Former FBI Director Comey Charged, $14 Billion TikTok US Valuation

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1:31Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with a major legal and political development. Former FBI Director James Comey is now facing a criminal indictment. He's been charged with lying to Congress and obstruction over testimony he gave in 2020 about leaks in the Hillary Clinton investigation. The grand jury indictment was announced by Lindsay Halligan, the federal prosecutor that President Trump handpicked this week after her predecessor resigned under pressure. President Trump was asked about the charges hours before they came out.

2:12They're going to make a determination. I'm not making that determination. I think I'd be allowed to get involved if I want, but I don't really choose to do so. I can only say that Comey's a bad person. He's a sick person. I think he's a sick guy, actually. President Trump fired Comey in 2017 while he was overseeing the investigation into Russian interference in the 2016 campaign. Comey responded to the charges in a message on Instagram. My heart is broken for the Department of Justice, but I have great confidence in the federal judicial system and I'm innocent. So let's have a trial. Former FBI Director James Comey could face up to five years in prison if convicted.

2:51Another major story that we're following this morning, Nathan, involves the ongoing trade war. President Trump has announced a fresh round of tariffs on pharmaceuticals, heavy trucks, and furniture. Bloomberg's John Tucker joins us with the very latest. John, good morning. Good morning, Karen. Trump's announcement includes a 100 % tariff on patented drugs unless the producer's building a manufacturing plant in the U.S. He posted on social media they will start October 1st. The announcement, short on details. We're not sure which producer is going to be impacted. Deborah Elms, head of trade policy at the Henrich Foundation, had this reaction.

3:28Trump is never going to be done with tariffs. So anyone who thinks that this is the end or at any point that that would be the end of his tariff game is delusional. The man loves tariffs. He'll continue to use them. It doesn't stop at pharmaceuticals. Imported heavy trucks, they'll be subject to a 25 percent duty. Kitchen cabinets and bathroom vanities will be hit with a 50 % charge. And upholstered furniture imports will be taxed at 30%. The moves amount to a rapid expansion of Trump's tariff regime. And it comes at a time when the president has flexed his executive powers like none of his modern predecessors.

4:03Most European drug makers slumped in early trading. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. And indeed, President Trump has signed another executive order. This one detailing plans to allow TikTok to keep operating in the United States. Bloomberg's Amy Morris reports from Washington. As part of this new framework, Oracle will audit TikTok's algorithm. Vice President J.D. Vance. What this deal ensures is that the American entity and the American investors will actually control the algorithm. We don't want this used as a propaganda tool by any foreign government.

4:34We want to make sure that our people and our investors actually make these decisions based on what's good for their business. And Vance says the U.S. version of TikTok will be valued around$14 billion. Oracle, Silver Lake, and the Abu Dhabi-based investment company MGX are in talks to invest in a U.S. version and receive board seats in the new venture. The U.S. will not get an equity stake in TikTok, but Trump says the U.S. government will make money in taxes from the deal. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. And some analysts say that$14 billion price tag values TikTok more like a stuffy old energy or food company than a leading global social media company.

5:13Well, Nathan, the 80th U.N. General Assembly continues in New York today. Israeli Prime Minister Benjamin Netanyahu will be among those speaking. Israel Bureau Chief Ethan Bronner is in New York covering the closely watched speech. The prime minister will be utterly defiant. He will tell the world that it has misunderstood what's going on, that to urge Palestinian statehood in the wake of what happened on October 7th, 2023, is to reward terror and to drive the wrong side of history. He's going to explain why the only solution is to destroy completely Hamas, despite whatever costs he's accused of making happen there, including, of course, accusations of genocide and famine and enormous and increasing global isolation.

6:03But this government has come to the conclusion that the future is in its hands as long as it shows strength rather than compromise. Well, Nathan, we turn now to markets and the economy. And we will get another key rating on consumer spending and inflation before this morning's opening bill. And we get a preview with Bloomberg's Michael McKee. Consumers hung in there during August, economists say. The consensus is spending remained strong during back-to-school season, suggesting any impact from tariffs or Trump uncertainty was muted. The August data comes a day after the government reported spending was stronger than expected in the second quarter.

6:38Investors are also watching the personal consumption price indexes for clues to the Fed's plans ahead. Fed officials have already forecast headline inflation of 2.7 percent and a core of 2.9, still moving away from their 2 percent target. Michael McKee, Bloomberg Radio. Hi, Mike. Thanks. Meanwhile, Fed Governor Stephen Myron's renewing his call for aggressive rate cuts. In an interview heard right here on Bloomberg Radio, Myron said the Fed risks damaging the economy by not quickly lowering rates. I would rather act proactively, right? And we know that we just had the biggest population growth shocks in many people's lifetimes, mine included.

7:15We know what the consequences of those are economically. I would rather act proactively and lower rates as a result ahead of time rather than wait for some giant catastrophe to occur because you suddenly wake up and find out that you are sort of resuming those dynamics. Fed Governor Stephen Myron spoke on Bloomberg surveillance ahead of yesterday's stronger-than-expected GDP report. Well, in company news, Nathan Kosko reported better than expected profit for the fourth quarter. The nation's largest warehouse club operated posted both earnings per share and comp sales above consensus. Big box stores have seen strong sales growth despite the risk of tariff-driven inflation.

7:57Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. If Congress does not pass a bill to keep the federal government funded past September, it is likely to shut down starting Wednesday. The House approved a Republican proposal to keep the federal government funded into November, but the measure failed in the Senate. Democrats are pushing to preserve health care programs as part of any deal. House Minority Leader Hakeem Jeffries. Because of the Republican refusal to address the Affordable Care Act tax credit issue, at least 20 million Americans are about to experience dramatic increases in their health care premiums, co-pays and deductibles.

8:39This week, President Trump posted on his social media platform that he no longer intended to meet with Democrats to discuss a path forward. Republican Congressman Marlon Stutzman of Indiana says this isn't just about President Trump. We all know Republicans have the majority in both the House and the Senate, and so it's up to Republicans to drive the agenda. Democrats have said they don't agree, and they decide that they're going to obstruct, and that's what shuts the government down. The White House Budget Office is telling federal agencies to prepare plans for mass firings during a possible government shutdown.

9:17A large group of protesters gathered outside 26 Federal Plaza in New York City, where they say that Immigration and Customs Enforcement is holding migrants without due process. It is the same building where several elected officials in New York were arrested during a protest last week. The demonstration comes just one day after a sniper opened fire on an ice field office in Dallas, but New York protesters weren't deterred. I believe in peace. I believe in the possibility of peace. every day. And I believe we can solve all these problems with a commitment to peace. Protesters say people are being held in unsafe and inhumane conditions.

9:55A federal judge in New York is promising a speedy decision after hearing arguments Thursday on whether to throw out two prostitution-related charges that rapper Sean Diddy Combs was convicted of in July. If the charges stand, Combs will be sentenced next week. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Garrett. Thursday night football in Phoenix. Seattle have a two-touchdown lead with six minutes to go. Two Kyler Murray touchdown passes, one with 28 seconds left.

10:31Tied the game, but Jason Myers, a 52-yard field goal at the end. Seattle won 23-20. Detroit Tigers finally had a win, 4-2 at Cleveland. The Tigers and Guardians are tied for first, going to the final weekend. The Ryder Cup 45th edition starts this morning at Bethpage Black Back on Long Island, Europe has won eight of the last 11, 10 of the last 14. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge.

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12:35Let's create smarter business. IBM.

13:05opportunity. Seize your opportunity at michiganbusiness.org. Coast to coast on Bloomberg Radio, nationwide on Sirius XM and around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. President Trump has been pushing for legal action against officials he perceives as his political enemies. Now, the FBI director he fired nearly a decade ago, James Comey, has been charged with obstruction and lying to Congress. Comey is already responding. He says he's innocent. Somebody that I love dearly recently said that fear is the tool of a tyrant, and she's right.

13:46But I'm not afraid, and I hope you're not either. That was former FBI Director James Comey in a post on Instagram. For more, we're joined by Terry Haynes, the founder of Pangea Policy. Terry, good morning. Your reaction to this indictment. Good morning, Nathan. Three points on this. First, this is lawfare, pure and simple, with the objective of ruin, where the process is punishment. But I don't think people ought to be crowing about or wringing their garments about, bending their garments about Comey. You know, the people that sow the wind reap the whirlwind. And there's been plenty of lawfare tossed around over the last decade on both sides.

14:31So people need to remember that, I think, number one. Number two, the case depends entirely on the facts. That's elementary, but I pointed out to say the facts aren't known. So we'll need to look at the strength of the case to assess it. The fact that prior prosecutors didn't want to bring the case tells us something, but I think doesn't tell us everything. So we'll need to look at that going forward. Finally, there's a bigger point here. The bigger point is whether you're restoring or destroying government credibility. There'll be disagreements about that as well. But the Trump people think they're trying to restore government credibility in no small part because you ask Ask yourself the basic question, what in heaven's name was Comey doing back in 2016, 2017, by having personally or having the department leaking documents back and forth, not just on Trump, but on Secretary Clinton as well.

15:30So lots of questions here, but this looks to me like, in part, an opportunity from the Trump perspective for people to relitigate the inspector general's report that found Comey at fault in a lot of different ways. Well, let's get into that point in particular. I mean, coming into this second term, President Trump talked about wanting to end the weaponization of the Justice Department. Doesn't this undermine that fundamental message? You know, I was on your ear. I think you and I talked directly about the wisdom of letting all this go and how heartening that seemed to be. My only response is that consistency is the hobgoblin of little minds, as Emerson said.

16:19And, you know, I think this is a case where the lesser instincts are taking over from the higher. There's also a question about whether the president himself had an influence over this. He was asked about it directly in the Oval Office yesterday. He said he's not making the determination, but he feels like he could if he wanted to. And he handpicked the prosecutor that brought these charges with the grand jury after the last one resigned under pressure. Is there presidential influence here? Well, you know, I think the president wants it both ways. I'm not saying that in a nefarious sort of way.

16:57I'm saying in a public relations sense. On the one hand, he wants it to be known that this is the result that he wanted. And that's apparent from his statements just over the last week or so. But at the same time, trying to stay away from the more granular questions of just how much influence he had. But bottom line, it bears understanding that the Justice Department is a creature of the executive and exercises executive power. The president certainly can involve himself in these things, and he's not the first to do so. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

17:40Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston and nationwide on Sirius XM Channel 121. 21. Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long.

18:18I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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