Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily
Speaker 1: we bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Steve
Speaker 1: Shibaron has it federated. And what's so important about what
Speaker 1: Mr Shivaron does is he writes really important notes of
Speaker 1: the international balances out there and then what to do
Speaker 1: with your investment at Capital. We're thrilled he could join
Speaker 1: us and federated him as this morning up Steve. You know,
Speaker 1: I look at your note which is basically, hey, everybody,
Speaker 1: wake up. The US isn't as bad as all. And
Speaker 1: does that mean that you and the team at Federated
Speaker 1: stay hugely US centric. No. Actually, for the first time
Speaker 1: in a while, we've closed some of our underweights internationally.
Speaker 1: I think that the big story that's out there in
Speaker 1: the marketplace, that's hiding in plain sight, but's the big driver,
Speaker 1: is collectively large parts of the world are exiting recession
Speaker 1: to stay at home. Recession is most likely ended in
Speaker 1: a lot of places, and we're entering recovery and in
Speaker 1: that environment, value parts of the market are likely to
Speaker 1: catch up. And when you look at European in disease,
Speaker 1: when you look at developed non US, there's more value
Speaker 1: in those industries. So it's not a story about growth
Speaker 1: rolling over and dying. It's not a story about the
Speaker 1: US do importantly, but we think international can start to
Speaker 1: catch up. This is so so important, Steve, you and
Speaker 1: I've talked about it before. Let's review it right now.
Speaker 1: I think it's of such great importance. It's not about
Speaker 1: tech down and vailue up. It's on a relative basis,
Speaker 1: just the value starts to do better. Right, Yeah, and
Speaker 1: within value, right, you have to separate that between the
Speaker 1: survivors and the and the dyers. Right there, almost all
Speaker 1: value was a loser from the pandemic. The question is
Speaker 1: which companies are going to survive, because those companies are
Speaker 1: going to take share from those companies that don't survive,
Speaker 1: and they're gonna be rerated higher when they're no longer
Speaker 1: being priced for you know, pandemic and recession. And so
Speaker 1: we think there's a lot of alphah to be generated
Speaker 1: on the value side if you can engage in good
Speaker 1: research and pick the right stocks. See if good morning
Speaker 1: to you. What is it that drive what is the
Speaker 1: catalyst that drives that move into value? Then? Is it's
Speaker 1: a vaccine and and what will be the definitive vaccine
Speaker 1: news that sort of sleepens the yield cave drives people
Speaker 1: into value here in Europe. No, I think the vaccine
Speaker 1: is part of this, but let's make no mistake about it.
Speaker 1: It's not an investment strategy to pray for a cure. All.
Speaker 1: I think any vaccine we're likely to get is more
Speaker 1: flu vaccine than smallpox vaccine. I think the big catalyst
Speaker 1: here is just the end of the recession. If you
Speaker 1: look at p M I s, if you look at
Speaker 1: retail sales, if you look at housing activity, they're all
Speaker 1: showing economic recovery. Labor markets they're showing recovery. That in
Speaker 1: and of itself is a catalyst. Now, what will confirm
Speaker 1: it is if we continue to see the tenure yield
Speaker 1: remain firm or firm. And that's what was different in
Speaker 1: this past value run than the head fix we've gotten
Speaker 1: before is you've got twenty basis points of ten year
Speaker 1: bond yields up, which which you didn't get before. So
Speaker 1: the bond markets telling you it also thinks that things
Speaker 1: are normally as is the dollar. The dollar weakening is
Speaker 1: a sign of normalization. You're you're taking off that safety
Speaker 1: trade in large part. And we'll get to the dollar
Speaker 1: the dollar shortly. Perhaps I'm just looking the year to
Speaker 1: dight moves on some of these big stock indexes, and
Speaker 1: many in the US well, the NAZAK and the SMP
Speaker 1: notably of course, have termed positive year today Europe really
Speaker 1: drags behind. Is that just a function of sector exposure,
Speaker 1: a function of being more driven by values and growth
Speaker 1: or does Europe deserve that kind of discount right now?
Speaker 1: He deserves a discount. And I think you're largely because
Speaker 1: of the sector exposure. When you look at at the
Speaker 1: SMP five, it has, you know, significantly more tech and
Speaker 1: calm services. When you look at you know, the eurostocks,
Speaker 1: You've got a lot more financials, you have a lot
Speaker 1: more energy, you have a lot more big farm and
Speaker 1: so I think that's that's a part of it. But
Speaker 1: I also think that there have been some overhangs in
Speaker 1: Europe that are starting to lift. You're seeing a little
Speaker 1: bit more fiscal cohesion up until you know, last day
Speaker 1: or so, the virus state has been relatively well behaved.
Speaker 1: And then I think that dollar weekening also helps make
Speaker 1: you know, international markets a little bit more attractive for
Speaker 1: US investors. So what are you actually doing to deploy capital?
Speaker 1: I want to talk to you about a broader institutional
Speaker 1: idea here had federated about what sectors actually matter now
Speaker 1: in terms of participating in the market, Steve, but not
Speaker 1: getting my head handed to me if I get it wrong.
Speaker 1: That's that's exactly right, and it's a very it's gonna
Speaker 1: be an interesting answer, and it's small caps actually, uh,
Speaker 1: small caps is a way of playing this cyclical rotation Shin.
Speaker 1: But even if the value story doesn't materialize as much
Speaker 1: as you know we think it may, small caps have
Speaker 1: another way of winning. In the first year off of
Speaker 1: a recession bottom small cap equities tend to outperform large
Speaker 1: caps by about twenty to five, which is a big boost.
Speaker 1: They benefit from low rates, and we think they'll benefit
Speaker 1: when the Fed ultimately announces average inflation targeting. They benefit
Speaker 1: from a cyclical pickup um and we think longer term
Speaker 1: they benefit from a manufacturing renaissance in the center of
Speaker 1: the United States. So we've moved overweight to small caps,
Speaker 1: particularly on the value side. We've closed our underweight internationally
Speaker 1: and we remain overweight equities. Those are the three big
Speaker 1: calls that we're implementing or suggesting the clients implement through
Speaker 1: their portfolios. And Steve, what drives that manufacturing renaissance in
Speaker 1: this in the center of the United States that you
Speaker 1: refer to in your notes ahead of our conversation, you
Speaker 1: talk quite a lot about population dynamics. And not to
Speaker 1: sound too MALFUSI in a bouncing it, I'm either simple
Speaker 1: as that or or or does that not play well
Speaker 1: with our E s G. Credentials means to find other
Speaker 1: investment things other than just where is the population going
Speaker 1: to grow? Most? No, but I think population is a
Speaker 1: big driver. It's not the only one. I think in
Speaker 1: the long run the drivers of economic growth are in
Speaker 1: fact population growth and innovation. And and remember companies went
Speaker 1: to China primarily for cheap labor, you know, ten twenty
Speaker 1: years ago. But when you're when your factory is more
Speaker 1: technology and less labor in terms of input costs, which
Speaker 1: you're left within China or higher shipping costs, higher energy costs,
Speaker 1: not enough intellectual property protection, uncertainty on the GEL on
Speaker 1: the Korean peninsula. Hong Kong's gone from the financial capital
Speaker 1: of Asia to a state of rebellion, and there have
Speaker 1: been some transparency issues at least around the beginning of
Speaker 1: the pandemic. By contrast, when you look at the center
Speaker 1: of the United States, and I would include Mexico here
Speaker 1: and parts of Canada as well, but the center part
Speaker 1: of North America, you have easy shipping routes to great
Speaker 1: end markets, one of the lowest tax rates in the world,
Speaker 1: abundant and ergy, geopolitical stability, even in these kind of
Speaker 1: crazy political times. Um and we think that for a
Speaker 1: lot of reasons, that becomes an attractive emerging market. And
Speaker 1: I think policymakers on both sides of the political divide
Speaker 1: are gonna are going to encourage that. Steve, and thank
Speaker 1: you so much for being with Steve Schavaroni or federated
Speaker 1: or miss with us this morning now with p JUM
Speaker 1: and I should say, the award winning PI JAM and
Speaker 1: fixed Income Robert Tip joins us their chief investment strategists.
Speaker 1: What do I make of the real yield Robert Tip,
Speaker 1: other than John Farrell's show is award winning? What do
Speaker 1: I make of the inflation adjusted yield in America right now. Yeah,
Speaker 1: let's it's the difficult time for people to figure out
Speaker 1: their bonds and there's no doubt the yields are allowed
Speaker 1: the real yield or negative and trying for people to
Speaker 1: wrap divines around what that means. I can focus on
Speaker 1: the normal yield, and I think that looking inside they
Speaker 1: that those are likely to remain where they are. If
Speaker 1: the said is going to succeed, that is going to
Speaker 1: be measured in terms of they're pushing up inflation expectations.
Speaker 1: Have a colleague kish line. He likes to think in
Speaker 1: terms of the real yield. Well, he would say that
Speaker 1: Tom is that if they succeed right now, break evens
Speaker 1: are below two percent, and the said, once you target
Speaker 1: a PC of two, the CPI, which is what break
Speaker 1: evens trade off of, you're gonna have to go with
Speaker 1: me one second, right still involve CPI is usually higher
Speaker 1: than the PC. So the fens PC is going to
Speaker 1: be to the CPI has got to be above two.
Speaker 1: If the CPI is above two, and the market beliefs
Speaker 1: that your ten your real yield, which is at minus one,
Speaker 1: it's going to be at minus one and a half
Speaker 1: or less. So really yield a negative and one sign
Speaker 1: of the Feds going to said success it's gonna be
Speaker 1: Does the market believe inflation is going to go to target?
Speaker 1: It didn't believe it, or this crisis it doesn't believe it. Now,
Speaker 1: well you just heard their folks. Is an adult conversation
Speaker 1: on bonds. We've heard this across the show. I can't
Speaker 1: say enough the value of John writing at Breen Capital
Speaker 1: and what you're hearing from Mr Tip of Pigeum. The
Speaker 1: way this is reported and fixated on in the media
Speaker 1: is wrong. I don't know what else to say. It
Speaker 1: was literally the first project I did for Matt Winkler
Speaker 1: at Bloomberg. You take the nominal yield, as Mr Tip
Speaker 1: just did, and then you look at the inflation expectations
Speaker 1: and the residual is the real yield. So with that said,
Speaker 1: Robert Tip, what would you suggest nominal yields will do?
Speaker 1: So my my comments here have been that the friend
Speaker 1: of the curve like just five years and then a
Speaker 1: little bit expensive, that they're gonna stay down here. The
Speaker 1: statins is beating a drum, and we make that a
Speaker 1: little bit of a w type recovery, a little bit
Speaker 1: of a step back on growth acceleration. The middle part
Speaker 1: of the curb. The tenure is going to be in
Speaker 1: this forty eight range. Think how whether people acknowledge at
Speaker 1: w or seeing it, or whether they're getting a little
Speaker 1: more optimistic. And they pushed up to eighty the back
Speaker 1: end of the curve again diving back inside of the
Speaker 1: yolk curt Come on, sorry, those forward rates that you love,
Speaker 1: what's priced in in terms of where treasuries are going
Speaker 1: to be ten, fifteen, twenty years from now, are way
Speaker 1: too high. They're in the mid to high two percent area.
Speaker 1: They were above, you know, and we had a correction
Speaker 1: a few months back, but they're back pushing two percent,
Speaker 1: which does your your bond yield is too high. So
Speaker 1: we're looking for a stable to flatter yields on average,
Speaker 1: which means treasuries are gonna be outperforming cash. And that's
Speaker 1: before you even get to spreads and spread product is
Speaker 1: training ahead of the economy. It's gotten very optimistic, it's
Speaker 1: priced that in, but that's probably going to be the
Speaker 1: case on balance and next trawl to twenty four months.
Speaker 1: So this is the bottom market that looks sick, you
Speaker 1: know to people from the outside, But when you dive
Speaker 1: inside of it. You look at what's going on in
Speaker 1: the economy with the trajectories like the to be uh,
Speaker 1: you know, zero cash is gonna be a low hurdle
Speaker 1: for the bond market the next point four months. So
Speaker 1: what but you expect a stop good morning. You expect
Speaker 1: a steeper curve. What is the biggest threats of that view?
Speaker 1: Does a vaccine change that? What would be the definitive
Speaker 1: bit of vaccine news that might threaten sorry, you expect
Speaker 1: a flatter curve? What would what would change that from
Speaker 1: a vaccine perspective? Absolutely? So that is uh. You know.
Speaker 1: The thing is when you have that burst of optimism
Speaker 1: on a vaccine, you know web and if that hits
Speaker 1: we get to the far side of this, then you know,
Speaker 1: CRITC ten shoot up to one percent to one thirty
Speaker 1: or even higher depending on how effective, how quickly thinks
Speaker 1: to normalize and so on. Um. But if the at
Speaker 1: the end of it, right now, we've had uh, you know,
Speaker 1: not even you know fifty recovery in employment and in
Speaker 1: comes are being sustained by benefit payments and what we
Speaker 1: know from past recessions. Even in this case, if it's
Speaker 1: more rapid, it's gonna take a very long time to
Speaker 1: get incomes elevated. And right now consumption is at a
Speaker 1: record level. We printed record retail sales, but incomes are
Speaker 1: quite depressed, and that, you know, speaks to a gap
Speaker 1: that's going to be filled by some falling back. So
Speaker 1: it will be a lot of back and forth. We've
Speaker 1: seen a lot of rapid fluctuations in the market. I
Speaker 1: think that you can't have births of optimism that will
Speaker 1: temperate poor shields up. But in the long run, the
Speaker 1: world we were in before this crisis get Let's say
Speaker 1: that's what the world looks like with AVA being you
Speaker 1: are looking at sub price and inflation in the treasury
Speaker 1: market that needed to be a few cans higher. You know,
Speaker 1: the market is going to believe, so you're gonna need
Speaker 1: a vaccine, and you may need something like a like
Speaker 1: a renewables boom on an energy platform the US maybe
Speaker 1: joining Europe and then push for green and declbinization, something
Speaker 1: you know, rightly or wrongly, whether you like it or not,
Speaker 1: that gets you a why two K hype economic boom
Speaker 1: to get your sustainably over one percent and the tendu
Speaker 1: the treasury. Otherwise you're not going to see it, it's
Speaker 1: going to be a stable to gladder curve grinding as
Speaker 1: the secular dynamics of demographics, you know, keep these yield well,
Speaker 1: keep bond return. Okay, so we came from a low
Speaker 1: yield environment, that that that the virus hasn't changed that
Speaker 1: necessarily we go back to still a low yield environment.
Speaker 1: But when as we look for this news flow surrounding
Speaker 1: a vaccine Robert from the from the perspective of the
Speaker 1: bond market, should we see this as a very binary thing,
Speaker 1: like here's some good news on a vaccine that works
Speaker 1: from a Western drugs developer and that perhaps will be
Speaker 1: seen positively by investors. Or should we get a bit
Speaker 1: more granular than that, dig down into you know, how
Speaker 1: long is it going to be effective for? And there'll
Speaker 1: be a lot of questions, won't there as soon as
Speaker 1: we see that needs you that's right, that's why you
Speaker 1: want to give that nightmare to people like you to
Speaker 1: follow and for for me to try and trade, because
Speaker 1: the underlying dynamics dot long term secular backdrop is going
Speaker 1: to remain unchanged, and in fact, if anything, it's worse
Speaker 1: than as we've gone through this crisis and it's going
Speaker 1: to continue to the deceleration workforces. Those things are just
Speaker 1: really beginning, so that dynamic is going one way. In
Speaker 1: the short term, you're going to get these pops and
Speaker 1: optimism and they're going to provide training opportunities. But I
Speaker 1: think it's going to change your secular environment being below
Speaker 1: one percent of the tenure in all likelihood. Robert Tiff,
Speaker 1: thank you so much for tak that discussion of nominal
Speaker 1: less inflation expectations deriving the real yell Mr Tip with Pigam.
Speaker 1: Robert Dawle is an interesting guy. He's a guy who
Speaker 1: is smart, smart, smart on framing the why of optimism
Speaker 1: And like our Gina Martin Adams of Bloomberg Intelligence, Robert
Speaker 1: daw of Nouvene is one of those people that gives
Speaker 1: you courage to stay in the market. So maybe you
Speaker 1: can make some money with Home Depot, Bob Donk. You
Speaker 1: know that you have a stock and they sort of
Speaker 1: hang out and then they go up off news or something.
Speaker 1: How do you identify companies like Home Depot or Apple
Speaker 1: that just every quarters seemed to do it and every
Speaker 1: quarters seemed to go up thankfully on both stocks. Tom
Speaker 1: these are companies First of all, they have products that
Speaker 1: are interesting. Second of all, they manage their business well,
Speaker 1: and third of all, they generate a bunch of cash.
Speaker 1: If you can find companies do those three things rather consistently, generally,
Speaker 1: you're gonna be in good shape on those stocks. I mean,
Speaker 1: Home DuPont news, the Walmart news, they really good news.
Speaker 1: I mean, I mean, I know you're a glass half
Speaker 1: full guy, But I want you to speak to the
Speaker 1: people who are not Robert dal They don't have your experience,
Speaker 1: they don't have your sense of history. What do you
Speaker 1: say to the people that have missed the home Depot boat?
Speaker 1: How do you get back on board with a total
Speaker 1: enterprise value to But that's not in any book you
Speaker 1: or I ever studied. Yes, well, first of all, you
Speaker 1: have to agree that a year from now the stock
Speaker 1: market is going to be hiring it is today, that's
Speaker 1: my view, because the economy will be doing better and
Speaker 1: earnings will be hired. Maybe we'll have a vaccine. That
Speaker 1: doesn't mean we we'll have short term, short term bumps
Speaker 1: along the way. But if that's the case, Home Depot
Speaker 1: is probably gonna be higher a year from that is today.
Speaker 1: So dollar cost average into those stocks that you think
Speaker 1: are in the stratosphere and you've missed if they have
Speaker 1: the propositions that we just talked about and aren't ridiculously valued.
Speaker 1: Home depots up a lot, but it's still not horribly expensive,
Speaker 1: and well, good to speak to you. I was reading
Speaker 1: some research. It says a by the national or the sites,
Speaker 1: the National Association of Actsive Investment Manages, and he talks
Speaker 1: about how even those who were previously baries, you're just
Speaker 1: kind of giving up and joining in with this bull
Speaker 1: joining in with this rally. Do you sense that you've
Speaker 1: got more company in or in your your bullish view
Speaker 1: on where u S stocks head? So I'm commented about
Speaker 1: a year from now, I'm also in the camp too
Speaker 1: many of us are that we're a little hell ahead
Speaker 1: of ourselves. In the short term, We've come a long way,
Speaker 1: We've retraced the entire bear market. Earnings today are nowhere
Speaker 1: near where they were when stocks are at the all
Speaker 1: time high in February. So uh, and we have an election,
Speaker 1: we have a bill we can't seem to pass. Valuation
Speaker 1: levels are not particularly cheap, so I can make the
Speaker 1: cautious case I don't see big downside, but those who
Speaker 1: are a little nervous. If you have a ton of cash,
Speaker 1: you've gotta step up and put some in uh. In
Speaker 1: my view, UM, if you've been fully invested the whole
Speaker 1: way and want to take a profit or two, I'm
Speaker 1: fine with that as well. Um. Markets don't go straight
Speaker 1: up in bull markets are straight down in bear markets,
Speaker 1: as we all know. But do you like European stocks
Speaker 1: at this point or is it just about the the US?
Speaker 1: I asked, because I'm confused by the market reaction some
Speaker 1: days during August we've got headlines of plenty about the
Speaker 1: virus taking upwards in various parts of Europe, and yet
Speaker 1: that doesn't weigh on European stocks as if as if
Speaker 1: it's a big global liquidity story that's dominant. What what
Speaker 1: do you make of Europe? You just said it, it's
Speaker 1: the liquidity story for equities overall. The US no longer
Speaker 1: has the interest rate advantage it had versus the rest
Speaker 1: of the world, and the US is the most defensive
Speaker 1: market in the world. So if you postulate that the
Speaker 1: globe is gonna do a little better economically, non US
Speaker 1: markets are probably going to do it better. And then
Speaker 1: you layer on top of that the dollar weakness we've experienced,
Speaker 1: and I think non US international stocks do a bit better.
Speaker 1: Europe's got a lot of long term problems, as you know,
Speaker 1: but it's fairly cheap and I think we'll continue to
Speaker 1: do a bit better here in the near term. About
Speaker 1: Dawn Nouvine is a t I A a company, and
Speaker 1: that is a venerable institution looking at the long long
Speaker 1: term of investment. The leadership of Roger Ferguson is no.
Speaker 1: What do you advise Mr Ferguson and others about the
Speaker 1: actuarial assumption that we're all going to live with. What's
Speaker 1: our actual real assumption reality? Well, you know, lifespans we
Speaker 1: know are are getting longer. Um. I had a friend
Speaker 1: who retired recently at sixty five, and he said, I
Speaker 1: guess I should go all in bonds. I said, wait
Speaker 1: a minute, he's married and they're both pretty healthy. I say,
Speaker 1: at least one of you is gonna lift a ninety.
Speaker 1: Don't don't run away from equities. There there there's no
Speaker 1: twenty five year period where stocks haven't beaten out the things.
Speaker 1: So we have to make sure people are aware of
Speaker 1: those sorts of things. The other actual real assumption I
Speaker 1: think that we have to think about is what's the
Speaker 1: long term return for you know, the traditional sixty forty blend.
Speaker 1: It's not gonna be in the next ten years most likely,
Speaker 1: Tom what has been in the last fifty kind of
Speaker 1: nearly ten percent. It's going to be much lower. And
Speaker 1: that's the reality of the These long term s allocation
Speaker 1: programs are gonna have to pay in Bob doing those,
Speaker 1: I'm just setting them up for the second question. I mean,
Speaker 1: that's the act here, folks, bobbed all. The question is
Speaker 1: if that's the reality of a lower actual assumption, do
Speaker 1: you go more diversified or less diversified or maybe more general,
Speaker 1: how do you diversify? Yeah, so you have to have diversification,
Speaker 1: but it's not just stocks and bonds. Uh, they're alternative assets,
Speaker 1: um that have to be considered in portfolios. Uh, louvine
Speaker 1: T I a big investor in farmland, for example, and
Speaker 1: that that's an area people don't even think about generally.
Speaker 1: But there's an area for diversification within the public markets,
Speaker 1: within US equities where I've spent my career. You've got
Speaker 1: investing companies that are gonna make it happen, and so
Speaker 1: you might want a more targeted portfolio in an environment
Speaker 1: where the gains overall the market is not going to
Speaker 1: lift every boat, is what I'm trying. There's some really
Speaker 1: important observations there, folks, against the canon of the last
Speaker 1: twenty years and how things are changing. Robert doll is
Speaker 1: always thank you. He is with now Vene. He is
Speaker 1: the double degree to engineer out of ann Arbor. Garland Gilchrist.
Speaker 1: He is Lieutenant Governor of the state of Michigan, and
Speaker 1: he is vice chair of the Democratic National Committee. You
Speaker 1: know the math. You know it better than anybody in
Speaker 1: the party. Garland. You've got to get out the vote.
Speaker 1: How are you going to get the kids out? And
Speaker 1: how are you going to get blacks out from sea
Speaker 1: to shining Sea. Well, thank you for having me today.
Speaker 1: And this is exactly the question that Democrats are looking
Speaker 1: to answer in Michigan around the country. To put it
Speaker 1: in perspective, Donald Trump won Michigan by ten thousand, seven
Speaker 1: four votes. But Gretchen Whitmer, our governor who you heard
Speaker 1: from last night from a U a W. Union hall,
Speaker 1: from a manufacturing facility. Her and I won Michigan by
Speaker 1: four hundred thousand votes or points. And we did that
Speaker 1: by simply showing up and making sure that every voter
Speaker 1: heard from us in every part of the state. And
Speaker 1: when you talk about black voters in particular, you know,
Speaker 1: Joe Biden Kamala Harris are running on the most progressive
Speaker 1: agenda for opportunity and racial equity that any president's ever
Speaker 1: run on. And we can tell that story, as you said,
Speaker 1: from she Seed to see. Well, you can do it
Speaker 1: from c to Shining Sea. But let's go west to Kalamazoo, Michigan,
Speaker 1: where they used to build checker cabs. Okay, it's a
Speaker 1: different Kalamazoo than it was. Now, how do the Democrats
Speaker 1: win in Kalamazoo if they're gonna go progressive liberal? How
Speaker 1: much do you have to shift to the center to
Speaker 1: take Flint and to take Kalamazoo. You gotta stay with
Speaker 1: you gotta never shipped, you stay with your values. And
Speaker 1: even in Kalamazoo, we just saw this week, Uh, the
Speaker 1: far right, neo Nazi Proud Boys were demonstrating on the
Speaker 1: streets to Kalamazoo and they were met with resistance from
Speaker 1: people who were stepping up and calling for racial justice
Speaker 1: and racial equity. They were stepping up for an agenda
Speaker 1: like Joe Biden and Kamala Harris and saying no to
Speaker 1: the rhetoric and the division and the danger and destruction
Speaker 1: and depth of Donald Trump. And so I think in Kalamazoo,
Speaker 1: in Grand Rapids, in Macomb County, all places where Gregion
Speaker 1: I one eighteen we laid out the blueprint, and I'm
Speaker 1: proud that Joe Biden Kamala Harris are ready to pick
Speaker 1: up where we left off and take it to the
Speaker 1: next level. Lieutenant Governor, good morning from London. If if
Speaker 1: we don't have a new stimulus package, who will your
Speaker 1: voters blame? The Republicans are the Democrats? I think that
Speaker 1: Michigan voters have been clear for this entire crisis that
Speaker 1: Donald Trump is not only a failure, but his failure,
Speaker 1: his lack of a national strategy has led to dead
Speaker 1: Michiganers that did not have to die. And this is
Speaker 1: personal for me. Twenty three people in my life have
Speaker 1: died from COVID nineteen uh. They all have stories like
Speaker 1: the people whose stories we heard about last night. They
Speaker 1: will hold this president accountable. And you heard Governor Woman
Speaker 1: talk about responsibility. Leaders take responsibility, they don't run from it.
Speaker 1: And that's exactly what Donald Trump has been doing. And
Speaker 1: he's denied, he's lied, he shirked, he shrunk away, he's
Speaker 1: hid from the problem rather than stepping up and solving them.
Speaker 1: But I'm not worried about that. With Joe Biden and
Speaker 1: Kamala Harris and Joe Biden has showed up for the
Speaker 1: people of Michigan, for the people of Detroit time and
Speaker 1: time again over the years. I think it's what he's
Speaker 1: going to continue to do here. But if that's the
Speaker 1: case and people think that's then it wouldn't be at
Speaker 1: all a contested election. Do you worry that people say
Speaker 1: that they'll vote for Joe Biden and actually vote for
Speaker 1: for you know, Trump. Do you worry that the polls
Speaker 1: aren't really reflective of what people will do come November.
Speaker 1: I think that we always have to consider this to
Speaker 1: be a close election because it was so close in seen.
Speaker 1: We have to work hard, and as I indicated before,
Speaker 1: we have to talk to every voter, and the Michigan
Speaker 1: Democratic Party and the Democratic Party across the country never
Speaker 1: stopped talking to voters after twenty sixteen because we knew
Speaker 1: we had a lot of work to do. And you're
Speaker 1: going to see the evidence of that. In Michigan, We've
Speaker 1: been able to connect with people because we knocked on
Speaker 1: their doors in twenty nineteen, so when we had to
Speaker 1: stop knocking doors in we could keep calling them and
Speaker 1: keep text message him. Our movement is strong, and I
Speaker 1: believe it's going to deliver Michigan and across the country,
Speaker 1: and we have to run through the finish line. So no,
Speaker 1: we're not going to rest on any laurels or any polls.
Speaker 1: We're gonna continue to work all the way through November
Speaker 1: so that we have the privilege of working and leading
Speaker 1: on behalf of all the American people in January. Was
Speaker 1: that the difference the last time around. You have mentioned
Speaker 1: twice in this conversation, Lieutenant Governor, the idea of showing
Speaker 1: up in campaigning is a stark reality that Secretary Clinton
Speaker 1: did not campaign to the greatest advantage four years ago. Well,
Speaker 1: I think that we need to focus on is how
Speaker 1: we can connect with that local community intelligence rather relitigating.
Speaker 1: What I think we need to focus on is the
Speaker 1: fact that we learned a lot in ten here in Michigan.
Speaker 1: For example, Governor women visited all eighty three counties of
Speaker 1: our state when I came onto the ticket as her
Speaker 1: running mate. I visited forty counties myself. It's about showing
Speaker 1: up and about being president. And you saw with the
Speaker 1: virtual convention we have to get creative about how to
Speaker 1: do that safely in COVID nineteen and I think what
Speaker 1: you saw is how that creativity can lead to real
Speaker 1: human connection, to elevate the stories of people and of
Speaker 1: voters and of Americans. And that's what we have to
Speaker 1: focus on here. We have some really creative tactics. Were
Speaker 1: excited to roll out to engage voters of all stripes,
Speaker 1: to make sure black people maximized turn out, to make
Speaker 1: sure the suburbs turn out, to make sure our Latino
Speaker 1: brothers and sisters turn out. And I'm excited um that
Speaker 1: we're gonna have record breaking turnout this year. And when
Speaker 1: more people vote in Michigan, Democrats win and we are
Speaker 1: not afraid of that. We want everyone to vote safely
Speaker 1: and got by mail. We look forward to further updates,
Speaker 1: Lieutenant Governor. Thank you so much. Mr gil Christ, of
Speaker 1: course from Michigan, is a vice chair of the Democratic
Speaker 1: National Committee. Karla Freeman with us right now of JOHNS Hopkins,
Speaker 1: the executive director of Foreign Policy Institute UH and a
Speaker 1: professor of Chinese studies is well, Carla, what I find
Speaker 1: interesting about what Inbassador Bolton said there. It's not China
Speaker 1: US or Russia US, but the thing we never talked about,
Speaker 1: which is the relationship of China and Russia. You know
Speaker 1: in our childhoods that was a huge deal. Is the
Speaker 1: relationship with Russia and China is fractious as it was then,
Speaker 1: it's certainly become a much closer relationship in recent years.
Speaker 1: Of course, we we remember fears of the China Russia partnership.
Speaker 1: Their alliance of China's first alliance UH forged on Valentine's
Speaker 1: Day in nineteen fifty UH and that lasted until the
Speaker 1: late nineteen sixties and was a major feature of the
Speaker 1: Cold War. After the split, of course, that helped create
Speaker 1: an opening for the U. S and China relationship to develop.
Speaker 1: But in recent years China and Russia have become closer,
Speaker 1: even working out diverging tensions in Central Asia, which is
Speaker 1: the country of the region which both countries have subucbstantial
Speaker 1: energy and other strategic inter US. Then Dr Freeman, we
Speaker 1: talked to Dr Roach of Viale University about this Stephen
Speaker 1: Roach earlier this morning, let me ask you the same question.
Speaker 1: Is the final result of Washington policy, of Trump policy
Speaker 1: or Biden policy, will they be all that much difference
Speaker 1: in regards to China. That's a really compelling question. And
Speaker 1: I think that what will happen in Biden administration is
Speaker 1: that many of the concerns that the Trump administration has
Speaker 1: raised will carry through to the Biden administration. But I
Speaker 1: do think that the Biden administration will look for grounds
Speaker 1: to cooperate where uh it can with China so that
Speaker 1: we have uh continue to have competition, concerns about technology
Speaker 1: fast and uh other other worries about China's authoritarian push
Speaker 1: around the world. But we will try to find areas
Speaker 1: where we can work together. There are so many global
Speaker 1: issues that require us China cooperate. But Carla, you're saying
Speaker 1: is that the Democrats won't necessarily more be more sympathetic
Speaker 1: to China, but that will they'll just do it in
Speaker 1: a different form or do you think that there they
Speaker 1: will find actually coming ground on things significant like trade. Yes,
Speaker 1: I do think that will the The Democrats come from
Speaker 1: a tradition that recognizes that globalization, appreciates globalization as a
Speaker 1: source for economic growth, and I think that the democratic
Speaker 1: administration will look for a way to restore an architecture
Speaker 1: for international trade, also look for ways to deal with
Speaker 1: issues that are important to a democratic administration, like climate change.
Speaker 1: Of course, one of the first actions that the Trump
Speaker 1: administration took was to withdraw the US from the Paris
Speaker 1: Climate Accord. So there are areas where the U. S
Speaker 1: And China have a work to productively. Have seen their
Speaker 1: their engagement together, if you use that word, has yielded
Speaker 1: significant benefits economically and and also in terms of managing
Speaker 1: global threats to human security. Carla, what can you tell
Speaker 1: us about Chinese vaccine? So there's a global race. Russian
Speaker 1: say they have a vaccine against COVID nineteen. Where are
Speaker 1: we on China? Will the Chinese even use the Russian vaccine?
Speaker 1: I am not not sure about whether China would use
Speaker 1: the Russian vaccine. There are a lot of questions about
Speaker 1: whether that vaccine has gone through adequate testing. China's on
Speaker 1: in a big push to develop a vaccine and is
Speaker 1: in I think third base testing of that vaccine, and
Speaker 1: it will uh. It's already setting up plans to distribute
Speaker 1: the vaccine, it sell it widely around the world. There
Speaker 1: are a number of companies in China with with with
Speaker 1: hopeful signs of being able to launch a vaccine fairly
Speaker 1: fairly soon. Thank you so much to Carla Freeman there
Speaker 1: of Johns Hopkins, and be sure to check out vr
Speaker 1: US go on the Bloomberg for the latest information, and
Speaker 1: tune in every day for exclusive conversations with John's Happy
Speaker 1: Experts for an inside look at battling COVID nineteen. Thanks
Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen
Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform
Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.
Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio.