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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at

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Speaker 1: noon and five pm Eastern on Apple Coarckley and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: We're here with all the famous people, indeed at world

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Speaker 2: headquarters in New York, where we've got a little election

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Speaker 2: that's going to take place tomorrow, and that's partly why

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Speaker 2: we are here. Of course, we'll have special election coverage

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Speaker 2: all day long and into the evening on Tuesday here

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Speaker 2: on Bloomberg TV and radio. We put the whole band

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Speaker 2: on the road, and we've got a lot more coming.

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Speaker 2: This hour, we'll spend some time with Republican Congressman Mike

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Speaker 2: Lawler of New York. He's got some thoughts on this

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Speaker 2: mayoral race, and of course on a government shutdown that

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Speaker 2: has now hit day thirty four. You wouldn't know, probably

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Speaker 2: by looking at Wall Street, but there's no end in

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Speaker 2: sight here. There is, however, an important development today that

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Speaker 2: came from the White House announcing its intention as of

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Speaker 2: noontime Eastern here. That was the deadline to at least

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Speaker 2: partially fund Snap benefits food stamps that you've been hearing

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Speaker 2: so much concern about. The SNAP program was defunded as

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Speaker 2: of Saturday, knowing as well that head start was also

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Speaker 2: on Ice Saturday, and we saw the open enrollment for

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Speaker 2: Obamacare begin over the weekend. This is partly why we

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Speaker 2: have such an important week here. It's not just the shutdown,

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Speaker 2: it's not only the election tomorrow also in New York,

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Speaker 2: New Jersey, Virginia. But on Wednesday, arguments before the Supreme

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Speaker 2: Court over the president's use of emergency tariffs. We're not

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Speaker 2: going to get a decision that day, but this will

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Speaker 2: be landmark either way it goes. The President was asked

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Speaker 2: about it on sixty minutes last evening. Listen.

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Speaker 3: I think it's one of the biggest decisions in the

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Speaker 3: history of the survey put I wanted to go so badly.

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Speaker 3: I just don't wanted to do anything to deflect the

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Speaker 3: importance of that decision. We don't have tariffs, we don't

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Speaker 3: have national security, and the rest of the world would

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Speaker 3: laugh at us because they've used tariffs against us for years.

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Speaker 2: Clearly speaking on Air Force one there and producer James

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Speaker 2: did tell me that in advance. CC. Thank you. He

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Speaker 2: was on sixty Minutes last evening and talked a lot

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Speaker 2: more about this. The question, of course, is what happens

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Speaker 2: if the Supreme Court says that these tariffs are not legal?

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Speaker 2: Are you really going to pay everyone back? We've got

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Speaker 2: a few things to catch up with Tyler kendal On,

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Speaker 2: of course, our Washington correspondent back from overseas. She was

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Speaker 2: with the President in South Korea and back with us

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Speaker 2: now in our Washington bureau. Tyler, it's great to see you.

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Speaker 2: Let's start with the SNAP benefit. It's a pretty important

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Speaker 2: development here in this government shutdown.

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Speaker 4: Right exactly, breaking news as I know you were just

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Speaker 4: coming to air in the twelve pm hour, Joe, the

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Speaker 4: Department of Justice saying that it now has enough funding

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Speaker 4: for fifty percent of food aid benefits through November. This

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Speaker 4: is the SNAP program, the Supplemental Nutrition Assistance Program. About

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Speaker 4: one in eight Americans get aid through this program the

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Speaker 4: federal government. It costs them about eight billion dollars per

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Speaker 4: month nationwide. They're saying fifty percent, so we're probably looking

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Speaker 4: at a four billion dollars worth of contingency funding here.

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Speaker 4: And as you've been discussing on the program. This was

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Speaker 4: compelled by a pair of federal judges that said that

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Speaker 4: the administration had to look for some sort of solution

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Speaker 4: with this contingency funding. But at this point they're saying

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Speaker 4: it's partially funded. It is unclear just how much recipients

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Speaker 4: are going to receive and how quickly they will get

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Speaker 4: that money. It looks like it might be replenished sometime

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Speaker 4: later this week, around Wednesday, the federal judge had said

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Speaker 4: that he wanted an update. But at this point, we

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Speaker 4: know that data shows us that many of these families

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Speaker 4: ultimately use the majority of their benefits at the beginning

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Speaker 4: of the month, and it is already delayed.

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Speaker 2: It's really interesting when we talk partial benefits. It doesn't

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Speaker 2: sound like this is terribly sustainable. Do we know how

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Speaker 2: long this contingency fund will have before it runs out?

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Speaker 4: At this point, this ruling only has to do with

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Speaker 4: the month of November, So we're going to be looking

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Speaker 4: if this government shutdown continues on. Because Joe, as you

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Speaker 4: well know, this was one of those big pressure points

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Speaker 4: that was on the table November first. We kept talking

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Speaker 4: about both for open enrollment but also for SNAP and

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Speaker 4: that is now leading to other questions on what is

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Speaker 4: going to compel lawmakers to ultimately get to the date

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Speaker 4: to the table and come up with a firm deal

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Speaker 4: to reopen to the government. Perhaps that will be November

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Speaker 4: twenty first, the next date that we have our eye on,

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Speaker 4: of course, when this stop gap measure that the lawmakers

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Speaker 4: keep voting on is supposed to go. Until it looks

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Speaker 4: like they're going to need a much longer date, perhaps

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Speaker 4: we'll see some sort of resolution here where we're looking

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Speaker 4: at a longer stop gap and maybe a package of

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Speaker 4: funding bills. There seems to be some murmers on Capitol

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Speaker 4: Hill about a compromise there, but at this point those

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Speaker 4: talks are not involving leadership. To our awareness, at least,

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Speaker 4: it seems like these are bipartisan talks that are happening

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Speaker 4: with frank and file members trying to get some sort

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Speaker 4: of solution. But at this point Republicans are holding the line.

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Speaker 4: They're not going to negotiate on some of these key

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Speaker 4: provisions like those Affordable Care Act brmium tax subsidies that

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Speaker 4: are expiring until the government reopens.

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Speaker 2: This quickly, Tyler, while you're still with us with regard

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Speaker 2: to the Supreme Court arguments on Wednesday over the tariffs.

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Speaker 2: You just heard the President who was talking to reporters

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Speaker 2: on Air Force one. Did he really was he planning

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Speaker 2: to attend? Was that a late decision to not personally

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Speaker 2: go to the arguments?

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Speaker 4: Well, I mean it sounded like he was going to,

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Speaker 4: though in that truth Social post last night, he did

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Speaker 4: qualify that he's no longer going to. But this is

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Speaker 4: a really core part of President Trump's economic agenda, right,

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Speaker 4: And the question here are the legality around those tariffs

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Speaker 4: that were invoked through AIPA, the International Emergency Economic Powers Act.

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Speaker 4: President Trump had to declare a national emergency in order

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Speaker 4: to impose them. And those are the questions that I'm

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Speaker 4: looking out for here. One, did President Trump have the

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Speaker 4: legal authority to use AEPA to impost tariffs? This has

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Speaker 4: never been done before. Questions here about whether or not

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Speaker 4: he bypassed Congress, but also whether or not the national

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Speaker 4: emergencies he declared as you'll recall FETNAH on the border

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Speaker 4: for those tariffs on Canada, Mexico, and China. And then

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Speaker 4: the persistent trade of balance is for the so called

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Speaker 4: reciprocal tariffs. Do those met to the legal standard of

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Speaker 4: being a national emergency. It has to be an extraordinary

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Speaker 4: and unusual threat according to the law.

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Speaker 5: So there's a lot of stake here. But Joe, as you.

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Speaker 4: Will know, there are other options on the table, and

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Speaker 4: officials haven't been shy that they're going to invoke other

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Speaker 4: tariffs using other tools like Section two thirty two.

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Speaker 2: Or Section three oh one, which is why Wall Street

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Speaker 2: keeps saying, let us know when it's over. Tyler, thank you.

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Speaker 2: Tyler Kendall live in Washington. We want to get with

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Speaker 2: Bill Holglan. I was really glad to hear Bill was

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Speaker 2: coming on today because I actually think about Bill Hogland

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Speaker 2: with regard to this shutdown more than he might know.

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Speaker 2: Bill is an operative, a former operative from Capitol Hill,

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Speaker 2: who was there when things were done differently, when there

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Speaker 2: was something called regular order, when there was courtesy and decorum.

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Speaker 2: And I'm not trying to date you here, Bill Hogland,

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Speaker 2: but a lot of folks miss those times in Washington

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Speaker 2: as we prepare to set a record here for shutdown.

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Speaker 2: He's senior vice president at the Bipartisan Policy Center. I'm

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Speaker 2: just wondering where your head is before we get more specific,

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Speaker 2: have you ever considered a scenario like this before.

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Speaker 6: Well, not exactly like it is set up right now.

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Speaker 7: Clearly, the longest shutdown I was involved in was in

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Speaker 7: ninety five ninety six between the Clinton administration and a

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Speaker 7: Republican Congress led by Speaker Gangrich and Senator Bob Does,

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Speaker 7: majority leader. And at least during that shutdown there was

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Speaker 7: negotiations going on throughout between the leadership and the Congress

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Speaker 7: and the president President Clinton to work out in a deal.

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Speaker 6: So this is a little different here where.

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Speaker 7: We're not we don't have the negotiations, and that's this

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Speaker 7: is much different than the past.

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Speaker 6: Further, this is a.

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Speaker 7: President who has looked at Congress, I think, and said, Congress,

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Speaker 7: you've failed to do your job. You haven't passed a

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Speaker 7: budget for the upcoming fiscal year. Quite frankly, Congress hasn't

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Speaker 7: done the budget to over the thirteen of the last

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Speaker 7: twenty five years, they have not gotten their appropriation bills

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Speaker 7: on time. And so the president probably correctly says, well,

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Speaker 7: if you guys aren't going to get your work done,

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Speaker 7: I'll do it for you. And this is this unitary

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Speaker 7: president theory that exists is creating this well when Congress

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Speaker 7: doesn't do it to work creates the vacuum and it

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Speaker 7: sets this up. So this is much different than the

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Speaker 7: previous shutdowns that I've been involved in over the many years.

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Speaker 2: Well, listen to that from Bill Holglan next time somebody

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Speaker 2: says it's not different. I want to ask you about

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Speaker 2: the nuclear option because the President keeps bringing it up,

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Speaker 2: and I'm pretty sure as an institutionalist, I know how

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Speaker 2: you feel about this. Listen to President Trump from sixty

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Speaker 2: minutes on killing the filibuster. Here he is, I think

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Speaker 2: we should do the nuclear option.

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Speaker 8: This is a totally different nuclear By the way, it's

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Speaker 8: called ending the filibuster. You know what, the Republicans have

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Speaker 8: to get tougher if we end the filibus so we

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Speaker 8: can do exactly what we want. We're not going to

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Speaker 8: lose power. The theory is, oh, then we'll do it.

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Speaker 8: But then when they get into power someday, dude, that's true.

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Speaker 8: But you know so you think you're here right now.

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Speaker 4: No.

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Speaker 6: I like John Thune.

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Speaker 8: I think he's terrific, but I disagree with him.

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Speaker 2: John Thune must have broken into a sweat when he

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Speaker 2: heard that Bill. This is a perennial argument around Washington.

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Speaker 2: Nobody ever thinks it's really going to happen, But more

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Speaker 2: folks suggest that the longer this shutdown goes on that

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Speaker 2: it could Could John Thune be compelled to consider this?

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Speaker 7: Well, you mentioned Joe that I guess I would be

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Speaker 7: considered an institutionalist going back a long way, and I

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Speaker 7: don't think John Thune would be willing to consider this. Clearly,

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Speaker 7: there is there's a reason why we have this mechanism

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Speaker 7: that we have in terms of the filibusters.

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Speaker 6: I think you and I have discussed many times before.

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Speaker 7: When our founding fathers set this system up, they set

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Speaker 7: a system up of checks and balances. And that's not

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Speaker 7: only checks and bounces between the executive and the legislative,

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Speaker 7: it's a checks and bounce between the House and Senate.

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Speaker 6: And it's that old story about how.

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Speaker 7: Jefferson wrote to Washington during when he was in Paris

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Speaker 7: and asked, well, why do we have this house in

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Speaker 7: that Senate? And the response coming from Washington was it

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Speaker 7: as you know, Tom, I guess he would have said,

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Speaker 7: In Virginia, we drink hot tea and we have a saucer,

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Speaker 7: and the hot hot tea in the house is cooled

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Speaker 7: by the saucer of the Senate. Yes, this is tough,

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Speaker 7: but filibusters or sixty votes super majority votes are necessary

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Speaker 7: to force compromise, and that's well, we're not getting that

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Speaker 7: compromise today. I still think it's important that we have

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Speaker 7: that kind of a higher standard to pass major types

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Speaker 7: of legislation. We have done away with the filibuster on

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Speaker 7: a few items, particularly those as a relations to judges,

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Speaker 7: but on major legislative items, I think we still need

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Speaker 7: to maintain the filibuster.

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Speaker 2: Donald Trump on Truth Social term the filibuster. He writes,

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Speaker 2: not just for the shutdown, but for everything else. We

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Speaker 2: will get all of our common sense policies approved in parentheses,

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Speaker 2: voter ID anyone, and make America great again. He goes

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Speaker 2: on to write, bill. Remember, the Democrats will do it immediately,

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Speaker 2: as soon as they get the chance. Do you believe that?

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Speaker 6: No, I don't.

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Speaker 7: I think it quite frankly the opposite. Uh, the Democrats

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Speaker 7: may would would not would not want to have the

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Speaker 7: phil I think the Republicans would not want to have

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Speaker 7: the Democrats do with the filibuster. And so in that

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Speaker 7: particular situation, the Republicans would stem me a filibuster. Uh,

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Speaker 7: it's it's uh.

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Speaker 6: It's certainly a difficult issue.

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Speaker 7: And certainly I can understand the president's position, we're going

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Speaker 7: to get things done, want to get done quickly, but

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Speaker 7: this is uh, this is Congress.

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Speaker 6: This is a slow deliberate process.

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Speaker 7: I'm sorry it takes time to get legislation done, but

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Speaker 7: but this is a big country. It requires a lot

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Speaker 7: of deliberation, and it requires at the end of the day,

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Speaker 7: is Madison wrote in his Federalist Papers, compromise.

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Speaker 2: We're going to get the Panels take on this in

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Speaker 2: just a moment bill before you leave us. Do you

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Speaker 2: have any gut check on how long this might go?

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Speaker 2: And when do they need to write a new CR?

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Speaker 2: November twenty first is in a couple of minutes.

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Speaker 7: Certainly, I am of the mindset that if they were

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Speaker 7: to open the government up, and I'm my gut, who knows,

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Speaker 7: but my gut is that we have another payday coming

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Speaker 7: up for civil service on Friday, we have military pay

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Speaker 7: coming up. Taking some pressure off of the snap program

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Speaker 7: today is helpful, but that's only partial. As was pointed

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Speaker 7: out by Tyler here, it is you're going to continue

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Speaker 7: to keep the pressure going here. We're going to have problems,

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Speaker 7: continue problems with THEA Air Traffic Control officers, and so

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Speaker 7: I do believe that the pressure will mount such that

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Speaker 7: we get some sort of a agreement, maybe within the

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Speaker 7: week or two here at the latest. That's my hope,

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Speaker 7: But who knows. This is a very uncertain time, and

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Speaker 7: I've been told that there are some of the there

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Speaker 7: is negotiations going on. As Tyler indicated, they are not

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Speaker 7: with the rank and with the leadership right now. But

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Speaker 7: as soon as the President gets involved here, I do

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Speaker 7: think we're going to be able to get this thing

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Speaker 7: done and move on. But we'll probably have to pass

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Speaker 7: another continuing reservation back in the spring. Back in the spring,

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Speaker 7: you and I talked about this, and I think the

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Speaker 7: next continuing resolution will probably have to take us into

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Speaker 7: early next year.

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Speaker 2: Bill Hoaglan, Great, I'm going to take your optimism and

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Speaker 2: run with it. Bill. It's good to see you. Thank

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Speaker 2: you from the Bipartisan Policy Center in Downtown Washington, d C.

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Speaker 2: Let's see how the panel feels. Bloomberg Politics contributors Rick

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Speaker 2: Davis and Jeanie Schanzano are with us. Rick is our

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Speaker 2: Republican strategist partner at Stone Court Capital, and Genie are

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Speaker 2: democratic analysts and Democracy visiting fellow at Harvard Kennedy School's

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Speaker 2: Ash Center. I don't know if you're feeling the optimism

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Speaker 2: right now, Genie, as a Democrat, both sides of the

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Speaker 2: aisle seem to think they have the moral high ground.

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Speaker 2: And yeah, I got on a plane yesterday. It took

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Speaker 2: me a lot longer to get to New York than

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Speaker 2: anybody ever could have imagined. We are starting to see

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Speaker 2: different agencies feel impacts on different levels. The snap development

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Speaker 2: today is an important one. Does it make you feel

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Speaker 2: like we're getting closer to something?

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Speaker 9: Well, Joe, I'm feeling optimistic because I just got listened

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Speaker 9: to Bill talk about the Federalist papers and Thomas Beefferson

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Speaker 9: and James Matt It fills me with this so much

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Speaker 9: positive feelings. You know. I think one another aspect of

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Speaker 9: this is that what happens tomorrow at the polls. You know,

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Speaker 9: you were just talking about John Thune not being willing

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Speaker 9: to take the nuclear option as the President calls it. Well,

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Speaker 9: if the polls don't look good tomorrow, the results don't

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Speaker 9: look good for Republicans, they are maybe more likely both

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Speaker 9: to stick to their guns on the nuclear option and

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Speaker 9: also to start thinking amongst leadership about ending the thing,

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Speaker 9: because while Donald Trump is not on the ballot in

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Speaker 9: the midterm, they are and they know what tomorrow portends

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Speaker 9: if the numbers don't look good for them.

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Speaker 2: Rick, I'm not sure if your mind has changed at

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Speaker 2: all on this, but November twenty first is coming up

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Speaker 2: pretty quickly here. Even if Democrats Republicans all got together,

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Speaker 2: there was a big Oval Office meeting, everybody got along kumbayah,

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Speaker 2: wouldn't they need to write a different bill?

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Speaker 4: Yeah?

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Speaker 10: I think first of all, having hogland On, I mean,

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Speaker 10: he's a sentence sage, right, I mean, like, what you're

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Speaker 10: getting there is really good information.

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Speaker 2: And I think that's his point that he left.

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Speaker 10: Us with, is the current bill that came out of

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Speaker 10: the House, that has resulted in the House leaving town

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Speaker 10: for thirty days, is going to have to be redone.

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Speaker 10: They're going to have to extend the cr and as

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Speaker 10: he said, probably in the next year.

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Speaker 6: And so there's a lot of work that's going to.

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Speaker 10: Have to be done if and when you can get

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Speaker 10: to a place where you have agreement on ending the

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Speaker 10: the end of the government period.

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Speaker 2: I'm curious to hear what Congressman Mike Lawler has to

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Speaker 2: say about this coming up, Genie and or remaining thirty seconds,

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Speaker 2: is that the deal here it's going to be a

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Speaker 2: full year cr it very well.

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Speaker 9: Maybe you know the time is running short now, so

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Speaker 9: they may have to do that. And I trust Bill

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Speaker 9: when he says that that may be where we're headed.

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Speaker 2: Bill Hoglan feeling the love. This is great and our

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Speaker 2: great panel as well. They're going to be back. By

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Speaker 2: the way, we'll talk with Mike Lawler, the Republican from

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Speaker 2: New York ways in on the shutdown and on the

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Speaker 2: election here in Manhattan, and then we'll have Rick and

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Speaker 2: Jennie back to unpack what we heard here. It's only Monday,

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Speaker 2: if you can imagine, but of course day thirty four

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Speaker 2: of the government shutdown, and by the time we get

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Speaker 2: to Wednesday, we'll be picking through results and looking towards

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Speaker 2: Supreme Court arguments on the President's tariffs. It's all ahead

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Speaker 2: on the fastest show in politics, This is Bloomberg. Stay

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Speaker 2: with us on Balance of Power. We'll have much more

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Speaker 2: coming up after this.

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Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

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Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

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Speaker 1: New York station Just Say Alexa played Bloomberg eleven thirty.

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Speaker 2: We're live in New York and we'll be here for

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Speaker 2: a couple of days with election coverage in store tomorrow

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Speaker 2: evening Wednesday, as we've been talking about, will resolve back

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Speaker 2: to Washington with arguments before the Supreme Court when it

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Speaker 2: comes to tariffs. We're going to talk about the election

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Speaker 2: here in Manhattan with Congressman Mike Lawler, along with, of course,

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Speaker 2: the shutdown that is now thirty four days old. And

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Speaker 2: we got some really important news right as we came

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Speaker 2: to air. The Administration responding to the courts. Remember two

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Speaker 2: judges last week compelling the administration to fund at least

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Speaker 2: part of snap benefits, and the White House says that

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Speaker 2: it will do that, pledging to partially fund food stamps

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Speaker 2: in the throes of this shutdown, knowing that a lot

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Speaker 2: of states, and we've talked with a number of them,

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Speaker 2: have been trying to take action on their own to

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Speaker 2: bridge the gap here. It's unclear exactly how long that

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Speaker 2: the White House will be able to keep this going,

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Speaker 2: but an important point here on hopefully the road to reopening,

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Speaker 2: and that's where we start our conversation with the gentlemen

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Speaker 2: from New York. Congressman Mike Lawler, Republican is with us

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Speaker 2: here on the eve of the elections. Congressman, it's good

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Speaker 2: to have you back. Day thirty four. What does this

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Speaker 2: mean for the state of New York having at least

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Speaker 2: some of these food stamps covered in how long can

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Speaker 2: the administration keep that going?

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Speaker 11: Well, assuming they're talking about depleting the emergency fund, that's

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Speaker 11: roughly six billion dollars, and food stamps for an entire

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Speaker 11: month under SNAP benefits is over nine billion, so you know,

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Speaker 11: theoretically this will extend benefits for a few weeks. But again,

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Speaker 11: we shouldn't even be in this situation. This should have

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Speaker 11: been resolved weeks ago. House Republicans passed the Clean cr

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Speaker 11: back in the middle of September to keep the government

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Speaker 11: funded and open and fully fund SNAP and WICK through

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Speaker 11: November twenty first, so that we could actually negotiate over

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Speaker 11: the final appropriations package as well as other issues including

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Speaker 11: the ACA tax credits. But Democrats, led by Chuck Schumer,

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Speaker 11: voted fourteen times to defund SNAP to defund Wick to

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Speaker 11: make sure that our military are air traffic controllers, our

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Speaker 11: border patrol agents were not getting paid. So while it's

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Speaker 11: important that we make sure SNAP is funded and deplete

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Speaker 11: the emergency fund, the fact is all of this could

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Speaker 11: be resolved very simply if Senate Democrats would do their

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Speaker 11: job as they did thirteen times under Joe Biden and

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Speaker 11: vote yes to fund the government.

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Speaker 2: Yeah, and we know where you're at on this, Congressman,

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Speaker 2: I just I wonder do you believe appolling when it

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Speaker 2: comes to the blame game, because this does seem to

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Speaker 2: be informing some Democrats' decisions on this. The NBC polls,

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Speaker 2: the most recent, forty five percent of Americans blame Republicans,

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Speaker 2: thirty three blamed Democrats. Do you buy those numbers?

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Speaker 11: Well, this is what's fun fundamentally wrong if you're governing

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Speaker 11: by polls, if you're governing based on politics, this is

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Speaker 11: why crap doesn't get done. The fundamental point here is

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Speaker 11: that there's a very simple solution, the Clean Continuing Resolution.

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Speaker 11: Both parties have passed it over the years. There's no

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Speaker 11: reason to shut the government down. All you're doing is

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Speaker 11: creating hardship for the American people. You're using people that

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Speaker 11: rely on benefits like Snap and Wick. As Chuck Schumer said,

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Speaker 11: quote every day gets better for us, and as Catherine

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Speaker 11: Clark said, this is about leverage. It's wrong. I don't

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Speaker 11: care who's quote unquote winning based on the polls. The

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Speaker 11: American people are losing because of the stupidity being played

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Speaker 11: in Washington. Past the Clean CR fund, the government make

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Speaker 11: sure programs like Snap and Wick have the resources needed

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Speaker 11: for the American people to put food on their tables.

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Speaker 2: It's not a game, you know.

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Speaker 6: We were just talking that this is.

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Speaker 11: What people are focused on, whether or not who's winning

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Speaker 11: in the polls, who cares well, it's not the issue.

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Speaker 2: We were just talking to the old Senate sage Bill

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Speaker 2: Holdland before you joined us. I don't know if you've

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Speaker 2: heard any of our conversation of the fact that the

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Speaker 2: date on the CR could soon begin to be a challenge.

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Speaker 2: Even if Democrats showed up tomorrow and said, hey, we're

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Speaker 2: going to do something different here, We're gonna start voting

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Speaker 2: or talking, we'd be walking up against a potential shutdown

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Speaker 2: again on November twenty first. I know how many times

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Speaker 2: you've made clear that Democrats have voted against this. But

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Speaker 2: at a certain point, the timeline is going to be broken, right,

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Speaker 2: do we need to extend that put a new date

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Speaker 2: on it? How would you what would be the process

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Speaker 2: in changing that deadline?

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Speaker 11: Well, clearly there's going to have to be an additional

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Speaker 11: CR after the November twenty first deadline. But in the

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Speaker 11: immediate they need to end this shutdown, so they need

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Speaker 11: to vote yes on the CR that's been sitting in

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Speaker 11: the Senate for over a month, and then we can

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Speaker 11: focus on an extension, whether it's through the end of

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Speaker 11: the year, whether it's into January of next year. I

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Speaker 11: don't think there is support for a full year CR.

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Speaker 11: I think there's a lot of issues that have to

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Speaker 11: be addressed as part of the appropriations process. So I'm

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Speaker 11: not in favor of a full year CR. I think

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Speaker 11: most members are not in favor of a full year CR.

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Speaker 11: We got to get to work, and we need to

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Speaker 11: ensure that the government agencies are funded, that the workforce

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Speaker 11: is being paid, that critical programs like SNAP and WICK

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Speaker 11: are fully funded. Let's do our jobs, and that requires

436
00:22:26,400 --> 00:22:29,280
Speaker 11: passing the clean CR that's been sitting in the Senate

437
00:22:29,320 --> 00:22:31,760
Speaker 11: for over a month. Then obviously we're going to need

438
00:22:31,800 --> 00:22:35,639
Speaker 11: to pass an additional CR date to be determined, but

439
00:22:35,720 --> 00:22:39,560
Speaker 11: the objective should be to finish the appropriations work before

440
00:22:39,600 --> 00:22:40,200
Speaker 11: the end of the year.

441
00:22:40,280 --> 00:22:42,200
Speaker 2: I have to admit I was surprised to hear Jason Smith,

442
00:22:42,200 --> 00:22:44,720
Speaker 2: who shares the Ways and Means Committee, tell us on

443
00:22:44,760 --> 00:22:48,240
Speaker 2: the year that he supported a full year CR, which

444
00:22:48,280 --> 00:22:52,520
Speaker 2: gives us a sense of how difficult appropriating has become.

445
00:22:52,680 --> 00:22:55,000
Speaker 2: A congressman, I want to ask you about the mayoral

446
00:22:55,119 --> 00:22:58,439
Speaker 2: race here in town. President Trump was asked about it

447
00:22:58,480 --> 00:23:01,760
Speaker 2: on sixty Minutes. Probably heard what he said about Andrew Cuomo.

448
00:23:01,880 --> 00:23:04,600
Speaker 2: Let's let everyone hear for the sake of our audience.

449
00:23:04,640 --> 00:23:06,359
Speaker 2: He's president on CBS.

450
00:23:06,840 --> 00:23:09,560
Speaker 8: It's going to be hard for me as the president

451
00:23:09,880 --> 00:23:13,480
Speaker 8: to give a lot of money to New York because

452
00:23:13,600 --> 00:23:16,720
Speaker 8: if you have a communist running New York, all you're

453
00:23:16,720 --> 00:23:19,720
Speaker 8: doing is wasting the money you're sending there. So I

454
00:23:19,760 --> 00:23:21,560
Speaker 8: don't know that he's one, and I'm not a fan

455
00:23:21,600 --> 00:23:23,440
Speaker 8: of Cuomo one way or the other. But if it's

456
00:23:23,440 --> 00:23:28,000
Speaker 8: going to be between a bad Democrat and a communist,

457
00:23:28,040 --> 00:23:30,200
Speaker 8: I'm going to pick the bad Democrat all the time.

458
00:23:30,240 --> 00:23:31,120
Speaker 6: To be honest with.

459
00:23:31,040 --> 00:23:34,080
Speaker 2: You, where's your head on this congressman. As it appears

460
00:23:34,119 --> 00:23:36,480
Speaker 2: there's going to be a New York mayor. Mom, Donnie,

461
00:23:36,520 --> 00:23:38,800
Speaker 2: if that in fact happens, do you worry about federal

462
00:23:38,840 --> 00:23:40,640
Speaker 2: funding for the city.

463
00:23:41,280 --> 00:23:44,760
Speaker 11: Well, it's interesting to see President Trump and Mike Bloomberg

464
00:23:44,880 --> 00:23:48,359
Speaker 11: on the same page. I know Mike Bloomberg has supported

465
00:23:48,359 --> 00:23:52,080
Speaker 11: and endorsed Andrew Cuomo. You know, from my vantage point,

466
00:23:52,960 --> 00:23:55,199
Speaker 11: it's a little bit of a bridge too far to

467
00:23:55,359 --> 00:23:58,680
Speaker 11: endorse Andrew Cuomo for me. So many of the challenges

468
00:23:58,720 --> 00:24:02,639
Speaker 11: facing New York, from cashust bail, to sanctuary state policies,

469
00:24:02,680 --> 00:24:06,399
Speaker 11: to shutting down Indian Point and banning natural gas were

470
00:24:06,960 --> 00:24:12,399
Speaker 11: policies at his hands. But as President said, when given

471
00:24:12,440 --> 00:24:15,800
Speaker 11: a choice, and in this case, based on the polls,

472
00:24:15,840 --> 00:24:19,879
Speaker 11: the choices really between Mandani and Cuomo. It's a choice

473
00:24:19,920 --> 00:24:22,840
Speaker 11: between the lesser of two evils. As far as I'm concerned.

474
00:24:23,560 --> 00:24:27,439
Speaker 11: In a vowed socialist Marxist who talks about seizing the

475
00:24:27,520 --> 00:24:31,080
Speaker 11: means of production, banning private property ownership, freezing the rent,

476
00:24:31,160 --> 00:24:35,280
Speaker 11: raising taxes by nine billion dollars on New Yorkers, he

477
00:24:35,320 --> 00:24:39,440
Speaker 11: wants to defund the police, legalized prostitutions, shut down prisons,

478
00:24:40,680 --> 00:24:44,840
Speaker 11: free bussing government run grocery stores. These policies have never

479
00:24:44,920 --> 00:24:48,280
Speaker 11: worked wherever they've been tried. Part of the reason why

480
00:24:48,520 --> 00:24:51,199
Speaker 11: we have had so much immigration into the United States

481
00:24:51,240 --> 00:24:55,200
Speaker 11: is because people are fleeing countries that promote these policies,

482
00:24:55,240 --> 00:24:58,359
Speaker 11: whether it be in Eastern Europe or in South and

483
00:24:58,440 --> 00:24:59,480
Speaker 11: Central America.

484
00:24:59,600 --> 00:25:00,520
Speaker 6: They don't work.

485
00:25:00,920 --> 00:25:03,760
Speaker 11: And yet here we are on the verge of electing

486
00:25:03,840 --> 00:25:07,560
Speaker 11: an avowed socialist as mayor of New York City, the

487
00:25:07,640 --> 00:25:10,399
Speaker 11: financial capital of the world. You will see a mass

488
00:25:10,520 --> 00:25:13,640
Speaker 11: exodus out of New York. It's not just about federal dollars.

489
00:25:14,040 --> 00:25:18,359
Speaker 11: The tax base will deplete because businesses and those who

490
00:25:18,440 --> 00:25:22,240
Speaker 11: can afford to leave will and that will be catastrophic

491
00:25:22,280 --> 00:25:25,200
Speaker 11: for New York. It's part of the reason why yesterday,

492
00:25:25,200 --> 00:25:29,359
Speaker 11: when Kathy Hokeel and Hakeem Jeffries were both asked is

493
00:25:29,440 --> 00:25:32,520
Speaker 11: zo ron Mandani the future of the Democratic Party? They

494
00:25:32,560 --> 00:25:35,520
Speaker 11: both stuttered and stammered and couldn't get out of there

495
00:25:35,520 --> 00:25:38,159
Speaker 11: fast enough because they know this is a disaster for

496
00:25:38,200 --> 00:25:41,560
Speaker 11: the Democratic Party to have an avowed socialist leading the

497
00:25:41,640 --> 00:25:43,840
Speaker 11: charge in New York City. He will become the face

498
00:25:43,880 --> 00:25:46,959
Speaker 11: of the Democratic Party and it is not good for

499
00:25:47,000 --> 00:25:50,920
Speaker 11: New York as a lifelong New Yorker. This is a disaster,

500
00:25:51,280 --> 00:25:53,560
Speaker 11: and it's part of the reason why, you know, when

501
00:25:53,600 --> 00:25:57,359
Speaker 11: people go to vote tomorrow, choose wisely, because this is

502
00:25:57,400 --> 00:25:58,680
Speaker 11: going to be catastrophic.

503
00:25:59,160 --> 00:26:01,480
Speaker 2: With the lesser of two evils, Mike Lawler, the Congressman

504
00:26:01,480 --> 00:26:02,879
Speaker 2: from New York, It's good to see us here and

505
00:26:02,920 --> 00:26:05,520
Speaker 2: many thanks for being with us on Bloomberg. Indeed, Michael

506
00:26:05,560 --> 00:26:07,960
Speaker 2: Bloomberg has endorsed Andrew Cuomo in the New York City

507
00:26:08,000 --> 00:26:10,919
Speaker 2: mayoral race. He's donated to a super pac supporting Cuomo,

508
00:26:11,400 --> 00:26:14,360
Speaker 2: and Michael Bloomberg is the founder majority owner of Bloomberg LP,

509
00:26:14,480 --> 00:26:17,160
Speaker 2: the parent company of Bloomberg TV and Radio. Let's play

510
00:26:17,160 --> 00:26:19,320
Speaker 2: it to the panel. Rick Davis and Jeanie Shanzino are

511
00:26:19,320 --> 00:26:23,720
Speaker 2: with us. Bloomberg Politics contributors back with us throughout the

512
00:26:23,760 --> 00:26:26,640
Speaker 2: hour here. Rick, of course, are Republican strategists, and I'll

513
00:26:26,640 --> 00:26:29,960
Speaker 2: start there with you. Rick. We talked a little bit

514
00:26:30,040 --> 00:26:33,119
Speaker 2: about the president's sort of tacit endorsement of Andrew Cuomo

515
00:26:33,800 --> 00:26:37,120
Speaker 2: earlier today. Should Republicans have simply run a better candidate

516
00:26:37,280 --> 00:26:38,560
Speaker 2: or does that not matter in New York?

517
00:26:40,560 --> 00:26:45,960
Speaker 10: You know, it always matters because the ability to get

518
00:26:46,000 --> 00:26:50,040
Speaker 10: in and define what the terms of the election, what

519
00:26:50,080 --> 00:26:52,200
Speaker 10: the stakes of the election are going to be, is

520
00:26:52,560 --> 00:26:53,320
Speaker 10: really important.

521
00:26:53,480 --> 00:26:55,400
Speaker 6: And I would say.

522
00:26:57,040 --> 00:27:01,119
Speaker 10: Kurtzly has been a perennial mayor, so I do think

523
00:27:01,400 --> 00:27:04,080
Speaker 10: you know what they'll probably look at is let's find

524
00:27:04,119 --> 00:27:07,040
Speaker 10: some other way to make that point, because this has

525
00:27:07,080 --> 00:27:09,480
Speaker 10: not gotten us very far. And look, I mean right

526
00:27:09,520 --> 00:27:11,160
Speaker 10: now in some of the polls, he's getting as many

527
00:27:11,240 --> 00:27:12,800
Speaker 10: votes almost.

528
00:27:14,119 --> 00:27:14,800
Speaker 6: Is Cuomo.

529
00:27:15,040 --> 00:27:17,439
Speaker 10: So you never really know what impact you're going to have.

530
00:27:18,760 --> 00:27:21,639
Speaker 10: You mentioned Mike Bloomberg got elected mayor as a Republican

531
00:27:21,680 --> 00:27:24,399
Speaker 10: the first time he ran, so never say never. But

532
00:27:24,680 --> 00:27:28,359
Speaker 10: in this case, all eyes are on the Democratic Socialist,

533
00:27:28,480 --> 00:27:32,480
Speaker 10: as Donald Trump calls him, the communist Marxist has been

534
00:27:32,520 --> 00:27:35,560
Speaker 10: mentioned by Congressman Lawler. I mean, like, this guy's got

535
00:27:35,640 --> 00:27:39,920
Speaker 10: more titles than anything I've ever heard of, and yet

536
00:27:39,960 --> 00:27:42,240
Speaker 10: I think one thing everybody agrees upon. He's likely to

537
00:27:42,280 --> 00:27:45,240
Speaker 10: have a new title, you know, come tomorrow, and that's

538
00:27:45,560 --> 00:27:46,359
Speaker 10: mayor in New York.

539
00:27:46,400 --> 00:27:48,760
Speaker 2: Boy, Genie, I'm not sure what you made of our

540
00:27:48,760 --> 00:27:52,879
Speaker 2: conversation there, But can Donald Trump get Andrew Cuomo elected mayor?

541
00:27:54,800 --> 00:27:54,879
Speaker 11: No?

542
00:27:55,080 --> 00:27:57,199
Speaker 2: I don't think Donald Trump can get him elected.

543
00:27:57,240 --> 00:27:59,880
Speaker 9: And I think the question you asked Rick about sleiwa

544
00:28:00,440 --> 00:28:02,320
Speaker 9: is a really good one because I think it can

545
00:28:02,400 --> 00:28:06,320
Speaker 9: also be asked about moderate Democrats and I often consider

546
00:28:06,400 --> 00:28:09,720
Speaker 9: myself one in terms of their choice of Canada. In

547
00:28:09,800 --> 00:28:12,920
Speaker 9: terms of Cuomo, you know, it's not that long ago

548
00:28:12,960 --> 00:28:15,760
Speaker 9: that Cuomo stepped down as governor. He had, you know,

549
00:28:16,000 --> 00:28:19,560
Speaker 9: several several issues dogging him at that point. He has

550
00:28:19,640 --> 00:28:21,520
Speaker 9: tried to get over those, but it hasn't been a

551
00:28:21,520 --> 00:28:24,800
Speaker 9: long time. And of course you see the young people

552
00:28:24,840 --> 00:28:28,120
Speaker 9: and the energy out for Mundani. So I think there

553
00:28:28,200 --> 00:28:32,800
Speaker 9: is that question about both sides of the aisle when

554
00:28:32,800 --> 00:28:35,479
Speaker 9: it comes to New York City in terms of the

555
00:28:35,600 --> 00:28:40,080
Speaker 9: party elite, if you will, the more moderate members. So

556
00:28:40,320 --> 00:28:42,480
Speaker 9: I think that's a question that can be asked because

557
00:28:42,520 --> 00:28:45,600
Speaker 9: of course we look at that Democratic primary and Mandani

558
00:28:45,840 --> 00:28:48,400
Speaker 9: beat Cuomo by a large margin, which is why he's

559
00:28:48,480 --> 00:28:51,400
Speaker 9: running as an independent. That said, this thing is not over.

560
00:28:51,560 --> 00:28:55,840
Speaker 9: Polls show its tightening, and you mentioned early turnout being huge.

561
00:28:55,880 --> 00:28:58,560
Speaker 9: It is enormous and lots of people over the age

562
00:28:58,560 --> 00:29:01,560
Speaker 9: of fifty, and those people may go with Cuomo. This

563
00:29:01,720 --> 00:29:05,040
Speaker 9: may be a race of generations, and so Cuomo still

564
00:29:05,080 --> 00:29:07,600
Speaker 9: has a shot here, although again the polls would have

565
00:29:07,640 --> 00:29:10,080
Speaker 9: to be wildly wrong if Mom Donnie loses.

566
00:29:10,200 --> 00:29:12,040
Speaker 2: Hey, listen, this is why we came up here. This

567
00:29:12,120 --> 00:29:13,880
Speaker 2: is the real stuff, and we're looking forward to our

568
00:29:13,880 --> 00:29:17,320
Speaker 2: coverage tomorrow with the help of Genie Shanzano and Rick Davis,

569
00:29:17,360 --> 00:29:20,080
Speaker 2: Bloomberg Politics contributors. Thanks to both of you for weighing

570
00:29:20,120 --> 00:29:23,680
Speaker 2: in here following our conversation with Congressman Mike Lawler. Stay

571
00:29:23,680 --> 00:29:25,800
Speaker 2: with us on Balance of Power. We'll have much more

572
00:29:25,840 --> 00:29:26,800
Speaker 2: coming up after this.

573
00:29:32,240 --> 00:29:35,720
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch

574
00:29:35,800 --> 00:29:39,200
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,

575
00:29:39,280 --> 00:29:42,640
Speaker 1: Cocklay and Android Auto with the Bloomberg Business app. Listen

576
00:29:42,680 --> 00:29:45,800
Speaker 1: on demand wherever you get your podcasts, or watch us

577
00:29:45,840 --> 00:29:47,240
Speaker 1: live on YouTube.

578
00:29:48,440 --> 00:29:50,560
Speaker 2: Nice to see you. We're at World's headquarters in New

579
00:29:50,600 --> 00:29:52,440
Speaker 2: York and we're park here for a couple of days

580
00:29:52,760 --> 00:29:56,000
Speaker 2: because we'll be here for Election Night special coverage tomorrow.

581
00:29:56,040 --> 00:29:57,680
Speaker 2: We do have a lot more to talk about when

582
00:29:57,720 --> 00:30:00,440
Speaker 2: it comes to elections in New York, Virginia, New Jersey,

583
00:30:00,480 --> 00:30:03,000
Speaker 2: and we will coming up a little bit later in

584
00:30:03,080 --> 00:30:05,160
Speaker 2: the program with our political panel, and at the top

585
00:30:05,200 --> 00:30:07,240
Speaker 2: of the hour one pm Eastern Time, will be joined

586
00:30:07,240 --> 00:30:10,760
Speaker 2: by Republican Congressman Mike Lawler of New York, who has

587
00:30:11,280 --> 00:30:13,240
Speaker 2: as you could well expect a few things to say

588
00:30:13,280 --> 00:30:16,080
Speaker 2: about the New York mayoral election, not to mention our shutdown.

589
00:30:16,120 --> 00:30:20,320
Speaker 2: We are in day thirty four. It's not bothering the market,

590
00:30:20,360 --> 00:30:22,360
Speaker 2: says we just heard from Charlie Pellett. In fact, we

591
00:30:22,400 --> 00:30:25,720
Speaker 2: wake up to yet another massive announcement when it comes

592
00:30:25,720 --> 00:30:27,520
Speaker 2: to the AI spend, and I'm guessing there are a

593
00:30:27,560 --> 00:30:29,400
Speaker 2: lot of investors who are feeling like they missed the

594
00:30:29,400 --> 00:30:31,680
Speaker 2: boat when it comes to Amazon, because Amazon had been

595
00:30:31,760 --> 00:30:33,920
Speaker 2: largely left on the side of the road in this

596
00:30:33,960 --> 00:30:36,720
Speaker 2: conversation and following the earnings report last week and now

597
00:30:36,760 --> 00:30:40,280
Speaker 2: this it's a different world. Amazon's cloud unit signing a

598
00:30:40,440 --> 00:30:46,080
Speaker 2: thirty eight billion dollar deal to supply open AI's open

599
00:30:46,120 --> 00:30:48,520
Speaker 2: Ai with computing power, and it's got the stocks on

600
00:30:48,760 --> 00:30:51,320
Speaker 2: the move here. It's going to involve Nvidia chips, and

601
00:30:51,360 --> 00:30:54,560
Speaker 2: so everybody is happy all over again. That means we

602
00:30:54,600 --> 00:30:57,480
Speaker 2: get to spend some time here with Caroline Hyde. As

603
00:30:57,480 --> 00:30:59,840
Speaker 2: I mentioned in person, this is see part of the

604
00:31:00,000 --> 00:31:01,400
Speaker 2: one of coming to New York is you get to

605
00:31:01,440 --> 00:31:03,160
Speaker 2: see all the famous people like the co host of

606
00:31:03,160 --> 00:31:05,640
Speaker 2: Bloomberg Tech on Bloomberg TV. Great to see you.

607
00:31:05,720 --> 00:31:07,160
Speaker 5: It's so much fun to be hearing.

608
00:31:07,400 --> 00:31:09,360
Speaker 2: Well, it's what a treat for me. I would just

609
00:31:09,400 --> 00:31:13,360
Speaker 2: love to hear from you about this idea of circular investing.

610
00:31:13,880 --> 00:31:18,440
Speaker 2: The lazy susan, how does open ai find another announcement

611
00:31:18,480 --> 00:31:21,280
Speaker 2: every other day? Because I'm hearing that this is actually

612
00:31:22,160 --> 00:31:25,040
Speaker 2: something that investors can look at as a more real

613
00:31:25,200 --> 00:31:28,400
Speaker 2: transaction as to some of the other kind of longer

614
00:31:28,480 --> 00:31:29,480
Speaker 2: term visionary deals.

615
00:31:29,560 --> 00:31:32,920
Speaker 12: Because the data centers are already there and the compute

616
00:31:32,920 --> 00:31:35,280
Speaker 12: equipment that AWS is going to be able to provide,

617
00:31:35,280 --> 00:31:36,520
Speaker 12: it is basically going to be up and running by

618
00:31:36,520 --> 00:31:39,760
Speaker 12: the end of twenty twenty six, much closer in proximity

619
00:31:39,800 --> 00:31:40,760
Speaker 12: than perhaps.

620
00:31:40,560 --> 00:31:42,680
Speaker 5: The three hundred billion dollar deal.

621
00:31:42,480 --> 00:31:45,680
Speaker 12: That's been struck with Oracle or the tens of billions

622
00:31:45,720 --> 00:31:48,480
Speaker 12: that open ai has agreed with Broadcom to develop its

623
00:31:48,480 --> 00:31:51,880
Speaker 12: own chips. Amazon is already the dominant market player when

624
00:31:51,880 --> 00:31:54,600
Speaker 12: it comes to offering cloud they are now because of

625
00:31:54,640 --> 00:31:58,560
Speaker 12: the new agreement between Microsoft and INAI allowed to have

626
00:31:58,560 --> 00:32:00,200
Speaker 12: a bit more of the piece of the pile when

627
00:32:00,200 --> 00:32:03,240
Speaker 12: it comes to offering some compute to open Ai, of

628
00:32:03,240 --> 00:32:05,880
Speaker 12: which of course has an insatiable demand for these things

629
00:32:05,920 --> 00:32:08,280
Speaker 12: as it trains its large language models. So thirty eight

630
00:32:08,280 --> 00:32:10,640
Speaker 12: billion dollars straight up. We've got a seven year agreement.

631
00:32:10,640 --> 00:32:13,320
Speaker 12: This could ramp up ever higher, and already they're saying

632
00:32:13,320 --> 00:32:15,560
Speaker 12: they're going to be deploying these GPUs that are in

633
00:32:15,600 --> 00:32:18,280
Speaker 12: the hundreds of thousands when it comes to Nvidia, but

634
00:32:18,360 --> 00:32:21,560
Speaker 12: also CPUs, and that's where the nuance goes because Amazon's

635
00:32:21,600 --> 00:32:25,280
Speaker 12: real selling point here is, look, we are vertically integrated. Sure,

636
00:32:25,440 --> 00:32:27,120
Speaker 12: come with us and we'll give you the cloud compute,

637
00:32:27,120 --> 00:32:29,520
Speaker 12: but we're orders though, developing our own chips. They don't

638
00:32:29,680 --> 00:32:32,920
Speaker 12: name check Trainium in this particular statement, but remember that's

639
00:32:32,920 --> 00:32:35,040
Speaker 12: why Anthropic has been a big investment for them. And

640
00:32:35,040 --> 00:32:38,000
Speaker 12: where are anthropics helping them use their own chips in

641
00:32:38,040 --> 00:32:40,160
Speaker 12: the future. They say they could be millions of CPUs

642
00:32:40,200 --> 00:32:42,680
Speaker 12: provided maybe that's a bit more of Amazon's take. So

643
00:32:42,920 --> 00:32:44,840
Speaker 12: this is really just feeding on what you said, was

644
00:32:44,840 --> 00:32:46,480
Speaker 12: that narrative? We've got the end of the week that

645
00:32:46,720 --> 00:32:49,480
Speaker 12: AWS is back up and running. We've seen growth accelerate

646
00:32:49,480 --> 00:32:50,719
Speaker 12: into the twenty percent demand.

647
00:32:50,880 --> 00:32:54,160
Speaker 2: Wow, amazing. So where does this leave Microsoft, which has

648
00:32:54,200 --> 00:32:56,600
Speaker 2: a massive stake in open ai, and it goes back

649
00:32:56,640 --> 00:32:58,560
Speaker 2: to the question of how can all of these competitors

650
00:32:58,560 --> 00:33:01,240
Speaker 2: be enriching each other and make that sustainable.

651
00:33:01,440 --> 00:33:03,160
Speaker 12: Well, I mean all parths of you back to in

652
00:33:03,240 --> 00:33:04,960
Speaker 12: video of course, is always about their GPUs.

653
00:33:05,080 --> 00:33:05,720
Speaker 5: They do well.

654
00:33:05,880 --> 00:33:08,840
Speaker 12: Microsoft in the meantime is signing its own deals, and

655
00:33:08,880 --> 00:33:11,760
Speaker 12: I think Microsoft's real key message last week in their

656
00:33:11,760 --> 00:33:14,120
Speaker 12: earnings was we don't have a demand.

657
00:33:13,720 --> 00:33:15,680
Speaker 5: Issue here, we have a supply issue.

658
00:33:15,720 --> 00:33:17,960
Speaker 12: And that's why Amy Heard and Sati and Ela have

659
00:33:18,040 --> 00:33:21,160
Speaker 12: got ever more creative about how they're using Neo clouds.

660
00:33:21,320 --> 00:33:22,800
Speaker 5: That was the big news that we got out of

661
00:33:22,840 --> 00:33:23,280
Speaker 5: them today.

662
00:33:23,360 --> 00:33:25,640
Speaker 12: Iron is actually an Australian company but has a lot

663
00:33:25,680 --> 00:33:27,480
Speaker 12: of compute access because it used.

664
00:33:27,400 --> 00:33:28,600
Speaker 5: To be helping mine bitcoin.

665
00:33:28,720 --> 00:33:31,320
Speaker 12: Now it's got a lot of access to compute in Texas,

666
00:33:31,680 --> 00:33:34,200
Speaker 12: and they're signing a nine point seven billion dollar deal

667
00:33:34,200 --> 00:33:36,400
Speaker 12: in Microsoft to allow them to lease some of their

668
00:33:36,400 --> 00:33:38,400
Speaker 12: compute going forward, and they have extra to come.

669
00:33:38,640 --> 00:33:40,200
Speaker 5: Microsoft's trying to be creative in that.

670
00:33:40,400 --> 00:33:42,200
Speaker 12: Yes I'll build my own data centers, and yes I'll

671
00:33:42,240 --> 00:33:44,560
Speaker 12: ramp up my Capex, but look in five years time,

672
00:33:44,600 --> 00:33:45,880
Speaker 12: if the lease has to come to an end and

673
00:33:45,880 --> 00:33:47,880
Speaker 12: I haven't had the end demand there, that can go

674
00:33:48,040 --> 00:33:50,960
Speaker 12: so they've got deals with Nscale, with Nevius over in Europe,

675
00:33:50,960 --> 00:33:53,520
Speaker 12: and then they're doing this deal with Iron. But for Microsoft,

676
00:33:53,800 --> 00:33:56,560
Speaker 12: I think there was an admission that relationship with the

677
00:33:56,560 --> 00:33:59,000
Speaker 12: open AI had to change because they didn't have the

678
00:33:59,000 --> 00:34:02,720
Speaker 12: amount of compute that need. Some altman's talking the trillions

679
00:34:02,760 --> 00:34:03,960
Speaker 12: of dollars that he needs.

680
00:34:04,160 --> 00:34:06,280
Speaker 2: So I need to get abstract with you in our

681
00:34:06,280 --> 00:34:09,480
Speaker 2: remaining couple of moments here, because when you hear headlines

682
00:34:09,560 --> 00:34:12,080
Speaker 2: like we did over the weekend that AI spending made

683
00:34:12,120 --> 00:34:15,840
Speaker 2: up more than ninety percent of quarterly GDP, I'll have

684
00:34:16,080 --> 00:34:18,840
Speaker 2: my own anecdotal. By the way, tell me I'm wrong.

685
00:34:19,040 --> 00:34:22,160
Speaker 2: When I flew from Washington to New York yesterday, I

686
00:34:22,200 --> 00:34:25,799
Speaker 2: could see the data centers all the way up the coast,

687
00:34:25,880 --> 00:34:28,960
Speaker 2: in places where I had never noticed them before. Maybe

688
00:34:29,040 --> 00:34:32,200
Speaker 2: I'm not. I just had to mention that arise. I

689
00:34:32,200 --> 00:34:34,080
Speaker 2: don't know, maybe that's not even real, but I kept

690
00:34:34,120 --> 00:34:36,360
Speaker 2: I said, look, there's another one, another farm of data centers.

691
00:34:37,760 --> 00:34:39,840
Speaker 2: There are critics who think that this is a bubble.

692
00:34:39,880 --> 00:34:42,200
Speaker 2: You hear about them every day. Yeah, you talk to

693
00:34:42,239 --> 00:34:44,880
Speaker 2: the evangelists who run these AI companies. Someone's got to

694
00:34:44,920 --> 00:34:45,280
Speaker 2: be wrong.

695
00:34:46,200 --> 00:34:49,479
Speaker 12: I think many would admit some Altman has admitted, even

696
00:34:49,560 --> 00:34:51,960
Speaker 12: Brett Taylor, who's the chairman of open Ai, has omitted,

697
00:34:51,960 --> 00:34:53,520
Speaker 12: even Bill Gates has omitted.

698
00:34:53,239 --> 00:34:54,600
Speaker 5: That not everyone's going to win.

699
00:34:54,960 --> 00:34:56,919
Speaker 12: There are going to be money deployed into the wrong

700
00:34:56,960 --> 00:35:00,760
Speaker 12: players here. But at the moment GPUs are being created

701
00:35:00,800 --> 00:35:02,480
Speaker 12: and sold, money goes to Nvidio.

702
00:35:02,600 --> 00:35:03,680
Speaker 5: That's real revenue.

703
00:35:03,840 --> 00:35:07,480
Speaker 12: Microsoft is selling compute with Azure, that is real revenue.

704
00:35:07,640 --> 00:35:09,400
Speaker 12: Open AI, I think, is the one that's got to

705
00:35:09,400 --> 00:35:11,120
Speaker 12: prove it all out. Some of these new and neo

706
00:35:11,200 --> 00:35:13,360
Speaker 12: clouds are the ones that are still building and picks

707
00:35:13,400 --> 00:35:16,319
Speaker 12: and shovels in twenty twenty eight, will we have had

708
00:35:16,360 --> 00:35:19,280
Speaker 12: the three trillion dollars spent on data centers that Morgan

709
00:35:19,320 --> 00:35:21,279
Speaker 12: Stanley thinks there will have been, And how will it

710
00:35:21,360 --> 00:35:24,120
Speaker 12: been financed? And we're getting more creative off balance sheet?

711
00:35:24,200 --> 00:35:26,560
Speaker 12: Are we seeing debt like how bet cells today? Are

712
00:35:26,560 --> 00:35:28,719
Speaker 12: we seeing like Meta thirty billion dollars? I think we

713
00:35:28,840 --> 00:35:31,440
Speaker 12: just need the nuance of what is the overall return

714
00:35:31,480 --> 00:35:32,320
Speaker 12: on AI investment.

715
00:35:32,400 --> 00:35:34,359
Speaker 5: But you're right, the AI spending is real.

716
00:35:34,520 --> 00:35:37,120
Speaker 2: Well, I think the Atlantic referred to this as the

717
00:35:37,160 --> 00:35:40,360
Speaker 2: invidious state. Can a column over the weekend how much

718
00:35:40,400 --> 00:35:42,759
Speaker 2: of our fortunes are writing on a single company in this.

719
00:35:42,760 --> 00:35:46,200
Speaker 12: Country extraordary and worldwide. Yeah, we're starting to see them

720
00:35:46,200 --> 00:35:48,759
Speaker 12: striking deals over in Asia. South Korea is now really

721
00:35:48,840 --> 00:35:51,360
Speaker 12: using them as the partner of choice. We've got Europe

722
00:35:51,360 --> 00:35:53,520
Speaker 12: wanting to big up its own sovereign AI. I think

723
00:35:53,600 --> 00:35:57,840
Speaker 12: most economies are being sustained by this need to build

724
00:35:57,920 --> 00:35:58,800
Speaker 12: and build strongly.

725
00:35:59,000 --> 00:36:00,799
Speaker 2: You're so good at this. I'm so glad you could

726
00:36:00,800 --> 00:36:03,439
Speaker 2: come buy Caroline Hyde. Of course, thank you as ever

727
00:36:03,960 --> 00:36:06,359
Speaker 2: Bloomberg Tech. You know that already on Bloomberg TV, where

728
00:36:06,400 --> 00:36:09,160
Speaker 2: they're covering this every day in a way that you

729
00:36:09,200 --> 00:36:13,000
Speaker 2: can't see anywhere else but on Bloomberg TV. What a

730
00:36:13,040 --> 00:36:14,960
Speaker 2: treat here as we watch the stocks move on this,

731
00:36:15,040 --> 00:36:17,560
Speaker 2: my goodness, you've been listening to Charlie Pellett, of course.

732
00:36:17,600 --> 00:36:20,719
Speaker 2: And Vidia is up three percent today, We're approaching two

733
00:36:20,800 --> 00:36:23,560
Speaker 2: hundred and ten dollars. Amazon is flying as well. It's

734
00:36:23,600 --> 00:36:25,760
Speaker 2: up another five percent for that big pop on earnings

735
00:36:25,840 --> 00:36:28,560
Speaker 2: last week. And it's a great opportunity to spend some

736
00:36:28,600 --> 00:36:31,040
Speaker 2: time with Christina Kino also with us in person here

737
00:36:31,080 --> 00:36:35,160
Speaker 2: at World headquarters in New York, Managing Editor, Bloomberg Markets Live, blog.

738
00:36:35,480 --> 00:36:37,560
Speaker 2: We never get to do this and actually see each other.

739
00:36:37,719 --> 00:36:40,319
Speaker 2: I'm so prostate. What a treat. So we were just

740
00:36:40,360 --> 00:36:42,120
Speaker 2: making the point that we're on day thirty four of

741
00:36:42,120 --> 00:36:45,759
Speaker 2: a government shutdown. Wall Street couldn't care less apparently, and

742
00:36:45,800 --> 00:36:48,040
Speaker 2: as we learn now that SNAP benefits will at least

743
00:36:48,040 --> 00:36:51,400
Speaker 2: be partially funded, some think that is a sign that

744
00:36:51,440 --> 00:36:54,200
Speaker 2: this shutdown will just keep on going because we're removing

745
00:36:54,239 --> 00:36:56,279
Speaker 2: the pain points. As they say, at what point does

746
00:36:56,320 --> 00:36:57,920
Speaker 2: Wall Street run out of patients?

747
00:36:58,160 --> 00:36:58,399
Speaker 11: Yeah?

748
00:36:58,480 --> 00:37:01,240
Speaker 13: I mean very interesting, Joe, because my team did actually

749
00:37:01,239 --> 00:37:05,920
Speaker 13: conduct a survey a few weeks ago asking our clients,

750
00:37:06,280 --> 00:37:08,520
Speaker 13: you know, at what point would the shutdown actually start

751
00:37:08,520 --> 00:37:09,240
Speaker 13: to hurt markets?

752
00:37:09,280 --> 00:37:11,640
Speaker 5: And they said that if it lasts.

753
00:37:11,239 --> 00:37:12,120
Speaker 13: For more than a month.

754
00:37:12,400 --> 00:37:13,600
Speaker 2: But here we are, we are.

755
00:37:13,760 --> 00:37:17,880
Speaker 13: Exactly nearly thirty five days, and it's still really not

756
00:37:18,080 --> 00:37:21,160
Speaker 13: showing any signs of piercing that equity rally. And you know,

757
00:37:21,400 --> 00:37:24,799
Speaker 13: for reasons that are not related really to the shutdown. Right,

758
00:37:24,840 --> 00:37:28,480
Speaker 13: we have this constant story of deal after deal in

759
00:37:28,520 --> 00:37:32,600
Speaker 13: the AI space being made that's really sustaining investor enthusiasm.

760
00:37:32,680 --> 00:37:35,120
Speaker 13: That's allowing them to kind of set aside a shutdown

761
00:37:35,160 --> 00:37:38,000
Speaker 13: for a little bit and focus on other more optimistic.

762
00:37:37,440 --> 00:37:39,719
Speaker 2: Things, which is all AI all the time. Right, we

763
00:37:39,760 --> 00:37:41,799
Speaker 2: were just talking about this monster deal, and I know

764
00:37:41,800 --> 00:37:44,759
Speaker 2: you're writing about this as well. At what point do

765
00:37:44,840 --> 00:37:47,120
Speaker 2: you start to get nervous or are you already about

766
00:37:47,160 --> 00:37:49,640
Speaker 2: breadth in this market? Because we're going to we inevitably

767
00:37:49,640 --> 00:37:52,399
Speaker 2: are going to hear about a rotation that is now

768
00:37:52,400 --> 00:37:55,360
Speaker 2: it's a value thing, and it just never happens. The

769
00:37:55,480 --> 00:37:56,960
Speaker 2: tech stocks just keep climbing.

770
00:37:57,080 --> 00:37:57,960
Speaker 5: Yeah, absolutely, Joh.

771
00:37:57,960 --> 00:38:00,440
Speaker 13: I mean the interesting thing you make such a good

772
00:38:00,440 --> 00:38:03,279
Speaker 13: point regarding the breath, because that has been the long

773
00:38:03,320 --> 00:38:06,799
Speaker 13: standing issue with this AI fuel rally this year, the

774
00:38:06,880 --> 00:38:10,719
Speaker 13: fact that it has been repeatedly driven being driven by

775
00:38:10,960 --> 00:38:13,480
Speaker 13: a shrinking number of stocks, and meanwhile the rest of

776
00:38:13,480 --> 00:38:16,200
Speaker 13: the market not really showing much signs of life. But

777
00:38:16,440 --> 00:38:18,799
Speaker 13: I think what's kind of changed in narrative now is

778
00:38:18,840 --> 00:38:21,840
Speaker 13: that within the AI space and the AI trade itself,

779
00:38:21,880 --> 00:38:24,239
Speaker 13: it does seem like there's a bit of a broadening

780
00:38:24,280 --> 00:38:24,759
Speaker 13: in that theme.

781
00:38:24,840 --> 00:38:24,960
Speaker 7: Right.

782
00:38:25,000 --> 00:38:28,600
Speaker 13: Initially we've seen mostly the Magnificent seven benefiting from it.

783
00:38:28,600 --> 00:38:31,600
Speaker 13: It's really the giants where gains are concentrated, where those

784
00:38:31,640 --> 00:38:34,360
Speaker 13: deals are concentrated. But now I think that theme is

785
00:38:34,400 --> 00:38:38,080
Speaker 13: moving beyond kind of who has the initial kind of hype,

786
00:38:38,239 --> 00:38:41,360
Speaker 13: which is a lot of the Magnificent seven and now

787
00:38:41,560 --> 00:38:44,040
Speaker 13: the picks and shovels parts of this trade. Right, we're

788
00:38:44,040 --> 00:38:48,719
Speaker 13: talking about providers of power, the providers of data center infrastructure.

789
00:38:48,719 --> 00:38:51,399
Speaker 13: It seems like there's that shift now, which I think

790
00:38:51,440 --> 00:38:54,200
Speaker 13: is giving investors a reason to be more optimistic because

791
00:38:54,520 --> 00:38:57,480
Speaker 13: now they're thinking, Hey, it's not just concentrated, right, which

792
00:38:57,520 --> 00:39:01,640
Speaker 13: is the risk. It's now actually broadening that AI benefit circle.

793
00:39:01,719 --> 00:39:04,120
Speaker 2: So maybe it's not just the Nvidia state, Maybe it's

794
00:39:04,120 --> 00:39:06,920
Speaker 2: the AI state. As we spend time with Christina Kino,

795
00:39:06,960 --> 00:39:10,240
Speaker 2: I'm looking at this Canview deal today. It's a monster

796
00:39:10,360 --> 00:39:13,560
Speaker 2: forty billion dollars Kimberly Clark making the buy here on

797
00:39:13,600 --> 00:39:16,560
Speaker 2: a company that had been severely damaged at least in

798
00:39:16,640 --> 00:39:20,480
Speaker 2: terms of its stock from Washington from RFKA Junior. When

799
00:39:20,480 --> 00:39:23,719
Speaker 2: he made this call on autism being tied somehow to

800
00:39:23,800 --> 00:39:26,400
Speaker 2: tile and all, it does seem like, wow, that's the

801
00:39:26,480 --> 00:39:29,120
Speaker 2: stock was damaged. People were pretty excited about this today,

802
00:39:29,120 --> 00:39:30,920
Speaker 2: and I wonder if the company has put that chapter

803
00:39:30,960 --> 00:39:31,320
Speaker 2: behind it.

804
00:39:31,680 --> 00:39:31,879
Speaker 8: Yeah.

805
00:39:31,920 --> 00:39:34,880
Speaker 13: Absolutely, But it's very interesting though, because of course Kenview

806
00:39:34,920 --> 00:39:37,839
Speaker 13: shares were soaring on the back of this deal, and

807
00:39:38,040 --> 00:39:40,120
Speaker 13: you know, that's something that's very known in the street

808
00:39:40,120 --> 00:39:43,200
Speaker 13: that really needed at fresh injection of capital to keep

809
00:39:43,239 --> 00:39:45,719
Speaker 13: its sales going or to revive its sales. But on

810
00:39:45,760 --> 00:39:49,480
Speaker 13: the flip side, Kimberly Clark shares were actually down earlier

811
00:39:49,719 --> 00:39:51,920
Speaker 13: once we heard of this deal, and that speaks a

812
00:39:51,960 --> 00:39:55,760
Speaker 13: lot to some of those underlying worries, probably being driven

813
00:39:56,040 --> 00:40:00,839
Speaker 13: by just the chatter around this company from Washington, right,

814
00:40:00,880 --> 00:40:04,319
Speaker 13: And you know, there is some consideration, we know from

815
00:40:04,400 --> 00:40:07,239
Speaker 13: Kimberly Clock's perspective, like what are you going to be

816
00:40:07,360 --> 00:40:13,359
Speaker 13: doing about the potential challenges regulatory in others speaking when

817
00:40:13,400 --> 00:40:16,839
Speaker 13: it comes to acquiring an asset like Canview and all

818
00:40:16,960 --> 00:40:20,040
Speaker 13: the controversy surrounding that. But it seems like they were prepared.

819
00:40:20,160 --> 00:40:22,160
Speaker 13: Investors have yet to be convinced of that based on

820
00:40:22,200 --> 00:40:24,920
Speaker 13: the share price declining, but you know, early days, we'll

821
00:40:24,920 --> 00:40:25,680
Speaker 13: see how that plays out.

822
00:40:25,760 --> 00:40:28,000
Speaker 2: Kenvy is a fifteen percent right now, at Clark down

823
00:40:28,040 --> 00:40:31,680
Speaker 2: about thirteen percent. We've got about a minute here, Christine.

824
00:40:31,719 --> 00:40:34,480
Speaker 2: Are you hearing talk on Wall Street about this Supreme

825
00:40:34,520 --> 00:40:36,960
Speaker 2: Court case involving tariffs this week? We're going to have

826
00:40:37,239 --> 00:40:40,400
Speaker 2: opening arguments on Wednesday. If they tell Donald Trump he

827
00:40:40,480 --> 00:40:43,400
Speaker 2: can't do this. We're talking about the potential of a

828
00:40:43,680 --> 00:40:46,440
Speaker 2: huge payback of money. Would that not rock the market?

829
00:40:46,760 --> 00:40:50,080
Speaker 13: Yeah, I mean very interesting. Indeed, it's probably not necessarily

830
00:40:50,120 --> 00:40:52,640
Speaker 13: something that's squarely in the markets radar, just because I

831
00:40:52,640 --> 00:40:54,720
Speaker 13: think there's a little bit of fatigo when it comes

832
00:40:54,760 --> 00:40:58,520
Speaker 13: to the markets trying to price the impact of tariff

833
00:40:58,719 --> 00:41:02,160
Speaker 13: or the lack of impact of terrors, as the case

834
00:41:02,200 --> 00:41:04,520
Speaker 13: may be, you know, And so I think investors are

835
00:41:04,560 --> 00:41:07,839
Speaker 13: really kind of wanting something concrete now at this point, right,

836
00:41:07,880 --> 00:41:10,520
Speaker 13: either in the form of a signed deal or if

837
00:41:10,520 --> 00:41:14,600
Speaker 13: not a signed deal, kind of clear indications that you know,

838
00:41:14,760 --> 00:41:17,680
Speaker 13: terriff and trade deals with various countries between the US

839
00:41:17,719 --> 00:41:21,200
Speaker 13: and various countries are really heading in that concretely positive

840
00:41:21,360 --> 00:41:25,920
Speaker 13: direction or you know, otherwise. And unless we get that,

841
00:41:26,040 --> 00:41:29,200
Speaker 13: really it's hard for investors to kind of price this

842
00:41:29,400 --> 00:41:32,040
Speaker 13: in at this moment unless they have clarity on the

843
00:41:32,719 --> 00:41:33,560
Speaker 13: ultimate impact.

844
00:41:33,680 --> 00:41:36,680
Speaker 2: Call us back when you know, Christina Quino, thank you

845
00:41:36,719 --> 00:41:38,800
Speaker 2: so much. It's great to see you. Thanks for listening

846
00:41:38,800 --> 00:41:42,080
Speaker 2: to the Balance of Power podcast. Make sure to subscribe

847
00:41:42,160 --> 00:41:44,840
Speaker 2: if you haven't already, at Apple, Spotify, or wherever you

848
00:41:44,880 --> 00:41:47,680
Speaker 2: get your podcasts, and you can find us live every

849
00:41:47,680 --> 00:41:51,960
Speaker 2: weekday from Washington, DC at noontime Eastern at Bloomberg dot com.