Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us
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Speaker 2: We welcome to the Wednesday edition of Sound On. I
Speaker 2: know it feels maybe like it should be Friday by now.
Speaker 2: We've packed a lot into this week. They actually passed
Speaker 2: a bill, it really happened in the House of Representatives
Speaker 2: late yesterday, a stopgap measure to keep the government from
Speaker 2: shutting down this week.
Speaker 3: On this vote, the asi A three thirty six.
Speaker 2: Then as are ninety five two thirds being in the Affirmative,
Speaker 2: the rules are suspended.
Speaker 3: The bill is passed, and without objection the motion to reconsider,
Speaker 3: so lay it on the table.
Speaker 2: Yes, dare to dream this will keep the government running,
Speaker 2: by the way, for well weeks in the next year.
Speaker 2: This is the lattered cr we talked about. And by
Speaker 2: the way, I'm assuming this gets passed by the Senate.
Speaker 2: That does appear to be the case. Senator Chuck Schumer
Speaker 2: just a short time ago, filing kloture on the Senate floor.
Speaker 4: I moved to proceed Calendar two forty eight HR sixty
Speaker 4: three sixty three Clark.
Speaker 5: Mission to proceed to HR sixty three sixty three and
Speaker 5: Act making further continuing appropriations for fiscal year twenty twenty
Speaker 5: four and for other purposes.
Speaker 4: I send a quote your motion to the desk.
Speaker 2: Ah, So, I guess this is really going to happen.
Speaker 2: The Senate signing off on what the House did. Remember,
Speaker 2: they had their own cr in the Senate didn't look
Speaker 2: exactly like the one in the House. But there's something
Speaker 2: called reality here in the calendar, and this is the
Speaker 2: one way to get it done in time for Friday.
Speaker 2: We talked about this late yesterday on Bloomberg TV with
Speaker 2: Senator Mark Warner, the Democrat from Virginia. Not a fan
Speaker 2: of the process, not a fan of the ladder.
Speaker 3: Remember the ladder. You get four bills.
Speaker 2: Expiring in January and then the other eight in February.
Speaker 2: But he says, you know, the grown ups need to
Speaker 2: do something here.
Speaker 6: The process being crummy. Does that mean I'm going to,
Speaker 6: you know, vote to shut down the government over No.
Speaker 6: I think I got to, you know, we got to
Speaker 6: be adults. I'm unlike some of the crowd in the House.
Speaker 6: And if it comes over and it longs. It's clean
Speaker 6: and there's not any other you know, add ons, poison pills,
Speaker 6: funny business. I think the overwhelming majority of us will support.
Speaker 2: This funny business. We'll see about that. In a conversation
Speaker 2: right now with Jonathan Tamari from Bloomberg Government Congress reporter.
Speaker 2: This is interesting, Jonathan, welcome back. It sounds to me
Speaker 2: like the lawmakers all left town and left you up
Speaker 2: there alone.
Speaker 3: Is the Senate going to move on this today?
Speaker 1: Yeah?
Speaker 7: I mean you mentioned that it feels like Friday, and
Speaker 7: it certainly does feel like Friday and Congress because everybody
Speaker 7: is getting out of town and trying to wrap things up.
Speaker 7: The Senate is looking likely like they're going to try
Speaker 7: to move this today and basically wrap up their work,
Speaker 7: fund the government and every send everybody home until after Thanksgiving.
Speaker 2: How quickly can they get this done? This talk about
Speaker 2: a vote today, Jonathan?
Speaker 3: Is that real?
Speaker 1: There is?
Speaker 7: There's definitely an effort underway to get that. Senators on
Speaker 7: both parties sound pretty optimistic that they'll get there. As
Speaker 7: you know, with the Senate, everything by design moves very
Speaker 7: slowly unless you get unanimous consent, in which case things
Speaker 7: can suddenly move very fast. So my impression is that
Speaker 7: they're working on getting that consent right now. Typically senators
Speaker 7: don't like to, you know, install each other's holiday plans,
Speaker 7: so odds are history says they'll get there eventually and
Speaker 7: get this vote and everybody can get home and out
Speaker 7: of Washington later today. It's not tomorrow, but it looks
Speaker 7: likely like today they'll.
Speaker 3: Get it done.
Speaker 2: Well, you mentioned the holidays. Uh, it does seem that
Speaker 2: this was just an effort to save the holidays, save Thanksgiving, Christmas,
Speaker 2: and Hanukah for the lawmakers because everyone's talking about a
Speaker 2: shutdown again in January. We simply prolonged the inevitable here, right, we.
Speaker 7: Do prolong the inevitable, But I think it lowers the
Speaker 7: political stakes a little bit by moving it. As you
Speaker 7: point out, there's a holiday coming up next week, everybody's
Speaker 7: going to be traveling. Nobody wants to deal with a
Speaker 7: shutdown in the middle of all of that, And no
Speaker 7: matter who is blamed for a shutdown, I think everybody
Speaker 7: would end up absorbing some negative impressions from that. Joe Biden,
Speaker 7: Republicans in the House, Democrats in the Senate could disrupt
Speaker 7: the economy at a time when people are supposedly going
Speaker 7: out shopping for the holiday season. Just nobody wanted to
Speaker 7: deal with that, and just on a human level, I
Speaker 7: don't think lawmakers want their holidays basically held hostage by this,
Speaker 7: So they push it to January and February. They're still
Speaker 7: going to have the same confrontation, but it'll at least
Speaker 7: be without this holiday pressure. That kind of often leaves people,
Speaker 7: I think, to accept some deals that they might not
Speaker 7: under other circumstances.
Speaker 2: Jonathan TOMORRII with us from Bloomberg Government. Is there a
Speaker 2: foregone thought then? I mean, am I projecting here that
Speaker 2: the government is likely to shut down?
Speaker 3: Stakes?
Speaker 2: Maybe lower here, but we're nowhere near agreement, Jonathan. A
Speaker 2: little while ago they couldn't even get a procedural vote
Speaker 2: on a spending bill on the floor of the House.
Speaker 2: Once again, do we have any reason believe that we
Speaker 2: will avoid a shut down next year?
Speaker 7: Well, there's gonna be, yeah, as you point out, there's
Speaker 7: still a lot of work to be done. They have
Speaker 7: to Eventually, they keep passing these short term bills, Eventually
Speaker 7: they've got to pass a long term spending bill, and
Speaker 7: both chambers are struggling to get that done. In the House,
Speaker 7: you've got Republicans fighting Republicans over what those spending bills
Speaker 7: should look like from the center and from the far right.
Speaker 7: In the Senate, you know, everything's got to be bipartisan,
Speaker 7: and so far it's been a bipartisan process, but a
Speaker 7: very slow moving process. So we'll see them both. I
Speaker 7: think after Thanksgiving, try to advance those spending bills and
Speaker 7: keee up those January negotiations. Each side will kind of
Speaker 7: lay down a marker in December, they hope, and then
Speaker 7: negotiate in January. But if they can't pass anything, they
Speaker 7: don't have anything to negotiate over. We'll see if the
Speaker 7: politics change at that point in time. There's a lot
Speaker 7: of conservatives very angry with the new speaker over this
Speaker 7: short term spending bill, and we'll see if that means
Speaker 7: that he draws drives a harder bargain next time around.
Speaker 2: I want to ask you lastly, Jonathan, about the work
Speaker 2: left to be done here, and it includes funding for
Speaker 2: Israel and Ukraine. I know the House pass to standalone
Speaker 2: Israel funding bill, but that apparently is not going to
Speaker 2: be taken up in the Senate, and the President's supplemental
Speaker 2: request including both plus Taiwan and border security appears to
Speaker 2: be on ice. Are we going to be talking about
Speaker 2: this next year when Ukraine tells us that it's out
Speaker 2: of money.
Speaker 7: There's a hope among Senators at least that they'll be
Speaker 7: able to put all these things together by the end
Speaker 7: of the year. Border Security, Israel, Ukraine. You know, there's
Speaker 7: bipartisan support for Israel Ukraine. There's some skepticism from Republicans,
Speaker 7: border security, there's some skepticism from Democrats. But the idea
Speaker 7: is that there's a critical mass that if you put
Speaker 7: them all together, you can get a critical mass in
Speaker 7: both chambers to support it. It's one where it feels
Speaker 7: like there's a pathway to get it done, and we
Speaker 7: just need to find out kind of the right balance
Speaker 7: of all the pieces. So that's something they hope to
Speaker 7: get done. Later this year. They have to pass the
Speaker 7: Defence Authorization Bill. It could possibly be attached to that,
Speaker 7: but that I think will be one of the big
Speaker 7: things to watch when they're back from Thanksgiving.
Speaker 2: True enough, Jonathan, thank you so much for the up day.
Speaker 2: Good luck getting everybody out of here on top. Jonathan
Speaker 2: to Mario Bloomberg, government. To his point, House members are
Speaker 2: already bailing. There's a line to get to the airport.
Speaker 2: I bet that exit off three ninety five looking pretty
Speaker 2: ugly right now, can.
Speaker 3: We get over the bridge? The Senate will be next.
Speaker 2: We'll see if they get this done today, but even
Speaker 2: if they do, Israel and Ukraine are still left up
Speaker 2: in the air. And that's where we begin our conversation
Speaker 2: with the ambassador. He's chair of the Middle East Program
Speaker 2: at the Wilson Center, James Jeffrey, former Ambassador to Iraq
Speaker 2: and Turkey. It's great to have you back with us, sir,
Speaker 2: and I appreciate your joining us here in the throes
Speaker 2: of debate in Washington. How important is it going to
Speaker 2: be to start with this matter of funding for the
Speaker 2: Senate to move on Israel and Ukraine before the end
Speaker 2: of this year, so this does not slip away.
Speaker 8: It's very, very critical for both countries, and they're both
Speaker 8: part of the same fight, two democratic states being attacked
Speaker 8: by the enemies of if you will, the Global Uta.
Speaker 8: So I see them as the same package. Many in
Speaker 8: the Senate see that there are some in the House
Speaker 8: of both on the left and the right, that are
Speaker 8: doing nitpicking about this, but I'm very confident this is
Speaker 8: going to work. We should be all encouraged by what
Speaker 8: the House of Representatives has done this week, a little
Speaker 8: bit of a return to sanity. I think this is
Speaker 8: going to carry over into these other things as well.
Speaker 8: I'm pretty upbeat.
Speaker 2: You're upbeat just to see something move, and so this
Speaker 2: is a story of momentum.
Speaker 8: Is that what you mean exactly, and recognition that you
Speaker 8: have to do deals and that if you're the scene
Speaker 8: as the one who's blocking the deal, it's going to
Speaker 8: hurt you on election day. And I think some of
Speaker 8: the Republicans felt that that may be the one explanation
Speaker 8: for why they didn't do as well as they had
Speaker 8: thought in the November elections.
Speaker 2: We have a fascinating story on the Bloomberg terminal today
Speaker 2: from our Pentagon reporter Tony Capasi is going to join
Speaker 2: us a little bit later, Ambassador about the Pentagon not
Speaker 2: waiting for a funding measure to pass. In fact, it
Speaker 2: appears the Pentagon has quite a bit to work with
Speaker 2: here when it comes specifically to Israel ramping up aid,
Speaker 2: delivering on requests that include more laser guided missiles for
Speaker 2: apache gunships as well as one hundred and fifty five
Speaker 2: millimeters shells, night vision devices, bunker buster munitions, new army vehicles,
Speaker 2: the new hum v's, even some drones, the Switchblade drones
Speaker 2: that we apparently don't even have. Is this just coming
Speaker 2: out of our inventories. In another case, Ukraine is returning
Speaker 2: weapons that were donated to Israel. It sounds like they're
Speaker 2: getting a lot already.
Speaker 3: Is what Israel?
Speaker 8: It is what Israel needs, particularly the bunker busters and
Speaker 8: the drones. Some of it's coming out of inventories. Some
Speaker 8: of it is the stuff that we have in the
Speaker 8: pipeline that will be replaced. This is risk, but it
Speaker 8: is low risk at this time. The point is we
Speaker 8: are defending and Americans need to know this. We are
Speaker 8: defending these United States, We're defending Taiwan, We're defending the
Speaker 8: whole global UTA by helping the Israelis in the Ukrainians
Speaker 8: fight this fight. This is money well spent. We'll find
Speaker 8: the weapons, we'll find the ways to fund it. If necessary.
Speaker 8: With Ukraine, we can get the Europeans to buy our
Speaker 8: stuff and give it to them. We're going to continue
Speaker 8: doing this. I'm absolutely convinced.
Speaker 2: Spending time with former ambassador James Jeffrey here on Bloomberg
Speaker 2: sound On. You might have seen this letter, Ambassador. I
Speaker 2: want to your thoughts about this. More than thirty relief
Speaker 2: organizations sent a letter to the Secretary of Defense, Lloyd Austin,
Speaker 2: urging him not to send one of the items that
Speaker 2: I just mentioned. And it's not the high tech drones
Speaker 2: or the laser guided missiles. It's the it's the the
Speaker 2: one hundred and fifty five millimeters shells. It's the rounds
Speaker 2: that are indiscriminate and might result in more civilian loss
Speaker 2: of life.
Speaker 3: How do you respond to that?
Speaker 8: In the hands of the Israelis who know how to
Speaker 8: call in artillery, it's not indiscriminate. It has a circular
Speaker 8: era probability of the more modern ones of just a
Speaker 8: handful of meters. Now the blast radius can be over
Speaker 8: fifty meters. That's true, you get strattenal flying around, but
Speaker 8: this isn't going to inadvertently kill hundreds of people and
Speaker 8: the Israelis needed and those aid agencies obviously are doing
Speaker 8: heroic work under very difficult circumstances in Gaza, but they
Speaker 8: cannot have a veto over a military operation that is
Speaker 8: critical for our ally Israel and frankly critical for US.
Speaker 2: It appears that the IDF Israeli military is moving into
Speaker 2: the hospital that we've been hearing so much about in Gaza.
Speaker 2: It's been suggested by some that there might in fact
Speaker 2: be Hamas militants below the hospital. How dangerous is this
Speaker 2: going to get? As israel Is urged to slow this
Speaker 2: down by the White House to show restraint, to look
Speaker 2: out for civilians when you've got potentially militants working underneath
Speaker 2: a hospital, Ambassador.
Speaker 8: Everything is dangerous in Gaza for both It'sraeli troops, for
Speaker 8: civilians and fortunately for hamasris taking heavy losses. The Israelis
Speaker 8: know what they are doing. They will simultaneously clean out
Speaker 8: the hospital and stop moving underneath it while delivering, as
Speaker 8: we've already seen, incubators, water, other medical supplies to the hospitale.
Speaker 8: They're not going to shoot innocent people in the hospital.
Speaker 8: They haven't done that deliberately at any point in this campaign.
Speaker 2: I have to ask you about what's happening in Ukraine,
Speaker 2: as we obviously are walking into winter here soon. As
Speaker 2: this debate floats in Washington about funding Ukraine, and you
Speaker 2: hear more Republican voices specifically in the House say not
Speaker 2: another dollar. Does that in bolden Vladimir Putin to do
Speaker 2: something stupid, to do something, for instance, around the holidays,
Speaker 2: maybe to target civilians, maybe to start sending missiles into
Speaker 2: Kiev again, to try to wear down Americans view of
Speaker 2: Ukraine's potential to win.
Speaker 8: No, for two reasons. First of all, he knows that
Speaker 8: if he starts doing that, he's going to create more resistance,
Speaker 8: including among Republicans in the US House. Secondly, Vladimir Putin's
Speaker 8: doing about everything he can shout of nuclear weapons, and
Speaker 8: he's not going to use those in this fight. For him,
Speaker 8: it's all out. Nonetheless, he will be encouraged psychologically by
Speaker 8: this action if we don't get the weapons and the funding,
Speaker 8: and he'll be encouraged by the presidential campaign.
Speaker 2: Ambassador, I know you stopped a very busy day for us,
Speaker 2: and I want to thank you for coming back to
Speaker 2: see us once again. James Jeffrey with us live on
Speaker 2: Bloomberg Radio Now Share the Middle East Program at the
Speaker 2: Wilson Center. Of course, he's spent a career doing this,
Speaker 2: not only in his work as an ambassador, has worked
Speaker 2: through the States Department. He was also the Special Presidential
Speaker 2: Envoy for the Global Coalition to defeat isis.
Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the
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Speaker 2: I'm Jill Matthew in Washington with Kaylee. And if you
Speaker 2: were on YouTube a little while ago, you already know
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Speaker 2: the interwebs here on sound On, and you can join
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Speaker 9: I'm here.
Speaker 3: There she is now, Kaylee. Lin's nice to see you.
Speaker 2: Kaylee joined us every day for the second hour of
Speaker 2: this conversation. And we've got a lot to talk about.
Speaker 2: You're John Tucker talking about GM. Yeah.
Speaker 3: Are we worried about this contract?
Speaker 9: Yeah? Well, when we think about the deal that was signed,
Speaker 9: which of course includes the big wage increases a lot
Speaker 9: of other concessions to the union that the union wanted,
Speaker 9: it was ever a guarantee that the union was going
Speaker 9: to ratify it. It was a deal in principle, essentially
Speaker 9: a tentative deal, and we know that at least some
Speaker 9: workers at some of these specific gm plants don't seem
Speaker 9: to be as forward as maybe you would have thought.
Speaker 3: Yeah, this is interesting.
Speaker 2: I thought Sean Fain had a sense of the Yeah,
Speaker 2: rank and file here, but maybe this is more complicated
Speaker 2: than we thought. It's something we talked a lot about though,
Speaker 2: during the strike, and I don't want to drop this bead.
Speaker 2: As long as this is still a story, We'll keep
Speaker 2: you posted on that use here in Washington. I was
Speaker 2: joking earlier you can't get off the exit on three
Speaker 2: ninety five to National Airport because the entire House of
Speaker 2: Representatives is already in line getting out of town in
Speaker 2: front of you. The Senate still has some work to do.
Speaker 2: It looks like the Senate will pass this bill that
Speaker 2: cleared the House late yesterday that'll fund the government into January.
Speaker 3: Do you hear Chuck Schumer this morning? He's going for it.
Speaker 2: This is the Senate Majority Leader filing kloture on the floor,
Speaker 2: the procedural vote that would bring us to the actual funding.
Speaker 4: We moved to proceed to calendar two forty eight HR
Speaker 4: sixty three sixty three Clarkport.
Speaker 5: Motion to proceed to HR sixty three sixty three and
Speaker 5: Act making further Continuing Appropriations for Fiscal Year twenty twenty
Speaker 5: four and for other purposes.
Speaker 4: I send a quote your motion to the desk.
Speaker 2: Send it to the desk, Kaylee lines. That means it
Speaker 2: could happen as soon as today, by the way, Yeah,
Speaker 2: well he could be like another line at the airport tonight.
Speaker 8: Yeah.
Speaker 9: They want to get this done asap. And something tells
Speaker 9: me the House getting to go home until November twenty
Speaker 9: eighth might fire up some senator who also would like
Speaker 9: to get on their own airplanes, trains, automobiles. However it
Speaker 9: is they're getting home for the holiday.
Speaker 2: It's Wednesday today, Yes, a week from today, still won't
Speaker 2: even be Thanksgiving.
Speaker 9: Yeah, well you know how this works.
Speaker 3: Congress gets Yeah, I want.
Speaker 9: That place extended holiday weeks. I want that would be
Speaker 9: nice if we could do that too.
Speaker 3: But Mark Warner told us last night he's on board.
Speaker 2: They don't want to shut down the government even though
Speaker 2: they don't like the process. So then, of course we're
Speaker 2: not sure exactly what's going to happen in terms of
Speaker 2: the vote count.
Speaker 3: But Wall Street seems.
Speaker 2: I guess pleased, not that they were ever freaked out
Speaker 2: to begin with. I think this is like boy who
Speaker 2: cried wolf from Washington to Wall Street.
Speaker 9: Yeah, I mean Wall Street has lived through government shutdowns before.
Speaker 9: I think, by and large, the lesson we have learned
Speaker 9: is financial markets are more concerned about debt sealing fights
Speaker 9: and potential. That's cool on the US debt versus government shutdowns,
Speaker 9: which have a relatively limited economic impact. Though the economic
Speaker 9: impact is still there, necessarily something markets get overly concerned about.
Speaker 9: And at the very least, the market probably is looking
Speaker 9: at what happened in the last twenty four hours and saying, Okay,
Speaker 9: we can at least breathe until January nineteenth. Maybe we'll
Speaker 9: start getting freaked out a little bit before that.
Speaker 2: We will, because three days before that is I yeah,
Speaker 2: the Iowa. You better rest up over the holidays. I'll
Speaker 2: bet you. Libby is I told you Libby Cantrell was
Speaker 2: coming in. She's with us now, the head of US
Speaker 2: public policy at PIMCO. On the line, Libby, I saw
Speaker 2: your note to clients, and I guess we're feeling pretty
Speaker 2: good about things here. But nothing's changed, has it? Don't
Speaker 2: we just shut down in January?
Speaker 10: Yeah? Good asking you in Joe. It basically this is
Speaker 10: Congress has done what they are very good at, which
Speaker 10: is just kicking the can down the road. As you know,
Speaker 10: there are now two deadlines. Lead it to Congress to
Speaker 10: overcomplicate something that should be more simple. Two funding deadlines
Speaker 10: January nineteenth, as you just mentioned, and that I'll so
Speaker 10: February second, which happens to be Groundhog Day. Maybe wittingly
Speaker 10: or not, they made that deadline, and it just sounds like.
Speaker 2: From why is that real February second is did they
Speaker 2: do that on purpose?
Speaker 10: I don't know. I mean maybe maybe it's a wink
Speaker 10: and a nod, But I think the most important thing here,
Speaker 10: and you're right, I mean markets, markets have sort of
Speaker 10: shaken this off for the most part. I think there
Speaker 10: was more focus at the end of September, I think
Speaker 10: than there was just the assumption that this would get
Speaker 10: resolved this week, which of course it looks very likely too.
Speaker 10: You know, we would be surprised if we didn't see
Speaker 10: a big bipartisan vote in the Senate and then President
Speaker 10: Biden quickly signing this into law, but in a big
Speaker 10: butt here. We will have to revisit this come January nineteenth.
Speaker 10: And it looks like while the House Freedom Caucus, the
Speaker 10: right flank of the House Republican Conference, is giving Secer
Speaker 10: Johnson a break for now, they will not come January,
Speaker 10: they are insisting that there will there there there has
Speaker 10: to be spending cuts or else. You know, ship Roy
Speaker 10: has indicated. Representative Ship Roy, who is part of the
Speaker 10: House Freedom CROCSSES, has has indicated this is strike one
Speaker 10: and strike two for Speaker Johnson. And so so it
Speaker 10: does seem that the stakes will be much higher as
Speaker 10: we go into January. And in terms of the markets,
Speaker 10: I mean, again, the markets haven't really been focused on us. However,
Speaker 10: you could, you know, you could argue that some of
Speaker 10: this increase in the term premium, basically the premium that
Speaker 10: investors have to pay as sorry, that the US government
Speaker 10: has to pay investors in order to take on their debt,
Speaker 10: maybe has something to do with just questions around just
Speaker 10: you know, functioning and governance in Washington. But it's difficult
Speaker 10: to know to sort of disentangle all the reasons for
Speaker 10: why the term premium had increased over over the last
Speaker 10: six weeks or so.
Speaker 9: Yeah, well, if you ask Treasury Secretary Jennet Yellen, she
Speaker 9: doesn't think that has anything to do with the debt
Speaker 9: and deafest. It's just the idea that the economy is
Speaker 9: really strong and rates are going to stay higher for longer.
Speaker 9: So I guess, Libby, it depends on who you ask.
Speaker 9: To the point you were just making though about maybe
Speaker 9: the House Freedom Caucus, some of these ultra hardline conservatives
Speaker 9: aren't going to be giving Mike Johnson as much of
Speaker 9: a break come early next year. We also heard from
Speaker 9: Congressman Bob Good of Virginia. He was speaking to reporters
Speaker 9: earlier and he said, the Speaker has said he wouldn't
Speaker 9: do another CR. We're going to hold him to that. So, Libby,
Speaker 9: with the passage of a clean CR, now, does it
Speaker 9: only intensify the idea that there will be a shutdown
Speaker 9: next year because Speaker Johnson is going to have played
Speaker 9: that card already and not going to have an option
Speaker 9: between shutdown or spending cuts that Democrats won't go for.
Speaker 10: Yeah, I think that's exactly right, Kaylee. I think that
Speaker 10: you know the release valve that both Speaker McCarthy and
Speaker 10: now Speaker Johnson have used and it will not be
Speaker 10: available to Speaker Johnson if it sounds like if he
Speaker 10: wants to keep his speakership that it sounds like that
Speaker 10: is what is the sort of implicit you know threat
Speaker 10: here that come January nineteenth, if the funding bills for
Speaker 10: those that sort of that part of the government that
Speaker 10: that deadline applies to, if that hasn't passed, then folks,
Speaker 10: you know, Will Will will threaten his speakership if he
Speaker 10: has to use another cr. The thing is that practically speaking,
Speaker 10: you already just saw this today in the House, and
Speaker 10: this is sort of noise, I think, to investors, but
Speaker 10: it's sort of important in Washington is that the appropriations
Speaker 10: bills have not been able to pass, even on a
Speaker 10: partisan basis. I think this is kind of the big
Speaker 10: takeaway and sort of revealing in terms of the Republican
Speaker 10: caucuss that that there are obviously lots of different factions
Speaker 10: they've called the Five Families on the Hill within the
Speaker 10: Republican Conference, and they're not necessarily getting along very well
Speaker 10: right now, and that does not necessarily pretend well to
Speaker 10: meeting that January nineteenth deadline of passing appropriations bills, even
Speaker 10: if it's just relying on Republicans. So I think the
Speaker 10: bottom line here is the stakes seem higher going into January.
Speaker 10: The chances seem higher of a shutdown honestly in January.
Speaker 10: But as we've just been talking about, does this really
Speaker 10: matter to the market. Probably not unless it's sustained shutdown
Speaker 10: and then there's another shutdown deadline on February second, So
Speaker 10: the flill government shutdown, then then I do think it
Speaker 10: could your markets will be taking notice.
Speaker 2: We're talking with Libby Cantrell at Pimco on Bloomberg as
Speaker 2: the president. Today, Libby sits down with Shijimping, the president
Speaker 2: of China here in the US, for the first time
Speaker 2: in six years. They're sitting down in San Francisco for
Speaker 2: what is described as a high stakes meeting based entirely
Speaker 2: on our lack of relationship over the last nine to
Speaker 2: twelve months here. Then again, expectations are pretty low, and
Speaker 2: we keep hearing that this is a market positive.
Speaker 3: Just the fact that they're sitting down together. Is that
Speaker 3: how you see it?
Speaker 10: I think that's exactly how we see it.
Speaker 8: Joe.
Speaker 10: This is the first time that you president, she has
Speaker 10: met with a US president on US soil since twenty seventeen,
Speaker 10: and this is, you know, the first time where both
Speaker 10: leaders are coming together with I think, you know, at
Speaker 10: least their hands open a bit more than what they
Speaker 10: have during during Biden Biden's administration. So I think the
Speaker 10: meeting in itself is the deliverable. The meeting is what
Speaker 10: you know, folks on both sides were trying to deliver.
Speaker 10: I think outside of that, we don't expect there to
Speaker 10: certainly be any kind of grand bargain on sort of
Speaker 10: the economic tool state craft, if you will, in terms
Speaker 10: of rolling back tariffs or anything announced on expert controls
Speaker 10: or what have you from the US side. I do
Speaker 10: think though, that we know one area of potential agreement
Speaker 10: and that could come out in an announcement could be
Speaker 10: the reinstatement of military to military communications, and that is
Speaker 10: something that certainly the US administration is prioritizing. I mean,
Speaker 10: just remember that even during the Cold War, the US
Speaker 10: had principles of principal level channels of communication open with
Speaker 10: military folks and with the USSR. So during the Cold War,
Speaker 10: so the fact that we haven't had that with China
Speaker 10: since August of twenty twenty two. Of course, that's when
Speaker 10: Speaker Pelosi went over to Taiwan and then the China
Speaker 10: kind of cut us off practically for all intensive purposes.
Speaker 10: So I do think that is that I know that
Speaker 10: the priority of the US administration, I think for good
Speaker 10: reason from a national security perspective, and so I would
Speaker 10: not be surprised if we saw an announcement around that.
Speaker 10: But outside of that, I doubt we know we see
Speaker 10: much coming out of this meeting. Again, the meeting itself is.
Speaker 9: Deliverable, and of course Libby, the meeting with Biden isn't
Speaker 9: the only meeting that Chijin Ping is going to have.
Speaker 9: He's dining tonight with a bunch of executives of big companies.
Speaker 9: We don't know exactly who is on that invitation list
Speaker 9: for dinner, but you know, the likes of Jane Frasier,
Speaker 9: Elon Musk, Satya Nadella. They're all going to be at
Speaker 9: the CEO summit that's happening on the sidelines of APEX.
Speaker 9: So it'll be interesting to see what the business oriented
Speaker 9: conversation is. Because we were having a conversation with Gerard
Speaker 9: de Pippo, who's one of our geoeconomics analysts here at
Speaker 9: Bloomberg Economics last night, and he basically told us, Look,
Speaker 9: whatever the messaging from the bidy of administration is about
Speaker 9: whether or not there is decoupling they're pushing for with China, Ultimately,
Speaker 9: these decisions, a lot of them come down to private actors,
Speaker 9: what businesses, and what people do, and Lippy, aren't we
Speaker 9: already kind of seeing that?
Speaker 10: Yeah, that's an excellent point. I do think it is.
Speaker 10: It's quite a tell the President she is meeting with
Speaker 10: these US based CEOs, and I think if you look
Speaker 10: at the most recent FDI, the foreign direct Investment data
Speaker 10: in China, it is sort of dropped off a cliff
Speaker 10: in many ways, and so I think that it makes
Speaker 10: sense that President She is trying to, you know, reaffirm
Speaker 10: or reassure in many ways that China is still open
Speaker 10: for business, that it is still open to US investment.
Speaker 10: But you make an excellent point that regardless of what
Speaker 10: the public policy is around here, you know that the
Speaker 10: sort of the political risk of investing in China has
Speaker 10: certainly increased from the US's perspective. We see that with
Speaker 10: some of our clients, you know, based in the US.
Speaker 10: And then of course there's some economic headwinds, as we
Speaker 10: all know in China. So it's dovetailing at a time
Speaker 10: where investment may not be even that attractive, you know,
Speaker 10: going in into China. But again, I think this is
Speaker 10: is this is sort of a revealed preference, if you will,
Speaker 10: on President Sheese part where he is you know, showing
Speaker 10: that he does want to reassure us and US business
Speaker 10: that you know, China is still is still an attractive
Speaker 10: place to invest. Whether it resonates, you know, it's a.
Speaker 3: Question, sure, what do you do? You do you have
Speaker 3: a feel for that, Libby.
Speaker 2: I just wonder if this is the new normal here,
Speaker 2: if there's going to be some thaw or you know,
Speaker 2: a motivator to start investing in China again after so
Speaker 2: many people got burned.
Speaker 10: Yeah, and you saw you know today that the Federal
Speaker 10: Thrift Retirement Plan is going to be moving away from
Speaker 10: some of their Chinese investments. Again, there have been lots
Speaker 10: of you know, US space pension plans, the big allocators
Speaker 10: of money that are not necessarily divesting, but they are
Speaker 10: not necessarily making new investments in in China. And I
Speaker 10: do think this is sort of the where the intersection
Speaker 10: of you know, investing and policy is very acute or
Speaker 10: policy or political risk. You know, a lot of those folks,
Speaker 10: a lot of those allocators just think that, you know,
Speaker 10: the question about obviously the economic attractiveness of China, but
Speaker 10: then also the destination, but also again just the domestic
Speaker 10: political risk and what we've seen on the Hill that
Speaker 10: the House Select Committee on China, they very much are
Speaker 10: scrutinizing capital flows from the US to China. We also
Speaker 10: have seen the Biden administration put out an executive order
Speaker 10: in August, you know, basically looking at capital flows into
Speaker 10: very specific sectors. They try to be very targeted and
Speaker 10: very surgical, but still so I just think in general,
Speaker 10: the kind of the threshold for investing if you're a
Speaker 10: US based investor, especially a big one with the headline
Speaker 10: risk has increased.
Speaker 2: We're just about out of time here, Libby, but I
Speaker 2: do appreciate your taking a swing at that question.
Speaker 3: I'm Joe Matthew and Washington.
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