WEBVTT - Market, Election, and M&A Outlook 0:00:02.440 --> 0:00:06.760 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.960 --> 0:00:16.360 This is the Bloomberg Surveillance Podcast. Catch us live weekdays 0:00:16.400 --> 0:00:19.880 at seven am Eastern on applecar Player, Android Auto with 0:00:19.920 --> 0:00:23.360 the Bloomberg Business App. Listen on demand wherever you get 0:00:23.360 --> 0:00:26.200 your podcasts, or watch us live on YouTube. 0:00:26.400 --> 0:00:29.480 Laura Rain joins it. She's the Chief ECONOMOCE at FS Investments. 0:00:29.760 --> 0:00:30.520 Lare given some of. 0:00:30.520 --> 0:00:34.240 The economic data we've seen recently. I guess most recently 0:00:34.320 --> 0:00:37.200 was a strong retail sales. It seems like this economy's 0:00:37.240 --> 0:00:40.120 doing fairly well, if not better than fairly well. How 0:00:40.120 --> 0:00:40.879 do you think about it? 0:00:42.400 --> 0:00:44.199 I think what we're seeing is a little bit of 0:00:44.200 --> 0:00:47.040 a difference between the growth data that you alluded to 0:00:47.120 --> 0:00:50.520 with the retail sales numbers, and the employment data, which 0:00:50.680 --> 0:00:55.880 does seem like the trajectory is slowing more notably. I 0:00:55.880 --> 0:00:58.200 think all of this adds up to a soft landing. 0:00:58.240 --> 0:01:00.480 But I think you bring up something really important. If 0:01:00.520 --> 0:01:03.160 you look at the GDP data, it still looks like 0:01:03.280 --> 0:01:06.200 there's no landing. We're still growing at a pace that's 0:01:06.240 --> 0:01:10.319 well above potential, and I think really reflects a consumer 0:01:10.360 --> 0:01:14.679 that just is truly unstoppable when we look ahead. However, 0:01:15.080 --> 0:01:18.200 I think we are in for an incremental slowdown in 0:01:18.319 --> 0:01:21.600 GDP growth. We're probably going to see a business investment 0:01:21.640 --> 0:01:24.200 take a pause, a lot of uncertainty right now about 0:01:24.200 --> 0:01:27.440 regulation around the election, and I think we're going to 0:01:27.480 --> 0:01:31.000 see government spending also downshift to neutral from being a 0:01:31.000 --> 0:01:33.840 pretty powerful tailwind. But you add it all up, I 0:01:33.840 --> 0:01:36.880 think today where you see the soft landing, more specifically 0:01:36.920 --> 0:01:39.520 as in the labor market data, where we are starting 0:01:39.600 --> 0:01:43.080 to see a cooling picture, not cold, a cooling. 0:01:43.560 --> 0:01:45.720 Laurie, you walk us through sort of how you're thinking 0:01:45.720 --> 0:01:48.480 about all of this as you listen to FED policymakers 0:01:49.160 --> 0:01:51.240 walk us through the way that they were approaching this 0:01:51.320 --> 0:01:53.040 next meeting, which is going to take place just a 0:01:53.280 --> 0:01:56.000 day or two after the presidential election. What are you 0:01:56.040 --> 0:01:57.960 listening for? I'll note that Chris Waller is speaking today. 0:01:57.960 --> 0:01:59.720 I think in Vienna, Austria, we're gonna hear from Neil 0:01:59.760 --> 0:02:03.840 kshk sorry as well. Is the is the commentary there? 0:02:04.000 --> 0:02:06.320 Commentary that we're getting is a cacophonists. Are we hearing 0:02:06.480 --> 0:02:08.160 some of that unanimity that a lot of people thought 0:02:08.200 --> 0:02:10.520 was eroding after the last meeting? What stands out to you? 0:02:10.560 --> 0:02:12.840 What are you listening for when when these policy makers. 0:02:12.560 --> 0:02:15.880 Speak, I think the only thing that they're unanimous about 0:02:16.040 --> 0:02:19.120 is that they're going to have to be data dependent 0:02:19.639 --> 0:02:23.480 when they're looking ahead to twenty twenty five. Listen, the 0:02:23.720 --> 0:02:28.120 inflation data has absolutely come down enough to open a 0:02:28.160 --> 0:02:32.639 window of opportunity for the FED to correct rates down 0:02:33.560 --> 0:02:36.520 and sort of keep them in line with real FED 0:02:36.560 --> 0:02:39.720 funds rates. You know, when we see inflation coming down, 0:02:40.160 --> 0:02:42.560 just the nominal FEDS funds rates starts to look a 0:02:42.560 --> 0:02:43.920 little bit more restrictive. 0:02:44.320 --> 0:02:45.320 So I think that's the. 0:02:45.280 --> 0:02:49.240 Adjustment that they're making today, and to twenty five basis 0:02:49.240 --> 0:02:52.040 point rate cuts at the next two meetings has always 0:02:52.040 --> 0:02:56.280 been my forecast. I think where I deviate more significantly 0:02:56.440 --> 0:02:59.280 is into next year because I think they're going to 0:02:59.400 --> 0:03:03.040 really take a pause. They're going to wait and see 0:03:03.440 --> 0:03:06.000 how the economy is evolving. And I feel like they 0:03:06.040 --> 0:03:09.120 take flak for having this sort of data dependent view, 0:03:09.560 --> 0:03:12.280 but I think they have to because I don't think 0:03:12.280 --> 0:03:14.960 inflation's totally gone. I think it's you know. 0:03:14.880 --> 0:03:16.200 I think the boogeyman's under the bed. 0:03:16.240 --> 0:03:18.120 I don't think it's just gone for good. 0:03:19.200 --> 0:03:22.240 Lauren, let's talk in the labor market here. You know, 0:03:22.280 --> 0:03:25.200 from my perspective, this is a fully employed economy because 0:03:25.240 --> 0:03:28.360 all of the Sweeney offspring are gainfully employed. So to me, 0:03:28.600 --> 0:03:32.000 that's very good well employed economy. What does numbers tell 0:03:32.040 --> 0:03:34.680 you about kind of where the labor market is today 0:03:34.680 --> 0:03:36.160 and where there might be some risks. 0:03:37.360 --> 0:03:40.600 You know, it's interesting that it's evolved into almost a 0:03:40.760 --> 0:03:44.360 two speed labor market because when you look at the 0:03:44.560 --> 0:03:49.560 hiring data, it's declined, it's looking weaker than it was 0:03:49.720 --> 0:03:54.440 before the pandemic, and it's eroding somewhat. But when you 0:03:54.480 --> 0:03:57.640 look at the layoffs data, it's also very low, so 0:03:58.080 --> 0:04:01.520 you know, people aren't losing their job en mass, which 0:04:01.560 --> 0:04:05.400 is really just what's so critical to keep household consumption 0:04:05.560 --> 0:04:09.600 going and consumer confidence where it is. But when you 0:04:09.640 --> 0:04:12.920 look at job opportunities, you know clearly that churn that 0:04:13.000 --> 0:04:16.880 we saw after the pandemic is really gone now, and 0:04:16.920 --> 0:04:20.600 you're seeing the hiring side of things looking cooler. 0:04:21.240 --> 0:04:23.200 But you know, to me, the can area. 0:04:23.000 --> 0:04:26.800 And the coal mine is always the weekly initial jobless claims. 0:04:27.080 --> 0:04:29.440 You know, we are seeing some elevation there because of 0:04:29.520 --> 0:04:34.320 the hurricanes that have devastated some local communities, but overall, 0:04:34.480 --> 0:04:37.520 outside of that, they're still fairly low, and of course, 0:04:37.640 --> 0:04:40.279 you know, nothing gets the market's attention like the monthly 0:04:40.320 --> 0:04:43.039 payroll report, which I think is going to continue to 0:04:43.080 --> 0:04:47.200 show a steady unemployment rate at round four four point 0:04:47.200 --> 0:04:52.440 one percent and hiring that's strong enough to keep that 0:04:52.560 --> 0:04:54.440 unemployment rate steady where it is. 0:04:55.200 --> 0:04:57.120 You know, bearing in mind what you're saying about how 0:04:57.320 --> 0:04:58.880 the Fed's going to be data driven and we have 0:04:58.960 --> 0:05:01.440 to be as well. Let me just ask you about 0:05:01.520 --> 0:05:04.159 some of the softer data. And we had that consumer 0:05:04.200 --> 0:05:06.279 confidence number a few weeks back, which I think spooked 0:05:06.279 --> 0:05:08.760 a lot of people. Consumers less confident in the economy 0:05:08.760 --> 0:05:11.240 where it is now and where it's headed. How do 0:05:11.320 --> 0:05:14.160 you factor that into the way that you were forecasting 0:05:14.200 --> 0:05:16.720 and thinking about the economy. Just the sense that consumers 0:05:16.800 --> 0:05:19.960 have about the US economy directionally, I noted in the 0:05:20.000 --> 0:05:24.880 last Confidence Board Report conference report, this sort of heightened 0:05:24.880 --> 0:05:27.240 interest in what the FED is doing and where interest 0:05:27.320 --> 0:05:27.880 rates are going. 0:05:29.000 --> 0:05:30.839 You know, you bring up to such an important point 0:05:30.880 --> 0:05:35.960 because the consumer confidence data have been lackluster, have been 0:05:36.000 --> 0:05:40.840 weak really since the pandemic. And that's despite you know, 0:05:41.040 --> 0:05:45.080 a very strong on a labor market, and despite the 0:05:45.120 --> 0:05:48.640 fact that while consumers say they're a little more downbeat 0:05:48.720 --> 0:05:53.400 on the on the economy, they're still out spending like gangbusters. 0:05:53.760 --> 0:05:56.320 So it's hard for me to connect those dots today 0:05:57.160 --> 0:05:59.920 given that the data has just sent such mixed signal. 0:06:00.360 --> 0:06:03.000 You know, we read the consumer confidence data closely because 0:06:03.000 --> 0:06:05.800 it comes out early, But of course what really matters 0:06:05.839 --> 0:06:08.280 for all of us is what their consumers are actually 0:06:08.320 --> 0:06:12.320 doing now, what they say they're worried about. That said, 0:06:12.520 --> 0:06:16.000 we cannot just ignore it. So it's something I think 0:06:16.000 --> 0:06:20.080 that I'm hoping we'll get better after the election. I 0:06:20.120 --> 0:06:24.120 think that's weighing on sentiment, just the uncertainty. And I 0:06:24.160 --> 0:06:27.040 think that, you know, as consumers slowly get used to 0:06:27.160 --> 0:06:31.479 interest rates at a higher for longer place, some of 0:06:31.520 --> 0:06:35.960 that concern around what they're able to do afford and 0:06:36.000 --> 0:06:40.960 what houses they're able to buy is going to normalize 0:06:41.000 --> 0:06:43.000 a little bit. I just think a lot of people 0:06:43.040 --> 0:06:44.960 are waiting for us to come back to a very 0:06:44.960 --> 0:06:47.800 low rate environment that I don't think it's going to happen. 0:06:48.640 --> 0:06:50.800 All right, because I'm not refinancing my mortgage, is what 0:06:50.800 --> 0:06:53.400 you're telling me anytime soon. Lara Ram, thanks so much 0:06:53.400 --> 0:06:58.160 for joining us loa Rain Chief economists at FS Investments. 0:07:02.920 --> 0:07:06.760 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:07:06.880 --> 0:07:10.200 weekday afternoons from seven to ten am Easter Listen on 0:07:10.240 --> 0:07:13.480 Apple car Play and Androut Auto with a Bloomberg Business app, 0:07:13.600 --> 0:07:15.240 or watch US live on YouTube. 0:07:15.320 --> 0:07:18.239 I want to bring a Nancy Curtain, Partner, Global CIO, 0:07:18.560 --> 0:07:22.760 head of Investment Advisory at alt It Tiedament Global. Hey, Nancy, 0:07:22.800 --> 0:07:25.520 We're just kind of getting into the teeth of the earnings, 0:07:25.560 --> 0:07:28.920 but we have some good numbers out of American Express today. 0:07:28.960 --> 0:07:31.560 The big banks put up some really good numbers. I mean, 0:07:31.600 --> 0:07:34.480 Morgan Stanley JP Morgan, What do you take away so 0:07:34.560 --> 0:07:36.600 far from what we've seen coming out of Corporate America 0:07:36.640 --> 0:07:37.240 earnings wise? 0:07:38.800 --> 0:07:42.480 Okay, so we're early innings in the third quarter, but like, 0:07:42.560 --> 0:07:45.320 so far, so good banks. As you said, we're pretty 0:07:45.400 --> 0:07:49.760 strong trading, they're benefiting from the volatility and markets. We 0:07:49.800 --> 0:07:53.160 think investment banking will probably pick up, and I think 0:07:53.200 --> 0:07:56.680 they indicated quite nicely on improvement net interest margins. We 0:07:56.760 --> 0:08:01.520 have Netflix Overnight TSMC rather just spelled the fact that 0:08:01.560 --> 0:08:04.560 there's a problem in demand for jen Ai, So I 0:08:04.600 --> 0:08:08.880 think that reads well into Nvidia earnings that's coming towards 0:08:08.880 --> 0:08:11.440 the end of November. As you know, look, there's a 0:08:11.560 --> 0:08:15.360 lull bar for the third quarter. Expectations are four percent, 0:08:15.720 --> 0:08:18.000 and I think companies are going to leap right over it. 0:08:18.120 --> 0:08:21.640 So we think this quarter will be strong. But really 0:08:21.640 --> 0:08:25.080 what's important for our clients and our positioning is looking 0:08:25.120 --> 0:08:28.280 ahead to the fourth quarter and twenty twenty five, where 0:08:28.280 --> 0:08:31.560 we still expect earnings to continue to accelerate as Central 0:08:31.600 --> 0:08:32.200 Bank's ease. 0:08:32.520 --> 0:08:34.240 Well, Nas, let's talk about that as you try to 0:08:34.240 --> 0:08:36.160 look ahead to the fourth quarter. And obviously there's an 0:08:36.200 --> 0:08:40.320 election between now and then looming large, and I'm curious 0:08:40.360 --> 0:08:42.440 just about kind of the panoply of risks that you 0:08:42.480 --> 0:08:44.640 see here. Yes, there's the election results, there's this Federal 0:08:44.640 --> 0:08:46.800 Reserve meeting that we were talking about just a few 0:08:46.800 --> 0:08:49.480 moments ago. I'm looking at just sort of how much 0:08:49.640 --> 0:08:52.160 gold has gone up in price here in recent days. 0:08:53.240 --> 0:08:55.199 How are you thinking about risk and how is that 0:08:55.280 --> 0:08:57.040 kind of shaping your perspective as you look ahead to 0:08:57.040 --> 0:08:57.640 the fourth quarter. 0:08:59.040 --> 0:09:01.800 Well, first of all, it's important to remain diversified, which 0:09:01.840 --> 0:09:04.720 is what we do. We don't just have equities. We've 0:09:04.760 --> 0:09:08.400 got things like private credit and infrastructure and gold, gold 0:09:08.440 --> 0:09:11.720 as you mentioned, hit twenty seven hundred overnight. That's been 0:09:11.760 --> 0:09:15.880 a really really nice diversifier and ballast in client portfolio. 0:09:15.920 --> 0:09:19.439 So it's not just about equities. And I think given 0:09:19.480 --> 0:09:22.640 the strength and market that we've seen already year today, 0:09:23.200 --> 0:09:26.440 a pullback on any of those event type things and 0:09:26.520 --> 0:09:28.840 data things that you said coming ahead. We've got a PCE, 0:09:29.200 --> 0:09:31.120 we've got a jobs number that's going to be a 0:09:31.120 --> 0:09:33.880 bit mixed up with the hurricane and bowing and so 0:09:33.960 --> 0:09:35.960 on and so forth, and then we got the election, 0:09:36.040 --> 0:09:38.840 and then we've got the FED. So you know, short term, 0:09:38.880 --> 0:09:41.400 you never know with markets could easily pull back. They've 0:09:41.400 --> 0:09:46.040 been super strong. But remember last Saturday we celebrated Happy Birthday, 0:09:46.160 --> 0:09:49.600 two year anniversary. You know, typically when you make it 0:09:49.600 --> 0:09:52.280 to two years, you make it to three years seventy 0:09:52.280 --> 0:09:54.680 percent of the time, and data going back to like 0:09:54.800 --> 0:09:58.640 nineteen forty nine, and remember the average length of a 0:09:58.679 --> 0:10:01.000 bullmark in the United States is five years and one 0:10:01.080 --> 0:10:04.920 hundred percent. We've done sixty and two years. So we 0:10:05.040 --> 0:10:08.079 got to look forward to twenty twenty five at all 0:10:08.120 --> 0:10:12.360 things being equal, unless there's some big resurgence of inflation, 0:10:13.160 --> 0:10:17.760 Middle East upset, whatever, we are still constructive positive on 0:10:17.800 --> 0:10:18.400 the outlook. 0:10:19.120 --> 0:10:21.680 Hey, Nancy, we had some I guess some conflicting results 0:10:21.720 --> 0:10:23.600 coming out of some of the big chip makers over 0:10:23.640 --> 0:10:25.360 the last week. ASML had a little bit of a 0:10:25.400 --> 0:10:28.640 warning there, actually a big warning, let's be honest. But 0:10:28.679 --> 0:10:32.199 then Taiwan Semika doctor came back strong yesterday. As someone 0:10:32.200 --> 0:10:34.360 who thinks of the chip business as kind of a 0:10:34.440 --> 0:10:37.880 proxy for this whole AI trade here, I'm not sure 0:10:37.880 --> 0:10:40.959 if it's a trader, it's a long term theme. How 0:10:40.960 --> 0:10:43.800 did you kind of deal with those two earnings announcement? 0:10:43.880 --> 0:10:46.160 How do you think about the tech space in AI 0:10:46.360 --> 0:10:47.760 given what we've seen from the chip makers. 0:10:49.080 --> 0:10:51.560 So look, ASML is a bit of a howler there, 0:10:51.600 --> 0:10:54.800 that's for sure. But you know, and we haven't gotten 0:10:54.920 --> 0:10:58.320 full clarification, but the press release from the company talked 0:10:58.320 --> 0:11:00.960 about the fact that it's really not in the A side, 0:11:01.440 --> 0:11:05.160 it's more in what I call you know doubt, you know, 0:11:05.240 --> 0:11:09.640 easier electronics, et cetera, some weakness in end markets of 0:11:09.679 --> 0:11:13.280 where they sell some of their less advanced so called 0:11:13.840 --> 0:11:16.679 you know, chip equipment into. So we don't think that 0:11:16.720 --> 0:11:20.000 plays into at all that there's going to be weakness 0:11:20.040 --> 0:11:23.080 in nvideo. Jensen Wang has made it pretty clear demand 0:11:23.200 --> 0:11:28.080 is on fire. TSMC is forecasting thirty percent growth and revenue, 0:11:28.320 --> 0:11:31.680 So we think the gen Ai and demand for chips 0:11:32.360 --> 0:11:36.080 is very much alive and well so much so, so 0:11:36.320 --> 0:11:39.800 much so that there could be some near term shortages 0:11:39.840 --> 0:11:43.720 as we head into twenty twenty five in components, chips, 0:11:43.720 --> 0:11:46.240 et cetera. And funny enough, before we get to the 0:11:46.280 --> 0:11:49.000 big productivity boom of jen Ai, we're gonna have a 0:11:49.040 --> 0:11:52.439 bit of inflation that comes from these shortages, So something 0:11:52.480 --> 0:11:54.320 we're keeping an eye on, Nancy. 0:11:54.320 --> 0:11:55.760 I think the last time that you and I spoke, 0:11:55.880 --> 0:11:58.480 China had unveiled maybe the first of these initiatives to 0:12:00.160 --> 0:12:03.920 do fiscal stimulus monetary stimulus. There was great excitement about 0:12:03.920 --> 0:12:06.640 that than that ebbed is. There is some skepticism about 0:12:06.679 --> 0:12:08.560 what that actually meant and how China might implement it. 0:12:08.600 --> 0:12:10.400 We got these new growth figures today, which I think 0:12:10.400 --> 0:12:12.600 are on the low end for the last six quarters, 0:12:13.120 --> 0:12:16.000 but some more clarity from the Chinese Central Bank this morning. 0:12:16.520 --> 0:12:18.720 How are you looking at China as you kind of 0:12:18.720 --> 0:12:22.640 look at the investment landscape globally and processing what we've 0:12:22.640 --> 0:12:25.079 heard both from policymakers there on the fiscal side and 0:12:25.120 --> 0:12:26.320 monetary policy side. 0:12:27.679 --> 0:12:30.559 So the good news is in China it's kind of Houston. 0:12:30.600 --> 0:12:33.920 We have a problem, right, So finally China is dealing 0:12:33.960 --> 0:12:37.240 with both the deflation and slow down in the economy. 0:12:37.440 --> 0:12:41.200 But we believe the fiscal and stimulus so far is 0:12:41.280 --> 0:12:44.040 not kind of in the Dragy school of whatever it takes, right, 0:12:44.679 --> 0:12:47.920 we think China probably needs a trillion and a half 0:12:48.000 --> 0:12:51.240 of stimulus fiscal and monetary combined with an emphasis on 0:12:51.280 --> 0:12:53.760 the fiscal. They've done about a third of that, or 0:12:53.760 --> 0:12:56.480 at least hinted at something like that, so we don't 0:12:56.520 --> 0:13:00.880 think it's enough. More importantly, China has some big strugruel issues, right. 0:13:00.920 --> 0:13:03.080 It's got a very high savings rate, it's got an 0:13:03.160 --> 0:13:06.920 aging demographic, unemployment and double digit and lack of the 0:13:06.960 --> 0:13:10.960 social safety net. So that is really a problem for consumption, 0:13:11.320 --> 0:13:13.800 particularly as a lot of those consumers but their money 0:13:13.840 --> 0:13:16.920 and the property market which isn't doing too well. And 0:13:16.960 --> 0:13:20.960 then they've got a strategy for export growth, right, let's 0:13:21.040 --> 0:13:26.000 be manufacturer of a naissance, be the world's leader in manufacturing. 0:13:26.000 --> 0:13:28.600 And the problem is if their domestic economy is weak, 0:13:29.000 --> 0:13:31.559 that creates excess capacity that they want to ship to 0:13:31.600 --> 0:13:33.760 the rest of the world. The rest of the world 0:13:33.760 --> 0:13:37.200 doesn't want it, and so that brings tariffs and trade 0:13:37.280 --> 0:13:40.160 tensions and the like. So look, we think there are 0:13:40.160 --> 0:13:44.600 some cheap Chinese shares, there is some value in the market, 0:13:44.800 --> 0:13:48.079 but overall we think the combination of structural and cyclical 0:13:49.000 --> 0:13:52.600 not yet dealt with by the Chinese authorities. But the 0:13:52.640 --> 0:13:55.600 good news is it's removed what I call the tail 0:13:55.720 --> 0:13:59.960 risk of China kind of dragging the world lower width. 0:14:00.280 --> 0:14:04.000 So in that sense, the monetary and fiscal stimulus is 0:14:04.040 --> 0:14:07.359 a positive from an overall global growth perspective. 0:14:07.800 --> 0:14:09.839 Nancy, thanks so much for joining us, as I always 0:14:09.840 --> 0:14:12.840 appreciate getting your thoughts and your perspective. Nancy Curtin, Folks, 0:14:12.960 --> 0:14:15.640 she's a partner, she's a global CIO. She's the head 0:14:15.640 --> 0:14:19.600 of Investment advisory at alt Ittaman Global. Nancy's been on 0:14:19.880 --> 0:14:23.120 Global Wall Street four decades and we appreciate getting hurt. 0:14:23.400 --> 0:14:27.680 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:14:27.760 --> 0:14:30.960 starting at seven am Eastern on applecar Play and Android 0:14:31.000 --> 0:14:33.880 Auto with the Bloomberg Business app. You can also listen 0:14:33.960 --> 0:14:37.080 live on Amazon Alexa from our flagship New York station. 0:14:37.480 --> 0:14:40.520 Just say, Alexa playing Bloomberg eleven thirty. 0:14:40.840 --> 0:14:43.080 Our next guest, we need to get right to Gatham Maconda. 0:14:43.120 --> 0:14:45.400 He's a lecturer of management practice at the Yale School 0:14:45.400 --> 0:14:49.400 of Management is also the author of Picking Presidents. Gatham, 0:14:49.440 --> 0:14:51.000 thanks so much for joining us here on our studio. 0:14:52.000 --> 0:14:53.680 I don't think anybody knows how we're going to pick 0:14:53.680 --> 0:14:57.720 this president come three weeks time. What's your view of 0:14:57.720 --> 0:15:00.240 this election? In these campaigns kind of where we are today. 0:15:00.440 --> 0:15:02.280 Always a pleasure to be here. Anyone who tells you 0:15:02.320 --> 0:15:04.920 they know what's going to happen is immediately demonstrating that 0:15:04.920 --> 0:15:08.200 they do not know what is going to at So 0:15:08.520 --> 0:15:11.680 when people say it's too close to call, that's basically true. 0:15:11.720 --> 0:15:14.480 I think the Harris campaign seems to feel that they'd 0:15:14.560 --> 0:15:18.120 rather be them than the other guy. I observed that 0:15:18.120 --> 0:15:21.080 the Trump campaign seems to feel that the Harris campaign 0:15:21.120 --> 0:15:23.120 is right because they're acting in a few ways that 0:15:23.160 --> 0:15:25.760 don't seem like someone who thinks that they can tip it. 0:15:26.520 --> 0:15:29.520 Trump has pulled out of four interviews Major interviews CNBC 0:15:29.680 --> 0:15:31.720 sixteen minutes in the last few days. That's kind of 0:15:31.720 --> 0:15:34.120 striking and surprising. For twenty some days to go to 0:15:34.160 --> 0:15:38.400 an election. But the other thing that the big change 0:15:39.040 --> 0:15:40.760 that has happened since Harris came in, and this is 0:15:40.760 --> 0:15:42.720 incredibly static race since you came in, right all these 0:15:42.760 --> 0:15:44.280 people the polls are swinging. No, they're not. 0:15:44.520 --> 0:15:45.720 This is just stable. 0:15:46.320 --> 0:15:49.160 The big changes there's been a convergence in the swing states. 0:15:49.520 --> 0:15:52.240 When Biden was the candidate, he had a path through 0:15:52.280 --> 0:15:55.320 the Midwest and that was it. What's happened since Harris 0:15:55.360 --> 0:15:58.200 is that Arizona, North Carolina, They've all kind of converged. 0:15:58.600 --> 0:16:01.240 And so you do have this odd prospect where what 0:16:01.360 --> 0:16:04.000 is objectively a very close race could become not that 0:16:04.160 --> 0:16:07.120 close in the electoral college on after election day, just 0:16:07.160 --> 0:16:10.600 because all the swing states correlate, and so they carrelate 0:16:10.680 --> 0:16:12.800 for whom That's what no one knows. 0:16:13.120 --> 0:16:15.720 Yeah, that's make sure I was missing something there. 0:16:15.720 --> 0:16:18.280 Okay, you know you bring up polling, and I wanted 0:16:18.320 --> 0:16:20.280 to ask you about this because it's something Paul and 0:16:20.320 --> 0:16:22.920 I have talked about off mic, and that is, there 0:16:22.920 --> 0:16:25.040 are so many polls. We were getting so many of them. 0:16:25.480 --> 0:16:27.800 You look at them in compliment, What did they tell you? 0:16:27.840 --> 0:16:29.200 How do you approach them? I know that there's so 0:16:29.240 --> 0:16:31.320 much skepticism about what they've said in the past, how 0:16:31.360 --> 0:16:33.480 they've been right and wrong. Here we have them at 0:16:33.520 --> 0:16:35.160 such a granular level. So much of what we know 0:16:35.160 --> 0:16:37.800 about these swing states comes from them, and we know 0:16:37.880 --> 0:16:40.400 kind of what issues are most important to voters, how 0:16:40.480 --> 0:16:42.280 much faith do you put into them, and how do 0:16:42.320 --> 0:16:43.680 you look at them kind of holistically. 0:16:43.960 --> 0:16:46.320 Right, So, the polling data in twenty sixteen was actually 0:16:46.320 --> 0:16:48.360 pretty good. The essumate of the popular vote was only 0:16:48.400 --> 0:16:50.320 off by one percent. The polling data in twenty twenty 0:16:50.440 --> 0:16:52.120 was really bad. The estimate of the popular vote was 0:16:52.120 --> 0:16:54.560 off by four percent. What was bad in twenty sixteen 0:16:54.640 --> 0:16:57.240 was the swing state polling, right, which is why the estimates. 0:16:56.880 --> 0:16:57.360 Is two one. 0:16:57.400 --> 0:16:59.760 We're so old, but caveat to that. 0:17:00.080 --> 0:17:00.360 Right now. 0:17:00.600 --> 0:17:02.960 The thing that makes me really question the polls right 0:17:02.960 --> 0:17:07.600 now is how consistent they are. Interesting just polling our 0:17:07.640 --> 0:17:11.720 statistical instruments, normal statistical variation, you should see numbers that 0:17:11.800 --> 0:17:14.680 jump around all the time. Right if Harris is legitimately 0:17:14.840 --> 0:17:17.960 up two percent, let's say she actually is up two percent, 0:17:18.440 --> 0:17:20.120 you should expect to see a fair number of polls 0:17:20.119 --> 0:17:23.440 where Donald Trump is up one We are not seeing that. 0:17:23.480 --> 0:17:25.760 We are just seeing poll after poll after pole coming 0:17:25.800 --> 0:17:27.960 in with roughly the same data over and over again. 0:17:28.359 --> 0:17:30.840 To me, that suggests that the polling companies are hurting 0:17:30.960 --> 0:17:32.320 that nobody wants to explain that. 0:17:32.359 --> 0:17:34.399 What does that mean? When there's hurting polls. 0:17:34.480 --> 0:17:36.600 There's a lot of judgment involved in how you weight 0:17:36.720 --> 0:17:39.439 different populations, how you assess right, are you going to 0:17:39.680 --> 0:17:42.600 use recollections of how people voted four years ago? For example? 0:17:42.600 --> 0:17:44.240 A lot of polls will ask how did you vote 0:17:44.240 --> 0:17:46.520 to four years ago and use that to assess, like, 0:17:46.880 --> 0:17:49.200 you know, to wait the reweight their sample. The problem 0:17:49.240 --> 0:17:51.359 is people don't actually remember that as well as you think. 0:17:51.480 --> 0:17:53.440 If you ask people a few years after the race, 0:17:53.440 --> 0:17:55.800 who did you vote for, on average, more than sixty 0:17:55.840 --> 0:17:57.840 percent will say they voted for the winning side blocked 0:17:57.880 --> 0:18:01.880 it out. This seems unlikely. Yeah, So when you add 0:18:01.880 --> 0:18:05.600 in there are enough subjective factors into polling that it 0:18:05.760 --> 0:18:08.040 just seems to me like the polling companies might be thinking, 0:18:08.080 --> 0:18:11.400 but nobody wants to be embarrassingly wrong, and they're converging 0:18:11.480 --> 0:18:13.840 on a number which you know, like, look, it might 0:18:13.880 --> 0:18:16.119 be right, but it's not normal for it to be 0:18:16.160 --> 0:18:17.960 this type. This consistent across. 0:18:17.640 --> 0:18:18.040 All the polls. 0:18:18.240 --> 0:18:19.600 One of the other shows that I think a lot 0:18:19.600 --> 0:18:22.960 of people are concerned about is we may not know 0:18:23.040 --> 0:18:25.359 the evening of election day who the winner is. We 0:18:25.400 --> 0:18:26.960 may not know the next day or the day after, 0:18:27.080 --> 0:18:28.879 and then oh boy, it could get messy and it's 0:18:28.880 --> 0:18:31.959 two thousand and all over again. But on steroids. What 0:18:32.080 --> 0:18:35.040 is the risk there of that type of scenario developing? 0:18:35.200 --> 0:18:38.880 Quite significant, But it also depends on your definition of noe. 0:18:39.280 --> 0:18:41.639 We did not get the networks who somehow we have 0:18:41.680 --> 0:18:44.400 outsourced the job of calling who wins an election too. 0:18:44.760 --> 0:18:47.480 We did not get the networks to declare until several 0:18:47.560 --> 0:18:50.040 days after the election in twenty twenty. But by eleven 0:18:50.080 --> 0:18:52.720 pm on election night, I was texting people saying one 0:18:52.760 --> 0:18:54.960 hundred percent Biden is going to win, Like I am, 0:18:55.359 --> 0:18:57.960 you know, I will bet my condo right now any 0:18:57.960 --> 0:19:00.840 odds you want Biden's gonna win. So we knew, right, 0:19:00.880 --> 0:19:05.439 we just didn't officially know. Okay, this election I suspect 0:19:05.640 --> 0:19:07.879 will look more like twenty twenty, where we'll have a 0:19:07.920 --> 0:19:10.880 really good sense just because I expect the swing states 0:19:10.880 --> 0:19:13.000 to correlate. I expect you know where what we'd have 0:19:13.000 --> 0:19:14.439 to say is, well, there have to be flips in 0:19:14.520 --> 0:19:17.040 like multiple states to reverse it. That doesn't seem. 0:19:16.760 --> 0:19:17.199 Likely to me. 0:19:17.760 --> 0:19:20.760 But but that doesn't mean that we'll have official knowledge 0:19:20.760 --> 0:19:23.520 because if look, if Harris loses, she's gonna she's gonna 0:19:23.520 --> 0:19:25.000 say I lost them. That will be the end of it. 0:19:25.240 --> 0:19:27.320 But if Trump loses, I don't think there's any chance 0:19:27.320 --> 0:19:29.159 that he'll do anything other than claim it was stolen. 0:19:29.240 --> 0:19:31.600 He'll legally he'll do that, and then we're off to 0:19:31.600 --> 0:19:33.640 the races we really have We really don't have a race, son, 0:19:33.640 --> 0:19:34.520 So what's going to happen after that? 0:19:34.840 --> 0:19:36.560 We have been through this week when both of these 0:19:36.600 --> 0:19:39.000 candidates had made overtures to populations you'd think would not 0:19:39.040 --> 0:19:41.600 be natural supporters and them. So for Kamala Harris, it's 0:19:41.760 --> 0:19:44.879 Republican Republican women voters in Pennsylvania. For Donald Trump, it 0:19:44.920 --> 0:19:46.600 was going down to Miami to speak to this audience 0:19:46.600 --> 0:19:50.760 of Latino voters from the Univision studios there. I'm curious 0:19:50.800 --> 0:19:52.760 sort of what you make of that outreach that they're doing. 0:19:52.760 --> 0:19:54.680 And so when you look at the game plan going 0:19:54.680 --> 0:19:57.480 from here to November, the fifth is the should the 0:19:57.560 --> 0:19:59.959 game be to reach out to those undecided voters, how 0:20:00.080 --> 0:20:02.040