25: Americans Are Miserable, and It's Swaying The Election

Tracy Alloway (0:09)

Welcome to Odd Lots, I'm Tracy Alloway, executive editor of Bloomberg Markets.

Joe Weisenthal (0:14)

And I'm Joe Weisenthal, managing editor of Bloomberg Markets.

Tracy Alloway (0:18)

Joe, there was quite a bit of politics that happened in New York last week, right?

Joe Weisenthal (0:21)

Yeah, it's pretty cool because in the primaries, usually by the time the vote comes around to New York, it's pretty settled who's going to be the winner. But in both the Democratic and Republican races, we have these very unusual races this year. And so suddenly, New York City was the center of the world. You had politicians coming to Pander, Ted Cruz going to a matzo factory, John Kasich eating Italian food up in the Bronx. Very unusual sites that you don't normally see in an election year.

Tracy Alloway (0:50)

So did you vote in the primaries?

Joe Weisenthal (0:54)

No comment.

No, I didn't. I don't support anyone yet.

Tracy Alloway (1:00)

Well, the reason I ask is not to gauge how dedicated you are to the Democratic process, but actually to try to make a point about markets and politics. And again, I know this is one of your favorite, favorite topics.

Joe Weisenthal (1:17)

I absolutely love this topic. I think one of the biggest stories in the world right now is this process that we're seeing where parties that are deemed to be centrist of one way or another across Europe and the US are seeing their support collapse, and we're seeing these more radical parties gain power. And so far, there hasn't been anything too dramatic. There's been no major default or nobody has left the Eurozone. But as the center of gravity moves to the outside, I think that's going to have profound implications on things.

Tracy Alloway (1:47)

Right. And there's a line of thinking, a strong line of thinking, that what's happened in markets over the past few years has a direct relation to the rise of fringe candidates or more extremist candidates, whatever you want to call them.

And I'm very excited to talk about that today because we're going to have someone on who basically talks about the public mood and its connection with markets constantly.

Joe Weisenthal (2:13)

Yeah, me too. This is going to be a great conversation. We're going to be talking with Peter Atwater of Financial Insights, who does all kinds of fascinating work looking at public polling, looking at when there's public euphoria, when the public is very depressed, what part of the public is depressed and so forth, and what that means for financial markets, investors. And there's a lot of interesting connections and interesting patterns throughout history to be gleaned.

Tracy Alloway (2:37)

All right. I'm excited. Let's do it.

Joe Weisenthal (2:43)

Peter Atwater of Financial Insights, thank you very much for joining us.

Peter Atwater (2:47)

Thank you, Joe. Glad to be here.

Joe Weisenthal (2:48)

So your work involves gauging the national mood, trying to figure out when people are in euphoria, when they're depressed, who's depressed, who's happy.

How do you do that? How do you gauge the national mood?

Peter Atwater (2:59)

So I look at some objective data, like Gallup's Daily Economic Confidence Index. That gives me a broad sense. But then I look specifically at extremes of wealth to see how are they doing. So I'll look at the Uber financial elite.

And when you see somebody like Bill Ackman flipping $90 million condos, that says something incredible about the euphoria of the financial elite. At the same time, things like the riots in Ferguson or in Baltimore are telling me a great deal about how the other end of the financial spectrum is doing.

Tracy Alloway (3:35)

So it feels like when you're gauging confidence, it kind of by necessity still has to have some degree of subjectivity in it, right?

Peter Atwater (3:43)

Yeah, I think the qualitative measures are often much more powerful than the quantitative measures. Certainly at extremes in mood, the behaviors are just so over the top, either good or bad, but the qualitative displays of how we reflect confidence are very often far easier to understand than just a whole pile of data.

Joe Weisenthal (4:08)

So we're in this election season right now, and one of the big storylines is the fact that both on the Democratic and Republican sides, there are these more radical candidates than what we're used to doing quite well.

We don't know if they'll win yet, but it's this phenomenon that everyone's talked about. And what does this tell you about the national move?

Peter Atwater (4:27)

Well, what it tells me is that on the Republican side, it is very depressed.