Transcripts For BLOOMBERG Bloomberg Surveillance 20161108

It is election day in the u. S. 226 million americans cast their ballots in one of the most among jewish u. S. President ial elections in recent history. One of the most tumultuous u. S. President ial elections in recent history. Hillary clinton held a narrow lead in most preelection polls. Her campaign has and armed by federal probes into her handling of classified emails, questions about her familys foundation, and public doubts over her trustworthiness. Republican real estate magnate and reality tv star donald trump, defeated 16 primary opponents and promises to drain the swamp of washington corruption. He has faced criticism for his treatment of women and denunciations of immigrants. We bring you the analysis you need on this historic day. I am joined by bloombergs politics and economics editor, Michael Mckee. In london, we are joined by Alexander Friedman for the first half of the program. Alex, good to have you on the program. First, lets get to the bloomberg first world news. This is nejra cehic. Nejra production declined more than expected in september. Production fell 1. 8 from the previous month. The reading, which is typically volatile, compares with the median estimate for a 0. 5 in a Bloomberg Survey of economists. That the latest sign europes biggest economy slowed last quarter. Opec has raised its forecast for Global Oil Demand next year and through the end of the decade. According to the producer groups annual world oil outlook, demand will reach 95. 3 Million Barrels of oil a day in 2017 as the organization anticipates cheaper crude will spur consumption even as Economic Growth slows. Chinas exports fell for a second straight month in october on tepid global demand. Overseas shipments dropped to 7. 3 from a year earlier in dollar terms. Imports slid 1. 4 , leaving a trade surplus of four to 9. 1 billion. The yuan has depreciated since last august, but failed to boost exports. The u. K. Chancellor, philip hammond, is facing a 25 billion pound hole in the public finances following the brexit vote. That is the warning from the institute for fiscal studies. Its a diminished growth will result in 31 billion pounds of lost tax revenue only partially offset by a 6 billion pound reduction in spending. News 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am nejra cehic. This is bloomberg. Francine this is your data check. You are seeing Less Movement than the last 10 days. A hint of caution. Gold still rising. Volatility down a touch, 0. 03. Here, 220 6y million americans eligible to vote today, one of the most divisive president ial elections in living memory. The leader inherits leadership of the biggest of the country and its global role in geopolitics. Lets see how the candidates and their supporters made their final appeals to voters. Hello, pittsburgh. Mr. Trump florida is my second home. If hillary wins in North Carolina, she is president. Mr. Trump in one day to you believe this one day, we are going to win the great state of North Carolina. President obama michigan. This is the most consequential election of our lifetime. This is obama tomorrow is the election, but that is just the beginning. We have to heal this country. Mr. Trump we are a divided country. People do not realize we are an unbelievably divided country. President obama it comes down to you. It is out of my hands. It is in your hands. Vote. Get your friends out. Every single vote counts. We have a great panel of guests today. Joining us from london, Alexander Friedman. In new york, jim, chief global strategist at offshore group. And politics editor Michael Mckee. Mike, lets kick it off with you. Today, we find out. There are battleground states. The polls are closed. It seems like clinton could win this. The way. Breaking, she will be able to win this possibly in the east coast, like her husband did in 1992, before it got to the midwest. He had almost accumulated enough votes to win. First results are in. Donald trump has the early lead. There are three small towns in upstate New Hampshire. You should go while you are here in the United States. Its still not harts location, and mills field vote at no field the three towns vote at midnight, according to tradition. Trump disfavored, though hillary is still favored in the polls overall in New Hampshire. You heard tim kaine say that you should get out and vote. You should get out and vote. It is very important. 200 35 million americans eligible to vote. Only 129 million voted in the 2012 president ial election. A turnout of 54 . The brexit vote, which we covered in london 72. 2 voted. You do not want the brits to embarrass us. Get out the vote. Francine the number of people who turn out at the polls is quite low compared to most western countries. Alex, you have money in the game. How do you hate yourself before we find out the news of this election . Of peopleink a lot are taking risk of the table. Lets unpack the four scenarios that are relevant for investors. The most extreme is trump wins and i think you see a selloff and pretty much all risk assets. The only thing that probably goes of our government bonds, cash, gold, maybe swiss franc, yen. The second most of stream is, nobody knows who wins. You have the same result in terms of markets. More likely scenarios based on the polls are hillary wins. The question is, does the senate and the house shift . It does not look like the house is going to shift. The senate is really the question. That exposes where the market could have some slight downside against what is already baked in. Even if hillary does win and the senate stays divided, and perhaps on the republican side, i think there is a limited risk rally. High itust 3 off the the s p. Maybe we see a little bit of relief, but not much. Mike historically, we have seen the markets move on the election, and often go in the other direction. Fundamentally, how are we set up to go into 2017 once this is out of the way . Alex i think fundamentally we are set up for the fed starting to tighten, Inflation Expectations rising against full employment. As a result, the drag a bit on the equity side, probably in the u. S. Specifically, more upside in equities. In europe, based on valuation. The continued volatility risk in europe around the italian referendum, french and german elections, etc. On the fixed income side, probably a shift more towards low duration carry instruments like catastrophe bonds, subordinated debt, those kinds of things. Francine what do you make of the markets question mark you have been in gold for quite some time. Everything seems to be pointing to a clinton victory apart from gold. The markets are betting one may, but still making hedges. Jim everything seems to be putting to a clinton victory. If you look at the pundits, the betting markets, and the Financial Markets, the election was over two weeks ago. It is a very close race. I think we will be up late. Francine you do not believe the polls, or the turnout will be greater . Both. The polls over simple democrats. Among the democrats, they do not tell you, you oversample africanamericans within the democratic sample. There are a certain number of white democrats running for trump. That is the biggest factor 2012 versus 2008. The 5 million evangelicals who did not turn out in 2012. If you are going to use 2012 as her baseline, that is a skewed baseline. They did not go for romney because he was a mormon. If you go down to the ozarks and talked to in job evangelicals, that is what you hear. The betting odds are saying 89 probability of hillary. That. S take it is the wisdom of crowds. They do not understand behavioral psychology. Trump thats for every hillary that. The hillary bets are bigger. Wall street big shots that 10,000. 50. Better bets so the book is give hillary short ons. Is 41voting booth, it because of the betting markets . Francine we are going to put this out on a chart. In the past, we had two competing charts. Peak performance over the last three months. That would point to a trump to a Trump Victory. But this is employment. Every time employment goes up, the house or the democrats, if they are in, stay in. It is usually good for the incumbent party if the economy is doing well, and the economy is doing relatively well. To billmes Carville Clinton its the economy, stupid. This year, it is not. It is unusual. We are seeing very strong Consumer Confidence numbers. At the same time, people are saying the country is on the wrong track. It is hard to reconcile those thoughts. What it does is, we take the economy out of this in terms of the Immediate Impact of the latest data. Jim this is the worst economic recovery in history. I disagree with mike. 2 growth for eight years. The trend was 3. 5 coming out of the recovery. 5 as we go through 1990 1983 and 1996. We are not even close to that. The Labor Force Participation as well. You cannot use this statistical science. His recovery is unlike any other recovery. Francine another graph showing the percentage of people under the poverty rate. That does come down. We will get to those in a second. Alexander friedman and Michael Mckee here with me. Stay with us. We have plenty more coming up. This is what we are looking at. We are looking at the economy and brexit. Any lessons we can learn from that . You can follow the Election Results on your bloomberg. , stay withight here surveillance, because we will be talking about election day. Pharma one of the sectors most likely affected by the outcome. We will be speaking live to the ceo of glaxosmithkline. He is in india, traveling with Prime Minister theresa may. The final bloomberg poll gives Hillary Clinton a two point lead, but how accurate will those opinion polls prove . And how should investors position themselves . The feds future on the line how the election will impact the worlds most important central bank. Francine this is bloomberg surveillance. I am Francine Lacqua in new york city happy election day. I will talk about the policies the candidates have or have not outlined. First, lets get straight to the Bloomberg Business flash. Investors are pricing in a victory for Hillary Clinton after one of the most divisive u. S. President ial campaigns in recent memory. The poll shows clinton leading 41 . Donald trump 44 to the poll was conducted before fbi chief james comey said clinton should not face charges related to a personal email server as secretary of state. Acta monte dei paschi. A binding offer for its nonperforming loan platform from Service Credit management. The italian debt Servicing Company said in a statement without disclosing a price. Fortress Investment Group also made a binding offer. Representatives declined to comment. Credit agricole says thirdquarter profit doubled from a year earlier. Frances thirdlargest bank saw net income climbed to 1. 80 6 billion euros, in line with analyst estimates. Bond trading income surged. The lender promised a stable or rising dividend for next year. Deutsche post thirdquarter profit has jumped more than threefold. Operating profits surged, beating analyst estimates. The rise comes as the male ail operatorm recovered from costs at its Freight Forwarding operator a year ago. A race fiscal forecast. Operating profit will probably drop to 16. 3 billion for the year in the in march, an improvement on the forecast in august. That is as the yen rally stopped short of the levels toyota had projected, with a sales slowdown threatening its position as the worlds top carmaker. That is the Bloomberg Business flash. Francine thank you. Lets turn to a sector that might be better off with donald trump, pharmaceuticals, after Hillary Clinton complained about drug prices. City group cut its rating on u. S. Health care, saying there could be pressure to curb prices. Is the ceo of glaxosmithkline. He joins us from india, where he is accompanying theresa may on her trade mission. Thank you for giving some of your time to bloomberg. How has it gone so far in india . As it been as smooth expected . Quick thanks for the time today. It is a good atmosphere yesterday. There was certainly a lot of engagement around how the two countries could Work Together to streamline trade between them, regulatory dimensions, that kind of thing. From my perspective, obviously, i was not in all of the detailed discussions. From my perspective, it was a good atmosphere around the place. Francine what would you advise her . What is the next step forwards . How could she get proper trade deals and was against countries who think there is no brexit plan at the moment . Andrew i think the u. K. Are working very quickly to put together the areas they want to focus on. Essentiallyities to an opportunity in the pharmaceutical sector, i think for the u. K. Regulatory agency to cooperate and build in reciprocal operations with india is tremendous. If you think about the role of indian pharmaceutical manufacturers in the Global Supply chain of medicines and some of the issues which have popped up with companies here, there is a great opportunity for the selfinterested in india to connect with the global regulatory framework. I think the u. K. Could be fantastic for that to happen. There are precise ways the u. K. Can help countries like india, which ultimately unlock the opportunity for these conversations. It is very early days. Obviously, none of these things are going to get going until after brexit happens. Francine regardless of who wins the election in the United States, you think there will be reforms on u. S. Pricing . I think there will be continuing pressure on drug price. I have been saying that for a long time. This year today, we are seeing prices in the u. S. Down 2 . We are seeing negative price evolution in the u. S. We think that continued pressure is likely into the future. Actually, i think a lot of people fixate on the political dimension of what might happen. It is also important to remember that the marketplace has itself put in tremendous mechanisms in place to ensure it is getting good value for money. If you look at the consolidation of the market over the last few years, whether it is hospitals, introduction of Accountable Care organizations these are mechanisms in the market which have just come in in the last two or three years. They are going to be key futures key features in the future. That is driving pressure on the system as well. I think regardless of the outcome tomorrow, the reality is it is going to be even more important for companies to demonstrate they have innovation and good value for money price. Francine you are expecting more regulation or a new regulator, as Hillary Clinton has proposed . Andrew i am sorry. Could you repeat . Francine are you expecting more regulation within the next 18 months . Andrew not especially. I mean, i cannot rule it out, of course. But i think we for sure will see more of what we have been getting, in terms of market pressure. It may well be that we see more of the demonstrationtype projects, such as the part b project, which has been unrolled in the last nine months. Specific areas for focus and change. We will have to see what the new Administration Things beyond that. I think there is an awful lot of momentum in the marketplace which is bringing more discipline to pricing, making people more accountable to demonstrating value for money. That is going to deliver a lot of what people want to see. Francine do you think who is better for the Pharmaceutical Company . Is it as simple as clinton bad, trump better . Andrew no, and i think i am going to at this point it is so close to the decision, i am going to plead the fifth on that one. Thanks very much. Francine i understand. Politically sensitive. Do you think it is imperative that the medicines regulator stay in london . Not think it is imperative. I think it would be very good if it did. The reason i think that is because there would be tremendous disruption for its physical movement. Clearly, the regulator could be located anywhere. But it has become very competent. The staff, many of them will want to stay in london. A top to bottom organization, for that to be moved means a lot of staff have to change position. Those who dont leave have to relocate. This is a regulator who is keeping and i on the health and safety of hundreds of millions of europeans. You do not want them with their eye off the ball. So honestly, while i can understand the emotional reaction of why it should move to europe because of brexit, i think the selfinterested decision would be to leave it where it is, because you have got a tremendously competent organization doing a terrific job. We should think very carefully about disrupting it. I think realistically you cannot move it without disrupting it. Francine thank you so much. The ceo of glaxosmithkline speaking to us from mumbai. Safe travels. Diplomatic. He would not say if he would rather a trump or clinton presidency. The markets zigzagging in this unpredictable election. Lets get back to alex and jim. I first wanted to show a graphic that shows gdp growth, year on year, depending on the last administration. Lets bring that up for you. It is one of my terminal charts. You were pushing back, alex, against something jim said, which is we are seeing growth in the u. S. , but it is not policy growth. Alex i guess the ascension out there is, if we could just returned to what growth should be, there would be less social strife and everyone would be in a better case. It gets too, what should growth be . Unfortunately, it gets to human lives, which are not that long. We have basically been in one growth cycle since 1980 reagan, greenspan, a debtleveraged cycle. We all know that. In 2009, it did not reset. Central banks put a little bit of salt on it, and it pushed income yields down and risk assets up. If you go back longer than that, you are stuck in the same dynamic. From 1860 until 1970, we were in an aberrational growth period because of electricity, the engine, the stuff Robert Gordon has highlighted well. It breaks the question, what is normal growth . I unfortunately think normal growth is not in the neighborhood of 4 . It is lower than that. This Technology Innovation we amazon,ng at uber and robotics unfortunately, the first wave is deflationary because it is at the expense of jobs. Eventually, it may be more inflationary, but that is probably 10 plus years away. Everyone says, what can be done . You shift to the fiscal side, infrastructure spending, and it is assumed hillary will launch a big and the structure plan. Problem is that if you have congress on the other side of the house, they are going to fight that to the nth degree, just like they did with obama when he wanted and info structure bank. Entitlement spending is 2 3 of the budget in the u. S. Already, so there is not much room for president clinton, if she is president , to launch some kind of francine donald trump saying he wants to increase fiscal spending. I would assume both parties would be behind that. If you have full employment and rising bond yields, and you have a deficit scenario, there will be plenty of people in congress who are saying we cannot run the deficit up forever. There is not an unlimited deficit spending scenario here. I understand what alex is saying jim i understand what alex is saying. 2 growth, whether that is the new normal, or whether we can use fiscal policy and labor laws to get back to Something Like 3 that is a debate for the future. As of today, in terms of voters turning out, not only do we have this big growth, but there is an honest income inequality. What little growth we have had skewed heavily to the top 1 . People are very upset about this. That is where they are going to vote today. We can debate the future. By the way, i think trumps infrastructure plans have a better chance of becoming law than hillarys. Francine thank you so much. Alex friedman in london. Coming up, how reliable is the poll that shows clinton ahead today . Does it mean she will really win the race . Francine lets get more with jim records james records. Just records. It is a pretty exciting day, u. S. Election day and we are here in new york. We were looking at the strengths and weaknesses of the economy and interest saying because of construction just structural things and inflation there is not much we could have done. Jim hurricane ivette against us. What do you think . It seems it seems as a personality rather than policy decision. Alex i guess what people are thinking about from my perspective as things do not seem that great. The American Dream was it was always going to be better in the future and that is not the sentiment. When that is the case usually people want change so the question is, is the change candidate appropriate . That in a sense is the big uncertainty out there. The polls indicate that on theyce, the answer is no, would rather go with status quo because they are more concerned about the individual, trump, even if they want change. Francine if it takes a bit longer than we are expecting for the votes to come in or for the decision to be taken or for someone to accept defeat, but we see a lot of volatility on the market . Alex it depends. If you have a split between the popular vote and Electoral College you could see a fair amount of volatility. Andrump refuses to concede the numbers show that he loses i do not think you will see a lot of volatility. There is a really ugly scenario which i hope we avoid is that there is protest and violence at the voting areas, in which case that could have some negative effect on the markets just because it will be a chaotic scene. Francine you see the trade of the month . Jim the trade of the year, i was in britain. Short sterling, buy gold. The market was fully priced for remain. If leave one you were going to make a fortune. S p, buy gold. The markets are fully priced for hillary. Francine when you look at gold, gold is rally. Jim in early october when it replaced for the expectation of the fed rate hike, and it rallied when trump was doing better and fell back when clinton got the all clear from the fbi. Gold is priced for a clinton victory and it will go up if trump wins, but it will not go lower if hillary wins. Everything is priced for hillary. The markets are all in, and it is exactly like brexit. Is its it francine not different, and we touched on it short while ago, there are a lot of people who want to draw parallels to brexit but the polls were different. We should be relying little bit more on these polls today because we have gone through this. We have not been through trump and i keep being told that 2016 is different but there is a bit of a parallel. Alex one of the greatest human fallacies is to take your recent data point and extrapolate from it. Populace and rage around it is a common theme around many parts of the world and i think it is to theidiosyncratic brexit and i would not draw too much of a parallel. Is good science between the notion that the markets are priced for Hillary Clinton. Feed and a realtime sainted up with the Dow Jones Futures and realtime. When trump is doing better the market fell. In an even race, the polls are close and she is a little bit ahead, but the polls are close to the s p should be around 2020 it is not. It is all in for hillary. Francine i do not know exactly what is priced in because the markets are discounting a trumpet when but if you look at a basket of 15 stocks discounting a trump win but if you look at a basket of 15 stocks that would benefit if clinton got in in red, blue for donald trump. They are not going with the polls 100 . Jim that is right if you are a stock picker and are looking at fundamentals but the stocks have become commoditized. Some individual stocks will do better if trump wins. I am looking at more of a global acromegaly and looking at it if trump wins it is a shock so i would rather own the shock. Francine in terms of how you see this, is clinton a clear continuation of what we had with president obama or will she be a little bit more left wing . Alex no, i do not think she is a clear continuation. I think the big question if hillary wins is on the geopolitics side. I do not think u. S. Russia relations have ever been in a worse position and the putinclinton relationship appears to be terrible. I would be concerned if she wins that there would be a fair and the status quo on geopolitics and i think it would be more extreme if trump wins. You asked if it is a continuation of obama, that is too simplistic. Hillary is more interventionist and we saw that in a series of different foreign interactions when she was more hawkish than obama was. There will still be some uncertainty of hillary wins and that will play out in ways we do not know. Francine if she wins is a definitely dollar positive and we will get a fed rate hike in december . Alex yes, i think dollar positive, the fed would hike and i expect full employment that hiking would continue, the yield curve would continue to price in higher yields. If trump wins, december is probably off the table and then there is the dollar weakness story in the near term. Jim the fed is going to raise rates in december regardless of who wins. Bill dudley was categorical about that. I was surprised at how different definite he was. They are going to raise in december regardless but the market will fall out of bed. Alex the reason i disagree with that is because this fed is so most is so caught. It shows they do respond to volatility extremely so they said they will raise in december. If trump wins and we see a significant Market Reaction, and probably geopolitical followup in south korea, japan, the baltics, russia, then i would not be surprised if the fed took december off. On so the market falls 10 a trump win but it could bounce back quickly. If you look at his policies, he has the Larry Summers program, infrastructure spending, tax cuts, that is the fiscal solution. Francine if donald trump gets into the presidency will he definitely replace janet yellen, 2018 . Alex that is certainly what the market would expect. I do not think he is necessarily going to get through huge fiscal expenditures even though it sounds good. Francine Alex Friedman in london, James Rickards in new york. Coming up, more on the feds future. We will look at how the election will impact the worlds most important central bank. This is bloomberg. ,rancine from washington, d. C. All eyes on washington, d. C. That is capitol hill. It is election day finally. A lot of my colleagues are tired that it has taken so long and may be over so quickly. Here is mark barton with your asset check. Worldlets look at wei f equities futures. This is the column i want you to stare at, equity index futures. Yesterday,wer after rising for the first day in 10 after the longest losing stretch since 1980. Well the index swings an average 1. 5 the day after the vote, gains or losses in the 24 hours after the election predict the markets direction 12 month later less than half the time. If we see a big move, this is great. Fxs is the jpmorgan volatility index, that is the lower line. The blue line and the top half is the real clear politics for trump, clinton is the white line. Volatility is muted after falling yesterday by the most since june with opinion polls showing clinton is ahead of trump. Lets look at the u. S. 10 year yield, down a basis point, 1. 81 today. The yields rose five basis points yesterday. A Hillary Clinton with all probably send the yield on the 10 year to about 2. 6 high this time next year, according to loomis vicechairman. 2. 6 , we were, last there in september 2014. That is interesting and makes it a little more hawkish than , they predict a yield of 2. 5 . Gold. Ht move into gold did fall yesterday by 1. 8 . It is up a fraction today ahead of the big u. S. Election. Francine mark barton, thank you. Donald trump has been outspoken of his criticism for the fed but Hillary Clinton could have an impact. We are here with Michael Mckee. I am very pleased to welcome Professor Sharon ohalloran. What i was surprised about of the last three weeks is that the equities were changing, fx was changing, but our expectations of what the fed will do in december did not change. Is that because we were always thinking clinton would win or did it have little impact . Michael it had little impact in the short run and will have more impact in the long run. If donald trump wins and the markets crash, that will have an impact on december but if clinton wins, status quo and they are probably going to go in december. Janet yellen and stanley fischers terms are both up in 2018, and the president normally reappoint them late in 2017. This could quickly become an issue because donald trump does not like either and would probably replace both. The Clinton Administration would probably look to keep both so we will have to see what happens. There are two open seats on the fed. President obama has nominated two people who have not been able to get a hearing. We will see if president clinton or President Trump would keep them or appoint somebody new. Elected and takes brainard off to be her treasury secretary then there are three openings and it would be a question of the senate and who is in charge. The Banking Committee has not approved any nominees as they do not like democrats and they have tried to force the president to nominate a new chairman for regulation which he has not done. There will be a new chairman in either case so it will be interesting to see. Francine we are focusing so much on the president ial race, it is crucial on who gets congress. Sharon what is what it is looking like is that the outcome will be a close split during the democrats and republicans in the senate, and the democrats will gain seats in the house although they will not be a majority. You have basically a divided government to matter who wins. Francine what does that mean . If donald trump gets in, how much power does he have domestically to change things . Sharyn very little. In that configuration it will be very little that the president will be able to do, especially donald trump with extreme policies pushing forward that type of an agenda since they will have to build a coalition between moderate democrats and moderate republicans to be able to get the majority necessary. It will go into what is called gridlock. That means the status quo. Michael i will tell you what is really important about the senate, the senate has to. Onfirm president ial nominees the way the senate has been going, if it stays in republican hands clinton could have a lot of trouble getting some of her nominees even confirmed to the cabinet. You go down the line and the lowerlevel people who really carry out policies might not get confirmed. This could be some real good luck if the democrats. Does it underestimate the self power of a president . You see that donald trump is your president , do you pull back investment . That would have a huge and Immediate Impact. Case, usually in the what happens as it carries over the existing person in office. The republicans will have a very to move out of the obama appointees. Hillary, who will probably take more conservative or moderate appointees will probably not be hampered in that way. Definitely donald trump would not be hampered in that way. That is the way in which you play that game so that the republicans actually are better off. Just from a Strategic Point of view. When you are looking at an investment you see in the Trump Administration a volatile administration that is not going to be able to build coalitions to do anything. What you see in a Clinton Administration is someone who has a long history of expertise in building coalitions across the aisle. She is known for being a moderate democrat and she is known for being able to build these moderate coalitions tween republicans and democrats in a way that his been very betweenul republicans and democrats in a way that has been very successful. , the marketss say are clearly poised for a clinton win. What say he surprises, mayhem on the market. What will the fallout be . If you look at brexit everything recouped losses except for sterling. Michael it is hard to say how long the turmoil would last because a lot of it would depend on who donald trump appoints to his cabinet and what the likelihood of his policies getting through our, how the markets judge that heres there would be an immediate fall probably in the market and does that hurt confidence among consumers and business, does business pullback investment and consumer stop spending . That is what the fed will be looking at. The brexit vote pushed things out disco years. Two years. If it happens in the u. S. It would start in january. People would have to contemplate this. Francine in the past how quickly do we have a treasury secretary . Michael tim geithner was appointed in late 2008 in november. The issue is not just whether republicans or democrats controlled the senate but what kind of role Bernie Sanders and Elizabeth Warren play in who they will let Hillary Clinton a point if she wins because they are going to want someone much more left wing and less tied to wall street than what we have seen in previous administrations. Francine mike, thank you so much. Professor Sharon Ohalloran stays with us. Michael mckee stays with us as well. We will be talking a little bit more about the parallels between brexit and the election. Brexit,ill deliver plus, plus, plus by delivering Trump Presidency. This is bloomberg. Mr. Trump this is brexit times five. This will be brexit times 10. This is going to be brexit times 50. It is going to be brexit plus, plus, plus, a lot of brexit. Sure whati am not that means, it sounds ugly. Is he right, could it be a brexit moment for the market . This is what we are focusing on, its get more with Michael Mckee and professor Sharyn Ohalloran. Like brexit, he makes it sound like it is a cool thing. Brexit could be ugly. Sharyn there are lots of consequences associated with leaving the European Market for u. K. Nd and the that is clear. I hope he is not saying that will be the equal consequences for the United States if he wins. Francine i do not know what he is saying. Sharyn that they explain the difference between a referendum and a poll in the United States, and what the outcome of an election would be from a popular vote in the United States. A referendum is really a popular vote that gets implemented, what the popular vote is into an outcome. In the United States we have a democratic republic whereby our transferred tots an outcome through the Electoral College. Each state has a proportion of those delegates then elect the president. You do not get the actual popular vote into an outcome, so it is a break in a way, from those big swatches of preferences into these dramatic changes in outcomes that you see. Those were put purposely into the constitution for exactly those types of reasons so there could be a thoughtful process in thinking about the elections, and thinking about our democracy. That is the difference. Michael i think at this point donald trump is going into the idea that you could have a surprise vote that is the opposite of the polls, and that is what he is talking about with brexit. We went into that vote with remain, in the news media being the favorite and people were surprised by the leave vote. Trump is hoping people will be surprised by a vote for him because the polls have been against him. Francine talk to me about regulation. Is it clear at this moment if trump wins this is good for u. S. Banks or is it too soon . Sharyn he has made the statement he would remove 80 of all regulations. That is unclear. Francine is it doable . Sharyn you would not necessarily want to remove 80 of food and drug or environmental regulations. It is not clear what he means. Moreover, regulations exist when markets fail in providing their own means of regulating themselves. There is the reasons why regulations exist under certain conditions. Is there a region reason to have more simplified regulations , absolutely. If that is what he is referring to i think he would have a strong push from Financial Institutions and many other businesses. To remove 80 ent of all regulations would not necessarily help either the Financial Markets or other businesses. Francine thank you so much for joining me today, professor Sharyn Ohalloran from columbia and Michael Mckee. Coming up, more surveillance. I will be joined by tom keene in new york and we will later be joined by Stephen Roach as we bring exclusive and extensive coverage of the u. S. Election. Francine america votes, the candidates make final pitches in the battleground state of michigan, hampshire, and North Carolina. Predicting a second president clinton, the poll of polls puts the democrat ahead with an edge on the eve of the election. The money is on a blue victory. The peso holds steady as market dial back against a republican upset. This is bloomberg surveillance. I am Francine Lacqua with tom keene. A day, what a Bitter Campaign. We saw secretary clinton landing just within the hour north of new york city. What im focused on is yes, it is about the battleground states. Voter intimidation is a real serious topic for this nation in the next 24 hours. Francine you are absolutely right. We need to go from a lot of hate we have seen in this country to trying to figure out how you pull this country back together no matter who wins. Tom i would suggest we will see a lot of mines and a lot of monitoring. Francine lets get straight to the bloomberg first word news. Speeches are over and it is time for america to decide who will be the next president. The and trump either final pleas. Most polls show clinton is in front but not by much. From today years when your kids or grandkids ask what you did in 2016 when everything was on the line, you will be able to say you voted for a stronger, fairer, better america. Mr. Trump we are going to have a great victory tomorrow, folks. They have no idea. Idea. Shonest media has no actually, they do have an idea. They are saying, what is going on . Taylor the first votes were cast today just after midnight in tiny villages in New Hampshire. Any rock Kurdish Forces in iraq Kurdish Forces are battling for most soul. Mosul. Self they have discovered mass graves of 100 people they believed to be killed by the Islamic State. Faces a big hold because of brexit and will have to deal with 39 billion in lost tax revenue. That will be partially offset by a seven and a half billion offset reduction in spending. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Tom thank you so much. Last night, i was sitting there and there is that one moment on election eve that gets your attention. It was the first lady in philadelphia and it was an extraordinary scene. I do not know if you have been to independence hall. It is a quiet place and across the mall, it was just extraordinary. Francine what surprised me the most is that you saw a president obama that was energized. It was also almost like he was running again and i wonder whether he is desperate for clinton to win because he sees it as a continuation of his legacy, or he is so opposed to what the alternative is. Tom i think you could go either way but there is a tradition that the incumbent president is always energized and enthused or his candidate. We have seen it many times. Lets go to the data. Francine mentioned earlier, what a day yesterday for the markets. We pause today, no supplies on that. David gura and megan murphy will have your coverage. On to the next screen, lets see if we can get excitement. The vix coming in sharply. There is the dow, 400 points away from a record high. We have got to get brexit into the show somehow today, dollarpeso level as well. Francine we do. I think we have donald trump about six times saying this is brexit plus, plus, plus. Are you exhausted . Tom you are going to be in here 1 00 a. M. Tomorrow. Francine our general election campaigns are much shorter and on election day we go to blackout in the u. K. This is like the neverending story. Stocks are advancing, currencies down a little bit. I picked out gold because you can see stocks are up and gold is as well. A hint of caution is still evident as investors think clinton will win but do not want to take too many chances. Tom the senate election, the house a given to the gop that the senate election, legal mckee has become an expert and he will join us later. We have done that execute peso chart. Here is the mexican peso chart. Here is the dow. I put it up to show the surge yesterday on the right side and the record high in the middle, the green circle. Much of a chart. It is not like a chart day. Rancine i like it im a two charts that are opposing. One goes more with the polls. What it has done in the last three months and if it goes down it usually means it is the opponent, the Party Opponent that wins. Rate andhe employment when it goes up it means it is usually the other Party Getting in. It is going down and it is a democratic president. Because you have two charts i would not read too much into it but it is nice to look at charts. Lets head to washington, d. C. Chandler. Marc. Ets start with you this is the final push, do we believe the polls . Toluse it will be difficult to determine because after all of the speeches and rallies and debates that will be up to the american voters. Clinton believes she has the ground game on her side and donald trump thinks he has the enthusiasm that propelled him to the republican nomination and believes that will still be here for the general election and will allow him to shock the world and win this election. It will be tough to make a prediction but clinton has many more pathways to victory. Francine what early indications do we have about voter turnout . Toluse this has been the largest election for early voting and alltime. As many as 50 Million People have party voted. There are good signs for both candidates. Clinton is hillary pointing to a huge surge of the hispanic vote as well as nevada, large numbers of hispanic voters. Donald trump is saying obama voters are not coming out like they did in 2012 so he believes he has more enthusiasm and places like North Carolina. Tom help me with voter intimidation. Mr. Trump will vote in the schoolhouse in new york and mrs. Clinton landing in white plains. Help me with the actual voting today. Do you assume long lines . Toluse i do. I believe the turnout so far has been historic and it is likely to continue. A lot of people have already voted early so that may reduce some of the lines, but i believe there will be long lines in the swing states. Tom i have to be careful, mr. Trump has put together with some of his supporters and indirect supporters not so much intimidation, but this idea of how people behave within the buffer zones of various election polling stations in different states. Give us an update on that, is that what we are going to be talking about the 12 noon and 3 00 p. M. And 9 00 p. M. . Both campaigns have dozens of lawyers and hundreds of volunteers on voter protection. You probably will see some donald Trump Supporters looking at the polls and wanting to monitor, but you will see Hillary Clintons lawyers aching sure they make every legal case to make sure polls voters can get to the polls. This will be playing behind the scenes in the legal arena. I do not expect people to be kept away from the polls, but you may see some donald Trump Supporters try to make sure what is going on at the polls is on the up and up. Into theot actually go polls unless they are legal ballot monitors that are sanctioned by the state and local election officials. If that does not happen they will have to be outside of that buffer and further away from the polling places. Francine thank you so much. Chandler,g in marc global head of currency at Brown Brothers. What happens to dollar tomorrow be depending on who wins . Talking aboutou how close the election is but i do not see a set of polls showing trump winning. Throughout this whole race it has really seemed to be it has been a onesided race. I think we should not really focus on the popular vote as much as the Electoral College. I also think this stuff about voter attrition repression, the biggest challenge is not people voting for to five times. The real problem is what we call gerrymandering. When the Republicans Control Congress they can make districts more suitable for them, each is why i think the house is so difficult to capture. I see the dollar having strengthened after we had that selloff on friday. There is the market, is pricing in what i am suggesting, which is a clinton victory that has been in the cards the whole time. I think there will be no real reaction to and as expected result. Exposed onemarket way or the other if you say mrs. Clinton will win, is the fx market exposed if they bet on a clinton victory . Marc i think they bet on the status quo, that is not expecting trump to win. If he wins i think the dollar will get hit. Francine how much . Marc three to four basis points. Key to me was last week before the fbi came out with their new developments, last thursday and friday the mexican peso was the strongest currency in the world. The for the latest developments the market was already taking off the wiggle it had when the fbi reopened the case. The stock market was down nine days in a row before yesterday. For four days, which i think is unprecedented, the s p closed low. I do not see that happening in a crash or 1987. This is unprecedented. I think the market that was telling the truth is the mexican peso and the fed funds futures. Bandthis is a technical showing two standard deviations, and it is an extraordinary drop. I want to show this chart one last time. Im going to start crying. Peso, a leg down as mr. Chandler was opining, not us. Maybe mrs. Clinton will be happier tonight than mr. Trump. Francine europeso is better. Head withler, global Brown Brothers staying with us. Of all theedition respect at 5 00 and at 7 00 our coverage continues with david gura and megan murphy. This is bloomberg. Francine tom and francine in new york. This is capitol hill in washington, d c it is election day in the u. S. It has been 600 days since we have been talking about it and we will find out later tonight or tomorrow morning who wins and who will be in the white house come january. British Department Store marks plans to shut down outlet in the u. K. And overseas over five years. Marks and spencer will also close 53 stores outside the country as they try to reverse years of underperformance. Rose 20 in sales november. The Chinese Government has said it may extend the tax break. Onis a report that cbs the major possible merger with viacom. Sumner redstones National Amusements controls cbs and viacom and has asked them to consider combining. Francine thank you so much. Lets talk markets. More Market Reaction on this election day, we are back with Marc Chandler. I want to talk a little bit about renminbi but we were looking at dollarpeso. There seems to be a better bet. If you look at the two extremes if trump wins, that is what you want to be in. Marc if trump does win we cannot be so sure about the Federal Reserve rate hike in december. There is i think almost an 80 chance of a fed hike in december and a fed if win, he would destabilize the markets and we have to think twice about a fed rate hike and the euro having more of a balance. Tom where else can you get euromexico . Francine only on surveillance. Tom it sounds election day to me. Francine it is 5 17 a. M. The problem is i want to show you my chart, the s p index in blue, the vix in white. The yellow circle is basically fear. We are not seeing fear in the markets right now. What happens if the market get taken by surprise, is it brexit times 10 question mark marc is it brexit times 10 . Marc think of how sharply sterling fell. Partly there is some nervousness about the election but i do not see this as a big move as far as magnitude. We tested the 200 Day Moving Average on friday and i think this is a buying opportunity rather than a selling opportunity. Tom i would suggest we pivot to china. We sawre big changes and it with the finance minister out the door in the last 48 hours. Dollarrenminbi, this is a shortterm chart. 2014, isgth in early this just a continued managed currency, up we go with continued renminbi depreciation . Marc what we are looking at is mostly dollar strength. China lost almost 50 billion in reserves. Tom it was bad. Marc for me the big story is that the chinese stock market which has been hit harder than last summer, it not causing the destruction of the global market. The markets realize china trade surplus with the u. S. Is falling, the currency is weakening alongside a stronger dollar. Tom is it a oneway bet of weaker renminbi yuan or could i go the other way . Marc i think it is too early to go the other way. I think china still needs a weaker currency and it is like pushing air underneath the parachute to make sure it is a soft landing for the currency and not disruptive. Tom Marc Chandler with us on election day. We are trying to keep you aware of the Financial Markets. Tomorrow we will pick up the debris. We really wonder where the senate will be early tomorrow morning, and we do that on International Relations with sir Howard Davies and ambassador hormats of the kissinger associates. Mr. Trump this is going to be brexit plus. This is brexit times five. This will be brexit times 10. This is going to be brexit times 50. It is going to be brexit plus, plus. Plus it francine i do not know what that means, brexit times 50. Is that armageddon . I did not know if he is talking about immigration and i certainly do not know what it means for the market. What he means is like brexit was a surprise for a lot of people and stirred things up. Are finding the opposite of wrong is not necessarily right but it could be another version of wrong. Jump is predicting his victory and how it is going to upset all of the talking heads and establishment views. Francine it is a bet against what he calls the crooked media, elitism. We are seeing the parallels but it goes down to whether you believe the polls which we should not have believed when it comes to brexit. Tom what is different with this election, we are going to get the polls and i get that and we will get the results. Everyone will want to know the point afterwards. There is a real question mark about that tension. How will the markets be affected if we get what some but not all the pic expect, that this election was rigged . Marc if you take a look at where obama support rating was among republicans, it was almost as low as Hillary Clinton. This is a cycle you go through and whoever gets elected is the president and they will have legitimacy because the office is still the highest in the land. Us. Marc chandler with we will do a little more market coverage. Stephen roach will join us in the next hour to give us perspective on how this holds into our economy. Coming up, Greg Valliere will be joining us. He is from New Hampshire and is just brilliant, particularly on the many senate races. Greg valliere, as we look at thetol hill, the house, gop, the senate is up for grabs. This is bloomberg. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. Tom good morning, everyone. Welcome to our World Headquarters in new york, manyion day, 6 00 a. M. Election polls will open. We will get you to our compendium of election coverage and that moves forward tonight at 5 00 p. M. With Mark Halperin and john heilemann, and onto david gura and megan murphy through the evening. Francine lacqua will be here in the early you new york morning early new york morning francine 1 00 a. M. Announcingl be senate. Lets get to our bloomberg first word news. Taylor we have heard the final speeches of a bitter president ial campaign and americans will decide. Hillary clinton and donald trump made their last pitches in states that are still up for grabs. Hillary Clinton is the last stand for the wall street and special interest donors to special interest themselves. Hillary is the face of failure. He is the face of failure she is the face of failed Foreign Policy. bring out your friends, roommates, strangers on the street, just stop and talk to them about what is at stake in this election because North Carolina is key. Taylor polls show clinton with a narrow lead. Three battleground states are expected to be the first where we will get returns, North Carolina, pennsylvania, and florida. Germany has arrested five men accused of recruiting for Islamic State. They focused on recruiting young muslims in germany and earning money to send them to syria. Havee philippines they allowed the remains of Ferdinand Marcos to be moved. The current president Rodrigo Duterte has fashioned himself as a marcos style strongman. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Tom everyone is a genius on election day. It is a lot harder to do that in the snows of New Hampshire or even before the New Hampshire primary. No one nailed this like Greg Valliere. Trump,endancy of donald he was way out front and he joins us. We are thrilled to have you with us and Marc Chandler. We could talk for i think two hours over a beverage of our choice, there is so much to talk about. Cap mr. Trump win . Greg sure, he cap. He can. Tom you have been out front on the senate. How late are we going to be up on the senate and which races are you focused on . Greg one is nevada where the democrats have to the harry reid seat, and i think they will. I am going to be a chicken this morning and say it is a tie in the senate. The democrats get a net before and that means tim kaine will break ties. Tom we are going to dive into this with Michael Mckee in our next section as well. The battleground states, the one that intrigues me the most is michigan. 1988, it has been a long time. This is not George Romneys michigan. Greg this is the one upset in the primary season. Hillary clinton lost michigan to Bernie Sanders and the polls did not catch that. I keep being told that if donald trump becomes president the senate will be there to put him in check and balance so he cannot do that much damage. Is that true . Analogouss somewhat to if she wins because the house will be a check on her and whoever wins will have one of the houses working against them. Thatine what american america represents depending on who is president is huge. It makes a difference if you add regulation, on whether Foreign Policy is your priority. Friend whoe an old has told me 40 years that gridlock is good because they do less harm, and i think that will be one of the takeaways of tonight election. Francine is it a done deal that we get fiscal spending . Marc the key is how will that be financed greg the key is how will that be financed. With the fed Balance Sheet so high morbid appetite for higher taxes. Tom the thing that disturbs me the most, the Washington Post has done a great job on voter intimidation. Are we harkening back to the 19th century with the intimidation we may see today . Greg there could be some of that but in a country this big there will probably be dead people voting in philadelphia and scattered areas of irregularities. I doubt that anyone can claim tomorrow morning that this was rigged. Tom what is a buffer zone in the polling place . How does it work . Greg you would have representatives from both campaigns monitoring but you have a zone of protection that you cannot penetrate. It is different in every jurisdiction, but you cannot advocate for one candidate or another inside that zone. Francine will this campaign change anything no matter who wins . I have a morning mustread that looks at the roleplay that russia had and the fact that it has put a spotlight on the system which needs to be fixed. Greg there could be some changes. You will see more regulations from her and i think she will be tested geopolitically right away. I think this election is going to wind up being the big story tomorrow morning, will be the changes demographically in this country. Hispanics, africanamericans, women, that is the change that may not be fully appreciated. Francine this is my morning mustread from bloomberg view. It is so completely different. He talks about the upside of russian interference and says putin is providing a service to the United States by holding his malicious mirror to the political establishment. It is a trolls hair but does not reflect a nasty reality it does reflect a nasty reality. Whoever becomes president tomorrow will have to unify. It is a little like brexit. It is no good if you have a candid campaign that means you have two halves. Tom there was an election in 1960 was decided in a bar in chicago, i think was the full glory. We are supposed to have close elections and they always are. To take a more recent example, al gore won the popular vote in 2000 and did not win the Electoral College. You could have Something Like this tonight and i think it could be really close. Tom florida is a tossup, no one is surprised. What geography will you look at in florida . Greg i think the hispanic vote will be overwhelming. I think if florida goes the way i think it will go, we might be able to go to sleep around 10 00 tonight. Surveillance breakthrough. Francine thank you for giving me a little bit of help that i get more than a half hour of sleep. Do you expect the polls to be so clear winning . Marc i do, but i am still concerned about putins role. It is not just in the election but he is funding the populace right party throughout europe as well. This is not something that is unique to the u. S. And we will look back and see this as a turning point. How did we stop foreign interests from giving us a onesided story in the u. S. Election . Tom give us an update on the italian election. Francine it is a referendum and that it is difficult to understand whether the Prime Minister will be replaced. Tom keene with some pretty incisive questions on election day. Greg valliere, thank you very much. Marc chandler, the global head of currency at browns brothers. June into our coverage tonight at 5 00 with a twohour edition of with all due respect. Coverage eastern continues with david gura and megan murphy. This is bloomberg. Francine live pictures of beautiful new york city. This is where Hillary Clinton has returned to cast her vote. Donald trump also. Tom mr. Trump was in that camera shot. Francine we will be looking at washington, d c but we will be here in new york. I would suggest they are very politically chosen and it is very choreographed. Atncine look at new york the next 72 hours. The senate is also up for grabs. Lets bring in Michael Mckee and still with us Greg Valliere and Marc Chandler. This is crucial because it goes back to the powers that the president has. Michael you were talking last segment about how we may have divided government, and it is going to be important particularly for Hillary Clinton if she has to face this divided government, that she get some support on capitol hill and that would be in the senate. Democrats need to take a net of four seats away from republicans if she wins because tim kaine could break ties as Vice President. The incumbent is way behind and is likely to lose to tammy duckworth. It also looks like they will take wisconsin. Russ feingold in a rematch against ron johnson, the republican incumbent, is ahead. The most likely spot is probably pennsylvania where Katie Mcginty is ahead of pat toomey. Heres a question for Greg Valliere, where is that fourth seat . A lot of people are looking at New Hampshire, kelly ayotte and maggie hassan, or North Carolina where richard burr is locked in a tight race with deborah ross. Greg i think New Hampshire is where they get their fourth but they cannot lose one seat and nevada may be in play. Michael according to the people who live out there and study the early vote, Something Like 80 of nevadans have voted. They do not count the votes but we know most of those votes have gone to the democrats at this point. That has given people in nevada a lot of confidence that they are going to hold that harry reid seat. Tom if we get a Democratic Senate, does that change the paul ryan calculus House Democrats . What will be the new paul ryan if there is a Democratic Senate . Marc the new paul ryan is on thin ice. I think he has it potential insurrection on his hands with his own troops. When we have the debt ceiling fight at the end of the winter he may have to align with some of Nancy Pelosis votes. He could go the way of weiner and cantor and be out by spring oehner and cantor and be out by spring. Michael the Freedom Caucus has decided to hold off on challenging ryan but they have given notice. Audience,our global is that the tea party . Michael it is a little bit different. The tea party are like, do not spend any money. These are not just fiscal conservatives but cultural conservatives who do not want any compromises at all with democrats. It is the hardest thing that paul ryan has to depend on because he can count on nothing from that group. There is only 12 or 13 but with a narrow majority will make it hard. For our global and european audience, a lot of the appointments of the fed our political and the chair is a political appointee. Is it a done deal that if donald trump wins she is out by 2018 . Marc i think it is a mistake to think that donald trump or any president can fire a Federal Reserve chairperson. If i was janet yellen i would say i need to protect my institutions instant independence. Two toellen for the last three years has been facing criticism from the right when she raised rates on december 14. She will receive criticism from warren, elizabeth Bernie Sanders will say she acted to precipitously. Her term is up in 2018 as a stand fisher so whoever is elected by the end of 2017 have to make edges a decision. Francine my concern is that every central banker can do nothing right or wrong because they are always in the line of fire. Who is the person that donald trump could appoint that would gain the trust of the markets like janet yellen has . I have no idea. Arc . Cine m bec i think the issue will not so much who it will be but how it impacts policy over the next 12 to 18 months before janet yellen is out. , ifael this is a key thing the senate stays republican but Hillary Clinton is elected president , she is going to have a very tough time getting many of her cabinet choices through because the republicans are not going to want to cooperate with her in any fashion. If there is anyone controversial they may just do what they have done with Merrick Garland and put it on hold. This is important stuff. Tom mike, you have some perspective on this. What are your thoughts . Michael you look at the polls and the way the state breakdown, and we vote on an electoral vote races statebystate. It looks like Hillary Clinton is poised to win but the question is does she have enough support in congress to do anything or is intoing to just devolve investigation after investigation in the house, and a senate so narrowly divided that it is going to be tough for her to get her appointees through . Tom that is not what i asked. I just want to know when i can go to bed tonight. Michael i think it could be fairly early if things break the way. , floridawatch florida goes for her you can get in your jammies and go to bed early. Tom my red sox jammies, you got that right. We are thrilled you are with us worldwide. Lets look at the data which is quiet as you would expect on an election day. Futures negative three after the buoyant day yesterday. With Marc Chandler and Greg Valliere, stay with us. This is bloomberg on election day. Tom it is part of the national fabric, the voting of the president and Vice President ial candidates. This is the first shot of the kasine in the background greeting people in richmond. He was mayor of richmond to begin his political career. What is wonderful about this and so american, mr. Kane is literally from the 19th century, a son of a blacksmith. His father was a welder. We now go to another candidate for secretary clinton, ron kirk, a democrat, and one of the lead voices on trade within the democratic party. Is so manyhere things to speak to you of but i think what i would speak to the first is a collapse of tpp. , canur candidate wins trade be reinvigorated in the debris of this election . Ron i certainly hope so and i would take a little issue, i do not know that tpp has collapsed as certainly the public support and discourse around it has collapsed. Trade is going to have to stay relevant because so much of our economy in the future is going to be tied to our ability to provide the goods, the services that countries around the world need as they modernize their economies. We do have some work to convince the American Public that trade is not only not a bad word, but it can be a critical part of building the jobs, building the economy in the future. Convince how do you the American People . I am from london and we have the same problem with brexit. People do not believe globalization serves them. How do you convince them otherwise . Ron the shortest answer is jobs. Those of us that believe in trade i think get a little bit too esoteric. Talk about globalization and rationalization of the supply chain and in an environment like this, when the most pressing, iserlying question is where the next generation of jobs going to come from, we need to show people that buy our opening new markets around the world we can sell more of our stuff and it is that simple. I do not think those of us who believe in trade and done a good enough job between connecting the dots between what we make and produce here in the United States and europe, and how we sell that abroad. Tom you grew up in austin, texas, and an austin of a different time. Tell me about voter intimidation. What do you expect to see in your taxes today of freedom within the ballot . See somepe we do not of the things that my parents endured and even some of the things that i endured when i was growing up. I would not say all republicans would go out of their way to make it difficult for people of we areo vote, but what seeing in texas is an excitement that the rhetoric of donald trump has done more to and sent getg hispanic voters to organized and come to the polls, and i think we will be pleasantly surprised. I am not as optimistic as to believe we will turn blue today. For a state we historically lose by double digits, i think it will be a singledigit race and we will see an explosive hispanic turnout all over the state. Tom ron kirk, thank you so much from washington. We see the Vice President ial candidate voting in richmond, virginia. Aine, the former mayor. Marc chandler, thank you for being with us. Tom it is election day in america, in selected states, confusion and chaos may reign. Get out the buffer zones amid vote in confrontation and intimidation. There is a deplorable lack of sleep. Secretary clinton lands in white plains north of new york in the 3 00 hour. Mr. Trump will vote in a manhattan schoolhouse. And forget clintontrump. The senate could go either way. In this hour, we have greg and steven roach. This is surveillance. Live from our World Headquarters in new york. In london, francine, this is a big day. Francine i want to know about voter turnouts. Bits been a lot less than we get in the u. K. Alecs. Tom, the story of the day were looking at the markets because were bloomberg and dollar volatility is dropping because the markets are priced for a clinton win. Tom out first among our candidates, clintonkaine, the senator from richmond, virginia, voting here, of course. Always a made for television photoop. And voting in many different ways. I dont know if they use a chad which goes back to bush v. Gore years ago but its amazing, francine, and for our global audience to explain the process. This is a state and local process. Voting is not run so much by the federal government. Froip Frank Francine in most european elections you have a blackout not to influence voters. Tom its a good point. The distinction is we dont have a blackout but exit polls, theres a process. We dont do that. It goes back a good number of years. And the other is the idea of a buffer around each polling booth and that goes to the reports of the intimidation that we could possibly see today. With much more on this, an update on where we stand at the 6 00 a. M. Morning with our first word news, heres taylor rigs. Taylor the speeches are over and its time for america to decide who will be the next president. Hillary clinton and donald trump made their final flees pleas to voters in battleground states. Most polls show mrs. Clinton is in front but not by much. Hillary today when your kids, grandkids ask what you did in 2016 when everything was on the line, youll be able to say you voted for a stronger, fairer, better america. [cheers and applause] donald well have a great victory tomorrow, folks. [cheers and applause] donald they have no idea. The Dishonest Media has no idea. Actually, they do have an idea. They say what is going on . Taylor the first votes were cast after midnight in tinyvilleages in New Hampshire. Trump shows a narrow lead, 3225. In iraq, kurdish forpses are battling Islamic State fighters for a town east of mosul and part of an offensive aimed at recapturing iraqs second largest city. Troops south of mosul have discovered a mass grave filled with bodies of about a hundred people believed to have been killed by Islamic State. A new study warns the u. K. Chancellor faces a big budget hole because of brexit. According to the institute for fiscal studies, hammond will have to deal with 39 billion in lost tax revenue caused by diminished growth and will be partially offset by 7. 5 billion reduction in spending if the u. K. No longer contributes to the e. U. Budget. Global news 24 hours a day powered by more than 2,600 journalists and analysts in more than 120 countries. Im taylor rigs, this is bloomberg. Francine and tom . Tom breaking news from a financial space. Valiant a always troubled and adjusting and they caught their forecast. Its a nice reduction off revenue ford but i really note a 1 billion goodwill impairment we see this morning from valeant as that saga continues. The value check of a the situation yesterday. We showed the chart earlier, a good 300 points on the dow. We turn this morning the futures are a little heavy but what youd expect on an election day with eight states opening here at 6 00 a. M. East coast. On the next screen, francine is looking at pace, 18. 62. The peso turned this morning. Francine im looking at gold a little bit higher. I know its a touch. Gained 0. 2 . But investors believe clinton will win and yet gold is still going a little higher. A little caution from some investors. Those are the things im watching out for in the markets. Lets get more on the u. S. Election with Bloomberg Politics reporter. Hes outside the white house. Tell us how close this election will be . If you believe the polls and market, clinton will have a pretty clear victory. Reporter if you believe the polls, the race is much closer than it was just a few weeks ago. Anything can happen. Its all going to be down to turnout and the ground game of each campaign, how much theyre able to get their voters out to the polls. Donald trump is within striking distance. Anything could happen. Tom toluse, i was taken aback by the pageantry in philadelphia to see the thousands of people assembled with the first lady fired up obviously in support of secretary clinton. Tell us at the white house this morning the enthusiasm of the president as he assisted his secretary of state. Toluse the first time weve seen a sitting president in such a long Time Campaign so heavily for their successor. Barack obama is incredibly excited about trying to get Hillary Clinton into the white house. But hes also incredibly afraid that donald trump could win and erase everything hes done over the last eight years. Hes been very heavily involved in this election and been on the campaign trail almost every day. He was in philadelphia with his wife yesterday and a lot of different, important political figures showing how much of a support that Hillary Clinton has among former president s, sitting president s, as well as celebrities like Bruce Springsteen who was there last night in philadelphia. Tom maybe different celebrity with mr. Trump. I look at mr. Trumps last number of days and suggest hes been quieter, clearly off twitter as has been widely reported. The thoughts of the white house as they look at the final days of the campaign of donald trump. Toluse you heard president obama say hes used to the fact that Donald Trumps twitter has been taken away from him by his aides saying someone you cant trust with a twitter account is someone you cant trust with the Nuclear Codes is a line hes been using on the campaign trail. Hes afraid donald trump could pull off a victory but does believe the internal polling shows Hillary Clinton is ahead and has several paths to victory like florida, North Carolina and ohio where president obama has been going the last week and shes in good shape to be the next president and occupy the oval office here in washington, d. C. In about a couple months. Francine if donald trump gets elected, i want to talk policy, what is the one thing that will change significantly policywise that will change three months from inauguration. Toluse there are tons of things. He has a completely different vision for america than the current. And Hillary Clinton. You look at trade and thats an important area where the president is trying to get a t. P. C. Trade deal through and donald trump said hell not only not sign the t. P. P. Deal but maybe negotiate nafta and pull out of nafta, one of the trade deals u. S. Is involved with with our trading partners. Thats one area donald trump would completely change u. S. Policy as well as Foreign Policy in terms of working with our allies. Tom toluse olorunnipa, thank influence the white house. Joining us in the studios from Yale University and decades with morgan stanley, steven roach. Professor roach, i guess i can call you that at Yale University. Been there a number of years. You wrote a magnificent book eight years ago, nine years ago, the next asia. For steven roach, whats the next america . Steven well, the good news, tom, this is the last day were going to have to listen to donald trump as a credible candidate. And we can now go on to focusing on make its going to look like for president clinton which i think is the most likely outcome as she faces a very challenging economy, a very stahleninging world. Tough issues in china centric asia with china much more muscular on Foreign Policy and how she addresses that without t. P. P. Which is something she believeed the secretary of state was the centerpiece of a china containment strategy. It will be a big challenge for her and shes going to trying to figure out how to get back into that approach. Tom that is foreign affairs. Senator contain speaking senator kaine in richmond talking secretary clinton and mr. Trump, mr. Kaine in richmond, virginia. Let me bring up a cart because im doing it for Stephen Roach, hes been a great supporter of bloomberg surveillance and the economy for years. Its my chart of the year, the fouryear moving average of real g. D. P. From morning america in the late 1990s and down we go to what we did in 2006, not bad, above 3 . And were not getting it done. Stephen roach, you predicted this and were very strong on a soft consumer. Were down to a 2 run rate on g. D. P. And 40 decline in Economic Growth in a matter of 20 years, maybe 15 years. What is the roach prescription to give us a little more Economic Growth . Stephen youve got to get behind the number, tom, and the major reason for the shortfall of g. D. P. Which youre entirely right in pointing out is unprecedented weakness in consumer demand. American consumer growth rate for eight years has been about 1. 5 . And thats two points below the ecrisis average for the 12 preceding years. We went through a Balance Sheet recession like japan did with consumers overly levered on a property bubble. Theyre still paying down debt, trying to rebuild savings and given the shortfall of labor income because of stagnant real wages, maybe changing a tiny bit right now. Theyre not getting back to where they need to be. We have to address the consumer. Francine is this the new normal . Will we ever go back to what we were . Stephen i hate the word new normal francine. Tom there goes your consulting gig with pimlico. Stephen i never had one. Its a challenging head wind and theres so much focus on providing relief for poor beleaguered corporate america. The real issue here is making American Consumers whole again, assisting them with their excess debt and their total lack of savings in addressing an insecure and frightening future for Many American families. Francine this is my u. S. Unemployment rate. The blue is under democratic president. If we bring it up, we brought it back to the 1950s because tom keene likes a little bit of history. Its gone down. I know we look at the Participation Rate but is the u. S. Economy all that bad . I know theres an inequality problem but if you look at the percentage of the poverty rate, its also gone down. Stephen look, the economy is, i think tom pointed out, the growth rate in this recovery has been about half the historic norm. The Unemployment Rate has come down significantly because the Participation Rate has basically collapsed. Theres a big debate whether or not this is structural or cyclical or a combination of the two. But i think the pieces of the economy that tell me the most are the profound shortfall of domestic demand driven by the american consumer. Francine this is worldwide, right . Stephen i wouldnt call it a global phenomenon. We need to look the a the United States economy. Typically recovery is 4 . This ones been 2 and the major reason for the shortfall is the overly leveraged savings short american consumer. And president clinton is going to have to address that very quickly if she wants to transform the attitudes and the middle class towards the next america. Tom we should say polls are open in eight states. Francine there you go. Stephen roach, Yale University. Thank you for now. Tune in tonight. Our special election coverage starting at 5 00 p. M. Eastern with a new edition of all due respect and then at 7 00 p. M. Eastern our coverage continues on the bloomberg channel. Were looking at the markets. Pretty subdued today. This is bloomberg. Francine live pictures of the white house. Tom informs me this is the northern facade overlooking lafayette scare. I saw a fired up president obama yesterday. I looked at a lot of coverage for the final push for Hillary Clinton and his final push for his own legacy. Lets get straight to Corporate News now and back to the u. S. Election and markets. Lets get to the Bloomberg Business flash with taylor. Taylor francine and tom, valean cut its forecast after posting earnings that missed estimates. The company took a billion dollar goodwill impairment to write some of the u. S. Businesses. It became the focus of outrage of high drug costs last year and sent the stock price down more than 90 of its high in 2015. Thats your Bloomberg Business flash. Francine and tom . Tom thanks so much. Heres a wonderful morning must read and can only come from albert hunt with his decades of coverage of the wall street journal and bloomberg. Mr. Hunt, on a personal note im envious of the late david broder, the esteemed Washington Post political writer, the first president ial race he covered was kennedynixon. The last was the president in 2008. If this is my finale, mr. Hunt goes out with style. The book ends with nixons reelection in 1972 and one donald trump. Thank god for the four great ones in between. Greg revisits us from horizon. Mr. Trump is getting torn to shredsly the by the lines of al hunt, isnt he . Mr. Hunt he has. Hes been on message and i think hes actually become a redible candidate. Tom nixons coming was contentious but was a nation ripped by war versus what we have now. What are we ripped at now like vietnam. Greg i think this country has changed dramatically demographically if you look at the influence of people of color in this country. I think there are other people who dont quite accept it and thats led to a lot of tearing at the social fabric. Francine greg, you talk about donald trump being a credible candidate the last 10 days. Whats his main policy. I want to talk policy, im european and actually im amazed at how this election is so much on personality and on where you want for know what they do on trade or fiscal spending or taxes. Depreg look at michigan which Hillary Clinton lost. It was a referendum on globalization. I like free trade but an awful lot of people in michigan dont and trump has captured that mood. And i think michigan tonight will be closer than expected. Tom Steve Roach Stephen why do you like free trade . I do, too. Greg theyre winners. Everyone talks about the loser, theyre winners and we as consumers get to stephen going to walmart and buying cheap things made in china. Greg part of it but i think trade encourages Economic Growth and protectionism retards Economic Growth. Tom along this line, allen kruger and the president of the council of economic advisors with an oped on something you teach at yale, monopsony. Gregs point on michigan, we have the basic idea of a labor group in america that cant get fair shake because of fancy esoteric things and rising wages. How do we get wage increases now . Stephen i think theres a great book published a while edited ed and you implying to one answer, an absolute lask and classic and never quite won the prize we were hoping it was. There was labor arbitrage. Tom a phrase you invented. Stephen that i wrote and thats what weve got to grapple with in this era of trade and globalization. The idea of low cost labor coming in and squeezing high cost labor in the developed world, especially in the United States, especially in michigan is not going away. Its intensified and accelerating. How do we address that . Tom Stephen Roach and Greg Valliere, well see you the next coming days. The white house on this election day, the Jefferson Memorial and Washington Monument in the back ground. Good morning. Tom and america votes. Brooklyn, new york, east of new york city. Theres not a polyester fiber in sight as they vote at the brooklyn museum. Enal l be using artis ballots. At the acclaimed brooklyn museum, brooklyn, new york. With us is Francine Laqua. Whats your observation so far coming in . Francine ive written bizarre things about puppies at the polls to get a Younger Generation to vote, tom. Im hooked and confused. Tom youll vote in the confines of connecticut today . Stephen i will. Tom long lines expected, right . Stephen never can tell. Tom within the contentions of this election it evolves down to six or seven states. Which states will be look at closely tonight . Stephen the usual, florida, michigan, i dont think theyll be close, i really dont. I think well be able to go to bed early tonight. I think the momentum is not there. The media is trying to make this look close but i just sense that the air, the hot air is out of the trump balloon. Tom will secretary clinton keep janet yellen as chair of the Federal Reserve. Stephen sure. No need to change it at this point, no compelling reason. Tom well talk about that with dr. Roach through the morning. Hes with Yale University. Again, the brooklyn museum, voting in eight states occurring right now including new york. Francine . Francine tom, this is what were hoog at in terms of the market. Theres a little bit of caution. I know the polls are suggesting and i really think they are pricing in a clinton win but this is for the world index, theyre flatter than they weres, the futures on the s p also slipping and european shares in advance and gold eking out some of the gains a the this point to a little investor caution before the president ial election with opinion polls showing Hillary Clinton narrowly ahead of donald trump. This is bloomberg on election day. Wow, x1 has netflix . Hey, drop a beat. Show me orange is the new black wait, no, bloodline how about bojack, luke cage oh, dj tanner maybe show me lilyhammer stranger things, marseille, the fall in the same place as my basketball . Narcos, fearless, cooked the crown, marco polo, lost and found grace and frankie, hemlock grove, season one of. show me house of cards. Finally, you can now find all of netflix in the same place as all your other entertainment. On xfinity x1. Francine this is a picture of the white house, all eyes and the markets and anyone in Foreign Policy looking at your election. You are like the leader of the free world. Tom the white house is pretty original and you literally can see the paint pieling on the side of the house. Its like a regular house. Tom harry truman built it but very much like the original. Francine whoever wins tonight will enter the white house january it 22 after the inauguration. Lets get to the election and Bloomberg News with taylor rigs. Taylor weve heard the final speeches of a Bitter Campaign and now americans will decide who will lead them the next four years. Hillary clinton and donald trump made their last pitches in states that are still up for grabs. Donald Hillary Clinton is for wall street and special donors and special interests themselves. Hillary is the face of failure. Shes the face of failure. Shes the face of failed oreign policy. Hillary bring out your friends and roommates and strangers on the street. Just stop and talk to them about whats at stake in this election. Because North Carolina is key. Francine polls show clinton with a narrow lead. North carolina, pennsylvania and florida. Germany has arrested five machine accused of recruiting for Islamic State. The Authorities Say the suspects focused on recruiting young muslims in germany and raising money to send them to syria to join up with islamic militants. In the philippines, the streak has cleared the way for the remains of Ferdinand Marcos to be moved to the National Heroes cemetery. Marcos ruled for three centuries before being ousted in a coup and was accused of human rights violations. The current president has fashioned himself as a marcos style strongman. Global news 24 hours a day. Im taylor rigs. This is bloomberg. Francine and tom . Tom tom keene and Francine Laqua from london and guy johnson is here and francine will be later on tonight to open for europe. This was the pageantry in philadelphia and remarkable with two very different campaign. This is the Clinton Campaign with the obamas and saw the first lady speaking in the middle of the evening last night but really quite a turnout in philadelphia. And of course the philadelphia suburbs are huge focal point for how the state of pennsylvania will go this evening. Stephen roach of Yale University. We introduce brian belski of bemo Capital Markets to talk the Capital Markets and i want to bring up a chart from dr. Roachs colleague at Yale University. This is the acclaimed ibbits chart from the Standard Poors and what it says is go to cash and go to cash often to play on election day. Its really not a good policy. Brian it really isnt. This, too, shall pass. Lets just kind of get through this noise and the rhetoric and the conundrum which is the election. Lets focus on whats happening in terms of fundamentals in the economy which are improving. And if we cannot be emotional and not be reactive, i think well be fine. Tom theres an underestimation of the multinational of our multinational large cap and the visible exchange for example and our mid caps and even small caps, are they immune from washington and the political process . Brian i would say this. Small cap stocks from a structural basis have changed the last five or 10 years in respect to how much cash theyre holding and we talk a lot with respect to dividends and mid cap stocks are starting to show and grow heavier dividend. Are they immune with respect to platforms, no. But at the end of the day, the economy drives stocks. The fundamentals drive stocks, not necessarily platforms. If we do enter more of a protectionism type scenario than small caps can do quite well over the near term but longer termites all about Profit Growth and how companies are going to be able to grow within either environment Going Forward. Francine im going to be in the tom keene timeout chair but i dont care. I made a candle chart, bar chart for people in the u. S. Tom i like bar charts. Francine this is the three month return. Every time that bar chart means the s p went down the last three months, its the opponent, the opponent party gets in. Why is 2016 different . Brian as you remember in 2012, too, the polls coming in before the election had romney ahead and then the market was down the day after the election because the stock market thought romney was going to win. At the end of the day, we just him pause people to take a much more longer term perspective. And not be so reactive. We in our society want to know everything right away. And i think its dangerous heading into this election, especially given the fact how much stocks were up yesterday. Francine i spoke earlier on to the glaxo smith c. E. O. And if clinton wins will the pharmaceuticals be worse off . He hesitated and talked about regulation. Brian you have to talk about regulation but talk about how many roadblocks come up with respect to the senate and the house in terms of how much the democrats could push through if she wins. Ultimately means more angst and emotion and well see ultimately how these things pan out. Tom we need help from Stephen Roach within the equity markets, Stephen Roach, strategist at Yale University. Alan greenspan was on yesterday. Stephen who . Tom on daybreak and surveillance as well and chairman greenspan didnt forecast a single point estimate but alluded to higher yields to come including the quotable phrase, 5 yields. I would suggest dr. Roach would push against that. Stephen well, its amazing to me you have the maestro on predicting Interest Rates. To get Interest Rates anything close to that level you have to think of a very different world in terms of inflation, in terms of Global Growth and were as far away from that now as weve been at any point in our career. The lessons of japan which i think are the template for what were going through now in the broad developed world is long term Interest Rates can stay a lot lower post bubble even than Alan Greenspan had envisioned. Tom i set you up because of the chairmans love for the Federal Reserve system. How do you invest the investors of b. M. O. Federal market to be in the market when theres so much doubt out there because of the higher rates. A n throwing out a 5 , of black swan or trump win is a headline grabber. Structural equities over the next several years are going to be very attractive assets especially those from an Asset Allocation basis able to provide Equity Income. We think Equity Income is a new sleeve on the assetal education given that the fact of fixed income is a fallacy. If we see bonds, clients will look for stability and we believe from a longer term perspective, equities will provide stability. Francine what happens to volatilities in equities if trump wins . I showed you this chart backwardization, theres no you in the markets because see what happened . Brian you look at a fixed chart you look at it in a longer term. Were in a low volatility environment and well be that way for a while especially given where assets are in terms of bonds and stocks. However, on a long term basis, the answer youre looking for is are we seeing a spike involved with respect to seeing a Trump Victory . The answer has to be yes. The markets telling you yesterday the stocks want status quo and if we get the opposite well see a spike in volatility. Throwing out numbers like a 5 yield will take a long time to get there. Trump is clearly more inflationary and we wont get there in six months. Francine tune in for our special election coverage at 5 00 p. M. Eastern with a two hour edition of with all due respect and then at 7 00 p. M. Eastern our coverage continues with Bloomberg News Washington Bureau chief megan murphy. Were looking at the markets. This is bloomberg. Tom voting near a battleground state. Columbus, ohio. Honda, established in 1971, at least their modern location in the outskirts of columbus. May be less battlegroundy than have been in previous elections. Nevertheless a key state. All the people were seeing in the shot saturated by the advertising. Its amazing the polarization n america who gets the tv ads. Francine i highly suggest to andletgo. Go find the latest polls and look at that. This is a wlerg prediction of who will win and bloomberg prediction of who will win. Its an awesome map. Coming up shortly bloombergs is eak election day exciting and america numb for the moment. Feels like a payroll day. Its payroll friday with the volume cranked right up. Well be talking to Peter Navorro, professor of economic and public policy, trump supporter and always fiery and expect that coming up in a little bit. The status quo is what many people expect and that generally means a divided government but im not sure how much what happened the last couple years you can put back in the bottle and how much of it is very versal. Well talk about a fallout and political policyics next. Tom im writing a banner. Roach on navorro economics. Peter navorro will join daybreak. You were visibly moved when we announced wed have a economist from the trump camp. Why do you disagree so vociferously with what we see from the professor from ucalirvine. Stephen Peter Navorro should be defrocked and lose his ability to practice economics. Hes not written one credible thing about tom whats the feature of his macroeconomics of this nation you take issue with . Stephen hate. E hates china. His wannabe treatise, the book i think was called death by china. Peter believes china is spob for all that ails responsible for all that ails the middle class and the economy. His socalled analysis of the trump economic plan coauthored by the great wilbur ross is not worth the paper its printed on. They take the concept of dynamic scoring into a realm that was never envisioned to do. Where they presume that all of the protectionism and the socalled reregulatory remake of the American Economy will be positive for the United States. Francine we had him on the show friday, actually. Positive stephen too bad. Francine he took offense i was asking questions because i was in london and shouldnt be interfering in the u. S. Election at all when it was about trade and the second thing, he also pushed back against germany and saying any country with a surplus should be punished because theyre cheating america. Stephen right. What peter quite doesnt get and is sort of understandable because i think he has an economics degree from harvard is that trade deficits do not occur in a vacuum. The United States doesnt save. And when we want to grow without saving we run trade deficits. Tom this is critical question, is this our new mercantilism, is navorro ross economics taking jason viners classic essay of the 1940s and bringing it over to a new neomercantilism . Stephen there are reasons to raise serious questions about the impact that trade has on american workers. But to blame others for our own shortfalls, theres nothing neomercantilism about that. Tom with your experience on Equity Investment how do the multinationals adapt and develop into the new political system about trade . Brian at the end of the day, the trend in manufacturing, tom, has been make as much cheap stuff you can possibly overseas, ship it back here. I think Going Forward were going to see manufacturing, some capacity coming back, but at the end of the day well make less and sell it more efficiently here. So i think, you know, any time we Start Talking about binary outcomes it varies on either side, i think its dangerous. And we wound up this International Trade situation over the last 20 years, the percentage of nonu. S. Revenues with respect to u. S. Overall sales has grown substantially the last 20 years. You cant unwind that, right . And so at the end of the day, you want to be with companies that have diversified platforms around the world that are not binary and if we start to think of the binary outcomes 100 international or 100 u. S. Is not the way to run a company. Francine why is globalization or trade deals around the world getting such a bad rap . Im thinking of brexit and what weve heard from both candidates here. Is it because we actually are worse off than 30 years ago in terms of income or simply because no one stood up in the last 15 years and said look, this trade may not be perfect, this deal, especially its much better than if we had no deal . Stephen francine, trade is short of sort of an amorphous contract. In the years weve seen low cost workers enter the economy largely as producers and the chinas and indias and Eastern European and latin american countries contribute as producers but not as consumers. And so we as consumers benefit from their lowcost production but we need to sell them things. And until they can stimulate their own internal consumption, we have a real east symmetry in globalization thats painful. Tom a final thought from you from the economic markets. If we assume tepid g. D. P. , how do we get six months earnings in one year . Brian the majority of the move in the markets are going to be all about multiple expansion. We need to start to see a combination of both fiscal and Monetary Policy together working together. Weve not seen that during this recovery since 2009. So if we start to see some of that well see Revenue Growth and Earnings Growth. The other thing, too, in corporate america, consumer america were sitting on our hands. We want to get past this and get through the fed at the end of the year and start growing again and we think that actually growth would be a little understated and Earnings Growth could be understated and were in a nice tailwind with respect to growth the next six months. Tom thanks for the briefing. Mr. Belisky is with bmo Capital Markets. Tomorrow we have a wonderful lineup for you post election on our very International Relations. Its election day. Were pleased to tell you tomorrow with us sir Howard Davies, r. B. S. Chairman, consult. Haas to the that will be tomorrow on bloomberg surveillance. The white house on election day. This is bloomberg. Francine these are pictures of gorgeous new york. Were looking at the weather for voter turnout. Probably not in new york but elsewhere. New york, where both candidates, Hillary Clinton and donald trump are voting today and were probably expecting them to give their acceptance speech. Tom there trump in midtown manhattan and will vote at a schoolhouse and secretary clinton at their home north of new york. The foreign exchange, a quiet market. The peso has been front and center. Im calling it a churn today in sterling 124. 08 as well. Lets go to our single best chart and on election day, ive been saving it. It is my chart of the year and really speaks to the story of debates where mr. Trump was quite emotional about 1 . And down we go. We go back to morning in america which was 4 real g. D. P. Down we go to 3 and the new level of g. D. P. Stephen roach is with us from yale. Stephen roach, youve predicted this chart and you absolutely nailed the nonrecovery in real g. D. P. Whats the single president ial policy prescription that we can have to get Economic Growth going for all americans . Is it a tax cut . Stephen again, tom, i go back to the point i made earlier this morning. The force thats holding back that gpped g. D. P. Is the american consumer, 70 of the economy. Why is the consumer weak . Thats the question that president elect clinton is going to have to address. Tom is the overlay the paradox of saving, a renewed paradox and were saving more because of the distortion the fed has given us in the rate market . Stephen the fed has given markets, assets and incentives to save an unprecedented distortion with zero Interest Rates and quantitative easing. Youre right about that. We need to get Monetary Policy back on a more table platform. We need to look at longer term saving incentives and look at incentives for overly indebted americans to still dig out of a very, very deep hole. Francine you talk about president elect clinton. What happens if donald trump wins and what happens to the such consumer . Stephen i get a new passport. Francine what happens to the rest . Not everyone can leave this country. Tom where would you move to, New Hampshire . Stephen im really not seriously considering the options now because i dont think it will happen. But i do have a backup plan im prepared to take out of the vault if that happens later tonight. Francine theres nothing anything good can come out out of a donald Trump Presidency, fiscal spending, tax cuts, deregulation . Stephen nothing good would come from a donald Trump Presidency and im confident in the character of the American People to have figured that out a long time ago. Tom Stephen Roach, thanks for being with us today. Dr. Roach will continue with us on radio through the morning. So much to talk about, francine. I want to go to when you reappear for asia and europe in the august 1 00 a. M. And 2 00 a. M. Hour. We may not know even then the president but particularly the senate races. Francine its 10 hours from now. And actually what i would look at is the markets. We started the program about two or three hours ago. Europe was on a high. Gold was a touch higher but it seemed that the markets was largely pricing in a clinton presidency. Now futures and the s p 500 sleeping a touch and european shares are off. I think traders are a little nervous. Tom to your point, i want to go here. Francine want to hedge. Tom want to hedge away but i would suggest by 2 00 or 3 00 p. M. This afternoon with the turnout we may have a better market response. Francine yep. Tom well continue. We have further coverage through the morning. With all due respect tonight, 5 00 p. M. , look for that and our special coverage at 7 00 p. M. With david and megan. Jonathan good morning, and welcome to bloomberg daybreak, on tuesday, november 8. Election day, and im Jonathan Ferro with david westin and alix steel. The biggest pop on the s p 500 since march of this year, futures going nowhere, down about four points on the s p 500. 22 on the dow. Yieldsn off yesterday, down about a basis point to 182 on treasuries and the dollar yen down, a weaker japanese yen. Head to the polls to decide who will be the next president. Results are expected at 7 00 p. M. Eastern time. Aocks are slightly lower with billion opinion polls showing Hillary Clinton slightly ahead. Kenneth make their final pitch to voters. Candidates take their final pitch to voters. Hillary clinton its job