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Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane

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Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Ken

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Speaker 1: Leon joins us Now and Banking of course helping out

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Speaker 1: always with c f R A on this historic day

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Speaker 1: of Jane Fraser taking over from Michael Corbett at City

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Speaker 1: and she has moved many many a time, Ken Leon,

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Speaker 1: were you surprised by this announcement? Uh, there's always a

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Speaker 1: surprise when you have a change of leadership of this magnitude.

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Speaker 1: And it is historic because we have a world class executive,

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Speaker 1: a woman taking over one of the largest banks in

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Speaker 1: the world. Uh, this is exciting. She's got a stellar resume.

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Speaker 1: Um what Jane Fraser, She's a known entity. So you know,

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Speaker 1: City internally is not a troubled bank. But Tom and

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Speaker 1: all our conversations, of course, with the impact of COVID nineteen,

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Speaker 1: you know, banks are just fighting their way up in

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Speaker 1: terms of the troubled consumer market. Before Paul jumps in

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Speaker 1: here in the short time, was Mr Corbett forced out.

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Speaker 1: I don't have insight into that. Um. You know, clearly

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Speaker 1: we've seen difficulty in terms of cities performance, especially in

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Speaker 1: the consumer area, which is one of the strengths of

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Speaker 1: Jane Fraser. Additionally, you know, for investors looking at share

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Speaker 1: price movement, City has come back from its more slows,

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Speaker 1: but it's really been about around fifty dos UM. You know,

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Speaker 1: we think that's an opportunity. Really it's not Michael Corbett's fault.

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Speaker 1: But there's two factors that drive City's outlook and why

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Speaker 1: we have a by recommendation. The US economy going back

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Speaker 1: to a normal market gained City for credit cards, and City,

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Speaker 1: unlike any other large US bank, is a global play

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Speaker 1: on strength in Southeast Asia or Latin America. Those markets

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Speaker 1: come back, cities going to outperform. What Jane Fraser brings

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Speaker 1: to the table was CEO in both Southeast Asia and

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Speaker 1: Latin America. So I think the board is thinking about

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Speaker 1: we've got a tough road over the next six months,

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Speaker 1: trying to get back to a new normal, and Jane

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Speaker 1: Fraser has skill sets to bring on a new generation

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Speaker 1: of leadership. Ken, what do you think the top of

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Speaker 1: Jane Fraser's to do list here. I think it's bringing

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Speaker 1: greater integration of the businesses, particularly on the consumer side,

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Speaker 1: which should be easy for her. We just haven't seen

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Speaker 1: um strength across the board, and consumer for example, appears

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Speaker 1: like JP Morrigan, Bank of America, Morgan Stanley very strong

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Speaker 1: in wealth management. City really hasn't put a strategy and

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Speaker 1: a business together to compete with that, and that's a

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Speaker 1: big growth opportunity for City. Secondly, obviously there's a sensitivity

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Speaker 1: to regulation, but risk taking. Where do you want to

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Speaker 1: take risk is at the capital markets, it's looking at

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Speaker 1: specific areas of commercial loans or possibly do you want

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Speaker 1: to make an acquisition in the US? Do you know

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Speaker 1: as large as City is only in like four states

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Speaker 1: New York, Florida, California, and they're in South Dakota because

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Speaker 1: that's where they do all their credit card processing. So

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Speaker 1: ken one. Obviously, the key issues with this announcement is

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Speaker 1: it's a the first woman to the top of a

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Speaker 1: major globe investment bank. This is your sense of how

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Speaker 1: Wall Street or financial services, of these sectors that you cover,

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Speaker 1: how are they doing on diversity? From your perspective, they'd

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Speaker 1: be getting a lot of pushback for many, many years

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Speaker 1: I think it's top of lists for the whole industry,

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Speaker 1: and um, we have certainly seen examples of it, but

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Speaker 1: there's more that can be done. And when you think

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Speaker 1: of the C suite where the major decisions are made

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Speaker 1: for an entire enterprise or bank, UM, this is a

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Speaker 1: great step. I think we're going to see more of

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Speaker 1: this again. Look at we're talking to. Jane Fraser was

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Speaker 1: the Mackenzie partner. She was at Goldman Sachs, m and A.

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Speaker 1: She's covered the globe for city with the experiences I've mentioned,

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Speaker 1: and she's a senior leader today. What a terrific opportunity

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Speaker 1: for city to have her leads to Bank and Trump.

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Speaker 1: I don't want to interrupt you. We're gonna rune out

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Speaker 1: of time here again, Lean and thank you so much

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Speaker 1: for coming out in short notice. Did they make this

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Speaker 1: change because they were rate a losen er? I mean,

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Speaker 1: is this no different than the starting pitcher for the

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Speaker 1: New York mets. Well, given the current environment and what

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Speaker 1: needs to be done for city, that reminds me of

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Speaker 1: an interview of this founder of Netflix, which is who

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Speaker 1: is right for the times we have and where we're

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Speaker 1: going to lead? So I think after eight years Mike Corbit,

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Speaker 1: you know he was basically City was a punching bag

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Speaker 1: six eight years ago, not able to make the bank

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Speaker 1: stress US. Bottom line is I think there's a smart

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Speaker 1: move by the board and Michael Corbett's and gentleman and

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Speaker 1: did a great job. Ken Leon, thank you so much.

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Speaker 1: On short notice. Just a beautiful overlay, folks. Is that

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Speaker 1: we love to do on Bloomberg surveillance. We get perspective

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Speaker 1: from Carston. Rescue were thrilled that he could join us.

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Speaker 1: UH this morning, Carston, good morning, Good morning, Tom good

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Speaker 1: wonderful to have you with us. I guess it's as expected,

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Speaker 1: but there was the money question right away on euro

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Speaker 1: and this goes down to the need for continental and

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Speaker 1: global trade for Europe to hold up the economy. Can

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Speaker 1: world trade save the day for Europe? I think this

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Speaker 1: is this time around, it's not going to be global

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Speaker 1: trying saying the European economy when I have to come

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Speaker 1: from from domestic demand, and that there are still so

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Speaker 1: many problems out there outside of the yuro y'ar, look

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Speaker 1: at the US, look at the U k UM. So

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Speaker 1: this is I think why we also heard luck Guard

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Speaker 1: only talking about the impact on inflation. She didn't mention

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Speaker 1: the euro as a concern for the e CP. S

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Speaker 1: Glow tut, look, look, excuse me. Of course it is

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Speaker 1: the growth outlook. But to me, as I mentioned Paul Sweeney,

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Speaker 1: it's sort of a euro that wants to have it

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Speaker 1: both ways or guarding against weak tempered economic growth. And

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Speaker 1: yet they're trying to set the template for higher inflation.

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Speaker 1: Did that surprise you that they were so specific about

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Speaker 1: an inflation to come in two thousand one? Um, No,

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Speaker 1: because we have so many say, distortions in two thousand

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Speaker 1: twenty one, don't don't forget. We have the reversal of

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Speaker 1: the German v A reduction this year, so that's going

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Speaker 1: to be reversed Enuary next year. So we should push

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Speaker 1: up the inflation forecast. We we we had the so

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Speaker 1: we have to the all pure and price development. Myself,

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Speaker 1: I was not too concerned. What struck me was more

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Speaker 1: the fact that the two thousand two inflation forecasts remained

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Speaker 1: unchanged at one point um there. If you just would

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Speaker 1: apply the technical assumption like the ECP does with with

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Speaker 1: the stronger Europe, it should have normally pushed out the

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Speaker 1: inflation production and then this is well what is it

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Speaker 1: did the odd thing here? So the the you're not

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Speaker 1: mentioned as a downside risk for growth, only mentioned as

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Speaker 1: a dampening factor for inflation. So the ECB is indeed

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Speaker 1: still try treating carefully and probably asked to keep some

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Speaker 1: vocal or verbal iman via left. Well you taking notes

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Speaker 1: on what you just said because I got lost about

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Speaker 1: it halfway through. We're about to a one nineteen on

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Speaker 1: euro Paul, absolutely, so Carson, just give us a sense

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Speaker 1: of what you think the ECB is likely to do

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Speaker 1: over the next six to twelve months. What do you

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Speaker 1: think is going to be their strategy here? Strategy here

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Speaker 1: is that having another one or two months in the

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Speaker 1: verbal intervention right that guard is trying to currently and

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Speaker 1: then towards the end of the year, I would still

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Speaker 1: see an increase in the indecuity program b be it

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Speaker 1: an increase of the PEPT program so the pandemic quity,

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Speaker 1: or it could actually eas be reverting back to the

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Speaker 1: old Q program which is currently this twenty billion per

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Speaker 1: months um so, but there will be so in order

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Speaker 1: to ensure that the ECB will be actively purchasing bonds

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Speaker 1: at least until the two one and not as currently

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Speaker 1: unvisited on until it's two Carston, thank you so much.

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Speaker 1: Carston Braski with his chief economist, with Iron G. Ken

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Speaker 1: Hartman runs Wells Fargo Asset Management, their chief investment officer.

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Speaker 1: And within that he writes notes and they're, you know,

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Speaker 1: they're sort of short. They're like the way a C.

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Speaker 1: I over you know, writes ball, you know, like short's

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Speaker 1: not like a forty two page themistic ring. And he

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Speaker 1: absolutely nails in paragraph too. What all of us have

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Speaker 1: to focus on, which is the G and the R

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Speaker 1: and the bottom line is with this fiscal ginormity that

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Speaker 1: we're doing kennon Good Morning, is we've got to get

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Speaker 1: the growth rate to sustain above some form of interest rate.

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Speaker 1: Discussed that, well, it's very important that the growth rate

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Speaker 1: is above the real rate of interest. UM. It's the

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Speaker 1: way we can grow out of our debt problem. So

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Speaker 1: the feed is very um focused on keeping the real

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Speaker 1: rate very low so we can grow our way out. UM.

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Speaker 1: The problem will be whether that in fact will happen.

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Speaker 1: And then the other thing that I'm very interested in

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Speaker 1: is if it does happen, do we then get inflation?

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Speaker 1: This is really important and Paul I have to apologize.

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Speaker 1: I was out front on Kennerley and will join us

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Speaker 1: in a bit with Michael Corbett. So I sent apologies

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Speaker 1: to Kirk, and you know, Kirk, as Paul knows, I'm

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Speaker 1: not focused because the Red Sox have the worst record

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Speaker 1: in the American League. Paul, save me, I will save

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Speaker 1: your tom so Kirk. It's interesting here we're hearing Madame

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Speaker 1: Legard this morning again UM mentioning kind of the need

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Speaker 1: to keep liquidity into the market place. What do you

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Speaker 1: think the read through will be, uh for the US

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Speaker 1: Federal Reserve is a parse kind of what they're hearing

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Speaker 1: out of the our European friends today. Well, I think

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Speaker 1: the Federal reservedly very pleased to see that. Um. They're

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Speaker 1: following in ing with the Federal Reserve, and just the

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Speaker 1: amount of stimulus is enormous. The money supply in the

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Speaker 1: U S. Euro over year is up or more. And UM,

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Speaker 1: I think that they will be very pleased to see that.

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Speaker 1: Pleased enough uh that Again, I think the Fed has

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Speaker 1: done each job. I think most market participants would say

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Speaker 1: they were early, they were firm, They message very clearly

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Speaker 1: their intent. Now I are turning back to Washington, d

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Speaker 1: d C. And there's much less clarity coming out of

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Speaker 1: Washington as it relates to stimulus. How do you think, Uh,

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Speaker 1: those in Congress that are pointing to more stimulus may

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Speaker 1: think about it given what we're seeing out of Europe

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Speaker 1: and out of the US, Well, we clearly need more

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Speaker 1: fiscal stimulus. The central banks are so to speak, pretty

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Speaker 1: much out of AMMO. So I think the things that

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Speaker 1: we're all watching is, you know, can that continue? Um.

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Speaker 1: The other thing I think that we're all focused on,

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Speaker 1: obviously is whether there's going to be a second way,

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Speaker 1: so to speak, of the virus. And you know, I'm

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Speaker 1: very concerned, as is everyone about the winner. So you know,

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Speaker 1: we'll have to see how this plays out. But this

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Speaker 1: goal stimulus is very important. This is really important. Kirk

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Speaker 1: Folks I mentioned this earlier on television, very icon Green

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Speaker 1: writing for Project Syndicate. I put it on Twitter. This is,

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Speaker 1: of course the economic historian of the University of Berkeley

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Speaker 1: and used to California at Berkeley, and Kirk he absolutely

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Speaker 1: agrees with you that we're going into a period that

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Speaker 1: maybe will not be is medically traumatic, but will be

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Speaker 1: economically traumatic than what we've seen in the past six months.

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Speaker 1: How is Wells Fargo stealed for that. In investment management, Well,

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Speaker 1: I think you have to be cautious here. Clearly, Uh,

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Speaker 1: the markets are are betting on a very strong recovery

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Speaker 1: in and um I think it's prew them to head

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Speaker 1: your better bit. The thing that's very interesting me is

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Speaker 1: the disparity between growth and value. I've never seen uh,

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Speaker 1: this disparity before. You have a growth it's ahead of value. Value,

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Speaker 1: you know, is down nine on the large caps and

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Speaker 1: growth is up something like so on a lot of

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Speaker 1: these mega techniques. So I think that gap has to close.

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Speaker 1: So my view would be I'd be cautious about the

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Speaker 1: mega text. I think they've had their run. They obviously

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Speaker 1: will do well in a low rate environment because they've

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Speaker 1: got good earning streams. But to really see these markets

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Speaker 1: sustain and continue to move, you've got to see the

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Speaker 1: value sectors come back. So, Kirk, again we talk about

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Speaker 1: the big tech names driving this market, and you know,

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Speaker 1: some market participants, namely myself among them, are concerned about

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Speaker 1: the lack of breath within the equity market. How concerned

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Speaker 1: are you about that? Or can we just shrug it

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Speaker 1: off given where we are in terms of low interest rates, Well,

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Speaker 1: I don't think you can shrug it off. And what

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Speaker 1: we're looking at is other areas of growth. So I

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Speaker 1: think there's a little bit of a misunderstanding that it's

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Speaker 1: only the mega tech names. There are a lot of

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Speaker 1: other good growth names and uh, you know many of

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Speaker 1: your guests that come on the program, So there are

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Speaker 1: many other um uh companies that have good growth and

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Speaker 1: they aren't necessarily the mega growth And that's where we're

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Speaker 1: really looking at all. Right, So, Kirk, if someone's in

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Speaker 1: the triple all leverage cash funds and and they're looking

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Speaker 1: to kind of wedge themselves into the market, here, where

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Speaker 1: should they be looking. Well, I looked internationally. I think

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Speaker 1: what's very interesting is the dollar. And my view is

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Speaker 1: the dollar and it already has a starting to weaken.

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Speaker 1: So I think there are a lot of opportunities internationally. Uh.

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Speaker 1: Anytime you see a mess, you want to look at that.

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Speaker 1: So I think Europe right now is a bit of

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Speaker 1: a mess. And I think that uh, Europe has value. UM,

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Speaker 1: I think that Asia has value. You've seen China rebound,

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Speaker 1: so um, you know we will get through this, and um,

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Speaker 1: I think you want to look internationally. That's fascinating to me.

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Speaker 1: Let's let's let's let's call it this. I mean, Nestley

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Speaker 1: is first of all out of Switzerland, so it's in

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Speaker 1: some ways not Europe, and it's amazing the discount. Kirk

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Speaker 1: Hartman of the Pe of Nestley called up twenty five

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Speaker 1: ish versus so many of its equivalences here at thirty ish.

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Speaker 1: I mean that it's tangible, isn't it? Well, very much so.

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Speaker 1: And if you look at the PE ratios of Europe

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Speaker 1: or Asia versus the US, it's a lot less. So um. Again,

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Speaker 1: that gets to I look at two things. I think

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Speaker 1: the growth of value gap is going to close, and

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Speaker 1: I think that with a weaker dollar, Europe and Asia

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Speaker 1: have value. Interesting Kirk, I mean, would you go so

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Speaker 1: far as to consider emerging markets? I know there's a

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Speaker 1: lot of discussion around when people should really start taking

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Speaker 1: a look there. Well, emerging markets, UH are very much

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Speaker 1: dependent on China, and I think China got the message

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Speaker 1: that they can't depend for a lot of reasons on

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Speaker 1: the US supply chain. So um, what's interesting to media

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Speaker 1: is China is really diversifying. You look at the companies

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Speaker 1: in Korea and Japan and Taiwan. And it's very clear

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Speaker 1: that China is going to build its own semi conductor

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Speaker 1: industry and chips, and that's why I would look to

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Speaker 1: value is the extended UH periphery outside of UH Japan.

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Speaker 1: Excuse me, China, Okay. Kirk Hartman with US Folks. We

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Speaker 1: gotta let him go or that market will go down.

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Speaker 1: Kirk Hartman with Wells Fargo, thank you. Right now, we

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Speaker 1: want to get to this important interview. The Johnson family

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Speaker 1: runs Fidelity and they've always done inspired hiring around the

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Speaker 1: street to bring in the troops with the Boston Bread.

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Speaker 1: They did that two years ago with Vadim Zlotnikov, who

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Speaker 1: was definitive in Alliance Bernstein. If you were on the street,

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Speaker 1: you had to read the quantitative and market UH letters

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Speaker 1: and research pieces from Mrs Slatnikov. He joins US now

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Speaker 1: with Fidelity, their institutional asset management president, voting. The rules

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Speaker 1: have changed. Fidelities lived at, Schwab's lived at. Everybody I'll

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Speaker 1: has lived it. I want you to first discuss the

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Speaker 1: overtrading disease we are we have right now. Are you

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Speaker 1: in Fidelity facilitating and overtrading disease that will lead to

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Speaker 1: losses and ill return. Look, Fidelity has always been about

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Speaker 1: long term and and you know as well as I do,

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Speaker 1: of the investment outcomes comes from the underlying product design,

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Speaker 1: not from the trading, and the emphasis has always been

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Speaker 1: on making sure you have the appropriate product design to

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Speaker 1: achieve the particular investment goals. Very importantly in your heritage,

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Speaker 1: and this goes back to the great Paul Handros as well.

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Speaker 1: Fidelity is at a mandate to be on perspectus what

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Speaker 1: is working right now in terms of total return, narrow

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Speaker 1: on perspective investment or are more broader tone. The last

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Speaker 1: ten years have been very much about a very narrow

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Speaker 1: market ut product that emphasized US at the expense of

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Speaker 1: international equities has delivered very very strong results. The key

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Speaker 1: issue is is this going to change? And we believe

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Speaker 1: that it will, and that there are a number of

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Speaker 1: drivers that are conspiring to argue for significantly greater degree

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Speaker 1: of diversification as we move forward. That is going to

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Speaker 1: be we believe, a critical decision. And just to be

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Speaker 1: absolutely clear, I'm not speaking on behalf of Fidelity, but

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Speaker 1: rather on the on behalf of my group and the

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Speaker 1: economic research team that developed the paper. But they built

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Speaker 1: on that a little bit and move away from the

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Speaker 1: sixty forty because it's the forty that it's got a

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Speaker 1: ton of attention in the last month or so. Can

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Speaker 1: you speak to that, Dame, Absolutely. So. Look, one of

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Speaker 1: the basic premises we have is that you want to

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Speaker 1: invest in the basis of something that is at least

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Speaker 1: noble or at least very likely about the future. And

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Speaker 1: the one thing that is very likely is that the

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Speaker 1: levels of death in the economy relative to GDP are

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Speaker 1: going to continue to escalate. Demographics, policy, everything is inspiring

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Speaker 1: to make it happen. The issue is, and this is

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Speaker 1: where really the big question is, is that going to

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Speaker 1: drive inflation? And we believe it will. That is a

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Speaker 1: huge departure from where we've been in the past. Not

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Speaker 1: only will it drive inflation, it will also alter the

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Speaker 1: type of assets that are likely to under outperform in

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Speaker 1: that environment. Okay, so what's likely to outperform? So there

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Speaker 1: are a number of things. So, first of all, one

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Speaker 1: of the interesting things, if you look back at before

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Speaker 1: even two thousand three, luxury goods had the same essential

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Speaker 1: inflation as the CPI following two thousand three, and if

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Speaker 1: you remember the aspirational consumer using your house is getting account.

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Speaker 1: All of those cliches that we've had drove massive inflation

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Speaker 1: and luxury goods. We likewise we've seen asset inflation. The

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Speaker 1: future inflation is going to be somewhat driven by the policy,

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Speaker 1: for example, to the extent we start to see policies

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Speaker 1: aimed at wealth redistribution, narrowing the income inequality gap. Many

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Speaker 1: of the areas that have high elasticity to the lower

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Speaker 1: and consumer spending are likely to see inflation. They've been

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Speaker 1: left for dead their undervalue, and we do think some

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Speaker 1: of those could I'll perform over a long term. This

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Speaker 1: is not a one year forecast about him. This will

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Speaker 1: be a question for you an alliance. Burnstand certainly with

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Speaker 1: you a serious money at fidelity. When we read about

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Speaker 1: the gamma, well, when we read about the nastack, well,

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Speaker 1: when we read about fancy derivative strategies, it it destroys

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Speaker 1: trust on the street. How do we regain the trust

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Speaker 1: on the street if everybody's trying to outdo Soft Bank

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Speaker 1: of Japan. Yeah, look, there there will always be investors

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Speaker 1: that are interested in shorter horizon trading that believe they

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Speaker 1: might have a point of view on things like gamma

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Speaker 1: or delta. Honestly that that is a relatively small minority.

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Speaker 1: I do see, you know it is happening. It is

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Speaker 1: I think a function of significant liquidity if we've seen

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Speaker 1: in the mark it as well as well as low

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Speaker 1: interest rates, so there is a propensive Just try to

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Speaker 1: seek out incremental investments. I really want to keep coming

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Speaker 1: back to the point. If you really believe the statement

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Speaker 1: that eighteent of your outcome is about product design, that's

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Speaker 1: where people should spend eight of their time. I just

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Speaker 1: got an email in All anybody wants to know is

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Speaker 1: how does will dan Off do it? What's the dan

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Speaker 1: Off message that has made Contra Fund do that for

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Speaker 1: all these years? Hard work and natural talents, those those

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Speaker 1: are generally pretty good recipe for our success. He's done

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Speaker 1: a remarkable job. It's truly truly aspiring. I believe it's

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Speaker 1: his thirty a year of fidelity this year, so it's

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Speaker 1: it's it's been a remarkable run. It's been a remarkable run.

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Speaker 1: I want you to take us back to George Vanderheid

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Speaker 1: and Jeff Finnick and the rest of them, who from

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Speaker 1: time to time would make bets in the bond markets.

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Speaker 1: Are your equity guys using zero coupon bonds and such

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Speaker 1: to make big bets now on fixed income or is

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Speaker 1: that from the past. I think it's mostly from the past.

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Speaker 1: I think, look there there are so many products of fidelity.

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Speaker 1: There may be somebody doing uh investing in some pot

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Speaker 1: but no, that's within the group that I run, which

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Speaker 1: is really what I'm most familiar with. We we don't

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Speaker 1: do that now, which it's mostly multi asset products, balanced

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Speaker 1: products that aimed at satisfying a particular investment outcome, particular

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Speaker 1: regulatory requirement, particular tax requirement, with a fantastic to catch up,

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Speaker 1: going to see you again, but names at a cuff

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Speaker 1: that vitality, institutional asset management. President. We move on to

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Speaker 1: the depression of Washington. We can always do that with

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Speaker 1: Henrietta treys Veda, Partners Director of Economic Policy Research. I

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Speaker 1: guess the battle over the stimulus, Henriette is sort of

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Speaker 1: like the Boston Red Sox. It's not going well. My

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Speaker 1: major question is there's a huge perception among our guests

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Speaker 1: of the urgency for Washington to act. Does Wash you

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Speaker 1: didn't have any of that urgency? No, they really don't.

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Speaker 1: Um you can see that as far back is July

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Speaker 1: thirty one, when the unemployment insurance benefits expired, and nothing

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Speaker 1: has changed since we passed the August eighth date with

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Speaker 1: the p p P And here we are over a

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Speaker 1: month after that event even and we don't have a

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Speaker 1: bill that can pass the Senate, even with just the

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Speaker 1: Republican conference. So today there's a vote scheduled and we'll

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Speaker 1: see if it actually happens, but it will fail, and

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Speaker 1: we'll see what happens after that. Not much is my expectation.

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Speaker 1: What are the consequences of no stimulus bill? Unfortunately, the

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Speaker 1: consequences for the Republican Party and the Democratic Party are

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Speaker 1: good for the political side, bad obviously for the state

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Speaker 1: of further stimulus and the potential for more unemployment checks

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Speaker 1: and other fiscal stimulus for the investors or markets um.

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Speaker 1: But for both parties, I see benefits on the political side.

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Speaker 1: For Republicans, they get to get back to their roots

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Speaker 1: buck Speaker Pelosi, which is always a good time UM

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Speaker 1: and appease their conservative base who's deficit conscious and doesn't

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Speaker 1: want to stimulate the economy with another two trillion dollar package,

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Speaker 1: which is what this eventually would have to kind of

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Speaker 1: be on the Democrats side. They can say Republicans aren't

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Speaker 1: understating the severity of the crisis. President Trump's off, you know,

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Speaker 1: talking to Bob Woodward instead of actually engaging on the coronavirus.

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Speaker 1: It suits their narrative going into the election, and then

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Speaker 1: they can pass a massive stimulus under Biden if he

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Speaker 1: wins the administration in the first quarter. Um. That's what

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Speaker 1: we've heard from them for a while now, and that's

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Speaker 1: what I expect will ultimately come to pass. Henrietta, why

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Speaker 1: are there so many, you know, citizens of the U

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Speaker 1: s A undecided who they'll will for in November? Is

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Speaker 1: this because they have questions on policies or something else? Um?

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Speaker 1: I think that's interesting. There's a lot of late deciders.

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Speaker 1: We definitely see that every cycle. What I would focus

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Speaker 1: on right now is the fact that this cycle is

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Speaker 1: different from that. Instead of the independence who make up

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Speaker 1: those undecided voters but going for Trump at the end

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Speaker 1: of the day three to one, they're now going for

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Speaker 1: Joe Biden. So the undecided sliver has shrunk to about

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Speaker 1: six percent of the population of the overall piece of

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Speaker 1: the pie that is independent voters. Three to one, they're

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Speaker 1: going to president to Vice President Biden, so that really

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Speaker 1: votes poorly for President Trump. That's where elections are made,

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Speaker 1: whether you're in a swing state, UM or nationwide. And

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Speaker 1: that's I think why you're seeing the Biden polls nation

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Speaker 1: nationally come in at plus seven plus eight, plus nine

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00:25:23,680 --> 00:25:27,240
Speaker 1: plus ten. It's because he's already captured those independent voters.

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Speaker 1: So even if President Trump were able to win fifty

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Speaker 1: of the remaining undecided, he would still lose the race,

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Speaker 1: including the battlegrounds. UM. So the Biden team feels pretty

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Speaker 1: good about that. I think the Republicans are reading that

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Speaker 1: and saying, we really need to dig in, make sure

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Speaker 1: we don't pass another two trillion dollar stimulus package and

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Speaker 1: look like tax and spend Democrats, and we can go

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Speaker 1: into the selection at least with our base galvanized, which

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00:25:49,200 --> 00:25:51,919
Speaker 1: was not what they had in late March after they

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Speaker 1: passed the Cares Act. So this is full you know,

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Speaker 1: cover your butt mode and campaign cycles. UM. And does

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Speaker 1: the undecided voter than I mean, are they easier to

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Speaker 1: get their minds to be changed from now until November? UM?

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Speaker 1: The undecided voter is probably not particularly politically engaged. So

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Speaker 1: all of this news cycle stuff you're seeing about wood

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Speaker 1: Word or Dr Fauci or UM, what's going on with

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00:26:17,840 --> 00:26:20,560
Speaker 1: President Trump and his Nobel Peace Prize yesterday. All that

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Speaker 1: stuff is really going to play in UM. I would say,

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Speaker 1: like the second and third week of October. Oftentimes, that

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Speaker 1: last remaining eighth of the population decides how they're going

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Speaker 1: to break in the last seven days of the election.

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Speaker 1: So we'll really see. I imagine there will be a

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Speaker 1: couple more news cycles before then, maybe like fifty more

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Speaker 1: news cycles between now and then UM, and they're going

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Speaker 1: to really make their decision at the very last minute.

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Speaker 1: You would assume that the economy was going to make

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Speaker 1: their decision for them UM. So the administration will try

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Speaker 1: to play up the next month's unemployment data UM. Democrats

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00:26:50,320 --> 00:26:52,600
Speaker 1: will try to focus on the coronavirus and try to

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Speaker 1: really hammer members home, those voters home with UM, just

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Speaker 1: pounding them with ads. And that's where you look at

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Speaker 1: how much cash on hand does the Biden campaign have

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Speaker 1: versus Trump. Obviously, Joe Biden had a record breaking hall

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Speaker 1: last month. We'll see if you can keep that up.

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Speaker 1: And he's UM in a very good place to essentially

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Speaker 1: convince those last minute voters at the last minute in

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Speaker 1: those battlegrounds, Henry had a quickly here, what ads work?

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Speaker 1: Do TV ads work? Or we finally be on that

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Speaker 1: where it's all digital all the time. Digital ads are

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Speaker 1: definitely where the Trump administration is. You've seen them focus

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Speaker 1: on that. They almost exclusively go to Facebook now and

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Speaker 1: they ignore all the polling data and aggressively saying that's

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Speaker 1: not even what you should be watching. Just go straight

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Speaker 1: to Facebook. See what the enthusiasm is. That's where we're

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Speaker 1: going to get our base. That's where we're going to

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Speaker 1: turn out. There are more um, non voting white individuals

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Speaker 1: in the United States that didn't even turn out. Facebook

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00:27:46,240 --> 00:27:48,080
Speaker 1: is telling us that, So we're just going to focus

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Speaker 1: on advertising and Facebook. On the Democrats side, you see

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Speaker 1: a much more um even hyperlocalized type of ad where

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Speaker 1: they are working through individual text messages. They have a

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Speaker 1: robust grassroots game dealing with that. The Act Blue app

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00:28:03,600 --> 00:28:06,480
Speaker 1: obviously helps with that, but they're also doing the generic

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Speaker 1: TV ads, specially pounding Trump in those um swing STAPs.

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Speaker 1: Hand it's been right, great brief. Thank you so much

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Speaker 1: handing in the trays with us with Veda Partners. Thanks

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00:28:18,760 --> 00:28:22,960
Speaker 1: for listening to the Bloomberg Surveillance Podcast. Subscribe and listen

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00:28:23,240 --> 00:28:28,560
Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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00:28:28,680 --> 00:28:32,920
Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio