WEBVTT - Market Concentration and Examining Kamala Harris' Policies 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.119 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:46.720 the Bloomberg Terminal, and the Bloomberg Business app. Now to 0:00:46.760 --> 0:00:50.720 drive the China story forward in economics, finance, and investment. 0:00:51.400 --> 0:00:54.400 Joining us right now, Virginia Mass New Global Cio Equity 0:00:54.400 --> 0:00:59.120 at Alion's as well. Virginny. I'm sure you've done this, 0:00:59.800 --> 0:01:05.039 but if you're at at the restaurant Cafe Monsieur diorg 0:01:05.920 --> 0:01:10.560 at Montana thirty Montaigna in Paris, and you know you 0:01:10.680 --> 0:01:15.479 sat down with mister Arnaut's offspring and said, what about China? 0:01:15.560 --> 0:01:18.640 How would you brief the Arnold family now and the 0:01:18.760 --> 0:01:21.880 vibrancy in the future of China consumption? 0:01:23.360 --> 0:01:26.800 Well, thank you that's a great I love the staging here. 0:01:26.840 --> 0:01:31.880 It's quite quite fun. Listen. I think China clearly has 0:01:31.920 --> 0:01:36.360 gone through a tough time and when you see particularly 0:01:36.400 --> 0:01:40.600 demanding luxury good and the substitution that we start seeing 0:01:40.720 --> 0:01:46.120 within China, luxury is finding it quite tough. However, there 0:01:46.200 --> 0:01:48.840 is a lot of negative sentiment on China, and I 0:01:48.880 --> 0:01:52.840 think the packages that they've put yesterday are still underestimated 0:01:52.920 --> 0:01:56.240 by a lot of investors, particularly because of the impact 0:01:56.240 --> 0:02:02.080 it could have a domestic consumption confidence as it relates 0:02:02.080 --> 0:02:03.120 to the property market. 0:02:03.320 --> 0:02:06.559 Do you just assume fiscal stimulus to come. We're ago 0:02:06.640 --> 0:02:10.600 and canes today. When the facts change, Beijing changes. 0:02:11.240 --> 0:02:16.079 Yeah, I think fiscal stimulus is needed. The current package 0:02:16.240 --> 0:02:18.240 is quite big, as you know, in terms of support 0:02:18.280 --> 0:02:22.520 to property and capital market. But what I would like 0:02:22.600 --> 0:02:26.280 to see is an AMC for property, basically an asset 0:02:26.320 --> 0:02:30.080 management company, the same way we had remember in some 0:02:30.160 --> 0:02:34.239 of the previous crisis, to help with the banks and pls. 0:02:34.760 --> 0:02:38.080 I'm not saying this is going to be announced, but 0:02:38.200 --> 0:02:40.040 what I'm saying is it would make a lot of 0:02:40.080 --> 0:02:42.040 sense as the next step. And you can see how 0:02:42.120 --> 0:02:45.720 China has timed the release of this package after the 0:02:45.800 --> 0:02:50.760 fat cut, so that the impact on the currency versus 0:02:50.760 --> 0:02:54.399 the dollar was not too strong, and so I think 0:02:54.440 --> 0:02:55.800 we'll have more coming. 0:02:56.160 --> 0:02:57.960 We say good morning to your no family and everyone 0:02:58.000 --> 0:03:01.560 else listening in the eighth in Paris. For let me 0:03:01.600 --> 0:03:03.640 ask you just about the market reaction to all of 0:03:03.639 --> 0:03:06.760 this and baked into these plans announced by the PBOC 0:03:06.840 --> 0:03:09.880 in China or was this stock stabilization fund our friend 0:03:10.080 --> 0:03:12.040 John Authur's are colleg John authors referring to that is 0:03:12.120 --> 0:03:14.880 kind of like a FED put in effect. 0:03:15.320 --> 0:03:16.160 You look at how this. 0:03:16.160 --> 0:03:18.680 Is rippling out through Asia, not really rippling out through 0:03:18.840 --> 0:03:21.880 throughout Europe and the US, as one might think, how 0:03:21.919 --> 0:03:23.920 do you see the market effects the knock on effects 0:03:23.919 --> 0:03:26.320 of what's happened in China over these last couple of days. 0:03:27.120 --> 0:03:29.320 Yeah, so I think it's not only China. I think 0:03:29.400 --> 0:03:33.200 it's you know, we're at an interesting point in the 0:03:33.320 --> 0:03:39.680 markets with key things in the macroeconomy, the political economy, 0:03:39.720 --> 0:03:42.840 and the financial economy. So on one hand, you have 0:03:43.000 --> 0:03:46.560 had all those announcements, and of course positive sentiment on 0:03:46.680 --> 0:03:49.200 China has an impact on Asia, but you also have 0:03:49.360 --> 0:03:52.240 the impact of the FED rate cuts, which of course 0:03:52.640 --> 0:03:55.680 is going to have an impact on areas that are 0:03:56.040 --> 0:03:59.120 strongly anchored around property, and you can see that with 0:03:59.240 --> 0:04:02.080 Hong Kong for ext So I think it's the convergence 0:04:02.120 --> 0:04:05.200 of those two trends that is supporting markets. 0:04:05.920 --> 0:04:07.880 Love to pull back and look at the United States 0:04:07.880 --> 0:04:09.880 as well, and you've written about this tension that exists 0:04:09.880 --> 0:04:12.320 between the political cycle and the economic cycle here in 0:04:12.560 --> 0:04:15.560 the United States. Where do you see most of that 0:04:15.680 --> 0:04:18.480 tension lying is in terms of tax policy, tariff's policy, 0:04:18.520 --> 0:04:20.080 if we want to keep with the China theme that 0:04:20.120 --> 0:04:23.240 we're having this morning. I think a lot of people 0:04:23.279 --> 0:04:25.760 downplay the sort of role that an election might have 0:04:25.920 --> 0:04:29.400 just exclusively. But when you look at policy going forward 0:04:29.440 --> 0:04:31.839 under either of these two administrations, what stands out to 0:04:31.839 --> 0:04:33.680 you the most, what's likely to have the biggest effect. 0:04:34.560 --> 0:04:36.800 Yeah, So I think on one hand, you have continuity. 0:04:36.839 --> 0:04:39.520 On the other hand, you have unknown with a lot 0:04:39.560 --> 0:04:43.760 of potential announcements that if you actually look at the 0:04:43.760 --> 0:04:48.880 announcement and the impact on finances of the country or 0:04:49.360 --> 0:04:53.080 the realistic the pragmatic view of how you implement those 0:04:53.480 --> 0:04:57.320 a little bit more questionable. I would say, so we 0:04:57.360 --> 0:05:00.320 would look at inflation through tariffs if we have one 0:05:00.360 --> 0:05:04.680 administration versus another That sustainability has been a big topic 0:05:04.720 --> 0:05:07.880 of mind for over twelve months now. As you know, 0:05:08.480 --> 0:05:13.760 if you have a continuation of the corporate tax rate cut, 0:05:13.880 --> 0:05:17.240 you know that's about five six trillion dollars. But if 0:05:17.279 --> 0:05:20.520 you have more happening, you know, how do we financing 0:05:20.640 --> 0:05:24.080 at the time where we were quite leveraged, and of 0:05:24.120 --> 0:05:27.039 course the cost of financing that that is coming down, 0:05:27.080 --> 0:05:29.280 but the long end is not coming down as much. 0:05:29.160 --> 0:05:33.000 Right, Virginie, What is the cost of having too much 0:05:33.120 --> 0:05:38.479 cash in a portfolio right now into twenty twenty five 0:05:38.960 --> 0:05:41.440 if the facts change, So I've got to look differently 0:05:42.000 --> 0:05:45.200 at cash, triple leverage or that. Yeah. 0:05:45.320 --> 0:05:49.279 So, as you know, most of our clients in inequities 0:05:49.320 --> 0:05:52.520 have maximum cash generally five percent. So but you can 0:05:52.760 --> 0:05:58.040 absolutely be there. You're still getting some interesting returns on 0:05:58.080 --> 0:06:00.240 your cash. But I think the way to navigate that 0:06:00.360 --> 0:06:05.200 volatility is really more about balancing. So in the developed market, 0:06:05.600 --> 0:06:09.800 you know, having that balanced portfolios between the cyclical aspect 0:06:10.600 --> 0:06:13.320 of the stocks who might do well on those rate 0:06:13.440 --> 0:06:17.920 cuts and a more defensive, you know element of the portfolio. 0:06:18.400 --> 0:06:21.760 Continuing however, to have your your tech long term long 0:06:21.839 --> 0:06:26.120 term stocks right. At the same time, what you're seeing 0:06:26.440 --> 0:06:31.760 is exposure, more opportunistic exposure, perhaps in emerging markets or China. 0:06:32.360 --> 0:06:35.480 In Asia, we still like Japan, and we like China 0:06:35.600 --> 0:06:40.240 as really an area of the market that's very emptiqu consensus. 0:06:40.480 --> 0:06:43.600 Virginie, thank you so much to you at Montania thirty 0:06:43.640 --> 0:06:46.560 there in the New York Cathe virginias a mention of 0:06:47.880 --> 0:06:56.400 Paris and of course always of Alliance as well. One 0:06:56.400 --> 0:06:59.440 of the great moments of late September in the early 0:07:00.920 --> 0:07:02.919 and I will go back as far as a gentleman 0:07:02.960 --> 0:07:07.200 from Iowa who supported FDR and then became a conservative 0:07:07.240 --> 0:07:12.000 Republican and moved to the center to get elected. His 0:07:12.080 --> 0:07:14.800 name was Ronald Reagan. And maybe that's a moment we 0:07:14.840 --> 0:07:18.240 are with these two candidates, is they frame out who 0:07:18.320 --> 0:07:21.760 to move to the center. The governor from Connecticut is 0:07:21.960 --> 0:07:25.080 more than skilled at this discussion. We should point out 0:07:25.160 --> 0:07:29.000 that Governor Lamont's wife, Annie Lamont, serves as a board 0:07:29.120 --> 0:07:33.560 member of Bloomberg LP, the parent company of Bloomberg Radio. 0:07:34.240 --> 0:07:37.800 Ned Lamont, David Gurra knows a lot about moving to 0:07:37.840 --> 0:07:38.320 the center. 0:07:40.320 --> 0:07:42.120 Govern Lamont, great to have you with us, and let 0:07:42.200 --> 0:07:43.800 me start here just by asking you about the speech 0:07:43.800 --> 0:07:46.120 that we're going to hear today from the Vice President 0:07:46.120 --> 0:07:50.480 in Pittsburgh, a major economic address. I was reading extracurricular 0:07:50.520 --> 0:07:52.440 this morning, looked at The Times and Jim tankersly talked 0:07:52.440 --> 0:07:54.720 about how outside groups are agitating for her to take 0:07:54.720 --> 0:07:58.360 a more populist position on the economy, Tom mentioning this 0:07:58.440 --> 0:08:00.600 movement to the center. Are you going to hear from 0:08:00.600 --> 0:08:02.400 the Vice president today? What do we need to hear 0:08:02.440 --> 0:08:04.480 from the vice president? What do you want to hear 0:08:04.480 --> 0:08:05.320 from the Vice president? 0:08:06.600 --> 0:08:07.880 Well, good boy, David and Tom. 0:08:07.920 --> 0:08:10.000 Tom, maybe i'll see you up at the Grunwich Economic 0:08:10.040 --> 0:08:11.200 Forum next month. 0:08:12.080 --> 0:08:13.000 What I want to hear. 0:08:13.080 --> 0:08:17.440 Is flesh out continuing the opportunity economy that she alluded 0:08:17.440 --> 0:08:21.400 to during the convention and going forward, that's a big 0:08:21.440 --> 0:08:26.320 focus on new business startups, the innovation economy that here 0:08:26.360 --> 0:08:28.880 in Connecticut we've started more new businesses in the last 0:08:28.920 --> 0:08:31.640 few years than ever before, and frankly a lot of. 0:08:31.640 --> 0:08:34.800 Them are women and minority owned businesses. You know, deal 0:08:34.840 --> 0:08:35.640 with also. 0:08:35.480 --> 0:08:39.439 AI and advanced manufacturing and all the other places. It's 0:08:39.480 --> 0:08:41.800 a great time to be in the startup economy. I 0:08:41.840 --> 0:08:43.920 think that'll be a focus. 0:08:43.840 --> 0:08:47.160 I hear the former president talking an awful lot about tariffs. 0:08:47.160 --> 0:08:50.120 He was in Savannah yesterday, talked about tariff's being a 0:08:50.160 --> 0:08:52.719 beautiful word. As he put it, there's a simplicity to 0:08:52.800 --> 0:08:55.280 him saying it over and over again. People might misapprehend 0:08:55.280 --> 0:08:57.880 what it means or what the consequences might be. Our 0:08:57.960 --> 0:09:00.679 understanding is the Vice President's going to talk about targeted 0:09:00.840 --> 0:09:04.680 tax incentives today, a difficult term I think to sell 0:09:04.679 --> 0:09:05.560 to the American public. 0:09:05.559 --> 0:09:06.320 How does she do it? 0:09:06.320 --> 0:09:09.640 How does she convince Americans that this kind of industrial 0:09:09.679 --> 0:09:13.120 policy is going to be a benefit to them. 0:09:13.480 --> 0:09:15.840 Look, I think terroriff is another word for tax. 0:09:15.960 --> 0:09:18.960 It's a middle class consumer tax, and you're going to 0:09:19.000 --> 0:09:22.520 be paying that in terms of higher inflation and higher costs. 0:09:23.160 --> 0:09:27.280 I think Vice President Harris has a different strategy obviously, 0:09:27.320 --> 0:09:28.079 with incentives. 0:09:28.080 --> 0:09:30.480 She wants to help those small companies. 0:09:30.040 --> 0:09:33.240 Grow and expand more of an ownership of company, opportunity 0:09:33.280 --> 0:09:36.040 to own your own company, and also, as you know 0:09:36.360 --> 0:09:38.199 in housing, own your own home as well. 0:09:38.440 --> 0:09:40.160 It's good to have a stake in your community. 0:09:41.240 --> 0:09:43.199 I want to ask you about how much time there 0:09:43.240 --> 0:09:45.520 is between now and the election. You're acutely aware of it, 0:09:45.720 --> 0:09:48.920 and there's a school of thought that it's too late 0:09:48.960 --> 0:09:51.319 in the game to change minds, that voters have made 0:09:51.400 --> 0:09:53.520 up their minds. Yes, we talk about these undecided voters 0:09:53.520 --> 0:09:56.040 a few as they are in these handful of states 0:09:56.240 --> 0:09:59.079 and districts. Are you one who believes that at this point, 0:09:59.080 --> 0:10:01.520 giving a speech like that is unveiling a plan that 0:10:01.559 --> 0:10:03.280 I gather is going to be about eighty pages long, 0:10:03.840 --> 0:10:05.440 is gonna is going to do work to do that 0:10:05.559 --> 0:10:08.480 people can still be convinced here forty plus days till 0:10:08.480 --> 0:10:08.839 the election. 0:10:10.760 --> 0:10:12.400 I get the idea that I have a three hundred 0:10:12.440 --> 0:10:13.040 million people. 0:10:13.120 --> 0:10:16.480 Maybe there's a million that are still persuadable in five 0:10:16.559 --> 0:10:17.360 or six states. 0:10:17.800 --> 0:10:20.400 But I think Kamala Harris, you're going to see what 0:10:20.440 --> 0:10:21.600 she has. 0:10:21.440 --> 0:10:25.120 In mind when it comes to manufacturing and jobs and opportunity. 0:10:25.559 --> 0:10:27.840 I think she's very entrepreneurial in that sense. 0:10:29.320 --> 0:10:32.240 With us now, the governor of Connecticut, Ned Lamont, we 0:10:32.240 --> 0:10:35.199 welcome all of you nationwide Bloomberg Surveillance. 0:10:35.280 --> 0:10:36.760 David, I've got to ask you. 0:10:36.880 --> 0:10:39.000 You mentioned taxes just a moment ago in the context 0:10:39.000 --> 0:10:42.760 of Tariff's being like them in your estimation, taxation front 0:10:42.760 --> 0:10:45.000 and center in your backyard, as we had the former 0:10:45.040 --> 0:10:47.920 president traveling to Connecticut to talk about the reversal of 0:10:47.960 --> 0:10:48.720 something that he did. 0:10:48.840 --> 0:10:51.400 We got to do, we gotta governor, we gotta make 0:10:51.440 --> 0:10:54.520 this granular. Okay, we got to get granular. There's a 0:10:54.600 --> 0:10:58.000 houth on North Street in Greenwich, Connecticut that a Spielberg 0:10:58.120 --> 0:11:00.880 parachuteed in. He'd say, we we can use this. Built 0:11:00.920 --> 0:11:05.720 in seventeen ninety six, actually pretty reasonable by Connecticut standards, 0:11:05.800 --> 0:11:09.800 under three million dollars, David, the property tax was rounded 0:11:09.800 --> 0:11:13.240 out to twenty five thousand, two hundred and seven dollars. 0:11:13.520 --> 0:11:17.920 Continue, the former president talks about restoring the salt deduction, 0:11:18.160 --> 0:11:20.240 which was capped when he was the president and his 0:11:20.280 --> 0:11:23.760 tax bill was pushed through. Help our listeners on Global 0:11:23.760 --> 0:11:26.080 Wall Street understand the significance of that decision that he 0:11:26.120 --> 0:11:29.160 and other Republicans made back then and the import of 0:11:29.200 --> 0:11:30.640 doing away with that cap. 0:11:32.480 --> 0:11:34.640 A first book on that house you referred to a 0:11:34.679 --> 0:11:37.480 Grutwich is probably two million dollars five years ago. 0:11:37.600 --> 0:11:40.000 With his three million dollars a day, A lot of 0:11:40.040 --> 0:11:41.600 people moving into this state. 0:11:41.920 --> 0:11:46.160 But you're absolutely right, David, that salt reducing the deduction 0:11:46.280 --> 0:11:49.640 on that was very costly to states where we invest 0:11:49.679 --> 0:11:52.839 a lot in K through twelve education that's reflected. 0:11:52.360 --> 0:11:53.520 In property taxes. 0:11:54.000 --> 0:11:56.720 So raising that deduction level, which I think is something 0:11:56.880 --> 0:12:01.240 both Kamala Harris and for President Trump have talked about, 0:12:01.280 --> 0:12:02.000 would be very. 0:12:01.920 --> 0:12:02.760 Meaningful up here. 0:12:03.720 --> 0:12:05.840 Governor Tom often talks to me about the importance of 0:12:05.880 --> 0:12:09.839 knowing history, thinking about history. As Donald Trump makes his 0:12:09.920 --> 0:12:13.040 way through Long Island into your neck of the woods, 0:12:13.200 --> 0:12:16.080 do people remember who's responsible for putting that cap in place? 0:12:18.559 --> 0:12:20.800 I think we'll be reminded them. 0:12:22.920 --> 0:12:25.200 As we migrate back to the speech that we're going 0:12:25.200 --> 0:12:28.560 to get today. Focusing again on this industrial policy, I 0:12:28.600 --> 0:12:31.480 wonder what the endgame is here for both of these candidates. 0:12:31.520 --> 0:12:33.640 I think there is a desire to bring more manufacturing 0:12:33.720 --> 0:12:37.240 to the United States from overseas. We remember, thinking again 0:12:37.280 --> 0:12:40.319 about history about how much was made in this country before. 0:12:41.520 --> 0:12:43.240 We're not going to get back to that, are we. 0:12:43.280 --> 0:12:45.480 I mean, what's the dream, what's the vision that your 0:12:45.520 --> 0:12:48.520 candidate has that politicians have for a sort of renaissance 0:12:48.559 --> 0:12:50.400 or resurgence of manufacturing in the United States. 0:12:50.400 --> 0:12:51.080 What does it look like. 0:12:51.800 --> 0:12:53.679 I can tell you in the last six years, we've 0:12:53.679 --> 0:12:56.680 brought more manufacturing back to the state of Connecticut. We 0:12:56.760 --> 0:13:00.200 have a lower unemployment rate than the national average. That 0:13:00.280 --> 0:13:03.320 was not true for much generation. I think some of 0:13:03.320 --> 0:13:06.079 that is related to the fact that advanced manufacturing, it's 0:13:06.200 --> 0:13:10.199 very calful, intensive, requires high level computer skills. If you 0:13:10.280 --> 0:13:12.760 go to some of these sublaces where making jet engine 0:13:12.800 --> 0:13:16.200 and submarines, and I think that old plays or. 0:13:16.679 --> 0:13:22.320 Strengths Nedlamont tell me about the fancy people, and you've 0:13:22.360 --> 0:13:25.440 had the class to stay in Connecticut. Frankly, you could 0:13:25.440 --> 0:13:29.320 do whatever you want. You've done the political game, which 0:13:29.360 --> 0:13:34.240 is fine. Those fancy people moving to Florida, what's the 0:13:34.320 --> 0:13:38.240 mistake they're making. I mean, there's an exodus from Connecticut, 0:13:38.559 --> 0:13:42.040 a fancy people to Florida. Discuss that impact. 0:13:44.840 --> 0:13:47.319 The good news, Tom is we have more young people 0:13:47.400 --> 0:13:50.240 moving into the state of Connecticut. Never before more young 0:13:50.320 --> 0:13:52.120 people staying in the state of Connecticut. 0:13:52.280 --> 0:13:53.280 But you're absolutely right. 0:13:53.480 --> 0:13:55.960 You know, going back, even before we had an income tax, 0:13:56.679 --> 0:13:59.000 a lot of older folks and wealthy folks did go 0:13:59.080 --> 0:14:01.520 down to Florida. Hope Sound was traded back in the 0:14:01.559 --> 0:14:05.079 fifties by that crowd. Look, I think far is a 0:14:05.080 --> 0:14:06.800 great place. The visitor wouldn't want to live there. 0:14:07.240 --> 0:14:08.800 I want to talk to you about a tough topic. 0:14:08.880 --> 0:14:10.920 We talked to an elite audience here a Bloomberg, But 0:14:11.800 --> 0:14:14.600 Governor Lamont, it's just simple people in the you know, 0:14:14.640 --> 0:14:17.640 you look at a more challenging part of Connecticut, like Bridgeport. 0:14:17.920 --> 0:14:20.440 They're not worried about Jupiter Island or Hope Sound. They're 0:14:20.440 --> 0:14:22.840 worried about drugs right now. What do you need from 0:14:22.960 --> 0:14:27.760 Washington to help this nation with our drug crisis? A fentanyl? 0:14:30.520 --> 0:14:33.760 The good news is the venyl crisis has received a 0:14:33.800 --> 0:14:36.960 little bit using some federal resources, a lot by the 0:14:37.000 --> 0:14:39.480 state doing a lot more in terms of the intervention 0:14:39.720 --> 0:14:43.320 early on, taking care of narcon in the schools, doing 0:14:43.320 --> 0:14:46.400 everything we can there. But I'm a big believer in opportunity. 0:14:46.760 --> 0:14:49.640 When young people see there's opportunity there, they have a 0:14:49.640 --> 0:14:53.800 better alternative. That's why free workforce training, we guarantee you 0:14:53.840 --> 0:14:55.760 a job if you pass with those skills. 0:14:55.960 --> 0:14:57.560 I think that's a big part of the answer too, 0:14:57.680 --> 0:14:59.120 Tom Govinor. 0:14:58.840 --> 0:15:00.800 We've been talking an awful lot about polls these last 0:15:00.840 --> 0:15:02.400 few days, and there have been plenty of them. You've 0:15:02.400 --> 0:15:04.760 seen them, I'm sure, And what seems to be bubbling 0:15:04.800 --> 0:15:08.040 up to the top is this interest in passion for 0:15:09.480 --> 0:15:11.840 getting the economy to be in better shape. That's what 0:15:11.960 --> 0:15:16.120 voters care about. As you make your rounds through Connecticut, 0:15:16.280 --> 0:15:19.080 what are voters telling you the problems are when it 0:15:19.120 --> 0:15:20.760 comes to the economy and what needs to change. How 0:15:20.840 --> 0:15:24.040 much are they looking to Washington to affect that change? 0:15:26.280 --> 0:15:28.240 As I go around the state of Connecticut, I think 0:15:28.280 --> 0:15:30.680 people feel like we're in a pretty good place from 0:15:30.720 --> 0:15:34.720 an economic point of view, but affordability is an enormous issue. 0:15:34.880 --> 0:15:38.120 Everything from growthry and right now electric rates going up. 0:15:38.920 --> 0:15:41.360 You know, electric is a big deal for us because 0:15:41.640 --> 0:15:44.280 demand is going up through the roof, look at data centers, 0:15:44.680 --> 0:15:46.880 and yet supply is still tough for at the end 0:15:46.920 --> 0:15:48.240 of the supply chain here. 0:15:48.520 --> 0:15:50.280 So that's what I hear afordability. 0:15:51.240 --> 0:15:53.760 Governor, I got time for one more question. It's the 0:15:53.760 --> 0:15:56.880 only one that matters. What can the governor of Connecticut 0:15:56.880 --> 0:16:00.040 do about Amtrak and the wires in the heat of 0:16:00.160 --> 0:16:04.320 August popping up from New York to Boston, Boston, New York. 0:16:04.720 --> 0:16:06.160 I mean, I mean, we're not going to blame this 0:16:06.320 --> 0:16:08.920 on the state of Connecticut. Ned Lamont, what are they 0:16:09.040 --> 0:16:12.640 They're they're doing better after the tunnels in New York, 0:16:12.640 --> 0:16:15.480 they're doing better to Washington. What can we do about 0:16:15.520 --> 0:16:16.920 Amtrak and Connecticut? 0:16:18.240 --> 0:16:20.800 I think thanks to the Infrastructure Bill, Tom, you're going 0:16:20.840 --> 0:16:22.080 to see a big difference there. 0:16:22.120 --> 0:16:22.600 Amtrak. 0:16:22.720 --> 0:16:25.600 Joe kind of cared a lot about Amtrak, and that 0:16:25.640 --> 0:16:28.080 means everything can straighten me out. Be a rail where 0:16:28.120 --> 0:16:30.360 we can so you can get higher speed. You know, 0:16:30.760 --> 0:16:33.040 one of these hundred year old bridges, Tom costs us 0:16:33.040 --> 0:16:35.880 about two minutes because you've got to slow down and 0:16:35.920 --> 0:16:37.720 then speed up on the backside of it. So I 0:16:37.720 --> 0:16:39.840 think you'll see some real progress there, but it's probably 0:16:39.840 --> 0:16:40.760 going to take a decade. 0:16:41.360 --> 0:16:43.560 I got I got a time, like a minute here. 0:16:43.680 --> 0:16:47.360 This is really important, Edlamont. President Biden speaking to the 0:16:47.480 --> 0:16:50.840 UN yesterday. We were thrilled he stopped by Bloomberg philanthropies 0:16:51.480 --> 0:16:54.920 as well. What will be the Joe Biden legacy? You 0:16:55.080 --> 0:16:58.800 talk about Amtrak? Joe, I think he's comfortable that, but 0:16:59.000 --> 0:17:02.120 after the Halay, just six months as president has had 0:17:02.480 --> 0:17:06.600 what will be his Democratic Party legacy builder. 0:17:07.359 --> 0:17:09.960 I think everybody since I've been around, I've been around 0:17:10.000 --> 0:17:11.119 for a while says we're going to. 0:17:11.119 --> 0:17:14.000 Start rebuilding America. I think he did that. 0:17:14.160 --> 0:17:17.000 Look where we were four years ago with sage Brush 0:17:17.280 --> 0:17:20.119 blowing down empty streets, and now what you're going to 0:17:20.160 --> 0:17:22.560 see in terms of roads and bridges and good paying 0:17:22.640 --> 0:17:24.520 jobs and speeding up Amtrak for you. 0:17:24.880 --> 0:17:26.800 I think that'll be a big piece of his legacy. 0:17:27.000 --> 0:17:29.480 Nettla Mount, thank you so much. The governor of Connecticut 0:17:29.480 --> 0:17:31.480 with us this morning, David Boro, thank you so much 0:17:31.520 --> 0:17:46.520 for that conversation, just really outstanding. Upon joining us. Now 0:17:46.560 --> 0:17:48.920 for Global Wall Street, we welcome all of you around 0:17:48.960 --> 0:17:52.520 the world, across the nation. Here Michael Mobison. I'm going 0:17:52.600 --> 0:17:55.080 to frame this out, David. He's got a very important 0:17:55.080 --> 0:17:58.760 Morgan Stanley piece out for Counterpoint Global Insights on stock 0:17:58.800 --> 0:18:01.760 market concentration. But I think we need to know how 0:18:01.760 --> 0:18:05.719 we got here. David Gera with Michael Mobison. Somewhere in 0:18:05.760 --> 0:18:09.280 the late nineties a credit sueee. They put out this 0:18:09.400 --> 0:18:12.480 literature that was seven eight nine pages and you'd swear 0:18:12.520 --> 0:18:14.600 because you had to read every word, and you go, 0:18:14.680 --> 0:18:16.720 who is this mobile I can't even pronounce his name. 0:18:16.760 --> 0:18:21.160 Who is this Mobison guy? And what began really culminating 0:18:21.160 --> 0:18:23.600 in the Internet boom, the first boom of two thousand 0:18:23.600 --> 0:18:28.919 and one two was the required theoretical read on Wall Street. 0:18:28.960 --> 0:18:32.000 He extended this from Credit Squeeze to like Mason now 0:18:32.000 --> 0:18:35.040 At and Morgan Stanley. We're thrilled that Michael Mobison could 0:18:35.080 --> 0:18:39.440 join us for extended conversation today. Do your old essays 0:18:39.480 --> 0:18:44.440 still hold true today? Those seminal capital allocation essays that 0:18:44.480 --> 0:18:47.359 you wrote, I'm going to say this twenty five years ago. 0:18:47.880 --> 0:18:49.720 The math is still the same, right. 0:18:49.600 --> 0:18:51.440 I think the math is the same. And well, I 0:18:51.480 --> 0:18:52.119 guess I'll lead it. 0:18:52.240 --> 0:18:54.600 Leave it to the readers to actually judge ultimately whether 0:18:54.640 --> 0:18:57.080 that's the case. But I'll say, Tom, just backing up 0:18:57.080 --> 0:18:59.320 a little bit. You know, I was very fortunate to 0:18:59.359 --> 0:19:01.159 be able to with the folks in the Santa Fean 0:19:01.160 --> 0:19:03.800 institude learning about a lot of these concepts like power 0:19:03.880 --> 0:19:08.120 laws and increasing returns. Now those things are you network effects? 0:19:08.160 --> 0:19:10.200 These are all it's kind of common language today. 0:19:10.320 --> 0:19:10.439 Right. 0:19:10.600 --> 0:19:13.399 That was very novel roughly thirty years ago, So I 0:19:13.440 --> 0:19:16.040 was able to be maybe a slightly bit ahead of 0:19:16.080 --> 0:19:17.320 trying to implement those. 0:19:17.119 --> 0:19:18.680 Ideas and think about it. 0:19:18.720 --> 0:19:21.199 And by the way, the Internet boom was just like 0:19:21.280 --> 0:19:23.919 the classic It was a canonical boom and bust, right, 0:19:23.960 --> 0:19:25.920 and you can see it unfold before your eyes, so 0:19:25.960 --> 0:19:28.040 you could actually write about it and say, like, we 0:19:28.119 --> 0:19:29.800 know that ninety percent of these companies are going to 0:19:29.840 --> 0:19:31.760 go away, but we're experimenting, right. 0:19:31.840 --> 0:19:35.240 You nailed eight nine ten essays in I can't remember. 0:19:36.160 --> 0:19:38.639 And this is some electrical engineering folks. You don't go 0:19:38.760 --> 0:19:41.600 semi log, you go loglog and you end up with 0:19:41.640 --> 0:19:44.359 a hyperbole. Which is that curvey thing you just studied 0:19:44.400 --> 0:19:49.160 in David at school. You nailed the few would win 0:19:49.280 --> 0:19:52.199 I believe Amazon was your model there, but on a 0:19:52.240 --> 0:19:57.000 loglog chart, a few winners would be there. You absolutely 0:19:57.080 --> 0:19:58.480 nailed that. Is that our future? 0:20:00.600 --> 0:20:04.960 Well, I mean, the thing is the distribution of company 0:20:05.040 --> 0:20:07.240 sizes is a power follows a power law and I 0:20:07.240 --> 0:20:09.400 don't I don't know that we know exactly why that's 0:20:09.440 --> 0:20:09.879 the case. 0:20:10.359 --> 0:20:11.080 So it was. 0:20:11.080 --> 0:20:13.480 True then, it was true back in the nineteen fifties, 0:20:13.520 --> 0:20:15.760 and I suspect there's no reason to believe it's not 0:20:15.800 --> 0:20:17.000 going to be true going forward. 0:20:17.080 --> 0:20:19.280 So the answer is yes. The challenge is. 0:20:19.320 --> 0:20:22.040 Figuring out precisely what you said, Tom, which is which 0:20:22.080 --> 0:20:24.800 companies canna lie where on that power law distribution right, 0:20:24.840 --> 0:20:27.000 and power law. By the way, power law is it's 0:20:27.000 --> 0:20:28.640 like it is, it ends up being a straight line 0:20:28.640 --> 0:20:29.920 when you do it on a log lag. But it's 0:20:29.960 --> 0:20:32.480 not intuitive when you when you actually run through the numbers, 0:20:32.520 --> 0:20:35.719 because obviously every log is you're doubling, where you're increasing 0:20:35.760 --> 0:20:37.480 the same percentage for each tick mark. 0:20:37.560 --> 0:20:40.920 What Momison is saying is not intuitive is I got 0:20:40.920 --> 0:20:43.879