Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
Speaker 1: along with essential market moving news. Kind the Bloomberg Markets
Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot com. Let's bring in Ken Leon,
Speaker 1: Global Director of Industry and Equity Research at c f
Speaker 1: r A Research. Ken, we're pretty much through the bank
Speaker 1: earnings already. It's been quite the mixed result. Talked to
Speaker 1: us about your overall impression and how much these banks
Speaker 1: are differentiating one from the other these days. That's a
Speaker 1: great question. And the gloom and doom from March to
Speaker 1: to really the summer seems to be over, so the
Speaker 1: level of provision for loan loss and reserve seems to
Speaker 1: have been stabilized. The increases for it's much much smaller
Speaker 1: in the third quarter. But it's really a tale of
Speaker 1: two stories. We're excited about the capital markets for the
Speaker 1: pure plays like Goldman Sachs and Morgan Stowing Tomorrow. They're
Speaker 1: gaining wallets share and they're also disruptors in the traditional
Speaker 1: banking area for the main street type banks consumer and commercial,
Speaker 1: they're facing still risk as it relates to how do
Speaker 1: you get volume going again for credit card and for
Speaker 1: consumer lending um and it all seems to be a
Speaker 1: steph function of the COVID nineteen. Will there be a
Speaker 1: stimulus bill and will that sprinkle into the economy, you know,
Speaker 1: more activity, you know, US economy seventy consumer And that's
Speaker 1: why Bank America stocks down today as well as some pressure, yes,
Speaker 1: they with JP Morgan and City. How much are these
Speaker 1: banks chasing investors right now and how much are they
Speaker 1: just trying to stabilize themselves until perhaps they can give
Speaker 1: out dividends again or you know, earn some money some
Speaker 1: other way. Well, they have a dominant position. So looking
Speaker 1: at the u US banking industry, they are gaining deposits
Speaker 1: and the assets size, but they are learning their lessons
Speaker 1: from the last recession and crisis. You know, credit quality
Speaker 1: really matters, and they're letting on a lot of the
Speaker 1: lower qualified homeowners for for mortgages or other areas like
Speaker 1: or to go somewhere else in the shadow bank. You know,
Speaker 1: so there is a quality story and you know, I
Speaker 1: think for investors. When you look at these stocks, the
Speaker 1: broad bank stocks, the FED says, you can't raise dividends,
Speaker 1: you can't buy backstock. We're going to tell you where
Speaker 1: we are at the end of this year. So there's
Speaker 1: enormous capital being built up, which is why the return
Speaker 1: on equity ratios and regulatory ratios are so great. So
Speaker 1: next year it creates pent up return of capital to
Speaker 1: shareholders with an economy that's probably gonna be better at
Speaker 1: some point. In all of this means that this is
Speaker 1: a cheap group. You know, you know, got City trading
Speaker 1: at less than fift of that tangible book value, which
Speaker 1: is crazy. We also see that relative to the rest
Speaker 1: of the financial sector, investors are avoiding banks today, but
Speaker 1: don't forget what this could look like six to twelve
Speaker 1: months down down the line. And that's I think this
Speaker 1: quarter is a pivot from the dark days that we
Speaker 1: saw since March to trying to figure out what next
Speaker 1: year will be. Yeah, how much does that depend on
Speaker 1: stimulus and how soon it comes. I think stimulus is important.
Speaker 1: So going back to the traditional banks, the consumer bank,
Speaker 1: which is loans and credit cards. Unless we see the stimulus,
Speaker 1: it's not going to raise consumer confidence levels for those
Speaker 1: who work, and it's not going to add to relief
Speaker 1: for those who are forbearance on thaying their credit cards.
Speaker 1: It's a big problem. Twelve million out of work. I
Speaker 1: think the question the market is not sure is the
Speaker 1: election stimulus after the election or in January. This is
Speaker 1: the wild card. So that's why the banks box really
Speaker 1: aren't moving much this week. You know, can over the years,
Speaker 1: you've covered them all. You've covered the big banks, You've
Speaker 1: covered the boutique banks, you've covered the exchanges, you have
Speaker 1: covered you know, everything that I can and can think
Speaker 1: of when it comes to the financial sector. What is
Speaker 1: standing out to you as the most value right now?
Speaker 1: What's your your strongest by let's say so in our team.
Speaker 1: So I covered just the large banks right now. The
Speaker 1: rest of it, the rest of the team, names like Visa,
Speaker 1: master Card just beautifully positioned, you know, for that rebound
Speaker 1: in terms of consumer and credit card and their platforms
Speaker 1: um you know, so I think that's the area. You know,
Speaker 1: Acid Management is consolidating, we like black Stone, and that
Speaker 1: will continue, you know. Morgan Stanley, I thought it was
Speaker 1: a great deal. They paid a premium um, but you
Speaker 1: know what they got with eating dances that a global platform.
Speaker 1: So we're seeing consolidation and asset management, uh, and that
Speaker 1: will continue as well. Are the likes of Visa master Card,
Speaker 1: as you say, the perfectly positioned for the consumer. But
Speaker 1: are they under any threat at all from the more
Speaker 1: fintech E type companies out there? It's a good question.
Speaker 1: So for you and I as consumers, we think of
Speaker 1: Visa or master Card just the credit card in our wallet,
Speaker 1: but it's not. They really have a clearinghouse platform for
Speaker 1: transactions and they really have less risk in terms of
Speaker 1: some of the startups you know in the card area.
Speaker 1: You know. So it's a complex business, but where these
Speaker 1: Visa and master Card are situated is really in a
Speaker 1: great position. And of course American Express has some of
Speaker 1: that with their own private system, um, but you know,
Speaker 1: they have a big travel business and we know what
Speaker 1: Covid has done to that. Yeah for now, that's for sure. Ken.
Speaker 1: Are you dipping at all into these fin techs and
Speaker 1: and these different payment type companies and seeing which of
Speaker 1: them is likely to survive the longer term? So we
Speaker 1: are watching them, and mostly what we cover are the
Speaker 1: large incontents, which are also heavily and dusting, and actually, Ken,
Speaker 1: I'm sorry we'll have to continue this another day, but
Speaker 1: an extraordinary conversation with Ken Leon there of c f
Speaker 1: R A, and we really appreciate his time. Now we
Speaker 1: want to go to the Economic Club of New York.
Speaker 1: President Trump is addressing the e C n Y excited
Speaker 1: to have with us. Now leading labor economist Danny Blanche Flower,
Speaker 1: pro pressor of economics at Dartmouth College, former Bank of
Speaker 1: England policymaker, and really, Danny, there are so many places
Speaker 1: where we could start. I definitely want Have we got
Speaker 1: an hour and a half, right, we need to make
Speaker 1: this extra long. Well, let's get straight to it then,
Speaker 1: because we will talk breaks it in Boris Johnson and
Speaker 1: coronavirus in Britain in a moment. But let's start with stimulus.
Speaker 1: There is a little bit of head scratching I think
Speaker 1: as to why how speaker Nancy Pelosi is holding firm
Speaker 1: and not accepting the one point a trillion dollars. And
Speaker 1: I want you to explain why it might be better
Speaker 1: for people who are suffering right now if Nancy Pelosi
Speaker 1: doesn't accept it. If that's what you believe, well, I mean,
Speaker 1: obviously there are There are arguments, strong arguments to suggest
Speaker 1: that the Republicans should have gone out for a stimulus
Speaker 1: expect especially in areas where their candidates are in trouble,
Speaker 1: to boost how well people are feeling. UM. Stimulus in
Speaker 1: this economy is needed because people are struggling. Um, they're furlowed.
Speaker 1: Even if they have jobs, many of them have less
Speaker 1: hours than they would like, so they have less spending
Speaker 1: and that feeds through to the economy as a whole
Speaker 1: and has a negative impact on the economy. So what
Speaker 1: happened in earlier in the year when the economy tank
Speaker 1: we went into lockdown, stimulus came that prevented things from
Speaker 1: being a lot worse. Now, obviously, I think everyone's playing
Speaker 1: political games um in a sense that if checks show
Speaker 1: up prior to the election, perhaps that will boost the Republicans.
Speaker 1: So this is in a sense, these of political games.
Speaker 1: In terms of the economy, we need to get stimulus
Speaker 1: in there, and we need to get it in there now,
Speaker 1: especially as we're starting to see slowing down of the
Speaker 1: economy and the virus spreading. So this is head scratching stuff.
Speaker 1: People are playing politics with people's lives, and it's time
Speaker 1: to go and get busy, as the old phrase said.
Speaker 1: But Danny, there's stimulus, and there's stimulus, and I know
Speaker 1: that there's an argument forgetting people, you know, cash immediately
Speaker 1: because there are so many suffering out there. And we'll
Speaker 1: talk about the labor market in a moment, But is
Speaker 1: it the right thing to do just to send out
Speaker 1: once again and maybe give some targeted aid to airlines
Speaker 1: or whatever? You know, you know what targeted dates an
Speaker 1: important thing. I mean, I mean, what we know at
Speaker 1: the moment is that people who are especially struggling need help.
Speaker 1: I mean, I'm a labor economist. I have never seen
Speaker 1: this phenomenon which I've seen in the last month or two,
Speaker 1: which is all of a sudden, wage growth in a
Speaker 1: recession has gone from two percent to seven percent. Well,
Speaker 1: why is that wage growth is rising? Well, actually the
Speaker 1: reason is at the bottom fifteen percent of so of
Speaker 1: the wage distribution has dropped out. So it's like a
Speaker 1: baseball team's average improves because the two worst players drop out.
Speaker 1: I don't mean sucess. These people are worse, but these
Speaker 1: are these are people at the lower end with low earning.
Speaker 1: So so these folks have dropped out of the wage distribution.
Speaker 1: They need help to the economy. The great thing about
Speaker 1: these folks is if you give them money, they spend
Speaker 1: it and that has a very positive effect. So what's
Speaker 1: happening in the labor market, what's happening to people's consumption
Speaker 1: is a really big deal. Yeah, down the road, you
Speaker 1: probably want to ensure that there are airlines out there.
Speaker 1: I mean, it's a great phrase, you want to ensure
Speaker 1: the commanding heights of the economy. But I think you're right,
Speaker 1: we need to target it to people who have limited income.
Speaker 1: It's not big and they're not working. They're not out
Speaker 1: of work because they're lazy. They're out of work because
Speaker 1: there isn't demand for people. And especially the evidence this
Speaker 1: week is actually the job losses and the labor force
Speaker 1: drops have actually disproportionately hit women because you know, it's
Speaker 1: in the industries that they particularly working in restaurants and
Speaker 1: and so on. So so I think this is a
Speaker 1: really big deal. And it's interesting as a labor economist
Speaker 1: to watch people dizzering when they should be acting, that's
Speaker 1: for sure. And Danny a story that just came out,
Speaker 1: and because it's in your wheelhouse most recently, I do
Speaker 1: want to mention it Here, we've found out that the
Speaker 1: number of Americans dying from drug overdoses hit a record
Speaker 1: in the twelve month period ending March seventy almost seventy
Speaker 1: four thousand drug overdose deaths reporting in the twelve months
Speaker 1: through March, and they increased significantly at the start of
Speaker 1: the pandemic. And I know that you've written a lot
Speaker 1: about this, Yes, so of say you know that there's
Speaker 1: I mean, we're not we know this. They're suffering out there, Danny.
Speaker 1: What happens with the labor market. Let's say that stimulus
Speaker 1: is stalled for now and right, well, I mean we've
Speaker 1: done a lot of work, and Case and Deaton have
Speaker 1: done all this work. And what they call death of despair,
Speaker 1: I've been writing about distress. Well, let's just connect all
Speaker 1: of this together. That the deaths of despair and overdose
Speaker 1: death disproportionately occur amongst prime age less educated white were
Speaker 1: more increasingly amongst minorities, but particularly amongst that group. So
Speaker 1: distress is that which is the group that's crying out
Speaker 1: for help, um, the prime age less educate particularly you
Speaker 1: look who's going to Trump rallies. These folks are have
Speaker 1: been left behind and are hurting, and no other country
Speaker 1: in the world has an opioid epidemic like this. No
Speaker 1: other country has had this huge set of prescriptions from
Speaker 1: doctors of opioids that really haven't worked. And the crucial
Speaker 1: thing to look back and now at is that America
Speaker 1: has a crisis of pain. So even though these opioids
Speaker 1: have been prescribed, they don't work, they don't solve pain.
Speaker 1: So Americans are in pain. One in four visits to
Speaker 1: a doctor people report they're in chronic pain. And that's
Speaker 1: before the COVID virus hit. So there's vulnerable people, vulnerable communities,
Speaker 1: and we have issues of suicide and overdoses. What are
Speaker 1: people doing? I mean, we need money to help communities.
Speaker 1: And what's happened in the last decade with lots of
Speaker 1: spending cups in in in public spending cups, we made
Speaker 1: communities vulnerable and these folks have nowhere to turn. So
Speaker 1: I think this is really terrible. American needs to try
Speaker 1: and understand this in a state of where where Dartmouth is,
Speaker 1: New Hampshire is one of these states which has unbelievably
Speaker 1: high opioid death rates. So this is something I think
Speaker 1: that the American public needs to be aware of seventy
Speaker 1: people dying from opioid overdoses. I mean there's others dying
Speaker 1: from drug overdoses and suicides. So so this is a
Speaker 1: real crisis that we're doing nothing about, and a stimulus
Speaker 1: should focus on that, should focus on communities, to focus
Speaker 1: on trying to help mental health. And the idea that
Speaker 1: you would remove healthcare for people who are hurting not
Speaker 1: just physically, not just from COVID, but from from this
Speaker 1: deep mental health crisis is hard to understand. Well, there's
Speaker 1: a lot that's hard to understand about the current environment, Danny.
Speaker 1: Let me ask you in the just little literally thirty
Speaker 1: seconds that we've left. Unfortunately Boris Johnson, I mean, what's
Speaker 1: his plan? Does he have one? No, hasn't got a plan.
Speaker 1: I mean the cabinet is actually the cabinet of incompetence.
Speaker 1: They're actually there because they all have views about Brexit,
Speaker 1: but not not actually very competent. We're seeing disarray. I
Speaker 1: mean even before COVID, I think I said on to
Speaker 1: you and many times on Blumber, these guys don't know
Speaker 1: what they're doing. Continuously mug by reality. They're supposed to
Speaker 1: have a plan out there tomorrow, and the only I
Speaker 1: think the only question now is how big an impact
Speaker 1: is this going to be? And we had a poll
Speaker 1: out yesterday which now says that fifty eight percent of
Speaker 1: if the Scotts want independence, So it's splitting the community islands.
Speaker 1: It's upset. It's just a disaster. Danny, thank you again.
Speaker 1: We'll have you on again soon to talk more about this.
Speaker 1: Dannie Blanche for our leading neighbor economist of course at
Speaker 1: Dartmouth College, professor and former bo E policymaker. Let's get
Speaker 1: an opinion now on some retail with Sarah Holzag, numer
Speaker 1: Opinion consumer columnist. Sarah, we're in the middle of Amazon
Speaker 1: Primes festivities. Let's put it that way. It started as
Speaker 1: Prime Day and now it really is Prime Days. So
Speaker 1: over several days, Amazon gives out deals. How is it
Speaker 1: going this year? So we don't have any information from
Speaker 1: Amazon yet on how is this on how it's going,
Speaker 1: but indications are people are participating in large numbers. Some
Speaker 1: third party data suggest that the hit items so far
Speaker 1: are Amazon's own items, So it's Echo Dot smart speaker,
Speaker 1: fire TV sticks, and Amazon gift cards. Yeah, no surprise
Speaker 1: because those seem to be the products that Amazon pushes
Speaker 1: all the time. You know, I spend a little bit
Speaker 1: of time every now and then on Amazon's website, and
Speaker 1: even when you watch a Prime video, the ads in
Speaker 1: the video are for Amazon products. I guess it's it's
Speaker 1: not illegal, and why wouldn't Amazon do it? But does
Speaker 1: it to suggest that customers are just being pushed towards
Speaker 1: certain items that you know, they're not chopping maybe as
Speaker 1: discerning lee as they would otherwise. I mean, Amazon does
Speaker 1: certainly give really permanent play to these devices on its
Speaker 1: home page, and you can see the reasons why they
Speaker 1: would do that. It's all part of creating this very
Speaker 1: sticky ecosystem where consumers have Amazon in all different parts
Speaker 1: of their lives. So perhaps if you buy a Fire
Speaker 1: TV stick, you're more likely to watch Amazon's video streaming programming.
Speaker 1: Then your Prime membership feels more valuable to you, and
Speaker 1: you're likely to redo it next year, and the fly
Speaker 1: wheel kind of keeps going in that way. Um So
Speaker 1: that's clearly a big reason I Amazon is pushing those
Speaker 1: products today and will continue to do so throughout the
Speaker 1: holiday season. It doesn't even seem that long ago when
Speaker 1: analysts were speculating if Amazon would start its own sort
Speaker 1: of in house brand, remember, and now suddenly it's all Amazon.
Speaker 1: The other thing is that many of these products are
Speaker 1: fulfilled by Do we know what kind of margin Amazon
Speaker 1: gets on the products that are fulfilled by other merchants.
Speaker 1: I think some of that is not terribly clear, but
Speaker 1: I think that you know, marketplace orders are clearly a
Speaker 1: big part of this as well. Uh. They really tried
Speaker 1: to make a big push this year in their press
Speaker 1: release and such, emphasizing that small businesses we're going to
Speaker 1: be uh you know, part of Amazon Prime Day, and
Speaker 1: that they were going to try to create certain incentives.
Speaker 1: I think some sort of like ten dollar credit or
Speaker 1: something if he spent with a small business on Amazon
Speaker 1: Prime Day. So trying to make this a rewarding day
Speaker 1: in some ways for folks who use their film, that
Speaker 1: services and such too. You point out a great insight
Speaker 1: in today's column. Prime Day is a bigger threat than
Speaker 1: ever for rivals, and I'd urge everybody to read it
Speaker 1: that this year, you know, well we usually see Prime
Speaker 1: Day in July. This year Amazon is using it as
Speaker 1: a sort of a holiday kickoff retail extravaganza. I mean,
Speaker 1: we're pretty much passed back to school, or maybe we're
Speaker 1: right in the middle of it. But Amazon certainly trying
Speaker 1: to take advantage of the calendar this year too, Yes,
Speaker 1: they are, and that could have really big implications for
Speaker 1: its competitors. So estimates are that Amazon is going to
Speaker 1: have about six billion in online sales take place on
Speaker 1: its website during Prime Day. For context, last year, on
Speaker 1: Black Friday, the entire retail industry so a seven point
Speaker 1: four billion dollars in online sales, and in a typical
Speaker 1: day during the holiday season, the entire retail industry sees
Speaker 1: about two point three billion dollars in online sales. So
Speaker 1: if Amazon rakes in six billion dollars in sales during
Speaker 1: this period, that certainly would seem to be changing the
Speaker 1: entire rhythm of the holiday season this year and pulling
Speaker 1: forwards some of those sales that would have happened on
Speaker 1: marquee days like Black Friday and Cyber Monday. You know,
Speaker 1: it's particularly sort of um something to see when you
Speaker 1: see on the other side of the ocean a sauce
Speaker 1: which started out a little bit like Amazon. It was
Speaker 1: as seen on screen, and it was where you went
Speaker 1: sort of to get your mail order a quick fix
Speaker 1: of clothing and other items. It could face a twenty
Speaker 1: five million pound hit from taras in the event of
Speaker 1: an odeal brexit. So obviously a sauce is not really
Speaker 1: a competitor to Amazon right now. It has other problems
Speaker 1: to worry about. What are the main competitors to Amazon?
Speaker 1: So Walmart and Target I think are the key ones.
Speaker 1: Both of them have really made major investments in their
Speaker 1: online infrastructure, expanding their assortment online and expanding their ability
Speaker 1: to get things to you quickly. I think that two
Speaker 1: days shipping promise used to be Amazon's key differentiator, and
Speaker 1: now a lot of items they're premising one day shipping.
Speaker 1: Walmart and Target are really racing to keep up with that.
Speaker 1: Um Also, Walmart and Target are really going big on
Speaker 1: curbside pickup, which Amazon crewy does not have as many
Speaker 1: outposts to be able to offer that, and a lot
Speaker 1: of shoppers really like curbside pickup and they can get
Speaker 1: the items same day and they in that way, you
Speaker 1: can get it more quickly than if they waited for
Speaker 1: it to come to their doorstep. So those are the
Speaker 1: folks that are going to be really trying to duke
Speaker 1: it out with the Amazon this holiday season most directly. Yeah,
Speaker 1: that data is proving a real eye opener, the curb
Speaker 1: side pick up part of things. I you know, not
Speaker 1: that I know anything, but I probably would have thought
Speaker 1: that it wouldn't be as popular as it is. But
Speaker 1: I guess for all the reasons you said, it is
Speaker 1: actually more popular than you might expect. Now, will Amazon
Speaker 1: ever upgrade it's consumer facing experience? I was looking to
Speaker 1: perhaps buy a gift card on Amazon the other day,
Speaker 1: and honestly, it was just it was really difficult to
Speaker 1: find how to how to do that. Now, maybe I'm
Speaker 1: just not computer savvy. It does seem that Amazon is
Speaker 1: not putting much into its consumer experience. I completely agree
Speaker 1: with that, Vonnie. To me, it's just such a strange
Speaker 1: thing that Amazon is the online drug or not that
Speaker 1: it is, and that its website is as hard to
Speaker 1: sort through as it is. I think what Amazon is
Speaker 1: really good at is when you know exactly what you want,
Speaker 1: when you just want to refill the same laundry detergent
Speaker 1: you always buy, or buy the same pack of diapers
Speaker 1: you always buy. Amazon makes it very easy to run
Speaker 1: an errand on the Internet. What Amazon is not good
Speaker 1: at is discovery type purchasing. So when you know you
Speaker 1: want addressed, but you don't know exactly which one do
Speaker 1: you want things? Do you want blue? Do you want long?
Speaker 1: Do you want short? It's not very good at that.
Speaker 1: You know you want earrings, but none exactly which ones.
Speaker 1: It's very very difficult place to that, and I think
Speaker 1: they have a lot of work to do to fix
Speaker 1: that experience. Sarah hol Zac always spot on our consumer
Speaker 1: reck opinion columnists, Thank you. President Trump. Speaking to the
Speaker 1: Economic Club of New York and various economic clubs across
Speaker 1: the dream, he had questioning from Cindy O'Connell of the
Speaker 1: Economic Club of Florida, David Rubinstein of d C, and
Speaker 1: Mike O'Neill of New York. We have Michael McKee with
Speaker 1: us now are chief correspondent for all things economic, both
Speaker 1: national and international, and Michael a very serious conversation here.
Speaker 1: The President putting out some ideas, a couple of inflammatory statements,
Speaker 1: like how a Joe Biden presidency would be a socialist
Speaker 1: dream in American nightmare. But at the end he was
Speaker 1: asked about things like infrastructure, stimulus, national debt. Did we
Speaker 1: hear anything new from the President? No, but we haven't
Speaker 1: been hearing much new from him throughout this campaign. It's
Speaker 1: he mostly talks about what happened in the previous three
Speaker 1: or four years, and he talks a lot about, of course,
Speaker 1: what happened out of the Obama administration. UM the questions
Speaker 1: he was asked about infrastructure spending, he didn't answer. He
Speaker 1: said what he always says about many different things, that
Speaker 1: he has a plan, but there's never any plan. They
Speaker 1: were coming close to a deal on infrastructure, at least
Speaker 1: Democrats in the House and the President when the President
Speaker 1: got upset with Nancy Pelosi and broke off the talks.
Speaker 1: And that was two years ago, and nothing's been done
Speaker 1: on infrastructure since. The House and Senate have a very
Speaker 1: big differences about how you would pay for infrastructure and
Speaker 1: how you'd structure the program. He said today the Wall
Speaker 1: is one of the biggest infrastructure projects. Ever, that's not true. Um.
Speaker 1: He did shut down the border under the guys of
Speaker 1: pandemic protection, so that part of what he said about
Speaker 1: the wall was correct. He was asked about the deficit
Speaker 1: and has somebody else says quite often about this. This
Speaker 1: is one of those um up is down down his
Speaker 1: up Trump statements. He said the deficit was falling and
Speaker 1: we were going to pay off interest costs and start
Speaker 1: paying down principle on the deficit before the pandemic hit.
Speaker 1: That's one hund degrees opposite from what was happening. The
Speaker 1: deficit was rising significantly be for the pandemic because of
Speaker 1: the tax cuts. So um, it's hard to know exactly
Speaker 1: what he was trying to do other than insult Joe
Speaker 1: Biden and stir up his base. Yes, absolutely, and I
Speaker 1: think that's probably what we can expect from him as
Speaker 1: we approach the election. Is only what three weeks left,
Speaker 1: and we're going to get you know, viewers questions, you know,
Speaker 1: at some point tomorrow night, um and tonight in fact,
Speaker 1: as we will be hearing a lot more from the
Speaker 1: president on economic matters and so on. But really nothing
Speaker 1: moves the needle until we get some more idea of
Speaker 1: what happens with stimulus. And certainly Nancy Polosi doesn't look
Speaker 1: like she's about too given to to President Tom's requests
Speaker 1: or whatever Republicans are requesting. Not that that's clear. Now. Well,
Speaker 1: even here's the thing. We have to remember that even
Speaker 1: if the Speaker of the House and the Secretary of
Speaker 1: the Treasury agree on some kind of deal, it would
Speaker 1: have to pass the Senate as well as the House.
Speaker 1: A number of House members have already suggested. House Democrats
Speaker 1: have suggested they would vote against it because they don't
Speaker 1: think it's big enough. And the question then becomes how
Speaker 1: many Republicans would vote for it. If it's not considered
Speaker 1: big enough, then in the Senate you don't have fifty
Speaker 1: senators who approve of it. The Democrats pretty united against it,
Speaker 1: and half of the Republican senators say they don't want
Speaker 1: to spend anything. So at this point, there's a lot
Speaker 1: of focus on Wall Street about the talks talks in
Speaker 1: quotation marks between Nancy Pelosi and Stephen Manuchen. But the
Speaker 1: odds of something actually happening, particularly before election day, are
Speaker 1: very very small. Yes, and for some reason, and she
Speaker 1: wasn't quite clear about it yesterday when she was speaking
Speaker 1: with wolf Blitzer. Non say, Pelosi is not willing to
Speaker 1: even consider this one point a trillion dollar stimulus. What
Speaker 1: is it in there? Michael? Can you decipher that she's
Speaker 1: so against She was actually quite angry with the two
Speaker 1: Democrats that said that they should be accepting this. H
Speaker 1: The part of the plan. Part of it is the
Speaker 1: way the money is distributed. Part of it is the
Speaker 1: amount of money for states and localities is not enough,
Speaker 1: they believe, And part of it, obviously is politics. They
Speaker 1: don't want to give Donald Trump any kind of victory
Speaker 1: before the election. You remember the last time when the
Speaker 1: Care's Act was passed and was going out for those
Speaker 1: who got it in check form, Trump held up distribution
Speaker 1: of the checks until he could have his name printed
Speaker 1: on it. And last thing Nancy Pelosi wants is for
Speaker 1: voters to be opening their mail the day before the
Speaker 1: election and seeing Donald Trump giving them two Yes, that
Speaker 1: is true, I'm sure, and also presumably that machine is
Speaker 1: up and running now, so there may not be so
Speaker 1: much of a delay this time around. But there is
Speaker 1: an argument to suggest that people need cash now, no
Speaker 1: matter how it comes and no matter who gets the credit,
Speaker 1: right Michael be Danny Blanchflower on earlier saying this country
Speaker 1: is in trouble. There is particularly because pore people are
Speaker 1: losing their jobs now as we're finding more companies go
Speaker 1: out of business, and the airlines are a perfect example,
Speaker 1: not going out of business, but laying off tens of
Speaker 1: thousands of people because they don't have any business to
Speaker 1: do at this point, and that was one of the
Speaker 1: hopes of the stimulus bills that they could get aid
Speaker 1: to the airlines in the short term. But another interesting
Speaker 1: statistic came out from the New York Fed yesterday. Of
Speaker 1: the people who got the stimulus checks the first time around,
Speaker 1: average of about dollars each either saved the money or
Speaker 1: paid down debt, and they have money in the bank.
Speaker 1: And so if this rebound continued to go faster than expected,
Speaker 1: we might have a tailwind and we might need less
Speaker 1: of the stimulus checks. I think the biggest difference now
Speaker 1: is that there are going to be people who didn't
Speaker 1: save or don't have the money, who are losing jobs
Speaker 1: permanently who may need something. Yeah. I found that phenomenal
Speaker 1: as well, when you consider just how many people are
Speaker 1: at food banks and food lines as well who were
Speaker 1: once you know, happily employed, or all of the people
Speaker 1: around Orlando that are living in motels because they lost
Speaker 1: their job at Disney, for example, and they have to
Speaker 1: move every two weeks otherwise they risk you know, uh,
Speaker 1: being a problem for the motel owner because after two
Speaker 1: weeks you can't you know, get evicted. Normally you have
Speaker 1: to go through the court process. I mean, there were
Speaker 1: in an array of stories out there about people suffering Michael.
Speaker 1: What should we be concentrating on over the next couple
Speaker 1: of days. It feels like Joe Biden needs to get
Speaker 1: more of an economic message out there. Actually, Biden probably
Speaker 1: needs to publicize it. Joe Biden, if you look on
Speaker 1: their website, has a very extensive economic plan that involves taxes, infrastructure, UM,
Speaker 1: various pandemic recovery ideas. And Donald Trump UM. And I'm
Speaker 1: not saying this to be part of Donald Trump has nothing.
Speaker 1: If you go to his website, there are literally no
Speaker 1: proposals for a second term, and so it's kind of
Speaker 1: hard to know, uh what he would do, and Biden
Speaker 1: perhaps wants to make that case a little bit more.
Speaker 1: Donald Trump talk today about UM Biden plans, but if
Speaker 1: you're not us, in his speech, he didn't say what
Speaker 1: he would do. He talked a lot about how bad
Speaker 1: the Biden and the Democrats are. And that's one of
Speaker 1: the problems people have suggested that we're seeing with Trump's
Speaker 1: poll numbers is that at this point he is talking
Speaker 1: about the previous four years and a lot of people
Speaker 1: didn't like what happened in the previous four years outside
Speaker 1: of the tax cut, and he's not talking about what
Speaker 1: happens in the next four years or even in the
Speaker 1: next year, and that makes it hard to make a
Speaker 1: case for your reelection. Yeah, it's it's it's a phenomenal
Speaker 1: time and and you know a lot of people pointing
Speaker 1: out now that if we don't get something before the election,
Speaker 1: it's going to be January before we're even able to
Speaker 1: do more stimulus. Michael, thank you. We really appreciate your
Speaker 1: input and listening to that for us. That's Michael McKee,
Speaker 1: International Economics and Policy correspondent. Thanks for listening to Boomberg
Speaker 1: Markets podcast. You can subscribe and listen to interviews at
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn,
Speaker 1: I'm on Twitter on equin and I'm Paul Sweeney. I'm
Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
Speaker 1: always catch us worldwide at Bloomberg Radio.