1 00:00:01,360 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Swiney, along 2 00:00:04,120 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:21,239 Speaker 1: and on Bloomberg dot com. Prior to the pandemic, I 7 00:00:21,280 --> 00:00:24,040 Speaker 1: think we were kind of used to seeing dollar strength 8 00:00:24,040 --> 00:00:26,680 Speaker 1: here talking about the d X Y index trading at 9 00:00:26,760 --> 00:00:30,720 Speaker 1: or near that level. Since over the last several months, 10 00:00:30,720 --> 00:00:33,320 Speaker 1: pulled back to get a sense of where currencies are 11 00:00:33,360 --> 00:00:36,239 Speaker 1: headed going forward. We love to chat with Dr Win Thin, 12 00:00:36,640 --> 00:00:40,000 Speaker 1: global head currency strategy for Blown Brothers Harriman, based in 13 00:00:40,040 --> 00:00:42,920 Speaker 1: New York City. Uh. Dr Thin, thanks so much for 14 00:00:43,040 --> 00:00:44,800 Speaker 1: joining us here. Give us your sense of kind of 15 00:00:44,840 --> 00:00:47,680 Speaker 1: the green back here versus some of the major trading 16 00:00:47,720 --> 00:00:50,960 Speaker 1: currencies here as we think about lower interest rates for longer, 17 00:00:51,080 --> 00:00:54,319 Speaker 1: the pandemic impact slower economic growth, How are you kind 18 00:00:54,320 --> 00:00:57,760 Speaker 1: of positioning currencies right here? Sure? Well, first of all, 19 00:00:57,800 --> 00:00:59,320 Speaker 1: thank you very much for having me if it's always 20 00:00:59,320 --> 00:01:02,080 Speaker 1: a pleasure. Um, so, you know, if you do a 21 00:01:02,600 --> 00:01:05,760 Speaker 1: uh look at the chart, weekly chart going back to 22 00:01:05,920 --> 00:01:09,200 Speaker 1: about two thousand and fifteen, you'll see the dollars pretty 23 00:01:09,240 --> 00:01:12,800 Speaker 1: much within those ranges. UM, you know, just as recently 24 00:01:12,840 --> 00:01:16,480 Speaker 1: as uh, you know, March April, we're at you know, 25 00:01:16,520 --> 00:01:18,600 Speaker 1: pretty much at the top of that range. So the 26 00:01:18,680 --> 00:01:21,840 Speaker 1: speed of its decline has been has been noteworthy. UM. 27 00:01:21,880 --> 00:01:25,160 Speaker 1: To me, it reflects two things. One is the aggressive 28 00:01:25,200 --> 00:01:30,000 Speaker 1: FED easing zero rates and incredibly um fast expansion of 29 00:01:30,080 --> 00:01:34,760 Speaker 1: balance year date, the balance she has expanded, uh, and 30 00:01:34,800 --> 00:01:38,360 Speaker 1: now we've got some worries about reopening UM here in 31 00:01:38,440 --> 00:01:40,600 Speaker 1: two three with the virus numbers still so bad. So 32 00:01:40,640 --> 00:01:43,160 Speaker 1: those two things have really worked against dollar. To me, though, 33 00:01:43,200 --> 00:01:46,160 Speaker 1: and I think I've mentioned this on on UM several 34 00:01:46,160 --> 00:01:48,800 Speaker 1: times before, I still view this as a cyclical downturn, 35 00:01:48,920 --> 00:01:52,080 Speaker 1: that is, UM, you know, between the monetary policy cycle 36 00:01:52,120 --> 00:01:57,120 Speaker 1: and economic cycle. The cycle, the cyclical factors are against 37 00:01:57,160 --> 00:01:58,560 Speaker 1: the dollar. And of course you have a lot of 38 00:01:58,600 --> 00:02:01,440 Speaker 1: experts out there saying that that little decline, but I 39 00:02:01,480 --> 00:02:03,040 Speaker 1: think it's way too only to say that right now. 40 00:02:03,040 --> 00:02:06,440 Speaker 1: I I like, UM, I think the dollar will weaken 41 00:02:06,680 --> 00:02:08,520 Speaker 1: into going into two four, but we quick bottom and 42 00:02:08,520 --> 00:02:16,240 Speaker 1: two fourth the virus numbers start to get better. Well, 43 00:02:16,280 --> 00:02:17,840 Speaker 1: I was just gonna say, what does that mean for 44 00:02:17,880 --> 00:02:20,840 Speaker 1: the other currencies? Is there going to be debasement around 45 00:02:20,919 --> 00:02:25,640 Speaker 1: the globe or you know what happens? Well, a couple 46 00:02:25,639 --> 00:02:29,000 Speaker 1: of things. I think, Um, you know, you can't have 47 00:02:29,040 --> 00:02:31,480 Speaker 1: everyone have a weaker currency, right so on the other 48 00:02:31,480 --> 00:02:33,440 Speaker 1: step side of the coin with your dollar needs strong 49 00:02:33,520 --> 00:02:36,639 Speaker 1: currency elsewhere. Now right now it's being expressed a lot 50 00:02:36,960 --> 00:02:40,360 Speaker 1: in the currencies in Europe, Sterling in the euro as 51 00:02:40,360 --> 00:02:45,040 Speaker 1: well as emerging markets. So at this point, um, the 52 00:02:45,120 --> 00:02:48,560 Speaker 1: officials in Europe aren't really complaining about the strong currency. 53 00:02:48,560 --> 00:02:51,160 Speaker 1: At this point, Um, they're seeing you know, they're remember 54 00:02:51,200 --> 00:02:52,560 Speaker 1: there are there are a couple months ahead of us. 55 00:02:52,639 --> 00:02:54,800 Speaker 1: They've been able to reopen albeit it uh, you know, 56 00:02:54,840 --> 00:02:57,200 Speaker 1: it's body and they know having reverse from time to time. 57 00:02:57,240 --> 00:02:59,320 Speaker 1: But they're a little bit further along in the economic cycles, 58 00:02:59,400 --> 00:03:00,520 Speaker 1: so I think they can have a bit of a 59 00:03:00,720 --> 00:03:05,200 Speaker 1: stronger currency. So you know, long run the dollar, weaker 60 00:03:05,280 --> 00:03:07,720 Speaker 1: dollar could help the the U s econmy But really 61 00:03:07,800 --> 00:03:10,080 Speaker 1: what I've been focusing on is with the loss of 62 00:03:10,080 --> 00:03:12,200 Speaker 1: fiscal stillness. You know, I've seen studies that say that 63 00:03:12,720 --> 00:03:15,919 Speaker 1: you know, the the enhanced the employment benefits was pumping 64 00:03:15,960 --> 00:03:18,359 Speaker 1: somewhere anywhere between two and fifty billion to a trillion 65 00:03:18,360 --> 00:03:20,720 Speaker 1: dollars where the steam was in the economy, and that's 66 00:03:20,840 --> 00:03:23,080 Speaker 1: being a fell off a cliff. Um. The sooner we 67 00:03:23,120 --> 00:03:25,280 Speaker 1: get that started, the better. But that's why I'm a 68 00:03:25,280 --> 00:03:27,679 Speaker 1: bit negative on the dollar in the US economy. Two three, 69 00:03:27,680 --> 00:03:31,040 Speaker 1: we have massive headwinds really between the virus and the 70 00:03:31,240 --> 00:03:35,880 Speaker 1: loss of fiscal stimulus. So are you not particularly optimistic 71 00:03:35,920 --> 00:03:40,960 Speaker 1: that Congress will deliver a fourth round of stimulus? Well, okay, 72 00:03:41,000 --> 00:03:43,560 Speaker 1: I was confident a couple of weeks going on because 73 00:03:43,560 --> 00:03:45,240 Speaker 1: I thought, okay, look, we don election coming out. Who 74 00:03:45,320 --> 00:03:47,920 Speaker 1: wants to play these games? But both sides of dug 75 00:03:47,960 --> 00:03:51,720 Speaker 1: in much longer I expected. So at this point, Um, 76 00:03:51,760 --> 00:03:53,240 Speaker 1: I think we'll know more with the weekend. I'm not 77 00:03:53,240 --> 00:03:55,440 Speaker 1: sure if you've following it, but the House was called 78 00:03:55,480 --> 00:03:59,680 Speaker 1: back for emergency stat sessions to vote on postal UH 79 00:04:00,080 --> 00:04:03,280 Speaker 1: service aid and protections. And I know that some of 80 00:04:03,320 --> 00:04:06,560 Speaker 1: the in some of the people in um speaker closest 81 00:04:06,600 --> 00:04:09,880 Speaker 1: caucus been pushing her to use this opportunity to restart 82 00:04:09,920 --> 00:04:13,080 Speaker 1: the talks. So you know, it's it's a fluid situation, 83 00:04:13,120 --> 00:04:16,359 Speaker 1: but you know that's feeling that they'll eventually get something past, 84 00:04:16,880 --> 00:04:20,720 Speaker 1: probably something watered down. Um, so again another reason to 85 00:04:20,760 --> 00:04:22,480 Speaker 1: be a little bit cautious about the U. S. Economy. 86 00:04:22,560 --> 00:04:24,640 Speaker 1: But um, you know this is not the time we're 87 00:04:24,640 --> 00:04:27,520 Speaker 1: playing politics right now. When I've been curious for several 88 00:04:27,560 --> 00:04:32,040 Speaker 1: weeks now about something slightly you know, it's definitely not 89 00:04:32,160 --> 00:04:34,800 Speaker 1: completely dull or related. And you used to cover emergin 90 00:04:34,839 --> 00:04:36,680 Speaker 1: markets and frontier markets and so on, so I know 91 00:04:36,760 --> 00:04:39,880 Speaker 1: you know all about currencies in for example, the Middle East, 92 00:04:40,240 --> 00:04:43,040 Speaker 1: where we already had a bit of a diary situation 93 00:04:43,120 --> 00:04:47,600 Speaker 1: before the very route explosion. I'm curious, how are all 94 00:04:47,640 --> 00:04:51,680 Speaker 1: these countries managing given that there is things to do 95 00:04:51,720 --> 00:04:55,880 Speaker 1: with each one that's making life more difficult, and coronavirus 96 00:04:55,880 --> 00:04:59,840 Speaker 1: acause all of them. Yes, so it's funny you used 97 00:04:59,800 --> 00:05:03,440 Speaker 1: to I just part out a piece yesterday basically pointing 98 00:05:03,440 --> 00:05:06,359 Speaker 1: out that look, with zero rates everywhere, you know, no 99 00:05:06,360 --> 00:05:07,719 Speaker 1: one has any cover. You know, I used to have 100 00:05:07,800 --> 00:05:09,479 Speaker 1: no If you know, Brazili had rates around towel percent 101 00:05:09,520 --> 00:05:11,440 Speaker 1: that would give you a litit of cover, you know, say, okay, 102 00:05:11,440 --> 00:05:13,080 Speaker 1: well I'm not crazy what's going on in Brazil, but 103 00:05:13,400 --> 00:05:16,040 Speaker 1: I get twelve percent yield That I'll go Now, we're 104 00:05:16,080 --> 00:05:18,360 Speaker 1: almost all at zero or near zero rates, so we 105 00:05:18,440 --> 00:05:19,960 Speaker 1: could go back to the square one where we're all 106 00:05:20,000 --> 00:05:22,479 Speaker 1: focusing on the fundamentals. Um. And so I think when 107 00:05:22,560 --> 00:05:25,599 Speaker 1: he continued differentiation across e m uh, you know, Brazil, 108 00:05:25,720 --> 00:05:27,680 Speaker 1: South Africa, Turkey though, those are all the high heels 109 00:05:27,680 --> 00:05:29,240 Speaker 1: that used to sort of benefit and risk on and 110 00:05:29,240 --> 00:05:32,320 Speaker 1: they just have it. Um. So my advice to emergent 111 00:05:32,320 --> 00:05:35,159 Speaker 1: market investors is just due to homework. Um. You know, 112 00:05:35,240 --> 00:05:37,360 Speaker 1: I think we're we're past the worst, but you know 113 00:05:37,720 --> 00:05:40,520 Speaker 1: we're not. We're past the stage where everyone's buying em 114 00:05:40,520 --> 00:05:43,240 Speaker 1: Willy NAILI right, it's very differentiated, and I think that's 115 00:05:43,320 --> 00:05:46,520 Speaker 1: virgency can continue. But if you don't mind, though, just 116 00:05:46,880 --> 00:05:50,760 Speaker 1: commenting on how these countries will survive this. So, yes, 117 00:05:50,880 --> 00:05:54,960 Speaker 1: the opportunities for investors maybe, but what are these countries 118 00:05:55,000 --> 00:05:57,720 Speaker 1: all going to sort of experience founding an extreme poverty 119 00:05:57,760 --> 00:06:03,359 Speaker 1: at this point? Well that yeah, that's the big question. Um. 120 00:06:03,400 --> 00:06:05,320 Speaker 1: You know, I think that the obviously the more developed 121 00:06:05,320 --> 00:06:07,600 Speaker 1: economies are are will be okay. You know, I'm not 122 00:06:07,640 --> 00:06:11,680 Speaker 1: worried about what's going on in Eastern Europe. Obviously Asia 123 00:06:11,800 --> 00:06:14,839 Speaker 1: much more, much better position. But yes, South, you know, 124 00:06:15,120 --> 00:06:19,080 Speaker 1: I think Africa and parts of um, you know, parts 125 00:06:19,120 --> 00:06:21,640 Speaker 1: of South America are are are really struggling. I think 126 00:06:21,640 --> 00:06:23,120 Speaker 1: that's why the I m F and World Bank of 127 00:06:23,320 --> 00:06:25,640 Speaker 1: have really been much open up the floodgates. So look, 128 00:06:25,680 --> 00:06:28,839 Speaker 1: forget about you know, conditionality, forget about you know, reformers. 129 00:06:28,880 --> 00:06:30,800 Speaker 1: We're just giving you money to to sort of get 130 00:06:30,800 --> 00:06:33,080 Speaker 1: through this. Um. You know, for a lot of these countries, 131 00:06:33,080 --> 00:06:35,160 Speaker 1: you know, especially the Middle least higher oil crisis would 132 00:06:35,200 --> 00:06:38,440 Speaker 1: be a big plus. UM and you know, they stabilized. 133 00:06:38,480 --> 00:06:40,080 Speaker 1: But you know, I think there's still some concerns about 134 00:06:40,120 --> 00:06:42,560 Speaker 1: the global economy. You know, I think China's doing okay, 135 00:06:42,600 --> 00:06:45,520 Speaker 1: but um, you know, there's still it's it's pretty clear 136 00:06:45,520 --> 00:06:46,880 Speaker 1: that this is not gonna be that the Class D 137 00:06:47,040 --> 00:06:48,800 Speaker 1: shape of cover. We you you know, we're gonna take like 138 00:06:48,839 --> 00:06:51,920 Speaker 1: sort of it's more like two steps forward, one step back. UM. 139 00:06:52,000 --> 00:06:54,680 Speaker 1: And that's that's that's gonna be tough. And I think, uh, 140 00:06:54,720 --> 00:06:56,600 Speaker 1: you know, the weaker links in the E M are 141 00:06:56,680 --> 00:07:01,040 Speaker 1: certainly gonna stuffer. Dr Win real quick thirty skins Japan, 142 00:07:01,040 --> 00:07:04,080 Speaker 1: how do you feel about the end right here? Well, 143 00:07:04,560 --> 00:07:07,400 Speaker 1: Japan economy wises it's been one of the LAGOD that's 144 00:07:07,400 --> 00:07:10,160 Speaker 1: it's actually even underploying the US that's been very, very disappointing. 145 00:07:10,160 --> 00:07:12,640 Speaker 1: In two three you have to reimpos some lockdown, but 146 00:07:12,680 --> 00:07:15,520 Speaker 1: even before that the recovery has been very spotty. So 147 00:07:15,760 --> 00:07:18,800 Speaker 1: I look for another umlug of stimulus. You know, obvious 148 00:07:18,880 --> 00:07:21,880 Speaker 1: popular areas has been plummeting, so I think we've got 149 00:07:21,840 --> 00:07:25,200 Speaker 1: another slug of fiscal stimus. Banks Japan hold given this 150 00:07:25,400 --> 00:07:27,320 Speaker 1: um sort of you know, risk on, risk off, and 151 00:07:27,360 --> 00:07:29,880 Speaker 1: I think Doligans having trouble really breaking about one those six, 152 00:07:30,000 --> 00:07:32,200 Speaker 1: So it's gonna be pi stetins one or four, one 153 00:07:32,280 --> 00:07:34,800 Speaker 1: or six rangs for a while. Dr Winton, thank you 154 00:07:34,880 --> 00:07:37,240 Speaker 1: so much for joining us. Dr Winton, global head of 155 00:07:37,240 --> 00:07:40,560 Speaker 1: Currency Strategy at Brown Brothers Harriman UH based in New 156 00:07:40,640 --> 00:07:44,520 Speaker 1: York City, which appreciate on getting his thoughts on currency. 157 00:07:45,840 --> 00:07:48,640 Speaker 1: Chris Lou served as Deputy Secretary of Labor during the 158 00:07:48,680 --> 00:07:52,520 Speaker 1: Alhama administration. He was a delegate to this week's Democratic Convention. 159 00:07:52,840 --> 00:07:55,520 Speaker 1: He is now Senior Fellow at the University of Virginia 160 00:07:55,680 --> 00:07:59,200 Speaker 1: Miller Center. Chris, thanks for joining. So it was a 161 00:07:59,280 --> 00:08:03,320 Speaker 1: very emotive speech. It was a very calm and I 162 00:08:03,360 --> 00:08:07,320 Speaker 1: guess an effort being uplifting type of speech. But what 163 00:08:07,400 --> 00:08:10,400 Speaker 1: about policy? When do we hear what Joe Biden's policies 164 00:08:10,440 --> 00:08:16,640 Speaker 1: are on everything from healthcare to schools to coronavirus. Well, 165 00:08:16,680 --> 00:08:19,320 Speaker 1: I think you heard a lot last night about how 166 00:08:19,360 --> 00:08:22,480 Speaker 1: he would deal with a coronavirus pandemic. And I think 167 00:08:22,680 --> 00:08:25,400 Speaker 1: over the last a couple of weeks he's been doing 168 00:08:25,400 --> 00:08:28,360 Speaker 1: a series of policy addresses, not just on healthcare, but 169 00:08:28,440 --> 00:08:30,880 Speaker 1: I saw the economy as well. You know, last night speech, 170 00:08:30,880 --> 00:08:34,480 Speaker 1: in my mind, was last about policy than about values. Uh, 171 00:08:34,679 --> 00:08:37,000 Speaker 1: you know, his goal was the vice president's goal was 172 00:08:37,080 --> 00:08:40,800 Speaker 1: to convey a positive message, a unifying message. You know. 173 00:08:40,800 --> 00:08:43,640 Speaker 1: I thought he did a nice job of weaving in 174 00:08:43,720 --> 00:08:47,360 Speaker 1: his own biography and how his biography shapes the way 175 00:08:47,400 --> 00:08:49,520 Speaker 1: that he looks at the country and he looks at government. 176 00:08:49,600 --> 00:08:52,439 Speaker 1: So I do think you'll see more of those policy rollouts. 177 00:08:52,480 --> 00:08:54,680 Speaker 1: But I candidly, you know, I don't know that this 178 00:08:54,800 --> 00:08:57,240 Speaker 1: election is really going to turn on policy one way 179 00:08:57,320 --> 00:09:00,400 Speaker 1: or another. All right, Chris, So if it's not necessarily 180 00:09:00,400 --> 00:09:03,400 Speaker 1: going to turn on policy, what message do you think 181 00:09:03,480 --> 00:09:06,679 Speaker 1: or what strate did you expect the Democrats not just 182 00:09:06,800 --> 00:09:09,040 Speaker 1: for the presidency but up and down ticket to really 183 00:09:09,040 --> 00:09:12,200 Speaker 1: focus on this election season. Well, look, I mean, and 184 00:09:12,240 --> 00:09:14,680 Speaker 1: this is not surprising when you've got an incumbent on 185 00:09:14,720 --> 00:09:17,920 Speaker 1: the ballot. It really is a referendum on Donald Trump. 186 00:09:17,960 --> 00:09:23,120 Speaker 1: And where Democrats are aiming is using the coronavirus crisis 187 00:09:23,320 --> 00:09:26,559 Speaker 1: as an example of the failed leadership of this administration. 188 00:09:26,600 --> 00:09:28,800 Speaker 1: And you know, obviously there's a lot of other things 189 00:09:28,800 --> 00:09:31,959 Speaker 1: they can point to, both domestically and h and overseas, 190 00:09:32,000 --> 00:09:34,560 Speaker 1: but that that's sort of what they're holding up as 191 00:09:34,880 --> 00:09:37,760 Speaker 1: the prime example. You know. Look, they will obviously have 192 00:09:37,920 --> 00:09:41,920 Speaker 1: opportunities to contrast on things like healthcare, where Democrats have 193 00:09:42,000 --> 00:09:45,600 Speaker 1: a big political advantage, particularly with the Supreme Court considering 194 00:09:45,640 --> 00:09:48,000 Speaker 1: the fate of the Affordable Care Act. But really they're 195 00:09:48,040 --> 00:09:51,560 Speaker 1: pointing the straight up Donald Trump and asking voters do 196 00:09:51,600 --> 00:09:54,760 Speaker 1: you want four more years of him? How do you 197 00:09:54,760 --> 00:09:57,320 Speaker 1: think that he did last night in the sense of 198 00:09:57,360 --> 00:10:01,920 Speaker 1: appearing fully with those young vital you know, on somebody 199 00:10:01,960 --> 00:10:05,280 Speaker 1: that you could debate. You know, I look, I I've 200 00:10:05,679 --> 00:10:08,680 Speaker 1: known the Vice President for over ten years. I worked 201 00:10:08,720 --> 00:10:10,240 Speaker 1: closely with him in the White House, and I've seen 202 00:10:10,320 --> 00:10:12,560 Speaker 1: him give a lot of speeches. You know, this was 203 00:10:12,760 --> 00:10:15,520 Speaker 1: hands down the best speech I've seen him give. Um, 204 00:10:15,559 --> 00:10:18,040 Speaker 1: it was a different Joe Biden than I think people 205 00:10:18,200 --> 00:10:22,360 Speaker 1: remember from ten years ago. Uh, he's more mature, he's 206 00:10:22,400 --> 00:10:25,840 Speaker 1: more calm, he's more of a statesman. Like you know, 207 00:10:26,000 --> 00:10:29,520 Speaker 1: earlier in his tenure, the Vice President did have a 208 00:10:29,720 --> 00:10:31,440 Speaker 1: you know, a tendency to kind of go off track 209 00:10:31,480 --> 00:10:34,560 Speaker 1: a little bit. Obviously, you know, in a prepared speech 210 00:10:34,640 --> 00:10:37,400 Speaker 1: like this, Um, it's easier to sort of stay focused. 211 00:10:37,440 --> 00:10:39,600 Speaker 1: But Yeah, obviously a huge challenge is going to be 212 00:10:40,120 --> 00:10:43,920 Speaker 1: in the debates coming up starting in September. Hey, how 213 00:10:43,920 --> 00:10:47,040 Speaker 1: about christ As we think about down tickets, think about 214 00:10:47,040 --> 00:10:52,640 Speaker 1: the Senate. What's the expectation, um about the Senate? Can 215 00:10:52,760 --> 00:10:55,400 Speaker 1: the Democrats? They did? The Democrats feel that they can 216 00:10:55,679 --> 00:10:58,600 Speaker 1: really take back the Senate. You know, I think they 217 00:10:58,600 --> 00:11:00,319 Speaker 1: really do. And I think that was one of the 218 00:11:00,440 --> 00:11:04,080 Speaker 1: overum writing themes of the convention is to have really 219 00:11:04,120 --> 00:11:06,440 Speaker 1: kind of a big ticket, a big tent, which is 220 00:11:06,440 --> 00:11:09,400 Speaker 1: why you saw everyone from you know, John Kasik to 221 00:11:09,520 --> 00:11:12,800 Speaker 1: Bernie Sanders and everyone in between coming together. And I 222 00:11:12,840 --> 00:11:14,599 Speaker 1: think when you look at the kind of races that 223 00:11:14,640 --> 00:11:19,080 Speaker 1: are being run in places like Colorado, Arizona, North Carolina, UM, 224 00:11:19,120 --> 00:11:21,120 Speaker 1: they're really kind of focused on the bread and butter 225 00:11:21,200 --> 00:11:24,120 Speaker 1: issues and not just healthcare, but you know the economy 226 00:11:24,160 --> 00:11:27,000 Speaker 1: as well. And again so I think, you know, having 227 00:11:27,200 --> 00:11:29,800 Speaker 1: this big ticket approach at the top, I think helps 228 00:11:29,840 --> 00:11:33,679 Speaker 1: a lot of these um down ticket races, especially when 229 00:11:33,720 --> 00:11:39,720 Speaker 1: you start to get into places like Iowa, potentially Georgia, Montana, 230 00:11:39,760 --> 00:11:42,960 Speaker 1: which are reddish states. And I think having that big 231 00:11:42,960 --> 00:11:45,199 Speaker 1: tent approach is going to be helpful to those Democratic 232 00:11:45,240 --> 00:11:49,840 Speaker 1: candidates that said Ms McConnell will do everything in his 233 00:11:49,960 --> 00:11:53,040 Speaker 1: power and I mean everything and his power to have 234 00:11:53,200 --> 00:11:56,480 Speaker 1: that not happen. Will he be able to stop, as 235 00:11:56,520 --> 00:12:00,280 Speaker 1: you know, using any kind of stratagy? Do you do 236 00:12:00,320 --> 00:12:03,320 Speaker 1: you think, Chris Well, look, I mean we all should 237 00:12:03,320 --> 00:12:05,960 Speaker 1: be concerned about what's happening with the Post Office right 238 00:12:06,000 --> 00:12:08,120 Speaker 1: now and their hearings going on today and Monday. To 239 00:12:08,200 --> 00:12:10,559 Speaker 1: look at what all of that means. You know, people 240 00:12:10,640 --> 00:12:12,320 Speaker 1: need to come up with the strategy of how they're 241 00:12:12,320 --> 00:12:14,640 Speaker 1: going to vote. Think broadly in terms of where MITTI 242 00:12:14,720 --> 00:12:16,880 Speaker 1: connell is. Yeah, I obviously he will try to do 243 00:12:16,920 --> 00:12:20,400 Speaker 1: anything as well Democrats, but ultimately these kind of elections 244 00:12:20,400 --> 00:12:23,240 Speaker 1: tend to kind of go in waves and and ultimately 245 00:12:23,320 --> 00:12:26,800 Speaker 1: it's where the president's approval rating is and what people's 246 00:12:27,040 --> 00:12:29,080 Speaker 1: perceptions of him are that I think will not only 247 00:12:29,080 --> 00:12:32,400 Speaker 1: affect his race, but also the battle for that Senate 248 00:12:32,440 --> 00:12:36,839 Speaker 1: and House as well. So, Chris Kamala Harris, what's your 249 00:12:36,840 --> 00:12:40,880 Speaker 1: take on the selection of the senator from California. Well, 250 00:12:40,920 --> 00:12:43,800 Speaker 1: I think, first of all, she's supremely qualified. She has 251 00:12:43,840 --> 00:12:46,559 Speaker 1: held you know, not only sederal, state and local offices. 252 00:12:46,800 --> 00:12:49,920 Speaker 1: But I think it's importantly the bidens. You provide jolt 253 00:12:50,000 --> 00:12:52,439 Speaker 1: of enthusiasm, and you've seen that of the past ten 254 00:12:52,520 --> 00:12:56,280 Speaker 1: days with the Democratic base. Now, probably it doesn't ultimately 255 00:12:56,360 --> 00:13:00,240 Speaker 1: translate into anywhere votes for the Biden Harris ticket, but 256 00:13:00,360 --> 00:13:02,160 Speaker 1: what it does do is get people were like, you 257 00:13:02,160 --> 00:13:03,880 Speaker 1: know what, I'll vote for Buyden, but I may not 258 00:13:04,120 --> 00:13:06,040 Speaker 1: you know, write a check. I may not go out 259 00:13:06,200 --> 00:13:08,880 Speaker 1: and uh um and help, you know, phone bank or 260 00:13:08,960 --> 00:13:10,920 Speaker 1: text bank. And I think it will get a lot 261 00:13:11,000 --> 00:13:13,200 Speaker 1: of people more energized. And I think that's the one 262 00:13:13,320 --> 00:13:18,160 Speaker 1: area demographically where you saw Biden's UH numbers kind of lagging. 263 00:13:18,240 --> 00:13:21,240 Speaker 1: It's among people of colors and younger voters. I think 264 00:13:21,280 --> 00:13:24,959 Speaker 1: that her selection really helps them on both of those fronts. Chris, 265 00:13:25,040 --> 00:13:27,280 Speaker 1: Right now, the president is obviously lagging in the polls, 266 00:13:27,480 --> 00:13:29,480 Speaker 1: but as I mean, as soon as we start to 267 00:13:29,480 --> 00:13:32,400 Speaker 1: hear Biden speaking a lot again, you know, do you 268 00:13:32,440 --> 00:13:37,480 Speaker 1: imagine that that gap will stay as wide? You know, 269 00:13:38,320 --> 00:13:40,640 Speaker 1: it's hard to say. Um, you know, I don't think 270 00:13:40,679 --> 00:13:43,559 Speaker 1: this is going to be a traditional campaign season. I mean, 271 00:13:43,640 --> 00:13:46,400 Speaker 1: I think what we've seen over the last couple of 272 00:13:46,440 --> 00:13:47,840 Speaker 1: months I think is what we're going to see over 273 00:13:47,880 --> 00:13:50,480 Speaker 1: the next couple of months. And I think that, certainly, 274 00:13:50,679 --> 00:13:52,840 Speaker 1: you know, makes it challenging for both of us to 275 00:13:52,880 --> 00:13:55,480 Speaker 1: get their message out. I also think we're operating and 276 00:13:56,040 --> 00:14:00,280 Speaker 1: I'm such a polarized electorate right now. They're really aren't 277 00:14:00,280 --> 00:14:03,120 Speaker 1: that many undecided voters, and you know, look at the margins. 278 00:14:03,400 --> 00:14:06,160 Speaker 1: You know, what happens to the Republican Convention, probably what 279 00:14:06,240 --> 00:14:09,080 Speaker 1: happens in the debates will have some difference. But people forget, 280 00:14:09,280 --> 00:14:11,559 Speaker 1: voting really starts pretty soon. You know. I live in 281 00:14:11,600 --> 00:14:14,920 Speaker 1: the state of Virginia, and our voting starts on September eighteenth, 282 00:14:15,000 --> 00:14:18,360 Speaker 1: and so a lot of these late developing um UM 283 00:14:18,559 --> 00:14:21,400 Speaker 1: issues or or or events may not have an effect 284 00:14:21,440 --> 00:14:24,520 Speaker 1: on a lot of people. Chris Leu, thanks so much 285 00:14:24,520 --> 00:14:27,840 Speaker 1: for joining us. We always appreciate getting your thoughts in perspective. 286 00:14:27,920 --> 00:14:32,520 Speaker 1: Chris lu Senior fellow at the University of Virginia Miller Center, 287 00:14:33,040 --> 00:14:37,800 Speaker 1: also a former member of former Deputy Secretary of Labor 288 00:14:37,880 --> 00:14:40,480 Speaker 1: during the Obama administration as well. It was also a 289 00:14:40,600 --> 00:14:44,400 Speaker 1: delegate to this week's Democratic conventioned so obviously has just 290 00:14:44,680 --> 00:14:47,160 Speaker 1: really deep knowledge there of what's going on within the 291 00:14:47,680 --> 00:14:50,480 Speaker 1: Democratic Party Vanni. But I think most Democrats feel like 292 00:14:50,720 --> 00:14:53,800 Speaker 1: they did a pretty good job this week. Absolutely, and 293 00:14:54,000 --> 00:14:56,520 Speaker 1: it'll be interesting to see the r n Z next 294 00:14:56,560 --> 00:14:59,360 Speaker 1: week after the virtual extravaganza that we saw this week, 295 00:14:59,400 --> 00:15:01,600 Speaker 1: and it was really pretty well done. I mean, I 296 00:15:01,600 --> 00:15:05,240 Speaker 1: think after a couple of small hiccups on Monday night, Tuesday, 297 00:15:05,240 --> 00:15:07,680 Speaker 1: Wednesday and Thursday, when pretty smoothly, and it must have 298 00:15:07,680 --> 00:15:11,120 Speaker 1: been a huge technical exercise. Yeah, and it's I was 299 00:15:11,200 --> 00:15:13,200 Speaker 1: kind of amazing, you know, having you know how it 300 00:15:13,200 --> 00:15:15,640 Speaker 1: went off so well from a technical perspective. So give 301 00:15:15,720 --> 00:15:20,640 Speaker 1: them credit to the text traders. What keeps them up 302 00:15:20,640 --> 00:15:23,840 Speaker 1: at night? What keeps them wondering about this market? Well, 303 00:15:23,920 --> 00:15:26,720 Speaker 1: let's ask somebody who studies them and is able to 304 00:15:26,760 --> 00:15:30,360 Speaker 1: tell us with absolute scientific accuracy what exactly it is 305 00:15:30,440 --> 00:15:33,360 Speaker 1: that motivates traders day by day these days. Randy Frederick 306 00:15:33,440 --> 00:15:36,080 Speaker 1: is VP of Trading and Derivatives at the Schwab Center 307 00:15:36,120 --> 00:15:39,240 Speaker 1: for Financial Research, more than twenty five years experienced in 308 00:15:39,280 --> 00:15:44,400 Speaker 1: equity markets. But also there's there's a Trader Pulse survey 309 00:15:44,440 --> 00:15:48,160 Speaker 1: that the Center puts out, and I'm very curious, Randy, 310 00:15:48,160 --> 00:15:50,880 Speaker 1: what is it saying these days? The markets keep going 311 00:15:51,000 --> 00:15:55,120 Speaker 1: up and yet you know, everything is crumbling all around us. Well, 312 00:15:55,160 --> 00:15:57,560 Speaker 1: the most recent survey data, which we just got back 313 00:15:57,600 --> 00:15:59,920 Speaker 1: a couple of days ago, follows the survey we do 314 00:16:00,040 --> 00:16:02,760 Speaker 1: it back in in March, and turns out that people 315 00:16:02,800 --> 00:16:06,520 Speaker 1: have become more bullish, which to some extent isn't terribly surprising. 316 00:16:06,520 --> 00:16:11,840 Speaker 1: I mean, the SPS rebounded since it bottomed on March then, 317 00:16:11,840 --> 00:16:14,600 Speaker 1: ASDEX is obviously doing even better than that. So what 318 00:16:14,640 --> 00:16:16,960 Speaker 1: we find is that momentum in the market oftentimes does 319 00:16:17,320 --> 00:16:19,560 Speaker 1: make people feel a little bit better, even though there 320 00:16:19,560 --> 00:16:21,760 Speaker 1: may be a better buying opportunity when it's at the bottom. 321 00:16:21,800 --> 00:16:23,920 Speaker 1: No one really knows that we're at the bottom until 322 00:16:24,000 --> 00:16:26,960 Speaker 1: we're already past it. So, Randy, one of the things 323 00:16:26,960 --> 00:16:29,360 Speaker 1: that you know, investors are asking themselves these days, and 324 00:16:29,400 --> 00:16:31,640 Speaker 1: we hear a lot from fund managers, is you know, 325 00:16:31,720 --> 00:16:34,600 Speaker 1: for the remainder of this year, perhaps going into if 326 00:16:34,640 --> 00:16:38,160 Speaker 1: you can kind of figure on some kind of the 327 00:16:38,520 --> 00:16:41,160 Speaker 1: other side of this pandemic is how to play it. 328 00:16:41,200 --> 00:16:43,400 Speaker 1: Do I stick with the growth stocks that have worked 329 00:16:43,440 --> 00:16:46,400 Speaker 1: for me, or do I maybe rotate into value? What's 330 00:16:46,440 --> 00:16:51,440 Speaker 1: your survey suggest Well, sometimes people do that. I mean, 331 00:16:51,480 --> 00:16:53,400 Speaker 1: the thing that's important to keep in mind is that 332 00:16:53,880 --> 00:16:56,320 Speaker 1: we don't really know when or if we're going to 333 00:16:56,400 --> 00:16:58,360 Speaker 1: get fully out of this. We we open, we have 334 00:16:58,480 --> 00:17:01,040 Speaker 1: plenty of reason to believe that will probably have a 335 00:17:01,120 --> 00:17:03,960 Speaker 1: vaccine at some point, maybe not until the beginning of 336 00:17:04,040 --> 00:17:07,080 Speaker 1: next year. UM, and if that happens, of course, what 337 00:17:07,440 --> 00:17:09,960 Speaker 1: has been the leader in the last bull market, which 338 00:17:10,040 --> 00:17:13,080 Speaker 1: lasted over eleven years, as you know, UM will likely 339 00:17:13,119 --> 00:17:16,720 Speaker 1: continue to be the leaders going forward. The one sector 340 00:17:16,760 --> 00:17:19,679 Speaker 1: that is difficult are the one area that I think 341 00:17:19,720 --> 00:17:21,840 Speaker 1: people need to be a little cautious about if they're 342 00:17:21,880 --> 00:17:24,760 Speaker 1: trying to position themselves for when we come out of 343 00:17:24,800 --> 00:17:28,240 Speaker 1: the virus is those stocks that have benefited primarily because 344 00:17:28,280 --> 00:17:31,560 Speaker 1: of it. UM. Obviously, most people are staying at home, 345 00:17:31,920 --> 00:17:35,080 Speaker 1: many people are working at home. Our leisure activities have 346 00:17:35,160 --> 00:17:38,639 Speaker 1: been curtailed dramatically, if not completely eliminated, and there are 347 00:17:38,640 --> 00:17:42,120 Speaker 1: a number of stocks that have been benefited from that 348 00:17:42,160 --> 00:17:45,960 Speaker 1: particular trend. While I do think that more people will 349 00:17:46,000 --> 00:17:48,160 Speaker 1: probably work at home after the virus than they ever 350 00:17:48,200 --> 00:17:50,520 Speaker 1: did previous to that, it's going to be nowhere near 351 00:17:50,520 --> 00:17:52,879 Speaker 1: what we see right now. So some of those that 352 00:17:52,880 --> 00:17:55,800 Speaker 1: have benefited greatly are likely to find a little bit 353 00:17:55,840 --> 00:17:57,800 Speaker 1: of softness, But the ones that have been the leaders 354 00:17:57,840 --> 00:18:01,760 Speaker 1: all along throughout the cyclical periods will likely continue to 355 00:18:01,800 --> 00:18:04,359 Speaker 1: be the leaders going forward once we get out of this. 356 00:18:06,119 --> 00:18:11,320 Speaker 1: What sectors will be the most volatile, do traders think? Well? 357 00:18:11,359 --> 00:18:14,080 Speaker 1: Traders have told us that they believe the volatility is 358 00:18:14,160 --> 00:18:18,600 Speaker 1: likely UM to get to be the most, probably in financials, 359 00:18:18,600 --> 00:18:21,040 Speaker 1: which is interesting and part of the reason I think. Obviously, 360 00:18:21,240 --> 00:18:25,000 Speaker 1: financials have been UM the second worse performer year to date, 361 00:18:25,040 --> 00:18:27,080 Speaker 1: and part of the reason for that is the fact 362 00:18:27,119 --> 00:18:30,080 Speaker 1: that UH interest rates are at zero, and as you recall, 363 00:18:30,200 --> 00:18:33,399 Speaker 1: j Palell said, not only UM are we not raising rates, 364 00:18:33,400 --> 00:18:36,080 Speaker 1: we're not even thinking about thinking about raising rates, And 365 00:18:36,119 --> 00:18:38,520 Speaker 1: of course that means not only are rates going to 366 00:18:38,560 --> 00:18:40,320 Speaker 1: be zero by the end of this year, they're likely 367 00:18:40,359 --> 00:18:42,000 Speaker 1: to be zero by the end of next year and 368 00:18:42,040 --> 00:18:46,000 Speaker 1: perhaps even time after that. Financials, for the most part, 369 00:18:46,160 --> 00:18:48,639 Speaker 1: make a large portion of their revenue from the interest 370 00:18:48,720 --> 00:18:50,639 Speaker 1: rate spread, and as the spread as the race go 371 00:18:50,760 --> 00:18:54,840 Speaker 1: down and stay at or near zero, that spread between 372 00:18:54,920 --> 00:18:58,240 Speaker 1: what they pay on balances and what they charge on 373 00:18:58,320 --> 00:19:00,679 Speaker 1: loans gets compressed, and so it is just simply not 374 00:19:00,720 --> 00:19:04,000 Speaker 1: the opportunity there. On the positive side, though, for financials, 375 00:19:04,160 --> 00:19:06,600 Speaker 1: when markets are volatile, trade volumes tend to go up, 376 00:19:06,600 --> 00:19:09,439 Speaker 1: and we have seen that here and recently so. But 377 00:19:09,440 --> 00:19:11,040 Speaker 1: the interest rate spreads a bigger piece of it, and 378 00:19:11,040 --> 00:19:13,199 Speaker 1: it affects a larger number of them. So that's the 379 00:19:13,200 --> 00:19:15,440 Speaker 1: one they're most concerned about. In the second one, um 380 00:19:15,560 --> 00:19:18,600 Speaker 1: is health care. Health Care has been a has been 381 00:19:18,640 --> 00:19:22,960 Speaker 1: the third best performer year to date, but healthcare always 382 00:19:23,119 --> 00:19:25,520 Speaker 1: has uncertainty when we have an election. You saw a 383 00:19:25,560 --> 00:19:28,800 Speaker 1: similar trend in healthcare prior to the two thousand and 384 00:19:28,840 --> 00:19:32,240 Speaker 1: sixteen election. There's a lot of discussion on both sides, 385 00:19:32,960 --> 00:19:35,800 Speaker 1: both from both candidates about how they would like to 386 00:19:35,920 --> 00:19:40,080 Speaker 1: change health care, and so it creates a level of uncertainty. 387 00:19:40,119 --> 00:19:41,679 Speaker 1: It's not so much that they're sure it's going to 388 00:19:41,680 --> 00:19:44,359 Speaker 1: go down. It's that they're not sure what's going to happen, 389 00:19:44,359 --> 00:19:47,159 Speaker 1: and that is actually the exact definition of volatility. We 390 00:19:47,200 --> 00:19:50,639 Speaker 1: know it's going to move, we just don't know which direction. So, Randy, 391 00:19:50,720 --> 00:19:53,760 Speaker 1: from your survey work, what's the economic backdrop that most 392 00:19:53,760 --> 00:19:57,920 Speaker 1: traders are kind of thinking about right now? Well, I mean, 393 00:19:57,960 --> 00:20:00,600 Speaker 1: we ask traders what they think the shape the recovery 394 00:20:00,640 --> 00:20:03,680 Speaker 1: will be. But sometimes that one's a little difficult to decipher. 395 00:20:03,680 --> 00:20:06,040 Speaker 1: And the reason I say that is that people have 396 00:20:06,080 --> 00:20:09,680 Speaker 1: a tendency to to equate the market with the economy, 397 00:20:09,800 --> 00:20:11,840 Speaker 1: and the two aren't the exact same thing. Even people 398 00:20:11,880 --> 00:20:13,520 Speaker 1: at the high levels of government do that on a 399 00:20:13,520 --> 00:20:18,200 Speaker 1: regular basis. I often remind people that the economy tends 400 00:20:18,240 --> 00:20:21,240 Speaker 1: to run about six to eighteen months behind the markets, 401 00:20:21,560 --> 00:20:23,960 Speaker 1: and you can see that regularly when you think about 402 00:20:24,000 --> 00:20:27,600 Speaker 1: back on March, most of the economic data was terrible. 403 00:20:27,600 --> 00:20:30,200 Speaker 1: In fact, much of it hasn't even hadn't even bottomed yet, 404 00:20:30,320 --> 00:20:32,760 Speaker 1: and yet the market had turned around and began to 405 00:20:32,800 --> 00:20:34,640 Speaker 1: move higher, and we're up, like I said, more than 406 00:20:35,840 --> 00:20:37,439 Speaker 1: you can go back to two thousand and nine, and 407 00:20:37,480 --> 00:20:39,320 Speaker 1: it was the same thing in March of two thousand 408 00:20:39,320 --> 00:20:41,240 Speaker 1: and nine. The market began to rebound. By the end 409 00:20:41,280 --> 00:20:44,200 Speaker 1: of the year, it was up, but the economic data 410 00:20:44,280 --> 00:20:47,600 Speaker 1: didn't recover until many months later, some of it even 411 00:20:47,640 --> 00:20:49,479 Speaker 1: a couple of years later. We didn't see a bottom 412 00:20:49,480 --> 00:20:52,520 Speaker 1: in the housing market until two thousand and eleven. So 413 00:20:52,600 --> 00:20:54,920 Speaker 1: it's a similar thing. So oftentimes, when you ask people 414 00:20:54,960 --> 00:20:57,320 Speaker 1: what they think about the economy, they actually give you 415 00:20:57,359 --> 00:21:00,159 Speaker 1: their response of what they think about the markets. And 416 00:21:00,200 --> 00:21:02,080 Speaker 1: that's partly because I can look at a chart of 417 00:21:02,119 --> 00:21:05,240 Speaker 1: the sp see a very distinctive v bottom on March 418 00:21:05,320 --> 00:21:08,680 Speaker 1: twenty three, but I can't see that in economic data. 419 00:21:09,119 --> 00:21:11,639 Speaker 1: I can see it in an individual economic report, but 420 00:21:11,680 --> 00:21:14,119 Speaker 1: there's so many of them. Right, But think about the 421 00:21:14,160 --> 00:21:17,320 Speaker 1: housing market, think about the labor market. We know the 422 00:21:17,400 --> 00:21:21,040 Speaker 1: labor market on on a weekly basis has bottomed, but 423 00:21:21,280 --> 00:21:23,640 Speaker 1: it's nowhere near where it was prior to the virus. 424 00:21:23,720 --> 00:21:25,640 Speaker 1: And the unemployment rates, on the other hand, which are 425 00:21:25,720 --> 00:21:28,120 Speaker 1: very lagging indicators, we won't see a bottom on those 426 00:21:28,160 --> 00:21:30,800 Speaker 1: for at least another month. Right. Hey, Randy, thanks so 427 00:21:30,880 --> 00:21:34,640 Speaker 1: much for joinings. We always appreciate getting this information. Randy Frederick, 428 00:21:34,720 --> 00:21:37,920 Speaker 1: vice president of Trading and Derivatives for the Schwab Center 429 00:21:37,960 --> 00:21:41,439 Speaker 1: for Financial Research, calling in from Austin, Texas. With that 430 00:21:41,560 --> 00:21:45,439 Speaker 1: survey work on what traders are looking for both in 431 00:21:45,520 --> 00:21:50,720 Speaker 1: terms of the economic outlook and markets. It is time 432 00:21:50,760 --> 00:21:54,320 Speaker 1: for Bloomberg Opinion. We welcome Timothy O'Brien, senior columnists for 433 00:21:54,400 --> 00:21:58,119 Speaker 1: Bloomberg Opinion. Tim, you're out with a fantastic come this morning, 434 00:21:58,119 --> 00:22:00,119 Speaker 1: which I read it first thing this morning. To any 435 00:22:00,160 --> 00:22:03,159 Speaker 1: three questions for the Postmaster General, I'd love for you 436 00:22:03,240 --> 00:22:05,160 Speaker 1: to kind of share with us kind of the real 437 00:22:05,240 --> 00:22:07,240 Speaker 1: important ones that you think need to be asked at 438 00:22:07,240 --> 00:22:09,720 Speaker 1: some point today. Uh. Well, I mean, I think the 439 00:22:09,760 --> 00:22:13,240 Speaker 1: most crucial thing to voters right now is is did 440 00:22:13,280 --> 00:22:17,080 Speaker 1: anyone in the federal government direct the Postmaster General Louis 441 00:22:17,119 --> 00:22:19,840 Speaker 1: de Joy to take steps that would have slowed down 442 00:22:20,320 --> 00:22:25,880 Speaker 1: mail delivery? Um? By intent? Um? Now. DeJoy has said 443 00:22:25,920 --> 00:22:29,960 Speaker 1: already in his testimony this morning that um, nothing he 444 00:22:30,000 --> 00:22:33,720 Speaker 1: did was designed to slow down mail delivery. It was 445 00:22:34,400 --> 00:22:36,720 Speaker 1: just part of his efforts to streamline the post office, 446 00:22:36,720 --> 00:22:39,199 Speaker 1: which he is said all along. But there's been a 447 00:22:39,200 --> 00:22:44,360 Speaker 1: lot of contradictory statements. Also in his testimony he said that, um, 448 00:22:44,400 --> 00:22:46,760 Speaker 1: you know, he promised midweek that he would roll back 449 00:22:46,800 --> 00:22:50,239 Speaker 1: some of these changes. Um. Uh. One of the most 450 00:22:50,280 --> 00:22:54,280 Speaker 1: significant is the removal or dismantling of big mail sorting machines. 451 00:22:54,680 --> 00:22:56,399 Speaker 1: But then he said in his testimony this morning that 452 00:22:56,400 --> 00:22:59,560 Speaker 1: he had no intention of putting those back, and yet 453 00:22:59,640 --> 00:23:02,119 Speaker 1: later his testimony he said he actually had no idea 454 00:23:02,720 --> 00:23:06,560 Speaker 1: how maintenance operations and those machines work anyways. It's handled regionally. 455 00:23:06,960 --> 00:23:11,320 Speaker 1: So um, you know, there's a House hearing today, are 456 00:23:11,400 --> 00:23:13,760 Speaker 1: Senate hearing today and a House hearing on Monday. I 457 00:23:13,760 --> 00:23:16,800 Speaker 1: would hope members of Congress in the House will take 458 00:23:16,840 --> 00:23:20,919 Speaker 1: some cues from the proceedings today to sharpen their questions 459 00:23:20,920 --> 00:23:23,800 Speaker 1: on Monday. Yes, you write him, the legitimacy of mail 460 00:23:23,840 --> 00:23:26,359 Speaker 1: and voting and the outcome of the presidential election hang 461 00:23:26,520 --> 00:23:30,240 Speaker 1: in the balance. The thing is, you have this man, 462 00:23:30,320 --> 00:23:33,560 Speaker 1: this Postmaster General, a generous political donor, not just a 463 00:23:33,600 --> 00:23:36,600 Speaker 1: president rum but also to other Republicans like Mitch McConnell, 464 00:23:36,600 --> 00:23:40,359 Speaker 1: for example. How motivated will Republicans in the Senate Committee 465 00:23:40,400 --> 00:23:43,720 Speaker 1: and the House Oversight Committee b to actually figuring out 466 00:23:43,720 --> 00:23:46,440 Speaker 1: what the truth is? Well, I mean that's always the 467 00:23:46,560 --> 00:23:49,159 Speaker 1: question in the hearing. Vanny, you know it's a Senate 468 00:23:49,240 --> 00:23:53,159 Speaker 1: led committee today, I mean, rather a Republican led Senate 469 00:23:53,200 --> 00:23:55,080 Speaker 1: Committee today, and they agreed to have the hearings, and 470 00:23:55,080 --> 00:23:58,240 Speaker 1: it's a bipartisan hearing and and there are robots questions 471 00:23:58,280 --> 00:24:02,440 Speaker 1: being asked. Um. But the main problem with these hearings 472 00:24:02,520 --> 00:24:06,760 Speaker 1: is sometimes legislators would rather grandstand than just actually prosecute 473 00:24:06,760 --> 00:24:09,840 Speaker 1: a case and ask a rapid fire round of yes 474 00:24:09,920 --> 00:24:13,879 Speaker 1: or no questions. I think for our business listeners, you know, 475 00:24:13,920 --> 00:24:16,160 Speaker 1: for our listeners who care about the vote. I mentioned 476 00:24:16,200 --> 00:24:19,080 Speaker 1: that asking about mail and bounting is an important question. 477 00:24:19,320 --> 00:24:22,320 Speaker 1: I think for our business listeners. Uh. There's been another 478 00:24:22,359 --> 00:24:24,960 Speaker 1: issue hanging over the Postal Service since the spring, is 479 00:24:25,000 --> 00:24:28,359 Speaker 1: to whether or not Trump is attacking the Post Office 480 00:24:28,840 --> 00:24:32,280 Speaker 1: and what it charges for package deliveries, specifically to target 481 00:24:32,320 --> 00:24:35,840 Speaker 1: companies like Amazon and other e commerce companies that rely 482 00:24:35,920 --> 00:24:39,080 Speaker 1: on the Postal Service to deliver packages. Um. There is 483 00:24:39,160 --> 00:24:42,840 Speaker 1: no proof that that package delill be the money loser 484 00:24:43,119 --> 00:24:46,359 Speaker 1: for the USPS. In fact, it's one of their bright spots. 485 00:24:46,359 --> 00:24:50,359 Speaker 1: It's a revenue builder and uh and and and it's profitable. 486 00:24:50,960 --> 00:24:53,760 Speaker 1: So they should just ask to Joy about that and 487 00:24:53,800 --> 00:24:56,639 Speaker 1: put that issue to rest because the wrong issues are 488 00:24:56,680 --> 00:24:58,560 Speaker 1: being put into play about what needs to be done 489 00:24:58,600 --> 00:25:01,880 Speaker 1: to fix the Post Office and tim there's probably I'm 490 00:25:01,880 --> 00:25:04,000 Speaker 1: not sure if it's a misperception, but a belief that 491 00:25:04,040 --> 00:25:07,240 Speaker 1: the postal service is a kind of similar to a 492 00:25:07,280 --> 00:25:10,240 Speaker 1: company a corporation, that it should in fact generate a profit. 493 00:25:10,680 --> 00:25:14,679 Speaker 1: But like other government services, the military, for example, it 494 00:25:14,720 --> 00:25:17,919 Speaker 1: doesn't necessarily generate a profit, nor is it necessarily supposed to. 495 00:25:17,960 --> 00:25:20,800 Speaker 1: How do we how should we think about that? Well? 496 00:25:20,840 --> 00:25:26,560 Speaker 1: I suggested that, um, the legislators ask the Postmaster General, 497 00:25:26,600 --> 00:25:31,840 Speaker 1: Louis de joy um if it also is problematic that 498 00:25:31,920 --> 00:25:37,320 Speaker 1: the military, public schools, police and fired apartment, fire departments, 499 00:25:37,400 --> 00:25:40,280 Speaker 1: and the White House itself aren't profitable. Because it gets 500 00:25:40,280 --> 00:25:42,880 Speaker 1: to some of the absurdity of this. We have institutions 501 00:25:42,880 --> 00:25:46,159 Speaker 1: in our society that exists to provide a service that 502 00:25:46,280 --> 00:25:50,200 Speaker 1: we support with taxpayer dollars, and in fact, the post 503 00:25:50,200 --> 00:25:54,000 Speaker 1: Office isn't even supported by taxpayer dollars itself, sustaining through 504 00:25:54,000 --> 00:25:59,000 Speaker 1: the post postage charges it it levies. It's running a deficit, 505 00:25:59,080 --> 00:26:02,680 Speaker 1: a massive one in that needs to be fixed. But um, 506 00:26:02,720 --> 00:26:05,399 Speaker 1: you know, we we have these things considered common goods 507 00:26:05,440 --> 00:26:07,240 Speaker 1: that we all share in, and it's a service that 508 00:26:07,280 --> 00:26:10,800 Speaker 1: we all benefit from, including the postal service and holding 509 00:26:10,840 --> 00:26:14,320 Speaker 1: the operations of the military or the Postal Service, you know, 510 00:26:14,359 --> 00:26:17,679 Speaker 1: to the same accounting standards as a private entity is 511 00:26:17,680 --> 00:26:22,639 Speaker 1: is can be very absurd. So Tim, you know, you 512 00:26:22,680 --> 00:26:25,879 Speaker 1: mentioned how package deliveries are actually profitable. It looks like 513 00:26:25,920 --> 00:26:28,840 Speaker 1: although we don't really have, I suppose a full idea 514 00:26:28,880 --> 00:26:32,639 Speaker 1: of the accounts, but people like Treasury secretari Student Milution, 515 00:26:32,680 --> 00:26:35,040 Speaker 1: I mean, they must have a better idea than anybody. 516 00:26:35,160 --> 00:26:38,040 Speaker 1: What's going on at the Postal Service. Do you think 517 00:26:38,119 --> 00:26:41,399 Speaker 1: they're in contact with the Postmaster General? Well, I mean 518 00:26:41,600 --> 00:26:44,080 Speaker 1: that's a real issue because the body, because the Postal 519 00:26:44,119 --> 00:26:46,359 Speaker 1: Service is supposed to be independent. It exists within the 520 00:26:46,480 --> 00:26:49,639 Speaker 1: executive branch, but it is overseen by a board of 521 00:26:49,880 --> 00:26:53,280 Speaker 1: bipartisan board of governors, and it's meant to be independent 522 00:26:53,359 --> 00:26:56,840 Speaker 1: from political influence, very much in the same way as 523 00:26:56,880 --> 00:27:00,920 Speaker 1: the Federal Reserve operates, and Minutution shouldn't be in touch 524 00:27:01,000 --> 00:27:03,880 Speaker 1: with them. But we're in a moment right now. Manuchan 525 00:27:03,960 --> 00:27:10,240 Speaker 1: controls the purse springs. The Cares Act allocated um uh 526 00:27:10,440 --> 00:27:14,479 Speaker 1: ten billion dollars in the spring for the Postal Service 527 00:27:14,560 --> 00:27:17,679 Speaker 1: that Manuchan and Trump have refused release to the Postal 528 00:27:17,720 --> 00:27:21,080 Speaker 1: Service to shore up its operations in the midst of 529 00:27:21,160 --> 00:27:23,920 Speaker 1: the damage from the pandemic that many institutions are facing, 530 00:27:24,160 --> 00:27:27,240 Speaker 1: and so Manutian and Trump have leverage over this institution 531 00:27:27,320 --> 00:27:31,199 Speaker 1: financially right now in an unusual way. And the argument 532 00:27:31,280 --> 00:27:33,560 Speaker 1: is then, is that they're they're using it to play politics. 533 00:27:33,560 --> 00:27:36,119 Speaker 1: That's an argument I happen to agree with. All right, 534 00:27:36,119 --> 00:27:39,080 Speaker 1: we will follow the hearing today. Nathan Hager is listening 535 00:27:39,119 --> 00:27:41,600 Speaker 1: to it as we speak, and of course we'll be 536 00:27:41,600 --> 00:27:43,240 Speaker 1: back on top of it on Monday as well. But 537 00:27:43,280 --> 00:27:46,280 Speaker 1: this isn't over for sure. Tim O'Brien, thanks for joining us. 538 00:27:46,320 --> 00:27:48,480 Speaker 1: Would love to have got your thoughts on the DNC 539 00:27:48,640 --> 00:27:50,560 Speaker 1: this week, the RNC next week and so on, but 540 00:27:50,720 --> 00:27:52,120 Speaker 1: we have more time to do that. That That is timbo 541 00:27:52,160 --> 00:27:56,000 Speaker 1: the O'Brien, senior columnist for Bloomberg Opinion and once again 542 00:27:56,280 --> 00:27:59,480 Speaker 1: the Postmaster General, appearing before I send it Homeland Security 543 00:27:59,520 --> 00:28:03,040 Speaker 1: Committee hearing today. You'll say, or has said already, that 544 00:28:03,160 --> 00:28:06,120 Speaker 1: Congress is at bold for the agency's dire financial situation 545 00:28:06,119 --> 00:28:10,919 Speaker 1: because lawmakers hadn't enacted changes that would allow the agency 546 00:28:10,960 --> 00:28:13,280 Speaker 1: to get on a sustainable path. But of course that's 547 00:28:13,320 --> 00:28:15,919 Speaker 1: just really the beginning of what's going to be spoken of. 548 00:28:17,440 --> 00:28:20,879 Speaker 1: Thanks for listening to Bloomberg Markets podcast. You can subscribe 549 00:28:20,920 --> 00:28:24,400 Speaker 1: and listen to interviews at Apple Podcasts or whatever podcast 550 00:28:24,480 --> 00:28:27,720 Speaker 1: platform you prefer. I'm Bonnie Quinn, I'm on Twitter at 551 00:28:27,720 --> 00:28:30,080 Speaker 1: Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter at 552 00:28:30,080 --> 00:28:32,960 Speaker 1: pt Sweeney. Before the podcast, you can always catch us 553 00:28:33,000 --> 00:28:34,440 Speaker 1: worldwide at Bloomberg Radio