WEBVTT - Buffett Says He’s ‘Going Quiet,’ Picking Up Donation Pace 0:00:00.080 --> 0:00:10.520 Bloomberg Audio Studios, Podcasts, Radio News. This is Bloomberg Business 0:00:10.520 --> 0:00:14.400 Week Daily reporting from the magazine that helps global leaders 0:00:14.440 --> 0:00:18.360 stay ahead with insight on the people, companies, and trends 0:00:18.400 --> 0:00:23.400 shaping today's complex economy. Plus global business, finance and tech 0:00:23.480 --> 0:00:27.320 news as it happens. The Bloomberg Business Week Daily Podcast 0:00:27.680 --> 0:00:32.000 with Carol Masser and Tim Stenebeck On Bloomberg Radio. 0:00:33.360 --> 0:00:39.600 Show, Here, let's get this. 0:00:42.240 --> 0:00:43.240 We'll drive. 0:00:44.640 --> 0:00:47.000 Do I look like I drive a Mini vans? Shut 0:00:47.080 --> 0:00:56.760 up and draft, don't drive angry, don't drive angry. 0:00:58.040 --> 0:00:59.240 I'll dry show. 0:01:00.120 --> 0:01:01.720 This is the drive to the clothes. 0:01:01.880 --> 0:01:04.040 If you had access to a car like this, would 0:01:04.080 --> 0:01:05.200 you take it back right away? 0:01:05.319 --> 0:01:06.520 On Bloomberg Radio. 0:01:07.760 --> 0:01:10.479 All right, everybody, we've got just about eighteen nineteen minutes 0:01:10.480 --> 0:01:13.320 to go until we wrap up the trade on this Monday. 0:01:13.360 --> 0:01:16.080 As you know, we've got stocks bouncing around but really 0:01:16.200 --> 0:01:19.560 holding on to their best levels of the session, bouncing meeting. 0:01:19.600 --> 0:01:21.720 They're way off their lows today, up one point six 0:01:21.800 --> 0:01:23.560 percent on the S and P five hundred two and 0:01:23.560 --> 0:01:26.319 a quarter percent higher on the Nasdaq one hundred. So 0:01:26.319 --> 0:01:29.640 the risk on trade is certainly out there in a 0:01:29.640 --> 0:01:32.399 big way. Let's get to our Eric Wiener, he's Bloomberg 0:01:32.400 --> 0:01:35.200 new senior editor Equities America's joining us right here in 0:01:35.200 --> 0:01:38.759 our Bloomberg Interactive Broker studio. As Bill Maloney was leaving, 0:01:38.959 --> 0:01:41.800 and we're listening to Alexis and we're all talking, and 0:01:41.880 --> 0:01:43.399 Tim think you leaned over to. 0:01:43.480 --> 0:01:45.360 Eric, and you know, it's the end of an era. 0:01:45.440 --> 0:01:48.360 In terms of Warren Buffett right talking at his annual 0:01:48.360 --> 0:01:49.400 shareholder meetings. 0:01:49.400 --> 0:01:51.360 We all look to him. 0:01:51.520 --> 0:01:54.040 Every year, and really in moments of crisis, he was 0:01:54.040 --> 0:01:56.440 the voice that really investors wanted to hear from. 0:01:56.760 --> 0:01:57.320 Absolutely. 0:01:57.360 --> 0:02:01.600 He also was a sort of a voice of reason 0:02:02.360 --> 0:02:04.920 on Wall Street, so he would be one who would 0:02:04.960 --> 0:02:07.480 point out that things had gotten a little bit far, 0:02:08.040 --> 0:02:09.880 you know, out over their skis. He would be the 0:02:09.880 --> 0:02:12.480 one to say that it was time to step back in. 0:02:13.760 --> 0:02:14.040 You know. 0:02:14.880 --> 0:02:17.200 They called him the oracle, and there was a good 0:02:17.280 --> 0:02:20.720 reason for that, you know, just we're not going to 0:02:20.720 --> 0:02:23.960 see something like that again for a very long time. 0:02:24.000 --> 0:02:26.520 If ever, remember that two thousand and eight op ed 0:02:26.520 --> 0:02:30.480 in the New York Times by American I Am This 0:02:30.639 --> 0:02:34.359 was at the depths of the financial crisis. Everybody's freaking out, 0:02:34.400 --> 0:02:37.360 he writes, I've been buying American stocks. Why a simple rule, 0:02:37.680 --> 0:02:40.480 be fearful when others are greedy, and be greedy when 0:02:40.520 --> 0:02:43.239 others are fearful. I feel like I hear that repeated 0:02:43.360 --> 0:02:43.880 all the time. 0:02:43.960 --> 0:02:47.960 Now it's so easy to say, it is so hard 0:02:48.160 --> 0:02:53.960 to do, and it's not that simple in the sense that, 0:02:54.080 --> 0:02:57.320 like what he saw, the way that he hedged himself. 0:02:57.520 --> 0:02:59.920 He was a very heavy user of derivatives. Nobody really 0:03:00.200 --> 0:03:03.760 points that out. He would always hedge himself. He was 0:03:03.840 --> 0:03:08.600 just really really savvy with what he could see in 0:03:08.680 --> 0:03:11.040 terms of demand and what he could see in terms 0:03:11.080 --> 0:03:15.960 of the permanence of the American consumer. That he could 0:03:16.080 --> 0:03:19.120 tell that there was like he was in front of 0:03:19.360 --> 0:03:23.200 newspapers when that was the only way to do advertising. 0:03:23.240 --> 0:03:26.480 He was in front of Coca Cola whenever he was saying, yeah, 0:03:26.560 --> 0:03:28.480 that's not going to be the thing to buy, and 0:03:28.520 --> 0:03:30.120 he's like, yeah, but people just like a coke. 0:03:30.639 --> 0:03:30.880 You know. 0:03:31.160 --> 0:03:34.920 It's those kinds of really really simple Like Peter. 0:03:34.760 --> 0:03:37.280 Lynch, right, I need to understand the company. 0:03:37.200 --> 0:03:40.760 And then bring that in with very very sophisticated positioning 0:03:40.800 --> 0:03:45.080 within his portfolio. And you don't see that kind of 0:03:45.120 --> 0:03:45.840 thing anymore. 0:03:46.040 --> 0:03:48.960 Yeah, is there somebody out there that you think. 0:03:49.040 --> 0:03:50.600 I mean, I think about how much we listen to 0:03:50.640 --> 0:03:52.840 what Jamie Diamond has to say, and I do feel 0:03:52.880 --> 0:03:57.040 like he is the loan remaining big bank CEO that 0:03:57.120 --> 0:03:59.520 was there during the Great Financial Crisis. All the others 0:03:59.760 --> 0:04:02.480 are no longer in that top spot. So he has 0:04:02.520 --> 0:04:05.280 definitely seen a lot and has really created a bank 0:04:05.320 --> 0:04:10.160 that I think people turned to and respect very highly. 0:04:10.680 --> 0:04:13.360 Buffett believed in Jamie Dine. I remember I. 0:04:13.320 --> 0:04:15.360 Interviewed and they appeared together like off it. 0:04:15.520 --> 0:04:15.760 Yeah. 0:04:16.040 --> 0:04:18.479 I remember when I interviewed him from my first book, 0:04:18.600 --> 0:04:22.200 and he was he had left City Group and was debating. 0:04:21.720 --> 0:04:22.480 Going to Bank one. 0:04:22.520 --> 0:04:26.880 We actually talked about that, Yeah, And I just had 0:04:26.920 --> 0:04:30.400 a feeling that he was a guy who a bank 0:04:30.560 --> 0:04:34.640 could use. He was already eyeing how to put things together. 0:04:35.640 --> 0:04:39.200 He's just a really really savvy individual in terms of 0:04:39.240 --> 0:04:42.880 the way finances work. Buffett was different in that he 0:04:43.279 --> 0:04:46.360 managed portfolios, like you know, he really put his money 0:04:46.400 --> 0:04:51.360 where his mouth is. Diamond understands an industry. Buffett understood industries, 0:04:51.640 --> 0:04:53.040 and that's unique. 0:04:53.360 --> 0:04:56.360 So I guess the question I have is like, there's 0:04:56.400 --> 0:05:01.479 not Look, he's he's still with us, yet we're talking 0:05:01.480 --> 0:05:02.000 about this. 0:05:01.960 --> 0:05:05.440 Because we've been seeing the transition slowly happening and putting 0:05:05.560 --> 0:05:08.880 people in charge to continue Berkshire Hathaway for the next 0:05:08.960 --> 0:05:10.080 fifty one hundred years. 0:05:10.080 --> 0:05:10.400 Whatep. 0:05:10.520 --> 0:05:13.400 He's expected to end his role of CEO to successor 0:05:13.440 --> 0:05:16.240 Greg Abel at the end of the year. But it 0:05:16.279 --> 0:05:19.680 doesn't matter. There's no you know, when people listen to 0:05:19.720 --> 0:05:22.400 Warren Buffett and Charlie Munger who passed away just the 0:05:22.440 --> 0:05:26.159 last couple of years, at the annual shareholder meeting, there 0:05:26.240 --> 0:05:28.919 was those were like events where that people would flock 0:05:29.000 --> 0:05:31.840 too from around the world. I don't see anyone else 0:05:31.880 --> 0:05:33.160 having that same draw. 0:05:33.680 --> 0:05:37.880 No, no, And it's also because they spoke about macro issues, 0:05:37.920 --> 0:05:41.080 They spoke about the world around them, and they addressed 0:05:41.360 --> 0:05:45.400 issues that affected you whether or not you were investing. 0:05:45.520 --> 0:05:48.839 So it was like, you know, the woodstock of capitalism 0:05:48.880 --> 0:05:51.880 they called it. But it's unlike a normal shareholder meeting 0:05:51.880 --> 0:05:54.400 where they're talking about their business, they're talking about the company. 0:05:54.680 --> 0:05:58.240 He was talking about the world and Berkshire was a 0:05:58.279 --> 0:06:00.680 part of the world. The biggest, the most amazing thing 0:06:00.720 --> 0:06:03.839 about him was that he was a real portfolio manager. 0:06:03.880 --> 0:06:05.800 If you look at him from the sixties, the return 0:06:05.920 --> 0:06:08.920 is insane. And then he built a conglomerate and ran 0:06:09.000 --> 0:06:12.400 that successfully too. I mean, who can really do that. 0:06:12.120 --> 0:06:16.400 That's just not in the cards right now for what's 0:06:16.440 --> 0:06:18.760 available to you in this economy. 0:06:18.920 --> 0:06:20.560 I also think, you know, when you think about something 0:06:20.600 --> 0:06:23.320 like Rahm and Dodd, like he was their their method, 0:06:23.800 --> 0:06:25.200 you know, value investing. 0:06:25.560 --> 0:06:28.200 I mean that was the foundation for Warren Buffett. 0:06:28.240 --> 0:06:30.200 And you know we talk about value a lot, but 0:06:30.600 --> 0:06:32.440 he really did it and did it well. 0:06:32.600 --> 0:06:34.640 And it's again it's the courage of the convictions, like 0:06:34.800 --> 0:06:37.680 he could spot what was he felt was undervalued and 0:06:37.720 --> 0:06:38.960 then pile into it. 0:06:38.920 --> 0:06:39.480 And be right. 0:06:39.760 --> 0:06:39.960 You know. 0:06:40.000 --> 0:06:42.920 One thing that we love doing is talking to CEOs 0:06:42.920 --> 0:06:46.000 of companies that are owned by Berkshire Hathaway. Dan Sheridan 0:06:46.120 --> 0:06:47.680 was on with us just a few weeks ago ahead 0:06:47.680 --> 0:06:49.320 of the New York City Marathon. He's the CEO of 0:06:49.320 --> 0:06:51.560 Brooks Running. If you missed the conversation, check it out. 0:06:51.560 --> 0:06:53.520 It's great on our podcast feed. But he made the 0:06:53.520 --> 0:06:58.320 comment to us that he doesn't get micromanaged by Berkshire 0:06:58.360 --> 0:06:59.880 Hathaway executives. 0:07:00.080 --> 0:07:02.440 That that was the whose whole point, that he just 0:07:02.560 --> 0:07:05.840 does his managements. He bought managements that he believed in 0:07:05.960 --> 0:07:08.440 and then gave them the room to do what they 0:07:08.440 --> 0:07:11.400 were going to do. It's such a bizarre level of 0:07:11.480 --> 0:07:16.640 confidence where we, you know, take confidence as intervening, as 0:07:16.680 --> 0:07:17.200 stepping in. 0:07:17.320 --> 0:07:18.080 I know better. 0:07:18.680 --> 0:07:21.080 What he knew was he could spot a good company 0:07:21.120 --> 0:07:23.800 and good management and then give them the money that 0:07:23.840 --> 0:07:26.680 they needed to succeed and get out of the way. 0:07:26.840 --> 0:07:29.720 And that that is like the most admirable level of 0:07:29.800 --> 0:07:30.920 confidence that you can have. 0:07:31.080 --> 0:07:33.480 And someone who invested, yes in publicly held companies, but 0:07:33.560 --> 0:07:36.680 private companies, whether it sees Candies or whether it was Brooks. 0:07:36.720 --> 0:07:42.480 I mean there were so many durisl Charter Brokerage, Benjamin Moore, Yeah, guy. 0:07:42.600 --> 0:07:44.880 The lows and bought at the load like we would 0:07:44.920 --> 0:07:48.960 get would see these brands when they were discounted and 0:07:49.000 --> 0:07:49.720 go after them. 0:07:49.880 --> 0:07:52.240 My favorite is Seized Candy right now, it was just 0:07:52.280 --> 0:07:52.920 been in an airport. 0:07:52.960 --> 0:07:54.760 I'm like, I get those the nuts, you know, the 0:07:54.840 --> 0:07:55.840 nuts and the chewy ones. 0:07:55.920 --> 0:07:56.840 Yeah, I really love them. 0:07:56.880 --> 0:07:59.640 Hey, just get about a minute ago, just quickly the 0:07:59.720 --> 0:08:03.400 trade today it's obviously risk one I don't know, but 0:08:03.400 --> 0:08:04.679 doesn't feel like it has conviction. 0:08:05.320 --> 0:08:08.040 Well, I mean it makes sense in that if you 0:08:08.040 --> 0:08:10.520 were worried about airplanes getting off the ground, and you 0:08:10.560 --> 0:08:13.160 were worried about like things being you know, crushed to 0:08:13.200 --> 0:08:18.520 a halt by the by the shutdown that appears to 0:08:18.560 --> 0:08:21.520 be ending. However, the risks in front of us are 0:08:21.640 --> 0:08:22.960 the FED and what they're. 0:08:22.680 --> 0:08:23.200 Going to do. 0:08:23.480 --> 0:08:26.640 Earnings look great, but like what where the economy is 0:08:26.680 --> 0:08:30.280 going to go? Where jobs are? Those questions aren't answered. 0:08:30.320 --> 0:08:33.199 But today you should be buying. Like if you sold 0:08:33.320 --> 0:08:35.920 last week on the chaos, today you step back in. 0:08:36.120 --> 0:08:38.960 Yeah, exactly right, and you definitely are seeing investors doing that. 0:08:39.320 --> 0:08:40.120 Eric, thank you so much. 0:08:40.200 --> 0:08:42.800 Let me go anywhere back there. I know, I love it, 0:08:43.120 --> 0:08:45.480 like the perspective on Buffett. Very cool stuff, Eric Green 0:08:45.520 --> 0:08:48.520 or Bloomberg new Senior Editor, Equities America's. 0:08:49.000 --> 0:08:51.760 Stay with us. More from Bloomberg Business Week Daily coming 0:08:51.840 --> 0:08:52.720 up after this. 0:08:56.840 --> 0:09:00.720 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:09:00.760 --> 0:09:03.440 us live weekday afternoons from two to five eas during 0:09:03.679 --> 0:09:06.880 Listen on Apple Karplay and Android Otto with the Bloomberg 0:09:06.960 --> 0:09:09.640 Business app, or watch US live on YouTube. 0:09:10.920 --> 0:09:14.119 Well, today, the White House expressing support for the bipartisan 0:09:14.200 --> 0:09:16.559 deal to end the US shut down, a key development 0:09:16.600 --> 0:09:19.360 that makes it likely the government reopens within days, we 0:09:19.480 --> 0:09:22.840 shall see. The Senate is resuming deliberations on its deal 0:09:22.880 --> 0:09:26.680 with centrist Democrats, but as yet scheduling a vote for 0:09:26.720 --> 0:09:29.160 final passage, although our hearing some talk that it could 0:09:29.200 --> 0:09:30.560 happen maybe later this evening. 0:09:30.640 --> 0:09:33.440 Okay, well be tuned to that. Sen and lawmakers also 0:09:33.600 --> 0:09:37.439 still must wind its way through potentially time consuming procedures, 0:09:37.440 --> 0:09:39.400 and then the House members must travel back to Washington 0:09:39.440 --> 0:09:42.360 to vote for the first time since September nineteenth. That's 0:09:42.360 --> 0:09:44.000 a little bit of schoolhouse rock. 0:09:44.280 --> 0:09:44.880 Yeah is that? 0:09:45.080 --> 0:09:45.320 Yeah? 0:09:45.960 --> 0:09:48.160 But you can leave I guess see when the government 0:09:48.200 --> 0:09:51.800 shuts down and still get paid. But yeah, okay, okay, 0:09:51.920 --> 0:09:55.199 Carol Masser, go ahead, aw you all right, Let's see 0:09:55.280 --> 0:09:57.160 what the co founder and director of Economic Policy and 0:09:57.200 --> 0:10:00.319 Vada Partners has to say. She is Henrietta Trey's certainly 0:10:00.320 --> 0:10:03.560 a friend to us all here at Bloomberg. She joins 0:10:03.600 --> 0:10:06.439 us from New Orleans. Henrietta, glad you could join us. 0:10:06.480 --> 0:10:08.920 We talked to you. The surveillance team does a lot 0:10:08.960 --> 0:10:11.760 in terms of what's going in and around the belt Way. 0:10:11.880 --> 0:10:14.920 So is this real progress? Is it a political win? 0:10:15.200 --> 0:10:16.199 And if so, for whom? 0:10:16.600 --> 0:10:19.880 Yeah, we definitely have progress. Overnight, very excited about it. 0:10:19.920 --> 0:10:22.360 I'm optimistic that they will be able to get the 0:10:22.520 --> 0:10:25.560 House vote done as early as tomorrow. I think there's 0:10:25.559 --> 0:10:28.120 no better Veterans Day gift to give to our veterans 0:10:28.120 --> 0:10:30.480 than making sure that the military are paid and all 0:10:30.480 --> 0:10:33.520 the seven hundred thousand furloughed workers can get their paychecks 0:10:33.559 --> 0:10:35.120 and some back pay as well. 0:10:35.600 --> 0:10:38.199 So hopeful that that starts moving forward. For investors. 0:10:38.200 --> 0:10:40.240 The most important thing is that we're open by Friday, 0:10:40.320 --> 0:10:42.760 so we might start to get some BLS data from September. 0:10:43.040 --> 0:10:46.000 I think that that's possible. Staff's still getting briefed, but 0:10:46.200 --> 0:10:50.080 that's my expectation and fingers crossed, we're there. 0:10:50.240 --> 0:10:51.360 Do you think this is a solution. 0:10:52.040 --> 0:10:54.120 Yes, I mean I think that we've got the final package. 0:10:54.200 --> 0:10:56.280 We're going to have opportunities to keep. 0:10:56.080 --> 0:10:59.680 Having these ACA subsidy fights into December, and then we 0:10:59.760 --> 0:11:02.400 know that there's a January thirty a cr so we'll 0:11:02.440 --> 0:11:04.480 have the same exact fight all over again. Some of 0:11:04.520 --> 0:11:06.760 my smartest clients are saying, you know, what are the 0:11:06.760 --> 0:11:09.520 odds of a continued, you know, round after round of 0:11:09.520 --> 0:11:12.240 government shutdowns. And I think that if you look at 0:11:12.320 --> 0:11:16.360 what the two sides are taking away here. The Democrats 0:11:16.520 --> 0:11:20.120 are mad that they caved, and the Republicans and in 0:11:20.160 --> 0:11:22.840 particular President Trump have suffered quite a lot just on 0:11:22.880 --> 0:11:25.560 their own personal approval ratings. So it's kind of like 0:11:25.600 --> 0:11:28.840 playing chicken with a crazy person. You know, they're happy 0:11:28.960 --> 0:11:31.360 to see what happens, and that's that's what we walked 0:11:31.400 --> 0:11:31.920 into this den. 0:11:32.160 --> 0:11:34.320 You know, does it does it seem like Democrats gave 0:11:34.360 --> 0:11:37.480 in on this they're not getting what they wanted. 0:11:38.440 --> 0:11:41.240 Yeah, to the far left, that's definitely how they view it. 0:11:41.320 --> 0:11:44.959 They wanted the actual ACA subsidies extended. You can see 0:11:45.000 --> 0:11:49.240 why for voters over the age of sixty, your ACA 0:11:49.400 --> 0:11:52.880 premiums are going up nine hundred and nineteen dollars. It's 0:11:52.880 --> 0:11:56.240 pretty substantial. The average one people in their thirties forties 0:11:56.280 --> 0:11:59.040 is almost two hundred dollars. So these are you know, 0:11:59.200 --> 0:12:02.280 very real benefits for I think it's forty two million Americans. 0:12:02.320 --> 0:12:05.160 So definitely something that Democrats wanted to see delivered. But 0:12:05.200 --> 0:12:06.760 the good news for them is that they got the 0:12:06.800 --> 0:12:09.360 fight back on the front burner. And when you were 0:12:09.400 --> 0:12:12.200 standing at a low thirties percent approval rating, you really 0:12:12.240 --> 0:12:14.480 don't have much further to drop, So the Democrats getting 0:12:14.480 --> 0:12:17.400 engaged in this fight and pushing back against what has 0:12:17.480 --> 0:12:20.400 otherwise been ten months of Trump running the board is 0:12:20.440 --> 0:12:24.200 not all bad on the Republican side for President Trump. 0:12:24.240 --> 0:12:28.280 His disapproval rating has doubled since October. 0:12:28.600 --> 0:12:30.280 So there's a lot of reason to. 0:12:30.280 --> 0:12:32.559 Think that even though the ACA subsidies didn't get extended, 0:12:32.559 --> 0:12:33.880 Democrats fought the right fight. 0:12:34.200 --> 0:12:36.200 I think that that's what Schumer and Jeffries believe. 0:12:36.240 --> 0:12:39.000 You know, as we watch the political fights that go 0:12:39.080 --> 0:12:41.000 on in Washington and have for a long time, no 0:12:41.040 --> 0:12:43.760 matter who's in the White House, at least over the 0:12:43.840 --> 0:12:46.800 last few administrations, I think it's safe to say, Henrietta, 0:12:46.880 --> 0:12:48.920 what really struck us all? And I want to go 0:12:48.960 --> 0:12:51.839 back to those snap benefits that one in eight Americans 0:12:52.920 --> 0:12:54.080 need food assistants. 0:12:54.600 --> 0:12:55.400 Why is that? 0:12:55.440 --> 0:12:59.080 What does that say about lawmakers, Republicans and Democrats through 0:12:59.160 --> 0:13:01.720 several White House and the job that they have not 0:13:01.840 --> 0:13:04.040 been doing for the bulk of Americans. I mean, aren't 0:13:04.080 --> 0:13:06.280 we the world's largest, in richest nation. 0:13:07.400 --> 0:13:08.240 Yeah, we sure are. 0:13:08.280 --> 0:13:10.160 And I think it's important to note that seventy percent 0:13:10.200 --> 0:13:12.400 of those recipients have full time jobs, so it's not 0:13:12.400 --> 0:13:12.880 like these. 0:13:12.720 --> 0:13:13.760 People aren't working. 0:13:14.280 --> 0:13:17.160 A disproportionate number of them are young people and also 0:13:17.240 --> 0:13:19.640 old people over the age of sixty or sixty five. 0:13:20.080 --> 0:13:22.840 But you know, if you really want to get into 0:13:22.840 --> 0:13:25.360 the nitty gritty, why are people seventy percent of these 0:13:25.400 --> 0:13:28.800 recipients on food stamps if they have full time jobs, 0:13:28.840 --> 0:13:31.840 what is their pay? I think there's some really interesting 0:13:32.240 --> 0:13:34.520 conversation that always comes up when we talk about snap 0:13:34.520 --> 0:13:38.240 benefits of what are these giant corporations Walmart, Target, Dollar, General, 0:13:38.240 --> 0:13:40.199 et cetera. What are they paying their employees that they 0:13:40.200 --> 0:13:43.400 still also need to have food stamps? So it's it's 0:13:43.520 --> 0:13:46.320 really everyone to blame here on this front. 0:13:46.520 --> 0:13:50.160 Why is this though, not something that gets pushed further 0:13:50.880 --> 0:13:53.720 in Congress with lawmakers. 0:13:53.880 --> 0:13:56.720 Well, especially in a year like this one where they're 0:13:56.760 --> 0:13:58.800 focused on cutting federal spending. 0:13:59.000 --> 0:14:01.120 I mean, and you look at the one big, beautiful bill. 0:14:01.360 --> 0:14:07.480 There were repeated instances of cutting food stamps, back limiting eligibility, 0:14:07.800 --> 0:14:11.400 all in the name of saving money, which is interesting 0:14:11.520 --> 0:14:13.280 given that it was a three and a half trillion 0:14:13.320 --> 0:14:17.439 dollar deficit increasing bill, and they eliminated the current policy baseline, 0:14:17.440 --> 0:14:20.440 which forces Congress to pay for things going forward. So 0:14:20.720 --> 0:14:24.520 the decisions around trimming federal spending are very proactive. They're 0:14:24.560 --> 0:14:27.680 on purpose, and that was across Medicaid and Snap in 0:14:27.760 --> 0:14:28.920 the One Big Beautiful Bill. 0:14:29.000 --> 0:14:30.080 So I don't know. 0:14:30.040 --> 0:14:32.600 That this is necessarily seen as a problem. To see 0:14:32.640 --> 0:14:35.560 the limitations. It's part of making the government smaller, which 0:14:35.560 --> 0:14:37.920 is what COP and the Republican Conference are trying to do. 0:14:38.080 --> 0:14:39.400 Let me throw on top of this and forgive men. 0:14:39.400 --> 0:14:40.880 I don't have the details right in front of us, 0:14:40.920 --> 0:14:42.400 but we were talking about this in the news, and 0:14:42.440 --> 0:14:45.520 that the President is now proposing giving Americans a two 0:14:45.520 --> 0:14:46.840 thousand dollars check, Like, how. 0:14:46.720 --> 0:14:48.240 Do we do that? I don't understand. 0:14:48.320 --> 0:14:50.840 We talk about deficit and if the economy is doing well, 0:14:50.840 --> 0:14:51.800 why do we have to do that. 0:14:51.840 --> 0:14:53.640 Secretary Busons said it could come in the form. 0:14:53.520 --> 0:14:56.400 Of tax cuts, okay, but. 0:14:56.320 --> 0:14:58.560 The President said today that any extra would go down 0:14:58.600 --> 0:14:59.640 to pay the debt. 0:15:00.880 --> 0:15:02.760 And that's exactly the problem. There is no extra. 0:15:02.880 --> 0:15:06.080 So the trade deficit, the tariffs is my bread and butter. 0:15:06.120 --> 0:15:07.280 And I would just say the following. 0:15:07.320 --> 0:15:09.520 When we did the Cares Act under the President Trump's 0:15:09.520 --> 0:15:11.960 first term, at the height of the pandemic, we sent 0:15:12.000 --> 0:15:14.440 out rebate checks. The President was very happy to send 0:15:14.440 --> 0:15:16.920 those checks out. They were very popular. They cost two 0:15:16.960 --> 0:15:20.880 hundred and ninety two billion dollars. The tariffs have thus 0:15:20.880 --> 0:15:24.280 far this year, for AIBA brought an eighty nine billion dollars. 0:15:24.640 --> 0:15:28.280 So if you're going to increase the rebate check from 0:15:28.280 --> 0:15:31.080 fourteen hundred bucks to two thousand dollars, and you know 0:15:31.080 --> 0:15:33.160 the presumer they'll be a qualifying child credit a five 0:15:33.200 --> 0:15:35.960 hundred bucks something along those lines, you now have to 0:15:35.960 --> 0:15:40.600 spend four hundred billion dollars of the eighty nine billion 0:15:40.640 --> 0:15:42.720 dollars in revenue that you brought in from tariffs. And 0:15:42.840 --> 0:15:45.280 why are you sending the rebate checks in the first place. 0:15:45.560 --> 0:15:47.680 Is it because costs of goods are increased? Is it 0:15:47.720 --> 0:15:50.560 because of the tariffs? It sure enough is so you 0:15:50.640 --> 0:15:53.160 have this really circular logic. That's a huge problem, and 0:15:53.200 --> 0:15:56.720 there is no leftover revenue to reduce the deficit, which 0:15:56.720 --> 0:15:58.680 is of course what bond markets are so focused on. 0:15:58.800 --> 0:16:02.240 Hey, Henrietta, just last quest on healthcare and whether or 0:16:02.280 --> 0:16:05.400 not Republicans come to the negotiating table in good faith 0:16:05.440 --> 0:16:07.720 when it comes to the Affordable Care Act later on. 0:16:07.840 --> 0:16:11.080 That's what Democrats want to see. Does that can get 0:16:11.120 --> 0:16:13.320 kicked down the road to January and do they meet. 0:16:14.560 --> 0:16:17.120 I've gotten that question a lot this afternoon from clients. 0:16:17.280 --> 0:16:18.080 I think yes. 0:16:18.760 --> 0:16:20.720 When I speak with Republican staff, they say that it's 0:16:20.720 --> 0:16:22.480 going to take two or three weeks to hammer out 0:16:22.520 --> 0:16:24.840 any kind of an agreement on income cap levels, on 0:16:24.840 --> 0:16:28.400 the high amendments related to abortion, on the phasing and 0:16:28.440 --> 0:16:30.840 the duration of any ACA subsidies. I think it's a 0:16:30.840 --> 0:16:34.440 bridge too far to ask this extremely acrimonious Congress to 0:16:34.480 --> 0:16:38.480 come together in the twelve legislative days they have before 0:16:38.520 --> 0:16:40.600 the end of the year to get a solution. I 0:16:40.600 --> 0:16:43.160 think it's much more realistic that they need a deadline, 0:16:43.200 --> 0:16:46.880 and so January thirtieth, that January time horizon is probably 0:16:46.920 --> 0:16:49.120 going to be more intense around the EC subsidies getting 0:16:49.120 --> 0:16:49.680 extended or not. 0:16:49.960 --> 0:16:52.440 All right, so love, thank you so much, Henriette co 0:16:52.560 --> 0:16:55.920 founder and director of Economic Policy at VTA Partners, Henrietta 0:16:56.000 --> 0:16:58.480 Trees joining us from New Orleans. All Right, that's the 0:16:58.560 --> 0:17:02.240 latest tim on the US government shut down and expectations 0:17:02.240 --> 0:17:05.200 that were nearing an end. Has definitely put the risk 0:17:05.400 --> 0:17:06.639 on trade on Wall Street. 0:17:06.720 --> 0:17:08.960 Yeah, traders rushing to the riskiest corners of the market. 0:17:09.000 --> 0:17:12.200 Stocks climbing alongside bitcoin, as the US Senate advanced have planned, 0:17:12.240 --> 0:17:16.040 and the longest ever government shutdown also removes significant economic 0:17:16.080 --> 0:17:19.080 headwind bond ed bonds edged lower. We've got a great 0:17:19.080 --> 0:17:21.639 guest back with us, Sally McCartney as managing director of 0:17:21.640 --> 0:17:25.480 wealth management and private wealth advisor with Alignment Partners at UBS. 0:17:25.480 --> 0:17:28.280 She's got more than a billion dollars in assets under management. 0:17:28.280 --> 0:17:31.240 She joins us here in the Bloomberg BusinessWeek studio. The 0:17:31.320 --> 0:17:35.280 risk on trade today sustainable. I mean, it seems like 0:17:35.280 --> 0:17:37.520 we're seeing the riskiest corners of the market get a bid. 0:17:38.160 --> 0:17:40.040 We've seen a lot of back and forth in this 0:17:40.200 --> 0:17:42.520 kind of trade. So last week was the worst week 0:17:42.560 --> 0:17:45.800 for the Nasdaq since April, since we began the Terarff tantrum. 0:17:45.920 --> 0:17:48.600 So what happened last week I think was a combination 0:17:48.800 --> 0:17:51.159 of a lull in earnings news. First of all, we 0:17:51.200 --> 0:17:53.280 had gotten all the good earnings news out and then 0:17:53.320 --> 0:17:57.440 everybody waits till Nvidia. We also had the end of October, 0:17:57.440 --> 0:17:59.360 which is a fiscal end for a lot of fund 0:17:59.440 --> 0:18:03.399 so there was a lot of purging and taking profits. 0:18:03.920 --> 0:18:09.080 And then, for whatever reason, the sentiment in data was 0:18:09.160 --> 0:18:12.760 really unpleasant last week, and people chose investors small and 0:18:12.840 --> 0:18:17.040 large retail investors chose not chose not to show up, 0:18:17.080 --> 0:18:19.560 which has been the bid that's been getting the market through, 0:18:20.000 --> 0:18:22.199 and they chose to focus on things that, given what 0:18:22.200 --> 0:18:24.960 you just talked about, are not particularly surprising, like the 0:18:25.040 --> 0:18:28.879 lowest consumer sentiment out of your Michigan ever. Right, So, 0:18:29.000 --> 0:18:31.480 I think you know when I look at everything that 0:18:31.520 --> 0:18:33.119 you talk about, and I love the way that you 0:18:33.160 --> 0:18:35.080 talk about it on the show because it's from an 0:18:35.119 --> 0:18:40.400 economic perspective, but also from a social and human perspective. Clearly, 0:18:40.440 --> 0:18:46.000 what's happening is the low end consumer is getting squeezed. 0:18:46.119 --> 0:18:49.119 Things are much more expensive. There are probably many of 0:18:49.160 --> 0:18:54.080 those people who are on snap benefits who haven't gotten 0:18:54.119 --> 0:18:57.119 paychecks in a long time, and they're having a real 0:18:57.280 --> 0:19:00.800