Reuters World News - McCarthy’s ouster, Britain’s divided Conservatives, a bond rout and Mexico’s fentanyl banners

Episode Date: October 4, 2023

A first in the U.S. House of Representatives: Speaker Kevin McCarthy is ousted as party infighting plunges Congress into further chaos. In Britain, Prime Minister Rishi Sunak tries to unite a divided Conservative party to fight next year’s election. Plus, a sell-off in government bonds has investors around the world spooked and banners say the sons of El Chapo have banned fentanyl production - but what do they really mean?   Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, Republican infighting sees McCarthy ousted, while in the UK, Rishi Sunak bids for party unity in a critical annual conference. Banners by Alchapos Sons say fentanyl production is banned. What do they really mean? Plus, we dig into why a rout in US government bonds is worrying global investors. It's Wednesday, October 4th. This is Reuters World News, bringing you everything. you need to know from the front lines in 10 minutes every weekday. I'm Kim Vinald in London.

A historic moment in Washington, D.C. were the first on the hill. The office of Speaker of the House of the United States House of Representatives is hereby declared vacant. Eight Republicans voted with 208 Democrats to remove Kevin McCarthy, just days after Congress narrowly averted a government shutdown. The former speaker says he has no regrets. Doing the right thing isn't always easy, but it is necessary. I don't regret standing up for choosing government over grievance. It is my responsibility. It is my job. McCarthy says he will not run for speaker again.

Now let's turn to other news breaking around the world. Americans are being warned to expect a nationwide test of the emerging. emergency alert system today. Over in Russia, they're doing exactly the same. Both countries are running drills on the same day. Russia's involves sirens and interrupted TV broadcasts. In the US, the messages will be sent to cell phones, TV and radios. At least 21 people have died after a bus carrying tourists crashed off a bridge just a few miles from the historic centre of Venice. Some of those killed were children. It's not yet known what caused the crash.

The TV journalist who burst into a Russian news broadcast with a placard that read Stop the War and They're Lying to You has been sentenced to eight and a half years in jail. Marina of Sianakova was not in court for the hearing. She fled Russia with her daughter for an unspecified European country a year ago after escaping from house arrest. The names of the latest Nobel Prize winners have been issued by mistake, just hours before the award for chemistry was due to be released.

Scientists Moengi Buende, Louis Bru and Alexei Echimov won for the discovery and synthesis of quantum dots. They are the names that were leaked early. We'll have more on the Nobel Prizes in tomorrow's pod. A sell-off in government bonds has investors' around the world spooked. U.S. economics editor Dan Burns is in New York. So, Dan, what's happening with government bonds that has investors so worried? Well, it's a big reset in interest rates that's underway right now. When bond prices fall, the yields begin climbing,

and they've been climbing really, really fast. It's a reflection of the efforts the Federal Reserve has been making to slow down the economy to beat back inflation. There's a clutch of other things that are influencing the rise and yields. The U.S. budget deficit is large and growing. The U.S. Treasury is aggressively selling or ramping up its issuance of bonds to help finance that deficit and to pursue Biden's agenda around things like the IRA and Chips Act. Big foreign buyers, particularly China, have been kind of fading from the market in the footprint that they used to have. So all of those factors coming together are conspiring to help drive yields up and they're going up very fast. It's the annual Conservative Party conference here in the UK, and Prime Minister Rishi Sunak has a tough job ahead of him with his keynote speech.

Sunak has to try and convince the country to vote conservative in next year's election, but the party themselves are deeply divided. Some familiar faces have popped up to try and shape the debate. Brexit campaigner Nigel Farage isn't even a Conservative Party member, but gave his two cents. And on many of these other issues, things that I'm saying that may not be popular amongst mainstream media, may not be popular amongst gutless MPs in Westminster. Actually, these are the things that win in the country. Former lawmaker Alastair Burt disagreed. There'd be a lot of stuff about woken issues as that I don't think they raise. resonate so much on the doorstep.

People want to know that their government is going to be concentrating on the basics for them. But the party's right wing has a distinct pull. One of the biggest draws has been a speech by Britain's shortest-lived Prime Minister, Liz Truss, at an event called Make Britain Grow Again. We can axe the tax, we can cut the bills, and we can build the homes. Our reporter Natalie Thomas is in Manchester for a sense of the issues dividing the party. the chaos of the last year and a half where we saw Boris Johnson kicked out, they have to come up with something pretty compelling.

I wanted to get a sense from the rank and file as well as MPs what they thought that strategy should be. I think the debate on immigration, particularly illegal immigration, is quite important. My generation, obviously as we know, very pro-climate, very pro-expanding our renewable energies. Sadly though, the message of the party was hoping, hoping to get across at this conference has been derailed, if you will excuse the pun, by questions over a hugely expensive high-speed rail project that would have connected London to Manchester. It's proved a massive distraction and is set to eclipse any wider message the PM wanted to

use to woo the electorate. In the Mexican state of Sinaloa, banners signed by the sons of Drug Kingpin El Chapo have appeared on road sides. They declare that the powerful faction of the Cinaloa cartel known as Los Chippitos have banned the sale and production of fentanyl. But analysts are skeptical. Drazen Georgic is an investigative journalist in Mexico City. Drayson, tell us about these banners. Is this how cartels send tweets essentially? Banners have historically been for messaging, right? Either to scare the local population in some way or messaging to the government, or in this case,

it may have been a message to the United States. The Mexican cartel, or in this case, the Sinloa cartel, is under a lot of pressure about fentanyl production, and they're trying to say, oh, actually, no, no, no, we're not involved in that in a serious way, which the US government does not believe. So is it a PR stunt, or might Los Chapitos be getting out of the fentanyl business?

Los Chapitos have been producing fentanyl for several years now, and the question is, can they get out or do they want to get out? A lot of analysts and DEA agents think they're simply too profitable for them, that there's too much money in that, and this is kind of a key moneymaker for them. So there is no huge incentives to leave that from a business point of view. However, from a safety point of view, if they think that they're going to be arrested or attain in some way, they might want to ease the pressure on them a little bit. And so this is part of that, or at least that's what the analysts say.

Robert F. Kennedy Jr. is expected to announce next week that he'll now run for president as an independent. The environmental lawyer and anti-vaccine activist is part of a storied Democratic dynasty. But some of his views are more aligned with Donald Trump's followers than Biden's. White House editor Heather Timmons has been analyzing how RFK's bid might impact. patch the 2024 race. I think that's one of the really interesting things about him is he, RFK Jr. appeals a lot more to Republicans, polls show. He, some of his sort of right-leaning beliefs and some of the conspiracy-related things that he's talked about are more popular on the right. But strategists that we talk to, both Democrats and Republicans, said that they are

concerned that he could be a bigger blow to Biden's campaign because Trump loyalists are Trump loyalists. The folks that are going to vote for Trump are going to vote for Trump. And that's the reason that Trump is going to be the Republican Party nominee. And you have to keep in mind that in America right now, in the most important states, the ones that swing back and forth, there's a huge amount of voters that are registered as independents. You know, Arizona is one of those states. They have as many voters registered as independent as they do as Democrat. So these are folks who have no allegiance to either party. We are seeing from our own polling that RFK Jr. has higher favorability ratings right now than either Biden or Trump. So it's a little bit of a

toss-up. That's it for today's episode of Reuters World News. We'll be back on Thursday with our daily news show. To make sure you know what's going on in the world, listen in for 10 minutes every weekday. And don't forget to subscribe on your favorite podcast player or download the Reuters app.