Congress May Be Crazy, But Not Suicidal: Jerram

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Oct. 7 (Bloomberg) –- Bank of Singapore Chief Economist Richard Jerram discusses the debt ceiling and the how he thinks a deal will be struck this week. He speaks to Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)

Week.

Concerns about this debt ceiling.

How do you think this is going to play out?

We expected to see this over the weekend.

It seems like the positions have been hardening.

At the end of the day they might be crazy but they are not suicidal.

We should get a deal sometime within the next week.

Right now according to john boehner, he does not have enough republican votes to get this cleaned spending bill through.

Moderate republicans are saying let's take a real look at the risk involved.

They can do the votes if they want to.

They do not want to put it to the boat.

That is not seem to be up to debate.

How do they back out of this elegantly without looking like they have completely caved in?

It seems fairly clear that they are getting the negative feedback.

The pressure is on the republicans.

That is what you see the democrats playing such hardball.

They realize they are in a win- win situation.

The longer it goes on, the more discredited the republicans get.

There's no reason we're going to get a grand bargain deal.

Are we going to see this until next year?

Will we see the budget impasse?

From a market point of view the best outcome would be to fix it, pass a clean bill, and get it over with.

It is probably more likely that they just spent another six weeks before they come to a deal.

That is another great outcome for the market.

I think and 95 or 96 form he had the last government shutdown, we actually saw markets rally about 12% or something.

Is that also the same scenario this time around?

I think in some ways this is a decent chance to get an.

There's probably some selloff related to the downside risk.

The prospect of the u.s. economy looks better.

The fiscal headwind will be a lot less severe.

You will see growth pick up.

It looks like the fed will stay g-v right there next year.

Maybe into 2016. the environment does look pretty good over the next 12 months.

You are overweight equity.

Nothing like 18% gains for stocks.

We think the basic strategy is to drive people out of risk assets.

It has been a great strategy.

It will be the same for the next one or two years as well.

We have been recommending people have consensus.

Where would you advise people to buy?

We like policy.

Policy switch from stupid to sensible.

We like the u.s. just because the broad policy settings have been much better.

Emerging markets you have a few

This text has been automatically generated. It may not be 100% accurate.

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