Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at seven am Eastern on Apple car Play or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
Think back on twenty twenty five the returns we've had inequities and fixed income and commodities, and think about twenty twenty six worst opportunities and where you really want to start is in technology. We do that with Dan Ives. He's a senior tech analyst and head of technology research at what Bush Security Stand.
Thanks for being in our studio here heres always all.
Right, set us. Let's set us up for twenty twenty six in tech, I mean the consumer electronics shows in a couple of weeks in Vegas. I'm sure you're going to be their huge presence there. Use my name. If you go to Bolajia, they'll take care of you. I know.
So just you know, you say Sweeney, it'll always gets the best.
Open stores opens. What are you thinking about twenty twenty six year for AI?
Look, I mean obviously it starts off at Cees where I think that Jensen's speech on that Monday is going to set the tone tone set right in terms of autonomous robotics, physical AI. But look, I think the reality is is that despite a lot of the haters and the bears and hibernation mood, it is going to be I think just a booming year for AI and tech stocks,
especially in the first half of the year. I think investors are underestimating, specifically on software, like we talked about not just Palenteer, but Manga, dB Snowflake, go Out, the infrastructure plays nebiis and some of those others. It's about the derivative please the second, third, fourth derivatives, CrowdStrike, cybersecurity, power, Alto, and I think what we're going to see play out Microsoft Oracle. Look, I think we said here a year from now, Oracle is the name that I think investors
are just throwing in the garbage. That's the one I think investors are getting, yeah, because it's the view, like taking on debt, open ai is not going to be good for their bill. Look, if you look at any open AI related tech stock, from AMD to you know, to Microsoft to Oracle, those stocks have sold off significantly. And I think the reality is this is an AI revolution where you're in. We talked about the AI party.
It's ten thirty ten forty five pm. Party goes to four am, start a nine pm and Open AI is going to play a huge role in that in the infrastructure build out. So to me, Paul, it's like I think, like tech stocks, they're up twenty five percent.
Really twenty six, But I mean is that the big names like in Vidia, because I think to myself, lots of competition out there for them. First of all, supply chain challenges continue, but you've also got Google and Amazon, big competitors who are playing catch up with Nvidia. Can it really hold on to that momentum in twenty twenty six.
Well, there's only one godfather of AI. He's wearing a black leather jacket. His name's Jensen, And I think, look, they are five years ahead of any other competitor. That's why look for them, like even their third best chip restricted each two hundreds right in China despite whatever the polotic baba JD tencent, they want those chips because it comes down to like they are so many years ahead
of competition. I think book AMD, that's going to be a major play that we see playing out and then I think you start to look at like what Google's doing, what Microsoft is doing. So in this chip world, it's in the AI arms rates. But here's the deal. For the first time in thirty years, US is ahead of China when it comes to tech.
How about that?
That that is I think that's really like the most important thing here is that's it's.
Getting lost in the sauce. I feel what you just said.
What is because for so many times, like I'd be in Taiwan eighteen hours seeing like factory fabs, then land the newer garaport, there's some fisfied dung and donuts and you're like, wow, we are like Sobahat now switched.
So is Opening Eye going to go public in twenty twenty six and is that going to be a seminal event.
For I think early twenty seven? Okay, they go, they could file maybe by the way twenty six, But but I think that's the thing like SpaceX, you think about Anthropic, you think about open Ai. Look, the reality is is that you know, people talk about bubble some of the best companies that haven't even gone public yet. And I
think there's a supply demand for big growth names. And that's why to me, I think investors that are seeing it's a bubble text done, they're doing it from the twenty fifth four of New York City office building Metro North right. I mean the reality is like for someone like me that sees it globally, sees the demand that supply is twelve to one for video chips today in Asia.
But here's the question is there enough energy out there to meet that supply? Because that's one of the big the biggest challenge going forward.
That's Look, if you think the thing to me that like if you're just like what could spoil the AI party? It's not about demand fourth and dust revolution. It's not about like the use cases. It's energy and regulation. And look energy, that's why like you know, you look what's happening a nuclear You saw the TAE deal with you know obviously trum media. You saw what Google's doing in terms of them buying their own energy company. I mean,
energy is the biggest restriction in the US. But I continue to believe like nuclear is going to be the play there.
See Yes, it's two and fifty three undred thousand people to send on Vegas Ford and it's been going there for forty years, I've been going to this thing. This one feels like we might get like a seminal announcement coming out of this, whether it's a product, service, an investment, a deal. It just feels like maybe this CEES might be something where something really material pops out of there.
Yes, I agree, because like look, for so many years, CEES is like, oh, a great refrigerator that talks to you, a cool drone that now it's really become like central to the when you think about the AI revolution, I think when you do about chips, when you look what's coming out of AMD, I think Nvidia is really gonna double down on robotics. I think quantum is another one. If you go back a year ago, that's where Jensen was sort of quantums, Like ten fifteen years away, Qualm
stocks sold up. I actually think there's gonna be a lot more bullish when it comes to quantum. And look, I know half the companies that I know that are going there. They're not officially there. Why they go in there. They're not going there to you know, to go to the Cosmo or go to the wind for dinner. They're going because they're looking. They're looking for acquisitions.
I kind of feel like during CS if I talked to a CEO, I think my first question is could be why you're not in Vegas? Like, I don't care what business you're in. I'm in the pain.
You're touched by the technology.
Yeah, exactly. But to Paul's point, it's this isn't just about like consumer gadgets one hundred inch televisions that somehow talk to you. Now it's really become central to like where the technology. Think about the Chinese presence there in terms of X paying bid everyone else. You think about autonomous robotics, and that's why, like I think the one thing like to stress to anyone listening is like this is AI.
It's not just.
About like chat, GPT, but what mile do you use? We are now this is the year Apple goes deep thousands of deep end and pool when it comes to a on the consumer side, we're now going to hit the next level of the AI revolution. But this is a nineteen ninety six moment, noine, nineteen ninety nine, two thousand bubble moments.
Yes, thankfully. Do we expect a big China presence at this thing given the relationship right now between the US and China.
If you're a China tech company, you have to come here. And I think, like when I think about like the Presidence last year, that was already significant. This year it is it's booming because for them, okay, like they're not going to be able to sell into the US at least currently, but this for them, it's a flex to muscles on the global stage in terms of them selling South America, Europe, Australia. I mean that is that world descends upon the stay. We're right, because when you this
is the world event. But to Paul's point, like if you're not there, it's almost like being at a wedding at a table by the kitchen with random people instead of being at like kind of like Paul, he's always like front and center, like he's at the cool table.
Matt Campbell named seven teenth Penn State head football coach. What do you think?
Look, I think Campbell like he is the right guy for Penn State. I mean it's not just that it's the staff he's going to bring in. He's he knows how to recruit. I think he's the magic formula. I think now we'll get Dan town Win from the USC as a defensive coordinator. This is going to build the stage to what I've like people will say next year,
I got to rebuild in here. I disagree. I think this gets us back into the playoffs next year, and it goes back to the dream for a Natty in twenty seven or twenty eight.
There we go Penn State, a new cycle there as coach Franklin moves on to Virginia Tech. We got the Matt Campbelltoner come up there at Penn State and Dan I very is an alument and very involved this school. Dan I thanks so much for joining us. Is Senior Tech, anols is web Bush Security giving us the latest thoughts there. Stay with us. More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from seven to ten am. E'stern listen on Apple, Karplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
Let's talk a little geopolitics, because goodness knows, there is a bunch of stuff happening all the time. And our next guest says, geopolitics is no longer background noise. It is now a core pricing mechanism in global markets. So let's dig in with Patrick Murphy, his executive director of
Geopolitical Advisors at Hillco Global. Patrick, thanks so much for being with us, just an overview here on I mean, right now on the hot seat, we've got Trump talking to net and Yahoo, Trump talking to Putin and to Zelenski. How are those big talks playing out in the stock market.
Oh well, at first, Alex bol thanks for having me on. It's playing big time because you know, when we look at geopolitics, it's now not just background noise as you mentioned, it's really we're pricing mechanism out there. So these geopolitical things, I mean especially at least when you look at our shipping costs from last year of three hundred percent, why because we're the attacks against the shipping lanes there, especially in the Red Sea, So in those certain routes, shipping
costs going up three hundred percent. So you know when you say four hundred forty percent of the world's container traffic comes from that region, that's a big deal. So that's why you solved. The United States and UK joined forces and what we call it Operation rough Rider to attack the Sudi huthis there to put them back on our heels. But it's still a volatile region. So that's why this at the end of twenty twenty five, we need to make sure that we are moving the ball forward,
hopefully some peace so we can just continue this. You know, economy that's moving in the right direction.
Patrick, you're a young guy, but many you've done a lot in your life. I mean, this dude a rack a served US Army. Okay, so thank you for your servicer in a rack in Bosnia, thirty second Undersecretary of the Army. Not even sure what that means, but it sounds really cool. Served in the US House of Representatives. I mean, the dudes had like three lives and he's still young men very cool.
Well, I drink a lot of coffee, My friend drink a lot of coffee.
Pat When you when you talk to corporations out there, executives, they did they understand that you know this, they really are impacted by geopolitics because I think we as consumers and investors, we learned that the hard way during kind of the pandemic, if you will, we Cas said, boy, that's global supply chains pretty fragile.
Yeah, No, doubt about it. And I think what you're seeing Paul is markets are rewarding resilience.
You look, look at the numbers.
I'm a numbers guy, right, So seventy percent of global manufacturing their manufacturer basically like they're saying, hey, we want to make sure that we are increasing on shore or near shore. Why because they want to make sure that you know, they're moving from just in time basically inventory models to make sure they're being replaced by hybrid systems. So sixty percent basically a saty stock, right because we saw the work COVID when they were hurting, they weren't
able to react and produce for their customers. So that's what Hillco does. And we're phenomenal and basically excelling for our clients where we say, hey, let's make sure that we're doing pricing and repositioning when you look at these jew political dislocations, particularly though where the public policy collides with private capital. So you know we are best in the world at this. I'm excited to be part of this team. I love being part of the army team, Paul.
As you mentioned, I was a soldier in Iraq, professor at West Point, and I was at the undersectar is basically the COO of the army, and I was the acting start to the Army. But now I'm with the great team at Hellco Global and you know, as a part time professor at West Point. I'm sorry at Whartonell, but it's just an exciting time to be a geopolitics and make sure we're helping our clients be ahead of the curve.
I like how we just slips in there that he's now our professor at Wharton. Sure, you have like four careers going on here, Patrick, I'm just curious what you're hearing from your clients and as they look at investments through this geopolitical lens, and what are some of their biggest concerns heading into the new year.
I think they want to make sure that there's certainty out there, right, and I think we all come together as the markets first to make sure that we're speaking in one voice. You know, we used to say politics should end at our water's edge. We know that might be trite and not necessarily the case in this And I served in Congress when I came back from Iraq, and you know I saw in the Pentagon, but there aren't a lot of folks out there that just want
certainty so it can make the right decisions. But Alexis, what you're seeing is that there's a massive public private partnership. What does that mean? That means like industrial policy is being reshaped out there, from chips to ships. What does that mean? That means that you're seeing things like the Chips Act, right, Yeah, was tens of billions of dollars of government investment, but that triggered three hundred billion an investment,
and with semiconductor industry that's a positive thing. But it's not just in semi conductors, not just with chimps. It's also in defense. You saw in this administration they just passed a bill that is going to provide two hundred billion dollars to the Department of Defense now called the Department of War, to what's called their Office of Strategic
Capital to develop these public fire partnerships. So you're seeing the government put in there that's again two hundred billion is over the next four years.
But then you're seeing JP Morgan Jay.
Say, hey, we're going to make sure we put one point five try dollars an investment what they're calling a resiliency and Security Initiative where they're making sure that they're added the curve too, because why because in defense last year two point four to four trillion dollars in defense spending, right where there's this recount calibration with you know, basically world powers to make sure that you know, to do what's necessary to keep their family safe, and they have
security goals. NATO specifically, he's all about. They're supposially now hitting three point five percent of their GDP and defense spending, some countries like Germany blowing past four percent. So you're seeing this real recaliber caliberation going on and it's exciting to be part of it. And that's what our clients want. They want the data that's going to affect their bottom line. It's gonna affect their customers to make sure they're head to curve and sleep with the wheel.
Patrick, we've seen some movement towards near shoring, friends shoring, on shoring, all that type of stuff of various parts of the economy. Does that signal that globalization is dead?
I wouldn't say it's dead. I think we had an air of globalization and now we have an era of basically strategic I would say fragmentation where you're having a clear alignment with countries that are aligned with their values toward each other. And I think you're going to see that, you know, moving forward, and that's why you know they're
protecting you basically the supplying channels out there. I've already mentioned that shipping container routes, especially dealing with you know, the red seat as who has canal, But I think you're also seeing it on making sure that they're really evaluating the market specifically really valuing Paul, the basically resiliency that we haven't seen before because they understand that things
could change on a dime. And I think that's where at HOPKA we really excel on that, you know, the pricing and repositioningid these geopolitical dislocations that we're seeing out there and so and it's not partisan, Paul, I mean because he saw on their President Biden about sixteen million new jobs and it's four years, but one point five million jobs in manufacturing, and they're seeing President Trump now doubled down on American manufacturing and you know, I think
it's going to be here to stay, you know, moving forward. Yep.
All right, Patrick, thank you so much for joining us really appreciate it. Patrick Murphy, He's the executive director Geopolitical Advisors. The firm is Hillco Global. Stay with us. More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance Podcast. Catch us Live weekday afternoons from seven to ten am Eastern Listen on Apple Karplay and Android Auto with the Bloomberg Business app, or watch US Live on YouTube.
Alonso Munos Droids is here, Chief Investment Officer, Hamilton Capital Partners. Alonso, you sit down with your clients here and you say, boy, we had a good twenty twenty five. Stocks, Euro up fifteen to twenty percent, high single digit returns on your fixed income investments. Commodities have been ripping, like we just mentioned gold and silver. What's the conversation for twenty twenty six with your clients?
Good morning, Paul, going to be here. Can't the markets close everything? We're done? No, Look, I think we have to be sanguine about the fact that there may be some volatility next year. We have some big catalysts that we're looking forward to, like FED policy, FED rate cuts maybe in January, maybe not a lot of the expectations or that the Fed's now going to pull back. We're looking at the Supreme Court and what they do with tariffs.
I think that's a big deal, and so I think we're going to be, you know, really open to next year. We're keeping a little bit of cash on hand, but we're going to stay on the AI trade. I think that's what we're going to do going into next year.
So you're staying on the AI trains, as you said in your note. But if you're also holding onto some dry powder, where are you looking for those other opportunities? Where might they be?
Alexis.
I think what we've been doing and our thought logic going in next year is to buy the back end of the yield curve of the US treagery curve, just to lock in some of those rates or clients. We expect that rates will start to come down maybe next year. We saw that the unemployment rate moved up to four point six, so there's a balance on Hey, everything's great. GDP was really strong, there's a lot of money flowing into this market with there are a lot of folks
struggling out there too. The unemployment rate is rising. The FED is backed into a quarter, Jerome Palace on his way out. So we're thinking about about a lot of things for us right now. It's lock in some of these rates, put in a simple hedge, and go into next year, although you know, with some risk, with a lot of optimism as well.
I see you know some of your core holdings at your firm, Google, Tesla, Meta, We're gonna have the biggest supporter arguably on the seal side of those types of names. Dan Ives coming in a little bit later here this morning. Here those stocks have been such good performers over the years. What gives you a conviction to stay with them as opposed to maybe, you know, maybe rotate into some other areas well.
We're always looking forward. I mean, we don't like to look backwards. But if you haven't owned the Big the Megacap seven or the Max seven we used to call him, than you've missed out on tremendous returns. And I think for the everyday investor, for you know, folks are accumulating wealth, you have to be in these names, these leaders that have led in the past but are leading into the future as well. We saw the acquisition announcement this morning
from Meta. Yep, Big deal, and I think going forward, we have an administration that has been friendly to these companies, and you see these the principles of these firms CosIng up to the president. We like to allocate capital where the capital is flowing, and we think that trade continues now.
Of course, when Facebook turned over to Meta, it kind of screwed up the whole Fang acronym, and then more companies were added right as well as we have the MAC set it. I want to talk a minute about the bond market because there's a lot of talk about the steepening of the yield curve. Does that if you are buying into that that's going to happen next year, does that imply that inflation might be a problem, and then doesn't that sort of throw a juggernaut into all of it?
Well? I think to your point, the FED has primed us to watch every single data point basically every day, and so we're glued to our screens. I think as we go on in next year, what we're seeing is inflation not coming down specifically to that two percent target. The economy is doing really well and the FED is cutting rates, but the back end of the yield curve has been pushing higher, So we start to look at the risk, which are you the deficit, government spending, the shutdown,
the terrif us. I mean, there's a lot out there that can drive that back into the yield curve higher. For us, however, locking in some of those rates potentially putting in a very simple simple hedge. We know that the ten to twenty year traditionally does well when markets push lower, when the momentum ships are the downside. So for us, we kind of have a Barbelle approach. We're
locking in some good yields. You know, there's a lot of cash in money markets, seven plus trillion dollars in money markets, So where does that money go as rates go down into the low threes?
Hot tuoes alternatives? What are your clients? How much exposure do they want two alternatives? And then what's that discussion like with your clients?
Well, you know, I think it's difficult because these big asset managers, the alternative asset managers, have made a huge push to bring this to four to one k's to the everyday investor, and they come with risk, you know, lack of liquidity, client sophistication on understanding these products. But
We've had a lot of conversations. We've actually been in private credit for some time, and we think that trade continues and if anything, it's coming to four to one k's, it's coming to the everyday investor in the form of vtfs. We've seen tremendous amounts of vtfs launched with these products, and I think we'll have to wait and see how this plays out at the retail investor level.
You talk about hedging, A lot of folks see the precious metals as a hedge, and lately they've been acting more like meme stocks. So what do you do with precious metals because some thought, you know, yesterday's biggest drop in silver in five years was more than just a bit of a correction. It was like, you know what, we're going to reset and maybe we're not going higher here.
That's right, Well, I left.
I think the goldbugs are finally right everyone that told us to buy gold. Now. When we talked to investors about commodities, commodities have always had a place in a portfolio, typically five to ten percent, as you guys have talked about, but we also warned folks that when we chase these trends just like twenty twenty one, whether it's meme stocks or technology stocks, or in this case gold and silver, you know, it can lead about outcomes for investors that
aren't willing to hold these positions for long term. So it is fun to see. It is sort of fun in conversation. And I think there's a supply demand global supply demand dynamic at play here for gold and for silver, and for some of these rare earth corals copper that are inputs to data centers, to chips, to all these things that we're talking about that are exciting about. Yeah, I trade.
So we've had I would say, really good earnings environment supporting stocks and bonds. Do you think earnings are going to continue to be strong enough to support these markets here?
So we think that earnings are going to be good, I think the bar continues to be pushed so high that when companies don't absolutely smoke earnings, you see really big price reaction. And I know, you guys, maybe we'll remember this. Prior to COVID, if we had an up down, you know, one and a half percent in the market at the broad index, we would all freak out.
Now it's just.
A normal, normal Monday, normal Tuesday. So we're looking at that volatility. I think, you know, going into next year, we're just open to the fact that, you know, earnings will be good, but we could see some broader volatility, specifically within these names that have been that have been hot for the last time.
And it really has been good. Is just not good enough, especially when you're talking about some specific names. It's been like that for a while. Now, what about IPO market, M and A. Lots of folks we're talking to seeing bullish in those two areas.
Very much so. I mean banks, a lot of bank mergers this year. I mean, we've seen some really big, sort of flashy eye and M and A's announces share and we think that continues. The market was basically frozen for two years, you know, when the FED was in their rate hiking cycles. So this is sort of a reopening, a breath of fresh air to see some of these deals take place and hopefully a lot of money money to be made.
You're based on in Atlanta, Atlanta, Georgia. I'm just gonna guess watch this, Okay, I guess without even asking.
Peachtree.
We're on Peachtree.
There you go, what are your clients asking you these days, what's the biggest concern for them these days?
You know, I think that a lot of clients are wondering when rates are going to come down. You know, a lot of folks still have mortgages, they have credit cards, they have auto loans. And what we're seeing, and part of that dynamic is the economy is great in the Fed's cutting rates, but that back into the yield curve is sort of anchored in the in the low force mid forced. So we're talking a lot about estate planning. We're talking a lot about how to allocate fresh capital
with markets at all time highs. We're talking a lot about gold and how to melt gold and sell gold, and you know, but it's they're exciting conversations. You know, a lot of people have done really well in the market and so looking to rebalance in the new year, maybe get some exposure out of tech to financials and healthcare sectors that haven't done you know, specifically, as well as technology and consumer discretion.
Alanza, thank you so much for joining us. Really appreciate it a lot. Some MNOs. He's a chief investment officer Hamilton Hamilton Capital Partners. Stay with us. More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us Live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us Live on YouTube.
It's an election year that has a lot of ramifications for a lot of parts of this economy, in this markets and what does it mean for Republicans, Democrats and investors. Coming out over gothamcconda joints us here lecture of Management Practice at the Yale School of Management. He's also now a Bloomberg opinion contributor here. So you know, we got the midterm elections here, typically got the party that's not in the White House tends to do better in these
midterm elections. I'm hearing reporting that that may occur this time as well. How do you guys see it?
No, I think that's right, and that's the general tendency. And you got a layer onto that. Two other things. One is that Donald Trump is historically unpopular. He's you know, he's essentially never broken fifty percent other than a week here and there, but he's really unpopular now depending on the poll you're looking at somewhere between thirty six and forty one. Those are all bad numbers. Okay, So when you have a particularly unpopular presence, going to do worse.
And the second is Donald Trump's sort of secret sauce in politics, and it is extraordinary, Let's be clear, is his ability to get people who do not normally vote to show up and vote for him.
Right.
We just see this at a scale that's remarkable. You saw in Michigan, you actually saw where the Democratics under one because thirty thousand Trump voters voted for Trump and left the rest of the ballot blank. Right, So that doesn't work in midterms when he is not on the ballot, and so that puts the Republicans in an even worse situation. Right now, what I'd say is there, and I think there are Republicans and congress people, and I've heard this from some who are really concerned.
They are right at the edge where.
The gerrymanders set up to protect their districts are going to start to look weak. If Trump drops another three four five points, you know you're gonna start to see incumbents who thought they were essentially asleep at the switch. We're never you know, would have to die before they lost reelection, right, right, are going to be in trouble, and then you're gonna you'll see a big shift in political dynamics.
So are we already seeing those folks distance themselves or try to distance themselves from the president? I mean, they're sort of in a no win situation, right.
They are the extent of personal control that he exercises over the party and the kind of ruthless way he goes after people who go who break from him, as Marjorie Dylor Green has experienced. There just isn't a precedent in American history for that. This is just a new phenomenon. But at some point they're going to start worrying about ringing reelection and they're going to start saying, well, maybe the primary isn't the only thing I have to worry about.
I don't think you're seeing distancing yet, and I'm actually pretty skeptical you will. We've seen so much turnover in the Republican Party that a lot of these people are either genuinely true believer or purely cynical, right, Like they're kind of one or the other. What you are, I think likely to see is more retirements. And you know, there are all these rumors that you're going to see people retiring during the term, enough that Mike Johnson might
actually lose the speakership. I don't think that will happen because the level of essentially fear that they will put into anyone who to do that is going to be extraordinary. But the fact that people are even talking about it is not something on your career.
See mass retirements is what you're saying in Congress.
That being said to the extent that the Republican Party is, you know, weakening around the edges as Trump's administration ages here again, I have to ask the question, where are the Democrats Who's leading the charge here? It can't be Chuck Schumer. No.
I think the extent of the generational shift that's hitting the Democratic Party is profound, and this is going to have long lasting effects in American politics. This is not just going to be this election cycle seeing a new sort of generation of Democrats who basically, I think the way they would put it is they want to play the game the way the Republicans do, right, and which means that they are not as interesting compromise. They are not as interested in blanking. Whether or not you agree
with that assessment, that's how they think about it. And that shift is going to be is going to be pretty When you have two parties who are willing to go to the edge, that is very different than having one party that's willing to go to the edge. And so that is going to happen. But Paul, as you know, you asked me this question every time I bought it, I tell you the same answer. It's still early, okay. The way the leadership of the party is going to evolve is the primary is and we're not going to
start the primaries till after the midterm elections. You're starting to see people jockey. You're starting to see people have success. I mean, Gavin Newsome, I would not have predicted that parodying Donald Trump's voice on Twitter would be a successful political tactic, but it turns out it.
Really works for him.
And you're seeing a bunch of other people who are similarly, you know, making making waves, making noise that you're starting to say, Okay, the demochocratic problem in the primaries as opposed to now right where all anybody cares about is the midterm. But when the primaries roll around. Is it's not going to be a lack of people. It's going to be too many that there are just so many plausible candidates. So I'm not you know, I'm not saying
any of these people would be a great president. But if Kevin Yousome or Josh Shapiro or Wes Moore or core like, there's a lot of people in the Democratic Party who you look at and go, that's a plausible present and that you know, there's sort of an embarrassment of riches problem that they might have to deal with there.
Well, something that's going to be happening before the midterms, of course, is the deadline for another government shutdown, and the crux of the first government shutdown is still the problem, which is no agreement on healthcare. Do you think they're going to take it to the mat and then we're going to avoid or could we be entering yet another historic shutdown at the end of January.
I mean, I think there's a chance that will that will avoid another shutdown, just because one of the bigger, big underlying driving factors for the last shutdown was the Fsteam files, and you know, mad as that seems it's quite clear that the House was held out of session to stop that, to delay that vote on the files.
Since that vote has taken place, that factor is out, and I think everybody's kind of looking at the last one and being that that didn't work right Like the Democrats who did it, it did not they you know that, even if they got what they wanted out of it, it doesn't feel that way because there's so much internal pressure against it. The Republicans, this is just a nightmare. But the other big driving dynamic in this, I don't know how they're going to get out of it. Is
really simple. If premium skyrocket the way that it looks they are doing and the looks like they're going to, that is a political disaster for the Republican party, which owns the issue. In that way, they're asking Democrats, but to fix it, almost all the votes will be Democrats. The policy incentives which are to fix the problem, and the political incentives, which are for Democrats to say, hey, guys, congratulations, like you own this, those run in completely opposite directions.
And the closer we get to the midterms, the more the political incentives are going to want the policy wants.
Post midterms to what extent, is President Trump effectively a lame duck.
I mean he was, he was a lame duck from the moment he got regotsorn in, right, But what has stopped that from happening is again this incredible personalist control over the party. That is again like Franklin Roosevelt in
his wildest dreams did not have anything like this. And so if the midterms are a blood bath for the Republicans, and much of that just depends on the economy, right Like, if AI keeps the economy to float through November, then they bill be they're in a loose seats but if MA, they may not lose sixty seats, they may lose twenty.
But if the midterms are a blood bath for the Republicans, then I think you're going to see some pretty high level of panics setting in because, especially if the economy turns between now and twenty eight, which I'm not making any predictions, just that we've had a long run without that so that it wouldn't shock anybody, You're going to see some Republicans who are pretty panicked and who are not going to feel all that comfortable, say writing the inner of jd Vance in the same way.
In thirty seconds or less. Do we get a deal Ukraine and Russia.
No, No, we're not like I like the deal. The deal would have to be the Russians essentially withdrawal from Ukraine, because the Ukrainians are pretty clear they're going to keep fighting and as long as they're going to keep fighting and as long as Putin wants to conquer Ukraine, which is essentially still where you're saying, there's not going to
be a deal. The sort of Trump administration's decision to side with Russia in this war and put pressure on Ukraine is you know, like just one as a matter of national interest, in national honor, horrifying, right, But even setting that aside, what it's demonstrated is that the Ukrainians can keep fighting without us, and fight well, and they know it all right.
Gotham, thank you so much for joining us. Skathamccon the lecture of Management Practice at the l School of Management. Also a Bloomberg Opinion contributor.
This is the Bloomberg Surveillance podcast, available on Apple, Spotify and anywhere else you get your podcasts. Liz Live each weekday, seven to ten am Eastern on Bloomberg dot com the iHeartRadio app tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal