WEBVTT - Surveillance: Fed Vs. The Markets With MUFG's Rupkey 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:30.680 Bloomberg dot Com, and of course, on the Bloomberg Chris Ruskin, 0:00:30.960 --> 0:00:34.000 let's bring in right now. The politeness is, you don't 0:00:34.000 --> 0:00:39.879 eat your lunch until the speaker's done speaking strange and 0:00:41.000 --> 0:00:45.600 everyone else lunch. Everyone is starving, everyone wants to leave 0:00:45.640 --> 0:00:50.680 at that point. Iple I've never understood that. I've got 0:00:50.680 --> 0:00:52.760 to admit I don't enjoy it because everybody else does 0:00:52.760 --> 0:00:56.080 start eating lunch. And whilst whoever it is, whether it's 0:00:56.120 --> 0:00:58.440 the chairman or the vice chat does speak to the 0:00:58.480 --> 0:01:01.440 Economic club in New York or you. Here is the cutlery, 0:01:01.800 --> 0:01:06.160 the folks and knives hitting the plates for you because 0:01:06.160 --> 0:01:10.399 we're are your polite above the organist. Can you get 0:01:10.440 --> 0:01:13.240 to Mr Ruby, How are you doing? I'm trying. I'm 0:01:13.319 --> 0:01:14.960 doing okay, Chris. What are you looking for from the 0:01:15.000 --> 0:01:18.800 vice chairman likes it today? Well, he's you know, it's 0:01:18.840 --> 0:01:21.280 kind of the Fed versus the markets. At this point, 0:01:21.400 --> 0:01:24.400 FED funds futures pretty much are discounting one and a 0:01:24.440 --> 0:01:30.280 half rate cuts by the December meeting. Eurodollar futures are 0:01:30.319 --> 0:01:32.880 looking for like three rate cuts by the end of 0:01:33.040 --> 0:01:39.039 next year. Come on the markets, twelve. The market totally disagrees, 0:01:39.160 --> 0:01:44.800 the market. The market knows all. Yeah, I think clad Chris, 0:01:44.800 --> 0:01:48.000 I think the problem. Well, the FED messaging on this 0:01:48.040 --> 0:01:50.320 has been kind of messy, right, And they're gonna ask 0:01:50.600 --> 0:01:53.960 Clarada about this, because don't forget he's the guy who 0:01:54.080 --> 0:01:58.080 came out earlier this year and said, uh, talked about 0:01:58.080 --> 0:02:01.520 the risk risk management style rate cuts in the nineties. 0:02:01.920 --> 0:02:05.160 Where to me, those weren't risk risk management style just 0:02:05.240 --> 0:02:09.040 in case rate cuts. They were done because we had 0:02:09.080 --> 0:02:11.920 a near miss with a recession in Claire is going 0:02:11.960 --> 0:02:14.280 to talk as he talked in his conversation with me, 0:02:14.400 --> 0:02:17.239 and as he spoke in his conversation to Michael McKee. 0:02:17.280 --> 0:02:21.200 Full disclosure, folks, McKee had a smarter interview. He talks 0:02:21.240 --> 0:02:28.119 about solid economy defined solid well at the moment, what 0:02:28.160 --> 0:02:32.519 we're creating upwards of two thousand jobs per month. We 0:02:32.639 --> 0:02:37.400 got a three point six percent low unemployment rate. We 0:02:37.440 --> 0:02:40.280 had three point two percent g d P. You know, 0:02:40.440 --> 0:02:44.520 that's kind of rear view mirror stuff. But everything looks okay. 0:02:44.520 --> 0:02:47.120 I mean, look at consumer confidence. We used to think 0:02:47.120 --> 0:02:50.360 in the old days of FED would just open the 0:02:50.360 --> 0:02:53.720 newspaper and say what is a consumer think? And then 0:02:53.800 --> 0:02:58.760 vote accordingly the FED and consumer the consumers reckoning of 0:02:58.800 --> 0:03:02.680 where current conditions are. It's the best sense to thousand 0:03:03.440 --> 0:03:05.520 pimp Cooke column for rate cuts. Did that come up 0:03:05.520 --> 0:03:07.919 in there? You know? Annuals Swarry, You're not something they're 0:03:07.919 --> 0:03:10.880 looking for immediately, not something that came up yesterday, not 0:03:10.960 --> 0:03:14.160 something they're looking for right now in the nit Chris, 0:03:14.160 --> 0:03:17.280 What I think is interesting about consumer confidences, I don't 0:03:17.280 --> 0:03:20.600 see it in the hard data. It's not translating into 0:03:20.720 --> 0:03:25.600 improved economic activity at the consumer level. No, not not yet. 0:03:25.639 --> 0:03:28.680 But we gotta wait and see retails sales. One of 0:03:28.680 --> 0:03:32.639 the problems I guess is h car and light truck sales. 0:03:32.639 --> 0:03:35.160 I keep going back and forth or like seventeen point 0:03:35.240 --> 0:03:39.320 four than they're sixteen and a half. We pretty much 0:03:39.360 --> 0:03:41.600 know for this cycle the consumer is not going to 0:03:41.720 --> 0:03:45.240 go out and buy a lot more cars. Uh, it's 0:03:45.280 --> 0:03:48.280 gonna stick somewhere around seventeen million annual rate. But no, 0:03:48.480 --> 0:03:51.720 I think you could look forward to retail sales picking 0:03:51.760 --> 0:03:55.120 up in the next couple of reports. Retail sounds can 0:03:55.120 --> 0:03:57.200 pick up in the next couple of reports. It might 0:03:57.280 --> 0:04:01.640 have been it was a right. There's a lot of 0:04:01.680 --> 0:04:05.520 seasonal summertime purchases. Maybe those were delayed, but you know, 0:04:05.680 --> 0:04:07.880 over the course of the summer, I think that consumer 0:04:07.880 --> 0:04:11.119 has money. One more question, if we could you do 0:04:11.200 --> 0:04:14.480 you are the best? It fed chat linked into full 0:04:14.520 --> 0:04:17.479 faith and credit charts. What is this three month ten 0:04:17.560 --> 0:04:21.400 year difference in yield that spread everybody's talking about it 0:04:21.600 --> 0:04:24.320 is inversion? Like it wasn't the last twelve out of 0:04:24.360 --> 0:04:27.599 the fourteen recessions or whatever? What does three months tend 0:04:27.640 --> 0:04:29.960 mean to Chris Ruky? Yeah, I mean the crazy thing 0:04:29.960 --> 0:04:33.159 about the curve is that the two year tenure is 0:04:33.160 --> 0:04:37.080 not inverted, and most cycles two year ten years inverts 0:04:37.400 --> 0:04:40.200 then at the last minute the three month so it's 0:04:40.240 --> 0:04:44.599 flips that I don't know the markets are miss priced, 0:04:44.600 --> 0:04:47.920 but that the three month tenure year. Listen to you, 0:04:47.880 --> 0:04:51.479 you see like such an economist inverted. It inverted last 0:04:51.520 --> 0:04:54.680 Thursday on the market a m. I thanks market for 0:04:54.800 --> 0:04:58.280 the plug there, thank you, Mr Rupkey. Anyway, the curve 0:04:58.360 --> 0:05:05.160 inverted last Thursday, and and that means it means recessions. 0:05:05.160 --> 0:05:07.800 So that's what we're working off. It's gonna take ten 0:05:07.839 --> 0:05:09.360 ye year olds have to come up to like three 0:05:09.360 --> 0:05:13.600 point three seven. The curve's not got Chris gonna stay 0:05:13.640 --> 0:05:16.320 in verdicts. Thank you so much, greatly, I'm kidding, thank 0:05:16.320 --> 0:05:18.960 you so much. A really good briefing before Vice Chairman 0:05:19.000 --> 0:05:36.280 clearitis speak. Take a listen to what Scott Marther of 0:05:36.440 --> 0:05:40.240 PIMCO had to say about credit risk and probably the 0:05:40.320 --> 0:05:43.279 riskiest credit market that we've ever had. And you know 0:05:43.360 --> 0:05:45.680 it's true when you look at both the size of it, 0:05:46.040 --> 0:05:48.159 the duration of it, and the quality aspects of it. 0:05:48.480 --> 0:05:51.039 So there's a big vulnerability there as well as probably 0:05:51.080 --> 0:05:53.520 the least liquid uh you know, bond market in terms 0:05:53.520 --> 0:05:55.200 of credit markets that we've had in a long period 0:05:55.200 --> 0:05:58.720 of time. Joe Lemington joining us now Limberg Intelligence, Director 0:05:58.760 --> 0:06:03.480 of Credit Research, Joe, probably the riskiest corporate credit market 0:06:03.720 --> 0:06:07.320 we've ever had. This was a catalyst for so much 0:06:07.360 --> 0:06:10.799 conversation yesterday after Scott said this, let's get your thoughts 0:06:10.839 --> 0:06:12.640 and then we'll start to explore a little bit further. 0:06:12.680 --> 0:06:14.880 Your reaction, well, I think you did a great job. 0:06:14.960 --> 0:06:17.320 John is is always the first place to start. But 0:06:17.400 --> 0:06:21.880 I think, but I think beyond that, you know, you 0:06:21.920 --> 0:06:24.320 are at a very interesting point in time because you 0:06:24.400 --> 0:06:27.880 have spreads that are still quite tight. Uh. You have 0:06:28.080 --> 0:06:31.880 a very mixed data that's out there and very bifurcated feelings. 0:06:32.320 --> 0:06:35.200 For example, if you look internally at b I, you 0:06:35.279 --> 0:06:38.000 have people like Ira Jersey and Carl Rickadana saying the 0:06:38.000 --> 0:06:40.760 second half is gonna be very strong, uh, and that 0:06:40.920 --> 0:06:43.800 yields should be going up, which if you're a PM 0:06:43.839 --> 0:06:46.040 you'd be playing that on the short end or maybe 0:06:46.040 --> 0:06:48.320 through high yield, but that there are other people that 0:06:48.360 --> 0:06:51.400 think that you're headed into a recession, and if that's 0:06:51.440 --> 0:06:54.520 the case, then you have quite a different place to 0:06:54.600 --> 0:06:56.480 be putting your money. What I thought was really interesting, 0:06:56.520 --> 0:06:58.520 speaking of Scott in a little bit more detail, was 0:06:58.600 --> 0:07:01.800 this comparison between now and potentially going into the mid 0:07:01.839 --> 0:07:05.640 two thousands, that kind of historic parallel, not because we're 0:07:05.640 --> 0:07:08.320 about to go into recession in the here and now, 0:07:08.360 --> 0:07:11.120 but because maybe we're about to go through that period 0:07:11.160 --> 0:07:14.560 where the excess is build, the mistakes are made. Joe, 0:07:14.600 --> 0:07:16.520 what do you think about that? Does that idea resonate 0:07:16.520 --> 0:07:18.360 with you at all? Yeah? Well, as a guy that 0:07:18.400 --> 0:07:20.760 follows Tesla and I know we often talk about the 0:07:20.760 --> 0:07:25.560 five three percent bond that's now around nine. Um. Yeah, no, 0:07:25.680 --> 0:07:28.080 I mean I do think mistakes are being me. I 0:07:28.080 --> 0:07:30.400 guess you're looking at we Works as another example of 0:07:30.440 --> 0:07:33.080 that coming to the market yesterday, and you kind of 0:07:33.120 --> 0:07:37.080 scratch your head with these pre cash flow pre even businesses. 0:07:37.120 --> 0:07:39.440 We don't have time in the day. We need a 0:07:39.480 --> 0:07:41.600 long we need a long show for that one day 0:07:41.720 --> 0:07:44.640 I I spent. Folks. It's common belief that John and 0:07:44.680 --> 0:07:46.800 I party the moment that you know, the month of 0:07:46.920 --> 0:07:50.160 music comes up at ten am, But actually we're working 0:07:50.160 --> 0:07:53.880 through the day. And Bloomberg Intelligence written up in zero 0:07:53.960 --> 0:07:59.280 Hedge had a tour de force on community based adjusted 0:07:59.520 --> 0:08:04.360 But uh, help me with the WE Work bond offering 0:08:04.840 --> 0:08:09.960 your interpretation of it led by our real estate people. Sure, yeah, no, 0:08:10.160 --> 0:08:16.240 Jeff Langenbaum. Um, and uh, what I would say is that, uh, 0:08:16.280 --> 0:08:18.360 it's a great job of marketing. Much I think in 0:08:18.400 --> 0:08:21.800 the in the way a lot of these were not marketing. 0:08:22.240 --> 0:08:25.520 Should somebody step in? Should some institutional guys in a 0:08:25.600 --> 0:08:28.600 car and Topeka right now? Should he's stepping in? By 0:08:28.760 --> 0:08:32.040 we Work paper, what's a coupon. I think they're still 0:08:32.080 --> 0:08:35.360 determining what give me, give me, give me a touch 0:08:35.360 --> 0:08:38.199 there six percent maybe maybe. But I think with all 0:08:38.240 --> 0:08:41.400 of these credits, whether it's an Uber or a Tesla 0:08:41.760 --> 0:08:43.880 or we Works, I think you have to look at 0:08:43.920 --> 0:08:47.520 it and say, do companies that don't generate cash flow 0:08:47.640 --> 0:08:49.920 and we know that they're not going to for several years, 0:08:50.920 --> 0:08:53.079 can they support any sort of debt? And I think 0:08:53.080 --> 0:08:56.520 the answer is no. So I can't see why a 0:08:56.600 --> 0:08:59.360 PM wouldn't want to get involved with any of those situations. 0:08:59.360 --> 0:09:02.240 Which is healthier credit market? Now start to jump into 0:09:02.880 --> 0:09:06.440 you bring up Testa, and I think Tesla. The growth 0:09:06.480 --> 0:09:09.280 story of Tesla was captured by the equity a couple 0:09:09.320 --> 0:09:12.079 of years back. It was reflected in the debt, and 0:09:12.120 --> 0:09:13.720 that was a big problem for a lot of people. 0:09:14.360 --> 0:09:17.120 Several years later, now it was two summers ago, it 0:09:17.120 --> 0:09:21.280 was August when Note came to market. A couple of 0:09:21.360 --> 0:09:23.880 years later, can you sit here and say definitively that 0:09:23.920 --> 0:09:26.880 this is a healthier credit market, but we are no 0:09:26.920 --> 0:09:30.080 longer doing those silly things where we reflect the growth 0:09:30.120 --> 0:09:32.720 story that should be captured by equity, but it's also 0:09:32.800 --> 0:09:35.480 captured in the debt. Market. No, I don't. I don't 0:09:35.480 --> 0:09:37.640 think we can join. I mean, in the case of Tesla, 0:09:37.679 --> 0:09:40.719 I think we can say that more clearly today than 0:09:40.760 --> 0:09:43.120 it was two years ago when we were ranting on that. 0:09:43.440 --> 0:09:45.480 But if you look at we work, it's the same 0:09:45.480 --> 0:09:49.160 basic story right where people are looking at at hypothetical 0:09:49.240 --> 0:09:53.280 market valuations of the company and saying, well, it deserves 0:09:53.320 --> 0:09:55.920 to trade at a certain place when we know that 0:09:55.960 --> 0:09:58.440 it's going to be multiple years before it gets anywhere 0:09:58.440 --> 0:10:02.000 close to generating any sort of cash for though Joel levingson, 0:10:02.400 --> 0:10:04.280 Joel thinks you have to come back when you figure 0:10:04.280 --> 0:10:07.000 out the community adjusted even I still don't understand that. 0:10:07.760 --> 0:10:09.920 I still don't understand that. And every time I guess 0:10:09.960 --> 0:10:14.840 mentioned I think people are judging intelligence and what they 0:10:14.920 --> 0:10:17.800 Joel and the others and Mr lang Voon, what he 0:10:17.880 --> 0:10:20.120 did yesterday and we worked was just a tourtive force. 0:10:20.240 --> 0:10:23.280 It was just brilliant in the change. Joel Levinson back 0:10:23.280 --> 0:10:40.240 Intelligence of Credit Research. Meredith Sumter joins us right now, 0:10:40.280 --> 0:10:43.600 and this is important. She writes brilliant notes for your 0:10:43.640 --> 0:10:46.000 age group. And this was some of our guests, not 0:10:46.040 --> 0:10:49.360 all of our guests is not only expert on China, 0:10:49.600 --> 0:10:54.440 but understands not the King's English, but maybe President she's 0:10:54.559 --> 0:10:58.440 uh Mandarin. I was chastised this morning by one of 0:10:58.440 --> 0:11:01.480 our listeners in Mayfair because I said Chinese language instead 0:11:01.520 --> 0:11:06.360 of Mandarin as well. So I've been practicing, Meredith, Joe 0:11:06.559 --> 0:11:10.600 is weak. Neon is year? Did I get that right? Neon? 0:11:10.679 --> 0:11:17.280 Am I doing? Okay? Close? You know what do you want? 0:11:17.320 --> 0:11:21.240 We're sumker, good luck, Meredith. Meredith. The President is scheduled 0:11:21.280 --> 0:11:24.000 to speak here this morning, is on his way to Colorado, 0:11:24.080 --> 0:11:27.800 to the United States Air Force Academy in Colorado Springs. 0:11:28.640 --> 0:11:34.040 And how do they interpret in the Chinese language the 0:11:34.080 --> 0:11:41.560 Trump bluster, the Trump discourse, how does that translate into Mandarin? Well, actually, 0:11:41.760 --> 0:11:46.640 originally before I would say this latest escalation in tariffs, 0:11:46.640 --> 0:11:48.880 and also that the move to place halfway on the 0:11:48.960 --> 0:11:53.000 entity list, which really is a game changer for Beijing, 0:11:53.480 --> 0:11:56.720 I would say that the Trump was actually somewhat popular 0:11:56.800 --> 0:11:59.960 with the Chinese people. Um they see him as ta 0:12:00.040 --> 0:12:03.400 fund is standing up for US interests. But it's also 0:12:03.440 --> 0:12:06.320 safe to say that that the U. S. President has 0:12:06.360 --> 0:12:08.560 now crossed a line with the Chinese. And as we 0:12:08.559 --> 0:12:12.840 are speaking earlier, Tom, we are watching very closely a 0:12:13.000 --> 0:12:15.720 lessening of moderation on the Chinese side and an uptick 0:12:15.800 --> 0:12:19.880 in nationalism that is not just in propaganda, but you're 0:12:19.920 --> 0:12:23.319 also beginning to see a sense from the Chinese people 0:12:23.360 --> 0:12:25.880 on wave wall and other sort of social media channels 0:12:25.920 --> 0:12:28.040 that they're beginning to feel like they're being bullied and 0:12:28.040 --> 0:12:32.240 they're not listening to the viable concerns on the U 0:12:32.320 --> 0:12:37.160 S side that this economic relationship between the two the 0:12:37.200 --> 0:12:40.520 world's too largest economies, needs to be rebalanced and rejiggered 0:12:40.559 --> 0:12:42.880 for the twenty one century. A lot of people trying 0:12:42.880 --> 0:12:46.800 to understand what that means for economic activity within the country. Meredith, 0:12:47.200 --> 0:12:50.560 and whether there could be a boycott of US products 0:12:50.559 --> 0:12:53.440 and services. What's your read of that situation at the moment. 0:12:53.920 --> 0:12:58.040 I think there's certainly an increasing risk of that, and 0:12:58.040 --> 0:13:01.559 and really I think watching what happens with Huawei is 0:13:01.720 --> 0:13:04.720 the key here. It's really that the focal point that 0:13:04.800 --> 0:13:10.920 the Chinese are are using to to gauge US intent 0:13:11.200 --> 0:13:17.440 towards China. So if Huawei is essentially brought to its 0:13:17.520 --> 0:13:19.520 knees in a way that it will no longer be 0:13:19.600 --> 0:13:24.960 a successful global Chinese telecommunications company, you can expect that 0:13:25.000 --> 0:13:31.400 Beijing itself will find ways to reciprocate, but even more interestingly, 0:13:31.520 --> 0:13:34.920 watch what the public does, because the risk here not 0:13:34.960 --> 0:13:37.840 only for the US, but also for Beijing, UH is 0:13:37.880 --> 0:13:42.600 that if sentiment becomes nationalists to the point where Beijing 0:13:42.600 --> 0:13:46.360 can no longer control that, then it goes from Beijing 0:13:46.400 --> 0:13:49.880 being able to finally dial up or dial down escalation 0:13:49.960 --> 0:13:52.840 with the US according to its plan, to Beijing no 0:13:52.920 --> 0:13:55.200 longer being in full control of how its own people, 0:13:55.360 --> 0:13:58.760 how the Chinese people are responding, so that the risks 0:13:58.760 --> 0:14:03.080 to UM high profile US companies in China, I would say, 0:14:03.160 --> 0:14:05.240 is certainly on the rise. How close do you think 0:14:05.240 --> 0:14:08.800 we are? So that's hipping point Meredith, Well, so the 0:14:09.360 --> 0:14:14.040 with Huawei, the US issued a ninety day temporary general license, 0:14:14.200 --> 0:14:18.080 but already we're beginning to see strains on that company 0:14:18.120 --> 0:14:23.000 with um other it's global trading partners, it's global um 0:14:23.120 --> 0:14:26.760 UM business partners are beginning to to step away from 0:14:26.840 --> 0:14:31.760 that company. Uh. So what to watch now between now 0:14:31.800 --> 0:14:35.000 and say the G twenty, crucially is whether or not 0:14:35.120 --> 0:14:38.440 there is any back channel that is opened or even 0:14:38.480 --> 0:14:41.720 a front channel between Trump and She to do something 0:14:41.720 --> 0:14:45.120 about Huawei, to to come to a deal with Huawei, 0:14:46.080 --> 0:14:51.520 and absent that, we're unlikely to see a productive or 0:14:51.560 --> 0:14:55.920 constructive conversation. Happened at the G twenty uh in Osaka 0:14:56.040 --> 0:14:58.480 at the end of June. That's the last best chance 0:14:59.040 --> 0:15:02.440 for both sides to avert and onward escalation from here. 0:15:02.640 --> 0:15:05.000 What is a calculus right now between the leader of 0:15:05.160 --> 0:15:07.640 China and his communist party. I'm going to use the 0:15:07.640 --> 0:15:10.720 word pollet burro as an amateur, but what is the 0:15:10.840 --> 0:15:13.400 dynamic you see among the leadership of China. I know 0:15:13.440 --> 0:15:20.560 there's a huge mystery their meredith, but is there something new? Surprise? Really? 0:15:20.640 --> 0:15:24.960 Huawei was the nuclear option. They expected that there would 0:15:25.000 --> 0:15:28.800 be onward pressure from from President Trump, and I would 0:15:28.800 --> 0:15:31.280 say that that the way that the US government has 0:15:31.320 --> 0:15:35.120 come out against Huawei by placing the company on its 0:15:35.200 --> 0:15:38.920 entity list in addition to the executive order, has really 0:15:38.960 --> 0:15:41.800 caught Beijing unaware, and it took them several days to 0:15:41.840 --> 0:15:44.600 sort of collect their thoughts and first and foremost gauge 0:15:45.200 --> 0:15:48.520 what has to be done to save that company and 0:15:48.520 --> 0:15:51.760 then what is politically feasible for Shijianping to do. So 0:15:52.080 --> 0:15:54.600 what we're hearing is that Chinese are basically telling Washington 0:15:55.280 --> 0:15:57.880 we're not interested in talking at all about trade or 0:15:57.880 --> 0:16:01.800 about economic relations with you until the White issue is resolved. 0:16:02.040 --> 0:16:05.560 And to my knowledge, there is at this point no 0:16:05.720 --> 0:16:08.480 meeting between Trump and She officially scheduled for g twenty, 0:16:08.560 --> 0:16:12.240 and no active communication channel between the two on a 0:16:12.280 --> 0:16:15.320 way forward with either Huawei or with the broadest or 0:16:15.360 --> 0:16:19.320 economic relationship. Is what you're discussing priced in the markets. 0:16:19.360 --> 0:16:22.800 I know that's not your razor group question, but do 0:16:22.880 --> 0:16:26.680 you perceive that the Western zeitgeist is up to speed 0:16:26.720 --> 0:16:30.960 with your razor groups? Caution No, No, And I think 0:16:31.000 --> 0:16:35.520 systematically we've seen markets sort of under bake the risk 0:16:35.760 --> 0:16:40.440 that we see moving forward in this relationship. Meredith has 0:16:40.440 --> 0:16:43.360 been really interested to see how financial markets respond, how 0:16:43.400 --> 0:16:47.640 investors react to commentary and state media. I think to 0:16:47.680 --> 0:16:50.520 a certain degree, and you can define to what extent 0:16:50.960 --> 0:16:53.400 the perception of shin a stounce in this tride dispute 0:16:53.480 --> 0:16:56.760 is being shaped almost exclusively at the moment by commentary 0:16:56.760 --> 0:16:59.400 and state media. Do you think that gives us an 0:16:59.440 --> 0:17:04.040 accurate picture of what is actually happening. That's a fascinating 0:17:04.119 --> 0:17:09.560 question here, um, and I would say that that broadly accurate, probably, 0:17:10.480 --> 0:17:14.280 But key here is that uh in the past, Beijing 0:17:14.320 --> 0:17:17.960 would use its state media to focus this messaging on 0:17:18.000 --> 0:17:21.399 its domestic population, and they used a separate channel to 0:17:21.840 --> 0:17:24.520 message to the global audience. But now that you have 0:17:24.600 --> 0:17:27.720 so many of us, non non Chinese who are paying 0:17:27.720 --> 0:17:32.080 attention to to um state propaganda and state media, we 0:17:32.119 --> 0:17:35.720 are reading messages that Beijing might be intending for domestic audience, 0:17:35.800 --> 0:17:38.000 not a global audience. And there's a key difference there. 0:17:38.320 --> 0:17:40.880 Meredith helped me here. This is really important. I'm taking 0:17:41.440 --> 0:17:46.080 uh introductory Chinese with Anthony from Sparta, and here's my 0:17:46.200 --> 0:17:52.520 first sentence. Meredith, help me with the pronunciation woe en fongloa, 0:17:53.280 --> 0:17:57.040 which is I took a day off yesterday? Like whoa 0:17:57.680 --> 0:18:01.800 is I right? Well? Yeah? Whoa close up? Yes? Whoa 0:18:03.200 --> 0:18:06.720 war Tom? You and I were gonna work on tones together, 0:18:07.520 --> 0:18:09.920 some great dumplings. Well, I did this at a bar 0:18:10.000 --> 0:18:14.200 in Shanghai with cash flow, and I flunked. Every time 0:18:14.280 --> 0:18:16.840 when you reach Chinese, it sounds like a speaking French. 0:18:17.400 --> 0:18:21.240 Really well, I was in the French quarter when we 0:18:21.320 --> 0:18:26.400 did shots. Every time I miss pronounced something, We're gonna 0:18:26.480 --> 0:18:33.720 let you run, whoa shoot eat Angia, I took a 0:18:33.840 --> 0:18:37.800 day off yesterday? What a great first sentence for learning 0:18:37.840 --> 0:18:42.320 Chicks the fund getting slammed down by she is so good. 0:18:43.840 --> 0:18:46.560 I can't say enough on the briefing notes from you 0:18:46.640 --> 0:19:03.760 raise your group on China. They've been just brilliant. This 0:19:03.840 --> 0:19:05.960 is a joy, and this is odd. As you know, 0:19:06.080 --> 0:19:09.480 there are four thousand, seven hundred people running for president 0:19:09.520 --> 0:19:12.439 of the Democratic Party, and it is good to have 0:19:12.520 --> 0:19:16.160 someone dark in the door who's a little bit different 0:19:16.320 --> 0:19:19.920 as all of you know, whatever your political persuasion. Uh, 0:19:19.960 --> 0:19:22.680 there is a small matter that Democrats have to take 0:19:22.840 --> 0:19:28.199 territory and votes where the Republicans live. The Cook Report 0:19:28.280 --> 0:19:33.600 puts Montana at a our plus eleven wal to wald 0:19:33.640 --> 0:19:39.040 Trump Heights from Bozeman to Grizzly Park, whatever it's called 0:19:39.080 --> 0:19:41.920 up there in the northern border. The governor of Montana 0:19:42.000 --> 0:19:46.240 joins us now, Stephen Bullock, who is a really interesting 0:19:46.359 --> 0:19:49.840 guy because it's so out of touch here you are 0:19:49.880 --> 0:19:52.040 in your state of the state a few years ago. 0:19:52.680 --> 0:19:56.440 We need each other if we are going to make progress. 0:19:57.080 --> 0:20:00.280 You don't have a chance. How are you How are 0:20:00.320 --> 0:20:02.920 you gonna run for president? How are you going to 0:20:03.000 --> 0:20:08.600 gain traction within this this vast Democratic party in a 0:20:08.680 --> 0:20:11.480 polarized time? How do you get the message across you know? 0:20:11.880 --> 0:20:14.320 And Tom first, thanks for having me, Tom and Paul. 0:20:14.400 --> 0:20:16.879 But it is a polarized time. Look, I'm the only 0:20:16.960 --> 0:20:19.920 one in this field that actually one in a Trump state. 0:20:20.080 --> 0:20:25.480 In two thousand sixteen, Uh, Donald Trump took Montana by 0:20:25.560 --> 0:20:30.200 twenty one points. I won by four of my voters 0:20:30.240 --> 0:20:32.760 voted for Donald Trump. If we don't win back some 0:20:32.880 --> 0:20:35.440 of the places that we lost in two thousand sixteen, 0:20:36.200 --> 0:20:38.520 this guy is gonna be president. But I've also my 0:20:38.600 --> 0:20:43.840 legislature six Republican and we've been able to do everything 0:20:44.080 --> 0:20:48.800 from have a fair tax system to investing in education 0:20:48.840 --> 0:20:52.840 and getting healthcare for a hundred thousand Montana's to Medicaid expansion. 0:20:53.240 --> 0:20:55.200 And if we don't actually, you know, the whole goal 0:20:55.240 --> 0:20:57.639 of this isn't just a win, it's actually a governed 0:20:58.000 --> 0:21:02.800 Montana State University. They're the only place in Montana where 0:21:02.800 --> 0:21:05.560 there are socialists. We know that. I mean it's to 0:21:05.640 --> 0:21:08.359 the left of the they of course, is like COMI 0:21:08.440 --> 0:21:12.280 three oh two. Okay, Well, how do you respond to 0:21:12.400 --> 0:21:17.280 the democratic socialists that won't listen to southwest Pennsylvania or 0:21:17.359 --> 0:21:22.520 from Montana across the entire state, And you respond to it. Yeah. Look, look, 0:21:22.680 --> 0:21:25.720 I am capitalist, but I think the capitalist system doesn't 0:21:25.720 --> 0:21:28.000 always work right now when tax laws are being written, 0:21:28.000 --> 0:21:30.080 when a Senator literally says, we have to do this 0:21:30.119 --> 0:21:33.000 to make our donors happy, or we can't even talk 0:21:33.080 --> 0:21:36.440 about climate change anymore because the outside influence of dollars. 0:21:36.840 --> 0:21:39.680 We have to fix some things, but that doesn't mean 0:21:39.840 --> 0:21:45.720 necessarily abandoning what our country has always been founded on. Well, Governoren, 0:21:45.760 --> 0:21:47.840 what we saw certainly in the congressional elections on the 0:21:47.880 --> 0:21:50.000 Democratic side that we took the House but very much 0:21:50.160 --> 0:21:52.560 moved to the left for the Democrats. Do you think 0:21:52.560 --> 0:21:56.640 a centrist all Bill Clinton ken win a the primary 0:21:56.640 --> 0:21:59.280 and be the general election? Sharon, Look, I'm in many 0:21:59.320 --> 0:22:02.880 ways when comes to healthcare and getting actually things done. 0:22:02.920 --> 0:22:05.480 When it comes to getting dark money out of our elections, 0:22:05.520 --> 0:22:09.280 I'd say I'm more progressive than anybody else, or as 0:22:09.320 --> 0:22:11.520 progressive as anybody else in the field. When it comes 0:22:11.560 --> 0:22:14.439 to actual accomplishments. I'm also you know, as a governor, 0:22:14.480 --> 0:22:17.760 I've had to balance a budget. So there are some 0:22:17.840 --> 0:22:21.400 conservative elements where I'll look at a tax cut and say, well, 0:22:21.440 --> 0:22:23.800 are we really putting this on our kids and grandkids? 0:22:24.040 --> 0:22:26.000 Or I'll look at plants and say, well, how are 0:22:26.040 --> 0:22:27.960 we going to pay for it? I think what most 0:22:27.960 --> 0:22:31.080 folks want, any Democrats want, is somebody that can win 0:22:31.200 --> 0:22:34.800 and then start getting things done. And the values of 0:22:34.920 --> 0:22:38.720 everybody ought to have access to healthcare, education, ought to 0:22:38.760 --> 0:22:42.720 be affordable. Those same values are I think what both 0:22:42.800 --> 0:22:47.160 unites the Democratic Party but is transcends beyond that. How 0:22:47.240 --> 0:22:51.280 did you get Trump votes in Montana? You don't look Republican, 0:22:51.440 --> 0:22:55.719 You don't you don't walk republican, your entourage is not Republican. 0:22:56.000 --> 0:22:58.040 How did you get What did you do in the diner? 0:22:58.560 --> 0:23:00.399 You know, Fox News goes out to the diner and 0:23:00.440 --> 0:23:02.679 doesn't touchy feeling thing. What did you do to the 0:23:02.720 --> 0:23:06.159 diner two hundred miles west of Bozeman to get that 0:23:06.240 --> 0:23:08.600 Trump vote? And first of all, I actually show up 0:23:08.600 --> 0:23:11.000 at the diner and not You know, we're getting to 0:23:11.040 --> 0:23:12.840 the point where I don't have the luxury of just 0:23:12.880 --> 0:23:15.960 going to pockets of blue in Montana expecting folks to win. 0:23:16.280 --> 0:23:19.600 I listen, I try to understand where they are now. 0:23:19.640 --> 0:23:21.879 Folks don't agree with me on every issue, But if 0:23:21.920 --> 0:23:24.320 I can turn around and say healthcare is important for 0:23:24.359 --> 0:23:27.159 a community, because if we lose that rural hospital, that 0:23:27.240 --> 0:23:30.919 town's gone, then they'll get over this issue of Obamacare. 0:23:31.560 --> 0:23:35.440 Does policy work? I mean, I mean uh. Paul Sweeney 0:23:35.440 --> 0:23:38.480 mentions President Clinton the ultimate policy want up all time, 0:23:38.480 --> 0:23:41.359 and yet he'd always go back to the visceral to 0:23:41.440 --> 0:23:47.760 get things done. Our Democratic candidates now over policying versus 0:23:47.920 --> 0:23:51.359 talking to the emotion and the residents that we heard 0:23:51.640 --> 0:23:55.720 from President Obama and President Trump. Well, I think that 0:23:55.880 --> 0:24:00.280 the emotion and the values everyone and that's demo crats 0:24:00.280 --> 0:24:02.800 are Republicans want to save community, They want to roof 0:24:02.920 --> 0:24:06.600 over their head. They don't want to have economic anxiety, 0:24:06.680 --> 0:24:08.440 you know, they want a decent job, the one good 0:24:08.440 --> 0:24:11.199 public schools, clean air, clean water, the belief you can 0:24:11.240 --> 0:24:14.320 do better for your kids and grandkids than yourself. And 0:24:14.359 --> 0:24:16.800 I think that transcends both the Democratic Party, but it 0:24:16.840 --> 0:24:19.600 also transcends a lot of voters that ought to be 0:24:19.760 --> 0:24:22.600 with us along the way. If they're really voting their 0:24:22.600 --> 0:24:26.600