WEBVTT - Bloomberg Surveillance TV: October 10th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.720 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.240 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 --> 0:00:35.840 Terminal and the Bloomberg Business app. 0:00:36.440 --> 0:00:39.960 Stocks hovering around those record at high levels. Paul Christopher 0:00:40.120 --> 0:00:43.720 of olds Vargo writing this, based on our expectations for 0:00:43.800 --> 0:00:47.400 accelerating earnings, we believe the next twelve to fifteen months 0:00:47.400 --> 0:00:50.960 will favor US equities. Paul joins us. Now, Paul, let's 0:00:50.960 --> 0:00:54.360 start there the idea that people don't like buying into 0:00:54.440 --> 0:00:57.760 valuations like this, They don't like buying into consensus. They 0:00:57.760 --> 0:01:00.280 don't like doing it in a vacuum that is just 0:01:01.080 --> 0:01:03.920 because of government dysfunction. And yet it seems like that's 0:01:03.960 --> 0:01:06.520 the only place to go. Can you explain how that 0:01:06.720 --> 0:01:09.560 is somewhat of a difficult trade yet and obvious one 0:01:09.800 --> 0:01:11.200 to many people, including yourself. 0:01:12.480 --> 0:01:15.560 Yeah, I mean, surely it is uncomfortable for all the 0:01:15.600 --> 0:01:18.319 reasons that you mentioned, But you know, you have to 0:01:18.360 --> 0:01:20.959 sort of focus here on what i'd call the big rocks. 0:01:21.440 --> 0:01:25.040 The big rocks are that artificial intelligence is a trend, 0:01:25.640 --> 0:01:29.280 it has some momentum behind it, it's investable, and we 0:01:29.360 --> 0:01:31.400 need to take advantage of it. Now, there's smart ways 0:01:31.440 --> 0:01:33.039 to do that and not smart ways to do that, 0:01:33.080 --> 0:01:34.920 and we're going to try to stick with the smart ways, 0:01:34.959 --> 0:01:36.600 and I'm happy to talk about those. 0:01:36.520 --> 0:01:38.520 Okay, so let's talk about them. The smart ways to 0:01:38.560 --> 0:01:41.360 do it. Is it investing in the hyperscalers or is 0:01:41.360 --> 0:01:43.679 it investing in energy companies that they are going to 0:01:43.720 --> 0:01:46.360 have to fuel this over the longer term. 0:01:47.280 --> 0:01:52.000 The answer is yes. But look, you've got hyperscalers in 0:01:52.040 --> 0:01:56.000 comm services, communication services, and in information technology. All right, 0:01:56.080 --> 0:01:58.040 So you've got two sectors there. Do you want to 0:01:58.080 --> 0:01:59.840 buy them both or do you just want to buy 0:01:59.840 --> 0:02:03.280 one right now by the one that looks the least overpriced. 0:02:03.720 --> 0:02:06.040 And then let's sit there for a while. And then 0:02:06.320 --> 0:02:09.200 at the same time, let's try to diversify that AI 0:02:09.320 --> 0:02:13.239 exposure by going with what I would call adjunct trends 0:02:13.800 --> 0:02:15.400 like the data centers. You know, you've got some of 0:02:15.440 --> 0:02:18.160 these two and three ton computers right now around the 0:02:18.160 --> 0:02:20.760 country sitting under tents, So they're going to have to 0:02:20.840 --> 0:02:23.960 build places for those computers to live, and they're going 0:02:24.040 --> 0:02:26.800 to have to build out the energy infrastructure not just 0:02:26.800 --> 0:02:29.520 to power them, but to cool them. Going computers off 0:02:29.560 --> 0:02:32.880 and have cooling below the floor. So utilities and industrials 0:02:33.000 --> 0:02:35.880 look like two sectors US that are not as overpriced 0:02:35.960 --> 0:02:41.120 as in fact even abtractively priced compared to information technology 0:02:41.120 --> 0:02:44.040 and common services. And then a third way to diversify, 0:02:44.120 --> 0:02:46.800 or let's call it a second way to diversify, is 0:02:46.840 --> 0:02:50.440 to look for trends that aren't necessarily directly related to AI, 0:02:50.800 --> 0:02:53.080 but that play another big rock in the economy. And 0:02:53.120 --> 0:02:55.320 that's the fact that we think that the FED is 0:02:55.720 --> 0:02:58.240 we believe is going to cut two more times this 0:02:58.360 --> 0:03:01.160 year and another two more times next year. That's going 0:03:01.240 --> 0:03:03.600 to take the short end of the yield curve lower. 0:03:04.000 --> 0:03:06.840 And with long rates we think hovering near where they 0:03:06.880 --> 0:03:10.640 are right now, that's a pretty good looking environment for banks. 0:03:10.800 --> 0:03:13.880 Right They're going to pay short term deposit rates which 0:03:13.919 --> 0:03:16.800 are going down, so their cost fall. At the same time, 0:03:17.120 --> 0:03:19.640 longer rates stay high and that's what they're going to 0:03:19.639 --> 0:03:22.880 earn on their lending. So we can play different trends 0:03:22.919 --> 0:03:25.960 here in different ways that aren't as overpriced as the 0:03:26.000 --> 0:03:28.680 overall market. Over the hypers you know, the individual hyper 0:03:28.760 --> 0:03:31.920 six scalers, the mag seven. So I think that's the 0:03:31.960 --> 0:03:34.080 way to go here. You want to try to be 0:03:34.160 --> 0:03:37.840 as effective with your capital as possible. And look, there 0:03:37.840 --> 0:03:39.480 are going to be pullbacks, so we're going to get 0:03:39.480 --> 0:03:40.960 to earning season, They're going are going to be some 0:03:41.000 --> 0:03:44.360 disappointments and those firms will be punished. Those could be 0:03:44.400 --> 0:03:47.120 buying opportunities. We'll have to see what transpires. 0:03:47.240 --> 0:03:47.920 Well, I'm glad you. 0:03:47.800 --> 0:03:50.120 Brought up the energy demand that it's going to be 0:03:50.160 --> 0:03:54.600 for this entire AI boom electricity demand. Do you think 0:03:54.640 --> 0:03:57.720 that could end up slowing this momentum because it might 0:03:57.760 --> 0:04:00.600 not keep pace with what these hyperscalers are trying to do. 0:04:02.160 --> 0:04:03.040 Yeah, that's a good point. 0:04:03.080 --> 0:04:05.880 I mean, look, there are always going to be constraints 0:04:06.560 --> 0:04:09.840 when you're going through a growing trend, a growing pains 0:04:09.920 --> 0:04:13.560 trend like this one. This is a very disruptive economic trend. 0:04:13.800 --> 0:04:15.640 We saw the same thing. If you go back to 0:04:15.720 --> 0:04:19.719 the nineties, right, there were shortages of things. If you 0:04:19.800 --> 0:04:22.680 go back to the forties and the fifties and the sixties, 0:04:23.160 --> 0:04:26.840 we were developing automobile, ship and air transport and there 0:04:26.839 --> 0:04:30.960 were constraints there. We eventually broke through those constraints, and 0:04:31.000 --> 0:04:35.440 for investors, those constraints really represent opportunities. Right, So as 0:04:35.520 --> 0:04:40.480 long as you see electricity production and transmission being constrained, 0:04:40.680 --> 0:04:45.080 that means there's opportunities and utilities, there's opportunities in midstream energy. 0:04:45.080 --> 0:04:48.480 There's no opportunities in natural gas. For a long term investor, 0:04:48.720 --> 0:04:50.960 those constraints have to be worked through, and we believe 0:04:51.000 --> 0:04:51.400 they will. 0:04:52.040 --> 0:04:54.159 Well, I want to know what you think of, basically, 0:04:54.160 --> 0:04:58.000 what you're doing in absence of US economic data. Christian 0:04:58.080 --> 0:05:01.039 Nolting from Deutsche Bank. Earlier the program was talking about 0:05:01.040 --> 0:05:05.400 how actually it's been easier without having the US economic data. 0:05:05.480 --> 0:05:06.640 What have you been relying on? 0:05:07.960 --> 0:05:10.240 Yeah, it is easier in a sense you don't have 0:05:10.480 --> 0:05:13.440 the reports coming out every day. But look, let's go 0:05:13.520 --> 0:05:15.479 back to the idea of the big rocks. For a 0:05:15.520 --> 0:05:18.719 long term investor, what matters right here, right now is 0:05:18.760 --> 0:05:21.240 that the economy is still growing. I don't think anybody 0:05:21.320 --> 0:05:24.599 doubts that, and that inflation is still moderate. I don't 0:05:24.600 --> 0:05:29.080 think anybody doubts that really, And those that combination, along 0:05:29.160 --> 0:05:32.479 with a labor market that's continuing to soften but is 0:05:32.520 --> 0:05:35.760 not generating a lot of new unemployment, that also tells 0:05:35.839 --> 0:05:38.200 us the FED is likely to cut, the economy is 0:05:38.279 --> 0:05:40.520 likely to grow. We think earnings come up to three 0:05:40.600 --> 0:05:42.800 hundred dollars per share next year on the S and 0:05:42.800 --> 0:05:45.440 P five hundred. Those are the big rocks that investors 0:05:45.560 --> 0:05:48.599 really need to know about. The government shutdown. That's noise, 0:05:48.640 --> 0:05:50.240 it's distraction. Let's look through it. 0:05:50.400 --> 0:05:51.039 Yeah, at this time. 0:05:51.120 --> 0:05:53.560 At this point, though, you have to wonder whether the 0:05:53.600 --> 0:05:56.400 strength that we're seeing in corporate earnings pairs with this 0:05:56.440 --> 0:05:58.800 idea of a FED easing. We were talking earlier with 0:05:58.880 --> 0:06:01.080 Kadi Kaminski about this simplex and she said it is 0:06:01.120 --> 0:06:03.240 confusing to her that we're not seeing some sort of 0:06:03.240 --> 0:06:05.479 sell off in long term bonds as a result of 0:06:05.520 --> 0:06:08.440 the FED presumably cutting two more times this year in 0:06:08.480 --> 0:06:10.919 the face of real strength in the US economy. 0:06:11.360 --> 0:06:12.919 How do you manage that risk? 0:06:13.160 --> 0:06:16.400 Considering that we really haven't seen much of anything in 0:06:16.400 --> 0:06:18.080 the bond space in terms of volatility. 0:06:19.360 --> 0:06:21.080 Well, that is one risk on the long end of 0:06:21.120 --> 0:06:24.479 the yield curve, the maturity spectrum, and we would agree 0:06:24.480 --> 0:06:26.760 that that's a risk. We would see other risks as well. 0:06:26.800 --> 0:06:30.400 Potentially the tariff revenue will not generate as much as 0:06:30.440 --> 0:06:33.720 many dollars as Congress thinks, and so you could end 0:06:33.760 --> 0:06:37.080 up with wider deficits going forward. So there is risk, 0:06:37.120 --> 0:06:40.080 we think on the long end of the maturity spectrum, 0:06:40.080 --> 0:06:42.680 and that's why we've been underweight there for some time. 0:06:42.720 --> 0:06:43.440 For some months. 0:06:43.680 --> 0:06:46.240 We're also underweight on the short end, expecting the FED 0:06:46.240 --> 0:06:48.279 to cut. So that really leaves us with a bullet 0:06:48.320 --> 0:06:51.560 strategy where what we really like is that intermediate portion 0:06:51.880 --> 0:06:54.599 of the maturity spectrum, the yield curve, those that three 0:06:54.640 --> 0:06:59.200 to seven year range, investment grade, investment grade munis and corporates, 0:06:59.320 --> 0:07:01.280 that's where we would target. Look, you're going to get 0:07:01.279 --> 0:07:03.440 a yield in that three to seven year range that's 0:07:03.520 --> 0:07:05.240 not far off of what it is in the ten 0:07:05.720 --> 0:07:07.680 ten year but you're going to get a lot less 0:07:07.760 --> 0:07:11.400 duration risk, a lot less risk from fluctuating long term yield. 0:07:11.480 --> 0:07:15.120 So whatever the reasons are, yeah, well, we would agree 0:07:15.160 --> 0:07:17.280 that we want to be underweight long term debt at 0:07:17.280 --> 0:07:17.920 this point. 0:07:17.880 --> 0:07:22.360 Are bonds still the diversifier that they have been traditionally? 0:07:23.200 --> 0:07:25.800 Yes, over time they have been, And I mean we've 0:07:25.840 --> 0:07:28.600 done the work behind this to show the whether it's 0:07:28.920 --> 0:07:32.240 short term or long term. If in terms of the 0:07:32.320 --> 0:07:35.640 number of years you look at, bonds are consistently the 0:07:35.640 --> 0:07:39.680 best diversifier for equities, you. 0:07:39.640 --> 0:07:42.320 Know, on a regular, on a regular and ongoing basis. 0:07:42.480 --> 0:07:45.960 At the moment, there's lots of trends that are churning 0:07:46.120 --> 0:07:49.960 around fixed income. So there's you know, some buying in 0:07:50.040 --> 0:07:52.480 the in the fixed income space pushing yields down a 0:07:52.520 --> 0:07:55.800 little bit. That's also tending to push more money into stocks, 0:07:56.160 --> 0:07:58.680 but that that's just part of the normal give and 0:07:58.760 --> 0:08:01.480 take between those two markets. We would want people to 0:08:01.520 --> 0:08:04.320 hold both bonds and stocks because we don't want to 0:08:04.320 --> 0:08:06.360 try to predict when one is going to peak and 0:08:06.360 --> 0:08:07.240 the other one's going to troll. 0:08:08.480 --> 0:08:11.920 Stay with us Mobile intex Savanna's coming up after this. 0:08:21.280 --> 0:08:23.120 I want to rip up the script and go right 0:08:23.160 --> 0:08:27.080 to our next guy, Rajadaksha of Markley's, to talk about 0:08:27.360 --> 0:08:30.840 what we're seeing with respect to the international picture, how 0:08:30.880 --> 0:08:32.800 much that's edifying what we're seeing in the gold trade. 0:08:32.840 --> 0:08:35.120 But also how difficult it's been to really make some 0:08:35.160 --> 0:08:38.000 sort of international call when you take a look like Argentina. 0:08:38.280 --> 0:08:40.679 How much does that complicate the emerging market bet, I mean, 0:08:40.720 --> 0:08:43.800 how much does that complicate understanding what the calculus is there? 0:08:43.920 --> 0:08:46.840 It does, but it depends on the asset class you're 0:08:46.880 --> 0:08:49.319 talking about, So on the bond side it does matter hugely. 0:08:49.800 --> 0:08:52.480 But on the equity side, remembered Lisa, you're talking about 0:08:53.240 --> 0:08:58.480 anamaquity asset class that is primarily dependent on what China does. 0:08:59.080 --> 0:09:01.480 You know, not so much, not so much, but not 0:09:01.520 --> 0:09:03.720 even at this point India. You know, Indian equities are 0:09:03.760 --> 0:09:06.480 basically treaded water for a while, but the Chinese equity 0:09:06.480 --> 0:09:09.120 market has been on a tear and that I think 0:09:09.240 --> 0:09:12.200 is the is the wind beneath EM's wings for the 0:09:12.240 --> 0:09:15.440 forciful future. So there's noise, yes, but this is not 0:09:15.480 --> 0:09:17.640 going to upset the em equity rally. 0:09:17.800 --> 0:09:20.480 This is fascinating because how much is China the wind 0:09:20.559 --> 0:09:23.280 beneath the sales of gold? We've been talking all about 0:09:23.320 --> 0:09:25.640 gold as being this debasement trade, but you're not seeing 0:09:25.640 --> 0:09:28.200 it necessarily in treasure healds because you are seeing some 0:09:28.320 --> 0:09:29.760 kind of demand at the auctions. 0:09:30.120 --> 0:09:31.400 Is it really just central. 0:09:31.120 --> 0:09:35.120 Bank buying led by China that's fueling in a narrative 0:09:35.160 --> 0:09:36.520 that's taking on a life of its own. 0:09:37.800 --> 0:09:39.920 It is partly central bank buying, and it started in 0:09:39.920 --> 0:09:43.040 twenty twenty two and the West froze Russia's affects reserves. 0:09:43.080 --> 0:09:46.320 We saw an immediate pickup, you know, almost double the 0:09:46.320 --> 0:09:48.720 amount of buying in twenty twenty two from central banks 0:09:48.760 --> 0:09:51.560 loyalty to twenty twenty one, and it has not let 0:09:51.640 --> 0:09:54.760 up since. Central banks have bought over a thousand tons 0:09:54.800 --> 0:09:57.240 of gold each year starting in twenty twenty two. They 0:09:57.320 --> 0:09:59.440 used to be at barely three hundred to four hundred tons. 0:10:00.120 --> 0:10:04.439 Part of it is also the lack of supply. Weirdly enough, 0:10:04.960 --> 0:10:08.880 despite gold prices basically tripling in the last five to 0:10:08.960 --> 0:10:12.720 six years, the amount of supply, you know, college geopolitical 0:10:12.760 --> 0:10:16.040 issues calledge geological issues, but the amount of supply really 0:10:16.080 --> 0:10:18.240 hasn't picked up anyone near as much as you expect. 0:10:18.520 --> 0:10:20.559 And then that is the third thing what I think 0:10:20.559 --> 0:10:23.680 you're referring to, which is just uneasiness about the global 0:10:23.840 --> 0:10:25.200 financial and montre order. 0:10:25.800 --> 0:10:29.400 When it comes to that uneasiness and the central bank buying, 0:10:29.880 --> 0:10:32.960 what's the impact of that, because that means then they're 0:10:32.960 --> 0:10:34.439 not buying as many US treasuries. 0:10:34.920 --> 0:10:37.640 That is actually a very clear impact. So for a 0:10:37.640 --> 0:10:42.280 first time, late last year, by our estimates, the amount 0:10:42.320 --> 0:10:46.200 of effects reserves globally held moved to a majority, not 0:10:46.240 --> 0:10:48.640 a majority, but more effects reserves were held in gold 0:10:48.679 --> 0:10:50.880 and US treasuries, which is not something that has happened 0:10:50.880 --> 0:10:55.959 for a long, long long time. Like you guys just said, 0:10:56.160 --> 0:10:58.360 it is true that it's not shown up in a 0:10:58.440 --> 0:11:01.400 lack of auction demand, for example, but if you look 0:11:01.440 --> 0:11:05.240 at swap spreads and where they are right now, they 0:11:05.360 --> 0:11:08.160 still seem to be screaming that on a relative basis, 0:11:08.880 --> 0:11:11.440 you know, sovereign debt is still not as much in 0:11:11.480 --> 0:11:14.199 favor as all in yield levels would suggest. 0:11:14.320 --> 0:11:16.480 Do you call this the world de dollarizing? 0:11:18.280 --> 0:11:20.839 No, I think the world it's not so much one 0:11:20.880 --> 0:11:24.640 currency versus another, you know, because let's face it, that 0:11:24.920 --> 0:11:27.040 is not an alternative to the dollar. That nib is 0:11:27.040 --> 0:11:29.760 not an alternative. The euro has its own problems. The 0:11:29.880 --> 0:11:32.320 yen used to be a safe haven but has struggled 0:11:32.360 --> 0:11:34.719 in the last clear for the Swiss frank you know, 0:11:34.840 --> 0:11:37.280 quite frankly is very expensive too small, so it's not 0:11:37.400 --> 0:11:40.520 ded aularizing as in the world moving to other currencies. 0:11:40.960 --> 0:11:46.120 But the world absolutely is worried about how much we 0:11:46.200 --> 0:11:50.520 are awash, both in fiat currencies as well as in 0:11:50.840 --> 0:11:53.160 the trillions of dollars of sovereign debt with the promise 0:11:53.160 --> 0:11:55.880 of trillions more to come. That that is the uneasiness 0:11:55.880 --> 0:11:57.720 that I think investors are turning to gold for. 0:11:58.080 --> 0:11:59.760 You know, I wonder if we're just trying to create 0:12:00.080 --> 0:12:03.040 daves around a liquidity picture that people don't fully understand. 0:12:03.440 --> 0:12:05.880 And as the head of research at Barclay's, I'm sure 0:12:05.880 --> 0:12:08.160 you track the liquidity pictures and the idea that you're 0:12:08.160 --> 0:12:11.040 having the fiscal and the monetary engines kind of firing 0:12:11.080 --> 0:12:14.600 at the same time. How much do all assets end 0:12:14.679 --> 0:12:16.679 up trading in tandem? And I know I shouldn't make 0:12:16.720 --> 0:12:18.520 too much about this, but the fact that stocks, pods 0:12:18.559 --> 0:12:22.440 and gold also sold off yesterday sort of hinted at 0:12:22.480 --> 0:12:25.280 this question around liquidity almost as much as some of 0:12:25.320 --> 0:12:27.080 the narratives that were trying to put around them. 0:12:27.320 --> 0:12:30.400 So I'm less switted about, Oh, you're talking about too 0:12:30.440 --> 0:12:32.400 much liquidity in the system or. 0:12:32.520 --> 0:12:34.760 And then being withdrawn and how much that ends up 0:12:34.800 --> 0:12:38.440 really kind of creating the dynamic and markets well beyond 0:12:38.640 --> 0:12:43.360 any question around geopolitics or loss in US exceptionalism, waket 0:12:43.440 --> 0:12:44.280 in growth beyond. 0:12:45.320 --> 0:12:48.160 So I think yesterday just to address that, you know, 0:12:48.240 --> 0:12:52.400 small question first was not about the liquidity, partly because 0:12:52.440 --> 0:12:55.400 like you said, gold was so overbought. That is I've 0:12:55.480 --> 0:12:58.120 just never seen it. You know, something goes of fifty percent, 0:12:58.120 --> 0:13:00.839 it's not you know, easy for it to take a 0:13:00.880 --> 0:13:02.960 little bit of a breather. In equities, I would say 0:13:03.000 --> 0:13:06.319 the same thing. Bonds. We are running, according to the 0:13:06.360 --> 0:13:09.480 Atlanta FARED at a three point eight percent quarter on 0:13:09.640 --> 0:13:13.240 quarter growth number annualized for the third quarter. That is 0:13:13.240 --> 0:13:16.560 a nominal GDP print of over six percent. At some 0:13:16.720 --> 0:13:19.400 point bonds are supposed to start to reflect that, and 0:13:19.440 --> 0:13:22.200 I think that is what they were doing. But I 0:13:22.360 --> 0:13:25.640 do think that the FED is laser focused on the 0:13:25.679 --> 0:13:27.679 amount of bank reserves it starts to take out of 0:13:27.760 --> 0:13:31.199 the system as it continues with QT. Now, the problem 0:13:31.200 --> 0:13:32.679 that they have is the way that you know there 0:13:32.720 --> 0:13:34.400 is a problem is when there is a problem, you know, 0:13:34.480 --> 0:13:36.440 we're all guessing at what is the correct level of 0:13:36.440 --> 0:13:39.079 bank reserves. But if I had to guess I think 0:13:39.120 --> 0:13:41.640 they would err on the side of caution, meaning leave 0:13:41.760 --> 0:13:44.760 too many reserves are then too few, And that again 0:13:44.880 --> 0:13:47.640 is gold, bitcoin, silver positive. 0:13:48.040 --> 0:13:50.000 So is it very difficult to be purish in anything 0:13:50.080 --> 0:13:56.800 right now? Considering that that's the backdrop of liquidity. 0:13:54.360 --> 0:13:58.720 It's hard to be verished given the economic outlook. You know, 0:13:59.000 --> 0:14:02.200 we've turned you know, neither of you guys have asked 0:14:02.240 --> 0:14:04.080 me a single question on tarts. And there's a reason 0:14:04.120 --> 0:14:07.400 for that. You know, we've turned the page on what 0:14:07.760 --> 0:14:11.080 used to matter. There's this massive aye boom, which even 0:14:11.120 --> 0:14:14.000 if it ends up with you know, some problems along 0:14:14.040 --> 0:14:16.959 the way. This amount of spending is there's names, Lisa 0:14:17.000 --> 0:14:19.960 that I never knew, Colossus, Rainiers, Target, these are all 0:14:20.000 --> 0:14:23.480 fantastical names, except that they are all gigantic data centers. 0:14:23.520 --> 0:14:25.880 Each one of them have the size of Manhattan. And 0:14:25.960 --> 0:14:28.240 that spending is not going to go away. And while 0:14:28.280 --> 0:14:30.720 that is going on, I just see no reason for 0:14:31.200 --> 0:14:33.880 a big pullback in most ACID classes. 0:14:35.240 --> 0:14:38.680 Stay with US Moblin TEX Surviance coming up after this. 0:14:48.000 --> 0:14:51.160 The partisans stalemate is dragging on in Washington, d C. 0:14:51.360 --> 0:14:55.400 With President Trump threatening cuts to democratic programs. Some federal 0:14:55.440 --> 0:14:59.200 workers are preparing for missed paychecks today as a shutdown 0:14:59.200 --> 0:15:03.880 continues for a Arkansas Congressman Frenchhill joins us Now, Congressman, 0:15:03.880 --> 0:15:05.920 thank you so much for being with us. Is there 0:15:05.960 --> 0:15:08.880 any progress being made, Is there a good faith effort 0:15:09.320 --> 0:15:11.760 to be getting in the room and talking about some 0:15:11.800 --> 0:15:12.560 of the details. 0:15:13.840 --> 0:15:15.480 Well, good morning, it's nice to be with you. 0:15:15.560 --> 0:15:19.680 I think senators are certainly having conversations about what they'd 0:15:19.720 --> 0:15:23.080 be willing to do in the appropriations process after the 0:15:23.120 --> 0:15:24.240 government reopens. 0:15:24.760 --> 0:15:25.640 This is the issue. 0:15:25.640 --> 0:15:31.680 The House passed a clean, bipartisan a continuing resolution to 0:15:31.800 --> 0:15:35.720 have all of government open, and just yesterday Chuck Schumer 0:15:35.760 --> 0:15:38.240 put a sign up saying We're getting stronger every day. 0:15:38.280 --> 0:15:39.880 Well, you know who's not getting stronger. 0:15:40.240 --> 0:15:44.960 People depended on the flood insurance program who are concerned. 0:15:44.520 --> 0:15:46.200 About storms or floods. 0:15:46.560 --> 0:15:48.840 People who are working in the military who know next 0:15:48.880 --> 0:15:51.960 week they get their last paycheck. People who are dependent 0:15:52.040 --> 0:15:55.080 on grant programs from the federal government to keep state 0:15:55.720 --> 0:15:59.360 child care programs open. That's who's not getting stronger every day. 0:16:00.080 --> 0:16:02.640 So I would just simply say, all the Senator has 0:16:02.680 --> 0:16:05.720 to do is pass the continuing resolution and keep the 0:16:05.760 --> 0:16:10.160 appropriations process going. So the answer question is Yes, Senators 0:16:10.160 --> 0:16:13.320 are having conversations about what they want to do in 0:16:13.320 --> 0:16:16.480 fiscal twenty six spending, including on healthcare. 0:16:16.680 --> 0:16:20.000 Cherman Hill, you just said the active service duty service members, 0:16:20.040 --> 0:16:23.280 the military members will get their last paycheck next week. 0:16:23.360 --> 0:16:25.880 Isn't your understanding they will get paid next week, because 0:16:25.880 --> 0:16:27.520 I think there's still been a question mark about that. 0:16:28.720 --> 0:16:31.920 Well, I think that's the last paycheck that I'm aware 0:16:31.920 --> 0:16:34.280 of is the fifteenth, and. 0:16:34.200 --> 0:16:35.400 Maybe that's maybe it's not. 0:16:35.680 --> 0:16:39.520 But either way, this is why I decline my pay 0:16:39.640 --> 0:16:42.280 during this whole period, as I have in previous shutdowns. 0:16:42.320 --> 0:16:45.520 I don't think members of Congress, particularly the Senate, should 0:16:45.520 --> 0:16:49.280 be paid while federal workers are furloughed, and some federal 0:16:49.480 --> 0:16:52.640 workers may well lose their job when the simplest thing 0:16:52.680 --> 0:16:56.440 to do, Anne Marie, is to get this government back open. 0:16:56.640 --> 0:16:59.520 We were in the middle of discussing all of the 0:16:59.560 --> 0:17:02.960 spending for fiscal twenty six. The Senate had passed three 0:17:02.960 --> 0:17:05.960 bills across the Senate floor. We had passed four bills 0:17:05.960 --> 0:17:09.280 across the House floor, and Susan Collins and Tom Cole 0:17:09.359 --> 0:17:13.400 have that process underway, and Schumer, I think, for internal 0:17:13.440 --> 0:17:18.119 democratic political purposes, chose to pick a fight with Trump 0:17:18.920 --> 0:17:21.440 and try to make a name for himself once again. 0:17:21.560 --> 0:17:24.480 So the Schumer shutdown starts. 0:17:24.080 --> 0:17:24.960 In his office. 0:17:25.119 --> 0:17:29.400 Meanwhile, we do see the executive branch continuing along on 0:17:29.440 --> 0:17:33.000 a number of foreign policy issues, including Argentina. I'd love 0:17:33.040 --> 0:17:35.879 to get your thoughts on this twenty billion dollar swap line. 0:17:35.960 --> 0:17:40.000 If they are using the ESF, isn't that taxpayer dollars 0:17:40.080 --> 0:17:41.119 going to Buenos Aires? 0:17:42.720 --> 0:17:45.920 Over many many years, since the nineteen thirties, the US 0:17:46.000 --> 0:17:49.680 Treasury has used the Exchange Stabilization Fund when they think 0:17:49.720 --> 0:17:54.480 it's in American interest for geopolitical reasons, for global international 0:17:54.520 --> 0:18:00.960 finance stability reasons by both political parties. Treasury Secretary of 0:18:00.960 --> 0:18:05.119 Bessin's first trip as Treasury Secretary was to meet the 0:18:05.200 --> 0:18:08.359 leadership at the Malay government in Buenos Aires. I visited 0:18:08.440 --> 0:18:13.760 Argentina in August to assess the IMF program, assess their 0:18:13.800 --> 0:18:18.560 progress for the first time of trying to return Argentina 0:18:18.680 --> 0:18:22.119 back to a market economy that people can be benefited 0:18:22.119 --> 0:18:25.800 from by low inflation, lifting kids out of poverty, created 0:18:25.840 --> 0:18:29.479 a private sector, dropping currency controls. So I think the 0:18:29.480 --> 0:18:32.400 Melee government is on the right track, and I think 0:18:32.480 --> 0:18:37.040 Secretary Besset is trying to carefully and prudently see how 0:18:37.080 --> 0:18:41.359 they can encourage that success. If they're successful, they will 0:18:41.560 --> 0:18:46.080 rival the stories in Taiwan or Singapore or the Asian Tigers, 0:18:46.119 --> 0:18:49.080 and they will reverse the curse of one hundred and 0:18:49.080 --> 0:18:52.600 fifty years of mismanagement and finance in Buenos Aires. 0:18:52.600 --> 0:18:54.800 But jare Hill I was with the traasch secretary when 0:18:54.800 --> 0:18:57.480 he went to Argentina in April, his first international trip. 0:18:57.680 --> 0:19:00.359 This is because of the midterm elections coming up, not 0:19:00.480 --> 0:19:02.720 some geopolitical issue. 0:19:03.040 --> 0:19:04.720 I disagree completely with you. 0:19:04.840 --> 0:19:10.159 I understand that President Melee is having national elections in 0:19:10.160 --> 0:19:13.800 Buenos Aires on October twenty six. That's true, and it's 0:19:13.840 --> 0:19:16.600 important that he keep the momentum going because they need 0:19:16.720 --> 0:19:20.679 legislative support for the reforms that they've made. But just 0:19:20.720 --> 0:19:24.000 in the first few months of his leadership, he's made 0:19:24.040 --> 0:19:31.040 substantial macroeconomic reforms that have improved the outcome and individual 0:19:31.080 --> 0:19:32.600 citizens have been improved. 0:19:33.040 --> 0:19:34.000 So it's more than that. 0:19:34.280 --> 0:19:37.720 Argentina is an important strategic partner to the United States 0:19:38.119 --> 0:19:42.840 in the Southern hemisphere, for national security purposes, for shipping purposes, 0:19:42.840 --> 0:19:46.399 for global open navigation purposes. So it's a much bigger 0:19:46.440 --> 0:19:48.960 issue than just the fact that they have domestic elections 0:19:49.000 --> 0:19:49.480 coming up. 0:19:49.800 --> 0:19:53.600 Congressman, the market is shrugging off all of what's going on, 0:19:53.840 --> 0:19:56.600 whether it's geopolitically or whether it's the government shut down, 0:19:56.640 --> 0:19:59.359 and they're actually looking more to measures that you put 0:19:59.400 --> 0:20:03.200 forward in including some of the deregulation of banks, including 0:20:03.240 --> 0:20:06.560 some of what we've seen with respect to easing some 0:20:06.600 --> 0:20:08.920 of the ability for tie ups in the financial sector. 0:20:08.960 --> 0:20:10.800 As someone who has been a part of the financial 0:20:10.840 --> 0:20:13.600 sector in the small banking area as well as who's 0:20:13.640 --> 0:20:16.440 been really a leader in this particular space, how much 0:20:16.720 --> 0:20:19.600 more do you see this continuing? Are you encouraged by 0:20:19.600 --> 0:20:22.600 what you're seeing? What kind of consolidation are you hoping for? 0:20:24.000 --> 0:20:27.159 Well, it's not about consolidation. It's about right sizing the 0:20:27.240 --> 0:20:33.200 role of government supervision and tailoring bank regulations. This began 0:20:33.400 --> 0:20:36.720 under the first Trump administration when we passed a bipartisan 0:20:36.800 --> 0:20:38.960 bill that was signed into law by President Trump back 0:20:38.960 --> 0:20:42.359 in twenty eighteen, and in that effort, we wanted to 0:20:42.440 --> 0:20:46.000 tailor regulation and supervision of our financial institutions based on 0:20:46.080 --> 0:20:50.160 their complexity, not just simply based on size. And that's 0:20:50.200 --> 0:20:52.639 been a theme that we've had for my first nine 0:20:52.680 --> 0:20:56.280