WEBVTT - Surveillance: Market Timing with Bitterly (Podcast)

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<v Speaker 1>Welcome to the Bloombergs Surveillance Podcast. I'm Tom Keane. Along

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<v Speaker 1>with Jonathan Ferroll and Lisa Brownwitz Jaily. We bring you

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<v Speaker 1>insight from the best and economics, finance, investment and international

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<v Speaker 1>relations Fine Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg dot Com,

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<v Speaker 1>and of course on the Bloomberg terminal. Kristin Bidley is happy,

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<v Speaker 1>I'm back. The head of North American investments for City

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<v Speaker 1>Global Maths Management joins us. Now, Christan just reading for

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<v Speaker 1>your notes is the quote that just jumped off the

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<v Speaker 1>page for me. Unfortunately, we do not believe that inflation

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<v Speaker 1>will fall fast enough for the fair to recognize the

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<v Speaker 1>cumulative impact of its actions in time to moderate its policies.

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<v Speaker 1>What's the bottom line then, for the secondary market ranny

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<v Speaker 1>we're looking at on the screens over the last week.

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<v Speaker 1>The bottom market for the bottom line for this rally

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<v Speaker 1>that we're seeing is Unfortunately, I think we're going to

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<v Speaker 1>see continued volatility and this type of price action is

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<v Speaker 1>quite normal in bear markets. This is why we're big

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<v Speaker 1>advocates against market timing, because when you see some of

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<v Speaker 1>the worst performance in market, some of the biggest draw downs,

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<v Speaker 1>they tend to be followed by then the best days.

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<v Speaker 1>And so if we look at over the past fifty years,

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<v Speaker 1>we did an analysis. If you're just out of the

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<v Speaker 1>market for the two best days of each calendar year,

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<v Speaker 1>you a race. You erase your per annum returns by

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<v Speaker 1>over nine point six percent. It's a basically an eight

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<v Speaker 1>percent reduction in returns. And so in these types of

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<v Speaker 1>markets you need to expect that type of volatility. And

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<v Speaker 1>this right now, I think last week, I think we

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<v Speaker 1>saw some short covering, we saw some defensive buying, But

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<v Speaker 1>I don't think we're turning a corner until the market

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<v Speaker 1>knows that we have definitively avoided a recession. We're not

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<v Speaker 1>there yet. We will stop the show here, folks, because

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<v Speaker 1>what you just heard from miss Bitterly is a single

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<v Speaker 1>most important thing of the first half of two thousand

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<v Speaker 1>twenty two. Let's revisited Kristen, and this goes back to

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<v Speaker 1>Capital Guardian Trust American Funds in Los Angeles and their

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<v Speaker 1>landmark research fifty years ago. How many days if I'm

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<v Speaker 1>in ash do I need to miss before I destroy

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<v Speaker 1>my return because I didn't get the few ginormous days.

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<v Speaker 1>Say it again, So two days, just two days out

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<v Speaker 1>of the market, and basically you've erased the majority of

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<v Speaker 1>your per annum returns and that's over. Again, we've looked

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<v Speaker 1>at a fifty year period. Now, sometimes people ask the question, well,

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<v Speaker 1>what's the probability that I could actually pick those two

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<v Speaker 1>best days and just be in for those two best days,

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<v Speaker 1>And unfortunately you're better at playing the lottery, So that

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<v Speaker 1>is no longer an investment strategy. That is pure speculation.

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<v Speaker 1>So Christian, that's the argument against cash. The other argument

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<v Speaker 1>on the other side is there are certain parts of

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<v Speaker 1>history that are aberrations, including the Great Depression where nothing

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<v Speaker 1>works and where everything loses, including sixty How do you

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<v Speaker 1>discern that type of period amide all of the gloom

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<v Speaker 1>that we're hearing at a strategists, Yeah, so I think

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<v Speaker 1>we have to look at actually some of the historic

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<v Speaker 1>anomalies that we've seen year to day. So one of

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<v Speaker 1>the historic anomalies that we've seen is the fact that

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<v Speaker 1>this is the first time in history that we've seen

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<v Speaker 1>both equities and bonds declined by more than ten percent

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<v Speaker 1>over a six month period. So to go throughout history

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<v Speaker 1>and try to find other other examples of when have

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<v Speaker 1>we seen this decline in tandem. We used the threshold

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<v Speaker 1>of four and a half percent, and we've seen that.

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<v Speaker 1>There's been five other situations in history where you've seen

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<v Speaker 1>that in tandem decline of equities and bonds by more

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<v Speaker 1>than four and a half percent in the six months following.

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<v Speaker 1>In five out of five of those scenarios, fixed income

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<v Speaker 1>was higher, with an average total return of around ten

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<v Speaker 1>point nine percent. Equities were higher only in three out

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<v Speaker 1>of those five times, with an average return of five

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<v Speaker 1>and a half percent. So right now, I think, well,

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<v Speaker 1>many people are questioning whether the sixty forty portfolio is dead.

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<v Speaker 1>Over a five year rolling period, with the exception of

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<v Speaker 1>the Great Depression, we haven't seen a negative return of

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<v Speaker 1>sixty forty portfolio. So, Kristen, just to pick up on

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<v Speaker 1>what you said, not just for sixty forty, but more specifically,

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<v Speaker 1>why you have a little bit more confidence is it

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<v Speaker 1>in the bond market relative to equities or equities to

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<v Speaker 1>to bonds. I think you need a balance now, John,

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<v Speaker 1>But I think bonds have been so out of favor,

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<v Speaker 1>which is why we're talking about bonds more so. Just

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<v Speaker 1>three years ago, we had you know, over of the

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<v Speaker 1>world's government that was negative yielding that's now around ten percent.

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<v Speaker 1>So the sizemanship that we've seen in rates and the

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<v Speaker 1>comfort and adding quality fixed income to our portfolios. So

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<v Speaker 1>we're looking at the muni market. We're depending upon what

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<v Speaker 1>state you're living in, you're getting taxable equivalent yields in

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<v Speaker 1>the ballpark of seven to eight percent investment grade fixed

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<v Speaker 1>income where you're actually seeing priced into some of those

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<v Speaker 1>spreads around the forty percent chance of a recession, so

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<v Speaker 1>it's not ignoring that probability. So that's where we've been

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<v Speaker 1>adding exposure over the past couple of weeks. Christ, and

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<v Speaker 1>this was awesome. Thank you. Christin Billy the a City

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<v Speaker 1>clubal Weath Management, Lisa R and By with Us with

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<v Speaker 1>Schroeder's head of US multisector fixed income, Lisa, do you

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<v Speaker 1>hide in full faith and credit? I think you definitely

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<v Speaker 1>want to have some of your your risk allocated to

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<v Speaker 1>pure U S treasuries right now. Um. You know, well,

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<v Speaker 1>we may have a little bit of a tactical bounce,

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<v Speaker 1>just given how much things have underperformed in credit recently.

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<v Speaker 1>I think the path at least resistance from here is

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<v Speaker 1>still tighter financial conditions, So I think you want to

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<v Speaker 1>have a decent amount of liquidity in your portfolio at

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<v Speaker 1>least with that in mine. What's the risk that we

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<v Speaker 1>still haven't fully realized? Is it the earning story? What

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<v Speaker 1>is it? I think the market is. I mean, you

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<v Speaker 1>guys were kind of talking about the correlations between bonds

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<v Speaker 1>and equities, and I think it's really relevant here. The

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<v Speaker 1>market is still gyrating between is it a recession story

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<v Speaker 1>or is it an inflation problem? Which one do we have?

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<v Speaker 1>Um And as you see, I do think that that

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<v Speaker 1>the narrative will turn towards it's a growth problem. We're

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<v Speaker 1>going to be heading into a US recession. We're not

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<v Speaker 1>quite there yet, which means, um, you know, bonds and

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<v Speaker 1>equities that those correlations can be a bit unstable, and

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<v Speaker 1>I think you need a greater risk premium um afforded

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<v Speaker 1>to riskier assets, and credit would be would be a

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<v Speaker 1>part of that. So you know, for us, it's it's

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<v Speaker 1>it's lower it's lower duration credit when we take it.

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<v Speaker 1>You know, I think the three to five year part

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<v Speaker 1>of the market credit market, investment grade looks it looks attractive,

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<v Speaker 1>reasonably attractive with the break evens there um, But it's

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<v Speaker 1>it's higher quality generally it's like liquidity um and it's

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<v Speaker 1>not taking a whole lot of risk right now because

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<v Speaker 1>I don't think we're in a spread compression environment for

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<v Speaker 1>the foreseeable future. How much volatility do you think we

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<v Speaker 1>have to tolerate through the rest of this summer? At least,

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<v Speaker 1>it's been amazing to me to see how much a

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<v Speaker 1>narrative changes on a single data point within a data point.

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<v Speaker 1>When did we ever used to talk about, you Mitch

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<v Speaker 1>reading of long term US consumer inflation expectations? When did

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<v Speaker 1>that move to bond market by five ten basis points

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<v Speaker 1>in either directions set the time for a FED that

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<v Speaker 1>might go fifty or seventy five at any given meeting.

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<v Speaker 1>When did it come to this? And that's and that's

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<v Speaker 1>the problem. Right until you can figure out or until

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<v Speaker 1>the market can call us around where the risk free

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<v Speaker 1>rate block, how could we possibly decide on a path

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<v Speaker 1>for riskier assets? You know, you you almost need to

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<v Speaker 1>get some stability in that in that rate forecast before

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<v Speaker 1>you can see any stability elsewhere. And I think, I

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<v Speaker 1>don't know how you want me to measure that volatility question, John,

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<v Speaker 1>but I think it's more. I think the answer is

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<v Speaker 1>more volatility continued volatility until we get some certainty that

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<v Speaker 1>these inflation readings are going to start to trend downward. So, Lisa,

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<v Speaker 1>if someone were listening to this entire program, they would

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<v Speaker 1>have heard Christen bitterly make the argument that you don't

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<v Speaker 1>want to be in cash and that you need to

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<v Speaker 1>be fully invested because if you missed just a couple

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<v Speaker 1>of days, you miss an entire eight percent ten percent return,

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<v Speaker 1>and it really is the winning moment. What is your

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<v Speaker 1>argument against that in your quest for liquidity? I think

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<v Speaker 1>you it depends on who you're managing money for, what

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<v Speaker 1>use at class you're managing what your targets are. Right

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<v Speaker 1>at the end of the day, we manage fixed income portfolios,

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<v Speaker 1>and these are meant to be in many ways the

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<v Speaker 1>ballast the sleep at night portfolios for people. UM. You know,

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<v Speaker 1>so we perhaps have a different it risk budget and

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<v Speaker 1>and and sort of target then than than Christian does. UM.

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<v Speaker 1>But yeah, you know, you can't have all liquidity, which

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<v Speaker 1>is why I suggest, um a decent portion of your

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<v Speaker 1>exposure be allocated to some of these really high quality

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<v Speaker 1>investment grade companies at the short end of the curve

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<v Speaker 1>where you can earn a four four and a half

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<v Speaker 1>percent yield. You know, over the next couple of years,

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<v Speaker 1>I think that's going to be a positive real return trade. Um,

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<v Speaker 1>it's gonna take some it's gonna take some time to

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<v Speaker 1>get there, but I think we will. We will be

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<v Speaker 1>paid and rewarded for something like that, and it gives

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<v Speaker 1>us the opportunity to sort of hide out and wait

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<v Speaker 1>and you know, wait for better opportunities to emerge. So, Lisa,

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<v Speaker 1>when you say liquidity, how much is just pure cash?

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<v Speaker 1>Pure cash is hard if you're managing relative return portfolios.

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<v Speaker 1>But I would say, you know, you want a decent portion,

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<v Speaker 1>double digit portion of treasury exposure across the curve. So

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<v Speaker 1>we manage relative return, so we're benchmark to the Barclay

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<v Speaker 1>sac in most in most portfolios, in many portfolios. Um,

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<v Speaker 1>And so that means we, you know, we want a

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<v Speaker 1>high quality liquidity overweight, whether it be treasuries, agency, mortgages,

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<v Speaker 1>some combination thereof cash cash itself. For us, it's hard

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<v Speaker 1>if you want if you have an absolute return portfolio

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<v Speaker 1>that certainly cash is is a is a better option. Lisa,

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<v Speaker 1>Thank you, as always, Lisa Holby, there A Shrowders. We

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<v Speaker 1>start the program this morning with Lori Canvassin, in the

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<v Speaker 1>head of US ancuity strategy at RBC Capital Markets and

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<v Speaker 1>lower let's start with that bond market. What is the

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<v Speaker 1>dominant factor behind lower yield in the last week or so,

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<v Speaker 1>and what do you think the implications are for the

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<v Speaker 1>durability of this equity market rally. So, look, it's a

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<v Speaker 1>great question. I'll tell you our rate strategy team has

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<v Speaker 1>been looking for that peak in the tenure yield and

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<v Speaker 1>they thought that as growth concerns and recession concerns built,

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<v Speaker 1>that it would weigh on that bond yield. And we've

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<v Speaker 1>actually looked at that as something that could help stabilize

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<v Speaker 1>the tech part of the market, which strangely ends up

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<v Speaker 1>being a stabilizing force for the equity market simply because

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<v Speaker 1>of the math of the market cap in terms of

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<v Speaker 1>its contribution to things like market cap and net income.

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<v Speaker 1>So I think, you know, it feels a little bit

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<v Speaker 1>contradictory in nature, but I do think that is one

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<v Speaker 1>of the things that has really been giving some stability

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<v Speaker 1>to market. And I'll tell you, John, as I've talked

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<v Speaker 1>to investors the last couple of weeks, there's a real

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<v Speaker 1>focus on the idea that if we get a recession,

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<v Speaker 1>it will largely play out in the next couple quarters,

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<v Speaker 1>and we won't have any lasting wounds and scars, and

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<v Speaker 1>we can sort of get into three, still have a

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<v Speaker 1>decent year, still have decent earnings. And so I think

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<v Speaker 1>that kind of rip off the band aid now get

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<v Speaker 1>through this economic pain. The Fed's helping that process along,

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<v Speaker 1>that sort of longer term optimism. One is something else

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<v Speaker 1>that I've actually just seen in my conversations as lending

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<v Speaker 1>some optimism to investors. Laura, you're on the road a lot.

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<v Speaker 1>I want you to get out beyond two thousand twenty

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<v Speaker 1>three and get away from the strategist game of what's

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<v Speaker 1>going to happen by next Tuesday, and I want you

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<v Speaker 1>to look long term. You're more qualified to do this

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<v Speaker 1>in anybody out of collegiate America. You lived in the

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<v Speaker 1>most prestigious dorm rooms in America U v A. I

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<v Speaker 1>want you to go back to Jefferson and say, how

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<v Speaker 1>do you do this now for the long haul? How

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<v Speaker 1>do you stay in the market and not not afraid

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<v Speaker 1>in cash right now? So, look, Tom, I think that

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<v Speaker 1>when we go back and we look at the history

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<v Speaker 1>of recessions, what we have to remember is that they

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<v Speaker 1>do typically but get buying opportunities for longer term investors,

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<v Speaker 1>and you know, we get a lot of caught We

0:11:22.559 --> 0:11:24.520
<v Speaker 1>get very caught up in my job, you know, without

0:11:24.559 --> 0:11:27.120
<v Speaker 1>some of my competitors and investors frankly on kind of

0:11:27.120 --> 0:11:29.000
<v Speaker 1>what's the absolute downside, what is the end of the

0:11:29.040 --> 0:11:31.240
<v Speaker 1>year number look like? But if you actually go back

0:11:31.240 --> 0:11:33.880
<v Speaker 1>and look over the course of recession stock at stocks

0:11:33.920 --> 0:11:35.679
<v Speaker 1>actually go up a little bit. If you take the

0:11:35.760 --> 0:11:37.800
<v Speaker 1>n B e R dates, you tend to see these

0:11:37.880 --> 0:11:41.160
<v Speaker 1>very big pivots areas like small caps. These are historic

0:11:41.280 --> 0:11:44.559
<v Speaker 1>buying opportunities for that smaller, riskier part of the market.

0:11:44.600 --> 0:11:46.800
<v Speaker 1>So I think you need to keep those bigger, longer

0:11:46.920 --> 0:11:49.280
<v Speaker 1>term pictures in mind. First off, the second thing I

0:11:49.280 --> 0:11:51.920
<v Speaker 1>would tell you is, I think the conversation about recession,

0:11:52.000 --> 0:11:55.000
<v Speaker 1>yes or no, when does it happen? That's an important one.

0:11:55.000 --> 0:11:57.360
<v Speaker 1>But we also as investors, if we're really longer term,

0:11:57.679 --> 0:12:00.720
<v Speaker 1>need to be thinking about what things look like on

0:12:00.760 --> 0:12:03.600
<v Speaker 1>the other side, what's the longer term growth expectation. I'm

0:12:03.600 --> 0:12:05.200
<v Speaker 1>talking to a fair number of people who think we

0:12:05.480 --> 0:12:08.240
<v Speaker 1>exited this hot economy, this above trend economy that was

0:12:08.280 --> 0:12:12.160
<v Speaker 1>boosted by stimulus, if that stimulus is lacking in this economy,

0:12:12.240 --> 0:12:16.320
<v Speaker 1>in this economic recovery going forward, anticipate a slower growth

0:12:16.360 --> 0:12:20.360
<v Speaker 1>backdrop which does typically benefit the secular growth sectors like technology.

0:12:20.520 --> 0:12:22.120
<v Speaker 1>Those will be the two things I would focus you

0:12:22.160 --> 0:12:24.480
<v Speaker 1>on right now. So, LORI, that brings us to John's

0:12:24.520 --> 0:12:28.040
<v Speaker 1>point where he started off, asking are these scenarios consistent

0:12:28.080 --> 0:12:31.080
<v Speaker 1>with each each other. This idea of a stagflationary spiral

0:12:31.320 --> 0:12:34.400
<v Speaker 1>where you get slowing growth in a recession and and

0:12:34.480 --> 0:12:37.080
<v Speaker 1>you also get inflation that doesn't cool materially and a

0:12:37.080 --> 0:12:39.640
<v Speaker 1>recession that brings us back to where we before, where

0:12:39.640 --> 0:12:42.240
<v Speaker 1>we were before, and then some so purse out what

0:12:42.360 --> 0:12:44.839
<v Speaker 1>the difference is and whether there's still is a chance

0:12:44.840 --> 0:12:48.679
<v Speaker 1>of that sagflationary environment. So look, I think that there

0:12:48.679 --> 0:12:50.960
<v Speaker 1>are two parts of the same timeline. I think this

0:12:51.040 --> 0:12:53.880
<v Speaker 1>idea of recessionary fear sort of playing in the here

0:12:53.920 --> 0:12:56.320
<v Speaker 1>and now. Frankly, so, I think that's something investors have

0:12:56.360 --> 0:12:58.679
<v Speaker 1>already been positioned for. If you look at defensive sector

0:12:58.760 --> 0:13:01.559
<v Speaker 1>valuations that are at p versus cyclical and secular growth,

0:13:01.559 --> 0:13:04.800
<v Speaker 1>small cap positioning, and the futures market is down below

0:13:04.840 --> 0:13:07.960
<v Speaker 1>financial crisis lows, so you know it does feel like

0:13:08.000 --> 0:13:09.600
<v Speaker 1>that is still playing out in the here and now,

0:13:09.600 --> 0:13:13.480
<v Speaker 1>but the positioning the market already reflects that that longer term,

0:13:13.520 --> 0:13:17.240
<v Speaker 1>sort of stagflationary type of environment is something investors can

0:13:17.280 --> 0:13:19.960
<v Speaker 1>still wrap their heads around. So perhaps you don't need

0:13:20.000 --> 0:13:21.840
<v Speaker 1>to be as barished on things like energy as you

0:13:21.840 --> 0:13:24.280
<v Speaker 1>did in the past, even if there are some pressures

0:13:24.520 --> 0:13:26.560
<v Speaker 1>in the short term. So we're market weight on energy

0:13:26.720 --> 0:13:29.760
<v Speaker 1>for for just that reason. Um, but you also do

0:13:29.840 --> 0:13:32.199
<v Speaker 1>want to think about sort of that longer term backdrop

0:13:32.240 --> 0:13:33.960
<v Speaker 1>and kind of how you want to be positioned for

0:13:34.000 --> 0:13:36.160
<v Speaker 1>that slower growth environment, which frankly, I don't think it's

0:13:36.160 --> 0:13:38.960
<v Speaker 1>gonna exit anytime soon. So I don't think investors are

0:13:38.960 --> 0:13:41.200
<v Speaker 1>being inconsistent. I think they're trying to put on different

0:13:41.200 --> 0:13:43.800
<v Speaker 1>trades for different durations at the same time. Glory also

0:13:43.880 --> 0:13:45.719
<v Speaker 1>to catch up as always, and great to stop the

0:13:45.760 --> 0:13:48.800
<v Speaker 1>week with you, Louri Cavassin to that of obbising capital markets.

0:13:53.320 --> 0:13:55.560
<v Speaker 1>Here's what we're gonna do over a weekend of emotion

0:13:55.640 --> 0:13:59.760
<v Speaker 1>for American for international audience. It's difficult to calibrate the

0:14:00.000 --> 0:14:03.679
<v Speaker 1>hortons of the decisions plural of the Supreme Court. We're

0:14:03.679 --> 0:14:06.880
<v Speaker 1>gonna go to the expert. Mohammed units is editor in

0:14:06.960 --> 0:14:09.679
<v Speaker 1>chief at Gallup. They've been doing it longer, They've been

0:14:09.679 --> 0:14:12.680
<v Speaker 1>doing it more measured, They've been doing it deeper and

0:14:12.760 --> 0:14:17.160
<v Speaker 1>measuring the pulse in cadence of America. Mohammed, I thought

0:14:17.240 --> 0:14:21.000
<v Speaker 1>Kate Zerinki in the New York Times was spectacular this weekend.

0:14:21.440 --> 0:14:24.800
<v Speaker 1>I'm looking at the state legislatures, the Revolution of two

0:14:24.800 --> 0:14:28.600
<v Speaker 1>thousand and ten, which was very much like Gingrich in

0:14:30.560 --> 0:14:32.840
<v Speaker 1>the fabric of America. And I want to go to

0:14:32.920 --> 0:14:37.880
<v Speaker 1>a phrase that you know, which is try trifecta America,

0:14:38.400 --> 0:14:41.760
<v Speaker 1>which was when a state is entirely democrat or a

0:14:41.880 --> 0:14:46.160
<v Speaker 1>state is entirely Republican. Does Gallup presume that we will

0:14:46.200 --> 0:14:50.120
<v Speaker 1>stay as polarized as we are now and frankly become

0:14:50.240 --> 0:14:55.160
<v Speaker 1>ever more a trifecta America? There is That's a great question.

0:14:55.200 --> 0:14:58.120
<v Speaker 1>First of all, Tomas always um there's no doubt that

0:14:58.160 --> 0:15:02.400
<v Speaker 1>America is politically are divided than since we started measuring

0:15:02.440 --> 0:15:05.640
<v Speaker 1>it in the nineteen thirties. There's been no sign during

0:15:05.720 --> 0:15:09.840
<v Speaker 1>these past um months of the Biden administration that that's

0:15:09.880 --> 0:15:13.600
<v Speaker 1>improving in any way. However, we do ask Americans whether

0:15:13.640 --> 0:15:16.200
<v Speaker 1>they prefer this kind of trifecta set up, at least

0:15:16.200 --> 0:15:19.000
<v Speaker 1>in Congress. And what we find is that Americans, actually

0:15:19.040 --> 0:15:23.080
<v Speaker 1>the majority of them um prefer a divided government. They

0:15:23.080 --> 0:15:26.560
<v Speaker 1>prefer there to be balanced between the two parties. But

0:15:27.240 --> 0:15:30.200
<v Speaker 1>this decision, like you said, comic really can't overstate the

0:15:30.240 --> 0:15:33.800
<v Speaker 1>magnitude of up ending fifty years of settled law in

0:15:33.840 --> 0:15:37.280
<v Speaker 1>the United States, and the reaction has been massive. Completely

0:15:37.360 --> 0:15:40.880
<v Speaker 1>unfair question, but I'm sure you will gauge it. What

0:15:41.080 --> 0:15:44.360
<v Speaker 1>is the belief in America in the Union almost a

0:15:44.440 --> 0:15:49.840
<v Speaker 1>Linclonian union back to eighteen fifty eighteen sixty. Do we

0:15:49.960 --> 0:15:53.960
<v Speaker 1>believe in union or do we nudge towards some form

0:15:54.080 --> 0:16:00.280
<v Speaker 1>of separation. It's again we've never asked that specifically, but um,

0:16:00.320 --> 0:16:04.000
<v Speaker 1>I would say that that the Union is still intact

0:16:04.080 --> 0:16:06.960
<v Speaker 1>and will remain intact. And I say that because Americans

0:16:06.960 --> 0:16:10.360
<v Speaker 1>are overall pretty positive on their own lives and on

0:16:10.440 --> 0:16:14.800
<v Speaker 1>their local government. Americans are very disappointed in national government

0:16:15.200 --> 0:16:18.360
<v Speaker 1>and that's really where we've seen the most declined in

0:16:18.600 --> 0:16:22.960
<v Speaker 1>confidence in institution in the Supreme Court, in Congress. Overall

0:16:23.000 --> 0:16:26.320
<v Speaker 1>satisfaction of the United States hasn't been over fift in

0:16:26.400 --> 0:16:29.480
<v Speaker 1>over a decade now, So Americans are very down on

0:16:29.520 --> 0:16:33.560
<v Speaker 1>their national government, but there aren't signs necessarily of you know,

0:16:33.680 --> 0:16:36.960
<v Speaker 1>dissolution of the Union in public opinions, and Mohammada does

0:16:36.960 --> 0:16:40.360
<v Speaker 1>seem to be a galvanizing of local elections. However, people

0:16:40.400 --> 0:16:42.720
<v Speaker 1>are looking to the national elections, to mid terms and

0:16:42.800 --> 0:16:46.440
<v Speaker 1>beyond to understand the overall trajectory here. Do you have

0:16:46.480 --> 0:16:49.400
<v Speaker 1>a sense of whether some of these social issues could

0:16:49.440 --> 0:16:55.240
<v Speaker 1>overcome inflation and economic issues. Is the main voter preference

0:16:55.360 --> 0:16:59.280
<v Speaker 1>or motivator going into the midterm elections? Well, if you

0:16:59.320 --> 0:17:01.360
<v Speaker 1>would have asked me to out on Friday before this

0:17:01.400 --> 0:17:03.440
<v Speaker 1>decision came out, I would have told you that's very

0:17:03.480 --> 0:17:06.720
<v Speaker 1>hard to believe. UM. Now, it's an open question and

0:17:06.880 --> 0:17:09.880
<v Speaker 1>obviously depends on how bad inflation and the economy really

0:17:09.920 --> 0:17:12.920
<v Speaker 1>gets for main street moving into the selection. But right

0:17:12.920 --> 0:17:16.399
<v Speaker 1>before this decision, we asked Americans how important abortion was

0:17:16.440 --> 0:17:18.840
<v Speaker 1>to your vote, and we did see an uptake in

0:17:18.920 --> 0:17:21.520
<v Speaker 1>those that that said they would only vote for somebody

0:17:21.560 --> 0:17:24.640
<v Speaker 1>who shared their views. It's also important to remember this

0:17:24.680 --> 0:17:28.400
<v Speaker 1>decision is not popular in America. Six and Kent. Americans

0:17:28.480 --> 0:17:31.480
<v Speaker 1>did not want to see Roe v Waite overturned. UM

0:17:31.480 --> 0:17:34.959
<v Speaker 1>fifty five percent of Americans described themselves as pro choice,

0:17:34.960 --> 0:17:37.320
<v Speaker 1>and that's been on the on the increase. So over

0:17:37.359 --> 0:17:40.120
<v Speaker 1>the past couple of decades, America has really moved, if

0:17:40.119 --> 0:17:42.800
<v Speaker 1>you will, to the left on abortion. And now this

0:17:42.960 --> 0:17:46.040
<v Speaker 1>decision by the Court is really out of step with

0:17:46.160 --> 0:17:48.479
<v Speaker 1>public opinion. Not that it's the long decision, that's not

0:17:48.520 --> 0:17:50.800
<v Speaker 1>the basis upon which the Court makes its decision, but

0:17:50.880 --> 0:17:52.520
<v Speaker 1>we know this is not going to be a popular

0:17:52.560 --> 0:17:54.679
<v Speaker 1>decision with the public. Just a fun a question for me,

0:17:54.760 --> 0:17:56.840
<v Speaker 1>do you find that is coming up in more than

0:17:56.880 --> 0:17:59.280
<v Speaker 1>one topic on several fronts. We often talk about in

0:17:59.320 --> 0:18:02.600
<v Speaker 1>this country being very divided, but on certain issues it's

0:18:02.600 --> 0:18:05.879
<v Speaker 1>really not. It's just Washington, d c. That's very divided,

0:18:05.960 --> 0:18:08.560
<v Speaker 1>damn party lines. Do you sense that's becoming a bigger

0:18:08.600 --> 0:18:13.080
<v Speaker 1>issue across a range of issues. I actually know. But

0:18:13.160 --> 0:18:15.960
<v Speaker 1>these are the kinds of issues that really can um

0:18:16.000 --> 0:18:20.040
<v Speaker 1>These social issues can really really become a focus and

0:18:20.080 --> 0:18:22.960
<v Speaker 1>can divide communities, and we've seen that in the past.

0:18:23.320 --> 0:18:28.239
<v Speaker 1>But overall, Americans are rather positive on local government. They

0:18:28.240 --> 0:18:32.240
<v Speaker 1>are not seeing their state governments as nearly as negatively

0:18:32.280 --> 0:18:35.560
<v Speaker 1>as they see the national government. And that really now

0:18:35.600 --> 0:18:39.320
<v Speaker 1>goes across the board. The Supreme Court just before this decision,

0:18:39.760 --> 0:18:42.879
<v Speaker 1>after the league hit a record low of twenty percent

0:18:43.000 --> 0:18:46.000
<v Speaker 1>confidence in the general public in the nineties that was

0:18:46.240 --> 0:18:49.320
<v Speaker 1>much more close to sort of six year seven percent.

0:18:49.760 --> 0:18:51.640
<v Speaker 1>Mohamed one ft to catch up to get your views

0:18:51.640 --> 0:18:53.439
<v Speaker 1>in the NiTi to off the bank of your appalling

0:18:53.520 --> 0:18:57.399
<v Speaker 1>mohammate units have count of. This is the Bloomberg Surveillance Podcast.

0:18:57.680 --> 0:19:00.960
<v Speaker 1>Thanks for listening. Join us live we days from seven

0:19:00.960 --> 0:19:04.639
<v Speaker 1>to ten am Eastern on Bloomberg Radio and on Bloomberg

0:19:04.640 --> 0:19:09.120
<v Speaker 1>Television each day from six to nine am for insight

0:19:09.400 --> 0:19:13.560
<v Speaker 1>from the best in economics, finance, investment, and international relations.

0:19:14.040 --> 0:19:18.720
<v Speaker 1>And subscribe to the Surveillance podcast on Apple podcast, SoundCloud,

0:19:18.880 --> 0:19:22.480
<v Speaker 1>Bloomberg dot com, and of course on the terminal. I'm

0:19:22.520 --> 0:19:25.159
<v Speaker 1>Tom Keene and this is Bloomberg