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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: the best in economics, finance, investment, and international relations. You

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Speaker 2: can also watch the show live on YouTube. Visit the

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Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday

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Speaker 2: mornings from seven to ten am Eastern from our global

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Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify,

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Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Widely anticipated.

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Speaker 2: Thank you for your comments out on YouTube, and I've

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Speaker 2: seen an email as well. Joining us in his busy

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Speaker 2: day Gene Munster right now on Nvidia. He is with

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Speaker 2: Deep Water Asset Man Management Gene. Right before the earnings

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Speaker 2: idiocy yesterday afternoon, the pro stepped in Gene Monster with

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Speaker 2: I think the absolute smartest insight I've seen. We mentioned

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Speaker 2: it earlier with Man Deep Sing and that the purchasing

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Speaker 2: transaction people for Nvidia are not so much going to

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Speaker 2: play hardball, but they're going to say to their customers,

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Speaker 2: don't give me this you're not going to buy the

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Speaker 2: next revenue stream of older chips waiting for the new chip.

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Speaker 3: You don't get the new.

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Speaker 2: Chip unless you buy the old chip. Expand on that,

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Speaker 2: gene Monster.

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Speaker 4: The Osborne effect, and that of course is when you

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Speaker 4: have an existing product that is going to be replaced

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Speaker 4: by a new product, that new product is not yet available,

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Speaker 4: and historically that causes the existing product sales to dip significantly.

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Speaker 4: We see that companies over the years, they'll blow up

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Speaker 4: ahead of a new product cycle. In the case of Nvidia,

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Speaker 4: they were really astute in terms of how they have

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Speaker 4: been communicating this to customers over the past three months.

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Speaker 4: That was the time three months ago when they announced

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Speaker 4: this new Blackwell chip and they said, exactly like you mentioned,

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Speaker 4: if you guys want the new chip of this fall,

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Speaker 4: you got to keep buying ours seeing Hopper chip. And

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Speaker 4: that in fact did happen.

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Speaker 2: It worked. And I want to point out here because

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Speaker 2: gene Monster's far too young, Lisa Matteo's grandfather probably had

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Speaker 2: one the Osborne effect. It's not some NBA at Northwestern.

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Speaker 2: The Osborne effect is the Osborne computer that I spent

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Speaker 2: two four hundred and ninety five dollars on forty fifty

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Speaker 2: years ago, and Gene Muster knows that's probably fifteen thousand dollars.

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Speaker 2: I'm the only one in the world still alive actually

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Speaker 2: bought an Osbourne computer.

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Speaker 3: Gene Muster.

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Speaker 2: I went over to Nvidia yesterday and I mentioned this

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Speaker 2: to Paul Sweeney earlier that what I sense here radically

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Speaker 2: different is I don't sense ego driven tech boy in

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Speaker 2: the leadership of Nvidia. They're CFO statement, they're accounting clarity,

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Speaker 2: the stock split, the dividend lift and all that. Are

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Speaker 2: they rapidly trying to be a mature company to join

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Speaker 2: something like the Dow Jones Industrial Average.

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Speaker 4: Absolutely, I mean they are a mature company. They're going

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Speaker 4: to do over one hundred billion revenue this year, call it.

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Speaker 4: It's going to be approaching the three trillion dollar market cap,

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Speaker 4: one of the top three companies. And they're acting like it.

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Speaker 4: They do not act like people who are trying to

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Speaker 4: pump up a theme. They're being the results are backing

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Speaker 4: it up. The guidance is backing it up. They beat

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Speaker 4: a high bar by six percent, they guide it up

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Speaker 4: July by five percent, and those guidance and I think

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Speaker 4: this is a sign of a mature management team. They

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Speaker 4: keep exceeding. Over the last four quarters, they've been exceeding

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Speaker 4: those expectations, and so that discipline around guidance is yet

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Speaker 4: another example I think of how they are being mature

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Speaker 4: about this, and they got good reason to be feeling

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Speaker 4: good about things for for two reasons. One is that

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Speaker 4: they've got products that no one else has, and separately

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Speaker 4: is they're still in the early innings of what is

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Speaker 4: going to be the most breathtaking shift in technology that

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Speaker 4: we've seen in the past one hundred years.

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Speaker 5: Gene, you've been so out in front of this. You

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Speaker 5: know a lot of what I know about this AI

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Speaker 5: business I learned from you. But talk to us about

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Speaker 5: the competitive environment here. I mean, I was going to say,

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Speaker 5: they're not I mean, where are the competitors here? Can't

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Speaker 5: they come up with a chip that's comparable to compete

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Speaker 5: with these guys.

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Speaker 4: I remember, we're invested in a deep water investing with

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Speaker 4: private and public companies, and one of our private companies

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Speaker 4: builds chips, and we invest in this company, in AI

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Speaker 4: chip company, it's called Rain in twenty eighteen. And when

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Speaker 4: we think about their business, they do not sip Capex

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Speaker 4: they gulp Capex and when you think about the competitive

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Speaker 4: set here, it is really limited to a small number

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Speaker 4: of companies that can invest tens of billion dollars, billions

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Speaker 4: of dollars a year in two building these applications. And

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Speaker 4: so I think that that's one big piece. There are

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Speaker 4: kind of some glimmers of competition, most of those coming

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Speaker 4: from the hyperscalers like Google and Microsoft are working on

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Speaker 4: their own chips. But for the most part, Paul, they're

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Speaker 4: running the table. And just one more piece on the

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Speaker 4: competitive threat. Please, three years ago, Elon must talked about

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Speaker 4: their Dojo chip, their Dojo computer that was going to

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Speaker 4: power autonomy on Tesla, and yesterday during the call, the

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Speaker 4: cfo's lead comments led with both Tesla and Xai. Of course,

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Speaker 4: both my Elon companies, those embracing the Nvidia chips, and

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Speaker 4: so even the companies that want to compete with them

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Speaker 4: realize that the return on investment for video's highest.

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Speaker 2: Geane would get a really good comment, a respectful comment

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Speaker 2: out on our live chat on YouTube. Ryan, thank you

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Speaker 2: so much, and Ryan says it's a great comment. Please

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Speaker 2: move on from Nvidia. There is other news except gene Monster.

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Speaker 2: There isn't explain to Ryan and me the Nvidia effect

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Speaker 2: on everything else out there, not what it means for Microsoft,

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Speaker 2: not what it means for some tech fanboy in some

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Speaker 2: cappuccino place with.

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Speaker 3: You out on the West Coast.

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Speaker 2: What does Nvidia mean for Lisa Matteo, Ryan or Tom Keane.

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Speaker 4: In Vidia's current trajectory of the business, the just reported

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Speaker 4: April quarter means that we are moving more quickly to

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Speaker 4: artificial general intelligence. And when we hit that, the game

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Speaker 4: changes for all companies. Every information worker, every technical worker

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Speaker 4: is going to be impacted by this. And so the

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Speaker 4: reason why we're so hyper focused on what Nvidia is

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Speaker 4: doing is that they are really the leading, the very

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Speaker 4: tip indicator in terms of the speed and the rate

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Speaker 4: of change that we're going to see around AI. And

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Speaker 4: that's why it matters.

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Speaker 2: Should they replace I'm just picking the names Cisco or

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Speaker 2: Intel in the Dow Jones Industrial Average?

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Speaker 3: Is it now? This is the moment where in video

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Speaker 3: is like a doubt stock.

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Speaker 2: It should be.

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Speaker 4: I mean, this is the guard I think has changed

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Speaker 4: a couple or a year or so ago, And I

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Speaker 4: think the bigger question is do you think that this

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Speaker 4: will continue? I absolutely believe what we saw last night

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Speaker 4: as an indication that this is going to continue. I

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Speaker 4: still believe we're in the front of a three to

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Speaker 4: five year bull market powered by AI that's going to

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Speaker 4: end in a spectacular bubble. But the front end of

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Speaker 4: that that bull market is going to be quite exciting.

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Speaker 2: Let us know when the bubble's near. Geane call back.

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Speaker 2: Please let us please help Lisa with the bubble.

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Speaker 3: Gane monster out front of the bubble. Thank you so much.

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Speaker 2: With deep water asset, Benjamin, let's talk to an adult here, Yes,

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Speaker 2: particularly with.

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Speaker 3: All that's going on with nvidiot.

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Speaker 2: The new highs Nastak futures up two hundred and eight points.

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Speaker 2: Amy was Silverman is expert. I'm trying to explain the

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Speaker 2: dynamics in the nuances expectations. Amy was silverman on the

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Speaker 2: Bloomberg where we on the high ground on this. I

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Speaker 2: bring up ENVDA equity, OVDV and I can look at

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Speaker 2: the SKEW, I can look at the term, I can

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Speaker 2: look at the three D service and.

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Speaker 3: I'm really not sure what it says.

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Speaker 2: Could you use your tools to glean a nuance of

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Speaker 2: the expectations of nvidio?

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Speaker 1: Sure, good morning guys. So look, you know in video

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Speaker 1: is one that we've been watching with baited breath, obviously,

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Speaker 1: And the super interesting thing was going into earnings last night,

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Speaker 1: the options market was implying about an eight and a

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Speaker 1: half percent move. So far, we actually they haven't beaten that,

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Speaker 1: but you know, the day is young. And the second

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Speaker 1: thing I'd say was we didn't have much right tail

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Speaker 1: tom which is super interesting for in Vidio because that's

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Speaker 1: one where we've seen a lot of right tail chase.

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Speaker 1: That sentiment wasn't there. What I think we really need

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Speaker 1: to watch today is that that right tail is game

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Speaker 1: on because of everything we saw during earnings last night.

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Speaker 2: Does it fold over into the rest of the magnificent

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Speaker 2: forty two or the nastic one hundred. I mean, folks,

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Speaker 2: I think we all understand left tails gloom, right tails

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Speaker 2: a certain confidence. Does this a new regime of confidence

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Speaker 2: from the Nvidia announcement?

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Speaker 1: Yeah? Look, you know one thing we've talked about is

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Speaker 1: not just looking at the kind of OGAI names like

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Speaker 1: in Vidio, but to look at the adjacent names because

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Speaker 1: in some cases that ball is still less expensive and

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Speaker 1: you still get that right tail chase. So you know,

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Speaker 1: one thing we've been talking about is don't just look

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Speaker 1: at Nvidia, look at the other names like ADI or AMD,

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Speaker 1: Microsoft others that also have AI conference is going on,

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Speaker 1: because a lot of times you'll see that proxy correlated

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Speaker 1: move Tom of the right tail spot up volatility of

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Speaker 1: not just for Nvidia, but for that entire space when

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Speaker 1: the enthusiasm starts to bubble.

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Speaker 5: Tom Amy Moosilverman is a graduate of Prince University, So

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Speaker 5: I'm dying to ask her what her favorite sandwich is

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Speaker 5: at Hogi Haven, but I'm gonna be professional and not

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Speaker 5: go there. Amy, can you just define for this non

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Speaker 5: derivatives person what right tail and left tail is?

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Speaker 1: Sure, Okay, I have to say it's the meatball sub.

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Speaker 1: I just have to put it in there because Princeton

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Speaker 1: Princeton Reunions are this weekend, so I definitely have tigers

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Speaker 1: on my mind. But look, right tail is the idea

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Speaker 1: normal distribution of that reach for upside. You know, that's

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Speaker 1: where we see the fomo and the momo. That's where

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Speaker 1: we see the call demand. And the left tail, which

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Speaker 1: unfortunately has been dead for quite a while, is your

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Speaker 1: equity skew. It's that demand for downside protection, which apparently

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Speaker 1: these days nobody seems to want, Hey.

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Speaker 5: Amy, I'm just looking at the you know, Tom forces

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Speaker 5: us on a daily basis to look at the VICS,

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Speaker 5: and it's now below twelve, firmly below twelve. What does

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Speaker 5: that tell you?

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Speaker 1: Yeah, I think, yeah, we hit sub twelve. We're circling eleven.

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Speaker 1: You know, I'd say, look, there's two things. One, index

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Speaker 1: volatility has been quite low for some time. There are

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Speaker 1: some artificial reasons why this is happening, and there's just

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Speaker 1: some economic reasons because things look okay, because the breadth

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Speaker 1: of the market still, you know, is very much mag

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Speaker 1: seven driven, even if the breath that's doing okay. But

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Speaker 1: look the rise of zerodte, the idea that almost fifty

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Speaker 1: percent of all SPX volume these days is zero day

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Speaker 1: to xpray trading. Look, that does matter, and that is

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Speaker 1: influencing these headline numbers, because VIX is just a thirty

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Speaker 1: day weighted average of imply volt across calls and puts.

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Speaker 2: Is how do you define exuberance? I mean, financial media

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Speaker 2: people toss around exuberance. We read it from Schiller, we

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Speaker 2: read it from green Span. How does Amy wouse over

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Speaker 2: and measure exuberance?

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Speaker 1: I can actually give you the technical definition that we

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Speaker 1: use it's twenty five delta put minus twenty five delta

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Speaker 1: call implied ball over at moneyball. If that number, if

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Speaker 1: that number is inverted, right, if it goes negative, it

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Speaker 1: means that the call implied volatilities outwighing put demand. It's

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Speaker 1: something we actually look at quantitatively on a systematic basis

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Speaker 1: for signals.

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Speaker 3: Okay, what you.

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Speaker 2: Just got there, folks, is an insight into the adult

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Speaker 2: world of derivatives. They take the enthusiasm of the call up,

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Speaker 2: they take the enthusiasm of the put down, and then

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Speaker 2: they compare it to the enthusiasm at the point the

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Speaker 2: center point. I do, okay there, I think it is Sheldon.

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Speaker 2: Sheldonnatenburg's in Chicago, going time. Just shut up and let

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Speaker 2: Amy talk. Amy, what when you write your research note

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Speaker 2: for Monday or frankly to get into June thirty, what

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Speaker 2: are you going to say about the signals you see

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Speaker 2: of expectation.

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Speaker 1: You know, one thing I'm going to be running the

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Speaker 1: numbers on today is how much of that coll exuberance

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Speaker 1: which we just defined there is going skew inverted again?

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Speaker 1: Because when we get into these cycles of momentum, begets momentum.

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Speaker 1: It's very hard to stop that train. That's why it

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Speaker 1: was super interesting to me that we didn't see it

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Speaker 1: coming into Nvidia. The question now is if it will

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Speaker 1: start to inflect because you know that stock split it

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Speaker 1: really gets the retail going. It doesn't seem like it

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Speaker 1: would from a corporate finance one oh one. But we

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Speaker 1: saw the same thing happen with Tesla because you start

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Speaker 1: to get new periods of participation too.

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Speaker 5: Amy for better or worse, this is an election year.

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Speaker 5: Do you see trading patterns in your derivatives market pick

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Speaker 5: up change more for a little bit here in an

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Speaker 5: election year? Because boy, you know, depending upon who wins

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Speaker 5: in November can have an impact on financial markets broadly defined.

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Speaker 1: Yeah, look, I'll tell you one scenario that investors have

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Speaker 1: started to toss around as an exogenous risk. So it's

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Speaker 1: not the idea of if Trump or Biden wins, it's

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Speaker 1: basically the idea of a contested election. This is something

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Speaker 1: our chief strategist has talked about as well. But the

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Speaker 1: issue is when you get an actual contested election where

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Speaker 1: it is unclear who the winner is come November, then

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Speaker 1: essentially your Vick's term structure isn't pricing that right it's

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Speaker 1: pricing a hump for elections itself. It's not pricing a

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Speaker 1: two thousand style question mark. And that's where I think

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Speaker 1: we could see a pocket of volatility that isn't baked

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Speaker 1: into the left tail, and that could be concerning to investors.

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Speaker 2: Amy with Silverman, thank you so much, greatly, greatly appreciate

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Speaker 2: it this morning to reset folks. For those of you

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Speaker 2: who just joining us on applecarplay on YouTube around the nation,

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Speaker 2: Good morning, Bloomberg Radio eleven three to zero, the Vicks

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Speaker 2: under twelve eleven point six one.

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Speaker 3: That's an HOLU with Silverman number.

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Speaker 2: Wendy Schiller from Brown University joins us right now. Wendy's

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Speaker 2: a cottage industry figuring out how the Conservatives ran to

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Speaker 2: the middle to finally get elected. And it basically, you know,

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Speaker 2: back in ancient history, very old water down in flames.

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Speaker 2: And then Reagan went out anything and he lost to

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Speaker 2: Gerald Ford, and I remember that clearly. And then all

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Speaker 2: of a sudden, Reagan defeats Carter, and the whole mood

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Speaker 2: was to go out and find the Reagan Democrats for

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Speaker 2: the president. Where are the Biden Republicans?

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Speaker 6: Well, I mean the Biden Republicans are people who now

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Speaker 6: call themselves independents because they don't want to be associated

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Speaker 6: with Donald Trump. I mean, so you know, we had

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Speaker 6: independence before. We always have people who switched their votes,

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Speaker 6: but that number has grown over time, not that much,

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Speaker 6: but maybe five to eight percent. And that five and

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Speaker 6: eight percent is really after twenty sixteen, where they can't

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Speaker 6: go back and vote for Trump in twenty twenty. So

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Speaker 6: they call themselves independence, but they vote for Republicans for

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Speaker 6: Senate and House and at the state level. So that's

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Speaker 6: the bubble of people who formerly known as Republicans that

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Speaker 6: Biden wants to remind that they rejected Trump a couple

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Speaker 6: of times already our Trump want to be used in

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Speaker 6: twenty twenty two, and therefore if they should come back

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Speaker 6: to him. And you know, this is such a precarious

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Speaker 6: election in the sense that really we don't know what

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Speaker 6: it will actually hinge on in October November. Right, the

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Speaker 6: economy is generally very good, except for inflation, but very good,

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Speaker 6: and we don't see a lot of indicators that's going

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Speaker 6: to change a lot between now and November, at least

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Speaker 6: with the unemployment. Right, So what is going to be

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Speaker 6: the issue or is there even a single issue? Is

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Speaker 6: it just now multiple issues to different groups of voters.

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Speaker 2: Can you imagine Nicky Haley falls on the sword ye

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Speaker 2: decides she's going to vote for Trump. But can you imagine,

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Speaker 2: Professor Schiller, that the people that support Nicky Haley will

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Speaker 2: then go over and support President Biden.

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Speaker 3: Can you make that leap?

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Speaker 6: It all depends on how this summer unfolds with Donald Trump.

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Speaker 6: I mean, Donald Trump has been relatively restrained, either either

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Speaker 6: by court order or because his campaign is doing a

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Speaker 6: good job of that. But you can image it. That's

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Speaker 6: certainly at the convention and afterwards he's going to let

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Speaker 6: loose because he's already won the nomination again and he

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Speaker 6: thinks he's going to win. He's up in the polls.

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Speaker 6: He's not going to be controllable. And the question is

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Speaker 6: how bad does that get and what kind of vision

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Speaker 6: does that present for the future for anybody who didn't vote.

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Speaker 2: For him before?

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Speaker 6: I mean, do you really want him back? So to me,

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Speaker 6: they're still unknown. I think they're going to be the

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Speaker 6: undecided in the polling in October November, and it's undecided

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Speaker 6: about whether they're going to vote, not who they're going

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Speaker 6: to vote for. They're not going to vote for Trump.

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Speaker 6: They're not going back to Trump. So that's the thing

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Speaker 6: for Biden. But again, things like forgiving more student loans

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Speaker 6: when there are student protests is bad politics. That's just

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Speaker 6: bad politics. But Biden has not seemed to care about

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Speaker 6: that much in the last couple of years. He just

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Speaker 6: does what he thinks is the right thing to do.

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Speaker 5: So, Wendy Hear, here's a question. It's just a really

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Speaker 5: broad question. Where are the pre twenty fifteen I'm thinking

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Speaker 5: the day before former President Trump came down the escalation

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Speaker 5: at Trump Ploset. Where is that Republican Party today?

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Speaker 6: I think as a party, that party is gone. That

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Speaker 6: party is erased as a sort of functioning powerful party.

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Speaker 6: It doesn't dictate policy at the state level anymore in

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Speaker 6: state legislatures. It doesn't control the House of Representatives anymore.

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Speaker 6: There are a few holdouts in the Senate, but you

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Speaker 6: can hear the voices of the most conservative senators in Bolden.

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Speaker 6: Rick Scott just announced senator from Florida who's running for reelection.

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Speaker 6: He must be quite confident that he's going to win

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Speaker 6: that race, that he's going to put in for a

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Speaker 6: Senate majority leader against John Cornyn and John Thune are

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Speaker 6: not liberal, but they're considered more mainstream established a Republican.

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Speaker 6: But he's going to run as kind of a Trump guy.

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Speaker 6: And you can see how the Trump wing of the

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Speaker 6: party is taking over all of the mechanisms of government.

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Speaker 6: And when parties cease to control government, they cease to

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Speaker 6: be able to function and deliver for their constituents. So

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Speaker 6: that wing of the party functionally is dying. It's not dead.

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Speaker 6: So that's the big question mark whether that happened, you know.

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Speaker 6: So that's the thing that Republicans have to ask themselves.

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Speaker 6: If Trump wins again, it's the nail in the coffin

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Speaker 6: for the establishment Republican party. And that's just a fact.

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Speaker 6: So how do they how boil are they to that

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Speaker 6: version of the party. And I don't think they even

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Speaker 6: know the answer that question, all right.

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Speaker 5: So for former President Trump, it doesn't seem like any

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Speaker 5: of his legal issues, including the case in New York

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Speaker 5: City at the moment, has any real impact on his

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Speaker 5: political standing. It's just shocking to me. But is that

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Speaker 5: kind of where we are?

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Speaker 6: Well, I mean, you know, even after January sixth, I mean,

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Speaker 6: his own party sort of got mad at him, for

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Speaker 6: two weeks and then they all went tomorrow Largo and

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Speaker 6: many of them, Kevin McCarthy included, to say, okay, we

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Speaker 6: forgive you. And now they're showing up in New York

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Speaker 6: to say we're standing by you. I mean, it's a

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Speaker 6: new age of politics where there doesn't seem to be

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Speaker 6: a limit on what a politician can do without penalty

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Speaker 6: in the polls at least. But remember Donald Trump lost

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Speaker 6: the election in twenty twenty and his surrogate lost the

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Speaker 6: election in twenty twenty two, and we're forgetting that history.

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Speaker 6: So you know, the idea that he's going to win

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Speaker 6: again easily or his surrogates are going to win again easily.

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Speaker 6: That defies the last couple of years of history in

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Speaker 6: terms of our elections.

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Speaker 2: Why can't we have an election length? Like the British

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Speaker 2: professor Schiller. There's got to be some thesis at Brown

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Speaker 2: University over how do we take a three year extravaganza

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Speaker 2: and dash it down to six, seven, eight weeks?

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Speaker 3: How do we do that?

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Speaker 6: Well? So the reason I think you probably already know

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Speaker 6: the answer. I think it's rhetorical, is that the development

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Speaker 6: of mass based political parties, starting with Andrew Jackson, but

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Speaker 6: going all the way and then have parties controlling government.

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Speaker 6: As government gets bigger, there's more to control, more to

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Speaker 6: give out to your loyal, loyal people. So parties become

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Speaker 6: a business and organizations and primaries are good for the

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Speaker 6: business because then people stay in the organization.

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Speaker 3: Parties.

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Speaker 6: You know, parties say, oh you lost control, but they

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Speaker 6: control the primaries. So it builds up the party to

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Speaker 6: have the primary system. And that's why we have such

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Speaker 6: a long long campaign with Martin van Buren ran today.

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Speaker 3: Would he be a Republican or a Democrat?

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Speaker 6: Well, you know he was. It's funny because in those

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Speaker 6: days they were Democrat Republicans. So it's very confusing. But

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Speaker 6: you know, in the meantime, let's look at the signals

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Speaker 6: that we're getting from these state the state Senate races,

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Speaker 6: in other words, that US Senate races in the swing states.

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Speaker 6: Watch those and watch the poll numbers over the summer

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Speaker 6: and see if those Democrats are holding on. And if

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Speaker 6: they're holding on, there's more hope for bidden.

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Speaker 2: Wendy Schiller of Brown University truly one of our definitive textbooks.

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Speaker 3: On civics in America.

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Speaker 2: Wendy Schiller from Brown University joins us right now, Wendy's

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Speaker 2: a cottage industry figuring out how the Conservatives ran to

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Speaker 2: the middle to finally get elected. And it basically, you know,

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Speaker 2: back in ancient history, Barry Goldwater down in flames, and

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Speaker 2: then Reagan went out anything and he lost to Gerald Ford,

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Speaker 2: and I remember that clearly. And then all of a sudden,

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Speaker 2: Reagan defeats Carter, and the whole mood was to go

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Speaker 2: out and find the Reagan Democrats for the president. Where

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Speaker 2: are the Biden Republicans?

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Speaker 6: Well, I mean the Biden Republicans are people who now

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Speaker 6: call themselves independents because they don't want to be associated

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Speaker 6: with Donald Trump. I mean, so you know, we had

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Speaker 6: independence before. We always have people who switched their votes,

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Speaker 6: but that number has grown over time, not that much,

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Speaker 6: but maybe five to eight percent. And that five and

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Speaker 6: eight percent is really after twenty sixteen, where they can't

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Speaker 6: go back and vote for Trump in twenty twenty. So

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Speaker 6: they call themselves independence, but they vote for Republicans for

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Speaker 6: Senate and House and at the state level. So that's

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Speaker 6: the bubble of people who formerly known as Republicans that

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Speaker 6: Biden wants to remind that they rejected Trump a couple

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Speaker 6: of times. Already our Trump want to be is twenty

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Speaker 6: twenty two, and therefore if they should come back to him.

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Speaker 6: And you know, this is such a precarious election in

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Speaker 6: the sense that really we don't know what it will

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Speaker 6: actually hinge on in October November. Right, the economy is

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Speaker 6: generally very good, except for inflation, but very good, and

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Speaker 6: we don't see a lot of indicators that's going to

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Speaker 6: change a lot between now and November, at least with

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Speaker 6: the unemployment. Right, So what is going to be the

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Speaker 6: issue or is there even a single issue? Is it

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Speaker 6: just now multiple issues to different groups of voters.

436
00:23:31,520 --> 00:23:34,359
Speaker 2: Can you imagine Nicky Haley falls on a sword ye

437
00:23:34,560 --> 00:23:37,320
Speaker 2: decides she's going to vote for Trump. But can you imagine,

438
00:23:37,560 --> 00:23:42,200
Speaker 2: Professor Schiller, that the people that support Nicky Hayley will

439
00:23:42,200 --> 00:23:44,640
Speaker 2: then go over and support President Biden?

440
00:23:44,680 --> 00:23:45,720
Speaker 3: Can you make that leap?

441
00:23:47,119 --> 00:23:50,119
Speaker 6: It all depends on how this summer unfolds with Donald Trump.

442
00:23:50,200 --> 00:23:53,760
Speaker 6: I mean, Donald Trump has been relatively restrained, either either

443
00:23:53,840 --> 00:23:57,000
Speaker 6: by court order or because his campaign is doing a

444
00:23:57,040 --> 00:23:59,520
Speaker 6: good job of that. But you can imagine that's certainly

445
00:23:59,520 --> 00:24:02,240
Speaker 6: at the conven and afterwards he's going to let loose

446
00:24:02,480 --> 00:24:05,280
Speaker 6: because he's already won the nomination again and he thinks

447
00:24:05,280 --> 00:24:07,440
Speaker 6: he's going to win. He's up in the polls. He's

448
00:24:07,480 --> 00:24:10,040
Speaker 6: not going to be controllable. And the question is how

449
00:24:10,080 --> 00:24:12,639
Speaker 6: bad does that get and what kind of vision does

450
00:24:12,680 --> 00:24:16,320
Speaker 6: that present for the future for anybody who didn't vote

451
00:24:16,359 --> 00:24:18,240
Speaker 6: for him before? I mean, do you really want him back?

452
00:24:18,560 --> 00:24:20,919
Speaker 6: So to me, they're still unknown. I think they're going

453
00:24:20,960 --> 00:24:23,880
Speaker 6: to be the undecided in the polling in October November,

454
00:24:23,920 --> 00:24:26,720
Speaker 6: and it's undecided about whether they're going to vote, not

455
00:24:26,800 --> 00:24:28,240
Speaker 6: who they're going to vote for. They're not going to

456
00:24:28,359 --> 00:24:30,679
Speaker 6: vote for Trump. They're not going back to Trump. So

457
00:24:30,840 --> 00:24:33,720
Speaker 6: that's the thing for Biden. But again, things like forgiving

458
00:24:33,840 --> 00:24:38,040
Speaker 6: more student loans when there are student protests is bad politics.

459
00:24:38,240 --> 00:24:40,760
Speaker 6: That's just bad politics. But Biden has not seemed to

460
00:24:40,800 --> 00:24:42,440
Speaker 6: care about that much in the last couple of years.

461
00:24:42,440 --> 00:24:44,280
Speaker 6: He just does what he thinks is the right thing

462
00:24:44,320 --> 00:24:44,560
Speaker 6: to do.

463
00:24:46,119 --> 00:24:49,840
Speaker 5: So, Wendy Hear, here's a question. It's just a really

464
00:24:49,880 --> 00:24:54,480
Speaker 5: broad question. Where are the pre twenty fifteen I'm thinking

465
00:24:55,000 --> 00:24:58,720
Speaker 5: the day before former President Trump came down the escalator

466
00:24:58,760 --> 00:25:02,880
Speaker 5: at Trump Play, is it? Where is that Republican Party today?

467
00:25:03,800 --> 00:25:07,000
Speaker 6: I think as a party. That party is gone. That

468
00:25:07,040 --> 00:25:10,800
Speaker 6: party is erased as a sort of functioning, you know,

469
00:25:11,000 --> 00:25:14,320
Speaker 6: powerful party. It doesn't dictate policy at the state level

470
00:25:14,359 --> 00:25:17,200
Speaker 6: anymore in state legislatures, it doesn't control the House of

471
00:25:17,280 --> 00:25:20,560
Speaker 6: Representatives anymore. There are a few holdouts in the Senate,

472
00:25:20,840 --> 00:25:23,600
Speaker 6: but you can hear the voices of the most conservative

473
00:25:23,640 --> 00:25:26,359
Speaker 6: senators in Bolden. Rick Scott just announced senator from Florida

474
00:25:26,400 --> 00:25:28,840
Speaker 6: who's running for reelection. He must be quite confident that

475
00:25:28,880 --> 00:25:30,679
Speaker 6: he's going to win that race, that he's going to

476
00:25:30,720 --> 00:25:33,840
Speaker 6: put in for a Senate majority leader against John Cornyn

477
00:25:33,880 --> 00:25:36,919
Speaker 6: and John Thune. No, not are not liberal, but they

478
00:25:36,920 --> 00:25:40,280
Speaker 6: are considered more mainstream established a Republican. But he's going

479
00:25:40,280 --> 00:25:42,919
Speaker 6: to run as kind of a Trump guy. And you

480
00:25:42,960 --> 00:25:45,040
Speaker 6: can see how the Trump wing of the party is

481
00:25:45,080 --> 00:25:47,800
Speaker 6: taking over all of the mechanisms of government. And when

482
00:25:47,840 --> 00:25:50,640
Speaker 6: parties cease to control government, they cease to be able

483
00:25:50,640 --> 00:25:52,800
Speaker 6: to you know, function and deliver for their constituents. So

484
00:25:53,040 --> 00:25:56,400
Speaker 6: that wing of the party functionally is dying. It's not dead.

485
00:25:56,800 --> 00:25:59,199
Speaker 6: So that's the big question mark whether it happened, you know,

486
00:25:59,280 --> 00:26:01,360
Speaker 6: So that it's the thing that Republicans have to ask

487
00:26:01,400 --> 00:26:04,159
Speaker 6: themselves if Trump wins again, it's the nail in the

488
00:26:04,160 --> 00:26:08,000
Speaker 6: coffin for the establishment Republican Party. And that's just a fact.

489
00:26:08,320 --> 00:26:10,560
Speaker 6: So how do they how weil are they to that

490
00:26:10,640 --> 00:26:12,800
Speaker 6: version of the party? And I don't think they even

491
00:26:12,840 --> 00:26:14,040
Speaker 6: know the answer that question.

492
00:26:14,200 --> 00:26:14,600
Speaker 3: All right.

493
00:26:14,640 --> 00:26:20,119
Speaker 5: So for former President Trump, it doesn't seem like any

494
00:26:20,440 --> 00:26:23,720
Speaker 5: of his legal issues, including the case in New York

495
00:26:23,760 --> 00:26:26,760
Speaker 5: City at the moment, has there any real impact on

496
00:26:26,800 --> 00:26:30,480
Speaker 5: his political standing. It's just shocking to me. But is

497
00:26:30,520 --> 00:26:31,320
Speaker 5: that kind of where we are?

498
00:26:32,400 --> 00:26:32,560
Speaker 1: Well?

499
00:26:32,600 --> 00:26:35,560
Speaker 6: I mean, you know, even after January sixth, I mean,

500
00:26:35,640 --> 00:26:37,520
Speaker 6: his own party sort of got mad at him for

501
00:26:37,520 --> 00:26:39,600
Speaker 6: two weeks and then they all went tomorrow Largo and

502
00:26:39,920 --> 00:26:42,800
Speaker 6: many of them, Kevin McCarthy included, to say, okay, we

503
00:26:42,880 --> 00:26:45,000
Speaker 6: forgive you. And now they're showing up in New York

504
00:26:45,200 --> 00:26:46,959
Speaker 6: to say we're standing by you. I mean, it's a

505
00:26:47,000 --> 00:26:49,639
Speaker 6: new age of politics where there doesn't seem to be

506
00:26:49,680 --> 00:26:53,520
Speaker 6: a limit on what a politician can do without penalty

507
00:26:53,520 --> 00:26:56,440
Speaker 6: in the polls at least. But remember Donald Trump lost

508
00:26:56,440 --> 00:26:59,040
Speaker 6: the election in twenty twenty, and his surrogates lost the

509
00:26:59,080 --> 00:27:02,399
Speaker 6: election in twenty twenty, and we're forgetting that history. So

510
00:27:02,680 --> 00:27:04,960
Speaker 6: you know, the idea that he's going to win again

511
00:27:05,040 --> 00:27:07,240
Speaker 6: easily or his surrogates are going to win again easily.

512
00:27:07,600 --> 00:27:09,760
Speaker 6: That defies the last couple of years of history in

513
00:27:09,840 --> 00:27:10,960
Speaker 6: terms of our elections.

514
00:27:11,560 --> 00:27:16,399
Speaker 2: Why can't we have an election length like the British

515
00:27:16,680 --> 00:27:19,879
Speaker 2: professor Schiller. There's got to be some thesis at Brown

516
00:27:20,000 --> 00:27:24,360
Speaker 2: University over how do we take a three year extravaganza

517
00:27:25,080 --> 00:27:27,359
Speaker 2: and dash it down to six seven, eight weeks?

518
00:27:27,400 --> 00:27:28,040
Speaker 3: How do we do that?

519
00:27:28,119 --> 00:27:30,840
Speaker 6: Well? So the reason I think you probably already know

520
00:27:30,920 --> 00:27:33,440
Speaker 6: the answer. I think it's rhetorical, is that the development

521
00:27:33,480 --> 00:27:36,399
Speaker 6: of mass based political parties, starting with Andrew Jackson, but

522
00:27:36,480 --> 00:27:39,560
Speaker 6: going all the way and then have parties controlling government.

523
00:27:39,600 --> 00:27:41,639
Speaker 6: As government gets bigger, there's more to control, more to

524
00:27:41,640 --> 00:27:45,359
Speaker 6: give out to your loyal, loyal people. So parties become

525
00:27:45,400 --> 00:27:48,240
Speaker 6: a business and organizations and primaries are good for the

526
00:27:48,280 --> 00:27:51,560
Speaker 6: business because then people stay in the organization. Parties, you know,

527
00:27:51,640 --> 00:27:54,200
Speaker 6: parties stay, Oh you lost control, but they control the primaries.

528
00:27:54,480 --> 00:27:56,800
Speaker 6: So it builds up the party to have the primary system.

529
00:27:56,880 --> 00:28:00,000
Speaker 6: And that's why we have such a long, long campaign

530
00:28:00,320 --> 00:28:02,000
Speaker 6: with Martin van Buren.

531
00:28:01,760 --> 00:28:04,159
Speaker 3: Ran today, would he be a Republican or a Democrat?

532
00:28:05,359 --> 00:28:07,720
Speaker 6: Well, you know, it's funny because in those days they

533
00:28:07,720 --> 00:28:10,720
Speaker 6: were Democrat Republicans. So it's very confusing. But you know,

534
00:28:10,880 --> 00:28:13,880
Speaker 6: in the meantime, let's look at the signals that we're

535
00:28:13,920 --> 00:28:16,760
Speaker 6: getting from these the state Senate races, in other words,

536
00:28:16,760 --> 00:28:20,159
Speaker 6: that US Senate races in the swing states. Watch those

537
00:28:20,200 --> 00:28:22,440
Speaker 6: and watch the poll numbers over the summer, and see

538
00:28:22,440 --> 00:28:25,360
Speaker 6: if those Democrats are holding on. And if they're holding on,

539
00:28:25,800 --> 00:28:26,840
Speaker 6: there's more hope for Buddy.

540
00:28:27,119 --> 00:28:30,640
Speaker 2: Wendy Schiller of Brown University. Truly one of our definitive

541
00:28:30,720 --> 00:28:36,359
Speaker 2: textbooks on civics in America. This is a Bloomberg Surveillance podcast,

542
00:28:36,600 --> 00:28:41,440
Speaker 2: bringing you the best in economics, finance, investment, and international relations.

543
00:28:41,640 --> 00:28:45,000
Speaker 2: You can also watch the show live on YouTube. Visit

544
00:28:45,040 --> 00:28:49,200
Speaker 2: the Bloomberg Podcast channel on YouTube to see the show

545
00:28:49,440 --> 00:28:52,479
Speaker 2: weekday mornings from seven to ten am Eastern from our

546
00:28:52,520 --> 00:28:56,320
Speaker 2: global headquarters in New York City. Subscribe to the podcast

547
00:28:56,360 --> 00:29:00,360
Speaker 2: on Apple, Spotify, or anywhere else you listen. And always

548
00:29:00,520 --> 00:29:04,880
Speaker 2: I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.