the Kansas City Fed's annual gathering in Jackson Hole put monetary policy front and center yet again.

3:02And then,

3:03Carol Massar:And of course, earnings from the world's most valuable company, NVIDIA. The chipmaker announcing guidance, expecting revenue to grow as much as 70 % in the next fiscal year. For the latest on all that and more, head on over to the Bloomberg Terminal or to Bloomberg.com. Coming up this hour, we're going to examine how the Trump administration is reshaping market fundamentals. Why Stanley Druckenmiller is calling Treasury Secretary Scott Besson's bond buying a mistake. Plus, how the Trump family is fast-tracking a national bank charter for crypto-related financials. All that to come, but we begin with a rare public rebuke from one of Wall Street's most influential investors.

3:39Carol Massar:Treasury Secretary Scott Bessent has recently pledged to increase the Treasury's purchases of long-dated bonds. We are going to continue with our regular program of auctions. So you will be hearing from us again at the beginning of next quarter. We haven't bought a single bond yet. The next time we have an operation is September 9th. So we will see on September 9th. However, billionaire investor Stanley Druckenmiller is now warning his former protege against trying to push down long-term yields. In a recent Wall Street Journal opinion column, Druckenmiller argued that policymakers should let the bond market do its job.

4:18Carol Massar:For more, Nora Melinda and I turned to Eric Schatzker, editorial director for Bloomberg New Economy. He explained the history behind that warning and the risks that Druckenmiller sees in Bessett's bond strategy. First of all, the journal is the place that Stan Druckenmiller typically goes if he wants to make a public statement. So that part of it is not unusual, but he does not do this very often. So pay attention when he does. And why do we pay attention to Stan Druckenmiller? Because few people would argue that he is the best investor in modern history. Never a down year when he was running Duquesne Capital Management.

4:53Carol Massar:He was George Soros' chief investment officer. He hired Scott Besant in 1991. He sent Scott Besant to England. It was on the basis of information, partly on the basis of information that Scott Besant was providing, working for Soros Fund Management in the early 1990s, that Druckenmiller and Soros decided to bet against the British pound. They shorted it and broke the Bank of England. And it is that fundamental truth that governments defending prices against fundamentals always lose that was proven there and which Druckenmiller argues will once again be proven here. So take us to today and well, actually to last week.

5:38Carol Massar:because we do need for the benefit of many to review what sparked right this disagreement yeah at least or this right post from from stan drunken miller which by the way you cannot not look at as anything but a harsh scolding right the mentor publicly admonishing his protege. And it would also add, for those who haven't read it, go and read it. If you're lucky enough to have a Bloomberg terminal, it's simple. NH space WSJ, put in Druckenmiller as a keyword, it'll come up. You can, of course, read it in the Wall Street Journal. You will look long and hard to find a piece of writing this savage and this devastating.

6:27Carol Massar:I mean that. So last week, the Treasury announces that it is going to double the size of its long-term bond buyback program from$2 billion to$4 billion. And then Besant doubles down effectively and says, well, we might spend more than$4 billion. And Druckenmiller says$4 billion understates the gravity of this mistake. And I have, for my own purposes, broken it down into four component parts. This is how Druckenmiller dismantles the argument behind a long-term bond buyback program. Number one, it's unwarranted. There is no crisis. Yes, yields are rising, but that is the market functioning the way it is supposed to function, right?

7:16Carol Massar:Pricing in the growing risk of two things, one, inflation or more inflation. We have some already, obviously. And two, the growing possibility of a U.S. government default. This is what the bond market does. It is not March of 2020. This is not the 2022 crisis in UK gilts, right, that cost Liz Truss her job as prime minister. There were, as Druckenmiller points out, no failed auctions, no dealer balance sheet seizure, no forced unwinds. Number two, it's hypocritical. Who was more critical of quantitative easing? maybe some people, but few more vocal and more aggressively so than Scott Besant. And Druckenviller points out that this is effectively a version of QE.

8:03Carol Massar:And so what you have, what the other thing he hated about QE was that, Besant that is, he made the case that it was a blurring of the lines between fiscal policy and monetary policy. And here you have the Treasury Department, the Treasury Secretary, usurping the authority of the Fed chairman. Number three, going back to this idea of fundamentals, it violates one of the cardinal laws of the financial universe, right? Governments will always lose when they try to fight fundamentals. Again, I mentioned that this is exactly what Druckenmiller and George Soros proved when they bet against the Bank of England.

8:43Carol Massar:And as Druckenmiller says, this is another useful quote to draw from this essay. once markets believe treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests. Well, that raises an inevitable question. If it's a fight, effectively, between the policymaker and the market, how much ammunition does the policymaker have? Not enough ammunition to defeat the market. Well, it raises the question, and the journal piece doesn't go into this, but it raises the question about why the Treasury Secretary would do such a thing right now.

9:26Carol Massar:You describe it essentially as out of character given his past comments, and I think it's fair to say given his hedge fund history as well. Why do something like this? Well, the most obvious answer to that question is that it's becoming awfully expensive for the federal government to issue long-term debt. The federal government needs to finance its deficit and its debt, and doing so means issuing treasury bonds. Well, issuing treasury bonds when your yield is at 470 is a whole lot more expensive, a whole lot more costly to the government and ultimately to the U.S. taxpayer than it was when yields were at 370.

10:06We could do the math, but it's the...

10:11Carol Massar:Let me just put it in Druckenmiller's words. The real problem is the fact that the government is running an outsized deficit. In fact, the real... So the nominal rate of growth is actually higher than the yield on the 10-year treasury. And he says that that historically is an accommodative circumstance. If anything, the market should be pricing yields higher because it fuels, you know, that financial accommodation or economic accommodation fuels inflation. And the reason this is the most read story on the Bloomberg and the reason that this is transfixing Wall Street is because of the implications.

10:55Carol Massar:And this is the fourth reason that Druckenmiller cites, or at least my interpretation of his reasons. is that it's hazardous, right? The long-term treasury yield, as Stan says, is the most important price in the world. And furthermore, it is underpinned by central bank independence, the independence that was enshrined in the 1951 Treasury Fed Act. It is the bedrock of global financial markets. And Stan says again in this piece, U.S. policymakers built the wall between debt management and price management for a reason. This intervention, he is specifically referring to the buyback program, this intervention starts dissolving it.

11:42Carol Massar:So it's not just like we need to think about this in something other than just the short-term dynamics of the bond market. Whether Scott Besson will or will not win in his effort to bring down long-term yields. There are much bigger questions and much bigger implications at issue. Well, when you think about Bessent and you think about Washington, do you think that Washington is remotely prepared for the economic and the political pain that would come with potentially allowing the bond market to set the price at the long end? You know the answer to that question. No, of course, because it probably means it means cutting spending, right?

12:21Carol Massar:He makes the point in the piece that neither party does it. Right. Yes, exactly. Both Republicans and Democrats are guilty of this. Everybody has been kicking the can down the road. But now with bond yields where they are, interest payments exceed the amount of defense spending. And defense spending vastly exceeds the amount of discretionary spending. So where can you cut? The only place arguably, and I'm certainly not advocating for anything one way or the other, but the only place arguably to cut, says Druckenmeller, is entitlements, entitlement reform. Nobody wants to undertake entitlement reform because it's so politically perilous.

13:00Carol Massar:Yet where else do you cut if you need to reduce the deficit and restore fundamentals to a point where people have confidence in yields and aren't gently, or maybe in some cases not so gently, driving them higher? Or, and I'm going to say something crazy, Eric, maybe increase revenues. Well, that's another way of doing it. But of course, it's restoring fiscal balance to the equation. But there's no doubt here that and Stan has been consistent on this for years and years and years that he would prefer that the balance be restored by a spending cut. Once upon a time, you had options. Now, effectively, there are no options other than entitlement.

13:43Carol Massar:I want to make sure people go back and read the cover story for Business Week that you did on the Treasury Secretary a year ago. and reread it if you haven't read it in a year. But given your experience reporting that out, were you surprised to see this move from Treasury last week? And given your understanding of Scott Besson's investing history, who he worked with. I, and I'm reluctant to opine because opining sounds like editorializing and that's the last thing in the world that I'd like to be accused of. that he wanted to be an unconventional treasury secretary was to me self-evident. And thus, some of the announcements that he's made and some of the things that he has done are consistent with being an unconventional treasury secretary.

14:38Carol Massar:He was almost in a unique position coming from his background as a hedge fund manager and becoming a policymaker the way that he did, there's very little precedent for that. Coming up, a look at how President Trump's family is on the verge of having its very own bank. You're listening to the weekend edition of Bloomberg Businessweek. This is Bloomberg.

15:01Carol Massar:Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com by selecting work mode.

15:41Carol Massar:Available on plus and pro plans. This is Matt Rogers from Las Culture East. That's with Matt Rogers and Bowen Yang. This is Bowen Yang from Las Culture East. That's with Matt Rogers and Bowen Yang. You know when people try a new food and suddenly it's like, wait, that's the reaction a lot of people are having when they first try Kewpie mayo. It's the one with the red cap and the little baby on the bottle. You've probably seen it in the grocery store before. And if you've ever just walked past it, some people would say that's a huge mistake. Because this mayo is different. Most mayonnaise uses whole eggs.

16:13Kewpie only uses egg yolks, which gives it this rich umami flavor. It's smoother, deeper, and almost buttery. Once people try it, they start putting it on everything. Egg sandwiches, fries, burgers. Some fans even swear by dipping pizza crust in it. And once you notice it, you start seeing it everywhere. Chefs use it. Restaurants use it. People who really care about flavor use it. Never tried it? Grab the bottle with the red cap next time you're at the store. Put it on just about anything. Then you'll understand. Kupi, the original Japanese mayonnaise. Amazon Health AI presents Painful Thoughts.

16:47I, um, I can't stop scratching my downtown. Mm-hmm. Yeah, but I'm not itching to go downtown and tell a receptionist I'm here to talk about my downtown. Some things you'd rather type than say out loud. There's no question too embarrassing for Amazon Health AI. Chat your symptoms and get virtual care 24-7. Healthcare just got less painful. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube.

17:27Carol Massar:Welcome back to the weekend edition of Bloomberg Businessweek. I'm Tim Stanovic. Carol Masser is off this week. President Trump's family is on the verge of having its very own bank. The president's relatives and their business associates have won preliminary approval to start one, riding a wave that doesn't come around that often. And thanks to the Trump administration's deregulation push, it's now easier than at any time in almost the past 20 years to get a national bank charter. For a closer look, Nora Melinda and I spoke with Paige Smith, finance reporter for Bloomberg News. First of all, I think it's important to note that there are a number of different bank charters that anyone or any entity can pursue at any given time.

18:07The president's family is pursuing a trust charter and has received conditional approval from one financial regulator to do that. That regulator is the office of the comptroller of the currency. The OCC. The OCC, as we know it. run by Jonathan Gould, who is actually a Trump appointee himself. So there are a lot of different charters that anyone can pursue. Take Nubank, for example, a really well-known fintech that's Brazil-based. They've received approval to be a national bank, so it's slightly different. And maybe a little bit more vanilla or bread and butter than a trust bank, for example. So, I mean, the Trump family now on the verge, though, of having its own bank.

18:54What exactly are they trying to build? So the entity is known as World Liberty Financial, and it's owned by members of the Trump family and their business associates. And they are best known for a stable coin called USD1. And when they received this conditional approval and also before they received approval when they were applying, World Liberty Financial essentially said that they want to grow the reach of this stable coin and build out that business specifically.

19:29Carol Massar:You make the point in your piece that there have been other presidents who've had connections to the financial industry. The Roosevelt's operated their New York based financial firm for more than a century. You write. I learned from your reporting that George H.W. Bush's father was managing partner of the financial services firm Brown Brothers Harriman. But is there any precedent for a sitting president to have children who actually are starting a bank? As far as we know, there's not. This is a sort of one, this is, as far as we've reported, this is the first time that something like this has occurred.

20:08And it is really noteworthy, because like I mentioned, the application was reviewed by staff members at the OCC, and leaders of that agency were appointed by this sitting precedent by President Donald Trump.

20:23Carol Massar:For those out there watching or listening right now who might say, wait a second, there is a conflict of interest or there could be the appearance of a conflict of interest. You and the team reached out to the White House. What did they say? The White House essentially said that there is no conflict of interest here. And when we looked at the actual documents approving this entity to become a bank, they acknowledged that members of the public had raised the question or raised the question of the appearance of conflicts of interest and essentially said senior members of the OCC have reviewed this application and it may move forward.

21:02So why exactly does World Liberty Financial want to become a bank in the first place? So there are a lot of reasons for becoming a bank. Cheaper funding is one of them, but especially at this moment in time, if you think about it, if you're a bank in the U.S. financial system that comes with a level of legitimacy and sort of an inherent stamp of approval from the U.S. government to operate. And that's a big deal when you're a smaller digital asset firm or a fintech or an up-and-coming entity to be able to say, we have been approved by this U.S. financial regulator to operate in the U.S. financial system.

21:39That's a big deal. So what I found to be particularly interesting is in the piece, you know, you essentially note that this isn't happening in isolation. You found that it's easier to get a national bank charter right now than it was maybe 20 years ago in the past.

21:52Carol Massar:Or maybe even during the Biden administration. Fair play. So what's changed? Really, the pace has changed. If we include a number of graphics in the story that I would encourage everyone to read, that really note just how different it is, the timing is from the point of application to some sort of a decision, whether an approval or disapproval or any sort of decision on a bank charter. So that pace has really been expedited, but also just the number of banks that are being approved. In the first 19 months of the president's second term, the OCC approved 22 bank charters. That's more than the previous five years combined.

22:36Carol Massar:You know, you've done a lot of reporting on fintechs, and traditionally with fintechs, they haven't actually been banks. What they've been is like, okay, well, if you deposit money or you put your money with this fintech, they hold it in a bank that they have a partnership with. Is that changing because it is easier to become a bank now? That's such a good question. So it is changing in some ways, but it's not changing entirely. So for example, there may be some banks that will still work with a third party bank for another branch of their business. When you apply to become a bank or a new bank as a fintech, you have to make a present a very clear plan of how you plan on operating for the next few years so if an opportunity presents itself and you deviate from that plan in any way you can't do that under the plan you can't you need to make perhaps have a third-party relationship with someone else to execute that new opportunity so if we were to zoom out are we like essentially running an experiment here?

23:38Or what happens when you suddenly allow many of these crypto and fintech companies to actually go this route into traditional banking? I think that is a great question. And I think we're going to have to see how it plays out. I would note that a lot of these, some of these companies have operated before, a lot of them have not. Some of these companies are coming from other countries. Some of them are U.S.-based. It really is a very interesting moment in time and a moment in history to see how these sort of non-traditional firms will fare within the parameters of the U.S. financial system.