Speaker 1: Hey, we know investors certainly watching what's happening on the
Speaker 1: campaign trail audience. We've heard a lot in the last
Speaker 1: couple of weeks from some of investing in markets. Guess
Speaker 1: how they and their clients waiting election? What possibly mean
Speaker 1: on the so called and the prediction markets. I gotta
Speaker 1: tell you.
Speaker 2: On Friday, but I was watching the prediction market and
Speaker 2: Jim stat actor from and they were moving very quickly
Speaker 2: away from this clear Trump victory over Harris and emailed
Speaker 2: John Authors. I was like, have you seen what's happening here?
Speaker 2: And sure enough, yeah, he'd been watching it too. We
Speaker 2: got John Authors with also joining us Bloomberg News markets
Speaker 2: reporter Justina Lee. She writes about the election gambling facing. Uh,
Speaker 2: it's a moment of truth. John, Justina, Welcome to the program.
Speaker 2: Both of you writing about the prediction markets. Uh, Justina,
Speaker 2: I do want to start with you, though, because remind
Speaker 2: everyone what exactly we're talking about here. I think for
Speaker 2: a lot of people, this is the first election where
Speaker 2: they're hearing about this stuff.
Speaker 3: Yeah.
Speaker 4: What's really interesting is just before the start of this election,
Speaker 4: I mean, we were we had kind of a judge
Speaker 4: overturned this ban on a US legal kind of exchange
Speaker 4: that is going to offer contracts on the election. And
Speaker 4: because of this, there's more attention on election betting than ever.
Speaker 4: And also there's also this crypto exchange off tour that's
Speaker 4: been seeing really large volumes and kind of electoral betting,
Speaker 4: and I think because of this, there's been a lot
Speaker 4: of attention on those odds, and in particular because over
Speaker 4: the past month they've they've shown like a way higher
Speaker 4: probability for Trump than we're seeing in you know, forecast
Speaker 4: models like five thirty eight or Nate Silver.
Speaker 3: John come on in on this. You've got to calum
Speaker 3: out noting that the prediction markets are giving now Donald
Speaker 3: Trumps November surprise, not necessarily a good one.
Speaker 5: Not necessarily a good one for Trump at all. I mean,
Speaker 5: with prediction markets, you've always got to remember there is
Speaker 5: an issue with them. Garbage and garbage out to the
Speaker 5: and Zel sip Iowa poll at face value, if it's accurate,
Speaker 5: means CAML Harris has won the election.
Speaker 3: What does garbage in garbage out mean?
Speaker 5: Gub it's it's it's a computer term. If that, if
Speaker 5: the data you're putting into the prediction market is bad data, right,
Speaker 5: there's no reason to produce to expect it to produce
Speaker 5: a good outcome.
Speaker 3: So I get that. So with the predicted prediction markets,
Speaker 3: does that mean sometimes there's good data coming in, sometimes
Speaker 3: there's not, or is.
Speaker 5: I think it's been true of any market that you know,
Speaker 5: if you got bad data from Enron and you thought
Speaker 5: it was an absolutely fantastic for company for a long time,
Speaker 5: and then you realized it wasn't right, And amazingly I
Speaker 5: looked up yesterday it was replaced in the S and
Speaker 5: P five hundred my own video.
Speaker 6: Wow.
Speaker 1: Okay, that's yes, yes, But that's that's why John, I
Speaker 1: think it was. I think it might have been exactly
Speaker 1: a week ago you sat in this chair. You'd written
Speaker 1: another column that talked about how the Trump trade was on,
Speaker 1: and it looked like it gave the former president about
Speaker 1: a two thirds chance. Do you do you want to
Speaker 1: update that prediction ahead of tomorrow?
Speaker 5: The current prediction is that it gives him. I'm inclined
Speaker 5: not to trust polymarkets as much as the others because
Speaker 5: there does seem to be an oddly determined positive gloss
Speaker 5: on the on the Republican chances. The others suggest that
Speaker 5: he still has a chance, a better chance than Kamala Harris,
Speaker 5: but it's a much narrow one, like three fifty four percent.
Speaker 5: That sounds broadly accurate to me, simply because we don't
Speaker 5: know what the narratives are that here that are going
Speaker 5: to decide things. It's possible Madison Square Garden Rally and
Speaker 5: everything around it really may decided a lot of people
Speaker 5: that know they weren't going to go vote for this guy.
Speaker 5: We don't know yet. We will know soon.
Speaker 3: And if I recall, was it twenty sixteen that you
Speaker 3: said that initially it was the markets in favor of Hillary. Yes,
Speaker 3: And obviously we know Donald Trump exactly well.
Speaker 5: We also and the markets will convince the prediction. Markets
Speaker 5: were convinced in Britain that Brexit was not going to
Speaker 5: succeed in the referendum earlier that year, and that one
Speaker 5: wasn't That one wasn't right either. I mean, the other
Speaker 5: thing you've got to be very careful with in real
Speaker 5: markets with capital at stake. I did just check up
Speaker 5: that S and P E mini futures were down more
Speaker 5: than five percent in the immediate wake of the network's
Speaker 5: calling twenty sixteen for Donald Trump.
Speaker 3: Remember that, I remember watching.
Speaker 5: It, and they's pretty deep up by the time they
Speaker 5: markets actually opened the following day. So you know, there
Speaker 5: are some fairly clear things. You would imagine Bond yields
Speaker 5: would go up a lot, and that stocks would gain
Speaker 5: a lot with a with a comfortable Trump victory tomorrow night,
Speaker 5: you don't necessarily assume that that will hold on for
Speaker 5: a terribly long time once people can begin to think
Speaker 5: about this without the uncertainty surrounding it.
Speaker 3: Just in a polls versus we've talked a lot about
Speaker 3: the polling. Bloomberg has been involved in polling poll versus
Speaker 3: prediction markets. What do investors in Wall Street respect as
Speaker 3: we go through this process.
Speaker 4: Yeah, what's been really interesting lately is that we've seen
Speaker 4: a lot of cell sized strategies, in particular citing the
Speaker 4: betting odds rather than the poles based forecast. And I
Speaker 4: think one edge that the betting ods definitely have is
Speaker 4: that you know, as people trade, they can more quickly
Speaker 4: in corporate you know, every new drip of information or
Speaker 4: whatever kind of you know, the vibe shifts. That might
Speaker 4: be a bit harder for a model to quantify. But
Speaker 4: I think that the flip side of that is that
Speaker 4: you can more easily have kind of a hurting mentality,
Speaker 4: or maybe it's more easily affected by one sided bets,
Speaker 4: whereas I guess like the poles based forecasts are more
Speaker 4: grounded on data, but you really need sort of the
Speaker 4: trends to be roughly similar to history for that poles
Speaker 4: based forecast to really have any insight.
Speaker 3: I love this. We've got a listener saying, can Americans
Speaker 3: bet on the winner? How does someone do it?
Speaker 5: Yes, Justina can tell you more bets can let you
Speaker 5: do it. We are in the interactive Brocus studio.
Speaker 6: Are we not?
Speaker 5: Are you can not the time necessarily saying you should?
Speaker 5: But you can bet on it's only attractive breakase if
Speaker 5: you like and robin Hood. Thanks to the CFTC's loss
Speaker 5: in court, a number of people will will let you
Speaker 5: do it legally, even without getting a VPN and pretending
Speaker 5: not to be American.
Speaker 3: Well that's why, Justina. You know in your story you
Speaker 3: note that the prediction markets have entered the big leagues
Speaker 3: with the twenty twenty four presidential vote. I mean this
Speaker 3: is kind of new territory for everyone, for investors, for betting,
Speaker 3: for the betting public here in America.
Speaker 4: Yeah, that's right. I mean, we're seeing really large volumes,
Speaker 4: especially compared to before. And one thing that I think
Speaker 4: is really interesting is, you know, when it comes to
Speaker 4: financial markets, we always think the moral liquidity the better,
Speaker 4: and so kind of by that logic, I mean, this
Speaker 4: year's all should be especially informative. But at the same time,
Speaker 4: it's kind of funny because I spoke to an expert,
Speaker 4: you know, on Friday, and he was saying, maybe pay
Speaker 4: attention to the smallest market of all, which is predicted,
Speaker 4: because predicted kind of limits the sizes of your positions
Speaker 4: and so you don't really get kind of any of
Speaker 4: these big whale traits, so you get on the polymarket.
Speaker 4: And of course that's kind of a really interesting question
Speaker 4: now because Predicted is the one platform that's giving even
Speaker 4: odds to the two candidates at this moment.
Speaker 5: And it also if you look back to the summer,
Speaker 5: Predicted saw Kamala Harris coming a long way before the
Speaker 5: other prediction markets that were out there. It saw the
Speaker 5: chance that I presumably because the often the academics who
Speaker 5: are betting on Predicted are fairly well plugged in the
Speaker 5: democratic politics, they got that Joe Biden was likely to
Speaker 5: have to stand down, and that Kamala Harris would be
Speaker 5: nigh on unstoppable if he did to get the nomination
Speaker 5: far before Polymarket did. So they're not dumb. The other
Speaker 5: thing that is, if you're trying to produce a prediction,
Speaker 5: if you're not hedging your bets, if you're not trying
Speaker 5: to make money, but you're looking for the public, get
Speaker 5: better of a good prediction on predicted everybody, including you
Speaker 5: students who are just finishing their PhDs, is worth as
Speaker 5: much as elon musk.
Speaker 3: You guys, thank you so much. A great round the
Speaker 3: table on that. John authors of Bloomberg Markets and Bloomberg Opinion,
Speaker 3: just in the lead Markets are put her up Bloomber.
Speaker 6: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 6: live weekday afternoons from two to five pm. Easter Listen
Speaker 6: on Apple card Play and then brod Auto with a
Speaker 6: Bloomberg Business app, or want us live on YouTube.
Speaker 1: All right, from the ground game to the money game,
Speaker 1: we go to Yeah and the eleven thousand political groups
Speaker 1: that have spent nearly fifteen billion dollars to influence the
Speaker 1: twenty twenty four election. It brings us to a great
Speaker 1: deep dive into the money that runs the US political systems.
Speaker 1: It's an interact story. It's best read on the Bloomberg
Speaker 1: terminal or online, so I encourage everybody to do that.
Speaker 1: It's also, Carol one story that's really important understanding who's
Speaker 1: spending to support the process and the candidates.
Speaker 3: You've been talking about this story a lot, and we
Speaker 3: talked about it a lot on our call this morning.
Speaker 3: Let's bring in Bloomberg News campaign finance reporter Bill Allison.
Speaker 3: He is in Washington. We should note that Michael Bloomberg,
Speaker 3: the founder majority owner of Bloomberg News parent company Bloomberg
Speaker 3: LP and Bloomberg Philanthropy is has given money to several
Speaker 3: political groups, including House Majority Pack, Future Forward Pack, and
Speaker 3: every Town for Gun Safety Victory Fund. All right, Bill,
Speaker 3: so let's get to your reporting, great and informative deep
Speaker 3: dive into all the money in the twenty twenty four election.
Speaker 3: Tell us how you went about reporting this story out,
Speaker 3: What you looked at, what you found out.
Speaker 7: Well, first of all, it was wrangling this data was
Speaker 7: one of the hardest things we ever did, in part
Speaker 7: because committees give so much money to each other. I mean,
Speaker 7: there's you know, the if you look at the main
Speaker 7: Senate super PACs that they're spending tons of money, and
Speaker 7: the Senate battlegrounds. You know, there's a group called Win
Speaker 7: Senate which is backing Democrats, but it's actually funded by
Speaker 7: the Senate Majority Pack, which is tied closely to to
Speaker 7: Charles Schumer. So we basically the first thing we did
Speaker 7: was to try to get all of that double counting
Speaker 7: out of the numbers and really just focus on the
Speaker 7: money that was coming in and the money that was
Speaker 7: going out and uh, and what we found is is
Speaker 7: that you know, there's there's a hundred committees that are
Speaker 7: really the most active that are spending you know, close
Speaker 7: to a third of the money in this election. And
Speaker 7: it and you know, the it's just we've just seen
Speaker 7: blockbuster amounts of money being spent. It's going to it's
Speaker 7: most likely going to set the record, it's on track
Speaker 7: to set the record for for the most expensive election ever,
Speaker 7: even more than twenty twenty when you had a huge
Speaker 7: attic field for the primaries and uh for the general election.
Speaker 7: It's there's just the amounts of money that are being spent.
Speaker 6: Or just staggering.
Speaker 1: Yeah, fifteen billion dollars is just a mind boggling number.
Speaker 1: I wonder though, how we got here, Bill, Is this
Speaker 1: all a result of that twenty ten Supreme Court Citizens
Speaker 1: United decision.
Speaker 7: That's a big part of which got rid of soft
Speaker 7: money to the parties. We had things like Swift vet
Speaker 7: Vote Swiss, Swift Vote, Swift Vote Vets, Yeah, which was
Speaker 7: the group that went after John Kerry. We had on
Speaker 7: the left, we had a bunch of different They were
Speaker 7: called Section five twenty seven organizations, and they basically ran
Speaker 7: negative ads without using the words vote for, vote against,
Speaker 7: which was fine under Citizens United. So, you know, I
Speaker 7: think that the amount of money in politics, you know,
Speaker 7: was always going to be I mean, it's there's so
Speaker 7: much at stake in a federal election, whether it's you know,
Speaker 7: control of Congress, control of the House, the Senate, or
Speaker 7: the White House, that you know, interests just pour tons
Speaker 7: and tons of money in.
Speaker 3: One of the things that I always think about, you know,
Speaker 3: on a story like this, Bill is yep, I think
Speaker 3: about you know, the final dollar amount. That's serious, serious money,
Speaker 3: and we all see it in the you know, campaigns
Speaker 3: and ads that have been bombarding us. Having said that,
Speaker 3: I also think about influence, and I do wonder in
Speaker 3: terms of where a lot or the bulk of the
Speaker 3: money came from. What were those entities were it? You know,
Speaker 3: we know about Elon Musk. Can we keep talking about
Speaker 3: the billionaires that are in the election, But where did
Speaker 3: most of the money come from? Where is most of
Speaker 3: the influence coming from in this in this campaign?
Speaker 6: Boy?
Speaker 7: That's you know, there's there's a huge base of small
Speaker 7: dollar donors that are giving, you know, that are accounting
Speaker 7: for you know, billions of dollars the amount of the total.
Speaker 7: And those folks really aren't you know, they're much more
Speaker 7: ideological givers. And I think at the upper end of
Speaker 7: the spectrum too. And it's kind of funny that you
Speaker 7: mentioned Elon Musk when you're talking to Ted Man. He's
Speaker 7: he started as a very transactional giver. He gave to
Speaker 7: the Obama campaign, but relatively small amounts for him, certainly,
Speaker 7: like fifty thousand dollars I think was what he gave
Speaker 7: to the Obama Victory Fund in two thousand and eight.
Speaker 7: And he gave to politicians who could help his business estress,
Speaker 7: whether it was SpaceX or ESLA. And now he's become
Speaker 7: kind of much more of an ideological giver. The way
Speaker 7: he talks about politics. You know, it's it's and I
Speaker 7: think you see this kind of across the board. You know,
Speaker 7: we did the story earlier on fair Shake the Crypto Superpack,
Speaker 7: and you know it's supporting Democrats and Republicans based on
Speaker 7: where you stand on Crypto. And one of the big
Speaker 7: donors to that to Fairshake was a big Democratic donor
Speaker 7: who got very angry when he found out that they
Speaker 7: were going against Shared Brown because he says that the
Speaker 7: cher Brown has to win his seat to hold the Senate,
Speaker 7: and he stopped giving to the super pac. And I
Speaker 7: think this kind of really shows how ideological and how
Speaker 7: Democrat versus Republican and just kind of in the same
Speaker 7: way that the country is really starkly divided, donors are
Speaker 7: starkly divided between, you know, the visions for the country.
Speaker 1: Bill big money versus small money. What's the story there?
Speaker 1: Certainly the big money from folks like Elon Musk and
Speaker 1: the Light get a lot of attention, But small money
Speaker 1: donations have powered the Trump campaign in the past. How
Speaker 1: did do this year and how did Harris' campaign do
Speaker 1: with small money donors?
Speaker 7: Actually, Harris's campaign is doing better, I mean with with Trump.
Speaker 7: You know, in the past, he got much more support
Speaker 7: from small dollar donors. I was giving less than two
Speaker 7: hundred dollars in aggregate for the election. Maybe, you know,
Speaker 7: it's not just people. If you give like ten dollars
Speaker 7: twenty one times, you're a you're an itemized donor. So
Speaker 7: he's gotten like a ton of support from people who
Speaker 7: don't didn't give very much in both twenty sixteen and
Speaker 7: twenty twenty, and much more from from millionaires this year.
Speaker 7: It's it's the millionaires or people making donations of a
Speaker 7: million dollars or more. Cause a lot of more billionaires
Speaker 7: we're doing that. They're the ones who are really fueling
Speaker 7: his campaign. He's his outside money. There's about I think
Speaker 7: it's close to seven hundred million dollar dollars that are
Speaker 7: in outside money going to super packs compared to about
Speaker 7: three hundred and fifty million that he's raised for his campaign.
Speaker 7: So he's doing much better now with wealth donors than
Speaker 7: he is with the small dollar donors. Part of that
Speaker 7: might be inflation that's hit his donor base, and part
Speaker 7: of it might be that just you know, the appeal
Speaker 7: isn't the same. You know, he's been hitting these people
Speaker 7: up in the same people since, you know, since he
Speaker 7: won the nomination in twenty sixteen. Yeah, and you know,
Speaker 7: you wonder if he's gone to the well one too
Speaker 7: many times.
Speaker 3: Great stuff, Bill, Thank you, Thank you so much. Bill Allison,
Speaker 3: Bloomberg News Campaign Finance reporter, joining us there from Washington,
Speaker 3: d C.
Speaker 6: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 6: each weekday. He's starting at two pm Eastern on Apple
Speaker 6: car Play and Android Auto with the Bloomberg Business Ad.
Speaker 6: You can also listen live on Amazon Alexa from our
Speaker 6: flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
Speaker 3: The other thing that is, you know, thinking about the election,
Speaker 3: and I feel like it's safe to say that it's
Speaker 3: been a big piece of the election, whether it's concerns
Speaker 3: or actuality of it. Is just our own Bloomberg News
Speaker 3: team reporting out how it has been permeating the US
Speaker 3: presidential election on an unprecedented scale, with online instigators escalating
Speaker 3: doubts about the integrity of the electoral process as millions
Speaker 3: of Americans have been casting their ballots. So there's been
Speaker 3: a big question tim about can you trust the vote?
Speaker 1: And that's exactly that Bloomberg News technology reporter Austin Carr
Speaker 1: tried to answer. He's set to figure it out. It's
Speaker 1: all in his Bloomberg BusinessWeek story about how US voting
Speaker 1: machines became safer than ever. Austin joins us from the
Speaker 1: Bloomberg News bureau in Boston. Austin tell us about Chip
Speaker 1: Troutbridge and the Clear Ballot Group. So Clear Ballot is
Speaker 1: a startup that's based in Boston. It's about a decade
Speaker 1: holl It's backed by Best Summer Ventures, and it's one
Speaker 1: of the companies that's trying to compete with Dominion, the
Speaker 1: sort of larger incumbent in the space, which you would
Speaker 1: think would make them a very tech forward sort of
Speaker 1: player in the voting machines. But it actually turns out
Speaker 1: that I spent some time with the team. They're both
Speaker 1: their office in Boston as well as their factory in
Speaker 1: New Hampshire, and it turns out they're really pushing a
Speaker 1: paper centric approach, just as a lot of election vendors
Speaker 1: are doing themselves. It's actually turns out that paper marking
Speaker 1: things physically and keeping an audit trail is incredibly safe,
Speaker 1: and so a lot of the technology that's being invested
Speaker 1: into this industry is really around tabulating votes rather than
Speaker 1: changing actually how we're marking them in a very old
Speaker 1: school way with pens and paper, so meaning that we
Speaker 1: are going to be using paper ballots for the foreseeable future.
Speaker 5: Correct.
Speaker 8: I mean, it's really funny you hear. You hear a
Speaker 8: lot of noise from you know, people like Elon Musk
Speaker 8: saying that, you know, voting machines are super vulnerable to
Speaker 8: hacking and connected to the Internet, and we should move
Speaker 8: back to paper, and a lot of people I talk
Speaker 8: to you say, you know what I mean, These voting
Speaker 8: machines are, for the majority of them, are not connected
Speaker 8: to the Internet, and about ninety eight percent of ballots
Speaker 8: will be cast on paper tomorrow. So it's actually a
Speaker 8: very paper centric approach, which I think sort of cuts
Speaker 8: against a lot of the noise you hear around how
Speaker 8: much hacking and manipulation and all these that are apparently
Speaker 8: going to corrupt the election, just as they did in
Speaker 8: twenty twenty from some of the more conspiratorial voices we heard.
Speaker 3: All Right, so I'm just playing Devil's advocate. Why do
Speaker 3: we care what Chip has to say? And what Clear
Speaker 3: Ballot group has to say as we think about how
Speaker 3: safe our voting process is.
Speaker 8: So Chip Troutbridge is the CTO of Clear Ballot. He
Speaker 8: came from a company called in Deco, which was later
Speaker 8: acquired by Oracle. They're very good at data analytics, and
Speaker 8: in fact Clear Ballot got it start auditing elections. What
Speaker 8: their technology originally does is sort of scan all the
Speaker 8: paper ballots. You know, when you get to a voting
Speaker 8: booth and you mark it down with a sharpie and
Speaker 8: a kind of gleat bleach to the paper. Maybe you
Speaker 8: just check it off, maybe you scribble, maybe you're a
Speaker 8: person who inadvertently circles the choice of the candidate you want. Well,
Speaker 8: this technology scans all those ballots and provides a visualization
Speaker 8: of all of them digitally, so if there are votes
Speaker 8: that are a little bit less clear, they can actually
Speaker 8: view them on a computer. But it's just sort of
Speaker 8: a corresponding sort of representation, a digital image of the
Speaker 8: physical paper ballot. That's just helping to speed up the
Speaker 8: process so there aren't long delays when they have to
Speaker 8: do recounts or post election audits.
Speaker 3: No no, no, yes, and forgive me go ahead, please?
Speaker 8: Oh just so the longer there is between sort of
Speaker 8: the time that votes are cast and when election results
Speaker 8: are given, that's what a lot of conspiracies fill that void.
Speaker 8: People start thinking something must be nefarious happening when actuality
Speaker 8: is just there's a lot of bureaucracy and slow moving
Speaker 8: of mechanisms that keep canvassing very slow. So this technology
Speaker 8: is designed to speed it up and make it a
Speaker 8: lot faster. But again it's still fundamentally a paper based
Speaker 8: voting system.
Speaker 3: So if paper based is the thing, I mean the idea,
Speaker 3: is hanging chads something that we have to be worried
Speaker 3: about in the future. We all remember or not everybody
Speaker 3: maybe remembers, right, it's twenty twenty four. That was back
Speaker 3: in two thousand, but that was quite a fiasco, unexpected
Speaker 3: and some say we it played out differently, we might
Speaker 3: have had a different president in the White House. But
Speaker 3: do we have to be worried about something like hanging chads? Though?
Speaker 8: No, so that actually after the two thousand Florida fiasco.
Speaker 8: Those were based on mechanical levers. So those are the
Speaker 8: punch cards that you have, those hanging chads from physically
Speaker 8: punching in. This is just your marking a ballot. There's
Speaker 8: basically two approaches. You're marking a ballot with a sharpie,
Speaker 8: then you submit it into a scanner. It keeps the paper,
Speaker 8: and then the tabulator just provides a digital image of
Speaker 8: it and just counts it. The other system that Dominion
Speaker 8: has gotten some controversy for is a touch screen. You
Speaker 8: enter your choices and then it prints out the physical
Speaker 8: ballot and that's what you submit. It has your candidates
Speaker 8: that you selected printed out with clear legible texts. You
Speaker 8: can review it. There's a QR code that the scanner
Speaker 8: scans and that's what you submit. So both their paper
Speaker 8: based approaches and that represents about ninety eight percent of voting.
Speaker 8: But again, unless you're really messing with your sharpie, i'd
Speaker 8: say the vast majority of votes are inputed pretty properly. Again,
Speaker 8: I'm not questioning your penmanship. I'm sure you're gonna do
Speaker 8: a great job. But that's the fundamental issue is there's
Speaker 8: no hanging chads. That's going to be the issue. It's
Speaker 8: most likely disinformation registration issues and just sort of larger
Speaker 8: disruption at the pole places themselves than actual hacking of
Speaker 8: these these sort of computer tabulators.
Speaker 3: Well, Austin.
Speaker 1: What about the process of actually keeping track of how
Speaker 1: many votes each candidate gets, because yes, you know, at
Speaker 1: the precinct level, we understand that there are paper ballots,
Speaker 1: but then when they're added up, that number gets sent
Speaker 1: in some sort of format to a bigger place where
Speaker 1: things are being kept tracked, where the stuff is being
Speaker 1: kept track of. Is there any opportunity there for malfeasons?
Speaker 8: Well, I think that the sort of physical safeguards and
Speaker 8: redundancies that are in place make the process very slow
Speaker 8: and hard to change, but also ironically makes it very safe.
Speaker 8: And that's the one thing that I with the clear
Speaker 8: Ballot CTO chip that I spent a lot of time
Speaker 8: talking to just growing through all those mechanisms from sort
Speaker 8: of you know, when they have to open these machines,
Speaker 8: there's people from opposite political parties that have to unlock
Speaker 8: the machines and tear off security seals to Actually, when
Speaker 8: you're talking about transferring the vote counts of the end
Speaker 8: of the night, those are sometimes transferred on a USB stick.
Speaker 8: Now you might think, oh, couldn't that USB stick be switched, Well, again,
Speaker 8: you'd have to. That would be quite a feat just
Speaker 8: to get by all the people who are looking at
Speaker 8: you'd somehow have to replace the USB stick, the logs
Speaker 8: that you plug it in and out of a computer.
Speaker 8: You'd have to change those. And then again, these ballots,
Speaker 8: those are unofficial results. The physical ballots are the official count.
Speaker 8: So even if you did change the sort of somehow
Speaker 8: hacked into a USB stick that was being transferred to
Speaker 8: a central location, I don't know, you'd have to corrupt
Speaker 8: both the scans at the precinct and at a county level.
Speaker 8: You'd have to replace the paper ballots. It's just there's
Speaker 8: a lot of redundancies, analogue offline redundancies in place that
Speaker 8: make it sort of fantastical and really hard to play
Speaker 8: out this sort of scenario. I think we said in
Speaker 8: the piece that it's not so much that you'd have
Speaker 8: to have mission impossible cunning, but really the logistical omnipresence
Speaker 8: of Santa Claus to pull off something like this at scale.
Speaker 3: Yeah, yeah, exactly. Hey, Austin, thank you so much. Austin
Speaker 3: Carr Technology or putter up Bloomberg New's joining us from
Speaker 3: our Boston bureau. You can check out that story at
Speaker 3: Bloomberg BusinessWeek story. You can find out more just head
Speaker 3: to the Bloomberg terminal and at Bloomberg dot com.
Speaker 6: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 6: live weekday afternoons from two to five pm. Easter Listen
Speaker 6: on Applecarplay and and Broyd Auto with a Bloomberg Business app,
Speaker 6: or watch us live on YouTube.
Speaker 4: Blomarco Journal, Now about you let me drive?
Speaker 8: Oh no, no, no, no, please.
Speaker 6: Honey, please travels, I want to drive.
Speaker 5: The question.
Speaker 6: This is the drive to the clothes? Do we'll buy
Speaker 6: around it?
Speaker 3: On Bloomberg Rady all right, everybody, we've got just about
Speaker 3: eighteen minutes left to go until we wrap up the
Speaker 3: trading day. Ways shaking your head.
Speaker 1: That's time flies when you're having fun.
Speaker 3: It's been a little bit crazy.
Speaker 1: It's been a little crazy. Well, you know, part of
Speaker 1: it is just because things are crazy right now.
Speaker 3: Yeah, it is. I think you can feel, you know,
Speaker 3: it feels like a day before an election. Actually, I
Speaker 3: want to say it feels like a day before a
Speaker 3: very close election based on polling and where things have
Speaker 3: changed dramatically. It's been an unusual election cycle to say
Speaker 3: the least. And so yeah, here we are and a
Speaker 3: market that's been bouncing around. We were just talking with
Speaker 3: our Bill Maloney here about what brought the markets down
Speaker 3: around eleven o'clock or so, and a story I think
Speaker 3: it was in the Wall Street Journal or the Washington Post. No,
Speaker 3: it's the Journal. It was a journal forgive me about
Speaker 3: Russia maybe putting some devices, in sundiary devices into some
Speaker 3: planes coming into the United States.
Speaker 6: Yeah.
Speaker 1: Reading from the journal, Western security officials they believe that too,
Speaker 1: and sendiary devices shipped via DHL. We're part of a
Speaker 1: covert Russian operation that ultimately aimed to start fires aboard
Speaker 1: cargo or passenger aircraft flying to the US and Canada.
Speaker 1: This is Moscow steps up a sabotage campaign against Washington.
Speaker 3: Yeah, the devices ignited DHL logistics hubs in July, one
Speaker 3: in Germany, another in England. The explosion set off a
Speaker 3: multinational race to find the culprits. So just you know,
Speaker 3: stuff going on behind the scenes. And so anyway, that
Speaker 3: was Bill's thinking that would dragged the market.
Speaker 1: Down, not just an election to contend with. So Kara
Speaker 1: Murphy's chief investment officer at Kestra Investment Management. Kara joins
Speaker 1: us from Austin, Texas. Right now, Kara, what are you
Speaker 1: hearing from clients as we get closer and closer to
Speaker 1: election day.
Speaker 9: Tomorrow, there's a lot of hand ringing. And you know,
Speaker 9: when I think back to the beginning of the year,
Speaker 9: we were sort of prepping ourselves to get ready to
Speaker 9: talk a lot about elections, and at that time people
Speaker 9: were like, oh, we're not really focusing on it. But
Speaker 9: over the last couple of months that has very definitely changed.
Speaker 9: There's a lot of concern and it doesn't matter what
Speaker 9: side of the that you're on, and so we've just
Speaker 9: been repeating the mantra that go vote, it's important, but
Speaker 9: it's not necessarily important for your portfolio.
Speaker 3: Well that's interesting. So are you anticipating I don't know
Speaker 3: when we have the election outcome that you're going to
Speaker 3: get a lot of calls of investors saying, hey, now
Speaker 3: we're thinking, all right, we know what's going on, we
Speaker 3: know what the composition of Congress is, We're going to
Speaker 3: start making some changes. Is that what's going to happen
Speaker 3: or not necessarily?
Speaker 9: Well, I think we all look forward to the time
Speaker 9: when we know what the composition of Congress and the
Speaker 9: White House looks like. So we're all excited about when
Speaker 9: that will happen, But I think no, for most people,
Speaker 9: it's really about getting back to that conversation, what are
Speaker 9: your long term goals, what's the long term trajectory of
Speaker 9: the US economy, what's corporate earnings power?
Speaker 1: Right?
Speaker 9: So I think the conversation shifts from what's happening at
Speaker 9: the ballot box to what are those things that are
Speaker 9: really important for stocks and bonds?
Speaker 1: What are those things?
Speaker 9: So earnings, right, that's a big one, and we're in
Speaker 9: the thick of earning season right now. Last week we
Speaker 9: had five of this of the seven reporting, and i'm
Speaker 9: incredibly important for the near term move in the market.
Speaker 9: And what was interesting is that we saw with those
Speaker 9: individual companies pretty good reports on both earnings and revenues,
Speaker 9: but the stocks didn't perform so well. And I think
Speaker 9: that's because what we're seeing right now is the beginning
Speaker 9: of this handoff from the mag seven, which has driven
Speaker 9: the market for the last two ish years to everybody else.
Speaker 9: And we need to start to see some of that
Speaker 9: earnings pick up into next year for some of those
Speaker 9: smaller names in order to be able to sustain this rally,
Speaker 9: which we think will happen. But it's the sort of
Speaker 9: delicate handoff.
Speaker 3: In the meantime, you know, when it comes to something like,
Speaker 3: as you said, earnings fundamentals, these are all important, you know, recession,
Speaker 3: no recession. Do you think it matters who's in the
Speaker 3: White House or do you think something like that For
Speaker 3: the US economy specifically, it doesn't matter who's in the
Speaker 3: White House whether or not we dip into a recession,
Speaker 3: maybe sooner rather than later.
Speaker 9: I think it would be rare that a policy does
Speaker 9: decision would trip the whole economy into recession. So certainly
Speaker 9: there are certain economic policies that have a big impact
Speaker 9: on certain areas of the economy. But when you think
Speaker 9: about what's driven you know, the last few recessions, they
Speaker 9: were big, huge macro events that were not driven by policies.
Speaker 9: Think COVID, global financial crisis, bursting of the Internet bubble.
Speaker 9: These are things that had very far reaching effects that
Speaker 9: were not driven by a single individual.
Speaker 3: How about though, if you've got, you know, a candidate
Speaker 3: who might want to tinker with the Federal Reserve.
Speaker 5: So I think the.
Speaker 9: Federal Reserve and the independence of those policy decisions is
Speaker 9: really critical to keeping the economy on solid footing. And
Speaker 9: I often say that, you know, the part of the
Speaker 9: reason why I don't worry so much about who's in
Speaker 9: the White House is because we are very fortunate to
Speaker 9: live in the United States that has very strong political institutions. Now,
Speaker 9: typically the Federal Reserve is not included in those, but
Speaker 9: from an economic perspective, the Federal Reserve and its independence
Speaker 9: is really critical to being able to write the ship
Speaker 9: and be able to help manage the volatility and the
Speaker 9: economic cycle.
Speaker 1: Okay, so help us think past the election, because I
Speaker 1: think a lot of us are focused too.
Speaker 3: Yeah.
Speaker 1: I mean, one thing that we've been hearing from folks
Speaker 1: like you is that, Okay, maybe the risk isn't necessarily
Speaker 1: with the presidential election. It's with who else is elected
Speaker 1: in terms of the House and the Senate and the
Speaker 1: makeup there. But also how long this drags on for
Speaker 1: And I'm wondering what happens to the markets if it
Speaker 1: drags on.
Speaker 3: Again.
Speaker 9: I mean, this gets back to the strength of the
Speaker 9: US institutions. And I was looking back at this earlier today,
Speaker 9: and we've had occasions where we didn't know who the
Speaker 9: official was or what the makeup of Congress was for
Speaker 9: some time. So we can actually manage through those things
Speaker 9: fairly well. And I think you know, even we hear
Speaker 9: a lot about you know, blue sweep or red sweep
Speaker 9: on one side or the other. And I think even
Speaker 9: in those instances where we have one party takes all,
Speaker 9: all of the margins are going to be raised or thin,
Speaker 9: whether it's the White House, House of Representatives, or Senate,
Speaker 9: that even once we get those numbers, there's not all
Speaker 9: that much that's going to be able to get done
Speaker 9: because no party is going to have that strong a
Speaker 9: majority in any one of those institutions.
Speaker 3: Anything interesting that you're noticing in terms of investment flows
Speaker 3: coming in coming out for some of your client base,
Speaker 3: So it's been interesting.
Speaker 9: So there have been some people who have been sort
Speaker 9: of positioning for a really dire situation, right moving more
Speaker 9: into commodities in order to be able to hedge against
Speaker 9: a really sort of volatile outcome coming out of tomorrow.
Speaker 9: But for the most part, what we see is that
Speaker 9: people are able to sort of pick themselves up out
Speaker 9: of the election results tomorrow and look beyond that and
Speaker 9: start thinking about what's right for them and their long
Speaker 9: term goals.
Speaker 3: All right, So I am Tim and I are both
Speaker 3: looking beyond the results, and we're thinking about, Yes, the
Speaker 3: FED meeting very important this week, but also Nvidia earnings
Speaker 3: which come at the end of this month. How big
Speaker 3: a deal is that for you in terms of how
Speaker 3: you think about sentiment, market sentiment and a big investment
Speaker 3: play which has been AI for the last you know,
Speaker 3: we're coming up almost on two years, but easily a
Speaker 3: year and a half. Yeah, for sure.
Speaker 9: I mean, this is one name that has largely carried
Speaker 9: the market for almost two years and has become this
Speaker 9: bellweather as you suggested, for AI and its implications in
Speaker 9: the broader economy. And so I think if last week
Speaker 9: was any lesson it's that Nvidia has to come out
Speaker 9: and not just be positive on revenues and earnings in
Speaker 9: the rearview mirror, but also has to be positive going forward.
Speaker 9: And so certainly all eyes will be on that earnings report.
Speaker 3: All right, good stuff, Thank you so much, Kara, look
Speaker 3: forward to talking to you next time. Kara Murphy, Chief
Speaker 3: investment Officer Kestra Investment Management, joining us from Austin, Texas.
Speaker 6: This is the Bloomberg Business Week Podcast. I'll a little
Speaker 6: of Apple, Spotify and anywhere else you get your podcast
Speaker 6: listen live weekday afternoons from two to five pm Eastern,
Speaker 6: on Bloomberg dot Com, the iHeartRadio app, tune In, and
Speaker 6: the Bloomberg Business. You can also watch us live every
Speaker 6: weekday on YouTube and always on the Bloomberg terminal.