Speaker 1: Welcome to Bloomberg Opinion Listeners. I'm Vonnie Quinn this week.
Speaker 1: Endorsements often can be very important, but the stuff of
Speaker 1: narratives actually tends to matter more. Jonathan Bernstein on primary
Speaker 1: season and there's typically a limit to what even a
Speaker 1: vulnerable state will tolerate. Hal Brown's on whether Russia's war
Speaker 1: on Ukraine has become a proxy war between the US
Speaker 1: and its allies and Russia. Later, Clara Fererra Marquez on
Speaker 1: the strange side of the Marcos family, returning to Manila's
Speaker 1: presidential palace. First though, a conversation about the monumental shift
Speaker 1: we're seeing in markets with near Casar so near. Is
Speaker 1: this market rational? I think it is. This looks to
Speaker 1: me like a classic repricing. And what I mean by
Speaker 1: that is, I think the market is looking at the
Speaker 1: price tax on the stocks that it has had for
Speaker 1: a while, and it's just revisiting whether these prices make sense.
Speaker 1: And I think for some of these stacks, clearly these
Speaker 1: prices did not make sense. And the reason I say
Speaker 1: that is because two things. One is when you look
Speaker 1: at the declines, they're not across the board. This is
Speaker 1: largely a large company, mostly growth phenomenon. When you look
Speaker 1: at the stocks that are getting hit the hardest is
Speaker 1: generally the stocks that are more expensive on the valuation basis,
Speaker 1: and also it's separate from that also the stocks that
Speaker 1: have the least amount of profitability, So the lower quality,
Speaker 1: high valuation stocks are getting hit the most. That started
Speaker 1: about a year ago. More recently this has spread even
Speaker 1: to the high quality name So so you're seeing names
Speaker 1: like Facebook, Amazon, Netflix. These are hugely profitable companies, but
Speaker 1: also very expensive companies, and I think the market is
Speaker 1: just saying these prices are inappropriate and they need to
Speaker 1: come down. We're not seeing the same thing with companies
Speaker 1: that are cheaper. The value segment of the market has
Speaker 1: done pretty well. It's down too, but it's not down
Speaker 1: anywhere near where the growth names are. And all of
Speaker 1: this has happened in a relatively orderly fashion. There's a
Speaker 1: lot of liquidity in the market, people can buy and sell,
Speaker 1: so I think this is just a repricing. So that's
Speaker 1: where I have a little bit of trouble because there
Speaker 1: are a lot of comparisons to the dot com bubble,
Speaker 1: for example, But is that fair because it seems to
Speaker 1: me like this isn't really an emperor has no clothes
Speaker 1: scenario like it was in two thousands. Some of these companies,
Speaker 1: as you say, are very profitable. That's right, and I
Speaker 1: think the comparison is fair insofar as this is the
Speaker 1: first time that anything like this since the late nineties
Speaker 1: have happened. From there, I think it does start to
Speaker 1: break down on a number of dimensions. One is that
Speaker 1: you know, these valuations I don't think, by any objective measure,
Speaker 1: were anywhere near as expensive as the dot com pete.
Speaker 1: So from that perspective, I don't know that they're comfortable.
Speaker 1: But as you say, Vanny, the second thing is that
Speaker 1: it was a mixed bag. I mean, yes, you did
Speaker 1: have companies this time that didn't make any money that
Speaker 1: we're just trading on growth and expectations and so on.
Speaker 1: But the larger segment of that cohort, the Apples, the Microsoft,
Speaker 1: the Google, the facebooks of the world. These are hugely
Speaker 1: profitable companies. They just happen to be expensive, but they
Speaker 1: weren't going away. So I don't think you're gonna have
Speaker 1: a situation where there's going to be a wipe out.
Speaker 1: They're just gonna trade at lower multiple. So can these
Speaker 1: high growth stocks take this kind of beating and still
Speaker 1: be considered high growth. I think what remains to be
Speaker 1: seen is to what extent their financing is going to
Speaker 1: impact their growth. If some of these companies that hadn't
Speaker 1: yet gotten the profitability or some of the coronavirus lockdown
Speaker 1: sort of era of stocks, you know, these zooms of
Speaker 1: the Peltons of the world, thrown to the extent that
Speaker 1: they needed financing in order to get to their growth potential,
Speaker 1: this could be a threat to them because you know
Speaker 1: a lot of investors have basically taken their money and
Speaker 1: gone home. For the bigger companies that are already established,
Speaker 1: it's hard to see how revaluing them is going to
Speaker 1: have any impact on her growth. I think ultimately what's
Speaker 1: going to be harder for them is that this is
Speaker 1: what investors are telling these companies that we just no
Speaker 1: longer believe that you Amazon, you Facebook, or whoever can
Speaker 1: grow at the growth that they put up during the
Speaker 1: two thousand tents and in the last decade, and so
Speaker 1: you know, that's lower growth necessary really means that they
Speaker 1: deserve lower multiple. It's so interesting because it feels like
Speaker 1: we've been waiting for this for many years. I mean,
Speaker 1: it's been a thirteen year bullmarket one at the very least,
Speaker 1: if not more than that. And you have to wonder
Speaker 1: if it is just because of the FED turning, or
Speaker 1: if this was just a moment waiting to happen and
Speaker 1: it's a convenient moment now. It's interesting to think about
Speaker 1: the timing of it. I've been thinking about what we
Speaker 1: can attribute this to, and I think ultimately the honest
Speaker 1: answer is, we just don't know why these things happen
Speaker 1: when they when they happen. This could have happened any
Speaker 1: time in the last three or four years, if I'm
Speaker 1: being generous. But I think my my best guest as
Speaker 1: to wife's happening now is that is simply when when
Speaker 1: clouds gather, I think investors pay more attention to price
Speaker 1: and profits, and they don't when they're bullish. And I
Speaker 1: think right now, there's just a lot of things to
Speaker 1: worry about, and that's what they appear to be doing. Now.
Speaker 1: At what point will these market declines impact the Fed's
Speaker 1: decision making In the sense that multiples are coming in
Speaker 1: that's probably a healthy thing to some degree, But does
Speaker 1: there come a point which this off market drop is
Speaker 1: one factor that the FED takes more seriously. I don't
Speaker 1: think so. Um. Well, in a couple of ways. One is,
Speaker 1: I think we we often analogize this moment to previous
Speaker 1: moments when the FED is stepped in dot com, financial crisis, pandemic, um.
Speaker 1: But the difference between now and those moments is in
Speaker 1: those moments, they didn't have to tackle inflation. Now that
Speaker 1: they're sitting on an inflation rate that's that's you know,
Speaker 1: that's the highest that spin in four decades, going back
Speaker 1: to the scary late nineteen seventies early nineteen eighties. Um,
Speaker 1: they don't really have a choice, I don't think, and
Speaker 1: I think I believe them when they say that they're
Speaker 1: taking this very seriously and they're going to get this
Speaker 1: inflation down. And I think what that basically means is
Speaker 1: that the FED put is off the table. Investors don't
Speaker 1: look to us for help. If you want to overpay
Speaker 1: for companies, you're gonna have to take the repricing, which
Speaker 1: is what they're doing now. So I don't think that
Speaker 1: the FED is going to come to their rescue. So
Speaker 1: near do we have? Economy hasn't quite marrid the bittle
Speaker 1: markets over the last decade, and that's an understatement. But
Speaker 1: now do the capital markets help engender a recession? Does
Speaker 1: it become the case that the capital markets do mirror
Speaker 1: the real economy eventually? Well, you know, it's interesting to
Speaker 1: think about because you know, just as there was a
Speaker 1: bifurcation between the market and economy during the darkest days
Speaker 1: of the pandemic, it looks like it's going the other
Speaker 1: way now. So, if anything, I think you might continue
Speaker 1: to have a bifurcation between the economy and the market,
Speaker 1: but in the opposite direction. I think people might wonder
Speaker 1: why the market doing so poorly if the economy is
Speaker 1: still relatively healthy, And I think the answer is that
Speaker 1: they just don't track each other very well, and that
Speaker 1: you should never look to the market as a proxy
Speaker 1: for what the economy is doing. Near case are there,
Speaker 1: don't forget listeners, do get in touch via Twitter at
Speaker 1: Vonney Quinn or email v Quinn at Bloomberg dot net.
Speaker 1: Opinions and commons always welcome. We have incrementally more data
Speaker 1: now on primary voting behavior following Nebraska and West Virginia
Speaker 1: this week, and the Pennsylvania primary, among other takes place Tuesday.
Speaker 1: We're joined by Jonathan Bernstein, What did we learn from
Speaker 1: the primaries this week in terms of what a Trump
Speaker 1: endorsement means? Jonathan, Well, after Trump got off to a
Speaker 1: good start in May in Ohio and the Senate campaign there,
Speaker 1: he had a mixed record. This Tuesday. In West Virginia,
Speaker 1: there were two incumbent members of the House running against
Speaker 1: each other because of reapportion in West Virginia lost the
Speaker 1: seat and so that tossed two of their Republican members
Speaker 1: of the House against each other, and the one that
Speaker 1: Trump endorsed one pretty comfortably. On the other hand, in
Speaker 1: Nebraska and the gubernatorial race there, Trump's candidate lost by
Speaker 1: several percentage points exactly. Now, the thing is that you
Speaker 1: can do sort of the win loss ratio, you know,
Speaker 1: but it's complicated, right. We don't know how the candidate
Speaker 1: would have done if there was no Trump at all. Um.
Speaker 1: This was a candidate who was a very strong Trump
Speaker 1: supporter for Trump's entire political career, but also had been
Speaker 1: accused credibly of groping several women. Um. So you know,
Speaker 1: if he has no Trump endorsement, does he does he
Speaker 1: campaign at all? Does he do better? Um? Does he
Speaker 1: do worse? You know? What what. It's very hard when
Speaker 1: political scientists study primary campaigns. It's extremely difficult to figure
Speaker 1: out some sort of baseline because you can't judge how
Speaker 1: much any particular factor influence the outcome if you can't
Speaker 1: come up with the baseline, if that hadn't happened then.
Speaker 1: And the other thing about Nebraska is that the Republican
Speaker 1: establishment there one, so their endorsement was not Trump's endorsement,
Speaker 1: and so you have to wonder, what about statewide Republican
Speaker 1: go op institutions? Yeah, And you know, the thing is
Speaker 1: that it's not that these are moderate Republicans who won
Speaker 1: that race, just like Ohio, you know, we had JD. Vance,
Speaker 1: Trump's candidate one, but the radical candidates who were seeking
Speaker 1: Trump's endorsement trying to imitate Trump, took about sixty of
Speaker 1: the vote. Who you classify how And so you know,
Speaker 1: on the one hand, it's not as if Trump snaps
Speaker 1: his fingers and all the Republican voters say, oh, that's
Speaker 1: what we want. But on the other hand, it's a
Speaker 1: very radical party. Whether you attribute that to Trump, which
Speaker 1: is true in part, or say this is something that
Speaker 1: precedes Trump and only got sort of more so as
Speaker 1: a result of him, but also has a lot to
Speaker 1: do with Republican align media. Well, you know, it's complicated,
Speaker 1: it is, and that brings us right back to Pennsylvania
Speaker 1: where it's becoming really interesting. In the last week of
Speaker 1: the race, it had been a race between Dr Oz
Speaker 1: and former Bridgewater CEO David McCormack, who obviously was spending
Speaker 1: a fortune a version of his own as well, emulating
Speaker 1: the then Young Can playbook. But suddenly we have Cathy
Speaker 1: Barnett getting two endorsements, one from the Club for Growth
Speaker 1: and one from the Susan Bianthony Elis Candidate Fund pack.
Speaker 1: She would be the first Republican black woman elected to
Speaker 1: the US and she is on message right now when
Speaker 1: it comes to the dominant issue, which is abortion. What happens, Jonathan, Well,
Speaker 1: you know, one of the things that it tells you
Speaker 1: is that in these multi candidate primaries they can be
Speaker 1: very unstable. So you have here a situation where two
Speaker 1: candidates Trump backing Doctor Oz, the TV celebrity doctor. We're
Speaker 1: going at each other with a lot of money on TV,
Speaker 1: attacking each other, and so a third candidate appears to
Speaker 1: have benefited. Now we don't know how it's going to
Speaker 1: turn out. The latest polls seem to show pretty close
Speaker 1: to a three way tie. But we've seen that happen
Speaker 1: before in elections, where two candidates who have tons of
Speaker 1: money attack each other at the third candidate benefits. In
Speaker 1: this case, those endorsements came out after she had already
Speaker 1: moved up in the polls, spending very very little money
Speaker 1: of her own or anybody on her behalf, while tons
Speaker 1: of money is coming in for the other two candidates.
Speaker 1: And then we should just point out that on the
Speaker 1: Democratic side of things, it's gotten a little clearer. John
Speaker 1: Fetterman seems to be the shorefire when even though he
Speaker 1: has his own problematic past pointing a shotgun and an
Speaker 1: unarmed black jogger back into but he seems to be
Speaker 1: the candidate that they've chosen that has the best against Republicans.
Speaker 1: That seems to be the case according to all the
Speaker 1: polling right now. That Venoman who's the lieutenant governor of
Speaker 1: the state. So he had run for Senate when he
Speaker 1: was a small town mediumtown mayor six years ago and
Speaker 1: got nowhere. The party was not interested in him. But
Speaker 1: once he proved himself as a statewide winner, the Lieutenant
Speaker 1: governor that gave him the statewide publicity and contacts and
Speaker 1: party support to apparently pull away from the other two candidates. Jonathan,
Speaker 1: what does that say about Joe Manin's position in terms
Speaker 1: of legislation? Is the candidate that he endorsed lost in
Speaker 1: West Virginia. Should the Democrats hed this as a lesson somehow?
Speaker 1: I don't think. I mean, yeah, I don't think it
Speaker 1: really tells us anything. Mansion's position is strong in the
Speaker 1: Senate because he's the fiftieth vote um and it doesn't matter.
Speaker 1: What we know about Mansion is that Democrats can't primary him,
Speaker 1: they have very little overage over him, and I don't
Speaker 1: that it really matters how popular he is in Less Virginia.
Speaker 1: What really matters is that no Democrat other than Joe
Speaker 1: Manchin has any chance of holding that seat in the future,
Speaker 1: and so Democrats basically have to accept he is who
Speaker 1: he is. They get a lot of votes out of
Speaker 1: him on things like judges and Executive branch confirmation, and
Speaker 1: on some legislative issues, and the ones that they don't get,
Speaker 1: there's really no other place for them to go. I
Speaker 1: have a question about the narrative at the moment, as
Speaker 1: well as obviously and for obvious reasons, started to center
Speaker 1: around abortion and women's rights. Is that what sways primaries,
Speaker 1: You know it can. Primaries are not general elections. What
Speaker 1: often matters in primaries is how candidates differentiate from each other.
Speaker 1: If you're a primary voter, you're a little bit involved
Speaker 1: because many people don't vote in primaries at all, So
Speaker 1: you're paying some attention, but you probably don't know a
Speaker 1: huge amount about these candidates, especially in places where there's five, six,
Speaker 1: seven candidates on the ballot, which is the case in
Speaker 1: many of these places, and so you're looking for something,
Speaker 1: somebody that stands out for some reason. That's why endorsements
Speaker 1: often can be very important. Money spent is far more
Speaker 1: important in primary elections than general elections, but the stuff
Speaker 1: of narratives actually tends to matter more. So, you know,
Speaker 1: the idea that these two candidates in Pennsylvania and the
Speaker 1: Senate campaign are bashing each other, that's something that Republicans
Speaker 1: were paying attention probably notice. Whereas in a general election,
Speaker 1: you're eventually going to find your party most of the time.
Speaker 1: But since there's no sort of place that you start
Speaker 1: from in a primary campaign, if you're a voter. You're
Speaker 1: looking for some reason to vote for a candidate, and
Speaker 1: therefore issues endorsements, money, a good ads, stuff like that
Speaker 1: really can make more of a difference than it would
Speaker 1: in a general election. Are you watching anything else come Tuesday, Jonathan,
Speaker 1: or is it really just Pennsylvania? The Idaho juvenatorial which
Speaker 1: Trump endorsed the lieutenant governor who's going to lose to
Speaker 1: the incumbent governor apparently, which didn't seem like the kind
Speaker 1: of endorsement to make if you're trying to maximize your
Speaker 1: reputation for influencing daughters. But I'm not that that's very
Speaker 1: hard to know whether Trump is rational about stuff. Say,
Speaker 1: I'm not sure that that's the calculation that's being made here. Yeah,
Speaker 1: he tends to be impulsive, and it's very hard to
Speaker 1: figure out, well exactly it could be says somebody knew
Speaker 1: how to flatter him, or he saw somebody on Fox
Speaker 1: News in the right moment and that's why he made this.
Speaker 1: Jonathan Bernstein, There, don't forget to reach out with thoughts, suggestions, opinions.
Speaker 1: I'm at Bonnie Quinn on Twitter or email v Quinn
Speaker 1: at Bloomberg dot net. We're also available as a podcast.
Speaker 1: Just look us up on Apple or Spotify. Russia's war
Speaker 1: on Ukraine grinds on, prompting new questions, including whether the
Speaker 1: war is turning into a proxy war between the US
Speaker 1: and its allies and Russia. Let's get straight to hal
Speaker 1: Brand's columnist and also professor of global affairs at Johns
Speaker 1: Hopkins University. So, how at what point does an intervention
Speaker 1: or aid or whatever you would have called this, at
Speaker 1: what point does it turn into a proxy war? Proxy
Speaker 1: war is an invention where most of the fighting and
Speaker 1: frankly the dying is done by a third party. And
Speaker 1: so if the United States were to use Ukrainian forces
Speaker 1: to inflict damage on the Russian military, for instance, without
Speaker 1: directly fighting Russian military itself, that would be an example
Speaker 1: of a proxy war. Was this a proxy war? From
Speaker 1: the beginning? I think the initial idea was to try
Speaker 1: to help Ukraine maintain as much of its sovereignty and
Speaker 1: independence as possible. What became clear, though, was that the
Speaker 1: Ukrainian resistance was very acceptive, that the Russian military was
Speaker 1: vulnerable and over extended, and that the United States and
Speaker 1: allies US had a chance to inflict a pretty severe
Speaker 1: cost on the Russians simply by helping the Ukrainians fight better.
Speaker 1: And I think that's really the genesis of the situation
Speaker 1: where we are today, where the Pentagon, it's essentially acknowledged
Speaker 1: that what we're doing is trying to use the Ukraine
Speaker 1: War to weaken Russia's capabilities over time. Right, And so
Speaker 1: you wrote inspiracy of silence is necessary for any kind
Speaker 1: of proxy war. But the U S isn't being particularly
Speaker 1: silent about this war. Does that make it more ethical?
Speaker 1: Let's say, I don't know that it's a question of ethics.
Speaker 1: I think it's a it's a question of prudence. And
Speaker 1: so the reason it's important to stay quiet about a
Speaker 1: proxy war is that there's typically a limit to what
Speaker 1: even a vulnerable state will tolerate, and they're more likely
Speaker 1: to tolerate having a proxy war waged against them if
Speaker 1: their face isn't being rubbed in it by the other side.
Speaker 1: And I think this is why it's damaging to have
Speaker 1: leaks about the role that U S Intelligence may or
Speaker 1: may not be playing in certain Ukrainian military operations, because
Speaker 1: it makes the fact of the U S proxy war
Speaker 1: in Ukraine harder to ignore, and it potentially ratchets up
Speaker 1: the humiliation Plutin may feel if the damage he's suffering there.
Speaker 1: We can look to examples from the past that have
Speaker 1: been obvious proxy war is this is, I think, a
Speaker 1: different kind of proxy war. It certainly didn't start out,
Speaker 1: as you said, as a proxy war. It's just because
Speaker 1: one over time, and that's a little bit the problem
Speaker 1: that motivation can change over time. So what's the escalation
Speaker 1: from here, Well, we don't know yet. There are Russian
Speaker 1: escalation options, and so if Putin really wanted to try
Speaker 1: to put a stop to NATO countries arming and responding Ukraine,
Speaker 1: he could, for instance, target those countries and militarily he
Speaker 1: could try to ramp up the effort to interdict supplies
Speaker 1: coming into Ukraine across its land borders. He could do
Speaker 1: even something more drastic. He could use chemical weapons or
Speaker 1: battlefield nuclear weapons, try to turn the conflict in his favor,
Speaker 1: resolve it on his terms. You know, we don't know
Speaker 1: whether people do so or not. I think the situation
Speaker 1: could become more dangerous though, if he realizes that Russian
Speaker 1: forces are on the verge of losing in Ukraine and
Speaker 1: worries that I will defeat in Ukraine could potentially spell
Speaker 1: the end of his regime. How is the average American
Speaker 1: citizens supposed to feel about this proxy war? I mean,
Speaker 1: on the one hand, there's a lot of support for it.
Speaker 1: Give us some kind of matrix for how we should
Speaker 1: weigh the war. Americans seem to be pretty happy with
Speaker 1: the way that the war is going, which is not
Speaker 1: to say, of course, that they approve of the destruction
Speaker 1: of Ukraine. But the US military and economic aid Ukraine
Speaker 1: is popular on a bipartisan basis, both in Congress and
Speaker 1: in the population, which indicates to me he's that Americans
Speaker 1: see Russia as a military and geopolitical threat. They don't
Speaker 1: like the fact that a big, aggressive autoxicy is beating
Speaker 1: up on a smaller democracy next door, and so they
Speaker 1: favor giving Ukraine the help it needs to defend itself.
Speaker 1: Whether they see it as a proxy war simply a
Speaker 1: case of defending a vulnerable democracy or helping that democracy
Speaker 1: to spend itself, I can't really say, but the overall
Speaker 1: policy has quite a great deal of approval. How what's
Speaker 1: the danger that Putin turns elsewhere next? I mean, he
Speaker 1: obviously has puppet regimes in several former Soviet territories and states.
Speaker 1: But at some point he could try something new and
Speaker 1: pick a new former Soviet state to invade. Does the
Speaker 1: US then get involved there wouldn't have a handful at
Speaker 1: the moment. He may want to stir up trouble in
Speaker 1: Moldova or take a poke at the Baltic States or
Speaker 1: something like that, but it's going to be pretty difficult
Speaker 1: as long as his army is so fully committed and
Speaker 1: it's staring so poorly in Ukraine. And so I think
Speaker 1: the danger is less one that Putin decides to launch
Speaker 1: another war elsewhere than this war escalates, perhaps in dangerous ways.
Speaker 1: And so that's the scenario that I would worry more about.
Speaker 1: And then I guess, you know, final question that needs
Speaker 1: to be examined, as our proxy war is successful. How
Speaker 1: has the US waged a successful proxy war in the past.
Speaker 1: Some of them succeeds, some of them fail. It really
Speaker 1: depends on the setting. The United States failed utterly to
Speaker 1: overthrow Fidel Castro's regime via proxy invasion at the Bay
Speaker 1: of Pigs in nineteen sixty one, it succeeded beyond its
Speaker 1: wildest expectations and helping the Afghan Jahadem pushed the Soviets
Speaker 1: out of Afghanistan in the nineteen eighties. There's no hard
Speaker 1: and fast rule that says the UH some fail and
Speaker 1: some succeeds. It typically depends on the strength of the
Speaker 1: forces involved, their level of commitment, how well supported they are,
Speaker 1: and so there's a lot of contingency and these sorts
Speaker 1: of things. We leave those questions there for now, our
Speaker 1: thanks to hal Brand's. By the way, do get in touch.
Speaker 1: Comments and opinions are always welcome. Find me at Vonnie
Speaker 1: Quinn on Twitter or email v Quinn at Bloomberg dot net.
Speaker 1: We're also available as a podcast. Find us on Apple
Speaker 1: or Spotify. Now to the Philippines. Thirty six years after
Speaker 1: Dictator Ferdinand Marcos fled to Hawaii a mad a People's Revolution,
Speaker 1: his son was elected president of the nearly one ten
Speaker 1: million people strong Philippines with nearly sixty percent of the vote.
Speaker 1: Happy to have Clara Ferreira Marquez join us now from Singapore,
Speaker 1: quite the extraordinary turn of events, Clara explained to us
Speaker 1: the context for this election. The selection is coming at
Speaker 1: the end of the really Loan campaigned by the Marcus
Speaker 1: family to reinstate the name, to rehabilitate the name and
Speaker 1: to put a Marcos back in the malcan in the
Speaker 1: presidential palace. And it's been an extraordinary success. The ingredients
Speaker 1: of it have been, to a large extent, nostalgia social media,
Speaker 1: the fact that for many Filipinos the fruits of democracy
Speaker 1: have not really filtered down. You know, for many of them,
Speaker 1: it's really the same families and powered the same other gopolise,
Speaker 1: the same economic troubles. And also the fact that this
Speaker 1: is every young electorate. Remember about half the electorate is
Speaker 1: under forty. So it's been the combination that has allowed
Speaker 1: Ferdinand Marcos Jr. Known as Bong Bongs, to be elected
Speaker 1: in the Landslide. And it is quite extraordinary. His mother,
Speaker 1: Emelda Marcos, the person that was known around the world
Speaker 1: for her wardrobe, in particularly her shoes, obviously voted initialal
Speaker 1: suit and carrying a rosary beads? Is this another example
Speaker 1: of a populist candidate getting into office, not just another
Speaker 1: populist I mean it's very unusual to see not unusual
Speaker 1: to see dictator's sons come back, but it is unusual
Speaker 1: to see them come back after a hiatus of this. London,
Speaker 1: in particular, after a period of democracy problematic perhaps would
Speaker 1: certainly democracy. It's extraordinary how fast they've done it. So
Speaker 1: that and Marcus father died, they returned very shortly after
Speaker 1: his death, and Marcus Jr. Was elected to Congress a
Speaker 1: couple of years afterwards, and since then a number of
Speaker 1: people in the family, including his sister and the Northern
Speaker 1: Marcus herself, and they've since worked to really gloss over
Speaker 1: some of the more problematic aspects of the regime, So
Speaker 1: the killing and torturing of thousands of opponents, and of
Speaker 1: course the plundering of states, so ten billion dollars and
Speaker 1: much of it still missing today. Really, the human rights
Speaker 1: abuses were phenomenal, but it continued after Marcus was out
Speaker 1: of office and had flown to Hawaii. Most recently, President
Speaker 1: of Tourday has had some controversial practices. Amnesty actually says
Speaker 1: that his war on drugs was, and I'm quoting here,
Speaker 1: a systematic killing of the urban poor and a large
Speaker 1: scale murdering enterprise. And it appears now that since his
Speaker 1: daughter is vice president, the two dynasties have come together
Speaker 1: and there won't be any reckoning for any crimes or
Speaker 1: potential crimes that have happened in the Philippines history. So
Speaker 1: Dutte has certainly had a lot of excessive and is
Speaker 1: well known for his inflammatory comments that his his period,
Speaker 1: that the president's being his period as mayor of Devout
Speaker 1: with nowhere near the brutality of the Marcus regime of course,
Speaker 1: but he hoses, he say, enabled it, and I think
Speaker 1: he's enabled it, not only through the tactics he's used
Speaker 1: in actually devastating drug war which had bring little impact
Speaker 1: on drugs and plenty of impact on extra judicial killing,
Speaker 1: but he has, for example, legitimized talk of martial law,
Speaker 1: something which for the Philippines brings back horrific memories of
Speaker 1: the late Marcus period. And I would also just distinguished
Speaker 1: Dutete from his daughter, so has not formerly either bang
Speaker 1: Bang Marcus or his daughter, who is in fact one
Speaker 1: by an even higher margin than Christ himself. But the
Speaker 1: Vice president is related separately in the Philippines that she
Speaker 1: has her own Pwiday and she is trying to be
Speaker 1: a different person to her father. We have successful she
Speaker 1: will be, of course, it's a different question entirely. Let's
Speaker 1: get the policy because in fact, Fernland Margot's Jr. Didn't
Speaker 1: really campaign. Do we know what his platform will be,
Speaker 1: given that he has governed before, he was a congressman
Speaker 1: and a governor. In fact, well, I mean that the
Speaker 1: actual absence of policies is sort of a screaming omission
Speaker 1: here and um as congressman, you know, to his time
Speaker 1: in office, he has really done by little. He has
Speaker 1: an absolutely negligible allegedative record, and his campaign, as you say,
Speaker 1: was marked again by the absence of policy. Talked about
Speaker 1: the motherhood and apple pie issues that he talked about
Speaker 1: national unity. Things are pretty difficult to disagree with. I mean,
Speaker 1: he's going to disagree with the idea that you need
Speaker 1: national unity. His social media seeds are really interesting because
Speaker 1: again complete absence of policy, but lots and lots of
Speaker 1: black and white footage of the their them in Ferdinand
Speaker 1: marcos reminiscence of childhood, really trying to sort of create
Speaker 1: a nostalgia of rose tinted view of the past, and
Speaker 1: a lot of Philippinos don't remember it. Philipino history is
Speaker 1: not mandatory even in high school, so you know, it's
Speaker 1: very easy given as well the grip that social media
Speaker 1: has in the Philippines, it's very easy to spread a
Speaker 1: biased narrative that programs has a new tube beep, but
Speaker 1: a sort of glossily produced peculates all this sub glammar
Speaker 1: of the mail Democrats. She was very beautiful, so it's
Speaker 1: sort of nineteen sixties glamor Democrats and the mixes, the
Speaker 1: markets and the rabans. It's all like you're really appeal it.
Speaker 1: There was a very interesting dynamic between the United States
Speaker 1: and the Philippines for a long time, but much time
Speaker 1: again has passed. What will the dynamic be now between
Speaker 1: the US and the Philippines, particularly regarding the South China
Speaker 1: Sea with China's having military presence there. Again, we don't
Speaker 1: know a lot about certain markets juniors policy here, so
Speaker 1: Bo Bong hasn't provided a huge machite. So we do
Speaker 1: expect would be more friendly towards China than a Lenny,
Speaker 1: but brother it would have been a lot more pro
Speaker 1: us so she was his main opponent in the presidential way.
Speaker 1: But probably he will be less pro China or less
Speaker 1: sort of aggressively pro China than Deterredy. I think he
Speaker 1: will be much more pragmatic. There is a need for
Speaker 1: investment and need for infrastructure that will require China, and
Speaker 1: he will probably amper very a lot of the issues
Speaker 1: that have been so controversial, but it's just really striking
Speaker 1: how absent policy is being, even an economic policy. For example, remember,
Speaker 1: the Philippines is coming out for an absolutely brutal pandemic
Speaker 1: just had awful effects on human capital and indeed employment
Speaker 1: well and inflation, although it's not quite as high as
Speaker 1: some other countries in Asia or Southeast Asia. And also
Speaker 1: we have policymakers saying that GDV needs to grow at
Speaker 1: least six percent for the next five to six years
Speaker 1: just to help impare the debt and took on to
Speaker 1: fight COVID nineteen. Now it did take on debt to
Speaker 1: fight covid idina. I suppose that is a little bit
Speaker 1: of a consolation. But at the same time, the Central
Speaker 1: Bank does have questions, and there's going to be a
Speaker 1: new central Bank governor as well. The previous governor's term expires,
Speaker 1: So yes that the Centril Bank governer very well regarded
Speaker 1: these next year I mean in terms of lots of
Speaker 1: those things, we do expect there could be some continuity
Speaker 1: with the presidency and Detti, for all his bluster, actually
Speaker 1: had quite competent and technocratic economic management. We pushed through
Speaker 1: some pre important reforms in terms of foreign ownership, phitical
Speaker 1: reforms to make the Philippines a lot more competitive with
Speaker 1: its neighbors. I think the keeping about the numbers and
Speaker 1: the Philippines is that they look very good on paper.
Speaker 1: It all looks very high. Philippines is one of the
Speaker 1: fastest growing economies in Asia. The reality is that just
Speaker 1: hasn't translated into a genuinely competitive economy and economy that
Speaker 1: attracts sufficient investment. Member because it's a huge market, it
Speaker 1: should be bringing in a lot more, and it's unclear
Speaker 1: that without a very sort of forceful vision, indeed a
Speaker 1: competent vision, that the Marcus presidency can do that. In
Speaker 1: terms of markets overseas, investors did sell start, but the
Speaker 1: Philippinas all gained what our investors liking about Marcos Jr.
Speaker 1: That helped strengthen the pacer or was it for other reasons?
Speaker 1: Do you think there was some hope perhaps that he
Speaker 1: will bring in or at least continue some of the
Speaker 1: reforms that were in disficult terms, for example, from the
Speaker 1: infrastructure investencies set and talked about logistics very vague terms.
Speaker 1: But all the same people may be hoping for some
Speaker 1: continuity there. I mean, there is very little to hang onto.
Speaker 1: I have to say in the commentary that I've read, Clara,
Speaker 1: it does seem to be the poster child for troll
Speaker 1: farm elections due to Day's victory back in credited in
Speaker 1: part at least two disinformation spread by troll farms. Did
Speaker 1: that happen this time or was it a genuine victory
Speaker 1: on the part of Monglong or Marcus Jr. It's a
Speaker 1: genuine run slide victory. But I think it was really
Speaker 1: important to look at the role of disintillation here and
Speaker 1: that what we can learn from the Philippines and software.
Speaker 1: So one of the things that's really notable about the
Speaker 1: Philippines obviously extensive social media use and not just the
Speaker 1: extensive social media usually expensive use of influence, so so
Speaker 1: people who guide the opinion of others, and we know
Speaker 1: from surveys the Filipinos are much more likely to follow
Speaker 1: that and to use that to guide, for example, plitical
Speaker 1: opinions than other countries. It makes those so powerful by
Speaker 1: young electorates and a lot of time on social media,
Speaker 1: one of the highest usage RAITs I think globally. And
Speaker 1: then it was the very clever use of social media
Speaker 1: by the Markets campaign. So of course the many of
Speaker 1: are Bread campaign awesome youth social media, but they were
Speaker 1: I think a little bit less nimble and the Markets campaign,
Speaker 1: on the other hand, was absolutely clear about the message
Speaker 1: they were going to put across nostalgia black and white
Speaker 1: footage pictures of Bong Bong walking through fields with Sarah
Speaker 1: Why said to say, with these very bland soogans about
Speaker 1: together we rise again. I mean, that's very, very effective
Speaker 1: when you're dealing with a young electorate. Also, there's absolutely
Speaker 1: nothing in place by the government to bite disinformation, and
Speaker 1: that's quite different to places like Brazil again and a big,
Speaker 1: big issues that a lot of government efforts have been
Speaker 1: put in place. As you say, Clara, it's that strange
Speaker 1: combination you don't see too often of a very healthy
Speaker 1: electorate in terms of turnout or interest in the election,
Speaker 1: but not so much perhaps interest in the substance or
Speaker 1: the platforms of the candidates. It's a performance like people
Speaker 1: who love the election because the zero policy and it's
Speaker 1: all personalities. It's all about the pas, celebrities and culpial.
Speaker 1: Official media is full of everyone going to vote, all
Speaker 1: the celebrities showing that because they sort of market your finger,
Speaker 1: but like in India they mark your nail yes, and
Speaker 1: to people sort of showing off the finger and it's
Speaker 1: a performance. I mean, what concerns me is a completely
Speaker 1: absolute policy of any sort, so it's really shocking. Clara
Speaker 1: Ferreira Marquez, we are now choosing to end all conversations
Speaker 1: not with you, though, as always we love to hear
Speaker 1: from you at Vonnie Quinn on Twitter, or send your
Speaker 1: thoughts to v Quinn at Bloomberg dot net. And by
Speaker 1: the way, Bloomberg Opinion was Vonny Quinn is available as
Speaker 1: a podcast on Apple or Spotify or produced by Eric
Speaker 1: mollow Till next Time on Bloomberg Opinion. Adopt us Kids
Speaker 1: presents what do you expect when you're expecting a teenager?
Speaker 1: Learning the lingo Goat g O, a t acronym stands
Speaker 1: for greatest of all time, as in spaghetti sandwiches for dinner.
Speaker 1: They're my faith, Dad, You're the goat. You don't have
Speaker 1: to speak teen to be a perfect parent. Thousands of
Speaker 1: teens in foster care will love you just the same.
Speaker 1: Visit adopt us Kids dot Org. Brought to you by
Speaker 1: the U S Department of Health and Human Services, adopt
Speaker 1: us kids in the ad Council