1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,800 --> 00:00:14,880 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Paul Sweeney along 3 00:00:14,880 --> 00:00:17,240 Speaker 2: with Tom Keene. Join us each day for insight from 4 00:00:17,239 --> 00:00:20,760 Speaker 2: the best in economics, geopolitics, finance, and investment. You can 5 00:00:20,800 --> 00:00:24,439 Speaker 2: also watch the show live on YouTube. Visit the Bloomberg 6 00:00:24,480 --> 00:00:27,760 Speaker 2: Podcast channel on YouTube to see the show weekday mornings 7 00:00:27,760 --> 00:00:30,400 Speaker 2: from seven to ten Eastern Remarked Global headquarters in New 8 00:00:30,480 --> 00:00:33,720 Speaker 2: York City. Subscribe to the podcast on Apple, Spotify, or 9 00:00:33,760 --> 00:00:36,800 Speaker 2: anywhere else you listen, and as always on Bloomberg Radio, 10 00:00:36,840 --> 00:00:39,839 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business Apps. Checking with 11 00:00:39,880 --> 00:00:40,400 Speaker 2: Jay Haffield. 12 00:00:40,400 --> 00:00:42,400 Speaker 3: He's plays in this part of the rod a lot. 13 00:00:42,440 --> 00:00:45,640 Speaker 2: Jay Haffield is CEO, founder and portfolio manager at Infrastructure 14 00:00:45,680 --> 00:00:48,880 Speaker 2: Capital Advisors. Jay, I know your long career, You've long 15 00:00:48,920 --> 00:00:51,839 Speaker 2: looked at, invested in thought about China. What do you 16 00:00:52,000 --> 00:00:54,840 Speaker 2: make of some of the recent moves by this Chinese 17 00:00:54,880 --> 00:00:57,200 Speaker 2: government to try to reinvigorate its economy. 18 00:00:58,000 --> 00:01:00,640 Speaker 4: Well, we've actually been more op a mystic about the 19 00:01:00,720 --> 00:01:05,360 Speaker 4: Chinese economy for a while for really two reasons, and 20 00:01:05,400 --> 00:01:08,000 Speaker 4: that is that, first of all, everybody ignores the fact 21 00:01:08,040 --> 00:01:11,000 Speaker 4: they save forty five percent of their GDP. We talked 22 00:01:11,000 --> 00:01:13,000 Speaker 4: to you folks who are talking about that, do we No, 23 00:01:13,080 --> 00:01:16,880 Speaker 4: we do not do that my personal account when we 24 00:01:16,880 --> 00:01:20,080 Speaker 4: were talking about or you were talking about before, you know, 25 00:01:20,160 --> 00:01:23,039 Speaker 4: our fiscal irresponsibility. So we save about twenty percent of 26 00:01:23,040 --> 00:01:26,800 Speaker 4: our GDP China forty five. They can invest that badly, 27 00:01:27,400 --> 00:01:29,480 Speaker 4: like say ten percent and get a five percent growth. 28 00:01:29,480 --> 00:01:32,319 Speaker 4: So everybody kind of ignores that focus just on property. 29 00:01:32,360 --> 00:01:36,320 Speaker 4: But we've also been thought actually that this would occur 30 00:01:36,440 --> 00:01:39,280 Speaker 4: because there's one and really only wanted advantage of a 31 00:01:39,319 --> 00:01:42,679 Speaker 4: centralized economy. That is, if you have a crisis, you 32 00:01:42,720 --> 00:01:45,160 Speaker 4: don't have to have Congress arguing about it and saying 33 00:01:45,160 --> 00:01:48,200 Speaker 4: it's a bailout. It's just a bailout, and it happens 34 00:01:48,200 --> 00:01:53,080 Speaker 4: big and anybody complains, you know how plays consequences. So 35 00:01:53,960 --> 00:01:56,040 Speaker 4: when they decided to deal with this, which is just 36 00:01:56,080 --> 00:01:58,240 Speaker 4: I guess a week ago, you get this kind of 37 00:01:58,280 --> 00:02:00,240 Speaker 4: power rally. I noticed a CSI is on. We have 38 00:02:00,360 --> 00:02:02,440 Speaker 4: nine percent, so it's cooling off a little bit for 39 00:02:02,480 --> 00:02:06,920 Speaker 4: the days. But so that's the key is a lot 40 00:02:06,920 --> 00:02:10,280 Speaker 4: of money to put to work and a powerful central 41 00:02:10,320 --> 00:02:13,079 Speaker 4: government that can solve the problem and also pretty tight 42 00:02:13,160 --> 00:02:15,399 Speaker 4: monetary policy up until now, so it's not like they've 43 00:02:15,400 --> 00:02:18,080 Speaker 4: been super loose and now getting even looser. 44 00:02:18,400 --> 00:02:20,560 Speaker 3: You know, I talk about a crisis. I'm very curious 45 00:02:20,560 --> 00:02:22,960 Speaker 3: about why this moment as we head into this holiday, 46 00:02:22,960 --> 00:02:24,520 Speaker 3: but why they decided to do this now? And then 47 00:02:24,560 --> 00:02:27,079 Speaker 3: you talk about that savings rate and we're well acquainted 48 00:02:27,080 --> 00:02:29,560 Speaker 3: with the kind of property crisis we've seen across the country. 49 00:02:30,120 --> 00:02:31,760 Speaker 3: How difficult is it going to be for them to 50 00:02:32,200 --> 00:02:35,160 Speaker 3: change what are here kind of economic and cultural habits 51 00:02:35,440 --> 00:02:37,080 Speaker 3: of the country to get them to spend more and 52 00:02:37,120 --> 00:02:38,839 Speaker 3: to deal with this property crisis. 53 00:02:39,520 --> 00:02:41,960 Speaker 4: Well, I think that actually it all came from policy 54 00:02:41,960 --> 00:02:45,880 Speaker 4: in the first place. It's really a crackdown on wealthy, 55 00:02:46,480 --> 00:02:50,919 Speaker 4: influential people, which the party thought was a threat to 56 00:02:50,960 --> 00:02:54,240 Speaker 4: their power, and so they just were running with that, 57 00:02:54,440 --> 00:02:57,359 Speaker 4: and then at some point they realize, oh, yeah, that's right, 58 00:02:57,400 --> 00:02:59,519 Speaker 4: people do care about economic growth, or we do care, 59 00:03:00,040 --> 00:03:03,200 Speaker 4: so we have to come back to that. So it's 60 00:03:03,480 --> 00:03:06,120 Speaker 4: really just authoritarian flip flop. 61 00:03:07,040 --> 00:03:11,240 Speaker 2: So how does a politics figure into this, because I mean, 62 00:03:11,600 --> 00:03:15,040 Speaker 2: I would think that the Chinese economy really cannot fully 63 00:03:15,040 --> 00:03:19,359 Speaker 2: recover without really aggressive trade with the rest of the world. 64 00:03:20,040 --> 00:03:22,480 Speaker 2: How do they think about the US and the rest 65 00:03:22,520 --> 00:03:24,639 Speaker 2: of the West in terms of trade, because it just 66 00:03:24,639 --> 00:03:27,280 Speaker 2: seems like if you just provide some stimulus, that's not 67 00:03:27,320 --> 00:03:29,600 Speaker 2: going to get it done well. 68 00:03:30,320 --> 00:03:32,360 Speaker 4: I would still go back to if you've saved forty 69 00:03:32,360 --> 00:03:35,280 Speaker 4: five percent, you can paper over a lot of problems. 70 00:03:36,000 --> 00:03:39,360 Speaker 4: And so there is going to be pressure from additional 71 00:03:39,520 --> 00:03:45,760 Speaker 4: trade restrictions, particularly if Trump becomes president. But it's important 72 00:03:45,800 --> 00:03:47,920 Speaker 4: to note that if you have a physical and monetary 73 00:03:47,920 --> 00:03:50,120 Speaker 4: policy firing, you can deal with a lot of the 74 00:03:50,160 --> 00:03:52,040 Speaker 4: problems on the trade front. 75 00:03:52,080 --> 00:03:54,080 Speaker 3: You mentioned if Trump wins. Let me just get your 76 00:03:54,120 --> 00:03:57,120 Speaker 3: perspective on the election here in the US and sort 77 00:03:57,120 --> 00:03:59,680 Speaker 3: of how you're thinking through what may or may not 78 00:03:59,720 --> 00:04:01,360 Speaker 3: happen to hear in the next couple of six weeks. 79 00:04:01,640 --> 00:04:04,200 Speaker 3: Six weeks to go here, and there's a lot between 80 00:04:04,200 --> 00:04:06,640 Speaker 3: now now and then. How are you framing or thinking 81 00:04:06,640 --> 00:04:09,120 Speaker 3: about the election and the impact it's going to have globally. 82 00:04:09,360 --> 00:04:11,520 Speaker 4: We're not far off from your prior guests. Maybe we 83 00:04:11,600 --> 00:04:14,280 Speaker 4: get there a little bit differently. We're not polsters, so 84 00:04:14,320 --> 00:04:17,120 Speaker 4: we look at gambling ons as are sort of markets. 85 00:04:17,720 --> 00:04:20,159 Speaker 4: If you look at the chumulated probabilities, you get the 86 00:04:20,200 --> 00:04:22,640 Speaker 4: same close to the same result as your prayer guests. 87 00:04:23,040 --> 00:04:27,360 Speaker 4: Twelve percent chance of a Republican sweep, eight percent democratics, 88 00:04:27,440 --> 00:04:32,200 Speaker 4: or it's eighty percent. Eighty percent is good in our situation. 89 00:04:32,200 --> 00:04:36,000 Speaker 4: Our political situation, you want divided government. Each side kind 90 00:04:36,000 --> 00:04:38,799 Speaker 4: of fights the other spending, so you have less spending, 91 00:04:39,320 --> 00:04:42,360 Speaker 4: less change. We don't want an increase in corporate taxes. 92 00:04:42,920 --> 00:04:46,520 Speaker 4: That's a terrible economic policy and it's terrible for stocks. 93 00:04:47,400 --> 00:04:50,880 Speaker 4: So democratic sweep, irrespective of politics, wouldn't be good for 94 00:04:50,920 --> 00:04:52,360 Speaker 4: the stock market in the short run. You get a 95 00:04:52,400 --> 00:04:55,360 Speaker 4: lot of capital gains harvesting, which we normally don't get, 96 00:04:55,640 --> 00:04:57,480 Speaker 4: so you would get a really weak market and a 97 00:04:57,560 --> 00:05:02,520 Speaker 4: democratic sweep. Case it's only eight percent, so we're focused 98 00:05:02,560 --> 00:05:05,320 Speaker 4: on the eighty And we still have a six thousand target, 99 00:05:05,760 --> 00:05:09,120 Speaker 4: which looks too conservative right now, but we're not going 100 00:05:09,160 --> 00:05:11,920 Speaker 4: to raise it because it's already pretty aggressive. It's twenty 101 00:05:11,920 --> 00:05:14,239 Speaker 4: one and a half times next year's earnings. 102 00:05:14,440 --> 00:05:15,279 Speaker 1: Thirty seconds left. 103 00:05:15,320 --> 00:05:18,000 Speaker 4: You still like the banks we do, We think you 104 00:05:18,080 --> 00:05:21,599 Speaker 4: should be out on the risk curve, so that's banks reads. 105 00:05:22,760 --> 00:05:26,599 Speaker 4: Tech is probably going to underperform on the fixed income side. 106 00:05:26,640 --> 00:05:29,159 Speaker 4: Preferred stocks are likely to continue to do well. They've 107 00:05:29,160 --> 00:05:32,680 Speaker 4: been doing really well, so take more risks, go out 108 00:05:32,680 --> 00:05:35,920 Speaker 4: on duration because all these global rate cuts are very 109 00:05:35,960 --> 00:05:37,919 Speaker 4: powerful and drive global rates lower. 110 00:05:38,279 --> 00:05:41,240 Speaker 2: Next time you walk in the studio, just say preferred stock, 111 00:05:41,279 --> 00:05:43,360 Speaker 2: and we're gonna do a whole semeon referred stock because 112 00:05:43,360 --> 00:05:46,040 Speaker 2: we never talk about stocks. Yes, it remind me because 113 00:05:46,040 --> 00:05:47,520 Speaker 2: I used to make a lot of money selling those 114 00:05:47,560 --> 00:05:50,400 Speaker 2: things back in the day, and nobody talks about them anymore. 115 00:05:50,400 --> 00:05:52,800 Speaker 2: I guess I know interest rates is zero forever. So 116 00:05:53,000 --> 00:05:57,040 Speaker 2: j Hatfield, CEO, founder and portfolio manager Infrastructure Capital Management, 117 00:05:57,120 --> 00:06:01,280 Speaker 2: appreciate coming in studio. Talk to your public relations persons 118 00:06:01,279 --> 00:06:14,480 Speaker 2: about timing that holding. So anyway, Henrietta tres Joints is 119 00:06:14,560 --> 00:06:18,480 Speaker 2: managing partner in Vada Partners. Henrietta, what moves the needle 120 00:06:18,640 --> 00:06:21,120 Speaker 2: if anything between now in November? 121 00:06:21,480 --> 00:06:26,520 Speaker 1: Fifth, great question. We really only have one predictable event 122 00:06:26,640 --> 00:06:30,080 Speaker 1: left and that is tomorrow night's vice presidential debate between 123 00:06:30,320 --> 00:06:33,840 Speaker 1: Jadie Bance, who is currently over ten points underwater in 124 00:06:33,880 --> 00:06:38,000 Speaker 1: the favorability ratings scale, and Tim Waltz, who is ahead 125 00:06:38,080 --> 00:06:40,839 Speaker 1: by about three and a half points. So I'm expecting 126 00:06:41,800 --> 00:06:44,520 Speaker 1: a more of attention on turning out the vote as 127 00:06:44,520 --> 00:06:47,480 Speaker 1: opposed to specific policy prescriptions out of the ninety minute 128 00:06:47,480 --> 00:06:50,159 Speaker 1: to bate tomorrow night, I imagine they're going to try 129 00:06:50,200 --> 00:06:53,200 Speaker 1: to not just reach voters for watching in real time, 130 00:06:53,440 --> 00:06:55,320 Speaker 1: but all the ones who will catch up the next 131 00:06:55,480 --> 00:06:58,520 Speaker 1: day on social media with the memes and everything. That 132 00:06:58,560 --> 00:07:03,200 Speaker 1: I'm anticipating is really just expecting a meme worthy event 133 00:07:03,240 --> 00:07:04,600 Speaker 1: more than a policy heavy event. 134 00:07:04,920 --> 00:07:08,440 Speaker 3: A meme worthy event, Henriette, how much does this debate matter? 135 00:07:08,520 --> 00:07:11,760 Speaker 3: I think back on past vice presidential debates and more 136 00:07:11,760 --> 00:07:16,160 Speaker 3: conventional campaigns often sandwich between presidential debates. Seems like we're 137 00:07:16,160 --> 00:07:18,560 Speaker 3: not going to get another one of those. How much 138 00:07:18,640 --> 00:07:21,040 Speaker 3: does this matter? And let's take each of the two 139 00:07:21,080 --> 00:07:23,400 Speaker 3: candidates in kind, what does each have to do on 140 00:07:23,440 --> 00:07:24,800 Speaker 3: stage tomorrow here in New York? 141 00:07:25,720 --> 00:07:27,840 Speaker 1: Yeah? I don't think that. Based off what we saw 142 00:07:27,920 --> 00:07:30,040 Speaker 1: on the first presidential debate, which has a lot more 143 00:07:30,080 --> 00:07:31,880 Speaker 1: at stake, there wasn't a ton of movement in the 144 00:07:31,920 --> 00:07:35,400 Speaker 1: polls following. People did get to learn about Kamal Hyris's 145 00:07:35,960 --> 00:07:40,200 Speaker 1: policies and they were received favorably, and the most memorable 146 00:07:40,320 --> 00:07:42,200 Speaker 1: moment of the night was probably Trump saying, you know, 147 00:07:42,360 --> 00:07:46,320 Speaker 1: eating the cats, eating the dogs, something along those lines 148 00:07:46,400 --> 00:07:49,040 Speaker 1: is more of what I'm expecting to come out. Tim 149 00:07:49,080 --> 00:07:53,760 Speaker 1: Wallas is the most non understood, least known candidate on 150 00:07:53,800 --> 00:07:56,720 Speaker 1: the field versus JD Vance, and so I think that 151 00:07:56,760 --> 00:08:00,400 Speaker 1: there's potential for him to lose vote share and see 152 00:08:00,400 --> 00:08:06,120 Speaker 1: that plus three percent favoritability rating drop. That's usually what happens, 153 00:08:06,160 --> 00:08:08,320 Speaker 1: people like you less after a debate than they saw 154 00:08:08,320 --> 00:08:10,600 Speaker 1: you before. That's not the case that we saw with 155 00:08:10,640 --> 00:08:13,000 Speaker 1: Kamala Harris. But there is a lot of room for 156 00:08:13,360 --> 00:08:16,480 Speaker 1: Waltz to go in either direction, whereas JD Vance's numbers 157 00:08:16,480 --> 00:08:19,600 Speaker 1: are pretty baked in and then been very consistently underwater 158 00:08:19,640 --> 00:08:22,360 Speaker 1: since he got into the race. Negative ten, negative thirteen 159 00:08:22,840 --> 00:08:24,960 Speaker 1: and thereabout. So I think jd Vance is the most 160 00:08:24,960 --> 00:08:27,760 Speaker 1: to gain tomorrow night, and Tim Watz is at risk 161 00:08:27,920 --> 00:08:30,520 Speaker 1: of becoming more well known and then therefore less popular. 162 00:08:30,960 --> 00:08:33,120 Speaker 1: So that's probably the starting point I'm going to go 163 00:08:33,160 --> 00:08:34,440 Speaker 1: into it with Henrietta. 164 00:08:34,480 --> 00:08:36,680 Speaker 2: I saw over the weekend that Kamala Harris raised fifty 165 00:08:36,760 --> 00:08:41,280 Speaker 2: five million dollars in California fundraisers. Does that even matter anymore? 166 00:08:41,320 --> 00:08:43,400 Speaker 2: I mean, I just don't know how you appeal to 167 00:08:43,440 --> 00:08:45,920 Speaker 2: those five to ten to fifteen million voters that suppose 168 00:08:45,960 --> 00:08:47,280 Speaker 2: are going to decide this thing. 169 00:08:48,240 --> 00:08:50,000 Speaker 1: Yeah, I was actually just looking at the numbers and 170 00:08:50,040 --> 00:08:51,559 Speaker 1: I have to read them a couple of times. The 171 00:08:52,360 --> 00:08:55,440 Speaker 1: Harris Waltz campaign raised two hundred and eighty seven million 172 00:08:55,520 --> 00:08:59,360 Speaker 1: dollars in August versus eighty five million for the Republican ticket. 173 00:08:59,840 --> 00:09:03,800 Speaker 1: There is this huge deluge of an enthusiasm represented by 174 00:09:03,840 --> 00:09:08,800 Speaker 1: these numbers. But what I would anticipate and what I 175 00:09:08,840 --> 00:09:10,720 Speaker 1: focus on a lot, because I think it's more important 176 00:09:10,760 --> 00:09:13,120 Speaker 1: for the tax bill is where that money is being spent, 177 00:09:13,160 --> 00:09:15,320 Speaker 1: and a lot of it is trickling down ballot. So 178 00:09:15,360 --> 00:09:18,400 Speaker 1: you see Republicans now defending Senate seats where they should 179 00:09:18,440 --> 00:09:21,360 Speaker 1: otherwise have no business spending money. States like Texas and 180 00:09:21,440 --> 00:09:25,160 Speaker 1: Florida for example, even Iowa and then you in Nebraska 181 00:09:25,240 --> 00:09:28,480 Speaker 1: would be another example, and then down ballot even further 182 00:09:28,600 --> 00:09:31,040 Speaker 1: on the House side. The Democrats have just expanded the 183 00:09:31,080 --> 00:09:35,400 Speaker 1: map into non swing states, into states and districts where 184 00:09:35,559 --> 00:09:38,760 Speaker 1: maybe Biden one, but maybe Harris is potentially going to 185 00:09:38,760 --> 00:09:41,520 Speaker 1: pick up tiny little pockets in the population. And that's 186 00:09:41,559 --> 00:09:44,400 Speaker 1: her campaign strategy. Go into the suburbs, go into some 187 00:09:44,440 --> 00:09:48,320 Speaker 1: of the rural areas, whether it's in Pennsylvania or North 188 00:09:48,320 --> 00:09:50,920 Speaker 1: Carolina or Georgia and really try to speak to voters 189 00:09:50,920 --> 00:09:52,840 Speaker 1: exactly where they are. So think of the money not 190 00:09:52,960 --> 00:09:55,960 Speaker 1: in terms of what it can do from a big 191 00:09:56,040 --> 00:09:59,280 Speaker 1: picture perspective. You know, everybody's already bought their ad campaigns, 192 00:09:59,400 --> 00:10:02,360 Speaker 1: but think about how it fuels up a gas, fuels 193 00:10:02,440 --> 00:10:05,600 Speaker 1: up the gas for a tour bus for House and 194 00:10:05,640 --> 00:10:08,320 Speaker 1: Senate members to go on tour in their districts. That's 195 00:10:08,320 --> 00:10:10,360 Speaker 1: where all that money's being plowed into, and that's going 196 00:10:10,400 --> 00:10:12,679 Speaker 1: to be the difference between a split ticket excuse me, 197 00:10:12,720 --> 00:10:15,480 Speaker 1: split control of Congress next year, or a suite for 198 00:10:15,559 --> 00:10:16,400 Speaker 1: one party or the other. 199 00:10:16,600 --> 00:10:18,719 Speaker 3: The Harris campaign spending an average of seven and a 200 00:10:18,760 --> 00:10:21,520 Speaker 3: half million dollars a day in August compared with two 201 00:10:21,559 --> 00:10:25,560 Speaker 3: point six million a day Donald Trump hender. You mentioned 202 00:10:25,559 --> 00:10:29,200 Speaker 3: the tax bill. How are you thinking through the likelihood 203 00:10:29,320 --> 00:10:31,559 Speaker 3: of there being significant changes to the tax code. You 204 00:10:31,600 --> 00:10:34,319 Speaker 3: mentioned that debate between Vice President Harris and former President 205 00:10:34,360 --> 00:10:37,959 Speaker 3: Trump in Philadelphia, and we got more economic policy points 206 00:10:37,960 --> 00:10:40,680 Speaker 3: from her on the heels of that. So much of 207 00:10:40,720 --> 00:10:44,600 Speaker 3: this hinges on who's in Congress, what the dynamics there are. 208 00:10:45,400 --> 00:10:47,640 Speaker 3: Walk us through sort of how you're thinking about that 209 00:10:47,720 --> 00:10:51,520 Speaker 3: amidst all this uncertainty at the presidential level. Looking, how 210 00:10:51,559 --> 00:10:53,560 Speaker 3: should we interpret what these two candidates are saying about 211 00:10:53,600 --> 00:10:54,920 Speaker 3: taxes in light of the fact that they're going to 212 00:10:54,960 --> 00:10:57,800 Speaker 3: have limited power to do much without Congress. 213 00:10:59,000 --> 00:11:01,080 Speaker 1: Well, I'm going to be kind of aggressive here and 214 00:11:01,080 --> 00:11:05,600 Speaker 1: say the two sides are not far apart at all, 215 00:11:05,720 --> 00:11:09,320 Speaker 1: and the election outcome I think is going to be 216 00:11:09,400 --> 00:11:12,640 Speaker 1: pretty easy to translate to tax policy. Here's why. If 217 00:11:12,679 --> 00:11:15,720 Speaker 1: Trump wins with ninety percent odds, I anticipate he'll have 218 00:11:15,840 --> 00:11:19,360 Speaker 1: a Republican Senate and with sixty percent odds they'll have 219 00:11:19,360 --> 00:11:22,040 Speaker 1: a Republican House, So that's one party control. All of 220 00:11:22,040 --> 00:11:24,320 Speaker 1: the tax peds will be extended at their current rates. 221 00:11:24,480 --> 00:11:26,360 Speaker 1: I do not think the corporate tax rate will drop, 222 00:11:26,400 --> 00:11:28,040 Speaker 1: there are not enough votes for that. The United States 223 00:11:28,080 --> 00:11:29,720 Speaker 1: set at the salt cap will go to twenty k 224 00:11:29,880 --> 00:11:32,800 Speaker 1: or thereabouts. We will not repeal the IRA tax credits 225 00:11:32,800 --> 00:11:36,120 Speaker 1: for manufacturing, et cetera, et cetera. On the Democratic side, 226 00:11:36,200 --> 00:11:38,920 Speaker 1: if Kamala Harris wins, I still have ninety percent ods, 227 00:11:38,920 --> 00:11:40,840 Speaker 1: the Senate is going to be Republican. What happens in 228 00:11:40,880 --> 00:11:43,800 Speaker 1: that universe exactly what happened in twenty ten, you get 229 00:11:43,800 --> 00:11:46,720 Speaker 1: a two year extension of all the existing tax breaks 230 00:11:46,960 --> 00:11:50,120 Speaker 1: for every income bracket. You raise salt to maybe forty 231 00:11:50,200 --> 00:11:53,079 Speaker 1: sixty K, you provide a child tax credit which is 232 00:11:53,080 --> 00:11:56,200 Speaker 1: in about another trillion dollars, and you maintain all the 233 00:11:56,200 --> 00:11:58,040 Speaker 1: IRA tax credits. That's going to be your bill of 234 00:11:58,080 --> 00:12:01,960 Speaker 1: Kamala Harris wins. The idea where Democrats have a sweep 235 00:12:02,000 --> 00:12:04,920 Speaker 1: control is only a ten percent prospect in my opinion. 236 00:12:05,040 --> 00:12:07,840 Speaker 1: So effectively, what I'm saying is, no matter what happens 237 00:12:07,880 --> 00:12:09,400 Speaker 1: at the top, you're going to get a two year 238 00:12:09,440 --> 00:12:12,000 Speaker 1: extension at a minimum of all the existing tax breaks. 239 00:12:12,280 --> 00:12:15,200 Speaker 1: That's a blueprint that we've had all year long. It's 240 00:12:15,240 --> 00:12:17,920 Speaker 1: not that confusing. It seems really clear to me. So 241 00:12:17,920 --> 00:12:20,040 Speaker 1: that's what I'm expecting next year. We'll deal with the 242 00:12:20,040 --> 00:12:22,199 Speaker 1: debt ceiling first, and we'll send the second half of 243 00:12:22,240 --> 00:12:24,400 Speaker 1: the year on taxes. Pass it in late December, and 244 00:12:24,440 --> 00:12:27,199 Speaker 1: everything will be extended for two years out of minimum. 245 00:12:27,440 --> 00:12:28,600 Speaker 3: No equivocating their pall. 246 00:12:29,120 --> 00:12:31,360 Speaker 2: I mean, that's why Henrietta is the best. I mean, 247 00:12:32,120 --> 00:12:34,520 Speaker 2: I mean, it makes it pretty clear here Henrietta. I mean, 248 00:12:35,640 --> 00:12:39,079 Speaker 2: from a political perspective, does anybody care about the debt 249 00:12:39,240 --> 00:12:41,080 Speaker 2: and the deficits and things like that, or from a 250 00:12:41,080 --> 00:12:43,920 Speaker 2: political perspectives, that just the third rail and there's no upside. 251 00:12:44,760 --> 00:12:47,679 Speaker 1: They sure don't, you know, you look at the policies 252 00:12:47,679 --> 00:12:50,000 Speaker 1: that have been enacted, not just since COVID, but going 253 00:12:50,040 --> 00:12:52,400 Speaker 1: back as I went back to twenty ten. There's just 254 00:12:52,480 --> 00:12:55,320 Speaker 1: not a concern about the deficit and federal spending right now. 255 00:12:55,760 --> 00:12:58,040 Speaker 1: I have this conversation a lot with foreign clients where 256 00:12:58,040 --> 00:12:59,839 Speaker 1: they're saying, you know, surely America is going to get 257 00:13:00,080 --> 00:13:01,880 Speaker 1: learned about this, and then you come over to the States, 258 00:13:02,200 --> 00:13:05,280 Speaker 1: and American investors do not follow this nearly as much 259 00:13:05,320 --> 00:13:08,000 Speaker 1: as overseas investors. And I can promise you that in 260 00:13:08,040 --> 00:13:11,240 Speaker 1: a campaign, an electioneer, Democrats and Republicans are not thinking 261 00:13:11,240 --> 00:13:14,480 Speaker 1: about on Capitol Hill, the scenario where Harris wins and 262 00:13:14,520 --> 00:13:17,520 Speaker 1: we get a two year extension of everything means that 263 00:13:17,640 --> 00:13:20,439 Speaker 1: in that interim two years twenty six and twenty seven, 264 00:13:20,520 --> 00:13:24,800 Speaker 1: we have another round of fiscal negotiations around as Simpson 265 00:13:24,840 --> 00:13:29,320 Speaker 1: Bulls asked, bipartisan deficit reduction compromise, And unfortunately, I'm going 266 00:13:29,320 --> 00:13:31,440 Speaker 1: to default to the base case, which is that even 267 00:13:31,480 --> 00:13:34,199 Speaker 1: after those commissions are organized, nothing changes. 268 00:13:35,240 --> 00:13:37,480 Speaker 3: We see Donald Trump heading back to Wisconsin. He was 269 00:13:37,520 --> 00:13:39,080 Speaker 3: there last week. He's going to go there again on 270 00:13:39,080 --> 00:13:42,199 Speaker 3: Tuesday after a stop in Georgia. Kamala Harris out in 271 00:13:42,240 --> 00:13:44,440 Speaker 3: California then in Las Vegas. She's going to go visit 272 00:13:44,440 --> 00:13:46,840 Speaker 3: FEMA headquarters today. After what happened over the weekend with 273 00:13:46,840 --> 00:13:50,480 Speaker 3: the storm in the southeast. What would you if you 274 00:13:50,480 --> 00:13:52,560 Speaker 3: were running these two campaigns. We know what the swing 275 00:13:52,559 --> 00:13:54,560 Speaker 3: states are, the five six swing states. What would you 276 00:13:54,600 --> 00:13:57,000 Speaker 3: be prioritizing at this point? It's interesting, just kind of 277 00:13:57,000 --> 00:14:00,080 Speaker 3: divine based on their travel where these campaigns think they 278 00:14:00,080 --> 00:14:01,320 Speaker 3: need to be spending the most time. You talked about 279 00:14:01,320 --> 00:14:03,040 Speaker 3: Pennsylvania a little while back. It seems like that is 280 00:14:03,080 --> 00:14:06,280 Speaker 3: the magnet that is drawing them back to Pittsburgh over 281 00:14:06,320 --> 00:14:08,840 Speaker 3: and over and over again. Where should they be focusing 282 00:14:08,880 --> 00:14:10,760 Speaker 3: on this point? And how resonant do you think their 283 00:14:10,760 --> 00:14:13,880 Speaker 3: message is when you look at that kind of granular level, you. 284 00:14:13,840 --> 00:14:16,280 Speaker 1: Know, instead of repeating something that is very fair but 285 00:14:16,360 --> 00:14:20,080 Speaker 1: often stated by people watching the polls, Pennsylvania's critical. The 286 00:14:20,400 --> 00:14:23,200 Speaker 1: money that Harris has raised allows her to, you know, 287 00:14:23,560 --> 00:14:25,880 Speaker 1: juice up a tour bus and go to the different 288 00:14:25,960 --> 00:14:29,520 Speaker 1: suburbs and rural areas of Pittsburgh and the outlying areas 289 00:14:29,560 --> 00:14:33,160 Speaker 1: and really turn out her margins where possible there but 290 00:14:33,360 --> 00:14:37,720 Speaker 1: to tie into the hurricane those the hurricane went straight 291 00:14:37,760 --> 00:14:41,680 Speaker 1: through a Republican voter war path and it is decimated 292 00:14:42,480 --> 00:14:46,800 Speaker 1: huge swasps of the country in that exact area. I 293 00:14:46,840 --> 00:14:48,600 Speaker 1: think that the Trump campaign should spend a lot of 294 00:14:48,720 --> 00:14:51,560 Speaker 1: energy talking about mail and balloting to those voters who 295 00:14:51,600 --> 00:14:53,640 Speaker 1: don't have the infrastructure and will you know, will be 296 00:14:53,680 --> 00:14:56,680 Speaker 1: busy rebuilding their homes and maybe not available to give 297 00:14:56,680 --> 00:14:58,560 Speaker 1: a vote on the first Tuesday in November because of 298 00:14:58,560 --> 00:15:01,160 Speaker 1: the destruction that the hurricane is. I would spend all 299 00:15:01,240 --> 00:15:03,920 Speaker 1: my resources on shoring up those boats that are already 300 00:15:03,960 --> 00:15:06,640 Speaker 1: locked in for the Trump campaign but now are very 301 00:15:06,720 --> 00:15:08,640 Speaker 1: much at risk of just not showing up because of 302 00:15:08,640 --> 00:15:09,960 Speaker 1: the destruction that just occurred. 303 00:15:10,120 --> 00:15:12,480 Speaker 2: Wow, all right, Henriette, I think I appreciate your tying 304 00:15:12,520 --> 00:15:15,040 Speaker 2: all that in for us. Henrietta Treds managing partner Veta 305 00:15:15,040 --> 00:15:18,000 Speaker 2: Partner's Boy. From my perspective, usually is nobody better and 306 00:15:18,120 --> 00:15:24,800 Speaker 2: kind of bringing it all to the front. Here. Looks like 307 00:15:25,080 --> 00:15:28,760 Speaker 2: we're going to have some labor strife on the eastern 308 00:15:29,280 --> 00:15:32,920 Speaker 2: docks here in ports along the East Coast and Gulf here. 309 00:15:33,440 --> 00:15:35,400 Speaker 2: It just doesn't seem like these two sides are making 310 00:15:35,480 --> 00:15:39,000 Speaker 2: any leeway or any headway in terms of these discussions. 311 00:15:39,040 --> 00:15:41,520 Speaker 2: Get the latest reporting from Danny Berger. She's a host 312 00:15:41,560 --> 00:15:44,360 Speaker 2: of Bloomberg Television. Danny, I see you stand and there 313 00:15:44,360 --> 00:15:46,480 Speaker 2: are folks on YouTube can see you standing at a 314 00:15:46,560 --> 00:15:49,880 Speaker 2: dock somewhere that is ground zero for these discussions. What's 315 00:15:49,880 --> 00:15:50,680 Speaker 2: the latest reporting. 316 00:15:53,800 --> 00:15:57,840 Speaker 5: I'm at one of the busiest docks. I'm in Newark, 317 00:15:57,880 --> 00:16:00,920 Speaker 5: and docks like this have been preparing for a strike 318 00:16:01,280 --> 00:16:03,840 Speaker 5: at the strike of midnight tonight. They've been extending hours 319 00:16:03,840 --> 00:16:06,680 Speaker 5: because by all accounts, this will go ahead. There are 320 00:16:06,720 --> 00:16:10,400 Speaker 5: no current talks scheduled between the Longshoreman Association, that is 321 00:16:10,440 --> 00:16:14,120 Speaker 5: the union that represents the Eastern and Gulf ports and 322 00:16:14,200 --> 00:16:17,280 Speaker 5: the employers. There are two main disagreements that this is over. 323 00:16:17,360 --> 00:16:20,080 Speaker 5: One is about pay. They want a significant pay rise 324 00:16:20,120 --> 00:16:23,080 Speaker 5: from eighty percent over the next six years. The current 325 00:16:23,120 --> 00:16:26,520 Speaker 5: offer on offer, they say, is stingy. The second thing 326 00:16:26,560 --> 00:16:29,240 Speaker 5: they want is they do not want automation. They want 327 00:16:29,240 --> 00:16:31,640 Speaker 5: things written into the contract that says that there will 328 00:16:31,680 --> 00:16:34,360 Speaker 5: not be more automation on the docks, akin to what 329 00:16:34,440 --> 00:16:38,160 Speaker 5: we have in Asia. In Amsterdam, now, the workers here, 330 00:16:38,280 --> 00:16:40,440 Speaker 5: they do have significant leverage at this moment. For one, 331 00:16:40,480 --> 00:16:43,480 Speaker 5: they have an administration that is friendly to labor, and 332 00:16:43,520 --> 00:16:46,040 Speaker 5: they also have a supply demand issue. There are not 333 00:16:46,160 --> 00:16:48,600 Speaker 5: enough people who want to do these jobs, so they 334 00:16:48,640 --> 00:16:51,160 Speaker 5: have the kind of leverage that, ironically, in the first place, 335 00:16:51,440 --> 00:16:54,120 Speaker 5: is why so many of these docs want to automate 336 00:16:54,160 --> 00:16:55,120 Speaker 5: a lot of these jobs. 337 00:16:57,120 --> 00:16:59,800 Speaker 2: So what's the latest here, Danny? Where are these two sides? 338 00:16:59,840 --> 00:17:02,680 Speaker 2: I mean, this sounds like they're not even close here. 339 00:17:02,680 --> 00:17:04,480 Speaker 2: What are the next steps really? 340 00:17:07,359 --> 00:17:10,520 Speaker 5: So they are far apart. You're completely correct, they're so 341 00:17:10,680 --> 00:17:13,560 Speaker 5: far apart that there are no talks that are scheduled 342 00:17:13,600 --> 00:17:15,880 Speaker 5: for this moment. Some of the steps that we have 343 00:17:15,960 --> 00:17:18,320 Speaker 5: seen that's kind of occurring in the background is the 344 00:17:18,359 --> 00:17:22,040 Speaker 5: administration trying to mediate this. Again, the administration is in 345 00:17:22,280 --> 00:17:25,240 Speaker 5: a catch twenty two. They want the union support, so 346 00:17:25,280 --> 00:17:27,280 Speaker 5: they don't want to step in and prevent this strike 347 00:17:27,320 --> 00:17:29,440 Speaker 5: from happening, but at the same time they don't want 348 00:17:29,440 --> 00:17:32,600 Speaker 5: the economic damage. So the strike will happen twelve oh 349 00:17:32,760 --> 00:17:38,040 Speaker 5: one am on Tuesday, then talks will presumably happen. Now, 350 00:17:38,359 --> 00:17:40,560 Speaker 5: most by most accounts, experts we speak to think that 351 00:17:40,560 --> 00:17:42,439 Speaker 5: this will only last for a few days. There is 352 00:17:42,520 --> 00:17:46,800 Speaker 5: significant pressure here considering the money, the economic impact that 353 00:17:47,119 --> 00:17:50,919 Speaker 5: is at stake. But again the Longshoreman Association say that 354 00:17:50,960 --> 00:17:53,360 Speaker 5: they are ready to quote the head of the long 355 00:17:53,359 --> 00:17:56,600 Speaker 5: Shoreman's Association. He says that a sleeping giant will be 356 00:17:56,680 --> 00:17:58,359 Speaker 5: awakened come tomorrow morning. 357 00:17:58,480 --> 00:18:00,000 Speaker 2: All right, Danni, thank you so much for joining us. 358 00:18:00,040 --> 00:18:02,919 Speaker 2: Danny Berger hooset to Bloomberg Television Live reporting from the 359 00:18:02,960 --> 00:18:17,360 Speaker 2: docks in lovely Newark, New Jersey. I was over in 360 00:18:17,480 --> 00:18:19,800 Speaker 2: the Motherland, over in Ireland last week, seeing the people, 361 00:18:19,840 --> 00:18:23,200 Speaker 2: seeing the family. Apparently the Bank of I mean Japan, 362 00:18:23,240 --> 00:18:26,520 Speaker 2: the PBOC was pretty active last week, David, and I 363 00:18:26,560 --> 00:18:29,000 Speaker 2: think that's good news. It's certainly good news for folks 364 00:18:29,000 --> 00:18:31,200 Speaker 2: that own Chinese stocks like Ali Baba. But what does 365 00:18:31,200 --> 00:18:33,359 Speaker 2: it mean here? Amanda Rabella joins us. She's had of 366 00:18:33,560 --> 00:18:36,840 Speaker 2: x tracker sales us on shore at DWS Group. She 367 00:18:36,960 --> 00:18:39,359 Speaker 2: joins us here in studio. Amanda, thanks so much for 368 00:18:39,480 --> 00:18:42,119 Speaker 2: joining us here. Again, what did you make from the 369 00:18:42,119 --> 00:18:44,119 Speaker 2: PBOC last week and what they're trying to do to 370 00:18:44,160 --> 00:18:45,760 Speaker 2: the Chinese economy here? 371 00:18:46,240 --> 00:18:49,440 Speaker 6: Yeah, absolutely, it's really interesting. China is something that we're 372 00:18:49,720 --> 00:18:52,560 Speaker 6: always speaking about X trackers. So we launched the first 373 00:18:53,280 --> 00:18:57,480 Speaker 6: A shares you know, direct holdings of the China shares 374 00:18:57,760 --> 00:19:01,600 Speaker 6: with the West Nasset Manager almost years ago actually in 375 00:19:01,640 --> 00:19:03,879 Speaker 6: Europe and also in the US as well, and so 376 00:19:03,920 --> 00:19:06,919 Speaker 6: we've now become like the default for that exposure. So 377 00:19:06,920 --> 00:19:09,160 Speaker 6: we were pretty busy to stay the least on Friday 378 00:19:09,200 --> 00:19:14,440 Speaker 6: and actually today as well. PBOC on Tuesday they announced 379 00:19:14,440 --> 00:19:17,240 Speaker 6: a number of stimuli which were then effective as of Friday, 380 00:19:17,280 --> 00:19:18,960 Speaker 6: so we saw a really big jump in the market. 381 00:19:19,000 --> 00:19:20,960 Speaker 6: I think all of us know that China has been 382 00:19:21,000 --> 00:19:24,160 Speaker 6: really out of favor for international investors for the past 383 00:19:24,200 --> 00:19:26,600 Speaker 6: couple of years. In particular, was definitely a darling, but 384 00:19:26,640 --> 00:19:29,240 Speaker 6: I would say post pandemic has never really kind of 385 00:19:29,320 --> 00:19:32,000 Speaker 6: got back to where it was. Obviously, we've seen the 386 00:19:32,000 --> 00:19:36,000 Speaker 6: cut in projections regarding the target GDP growth that the 387 00:19:36,000 --> 00:19:38,280 Speaker 6: government has been expecting historically was around six and a 388 00:19:38,280 --> 00:19:41,199 Speaker 6: half percent came to about five percent. But there's been 389 00:19:41,240 --> 00:19:45,119 Speaker 6: a lot of cynicism from Western asset managers western investors 390 00:19:45,320 --> 00:19:47,200 Speaker 6: over the past couple of years about whether the five 391 00:19:47,240 --> 00:19:50,240 Speaker 6: percent was actually achievable, and so what we saw on 392 00:19:50,280 --> 00:19:55,199 Speaker 6: Friday effective was some changes in rates policy more broadly. So, 393 00:19:55,280 --> 00:19:59,960 Speaker 6: first of all, we saw decreases in the reserve requirement ratio, 394 00:20:00,320 --> 00:20:03,000 Speaker 6: and then we also saw a cut in the seven 395 00:20:03,080 --> 00:20:05,639 Speaker 6: day reserve rate as well. What these two together have 396 00:20:05,800 --> 00:20:09,240 Speaker 6: done is that actually it's injected the Chinese economy with 397 00:20:09,359 --> 00:20:12,960 Speaker 6: one trillion new one which is now available for investment, 398 00:20:13,440 --> 00:20:16,400 Speaker 6: and the market received that pretty well. So we actually 399 00:20:16,440 --> 00:20:21,040 Speaker 6: saw on Friday the market the CSI three hundred increased 400 00:20:21,040 --> 00:20:23,400 Speaker 6: by just shy of four point five percent, and then 401 00:20:23,440 --> 00:20:26,240 Speaker 6: it's closed that over eight percent up on the day, 402 00:20:26,640 --> 00:20:27,560 Speaker 6: which is incredible. 403 00:20:27,640 --> 00:20:30,920 Speaker 3: So being called the PBOC put by exactly people I know. 404 00:20:31,240 --> 00:20:33,359 Speaker 6: I don't think it's over as well, think there's more 405 00:20:33,960 --> 00:20:34,240 Speaker 6: to come. 406 00:20:34,320 --> 00:20:37,080 Speaker 3: Yeah, I'm curious you talk about the sort of investor's 407 00:20:37,080 --> 00:20:39,159 Speaker 3: skepticism that there's been the backdrop to all of this, 408 00:20:39,280 --> 00:20:41,280 Speaker 3: and I wonder how curtive you think these efforts are 409 00:20:41,280 --> 00:20:46,120 Speaker 3: going to be in allaying those concerns. So, given that 410 00:20:46,200 --> 00:20:49,800 Speaker 3: skepticism or fear about the state of the Chinese economy, 411 00:20:50,720 --> 00:20:51,960 Speaker 3: is this in a way alarming? 412 00:20:52,160 --> 00:20:52,560 Speaker 2: Is it? 413 00:20:52,600 --> 00:20:54,240 Speaker 3: Does it in gender more confidence? How do you see 414 00:20:54,240 --> 00:20:56,320 Speaker 3: it sort of playing out? I guess attitudinly, I. 415 00:20:56,240 --> 00:20:59,320 Speaker 6: Think we've seen it as pretty positive. We and also 416 00:20:59,400 --> 00:21:02,600 Speaker 6: are inventure partner Harvests, who are headquartered out of Beijing, 417 00:21:03,040 --> 00:21:05,879 Speaker 6: and so you know, even though they are headquartered out 418 00:21:05,920 --> 00:21:09,879 Speaker 6: of Beijing, they're actually quite measured in terms of their views. 419 00:21:09,920 --> 00:21:13,679 Speaker 6: They're not always massively bullish on China. What's really interesting 420 00:21:13,960 --> 00:21:16,680 Speaker 6: is that, you know, the biggest sector which is always 421 00:21:17,000 --> 00:21:21,200 Speaker 6: under pressure is residential property more broadly, and so these 422 00:21:21,240 --> 00:21:25,760 Speaker 6: two acts and more supportive for the property kind of 423 00:21:25,800 --> 00:21:28,439 Speaker 6: sector overall. What we see as well is that there 424 00:21:28,440 --> 00:21:32,400 Speaker 6: will be more government issuance of treasuries locally, which will 425 00:21:32,400 --> 00:21:36,080 Speaker 6: be kind of basically for funding infrastructure and property exercises 426 00:21:36,119 --> 00:21:38,840 Speaker 6: as well. So we think then that's all positive. There 427 00:21:38,920 --> 00:21:41,959 Speaker 6: was also a repercussion as well for you know, retail 428 00:21:42,000 --> 00:21:45,000 Speaker 6: mortgage rates as well, So again that's supportive from a 429 00:21:45,040 --> 00:21:48,719 Speaker 6: grassroots perspective, and you know, I think US and Harvest 430 00:21:48,800 --> 00:21:50,840 Speaker 6: we expect that there's more to come from a fiscal 431 00:21:50,880 --> 00:21:52,200 Speaker 6: policy perspective as well. 432 00:21:52,680 --> 00:21:54,359 Speaker 2: So you mentioned last week we did get a lot 433 00:21:54,400 --> 00:21:58,040 Speaker 2: of fiscal policy measures very positively received by the marketplace. Again, 434 00:21:58,080 --> 00:22:00,520 Speaker 2: Mike Proxy is just Ali Bobbings. I know that company 435 00:22:00,560 --> 00:22:02,960 Speaker 2: very well, up another three percent today, hitting a fifty 436 00:22:03,000 --> 00:22:04,880 Speaker 2: two week, HI up about fifty percent year to date. 437 00:22:05,080 --> 00:22:07,359 Speaker 2: But still my big issue, and I think for a 438 00:22:07,400 --> 00:22:10,720 Speaker 2: lot of investors issues why China still may be uninvestable. 439 00:22:11,080 --> 00:22:12,919 Speaker 2: I just don't know what the government's going to do. 440 00:22:12,960 --> 00:22:14,760 Speaker 2: Any given day. They can come along and say Tech, 441 00:22:14,840 --> 00:22:17,040 Speaker 2: we don't like you. Yeah, and we're going to enact 442 00:22:17,040 --> 00:22:19,240 Speaker 2: a bunch of policies that are going to impact your business, 443 00:22:19,240 --> 00:22:21,199 Speaker 2: and there's nothing an investor can do. How do you 444 00:22:21,520 --> 00:22:24,520 Speaker 2: view that risk when you talk to clients. I guess 445 00:22:24,560 --> 00:22:26,800 Speaker 2: the geopolitical risk just within China. 446 00:22:26,880 --> 00:22:29,240 Speaker 6: Yeah, so we do think that China. I mean there's 447 00:22:29,240 --> 00:22:31,120 Speaker 6: no right or wrong answer. I mean that's what's making 448 00:22:31,160 --> 00:22:35,159 Speaker 6: markets interesting as well, these diversions in thought. So, you know, 449 00:22:35,240 --> 00:22:38,359 Speaker 6: while we have been speaking about our ASHER and our 450 00:22:38,400 --> 00:22:41,600 Speaker 6: ASHS tickers with investors, for those that are more cynical 451 00:22:41,640 --> 00:22:43,359 Speaker 6: and maybe have a similar view to you, Paul, in 452 00:22:43,400 --> 00:22:46,360 Speaker 6: terms of what other the surprises that can happen, we've 453 00:22:46,400 --> 00:22:48,760 Speaker 6: actually been speaking to investors for coming up to a 454 00:22:48,840 --> 00:22:50,960 Speaker 6: year about a fund that we launched in collaboration with 455 00:22:51,000 --> 00:22:55,080 Speaker 6: Selective and JH. Whitney, which is CRTC. Think of it 456 00:22:55,119 --> 00:22:58,080 Speaker 6: as DMX China. So we always talk about EMX China, 457 00:22:58,160 --> 00:23:01,440 Speaker 6: but it's important to think about DMX China. So for example, 458 00:23:01,840 --> 00:23:05,800 Speaker 6: tech a great example you can think about. Then the 459 00:23:05,840 --> 00:23:08,560 Speaker 6: party is going to say, okay, all government officials, you 460 00:23:08,600 --> 00:23:10,800 Speaker 6: can't have an iPhone, and then you see market cap 461 00:23:10,840 --> 00:23:15,000 Speaker 6: of Apple drop right, and so CRTC. The US National 462 00:23:15,000 --> 00:23:19,879 Speaker 6: Critical Technologies ETFs tracking an index which is ultimately looking 463 00:23:19,960 --> 00:23:25,040 Speaker 6: at economic exposure to China, Russia, Iran which is becoming 464 00:23:25,040 --> 00:23:27,600 Speaker 6: more important as well, and North Korea. So these adversary 465 00:23:27,680 --> 00:23:30,480 Speaker 6: nations from a US and actually more broadly NATO perspective, 466 00:23:31,400 --> 00:23:35,480 Speaker 6: and so you're also then focusing as well on critical technologies. 467 00:23:35,520 --> 00:23:38,879 Speaker 6: So at the same time, it's also tapping into the 468 00:23:38,920 --> 00:23:41,920 Speaker 6: categories which have been identified by the Department of Defense, 469 00:23:42,119 --> 00:23:44,600 Speaker 6: which are going to maintain and even enhance the US 470 00:23:44,680 --> 00:23:48,520 Speaker 6: economy globally. You know, it's really about preservation of the 471 00:23:48,640 --> 00:23:50,359 Speaker 6: US economic standing in the world. 472 00:23:50,520 --> 00:23:53,400 Speaker 3: I'ld be spinning away from China just to international equities broadly. 473 00:23:53,840 --> 00:23:56,920 Speaker 3: How are you feeling about prospects there in light if yes, 474 00:23:56,960 --> 00:23:58,639 Speaker 3: what we've been talking about, certainly what the FED is 475 00:23:58,680 --> 00:24:01,400 Speaker 3: doing as well, how much an APPLA you have for them. 476 00:24:01,680 --> 00:24:03,399 Speaker 6: Yeah, So you know, I think when a lot of 477 00:24:03,440 --> 00:24:06,119 Speaker 6: clients are thinking about the MSCI world. For example, so 478 00:24:06,240 --> 00:24:08,960 Speaker 6: ten years ago, the US used to make up about 479 00:24:08,960 --> 00:24:12,920 Speaker 6: forty percent, then that became forty eight percent, and then 480 00:24:12,960 --> 00:24:15,600 Speaker 6: now it's it's pretty much sixty percent. So everyone has 481 00:24:15,640 --> 00:24:18,600 Speaker 6: got this inherent bias to the US. A lot of 482 00:24:18,600 --> 00:24:20,919 Speaker 6: people thinking is that too much. We've been speaking, you know, 483 00:24:20,960 --> 00:24:23,040 Speaker 6: for pretty much a year now about the mag seven 484 00:24:23,480 --> 00:24:27,280 Speaker 6: and so thinking about diversifying it back into international equities 485 00:24:27,359 --> 00:24:30,640 Speaker 6: is really interesting. We in particular really like Japan right now, 486 00:24:31,040 --> 00:24:34,080 Speaker 6: and we still think that there's a carry component, even 487 00:24:34,080 --> 00:24:36,919 Speaker 6: if the FED has cut rates recently and looks to 488 00:24:36,960 --> 00:24:39,280 Speaker 6: do so further. You know, Japan is always pretty much 489 00:24:39,280 --> 00:24:43,160 Speaker 6: a zero rates environment. But the Japanese economy what's interesting 490 00:24:43,359 --> 00:24:46,960 Speaker 6: is that it's moved away from having, you know, just 491 00:24:47,000 --> 00:24:49,960 Speaker 6: an export focus, and actually the demographics are starting to 492 00:24:50,040 --> 00:24:51,800 Speaker 6: change a little bit. There has been an increase in 493 00:24:52,040 --> 00:24:55,800 Speaker 6: domestic consumption, for example. So this is kind of long 494 00:24:55,840 --> 00:24:58,959 Speaker 6: standing we expect, and we think that gives a broader, 495 00:24:59,080 --> 00:25:02,240 Speaker 6: nice story for all the hedged exposure to MSCI Japan. 496 00:25:02,440 --> 00:25:03,920 Speaker 2: Well, we want to first start on Wall Street. In 497 00:25:03,920 --> 00:25:06,280 Speaker 2: the mid eighties, Japan was the bomb. You had to 498 00:25:06,359 --> 00:25:08,040 Speaker 2: be in Toke. You had to do a tour duty 499 00:25:08,080 --> 00:25:10,439 Speaker 2: there and then we went a generation with nobody you couldn't, 500 00:25:10,680 --> 00:25:13,200 Speaker 2: you know, give it away. I just don't know what's 501 00:25:13,280 --> 00:25:16,040 Speaker 2: changed there. As the economy materially changed, has the government 502 00:25:16,080 --> 00:25:19,280 Speaker 2: policy change? Why are Warren Buffett and people like you 503 00:25:19,320 --> 00:25:20,080 Speaker 2: talking about Japan. 504 00:25:20,280 --> 00:25:22,440 Speaker 6: Yeah, it's a value trade basically, so I think you 505 00:25:22,560 --> 00:25:24,040 Speaker 6: have to have the discipline to stay in it for 506 00:25:24,080 --> 00:25:27,119 Speaker 6: the long haul. You know, we did see some retrenchment 507 00:25:27,160 --> 00:25:29,040 Speaker 6: in the past couple of months, but we think that's 508 00:25:29,040 --> 00:25:31,720 Speaker 6: the long term projection, is that it really makes sense 509 00:25:31,760 --> 00:25:33,280 Speaker 6: on a five year, ten yar perspective. 510 00:25:33,880 --> 00:25:35,359 Speaker 3: I would love to get your perspective on sort of 511 00:25:35,400 --> 00:25:38,440 Speaker 3: where the FED goes from here and how much the 512 00:25:38,480 --> 00:25:40,879 Speaker 3: ground changed after the beginning of this rate cut cycle 513 00:25:41,000 --> 00:25:43,800 Speaker 3: for you and clients as well. Has the perspective shifted 514 00:25:43,840 --> 00:25:45,640 Speaker 3: such that you don't have to play the parlor game 515 00:25:45,720 --> 00:25:47,679 Speaker 3: as much? This is kind of begun and going to 516 00:25:47,680 --> 00:25:50,119 Speaker 3: continue with some momentum, or how much how much focus 517 00:25:50,160 --> 00:25:52,800 Speaker 3: is the FED still taking up in your psychic space? 518 00:25:53,000 --> 00:25:53,679 Speaker 5: Yeah, sure so. 519 00:25:54,160 --> 00:25:56,800 Speaker 6: George Catchrembone, who is the head of our fixed income 520 00:25:56,840 --> 00:26:00,680 Speaker 6: business for the US. You know how some great views 521 00:26:00,720 --> 00:26:04,040 Speaker 6: on this, definitely. I think he's a common, very popular 522 00:26:04,359 --> 00:26:07,800 Speaker 6: guest on your side. What we think is that actually 523 00:26:07,880 --> 00:26:10,920 Speaker 6: gives them an opportunity for credit again, so I think 524 00:26:10,960 --> 00:26:13,480 Speaker 6: that there had been a rotation out of that where 525 00:26:13,480 --> 00:26:15,359 Speaker 6: there had been allocations, it had been more on the 526 00:26:15,400 --> 00:26:17,800 Speaker 6: IG side. But we think that high yield. We've actually 527 00:26:18,040 --> 00:26:20,440 Speaker 6: liked high yield long term, but we just haven't seen 528 00:26:20,560 --> 00:26:22,880 Speaker 6: much in terms of flows into it, and so we're 529 00:26:22,880 --> 00:26:24,240 Speaker 6: definitely thinking it makes sense. 530 00:26:24,280 --> 00:26:24,480 Speaker 2: Now. 531 00:26:25,000 --> 00:26:28,560 Speaker 6: What's really interesting short duration high yield. So shyl is 532 00:26:28,600 --> 00:26:32,360 Speaker 6: Ourtica that's yielding about eight point five percent and the 533 00:26:32,480 --> 00:26:34,639 Speaker 6: duration I think is like one point eight years something 534 00:26:34,720 --> 00:26:37,480 Speaker 6: like that. We've seen default rates come down massively, even 535 00:26:38,000 --> 00:26:40,880 Speaker 6: you know, at the triple C level, so I think 536 00:26:40,920 --> 00:26:44,240 Speaker 6: they've more than halved actually over the last four years, 537 00:26:44,600 --> 00:26:48,040 Speaker 6: so much more robust than we have sorught of it previously. 538 00:26:48,359 --> 00:26:50,359 Speaker 2: Hi Amana, thank you so much for joining us. Always 539 00:26:50,400 --> 00:26:52,200 Speaker 2: appreciate it having a particularly when you come in studio. 540 00:26:52,240 --> 00:26:55,040 Speaker 2: Mana Rebella, she's head of x Tracker Sales US on 541 00:26:55,160 --> 00:26:59,199 Speaker 2: shore for DWS Group, joining us here in studio. This 542 00:26:59,240 --> 00:27:03,479 Speaker 2: is the Bloomberks of podcast, bringing you the best in economics, geopolitics, finance, 543 00:27:03,480 --> 00:27:07,120 Speaker 2: and investment. You can also watch the show live on YouTube. 544 00:27:07,320 --> 00:27:10,000 Speaker 2: Visit the Bloomberg Podcast channel on YouTube to see the 545 00:27:10,040 --> 00:27:12,959 Speaker 2: show weekday mornings from seven to ten Eastern from our 546 00:27:12,960 --> 00:27:15,880 Speaker 2: global headquarters in New York City. 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