WEBVTT - Bloomberg Surveillance TV: December 15th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordern. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.880 Terminal and the Bloomberg Business app. 0:00:36.360 --> 0:00:39.839 Stocks trading their record highs once again after Friday's AI pullback, 0:00:40.040 --> 0:00:42.640 Sarah Hunt of Alpine Saxon Woods, writing. 0:00:42.479 --> 0:00:44.159 We think this illustrates a level of. 0:00:44.120 --> 0:00:46.600 Concern from investors that there is too much spending on 0:00:46.640 --> 0:00:49.320 the horizon and not enough cash flow to fund it. 0:00:49.360 --> 0:00:51.680 Sarah joins us now for more, Sarah, wonderful to see you. 0:00:51.720 --> 0:00:52.480 Thank you for being here. 0:00:52.560 --> 0:00:54.240 Good morning. It's great to be here. So is it 0:00:54.360 --> 0:00:55.200 enough fear? 0:00:55.400 --> 0:00:57.800 Is it enough skepticism to make you actually interested in 0:00:57.920 --> 0:00:58.600 AI once again? 0:00:58.720 --> 0:01:00.360 Or does it need to go a little bit further. 0:01:00.720 --> 0:01:02.880 Well, it certainly seemed like enough last week. I mean 0:01:02.960 --> 0:01:04.839 there were some big moves last week, and I don't 0:01:04.840 --> 0:01:07.560 think the market. I mean, you look at Broadcom's earnings 0:01:07.560 --> 0:01:09.680 and the numbers themselves were very good. It's back to 0:01:09.760 --> 0:01:13.199 the expectations problem and the second derivative problem which Cameron 0:01:13.280 --> 0:01:16.399 just mentioned, which is what happens when you're still spending 0:01:16.400 --> 0:01:18.160 a lot of money, but you're not spending it quite 0:01:18.160 --> 0:01:19.920 as fast as you were. And the more you spend, 0:01:20.080 --> 0:01:23.080 the bigger that the problem of large numbers comes in. 0:01:23.319 --> 0:01:25.440 And can I go ten percent on every ten percent 0:01:25.520 --> 0:01:27.800 or twenty percent every year every year? And I think 0:01:27.880 --> 0:01:29.760 that's an issue. And now people are starting to question 0:01:29.800 --> 0:01:31.600 where is that money coming from? And it wasn't that 0:01:31.720 --> 0:01:34.200 question didn't happen in the beginning. And you've got some 0:01:34.240 --> 0:01:37.520 real issues with companies that used to be cash rich 0:01:37.560 --> 0:01:39.560 now getting more sset heavy. And I think that that's 0:01:39.600 --> 0:01:43.120 a little bit an absorption issue for investors right now. 0:01:43.200 --> 0:01:44.920 But have we gone a little too far with this 0:01:45.160 --> 0:01:48.400 with the idea that Microsoft and Google really are going 0:01:48.440 --> 0:01:50.680 to face some sort of solvency risk or some sort 0:01:50.680 --> 0:01:54.040 of serious existential question because they're borrowing a bit from 0:01:54.040 --> 0:01:55.840 the bond market, right I mean, have we sort of 0:01:55.960 --> 0:01:57.800 thrown the baby out with the bathwater, to use John 0:01:57.840 --> 0:02:02.360 Soulfus's term. Given the fact that people seem skeptical more 0:02:02.400 --> 0:02:06.000 broadly of the promise that they embraced two weeks ago. 0:02:06.080 --> 0:02:08.799 I think that that is just indicative of what we've 0:02:08.800 --> 0:02:10.720 been living with for the last several years. Out of 0:02:10.760 --> 0:02:14.040 the pandemic, which is narrative ships every day, and yes, 0:02:14.120 --> 0:02:16.840 the pessimism gets wildly bad, and then it gets wildly 0:02:16.880 --> 0:02:19.280 fantastic again. And this is why I wouldn't say that 0:02:19.320 --> 0:02:21.600 this is a moment where you have to go, oh 0:02:21.680 --> 0:02:23.560 my goodness, we have to change everything, but you have 0:02:23.600 --> 0:02:25.760 to think about what who else might benefit and how 0:02:25.800 --> 0:02:27.760 that's going to go. And I actually think that even 0:02:27.800 --> 0:02:29.840 the story about the CDs for Oracle, I think that's 0:02:29.880 --> 0:02:31.960 much more about hedging the stock than it is about 0:02:31.960 --> 0:02:34.000 actually thinking that Oracle's not going to pay its spons 0:02:34.040 --> 0:02:35.680 back in the end. So I think a lot of 0:02:35.720 --> 0:02:39.320 this is the mechanics of how that spend is going 0:02:39.360 --> 0:02:41.200 to come about. And I don't think it's a really 0:02:41.320 --> 0:02:42.960 challenging the fact that money's going to get spent. 0:02:43.040 --> 0:02:45.040 I want to say that group think is great, but 0:02:45.040 --> 0:02:46.240 I want to pick up on what you just said there, 0:02:46.280 --> 0:02:49.240 which is we have all of these narrative shifts, doling narratives. 0:02:49.280 --> 0:02:51.360 What does that say to you just about conviction investors, 0:02:51.400 --> 0:02:54.840 conviction in this not not just this trade, but in 0:02:54.880 --> 0:02:55.760 the prospect's. 0:02:55.440 --> 0:02:58.400 FAYI generally it is difficult to have because it's hard. 0:02:58.480 --> 0:03:00.800 I mean, it's the conviction that is going to be 0:03:00.840 --> 0:03:02.920 a big thing. It's going to make a lot of changes. 0:03:02.960 --> 0:03:05.560 I think hasn't changed. What those changes are going to be, 0:03:05.600 --> 0:03:07.799 who is going to benefit from those changes, and how 0:03:07.840 --> 0:03:09.800 fast they're going to be implemented seems to be a 0:03:09.800 --> 0:03:11.400 big part of the current concern. 0:03:11.680 --> 0:03:13.040 It was easier to say at the. 0:03:12.960 --> 0:03:15.000 Beginning of the year, we see a ton of expending 0:03:15.040 --> 0:03:16.880 on infrastructure. There's still going to be a ton of 0:03:16.880 --> 0:03:19.800 spending on infrastructure. But now that that's getting questioned, is 0:03:19.800 --> 0:03:22.240 that the peak of infrastructure spend discussion? Now do we 0:03:22.280 --> 0:03:24.360 have to look at use cases and who's using it 0:03:24.400 --> 0:03:25.800 and how they're using it, and is this going to 0:03:25.800 --> 0:03:27.960 improve margins? Because in the end, that's what it all 0:03:28.000 --> 0:03:30.400 comes down to. Is it going to make people more money? 0:03:30.520 --> 0:03:32.400 Because if it isn't, then it isn't going to raise earnings. 0:03:32.480 --> 0:03:34.040 Then it's less exciting than if it is going to 0:03:34.120 --> 0:03:34.440 raise earn. 0:03:34.480 --> 0:03:37.160 No, it's December. I'm in retrospective mood. Perhaps you are 0:03:37.200 --> 0:03:39.160 as well. You mentioned that question wasn't being asked at 0:03:39.160 --> 0:03:40.560 the beginning, which was hou is all this going to 0:03:40.600 --> 0:03:42.240 be paid for? It's going to be cash? Is it 0:03:42.240 --> 0:03:43.880 going to be dead? What do you make of that 0:03:43.920 --> 0:03:46.240 in hindsight now, the fact that people weren't wrestling with 0:03:46.240 --> 0:03:47.640 those questions to begin with. 0:03:48.360 --> 0:03:52.200 I think with every big investing enthusiasm, there is a 0:03:52.880 --> 0:03:56.120 willingness to suspend belief about whether or not and how 0:03:56.120 --> 0:03:58.000 things have to happen to get to the point where 0:03:58.000 --> 0:04:00.480 everyone's excited about And I think that it doesn't mean 0:04:00.480 --> 0:04:03.360 that we won't suspend that disbelief again. Right, So, there's 0:04:03.400 --> 0:04:05.520 going to be some technological changes. I don't see how 0:04:05.560 --> 0:04:07.720 you get the molecules and the electrons to as many 0:04:07.800 --> 0:04:09.800 data centers as we have, so I think that there 0:04:09.840 --> 0:04:12.480 will be changes, and those changes are going to occur 0:04:12.600 --> 0:04:15.240 in ways that are right now difficult to parse, so 0:04:15.280 --> 0:04:16.719 you don't know who's going to win and who's going 0:04:16.760 --> 0:04:17.080 to lose. 0:04:17.080 --> 0:04:17.320 There. 0:04:17.480 --> 0:04:19.840 I think it was very clear at the infrastructure beginning 0:04:19.880 --> 0:04:21.760 who is the winners, and now it's like, Okay, who's 0:04:21.760 --> 0:04:24.280 going to win now? And are the winners really over 0:04:24.480 --> 0:04:26.040 or is that just something that isn't going to grow as. 0:04:25.960 --> 0:04:27.800 Found you get the conversation of the weekend was you 0:04:27.839 --> 0:04:31.120 almost need bubbles to fuel technological advancement. I mean, I 0:04:31.120 --> 0:04:33.120 know that that sounds really strange and perverse, but there 0:04:33.160 --> 0:04:35.719 is a sort of element of you need thatcham to 0:04:35.760 --> 0:04:39.160 finance absolutely everything. Is there sort of this feeling that 0:04:39.200 --> 0:04:41.960 you need to see the broadening out in the trade, 0:04:42.000 --> 0:04:45.200 the idea that other companies benefit from AI to keep 0:04:45.200 --> 0:04:47.680 the am machine chugging, right, that in order for people 0:04:47.760 --> 0:04:50.600 to justify valuations where they are in the big tech giants, 0:04:50.920 --> 0:04:53.600 you need to see participation on a broader scale. 0:04:53.720 --> 0:04:56.120 I think you absolutely need to see that participation. And 0:04:56.160 --> 0:04:58.640 I think that that was a question even earlier in 0:04:58.640 --> 0:05:00.480 this year, in the beginning at the end of last year, 0:05:00.480 --> 0:05:02.320 which was who's going to use this? And then Walmart 0:05:02.360 --> 0:05:03.640 came out and said a few things about how it 0:05:03.680 --> 0:05:06.760 was helpful for margins, and other companies came out and said, yes, 0:05:06.800 --> 0:05:07.960 we can use it this way and it's going to 0:05:08.000 --> 0:05:10.360 be and that sort of solved the short term problem, 0:05:10.400 --> 0:05:12.680 but longer term that has to broaden out, and that 0:05:12.720 --> 0:05:15.080 has to be This is also the question about small caps. 0:05:15.080 --> 0:05:18.000 Can they use this to make some margin improvements because 0:05:18.160 --> 0:05:20.680 the small cap earnings revolution was supposed to happen two 0:05:20.760 --> 0:05:22.360 years ago and then last year and then this year, 0:05:22.480 --> 0:05:22.960 and is that. 0:05:22.920 --> 0:05:23.800 Really going to come through? 0:05:23.800 --> 0:05:25.880 And I think all of those things are very important 0:05:26.000 --> 0:05:28.760 as we go forward, and where valuations are right now, 0:05:28.880 --> 0:05:29.880 it's even more important. 0:05:29.920 --> 0:05:32.120 This is where the economy starts to matter again. This 0:05:32.160 --> 0:05:33.760 is where, all of a sudden, when we were talking 0:05:33.760 --> 0:05:35.880 about how anything related to AI could be at its 0:05:35.920 --> 0:05:38.640 own universe and the economy could keep sort of dragging 0:05:38.640 --> 0:05:40.720 along and basically being in a recession if it weren't 0:05:40.760 --> 0:05:42.839 for that AI investment. At what point can you see 0:05:42.839 --> 0:05:46.560 this expansion, this broadening out unless you see economic data 0:05:46.560 --> 0:05:48.040 like what we're going to be getting this week really 0:05:48.080 --> 0:05:48.520 pick up. 0:05:49.520 --> 0:05:52.080 It's interesting because I think that the government shutdown has 0:05:52.120 --> 0:05:55.600 not only made the data that's current difficult to see 0:05:55.640 --> 0:05:58.320 what happened just recently, but it also may have shifted 0:05:58.320 --> 0:05:59.520 some activity into next year. 0:05:59.640 --> 0:06:02.280 So it's going to be interesting to see that. 0:06:02.360 --> 0:06:04.440 You do have to see an economy that keeps jogging 0:06:04.520 --> 0:06:06.800 along if it doesn't, you're going to have a problem. 0:06:06.800 --> 0:06:08.640 There's no question that that's going to be an issue. 0:06:08.720 --> 0:06:11.200 That's an issue for earnings, earnings lead evaluations, and that's 0:06:11.200 --> 0:06:13.159 the circle that investors are looking at. 0:06:13.520 --> 0:06:16.200 Speaking of circles, let's talk about circular investment and your 0:06:16.279 --> 0:06:17.760 sort of thoughts on that right now. I mean, we 0:06:17.760 --> 0:06:19.839 can't have this conversation about it, i AI without going 0:06:19.880 --> 0:06:21.960 back to that. And I'm curious how worriesome that is 0:06:22.320 --> 0:06:24.440 to you. Have you been sufficient have your worries been 0:06:24.480 --> 0:06:27.600 significantly or sufficiently assuaged by these companies saying that it's 0:06:27.640 --> 0:06:28.200 not a big deal. 0:06:28.560 --> 0:06:30.400 I'm not sure that I can say one way or 0:06:30.440 --> 0:06:32.440 the other it's definitely not a big deal or it's 0:06:32.480 --> 0:06:34.640 a huge big deal. I know that in two thousand 0:06:34.640 --> 0:06:36.440 there were a lot of issues with vendor financing. It 0:06:36.480 --> 0:06:38.200 was quite simple, right that companies were selling. 0:06:38.000 --> 0:06:40.920 Stuff that we say circular deals and vendor financing are 0:06:40.920 --> 0:06:41.360 the same thing. 0:06:41.440 --> 0:06:44.120 I don't think that you can because I think that 0:06:44.200 --> 0:06:47.600 there are some some of the players in that circle 0:06:47.680 --> 0:06:50.159 have much more cash than they did before. So last 0:06:50.160 --> 0:06:52.960 time it was vendors financing who didn't have the cash 0:06:52.960 --> 0:06:54.839 to companies who didn't have the cash. Now, there is 0:06:54.920 --> 0:06:56.679 cash in the mix, and there's quite a bit of cash. 0:06:56.839 --> 0:06:58.599 And that's where you're seeing the have and have nots 0:06:58.600 --> 0:07:00.760 on the tech side of who's as rich and who's 0:07:00.800 --> 0:07:03.400 not and who are people concerned about whether or not 0:07:03.400 --> 0:07:05.279 they're going to raise money or not. Again, I don't 0:07:05.279 --> 0:07:08.159 think the Oracle anyone's concerned that it's going to go bankrupt. 0:07:08.200 --> 0:07:11.200 But I think that there are concerns about overburdening balance 0:07:11.240 --> 0:07:12.080 sheets right now. 0:07:12.760 --> 0:07:14.320 Lisa brought us to the economy, let me go back 0:07:14.320 --> 0:07:15.440 to that sort of to pull us away from that. 0:07:15.440 --> 0:07:17.320 They're just remote. But I'm curious, how do you think 0:07:17.360 --> 0:07:19.840 about growth in the year ahead. Are you, to borrow 0:07:19.840 --> 0:07:22.160 a phrase from competers, you're saying not saying when about it? 0:07:22.440 --> 0:07:24.800 Or are you feeling like prospects are good, things are 0:07:24.800 --> 0:07:25.560 going in the right direction. 0:07:25.880 --> 0:07:28.240 I think it's tough because the K shaped economy is 0:07:28.280 --> 0:07:30.160 a real thing that people who are spending the most 0:07:30.160 --> 0:07:31.760 money are the people who have the most money. The 0:07:31.760 --> 0:07:33.920 lower end consumer is not doing well. A lot of 0:07:33.920 --> 0:07:36.160 the companies that track that are not doing well, and 0:07:36.240 --> 0:07:38.800 I think it's going to be that's really a question. Now, 0:07:39.000 --> 0:07:41.520 how much have we owed overstated jobs. Right, So in 0:07:41.600 --> 0:07:44.600 Poll's conference he talked about some of those overstatements and 0:07:44.600 --> 0:07:47.280 maybe instead of generating jobs, we're losing jobs every month. 0:07:47.600 --> 0:07:50.360 How much is that really occurring? What can we see 0:07:50.640 --> 0:07:52.680 and what do wages look like? Because all of those 0:07:52.680 --> 0:07:55.440 things matter. It's great that the high end can spend, 0:07:55.680 --> 0:07:57.600 but you really need for the full economy to chug 0:07:57.640 --> 0:08:00.119 a long you need broader participation. 0:08:00.000 --> 0:08:01.720 Which is the reason why everyone's watching and hoping for 0:08:01.760 --> 0:08:04.720 this broader participation in the equity space. Sarah Hunt of 0:08:04.760 --> 0:08:07.160 Alpine Saxon Woods is with us for the hour. 0:08:07.040 --> 0:08:10.640 And stay with us. Mult Blomberg Surveillance coming up off 0:08:10.640 --> 0:08:10.840 to this. 0:08:20.000 --> 0:08:22.520 Here's the latest President Trump telling the Wall Street Journal 0:08:22.640 --> 0:08:25.720 he's unsure his economic policies will lead to midterm wins. 0:08:25.920 --> 0:08:28.720 An NBC News poll showing the president's approval rating down 0:08:28.760 --> 0:08:32.320 to forty two percent. Is economic concerns way on Americans. 0:08:32.440 --> 0:08:35.680 Henrietta Treys of Veta Partners joins us now for more. Henriette, 0:08:35.840 --> 0:08:38.199 how do you sort of view this interview in the 0:08:38.240 --> 0:08:40.559 Wall Street Journal, in particular with President Trump, where he's 0:08:40.559 --> 0:08:43.840 saying that people just haven't felt the ramifications or the 0:08:43.880 --> 0:08:47.880 benefits from some of his policies. Will that actually make 0:08:47.920 --> 0:08:49.840 any headway early twenty twenty six. 0:08:50.600 --> 0:08:51.880 Yeah, that's absolutely true. 0:08:52.000 --> 0:08:56.480 The one big beautiful bill went into effect immediately for corporations. Indeed, 0:08:56.480 --> 0:08:59.400 we've seen that corporate tax revenue has dropped by about 0:08:59.440 --> 0:09:01.720 a third into federal coffers this year. 0:09:01.960 --> 0:09:02.680 That's because of. 0:09:02.679 --> 0:09:05.319 The tax preferences that went out very quickly after they 0:09:05.320 --> 0:09:08.120 passed that bill on the corporate side. But the individual 0:09:08.160 --> 0:09:10.280 side is back end loaded and starts in the new 0:09:10.360 --> 0:09:13.200 year when the tax filing season starts. So when you 0:09:13.280 --> 0:09:16.440 think about the odds of a reconciliation bill two point 0:09:16.520 --> 0:09:19.280 zero for example, or the two thousand dollars tire freebate 0:09:19.400 --> 0:09:22.679 checks for example, that requires another Act of Congress. And 0:09:22.960 --> 0:09:24.960 as far as the White House is thinking about it, 0:09:25.200 --> 0:09:27.400 and indeed, when I talk to Republican staff on the 0:09:27.400 --> 0:09:29.840 House and Senate side, they're saying, you know, we already 0:09:29.840 --> 0:09:32.800 did the individual tax cuts, you just haven't seen them yet. 0:09:33.200 --> 0:09:35.200 So when Kevin has it comes out and says twenty 0:09:35.240 --> 0:09:36.840 twenty six is going to be a boon year for 0:09:37.080 --> 0:09:40.720 the consumer and individuals, it's because the tax preferences that 0:09:40.800 --> 0:09:42.800 hit the individual side of the docket. 0:09:42.600 --> 0:09:44.000 Really start in the new year. 0:09:44.120 --> 0:09:46.840 So if you are really looking forward to the salt 0:09:46.880 --> 0:09:50.240 deduction that's coming for you, there's a really small segment 0:09:50.280 --> 0:09:52.600 of the economy that's on the no taxes on tips, 0:09:52.640 --> 0:09:55.040 no taxes on overtime piece that all starts in the 0:09:55.080 --> 0:09:56.880 new year, and they're hoping that that's going to be 0:09:57.000 --> 0:10:00.800 enough to overcome the continued hit of tariffs, the continued 0:10:00.840 --> 0:10:04.920 negative narrative around affordability and the high cost of living, housing, 0:10:05.040 --> 0:10:07.160 healthcare going up by one thousand dollars, etc. 0:10:08.040 --> 0:10:11.079 We'll see, henriettas you talked to staffers on the hill, 0:10:11.080 --> 0:10:13.560 I'm curious what they want this president to be doing. 0:10:13.600 --> 0:10:16.640 So you lay out very clearly sort of the benefits 0:10:16.640 --> 0:10:19.120 that will be very evident imagined to the American public 0:10:19.160 --> 0:10:21.719 here come in the new year. What do they make 0:10:21.760 --> 0:10:24.080 of his emphasis on immigration, on foreign policy, him not 0:10:24.160 --> 0:10:26.880 talking about affordability. What would they like him to be 0:10:26.920 --> 0:10:29.200 doing more, and what's the reaction to him not doing 0:10:29.200 --> 0:10:30.200 more on that front. 0:10:30.880 --> 0:10:34.000 It's a real mixed bag with the same answer. Get 0:10:34.120 --> 0:10:37.920 President Trump on the campaign trail, and for Republicans, they 0:10:37.960 --> 0:10:40.439 really want to see that because the majority of the 0:10:40.840 --> 0:10:43.320 new voter turnout of the last decade of sort of 0:10:43.320 --> 0:10:46.000 the magabase. They're here for President Trump, They're not here 0:10:46.040 --> 0:10:48.280 for your average run on the mill, rank and file Republican. 0:10:48.600 --> 0:10:51.280 So those members really want President Trump to come to 0:10:51.320 --> 0:10:53.560 their district, come on the campaign trail. You know, they 0:10:53.600 --> 0:10:55.840 would have liked to see him more in Tennessee, for example, 0:10:55.880 --> 0:10:58.480 a couple of weeks ago to boost the numbers, because 0:10:58.480 --> 0:11:01.200 he is a turnout generating machine, and there's a lot 0:11:01.240 --> 0:11:03.520 of anxiety on the Republican side about going into a 0:11:03.559 --> 0:11:06.800 midterm election cycle where the president himself, who is highly 0:11:06.840 --> 0:11:09.800 popular with the Republican base and MAGA voters, is not 0:11:09.960 --> 0:11:12.360 on the docket. Those voters tend to not show up 0:11:12.360 --> 0:11:14.360 in a midterm, which is why you saw such as 0:11:14.360 --> 0:11:16.359 shell lacking for the Republican Conference. 0:11:16.000 --> 0:11:16.760 In twenty eighteen. 0:11:17.040 --> 0:11:18.560 They don't want to see a repeat of that, So 0:11:18.600 --> 0:11:20.600 they really want Trump to get on the cam Hayne trail, 0:11:20.800 --> 0:11:24.160 come rally their voters, and get the turnout machine. Unfortunately, 0:11:24.200 --> 0:11:27.480 that's what Democrats also want, because they know that Republican 0:11:27.520 --> 0:11:29.200 voters that are still the court of a President Trump 0:11:29.240 --> 0:11:31.880 are more likely to stay home. And the majority of 0:11:31.920 --> 0:11:35.320 Americans now have a negative view of the Republican Party's 0:11:35.360 --> 0:11:39.520 handling of the state of the economy, inflation, prices, housing, 0:11:39.800 --> 0:11:42.440 and healthcare, and those are the top five issues of 0:11:42.600 --> 0:11:46.800 voters going into the midterm cycle. So Democrats similarly want 0:11:46.840 --> 0:11:47.839 President Trump to be. 0:11:47.840 --> 0:11:48.720 Front and center. 0:11:48.960 --> 0:11:53.280 So it's really a tough road to hoe for the 0:11:53.320 --> 0:11:56.160 Republican conference and for President Trump in particular. He's got 0:11:56.200 --> 0:11:58.560 to get out there. He's got to talk about affordability. 0:11:58.640 --> 0:12:00.760 But the more he talks about it, the more health Democrats. 0:12:00.760 --> 0:12:02.200 So it's sort of a catch twenty two. 0:12:03.240 --> 0:12:06.560 Good morning, Henrietta. So what of all those things. 0:12:06.320 --> 0:12:08.120 That you mentioned, it seems to me that one of 0:12:08.160 --> 0:12:10.240 the most important things to try to nail down right 0:12:10.240 --> 0:12:13.200 now is healthcare because you can't really change a rise 0:12:13.240 --> 0:12:14.040 in price levels. 0:12:14.280 --> 0:12:16.000 Whenever you do about further. 0:12:15.760 --> 0:12:18.600 Height doesn't matter as much as changing what's going to 0:12:18.640 --> 0:12:20.640 happen now with those subsidies. And this is a train 0:12:20.679 --> 0:12:22.679 wreck that's been coming and pushed off and pushed off 0:12:22.679 --> 0:12:25.120 and pushed off. Is there any do you think that 0:12:25.160 --> 0:12:27.640 they can get something done in a timeframe that's going 0:12:27.679 --> 0:12:29.960 to be meaningful? And do you think that there's enough 0:12:29.960 --> 0:12:32.920 bipartisan anything, because everybody is going to be affected by this. 0:12:33.200 --> 0:12:34.679 How does that look in your opinion? 0:12:35.679 --> 0:12:39.880 Yeah, I'm not shy about making projections. There's no chance 0:12:39.920 --> 0:12:42.040 that they fix Obamacare before the end of the year, 0:12:42.120 --> 0:12:45.120 so we're going off the cliff. To put it into perspective, 0:12:45.160 --> 0:12:47.000 that's twenty two million people that are going to be hit. 0:12:47.080 --> 0:12:48.840 Four million people will lose their insurance. 0:12:49.040 --> 0:12:51.240 If you're sixty years and older, your premiums are going 0:12:51.320 --> 0:12:53.520 up by almost one thousand dollars in the new year. 0:12:53.640 --> 0:12:54.600 That's going to happen. 0:12:55.040 --> 0:12:58.920 There is this period of time between January fifth and 0:12:59.000 --> 0:13:01.440 January thirtieth where they could find a solution. 0:13:01.920 --> 0:13:03.600 Our odds are pretty slim, my colleagues. 0:13:03.600 --> 0:13:06.040 Spenser Proman is our healthcare expert, and he's now down 0:13:06.080 --> 0:13:09.200 to twenty five percent that we get any two year, 0:13:09.320 --> 0:13:11.160 one year extension. 0:13:10.720 --> 0:13:12.079 Of the ACA subsidies. 0:13:12.360 --> 0:13:14.439 And you can hear it from Republicans in the United 0:13:14.440 --> 0:13:16.880 States Senate who saw this train wreck coming, as you 0:13:16.960 --> 0:13:17.760 rightly point. 0:13:17.559 --> 0:13:21.280 Out, and consider this a subsidy that needs to expire. 0:13:21.640 --> 0:13:24.080 We have a thirty eight trillion dollar debt load in 0:13:24.120 --> 0:13:27.080 the United States. Let's cut this and make sure that 0:13:27.160 --> 0:13:31.600 it is not extended. Unfortunately, when American consumers look at 0:13:31.640 --> 0:13:33.720 Republicans speak to the healthcare issue. 0:13:33.800 --> 0:13:36.880 We're now on y're sixteen of not having an alternative 0:13:36.920 --> 0:13:40.000 to Obamacare, so that leads to an erosion of trust. 0:13:39.800 --> 0:13:43.559 Within voters of Democrats and Republicans alike around the entire 0:13:43.679 --> 0:13:47.560 concept of healthcare. For the Republican conference, i'mer speaker Bayner 0:13:47.600 --> 0:13:50.560 had the best quote the other day. He basically said, 0:13:50.559 --> 0:13:53.600 I've been in all these meetings with Republicans for decade now, 0:13:53.800 --> 0:13:55.800 and we've never all been on the same page. And 0:13:55.840 --> 0:13:57.679 so as long as that's the case, you're not going 0:13:57.720 --> 0:13:59.480 to see a fix, then we'll go into the year 0:13:59.520 --> 0:13:59.920 with that one. 0:14:00.520 --> 0:14:04.079 Stay with us. Mulblomberg surveillance coming up after. 0:14:03.880 --> 0:14:15.679 This, Poojaree Room of Barclays writing we expect a non 0:14:15.679 --> 0:14:19.320 farm payroll and employment flat in October and up fifty k. 0:14:19.720 --> 0:14:22.120 In November, providing further evidence. 0:14:21.720 --> 0:14:24.800 That the labor market is not is slowing but not breaking. 0:14:24.840 --> 0:14:27.560 Poo just realm of Barclays joining us now, Pooja, great 0:14:27.560 --> 0:14:29.440 to see you, Thank you so much for being with USKS. 0:14:29.680 --> 0:14:33.160 So just looking at slowing but not breaking. What's the 0:14:33.240 --> 0:14:36.280 difference between the two. How narrow is the gap between 0:14:36.320 --> 0:14:38.400 slow and before and between broken. 0:14:38.720 --> 0:14:40.080 Yeah, I think that's a great question. 0:14:41.480 --> 0:14:44.480 I think we're getting close to the point where people, 0:14:45.200 --> 0:14:49.000 ourselves included, are seeing risks clearly to the downside. But 0:14:49.120 --> 0:14:51.400 in terms of breaking that is a world where you 0:14:51.440 --> 0:14:55.520 expect labor markets slack to shoot up, you know, pick 0:14:55.600 --> 0:14:58.440 up very rapidly, and that's not something we're seeing either 0:14:58.560 --> 0:15:01.840 in the official day or in some of the other statistics, 0:15:01.880 --> 0:15:04.400 like you know, think about job openings and the separations 0:15:04.480 --> 0:15:08.280 rate there or jobless claims data. So it is a 0:15:08.360 --> 0:15:11.200 labor market which for a while now has been stuck. 0:15:11.640 --> 0:15:14.160 You know, we're not hiring, but we're not firing as much, 0:15:14.280 --> 0:15:17.800 so there's very little dynamason risks, sure of the downside, 0:15:18.080 --> 0:15:19.480 but we still think we're. 0:15:19.240 --> 0:15:21.480 Not at that point where we're ready to fall off 0:15:21.480 --> 0:15:21.920 the cliff. 0:15:22.120 --> 0:15:24.640 Well, I guess I'm wondering if we're at an inflection 0:15:24.720 --> 0:15:27.360 point of sorts, or maybe we've been grinding along. We 0:15:27.400 --> 0:15:30.080 could be heading toward an inflection point. Why wouldn't it 0:15:30.080 --> 0:15:32.600 be to the upside, Because we have seen smaller businesses 0:15:32.680 --> 0:15:35.200 really pull back and hiring. The hiring has been concentrated 0:15:35.240 --> 0:15:38.960 in the larger companies. If they get some stimulus if 0:15:39.000 --> 0:15:41.360 there is these rate cuts that kind of start percolating 0:15:41.360 --> 0:15:43.800 through the economy, why wouldn't we see a pickup in 0:15:43.880 --> 0:15:45.920 hiring rather than sort of the other way around. 0:15:46.080 --> 0:15:48.400 That's a great question, and I think that's a very 0:15:48.440 --> 0:15:51.320 feasible scenario to keep in mind, just given you know, 0:15:51.840 --> 0:15:55.440 we are quite constructive about growth into twenty twenty six. 0:15:55.760 --> 0:15:58.560 We're seeing a lot of positive impulses that could keep 0:15:58.600 --> 0:16:01.640 the economy highly support and in that world, yes, you 0:16:01.680 --> 0:16:04.520 could have a labor market that actually stabilizes. In fact, 0:16:04.520 --> 0:16:08.520 our own forecast, official forecast has the labor market looking 0:16:08.600 --> 0:16:11.160 quite resilient in twenty twenty six, and we have the 0:16:11.240 --> 0:16:14.600 unemployment rate coming down. So I think we really subscribe 0:16:14.600 --> 0:16:18.120 to that view that there is a world where the 0:16:18.160 --> 0:16:22.040 labor market stabilizes and eventually starts to look better. But 0:16:22.280 --> 0:16:25.640 given where we are now, I think it's reasonable to 0:16:25.760 --> 0:16:28.400 also see that risks could very well be to the downside. 0:16:28.440 --> 0:16:31.240 It would take very little to push the labor market 0:16:31.240 --> 0:16:32.120 in the opposite direction. 0:16:32.240 --> 0:16:34.200 I'm curious how you think about the legacy of what 0:16:34.240 --> 0:16:36.320 we have been through here with this government shut down, 0:16:36.320 --> 0:16:38.520 the delay of data that we hadn't seen before, and 0:16:38.600 --> 0:16:41.160 all the while there was this conversation about what might 0:16:41.200 --> 0:16:43.400 be a decent substitute for the data that we weren't 0:16:43.400 --> 0:16:45.480 getting from the Labor Department. How could we get as 0:16:45.480 --> 0:16:47.240 good as sense as we could about the state of 0:16:47.240 --> 0:16:50.040 the labor market life not having that data. Now that 0:16:50.040 --> 0:16:53.480 we're beyond it, I'm curious of what we've learned about 0:16:53.520 --> 0:16:55.800 how good a sense we have of the jobs market 0:16:55.840 --> 0:16:57.720