WEBVTT - Surveillance: Stimulus Not Debatable, Hochul Says 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.560 Bloomberg dot Com, and of course on the Bloomberg Right 0:00:27.640 --> 0:00:30.800 now an update, but it can be an update about 0:00:30.800 --> 0:00:34.240 Washington as well. From Buffalo and from Albany and from 0:00:34.240 --> 0:00:37.680 New York City, Kathy Hock joins the Lieutenant Governor of 0:00:37.720 --> 0:00:40.440 the Empire State. Kathy, I want to go right to 0:00:40.479 --> 0:00:45.320 the stimulus and the great contention that aid is necessary 0:00:45.440 --> 0:00:49.720 for states, cities, and towns, and there's a debate about this. 0:00:50.240 --> 0:00:53.640 The only thing that's going to catalyze that are furloughs 0:00:53.640 --> 0:00:57.200 in layoffs. How close are you and Governor Cuomo to 0:00:57.400 --> 0:01:01.880 furloughs and layoffs? Well, first, thanks for having me on 0:01:01.920 --> 0:01:04.280 the show, but let me first address even why there's 0:01:04.319 --> 0:01:06.840 even debate as to whether that we need stimulus. I 0:01:06.880 --> 0:01:10.680 don't understand how anyone would conclude that we cannot survive 0:01:10.800 --> 0:01:15.000 without a stimulus package. Here's why we never anticipated having 0:01:15.040 --> 0:01:17.560 to deal with the global pandemic when our budget was 0:01:17.600 --> 0:01:20.160 put together. Not New York, not any other state in 0:01:20.160 --> 0:01:24.039 the nation. We have incurred extraordinary expenses. We've had a 0:01:24.160 --> 0:01:27.360 huge hit to our sales tax revenues. Income taxes are 0:01:27.360 --> 0:01:30.160 going to be plumbering. So all of our traditional revenue 0:01:30.200 --> 0:01:32.560 sources are not there for us in the way that 0:01:32.800 --> 0:01:35.199 we have projected them to be. So we will need 0:01:35.200 --> 0:01:39.160 this stimulus plan. It's not debatable. New York State cannot 0:01:39.160 --> 0:01:41.800 be left on its own. This is a national crisis, 0:01:41.840 --> 0:01:45.119 a federal disaster, and if we had real leadership out 0:01:45.120 --> 0:01:48.960 of Washington, they would understand that. Fortunately, the Democrats in 0:01:49.000 --> 0:01:52.600 the House understand it, Chuck where understand that, but we're 0:01:52.640 --> 0:01:54.480 not getting the support we need and they were going 0:01:54.520 --> 0:01:57.120 to suffer. We should state to our global audience at 0:01:57.120 --> 0:02:00.560 the persuasion of the lieutenant governors towards the Bocracy and 0:02:00.680 --> 0:02:04.280 Mr Biden and the Democratic Party, can you wait out 0:02:04.520 --> 0:02:08.359 to an inauguration? Can you wait out to a President Biden? 0:02:08.760 --> 0:02:13.680 Can you get that far without furloughs and layoffs. I 0:02:13.720 --> 0:02:15.880 don't have a projection on that at this point. We 0:02:15.919 --> 0:02:18.200 have been going, you know, day to day, trying to 0:02:18.400 --> 0:02:20.720 back Back in May, we had a plan passed by 0:02:20.720 --> 0:02:23.440 the House that we thought could really address our needs. 0:02:23.480 --> 0:02:27.959 We're asking for five billion dollars for states and local governments. 0:02:28.040 --> 0:02:30.640 And that's not just the fund government operations. We're talking 0:02:30.639 --> 0:02:35.000 about funding the health care workers, funding teachers, funding first responders, 0:02:35.040 --> 0:02:39.520 funding critical programs, infrastructure. So this is these are all 0:02:39.600 --> 0:02:43.560 the functions of government that have been direly affected because 0:02:43.600 --> 0:02:45.840 of the loss of money coming in that we had 0:02:45.880 --> 0:02:48.280 expected to be there this year. So we need this help. 0:02:48.480 --> 0:02:50.880 Can we wait till Biden President? I don't know that 0:02:50.880 --> 0:02:53.920 we'll have much choice, but hope springs eternal. I know 0:02:53.960 --> 0:03:01.120 there's conversations uh with Secretary Treasumunution Lead Speaker Alsie, and 0:03:01.200 --> 0:03:03.480 we hope that common sensal reign and they'll say, you 0:03:03.480 --> 0:03:06.360 know what, we cannot leave these states to starve and 0:03:06.360 --> 0:03:09.880 if not good for them politically, either lieutenant governor more locally. 0:03:10.280 --> 0:03:12.920 There's been a lot written about the power struggle between 0:03:13.000 --> 0:03:16.239 Governor Cuomo and Mayor du Blasio of New York City. 0:03:16.680 --> 0:03:19.240 Does Governor Cuomo see di Blasio as part of the 0:03:19.280 --> 0:03:22.720 problem or part of the solution at this point? Well, 0:03:22.800 --> 0:03:25.640 you'd have to ask Governor Cuomo how we've used that relationships. 0:03:25.880 --> 0:03:28.799 But I do know that we work with our local partners. 0:03:28.840 --> 0:03:31.480 There's a lot of collaboration that goes on behind the 0:03:31.560 --> 0:03:34.560 scenes that does not make the headlines. And uh, you know, 0:03:34.600 --> 0:03:37.520 we need each other in this and but also you know, 0:03:37.640 --> 0:03:40.040 just the recognition that it is the state that has 0:03:40.120 --> 0:03:43.200 the ultimate decision as to whether or not, you know, 0:03:43.280 --> 0:03:46.000 when and how you shut down during a pandemic, and 0:03:46.160 --> 0:03:48.560 the same thing with when we reopen. And you know, 0:03:48.640 --> 0:03:51.120 lately it's been referred to, you know, the hotspots and 0:03:51.160 --> 0:03:54.200 how the governor had to step in to fill the 0:03:54.280 --> 0:03:57.920 void because we're seeing areas of the state and specific 0:03:57.920 --> 0:04:01.760 neighborhoods where the infection rate went up to five six seven. 0:04:02.640 --> 0:04:05.240 That's not acceptable. The rest of the state today is 0:04:05.280 --> 0:04:08.840 at one percent, and we cannot risk our recovery and 0:04:08.880 --> 0:04:13.080 getting our economy back on all cylinders by having hotspots 0:04:13.240 --> 0:04:16.240 because the issues weren't addressed early enough and in a 0:04:16.360 --> 0:04:18.400 in a smart way, so the state has had to 0:04:18.440 --> 0:04:21.359 step in. Kathy, there's also a question about quality of 0:04:21.400 --> 0:04:25.039 life concerns. There's a question about trash collection given some 0:04:25.080 --> 0:04:27.159 of the budget cuts, and there's very much a question 0:04:27.240 --> 0:04:30.760 about making sure that the uptick in crime does not continue. 0:04:30.800 --> 0:04:33.720 As an anecdote, there were helicopters over my building last night. 0:04:34.120 --> 0:04:36.520 In general, it's not dangerous, but there was a shooting 0:04:36.839 --> 0:04:38.800 more than ten blocks away. What are you guys doing 0:04:38.880 --> 0:04:42.839 on that front now? And certainly that's all very unsettling 0:04:42.920 --> 0:04:45.680 for the New Yorkers who stayed in The vast majority 0:04:45.880 --> 0:04:48.440 did stay and they're weathering this out, and they also 0:04:48.520 --> 0:04:50.360 know we've been through a lot before and we will 0:04:50.400 --> 0:04:52.760 get through this. But in the day to day life 0:04:53.160 --> 0:04:55.960 for people like yourselves and others, it's tough. But I 0:04:56.000 --> 0:04:58.600 get back to Washington here. You want more money for 0:04:58.839 --> 0:05:02.080 law enforcement, you want money for trash pick up. You 0:05:02.160 --> 0:05:06.279 cannot starve the cities in the while expecting those services 0:05:06.320 --> 0:05:08.680 to continue. The City of New York will have less 0:05:08.720 --> 0:05:11.800 money to work with to fund those essential services than 0:05:11.839 --> 0:05:14.680 they have predicted, and that money has to be replenished 0:05:14.680 --> 0:05:18.920 by the federal government. Do you see, Cathy, a change 0:05:19.279 --> 0:05:25.520 towards a more ecumenical, are more compromising two parties over 0:05:25.520 --> 0:05:29.240 the next number of years or is there a permanence 0:05:29.279 --> 0:05:33.839 to these rigidities between Washington and the Democrat Party states 0:05:34.040 --> 0:05:37.159 With President Trump? Is there a permanence to that theme 0:05:37.680 --> 0:05:41.880 or do you revert back to something more collegial it 0:05:42.000 --> 0:05:44.160 reverts back. And I'll tell you why. I have been 0:05:44.200 --> 0:05:46.880 a student of history. I'm old enough to have watched 0:05:47.200 --> 0:05:49.880 the Watergate hearing that a kid, you know, watched a 0:05:50.000 --> 0:05:52.120 gavel to gavel. I knew all the players like they're 0:05:52.160 --> 0:05:55.200 part of my family. So I thought that our democracy 0:05:55.360 --> 0:05:58.240 was imperiled back when I was just a teenager. And 0:05:58.360 --> 0:06:00.640 I have seen the resiliency of this country. I have 0:06:00.720 --> 0:06:03.400 seen that, yes, we can go to extremes. There were 0:06:03.760 --> 0:06:05.960 nineteen six eight was a very tough year in our 0:06:06.080 --> 0:06:08.560 nation and people, you know, cities were burnings. Remember being 0:06:08.560 --> 0:06:10.960 a little kid going to visit Washington and seeing it 0:06:11.120 --> 0:06:14.640 burning and the protests and what people was, what was happening, 0:06:14.760 --> 0:06:17.760 you know, the division over the Vietnam War that divided 0:06:17.839 --> 0:06:21.560 family against family. But we always swing back, the pendulum 0:06:21.680 --> 0:06:25.599 swings back toward normalcy in the middle. And right now 0:06:25.640 --> 0:06:29.200 we have a cult of personality around one individual. I 0:06:29.240 --> 0:06:31.560 don't think that would have been the case if someone, 0:06:31.920 --> 0:06:33.920 you know, let's say, Admit Romney or someone had been 0:06:33.920 --> 0:06:36.520 elected instead of Donald Trumpets. So I think this is 0:06:36.880 --> 0:06:40.400 all related to an individual who has promoted himself to 0:06:41.000 --> 0:06:44.400 attract individuals who are extremists. That is going to go 0:06:44.480 --> 0:06:47.120 back into the bottle and back underground where it belongs 0:06:47.560 --> 0:06:50.480 when we have Joe Biden as president. But also he 0:06:50.560 --> 0:06:54.200 understands we have to have relationships with Republicans and that's 0:06:54.200 --> 0:06:56.680 how the two party system will continue to thrive in 0:06:56.720 --> 0:07:01.240 our country. Still got an election to God, that election underway, 0:07:01.320 --> 0:07:03.360 that result a little more than two weeks away. Kathy, 0:07:03.560 --> 0:07:06.120 thanks for coming on the program, Kathy how New York 0:07:06.160 --> 0:07:12.680 Lieutenant governor. Thank you very much. John. We've got to 0:07:12.720 --> 0:07:14.960 go on to more important things here because with James 0:07:15.000 --> 0:07:18.760 Anthy of Everdeen Standard, we can dive into the investment 0:07:18.840 --> 0:07:22.400 space and talk a lot about it. But right now, 0:07:22.440 --> 0:07:26.360 I mean Prime Minister Johnson, pandemic, Prime Minister Johnson Brexit. 0:07:26.560 --> 0:07:29.960 Of course, we're looking at the race here and I'm sorry, James. 0:07:30.160 --> 0:07:32.480 All eyes are on Sunday. I mean John and I 0:07:32.480 --> 0:07:34.840 have been going back and forth on this and all 0:07:34.880 --> 0:07:38.080 eyes on Sunday is for the Todds. Gareth Bale is 0:07:38.080 --> 0:07:42.600 gonna come back. What's it gonna mean for Tottenham? I 0:07:42.640 --> 0:07:44.640 think we've just put together the best front three and 0:07:44.680 --> 0:07:47.480 world football, so I'm pretty excited. As his first fan 0:07:47.600 --> 0:07:52.040 myself I'm looking forward to gold s galore. I mean, John, 0:07:52.040 --> 0:07:55.800 are your eyes all on Sunday? My eyes are on Saturday, 0:07:56.080 --> 0:07:59.480 As he sighed, Darthy, Liverpool Everton just gonna be fiery. 0:07:59.720 --> 0:08:02.000 We got that shut down too. This is a big 0:08:02.000 --> 0:08:03.560 we done that. Can we move on? Yeah? I mean, 0:08:03.560 --> 0:08:05.760 I don't know what I'm talking about, but James is right, 0:08:05.880 --> 0:08:08.000 this is a huge deal for the two minutes ago. 0:08:08.080 --> 0:08:13.480 I get this shows guys coming from space or whatever 0:08:13.640 --> 0:08:17.440 the pharaoh's golf stream up to England to help the chart. 0:08:17.520 --> 0:08:20.400 So they'll do that on Sunday. Okay, under the markets 0:08:20.480 --> 0:08:23.600 right now, James, ain't you with us? With everything? Stander? James, 0:08:23.720 --> 0:08:27.200 things have changed. How do you structure? How do you 0:08:27.280 --> 0:08:34.160 have a strategic investment plan for Q one two thousand one? Yeah? 0:08:34.200 --> 0:08:36.920 With great difficulty, because you've got obviously a huge, well known, 0:08:36.920 --> 0:08:39.840 well advertised risk event where I think there are genuinely 0:08:39.840 --> 0:08:45.800 probably three possible outcomes which have relatively high likelihood each 0:08:45.880 --> 0:08:49.840 of them. Um and probably the world looks looks somewhat, 0:08:49.880 --> 0:08:52.760 if not vastly different further down the line depending on 0:08:52.920 --> 0:08:55.280 the outcome. Then obviously I'm talking about US election. I 0:08:55.280 --> 0:08:57.280 think it's very difficult to see the House switching back 0:08:57.280 --> 0:09:00.120 to the Republicans, so you're talking about Biden verse is 0:09:00.120 --> 0:09:02.880 Trump and then does the Senate switch to the Democrats? 0:09:02.880 --> 0:09:06.200 And you know, if it's a split Congress, I don't 0:09:06.240 --> 0:09:08.960 think that's great for for risk you know, whoever's in 0:09:09.000 --> 0:09:11.520 the White House. But if if, if, if there is 0:09:11.559 --> 0:09:13.360 a blue wave of blue sweet, whatever you want to 0:09:13.360 --> 0:09:15.960 call it, I think the market wants to run with 0:09:16.040 --> 0:09:19.600 that as being gross inflation, reflation bad for treasuries. And 0:09:19.600 --> 0:09:22.640 that's a very different world to something where risk assets 0:09:22.760 --> 0:09:24.559 have to price that out, have a bit of a 0:09:24.600 --> 0:09:28.000 wobble and treasuries rally. So truly looking through that event, 0:09:28.679 --> 0:09:32.000 it's very difficult. We're in such a such a difficult 0:09:32.080 --> 0:09:35.800 strategic macro environment anyway, in my opinion, there is you know, 0:09:35.920 --> 0:09:39.000 we've seen huge, huge holes blown in global economies and 0:09:39.040 --> 0:09:41.720 now we're trying to patch them up, and and real 0:09:41.760 --> 0:09:45.559 time data is is not a huge use in guiding 0:09:45.600 --> 0:09:47.520 you as to what the medium term trajectory is. So 0:09:47.840 --> 0:09:51.160 huge uncertainty, very difficult, James, I just don't know how 0:09:51.160 --> 0:09:53.480 you invest around this. Going into year end, you've gone 0:09:53.480 --> 0:09:56.080 through all the different outcomes we could get from the election. 0:09:56.720 --> 0:09:59.560 The difference between a blue wave and a divided government 0:09:59.559 --> 0:10:02.120 could be too trillion dollars in stimulus. How do you 0:10:02.160 --> 0:10:05.480 invest around that? James, Yeah, it's difficult. I mean two 0:10:05.480 --> 0:10:08.040 trillion dollars in stimulus today as we sit here, it 0:10:08.080 --> 0:10:10.400 feels kind of like a small number. That's how crazy 0:10:10.480 --> 0:10:13.839 things have got. As I say it is, It is 0:10:13.880 --> 0:10:17.440 difficult because you have bimodal sort of scenario. You have 0:10:17.520 --> 0:10:21.920 two very different outcomes and a reasonably close probability between 0:10:21.960 --> 0:10:24.640 the two. So I think we're going to be running 0:10:24.640 --> 0:10:27.199 a lot less risk into that risk event. Then we're 0:10:27.280 --> 0:10:29.800 running at the moment for exactly that reason. I don't 0:10:30.160 --> 0:10:32.239 you know, if I were to game in our probability 0:10:32.320 --> 0:10:35.200 adjust the outcomes, you get something that looks quite neutral, 0:10:35.240 --> 0:10:37.360 because there's a reasonable chance of something going up on 0:10:37.360 --> 0:10:39.559 a reasonable chance of they're going down. I do think 0:10:39.559 --> 0:10:41.480 there are still a few places that you can feel 0:10:41.600 --> 0:10:45.360 somewhat comfortable having a position. But I don't think, you know, 0:10:45.360 --> 0:10:48.560 the FEDS policy is going to be changed in any way, 0:10:48.559 --> 0:10:51.120 shape or formed by the outcome, And so if you 0:10:51.120 --> 0:10:54.320 want to hunker down in five year treasuries, maybe even 0:10:54.320 --> 0:10:55.880 a little bit further out. I don't think you're going 0:10:55.920 --> 0:10:59.040 to see a huge amount of volatility there um. But 0:10:59.240 --> 0:11:01.120 but you know, other than that, it's difficult to have 0:11:01.160 --> 0:11:03.720 a strategic view as we sit here, and I think 0:11:03.760 --> 0:11:05.360 there's technical things like I kind of want to talk 0:11:05.360 --> 0:11:07.200 about stuff, some of the technical stuff that was going on, 0:11:07.240 --> 0:11:09.319 I don't. You know, we don't use options heavily, and 0:11:09.360 --> 0:11:12.040 I'm not a massive sort of options expert or what 0:11:12.080 --> 0:11:14.160 have you, but we've still got this massive situation where 0:11:14.200 --> 0:11:16.559 huge option buying is going on in ecuty markets, in 0:11:16.800 --> 0:11:19.440 the market general and single name tech tech stocks, and 0:11:19.480 --> 0:11:22.240 we have option expiry today, and therefore the gamma that 0:11:22.280 --> 0:11:24.719 you get from from those options getting closer to out 0:11:24.720 --> 0:11:26.520 the money and then further away from out the money. 0:11:26.720 --> 0:11:28.200 You know, these are the things I think which are 0:11:28.120 --> 0:11:31.640 actually driving markets a lot more than the macro environment 0:11:31.640 --> 0:11:34.280 on a day to day basis. And that's something that 0:11:34.320 --> 0:11:37.440 can be both an opportunity and a huge risk. So James, 0:11:37.440 --> 0:11:40.160 can you quantify how much you've wrote down risk, how 0:11:40.200 --> 0:11:42.280 much you've gone into five Your treasury is to hunker 0:11:42.320 --> 0:11:46.359 down and prepared to be liquid and nimble when things change. 0:11:47.080 --> 0:11:50.040 I mean, that's a process that's not something that we're 0:11:50.040 --> 0:11:51.840 you know that we've done a huge amount of at 0:11:51.920 --> 0:11:55.679 this stage because we're still reasonably far from the election. 0:11:55.720 --> 0:11:58.160 And to be honest, you know where if you look 0:11:58.160 --> 0:12:00.000 at polling experts, if I were to just pick five 0:12:00.080 --> 0:12:03.320 thirty eight and say that's somewhat symptomatic of broadly speaking 0:12:03.320 --> 0:12:06.240 the polling experts for you, you know that that's suggesting 0:12:06.280 --> 0:12:09.320 Biden has roughly a chance of winning the White House 0:12:09.360 --> 0:12:13.319 and maybe the Senate has a chance of switching over 0:12:13.360 --> 0:12:16.480 to the Democrats. Obviously, those two probabilities are closely connected. 0:12:16.520 --> 0:12:18.360 You can't see the chances of the Dems switch in 0:12:18.400 --> 0:12:20.840 the Senate going up without Biden's chances going up. I 0:12:20.840 --> 0:12:22.320 look at eighty five, and I say, in a two 0:12:22.320 --> 0:12:26.960 horse race this far out, with the polling's problems, shall 0:12:27.000 --> 0:12:29.160 we say that we've had in the last two elections 0:12:29.160 --> 0:12:31.280 where actually, you know, Romney was leading at this stage, 0:12:31.280 --> 0:12:33.040 in Clinton was leading at this stage, and neither of 0:12:33.040 --> 0:12:35.679 those one that looks to me like that's overpriced. So 0:12:35.720 --> 0:12:38.040 we're happy to oppose that for now because it looks 0:12:38.080 --> 0:12:41.920 like too much a probability of Biden, and by extension, 0:12:42.200 --> 0:12:45.320 a blue wave has been priced into the market. And 0:12:45.400 --> 0:12:48.640 we expect other investors to de risk going into the election, 0:12:48.679 --> 0:12:51.440 and that's likely to be there for the most heavily 0:12:51.440 --> 0:12:54.360 positioned assets which see some unwind and risk assets definitely 0:12:54.400 --> 0:12:56.560 fits the bill. Big tech definitely fits the bill. So 0:12:56.920 --> 0:13:00.000 you know we're positioned in opposition to that for now, 0:13:00.360 --> 0:13:02.920 and we will look for opportunities to just take the 0:13:03.040 --> 0:13:06.480 overall risk level down quite considerably, to be honest, into 0:13:06.520 --> 0:13:09.960 the risk of vent itself. James Covery is for a second, 0:13:10.000 --> 0:13:12.280 I'm going to talk about the B word. Here's a 0:13:12.320 --> 0:13:15.560 covered Brexit cable turning around one nine un changed on 0:13:15.559 --> 0:13:18.960 the session. The Prime Minister about forty minutes ago basically 0:13:19.040 --> 0:13:21.720 signal think he's ready to walk away from negotiations. And 0:13:21.760 --> 0:13:24.520 guess what an EU official thinks. According to our reporting, 0:13:24.559 --> 0:13:27.640 the EU expecting Brexit talks to continue with the United 0:13:27.679 --> 0:13:31.320 Kingdom next week. Tom, we talked about this, the posturing 0:13:31.360 --> 0:13:33.760 around this story. It's a prime minister trying to put 0:13:33.800 --> 0:13:36.800 some pressure on the EU. I'm not sure the European 0:13:36.920 --> 0:13:41.120 Union feels it right now, and Sterling is capturing that story. Okay, 0:13:41.160 --> 0:13:43.000 it's a game of blood. But John, I remember you 0:13:43.120 --> 0:13:47.679 planted in the chair the first morning after Brexit. What's changed? 0:13:47.760 --> 0:13:51.160 I mean, I don't understand what's changed from that moment 0:13:51.200 --> 0:13:53.640 when you were on our old set over in Finsbury 0:13:53.760 --> 0:13:57.360 Square talking about Brexit versus where we are right now. 0:13:57.360 --> 0:14:00.680 I know what's really changed in the power game between 0:14:00.679 --> 0:14:04.400 these two parties, two prime ministers and not much house. 0:14:04.480 --> 0:14:07.040 That's what's changed before and a half years, James fe 0:14:07.400 --> 0:14:09.840 how on earth do you trade this one? And for 0:14:09.920 --> 0:14:12.880 me around the negotiations, how do you know what is 0:14:12.960 --> 0:14:18.320 real negotiation and what is just posturing? Yeah, really good question, 0:14:18.440 --> 0:14:20.320 really difficult questions. Some of this comes from just the 0:14:20.400 --> 0:14:23.200 nature of negotiating as the EU or with the EU, 0:14:23.360 --> 0:14:26.240 you're talking about twenty odd countries that have to compromise 0:14:26.280 --> 0:14:28.960 with each other just to get to an EU position. 0:14:28.960 --> 0:14:30.800 And then obviously if there's somebody on the other side 0:14:30.800 --> 0:14:34.280 of the table, they've got their own views about what prioritizing, 0:14:34.320 --> 0:14:37.440 what they can sacrifice, and therefore as an incredibly complex negotiation. 0:14:37.840 --> 0:14:39.920 I would just agree broadly with the idea that for 0:14:41.400 --> 0:14:44.080 possibly not as long as as going back to sixteen, 0:14:44.120 --> 0:14:46.400 but certainly for the last twelve months, nothing really has 0:14:46.480 --> 0:14:48.720 changed both sides of talking past each other. This is 0:14:48.720 --> 0:14:52.600 a game of chicken. The politics has changed dramatically in 0:14:52.640 --> 0:14:55.760 the UK such that their view of how to negotiate 0:14:55.800 --> 0:15:00.320 has changed dramatically, and therefore it's a more robust, more 0:15:00.360 --> 0:15:03.840 politically supported, shall we say, hard and negotiating position. No 0:15:03.960 --> 0:15:07.000 deal is better than a bad deal on the EU side, 0:15:07.040 --> 0:15:10.200 I don't think they're quite there, but again, the political 0:15:10.200 --> 0:15:14.840 reality of the negotiations is that doing a deal where 0:15:14.840 --> 0:15:18.240 the compromises necessary in advance of an absolute drop dead 0:15:18.400 --> 0:15:22.600 deadline is an unsatisfactory political outcome because you can't then 0:15:22.640 --> 0:15:25.120 go back to domestic audiences who you might have had 0:15:25.160 --> 0:15:26.960 to sacrifice a little bit to get the deal over 0:15:27.000 --> 0:15:28.840 the line and say you fought as hard as you 0:15:28.880 --> 0:15:30.800 possibly could. So it has to go to the wire. 0:15:30.960 --> 0:15:33.160 You have to dangle people over the edge, make them 0:15:33.200 --> 0:15:35.880 look into the abyss, and that's then and only then 0:15:35.920 --> 0:15:38.920 will you get some sort of compromise that the headlines 0:15:38.920 --> 0:15:41.400 you described today, I mean that tells you all you 0:15:41.440 --> 0:15:43.080 need to know in terms of how you invest. I 0:15:43.080 --> 0:15:44.920 think you can be long guilts because I don't think 0:15:44.960 --> 0:15:47.200 there's a huge sell off in the guilt market if 0:15:47.240 --> 0:15:48.880 there is a deal. I think that you know the 0:15:48.920 --> 0:15:52.400 economic situation the virus situation, the global duration situation more 0:15:52.400 --> 0:15:55.520 broadly is supportive for owning guilts. You know, we're tactically 0:15:55.520 --> 0:15:59.120 short sterling, as we've talked about before. One observation from 0:15:59.160 --> 0:16:01.840 today it's a bit disappointing for me as somebody who 0:16:01.920 --> 0:16:04.960 is short sterling on a tactical basis. The downside to 0:16:05.080 --> 0:16:08.480 cable when that first headline hit was relatively small and 0:16:08.560 --> 0:16:11.720 quickly reversed. But then when you get a positive headline 0:16:11.720 --> 0:16:13.520 on the other side, the market wants to run with that. 0:16:13.600 --> 0:16:17.160 So I still think there is a sentiment um sort 0:16:17.160 --> 0:16:20.560 of asymmetry that the market really isn't prepared to believe 0:16:21.120 --> 0:16:23.600 that the UK will walk away, which means actually short 0:16:23.640 --> 0:16:27.320 sterling increasingly looks like a position that is will only 0:16:27.480 --> 0:16:30.560 really benefit on the outcome if we are December thirty 0:16:30.600 --> 0:16:32.760 one have walked away and there is no deal, So 0:16:32.800 --> 0:16:35.080 that that changes the dynamics a little bit. And that's 0:16:35.080 --> 0:16:38.960 that something I've been observing more recently. But again I 0:16:38.960 --> 0:16:40.880 don't think you can have high conviction. I would make 0:16:40.880 --> 0:16:43.640 it fifty fifty that we either get a deal of 0:16:43.680 --> 0:16:46.360 some sort or all. We don't. I don't know what 0:16:46.400 --> 0:16:49.400 you can have our conviction on at all right now, James, 0:16:49.400 --> 0:16:52.240 great to catch up, Sir James Athley talks about there 0:16:56.000 --> 0:16:58.520 right now. It is the advantage if you were a 0:16:58.600 --> 0:17:01.840 successful a hundred years ago. There was Lever Brothers and 0:17:01.840 --> 0:17:04.280 then Uni Lever and all the rest of that. There 0:17:04.359 --> 0:17:07.919 is a trust of the Lever family and Jeffrey Howard 0:17:08.119 --> 0:17:13.080 at University College London is writing new books thinking about 0:17:13.080 --> 0:17:18.040 our dangerous dialogue are dangerous discourse in politics? Were thrilled 0:17:18.240 --> 0:17:21.280 that Professor Howard could join us. Uh, this morning, You've 0:17:21.280 --> 0:17:25.360 got a new book coming out, Jeffrey Howard on dangerous discussion? 0:17:25.480 --> 0:17:29.200 Is that what we observed last night? Well, I think 0:17:29.240 --> 0:17:31.040 we observed quite a bit of it last night. It 0:17:31.119 --> 0:17:34.040 was a quite striking moment, I think when Savannah Guthrie 0:17:34.119 --> 0:17:37.000 was pressing the President of the United States about whether 0:17:37.040 --> 0:17:41.040 he would disown this extremely fringe conspiracy theory known as 0:17:41.320 --> 0:17:44.680 Q and on one that alleges that top Democrats are 0:17:44.760 --> 0:17:48.720 inco hoots with pedophiles and sex traffickers, and that Donald 0:17:48.760 --> 0:17:51.639 Trump is really a secret agent aiming to save the 0:17:51.640 --> 0:17:55.040 world from these nefarious villains. And of course Trump wouldn't 0:17:55.200 --> 0:17:57.600 disown it. In fact, he claimed that he didn't know 0:17:57.680 --> 0:18:00.439 anything about it before then jumping in and say, oh, 0:18:00.560 --> 0:18:03.280 but there against pedophiles and that's a good thing. Clearly 0:18:03.320 --> 0:18:05.520 he's lying. Clearly he knows quite a bit about it. 0:18:05.560 --> 0:18:08.040 Doesn't mean I mean, Professor Howard. What's important here is 0:18:08.080 --> 0:18:10.640 Lisa Bramwints and John Farroll get the love notes. I've 0:18:10.680 --> 0:18:13.200 gotten the hate mail, and I've already gotten hate mail 0:18:13.280 --> 0:18:19.720 this morning from Trump supporters who separate his discourse from 0:18:19.880 --> 0:18:23.400 policy and from what they believe are the attributes they 0:18:23.440 --> 0:18:26.879 can vote for. Is that appropriate? Is that going to 0:18:26.960 --> 0:18:31.960 be something new to American politics? Look, we're going to 0:18:32.000 --> 0:18:34.919 the polls. It's always a lesser evil justification, right, and 0:18:34.960 --> 0:18:38.919 we never have candidates that line perfectly with our deepest values. 0:18:38.960 --> 0:18:41.800 And of course, sometimes it would be appropriate to support 0:18:41.840 --> 0:18:44.959 someone even though you disagreed with their language or their rhetoric, 0:18:45.040 --> 0:18:47.679 if you thought they were good in terms of the 0:18:47.720 --> 0:18:51.479 content they delivered for the country. The problem with the president, however, 0:18:51.520 --> 0:18:54.840 is that his language actually does have consequences. It has 0:18:54.880 --> 0:18:57.800 implications for the kind of country we're living in, for 0:18:57.960 --> 0:19:01.879 the coarseness of public dialogue, and as we get closer 0:19:01.880 --> 0:19:04.639 to the election, I think it's very reasonable to worry 0:19:04.680 --> 0:19:08.119 about the ways in which his unhinged rhetoric might, in 0:19:08.200 --> 0:19:11.720 some occasions leads to violence. In the town hall last night, 0:19:11.720 --> 0:19:15.000 he again mentioned Governor Gretchen Whitmer of Michigan by name, 0:19:15.200 --> 0:19:20.440 despite the attack, the plot by militia terrorists to Kidnapperr 0:19:20.480 --> 0:19:22.919 only recently. And I think we need to be extremely 0:19:22.960 --> 0:19:25.520 alarmed about that. And people who say, don't worry about 0:19:25.520 --> 0:19:27.439 the language, it doesn't make a difference, you need to 0:19:27.440 --> 0:19:31.160 realize that sometimes it does make a difference. Professor. Let's 0:19:31.160 --> 0:19:33.639 talk about the polls right now where the president is 0:19:33.680 --> 0:19:38.400 really struggling several demographics, including an older demographic, particularly in Florida, 0:19:38.440 --> 0:19:40.800 which is a huge change from four years ago, at 0:19:40.800 --> 0:19:44.280 suburban females as well. How can you make inroads into 0:19:44.280 --> 0:19:49.040 those demographics with a little more than two weeks to go. Well, 0:19:49.080 --> 0:19:51.639 there's not a lot of time, and Trump is spending 0:19:51.680 --> 0:19:56.520 time in places that he traditionally or Republican candidates traditionally 0:19:56.680 --> 0:19:59.680 wouldn't have to be spending time in places like Georgia. 0:20:00.040 --> 0:20:02.359 So I think it's I'd be extremely alarmed if I 0:20:02.400 --> 0:20:05.800 was inside the Trump campaign right now. Um. Now, it's 0:20:06.000 --> 0:20:08.199 easy to look at the national polls and say that 0:20:08.480 --> 0:20:10.320 Biden's got it in the bag. But of course we 0:20:10.359 --> 0:20:12.919 need to remember that in the swing states it's still 0:20:13.040 --> 0:20:15.879 pretty closed and anything could happen. So that's why I 0:20:15.960 --> 0:20:19.600 think Biden is being very true to spend time in 0:20:19.640 --> 0:20:23.920 places like Pennsylvania making sure that he's making those conversations 0:20:23.920 --> 0:20:27.200 and contacts with the kind of suburban women voters that 0:20:27.240 --> 0:20:29.240 Trump has been a lot to turn off in the 0:20:29.320 --> 0:20:32.080 last few years, and certainly they showed up in droves 0:20:32.080 --> 0:20:35.159 at the polls during the mid terms to repudiate Trump, 0:20:35.280 --> 0:20:38.119 and it seems overwhelmingly likely that that will happen again. 0:20:38.280 --> 0:20:41.600 Just the other night, Trump directly appealed to suburban women, 0:20:41.720 --> 0:20:43.879 saying that it's really important that they like him, but 0:20:43.920 --> 0:20:47.240 he didn't proceed to give any compelling argument about why 0:20:47.480 --> 0:20:50.320 they could support a Trump administration. And that's problem, although 0:20:50.359 --> 0:20:52.760 in fairness, he was doing that a little bit uh 0:20:52.800 --> 0:20:55.639 in a self deprecating way. But Jeffrey, let's look forward 0:20:55.720 --> 0:20:58.520 the idea that perhaps the polls are not vastly wrong 0:20:58.880 --> 0:21:02.040 and Joe Biden does in the election. What happens after that, 0:21:02.119 --> 0:21:05.840 in the months before January, when there is a transition 0:21:05.840 --> 0:21:10.280 of power, how messy, could things get well? I think 0:21:10.320 --> 0:21:12.320