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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. It is time to bring

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Speaker 1: in our next guest. Now we have Marvin Low. Very

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Speaker 1: lucky to happen because he deals in all sorts of

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Speaker 1: derivatives and trades that I'm sure are particularly exciting at

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Speaker 1: a time like this. Marvin Low of State Street in Boston. So, Marvin,

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Speaker 1: have you been having found the last couple of days

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Speaker 1: in the market. It certainly has been a wild ride,

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Speaker 1: hasn't it. Um. I'm I'm tired like everyone else, so

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Speaker 1: we would like to move on to the next thing.

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Speaker 1: But you know, clearly we're still in the service of

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Speaker 1: the election and you know, waiting outcomes. How do you

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Speaker 1: read it, though? How do you read this market where

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Speaker 1: we've had a vix all the way off, as Paul said,

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Speaker 1: coast of forty but way back down now, even though

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Speaker 1: there's more more uncertainty over who's actually going to be

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Speaker 1: president of this country? Yeah, I mean, I mean only UM.

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Speaker 1: I had always thought that the Senate was the you know,

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Speaker 1: and of course the um who occupies the White Houses

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Speaker 1: is clearly important for for tone, but the Senate was,

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Speaker 1: um potentially one of the most important outcomes, UM, particularly

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Speaker 1: for businesses and how to approach the next four years.

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Speaker 1: And from that perspective, we do have clarities. So I

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Speaker 1: think that there is a lot of pricing around, UM,

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Speaker 1: around kind of the gridlock that divided Congress provides. So Marvin, again,

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Speaker 1: it looks like if current transfold, we we will have

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Speaker 1: a split government in terms of the Democratic White House

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Speaker 1: and a Republican Senate. What what do you think the

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Speaker 1: from a fiscal stimus package can get done? Should get done?

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Speaker 1: What's kind of in your forecast? Yeah, should should get done,

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Speaker 1: Absolutely can get done. UM. I think it's the size

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Speaker 1: that ultimately it has has been um the unknown over

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Speaker 1: the last couple of weeks. Ultimately, you know, ultimately once again, UM,

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Speaker 1: you know, I'm I'm are marking somewhere around a trillion dollars,

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Speaker 1: certainly much less than the conversation around the Blue Wave,

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Speaker 1: which was closer to three. But even more important, Um,

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Speaker 1: that blue Wave discussion also included you know, infrastructure spending

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Speaker 1: and potential transfer of wealth types type strategies, if you will.

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Speaker 1: And and that is off the table with kind of

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Speaker 1: this divided Congress that we're looking at now. But but

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Speaker 1: should happen, um, And and now we're kind of parsing

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Speaker 1: when it will happen. Alright, So you think a trillion,

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Speaker 1: which is pretty stunning given that we were at one

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Speaker 1: point eight trillion on the Republican side before this all happened.

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Speaker 1: What brings you down to a trillion? Do you think

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Speaker 1: that because Mitch McConnell seems to have work control over

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Speaker 1: the santut now and there may not even be Speaker

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Speaker 1: Nancy Pelosi in the next version of Congress, that that's

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Speaker 1: why we'll come back down again. Yeah, you know, I

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Speaker 1: mean the the um the Senate Republicans certainly were at

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Speaker 1: a much lower level than even even that brilliant Um. Uh.

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Speaker 1: It does depend I think who occupies the White House. Um.

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Speaker 1: You know, there's all conjecture at this point. Um, But

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Speaker 1: you know, I could see I could see if um,

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Speaker 1: President Trump somehow is reelected that the package might be

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Speaker 1: larger because he would be able to um UH to

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Speaker 1: pressure the Senate Republicans in a way that President Biden couldn't.

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Speaker 1: So you know, there's still ultimately a lot in flux.

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Speaker 1: But I think I think the key is that UM

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Speaker 1: it is needed and likely will happen UM. You know,

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Speaker 1: particularly as we're on the eve of non you know,

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Speaker 1: the next employment report, and you know we're we're we're

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Speaker 1: parsing economic data which, while not terrible, certainly isn't improving

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Speaker 1: that much. Margaret, are you surprised at perhaps how well

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Speaker 1: risk assets, equities credit is holding up in the face

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Speaker 1: of what are just the worst pandemic numbers we've seen

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Speaker 1: since the beginning of this Yes and no, UM. I

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Speaker 1: mean certainly, if you asked me in the middle of March,

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Speaker 1: you know where where a lot of these risk levels

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Speaker 1: would be, I would not be here UM. And and

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Speaker 1: you know I'm not ashamed to ultimately say that UM.

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Speaker 1: The biggest determinant for risk assets has been the amount

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Speaker 1: of stimulus UM, and it has been kind of the

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Speaker 1: dual approach of both fiscal and monetary UM. I think

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Speaker 1: what we wind up with is UM comfort, or the

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Speaker 1: need for the Fed ultimately to remain very very active

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Speaker 1: in these markets, and I think and I think we're

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Speaker 1: seeing some of that make its way through risk assets

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Speaker 1: over the last couple of days. UM that the Fed

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Speaker 1: has no choice now but to really go full out

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Speaker 1: on anything that it can UM, because we're not going

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Speaker 1: to get the degree of fisical that I think that

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Speaker 1: they had been hoping for and that the Blue Wave

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Speaker 1: would have implied. So the trillion that you think might

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Speaker 1: come out of Congress, where will it go? Will there

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Speaker 1: be help for the states? Will there be any targeted

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Speaker 1: stimulus for certain industries? Yeah, you know, and and and

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Speaker 1: and a lot of this still UM still kind of

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Speaker 1: requires UM knowledge of who's gonna sit in there, who's

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Speaker 1: gonna sit in the in the White House. But certainly

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Speaker 1: unemployment benefits UM kind of a restart of that. Uh.

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Speaker 1: Certainly something UM on the small business side of things,

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Speaker 1: because I do think that there is agreement that we've

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Speaker 1: got to help mainstreat more. UM. There's still contention around

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Speaker 1: around state eight and kind of I think that's one

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Speaker 1: of the more volatile aspects of the discussion. UM. So

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Speaker 1: the easy parts of small business and certainly the certainly

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Speaker 1: UM bring unemployment benefits kind of back into discussion. So Marvin,

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Speaker 1: as a global macro strategist, where do you see I

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Speaker 1: guess the best opportunities. Here's you as you look at

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Speaker 1: twelve months are you are you geographically diversified to the

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Speaker 1: extent you'd like to be or do you find yourself

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Speaker 1: a little bit more concentrated in the US? Yeah? You

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Speaker 1: know what, I still find myself concentrating in the US.

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Speaker 1: You know, I think US companies UM have an advantage

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Speaker 1: over many of the other companies around the world. So

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Speaker 1: really this kind of tech discussion that you know, we've

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Speaker 1: all participated into the last six months still makes sense.

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Speaker 1: UM yields themselves. You know, I think that without stimulus

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Speaker 1: and kind of with UM, the potential of inflation UM

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Speaker 1: increasing as part of UM kind of the reflation trade

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Speaker 1: going away keeps yields kind of at these levels. The

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Speaker 1: FED ultimately UM needing to be aggressive, will you know,

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Speaker 1: help those yields remain at these levels. So, you know,

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Speaker 1: taking that threat and kind of UM figure out which

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Speaker 1: asset classes are most attractive to you and that environment

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Speaker 1: is kind of what we do. So certainly the tech

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Speaker 1: discussion still makes makes sense to reach for yield still

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Speaker 1: makes sense. UM. I think emerging markets become more interesting

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Speaker 1: if there's a little bit more stability, But it does

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Speaker 1: wind up being, you know, what parts of the world

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Speaker 1: in which countries are most interested in UM, and then

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Speaker 1: reach for yield really does uh go into go into

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Speaker 1: various parts of the spread market, so kind of looking

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Speaker 1: for those spread products, which makes sense in this in

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Speaker 1: this new if you will, divide a government is what

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Speaker 1: we're doing now. Why though our equities rallying as well

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Speaker 1: as all sorts of safe haven assets from bonds, treasuries

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Speaker 1: obviously to gold. You know, I I think I think

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Speaker 1: UM kind of them. The spectr that yields might rise

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Speaker 1: UM to an uncomfortable level is off the table right now,

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Speaker 1: so you're kind of seeing that long duration trade uh

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Speaker 1: play its way into it. UM. I do think that

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Speaker 1: investors had been somewhat neutral kind of going into the

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Speaker 1: elections with with the risk associated with it and UM.

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Speaker 1: You know, there's still a lot of repair that needs

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Speaker 1: to be done in the economy. But kind of a

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Speaker 1: divided government is you know, with an active FED UM

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Speaker 1: is good for financial assets UM. You know, uh, you know,

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Speaker 1: as as kind of a base case, if you will,

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Speaker 1: we're speaking with Marvin Low, Global macro strategists at State Street. Marvin,

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Speaker 1: you mentioned you touched on just emerging markets. It's it

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Speaker 1: seems like, I know a lot of people are tempted

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Speaker 1: to go out on the risk curve and take a

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Speaker 1: look at emerging markets. But boy, with this pandemic backdrop

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Speaker 1: and with some of the economic uncertainty that's like it

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Speaker 1: to continue from it, it just feels like it just

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Speaker 1: isn't a time. How do you guys think about it? Yeah,

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Speaker 1: I mean, I mean generally, um, but most certainly there's

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Speaker 1: you know, and we're all making implications, um, and assumptions

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Speaker 1: as to what the new government is going to try

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Speaker 1: to do without really knowing you know, firmly what the

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Speaker 1: new government is going to look like even you know,

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Speaker 1: even if even if we're correct, and who sits in

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Speaker 1: the White House and how kind of how Congress is divided, um,

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Speaker 1: you know, where we're making guesses on what those policies

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Speaker 1: look like. So in terms of reflation and in terms

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Speaker 1: of um potentially um you know, uh, some benefits associated

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Speaker 1: with commodities and therefore commodity countries where we're we're making guesses.

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Speaker 1: So so gingerly, I do think that there is a

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Speaker 1: lot of liquidity in the market. Um, So funding for

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Speaker 1: for what the emerging markets might need to do to

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Speaker 1: kind of get their economies back in place seems to

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Speaker 1: be available, and that does provide some comfort, um, so

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Speaker 1: you know, parcel through it. There are there are ways

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Speaker 1: within the fixing come market to take out the FX exposure.

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Speaker 1: So you know, certainly have liked hard currency and bonds

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Speaker 1: as part of the discussion. UM in Asia right now

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Speaker 1: is certainly interesting, given that the virus seems to be

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Speaker 1: in better control and you know, um the data coming

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Speaker 1: out of Asia is a bit more solid. So you

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Speaker 1: know that ultimately is the process that I think all

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Speaker 1: investors in emerging markets need to go through. So obviously

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Speaker 1: fed Ter J. Powell will try to stay away from

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Speaker 1: anything political or partisan. Later on today when he speaks, nevertheless,

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Speaker 1: he'll get some questions about what he might be able

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Speaker 1: to do if there is no stimulus or delated stimulus

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Speaker 1: or a small stimulus. What can he say to calm

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Speaker 1: markets or not pull the middle tailsmen? Yeah, I mean certainly, certainly, um,

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Speaker 1: you know, continuing to say that the fet is there, um,

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Speaker 1: they will use all tools available, UM that they believe

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Speaker 1: they still have more tools UM that they can deploy. Uh.

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Speaker 1: You know, I think that I'm looking for kind of

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Speaker 1: twisting in their asset purchases, particularly with UM UH, with

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Speaker 1: the U. S. Treasury still issuing more long a data paper.

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Speaker 1: And you know, we had seen some of the steepening

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Speaker 1: of the curve, you know, prior to again the election results,

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Speaker 1: because I think that there's been so much coupon issuance

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Speaker 1: in the market. So UM, you know, I I think

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Speaker 1: that stage one but you know, his toolbox is UM

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Speaker 1: depleted relative to where we were a year, year and

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Speaker 1: a half ago. UM, and the Fed's going to continue

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Speaker 1: to be pushed UM towards obtaining its new long term

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Speaker 1: goals around inflation and around kind of helping the jobs market.

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Speaker 1: So uh, you know, for the time being, UM, there's

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Speaker 1: still que wei that they could do. There's still some twisting.

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Speaker 1: UM yields remained fairly controlled. Uh, and you know, they'd

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Speaker 1: like to see what the economy looks like as we

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Speaker 1: go into next year, with the virus still UM, you know,

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Speaker 1: front and center in terms of their concerns. Hey, Marvin,

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Speaker 1: just looking on my Bloomberg screen. Here I see gold

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Speaker 1: up forty two maybe forty three dollars announced. That's two

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Speaker 1: point to five percent five dollars announced for gold. What

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Speaker 1: do you think is going on in the gold market?

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Speaker 1: How do you guys? Uh have yourself position? V goal? Um? Yeah,

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Speaker 1: so so, UM, you know, I think that's part of

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Speaker 1: the dollar story at this point. Um, there's been uh,

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Speaker 1: a re acceleration of kind of this dollar debasement type story,

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Speaker 1: given that you know, the FED is probably going to

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Speaker 1: buy more bonds um. And and you know, kind of

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Speaker 1: relative to what other economy, other countries are able to do.

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Speaker 1: So you know, I do. I do think gold and

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Speaker 1: kind of that dollar debatement story go hand in hand. Um.

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Speaker 1: And you know that that that is a popular trade

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Speaker 1: that um uh that even if we don't get as

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Speaker 1: much stimulus, the FED can kind of offset that based

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Speaker 1: on how it approaches them as it purchases. So, Marvin,

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Speaker 1: if there was one piece of advice that you would

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Speaker 1: give to a client who calls you up today and said,

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Speaker 1: oh my gosh, you know then I'm terrified. I'm terrified

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Speaker 1: of what's going to happen. What would you tell them? Now?

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Speaker 1: I say, holistically, UM, you know, realize that the central

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Speaker 1: banks are still a large part of this discussion, and

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Speaker 1: you know, from a stimulus side of things, Washington will

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Speaker 1: get something done. Um. You know, it's the size that

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Speaker 1: we're arguing with, but you know, the economy needs it,

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Speaker 1: and um, I think that they're going to, um uh,

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Speaker 1: you know, get something that's going to provide relief to

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Speaker 1: you know a lot of people who who need it

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Speaker 1: right now. Marvin Low, thank you so much. We appreciate it.

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Speaker 1: Marvin Low, Global macro strategists at State Street appreciate his

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Speaker 1: perspective on a cross assets where we asked him about

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Speaker 1: just about everything from gold equities to credit two commodities. Uh.

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Speaker 1: But it just seems Vanni here that this is a

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Speaker 1: market rallying here, it's looking for risk, it's comfortable taking risk,

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Speaker 1: and the status quo I think for this market, Uh,

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Speaker 1: it seems to be pretty bullish here, right. And I

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Speaker 1: think there was money on the sidelines, particularly for a

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Speaker 1: distress investments, you know, junk bonds and so on, and

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Speaker 1: that's probably rolling in a little bit more as we

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Speaker 1: head throughout the months into the winter, and you know,

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Speaker 1: unsurprisingly as COVID cases start to absolutely go crazy again.

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Speaker 1: I mean We're over hundred thousand a day now in

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Speaker 1: the US, and you know, you have to wonder what

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Speaker 1: that will do to economies around the country. Obviously, we're

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Speaker 1: getting you know, labor market data and so on showing

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Speaker 1: that the labor market was slowly improving, but that's going

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Speaker 1: to turn around as well. Pole if if coronavirus keeps

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Speaker 1: popping its head up, well, we're still counting votes, as

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Speaker 1: we all know, but it appears that we may be

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Speaker 1: headed towards a government structure where the Democrats control the

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Speaker 1: House and potentially the White House Wall. The Republicans retained

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Speaker 1: control of the Senate, and business leaders are trying to

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Speaker 1: figure out what it means for their business, and one

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Speaker 1: of the big areas is taxation. Kate Barton, Global Fast,

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Speaker 1: chair of tax at accounting firm e Y, joins us

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Speaker 1: to give us some color here. So, Kate, given what

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Speaker 1: we know now about how the government may be structured

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Speaker 1: in terms of Republicans and Democrats, what are you telling

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Speaker 1: your clients today about how they should be thinking about

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Speaker 1: their tax situation. Well, thank you, I think we're I'm

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Speaker 1: definitely telling our clients to practice patients and uh, that's

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Speaker 1: the key and we're all wondering what happened to the

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Speaker 1: polls here, But um, you know, patience is the key.

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Speaker 1: But you know, I think that if it does in

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Speaker 1: fact go um red, you know, blue red, blue, if

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Speaker 1: you will, um, you know, it's a different perspective companies

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Speaker 1: before that or before you know, the last two days

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Speaker 1: we're modeling out a blue waves to be ready for that. UM.

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Speaker 1: I think that if it is in fact blue red blue,

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Speaker 1: it will be less changed but still could be significant. Right,

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Speaker 1: We're we're looking at every scenario. Yeah, and in fact

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Speaker 1: it's it's it's even blue red less blue, right, you know,

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Speaker 1: blue red, a little more red than than it was

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Speaker 1: in Congress. So talk to us about Biden's tax fan

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Speaker 1: because he very much has one. Would he be able

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Speaker 1: to get anything through well? I think that, um, Biden

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Speaker 1: has had a record of really going bipartisan and trying

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Speaker 1: to work both sides of the aisle, So you know,

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Speaker 1: the his efforts on collaboration, I wouldn't underestimate he does

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Speaker 1: have a headline rate going up from twenty one to

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Speaker 1: twenty eight percent. He's also contemplating a corporate minimum tax,

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Speaker 1: which has a lot of our clients concerned. But you

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Speaker 1: know what happens um in terms of campaign rhetoric and

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Speaker 1: what actually happens. I'm sure there'll be a lot of

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Speaker 1: distance between those. So you know, the other aspect is,

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Speaker 1: you know, the indirect taxes that could come president or nominee.

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Speaker 1: Biden has basically said that he would want carbon taxes

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Speaker 1: or UM. You know, really take a closer look at

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Speaker 1: that area. So it could be uh that indirect taxes

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Speaker 1: take on more of the front page news story. And

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Speaker 1: I think what we've heard from Canada Biden and generally

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Speaker 1: from the Democratic Party is perhaps a reallocation of the

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Speaker 1: tax burden UM, so that perhaps wealthy people pay more,

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Speaker 1: corporations pay more. Is there any appetite for meaningful tax

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Speaker 1: reform here? If in fact we do have somewhat of

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Speaker 1: a split government, you know, you really have to wonder

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Speaker 1: whether it will be their first priority. Most leading economists

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Speaker 1: say that governments have to be super careful about doing

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Speaker 1: that tast dance between stimulus versus revenue raising. Clearly, we

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Speaker 1: have a lot of deficits. They're going to have to

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Speaker 1: be paid at some point, but the timing of that

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Speaker 1: could have a huge impact on the US economy and

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Speaker 1: the recovery from the virus. So I think that is

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Speaker 1: something that you know, has to be carefully thought through.

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Speaker 1: For sure. I think we're gonna see governments around the world,

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Speaker 1: including the US, um try to tax big business and

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Speaker 1: ultra high network individuals. Uh. Candidate Biden basically had a

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Speaker 1: proposition that he wanted to tax individuals over that make

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Speaker 1: over four hundred thousand dollars a year. And so you know,

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Speaker 1: we'll have to see if that actually goes forward in

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Speaker 1: a blue red blue, and and what would be the

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Speaker 1: timing you know is going to be the first order

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Speaker 1: of business. There was also the idea that he would

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Speaker 1: do something about tax headquarters that are overseas. What are

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Speaker 1: you telling clients to do in terms of where they

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Speaker 1: might be headquartered? Listening, companies are all every country around

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Speaker 1: the world is looking at where supply chains are and

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Speaker 1: our goods, especially health and consumer products like um asprin

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Speaker 1: and and that type of drugs are they made close

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Speaker 1: enough to the consumer. So you know, both candidates, if

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Speaker 1: you will, President Trump and and candidate Biden, both of

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Speaker 1: them have made in America aspect to their attack plans

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Speaker 1: and and more more focused on things should be made

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Speaker 1: closer to the consumer. So what form that takes some

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Speaker 1: we're all watching. I mean, at the end of the day,

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Speaker 1: our clients need to make goods and services and places

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Speaker 1: that make sense for around. Yeah, but I'm not talking

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Speaker 1: about supply chain or where things are made. I mean

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Speaker 1: if you take Apple for example, things made in China,

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Speaker 1: but it's it's it's paying its tax, you know, in

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Speaker 1: a very complicated way and goes through Ireland in various places.

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Speaker 1: That that's what I mean. Well, companies that are have

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Speaker 1: a digital footprint, I mean are around the world. The

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Speaker 1: o e c D. Everybody is looking at that and

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Speaker 1: trying to come up with a multilateral approach to tax

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Speaker 1: if every country does their own thing. I mean, companies

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Speaker 1: are looking at double triple tax station which could be

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Speaker 1: really a killer in this type of an environment. And

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Speaker 1: so um, you know that is a big issue in

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Speaker 1: one where you know the U. S. Treasury and its

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Speaker 1: relationship with the o e c D is an important one, Kate.

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Speaker 1: One of the tax issues that's near and dear to

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Speaker 1: the hearts of our listeners in the tri state area

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Speaker 1: of New York is a state and local tax. What

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Speaker 1: if anything is Canada. Biden said about that well, Karida

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Speaker 1: Biden had a proposal all that he would allow state

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Speaker 1: and local taxes to be deducted, although they would be

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Speaker 1: phased out um if you will, as you earned more

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Speaker 1: money closer to that one hundred dollars I reference. But

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Speaker 1: you know he would put back in the state and

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Speaker 1: local deduction, so that wasn't important. So well again we're

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Speaker 1: watching that. Well that's critical, all right, Well, thank you

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Speaker 1: for that. That's some fascinating thoughts. Um, you know something

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Speaker 1: to too over Kate part and Global Vice share of

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Speaker 1: tax That e, why discussing what the tax landscape might

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Speaker 1: look like. Although there's still a lot of uncertainty out there,

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Speaker 1: so a little bit of a delayed reaction, I think

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Speaker 1: you could say from kind of a stocks as you

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Speaker 1: might expect or seeing them rally today. Of course, they

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Speaker 1: took a bit of hit, so to speaking, yesterday, even

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Speaker 1: though some valid measures legalizing the use of recreational marijuana

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Speaker 1: did pass yesterday. Let's bring in Ken Shane, senior analysts

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Speaker 1: for Global Food, Beverages Tobacco at Bloomberg Intelligence, to tell

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Speaker 1: us what gives so, Ken, why the delayed reaction? Yeah?

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Speaker 1: Hi money, Um, well, I think a lot of investors

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Speaker 1: may be awaiting the outcome for the presidential election and

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Speaker 1: the state of the Senate, you know, two big important

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Speaker 1: components to trying to UM you know, estimate the future

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Speaker 1: sales potential so it can So what happened, Yes, I

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Speaker 1: just are on election date. We had five additional states

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Speaker 1: including uh here in New Jersey legalized UM recreational me

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Speaker 1: marijuana is at the bottom line, Yeah, right, Paul, that's

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Speaker 1: exactly right. UM. You know, the big takeaway from yesterday

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Speaker 1: was the overwhelming nature of the voter approval of all

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Speaker 1: five state US marijuana about initiatives is a big plus

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Speaker 1: for the industry on a number fronts. First, it further

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Speaker 1: validates this industry as a legitimate place in society. You know,

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Speaker 1: talk about a nineteen billion dollar industry. Now it's no

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Speaker 1: longer some nason upcoming group. It's now you know, almost

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Speaker 1: at the level of bottled water sales. I mean, it's

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Speaker 1: out there yet. You know, yesterday's four states that are

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Speaker 1: proved New Jersey, Arizona, Montana, and South Dakota for recreational

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Speaker 1: authorization UH for marijuana markets now allows them to push

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Speaker 1: ahead with increasing number dispensaries, locations, licensing activity, can pick

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Speaker 1: up and make contribute over a billion dollars in sales

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Speaker 1: by the year three to an industry, like I said,

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Speaker 1: is um around nine or so. Yeah, and for context,

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Speaker 1: let's give some of the companies. We're talking about Aurora Cannabis,

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Speaker 1: we're talking about until Ray, We're talking about Afria, some

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Speaker 1: of them up double digits today. The thing is, though

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Speaker 1: it doesn't the cannabis industry want federal change so that

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Speaker 1: we're not talking about state by state change here. We're

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Speaker 1: talking about, you know, an entire country, at which point

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Speaker 1: then you could really scale up operations, invite private equity

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Speaker 1: in and so on. Yeah, that's right. Some of the

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Speaker 1: big movers today or the Canadian companies something that you

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Speaker 1: mentioned there, and they're really going to be driven mostly

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Speaker 1: by access to the US. Right now, they really don't

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Speaker 1: have access because they're you know, stock listings, don't you know,

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Speaker 1: from the stock exchanges. They don't allow them to compete

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Speaker 1: directly in this federally illegal business. So they really need

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Speaker 1: to have federal you know, federal approval and access to

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Speaker 1: the US. But that's not the case for the US

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Speaker 1: operators like cure Leaf and True Leaf and some of

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Speaker 1: these so called multi state operators in the US. The

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Speaker 1: state legalization alone is a big win. UM. It can

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Speaker 1: further benefit them if it's stayed legal because it would

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Speaker 1: mean I mean a federal legal because it could mean, um,

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Speaker 1: if they have banking services, they would have more favorable

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Speaker 1: tax treatment. They could perhaps you know, sell across state lines,

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Speaker 1: which they can't do today. Uh. So that's really the

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Speaker 1: bottom line of that. So where are we ken with

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Speaker 1: a federal type of law here if we were to

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Speaker 1: have your republic at democratic presidents. Do we know the

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Speaker 1: position of Mr Biden? We do qual um. You know,

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Speaker 1: he's got a record this saying that he would like

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Speaker 1: the first decriminalize it, um, remove you know, marijuana from

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Speaker 1: the Schedule one from the Controlled Substances Act. That in

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Speaker 1: itself would allows I mentioned some tax benefits um and

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Speaker 1: some other benefits UM. In terms of federal legalization. I

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Speaker 1: think that's going to take some time. It would, in

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Speaker 1: my opinion, it would certainly require a Democratic controlled Senate.

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Speaker 1: Uh in addition to the president to um, you know,

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Speaker 1: act on something like that. But you know, even without that,

430
00:23:35,440 --> 00:23:39,399
Speaker 1: there are considerable benefits to having a Biden presidency again

431
00:23:39,480 --> 00:23:44,080
Speaker 1: just by just by rescheduling a schedule. One can I

432
00:23:44,119 --> 00:23:47,400
Speaker 1: have a curiosity about how we get the Mari Lana

433
00:23:47,480 --> 00:23:50,520
Speaker 1: to these dates if you still can transport across state lines,

434
00:23:50,600 --> 00:23:53,240
Speaker 1: so for example, in New Jersey, will it have to

435
00:23:53,240 --> 00:23:55,359
Speaker 1: be grown in New Jersey? And also what about the

436
00:23:55,640 --> 00:24:00,440
Speaker 1: banking laws? Is it still in all cash business? Um? Well,

437
00:24:00,480 --> 00:24:02,879
Speaker 1: in terms of growing in New Jersey is one of

438
00:24:02,880 --> 00:24:05,679
Speaker 1: the many states. Most of the states require vertical integration

439
00:24:06,040 --> 00:24:10,440
Speaker 1: and that's really to source tracing, to ensure quality control

440
00:24:10,560 --> 00:24:13,760
Speaker 1: things like that. They require, um, the sellers to also

441
00:24:13,800 --> 00:24:16,760
Speaker 1: grow it on their own. Um and that won't change,

442
00:24:16,880 --> 00:24:21,160
Speaker 1: we don't believe in the near term. Um. So, uh

443
00:24:21,200 --> 00:24:23,640
Speaker 1: so that's that's the case with that in terms I'm sorry,

444
00:24:23,640 --> 00:24:27,440
Speaker 1: what was your second question? Banking or banking? Well, there's

445
00:24:27,440 --> 00:24:30,520
Speaker 1: something there's you know, the Safe Banking Act was approved

446
00:24:30,520 --> 00:24:32,880
Speaker 1: by the House. It's been kind of a hold given

447
00:24:32,880 --> 00:24:35,240
Speaker 1: the elections right now, but again, as I as I

448
00:24:35,240 --> 00:24:38,639
Speaker 1: mentioned it, if if there's a democratic control of the

449
00:24:38,680 --> 00:24:42,320
Speaker 1: presidency and or Senate, we think that there's a good

450
00:24:42,440 --> 00:24:46,040
Speaker 1: chance that that will allow some banking activity. Right because

451
00:24:46,119 --> 00:24:50,200
Speaker 1: right now, Paul, it's literally you know, people need to

452
00:24:50,240 --> 00:24:53,920
Speaker 1: have safe safety deposits, safety deposit boxes, in there. Yeah,

453
00:24:53,960 --> 00:24:55,600
Speaker 1: I'm gonna be It's gonna be interesting to see this

454
00:24:55,640 --> 00:24:58,480
Speaker 1: plays out in the great state of New Jersey or

455
00:24:58,560 --> 00:25:01,520
Speaker 1: ken and I both live. Ken Sha, senior analysts covers

456
00:25:01,520 --> 00:25:05,159
Speaker 1: global food, beverage, and tobacco for Bloomberg Intelligence, giving us

457
00:25:05,200 --> 00:25:09,160
Speaker 1: the latest Yiravanni on you know, five more states legalizing

458
00:25:09,400 --> 00:25:13,919
Speaker 1: uh recreational marijuana, which is good news for the cannabis companies.

459
00:25:13,920 --> 00:25:18,000
Speaker 1: But again Kencha was saying, federal legislation is the holy grail.

460
00:25:20,119 --> 00:25:23,280
Speaker 1: We're not joined by Josh Green, Bloomberg business Week calumnist.

461
00:25:23,280 --> 00:25:27,359
Speaker 1: He has a fascinating story in the Bloomberg Business Week

462
00:25:28,119 --> 00:25:31,119
Speaker 1: basically saying Trump is um is here to stay, no

463
00:25:31,200 --> 00:25:33,600
Speaker 1: matter who's in the White House. Josh, thanks so much

464
00:25:33,600 --> 00:25:36,439
Speaker 1: for joining us here. It is just extraorting here. You

465
00:25:36,440 --> 00:25:40,960
Speaker 1: look at the absolute numbers here, record turnout for this election,

466
00:25:41,640 --> 00:25:45,280
Speaker 1: uh President Trump getting north of sixty eight million votes.

467
00:25:45,320 --> 00:25:48,600
Speaker 1: There's a lot of support obviously out there, even if

468
00:25:48,600 --> 00:25:51,439
Speaker 1: he's not in the White House the next term. Josh,

469
00:25:51,560 --> 00:25:55,880
Speaker 1: you're suggesting that Trump is um is here to stay. Yeah,

470
00:25:55,880 --> 00:25:57,080
Speaker 1: I think so. I mean, if you look at the

471
00:25:57,080 --> 00:26:01,359
Speaker 1: elections also, we've seen so far um Trump has added

472
00:26:01,400 --> 00:26:03,920
Speaker 1: millions and millions of voters, even as he's on track

473
00:26:04,000 --> 00:26:07,919
Speaker 1: to lose the popular vote by something like seven million votes.

474
00:26:08,600 --> 00:26:10,920
Speaker 1: And you know, one of the defining features of the

475
00:26:10,920 --> 00:26:13,520
Speaker 1: Republican Party in the Trump era is that it's basically

476
00:26:13,560 --> 00:26:18,720
Speaker 1: become a cult of Trump everything. What what binds Republican

477
00:26:18,800 --> 00:26:22,960
Speaker 1: voters is their strong approval of Trump um. You know,

478
00:26:23,040 --> 00:26:25,399
Speaker 1: that was always going to make it difficult for the

479
00:26:25,480 --> 00:26:29,440
Speaker 1: party to move on if Trump lost, because it wasn't

480
00:26:29,440 --> 00:26:31,880
Speaker 1: clear what else would unite them. There isn't that kind

481
00:26:31,880 --> 00:26:35,160
Speaker 1: of same excitement for a Tom Cotton or a Nicky Haley. Yet.

482
00:26:35,280 --> 00:26:37,480
Speaker 1: There may be in four years, but there isn't right now.

483
00:26:37,880 --> 00:26:40,159
Speaker 1: But I think the other thing that we saw on

484
00:26:40,200 --> 00:26:44,120
Speaker 1: Tuesday night, the broad outpouring and support for Republicans generally

485
00:26:45,000 --> 00:26:48,960
Speaker 1: to help Republicans win back house seats UH and and

486
00:26:49,000 --> 00:26:52,360
Speaker 1: may leave them ultimately with control of the Senate, shows

487
00:26:52,760 --> 00:26:57,439
Speaker 1: that Trump is UM isn't the automatic death sentence for

488
00:26:57,640 --> 00:27:02,040
Speaker 1: Republican candidates. The Democrats going into an election night presumed

489
00:27:02,040 --> 00:27:04,199
Speaker 1: it to be. There wasn't a blue wave, and in

490
00:27:04,240 --> 00:27:06,800
Speaker 1: some ways there was even a red wave. The way

491
00:27:06,880 --> 00:27:09,600
Speaker 1: I described it in the New UH cover story in

492
00:27:09,640 --> 00:27:12,520
Speaker 1: Business week I wrote, is that it's what we see

493
00:27:12,560 --> 00:27:16,680
Speaker 1: our royaling cross currents of partisanship. I think that's right.

494
00:27:17,320 --> 00:27:20,080
Speaker 1: And given the fact that Trump doesn't seem likely to

495
00:27:20,160 --> 00:27:23,439
Speaker 1: leave the political stage regardless, I don't think the Trump

496
00:27:23,520 --> 00:27:26,320
Speaker 1: is um is going away. Whatever the outcome of the

497
00:27:26,400 --> 00:27:30,359
Speaker 1: election ultimately winds up being. Josh, is this essentially Steve

498
00:27:30,440 --> 00:27:33,320
Speaker 1: Bannon's vision of the future that is coming out now

499
00:27:33,359 --> 00:27:36,240
Speaker 1: and coming to pass? And obviously, you know, you wrote

500
00:27:36,280 --> 00:27:38,600
Speaker 1: the book on Bannon Devil's Bargains, Deve Bannon, Donald Trump,

501
00:27:38,640 --> 00:27:41,639
Speaker 1: and the Nationalist Uprising? Is that what Trump is um is?

502
00:27:42,680 --> 00:27:44,600
Speaker 1: You know, it's a good question, and I'm gonna I'm

503
00:27:44,600 --> 00:27:46,840
Speaker 1: gonna give a tricky answer. It isn't It isn't. You know.

504
00:27:46,920 --> 00:27:50,160
Speaker 1: On the one hand, Bannon always believed that it would

505
00:27:50,160 --> 00:27:55,160
Speaker 1: take a powerful, charismatic politician uh to impose his brand

506
00:27:55,160 --> 00:27:59,360
Speaker 1: of populist nationalist. Trump is certainly that. But I think

507
00:27:59,359 --> 00:28:02,919
Speaker 1: there are two problems. One, Trump, once he was in office,

508
00:28:02,960 --> 00:28:05,679
Speaker 1: never really followed through on that his tax reform was

509
00:28:05,960 --> 00:28:09,720
Speaker 1: heavily slanted towards the wealthy and corporations. And number two,

510
00:28:10,200 --> 00:28:13,679
Speaker 1: you know, while nothing has been decided yet, the signs

511
00:28:13,760 --> 00:28:16,560
Speaker 1: seemed to point to Biden as likely to be the

512
00:28:16,560 --> 00:28:20,359
Speaker 1: next the next US president, and so Trump, you know,

513
00:28:20,520 --> 00:28:23,560
Speaker 1: losing after one term certainly would not be the Bannon vision.

514
00:28:23,760 --> 00:28:26,320
Speaker 1: But I think I think maybe a better way to

515
00:28:26,359 --> 00:28:28,760
Speaker 1: say it is, I don't see anything on the horizon

516
00:28:29,200 --> 00:28:34,240
Speaker 1: that is likely to replace or displace Bannon's vision for Republicans,

517
00:28:34,280 --> 00:28:39,040
Speaker 1: whether or not Trump winds up winning a second term. So, Josh,

518
00:28:39,360 --> 00:28:44,760
Speaker 1: what happened to the Republican Party? Where does the conservative

519
00:28:45,560 --> 00:28:49,040
Speaker 1: movement within the Republican Party? Uh, the George Wills and

520
00:28:49,640 --> 00:28:53,600
Speaker 1: of the world, where did they go? Um? Canada? Maybe?

521
00:28:53,880 --> 00:28:56,600
Speaker 1: I don't know, because they certainly don't appear to have

522
00:28:56,680 --> 00:29:01,520
Speaker 1: a home in US politics, you know, the Lincoln project. Right.

523
00:29:01,840 --> 00:29:04,600
Speaker 1: Maybe maybe they can you know, incorporate as a as

524
00:29:04,640 --> 00:29:08,240
Speaker 1: a country or established residency somewhere. But they they're they're

525
00:29:08,240 --> 00:29:10,040
Speaker 1: really a drift. You know, on the one hand, they can,

526
00:29:10,040 --> 00:29:12,760
Speaker 1: they can support Biden, But on the other hand, you know,

527
00:29:12,800 --> 00:29:18,280
Speaker 1: their argument that that that Conservatives should repudiate the Republican

528
00:29:18,320 --> 00:29:21,560
Speaker 1: Party up and down the ticket. Um, it really wasn't

529
00:29:21,560 --> 00:29:24,920
Speaker 1: heated on election night when Republicans gained so much strength,

530
00:29:25,200 --> 00:29:27,320
Speaker 1: not just in Congress but in state houses too. It

531
00:29:27,440 --> 00:29:31,040
Speaker 1: just really wasn't uh, this broad scale repudiation of the

532
00:29:31,080 --> 00:29:35,200
Speaker 1: party that Lincoln Project types were hoping for. So, you know,

533
00:29:35,240 --> 00:29:38,960
Speaker 1: I think they're they're they're partisans without a party. Right.

534
00:29:39,120 --> 00:29:41,840
Speaker 1: So now, you know, you say Trump is um is

535
00:29:41,880 --> 00:29:43,480
Speaker 1: here to stay. How's that got something to do with

536
00:29:43,520 --> 00:29:45,680
Speaker 1: the blue collar voter for example? Or what do you

537
00:29:45,720 --> 00:29:48,280
Speaker 1: mean if it is Biden in the White House, you know,

538
00:29:48,320 --> 00:29:55,040
Speaker 1: where does Trump then go or his his you know antecedents. Well, well,

539
00:29:55,080 --> 00:29:56,920
Speaker 1: we'll we'll have to see. I mean, you know, we

540
00:29:56,920 --> 00:29:59,800
Speaker 1: we don't have full election results yet, but it seems

541
00:30:00,080 --> 00:30:02,920
Speaker 1: all but certain that there really was an outpouring of

542
00:30:03,120 --> 00:30:08,200
Speaker 1: additional working class, white collar blue collars sorry, white blue

543
00:30:08,200 --> 00:30:11,160
Speaker 1: collar support that came out for Trump. I mean you

544
00:30:11,360 --> 00:30:13,280
Speaker 1: can see that just in his raw vote totals. I

545
00:30:13,320 --> 00:30:14,920
Speaker 1: think that will be a big part of it. But

546
00:30:15,040 --> 00:30:17,200
Speaker 1: part of it also was that there were a segment

547
00:30:17,280 --> 00:30:21,960
Speaker 1: of you know, upscale, suburban, white collar, college educated voters

548
00:30:21,960 --> 00:30:25,160
Speaker 1: who found Trump repulsive. But we're still at heart Republicans,

549
00:30:25,480 --> 00:30:27,960
Speaker 1: and we're willing to split their ticket, vote Joe Biden,

550
00:30:28,360 --> 00:30:30,840
Speaker 1: uh and vote for their local member of Congress or

551
00:30:30,880 --> 00:30:34,200
Speaker 1: senator as a Republican and so uh, you know, I

552
00:30:34,200 --> 00:30:35,720
Speaker 1: I think there's a lot we don't know about the

553
00:30:35,800 --> 00:30:39,360
Speaker 1: vote composition, but but certainly if you look below the

554
00:30:39,440 --> 00:30:43,840
Speaker 1: presidential race, Uh, the evening was a big disappointment for

555
00:30:44,360 --> 00:30:47,760
Speaker 1: Democrat and showed that Republicans still have strength. I think

556
00:30:48,040 --> 00:30:50,640
Speaker 1: some of the strength. Also worth mentioning is that Trump

557
00:30:50,680 --> 00:30:54,840
Speaker 1: did extremely well with Hispanic and Latino voters, which was

558
00:30:54,880 --> 00:30:59,000
Speaker 1: something that UH strategists and people on the ground have

559
00:30:59,080 --> 00:31:02,200
Speaker 1: been warning about for months, if not for years. We

560
00:31:02,240 --> 00:31:05,160
Speaker 1: saw that come to full fruition on election night in

561
00:31:05,160 --> 00:31:08,640
Speaker 1: places like Florida and in the Rio Grand Valley in Texas,

562
00:31:08,720 --> 00:31:12,800
Speaker 1: where report or support for Republicans was much much stronger

563
00:31:12,800 --> 00:31:15,240
Speaker 1: than Democrats. About it would be hey, Josh, on the

564
00:31:15,280 --> 00:31:17,960
Speaker 1: flip side, what do the Democrats do here? They again,

565
00:31:18,000 --> 00:31:20,480
Speaker 1: as you Richard, just saying, this was not a great

566
00:31:20,600 --> 00:31:23,120
Speaker 1: showing for the Democrats. What do they need to do

567
00:31:23,600 --> 00:31:27,120
Speaker 1: to broaden their appeal? Well, the first thing we need

568
00:31:27,120 --> 00:31:28,640
Speaker 1: to do is hold off send off all these court

569
00:31:28,720 --> 00:31:32,480
Speaker 1: challenges and make sure that fidinancially does become the next president. Um.

570
00:31:32,600 --> 00:31:34,560
Speaker 1: But I think that's a great question. I don't think

571
00:31:34,560 --> 00:31:37,440
Speaker 1: that there's an obvious answer. I mean, on the one hand, Uh,

572
00:31:37,520 --> 00:31:41,080
Speaker 1: if you look at the voters they lost, uh in

573
00:31:41,120 --> 00:31:46,080
Speaker 1: congressional races, they tended to be you know, professional, somewhat conservative,

574
00:31:46,160 --> 00:31:50,360
Speaker 1: college educated. Um. The ones they held onto were the

575
00:31:50,360 --> 00:31:53,840
Speaker 1: ones around blue metro areas that Democrats won in eighteen.

576
00:31:53,920 --> 00:31:57,400
Speaker 1: So think people in the suburbs of Denver, Minneapolis, Uh,

577
00:31:57,480 --> 00:32:00,520
Speaker 1: you know, northern Virginia and northern New Jersey, those kind

578
00:32:00,520 --> 00:32:02,360
Speaker 1: of place in Atlanta, I should say those kind of

579
00:32:02,360 --> 00:32:06,040
Speaker 1: places held. The places that didn't were some of the

580
00:32:06,080 --> 00:32:11,800
Speaker 1: further reaches that they won in North South Carolina's first district. Um. Uh,

581
00:32:11,840 --> 00:32:14,680
Speaker 1: there's a there was a district Oklahoma five right outside

582
00:32:14,720 --> 00:32:18,360
Speaker 1: Oklahoma City, the suburbs there. They lost those, and they

583
00:32:18,400 --> 00:32:22,240
Speaker 1: lost all of the red tinged suburban districts that were

584
00:32:22,240 --> 00:32:25,360
Speaker 1: targeting in places like Texas and New Mexico. So I

585
00:32:25,400 --> 00:32:27,160
Speaker 1: think the answer is that they've got to find a

586
00:32:27,280 --> 00:32:30,840
Speaker 1: message that uh it's not a radical left message that

587
00:32:30,920 --> 00:32:35,520
Speaker 1: appeals to those kinds of voters while also activating the

588
00:32:35,560 --> 00:32:38,320
Speaker 1: excitement of based Democratic voters. They still need to show

589
00:32:38,240 --> 00:32:40,800
Speaker 1: to show up. You know, the one the one thing

590
00:32:40,840 --> 00:32:43,959
Speaker 1: if you split really hard. Um, you know, there is

591
00:32:43,960 --> 00:32:47,160
Speaker 1: a case though for things like the fifteen dollar minimum wage,

592
00:32:47,160 --> 00:32:50,080
Speaker 1: you know that one in Florida by a large margin

593
00:32:50,160 --> 00:32:53,720
Speaker 1: even as Democrats lost. Maybe there's a possibility for a

594
00:32:53,800 --> 00:32:57,280
Speaker 1: kind of a fusion left centrist policy that Democrats could

595
00:32:57,320 --> 00:33:01,080
Speaker 1: run on back again in coming weeks. And everybody go

596
00:33:01,160 --> 00:33:04,640
Speaker 1: read his Bloomberg Business cover story right now. That's Josh

597
00:33:04,680 --> 00:33:09,160
Speaker 1: Green of Bloomberg Business Week. Thanks for listening to Bloomberg

598
00:33:09,160 --> 00:33:12,600
Speaker 1: Markets podcast. You can subscribe and listen to interviews at

599
00:33:12,600 --> 00:33:17,000
Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Bonnie Quinn.

600
00:33:17,120 --> 00:33:19,800
Speaker 1: I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney.

601
00:33:19,800 --> 00:33:22,440
Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you

602
00:33:22,440 --> 00:33:24,880
Speaker 1: can always catch us worldwide at Bloomberg Radio