Midterms, COP27, and Morning Movers (Podcast)

Uh here in the United States, We're gonna check in with one of those, Dr Julie Norman, co director of the u c L Center on US Politics at University College London. She's got a PhD from American University. That's kind of good, but the real claim to fame from my perspective is she is a graduate of Duke and we are one of our Katie. Yes, we won last night's for one Another. So here comes Duke and here

comes Dr Julie Norman. Julie, So from your side of the pond, you guys have had a lot of going on political wise in the UK, but I'd love to get your sense of just kind of what are really focusing on here in these midterm elections. Well, yeah, I mean it's it's hard to have a distraction for US politics. But at UK, the UK politics did did take our attention for a while, That's all I must say. But but I mean we we really are focused on the U s. Of course this week everyone over here is

watching the elections very closely as well. Um, you like everyone expecting Republicans to take back control but at least part of Congress, you know, if not all of it. And you a lot of people in Europe and Allies especially wondering what this means for US foreign policy and also just for democracy in America more broadly and by association, democracy for the whole world. So I think a lot

of things are at at play here. I think most voters are, of course, focusing more on inflation, economy, the more day to day issues, but the world watching this election is seeing some of these, uh, these bigger issues play out as well. And I mean, if you had to rank them, you just ran through some of them. Obviously from the perspective of a markets journalist, inflation is a pretty big deal from my perspective. But what's on the ballot here? What is the most pressing issue from

the perspective of the average American voter right now. Well, I think obviously disinflation and this rising cost of living. I mean, that's something that no one can escape, and people are just feeling at this day to day level. You know, Democrats have obviously tried to push the democracy message. I think abortion gave them a big bump in the summer.

But in terms of what is actually going to get voters out to the polls and actually convince those swing voters, those who don't already know how they're voting, is going to be the economy and how people are feeling this on a day to day basis. So, Julie, you know, I guess we're gonna wake up tomorrow we'll know some stuff, but we've been told by a lot of folks that follow the stuff that we're not gonna know for several days on some of these races, but presumably a lot

of the focus will switch tomorrow to election. How do you think, you know, what are something that takeaways from maybe what might be a Republican sweep here? Uh today? What does that mean for the Biden administration? Yeah, so I do think you know, this is obviously what happens

today will lay the groundwork for four. Um. I think it will really be sort of a rough rundom on Biden, of course, and really start serious conversations about if he will run in twenty four and what that means for him, as we've heard today a likely announcement sooner rather than later from Trump, and what that with these midterms will mean for for his momentum perhaps going forward with the candidacy, and of course just the reality that there will be a lot of a lot of individuals who doubted or

denied the elections in positions of power at the state

and federal level going into four. For Biden personally, though, you know, he's going to be facing two more years of at best gridlock and at worst, you know, constant attacks likely from the House in terms of investigations into his son, Hunter Biden, his handling of Afghanistan, the handling of COVID, really anything that Republicans can use to keep the focus on what has gone wrong with the administer station leading up to four and trying to throw an

agenda setting in place. So it's going to be an uphol battle for Biden, but one that I think they have to have been expecting to some degree, and there is so much to keep track of tonight. If you're a political ju junkie, this is your night. But I'd love to hear what race would you love to know the outcome right now? If you could know the outcome of any race at this moment, which would it be?

I would probably say Pennsylvania and the Senate race in Pennsylvania especially, There's there's a lot of races to choose from, as you alluded to, but this showed on between Federman in Oz it is neck and neck. It's in a crucial swing state in one that I think is representative of a lot of the American population in general. And I think it's a test for Democrats to see, you if they have a different kind of candidate, can that

work for him? Even if that candidate you lends towards more progressive policy views that that maybe some in the middle don't agree with. So I think that race especial Lee is going to be very important for swinging the Senate and it's very important for both parties to read what does this mean for the kind of candidates we

put up in the future. Julie, You're in London University College, London, what are the folks on the street that you talked to, what do they think about our politics in this midterm election and kind of where we're going. Yeah, someone said to me today said, it's it's a bit farstical, isn't it? Just you a bit of a circus and stuff? And and again this is coming out of a rather rowdy

fall here in the UK. So I think there is a lot of you know, there's a lot of I think confusion, if you will, about the potential for Trump to make this strong comeback and how he still has that hold of a grip on the party. I think there's some concern around Biden and what kind of leader

he can or will be in the future. And again, you know, I think a lot of the world still looks to the US as this uh new kind of model, this pillar for democracy, and this kind of concern that if that even wobbles a little bit or appears a little bit shaky, what does that mean for everyone else? A great stuff. Dr Julie A. Norman, co director of the u c L Center on US Politics at the University College of London, and a Duke Blue Devil Top seven.

Let's the United Nations Climate Change conference taking place in Egypt? Is that right, Katie? Egypt. That's so we've got some Bloomberg News Bloomberg Intelligence folks over. There's a lot going on. I want to check in with Rob Barnett. He's a senior analysts team lead for European Energy Research at Bloomberg Intelligence. Um. Rob, thanks so much for joining us. You're based in London here. What are you looking for? If anything out of COP twenty seven or is this is gonna be a lot

of rhetoric coming out about climate change. I like the way you described it, rhetoric. At the end of the day, this kind of stuff maybe moves the needle, but what I really look at is a bottom up build out of policies that we're seeing. So in the US you've got the Inflation Reduction Act, that's the real deal. That's what matters. In Europe we've got the Repower you package.

These kinds of things matter. Whether we get some kind of grand global Kumbaya kind of idea around reducing emissions out in you know, that's great, but the real stuff that matters is the near term policy push as opposed to these very long term emissions goals. So Rob when you think about the near term policy push, get specific. Give us some names here among the clean energy names that I know that you cover, which companies have the

most at stake here or the most to gain. Well, look, I think the clean energy space doesn't need policy as much as the policy makers think they do. The win solar industry are generally growing very fast. If you look at SunPower, which reported this morning sixty growth in the top line in three Q solar edge just yesterday fifty pcent growth in phase at the end of last month growth.

The solar industry is growing incredibly quickly. Now, the wind industry a bit more tepid here in the near term, but we think there's a lot of potential for a company like vestas there, the world's largest wind turbine manufacturer, to really pick up the pace and grow a lot more quickly. In fact, we think consensus is way too pessimistic about the growth opportunity that they have in front of them. Alright, So, Rob, I know you're esconsed over in London, but we do have some elections here today

in the United States. Does the what's the energy industry? What are they hoping for here in this midterm election. Well, I think we're seeing a real divergence in the US in terms of the Republican and Democratic views on the right way forward. But I would say that it's very unlikely that I think the future Republican Congress would roll back, say the Inflation Reduction Act. That that's there, those subsidies

are likely to stay in place. And you've got to keep in mind some of the sunniest and windiest places also happened to be Republican districts. So you know, I think it's the same kind of thing. You know, theoretically, do you do you need the policy to grow quickly? Maybe you actually don't, but you're not gonna turn it down. And in the places that have Republican lawmakers, they're certainly gonna want to have those dollars flowing into these big

kind of solar and wind infrastructure projects. And Rob I'm going through the headlines ACTA COP seven one from this morning, Mark Arney sees a quote wall of opportunity UH in renewable energy assets. Mark Arney, I mean, many might know him as the former Bank of England governor, but he's not also the vice chair at Brooklyn Brookfield Asset Management He's also co chair of the Glasgow Financial Alliance for

Net zero, so he's involved with the space. But the idea of a wall of opportunity in clean energy, what are the best parts of the wall. To get a little more specific from that comment, is it wind? Is it solar? Which looks better right now? Well, there's no doubt that the near term fastest growing segment of the energy space, no matter what way you cut it is solar demand is just growing so quickly. There when has a lot of potential. And you bring up Mark Arney.

You know the great thing about COP twenty seven and everything that's being discussed, there's this idea about whether one point five degrees is still possible, And I would say, you know, maybe it is, maybe it isn't, and and

maybe the discussion is really around two degrees. But either way, you're talking about billions now, excuse me, trillions of dollars worth of investment that's gonna occur over the next few decades in the energy space, and increasingly that allocation is gonna go towards solar for sure, but also when, and then I would also be looking at things like hydrogen. We know that wind and solar are in admitting they're not gonna be the only solution. There's gonna be other

stuff in play. So keep an eye on this space. It's gonna grow so quickly, hey Robert. But you know, in the near term here again, you're in London, so you're you're closer to what's happening in terms of Russia and Ukraine and many fallouts from that conflict, most not or you know, notably the energy fallout and the disruption and energy supply. You know, we're moving to a greener energy grid, but boy, you still need the fossil fuel stuff.

We're gonna need that for another couple of decades probably. How do you balance that? How are some of these energy policy makers trying to balance that? It's a great point, and I like to consider myself in the energy realist camp. Just the fact that you need all of this um new wind and solar does not preclude the fact that today we are in very precarious supply demand balanced situation for both oil and gas, and so we need more

new supply that's ideally in friendly countries. And so I think you're right, and that might be a question for the US Congress to ultimately consider right. I know the Republicans have a very uh much more pro supply perspective on on some of the fossil fuels, and some of that could be really useful in the near term. We used to talk about natural gas as a bridge fuel. It's kind of the low carbon cousin of coal or oil, and right now it's got a bad rap, particularly because

of the geopolitics around Russia and Ukraine. But the bottom line is that in the near term we are going to continue to use a tremendous amount of fossil fuels. And uh, you know, even if peak demand for those fuels is on the horizon, Uh, the decline rates aren't gonna sorry, excuse me, the demand is it going to roll off so fast that it will exceed the natural decline rates. So you've got to invest in the space even if demand is going down. All right, Rob, good stuff,

as always Rob Barnett. He's a senior analyst, is a team lead for our European energy business over there a Bloomberg Intelligence. Uh, he's been covered into the energy business for a long time. It's got a great sense of the business, the economics of the energy business, as well as the policy and he has a haircut that I do not approve of. Katie. I mean, ever since I've known guys, you gotta get it cut. You know, you're

pretty clean cut. I'm pretty clear cut. His is out there, folks, so um, but he knows what he's talking about when it comes to energy. So that's how we like chatting with him. Mandyep Seeing technology analyst with Bloomberg Intelligence. And Dan I've senior equity analyst with Wedbush Securities. Thanks gents for joining us here a little technology round table here. Hey,

Dan'll start with you here. Um, Twitter, I mean, I'm sorry, lift uh, Uber, I don't know, how do you think about this business model in a in a time where we've got inflation all over the place? How do you think about those users? Those stories? Yeah? I mean, but

I think Uber they're navigating well. I mean I think you saw that with earnings and this actually business model is starting to play out positively, improfitable with they're essentially the little brother Uber, and I think over their skis it was a disappointing quarter and there's some potential return around, but I think there's a queer deination now between the

business models. Then you will burn with, But Dan, what's interesting to me if I look at the stocks that you cover, I see a by rating on Lift, I see a by rating on Uber, And I'm hoping you can square that circle for me because it seems like a pretty zero sum game from my seat. If you're bullish on one, maybe your barish on the other. But is that to binary? Yeah, Look, I think it's a little g binary because our view is to play ride sharing overall domestic and globally. They are the clearly the

two best ways to play it. I think with I do think this is a bit of an overreaction terms of what we're seeing in the stock, but ultimately Uber is our best way to play the ride sharing globally, and I think it also on food delivery, and it's profitable and I don't necessarily viewed as a zero some game, but no doubt, I mean with this is a pivotal few quarters ahead for them, and I think last night was clearly a bit put in the penalty about Yeah, a man deep, you know, one of the key pillars

to the economic model for you know a lot of these gig companies, most notably these ride sharing companies, is the classification of their drivers. Are they independent contractors or are they employees? Where are we as an industry there in that regards? Well, right now, you know, both Uber and Lift are treating their drivers as independent employees and they are paying them out a good take gread you know, you get and they get paident of the bookings that

they these companies are generating from a ride. But look even then, you know, when you look at the cost structure of these companies, whether it's Lift or Uber, is much bigger, so they can spread it out. But in the case of Lift, you know, the fact that g n A intensity is still it makes you wonder, you know, why are there so many costs? And they talk about layoffs and you know, off setting it to generate. It's just a deepit dub positive um. But clearly there is

something fundamentally wrong in the business model. It's because of the high variable cost. Maybe they are learing in a lot of drivers subsidies to boot supply on the platform. That's what it felt like last night that even though pricing was a tail, when they're able to raise prices, but then their gross margin is getting compressed and they

have to lear and drivers subsidies to boot supply. So clearly variable costs continue to pressure their margins, and I don't know if they can get to the billion dollar and adjust a deepit da that they have laid out for well man deep. That's what I was going to ask, is what can Lift do? I'm looking through you know, the Bloomberg news right up of last night's earnings or

this morning. It's been a long day already, but cutting of staff for example, Uh, is that the right sort of direction to go in or what would you suggest Lift do? At this point? Well, so this, uh, I guess the run way for Lift is not very clear.

There seems to be a writer sat to Asian. They missed on their writer metric, which is a key metric, And at this point of time you have to ask yourselves, can they partner with somebody on the autonomous side that could really kind of generate this top line runway which

everyone is looking for. But beyond that, you know, they had the best set up in terms of reopenings, you know, everybody traveling, and still they talked about top line decelebrating to almost whereas Uber, which is three times bigger, is talking about you know, growth. So they're clearly losing market share in the US, but I think any partnership on the autonomous side could be something that investors Matya, Kay, did you know that Dana Ives is a proud graduate

of the Penn State University. I feel like I actually did know that from filling in on this show. They had a good win at Indiana last week, and now we hosted Maryland this weekend. Dan, how do you feel

about it? I would I think I think we got three, you know, and then ultimately New Year six in terms of there, so I can you you lost to Michigan Ohio State, obviously to the best in the country, Dan, Tesla, I mean, if I'm a Tesla shareholders, I love the car, I love the story, But I got a CEO who just bangs me over the head every day, it seems like. And now he goes out and spends four billion dollars

on Twitter. What are you telling your clients? You've been a strong, longtime supporter of the stock here, what are you telling your clients these days? Look, it's this Twitter circus show continues to be in albatross on Tesla stock, and I mean, obviously it's test of being down since

the Twitter deal. Look, I think there's two things. I think one, there's worries that the brand of Musk is deteriorating, and we're seeing a globally not just what's happened on Twitter, but how that could impact Testsa in just a view in his arms race. And and the second thing is just the tension. You know, he's focused on the factory for he's not focused on Testa in terms of as

a perception. Instead, it's more on Twitter and that's sort of celebrity billionaire and and it's not resonating well in a white narcle market. All right, Dan, good stuff, appreciate it. Um. Dan's got an over our perform rating on the stock, has been a strong supporter. He's been right. Uh. He's got some headwinds though for Tesla this year. Dan ives managing director, Senior equity analyst for what Bush Securities and

man Deep singh Uh. He is our tech analyst at Bloomberg Intelligence, covers all things on the tech space along with h on a rock run and and their team there at Bloomberg Intelligence, we get y'all covered from a bi perspective. It is election day, uh in America. Policymakers obviously paying close attention to what happens here in these mid terms and what will mean for policy over the next couple of years heading into the presidential election. We

check out with Nathan Dean. He's a senior policy analyst covering in the United States and Latin America for Bloomberg Intelligence. He's based for Better or Worse in Washington, d C. So he's close to all the stuff. Nathan, you talked to all these Beltway types. What's the thinking today and what's the thinking tomorrow. So the thinking today is is that the House is most likely going to go to the Republicans. Um on the Senate, you know, generally the feeling in the last week is that the GOP has

done some in roads there. But I would just definitely say that today's not election day, it's election week. What mean. What I mean by that is, uh, we may know who's gonna have the House of Representatives by tonight, but I'd be really shocked if we wake up tomorrow morning and we know who's in control of the Senate. It could go to the end of this week, or in Georgia's case, it could go all the way to January. All the way to January. I mean how likely is that?

What's your base case on what the timeline is here? So you know, I think we're you know, with the House, I think we'll know tonight. I think that the Republicans will get enough that will know tonight. For the Senate, you know, we'll have a good indication of where things are going. I mean, usually the House trends will incorporate into the Senate trends, and so I think you'll have like a general feeling this week of what likely is

going to be the case scenario. And you know, I think if if most people were to be given truth cerm at the moment, they would say that they think

that the Republicans are going to take the Senate. But what you know, these races are going to be extremely tight, and there's a lot of mail in ballots that have to be counted, and in some of these states they can't start counting until after the polls closed, so it may take a couple of days for U states like Pennsylvania to catch up and finally give us an idea. But you know, you definitely see the Republicans. I think

the general consensus is around seats UH in control. All right, If that's the case, Uh, Nathan, what's again, what are the policy types down on Washington? What are they thinking can get done? Should get done? Needs to get done from a legislation of policy perspective over the next couple of years. If that's a fact the makeup, So you're gonna see increased good luck. But you know, increased good

luck it's been around since two thousand and ten. You know, you think about the Tea Party and Nancy Pelosi coming in under the Trump administration. What changes is you no longer have these economic broad fiscally stimulus bills, you never you no longer have reconciliation types. But what happens is is that the legislation that gets debated gets pushed down to more sector levels least think marijuana's box or cryptocurrency, etcetera. And then what happens is it gets bunched up into

these government resolutions. So every three to six months, the government faces a deadline and there's this huge debate and so forth like that. But I would say that the most important things that we are telling clients right now is to watch this dead ceiling fight. It's going to come likely in September or the third quarter of next year, you know the incoming or soon to be incoming. If you think the Republicans are gonna win Speaker the House,

most likely will be Kevin McCarthy. He's already said that he wants to use this as leverage. Certainly a lot of political brickmanship. We've been here before, but both the fixed income and the equity side could be exposed. Nathan, I'm so grateful to have you on for so many reasons. One of them, though, is because I know that you can speak intelligently about the cryptocurrency verse. And we have some huge breaking news. Crypto exchanged Binance, that is the

world leader. It's going to buy rival f t X dot Com. That is according to a tweet from f t X CEO Sam Bankman Free. They said that he said that the two exchanges reached an agreement on a strategic transition transaction with finance. Terms are undisclosed. I can hear just thousands of Bloomberg's reporters trying to find out what those terms are. But if I look at spfs tweet, as he's known, he says, this of course is pending. Do diligence, and Nathan, let me know if this is

too far outside of your realm. But what does due diligence even look like here? You know that one is you know, these are two privately held companies, both not you know, you know, Bahamas and Asia based and so forth like that. So the due diligence, I don't think it is anything that you know, we are going to know right now. I mean, the Bloomberg reporters, as you speak,

are going to go out there. What I can say though, is that this is a game changer when it comes to policy efforts in Washington because f t X, and specifically Sam Bankman Free was a big proponent of coming here to lobby. And so if you're looking at the stable coin bill that's over at the House Financial Services or the Digital Commodity Consumer Protection Act which is at the Senate ad Committee, we anticipate both of those bills

coming back next year. The main question for us on the policy side is is ft X or binance or is somebody else going to take up the mantle? Are they going to be able to continue to push policymakers to do this, And so it will be really interesting to see what happens in the first quarter of next year here in Washington. Because f t X was such a big proponent of that bill. Do you think this

puts more fire under Washington? I mean, the debate in the crypto market has been who actually oversees the crypto market in the U S. You just have a bunch of letters from the SEC to the CFTC, maybe Congress, no one really knows. Now you have this huge behemoth, like you said, one based in the Bahamas, one Asia based coming together creating this monster. I mean, do you think that this puts another fire under US policymakers to figure out who actually oversees this and can we get

some legislation here? So I'm not sure if it puts new fire under policymakers, but it's certainly brings additional focus to it um because like you said, I look, I

don't think cryptocurrency is going away. And if you look at the bills, the stable Coin Bill that hasn't been released but is under discussion over the House Financial Services Committee and the Senate agg bill, they do things like, you know, affirm bitcoin as a commodity, affirm etherorium as a commodity, give platforms like coin based or now bananced ft X the way to register with the SEC or the c FTC. None of this is really controversial from

a bipartisan perspective. So as long as the crypto industry continues to push for this regulatory framework, I still remain confident that these bills can get done. The one thing, though, and when this comes back to the election, is that if the Republicans take the Senate, I think those bills speed up in terms of timing because as somebody like schre Brown, the chairman of the Senate Banking Committee, wouldn't

be able to oppose it. All right, great stuff as always Nathan Dean, he's got that Washington DC policy stuff just nailed down. He's the senior policy analst for Bloomberg Intelligence. He is based in Washington. Election day, Uh, Katie, you know we learned a long time ago. It's the economy stupid. That's kind of the thing. And I've heard that as well. Um. Not a political junkie, but I have heard that. And if you look at President Biden's scorecard, it's probably better

than most people would give it credit for. But you really need to look at the numbers. And we have somebody who does like to look at numbers. That's Matt Winkler. He's the founder of Bloomberg News. He joined us here on a Bloomberg Interactive broker studio. He's got a column out today saying the Biden economy is second only to one at the mid terms. So Matt talked to us about the Biden economy, how does it stack up? So

thank you great to be with you. Uh, you know, we are Bloomberg and so uh, we are always looking at the data. And so given that, as you said, the election is if you like, a referendum the mid

term on the economy, my colleague should pay. And I looked at more than a dozen measures of relative prosperity going all the way back to the seventies nineteen seventies, and on most of these, in fact, Biden is in fact outperforming UM the last six of the seven predecessors UM everything from GDP to non farm payrolls, for example, Biden is excelling. And uh, you know that's just the reality, if you like. And but does the average American feel that?

Do you think, because as you make this point in your column, that inflation is so hot right now, it's basically shredded returns across stocks and bonds. If you think about what that has meant for retirement accounts. I mean, as inflation just so a big front and center issue that that's being overlooked by voters. Well, I think part of it is UM. Our profession journalism has focused NonStop on inflation, so you know, you hear it over and

over again. But if you look at the reality, UM, many in our profession were saying, we were in a recession this year, very prominently. UM. But when you've got unemployment hovering at fifty year lows and not just a one month two month wonder people have jobs. And then you put together the if you like, all of the very generous social um benefits that came out of COVID nineteen. UM. You know, for example, UH, Americans are much better equipped

today ever to weather this spike in prices. You've got UM, the as I said, COVID nineteen measures that allowed consumers to build up an enormously high cash cushion. Checkable deposits, for example, for households and nonprofit organizations rose to four point eight nine trillion dollars as the end of June, from one point one six billion a trillion at the end of two thousand nineteen. So that's a big if you like, difference, and that answers your question about are

they better off? And the answer is yeah, inflation has been high, but again the cushion for that is also unprecedented. So yes, Americans have been better off. And if you take the media um out of it, uh, probably they would be saying they're better off. But the fact is we're not in a recession um and the economy is still robust, which is why the fittest is raising interest rates.

And just on the inflation front, inflation kind of peaked, so it would seem with the June number of nine point one percent, it's now more than a percentage point below that. And if you ask every economist that you talked to every day, day in and day out, they're telling you that the inflation alarm else have softened significantly since the summer. And and one of your charts in your piece there you talk about the surplus or deficit as a percentage of the GDP, and that's where the

Biden administration ranks first. No one's done it better in terms of reducing our deficit. And you know, I know the President talks about it, but that's just probably a financial and economic issue that most Americans probably can't really

grasp it. It's more of that's something for years down there. Well, except for the fact that the Republicans persistently bring it up, and they have repeatedly, and as you say, the fact is the almost ten percentage point decline in the federal budget deficit is a percentage of GDP to five point four percent from fifteen point six per uh. That's unprecedented. And you have to go back to Clinton Presidents Clinton and Carter, who reduced the deficit two point four percentage

points one point one percentage points, respectively. Having set all that, the deficit went up under Donald Trump, it went up under George H. W. Bush, it went up, you know, under Ronald Reagan, Um, it went up under Barack Obama, and it went up under George W. Bush. So this is an issue that Republicans persistently raised, and Biden has a very credible record after the mid terms if the Republicans have the edge saying well, don't look at me, I'm the one who did more on this issue than

anyone has. Right. Interesting stuff, all right, Matt Winkler, great column talking about the President Biden here at the midterms and his economic policies pretty darn good when you're you know, you could compare him to recent presidents. That's Matt Winkler, editor in chief Emritus and Bloomberg News, joining us here in our Bloomberg Interactive Broker Studio. As always, he doesn't mail it in, Katie. We have some folks to mail it in, but Matt's not one of them. He tends

to come in, uh and show up, so we appreciate that. Well. It is mid term election day in America. A number of key states have very very close races that will ultimately have an impact on Congress, the balance of power and Congress as well as certain state houses as well across the country. Let's round table this thing get kind of just get some perspective here. Liam Denning, he's an opinion columnists with Bloomberk. He's gonna join us to talk about It's got a recent column out there saying the

five dollar gas is really affecting the midterms. Let's think think broadly defined inflation. And then calumnist John Author's also joins to get his sense of how this market may react going forward and what maybe a little bit of a shift towards the Republican Party. Liam Onna start with you. You've got your column out there. I think it kind of goes to that issue. You know, you can talk about reducing the federal depths, that all you want, if

you're Joe Biden. But at the end of the day, it's what I'm paying at the pump, what I'm paying at the supermarket. That that's a tough challenge. Yeah, I mean, I think it's a fact of American politics that any incumbent policy takes the blame for where pump prices are, and you know, even though they generally lack any means of affecting them in the short term. Energy is definitely a high up on the agenda in this in this election.

If you look at the the Pew Centers holding of of registered voters, it's it's interesting, actually energy is up there as as a as an issue. It's above violent crime, it's above immigration, it's above abortion. Um, it's also curiously the only one on which the same proportion of Republican and Democratic voters agree, it being a high profile issue. And what I was trying to do with this with this column was to say, you know, obviously we've seen

high gasoline prices this year. They hit an all time peak of average average level of five bucks in the summer, And I was just trying to show that psychologically that is damaging for the Democrats. But actually when you show show in the context of average incomes, um, you know, the dad to the American wallet is quite significantly below what we've seen in prior price spikes. Yeah, I'm not going at that same number. You're looking at that five dollars back in June. We're now down at about three

dollars and eighty cents. It's come down pretty substantially, but still maybe the damage was done. In terms of a narrative and John Arthur's you know, it appears that um, you know from some of the rhetoric and some of the reporting I've seen that you know, there's a chance that this election, this midterm wal till more towards the Republicans. If that is in fact the case, how do you think markets will react, Well, it would be a very big surprise if if the Republicans don't at the very

least win the House. And if that isn't very clear by the time we go to bed tonight. Um, I therefore think that's that's largely in the price. We're probably not going to see that big a reaction to it. I think what would make for much more interesting outcomes

would be exactly how policy towards Ukraine changes. I've heard various straws in the wind suggesting that if there is a Republican control of Congress, it becomes that much harder for the administration to support Ukraine all the way because there are these currents within the Republican Party that that that are opposed to that are opposed to conflict with Russia, and that that might mean that Zelinski in Ukraine comes under more pressure from the States to um to sue

for peace. That would be market positive any number of We don't have time to go through the huge issue of whether that's actually good news, but in terms of the short medium term for markets, that would be very market positive. This leads to some meaningful resolution of the the Ukraine conflict sooner rather than later. I think that's the single biggest thing. The greatest concern plainly would be playing games with the debt scening. UM, So all third

years of presidential cycles are great um. That's lots and lots of sell side people have pointed out one exception where it only just got positive right at the end of the year was twenty uh twenty eleven, and that was the year of the debt ceiling debacle when SMP actually downgrade the US Treasury debt. If if the Republicans are serious they're going to try doing that again, that would be a problem. I'm not sure they are, but they're talking, is that they're prepared to do that. Hey,

Lia'm going back to you. I'm interest thinking about it again. Inflation broadly defined, it's it's a it's a headwind certainly for this administration, in for the Democratic Party here. But then when you think about just the energy and the five dollar guests, you know, you just wonder why President Biden and the Democrats continue to hammer on big energy, you know that whereas they presumably could be the solution here to the problem. Well, I think Biden is is

caught between two competing objectives, right. One is one is this uh, this sweeping green agenda that was an integral part of his platform. And then the other is the reality that you know, in the meantime, while you're waiting for the energy transition to come along, you're going to face periodic energy crisis and you're still going to be

relying on the incumbent energy system. And so we've seen, I think Biden, you know, swing between you know, trying to cajole the domestic exploration and production sector into producing more oil and then realizing that, um, you know, his tools for addressing pump prices are fairly limited them resourcing to the rhetoric of blaming the industry for not doing more.

Um you know. I think part of the problem here is, as I said, you know, even five dollar gasoline is not as big of a bite out of disposable personal income as it used to be. I think the big problem the Democrats face is that this has been the single this year has seen the single biggest jump in terms of the proportion of disposable personal income taken by gasoline on record, and that's data going back to the late nineties fifties. I think it's the whiplash effect on

consumers that Biden and the Democrats fear. Yeah, I think that's okay, a giant real quick thirty seconds. Are you in the camp that says grid luck is good for markets, It's almost always good for bonded markets because it tends to mean that you don't spend. That's why the critical question is whether the Republicans would really do brinkmanship over the debt scene. Again, I would be more cautious about

whether it's really so good for stocks. Um. There are things that the federal government can do that will actually benefit some companies. Uh, And there are times when you do want clarity and harmonious government. But the bonds, yes, good. All right, We'll see how it plays out. We're not gonna probably won't know tomorrow morning, but certainly over the next several days and maybe even weeks. Liam Denning, he's

a Bloomberg Opinion calms covers energy, amongst other things. Joining Us, as well as John Author's Bloomberg Opinion calumnist Join Us gives a sense kind of how this may play out from a market's perspective on this election date. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. Pet On Ball Sweeney I'm on Twitter at

pt Sweeney. Before the pod asked, you can always catch us worldwide at Bloomberg Radio m