1 00:00:02,960 --> 00:00:06,320 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:06,400 --> 00:00:09,440 Speaker 1: dot com, the radio plus mobilat and on your radio. 3 00:00:09,720 --> 00:00:13,760 Speaker 1: This is a Bloomberg Business flag BOM Bloomberg World Headquarters. 4 00:00:13,800 --> 00:00:17,960 Speaker 1: I'm Charlie Pelotondal the SMP NEZDAC all advancing. This update 5 00:00:18,000 --> 00:00:21,920 Speaker 1: brought to you by Marks Panneth l LP, ranked among 6 00:00:21,960 --> 00:00:25,400 Speaker 1: the top three forensic accounting firms in New York by 7 00:00:25,400 --> 00:00:27,880 Speaker 1: the New York Law Journal for the sixth year in 8 00:00:27,920 --> 00:00:30,800 Speaker 1: a row. VI is that Marks Panneth dot Com. Now 9 00:00:30,960 --> 00:00:34,040 Speaker 1: let's head right over the first Word Breaking news desk 10 00:00:34,120 --> 00:00:38,760 Speaker 1: for today's afternoon call. Here he is Bill Maloney. Good afternoon, Charlie. 11 00:00:38,800 --> 00:00:42,320 Speaker 1: Manual savages are climbing today, with DAL currently up hundred 12 00:00:42,320 --> 00:00:45,920 Speaker 1: and seventeen points. STPs Game ten in NAZAC is higher 13 00:00:45,920 --> 00:00:48,680 Speaker 1: by twenty five, the small cap six hundred games four 14 00:00:48,720 --> 00:00:50,800 Speaker 1: points in the U S ten yield at one point 15 00:00:51,000 --> 00:00:54,000 Speaker 1: five seven per cent night out of tennesse B sectors 16 00:00:54,000 --> 00:00:56,800 Speaker 1: are higher, live by games and Energy, Consumer Discretionary, and 17 00:00:56,920 --> 00:01:01,720 Speaker 1: the industrials only Utilities felt doubt, Transports jump fifty eight 18 00:01:01,760 --> 00:01:04,680 Speaker 1: and as a bi Tex rise thirty one. Utilities fall 19 00:01:04,720 --> 00:01:07,920 Speaker 1: a point, and the Vicks drops two point seven percent 20 00:01:08,400 --> 00:01:11,160 Speaker 1: down leaders to the upside including Nike, Chevron, and Mark, 21 00:01:11,440 --> 00:01:14,840 Speaker 1: while Disney, Walmart and Ge were a little changed. It 22 00:01:15,000 --> 00:01:17,759 Speaker 1: was a huge day for the retailers after Macy Swart 23 00:01:17,800 --> 00:01:21,360 Speaker 1: as much as nineteen percent That's Emotions two thousand and eight, 24 00:01:21,560 --> 00:01:26,000 Speaker 1: while Coles jump seventeen percent after its earnings After about tonight, 25 00:01:26,080 --> 00:01:29,040 Speaker 1: look for earnings from Nordstrom and Navidio Live from the 26 00:01:29,040 --> 00:01:31,640 Speaker 1: first Breaking news desk on Bill Maloney. Charlie, all right, 27 00:01:31,640 --> 00:01:33,600 Speaker 1: we thank you very much, Bill Maloney, and to hear 28 00:01:33,680 --> 00:01:37,240 Speaker 1: live breaking news over your Bloomberg Time Squawk SQ you 29 00:01:37,400 --> 00:01:41,319 Speaker 1: a w K on your terminal. I'm Charlie Pellett, and 30 00:01:41,440 --> 00:01:46,559 Speaker 1: that's a Bloomberg business flash you're listening to Taking Stock 31 00:01:46,680 --> 00:01:51,760 Speaker 1: with Kathleen on Bluebird Radio. The United States is nearly 32 00:01:51,800 --> 00:01:55,960 Speaker 1: twenty trillion dollars in debt now that number has almost 33 00:01:56,000 --> 00:02:00,600 Speaker 1: doubled under President Barack Obama. Republican contend for the White 34 00:02:00,640 --> 00:02:04,760 Speaker 1: House Donald Trump hasn't said anything about the debt that 35 00:02:04,800 --> 00:02:10,320 Speaker 1: has swelled during Obama's administration, and he's also said that 36 00:02:10,360 --> 00:02:14,480 Speaker 1: it is time to borrow and borrow long term is 37 00:02:14,520 --> 00:02:18,359 Speaker 1: for infrastructure projects such as the military, as well as 38 00:02:18,400 --> 00:02:22,280 Speaker 1: rebuilding airports and bridges. Jonathan Nicholson are a Capitol Hill 39 00:02:22,320 --> 00:02:26,120 Speaker 1: budget reporter for Bloomberg b N, a wholly owned subsidiary 40 00:02:26,120 --> 00:02:29,040 Speaker 1: of Bloomberg, the leading source of legal, regulatory and business 41 00:02:29,080 --> 00:02:33,519 Speaker 1: information for professionals. Joins us now, Jonathan, tell us your 42 00:02:33,560 --> 00:02:38,200 Speaker 1: thoughts on this idea of borrowing big and borrowing long 43 00:02:38,320 --> 00:02:43,440 Speaker 1: term as espoused by the Republican contender Donald Trump. Well, 44 00:02:43,600 --> 00:02:48,079 Speaker 1: it's it's. Uh, there's kind of two things here at play. Um, 45 00:02:48,800 --> 00:02:51,519 Speaker 1: one of which is probably arguably more of a Trumpian 46 00:02:51,639 --> 00:02:53,200 Speaker 1: kind of thing, and the other which actually has some 47 00:02:53,280 --> 00:02:57,799 Speaker 1: bipartisan support to it. Um. On the bipartisan side, there 48 00:02:57,800 --> 00:03:01,160 Speaker 1: actually is some thought running from some economists that as 49 00:03:01,160 --> 00:03:03,280 Speaker 1: long as long term, as long as long term rates 50 00:03:03,280 --> 00:03:07,200 Speaker 1: are gonna be low, um, why shouldn't the US borrow 51 00:03:07,480 --> 00:03:11,720 Speaker 1: um to to make needed investments? Um. Some some economists 52 00:03:11,840 --> 00:03:14,240 Speaker 1: has said that it's likely we're gonna have low rates 53 00:03:14,280 --> 00:03:17,440 Speaker 1: for for a long time. Uh, so why not go 54 00:03:17,480 --> 00:03:19,519 Speaker 1: ahead and trying to fix the fix the hole in 55 00:03:19,560 --> 00:03:22,440 Speaker 1: the roof while the fixing is cheap, John, listen to me. 56 00:03:22,480 --> 00:03:26,240 Speaker 1: Is is a very important question because the Obama administration 57 00:03:26,320 --> 00:03:29,160 Speaker 1: several years ago in the financial crisis, decided that they 58 00:03:29,160 --> 00:03:31,320 Speaker 1: thought it was necessary to have aquidity and issue a 59 00:03:31,320 --> 00:03:33,840 Speaker 1: lot of short term a lot of treasury bills. They 60 00:03:33,960 --> 00:03:38,440 Speaker 1: really shifted the duration and where the government is selling 61 00:03:38,680 --> 00:03:41,960 Speaker 1: its its bills and notes and bonds. But when you 62 00:03:42,040 --> 00:03:44,920 Speaker 1: have thirty year paper at two and a half percent, 63 00:03:45,280 --> 00:03:47,200 Speaker 1: when you have ten year paper at one and a 64 00:03:47,240 --> 00:03:49,760 Speaker 1: half percent, that would be like saying, Gee, I'm not 65 00:03:49,800 --> 00:03:53,160 Speaker 1: gonna buy a house and take advantage of a very 66 00:03:53,240 --> 00:03:55,360 Speaker 1: low mortgage race. I think a lot of people have 67 00:03:55,440 --> 00:03:58,680 Speaker 1: scratched their heads and say, why does the Treasury not 68 00:03:58,800 --> 00:04:01,840 Speaker 1: look at this and ship and and that's that's what 69 00:04:02,160 --> 00:04:05,000 Speaker 1: That's what Trump and his adviser David Maul passed yesterday 70 00:04:05,040 --> 00:04:08,320 Speaker 1: on Cspanders start talking about, um, why not lock in 71 00:04:08,560 --> 00:04:12,480 Speaker 1: those those those low rates UM. Historically that is kind 72 00:04:12,480 --> 00:04:16,680 Speaker 1: of not the way the Treasury has approached debt management UM, 73 00:04:16,760 --> 00:04:21,559 Speaker 1: even going back under both the George W. Bush UH 74 00:04:22,560 --> 00:04:25,839 Speaker 1: Reuben in the Clinton administration and UH and the Treasury 75 00:04:25,839 --> 00:04:30,240 Speaker 1: secretaries under Obama. They're thinking is that you need to 76 00:04:30,279 --> 00:04:35,120 Speaker 1: have They're often phrase thing is regular and predictable debt issues. 77 00:04:35,520 --> 00:04:37,719 Speaker 1: But as long as the markets know that there always 78 00:04:37,720 --> 00:04:40,440 Speaker 1: be some supply of treasury debt and that it will change, 79 00:04:40,480 --> 00:04:44,440 Speaker 1: but it will change in relatively predictable ways. UM. That 80 00:04:44,240 --> 00:04:49,279 Speaker 1: that will keep overall borrowing costs down by being regular 81 00:04:49,320 --> 00:04:53,120 Speaker 1: and predictable rather than fearing, rather than have market participants 82 00:04:53,120 --> 00:04:55,160 Speaker 1: worry that the Treasury is trying to time the market 83 00:04:55,440 --> 00:04:57,960 Speaker 1: by issuing more debt, you know, or longer term debt 84 00:04:58,000 --> 00:05:00,560 Speaker 1: when rates are low, and less when those conditions reverse. 85 00:05:00,960 --> 00:05:02,640 Speaker 1: So that's sort of the thinking there, and it's been 86 00:05:02,800 --> 00:05:05,680 Speaker 1: ingrained for for quite a long time. Actually, does that 87 00:05:05,800 --> 00:05:10,920 Speaker 1: thinking makes sense? Um I there's probably someone who can 88 00:05:10,960 --> 00:05:14,960 Speaker 1: do the math um on that UM and say what 89 00:05:15,120 --> 00:05:18,400 Speaker 1: the premium is that they're trying to avoid by by 90 00:05:18,440 --> 00:05:22,400 Speaker 1: not doing this. Um. I think that it's not like 91 00:05:22,400 --> 00:05:25,200 Speaker 1: they don't make any adjustments. Is in my story today 92 00:05:25,240 --> 00:05:29,120 Speaker 1: that they're the the weighted average maturity basically the UH 93 00:05:30,080 --> 00:05:32,240 Speaker 1: the maturities of the debt, of the debt weighted for 94 00:05:32,279 --> 00:05:34,440 Speaker 1: how much is outstanding in each you know, bills, bonds, 95 00:05:34,440 --> 00:05:37,720 Speaker 1: and notes UM has increased over the last couple of years. 96 00:05:38,080 --> 00:05:40,480 Speaker 1: It's up to about seventy months now, UM, so a 97 00:05:40,520 --> 00:05:42,359 Speaker 1: little bit more than about you know, five years and 98 00:05:42,360 --> 00:05:45,960 Speaker 1: ten months UM, where is the whereas the historical average 99 00:05:46,000 --> 00:05:48,320 Speaker 1: for the last thirty or forty years is like fifty 100 00:05:48,400 --> 00:05:50,800 Speaker 1: nine months. So it has crept up a little bit, 101 00:05:50,839 --> 00:05:54,240 Speaker 1: but is by no means, you know, anywhere anywhere near 102 00:05:54,279 --> 00:05:56,000 Speaker 1: what what what sounds like they're trying to talk about 103 00:05:56,040 --> 00:05:58,480 Speaker 1: with the Trump with the Trump people. Well, Jonathan is 104 00:05:58,520 --> 00:06:01,160 Speaker 1: part of a team. I know you also follow taxes 105 00:06:01,320 --> 00:06:04,599 Speaker 1: in the budget. Do you have any even the thumbnail 106 00:06:05,000 --> 00:06:08,320 Speaker 1: figure right or since so report reporting on this, how 107 00:06:08,400 --> 00:06:11,440 Speaker 1: much difference it would make if suddenly the Treasury issued 108 00:06:11,520 --> 00:06:15,240 Speaker 1: a lot more tangiers and tenure in thirty years over time, 109 00:06:15,360 --> 00:06:18,440 Speaker 1: how that would affect our estimate of the budget deficit, 110 00:06:18,520 --> 00:06:23,279 Speaker 1: which is such an important issue for this country. Uh No, 111 00:06:23,279 --> 00:06:24,880 Speaker 1: no one that I know of has put pen to 112 00:06:24,960 --> 00:06:29,359 Speaker 1: paper on that, um and and and and you do 113 00:06:29,440 --> 00:06:31,479 Speaker 1: have to remember the here that that given the short 114 00:06:31,600 --> 00:06:34,520 Speaker 1: term nature of bills, you know, we're still you know, 115 00:06:35,040 --> 00:06:39,520 Speaker 1: you still can get you know, bill build. The sellout rates, 116 00:06:39,600 --> 00:06:43,080 Speaker 1: the stop out rates are called, still are so relatively 117 00:06:43,200 --> 00:06:46,200 Speaker 1: small now, especially with you know, Brexit and every other 118 00:06:46,360 --> 00:06:48,120 Speaker 1: kind of thing that puts the flight to quality to 119 00:06:48,200 --> 00:06:50,880 Speaker 1: the uh to the market, that we're still able to 120 00:06:50,920 --> 00:06:54,480 Speaker 1: sell build at such a small rate that the you know, 121 00:06:54,600 --> 00:06:57,919 Speaker 1: the savings versus you know, the one point five percent 122 00:06:58,040 --> 00:07:01,360 Speaker 1: for ten years. You know, it's it's I really would 123 00:07:01,480 --> 00:07:03,240 Speaker 1: wouldn't the only hazard guess at this point to be 124 00:07:03,279 --> 00:07:05,479 Speaker 1: hofest with you, Well, that's because that's why you worked 125 00:07:05,480 --> 00:07:07,560 Speaker 1: for Bloomberg B and A. Jonathan, because I don't guess 126 00:07:07,640 --> 00:07:11,000 Speaker 1: you give us the real deal. Well, I don't do 127 00:07:11,160 --> 00:07:13,920 Speaker 1: that good of math though, unfortunately, so you know that 128 00:07:14,240 --> 00:07:16,480 Speaker 1: that's the downside, I guess, Jonathan Nicholson, Thank you so 129 00:07:16,640 --> 00:07:18,600 Speaker 1: very much for joining This is an important and very 130 00:07:18,760 --> 00:07:23,160 Speaker 1: interesting story. Bloomberg DNA. That's where he's Capitol Hill Budget Reporter. 131 00:07:23,240 --> 00:07:25,360 Speaker 1: That's a holy own subsidiary of Bloomberg and it's a 132 00:07:25,440 --> 00:07:29,600 Speaker 1: leading source of legal, regulatory and business information for professionals. 133 00:07:29,680 --> 00:07:33,240 Speaker 1: Check it out on your Bloomberg. I'm Kathleen Hayes along 134 00:07:33,320 --> 00:07:46,280 Speaker 1: with pim Fox. This is taking Stock and this is Bloomberg. Bloomberg. 135 00:07:46,280 --> 00:07:48,480 Speaker 1: Taking Stock is brought to by cash Pro, the cash 136 00:07:48,560 --> 00:07:51,480 Speaker 1: management platform from Bank of America Merrill Lynch. Cash Pro 137 00:07:51,680 --> 00:07:53,600 Speaker 1: lets you stay on topic of your working capital in 138 00:07:53,720 --> 00:07:56,920 Speaker 1: real time. It's totally pro business. That's the power of 139 00:07:57,000 --> 00:07:58,080 Speaker 1: global connections.