Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Doug Krisner.
Speaker 2: You can join Brian Curtis and myself for the stories,
Speaker 2: making news and moving markets in the APAC region. You
Speaker 2: can subscribe to the show anywhere you get your podcast
Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the
Speaker 2: Bloomberg Business app. Let's get to our guest, Todd Walsh's
Speaker 2: with us. He is the CEO of Alpha Cubed Investments.
Speaker 2: Todd is normally based in California. Day today we find
Speaker 2: him in New York City. Todd, good of you to
Speaker 2: make time to chat with us. I think we can
Speaker 2: agree that seemed like a lot of panic selling at
Speaker 2: the end early part of last week. Things have settled down.
Speaker 2: What do you make of the gyrations that we saw.
Speaker 2: Was this all about an unwind of the end carrier?
Speaker 2: Is there something else happening here?
Speaker 3: Well, hey, Doug, thanks for having me on. And of course,
Speaker 3: trees don't grow to the sky.
Speaker 4: Right.
Speaker 3: We've had eighteen months of a toward increase in the
Speaker 3: AI ecosystem tech sector stocks, so you know we've all
Speaker 3: been expecting a little bit of a correction. We got it.
Speaker 3: We've been looking at questions about, you know, where is
Speaker 3: the ROI going to be coming from? On all the
Speaker 3: capex that's going on out there, there's an element of
Speaker 3: this is kind of normal, but you know, when it happens,
Speaker 3: it doesn't feel normal. And of course we have the
Speaker 3: CPI print coming out, we think we're going to see
Speaker 3: a little bit more volatility at it. It kind of
Speaker 3: feels like we're at the doctor's office in the waiting
Speaker 3: room right now.
Speaker 2: Okay, So if you're expecting some volatility tied to that
Speaker 2: report on consumer prices, is it possible that we don't
Speaker 2: get a market friendly report, which is to say, something
Speaker 2: that confirms that inflation is cooling at the same rate
Speaker 2: that we have been expecting.
Speaker 3: Well, don't say possible. Anything's possible, right. The biggest issues
Speaker 3: if we stop and really think about what's going on,
Speaker 3: we kind of need to thread the needle a little
Speaker 3: bit here. If we get a strong CPI report, meaning
Speaker 3: you know, it's not coming down, cpis up, rate cuts
Speaker 3: could be off the table, and we know that's bad
Speaker 3: news for the market. But if we get a weak
Speaker 3: CPI report and we start leaning more towards an actual
Speaker 3: recession that might even be worse for the markets. We
Speaker 3: did a little study of initial rate cuts when the
Speaker 3: FED starts cutting rates. Since nineteen eighty three, the market's
Speaker 3: up about twenty one percent in the first year after
Speaker 3: the first rate cut, but that's only if there's no
Speaker 3: recession after the first recession rate cut. When there is
Speaker 3: a recession two thousand and one, two thousand and eight,
Speaker 3: the market was down in an average of fifteen percent.
Speaker 3: So we are looking for what's been happening up to
Speaker 3: this point, which is marginal slowing, marginal acceleration in the
Speaker 3: economy with some mixed positive economic data to kind of
Speaker 3: back that up. And what we want to see again
Speaker 3: is marginal decrease in that inflation number. We kind of
Speaker 3: need the right kind of inflation number to get where
Speaker 3: we need to get here. We think we're going to
Speaker 3: have it.
Speaker 2: So I hear what you're saying when it comes to
Speaker 2: kind of an one of me that shifting into lower gear.
Speaker 2: All we have to do is remember the market's response
Speaker 2: to that relatively disappointing employment report for the month of July,
Speaker 2: and I hear what you're saying too about the lack
Speaker 2: of ROI when it comes to AI. But I'm wondering
Speaker 2: whether or not what we have viewed principally in the
Speaker 2: market up until this point has been confined to let's
Speaker 2: call it a market event rather than a macro economic event.
Speaker 2: To go back to the question that I asked at
Speaker 2: the top of the conversation about the unwind of the
Speaker 2: carry trade in yen and whether or not this revealed
Speaker 2: a lot of leverage and maybe a big part of
Speaker 2: that leverage was tied to your trade on AI.
Speaker 3: You know that's possible. We still aren't out of the
Speaker 3: woods yet, and one of the possible catalysts for volatility
Speaker 3: does revolve around that carry trade online. Are there unknown
Speaker 3: victims out there? Is there leverage that we don't know about.
Speaker 3: But underneath the surface, the recovery that we saw last
Speaker 3: week was you know, enjoyable. But the daily technicals, relative strength,
Speaker 3: amount of money flows, a lot of the daily technicals
Speaker 3: we look at, they are all still in the negative
Speaker 3: and they haven't crossed into the positive yet. And on
Speaker 3: top of the CPI report, you know, Iran seems intent
Speaker 3: on retaliating against Israel, and that's a big unknown. We've
Speaker 3: got a lot of catalysts for volatility. Sell offs are
Speaker 3: a lot like earthquakes, right we want to watch for aftershocks,
Speaker 3: and let's not be too hasty about, you know, going
Speaker 3: right in and buying. Because the guys have cleared, we
Speaker 3: think we've got a little more volatility ahead most likely.
Speaker 2: We saw a big move in crude oil in New
Speaker 2: York today. We were up more than four percent in
Speaker 2: the regular session. A lot of this is the market
Speaker 2: really braced for Iran's response to that assassination that took
Speaker 2: place in Tehran of the Hummas leader. Talk to me
Speaker 2: broadly about the commodities trade right now? Do you want
Speaker 2: to be exposed to commodities if you're assuming a down
Speaker 2: shift in global growth?
Speaker 3: You've got a short term catalyst with what's going on geopolitically,
Speaker 3: But we don't think commodities are the place to be.
Speaker 3: In fact, we think the FED is going to achieve
Speaker 3: their desire to cut rates. When they pivoted back in
Speaker 3: November of last year, the value dividend trade caught fire,
Speaker 3: and for the first time in about two or three years,
Speaker 3: that trade that had been left for dead has actually
Speaker 3: returned almost the same amount since that November pivot. As
Speaker 3: we've seen in the white hot Nasdaq one hundred they're
Speaker 3: both from that date up plus or minus about twenty
Speaker 3: five percent. And you know what, Doug, I don't think
Speaker 3: most people know that. And now if the FED moves
Speaker 3: to a more dubbish stance and starts cutting rates, we
Speaker 3: might have the wind at the back of that trade
Speaker 3: for you know, a year or two as the Fed
Speaker 3: tries to achieve their dot plot goal of getting you know,
Speaker 3: rates down to potentially two and a half percent over
Speaker 3: the next two or three years. So we like the value.
Speaker 3: We like dividend trade. The dividend trade right here.
Speaker 2: You know, as I'm listening to I'm looking at the
Speaker 2: bond market and whether wondering whether there's opportunity there as well.
Speaker 3: There may be some short term opportunity there. In general,
Speaker 3: though we think it's going to be marginal. The keyword
Speaker 3: again is marginal on the on the interest right front.
Speaker 3: We don't think rates are going to come crashing down.
Speaker 3: We think the Fed's going to achieve its goal and
Speaker 3: marginally bring down rates. You know, the FED Fund's futures.
Speaker 3: I think last week we're looking at about one hundred
Speaker 3: percent expectation for a fifty basis point rate cut. Where
Speaker 3: are they at today? Now we're fifty to fifty. I
Speaker 3: think as we go through as investors, we need to think,
Speaker 3: catch our breath and think things through. Our thesis this
Speaker 3: year was hold tack, but look for volatility. Let's not
Speaker 3: pay too much, Let's slow down a little bit. Trees
Speaker 3: don't grow to the scot The value dividend trade has
Speaker 3: the wind at it's back, but we don't think it's
Speaker 3: going to be an aggressive move. We think it's something
Speaker 3: we can participate in marginally. And the same old's true
Speaker 3: for the bond market. Bond market's been inverted depending on
Speaker 3: which timeframes you're looking at, for a very long time.
Speaker 3: We think the Fed is going to achieve it's cool
Speaker 3: bringing rates down, and that'll happen all the way across
Speaker 3: the curve. But the farther out we go, the more
Speaker 3: marginal it's going to be. So the answer is yes,
Speaker 3: but again marginally.
Speaker 2: So how do you know when to enter any market
Speaker 2: if there is a lot of volatility? I mean, and
Speaker 2: you expect, let's say, whether it's stocks or bonds, you
Speaker 2: expect those assets to trade in a certain range. How
Speaker 2: do you know the entry point? I know we're talking
Speaker 2: about timing here, and most people don't like to discuss
Speaker 2: timing a market. But that's essentially what you're describing, isn't it.
Speaker 3: Yeah, I love that question. It's the nine trillion dollar
Speaker 3: question out there right now on the AI ecosystem, the
Speaker 3: tech and AX. Everybody wants to know when do I
Speaker 3: get in? How do I get in? Most investors, let's
Speaker 3: face it, in a lot of professionals kind of missed
Speaker 3: out on the bulk of that trade. The only way
Speaker 3: to enter that trade is dollar cost average using volatility,
Speaker 3: just incrementally move in. But we think of the market
Speaker 3: has almost two big chunks. There's the AI ecosystem tech trade,
Speaker 3: which the valuations got astronomical. We're seeing some consolidation there,
Speaker 3: and we can slowly dollar cost average into some of
Speaker 3: those areas for people coming in with new money. The
Speaker 3: rest of the market the other four hundred and ninety
Speaker 3: three stocks, which I call the forgotten four ninety three.
Speaker 3: There's value in that value trade, so we want to
Speaker 3: enter that trade sooner rather than later.
Speaker 2: Todd will leave it there, always a pleasure. Thanks for
Speaker 2: making time to chat with us. Todd Walsh, there, CEO
Speaker 2: of Alpha Cubed Investments joining us from New York. Well,
Speaker 2: Alphabet's Google is holding a major event tomorrow for a
Speaker 2: tech hardware launch. We have a preview from Bloomberg's Charlie Pellett.
Speaker 5: Google is trying to outshine Apple's annual iPhone launch and
Speaker 5: is letting longtime executive Rick Ostrolo takes out her stage.
Speaker 5: He's the former president of Motorola who joined Google in
Speaker 5: twenty sixteen. He will helm the first major product launch
Speaker 5: after the company this year, unified under his leadership the
Speaker 5: teams developing hardware and the Android operating system. In a
Speaker 5: sign of a more aggressive push into consumer devices, Google
Speaker 5: moved up its annual flagship Pixel smartphone launched to August
Speaker 5: from October, preempting the next Apple iPhone debut in New York.
Speaker 5: Charlie Powlett's Bloomberg.
Speaker 2: Radio, Well, let's take a closer look at the Google
Speaker 2: Pixels story with our own Bloomberg Tech editor of Vlad
Speaker 2: Savov joins us from our studios in Hong Kong Flat.
Speaker 2: It's always a pleasure. Are we going to be overwhelmed
Speaker 2: or underwhelmed tomorrow?
Speaker 1: What do you think?
Speaker 4: I think both extremes. There's always a shade of gray
Speaker 4: with these things. I do believe that one of the
Speaker 4: interesting things with Google this year is how far ahead
Speaker 4: they're going to be in terms of their own design
Speaker 4: and cameras technology and so on. That's kind of being
Speaker 4: gone under the radar. I do feel like the company
Speaker 4: is very confident about the how where itself and although
Speaker 4: these things have kind of become commoditized, it does have
Speaker 4: a leadership as far as camera software goes. And if
Speaker 4: the thing that happens, which a lot of people are anticipating,
Speaker 4: is that Google is going to increase sales, I feel
Speaker 4: like there'll be much greater awareness of all the things,
Speaker 4: all the strengths of the Pixel line.
Speaker 1: To date, on top of all the AI stuff.
Speaker 4: So immediately after the event, I guarantee you you will
Speaker 4: not be overwhelmed, but I do feel like a lot
Speaker 4: of people will see some of these strengths that just
Speaker 4: the world hasn't known about with the Pixel line to date.
Speaker 2: Do you think there's a change inside Alphabet when it
Speaker 2: comes to the smartphone, I mean, developing your own technology
Speaker 2: On the hardware side, it seemed like that they were
Speaker 2: maybe a little bit more willing to allow some of
Speaker 2: the other companies like Samsung. I'm thinking of primarily to
Speaker 2: take the lead on that front. I mean, I know
Speaker 2: that the Pixel story has been out there for a while,
Speaker 2: but it never felt as though the company was being
Speaker 2: super aggressive. Here is that beginning to change absolutely.
Speaker 4: I mean, it's such a major change when you think
Speaker 4: about it.
Speaker 1: I was just thinking.
Speaker 4: Google had an event here in Hong Kong launching one
Speaker 4: of its smartphones in twenty eleven on its own brand. So,
Speaker 4: like I say, it's been going for a very long time.
Speaker 4: But when you launch your phone in October, what you're
Speaker 4: saying is everyone who wanted an iPhone already has a
Speaker 4: ninth phone, so you're giving up on that audience. Samsung
Speaker 4: refreshes his devices early in the year and then around
Speaker 4: this time July August, so you're kind of the afterthought
Speaker 4: for a whole bunch of people. Coming in the middle
Speaker 4: of August, coming a month ahead of the iPhone, says
Speaker 4: we are going to compete directly against Apple. We're going
Speaker 4: to compete directly against Samsung too. Even though Google rica
Speaker 4: Osterolo we mentioned he's the leader now, he went immediately
Speaker 4: as soon as he got the new job to talk
Speaker 4: to Samsung to signal that the partnership and the collaboration
Speaker 4: with the two companies is as strong as ever. But
Speaker 4: the signal is the release date.
Speaker 3: You know.
Speaker 2: The elephant in the room I think we can agree
Speaker 2: is artificial intelligence, right when it comes to the handset.
Speaker 2: I mean, we know that that's what Apple is trying
Speaker 2: to build in in terms of hype for the launch
Speaker 2: of the iPhone sixteen. Do you think we're going to
Speaker 2: get kind of a sense of that from Google tomorrow
Speaker 2: where the company is going in terms of the smartphone
Speaker 2: being a device where artificial intelligence is kind of baked
Speaker 2: into the cake.
Speaker 1: Oh absolutely.
Speaker 4: And in order teasers that Google has done for this event,
Speaker 4: it was Pixel meets AI, which is a fun thing
Speaker 4: to say because Google is one of the companies that
Speaker 4: has been putting AI into smartphones for years and years now.
Speaker 4: Its own camera software is all about AI and machine learning.
Speaker 4: But you have to now put it front of mind
Speaker 4: for everybody. Something has been doing the exact same thing.
Speaker 4: They talk about Galaxy AI every time they talk about
Speaker 4: their products. Google likewise Apple with Apple Intelligence. That's going
Speaker 4: to be the theme at least for the next year
Speaker 4: or two. Everyone is going to turn AI as the
Speaker 4: selling point for devices, and the devices we're talking about
Speaker 4: smartphones and laptops.
Speaker 1: Most people already have one.
Speaker 4: So each company in the industry now sees AI as
Speaker 4: the big selling point to get us all to upgrade
Speaker 4: those devices.
Speaker 2: Isn't there The risk though, when you jump in whole
Speaker 2: hog like this so to speak, that as the check
Speaker 2: technology changes, that you have to do a major kind
Speaker 2: of re engineering or kind of a major tweak to
Speaker 2: a device like a smartphone that needs to kind of
Speaker 2: incorporate a lot of this AI technology, so that the
Speaker 2: first generation maybe is going to be kind of radically
Speaker 2: different from the next generation.
Speaker 1: Yes, And as far as the companies that concerned, that's
Speaker 1: great news. Stuff great next year as.
Speaker 2: Well, right, right, So if it's a driver of sales
Speaker 2: planned obs lescence, I think that's what they call it, right.
Speaker 2: What are some of the things that you're looking out
Speaker 2: for in particular.
Speaker 4: Well, it really is this whole integration of hardware and software,
Speaker 4: and I would actually say the ecosystem play again comes
Speaker 4: to the surface is a very important thing. Samsung set
Speaker 4: out is still much in the same way that Apple did,
Speaker 4: and we kind of expect Google to do the same thing.
Speaker 4: Google already has its Pixel watch. It already has its
Speaker 4: own in house design process. Going back to the first
Speaker 4: thing I mentioned, Google has been putting all.
Speaker 1: The pieces together.
Speaker 4: It's just most people don't know about these picks of
Speaker 4: phones and the whole lineup. So in this event that's
Speaker 4: coming up, we're probably going to get another watch, We'll
Speaker 4: probably going to get several smartphones, and it's the ecosystem
Speaker 4: of devices is the way that they work together. Also,
Speaker 4: don't forget, under Rick Osterlo's leadership, you have Google Nests,
Speaker 4: which are the home devices, home cameras, such things, thermostats.
Speaker 4: You have a whole bunch of other home devices, personal devices,
Speaker 4: all the Internet software. If Google makes all these things
Speaker 4: work together as seamlessly as it hopes, there will be
Speaker 4: a lot of people who can be swung to the
Speaker 4: pixel side of things.
Speaker 2: Is this a device that will have an opportunity in
Speaker 2: the China market?
Speaker 1: You think zero? Google services are not there?
Speaker 4: The Google Play Store, which is a real big selling
Speaker 4: point for Google because that's where you get all your
Speaker 4: international apps, it doesn't play there. And the Chinese smartphone manufacturers,
Speaker 4: let's give them their own new credit. They are right
Speaker 4: up there in terms of cameras, technology. They have their
Speaker 4: own app stores, they have we chats, and an entire
Speaker 4: ecosystem that Google has no presence in. So unfortunately, Google,
Speaker 4: the world's big smartphone market where Apple is a big player,
Speaker 4: is out of bounds.
Speaker 2: Do we know anything about the part suppliers here and
Speaker 2: where this device is being kind of created or manufactured.
Speaker 4: Well, Fox contends to be the company that Google has
Speaker 4: been worked has worked with in the past. It does
Speaker 4: it's manufacturing in Vietnam in Taiwan. Taiwan is actually plays
Speaker 4: host to Google's hardware engineering hub. We can remember that
Speaker 4: Google took over HTC smartphone design team. They took on
Speaker 4: a bunch of design and engineering people, so you can
Speaker 4: say Taiwan plays a really big role in developing all
Speaker 4: of this.
Speaker 2: So very quickly vled what markets in Asia might Google
Speaker 2: kind of target for this new pixel phone.
Speaker 4: Japan absolutely, Japan has always been a really big market
Speaker 4: for Google. It has good relationships and one of the
Speaker 4: interesting things in Japan is that the Chinese players don't
Speaker 4: have that much of a presence, needed does Samsung, so
Speaker 4: it has the biggest opportunity there. It's a developed market,
Speaker 4: there's a lot of potential there, but.
Speaker 2: It's always a pleasure. Thanks for making time to chat
Speaker 2: with us on this launch tomorrow taking place for the
Speaker 2: new Google Epixel phone. Vlat's have off Bloomberg's Tech editor
Speaker 2: joining us from Hong Kong. So we know that the
Speaker 2: Democrats are rallying around Vice President Kamala Harris and her
Speaker 2: running mate Tim Walls. Walls, you may know, has had
Speaker 2: a long history with China. He taught English in China
Speaker 2: in nineteen eighty nine and nineteen ninety and since that
Speaker 2: time he's visited at least thirty times. Let's take a
Speaker 2: closer look now with Michael Sobolik. He is senior fellow
Speaker 2: at the American Foreign Policy Council. Michael, good of you
Speaker 2: to make time to chat with us about this story.
Speaker 2: Do you have a sense of how mister Walls's backstory
Speaker 2: regarding China may play out in this campaign.
Speaker 5: Yes.
Speaker 6: Governor Walls is really unique. He has so much personal
Speaker 6: experience living in China and working in China, far more
Speaker 6: than the average American politician and far more than the
Speaker 6: average vice presidential candidate. It could cut one of two ways.
Speaker 6: On the one hand, Governor Walls, by all accounts, has
Speaker 6: one of the strongest records on China human rights that
Speaker 6: we've seen from any member in the House of Representatives
Speaker 6: in recent memory. When he was a member of Congress,
Speaker 6: he got photos with the Dalilama. He and his wife
Speaker 6: literally got married on the anniversary of the Tenaman Square
Speaker 6: massacre on June fourth, So he has a strong record
Speaker 6: on being publicly vocal on the need for human rights
Speaker 6: in China. On the other hand, he's also an equally
Speaker 6: vocal proponent on engaging China and promoting exchanges between Washington
Speaker 6: and Beijing. And in this day and age where national
Speaker 6: security concerns tend to trump a lot of others, it's
Speaker 6: unclear how those two competing priorities would play.
Speaker 2: Out for it. You know, it's very interesting because there
Speaker 2: was an article written back in nineteen ninety after he
Speaker 2: returned from a teaching in China. I think it was
Speaker 2: the Star Herald maybe in Minneapolis, and he was quoted
Speaker 2: as saying, if the Chinese people had proper leadership, there
Speaker 2: are no limits on what they could accomplish. They are
Speaker 2: such kind, generous and capable people. They gave and gave
Speaker 2: and gave to me. That was nineteen ninety. Relationship between
Speaker 2: the US and China very very different these days, isn't not.
Speaker 6: It is as different as it could possibly be. But
Speaker 6: I'll say this, Governor Wallas, like when he wrote those
Speaker 6: words so long ago, tapped into something that is still
Speaker 6: true today in twenty twenty four, which is, the Chinese
Speaker 6: people are not the enemies of the American people at all,
Speaker 6: nor should they be. I've been to China as well,
Speaker 6: and I've experienced that same hospitality and generosity that Walls
Speaker 6: experienced when he was there too, and I think many
Speaker 6: Americans would attest to the same thing. The problem for
Speaker 6: Washington policymakers is not the Chinese people, it's the Chinese
Speaker 6: Communist Party. And that distinction is quite meaningful, and I
Speaker 6: am gratified greatly that Governor Waltz recognizes that difference.
Speaker 2: Yeah, that's an important distinction to make. But in terms
Speaker 2: of influencing policy, imagine a world where Kamala Harris is
Speaker 2: the next president. Is it the role of the vice
Speaker 2: president at all to kind of get involved with setting
Speaker 2: the agenda?
Speaker 6: So that's going to vary from administration to administration. To
Speaker 6: be sure, We've had vice presidents like Dick Cheney, who
Speaker 6: are one of the most prominent presences in any room
Speaker 6: and played a major hand in national security. I think
Speaker 6: Vice President Joe Biden when he served Barack Obama, in
Speaker 6: some cases fit that bill as well. If Kamala Harris
Speaker 6: wins the presidency, that'll be her decision to make. But ultimately,
Speaker 6: if she wins, she is going to face this million
Speaker 6: dollar question in American foreign policy. Is China the Chinese
Speaker 6: Communist Party a potential competitor or an adversary? And Shijinping,
Speaker 6: the leader of China, is not really leaving America with
Speaker 6: much of a choice. We're going to have to choose
Speaker 6: one or the other.
Speaker 1: How do you.
Speaker 2: Imagine Beijing would react to this type of situation where
Speaker 2: you have someone in the administration who knows so much
Speaker 2: about China.
Speaker 6: I think they'll probably try to play this much like
Speaker 6: they have attempted to work with President Joe Biden. So
Speaker 6: President Biden talks regularly about how many hours he spent
Speaker 6: meeting with Schijingping when he was Barack Obama's vice president,
Speaker 6: and that was quite intentional. Barack Obama and the US
Speaker 6: government around twenty twelve twenty, even as early as twenty
Speaker 6: ten and twenty eleven, knew that Chijingping was the heir
Speaker 6: apparent in China, and Joe Biden spent a lot of
Speaker 6: time cultivating a very personal relationship with Chijingping and what not,
Speaker 6: just she at the most highest levels. But what Chinese
Speaker 6: diplomats will often do is try to fall back on
Speaker 6: mutual feelings of friendship and cooperation and shared cultural experiences
Speaker 6: to try to get American politicians to give a little
Speaker 6: bit on the competitive agenda. I am certain they will
Speaker 6: try to do the same thing with Walls if he
Speaker 6: assumes the vice presidency. In fact, as governor of Minnesota,
Speaker 6: he's already received some of those diplomatic overtures.
Speaker 2: So we know, and you mentioned the Walls record on
Speaker 2: when it comes to human rights, particularly in China. How
Speaker 2: do you think he's going to frame the conversation around
Speaker 2: the South China Sea.
Speaker 6: So he's on record as a member of Congress saying
Speaker 6: that the United States needs to stand up to China
Speaker 6: and call out their illegal territorial claims in the South
Speaker 6: China Sea, and listen, that's great. We need to hold
Speaker 6: the Chinese Communist Party accountable for their illegal actions with
Speaker 6: our rhetoric. But we are at a point in our
Speaker 6: security situation where we need to move beyond words. We
Speaker 6: need to start making the Chinese Communist Party pay for
Speaker 6: dangering the security of our allies and our partners and
Speaker 6: frankly American interests in the South China Sea. And this
Speaker 6: is the big question with Governor Wallas. He has a
Speaker 6: strong rhetorical record on human rights with China, but he hasn't,
Speaker 6: in the position of a representative, really been in a
Speaker 6: position to make those hard executive level decisions on how
Speaker 6: do you assess those trade offs, because if you want
Speaker 6: to hold them accountable, you're probably going to have to
Speaker 6: give a bit on the cooperative agenda with Beijing. And
Speaker 6: it's really unclear how he's going to make that calculation
Speaker 6: if he wins the selection.
Speaker 2: With Kamala Harris, I'm sure that this topic will come
Speaker 2: up during the vice presidential debate. Michael, thank you so
Speaker 2: much for making time to chat with us. Michael Soberlik,
Speaker 2: Senior Fellow at the American Foreign Policy Council. He was
Speaker 2: speaking to us from right outside the District of Columbia
Speaker 2: in Alexandria, Virginia. This has been the Bloomberg Daybreak Asia podcast,
Speaker 2: bringing you the stories making news and moving markets.
Speaker 1: In the Asia PAS.
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