Bloomberg Talks
00:02:22 · Joe Lavorgna, Paul Sweeney, Tom Keene
[00:02:22] S1: I'll throw a question back to you guys. How is the president going to react? Does he take accountability and responsibility for what's happened? [00:02:28] S0: Does he deflect? Does he do executive orders? [00:02:31] S2: Okay, we're going to stop the show right now. And for all of you around the world, anybody of any walk of life absolutely thunderstruck yesterday. by a president of the United States out by the reflecting pool, that huge magisterial body of water from the Lincoln Memorial is a generalization down to the Capitol. Joe Lavorgna, this is a president who has people around him like you served. You took the pay cut, you went there, you worked the 80 hours a week. What does his government look like after tomorrow? Does everybody exit like Joe Lavorgna exited? [00:03:09] S1: Well, to be fair, I work for Secretary Bessent, who still, I think, has a very highly thought of view, at least among all the investors I talk to. And I wanted to work specifically in Treasury. And I did my term for less than a year with little kids. I wasn't going to be long. So my leaving was family related. And to the extent I can offer guidance and solace, I certainly would. [00:03:31] S2: Do you look for a huge turnover? [00:03:34] S0: Typically, you get turnover in a second term. after the midterms. [00:03:39] S1: Given the likely drubbing Republicans are going to get, yes, I would expect major turnover. [00:03:46] S0: So, changes in economic policy at all? Do you think that President Trump will lean heavily into tariffs, for example?
00:03:46 · Paul Sweeney, Joe Lavorgna
[00:03:46] S0: So, changes in economic policy at all? Do you think that President Trump will lean heavily into tariffs, for example? [00:03:53] S1: Well, so, I don't think the president's going to act like a lame duck. So, he's got executive orders. He's got veto power. Who knows if we get involved in more geopolitical skirmishes? [00:04:03] S0: Does the U.S. [00:04:04] S1: Consider, you know, upping the, um, the blockade against, say, Cuba or doing something there, but potentially militarily? Does the U.S. talk again or the president talk again about annexing Greenland? I don't know. [00:04:16] S0: I mean, it's certainly possible. [00:04:18] S1: I mean, as a risk manager and looking at markets, you've got to game theorize a whole lot of different scenarios that would not happen under, let's say, a more traditional president. So I don't know what happens. But to me, the gridlock is not good kind of gridlock. It's bad gridlock because the political divisions and divisiveness are worse. Things like shutdowns could be longer. We've got a debt ceiling that's going to break up the deal within the next year. That could be a lot worse. I mean, this is just not a pleasant picture.
00:04:18 · Joe Lavorgna, Tom Keene, Paul Sweeney
[00:04:18] S1: I mean, as a risk manager and looking at markets, you've got to game theorize a whole lot of different scenarios that would not happen under, let's say, a more traditional president. So I don't know what happens. But to me, the gridlock is not good kind of gridlock. It's bad gridlock because the political divisions and divisiveness are worse. Things like shutdowns could be longer. We've got a debt ceiling that's going to break up the deal within the next year. That could be a lot worse. I mean, this is just not a pleasant picture. [00:04:44] S2: From where you sit, and as a student of American history, going back to the Boll Weevils, going back to the Blue Dogs, they got a fancy new name for conservative Democrats. What will be the power of Democrats elected by 52 to 48 percent elections across the nation pockets of conservative Democrats that are going to say to the traditional liberal Democrats, you've got to be kidding me. Is that going to be a theme? [00:05:14] S0: It could be. [00:05:14] S1: I mean, the thing is, what I think could happen is, I actually think the Democrats are going to get more than 52 seats. [00:05:21] S0: I mean, 06 is a great baseline. [00:05:23] S1: If you look at presidential net approval ratings, enthusiasm, generic balloting, it suggests the Democrats should get at least six seats. [00:05:32] S0: And 31 House seats.
00:05:32 · Paul Sweeney, Joe Lavorgna, Tom Keene
[00:05:32] S0: And 31 House seats. [00:05:34] S1: So I think that's what you'll get, maybe even a bigger majority in the Senate. Democrats could take that as a mandate, understandably so, and move too far to the left, not unlike, Tom, what the Tea Party was back in 2010 when they got 60-plus seats. And then the question is, okay, what happens in 28? Do the Democrats govern more from the center or from the fringe? [00:05:55] S0: That I don't know. [00:05:56] S2: I have the clearest memory. The only one that covered 94 midterms was Dan Rather. Nobody else was on at nine o'clock at night for that monumental Newt Gingrich election. And the Republicans were all on the same page. Do you, a student of this, Joe Lavorgna, do you see Democrats all on the same page in December of this year or December? I don't see it. [00:06:20] S0: No, I don't see it. [00:06:21] S1: But that doesn't mean the party is going to necessarily be as fractured as one might think. I think there's going to be competing candidates. narratives to see who, you know, who's going to run in 28. And by the way, we should have a good sense by Super Bowl, by Valentine's, who's running on both sides. [00:06:36] S0: And then we'll see who they are. [00:06:37] S1: If it's someone, you know, there's a whole list of Democrats that could run and some of them are very centrist. [00:06:42] S2: I got to stop. This is bad form. I feel like Dustin Hoffman in Hook. I need the outfit in that. How impolite of meta platforms. [00:06:51] S0: Yeah.
00:06:51 · Paul Sweeney, Tom Keene, Joe Lavorgna
[00:06:51] S0: Yeah. [00:06:52] S2: To announce a five-part U.S. dollar bond offering on Election Day. Sure. That's bad form. Why not, though? Didn't they do one last week? [00:07:02] S0: Yeah, they're just continuing to issue capital here. Joe, I mean, step back here. Give me your 30-second elevator. How's our economy doing today? The economy is a boom. [00:07:13] S1: It's just not a disinflationary boom. It's more of an inflationary boom, and that's one of the main reasons. affordability, cost of living, declining real wages, why the Republicans are going to get beat, I think, as badly as I'm guessing. Because the American worker is suffering. And by the way, even though it's not in the inflation data, look at first-time housing affordability. [00:07:35] S0: It's essentially all-time record low. People are hurting. It's not good. If you're at the RNC, you're like, this was pretty much all self-inflicted. [00:07:42] S1: Oh, it's totally self-inflicted on a variety of levels. But again, I just did my small part and I'm happy to be back in the private sector. [00:07:50] S2: Martin Shanker just emailed in, folks. He's my number one advisor, tells me what to do. He says, act like a journalist. Joe Lavorgna, is Secretary Bessent considering higher office? Is he looking at a future within the Republican Party?
00:07:50 · Tom Keene, Joe Lavorgna, Paul Sweeney
[00:07:50] S2: Martin Shanker just emailed in, folks. He's my number one advisor, tells me what to do. He says, act like a journalist. Joe Lavorgna, is Secretary Bessent considering higher office? Is he looking at a future within the Republican Party? [00:08:08] S1: My gut instinct is yes, but I don't, that's not based on any, you know, nobody. I mean, the scuttlebutt is that, you know, he's very happy and understandably so at Treasury. He's never said anything to me. People say no, but it would not surprise me. Again, this is my own personal view. [00:08:22] S2: So he says. [00:08:24] S0: I mean, in all seriousness, I honestly, I don't know, but it would make sense. I mean, I wouldn't surprise. [00:08:29] S1: Look at it this way, Tom. If you said yes or no, I'm going to say yes, but that's based purely on gut. [00:08:34] S2: If you feel like you want to come on tomorrow, can you please come back tomorrow? Talk to my people. [00:08:39] S0: Okay, I can try. Are they not listening today? [00:08:41] S2: No, no, that's fine. It's absolutely brilliant. And no, they never listen to me. My people, they don't. [00:08:47] S0: It's like, yeah, I get it. [00:08:50] S2: I can't say enough about it, folks. His perspective, hugely valuable. I think for a lot of people, stunning. to see his call there on the level of Democratic victory today. Mr. Lavorgna is with SMBC, Nikko Securities, and his Publix to the service to the nation is noted.