WEBVTT - How Equities Could Respond to Elections and Geopolitical Uncertainty 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:47.360 the Bloomberg Terminal, and the Bloomberg Business App. Joining us 0:00:47.400 --> 0:00:51.360 Stats Kim Dawson, New Edge Wealth. Who you know, people 0:00:51.400 --> 0:00:53.600 make jokes about it, but there's strategists that have a 0:00:53.680 --> 0:00:56.440 conviction in the market. Kim Dawson, I think the bears 0:00:57.040 --> 0:01:01.000 percolated this weekend off the calendar and said, OMG, now's 0:01:01.040 --> 0:01:03.640 the time to get out. Why are you still in the. 0:01:03.520 --> 0:01:07.039 Market because the trend is still up, momentum is positive, 0:01:07.080 --> 0:01:08.600 and liquidity is supportive. 0:01:09.200 --> 0:01:10.080 I think that we. 0:01:10.200 --> 0:01:13.600 Are very attuned to the brewing risks, meaning that for 0:01:13.640 --> 0:01:16.640 the first time in twelve months, you saw GDP forecast 0:01:16.680 --> 0:01:17.840 get cut on Friday. 0:01:18.200 --> 0:01:18.960 That's significant. 0:01:18.959 --> 0:01:19.640 I was on a beache. 0:01:20.280 --> 0:01:22.840 So for the last eighteen months, we've been seeing a 0:01:23.000 --> 0:01:26.120 rising growth forecast environment, which has been really good for 0:01:26.280 --> 0:01:30.440 risk assets. It's allowed valuations to continue to expand, EPs 0:01:30.560 --> 0:01:33.720 estimates to continue to drift higher. If that starts to 0:01:33.840 --> 0:01:36.720 change in a more meaningful way, then we would grow 0:01:36.760 --> 0:01:40.240 more cautious. But really it's a matter of balancing the 0:01:40.280 --> 0:01:42.840 fact that you still have this positive trend with some 0:01:43.000 --> 0:01:44.200 of these brewing risks. 0:01:44.760 --> 0:01:47.400 You know, Torsten Slock was out with a good note 0:01:47.440 --> 0:01:49.200 in the last couple of days, our good friend over 0:01:49.200 --> 0:01:51.480 at Apollo. The top ten companies in the S and 0:01:51.520 --> 0:01:54.040 P five hundred makeup thirty five percent of the market cap, 0:01:54.280 --> 0:01:57.120 but only twenty three percent of the earnings. Talking about 0:01:57.160 --> 0:02:00.560 that concentration risk in the market, how much of a 0:02:00.640 --> 0:02:03.040 risk is that for you if an Nvidia or somebody 0:02:03.040 --> 0:02:06.680 else really just really disappoint somewhere along the line. 0:02:06.960 --> 0:02:09.160 One of the phrases that we keep repeating is that 0:02:09.400 --> 0:02:11.760 trees can grow a lot longer than you think, but 0:02:11.880 --> 0:02:15.840 they usually stop short of the sky, meaning that eventually 0:02:16.040 --> 0:02:18.120 you're going to have a challenge where you will have 0:02:18.280 --> 0:02:21.480 priced all of these unending growth parts of the market 0:02:21.600 --> 0:02:25.320 at such lofty valuations that even if they deliver growth, 0:02:25.400 --> 0:02:27.880 you will see an unwind in the valuation. The problem 0:02:28.000 --> 0:02:31.760 is you need a catalyst and you need earnings to 0:02:31.800 --> 0:02:32.919 stop going up. 0:02:33.680 --> 0:02:38.400 What's important, your folks, is cam Dawson brings bulletproof mathematics 0:02:38.440 --> 0:02:41.640 to this. She's not just spouting paragraphs. Do you have 0:02:41.680 --> 0:02:44.880 a discount of cash flow model or some form of 0:02:44.919 --> 0:02:48.000 net present value study that allows you to stay in 0:02:48.040 --> 0:02:49.880 the market? How do you get there? 0:02:50.800 --> 0:02:53.200 I will say that we are in very rarefied air 0:02:53.280 --> 0:02:57.040 for valuations, and so if you're just looking at fundamentals, 0:02:57.080 --> 0:02:59.200 what you have to acknowledge is that you're back up 0:02:59.200 --> 0:03:02.600 to twenty twenty twenty twenty one levels of valuations. So 0:03:02.639 --> 0:03:05.800 if you do a DCF, you would argue that focussally 0:03:05.840 --> 0:03:06.359 we are over. 0:03:06.760 --> 0:03:10.520 You slam your terminal value more present and put extra 0:03:10.600 --> 0:03:15.040 weight on quarterly and annual free cash flow assumptions. That 0:03:15.120 --> 0:03:16.600 seems to be the rationalization. 0:03:17.080 --> 0:03:19.680 Look, every time you try to say this time is different, 0:03:19.720 --> 0:03:22.560 that's usually when you run headfirst into a market peak. 0:03:22.960 --> 0:03:25.399 Go back to December of twenty twenty one. 0:03:25.800 --> 0:03:28.799 Robert Schiller came out and said, don't worry about high 0:03:28.880 --> 0:03:32.160 valuations because interest rates are so low. We ended up 0:03:32.160 --> 0:03:34.640 being in a bubble for both equities and for bonds, 0:03:34.639 --> 0:03:36.800 and that's twenty two was a bad year. I think 0:03:36.800 --> 0:03:40.760 that that discipline about valuation needs to be very, very present, 0:03:40.800 --> 0:03:44.000 which just means we're not chasing growth stocks at this time. 0:03:44.040 --> 0:03:46.480 And if we're looking within the growth index, we're looking 0:03:46.480 --> 0:03:48.840 at names that are trading at a discount to the index. 0:03:49.760 --> 0:03:50.600 Where do I go here? 0:03:50.720 --> 0:03:55.960 I'm afraid of tech stocks? Do I go, financials, energy industrials? 0:03:56.560 --> 0:03:57.720 Where does a normal person go? 0:03:58.600 --> 0:04:01.560 I think that there are plenty of opportunities outside of 0:04:01.600 --> 0:04:04.520 the megacap stocks, but you have to be highly selective, 0:04:04.760 --> 0:04:06.840 which means that we don't think that you should be 0:04:06.920 --> 0:04:10.600 indexing your value your international or your small cap. Meaning 0:04:11.000 --> 0:04:15.440 active management is absolutely imperative because there's a big divergence 0:04:15.480 --> 0:04:17.960 between the winners and the losers in that space. And 0:04:18.040 --> 0:04:19.960 so if you can look at names with high free 0:04:20.000 --> 0:04:23.320 cash flows, strong return at invested capital, good growing dividends, 0:04:23.600 --> 0:04:25.919 all the things that we love as long term investors, 0:04:26.160 --> 0:04:28.640 you weed out the strength from the weakness, and that's 0:04:28.640 --> 0:04:29.880 where you can cut value, and. 0:04:29.920 --> 0:04:32.720 The textbook will say, out of one hundred stocks, thirty 0:04:32.760 --> 0:04:36.040 have strength, seventy have weakness. How do you find a 0:04:36.160 --> 0:04:37.839 seventy percent you don't want to own? 0:04:38.080 --> 0:04:41.520 Yeah, well, it's a combination of the fundamentals and then 0:04:41.640 --> 0:04:44.320 that discipline around the technicals, which is that what we 0:04:44.400 --> 0:04:46.920 do is we screen up names that do have high debt, 0:04:47.080 --> 0:04:49.960 meaning that they rely on capital markets just to keep 0:04:50.000 --> 0:04:52.320 the lights on. We screen up names that have really 0:04:52.440 --> 0:04:54.080 volatile free cash flow generation. 0:04:54.240 --> 0:04:55.680 We want stability in that. 0:04:56.040 --> 0:04:58.559 And then what we're trying to identify is those names 0:04:58.600 --> 0:05:02.159 that have high roc return on invested capital. Every dollar 0:05:02.160 --> 0:05:04.760 they put into the business they generate more out. That 0:05:04.800 --> 0:05:07.120 doesn't mean you get the stocks right at every moment, 0:05:07.520 --> 0:05:09.719 because a lot of those names are still being left 0:05:09.760 --> 0:05:12.400 behind in this extraordinarily narrow market. 0:05:12.520 --> 0:05:15.200 What we reminded, I guess Thursday night into Friday, is 0:05:15.320 --> 0:05:18.680 this is an election year and there's election political risk 0:05:18.720 --> 0:05:20.920 in the marketplace. When you talk to your clients, how 0:05:20.920 --> 0:05:22.760 do you talk to them about what could be a 0:05:22.800 --> 0:05:25.640 volatile time on the political front over the next six months. 0:05:25.920 --> 0:05:28.880 I think we have to first identify what neither party 0:05:29.000 --> 0:05:32.240 is talking about, which is balance budgets in austerity. So 0:05:32.640 --> 0:05:36.200 no matter what party you affiliate with, you have to 0:05:36.240 --> 0:05:40.000 acknowledge that both parties are going to probably contribute to 0:05:40.080 --> 0:05:43.080 higher deficits, which just means that the bond market is 0:05:43.120 --> 0:05:44.560 going to have to continue to. 0:05:44.600 --> 0:05:46.880 Digest this higher issuance of treasuries. 0:05:47.160 --> 0:05:50.240 That could mean a step you'll curve through a bear steepening, 0:05:50.640 --> 0:05:52.960 and it could mean this continued drift higher in the 0:05:53.000 --> 0:05:53.760 long end of the curve. 0:05:54.040 --> 0:05:57.400 Let me double use of cash here. It's real simple 0:05:57.640 --> 0:06:02.080 use of cash, share buy back, gibbling growth. And I'd 0:06:02.120 --> 0:06:06.080 compound with that the nascon idea that big tech and 0:06:06.160 --> 0:06:10.440 other companies frankly will issue more bonds. Am I onto 0:06:10.480 --> 0:06:11.159 something there? 0:06:12.440 --> 0:06:13.520 They don't do they need to. 0:06:13.720 --> 0:06:15.880 I think they don't need to. That's precisely the point. 0:06:15.920 --> 0:06:18.800 But you do it and you retire stock. I mean, 0:06:18.839 --> 0:06:21.560 that's the big It's Mario Gabelli one on one. 0:06:21.680 --> 0:06:25.760 Yeah, I think that the calculus for using debt in 0:06:25.839 --> 0:06:29.760 order to do share repurchases is less attractive at today's rates. 0:06:29.800 --> 0:06:33.560 But to your point, credit spreads are also extraordinarily tight, 0:06:33.680 --> 0:06:36.240 so you could take advantage of say, yes, my base 0:06:36.279 --> 0:06:39.800 yield is higher, but nobody really is demanding extra compensation 0:06:39.880 --> 0:06:40.640 for credit risk. 0:06:40.960 --> 0:06:43.320 The triple B to double B spread is. 0:06:43.279 --> 0:06:46.440 Actually tighter today than it was in twenty twenty one, 0:06:46.920 --> 0:06:49.800 showing just how price per perfection the credit market is. 0:06:49.960 --> 0:06:51.920 I mean, right right there, I think, Paul, that's the 0:06:52.000 --> 0:06:53.760 quote of the day here is the bond market is 0:06:53.760 --> 0:06:56.320 telling the equity market what to do. The most important 0:06:56.320 --> 0:06:58.599 thing that happened last quarter was at home Depot Yep, 0:06:58.680 --> 0:07:01.200 they had a bond offering. Was a four foot starts. Yeah, 0:07:01.960 --> 0:07:02.200 that's the. 0:07:02.279 --> 0:07:05.880 Most important exactly the last quarter. What are you guys 0:07:05.880 --> 0:07:09.400 thinking about our feed of reserve here this year? When, if, when? 0:07:09.840 --> 0:07:12.000 How many times? What are you guys factoring in? 0:07:12.280 --> 0:07:14.240 I think that the Fed is far more balanced, and 0:07:14.280 --> 0:07:16.600 this is their words, We're more balanced in the risks 0:07:16.640 --> 0:07:20.800 between unemployment going up and inflation going up, meaning that 0:07:21.280 --> 0:07:24.000 they are growing more concerned about some of this fraying 0:07:24.000 --> 0:07:26.560 in the labor market. We are already at their four 0:07:26.560 --> 0:07:30.360 point two four point zero percent target for unemployment this year, 0:07:30.600 --> 0:07:33.080 which just means that if we creep higher into that 0:07:33.120 --> 0:07:36.160 four point two zone, it could be the room for 0:07:36.240 --> 0:07:37.560 them to be able to cut. 0:07:37.400 --> 0:07:39.280 We're got to rip up the scripture, sure on it. 0:07:39.400 --> 0:07:42.640 I mean, YouTube's on fire. There's a there's a woman 0:07:42.720 --> 0:07:45.320 or guy here, I don't know which, and their daughter's 0:07:45.400 --> 0:07:49.400 watching you right now, and the daughter wants to be you. 0:07:50.120 --> 0:07:53.680 How did you get into the academics of finance? How 0:07:53.680 --> 0:07:55.400 did you get so damn smart? 0:07:55.440 --> 0:07:59.440 Down in Florida, Down in Florida, the caveat look. I 0:07:59.440 --> 0:08:02.200 think read a lot of books, be a voracious reader, 0:08:02.480 --> 0:08:05.200 and I think that the study of economics is the 0:08:05.200 --> 0:08:07.560 most beautiful study in a liberal arts education. 0:08:08.040 --> 0:08:10.320 You get mac theology book. 0:08:10.400 --> 0:08:12.800 I just told my nineteen year old that yesterday. 0:08:12.960 --> 0:08:15.800 What's the number one investment book that changed your life? 0:08:15.880 --> 0:08:18.000 I know mine, but you know what was the one 0:08:18.160 --> 0:08:21.440 where you said, hey, this is interesting. Yeah, no, not 0:08:21.480 --> 0:08:24.200 flying on one engine? What was the book? What was 0:08:24.240 --> 0:08:27.120 the book that you know? You're seventeen, eighteen years old 0:08:27.360 --> 0:08:29.000 and it was an investment book. Yeah. 0:08:29.080 --> 0:08:32.800 I think More Money than God is a fantastic book, 0:08:32.800 --> 0:08:35.720 sabashed Malaby about some of the great hedge fund investors. 0:08:36.200 --> 0:08:41.280 I think that books like Austerity, which is a fantastic 0:08:41.280 --> 0:08:45.640 book about politics and economics coming out of the year. 0:08:45.760 --> 0:08:48.679 For me, it was against the Gods. Peter Burnstein, you know, on. 0:08:48.720 --> 0:08:51.880 Risk and uncertainty, Wealth born Wisdom, Martin Biggs. 0:08:52.240 --> 0:08:57.240 Yeah, absolutely fascinating, talking about seeing through volatility essential reads. 0:08:57.320 --> 0:08:58.679 We're going to rip up the script. We're going to 0:08:58.720 --> 0:09:02.000 put this on single best Idea today with Kim Dawson. Here. 0:09:02.120 --> 0:09:03.720 This is how you do it, folks. You got to 0:09:03.720 --> 0:09:06.400 get kids interested in this. You throw the book at 0:09:06.440 --> 0:09:09.480 them and say no TikTok till you read the book 0:09:09.480 --> 0:09:23.880 that Kim Dawson says to read. Right now, we're going 0:09:23.920 --> 0:09:28.079 to migrate to the bond market and gauge. Here the 0:09:28.080 --> 0:09:35.840 coupon the side joins us right now with Franklin Templeton. 0:09:36.200 --> 0:09:39.839 So you're managing for coupon or can you actually give 0:09:39.880 --> 0:09:40.840 me total return? 0:09:42.200 --> 0:09:44.560 So you know, this year, I think total return and 0:09:44.600 --> 0:09:47.720 maybe for a while total return is not looking fabulous 0:09:47.760 --> 0:09:50.040 it is for coupon. I think we're getting to a 0:09:50.080 --> 0:09:54.760 stage where, just if you're just looking at high quality bonds, 0:09:54.800 --> 0:09:58.600 spreads are really coming so much in all the spread sectors, 0:09:59.240 --> 0:10:02.960 and if I I look at I actually see them 0:10:03.000 --> 0:10:08.200 as being pretty fair where they are between we've been 0:10:08.320 --> 0:10:10.600 I've been calling for four twenty five to four seventy 0:10:10.600 --> 0:10:13.880 five most of this year, and I have no reason 0:10:13.920 --> 0:10:15.520 to really alter that very much. 0:10:15.679 --> 0:10:18.280 Kathy Jones with us earlier was Schwaba. She just puts 0:10:18.280 --> 0:10:21.920 out on Twitter an amazing chart and this is something 0:10:21.960 --> 0:10:25.320 I don't look at, Paul, but it's basically ten or 0:10:25.360 --> 0:10:30.959 fifteen bond categories, bank loans, all the stuff Franklin Templeton does, Paul, 0:10:31.400 --> 0:10:33.120 I would have done better in cash. 0:10:33.600 --> 0:10:33.800 I know. 0:10:34.040 --> 0:10:36.880 That's what that's the challenge, exactly. All right. 0:10:36.920 --> 0:10:39.480 So now so in honor of Joe Mysak, who is 0:10:39.800 --> 0:10:42.160 enjoying his first day of retirement today, the Dean of 0:10:42.280 --> 0:10:46.280 municipal Reporters out there talking about the municipal bond market. 0:10:46.320 --> 0:10:49.920 I think I can get some really attractive tax equivalent 0:10:50.080 --> 0:10:52.720 yields out there. How do you view the municial bond market? 0:10:52.800 --> 0:10:56.000 We do like it. We like the municipal market. We 0:10:56.080 --> 0:10:58.800 think technicals are favorable. You know, it was very out 0:10:58.800 --> 0:11:02.120 of favor for most of law Stier enormously so, and 0:11:02.240 --> 0:11:04.160 this year it is coming back and it is one 0:11:04.200 --> 0:11:08.400 of the areas which we like. We think Actually, you know, 0:11:08.520 --> 0:11:10.600 to go back to what you and Tom are just saying, 0:11:10.840 --> 0:11:12.800 you could have done better in cash. This is true, yer, 0:11:13.160 --> 0:11:15.800 but you can't stay in cash. That's the risk, because 0:11:15.840 --> 0:11:18.760 you've got to start dipping your feedback into the bond market. 0:11:19.200 --> 0:11:21.880 My advice would be at least go out for short 0:11:22.000 --> 0:11:25.160 before you before you take the deep dive, because when 0:11:25.240 --> 0:11:27.760 the time comes, you won't always have the yields which 0:11:27.800 --> 0:11:30.800 you currently have now. Total return is something we've gotten 0:11:30.880 --> 0:11:33.240 very used to over the last twenty years of easy 0:11:33.280 --> 0:11:36.320 money and liquidity. But I don't think that that's what. 0:11:37.040 --> 0:11:40.240 That's not where the bond market necessarily is going to 0:11:40.280 --> 0:11:43.880 take us over the next several years. It's going to 0:11:43.880 --> 0:11:45.800 do what it says on the can. It's going to 0:11:45.800 --> 0:11:49.320 deliver a certain amount of income, ideally with less volatility 0:11:49.360 --> 0:11:52.720 than we're seeing right now, as markets adjust to what 0:11:52.840 --> 0:11:57.640 I think is the new state, the new state, which 0:11:57.679 --> 0:11:59.920 is a lot like the old state, which was from 0:12:00.120 --> 0:12:04.079 nineteen fifties until the global financial crisis. You know, bonds 0:12:04.120 --> 0:12:07.640 delivered decent returns, but not equity like returns. 0:12:07.960 --> 0:12:11.000 I'm looking at the Bloomberg US corporate high yield total 0:12:11.040 --> 0:12:14.400 return indext positive two point five to eight percent year 0:12:14.440 --> 0:12:16.600 to date high yield. 0:12:16.679 --> 0:12:19.080 That's your thoughts there, So high yeld. 0:12:19.559 --> 0:12:21.719 Here's the thing that high yield I think, you know 0:12:21.880 --> 0:12:24.600 if you manage it actively, So not buying the index, 0:12:24.720 --> 0:12:29.520 high yield can actually deliver a decent return, but once again, 0:12:29.640 --> 0:12:33.120 what you're really looking at is the overall yield that 0:12:33.160 --> 0:12:36.160 you're getting from it, and what you're getting in total 0:12:36.360 --> 0:12:38.640 from high yield bonds right now is between seven and 0:12:38.679 --> 0:12:42.160 eight percent, which relative to what you've gotten over the 0:12:42.200 --> 0:12:46.240 last couple of decades, is really not terrible. However, in 0:12:46.320 --> 0:12:49.080 spread terms, we definitely are tight, which means that the 0:12:49.120 --> 0:12:54.240 cushion against things like defaults is not is not very high. Therefore, 0:12:54.360 --> 0:12:56.280 troking my book a little bit here, you have to 0:12:56.280 --> 0:12:58.400 be active. You can't just jump in there and buy 0:12:58.440 --> 0:13:02.640 these indices because there's very very little cushion against defaults. 0:13:02.880 --> 0:13:07.080 I'm not anticipating a massive slowdown which would really get 0:13:07.160 --> 0:13:10.920 us going towards a space of high level defaults. We 0:13:11.000 --> 0:13:14.080 actually think corporate health is pretty solid right now, but 0:13:14.920 --> 0:13:18.199 I would not want to buy any indices, whether it's 0:13:18.200 --> 0:13:21.360 bank Clon's or high yield or investment grade at this point. 0:13:21.240 --> 0:13:35.320 Should on de side. Thank you so much joining us now, Leslie, 0:13:35.400 --> 0:13:40.760 Benja Murray, Chathamhouse on all that's going on in Washington prior. Frankly, 0:13:40.840 --> 0:13:44.640 she saw this coming, which helps out Leslie not so 0:13:44.760 --> 0:13:49.480 much now what But if we've forgotten that we're supposed 0:13:49.480 --> 0:13:54.560 to have contested elections. We had the Bush Royalty, the 0:13:54.559 --> 0:13:59.600 Obama Royalty, maybe the Clinton royalty times two. I guess 0:14:00.160 --> 0:14:02.680 have we forgotten that it's okay to have a Donnybrook 0:14:02.720 --> 0:14:03.400 to the convention? 0:14:05.320 --> 0:14:09.439 I think we've gotten very risk averse. American politics is tough, 0:14:09.520 --> 0:14:14.400 it's expensive, The electoral system is a very high bar. 0:14:14.640 --> 0:14:18.800 Name recognition is everything. So you know, you might be 0:14:18.840 --> 0:14:22.280 cynical about the American people. I'm not, but I do 0:14:22.360 --> 0:14:27.840 think the system and the institutions make people very verse. 0:14:27.880 --> 0:14:29.720 People at the top of the party structures. 0:14:30.160 --> 0:14:33.800 All the money that's being involved, Mister Cassenberg is driving 0:14:33.840 --> 0:14:36.440 the donor component of this debate in the last seventy 0:14:36.480 --> 0:14:39.320 two hours, and I get the idea that money can 0:14:39.360 --> 0:14:43.240 go to the vice president. Can these other candidates if 0:14:43.280 --> 0:14:46.520 we get to that, can they run to the convention 0:14:46.680 --> 0:14:49.840 in eight weeks? I believe it is with less money, 0:14:49.960 --> 0:14:52.480 or can they not run because they don't have a 0:14:52.520 --> 0:14:53.600 gajillion dollars? 0:14:54.840 --> 0:14:57.600 You know that, as we all know, the first the 0:14:57.680 --> 0:15:00.680 first thing that has to be decided is by President 0:15:00.720 --> 0:15:03.320 Biden whether he's going to run. If he decides not 0:15:03.400 --> 0:15:07.320 to run. Then, of course the entire field opens up 0:15:07.360 --> 0:15:09.280 in a way that you know, we don't have a 0:15:09.320 --> 0:15:14.800 good roadmap for because it's not the normal scenario. But 0:15:14.960 --> 0:15:18.480 could donors get behind a new candidate, Yes, of course 0:15:18.520 --> 0:15:21.680 they could. And this is the conversation that everybody is 0:15:21.720 --> 0:15:26.280 having pretty much around the clock since the debate. But 0:15:26.520 --> 0:15:29.320 so far, you know what we know, and I suspect 0:15:29.440 --> 0:15:33.160 we know a lot less than what's actually transpiring. Is 0:15:33.200 --> 0:15:37.280 that the Biden teamer are locking in. But watch the space. 0:15:37.440 --> 0:15:42.600 One more very significant stumble by President Biden that would 0:15:42.600 --> 0:15:45.880 be difficult to recover, and the very bad scenario is 0:15:45.880 --> 0:15:49.440 that that happens far too late to make a change. 0:15:49.480 --> 0:15:53.000 There are a lot of people now that think that 0:15:53.440 --> 0:15:58.160 they're the vote for Donald Trump is just going to 0:15:58.200 --> 0:16:01.760 be much stronger than people will stay home that we're 0:16:01.800 --> 0:16:04.280 sort of on the fence and thinking about maybe voting 0:16:04.320 --> 0:16:07.680 for President Biden. This is a very risky period and 0:16:07.720 --> 0:16:13.040 comes September when politics and students in America is sort 0:16:13.080 --> 0:16:16.000 of back from the summer. It's going to be a 0:16:16.120 --> 0:16:19.680 very difficult campaign season of very difficult politics. We're a 0:16:19.720 --> 0:16:24.040 little bit on hiatus through July and August, even with 0:16:24.120 --> 0:16:24.920 the conventions. 0:16:25.680 --> 0:16:28.360 Leslie Matt from the fifth floor writes in and just asked, 0:16:28.680 --> 0:16:31.920 was Thursday night just a bad night? Or is it 0:16:32.040 --> 0:16:35.960 something more? If it's something more, what role does a 0:16:36.000 --> 0:16:41.120 democratic I guess party have in kind of suggesting where 0:16:41.160 --> 0:16:44.280 we go from here? Or is it entirely up to 0:16:44.360 --> 0:16:45.080 President Biden? 0:16:46.480 --> 0:16:49.000 Look, I have two answers to that. One is that 0:16:49.920 --> 0:16:54.520 ken President Biden governed for four more years. Absolutely, he 0:16:54.560 --> 0:16:58.480 has an extraordinary team of people around him and pretty 0:16:58.560 --> 0:17:03.920 much every single issue that matters. He doesn't have to 0:17:03.960 --> 0:17:07.040 work twelve hour days. He can make decisions, but let 0:17:07.080 --> 0:17:09.960 other people really do the daily work and the hard 0:17:10.000 --> 0:17:13.040 work of governing. The bigger question, though, is can you 0:17:13.040 --> 0:17:16.359 get elected? And you know, was it a blip? It 0:17:16.400 --> 0:17:18.800 doesn't really matter if it was a blip. The American 0:17:18.840 --> 0:17:22.560 people of the world watched the so called blip. They 0:17:22.560 --> 0:17:25.080 will make their own decisions about whether it was a blip. 0:17:25.080 --> 0:17:29.639 And undoubtedly it is going to unsettle the confidence of 0:17:30.640 --> 0:17:32.919 very many people that were already concerned. 0:17:33.440 --> 0:17:36.679 A couple times this weekend the phrase smoke filled rooms 0:17:36.760 --> 0:17:39.640 came up. I mean, I'm old enough to remember sixty 0:17:39.680 --> 0:17:41.879 eight quite clearly. I guess we're going to redox it 0:17:41.960 --> 0:17:46.280 in Chicago. Define the smoke filled rooms Leslie vin Ja 0:17:46.359 --> 0:17:48.560 Murray of twenty twenty four. 0:17:50.080 --> 0:17:53.160 Now you're going to have to define the smoke filled rooms. Tom, 0:17:53.200 --> 0:17:55.320 I mean, I think it's just not being able to 0:17:55.400 --> 0:17:59.400 see through clearly to what's coming next. On the sixty eight. 0:17:59.480 --> 0:18:02.440 You know everybody wants to go back to nineteen sixty eight. Sure, 0:18:03.160 --> 0:18:07.119 there are some really significant lessons and parallels there. But 0:18:07.200 --> 0:18:09.840 history is, you know, history, what doesn't repeat itself, it 0:18:09.880 --> 0:18:10.400 does rhyme. 0:18:10.840 --> 0:18:14.440 Yeah, let's say, but I think this is really important. 0:18:14.920 --> 0:18:17.920 I'm sorry, but is there no more small field rooms 0:18:17.960 --> 0:18:20.840 because there's a monopoly of a family that runs a 0:18:20.840 --> 0:18:24.199 given party. I don't want to get a Democrat Republican here, 0:18:24.520 --> 0:18:28.680 but there used to be a conversation nationally with cigars 0:18:28.720 --> 0:18:32.600 in hand among a party. Is that like a fiction 0:18:32.800 --> 0:18:35.719 now where it's just run by the critics would say 0:18:35.760 --> 0:18:37.600 the president and the first lady. 0:18:38.520 --> 0:18:40.960 No, I suspect. And again, Tom, this is where we 0:18:41.040 --> 0:18:42.919 don't know everything we'd like to know. We know what 0:18:42.960 --> 0:18:44.480 the New York Times has said, we know what the 0:18:44.480 --> 0:18:46.200 Wall Street Journal has said, we know what the ft 0:18:46.320 --> 0:18:48.640 and the economists have said. The end of the day, 0:18:48.720 --> 0:18:51.760 those conversations are happening. Of course they're happening. They're happening 0:18:52.840 --> 0:18:56.680 out of sight and certainly out of hearing distance. And 0:18:56.720 --> 0:18:59.080 this is why, you know, everybody over the weekend who's 0:18:59.119 --> 0:19:01.760 talking is saying that the Biden team is locking down, 0:19:01.760 --> 0:19:04.080 that they're going to keep the keep President Biden on 0:19:04.119 --> 0:19:06.520 the ticket. And and maybe that's the case, but they're 0:19:06.560 --> 0:19:10.480 certainly not going to say, well, we're not sure. I 0:19:10.480 --> 0:19:15.600 imagine the volatility, uncertainty at a time of two major wars, 0:19:16.280 --> 0:19:22.920 a China threat, you know, a whole amount of global disarray, dysfunction, polarization, 0:19:23.000 --> 0:19:26.000 that's you don't send the signal until you until or 0:19:26.080 --> 0:19:28.520 unless you've made a decision there we will hear nothing 0:19:28.600 --> 0:19:31.720 from the top unless they make that decision. 0:19:32.160 --> 0:19:35.040 Leslie. What's going to happen at this convention. It seems 0:19:35.080 --> 0:19:36.600 like Tom and I need to pay attention to this 0:19:36.600 --> 0:19:37.480 convention coming up. 0:19:38.680 --> 0:19:41.000 I think we all need to pay attention to this convention. 0:19:41.600 --> 0:19:44.000 You know, we can imagine a couple of different scenarios. 0:19:44.080 --> 0:19:47.320 We can imagine that it just sort of goes talking 0:19:47.359 --> 0:19:51.200 obviously about August and not about July. It's a shame 0:19:51.200 --> 0:19:53.480 they're not reversed in terms of the timing. But August 0:19:53.520 --> 0:19:57.240 it could just go as as as planned, or we 0:19:57.359 --> 0:20:00.560 might be in a situation where we are looking at 0:20:01.359 --> 0:20:05.560 Josh Hero, Gretchen Whitmer, Gavin Newsom, you know a number 0:20:05.560 --> 0:20:09.960 of candidates that whose names are out, and about Kamala 0:20:10.000 --> 0:20:14.000 Harris obviously, you know, perhaps to staying as a vice 0:20:14.040 --> 0:20:16.879 president with somebody else on top. There are all sorts 0:20:16.880 --> 0:20:20.919 of scenarios and conversations going on, but that, again, we know, 0:20:21.200 --> 0:20:25.320 depends on the decision that ultimately President Biden opt Tom. 0:20:25.960 --> 0:20:39.040 We gotta go, doctor Vinjaminry, thank you so much. I'm 0:20:39.080 --> 0:20:41.120 a little congested, Lisa, please. 0:20:40.840 --> 0:20:42.920 Sir, very good transition. 0:20:43.080 --> 0:20:43.560 I like that. 0:20:44.200 --> 0:20:47.640 We were just talking about New Jersey transit raising prices. 0:20:47.920 --> 0:20:52.760 My goodness, let's make this transition so congestion pricing in 0:20:52.800 --> 0:20:54.359 New York. It could be getting a new life, but 0:20:54.480 --> 0:20:57.200 it could be okay, So state lawmakers, The New York 0:20:57.200 --> 0:21:00.560 Times says they've been privately this informal campaign to persuade 0:21:00.600 --> 0:21:02.800 Governor Holcal to move ahead with the tolls, but make 0:21:02.880 --> 0:21:07.359 them less expensive, so below the fifteen dollars. They say 0:21:07.400 --> 0:21:10.560 they won't mind adjusting that toll other features of the plan, 0:21:10.720 --> 0:21:13.760 because approving additional revenue could make up for the shortfall 0:21:13.840 --> 0:21:17.119 to the MBA MTA, but only if this program is 0:21:17.160 --> 0:21:19.439 allowed to move forward. So if it moves forward, they said, well, 0:21:19.520 --> 0:21:21.840 let's try and bring the price down a little bit. 0:21:21.880 --> 0:21:24.320 I mean, in London we talked about this. London had 0:21:24.359 --> 0:21:27.320 an initial fee that was half the fifteen dollars charge 0:21:27.320 --> 0:21:30.760 that's being proposed to vehicles in New York City. So 0:21:30.800 --> 0:21:33.360 they're saying, hey, if London, you know, brought it out 0:21:33.400 --> 0:21:34.280 at a cheaper price. 0:21:34.640 --> 0:21:38.639 Well, they've already installed all the monitors all around Manhattan. 0:21:38.680 --> 0:21:40.960 I mean, I don't know what that costs. But here 0:21:41.000 --> 0:21:43.200 on Lexington Avenue and sixty Street you can see them 0:21:43.359 --> 0:21:43.720