WEBVTT - Surveillance: Near-Term Risks With Doll 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along 0:00:09.240 --> 0:00:13.080 with Jonathan Ferrell and Lisa Brownwitz Jay Ley. We bring 0:00:13.119 --> 0:00:17.159 you insight from the best and economics, finance, investment, and 0:00:17.280 --> 0:00:23.280 international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg 0:00:23.360 --> 0:00:29.280 dot Com, and of course, on the Bloomberg Terminent. We 0:00:29.480 --> 0:00:32.120 don't join us now across my global investment seat, I 0:00:32.440 --> 0:00:35.960 bought let's start here. What time horizon do you have 0:00:36.000 --> 0:00:39.080 in mind that you can remain constructive on? Six months? 0:00:39.120 --> 0:00:41.960 Twelve months? What is it, Bob? Yeah, it is literally 0:00:42.040 --> 0:00:43.880 six to twelve. I think the New York term is 0:00:43.920 --> 0:00:47.960 a little more treacherous. But we don't have the signs 0:00:48.000 --> 0:00:51.280 of recession. Unless we have a recession, it's hard to 0:00:51.320 --> 0:00:53.280 see a big down move in the market. So I 0:00:53.280 --> 0:00:56.680 think we're gonna tread water with a lot of volatility 0:00:56.680 --> 0:00:59.360 in both directions as we sort out what used to 0:00:59.400 --> 0:01:03.120 be a pattern that was almost all positive. Now it's 0:01:03.240 --> 0:01:06.920 just a bit more mixed. For example, inflation is not 0:01:07.200 --> 0:01:11.080 all transitory. I hope everybody finally gets ahold of that one. Yeah, 0:01:11.080 --> 0:01:12.640 but I love what you have in your note, uh, 0:01:12.959 --> 0:01:18.679 Bob doll and that as you talk about technology related disinflation, 0:01:18.959 --> 0:01:23.080 the advantage we've had from technology, are you suggesting that's over? 0:01:24.280 --> 0:01:26.800 Not at all, Tom, I think that will remain a 0:01:26.840 --> 0:01:31.000 powerful force to keep inflation from getting really out of hand. 0:01:31.000 --> 0:01:34.640 But when you look at wage rates, that's the most 0:01:34.680 --> 0:01:38.760 insidious hard to get out of the picture inflation, and 0:01:38.840 --> 0:01:42.480 it's very prevalent now that on top of just go 0:01:42.680 --> 0:01:46.240 shopping and you see what the story is exacerbated by 0:01:46.280 --> 0:01:48.960 the supply shortage you folks coverage just a minute ago. 0:01:49.160 --> 0:01:51.560 So how important, Bob, is the jobs report that we're 0:01:51.600 --> 0:01:55.240 gonna get on Friday to you? I think it's very important. 0:01:55.400 --> 0:02:00.000 The Fed seems almost unilaterally focused on the jobs from 0:02:00.000 --> 0:02:03.560 on and kind of pushing inflation to the side, not 0:02:03.680 --> 0:02:06.960 worrying about it. I think at some point, as the 0:02:07.040 --> 0:02:11.560 employment numbers continue to improve, inflation will come front and 0:02:11.600 --> 0:02:14.320 center for their fight. All right, So the idea of 0:02:14.520 --> 0:02:16.960 the job's report, would you say that it's more important 0:02:16.960 --> 0:02:18.600 than earnings because a lot of people are saying that 0:02:18.680 --> 0:02:21.200 almost matters less than earnings at a time when the 0:02:21.240 --> 0:02:23.000 big question mark is not the Fed, which is said 0:02:23.000 --> 0:02:25.680 it's very devish, but rather margin pressures and how much 0:02:25.720 --> 0:02:29.560 they're exacerbated by the supply chain disruptions. YEA. For the economy, 0:02:29.639 --> 0:02:32.800 employment is all important, but for for the markets, it's 0:02:32.840 --> 0:02:35.799 absolutely about earnings. And as you as you talked about earlier, 0:02:36.000 --> 0:02:38.680 there are a lot of question marks about third quarter earnings. 0:02:39.000 --> 0:02:43.240 For sure, we're getting a deceleration from the unsustainable record 0:02:43.360 --> 0:02:47.440 second quarter. The question is will companies be able to 0:02:47.520 --> 0:02:51.640 sell what's the supply shortage going to mean, how they're 0:02:51.680 --> 0:02:54.240 dealing with price pressures. I mean, even in the second 0:02:54.280 --> 0:02:57.240 quarter reports you saw a big increase in the number 0:02:57.280 --> 0:03:00.880 of companies commenting on the pricing up problems that they're 0:03:00.919 --> 0:03:04.920 having raw materials, etcetera. So lots across currents here. My 0:03:05.000 --> 0:03:09.600 guess is the earning season will be more mixed. So, Bob, 0:03:09.639 --> 0:03:12.520 going forward, what is your expectation in terms of what 0:03:12.600 --> 0:03:14.880 you will change in your portfolio? Because right now you 0:03:14.919 --> 0:03:17.320 are bullish on stocks considering the fact that we're not 0:03:17.320 --> 0:03:20.720 going to get a recession. However, is there some scenario 0:03:20.840 --> 0:03:25.920 that you see as potentially likely that could change that view? So, so, 0:03:26.200 --> 0:03:31.480 the mainline story is that cyclicals and value are cheap 0:03:31.680 --> 0:03:37.520 and have some tailwind relative to growth and momentum, and 0:03:37.640 --> 0:03:41.560 high p e stocks and if inflation interest rates creep higher, 0:03:42.040 --> 0:03:44.400 you know what part of the market struggles with that. 0:03:44.400 --> 0:03:47.440 That's the high high pet side. What we get in 0:03:47.440 --> 0:03:50.280 the way of that is we saw problems that the 0:03:50.280 --> 0:03:55.160 economy was slowing more than people thought that there's unbelievable 0:03:55.440 --> 0:03:59.520 pedal to the metal. Both monetary and fiscal policies is 0:03:59.600 --> 0:04:02.520 not having the effect that's been having. I think that 0:04:02.600 --> 0:04:05.000 will continue to carry the day, Bob. I would guess 0:04:05.120 --> 0:04:11.600 you have seen four times o MG margin contraction, margin pressures. 0:04:11.920 --> 0:04:14.880 We're all gonna die at the sort of the income statement. 0:04:15.320 --> 0:04:17.480 How do you respond to that if you're an investor? 0:04:18.600 --> 0:04:21.839 So so, I think that those margin issues are for 0:04:21.920 --> 0:04:25.359 real toend to be paid attention to, particularly light of 0:04:25.800 --> 0:04:29.400 profit margins. Seemed like quarter after quarter have come in 0:04:29.560 --> 0:04:34.159 better than expected and reached unbelievable heights all time pies. 0:04:35.080 --> 0:04:38.720 That's probably not sustainable in the long run, Tom, And 0:04:38.760 --> 0:04:41.760 therefore I think a long term look at Ernis has 0:04:41.839 --> 0:04:44.720 to have a profit margin picture that's a little below 0:04:44.720 --> 0:04:47.480 where we are today. The worries about these margins into 0:04:47.480 --> 0:04:49.760 this quarter, Bob, I'd love a playbook from you on 0:04:49.960 --> 0:04:52.760 what to buy on weakness as this earning season starts. 0:04:52.800 --> 0:04:54.320 I think that's got to be the focus right now. 0:04:54.760 --> 0:04:57.200 If you want an investor committee and you're thinking about 0:04:57.240 --> 0:04:59.960 these issues, you're looking around and saying, well, everyone's till 0:05:00.080 --> 0:05:02.280 about the same thing right now. Where do I want 0:05:02.279 --> 0:05:04.400 to fight this story? How do I want to fight 0:05:04.480 --> 0:05:06.839 this story into earning season? Bob? How would you like 0:05:06.920 --> 0:05:10.279 to do that? So into weakness the first part of 0:05:10.279 --> 0:05:12.240 your question, I want to own what I think is 0:05:12.240 --> 0:05:15.000 gonna work best over the next six to twelve months, 0:05:15.279 --> 0:05:21.120 and that is cyclical value, downtap international I think they're 0:05:21.120 --> 0:05:24.440 the places where the puck is going. So financial stocks, 0:05:24.480 --> 0:05:27.960 for example, you've seen them as interest rates have crept higher, 0:05:28.240 --> 0:05:30.599 do a lot better than you might think in the 0:05:30.720 --> 0:05:33.240 decline we've seen in the market from its highs of 0:05:33.320 --> 0:05:35.479 just a few weeks ago. So that's the kind of 0:05:35.560 --> 0:05:38.640 area I want to jump onto. I have a lot 0:05:38.720 --> 0:05:41.839 less valuation risk there than I do in some of 0:05:41.880 --> 0:05:44.680 the higher pe growth stocks have done so so well 0:05:44.760 --> 0:05:47.360 for it seems like forever, Bob, It's been forever. It's 0:05:47.360 --> 0:05:48.919 been too long. It always feels like it's too long. 0:05:48.960 --> 0:05:50.960 It's quite a catch up set as always, Bob, Dell 0:05:51.000 --> 0:05:59.880 Cross Mount Global Investment c I YEA. What it really 0:06:00.040 --> 0:06:02.560 is here early October is the linkage of an economic 0:06:02.640 --> 0:06:07.160 belief into an equity or stock market execution on the economics, 0:06:07.160 --> 0:06:10.240 Bruce Casmin joins with JP Morgan or chief Economists and 0:06:10.279 --> 0:06:14.760 a head of global economic research. Away from stagflation, Bruce Kasmin, 0:06:14.800 --> 0:06:18.560 what does the JP Morgan call on economic growth forward 0:06:18.680 --> 0:06:22.200 a year? So? I think the broad pictures that we 0:06:22.279 --> 0:06:26.120 continue to get the benefits of vaccinations proving effective, of 0:06:26.160 --> 0:06:30.440 the virus becoming less of an economic factor, growth rotates 0:06:30.520 --> 0:06:33.680 away from the US, and we see better growth in 0:06:33.760 --> 0:06:37.560 emerging markets over the next year. But growth is pretty solid. However, 0:06:37.600 --> 0:06:39.520 as you were noting, we have a threat right now 0:06:39.600 --> 0:06:43.280 that growth is decelerating in the US, inflation is moving up. 0:06:43.320 --> 0:06:45.880 There's important drags here that we have to be right. 0:06:45.920 --> 0:06:48.200 We get over with still pretty solid growth over the 0:06:48.240 --> 0:06:50.880 next few months. I think all of our listeners and 0:06:50.960 --> 0:06:56.400 viewers can be confused about a fairly optimistic economic outlook 0:06:57.279 --> 0:07:02.279 uh from JP Morrigan, But my go Faroli's potential GDP, 0:07:02.520 --> 0:07:06.040 which is much lower, but just up against your arguably 0:07:06.120 --> 0:07:10.200 top of street optimism on equities from Michael Faroli to 0:07:10.320 --> 0:07:14.680 Lacos Bougies. I mean, are those two views linked well. 0:07:14.720 --> 0:07:16.960 I think in the near term, the basic point is 0:07:17.040 --> 0:07:19.720 we still have an enormous amount of slack in the 0:07:19.800 --> 0:07:22.440 U S economy and the global economy. We can grow 0:07:22.520 --> 0:07:25.240 even with what we still believe is a relatively weak 0:07:25.280 --> 0:07:27.920 supply side and one that might have gotten earth by 0:07:28.000 --> 0:07:31.600 the pandemic. I think the question, in the more broad 0:07:31.640 --> 0:07:33.800 sense and for the equity market, is not so much 0:07:33.840 --> 0:07:36.920 about the pace of growth but the sustainability of growth. 0:07:36.960 --> 0:07:39.840 And on that front, we are very optimistic that we're 0:07:39.880 --> 0:07:45.040 coming into this expansion with healthy balance sheets, supportive policy UM, 0:07:45.080 --> 0:07:47.880 and that the vaccine still creates an opportunity for a 0:07:47.920 --> 0:07:50.760 lot of pent up demands. So potential growth is low. 0:07:51.280 --> 0:07:53.600 There's a drag that's hitting us now, but there's a 0:07:53.640 --> 0:07:57.119 good opportunity here for having an expansion that is both 0:07:57.200 --> 0:08:01.400 sustainable and modestly positive in terms of delivering on the 0:08:01.440 --> 0:08:04.840 Fed's goal of raising inflation. Bruce, how much is your 0:08:04.920 --> 0:08:10.280 view predicated on supply chain disruptions getting resolved pretty quickly? Um. 0:08:10.320 --> 0:08:13.080 I don't think we should expect them to get resolved quickly, 0:08:13.120 --> 0:08:16.320 but I think we're very much dependent on them starting 0:08:16.320 --> 0:08:19.240 to moderate. The pressures are a big drag on growth 0:08:19.360 --> 0:08:21.800 right now. We should we should recognize that. And I 0:08:21.800 --> 0:08:23.880 think what's key in our forecast is that we see 0:08:24.160 --> 0:08:26.680 those pressures a bait. We see some of the inflation 0:08:26.920 --> 0:08:30.000 begin to come off. Here, purchasing power lifts and goods 0:08:30.000 --> 0:08:32.439 get moved around the world more easily. But this is 0:08:32.480 --> 0:08:34.960 going to take a while, probably six to nine months 0:08:35.160 --> 0:08:37.959 at least, before we see them the problems start to 0:08:38.040 --> 0:08:40.040 really move away from the scene. So this is what 0:08:40.080 --> 0:08:42.360 I'm really struggling with. Six to nine months and we're 0:08:42.360 --> 0:08:44.880 seeing the likes of Nike, of fed Bath and beyond 0:08:45.480 --> 0:08:49.719 fall dramatically after reporting their expectations for slower sales or 0:08:49.760 --> 0:08:52.800 higher margin pressures due to some of these supply chain disruptions. 0:08:53.080 --> 0:08:55.640 How can you still be optimistic, not only from an 0:08:55.640 --> 0:09:00.000 economic perspective, but a corporate health perspective when their faith 0:09:00.040 --> 0:09:03.960 seeing these sort of unsold items that cannot be acquired 0:09:04.000 --> 0:09:08.000 simply because of these disruptions. Well, I think the underlying 0:09:08.080 --> 0:09:10.640 story is that this is a drag. It's a drag 0:09:10.679 --> 0:09:13.400 which has continued to get bigger. It's a problem not 0:09:13.520 --> 0:09:17.240 just for consumer purchasing power, in terms of price increases, 0:09:17.320 --> 0:09:20.040 but for the corporate bottom line. But that there's still 0:09:20.120 --> 0:09:23.120 this broad story. I mean, we've been downgrading global growth 0:09:23.200 --> 0:09:25.880 quite sharply in the last few months on a result 0:09:25.880 --> 0:09:28.280 of this. We still have global growth running close to 0:09:28.320 --> 0:09:31.280 twice its potential pace in the second half of the year. 0:09:31.559 --> 0:09:34.560 So part of what's going on here is the pressure 0:09:34.600 --> 0:09:38.000 that's coming as we're starting to reopen economies. We think 0:09:38.040 --> 0:09:40.040 that's going to continue. So you have a balance here 0:09:40.559 --> 0:09:44.320 pressure on prices, drags from supply chain issues, but still 0:09:44.360 --> 0:09:47.200 strong global demand. And you know, the question is do 0:09:47.320 --> 0:09:49.400 we have it right that says the U s economy 0:09:49.480 --> 0:09:51.480 is not gonna do as well as we might have thought, 0:09:51.480 --> 0:09:54.240 but could still grow three to four percent here over 0:09:54.280 --> 0:09:56.720 the next year, that the global economy is actually gonna 0:09:56.760 --> 0:09:58.720 do better than that because a lot of these countries 0:09:59.240 --> 0:10:01.800 really lag behind. In the US, I think importantly China 0:10:01.840 --> 0:10:04.640 has to deliver on getting its growth back on course 0:10:04.720 --> 0:10:07.719 after having stumbled somewhat in the third quarter. And I 0:10:07.720 --> 0:10:10.280 don't want you to make a taibot called to four digits. 0:10:10.320 --> 0:10:13.080 That's not your remit at JP Morgan, But I do 0:10:13.200 --> 0:10:17.079 want you to talk about a broader, strong dollar resilient 0:10:17.200 --> 0:10:21.360 dollar e M. Fear that is out there. Do we 0:10:21.559 --> 0:10:26.600 underestimate the resiliency of particularly Asia? E M. Giving your 0:10:26.600 --> 0:10:30.760 house economic call? Well, I think in Asia there's two 0:10:30.840 --> 0:10:35.120 forces that work right now. One is the China story, 0:10:35.160 --> 0:10:38.720 where there's been a very sharp slowing policy driven, and 0:10:38.760 --> 0:10:40.360 we have to be right that policy is going to 0:10:40.440 --> 0:10:43.520 calibrate to bring things back up. The other story, which 0:10:43.520 --> 0:10:46.120 I think is just starting to come into view, is 0:10:46.160 --> 0:10:50.080 that we are finally seeing vaccination rates up, We're starting 0:10:50.080 --> 0:10:53.040 to see restrictions come down, and Asia is going to 0:10:53.080 --> 0:10:55.120 be a pretty decent source of demand here. And I 0:10:55.160 --> 0:10:58.559 include Japan and include the emerging markets in Asia as 0:10:58.600 --> 0:11:02.320 as part of that story. In that context, if we 0:11:02.440 --> 0:11:04.920 get the kind of growth we're looking forward Asia, I 0:11:04.960 --> 0:11:08.200 think the even with the FED moving to tapering, we're 0:11:08.240 --> 0:11:10.880 not going to see the dollar move materially higher here 0:11:11.280 --> 0:11:15.160 to move to Washington, Bruce Kasman, if we see some 0:11:15.280 --> 0:11:19.120 form of lessening or failure of these two bills by 0:11:19.120 --> 0:11:22.959 the Democrats in Congress, what does that do to the 0:11:23.000 --> 0:11:28.600 fiscal impulse to this nation? So it is important that 0:11:28.679 --> 0:11:31.080 we are right in terms of our macro abuse, that 0:11:31.120 --> 0:11:34.840 we get additional fiscal stimulus, and we're looking for something 0:11:35.040 --> 0:11:38.600 that adds roughly one percent to GDP next year from 0:11:38.640 --> 0:11:41.000 fiscal support. If we don't get that, that's obviously a 0:11:41.080 --> 0:11:43.440 drag on growth. And then you put war weight on 0:11:43.480 --> 0:11:46.760 the tension that we have in the macro picture between 0:11:47.240 --> 0:11:51.200 significant fading supports from this year's stimulus with the fact 0:11:51.240 --> 0:11:53.760 that the household sector has built up an enormous amount 0:11:54.080 --> 0:11:56.960 of excess savings. It hasn't spent the stimulus that came 0:11:57.160 --> 0:11:59.400 in twenty and twenty one, and to think about how 0:11:59.480 --> 0:12:01.880 much of that actually is a cushion. I wouldn't want 0:12:01.920 --> 0:12:04.400 to depend on that in my macro forecast. We are 0:12:04.440 --> 0:12:08.080 looking for this additional stimulus, but certainly that would be 0:12:08.360 --> 0:12:10.199 needed if we're going to continue to grow at the 0:12:10.200 --> 0:12:13.360 pace we're expecting if we don't get that stimulus. US 0:12:13.720 --> 0:12:16.160 you've been doing this for decades, you've been in this industry. 0:12:16.320 --> 0:12:19.000 You see the amount of uncertainty that is here among 0:12:19.040 --> 0:12:21.760 your colleagues. You even talk about the range of possible 0:12:21.800 --> 0:12:24.559 outcomes for a whole host of different areas, whether it's 0:12:24.600 --> 0:12:27.959 the policy response in China, the policy responds down in Washington, 0:12:28.080 --> 0:12:30.720 d C. With respect to spending, whether we see supply 0:12:30.800 --> 0:12:34.920 chain disruptions abait. Have you ever seen this amount of 0:12:35.000 --> 0:12:39.079 uncertainty in your economic forecasts? For sure? I mean, I 0:12:39.120 --> 0:12:41.760 think one thing we should remember is there's a difference 0:12:41.800 --> 0:12:45.880 between being an unprecedented times which this is really unprecedented, 0:12:46.200 --> 0:12:49.400 and the degree of uncertainty. I don't see a particularly 0:12:49.800 --> 0:12:53.000 significant risk of the recession in the next twelve to 0:12:53.080 --> 0:12:55.480 eight months. I think the global economy is on reasonably 0:12:55.520 --> 0:12:58.400 good footing. I think there's enormous range of outcomes we 0:12:58.440 --> 0:13:01.400 can talk about on inflation, uh, in terms of growth, 0:13:02.080 --> 0:13:05.200 but I don't think this is a particularly scary time 0:13:05.240 --> 0:13:08.920 in terms of macroeconomics. And I do think that one 0:13:08.920 --> 0:13:11.560 reason we always see a lot of uncertainty going forward 0:13:11.880 --> 0:13:14.360 is because everything that has happened in the past has 0:13:14.400 --> 0:13:17.240 actually happened. So do you think that traders are using 0:13:17.280 --> 0:13:20.520 economic projections correctly? When they start saying they keep getting 0:13:20.520 --> 0:13:22.480 it wrong, how can we trust them? And they start 0:13:22.520 --> 0:13:25.240 looking at the granularity is rather than the overarching point 0:13:25.280 --> 0:13:26.840 that you just made, We're not going to have a 0:13:26.840 --> 0:13:29.600 recession in the near term. One thing we can be 0:13:29.679 --> 0:13:32.320 sure is my economic forecast is going to be wrong. 0:13:32.520 --> 0:13:36.320 I mean, that's just the nature right now, will be wrong. 0:13:37.760 --> 0:13:40.319 But I don't actually see when I look at the 0:13:40.360 --> 0:13:44.640 way financial markets of pricing an enormous amount of uncertainty 0:13:44.679 --> 0:13:48.440 relative to normal times, risk premium and bond markets, premium 0:13:48.520 --> 0:13:52.120 in equity markets are not unduly high here. Um. I 0:13:52.160 --> 0:13:55.280 do think there is a lot of uncertainty. The range 0:13:55.280 --> 0:13:58.920 of outcomes is wide, and we've gotten certainly more focused 0:13:59.000 --> 0:14:02.240 on the possibility for disappointments on growth going into the 0:14:02.240 --> 0:14:05.760 fourth quarder. But again, I think we're still well balanced 0:14:05.800 --> 0:14:09.800 here for a solid recovery. Whether we get the recovery want, 0:14:09.920 --> 0:14:12.680 whether we control inflation. These are all important questions. What 0:14:12.800 --> 0:14:16.520 policymakers deliver or not are big questions. But I don't 0:14:16.559 --> 0:14:20.040 think we're in an unusually large range of uncertainty relative 0:14:20.160 --> 0:14:22.800 to a number of periods in the past, where you know, 0:14:22.840 --> 0:14:25.520 we were at the brink of recession, financial crisis, other 0:14:25.560 --> 0:14:28.560 things that could have hit us. We're enormous uncertainty early 0:14:28.640 --> 0:14:31.080 last year when the pandemic first hit, that was far 0:14:31.120 --> 0:14:34.040 more hard to to figure out than where we are 0:14:34.120 --> 0:14:37.560 right now. Bruce fantastic cancer wits to hear from you 0:14:39.640 --> 0:14:49.000 economist and had of global economic research. This is a 0:14:49.120 --> 0:14:53.160 joy to talk of the moment in Washington, and also 0:14:53.200 --> 0:14:57.479 the larger picture is well. Wendy Schiller is it Brown University? 0:14:57.560 --> 0:14:59.840 She just director of the Tobin Center of American po 0:15:00.000 --> 0:15:03.360 Politics and Policy. She also has the most readable seven 0:15:03.400 --> 0:15:08.440 hundred four page textbook, Treatment on America in a Democracy 0:15:08.600 --> 0:15:12.640 under Threat. John I. Camp convey to you the importance 0:15:12.760 --> 0:15:17.000 of Gateways to Democracy as an instructing guide for so 0:15:17.040 --> 0:15:21.040 many America. Let's get some instructions right now, Tom with Wendy. Wendy, 0:15:21.040 --> 0:15:23.480 great to catch up with you. We keep talking about 0:15:23.520 --> 0:15:26.840 these numbers one point five, three point five. Bernie sand 0:15:26.960 --> 0:15:29.600 is talking about something north of that. Senator sand is 0:15:29.600 --> 0:15:32.640 looking for six seven three point five in a minimum. Wendy, 0:15:32.680 --> 0:15:34.440 how many people in American right now do you think 0:15:34.440 --> 0:15:37.240 know what's in this offering? At three point five? It's 0:15:37.280 --> 0:15:40.560 on the table, Johnathan as close to zero people in 0:15:40.600 --> 0:15:43.200 American know what's in this bill. It's been I think 0:15:43.240 --> 0:15:47.600 political malpractice, and strategically, you know, Ill advised the Democrats 0:15:47.600 --> 0:15:49.440 to keep talking about the number and fighting about the 0:15:49.520 --> 0:15:52.720 number and not talking about what's in it for most Americans, 0:15:53.160 --> 0:15:56.400 especially since they're talking about a tax hike. On what 0:15:56.440 --> 0:15:58.880 they call upper income voters, many of whom live in 0:15:58.920 --> 0:16:02.440 the suburbs that voted for the Democrats and voted for 0:16:02.440 --> 0:16:04.640 the Democrats at least you know in some part in 0:16:05.760 --> 0:16:08.120 so if you're gonna go back in and staid reelect 0:16:08.160 --> 0:16:09.960 us again, but we're gonna raise your taxes and in 0:16:10.000 --> 0:16:12.120 fact we're spending it on stuff, but we can't even 0:16:12.160 --> 0:16:15.440 identify simply in thirty seconds or less. That is a 0:16:15.560 --> 0:16:19.560 very bad political calculation, which is stunning given the experience 0:16:19.640 --> 0:16:24.840 you've got between Pelosi, Schumer, and Biden. Can we talk 0:16:24.880 --> 0:16:27.120 about whose fault this is right now, Wendy, who is 0:16:27.160 --> 0:16:29.160 at fault? Maybe a couple of names there, who's at 0:16:29.160 --> 0:16:32.280 fault at the moment for that, Well, I think the 0:16:32.280 --> 0:16:34.840 people are just named a certain thing. President Biden should 0:16:34.840 --> 0:16:37.640 have been talking about what's in this reconciliation package, not 0:16:37.720 --> 0:16:42.480 just the reconciliation package. Certainly, Schumer, it's interesting, sure is 0:16:42.480 --> 0:16:44.120 walking into a tight line because he's up for re 0:16:44.160 --> 0:16:46.800 election in two and you never know, New York politics 0:16:46.920 --> 0:16:49.560 is changing rapidly. Uh. You know, he looks in good shape, 0:16:49.600 --> 0:16:51.360 he's gonna raise a lot of money, but you never know. 0:16:51.760 --> 0:16:53.600 So I think that's a lot of pressure on him 0:16:53.600 --> 0:16:56.680 not to sort of throw out all the progressive initiatives. 0:16:57.000 --> 0:17:00.040 But listen, you're doing features on investments in come and 0:17:00.080 --> 0:17:03.120 EISI gonna make electric cars for example. That infrastructure bill, 0:17:03.400 --> 0:17:06.400 either Reconciliation or the infrastructure bill, we're not quite sure 0:17:06.640 --> 0:17:10.399 has some money. And for public charging stations for example, 0:17:10.440 --> 0:17:13.399 for electric cars, where are people going to charge their cars? 0:17:13.440 --> 0:17:16.240 And what are they gonna pay for that electricity? Nobody knows. 0:17:16.440 --> 0:17:18.800 But if you're talking about going green and you're talking 0:17:18.800 --> 0:17:22.520 about electric cars for GM, then the government saying, hey, 0:17:22.560 --> 0:17:24.600 we're going to row out a free charging station for you, 0:17:24.880 --> 0:17:28.400 that's something Americans can digest. It's something they think, Oh, 0:17:28.440 --> 0:17:31.040 I drive to work, particularly in those districts that are 0:17:31.040 --> 0:17:33.520 competitive in the suburbs, and now I can drive an 0:17:33.520 --> 0:17:36.439 electric car and not worry about charging it. Wendy, are simple? 0:17:36.520 --> 0:17:38.320 I did that in lesson to seconds. It's the debate. 0:17:38.880 --> 0:17:41.040 Can't do that? It's a mystery. Well, and this really 0:17:41.160 --> 0:17:44.199 is the question down in Washington, d C. Is this 0:17:44.320 --> 0:17:47.119 the debate over these details or is it this larger 0:17:47.160 --> 0:17:50.560 philosophical point of a headline number and a view forward 0:17:50.600 --> 0:17:53.960 for the Democratic Party as the new UH the new 0:17:54.119 --> 0:17:57.280 Party of a new deal. I think I think that's 0:17:57.320 --> 0:17:59.600 been lost thus far. I think it got You know, 0:17:59.600 --> 0:18:01.119 they did a lot of good things in the COVID 0:18:01.119 --> 0:18:03.320 relief package. They got a lot of people vaccinated, They 0:18:03.320 --> 0:18:06.600 did another stimulus check. The economy seems to rebound now, 0:18:06.600 --> 0:18:09.200 the stock market and debt ceiling gets a little complicated 0:18:09.280 --> 0:18:12.400 this time of year. Of course, we expect Republicans, ultimately, 0:18:12.440 --> 0:18:14.880 as they always do, will go along with the debt 0:18:14.880 --> 0:18:17.320 ceiling or allow the Democrats to raise it. It'll just 0:18:17.359 --> 0:18:19.760 be brakemanship for a while, and that will rattle people 0:18:19.800 --> 0:18:22.120 a little bit. But if you're a suburban voter who 0:18:22.119 --> 0:18:24.680 likes the Democratic Party and you're finding your fur own 0:18:24.760 --> 0:18:28.000 case going down this month, that they're fighting about numbers 0:18:28.200 --> 0:18:29.800 and that you don't know what's in it for you, 0:18:29.880 --> 0:18:34.200 but a potential tax cut tax increase is on the horizon, 0:18:34.400 --> 0:18:36.760 you're getting uncomfortable. Well, and this is not the right 0:18:36.760 --> 0:18:40.040 time for Democrats to have people get uncomfortable with their agenda, Wendy. 0:18:40.160 --> 0:18:44.240 If they are committing political malpractice and not messaging this correctly, 0:18:44.600 --> 0:18:47.080 are they on the brink of political malpractice when it 0:18:47.119 --> 0:18:48.879 comes to the debt ceiling? When it comes to the 0:18:48.920 --> 0:18:53.199 idea of allowing the United States to accidentally default simply 0:18:53.240 --> 0:18:57.200 because they can't get the timing right. Well, I don't 0:18:57.200 --> 0:18:59.200 think they're gonna let that happen. I think they're gonna 0:18:59.200 --> 0:19:01.359 do whatever they can and to make sure that that happens. 0:19:01.359 --> 0:19:03.800 And I think there's enough support for Republicans, for example, 0:19:03.840 --> 0:19:08.360 Becau going into among Wall Street, among corporations, among businesses 0:19:08.359 --> 0:19:11.160 who don't like instability, that the pressure will be fairly 0:19:11.200 --> 0:19:13.960 significant the Republicans not to get in the way. But 0:19:14.000 --> 0:19:17.080 they're just gonna watch the Democrats fumble until the very 0:19:17.160 --> 0:19:19.240 last minute and then come aboard. That's what I think 0:19:19.280 --> 0:19:22.000 is going to happen. But Americans don't like the idea 0:19:22.080 --> 0:19:24.800 of raising taxes, spending lots of money, and having a 0:19:24.840 --> 0:19:28.280 skyrocketing debt or deficit. Even if they don't quite understand 0:19:28.320 --> 0:19:30.760 the relationship, they know that they don't want that to 0:19:30.800 --> 0:19:33.399 be our our constant situation. And I want to go 0:19:33.440 --> 0:19:36.200 to your academics, and I want to dovetailed into Greg 0:19:36.240 --> 0:19:38.840 Grant and the yells great where yells of school down 0:19:38.960 --> 0:19:41.679 the coast, Wendy, if you're not aware of that, And 0:19:41.720 --> 0:19:44.240 I want to talk about the threat of democracy that's 0:19:44.240 --> 0:19:47.920 out there in the zeitgeist and the new Jacksonian American 0:19:48.240 --> 0:19:51.560 with former President Trump, or if he doesn't run with 0:19:51.600 --> 0:19:55.120 the new Republicans, what is the flavor of our new 0:19:55.200 --> 0:20:00.399 Jacksonian America for our democracy? Tom That's a great question, 0:20:00.440 --> 0:20:03.119 But there's an inherent contradiction there, because what Andrew Jackson 0:20:03.160 --> 0:20:07.040 did that was so brilliant was expand the suffrage, expand 0:20:07.080 --> 0:20:10.440 the electorate. He pushed state legislatures to allow more people 0:20:10.480 --> 0:20:13.320 to vote. He got state legislators invest in the idea 0:20:13.359 --> 0:20:17.359 of state based parties political parties and sending the nomination 0:20:17.520 --> 0:20:19.919 a process out to the nation, making it more national 0:20:20.040 --> 0:20:22.800 because the elites in Washington had blocked him. So that's 0:20:22.840 --> 0:20:26.560 expanding the suffrage, expanding the vote, having more people participate. 0:20:26.880 --> 0:20:29.240 The Republican response, I'm not sure I call it a 0:20:29.240 --> 0:20:32.080 Trump response because he's out of office. But the Republican 0:20:32.080 --> 0:20:34.399 response now is to limit the suffrage, to try to 0:20:34.440 --> 0:20:36.359 make it harder to vote, to try to limit the 0:20:36.440 --> 0:20:39.000 number of people can vote. That's not Andrew Jackson. He 0:20:39.040 --> 0:20:41.280 didn't see it that way. He said, get everybody in 0:20:41.320 --> 0:20:44.040 there and then persuade them that you're the guy. So 0:20:44.080 --> 0:20:46.359 I think that Trump will ride the codetails of what 0:20:46.400 --> 0:20:49.280 the Republicans are doing to some extent. But his motto 0:20:49.320 --> 0:20:51.400 and what he did in twenty sixteen was bring more 0:20:51.440 --> 0:20:54.800 people who had not voted or hadn't voted recently into 0:20:54.880 --> 0:20:58.199 the electorate. And that's the Jackson model. Wendy, thank you, 0:20:58.240 --> 0:21:01.639 it's been too long. Come back soon. That of Brown 0:21:01.760 --> 0:21:10.320 University right now for Lisa Bramits and I, it's a 0:21:10.320 --> 0:21:13.920 great joy in radio and television to bring in Candice Browning. Yes, 0:21:13.920 --> 0:21:17.920 she's had a global research at a Bank of America, 0:21:18.160 --> 0:21:22.040 but very much like Tobias Levkovich of City Group, her 0:21:22.119 --> 0:21:25.159 strength is she started out in the trenches. If you 0:21:25.240 --> 0:21:29.760 are seventeen years in a row the airline analyst of 0:21:29.800 --> 0:21:33.880 the world, and if you do securities and analyst analysis, 0:21:33.920 --> 0:21:36.760 I should say, like Candice Browning two years ago, that 0:21:37.040 --> 0:21:40.240 is a research foundation. And we're thrilled she could join 0:21:40.359 --> 0:21:43.520 us today. Cannice, you have a new report out that's 0:21:43.560 --> 0:21:47.560 on bitcoin. I don't even know, Candid. Did Brian moyne 0:21:47.600 --> 0:21:53.440 in let you put the doge in your crypto report? Well, 0:21:53.440 --> 0:21:56.000 thank you Tom so much for having me on the 0:21:56.040 --> 0:21:59.600