Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays
Speaker 2: at seven am Eastern on Apple car Player, Android Auto
Speaker 2: with the Bloomberg Business App. Listen on demand wherever you
Speaker 2: get your podcasts, or watch us live on YouTube.
Speaker 3: Joining us right now with the worst job on Wall
Speaker 3: Street seventy row with this chief economist at Wolf Research.
Speaker 3: Uh well, I got to do the flash first. Excuse me, I'd.
Speaker 4: Said this contract it is, and I you know, we.
Speaker 3: Covered equities, but we didn't do bonds and currencies with
Speaker 3: a better day to check than I could do with
Speaker 3: our interactive brokers. Bloomberg Business Flash, el Matale.
Speaker 5: You got it.
Speaker 6: And we've got futures mixed. Nazac Future is actually leading
Speaker 6: the games right now, up about three tens of percent
Speaker 6: sixty eight points. A big part of that Tesla shares.
Speaker 6: They're up about six percent sources. A president like Donald
Speaker 6: Trump seemed looking to push the development of fully self
Speaker 6: driving vehicles. That's the reason for that. Now we go
Speaker 6: to down futures little change down about forty one points.
Speaker 6: We have SMP futures little changed, up about four We
Speaker 6: have the two year yield at four point two nine percent.
Speaker 6: That's little change they yield on the ten year full
Speaker 6: point four six percent, and that's up about one basis
Speaker 6: point to currency is the Bloomberg Dollars Spot Index right
Speaker 6: now down about a tenth of a percent. We have
Speaker 6: the Japanese yenweeker, euro British pound stronger. We have Bitcoin
Speaker 6: up about seven tens of percent around eighty nine thousand,
Speaker 6: recovering from that biggest two day retreat since the US vote.
Speaker 6: Shares of Nvidia falling down two percent. That's following that
Speaker 6: report over its Blackwell chips. It's led to concerns about delays.
Speaker 6: And finally another company making news that would be Spirit
Speaker 6: Airlines filed for bankruptcy in New York, listing assets and
Speaker 6: liabilities between one billion and ten billion dollars. That is
Speaker 6: your Bloomberg Business Flash, Tom and Paul Lisa, thanks so much.
Speaker 3: Avic sixteen point five seven. Sephany Ross with us with
Speaker 3: Wolf sefas O excited because you're in the process now
Speaker 3: of putting together your year ahead view at Wolf Research,
Speaker 3: to be published December ish, maybe or before or after
Speaker 3: around the jobs report of December sixth. I believe it is.
Speaker 3: How do you do that, knowing the uncertainty of our politics,
Speaker 3: knowing the uncertainty of our economy, do you rewrite it
Speaker 3: in January?
Speaker 7: One important thing to think about is a lot of
Speaker 7: what the policies that Trump might put in place are
Speaker 7: going to be relative or important for twenty twenty six.
Speaker 7: So twenty twenty five, in a way, it's going to
Speaker 7: be about animal spirits, and it's going to be about
Speaker 7: immigration to some extent, but that's going to be the
Speaker 7: bulk of what we see for twenty twenty five, which
Speaker 7: for US is actually a decent economy. An immigration, you know,
Speaker 7: it's probably not going to have as big an impact
Speaker 7: as many thing from an inflation perspective, because the labor
Speaker 7: market's now back in better balance, so we don't necessarily
Speaker 7: need the influx of people the way we did two
Speaker 7: years ago. Now, when we're talking about twenty twenty six,
Speaker 7: then it becomes all about tariffs and the uncertainty that creates.
Speaker 7: But this is probably not a twenty twenty five story.
Speaker 4: How about the deficit is that it seems like a
Speaker 4: story that's every year. So and you know, I've been
Speaker 4: seeing some numbers. We were just talking to someone earlier
Speaker 4: as talking about, you know, the concrease the deficit by
Speaker 4: trillions of dollars? Are you how concerned are you, if
Speaker 4: at all, about that?
Speaker 7: Sure Trump has thrown out eleven trillion dollars worth of
Speaker 7: tax cuts. Is he gonna get that all done? No,
Speaker 7: So we're looking for, you know, yes, a tax cut
Speaker 7: that could be a couple trillion dollars, something like a
Speaker 7: net of three. But that's not that different from what
Speaker 7: Harris was proposing. So the market, the bond market should
Speaker 7: be okay with that. And by the way, we're looking
Speaker 7: for something that's gonna extend TCJA. And then beyond that,
Speaker 7: we're forecasting about five hundred billion dollars of additional net
Speaker 7: tax increases, which is tax cuts, which is really not
Speaker 7: that impact.
Speaker 3: I mentioned December. I think it's six's it's the jobs report.
Speaker 3: Do you look at the negative statistic with revisions last time?
Speaker 3: Is truly hurricane induced or is there more going on
Speaker 3: right now in the labor economy.
Speaker 7: It's very likely hurricane and so we're going to learn
Speaker 7: a lot more about that in state when we get
Speaker 7: state employment tomorrow at ten am.
Speaker 3: That's one of those who stop the show, take no
Speaker 3: date employment.
Speaker 7: So this is this is going to be the most
Speaker 7: important data point from an economic perspective this week.
Speaker 3: What are you doing tomorrow at ten am? Sweet and
Speaker 3: Alex want to.
Speaker 4: Know state unemployment? So what do we learn from that
Speaker 4: kind of data?
Speaker 7: So we're going to get this helped us in a
Speaker 7: big way look at Texas after Beryl because we got
Speaker 7: a sense of the the extent of the hurricane impact
Speaker 7: on the data and then we could assume, well, you
Speaker 7: get that back the next month. And this is gonna
Speaker 7: be the same thing. We're going to look at Florida
Speaker 7: most importantly to see to what extent did Florida drag
Speaker 7: down the overall payrols and if it was significant, then
Speaker 7: we know we should be able to add that back.
Speaker 3: Okay, so this is state reports. What do they go
Speaker 3: into that we normally report.
Speaker 7: So what they're going to it's it's it's bls, it's
Speaker 7: it's just telling you, basically what happened from a state
Speaker 7: perspective from employment the last week ago, last month, in
Speaker 7: the last month, so from the last payroll reading we
Speaker 7: got that twelve number, which was terrible.
Speaker 3: You're gonna look at North Carolina exactly.
Speaker 7: We're gonna look at the Carolina. We're gonna look at Florida, Georgia,
Speaker 7: and if we see a notable decline, then we can
Speaker 7: know that that's probably hurricane related and the next month
Speaker 7: you'll get paid back in a positive way.
Speaker 4: How's the consumer out there? From your perspective, we had
Speaker 4: some retail sales recently. How do you think about that?
Speaker 7: So the retail sales print was suit was very funky,
Speaker 7: so it was it was negative on core, but then
Speaker 7: when you dig into it, you had pretty big revisions
Speaker 7: for the month prior. So we when we take a
Speaker 7: three month average, you're looking at one point two nine
Speaker 7: percent month on month, which is annualized about three and
Speaker 7: a half percent. Not great, but not terrible. And we
Speaker 7: have to kind of look at it into perspective. It's
Speaker 7: probably you didn't have an incredibly strong September and incredibly
Speaker 7: week October. You probably have to think of some sort
Speaker 7: of average between the two, and it was likely related
Speaker 7: to a stronger a better weather forecast or betther sort
Speaker 7: of seasonably strong weather in terms of September that boosted
Speaker 7: the print and one reason why we got the significant
Speaker 7: positive revisions in September. You also had an early back
Speaker 7: to school season so the combination of these things lifted
Speaker 7: September and dragged October because you've got a bit of
Speaker 7: a payback from that.
Speaker 3: What's your real GDP? A nominal GDP call twelve months forward?
Speaker 7: Twelve months forward, we're looking for something like two and
Speaker 7: a half percent real GDP, solid solid GDP and something
Speaker 7: inflation that's two point two fourish. Yeah, two point four
Speaker 7: is so something almost five percent in terms of nominal.
Speaker 3: So how do they react to that at the FED?
Speaker 3: I mean, that's that's solid solid.
Speaker 7: It's complicated for the FED, right because they don't want
Speaker 7: to forecast any of the fiscal stuff, so they're going
Speaker 7: to probably want to cut a couple more times. They
Speaker 7: told us that what they really should be doing is
Speaker 7: saying we want to cut to something like four percent,
Speaker 7: and then we're going to see where the economy is.
Speaker 7: Because that's that's the message that we're getting from them.
Speaker 7: They say they're data dependent, but they continue to want
Speaker 7: to cut even though the data has been stronger and
Speaker 7: inflation a little bit stickier.
Speaker 3: So quickly, here do you use suggests that the December
Speaker 3: meeting December eighteen and then over into the next meeting.
Speaker 3: I can't believe I'm saying twenty twenty five, I'm such
Speaker 3: a fossil January twenty nine. Those two meetings give them
Speaker 3: still a lot of wiggle room to cut.
Speaker 7: I think they have wiggle room to cut at one
Speaker 7: of the next two, probably not as both.
Speaker 3: It's as close as I get the fed chat. That's good,
Speaker 3: I do.
Speaker 7: Okay, yeah right, They'll probably want to cut it at
Speaker 7: one of the two and then cut it some sort
Speaker 7: of quarterly cadence until the middle part of next year.
Speaker 3: This is like talking to Henrie out a trace. I
Speaker 3: didn't know anything about the state report tomorrow? Did you
Speaker 3: not barely do the lista? Did you keep it from us?
Speaker 6: Yes?
Speaker 3: Brilliant, Stephanie. We're a huge value had there from Woolf Research.
Speaker 2: You're listening to the Bloomberg Surveillance podcast. Catch us live
Speaker 2: weekday afternoons from seven to ten am. Easter Listen on
Speaker 2: Apple car Play and Android Auto with a bloom Business
Speaker 2: or want us live on YouTube.
Speaker 3: The last time she was with us, we've got a
Speaker 3: huge response. I think it's the mathewness maths. That's how
Speaker 3: they say they do they do. It's different equations for
Speaker 3: sort of different equations. Amanda Robello joins us. Now she's
Speaker 3: a DWS and before we get to all this fancy
Speaker 3: mumble jumbo in the quintuple leveraged artificial intelligence big data ETF,
Speaker 3: are you kidding me? Just what are your thoughts on
Speaker 3: the magnitude of the money in the bitcoin ETFs? I mean,
Speaker 3: if I if I talk to somebody Blackrock, I get
Speaker 3: a song and dance. What do you think at DWS
Speaker 3: of this moment?
Speaker 8: I think it's really interesting. We have laun judicial assets
Speaker 8: etcs in our European platform. We definitely think that there
Speaker 8: is a place for them. But I think that one
Speaker 8: thing that's important, not just with Bitcoin, but with all
Speaker 8: exposures that can be wrapped in an ETF. Do you
Speaker 8: understand the underlying right? And so I think that at
Speaker 8: the end of the day, this is an access vehicle.
Speaker 3: But Mathe, we just came back from the Boston FED.
Speaker 1: We had the number one payments guy in America, Emeritis
Speaker 1: Illinois professor Khan say, bitcoin is basically the new beanie babies?
Speaker 1: Do you know what a beanie Okay, okay, okay, that's
Speaker 1: the where's the underlying in bitcoin?
Speaker 3: Yeah? Or is it a beanie baby? Is Professor kanss I.
Speaker 8: Think I completely understand what Professor Khan is saying. We
Speaker 8: always think about you know, in your CFA textbook, you're
Speaker 8: always thinking about valuation of an asset, But how do
Speaker 8: we value bitcoin?
Speaker 7: Right?
Speaker 8: So, I think you know, at the end of the
Speaker 8: day there is some degree of speculation which is driving
Speaker 8: a lot of the volumes at the end of the day,
Speaker 8: probably more more.
Speaker 4: Rather than less.
Speaker 8: So that's definitely something I think all investors need to
Speaker 8: be aware of.
Speaker 4: On the technology front, where at DWUS heard you've seeing
Speaker 4: the flows. Is it still AI?
Speaker 8: It is still AI. So we've launched a number of
Speaker 8: different technology focused ets, so we have cybersecurity semiconductors. We
Speaker 8: also have US national critical technologies, but XAI x is
Speaker 8: the one that we're seeing flows going in on the
Speaker 8: daily basis on our US.
Speaker 4: Site AI x XAI.
Speaker 8: We also have a European version as well. It's the
Speaker 8: largest artificial intelligence ETF in the world as of last Friday.
Speaker 4: Cybersecurity, Lisa, here's the here's the ticker for you for
Speaker 4: the cybersecurity ETF PSWD password. How cool is that? How
Speaker 4: that so cybersecurity in addition to it, before there was
Speaker 4: an AI. I always told my kids cybersecurity that's like
Speaker 4: the new plastics. It's going to be. They're going to
Speaker 4: be spending money on cybersecurity forever, right, So is that
Speaker 4: What are you seeing in that side of the text trade?
Speaker 8: Cybersecurity? We've seen it become much more important. I think beforehand,
Speaker 8: a lot of people were thinking about it in the
Speaker 8: earlier days of cybersecurity, you know, as a theme, that
Speaker 8: it was more of a consume kind of topic. But
Speaker 8: I think, you know, with the Russia Ukraine War, a
Speaker 8: lot of people have now seen that cybersecurity is really
Speaker 8: a defense topic, much more than it has been in
Speaker 8: the past. We also know about you know, hackers in
Speaker 8: different geographies. You know, this is their attempt at warfare.
Speaker 8: Basically it's easier to build or quicker to build than
Speaker 8: you know, building an army or a navy. Also different
Speaker 8: spends which are required as well. So I think everyone
Speaker 8: is understanding now that cybersecurity is important in a different
Speaker 8: dimension than just your McAfee or you're you know, having
Speaker 8: a personal.
Speaker 3: VPM, a meta rebella with a sexpert on ETFs. We
Speaker 3: have built tunas today as well. Yeah, it's just too much.
Speaker 3: I got goosebumps DWS group here. I had a white
Speaker 3: paper thirty years ago that tried to model out not
Speaker 3: twenty to one hedge fund blow it up leverage, but
Speaker 3: we're non linearly from one to one out to a
Speaker 3: little bit of leverage, out to a little bit more leverage.
Speaker 3: Do you run into problem whre's fidelities propaganda for professional investors,
Speaker 3: Leverage gtfs are useful in statistical arbitrage, short term technical strategies,
Speaker 3: et cetera. Most people are buying them just a goose
Speaker 3: to return. Where's the tip point for you? And where
Speaker 3: leverage is a really tough game to win it.
Speaker 8: Yeah, the thing about the leverage gtfs is that it's
Speaker 8: not you know, two times on a long term basis
Speaker 8: or three times on a long term basis.
Speaker 3: People need to understand this.
Speaker 8: Is a volatility resetting strategy, be it in an ETF
Speaker 8: and ETN instructured products. So I think when we start
Speaker 8: to see volatility increasing quite significantly, we're not at the
Speaker 8: highs of the market, but we are kind of teetering upwards.
Speaker 8: Then you start to see that the payoff doesn't work
Speaker 8: in the way that a lot of the investors have.
Speaker 3: A ratio where that payoff doesn't work as a two
Speaker 3: to one, three to one the quintupple, tws X track
Speaker 3: or tech fund.
Speaker 8: We do not, and we've decided we've made a conscious
Speaker 8: decision to not be in the levered space here in
Speaker 8: the US.
Speaker 3: Oh no, I offer the triple.
Speaker 4: Why is that? I mean, it seems to be popular products,
Speaker 4: it would be, but I think.
Speaker 8: That you know, there are some fantastic you know, competitor
Speaker 8: peers that we have in the market, like who already
Speaker 8: owned that space, So we don't need to be there.
Speaker 4: All right, The fetch cutting interest rates even though the
Speaker 4: bond yields are going higher. I don't know how that
Speaker 4: all works. What do you guys deal from the ETF
Speaker 4: front to take advantage of a feeder reserve that peers
Speaker 4: should be on a pretty significant path of grade cutting.
Speaker 8: Yeah, so I think that you know, for the past
Speaker 8: couple of years or y're in a bit, cash has
Speaker 8: yielded enough and it's you know, effectively risk free, that
Speaker 8: rotating into cash could have made sense all of us.
Speaker 8: You know, when we think about income requirements within portfolios.
Speaker 8: You know, now five became the new normal, little bit,
Speaker 8: and so we need to think about how we're still
Speaker 8: going to generate that five So we like international dividends
Speaker 8: a lot. HF is our international high dividend strategy. We're
Speaker 8: known very much for international equities more broad just as
Speaker 8: a Frankfurt headquartered entity, but then that one has like
Speaker 8: kind of around a five percent yield on average. Then
Speaker 8: we also think that international real estate can make sense
Speaker 8: as well, so houses the ticker and rates we always know,
Speaker 8: yes HAUC exactly, and then we usually feel that rates,
Speaker 8: you know, are income generator, same as infrastructure securities as well,
Speaker 8: So if you want to think about these as well
Speaker 8: as a way to generate kind of four or five
Speaker 8: percent yield, that makes sense. On the fixed income side,
Speaker 8: we really like high yield at the moment. Actually there's
Speaker 8: more of a quality component than there has been historically.
Speaker 8: So default rates have pretty much halved in the last
Speaker 8: eighteen months, so much stronger, much more stable than historically.
Speaker 8: But then also you can now slice and dice high
Speaker 8: yield much more than you could do before. So thinking
Speaker 8: about the higher credit ratings within high yield, things like
Speaker 8: BHYB which is our double B single B exponentials. Also
Speaker 8: thinking about hy DOWN, which is our low beta high
Speaker 8: yield product, which is kind of better than a fallen
Speaker 8: Angels product because you're looking at the market already pricing
Speaker 8: in better credit quality with yield rather than waiting for
Speaker 8: the credit rating agencies to then make that call.
Speaker 4: Fascinating stuff. I mean Torston Slock from Apollos out with
Speaker 4: this weekend saying, hey, interest rates are higher for longer here,
Speaker 4: So the top of the high yield space is probably okay,
Speaker 4: but the lower end, yeah, probably at risk. We use
Speaker 4: calling on interest coverage and all those types of things.
Speaker 4: Exactly are you seeing that in your your investors? Do
Speaker 4: they want to take that lower end.
Speaker 8: Risk or now they're not brave enough yet. And it's
Speaker 8: great to hear from torlst In, one of our former
Speaker 8: dear colleagues. You know, we think that really segmenting how
Speaker 8: yield is making sense, that kind of crossover space is
Speaker 8: where you need to be. But I think that in
Speaker 8: certain sectors they're still uncertainty in terms of possibility of
Speaker 8: repaying debt, So stay away from the finite.
Speaker 3: Amanda think Amanda Rabella with this head of Extracker Sales
Speaker 3: DWS group.
Speaker 2: This is the Bloomberg Surveillance Park Cast. Listen live each
Speaker 2: weekday starting at seven am Eastern on applecar Play and
Speaker 2: Android Auto with the Bloomberg Business app. You can also
Speaker 2: listen live on Amazon Alexa from our flagship New York station,
Speaker 2: Just say Alexa Play Bloomberg eleven thirty.
Speaker 3: Henrietta Trees she's with Beda Partners, and I'm lucky that
Speaker 3: she joins us right now and informs us about the
Speaker 3: great debate. Henrietta, I see different threads here. But can
Speaker 3: the new Senate Majority leader excuse me, yes, the Senate
Speaker 3: Majority Leader Thuon of the Dakotas, the President Leader McConnell
Speaker 3: of the Kentuckys, or whoever can they delay, distress, distract
Speaker 3: the march president elect Trump wants with his appointees.
Speaker 7: They can.
Speaker 5: I think that there is a real undercurrent of focus
Speaker 5: on both the House and set it side around President
Speaker 5: electro seriousness about some of the nominees that he has
Speaker 5: announced so far, and so there is this sort of
Speaker 5: wariness that the President elect might do things that have
Speaker 5: not been done before in American history, such as sort
Speaker 5: of tell the House and Senate to go on recess
Speaker 5: so that he can nominate.
Speaker 3: Can we do that?
Speaker 5: There is a clause in the Constitution that allows the
Speaker 5: president elect to do that, I think it would be
Speaker 5: extraordinarily explosive. And I think what I state to clients
Speaker 5: is basically the autonomy that senators feel, the seniority they
Speaker 5: feel is having six year terms versus four year terms
Speaker 5: is a very real thing. You don't want to get
Speaker 5: between them and their incredible sense of importance in DC.
Speaker 3: To Republicans, and particularly Republicans in name only, with that
Speaker 3: six year tenure coming in, do they look at the
Speaker 3: president elect is lame duck.
Speaker 5: No?
Speaker 3: I don't think so.
Speaker 5: I think, especially because there's going to be so many
Speaker 5: freshmen senators, not just the turnover from the election, but
Speaker 5: all the senators that I expect the president elected tap
Speaker 5: to go into the administration. There could be as many
Speaker 5: as nine freshman senators. And it's worth bearing in mind
Speaker 5: that over seventy five percent of the House has only
Speaker 5: ever had Donald Trump as their Republican president. So there
Speaker 5: is this very real deference. Certainly it's held so far.
Speaker 5: It's only been two weeks, of course, but this very
Speaker 5: real deference. And I'd add on just one more layer
Speaker 5: here that the president is so much more popular than
Speaker 5: the down ballot Republicans. In some of these states, there
Speaker 5: were as many as forty seven thousand Republican voters who
Speaker 5: went in and pulled a lever for Trump and then
Speaker 5: left the ballot box. They did not vote Republican down
Speaker 5: the ticket. So a lot of those Republican members from
Speaker 5: specific swing states need to be deferential to Trump because
Speaker 5: that's what their voters want them to be.
Speaker 4: So in effect, Henriette, is there in fact a Senate
Speaker 4: opportunity to challenge some of these Trump appointees or they
Speaker 4: de facto like the Matt Gates or the world. Are
Speaker 4: they going to happen?
Speaker 5: No, I don't think they're going to happen. I think
Speaker 5: that the Senate is going to see itself as a
Speaker 5: temper of some of Trump's more aggressive instincts. So, for example,
Speaker 5: there's a very real effort right now from the Senate
Speaker 5: Republicans to see the ethics report on Matt Gates, which
Speaker 5: has allegations of drug use or sexual abuse, things like that.
Speaker 5: They want to know exactly what the Ethics Committee found,
Speaker 5: and so while we might not see that released into
Speaker 5: the public, they do want to see it internally as senators,
Speaker 5: and they are going to pull rank to try to
Speaker 5: get access to that.
Speaker 4: I guess the next pick of note, particularly for Global
Speaker 4: Wall Street, is a Treasury secretary, and there's I guess
Speaker 4: some a little bit of confusion there about where the
Speaker 4: camp or the Trump administration, the Trump camp, what they'd
Speaker 4: like to see. What do you think is going to
Speaker 4: happen there?
Speaker 5: Well, I think Scott Besset has been the leader for
Speaker 5: the last couple months. I think that's probably still the case,
Speaker 5: although I do know that the Trump transition team has
Speaker 5: been trying to audition additional CEOs from Wall Street, from
Speaker 5: Corporate America to try to get somebody with staff that
Speaker 5: they can sort of plug and play right into the
Speaker 5: agency themselves. That component wanted to have a lot of
Speaker 5: staff to bring with is a really big deal. I'm
Speaker 5: really more interested in Bob Leiinthheiser and where he might go.
Speaker 5: I don't expect that to be a Treasury pick, but
Speaker 5: I do think that he'll be sort of a roving czar,
Speaker 5: which is something that we've seen the Trump transition team
Speaker 5: already attach onto as a good policy idea or governing idea.
Speaker 5: So seeing where Bob Leidheiser land, I think is probably
Speaker 5: the most important thing, particularly because he's so competent and
Speaker 5: whatever he wants done on the tirefront is I think
Speaker 5: what we're going to see.
Speaker 3: And to get back to the recess issue, which I'm
Speaker 3: assuming this is like immediate, it's like the now. Can
Speaker 3: one scenario be the Senate says we're not going to recess,
Speaker 3: but then the House votes to recess, and that gives
Speaker 3: a president elect a window to put Thune in his place?
Speaker 3: Do I have that right? Yeah?
Speaker 5: I think that's roughly correct. I mean, as I said,
Speaker 5: we've never seen this done before. But if there's a
Speaker 5: disagreement between the House and the Senate, the president has
Speaker 5: the authority to step in and say, y'all can't plain
Speaker 5: slay together. I'm going to disband you for a period
Speaker 5: of time, and so long as it's more than ten days,
Speaker 5: then he can start nominating recess appointments and those people
Speaker 5: will be in for a specific period of time, probably
Speaker 5: like two years before the next turnover and the next
Speaker 5: Congress starts. But that's the dynamic that they would try.
Speaker 5: The disruption associated with that. I mean, ten days is
Speaker 5: a really long time for your first one hundred days
Speaker 5: agenda to just disband the House and Senate. That means,
Speaker 5: you know, first and foremost, we're going to have the
Speaker 5: debt ceiling that's due January one in terms of the
Speaker 5: suspension expiring, so that clock is going to be ticking.
Speaker 5: We'll have other cabinet official appointments that they'll want to confirm,
Speaker 5: and then obviously the tax bill that you need to
Speaker 5: get to writing and will not be able to do
Speaker 5: a budget, which is due the first Monday in February.
Speaker 5: There's a lot of stuff to be done. In ten
Speaker 5: days is a very.
Speaker 3: Long time, and paul I saw that there's like four
Speaker 3: thousand positions to fill in eight hundred one thoy or
Speaker 3: twelve hundred of them involved the president working with the
Speaker 3: legislative branch. It's not like forty two people, right exactly.
Speaker 4: That's the US government. So, Henrietta, between now and inauguration day,
Speaker 4: what are some of the key things you're looking for,
Speaker 4: the mileposts that you're looking at that we should be
Speaker 4: focused on.
Speaker 5: I am watching the Senate Finance Committee. What we're expecting
Speaker 5: there is for Mike Crapo, the incoming chair of the
Speaker 5: set of Finance Committee, and who I expect will be
Speaker 5: the Budget Committee chair. Lindsay Graham. They need to huddle
Speaker 5: and get together to figure out what the scope of
Speaker 5: the tax bill is going to be, and therefore what
Speaker 5: the magnitude of deficit increases need to be. And those
Speaker 5: two gentlemen need to work together. Those committees have to
Speaker 5: work together because in order for the tax bill to
Speaker 5: pass late next year, you have to have the budget first.
Speaker 5: So they effectively need to know the parameters of the
Speaker 5: tax bill right now. And so that is the process
Speaker 5: that is underway. They are going to be working groups
Speaker 5: formed to break out energy tax policy, international tax policy,
Speaker 5: et cetera. And then they'll get with Lindsay Graham and say,
Speaker 5: this is the appetitive deficit increase that we need. Can
Speaker 5: you get this through your committee? Suld know that information
Speaker 5: before January twentieth. The goal is to get some paper
Speaker 5: out to members by December.
Speaker 3: We'll bring a senator from South Carolina back probably had
Speaker 3: no idea for twenty one years he's been in the Senate,
Speaker 3: Senator Graham. Is he going to provide? Is he going
Speaker 3: to be deferential to the executive branch? Or is he
Speaker 3: going to be you know? Is President Trump says Republicans
Speaker 3: in name only? Is Senator Graham going to join other
Speaker 3: senators and say, no, you're not doing this to us.
Speaker 3: I don't think so.
Speaker 5: And indeed, the Senate Budget Committee has gotten less obstructionists,
Speaker 5: less rhino in the last couple of weeks since the election,
Speaker 5: even than it was before. Mitt Rodney, for example, is
Speaker 5: no longer going to be on the committee, Chuck Rastley's
Speaker 5: not going to be on the committee, and I think
Speaker 5: you're probably going to see some of the freshman senators
Speaker 5: who just won their races rise up to those ranks.
Speaker 5: So the deferential part or the part where you would
Speaker 5: stand up to the president in this realm, exists with
Speaker 5: deficit increases. I'd say the most proprie arry piece of
Speaker 5: information in my brain is the understanding I have of
Speaker 5: what can get fifty one votes from the Senate Republican conference.
Speaker 5: I believe it will be the biggest reconciliation bill that
Speaker 5: we have ever passed in America, somewhere in the range
Speaker 5: of two to two and a half trillion dollars worth
Speaker 5: of deficit appetite.
Speaker 3: So in terms of that old school.
Speaker 5: Hey, Republicans are concerned about fiscal spending, that's not going
Speaker 5: to be the case next year. There's going to be
Speaker 5: massive deficit increases and we will know that number from
Speaker 5: Lindsay Graham with the Budget Committee votes, which is a
Speaker 5: very big deal.
Speaker 3: Well, can we agree we learn more from Henriette to
Speaker 3: race in seven minutes than all the weekend blathershin, Wow, Henrietta.
Speaker 3: That was a clinic Withveda Partners. This is the.
Speaker 2: Bloomberg Surveillance Podcast. Listen live each weekday starting at seven
Speaker 2: am Eastern on applecar Play and Android Auto with the
Speaker 2: Bloomberg Business app. You can also watch us live every
Speaker 2: weekday on YouTube and always on the Bloomberg terminal.
Speaker 3: Joining us now from Rio from the Copa Caabana Beach,
Speaker 3: and he's not at the Copa Cabana Palace. He's at
Speaker 3: some boutiki thing with a balcony, and you know, you know,
Speaker 3: it's the way rolls. David Gera joins us right now
Speaker 3: from the G twenty meetings. David, I have the recollection
Speaker 3: of a G twenty meeting in Pittsburgh. You didn't cover
Speaker 3: that because there wasn't a beach. There was a Pittsburgh
Speaker 3: G twenty meeting with President Obama years ago that had substance.
Speaker 3: Will this G twenty frolic have substance.
Speaker 9: Well, there's plenty on the agenda tom a lot of
Speaker 9: talk about climate and development financing and things that you'd
Speaker 9: find in any number of G twenty summits in the past.
Speaker 9: But the real action at this one is on the
Speaker 9: sidelines where these one on one meetings are happening among
Speaker 9: world leaders, and of course President Biden is here on
Speaker 9: the heels of his trip to Peru for the APEC Summit.
Speaker 9: He's on this kind of swan song trip through South America,
Speaker 9: taking stock of what he's accomplished so far, but also
Speaker 9: reckoning with the fact as you know that his day
Speaker 9: a numbered as president. He's got fewer than two months left,
Speaker 9: and he's trying to offer some assurance to those other
Speaker 9: world leaders as they kind of look to each other
Speaker 9: and wonder about what the future is gonna bring.
Speaker 3: In the photo op, are they gonna align President Biden
Speaker 3: up under you for United States next to Vietnam? Or
Speaker 3: does he get does he stand in the front row?
Speaker 3: As President Trump would assist.
Speaker 9: Well, you're hitting on something really crucial here. We make
Speaker 9: fun of these photo ops, but so much goes into
Speaker 9: them about who's standing where and who's next to whom.
Speaker 3: At this one.
Speaker 9: There's an element of awkwardness because the G twenty includes
Speaker 9: not just US allies, but adversaries as well. The Russian
Speaker 9: President Vladimir Putin isn't here, Sergey Lavrov, his foreign minister is.
Speaker 9: And the way that they're getting around any awkwardness about
Speaker 9: President Biden's placement Visavi, mister Lavrov or any others is
Speaker 9: they're going to do this photo op at kind of
Speaker 9: a broader development conversation that's going to take place earlier.
Speaker 9: So it's not gonna have like a standard twenty leaders
Speaker 9: next to each other. It's going to be a wider
Speaker 9: group of people who are invited to that photograph. So
Speaker 9: something different about this this summit as well, Paul.
Speaker 3: I've stood twenty feet, not even twenty fifteen feet from
Speaker 3: the IMF photo op, and you'd think it was like
Speaker 3: your high school photos.
Speaker 4: Right.
Speaker 3: Why do the football players have to you know, come
Speaker 3: forward exactly?
Speaker 4: Hey, David, to what extent, if any, does President like
Speaker 4: Trump loom over this G twenty.
Speaker 3: Huge?
Speaker 9: I mean, I don't know that everyone's talking about him
Speaker 9: in specific, but everybody's wondering what's going to happen.
Speaker 5: You know.
Speaker 9: Tom brings up that summit that took place in Pittsburgh
Speaker 9: at the tail end of President Obama's tenure in the
Speaker 9: White House. You know, when he was leaving and Donald
Speaker 9: Trump was coming in. There was a lot of uncertainty,
Speaker 9: a lot of questions among world leaders about what the
Speaker 9: next four years would hold. They didn't know how Donald
Speaker 9: Trump was going to lead, or what his relationship was
Speaker 9: going to be like with other countries or these multilateral institutions.
Speaker 9: Something else that's different about this summit is people know
Speaker 9: what Donald Trump is like and how he governs. And
Speaker 9: so I was kind of counseled going into this summit
Speaker 9: by Ben Rhodes, who is an advisor to President Obama.
Speaker 9: Don't look at how they're thinking about their relationship with
Speaker 9: Donald Trump. They largely have that figured out, and it
Speaker 9: may be, you know, variation on a theme slightly different
Speaker 9: than it was back in twenty sixteen. What's more interesting
Speaker 9: and more important is to look at their relationship to China.
Speaker 9: And so walking around here in Rio and Brazil, you
Speaker 9: see the influence that Brazil has on this country, on
Speaker 9: Latin America broadly, the inroads that China has made. We're
Speaker 9: seeing just a real shift in the winds here, and
Speaker 9: I think that you see that kind of in stark
Speaker 9: relief as the summit gets under way. Paul, just the
Speaker 9: role that China's playing, the number of meetings that President
Speaker 9: She's expected to have with other world leaders, and how
Speaker 9: few relative to that President Biden's going to have.
Speaker 4: Interesting, So what is the extent there of the interaction
Speaker 4: between on the sidelines They were seeing some reporting between
Speaker 4: g and President Biden here.
Speaker 9: So they had a meeting over the weekend in Peru
Speaker 9: at that Apec summit, and it was a moment for
Speaker 9: them to talk for two hours. They hadn't spoken since April,
Speaker 9: and that was a telephone conversation. So widely agree this
Speaker 9: is the last time they're going to talk while Joe
Speaker 9: Biden's in the in the White House. And again it
Speaker 9: was a moment for President Biden to acknowledge the fact
Speaker 9: that the relationship is markedly better than the one that
Speaker 9: he inherited. They do talk with some frequency, even if
Speaker 9: it's not regularly. The lines of communication are open between
Speaker 9: Washington and Beijing. But you know, I mentioned President She
Speaker 9: being here. You have a lot of new faces who
Speaker 9: are just trying to introduce themselves to other folks cure
Speaker 9: Starmer's here and that was the first meeting on his agenda.
Speaker 9: This morning was with President She and that and it
Speaker 9: Selda's revelatory. You haven't had a prime minister sitting down
Speaker 9: with the Chinese premiere since twenty eighteen when Teresa made it.
Speaker 9: It so a reset of that relationship on that side
Speaker 9: as well.
Speaker 3: David Rio report, Please were you at the Boteca Savado
Speaker 3: last night? Neighborhood bar seat six? Or do you hold
Speaker 3: court at Belmont Copacabana Palace.
Speaker 9: Look, I've walked by the palace. I'm angling to get
Speaker 9: a Kaiperini there a little later today. But I will
Speaker 9: say the food has been extremely good, the seafood very fresh.
Speaker 9: There is octopus on the menu last night. I veiled
Speaker 9: myself of that. Oh and I mentioned that the kaiperini
Speaker 9: is the cachasa, the cane liquor involved in those extremely smooth.
Speaker 9: I enjoyed a beverage or two of my choice last night.
Speaker 3: Time. I'm on an island off Mexico a million years
Speaker 3: ago and they're playing Fleetwood Mac. I'm like, are you
Speaker 3: killing me? That's on American? Do they play Barry Manilo's
Speaker 3: Copa Cabana in Rio. Tell me they don't.
Speaker 9: I've heard some Tchuell Gilbertto, but not not Barry Manilo yet.
Speaker 9: I will lend an ear to it tonight. As you
Speaker 9: can see behind me, the famous Copa Cabana Beach music
Speaker 9: is playing constantly throughout the day. I've wandered a little
Speaker 9: bit around hope to get into the water. The sun
Speaker 9: rises at five am here, which is such a relief.
Speaker 9: I'm hoping to take take a pre surveillance dip tomorrow
Speaker 9: tom and I'll report back on that.
Speaker 3: There we go. David gerrow a team coverage from Coca
Speaker 3: Copa Cabana Beach Radio for those are Rio. For those
Speaker 3: of you on radio not seeing Rio, it is what
Speaker 3: a what a view? I mean, it makes me shot.
Speaker 4: I mean, you know, but I mean, he hasn't seen
Speaker 4: a ray of light, sunlight in his lifetime. I don't
Speaker 4: think the guy's got no color.
Speaker 3: He's just he's like Washington Nerd.
Speaker 4: Yeah, Washington Nerd.
Speaker 3: You know, you'll probably get in the water, Brooklyn. You know,
Speaker 3: maybe I'll take the tram up to the rock. And
Speaker 3: at least I.
Speaker 5: Have not.
Speaker 4: But I've always wanted.
Speaker 3: I've always wanted to go. I was scheduled once or
Speaker 3: twice to go and.
Speaker 4: You know, surveillance road trip.
Speaker 3: Yes, okay, so long ways away. I mean it's okay,
Speaker 3: it's like south yeah, and it's it's not.
Speaker 4: Eighty two degrees and sunny there today. I just kind
Speaker 4: of google, yeah, so they're good.
Speaker 3: Well, they're they're under the equator. Tell me right, this
Speaker 3: is how am well.
Speaker 4: They're going into their summer.
Speaker 3: I think, yeah, they're Yeah, it's a whole southern tin
Speaker 3: coverage David Girl on top of it.
Speaker 2: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
Speaker 2: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 2: seven to ten am Eastern on Bloomberg dot com, the
Speaker 2: iHeartRadio app, tune In, and the Bloomberg Business app. You
Speaker 2: can also watch us live every weekday on YouTube and
Speaker 2: always on the Bloomberg terminal