Trump and Xi get an ‘A’ for procrastination

[Bloomberg]( Today’s Agenda - The trade-war truce is a [short-term win]( with [long-term risks](. - George H.W. Bush’s legacy is headlined by his [Cold War victory]( and [patriotism](. - Jerry Brown leaves [California in better shape](. - The yield curve has [begun to invert](. - OPEC has [big problems]( and [one less member](. Trump-Xi Kick the Can Few things are more satisfying, or dangerously comforting, than procrastinating a hard job. That’s pretty much what President Donald Trump and Chinese President Xi Jinping did with their trade war this weekend. To be sure, this was probably the best possible outcome. No butter knives were wielded in anger at their dinner in Argentina, and no tables were flipped, Real-Housewives-style. And even if no long-term deal comes at the end of a 90-day negotiating period, [Trump deserves some credit]( for getting China to this place, writes Tyler Cowen. Anger about China’s trade practices has been building for a while, and at least Trump tried to do something about it, Tyler writes. And this outcome is a [short-term win for all involved](, writes Mohamed El-Erian, who [predicted]( it last week. Still, it leaves a lot of long-term questions hanging, with many pitfalls to success. The fact that both sides already seem to be [talking past each other]( doesn’t bode well. Even one of the most hopeful soundbites from the weekend, China’s agreement to crack down on fentanyl exports to the U.S., is a mixed blessing. On the one hand, it’s an [easy propaganda win for Xi]( that could also help Americans, writes Shuli Ren. On the other hand, China has promised such crackdowns before, without much success, notes David Fickling. It exemplifies why we shouldn’t expect much progress on the big issues; China’s government, controlling as it is, still [isn’t powerful enough to stop bad behavior]( of individuals and companies, David writes. None of these concerns much bothered the U.S. stock market, which rallied today on the temporary delay of Tradepocalypse. As John Authers notes, markets will have plenty of time for trade worries next year. For now, [they’ve got an excuse to rally](. But Stephen Gandel warns [there’s a bigger problem ahead](: rising interest rates. To the extent a trade truce boosts the global economy, then higher rates become even more likely, Stephen writes. The weekend’s can-kicking could worsen the pain down the road, in other words. Further Trade Reading: Trump’s protectionism [won’t help struggling workers](. – Karl W. Smith The Example Bush Set President George H. W. Bush died over the weekend at the age of 94 after a lifetime of public service. His one term as president may have been short, but it was eventful and included what Jonathan Bernstein suggests was [one of the greatest accomplishments]( of the Cold War: successfully concluding it without some kind of catastrophe. We shouldn’t overlook a couple of other moves that seem [smart in retrospect but were politically risky]( at the time, Bloomberg’s editorial board writes. First, he ousted Saddam Hussein from Kuwait but left him in place in Baghdad. And he raised taxes to get deficits under control, infamously breaking a campaign promise but helping set the stage for an economic boom to follow. These exemplified his selfless patriotism, Bloomberg’s editors write – the common thread of his life, from his service in World War II to his magnanimous treatment of political opponents later in life. He made mistakes, and the ugliness of his 1988 campaign was a precursor of today’s bitterly divided politics. But we could use more of his humility now, the editors write. Further 41 Reading: Bush commanded [unusual respect and admiration]( on both sides of the political aisle. – Al Hunt Jerry Brown Goes Out on Top Another giant of American politics, from the other side of the aisle, leaves the stage next month: California Governor Jerry Brown. Though he served a whopping four terms running the biggest U.S. state, he has flown under the radar a bit since the 1980s, when he still labored under the unfairly dismissive nickname “Governor Moonbeam” for his iconoclastic style (which included dating Linda Ronstadt). But in his first two terms and then in his encore eight-year stint, which ends in January, he has [made California a better place](, writes Bloomberg’s editorial board. He turned a whopping budget deficit into a whopping surplus and became America’s point person in the fight against climate change. Like Bush’s selflessness, Brown’s expansive vision sets an example. Bonus Editorial: Europe’s bank stress tests [aren’t nearly stressful enough](. Begun, the Yield-Curve Inversion Has For months, we’ve been watching the “yield curve” – the gap between short- and long-term interest rates – shrink and waiting for it to “invert,” meaning short-term rates end up higher than long-term ones. This is a rare phenomenon that has preceded each recession of the past 50 years. Well, it’s happening again. Today the gap between three- and five-year Treasury note yields [inverted]( for the first time since just before the financial crisis. As Brian Chappatta notes, other pieces of the yield curve haven’t inverted yet, and it could take years for a recession to arrive after this first dip. But this [gives the Fed reason to be cautious]( about hiking rates. Further Credit-Market Reading: The [leveraged loan market has finally fallen]( to Earth, which is good news for the leveraged loan market. – Brian Chappatta OPEC’s Dilemma Oil prices jumped today after Russia and Saudi Arabia vaguely agreed to support the market in 2019. But nobody offered details, which is where the devil of such an agreement lives, as Julian Lee points out. Saudi Arabia is in a bind because it needs Trump on its side and can’t be seen openly cutting production; but other OPEC members may want the Saudis and Russia to reverse the production increases both made during the past year, Julian writes. How this seemingly impossible tension gets resolved will help [decide where oil prices go next year](. One nation that won’t be along for the wild ride is Qatar, which is leaving OPEC after 57 years, or most of the cartel’s existence. Liam Denning points out Qatar isn’t a big oil producer, but its departure still [exposes the widening cracks]( in OPEC’s foundations. Telltale Charts Victoria’s Secret’s dominance in underwear [made it complacent](, and now it’s paying the price, writes Sarah Halzack. Further Reading Trump’s tweets about Roger Stone today sure look [an awful lot like witness tampering](. – Tim O’Brien A new study shows [partisanship affects corporate-credit ratings](. Don’t be like this, investors. – Barry Ritholtz France’s violent “yellow jacket” protests could be [a preview of what’s to come]( in post-Brexit Britain. – Therese Raphael Facebook is [making France’s protests]( much worse. – Leonid Bershidsky Trey Gowdy and Bob Goodlatte are spending their last days in Congress [disgracing themselves further](. – Al Hunt The sheer [dumbness of climate-denial]( arguments is a feature, not a bug; though it’s also a weakness in the long run. – Liam Denning Men win more Scrabble tournaments than women, but it [doesn’t mean they’re better at Scrabble](. – Faye Flam Judge [blood-red Christmas trees]( not, lest ye be judged. – Stephen L. Carter Updates Ad Age named [Nike Inc. its Marketer of the Year]( for its Colin Kaepernick campaign – something [Sarah Halzack predicted here](. New York is [probing abuses]( in small-business lending – as our editors [called for here](. ICYMI Wall Street men are [afraid to hire or be near women](. Kickers University [insures itself against a drop]( in Chinese student enrollment. Nigeria’s president denies rumors that he has [died and been replaced by a cloned impostor](. Big Cow, meet [Even Bigger Cow](. (h/t for the first three kickers to Scott Duke Kominers) Got a spare hour and a half? Watch this [“Shrek” remake](, a collaboration of [200 fans](. (h/t Alistair Lowe) The big new thing in helicopter parenting: [eating school lunch with your child](. You do not need [all that baby gear](. The [best movie trailers]( of 2018. The best [movie soundtracks]( of 2018. The top [25 news photos]( of 2018. Note: Please send baby gear, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net. New to Bloomberg Opinion Today? [Sign up here]( and follow us on [Twitter]( and [Facebook](. [FOLLOW US [Facebook Share]]( [Twitter Share]( SEND TO A FRIEND [Share with a friend] You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022