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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Joining

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Speaker 1: us now for an extending conversation on emerging markets. Slooping

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Speaker 1: Raman PIMCO ahead of emerging Markets are in credits and

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Speaker 1: so with us Catherine Man, City Global Chief Economists, So

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Speaker 1: thank you both for coming on living. When you look

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Speaker 1: at emerging markets overall lower for longer from central banks,

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Speaker 1: not only from the FED around the world, is this

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Speaker 1: a buying opportunity for emerging market credit? I think it's

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Speaker 1: a very constructive opportunity for for emerging markets right now,

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Speaker 1: the FED being on pause, being a lot more patient, China,

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Speaker 1: US paid deals more or less. Um seeing some resolution

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Speaker 1: or at least not tipping over into a leftail type

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Speaker 1: of risk is a very positive environment for for emerging markets,

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Speaker 1: and within that valuations are very cheap, so emerging market

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Speaker 1: critics look very attractive right now. Katherine Um In general, Um,

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Speaker 1: I would agree with your statement, But on the other hand,

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Speaker 1: I think that that the emerging market opportunities are very heterogeneous. Uh,

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Speaker 1: some emerging markets are not going to win, at least

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Speaker 1: in terms of the China deal that looks like it's

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Speaker 1: on the table, there's not going to be so not

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Speaker 1: everybody's going to win out of that. And so UM,

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Speaker 1: I think it bears a lot of consideration. Um which

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Speaker 1: emerging markets are more likely to be winners than others.

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Speaker 1: So Jimneal writing in projects syndicate on this as well,

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Speaker 1: the and eleven countries and that can I ask you, too,

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Speaker 1: grizzled pros, how do you pick the losers? I don't

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Speaker 1: want to figure out who the winners are? How do

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Speaker 1: I avoid the losers? Looping? How do you avoid the

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Speaker 1: losers in the in in e M. The losers are

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Speaker 1: going to be those countries which have very large dollar

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Speaker 1: financing needs with policy frameworks that are very fragile and

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Speaker 1: the ones that we've been talking about for several years

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Speaker 1: and that are coming coming to bear right now. Turkey

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Speaker 1: huge gross financing needs, not a very strong policy framework

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Speaker 1: that's clear transplant to investors, very vulnerable. Well, the delicacies

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Speaker 1: of this, doctor man, how does Turkey clear it's market

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Speaker 1: I mean a hyakeon basis you've got to go in socially, politically,

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Speaker 1: economically and clear the market out of the last number

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Speaker 1: of air to one years. How do they constructively do that?

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Speaker 1: There are a lot of challenges in Turkey. The finance

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Speaker 1: is set up in Turkish lyra and in US dollar.

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Speaker 1: Which do you approach first? I think there's just a

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Speaker 1: lot of challenges in Turkey. Okay, Actually I want to

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Speaker 1: talk a little bit about Sudan, so without talking specifically

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Speaker 1: about it's but it's very clear that if you're an

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Speaker 1: autocratic leader, you need to learn some lessons from the

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Speaker 1: toppling of the Sudanese president, which basically avoid a currency crisis. Right,

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Speaker 1: is that kind of you know A I don't know

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Speaker 1: if it's a warning shot for Mr mcduro. Look, I

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Speaker 1: think I think it's very hard to extrapolate because the

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Speaker 1: situations are quite quite different. But I think in general, um,

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Speaker 1: what you need to do when you're when you're facing

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Speaker 1: a population that's that's facing the kind of challenges that

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Speaker 1: Venezuela is is approaching itself with. It's really to take

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Speaker 1: a pragmatic approach. In Venezuela's case, oil production is plummeting.

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Speaker 1: It's well below one million barrels per day, which even

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Speaker 1: a year ago was unthinkable. As a government, they really

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Speaker 1: have to figure out a way to try and at

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Speaker 1: least stabilize that as a mean to gain dollars, Catherine,

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Speaker 1: when you look at it, if you're if you look

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Speaker 1: at emerging markets right, there are hotspots and if you

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Speaker 1: look at what happened in tween, it's like a lot

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Speaker 1: of idiosyncratic stories, but the overarching theme is one of

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Speaker 1: FED or is it something else? If you have trade wars,

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Speaker 1: how are these countries, these emerging markets actually affected and

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Speaker 1: do the benefits from the actually outweigh what we're seeing

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Speaker 1: with trade wars. I think you've got different countries that

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Speaker 1: for for whom the FED pause benefits them. But I

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Speaker 1: think it's very clear that the trade war is clearly

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Speaker 1: going to differentiate some countries from the others. UM to

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Speaker 1: the extent that China purchases things UH from the US

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Speaker 1: rather than purchasing them from other emerging markets, to the

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Speaker 1: extent that the deal unravels supply chains, it's very negative.

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Speaker 1: We can identify which emerging markets are more likely to

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Speaker 1: be affected. UM. You know that the top losers are Taiwan, Singapore,

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Speaker 1: and Korea. The actual the top winners end up being

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Speaker 1: Mexico and Canada. It's not emerging market, but it ends

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Speaker 1: up being a winner. So we also have to think

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Speaker 1: about trade diversion. Vietnam, for example, is a loser on

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Speaker 1: trade UH supply chains, but it's a winner on trade diversion.

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Speaker 1: So I think I agree with many of Catherine's points.

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Speaker 1: I think that a medium and long term on Nam.

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Speaker 1: In the near term both are positive, both the FED

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Speaker 1: and China um in terms of the some reconsidation with

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Speaker 1: with the trade war side. But in the longer term,

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Speaker 1: I think trade wars or some trade tensions between the

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Speaker 1: U S and China are likely to be there for

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Speaker 1: some time, not only because these issues are taken complex,

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Speaker 1: but also because there are political motivations on both sides.

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Speaker 1: And in the longer term, some emerging markets are going

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Speaker 1: to benefit and others less, So our job is to

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Speaker 1: try and figure out which ones are going to benefit disproportionately.

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Speaker 1: We are seeing some anecdotal evidence that FDI is coming

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Speaker 1: back to Mexico, even with the new government being a

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Speaker 1: lot more left the docrimen. Have you given up in

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Speaker 1: a multilateral world. I mean, it's a really important question.

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Speaker 1: We got to Irway and the GAT talks and WT

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Speaker 1: and all that is Catherine Man given up a multilateralism.

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Speaker 1: I have not given up on multilateralism as a principle,

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Speaker 1: but I think that if we it's very clear that

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Speaker 1: multilateralism and even by lateral deals have really fallen off

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Speaker 1: um and as a result, global integration has retreated. It's

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Speaker 1: not just that it's slowed down. In fact, if we

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Speaker 1: look back in ten years or so, even pre financial crisis,

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Speaker 1: the global financial crisis, um, global integration had already started

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Speaker 1: to slow down. And so you know, this is the

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Speaker 1: absence of not just multilateral but the absence of any

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Speaker 1: any forward momentum on trade deals, whether or not the UH,

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Speaker 1: the the t PP without the U S and maybe

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Speaker 1: the US kind of joining ex post might represent a

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Speaker 1: positive dimension. I mean, it could be the case that

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Speaker 1: that would have the foundation for a more superior strategy

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Speaker 1: on the counter For that, of course, is US China

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Speaker 1: bilateral shopping list luc And if you look at trade

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Speaker 1: between you know, the Southeast Asian economies, is that increasing

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Speaker 1: and and does that mean that actually that region as

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Speaker 1: long as China either stays put or you know, it

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Speaker 1: doesn't fall off a cliff. Does it mean that you

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Speaker 1: see up tunities there? Absolutely? And I think that that's

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Speaker 1: one of the key things that we're seeing over the

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Speaker 1: last say ten years that intra em trade has increased,

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Speaker 1: and it's not just a function of what's happening with

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Speaker 1: the global production platform with with China, and I do

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Speaker 1: expect that to continue as long as we don't get

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Speaker 1: a bare landing in Chinese. Loup and Roman with us

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Speaker 1: with PIMCO, and we're thrilled the Catherine Man of City

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Speaker 1: Group is with us as well. The former head of

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Speaker 1: O E c D. Within the capitalism of the moment

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Speaker 1: uber and the finance and all that, there is still

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Speaker 1: economics being committed with us, Adam Posen of the Peterson Institute.

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Speaker 1: It was just wonderful on a holistic deal. Adam, guess

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Speaker 1: what that doesn't matter. What matters is John Farroll is

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Speaker 1: hours away from his property the real yield, which means

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Speaker 1: we need to take it bon tech. What does it

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Speaker 1: mean to Adam posing that the view out five years

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Speaker 1: and then five years forward from there. In Europe, inflation

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Speaker 1: in Europe, interest rates is plunging, not so much the

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Speaker 1: low interest rates scene, but the vector towards low interest

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Speaker 1: rates is stunning in Europe, isn't it. Atom, It is

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Speaker 1: probably the most scary thing any of us have seen. Tom.

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Speaker 1: I don't think we've ever seen anything quite this scary.

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Speaker 1: I don't mean to exaggerate, but this is about the

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Speaker 1: scariest development in bond markets because it's Japanification in an

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Speaker 1: area that should have been able to avoid it. The

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Speaker 1: rate of change, in effect was interesting folks in the

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Speaker 1: bank here and the other day to hear the leader

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Speaker 1: of Goldman Sex talking about the second and third derivative

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Speaker 1: and there's a pun there, and that the third derivative

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Speaker 1: is sort of a cosmic pixie dust of everything else

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Speaker 1: that's going on and the three dimensional space atom, what's

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Speaker 1: the why of this rate of change towards low interest

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Speaker 1: rates combination of the lack of investment ability and the

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Speaker 1: lack of government ability. We're just fundamentally losing faith in

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Speaker 1: the future in Europe, which is terrifying. We're okay to

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Speaker 1: a nominal GDP of two percent, and so we got

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Speaker 1: limited population growth. Everybody writes about Italy, etcetera. But is

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Speaker 1: it innovation? Is it? Is it a bank system is

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Speaker 1: John and I have covered so much. It's just completely

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Speaker 1: rigid and as unable to clear is JP Morgan and

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Speaker 1: others cleared in America. You're right that the banking system

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Speaker 1: is a big part of the problem, but it's not

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Speaker 1: the main driver. The main driver here isn't even innovation, Tom,

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Speaker 1: It's the inability to get innovation implemented in the economy,

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Speaker 1: the inability to make the changes that allow for productivity growth.

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Speaker 1: How do they do that? I mean, I know the

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Speaker 1: French I've been a full disclosure folks, the French government,

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Speaker 1: colst Happen. Would you come have a beverage of your choice?

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Speaker 1: Excuse me to talk about innovation around parasoled by CDG

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Speaker 1: and the rest. How do you affect how do you

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Speaker 1: commit Silicon Valley to a European society? Again, it's not

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Speaker 1: about the original innovation, Tom, I'm sorry, it's Silicon valleys

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Speaker 1: a godsend. But that's only one place which you can emulate.

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Speaker 1: Is the multi year advantages of becoming more efficient, of

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Speaker 1: allowing services, of consolidating the banking sector, of putting more

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Speaker 1: waybar market flexibility and in a good sense of doing

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Speaker 1: the public investment which is so lacking in Germany and elsewhere.

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Speaker 1: It's not about the innovative companies. It's about the flexibility

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Speaker 1: economy as a whole, and yet so far Outam, they

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Speaker 1: just haven't displayed the willingness to do these things to

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Speaker 1: the degree that it needs to be done. I'm just

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Speaker 1: wondering outside of Europe externally, the external forces, whether a

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Speaker 1: lot of the problems at the moment of being exported

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Speaker 1: by China. To what degree is that true, Adam, I

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Speaker 1: think that's much less true than it was ten or

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Speaker 1: fifteen years interesting because I think China is of course

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Speaker 1: much bigger now, but it's also much more advanced, and

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Speaker 1: its wages have come up a lot, and it's in

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Speaker 1: balance trade with the world, although not with the US,

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Speaker 1: and it's not manipulating the currency, and it's trying to

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Speaker 1: maintain a stable economy. So for all those reasons, it's

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Speaker 1: not like in the early days of China entering the

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Speaker 1: world system, where they were manipulating the currency, playing with

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Speaker 1: very low wage wage production. In the end, I mean,

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Speaker 1: there are still issues with China, but I don't think

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Speaker 1: you can blame this on China. This is something technological

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Speaker 1: or indigenous to the rich countries. Whilst we're on the subject,

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Speaker 1: we would love your insight and what is happening with

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Speaker 1: China market participants every morning grappling as to whether we're

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Speaker 1: seeing any kind of signs of a bottoming out taking place.

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Speaker 1: This morning, export data looked okay, Import data looked a

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Speaker 1: little self than we had. Credit growth absolutely searching. Can

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Speaker 1: you get a clear read on that economy at the moment?

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Speaker 1: Clear read would be too much, But I think we

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Speaker 1: have a decent sense. As my colleague Nicolarity has argued,

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Speaker 1: and I agree, the floor under Chinese growth is sinking slowly,

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Speaker 1: but it is not as low as people think it is.

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Speaker 1: There's more support there and they're actually doing the stimulus

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Speaker 1: reasonably effectively this time. Oh, they're doing the stimulus effectively

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Speaker 1: this time. But is the underlying debt visible? And we

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Speaker 1: have Nick Lardy in with us recently, Thank you so

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Speaker 1: much for that, Adam as his agent. But but but

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Speaker 1: is there is there a visibility to their non visible

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Speaker 1: government run banking. Not so much the banking, it's the

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Speaker 1: visibility is to their very visible, totally useless government run

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Speaker 1: s o s and backwards sectors. Yeah, that part if

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Speaker 1: the economy which she is making that that part of

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Speaker 1: the economy grow. That's the visible part dragging it down. Okay,

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Speaker 1: not enough time to Adam posing, Thank you so much

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Speaker 1: and as always for all of us a team surveillance.

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Speaker 1: Thank you so much. Adam for thanks and John Farrow

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Speaker 1: in the freezing cold of Italy, Adam pose and braved

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Speaker 1: and talk to our say it was it was Jo dropping.

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Speaker 1: It's not as like Utah. Let's bring in Chris Wagen.

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Speaker 1: Shall we share of whale and Global advices? He joins

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Speaker 1: us now to run through the bank and it's Chris.

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Speaker 1: The challenge for Wall Street in nineteen what is it?

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Speaker 1: Rising funding costs after the crisis of FED pushed down

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Speaker 1: funding and earnings fell more slowly, so it increases that

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Speaker 1: interest margin. Now we're doing the opposite. Funding costs for

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Speaker 1: JP we're up seventy year over year. Interest earnings were

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Speaker 1: up about and this is typical throughout the industry. It's

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Speaker 1: been about a four to one ratio for the last

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Speaker 1: three years. And I've been telling my clients that NIM

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Speaker 1: is going to flatten out after the first quarter of

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Speaker 1: this year and then it's going to go down slightly.

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Speaker 1: And that's not going to be well received. Well, let's

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Speaker 1: talk about evaluation. The price of the story at the moment.

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Speaker 1: You know, the bulls would say a lot of that,

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Speaker 1: Chris is already in the price. These valuations are so attractive.

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Speaker 1: Why is that a value trap? I don't think it's

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Speaker 1: a value trap. At one point three one point four

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Speaker 1: times book, JP, Morgan's fairly valued given its performance. You know,

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Speaker 1: Wells is still a better performer dollar for dollar of assets,

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Speaker 1: and it used to be close to two times book.

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Speaker 1: I've actually been speaking very constructively about Wells. But the

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Speaker 1: problem is you're gonna have to wait three or four

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Speaker 1: years for them to get out of the penalty box

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Speaker 1: unless the management picks up the pace a bit. Right.

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Speaker 1: It's a it's a study in terms of not reacting

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Speaker 1: uh to regulators, and it's it's striking because Wells used

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Speaker 1: to be the perfect big bait. They were the leader

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Speaker 1: of the top four review Chris Whalen the geniosity of

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Speaker 1: a few years after the crisis, where Whalen said, by preferreds, yes,

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Speaker 1: the big coupon. Is that still valid today? Or are

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Speaker 1: you a common stock guy this morning? Oh? I love

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Speaker 1: the preferreds. Tom. There's some high coupon perpetual preferreds out

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Speaker 1: there at it will never be called They're part of

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Speaker 1: the capital structure of these banks. I own US Bank

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Speaker 1: UH preferreds. I traded out of most of my real

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Speaker 1: estate exposure at the end of last year, and the

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Speaker 1: banks traded off in December, and I backed up the

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Speaker 1: truck because you know, for me, they are the best

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Speaker 1: performing large bank in the US. Are the smallest of

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Speaker 1: the top five, but they're the most by far and

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Speaker 1: away the most efficient of the money center banks. Let's

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Speaker 1: stop things right now and say to Chris Whalen, what's

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Speaker 1: a coupon you pick up on a US Bank preferred

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Speaker 1: Roughly five and a half so you're picking up five

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Speaker 1: and a half percent two times or more of a

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Speaker 1: U S Treasury. And then you wait, what do you

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Speaker 1: give up on equity on the upside, given that the

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Speaker 1: common stock lives as well well, I own a little

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Speaker 1: bit of the common But these are low beta stocks, tom,

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Speaker 1: these are one one point to beta stocks. You want excitement,

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Speaker 1: you buy Bank of the Ozarks. Well, let's talk about that.

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Speaker 1: Let's talk about the Bates. Wait wait wait wait wait wait, Chris,

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Speaker 1: wait wait wait, John, do you know where the Ozarks

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Speaker 1: are come on, give me a breakfast. I don't know

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Speaker 1: if and they stumbled. A lot of people are waiting

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Speaker 1: for them to recover that two times book value multiple.

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Speaker 1: But you know, City City is the bottom of the

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Speaker 1: top four. They trade below book. Why some prime consumer lending? Uh,

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Speaker 1: same as capital one. They will always trade a little

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Speaker 1: below book. Can we talk about the baits of these

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Speaker 1: equities and how much that's changed in the last ten years.

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Speaker 1: How much has that shifted to what degree it shifts

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Speaker 1: in a basically on an idiosyncratic basis, given what's going

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Speaker 1: on with the particular name. Some of them are very boring,

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Speaker 1: very stable, But then you had Bank America two years

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Speaker 1: ago galloping along that got their beta up a lot.

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Speaker 1: Now it's calmed down again. I just hear people tell

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Speaker 1: me again and again and again on the credit side,

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Speaker 1: by the credit done by the equity. That's what I

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Speaker 1: keep hearing, Chris, and I keep hearing it from you

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Speaker 1: as well. And I'm just wondering why these companies have

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Speaker 1: changed so much. It's not that they've changed so much,

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Speaker 1: it's we're in a permanent or on my permanent low

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Speaker 1: rate environment. You know, three in a quarter maybe the

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Speaker 1: top for the ten year note for years. So you know,

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Speaker 1: when you factor that into the equation, I think it

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Speaker 1: it makes some of these opportunities look much better. Chase,

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Speaker 1: you've authored this, You've done a spectacular one volume on

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Speaker 1: the financial history of the nation, etcetera, etcetera. Just for

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Speaker 1: our audience, what was different about seven guys standing up

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Speaker 1: doing an oath to Maxine Waters this time around versus

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Speaker 1: the sire we saw a decade ago. Uh, not a

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Speaker 1: great deal. It's mostly politics. I agree, not a great

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Speaker 1: deal is the most the message look Teddy Roosevelt used

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Speaker 1: to rail against big banks too. It's good politics. Um,

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Speaker 1: you know the hearings in the twenties and the thirties

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Speaker 1: the same way. Uh, it's it's just part of the

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Speaker 1: I think populist tendency in American politics to go after

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Speaker 1: big things. Whether it's a big aircraft manufacturer, big bank,

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Speaker 1: it's big and we don't like it. The banks on

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Speaker 1: their own, no, they're very owned. On the institutional side,

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Speaker 1: I think individuals fled the banks. I'm not sure that

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Speaker 1: they're ready to come back. I think most individuals are

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Speaker 1: happier to do the kind of trade I've been doing,

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Speaker 1: which was to buy the preferred which is basically a bond.

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Speaker 1: So Chris, essentially what you're saying is you're not bullish

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Speaker 1: growth for these banks at all. I mean, I look

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Speaker 1: at this quote from JP Morgan had this morning that

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Speaker 1: interest income up eight percent, predominantly driven by the impact

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Speaker 1: of higher rates. And I've been talking about this the

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Speaker 1: last couple of days. The truth is the yield curve

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Speaker 1: has actually meant relatively little for US banks this cycle.

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Speaker 1: Fee based revenue has been great. We've had zero interest deposits,

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Speaker 1: which meant essentially it doesn't matter what the yield curve

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Speaker 1: looks like. What ultimately matters is the trajectory for interest rates. Now.

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Speaker 1: If interest rates aren't going to go up anymore, and

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Speaker 1: it's as you say, if Larry Cudlow's right and rates

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Speaker 1: aren't going up anytime soon, maybe not in his lifetime,

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Speaker 1: funding costs are going to be going up structurally. So

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Speaker 1: if it's not a volume story, where's the growth coming from?

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Speaker 1: Because it hasn't been a volume story. No, it hasn't

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Speaker 1: an Unfortunately, the flip side of the gift from the

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Speaker 1: FED after the crisis is that they've essentially capt returns.

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Speaker 1: It's very hard for banks to raise spreads on loans

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Speaker 1: right now because they're competing, especially big banks with private

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Speaker 1: equity funds and pension funds who all want the same

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Speaker 1: big assets. If you go down a notch to be

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Speaker 1: BT in Regions and sun Trust, they have much better

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Speaker 1: pricing on their loan book. It's a point point in

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Speaker 1: a quarter in some cases. So that to me is

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Speaker 1: the dilemma for the larger banks is that they're hunting

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Speaker 1: for big animals and to get them they have to

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Speaker 1: fight off the other lines. Chris, great to see it,

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Speaker 1: Chris Global Advisors on the lightest bank acounties. Now we

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Speaker 1: speak to a different kind of Democrat, and I'm very

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Speaker 1: guilty this. Adrian l Rod with us, of course, to

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Speaker 1: say Democratic strategist barely describes her contribution to Arkansas in Midwest.

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Speaker 1: I'm gonna say, in southern Democratic Party affairs, the names

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Speaker 1: are really important. Working with mic Ross Arkansas, lamp Set

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Speaker 1: of Texas, Klient of Florida, and on and on. Adrian,

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Speaker 1: We're thrilled to have you with us to talk about

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Speaker 1: the progressive shift in the party. Have you great over this? Yeah,

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Speaker 1: you know, I think it's a little overplayed. I mean,

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Speaker 1: there are some vocal voices obviously aoc um. You know,

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Speaker 1: some some individuals in the party who are a little

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Speaker 1: bit more outspoken, who are getting more traction and speak

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Speaker 1: about policies. But when you look at you know, when

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Speaker 1: you take away Twitter, when you take away social social media,

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Speaker 1: and you look at what Americans really want, a lot

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Speaker 1: of people, especially in the Democratic Party, are very moderate.

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Speaker 1: They don't want to see all these extreme policies take place.

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Speaker 1: They just want to be Donald Trump. Do you suggest

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Speaker 1: that the leadership, and particularly the House leadershipship and Senator

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Speaker 1: Schumer could drag the party at some point back to

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Speaker 1: a more Adrian l Rod moderation or is this going

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Speaker 1: to be a real challenge? Yeah, you know, And I

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Speaker 1: think that's why having experienced the leadership both and Senator

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Speaker 1: Schumer as as a minority leader, and of course Nancy

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Speaker 1: Pelosi as Speaker of the House is so important right

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Speaker 1: now because the two of them are really able to

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Speaker 1: take their caucus holistically and move them back to a

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Speaker 1: place that makes sense. But look, you know, Congress has

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Speaker 1: the authority, of course to legislate, and they are trying

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Speaker 1: to get some of these kitchen table issues passed, like

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Speaker 1: prescription lowering prescription drugs costs, addressing the high costs of healthcare, UM,

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Speaker 1: you know, dealing with the opioid addiction. You know, there

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Speaker 1: are some of those major issues that Democrats actually voted

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Speaker 1: on um other Democrats to essentially went back to House.

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Speaker 1: This is what if the American people want go on

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Speaker 1: slip side. You've got that this running for the presidency

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Speaker 1: who are really trying to appeal to that left wing

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Speaker 1: of the party. And I think what you'll see, especially

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Speaker 1: when that first debate starts at the end of June,

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Speaker 1: I think you will see a real policy debate about

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Speaker 1: the issues in the direction of our country and how

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Speaker 1: to get there, while also seeing, you know, over the

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Speaker 1: course of time, the party start sort of start to

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Speaker 1: shift back to such a to a more moderate place. Okay,

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Speaker 1: I'm counting right now, seventeen perhaps eighteen Democratic candidates. You

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Speaker 1: talk about the first debate, Lisa, I am officially not

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Speaker 1: announcing no, but but here's here's my question. I mean,

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Speaker 1: we're just looking at a circular firing squad. No, No,

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Speaker 1: we're not at all. I mean, look, I can understand

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Speaker 1: why a lot of people want to jump into this race,

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Speaker 1: because there is so much at stake, I mean, there

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Speaker 1: are a lot of stake in sixteen, but now that

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Speaker 1: the American people have had over two years of Donald Trump,

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Speaker 1: there's even more at stake in twenty twenty. So there's

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Speaker 1: seeing a lot of folks, you know, jump into the

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Speaker 1: rings where they're hat in. I think the real question become,

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Speaker 1: you know, number one, who is still in the race

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Speaker 1: after Labor Day? Because if somebody can't raise the money

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Speaker 1: to stay in the race, and if somebody certainly can't

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Speaker 1: raise the money in grassroots dollar donations in order to

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Speaker 1: keep qualifying for the debate stage, but what's the point

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Speaker 1: of staying in the race? Right? Secondly, the question next

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Speaker 1: question becomes who's in the race by the time the

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Speaker 1: Iowa caucus has roll around in early February. So I

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Speaker 1: think you're gonna see a lot of people start to

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Speaker 1: drop out. So what's your best guess? Who are going

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Speaker 1: to be the front runners here? Well, I think we're

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Speaker 1: already starting to see that emerge. Obviously, if Joe Biden runs,

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Speaker 1: he's just front runner. Bernie Standers right now is the

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Speaker 1: de facto front runner we're seeing in the polls of

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Speaker 1: all the people who are running at this point, who

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Speaker 1: have announced he is the front runner, um mayor Pete.

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Speaker 1: He's had a breakthrough moment. The question is can somebody

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Speaker 1: like him sustain his his pace right now once the

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Speaker 1: debate stage starts. I think somebody like Kamala at this

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Speaker 1: point has shown that she's got the most staying power,

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Speaker 1: She's able to build the strongest coalition. Um. I think

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Speaker 1: the map favors her her of course, a California being

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Speaker 1: on Super Tuesday, right right after South Carolina. UM So,

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Speaker 1: you know, but look, I think we're gonna see a

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Speaker 1: couple of other people emerged too. I think if Terry

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Speaker 1: mccollov gets in, he's going to have a really strong

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Speaker 1: appeal to that moderate wing of the party that the

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Speaker 1: two of you were just talking about. UM. So, it's

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Speaker 1: gonna be really interesting to see how to play out.

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Speaker 1: I got eight team more questions. You don't a time, Adrian,

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Speaker 1: l Rod don't be a stranger with l Rod strategies.

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Speaker 1: She promises to come back with Lisa Brandwoods runs for

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Speaker 1: president whichever party as all, Adrian, thank you thanks for

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Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to

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Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

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Speaker 1: I'm on Twitter at Tom Keane Before the podcast. You

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Speaker 1: can always catch us worldwide. I'm Bloomberg Radio