WEBVTT - This Correction Is Not a Surprise, Emanuel Says 0:00:00.080 --> 0:00:12.960 Yeah, welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 0:00:13.480 --> 0:00:17.560 Jay Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:35.240 Bloomberg dot Com, and of course, on the Bloomberg Julian 0:00:35.280 --> 0:00:37.560 EMMANUELA b t I G or all we got is 0:00:37.560 --> 0:00:40.440 a stupid hat. Uh, tell us about bt I G 0:00:40.600 --> 0:00:42.800 Charity Day first, So you have us twenty seconds. So 0:00:43.200 --> 0:00:45.400 you guys raised a ton of money. Yeah, we've raised 0:00:45.640 --> 0:00:48.599 forty five million dollars since two thousand and three. And 0:00:50.200 --> 0:00:53.280 the belief is that when Steven Starker and Scott Cavalk 0:00:53.360 --> 0:00:56.600 founded the firm, they wanted to really, you know, create 0:00:56.760 --> 0:01:00.200 a spirit of giving, a culture of giving. And we 0:01:00.240 --> 0:01:02.760 have this day once a year where the firm donates 0:01:02.880 --> 0:01:07.200 all its commissions to charity designated by the clients and 0:01:07.360 --> 0:01:11.920 our celebrity guest traders again Mike Bloomberg and luminaries from 0:01:12.600 --> 0:01:16.119 sports and so on. So John Farroll, I gotta get 0:01:16.120 --> 0:01:21.119 through the month. Charity is one of the donors. Congratulations 0:01:21.120 --> 0:01:23.880 on a on a massive effort, Junio, and good luck today. 0:01:24.000 --> 0:01:27.120 Thank you. Let's talk about the equity markets. Dollars strongth 0:01:27.240 --> 0:01:29.920 is that good or bad for stocks? It's good and 0:01:29.920 --> 0:01:33.480 and people misinterpret it. Um. You know, there's this this 0:01:33.560 --> 0:01:36.960 thing that we call in recency bias. So we saw 0:01:37.280 --> 0:01:42.400 the stock market rise consistently in seventeen alongside a week 0:01:42.480 --> 0:01:45.319 or dollar, and there's this sort of mental dislocation that 0:01:45.480 --> 0:01:48.840 investors have right now that they don't really fully buy 0:01:48.880 --> 0:01:52.360 into the fact that stocks can rise with a strong dollar. 0:01:52.480 --> 0:01:55.480 In fact, the strong dollar is going to increase the 0:01:55.800 --> 0:01:59.440 fled the FEDS flexibility and put a lid on inflation. 0:01:59.600 --> 0:02:02.120 So let's think about the big sector. Where we got 0:02:02.160 --> 0:02:04.160 the leadership from in the in the equity market over 0:02:04.160 --> 0:02:06.440 the last year or so. It came from tech. Tech 0:02:06.640 --> 0:02:10.280 is a growth story. It's also a very international story. 0:02:10.320 --> 0:02:13.280 And the weaker dollars certainly helped down tech over the 0:02:13.360 --> 0:02:16.400 last year. Is it not a headwind for the big 0:02:16.440 --> 0:02:18.720 sector that's led most of this run so far over 0:02:18.760 --> 0:02:22.079 the last year. It is, There's no question about it. 0:02:22.120 --> 0:02:24.600 And that's that's why it's actually neutral for for US 0:02:24.639 --> 0:02:27.160 at b T I g UM. But it isn't an 0:02:27.280 --> 0:02:31.080 unequivocal negative because the flip side of that story is 0:02:31.120 --> 0:02:34.960 that with the stronger dollar, yields on the long end 0:02:35.200 --> 0:02:38.960 seemed to be very tame. The fact that treasury volatility 0:02:39.000 --> 0:02:42.000 is near its all time lows. Imagine if the VIX 0:02:42.040 --> 0:02:44.760 were back to nine or ten, that's the equivalent of 0:02:44.800 --> 0:02:48.640 where treasury volatility is right now. That's a positive for 0:02:48.760 --> 0:02:51.920 high multiple technology. So it's your basic argument that this 0:02:51.960 --> 0:02:55.840 will keep financial conditions looser than that otherwise would be 0:02:55.840 --> 0:02:58.919 because the FED won't have to go that quickly. Yes, 0:02:59.320 --> 0:03:01.400 it's it's gonna be one of those ones where the 0:03:01.480 --> 0:03:06.400 FED gets more leeway to react to incoming data in 0:03:06.440 --> 0:03:10.720 a manner as we heard from Powell earlier today, that 0:03:10.800 --> 0:03:13.800 the markets will be able to anticipate. What did you 0:03:13.840 --> 0:03:16.200 think of the space from Sham and Poal today, The 0:03:16.240 --> 0:03:21.920 idea that people overstate the Fed's influence on global financial conditions. 0:03:22.320 --> 0:03:25.160 I think some people might take issue with that. I 0:03:25.200 --> 0:03:29.120 think that was a bit of modesty. The fact is 0:03:29.120 --> 0:03:31.560 is that the FED has always been a critical player 0:03:31.800 --> 0:03:35.280 in the evolution of financial conditions when you look at 0:03:35.400 --> 0:03:39.280 how the world recovered in two thousand and nine. But 0:03:39.480 --> 0:03:43.040 also the flip side is that history shows that recessions 0:03:43.040 --> 0:03:45.960 start because the FED tightens too much. Well, but how 0:03:46.000 --> 0:03:48.680 far away from too much? I mean, acting is an economist, 0:03:48.720 --> 0:03:52.080 You're gonna tell me we're way way way away from 0:03:52.120 --> 0:03:55.560 too much. Well, we are. And and to the Fed's credit, 0:03:56.000 --> 0:04:00.040 this cycle began with core pc, you know, closer to 0:04:00.160 --> 0:04:03.320 one and a half, then you know, having to react 0:04:03.640 --> 0:04:06.600 to core PC trading to one nine or two where 0:04:06.640 --> 0:04:09.520 we are now. So we've already started building in the 0:04:09.600 --> 0:04:13.800 preconditions for the recovery and growth to continue. Real rates 0:04:13.840 --> 0:04:16.360 are still pretty much negative. This is a still this 0:04:16.400 --> 0:04:21.520 is an accommodative Federal reserve. Still how much longer? Full? Uh? 0:04:21.960 --> 0:04:24.239 You tell me when the ECB is going to start 0:04:24.320 --> 0:04:27.080 hiking and and I'll tell you when the Fed can 0:04:27.120 --> 0:04:31.039 get less accommodative. Um it is. It's a global picture, 0:04:31.520 --> 0:04:34.400 um And and there are still players out there that 0:04:34.480 --> 0:04:38.560 are creating the conditions for monetary accommodation. So for the 0:04:38.640 --> 0:04:41.200 year end story, Julian, has anything changed for you guys, 0:04:41.200 --> 0:04:43.880 Because I saw a note come across my desk yesterday 0:04:43.920 --> 0:04:46.320 that had a three handle for the SMP five hundred 0:04:46.800 --> 0:04:49.520 you're looking for three thousand. We are, and and that's 0:04:49.520 --> 0:04:51.800 been our base case the entire year. But when we 0:04:51.839 --> 0:04:54.920 looked at the view was that we were going to 0:04:55.040 --> 0:04:58.560 get a lot more volatility than we've gotten in twenty seventeen. 0:04:58.680 --> 0:05:01.359 So by those rights, the correction that we've had for 0:05:01.360 --> 0:05:04.480 the last several months is not a surprise. And in fact, 0:05:04.720 --> 0:05:07.480 what we're doing by this correction, what we're doing by 0:05:07.640 --> 0:05:10.799 sort of the negativity surrounding things like a stronger dollar 0:05:11.240 --> 0:05:14.400 and obsession with inflation and so on, is creating the 0:05:14.520 --> 0:05:18.240 conditions for the wall of worry that stocks always climb 0:05:18.320 --> 0:05:21.560 and that got destroyed in January for higher prices. In 0:05:21.600 --> 0:05:24.479 the second what is the distinctive? We gotta go, darn it? 0:05:26.600 --> 0:05:30.839 Have a charity day, morow Tom. There's a clock on 0:05:30.880 --> 0:05:33.280 your screen, a clock. It's my first day. What can 0:05:33.320 --> 0:05:35.960 I say? Julia, Emmanuel, thank you so much? Into all 0:05:36.000 --> 0:05:40.280 at bt I G. Does Greenfield show up at this thing? Oh? Absolutely, 0:05:42.240 --> 0:05:45.920 Rich is a presence at bt I G. Rich Greenfield, 0:05:46.040 --> 0:05:49.160 bt I G with Walter and a guy named Emmanuel 0:05:49.400 --> 0:06:03.080 is a great team b T I G. Charity Day. 0:06:05.800 --> 0:06:08.280 Who do right now? Folks? We're Sril de Jacques or 0:06:08.279 --> 0:06:13.159 so with us with clear view energy partners. Jacques, you 0:06:13.200 --> 0:06:16.799 have a telling note. Forget about I ran forget about 0:06:16.800 --> 0:06:20.239 the dollar. Forget about all this other bologna. You lead 0:06:20.800 --> 0:06:26.400 with Venezuela. Start with our listeners, coast to coast. Do 0:06:26.520 --> 0:06:31.480 we really care about Venezuelan oil? Why is that? Well, 0:06:31.720 --> 0:06:34.080 oil is such a global market that you really need 0:06:34.160 --> 0:06:38.200 to follow where the supply is coming from. And Venezuela 0:06:38.240 --> 0:06:40.960 has historically been one of the larger supplies of oil 0:06:41.000 --> 0:06:43.520 in the world, and and that started to change, and 0:06:43.560 --> 0:06:47.840 we've seen a significant reduction in overall supply from Venezuela 0:06:48.240 --> 0:06:51.280 and that's causing a major impact on the market right now. 0:06:52.040 --> 0:06:54.960 Are we ready for a pullback in Iranian crude as well? 0:06:56.360 --> 0:07:01.039 Iran is definitely a different situation because because there actually 0:07:01.080 --> 0:07:04.080 hasn't been any volumes of oil taken off the market 0:07:04.120 --> 0:07:06.240 from Iran, and we don't know if there will be 0:07:06.640 --> 0:07:08.919 a lot of new information will come out when the 0:07:08.920 --> 0:07:12.160 President talks later today, and what you should be watching 0:07:12.240 --> 0:07:16.360 for is the level of European cooperation in what the 0:07:16.440 --> 0:07:20.040 U S announces. So with the United States announces that 0:07:20.080 --> 0:07:23.040 they won't extend the waiver on oil sanctions, what will 0:07:23.040 --> 0:07:27.440 that ultimately mean for you, Jack, Well, just by itself, 0:07:27.480 --> 0:07:29.680 that doesn't really mean much. We're going to need to 0:07:29.720 --> 0:07:33.440 know a lot more of the details as to who 0:07:33.440 --> 0:07:36.280 else is going to be involved in which past the 0:07:36.320 --> 0:07:40.720 President is going down in terms of of sanctioning um Iran, 0:07:40.920 --> 0:07:45.720 because there definitely could be a lot of different outcomes. Now. Initially, 0:07:45.920 --> 0:07:48.640 if you look back a few years um, there was 0:07:48.720 --> 0:07:51.120 over a million barrels per day of Iran supply that 0:07:51.160 --> 0:07:53.640 came off the market, and that is not We're not 0:07:53.720 --> 0:07:55.400 in the same game as that as we were a 0:07:55.440 --> 0:07:57.960 few years ago. Well, I know Jenn wants to continue this, 0:07:58.000 --> 0:07:59.920 but I want to be rooting cutting because this is 0:08:00.040 --> 0:08:05.840 so critical this afternoon. Can the President cut off Iranian oil? 0:08:06.440 --> 0:08:09.480 Because he probably wants to say that, but can he 0:08:09.600 --> 0:08:14.640 really do that? Uh No? I mean Iran exports over 0:08:14.680 --> 0:08:17.160 two million barrels per day of oil to Asia and 0:08:17.200 --> 0:08:21.000 that that supply is unlikely to change. There's about six 0:08:21.440 --> 0:08:24.240 thousand barrels per day that goes to Europe and that 0:08:24.320 --> 0:08:28.160 could potentially change, but not right away. That's something that 0:08:28.200 --> 0:08:31.040 could be later in the year, next year, or even 0:08:31.080 --> 0:08:33.040 not at all. And so that's what we need to 0:08:33.040 --> 0:08:35.600 figure out from what the President says today. What's your 0:08:35.640 --> 0:08:40.360 base case today, Jack, I think that the European Union 0:08:40.559 --> 0:08:43.960 is unlikely to cooperate with what the President is coming 0:08:43.960 --> 0:08:46.839 out with. So I think you're going to see the 0:08:46.960 --> 0:08:50.840 us UM allow the waiver to lapse on May twelve. 0:08:51.240 --> 0:08:53.840 But initially that's not going to cause any sort of 0:08:53.880 --> 0:08:57.680 supply disruption. So what can the president do ultimately that 0:08:57.760 --> 0:09:00.280 pleases both allies in the Middle East, the likes of 0:09:00.320 --> 0:09:02.400 Israel and Sally Arabia that would like the President to 0:09:02.440 --> 0:09:04.600 pull out of this deal, and at the same time 0:09:04.800 --> 0:09:07.160 appease European allies that wanted him to stay in. Is 0:09:07.160 --> 0:09:10.600 there any middle ground, Jack, That's that's a great question, 0:09:10.679 --> 0:09:13.000 and I think, um, we're going to have to get 0:09:13.000 --> 0:09:15.640 our policy. Analyst Kevin booked on to go through the 0:09:16.240 --> 0:09:19.880 um complex maze of outcomes that could take place here. 0:09:20.600 --> 0:09:23.600 But from my perspective, looking at supply demand, I do 0:09:23.679 --> 0:09:26.800 not expect any supply to come off the market this 0:09:26.920 --> 0:09:29.160 year from iron Well, that's a really important point, and 0:09:29.160 --> 0:09:30.880 I guess we can sort of take that point and 0:09:30.960 --> 0:09:32.640 draw out our thoughts on what we think is going 0:09:32.679 --> 0:09:35.680 to happen ultimately with the deal. Jack, looking at oil 0:09:35.720 --> 0:09:40.079 prices right now through seventy on w t I yesterday, 0:09:39.840 --> 0:09:42.560 a move that we hadn't seen in many, many years, 0:09:42.600 --> 0:09:44.480 And I'm just looking at the situation the all market 0:09:44.520 --> 0:09:47.199 and trying to work out is this a supply disruption 0:09:47.280 --> 0:09:51.840 story with a geopolitical risk premium injected back into the market, 0:09:52.200 --> 0:09:55.240 or are we under appreciating the demand side to this 0:09:55.440 --> 0:09:59.040 rally over the last year. That's a great question, and 0:09:59.280 --> 0:10:01.440 there's definitely the opponents of all of those that are 0:10:01.440 --> 0:10:04.800 involved in the market um with the OPEC supply cut. 0:10:05.000 --> 0:10:06.760 I think the way I'd like to think about this 0:10:07.040 --> 0:10:11.240 is if Venezuela was producing at its normal quota level, 0:10:11.600 --> 0:10:15.120 the oil market would be balanced, supply equals demand, and 0:10:15.160 --> 0:10:17.600 I think oil price would probably be twenty dollars lower. 0:10:18.080 --> 0:10:20.720 But because we've seen such a massive amount of oil 0:10:20.760 --> 0:10:24.200 from Venezuela leave the market, that is what's causing the 0:10:24.320 --> 0:10:27.520 major problem and the spike and oil. This is just fascinating. 0:10:27.559 --> 0:10:29.800 You're telling me we'd be a you know, not to 0:10:29.800 --> 0:10:32.840 take it to a dollar, but we'd be at fifty 0:10:33.040 --> 0:10:37.239 it's fifty five or fifty eight dollar West Texas Intermediate 0:10:38.080 --> 0:10:42.880 X Venezuela exactly. This is a significant amount of oil. 0:10:42.960 --> 0:10:45.600 They've taken more oil off the market than Saudi Arabia 0:10:45.679 --> 0:10:48.320 has So this is a big number, and then you 0:10:48.400 --> 0:10:50.679 have to say, when is this actually going to get 0:10:50.720 --> 0:10:53.839 any better? All the data flow coming out of Venezuela 0:10:53.920 --> 0:10:58.400 continually gets worse. So do you model eight eight five 0:10:58.440 --> 0:11:01.840 dollar oil? Can you even twenty four months back to 0:11:01.880 --> 0:11:04.880 a hundred dollars a barrel? No? I don't think we 0:11:04.920 --> 0:11:07.360 will get up that high. And so the way you 0:11:07.440 --> 0:11:10.240 have to think about it is there's a significant amount 0:11:10.280 --> 0:11:13.280 of oil that's voluntarily being taken off the market, and 0:11:13.320 --> 0:11:16.000 as prices drift up, a lot of that oil is 0:11:16.040 --> 0:11:18.640 likely to start to move back onto the market and 0:11:18.679 --> 0:11:20.880 then flipping over to the demand side of the equation. 0:11:21.040 --> 0:11:24.920 As oil prices rise, we do see a sensitivity and 0:11:24.960 --> 0:11:27.240 the demand starts to go down. So there's there's a 0:11:27.320 --> 0:11:29.760 natural balancing that occurs. Jack, I want to spend a 0:11:29.800 --> 0:11:31.840 little bit of time talking about the politics of OPEC 0:11:31.880 --> 0:11:34.520 at the moment and begin with the question on Saudi Arabia. 0:11:34.800 --> 0:11:37.280 If the Saudis could pick an oil price right now, 0:11:37.800 --> 0:11:41.079 what would it be. Well, that's a good question. Um, 0:11:41.120 --> 0:11:42.960 you know the numbers that have been thrown out in 0:11:43.080 --> 0:11:46.200 the media or somewhere in the neighborhood of eighty dollars 0:11:46.200 --> 0:11:49.360 a barrel. The I m F has put out a 0:11:49.440 --> 0:11:52.520 number of thaying that their budget is balanced a dollars 0:11:52.520 --> 0:11:55.320 a barrel, So I think that's the direction they want 0:11:55.360 --> 0:11:57.960 to go. Um. The way I think about it is 0:11:58.040 --> 0:12:01.120 that they want to keep oil prices relatively high for 0:12:01.200 --> 0:12:04.640 the Saudia, Ramco I p O. That is probably going 0:12:04.679 --> 0:12:06.680 to take place in about a year from now from 0:12:06.920 --> 0:12:10.800 media reports I've heard. So that's the direction they're moving towards. 0:12:11.120 --> 0:12:13.080 Felt that into the politics of OPEC at the moment, 0:12:13.120 --> 0:12:15.720 because as far as I understand, the Iranians are quite 0:12:15.720 --> 0:12:17.960 sensitive about the oil price getting too high on what 0:12:18.000 --> 0:12:21.920 that could mean for for demand. Jack and the Saudi's 0:12:21.960 --> 0:12:24.160 on their own pushing for a higher role price and 0:12:24.160 --> 0:12:27.600 can they take the rest of OPEC with them. Well, 0:12:27.640 --> 0:12:30.079 if you think about where the oil is actually coming 0:12:30.120 --> 0:12:34.720 off the market, h Saudi Arabia, Venezuela, Russia, Mexico, that 0:12:34.840 --> 0:12:37.760 comprises the bulk of the oil that's actually been removed 0:12:37.760 --> 0:12:41.040 from the market. So Um, I think the other people 0:12:41.080 --> 0:12:44.679 are mostly along for the ride and had made minor adjustments. 0:12:44.720 --> 0:12:48.320 So I don't think you could see a big boom 0:12:48.320 --> 0:12:51.480 and supply coming out of different parts of OPEC. I 0:12:51.559 --> 0:12:55.880 just triangulated John the extrapolation of oil to a hundred 0:12:55.880 --> 0:12:58.440 dollars of barrel. And you know, it's a real rough thing. 0:12:58.440 --> 0:13:00.160 I'm not going to put it out across to or 0:13:00.160 --> 0:13:04.520 from Bloomer Radio, but it's autumn of two thousand. If 0:13:04.520 --> 0:13:08.960 the trend continues autumn of two th November of two 0:13:08.960 --> 0:13:12.480 thousand nineteen, is is where you get too hundred dollars barrel? 0:13:12.559 --> 0:13:14.760 When you say they take the oil off the market, 0:13:15.040 --> 0:13:18.040 what do they do with it? Oh, they just lower 0:13:18.080 --> 0:13:21.520 their production levels, so just not making it. So you 0:13:21.600 --> 0:13:24.280 have to question. There's always the question is how much 0:13:24.320 --> 0:13:26.839 of this could come back on and how fast? In 0:13:27.040 --> 0:13:29.839 general thinking is that Saudi Arabia is the one that 0:13:29.960 --> 0:13:33.040 has the spare capacity that could put put a significant 0:13:33.080 --> 0:13:36.080 amount of oil back onto the market, you know, upwards 0:13:36.120 --> 0:13:38.480 of half a million to a million barrels per day. 0:13:38.920 --> 0:13:41.680 The other players are fairly small. Do you one final question, 0:13:41.720 --> 0:13:44.600 do you have a dollar barrel amount where Saudi pulls 0:13:44.600 --> 0:13:46.520 a trigger on that? I mean there's got to be 0:13:46.600 --> 0:13:50.000 a point where they throw in the proverbial towel. No. 0:13:50.240 --> 0:13:53.160 I think they look at it as um In case 0:13:53.240 --> 0:13:56.280 of emergency. So if if we did see some sort 0:13:56.320 --> 0:14:00.400 of massive drop and supply somewhere else, then they could 0:14:00.480 --> 0:14:03.000 put some of their oil back on the market. But 0:14:03.440 --> 0:14:05.599 as we mentioned before, I think the key thing for 0:14:05.720 --> 0:14:08.800 them is to keep oil prices high for the around 0:14:08.840 --> 0:14:11.719 co I p O brilliant Juckers, So thank you so much, 0:14:11.760 --> 0:14:26.840 clear View Energy of Partners with us A let us beginner. 0:14:26.960 --> 0:14:30.560 This is a important conversation because it goes to the 0:14:30.640 --> 0:14:33.400 mid term elections and where we go from here. We've 0:14:33.400 --> 0:14:36.160 been talking a lot on the around announcement today, John 0:14:36.280 --> 0:14:40.720 Hudeck with US with Brookings Institution working in governance but 0:14:40.840 --> 0:14:44.960 also working and how we do our elections. John, if 0:14:45.000 --> 0:14:46.520 you were to have a cup of coffee with one 0:14:46.600 --> 0:14:49.960 of our global audience today, how would you describe the 0:14:50.160 --> 0:14:55.280 mid term election process in America? The midterm election process 0:14:55.320 --> 0:14:59.480 in America is extremely complicated. It's multi tiered in the 0:14:59.560 --> 0:15:04.320 sense there are multiple different uh times and places that 0:15:04.520 --> 0:15:07.560 people will vote. I think most people across the world 0:15:07.600 --> 0:15:10.880 are actually shocked at how often Americans end up voting. 0:15:11.560 --> 0:15:14.680 But it also is determinative of what the next two 0:15:14.840 --> 0:15:18.560 years of Washington politics and policy will be like. So 0:15:18.680 --> 0:15:24.040 it's tremendously important. Is it normal that whoever the president is, 0:15:24.240 --> 0:15:28.360 the other party does better in a mid term. Yeah. 0:15:28.440 --> 0:15:31.200 Since the nineteen fifties, that rule has been true in 0:15:31.280 --> 0:15:35.120 every mid term except two of them, around the time 0:15:35.160 --> 0:15:38.760 that Republicans were working to impeach President Clinton. Uh, and 0:15:38.920 --> 0:15:42.000 in two thousand two, just um, you know, fourteen months 0:15:42.040 --> 0:15:46.000 after the September eleventh terrorist attacks. But otherwise, the out party, 0:15:46.200 --> 0:15:48.360 the party that it does not hold the White House, 0:15:48.840 --> 0:15:51.640 picks up seats in mid terms. How is the out 0:15:51.720 --> 0:15:56.400 party doing this time around? Right now? There's really two 0:15:56.520 --> 0:15:58.880 stories to tell. In the in the House the U 0:15:59.000 --> 0:16:02.240 S House, UH, the Democrats are looking good. That every 0:16:02.440 --> 0:16:07.720 indicator and every UH sort of signal and UH data 0:16:07.800 --> 0:16:12.800 bit that political scientists look at show good things for Democrats. 0:16:12.920 --> 0:16:16.320 Republicans are retiring. There are a lot of Republicans who 0:16:16.520 --> 0:16:22.400 are holding seats in districts that Hillary Clinton one enthusiasm 0:16:22.520 --> 0:16:25.400 is on their side. The general a generic ballot numbers 0:16:25.480 --> 0:16:27.840 on their side, and so it looks good in the House. 0:16:28.200 --> 0:16:31.200 The Senate is a different story because the numbers are 0:16:31.480 --> 0:16:34.960 more difficult for Democrats in the Senate because there are 0:16:35.000 --> 0:16:39.840 a lot of UH seats held held in states that 0:16:40.160 --> 0:16:42.720 Donald Trump did quite well and held by Democrats and 0:16:42.800 --> 0:16:45.120 states donald Trump did quite well, and so they're on 0:16:45.200 --> 0:16:47.840 the defensive in the Senate. John, you explore this concept 0:16:47.920 --> 0:16:52.040 of nominating the embarrassing versus nominating the electable. Walk me 0:16:52.120 --> 0:16:54.520 through that concept and perhaps to find what is embarrassing 0:16:56.840 --> 0:17:00.720 well embarrassing inen is the type of ended it who 0:17:01.440 --> 0:17:04.399 we're seeing right now in West Virginia. A candidate who's 0:17:04.520 --> 0:17:08.720 injecting racial slurs into his rhetoric. Who is um a 0:17:08.800 --> 0:17:12.720 convicted felon responsible for the deaths of twenty nine miners 0:17:13.000 --> 0:17:17.040 in UM an accident UH in West Virginia which the 0:17:17.119 --> 0:17:20.480 company cut corners around UM. That is not the type 0:17:20.520 --> 0:17:23.960 of individual who most people would want to see running 0:17:24.080 --> 0:17:26.439 for the United States Senate or sitting in the United 0:17:26.480 --> 0:17:30.199 States Senate. And we have a variety of different uh 0:17:30.920 --> 0:17:34.720 hues of that kind of embarrassing and Republicans have fallen 0:17:34.800 --> 0:17:37.280 victim to these types of candidates before, and it's a 0:17:37.359 --> 0:17:40.880 real problem. Part of your study of governance, John, who 0:17:40.920 --> 0:17:42.919 Deck with his folks with Brookings and were the real 0:17:43.000 --> 0:17:46.560 focus on governance is I believe about money as well? 0:17:47.440 --> 0:17:50.399 Is everybody got money up to the eyeballs this time around, 0:17:50.640 --> 0:17:54.240 or is one of the parties are selected races running 0:17:54.320 --> 0:17:57.199 on fumes, or they just don't have the million dollars 0:17:57.280 --> 0:18:00.880 you need. Well, the parties are well funded um, depending 0:18:00.920 --> 0:18:03.720 on which campaign accounts you're looking at. In some places, 0:18:03.800 --> 0:18:07.000 Democrats are doing quite well. In other places, Republicans are 0:18:07.040 --> 0:18:11.240 doing quite well. Candidates are raising money um exceptional levels. 0:18:11.280 --> 0:18:15.639 In fact, we have UH an unprecedented number of Democrats 0:18:15.760 --> 0:18:19.239 running for congressional seats in this midterm election, and an 0:18:19.359 --> 0:18:23.960 unprecedented number of those as a percentage, are raising significant 0:18:24.000 --> 0:18:28.000 sums of money. And while UH, money doesn't always determine 0:18:28.040 --> 0:18:30.159 the outcome, that is, it's not always true that the 0:18:30.200 --> 0:18:33.760 person who raises more money wins. You do need some 0:18:34.040 --> 0:18:36.520 level of funding to be legitimate. You're not going to 0:18:36.640 --> 0:18:39.440 be if you're running against someone who has five million 0:18:39.480 --> 0:18:43.040 dollars in the bank and you raised five thousand dollars, Yeah, 0:18:43.040 --> 0:18:45.639 you're probably not going to win that race. But but 0:18:45.880 --> 0:18:48.560 money is being raised hand over fist in American elections 0:18:48.640 --> 0:18:50.560 this time, John, let's talk about the message on the 0:18:50.800 --> 0:18:53.920 campaign trail. The lazy sort of one oh one kind 0:18:53.960 --> 0:18:57.600 of approach to Trump journalism is to look at whatever 0:18:57.680 --> 0:18:59.520 he does or whatever he's about to do and say, 0:18:59.800 --> 0:19:02.360 this is about playing to the base. Um, we see 0:19:02.400 --> 0:19:04.640 that with Iran at two pm today, this is about 0:19:04.680 --> 0:19:06.880 playing to the base. Does the base really care about 0:19:06.960 --> 0:19:11.000 the j c pl A. Uh No, they really don't. Um. 0:19:11.240 --> 0:19:14.800 What the base cares about, oftentimes is what the President 0:19:14.920 --> 0:19:17.520 tells them they should care about. Because for a lot 0:19:17.600 --> 0:19:19.600 of them, that's not a criticism of those voters. For 0:19:19.640 --> 0:19:22.680 a lot of those voters, they truly believe that the 0:19:22.800 --> 0:19:25.439 direction the President has led them so far has been 0:19:25.480 --> 0:19:28.520 a good one. And while they don't care, like you 0:19:28.600 --> 0:19:30.359 said about the j c p o A, they do 0:19:30.600 --> 0:19:35.280 care about America winning, America, cutting better deals, America positioning 0:19:35.320 --> 0:19:38.119 itself better in the global setting than it has in 0:19:38.200 --> 0:19:41.560 the past. And what the President is conveyed to those 0:19:41.640 --> 0:19:44.120 voters is that the Iran deal is bad for them 0:19:44.280 --> 0:19:47.080 and something different will be better. What will you look 0:19:47.160 --> 0:19:50.960 for tonight at ten p m. Well, I think all 0:19:51.040 --> 0:19:54.080 eyes are on West Virginia. UM. West Virginia has an 0:19:54.119 --> 0:19:58.960 opportunity tonight to end this Senate race and deliver that 0:19:59.200 --> 0:20:03.840 race to the incumbent democrat. If West Virginia voters UM 0:20:04.240 --> 0:20:08.879 nominate blanket shift. It will be a disaster for the party. 0:20:09.240 --> 0:20:12.000 It will be a missed opportunity for the party UM 0:20:12.080 --> 0:20:15.600 to really challenge a vulnerable Democrat, and it will be 0:20:15.880 --> 0:20:19.280 I think a signal to other Republican voters in the 0:20:19.400 --> 0:20:23.120 country that there are consequences for voting for just bad, 0:20:23.320 --> 0:20:28.240 outrageous candidates. John, Thank you so much. John Hudak withings 0:20:28.680 --> 0:20:32.320 here on the midterm elections. Kevin Surley, I know, is hugely, 0:20:32.480 --> 0:20:49.600 hugely focused on that as well. This is a joy 0:20:50.440 --> 0:20:53.320 and it is a joy because as we talked to 0:20:53.440 --> 0:20:56.040 people like and Richards of M ANDG and London, or 0:20:56.160 --> 0:20:59.920 Sally Crawcheck, where there was steam work at Sanford Bernstein 0:21:00.080 --> 0:21:03.240 years ago in securities analysis, it is one thing to 0:21:03.400 --> 0:21:08.960 speak on employment and diversity with someone with first order 0:21:09.320 --> 0:21:13.879 academic chops. Barbara why is out of the prestigious combine 0:21:14.119 --> 0:21:19.080 of the South Carolina University University of Carolina Electrical Engineering. 0:21:19.160 --> 0:21:22.080 You were double e back there and one day you 0:21:22.280 --> 0:21:26.920 wandered into essentials of physics one p H Y S 0:21:27.000 --> 0:21:29.360 two eleven and you how lonely were you? How many 0:21:29.440 --> 0:21:32.680 women were in physics one at South Carolina a few 0:21:32.760 --> 0:21:36.760 years back, so not very many. But what I'll say 0:21:36.920 --> 0:21:39.440 is I grew up in the Carolinas, in a tiny 0:21:39.520 --> 0:21:43.520 little dirt road town near Myrtle Beach, and I had 0:21:43.600 --> 0:21:46.920 five brothers and young as of eight kids, two sisters. 0:21:47.560 --> 0:21:49.800 Uh So, I entered into Carolina with a lot of 0:21:49.880 --> 0:21:54.800 courage and strength just surviving dinner with all those I 0:21:54.800 --> 0:21:57.240 don't like, the Brussels Strouds. Good I'll lead them good bye. 0:21:57.440 --> 0:22:01.680 Exactly so, uh So, I would say my my parents, 0:22:01.840 --> 0:22:05.199 neither of whom graduated from high school, yet they had 0:22:05.280 --> 0:22:09.600 instilled in us that education was the path to empowerment. 0:22:09.840 --> 0:22:12.440 Is the loneliness you know as a woman at South 0:22:12.520 --> 0:22:16.720 Carolina double E the same as the loneliness today in engineering, 0:22:17.080 --> 0:22:19.399 I would suggest there's not much change. Even with all 0:22:19.400 --> 0:22:21.800 the efforts. We got a long way to go where 0:22:21.840 --> 0:22:24.679 women are inclusive in stem So, I would say, if 0:22:24.720 --> 0:22:29.359 you look at women and underrepresented minorities in engineering today, 0:22:29.800 --> 0:22:32.320 we haven't made a ton of progress. And this is 0:22:32.359 --> 0:22:34.960 why the diversity and inclusion initiative work that Intel is 0:22:35.119 --> 0:22:38.560 driving is so paramount to really move in the needle. 0:22:39.320 --> 0:22:42.320 And what I will say is our CEO, Brian Krezana, 0:22:43.040 --> 0:22:46.880 he announced a three dred million dollar initiative to really 0:22:47.040 --> 0:22:50.879 drive critical progress in this area. UM, and since that 0:22:51.880 --> 0:22:56.080 launch of the initiative, we've reduced our market availability gap 0:22:56.800 --> 0:23:02.840 by a yet let me tell you, I'm excited to 0:23:02.880 --> 0:23:05.520 tell you all about it. So, uh, you mentioned this 0:23:05.640 --> 0:23:09.120 in terms of representations, So we know women roughly represent 0:23:09.200 --> 0:23:13.040 about of the workforce today, but not all those women, 0:23:13.080 --> 0:23:16.399 to your great point, are entering into STEM careers. So 0:23:16.640 --> 0:23:20.200 Intel's goal and the metric is around the market that 0:23:20.359 --> 0:23:23.280 is available with women in STEM careers as well as 0:23:23.440 --> 0:23:27.280 African Americans, Hispanics and Native Americans. And we desire to 0:23:27.400 --> 0:23:31.919 be at that market availability metric are higher and willing 0:23:32.240 --> 0:23:36.080 as we increase our initiatives and investments earlier in K 0:23:36.200 --> 0:23:40.400 through twelve in college. As that market availability number increases, 0:23:40.720 --> 0:23:44.719 we want to increase with that. Now, Barbara, you're here, uh, 0:23:45.119 --> 0:23:46.920