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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Bramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg P M L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. The

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Speaker 1: knee jerk reaction is gridlock is good for risk assets?

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Speaker 1: Is that the right reaction? Leo Groshowski, now joining US

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Speaker 1: chief investment Officer at bny Melon Wealth Management, what's your

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Speaker 1: take on that? Well, I think today we're seeing a

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Speaker 1: relief Rallie and most participants in the markets are aware

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Speaker 1: that UM, a Republican president combined with a divided Congress

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Speaker 1: isn't a bad combination for future market performance. It's not,

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Speaker 1: in a certainly the best, but it's by no means

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Speaker 1: the worst. So I think we're seeing that today. There's

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Speaker 1: obviously a relief that it's behind us. We've got some

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Speaker 1: certainty and UM, and again, most market participants know that

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Speaker 1: we're in a period both seasonally and for the next

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Speaker 1: couple of years that's normally pretty favorable for the equity market.

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Speaker 1: Do you see any risk to the tax overhaul that

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Speaker 1: past last year, not with the gains that the Republicans

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Speaker 1: picked up in the in the Senate, And I think

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Speaker 1: the market you could see this a little bit in

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Speaker 1: the bond market today, right. I think this gridlock is

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Speaker 1: good is probably showing up as much in the bond

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Speaker 1: market as the stock market because of what you were

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Speaker 1: talking about in your earlier segment with respect to debt

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Speaker 1: and deficits. Right, the chances of tax cut two point

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Speaker 1: oh or significant significantly diminished, I think, and the bond

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Speaker 1: market doesn't mind that, right. I think it's it's stay

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Speaker 1: the course with the fiscal policy that's been put in place,

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Speaker 1: but don't necessarily add a lot more. Of course, we

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Speaker 1: did hear from Senate Majority Leader Mitch McConnell that they

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Speaker 1: might work across the aisle on infrastructure spending. Do you

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Speaker 1: think that's lip service at this point? I think that's

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Speaker 1: the big one of the two eyes, right, There's there's infrastructure,

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Speaker 1: and then there's going to be investigation. And I hope

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Speaker 1: there's more talk around infrastructure than there is around investigations.

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Speaker 1: I think the market would be favorably disposed to bar

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Speaker 1: bipartisan support for infrastructure, the market being equities bonds perhaps

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Speaker 1: not so much correct correct the I think two pims

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Speaker 1: earlier point. You know how we pay for all of

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Speaker 1: this with a trillion three about to be floated right

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Speaker 1: in in bond debt at higher prices. Um. I think

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Speaker 1: that's something the bond market right now is breathing a

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Speaker 1: bit of a cyber lead for the time being. Any

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Speaker 1: thoughts on trade policy because that seems to be one

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Speaker 1: issue which you could get Democrats and Republicans together and

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Speaker 1: a China bashing trade war that looks like something they

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Speaker 1: both agree on. Yeah, And I think the good news there,

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Speaker 1: pim is is the markets become more prepared for, you know,

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Speaker 1: a longer war of words on the trade front, so

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Speaker 1: that I would put in the positive surprise um um column.

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Speaker 1: And I also think there's gonna be a lot of

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Speaker 1: focus here towards the end of the month on the

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Speaker 1: G twenty, on the G twenty meeting. Um. So through

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Speaker 1: all this election, right the key drivers for the market, earnings,

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Speaker 1: interest rates, economy, no changes in the b n Y

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Speaker 1: melon view with respect to any of those, and the

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Speaker 1: serious issues that we have to grapple with trade and

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Speaker 1: monetary policy. Right, they're still they're still with us well,

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Speaker 1: which raises my question going back to the first question,

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Speaker 1: which is is the appropriate reaction to buy stocks here

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Speaker 1: if trade is still the potential concern, that's not something

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Speaker 1: that will get held up by gridlock. I think you're

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Speaker 1: seeing part of the relief rally is I think also

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Speaker 1: a return to a bounce from an oversold condition. I

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Speaker 1: think the market overreacted to fundamentals that really hadn't changed

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Speaker 1: that much. It was really just the focus on, you know,

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Speaker 1: the Fed policy and this longer lasting, you know trade.

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Speaker 1: I think the underlying market drop backdrop is still, in

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Speaker 1: my view, very equity friendly with respect to earnings, interest rates, inflation.

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Speaker 1: Trade is a cloud that continues to build the longer

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Speaker 1: it goes on, because I learned a long time ago

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Speaker 1: that longer lasting trade and tariffs have an S word

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Speaker 1: associate associated with them, and that's stagflation. And that's that's

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Speaker 1: an environment that the market likes least as far as

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Speaker 1: the outcome of the election, that's one thing, but we

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Speaker 1: still have all these unresolved issues to investors just kind

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Speaker 1: of shrug their shoulders. What's the biggest question You're getting

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Speaker 1: right now from investors. You know, we touched on it

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Speaker 1: a little bit earlier. UM, we're getting a lot of

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Speaker 1: questions around debt, debt and deficits. I think in the

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Speaker 1: wealth management business, you know, many of our clients are

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Speaker 1: correctly thinking in years, decades, multigenerational wealth transfer right and

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Speaker 1: so interest thing, as opposed to many market participants focusing

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Speaker 1: on day to day, week to week, quarter to quarter.

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Speaker 1: If you're really taking a multi year outlook, the debt

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Speaker 1: and deficit picture and how are we going to pay

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Speaker 1: for it and who's going to pay for it is

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Speaker 1: weighing I think more heavily on our client's minds correctly,

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Speaker 1: particularly given the uptick and interest rates. Thanks very much

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Speaker 1: for being with us. Always a pleasure, Leo Groshowski. He

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Speaker 1: is the chief investment officer for b n y Melon

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Speaker 1: Wealth Management. Giving us a take on the results of

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Speaker 1: the midterm elections and what it means for investors. We've

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Speaker 1: been listening to send a majority at leader at Mitch

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Speaker 1: McConnell address reporters today after the mid term elections, talking

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Speaker 1: about the potential for both parties to work together on

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Speaker 1: infrastructure spending, as well as tackling what he called the

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Speaker 1: healthcare crisis. Here with us to talk about what we

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Speaker 1: just heard and what it might mean for both sides

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Speaker 1: of Congress going forward. Steve Dennis joins US Now Center

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Speaker 1: reporter for Bloomberg News. Uh, Steve, what was your big

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Speaker 1: takeaway from that address? You know, I think that was

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Speaker 1: a very happy Mitch McConnell. There was a lot of

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Speaker 1: nervousness the last few weeks that the Democrats would be

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Speaker 1: able to maybe even pick up a seat or hold

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Speaker 1: serve and and and the fact that Republicans are now

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Speaker 1: looking to expand their majority by several seats is Uh,

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Speaker 1: it's huge for for everything that he cares about, but

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Speaker 1: especially the judiciary. If there's another Supreme Court opening, it's

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Speaker 1: gonna be a cakewalk. It's not going to be this

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Speaker 1: excruciating battle where Susan Collins and Lisa mckowski had to

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Speaker 1: be on board and and uh and his members got

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Speaker 1: beat up for months. Uh, you know, and so you know,

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Speaker 1: as far as actually the agenda, I thought it was

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Speaker 1: interesting he came out and said that he's all he

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Speaker 1: started discussing an infrastructure package with Nancy Pelosi, and he

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Speaker 1: also said prescription drugs might be an area where there

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Speaker 1: could be bipartisan agreement to save money. Now that's not

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Speaker 1: necessarily what you want to hear if you're in the

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Speaker 1: pharmaceutical industry. You know, they were pretty happy they knocked

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Speaker 1: off Claire McCaskill in Missouri. She had been a thorn

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Speaker 1: in the side of the big pharmaceutical companies. But you know,

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Speaker 1: we have a huge deficit issue. That's one thing that

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Speaker 1: he didn't doesn't think that there's gonna be much bipartisan

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Speaker 1: agreement on dealing with the deficit anytime soon. But if

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Speaker 1: there's one area where they seem to have both sides

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Speaker 1: saying we need to save some money for the taxpayers

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Speaker 1: and for people, it's gonna be prescription drugs. Um. So

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Speaker 1: it is a very happy miss McConnell. I mean, this

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Speaker 1: is this is about as good a result as you

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Speaker 1: could have mapped out with a president who is unpopular

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Speaker 1: enough to lose the House. You know, the fact that

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Speaker 1: they're winning, uh looks like you know, there's still some

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Speaker 1: votes out, and but they're winning Florida, they're winning Missouri big,

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Speaker 1: they're winning Indiana big, they're winning a North Dakota big.

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Speaker 1: These are not small victories. And if they hold on

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Speaker 1: on Arizona in Montana. Uh, and this Florida recount looks

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Speaker 1: like it's you know, Nelson's behind by forty votes. It's

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Speaker 1: not likely to to change this. This has long you know,

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Speaker 1: Miss McConnell is all about the long game. If they

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Speaker 1: actually get to fifty four fifty five seats, it's almost

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Speaker 1: impossible for the Democrats to come back and take back

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Speaker 1: the Senate in you know, even if they take the presidency,

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Speaker 1: Mitch McConnell might be staring right there preventing them from

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Speaker 1: doing all the stuff they want to do. Um, and

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Speaker 1: maybe even blocking Supreme Court justices that they want to

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Speaker 1: put up. So Uh, this is a this is a

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Speaker 1: very big, very happy Mitch McConnell. This morning, you mentioned

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Speaker 1: the deficit and infrastructure spending. How is anyone going to

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Speaker 1: pay for this? You know, that's always been the rub, right.

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Speaker 1: You know, every once in a while you can find

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Speaker 1: stuff under the cushions of your couch. Uh. You know,

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Speaker 1: I remember there's always ideas on infrastructure spending. Nobody ever

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Speaker 1: wants to raise the gas tax, right, I mean every

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Speaker 1: once in a while. I mean last year Trump said,

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Speaker 1: for a hot minute, said maybe he'd consider raising the

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Speaker 1: gas tax, but it's the most unpopular tax and generally

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Speaker 1: people don't want to raise taxes. So maybe you can

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Speaker 1: find things like oil drilling revenue, you know, uh, can

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Speaker 1: can you give Republicans something like energy resources or sailing

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Speaker 1: off land or something, and you give the Democrats what

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Speaker 1: they want, which is roads and bridges and transit and

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Speaker 1: and all that stuff. So, uh, you know, there there

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Speaker 1: are ways to reach these biparson deals if you don't

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Speaker 1: care about the deficit as well, you just do what

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Speaker 1: they've been doing the last two years. You know, the

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Speaker 1: deficit has been expanding dramatic medically under a Republican watch.

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Speaker 1: Part of it was the tax got a huge part

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Speaker 1: of it. Where these bipartisan spending deals where they basically

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Speaker 1: took out the credit card and said, we're going to

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Speaker 1: increase spending by a hundred and fifty billion a year,

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Speaker 1: and you know, our grandkids are gonna pay for it.

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Speaker 1: They didn't say, oh, here's our it's gonna get more

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Speaker 1: expensive because interest rates are going up. And and it's

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Speaker 1: gonna get more expensive because interest rates are going up.

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Speaker 1: You know, you could see where it's a very good chance,

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Speaker 1: especially if interest rates keep going up, uh that we're

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Speaker 1: gonna have a trillion dollar deficit this fiscal year and

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Speaker 1: one point one next fiscal year. And you know, voters

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Speaker 1: so far have not been willing to come in and say, hey,

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Speaker 1: we care about that issue. Good luck trying to find

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Speaker 1: that trillion dollars in the cushions of the couch. Thanks

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Speaker 1: very much, Stephen Dennis, congressional reporter for Bloomberg. Appreciate your work.

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Speaker 1: Looking forward to more. We are awaiting comments from President

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Speaker 1: Trump addressing the nation after the midterm election results. Rolled

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Speaker 1: in joining us now to talk about what we've been

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Speaker 1: seeing and what to expect from the speech. Billy House

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Speaker 1: joins is now congressional porter for Bloomberg, as well as

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Speaker 1: Tolu alorinipa White House correspondent for Bloomberg. We have both

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Speaker 1: of them in the flesh here in our eleven three

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Speaker 1: oh studios. It is very exciting. Billy. I want to

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Speaker 1: start with you, how long do you think this is

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Speaker 1: going to go? Because the last time President Trump held

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Speaker 1: a conference like this it went for more than an hour.

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Speaker 1: I suspect it's going to go fairly lengthy. He's got

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Speaker 1: a lot of things to say, including bashing already Democrats

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Speaker 1: for what he was describing as an intended reign of terror,

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Speaker 1: of investigations that'll take up a lot of time. Yeah,

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Speaker 1: alright to lou And the President likes to change the narrative.

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Speaker 1: The narrative right now is that he lost the House

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Speaker 1: and that he is seen as an unpopular president, and

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Speaker 1: this press conference is an opportunity for him to use

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Speaker 1: the bully pulpit of the White House, which he uses

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Speaker 1: on a regular basis, to change the story. He may

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Speaker 1: talk about the elections and try to put a positive

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Speaker 1: spin on it, but I would caution the listeners to

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Speaker 1: get ready for other topics to come up. He may

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Speaker 1: want to talk about North Korea. You may want to

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Speaker 1: talk about his weekend trip to Paris this weekend when

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Speaker 1: he's going to be meeting with Vladimir Putin. Possibly there

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Speaker 1: are a number of different issues that the President may

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Speaker 1: throw out there. He may talk about getting rid of

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Speaker 1: some cabinet officials or announced a new U n ambassador,

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Speaker 1: anything to change the story, change the narrative, get it

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Speaker 1: on a positive message for the president, and have fewer

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Speaker 1: people talking about all these investigations. It's the penis that

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Speaker 1: are going to be flying around because he lost the House. Billy,

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Speaker 1: what kind of issues do you think that House Democrats

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Speaker 1: can present to the President and to Republicans that they

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Speaker 1: would rather not be presented with that Republicans would not well, Uh,

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Speaker 1: Jerry's kind only a congressman from Northern Virginia whose chair

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Speaker 1: of the Subcommittee on Oversea Government Oversight, says it's going

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Speaker 1: to seem like Democrats are drunk crazy with subpoenas, but

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Speaker 1: he points out that that's in comparison to Republicans that

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Speaker 1: Democrats say basically gave the Trump administration a pass. So

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Speaker 1: everything from um Trump's border policies to his family financial

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Speaker 1: ties with Deutsche Bank to uh everything on immigration. Uh,

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Speaker 1: a whole gambit as Democrats take over all these committees

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Speaker 1: that have been from democ where Democrats been frustrated by

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Speaker 1: chairman Republican chairman refusing to issue any subpoenas on anything.

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Speaker 1: To Lou, I want to pick up on something that

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Speaker 1: you were just talking about, which is that right now,

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Speaker 1: the narrative is that this is a loss for President Trump.

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Speaker 1: Is that narrative correct? I mean, yes, the Democrats did

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Speaker 1: flip the House, but the Senate actually got even more

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Speaker 1: Republican majority, and this is really the outcome that people

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Speaker 1: had expected, if not, frankly a little bit better than

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Speaker 1: expected in the Senate for the Republicans. Now, yeah, this

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Speaker 1: was a mixed result in both sides have something that

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Speaker 1: they can capitalize on. And I think that's part of

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Speaker 1: the reason you're seeing the President come out and do

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Speaker 1: a press conference. He wants his narrative to get out there.

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Speaker 1: You're probably going to see more from the Democrats. Nancy

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Speaker 1: Pelosi will probably be doing a press conference of her

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Speaker 1: own where she gets out her narrative. But it's we

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Speaker 1: can't underestimate the impact of having the House flipped to

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Speaker 1: the Democrats, having Democrats in power in the House for

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Speaker 1: the first time in eight years, and all of the

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Speaker 1: various investigatory powers that they're they're going to have as

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Speaker 1: a result of having the chairmanships of various committees, having

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Speaker 1: the subpoena power, having the ability to call Cabinet secretaries

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Speaker 1: up before Capitol Hill and change the narrative and dominate

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Speaker 1: the media with that subpoena power, and with that ability

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Speaker 1: to u change the national conversation. It's something Democrats did

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Speaker 1: not have when they were out in the wilderness. They

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Speaker 1: were in the minority in the House and the Senate

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Speaker 1: and the governor's races. Now that they have won a

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Speaker 1: number of these races in the House, they have much

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Speaker 1: more power to shape the national narrative. And that's probably

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Speaker 1: what we're going to see later today with this, with

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Speaker 1: these dueling news conferences, Billy, the narrative, though having to

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Speaker 1: do with judicial appointments, doesn't seem to have changed. Indeed,

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Speaker 1: we spoke earlier with Steven Dennis of Bloomberg and he said,

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Speaker 1: it's like it's it's possible that you can get Mitch McConnell.

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Speaker 1: He'll be he could be standing up there in five

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Speaker 1: years saying the same thing about other Supreme Court or

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Speaker 1: appointees to the federal bench. Absolutely. Uh. And so while

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Speaker 1: that uh will likely be continued winds in the views

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Speaker 1: of many Republicans, UH, they will cast what the House

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Speaker 1: Democrats are doing is harassment of the administration. Talu. I

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Speaker 1: wouldn't just zoom out a little bit and talk about

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Speaker 1: what sort of message the Democratic Party can take from

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Speaker 1: this election, because frankly, it showed that there wasn't really

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Speaker 1: as big of a blue wave as many people had expected,

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Speaker 1: and that just sort of hatred for Donald Trump among

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Speaker 1: people who swing left wasn't enough to give them a

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Speaker 1: majority in both how both sides of Congress. I'm just

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Speaker 1: wondering what does this say for who people will look

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Speaker 1: to pick for the presidential election. Yeah, there's a lot

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Speaker 1: of the Democrats are going to have to do a

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Speaker 1: lot of soul searching, in part because they put out

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Speaker 1: a number of different types of candidates, diverse candidates, progressive candidates,

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Speaker 1: more moderate candidates, and it's hard to really get a

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Speaker 1: clear message in terms of who one. We did see

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Speaker 1: some of the progressive candidates win, but not a large

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Speaker 1: number of them. A number of them ended up going down.

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Speaker 1: We also saw a lot of the moderate candidates either

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Speaker 1: go down trying to win in Trump districts, districts that

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Speaker 1: were heavily Republican and just not being able to pass

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Speaker 1: that margin. So, uh, We've seen the Democrats try a

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Speaker 1: number of different strategies and in this race, and in

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Speaker 1: some cases it worked, I think, uh, having women run

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Speaker 1: and ended up being successful for them. There's gonna be

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Speaker 1: a record number of women in Congress, and that may

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Speaker 1: be something they look at in and trying to increase that.

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Speaker 1: When the margin with the women's vote, which was pretty

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Speaker 1: impressive for Democrats this time around, in part because President

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Speaker 1: Trump is toxic to a lot of female voters. That

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Speaker 1: may be something they try to hone in on, But

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Speaker 1: trying to convert other Trump voters to Democrats was not

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Speaker 1: something that they were very successful at, and that's part

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Speaker 1: of the reason that they had trouble. Uh, and they

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Speaker 1: lost a number of seats in the Senate. Billy Well,

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Speaker 1: Aside from presidential aspirants, I would have to say that

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Speaker 1: the party generally is looking to tiptoe around those larger

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Speaker 1: questions of impeachment that many of outside Congress are demanding

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Speaker 1: they pursue. Uh. So whild Republicans are stirring the pots

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Speaker 1: saying that's what this Democratic House is going to do,

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Speaker 1: and other witch hunts. Uh. You already see Nancy Pelosi

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Speaker 1: and her lieutenants insisting that they're gonna wait for the

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Speaker 1: Special Council Robert Bohler uh and not shred into territory

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Speaker 1: that maybe he won't even find or even report. Well,

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Speaker 1: as we wait for President Donald Trump to give a

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Speaker 1: post election news conference, do you believe that there will

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Speaker 1: be anything done during the lane duck session? Between now

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Speaker 1: and when the next Congress takes its seats, well in

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Speaker 1: terms of just figuring out the leadership of both parties

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Speaker 1: in the House, UH, even before you get to policy

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Speaker 1: and in the in the short time they have UH,

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Speaker 1: it's assumed Nancy Pelosi will be the House Speaker, but

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Speaker 1: she UH is going to have to do some maneuvering. Obviously,

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Speaker 1: some of the newly elected incoming freshman members have said

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Speaker 1: they would not support her. And with her caucus going

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Speaker 1: to UH number anywhere from to to eighteen to nineteen

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Speaker 1: to twenty nine, I think at twenty two now, she

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Speaker 1: can't go to the floor to be elected speaker unless

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Speaker 1: she secures two in eighteen votes. So even before we

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Speaker 1: get to that, they've got to resolve their leadership thing.

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Speaker 1: On the other side, Kevin McCarthy is the majority leader.

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Speaker 1: He's the number. He's lost the majority. I mean, roral

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Speaker 1: Republicans really like the majority leader who lost the majority

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Speaker 1: as their new minority leader. Who have to wait to

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Speaker 1: see you know, I wanna Talu talk a little bit

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Speaker 1: about turnout because I know that in my district there

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Speaker 1: was a line out the door at six twenty a m.

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Speaker 1: And I saw photographs on social media and elsewhere of

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Speaker 1: lines that were similar around the country. Do we have

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Speaker 1: a final tally of just how big the turnout was

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Speaker 1: for this particular midterm election. Yeah, this is a record

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Speaker 1: turnout election in terms of the number of people who

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Speaker 1: turned out to vote. The earliest numbers official totals that

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Speaker 1: I've seen has turnout above hundred and eleven million Americans,

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Speaker 1: and that's compared to I think about eighty four million.

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Speaker 1: Can you give us a sense though, of the proportion

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Speaker 1: of the population, because, I mean, the population is rising,

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Speaker 1: so you expected, Yeah, that is, that is true, but

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Speaker 1: it's a it's a huge jump, almost thirty from and uh,

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Speaker 1: even though we've had population growth, we haven't had it

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Speaker 1: at that rate rate, so definitely a higher number. I

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Speaker 1: think there's still numbers coming in, So I don't want

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Speaker 1: to say specifically what the turnout rate was, but you

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Speaker 1: have to remember, Ineen, we were at historically low turnout

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Speaker 1: in the you know, thirties and forties and a number

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Speaker 1: of different states. I think we're going to be well

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Speaker 1: above fifty in several states, places like Florida saw a

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Speaker 1: huge turnout in the high fifties and the in the

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Speaker 1: sixties and some counties, uh turn out that you don't

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Speaker 1: normally get during a mid term, not necessarily presidential level

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Speaker 1: um turnout, but definitely really high turnout. And not only

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Speaker 1: turn out among Democrats. We saw a number of rural

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Speaker 1: voters turn out very high high rates. Normally people think

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Speaker 1: that high turnout is better for Democrats because you have

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Speaker 1: new voters, you have younger voters, you have a more

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Speaker 1: diverse electorate. And in this case, we saw a number

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Speaker 1: of Trump supporters, a number of rural voters turnout in

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Speaker 1: very high numbers, and that was able. That was part

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Speaker 1: of the reason that the Florida race ended up being

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Speaker 1: so close, and part of the reason why the Republicans

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Speaker 1: are favored to win in those races. Do the results, Billy,

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Speaker 1: just to echo the fact that the divisions in the

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Speaker 1: country remain so deep, I think they do. I think

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Speaker 1: the large turnout actually was reflective of excitement among the extremes.

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Speaker 1: And therefore, for instance, in the House, some of the

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Speaker 1: moderates are moderate more moderate Republicans Carbello in Florida and

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Speaker 1: Leonard Lance New Jersey, they fell. So what was known

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Speaker 1: as the Tuesday Group Tuesday Lunch group of moderates is

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Speaker 1: now down to basically a snack. And uh, I think

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Speaker 1: that is one of the the offshoots of a high

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Speaker 1: voter turnout. The extremes turned out so to lou just

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Speaker 1: looking forward here, I mean, one thing that's really striking

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Speaker 1: to me is that the nation appears more divided than

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Speaker 1: I believe I have ever seen in terms of district

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Speaker 1: by districted. So you just really can't make overwhelming characterizations.

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Speaker 1: People are going more left, people are going more right,

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Speaker 1: people are getting more extreme here. Is there anything that

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Speaker 1: is sort of a unifying issue that kind of emerges

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Speaker 1: from this entire election? I would say healthcare. Even though

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Speaker 1: healthcare is one of the most polarizing issues that has

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Speaker 1: caused so many fights in the Congress, we did see

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Speaker 1: people come out and candidates come out and talk about

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Speaker 1: defending and protecting pre existing conditions. Uh, that's a Republican issue. Now,

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Speaker 1: it's a Democratic issue. It's part of Obamacare. And even

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Speaker 1: though Republicans voted multiple times to repeal Obamacare and actually

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Speaker 1: get rid of those pre existing conditions protections or roll

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Speaker 1: them back in significant ways, this election, in which healthcare

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Speaker 1: turned out to be one of the top issues, ended

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Speaker 1: up being a situation where both Republicans and Democrats agree

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Speaker 1: read that covering people with pre exact eisting conditions, forcing

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Speaker 1: insurance companies to cover those people at the same rate

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Speaker 1: is something that they can agree on. Now there is

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Speaker 1: going to be a discussion about how to actually make

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Speaker 1: that happen and how to actually craft legislation that can

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Speaker 1: achieve that goal. But the idea of repealing Obamacare and

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Speaker 1: getting rid of those pre existing condition protections is an

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Speaker 1: idea of the past. Right now, we are, of course

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Speaker 1: a waiting President Donald Trump giving a news conference to

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Speaker 1: discuss the mid term elections and their results, and of

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Speaker 1: course many other topics. To lou just to follow up

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Speaker 1: on on what you said having to do with healthcare.

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Speaker 1: It doesn't seem as though economics or the economy was

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Speaker 1: in the election this year, or did I miss something. Yeah,

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Speaker 1: if you look at the economy, you would not expect

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Speaker 1: there to be a multiple seat lost by the party

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Speaker 1: in power in the House. I mean, this is an

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Speaker 1: economy with three point seven percent unemployment. We have waged

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Speaker 1: growth at least nominally that's higher than it's been in

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Speaker 1: several years. And the economy has been you know, working

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Speaker 1: and firing on all cylinders. For for the last couple

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Speaker 1: of years, definitely continuing the trend that was started under

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Speaker 1: the previous administration. But President Trump said it very transparently

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Speaker 1: on the campaign trail that he thought talking about the

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Speaker 1: economy was boring and he thought that, you know, talking

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Speaker 1: about things like immigration and the migrant caravan in Central

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Speaker 1: America was much more of a motivating factor for his supporters.

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Speaker 1: And that calculation was made. It helped in the Senate,

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Speaker 1: it seemed to have hurt in the House, and that's

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Speaker 1: what the President decided to do. And I'm sure we're

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Speaker 1: gonna hear during this news conference that he believes that

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Speaker 1: that was a positive and successful strategy. Billy, real quick,

433
00:24:43,280 --> 00:24:44,600
Speaker 1: I just want to get a sense was there any

434
00:24:44,640 --> 00:24:47,080
Speaker 1: foreign interference in this election or is that something people

435
00:24:47,080 --> 00:24:50,520
Speaker 1: are talking about. There was, There's up to the this

436
00:24:50,680 --> 00:24:53,520
Speaker 1: time been scant evidence of that. I mean, there's certainly

437
00:24:53,560 --> 00:24:56,640
Speaker 1: obviously probably was were attempts, but there has not been any.

438
00:24:57,200 --> 00:24:59,359
Speaker 1: Of course, we learned about much of the last and

439
00:24:59,720 --> 00:25:03,760
Speaker 1: true should late and this fact, and we are starting

440
00:25:03,760 --> 00:25:06,359
Speaker 1: a forty five day clock under an executive order signed

441
00:25:06,359 --> 00:25:10,480
Speaker 1: by President Trump that will force the intelligence agencies to

442
00:25:10,560 --> 00:25:13,680
Speaker 1: decide and and confirm whether or not there was any

443
00:25:13,720 --> 00:25:16,320
Speaker 1: foreign interference and report that to the President, and if

444
00:25:16,359 --> 00:25:18,640
Speaker 1: that happened, we will all know about it and there

445
00:25:18,640 --> 00:25:21,120
Speaker 1: will be sanctions in the results. Something that is new

446
00:25:21,200 --> 00:25:23,520
Speaker 1: during this election that there is a forty five day

447
00:25:23,520 --> 00:25:27,040
Speaker 1: period the intelligence community will let us know sometimes sometime

448
00:25:27,080 --> 00:25:28,399
Speaker 1: before the end of the year, whether or not there

449
00:25:28,440 --> 00:25:32,600
Speaker 1: was foreign interference. Thank you, gentlemen, very much to lou Alaripa,

450
00:25:32,720 --> 00:25:35,280
Speaker 1: he is our White House correspondent, and our thanks also

451
00:25:35,320 --> 00:25:50,560
Speaker 1: to our congressional reporter Billy House, much appreciated. Joining us

452
00:25:50,600 --> 00:25:54,920
Speaker 1: now in our Bloomberg Interactive Broker Studios is Amanda Albright,

453
00:25:54,960 --> 00:25:58,679
Speaker 1: our municipal bond reporter for Bloomberg News. Amanda, as always

454
00:25:58,680 --> 00:26:02,040
Speaker 1: a pleasure to have you with us. Across the United States,

455
00:26:02,240 --> 00:26:06,800
Speaker 1: US voters approved more than twelve billion dollars in bond

456
00:26:06,880 --> 00:26:12,480
Speaker 1: sales to support school construction, water infrastructure, as well as

457
00:26:12,720 --> 00:26:17,119
Speaker 1: upgrades to a variety of bridges and roads. Tell us

458
00:26:17,200 --> 00:26:21,760
Speaker 1: about this ballot busting initiative and what it means for

459
00:26:21,800 --> 00:26:25,000
Speaker 1: infrastructure spending. Sure, so, we've already seen the number of

460
00:26:25,080 --> 00:26:28,360
Speaker 1: bonds approved um rise up to twenty billion. We're still

461
00:26:28,359 --> 00:26:31,480
Speaker 1: seeing results coming in UM California, which is a big

462
00:26:31,520 --> 00:26:33,800
Speaker 1: issue in state. We're still seeing results coming in there,

463
00:26:33,840 --> 00:26:36,359
Speaker 1: so UM we definitely expect that this will be another

464
00:26:36,400 --> 00:26:40,200
Speaker 1: big year for bond measures approved by voters UM. Interestingly enough,

465
00:26:40,320 --> 00:26:42,520
Speaker 1: it's actually been kind of a mixed year for bond

466
00:26:42,520 --> 00:26:46,320
Speaker 1: ballot measures. UM. We saw Colorado voters UM vote down

467
00:26:46,400 --> 00:26:50,840
Speaker 1: over nine billion and two different bond measures for transportation projects. UM.

468
00:26:50,880 --> 00:26:54,000
Speaker 1: In California voters actually UM did the rare thing of

469
00:26:54,080 --> 00:26:57,200
Speaker 1: voting down UM over eight billion in bonds for water

470
00:26:57,280 --> 00:27:00,320
Speaker 1: infrastructure UM that would have helped with like drought conditions

471
00:27:00,320 --> 00:27:02,520
Speaker 1: and and things like that. So it was a really

472
00:27:02,560 --> 00:27:04,639
Speaker 1: interesting year and we're still kind of parsing through what

473
00:27:04,720 --> 00:27:07,280
Speaker 1: it all means. Well, yeah, I'm just wondering how much

474
00:27:07,480 --> 00:27:12,119
Speaker 1: this indicates that voters are concerned about paying more. Right, So,

475
00:27:12,200 --> 00:27:15,320
Speaker 1: I think it is a really interesting dynamic, and the

476
00:27:15,359 --> 00:27:16,920
Speaker 1: way that I like to look at it is state

477
00:27:16,960 --> 00:27:19,639
Speaker 1: by state. So UM. New Jersey had one measure that

478
00:27:19,680 --> 00:27:22,119
Speaker 1: I was very focused on because obviously New Jersey voters

479
00:27:22,119 --> 00:27:24,639
Speaker 1: are worried about their taxes, UM, they're worried about the

480
00:27:24,640 --> 00:27:28,080
Speaker 1: state's finances. But New Jersey voters actually agreed to UM

481
00:27:28,160 --> 00:27:31,040
Speaker 1: five million in bonding for schools. Um. But you go

482
00:27:31,119 --> 00:27:34,280
Speaker 1: to a place like Colorado, UM, and voters you know,

483
00:27:34,359 --> 00:27:37,479
Speaker 1: shot down these transportation measures. UM. Maybe a little bit

484
00:27:37,480 --> 00:27:41,200
Speaker 1: of concerns about property taxes rising there. Sort of interesting.

485
00:27:41,240 --> 00:27:44,879
Speaker 1: Maybe it's the reason that people aren't concerned in New Jersey.

486
00:27:44,920 --> 00:27:47,560
Speaker 1: Perhaps is the reason why they have a fiscal situation,

487
00:27:47,600 --> 00:27:51,080
Speaker 1: and that is that is the way that it is, Pam.

488
00:27:51,160 --> 00:27:53,960
Speaker 1: Let's talk about just one state, North Carolina for a moment.

489
00:27:54,320 --> 00:27:58,880
Speaker 1: This is in Wake County. Voters approved a half billion dollar,

490
00:27:58,960 --> 00:28:03,280
Speaker 1: more than a half billion dollars in school construction bonds. Yeah.

491
00:28:03,320 --> 00:28:05,679
Speaker 1: So we've seen a lot of school measures, um. You

492
00:28:05,720 --> 00:28:08,760
Speaker 1: know this basically the high amount of bond measures that

493
00:28:08,800 --> 00:28:11,879
Speaker 1: we're seeing, you know, just across the board. California is

494
00:28:11,880 --> 00:28:14,360
Speaker 1: always a big one, Um, Texas is a big one,

495
00:28:14,400 --> 00:28:17,520
Speaker 1: But places like Wait County in North Carolina not necessarily

496
00:28:17,520 --> 00:28:21,320
Speaker 1: one where you'd see like a chart topping bond measure UM. There.

497
00:28:21,359 --> 00:28:23,600
Speaker 1: So what this really says is that, you know, states

498
00:28:23,600 --> 00:28:26,160
Speaker 1: and cities across the country are getting a little bit

499
00:28:26,160 --> 00:28:28,919
Speaker 1: more comfortable with taking on debt UM, which kind of

500
00:28:28,920 --> 00:28:32,040
Speaker 1: speaks to where the economy is right now. So moving aside,

501
00:28:32,320 --> 00:28:35,320
Speaker 1: from moving a little bit away from the actual ballot

502
00:28:35,359 --> 00:28:39,000
Speaker 1: measures that would approve bond issue in Are there other

503
00:28:39,120 --> 00:28:41,920
Speaker 1: measures that were voted on that you think are interesting

504
00:28:41,960 --> 00:28:45,400
Speaker 1: and could affect the credit worthiness of different states? For example,

505
00:28:45,720 --> 00:28:47,720
Speaker 1: I was speaking with one investor who said that the

506
00:28:47,840 --> 00:28:52,040
Speaker 1: legalization of marijuana in Michigan actually improves the state's finances

507
00:28:52,080 --> 00:28:54,840
Speaker 1: because they'll get more revenues. Right. So, Michigan is a

508
00:28:54,880 --> 00:28:57,680
Speaker 1: state that I definitely have my eye on. Um. That's

509
00:28:57,680 --> 00:29:00,680
Speaker 1: a state where fourteen out of eighteen school passed bond

510
00:29:00,720 --> 00:29:04,440
Speaker 1: initiatives there. Um, they passed, you know, the marijuana initiative. Um.

511
00:29:04,440 --> 00:29:07,200
Speaker 1: They've also just elected a Democrat as governor. And this

512
00:29:07,920 --> 00:29:10,840
Speaker 1: governor is very friendly towards infrastructure. She ran on a

513
00:29:10,880 --> 00:29:13,920
Speaker 1: plan of um, fixing the roads, um, and you know,

514
00:29:14,000 --> 00:29:17,920
Speaker 1: outlined a very detailed proposal on infrastructure. So for Michigan

515
00:29:17,960 --> 00:29:20,120
Speaker 1: at a state where maybe you could see debt increase,

516
00:29:20,160 --> 00:29:22,520
Speaker 1: which would be a credit issue, but if voters are

517
00:29:22,560 --> 00:29:25,240
Speaker 1: willing to raise taxes to pay for it, then, um,

518
00:29:25,320 --> 00:29:27,160
Speaker 1: you know, maybe they can handle that increase in debt.

519
00:29:27,560 --> 00:29:30,680
Speaker 1: How about affordable housing? How did that turn out? The

520
00:29:31,400 --> 00:29:35,360
Speaker 1: variety about initiatives, I think there was one in California. UM. Yes,

521
00:29:35,560 --> 00:29:38,680
Speaker 1: And in Oregon, voters approved over six hundred million in

522
00:29:38,720 --> 00:29:41,760
Speaker 1: bonds for affordable housing. UM. That's something that you know,

523
00:29:41,840 --> 00:29:45,080
Speaker 1: bondholders actually worry about affordable housing because they worry about

524
00:29:45,080 --> 00:29:48,800
Speaker 1: this idea of UM seeing out migration from communities where

525
00:29:49,040 --> 00:29:51,960
Speaker 1: rents get too high and um, you know, flight from

526
00:29:51,960 --> 00:29:55,480
Speaker 1: really high housing prices. UM. You know, one investor actually

527
00:29:55,520 --> 00:29:57,760
Speaker 1: emailed me today and said affordable housing is one of

528
00:29:57,800 --> 00:30:01,040
Speaker 1: his top concerns. UM. And he's based Georgia, so he's

529
00:30:01,040 --> 00:30:03,080
Speaker 1: talking about other communities. But that just gives you an

530
00:30:03,120 --> 00:30:06,080
Speaker 1: idea of how important affordable housing is from a credit perspective.

531
00:30:06,440 --> 00:30:10,040
Speaker 1: So just overall taking a step back, is it just

532
00:30:10,160 --> 00:30:13,880
Speaker 1: hard to generalize when it comes to municipalities acting or

533
00:30:14,080 --> 00:30:16,400
Speaker 1: voters voting on things that are good for the bottom

534
00:30:16,440 --> 00:30:17,840
Speaker 1: line or bad for the bottom line. It's just this

535
00:30:17,920 --> 00:30:21,360
Speaker 1: sort of locality by Yeah, I mean, the thing that's

536
00:30:21,400 --> 00:30:24,640
Speaker 1: kind of um struck me this year is just on infrastructure.

537
00:30:24,680 --> 00:30:27,360
Speaker 1: It's a really really complicated year. So you're seeing people

538
00:30:27,400 --> 00:30:30,960
Speaker 1: be more bullish on infrastructure policies federally, um, but on

539
00:30:31,000 --> 00:30:33,960
Speaker 1: the local level, with this Colorado measure failing and the

540
00:30:34,640 --> 00:30:37,880
Speaker 1: big California measure failing. We've also seen voters in Missouri

541
00:30:37,880 --> 00:30:41,320
Speaker 1: and Utah reject gas tacks increases. It's really really hard

542
00:30:41,360 --> 00:30:44,600
Speaker 1: to generalize about how people are feeling about infrastructure. It

543
00:30:44,680 --> 00:30:46,680
Speaker 1: might have something to do with the way that the

544
00:30:46,720 --> 00:30:49,560
Speaker 1: measures were advertised to them on TV or you know,

545
00:30:49,600 --> 00:30:53,520
Speaker 1: how the measures were written on ballots. UM. But it's

546
00:30:53,560 --> 00:30:55,360
Speaker 1: kind of fascinating the way that there are these like

547
00:30:55,440 --> 00:30:58,680
Speaker 1: nuances between different communities. And just quickly there were a

548
00:30:58,680 --> 00:31:02,440
Speaker 1: couple of ballot initiatives changing state laws having to do

549
00:31:02,520 --> 00:31:06,080
Speaker 1: with whether they were going to increase taxes. Right, Yeah,

550
00:31:06,160 --> 00:31:08,840
Speaker 1: that affected my home state of North Carolina. So voters

551
00:31:08,880 --> 00:31:12,600
Speaker 1: they're agreed to cap the maximum possible personal income tax

552
00:31:12,680 --> 00:31:15,880
Speaker 1: rate UM. North Carolina is an extremely low tax state. UM.

553
00:31:15,920 --> 00:31:18,520
Speaker 1: It's triple A. So this isn't going to change UM

554
00:31:18,560 --> 00:31:22,200
Speaker 1: their credit rating. But if there is a recession scenario UM,

555
00:31:22,240 --> 00:31:24,000
Speaker 1: a lot of liberal groups in the state, we're a

556
00:31:24,000 --> 00:31:26,600
Speaker 1: little bit worried about that. UM. In Florida, they passed

557
00:31:26,600 --> 00:31:30,440
Speaker 1: a supermajority requirement on tax hikes against Florida's triple A.

558
00:31:30,560 --> 00:31:33,320
Speaker 1: So not necessarily a credit rating changer, but definitely something

559
00:31:33,360 --> 00:31:35,320
Speaker 1: that could crop up. Later on down the line and

560
00:31:35,360 --> 00:31:38,680
Speaker 1: create pressures. Well, Amanda, we're gonna let you go get

561
00:31:38,880 --> 00:31:41,160
Speaker 1: some rest because I understand you were here all night.

562
00:31:41,360 --> 00:31:44,040
Speaker 1: So thank you a million times over for your coverage

563
00:31:44,240 --> 00:31:48,960
Speaker 1: on all levels. Amanda Albright, Star Muni, reporter for Bloomberg News,

564
00:31:49,040 --> 00:31:55,160
Speaker 1: joining us here in our eleven three oh studios. Thanks

565
00:31:55,160 --> 00:31:57,800
Speaker 1: for listening to the Bloomberg P and L podcast. You

566
00:31:57,800 --> 00:32:01,600
Speaker 1: can subscribe and listen to interviews at a full podcasts, SoundCloud,

567
00:32:01,720 --> 00:32:05,200
Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm

568
00:32:05,240 --> 00:32:08,760
Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa

569
00:32:08,800 --> 00:32:11,760
Speaker 1: Abramo wits one. Before the podcast, you can always catch

570
00:32:11,840 --> 00:32:13,560
Speaker 1: us worldwide on Bloomberg Radio