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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is your weekly

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Speaker 1: Washington policy Pulse on the Balance of Power podcast. I'm

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Speaker 1: Joe Matthew. Every Monday, Bloomberg Intelligence, senior policy analyst and

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Speaker 1: friend of the show, Nathan Dean shares his weekly call

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Speaker 1: on upcoming catalysts in the nation's capital. Listen for the

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Speaker 1: most recent and relevant policy research from our team at

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Speaker 1: Bloomberg Intelligence. Now with today's installment, here's Nathan Dean.

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Speaker 2: Good morning and good afternoon everybody. Welcome again to the

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Speaker 2: Washington Policy Polse. My name is Nathan Dean. I'm a

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Speaker 2: senior policy analyst here in Washington, d C. Want to

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Speaker 2: say thank you to those of us, or sorry to

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Speaker 2: those of you who are listening to this via the

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Speaker 2: Balance of Power podcast. We always welcome your support as well.

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Speaker 2: Today is December eighth. I'm recording this at tenh two am,

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Speaker 2: and the reason why I'm time stamping this is because

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Speaker 2: we're going to have a little bit of a busy week.

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Speaker 2: I actually didn't think it was going to be all

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Speaker 2: that busy, just a lot of headlines, but I think

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Speaker 2: there's going to be some stuff here. First thing I

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Speaker 2: want to talk about is farm aid. Now, we've talked

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Speaker 2: about this in the past, about twelve billion dollars in

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Speaker 2: aid and what it means for farmers. You know, the

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Speaker 2: idea here is trade, not aid. But you know, this

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Speaker 2: package that we've been waiting for a couple of weeks

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Speaker 2: now is set to be released later today. Now, this

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Speaker 2: is going to be twelve billion dollars. It's going to

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Speaker 2: be implemented by the USDA. Last time this happened back

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Speaker 2: in twenty eighteen and twenty nineteen, there were six hundred

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Speaker 2: and forty four thousand farms that took the eight package.

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Speaker 2: They got around twenty two thousand dollars worth each. And

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Speaker 2: in our analysis, like I've said before on previous calls,

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Speaker 2: the analysis here suggests, look, it's a band aid on

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Speaker 2: something that is actually a much more bigger structural issue,

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Speaker 2: and that is due to the purchase of Chinese of

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Speaker 2: Chinese purchases of US soybeans. So what we've been telling

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Speaker 2: our clients is that you know, yes, this is going

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Speaker 2: to give a little bit of breathing room. Fortunately it

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Speaker 2: comes a little bit late. I mean the spring planting

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Speaker 2: season started in terms of negotiations started a couple of

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Speaker 2: weeks ago, so it come a little bit late. We

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Speaker 2: think it's going to be mostly use for capital expenditures

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Speaker 2: in the fourth quarter. But we are going to see,

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Speaker 2: and I think I'm fairly confident in this, we are

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Speaker 2: going to see more aid packages coming later. In twenty

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Speaker 2: twenty six House Agricultural Committee, for example, some of the

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Speaker 2: Republicans over there said that they could get up to

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Speaker 2: fifty billion dollars in aid. And we are still awaiting

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Speaker 2: a light farm bill. For those of you who are

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Speaker 2: in the agricultural sector, you probably know what I'm talking

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Speaker 2: about is that the farm bill usually is a bipartisan affair.

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Speaker 2: It hasn't passed in a long time. The farm bell

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Speaker 2: usually deals with snap benefits that was dealt with in

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Speaker 2: the one Big Beautiful bill. But the House and Senate

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Speaker 2: a committee still want to move forward with this quote

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Speaker 2: unquote light version of a farm bell. Hasn't been really

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Speaker 2: been all that movement all that much. I have a

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Speaker 2: note on it that I can talk to you further

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Speaker 2: about it. Just give me an instant Bloomberg message and

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Speaker 2: we can chat. But you know, we're anticipating a farm

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Speaker 2: bill next year. Maybe that's a little bit additional as

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Speaker 2: a vehicle for getting more aid. I also want to

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Speaker 2: talk about what's going to happen this week with the

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Speaker 2: Obamacare subsidies. So again we had brought we had my

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Speaker 2: colleague Dwayne right On a couple of weeks ago to

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Speaker 2: talk about this. But you are going to see a

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Speaker 2: vote on Wednesday, from the Senate perspective, voting on the

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Speaker 2: Democratic plan for a three year extension of these Obamacare

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Speaker 2: subsidies that expire at the end of the month. Now

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Speaker 2: that vote, that vote's gonna fail. The Republicans have already

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Speaker 2: said it's not just gonna it's not gonna happen, and

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Speaker 2: so that vote is going to fail. Now there is

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Speaker 2: another plan that's being brought out by Center Marino of

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Speaker 2: Ohio and a little bit of the Democratic senators that

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Speaker 2: would give a two year extension. But the question here

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Speaker 2: is are the Republicans even going to try and move

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Speaker 2: forward on that. I don't think the GOP strategy has

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Speaker 2: been decided. Most likely could be decided later this evening

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Speaker 2: or tomorrow maybe, But if you're listening to this on

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Speaker 2: the Balance of Power podcast, it's been announced, but as

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Speaker 2: of right now when we're recording this, there really is

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Speaker 2: no strategy here on how to deal with this on

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Speaker 2: the Republican side, And I think a lot of Republicans

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Speaker 2: are just waiting for the White House to come in

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Speaker 2: here and say this is what I want to do,

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Speaker 2: because I think if you ask most of the Republicans

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Speaker 2: on Capitol, they're not in favor of additional subsidies. And

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Speaker 2: we're just going to get into a situation where this expires.

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Speaker 2: So again, it's going to be a little bit busy

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Speaker 2: week on the headline perspective. But Dwayne's point of view

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Speaker 2: that he's put out on the terminal several times, is

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Speaker 2: that he doesn't think that there's going to be He's

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Speaker 2: the words like long odds in skeptical, and we'll see

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Speaker 2: if a deal can come together before the end of

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Speaker 2: the year. Now, Bloomberg News is also reporting this morning

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Speaker 2: that President Trump is going to sign this week in

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Speaker 2: executive order on artificial intelligence. The one rule is, President

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Speaker 2: Trump said in his truth social post this morning, one

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Speaker 2: rule to ring them all or to rule them all.

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Speaker 2: Sort of sounds like Lord of the Rings, you know,

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Speaker 2: one ring to rule them all. That's where I was

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Speaker 2: getting with this. Now I should back up here. Now,

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Speaker 2: Bloomberg Government, a couple of weeks ago got a copy

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Speaker 2: of a draft executive order. And in that executive order,

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Speaker 2: and I'm not saying this is the one that President

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Speaker 2: Trump's going to sign this week, but in that executive

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Speaker 2: order that Bloomberg got government got a copy of, it

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Speaker 2: essentially allowed the dj to sue states that pursued their

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Speaker 2: own AI regulations and their own AI laws. Now, my

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Speaker 2: colleague Matt Shttenhelm looked at it on the terminal and

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Speaker 2: Matt essentially said that if the executive order were to

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Speaker 2: be like that, the courts most likely would find the

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Speaker 2: issue with that and find the executive branches overstepping its bounds. Now,

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Speaker 2: if this executive order comes out and it's very similar

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Speaker 2: to that, Matt's point that he put on the terminal

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Speaker 2: was that you need Congress to come in and actually

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Speaker 2: develop a regulation or a standard for the national framework

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Speaker 2: for artificial intelligence. So, even if President Trump comes out

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Speaker 2: later this week and signs this executive order, look at it.

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Speaker 2: Have a call with Matt and just think, in the

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Speaker 2: back of your mind, are the courts going to be

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Speaker 2: the ones to approve this? Because Matt's looking at it

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Speaker 2: right now and Matt's sort of skeptical. Now, the one

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Speaker 2: thing that though this executive order could do is that

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Speaker 2: if the rule comes out and it's actually detailed saying

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Speaker 2: that I want the framework to look like this, this,

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Speaker 2: and this, well maybe that's a standard that we can

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Speaker 2: actually have more debate on because if you have fifty patchworks,

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Speaker 2: fifty states, different AI rules and so forth like that,

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Speaker 2: it could get a little bit messy. But if there

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Speaker 2: is this idea of what a national framework could potentially

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Speaker 2: look like, then the debate going into twenty twenty six

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Speaker 2: actually looks a little bit more favorable in terms of

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Speaker 2: getting regulation across the line. So again we'll have to

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Speaker 2: see what happens here, but right now the court's most

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Speaker 2: likely but take an issue with this depending on how

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Speaker 2: it looks. But again, stay close and Matt will always

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Speaker 2: be available for conversations if you want to have a

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Speaker 2: conversation with him. Now, I want to talk a little

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Speaker 2: bit about the Netflix Warner Brothers deal because it's actually

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Speaker 2: been fairly moving. There's I think the biggest question that

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Speaker 2: most clients on their hands saying is this kind of

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Speaker 2: passed from an anti trust perspective. Netflix and Warner Brothers

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Speaker 2: announced the deal that they would merge. Paramount announced just

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Speaker 2: about an hour ago, a hostile takeover bid. And so

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Speaker 2: I wanted to point you to Jennifer Reeve's analysis on

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Speaker 2: the terminal and we can get a copy of that

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Speaker 2: just ping me and I can send a copy of

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Speaker 2: this to you where she laid out all the issues

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Speaker 2: that antitrust regulators are going to be looking at in

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Speaker 2: terms of the Netflix Warner Brothers deal and it looks

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Speaker 2: fairly challenging from the Netflix perspective. And her point, and

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Speaker 2: this is what she just put out, is that even

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Speaker 2: if President Trump doesn't get involved, and President Trump even

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Speaker 2: just said on Truth Social Justice Morning that he's going

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Speaker 2: to be taking a look at this, you're looking at

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Speaker 2: a lengthy analysis here in a lengthy period. And her

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Speaker 2: point is the anti trust process will likely take over

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Speaker 2: a year. And that's if the DOJ challenges the deal

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Speaker 2: in court. The suit will most likely be filed about

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Speaker 2: a year from now, and then it would take another

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Speaker 2: eight to nine months for the ruling. And so even

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Speaker 2: though the companies say that they're going to close in

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Speaker 2: twelve to eighteen months, their purchase agreement also had some

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Speaker 2: language in here that suggested that it could be pushed back.

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Speaker 2: So again there's gonna be a lot of moving parts here,

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Speaker 2: a lot of charge, lots of scrutiny, if you will,

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Speaker 2: and a lot of challenges from the Netflix perspective. So

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Speaker 2: it's not going to move as quickly as I think

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Speaker 2: some people thought. Maybe nobody thought that, but at least

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Speaker 2: some people thought. A couple other smaller things just one

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Speaker 2: of the highlights. The NDAA language came out last night.

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Speaker 2: This is for those of you in the defense industry.

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Speaker 2: The House is anticipated to have a vote later this week.

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Speaker 2: Most of the provisions, I think we're pretty on par

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Speaker 2: with what we are anticipating. I call it. Wayne Sanders

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Speaker 2: is going to be having a note tomorrow on the

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Speaker 2: winners and losers of the NDAA. But again, I think

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Speaker 2: this is fairly standard, or at least the language didn't

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Speaker 2: really seem all that controversial. There was some portion of

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Speaker 2: it about, you know, biotechnologies related to China. That's something

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Speaker 2: they make it a little bit of headlines, But again

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Speaker 2: I don't think it's going to be all that controversial.

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Speaker 2: So expected the NDAA to pass later this week at

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Speaker 2: the House, then it will go to the Senate, and

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Speaker 2: then I think the Senate ultimately will pass that as well,

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Speaker 2: last two things I want to talk about. One is

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Speaker 2: you should get on Supreme Court iep a watch. You know,

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Speaker 2: this is what we've talked about many times in the past.

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Speaker 2: This is President Trump's reciprocal tariffs. You know, think of

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Speaker 2: Opiration Day. Well, the Supreme Court could rule as early

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Speaker 2: as this week on the legality of that. Hally, from

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Speaker 2: we've had on this call in the past, sixty percent

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Speaker 2: chance the Supreme Court agrees with those two lower courts

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Speaker 2: and finds those rules to be unlawful. But you know,

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Speaker 2: you should be on the watch because the earliest the

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Speaker 2: Supreme Court could rule this week probably Wednesday, I think,

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Speaker 2: you know, talking to Holly, it seems like more likely

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Speaker 2: next week would be the week if the Supreme Court

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Speaker 2: is going to rule in December. But again, you need to,

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Speaker 2: you know, put your redlines on the terminal, get them going,

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Speaker 2: because it's gonna happen fairly sooner rather than later. And

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Speaker 2: the last thing I want to do is it's outlook

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Speaker 2: season for pretty much every research analyst across the globe,

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Speaker 2: not especially including US. So I put my crypto outlook

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Speaker 2: out this morning, and there was one thing I wanted

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Speaker 2: to highlight a little bit on stable coins, because you

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Speaker 2: are going to see some movement probably before the end

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Speaker 2: of the year when it comes to stable coins. Now,

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Speaker 2: the fd I see said that they are going to

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Speaker 2: start the implementation of the Genius Act. Remember this is

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Speaker 2: the bill that gives the regulatory framework for stable coins.

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Speaker 2: The FDIC said that they were going to issue a

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Speaker 2: proposal this year, so this month on the application process

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Speaker 2: to become a bank issuer. So if you remember, you

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Speaker 2: know if you have issuers and you have non bank issuers, well,

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Speaker 2: they want to have regulatory oversight. The first idea is

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Speaker 2: how do you register with the authorities to become a

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Speaker 2: bank issuer. So this proposal will most likely come out

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Speaker 2: by the end of this year. I actually thought it

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Speaker 2: was going to be out early next year. But remember

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Speaker 2: how we've talked before, regulators love to get stuff off

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Speaker 2: their desks before they go home for the holidays. So

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Speaker 2: if this proposal does come out, we'll be able to

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Speaker 2: see how these bank issuers and non bank issuers can

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Speaker 2: register rate with the authorities to become a stable coin issuer.

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Speaker 2: Now that leads to the rest of the application framework.

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Speaker 2: What's the next proposal? Well, the next proposal is the

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Speaker 2: prudential standards proposal. Okay, how do you actually handle capital requirements?

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Speaker 2: How do you operate? What are the safety and safeguard provisions?

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Speaker 2: Is part of that. That proposal is most likely going

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Speaker 2: to be the first quarter, if not the first half

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Speaker 2: of next next year, and those two proposals aligned. Ultimately,

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Speaker 2: then it be the implementation of the Genius Act. Now,

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Speaker 2: if the FDIC and the bankers move this quickly, where

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Speaker 2: the proposal is this month, we'll just call the next

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Speaker 2: one March of twenty twenty six. You could get this

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Speaker 2: wrapped up by the end of the year, and our

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Speaker 2: stable coin framework, if you will, would be up and

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Speaker 2: operating by January first to twenty twenty seven. The other

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Speaker 2: thing I want to say in terms of the crypto

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Speaker 2: space is that we still think it's going to be

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Speaker 2: a decent chance that we are going to have Clarity

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Speaker 2: the Clarity Act or a crypto Market Structure bill passing

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Speaker 2: in the first half of next year. But just last

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Speaker 2: week the CFTC also took steps to allow spot trading

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Speaker 2: on registered exchanges within their area. Now, this is actually

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Speaker 2: very beneficial for the crypto industry. It allows them to

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Speaker 2: move forward. But from my perspective. You still need the

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Speaker 2: congressional oversight to come in here and say to actually

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Speaker 2: dot the i's and cross the t's and say this

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Speaker 2: is actually good and valid because what the CFTC here

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Speaker 2: did is that it gave these companies the ability to operate.

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Speaker 2: But our future CFTC can always come back and say, no,

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Speaker 2: we don't have this interpretation. And as a result, we're

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Speaker 2: going to walk this back, not saying it's going to happen,

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Speaker 2: but in order to get that clarity and the breath

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Speaker 2: of easing of knowing that no future CFTC is actually

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Speaker 2: going to change this, you need the Clarity Act. So

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Speaker 2: just keep that in mind when you see these additional

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Speaker 2: spot training of crypto unregistered exchanges. So with that, I'm

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Speaker 2: going to check one last time to make sure that

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Speaker 2: we don't have any questions or thoughts. We don't. I'm

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Speaker 2: going to say thank you again for listening. We really

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Speaker 2: appreciate it, and if you have any questions, feel free to.

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Speaker 1: Reach out and we'll talk son our thanks to Nathan Dean,

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Speaker 1: Bloomberg Intelligence Senior policy analyst, bringing you the latest installment

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Speaker 1: of his weekly Washington Policy Pulse. For more from bi

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Speaker 1: or to join this call live each week. You can

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Speaker 1: email Nathan at ndan at bloomberg dot net. That's n

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Speaker 1: D e A n at Bloomberg dot net and come

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Speaker 1: back to the podcast later today for the latest edition

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Speaker 1: of Balance of Power inh