WEBVTT - The Nvidia Effect and Market Bullishness 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:48.080 the Bloomberg Terminal, and the Bloomberg Business App. Widely anticipated. 0:00:48.159 --> 0:00:51.639 Thank you for your comments out on YouTube, and I've 0:00:51.640 --> 0:00:54.560 seen an email as well. Joining us in his busy 0:00:54.640 --> 0:00:58.640 day Gene Munster right now on Nvidia. He is with 0:00:58.720 --> 0:01:02.240 Deep Water Asset Man Management Gene. Right before the earnings 0:01:02.240 --> 0:01:07.280 idiocy yesterday afternoon, the pro stepped in Gene Monster with 0:01:07.440 --> 0:01:11.320 I think the absolute smartest insight I've seen. We mentioned 0:01:11.360 --> 0:01:15.320 it earlier with Man Deep Sing and that the purchasing 0:01:15.600 --> 0:01:19.240 transaction people for Nvidia are not so much going to 0:01:19.280 --> 0:01:22.480 play hardball, but they're going to say to their customers, 0:01:23.000 --> 0:01:24.720 don't give me this you're not going to buy the 0:01:24.760 --> 0:01:28.919 next revenue stream of older chips waiting for the new chip. 0:01:29.480 --> 0:01:30.559 You don't get the new. 0:01:30.520 --> 0:01:33.759 Chip unless you buy the old chip. Expand on that, 0:01:33.840 --> 0:01:34.440 gene Monster. 0:01:34.680 --> 0:01:38.080 The Osborne effect, and that of course is when you 0:01:38.160 --> 0:01:41.200 have an existing product that is going to be replaced 0:01:41.200 --> 0:01:45.360 by a new product, that new product is not yet available, 0:01:45.400 --> 0:01:51.200 and historically that causes the existing product sales to dip significantly. 0:01:51.280 --> 0:01:54.240 We see that companies over the years, they'll blow up 0:01:54.320 --> 0:01:57.360 ahead of a new product cycle. In the case of Nvidia, 0:01:57.920 --> 0:02:00.400 they were really astute in terms of how they have 0:02:00.520 --> 0:02:04.120 been communicating this to customers over the past three months. 0:02:04.400 --> 0:02:06.760 That was the time three months ago when they announced 0:02:06.760 --> 0:02:10.240 this new Blackwell chip and they said, exactly like you mentioned, 0:02:10.480 --> 0:02:12.520 if you guys want the new chip of this fall, 0:02:12.760 --> 0:02:14.919 you got to keep buying ours seeing Hopper chip. And 0:02:15.320 --> 0:02:16.360 that in fact did happen. 0:02:16.400 --> 0:02:18.840 It worked. And I want to point out here because 0:02:18.919 --> 0:02:22.760 gene Monster's far too young, Lisa Matteo's grandfather probably had 0:02:22.800 --> 0:02:26.680 one the Osborne effect. It's not some NBA at Northwestern. 0:02:27.120 --> 0:02:30.920 The Osborne effect is the Osborne computer that I spent 0:02:30.960 --> 0:02:34.880 two four hundred and ninety five dollars on forty fifty 0:02:35.000 --> 0:02:39.200 years ago, and Gene Muster knows that's probably fifteen thousand dollars. 0:02:39.480 --> 0:02:42.440 I'm the only one in the world still alive actually 0:02:42.520 --> 0:02:44.880 bought an Osbourne computer. 0:02:44.800 --> 0:02:45.320 Gene Muster. 0:02:45.520 --> 0:02:48.120 I went over to Nvidia yesterday and I mentioned this 0:02:48.160 --> 0:02:52.799 to Paul Sweeney earlier that what I sense here radically 0:02:52.919 --> 0:02:57.720 different is I don't sense ego driven tech boy in 0:02:57.800 --> 0:03:01.920 the leadership of Nvidia. They're CFO statement, they're accounting clarity, 0:03:02.360 --> 0:03:05.720 the stock split, the dividend lift and all that. Are 0:03:05.720 --> 0:03:09.880 they rapidly trying to be a mature company to join 0:03:10.040 --> 0:03:13.120 something like the Dow Jones Industrial Average. 0:03:13.760 --> 0:03:17.240 Absolutely, I mean they are a mature company. They're going 0:03:17.280 --> 0:03:20.000 to do over one hundred billion revenue this year, call it. 0:03:20.000 --> 0:03:22.399 It's going to be approaching the three trillion dollar market cap, 0:03:22.400 --> 0:03:25.600 one of the top three companies. And they're acting like it. 0:03:25.639 --> 0:03:28.440 They do not act like people who are trying to 0:03:28.600 --> 0:03:33.520 pump up a theme. They're being the results are backing 0:03:33.560 --> 0:03:36.080 it up. The guidance is backing it up. They beat 0:03:36.120 --> 0:03:38.440 a high bar by six percent, they guide it up 0:03:38.520 --> 0:03:42.120 July by five percent, and those guidance and I think 0:03:42.120 --> 0:03:45.280 this is a sign of a mature management team. They 0:03:45.360 --> 0:03:48.600 keep exceeding. Over the last four quarters, they've been exceeding 0:03:48.760 --> 0:03:53.839 those expectations, and so that discipline around guidance is yet 0:03:53.880 --> 0:03:56.920 another example I think of how they are being mature 0:03:57.040 --> 0:04:00.160 about this, and they got good reason to be feeling 0:04:00.200 --> 0:04:05.080 good about things for for two reasons. One is that 0:04:05.120 --> 0:04:08.320 they've got products that no one else has, and separately 0:04:08.520 --> 0:04:10.960 is they're still in the early innings of what is 0:04:11.000 --> 0:04:14.960 going to be the most breathtaking shift in technology that 0:04:14.960 --> 0:04:16.440 we've seen in the past one hundred years. 0:04:17.080 --> 0:04:19.680 Gene, you've been so out in front of this. You 0:04:19.720 --> 0:04:21.400 know a lot of what I know about this AI 0:04:21.440 --> 0:04:23.720 business I learned from you. But talk to us about 0:04:23.720 --> 0:04:26.680 the competitive environment here. I mean, I was going to say, 0:04:26.680 --> 0:04:30.120 they're not I mean, where are the competitors here? Can't 0:04:30.120 --> 0:04:32.560 they come up with a chip that's comparable to compete 0:04:32.600 --> 0:04:35.000 with these guys. 0:04:36.080 --> 0:04:39.520 I remember, we're invested in a deep water investing with 0:04:39.640 --> 0:04:42.280 private and public companies, and one of our private companies 0:04:42.680 --> 0:04:45.239 builds chips, and we invest in this company, in AI 0:04:45.320 --> 0:04:49.440 chip company, it's called Rain in twenty eighteen. And when 0:04:49.480 --> 0:04:52.480 we think about their business, they do not sip Capex 0:04:52.520 --> 0:04:57.120 they gulp Capex and when you think about the competitive 0:04:57.200 --> 0:04:59.920 set here, it is really limited to a small number 0:05:00.080 --> 0:05:03.320 of companies that can invest tens of billion dollars, billions 0:05:03.360 --> 0:05:06.919 of dollars a year in two building these applications. And 0:05:07.000 --> 0:05:09.360 so I think that that's one big piece. There are 0:05:10.680 --> 0:05:14.719 kind of some glimmers of competition, most of those coming 0:05:14.760 --> 0:05:18.200 from the hyperscalers like Google and Microsoft are working on 0:05:18.240 --> 0:05:20.839 their own chips. But for the most part, Paul, they're 0:05:20.880 --> 0:05:22.600 running the table. And just one more piece on the 0:05:22.640 --> 0:05:27.359 competitive threat. Please, three years ago, Elon must talked about 0:05:27.360 --> 0:05:31.000 their Dojo chip, their Dojo computer that was going to 0:05:31.040 --> 0:05:35.760 power autonomy on Tesla, and yesterday during the call, the 0:05:36.560 --> 0:05:42.400 cfo's lead comments led with both Tesla and Xai. Of course, 0:05:42.440 --> 0:05:48.400 both my Elon companies, those embracing the Nvidia chips, and 0:05:48.480 --> 0:05:50.880 so even the companies that want to compete with them 0:05:50.920 --> 0:05:54.560 realize that the return on investment for video's highest. 0:05:54.600 --> 0:05:57.560 Geane would get a really good comment, a respectful comment 0:05:57.600 --> 0:06:00.440 out on our live chat on YouTube. Ryan, thank you 0:06:00.480 --> 0:06:04.080 so much, and Ryan says it's a great comment. Please 0:06:04.200 --> 0:06:08.600 move on from Nvidia. There is other news except gene Monster. 0:06:08.720 --> 0:06:14.040 There isn't explain to Ryan and me the Nvidia effect 0:06:14.200 --> 0:06:17.480 on everything else out there, not what it means for Microsoft, 0:06:17.800 --> 0:06:20.560 not what it means for some tech fanboy in some 0:06:20.720 --> 0:06:21.920 cappuccino place with. 0:06:21.920 --> 0:06:23.120 You out on the West Coast. 0:06:23.480 --> 0:06:27.799 What does Nvidia mean for Lisa Matteo, Ryan or Tom Keane. 0:06:29.720 --> 0:06:34.520 In Vidia's current trajectory of the business, the just reported 0:06:34.560 --> 0:06:38.479 April quarter means that we are moving more quickly to 0:06:38.720 --> 0:06:43.239 artificial general intelligence. And when we hit that, the game 0:06:43.400 --> 0:06:47.760 changes for all companies. Every information worker, every technical worker 0:06:47.839 --> 0:06:50.200 is going to be impacted by this. And so the 0:06:50.279 --> 0:06:53.159 reason why we're so hyper focused on what Nvidia is 0:06:53.160 --> 0:06:57.839 doing is that they are really the leading, the very 0:06:57.920 --> 0:07:01.680 tip indicator in terms of the speed and the rate 0:07:01.800 --> 0:07:03.919 of change that we're going to see around AI. And 0:07:03.960 --> 0:07:05.200 that's why it matters. 0:07:05.360 --> 0:07:09.920 Should they replace I'm just picking the names Cisco or 0:07:10.000 --> 0:07:12.920 Intel in the Dow Jones Industrial Average? 0:07:13.200 --> 0:07:15.600 Is it now? This is the moment where in video 0:07:15.640 --> 0:07:16.720 is like a doubt stock. 0:07:18.040 --> 0:07:18.600 It should be. 0:07:18.640 --> 0:07:20.840 I mean, this is the guard I think has changed 0:07:21.160 --> 0:07:23.440 a couple or a year or so ago, And I 0:07:23.440 --> 0:07:26.360 think the bigger question is do you think that this 0:07:26.400 --> 0:07:29.080 will continue? I absolutely believe what we saw last night 0:07:29.120 --> 0:07:31.480 as an indication that this is going to continue. I 0:07:31.520 --> 0:07:33.200 still believe we're in the front of a three to 0:07:33.280 --> 0:07:35.600 five year bull market powered by AI that's going to 0:07:35.680 --> 0:07:38.240 end in a spectacular bubble. But the front end of 0:07:38.280 --> 0:07:41.040 that that bull market is going to be quite exciting. 0:07:42.400 --> 0:07:46.120 Let us know when the bubble's near. Geane call back. 0:07:47.200 --> 0:07:50.520 Please let us please help Lisa with the bubble. 0:07:50.840 --> 0:07:53.480 Gane monster out front of the bubble. Thank you so much. 0:07:53.520 --> 0:08:08.239 With deep water asset, Benjamin, let's talk to an adult here, Yes, 0:08:08.280 --> 0:08:08.960 particularly with. 0:08:08.880 --> 0:08:10.440 All that's going on with nvidiot. 0:08:10.440 --> 0:08:14.440 The new highs Nastak futures up two hundred and eight points. 0:08:14.520 --> 0:08:18.040 Amy was Silverman is expert. I'm trying to explain the 0:08:18.120 --> 0:08:22.640 dynamics in the nuances expectations. Amy was silverman on the 0:08:22.640 --> 0:08:25.640 Bloomberg where we on the high ground on this. I 0:08:25.760 --> 0:08:30.120 bring up ENVDA equity, OVDV and I can look at 0:08:30.120 --> 0:08:31.920 the SKEW, I can look at the term, I can 0:08:31.920 --> 0:08:34.439 look at the three D service and. 0:08:34.440 --> 0:08:36.200 I'm really not sure what it says. 0:08:36.360 --> 0:08:41.120 Could you use your tools to glean a nuance of 0:08:41.160 --> 0:08:43.680 the expectations of nvidio? 0:08:45.640 --> 0:08:48.800 Sure, good morning guys. So look, you know in video 0:08:48.880 --> 0:08:52.040 is one that we've been watching with baited breath, obviously, 0:08:52.559 --> 0:08:56.160 And the super interesting thing was going into earnings last night, 0:08:56.240 --> 0:08:58.400 the options market was implying about an eight and a 0:08:58.440 --> 0:09:00.920 half percent move. So far, we actually they haven't beaten that, 0:09:01.040 --> 0:09:03.240 but you know, the day is young. And the second 0:09:03.280 --> 0:09:05.920 thing I'd say was we didn't have much right tail 0:09:06.000 --> 0:09:09.079 tom which is super interesting for in Vidio because that's 0:09:09.120 --> 0:09:11.160 one where we've seen a lot of right tail chase. 0:09:11.440 --> 0:09:14.760 That sentiment wasn't there. What I think we really need 0:09:14.800 --> 0:09:17.760 to watch today is that that right tail is game 0:09:17.800 --> 0:09:20.520 on because of everything we saw during earnings last night. 0:09:20.559 --> 0:09:23.240 Does it fold over into the rest of the magnificent 0:09:23.320 --> 0:09:26.280 forty two or the nastic one hundred. I mean, folks, 0:09:26.360 --> 0:09:29.520 I think we all understand left tails gloom, right tails 0:09:29.520 --> 0:09:34.040 a certain confidence. Does this a new regime of confidence 0:09:34.080 --> 0:09:35.520 from the Nvidia announcement? 0:09:37.120 --> 0:09:39.640 Yeah? Look, you know one thing we've talked about is 0:09:39.679 --> 0:09:42.920 not just looking at the kind of OGAI names like 0:09:43.000 --> 0:09:45.960 in Vidio, but to look at the adjacent names because 0:09:46.000 --> 0:09:49.480 in some cases that ball is still less expensive and 0:09:49.720 --> 0:09:52.480 you still get that right tail chase. So you know, 0:09:52.679 --> 0:09:54.600 one thing we've been talking about is don't just look 0:09:54.640 --> 0:09:57.840 at Nvidia, look at the other names like ADI or AMD, 0:09:58.120 --> 0:10:02.440 Microsoft others that also have AI conference is going on, 0:10:02.640 --> 0:10:05.679 because a lot of times you'll see that proxy correlated 0:10:05.760 --> 0:10:08.839 move Tom of the right tail spot up volatility of 0:10:08.960 --> 0:10:11.880 not just for Nvidia, but for that entire space when 0:10:12.120 --> 0:10:13.760 the enthusiasm starts to bubble. 0:10:14.640 --> 0:10:17.640 Tom Amy Moosilverman is a graduate of Prince University, So 0:10:17.720 --> 0:10:20.000 I'm dying to ask her what her favorite sandwich is 0:10:20.000 --> 0:10:22.840 at Hogi Haven, but I'm gonna be professional and not 0:10:22.960 --> 0:10:25.760 go there. Amy, can you just define for this non 0:10:25.800 --> 0:10:29.040 derivatives person what right tail and left tail is? 0:10:30.559 --> 0:10:32.800 Sure, Okay, I have to say it's the meatball sub. 0:10:33.000 --> 0:10:34.720 I just have to put it in there because Princeton 0:10:35.000 --> 0:10:37.920 Princeton Reunions are this weekend, so I definitely have tigers 0:10:37.960 --> 0:10:42.240 on my mind. But look, right tail is the idea 0:10:42.440 --> 0:10:46.160 normal distribution of that reach for upside. You know, that's 0:10:46.200 --> 0:10:48.240 where we see the fomo and the momo. That's where 0:10:48.240 --> 0:10:50.600 we see the call demand. And the left tail, which 0:10:50.720 --> 0:10:54.360 unfortunately has been dead for quite a while, is your 0:10:54.400 --> 0:10:58.120 equity skew. It's that demand for downside protection, which apparently 0:10:58.200 --> 0:11:01.280 these days nobody seems to want, Hey. 0:11:01.080 --> 0:11:03.720 Amy, I'm just looking at the you know, Tom forces 0:11:03.800 --> 0:11:06.160 us on a daily basis to look at the VICS, 0:11:06.280 --> 0:11:10.160 and it's now below twelve, firmly below twelve. What does 0:11:10.200 --> 0:11:10.719 that tell you? 0:11:12.559 --> 0:11:16.400 Yeah, I think, yeah, we hit sub twelve. We're circling eleven. 0:11:16.880 --> 0:11:20.240 You know, I'd say, look, there's two things. One, index 0:11:20.360 --> 0:11:24.000 volatility has been quite low for some time. There are 0:11:24.040 --> 0:11:27.680 some artificial reasons why this is happening, and there's just 0:11:27.720 --> 0:11:31.040 some economic reasons because things look okay, because the breadth 0:11:31.080 --> 0:11:33.600 of the market still, you know, is very much mag 0:11:33.640 --> 0:11:36.360 seven driven, even if the breath that's doing okay. But 0:11:36.520 --> 0:11:39.680 look the rise of zerodte, the idea that almost fifty 0:11:39.679 --> 0:11:42.840 percent of all SPX volume these days is zero day 0:11:42.840 --> 0:11:45.320 to xpray trading. Look, that does matter, and that is 0:11:45.400 --> 0:11:48.360 influencing these headline numbers, because VIX is just a thirty 0:11:48.440 --> 0:11:51.760 day weighted average of imply volt across calls and puts. 0:11:52.080 --> 0:11:55.040 Is how do you define exuberance? I mean, financial media 0:11:55.080 --> 0:11:58.000 people toss around exuberance. We read it from Schiller, we 0:11:58.040 --> 0:12:00.280 read it from green Span. How does Amy wouse over 0:12:00.400 --> 0:12:02.120 and measure exuberance? 0:12:03.400 --> 0:12:05.520 I can actually give you the technical definition that we 0:12:05.640 --> 0:12:08.560 use it's twenty five delta put minus twenty five delta 0:12:08.559 --> 0:12:12.319 call implied ball over at moneyball. If that number, if 0:12:12.320 --> 0:12:15.840 that number is inverted, right, if it goes negative, it 0:12:16.000 --> 0:12:19.120 means that the call implied volatilities outwighing put demand. It's 0:12:19.120 --> 0:12:22.320 something we actually look at quantitatively on a systematic basis 0:12:22.320 --> 0:12:23.000 for signals. 0:12:23.160 --> 0:12:23.959 Okay, what you. 0:12:24.040 --> 0:12:27.000 Just got there, folks, is an insight into the adult 0:12:27.040 --> 0:12:31.480 world of derivatives. They take the enthusiasm of the call up, 0:12:32.080 --> 0:12:35.840 they take the enthusiasm of the put down, and then 0:12:35.880 --> 0:12:39.760 they compare it to the enthusiasm at the point the 0:12:39.840 --> 0:12:42.840 center point. I do, okay there, I think it is Sheldon. 0:12:43.760 --> 0:12:46.760 Sheldonnatenburg's in Chicago, going time. Just shut up and let 0:12:46.760 --> 0:12:51.200 Amy talk. Amy, what when you write your research note 0:12:51.240 --> 0:12:54.120 for Monday or frankly to get into June thirty, what 0:12:54.160 --> 0:12:56.079 are you going to say about the signals you see 0:12:56.440 --> 0:12:57.400 of expectation. 0:12:59.040 --> 0:13:00.679 You know, one thing I'm going to be running the 0:13:00.760 --> 0:13:03.960 numbers on today is how much of that coll exuberance 0:13:03.960 --> 0:13:07.520 which we just defined there is going skew inverted again? 0:13:07.640 --> 0:13:11.400 Because when we get into these cycles of momentum, begets momentum. 0:13:11.480 --> 0:13:13.680 It's very hard to stop that train. That's why it 0:13:13.720 --> 0:13:15.480 was super interesting to me that we didn't see it 0:13:15.520 --> 0:13:18.920 coming into Nvidia. The question now is if it will 0:13:19.000 --> 0:13:21.880 start to inflect because you know that stock split it 0:13:21.920 --> 0:13:24.040 really gets the retail going. It doesn't seem like it 0:13:24.080 --> 0:13:26.040 would from a corporate finance one oh one. But we 0:13:26.040 --> 0:13:28.680 saw the same thing happen with Tesla because you start 0:13:28.720 --> 0:13:30.760 to get new periods of participation too. 0:13:31.520 --> 0:13:34.199 Amy for better or worse, this is an election year. 0:13:34.679 --> 0:13:38.640 Do you see trading patterns in your derivatives market pick 0:13:38.720 --> 0:13:41.480 up change more for a little bit here in an 0:13:41.520 --> 0:13:45.160 election year? Because boy, you know, depending upon who wins 0:13:45.160 --> 0:13:48.640 in November can have an impact on financial markets broadly defined. 0:13:50.080 --> 0:13:53.000 Yeah, look, I'll tell you one scenario that investors have 0:13:53.080 --> 0:13:56.840 started to toss around as an exogenous risk. So it's 0:13:56.840 --> 0:13:59.920 not the idea of if Trump or Biden wins, it's 0:14:00.080 --> 0:14:02.440 basically the idea of a contested election. This is something 0:14:02.480 --> 0:14:04.920 our chief strategist has talked about as well. But the 0:14:05.000 --> 0:14:07.800 issue is when you get an actual contested election where 0:14:07.800 --> 0:14:11.319 it is unclear who the winner is come November, then 0:14:11.440 --> 0:14:14.240 essentially your Vick's term structure isn't pricing that right it's 0:14:14.240 --> 0:14:17.360 pricing a hump for elections itself. It's not pricing a 0:14:17.400 --> 0:14:20.760 two thousand style question mark. And that's where I think 0:14:20.800 --> 0:14:22.920 we could see a pocket of volatility that isn't baked 0:14:22.920 --> 0:14:25.479 into the left tail, and that could be concerning to investors. 0:14:25.720 --> 0:14:28.800 Amy with Silverman, thank you so much, greatly, greatly appreciate 0:14:28.840 --> 0:14:31.320 it this morning to reset folks. For those of you 0:14:31.320 --> 0:14:34.880 who just joining us on applecarplay on YouTube around the nation, 0:14:34.960 --> 0:14:38.560 Good morning, Bloomberg Radio eleven three to zero, the Vicks 0:14:38.760 --> 0:14:41.320 under twelve eleven point six one. 0:14:41.360 --> 0:14:42.960 That's an HOLU with Silverman number. 0:14:47.440 --> 0:14:51.720 Wendy Schiller from Brown University joins us right now. Wendy's 0:14:51.760 --> 0:14:55.160 a cottage industry figuring out how the Conservatives ran to 0:14:55.240 --> 0:14:58.520 the middle to finally get elected. And it basically, you know, 0:14:58.640 --> 0:15:01.360 back in ancient history, very old water down in flames. 0:15:02.040 --> 0:15:04.360 And then Reagan went out anything and he lost to 0:15:04.440 --> 0:15:08.360 Gerald Ford, and I remember that clearly. And then all 0:15:08.400 --> 0:15:11.640 of a sudden, Reagan defeats Carter, and the whole mood 0:15:11.800 --> 0:15:15.880 was to go out and find the Reagan Democrats for 0:15:16.000 --> 0:15:20.320 the president. Where are the Biden Republicans? 0:15:20.760 --> 0:15:23.320 Well, I mean the Biden Republicans are people who now 0:15:23.440 --> 0:15:27.040 call themselves independents because they don't want to be associated 0:15:27.080 --> 0:15:29.320 with Donald Trump. I mean, so you know, we had 0:15:29.360 --> 0:15:32.040 independence before. We always have people who switched their votes, 0:15:32.200 --> 0:15:36.320 but that number has grown over time, not that much, 0:15:36.600 --> 0:15:39.040 but maybe five to eight percent. And that five and 0:15:39.040 --> 0:15:42.440 eight percent is really after twenty sixteen, where they can't 0:15:42.480 --> 0:15:44.640 go back and vote for Trump in twenty twenty. So 0:15:44.680 --> 0:15:47.120 they call themselves independence, but they vote for Republicans for 0:15:47.160 --> 0:15:50.960 Senate and House and at the state level. So that's 0:15:51.040 --> 0:15:54.480 the bubble of people who formerly known as Republicans that 0:15:54.520 --> 0:15:59.120 Biden wants to remind that they rejected Trump a couple 0:15:59.120 --> 0:16:01.440 of times already our Trump want to be used in 0:16:01.440 --> 0:16:04.760 twenty twenty two, and therefore if they should come back 0:16:04.800 --> 0:16:08.400 to him. And you know, this is such a precarious 0:16:08.720 --> 0:16:11.480 election in the sense that really we don't know what 0:16:11.520 --> 0:16:14.720 it will actually hinge on in October November. Right, the 0:16:14.720 --> 0:16:18.960 economy is generally very good, except for inflation, but very good, 0:16:19.240 --> 0:16:21.120 and we don't see a lot of indicators that's going 0:16:21.200 --> 0:16:24.240 to change a lot between now and November, at least 0:16:24.240 --> 0:16:28.080 with the unemployment. Right, So what is going to be 0:16:28.240 --> 0:16:30.360 the issue or is there even a single issue? Is 0:16:30.400 --> 0:16:32.840 it just now multiple issues to different groups of voters. 0:16:33.040 --> 0:16:35.880 Can you imagine Nicky Haley falls on the sword ye 0:16:36.080 --> 0:16:38.840 decides she's going to vote for Trump. But can you imagine, 0:16:39.080 --> 0:16:43.720 Professor Schiller, that the people that support Nicky Haley will 0:16:43.720 --> 0:16:46.120 then go over and support President Biden. 0:16:46.200 --> 0:16:47.240 Can you make that leap? 0:16:48.640 --> 0:16:51.640 It all depends on how this summer unfolds with Donald Trump. 0:16:51.720 --> 0:16:55.280 I mean, Donald Trump has been relatively restrained, either either 0:16:55.360 --> 0:16:58.520 by court order or because his campaign is doing a 0:16:58.520 --> 0:17:00.640 good job of that. But you can image it. That's 0:17:00.680 --> 0:17:03.480 certainly at the convention and afterwards he's going to let 0:17:03.520 --> 0:17:06.520 loose because he's already won the nomination again and he 0:17:06.560 --> 0:17:08.440 thinks he's going to win. He's up in the polls. 0:17:08.680 --> 0:17:11.280 He's not going to be controllable. And the question is 0:17:11.359 --> 0:17:14.000 how bad does that get and what kind of vision 0:17:14.040 --> 0:17:18.000 does that present for the future for anybody who didn't vote. 0:17:17.840 --> 0:17:18.320 For him before? 0:17:18.359 --> 0:17:20.560 I mean, do you really want him back? So to me, 0:17:20.760 --> 0:17:22.639 they're still unknown. I think they're going to be the 0:17:22.720 --> 0:17:26.240 undecided in the polling in October November, and it's undecided 0:17:26.240 --> 0:17:28.760 about whether they're going to vote, not who they're going 0:17:28.800 --> 0:17:30.320 to vote for. They're not going to vote for Trump. 0:17:30.320 --> 0:17:33.080 They're not going back to Trump. So that's the thing 0:17:33.119 --> 0:17:36.440 for Biden. But again, things like forgiving more student loans 0:17:36.560 --> 0:17:40.040 when there are student protests is bad politics. That's just 0:17:40.080 --> 0:17:42.680 bad politics. But Biden has not seemed to care about 0:17:42.720 --> 0:17:44.199 that much in the last couple of years. He just 0:17:44.240 --> 0:17:46.080 does what he thinks is the right thing to do. 0:17:47.640 --> 0:17:51.359 So, Wendy Hear, here's a question. It's just a really 0:17:51.400 --> 0:17:56.000 broad question. Where are the pre twenty fifteen I'm thinking 0:17:56.520 --> 0:17:59.960 the day before former President Trump came down the escalation 0:18:00.280 --> 0:18:04.400 at Trump Ploset. Where is that Republican Party today? 0:18:05.320 --> 0:18:08.520 I think as a party, that party is gone. That 0:18:08.560 --> 0:18:13.520 party is erased as a sort of functioning powerful party. 0:18:13.720 --> 0:18:16.240 It doesn't dictate policy at the state level anymore in 0:18:16.240 --> 0:18:20.040 state legislatures. It doesn't control the House of Representatives anymore. 0:18:20.359 --> 0:18:22.639 There are a few holdouts in the Senate, but you 0:18:22.640 --> 0:18:25.960 can hear the voices of the most conservative senators in Bolden. 0:18:26.080 --> 0:18:29.040 Rick Scott just announced senator from Florida who's running for reelection. 0:18:29.080 --> 0:18:30.919 He must be quite confident that he's going to win 0:18:30.960 --> 0:18:32.720 that race, that he's going to put in for a 0:18:32.720 --> 0:18:37.119 Senate majority leader against John Cornyn and John Thune are 0:18:37.200 --> 0:18:40.880 not liberal, but they're considered more mainstream established a Republican. 0:18:41.160 --> 0:18:43.440 But he's going to run as kind of a Trump guy. 0:18:43.920 --> 0:18:46.200 And you can see how the Trump wing of the 0:18:46.240 --> 0:18:48.800 party is taking over all of the mechanisms of government. 0:18:49.000 --> 0:18:51.840 And when parties cease to control government, they cease to 0:18:51.880 --> 0:18:54.320 be able to function and deliver for their constituents. So 0:18:54.560 --> 0:18:57.920 that wing of the party functionally is dying. It's not dead. 0:18:58.320 --> 0:19:00.719 So that's the big question mark whether that happened, you know. 0:19:00.800 --> 0:19:03.440 So that's the thing that Republicans have to ask themselves. 0:19:03.520 --> 0:19:06.080 If Trump wins again, it's the nail in the coffin 0:19:06.200 --> 0:19:09.520 for the establishment Republican party. And that's just a fact. 0:19:09.840 --> 0:19:12.080 So how do they how boil are they to that 0:19:12.160 --> 0:19:14.320 version of the party. And I don't think they even 0:19:14.359 --> 0:19:16.080 know the answer that question, all right. 0:19:16.160 --> 0:19:21.639 So for former President Trump, it doesn't seem like any 0:19:21.920 --> 0:19:25.240 of his legal issues, including the case in New York 0:19:25.280 --> 0:19:28.399 City at the moment, has any real impact on his 0:19:28.440 --> 0:19:32.119 political standing. It's just shocking to me. But is that 0:19:32.200 --> 0:19:32.840 kind of where we are? 0:19:33.920 --> 0:19:37.080 Well, I mean, you know, even after January sixth, I mean, 0:19:37.160 --> 0:19:39.040 his own party sort of got mad at him, for 0:19:39.040 --> 0:19:41.119 two weeks and then they all went tomorrow Largo and 0:19:41.440 --> 0:19:44.280 many of them, Kevin McCarthy included, to say, okay, we 0:19:44.400 --> 0:19:46.520 forgive you. And now they're showing up in New York 0:19:46.720 --> 0:19:48.479 to say we're standing by you. I mean, it's a 0:19:48.520 --> 0:19:51.159 new age of politics where there doesn't seem to be 0:19:51.200 --> 0:19:55.000 a limit on what a politician can do without penalty 0:19:55.040 --> 0:19:57.960 in the polls at least. But remember Donald Trump lost 0:19:57.960 --> 0:20:00.600 the election in twenty twenty and his surrogate lost the 0:20:00.600 --> 0:20:03.600 election in twenty twenty two, and we're forgetting that history. 0:20:03.840 --> 0:20:06.160 So you know, the idea that he's going to win 0:20:06.200 --> 0:20:08.760 again easily or his surrogates are going to win again easily. 0:20:09.119 --> 0:20:11.280 That defies the last couple of years of history in 0:20:11.359 --> 0:20:12.480 terms of our elections. 0:20:13.080 --> 0:20:17.880 Why can't we have an election length? Like the British 0:20:18.200 --> 0:20:21.399 professor Schiller. There's got to be some thesis at Brown 0:20:21.520 --> 0:20:25.880 University over how do we take a three year extravaganza 0:20:26.600 --> 0:20:28.879 and dash it down to six, seven, eight weeks? 0:20:28.920 --> 0:20:29.560 How do we do that? 0:20:29.640 --> 0:20:32.359 Well? So the reason I think you probably already know 0:20:32.440 --> 0:20:34.920 the answer. I think it's rhetorical, is that the development 0:20:35.000 --> 0:20:37.919 of mass based political parties, starting with Andrew Jackson, but 0:20:38.000 --> 0:20:41.080 going all the way and then have parties controlling government. 0:20:41.119 --> 0:20:43.159 As government gets bigger, there's more to control, more to 0:20:43.160 --> 0:20:46.880 give out to your loyal, loyal people. So parties become 0:20:46.920 --> 0:20:49.760 a business and organizations and primaries are good for the 0:20:49.800 --> 0:20:52.200 business because then people stay in the organization. 0:20:52.520 --> 0:20:52.879 Parties. 0:20:52.920 --> 0:20:54.679 You know, parties say, oh you lost control, but they 0:20:54.720 --> 0:20:57.320 control the primaries. So it builds up the party to 0:20:57.320 --> 0:20:59.480 have the primary system. And that's why we have such 0:20:59.760 --> 0:21:03.720 a long long campaign with Martin van Buren ran today. 0:21:03.720 --> 0:21:05.679 Would he be a Republican or a Democrat? 0:21:06.880 --> 0:21:08.920 Well, you know he was. It's funny because in those 0:21:09.000 --> 0:21:11.960 days they were Democrat Republicans. So it's very confusing. But 0:21:12.040 --> 0:21:14.879 you know, in the meantime, let's look at the signals 0:21:15.119 --> 0:21:17.720 that we're getting from these state the state Senate races, 0:21:17.720 --> 0:21:20.600 in other words, that US Senate races in the swing states. 0:21:20.960 --> 0:21:23.359 Watch those and watch the poll numbers over the summer 0:21:23.560 --> 0:21:26.119 and see if those Democrats are holding on. And if 0:21:26.119 --> 0:21:28.280