WEBVTT - Stimulus Priced In, Says Mahajan 0:00:02.640 --> 0:00:13.040 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Ley. 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 --> 0:00:27.400 Bloomberg dot Com, and of course, on the Bloomberg John 0:00:27.520 --> 0:00:32.440 nominal yield versus a rising five year five year break 0:00:32.520 --> 0:00:36.920 even gives you a substantial real yield at negative point nine. 0:00:37.920 --> 0:00:40.519 Even with that lift penomenal yields, we've still got a 0:00:40.560 --> 0:00:45.400 substantial negative real yield. Let's continue the conversation with Mona 0:00:45.720 --> 0:00:50.040 John Alliance Global Investors US investment strategist. She joins us. Now, Monor, 0:00:50.080 --> 0:00:52.000 if you disappeared from the market for the last ten 0:00:52.080 --> 0:00:53.920 years and heard us talk about a breakout in tray 0:00:53.920 --> 0:00:56.760 sury yields of eighty basis points, I think you'd wonder 0:00:56.800 --> 0:01:00.680 what planet you've just landed on? Minority basis poicte. When 0:01:00.680 --> 0:01:04.880 can we get a real move on? You know, interestingly, 0:01:04.880 --> 0:01:07.600 from a percentage perspective, this was a pretty real move. 0:01:07.640 --> 0:01:10.240 You know, we're now off the lows of forty six 0:01:10.360 --> 0:01:13.480 basis points from this crisis back up to eighty. What 0:01:13.560 --> 0:01:16.399 we're seeing the markets is pretty consistent here we talked 0:01:16.400 --> 0:01:20.600 about weaker dollar, higher treasury yields, higher gold crisis. This 0:01:20.680 --> 0:01:23.360 is a market that's thinking at some point stimulus is 0:01:23.400 --> 0:01:26.600 going to happen, and also perhaps starting to price in 0:01:26.920 --> 0:01:31.360 over the last few weeks this democratic sweep idea, where 0:01:31.360 --> 0:01:34.440 where in that scenario you do also get more stimulus 0:01:34.440 --> 0:01:36.920 but also more spending. So it does feel like we're 0:01:36.920 --> 0:01:40.080 on a trajectory. To Lisa's point earlier, how high can 0:01:40.120 --> 0:01:42.959 it go? We may not get much more movement from 0:01:43.000 --> 0:01:46.440 these levels until we see actual As Efen says, eyes 0:01:46.480 --> 0:01:49.960 of inflation MONA. Part of this is the glide path 0:01:50.040 --> 0:01:53.720 involved with your computer science background. It's real simple. At 0:01:53.840 --> 0:01:56.280 some point there's a kink, at some point, there's a 0:01:56.360 --> 0:01:59.360 jump condition. Where is that on a ten year yield? 0:01:59.480 --> 0:02:04.120 Is it near year or is it surprisingly much higher? Yeah, 0:02:04.160 --> 0:02:06.960 you know, we think over time, if if inflation is 0:02:07.240 --> 0:02:09.600 in the one and a half to two percent range, uh, 0:02:09.880 --> 0:02:12.560 real GDP growth in the US also probably at some 0:02:12.639 --> 0:02:15.880 point one and a half two percent, as the actual 0:02:16.240 --> 0:02:19.800 GDP growth yields should also at some point be in 0:02:19.840 --> 0:02:21.920 that one and a half to two percent range. Now, 0:02:21.960 --> 0:02:25.880 of course, we're now emerging from a very deep crisis. Uh, 0:02:26.200 --> 0:02:28.560 we don't think that type of level happens in the 0:02:28.560 --> 0:02:31.400 next twelve months or so. But recording the ingredients together 0:02:31.560 --> 0:02:33.959 certainly for an inflationary environment, or at least for pick 0:02:34.000 --> 0:02:37.680 up in inflation expectations. We're keeping rates low, We're adding 0:02:37.720 --> 0:02:41.480 Huey to the system. Growth may be accelerating next year, 0:02:42.080 --> 0:02:44.760 especially if we get those vaccines, especially if we continue 0:02:44.760 --> 0:02:47.440 to get stimulus and investment into the economy, and so 0:02:47.480 --> 0:02:50.400 we are certainly setting up for that pick up in inflation, 0:02:50.480 --> 0:02:53.200 which would lead to a pickup in those yields back 0:02:53.240 --> 0:02:56.280 to more normal levels. Okay, so pick up in those yields. 0:02:56.280 --> 0:02:58.120 In the meantime, there are a lot of people saying 0:02:58.400 --> 0:03:01.120 the reason why yields are rising is because of supply, 0:03:01.480 --> 0:03:03.880 because of the stimulus, because the US will have to 0:03:03.919 --> 0:03:07.120 sell trillions and trillions of additional treasuries. Is that the 0:03:07.160 --> 0:03:10.520 real story here? I'm looking at the total value of 0:03:10.639 --> 0:03:13.040 negative yielding debt globally. It is close to the all 0:03:13.080 --> 0:03:16.680 time high of seventeen trillion dollars. Where else are investors 0:03:16.720 --> 0:03:20.160 going to go for yield other than the United States? Yeah, 0:03:20.200 --> 0:03:22.560 I mean absolutely that that's part of the story. As well. 0:03:22.600 --> 0:03:24.760 And you know, keep in mind, our yield even here 0:03:24.760 --> 0:03:28.680 at eight basis points compared to Europe, Japan, across the globe, 0:03:29.120 --> 0:03:32.600 still relatively fairly attractive. And of course this year in particular, 0:03:32.800 --> 0:03:35.680 treasury bonds have been one of the best performing asset classes, 0:03:36.160 --> 0:03:38.280 not only within fixed income but really across the board, 0:03:38.360 --> 0:03:41.880 especially since that March twenty three low. So clearly there 0:03:42.000 --> 0:03:45.080 is this light to safety, but also this hunt for income. 0:03:45.840 --> 0:03:48.560 But to your other, you know, other point of your question, 0:03:48.680 --> 0:03:50.840 where do people go, Well, they're also looking beyond the 0:03:50.840 --> 0:03:53.960 fixed income market. Clearly there there's been this push for 0:03:54.040 --> 0:03:56.760 investors to to go out the risk spectrum. We're seeing 0:03:56.760 --> 0:03:59.440 that clearly in the US equity markets now more a 0:03:59.440 --> 0:04:02.880 little bit global em but also in parts of higher 0:04:03.680 --> 0:04:07.120 higher risk fixed income as well credit markets UH in 0:04:07.480 --> 0:04:11.080 high yield as well as parts of investment grade. This 0:04:11.160 --> 0:04:13.880 is a familiar conversation for money. The reflation story that 0:04:13.920 --> 0:04:17.080 you described just moments ago, folt that into the equity market, 0:04:17.200 --> 0:04:20.040 and the much talked about rotation that has really alluded 0:04:20.080 --> 0:04:22.880 us over the last couple of months. Yeah, you know, 0:04:23.040 --> 0:04:25.960 that's really the key question here. Will we get over 0:04:26.000 --> 0:04:30.000 the next twelve month period. This much anticipated and much 0:04:30.000 --> 0:04:32.480 alluded over the last ten years rotation into this value 0:04:32.480 --> 0:04:36.200 cyclical trade. Um clearly, and when we looked historically over 0:04:36.240 --> 0:04:39.440 the last ten years, there have been approximately four instances 0:04:39.720 --> 0:04:42.719 where value cyclicals have led in a more sustained way, 0:04:42.760 --> 0:04:45.279 and in that time period usually they're leading for six 0:04:45.279 --> 0:04:48.640 to twelve month period. Over that those four instances, UM, 0:04:48.800 --> 0:04:50.760 we think we could be set up over the next 0:04:50.760 --> 0:04:54.240 twelve month period for another leadership in value cyclicals. And 0:04:54.279 --> 0:04:58.080 of course, um that would be in the scenario where 0:04:58.120 --> 0:05:01.839 we get the vaccines in the latter half of this year. 0:05:01.920 --> 0:05:04.200 Of course, it takes some time to manufacture and distribute, 0:05:04.360 --> 0:05:07.360 but markets will start pricing that in sooner. Of course, 0:05:07.400 --> 0:05:10.160 we'll get that re acceleration hopefully in growth not only 0:05:10.160 --> 0:05:13.159 in the US but globally, and so in that backdrop, 0:05:13.279 --> 0:05:17.599 combined with ongoing low rates and ongoing stimulus, we do 0:05:17.680 --> 0:05:20.600 see a potential for that value cyclogal trade to re emerge, 0:05:20.600 --> 0:05:22.880 and so we think investors should layer that in over 0:05:22.920 --> 0:05:24.760 the next you know, when they get the opportunity over 0:05:24.760 --> 0:05:27.360 the next few weeks. There all these t las out here. 0:05:27.520 --> 0:05:29.760 There was Proctor and Gamble the other day and right 0:05:29.800 --> 0:05:34.200 now there's Nestle coming out and once again organic revenue growth. 0:05:34.240 --> 0:05:35.960 You know, it's not a big deal, but it's just 0:05:36.080 --> 0:05:39.640 simply better than the gloom that's out there. Is that 0:05:39.720 --> 0:05:42.640 the major call for the next two or three years 0:05:43.120 --> 0:05:45.240 that were you know, with the shock of the pandemic 0:05:45.279 --> 0:05:49.560 and the agony of the pandemic. Manchester shutdown is just 0:05:49.640 --> 0:05:54.080 one example. Are we completely misjudging the ability of these 0:05:54.120 --> 0:05:58.400 companies to adjust and to adapt. Yeah, you know, it's interesting. 0:05:58.440 --> 0:06:01.400 I think, uh, last quarter, our second quarter, we certainly 0:06:01.520 --> 0:06:04.039 got a lot of that as well. You know, the 0:06:04.120 --> 0:06:07.240 expectation was, you know, something for a negative decline and 0:06:07.279 --> 0:06:10.960 we came out you know, negative or so, so there 0:06:11.040 --> 0:06:14.600 was a huge lowering of the bar in terms of expectations, 0:06:14.600 --> 0:06:17.760 and there was a nice beat. You know, historically companies 0:06:17.800 --> 0:06:19.560 aren't known to do that keep the bar low, but 0:06:19.600 --> 0:06:22.400 that the percentage of beat was much more substantial than 0:06:22.440 --> 0:06:24.920 we've seen in the past. That could be the trend 0:06:25.000 --> 0:06:27.960 over the next couple of quarters, although we will say, 0:06:28.080 --> 0:06:30.320 you know, over time that probably goes back to more 0:06:30.520 --> 0:06:33.400 historic averages where it's a three to five percent beat 0:06:33.440 --> 0:06:36.560 on average. But to your point, I do think that 0:06:36.560 --> 0:06:40.599 that in many cases. You know, companies have performed much 0:06:40.640 --> 0:06:42.880 better in this crisis than we've seen in the past, 0:06:42.960 --> 0:06:46.080 and partly that's because we've become a more digital, more 0:06:46.120 --> 0:06:49.960 online economy. You know, this acceleration to a more stay 0:06:50.000 --> 0:06:53.440 at home world has really benefited certain companies and really 0:06:53.440 --> 0:06:55.440 has helped a lot of companies across the board. And 0:06:55.480 --> 0:06:58.560 so I do think, uh, the ability for consumers to 0:06:58.720 --> 0:07:01.240 buy online and to to show demand in that way 0:07:01.600 --> 0:07:03.920 has helped. And so we do think this quarter will 0:07:03.920 --> 0:07:06.240 certainly see a nice feed as well, and over time 0:07:06.240 --> 0:07:08.440 it will be more normalized, but we see the ability 0:07:08.480 --> 0:07:12.400 for companies to rebound nicely over the next twelve months. Mana, 0:07:12.440 --> 0:07:15.800 thank you. Always great to catch you up. Thank you 0:07:15.920 --> 0:07:22.680 very much, thank you. This is the interview of the day. 0:07:22.760 --> 0:07:26.120 Unfixed Income. Kevin get Us is with Raymond James and 0:07:26.160 --> 0:07:30.680 critically important. He comes off a trading platform where he 0:07:30.800 --> 0:07:35.440 understands suddenly the bid slips away in fixed income, Kevin 0:07:35.480 --> 0:07:38.520 get Us is the bids slipping away on price in 0:07:38.600 --> 0:07:42.800 full faith and credit. Well, you know, Tom, we're finally 0:07:42.840 --> 0:07:45.040 starting to see this. I you know, a week ago 0:07:45.080 --> 0:07:47.680 I would have said probably not, but we are starting 0:07:47.720 --> 0:07:51.720 to see this period, uh, closer and closer to the election, 0:07:52.320 --> 0:07:55.360 especially if we get this blue way where I talked about, 0:07:55.440 --> 0:07:59.120 because you know, I have these kind of nightmarish feelings 0:07:59.120 --> 0:08:01.720 of two thousands team after the elections. If you're a 0:08:01.760 --> 0:08:04.560 bond guy, you did not expect the outcome and you 0:08:04.600 --> 0:08:07.320 did not expect the price action after the election. So 0:08:07.680 --> 0:08:09.680 I think the bond market and the treasury market in 0:08:09.680 --> 0:08:12.760 particular is underestimating the fact that if you got this 0:08:12.840 --> 0:08:16.120 blue wave or a complete suite, what might occur after 0:08:16.160 --> 0:08:19.240 that and why interest rates are are likely to go 0:08:19.360 --> 0:08:23.080 higher not lower should that occur. So you know, higher spending, 0:08:23.160 --> 0:08:27.560 more taxes, um, increased growth, and growth tends to have 0:08:27.600 --> 0:08:30.600 a friend. Uh it's called inflation. And if all of 0:08:30.600 --> 0:08:33.800 those hit the mark, then yes, rate moves would be 0:08:33.800 --> 0:08:36.880 fairly significant, especially in the ten year and thirty year 0:08:36.920 --> 0:08:39.520 out for the balance of the year. So at one 0:08:39.559 --> 0:08:42.320 pm today, Tom Keene is going to be closely watching 0:08:42.360 --> 0:08:45.800 the twenty year auction of treasuries. I know he watches 0:08:45.880 --> 0:08:49.960 every auction very carefully. Is this a supplies story in 0:08:50.080 --> 0:08:52.760 terms of higher yields going forward or is it, as 0:08:52.760 --> 0:08:56.559 you said, a growth and inflation story. Well, I think 0:08:56.559 --> 0:08:59.000 from a rate movie would be a growth and inflation story. 0:08:59.240 --> 0:09:01.760 We really have a had a problem selling our debt, 0:09:01.800 --> 0:09:03.880 and you guys have mentioned it earlier in the show 0:09:03.920 --> 0:09:07.280 about negative yields in particular, and you look across the globe, 0:09:07.280 --> 0:09:10.800 where are the opportunities. There still is a great opportunity 0:09:10.800 --> 0:09:13.240 and treasuries, especially in the long end of the market, 0:09:13.559 --> 0:09:15.360 but that the door is starting to close. And the 0:09:15.360 --> 0:09:17.199 only way it does close is if we get a 0:09:17.200 --> 0:09:19.880 blue wave, if we get whatever they call it blue 0:09:19.880 --> 0:09:21.600 tied or whatever you want to call where you still 0:09:21.880 --> 0:09:24.320 Republicans control the Senate, and even if you got a 0:09:24.320 --> 0:09:26.720 Democrat or a Republican in the White House, the rates 0:09:26.720 --> 0:09:28.760 aren't going to move that much. I think we're gonna 0:09:28.760 --> 0:09:30.800 be you know, we know what red luck looks like. 0:09:31.240 --> 0:09:34.079 But if you get a kind of a clean suite um, 0:09:34.280 --> 0:09:36.400 I think the treasury market would have to catch up fast, 0:09:36.440 --> 0:09:39.000 which was you know, higher rates across the board. But 0:09:39.040 --> 0:09:43.280 I don't think it hurts financing right now, Kevin, you 0:09:43.320 --> 0:09:46.959 mentioned and it wasn't just the political event that was 0:09:47.040 --> 0:09:49.880 unexpected for money. It was the outcome of that political event. 0:09:50.200 --> 0:09:53.960 The people missed what the red wave would mean for markets, 0:09:54.080 --> 0:09:56.360 what do you think people are missing right now? Kevin 0:09:56.360 --> 0:09:59.920 be specific. We know the consensus people think of blue wave. Increasingly, 0:10:00.000 --> 0:10:02.559 the probability is lifted over the last couple of months. 0:10:02.600 --> 0:10:04.760 What is the I think people are missing about what 0:10:04.800 --> 0:10:08.960 that means. Yeah, the part that they're missing is the 0:10:09.000 --> 0:10:12.480 inflation part of the occurrence um two thousand and sixteen. 0:10:12.520 --> 0:10:14.520 If you remember, we went from a one eight ten 0:10:14.640 --> 0:10:16.599 year the day before the election to it almost a 0:10:16.640 --> 0:10:18.640 two fifty by the end of the year on the 0:10:18.640 --> 0:10:22.719 expectation of deregulation and tax cuts and growth, and that 0:10:22.840 --> 0:10:26.720 what was anticipated was that inflation component that really never came. 0:10:26.760 --> 0:10:29.600 We did see it when the when the GDP peaked 0:10:29.880 --> 0:10:32.560 in the first quarter of two thousand and eighteen, and 0:10:32.600 --> 0:10:35.520 then inflation reach its highest point in May of two 0:10:35.520 --> 0:10:39.080 thousand and eighteen. The point of this is now is 0:10:39.320 --> 0:10:41.880 they're not thinking about it in the ways that you 0:10:41.920 --> 0:10:44.920 would normally think about it. Is that growth will bring 0:10:45.000 --> 0:10:47.240 that inflation at some point in time. It may not 0:10:47.320 --> 0:10:49.360 be in the next few months, but the bond market 0:10:49.360 --> 0:10:52.000 tends to try to get out in front of any uncertainty, 0:10:52.040 --> 0:10:53.439 and I think we're starting to see that now. I 0:10:53.440 --> 0:10:55.520 think we'll see it for the next few months through 0:10:55.559 --> 0:10:58.480 the election. So, Kevin, how would you push this view? 0:10:58.679 --> 0:11:00.920 Three fixed income? Right now? What's the miss price? Do 0:11:00.920 --> 0:11:04.600 you want to take advantage of it? You know, Johnathon, 0:11:04.679 --> 0:11:07.240 it's really still hard to find. But one of the 0:11:07.240 --> 0:11:10.480 things that are really good in either way this goes 0:11:11.000 --> 0:11:13.960 the at tax free mini market is likely going to 0:11:14.040 --> 0:11:16.720 gain if if the prospect of higher taxes is going 0:11:16.760 --> 0:11:20.400 to support that market. Uh an uncertain or continued environment 0:11:20.480 --> 0:11:23.040 is probably gonna support that market. We're still at a 0:11:23.080 --> 0:11:26.719 hundred uh a tax free yields to the ten year 0:11:26.880 --> 0:11:30.640 versus where we were at seventy in the pre crisis period. 0:11:30.640 --> 0:11:33.439 So I still think um that even though a lot 0:11:33.480 --> 0:11:36.560 of state county Missibal credits are coming to market now, 0:11:36.800 --> 0:11:39.559 there is value in the mini market now, no matter 0:11:39.600 --> 0:11:43.480 who takes the White House and who actually owns the Congress. Kevin, 0:11:43.800 --> 0:11:46.360 long agoing far away, we had a Monroe trader where 0:11:46.400 --> 0:11:49.120 we could enjoy price declines. You and I have hallways 0:11:49.160 --> 0:11:51.960 of people that say the bond market never has a 0:11:51.960 --> 0:11:55.000 bear market. Can you model out a bear market to 0:11:55.080 --> 0:11:58.280 come price down and yield up off of my Monroe 0:11:58.320 --> 0:12:03.160 trader calculations? I always said that when my Monroe trader 0:12:03.240 --> 0:12:05.600 stopped working. It was the end of my career, so 0:12:05.920 --> 0:12:08.400 I still have a couple of around Kevin, that's when 0:12:08.440 --> 0:12:10.720 you bought a Bloomberg Thank you and Mike, thank you. 0:12:10.800 --> 0:12:13.680 This morning. Are we uping for a bear market in bonds? 0:12:15.120 --> 0:12:17.600 So we have a potential for it, tom But really 0:12:17.640 --> 0:12:19.840 the only way we're going to see a bear market 0:12:19.880 --> 0:12:23.080 in bonds is if we see this big blue wave 0:12:23.800 --> 0:12:26.400 occur at election time. In my opinion, and the rest 0:12:26.400 --> 0:12:30.120 of it looks like um, we will get increased stimulus 0:12:30.200 --> 0:12:32.760 at some point in time. We we think that maybe 0:12:32.760 --> 0:12:35.839 inflationary somewhere down the road. We're still making up a 0:12:35.880 --> 0:12:37.880 lot of ground from what's happened during the pandemic, and 0:12:37.920 --> 0:12:39.880 we still have the pandemic to deal with. So I 0:12:40.160 --> 0:12:43.800 don't think it's extremely bearish unless we get this scenario 0:12:43.920 --> 0:12:47.080 play out in a blue wave after the election. So 0:12:47.160 --> 0:12:49.920 the reflation trade that you're talking about, this idea of 0:12:50.000 --> 0:12:52.079 higher growth has lit a lot of people to feel 0:12:52.120 --> 0:12:55.600 safe or safer going into the riskiest bonds. And this 0:12:55.679 --> 0:12:58.319 morning I was looking at the spreads, the extra yields 0:12:58.320 --> 0:13:01.600 that investors demand to own the riskiest junk bonds over 0:13:01.679 --> 0:13:04.960 benchmark rates. It is contracted back to February levels. We 0:13:05.000 --> 0:13:07.120 are treating about the average of last year. It is 0:13:07.120 --> 0:13:10.640 as if the pandemic did not happen. Is this market 0:13:10.720 --> 0:13:12.760 right that we are not going to necessarily get an 0:13:12.880 --> 0:13:15.360 escalating default cycle? Is that what this market is saying 0:13:15.640 --> 0:13:18.440 or is it saying something else? Well, at least it's 0:13:18.480 --> 0:13:21.959 saying that, but I'm not sure it fully realizes that 0:13:21.960 --> 0:13:24.720 that may not occur. So I think, as you point out, 0:13:24.760 --> 0:13:26.719 I mean, we are almost to the to the pre 0:13:26.800 --> 0:13:30.599 crisis spread levels, and certainly high grade in I G 0:13:31.120 --> 0:13:35.559 corporate debt, and almost there again on high yield in particular, 0:13:35.640 --> 0:13:38.079 and that's a sector I would be very very careful 0:13:38.120 --> 0:13:42.080 with right now, because you know, to over the tens 0:13:42.160 --> 0:13:45.199 for high yield is not enough of a cushion for 0:13:45.360 --> 0:13:48.400 me based on where I think we're headed. So I think, 0:13:48.720 --> 0:13:52.120 even even so, let's say nothing happens or nothing changes, 0:13:52.440 --> 0:13:55.280 you know, less than three hundred for high yield is 0:13:55.760 --> 0:13:59.520 expensive purchase for a portfolio. From me, I still would 0:13:59.520 --> 0:14:03.920 favor uh I G debt, but realize you're gonna get 0:14:03.920 --> 0:14:05.880 it at less than a hundred basis points. You have 0:14:05.960 --> 0:14:08.160 to be happy with that. So even if we get 0:14:08.240 --> 0:14:11.000 higher yields, spreads would tend to contract even further, but 0:14:11.080 --> 0:14:13.840 you would get paid to high yield versus uh where 0:14:13.840 --> 0:14:16.120 the treasury is now. So I just think that that 0:14:16.280 --> 0:14:19.560 it's an expensive opportunity to take on that additional risk 0:14:19.600 --> 0:14:22.720 and fixed income. Kevin, you live and break this world. 0:14:22.800 --> 0:14:25.000 I just wanted from the conversations you've been having over 0:14:25.040 --> 0:14:27.320 the last few months, the senses a little bit too 0:14:27.360 --> 0:14:32.640 much confidence in credit because of the fedback stop. Yeah, 0:14:32.680 --> 0:14:35.080 there it really is. John. I think that there's a 0:14:35.160 --> 0:14:38.000 point here where, um, we're gonna see a lot more 0:14:38.080 --> 0:14:42.200 bankruptcies because they just have to occur. If especially if 0:14:42.240 --> 0:14:46.520 you don't get stimulus within this calendar year. Uh, that 0:14:46.680 --> 0:14:49.680 is going to have an effect on credits themselves. But 0:14:49.720 --> 0:14:52.760 the offsetting opportunity, and you're seeing this a lot, even 0:14:52.840 --> 0:14:55.200 high yield companies, even the state of Illinois are coming 0:14:55.240 --> 0:14:58.160 in and refinancing. They're debt at much lower yields, building 0:14:58.280 --> 0:15:01.400 cash positions, and they may you this, uh, they may 0:15:01.440 --> 0:15:03.480 be able to ride the storm out without seeing as 0:15:03.480 --> 0:15:07.200 many bankruptcy somewhere expecting. On Bloomberg Radio, on Bloomberg Television, 0:15:07.280 --> 0:15:08.880 Kevin get us with us, and for those of you 0:15:08.920 --> 0:15:10.880 on radio, one of the cool things that Kevin get 0:15:10.960 --> 0:15:16.200 us is the Cincinnati Reds memorabilia behind him, its shape 0:15:16.320 --> 0:15:19.400 get us, Kevin get us. We just lost Joe Morgan. 0:15:20.080 --> 0:15:23.840 Bill James says Joe Morrigan was better than the giant 0:15:24.040 --> 0:15:30.240 Rogers hornsby what did Joe Morrigan mean to your Cincinnati Reds? Well, 0:15:30.280 --> 0:15:32.480 if you remember, and it goes way back, we got him, 0:15:32.600 --> 0:15:35.440 got him from the Houston Astros at that time, and 0:15:35.480 --> 0:15:38.840 it really filled the void, especially hit on second base 0:15:39.280 --> 0:15:41.240 um for the Reds and the big Red machinet at 0:15:41.280 --> 0:15:44.320 that time. So the impact that Joe Morgan had on 0:15:44.360 --> 0:15:48.520 both the organization and afterwards was long lasting. And we 0:15:48.520 --> 0:15:52.120 we were fortunate that he associates to himself or he 0:15:52.200 --> 0:15:56.440 did associate himself with the Reds versus the Astros. Kevin, 0:15:56.480 --> 0:15:58.560 just the final question from me, just to end on 0:15:58.600 --> 0:16:00.960 a more positive note, can you give us a review 0:16:00.960 --> 0:16:03.200 of what you would think of apply like Mookie Batts 0:16:03.200 --> 0:16:05.720 and why a team like the Red Sox would would 0:16:05.800 --> 0:16:11.880 let him go. He's killing me, Kevin Well, I would 0:16:11.920 --> 0:16:15.640 become by default a bigger Dodgers fan that I would admit. 0:16:15.760 --> 0:16:18.880 And I'm just happy that they have Mooky Betts, like 0:16:19.120 --> 0:16:21.840 cut this guy back before the Reds won a title 0:16:22.120 --> 0:16:25.200 in ninety. The Dodgers haven't won one since eight, so 0:16:25.200 --> 0:16:27.000 they've actually been suffering along with us, even though so 0:16:27.360 --> 0:16:29.680 you're telling me, Mookie Bets, is that Joe Morgan of 0:16:29.720 --> 0:16:33.040 the Dodgers. That's what you're saying. Kevin, well for a 0:16:33.120 --> 0:16:34.960 very short period of time. It will let that play 0:16:35.000 --> 0:16:38.960 out over a number of years. Oh, we will thank you, Kevin. 0:16:38.960 --> 0:16:47.640 Get us the Ryman Jacks. Beautiful. This is a joy, 0:16:47.760 --> 0:16:51.360 particularly thirteen days out in the middle of this historic election. 0:16:51.720 --> 0:16:54.840 Wendy Schiller is at Brown University, and it's too modest 0:16:55.200 --> 0:16:57.840 to mention that she is part of the new fifth 0:16:58.000 --> 0:17:01.920 edition of the Great Definitive of Gateways to Democracy. It 0:17:02.040 --> 0:17:05.879 is without question the one volume seven under page thrown 0:17:05.920 --> 0:17:08.159 at the kids and say shut up and read a 0:17:08.240 --> 0:17:11.960 textbook on this American politics. And we're thrilled she could 0:17:12.040 --> 0:17:15.480 join us today from Brown in the fifth edition, Wendy, 0:17:15.600 --> 0:17:18.280 or maybe in the sixth edition to come. You have 0:17:18.359 --> 0:17:22.720 to write about mail in voting. What will you say? Well, 0:17:22.720 --> 0:17:26.800 the world changed for American elections, right, we have close 0:17:26.880 --> 0:17:29.720 to eighty three million people have asked for mail in ballots. 0:17:29.800 --> 0:17:32.280 It's about, you know, at least one third more than 0:17:32.359 --> 0:17:35.560 in previous elections. And they're returning them. And guess what 0:17:35.760 --> 0:17:38.800 they're getting to the boards of elections. They're getting registered, 0:17:38.800 --> 0:17:41.640 they're getting verified, and they're getting counted. So the big 0:17:41.680 --> 0:17:44.639 crisis of that has not yet emerged in what we're seeing. 0:17:44.960 --> 0:17:47.720 And at least thirty seven million of those votes have 0:17:47.760 --> 0:17:50.400 already been cast at both in person and by mail. 0:17:50.720 --> 0:17:53.720 This changes everything about how we vote. It will probably 0:17:53.800 --> 0:17:56.119 lead to a higher vote turnout this year and in 0:17:56.160 --> 0:17:59.359 subsequent years, and it makes for a more engaged public. 0:17:59.800 --> 0:18:03.040 From a business educational political standpoint, you want people to 0:18:03.119 --> 0:18:05.399 be engaged. If you don't want your tax dollars wasted. 0:18:05.560 --> 0:18:07.800 You want people to be engaged. If they can vote 0:18:07.800 --> 0:18:10.520 more easily, they'll be more engaged. So I think this 0:18:10.600 --> 0:18:13.159 is a big factor coming out of One of the 0:18:13.200 --> 0:18:15.880 problems is you had a Brown PhD student a couple 0:18:15.880 --> 0:18:18.280 of years ago who wrote four hundred pages on Mayor 0:18:18.400 --> 0:18:23.760 Daily JFK stealing the election. How do we get away 0:18:23.800 --> 0:18:27.359 from that thinking? Well, I mean the thinking that people 0:18:27.400 --> 0:18:29.919 will steal it. I think that's a hard thing, right, 0:18:29.960 --> 0:18:32.239 That's been ingrained, as you well know, because you know 0:18:32.320 --> 0:18:35.280 your history. Ever since we basically started with these sort 0:18:35.280 --> 0:18:38.320 of protected elections called the Australian ballot in about the 0:18:38.320 --> 0:18:41.680 eighteen eighties, everybody's been worried about that. But so far 0:18:41.920 --> 0:18:44.760 you have a lot of county boards, both Republican Democrat 0:18:44.840 --> 0:18:47.600 areas of the country that aren't counting votes and aren't 0:18:47.640 --> 0:18:49.960 losing them yet. So we have to go through that now. 0:18:50.000 --> 0:18:52.919 Whether you reject about because the signature isn't right or 0:18:53.000 --> 0:18:56.520 something's wrong with it, that's really locally controlled and that 0:18:56.560 --> 0:18:58.680 will be the point of contention if this turns out 0:18:58.680 --> 0:19:01.159 to be a close race, Wendy, given the success of 0:19:01.240 --> 0:19:04.399 mail in ballots, is there any talk about shifting to 0:19:05.080 --> 0:19:08.159 I don't know, an electronic method of voting. Considering that 0:19:08.200 --> 0:19:11.920 we are in and the world is digital, we said, 0:19:11.920 --> 0:19:14.520 that's a great question. But I think there's still some 0:19:14.600 --> 0:19:18.640 big distrust about hacking, particularly since that's made a big 0:19:18.680 --> 0:19:21.679 focal point in terms of the Russian hacking, the Chinese hacking, 0:19:21.720 --> 0:19:25.240 American hacking. You know, thinking about hacking and machines, people 0:19:25.240 --> 0:19:27.320 are still worried about that. I don't know if American 0:19:27.400 --> 0:19:30.640 voters are are interested in trusting that to the point 0:19:30.680 --> 0:19:33.480 of giving up this sort of ritual of filling out 0:19:33.480 --> 0:19:36.600 a ballot and and handing in and signing it and 0:19:36.600 --> 0:19:39.680 showing identification. I'm not sure anyone's willing to move there, 0:19:40.280 --> 0:19:42.960 you know, in the next decade. But I think that 0:19:43.200 --> 0:19:46.159 just the fact that we we get more engaged, just 0:19:46.240 --> 0:19:49.040 the fact that we realize it should be easy to vote, 0:19:49.480 --> 0:19:52.120 that's a huge difference. And I think that comes out 0:19:52.160 --> 0:19:54.600 of a lot of discontent with the system on all 0:19:54.640 --> 0:19:57.480 sides of the political spectrum. You just want to run 0:19:57.480 --> 0:19:59.520 through these headlines coming from White House Chief of Staff 0:19:59.560 --> 0:20:01.560 moth Met, speaking of Fox News in the last couple 0:20:01.560 --> 0:20:04.399 of minutes, plans to talk to the Senate Republicans and 0:20:04.440 --> 0:20:08.000 Pelosi staff members on relief talk. Still a number of 0:20:08.040 --> 0:20:11.120 issues to work on, and the main issue, the biggest 0:20:11.160 --> 0:20:15.600 issue remains still state, local and government aid and Tom 0:20:15.680 --> 0:20:17.720 that has paen the issue. Yeah, that's your I think 0:20:17.760 --> 0:20:20.560 the last three hunts totally agree on John. I think 0:20:20.840 --> 0:20:24.360 Mr meadows Is is dead on Wendy Schiller. There it is, 0:20:24.440 --> 0:20:28.280 but it's just not Democrats, cities and government is a 0:20:28.359 --> 0:20:31.159 president of others paying it. Isn't it true that there 0:20:31.200 --> 0:20:36.040 are so called Republicans states and cities and towns that 0:20:36.119 --> 0:20:39.480 will be effective if they don't act. Of course, places 0:20:39.520 --> 0:20:44.560 like Ohio, Michigan, Pennsylvania, North Carolina, everybody's experienced in search. 0:20:44.680 --> 0:20:47.199 Everybody's had to spend a lot more money. Even educational 0:20:47.240 --> 0:20:50.880 systems have spend more money to reconfigure their classrooms. There's 0:20:50.880 --> 0:20:53.520 a tremendous amount of need across the country. But the 0:20:53.600 --> 0:20:57.480 cynical view in me says that McConnell's looking at he's 0:20:57.560 --> 0:20:59.920 looking at his people, has got a good year look 0:21:00.000 --> 0:21:02.720 at two for the Republicans. If they lose the Senate 0:21:02.760 --> 0:21:05.200 this year barely, they'll get it back, or they'll try 0:21:05.200 --> 0:21:08.560 to in two. If you add two more trillion dollars 0:21:08.560 --> 0:21:10.879 to the deficit, then you've got Republicans running on a 0:21:10.880 --> 0:21:13.560 four trillion dollar deficit, which isn't a good look for them. 0:21:13.840 --> 0:21:16.560