Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the
Speaker 1: top stories in the coming week from our Daybreak anchors
Speaker 1: all around the world, and straight ahead on the program.
Speaker 1: This week, a ton of economic reports for investors to consider.
Speaker 1: I'm Tom Busby.
Speaker 2: In New York.
Speaker 3: I'm Caroline Hedger in London, where we're looking ahead to
Speaker 3: what comes next for the Global Aviation Industry meeting in Lisbon.
Speaker 4: I'm Ran Curtis in Hong Kong. We look at the
Speaker 4: types of fiscal stimulus that Chinese policymakers might add to
Speaker 4: recent monetary measures.
Speaker 5: I'm Kaylee Lyones in Washington, where we're gearing up for
Speaker 5: the second GOP presidential debate.
Speaker 6: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
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Speaker 1: Well, good dat you. I'm Tom Busby. Last week, the
Speaker 1: Fed hitting pause again on interest rate hikes, but signaled
Speaker 1: that rates will remain higher for longer and at another
Speaker 1: rate hike will likely be needed this year if appropriate.
Speaker 1: This week, the Fed and investors get a host of
Speaker 1: economic reports offering insight into how the economy is holding
Speaker 1: up as we head toward the fourth quarter, against the
Speaker 1: backdrop of oil approaching one hundred dollars a barrel again,
Speaker 1: the restart of federal student loan repayments, and some labor strife.
Speaker 1: A lot happening in one week, and to try to
Speaker 1: sort out what it means. We're pleased to welcome Anawong,
Speaker 1: Chief US Economists with Bloomberg Economics and Michael McKee, Bloomberg
Speaker 1: International Economics and Policy correspondent. Thank you both for being here.
Speaker 2: We're glad to have the opportunity.
Speaker 1: Well, Anna, let's start with what we saw last week
Speaker 1: from the Fed. What changed in the Fed's outlook on jobs,
Speaker 1: inflation GDP, and of course, how that affects its dot
Speaker 1: plot as we look ahead to twenty twenty four.
Speaker 7: Yeah.
Speaker 8: I think the most notable changes in the summary of
Speaker 8: economic projections is that the Fed has completely embraced the
Speaker 8: soft landing outlook, so they revised down or really slashed
Speaker 8: the unemployment rate for this year and unemployment projections for
Speaker 8: the next two years. They now think that unemployment rate
Speaker 8: at the end of this year would be on three
Speaker 8: point eight percent, and what that means is that it
Speaker 8: would not satisfy the psalm's rules identification of recession. So
Speaker 8: whereas in the previous dot plot and SEP, the unemployment
Speaker 8: forecast basically imply that the Fed sees a recession happening
Speaker 8: this year, and looking further out, it also suggests that
Speaker 8: they see that unemployment rate does not necessarily need to
Speaker 8: go up in order to quell inflation. They now see
Speaker 8: the peak unemployment rate at four point one percent next year.
Speaker 8: So correspondingly, this is why they see that uh that
Speaker 8: that that rate should be held higher for longer. So
Speaker 8: in the plot, they still see one more hike for
Speaker 8: this year, and they see that rates would stay at
Speaker 8: five point one percent in twenty twenty four and on
Speaker 8: the upper threes in twenty twenty five. And so that
Speaker 8: is entirely consistent and driven by the improved unemployment outlook.
Speaker 1: And Michael inflation. They've also seen a little change in
Speaker 1: their target for inflation over the next year.
Speaker 2: Well, this is the part that's a little inconsistent. They
Speaker 2: did raise their growth forecasts and lowered their unemployment forecasts,
Speaker 2: but they also predict that inflation is going to go down,
Speaker 2: which implies that this soft landing in this stronger than
Speaker 2: expected economy isn't going to be particularly inflationary, which is
Speaker 2: fine if if that's what happens, But then it raises
Speaker 2: the question of rates. Why are you still holding in
Speaker 2: reserve the opportunity to raise rates if you think that
Speaker 2: you're not going to need it. Obviously they want to
Speaker 2: keep their options open. Nobody wants to be backed into
Speaker 2: a corner and suddenly have to apologize for coming back
Speaker 2: in and raising rates when nobody expected it. But it
Speaker 2: does suggest that they see a kind of new regime here.
Speaker 2: And certainly the Phillips curve at least appears to be
Speaker 2: dead at this point as far as the Fed is concerned.
Speaker 2: Unemployment going down and no inflation at all, which is
Speaker 2: kind of a major turn in their thinking.
Speaker 1: And how about economic growth, because we get a GDP
Speaker 1: read for the Springs second quarter for this year, but
Speaker 1: what's their projection change on growth?
Speaker 2: Well, they raised their growth forecasts significantly, more than doubled
Speaker 2: it for this year and then raised it by four
Speaker 2: tenths for next year to one and a half percent.
Speaker 2: That seems reasonable given what we are seeing in the
Speaker 2: economy right now, although, as Jim Bullard cautioned me this week,
Speaker 2: there's always recency by in your forecast and you're looking
Speaker 2: at the most recent numbers, so something could go wrong.
Speaker 2: And that's where I turn it over to Anna, because
Speaker 2: Anna has been predicting something is going to go wrong
Speaker 2: in the fourth quarter.
Speaker 8: Yeah, Mike, I thought what Mike's One of the most
Speaker 8: interesting things that Mike just said is that there seems
Speaker 8: to be a regime change in thinking within the FOMC,
Speaker 8: really embracing this immaculate disinflation idea. But the thing is,
Speaker 8: the outlook in the next couple of weeks is highly uncertain.
Speaker 8: We have the potential widening escalation in the UAW strikes,
Speaker 8: oil price going up to one hundred dollars per barrel,
Speaker 8: and also potential government shutdown. Yet in the FOMC forecast,
Speaker 8: there's a section that asked participants about their uncertainty over
Speaker 8: the forecast, and interestingly, across all the economic variables they
Speaker 8: indicate that there's less uncertainty. So basically Not only is
Speaker 8: the FOMC projecting a regime shift and this immaculate disinflation,
Speaker 8: they're really certain about it, with more confidence over this outlook,
Speaker 8: even as the economic environment we're facing is actually extremely uncertain.
Speaker 8: In the next couple of weeks.
Speaker 1: Wow, And in this next week, we're going to see
Speaker 1: something that could change things. It's the Fed's preferred measure
Speaker 1: of inflation, the personal consumption Core price Index. Mike, I
Speaker 1: know this is closely watched by you as well. What
Speaker 1: are we looking at because now we'll shift from what
Speaker 1: happened to what we're going to see ahead this week.
Speaker 2: Well, there's two reports next Friday. One is on a PCEE,
Speaker 2: which a lot of people will be watching. Of course
Speaker 2: at the FED, the expectation is we're going to see
Speaker 2: a rise in the headline number brought about by rising
Speaker 2: energy prices. It's the core that the FED is going
Speaker 2: to be focused on, and there economists see no change
Speaker 2: in the rate of inflation on a month over month basis,
Speaker 2: just two tenths of eight percent, but that would push
Speaker 2: the year over year down to three point nine percent,
Speaker 2: which is a significant drop going forward. For the FED.
Speaker 2: To get the forecast, it has for the end of
Speaker 2: the year. It probably means inflation needs to come in
Speaker 2: a little bit even stronger. But the Fed is going
Speaker 2: to look past oil prices they always do. They're going
Speaker 2: to relate that to the economy by looking at the
Speaker 2: later release on Friday, the University of Michigan's Expectations Index
Speaker 2: Sentiment Index, and they'll be looking at what people think
Speaker 2: inflation is going to be like, because if oil prices
Speaker 2: keep going up and gasoline prices keep going up, then
Speaker 2: what you have is a question about inflation expectations becoming unanchored.
Speaker 2: So they'll want to make sure that people aren't starting
Speaker 2: to think inflation's getting embedded in the economy. So two
Speaker 2: important reports next Friday. Also as part of that PC report,
Speaker 2: we get personal spending numbers, and that'll be interesting because
Speaker 2: we saw a little bit of weakness in the retail
Speaker 2: sales numbers, but those don't include services, so we'll see
Speaker 2: if people are still outspending or if they're starting to
Speaker 2: pull back.
Speaker 1: Speaking of pulling back, because I mentioned earlier, is the
Speaker 1: federal student loan repayments which will start this coming week
Speaker 1: by October first their due, and that may change spending
Speaker 1: habits for millions of Americans who owe billions of dollars. Anna,
Speaker 1: what's your take on that?
Speaker 8: Yeah, actually, we have already as the student loans borrowers
Speaker 8: repaying a lot of that loan starting already in August,
Speaker 8: and so we estimate that that would mean possibly one
Speaker 8: hundred billion per year less less in consumption but put
Speaker 8: toward repaying student loans. So that could shave off as
Speaker 8: much as zero point six percent from consumption annually. And
Speaker 8: if this change happened is concentrated with it and a quarter,
Speaker 8: it could have a pretty significant close to one percentage
Speaker 8: point drag on consumption.
Speaker 1: Well, now, there's also a ton of housing data coming up,
Speaker 1: including two reads on home prices in July. We have
Speaker 1: new home sales, pending home sales for August, interest rates
Speaker 1: solidly above seven percent, home prices just after all time highs. Michael,
Speaker 1: what do you expect to see and is there any
Speaker 1: good news in housing?
Speaker 2: Well, there has been good news for home builders because
Speaker 2: people can't buy existing homes at this point. There isn't
Speaker 2: much inventory, so they're buying new homes. So we will
Speaker 2: get a report on new homes next week and it
Speaker 2: is expected to go down a little bit some of
Speaker 2: that may be weather related. We shall see housing starts
Speaker 2: were off a bit, but likely weather related. We did
Speaker 2: see last week the existing home sales numbers fall by
Speaker 2: another seven tenths to just over four million, the weakest
Speaker 2: basically this year. But prices are going up, which just
Speaker 2: makes it even harder to get the whole industry going,
Speaker 2: and it is going to take a while. One of
Speaker 2: the things we don't know is how low do mortgage
Speaker 2: rates have to go. In other words, how much does
Speaker 2: the FED have to cut before you reach a level
Speaker 2: at which people will go back into the mortgage market.
Speaker 2: Right now is certainly the existing home side is frozen.
Speaker 6: Yeah. Oh, it's terrible out there.
Speaker 1: And Anna Wong, Chief US Economists with Bloomberg Economics, Michael McKee,
Speaker 1: Bloomberg International Economics and Policy correspondent, A lot to look
Speaker 1: forward to. I want to thank you both for joining
Speaker 1: us this week. Coming up on Bloomberg Daybreak weekend, we
Speaker 1: take you to Europe and preview the World Aviation Festival
Speaker 1: in Lisbon. I'm Tom Busby and this is Bloomberg. This
Speaker 1: is Bloomberg Daybreak Weekend, our global look ahead at the
Speaker 1: top stories for investors in the coming week, I'm Tom
Speaker 1: Busby in New York. Up later in our program we
Speaker 1: preview the second Republican presidential debate minus Donald Trump. But first,
Speaker 1: the World Aviation Festival is builled as one of the
Speaker 1: biggest annual events for the industry, and it's taking place
Speaker 1: this week in Lisbon. For more, let's head to London
Speaker 1: and bring in Bloomberg Daybreak europe banker Caroline Hepgar Tom.
Speaker 3: Global aviation faces quite a few challenges, sawing crude all
Speaker 3: prices at a time when airfares are already high, labour costs,
Speaker 3: squeezing profit margins, a sluggish supply chain, and growing emphasis
Speaker 3: on the environmental impact of the industry. Now. I discussed
Speaker 3: some of these with Bloomberg's aerospace reporter Kate Duffy. She
Speaker 3: has the lucky job of reporting from Lisbon in the
Speaker 3: next few days on the plans from commercial airlines, airports,
Speaker 3: and all the other businesses that supply and support them,
Speaker 3: including more than one hundred startups. I began by asking
Speaker 3: her who she thinks is going to be attending the
Speaker 3: World Aviation Festival.
Speaker 9: There'll be a whole host of attendees at the World
Speaker 9: Aviation Festival this year, from major airlines, airports, suppliers and
Speaker 9: other aviation groups. Really so the biggest names from airlines
Speaker 9: are Emert CEO, Tim Clark, IAG CEO, Louis Galago and
Speaker 9: Ryan az Eddie Wilson, but a range of other airlines
Speaker 9: are also attending, well known names including easy Jet, British Airways,
Speaker 9: TAP and the new read Air. I've also counted around
Speaker 9: thirty airports across the world or on the list speaking
Speaker 9: on panels and roundtables. And then there are the suppliers,
Speaker 9: the data providers, travel agents there and other aviation groups
Speaker 9: speaking and attending. So I'm expecting some good debates to
Speaker 9: come up over the two days on there.
Speaker 3: There's a lot moving for the industry. What do you
Speaker 3: think the focus is going to be this year?
Speaker 9: So looking at the agenda, many airlines will be discussing
Speaker 9: the hurdles they've faced over the past year and also
Speaker 9: how they're looking to overcome those future challenges. For example,
Speaker 9: TAP CEO Rodriguez has an interview with Bloomberg Sky Johnson
Speaker 9: about difficulties and re emerging stronger. And there's also a
Speaker 9: panel oneable for seeable headwinds for aviation in twenty twenty four,
Speaker 9: and it's worth mentioning also that it's not long before
Speaker 9: the Dubai Air Show kicks off and exects like Tim
Speaker 9: Clark may give an insight into what we can expect
Speaker 9: further down the line. Of course, sustainability and the environment
Speaker 9: with the scaling up of sustainable aviation fuel will play
Speaker 9: a part, as well as supply chain challenges post COVID
Speaker 9: recovery demand now we're heading into the winter, and of
Speaker 9: course air traffic control disruption, which we've seen a lot
Speaker 9: of this summer.
Speaker 8: Yeah.
Speaker 3: Absolutely. What do you think the biggest issues though, are
Speaker 3: going to be when it comes to the discussions. You know,
Speaker 3: you mentioned a few of them that have really rattled
Speaker 3: the industry and we haven't even touched on the supply
Speaker 3: chain overhang. Yeah.
Speaker 9: For many airlines the air traffic control disruption and strikes
Speaker 9: in Europe were a massive frustration as they caused cancellations
Speaker 9: and delays and not a good look when you're stranding
Speaker 9: passengers around the world too, and the recent technical failure
Speaker 9: at NATS in the UK sent airlines into turmoil and
Speaker 9: it took them days to recover, which some bosses like
Speaker 9: Ryanair's Michael O'Leary and EasyJet CEO have really criticized. So
Speaker 9: I think some of the discussions will be on how
Speaker 9: the industry can and should avoid these problems in the
Speaker 9: future and whether that ramping up hiring or installing better
Speaker 9: tech systems is the way forward. And as you mentioned,
Speaker 9: another issue which is widespread across the aviation industry at
Speaker 9: the moment is this sluggish supply chain backlog. You know,
Speaker 9: manufacturers are lacking spare parts for aircraft and therefore airlines
Speaker 9: are having to wait much longer to fill up their
Speaker 9: fleets and it's frustrating for those airlines which are now
Speaker 9: having to deal with some of the recently discovered engine
Speaker 9: issues that require some engines to be removed and those
Speaker 9: are the Pratt and Whitney engines over the next three years.
Speaker 9: So there will be concern about the demand as well
Speaker 9: for the next travel season. You know, summer was a
Speaker 9: blowout for airlines with many reporting better than expected results,
Speaker 9: but that the next focus is on how they can
Speaker 9: sustain the demand in this winter in this winter season.
Speaker 3: Yeah, especially as oil prices are going up, and obviously
Speaker 3: that has a huge impact on the industry.
Speaker 9: Yeah, oil is the singlest biggest, single biggest expense for
Speaker 9: an airline, so many have struggled to cope with the
Speaker 9: high oil prices. Recently. You know, some air US carriers
Speaker 9: slashed their profit outlooks for the third quarter. They blamed
Speaker 9: one of the factors on being a jump in oil prices.
Speaker 9: But when oil prices jump, SODA's inflation, and this means
Speaker 9: that the costs can be passed on to the customers.
Speaker 9: And at a time of the cost of living crisis,
Speaker 9: you know, it's taking a toll with mortgages, groceries and
Speaker 9: energy prices jumping and more price conscious passengers might be
Speaker 9: thinking twice about spending on a lavish holiday or a
Speaker 9: plane ticket abroad. So it's clear oil volatility is a
Speaker 9: big pressure point in aviation at the moment, as the
Speaker 9: outlook for travel post summer remains quite uncertain.
Speaker 3: Yeah, what is the passenger experience then?
Speaker 9: How all of this?
Speaker 3: What has it been like for travelers recently? Is it
Speaker 3: the end of kind of revenge travel that we saw
Speaker 3: post the pandemic.
Speaker 9: Yeah, so COVID nineteen posted a huge challenge for airlines
Speaker 9: and of course passengers were severely disrupted by this, and
Speaker 9: this year has been probably just as bad with the
Speaker 9: air traffic control disruption and strikes that we've seen. In
Speaker 9: terms of revenge travel, there is this sense that passengers
Speaker 9: are spending you know, maybe more on onto some passengers
Speaker 9: spending more on luxury tickets. But there is a concern
Speaker 9: about whether price hikes will happen further and whether this
Speaker 9: will put customers off in the future from buying plane tickets.
Speaker 3: Yeah. Technology wise, then this event has all the suppliers.
Speaker 3: So what sort of things do you think they're going
Speaker 3: to be demonstrating or discussing as the kind of solutions
Speaker 3: for the industry.
Speaker 9: There's lots on airport technology, how to make the passenger
Speaker 9: experience more seamless, lots on customer experience AI, just making
Speaker 9: the process for passengers more smooth when flying and cutting
Speaker 9: out the old fashioned manual ways of doing things. Sometimes
Speaker 9: we've seen this go wrong in the past. Some airlines
Speaker 9: have trouble with their apps. You know, passengers off to
Speaker 9: complain on social media about the accessibility of an airline's app.
Speaker 9: So there seems like there will be panels on how
Speaker 9: the industry can make the digital side more comfortable for
Speaker 9: the passengers.
Speaker 3: And there'll be lots of airport leaders there as well.
Speaker 3: I mean about sixty percent of the festival is made
Speaker 3: up of sort of European players, but also quite a
Speaker 3: lot from the Middle East and the rest of the world.
Speaker 3: There will be airports represented Dubai, Hong Kong, Winnipeg. They're
Speaker 3: all speaking at the event. What sorts of things do
Speaker 3: you think they're going to be thinking about?
Speaker 9: So from what the agenda says, airports will be discussing
Speaker 9: how to make their operations more digital, how to improve
Speaker 9: the airport experience for passengers through tech and sustainability. Some
Speaker 9: airports have had a rough ride this summer, whether having
Speaker 9: to cater for passengers who've experienced delays and cancelations, or
Speaker 9: having to deal with natural flooding disasters extreme weather events. Others,
Speaker 9: such as Amsterdam's ship On airport, have struggled with handling
Speaker 9: luggage and that's led to a lot of passengers not
Speaker 9: getting their bags on time. So I think how airports
Speaker 9: are going to go forward with the tech and help
Speaker 9: passengers make their travel more smooth is what is going.
Speaker 3: To be discussed at the festival. Yeah, that was Bloomberg's
Speaker 3: aerospace reporter Kate Duffy talking to me ahead of the
Speaker 3: World Aviation Festival in Lisbon. She'll be there along with
Speaker 3: Bloomberg TV's Guy Johnson. I'm Caroline Hepger here in London.
Speaker 3: You can catch us every weekday morning for Bloomberg Daybreak Europe,
Speaker 3: beginning at six am in London. That's one am on
Speaker 3: Wall Street.
Speaker 1: Tom Our thanks to Bloomberg day Break Europe. Ankor Caroline
Speaker 1: Hepgar and coming up on Bloomberg Daybreak weekend, the second
Speaker 1: Republican presidential candidate's debate takes place at the Ronald Reagan
Speaker 1: Presidential Library in California, and we will get a preview
Speaker 1: with Bloomberg's Kaylee Lines. I'm Tom Busby and this is.
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Speaker 6: app in Bloomberg Radio dot Com. This is Bloomberg Daybreak weekend.
Speaker 1: I'm Tom Busby in New York with your global look
Speaker 1: ahead at the top stories for investors in the coming week.
Speaker 1: Republican presidential candidates are gearing up for round two, preparing
Speaker 1: for the second primary debate in SeeMe Valley, California, but
Speaker 1: once again, the front runner won't be on stage for more.
Speaker 1: Let's head to our Bloomberg ninety nine one news from
Speaker 1: in Washington and Bloomberg Sound On co host Kaylee Lines.
Speaker 5: Yeah, that's right. This coming Wednesday, candidates will take the
Speaker 5: stage once again, although there will probably be fewer of
Speaker 5: them this time around than there were at the first debate.
Speaker 5: The threshold to qualify is higher. One thing we know
Speaker 5: for sure, though, is that former President Donald Trump, who
Speaker 5: remains the front runner in this GOP race, will not
Speaker 5: be there. He's going to counter program again. Here to
Speaker 5: talk about all of it with us are two of
Speaker 5: our all star national politics reporters, Gregory Cordy and Ryan
Speaker 5: Teague Beckweth, who are here with me in Washington. So, Ryan,
Speaker 5: if I could just begin with you, who has the
Speaker 5: most to gain or lose at this point in the
Speaker 5: election cycle, given what we're seeing and polling lately. How
Speaker 5: polls have changed since the first debate. Who needs this
Speaker 5: to work out in round two?
Speaker 10: I mean, this is a shot for Ron DeSantis to
Speaker 10: try to kind of revitalize his campaign. At this point,
Speaker 10: he is polling about as far behind Donald Trump as
Speaker 10: Robert F. Kennedy Junior is polling behind Joe Biden in
Speaker 10: the Democratic primaries, So he needs any sort of thing
Speaker 10: he can get to juice that campaign. I think it's
Speaker 10: probably more of an opportunity for Nikki Haley or Tim Scott,
Speaker 10: some of the people who are running as kind of
Speaker 10: the backup plan in case the Santus falters to try
Speaker 10: to assert themselves, get some kind of moment that people
Speaker 10: will recall. Haley I think had a brief moment at
Speaker 10: the last debate when she was talking about abortion. But
Speaker 10: I don't know. I don't know if they'll it's still
Speaker 10: a crowded field. I don't know if they'll have that chance.
Speaker 5: Gregory, what do you think about this?
Speaker 10: Well?
Speaker 11: I think it's an important debate for everyone on that stage, obviously,
Speaker 11: but especially for the ones actually at the lower end
Speaker 11: of the pulling range where the Republican Party has designed
Speaker 11: this debate season to start to weed out some of
Speaker 11: these lower pulling candidates, and so for the first debate,
Speaker 11: you had to pull with just one percent in three
Speaker 11: national poles to get on the stage. Now that threshld's
Speaker 11: moving up to three percent, we don't know what the
Speaker 11: threshold is going to be for the third debate, but
Speaker 11: it's going to be even higher. So for candidates like
Speaker 11: Tim Scott who we haven't mentioned yet, or Chris Christy,
Speaker 11: certainly Doug Bergham and Asa Hutchinson, if they even make
Speaker 11: the second debate stage, are going to be under a
Speaker 11: lot of pressure to really have a turnaround moment, because
Speaker 11: as soon as they drop off the stage, it's hard
Speaker 11: to imagine them coming back. And then of course Ron
Speaker 11: de Santis, of course he has his polls have been
Speaker 11: moving in the wrong direction. He needs to turn that
Speaker 11: around and so needs to have a breakout performance. But look,
Speaker 11: this is also a debate where who knows what the
Speaker 11: ratings are going to be. It's a little bit more
Speaker 11: of a niche audience. It's gonna be on Fox Business
Speaker 11: News as opposed to Fox News may have a smaller audience,
Speaker 11: it's in a different time zone, so it's really going
Speaker 11: to take a big moment for any one of these
Speaker 11: candidates to get the attention they need to be seen
Speaker 11: as a serious challenger to Donald Trump.
Speaker 5: Yeah, Gregory, I'm glad you brought up the candidates who
Speaker 5: are kind of at the lowest rung, if you will,
Speaker 5: pulling at the moment, because we saw after the first debate,
Speaker 5: shortly thereafter Francis Sorez, the mayor of Miami, who hadn't qualified,
Speaker 5: dropped out of the race. And I personally have asked
Speaker 5: Burgham and Putchison if they would drop out if they
Speaker 5: didn't qualify for the second They didn't tell me yes,
Speaker 5: But I guess we'll all kind of have to wait
Speaker 5: and see on that one. But is this the point?
Speaker 5: Are we now at the point of the race where
Speaker 5: we will start to see more of a thinning of
Speaker 5: a field, perhaps like many candidates dropping at once, Gregory, Yeah.
Speaker 11: I mean, I think the lesson that the Republican Party
Speaker 11: learned through twenty sixteen is that having too many candidates
Speaker 11: in the field. And remember at this point in twenty fifteen,
Speaker 11: we had what seventeen different candidates.
Speaker 5: Yeah, two different stages were required.
Speaker 11: Do you needed to spread the debate over two different nights?
Speaker 11: There was a so called kids table debate, right, and
Speaker 11: that was just untenable, and the Republican Party decided we're
Speaker 11: not going to have that situation again, because that's a
Speaker 11: situation that it led to this, really the Trump vote
Speaker 11: and then the anti Trump vote being divide over two
Speaker 11: or three different candidates. Trump was able to divide and conquer.
Speaker 11: Trump may still yet be able to divide and conquer.
Speaker 11: But the idea is, you need to present Republican voters
Speaker 11: with a smaller menu of choices or else really it's
Speaker 11: going to be Trump by default.
Speaker 5: So he brings up Trump Ryan, who was the elephant
Speaker 5: not in the room, but very much in the room
Speaker 5: at the first debate, and this is going to be
Speaker 5: the same thing, right, He's not going to be there
Speaker 5: again once again. He's counter programming, this time by being
Speaker 5: in Detroit to talk to the United Auto Workers. Talk
Speaker 5: to us about the effect of that.
Speaker 10: Yeah, I mean, well, obviously it robs the room of
Speaker 10: a lot of the crackle and electricity that you get
Speaker 10: from having a real, live debate, you know, I mean
Speaker 10: having a bunch of people sort of arguing intramurally. I
Speaker 10: think it hurt him a little bit in the last
Speaker 10: time because having all these people on stage talking amongst themselves,
Speaker 10: even though they were often talking about him without him there,
Speaker 10: I think kind of was the first glimpse you might
Speaker 10: have at a post Trump Republic party and what that
Speaker 10: might look like and what the debates it might have,
Speaker 10: you know, But it also means that the people who
Speaker 10: are tuning in to watch this are like, really not normal.
Speaker 10: I include myself in that, you know, I mean being
Speaker 10: paid to watch it. It's my job. But like, you know,
Speaker 10: who's going to turn into watch a debate without the
Speaker 10: front runner in it. It's going to be like a
Speaker 10: really select audience of kind of people who are really
Speaker 10: into politics. So that's why I think probably the more
Speaker 10: important thing at the debate will be to score the
Speaker 10: kind of memorable moment that gets replayed on TV, that
Speaker 10: gets goes viral on social media, so that the people
Speaker 10: who aren't tuning into this see that, because that's a
Speaker 10: chance for some free publicity, and I think it's also
Speaker 10: a chance for you to create some content for your
Speaker 10: super pac to use. The Desanta super Pac has done
Speaker 10: an ad that just basically featured his response to a
Speaker 10: question about the border with Mexico. You know, they basically
Speaker 10: turned that into an ad and that's a great way
Speaker 10: for him to not coordinate with them, which he's not
Speaker 10: legally allowed to do, by putting this out in the
Speaker 10: public domain and them to borrow that. So I think
Speaker 10: it may be more important to have a moment than
Speaker 10: to actually do well over the entire debate.
Speaker 5: You have me Ryan thinking back to some of the
Speaker 5: moments of the first debate that at least stick out
Speaker 5: in my mind, one of them being former Governor Chris
Speaker 5: Christi telling Vivek Ramaswami he sounded like chat gpt. Another
Speaker 5: being former Governor Nikki Haley telling Vivek Ramaswami that he
Speaker 5: has no foreign policy experience, and it shows those were
Speaker 5: kind of two SoundBite moments, if you will. That's what
Speaker 5: we would call it in my TV world or radio
Speaker 5: world as well. Are we still talking about Ramaswami in
Speaker 5: the same way, Gregory? It seems like he did get
Speaker 5: that kind of spike at least in you know, being
Speaker 5: something people were talking about on social media and the
Speaker 5: immediate aftermath of the first debate. But where is his
Speaker 5: candidacy now?
Speaker 11: Every other candidate on that stage other than Ramaswami has
Speaker 11: a long career in politics, and has cross paths with
Speaker 11: each other at some But if you had asked these
Speaker 11: seven other candidates what they knew about Vivek Ramaswami going
Speaker 11: into that debate, none of them had ever met him before.
Speaker 11: This is the first time they'd ever seen him, and
Speaker 11: really all of them had sort of an interest in
Speaker 11: knocking him down a peg, partly because he is the outsider.
Speaker 11: He was seemed to be the easy target. Ronda Santis
Speaker 11: is certainly threatened by Ramaswami's rise. He's in third place
Speaker 11: and rising in a lot of the polls. And for
Speaker 11: the people below Ramaswami, obviously they want to be the one,
Speaker 11: if not to get the second place. Obviously they all
Speaker 11: like to be the first place, but if not to
Speaker 11: get a second place, to get the third place to
Speaker 11: then be the challenger to Disantis. And so there was
Speaker 11: that dynamic there. And frankly, Ramaswami is an easy candidate
Speaker 11: to go after just because his positions on issues, as
Speaker 11: expressed in his different books that he's written and on
Speaker 11: the campaign trail are a little inconsistent, to say the
Speaker 11: least in a little unorthodox, and so that for these
Speaker 11: more conventional candidates makes them an easy target. So yeah,
Speaker 11: I would look for that dynamic to continue next week.
Speaker 5: All right, Well, I think it's going to be interesting
Speaker 5: either way, no matter who's there or who's not. Looking
Speaker 5: forward to both of your coverage of it when it
Speaker 5: happens next Wednesday. That's Ryan Tegue Beck with and Gregory
Speaker 5: Cordy national politics reporters here at Bloomberg, and Tom, we'll
Speaker 5: send it back to you.
Speaker 1: Thank you, Kaylee. That was Bloomberg Sound On co host
Speaker 1: Kaylee Lines reporting from our Bloomberg ninety nine one newsroom
Speaker 1: in Washington, and you can hear sound on weekdays one
Speaker 1: to three pm on Bloomberg Radio. Coming up on Bloomberg
Speaker 1: day Break weekend, we head to Asia to see what
Speaker 1: China can do to power up its economy again. I'm
Speaker 1: Tom Busby, and this is Bloomberg. This is Bloomberg day
Speaker 1: Break weekend, our globe look ahead at the top stories
Speaker 1: for investors in the coming week. I'm Tom Busby in
Speaker 1: New York. What fiscal stimulus would it take for China
Speaker 1: to power up its economy again and the timing of it.
Speaker 1: Let's get to Bloomberg day Break Asia co host Brian
Speaker 1: Curtis to find out more.
Speaker 4: Tom China's economy has shown some signs of bottoming out
Speaker 4: of late, but that doesn't mean that investors are coming back.
Speaker 4: Foreign funds have continued to flow out. There appears to
Speaker 4: be some lingering tensions between policymakers thinking that they're on
Speaker 4: the right track and others who are calling for more
Speaker 4: aggressive support now. In the past few days, the monetary
Speaker 4: policy had at the PBOC seid the central Bank has
Speaker 4: the tools to get the job done, and the former
Speaker 4: PBOC Governory Gung said the PBOC should ramp up policies.
Speaker 4: In the meantime, the city of Guangzhou eased home buying
Speaker 4: rules for non residents. Many investors out there are calling
Speaker 4: for more fiscal support. We heard from Helen Ju at
Speaker 4: n F Trinity.
Speaker 7: I do think that monetary policy has already played its role,
Speaker 7: and I think what's more important going forward is going
Speaker 7: to be whether the property segment can stabilize. That's going
Speaker 7: to be very crucial in terms of the fact that
Speaker 7: it's you know, two thirds of household wealth. It's going
Speaker 7: to be really impactful in terms of consumer confidence and
Speaker 7: spending and consumption overall. So I actually think that there
Speaker 7: needs to be more policy support on the fiscal or
Speaker 7: property fronts, and that's likely to come through in the
Speaker 7: next three to six months.
Speaker 4: Helen ju Managing director and CIO at NF Trinity. Joining
Speaker 4: us now is Jill desis Bloomberg's China Economy and Government editor. So, Jill,
Speaker 4: what are you hearing from investors about the kind of
Speaker 4: fiscal support they'd like to see.
Speaker 12: I think that at this point in this recovery cycle,
Speaker 12: it's really about, I guess, trying to figure out what
Speaker 12: else is happening with the property sector. I think we've
Speaker 12: known for a while that, you know, China's been incredibly
Speaker 12: reluctant to roll out any kind of giant fiscal stimulus.
Speaker 12: I don't think they're going to be running around cutting
Speaker 12: checks for everybody and trying to spur spending in the economy.
Speaker 12: That I'm also just not even sure how effective that
Speaker 12: would really be when you know, the type of massive
Speaker 12: fiscal stimulus I think is what China is really worry
Speaker 12: about because it's what they believe got them into trouble. Uh,
Speaker 12: you know several years ago when they've tried rolling up
Speaker 12: massive stimulus. So at this point, I think that what
Speaker 12: you just saw in Guangzhou, for example, might be a
Speaker 12: little bit more realistic in terms of how exactly the
Speaker 12: country is trying to use the property sector. So what
Speaker 12: Gangho did, so this is one of this one of
Speaker 12: China's four biggest cities, the Tier Tier one cities, they
Speaker 12: just eased some home buying rules so that people who
Speaker 12: are non residents of these urban districts, as long as
Speaker 12: they've been paying taxes in the area for a couple
Speaker 12: of years, they can actually buy property there. So buy
Speaker 12: one home there, and so that's the kind of thing
Speaker 12: that maybe eases some of these really really massive restrictions
Speaker 12: that have been on the property sector for a while.
Speaker 12: And then you know, tris to spur spending that way.
Speaker 12: I think that that's probably more realistic in terms of
Speaker 12: incremental measures that way that you might see going forward.
Speaker 4: But Jill, if Tier one and here two cities do
Speaker 4: further relax home purchase restrictions, that might draw a lot
Speaker 4: of funds into the big cities and away from the
Speaker 4: smaller cities where you see the developers that have been
Speaker 4: in trouble, like Country Garden and Agile. So is that
Speaker 4: the type of thing that policymakers should do.
Speaker 12: Yeah, I mean I think that that's the tricky balance
Speaker 12: part of this, right, maybe a reason why you're not
Speaker 12: seeing massive amount of rollbacks in terms of policies. I mean,
Speaker 12: at this point, look what Guangzhou just did, for example.
Speaker 12: I mean that's easing some restrictions on first time home purchases.
Speaker 2: Right.
Speaker 12: I think that we've also seen, you know, within the
Speaker 12: past couple of weeks, and easing of existing mortgages and
Speaker 12: such across the country. It's really about finding a tricky
Speaker 12: balance because also just removing all of these restrictions on
Speaker 12: how many homes you can buy, yeah, certainly could I
Speaker 12: think kind of come back to bite the economy in
Speaker 12: a bad way. I Mean, part of the reason why
Speaker 12: the property sector is in this mass is because of
Speaker 12: a lot of speculative buying that really ramped up over
Speaker 12: the last several years. You've got companies I'm promising homes
Speaker 12: that they can't actually build in time. You've got people
Speaker 12: paying mortgages like houses that don't even really exist. So
Speaker 12: I think at this point it's a measured approach that
Speaker 12: I think the government is trying to pull off. But
Speaker 12: it's very tricky here.
Speaker 4: Jill, Thank you. Jill Desis Bloomberg's China Economy and Government Editor.
Speaker 4: I'm Brian Curtis in Hong Kong along with Doug Chrishner.
Speaker 4: You can catch us every weekday here for Bloomberg day
Speaker 4: Break Asia beginning at six am in Hong Kong and
Speaker 4: six pm on Wall Street tom.
Speaker 1: Our thanks to Bloomberg day Break Asia co host Brian Curtis.
Speaker 1: And that does it for this edition of Bloomberg day
Speaker 1: Break Weekend. Join us again Monday morning at five am
Speaker 1: Wall Street Time for the latest on markets overseas and
Speaker 1: the news you need to start your day. I'm Tom Buzzby.
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