Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane
Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Ken
Speaker 1: Leon joins us Now and Banking of course helping out
Speaker 1: always with c f R A on this historic day
Speaker 1: of Jane Fraser taking over from Michael Corbett at City
Speaker 1: and she has moved many many a time, Ken Leon,
Speaker 1: were you surprised by this announcement? Uh, there's always a
Speaker 1: surprise when you have a change of leadership of this magnitude.
Speaker 1: And it is historic because we have a world class executive,
Speaker 1: a woman taking over one of the largest banks in
Speaker 1: the world. Uh, this is exciting. She's got a stellar resume.
Speaker 1: Um what Jane Fraser, She's a known entity. So you know,
Speaker 1: City internally is not a troubled bank. But Tom and
Speaker 1: all our conversations, of course, with the impact of COVID nineteen,
Speaker 1: you know, banks are just fighting their way up in
Speaker 1: terms of the troubled consumer market. Before Paul jumps in
Speaker 1: here in the short time, was Mr Corbett forced out.
Speaker 1: I don't have insight into that. Um. You know, clearly
Speaker 1: we've seen difficulty in terms of cities performance, especially in
Speaker 1: the consumer area, which is one of the strengths of
Speaker 1: Jane Fraser. Additionally, you know, for investors looking at share
Speaker 1: price movement, City has come back from its more slows,
Speaker 1: but it's really been about around fifty dos UM. You know,
Speaker 1: we think that's an opportunity. Really it's not Michael Corbett's fault.
Speaker 1: But there's two factors that drive City's outlook and why
Speaker 1: we have a by recommendation. The US economy going back
Speaker 1: to a normal market gained City for credit cards, and City,
Speaker 1: unlike any other large US bank, is a global play
Speaker 1: on strength in Southeast Asia or Latin America. Those markets
Speaker 1: come back, cities going to outperform. What Jane Fraser brings
Speaker 1: to the table was CEO in both Southeast Asia and
Speaker 1: Latin America. So I think the board is thinking about
Speaker 1: we've got a tough road over the next six months,
Speaker 1: trying to get back to a new normal, and Jane
Speaker 1: Fraser has skill sets to bring on a new generation
Speaker 1: of leadership. Ken, what do you think the top of
Speaker 1: Jane Fraser's to do list here. I think it's bringing
Speaker 1: greater integration of the businesses, particularly on the consumer side,
Speaker 1: which should be easy for her. We just haven't seen
Speaker 1: um strength across the board, and consumer for example, appears
Speaker 1: like JP Morrigan, Bank of America, Morgan Stanley very strong
Speaker 1: in wealth management. City really hasn't put a strategy and
Speaker 1: a business together to compete with that, and that's a
Speaker 1: big growth opportunity for City. Secondly, obviously there's a sensitivity
Speaker 1: to regulation, but risk taking. Where do you want to
Speaker 1: take risk is at the capital markets, it's looking at
Speaker 1: specific areas of commercial loans or possibly do you want
Speaker 1: to make an acquisition in the US? Do you know
Speaker 1: as large as City is only in like four states
Speaker 1: New York, Florida, California, and they're in South Dakota because
Speaker 1: that's where they do all their credit card processing. So
Speaker 1: ken one. Obviously, the key issues with this announcement is
Speaker 1: it's a the first woman to the top of a
Speaker 1: major globe investment bank. This is your sense of how
Speaker 1: Wall Street or financial services, of these sectors that you cover,
Speaker 1: how are they doing on diversity? From your perspective, they'd
Speaker 1: be getting a lot of pushback for many, many years
Speaker 1: I think it's top of lists for the whole industry,
Speaker 1: and um, we have certainly seen examples of it, but
Speaker 1: there's more that can be done. And when you think
Speaker 1: of the C suite where the major decisions are made
Speaker 1: for an entire enterprise or bank, UM, this is a
Speaker 1: great step. I think we're going to see more of
Speaker 1: this again. Look at we're talking to. Jane Fraser was
Speaker 1: the Mackenzie partner. She was at Goldman Sachs, m and A.
Speaker 1: She's covered the globe for city with the experiences I've mentioned,
Speaker 1: and she's a senior leader today. What a terrific opportunity
Speaker 1: for city to have her leads to Bank and Trump.
Speaker 1: I don't want to interrupt you. We're gonna rune out
Speaker 1: of time here again, Lean and thank you so much
Speaker 1: for coming out in short notice. Did they make this
Speaker 1: change because they were rate a losen er? I mean,
Speaker 1: is this no different than the starting pitcher for the
Speaker 1: New York mets. Well, given the current environment and what
Speaker 1: needs to be done for city, that reminds me of
Speaker 1: an interview of this founder of Netflix, which is who
Speaker 1: is right for the times we have and where we're
Speaker 1: going to lead? So I think after eight years Mike Corbit,
Speaker 1: you know he was basically City was a punching bag
Speaker 1: six eight years ago, not able to make the bank
Speaker 1: stress US. Bottom line is I think there's a smart
Speaker 1: move by the board and Michael Corbett's and gentleman and
Speaker 1: did a great job. Ken Leon, thank you so much.
Speaker 1: On short notice. Just a beautiful overlay, folks. Is that
Speaker 1: we love to do on Bloomberg surveillance. We get perspective
Speaker 1: from Carston. Rescue were thrilled that he could join us.
Speaker 1: UH this morning, Carston, good morning, Good morning, Tom good
Speaker 1: wonderful to have you with us. I guess it's as expected,
Speaker 1: but there was the money question right away on euro
Speaker 1: and this goes down to the need for continental and
Speaker 1: global trade for Europe to hold up the economy. Can
Speaker 1: world trade save the day for Europe? I think this
Speaker 1: is this time around, it's not going to be global
Speaker 1: trying saying the European economy when I have to come
Speaker 1: from from domestic demand, and that there are still so
Speaker 1: many problems out there outside of the yuro y'ar, look
Speaker 1: at the US, look at the U k UM. So
Speaker 1: this is I think why we also heard luck Guard
Speaker 1: only talking about the impact on inflation. She didn't mention
Speaker 1: the euro as a concern for the e CP. S
Speaker 1: Glow tut, look, look, excuse me. Of course it is
Speaker 1: the growth outlook. But to me, as I mentioned Paul Sweeney,
Speaker 1: it's sort of a euro that wants to have it
Speaker 1: both ways or guarding against weak tempered economic growth. And
Speaker 1: yet they're trying to set the template for higher inflation.
Speaker 1: Did that surprise you that they were so specific about
Speaker 1: an inflation to come in two thousand one? Um, No,
Speaker 1: because we have so many say, distortions in two thousand
Speaker 1: twenty one, don't don't forget. We have the reversal of
Speaker 1: the German v A reduction this year, so that's going
Speaker 1: to be reversed Enuary next year. So we should push
Speaker 1: up the inflation forecast. We we we had the so
Speaker 1: we have to the all pure and price development. Myself,
Speaker 1: I was not too concerned. What struck me was more
Speaker 1: the fact that the two thousand two inflation forecasts remained
Speaker 1: unchanged at one point um there. If you just would
Speaker 1: apply the technical assumption like the ECP does with with
Speaker 1: the stronger Europe, it should have normally pushed out the
Speaker 1: inflation production and then this is well what is it
Speaker 1: did the odd thing here? So the the you're not
Speaker 1: mentioned as a downside risk for growth, only mentioned as
Speaker 1: a dampening factor for inflation. So the ECB is indeed
Speaker 1: still try treating carefully and probably asked to keep some
Speaker 1: vocal or verbal iman via left. Well you taking notes
Speaker 1: on what you just said because I got lost about
Speaker 1: it halfway through. We're about to a one nineteen on
Speaker 1: euro Paul, absolutely, so Carson, just give us a sense
Speaker 1: of what you think the ECB is likely to do
Speaker 1: over the next six to twelve months. What do you
Speaker 1: think is going to be their strategy here? Strategy here
Speaker 1: is that having another one or two months in the
Speaker 1: verbal intervention right that guard is trying to currently and
Speaker 1: then towards the end of the year, I would still
Speaker 1: see an increase in the indecuity program b be it
Speaker 1: an increase of the PEPT program so the pandemic quity,
Speaker 1: or it could actually eas be reverting back to the
Speaker 1: old Q program which is currently this twenty billion per
Speaker 1: months um so, but there will be so in order
Speaker 1: to ensure that the ECB will be actively purchasing bonds
Speaker 1: at least until the two one and not as currently
Speaker 1: unvisited on until it's two Carston, thank you so much.
Speaker 1: Carston Braski with his chief economist, with Iron G. Ken
Speaker 1: Hartman runs Wells Fargo Asset Management, their chief investment officer.
Speaker 1: And within that he writes notes and they're, you know,
Speaker 1: they're sort of short. They're like the way a C.
Speaker 1: I over you know, writes ball, you know, like short's
Speaker 1: not like a forty two page themistic ring. And he
Speaker 1: absolutely nails in paragraph too. What all of us have
Speaker 1: to focus on, which is the G and the R
Speaker 1: and the bottom line is with this fiscal ginormity that
Speaker 1: we're doing kennon Good Morning, is we've got to get
Speaker 1: the growth rate to sustain above some form of interest rate.
Speaker 1: Discussed that, well, it's very important that the growth rate
Speaker 1: is above the real rate of interest. UM. It's the
Speaker 1: way we can grow out of our debt problem. So
Speaker 1: the feed is very um focused on keeping the real
Speaker 1: rate very low so we can grow our way out. UM.
Speaker 1: The problem will be whether that in fact will happen.
Speaker 1: And then the other thing that I'm very interested in
Speaker 1: is if it does happen, do we then get inflation?
Speaker 1: This is really important and Paul I have to apologize.
Speaker 1: I was out front on Kennerley and will join us
Speaker 1: in a bit with Michael Corbett. So I sent apologies
Speaker 1: to Kirk, and you know, Kirk, as Paul knows, I'm
Speaker 1: not focused because the Red Sox have the worst record
Speaker 1: in the American League. Paul, save me, I will save
Speaker 1: your tom so Kirk. It's interesting here we're hearing Madame
Speaker 1: Legard this morning again UM mentioning kind of the need
Speaker 1: to keep liquidity into the market place. What do you
Speaker 1: think the read through will be, uh for the US
Speaker 1: Federal Reserve is a parse kind of what they're hearing
Speaker 1: out of the our European friends today. Well, I think
Speaker 1: the Federal reservedly very pleased to see that. Um. They're
Speaker 1: following in ing with the Federal Reserve, and just the
Speaker 1: amount of stimulus is enormous. The money supply in the
Speaker 1: U S. Euro over year is up or more. And UM,
Speaker 1: I think that they will be very pleased to see that.
Speaker 1: Pleased enough uh that Again, I think the Fed has
Speaker 1: done each job. I think most market participants would say
Speaker 1: they were early, they were firm, They message very clearly
Speaker 1: their intent. Now I are turning back to Washington, d
Speaker 1: d C. And there's much less clarity coming out of
Speaker 1: Washington as it relates to stimulus. How do you think, Uh,
Speaker 1: those in Congress that are pointing to more stimulus may
Speaker 1: think about it given what we're seeing out of Europe
Speaker 1: and out of the US, Well, we clearly need more
Speaker 1: fiscal stimulus. The central banks are so to speak, pretty
Speaker 1: much out of AMMO. So I think the things that
Speaker 1: we're all watching is, you know, can that continue? Um.
Speaker 1: The other thing I think that we're all focused on,
Speaker 1: obviously is whether there's going to be a second way,
Speaker 1: so to speak, of the virus. And you know, I'm
Speaker 1: very concerned, as is everyone about the winner. So you know,
Speaker 1: we'll have to see how this plays out. But this
Speaker 1: goal stimulus is very important. This is really important. Kirk
Speaker 1: Folks I mentioned this earlier on television, very icon Green
Speaker 1: writing for Project Syndicate. I put it on Twitter. This is,
Speaker 1: of course the economic historian of the University of Berkeley
Speaker 1: and used to California at Berkeley, and Kirk he absolutely
Speaker 1: agrees with you that we're going into a period that
Speaker 1: maybe will not be is medically traumatic, but will be
Speaker 1: economically traumatic than what we've seen in the past six months.
Speaker 1: How is Wells Fargo stealed for that. In investment management, Well,
Speaker 1: I think you have to be cautious here. Clearly, Uh,
Speaker 1: the markets are are betting on a very strong recovery
Speaker 1: in and um I think it's prew them to head
Speaker 1: your better bit. The thing that's very interesting me is
Speaker 1: the disparity between growth and value. I've never seen uh,
Speaker 1: this disparity before. You have a growth it's ahead of value. Value,
Speaker 1: you know, is down nine on the large caps and
Speaker 1: growth is up something like so on a lot of
Speaker 1: these mega techniques. So I think that gap has to close.
Speaker 1: So my view would be I'd be cautious about the
Speaker 1: mega text. I think they've had their run. They obviously
Speaker 1: will do well in a low rate environment because they've
Speaker 1: got good earning streams. But to really see these markets
Speaker 1: sustain and continue to move, you've got to see the
Speaker 1: value sectors come back. So, Kirk, again we talk about
Speaker 1: the big tech names driving this market, and you know,
Speaker 1: some market participants, namely myself among them, are concerned about
Speaker 1: the lack of breath within the equity market. How concerned
Speaker 1: are you about that? Or can we just shrug it
Speaker 1: off given where we are in terms of low interest rates, Well,
Speaker 1: I don't think you can shrug it off. And what
Speaker 1: we're looking at is other areas of growth. So I
Speaker 1: think there's a little bit of a misunderstanding that it's
Speaker 1: only the mega tech names. There are a lot of
Speaker 1: other good growth names and uh, you know many of
Speaker 1: your guests that come on the program, So there are
Speaker 1: many other um uh companies that have good growth and
Speaker 1: they aren't necessarily the mega growth And that's where we're
Speaker 1: really looking at all. Right, So, Kirk, if someone's in
Speaker 1: the triple all leverage cash funds and and they're looking
Speaker 1: to kind of wedge themselves into the market, here, where
Speaker 1: should they be looking. Well, I looked internationally. I think
Speaker 1: what's very interesting is the dollar. And my view is
Speaker 1: the dollar and it already has a starting to weaken.
Speaker 1: So I think there are a lot of opportunities internationally. Uh.
Speaker 1: Anytime you see a mess, you want to look at that.
Speaker 1: So I think Europe right now is a bit of
Speaker 1: a mess. And I think that uh, Europe has value. UM,
Speaker 1: I think that Asia has value. You've seen China rebound,
Speaker 1: so um, you know we will get through this, and um,
Speaker 1: I think you want to look internationally. That's fascinating to me.
Speaker 1: Let's let's let's let's call it this. I mean, Nestley
Speaker 1: is first of all out of Switzerland, so it's in
Speaker 1: some ways not Europe, and it's amazing the discount. Kirk
Speaker 1: Hartman of the Pe of Nestley called up twenty five
Speaker 1: ish versus so many of its equivalences here at thirty ish.
Speaker 1: I mean that it's tangible, isn't it? Well, very much so.
Speaker 1: And if you look at the PE ratios of Europe
Speaker 1: or Asia versus the US, it's a lot less. So um. Again,
Speaker 1: that gets to I look at two things. I think
Speaker 1: the growth of value gap is going to close, and
Speaker 1: I think that with a weaker dollar, Europe and Asia
Speaker 1: have value. Interesting Kirk, I mean, would you go so
Speaker 1: far as to consider emerging markets? I know there's a
Speaker 1: lot of discussion around when people should really start taking
Speaker 1: a look there. Well, emerging markets, UH are very much
Speaker 1: dependent on China, and I think China got the message
Speaker 1: that they can't depend for a lot of reasons on
Speaker 1: the US supply chain. So um, what's interesting to media
Speaker 1: is China is really diversifying. You look at the companies
Speaker 1: in Korea and Japan and Taiwan. And it's very clear
Speaker 1: that China is going to build its own semi conductor
Speaker 1: industry and chips, and that's why I would look to
Speaker 1: value is the extended UH periphery outside of UH Japan.
Speaker 1: Excuse me, China, Okay. Kirk Hartman with US Folks. We
Speaker 1: gotta let him go or that market will go down.
Speaker 1: Kirk Hartman with Wells Fargo, thank you. Right now, we
Speaker 1: want to get to this important interview. The Johnson family
Speaker 1: runs Fidelity and they've always done inspired hiring around the
Speaker 1: street to bring in the troops with the Boston Bread.
Speaker 1: They did that two years ago with Vadim Zlotnikov, who
Speaker 1: was definitive in Alliance Bernstein. If you were on the street,
Speaker 1: you had to read the quantitative and market UH letters
Speaker 1: and research pieces from Mrs Slatnikov. He joins US now
Speaker 1: with Fidelity, their institutional asset management president, voting. The rules
Speaker 1: have changed. Fidelities lived at, Schwab's lived at. Everybody I'll
Speaker 1: has lived it. I want you to first discuss the
Speaker 1: overtrading disease we are we have right now. Are you
Speaker 1: in Fidelity facilitating and overtrading disease that will lead to
Speaker 1: losses and ill return. Look, Fidelity has always been about
Speaker 1: long term and and you know as well as I do,
Speaker 1: of the investment outcomes comes from the underlying product design,
Speaker 1: not from the trading, and the emphasis has always been
Speaker 1: on making sure you have the appropriate product design to
Speaker 1: achieve the particular investment goals. Very importantly in your heritage,
Speaker 1: and this goes back to the great Paul Handros as well.
Speaker 1: Fidelity is at a mandate to be on perspectus what
Speaker 1: is working right now in terms of total return, narrow
Speaker 1: on perspective investment or are more broader tone. The last
Speaker 1: ten years have been very much about a very narrow
Speaker 1: market ut product that emphasized US at the expense of
Speaker 1: international equities has delivered very very strong results. The key
Speaker 1: issue is is this going to change? And we believe
Speaker 1: that it will, and that there are a number of
Speaker 1: drivers that are conspiring to argue for significantly greater degree
Speaker 1: of diversification as we move forward. That is going to
Speaker 1: be we believe, a critical decision. And just to be
Speaker 1: absolutely clear, I'm not speaking on behalf of Fidelity, but
Speaker 1: rather on the on behalf of my group and the
Speaker 1: economic research team that developed the paper. But they built
Speaker 1: on that a little bit and move away from the
Speaker 1: sixty forty because it's the forty that it's got a
Speaker 1: ton of attention in the last month or so. Can
Speaker 1: you speak to that, Dame, Absolutely. So. Look, one of
Speaker 1: the basic premises we have is that you want to
Speaker 1: invest in the basis of something that is at least
Speaker 1: noble or at least very likely about the future. And
Speaker 1: the one thing that is very likely is that the
Speaker 1: levels of death in the economy relative to GDP are
Speaker 1: going to continue to escalate. Demographics, policy, everything is inspiring
Speaker 1: to make it happen. The issue is, and this is
Speaker 1: where really the big question is, is that going to
Speaker 1: drive inflation? And we believe it will. That is a
Speaker 1: huge departure from where we've been in the past. Not
Speaker 1: only will it drive inflation, it will also alter the
Speaker 1: type of assets that are likely to under outperform in
Speaker 1: that environment. Okay, so what's likely to outperform? So there
Speaker 1: are a number of things. So, first of all, one
Speaker 1: of the interesting things, if you look back at before
Speaker 1: even two thousand three, luxury goods had the same essential
Speaker 1: inflation as the CPI following two thousand three, and if
Speaker 1: you remember the aspirational consumer using your house is getting account.
Speaker 1: All of those cliches that we've had drove massive inflation
Speaker 1: and luxury goods. We likewise we've seen asset inflation. The
Speaker 1: future inflation is going to be somewhat driven by the policy,
Speaker 1: for example, to the extent we start to see policies
Speaker 1: aimed at wealth redistribution, narrowing the income inequality gap. Many
Speaker 1: of the areas that have high elasticity to the lower
Speaker 1: and consumer spending are likely to see inflation. They've been
Speaker 1: left for dead their undervalue, and we do think some
Speaker 1: of those could I'll perform over a long term. This
Speaker 1: is not a one year forecast about him. This will
Speaker 1: be a question for you an alliance. Burnstand certainly with
Speaker 1: you a serious money at fidelity. When we read about
Speaker 1: the gamma, well, when we read about the nastack, well,
Speaker 1: when we read about fancy derivative strategies, it it destroys
Speaker 1: trust on the street. How do we regain the trust
Speaker 1: on the street if everybody's trying to outdo Soft Bank
Speaker 1: of Japan. Yeah, look, there there will always be investors
Speaker 1: that are interested in shorter horizon trading that believe they
Speaker 1: might have a point of view on things like gamma
Speaker 1: or delta. Honestly that that is a relatively small minority.
Speaker 1: I do see, you know it is happening. It is
Speaker 1: I think a function of significant liquidity if we've seen
Speaker 1: in the mark it as well as well as low
Speaker 1: interest rates, so there is a propensive Just try to
Speaker 1: seek out incremental investments. I really want to keep coming
Speaker 1: back to the point. If you really believe the statement
Speaker 1: that eighteent of your outcome is about product design, that's
Speaker 1: where people should spend eight of their time. I just
Speaker 1: got an email in All anybody wants to know is
Speaker 1: how does will dan Off do it? What's the dan
Speaker 1: Off message that has made Contra Fund do that for
Speaker 1: all these years? Hard work and natural talents, those those
Speaker 1: are generally pretty good recipe for our success. He's done
Speaker 1: a remarkable job. It's truly truly aspiring. I believe it's
Speaker 1: his thirty a year of fidelity this year, so it's
Speaker 1: it's it's been a remarkable run. It's been a remarkable run.
Speaker 1: I want you to take us back to George Vanderheid
Speaker 1: and Jeff Finnick and the rest of them, who from
Speaker 1: time to time would make bets in the bond markets.
Speaker 1: Are your equity guys using zero coupon bonds and such
Speaker 1: to make big bets now on fixed income or is
Speaker 1: that from the past. I think it's mostly from the past.
Speaker 1: I think, look there there are so many products of fidelity.
Speaker 1: There may be somebody doing uh investing in some pot
Speaker 1: but no, that's within the group that I run, which
Speaker 1: is really what I'm most familiar with. We we don't
Speaker 1: do that now, which it's mostly multi asset products, balanced
Speaker 1: products that aimed at satisfying a particular investment outcome, particular
Speaker 1: regulatory requirement, particular tax requirement, with a fantastic to catch up,
Speaker 1: going to see you again, but names at a cuff
Speaker 1: that vitality, institutional asset management. President. We move on to
Speaker 1: the depression of Washington. We can always do that with
Speaker 1: Henrietta treys Veda, Partners Director of Economic Policy Research. I
Speaker 1: guess the battle over the stimulus, Henriette is sort of
Speaker 1: like the Boston Red Sox. It's not going well. My
Speaker 1: major question is there's a huge perception among our guests
Speaker 1: of the urgency for Washington to act. Does Wash you
Speaker 1: didn't have any of that urgency? No, they really don't.
Speaker 1: Um you can see that as far back is July
Speaker 1: thirty one, when the unemployment insurance benefits expired, and nothing
Speaker 1: has changed since we passed the August eighth date with
Speaker 1: the p p P And here we are over a
Speaker 1: month after that event even and we don't have a
Speaker 1: bill that can pass the Senate, even with just the
Speaker 1: Republican conference. So today there's a vote scheduled and we'll
Speaker 1: see if it actually happens, but it will fail, and
Speaker 1: we'll see what happens after that. Not much is my expectation.
Speaker 1: What are the consequences of no stimulus bill? Unfortunately, the
Speaker 1: consequences for the Republican Party and the Democratic Party are
Speaker 1: good for the political side, bad obviously for the state
Speaker 1: of further stimulus and the potential for more unemployment checks
Speaker 1: and other fiscal stimulus for the investors or markets um.
Speaker 1: But for both parties, I see benefits on the political side.
Speaker 1: For Republicans, they get to get back to their roots
Speaker 1: buck Speaker Pelosi, which is always a good time UM
Speaker 1: and appease their conservative base who's deficit conscious and doesn't
Speaker 1: want to stimulate the economy with another two trillion dollar package,
Speaker 1: which is what this eventually would have to kind of
Speaker 1: be on the Democrats side. They can say Republicans aren't
Speaker 1: understating the severity of the crisis. President Trump's off, you know,
Speaker 1: talking to Bob Woodward instead of actually engaging on the coronavirus.
Speaker 1: It suits their narrative going into the election, and then
Speaker 1: they can pass a massive stimulus under Biden if he
Speaker 1: wins the administration in the first quarter. Um. That's what
Speaker 1: we've heard from them for a while now, and that's
Speaker 1: what I expect will ultimately come to pass. Henrietta, why
Speaker 1: are there so many, you know, citizens of the U
Speaker 1: s A undecided who they'll will for in November? Is
Speaker 1: this because they have questions on policies or something else? Um?
Speaker 1: I think that's interesting. There's a lot of late deciders.
Speaker 1: We definitely see that every cycle. What I would focus
Speaker 1: on right now is the fact that this cycle is
Speaker 1: different from that. Instead of the independence who make up
Speaker 1: those undecided voters but going for Trump at the end
Speaker 1: of the day three to one, they're now going for
Speaker 1: Joe Biden. So the undecided sliver has shrunk to about
Speaker 1: six percent of the population of the overall piece of
Speaker 1: the pie that is independent voters. Three to one, they're
Speaker 1: going to president to Vice President Biden, so that really
Speaker 1: votes poorly for President Trump. That's where elections are made,
Speaker 1: whether you're in a swing state, UM or nationwide. And
Speaker 1: that's I think why you're seeing the Biden polls nation
Speaker 1: nationally come in at plus seven plus eight, plus nine
Speaker 1: plus ten. It's because he's already captured those independent voters.
Speaker 1: So even if President Trump were able to win fifty
Speaker 1: of the remaining undecided, he would still lose the race,
Speaker 1: including the battlegrounds. UM. So the Biden team feels pretty
Speaker 1: good about that. I think the Republicans are reading that
Speaker 1: and saying, we really need to dig in, make sure
Speaker 1: we don't pass another two trillion dollar stimulus package and
Speaker 1: look like tax and spend Democrats, and we can go
Speaker 1: into the selection at least with our base galvanized, which
Speaker 1: was not what they had in late March after they
Speaker 1: passed the Cares Act. So this is full you know,
Speaker 1: cover your butt mode and campaign cycles. UM. And does
Speaker 1: the undecided voter than I mean, are they easier to
Speaker 1: get their minds to be changed from now until November? UM?
Speaker 1: The undecided voter is probably not particularly politically engaged. So
Speaker 1: all of this news cycle stuff you're seeing about wood
Speaker 1: Word or Dr Fauci or UM, what's going on with
Speaker 1: President Trump and his Nobel Peace Prize yesterday. All that
Speaker 1: stuff is really going to play in UM. I would say,
Speaker 1: like the second and third week of October. Oftentimes, that
Speaker 1: last remaining eighth of the population decides how they're going
Speaker 1: to break in the last seven days of the election.
Speaker 1: So we'll really see. I imagine there will be a
Speaker 1: couple more news cycles before then, maybe like fifty more
Speaker 1: news cycles between now and then UM, and they're going
Speaker 1: to really make their decision at the very last minute.
Speaker 1: You would assume that the economy was going to make
Speaker 1: their decision for them UM. So the administration will try
Speaker 1: to play up the next month's unemployment data UM. Democrats
Speaker 1: will try to focus on the coronavirus and try to
Speaker 1: really hammer members home, those voters home with UM, just
Speaker 1: pounding them with ads. And that's where you look at
Speaker 1: how much cash on hand does the Biden campaign have
Speaker 1: versus Trump. Obviously, Joe Biden had a record breaking hall
Speaker 1: last month. We'll see if you can keep that up.
Speaker 1: And he's UM in a very good place to essentially
Speaker 1: convince those last minute voters at the last minute in
Speaker 1: those battlegrounds, Henry had a quickly here, what ads work?
Speaker 1: Do TV ads work? Or we finally be on that
Speaker 1: where it's all digital all the time. Digital ads are
Speaker 1: definitely where the Trump administration is. You've seen them focus
Speaker 1: on that. They almost exclusively go to Facebook now and
Speaker 1: they ignore all the polling data and aggressively saying that's
Speaker 1: not even what you should be watching. Just go straight
Speaker 1: to Facebook. See what the enthusiasm is. That's where we're
Speaker 1: going to get our base. That's where we're going to
Speaker 1: turn out. There are more um, non voting white individuals
Speaker 1: in the United States that didn't even turn out. Facebook
Speaker 1: is telling us that, So we're just going to focus
Speaker 1: on advertising and Facebook. On the Democrats side, you see
Speaker 1: a much more um even hyperlocalized type of ad where
Speaker 1: they are working through individual text messages. They have a
Speaker 1: robust grassroots game dealing with that. The Act Blue app
Speaker 1: obviously helps with that, but they're also doing the generic
Speaker 1: TV ads, specially pounding Trump in those um swing STAPs.
Speaker 1: Hand it's been right, great brief. Thank you so much
Speaker 1: handing in the trays with us with Veda Partners. Thanks
Speaker 1: for listening to the Bloomberg Surveillance Podcast. Subscribe and listen
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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio