WEBVTT - US Government Shutdown Looms 0:00:02.400 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.200 --> 0:00:12.080 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:12.160 --> 0:00:14.800 weekdays at ten am Eastern on Apple Car, play in 0:00:14.840 --> 0:00:17.840 Android Auto with the Bloomberg Business App, Listen on demand 0:00:17.920 --> 0:00:22.000 wherever you get your podcasts, or watch us live on YouTube. 0:00:22.960 --> 0:00:25.520 This is Bloomberg Intelligence Radio. Let me set the stage 0:00:25.520 --> 0:00:28.200 for you. So if you're a political commentator, as if 0:00:28.280 --> 0:00:30.800 yesterday you're like cool, I'm like really close to being 0:00:30.840 --> 0:00:32.720 on vac Like I'm just going to get through the seat. 0:00:32.720 --> 0:00:35.040 The Continuing Resolution is going to happen. The Government's not 0:00:35.040 --> 0:00:36.720 going to shut down Friday. I'm going to get to 0:00:36.760 --> 0:00:38.960 go and go to a beach and hang out and 0:00:39.000 --> 0:00:42.640 have a little drink with umbrellas. And then yesterday after 0:00:42.680 --> 0:00:45.480 four o'clock that dream gets dashed because at President Donald 0:00:45.479 --> 0:00:48.040 Trump is now elect is now opposing House Speaker Mike 0:00:48.080 --> 0:00:51.680 Johnson's plan to avoid that government shutdown instead now calling 0:00:51.720 --> 0:00:55.560 for a new approach that includes raising the debt ceiling, 0:00:56.520 --> 0:00:59.680 making it very complicated as to what that road is 0:01:00.200 --> 0:01:02.360 us as Henry to Trace, managing partner and director of 0:01:02.360 --> 0:01:05.039 Economic Policy at Beta Partners, not sipping on her little 0:01:05.120 --> 0:01:09.440 umbrella drink, Henrietta. 0:01:07.920 --> 0:01:12.840 Why, Alex I feel very triggered by that entire introduction. 0:01:13.240 --> 0:01:17.240 I appreciated all, but that you're exactly right. 0:01:18.560 --> 0:01:22.360 I think that this is an incredibly smart move for 0:01:22.800 --> 0:01:26.080 the incoming Trump team. They have no skin in the 0:01:26.080 --> 0:01:30.039 game right now, he's not the president. And what's going 0:01:30.120 --> 0:01:33.000 to happen next year, as we've been discussing with clients 0:01:33.000 --> 0:01:35.200 for months now, is that they're going to have to 0:01:35.280 --> 0:01:38.880 face perpetual risks of government shutdown and then in July 0:01:39.440 --> 0:01:41.800 a debt ceiling negotiation with Democrats. 0:01:41.840 --> 0:01:43.440 And let's just think about the numbers here. 0:01:43.600 --> 0:01:47.840 In twenty twenty three, seventy one Republicans voted against increasing 0:01:47.880 --> 0:01:48.520 the debt ceiling. 0:01:48.800 --> 0:01:51.080 There's only ten blue dogs. 0:01:50.760 --> 0:01:53.640 Of the Democratic Conference of Moderates who might cross the 0:01:53.680 --> 0:01:56.639 aisle and vote for a debt ceiling hike sometime this week. 0:01:56.880 --> 0:02:00.120 So basically, the math just does not add up for 0:02:00.240 --> 0:02:02.640 trying to get sixty votes in the Senate and two 0:02:02.720 --> 0:02:04.800 hundred and eighteen votes in the House to increase the 0:02:04.840 --> 0:02:07.400 debt ceiling in the next forty eight hours. But it's 0:02:07.440 --> 0:02:10.000 incredibly intelligent of Trump to try to get it out 0:02:10.000 --> 0:02:11.600 of the way because it is going to be a 0:02:11.720 --> 0:02:15.240 massive impediment to the Republican agenda in twenty twenty five 0:02:15.320 --> 0:02:16.840 if it's not cleared early. 0:02:16.960 --> 0:02:19.799 If there's a government shutdown, won't the blame be placed 0:02:19.880 --> 0:02:23.160 upon the Republican Party? And if so, how does that 0:02:23.200 --> 0:02:23.880 calculus work? 0:02:24.720 --> 0:02:26.120 Right? It always is. 0:02:26.200 --> 0:02:29.520 The blame is always always placed on the Republican Conference. 0:02:29.760 --> 0:02:32.480 They are the ones who instigate government shutdowns, going as 0:02:32.480 --> 0:02:35.080 far back as Ted Cruz and what was that twenty eleven, 0:02:35.120 --> 0:02:38.680 twenty thirteen. You know, it's playing to the American voter 0:02:38.880 --> 0:02:42.160 that Republicans are to blame. But there's a disproportionate amount 0:02:42.280 --> 0:02:45.679 of Democrats who care about a government shutdown versus Republicans 0:02:45.720 --> 0:02:47.440 who don't see it as too much of a big deal. 0:02:47.680 --> 0:02:49.920 The optics are obviously atrocious. You're going to. 0:02:49.960 --> 0:02:54.600 Send federal employees home during the holidays over Christmas without 0:02:54.600 --> 0:02:57.280 a paycheck in the next two weeks. You're going to 0:02:57.320 --> 0:03:00.639 shut all the national parks where Americans are travel at 0:03:00.919 --> 0:03:04.200 pretty high rates right now over the holidays. So it's 0:03:04.200 --> 0:03:07.720 definitely not good optics. It makes Congress looks dysfunctional, But 0:03:07.760 --> 0:03:11.080 what it's really showing us and the Christmas present for 0:03:11.120 --> 0:03:13.360 investors right now is that this is a precursor of 0:03:13.400 --> 0:03:15.919 just how dysfunctional Republicans are going to be next year. 0:03:16.200 --> 0:03:19.840 They have not had the votes for government funding bills 0:03:19.880 --> 0:03:23.560 for a decade, and usually it's Democrats to bail them out. 0:03:23.560 --> 0:03:26.240 And right now Kee Jefferies and Chuck Schumer are holding 0:03:26.240 --> 0:03:28.800 their party together to say, look, this is your mess. 0:03:29.000 --> 0:03:30.240 You bail yourself out of this. 0:03:30.480 --> 0:03:30.679 Yeah. 0:03:30.760 --> 0:03:32.840 I feel like I use that with my daughter sometimes too. 0:03:33.360 --> 0:03:35.600 But the dead ceiling issue, right like moving forward the 0:03:35.600 --> 0:03:37.760 dead ceialing issue. So Trump won't have to deal with 0:03:37.760 --> 0:03:39.880 it in the summer, but instead that we'll come under 0:03:39.880 --> 0:03:41.680 Biden's watch. He said to NBC that he'd like to 0:03:41.680 --> 0:03:44.880 get rid of the debt ceiling all together. How do 0:03:44.920 --> 0:03:47.160 you think that particular part plays out. 0:03:47.600 --> 0:03:51.080 Yeah, I mean that's very expected from Trump. 0:03:51.160 --> 0:03:54.240 He has famously said, let's just see what happens if 0:03:54.240 --> 0:03:57.320 you default, So I think his position on this is 0:03:57.480 --> 0:04:00.480 very clear. It's a nightmare for any present to have 0:04:00.520 --> 0:04:03.040 to increase the debt ceiling because you need to negotiate 0:04:03.080 --> 0:04:06.119 with the other party. The difference here is that you can, 0:04:06.240 --> 0:04:08.960 in fact increase the debt ceiling be a reconciliation. So 0:04:09.000 --> 0:04:12.040 if Republicans do not want to negotiate with Democrats. They 0:04:12.160 --> 0:04:14.880 all they have to do is include a debt ceiling 0:04:15.040 --> 0:04:18.359 hike in the next reconciliation bill, which the Senate Budget 0:04:18.360 --> 0:04:20.560 Committee is hoping to mark up as early as the 0:04:20.560 --> 0:04:23.920 first week of January. So there is an alternative here 0:04:23.960 --> 0:04:26.760 and Democrats know that. So if Republicans really do want 0:04:26.800 --> 0:04:29.040 it off the table, they have a path forward that 0:04:29.080 --> 0:04:30.760 they just need to carry the votes. They just need 0:04:30.760 --> 0:04:32.680 to find two hundred and seventeen, and there have never 0:04:32.720 --> 0:04:35.880 been two hundred and seventeen Republican votes for the debt sealing. 0:04:36.160 --> 0:04:39.400 Henrietta, are you surprised that we have heard relatively little, 0:04:39.480 --> 0:04:42.640 if anything from the Biden administration. It's President elect Trump 0:04:42.800 --> 0:04:44.760 and his representatives taken all the auction in out of 0:04:44.800 --> 0:04:45.800 room about this topic. 0:04:46.560 --> 0:04:47.240 Absolutely. 0:04:47.440 --> 0:04:50.279 I think that's a really important dynamic to all this. 0:04:50.720 --> 0:04:54.479 We know that Joe Biden, as president and even a Senator, 0:04:54.520 --> 0:04:58.440 has always preferred sort of the diplomatic, negotiated solution. Democrats 0:04:58.560 --> 0:05:02.560 generally believe the government phone for a purpose, and I 0:05:02.600 --> 0:05:05.920 think if Biden wanted to insert himself into this process, 0:05:06.000 --> 0:05:09.400 he could, but you're absolutely correct, he's been completely off 0:05:09.440 --> 0:05:12.679 the radar in this entire conversation, which admittedly only popped 0:05:12.720 --> 0:05:14.120 up in the last twenty four hours. 0:05:14.320 --> 0:05:16.160 So what do we think happens? 0:05:16.200 --> 0:05:16.320 Like? 0:05:16.560 --> 0:05:19.560 Are we extending programming on television and radio on Friday 0:05:19.600 --> 0:05:20.520 to cover the weekend? 0:05:20.720 --> 0:05:20.800 Like? 0:05:20.839 --> 0:05:22.080 What are we think in here? 0:05:22.640 --> 0:05:24.719 Yeah, my odds of a shutdown are about twenty percent 0:05:24.839 --> 0:05:26.960 right now, which is admittedly very high for me. I'm 0:05:27.000 --> 0:05:29.240 usually in this zero to five percent range from a shutdown, 0:05:29.240 --> 0:05:31.680 so I'm much higher than I usually am. But I 0:05:31.680 --> 0:05:34.159 don't think a shutdown is guaranteed. I think that Speaker 0:05:34.240 --> 0:05:37.840 Johnson and indeed President elect Trump should want the government 0:05:37.880 --> 0:05:40.360 to stay open so that on January third, they can 0:05:40.400 --> 0:05:42.520 get the ball rolling, they can elect their speaker, they 0:05:42.520 --> 0:05:44.960 can start passing if this fill your twenty twenty five budget, 0:05:45.200 --> 0:05:48.040 paving the way for a reconciliation bill on border and 0:05:48.080 --> 0:05:50.880 then a future package on the tax package next year. 0:05:51.080 --> 0:05:53.680 That is, you know, investors should take away one thing today. 0:05:53.720 --> 0:05:55.560 It's that the tax bill it's going to take all year. 0:05:55.800 --> 0:05:57.240 It's going to be very hard to write, and there's 0:05:57.240 --> 0:05:59.320 some very strong chance that Republicans have to negotiate with 0:05:59.320 --> 0:06:02.400 Democrats on it, and that odds are growing as this 0:06:02.520 --> 0:06:05.800 debt ceiling, A c our fight is exhibiting in real time, 0:06:05.800 --> 0:06:07.640 but I don't think we'll shut down. I think a 0:06:07.760 --> 0:06:10.600 very short term, maybe two weeks stopgap bill is what 0:06:10.680 --> 0:06:12.840 we're going to see probably tomorrow morning. 0:06:13.240 --> 0:06:13.600 Interesting. 0:06:13.640 --> 0:06:15.159 Henrietta, thank you so much for joining us. I know 0:06:15.200 --> 0:06:18.040 you're super busy when all this news breaking here. Henrietta 0:06:18.040 --> 0:06:20.360 trez Manage, your partner and director of economic policy for 0:06:20.440 --> 0:06:23.400 Vida Partners. She has safely asconced down there in New Orleans. 0:06:23.440 --> 0:06:25.160 She's like, I'm not going to Washington or New York 0:06:25.160 --> 0:06:25.960 any that's silliness. 0:06:26.040 --> 0:06:28.279 Yeah, but she's probably not getting the umbrella drink either. 0:06:28.160 --> 0:06:29.920 So yeah, she's not in there. She spent the work. 0:06:29.920 --> 0:06:30.960 A little wind there is. 0:06:30.920 --> 0:06:36.240 That you're listening to the Bloomberg Intelligence Podcast. Catch us 0:06:36.279 --> 0:06:39.680 live weekdays at ten am Eastern on applecar Play and 0:06:39.680 --> 0:06:42.960 Android Otto with the Bloomberg Business. You can also listen 0:06:43.080 --> 0:06:46.160 live on Amazon Alexa from our flagship New York station, 0:06:46.520 --> 0:06:50.880 Just say Alexa Play Bloomberg eleven thirty, Alex. 0:06:50.720 --> 0:06:52.320 Steel, Paul Sweeney. We're live here in on our Bloomberg 0:06:52.320 --> 0:06:55.240 Interactive Broker Studio. We're streaming live on YouTube as well, 0:06:55.240 --> 0:06:57.599 also ahead over YouTube dot com search Bloomberg Podcast, and 0:06:57.640 --> 0:07:00.880 that's where you will find us again. Yesterday, the market 0:07:00.920 --> 0:07:04.240 really surprised, let's put it that way, on the messaging 0:07:04.279 --> 0:07:05.800 coming out of the Fed here as it relates to 0:07:06.120 --> 0:07:08.680 potential cuts. In twenty twenty five, we had the S 0:07:08.720 --> 0:07:10.480 and P off two and a half percent, the Nastack 0:07:10.520 --> 0:07:13.400 off three and a half percent. Yesterday, big, big volume 0:07:13.400 --> 0:07:16.560 across the board, a little bit of a rebound here 0:07:16.720 --> 0:07:18.480 this morning. Let's see where we go from here. David 0:07:18.560 --> 0:07:22.320 Kodla joins US founder, chief executive officer, and chief investment 0:07:22.400 --> 0:07:27.400 strategist at Mainstay Capital Management, Troy, Michigan, A great town, 0:07:27.520 --> 0:07:30.680 by the way, been there, Hey, David, talk to us about, 0:07:30.880 --> 0:07:32.960 you know, kind of how you saw the market action 0:07:33.200 --> 0:07:35.920 yesterday afternoon and then maybe today kind of what's the 0:07:35.960 --> 0:07:39.119 market telling me about the how it views this federal reserve. 0:07:40.600 --> 0:07:44.640 Yeah, I think that the Good morning Paul per your 0:07:45.800 --> 0:07:49.200 lead into the segment. I think the markets and investors 0:07:49.240 --> 0:07:53.880 were surprised, and I think also confused. I think the 0:07:53.920 --> 0:07:58.680 presser was quite confusing. Jay Powell, you know, if I 0:07:58.760 --> 0:08:00.560 heard all that and here. 0:08:00.160 --> 0:08:01.680 Talking about why why. 0:08:01.480 --> 0:08:04.360 He was hiking rates a quarter point would have been 0:08:04.400 --> 0:08:07.480 a good explanation, but they're not right. They're cutting a 0:08:07.560 --> 0:08:11.640 quarter point. So there's some real confusion about you know, 0:08:11.680 --> 0:08:15.600 where where the FED is headed. Are they making another 0:08:15.600 --> 0:08:18.640 policy mistake as we speak, And as far as the 0:08:18.680 --> 0:08:22.560 FED is concerned, you know, they're their their problem is uncertainty. 0:08:22.560 --> 0:08:24.400 You know, we have a saying in our industry, right 0:08:24.520 --> 0:08:27.840 the markets hate uncertainty. Well, the FED hates uncertainty too. 0:08:28.440 --> 0:08:30.760 And they really don't know what to expect for inflation 0:08:30.880 --> 0:08:34.640 next year with Trump policies still not being fully known, 0:08:34.920 --> 0:08:37.800 how they'll get rolled out, when they'll get rolled out. Uh, 0:08:38.280 --> 0:08:42.360 some of those very potentially very inflationary. They don't know 0:08:42.520 --> 0:08:45.040 how much inflation will be fighting next year. But the 0:08:45.080 --> 0:08:47.880 presser was more about the labor market, you know, the 0:08:47.920 --> 0:08:49.080 other side of the mandate. 0:08:49.559 --> 0:08:51.199 So, uh, the. 0:08:51.160 --> 0:08:53.320 Market was just confused in the face of that. I 0:08:53.360 --> 0:08:56.760 think it was you know, shoot now asked questions later. 0:08:57.600 --> 0:09:01.319 I guess the question that rose yes to many economists 0:09:01.320 --> 0:09:04.280 is that the FED is at a risk of making 0:09:04.320 --> 0:09:07.559 a policy mistake in that they're going to fight and 0:09:07.679 --> 0:09:10.480 inflation that they don't necessarily need to fight at the 0:09:10.520 --> 0:09:13.079 expense of the labor market. That was one narrative that 0:09:13.160 --> 0:09:14.640 some economists were putting out there. 0:09:14.920 --> 0:09:19.640 What do you think of that, Well, good morning, Alex. 0:09:19.960 --> 0:09:22.880 I think that I think they're focused on the I 0:09:22.880 --> 0:09:24.880 think they're focused on the wrong thing. I think that 0:09:25.000 --> 0:09:28.679 twenty twenty five is going to be the year of 0:09:28.720 --> 0:09:35.480 the stubborn inflation battle. Whether it's the massive federal deficit, 0:09:35.559 --> 0:09:39.679 spending that's going to happen, tax cuts, all these things 0:09:39.679 --> 0:09:44.959 that are good for the economy, but in tariffs especially 0:09:45.559 --> 0:09:52.120 that could cause a rise in inflation. It's that area 0:09:52.160 --> 0:09:54.600 that is more of the problem, I think than labor, 0:09:55.160 --> 0:09:57.280 and that's where you're seeing on the long end of 0:09:57.320 --> 0:10:00.800 the curve. Look what's happened since September eight teenth. Over 0:10:00.800 --> 0:10:03.640 the past three months, the Fed has cut one hundred 0:10:03.679 --> 0:10:08.040 basis points. The ten year yield has gone up nearly 0:10:08.160 --> 0:10:11.440 one hundred basis points. That is not the normal reaction 0:10:11.559 --> 0:10:14.199 function that we expect. In fact, we usually the ten 0:10:14.280 --> 0:10:17.640 year follows by some degree to what the Fed is doing. 0:10:17.920 --> 0:10:22.640 So that's the bond vigilantes. At Yard Denny's coin term 0:10:22.720 --> 0:10:25.240 back in the nineties, it's a bond vigilantes that are 0:10:25.280 --> 0:10:28.120 fighting the FED. And so there's just a lot of 0:10:28.120 --> 0:10:30.559 confusion out there. I think uncertainly on the part of 0:10:30.600 --> 0:10:33.800 the FED. That's why the press or seem confused. And 0:10:33.840 --> 0:10:36.680 I think there's they need to be looking more towards 0:10:36.679 --> 0:10:38.679 inflation than labor right now in my opinion. 0:10:39.240 --> 0:10:41.800 David, you've been in these markets many years. You've seen 0:10:42.040 --> 0:10:44.760 all kinds of cycles and news events, and it looks 0:10:44.800 --> 0:10:49.640 like we may have another government shutdown. As an investor, 0:10:51.679 --> 0:10:54.000 how does that factor in, if at all, to your outlook? 0:10:55.240 --> 0:10:57.480 You know, and back in the mid nineties when we 0:10:57.960 --> 0:11:03.000 had this first government shut down pending, it was armageddon 0:11:03.120 --> 0:11:06.680 and the markets reacted violently to it. As years have 0:11:06.760 --> 0:11:10.680 gone by, we've seen that investors in the markets kind 0:11:10.679 --> 0:11:13.960 of shrug off the antics in Washington, d C. More 0:11:14.000 --> 0:11:16.800 and more. And for many of these types of events, 0:11:16.840 --> 0:11:19.760 we might get volatility for a day, maybe two days, 0:11:20.600 --> 0:11:25.480 but it passes. I think the markets investors have learned 0:11:25.480 --> 0:11:28.280 to largely ignore it or have just chosen to, you know, 0:11:28.360 --> 0:11:31.600 and look at fundamentals. So, you know, whether we get 0:11:31.600 --> 0:11:34.840 a continuing resolution passed tomorrow, it doesn't come till Monday, 0:11:35.640 --> 0:11:38.360 there'll be some volatility in the markets potentially because of it, 0:11:39.000 --> 0:11:39.920 but then we'll move on. 0:11:41.360 --> 0:11:44.600 What do you make of the fact that the earnings 0:11:44.640 --> 0:11:47.800 picture is TBD for next year and that the consensus 0:11:47.880 --> 0:11:51.640 and then what the S and P is implying is 0:11:51.679 --> 0:11:54.800 pretty strong, and then you wind up having this uncertainty 0:11:54.960 --> 0:11:57.440 about the FED. Now, some might say it's okay because 0:11:57.480 --> 0:11:59.479 earnings are going to be really good, we're gonna have deregulation, 0:11:59.559 --> 0:12:01.440 and we're going to lower taxes, so yeah, we can 0:12:01.559 --> 0:12:03.839 justify that. But the other side is, we just don't know, 0:12:04.480 --> 0:12:07.000 and if rates stay stickier, as you say, that inflation 0:12:07.080 --> 0:12:10.640 actually increases a little bit, that that consensus might need 0:12:10.640 --> 0:12:12.000 to come down. Where do you stand on. 0:12:11.960 --> 0:12:14.800 That it might need to come down? But if we 0:12:15.360 --> 0:12:21.520 look at Trump's policies, deficit spending, deregulation, which will be 0:12:21.559 --> 0:12:26.040 good for US corporations across the board. Tariffs will be 0:12:26.120 --> 0:12:29.120 good for some bad for others, depending on if they're 0:12:29.120 --> 0:12:33.520 a multinational conglomerate bringing products in or whether it's even 0:12:33.600 --> 0:12:38.559 smaller mid cap companies where their input costs will be impacted. 0:12:39.040 --> 0:12:41.840 But I think net net, we're still looking for a 0:12:41.880 --> 0:12:45.280 good earning for good earnings growth next year, and that 0:12:45.440 --> 0:12:49.320 Trump policies net net will probably only benefit that. 0:12:50.520 --> 0:12:52.800 All right, thanks a lot, David, really appreciate. David Kudlah, 0:12:53.120 --> 0:12:56.880 founder's CEO and chief investment strategist at Mainstay Capital Management Intinent. 0:12:58.000 --> 0:13:01.560 You're listening to the Bloomberg and te podcast. Catch us 0:13:01.640 --> 0:13:04.559 live weekdays at ten am Eastern on Apple car Play 0:13:04.559 --> 0:13:07.280 and Android Auto with the Bloomberg Business App, Listen on 0:13:07.360 --> 0:13:10.600 demand wherever you get your podcasts, or watch us live 0:13:10.720 --> 0:13:12.400 on YouTube. 0:13:12.720 --> 0:13:14.839 All right, Nathan Dean was here yesterday and now he's 0:13:14.840 --> 0:13:17.320 back in DC. I can't I can't keep dragged on 0:13:17.360 --> 0:13:18.880 that the wholesali Thank yeah. 0:13:18.920 --> 0:13:19.120 All right. 0:13:19.200 --> 0:13:22.240 Nathan Dean, Bloomberg Intelligence and your policy analyst, joins us 0:13:22.240 --> 0:13:25.560 now from DC. And we had a totally different conversation 0:13:25.679 --> 0:13:28.000 yesterday and when it came to politics, and then today 0:13:28.040 --> 0:13:30.120 it's like, oh wait, maybe there will be a shutdown 0:13:30.679 --> 0:13:32.800 on Friday. Oh wait, maybe the debt ceiling is in 0:13:32.880 --> 0:13:35.839 play now rather than in the summer. What is your 0:13:35.880 --> 0:13:37.760 take and consensus someone's going to happen. 0:13:38.400 --> 0:13:40.400 Yeah, So yesterday I said there was a twenty percent 0:13:40.480 --> 0:13:42.280 chance of a government shutdown. I'm only going to go 0:13:42.320 --> 0:13:44.560 to forty percent. So I think I'm out of consensus here. 0:13:44.880 --> 0:13:46.520 But what I'm saying is that I think we're going 0:13:46.559 --> 0:13:48.440 to have a forty percent chance of a government shutdown 0:13:48.440 --> 0:13:51.760 by Monday, so tomorrow night. Obviously, the government shuts down 0:13:51.760 --> 0:13:54.560 at midnight unless it continuing resolution has been passed. But 0:13:54.679 --> 0:13:57.080 we've seen in the past before Congress sometimes takes the 0:13:57.080 --> 0:13:59.560 weekend to figure out a deal. And I think despite 0:13:59.559 --> 0:14:02.000 all the blome and the political prosting you're seeing at 0:14:02.040 --> 0:14:03.880 the moment, I think a deal can be made for 0:14:04.080 --> 0:14:07.920 clean CR plus, disaster AD plus potentially the one year 0:14:07.960 --> 0:14:11.200 extension of the farm bill because if something doesn't happen, 0:14:11.559 --> 0:14:14.320 that farm bill and the impact on farmers is going 0:14:14.360 --> 0:14:17.240 to be substantial in twenty twenty five if the government 0:14:17.240 --> 0:14:18.720 shuts down, and I think that's going to be what 0:14:19.120 --> 0:14:21.480 finally gets this deal over the edge. But like you said, 0:14:21.520 --> 0:14:23.160 the debt ceilings now involved, and there's going to be 0:14:23.200 --> 0:14:25.840 a lot more political hiccups to come, certainly over the 0:14:25.880 --> 0:14:26.960 next few weeks and months. 0:14:27.360 --> 0:14:31.160 All right, From my perspective, the politics and that people 0:14:31.200 --> 0:14:33.560 involved seem a little squirrely to me. I've got a 0:14:33.600 --> 0:14:38.760 president elect and I got some civilian dude really weighing 0:14:38.800 --> 0:14:41.680 in on this issue in a big way and moving markets. 0:14:42.320 --> 0:14:44.400 Yet I have a president who's actually sitting in the 0:14:44.480 --> 0:14:47.000 chair and I don't hear anything. What's going on in 0:14:47.040 --> 0:14:48.600 debt Washington? What are you guys doing down there? 0:14:49.040 --> 0:14:51.360 Yeah, so essentially what the Democrats are doing right now 0:14:51.480 --> 0:14:54.080 essentially letting the Republicans try and figure out what is 0:14:54.120 --> 0:14:56.800 the base case scenario. All these negotiations that you may 0:14:56.880 --> 0:14:59.040 know are taking place in the House with Speaker of 0:14:59.080 --> 0:15:00.720 the House Mike Johnson, and he was the one that 0:15:00.800 --> 0:15:03.560 negotiated a deal that Elon Musk and then later President 0:15:03.560 --> 0:15:05.560 Trump came in and said, no, we're not comfortable with. 0:15:05.920 --> 0:15:08.160 So what you need right now is the Republicans to 0:15:08.160 --> 0:15:10.240 come on board with an idea of a bill. 0:15:10.080 --> 0:15:11.040 That will pass the House. 0:15:11.360 --> 0:15:14.480 And we've even seen Senator Majority Leader Chuck Schumer say, 0:15:14.520 --> 0:15:16.800 you look, from the Senate perspective, we're just gonna let 0:15:16.800 --> 0:15:18.720 the House figure it out first and then we'll deal 0:15:18.760 --> 0:15:21.040 with it. And that's where the dead ceiling eventually comes in, 0:15:21.120 --> 0:15:23.920 because look, you can't really get a dead ceiling deal. 0:15:23.960 --> 0:15:27.120 I don't think within another like say, twenty four hours. 0:15:27.240 --> 0:15:29.840 These usually take weeks and months to hash out. And 0:15:29.880 --> 0:15:31.800 if the Republicans decided to move forward with a two 0:15:31.880 --> 0:15:34.720 year extension of the debt ceiling. More often than not, 0:15:34.800 --> 0:15:38.240 Republicans also insist on cuts as a result of that. 0:15:38.520 --> 0:15:40.520 So I think what will happen here is the Democrats 0:15:40.560 --> 0:15:42.440 sort of way back and they say, Okay, Speaker of 0:15:42.440 --> 0:15:45.040 the House, Michael Mike Johnson, you figure it out, you 0:15:45.080 --> 0:15:47.360 come up with a plan, you get this plan through 0:15:47.440 --> 0:15:50.240 the House, and then if that's the case, then we'll 0:15:50.240 --> 0:15:52.040 move forward and we'll deal with it on the Senate side. 0:15:52.080 --> 0:15:55.160 Because for everything you're talking about, just remember this has 0:15:55.200 --> 0:15:58.120 to be bipartisan because you need seven Democrats. I'm sorry, 0:15:58.440 --> 0:16:01.000 you're gonna need a lot of Democrats to come forth 0:16:01.240 --> 0:16:02.760 and get this through on the Senate side. 0:16:03.160 --> 0:16:04.520 Is the debt ceiling really in play? 0:16:05.560 --> 0:16:05.760 You know? 0:16:06.120 --> 0:16:06.480 Obviously? 0:16:06.560 --> 0:16:08.600 I think President Trump when he made the statement earlier 0:16:08.600 --> 0:16:11.200 today that they should abolish the debt ceiling, that's something 0:16:11.200 --> 0:16:13.880 the Democrats would actually welcome. We saw Senator Elizabeth Warren 0:16:13.920 --> 0:16:17.560 even say that she would support President Trump on that matter. 0:16:17.840 --> 0:16:19.520 I think that was also a way for President Trump 0:16:19.560 --> 0:16:22.560 potentially to give Speaker Johnson a way out, saying, look, 0:16:22.600 --> 0:16:24.560 if we can't get the debt ceiling done. But from 0:16:24.600 --> 0:16:27.360 the market perspective, what I would say, is the deadline 0:16:27.400 --> 0:16:29.440 is not December thirty. First, that's only the date in 0:16:29.480 --> 0:16:32.680 which Treasury can use extraordinary measures to keep her funding. 0:16:32.720 --> 0:16:36.120 The actual X date, if you will, is sometime next summer. 0:16:36.360 --> 0:16:38.640 So from the market perspective or in terms of government 0:16:38.640 --> 0:16:41.560 shutdowns and debt ceilings and so forth, we're not seeing much. 0:16:41.440 --> 0:16:43.760 Impact from all this political posturing at the moment. 0:16:44.120 --> 0:16:48.680 What's the feeling in Washington and Nathan about the status 0:16:48.720 --> 0:16:53.880 of Speaker Johnson because it feels like he's really under 0:16:53.880 --> 0:16:55.760 the gun here from all side. 0:16:55.840 --> 0:16:58.560 Yeah, you know, if we had had this conversation last week, 0:16:58.560 --> 0:17:01.280 I'd say it's fairly comfortable of his position, but today 0:17:01.320 --> 0:17:04.280 it's not. Senator Ran Paul even floated the idea of 0:17:04.320 --> 0:17:06.760 potentially having Elon Musk to be the Speaker of the House, 0:17:06.880 --> 0:17:08.080 because you don't have to be a member of the 0:17:08.080 --> 0:17:10.200 House of Representatives to be the Speaker. Now, I don't 0:17:10.200 --> 0:17:12.159 think that's going to happen, but a lot of the 0:17:12.280 --> 0:17:14.920 Johnson allies, if you have been sort of questioning whether 0:17:14.960 --> 0:17:17.200 or not he has the chops for the job early 0:17:17.280 --> 0:17:19.800 next year, and you know that election is going to 0:17:19.840 --> 0:17:21.080 take place on January third. 0:17:21.200 --> 0:17:22.280 So I'm not exactly. 0:17:22.359 --> 0:17:24.880 Sure, I'd be comfortable if I was in Speaker Johnson's position, 0:17:25.280 --> 0:17:27.280 But that being said, I don't know anybody else who 0:17:27.280 --> 0:17:27.840 wants the job. 0:17:28.280 --> 0:17:30.120 Wait, but let's get back to the Elon Muslin because 0:17:30.200 --> 0:17:32.040 I don't think I think I knew that, but then 0:17:32.040 --> 0:17:33.560 I think I forgot it, and then now I know 0:17:33.640 --> 0:17:35.360 it again. So just walk me through. So anyone can 0:17:35.359 --> 0:17:36.800 be Speaker of the House, like my mom could be 0:17:36.840 --> 0:17:38.480 Speaker of the House if she gets enough votes. 0:17:39.240 --> 0:17:41.080 Yeah, you know, if Paul wants to get back again 0:17:41.119 --> 0:17:42.920 at the government service, we can have Paul be Speaker 0:17:42.920 --> 0:17:43.320 of the House. 0:17:43.400 --> 0:17:43.600 You know. 0:17:44.160 --> 0:17:46.680 Essentially, it's something that goes back to obviously through the 0:17:46.960 --> 0:17:48.320 Constitution days and so forth. 0:17:48.359 --> 0:17:49.320 But there's been a. 0:17:49.280 --> 0:17:51.399 Lot of talk over the last few years about potentially 0:17:51.440 --> 0:17:54.080 having President Trump become Speaker of the House. During the 0:17:54.119 --> 0:17:56.879 Biden administration, obviously that didn't go anywhere. But the reason 0:17:56.880 --> 0:17:58.680 why Elon Musk would not want to be Speaker of 0:17:58.720 --> 0:18:00.720 the House is because, yes, you get to use the 0:18:00.720 --> 0:18:02.679 bully pulpit and you get to decide what's on the floor, 0:18:03.000 --> 0:18:04.919 but you also have to get into the nitty gritty 0:18:04.960 --> 0:18:08.400 and manage all two hundred and twenty Republican members next 0:18:08.480 --> 0:18:10.760 year when you only have a majority of five, and 0:18:10.800 --> 0:18:13.320 that is an extremely difficult position when you have to 0:18:13.359 --> 0:18:15.760 make tough choices like am I going to shut the 0:18:15.800 --> 0:18:18.399 government down? Or am I going to extend the farm 0:18:18.400 --> 0:18:20.879 bill one year and have provide all this relief to 0:18:20.920 --> 0:18:22.119 the American farmer base. 0:18:22.400 --> 0:18:23.520 That's a tough choice. 0:18:23.520 --> 0:18:26.280 And that's why I don't think the elon musk rumor, 0:18:26.320 --> 0:18:28.240 if you will, is a serious one. 0:18:28.600 --> 0:18:32.520 Okay, Okay, we're still processing. 0:18:32.600 --> 0:18:34.600 We're still processing. I also just feel like, I mean, 0:18:34.600 --> 0:18:37.440 can you imagine like running the house, running Spear, or 0:18:37.480 --> 0:18:40.680 being part of SpaceX, running your AI company, running Tesla, 0:18:41.320 --> 0:18:44.040 and there's a lot going on there. Okay, so give 0:18:44.080 --> 0:18:46.600