WEBVTT - Surveillance: Get Used To Low U.S. Yields, Caron Says 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 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 --> 0:00:27.280 Bloomberg dot Com, and of course on the Bloomberg. Should 0:00:27.280 --> 0:00:30.480 we talk to somebody who actually manages real money? I mean, 0:00:30.520 --> 0:00:32.720 that's part of the charm of Bob Michael and others here. 0:00:32.920 --> 0:00:35.600 There's people that are strategists only, and then there's people 0:00:35.640 --> 0:00:40.280 that actually enjoy losing money when things go wrong. This 0:00:40.360 --> 0:00:42.960 dog log normal, I mean, Jim Karen join us in 0:00:43.080 --> 0:00:46.320 New York. Morgan Stanley Investment Management, Fixed Income Portfolio Manage 0:00:46.320 --> 0:00:48.600 to Jim, Great to see you. Let's talk about some 0:00:48.640 --> 0:00:50.440 of the challenges out there at the moment. Are you 0:00:50.440 --> 0:00:52.879 happy with some of the toad has been deployed? Um? 0:00:52.880 --> 0:00:55.240 Not not from the fat not so far. I mean 0:00:55.400 --> 0:00:58.240 interest rate cutting, interest rates, it's like you know, bringing 0:00:58.240 --> 0:00:59.920 a knife to a gunfight, you know at this point, 0:01:00.000 --> 0:01:02.320 because it's really about the credit markets. And you know, 0:01:02.360 --> 0:01:04.679 what we apply whenever these crisis events happen is what 0:01:04.680 --> 0:01:06.840 we call a triple A framework. And the triple A 0:01:06.880 --> 0:01:09.920 framework is affordability of credit, accessibility of credit, and then 0:01:10.000 --> 0:01:12.200 risk appetite. All three of these have to have to 0:01:12.200 --> 0:01:15.560 work together. Affordability, the FED can lower interest rates, and 0:01:15.640 --> 0:01:17.959 as as you're bringing up earlier, interest rates are actually 0:01:18.040 --> 0:01:20.440 lower for investment grade credit to day, so the borrowing 0:01:20.480 --> 0:01:24.679 costs is low and that's good. Um, the accessibility. Are 0:01:24.720 --> 0:01:27.640 the capital markets open? Are they able to issue their 0:01:27.680 --> 0:01:30.920 debt that needs to get going again? And then will 0:01:30.959 --> 0:01:34.160 people actually buy those bonds? Is the other question, Jim, 0:01:34.160 --> 0:01:36.360 How worries should I be about the small to medium 0:01:36.400 --> 0:01:39.920 sized enterprises? Otherwise viable business has gone through a really, 0:01:40.000 --> 0:01:42.959 really tough time right now. Can they make it to 0:01:43.000 --> 0:01:45.920 the middle of the year. Isn't that actually a big question? So, Jonathan, 0:01:45.959 --> 0:01:47.680 I'm glad you're talking about that. Not a lot of 0:01:47.680 --> 0:01:50.160 people are. That is the most important thing that we 0:01:50.160 --> 0:01:53.080 should talk about at this point. The large corporations and 0:01:53.200 --> 0:01:55.600 investment grade and all these indices, they can access to 0:01:55.640 --> 0:01:58.480 capital markets, plenty of liquidity. They have no problems. Small 0:01:58.480 --> 0:02:00.800 and midsized business. This is a life blood of the U. 0:02:00.880 --> 0:02:04.160 S economy. They employ six the people. This is jobs. 0:02:04.240 --> 0:02:06.760 Jobs feeds into consumption. Consumption feeds into g D p. 0:02:07.400 --> 0:02:10.960 What we need to see is more support mechanisms for 0:02:11.120 --> 0:02:13.919 these for these businesses to get bridge loans, because these 0:02:13.919 --> 0:02:15.600 are these are as. I like to say, these are 0:02:15.639 --> 0:02:18.560 ten thousand companies that borrow from ten thousand banks that 0:02:18.600 --> 0:02:21.080 you've never heard of, that really are the lifeblood. But 0:02:21.160 --> 0:02:23.120 Jim Karen, how do you do the X axis if 0:02:23.120 --> 0:02:26.040 we're talking about a medical event. I mean, to be fair, 0:02:26.480 --> 0:02:30.720 this virus could be good news, clear itself medically from 0:02:30.760 --> 0:02:34.160 a realological standpoint in weeks and we move on. I 0:02:34.240 --> 0:02:36.640 doubt that, but hey, that's one theory. How do you 0:02:36.680 --> 0:02:39.400 do the X axis of assistance to small business? Well, 0:02:39.440 --> 0:02:41.280 I think you overdo it to to make sure that 0:02:41.320 --> 0:02:43.680 we don't have a big problem. Right. So, so so 0:02:43.760 --> 0:02:45.320 the way that you do these things is you have 0:02:45.400 --> 0:02:47.160 to start to come up with these lending problems, Like 0:02:47.200 --> 0:02:49.960 the ECB has a nice toolkit to lend directly to 0:02:50.120 --> 0:02:53.280 these small and midsized enterprise. The way that it works, 0:02:53.600 --> 0:02:55.560 you know, for the FED is they may have to 0:02:55.600 --> 0:02:57.919 open up certain programs where they tell the big banks, 0:02:57.960 --> 0:03:00.400 like remember remember September two thousand, A team we had 0:03:00.400 --> 0:03:02.560 a big spike and repo rates. That's the big banks, 0:03:02.600 --> 0:03:04.320 not lending to the small banks, who then lent to 0:03:04.400 --> 0:03:07.000 the who then lent to small business. What we need 0:03:07.040 --> 0:03:10.160 to do is have some regulatory changes to make sure 0:03:10.240 --> 0:03:12.880 liquidity is flowing so that these small businesses can roll 0:03:12.919 --> 0:03:15.400 over their loans and these midsize and small banks can 0:03:15.400 --> 0:03:17.480 also continue to make these bridge loans and make sure 0:03:17.520 --> 0:03:20.600 that their backstop so that the credit can continue to flow. 0:03:20.960 --> 0:03:22.600 And if that, if that works over the next couple 0:03:22.639 --> 0:03:24.960 of months, we get through the virus, then we have 0:03:25.040 --> 0:03:28.040 a viable business to bounce back. If not, we don't 0:03:28.080 --> 0:03:30.440 have a viable business. This is critical. It's called building 0:03:30.440 --> 0:03:31.919 the bridge to get to the middle of the year. 0:03:32.120 --> 0:03:34.920 We've got a health shock, a health crisis. It will pass, 0:03:35.320 --> 0:03:37.560 and it probably will pass by the middle of this year. 0:03:38.040 --> 0:03:40.280 It all depends on what state these small and medium 0:03:40.320 --> 0:03:43.080 sized enterprises are actually in once we get there, and 0:03:43.080 --> 0:03:45.360 that will define the shape of the recovery. Absolutely that 0:03:45.400 --> 0:03:48.040 will define the upslope. I want to get my hands 0:03:48.040 --> 0:03:50.800 around the risk we face between now and then. If 0:03:50.840 --> 0:03:53.400 I don't see these tools deployed, are we talking about 0:03:53.480 --> 0:03:57.240 bankruptcys and sames? Are we talking about airlines going under? 0:03:57.680 --> 0:03:59.800 I don't want to lay on thick. This show has 0:03:59.840 --> 0:04:02.200 been really, really careful over the last couple of weeks, 0:04:02.240 --> 0:04:04.680 just to be very, very delicate about the position we're in. 0:04:04.840 --> 0:04:06.960 But I think that questions we need to ask you. Yeah, 0:04:07.000 --> 0:04:09.360 So so it goes back to risk, appetite and willingness 0:04:09.360 --> 0:04:11.200 to land. Right. So what we see here is that 0:04:11.360 --> 0:04:13.960 demand is not being destroyed, but it's being delayed. I mean, 0:04:14.000 --> 0:04:16.320 we we came into this event, you know, with relatively 0:04:16.360 --> 0:04:18.760 strong footing, and I think that most people would see 0:04:18.760 --> 0:04:21.200 this as a viable opportunity to make these loans to 0:04:21.240 --> 0:04:23.400 get people to the middle of the year, because it's 0:04:23.440 --> 0:04:25.159 gonna be a good it's gonna be a good investment, 0:04:25.200 --> 0:04:27.400 it's gonna be a good opportunity. So it's not like 0:04:27.440 --> 0:04:29.400 this is ah, this is an event that took place 0:04:29.400 --> 0:04:31.520 and we don't know what the end looks like. We 0:04:31.600 --> 0:04:33.040 believe that we do know what the end looks like. 0:04:33.080 --> 0:04:35.120 It's a question of the time and the passing the virus. 0:04:35.120 --> 0:04:37.880 Really important observation, John. This came after my six hour 0:04:38.000 --> 0:04:41.160 day yesterday. My last interview was with Alan Blinder of Princeton, 0:04:41.200 --> 0:04:44.240 the former vice chair and LISA vice chairman. Blinder was 0:04:44.440 --> 0:04:47.599 adamant Okay, it's a supply shock, it's a virus, but 0:04:47.680 --> 0:04:52.040 guess what, it's still a demand discussion, is Mr Karen mentioned? Well, absolutely, 0:04:52.080 --> 0:04:54.960 because whether people are going to travel matters with these 0:04:55.000 --> 0:04:57.360 companies and whether they're going to survive. I'm wondering there 0:04:57.400 --> 0:05:00.400 was so much discussion about lending moving away from banks 0:05:00.720 --> 0:05:05.280 to private equity, to private credit to smaller firms, and 0:05:05.400 --> 0:05:07.800 isn't this sort of stress testing them. Aren't they supposed 0:05:07.800 --> 0:05:10.360 to be swooping in here and actually fulfilling their function. 0:05:10.800 --> 0:05:13.240 So at least this is this is a good point here, right, 0:05:13.279 --> 0:05:16.880 So the regulatory environment has pushed these the banks out 0:05:16.880 --> 0:05:18.960 of that business and it's gone more to the private side, 0:05:18.960 --> 0:05:23.279 more to private equity and things like that to create financing. Well, 0:05:23.720 --> 0:05:25.920 these these guys are not the JP Morgan's, They're not 0:05:25.960 --> 0:05:28.000 the Bank of American's right there. Not the big banks 0:05:28.040 --> 0:05:29.960 that have to make these loans or that you can 0:05:30.000 --> 0:05:32.960 regulate to force them to make these loans. These are 0:05:33.040 --> 0:05:37.280 private entities. So the liquidity may not be asked forthcoming. 0:05:37.320 --> 0:05:40.279 But in some senses, some of these private equity firms 0:05:40.279 --> 0:05:42.960 have so much capital that's willing to deploy that they 0:05:42.960 --> 0:05:45.680 may do it on an opportunistic basis, but not on 0:05:45.720 --> 0:05:48.039 a regulatory, you know basis. So in other words, the 0:05:48.040 --> 0:05:51.920 FED loses control as the overall regulator of the banks 0:05:52.160 --> 0:05:56.120 to actually enact this policy. So it's really now up 0:05:56.120 --> 0:05:58.480 to the animal spirits to, you know, to actually take 0:05:58.480 --> 0:06:00.560 this on. There's also a question of how much time 0:06:00.600 --> 0:06:02.800 some of these businesses have until they run out of 0:06:02.839 --> 0:06:05.960 cash or face material debt maturities. Do we have a 0:06:05.960 --> 0:06:08.000 sense of that because in China there were statistics that 0:06:08.080 --> 0:06:11.000 a lot of companies, millions even could run out of 0:06:11.040 --> 0:06:13.360 cash in six days, right, So we don't We don't 0:06:13.360 --> 0:06:15.520 have good data on the small and midsized businesses, right 0:06:15.520 --> 0:06:17.719 because Wall Street typically you know, looks at large cap 0:06:17.760 --> 0:06:19.880 companies and that's and that's typically the way it goes. 0:06:20.120 --> 0:06:22.240 But what I do know is that more small in 0:06:22.320 --> 0:06:24.280 mid sized businesses. You know a lot of these a 0:06:24.360 --> 0:06:26.760 lot of these businesses put you know that they're working 0:06:26.760 --> 0:06:29.000 capitals their credit card, right, they put things on their 0:06:29.040 --> 0:06:30.640 credit card, they pay off their bills at the end 0:06:30.680 --> 0:06:32.320 of the month. So really what we have to start 0:06:32.320 --> 0:06:34.320 to look for is stresses maybe in some of the 0:06:34.360 --> 0:06:37.440 asset BacT markets that you know, the credit card markets 0:06:37.440 --> 0:06:40.080 and loan markets. In those ways, we have to start 0:06:40.120 --> 0:06:41.840 to be a little bit more creative to see how 0:06:41.880 --> 0:06:44.800 these small and midsized businesses access the credit markets and 0:06:44.839 --> 0:06:47.599 access liquidity. And that's what we need to be supportive of. 0:06:47.839 --> 0:06:49.279 So far, what I can tell you is I'm not 0:06:49.279 --> 0:06:51.479 seeing any stresses in the repo market, which is good, 0:06:51.680 --> 0:06:54.160 really really good news. So this is not looking like 0:06:54.160 --> 0:06:56.239 two thousand and eight. This is not a systemic event 0:06:56.320 --> 0:06:58.880 at this point. All I'm bringing up are the sign 0:06:58.920 --> 0:07:01.320 posts of risk that we should start to look at. Um. 0:07:01.400 --> 0:07:04.080 So far, so good, but we also have to start 0:07:04.120 --> 0:07:06.080 to look at some of the credit card data and 0:07:06.160 --> 0:07:08.400 some of the loan defaults and things like that in 0:07:08.440 --> 0:07:11.400 the smaller sized in the smaller size banks. Jim, let's 0:07:11.400 --> 0:07:13.480 talk about these markets and get a co from you. Ny. 0:07:13.640 --> 0:07:16.520 Basis points is the yield on the US tenure treasury? 0:07:16.520 --> 0:07:18.320 Should I get used to these kind of numbers now? 0:07:18.600 --> 0:07:20.600 The treasury market, I got used to it pretty quickly 0:07:20.600 --> 0:07:22.680 out from Germany and Europe and Japan. Do I need 0:07:22.680 --> 0:07:24.360 to get used to that hit in the United States? 0:07:24.520 --> 0:07:26.880 I think, sadly the answer is yes, especially if the 0:07:26.920 --> 0:07:29.720 FED by most economists now we're calling for another fifty 0:07:29.760 --> 0:07:32.560 basis point rate cut, you know, relatively soon. So if 0:07:32.560 --> 0:07:35.000 the Fed funds rates at you know, fifty basis points 0:07:35.000 --> 0:07:36.960 in you know, a couple of months time, or say 0:07:37.000 --> 0:07:39.840 maybe even weeks time. Um, Yeah, you're gonna be looking 0:07:39.880 --> 0:07:42.080 at the tenure note around one percent. Could the yield 0:07:42.080 --> 0:07:45.240 curve steep? And yes, Um, is inflation going to come 0:07:45.280 --> 0:07:47.920 back in any big way to to push longer term 0:07:48.000 --> 0:07:51.480 yield higher anytime soon? Probably not so. And if we're 0:07:51.480 --> 0:07:53.280 looking at higher yields, we have to look towards the 0:07:53.320 --> 0:07:55.280 second half of the year hard to see what the 0:07:55.320 --> 0:07:57.840 path of the virus actually takes. But the answer is 0:07:57.880 --> 0:08:00.520 absolutely these are just numbers, right, one percent not imagine 0:08:00.560 --> 0:08:02.960 it's just the number ninety bass point nine bays, But 0:08:03.240 --> 0:08:06.440 it's just a number. It could go lower, um, But 0:08:06.440 --> 0:08:08.560 but I think there are limitations before it starts to 0:08:08.560 --> 0:08:12.880 actually hurt the markets much. It's the fetes that imply, oh, absolutely, 0:08:12.920 --> 0:08:14.920 you think another twenty five. Well, I, you know, I 0:08:15.200 --> 0:08:17.120 can't make a call on whether they go twenty five 0:08:17.200 --> 0:08:18.800 or not. It's gonna depend on what's happening in all 0:08:18.800 --> 0:08:20.840 the other markets. But I I don't I don't rule 0:08:20.920 --> 0:08:23.240 that out. Jim Cannon to catch up near this morning 0:08:23.280 --> 0:08:27.000 moldering Stanley Investment Management Fixed Incomepan folio manager. The idea 0:08:27.080 --> 0:08:29.360 tell them that the fetty still implay after the fifty 0:08:29.560 --> 0:08:33.439 extraordinary absolute extrema weeks away. I love what Mr Karen said. 0:08:33.440 --> 0:08:35.400 They're about forget full faith and credit and look at 0:08:35.440 --> 0:08:39.040 the credit markets. Is the point over the next number 0:08:39.080 --> 0:08:44.559 of weeks headline across the Bloomberg. And this really shows 0:08:44.559 --> 0:08:48.120 not the specificity of cancelations, but there are two or 0:08:48.120 --> 0:08:51.840 three different pilgrimages in Saudi Arabia and the amra Is. 0:08:51.960 --> 0:08:55.800 It's it's considered like a secondary pilgrimage because it's not compulsory, 0:08:55.960 --> 0:08:59.359 but it's where anybody goes to Mecca. And they've canceled 0:08:59.760 --> 0:09:03.560 the entire omber pilgrimage moment in Saudi Arabia. That's a 0:09:03.559 --> 0:09:06.640 big deal. It's a broader statement than just canceling one 0:09:06.679 --> 0:09:10.079 specific thing like the I M Fringe series put together 0:09:10.080 --> 0:09:13.120 tho it's a series of gatherings that ultimately of being canceled. 0:09:13.520 --> 0:09:15.720 And this is playing into the economic impact, not just 0:09:15.760 --> 0:09:18.720 in the Middle Eas, not just in Asia, but all 0:09:19.040 --> 0:09:21.720 little perspective. This morning, as we bring in our good 0:09:21.720 --> 0:09:24.800 guest Howard Dean of Courses, Dr Dean of Albert Einstein 0:09:24.880 --> 0:09:27.560 Medical School, the former governor of Vermont, and he and 0:09:27.600 --> 0:09:30.599 I are of a vintage where we remember the extraordinary 0:09:30.640 --> 0:09:34.560 events of ninety two, which was George McGovern and I 0:09:34.559 --> 0:09:37.199 would point out Dr Dean that it was the six 0:09:37.320 --> 0:09:40.360 Amendment where it was guaranteed that the ut of America 0:09:40.440 --> 0:09:43.840 would show up and vote. They didn't show up yesterday, 0:09:43.880 --> 0:09:47.200 did they, Dr Dean? No, they didn't. And I'm stretching 0:09:47.200 --> 0:09:49.760 in my head and figuring out why. I've been reading 0:09:49.840 --> 0:09:52.840 Twitter as I often do, and there's a lot of 0:09:52.880 --> 0:09:55.840 young people on Twitter expressing disappointment because many of them 0:09:55.840 --> 0:09:58.720 are for Bernie, but they didn't vote. And I don't 0:09:58.800 --> 0:10:01.440 understand why. I don't get this. They have a candidate 0:10:01.480 --> 0:10:04.640 that's very exciting for them. It doesn't happen all the time. 0:10:04.800 --> 0:10:08.520 Young people elected Barack Obama in two thousand and eight, 0:10:08.880 --> 0:10:11.400 the only time in my lifetime where more people under 0:10:11.440 --> 0:10:14.120 thirty five voter than over sixty five. So I do 0:10:14.200 --> 0:10:18.240 not understand what's going on. I would suggest Vice President 0:10:18.360 --> 0:10:22.200 Biden is not doesn't have the former president's electricity of 0:10:22.280 --> 0:10:25.760 speaking and events and all that does Vice President by 0:10:26.040 --> 0:10:29.880 need the youth vote to defeat Donald Trump? I think 0:10:29.880 --> 0:10:35.080 he does. Um, we weren't party really is young, dark, 0:10:35.480 --> 0:10:37.680 and female. I mean, if you look at the Three 0:10:37.720 --> 0:10:40.880 Paths election in two thousand eighteen, two thousand seventeen in Virginia. 0:10:40.880 --> 0:10:46.920 In two thousand nineteen in Virginia, the legislators were transformed. Uh, 0:10:46.960 --> 0:10:49.160 and the average age I think of the Democratic Caucus 0:10:49.200 --> 0:10:52.120 went down about ten years in the single election in 0:10:52.160 --> 0:10:56.680 the House. So, but our core group is young, of color, 0:10:56.920 --> 0:11:00.000 and female, and so we need those groups to turn out. 0:11:00.080 --> 0:11:02.320 If those groups turn out, we went. If they don't 0:11:02.320 --> 0:11:04.839 turn out, we lose. It's just as simple as that. Well, 0:11:04.840 --> 0:11:07.080 how would let's talk about what was actually happening out 0:11:07.160 --> 0:11:09.560 the former Vice president Joe Biden. It was the African 0:11:09.600 --> 0:11:13.360 American vote overwhelmingly in his faith and now two months 0:11:13.400 --> 0:11:15.680 ago it fount like that would be the story. But 0:11:15.760 --> 0:11:17.880 eight days ago it felt like that maybe some of 0:11:17.920 --> 0:11:20.319 that was slipping. What has happened in the last seven days, 0:11:21.720 --> 0:11:24.160 It's not entirely clear, but it's more than the African 0:11:24.200 --> 0:11:26.600 American But the African American votes started all this in 0:11:26.640 --> 0:11:29.640 South Carolina, but donal throughout the South. He just got 0:11:29.800 --> 0:11:33.200 enormous numbers. And I can't conclude anything but this is 0:11:33.200 --> 0:11:36.199 this association with the only African American president we've ever 0:11:36.280 --> 0:11:39.200 had in this country. Um. But there's more to it 0:11:39.240 --> 0:11:44.400 than that. Uh to win in places like Texas. Uh 0:11:44.400 --> 0:11:48.640 and in Massachusetts, which is just shocking. In Minnesota that 0:11:48.800 --> 0:11:51.520 was not the African American vote that carried him. There 0:11:51.600 --> 0:11:55.120 was others. UM. I think some of this is just 0:11:55.400 --> 0:11:58.360 voters saying, look, we've had enough of the drama and 0:11:58.400 --> 0:12:01.600 the corruption and the every day Let's just get somebody 0:12:01.600 --> 0:12:04.040 who's we know. And even if it's Joe, who may 0:12:04.080 --> 0:12:06.480 not be that exciting when he showed he could win 0:12:06.520 --> 0:12:10.160 in South Carolina currently struck a struck a match. I. 0:12:10.160 --> 0:12:12.720 I've never seen anything like this in eleven decades, I 0:12:12.720 --> 0:12:16.000 mean eleven cycles. Here. Do you expect in the next 0:12:16.280 --> 0:12:19.600 four hours that this race goes down to two? No, 0:12:20.920 --> 0:12:23.600 Elizabeth is probably going to stay in. She thinks it's 0:12:23.600 --> 0:12:27.520 gonna be a broker convention and she can be the peacemaker. UM. 0:12:27.559 --> 0:12:29.839 I don't know what Mike Bloomberg is going to do, 0:12:29.920 --> 0:12:32.800 of course, Uh. I think he's considering his options. He 0:12:32.800 --> 0:12:34.360 has enough money to stay in as long as he 0:12:34.400 --> 0:12:37.040 wants to, and his goals are really broader than just 0:12:37.080 --> 0:12:40.720 becoming president. His ads have been absolutely fantastic in terms 0:12:40.760 --> 0:12:43.000 of ripping up Trump, and you know, he gets a 0:12:43.080 --> 0:12:45.360 great he gets it's a big discount on those ads 0:12:45.360 --> 0:12:47.880 as long as he's a candidate. So I have no 0:12:47.960 --> 0:12:49.880 idea what either one of them are going to do. 0:12:49.920 --> 0:12:52.160 And so far as I've assumed, it's going to be 0:12:52.160 --> 0:12:55.040 a four person race into the next big weekend, because 0:12:55.080 --> 0:12:57.280 I've been asked about this before and I've said repeatedly, 0:12:57.600 --> 0:13:01.200 we're not going to know until two weeks and the 0:13:01.200 --> 0:13:04.160 the next week is important to Michigan and big states 0:13:04.240 --> 0:13:06.920 like that. So this is not over by any speci 0:13:06.920 --> 0:13:11.040 of imagination. Yeah, and Dr Dean Michael Bloomberg has said 0:13:11.080 --> 0:13:13.640 he's come out and said, uh that the only way 0:13:13.640 --> 0:13:16.960 that he could win is in a contest, contested convention 0:13:17.240 --> 0:13:20.640 where the super delegates come together and meet Michael Bloomberg, 0:13:20.880 --> 0:13:23.200 founder and Geordie owner of Bloomberg LP. I'm wondering, from 0:13:23.240 --> 0:13:26.200 your perspective, what is the likelihood that we will get 0:13:26.200 --> 0:13:30.960 a candidate determined by a brokered convention which has not 0:13:31.000 --> 0:13:34.760 been used for decades, Not since nineteen fifty two. I 0:13:34.800 --> 0:13:39.200 think it's very unlikely. Um. Frankly, the optics is that 0:13:39.280 --> 0:13:42.400 are awful. Whoever the losing candidate would be in a 0:13:42.440 --> 0:13:45.440 broken convention with their supporters would have a very hard 0:13:45.480 --> 0:13:48.880 time getting behind the winner. Um. I just am not 0:13:49.080 --> 0:13:54.360 for brokered conventions. The super delegates has never elected a president. 0:13:54.360 --> 0:13:57.040 Has always been done without this help of the super delegates. 0:13:57.080 --> 0:14:01.480 Super delegates really are only there elect will attend the convention, 0:14:01.480 --> 0:14:03.720 which they didn't used to do until they were super delegates. 0:14:04.120 --> 0:14:07.679 Howard Dean, what kind of vice president does a seventies 0:14:07.679 --> 0:14:11.079 something year old gentleman from Delaware need? I mean, what's 0:14:11.240 --> 0:14:13.160 I mean? I know it's way too premature to talk 0:14:13.280 --> 0:14:17.360 vice president. What What's And Bernie has already said this. 0:14:17.400 --> 0:14:19.480 Bernie has said we cannot have two old white guys 0:14:19.480 --> 0:14:21.440 at the top of the ticket. He's absolutely right. I'm 0:14:21.440 --> 0:14:23.760 hoping we're gonna have a young woman of color on 0:14:23.840 --> 0:14:25.800 the ticket. I can think of a number in the 0:14:25.800 --> 0:14:29.600 governor of New Mexico is a Hispanic. As a Senator 0:14:29.640 --> 0:14:34.200 from Nevada, Stacy Abrams, of course, is highly well thought of. 0:14:34.680 --> 0:14:37.040 So there are plenty of well qualified women. I think 0:14:37.040 --> 0:14:39.160 it's important that we have a woman and I think 0:14:39.160 --> 0:14:42.600 it's probably what's your okay, great, but you know some 0:14:42.640 --> 0:14:45.200 people listening this would say you're gonna hand President Trump 0:14:45.240 --> 0:14:48.560 a second term. I mean, maybe that's President Trump's greatest hope. 0:14:48.880 --> 0:14:52.800 What is the evidence America will actually elect a woman 0:14:53.160 --> 0:14:56.720 as president or vice president? This is not just about winning, 0:14:56.720 --> 0:14:59.200 it's also about change in the country and if we 0:14:59.320 --> 0:15:01.520 have to be run fear of voters who won't vote 0:15:01.520 --> 0:15:04.320 for women, and this country is in deep trouble. All 0:15:04.360 --> 0:15:06.200 those people are already voting for Trump and we're not 0:15:06.240 --> 0:15:08.120 going to get their votes back. I've never thought that 0:15:08.200 --> 0:15:10.600 the way of winning this election is to take to 0:15:10.640 --> 0:15:13.040 a few Trump votes back. There will be some. The 0:15:13.080 --> 0:15:15.200 way of winning this election is to gin up our 0:15:15.280 --> 0:15:19.400 base like crazy and give young people, people of color, 0:15:19.440 --> 0:15:21.760 and women are reason to vote. Now, that's what's so 0:15:22.280 --> 0:15:26.360 disturbing about yesterday. That's really remarkable with Joe Biden did, 0:15:26.360 --> 0:15:29.480 but it's incredibly disturbing the young people didn't vote, and 0:15:29.520 --> 0:15:32.080 it didn't just hurt Bernie Sanders, that hurt everybody. It's 0:15:32.080 --> 0:15:34.600 sat or even having this conversation. I'm used to female 0:15:34.680 --> 0:15:37.360 leaders in the UK. We've had female prime ministers, we've 0:15:37.360 --> 0:15:42.360 had leading Dr Dean has got decades. It's a simple observation. 0:15:42.640 --> 0:15:45.760 I think it's satur revenues conversation. Howard, let's talk about 0:15:45.840 --> 0:15:47.920 drumming up the base. I thought the base was fired up. 0:15:47.920 --> 0:15:49.320 I thought it has been for the last three or 0:15:49.360 --> 0:15:51.040 four years. Have we got to get the guys in 0:15:51.080 --> 0:15:54.360 the middle. The guys in the middle are going to 0:15:54.520 --> 0:15:57.240 probably vote with us, especially with the candidate like buying 0:15:57.440 --> 0:16:01.160 because they're sick of Trump. But I don't again, I don't. 0:16:01.320 --> 0:16:03.800 I think you win races by firing up your base. 0:16:03.880 --> 0:16:07.600 That's how Obama one um, you know so, I I 0:16:07.640 --> 0:16:11.080 think that's the key. Now, the guys in the middle, 0:16:11.400 --> 0:16:13.840 you know, they'll they'll they make up their own decisions. Look, 0:16:13.840 --> 0:16:16.600 we can't stand for nothing as a party. I don't 0:16:16.640 --> 0:16:18.840 want to be like Jeremy Corban because that was obviously 0:16:18.880 --> 0:16:21.480 a disaster, but we do have to stand for something. 0:16:21.880 --> 0:16:25.240 Dr Dean. I have to wonder. One big question has 0:16:25.280 --> 0:16:28.560 been turnout and how much can we read into the 0:16:28.720 --> 0:16:32.880 levels of turnout that we've gotten within these uh these 0:16:32.920 --> 0:16:38.080 early votes A lot. I am stunned and thrilled with 0:16:38.200 --> 0:16:41.800 the turnout among African Americans were stunned and thrilled by 0:16:41.840 --> 0:16:46.560 Bernie's turnout in Nevada among Latinos. So this is clearly 0:16:47.400 --> 0:16:50.240 really important part. I'm not worried about turnout among people 0:16:50.240 --> 0:16:53.680 of color. I am worried about people young people. Uh. 0:16:53.720 --> 0:16:56.360 And this is that yesterday's result made me, makes me 0:16:56.520 --> 0:16:58.280 very nervous, and I think we have some work to do. 0:16:58.440 --> 0:17:00.840 How do we greatly value your Thank you so much? 0:17:00.840 --> 0:17:06.040 He's a former chairman of the d n C. The 0:17:06.160 --> 0:17:09.240 consensus for the private sector Friday is a hundred and 0:17:09.280 --> 0:17:12.280 sixty thousand. I love this. We can just about throw 0:17:12.359 --> 0:17:15.840 that out the window too. So there you go from 0:17:16.440 --> 0:17:19.200 Peter book far to get an excellence on which part 0:17:19.240 --> 0:17:21.159 of this we should throw out the window, we go 0:17:21.240 --> 0:17:24.840 to Julia Cornado, of course, how to give us perspective? Julie, 0:17:24.880 --> 0:17:27.679 I thought of you yesterday, I mean the historic moment 0:17:28.280 --> 0:17:32.200 of an emergency FED rate cut, with your work at 0:17:32.200 --> 0:17:35.840 the FED and with your wonderful academics at Texas, how 0:17:35.880 --> 0:17:39.960 did you frame the historical moment of that fifty basis 0:17:39.960 --> 0:17:44.479 point cut? Well? Come, it was, you know, we had 0:17:44.640 --> 0:17:47.920 anticipated and given the signal of the G seven call, 0:17:48.320 --> 0:17:52.320 we thought they wouldn't want to not deliver um. It's 0:17:52.359 --> 0:17:57.399 it's I think we saw the market reaction was not Uh, 0:17:57.640 --> 0:18:00.800 it's a panasy monetary policy in this situation is not 0:18:00.800 --> 0:18:05.600 going to fix the problem. The laryngitis at your fighting fighting, Julia, 0:18:05.720 --> 0:18:09.320 is it kinesiean or monitorist laryngitis? Well, but I'm hoping 0:18:09.359 --> 0:18:13.800 he's not coronavirus. Well, we'll get a test it. We'll 0:18:13.800 --> 0:18:16.960 get official surveillance test kit for your Thank you for 0:18:17.000 --> 0:18:18.720 being a trooper and being out with us. Let's go 0:18:18.800 --> 0:18:21.600 here a bit more dr Coronado and then we'll cut 0:18:21.600 --> 0:18:24.320 it short so you can go have a drama scotch 0:18:24.359 --> 0:18:27.320 to get through the morning. Julia. When we when we 0:18:27.359 --> 0:18:29.919 look at the economics of the moment, how do you 0:18:29.960 --> 0:18:34.600 extrapolate forward? I mean, your timeline becomes so changed. How 0:18:34.640 --> 0:18:37.240 do you look forward one week or to the Friday 0:18:37.320 --> 0:18:41.520 jobs report or even at one quarter. Well, as you mentioned, 0:18:41.560 --> 0:18:43.680 the job report is going to be a little bit stale. 0:18:44.320 --> 0:18:47.080 Um and you know, the sectors that we're gonna look 0:18:47.119 --> 0:18:50.840 for in the coming months will be say, leisure and hospitality, travel. 0:18:51.560 --> 0:18:54.560 These sectors are going to be tremendously hit in the 0:18:54.600 --> 0:18:58.520 next few months, both in spending probably bleeding into hiring. 0:18:59.000 --> 0:19:01.040 So we are going to see us slowdown in activity 0:19:01.040 --> 0:19:04.200 in Q two. We're going to say this in claims 0:19:04.359 --> 0:19:05.919 in the next couple of weeks that claims are going 0:19:05.960 --> 0:19:08.439 to start to lift a little bit high. Here, we 0:19:08.480 --> 0:19:11.879 could probably see a little lifting claims. Yes, Um, you know, 0:19:12.320 --> 0:19:14.160 we think about the sectors that are going to be hit. 0:19:14.640 --> 0:19:16.560 Some of these people aren't going to be eligible for 0:19:16.600 --> 0:19:19.840 an unemployment insurance. You're going to see probably the hourly 0:19:19.880 --> 0:19:23.840 workers get laid off first. So um, it may not 0:19:23.960 --> 0:19:27.840 show up in entirely in claims, but you you know, 0:19:27.880 --> 0:19:30.199 you you probably would expect a little bit of a 0:19:30.240 --> 0:19:32.520 lifting claims. Yes, Junia, it's been such a big focus 0:19:32.520 --> 0:19:34.119 of this program over the last couple of weeks. How 0:19:34.160 --> 0:19:36.520 do we support the small and medium sized enterprises to 0:19:36.560 --> 0:19:38.840 make sure they don't have to lay off people for 0:19:38.920 --> 0:19:42.040 what could be just a temporary economic shock. How do 0:19:42.119 --> 0:19:45.639 we do that? That's really a fiscal question. I mean, 0:19:45.720 --> 0:19:48.960 we really need a coordinated fiscal response here. We need 0:19:49.240 --> 0:19:53.760