WEBVTT - Bloomberg Surveillance TV: October 27th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordernt. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:37.479 Terminal and the Bloomberg Business app. The optimism over a 0:00:37.600 --> 0:00:40.120 US China trade deal pushing bond your tire. The move 0:00:40.200 --> 0:00:43.200 comes as investors price in another rate cut Later this week, 0:00:43.400 --> 0:00:46.559 Gray Pilisipgian fixed income right in the following near term 0:00:46.640 --> 0:00:50.760 dynamics remain challenging, policy sensitive and under fiscal stress, which 0:00:50.800 --> 0:00:53.960 may add pressure on ras. Great joins us now for more. 0:00:54.040 --> 0:00:56.640 Greig welcome back. Do you think supplier shoes might reassert 0:00:56.680 --> 0:01:00.000 themselves as a problem in the coming months. 0:01:00.040 --> 0:01:01.880 I don't think supply is so much a problem in 0:01:01.920 --> 0:01:04.240 the coming months, but I think next year is a 0:01:04.319 --> 0:01:08.080 very different supply story. But I think the bigger issue 0:01:08.319 --> 0:01:11.520 is you know you saw it in the CPI release, 0:01:11.680 --> 0:01:14.839 is that you are seeing inflation pressures away from rents 0:01:14.840 --> 0:01:19.479 and oer right, and I expect that to continue into 0:01:19.560 --> 0:01:22.120 next year. And what I really worry about is that 0:01:22.160 --> 0:01:25.480 investors are very much of the mind the Fed's going 0:01:25.520 --> 0:01:29.119 to continue to cut inflation is you know, a twenty 0:01:29.319 --> 0:01:33.200 twenty one story largely contented with and I think the 0:01:33.360 --> 0:01:38.720 risk is you're cutting into a higher growth, higher inflation environment, 0:01:38.880 --> 0:01:41.399 and the question is what does the bond market think 0:01:41.440 --> 0:01:41.800 about that? 0:01:41.920 --> 0:01:44.680 Ultimately, So, Greg, your point is interesting because this market 0:01:44.920 --> 0:01:47.400 took comfort from what was happening with shelter, but you're 0:01:47.440 --> 0:01:50.960 taking anxiety from what happens everybody else, everywhere else. Great, 0:01:50.960 --> 0:01:52.240 do you think the market's going to come round to 0:01:52.280 --> 0:01:52.920 your point of view? 0:01:52.960 --> 0:01:53.400 And why? 0:01:54.480 --> 0:01:54.640 Well? 0:01:54.680 --> 0:01:57.720 So, I think the shelter component has been an incredible 0:01:57.760 --> 0:02:02.320 disinflationary driver this year, and that's actually given kind of 0:02:02.320 --> 0:02:06.600 the broad CPI or disinflation numbers cover right. But as 0:02:06.640 --> 0:02:11.520 we go into next year, you'll have continued pressure around 0:02:11.520 --> 0:02:15.000 those goods, particularly those you know affected by Karras. And 0:02:15.120 --> 0:02:17.959 you know this is a story that's leaking out over time. 0:02:18.040 --> 0:02:23.080 This is not a one shot type of idea, and 0:02:23.160 --> 0:02:25.840 so next year you have shelter either flattening out or 0:02:25.880 --> 0:02:29.240 even maybe moving higher. And that just changes the game, 0:02:29.280 --> 0:02:31.440 I think, and I think that is underappreciated. 0:02:31.720 --> 0:02:33.760 Right now, I'm looking at break even rates that are 0:02:33.760 --> 0:02:36.639 at the lowest levels going back to earlier this year. 0:02:36.720 --> 0:02:40.000 I'm looking at inflation expectations over the longer term. It's 0:02:40.000 --> 0:02:43.480 just falling significantly over the past couple of months. 0:02:43.960 --> 0:02:45.000 Why do you think that is? 0:02:45.040 --> 0:02:47.200 I mean, why do you think the market so profoundly 0:02:47.280 --> 0:02:50.680 disagrees with this higher inflation, higher growth view, at least 0:02:50.919 --> 0:02:52.520 based on market measurements. 0:02:53.240 --> 0:02:56.000 I don't know. That is something that really confounds me. 0:02:56.160 --> 0:02:59.680 Honestly when I think about you know, next year, you know, 0:02:59.720 --> 0:03:02.800 that is the most central. 0:03:02.360 --> 0:03:05.440 Figure that I look at. So what has a twofold effect? 0:03:05.800 --> 0:03:06.320 Number one? 0:03:07.120 --> 0:03:12.000 Obviously it's a market measure around longer term inflation. But also, 0:03:12.600 --> 0:03:14.680 you know, there's lots of talk around the Fed. You know, 0:03:14.720 --> 0:03:17.120 what happens with the Lisa cookcase, what happens with the 0:03:17.160 --> 0:03:19.919 new FED shair, you know what happens to the kind 0:03:19.919 --> 0:03:22.480 of the path of rates. Are we really moving to 0:03:22.600 --> 0:03:26.799 this really easy type of environment? And if the market 0:03:26.840 --> 0:03:29.679 starts to get spooked around that that's going to manifest 0:03:29.720 --> 0:03:32.399 itself not only in the US dollar, but in five 0:03:32.520 --> 0:03:35.040 or five year break even. So I look at that 0:03:35.360 --> 0:03:38.880 and I do scratch my head, and you know, for 0:03:38.960 --> 0:03:41.080 my money, that is something that I'm kind of looking 0:03:41.120 --> 0:03:41.720 the other way. 0:03:41.840 --> 0:03:44.440 What I think it should be higher, not lower? 0:03:44.680 --> 0:03:47.600 How much are you actually betting against some of these 0:03:47.760 --> 0:03:49.960 longer data bonds? I mean, right now we're looking at 0:03:50.000 --> 0:03:51.880 a corporate sector that's in pretty good shape. You can 0:03:51.920 --> 0:03:55.120 make the argument that you should get sprighter, tighter spreads. 0:03:55.200 --> 0:03:56.640 And at the same time, when you look at the 0:03:56.640 --> 0:03:58.880 government bond market, there's a sort of mystery wrapped in 0:03:58.880 --> 0:04:01.720 an enigma, and why is it being priced in more? 0:04:01.920 --> 0:04:05.240 How actively aggressively are you betting against where things are now? 0:04:06.080 --> 0:04:06.840 Well, we'll mix it. 0:04:06.880 --> 0:04:11.280 Incredibly tricky is just the the uncertainty component around not 0:04:11.360 --> 0:04:14.760 only caraffs. Right, we have a Supreme Case Court court 0:04:14.800 --> 0:04:17.200 case that's coming to you know what happens you know 0:04:17.279 --> 0:04:21.080 after that? Well, and then there's lots of worries I 0:04:21.120 --> 0:04:24.880 guess around changes and issuance changes and you know, buybacks, 0:04:25.279 --> 0:04:28.120 and so investors are a little leary to you know, 0:04:28.279 --> 0:04:31.080 lean too much into the curve steepner in the back 0:04:31.120 --> 0:04:33.720 end of the curve in particular, just because you can 0:04:33.800 --> 0:04:37.239 see that change in dynamics that could kind. 0:04:37.040 --> 0:04:39.120 Of catch investors by surprise. 0:04:39.160 --> 0:04:42.360 So I think there's a tentative nature around it, so 0:04:42.440 --> 0:04:43.359 I see it more. 0:04:43.240 --> 0:04:45.600 Cleanly, you know, from twoes tens in that part of 0:04:45.640 --> 0:04:45.920 the curve. 0:04:45.960 --> 0:04:49.560 As you go further out, you're you're more exposed to, 0:04:49.800 --> 0:04:51.080 you know, these certain vagaries. 0:04:51.320 --> 0:04:53.960 Greg that's the treasury market. We've touched on the supply there, 0:04:53.960 --> 0:04:56.640 we'll get suns this week. Let's talk about the corporate supply. 0:04:56.880 --> 0:04:59.480 This is coming this week as well. And what is financing? 0:05:00.640 --> 0:05:02.600 Is this market still wide open for this kind of 0:05:02.640 --> 0:05:05.200 debt issuance to finance the campex stories that we've been 0:05:05.200 --> 0:05:07.360 talking about the media every single day. 0:05:08.800 --> 0:05:12.280 It is for now. So there's just a tremendous amount 0:05:12.839 --> 0:05:15.000 you know. I started to scratch my head, you know, 0:05:15.040 --> 0:05:18.400 as you go out the curve, particularly on the unsecured side. 0:05:18.520 --> 0:05:21.480 So there's been some deals in the marketplace that really 0:05:21.680 --> 0:05:25.039 don't make a lot of sense to me necessarily, you know, 0:05:25.080 --> 0:05:26.960 but this is a tremendous build out. 0:05:27.160 --> 0:05:29.520 There's a tremendous amount of circularity around it. 0:05:30.240 --> 0:05:33.200 So this is, you know, something that I think makes 0:05:33.200 --> 0:05:36.680 sense today. But as we go through this cycle, I 0:05:36.760 --> 0:05:41.279 worry about the refinancing aspect and ultimately the AI you know, 0:05:41.320 --> 0:05:45.840 adoption and the return on investment that these companies need 0:05:45.960 --> 0:05:49.200 in order to make sense. And that's what starts to 0:05:49.200 --> 0:05:51.240 worry with me. But as of right now, Jonathan, the 0:05:51.240 --> 0:05:54.560 markets are open. Everyone's all in on the AI trade, 0:05:54.600 --> 0:05:58.039 both sides of the debt and equity aisle. But at 0:05:58.080 --> 0:06:00.360 some point there has to be a return on that 0:06:00.400 --> 0:06:04.360 invested capital, and you know, we shall see. 0:06:04.520 --> 0:06:06.400 Well, Greg, with that in mind, how closely does someone 0:06:06.440 --> 0:06:08.480 like you watch the earnings as they come in on 0:06:08.520 --> 0:06:10.359 Wednesday on Thursday? 0:06:12.040 --> 0:06:15.080 Yeah, So I think earnings are incredibly important here. Uh, 0:06:16.080 --> 0:06:18.240 you know, we have these long term structural issues that 0:06:18.279 --> 0:06:21.840 we worry about, but honestly, from an investor standpoint, right 0:06:21.880 --> 0:06:24.040 you worry about the cash flows and the earnings in 0:06:24.080 --> 0:06:27.560 the here and now. So I think it's crucial to 0:06:27.720 --> 0:06:30.440 kind of keep this market afloat, you know, as long 0:06:30.480 --> 0:06:34.000 as you see you know, a pretty reasonably strong corporate 0:06:34.160 --> 0:06:38.800 environment and backdrop, I don't really see this full market changing, 0:06:39.040 --> 0:06:41.520 you know, anytime soon. So it's about the near term 0:06:41.600 --> 0:06:45.000 data that's allowing investors to kind of look past maybe 0:06:45.040 --> 0:06:47.680 some of the longer term structural issues that we talked about, 0:06:47.880 --> 0:06:51.480 namely fed independence and you know some other areas. 0:06:52.279 --> 0:06:55.719 Stay with us mobile impeck Savanda's coming up off to this. 0:07:04.200 --> 0:07:05.919 I got to talk about this market and the amount 0:07:05.920 --> 0:07:08.479 of M and A activity we've seen over the summer 0:07:08.720 --> 0:07:11.360 and into the end of the year. Over nine hundred 0:07:11.360 --> 0:07:13.880 billion dollars in deals completed so far this year, with 0:07:14.000 --> 0:07:16.600 another one point one trillion in the works, on pace 0:07:16.880 --> 0:07:19.320 for a fifty nine percent rise from a year ago. 0:07:19.520 --> 0:07:22.880 Vitas Paduto of RBC Capital Markets US writing the market 0:07:22.960 --> 0:07:26.280 tone has shifted from waiting for an optimal window to 0:07:26.400 --> 0:07:30.640 moving into execution mode. More discussions of large deals, more preparation, 0:07:31.240 --> 0:07:33.920 mo momentum, Vita joint just now for more vitok. 0:07:33.600 --> 0:07:34.920 And morning, good morning. 0:07:35.000 --> 0:07:35.520 Good to be here. 0:07:35.560 --> 0:07:38.240 But we spoke honey recently. Things picking up even more. 0:07:38.600 --> 0:07:40.800 Yes, I mean, I just think about the past. 0:07:41.520 --> 0:07:42.920 I was here at the beginning of the month and 0:07:43.000 --> 0:07:46.640 just the tone has just talked about has clearly shifted. 0:07:47.360 --> 0:07:50.320 We've gone from trying to time the right window, and 0:07:50.360 --> 0:07:53.360 we always talk to clients about the importance of being 0:07:53.440 --> 0:07:57.840 prepared to execute on your strategic initiatives and being prepared 0:07:57.840 --> 0:08:00.360 to access the window when it opens. Well, the window 0:08:00.360 --> 0:08:03.520 feels open, and I think we're into full execution mode 0:08:03.520 --> 0:08:04.440 of many of our clients. 0:08:04.480 --> 0:08:07.320 Could you have this a sense of how much it's accelerating, I. 0:08:07.320 --> 0:08:08.200 Mean, just to give you a sense. 0:08:08.400 --> 0:08:11.800 In this past couple of weeks, the volume year to date, 0:08:12.080 --> 0:08:15.040 both from a global perspective and from a US perspective, 0:08:15.440 --> 0:08:18.640 has exceeded full year last year. So just to kind 0:08:18.640 --> 0:08:22.360 of you know, and we've also seen where total volume 0:08:22.480 --> 0:08:24.240 was up about twenty eight to thirty. 0:08:24.000 --> 0:08:27.840 Percent globally and US wise at the. 0:08:27.840 --> 0:08:30.200 End of the third quarter, we're now talking about up 0:08:30.240 --> 0:08:33.040 thirty five to thirty eight percent. We've seen some larger 0:08:33.080 --> 0:08:37.079 deals announced, especially across the technology space the healthcare space, 0:08:38.080 --> 0:08:40.480 but more importantly, we've also seen the tone of the 0:08:40.559 --> 0:08:45.080 dialogue out there has become more active. Clearly there's some 0:08:45.200 --> 0:08:50.120 larger companies talking about divestitures strategic initiatives, publicly announcing that 0:08:50.160 --> 0:08:53.680 they're considering alternatives, and so those are all, you know, 0:08:53.720 --> 0:08:57.800 big signs. At the same time, I would still label 0:08:57.840 --> 0:09:02.800 it as a cautious environment. I'm not seeing clients cut corners. 0:09:02.880 --> 0:09:06.600 I'm not seeing them rush into something. I think boards 0:09:06.679 --> 0:09:11.600 are certainly checking, dotting every I, crossing every te They're 0:09:11.600 --> 0:09:13.360 making sure they've done their full diligence. 0:09:13.360 --> 0:09:14.400 They're making sure that. 0:09:14.320 --> 0:09:18.040 The financing they're going to use is buttoned up, especially 0:09:18.080 --> 0:09:20.839 as we're heading into an environment where maybe there's some 0:09:20.880 --> 0:09:23.360 concerns about some of the financial structures that have been 0:09:23.400 --> 0:09:24.160 used historically. 0:09:24.280 --> 0:09:26.079 So this, to me is fascinating, the idea that you're 0:09:26.080 --> 0:09:27.840 seeing something and it speaks to what people talk about 0:09:27.840 --> 0:09:30.000 with AI. It looks frothy, but it's not a bubble yet. 0:09:30.200 --> 0:09:30.560 I'm gona. 0:09:30.760 --> 0:09:32.599 It looks like it's getting really heated, but it's not 0:09:32.640 --> 0:09:34.720 a bubble yet. It's not really problematic, And I just 0:09:34.800 --> 0:09:37.640 wonder what's the motivation behind this. Is it because you 0:09:37.760 --> 0:09:40.360 are seeing the expectation for FEDERI cuts. Is it because 0:09:40.400 --> 0:09:42.200 there's more policy certainties? 0:09:42.240 --> 0:09:43.079 It's just catch up? 0:09:43.640 --> 0:09:46.680 Yeah, I think it's a clearer environment in terms of 0:09:46.720 --> 0:09:51.480 being able to execute your strategical initiatives. From a government perspective, 0:09:51.559 --> 0:09:56.120 a regulatory review perspective, We're seeing clients consider transactions that 0:09:56.280 --> 0:09:59.720 maybe nine twelve months ago they would not have stepped 0:09:59.760 --> 0:10:02.959 into because they were concerned about would the government approved 0:10:02.960 --> 0:10:05.439 this transaction. And so I think there's been a more 0:10:05.480 --> 0:10:10.200 constructive tone out of the agencies. We've seen them certainly 0:10:10.240 --> 0:10:12.960 accept remedies much more so in terms of you go 0:10:13.000 --> 0:10:15.880 into a transaction you say, well, this might be an issue, 0:10:15.920 --> 0:10:20.040 but I'll consider these divestitures to satiate the regulators. And 0:10:20.080 --> 0:10:22.680 I think that's become an environment where you can think 0:10:22.679 --> 0:10:24.600 about how to constructively do something. 0:10:24.679 --> 0:10:27.520 Other particular industries that you're saying, we're both activities. It's 0:10:27.520 --> 0:10:29.880 the banking industry. Is this the tech sector in particular? 0:10:30.040 --> 0:10:33.640 What are the deregulatory areas that are getting produced by 0:10:33.679 --> 0:10:34.280 the current laws. 0:10:34.559 --> 0:10:36.400 I mean, as we talked about last time, it's always 0:10:36.400 --> 0:10:39.600 a technology and healthcare. And you look at the Aligned 0:10:39.679 --> 0:10:42.000 Data Center's deal on ho Logic in the past month 0:10:42.240 --> 0:10:44.520 or a few weeks as two of the largest deals 0:10:44.520 --> 0:10:47.719 announced here today, and they highlight those two sectors that 0:10:47.720 --> 0:10:51.440 are always leading the pace. We're seeing some around energy. 0:10:51.720 --> 0:10:54.239 I think we're seeing a fair bit around financial services. 0:10:54.280 --> 0:10:57.439 We certainly saw a significant bank deal announced this morning. 0:10:57.480 --> 0:11:00.920 I think there's more being talked about there and I 0:11:00.920 --> 0:11:02.960 think that's an area where if you look at what 0:11:03.000 --> 0:11:05.200 the regulators from that perspective are considering. 0:11:05.400 --> 0:11:07.480 They're allowing more of those to come together. 0:11:07.640 --> 0:11:09.640 When it comes to the government shutdown, has it been 0:11:09.679 --> 0:11:10.680 a pediment yet? 0:11:12.240 --> 0:11:12.800 Not yet. 0:11:12.880 --> 0:11:16.760 I think it's noise that's being monitored. On November fifth, 0:11:16.760 --> 0:11:19.240 it'll become the longest shutdown in history. 0:11:20.080 --> 0:11:21.600 I think the we talked about it. 0:11:21.600 --> 0:11:24.720 Last time, the poly markets now are you know, are betting. 0:11:25.120 --> 0:11:27.000 I think it's fifty two percent it's going to be 0:11:27.240 --> 0:11:30.760 November sixteenth or beyond. I think the vacuum of data 0:11:31.080 --> 0:11:33.880 is starting to cause some concerns because I think it's 0:11:33.920 --> 0:11:38.319 becoming more about expectation and estimates as we're seeing you. 0:11:38.280 --> 0:11:40.680 Know, what's going on there. You know that we're going 0:11:40.720 --> 0:11:41.320 to hear a. 0:11:41.200 --> 0:11:43.320 FED decision later this week, likely to be a rate 0:11:43.400 --> 0:11:46.240 cut again. And so I think part of it the 0:11:46.320 --> 0:11:48.959 longer it goes on, as soon as we start seeing 0:11:49.400 --> 0:11:51.719 you know, we joked earlier about you know, how many 0:11:51.800 --> 0:11:54.440 flights people are on and the fact that you're starting 0:11:54.440 --> 0:11:56.559 to see some delays, whether it's over the weekend and 0:11:56.600 --> 0:11:59.240 a lot of the business travel going on. You know, 0:11:59.600 --> 0:12:03.040 government employees are starting to miss paychecks. I think more 0:12:03.080 --> 0:12:05.360 and more of that happening, you're going to see it 0:12:05.360 --> 0:12:08.840 impact things. And certainly, you know when you start getting longer, 0:12:08.880 --> 0:12:12.440 you're start impacting GDP going forward. Now there's always an 0:12:12.520 --> 0:12:15.320 argument that you recapture it at some point, but you 0:12:15.320 --> 0:12:16.680 know that starts to become a concern. 0:12:16.800 --> 0:12:19.480 You mentioned the feder reserve. How relevant are those right 0:12:19.520 --> 0:12:23.959 reductions to the broadest story. I think acceleration that you've articulated, Yeah. 0:12:23.760 --> 0:12:26.000 We talked about it last time. I mean, I think 0:12:26.000 --> 0:12:27.559 it's helpful. 0:12:27.760 --> 0:12:31.040 I think it's a good signal, but I also think 0:12:31.040 --> 0:12:33.720 when you look at the overall environment and what people 0:12:33.720 --> 0:12:36.960 are thinking about. You know, there was a CEO confidence 0:12:36.960 --> 0:12:39.920 survey that just came out a couple of weeks ago 0:12:40.080 --> 0:12:43.200 from the Conference Board, and it was basically flat to 0:12:43.240 --> 0:12:47.600 the third quarter. It's sort there's a strong view going forward, 0:12:47.640 --> 0:12:49.800 but it's certainly cautious, and it's right at the mid 0:12:49.840 --> 0:12:51.920 planet about forty eight, where fifty is kind of a 0:12:51.960 --> 0:12:55.240 neutral level. But when you look at what CEOs identified 0:12:55.280 --> 0:12:59.080 as their number one concerns, it's geopolitical instability at the 0:12:59.080 --> 0:12:59.760 top of the list. 0:13:00.120 --> 0:13:03.439 Trade and tariffs was up there and it dropped to fifth. 0:13:04.240 --> 0:13:06.840 The other ones that they are concerned about is the 0:13:07.880 --> 0:13:11.080 uptick and sort of innovations. 0:13:10.520 --> 0:13:13.400 Around AI and how they impact their businesses. And so 0:13:13.440 --> 0:13:14.160 when you look at what. 0:13:14.200 --> 0:13:17.240 CEOs are thinking about, even though they might not be 0:13:17.320 --> 0:13:21.640 impacted by geopolitical issues somewhere else, they're still thinking about it. 0:13:21.760 --> 0:13:24.000 It's that noise externally. 0:13:23.480 --> 0:13:26.079 The financial conditions just is not the complaint. Right now, 0:13:26.400 --> 0:13:29.360 credit spreads the signatent equity markets we've been talking about 0:13:29.360 --> 0:13:30.600 at omnig sky high. 0:13:30.720 --> 0:13:32.480 Yeah, right now it seems like there's a window that's 0:13:32.559 --> 0:13:35.920 open even though you've got benchmark yields above four percent. 0:13:35.960 --> 0:13:37.240 If you look at the tenure, I mean, it just 0:13:37.280 --> 0:13:39.640 sort of goes to this question of what is it 0:13:39.679 --> 0:13:42.160 that could potentially style me some of this activity and 0:13:42.160 --> 0:13:44.480 does it suggest that maybe this is closer to neutral 0:13:44.480 --> 0:13:46.079 than anything else because companies are able to. 0:13:46.040 --> 0:13:47.000 Adapt to this well. 0:13:47.200 --> 0:13:49.600 I think the other thing is if start noticing what's 0:13:49.640 --> 0:13:53.199 the commentary is when earnings announcements are being made, you 0:13:53.720 --> 0:13:56.880 hear mention of the shutdown that you're not hearing about 0:13:56.920 --> 0:14:00.680 the significant impact on their businesses. I think you're hearing 0:14:00.760 --> 0:14:04.400 some caution and saying, well, maybe you know, quote unquote, 0:14:04.440 --> 0:14:06.480 are we in a bubble? Or you know, should we 0:14:06.880 --> 0:14:10.119 be careful what we're taking on. But they're still proceeding, 0:14:10.480 --> 0:14:13.120 so they're thinking about it. And I think everybody has 0:14:13.200 --> 0:14:15.120 a lot of history here and doesn't want to be 0:14:15.200 --> 0:14:17.840 caught as the party that's jumping in at the last 0:14:17.880 --> 0:14:20.040 minute when things are going in a difficult direction. 0:14:20.240 --> 0:14:22.960 Have you seen the leftage cycle start yet? Have you 0:14:23.000 --> 0:14:25.080 started to see that come into some of these days. 0:14:26.280 --> 0:14:26.920 A little bit? 0:14:26.960 --> 0:14:30.200 And I think the larger deals are are set up 0:14:31.680 --> 0:14:34.640 in an appropriate fashion because the largest players in the credits, 0:14:34.680 --> 0:14:38.160 in the credit cycle or the credit environment are participating 0:14:38.200 --> 0:14:41.200 in those transactions. I think when you're hearing some noise 0:14:41.240 --> 0:14:45.119 in places that have had issues from a financing structure perspective, 0:14:45.600 --> 0:14:48.320 it's really been some ancillary players that have been in 0:14:48.320 --> 0:14:51.280 those transactions and so it's been less of a concern. 0:14:52.400 --> 0:14:55.080 But you know, Jonathan, I think the we're sitting here 0:14:55.120 --> 0:14:57.040 with corporate it's probably the healthiest that. 0:14:57.000 --> 0:14:59.119 I've seen them in decades. 0:14:59.600 --> 0:15:04.040 And again, you go through the financial crisis, you go 0:15:04.120 --> 0:15:07.680 through COVID. COVID demonstrated there was a resilience in balance 0:15:07.680 --> 0:15:11.640 sheets and also a resilience in business models. You learn 0:15:11.720 --> 0:15:14.720 to pivot quickly you learn not to just take one 0:15:14.800 --> 0:15:17.680 path going forward. You thought about multiple paths, and you 0:15:17.680 --> 0:15:20.880 were able to make decisions and move your business. You 0:15:20.920 --> 0:15:23.800 think about earlier this year and how quickly a lot 0:15:23.880 --> 0:15:27.160 of companies shifted and brought business, you know, back on shore. 0:15:27.600 --> 0:15:31.040 And you don't hear of that that tone as much anymore. 0:15:32.280 --> 0:15:35.680 Stay with us, Multilemberg, Savannah's coming up off to this, 0:15:45.480 --> 0:15:48.960 Terry Hines Sepanche Policy, John just Nafam, Terry Week four. 0:15:49.440 --> 0:15:51.920 What's the day circled on your Accountada? When this gets real? 0:15:52.760 --> 0:15:52.920 Oh? 0:15:53.000 --> 0:15:55.640 I think sometime right before Thanksgiving. 0:15:55.680 --> 0:15:59.000 And I imagine you know I've been saying since before 0:15:59.080 --> 0:16:02.520 the shutdown start, that you know not only was this 0:16:02.600 --> 0:16:06.920 politically generated, but that Democrats had the ability to decide 0:16:06.920 --> 0:16:10.360 when it was when it was finished by merely by 0:16:10.760 --> 0:16:16.960 agreeing to continue to negotiate on the Obamacare subsidy temporary increase. 0:16:17.440 --> 0:16:20.760 And so they can do that, And meanwhile, the pain 0:16:20.840 --> 0:16:23.640 will continue to mount, as you all have talked about, 0:16:24.120 --> 0:16:27.720 and neither side ultimately is going to want to be 0:16:27.480 --> 0:16:31.280 the primary blamed for all this. So I think you 0:16:31.400 --> 0:16:35.520 probably have a truce called some time before Thanksgiving, Terry. 0:16:35.560 --> 0:16:37.640 Something interesting happened last week where you had the two 0:16:37.680 --> 0:16:41.840 Democratic senators from Georgia decide to vote with the Republicans 0:16:41.880 --> 0:16:45.880 and also a Senator Fetterman from Pennsylvania in paying essential 0:16:45.920 --> 0:16:48.280 workers like air traffic controllers. Are we going to see 0:16:48.280 --> 0:16:48.640 more of that? 0:16:49.920 --> 0:16:50.120 Yeah? 0:16:50.160 --> 0:16:50.600 I think so. 0:16:50.640 --> 0:16:52.240 There's going to be a lot of kind of one 0:16:52.280 --> 0:16:56.640 shot bills with different constituencies that might not yet be 0:16:56.720 --> 0:16:59.440 getting paid and all aret all that. But you know, 0:16:59.520 --> 0:17:03.440 underneath that, what that shows is a kind of growing 0:17:03.480 --> 0:17:08.240 disquiet on the Democratic side with the shutdown strategy. Generally 0:17:08.440 --> 0:17:10.880 they're willing to give their leadership to be the benefit 0:17:10.920 --> 0:17:13.400 of the doubt, but that's also wearing kind of thin. 0:17:14.040 --> 0:17:17.080 We also have elections up coming November fourth, a big 0:17:17.080 --> 0:17:19.040 one with the New York City mayor race and also 0:17:19.119 --> 0:17:22.960 governor elections and Prop fifty in California. Is that going 0:17:23.000 --> 0:17:26.000 to affect how certain Senators show up to vote? Maybe 0:17:26.320 --> 0:17:27.879 after the elections take place. 0:17:28.680 --> 0:17:32.520 Well, I think it affects how the senators make known 0:17:32.560 --> 0:17:37.760 to their leadership the willingness to continue I've been telling 0:17:37.760 --> 0:17:40.080 people for a couple of weeks now. This was not 0:17:40.280 --> 0:17:43.560 a political opportunity Republicans sought, but it's one that they 0:17:43.760 --> 0:17:47.600 now sees what they want. What they want on next 0:17:47.640 --> 0:17:50.719 week in November is to be able to say to 0:17:50.800 --> 0:17:54.560 the public, Look, the Democratic Party is now the party 0:17:54.600 --> 0:17:58.520 of Mamdani, the new New York City mayor, and you 0:17:58.640 --> 0:18:03.800 have being report publicans here, you have hokl and Jefferies 0:18:03.840 --> 0:18:06.040 and schum were all kind of bowing to him, and that, 0:18:06.200 --> 0:18:09.320 you know, that's the future of the Democratic Party. And 0:18:09.359 --> 0:18:12.720 then they also want to point out that the balloon 0:18:13.560 --> 0:18:19.120 likely gets let out of the Democratic Centrists in Virginia 0:18:19.160 --> 0:18:21.600 and New Jersey. It's a little bit too much for 0:18:21.640 --> 0:18:26.000 them to hope that the Republicans win in either case. 0:18:26.320 --> 0:18:28.400 But what they will be able to say is, look, 0:18:28.520 --> 0:18:31.919 you know the uh these people barely squeak through in 0:18:32.000 --> 0:18:34.439 years where they should have done much better and they haven't. 0:18:34.960 --> 0:18:36.880 So you know, the balloon of the ears out of that. 0:18:36.880 --> 0:18:39.320 Particular balloon, and what you got is kind of the 0:18:39.320 --> 0:18:43.040 Mom Donnie Party. And I think folks, frankly in midtown 0:18:43.080 --> 0:18:47.040 Manhattan underestimate just how how powerful a message that is 0:18:47.080 --> 0:18:49.000 in the broader the broader public. 0:18:49.240 --> 0:18:52.560 How much does the shutdown really play into local elections 0:18:52.600 --> 0:18:52.920 like that. 0:18:54.600 --> 0:18:58.760 Not much at all, really, there is you know, more 0:18:58.800 --> 0:19:01.679 in Virginia than in New Jersey because you have a 0:19:01.840 --> 0:19:05.240 contingent in northern Virginia. I mean, the Virginia's turned a 0:19:05.280 --> 0:19:07.399 purple state, but it has turned into a tale of 0:19:07.400 --> 0:19:07.960 two states. 0:19:08.000 --> 0:19:09.720 If you're in northern Virginia. 0:19:09.359 --> 0:19:15.440 You're in heavy government employee territory, and outside of Northern 0:19:15.520 --> 0:19:19.480 Virginia you're not. But Northern Virginians are already by and 0:19:19.600 --> 0:19:23.000 large heavily Democratic and motivated to vote for the Democrat 0:19:23.040 --> 0:19:25.120 span Burger anyway, So I don't know that it makes 0:19:25.160 --> 0:19:28.720 a huge difference otherwise, although they're trying to try to 0:19:28.760 --> 0:19:31.720 pump up less so own New Jersey Terry. 0:19:31.720 --> 0:19:33.840 I'm wondering what you think of Congress being shut down 0:19:33.840 --> 0:19:36.480 at the Congress hasn't come back to the table so 0:19:36.640 --> 0:19:39.960 far for another vote since I believe September nineteenth, And 0:19:40.200 --> 0:19:44.600 this has been a strategy for Majority House Speaker Mike Johnson, 0:19:44.640 --> 0:19:46.520 where he said, look, it's up to the Senate. The 0:19:46.520 --> 0:19:50.360 Senate needs to take action, then Congress can get behind 0:19:50.720 --> 0:19:52.400 what they do. Do you think that that has been 0:19:52.440 --> 0:19:56.000 a prudent strategy or one that has really diminished the 0:19:56.080 --> 0:19:59.359 executive branch of the House of Representatives. 0:20:00.040 --> 0:20:01.560 Oh, it's a very prudent strategy. 0:20:01.600 --> 0:20:03.440 You know, I know, I'm aware of the New York 0:20:03.440 --> 0:20:06.600 Times thinks it's not, but by and large it is. 0:20:06.640 --> 0:20:09.480 You know, he's you know, he's got to herd cats 0:20:09.520 --> 0:20:13.160 every day Johnson does. And you know, giving the cats 0:20:13.160 --> 0:20:16.359 a playpen in Washington well, with a lot of microphones 0:20:16.400 --> 0:20:19.679