WEBVTT - Surveillance: Tech Exposure with Shah 0:00:05.120 --> 0:00:08.480 This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along 0:00:08.520 --> 0:00:12.319 with Jonathan Farrow and Lisa Abramowitz. Join us each day 0:00:12.400 --> 0:00:16.840 for insight from the best and economics, geopolitics, finance and investment. 0:00:17.280 --> 0:00:22.079 Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 0:00:22.320 --> 0:00:26.600 anywhere you get your podcasts, and always on Bloomberg dot Com, 0:00:26.640 --> 0:00:30.840 the Bloomberg Terminal, and the Bloomberg Business App. The Bloomberg 0:00:31.280 --> 0:00:35.559 events structure this year is extraordinary. We've got Brad Stone 0:00:35.800 --> 0:00:39.680 and Emily Chang with a technology conference which is world class. 0:00:39.760 --> 0:00:42.120 Look for that in the coming weeks. And right now 0:00:42.159 --> 0:00:45.480 this moment in New York, there is Bloomberg Invests. Brian 0:00:45.520 --> 0:00:49.479 moynihan will be speaking from Bank of America, otherworthies, Raydale. 0:00:49.680 --> 0:00:52.440 I believe mister Drucon Miller is going to darken the door. 0:00:52.520 --> 0:00:55.200 That's all fine and well, and there will also be 0:00:55.440 --> 0:00:59.959 tactical discussion around Bloomberg Invests leading that. As Seamas Show, 0:01:00.000 --> 0:01:03.480 our chief global strategist of Principal Asset Management, who joins 0:01:03.560 --> 0:01:06.800 us this morning. I love Seema, how buried in your 0:01:06.880 --> 0:01:11.960 note you have We are underweight in some way equity 0:01:12.240 --> 0:01:15.400 slightly underweight. You know, you got the adverbs going there. 0:01:15.840 --> 0:01:18.360 How do you do an equity strategy when you see 0:01:18.360 --> 0:01:19.480 what Nvidia is doing? 0:01:19.560 --> 0:01:19.800 Now? 0:01:20.800 --> 0:01:24.440 Oh well, okay, so within our slight underweight to equities, 0:01:24.440 --> 0:01:27.160 we actually have an overweight to large cap. The reason 0:01:27.160 --> 0:01:28.959 we have the way overweight to large caps which we 0:01:29.000 --> 0:01:31.760 made back in February, was actually a cyclical reason, which 0:01:31.880 --> 0:01:35.160 was threefold. One was that you have we believe a 0:01:35.200 --> 0:01:39.680 slow downcoming potential recession. We have the towards the end 0:01:39.720 --> 0:01:41.640 of the FED hiking cycle. And the third thing is 0:01:41.640 --> 0:01:44.840 that large caps typically have a greater international exposure revenue 0:01:44.920 --> 0:01:47.000 than you do in your small cap So that was 0:01:47.000 --> 0:01:50.080 a reason. And now you've added in the Nvidia. So 0:01:50.160 --> 0:01:54.080 actually that is playing out fairly well. But of course 0:01:54.120 --> 0:01:55.360 you have to think about your S and P five 0:01:55.440 --> 0:01:59.040 hundred target. Could it go back to the September low? Well, 0:01:59.240 --> 0:02:01.320 last techer is doing this world. The maths just doesn't 0:02:01.320 --> 0:02:01.720 add up. 0:02:02.040 --> 0:02:03.560 Master does an add up for the S and P. 0:02:03.840 --> 0:02:05.840 Then that's that one hundred. Does the mass add up 0:02:05.840 --> 0:02:07.960 for the US stocks fifty? 0:02:08.320 --> 0:02:10.200 That's an interesting one, the U stocks fifty. I mean, 0:02:11.040 --> 0:02:14.840 we keep having this conversation with clients about US exceptionalism 0:02:15.080 --> 0:02:17.360 about six months ago, Everyone's like, well, look maybe for 0:02:17.400 --> 0:02:19.280 the next decade we could have higher inflation. This is 0:02:19.360 --> 0:02:23.720 value trade. Therefore, Europe is in the ascendency. And then 0:02:23.760 --> 0:02:28.560 you have this movement back INTOAI. Sorry, and actually the 0:02:28.720 --> 0:02:31.200 US is back and that's what everyone is talking about. 0:02:31.360 --> 0:02:33.840 And certainly from our perspective, yes, as a cyclical or 0:02:33.840 --> 0:02:36.440 as a tactical trade. At the moment, the US is 0:02:36.480 --> 0:02:38.679 not our favorite region. But if you're looking out of 0:02:38.760 --> 0:02:40.320 a ten year period, do you want to be focused 0:02:40.400 --> 0:02:42.200 on the US or Europe? Well, it's one hundred percent 0:02:42.200 --> 0:02:42.560 in US. 0:02:42.919 --> 0:02:45.360 Back home, you've just come from London. How are they 0:02:45.400 --> 0:02:47.720 thinking about this now? They've been parlering into our VMH 0:02:48.400 --> 0:02:51.239 stock was flying data out of China starts to weaken. 0:02:51.320 --> 0:02:52.800 Are they abandoning that trade quickly? 0:02:53.760 --> 0:02:54.000 Yeah? 0:02:54.040 --> 0:02:56.399 I think there's a lot of disappointment, and I think 0:02:56.400 --> 0:02:58.679 they're quickly cutting those positions. And the thing is is 0:02:58.720 --> 0:03:01.360 that look at the moment, so many people are positioned 0:03:01.440 --> 0:03:04.040 for bearishness in the in the broad market. They've got 0:03:04.040 --> 0:03:06.359 a cut wherever makes the most sense, where there isn't 0:03:06.400 --> 0:03:10.800 as much confusion, And I think with the China story, 0:03:10.880 --> 0:03:12.760 there is a general feeling that this is going to 0:03:12.760 --> 0:03:15.360 be very disappointing the second half of the year. It 0:03:15.440 --> 0:03:18.280 could still reach slightly the GDP target, but we're not 0:03:18.320 --> 0:03:20.960 looking anything like the kind of stimulus measures that we 0:03:20.960 --> 0:03:23.840 would have seen in previous cycles. So, yes, the China 0:03:23.919 --> 0:03:26.240 trade is coming down, and actually as a result of that, 0:03:26.320 --> 0:03:29.440 because of the European exposure to China that is also 0:03:29.440 --> 0:03:30.080 coming down as well. 0:03:30.120 --> 0:03:31.880 You said that people are looking for ways to express 0:03:31.919 --> 0:03:35.360 their bearish views. They're struggling to find the places. What 0:03:35.440 --> 0:03:38.119 other places are you seeing them express their bearish views 0:03:38.120 --> 0:03:40.520 at a time when it's dangerous to do so, and 0:03:40.520 --> 0:03:42.880 it's unclear the best way to really express that. 0:03:43.520 --> 0:03:46.080 Well, if you have if you can do broad asset allocation, 0:03:46.280 --> 0:03:48.240 then really the place to be focused is fixed income. 0:03:48.280 --> 0:03:53.600 Core fixed income is your best place to show that bearishness. Quality, defensive, 0:03:54.040 --> 0:03:56.400 those are the areas probably hig yield is not the 0:03:56.520 --> 0:03:58.680 area that you want to be focusing on. You if 0:03:58.720 --> 0:04:00.960 you believe that a slow down is cup and then 0:04:01.000 --> 0:04:03.040 there's a core part of it, which is still alternatives 0:04:03.080 --> 0:04:05.360 that that trade continues to play on fairly well. It 0:04:05.400 --> 0:04:08.520 provides really good diversification. I mean, we saw that during 0:04:08.520 --> 0:04:12.880 the SVB crisis, the things like infrastructure continue to perform 0:04:12.920 --> 0:04:15.560 extremely well. So if you are one of the people 0:04:15.600 --> 0:04:18.000 that believes that there is an economic slow downcoming, there 0:04:18.040 --> 0:04:20.800 are ways to play this which maybe are not as 0:04:21.360 --> 0:04:24.080 controversial as cerny what you see for the equity market, have. 0:04:24.120 --> 0:04:26.920 You shifted your view in terms of what you believe 0:04:27.120 --> 0:04:29.680 is defensive? And I ask this because we keep hearing 0:04:29.720 --> 0:04:31.839 about how Apple and some of the big tech stocks 0:04:31.839 --> 0:04:35.359 have gone from high beta interst rate sensitive sectors to 0:04:35.440 --> 0:04:38.760 suddenly the star warts of the market, the engines of growth, 0:04:38.760 --> 0:04:40.520 the place that you have to be if you want 0:04:40.520 --> 0:04:41.760 to be safe. Are you buying that? 0:04:42.760 --> 0:04:44.720 Well, look, the growth trade is typically where you want 0:04:44.760 --> 0:04:47.080 to go if you believe that the economic environment is 0:04:47.080 --> 0:04:49.120 turning more negative. That has always been the case. Only 0:04:49.160 --> 0:04:52.360 all of our models show that same story. The AI 0:04:52.480 --> 0:04:54.920 is that additional secular story where there may be well 0:04:54.960 --> 0:04:57.800 be froth, but certainly we bind the idea that technology, 0:04:58.160 --> 0:05:01.000 and not just AI, but technology is for the future. 0:05:01.320 --> 0:05:04.160 We actually made a very reluctant decision to color tech 0:05:04.200 --> 0:05:07.720 exposure last year, in last January in twenty twenty two, 0:05:07.760 --> 0:05:10.680 because of the FAED hiking cycle coming up. But we 0:05:10.760 --> 0:05:12.599 continue to be the long term believers in tech, which 0:05:12.600 --> 0:05:15.880 is why we went in. Plus, the very important cyclical fact. 0:05:15.640 --> 0:05:17.080 Is, well the start twenty two that was the right 0:05:17.120 --> 0:05:19.800 decision because tech was just brutal. Can I just finish 0:05:19.800 --> 0:05:21.839 on the loads of October? Where are you on the 0:05:21.839 --> 0:05:23.520 loads of October now? Because we used to go back 0:05:23.560 --> 0:05:26.559 and forth about whether we'd retest those lows they're twenty 0:05:26.600 --> 0:05:29.719 points ago, we've had a twenty percent rally off the bottom. 0:05:29.880 --> 0:05:31.360 Are we retesting those loas? 0:05:33.839 --> 0:05:35.920 I'll be honest, I think this is a really, really difficult 0:05:35.960 --> 0:05:37.880 decision to make. So look, the tech story means that 0:05:37.920 --> 0:05:40.280 it's unlikely, right you could see a little bit of 0:05:40.279 --> 0:05:42.360 a pullback because of the froth in the market. Yes, 0:05:43.160 --> 0:05:45.720 But if you don't get that pullback and you get 0:05:45.720 --> 0:05:48.039 the momentum story that Julian was talking about yesterday, if 0:05:48.080 --> 0:05:50.600 you get that momentum pulling up the rest of the market, 0:05:51.000 --> 0:05:53.679 and actually then you're getting a melt up potential deeper 0:05:53.680 --> 0:05:55.279 recession down the line. I do believe if you don't 0:05:55.279 --> 0:05:57.880 get a recession sooner, the later it is, the harder 0:05:57.920 --> 0:05:59.880 it becomes. So you want to get this out the way. 0:06:00.880 --> 0:06:03.200 And if that happens, then maybe you get another move up, 0:06:03.320 --> 0:06:04.640 but next year it'll be a tougher story. 0:06:04.720 --> 0:06:06.359 Same it good to say in New York. Great to 0:06:06.360 --> 0:06:09.320 catch up of principals and management. 0:06:12.960 --> 0:06:16.920 Briefing US now. Marilyn Watson with Black Rocketed Global Fundamental 0:06:16.920 --> 0:06:20.560 Fixed Income Strategy, Maryland. The pain in the bond market 0:06:20.800 --> 0:06:25.240 is down seventeen percent on the Bloomberg Total Return Index 0:06:25.279 --> 0:06:28.119 and we've come back six or seven percent. We've come back. 0:06:28.720 --> 0:06:33.280 Just a simple question, now, what do you presume price up, 0:06:33.440 --> 0:06:37.560 yield down? Do you assume a new leveling or do 0:06:37.680 --> 0:06:40.839 we revisit price down yield up. 0:06:42.760 --> 0:06:45.200 Yeah, So, as you say, we've seen a huge amount 0:06:45.200 --> 0:06:47.200 of holacility in fixing markets. 0:06:46.960 --> 0:06:49.400 In particular this year, which has exceeded that. 0:06:49.360 --> 0:06:52.400 In the equity market in the markets as well. I 0:06:52.440 --> 0:06:55.160 think now that we've seen the resolution of the debt 0:06:55.200 --> 0:06:59.120 ceiling negotiations and then seventy around that, we now know 0:06:59.240 --> 0:07:01.040 that we're going to have a huge amount of issuance 0:07:01.120 --> 0:07:03.560 coming the US treasure We needs to build up the 0:07:03.760 --> 0:07:06.160 TJ balance again, so we know we have a lot 0:07:06.160 --> 0:07:09.760 of issuance coming there, and that amount of supply obviously 0:07:09.800 --> 0:07:12.440 will need to be absorbed by the market. On the 0:07:12.480 --> 0:07:14.680 other hand, that is going to also obviously, you know, 0:07:14.760 --> 0:07:17.040 train some sort of liquidity from the system as well. 0:07:17.360 --> 0:07:19.840 But I think at the moment, you know, when we 0:07:19.880 --> 0:07:21.720 talk about f MC rhetoric, when we look at the 0:07:21.800 --> 0:07:24.880 data coming through, we saw, you know, in terms of 0:07:24.880 --> 0:07:28.760 the jobs data, the name market remains incredibly tight. We 0:07:28.880 --> 0:07:31.960 have seen some softening in terms of sentiment obviously, and 0:07:32.160 --> 0:07:35.200 you know other data, but you know, consumers continue to spend, 0:07:35.800 --> 0:07:39.760 the real estate housing market remains on a pretty solid footing, 0:07:40.640 --> 0:07:42.960 and so the economy actually in the US remains on 0:07:43.000 --> 0:07:46.080 a very us putting at the moment. And so I think, 0:07:46.160 --> 0:07:48.400 you know, coming into next week to say, all eyes 0:07:48.440 --> 0:07:51.480 will certainly be on the CPI data. Inflation is still 0:07:51.640 --> 0:07:55.040 you know, far above the Fed's target, and so they 0:07:55.120 --> 0:07:57.560 may choose to pause or to skip or have you 0:07:57.560 --> 0:07:59.920 want to phrase it. But it's certainly not a dunde 0:08:00.240 --> 0:08:02.720 that there won't be more hikes to come. But I think, 0:08:02.760 --> 0:08:05.040 you know, they need to absorb and continue to look 0:08:05.080 --> 0:08:09.480 at the lags in the transmission, you know, the previous 0:08:09.840 --> 0:08:10.360 rate hikes. 0:08:10.560 --> 0:08:14.480 So take that excuse me, take that MAC review and 0:08:14.560 --> 0:08:17.440 bring it over to a strategy. Do you manage for 0:08:17.520 --> 0:08:20.400 coupon or do you manage for total return? 0:08:22.200 --> 0:08:24.080 Well, we try to manage for both. So I think 0:08:24.120 --> 0:08:28.240 if you have a very flexible, you know, unconstrained approach 0:08:28.240 --> 0:08:30.400 to fixed income, you can have both. And so at 0:08:30.440 --> 0:08:34.640 the moment you can have very high quality, decent carry, 0:08:35.000 --> 0:08:37.760 which given spreads today, you also do have a decent 0:08:37.800 --> 0:08:40.560 amount of buffer. Now you would have to see a 0:08:40.600 --> 0:08:44.680 significant repricing from here to actually see you know, a 0:08:44.720 --> 0:08:47.360 further loss in total return. So I think you can 0:08:47.400 --> 0:08:47.880 have both. 0:08:47.960 --> 0:08:49.640 What we try to do is construct. 0:08:49.320 --> 0:08:53.280 Portfolio where you know, we have you know, low volatility, 0:08:53.600 --> 0:08:56.800 where we have decent carry, decent liquidity, and we have 0:08:56.880 --> 0:08:59.160 a very wide range of different positions as well, so 0:08:59.200 --> 0:09:02.200 we can take advantage of relative value positions where we're 0:09:02.240 --> 0:09:05.720 stripping out the beta effectively. And you know, in today's 0:09:05.760 --> 0:09:08.800 environment where we see a lot more dispersion between individual 0:09:08.800 --> 0:09:11.760 bond issuers in between the individual names, it's much easier 0:09:11.760 --> 0:09:15.360 as well to capture that relative value. You know, we're 0:09:15.360 --> 0:09:19.200 taking advantage of the different valuations between you know, for example, 0:09:19.240 --> 0:09:22.520 some names and emergent markets in her yield in investment 0:09:22.600 --> 0:09:25.439 grade corporate, So I mean think the bond market today 0:09:25.640 --> 0:09:28.040 is a very different beast to the one that was 0:09:28.200 --> 0:09:30.800 a year ago, five years ago, and I think the 0:09:30.840 --> 0:09:33.760 amount of opportunities out there now are so much larger 0:09:34.240 --> 0:09:37.120 that you know, if you can construct a very very 0:09:37.240 --> 0:09:40.680 balanced portfolio with a lot of different risk factors, you 0:09:40.679 --> 0:09:42.920 can get both the income and the carry, but you 0:09:42.960 --> 0:09:44.679 can also help to protect returns. 0:09:44.960 --> 0:09:47.720 I can't remember the last time the two massive bond 0:09:47.720 --> 0:09:51.480 shops have had such divergent views on where long term 0:09:51.559 --> 0:09:53.200 rates are going to go. And I'm thinking of you 0:09:53.360 --> 0:09:56.280 Black Rock as well as JP Morgan Asset Management that 0:09:56.400 --> 0:09:59.000 see you've got by Michael saying the entire curve is 0:09:59.000 --> 0:10:02.120 going to be at three percent or below in the 0:10:02.200 --> 0:10:05.240 near term. How do you push back against that, that 0:10:05.280 --> 0:10:07.600 feeling that we are not going to go back to 0:10:07.679 --> 0:10:10.400 a low rate era and see something that does depart 0:10:10.480 --> 0:10:11.840 from the past twenty years. 0:10:13.160 --> 0:10:15.240 So I think, first of all, we do think that 0:10:15.320 --> 0:10:19.600 inflation it's coming down, but it's going to remain elevated 0:10:19.760 --> 0:10:23.280 and at the higher levels than we've seen in previous cycles. 0:10:23.600 --> 0:10:25.720 I think, you know, inflation is or it looks like 0:10:25.720 --> 0:10:29.480 it's going to be relatively persistent. Secondly, I think the 0:10:29.480 --> 0:10:31.720 FED is going to remain higher for longer as well, 0:10:31.760 --> 0:10:35.000 And as I say, you know, it may well move more. 0:10:35.400 --> 0:10:38.240 We'll see what they do next next week and in 0:10:38.280 --> 0:10:41.200 the coming months as well. But given the economic data 0:10:41.200 --> 0:10:43.720 we have at the moment, then it's highly likely or 0:10:43.880 --> 0:10:46.439 very possible that the FED could hype again and then 0:10:46.440 --> 0:10:49.080 they say, we have this huge amount of issuance you 0:10:49.120 --> 0:10:52.440 know that's coming in the market as well. And I 0:10:52.440 --> 0:10:54.160 mean on the other side of that, obviously, we do 0:10:54.200 --> 0:10:56.400 have a lot of demand from investors who are still 0:10:56.440 --> 0:10:59.240 parked in cash or who are parked in money market 0:10:59.240 --> 0:11:02.319 funds and you know, somewhat on the sidelines. But I 0:11:02.360 --> 0:11:04.199 think when you look at long term, when you look 0:11:04.240 --> 0:11:07.000 at the economy, when you look at growth, and you're 0:11:07.040 --> 0:11:09.160 talking about the tech sector before, we're continuing to see 0:11:09.320 --> 0:11:13.040 huge amount of investment in that area that's continuing to 0:11:13.080 --> 0:11:16.160 drive productivity. So I think there are a huge number 0:11:16.160 --> 0:11:19.200 of factors that mean that you know, inflation and rates 0:11:19.280 --> 0:11:20.439 will remain higher for longer. 0:11:20.760 --> 0:11:22.679 How much higher Where do you see the curve kind 0:11:22.679 --> 0:11:23.760 of settling out at. 0:11:25.360 --> 0:11:26.160 So it's hard to see. 0:11:26.240 --> 0:11:29.360 I mean, we could see a little bit higher sort 0:11:29.360 --> 0:11:32.480 of you know, from here over the next few months, 0:11:32.480 --> 0:11:35.640 depending on how the economic data comes through, depending on 0:11:35.720 --> 0:11:38.320 what we see in terms of the stresses that continue 0:11:38.360 --> 0:11:41.160 toble through in the in the banking sector and elsewhere. 0:11:42.440 --> 0:11:45.480 I mean, I think there are reasonable levels now if 0:11:45.520 --> 0:11:48.040 you look at you know, certainly the fixing market compared 0:11:48.080 --> 0:11:50.839 to the stock market, then you know, I would say 0:11:50.840 --> 0:11:53.400 the actually market maybe is overpriced, but I think from 0:11:53.440 --> 0:11:54.199 here you could see them. 0:11:54.120 --> 0:11:54.760 A little bit higher. 0:11:54.800 --> 0:11:57.080 But it really depends on the data that we see 0:11:57.120 --> 0:11:59.599 coming through in terms of inflation, in terms of the 0:11:59.640 --> 0:12:01.559 economy over the next few months. 0:12:01.640 --> 0:12:04.960 Usually it's the equity people commenting on bonds. Mount and 0:12:05.000 --> 0:12:06.880 that was a comment on equities there. It's kind of 0:12:06.920 --> 0:12:08.240 interesting to me. I've heard that a couple of times 0:12:08.280 --> 0:12:10.360 now in the last twenty four hours. Mounting the bond 0:12:10.400 --> 0:12:12.760 investors thrown some shade at equities. 0:12:12.760 --> 0:12:13.440 What's that about. 0:12:14.720 --> 0:12:19.880 Well, it's been a long time coming, John, I could 0:12:19.880 --> 0:12:23.080 say that, I you know, I really think that that 0:12:23.120 --> 0:12:25.280 now the bond market has a huge amount of values. 0:12:25.360 --> 0:12:27.960 Off Mountain Watson a Blackrock Mountain. Thank you. 0:12:38.280 --> 0:12:42.200 We need a political brief here. She's hugely popular with 0:12:42.360 --> 0:12:44.520 all of you. Thank you so much for supporting Wendy 0:12:44.520 --> 0:12:47.480 shil Or Brown University, Director of the tomb And Center 0:12:47.520 --> 0:12:51.880 for American Politics. Give me the history here on how 0:12:51.960 --> 0:12:56.880 people of low polling either party can advance towards the primaries. 0:12:57.200 --> 0:12:59.920 If I see from five thirty eight to fifty four percent, 0:13:00.360 --> 0:13:02.800 DeSantis less than half that, and the others are all 0:13:02.880 --> 0:13:07.160 single digit. Is there any history, Professor Schiller, of single 0:13:07.280 --> 0:13:09.200 digity people doing better? 0:13:11.440 --> 0:13:15.280 No, no cstantial history. I mean, you remember the expression 0:13:15.360 --> 0:13:18.880 the big mo, and we were talking about George Herbert 0:13:18.920 --> 0:13:21.480 Walker Bush way back when God about the big mo, 0:13:22.440 --> 0:13:25.440 and people perceived other people as more impalatable, and he 0:13:25.520 --> 0:13:28.280 ended up getting the nomination in nineteen eighty eight, for example. 0:13:29.040 --> 0:13:31.200 So I think that the issue here is the difference 0:13:31.240 --> 0:13:33.720 for Donald Trump in August when the first debate comes, 0:13:33.960 --> 0:13:36.480 is that everybody on the stage will be attacking him 0:13:36.720 --> 0:13:39.160 in this subtle way, but they are going to use 0:13:39.240 --> 0:13:42.160 him as the target. That's a new position for him. 0:13:42.360 --> 0:13:44.600 He wasn't really the front runner when he first announced. 0:13:44.640 --> 0:13:46.640 When we first got to the stage, he emerged as 0:13:46.679 --> 0:13:47.040 a star. 0:13:47.400 --> 0:13:49.440 But everybody else is trying to make their own case. 0:13:49.800 --> 0:13:53.199 Now they have to attack him subtly not to anger 0:13:53.240 --> 0:13:53.880 his supporters. 0:13:53.960 --> 0:13:55.880 And make a case for themselves. 0:13:56.080 --> 0:13:59.560 That's the big problem for the debate for everybody challenging Trump. 0:13:59.920 --> 0:14:02.360 You do that, well, there's not enough airtime in a 0:14:02.400 --> 0:14:04.160 debate with ten people. If that's how my people are 0:14:04.160 --> 0:14:05.000 going to be on the stage. 0:14:05.080 --> 0:14:08.720 Professor, you have a definitive textbook, which you know is 0:14:08.880 --> 0:14:12.640 great Civics one oh one on America. I told you once, Wendy, 0:14:12.720 --> 0:14:15.440 that you needed to rename the textbook follow the money. 0:14:15.840 --> 0:14:18.040 Is that what this is about? I mean, are all 0:14:18.040 --> 0:14:21.880 these people running because of a financial advantage in running? 0:14:22.840 --> 0:14:23.000 Well? 0:14:23.040 --> 0:14:25.400 That has become a new cottage industry that you know, 0:14:25.440 --> 0:14:28.000 with the advent of social media and the way of 0:14:28.200 --> 0:14:31.520 making a reputation without the mainstream media, then you have 0:14:31.600 --> 0:14:34.840 a way of getting speaking gigs, of raising donations. 0:14:35.160 --> 0:14:36.760 I mean, it just changes everything. 0:14:36.840 --> 0:14:39.960 But I still think you need the biggest money donors 0:14:40.240 --> 0:14:42.600 to make it through the primary season to really launch 0:14:42.600 --> 0:14:43.520 a challenge to Trump. 0:14:43.520 --> 0:14:45.880 For example, you need Chris Christy. Where's you going to 0:14:45.920 --> 0:14:47.640 get the money. There's a couple of people in Jersey that. 0:14:47.680 --> 0:14:50.000 Have given a lot of money to the Republican presidential 0:14:50.000 --> 0:14:51.160 campaigns in the past. 0:14:51.480 --> 0:14:53.560 Are they going to back Christie? Are they going to 0:14:53.640 --> 0:14:54.520 back Mike Pence. 0:14:54.680 --> 0:14:57.360 I mean, with enough really big money, you can run 0:14:57.480 --> 0:15:01.040 enough ads in some states may be that not me, 0:15:01.240 --> 0:15:05.000 but not super solid to dent him. But where are 0:15:05.000 --> 0:15:07.760 those big money donors going to line up? They haven't 0:15:07.760 --> 0:15:10.840 really announced for Trump, but they aren't really lining up. 0:15:10.840 --> 0:15:12.600 We saw a little movement towards the Santis, but. 0:15:12.600 --> 0:15:14.800 Then they backed off when you had a pretty disastrous 0:15:15.080 --> 0:15:17.040 front announcement of was a campaign. 0:15:17.360 --> 0:15:19.440 So now where do they go? That will make a. 0:15:19.400 --> 0:15:23.040 Difference, exactly as John's saying, between now and August, those 0:15:23.080 --> 0:15:24.440 signals are going to be important. 0:15:24.560 --> 0:15:26.480 One other signal it's going to be important's whether there's 0:15:26.560 --> 0:15:30.400 unification among the different Republican candidates on some key issues 0:15:30.520 --> 0:15:33.560 that affect the money that you're following, such as trade. 0:15:33.720 --> 0:15:36.200 How much is this sort of a unified view not 0:15:36.240 --> 0:15:39.160 only against China but in general in a more sort 0:15:39.200 --> 0:15:42.480 of regionalization of trade, a pullback from sort of the 0:15:42.520 --> 0:15:44.200 traditional globalization models. 0:15:45.320 --> 0:15:48.920 Well, Lisa, this is an amazingly important point because our 0:15:48.960 --> 0:15:51.720 primary is just no regional right, and so you still 0:15:51.760 --> 0:15:54.840 need the big money to worry about regulation and free 0:15:54.880 --> 0:15:57.200 trade and taxes, and that's pretty constant. 0:15:57.200 --> 0:15:59.320 That's what they've always worried about. But they also want 0:15:59.320 --> 0:16:00.480 stability and certainty. 0:16:00.480 --> 0:16:03.120 They don't want chaos, they don't want unpredictability. 0:16:03.280 --> 0:16:05.000 And it's funny because it's not funny. 0:16:04.720 --> 0:16:08.000 But Trump, you know, presents pretty chaotic future. We don't 0:16:08.040 --> 0:16:09.760 know what he's ever going to do in any given moment. 0:16:09.880 --> 0:16:12.800 But now DeSantis has proven to be someone who may 0:16:12.840 --> 0:16:14.680 not be predictable. 0:16:14.200 --> 0:16:15.920 Who may kind of want to jump the shark in 0:16:16.000 --> 0:16:16.400 terms of. 0:16:16.360 --> 0:16:19.120 Regulating business with his few but Disney, is he really 0:16:19.120 --> 0:16:22.200 a reliable investment? And that's what I think businesses are 0:16:22.240 --> 0:16:25.800 looking for traditional Republican platform, but it's also coupled with 0:16:25.920 --> 0:16:29.600 certainty and competence in terms of smooth government running. 0:16:29.680 --> 0:16:31.760 We saw McCarthy sent that signal. 0:16:31.480 --> 0:16:34.840 Clearly to Wall Street. I will make sure the trains 0:16:34.920 --> 0:16:37.280 run on time and I won't crash the economy. One 0:16:37.280 --> 0:16:38.600 big question, very clear signal. 0:16:38.720 --> 0:16:40.760 One big question I keep hearing from analysts on Wall 0:16:40.760 --> 0:16:43.080 Street is if the rhetoric on both sides of the 0:16:43.120 --> 0:16:46.920 aisle is rewarded, if it's inflammatory towards TIA, in particular, 0:16:47.000 --> 0:16:49.800 saying that we want to isolate them, we are in 0:16:49.920 --> 0:16:52.880 a huge rivalry with them. How are we going to 0:16:52.920 --> 0:16:55.800 soften the tensions even as Tony Blinket heads over to Beijing. 0:16:57.000 --> 0:16:59.720 Well that's I mean, I think the question is how 0:16:59.800 --> 0:17:02.920 much cheology or how much credibility do these Republican candidates 0:17:02.960 --> 0:17:04.840 for president have on foreign policy? 0:17:05.040 --> 0:17:08.080 You know, Trump made China the enemy, right, you know, 0:17:08.320 --> 0:17:09.960 very large tariffs. 0:17:09.480 --> 0:17:12.560 And then with COVID, you know, blaming China. 0:17:12.800 --> 0:17:14.600 How's he going to walk that back? He's not going 0:17:14.640 --> 0:17:15.600 to be able to do that. 0:17:16.200 --> 0:17:18.320 And Ron DeSantis, you know, just had a big Asia 0:17:18.359 --> 0:17:20.639 trip trying to sell himself as somebody who can negotiate 0:17:20.800 --> 0:17:21.800 the world stage. 0:17:21.920 --> 0:17:24.240 You know, Mike Pence has a pretty calm demeanor. What's 0:17:24.280 --> 0:17:26.280 he going to do? How is he going to sell 0:17:26.359 --> 0:17:27.040 himself this way? 0:17:27.160 --> 0:17:29.320 And the rest of the candidates don't really have except 0:17:29.320 --> 0:17:31.920 for Rinickki Haley have a lot of foreign policy experience. 0:17:32.200 --> 0:17:35.360 So who's got the credibility in the Republican primary on 0:17:35.560 --> 0:17:37.000 China and China. 0:17:36.720 --> 0:17:37.320 Doesn't even know? 0:17:37.480 --> 0:17:39.080 I mean, who do you really look to and say 0:17:39.119 --> 0:17:41.399 this person could get elected and we can do business 0:17:41.400 --> 0:17:43.880 with them. You know, that's where Biden has been somewhat 0:17:43.960 --> 0:17:46.560 measured with China, as you just point out, you know, 0:17:46.640 --> 0:17:49.960 Secretary Stata sort of attacking China but not attacking China, 0:17:50.600 --> 0:17:52.959 and that's going to be somewhat calming as a signal, 0:17:53.000 --> 0:17:54.800 I think to the business community, Wendy. 0:17:54.560 --> 0:17:58.320 This one nine that we haven't mentioned Kevina Youngkin Wheny 0:17:58.359 --> 0:18:00.560 does this feeling at the moment from people I speak 0:18:00.560 --> 0:18:03.400 to that the worst that governed descentist does, or rather 0:18:03.760 --> 0:18:06.520 the fact that he's not improving the more Governor Youngkin 0:18:06.520 --> 0:18:08.600 thinks about making a run. How are you thinking about 0:18:08.600 --> 0:18:08.960 that one? 0:18:10.119 --> 0:18:12.719 No, I just don't know that he has, you know, 0:18:13.040 --> 0:18:15.520 the ability to jump to the national stage with any 0:18:15.680 --> 0:18:16.600 force or energy. 0:18:16.800 --> 0:18:17.879 He's got a good platform. 0:18:17.960 --> 0:18:20.800 He won an election against somebody was well known and 0:18:20.880 --> 0:18:24.080 not always well liked, term a call up in Virginia, 0:18:24.200 --> 0:18:25.960 so he got kind of lucky with his opposition. 0:18:26.520 --> 0:18:28.359 And Virginia is still a swing state. 0:18:28.440 --> 0:18:30.880 It's swung more to the right recently, but it's still 0:18:30.880 --> 0:18:31.600 a swing state. 0:18:31.800 --> 0:18:34.440 Do you really nominate for your nominee. 0:18:33.960 --> 0:18:37.479