WEBVTT - Bloomberg Surveillance TV: December 26, 2024 0:00:02.400 --> 0:00:08.640 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.400 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.640 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.680 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.360 --> 0:00:24.840 from our global headquarters in New York City. We are 0:00:24.880 --> 0:00:27.640 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.240 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.879 anywhere else you listen, and as always on the Bloomberg 0:00:33.960 --> 0:00:35.800 Terminal and the Bloomberg Business app. 0:00:36.240 --> 0:00:39.440 We begin this hour, though with US futures mostly unchanged, 0:00:39.520 --> 0:00:42.320 a little bit softer following a Christmas Eve rally, investors 0:00:42.320 --> 0:00:45.720 hoping the so called Santa Claus rally will continue from 0:00:45.720 --> 0:00:48.879 the final four trading days of the year. I was 0:00:48.880 --> 0:00:52.000 looking at a stat this morning, Peter. Since nineteen fifty, 0:00:52.040 --> 0:00:54.320 the S and P five hundred has generated average and 0:00:54.360 --> 0:00:58.080 medium returns of one point three percent during the Santa 0:00:58.120 --> 0:01:01.600 Claus period, wildly outpacing them market's average seven day gain 0:01:01.840 --> 0:01:04.960 of three tens percent. And this is coming from LPL Financial. 0:01:05.200 --> 0:01:07.560 So actually, if you're willing to be in the markets 0:01:07.560 --> 0:01:11.160 around the holidays, maybe it'll be good for you. 0:01:11.160 --> 0:01:12.319 You know, normally it has been. 0:01:12.319 --> 0:01:14.480 I think this year though, everyone's kind of been looking 0:01:14.480 --> 0:01:17.039 for that opportunity to buy. We had the dip post FOMC. 0:01:17.440 --> 0:01:19.360 I think people bought that dip. I think we've already 0:01:19.360 --> 0:01:21.160 had a lot of the Santa Rally, then we had 0:01:21.160 --> 0:01:22.880 the weird stuff that went on with the budget. I 0:01:22.880 --> 0:01:24.640 think people are going to have to digest what does 0:01:24.640 --> 0:01:27.240 it look like in the new year with President Trump, 0:01:27.480 --> 0:01:29.600 with Musk, how's the economy. 0:01:29.160 --> 0:01:29.880 Going to shake out? 0:01:29.959 --> 0:01:31.920 And I think that's actually going to you know, maybe 0:01:32.200 --> 0:01:34.200 maybe we get the Santa rally, but I think come 0:01:34.240 --> 0:01:36.440 early January, we're going to get a lot of volatility. 0:01:36.680 --> 0:01:38.319 So you think the market has baked in all the 0:01:38.360 --> 0:01:40.520 good stuff when it comes to Trump, I think. 0:01:40.600 --> 0:01:41.759 Lock got baked in again. 0:01:41.840 --> 0:01:44.080 I think you go back to post election, everyone was 0:01:44.120 --> 0:01:47.120 really worried about tariffs. Then all of a sudden consensus became, Oh, 0:01:47.200 --> 0:01:48.560 it's just a negotiating point. 0:01:48.960 --> 0:01:49.200 You know. 0:01:49.680 --> 0:01:52.320 He tends to like volatility, he tends to like chaos. 0:01:52.400 --> 0:01:54.640 So the more the market gets complacent, I think the 0:01:54.640 --> 0:01:57.120 more he likely he is up to up the ante. 0:01:57.360 --> 0:01:59.960 What do you think in terms of sequencing come January. 0:02:00.600 --> 0:02:02.280 You know, I think he's going to go for easy wins. 0:02:02.320 --> 0:02:03.960 So I think as he gets out there, he's going 0:02:04.000 --> 0:02:06.080 to look what can be done. So anything that can 0:02:06.080 --> 0:02:08.080 be done in executive order, look for him to go 0:02:08.080 --> 0:02:10.000 ahead with that, right because he can do that simply. 0:02:10.240 --> 0:02:11.960 Then he's going to look for the opportunities. 0:02:12.240 --> 0:02:12.480 Again. 0:02:12.520 --> 0:02:14.760 I think we're already seeing some progress in terms of immigration. 0:02:14.840 --> 0:02:16.560 He's working with New York City Mayor Adams. So he's 0:02:16.600 --> 0:02:19.280 going to go for those high visibility easy wins. And 0:02:19.400 --> 0:02:21.440 he doesn't start getting those, That's when I think you 0:02:21.440 --> 0:02:24.000 see a more messy and chaotic problem when it. 0:02:23.960 --> 0:02:26.040 Comes to the easy wins though the market is looking for, 0:02:26.200 --> 0:02:30.080 really is a tax bill. When do you start baking 0:02:30.120 --> 0:02:33.640 in the fact that this could actually become real legislation. 0:02:34.400 --> 0:02:36.119 I think you have to wait until you really see 0:02:36.160 --> 0:02:39.480 what people come back acting like. Again, this budget thing 0:02:39.560 --> 0:02:42.160 was kind of weird, right. There's clearly some element, certainly 0:02:42.160 --> 0:02:44.239 even within the Republican Party that does not want to 0:02:44.280 --> 0:02:47.320 grow the deficit. There's concern about the deficit growing. You're 0:02:47.320 --> 0:02:50.120 seeing yields and entire almost every day for the last 0:02:50.360 --> 0:02:52.600 few weeks we have I think it's about twelve trillion 0:02:52.639 --> 0:02:54.720 dollars of debt that we have to refinance next year. 0:02:54.919 --> 0:02:56.880 So one, you need that demand to be there, but 0:02:56.919 --> 0:02:59.240 the higher if we're rolling that over to higher yields, 0:02:59.360 --> 0:03:01.520 that's going to add problems to the budget deficit. So 0:03:01.680 --> 0:03:03.320 I think the deficit is going to take front and center. 0:03:03.360 --> 0:03:05.320 It's going to make it more difficult than most of 0:03:05.360 --> 0:03:07.519 us would like to get some of those policies pushed through. 0:03:07.760 --> 0:03:09.760 You write about bonds, be wary of bonds. 0:03:09.800 --> 0:03:12.520 Nothing from the past days tells us that there won't 0:03:12.560 --> 0:03:15.400 be a lot of spending, just the direction of spending. 0:03:14.960 --> 0:03:15.880 Will be altered. 0:03:16.080 --> 0:03:18.280 You're talking about what happened in terms of the debt 0:03:18.280 --> 0:03:21.480 ceiling debacle, which pretty much when silent once they pass 0:03:21.520 --> 0:03:24.120 through this clean cr Do you think it's going to 0:03:24.160 --> 0:03:26.640 be the bond market that is the ultimate check of 0:03:26.760 --> 0:03:29.959 power in twenty twenty five when it comes to Washington, DC. 0:03:30.160 --> 0:03:30.960 I think it will be right. 0:03:31.040 --> 0:03:34.080 It's become the interest expense is already a big part 0:03:34.120 --> 0:03:37.240 of the deficit. It's growing, it's going to continue to grow, 0:03:37.320 --> 0:03:39.280 and the bond market, I think is very wary. Right, 0:03:39.320 --> 0:03:40.840 how are we going to pay for all these things? 0:03:40.960 --> 0:03:42.440 I think everyone out the corner of the eye is 0:03:42.440 --> 0:03:45.320 still looking at Doge and saying, Okay, maybe something gets 0:03:45.360 --> 0:03:45.640 done there. 0:03:45.640 --> 0:03:46.800 I think that's the. 0:03:46.520 --> 0:03:49.480 Bright shining light that's kept market somewhat in check. Is well, 0:03:49.480 --> 0:03:51.680 if those can really get some efficiencies, maybe we don't 0:03:51.680 --> 0:03:52.840 see the deficit bloom. 0:03:53.000 --> 0:03:54.720 Everything else, though, I think is just telling. 0:03:54.480 --> 0:03:57.000 Us this deficit is going to go higher, and that's problematic. 0:03:57.320 --> 0:03:59.960 Do you see any fiscal hawks left in Washington? 0:04:01.160 --> 0:04:01.680 Apparently? 0:04:01.720 --> 0:04:04.280 Maybe what the twenty seven Republicans who voted against the 0:04:04.400 --> 0:04:07.920 cr They're thirty eight, so yeah, maybe that's it. 0:04:08.000 --> 0:04:08.760 There is no one. 0:04:08.920 --> 0:04:11.200 It's all a matter of where they spend their tax cuts. 0:04:11.320 --> 0:04:14.560 And again, dog seems to be the one thing. Maybe 0:04:14.560 --> 0:04:16.760 that's where they eke out some gains and do something 0:04:16.800 --> 0:04:19.080 about the deficit. I just don't see that happening very 0:04:19.080 --> 0:04:20.440 cleanly or very quickly. 0:04:20.600 --> 0:04:23.880 You also say that there's hope of discipline discipline, but 0:04:24.040 --> 0:04:27.320 quote the swamp seems well in trench. So I see 0:04:27.360 --> 0:04:30.720 consistent upward pressure on bond yields. T row Price is 0:04:30.800 --> 0:04:33.640 talking about maybe five percent. Some people are even saying 0:04:34.040 --> 0:04:36.680 six percent on the ten year yield. Do you think 0:04:36.680 --> 0:04:37.760 we can reach those levels? 0:04:38.000 --> 0:04:40.599 I certainly think five percents in the cards. Six percent 0:04:40.720 --> 0:04:42.280 might be high. We'd have to see some of the 0:04:42.360 --> 0:04:45.400 policies actually get implemented, but yeah, I think five percent's 0:04:45.400 --> 0:04:48.680 pretty realistic. Don't forget. Also, we might see some inflation 0:04:48.760 --> 0:04:52.080 pressures come back again. One people were buying goods ahead 0:04:52.120 --> 0:04:55.040 of the tariffs or potential tariffs. You're seeing that, You're 0:04:55.040 --> 0:04:57.840 seeing the economy still move along reasonably, Well, it's that 0:04:57.960 --> 0:04:58.679 shopping season. 0:04:58.880 --> 0:05:00.960 Plus I do think there's been an artificial. 0:05:00.560 --> 0:05:03.279 Bias to the data pushing things higher than they really 0:05:03.320 --> 0:05:05.880 are in terms of jobs and inflation January February, so 0:05:05.960 --> 0:05:08.320 that could spook the market as well. Six percent seems 0:05:08.360 --> 0:05:10.800 high though, unless we get really aggressive policy. 0:05:11.200 --> 0:05:14.080 What do you make if we get five percent ten 0:05:14.120 --> 0:05:17.359 year yields? What happens to this idea of US exceptionalism Now? 0:05:17.440 --> 0:05:19.520 I think the US economy will struggle at that level. 0:05:19.560 --> 0:05:22.960 You're starting to see small companies default pick up. 0:05:23.240 --> 0:05:24.160 You're also One thing. 0:05:24.080 --> 0:05:26.120 That kind of really caught my eye is they've gone 0:05:26.200 --> 0:05:27.960 back in Q two and said now that we're actually 0:05:28.080 --> 0:05:31.280 job losses rather than job gains in Q two. So 0:05:31.360 --> 0:05:33.600 every time they do the revisions, the economy actually seems 0:05:33.600 --> 0:05:35.880 slightly worse. So I'm not sure where we're managing to. 0:05:36.040 --> 0:05:36.560 I do think the. 0:05:36.560 --> 0:05:39.120 Fed's going to be much more cautious on rate cuts. 0:05:39.160 --> 0:05:41.159 They did their one hundred BIPs. They're sending that message. 0:05:41.320 --> 0:05:44.479 So I think we're susceptible to a yield driven slowdown. 0:05:45.160 --> 0:05:47.119 What does that then mean for the equity market? 0:05:47.680 --> 0:05:49.920 You know, I think we could see some pressure on 0:05:49.960 --> 0:05:52.080 the big high flyers again. So much of this market 0:05:52.120 --> 0:05:55.159 to me, is about the leverageddtfs you have now single 0:05:55.240 --> 0:05:57.880 stock leverage gts. Have no idea why those have been improved. 0:05:58.160 --> 0:06:00.560 They're out there. You're seeing a lot of high around that. 0:06:00.680 --> 0:06:02.840 You've seen a lot of hype around you know, Bitcoin, 0:06:02.960 --> 0:06:04.560 it got to one hundred thousand a couple times. I 0:06:04.600 --> 0:06:07.080 think it crossed ninety nine just yesterday, and now it's 0:06:07.120 --> 0:06:09.880 back to ninety five thousand. So I feel that that's 0:06:09.920 --> 0:06:12.080 that froth that's in the market. That's what the liquidity 0:06:12.160 --> 0:06:13.880 is going to get taken out of, and it'll be 0:06:13.880 --> 0:06:15.880 pretty aggressive and pretty quickly when it happens. 0:06:16.040 --> 0:06:18.039 Do you think there's any chance than in twenty twenty 0:06:18.120 --> 0:06:21.240 five for broadening out or the concentration will remain in 0:06:21.320 --> 0:06:22.520 these mag seven names. 0:06:22.839 --> 0:06:24.840 I think we could see broadening out. We might even 0:06:24.880 --> 0:06:27.120 see maybe globals start doing better. It's really going to 0:06:27.240 --> 0:06:30.000 come down to, I think how many fights does Trump pick, 0:06:30.320 --> 0:06:32.480 who do we pick fights with, are we winning them? 0:06:32.800 --> 0:06:34.200 And what sort of policy do we get. 0:06:34.279 --> 0:06:36.480 So but with higher yields, I think that's going to 0:06:36.520 --> 0:06:38.240 make it more and more difficult for this to really 0:06:38.279 --> 0:06:38.760 broaden out. 0:06:38.839 --> 0:06:42.360 Unfortunately, when you say you think globally we can potentially 0:06:42.440 --> 0:06:45.640 see pickups where exactly right. 0:06:45.600 --> 0:06:47.680 Now, I still wouldn't touch Europe. I think Europe's a disaster. 0:06:48.000 --> 0:06:49.360 You mentioned I think at the start of the top 0:06:49.400 --> 0:06:52.159 of the show how the europe declined free fall. 0:06:53.440 --> 0:06:54.400 So it's hard. 0:06:54.480 --> 0:06:56.680 And what scares me about Europe is Germany's kind of 0:06:56.720 --> 0:06:59.360 been the juggernaut. Europe's kind of Germany's been what's held 0:06:59.400 --> 0:07:03.160 Europe together. They're doing very poorly right now. So I'm 0:07:03.240 --> 0:07:05.720 not yet there, But I do think sentiments become so 0:07:05.839 --> 0:07:08.080 bad over there and so excessive over here that you 0:07:08.200 --> 0:07:10.440 do get that potential for a reversal because. 0:07:10.200 --> 0:07:13.040 It's so low. The entring point is that what you're 0:07:13.040 --> 0:07:14.120 saying an entry point. 0:07:14.080 --> 0:07:15.760 Right and really is a contrary you're looking for. 0:07:15.960 --> 0:07:18.600 Okay, once everyone's given up on something that tends to 0:07:18.680 --> 0:07:20.920 be where it doesn't take much to push that around, 0:07:21.240 --> 0:07:24.440 and everyone is still so very focused mag seven over here. 0:07:24.760 --> 0:07:27.800 Every time we've tried to rally, you know, small caps, 0:07:27.840 --> 0:07:30.560 that's failed, and I keep thinking everyone's looking for that 0:07:30.640 --> 0:07:32.760 small cap rally and maybe the surprise is going to 0:07:32.800 --> 0:07:35.080 be Europe or someone does better. I don't think it 0:07:35.120 --> 0:07:37.280 happens this month or next month, but that could be 0:07:37.360 --> 0:07:38.800 the trade of the year where all of a sudden 0:07:38.800 --> 0:07:40.560 people say, let's give the world a chance. 0:07:40.880 --> 0:07:44.600 The Dacks, though, is up so much double digits on 0:07:45.240 --> 0:07:45.600 this year. 0:07:45.720 --> 0:07:48.320 Jonathan brings up this point all the time, yet the 0:07:48.400 --> 0:07:49.840 German economy. 0:07:50.360 --> 0:07:51.120 Is on its back. 0:07:51.600 --> 0:07:51.720 You know. 0:07:51.760 --> 0:07:53.360 I think one of the things with all these is 0:07:53.480 --> 0:07:55.640 most of these companies are big and global. So that's 0:07:55.680 --> 0:07:57.360 one reason I think you can look at this and say, 0:07:57.440 --> 0:07:58.960 you know, I think the S and P five hundred, 0:07:58.960 --> 0:08:01.040 close to fifty percent of your owns come from overseas. 0:08:01.440 --> 0:08:03.840 So it's the same for some of those big German companies. Right, 0:08:03.920 --> 0:08:07.440 Mercedes is not really a German company per se. Right, 0:08:07.480 --> 0:08:10.280 They're very dependent on global So I think that's you know, 0:08:10.400 --> 0:08:12.200 it's hard when we look at these things and really 0:08:12.320 --> 0:08:14.920 nationalize them when some of the big companies really are 0:08:15.040 --> 0:08:17.600 so global and why would they trade it a much smaller, 0:08:17.720 --> 0:08:19.600 you know, as a market lower pe. 0:08:19.960 --> 0:08:20.920 I think some of it makes sense. 0:08:20.960 --> 0:08:24.480 Some of it's telcode things, banks that don't have that potential, 0:08:25.000 --> 0:08:27.920 but there is that opportunity I think for growth there. 0:08:28.040 --> 0:08:29.680 The one area you haven't mentioned is China. 0:08:30.280 --> 0:08:33.400 China overnight is apparently giving local officials more leeway and 0:08:33.480 --> 0:08:36.160 how they invest government bonds. We do see them coming 0:08:36.200 --> 0:08:39.319 out and trying whatever they can to stimulate the economy. 0:08:39.920 --> 0:08:41.480 Is it enough for you to want to go there? 0:08:42.120 --> 0:08:44.880 Yeah, I actually don't mind China as an investment, and 0:08:45.000 --> 0:08:47.080 we'll be interested when we talked to the guests later today. 0:08:47.400 --> 0:08:50.280 But I do think that this is almost an existential 0:08:50.320 --> 0:08:52.880 sort of moment for GI and the Communist Party, So 0:08:52.960 --> 0:08:55.120 they are going to keep throwing things at this until 0:08:55.120 --> 0:08:55.480 they get. 0:08:55.400 --> 0:08:56.440 The economy turned around. 0:08:56.679 --> 0:08:58.640 And I am a big believer that their whole strategy 0:08:58.760 --> 0:09:01.600 is this made by So they're taking their brands, they're 0:09:01.600 --> 0:09:03.920 trying to sell them globally. They're trying to use bricks 0:09:03.920 --> 0:09:06.000 as another way to get their brands out there. So 0:09:06.040 --> 0:09:08.440 I think Chinese companies actually might do pretty well. And again, 0:09:08.559 --> 0:09:11.400 sentiment's been awful since, you know, there was that brief flurry, 0:09:11.960 --> 0:09:13.200 you know when everyone said, oh, we have to buy 0:09:13.320 --> 0:09:17.320 China late in the fall. It's kind of reversed again. 0:09:17.600 --> 0:09:19.839 I think there is some opportunity there. I think, to 0:09:19.920 --> 0:09:22.480 me though, it's still a trade, it's not an investment. 0:09:22.880 --> 0:09:25.800 You're a traveler, not a settler when it comes to Chenna, definitely. 0:09:35.920 --> 0:09:40.320 Andy Schiller of the Taubman Center for American Politics at 0:09:40.400 --> 0:09:43.559 Brown University joins us now, Wendy, thank you so much 0:09:43.600 --> 0:09:45.640 for joining us, and happy holidays to you. 0:09:45.760 --> 0:09:47.760 Thank you for joining us the day after Christmas. 0:09:48.280 --> 0:09:50.640 We have a long list of grievances coming from President 0:09:50.720 --> 0:09:53.679 elect Trump before he even gets into office, whether or not. 0:09:53.760 --> 0:09:58.400 It's Canada, Mexico, China, Greenland. 0:09:57.960 --> 0:09:59.079 And now the Panama Canal. 0:09:59.120 --> 0:09:59.880 What do you make of all that? 0:10:00.040 --> 0:10:01.800 Yes, good morning, Henry. 0:10:02.120 --> 0:10:02.280 Well. 0:10:02.400 --> 0:10:07.320 President Trump, you know, did successfully renegotiate NAFTA, at least 0:10:07.360 --> 0:10:09.600 in his eyes, in the eyes of a lot of people, 0:10:10.000 --> 0:10:12.880 trying to secure better terms for the United States in 0:10:13.000 --> 0:10:16.000 terms of trade. And this is something presidents can do 0:10:16.520 --> 0:10:19.319 in terms of executive authority. They have a trade representative. 0:10:19.840 --> 0:10:22.679 They do have a lot of leeway in determining what 0:10:22.880 --> 0:10:24.760 our economic relationships are in terms. 0:10:24.559 --> 0:10:28.520 Of trade and also user fees with foreign nations. 0:10:28.600 --> 0:10:31.200 And so there's a long history with the Panama Canal, 0:10:32.040 --> 0:10:34.240 and so I'm not sure how much the president will 0:10:34.280 --> 0:10:37.719 invoke that history. But he's looking for victories, and he's 0:10:37.760 --> 0:10:41.640 looking for victories that he can demonstrate using executive power 0:10:42.040 --> 0:10:45.760 and really pretty much end running Congress. Because he was 0:10:45.800 --> 0:10:49.199 president for four years, he understands, even with a Republican trifecta, 0:10:49.520 --> 0:10:51.719 as he saw last week, you're not always going to 0:10:51.760 --> 0:10:54.320 get your victories quickly or easily through Congress. 0:10:54.640 --> 0:10:56.719 So you're going to look to other venues and other 0:10:56.920 --> 0:11:00.199 uses of presidential power to achieve quick victories. It's to 0:11:00.200 --> 0:11:00.880 look successful. 0:11:01.320 --> 0:11:03.880 China doesn't control the canal at all, but it does 0:11:04.040 --> 0:11:07.800 have two of the main five ports adjacent to the canal. 0:11:08.000 --> 0:11:10.280 Is that really what Trump is getting after? 0:11:11.679 --> 0:11:14.520 Well, I think observers would like to believe that the 0:11:14.679 --> 0:11:17.439 President wants to strengthen the United States position visa each 0:11:17.520 --> 0:11:19.559 China in a lot of different ways. We know that 0:11:19.679 --> 0:11:22.280 China is also investing in a lot of parts of 0:11:23.040 --> 0:11:27.559 South America and also Africa, and using its resources to 0:11:27.640 --> 0:11:30.480 sort of gain leverage in those areas. That's been happening 0:11:30.520 --> 0:11:32.360 for a long time and the United States hasn't really 0:11:32.440 --> 0:11:35.000 confronted it head on. And I think these are going 0:11:35.080 --> 0:11:37.599 to be ways in which the Trump administration looks to 0:11:37.679 --> 0:11:41.360 sort of counter China, beyond even tariffs in the places 0:11:41.400 --> 0:11:42.920 that China is trying to gain a foothold. 0:11:43.400 --> 0:11:44.959 What do you think are the top two or three 0:11:45.000 --> 0:11:48.080 things he could do basically on day one to set 0:11:48.160 --> 0:11:49.960 that agenda and get that tone going. 0:11:50.800 --> 0:11:50.959 Well. 0:11:51.000 --> 0:11:53.439 I can certainly issues some executive orders. 0:11:53.480 --> 0:11:56.320 He can certainly raise tariffs under a sort of national 0:11:56.400 --> 0:11:59.520 security he can do those sorts of things. He can 0:11:59.600 --> 0:12:05.200 certainly try to block some issues of visas or travel like. 0:12:05.240 --> 0:12:06.360 You did with the Muslim ban. 0:12:06.720 --> 0:12:08.520 You know, there's a fair number of things presidents can 0:12:08.559 --> 0:12:10.160 do with executive horizon the first day. 0:12:10.440 --> 0:12:13.480 What he can't do is get his ambassador cleared right away. 0:12:13.880 --> 0:12:16.320 That's up to the Senate, and the Senate seems under 0:12:16.480 --> 0:12:19.200 John Thune, the incoming Repulican leader, to want to exert 0:12:19.240 --> 0:12:22.520 its constitutional privilege and really examine his nominees. Now that 0:12:22.640 --> 0:12:24.600 examination may take a day, a day and a half, 0:12:24.840 --> 0:12:26.520 but they're still going to go through the process. So 0:12:26.640 --> 0:12:29.520 all these ambassadors, all these cabinet levels, they have to 0:12:29.600 --> 0:12:31.679 still go through the Senate and that's going to take 0:12:31.679 --> 0:12:32.280 a little while. 0:12:32.559 --> 0:12:36.200 So how much that frustrates President Trump. We're about to see, Wendy. 0:12:36.520 --> 0:12:40.679 What's the Democrats strategy for next year? Henry? 0:12:40.760 --> 0:12:42.840 That is a question I think the Democrats themselves are 0:12:42.960 --> 0:12:46.360 looking for an answer to. It depends which faction of 0:12:46.400 --> 0:12:49.640 the Democratic Party emerges, you know, sort of as the 0:12:49.760 --> 0:12:55.640 chief spokesperson against the incoming presidential Trump's administration. We saw 0:12:55.679 --> 0:12:57.679 a little bit of playbook from the Democrats on the 0:12:57.679 --> 0:13:00.800 budget bill, you know, referring to President Musk or co 0:13:01.080 --> 0:13:04.760 President Elon Musk. I think the Democrats have real concerns 0:13:04.840 --> 0:13:07.560 about these non elected influences on President Trump. 0:13:07.800 --> 0:13:10.880 You know, President Trump, we've seen four years in office. 0:13:11.120 --> 0:13:14.760 There's a bit of a playbook. Unpredictable, but there's a playbook. 0:13:15.040 --> 0:13:18.240 But new actors with this kind of influence, particularly with communications, 0:13:18.440 --> 0:13:21.520 presents a challenge for the Democrats, and they're trying to 0:13:21.600 --> 0:13:24.840 sort of drive a wedge between those influences, particularly Musk 0:13:25.040 --> 0:13:27.199 and the President. Because of the President, they know what 0:13:27.240 --> 0:13:28.640 they're dealing with with Musk. 0:13:28.720 --> 0:13:29.920 It's much more out of their control. 0:13:30.280 --> 0:13:30.640 Right now. 0:13:30.760 --> 0:13:34.120 We still have a sitting president Joe Biden. Yet when 0:13:34.160 --> 0:13:38.400 it came to the debt, the potential shutdown debt ceiling 0:13:38.480 --> 0:13:42.239 debacle of last week, he pretty much seated the spotlight 0:13:42.600 --> 0:13:46.440 to incoming President Trump. Are you surprised by how much 0:13:46.640 --> 0:13:50.040 power Joe Biden is seeding right now on the global stage. 0:13:51.160 --> 0:13:53.319 Well, I mean, I think Joe Biden and even the 0:13:53.400 --> 0:13:56.679 Democrats do want to set this up as a relationship 0:13:56.720 --> 0:13:59.960 between Republican President Trump and a Republican. 0:13:59.440 --> 0:14:01.000 Controlled House and Senate. 0:14:01.280 --> 0:14:03.440 Because whatever happened in the next couple of months, maybe 0:14:03.520 --> 0:14:06.720 things sail down, inflation goes down, maybe the economy stays solid, 0:14:07.000 --> 0:14:07.439 maybe not. 0:14:07.960 --> 0:14:09.400 They want nothing to do with that. 0:14:09.640 --> 0:14:12.199 They want to start their twenty twenty six campaign now 0:14:12.600 --> 0:14:14.920 against the trifecta. So it's not really a bad thing 0:14:15.040 --> 0:14:17.319 for the Democrats for President Biden to sort of, you know, 0:14:17.480 --> 0:14:18.520 not be involved. 0:14:18.960 --> 0:14:22.520 He's also doing things with executive power, things like clemency 0:14:22.680 --> 0:14:23.280 for example. 0:14:23.640 --> 0:14:26.800 I mean, he's trying to do all he can nilaterally 0:14:27.480 --> 0:14:31.240 and somewhat quietly before the new president takes over. But 0:14:31.400 --> 0:14:33.760 right now the strategy is to say it's the Republicans 0:14:33.840 --> 0:14:37.640 government to run, and it's the Republican's government to succeed 0:14:37.960 --> 0:14:38.400 or fail. 0:14:39.640 --> 0:14:41.120 What do you think the rest of the world's going 0:14:41.200 --> 0:14:42.720 to do in response to some of these things? Right, 0:14:42.800 --> 0:14:44.920 so far we seem to be talking about this in isolation, 0:14:45.000 --> 0:14:45.960 what Trump wants to do. 0:14:46.280 --> 0:14:48.240 What's the world going to do to push back on that? 0:14:48.360 --> 0:14:49.360 Or are they going to do anything? 0:14:50.400 --> 0:14:52.760 Well, yeah, you have to think about economic markets, So 0:14:52.800 --> 0:14:55.480 we also have to think about military security and security 0:14:55.520 --> 0:14:59.680 of Europe. And with Germany's government very shaky, with France's 0:14:59.720 --> 0:15:04.280 governm shaky, and even with Great Britain's government shaky, you 0:15:04.440 --> 0:15:07.280 start to really have concerns about military encouragion. 0:15:07.360 --> 0:15:09.160 You think about Putin, you think about Ukraine. 0:15:09.480 --> 0:15:11.840 You know the instability that could come to Europe with 0:15:11.960 --> 0:15:13.680 economically and even militarily. 0:15:14.160 --> 0:15:16.240 That's a challenge. It's unclear that Trump. 0:15:16.080 --> 0:15:19.160 Administration is prepared for, and we just don't know what 0:15:19.320 --> 0:15:22.240 moves the Trump meministration will make to steady the ship, 0:15:22.560 --> 0:15:25.240 and of course the global economy will depend on studying 0:15:25.320 --> 0:15:28.320 that ship. So those are the kinds of unforeseen external 0:15:28.400 --> 0:15:31.440 shocks that could come earlier in the Trump administration that 0:15:31.480 --> 0:15:32.720 anyone's expecting. 0:15:32.680 --> 0:15:35.520 Trump definitely takes a more bilateral view of the world, 0:15:36.600 --> 0:15:39.400 while the Democrats or Biden administration had taken more of 0:15:39.440 --> 0:15:41.960 a multilateral view of the world. If Trump used the 0:15:42.040 --> 0:15:45.160 world bilaterally, who do you think is going to be 0:15:45.400 --> 0:15:47.080 his best partner in Europe? 0:15:48.640 --> 0:15:50.200 You know, that is a really interesting question. 0:15:50.560 --> 0:15:54.120 I just haven't seen any inclination from the prior Trump 0:15:54.160 --> 0:15:57.880 administration or his rhetoric now that he's looking for a partner. 0:15:58.320 --> 0:16:00.280 I mean, he you know, he sort of wants Poton 0:16:00.320 --> 0:16:03.160 to stay in his corner, maybe resolve Ukraine and look 0:16:03.240 --> 0:16:06.040 good for that. But you know, Trump is Trump, and 0:16:06.280 --> 0:16:09.320 as we see in domestic politics and international politics, he 0:16:09.720 --> 0:16:10.400 is a loner. 0:16:10.600 --> 0:16:13.000 He wants to exert influence where he can and where he. 0:16:13.040 --> 0:16:15.640 Can be successful, but he's not really interested in giving 0:16:15.680 --> 0:16:19.240 anything to other partners. And that's something that's really strikingly 0:16:19.320 --> 0:16:23.080 different from the US foreign policy posture than we've seen 0:16:23.120 --> 0:16:23.680 from a lot. 0:16:23.560 --> 0:16:24.400 Of former presidents. 0:16:24.560 --> 0:16:27.000 So we're less than a month away from his inauguration, Wendy, 0:16:27.320 --> 0:16:30.720 when it comes to this sequencing of things like tax cuts, 0:16:31.280 --> 0:16:34.960 immigration policy, as well as tariffs, how do you expect 0:16:35.240 --> 0:16:36.840 all of this to play out in Washington. 0:16:37.720 --> 0:16:39.800 Well, you know, Emri as you well know because you've 0:16:39.840 --> 0:16:42.360 discussed it reported on before. You know, there's a difference 0:16:42.440 --> 0:16:45.800 between Mike Johnson and John Thune on getting reconciliation going 0:16:45.880 --> 0:16:48.320 and getting an early version of the tax cut you know, 0:16:48.640 --> 0:16:51.840 on the table and under consideration in both the House 0:16:51.880 --> 0:16:54.960 and the Senate, an early victory to extend the tax cuts, 0:16:55.000 --> 0:16:57.640 the Trump tax cuts, that would give the president a 0:16:57.680 --> 0:17:00.560 lot of momentum to focus on other things like border security. 0:17:00.880 --> 0:17:03.960 So border security he can do, and to some extent, 0:17:04.200 --> 0:17:06.560 you know, if he invokes the military in trying to 0:17:06.640 --> 0:17:09.680 do border security, that will create controversy and that could 0:17:09.760 --> 0:17:12.280 upend other kinds of domestic priorities he has, like the 0:17:12.359 --> 0:17:15.640 tax cut bill. One thing that Trump administration doesn't seem 0:17:15.720 --> 0:17:18.280 to quite get yet, which is surprising given they were 0:17:18.320 --> 0:17:21.240 there for four years before, is that these things are interrelated. 0:17:21.440 --> 0:17:23.840 If you ask somebody to make a politically difficult decision 0:17:23.880 --> 0:17:26.359 on one issue, it's going to affect whether they're going 0:17:26.400 --> 0:17:29.120