WEBVTT - Surveillance: US Fragmentation with Peterson 0:00:05.120 --> 0:00:08.480 This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 0:00:08.520 --> 0:00:12.360 with Jonathan Farrow and Lisa Abramowitz. Join us each day 0:00:12.400 --> 0:00:16.840 for insight from the best and economics, geopolitics, finance and investment. 0:00:17.280 --> 0:00:22.079 Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 0:00:22.320 --> 0:00:26.600 anywhere you get your podcasts, and always on Bloomberg dot Com, 0:00:26.640 --> 0:00:30.360 the Bloomberg Terminal, and the Bloomberg Business App. I wanted 0:00:30.400 --> 0:00:33.200 to talk about debt right now with Dana Peterson, Chief 0:00:33.240 --> 0:00:38.800 Economists the Conference Board. The Conference Board hugely aware of 0:00:38.840 --> 0:00:41.760 the consumer and the business tone that's out there in 0:00:41.920 --> 0:00:45.199 America along that line, and to take it from the 0:00:45.240 --> 0:00:48.080 academics data, are we over debted right now? Are we 0:00:48.159 --> 0:00:50.280 up to our eyeballs in credit debt? 0:00:51.520 --> 0:00:52.880 Absolutely? Certainly. 0:00:52.880 --> 0:00:56.200 When would look at the consumer credit debt has risen 0:00:56.240 --> 0:01:00.360 to where we were pre pandemic, delinquencies are up. When 0:01:00.360 --> 0:01:03.280 we look at the sovereign debt in the US, it's 0:01:03.360 --> 0:01:07.839 extremely elevated. Interest rates are rising and that's causing debt 0:01:07.880 --> 0:01:10.759 service to rise as well. And we're concerned about both 0:01:10.800 --> 0:01:14.200 the sovereign situation as well as consumers heading into a 0:01:14.240 --> 0:01:17.040 season when they're going to run out of excess savings 0:01:17.360 --> 0:01:20.600 and also maybe laden with student debt loaner payments. 0:01:20.959 --> 0:01:23.200 Well to that exact point, Dana, we've been talking a 0:01:23.200 --> 0:01:26.160 lot about the month of September. I am interested in October, 0:01:26.240 --> 0:01:29.279 when those payments resume after years of being on pause 0:01:29.880 --> 0:01:33.080 due to the pandemic. What economic impact is that likely 0:01:33.160 --> 0:01:35.240 to have, given how this could be a very large 0:01:35.280 --> 0:01:37.040 factor in household budgets. 0:01:38.400 --> 0:01:40.800 Well, it's probably going to take several tenths off of 0:01:40.840 --> 0:01:44.360 GDP growth in October, and it's going to weigh on 0:01:44.400 --> 0:01:48.720 the outlook going forward because certainly, if people were using 0:01:48.720 --> 0:01:51.480 credit cards to finance their debt, and they were also 0:01:52.040 --> 0:01:55.600 taking that reprieve from student loan payments, when all those 0:01:55.640 --> 0:01:58.520 things come doue, they're not going to spend and they're 0:01:58.520 --> 0:02:01.800 probably going to start fearing for the economy in general 0:02:01.880 --> 0:02:05.400 because their own personal finances will not be as robust 0:02:05.400 --> 0:02:06.000 as they were. 0:02:06.400 --> 0:02:09.280 Are we starting to see consumer behavior change already in 0:02:09.360 --> 0:02:13.239 anticipation of that data. What evidence might you be seeing 0:02:13.280 --> 0:02:13.520 of that? 0:02:15.000 --> 0:02:17.960 Well, not really. We think consumers are still looking at 0:02:18.000 --> 0:02:20.799 the fact that many of them are still working, They're 0:02:20.840 --> 0:02:23.720 still spending on services, even though they're saying that the 0:02:23.760 --> 0:02:26.240 types of services are going to spend on will be 0:02:26.320 --> 0:02:28.880 more towards needs rather than once. But the point is 0:02:28.880 --> 0:02:32.079 that they still anticipate that they're going to be spending 0:02:32.440 --> 0:02:35.320 and they're not really looking forward to the fact that, yes, 0:02:35.360 --> 0:02:38.360 they're going to have higher debts, their balance sheets are 0:02:38.400 --> 0:02:41.840 not going to be as healthy, and certainly interest rates 0:02:41.919 --> 0:02:44.200 are going to be very elevated in case they have 0:02:44.280 --> 0:02:47.280 any emergencies where they might need to finance something. So 0:02:47.520 --> 0:02:51.360 I think consumers are not really focused that much on 0:02:51.440 --> 0:02:52.920 the future as much as they should be. 0:02:53.080 --> 0:02:55.560 A Dana, you're expert at this. The theme that Jackson 0:02:55.600 --> 0:02:58.760 Holme particularly our day was Managing director Gurghava of the 0:02:58.800 --> 0:03:03.400 IMF and with Laguard the ECB, they both brought up fragmentation. 0:03:04.040 --> 0:03:07.920 How fragmented is America right now? How disaggregated are we 0:03:08.000 --> 0:03:09.200 in our economics? 0:03:10.639 --> 0:03:14.320 Well, I mean, you do have very different responses to 0:03:14.480 --> 0:03:16.960 what's going on in the economy. Even when we look 0:03:16.960 --> 0:03:20.760 at our own consumer confidence measure, you get different readings 0:03:20.760 --> 0:03:23.560 by age and by income, and so we do think 0:03:23.639 --> 0:03:26.560 there is quite a bit of fragmentation in the economy 0:03:26.639 --> 0:03:27.080 right now. 0:03:28.120 --> 0:03:31.200 Well, the fragmentation that's there I guess we see it 0:03:31.200 --> 0:03:34.040 in the jobs report on Friday. A lot of people 0:03:34.080 --> 0:03:36.360 are waiting for el, say sub one hundred thousand non 0:03:36.400 --> 0:03:39.960 farm payrolls. How disaggregated is that number? I mean, it's 0:03:39.960 --> 0:03:43.960 one hundred and fifty million for conversation, but as part 0:03:44.000 --> 0:03:46.000 of that one hundred and fifty million flat in their 0:03:46.040 --> 0:03:48.640 back any other part confident? 0:03:49.960 --> 0:03:53.120 Well, I think it really depends on what industry you're in. Certainly, 0:03:53.200 --> 0:03:55.119 the industries where you have to show up to work 0:03:55.160 --> 0:03:59.040 are still hiring. But the industries that were former pandemic 0:03:59.120 --> 0:04:04.400 darlings like and finance, even transportation, warehousing, they're seeing job 0:04:04.480 --> 0:04:07.240 losses and weakness. And even with the big revisions that 0:04:07.320 --> 0:04:10.920 we saw in the payrolls data dating back from March 0:04:11.560 --> 0:04:15.520 to twelve months prior, we saw that there were entire 0:04:15.640 --> 0:04:18.839 gains wiped out. And so if you're in those sectors, 0:04:18.880 --> 0:04:21.480 you're probably not as a buliant as if you are 0:04:21.560 --> 0:04:25.000 in say hotels or restaurants or even healthcare, where there's 0:04:25.040 --> 0:04:26.560 still quite a bit of hiring going on. 0:04:27.279 --> 0:04:30.159 And finally, Dana, can I ask you about the housing 0:04:30.240 --> 0:04:33.520 market and the mortgage rates that people are facing if 0:04:33.520 --> 0:04:35.599 they're trying to buy a home or contending with it. 0:04:35.640 --> 0:04:37.560 They're thinking about selling the home that they're in that 0:04:37.600 --> 0:04:40.920 they have a lower rate on. How is that a 0:04:40.960 --> 0:04:44.640 factor in the perception of the economic health of the 0:04:44.640 --> 0:04:47.760 country that consumers feel if they're looking at home affordability 0:04:47.800 --> 0:04:50.719 that is the worst it's been in decades. Rents that 0:04:50.800 --> 0:04:54.080 also are incredibly high. 0:04:54.160 --> 0:04:57.800 Well, it's interesting you actually see bifurcation in the housing market. 0:04:58.120 --> 0:04:59.880 Is this seeing home sales or down in the de 0:05:00.320 --> 0:05:03.920 and prices are falling year on year because mortgage rates 0:05:03.920 --> 0:05:06.400 are so high. Why would you move if you're going 0:05:06.440 --> 0:05:08.640 to have a higher mortgage rate than what you have 0:05:08.760 --> 0:05:12.040 now after you've probably refinanced a couple of times during 0:05:12.040 --> 0:05:15.160 the pandemic. But then with new housing we're starting to 0:05:15.200 --> 0:05:17.560 see a little bit of a pickup because you can't 0:05:17.560 --> 0:05:20.680 get an existing home. But all in all, bordability is 0:05:20.720 --> 0:05:24.680 certainly down because interest rates are so high, and also 0:05:24.800 --> 0:05:28.479 in certain markets prices are still rising year on year 0:05:28.560 --> 0:05:30.640 because this is very much about location. 0:05:32.200 --> 0:05:34.799 Dana, thank you so much. Dana Peterson the conference board 0:05:35.160 --> 0:05:35.560 with US. 0:05:40.080 --> 0:05:43.440 Philo Landa joined US now chief equity strategists of Refederated 0:05:43.520 --> 0:05:46.440 her Mace. Phil I'll ask the cool question again, is 0:05:46.480 --> 0:05:48.720 the pullback more than I sational setback? 0:05:49.640 --> 0:05:53.960 So Julian's a very smart guy. We've been looking for, 0:05:54.839 --> 0:05:58.560 let's call it, a ten percent correction in stocks over 0:05:58.600 --> 0:06:01.479 the course of the August of ten October period, which 0:06:01.520 --> 0:06:05.560 would be seasonal. The question is what does valuation look 0:06:05.720 --> 0:06:09.520 like these big technology stocks versus the rest of the market. 0:06:10.120 --> 0:06:12.279 In the first you know, seven months of the year, 0:06:12.960 --> 0:06:16.839 the tech stocks have dramatically outperformed the rest of the market, 0:06:16.960 --> 0:06:19.320 and we felt that there would be sort of a 0:06:19.360 --> 0:06:24.120 reversion of the mean during this you know, third quarter period. 0:06:24.240 --> 0:06:27.200 You know, ten twelve percent is a reasonable place to start, 0:06:27.240 --> 0:06:29.440 and let's see what the valuation looks like once we 0:06:29.520 --> 0:06:29.920 get there. 0:06:30.120 --> 0:06:32.440 So I'm coming into labor dam. I'm at the kitchen 0:06:32.480 --> 0:06:34.800 counter at the second home, and I'm trying to reallocate 0:06:34.839 --> 0:06:39.599 my portfolio. Am I reallocating with enthusiasm to equities looking 0:06:39.839 --> 0:06:43.320 out three years? Or can I not have a three 0:06:43.440 --> 0:06:46.360 year view because of the jumble of the news slow 0:06:46.480 --> 0:06:46.919 right now? 0:06:47.440 --> 0:06:50.320 No, if you've got a three year time horizon, Tom, 0:06:50.360 --> 0:06:55.000 we're extraordinarily bullish. Our near term call somewhat tactical, is 0:06:55.000 --> 0:06:59.080 somewhat defensive. That we've got a three percent overweight to 0:06:59.160 --> 0:07:04.039 stocks overall, but our overweights are in domestic value, in 0:07:04.120 --> 0:07:07.760 small cap and international. The one area that we've got 0:07:07.800 --> 0:07:11.680 sort of a negative bias on is these grow technology names, 0:07:11.680 --> 0:07:14.440 which we think got ahead of themselves. As we look 0:07:14.480 --> 0:07:18.520 out three years, we will have seen peak inflation, we 0:07:18.600 --> 0:07:22.640 will have seen peak FED valuation levels will be more reasonable, 0:07:22.920 --> 0:07:26.400 maybe we get a change in leadership in Washington with 0:07:26.880 --> 0:07:31.200 better fiscal policy approach. All of that suggests that stocks 0:07:31.200 --> 0:07:32.760 three years from now we're going to be in much 0:07:32.800 --> 0:07:33.600 better shape. 0:07:33.840 --> 0:07:35.800 Okay, So, Philip, you suggest that we'll see the peak 0:07:35.800 --> 0:07:37.720 and inflation, we'll see the peak and FED funds at 0:07:37.720 --> 0:07:40.120 some point between now and three years from now, can 0:07:40.120 --> 0:07:42.080 you get more specific about where that is? If we're 0:07:42.080 --> 0:07:45.320 talking about higher for longer, how much longer? Realistically? 0:07:45.800 --> 0:07:49.560 So, I think we're looking Kaihlee at about a six 0:07:49.640 --> 0:07:53.160 to twelve month timeframe. The inflation has clearly peaked in 0:07:53.200 --> 0:07:57.160 our mind last year. The question is the divergence between 0:07:57.240 --> 0:08:01.800 the decline in headline inflation versus core inflation. Core inflation 0:08:01.920 --> 0:08:04.679 is coming down at a much slower pace. Federal reserve 0:08:04.720 --> 0:08:08.240 in our view, probably has one more quarter point hike 0:08:08.360 --> 0:08:11.600 up their sleeves, maybe that November first meeting and then 0:08:11.600 --> 0:08:14.400 they go on pause. But pause is going to last 0:08:14.400 --> 0:08:16.440 a while. We don't expect them to come back in 0:08:16.760 --> 0:08:20.080 and start cutting rates until perhaps this time next year. 0:08:20.760 --> 0:08:24.920 Valuation levels, you know, because of the tech stocks were extended, 0:08:25.720 --> 0:08:29.280 those valuation levels are coming back. Stocks are down about 0:08:29.280 --> 0:08:31.760 six percent over the course of the last month or so. 0:08:32.559 --> 0:08:35.520 And then, of course we've got this big election coming 0:08:35.600 --> 0:08:38.160 up in November of next year, so it's going to 0:08:38.240 --> 0:08:40.800 take a year or so for all of these things 0:08:40.840 --> 0:08:44.760 to shake out. But again, using Tom's three year time horizon, 0:08:45.200 --> 0:08:47.960 we're pretty excited about what the longer term picture looks like. 0:08:48.600 --> 0:08:52.000 How does the longer term view on equities conflate with 0:08:52.160 --> 0:08:54.360 what you expect in the bond market, because right now 0:08:54.400 --> 0:08:57.240 the bond market frankly looks quite confused. But I wonder 0:08:57.280 --> 0:08:59.920 how much the rate story is actually what is attribute 0:08:59.920 --> 0:09:03.559 to the stagnation in the equity market we have seen no. 0:09:03.840 --> 0:09:06.640 A great question and the backup in rates that we've 0:09:06.640 --> 0:09:08.360 seen here from three and a quarter to four and 0:09:08.400 --> 0:09:11.520 a quarter and benchmark ten's over the last say six 0:09:11.559 --> 0:09:14.760 months or so, and that's exactly what our Duration Committee 0:09:15.080 --> 0:09:18.640 shaired by R. J. Gallo was looking for. The idea 0:09:18.800 --> 0:09:22.080 is that rates are going to peak here, you know, 0:09:22.120 --> 0:09:23.600 in this four and a quarter four and a half 0:09:23.640 --> 0:09:26.040 percent neighborhood, and looking out over the course of the 0:09:26.080 --> 0:09:29.160 next six to twelve months, we're going to see rates 0:09:29.280 --> 0:09:31.400 rally back, you know, into that three to three and 0:09:31.480 --> 0:09:34.360 a quarter neighborhood. So, you know, it's been painful for 0:09:34.440 --> 0:09:37.400 bond investors over the last six months or so. We 0:09:37.440 --> 0:09:39.480 think looking out over the course of the next year, 0:09:40.080 --> 0:09:43.280 with the potential for slower economic growth, bonds will rally. 0:09:43.559 --> 0:09:48.840 Phill Orlando retail got absolutely slammed last week. Does that 0:09:48.920 --> 0:09:52.840 give you pause on profitable Walmart trading at twenty x 0:09:53.240 --> 0:09:54.719 times you know earnings? 0:09:55.679 --> 0:09:58.040 Tom It certainly gives us pause because one of the 0:09:58.040 --> 0:10:01.160 things we track pretty closely is the performance of the 0:10:01.240 --> 0:10:05.760 consumer during Mapril, back to school and Christmas and back 0:10:05.840 --> 0:10:08.440 to school season. We're only two months in. We've got 0:10:08.760 --> 0:10:11.800 June and July data, but retail sales are only up 0:10:11.840 --> 0:10:14.920 about two point four percent year on year. A year ago, 0:10:15.640 --> 0:10:18.480 retail sales are up nine point eight percent over that 0:10:18.520 --> 0:10:21.200 period of time. We saw the same situation with Mapril 0:10:21.240 --> 0:10:25.040 the March and April Easter sales, we're only up one 0:10:25.080 --> 0:10:28.120 point seven percent year on year. We think Christmas sales 0:10:28.280 --> 0:10:30.840 are going to be again sort of that low single digit. 0:10:31.160 --> 0:10:34.319 So for a number of reasons, the consumer is slowing down. 0:10:34.840 --> 0:10:38.480 GDP is seventy percent generated by the consumer, so that's 0:10:38.520 --> 0:10:40.040 something we're watching pretty closely. 0:10:40.160 --> 0:10:42.480 So do you thinkish some tension here between what we're 0:10:42.520 --> 0:10:45.080 pricing in the bond market, particularly the front end, which 0:10:45.080 --> 0:10:49.880 is high for longer, and what's developing abroad, specifically in China. 0:10:50.000 --> 0:10:53.560 So China has been a disappointment, no question. We've got 0:10:53.559 --> 0:10:57.240 a longer term review on China that given the problems 0:10:57.320 --> 0:11:00.400 that they're having right now, it is inconceivable to us 0:11:00.880 --> 0:11:04.920 that we do not see aggressive fiscal and monetary policy 0:11:05.280 --> 0:11:07.680 in China looking out over the next six to twelve 0:11:07.720 --> 0:11:11.040 months to try to reverse those fortunes. So we like 0:11:11.160 --> 0:11:15.640 international in part because we're expecting the Chinese government is 0:11:15.720 --> 0:11:18.200 going to step in here and try to turn things 0:11:18.240 --> 0:11:21.200 around and improve the economic fortunes of China over the 0:11:21.200 --> 0:11:21.680 next year. 0:11:21.960 --> 0:11:24.160 Now happens yet in a big way, that's for sure, Phil, 0:11:24.160 --> 0:11:27.079 Thank you sir, that's for sure. Phil Orlando, Federated Hermei's 0:11:27.160 --> 0:11:29.800 range of efforts from Chinese policy makers over the weekend. 0:11:40.120 --> 0:11:43.480 It is the end of the summer. We are all recalibrating. 0:11:43.559 --> 0:11:46.839 Children are being lectured on summer reading and getting ready 0:11:46.840 --> 0:11:50.000 for school. Part of that across this nation is to 0:11:50.040 --> 0:11:53.000 get the tone of America. No one does that better 0:11:53.040 --> 0:11:56.520 than Gallup, Venerable Gallup, their editor in chief, Mohammad Units 0:11:56.880 --> 0:12:00.320 has just been exquisite on the big picture of America. 0:12:00.480 --> 0:12:04.640 Mohammed an open question. What is the mood of America 0:12:04.720 --> 0:12:06.160 as we enter September? 0:12:07.120 --> 0:12:10.480 Not good on the several fronts. Not good. If you 0:12:10.520 --> 0:12:13.480 are a federal government official. 0:12:13.640 --> 0:12:16.360 No matter what institution you're leading, right now, you're facing 0:12:16.440 --> 0:12:17.439 a record. 0:12:17.120 --> 0:12:21.320 Low in confidence. And that even applies to the Supreme 0:12:21.360 --> 0:12:22.280 Court and the military. 0:12:23.000 --> 0:12:26.880 But politically speaking, guys, what we see is really the 0:12:26.960 --> 0:12:31.360 Biden administration struggling to get Americans behind what they're doing 0:12:31.360 --> 0:12:34.319 with the economy. Big effort the past couple of weeks, 0:12:34.360 --> 0:12:38.080 you guys covered it. But right now President Biden has 0:12:38.160 --> 0:12:40.880 sixty plus percent of people who disapprove of the way 0:12:41.120 --> 0:12:44.440 he's handling this economy. So as people go back to 0:12:44.440 --> 0:12:47.520 school and as confidence at higher institutions is. 0:12:47.520 --> 0:12:50.199 Also at a record low. People have the economy on 0:12:50.280 --> 0:12:51.280 their mind this fall. 0:12:52.000 --> 0:12:56.719 Does President Trump own the Republican Party or is there 0:12:56.760 --> 0:13:00.200 a party out there of our collective memory. 0:13:01.559 --> 0:13:04.200 Right now, if you follow the numbers he does. 0:13:04.400 --> 0:13:08.559 Nobody is even close to giving him any kind of 0:13:08.559 --> 0:13:10.800 a challenge in terms of favorable ratings. 0:13:11.440 --> 0:13:14.160 That being said, his favorable rating is not high. It's 0:13:14.200 --> 0:13:17.319 forty one. It's the same as President Biden's. 0:13:17.600 --> 0:13:21.040 And again we're going to see an election where Americans 0:13:21.040 --> 0:13:23.680 for the most part, are choosing between options they're not 0:13:23.880 --> 0:13:28.400 thrilled about unless somebody knew and miraculous jumps in the ring, 0:13:28.440 --> 0:13:29.640 and it doesn't look like that's going. 0:13:29.640 --> 0:13:30.480 To happen right now. 0:13:31.320 --> 0:13:33.760 Mohammed, to return to the subject of President Biden and 0:13:33.760 --> 0:13:36.120 his approval ratings, and as you know, they remain low. 0:13:36.160 --> 0:13:38.640 On the economy. You have a graphic in your polling 0:13:38.679 --> 0:13:40.439 that just shows that even over the course of the 0:13:40.520 --> 0:13:43.040 last year in change, as we have seen inflation continually 0:13:43.080 --> 0:13:46.240 going down, the line almost moves sideways. He's not getting 0:13:46.240 --> 0:13:49.640 any credit for things improving well. The greater credit come 0:13:49.720 --> 0:13:52.240 potentially on the downside in the form of blame for 0:13:52.320 --> 0:13:55.160 any further deterioration. We see from here. 0:13:56.080 --> 0:13:56.320 Yeah. 0:13:56.360 --> 0:13:59.040 I mean, look, presidents either do a great job taking 0:13:59.040 --> 0:14:01.920 credit for the economy or they do a horrible job 0:14:01.920 --> 0:14:03.960 and they get blamed for anything that's going wrong. I 0:14:03.960 --> 0:14:06.960 think right now the Biden folks are in that ladder category. 0:14:07.720 --> 0:14:10.240 In contrast, of course, President Trump was doing a pretty 0:14:10.280 --> 0:14:14.000 good job taking credit for a booming economy before COVID. 0:14:14.480 --> 0:14:17.480 Those dynamics are probably not going to change, Kayley, I 0:14:17.520 --> 0:14:21.120 don't see President Biden suddenly convincing the public that he's 0:14:21.160 --> 0:14:25.520 doing great. His basis supporting him. Support among Democrats was 0:14:25.520 --> 0:14:28.000 a little bit lower. It's back up to about eighty one. 0:14:28.320 --> 0:14:31.440 So he's really got who he's got historically speaking. To 0:14:31.560 --> 0:14:34.360 really be an incumbent that has a chance, you've got 0:14:34.360 --> 0:14:36.000 to hit the fifty percent plus mark. 0:14:36.320 --> 0:14:38.640 And the big debate in the polling world these. 0:14:38.560 --> 0:14:41.480 Days is is that a dynamic of the past and 0:14:41.600 --> 0:14:43.600 are we moving into a different era right now? 0:14:43.680 --> 0:14:46.200 Neither Biden nor Trump are even close to fifty. 0:14:46.880 --> 0:14:50.200 Okay, So on the subject of Trump, I was mentioning earlier, Mohammad, 0:14:50.200 --> 0:14:52.280 we have this hearing in the Washington case. There's a 0:14:52.320 --> 0:14:54.400 hearing in Georgia as well. Today when we're going to 0:14:54.400 --> 0:14:56.160 be talking about a trial that could fall in the 0:14:56.160 --> 0:14:59.840 middle of primary season. We understood from reporting over the 0:14:59.840 --> 0:15:02.480 w that all the fourth indictment of the president, his 0:15:02.560 --> 0:15:05.440 arrest and mugshot in Georgia, seems to have accomplished for 0:15:05.520 --> 0:15:07.120 him at least at this point is raising a bunch 0:15:07.120 --> 0:15:09.920 of money seven million dollars four point two I believe 0:15:09.920 --> 0:15:13.320 on Friday alone. Do you have any reason to expect 0:15:13.320 --> 0:15:15.440 that he will start to see a deterioration in his 0:15:15.520 --> 0:15:19.480 attractiveness to his base as these legal challenges just keep mounting. 0:15:20.200 --> 0:15:21.320 I don't, And here's why. 0:15:21.360 --> 0:15:23.920 We did a recent analysis looking at the past twenty 0:15:24.000 --> 0:15:27.760 years of the issues Democrats and Republicans have diverged the most. 0:15:27.840 --> 0:15:31.160 On the number one issue, Kayley, has been the size 0:15:31.200 --> 0:15:34.320 of the federal government, a fifty point gap between Republicans 0:15:34.320 --> 0:15:37.440 and Democrats. And you'll notice that President Trump is framing 0:15:37.480 --> 0:15:41.880 his entire defense essentially based on an overreach of government 0:15:42.200 --> 0:15:44.880 that's stifling his right to free speech, his right to. 0:15:44.920 --> 0:15:45.920 Challenge the election, etc. 0:15:46.240 --> 0:15:48.520 The more that he does that, the more that he's 0:15:48.720 --> 0:15:51.920 driving right into the narrative that his base wants to 0:15:51.960 --> 0:15:55.240 hear most of all, So before those reasons I really 0:15:55.240 --> 0:15:56.520 don't see it harming him much. 0:15:57.120 --> 0:16:02.640 Mohammed, which state is your galap guide state towards November 0:16:02.680 --> 0:16:04.800 of next year? Is there one state where you wake 0:16:04.920 --> 0:16:08.280 up and say, pay attention to Ohio or pay attention 0:16:08.360 --> 0:16:12.080 to Georgia? I mean, which is a state that you study? 0:16:13.120 --> 0:16:15.240 There are none that we study, really, Tom. 0:16:15.240 --> 0:16:18.120 What we do is try to understand the national mood 0:16:18.200 --> 0:16:20.920 and the national average. Now, of course swing states are key, 0:16:21.400 --> 0:16:24.120 but really every cycle, in the last three to four cycles, 0:16:24.120 --> 0:16:27.800 there have been different key swing states. It's really early, 0:16:27.880 --> 0:16:30.080 I think right now. Depending maybe when we have a 0:16:30.240 --> 0:16:33.560 one person running for the Republican Party, you point to 0:16:33.600 --> 0:16:35.120 a state if that person is connected to it. 0:16:35.200 --> 0:16:37.240 But it's not just going to be a one state 0:16:37.280 --> 0:16:37.920 game this year. 0:16:38.400 --> 0:16:40.640 Finally, Mohammed, when I look at your breakdown of the 0:16:40.640 --> 0:16:44.120 different approval or situations and the approval for the president, 0:16:44.160 --> 0:16:46.280 I noticed that his highest approval rating is on the 0:16:46.320 --> 0:16:49.640 situation in Ukraine. As we had on the debate stage, 0:16:49.640 --> 0:16:52.320 candidates calling into question last week the idea that the 0:16:52.440 --> 0:16:55.600 US should continue to provide funding. Members of Congress also 0:16:55.680 --> 0:16:58.240 making a lot of noise about the US not aiding 0:16:58.360 --> 0:17:00.720 Ukraine in the same way we have for the last 0:17:00.760 --> 0:17:03.920 eighteen months. Where are the American people on this issue? 0:17:04.480 --> 0:17:08.680 The American people are mostly behind Ukraine, but Republicans are 0:17:08.720 --> 0:17:12.399 split on Ukraine. And this is a really persistent split 0:17:12.480 --> 0:17:15.280 that's consistent now since the beginning of the war. You 0:17:15.320 --> 0:17:18.040 have half of Republicans that very much are the opinion 0:17:18.080 --> 0:17:20.080 that we should not be doing so much. But there's 0:17:20.080 --> 0:17:22.840 another half of the Republicans around forty five percent that 0:17:22.920 --> 0:17:25.960 really want to see Ukraine fight through and win back 0:17:26.359 --> 0:17:27.800 all the territory they've lost. 0:17:28.320 --> 0:17:31.640 Mom in ten seconds, what's been the Taylor Swift impact 0:17:31.680 --> 0:17:33.680 across America? Is it permanent? 0:17:34.920 --> 0:17:36.600 I think? I'm from Los Angeles, I think so. 0:17:36.640 --> 0:17:38.560 I think the future of America has more to do 0:17:38.600 --> 0:17:40.280 with entertainment than anything. 0:17:40.359 --> 0:17:45.480 Right there we go, mahamm thanks for that final point. 0:17:45.720 --> 0:17:53.399 Appreciate it. Annaeshton joins us this morning, and what do 0:17:53.440 --> 0:17:56.280 you think of the Chinese coverage? It's a cottage industry 0:17:56.359 --> 0:18:00.600 right now for people like you, there's like five articles 0:18:00.600 --> 0:18:03.080 a day. I feel like I have to read What 0:18:03.119 --> 0:18:07.400 am I missing? What do you see in your China analysis? 0:18:07.760 --> 0:18:10.680 That's not in the zeitgeist right now? 0:18:12.680 --> 0:18:15.639 So, you know, I wish there were only five articles 0:18:15.640 --> 0:18:19.400 a day that I had to read, because it definitely 0:18:19.480 --> 0:18:22.719 has become something of a cottage industry. I think that 0:18:23.760 --> 0:18:26.879 the interesting thing that's happening right now really is this 0:18:27.040 --> 0:18:32.760 statunt that the Biden administration and Chinese leadership have been 0:18:33.040 --> 0:18:36.679 pursuing for the entirety of the summer. And I know 0:18:36.720 --> 0:18:39.840 that that's not new, and it is something that people 0:18:39.920 --> 0:18:43.919 have had every reason to see, but I think you 0:18:43.960 --> 0:18:47.720 know the fact that it's being carried out by the 0:18:47.720 --> 0:18:51.679 Biden administration at this time when we're headed into a 0:18:51.720 --> 0:18:56.920 presidential election year, and I really had expected a couple 0:18:56.960 --> 0:18:59.600 of years ago that by now there would be nothing 0:18:59.760 --> 0:19:03.439 but a competition to be the most hawkish on China. 0:19:03.480 --> 0:19:07.080 It's very interesting to see the Biden administration deciding that 0:19:07.720 --> 0:19:09.720 stability is the course it wants to. 0:19:09.760 --> 0:19:13.400 Chart, and this way key for Secretary Ramondo. What would 0:19:13.400 --> 0:19:16.359 you expect from four days and meetings from the COMMAS Secretary? 0:19:17.720 --> 0:19:20.000 I think that this is the most important visit we've 0:19:20.000 --> 0:19:23.879 had so far from a member of the administration because 0:19:23.920 --> 0:19:28.760 she oversees export controls, and export controls are the things, 0:19:28.920 --> 0:19:33.639 among others, but a mainstay of the tech policies that 0:19:33.680 --> 0:19:36.960 the United States has rolled out in recent years that 0:19:37.480 --> 0:19:40.760 China is most bothered by. Feels that this is an 0:19:40.760 --> 0:19:45.520 effort to contain their technological advancement and even likely to 0:19:46.280 --> 0:19:51.199 undermine their economic prosperity. So they're pretty upset about the 0:19:51.240 --> 0:19:55.200 export controls and about things like the Executive Order on 0:19:55.280 --> 0:20:00.399 outbound investment that also constrains US abilities to invest certain 0:20:00.440 --> 0:20:05.720 sectors in China, including AI, quantum and semiconductor chips. And 0:20:05.920 --> 0:20:09.040 now they're going to be with the woman who is 0:20:09.160 --> 0:20:11.560 overseeing all of that. She's already sat on the ground 0:20:11.640 --> 0:20:16.080 that national security concerns are non negotiable, but emphasized that 0:20:16.160 --> 0:20:19.960 that's just one percent of the US economy, And she's 0:20:20.000 --> 0:20:23.960 really pushed for a more robust and more stable commercial relationship, 0:20:24.000 --> 0:20:27.600 and she's gotten some receptivity from her counterparts. 0:20:28.400 --> 0:20:30.600 Yeah, we've heard that they're going to be talking. There's 0:20:30.600 --> 0:20:33.400 going to be an export group meeting tomorrow on August 0:20:33.600 --> 0:20:35.560 twenty ninth. To your point, Anna, we've heard from her 0:20:35.720 --> 0:20:39.040 and continuously from administration officials that this is about protecting 0:20:39.160 --> 0:20:43.400 national security interests. It is not about holding China back economically. 0:20:43.440 --> 0:20:46.200 But can you really have one without the other? Isn't 0:20:46.560 --> 0:20:49.640 protecting national security interests to at least a certain degree, 0:20:50.080 --> 0:20:53.640 going to hit China economically by default. 0:20:53.960 --> 0:20:56.960 Yes, by default, it absolutely will, Kaylee. And you know, 0:20:57.040 --> 0:21:01.480 the reality is that these export controls, starting last October, 0:21:01.520 --> 0:21:06.560 with the ones that Jake Sullivan announced, they're really quite restrictive. 0:21:06.640 --> 0:21:10.920 They don't just prevent China from buying things that are 0:21:12.000 --> 0:21:14.880 state of the art. They prevent China from buying anything 0:21:14.920 --> 0:21:18.399 in the future that is smaller than what these restrictions 0:21:18.480 --> 0:21:22.080 have set down, and smaller being more state of the art. 0:21:22.160 --> 0:21:25.119 So they're kind of trying to hold China at a 0:21:25.119 --> 0:21:27.440 certain place in its technological development. 0:21:27.600 --> 0:21:31.719 And all of this is about fancy technology stuff. But 0:21:31.800 --> 0:21:35.760 the fact is in my house still like eighty percent 0:21:35.800 --> 0:21:38.240 of the garbage that comes in the door in cardboard 0:21:38.320 --> 0:21:42.919 boxes says made in China. Has there been any lessening 0:21:43.760 --> 0:21:47.000 of all the stuff we buy that's made in China. 0:21:47.560 --> 0:21:49.800 It's not going to be in a balloon over Wyoming. 0:21:51.359 --> 0:21:54.000