Speaker 1: Welcome to Bloomberg Opinion. I'm Vonnie Quinn. This week, the
Speaker 1: political scientists John Sides and his co authors talk about
Speaker 1: a cycle of discovery, scrutiny, decline. Jonathan Bernstein on the
Speaker 1: start of campaigning for four. Also Justin Fox on the
Speaker 1: curse of the Warren Buffett comparison. First though, to the markets,
Speaker 1: mac Oman columnist Cameron Christ joined me to discuss what's
Speaker 1: starting to look a lot like shortcovering. Cameron, so, typically
Speaker 1: one percent move is considered, you know, a fairly decent move.
Speaker 1: But we've seen a lot of one percent and way
Speaker 1: more than that moves this year, and yet it's difficult
Speaker 1: to know whether we're hitting bottom or we're heading top.
Speaker 1: You have a great column about how you distinguish between
Speaker 1: shortcovering and a regular If there is everyone rally, what
Speaker 1: are we seeing right now? Yeah? I think you can
Speaker 1: look at the performance of individual securities within an index
Speaker 1: to get some sort of insight as to what's driving
Speaker 1: the index level price. I think the theory here is
Speaker 1: that if there's new money coming in, it should really
Speaker 1: benefit all the securities in the index more or less equally.
Speaker 1: I mean, it isn't necessarily the case but you would
Speaker 1: expect to see a broadly comparable performance across all of
Speaker 1: these individual stocks, whereas if it's a short covering rally
Speaker 1: or a rally it's driven by a reduction of risk positions.
Speaker 1: What you would expect to see is sort of the
Speaker 1: worst performers suddenly being the great beneficiaries of that flow,
Speaker 1: and the strongest performers suddenly tailing off. And that's exactly
Speaker 1: what we've seen since the us CPI figures. So if
Speaker 1: you sort all the stocks in the SMP five D,
Speaker 1: for example, by their performance over the last year, and
Speaker 1: then you look at say the ten worst performers, well,
Speaker 1: they've returned an average of just under eight percent. If
Speaker 1: you look at the ten best performers, on the other hand,
Speaker 1: they've actually fallen by one quarter percent. So the good
Speaker 1: stocks have been sold and the bad dogs have been bought.
Speaker 1: And that naturally suggests that what's been driving the price
Speaker 1: act has been risk reduction on the part of portfolio
Speaker 1: managers and investors. If that's the case and much risk
Speaker 1: has been reduced, are we sort of at a flat
Speaker 1: level here or is there more to be done? Or
Speaker 1: how do you know about that? Yeah, I mean it's
Speaker 1: difficult to say, and it's the sort of thing that
Speaker 1: you can only know to some degree in the hindsight
Speaker 1: that haven't been said. Looking forward, I mean, what have
Speaker 1: we got on the horizon? All right? We've got Thanksgiving
Speaker 1: Week in the US next week, which is typically a
Speaker 1: quiet period or at least appeared with low participation and
Speaker 1: poor liquidity. We've got the Football World Cup starting uh
Speaker 1: this weekend, and while some people may be boycotting that
Speaker 1: on human rights grounds or whatever, it's still the sort
Speaker 1: of event that draws a lot of viewership brittly in Europe,
Speaker 1: Asia and South America. And again, got an environment where
Speaker 1: you've expect trading liquidity to be poor. And all of
Speaker 1: this takes us sort of into the end of the
Speaker 1: year again where trading liquidity is poor. Given the volatility
Speaker 1: that we've seen throughout the course of the year, I
Speaker 1: think it's certainly reasonable for anyone who's had a half
Speaker 1: decent year to sort of think about, well, liquidity is
Speaker 1: bad now, and it's about to get worse. Why not
Speaker 1: just tighten up the ship a little bit, reduce some
Speaker 1: risk positions, particularly given that sort of the macro currents
Speaker 1: are shifting a bit in the sense that we had
Speaker 1: that lower inflation figure last week, and when I just
Speaker 1: run a lower risk profile when things are more likely
Speaker 1: to be erratic. Now, you do say that poor trading
Speaker 1: liquidity can be both an ally and an enemy. So
Speaker 1: for those who maybe didn't have the best of years,
Speaker 1: might be be trying to take it down to jobs. Yeah,
Speaker 1: I mean, I think there's certainly an element of that,
Speaker 1: roll the dice by a few lottery tickets and hope
Speaker 1: for the best. Yeah, that's certainly the case. Because if
Speaker 1: you're you know, I won't name any names, but there
Speaker 1: are some high profile fund managers they are down plus
Speaker 1: on the year. I mean, is there is there much
Speaker 1: difference between down fifty and down sixty? Not really, But
Speaker 1: if you can sort of recover the down all of
Speaker 1: a sudden, it doesn't seem so bad. So yeah, I mean,
Speaker 1: I guess there could be an effort perhaps to try
Speaker 1: to push things some of these poorly performing names, try
Speaker 1: to push them higher, but it remains to be seen
Speaker 1: how successful that might be. Cameron, what about correlation, because
Speaker 1: it does seem like stocks really around the world are
Speaker 1: so correlated right now. Are people doing the same thing
Speaker 1: in every training environment? Well, certainly the phenomenon I've just
Speaker 1: described in terms of risk reduction that does seem to
Speaker 1: be evident in other markets as well. I'm a round
Speaker 1: the same analysis on the eurostocks, on the foot Sea
Speaker 1: and on the kneek, and they've all exhibited broadly similar
Speaker 1: behavior where the performance over the last week or so
Speaker 1: has been sort of negatively correlated with that of the
Speaker 1: last year, which really captures the sort of thematic trend
Speaker 1: of two so um. Again, that's consistent with some risk reduction, shortcovering,
Speaker 1: whatever you want to call it. As as we enter
Speaker 1: this period where liquidity is like going to be even
Speaker 1: worse than it's been recently common, you know, it's an
Speaker 1: impossible style obviously an advance. But if we get another
Speaker 1: CPI or a pp I that shows inflation moderating slightly,
Speaker 1: could that be another catalyst for a five day period
Speaker 1: like we just had. Oh, I mean absolutely. You know
Speaker 1: it's frequently in the US where obviously that would influence
Speaker 1: the FEB, who is, after all, the world's central back.
Speaker 1: That having been said, in the UK on Wednesday we
Speaker 1: had a CPI figured that was above expectations, So you know,
Speaker 1: the notion that we're going to have downside surprises on
Speaker 1: inflation from here on out. Is probably more hope than
Speaker 1: a reasonable expectation. On the retail sales in the US
Speaker 1: were super strong, so clearly the demand side of the
Speaker 1: inflation equation is an moderating to the degree that the
Speaker 1: third would work. Mac Oman columnist Cameron christ More next
Speaker 1: on Bloomberg Opinion. I'm Vanni quinn tip for financial market pros.
Speaker 1: If you're being compared to Warren Buffett or Steve Jobs,
Speaker 1: maybe check the books. I think there's also just a
Speaker 1: thing of like, we need to be a good constructive
Speaker 1: factor in this space if we're not. It's just like
Speaker 1: that on many levels. I had a conversation about all
Speaker 1: of this with Boomberg Opinions justin Fox. So the impetus
Speaker 1: for this column was Sam Bankman Freed's spectacular downfall. This is,
Speaker 1: of course, the third year old who was worth billion
Speaker 1: dollars a year ago and who has bankrupted a lot
Speaker 1: of people, let's put it that way. And yeah, just
Speaker 1: a couple of months ago he was on the cover
Speaker 1: of Fortune, and I act as a former employee. I
Speaker 1: still subscribe to Fortune, and so I had that magazine
Speaker 1: at home with Sam's face and the next Warren Buffett
Speaker 1: exactly right under it. And how many times have we
Speaker 1: seen this phrase? And what does it come to mean? Well,
Speaker 1: the most famous one before this was probably the Business
Speaker 1: We cover in two thousand four, before Business We was
Speaker 1: part of Bloomberg. It was Eddie Lambert Jr. And it
Speaker 1: also asked the next Warren Buffett exact same language, and
Speaker 1: Lambert actually went. And really the next couple of years
Speaker 1: were great. There was some Fortune article a couple of
Speaker 1: years later that called him the greatest investor in America.
Speaker 1: But then his whole Sears makeover didn't work out. It
Speaker 1: wasn't a collapse, but he definitely did not make his
Speaker 1: investors a lot of money. And he's poorer than he
Speaker 1: was fifteen years ago. And there's something really strange, or
Speaker 1: maybe it's lazy or gullible or something about using this
Speaker 1: phrase the next warn Buffett, because Warren Buffett stands for
Speaker 1: a lot of things, a lot of things. These people
Speaker 1: aren't right, And I mean I used the phrase the
Speaker 1: Berkshire Hathaway of net stocks in again in the pages
Speaker 1: of Fortune to describe CMG I, which was this holding
Speaker 1: company for a bunch of lac hosts and Alta Vista
Speaker 1: and netstocks like that, and all I meant at the
Speaker 1: time was it was a holding company for internet stocks.
Speaker 1: But I still kind of cringed when I wrote it that.
Speaker 1: I guess this talk of their being a next Warren
Speaker 1: Buffett curse has kind of grown in recent years because
Speaker 1: of Lampard, and now it will grow even more with
Speaker 1: bank Man Freed. And they're also Chama, thank you. You're
Speaker 1: better pronouncing that than I am. He had this big
Speaker 1: chat with Eric Shatzker Bloomberg, I guess, like a year
Speaker 1: and a half ago where he was comparing himself to Buffett,
Speaker 1: and he's had a big come down lately. He's the
Speaker 1: spack king who was starting to unwind his special purpose
Speaker 1: acquisition companies because that whole boom has turned into a bust.
Speaker 1: But what I did is I spent a bunch of
Speaker 1: time looking farther back in various news databases than just googling,
Speaker 1: and they're actually a fair number people have been compared
Speaker 1: to Buffett and done just fine. The one that I
Speaker 1: knew off the top of my head was Lucadian National,
Speaker 1: which was this much sort of smaller Berkshire Hathaway that
Speaker 1: did very very well in the eighties and nineties and
Speaker 1: continued to do well until it's sort of unwound itself
Speaker 1: over the past decade. And when people talk about Warren
Speaker 1: Buffett and Berkshire Hathway, I guess the definition changes each time.
Speaker 1: But what Berkshire is is it has just a very
Speaker 1: long track record at being very successful, right And Warren
Speaker 1: Buffett is a very long track record at a being alive,
Speaker 1: be continuing to invest and see continuing to make profits.
Speaker 1: He hasn't always made the right choice, but mostly he's
Speaker 1: made the right choice. He wouldn't have a lot in
Speaker 1: common with some of these people. And you know, and
Speaker 1: with Sam Bankman Freed. The specific thing where it came
Speaker 1: up in this Fortune Q and A that led to
Speaker 1: that cover language is just the reporter said that some
Speaker 1: other crypto person had said that as f t X
Speaker 1: was kind of buying up all these other failing companies,
Speaker 1: that Bankman Freed would be like Warren Buffett as the
Speaker 1: guy who was the rescuer, and lots of people owed
Speaker 1: him because Buffett has done that repeatedly. It was one
Speaker 1: little parallel. The investors who get compared to Buffett and
Speaker 1: actually do fine are ones who are very value oriented,
Speaker 1: long term oriented investors. And Buffett himself has always promoted
Speaker 1: the idea that maybe he has some special skill, but
Speaker 1: there's actually a bunch of other people like him, other
Speaker 1: disciples of Benjamin Graham is mentor who will outperform the
Speaker 1: market if you give them a long enough time. But
Speaker 1: it makes for great memes when these people collapse completely
Speaker 1: they have been. It does bring up the question, though,
Speaker 1: are we gullible? Not just journalists but people in general?
Speaker 1: I mean, so many people invested with the like of
Speaker 1: San Bank, bun Freed and then to move away from
Speaker 1: the Warren Buffet comparison, we've seen Elizabeth Holmes, You've seen
Speaker 1: so many fraudsters. Why are we not getting any better
Speaker 1: detecting this kind of fraud in advance? I mean, and
Speaker 1: sometimes it's not fraud, like if somebody, another person who
Speaker 1: got a couple of next Warren Buffett references last year's
Speaker 1: Cathy would the very gung ho tech investor and nothing
Speaker 1: fraudulent about what she's doing. But it just ought to
Speaker 1: be utterly clear to anyone when her arc innovation was
Speaker 1: booming a year ago that this is a really volatile
Speaker 1: way to make money and you know, lots of investors
Speaker 1: are going to pull out when she's having bad times
Speaker 1: right now, I guess, I mean part of it is generational. Clearly,
Speaker 1: something like crypto provides this opportunity to say, oh, well,
Speaker 1: this is different. It's not going to be like all
Speaker 1: the past investment bubbles. So I don't know that we're
Speaker 1: getting more gold, but it is kind of remarkable to
Speaker 1: me that people keep falling for this stuff. Some of
Speaker 1: these people as well, they're united by a kind of charisma.
Speaker 1: They're able to speak in a way that doesn't just
Speaker 1: convince the regular Joe on the street, but also VC
Speaker 1: investors who should know better, especially by now I mean
Speaker 1: as part of this, the fact that the VC investors
Speaker 1: have had just such an easy time over the last
Speaker 1: twenty years because of the Federal Reserve being in the park. Yeah,
Speaker 1: I mean, clearly, it seems like this is one of
Speaker 1: the things that happened at ft X. They started making
Speaker 1: these bets that were really just arbitrage and pretty safe,
Speaker 1: but then they started trying other things that were much
Speaker 1: more sort of dependent on the market continuing to do well.
Speaker 1: And I think you convince yourself you have some special
Speaker 1: knowledge when really Yeah, you're just sort of riding a wave.
Speaker 1: How would you know in advance that somebody like that
Speaker 1: just doesn't have the assets to call what he's talking about.
Speaker 1: I mean, I do think the sort of famous interview
Speaker 1: with Matt Levine and Joe wasn't fall and Tracy Halloway.
Speaker 1: I came away from that thinking he's charming Lee Frank.
Speaker 1: But at the same time, I would not put a
Speaker 1: penny into any of these things he's doing because it's
Speaker 1: just also opaque. They're definitely Ponzi like characteristics to it.
Speaker 1: The value is purely just based on continued confidence that
Speaker 1: they have value. And I mean, the whole point with
Speaker 1: Buffett is it shouldn't matter what financial markets do because
Speaker 1: you're buying a stake in a business that makes money
Speaker 1: outside of financial markets. I just think that idea that
Speaker 1: if you're buying and selling a financial asset, obviously it's
Speaker 1: a lot better if there's some intrinsic value to it.
Speaker 1: And there is no intrinsic value to any of these
Speaker 1: things in crypto, even though I mean, bitcoin clearly has
Speaker 1: shown a lot of staying power, but there's no intrinsic
Speaker 1: cash flow supporting it. If you were looking out of
Speaker 1: the landscape. Now, who deserves the moniker the next Warren Buffets.
Speaker 1: I mean, you know somebody who's gotten it a lot
Speaker 1: is Seth klarman Um, the hedge fund manager. I mean,
Speaker 1: I think the concerns with him at this point are
Speaker 1: sort of the same that you might have with Berkshire Hathaway,
Speaker 1: which is that you know, maybe we're reaching the point
Speaker 1: of diminishing returns. Bill Ackman is somebody who got a
Speaker 1: I think it was Baby Buffett on the cover of Forbes,
Speaker 1: and that was poor timing. It came in two thousand fifteen,
Speaker 1: just before he had a couple of pretty bad years.
Speaker 1: But I mean, I was just reading through the latest
Speaker 1: reports from Pershing Square and it's been doing really well lately,
Speaker 1: and I yeah, he's always been very value oriented, but
Speaker 1: there was this whole activist signed to it that maybe
Speaker 1: he's decided isn't actually as helpful to his returns as
Speaker 1: he maybe thought. It was Bloomberg Opinions at justin Fox.
Speaker 1: Next Jonathan Bernstein on how the midterms exposed a g
Speaker 1: OP in disarray and what it means for the one Congress.
Speaker 1: This is Bloomberg Opinion. So now we have the broad
Speaker 1: parameters of what the United States Congress will look like.
Speaker 1: We also have Donald Trump officially announcing his candidacy for
Speaker 1: the presidential race. This will not be my campaign, This
Speaker 1: will be our campaign. I spoke with Bloomberg Opinions Jonathan
Speaker 1: Bernstein about what the outcome of the mid terms means
Speaker 1: for legislating during the Lame Doc session and beyond, also
Speaker 1: how exactly we should start thinking about all right, Jonathan, Well,
Speaker 1: it's been a few days, so you've been able to
Speaker 1: digest recent events. What do you after a few days
Speaker 1: of rumination is the most surprising thing about what happened
Speaker 1: in the mid terms? You know, I think that I'll
Speaker 1: go along with the conventional wisdom. Democrats definitely did a
Speaker 1: little bit better than I think reasonable expectations based on
Speaker 1: polling and what the expert opinion was. I think they
Speaker 1: beat some of the expectations. There's no question that there
Speaker 1: was sort of some momentum that came out in the
Speaker 1: mainstream media. Few outlets in particular sort of bought the
Speaker 1: Republican spin that it was going to be a landslide.
Speaker 1: The polling really never said it was going to be
Speaker 1: a landslide. It said it should be a moderately good
Speaker 1: year for Republicans, So I don't think that there was
Speaker 1: much that was sort of a shocking surprise, but it
Speaker 1: was a lot that was. It turns out that the
Speaker 1: ball bounced a little bit the Democrats way in enough
Speaker 1: races and enough states that it wound up being an
Speaker 1: unusually good year for Democrats. I guess I would say
Speaker 1: there wasn't that any huge shocker on election day, and
Speaker 1: as the returns came in, if you look at the
Speaker 1: broad sweep of things, if you look at what happens
Speaker 1: when there's a democratic president, and in particular, unpopular democratic
Speaker 1: president in the White House, then it is a big
Speaker 1: surprise that it was basically a draw and that Republicans
Speaker 1: didn't pick up forty seats in the House and you know,
Speaker 1: several seats in the Senate. This was one of the
Speaker 1: very few elections I think there's been six or something
Speaker 1: the last hundred years where the in party picked up
Speaker 1: seats and state legislatures. So while overall it was sort
Speaker 1: of a you know, Democrats will either pick up zero
Speaker 1: or one Senate seats, Republicans are picking up a handful
Speaker 1: of House seats. Democrats are plus two and governors, and
Speaker 1: plus a handful of state legislative seats. But it's sort
Speaker 1: of a fifty fifty type of election. But that in
Speaker 1: itself is over the course of history, very surprising and
Speaker 1: any year where inflation has been insane as well, So
Speaker 1: you would think that the incumbent party wouldn't be benefiting
Speaker 1: from that. Is it fair for the Democrats to do
Speaker 1: a lap of honor or was this a little bit
Speaker 1: of luck? You know, that's a good question. Sure, everybody
Speaker 1: deserves to take bows when they win. I don't think
Speaker 1: it was really much that Democrats did, especially governing Democrats.
Speaker 1: If you look at grassroots, I think that there was
Speaker 1: a huge amount of enthusiasm, again for the fourth cycle
Speaker 1: in a row, coming from women, different demographic groups of
Speaker 1: women over the abortion issue. So in a sense, it
Speaker 1: was Republicans shooting themselves in the foot in some ways,
Speaker 1: or Conservatives I should say, yes, I think that Republicans
Speaker 1: basically blew it rather than Democrats. So two things. First
Speaker 1: of all, the presence of Donald Trump, a very unpopular
Speaker 1: former president who remains very much in the public eye
Speaker 1: and keeps trying to put himself in the political space.
Speaker 1: That probably changed things a little bit, which is interesting
Speaker 1: because it wasn't clear whether it would be a positive
Speaker 1: or negative in the early days, at least of the campaign,
Speaker 1: and even in October. I think all along it looked like,
Speaker 1: to the extent that he was a major figure, it
Speaker 1: was a negative. You know. The thing is that normally
Speaker 1: people think, ah, the president, he's the most important person
Speaker 1: right now, let's balance him out some or if things
Speaker 1: are going badly, blame the president. But with the former
Speaker 1: president being a very important figure in politics to this day,
Speaker 1: people could blame Trump very easily, even though he's not
Speaker 1: around as a governing official. The other thing is that Trump,
Speaker 1: and this is only partially Trump's fault, but he's getting
Speaker 1: blamed for it a lot within Republican circles. The influence
Speaker 1: on the candidates themselves. There were a whole lot of
Speaker 1: terrible candidates chosen by Republicans in this cycle, some of
Speaker 1: them because Trump intervened in primaries, a lot because those
Speaker 1: candidates are just very popular among Republicans, Republican line media,
Speaker 1: among Republican voters who didn't see going in any penalty
Speaker 1: to be faced. And I think some of that may
Speaker 1: have to do with Trump and his electoral history that
Speaker 1: if they don't see Trump as a loser for his
Speaker 1: various things that made him very unpopular as present, he
Speaker 1: was a loser. He is a loser. He was never
Speaker 1: popular as president, He was always unusually unpopular. So the
Speaker 1: Republicans wound up with all these terrible candidates and that
Speaker 1: certainly cost them. Do the make Republicans moderate their views
Speaker 1: a little bit now, given what we've seen and given
Speaker 1: how leadership is going to change, even though there will
Speaker 1: obviously be some extreme candidates and some fringe candidates. Still
Speaker 1: I don't think those people moderate their views because I
Speaker 1: think what they're up to isn't views as much as
Speaker 1: it is confrontation. And what does happen is some of
Speaker 1: them go away because they lost their elections. Um So,
Speaker 1: to the extent that we have fewer of those extremists,
Speaker 1: that does make a difference, but there still are quite
Speaker 1: a lot, and there's still are quite a lot of
Speaker 1: people who in the House, for example, voted to overturned
Speaker 1: the election, and you know, and then new people who
Speaker 1: mostly subscribe to that kind of thinking, and so do
Speaker 1: they moderate. I don't see what in the party there
Speaker 1: is to push them in that direction. We spoke already
Speaker 1: about Kevin McCarthy and how you know he might have
Speaker 1: to negotiate, but it's not clear what promises he can
Speaker 1: give people or what he can offer them. Does anything
Speaker 1: come to mind, No, m Kevin McCarthy is let's assume
Speaker 1: that he winds up having a four seat majority to
Speaker 1: nineteen to two fifteen. There's still some possibilities around that.
Speaker 1: The thing is that in normal times, all you have
Speaker 1: to do to become speaker is to win the vote
Speaker 1: of your caucus, a majority of your caucus, and then
Speaker 1: everybody loyally supports that person. When you have the floor
Speaker 1: vote for speaker, where McCarthy will be opposed, if it's him,
Speaker 1: will be opposing either Nancy Pelosi or whoever the Democrats
Speaker 1: leader is. To some extent, Democrats, but especially Republicans, have
Speaker 1: challenged that norm over the last oh seven eight nine
Speaker 1: Congresses already, and they say, well, we can use this
Speaker 1: procedural tick, which Mitchell Collin doesn't have to worry about,
Speaker 1: because there is no vote like that in the Senate,
Speaker 1: only a vote like that for one office, which is
Speaker 1: Speaker of the House. We can use that to hold
Speaker 1: the party hostage, and if it's a majority if five
Speaker 1: of us vote for King Kong or Donald Trump or
Speaker 1: you know, whoever to be speaker, then nobody will have
Speaker 1: a majority and we can use that. Now, what they
Speaker 1: can use it for, Well, they're not policy demanders. We're
Speaker 1: talking about people like Marjorite Heller Green here, Jim Jordan's
Speaker 1: that's right. What they want is to create controversy. That's
Speaker 1: their goal, you know, as as members of the House,
Speaker 1: is to get their appearances on Fox News and to
Speaker 1: beyond conservative talk radio. And so Kevin McCarthy can't give
Speaker 1: that exactly. Um, so there's nothing to stop them from
Speaker 1: doing it, and other than the realization that, oh, we'll
Speaker 1: have chaos if we do that, but they may not
Speaker 1: mind having some chaos. So who would be the unifier
Speaker 1: in the Republican Party then? Isn't one? There isn't one.
Speaker 1: The bottom line is there is no unifier because the
Speaker 1: people who are revolting are not looking for unity. Is
Speaker 1: there anybody else that's emerging as some kind of a
Speaker 1: maybe not a unifying figure, but even a polarizing figure,
Speaker 1: even somebody that would you know, lead the chaos? You
Speaker 1: have to go through the House caucus with a lot
Speaker 1: more intimate detail, but I don't see it. You know,
Speaker 1: when John Bayner, who is the last good leader of
Speaker 1: the Republicans had when he resigned, McCarthy wanted the job,
Speaker 1: didn't have the votes, they recruited Paul Ryan because he
Speaker 1: was the one who had the respect of different factions
Speaker 1: within the party. They don't have that now. There's no
Speaker 1: replacement for Ryan, who turned out to be terrible anyway.
Speaker 1: But you know, at least they all sort of thought
Speaker 1: he could do the job. I don't so the best
Speaker 1: my knowledgeism there are members who are well liked. There's
Speaker 1: always members who are well liked, and so they may
Speaker 1: eventually find that that works for them. But in terms
Speaker 1: of someone who has liked and respected that can actually
Speaker 1: lead them, if there's somebody like that, it has not
Speaker 1: been reported who in the party is going to decide
Speaker 1: who should be the candidate for president. There's a lot
Speaker 1: of controversy within political science and within the world really
Speaker 1: about who has the power of these things. What I
Speaker 1: always say, and my reading of it is it's party
Speaker 1: actors who make the decision, and that means it's a
Speaker 1: huge number of people, thousands of people of politicians and
Speaker 1: campaign and governing professionals and formal party officials and staff,
Speaker 1: party aligned interest groups, party aligned media, all of whom
Speaker 1: have their candidate, have their interests that they're pushing for
Speaker 1: within the process. Because what matters almost more than who
Speaker 1: the candidate is is which interests in which groups within
Speaker 1: the party are represented by that candidate, and how that
Speaker 1: the whole process goes on within the Republican Party. It
Speaker 1: seems to me that the biggest players are Republican aligned
Speaker 1: media talk to hosts or the people who make the
Speaker 1: decisions at the talk shows, Fox News, fox News imitators.
Speaker 1: They have a huge amount of cloud within the party,
Speaker 1: so that it would seem like Rhonda Santis does have
Speaker 1: an actual shot at the next presidency. Now if you
Speaker 1: were on his team, and I'm suggesting you ever would be,
Speaker 1: but put yourself in that position anybody's team, Exactly if
Speaker 1: you had to get out ahead of Marco Rubio or
Speaker 1: Ted Cruz or any any of the others that might
Speaker 1: emerge or might jump into the fray, who would you
Speaker 1: be trying to appeal to beyond the Republican media who
Speaker 1: obviously already has appealed to. Yeah, And the problem is
Speaker 1: that we don't know if those people will still be
Speaker 1: supporting him six months in the future, levels fifteen months
Speaker 1: in the future when Iowa and New Hampshire and South
Speaker 1: Carolina vote. So, you know, you try to build up
Speaker 1: support within the party. Then you try to fashion positions
Speaker 1: and attitudes that are popular. You try to appeal to
Speaker 1: activist donors. Obviously people money are important, but people who
Speaker 1: can you know, snab their fingers and have a thousand
Speaker 1: people come to Iowa to walk door to door for
Speaker 1: you are important too. Does he have that kind of
Speaker 1: general liability descantist? The only reason I'm talking about him
Speaker 1: is because you know, he's sort of on everybody's lips
Speaker 1: right now. But it doesn't, like you say, it doesn't
Speaker 1: mean that somebody else won't to merge, or that Ted
Speaker 1: Cuz won't suddenly grab the spotlight again exactly. And you know,
Speaker 1: we have there's a whole history of this, and the
Speaker 1: political scientist John Sides and his co authors talk about
Speaker 1: a cycle of discovery, scrutiny, decline where somebody all of
Speaker 1: a sudden becomes the candidate at the moment and everybody's
Speaker 1: all excited about that person and then yes, you know,
Speaker 1: Rudy Giuliani Scott Walker, Ben Carson Um, you know, and
Speaker 1: then after a while that part wears off and then
Speaker 1: they start to look at and they discover stuff that's
Speaker 1: not so flattering about that person, and that's what they
Speaker 1: run with. And then, you know, support sometimes plateaus, sometimes crashes.
Speaker 1: And do we know whether that will have with the scantists,
Speaker 1: we have no idea and I you know a lot
Speaker 1: of people will like watch them on TV. Oh does
Speaker 1: that person have I think it's very very difficult to know.
Speaker 1: I think that a special with you know, we've seen
Speaker 1: a lot of candidates who didn't appear to be that
Speaker 1: strong on television. But we're good enough person to person
Speaker 1: because even though it's it's thousands and thousands of people,
Speaker 1: it's sort of a discreet universe, it is. And also
Speaker 1: it's not clear that he has a national profile yet.
Speaker 1: I mean, he's a little bit more than anyone right now. Yeah, exactly,
Speaker 1: he's just building one up and we'll see how it
Speaker 1: plays over time. And there's it's just not in my view,
Speaker 1: it's not especially predictable. What we what will start to
Speaker 1: be meaningful is if he gets real support, permanent support, permanent,
Speaker 1: as permanent as anything is in politics, if he gets endorsements,
Speaker 1: if he gets commitments from donors, if those sorts of things,
Speaker 1: those tend to be good markers that the candidate is
Speaker 1: playing well, and not just of the moment. But he
Speaker 1: definitely has the backing of some will treaters like Ken
Speaker 1: Griffin and people like that right now, so that's always helpful.
Speaker 1: I don't ever want to write him off, as you've
Speaker 1: said in the past, but is Trump done? Or when
Speaker 1: will we know if he is? You know, I wouldn't
Speaker 1: want to make any guesses um what I read as
Speaker 1: as far as I see the pundits, and there's there's
Speaker 1: a group of pundits who are, oh, don't pay any
Speaker 1: attention to anything that's going on. Trump owns the party
Speaker 1: and when he snaps his fingers, eventually everybody will come
Speaker 1: back to him. And then there's another set that think
Speaker 1: he's finished. And I just don't think we know. I
Speaker 1: think that this stuff plays out over time. And what
Speaker 1: I would say is it's very clear that there are
Speaker 1: a lot of Republican Party actors, especially politicians, who have
Speaker 1: no use for him, who understand how he's hurt the
Speaker 1: party and who would love to have him go away.
Speaker 1: Whether that will be enough to prevent him from being
Speaker 1: the nominee. I don't know whether those people will fight
Speaker 1: hard against him. I don't know whether they're willing to
Speaker 1: compromise on another candidate in order to stop him. I
Speaker 1: don't know well. And also people's wings have been clipped
Speaker 1: January six and the hearings and so on. It has
Speaker 1: to have clipped some of the fans wings. Um, I
Speaker 1: wouldn't worry as much about, you know, at the sort
Speaker 1: of voter level. I don't want to say people automatically
Speaker 1: do whatever the media says, because it's not quite that simple.
Speaker 1: But I do think that if Fox News report favorably
Speaker 1: about Trump, most Republican voters are not going to care
Speaker 1: about any of that stuff. And if Fox News starts
Speaker 1: ignoring him, then you're going to find more and more
Speaker 1: voters going to the candidates that they pay favorable attention to.
Speaker 1: So you're saying that there's a scenario in which Trump
Speaker 1: could get popular again and could whip up crowds just
Speaker 1: like he was able to do in the past. Oh yeah,
Speaker 1: that's very plausible to me. But I hate to be
Speaker 1: the person saying I don't know what's gonna happen. But
Speaker 1: in fact, I don't know what's gonna happen. I don't
Speaker 1: think anybody anybody who acts completely convinced that they know
Speaker 1: what's going to happen in the presidential nomination battle that's
Speaker 1: still fifteen months away or thirteen months away, whatever it is,
Speaker 1: and that there's no consensus among party actors. You know,
Speaker 1: we knew Hillary Clinton was going to win in because
Speaker 1: everybody in the Democratic Party had already endorsed her at
Speaker 1: this stage, and even so she had to fend off
Speaker 1: a pretty serious challenge from Burning Standard. She was never
Speaker 1: in that much trouble at that time, we knew. But
Speaker 1: any time that we don't have that kind of consensus
Speaker 1: we had, say around George W. Bush when he first ran,
Speaker 1: we don't know. It just takes time for the stuff
Speaker 1: to shake out. Is Biden doing the right thing he
Speaker 1: said he'd announced, but in the new year, after the
Speaker 1: new year? Sometimes? Yeah, I do think that he probably
Speaker 1: the happy impression that most Democrats have about the elections.
Speaker 1: You know, it wasn't the Democratic landslide, you know, but
Speaker 1: but that no disasters happened, I think probably bought him
Speaker 1: even more time than he would have had anyway. But yeah,
Speaker 1: I think he needs to decide sometime in the first
Speaker 1: several months of the year in order to give the
Speaker 1: party time to react if he chooses not to run.
Speaker 1: If he does choose to run, as long as he
Speaker 1: can maintain around the level that he's at now, he's
Speaker 1: around approval, I think that he may get a minor challenge,
Speaker 1: but nothing too serious, and the data may actually work
Speaker 1: out for him, because not quite sure about a recession yet,
Speaker 1: but it looks like inflation is coming down. So if
Speaker 1: inflation comes down, and if we don't have a recession,
Speaker 1: then I would expect Biden and we don't go to
Speaker 1: war or anything like that. I would expect if economic
Speaker 1: news is good, no other particularly bad news, one would
Speaker 1: expect that Biden's approval rating will gradually recover and he
Speaker 1: will a year from now be certainly popular enough the
Speaker 1: Democrats would rather live with him than getting to the
Speaker 1: mess of a nomination battle, if that's what he wants.
Speaker 1: It has a lot to do with what his health
Speaker 1: actually is. There's a lot of crazy stuff about his health,
Speaker 1: but he's not young, and we don't know how it
Speaker 1: feels to be an eighty year old president and you
Speaker 1: know he's going to have to make that decision as
Speaker 1: long as he's not any less popular in is now.
Speaker 1: If he gets truly unpopular, then the party will start
Speaker 1: making it for him. But as long as he is,
Speaker 1: and certainly if he becomes a little more popular than
Speaker 1: this or less unpopular, I should say it's his decision
Speaker 1: and nobody can get into his head for that. Boomberg
Speaker 1: Opinions Jonathan Bernstein. Bomberg Opinion airs every weekend on Bloomberg
Speaker 1: Radio and as a podcast every week on Apple Spotify.
Speaker 1: Are your favorite podcast platform, do send us your opinions too.
Speaker 1: I'm at Vequin at Bloomberg dot Net. We're produced by
Speaker 1: Eric mollow. This is Bloomberg Opinion.