1
00:00:06,320 --> 00:00:13,119
Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane.

2
00:00:13,240 --> 00:00:17,440
Speaker 1: Always with Michael McKee daily we bring you insight from

3
00:00:17,480 --> 00:00:22,279
Speaker 1: the best in economics, finance, investment, and international relations. Find

4
00:00:22,280 --> 00:00:26,880
Speaker 1: Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and of

5
00:00:26,920 --> 00:00:33,440
Speaker 1: course on the Bloomberg. So begin the discussion of this

6
00:00:33,600 --> 00:00:37,840
Speaker 1: really important concept from Atlanta of shadow rates. Yeah. Well,

7
00:00:37,880 --> 00:00:41,239
Speaker 1: the shadow rate, that's the hypothetical negative level of the

8
00:00:41,280 --> 00:00:43,600
Speaker 1: fat funds rate. This is where the FET would have

9
00:00:43,640 --> 00:00:45,559
Speaker 1: had to go if they wanted to have had the

10
00:00:45,640 --> 00:00:48,800
Speaker 1: same impact on the yield curve on yields as they

11
00:00:48,800 --> 00:00:53,279
Speaker 1: had from QUEI and from forward guidance. So assume they

12
00:00:53,320 --> 00:00:55,680
Speaker 1: had there was no QUI, there was no forward guidance.

13
00:00:55,720 --> 00:00:58,880
Speaker 1: But the FET wanted to depress yields through the zero

14
00:00:59,040 --> 00:01:01,240
Speaker 1: they would have to go through the zero bound and

15
00:01:01,360 --> 00:01:03,440
Speaker 1: on this concept, on this model, they would have had

16
00:01:03,480 --> 00:01:06,280
Speaker 1: to go all the way down to minus three percent

17
00:01:06,760 --> 00:01:09,440
Speaker 1: to get the same impact that they got from que

18
00:01:09,640 --> 00:01:11,880
Speaker 1: and forward guidance. So that's the shadow right, So I'm

19
00:01:12,000 --> 00:01:15,119
Speaker 1: minus three percent, but we're not there the actual rates

20
00:01:15,160 --> 00:01:18,640
Speaker 1: above zero. Well, it is above zero, but what happened

21
00:01:18,720 --> 00:01:22,360
Speaker 1: was that shadow rate troffed in early two thousand fourteen

22
00:01:22,400 --> 00:01:25,759
Speaker 1: at minus three percent according to the model, and since then,

23
00:01:25,800 --> 00:01:28,920
Speaker 1: the FAT has actually started to tighten policy. So fat

24
00:01:28,959 --> 00:01:32,040
Speaker 1: tightening has been going on from that hypothetical minus three

25
00:01:32,040 --> 00:01:35,679
Speaker 1: percent level already for the last two years. So they

26
00:01:35,720 --> 00:01:38,600
Speaker 1: have tightened rates by more than three hundred basis points.

27
00:01:38,640 --> 00:01:41,919
Speaker 1: How did they do this? Where they ended que and

28
00:01:41,959 --> 00:01:44,800
Speaker 1: they suggested through the blue dot plots that they would

29
00:01:44,880 --> 00:01:47,480
Speaker 1: raise interest rates. Extend this out to the world for me,

30
00:01:47,560 --> 00:01:50,120
Speaker 1: what would other central bank policy? What other center banks

31
00:01:50,160 --> 00:01:52,720
Speaker 1: e c B, the b J extend their concept to

32
00:01:52,760 --> 00:01:56,600
Speaker 1: shadow rates to them? What would they have looked like? Well,

33
00:01:56,640 --> 00:01:59,840
Speaker 1: it's it's very similar. The e c B is engaging

34
00:02:00,000 --> 00:02:02,000
Speaker 1: in que. The e c B has actually cut its

35
00:02:02,040 --> 00:02:04,800
Speaker 1: own interest rate. It's it's it's a deposit rate into

36
00:02:04,880 --> 00:02:07,760
Speaker 1: negative territory, but only slightly. And I think it's a

37
00:02:07,800 --> 00:02:10,600
Speaker 1: fair assumption to believe that through the effect of QUE

38
00:02:11,480 --> 00:02:14,920
Speaker 1: and forward guidance, they have actually pushed bond deals a

39
00:02:14,919 --> 00:02:18,480
Speaker 1: lot lower into negative territory. Actually, so the shadow rate

40
00:02:18,520 --> 00:02:21,519
Speaker 1: for Europe would probably be low that minus three percent,

41
00:02:21,960 --> 00:02:23,920
Speaker 1: and I would I would guess the same as true

42
00:02:23,919 --> 00:02:27,280
Speaker 1: for Japan. It's just stunning. This goes back to John

43
00:02:27,360 --> 00:02:31,040
Speaker 1: Taylor of Stanford's very important work and his tailor role,

44
00:02:31,040 --> 00:02:33,960
Speaker 1: which is a plug in guestimate of where we should be.

45
00:02:34,200 --> 00:02:38,120
Speaker 1: None of that works in this million now doesn't. Yeah, well,

46
00:02:38,160 --> 00:02:41,160
Speaker 1: none of it works because the problem is that central

47
00:02:41,160 --> 00:02:44,400
Speaker 1: banks cannot push rates aggressively negative. We've learned about the

48
00:02:44,400 --> 00:02:46,800
Speaker 1: negative consequences of negatives. So they use these other tools.

49
00:02:46,840 --> 00:02:49,360
Speaker 1: So they use all these other tools. And this is

50
00:02:49,400 --> 00:02:52,720
Speaker 1: why people have the wrong impression when they just look

51
00:02:52,720 --> 00:02:54,320
Speaker 1: at the fat funds rate and they say, well, the

52
00:02:54,320 --> 00:02:57,320
Speaker 1: fat funds rate has been unchanged for a long time.

53
00:02:57,360 --> 00:03:00,560
Speaker 1: It's abnormally low. They've only raised twenty five basis points.

54
00:03:00,560 --> 00:03:03,440
Speaker 1: So policy is still very expansionary. But if you if

55
00:03:03,480 --> 00:03:06,239
Speaker 1: you factor in all these other factors, actually policy has

56
00:03:06,280 --> 00:03:08,639
Speaker 1: been tightening for the last two years, and so it's

57
00:03:08,639 --> 00:03:12,000
Speaker 1: not surprising that the economy has slowed. It's not surprising

58
00:03:12,000 --> 00:03:14,400
Speaker 1: that core inflation is not making further progress to out

59
00:03:14,440 --> 00:03:16,760
Speaker 1: of the target. And it should not be surprising that

60
00:03:16,800 --> 00:03:18,880
Speaker 1: the year PuF has flattened so much. We are in

61
00:03:18,919 --> 00:03:32,160
Speaker 1: a mature stage off the tightening. Seguin in eight hours

62
00:03:32,200 --> 00:03:34,880
Speaker 1: surveillance this morning and for seven hours fifty eight minutes

63
00:03:34,920 --> 00:03:37,680
Speaker 1: of it. We speak with Daniel Jurgen Dan. Let's get

64
00:03:37,680 --> 00:03:40,960
Speaker 1: to oil in a bit, let's get to Margaret Thatcher

65
00:03:41,120 --> 00:03:44,760
Speaker 1: and uh Prime Minister May in a bit. But right now,

66
00:03:44,920 --> 00:03:48,440
Speaker 1: a broader question, back to your day's at Yale University.

67
00:03:48,920 --> 00:03:53,560
Speaker 1: Have you ever seen the linkage of our economics, our finance,

68
00:03:53,680 --> 00:03:57,120
Speaker 1: our investment as we have right now? I think things

69
00:03:57,120 --> 00:04:02,720
Speaker 1: are very tightly connected, and almost instantaneously. So it's a

70
00:04:02,920 --> 00:04:07,000
Speaker 1: it's a tighter nexus than ever before. So I think

71
00:04:07,040 --> 00:04:09,840
Speaker 1: that is the case. If that's the case, are we

72
00:04:09,920 --> 00:04:12,080
Speaker 1: in bad shape? Are good shape? I'm struggling to figure

73
00:04:12,080 --> 00:04:14,200
Speaker 1: out exactly where we are right now. We seem to

74
00:04:14,200 --> 00:04:17,800
Speaker 1: be just kind of muddling along. But but the world

75
00:04:17,839 --> 00:04:22,640
Speaker 1: hasn't collapsed. No, it's you know, we've we've seen recovery.

76
00:04:23,000 --> 00:04:27,560
Speaker 1: Uh it's been slower and weaker than other recoveries, but certainly,

77
00:04:28,040 --> 00:04:30,440
Speaker 1: you know, and it's a mixed picture. Unemployment is down,

78
00:04:30,480 --> 00:04:33,040
Speaker 1: but the number of people not in the workforces has

79
00:04:33,120 --> 00:04:35,800
Speaker 1: increased at the same time. Where do we go from here?

80
00:04:35,800 --> 00:04:38,520
Speaker 1: Do you think is it is it possible to even say,

81
00:04:39,520 --> 00:04:41,560
Speaker 1: you know, on a very broad thing, I think that

82
00:04:42,000 --> 00:04:44,120
Speaker 1: you know, you keep having these series of surprise, of

83
00:04:44,200 --> 00:04:49,160
Speaker 1: which Brexit has been the latest, and obviously the US

84
00:04:49,240 --> 00:04:52,480
Speaker 1: presidential election. As you travel around the world, you know

85
00:04:52,520 --> 00:04:55,080
Speaker 1: that people all over the world are watching it with

86
00:04:55,279 --> 00:05:00,960
Speaker 1: just fascinations out the quiet word, But what does it mean?

87
00:05:01,040 --> 00:05:03,159
Speaker 1: What does it mean for the direction of the United States,

88
00:05:03,800 --> 00:05:06,880
Speaker 1: which has played the central role in the world community,

89
00:05:07,200 --> 00:05:10,040
Speaker 1: And we're starting to see more and more two distinctly

90
00:05:10,080 --> 00:05:13,120
Speaker 1: different patterns. Many know that one of my musty books

91
00:05:13,279 --> 00:05:16,080
Speaker 1: is The Commanding Heights. To say it is dated is

92
00:05:16,120 --> 00:05:20,200
Speaker 1: wrong because it is timeless and it is never more immediate. Now,

93
00:05:20,720 --> 00:05:24,719
Speaker 1: Daniel Jurgen Baroness Thatcher plays a huge part in your book,

94
00:05:25,080 --> 00:05:29,360
Speaker 1: your wonderful book, The Commanding Heights is Prime Minister. May

95
00:05:29,360 --> 00:05:33,039
Speaker 1: are there elements there of Margaret Thatcher? Well, I think we,

96
00:05:34,040 --> 00:05:36,040
Speaker 1: I mean, it would really be too early to say.

97
00:05:36,040 --> 00:05:39,360
Speaker 1: I mean, she has this immediate, uh sort of uh

98
00:05:39,800 --> 00:05:43,159
Speaker 1: self induced crisis to deal with. You know, Winston Churchill

99
00:05:43,200 --> 00:05:45,800
Speaker 1: once said that the problem with political suicide is that

100
00:05:45,920 --> 00:05:48,760
Speaker 1: you live to regret it. And that's I think the

101
00:05:48,800 --> 00:05:51,680
Speaker 1: problem that the you know, both the British government and

102
00:05:51,960 --> 00:05:56,280
Speaker 1: Britain will face the kind of period of uncertainty and

103
00:05:56,480 --> 00:05:59,760
Speaker 1: as as I think, you know. I revisited the Commanding

104
00:05:59,839 --> 00:06:02,240
Speaker 1: High this week in my op ed in the Wall

105
00:06:02,240 --> 00:06:06,880
Speaker 1: Street Journal, asking why have we seen the pendulum swing

106
00:06:06,920 --> 00:06:10,960
Speaker 1: again as much as we've seen it swing from that

107
00:06:11,200 --> 00:06:14,440
Speaker 1: kind of commitment to markets. And what really struck me

108
00:06:14,520 --> 00:06:17,800
Speaker 1: was going back and reading the kind of economic reports

109
00:06:17,839 --> 00:06:22,679
Speaker 1: from the Bill Clinton administration and how market oriented they were, uh,

110
00:06:22,760 --> 00:06:25,080
Speaker 1: in the spirit of, you know, kind of building on

111
00:06:25,720 --> 00:06:29,640
Speaker 1: what Thatcher and Reagan it talked about the advantages of markets.

112
00:06:29,839 --> 00:06:32,799
Speaker 1: We don't hear that much anymore. How much is history

113
00:06:32,839 --> 00:06:35,400
Speaker 1: dependent on I don't want to say the great man

114
00:06:35,480 --> 00:06:37,359
Speaker 1: theory could be the great woman theory, but the idea

115
00:06:37,440 --> 00:06:40,840
Speaker 1: that a leader meets a moment in history and rises

116
00:06:40,880 --> 00:06:44,039
Speaker 1: above it, and I think baroness stature would qualify their

117
00:06:44,640 --> 00:06:47,239
Speaker 1: uh and change the world. You might put Ronald Reagan

118
00:06:47,279 --> 00:06:51,040
Speaker 1: in that category. Fdrum. Are we looking for somebody like

119
00:06:51,080 --> 00:06:53,640
Speaker 1: that right now? Or does it make a real difference? Oh?

120
00:06:53,720 --> 00:06:57,440
Speaker 1: I think it does, particularly when you face a crisis.

121
00:06:57,440 --> 00:06:59,800
Speaker 1: I mean, Britain at that point had it's back against

122
00:06:59,800 --> 00:07:03,159
Speaker 1: the all. When Margaret Thatcher came to the power, people

123
00:07:03,160 --> 00:07:05,599
Speaker 1: were talking that its economy was going to be the

124
00:07:05,720 --> 00:07:08,960
Speaker 1: lesson you know, East Germany's and it just seemed to

125
00:07:09,000 --> 00:07:11,520
Speaker 1: be in decline and couldn't get out of it. And

126
00:07:11,600 --> 00:07:16,239
Speaker 1: it took a lot of fortitude and standing her ground

127
00:07:16,640 --> 00:07:20,080
Speaker 1: to make that happen. So leaders do matter because others

128
00:07:20,160 --> 00:07:22,640
Speaker 1: might have just kind of continued to drift along, and

129
00:07:22,680 --> 00:07:25,840
Speaker 1: so she had the courage of her convictions that certain

130
00:07:25,840 --> 00:07:29,040
Speaker 1: personalities at certain times are absolutely critical. Do we have

131
00:07:29,080 --> 00:07:32,080
Speaker 1: anybody on the stage that you when you survey the world,

132
00:07:32,520 --> 00:07:34,360
Speaker 1: was there anyone on the stage right now that you

133
00:07:34,400 --> 00:07:38,000
Speaker 1: think could fill a role like that? Well, I don't

134
00:07:38,080 --> 00:07:40,240
Speaker 1: see that right now. I think you'd have to say

135
00:07:40,280 --> 00:07:44,520
Speaker 1: that Chancellor Merkel has been in a sense the rock

136
00:07:44,560 --> 00:07:48,280
Speaker 1: of Gibraltar for Europe during the turmoil. But I think

137
00:07:48,400 --> 00:07:54,440
Speaker 1: that the you know, the decisions that Germany made about immigrants, uh,

138
00:07:54,720 --> 00:07:58,920
Speaker 1: that has not only great consequences for Germany, but you

139
00:07:58,920 --> 00:08:02,320
Speaker 1: know reverberates as Europe. But I mean, if there hadn't

140
00:08:02,320 --> 00:08:06,559
Speaker 1: been a miracle there, we could have seen much worse

141
00:08:06,600 --> 00:08:09,400
Speaker 1: in Europe. I looked in and I want to get

142
00:08:09,440 --> 00:08:12,400
Speaker 1: to oil in our next section as well. I think

143
00:08:12,440 --> 00:08:15,080
Speaker 1: all of our listeners and all the commitments you've made

144
00:08:15,080 --> 00:08:17,520
Speaker 1: to Bloomberg surveillance over the years. Would like to know

145
00:08:18,280 --> 00:08:21,440
Speaker 1: not so much what you observe in Cleveland the last

146
00:08:21,480 --> 00:08:25,200
Speaker 1: three days, the cacophony, but the task that Mr Trump

147
00:08:25,320 --> 00:08:34,280
Speaker 1: has tonight to somehow brings stability to his Republican Party. Well, um,

148
00:08:34,440 --> 00:08:36,720
Speaker 1: this speech you can be sure is going to be

149
00:08:37,000 --> 00:08:41,120
Speaker 1: very carefully vetted. Is getting the messages right is going

150
00:08:41,120 --> 00:08:45,640
Speaker 1: to be an enormous challenge given the fisher in the

151
00:08:45,679 --> 00:08:49,080
Speaker 1: Republican Party and the degree to which parts of the

152
00:08:49,160 --> 00:08:52,240
Speaker 1: party have really rebelled against would have been it's kind

153
00:08:52,240 --> 00:08:57,120
Speaker 1: of overall commitments to market and trade and uh, you

154
00:08:57,160 --> 00:09:02,240
Speaker 1: know he is embodying Uh what is um you know,

155
00:09:02,320 --> 00:09:05,040
Speaker 1: become this kind of the same thing we've heard on

156
00:09:05,080 --> 00:09:07,840
Speaker 1: the other side from Bernie Sanders about trade. One of

157
00:09:07,840 --> 00:09:11,400
Speaker 1: the things that I talked about in the piece in

158
00:09:11,440 --> 00:09:14,960
Speaker 1: the journal was, you know, people instant in trade is

159
00:09:15,000 --> 00:09:17,280
Speaker 1: good and that you know, the benefits are great and

160
00:09:17,280 --> 00:09:19,960
Speaker 1: there and you know, look at it. We wouldn't have

161
00:09:20,160 --> 00:09:24,440
Speaker 1: our iPhones would pay a whole different prices for so

162
00:09:24,520 --> 00:09:26,840
Speaker 1: many different things, and we wouldn't have you know, we

163
00:09:26,920 --> 00:09:30,800
Speaker 1: have forty one million jobs in the United States, over

164
00:09:30,880 --> 00:09:34,520
Speaker 1: one in five jobs that depend upon the US being

165
00:09:34,559 --> 00:09:36,920
Speaker 1: part of global trade and to walk away from that

166
00:09:37,080 --> 00:09:42,400
Speaker 1: or disrupted UH will have a big costs for the

167
00:09:42,480 --> 00:09:45,040
Speaker 1: US economy and for US workers. Daniel, you're going with

168
00:09:45,120 --> 00:09:49,800
Speaker 1: us on oil right now, and Dan, it's supply supply, supply, supply,

169
00:09:49,800 --> 00:09:53,360
Speaker 1: supply out of nowhere. In the last three weeks, we're

170
00:09:53,360 --> 00:09:59,000
Speaker 1: hearing guys like you talk about demand microeconomics and demand dynamics.

171
00:09:59,000 --> 00:10:02,560
Speaker 1: Phil Verliger, I'm others say the estimates of demand and

172
00:10:02,600 --> 00:10:06,840
Speaker 1: demand growth are flat out wrong. Where are you on this, Well,

173
00:10:06,880 --> 00:10:09,959
Speaker 1: I'm not sure which one Mr vera Lager was talking about,

174
00:10:10,120 --> 00:10:16,080
Speaker 1: but ourgue is that we'll see in this year about

175
00:10:16,080 --> 00:10:20,360
Speaker 1: one point to one point one point two million barrels

176
00:10:20,360 --> 00:10:23,040
Speaker 1: a day growth, and we see that same kind of

177
00:10:23,080 --> 00:10:27,720
Speaker 1: growth in the next year. UH. One thing that's brought

178
00:10:27,720 --> 00:10:30,160
Speaker 1: down grows a little bit in our estimates is Brexit,

179
00:10:30,240 --> 00:10:33,600
Speaker 1: and we think that maybe that will cost by seventeen

180
00:10:33,679 --> 00:10:36,400
Speaker 1: a couple hundred thousand barrels a day because of weaker

181
00:10:36,480 --> 00:10:40,440
Speaker 1: growth in Europe, uncertainty and its impact on trade. But

182
00:10:40,960 --> 00:10:45,040
Speaker 1: we see over five year periods demand growing by five

183
00:10:45,080 --> 00:10:48,560
Speaker 1: to six million barrels a day unless unless we have

184
00:10:48,600 --> 00:10:51,640
Speaker 1: a very weak global economy what's your forecast for the

185
00:10:51,640 --> 00:10:55,000
Speaker 1: global economy? Then, I mean, in as we go towards

186
00:10:55,040 --> 00:10:58,000
Speaker 1: the end of the year, what is demand going to

187
00:10:58,000 --> 00:11:00,360
Speaker 1: be like and how is that going to affect prices.

188
00:11:00,400 --> 00:11:02,600
Speaker 1: I know, it's a complicated dynamic because we don't know

189
00:11:02,720 --> 00:11:05,040
Speaker 1: at what price we bring the frackers back in, right.

190
00:11:05,880 --> 00:11:09,000
Speaker 1: I think that we um you know, are now now

191
00:11:09,040 --> 00:11:13,240
Speaker 1: I h S market and our growth forecast is you know,

192
00:11:13,640 --> 00:11:17,520
Speaker 1: probably not two different from the consensus around two percent

193
00:11:17,640 --> 00:11:20,520
Speaker 1: or so for the for the global economy in terms

194
00:11:20,559 --> 00:11:23,480
Speaker 1: of as you say, the fracker is an Interestingly, one

195
00:11:23,480 --> 00:11:27,520
Speaker 1: of the most prominent frackers addressed their Republican convention, Harold

196
00:11:27,520 --> 00:11:30,680
Speaker 1: Ham yesterday. I think that we're you know, we're seeing

197
00:11:30,720 --> 00:11:34,120
Speaker 1: a little uptick in activity. We see rake count up

198
00:11:34,440 --> 00:11:37,280
Speaker 1: the last several weeks by forty. But have to remember

199
00:11:37,320 --> 00:11:40,679
Speaker 1: that about dred riggs have been laid down. But in

200
00:11:40,720 --> 00:11:44,760
Speaker 1: some parts of you know, particularly in the Permian basin

201
00:11:44,800 --> 00:11:48,400
Speaker 1: in Texas and into New Mexico, that's uh, that's the

202
00:11:48,520 --> 00:11:51,720
Speaker 1: area where you're kind of seeing the beginnings of rebound

203
00:11:51,760 --> 00:11:55,360
Speaker 1: and activity. But you probably need oil prices in the

204
00:11:55,440 --> 00:11:59,120
Speaker 1: fifties to sixties to see, you know, a real increase.

205
00:11:59,200 --> 00:12:01,800
Speaker 1: So we're still thinking that. You know, the US is

206
00:12:01,840 --> 00:12:05,360
Speaker 1: still in decline and that's one of the things that

207
00:12:05,440 --> 00:12:07,920
Speaker 1: has been a key for seeing oil prices where they

208
00:12:07,960 --> 00:12:10,280
Speaker 1: are now, Well, how hi can they go? What would

209
00:12:10,320 --> 00:12:12,679
Speaker 1: it take to get oil prices up into the fifties

210
00:12:12,720 --> 00:12:17,959
Speaker 1: and keep them there? If you see US growth? Uh,

211
00:12:18,120 --> 00:12:22,600
Speaker 1: the client continuing disruptions. Remember we were there. It was

212
00:12:22,760 --> 00:12:25,520
Speaker 1: sort of the market getting ahead of itself. In this

213
00:12:25,640 --> 00:12:29,000
Speaker 1: age in which there's OPEC doesn't function, it's a much

214
00:12:29,000 --> 00:12:33,080
Speaker 1: more volatile market. But um, it would you know, seeing

215
00:12:33,640 --> 00:12:36,960
Speaker 1: global demand and you know, you just look at the numbers,

216
00:12:36,960 --> 00:12:39,760
Speaker 1: and you look at the cutbacks and investment that have happened,

217
00:12:40,320 --> 00:12:43,560
Speaker 1: and uh, and then demand growth and there's going to

218
00:12:43,600 --> 00:12:46,920
Speaker 1: be a need for You're not going to get the

219
00:12:46,960 --> 00:12:50,120
Speaker 1: supply we need without prices providing more of a signal

220
00:12:50,200 --> 00:12:53,200
Speaker 1: for activity. I think the major companies are for the

221
00:12:53,280 --> 00:12:57,240
Speaker 1: most part still still in a in a cutback mode.

222
00:12:57,880 --> 00:13:00,480
Speaker 1: Do you believe in I n F forecasts. You're a

223
00:13:00,480 --> 00:13:02,480
Speaker 1: great viewer of the scene. You do lots of work

224
00:13:02,520 --> 00:13:08,600
Speaker 1: at that. I'm always stunted out people rip apart the

225
00:13:08,600 --> 00:13:11,440
Speaker 1: crystal ball of the I m F when we all

226
00:13:11,440 --> 00:13:16,319
Speaker 1: know as a science, forecasting is suspect to begin with well,

227
00:13:16,440 --> 00:13:18,600
Speaker 1: I think we wouldn't. I wouldn't just say the i

228
00:13:18,760 --> 00:13:22,120
Speaker 1: m F. I think all the forecasters, you know, struggle

229
00:13:22,520 --> 00:13:24,839
Speaker 1: with economic growth. And you see this tendency of the

230
00:13:24,920 --> 00:13:27,640
Speaker 1: year starts off with higher estimates and then as the

231
00:13:27,720 --> 00:13:30,920
Speaker 1: year progresses, the pattern has been for those to come back.

232
00:13:31,000 --> 00:13:35,480
Speaker 1: I think that you know, there's clearly continues to be uh,

233
00:13:35,800 --> 00:13:39,360
Speaker 1: you know, rightly, there's concern about these relatively low levels

234
00:13:39,360 --> 00:13:42,880
Speaker 1: of growth. I think it was actually uh, Christine Legard,

235
00:13:43,000 --> 00:13:44,520
Speaker 1: the head of the i m F, who coined this

236
00:13:44,600 --> 00:13:49,320
Speaker 1: phrase the new Mediocre, to describe a global economy that

237
00:13:49,480 --> 00:13:53,840
Speaker 1: grows but but at a mediocre pace and doesn't provide

238
00:13:53,880 --> 00:13:58,120
Speaker 1: the kind of greater growth that we need. And I

239
00:13:58,200 --> 00:14:03,280
Speaker 1: think the negative him about trade and trade policy contributes

240
00:14:04,000 --> 00:14:07,240
Speaker 1: to that. It had been an article of political faith

241
00:14:07,280 --> 00:14:10,440
Speaker 1: among the party meeting now at its national convention that

242
00:14:10,480 --> 00:14:14,280
Speaker 1: you needed a drill, drill, drill more oil. We now

243
00:14:14,360 --> 00:14:17,800
Speaker 1: have a lot of oil on a nonpartisan basis going forward,

244
00:14:17,880 --> 00:14:21,520
Speaker 1: since Opek is kind of you know, comatose, and since

245
00:14:21,560 --> 00:14:25,040
Speaker 1: we have franking, etcetera. In in just one minute, if

246
00:14:25,080 --> 00:14:27,720
Speaker 1: you could give me what an energy policy should be

247
00:14:27,760 --> 00:14:30,240
Speaker 1: going forward. What would be the best thing for the

248
00:14:30,320 --> 00:14:33,360
Speaker 1: United States. Well, in one word, I think it would

249
00:14:33,360 --> 00:14:38,480
Speaker 1: be a call inacumenical energy policy that really realizes that

250
00:14:38,560 --> 00:14:42,720
Speaker 1: there it's not as zero some choice between them, uh,

251
00:14:42,760 --> 00:14:45,480
Speaker 1: and to kind of get that balance and and not

252
00:14:45,640 --> 00:14:50,000
Speaker 1: have it be an ideological choices. I mean, what has

253
00:14:50,040 --> 00:14:52,880
Speaker 1: happened the United States with this unconventional revolution really is

254
00:14:52,880 --> 00:14:56,680
Speaker 1: a revolution, enormous impact on the economy, on the world,

255
00:14:57,120 --> 00:14:59,360
Speaker 1: and it's something that you know, even the people in

256
00:14:59,360 --> 00:15:01,640
Speaker 1: the middle of it resort achieving the kind of scale

257
00:15:01,640 --> 00:15:04,440
Speaker 1: that it it has achieved. Dan, You're gonna thank you

258
00:15:04,480 --> 00:15:07,240
Speaker 1: so much. Congratulations on your important essay in the journal

259
00:15:07,280 --> 00:15:10,240
Speaker 1: the other day. I can't say enough, folks again about

260
00:15:10,280 --> 00:15:14,720
Speaker 1: a update of your reading with Commanding Heights. It is

261
00:15:15,800 --> 00:15:19,640
Speaker 1: a bit older, but talks beautifully about the United Kingdom

262
00:15:19,640 --> 00:15:30,560
Speaker 1: that Prime Minister May inherits. We have been talking a

263
00:15:30,600 --> 00:15:32,760
Speaker 1: lot about what's been going on with the European Central

264
00:15:32,760 --> 00:15:35,760
Speaker 1: Bank at Brexit has just absolutely dominated the news, but

265
00:15:35,880 --> 00:15:39,720
Speaker 1: Tom uh, quietly, while all this has been going on,

266
00:15:39,960 --> 00:15:42,920
Speaker 1: the Chinese currency has been moving around a lot, and

267
00:15:42,960 --> 00:15:46,240
Speaker 1: there is a G twenty meeting in China yes, starting

268
00:15:46,320 --> 00:15:50,360
Speaker 1: on Friday, and uh, there are suggestions that while we're

269
00:15:50,400 --> 00:15:54,880
Speaker 1: focused on what's happening across the Atlantic, policymakers are focused

270
00:15:54,880 --> 00:15:57,720
Speaker 1: on what's happening across the Pacifity. Magne lookard about that

271
00:15:57,760 --> 00:15:59,880
Speaker 1: earlier this week and the quiet of this CHANDU me,

272
00:16:00,240 --> 00:16:02,520
Speaker 1: you really wonder if it's that quiet, if it will

273
00:16:02,560 --> 00:16:05,920
Speaker 1: really make news. Ta Wang is with us in our

274
00:16:05,960 --> 00:16:10,320
Speaker 1: New York studios, and to be direct, she had one

275
00:16:10,320 --> 00:16:14,520
Speaker 1: of the great challenges of economics, filling the giant shoes

276
00:16:14,560 --> 00:16:20,400
Speaker 1: of Jonathan Anderson, who was legendary with UBS in China economics.

277
00:16:20,440 --> 00:16:24,040
Speaker 1: All of us read every single word that Jonathan Anderson

278
00:16:24,080 --> 00:16:27,520
Speaker 1: wrote on his China and you've done the miracle of

279
00:16:27,600 --> 00:16:31,280
Speaker 1: miracle TiAl. You took over for Jonathan Anderson and drove

280
00:16:31,360 --> 00:16:35,400
Speaker 1: forward UBS research and honored to have you here. And

281
00:16:35,480 --> 00:16:39,160
Speaker 1: I'll tell you to fill in day one after John Anderson.

282
00:16:39,240 --> 00:16:42,800
Speaker 1: Must have been something the Gloom crew has been wrong

283
00:16:43,720 --> 00:16:48,320
Speaker 1: all along, pre John Anderson, Jonathan Anderson and Ta Wang,

284
00:16:48,560 --> 00:16:51,480
Speaker 1: they've always got it wrong. Why does the hard landing

285
00:16:51,520 --> 00:16:55,840
Speaker 1: crew get China wrong? Well, I think the it's always

286
00:16:55,960 --> 00:16:59,680
Speaker 1: very difficult to time, uh, the the crisis or time

287
00:16:59,800 --> 00:17:03,120
Speaker 1: the the hard lending um and I think the the

288
00:17:03,560 --> 00:17:06,600
Speaker 1: you know super bears are. You know, they have valid

289
00:17:06,680 --> 00:17:10,880
Speaker 1: points about problems building up in the in the Chinese system.

290
00:17:10,920 --> 00:17:15,200
Speaker 1: Where they may have underestimated is the leverest the Chinese

291
00:17:15,240 --> 00:17:18,879
Speaker 1: government has at play. It's a very interventionist government and

292
00:17:18,920 --> 00:17:22,640
Speaker 1: they have a lot of lever, especially on fiscal policy.

293
00:17:22,720 --> 00:17:26,800
Speaker 1: But also there's high savings in China, even though you know,

294
00:17:26,920 --> 00:17:29,919
Speaker 1: Chinese death seems to be high and rising, but with

295
00:17:30,119 --> 00:17:33,640
Speaker 1: very strong and high domestic savings, they can afford to

296
00:17:33,680 --> 00:17:37,160
Speaker 1: continue to do that. I think this is perhaps why

297
00:17:37,440 --> 00:17:41,160
Speaker 1: super bears are underestimate. Well, the Chinese official growth rate

298
00:17:41,440 --> 00:17:45,879
Speaker 1: six point seven matches their estimate, no surprise. There the

299
00:17:45,920 --> 00:17:48,040
Speaker 1: real question everybody wants to know in the black box

300
00:17:48,080 --> 00:17:51,119
Speaker 1: that is the Chinese economy. How fast is China really

301
00:17:51,160 --> 00:17:54,640
Speaker 1: going and how fast do they need to grow? Well,

302
00:17:54,720 --> 00:17:57,640
Speaker 1: so those have two very difficult questions. I'm not sure

303
00:17:57,720 --> 00:18:01,720
Speaker 1: we have the accurate and her um. I think most

304
00:18:01,720 --> 00:18:07,760
Speaker 1: people perhaps believe that the growth is overestimated. But on

305
00:18:07,800 --> 00:18:10,320
Speaker 1: the other hand, you know, if we only look at

306
00:18:10,840 --> 00:18:15,359
Speaker 1: steel and transport and electricity and so on, we perhaps

307
00:18:15,480 --> 00:18:20,120
Speaker 1: only look at these sectors that are really doing badly

308
00:18:20,480 --> 00:18:24,800
Speaker 1: and where services and consumer spending are still pretty resilient.

309
00:18:25,359 --> 00:18:28,320
Speaker 1: I think it's probably somewhere, you know, around the five

310
00:18:28,480 --> 00:18:32,760
Speaker 1: ish um you know, realistically, but I couldn't say, um,

311
00:18:32,800 --> 00:18:35,400
Speaker 1: how fast can you know this? China need to grow?

312
00:18:35,440 --> 00:18:39,200
Speaker 1: It seems the current pace is sufficient to make sure

313
00:18:39,400 --> 00:18:42,960
Speaker 1: there's no major eune employment UM, and China doesn't need

314
00:18:43,160 --> 00:18:46,400
Speaker 1: really six and a half percent even to get UM

315
00:18:46,560 --> 00:18:49,120
Speaker 1: get social stability, which is the key that the government

316
00:18:49,440 --> 00:18:52,440
Speaker 1: worry about. So I think they actually should relax and

317
00:18:52,800 --> 00:18:55,639
Speaker 1: lower the target and maybe make the data you know,

318
00:18:55,720 --> 00:19:01,359
Speaker 1: more realistic very quickly. Here what is called for UBS.

319
00:19:02,040 --> 00:19:05,120
Speaker 1: Our call is six point eight against the dollar this year.

320
00:19:05,320 --> 00:19:07,600
Speaker 1: We're getting there. We're getting there fast. We are getting

321
00:19:07,600 --> 00:19:10,400
Speaker 1: there fast. But it seems that the authorities are defending

322
00:19:10,440 --> 00:19:13,800
Speaker 1: six point seven recently despite the dollar strengths in the

323
00:19:13,880 --> 00:19:18,320
Speaker 1: last couple of days, the PBC appear to have intervened

324
00:19:19,119 --> 00:19:21,919
Speaker 1: at the close of the market to help them set

325
00:19:22,280 --> 00:19:25,840
Speaker 1: a stronger currency in the next day. UM. We Our

326
00:19:25,960 --> 00:19:29,480
Speaker 1: view is that because of China US relations, but also

327
00:19:29,600 --> 00:19:34,800
Speaker 1: because the government does want to show relative stability, they

328
00:19:34,840 --> 00:19:37,160
Speaker 1: may take the chance, you know, sort of take cover

329
00:19:37,280 --> 00:19:39,639
Speaker 1: under brexit to move the currency a bit, but they

330
00:19:39,680 --> 00:19:41,920
Speaker 1: don't want to do it too much, towing with us

331
00:19:42,119 --> 00:19:46,280
Speaker 1: with ubs usually in Asia. Here in our New York studios,

332
00:19:46,280 --> 00:19:48,320
Speaker 1: and we could go all morning. I want to talk

333
00:19:48,359 --> 00:19:54,159
Speaker 1: about something I'm reading Ruth Benedict on Japan and in

334
00:19:54,280 --> 00:19:56,160
Speaker 1: the beginning of the book, this is after World War

335
00:19:56,200 --> 00:20:00,800
Speaker 1: Two is the stark, massive distinction. But in Japan and

336
00:20:00,920 --> 00:20:07,359
Speaker 1: China society bring it forward sixty years. How lakian or

337
00:20:07,640 --> 00:20:13,639
Speaker 1: individualistic is the new Chinese generation? Are they? Are they

338
00:20:13,760 --> 00:20:17,080
Speaker 1: radically different than their parents? Are they radically different than

339
00:20:17,080 --> 00:20:21,320
Speaker 1: their grandparents? I would say they are very different. I

340
00:20:21,359 --> 00:20:26,000
Speaker 1: don't know how radical, but I think yeah. So you know,

341
00:20:26,080 --> 00:20:30,120
Speaker 1: it's also just the transformation of the society um and

342
00:20:30,640 --> 00:20:34,960
Speaker 1: you know economic regime. Individuals have more freedom nowadays, young

343
00:20:35,000 --> 00:20:39,240
Speaker 1: people make their their decisions about where to work without

344
00:20:39,280 --> 00:20:42,720
Speaker 1: the intervention of the state, and certainly less intervention from

345
00:20:42,760 --> 00:20:46,600
Speaker 1: their parents, but also in terms of their marriage. And

346
00:20:46,640 --> 00:20:50,800
Speaker 1: now we were in Chinese we have a term quote moon,

347
00:20:51,240 --> 00:20:55,080
Speaker 1: you know, moon gone. Basically every month your salary is gone.

348
00:20:55,119 --> 00:20:58,840
Speaker 1: So you know this this notion that Chinese are love

349
00:20:58,960 --> 00:21:01,840
Speaker 1: to say, will see in a ten to twenty years

350
00:21:01,880 --> 00:21:05,399
Speaker 1: when young people become the mainstream, they don't seem to

351
00:21:05,600 --> 00:21:08,520
Speaker 1: save as much nearly as as their parents. I think

352
00:21:08,800 --> 00:21:12,080
Speaker 1: that's probably similar to how savings rate had moved in

353
00:21:12,160 --> 00:21:16,600
Speaker 1: Japan as well. Well. Would you characterize China as a

354
00:21:16,640 --> 00:21:20,320
Speaker 1: consumer society in the same way the United States? Is?

355
00:21:20,359 --> 00:21:24,400
Speaker 1: Are are the young people buying stuff on the internet

356
00:21:24,240 --> 00:21:29,560
Speaker 1: at the same rate and watching their devices constantly? Um?

357
00:21:29,800 --> 00:21:33,040
Speaker 1: I think we're not quite there yet, um because people

358
00:21:33,560 --> 00:21:38,280
Speaker 1: probably like myself and older generations are still big savers

359
00:21:38,560 --> 00:21:41,720
Speaker 1: um and and you know, China got rich very quick.

360
00:21:41,880 --> 00:21:45,040
Speaker 1: People's mindset, those people's mindset don't change so fast. But

361
00:21:45,119 --> 00:21:48,280
Speaker 1: young people, yes, they do consume a lot. They spend

362
00:21:49,000 --> 00:21:52,000
Speaker 1: a lot of time on on their gadgets, whether it's um,

363
00:21:52,200 --> 00:21:55,320
Speaker 1: you know, we chat or Internet or games and shopping.

364
00:21:55,400 --> 00:21:59,359
Speaker 1: You know, people actually can renovate their homes all through internet,

365
00:22:00,320 --> 00:22:03,280
Speaker 1: buying everything through the internet. Do they have a respect

366
00:22:03,280 --> 00:22:06,160
Speaker 1: of going into the politborrow meetings here? Do they ever

367
00:22:06,280 --> 00:22:12,800
Speaker 1: respect for the government? Do the young people have a respect? Um? Well,

368
00:22:12,880 --> 00:22:17,080
Speaker 1: I think there, Um, I think there's some tension perhaps

369
00:22:17,280 --> 00:22:21,280
Speaker 1: there are you know, there's um real proud in among

370
00:22:21,320 --> 00:22:24,600
Speaker 1: many Chinese. How about how the Chinese government has handled

371
00:22:24,640 --> 00:22:27,960
Speaker 1: the economy the crisis UM that they have control, but

372
00:22:28,000 --> 00:22:32,120
Speaker 1: there's also a lot of complaints, especially on things that

373
00:22:32,960 --> 00:22:36,520
Speaker 1: affect the daily lives of normal citizens or food safety,

374
00:22:37,200 --> 00:22:41,080
Speaker 1: drug safety, pollutions, corruptions and so on. So there's also

375
00:22:41,680 --> 00:22:46,280
Speaker 1: UM strong undercurrents there. It may not be very apparent

376
00:22:46,520 --> 00:22:49,880
Speaker 1: as here or somewhere else, but I think it's there.

377
00:22:50,280 --> 00:22:53,440
Speaker 1: But how do you move the Chinese off their high

378
00:22:53,560 --> 00:22:57,760
Speaker 1: propensity to save well? I think one important thing is

379
00:22:57,840 --> 00:23:01,160
Speaker 1: to build a better social safety net UM so that

380
00:23:01,200 --> 00:23:04,439
Speaker 1: people uh know that they have social security, they have

381
00:23:04,520 --> 00:23:07,240
Speaker 1: pension when they retire, they don't have to save too much,

382
00:23:07,240 --> 00:23:10,960
Speaker 1: and also most importantly have health care insurance because you

383
00:23:11,359 --> 00:23:15,720
Speaker 1: can never really calculate how much your life is coming. Yes,

384
00:23:15,800 --> 00:23:17,960
Speaker 1: those things are coming. In the last few years the

385
00:23:17,960 --> 00:23:23,000
Speaker 1: government has has pushed very steadfastly on that front. Increase

386
00:23:23,040 --> 00:23:27,119
Speaker 1: the coverage and increase the the the national polling of

387
00:23:27,200 --> 00:23:30,560
Speaker 1: that UM. I think another thing is is actually to

388
00:23:31,359 --> 00:23:33,880
Speaker 1: reform of the you know, the s is the state

389
00:23:33,920 --> 00:23:37,720
Speaker 1: on the enterprises, to reduce the corporate saving and corporate

390
00:23:37,760 --> 00:23:40,919
Speaker 1: borrowing as well. When you I mean you're you're sitting

391
00:23:40,920 --> 00:23:44,360
Speaker 1: over there, We're all trying to figure out what matters

392
00:23:44,440 --> 00:23:46,679
Speaker 1: when the data come out? What do you look at? What?

393
00:23:46,800 --> 00:23:49,879
Speaker 1: Really what data tell you what's really going on to

394
00:23:49,920 --> 00:23:51,480
Speaker 1: the extent that you can figure it out in the

395
00:23:51,560 --> 00:23:54,520
Speaker 1: Chinese economy. UM. So for me, I yeah, I look

396
00:23:54,560 --> 00:23:59,440
Speaker 1: at it a few things. I think the big volatile components, UM,

397
00:23:59,680 --> 00:24:02,879
Speaker 1: we pay a lot of attention and that tend to

398
00:24:02,960 --> 00:24:07,440
Speaker 1: be property related, so property sales, property starts. That tells

399
00:24:07,480 --> 00:24:10,199
Speaker 1: me a lot about what may happen to you know,

400
00:24:10,280 --> 00:24:14,040
Speaker 1: steal and co and transport, all the heavy industry related stuff. Um.

401
00:24:14,119 --> 00:24:17,040
Speaker 1: And also we know that a big level of the

402
00:24:17,080 --> 00:24:21,480
Speaker 1: government polls is actually credit, so credit and monetary data

403
00:24:21,560 --> 00:24:24,879
Speaker 1: is important. That is not very um, you know, market

404
00:24:24,960 --> 00:24:29,320
Speaker 1: driven is actually away the government supports growth. And finally

405
00:24:29,359 --> 00:24:33,520
Speaker 1: I also look at exports, imports, and I would double

406
00:24:33,640 --> 00:24:37,119
Speaker 1: checked that data, cross check that data with you know US, uh,

407
00:24:37,520 --> 00:24:42,360
Speaker 1: you know consumer spending, US imports and European imports as well,

408
00:24:42,680 --> 00:24:47,080
Speaker 1: and then consumer spending, but we also cross checked that

409
00:24:47,320 --> 00:24:51,240
Speaker 1: with you know, migrant wage growth, um, as well as

410
00:24:51,359 --> 00:24:55,160
Speaker 1: you know internet spending, tourism arrivals and and so on.

411
00:24:55,240 --> 00:25:00,640
Speaker 1: How would you adapt, rather how should President Trump President

412
00:25:00,760 --> 00:25:08,159
Speaker 1: Clinton adapt our economic policy to China? Wow? Um, and

413
00:25:08,240 --> 00:25:18,360
Speaker 1: you've got seconds. Yeah. UM, so that's a very difficult question. Well,

414
00:25:18,400 --> 00:25:22,840
Speaker 1: I I think that I hope that whoever becomes president

415
00:25:23,200 --> 00:25:26,879
Speaker 1: then in the United States that they will continue to

416
00:25:27,320 --> 00:25:31,159
Speaker 1: work with China in terms of continued global sort of

417
00:25:31,480 --> 00:25:34,840
Speaker 1: integration of the global economy instead of you know, moving

418
00:25:34,880 --> 00:25:38,040
Speaker 1: back the trend. I think China has really benefited from

419
00:25:38,280 --> 00:25:42,320
Speaker 1: from global globalization UM, and US as well, probably in

420
00:25:42,400 --> 00:25:46,960
Speaker 1: different ways. UM, So the rise of China shouldn't be

421
00:25:47,119 --> 00:25:50,360
Speaker 1: seen as a threat. I hope there's you know, mutual benefit.

422
00:25:50,680 --> 00:25:56,159
Speaker 1: So UM and and the US can perhaps be more um,

423
00:25:56,200 --> 00:25:59,679
Speaker 1: you know, focused on Chinese consumers and rather than you know,

424
00:25:59,760 --> 00:26:03,199
Speaker 1: look it just the exchange rate and so on, and

425
00:26:03,240 --> 00:26:07,919
Speaker 1: also perhaps help UM China to avoid um, you know

426
00:26:08,000 --> 00:26:11,920
Speaker 1: crisis that everybody fears. UM. There's certainly a lot of problems,

427
00:26:11,960 --> 00:26:15,240
Speaker 1: you know, help help to work with China on you know,

428
00:26:15,280 --> 00:26:18,439
Speaker 1: some of the s E reforms and fiscal reforms instead

429
00:26:18,480 --> 00:26:23,080
Speaker 1: of just focusing the currency and financial markets opening. I

430
00:26:23,119 --> 00:26:27,080
Speaker 1: need to focus on currency though with the with the

431
00:26:27,160 --> 00:26:31,920
Speaker 1: G twenty meeting coming up this weekend. Uh, we've seen

432
00:26:32,119 --> 00:26:35,760
Speaker 1: the the you want, the decline against the dollar, but

433
00:26:35,840 --> 00:26:40,320
Speaker 1: even more significantly against the basket, which is the most

434
00:26:40,400 --> 00:26:44,400
Speaker 1: important measure at this point in the currency market. Um,

435
00:26:44,560 --> 00:26:48,480
Speaker 1: the basket or the dollar. I think most people are

436
00:26:48,520 --> 00:26:53,080
Speaker 1: still watching dollars C and y um the basket. Um.

437
00:26:53,160 --> 00:26:56,320
Speaker 1: You know, the government, the PBC says they're referencing more

438
00:26:56,440 --> 00:26:59,359
Speaker 1: to the basket, but they also said we're not pegging

439
00:26:59,400 --> 00:27:01,760
Speaker 1: to the basket. We're looking at dollar, cy and WI

440
00:27:01,800 --> 00:27:04,000
Speaker 1: as well. That I would say it's it's used as

441
00:27:04,040 --> 00:27:08,560
Speaker 1: a discretion um. In recent weeks, actually the C and

442
00:27:08,600 --> 00:27:11,960
Speaker 1: one hasn't depreciated much against the basket. It's more against

443
00:27:12,000 --> 00:27:15,400
Speaker 1: the dollar when the dollar strengthens. Much of the depreciation

444
00:27:15,840 --> 00:27:18,919
Speaker 1: basket happened when dollar was weak, so they were happy

445
00:27:18,960 --> 00:27:22,960
Speaker 1: to ride the dollar weakness if the market allows them.

446
00:27:23,119 --> 00:27:27,119
Speaker 1: So it's a really opportunistic approach. Um. So if I

447
00:27:27,160 --> 00:27:29,560
Speaker 1: think if the market allows them, a little bit of

448
00:27:29,600 --> 00:27:33,359
Speaker 1: depreciation can be useful, can be can be helpful given

449
00:27:33,400 --> 00:27:36,240
Speaker 1: that you know, domestic economy is really weak. Is this

450
00:27:36,680 --> 00:27:39,159
Speaker 1: only ten seconds here? But is this manipulation or is

451
00:27:39,840 --> 00:27:43,120
Speaker 1: opportunism as you say, I would say it's an opportunism

452
00:27:43,280 --> 00:27:46,399
Speaker 1: because actually, if they are still intervening heavily in the

453
00:27:46,440 --> 00:27:49,440
Speaker 1: market to defend the currency. If they didn't want to,

454
00:27:49,920 --> 00:27:52,679
Speaker 1: you know, if they wanted to depreciate a lot, they

455
00:27:52,680 --> 00:27:56,680
Speaker 1: could easily have done that. So the market wants it lower. Yes,

456
00:27:57,800 --> 00:28:00,199
Speaker 1: thank you very much. Thank you. It's great to have

457
00:28:00,240 --> 00:28:03,240
Speaker 1: you here. Have somebody you know, with the expertise actually

458
00:28:03,640 --> 00:28:20,000
Speaker 1: in the studio. Ubs bring in our next guest. On

459
00:28:20,119 --> 00:28:24,160
Speaker 1: the backstory of the New York Times interview of yesterday.

460
00:28:24,240 --> 00:28:27,280
Speaker 1: Nobody's talking about it, and well is it caught my eye?

461
00:28:27,400 --> 00:28:30,520
Speaker 1: First thing, because of course the convention is show biz.

462
00:28:30,560 --> 00:28:33,720
Speaker 1: But Donald Trump gave an interview to Maggie Haberman and

463
00:28:33,760 --> 00:28:36,360
Speaker 1: to David Sanger of the New York Times. They pick

464
00:28:36,440 --> 00:28:38,480
Speaker 1: up where they left off with him earlier this year

465
00:28:38,560 --> 00:28:43,160
Speaker 1: on foreign policy. Basically, he said, if if the Europeans

466
00:28:43,160 --> 00:28:45,160
Speaker 1: don't pay up there on their own, NATO is dead.

467
00:28:45,200 --> 00:28:47,680
Speaker 1: He's not going to defend any of the countries in Europe.

468
00:28:48,320 --> 00:28:52,680
Speaker 1: A remarkable statement. Almost some say an invitation to Vladimir

469
00:28:52,720 --> 00:28:56,520
Speaker 1: Putin to invade the Baltic nations. Greg Va is a

470
00:28:56,840 --> 00:29:00,080
Speaker 1: chief political analyst for Horizon Investments in Greg, I know

471
00:29:00,160 --> 00:29:03,240
Speaker 1: this caught your eye too. Just astonishing, Mike, the fact

472
00:29:03,320 --> 00:29:05,960
Speaker 1: that he would say that, you know, how do you

473
00:29:06,000 --> 00:29:09,840
Speaker 1: feel this morning, if you live in Lithuania or Latvia,

474
00:29:10,080 --> 00:29:13,920
Speaker 1: I mean, his comments were just absolutely astonishing. If you

475
00:29:13,960 --> 00:29:16,160
Speaker 1: live there, you're you're feeling like you wish you could

476
00:29:16,240 --> 00:29:20,960
Speaker 1: register to vote in the US. Yeah. Absolutely, Maybe he'll

477
00:29:21,000 --> 00:29:23,840
Speaker 1: moderate it, you know, maybe you know, people can get

478
00:29:23,880 --> 00:29:26,440
Speaker 1: to him. But if these are his real beliefs, it's

479
00:29:26,480 --> 00:29:29,720
Speaker 1: still another reason why people like Ted Cruz still have

480
00:29:29,800 --> 00:29:33,560
Speaker 1: support in the party. He goes on to say that

481
00:29:34,280 --> 00:29:37,760
Speaker 1: he uses his standard formulation. Some people say the coup

482
00:29:37,840 --> 00:29:40,960
Speaker 1: in Turkey was staged. Well, that's a tactic of his.

483
00:29:41,080 --> 00:29:44,760
Speaker 1: He says, Well, some people would say that Ted Cruz's

484
00:29:44,840 --> 00:29:48,240
Speaker 1: father was involved in John Kennedy's assassination. You know, not

485
00:29:48,360 --> 00:29:52,280
Speaker 1: that I would say that, but some people would say that, Yeah,

486
00:29:52,360 --> 00:29:53,880
Speaker 1: that takes us right where Tom want to go to

487
00:29:53,920 --> 00:29:57,520
Speaker 1: the to the convention last night, jaw dropping Ted Cruz,

488
00:29:58,160 --> 00:30:02,000
Speaker 1: revenge is a dish, bestie and cold. I guess well,

489
00:30:02,320 --> 00:30:04,600
Speaker 1: I did a piece this morning. I talked about three

490
00:30:04,800 --> 00:30:07,720
Speaker 1: three reasons why I did. At Number one, just revenge,

491
00:30:07,760 --> 00:30:12,280
Speaker 1: I mean, Trump mocked Cruz's wife, called him lying Ted.

492
00:30:12,720 --> 00:30:15,400
Speaker 1: Number two, I think an awful lot of conservatives look

493
00:30:15,440 --> 00:30:18,000
Speaker 1: at Donald Trump and see someone who is not a

494
00:30:18,080 --> 00:30:22,160
Speaker 1: conservative on issue after issue, and then finally number three

495
00:30:22,440 --> 00:30:26,120
Speaker 1: Cruises running in along with about a dozen other people,

496
00:30:26,480 --> 00:30:29,000
Speaker 1: and I think Cruise wants to make it clear that

497
00:30:29,280 --> 00:30:32,040
Speaker 1: he's going to be a big player in Greg, we

498
00:30:32,080 --> 00:30:34,840
Speaker 1: could go literally for two hours this morning on this.

499
00:30:35,440 --> 00:30:38,520
Speaker 1: The most interesting thing for me, Greg was to watch

500
00:30:38,600 --> 00:30:42,400
Speaker 1: my children watch the show last night. The prison that

501
00:30:42,480 --> 00:30:45,920
Speaker 1: they have is not what we have. Compare and contrast

502
00:30:46,000 --> 00:30:48,720
Speaker 1: in your notes recently have been brilliant on this where

503
00:30:48,720 --> 00:30:52,480
Speaker 1: they are versus a U H. Two oh ninety four

504
00:30:53,000 --> 00:30:58,720
Speaker 1: Wenda Wilkie, Thank you, Arthur levittt or William Jennings Brian

505
00:30:59,280 --> 00:31:05,240
Speaker 1: of another Compare and contrast well. I understand the appeal

506
00:31:05,240 --> 00:31:08,160
Speaker 1: of populism, but populist has never done very well in

507
00:31:08,240 --> 00:31:13,640
Speaker 1: general elections. William Jennings Bryant lost three times in general elections.

508
00:31:13,840 --> 00:31:15,840
Speaker 1: I think the thing that really stands out for me

509
00:31:15,920 --> 00:31:18,440
Speaker 1: and Chris. We still have tonight to go, but is

510
00:31:18,480 --> 00:31:22,080
Speaker 1: the amateurist is it's really not ready for prime time.

511
00:31:22,920 --> 00:31:25,600
Speaker 1: I don't think they project an image that would make

512
00:31:25,680 --> 00:31:30,520
Speaker 1: people feel comfortable about a Trump presidency. What can he

513
00:31:30,560 --> 00:31:34,200
Speaker 1: say tonight? What would you expect you to say? What

514
00:31:34,280 --> 00:31:38,360
Speaker 1: can you say that could change any viewpoints about him

515
00:31:38,440 --> 00:31:40,960
Speaker 1: and his policies. Yeah, it's a good point, Mike. I

516
00:31:41,000 --> 00:31:44,000
Speaker 1: mean I think that you know, they had to objectives.

517
00:31:44,040 --> 00:31:46,920
Speaker 1: One was to demonize Hillary Clinton, and my god, they

518
00:31:46,960 --> 00:31:49,880
Speaker 1: certainly have done that. Uh. And second is to give

519
00:31:49,920 --> 00:31:53,040
Speaker 1: people reasons to vote for Donald Trump. They have not

520
00:31:53,240 --> 00:31:55,680
Speaker 1: done that. I think he needs to lay out some

521
00:31:55,760 --> 00:31:58,240
Speaker 1: kind of an agenda, and as we all know, he's

522
00:31:58,280 --> 00:32:01,920
Speaker 1: pretty vague on anything that he would actually do. I mean,

523
00:32:02,040 --> 00:32:04,240
Speaker 1: I don't want to disparage him totally. I mean, he's

524
00:32:04,240 --> 00:32:07,120
Speaker 1: got a populous message that resonates with a lot of

525
00:32:07,160 --> 00:32:10,640
Speaker 1: people who are very upset or was seeing their real

526
00:32:11,320 --> 00:32:15,440
Speaker 1: disposable income stagnant for a decade. He'll talk about that,

527
00:32:15,840 --> 00:32:18,120
Speaker 1: but I'm not sure. I wrote this morning, I don't

528
00:32:18,120 --> 00:32:21,320
Speaker 1: even think Winston Churchill could save this convention. I don't

529
00:32:21,360 --> 00:32:24,320
Speaker 1: think one speech is going to do it. Well, then

530
00:32:24,720 --> 00:32:27,920
Speaker 1: what is the prescription for the party? I mean, I

531
00:32:28,240 --> 00:32:31,440
Speaker 1: understand they got to get to Friday. Whatever anybody's political

532
00:32:31,480 --> 00:32:34,200
Speaker 1: persuasion is, I guess the goals to try to not

533
00:32:34,280 --> 00:32:37,880
Speaker 1: do any more harm. What's the then what Greg Villier?

534
00:32:38,280 --> 00:32:42,520
Speaker 1: Obviously Secretary Clinton gets her moment, But then what is

535
00:32:42,600 --> 00:32:47,040
Speaker 1: the then what in this unconventional party. Well, I think

536
00:32:47,080 --> 00:32:50,080
Speaker 1: Tom for the for the Republicans, for the Koch brothers,

537
00:32:50,080 --> 00:32:53,520
Speaker 1: for the Ricketts family that will still contribute money. It's

538
00:32:53,680 --> 00:32:56,600
Speaker 1: the other races. It's the Senate, it's the House that's

539
00:32:56,640 --> 00:32:59,600
Speaker 1: still in play. The Senate is definitely in place. I

540
00:32:59,600 --> 00:33:03,160
Speaker 1: think he'll see a lot of activity focus there. But

541
00:33:03,800 --> 00:33:06,400
Speaker 1: you know, you look at the Trump's staff, less than

542
00:33:06,400 --> 00:33:10,360
Speaker 1: a hundred people. You look at their their rookies, rookies

543
00:33:10,400 --> 00:33:13,320
Speaker 1: make rookie mistakes. It's going to be awfully hard to

544
00:33:13,560 --> 00:33:17,600
Speaker 1: bounce back quickly after this convention. Well, clearly they've they've

545
00:33:17,680 --> 00:33:20,640
Speaker 1: all been all the speakers have been saying, let's unify, unify, unify,

546
00:33:20,680 --> 00:33:23,440
Speaker 1: and clearly that's not going to happen. But is it

547
00:33:23,520 --> 00:33:24,800
Speaker 1: going to get worse? Are they going to go the

548
00:33:24,880 --> 00:33:28,440
Speaker 1: other way? As the full nature of the Trump campaign

549
00:33:28,920 --> 00:33:31,479
Speaker 1: is revealed in these kinds of episodes, Are we're going

550
00:33:31,520 --> 00:33:34,400
Speaker 1: to see more people maybe pulling back from their endorsements

551
00:33:34,440 --> 00:33:37,720
Speaker 1: and every man for himself, woman for herself in terms

552
00:33:37,760 --> 00:33:40,720
Speaker 1: of trying to elect people downballot. Yeah, let's let's see

553
00:33:40,720 --> 00:33:44,120
Speaker 1: what the polls look like after the Democrats at the

554
00:33:44,200 --> 00:33:47,080
Speaker 1: end of next week, eight days from now, we'll see

555
00:33:47,120 --> 00:33:49,760
Speaker 1: how the polls look. If they show Hillary Clinton is

556
00:33:49,800 --> 00:33:53,320
Speaker 1: comfortably ahead, then I think you'll really feel a sense

557
00:33:53,360 --> 00:33:55,760
Speaker 1: of panic in the party. But you know, the polls

558
00:33:55,840 --> 00:33:58,240
Speaker 1: might show there still only a four or five point race.

559
00:33:58,600 --> 00:34:00,600
Speaker 1: If that's true, I think a lot of people like

560
00:34:00,640 --> 00:34:04,240
Speaker 1: Paul Ryan and Mitch McConnell, who in private can't stand Trump,

561
00:34:04,480 --> 00:34:07,000
Speaker 1: will put on a good face and they'll they'll try

562
00:34:07,000 --> 00:34:10,400
Speaker 1: to win this Where is is that the popular vote

563
00:34:10,440 --> 00:34:12,880
Speaker 1: that there are four percent apart on or is that

564
00:34:13,000 --> 00:34:16,919
Speaker 1: state by state battlegroun you know, the states that matter. Yeah,

565
00:34:16,920 --> 00:34:23,000
Speaker 1: that's an important distinction. I think that in the battlegrounds Pennsylvania, Ohio, Michigan,

566
00:34:23,080 --> 00:34:26,680
Speaker 1: North Carolina, Florida, it's pretty close, at least it was

567
00:34:26,719 --> 00:34:29,600
Speaker 1: before this convention started. But that's not enough to get

568
00:34:29,600 --> 00:34:33,600
Speaker 1: you to seventy. I think to get to seventy electoral votes,

569
00:34:33,680 --> 00:34:36,279
Speaker 1: he'd have to do a bit better. There were some

570
00:34:36,320 --> 00:34:40,240
Speaker 1: polls that showed him closing the gap in some states

571
00:34:40,280 --> 00:34:43,239
Speaker 1: like Florida. Do you take those at face value? Has

572
00:34:43,239 --> 00:34:46,120
Speaker 1: he actually moved you know? The the the old adage

573
00:34:46,160 --> 00:34:49,120
Speaker 1: I think is true, Mike, that the polls really don't

574
00:34:49,160 --> 00:34:51,920
Speaker 1: mean a lot until you get both conventions out of

575
00:34:51,920 --> 00:34:55,000
Speaker 1: the way, So I would submit that in early August

576
00:34:55,000 --> 00:34:57,880
Speaker 1: the polls will really start to mean a lot, and

577
00:34:57,920 --> 00:35:00,880
Speaker 1: I do think some of these states will stay close,

578
00:35:01,000 --> 00:35:04,080
Speaker 1: but again they have not helped themselves. I mean, he

579
00:35:04,160 --> 00:35:08,240
Speaker 1: does need to make a really extraordinary compelling speech tonight

580
00:35:08,600 --> 00:35:12,879
Speaker 1: to get back on track. Do you think he will? Well,

581
00:35:12,880 --> 00:35:15,359
Speaker 1: you know, he's going to read from the teleprompter, and

582
00:35:15,400 --> 00:35:17,600
Speaker 1: he's pretty stiff when he does that. He doesn't read.

583
00:35:17,680 --> 00:35:23,239
Speaker 1: Watch yourself, that's what I do in radio. Well, you

584
00:35:23,280 --> 00:35:25,680
Speaker 1: know Obama is really good at it, and Chris Trump

585
00:35:25,680 --> 00:35:27,400
Speaker 1: mocked him for it. But Trump's going to use a

586
00:35:27,400 --> 00:35:31,239
Speaker 1: teleprompter tonight and that's not his strong suit. So I'm

587
00:35:31,239 --> 00:35:33,560
Speaker 1: not sure it will be compelling. And I tell you,

588
00:35:33,640 --> 00:35:36,960
Speaker 1: if he revisits an issue like maybe not defending the

589
00:35:37,000 --> 00:35:40,640
Speaker 1: Baltic States, if he talks about America first like he

590
00:35:40,680 --> 00:35:44,640
Speaker 1: did in that interview, the post speech spin is going

591
00:35:44,680 --> 00:35:48,239
Speaker 1: to be about all of these very controversial positions that

592
00:35:48,280 --> 00:35:50,879
Speaker 1: he has very quickly. Let me ask you this without

593
00:35:51,320 --> 00:35:54,400
Speaker 1: jinxing the good people of Cleveland, But are you surprised

594
00:35:54,880 --> 00:35:57,120
Speaker 1: that it's been as dull as it has been there

595
00:35:57,160 --> 00:36:00,440
Speaker 1: him in any you know, civil disturbances, that sort of

596
00:36:00,440 --> 00:36:03,560
Speaker 1: thing that people predicted. Yeah, you know, everybody talked about

597
00:36:03,640 --> 00:36:07,279
Speaker 1: this is gonna be Chicago. N it hasn't been. And

598
00:36:07,400 --> 00:36:10,600
Speaker 1: I actually think there's going to be more disruptive protests

599
00:36:10,680 --> 00:36:15,279
Speaker 1: in Philadelphia next week at the Democrats convention. Interesting one

600
00:36:15,280 --> 00:36:19,920
Speaker 1: final question thirty seconds we treasure your notes and your attendance.

601
00:36:20,600 --> 00:36:24,840
Speaker 1: What would William Lobe the third say iconic at the

602
00:36:24,880 --> 00:36:29,920
Speaker 1: Manchester Union Leader of Year, New Hampshire. What would William

603
00:36:29,960 --> 00:36:33,200
Speaker 1: Lobe the third say about Mr Trump? Well, we could

604
00:36:33,200 --> 00:36:36,120
Speaker 1: talk about ego, his style, all of this stuff, but

605
00:36:36,160 --> 00:36:39,880
Speaker 1: I think at the core a real conservatives like Lobe

606
00:36:39,880 --> 00:36:43,960
Speaker 1: and George will see someone who is not a real conservative.

607
00:36:44,200 --> 00:36:48,399
Speaker 1: Greg Let's move east from Cleveland to Philadelphia next week.

608
00:36:49,280 --> 00:36:52,800
Speaker 1: Hillary Clinton gets her chance. Interesting cover story in Time

609
00:36:52,840 --> 00:36:56,560
Speaker 1: magazine coming out today. They note that she has been

610
00:36:56,640 --> 00:37:00,440
Speaker 1: a fixture on the American political scene for forty year

611
00:37:00,600 --> 00:37:05,600
Speaker 1: forty years, and yet everybody feels they know Bill Clinton

612
00:37:06,200 --> 00:37:09,759
Speaker 1: really well, and nobody really knows this woman. Uh, you know,

613
00:37:09,840 --> 00:37:13,399
Speaker 1: she's she is not warm and fuzzy. She is not

614
00:37:13,920 --> 00:37:16,080
Speaker 1: the kind of person that you can say, you know,

615
00:37:16,160 --> 00:37:19,440
Speaker 1: I know what she's thinking. Yeah, it's a great point.

616
00:37:19,520 --> 00:37:25,440
Speaker 1: As she's enigmatic, one might say, uh, somewhat unknown. There

617
00:37:25,520 --> 00:37:28,840
Speaker 1: was a story, I guess a month ago where Trump,

618
00:37:28,880 --> 00:37:32,760
Speaker 1: I think, said that Hillary Clinton wasn't religious. She's actually

619
00:37:32,800 --> 00:37:36,319
Speaker 1: devoutly religious, has been for all of her life. There

620
00:37:36,320 --> 00:37:37,960
Speaker 1: are a lot of things about her that people just

621
00:37:38,000 --> 00:37:41,239
Speaker 1: don't know. Are they going to fix that in Philadelphia? Oh,

622
00:37:41,280 --> 00:37:43,880
Speaker 1: I'm sure. I think it'll be well done. First of all,

623
00:37:43,920 --> 00:37:45,839
Speaker 1: they're going to get Bernie Sanders out of the way

624
00:37:45,920 --> 00:37:48,800
Speaker 1: on Monday, which is a smart move as we've seen

625
00:37:49,200 --> 00:37:52,360
Speaker 1: after the cruise fiasco. So yes, I think it's going

626
00:37:52,400 --> 00:37:55,160
Speaker 1: to be very well choreographed. I don't see a lot

627
00:37:55,200 --> 00:37:58,880
Speaker 1: of the same you know, amateur problems we've seen this week.

628
00:37:59,160 --> 00:38:01,000
Speaker 1: So yeah, I think the public will get a better

629
00:38:01,040 --> 00:38:03,799
Speaker 1: feel for just who she is. I was surprised within

630
00:38:03,880 --> 00:38:07,800
Speaker 1: the you know, the twitter sphere, Greg how all of

631
00:38:07,880 --> 00:38:11,320
Speaker 1: a sudden former President Clinton was weighing in on Kane

632
00:38:11,320 --> 00:38:15,160
Speaker 1: of Virginia. Is Mr Clinton going to be pushed aside

633
00:38:15,200 --> 00:38:17,920
Speaker 1: in Philadelphia or does he like come out and be

634
00:38:18,000 --> 00:38:21,520
Speaker 1: front and center. What's that dynamic right now? Probably the latter,

635
00:38:21,640 --> 00:38:24,799
Speaker 1: I think the base, the activists and the party adore him,

636
00:38:24,960 --> 00:38:27,480
Speaker 1: and I think he'll play a big role. But once

637
00:38:27,560 --> 00:38:31,319
Speaker 1: that's over, I think you look at Bill's mistakes, the

638
00:38:31,760 --> 00:38:35,920
Speaker 1: disastrous visit with Loretta Lynch on the tarmac in Phoenix,

639
00:38:36,480 --> 00:38:39,040
Speaker 1: some other problems that where Bill's comments have had to

640
00:38:39,080 --> 00:38:41,799
Speaker 1: be you know, clarified. You know, I think as we

641
00:38:41,840 --> 00:38:44,239
Speaker 1: get into the general election, Bill will not be quite

642
00:38:44,280 --> 00:38:46,400
Speaker 1: as dominant. Got to ask you about who's going to

643
00:38:46,480 --> 00:38:48,320
Speaker 1: be the number three person in the White House, the

644
00:38:48,400 --> 00:38:52,399
Speaker 1: vice president behind Hillary and Bill. We're told now it's

645
00:38:52,560 --> 00:38:55,239
Speaker 1: kind of a contest between Tim Kane and tom Ville Sack.

646
00:38:55,360 --> 00:38:58,480
Speaker 1: And you know, you've got um not a lot of

647
00:38:58,520 --> 00:39:03,239
Speaker 1: pizzas there is Hillary feeling like she's she doesn't need

648
00:39:03,320 --> 00:39:05,959
Speaker 1: to roll the dice or take a chance. Yeah, most

649
00:39:05,960 --> 00:39:09,480
Speaker 1: people who know her say she's quite risk averse. So

650
00:39:09,760 --> 00:39:12,560
Speaker 1: Tim Caine would be perfect. I don't see a big downside.

651
00:39:12,920 --> 00:39:16,000
Speaker 1: He comes from a state that has thirteen electoral votes.

652
00:39:16,040 --> 00:39:19,399
Speaker 1: That's a big deal. Yeah, he even even Caine says

653
00:39:19,480 --> 00:39:22,319
Speaker 1: he's boring. But I don't think he'd hurt her. And

654
00:39:22,360 --> 00:39:25,480
Speaker 1: we can see in history, with a few notable exceptions

655
00:39:25,520 --> 00:39:29,360
Speaker 1: like JFK picking Lyndon Johnson. You know, running mate doesn't

656
00:39:29,400 --> 00:39:32,880
Speaker 1: mean all that much, so I think Caine would be perfect.

657
00:39:33,160 --> 00:39:36,840
Speaker 1: Hick and Looper of Colorado. Vill Sack that The wild

658
00:39:36,840 --> 00:39:40,320
Speaker 1: card that's the most intriguing to me is a retired

659
00:39:40,440 --> 00:39:44,640
Speaker 1: admiral or general, somebody who's really good on geopolitical issues

660
00:39:44,680 --> 00:39:51,400
Speaker 1: like terrorism. Maybe Admiral Travins from Tons. He's apparely impressed

661
00:39:51,400 --> 00:39:55,120
Speaker 1: everyone that has met with him. It's a long shot.

662
00:39:55,160 --> 00:39:58,040
Speaker 1: I still think Kine is the safest bet, but I

663
00:39:58,080 --> 00:40:00,680
Speaker 1: think the admiral is not totally out of the running.

664
00:40:01,239 --> 00:40:03,640
Speaker 1: He has impressed Tom and I a regular guest here. Yeah,

665
00:40:03,680 --> 00:40:05,880
Speaker 1: we talked to all the time. Full disclosure, folks. On

666
00:40:05,880 --> 00:40:08,280
Speaker 1: that I put out a Twitter shot that some student

667
00:40:08,320 --> 00:40:12,880
Speaker 1: took it toughs of the door of Dean Stravides's office

668
00:40:13,600 --> 00:40:15,680
Speaker 1: is he was, no doubt waiting for a phone call

669
00:40:16,360 --> 00:40:20,480
Speaker 1: from from the secretary. Greg, Let's cut to the chase

670
00:40:20,520 --> 00:40:24,319
Speaker 1: of your important note. How close is this election? I

671
00:40:24,360 --> 00:40:26,920
Speaker 1: think right now it's the The issue is will Hillary

672
00:40:26,920 --> 00:40:30,239
Speaker 1: Clinton win modestly or will she win in the landslide.

673
00:40:30,280 --> 00:40:33,960
Speaker 1: I think those are the two most likely scenarios. You know,

674
00:40:34,040 --> 00:40:38,640
Speaker 1: you can't rule out a Trump move in Pennsylvania, Ohio, Michigan.

675
00:40:38,719 --> 00:40:42,040
Speaker 1: You can't rule out this being close, but I think

676
00:40:42,080 --> 00:40:44,880
Speaker 1: that I'm right now saying she wins by four or

677
00:40:44,880 --> 00:40:48,080
Speaker 1: five six points. That is not enough to flip the

678
00:40:48,160 --> 00:40:51,359
Speaker 1: House back to the Democrats, and that's a big deal

679
00:40:51,719 --> 00:40:54,480
Speaker 1: for the markets. I think it's the market see her winning,

680
00:40:54,480 --> 00:40:58,040
Speaker 1: but with divided government in Congress, the markets can live

681
00:40:58,040 --> 00:41:01,160
Speaker 1: with that. Brilliant Thank you so much. I always appreciate it.

682
00:41:01,160 --> 00:41:05,880
Speaker 1: With Horizon with terrific analysis. Thanks for listening to the

683
00:41:05,880 --> 00:41:11,960
Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on iTunes, SoundCloud,

684
00:41:12,280 --> 00:41:16,279
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at

685
00:41:16,320 --> 00:41:21,080
Speaker 1: Tom Keane, Michael McKee is at Economy Before the podcast.

686
00:41:21,160 --> 00:41:24,680
Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio