1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 2 00:00:13,960 --> 00:00:17,560 Speaker 1: we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,640 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Steve 5 00:00:27,640 --> 00:00:31,080 Speaker 1: Shibaron has it federated. And what's so important about what 6 00:00:31,320 --> 00:00:34,879 Speaker 1: Mr Shivaron does is he writes really important notes of 7 00:00:34,920 --> 00:00:38,360 Speaker 1: the international balances out there and then what to do 8 00:00:38,440 --> 00:00:41,239 Speaker 1: with your investment at Capital. We're thrilled he could join 9 00:00:41,320 --> 00:00:44,199 Speaker 1: us and federated him as this morning up Steve. You know, 10 00:00:44,240 --> 00:00:48,000 Speaker 1: I look at your note which is basically, hey, everybody, 11 00:00:48,080 --> 00:00:51,120 Speaker 1: wake up. The US isn't as bad as all. And 12 00:00:51,200 --> 00:00:53,760 Speaker 1: does that mean that you and the team at Federated 13 00:00:53,960 --> 00:01:00,880 Speaker 1: stay hugely US centric. No. Actually, for the first time 14 00:01:00,920 --> 00:01:05,440 Speaker 1: in a while, we've closed some of our underweights internationally. 15 00:01:05,480 --> 00:01:08,000 Speaker 1: I think that the big story that's out there in 16 00:01:08,000 --> 00:01:11,440 Speaker 1: the marketplace, that's hiding in plain sight, but's the big driver, 17 00:01:11,640 --> 00:01:15,200 Speaker 1: is collectively large parts of the world are exiting recession 18 00:01:15,240 --> 00:01:18,240 Speaker 1: to stay at home. Recession is most likely ended in 19 00:01:18,280 --> 00:01:21,720 Speaker 1: a lot of places, and we're entering recovery and in 20 00:01:21,760 --> 00:01:25,800 Speaker 1: that environment, value parts of the market are likely to 21 00:01:25,880 --> 00:01:28,360 Speaker 1: catch up. And when you look at European in disease, 22 00:01:28,400 --> 00:01:32,320 Speaker 1: when you look at developed non US, there's more value 23 00:01:32,360 --> 00:01:34,959 Speaker 1: in those industries. So it's not a story about growth 24 00:01:35,080 --> 00:01:37,600 Speaker 1: rolling over and dying. It's not a story about the 25 00:01:37,720 --> 00:01:39,720 Speaker 1: US do importantly, but we think international can start to 26 00:01:39,760 --> 00:01:42,399 Speaker 1: catch up. This is so so important, Steve, you and 27 00:01:42,400 --> 00:01:45,080 Speaker 1: I've talked about it before. Let's review it right now. 28 00:01:45,120 --> 00:01:49,000 Speaker 1: I think it's of such great importance. It's not about 29 00:01:49,280 --> 00:01:54,520 Speaker 1: tech down and vailue up. It's on a relative basis, 30 00:01:54,600 --> 00:01:57,960 Speaker 1: just the value starts to do better. Right, Yeah, and 31 00:01:58,000 --> 00:02:00,520 Speaker 1: within value, right, you have to separate that between the 32 00:02:00,560 --> 00:02:03,800 Speaker 1: survivors and the and the dyers. Right there, almost all 33 00:02:03,920 --> 00:02:06,960 Speaker 1: value was a loser from the pandemic. The question is 34 00:02:07,120 --> 00:02:09,400 Speaker 1: which companies are going to survive, because those companies are 35 00:02:09,400 --> 00:02:12,200 Speaker 1: going to take share from those companies that don't survive, 36 00:02:12,680 --> 00:02:15,000 Speaker 1: and they're gonna be rerated higher when they're no longer 37 00:02:15,080 --> 00:02:18,000 Speaker 1: being priced for you know, pandemic and recession. And so 38 00:02:18,240 --> 00:02:20,239 Speaker 1: we think there's a lot of alphah to be generated 39 00:02:20,320 --> 00:02:22,639 Speaker 1: on the value side if you can engage in good 40 00:02:22,639 --> 00:02:25,640 Speaker 1: research and pick the right stocks. See if good morning 41 00:02:25,680 --> 00:02:28,000 Speaker 1: to you. What is it that drive what is the 42 00:02:28,040 --> 00:02:31,080 Speaker 1: catalyst that drives that move into value? Then? Is it's 43 00:02:31,240 --> 00:02:34,480 Speaker 1: a vaccine and and what will be the definitive vaccine 44 00:02:34,560 --> 00:02:37,560 Speaker 1: news that sort of sleepens the yield cave drives people 45 00:02:37,560 --> 00:02:41,000 Speaker 1: into value here in Europe. No, I think the vaccine 46 00:02:41,040 --> 00:02:44,040 Speaker 1: is part of this, but let's make no mistake about it. 47 00:02:44,040 --> 00:02:47,600 Speaker 1: It's not an investment strategy to pray for a cure. All. 48 00:02:47,639 --> 00:02:49,839 Speaker 1: I think any vaccine we're likely to get is more 49 00:02:50,480 --> 00:02:54,079 Speaker 1: flu vaccine than smallpox vaccine. I think the big catalyst 50 00:02:54,160 --> 00:02:55,880 Speaker 1: here is just the end of the recession. If you 51 00:02:55,919 --> 00:02:57,760 Speaker 1: look at p M I s, if you look at 52 00:02:57,760 --> 00:03:01,320 Speaker 1: retail sales, if you look at housing activity, they're all 53 00:03:01,360 --> 00:03:05,040 Speaker 1: showing economic recovery. Labor markets they're showing recovery. That in 54 00:03:05,080 --> 00:03:08,360 Speaker 1: and of itself is a catalyst. Now, what will confirm 55 00:03:08,440 --> 00:03:11,200 Speaker 1: it is if we continue to see the tenure yield 56 00:03:11,520 --> 00:03:14,520 Speaker 1: remain firm or firm. And that's what was different in 57 00:03:14,560 --> 00:03:16,880 Speaker 1: this past value run than the head fix we've gotten 58 00:03:16,880 --> 00:03:20,240 Speaker 1: before is you've got twenty basis points of ten year 59 00:03:20,320 --> 00:03:23,400 Speaker 1: bond yields up, which which you didn't get before. So 60 00:03:23,440 --> 00:03:26,000 Speaker 1: the bond markets telling you it also thinks that things 61 00:03:26,040 --> 00:03:29,680 Speaker 1: are normally as is the dollar. The dollar weakening is 62 00:03:29,720 --> 00:03:32,840 Speaker 1: a sign of normalization. You're you're taking off that safety 63 00:03:32,840 --> 00:03:35,480 Speaker 1: trade in large part. And we'll get to the dollar 64 00:03:35,800 --> 00:03:37,840 Speaker 1: the dollar shortly. Perhaps I'm just looking the year to 65 00:03:37,920 --> 00:03:40,800 Speaker 1: dight moves on some of these big stock indexes, and 66 00:03:41,080 --> 00:03:43,040 Speaker 1: many in the US well, the NAZAK and the SMP 67 00:03:43,400 --> 00:03:47,080 Speaker 1: notably of course, have termed positive year today Europe really 68 00:03:47,160 --> 00:03:50,800 Speaker 1: drags behind. Is that just a function of sector exposure, 69 00:03:50,840 --> 00:03:53,200 Speaker 1: a function of being more driven by values and growth 70 00:03:54,080 --> 00:03:56,920 Speaker 1: or does Europe deserve that kind of discount right now? 71 00:03:58,000 --> 00:04:00,880 Speaker 1: He deserves a discount. And I think you're largely because 72 00:04:00,880 --> 00:04:02,880 Speaker 1: of the sector exposure. When you look at at the 73 00:04:03,000 --> 00:04:06,640 Speaker 1: SMP five, it has, you know, significantly more tech and 74 00:04:06,640 --> 00:04:09,440 Speaker 1: calm services. When you look at you know, the eurostocks, 75 00:04:09,440 --> 00:04:11,440 Speaker 1: You've got a lot more financials, you have a lot 76 00:04:11,480 --> 00:04:14,000 Speaker 1: more energy, you have a lot more big farm and 77 00:04:14,000 --> 00:04:15,960 Speaker 1: so I think that's that's a part of it. But 78 00:04:16,040 --> 00:04:18,160 Speaker 1: I also think that there have been some overhangs in 79 00:04:18,200 --> 00:04:20,279 Speaker 1: Europe that are starting to lift. You're seeing a little 80 00:04:20,320 --> 00:04:23,720 Speaker 1: bit more fiscal cohesion up until you know, last day 81 00:04:23,800 --> 00:04:26,960 Speaker 1: or so, the virus state has been relatively well behaved. 82 00:04:27,000 --> 00:04:30,080 Speaker 1: And then I think that dollar weekening also helps make 83 00:04:30,200 --> 00:04:32,279 Speaker 1: you know, international markets a little bit more attractive for 84 00:04:32,360 --> 00:04:35,719 Speaker 1: US investors. So what are you actually doing to deploy capital? 85 00:04:35,720 --> 00:04:38,680 Speaker 1: I want to talk to you about a broader institutional 86 00:04:39,400 --> 00:04:43,440 Speaker 1: idea here had federated about what sectors actually matter now 87 00:04:43,800 --> 00:04:46,960 Speaker 1: in terms of participating in the market, Steve, but not 88 00:04:47,040 --> 00:04:49,320 Speaker 1: getting my head handed to me if I get it wrong. 89 00:04:50,080 --> 00:04:52,640 Speaker 1: That's that's exactly right, and it's a very it's gonna 90 00:04:52,680 --> 00:04:56,320 Speaker 1: be an interesting answer, and it's small caps actually, uh, 91 00:04:56,440 --> 00:05:00,200 Speaker 1: small caps is a way of playing this cyclical rotation Shin. 92 00:05:00,480 --> 00:05:03,400 Speaker 1: But even if the value story doesn't materialize as much 93 00:05:03,440 --> 00:05:06,000 Speaker 1: as you know we think it may, small caps have 94 00:05:06,040 --> 00:05:09,080 Speaker 1: another way of winning. In the first year off of 95 00:05:09,120 --> 00:05:13,119 Speaker 1: a recession bottom small cap equities tend to outperform large 96 00:05:13,120 --> 00:05:16,839 Speaker 1: caps by about twenty to five, which is a big boost. 97 00:05:16,880 --> 00:05:19,640 Speaker 1: They benefit from low rates, and we think they'll benefit 98 00:05:19,680 --> 00:05:24,039 Speaker 1: when the Fed ultimately announces average inflation targeting. They benefit 99 00:05:24,080 --> 00:05:27,200 Speaker 1: from a cyclical pickup um and we think longer term 100 00:05:27,240 --> 00:05:29,840 Speaker 1: they benefit from a manufacturing renaissance in the center of 101 00:05:29,839 --> 00:05:33,040 Speaker 1: the United States. So we've moved overweight to small caps, 102 00:05:33,200 --> 00:05:36,680 Speaker 1: particularly on the value side. We've closed our underweight internationally 103 00:05:37,000 --> 00:05:39,640 Speaker 1: and we remain overweight equities. Those are the three big 104 00:05:39,720 --> 00:05:43,600 Speaker 1: calls that we're implementing or suggesting the clients implement through 105 00:05:43,600 --> 00:05:47,640 Speaker 1: their portfolios. And Steve, what drives that manufacturing renaissance in 106 00:05:47,680 --> 00:05:50,200 Speaker 1: this in the center of the United States that you 107 00:05:50,279 --> 00:05:52,960 Speaker 1: refer to in your notes ahead of our conversation, you 108 00:05:53,040 --> 00:05:56,160 Speaker 1: talk quite a lot about population dynamics. And not to 109 00:05:56,200 --> 00:05:58,640 Speaker 1: sound too MALFUSI in a bouncing it, I'm either simple 110 00:05:58,720 --> 00:06:01,120 Speaker 1: as that or or or does that not play well 111 00:06:01,120 --> 00:06:03,240 Speaker 1: with our E s G. Credentials means to find other 112 00:06:03,320 --> 00:06:05,880 Speaker 1: investment things other than just where is the population going 113 00:06:05,880 --> 00:06:08,640 Speaker 1: to grow? Most? No, but I think population is a 114 00:06:08,680 --> 00:06:10,200 Speaker 1: big driver. It's not the only one. I think in 115 00:06:10,240 --> 00:06:12,520 Speaker 1: the long run the drivers of economic growth are in 116 00:06:12,560 --> 00:06:17,360 Speaker 1: fact population growth and innovation. And and remember companies went 117 00:06:17,440 --> 00:06:20,760 Speaker 1: to China primarily for cheap labor, you know, ten twenty 118 00:06:20,800 --> 00:06:23,920 Speaker 1: years ago. But when you're when your factory is more 119 00:06:24,000 --> 00:06:27,360 Speaker 1: technology and less labor in terms of input costs, which 120 00:06:27,360 --> 00:06:30,960 Speaker 1: you're left within China or higher shipping costs, higher energy costs, 121 00:06:31,360 --> 00:06:35,560 Speaker 1: not enough intellectual property protection, uncertainty on the GEL on 122 00:06:35,600 --> 00:06:39,360 Speaker 1: the Korean peninsula. Hong Kong's gone from the financial capital 123 00:06:39,400 --> 00:06:41,800 Speaker 1: of Asia to a state of rebellion, and there have 124 00:06:41,920 --> 00:06:44,960 Speaker 1: been some transparency issues at least around the beginning of 125 00:06:44,960 --> 00:06:48,000 Speaker 1: the pandemic. By contrast, when you look at the center 126 00:06:48,000 --> 00:06:50,120 Speaker 1: of the United States, and I would include Mexico here 127 00:06:50,480 --> 00:06:52,760 Speaker 1: and parts of Canada as well, but the center part 128 00:06:52,800 --> 00:06:56,400 Speaker 1: of North America, you have easy shipping routes to great 129 00:06:56,520 --> 00:06:58,880 Speaker 1: end markets, one of the lowest tax rates in the world, 130 00:06:59,200 --> 00:07:03,520 Speaker 1: abundant and ergy, geopolitical stability, even in these kind of 131 00:07:03,560 --> 00:07:07,040 Speaker 1: crazy political times. Um and we think that for a 132 00:07:07,080 --> 00:07:09,440 Speaker 1: lot of reasons, that becomes an attractive emerging market. And 133 00:07:09,480 --> 00:07:12,600 Speaker 1: I think policymakers on both sides of the political divide 134 00:07:12,640 --> 00:07:15,120 Speaker 1: are gonna are going to encourage that. Steve, and thank 135 00:07:15,160 --> 00:07:17,520 Speaker 1: you so much for being with Steve Schavaroni or federated 136 00:07:17,560 --> 00:07:24,200 Speaker 1: or miss with us this morning now with p JUM 137 00:07:24,320 --> 00:07:27,320 Speaker 1: and I should say, the award winning PI JAM and 138 00:07:27,440 --> 00:07:31,640 Speaker 1: fixed Income Robert Tip joins us their chief investment strategists. 139 00:07:31,880 --> 00:07:34,360 Speaker 1: What do I make of the real yield Robert Tip, 140 00:07:34,400 --> 00:07:37,280 Speaker 1: other than John Farrell's show is award winning? What do 141 00:07:37,360 --> 00:07:43,520 Speaker 1: I make of the inflation adjusted yield in America right now. Yeah, 142 00:07:43,600 --> 00:07:45,560 Speaker 1: let's it's the difficult time for people to figure out 143 00:07:45,560 --> 00:07:48,240 Speaker 1: their bonds and there's no doubt the yields are allowed 144 00:07:48,680 --> 00:07:51,080 Speaker 1: the real yield or negative and trying for people to 145 00:07:51,120 --> 00:07:54,880 Speaker 1: wrap divines around what that means. I can focus on 146 00:07:55,040 --> 00:07:58,200 Speaker 1: the normal yield, and I think that looking inside they 147 00:07:59,160 --> 00:08:02,040 Speaker 1: that those are likely to remain where they are. If 148 00:08:02,080 --> 00:08:05,920 Speaker 1: the said is going to succeed, that is going to 149 00:08:05,960 --> 00:08:09,160 Speaker 1: be measured in terms of they're pushing up inflation expectations. 150 00:08:09,320 --> 00:08:11,400 Speaker 1: Have a colleague kish line. He likes to think in 151 00:08:11,480 --> 00:08:13,800 Speaker 1: terms of the real yield. Well, he would say that 152 00:08:13,960 --> 00:08:17,320 Speaker 1: Tom is that if they succeed right now, break evens 153 00:08:17,720 --> 00:08:21,320 Speaker 1: are below two percent, and the said, once you target 154 00:08:21,320 --> 00:08:25,200 Speaker 1: a PC of two, the CPI, which is what break 155 00:08:25,280 --> 00:08:27,440 Speaker 1: evens trade off of, you're gonna have to go with 156 00:08:27,480 --> 00:08:31,280 Speaker 1: me one second, right still involve CPI is usually higher 157 00:08:31,280 --> 00:08:33,880 Speaker 1: than the PC. So the fens PC is going to 158 00:08:33,920 --> 00:08:36,040 Speaker 1: be to the CPI has got to be above two. 159 00:08:36,720 --> 00:08:39,160 Speaker 1: If the CPI is above two, and the market beliefs 160 00:08:39,160 --> 00:08:41,600 Speaker 1: that your ten your real yield, which is at minus one, 161 00:08:41,760 --> 00:08:43,800 Speaker 1: it's going to be at minus one and a half 162 00:08:43,920 --> 00:08:48,560 Speaker 1: or less. So really yield a negative and one sign 163 00:08:48,559 --> 00:08:51,520 Speaker 1: of the Feds going to said success it's gonna be 164 00:08:51,520 --> 00:08:54,080 Speaker 1: Does the market believe inflation is going to go to target? 165 00:08:54,120 --> 00:08:57,679 Speaker 1: It didn't believe it, or this crisis it doesn't believe it. Now, 166 00:08:57,800 --> 00:09:00,920 Speaker 1: well you just heard their folks. Is an adult conversation 167 00:09:01,160 --> 00:09:04,120 Speaker 1: on bonds. We've heard this across the show. I can't 168 00:09:04,120 --> 00:09:07,400 Speaker 1: say enough the value of John writing at Breen Capital 169 00:09:07,440 --> 00:09:10,000 Speaker 1: and what you're hearing from Mr Tip of Pigeum. The 170 00:09:10,000 --> 00:09:13,000 Speaker 1: way this is reported and fixated on in the media 171 00:09:13,600 --> 00:09:16,199 Speaker 1: is wrong. I don't know what else to say. It 172 00:09:16,280 --> 00:09:19,000 Speaker 1: was literally the first project I did for Matt Winkler 173 00:09:19,360 --> 00:09:22,520 Speaker 1: at Bloomberg. You take the nominal yield, as Mr Tip 174 00:09:22,880 --> 00:09:27,440 Speaker 1: just did, and then you look at the inflation expectations 175 00:09:27,880 --> 00:09:31,480 Speaker 1: and the residual is the real yield. So with that said, 176 00:09:31,600 --> 00:09:35,280 Speaker 1: Robert Tip, what would you suggest nominal yields will do? 177 00:09:35,920 --> 00:09:39,680 Speaker 1: So my my comments here have been that the friend 178 00:09:39,720 --> 00:09:42,400 Speaker 1: of the curve like just five years and then a 179 00:09:42,559 --> 00:09:45,160 Speaker 1: little bit expensive, that they're gonna stay down here. The 180 00:09:45,240 --> 00:09:47,400 Speaker 1: statins is beating a drum, and we make that a 181 00:09:47,440 --> 00:09:50,040 Speaker 1: little bit of a w type recovery, a little bit 182 00:09:50,080 --> 00:09:53,920 Speaker 1: of a step back on growth acceleration. The middle part 183 00:09:53,920 --> 00:09:55,680 Speaker 1: of the curb. The tenure is going to be in 184 00:09:55,720 --> 00:10:00,200 Speaker 1: this forty eight range. Think how whether people acknowledge at 185 00:10:00,240 --> 00:10:02,160 Speaker 1: w or seeing it, or whether they're getting a little 186 00:10:02,160 --> 00:10:04,840 Speaker 1: more optimistic. And they pushed up to eighty the back 187 00:10:04,960 --> 00:10:08,120 Speaker 1: end of the curve again diving back inside of the 188 00:10:08,160 --> 00:10:11,440 Speaker 1: yolk curt Come on, sorry, those forward rates that you love, 189 00:10:12,120 --> 00:10:14,560 Speaker 1: what's priced in in terms of where treasuries are going 190 00:10:14,640 --> 00:10:17,680 Speaker 1: to be ten, fifteen, twenty years from now, are way 191 00:10:17,720 --> 00:10:21,520 Speaker 1: too high. They're in the mid to high two percent area. 192 00:10:22,400 --> 00:10:24,480 Speaker 1: They were above, you know, and we had a correction 193 00:10:24,559 --> 00:10:27,240 Speaker 1: a few months back, but they're back pushing two percent, 194 00:10:27,320 --> 00:10:29,960 Speaker 1: which does your your bond yield is too high. So 195 00:10:30,000 --> 00:10:33,880 Speaker 1: we're looking for a stable to flatter yields on average, 196 00:10:34,400 --> 00:10:37,040 Speaker 1: which means treasuries are gonna be outperforming cash. And that's 197 00:10:37,080 --> 00:10:42,240 Speaker 1: before you even get to spreads and spread product is 198 00:10:42,240 --> 00:10:45,280 Speaker 1: training ahead of the economy. It's gotten very optimistic, it's 199 00:10:45,320 --> 00:10:49,120 Speaker 1: priced that in, but that's probably going to be the 200 00:10:49,160 --> 00:10:51,520 Speaker 1: case on balance and next trawl to twenty four months. 201 00:10:51,520 --> 00:10:54,280 Speaker 1: So this is the bottom market that looks sick, you 202 00:10:54,280 --> 00:10:56,280 Speaker 1: know to people from the outside, But when you dive 203 00:10:56,360 --> 00:10:58,200 Speaker 1: inside of it. You look at what's going on in 204 00:10:58,200 --> 00:11:01,840 Speaker 1: the economy with the trajectories like the to be uh, 205 00:11:01,880 --> 00:11:04,360 Speaker 1: you know, zero cash is gonna be a low hurdle 206 00:11:04,679 --> 00:11:07,440 Speaker 1: for the bond market the next point four months. So 207 00:11:07,480 --> 00:11:09,880 Speaker 1: what but you expect a stop good morning. You expect 208 00:11:09,880 --> 00:11:13,200 Speaker 1: a steeper curve. What is the biggest threats of that view? 209 00:11:13,320 --> 00:11:16,160 Speaker 1: Does a vaccine change that? What would be the definitive 210 00:11:16,640 --> 00:11:21,079 Speaker 1: bit of vaccine news that might threaten sorry, you expect 211 00:11:21,080 --> 00:11:23,560 Speaker 1: a flatter curve? What would what would change that from 212 00:11:23,600 --> 00:11:29,120 Speaker 1: a vaccine perspective? Absolutely? So that is uh. You know. 213 00:11:29,160 --> 00:11:32,160 Speaker 1: The thing is when you have that burst of optimism 214 00:11:32,400 --> 00:11:35,120 Speaker 1: on a vaccine, you know web and if that hits 215 00:11:36,160 --> 00:11:39,000 Speaker 1: we get to the far side of this, then you know, 216 00:11:39,080 --> 00:11:42,360 Speaker 1: CRITC ten shoot up to one percent to one thirty 217 00:11:42,480 --> 00:11:47,280 Speaker 1: or even higher depending on how effective, how quickly thinks 218 00:11:47,320 --> 00:11:51,199 Speaker 1: to normalize and so on. Um. But if the at 219 00:11:51,200 --> 00:11:54,760 Speaker 1: the end of it, right now, we've had uh, you know, 220 00:11:54,840 --> 00:11:59,840 Speaker 1: not even you know fifty recovery in employment and in 221 00:12:00,040 --> 00:12:03,480 Speaker 1: comes are being sustained by benefit payments and what we 222 00:12:03,520 --> 00:12:07,319 Speaker 1: know from past recessions. Even in this case, if it's 223 00:12:07,360 --> 00:12:09,560 Speaker 1: more rapid, it's gonna take a very long time to 224 00:12:09,559 --> 00:12:13,800 Speaker 1: get incomes elevated. And right now consumption is at a 225 00:12:13,840 --> 00:12:17,600 Speaker 1: record level. We printed record retail sales, but incomes are 226 00:12:17,640 --> 00:12:20,400 Speaker 1: quite depressed, and that, you know, speaks to a gap 227 00:12:20,880 --> 00:12:22,800 Speaker 1: that's going to be filled by some falling back. So 228 00:12:22,800 --> 00:12:25,240 Speaker 1: it will be a lot of back and forth. We've 229 00:12:25,280 --> 00:12:28,200 Speaker 1: seen a lot of rapid fluctuations in the market. I 230 00:12:28,240 --> 00:12:30,960 Speaker 1: think that you can't have births of optimism that will 231 00:12:31,000 --> 00:12:34,200 Speaker 1: temperate poor shields up. But in the long run, the 232 00:12:34,240 --> 00:12:37,440 Speaker 1: world we were in before this crisis get Let's say 233 00:12:37,440 --> 00:12:40,079 Speaker 1: that's what the world looks like with AVA being you 234 00:12:40,200 --> 00:12:45,880 Speaker 1: are looking at sub price and inflation in the treasury 235 00:12:45,960 --> 00:12:49,559 Speaker 1: market that needed to be a few cans higher. You know, 236 00:12:49,679 --> 00:12:51,880 Speaker 1: the market is going to believe, so you're gonna need 237 00:12:51,920 --> 00:12:56,680 Speaker 1: a vaccine, and you may need something like a like 238 00:12:56,760 --> 00:13:01,400 Speaker 1: a renewables boom on an energy platform the US maybe 239 00:13:01,480 --> 00:13:05,520 Speaker 1: joining Europe and then push for green and declbinization, something 240 00:13:05,640 --> 00:13:08,160 Speaker 1: you know, rightly or wrongly, whether you like it or not, 241 00:13:08,760 --> 00:13:12,000 Speaker 1: that gets you a why two K hype economic boom 242 00:13:12,040 --> 00:13:14,360 Speaker 1: to get your sustainably over one percent and the tendu 243 00:13:14,360 --> 00:13:16,720 Speaker 1: the treasury. Otherwise you're not going to see it, it's 244 00:13:16,760 --> 00:13:20,439 Speaker 1: going to be a stable to gladder curve grinding as 245 00:13:20,480 --> 00:13:25,880 Speaker 1: the secular dynamics of demographics, you know, keep these yield well, 246 00:13:26,000 --> 00:13:28,679 Speaker 1: keep bond return. Okay, so we came from a low 247 00:13:28,720 --> 00:13:31,640 Speaker 1: yield environment, that that that the virus hasn't changed that 248 00:13:31,679 --> 00:13:34,920 Speaker 1: necessarily we go back to still a low yield environment. 249 00:13:34,960 --> 00:13:38,199 Speaker 1: But when as we look for this news flow surrounding 250 00:13:38,200 --> 00:13:40,960 Speaker 1: a vaccine Robert from the from the perspective of the 251 00:13:41,000 --> 00:13:43,520 Speaker 1: bond market, should we see this as a very binary thing, 252 00:13:43,640 --> 00:13:46,680 Speaker 1: like here's some good news on a vaccine that works 253 00:13:46,679 --> 00:13:50,400 Speaker 1: from a Western drugs developer and that perhaps will be 254 00:13:50,400 --> 00:13:53,120 Speaker 1: seen positively by investors. Or should we get a bit 255 00:13:53,120 --> 00:13:55,960 Speaker 1: more granular than that, dig down into you know, how 256 00:13:56,000 --> 00:13:58,160 Speaker 1: long is it going to be effective for? And there'll 257 00:13:58,160 --> 00:13:59,640 Speaker 1: be a lot of questions, won't there as soon as 258 00:13:59,640 --> 00:14:03,240 Speaker 1: we see that needs you that's right, that's why you 259 00:14:03,240 --> 00:14:06,240 Speaker 1: want to give that nightmare to people like you to 260 00:14:06,320 --> 00:14:09,480 Speaker 1: follow and for for me to try and trade, because 261 00:14:09,520 --> 00:14:14,360 Speaker 1: the underlying dynamics dot long term secular backdrop is going 262 00:14:14,360 --> 00:14:17,320 Speaker 1: to remain unchanged, and in fact, if anything, it's worse 263 00:14:17,320 --> 00:14:19,440 Speaker 1: than as we've gone through this crisis and it's going 264 00:14:19,480 --> 00:14:23,040 Speaker 1: to continue to the deceleration workforces. Those things are just 265 00:14:23,200 --> 00:14:26,800 Speaker 1: really beginning, so that dynamic is going one way. In 266 00:14:26,840 --> 00:14:28,640 Speaker 1: the short term, you're going to get these pops and 267 00:14:28,760 --> 00:14:31,800 Speaker 1: optimism and they're going to provide training opportunities. But I 268 00:14:31,920 --> 00:14:35,480 Speaker 1: think it's going to change your secular environment being below 269 00:14:35,520 --> 00:14:38,080 Speaker 1: one percent of the tenure in all likelihood. Robert Tiff, 270 00:14:38,120 --> 00:14:40,400 Speaker 1: thank you so much for tak that discussion of nominal 271 00:14:40,480 --> 00:14:44,840 Speaker 1: less inflation expectations deriving the real yell Mr Tip with Pigam. 272 00:14:48,400 --> 00:14:51,720 Speaker 1: Robert Dawle is an interesting guy. He's a guy who 273 00:14:51,800 --> 00:14:56,400 Speaker 1: is smart, smart, smart on framing the why of optimism 274 00:14:56,400 --> 00:14:59,680 Speaker 1: And like our Gina Martin Adams of Bloomberg Intelligence, Robert 275 00:14:59,760 --> 00:15:02,360 Speaker 1: daw of Nouvene is one of those people that gives 276 00:15:02,360 --> 00:15:05,480 Speaker 1: you courage to stay in the market. So maybe you 277 00:15:05,520 --> 00:15:08,920 Speaker 1: can make some money with Home Depot, Bob Donk. You 278 00:15:09,040 --> 00:15:11,800 Speaker 1: know that you have a stock and they sort of 279 00:15:11,840 --> 00:15:14,600 Speaker 1: hang out and then they go up off news or something. 280 00:15:14,960 --> 00:15:19,160 Speaker 1: How do you identify companies like Home Depot or Apple 281 00:15:19,560 --> 00:15:23,160 Speaker 1: that just every quarters seemed to do it and every 282 00:15:23,240 --> 00:15:26,600 Speaker 1: quarters seemed to go up thankfully on both stocks. Tom 283 00:15:27,200 --> 00:15:30,080 Speaker 1: these are companies First of all, they have products that 284 00:15:30,120 --> 00:15:33,560 Speaker 1: are interesting. Second of all, they manage their business well, 285 00:15:33,920 --> 00:15:36,160 Speaker 1: and third of all, they generate a bunch of cash. 286 00:15:36,600 --> 00:15:40,880 Speaker 1: If you can find companies do those three things rather consistently, generally, 287 00:15:40,880 --> 00:15:43,480 Speaker 1: you're gonna be in good shape on those stocks. I mean, 288 00:15:43,640 --> 00:15:46,840 Speaker 1: Home DuPont news, the Walmart news, they really good news. 289 00:15:46,960 --> 00:15:48,560 Speaker 1: I mean, I mean, I know you're a glass half 290 00:15:48,560 --> 00:15:50,480 Speaker 1: full guy, But I want you to speak to the 291 00:15:50,560 --> 00:15:53,760 Speaker 1: people who are not Robert dal They don't have your experience, 292 00:15:53,960 --> 00:15:56,280 Speaker 1: they don't have your sense of history. What do you 293 00:15:56,320 --> 00:15:59,040 Speaker 1: say to the people that have missed the home Depot boat? 294 00:15:59,360 --> 00:16:01,840 Speaker 1: How do you get back on board with a total 295 00:16:01,960 --> 00:16:05,240 Speaker 1: enterprise value to But that's not in any book you 296 00:16:05,400 --> 00:16:09,360 Speaker 1: or I ever studied. Yes, well, first of all, you 297 00:16:09,400 --> 00:16:12,600 Speaker 1: have to agree that a year from now the stock 298 00:16:12,640 --> 00:16:14,760 Speaker 1: market is going to be hiring it is today, that's 299 00:16:14,840 --> 00:16:17,800 Speaker 1: my view, because the economy will be doing better and 300 00:16:17,880 --> 00:16:20,480 Speaker 1: earnings will be hired. Maybe we'll have a vaccine. That 301 00:16:20,560 --> 00:16:23,280 Speaker 1: doesn't mean we we'll have short term, short term bumps 302 00:16:23,320 --> 00:16:26,360 Speaker 1: along the way. But if that's the case, Home Depot 303 00:16:26,480 --> 00:16:28,960 Speaker 1: is probably gonna be higher a year from that is today. 304 00:16:29,000 --> 00:16:32,800 Speaker 1: So dollar cost average into those stocks that you think 305 00:16:32,840 --> 00:16:35,680 Speaker 1: are in the stratosphere and you've missed if they have 306 00:16:35,840 --> 00:16:39,440 Speaker 1: the propositions that we just talked about and aren't ridiculously valued. 307 00:16:39,480 --> 00:16:43,280 Speaker 1: Home depots up a lot, but it's still not horribly expensive, 308 00:16:43,480 --> 00:16:45,080 Speaker 1: and well, good to speak to you. I was reading 309 00:16:45,080 --> 00:16:47,640 Speaker 1: some research. It says a by the national or the sites, 310 00:16:47,680 --> 00:16:51,000 Speaker 1: the National Association of Actsive Investment Manages, and he talks 311 00:16:51,040 --> 00:16:54,000 Speaker 1: about how even those who were previously baries, you're just 312 00:16:54,040 --> 00:16:56,040 Speaker 1: kind of giving up and joining in with this bull 313 00:16:56,360 --> 00:16:58,800 Speaker 1: joining in with this rally. Do you sense that you've 314 00:16:58,800 --> 00:17:01,520 Speaker 1: got more company in or in your your bullish view 315 00:17:01,560 --> 00:17:05,119 Speaker 1: on where u S stocks head? So I'm commented about 316 00:17:05,119 --> 00:17:07,880 Speaker 1: a year from now, I'm also in the camp too 317 00:17:07,920 --> 00:17:10,399 Speaker 1: many of us are that we're a little hell ahead 318 00:17:10,440 --> 00:17:13,000 Speaker 1: of ourselves. In the short term, We've come a long way, 319 00:17:13,280 --> 00:17:17,720 Speaker 1: We've retraced the entire bear market. Earnings today are nowhere 320 00:17:17,760 --> 00:17:19,840 Speaker 1: near where they were when stocks are at the all 321 00:17:19,920 --> 00:17:22,920 Speaker 1: time high in February. So uh, and we have an election, 322 00:17:23,000 --> 00:17:26,719 Speaker 1: we have a bill we can't seem to pass. Valuation 323 00:17:26,840 --> 00:17:29,359 Speaker 1: levels are not particularly cheap, so I can make the 324 00:17:29,480 --> 00:17:33,440 Speaker 1: cautious case I don't see big downside, but those who 325 00:17:33,480 --> 00:17:36,560 Speaker 1: are a little nervous. If you have a ton of cash, 326 00:17:36,600 --> 00:17:39,480 Speaker 1: you've gotta step up and put some in uh. In 327 00:17:39,600 --> 00:17:43,120 Speaker 1: my view, UM, if you've been fully invested the whole 328 00:17:43,119 --> 00:17:45,200 Speaker 1: way and want to take a profit or two, I'm 329 00:17:45,240 --> 00:17:49,080 Speaker 1: fine with that as well. Um. Markets don't go straight 330 00:17:49,160 --> 00:17:51,840 Speaker 1: up in bull markets are straight down in bear markets, 331 00:17:51,840 --> 00:17:54,359 Speaker 1: as we all know. But do you like European stocks 332 00:17:54,359 --> 00:17:56,919 Speaker 1: at this point or is it just about the the US? 333 00:17:57,080 --> 00:17:59,879 Speaker 1: I asked, because I'm confused by the market reaction some 334 00:18:00,040 --> 00:18:02,680 Speaker 1: days during August we've got headlines of plenty about the 335 00:18:02,760 --> 00:18:05,520 Speaker 1: virus taking upwards in various parts of Europe, and yet 336 00:18:05,560 --> 00:18:07,880 Speaker 1: that doesn't weigh on European stocks as if as if 337 00:18:07,880 --> 00:18:11,560 Speaker 1: it's a big global liquidity story that's dominant. What what 338 00:18:11,640 --> 00:18:13,880 Speaker 1: do you make of Europe? You just said it, it's 339 00:18:13,920 --> 00:18:17,880 Speaker 1: the liquidity story for equities overall. The US no longer 340 00:18:18,119 --> 00:18:21,520 Speaker 1: has the interest rate advantage it had versus the rest 341 00:18:21,560 --> 00:18:25,280 Speaker 1: of the world, and the US is the most defensive 342 00:18:25,400 --> 00:18:27,919 Speaker 1: market in the world. So if you postulate that the 343 00:18:27,960 --> 00:18:31,879 Speaker 1: globe is gonna do a little better economically, non US 344 00:18:32,000 --> 00:18:34,400 Speaker 1: markets are probably going to do it better. And then 345 00:18:34,440 --> 00:18:37,560 Speaker 1: you layer on top of that the dollar weakness we've experienced, 346 00:18:37,560 --> 00:18:41,080 Speaker 1: and I think non US international stocks do a bit better. 347 00:18:41,280 --> 00:18:43,679 Speaker 1: Europe's got a lot of long term problems, as you know, 348 00:18:43,800 --> 00:18:46,720 Speaker 1: but it's fairly cheap and I think we'll continue to 349 00:18:46,760 --> 00:18:48,919 Speaker 1: do a bit better here in the near term. About 350 00:18:49,000 --> 00:18:52,240 Speaker 1: Dawn Nouvine is a t I A a company, and 351 00:18:52,280 --> 00:18:55,480 Speaker 1: that is a venerable institution looking at the long long 352 00:18:55,640 --> 00:18:59,679 Speaker 1: term of investment. The leadership of Roger Ferguson is no. 353 00:19:00,520 --> 00:19:04,320 Speaker 1: What do you advise Mr Ferguson and others about the 354 00:19:04,440 --> 00:19:08,240 Speaker 1: actuarial assumption that we're all going to live with. What's 355 00:19:08,240 --> 00:19:14,480 Speaker 1: our actual real assumption reality? Well, you know, lifespans we 356 00:19:14,560 --> 00:19:18,840 Speaker 1: know are are getting longer. Um. I had a friend 357 00:19:18,880 --> 00:19:21,879 Speaker 1: who retired recently at sixty five, and he said, I 358 00:19:21,880 --> 00:19:23,960 Speaker 1: guess I should go all in bonds. I said, wait 359 00:19:24,000 --> 00:19:26,840 Speaker 1: a minute, he's married and they're both pretty healthy. I say, 360 00:19:26,840 --> 00:19:29,080 Speaker 1: at least one of you is gonna lift a ninety. 361 00:19:29,320 --> 00:19:32,439 Speaker 1: Don't don't run away from equities. There there there's no 362 00:19:32,640 --> 00:19:35,680 Speaker 1: twenty five year period where stocks haven't beaten out the things. 363 00:19:35,680 --> 00:19:38,480 Speaker 1: So we have to make sure people are aware of 364 00:19:38,520 --> 00:19:41,679 Speaker 1: those sorts of things. The other actual real assumption I 365 00:19:41,720 --> 00:19:44,240 Speaker 1: think that we have to think about is what's the 366 00:19:44,320 --> 00:19:48,520 Speaker 1: long term return for you know, the traditional sixty forty blend. 367 00:19:48,920 --> 00:19:51,680 Speaker 1: It's not gonna be in the next ten years most likely, 368 00:19:51,760 --> 00:19:54,800 Speaker 1: Tom what has been in the last fifty kind of 369 00:19:55,480 --> 00:19:57,880 Speaker 1: nearly ten percent. It's going to be much lower. And 370 00:19:58,080 --> 00:20:01,800 Speaker 1: that's the reality of the These long term s allocation 371 00:20:01,840 --> 00:20:04,160 Speaker 1: programs are gonna have to pay in Bob doing those, 372 00:20:04,200 --> 00:20:06,520 Speaker 1: I'm just setting them up for the second question. I mean, 373 00:20:06,560 --> 00:20:09,520 Speaker 1: that's the act here, folks, bobbed all. The question is 374 00:20:09,560 --> 00:20:14,480 Speaker 1: if that's the reality of a lower actual assumption, do 375 00:20:14,680 --> 00:20:20,280 Speaker 1: you go more diversified or less diversified or maybe more general, 376 00:20:20,720 --> 00:20:24,960 Speaker 1: how do you diversify? Yeah, so you have to have diversification, 377 00:20:25,240 --> 00:20:30,560 Speaker 1: but it's not just stocks and bonds. Uh, they're alternative assets, 378 00:20:30,800 --> 00:20:34,600 Speaker 1: um that have to be considered in portfolios. Uh, louvine 379 00:20:34,600 --> 00:20:38,080 Speaker 1: T I a big investor in farmland, for example, and 380 00:20:38,119 --> 00:20:41,240 Speaker 1: that that's an area people don't even think about generally. 381 00:20:41,280 --> 00:20:45,520 Speaker 1: But there's an area for diversification within the public markets, 382 00:20:45,520 --> 00:20:48,720 Speaker 1: within US equities where I've spent my career. You've got 383 00:20:48,840 --> 00:20:51,800 Speaker 1: investing companies that are gonna make it happen, and so 384 00:20:51,960 --> 00:20:55,840 Speaker 1: you might want a more targeted portfolio in an environment 385 00:20:55,960 --> 00:20:58,320 Speaker 1: where the gains overall the market is not going to 386 00:20:58,520 --> 00:21:01,080 Speaker 1: lift every boat, is what I'm trying. There's some really 387 00:21:01,119 --> 00:21:04,160 Speaker 1: important observations there, folks, against the canon of the last 388 00:21:04,160 --> 00:21:07,119 Speaker 1: twenty years and how things are changing. Robert doll is 389 00:21:07,200 --> 00:21:15,000 Speaker 1: always thank you. He is with now Vene. He is 390 00:21:15,000 --> 00:21:19,240 Speaker 1: the double degree to engineer out of ann Arbor. Garland Gilchrist. 391 00:21:19,280 --> 00:21:22,280 Speaker 1: He is Lieutenant Governor of the state of Michigan, and 392 00:21:22,320 --> 00:21:25,679 Speaker 1: he is vice chair of the Democratic National Committee. You 393 00:21:25,720 --> 00:21:28,600 Speaker 1: know the math. You know it better than anybody in 394 00:21:28,640 --> 00:21:31,639 Speaker 1: the party. Garland. You've got to get out the vote. 395 00:21:32,040 --> 00:21:34,199 Speaker 1: How are you going to get the kids out? And 396 00:21:34,240 --> 00:21:36,440 Speaker 1: how are you going to get blacks out from sea 397 00:21:36,560 --> 00:21:39,680 Speaker 1: to shining Sea. Well, thank you for having me today. 398 00:21:39,840 --> 00:21:42,720 Speaker 1: And this is exactly the question that Democrats are looking 399 00:21:42,720 --> 00:21:45,159 Speaker 1: to answer in Michigan around the country. To put it 400 00:21:45,160 --> 00:21:48,720 Speaker 1: in perspective, Donald Trump won Michigan by ten thousand, seven 401 00:21:48,920 --> 00:21:52,359 Speaker 1: four votes. But Gretchen Whitmer, our governor who you heard 402 00:21:52,400 --> 00:21:55,000 Speaker 1: from last night from a U a W. Union hall, 403 00:21:55,080 --> 00:21:58,280 Speaker 1: from a manufacturing facility. Her and I won Michigan by 404 00:21:58,320 --> 00:22:01,520 Speaker 1: four hundred thousand votes or points. And we did that 405 00:22:01,800 --> 00:22:04,160 Speaker 1: by simply showing up and making sure that every voter 406 00:22:04,320 --> 00:22:06,119 Speaker 1: heard from us in every part of the state. And 407 00:22:06,119 --> 00:22:08,840 Speaker 1: when you talk about black voters in particular, you know, 408 00:22:08,920 --> 00:22:11,880 Speaker 1: Joe Biden Kamala Harris are running on the most progressive 409 00:22:11,920 --> 00:22:14,879 Speaker 1: agenda for opportunity and racial equity that any president's ever 410 00:22:14,960 --> 00:22:17,680 Speaker 1: run on. And we can tell that story, as you said, 411 00:22:17,760 --> 00:22:20,560 Speaker 1: from she Seed to see. Well, you can do it 412 00:22:20,600 --> 00:22:23,800 Speaker 1: from c to Shining Sea. But let's go west to Kalamazoo, Michigan, 413 00:22:23,840 --> 00:22:26,600 Speaker 1: where they used to build checker cabs. Okay, it's a 414 00:22:26,640 --> 00:22:30,000 Speaker 1: different Kalamazoo than it was. Now, how do the Democrats 415 00:22:30,119 --> 00:22:34,479 Speaker 1: win in Kalamazoo if they're gonna go progressive liberal? How 416 00:22:34,640 --> 00:22:37,439 Speaker 1: much do you have to shift to the center to 417 00:22:37,600 --> 00:22:41,399 Speaker 1: take Flint and to take Kalamazoo. You gotta stay with 418 00:22:41,560 --> 00:22:43,919 Speaker 1: you gotta never shipped, you stay with your values. And 419 00:22:43,920 --> 00:22:46,760 Speaker 1: even in Kalamazoo, we just saw this week, Uh, the 420 00:22:46,800 --> 00:22:50,560 Speaker 1: far right, neo Nazi Proud Boys were demonstrating on the 421 00:22:50,560 --> 00:22:53,239 Speaker 1: streets to Kalamazoo and they were met with resistance from 422 00:22:53,280 --> 00:22:55,439 Speaker 1: people who were stepping up and calling for racial justice 423 00:22:55,440 --> 00:22:58,000 Speaker 1: and racial equity. They were stepping up for an agenda 424 00:22:58,240 --> 00:23:00,919 Speaker 1: like Joe Biden and Kamala Harris and saying no to 425 00:23:00,960 --> 00:23:03,400 Speaker 1: the rhetoric and the division and the danger and destruction 426 00:23:03,440 --> 00:23:06,440 Speaker 1: and depth of Donald Trump. And so I think in Kalamazoo, 427 00:23:06,800 --> 00:23:10,359 Speaker 1: in Grand Rapids, in Macomb County, all places where Gregion 428 00:23:10,840 --> 00:23:13,720 Speaker 1: I one eighteen we laid out the blueprint, and I'm 429 00:23:13,720 --> 00:23:16,080 Speaker 1: proud that Joe Biden Kamala Harris are ready to pick 430 00:23:16,160 --> 00:23:17,560 Speaker 1: up where we left off and take it to the 431 00:23:17,600 --> 00:23:21,600 Speaker 1: next level. Lieutenant Governor, good morning from London. If if 432 00:23:21,640 --> 00:23:25,760 Speaker 1: we don't have a new stimulus package, who will your 433 00:23:25,840 --> 00:23:29,879 Speaker 1: voters blame? The Republicans are the Democrats? I think that 434 00:23:29,960 --> 00:23:32,879 Speaker 1: Michigan voters have been clear for this entire crisis that 435 00:23:32,920 --> 00:23:36,680 Speaker 1: Donald Trump is not only a failure, but his failure, 436 00:23:36,760 --> 00:23:39,400 Speaker 1: his lack of a national strategy has led to dead 437 00:23:39,440 --> 00:23:41,760 Speaker 1: Michiganers that did not have to die. And this is 438 00:23:41,800 --> 00:23:44,560 Speaker 1: personal for me. Twenty three people in my life have 439 00:23:44,720 --> 00:23:48,000 Speaker 1: died from COVID nineteen uh. They all have stories like 440 00:23:48,000 --> 00:23:50,600 Speaker 1: the people whose stories we heard about last night. They 441 00:23:50,640 --> 00:23:53,960 Speaker 1: will hold this president accountable. And you heard Governor Woman 442 00:23:54,040 --> 00:23:58,399 Speaker 1: talk about responsibility. Leaders take responsibility, they don't run from it. 443 00:23:58,440 --> 00:24:00,119 Speaker 1: And that's exactly what Donald Trump has been doing. And 444 00:24:00,240 --> 00:24:04,640 Speaker 1: he's denied, he's lied, he shirked, he shrunk away, he's 445 00:24:04,760 --> 00:24:07,520 Speaker 1: hid from the problem rather than stepping up and solving them. 446 00:24:07,640 --> 00:24:09,240 Speaker 1: But I'm not worried about that. With Joe Biden and 447 00:24:09,280 --> 00:24:11,600 Speaker 1: Kamala Harris and Joe Biden has showed up for the 448 00:24:11,640 --> 00:24:14,159 Speaker 1: people of Michigan, for the people of Detroit time and 449 00:24:14,240 --> 00:24:15,800 Speaker 1: time again over the years. I think it's what he's 450 00:24:15,800 --> 00:24:19,240 Speaker 1: going to continue to do here. But if that's the 451 00:24:19,320 --> 00:24:22,280 Speaker 1: case and people think that's then it wouldn't be at 452 00:24:22,280 --> 00:24:24,680 Speaker 1: all a contested election. Do you worry that people say 453 00:24:24,680 --> 00:24:27,840 Speaker 1: that they'll vote for Joe Biden and actually vote for 454 00:24:27,840 --> 00:24:30,640 Speaker 1: for you know, Trump. Do you worry that the polls 455 00:24:31,160 --> 00:24:34,320 Speaker 1: aren't really reflective of what people will do come November. 456 00:24:34,680 --> 00:24:36,800 Speaker 1: I think that we always have to consider this to 457 00:24:36,840 --> 00:24:39,359 Speaker 1: be a close election because it was so close in seen. 458 00:24:39,600 --> 00:24:41,720 Speaker 1: We have to work hard, and as I indicated before, 459 00:24:42,000 --> 00:24:43,960 Speaker 1: we have to talk to every voter, and the Michigan 460 00:24:44,000 --> 00:24:46,440 Speaker 1: Democratic Party and the Democratic Party across the country never 461 00:24:46,440 --> 00:24:48,960 Speaker 1: stopped talking to voters after twenty sixteen because we knew 462 00:24:49,000 --> 00:24:50,400 Speaker 1: we had a lot of work to do. And you're 463 00:24:50,400 --> 00:24:52,840 Speaker 1: going to see the evidence of that. In Michigan, We've 464 00:24:52,840 --> 00:24:54,680 Speaker 1: been able to connect with people because we knocked on 465 00:24:54,720 --> 00:24:56,840 Speaker 1: their doors in twenty nineteen, so when we had to 466 00:24:56,880 --> 00:24:59,280 Speaker 1: stop knocking doors in we could keep calling them and 467 00:24:59,320 --> 00:25:01,600 Speaker 1: keep text message him. Our movement is strong, and I 468 00:25:01,680 --> 00:25:04,080 Speaker 1: believe it's going to deliver Michigan and across the country, 469 00:25:04,280 --> 00:25:06,240 Speaker 1: and we have to run through the finish line. So no, 470 00:25:06,359 --> 00:25:08,919 Speaker 1: we're not going to rest on any laurels or any polls. 471 00:25:09,119 --> 00:25:11,760 Speaker 1: We're gonna continue to work all the way through November 472 00:25:11,800 --> 00:25:14,160 Speaker 1: so that we have the privilege of working and leading 473 00:25:14,160 --> 00:25:16,960 Speaker 1: on behalf of all the American people in January. Was 474 00:25:17,040 --> 00:25:19,960 Speaker 1: that the difference the last time around. You have mentioned 475 00:25:20,000 --> 00:25:24,360 Speaker 1: twice in this conversation, Lieutenant Governor, the idea of showing 476 00:25:24,440 --> 00:25:29,080 Speaker 1: up in campaigning is a stark reality that Secretary Clinton 477 00:25:29,440 --> 00:25:33,800 Speaker 1: did not campaign to the greatest advantage four years ago. Well, 478 00:25:33,840 --> 00:25:36,440 Speaker 1: I think that we need to focus on is how 479 00:25:36,440 --> 00:25:39,760 Speaker 1: we can connect with that local community intelligence rather relitigating. 480 00:25:41,000 --> 00:25:42,439 Speaker 1: What I think we need to focus on is the 481 00:25:42,480 --> 00:25:45,640 Speaker 1: fact that we learned a lot in ten here in Michigan. 482 00:25:45,680 --> 00:25:48,520 Speaker 1: For example, Governor women visited all eighty three counties of 483 00:25:48,560 --> 00:25:50,520 Speaker 1: our state when I came onto the ticket as her 484 00:25:50,600 --> 00:25:53,840 Speaker 1: running mate. I visited forty counties myself. It's about showing 485 00:25:53,920 --> 00:25:56,119 Speaker 1: up and about being president. And you saw with the 486 00:25:56,160 --> 00:25:58,439 Speaker 1: virtual convention we have to get creative about how to 487 00:25:58,440 --> 00:26:00,679 Speaker 1: do that safely in COVID nineteen and I think what 488 00:26:00,800 --> 00:26:03,400 Speaker 1: you saw is how that creativity can lead to real 489 00:26:03,640 --> 00:26:07,080 Speaker 1: human connection, to elevate the stories of people and of 490 00:26:07,200 --> 00:26:09,680 Speaker 1: voters and of Americans. And that's what we have to 491 00:26:09,720 --> 00:26:12,480 Speaker 1: focus on here. We have some really creative tactics. Were 492 00:26:12,520 --> 00:26:15,280 Speaker 1: excited to roll out to engage voters of all stripes, 493 00:26:15,320 --> 00:26:17,840 Speaker 1: to make sure black people maximized turn out, to make 494 00:26:17,840 --> 00:26:20,159 Speaker 1: sure the suburbs turn out, to make sure our Latino 495 00:26:20,240 --> 00:26:22,879 Speaker 1: brothers and sisters turn out. And I'm excited um that 496 00:26:22,920 --> 00:26:25,440 Speaker 1: we're gonna have record breaking turnout this year. And when 497 00:26:25,480 --> 00:26:28,119 Speaker 1: more people vote in Michigan, Democrats win and we are 498 00:26:28,160 --> 00:26:30,240 Speaker 1: not afraid of that. We want everyone to vote safely 499 00:26:30,400 --> 00:26:32,760 Speaker 1: and got by mail. We look forward to further updates, 500 00:26:32,760 --> 00:26:35,600 Speaker 1: Lieutenant Governor. Thank you so much. Mr gil Christ, of 501 00:26:35,680 --> 00:26:38,720 Speaker 1: course from Michigan, is a vice chair of the Democratic 502 00:26:38,800 --> 00:26:46,680 Speaker 1: National Committee. Karla Freeman with us right now of JOHNS Hopkins, 503 00:26:46,760 --> 00:26:50,159 Speaker 1: the executive director of Foreign Policy Institute UH and a 504 00:26:50,240 --> 00:26:53,800 Speaker 1: professor of Chinese studies is well, Carla, what I find 505 00:26:53,880 --> 00:26:57,760 Speaker 1: interesting about what Inbassador Bolton said there. It's not China 506 00:26:58,160 --> 00:27:02,800 Speaker 1: US or Russia US, but the thing we never talked about, 507 00:27:02,840 --> 00:27:06,199 Speaker 1: which is the relationship of China and Russia. You know 508 00:27:06,280 --> 00:27:09,480 Speaker 1: in our childhoods that was a huge deal. Is the 509 00:27:09,600 --> 00:27:13,840 Speaker 1: relationship with Russia and China is fractious as it was then, 510 00:27:14,320 --> 00:27:18,680 Speaker 1: it's certainly become a much closer relationship in recent years. 511 00:27:18,720 --> 00:27:24,439 Speaker 1: Of course, we we remember fears of the China Russia partnership. 512 00:27:24,480 --> 00:27:30,160 Speaker 1: Their alliance of China's first alliance UH forged on Valentine's 513 00:27:30,200 --> 00:27:33,800 Speaker 1: Day in nineteen fifty UH and that lasted until the 514 00:27:33,880 --> 00:27:36,119 Speaker 1: late nineteen sixties and was a major feature of the 515 00:27:36,160 --> 00:27:40,080 Speaker 1: Cold War. After the split, of course, that helped create 516 00:27:40,080 --> 00:27:44,360 Speaker 1: an opening for the U. S and China relationship to develop. 517 00:27:44,720 --> 00:27:48,840 Speaker 1: But in recent years China and Russia have become closer, 518 00:27:49,200 --> 00:27:53,040 Speaker 1: even working out diverging tensions in Central Asia, which is 519 00:27:53,160 --> 00:27:57,240 Speaker 1: the country of the region which both countries have subucbstantial 520 00:27:57,600 --> 00:28:01,639 Speaker 1: energy and other strategic inter US. Then Dr Freeman, we 521 00:28:01,680 --> 00:28:04,359 Speaker 1: talked to Dr Roach of Viale University about this Stephen 522 00:28:04,440 --> 00:28:06,960 Speaker 1: Roach earlier this morning, let me ask you the same question. 523 00:28:07,760 --> 00:28:13,200 Speaker 1: Is the final result of Washington policy, of Trump policy 524 00:28:13,520 --> 00:28:17,280 Speaker 1: or Biden policy, will they be all that much difference 525 00:28:17,400 --> 00:28:21,359 Speaker 1: in regards to China. That's a really compelling question. And 526 00:28:21,400 --> 00:28:25,760 Speaker 1: I think that what will happen in Biden administration is 527 00:28:25,800 --> 00:28:28,920 Speaker 1: that many of the concerns that the Trump administration has 528 00:28:29,000 --> 00:28:32,280 Speaker 1: raised will carry through to the Biden administration. But I 529 00:28:32,320 --> 00:28:35,880 Speaker 1: do think that the Biden administration will look for grounds 530 00:28:35,920 --> 00:28:40,080 Speaker 1: to cooperate where uh it can with China so that 531 00:28:40,120 --> 00:28:45,160 Speaker 1: we have uh continue to have competition, concerns about technology 532 00:28:45,640 --> 00:28:51,800 Speaker 1: fast and uh other other worries about China's authoritarian push 533 00:28:51,880 --> 00:28:54,760 Speaker 1: around the world. But we will try to find areas 534 00:28:54,800 --> 00:28:57,200 Speaker 1: where we can work together. There are so many global 535 00:28:57,240 --> 00:29:01,760 Speaker 1: issues that require us China cooperate. But Carla, you're saying 536 00:29:01,840 --> 00:29:04,880 Speaker 1: is that the Democrats won't necessarily more be more sympathetic 537 00:29:05,360 --> 00:29:07,560 Speaker 1: to China, but that will they'll just do it in 538 00:29:07,560 --> 00:29:10,040 Speaker 1: a different form or do you think that there they 539 00:29:10,120 --> 00:29:14,080 Speaker 1: will find actually coming ground on things significant like trade. Yes, 540 00:29:14,160 --> 00:29:17,960 Speaker 1: I do think that will the The Democrats come from 541 00:29:17,960 --> 00:29:23,040 Speaker 1: a tradition that recognizes that globalization, appreciates globalization as a 542 00:29:23,080 --> 00:29:27,240 Speaker 1: source for economic growth, and I think that the democratic 543 00:29:27,360 --> 00:29:32,520 Speaker 1: administration will look for a way to restore an architecture 544 00:29:32,600 --> 00:29:36,200 Speaker 1: for international trade, also look for ways to deal with 545 00:29:36,280 --> 00:29:39,760 Speaker 1: issues that are important to a democratic administration, like climate change. 546 00:29:39,880 --> 00:29:41,840 Speaker 1: Of course, one of the first actions that the Trump 547 00:29:41,880 --> 00:29:45,680 Speaker 1: administration took was to withdraw the US from the Paris 548 00:29:45,720 --> 00:29:48,920 Speaker 1: Climate Accord. So there are areas where the U. S 549 00:29:48,960 --> 00:29:53,520 Speaker 1: And China have a work to productively. Have seen their 550 00:29:53,560 --> 00:29:57,320 Speaker 1: their engagement together, if you use that word, has yielded 551 00:29:57,480 --> 00:30:01,840 Speaker 1: significant benefits economically and and also in terms of managing 552 00:30:01,880 --> 00:30:06,520 Speaker 1: global threats to human security. Carla, what can you tell 553 00:30:06,560 --> 00:30:09,280 Speaker 1: us about Chinese vaccine? So there's a global race. Russian 554 00:30:09,320 --> 00:30:12,280 Speaker 1: say they have a vaccine against COVID nineteen. Where are 555 00:30:12,280 --> 00:30:15,600 Speaker 1: we on China? Will the Chinese even use the Russian vaccine? 556 00:30:16,080 --> 00:30:18,600 Speaker 1: I am not not sure about whether China would use 557 00:30:18,640 --> 00:30:20,680 Speaker 1: the Russian vaccine. There are a lot of questions about 558 00:30:20,720 --> 00:30:24,080 Speaker 1: whether that vaccine has gone through adequate testing. China's on 559 00:30:24,200 --> 00:30:28,160 Speaker 1: in a big push to develop a vaccine and is 560 00:30:28,400 --> 00:30:31,800 Speaker 1: in I think third base testing of that vaccine, and 561 00:30:31,840 --> 00:30:36,880 Speaker 1: it will uh. It's already setting up plans to distribute 562 00:30:36,920 --> 00:30:40,360 Speaker 1: the vaccine, it sell it widely around the world. There 563 00:30:40,240 --> 00:30:44,160 Speaker 1: are a number of companies in China with with with 564 00:30:44,320 --> 00:30:48,360 Speaker 1: hopeful signs of being able to launch a vaccine fairly 565 00:30:48,560 --> 00:30:51,200 Speaker 1: fairly soon. Thank you so much to Carla Freeman there 566 00:30:51,240 --> 00:30:53,280 Speaker 1: of Johns Hopkins, and be sure to check out vr 567 00:30:53,320 --> 00:30:56,000 Speaker 1: US go on the Bloomberg for the latest information, and 568 00:30:56,000 --> 00:30:59,960 Speaker 1: tune in every day for exclusive conversations with John's Happy 569 00:31:00,240 --> 00:31:04,120 Speaker 1: Experts for an inside look at battling COVID nineteen. Thanks 570 00:31:04,200 --> 00:31:08,440 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 571 00:31:08,680 --> 00:31:14,000 Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform 572 00:31:14,120 --> 00:31:18,400 Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast. 573 00:31:18,440 --> 00:31:21,960 Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio.