1 00:00:02,480 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,560 --> 00:00:14,360 Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis 3 00:00:14,360 --> 00:00:17,079 Speaker 2: along with Doug Krisner, join us each day for the 4 00:00:17,160 --> 00:00:20,520 Speaker 2: stories making news and moving markets in the Asia Pacific. 5 00:00:20,720 --> 00:00:23,160 Speaker 2: You can subscribe to the show anywhere you get your 6 00:00:23,200 --> 00:00:27,120 Speaker 2: podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and 7 00:00:27,160 --> 00:00:30,760 Speaker 2: the Bloomberg Business App. Joining us now on the program 8 00:00:30,840 --> 00:00:34,760 Speaker 2: is Andrew Giuliani, former special assistant to former President Donald 9 00:00:34,760 --> 00:00:38,240 Speaker 2: Trump and a former candidate for governor of New York 10 00:00:38,440 --> 00:00:42,720 Speaker 2: and taking a look at the DNC meetings here. Mister Giuliani, 11 00:00:42,760 --> 00:00:44,720 Speaker 2: thanks very much for being with us. Kamala Harrison, the 12 00:00:44,760 --> 00:00:48,800 Speaker 2: Democrats seem to have gained in the polls here of late. 13 00:00:49,120 --> 00:00:52,520 Speaker 1: Will it last? It's a good question, Brian. 14 00:00:52,560 --> 00:00:55,240 Speaker 3: And obviously there's always a little bit of a honeymoon 15 00:00:55,280 --> 00:00:58,080 Speaker 3: bump whenever you have a new candidate like this, especially 16 00:00:58,400 --> 00:01:01,320 Speaker 3: kind of the extenuating circumstance and how this happened with 17 00:01:01,720 --> 00:01:05,479 Speaker 3: President Biden leaving the race just a month ago, and 18 00:01:05,560 --> 00:01:07,679 Speaker 3: you should expect a little bit of a bump out 19 00:01:07,680 --> 00:01:11,240 Speaker 3: of this convention. But I think when Kamala Harris has 20 00:01:11,280 --> 00:01:14,640 Speaker 3: to go out there and actually answer questions from the 21 00:01:14,680 --> 00:01:17,520 Speaker 3: media and sit down. I think the American people will 22 00:01:17,520 --> 00:01:19,720 Speaker 3: see kind of what they've seen the last few years, 23 00:01:19,760 --> 00:01:22,039 Speaker 3: which is somebody who does not have control of the 24 00:01:22,080 --> 00:01:25,000 Speaker 3: southern border and somebody who's led to the record high 25 00:01:25,080 --> 00:01:28,080 Speaker 3: inflation that we've seen for the last few years. 26 00:01:28,959 --> 00:01:32,160 Speaker 2: The House will be an interesting battleground. Republicans have an 27 00:01:32,160 --> 00:01:36,200 Speaker 2: eight seat advantage there. We understand that there are twenty 28 00:01:36,240 --> 00:01:38,760 Speaker 2: two seats that are rated as a toss up at 29 00:01:38,880 --> 00:01:41,440 Speaker 2: least were done so by the Cook Political Report with 30 00:01:41,560 --> 00:01:44,600 Speaker 2: Amy Walter, which is considered nonpartisan. 31 00:01:44,840 --> 00:01:46,760 Speaker 1: How do you see things moving through the House. 32 00:01:48,120 --> 00:01:49,960 Speaker 3: Yeah, I think it's going to go very similar to 33 00:01:50,000 --> 00:01:53,360 Speaker 3: the presidential election, right, So, I think you can break 34 00:01:53,400 --> 00:01:56,200 Speaker 3: down all of these swing states, and New York is 35 00:01:56,240 --> 00:01:59,120 Speaker 3: certainly a state where they're going to be about four 36 00:01:59,240 --> 00:02:03,800 Speaker 3: or five up races depending on how well President Trump 37 00:02:04,400 --> 00:02:07,360 Speaker 3: or Vice President Harris ends up doing in these states. 38 00:02:08,360 --> 00:02:12,079 Speaker 3: So I really think that not just the House of Representatives, 39 00:02:12,080 --> 00:02:14,960 Speaker 3: but looking at the Senate as well, these are going 40 00:02:15,040 --> 00:02:18,840 Speaker 3: to be really really close races coming down to November fifth, 41 00:02:18,880 --> 00:02:21,560 Speaker 3: and we get in when we get into actually early voting, 42 00:02:22,560 --> 00:02:25,640 Speaker 3: so you know, really can go either way at this point. 43 00:02:26,680 --> 00:02:29,800 Speaker 3: I do think the American people, though, will have the 44 00:02:29,840 --> 00:02:33,400 Speaker 3: opportunity to see kind of both candidates up there together 45 00:02:33,520 --> 00:02:37,119 Speaker 3: on September tenth, when they're out there, when they're out 46 00:02:37,120 --> 00:02:39,240 Speaker 3: there actually pitching to the American people. 47 00:02:40,720 --> 00:02:44,600 Speaker 2: You mentioned inflation as a leading issue. We've got the 48 00:02:44,600 --> 00:02:47,760 Speaker 2: FED that is getting ready to cut interest rates in September, 49 00:02:47,840 --> 00:02:50,880 Speaker 2: or at least that's how it appears. Are the Republicans 50 00:02:51,000 --> 00:02:54,799 Speaker 2: starting to lose inflation as a key issue in that 51 00:02:54,960 --> 00:02:56,760 Speaker 2: inflation is coming down? 52 00:02:58,080 --> 00:03:01,520 Speaker 3: I don't think so, just because inflation actually reached nine 53 00:03:01,600 --> 00:03:04,760 Speaker 3: percent or so under this current administration back in twenty 54 00:03:04,840 --> 00:03:07,560 Speaker 3: twenty two, so it is coming down from where it was. 55 00:03:08,320 --> 00:03:10,320 Speaker 4: But remember you were looking at inflation. 56 00:03:10,520 --> 00:03:13,920 Speaker 3: Are numbers at one point five to two percent throughout 57 00:03:13,919 --> 00:03:17,640 Speaker 3: pretty much the entire Trump presidency. Now there's still and 58 00:03:17,680 --> 00:03:19,840 Speaker 3: you would know these numbers better than me, but probably 59 00:03:19,840 --> 00:03:22,000 Speaker 3: three and a half four percent. And even though it 60 00:03:22,040 --> 00:03:24,320 Speaker 3: is coming down and the Fed is looking to cut 61 00:03:24,320 --> 00:03:27,720 Speaker 3: at this point, I think most Americans see kind of 62 00:03:27,760 --> 00:03:30,040 Speaker 3: the difference of the last three and a half years 63 00:03:30,400 --> 00:03:33,440 Speaker 3: versus twenty seventeen through twenty twenty, and I think they 64 00:03:33,480 --> 00:03:36,160 Speaker 3: can make a termination themselves. 65 00:03:36,680 --> 00:03:39,839 Speaker 2: Well, it's certainly one of the top issues. What else 66 00:03:39,880 --> 00:03:41,720 Speaker 2: do you think people are really focused on? 67 00:03:43,440 --> 00:03:44,720 Speaker 1: I think the foreign wars. 68 00:03:44,800 --> 00:03:47,600 Speaker 3: I think you can see just the protests yesterday in 69 00:03:47,720 --> 00:03:51,520 Speaker 3: Chicago where you had fifty six arrests that happened outside 70 00:03:51,560 --> 00:03:55,760 Speaker 3: of the Israeli embassy there in Chicago. I think that's 71 00:03:55,760 --> 00:03:57,840 Speaker 3: going to be a major issue. I think the Southern 72 00:03:57,880 --> 00:04:01,600 Speaker 3: border is going to be a massive issue in looking at, sadly, 73 00:04:01,640 --> 00:04:04,720 Speaker 3: how many of these children that we've lost over. 74 00:04:04,680 --> 00:04:06,240 Speaker 4: The last couple of years. 75 00:04:06,240 --> 00:04:09,320 Speaker 3: This is a report that just came out today. And 76 00:04:09,320 --> 00:04:11,120 Speaker 3: then I think you're going to have other social issues 77 00:04:11,120 --> 00:04:12,080 Speaker 3: that it's going to be an issue. 78 00:04:12,160 --> 00:04:12,280 Speaker 4: Right. 79 00:04:12,320 --> 00:04:14,920 Speaker 3: Abortion is definitely going to be something that has been 80 00:04:14,960 --> 00:04:18,000 Speaker 3: talked about during the Democratic Convention. That's something that President 81 00:04:18,000 --> 00:04:20,839 Speaker 3: Trump has been asked about and will continue to be 82 00:04:20,920 --> 00:04:23,240 Speaker 3: asked about there. But I think when you look at 83 00:04:23,279 --> 00:04:26,440 Speaker 3: most of these issues, you're looking at the economy, inflation, 84 00:04:26,839 --> 00:04:31,440 Speaker 3: the southern border, and the fentanyl crisis that, sadly, our 85 00:04:31,480 --> 00:04:33,279 Speaker 3: country has been experiencing over the last. 86 00:04:33,080 --> 00:04:37,000 Speaker 2: Eight How strong is the backlash to that decision by 87 00:04:37,040 --> 00:04:41,040 Speaker 2: the Supreme Court in twenty twenty two to overturn Roe 88 00:04:41,120 --> 00:04:43,320 Speaker 2: versus Waight. Is this an issue that's going to hurt 89 00:04:43,320 --> 00:04:43,960 Speaker 2: Donald Trump. 90 00:04:45,360 --> 00:04:47,720 Speaker 3: I don't know, because you know, I think President Trump 91 00:04:47,760 --> 00:04:49,960 Speaker 3: has answered this question in terms of where he feels 92 00:04:49,960 --> 00:04:52,560 Speaker 3: on the States and also kind of some of the 93 00:04:52,680 --> 00:04:56,720 Speaker 3: early term abortion measures that were discussed there. So I 94 00:04:56,760 --> 00:04:59,719 Speaker 3: don't know necessarily how much it actually hurts President Trump 95 00:04:59,760 --> 00:05:02,800 Speaker 3: when you look at actually the swing states that will matter. 96 00:05:02,880 --> 00:05:05,080 Speaker 3: But it's a question that he has been asked, he'll 97 00:05:05,400 --> 00:05:08,000 Speaker 3: continue to be asked. I think his answer had been 98 00:05:08,080 --> 00:05:10,560 Speaker 3: very very clear run and I think he also continues 99 00:05:10,600 --> 00:05:14,120 Speaker 3: to point out how different the Democratic platform on abortion 100 00:05:14,279 --> 00:05:16,839 Speaker 3: used to look like. When one of the keynote speakers 101 00:05:16,839 --> 00:05:19,400 Speaker 3: from tonight, Bill Clinton, was running for president, I remember 102 00:05:19,480 --> 00:05:22,640 Speaker 3: him saying that abortion should be legal, safe, and rare. 103 00:05:22,800 --> 00:05:26,839 Speaker 3: That's very, very different than the standard Democratic position right now, 104 00:05:26,880 --> 00:05:30,160 Speaker 3: which is legal and acceptable through nine and a half 105 00:05:30,279 --> 00:05:32,920 Speaker 3: months and encouraged in many situations. 106 00:05:33,360 --> 00:05:37,520 Speaker 2: It's interesting because center left Democrats are framing the Harris 107 00:05:37,560 --> 00:05:40,840 Speaker 2: Walls ticket as moderate, and yet it's a ticket that 108 00:05:40,920 --> 00:05:44,560 Speaker 2: has been called communist and Marxist by Donald Trump. 109 00:05:44,760 --> 00:05:45,960 Speaker 1: How do you see the ticket. 110 00:05:47,240 --> 00:05:49,440 Speaker 3: I think it's highly progressive. I think when you look 111 00:05:49,440 --> 00:05:54,560 Speaker 3: at what Kamala Harrison. She's certainly had changes on her 112 00:05:54,600 --> 00:05:58,800 Speaker 3: platform of opinion over the last five weeks, it seems like, 113 00:05:59,120 --> 00:06:01,479 Speaker 3: but when you look at things that she's represented, the 114 00:06:01,480 --> 00:06:05,520 Speaker 3: way that Governor Waltz has governed some of the strongest 115 00:06:05,520 --> 00:06:10,440 Speaker 3: COVID lockdowns in the country under his on his watch. 116 00:06:10,440 --> 00:06:14,600 Speaker 3: When you look at some of the crime rising in Minneapolis, 117 00:06:14,680 --> 00:06:18,800 Speaker 3: Minnesota while he's been governor, I think it's a very 118 00:06:18,880 --> 00:06:24,360 Speaker 3: very progressive ticket. Obviously, I think you'll have Democrats paint 119 00:06:24,400 --> 00:06:28,280 Speaker 3: this as center left, but I think it's pretty hard 120 00:06:28,360 --> 00:06:30,840 Speaker 3: left when you look at the actual position. 121 00:06:32,839 --> 00:06:34,880 Speaker 2: All Right, Andrew, thank you very much for taking out 122 00:06:34,920 --> 00:06:37,200 Speaker 2: the time to be with us. We always enjoy the session. 123 00:06:37,240 --> 00:06:41,680 Speaker 2: Andrew Giliani, former special assistant to former President Donald Trump 124 00:06:41,920 --> 00:06:45,000 Speaker 2: and also a former candidate for a governor of New York. 125 00:06:49,360 --> 00:06:54,560 Speaker 4: Bloomberg Opinion Informed Perspectives an expert, data driven commentary on 126 00:06:54,720 --> 00:06:55,440 Speaker 4: breaking news. 127 00:06:56,960 --> 00:06:59,440 Speaker 2: It is nine forty three pm on Wall Street. Time 128 00:06:59,480 --> 00:07:02,160 Speaker 2: to check in with Bloomberg Opinion were joined by opinion 129 00:07:02,240 --> 00:07:06,120 Speaker 2: columnist Barbara McQuaid. She's professor at the University of Michigan 130 00:07:06,200 --> 00:07:09,600 Speaker 2: Law School. In her column, she wrote recently about how 131 00:07:09,680 --> 00:07:13,600 Speaker 2: Kamala Harris has been using her prosecutor background to contrast 132 00:07:13,640 --> 00:07:18,000 Speaker 2: herself with Donald Trump. Tell us how you define that contrast. 133 00:07:19,520 --> 00:07:21,640 Speaker 5: Well, I think one of the things that we hear 134 00:07:21,800 --> 00:07:26,400 Speaker 5: so often is that one group is tough on crime 135 00:07:26,880 --> 00:07:30,480 Speaker 5: and that their opponent is weak on crime. And Kamala 136 00:07:30,520 --> 00:07:34,960 Speaker 5: Harris literally wrote the book on why that is a 137 00:07:35,000 --> 00:07:39,360 Speaker 5: false choice, that you can be thoughtful on crime. The 138 00:07:39,400 --> 00:07:41,560 Speaker 5: title of her book was actually called Smart on Crime. 139 00:07:41,600 --> 00:07:45,280 Speaker 5: And when I worked as a US attorney during the 140 00:07:45,280 --> 00:07:50,000 Speaker 5: Obama administration, we actually adopted many of those policies and 141 00:07:50,080 --> 00:07:53,680 Speaker 5: saw a reduction in the crime rate as well as 142 00:07:53,720 --> 00:07:57,400 Speaker 5: a reduction in incarceration. So I think that she can 143 00:07:57,480 --> 00:08:01,120 Speaker 5: really stand on that record in a way that is 144 00:08:01,160 --> 00:08:04,600 Speaker 5: effective as opposed to relying on, you know, kind of 145 00:08:04,720 --> 00:08:05,480 Speaker 5: cheap rhetoric. 146 00:08:06,960 --> 00:08:11,680 Speaker 6: Crime statistics though pretty easy to mine for cheap rhetoric, though, right, 147 00:08:11,960 --> 00:08:14,000 Speaker 6: I mean many as the policeman who said to me 148 00:08:14,080 --> 00:08:16,000 Speaker 6: or policewoman who said, well, look, we're not sure if 149 00:08:16,080 --> 00:08:19,040 Speaker 6: crime's rising or falling, or if it's reports of crime 150 00:08:19,080 --> 00:08:22,200 Speaker 6: that's rising or falling. This really fertile ground here. 151 00:08:22,160 --> 00:08:25,280 Speaker 5: Right, absolutely, And you know it's something that we see 152 00:08:25,280 --> 00:08:30,360 Speaker 5: so often in political campaigns with scare tactics and fear mongering, 153 00:08:30,400 --> 00:08:34,760 Speaker 5: because you can always find one awful example of a 154 00:08:34,840 --> 00:08:38,160 Speaker 5: crime of you know, someone a judge gave a second 155 00:08:38,280 --> 00:08:41,480 Speaker 5: chance to, or somebody who came and committed some horrific crime, 156 00:08:42,240 --> 00:08:44,439 Speaker 5: and then you know, put it at the feet of 157 00:08:44,480 --> 00:08:46,559 Speaker 5: your rival and say, you know, this is the kind 158 00:08:46,600 --> 00:08:50,320 Speaker 5: of world Kennidy X wants to live in. But I 159 00:08:50,360 --> 00:08:53,200 Speaker 5: think that if we can get past the soundbites and 160 00:08:53,240 --> 00:08:55,280 Speaker 5: the memes and some of those kinds of things and 161 00:08:55,360 --> 00:08:57,760 Speaker 5: really dig into the data. You know, crime rates have 162 00:08:57,880 --> 00:09:01,240 Speaker 5: been trending steadily down word in the United States in 163 00:09:01,280 --> 00:09:04,559 Speaker 5: recent years. You might not know it because of some 164 00:09:04,679 --> 00:09:09,320 Speaker 5: of the rhetoric about our crime riddled cities and other things. Certainly, 165 00:09:09,400 --> 00:09:13,040 Speaker 5: crime is too high. Any crime is higher than we 166 00:09:13,120 --> 00:09:15,760 Speaker 5: want it to be. But you know, there are evidence 167 00:09:15,800 --> 00:09:19,480 Speaker 5: based strategies that have been useful and successful in many 168 00:09:19,480 --> 00:09:21,840 Speaker 5: parts of the country. There was one that we did 169 00:09:21,840 --> 00:09:23,960 Speaker 5: in Detroit that was based on the Smart on Crime 170 00:09:24,000 --> 00:09:27,240 Speaker 5: strategy called Project Ceasefire, and it is focusing on the 171 00:09:27,280 --> 00:09:31,160 Speaker 5: people who actually use guns to kill people, people who 172 00:09:31,200 --> 00:09:36,680 Speaker 5: are in street gangs. And so the program required members 173 00:09:36,720 --> 00:09:38,760 Speaker 5: of street gangs to come in as a condition of 174 00:09:38,800 --> 00:09:42,080 Speaker 5: parole or probation, And there was a carrot and a stick. 175 00:09:42,160 --> 00:09:45,960 Speaker 5: The carrot was, if you put down your guns, there 176 00:09:46,000 --> 00:09:48,560 Speaker 5: are programs available to you. You can get jobs, you 177 00:09:48,559 --> 00:09:53,000 Speaker 5: can get drug treatment, you can have other opportunities for 178 00:09:54,240 --> 00:09:58,000 Speaker 5: becoming an active and productive citizen in society. But here's 179 00:09:58,040 --> 00:10:01,880 Speaker 5: the stick, here's your criminal record. If you commit another 180 00:10:02,080 --> 00:10:05,559 Speaker 5: crime with a gun, you will be prioritized for swift 181 00:10:05,559 --> 00:10:10,240 Speaker 5: and swift enforcement. And in the neighborhoods where that program operated, 182 00:10:10,280 --> 00:10:14,680 Speaker 5: we saw a dramatic decrease in gang shootings. And so 183 00:10:15,040 --> 00:10:17,319 Speaker 5: there are thoughtful ways about this, and Kamala Harris has 184 00:10:17,320 --> 00:10:20,520 Speaker 5: really pioneered those in her work as a prosecutor, and 185 00:10:20,720 --> 00:10:22,200 Speaker 5: she really ought to tout that work. 186 00:10:22,240 --> 00:10:25,000 Speaker 2: I think, Barbara, when we look at the heartland and 187 00:10:25,040 --> 00:10:27,360 Speaker 2: we look at the South, you know, when they talk 188 00:10:27,400 --> 00:10:30,760 Speaker 2: about the economy, the US economy is actually doing pretty well, 189 00:10:30,800 --> 00:10:32,800 Speaker 2: but for people in the heartland in the South, they 190 00:10:32,800 --> 00:10:38,240 Speaker 2: feel that it's terrible for crime. We understand that the 191 00:10:39,160 --> 00:10:41,400 Speaker 2: numbers are that crime has come down. Violent crime in 192 00:10:41,440 --> 00:10:44,280 Speaker 2: particular has come down over a considerable period of time. 193 00:10:44,280 --> 00:10:46,880 Speaker 2: But if you ask people in the heartland and the South, 194 00:10:46,880 --> 00:10:48,679 Speaker 2: they feel as so crime is out of control. 195 00:10:50,160 --> 00:10:51,760 Speaker 1: How can we get at that disconnect? 196 00:10:53,040 --> 00:10:56,040 Speaker 5: Yeah, I think it's important part of messaging and an 197 00:10:56,040 --> 00:10:59,480 Speaker 5: important part of sharing information with people. You know, there 198 00:10:59,559 --> 00:11:04,480 Speaker 5: are politicians who will use fear as a way to 199 00:11:04,600 --> 00:11:06,920 Speaker 5: campaign and try to win hearts and minds and let 200 00:11:07,000 --> 00:11:10,559 Speaker 5: people believe that crime is on the rise, especially crimes 201 00:11:10,559 --> 00:11:13,920 Speaker 5: committed by immigrants. I think we certainly have an immigration 202 00:11:14,120 --> 00:11:16,760 Speaker 5: challenge in this country, and from time to time we 203 00:11:16,800 --> 00:11:19,720 Speaker 5: do see crimes committed by immigrants, but actually the number 204 00:11:19,720 --> 00:11:25,320 Speaker 5: of crimes committed as a percentage by immigrants is less 205 00:11:25,360 --> 00:11:27,640 Speaker 5: than crimes committed by non immigrants, and so I think 206 00:11:28,000 --> 00:11:32,560 Speaker 5: providing data for that information can be very important. 207 00:11:34,200 --> 00:11:36,280 Speaker 6: Barbara, A lot of what you're saying does make sense, 208 00:11:36,320 --> 00:11:40,160 Speaker 6: but at the same time it's a nuanced argument, and 209 00:11:40,600 --> 00:11:43,000 Speaker 6: I think election campaigns in the modern era don't really 210 00:11:43,000 --> 00:11:45,280 Speaker 6: favor nuance. How do you get this message to cut 211 00:11:45,320 --> 00:11:46,400 Speaker 6: through with voters? 212 00:11:47,200 --> 00:11:47,400 Speaker 3: Yeah? 213 00:11:47,480 --> 00:11:50,080 Speaker 5: So interesting, isn't it. Here we are with more information 214 00:11:50,160 --> 00:11:53,120 Speaker 5: than ever at our fingertips, the ability to go on 215 00:11:53,160 --> 00:11:56,239 Speaker 5: the Internet and find the answers to all manner of questions, 216 00:11:56,559 --> 00:11:59,160 Speaker 5: and yet in some ways we are more simplistic than 217 00:11:59,160 --> 00:12:03,560 Speaker 5: ever easy. It's difficult because so often in campaigns we 218 00:12:03,600 --> 00:12:09,200 Speaker 5: hear slogans, pithy little lines. We see memes on social 219 00:12:09,240 --> 00:12:13,160 Speaker 5: media reduced to two hundred naedy characters, and so that's difficult. 220 00:12:13,440 --> 00:12:16,040 Speaker 5: You know, I'm not a communications specialist, but I do 221 00:12:16,080 --> 00:12:18,959 Speaker 5: think that is the challenge that Kamala Harris has, is 222 00:12:19,000 --> 00:12:22,880 Speaker 5: to make sure the public understands her record and understands 223 00:12:22,920 --> 00:12:26,840 Speaker 5: what's happening with crime today. It's not easy, especially when 224 00:12:26,880 --> 00:12:32,200 Speaker 5: you've got people trafficking in disinformation, false claims about statistics 225 00:12:32,240 --> 00:12:34,560 Speaker 5: and data. And so I think that we have to 226 00:12:34,840 --> 00:12:38,840 Speaker 5: not only see Kamala Harris herself speak about these things, 227 00:12:39,120 --> 00:12:42,400 Speaker 5: but rely on trusted ambassadors to get the message out there. 228 00:12:42,840 --> 00:12:45,439 Speaker 2: All right, thanks so much for joining us, Barbara, Bloomberg 229 00:12:45,440 --> 00:12:47,880 Speaker 2: Opinion Collum, Miss Barbara McQuaid. You can read more on 230 00:12:47,920 --> 00:12:51,360 Speaker 2: this and her other stories from Bloomberg Opinion, at Bloomberg 231 00:12:51,440 --> 00:12:54,360 Speaker 2: dot com, slash Opinion and on the terminal by. 232 00:12:54,280 --> 00:12:56,240 Speaker 1: Typing opin go. 233 00:13:04,800 --> 00:13:07,760 Speaker 2: My Brian Curtis, along with Paul Allen and Johnny Is 234 00:13:07,760 --> 00:13:10,800 Speaker 2: now on the program. Is Harold Vanderlind, head of Asia 235 00:13:10,840 --> 00:13:15,600 Speaker 2: Pacific Equity Strategy at HSBC. I'm not sure, Harold, where 236 00:13:15,600 --> 00:13:19,200 Speaker 2: you'd like to start, whether it's China, Japan, or you know, 237 00:13:19,280 --> 00:13:21,480 Speaker 2: some of the other markets, But how do you like 238 00:13:21,520 --> 00:13:22,600 Speaker 2: the environment at the moment? 239 00:13:24,040 --> 00:13:27,959 Speaker 4: Yeah, I know, Hey, good morning, good morning. Where do 240 00:13:28,040 --> 00:13:28,480 Speaker 4: we start? 241 00:13:29,040 --> 00:13:31,960 Speaker 7: Maybe we start with with with what the fell is doing, 242 00:13:32,120 --> 00:13:34,240 Speaker 7: what they're doing to the Japanese yen, Right, So we've 243 00:13:34,280 --> 00:13:38,960 Speaker 7: seen in Japan that that that that particular trade, that 244 00:13:39,080 --> 00:13:42,320 Speaker 7: carried trade, that weakening of the end, that story seems 245 00:13:42,320 --> 00:13:44,800 Speaker 7: to be over. Now over the summer, the yen is 246 00:13:44,840 --> 00:13:46,960 Speaker 7: significantly strengthened. That will take a bit of a sting 247 00:13:47,000 --> 00:13:50,000 Speaker 7: out of the earnings in Japan. And the question then 248 00:13:50,080 --> 00:13:52,640 Speaker 7: really is where does that money go to in the region, 249 00:13:52,679 --> 00:13:57,040 Speaker 7: And is China going to be attractive enough to absorb that. 250 00:13:57,000 --> 00:13:59,840 Speaker 4: Money or does it leave Asia and go somewhere else. 251 00:14:01,040 --> 00:14:04,680 Speaker 6: Yeah, the end has significantly strengthened, but still by historical 252 00:14:04,760 --> 00:14:09,160 Speaker 6: standards one forty five not particularly strong. How much stronger 253 00:14:09,200 --> 00:14:10,199 Speaker 6: do you think it's going to get? 254 00:14:11,760 --> 00:14:11,960 Speaker 4: Yeah? 255 00:14:12,040 --> 00:14:14,319 Speaker 7: I mean what we've seen, of course now is that 256 00:14:14,320 --> 00:14:16,200 Speaker 7: there's a reset in expectations. 257 00:14:16,280 --> 00:14:16,480 Speaker 4: Right. 258 00:14:16,520 --> 00:14:19,520 Speaker 7: The Japanese have raised interest rates, now they've cooled off 259 00:14:19,520 --> 00:14:20,360 Speaker 7: a little bit from that. 260 00:14:20,880 --> 00:14:23,360 Speaker 4: The fact that you guys have been talking about. 261 00:14:23,160 --> 00:14:27,720 Speaker 7: Is ready to cut interest rates quite quite soon, So 262 00:14:27,760 --> 00:14:31,360 Speaker 7: that interest rate differential is going to narrow and narrowing 263 00:14:31,360 --> 00:14:33,200 Speaker 7: a little bit faster than what we thought, say a 264 00:14:33,280 --> 00:14:36,640 Speaker 7: month ago. That's because the Japanese were raising interest rate 265 00:14:36,680 --> 00:14:38,240 Speaker 7: a bit faster and some of the data that comes 266 00:14:38,240 --> 00:14:40,320 Speaker 7: out of the US is a bit weaker as well. 267 00:14:40,400 --> 00:14:42,360 Speaker 7: So the yen has strengthened on the back of that. 268 00:14:42,680 --> 00:14:44,320 Speaker 7: On a relative basis, looks a bit better. 269 00:14:44,600 --> 00:14:45,200 Speaker 4: But you're right. 270 00:14:45,720 --> 00:14:47,920 Speaker 7: Actually have a colleague of mine who went to Japan 271 00:14:47,960 --> 00:14:51,520 Speaker 7: for holiday, but this is eight months ago, and her 272 00:14:51,640 --> 00:14:54,680 Speaker 7: average buying price of the yena that I was around one. 273 00:14:54,640 --> 00:14:57,520 Speaker 4: Forty five, and that's what we back at right now. 274 00:14:58,320 --> 00:15:01,680 Speaker 7: Ken it strengthens further, I think there's probably offside risk, 275 00:15:01,720 --> 00:15:05,560 Speaker 7: but we've seen quite some strength already, so I suspect 276 00:15:05,600 --> 00:15:09,400 Speaker 7: any further strength will will need further confirmation that that 277 00:15:09,480 --> 00:15:11,880 Speaker 7: interest rate differential is narrowing. So not we'll take a 278 00:15:11,920 --> 00:15:15,280 Speaker 7: little bit of time. But still it impacts earnings for 279 00:15:15,400 --> 00:15:18,720 Speaker 7: the exporters. This is one five is a different story 280 00:15:18,760 --> 00:15:19,520 Speaker 7: than one sixty. 281 00:15:20,520 --> 00:15:24,200 Speaker 2: Harold, you're sticking with your overweight on mainland China. I'm 282 00:15:24,240 --> 00:15:27,640 Speaker 2: curious whether ornight you see some sort of catalyst that 283 00:15:27,760 --> 00:15:30,920 Speaker 2: might lead to a change, because it's it's been a 284 00:15:30,960 --> 00:15:32,000 Speaker 2: long tough period. 285 00:15:33,320 --> 00:15:36,160 Speaker 4: Yeah. No, it's a very brave calls. Let's put it 286 00:15:36,240 --> 00:15:38,880 Speaker 4: like that. When we put that call. 287 00:15:38,720 --> 00:15:40,640 Speaker 7: On in the beginning of the year, we said, listen, 288 00:15:40,680 --> 00:15:45,720 Speaker 7: there's a rebalancing in markets taking place, and therefore China 289 00:15:45,720 --> 00:15:47,960 Speaker 7: can do well. And it did that well in say, 290 00:15:48,000 --> 00:15:52,320 Speaker 7: what was it, February, March April, and we thought that 291 00:15:52,560 --> 00:15:54,800 Speaker 7: maybe there was going to be some policy support that 292 00:15:54,880 --> 00:15:58,240 Speaker 7: were initial green shoots to the property market. 293 00:15:58,480 --> 00:16:01,880 Speaker 4: But in particular, if you look at the amount of deposits. 294 00:16:01,240 --> 00:16:06,320 Speaker 7: In Chinese banks by households, it is massive Chinese households, 295 00:16:06,520 --> 00:16:09,800 Speaker 7: you can really understand why they're not buying property. They've 296 00:16:09,960 --> 00:16:13,600 Speaker 7: left the stock market, they are uncertain of their future, 297 00:16:13,640 --> 00:16:16,560 Speaker 7: so they've put a lot of money simply in bank deposits. 298 00:16:16,800 --> 00:16:18,960 Speaker 7: But at the moment they're not making any money there, 299 00:16:19,040 --> 00:16:21,520 Speaker 7: and you see that they're starting to take on risks. 300 00:16:21,800 --> 00:16:24,080 Speaker 7: They put some money in bond funds, but you're not 301 00:16:24,120 --> 00:16:27,200 Speaker 7: really making money there any either, because these bund yards 302 00:16:27,240 --> 00:16:29,720 Speaker 7: are fallen. So the next step is will they put 303 00:16:29,760 --> 00:16:32,720 Speaker 7: some money in, for example, equities now you need a 304 00:16:32,720 --> 00:16:35,480 Speaker 7: catalyst for that, and I'll be very frank it's very 305 00:16:35,520 --> 00:16:37,800 Speaker 7: difficult to identify that catalyst. They need to have some 306 00:16:37,880 --> 00:16:41,160 Speaker 7: confidence that things are improving. And those green shoots in 307 00:16:41,200 --> 00:16:45,000 Speaker 7: the property market, they were there in kind of July, 308 00:16:45,200 --> 00:16:49,200 Speaker 7: but they're not really there in August. So it's a 309 00:16:49,200 --> 00:16:50,160 Speaker 7: bit of a waiting game. 310 00:16:51,320 --> 00:16:55,640 Speaker 6: A waiting game. And while you're waiting, do you selectively add. 311 00:16:57,520 --> 00:16:58,200 Speaker 4: To China? 312 00:17:00,520 --> 00:17:04,679 Speaker 7: I think overall, I'm happy where we are. I wouldn't 313 00:17:04,720 --> 00:17:09,440 Speaker 7: necessarily add. What I would be looking at is rotation 314 00:17:09,920 --> 00:17:12,040 Speaker 7: or We're now in the middle of a reporting season 315 00:17:12,359 --> 00:17:15,639 Speaker 7: that we see confirmation that burnings and certain sectors is 316 00:17:15,640 --> 00:17:19,840 Speaker 7: doing okay. So we've seen, for example, some of the 317 00:17:19,640 --> 00:17:22,160 Speaker 7: year the internet the names coming through, so many earnings 318 00:17:22,160 --> 00:17:25,280 Speaker 7: were pretty okay. So then we have some confidence that 319 00:17:25,320 --> 00:17:29,000 Speaker 7: they're all that that that's okay, that's on track, So 320 00:17:29,040 --> 00:17:32,320 Speaker 7: we stick with that, and then you have to fork 321 00:17:32,359 --> 00:17:34,720 Speaker 7: out because the problem is where else in the rest 322 00:17:34,760 --> 00:17:36,600 Speaker 7: of the region do you go. We got and video 323 00:17:36,720 --> 00:17:38,760 Speaker 7: reporting on the twenty eight of August, so that's next 324 00:17:38,760 --> 00:17:42,520 Speaker 7: week and that will be kind of quite important for 325 00:17:42,680 --> 00:17:46,040 Speaker 7: Korea and Taiwan. And if those numbers are not against 326 00:17:46,080 --> 00:17:49,240 Speaker 7: market expectations. Then then then you're a little bit left 327 00:17:49,320 --> 00:17:51,480 Speaker 7: right in those markets as well. Now, of course Nvidia 328 00:17:51,480 --> 00:17:54,800 Speaker 7: can beat and suddenly we are back on the AI rally. 329 00:17:55,240 --> 00:17:58,240 Speaker 7: But there's a lot of moving parts here. So I 330 00:17:58,280 --> 00:18:00,960 Speaker 7: would say, just see how do you are unfolding. 331 00:18:01,720 --> 00:18:03,800 Speaker 2: Let's go back to the US because it's kind of 332 00:18:03,880 --> 00:18:06,879 Speaker 2: leading the rally and global equities. We did have jobs 333 00:18:06,920 --> 00:18:10,399 Speaker 2: revised down by around eight hundred thousand or so for 334 00:18:10,440 --> 00:18:13,119 Speaker 2: the twelve months through March. Now this is a number 335 00:18:13,200 --> 00:18:16,560 Speaker 2: that may lead the FED to act sooner rather than later, 336 00:18:16,880 --> 00:18:19,120 Speaker 2: but it may worry some people that jobs are going 337 00:18:19,160 --> 00:18:21,639 Speaker 2: to fall off and recession comes back into the picture. 338 00:18:22,080 --> 00:18:25,480 Speaker 2: So the rally for the moment in US equities, are 339 00:18:25,520 --> 00:18:27,119 Speaker 2: you renting it or buying it? 340 00:18:28,960 --> 00:18:33,200 Speaker 7: So for the moment, I we like the US equity markets, 341 00:18:33,240 --> 00:18:36,359 Speaker 7: and that's because we think those interest rates are going 342 00:18:36,400 --> 00:18:38,480 Speaker 7: to come down. We've already scenes in the bund jubs 343 00:18:38,480 --> 00:18:41,480 Speaker 7: that support its two equities. The earnings are holding up, 344 00:18:41,800 --> 00:18:43,520 Speaker 7: and we work in the assumption that. 345 00:18:43,320 --> 00:18:44,560 Speaker 4: That will continue. 346 00:18:44,680 --> 00:18:50,159 Speaker 7: But you're absolutely right, we've seen quite significant downward adjustments 347 00:18:50,160 --> 00:18:52,760 Speaker 7: and some of these numbers that came out early in 348 00:18:52,800 --> 00:18:56,280 Speaker 7: the year so it might well, it might well turn 349 00:18:56,359 --> 00:18:59,240 Speaker 7: out that actually that we find out in twelve months 350 00:18:59,280 --> 00:19:03,000 Speaker 7: time that while we're talking right now, that actually the 351 00:19:03,000 --> 00:19:05,639 Speaker 7: state of the economy is much weaker than anticipated. 352 00:19:06,320 --> 00:19:10,000 Speaker 4: And who knows what the earnings numbers then will look like. 353 00:19:10,840 --> 00:19:14,800 Speaker 7: But for the moment, there's risk to this, but I 354 00:19:14,880 --> 00:19:18,359 Speaker 7: don't see that risk to be sufficiently large to say no, no, 355 00:19:18,400 --> 00:19:21,320 Speaker 7: we don't do so, and the scope for rates to 356 00:19:21,359 --> 00:19:23,480 Speaker 7: decline is still quite substantial. 357 00:19:23,840 --> 00:19:24,600 Speaker 4: If we would be in. 358 00:19:24,560 --> 00:19:27,400 Speaker 7: A situation where we already cut interest rates by saying 359 00:19:27,920 --> 00:19:31,520 Speaker 7: two of the basis points and the numbers still continue 360 00:19:31,560 --> 00:19:33,720 Speaker 7: to come out very weak, then you have a different situation. 361 00:19:34,080 --> 00:19:36,720 Speaker 7: But we've got a lot of ammunition here, and it 362 00:19:36,760 --> 00:19:40,439 Speaker 7: doesn't look like the numbers are overly worrisome yet. 363 00:19:40,760 --> 00:19:45,440 Speaker 2: Harold vanderlind There, Head of Asia Pacific Equity Strategy at HSBC. 364 00:19:49,359 --> 00:19:53,320 Speaker 2: This is the Bloomberg Daybreak Asia podcast, bringing the stories, 365 00:19:53,400 --> 00:19:56,800 Speaker 2: making news and moving markets in the Asia Pacific. 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