WEBVTT - Tech, Markets, and the Midterms 0:00:02.529 --> 0:00:04.210 Bloomberg Audio Studios. 0:00:04.690 --> 0:00:05.370 Podcasts. 0:00:05.690 --> 0:00:07.050 Radio. News. 0:00:12.530 --> 0:00:16.670 This is the Bloomberg Surveillance Podcast. Catch us live weekdays 0:00:16.730 --> 0:00:20.210 at 7 a.m. Eastern on Apple CarPlay or Android Auto 0:00:20.290 --> 0:00:23.880 with the Bloomberg Business App. Listen on demand wherever you 0:00:23.910 --> 0:00:27.000 get your podcasts or watch us live on YouTube. 0:00:27.460 --> 0:00:29.840 With a real knowledge here linking in all of our 0:00:29.880 --> 0:00:35.320 work in finance. is Virginia, where Meredith Whitney has an affiliation. 0:00:35.360 --> 0:00:37.340 And we are just so happy on election day to 0:00:37.380 --> 0:00:42.990 speak to Meredith Whitney of the Meredith Whitney Advisory Group. Meredith, 0:00:43.050 --> 0:00:47.690 Virginia is not what it was 20 years ago, or 0:00:47.770 --> 0:00:52.750 even two years ago. It is this dynamic thing around Washington, 0:00:52.770 --> 0:00:56.610 to say the least. What are you watching in Virginia 0:00:57.070 --> 0:00:58.029 on this election day? 0:00:59.270 --> 0:01:01.389 Well, I'm watching a lot of things on this election day. 0:01:01.430 --> 0:01:04.709 And by the way, your show has been so excellent today. 0:01:04.810 --> 0:01:07.890 So thank you for all that. You know, I think 0:01:08.110 --> 0:01:11.009 what people are watching most closely is maybe not Virginia, 0:01:11.110 --> 0:01:15.819 but Texas, because so much of the, you know, of 0:01:16.100 --> 0:01:21.120 AI is dependent upon who becomes the new governor in Texas. 0:01:21.980 --> 0:01:27.839 And then there's so much that is, you know, Still 0:01:27.910 --> 0:01:31.050 in doubt because the polls have been so, so bad 0:01:31.170 --> 0:01:34.450 and the prediction markets have been so bad over the 0:01:34.510 --> 0:01:39.740 last election, be it Brazil, be it Israel. So I 0:01:39.760 --> 0:01:43.700 think everyone's going to be on your Tinder hooks tonight 0:01:43.819 --> 0:01:48.160 and tomorrow. waiting to see what happens. And, you know, 0:01:48.400 --> 0:01:51.480 from the work that we've done, I think it's going 0:01:51.500 --> 0:01:53.810 to be really, really bad. I mean, the Republicans have 0:01:53.830 --> 0:01:57.670 been so out of touch on affordability and the data 0:01:57.690 --> 0:02:00.910 that they're looking at, I think they know that they're. 0:02:02.810 --> 0:02:03.610 At serious risk. 0:02:03.630 --> 0:02:07.510 But the talk track that they've been doing that, you know, 0:02:07.710 --> 0:02:13.270 all income levels have grown in the most recent data— this 0:02:12.950 --> 0:02:17.730 is the BLS data— is very stale. You know, for people 0:02:17.810 --> 0:02:21.829 who have— who are really on the brink, one in four 0:02:22.310 --> 0:02:27.440 recipients of food stamps or SNAP has lost their ability 0:02:27.520 --> 0:02:32.140 to access food stamps. I mean, the electorate is really angry. 0:02:32.840 --> 0:02:34.780 And I think we're going to be prepared for a 0:02:35.419 --> 0:02:35.960 big upset. 0:02:36.460 --> 0:02:38.580 So talk to us about the data you look at, Meredith, 0:02:38.620 --> 0:02:41.240 to think about this affordability issue. Again, you follow all 0:02:41.260 --> 0:02:44.040 the financial companies, the credit card companies. You see that 0:02:44.160 --> 0:02:46.970 granular data that they see. What what are you seeing 0:02:47.010 --> 0:02:50.010 out there as it relates to this affordability issue, which 0:02:50.090 --> 0:02:52.850 is obviously issue arguably number one in this election cycle? 0:02:53.590 --> 0:02:55.810 Well, if you want to see good things, you can. 0:02:56.290 --> 0:03:00.750 The banks lend to people who don't need money. They 0:03:00.790 --> 0:03:04.380 lend to Prime and Super Prime. If you want to 0:03:04.419 --> 0:03:06.919 see what's really going on with the economy with 50 0:03:06.919 --> 0:03:11.920 percent of households, you have to look. closer at things like, again, 0:03:11.980 --> 0:03:15.900 who's getting food stamps, who's not getting food stamps, who's 0:03:15.960 --> 0:03:21.040 going to the big growth areas, which is pawn loans, 0:03:21.160 --> 0:03:25.040 which have grown 30 plus percent over the last few years. 0:03:27.070 --> 0:03:31.350 Daily wage access has grown like a rocket ship in 0:03:31.389 --> 0:03:33.930 terms of people who can't make it from paycheck to paycheck. 0:03:34.169 --> 0:03:37.130 They have to make it from payday to payday. And 0:03:37.350 --> 0:03:40.110 I don't think that a lot of, first of all, 0:03:40.130 --> 0:03:44.930 the data is largely in the hands of private companies. Increasingly, 0:03:45.210 --> 0:03:48.830 you've got companies like Dave and Chime and Block that 0:03:48.890 --> 0:03:52.010 are making these types of products available. And they're the 0:03:52.030 --> 0:03:57.250 fastest growing products within those companies. But you've really got 0:03:57.280 --> 0:04:01.120 to pay closer attention. And a lot of the economists 0:04:01.140 --> 0:04:01.619 aren't doing that. 0:04:02.330 --> 0:04:04.690 Just a headline just out moments ago. What did oil 0:04:04.730 --> 0:04:09.010 do here, Paul? Yeah, oil comes back. It was down $ 3, 0:04:08.950 --> 0:04:11.640 and now Brent is down $ 1. 0:04:11.570 --> 0:04:12.570 This is a headline. 0:04:12.970 --> 0:04:14.790 I'm just bringing it to you folks as it comes 0:04:14.830 --> 0:04:19.180 across from Bloomberg News. Iran says U.S. response to its 0:04:19.300 --> 0:04:25.100 demands wasn't convincing. I have no idea. Meredith would want 0:04:25.140 --> 0:04:28.380 me to do that headline here on this election day 0:04:29.160 --> 0:04:33.870 as well. NASDAQ up half a percent. as well. Meredith, 0:04:33.930 --> 0:04:36.190 from where you sit with all of your work over 0:04:36.230 --> 0:04:41.820 the years, I'm fascinated by the middle ground. Conservative Democrats 0:04:42.500 --> 0:04:46.020 or liberal Republicans, do they exist out there? 0:04:48.180 --> 0:04:53.900 I think so. You know, certainly for the group of 0:04:54.000 --> 0:04:57.520 people that I talk to, I think there's a middle ground. 0:04:57.560 --> 0:05:00.740 I think let's give an example of Texas. Tallarico is 0:05:00.800 --> 0:05:04.990 a centrist. So I think that, you know, when he 0:05:05.250 --> 0:05:08.370 I expect him to win, that says a lot about 0:05:08.430 --> 0:05:10.870 the country, because, you know, for a Democrat to win 0:05:10.910 --> 0:05:16.150 in Texas, that's a major, major move. And I think 0:05:16.230 --> 0:05:20.089 more and more people are centrist. You've got the extremes 0:05:20.150 --> 0:05:24.950 that dominate the parties, but most people don't relate to 0:05:25.440 --> 0:05:30.140 what's going on with either party. So I think a 0:05:30.200 --> 0:05:32.400 central trend is growing in the country. 0:05:32.420 --> 0:05:34.560 I've got to get the market open, but Meredith, please 0:05:34.580 --> 0:05:37.820 stay with us. I want to talk about the agony 0:05:37.920 --> 0:05:41.340 out there of people selling winners, which Meredith Whitney has 0:05:42.130 --> 0:05:45.589 fought against for years. Meredith Whitney with us on this 0:05:45.650 --> 0:05:50.190 Election Day with Meredith Whitney Advisory Group, with a real understanding, again, 0:05:50.230 --> 0:05:54.590 of the Beltway and Virginia. Meredith, I look at Visa. 0:05:55.290 --> 0:05:57.450 You and I sat over a glass of wine four 0:05:57.510 --> 0:06:01.020 lifetimes ago, and you said, Tom, shut up and buy Visa. 0:06:01.380 --> 0:06:04.799 I didn't because I'm in triple leveraged all cash. Visa, 0:06:05.040 --> 0:06:07.580 onward and forward. Do you still feel the same way 0:06:07.600 --> 0:06:10.680 about the financials? Just buy them and hold them forever? 0:06:11.660 --> 0:06:15.500 It depends on what financials. I'm not so, and I 0:06:15.560 --> 0:06:18.580 haven't been so keen on the banks, but for trading, 0:06:19.000 --> 0:06:21.620 because they've been largely vehicles. 0:06:21.540 --> 0:06:24.080 Of share buybacks. 0:06:24.140 --> 0:06:27.560 They haven't really grown. Obviously, we always separate JP Morgan 0:06:27.610 --> 0:06:31.570 from the rest of the banks. The payment companies have 0:06:31.610 --> 0:06:35.370 been the shining stars of financials. They were sort of 0:06:35.390 --> 0:06:38.890 the OGs of fintech. It's hard to think of Visa 0:06:39.070 --> 0:06:46.339 and MasterCard as fintech, but truly asset-light models, high-margin vehicles. 0:06:47.420 --> 0:06:51.500 When we spoke, they were demutualizing from the banks, and 0:06:51.520 --> 0:06:56.650 that's always a fantastic success story for any company. But 0:06:57.089 --> 0:07:01.630 I think that the non-banks have really— outperformed and will 0:07:01.650 --> 0:07:06.800 continue to outperform. Let's give an example of Citi. Citi 0:07:06.820 --> 0:07:10.500 was trying to get a discount to Tangible Book, and 0:07:10.560 --> 0:07:16.070 now it's above Tangible Book. And so the banks, I 0:07:16.090 --> 0:07:19.540 don't really think there's much going on there, but the non-banks... 0:07:20.190 --> 0:07:22.140 are really growing. And I hate to say it, one 0:07:22.180 --> 0:07:24.960 thing that I think of, a lot of clients have asked, 0:07:25.260 --> 0:07:29.780 what's the trade in a lame duck two years? And 0:07:29.880 --> 0:07:31.860 I think what is going to continue to be the 0:07:31.900 --> 0:07:35.120 case is this growing chasm between have and have not. 0:07:35.220 --> 0:07:40.460 So the non-banks that cater to the bottom K have 0:07:40.520 --> 0:07:43.580 been the outperformers over the last two years, and I 0:07:43.580 --> 0:07:45.520 think they'll continue to be the outperformers. 0:07:45.700 --> 0:07:48.060 Meredith Whitney, thank you so much. Meredith Whitney Advisory. 0:07:48.080 --> 0:07:48.380 Thank you. 0:07:49.920 --> 0:07:54.100 Stay with us. More from Bloomberg Surveillance coming up after this. 0:08:01.350 --> 0:08:04.950 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:08:05.030 --> 0:08:08.210 weekday afternoons from 7 to 10 a.m. Eastern. Listen on 0:08:08.310 --> 0:08:11.570 Apple CarPlay and Android Auto with the Bloomberg Business app 0:08:11.770 --> 0:08:13.490 or watch us live on YouTube. 0:08:13.940 --> 0:08:16.720 A lot of continuous conversation and we start strong this 0:08:16.780 --> 0:08:21.030 morning on Global Wall Street with Joe Quinlan. Chief Market 0:08:21.050 --> 0:08:25.410 Strategist at Bank of America, Senior Vice President Gridlock. 0:08:25.750 --> 0:08:28.270 Is Gridlock good for your world, Joe Quinlan? 0:08:29.170 --> 0:08:32.290 In general, yes, Tom, in the sense that we're not 0:08:32.330 --> 0:08:35.820 expecting anything between now and 2028. So we can settle down, 0:08:36.260 --> 0:08:38.380 see how it plays out at the state level with 0:08:38.400 --> 0:08:41.459 a moratorium on the data center. So the debt ceiling 0:08:41.500 --> 0:08:44.380 will be an issue. But in general, yes. But when 0:08:44.400 --> 0:08:45.920 I talk to clients and they're worried about the federal 0:08:45.940 --> 0:08:47.880 budget deficit, they want action, not Gridlock. 0:08:48.929 --> 0:08:51.630 Joe, concentration, AI. 0:08:51.650 --> 0:08:55.120 I think a lot of people don't even know really 0:08:55.160 --> 0:08:58.000 what their exposure is to AI. They're like, okay, I 0:08:58.080 --> 0:09:00.830 own Nvidia, I have my AI exposure. But it goes 0:09:01.040 --> 0:09:03.350 well beyond that here. How do you guys frame that 0:09:03.510 --> 0:09:04.450 discussion with your clients? 0:09:05.010 --> 0:09:07.369 Well, we really pull back the covers on the portfolio. 0:09:07.410 --> 0:09:08.010 And you're right, Paul. 0:09:08.110 --> 0:09:10.410 And when they look at AI, it's not just the names, 0:09:10.470 --> 0:09:13.790 it's the ecosystem. And it's even in the emerging markets, 0:09:13.850 --> 0:09:16.550 South Korea and Taiwan. So the hard part is getting 0:09:16.630 --> 0:09:19.770 away from this ecosystem and finding something else. So it's 0:09:19.870 --> 0:09:22.250 time to have that conversation as we're talking about. But 0:09:22.290 --> 0:09:24.770 at the same time, a lot of our clients, our FAs, 0:09:25.010 --> 0:09:27.520 they don't want to give up on these winners. These 0:09:27.580 --> 0:09:29.400 companies have done so well, and I believe they're going 0:09:29.420 --> 0:09:32.020 to do well in the 27 and 28. 0:09:32.020 --> 0:09:36.170 So what is the, from the Bank of America private 0:09:36.190 --> 0:09:39.590 bank perspective, what is the AI trade here? Do I 0:09:39.630 --> 0:09:41.650 want to lean into this thing even more? Do I 0:09:41.690 --> 0:09:44.000 want to try to Hedge it out if I can. 0:09:44.059 --> 0:09:46.490 What are we doing? Well, you know, the Mag 7 0:09:46.490 --> 0:09:48.569 has not performed very well this year. I think like 3%, 4%. 0:09:48.570 --> 0:09:52.650 So, we're seeing some clients step back in. But really, Paul, 0:09:52.690 --> 0:09:56.130 it's the infrastructure battle. It's the nuts and bolts. It's 0:09:56.170 --> 0:09:58.890 the pipes, valves, the transmission lines, water system. 0:09:59.230 --> 0:09:59.970 It's old and dumb. 0:10:00.740 --> 0:10:01.080 U.S. 0:10:01.420 --> 0:10:03.939 That's where a lot of folks are putting new money 0:10:03.960 --> 0:10:04.199 to work. 0:10:04.280 --> 0:10:07.350 I'm sorry for this cliche question, but it almost works 0:10:07.490 --> 0:10:11.290 on an election day. In this great bull market, what 0:10:11.350 --> 0:10:12.140 inning are we in? 0:10:13.480 --> 0:10:15.800 Good question, Tom. I mean, the average bull market is 0:10:15.840 --> 0:10:18.560 five and a half years. So we're not there yet. 0:10:18.600 --> 0:10:21.829 We still got some runway, but we see a good 2027. 0:10:21.830 --> 0:10:24.010 I think it gets a little choppy in 2028 with 0:10:24.250 --> 0:10:26.230 the platform that the parties are going to run on. 0:10:26.610 --> 0:10:28.470 So I don't we have we some we have some 0:10:28.530 --> 0:10:29.010 runway here. 0:10:29.380 --> 0:10:30.170 Earnings are good. 0:10:30.480 --> 0:10:32.760 The economy is strong. And it takes, as you know, 0:10:33.040 --> 0:10:35.540 it takes a while to slow down the supertanker. It'll 0:10:35.580 --> 0:10:38.440 slow down, but the earnings outlook is still pretty robust. 0:10:38.620 --> 0:10:41.179 Tie in your economics here. Torsten Slack, Paul, what was 0:10:41.200 --> 0:10:42.700 the note from Torsten? 0:10:43.020 --> 0:10:45.660 You're saying that the earnings growth we're seeing here, the 0:10:45.700 --> 0:10:49.920 earnings growth we're seeing implies a 10% nominal GDP growth rate. 0:10:50.000 --> 0:10:53.580 That's like Banana Republic, just Bank of America. And folks, 0:10:53.660 --> 0:10:57.209 a heritage here on election day. A Bank of America, 0:10:57.280 --> 0:11:00.850 San Francisco. down to the Southern Combine. Have you ever 0:11:00.890 --> 0:11:04.569 been to Charlotte? They let you go there? Plenty of times. 0:11:04.630 --> 0:11:08.450 All the heritage of Boston and Brian Moynihan and Joe 0:11:08.510 --> 0:11:12.150 Quinlan in New York. I mean, truly, it's Bank of America. 0:11:12.170 --> 0:11:16.390 And just as simple as I can, we've never lived 0:11:16.429 --> 0:11:17.630 this nominal GDP. 0:11:18.559 --> 0:11:22.060 It's pretty robust, though. It is very robust. It's close. 0:11:22.120 --> 0:11:24.100 It's closer to 10 percent than 5 percent. I mean, 0:11:24.640 --> 0:11:25.719 I spent a lot. You know, I spent a lot 0:11:25.740 --> 0:11:26.760 of time between New York and L.A. 0:11:26.780 --> 0:11:28.510 I can't believe you just said that. I mean, but 0:11:29.090 --> 0:11:30.329 on the ground, Tom, between L.A. 0:11:30.730 --> 0:11:33.510 And New York, there's a lot of things happening, manufacturing, 0:11:33.550 --> 0:11:37.800 building out plants, hiring. We're seeing it. There's a tremendous, 0:11:37.820 --> 0:11:41.300 you know, when the heartland, you know, whether it's Kansas City, Chicago, Texas, 0:11:41.320 --> 0:11:43.340 you name it. Chattanooga you were just talking about. 0:11:43.900 --> 0:11:44.520 It's robust. 0:11:44.540 --> 0:11:51.840 Okay. Triangulate this. We've got what Bank of America observes robust, solid, etc. 0:11:52.520 --> 0:11:55.290 And then you've got an election where half of America's 0:11:55.350 --> 0:11:59.510 in a primal scream that they're not making it. Then 0:11:59.550 --> 0:12:03.710 triangulate that with the Fed. How does the Fed post-election 0:12:04.210 --> 0:12:06.790 prosecute 5%, 6%, 4% buoyant nominal GDP? 0:12:10.590 --> 0:12:12.910 They've got to thread that needle very carefully. That's what 0:12:13.110 --> 0:12:16.210 Chair Warsh is trying to work on. So maybe our 0:12:16.250 --> 0:12:19.940 team is expecting another rate hike in December, another one 0:12:19.980 --> 0:12:22.300 in March. You're just taking away the rate cuts from 2025. 0:12:22.300 --> 0:12:27.280 And we are seeing kind of normalization of the cost 0:12:27.340 --> 0:12:30.830 of capital, right? The cost of capital shouldn't be three below, 0:12:31.179 --> 0:12:32.569 and we don't think it's going to be six above. 0:12:33.010 --> 0:12:35.250 It's right in that kind of that more sweet spot now. 0:12:35.309 --> 0:12:37.130 So we've got to adjust to that and work that through. 0:12:37.450 --> 0:12:39.770 There's still a lot of foreign demand for our securities, 0:12:39.850 --> 0:12:42.270 our assets. So we're in, I wouldn't call it a 0:12:42.290 --> 0:12:44.849 sweet spot, Tom, but we're in a good spot relative 0:12:44.870 --> 0:12:46.530 to earnings and the economic outlook. 0:12:47.350 --> 0:12:49.750 One of the questions we get often is, can stocks 0:12:49.870 --> 0:12:53.000 work in a world where interest rates are, in fact, higher? 0:12:54.010 --> 0:12:55.730 And they're probably going to stay at this level, if 0:12:55.809 --> 0:12:59.150 not maybe even a little bit higher. Can stocks work. 0:12:58.990 --> 0:12:59.530 In that environment? 0:12:59.550 --> 0:13:02.930 For sure. We're seeing that because they're higher for the 0:13:03.010 --> 0:13:04.290 right reason. Right. 0:13:04.370 --> 0:13:06.990 I think, yes, yes, there's energy shock, but they're higher 0:13:07.030 --> 0:13:10.110 for the right reason. And that's nominal growth driving where 0:13:10.230 --> 0:13:13.010 there's income, where it's investment, U.S. 0:13:13.150 --> 0:13:16.750 And foreign. So it's they're rising. They're elevated here for 0:13:16.770 --> 0:13:17.410 the right reasons. 0:13:18.540 --> 0:13:23.030 Go ahead, Paul. Get one more in here. Let I sit. 0:13:23.130 --> 0:13:25.630 When you go to one of your private wealth offices 0:13:25.690 --> 0:13:28.570 around the country and you're in one of those conference 0:13:28.630 --> 0:13:31.890 rooms after cocktails, what's the first question that comes your way? 0:13:32.580 --> 0:13:32.880 AI. 0:13:34.400 --> 0:13:36.420 Is it going to take my job? Is it going 0:13:36.440 --> 0:13:39.280 to allegedly kill us? you know, what's the end game? 0:13:39.320 --> 0:13:41.459 That's the question is like, are we in, it's not, 0:13:41.540 --> 0:13:43.890 are we in a bubble? What's the end game? What is, 0:13:43.920 --> 0:13:46.240 what does 2028 look like 2029? 0:13:46.240 --> 0:13:50.119 Brian from Boston emails in, he says, ask Joe if 0:13:50.160 --> 0:13:51.760 he's using AI in his work. 0:13:51.900 --> 0:13:54.460 Of course. Yes, absolutely. 0:13:54.679 --> 0:13:56.699 Joe Quinlan, thank you so much. I love the cliche 0:13:56.720 --> 0:14:00.679 there for thread. The needle really looks so appropriate after 0:14:00.720 --> 0:14:03.480 this election day, Joe Quinlan there with the bank of America, 0:14:04.260 --> 0:14:09.840 private bank. Stay with us. More from Bloomberg Surveillance coming 0:14:09.940 --> 0:14:10.900 up after this. 0:14:18.190 --> 0:14:21.770 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:14:21.850 --> 0:14:25.030 weekday afternoons from 7 to 10 a.m. Eastern. Listen on 0:14:25.150 --> 0:14:28.390 Apple CarPlay and Android Auto with the Bloomberg Business app 0:14:28.620 --> 0:14:30.300 or watch us live on YouTube. 0:14:30.740 --> 0:14:34.700 Joining us now, the chief economist of SMBC, NICO Securities, 0:14:34.780 --> 0:14:37.580 is public service to the nation, as noted with the 0:14:37.640 --> 0:14:42.980 Trump administration as well. Define Livonia gridlock. 0:14:44.120 --> 0:14:50.350 LaVornia gridlock is the Democrats getting a blue tsunami, basically 0:14:50.370 --> 0:14:54.310 an effective wipeout, and the party believing it's got a 0:14:54.330 --> 0:14:56.660 mandate to govern in 28. 0:14:56.660 --> 0:14:58.700 Interesting. So how what are your views? 0:14:58.740 --> 0:15:01.080 I mean, given your experience, Joe, how do you think 0:15:01.100 --> 0:15:02.700 this is going to play out over the next 12, 0:15:02.700 --> 0:15:03.020 24 hours? 0:15:04.000 --> 0:15:04.620 Well, I don't. 0:15:04.960 --> 0:15:07.100 So the problem I have with the betting markets is 0:15:07.140 --> 0:15:10.040 I don't think they understand the the potential breadth and 0:15:10.080 --> 0:15:14.420 depth of a likely or highly likely Democrat victory. So, yes, 0:15:14.460 --> 0:15:17.570 the Democrats win the House, but they may have 235, 0:15:17.550 --> 0:15:23.489 240 seats. In the Senate, Democrats probably pick up at 0:15:23.550 --> 0:15:24.370 least six seats. 0:15:24.650 --> 0:15:24.930 Really? 0:15:25.450 --> 0:15:29.480 And people don't really understand that because, look, what happens 0:15:29.580 --> 0:15:32.780 is if you look at these localities, these districts, these states, 0:15:33.580 --> 0:15:36.930 they're highly predictive of other areas because of high correlation. 0:15:36.950 --> 0:15:37.630 So, for example. 0:15:38.860 --> 0:15:43.280 In a state like Kansas, which probably goes Democrat, as 0:15:43.300 --> 0:15:46.260 you know, you haven't had a Democrat win since 1932. 0:15:46.260 --> 0:15:47.920 So that's a farm state. 0:15:48.000 --> 0:15:50.400 So if you have a farm state, because they're mad 0:15:50.440 --> 0:15:53.920 at Trump, but understandably so, because of where diesel costs are. So, okay, 0:15:54.060 --> 0:15:57.000 then Iowa's in play. And then Nebraska's in play. Oh, 0:15:57.060 --> 0:16:00.420 and by the way, who's one of the biggest employers 0:16:00.580 --> 0:16:02.020 or an important player in Kansas? 0:16:02.320 --> 0:16:03.240 Oh, Bombardier. 0:16:03.820 --> 0:16:05.620 Bombardier. I thought you were going to say the Kansas 0:16:05.680 --> 0:16:06.740 City Chiefs. 0:16:06.880 --> 0:16:08.070 Yeah, no, no. 0:16:08.640 --> 0:16:10.940 I was going to make another comment, but I'll refrain. 0:16:11.660 --> 0:16:14.090 So why does that matter? Well, because the trade war 0:16:14.110 --> 0:16:17.370 with Canada. So, well, what state is very important there? 0:16:17.570 --> 0:16:18.410 Well, Michigan. 0:16:18.430 --> 0:16:20.950 Look what Roger said against the tariffs. So like Michigan's 0:16:21.010 --> 0:16:23.790 in play. LSA, I think, wins there. So it's a 0:16:23.850 --> 0:16:26.920 real mess. And a large of it, a lot of it, 0:16:26.990 --> 0:16:28.880 I think, was unfortunately itself inflicted. 0:16:29.750 --> 0:16:32.180 So let's assume that happens. 0:16:33.130 --> 0:16:37.040 Does economic policy, policy in general, change materially over the 0:16:37.060 --> 0:16:37.580 next couple of years? 0:16:37.600 --> 0:16:38.060 Well, you tell me. 0:16:38.080 --> 0:16:39.640 I'll throw a question back to you guys. How is 0:16:39.660 --> 0:16:42.340 the president going to react? Does he take accountability and 0:16:42.400 --> 0:16:43.910 responsibility for what's happened? 0:16:43.930 --> 0:16:46.790 Does he deflect? Does he do executive orders? 0:16:47.050 --> 0:16:48.850 Okay, we're going to stop the show right now. And 0:16:48.950 --> 0:16:52.130 for all of you around the world, Anybody of any 0:16:52.170 --> 0:16:56.450 walk of life absolutely thunderstruck yesterday by a president of 0:16:56.470 --> 0:16:59.780 the United States out by the reflecting pool, that huge 0:17:00.240 --> 0:17:04.260 magisterial body of water from the Lincoln Memorial. It's a 0:17:04.300 --> 0:17:07.760 generalization down to the Capitol. Joe LaVornia, this is a 0:17:07.820 --> 0:17:12.330 president who has people around him like you served. You 0:17:12.350 --> 0:17:14.629 took the pay cut. You went there. You worked the 0:17:14.630 --> 0:17:19.409 80 hours a week. What does his government look like today? 0:17:19.950 --> 0:17:24.710 after tomorrow? Does everybody exit like Joe Livonia exited? 0:17:24.970 --> 0:17:29.370 Well, to be fair, I work for Secretary Besson, who still, 0:17:29.410 --> 0:17:32.030 I think, has a very highly thought of view, at 0:17:32.070 --> 0:17:34.790 least among all the investors I talk to. And I 0:17:34.850 --> 0:17:37.530 wanted to work specifically in Treasury. And I did my 0:17:37.570 --> 0:17:39.330 term for less than a year with little kids. I 0:17:39.369 --> 0:17:43.030 wasn't going to be long. So my leaving was family related. 0:17:43.070 --> 0:17:45.970 And to the extent I can offer guidance and solace, 0:17:46.410 --> 0:17:47.300 I certainly would. 0:17:47.320 --> 0:17:48.970 Do you look for a huge turnover? 0:17:50.250 --> 0:17:54.810 Typically, you get turnover in a second term after the midterms, 0:17:54.890 --> 0:17:59.040 given the likely drubbing Republicans are going to get. 0:17:59.140 --> 0:18:04.210 Yes, I would expect major turnover. So. Changes in economic 0:18:04.250 --> 0:18:04.969 policy at all? 0:18:04.990 --> 0:18:08.080 Do you think that President Trump will be heading into tariffs, 0:18:08.100 --> 0:18:09.340 for example? 0:18:09.359 --> 0:18:11.959 Well, so I don't think the president's going to act 0:18:12.000 --> 0:18:14.300 like a lame duck. So he's got executive orders. He's 0:18:14.320 --> 0:18:17.510 got veto power. Who knows if we get involved in 0:18:17.530 --> 0:18:18.970 more geopolitical skirmishes? 0:18:19.470 --> 0:18:21.730 Does the U.S. consider, you know, upping the. 0:18:23.380 --> 0:18:26.379 The blockade against, say, Cuba or doing something there, but 0:18:26.580 --> 0:18:30.220 potentially militarily. Does the US talk again or the president 0:18:30.240 --> 0:18:31.620 talk again about annexing Greenland? 0:18:31.720 --> 0:18:33.580 I don't know. I mean, it's certainly possible. 0:18:34.100 --> 0:18:36.399 I mean, as a risk manager and looking at markets, 0:18:36.420 --> 0:18:38.460 you've got to game theorize a whole lot of different 0:18:38.480 --> 0:18:41.480 scenarios that would not happen under, let's say, a more 0:18:41.530 --> 0:18:44.790 traditional president. So I don't know what happens. But to me, 0:18:44.850 --> 0:18:48.050 the gridlock is not good kind of gridlock. It's bad 0:18:48.070 --> 0:18:51.090 gridlock because the political divisions and divisiveness are worse. 0:18:51.720 --> 0:18:53.340 Things like shutdowns could be longer. 0:18:53.840 --> 0:18:55.929 We've got a debt ceiling that's going to break up 0:18:55.950 --> 0:18:56.890 the deal within the next year. 0:18:56.910 --> 0:18:59.129 That could be a lot worse. I mean, this is 0:18:59.150 --> 0:19:00.230 just not a pleasant picture. 0:19:00.369 --> 0:19:03.310 From where you sit, and as a student of American history, 0:19:03.350 --> 0:19:05.449 going back to the Bull Weevils, going back to the 0:19:05.510 --> 0:19:09.439 Blue Dogs, they got a fancy new name for conservative Democrats. 0:19:09.980 --> 0:19:14.880 What will be the power of Democrats elected by 52 0:19:14.880 --> 0:19:21.150 to 48 percent elections across the nation pockets of conservative 0:19:21.190 --> 0:19:26.230 Democrats that are going to say to the traditional liberal Democrats, 0:19:26.450 --> 0:19:28.570 you've got to be kidding me. Is that going to 0:19:28.609 --> 0:19:29.149 be a theme? 0:19:29.609 --> 0:19:30.150 It could be. 0:19:30.230 --> 0:19:33.909 I mean, the thing is, what I think could happen is, 0:19:33.990 --> 0:19:35.760 I actually think that Democrats are going to get more 0:19:35.800 --> 0:19:36.740 than 52 seats. 0:19:37.320 --> 0:19:39.060 I mean, 06 is a great baseline. 0:19:39.080 --> 0:19:44.560 If you look at presidential net approval ratings, enthusiasm, generic balloting, 0:19:44.920 --> 0:19:47.180 it suggests that Democrats should get at least six seats 0:19:47.600 --> 0:19:51.959 and 31 House seats. So, I think that's what you'll get, 0:19:52.000 --> 0:19:55.380 maybe even a bigger majority in the Senate. Democrats could 0:19:55.420 --> 0:19:56.540 take that as a mandate. 0:19:57.100 --> 0:19:59.740 Understandably so, and move far too far to the left. 0:20:00.160 --> 0:20:03.050 Not unlike, Tom, what the Tea Party was back in 0:20:03.050 --> 0:20:06.270 2010 when they got 60 plus seats. And then the 0:20:06.290 --> 0:20:09.070 question is, OK, what happens in 28? Do the Democrats 0:20:09.109 --> 0:20:11.330 govern more from the center or from the fringe? 0:20:11.369 --> 0:20:11.909 That I don't know. 0:20:11.990 --> 0:20:14.970 I had the clearest memory. The only one that covered 0:20:14.970 --> 0:20:19.600 94 midterms was Dan Rather. Nobody else was on at 0:20:19.680 --> 0:20:23.200 nine o'clock at night for that monumental Newt Gingrich campaign. 0:20:24.660 --> 0:20:27.440 And the Republicans were all on the same page. Do you, 0:20:27.520 --> 0:20:30.940 a student of this, Joe LaVornia, do you see Democrats 0:20:31.180 --> 0:20:35.610 all on the same page in December of this year? 0:20:35.680 --> 0:20:37.210 I don't see it. No, I don't see it. 0:20:37.310 --> 0:20:39.730 But that doesn't mean the party is going to necessarily 0:20:39.770 --> 0:20:41.710 be as fractured as one might think. I think there's 0:20:41.730 --> 0:20:44.550 going to be competing elections. narratives to see who, you know, 0:20:44.570 --> 0:20:46.150 who's going to run in 28. And by the way, 0:20:46.790 --> 0:20:49.850 we should have a good sense by Super Bowl, by Valentine's, 0:20:50.310 --> 0:20:52.709 who's running on both sides. And then we'll see who 0:20:52.730 --> 0:20:54.340 they are. If it's someone, you know, there's a whole 0:20:54.359 --> 0:20:57.180 list of Democrats that could run. Some are very centrist. 0:20:57.820 --> 0:20:58.620 I got to stop. 0:20:58.680 --> 0:21:01.540 This is bad form. I feel like Dustin Hoffman in Hook. 0:21:01.940 --> 0:21:06.440 I need the outfit in that. How impolite of meta 0:21:06.500 --> 0:21:13.530 platforms to announce a five-part U.S. dollar bond offering on 0:21:13.590 --> 0:21:14.470 Election Day. 0:21:14.590 --> 0:21:14.830 Sure. 0:21:14.910 --> 0:21:17.520 That's bad form. Why not, though? Didn't they do one 0:21:17.600 --> 0:21:18.280