WEBVTT - Surveillance: We've Had Too Little Globalization, Mann Says 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:30.240 Bloomberg dot Com and of course on the Bloomberg. This 0:00:30.320 --> 0:00:34.040 is a joy anytime you see head of Global research, 0:00:34.800 --> 0:00:37.159 that's uses someone who spends a lot of time on 0:00:37.240 --> 0:00:41.640 airplanes just recruiting people and all that and talking to 0:00:41.680 --> 0:00:45.160 their investor clients, you know, and they sometimes they sort 0:00:45.159 --> 0:00:48.320 of know what they're talking about inequities, bonds, and then 0:00:48.400 --> 0:00:51.640 sometimes they don't. JP Morgan takes a different tex their 0:00:51.760 --> 0:00:55.920 Joyce Chang is head of Global Research, Chair Global at Research, 0:00:56.040 --> 0:01:00.520 and she has prodigious abilities in the fixed in market 0:01:00.880 --> 0:01:04.959 in including tenure at Columbia University. Joyce, wonderful to have 0:01:05.000 --> 0:01:07.160 you in our London studios. Let me ask you an 0:01:07.160 --> 0:01:11.280 open question. Get started. What is the Joyce Chang observation 0:01:11.840 --> 0:01:15.679 on fixed income right now? Well, it's great to be here. Tom. Well, 0:01:15.720 --> 0:01:18.399 first of all, we expect yields to go lower. We're 0:01:18.400 --> 0:01:21.520 seeing synchronized central bank easing, so it's not just all 0:01:21.560 --> 0:01:24.240 about the Fed in total for what we expect in 0:01:24.280 --> 0:01:26.640 central bank easing. We think that the e c B, 0:01:27.200 --> 0:01:29.800 the b o J is going to follow and thirteen 0:01:30.400 --> 0:01:34.399 emerging market central bank, So yields are going lower here UM, 0:01:34.400 --> 0:01:36.320 and so we've seen you know, the best returns and 0:01:36.400 --> 0:01:39.440 fixed income markets in about the last five years. UM. 0:01:39.600 --> 0:01:41.120 You know, there's a little bit further for this to 0:01:41.200 --> 0:01:46.040 go as UM yields come down. So importantly, if prices 0:01:46.280 --> 0:01:50.720 up institutional retail yield down, do I want to lock 0:01:50.840 --> 0:01:54.080 in that appreciation or are you just comfortable now? You 0:01:54.120 --> 0:01:57.560 know the Joyce does as she clips coupons down in 0:01:57.600 --> 0:02:00.440 the new Park Avenue office. Jamie's got a asked down 0:02:00.480 --> 0:02:03.280 in the basement for Joyce to clip coupons. Well, you've 0:02:03.320 --> 0:02:06.200 got to hold onto these gains because what's ahead for 0:02:06.280 --> 0:02:08.760 the rest of the year, weather it's in fixed incomeer equities, 0:02:08.960 --> 0:02:11.760 is mostly about preserving the game that we are expecting 0:02:12.000 --> 0:02:14.680 no more than like low single digit returns across any 0:02:14.720 --> 0:02:17.080 asset class in the second half of the year. And 0:02:17.120 --> 0:02:19.560 be careful in emerging markets because the f X side, 0:02:19.760 --> 0:02:22.079 actually it could be more volatile. Here. We've got to 0:02:22.080 --> 0:02:24.680 see what happens between the U S and China. So Joyce, 0:02:24.720 --> 0:02:28.360 you mentioned kind of a global coordinated devishness by some 0:02:28.440 --> 0:02:30.680 of these central banks around the world. Does that suggest 0:02:30.720 --> 0:02:32.799 that we maybe take on a little bit more risk 0:02:32.840 --> 0:02:36.639 we think about emerging market debt, maybe US high yield. Well, 0:02:36.680 --> 0:02:38.960 if you want to achieve a five percent yield at 0:02:38.960 --> 0:02:40.960 this point, you have to look at emerging markets fixed 0:02:41.000 --> 0:02:43.720 income or at high yield bonds. Um We still think 0:02:43.720 --> 0:02:46.160 that the dollar debt is a better place to be 0:02:46.440 --> 0:02:48.839 right now. I think there is still f X risk 0:02:49.400 --> 0:02:52.000 if you have more tensions developed between the U S 0:02:52.000 --> 0:02:54.320 and China, and you have c n y depreciation that 0:02:54.320 --> 0:02:57.440 could have an effect on other currencies. And the time, Joyce, 0:02:57.520 --> 0:02:59.400 that we've got left with you, I want to talk 0:02:59.440 --> 0:03:03.240 about your serious job. Have had a research for one 0:03:03.280 --> 0:03:06.600 of the world's great great banks. Right now, there are 0:03:06.680 --> 0:03:10.680 people all across the world getting ready for the December 0:03:10.720 --> 0:03:14.120 exams of the c A program, and a lot of 0:03:14.160 --> 0:03:16.840 those people level one, level two, level three, people that 0:03:16.880 --> 0:03:19.880 want to get into the act are going Is there 0:03:19.880 --> 0:03:23.640 going to be a research capability five or ten or 0:03:23.680 --> 0:03:29.320 fifteen years from now? Restate the vailue of research to 0:03:29.480 --> 0:03:33.639 a major bank moving forward? Well, the CFA exam is 0:03:33.639 --> 0:03:36.400 always a big deal in research departments, in particular the 0:03:36.400 --> 0:03:39.800 credit groups. The company analysts all as a group study 0:03:39.840 --> 0:03:41.480 for this, and we're very proud of the c F 0:03:41.560 --> 0:03:44.040 as we have at JP Morgan. But there's always going 0:03:44.040 --> 0:03:46.680 to be a need for thought leadership. Now you're gonna 0:03:46.720 --> 0:03:50.560 have to incorporate more AI, examine more alternative and high 0:03:50.640 --> 0:03:53.960 frequency data. But the thought leadership is all about the judgment. 0:03:54.360 --> 0:03:56.680 It's all about connecting the different parts of the story. 0:03:56.920 --> 0:03:59.680 And now it's about putting the geopolitical overlay on this. 0:04:00.040 --> 0:04:03.840 And it's yeah, and much higher frequency data points are 0:04:03.880 --> 0:04:06.400 needed and much greater amounts of flash crash. I didn't 0:04:06.400 --> 0:04:08.760 ask for me. I asked for afterthought. She's twelve years old, 0:04:08.800 --> 0:04:11.200 and what you're telling telling me is she needs a 0:04:11.240 --> 0:04:16.720 double major international relations and finance. Right. Well, the geopolitics 0:04:16.760 --> 0:04:18.279 of me, a lot of my background had been in 0:04:18.320 --> 0:04:21.359 policy and so for a long time the view on 0:04:21.440 --> 0:04:24.520 geo politics is, well, it doesn't determine the trend, it's 0:04:24.600 --> 0:04:27.520 just the volatility. Now we're getting some real questions about 0:04:27.600 --> 0:04:29.880 that and we're really seeing that play through in the 0:04:29.880 --> 0:04:32.679 way that we're looking at business confidence and that's playing 0:04:32.680 --> 0:04:35.520 out in global cat BACS, George Chang, thank you so much, 0:04:35.560 --> 0:04:38.080 Thank you so much, share of their global research. Really 0:04:38.120 --> 0:04:40.200 can't say enough about it. She took this is a 0:04:40.320 --> 0:04:42.960 huge I get goose bumps over it because the history 0:04:43.000 --> 0:04:47.520 of Manhattan in Columbia College, Columbia University. She took the 0:04:47.600 --> 0:04:50.159 John J. Award one year, which is like super duper 0:04:50.200 --> 0:05:08.920 teacher award from the Bloomberg Interactive Worker Studios in New York. 0:05:09.240 --> 0:05:12.760 This is our China discussion of the day. She's Catherine Man, 0:05:13.720 --> 0:05:17.560 who has left a trail of debris in international economics 0:05:17.960 --> 0:05:21.400 for twenty or thirty years. Is a sympathy project. City 0:05:21.400 --> 0:05:23.320 Group picked her up a couple of years ago from 0:05:23.320 --> 0:05:25.839 the O E. C D in Paris. How is it 0:05:25.920 --> 0:05:30.320 working out at City What a change from from brandeis 0:05:30.320 --> 0:05:33.800 and your your important academic work and then O E. 0:05:33.920 --> 0:05:37.000 C D with Anna L. Guria and all of a 0:05:37.000 --> 0:05:40.000 sudden you're working for the animals in New York. Well, 0:05:40.040 --> 0:05:42.599 I think the you know, the issue that is most 0:05:42.640 --> 0:05:45.680 important is uh the interaction of financial markets in the 0:05:45.720 --> 0:05:49.000 real economy, and I think we're seeing that playing out 0:05:49.120 --> 0:05:51.800 right now as financial markets are trying to bet on 0:05:52.279 --> 0:05:54.080 what is going to happen at the G twenty and 0:05:54.120 --> 0:05:56.640 it even could be relatively better for the real economy 0:05:56.720 --> 0:05:59.320 or relatively worse for the Let's back up. Then, I 0:05:59.360 --> 0:06:02.400 was at a meeting with you and Michael Rosenberg of 0:06:02.400 --> 0:06:06.720 Bloomberg a million years ago. You were like eighteen or twenty, 0:06:06.800 --> 0:06:09.320 just out of m I T where the two of 0:06:09.360 --> 0:06:15.480 you codified this idea of family dysfunction between China and 0:06:15.520 --> 0:06:18.719 the United States. Folks to be careful here. Doctor Man 0:06:18.800 --> 0:06:22.360 is acclaimed for her research on the back and forth, 0:06:22.640 --> 0:06:25.560 almost the game theory figuring, you know, Mary Tyler Moore, 0:06:25.720 --> 0:06:29.159 ordinary people bringing over to China in the US. How's 0:06:29.200 --> 0:06:32.679 that dysfunction going right now? Well, I think we're seeing 0:06:33.279 --> 0:06:38.320 a very difficult period of time where, uh, we're trying 0:06:38.360 --> 0:06:42.360 to decide whether we're going to more deeply engage with 0:06:42.440 --> 0:06:46.960 the marriage with China that's been developing with supply chain 0:06:47.040 --> 0:06:50.520 or whether we're going to divorce because um, you know 0:06:50.680 --> 0:06:53.800 you can't break up these supply chains, uh, and and 0:06:53.920 --> 0:06:56.640 expect to continue to trade with them in the same way. 0:06:56.920 --> 0:07:01.279 But we have a new president with a more mercantile tact, 0:07:02.000 --> 0:07:06.240 and yet to your research, we're addicted the price of 0:07:06.279 --> 0:07:08.960 those goods aren't we. Well, so I think there are 0:07:08.960 --> 0:07:11.920 a couple of things that we think about where I 0:07:11.920 --> 0:07:14.880 mean addicted to the price of the goods um, but 0:07:15.040 --> 0:07:19.480 they are. They are also addicted to our capital flows, 0:07:19.520 --> 0:07:22.440 so it goes both ways. They've invested in in US 0:07:22.640 --> 0:07:26.600 UH businesses and and US treasuries, and where we have 0:07:27.000 --> 0:07:29.880 deeply engaged with them, both to sell products in their 0:07:29.960 --> 0:07:34.640 location as well as to sell products in terms of exports. 0:07:34.680 --> 0:07:37.520 So we're very deeply engaged with China. Our businesses are 0:07:37.600 --> 0:07:40.880 very deeply engaged. I want to continue to be deeply engaged. 0:07:41.400 --> 0:07:44.160 And yet that's not the direction that the current policy 0:07:44.520 --> 0:07:49.800 is going. The current policy is designed to divorce, so um, 0:07:49.920 --> 0:07:52.720 you kind of can't have both of those uh in 0:07:52.920 --> 0:07:56.160 a marriage. So, doctor Man, given that we are mutually 0:07:56.160 --> 0:07:59.520 dependent with with China, clearly we know that the President 0:07:59.600 --> 0:08:01.920 later said is getting on Air Force one heading over 0:08:01.960 --> 0:08:05.760 to Osaka. What do you think is a reasonable outcome 0:08:05.920 --> 0:08:09.840 here from this weekend's talks. Well, our base case is 0:08:09.880 --> 0:08:14.880 that they shake hands and agree to UH go back 0:08:14.920 --> 0:08:20.080 to the negotiating table UH and avoid therefore putting the 0:08:21.320 --> 0:08:24.320 on the last tranche of the three billion dollars worth 0:08:24.360 --> 0:08:28.480 of trade from China, and so that's that's our base case, 0:08:28.720 --> 0:08:32.120 and we think that that's a very important outcome. It's 0:08:32.120 --> 0:08:35.240 it's kind of minimalist in that it doesn't take off 0:08:35.240 --> 0:08:38.720 any of the tariffs, but uh, it is a better 0:08:38.760 --> 0:08:41.360 outcome and that it doesn't add to the tariffs and 0:08:41.840 --> 0:08:45.960 more deeply, uh caused discress and distress and financial markets 0:08:46.000 --> 0:08:48.600 and in business investment in the real economy. So it's 0:08:48.720 --> 0:08:51.720 it's it's a better outcome than the alternative, which is 0:08:52.120 --> 0:08:55.640 which is no, which is storming away from the table. Um. 0:08:55.960 --> 0:08:58.680 So uh. But on the other hand, you know, that's 0:08:58.760 --> 0:09:02.280 that's pretty minimalist. Usn't reduced the uncertainty associated with maybe 0:09:02.280 --> 0:09:04.040 there will be tariffs in the future. We're not quite 0:09:04.040 --> 0:09:08.679 so sure. Um, And uh that type of uncertainty of 0:09:08.800 --> 0:09:11.880 roads business confidence and uh, if they're going to have 0:09:12.040 --> 0:09:15.240 a lower confidence in the rules of the game going forward, 0:09:15.320 --> 0:09:17.000 and that's the challenge. You know, give me some rules. 0:09:17.000 --> 0:09:19.480 I'll play by the game and then um, you know, 0:09:19.520 --> 0:09:23.079 you end up with lower investment, you get lower trade, uh, 0:09:23.080 --> 0:09:26.720 and you get employment consequences from that well going forward. 0:09:26.760 --> 0:09:29.480 For the next step would be sitting down again and 0:09:29.520 --> 0:09:32.840 trying to close this deal. Do you think that a 0:09:33.120 --> 0:09:37.920 meaningful deal is is an option here? Can we get 0:09:37.960 --> 0:09:40.000 a meaningful deal with trying to can trying to get 0:09:40.000 --> 0:09:43.720 a meaningful deal with the United States? So, uh, some 0:09:43.800 --> 0:09:47.800 of the issues that that started this round of of tariff, well, 0:09:47.840 --> 0:09:50.400 this whole round of trade negotiations and so forth, are 0:09:50.520 --> 0:09:54.200 very serious issues having to do with intellectual property, UM, force, 0:09:54.240 --> 0:09:58.200 technology transfer, joint ownership, and cybersecurity. Those are the elements 0:09:58.280 --> 0:10:00.360 that were put forward at the beginning of the of 0:10:00.440 --> 0:10:04.840 the whole relationship breakdown with China. Right now, um, the 0:10:05.000 --> 0:10:09.160 strategy is not focused so much on those issues. The 0:10:09.200 --> 0:10:11.880 tools that have been used to kind of pry uh 0:10:11.880 --> 0:10:14.680 those negotiations open have been tariffs that has led to 0:10:15.080 --> 0:10:18.520 much reduced trade with China. So I think there is 0:10:18.559 --> 0:10:22.000 this there is this sort of um disconnect between the 0:10:22.080 --> 0:10:26.360 objectives is to you know, enhance thetellectual property, allow for 0:10:26.679 --> 0:10:31.679 broader joint ownership, allow for protected technology transfer that would 0:10:31.679 --> 0:10:37.120 more deeply engage the US with China. The tariffs are 0:10:37.240 --> 0:10:40.360 to divorce our relationship with China, to break up those 0:10:40.360 --> 0:10:43.160 supply chains, make them go to some other country. So 0:10:43.320 --> 0:10:48.160 there's a real disconnect between these two different objectives. Uh, 0:10:48.160 --> 0:10:51.320 in the current policy set we are fifteen years on 0:10:51.720 --> 0:10:55.760 since your seminal work on codependency and in all of 0:10:55.800 --> 0:10:58.880 these dysfunctions. We had on Pierre Navarro the other day, 0:10:59.440 --> 0:11:04.240 who espoused his view of economics, which to me is 0:11:04.280 --> 0:11:09.560 exceptionally static, almost in a true classical economic standpoint you 0:11:09.640 --> 0:11:12.040 work out of Harvard and M I. T. And a 0:11:12.200 --> 0:11:18.000 hugely dynamic regime. Is the dynamics now radically different from 0:11:18.000 --> 0:11:20.960 what you looked at fifteen years ago. Have we moved 0:11:21.000 --> 0:11:26.800 on to even more interdependencies and correlations where anybody's policy 0:11:26.840 --> 0:11:30.920 is really going to have little effect. Well, actually, what's 0:11:31.080 --> 0:11:35.679 most disturbing to me is is that this, uh, this 0:11:35.679 --> 0:11:38.040 this trade situation that we have right now with with 0:11:38.120 --> 0:11:43.640 China is emblematic of ten years of stagnation in terms 0:11:43.640 --> 0:11:47.080 of global integration. Uh. We had you know, earlier in 0:11:47.120 --> 0:11:50.520 my career, we talked about deeping deep, more deeply integrated 0:11:50.720 --> 0:11:55.000 global supply chains, a greater variety of products crossing borders, 0:11:55.080 --> 0:11:59.160 lower prices available to both businesses and consumers. And you know, 0:11:59.240 --> 0:12:02.280 all that stop about ten years ago, and so and 0:12:02.320 --> 0:12:04.360 so where we are is kind of like trying to 0:12:04.440 --> 0:12:08.160 fight the last war because we're to go. I mean, 0:12:08.160 --> 0:12:10.439 the way we got to get was a tragedy of 0:12:10.520 --> 0:12:13.719 two world wars? Have we have we just lost our 0:12:13.720 --> 0:12:17.920 collective memory of the Atlantic Charter in the early GET initiatives. 0:12:18.280 --> 0:12:20.920 Well we can look at you know, there's slow down 0:12:21.040 --> 0:12:25.000 and you know, no multilateral trade agreement has has succeeded, 0:12:25.240 --> 0:12:29.000 and there aren't even any successful or very few successful 0:12:29.440 --> 0:12:32.000 pluralateral agreements. This is part of the sort of the 0:12:32.280 --> 0:12:34.720 need to revitalize the w t O. What should it 0:12:34.760 --> 0:12:37.280 be doing in today's world, which is which is very 0:12:37.280 --> 0:12:42.000 complex with lots of competing interests. But but the bottom 0:12:42.000 --> 0:12:45.240 line is we have ten years of very sluggish growth, 0:12:45.320 --> 0:12:50.920 little investment um, productivity growth being slow, rising inequality. And 0:12:50.960 --> 0:12:53.360 that also is a period of time when global trade 0:12:53.360 --> 0:12:56.640 has stagnated. So you know, most people think about there 0:12:56.800 --> 0:13:00.560 was too much globalization. I think we've had two So 0:13:00.679 --> 0:13:02.800 Dr Man, you've met mentioning before we went on the air. 0:13:02.800 --> 0:13:05.000 Have you've been traveling around the world meeting with the 0:13:05.600 --> 0:13:10.280 largest institutional investors. What's number one on their issues that 0:13:10.360 --> 0:13:15.280 they want to talk to you about. Uh, They're really 0:13:15.800 --> 0:13:18.960 concerned about where the FED is going to go. That's 0:13:19.040 --> 0:13:22.120 that's their their key issue. Um, some of them have 0:13:22.160 --> 0:13:25.079 a longer term agenda and so that you know that's uh, 0:13:25.120 --> 0:13:28.439 they're looking a bad productivity. Uh, they're looking at inequality, 0:13:28.880 --> 0:13:32.920 specifically intergenerational inequality and what the implication of that might 0:13:32.960 --> 0:13:37.960 be for wealth management issues and and that sort of thing. 0:13:38.280 --> 0:13:40.319 So some of them have a very long term perspective 0:13:40.320 --> 0:13:43.920 and are concerned about those issues. Other ones have more 0:13:44.000 --> 0:13:47.960 short term, immediate perspective. On the on the FED actions 0:13:48.160 --> 0:13:50.960 cancer man, thank you so much with sitting group. Always 0:13:51.080 --> 0:13:53.640 just really honored to have you here in a time 0:13:53.679 --> 0:14:12.280 of extraordinary international politics and international economics that darkening the door. 0:14:12.360 --> 0:14:18.040 Timothy O'Brien Bloomberg Opinion, truly expert on the finances and 0:14:18.120 --> 0:14:20.680 much of the past of the President of the United States. 0:14:20.680 --> 0:14:23.240 Tim O'Brien the debates tonight, New York Times had that 0:14:23.320 --> 0:14:26.960 great spread of the buttons. My first buttons were Nixon, Cabot, 0:14:27.040 --> 0:14:31.360 Lodge sixty and Kennedy for presidents sixty. What was the 0:14:31.400 --> 0:14:34.120 first button you had as a kid? Wow, the first 0:14:34.120 --> 0:14:37.360 button they had as a kid was Carter Reagan Carter right, God, 0:14:37.400 --> 0:14:39.840 he's young. Yeah, that's where I was. That's you too, 0:14:40.960 --> 0:14:43.080 I guess I came from a Nixon household. My father 0:14:43.160 --> 0:14:46.240 just went down the line of the Republicans. Does anybody 0:14:46.280 --> 0:14:49.080 do that anymore? Do people vote straight line anymore? That's 0:14:49.120 --> 0:14:51.440 a great question. I would I would think yes, I 0:14:51.480 --> 0:14:53.640 would think the majority of voters do. But that's just 0:14:53.800 --> 0:14:56.600 based on instinct. Yeah, Chim O'Brian with Jim, I want 0:14:56.600 --> 0:14:59.040 to go to the debatement going tangentially with a House 0:14:59.080 --> 0:15:05.320 Democratic vote. Uh, Promelia jail Uh of Seattle seventh District. 0:15:05.720 --> 0:15:09.400 They voted for President Obama. They boosted it up to 0:15:09.520 --> 0:15:13.360 eight percent for Hillary Clinton. Are the liberals driving the 0:15:13.400 --> 0:15:17.000 Democratic bus in the House? Well? I mean, I think 0:15:17.040 --> 0:15:19.680 the liberals and particularly women, are the people that put 0:15:19.760 --> 0:15:22.240 the House back into Democratic hands at the mid terms. 0:15:22.760 --> 0:15:25.280 But I think that was a very specific election. I 0:15:25.320 --> 0:15:28.760 think I think, Um, I think that what you're gonna 0:15:28.800 --> 0:15:30.920 have to see now is whether or not the issues 0:15:31.520 --> 0:15:35.440 in in at the mid terms translated into what we're 0:15:35.480 --> 0:15:37.520 gonna see in the general where we see moderation in 0:15:37.560 --> 0:15:39.640 this debate tonight, or is going to be a progressive 0:15:39.680 --> 0:15:42.440 free for all? Um. I think you'll see a lot 0:15:42.480 --> 0:15:44.920 of both. I mean, you know, Joe Biden is obviously 0:15:44.960 --> 0:15:49.640 the moderate, traditional candidate tomorrow tonight, you're gonna have um 0:15:49.680 --> 0:15:51.640 I think a lot of people who need to differentiate 0:15:51.680 --> 0:15:55.160 themselves from one another, and they're gonna differentiate themselves from 0:15:55.200 --> 0:15:59.040 issues that um uh are going to be flashpoints for 0:15:59.280 --> 0:16:02.640 the progressive of portion I think of the Democratic voters. So, 0:16:02.760 --> 0:16:05.160 just following up on Tom's comment, the question I have 0:16:05.240 --> 0:16:06.680 is we kind of get into these debates and we 0:16:06.880 --> 0:16:11.520 begin this long slog of Democratic debates Kenneth Centrist, what 0:16:11.640 --> 0:16:13.520 do you think the Democrats will put a central stop 0:16:13.560 --> 0:16:16.200 at the end of the day. I think there's a 0:16:16.200 --> 0:16:18.640 big push for that to happen. I think people I 0:16:18.680 --> 0:16:21.480 think that they're there are pragmatists within the party who 0:16:21.520 --> 0:16:24.440 are saying that the party needs a ticket that can 0:16:24.480 --> 0:16:27.440 beat Trump, and that the candidates that Trump is most 0:16:27.480 --> 0:16:31.200 worried about our our white males currently. I think there's 0:16:31.280 --> 0:16:34.120 also a good argument to be made that the Democrats 0:16:34.400 --> 0:16:37.200 should show that a diverse ticket also can win in 0:16:37.200 --> 0:16:39.200 the United States. And so I think that those are 0:16:39.200 --> 0:16:42.240 the conflicting things here. But I don't think it's inevitable, 0:16:42.720 --> 0:16:46.280 um that either a a more left leading candidate or 0:16:46.280 --> 0:16:48.600 a moderate candidate is going to come on top come 0:16:48.640 --> 0:16:51.680 out on top. Here, you've seen Elizabeth Warren, who's done 0:16:51.760 --> 0:16:55.160 great homework and really nailed down positions in a variety 0:16:55.200 --> 0:16:59.000 of issues, surge because of that. You see Biden surging 0:16:59.000 --> 0:17:01.320 because I think he's reass during, you know, to post 0:17:01.360 --> 0:17:04.560 industrial blue collar workers as someone they can relate to. 0:17:04.600 --> 0:17:06.399 And I think both of those tensions are are in 0:17:06.440 --> 0:17:09.720 competition with one another. You know, the other big issue, 0:17:09.720 --> 0:17:14.600 which arguably President Trump raised back in twenty six is immigration. 0:17:15.160 --> 0:17:17.359 And I'll tell you the images we're starting to see. 0:17:17.840 --> 0:17:22.040 I'm just wondering how how front and center immigration will 0:17:22.040 --> 0:17:24.280 be not only in these debates over the next couple 0:17:24.320 --> 0:17:26.960 of nights, but just in the election. Well. I think, 0:17:27.480 --> 0:17:31.280 like everything around public policy, this depends on on how 0:17:31.720 --> 0:17:35.879 uh principled and well spoken Democrats and Republicans want to 0:17:35.880 --> 0:17:39.600 be about something that's no longer about just immigration policy. 0:17:39.640 --> 0:17:42.600 This is a humanitarian crisis. You have people dying at 0:17:42.600 --> 0:17:46.600 the border, you have detention centers that are brimming with children, 0:17:46.680 --> 0:17:51.399 taking care of children in squalid, inhumane conditions, and it 0:17:51.560 --> 0:17:55.080 it screamed out for a policy solution that, in an 0:17:55.119 --> 0:17:58.159 ideal world, would transcend politics. I want to go to 0:17:58.200 --> 0:18:00.680 your real host. It's gonna be hard to leave this, Paul. 0:18:00.760 --> 0:18:02.960 But I was had a beverage in my hand the 0:18:03.000 --> 0:18:07.480 other day and I was quoting Tim O'Brien, shocked at 0:18:07.520 --> 0:18:11.480 that would happen. You are expert on how the president 0:18:11.760 --> 0:18:17.080 rationalizes until he doesn't. How do you interpret the change, 0:18:17.119 --> 0:18:20.800 the shift in Iran, the change, the shift in Mexico, 0:18:21.240 --> 0:18:23.840 and on and on and on. You've witnessed that, am 0:18:23.840 --> 0:18:26.560 I right? You've witnessed that behavior for decades. I mean, 0:18:26.560 --> 0:18:29.399 this has been pretty typical of Donald Trump. He I 0:18:29.440 --> 0:18:31.760 think the important thing to think about the president is 0:18:31.760 --> 0:18:35.639 that he does not think strategically. He thinks cinematically, and 0:18:35.680 --> 0:18:39.000 he's usually thinking about narratives, and he's usually thinking about 0:18:39.080 --> 0:18:41.760 his own role on the stage. So his first instinct 0:18:42.240 --> 0:18:45.400 is always going to be how does this make me appear? 0:18:45.680 --> 0:18:48.280 And what he wants to always appear as is a 0:18:48.280 --> 0:18:52.520 man of action who finds decisive solutions in a fast 0:18:52.880 --> 0:18:56.399 and sometimes blunt, forced way, even if that doesn't achieve 0:18:56.440 --> 0:18:58.959 his goals. So you saw and and and it creates 0:18:58.960 --> 0:19:03.040 the self contradiction he wants to be, you know, carry 0:19:03.040 --> 0:19:05.840 a big stick and be very mucho on policy in 0:19:05.880 --> 0:19:07.960 the Middle East, if anyone gets in our way, we 0:19:08.040 --> 0:19:11.080 will obliterate them. But the reality is he doesn't want 0:19:11.480 --> 0:19:14.240 to engage in a in a deep seated military way. 0:19:14.440 --> 0:19:18.680 Would you suggest he's an archise elationist. Uh, he he can't. 0:19:18.880 --> 0:19:21.080 He can't be an archive as somebody who's on Twitter 0:19:22.000 --> 0:19:25.480 is not an isolationist. What he is is I think 0:19:25.520 --> 0:19:29.760 he's an unsophisticated person who hasn't thought through the implications 0:19:29.760 --> 0:19:32.640 of his own beliefs. And what's more important to him 0:19:32.760 --> 0:19:36.600 is atmospherics and and I think it's and self promotion 0:19:36.720 --> 0:19:39.320 than policy goals. Jim O'Brien, thank you so much writing 0:19:39.359 --> 0:19:42.800 for Bloomberg Opinion. Very you know, whatever your politics, very 0:19:42.920 --> 0:19:46.840 very important. On the finances of the private citizen Trump 0:19:58.280 --> 0:20:01.520 right now, we monitor Stephen Stanley. He has been fabulous 0:20:02.000 --> 0:20:05.320 engaging the gross domestic product of this to me, Uh, 0:20:05.880 --> 0:20:09.359 of of this nation? Stephen Stanley Amerson pierpoint, how gross 0:20:09.400 --> 0:20:12.920 is our gross domestic product right now? Are we above two? 0:20:13.520 --> 0:20:16.320 Good morning, Tom, Yes, I think we are. I mean, 0:20:16.440 --> 0:20:18.800 you know, obviously the first quarter number was very good, 0:20:18.840 --> 0:20:21.720 although it was the mix wasn't great. I think what 0:20:21.840 --> 0:20:23.960 you've seen in the first half of the year is 0:20:24.000 --> 0:20:25.840 what we've seen in five of the last six years, 0:20:25.840 --> 0:20:29.280 which is you get a week underlying first quarter consumption 0:20:29.320 --> 0:20:32.520 as always, for whatever reason, soft in Q one, and 0:20:32.520 --> 0:20:34.440 then it roars back in Q two, and it seems 0:20:34.480 --> 0:20:37.919 like we're seeing that pattern all over again. So Stephen, 0:20:38.040 --> 0:20:41.520 Tom and I are hearing more and more economist strategist 0:20:41.600 --> 0:20:46.240 fund managers talking about the recession. Perhaps mid that something 0:20:46.280 --> 0:20:50.119 you subscribe to. No, I think the economy has very 0:20:50.119 --> 0:20:54.760 good underlying momentum um. Obviously, the trade situation has been 0:20:54.800 --> 0:20:56.640 a bit of a drag in the short run, and 0:20:56.640 --> 0:21:00.560 and certainly you could envision a scenario where, um, you know, 0:21:00.600 --> 0:21:02.679 the trade talks totally break off, we get into a 0:21:02.680 --> 0:21:05.520 massive tariff war, and and then that that kind of 0:21:05.600 --> 0:21:08.600 changes things. But anything short of that, I think the 0:21:08.640 --> 0:21:11.720 economy has a good staying power. Steven Sally and the 0:21:11.760 --> 0:21:15.840 President putting out extraordinary headlines in free flow. Here we 0:21:16.000 --> 0:21:19.880 miss barter Romo over at Fox Biz mentioning Japan, mentioning 0:21:19.920 --> 0:21:23.200 World War three. Forget about that. Here's the headline Steve 0:21:23.280 --> 0:21:26.760 Stanley that matters. Trump says the U. S should have 0:21:26.840 --> 0:21:32.280 draggy instead of quote our fed person unquote. What would 0:21:32.280 --> 0:21:34.920 it be like, if Mario Draggy was running the FED, 0:21:35.040 --> 0:21:40.240 based on his history, his challenges, different challenges in Europe, 0:21:40.359 --> 0:21:44.160 what would what would Sherman Droggy look like. I mean, 0:21:44.320 --> 0:21:47.080 obviously Draggy is someone that's been very doublish over the 0:21:47.119 --> 0:21:51.119 course of his tenure. Um, you know, arguably the justified 0:21:51.160 --> 0:21:54.440 given the difficulties in Europe. It is kind of ironic 0:21:54.520 --> 0:21:58.159 because certainly Trump does want seem to want someone that's 0:21:58.240 --> 0:22:00.960 extremely doublish at the FED, and the act is he 0:22:01.080 --> 0:22:03.520 had probably the most dubbish FED chairman in the history 0:22:03.520 --> 0:22:06.439 of the institution and he, uh, he let her go, 0:22:06.880 --> 0:22:09.840 So you know, I guess, uh, maybe you get what 0:22:09.880 --> 0:22:12.720 you deserve. I suspect it sounds like a Carol Kings 0:22:14.640 --> 0:22:18.000 from Ali here in New York years ago, the President 0:22:18.040 --> 0:22:21.720 goes down Mr Stanley to say he has high rates 0:22:21.960 --> 0:22:28.040 while President Obama had cheap money. I'm lost translate. I 0:22:28.080 --> 0:22:31.359 think he's jealous that we had zero rates throughout his 0:22:31.480 --> 0:22:34.320 predecessor's tenure. I don't know that that's a good thing, 0:22:34.400 --> 0:22:37.119 because that's indicative of a weak economy. I think he 0:22:37.119 --> 0:22:40.560 should just focus on GDP and and trying to make 0:22:40.600 --> 0:22:43.680 political hay out of the fact that the economy has 0:22:43.800 --> 0:22:47.800 grown faster over the last few years. So, Stephen, you 0:22:47.800 --> 0:22:50.800 know we've heard and read, I think over the last 0:22:50.800 --> 0:22:54.000 several months, and you know, a growing argument that maybe 0:22:54.040 --> 0:22:58.080 global growth rates are going to be lower going forward 0:22:58.160 --> 0:23:00.400 than maybe we've seen over the last couple of decades. 0:23:00.680 --> 0:23:04.840 Is that something you think is a reasonable view? Well, yeah, 0:23:05.160 --> 0:23:07.280 I think there's not much question about that if you 0:23:07.320 --> 0:23:09.639 compare it back to say the nineties or even the 0:23:09.680 --> 0:23:12.480 two thousand's UM and there are a couple of things 0:23:12.520 --> 0:23:16.480 going on. One is simply demographics, is the population ages, 0:23:17.040 --> 0:23:20.639 the growth in labor supply slows down. And the second 0:23:20.680 --> 0:23:24.760 thing is we've had very low productivity growth for most 0:23:24.800 --> 0:23:27.720 of this decade, something that Tom and I've talked about 0:23:27.720 --> 0:23:30.880 a lot over the last several years. And the good 0:23:30.880 --> 0:23:34.399 news there is there does seem to be some upward slope. Um. 0:23:34.440 --> 0:23:37.360 You know, we had fat somewhat faster productivity growth last year. 0:23:37.440 --> 0:23:40.600