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Speaker 1: This is Bloomberg Surveillance. Overall, what we see is a

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Speaker 1: slow growth world where the fast growth markets are not

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Speaker 1: growing as fast as they used to. I look at

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Speaker 1: the banks, and sometimes it's hard to differentiate between a

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Speaker 1: great large gap versus a great small cap bank. On

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Speaker 1: the financial side, I don't want to sit here and

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Speaker 1: say we have a crystal ball and we know where

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Speaker 1: the price of oil is going in the future. We

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Speaker 1: just don't know. I mean, it can't fall forever, but

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Speaker 1: we just don't know where it's gonna go. Bloomberg Surveillance

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Speaker 1: your link to the world of economics, finance, and investment

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Speaker 1: on Bloomberg Radio. Good morning, I'm Michael Okay. It is

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Speaker 1: seven am on Wall Street eight pm in Shanghai, where

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Speaker 1: the world's most important finance ministers and central bankers will

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Speaker 1: gather this weekend to discuss the global economy and the

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Speaker 1: fear that grips investors these days. That fear back at

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Speaker 1: evidence this morning, European shares lower the stock six hundred

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Speaker 1: by almost eight points two point three percent. The docks

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Speaker 1: is down two hundred and forty points right now two

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Speaker 1: and a half percent. Here in the U S. SMP

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Speaker 1: features off sixteen nine tenths, nine tenths for dal features,

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Speaker 1: they're down a hundred and forty four. Nazzaki mini features

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Speaker 1: are off fifty one point two percent, a lot of

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Speaker 1: red on the screen. Fears back in the bond markets,

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Speaker 1: with the yield sliding Tenure note yield one point six

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Speaker 1: nine seventy three basis points yere two year the German

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Speaker 1: to your negative fifty four basis points, and the action

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Speaker 1: really in the currency markets, where the dollar index is

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Speaker 1: up four tenths today. Look at this end price one

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Speaker 1: eleven seventy eight, the Euro one O nine sixty five,

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Speaker 1: and Brexit fears driving the pound ever lower breaks through

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Speaker 1: one forty one eighty nine at the moment. But if

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Speaker 1: you are hoping, if you are trading on the idea

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Speaker 1: that G twenty will act this weekend to save you

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Speaker 1: and the world, you are wrong. That is the message

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Speaker 1: from US Treasury Secretary Jack lou in this remarkable and

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Speaker 1: exclusive interview with our David Weston. I'm hopeful that this

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Speaker 1: will be at G twenty where we take the commitment

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Speaker 1: that we got in in in the last meetings UH

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Speaker 1: for countries to refrain from competitive devaluation and push it

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Speaker 1: a little bit and and have that be something that

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Speaker 1: that is heard outside of the meeting room, but to

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Speaker 1: reassure the world that that that is a commitment taken

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Speaker 1: seriously with the twenty largest economies. What can we hope

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Speaker 1: to see in the communicate coming out of these meetings

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Speaker 1: that goes beyond that or is it a matter of

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Speaker 1: taking the last communicate and marking it up. I think

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Speaker 1: what's different is um These last months have made clear

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Speaker 1: that the weakness and demand globally is a problem that

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Speaker 1: can't be solved just for everyone. Looking to the United States.

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Speaker 1: I've been telling my counterparts for a couple of years now,

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Speaker 1: I think we're doing pretty well. They think we're doing

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Speaker 1: pretty well. But you can't count on the United States

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Speaker 1: providing all the demand for the world. We can't be

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Speaker 1: the consumer first and last resort. There needs to be more.

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Speaker 1: And what does that mean. It means that in countries

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Speaker 1: that are big economies, regions that have big economies, they

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Speaker 1: need to use policy tools. So you know, when China

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Speaker 1: looks at what can it do, it has to look

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Speaker 1: at how does that stimulate consumer demand? When Europe looks

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Speaker 1: at its tools, it looks beyond monetary policy but it

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Speaker 1: asks what can it do with fiscal policy as well,

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Speaker 1: And in a country like Japan, where you know there's

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Speaker 1: been two decades now of slower negative growth UM, they're

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Speaker 1: careful not to make the mistake of stopping the economy

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Speaker 1: with fiscal policies that put the brakes on, but instead

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Speaker 1: use fiscal policy to drive things forward. Fiscal policy can't

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Speaker 1: solve all the problems. There are structural issues that need

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Speaker 1: to be addressed uh some in some countries it's regulatory,

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Speaker 1: some countries it's labor markets, and some countries it's financial reform.

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Speaker 1: Those structural issues need to be addressed, but fiscal and

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Speaker 1: monetary policy are important tools. When used together, they're powerful

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Speaker 1: and that's the message we bring that combined with sharing

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Speaker 1: information about exchange rates, having a clear understanding that it

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Speaker 1: is unacceptable to target exchange rates to gain unfair advantage

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Speaker 1: outside of your country. That's a begger thy neighbor strategy.

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Speaker 1: That's just is a question of who gets more of

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Speaker 1: the existing pie. It doesn't grow the pie um. And

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Speaker 1: I think that as I talked to my counterparts, they

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Speaker 1: understand that that is they want to be clear that

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Speaker 1: that's not a direction that we the world community can

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Speaker 1: go and I'm hoping that this G twenty reinforces that.

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Speaker 1: You know, there's a lot of speculation in the world

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Speaker 1: that that that these conversations could lead to different kinds

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Speaker 1: of decisions on that. So underscoring that, um that that

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Speaker 1: is an important principle. I think it's pretty important. So

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Speaker 1: in your answer, you started actually with global demand, and

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Speaker 1: we hear econd of talking about the business leaders say

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Speaker 1: the problem we have to some extent is really a

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Speaker 1: demand problem at this point, what could be done? Do

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Speaker 1: you hope this communicate or the agreement coming out of

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Speaker 1: G twenty actually does have specifics about how global demand

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Speaker 1: could be stimulated. So, you know, I think if you

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Speaker 1: look at these agreements, they are are general principles that

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Speaker 1: apply in different countries in different ways, and there's always

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Speaker 1: a lot of discussion about the words, because no country

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Speaker 1: wants to sign onto general words that it knows it

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Speaker 1: will be uh, it will be behaving inconsistently with so

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Speaker 1: getting those principles right, getting a little bit more meat

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Speaker 1: on the bones makes a difference. I can't get ahead

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Speaker 1: of the process. We're still going back and forth before

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Speaker 1: we even meet on some of these issues. I don't

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Speaker 1: think this is a moment in time when you're going

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Speaker 1: to see individual countries make the kinds of specific commitments

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Speaker 1: that have been made in some other contexts that have

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Speaker 1: been marked by real crisis. This is not a moment

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Speaker 1: of crisis. This is a moment where there you know,

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Speaker 1: you've got real economies doing better than markets think. You know,

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Speaker 1: in some cases you have um a future that could

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Speaker 1: be influenced very much by the kinds of policies that

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Speaker 1: I'm describing, And the idea is how do you avoid

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Speaker 1: having things go to a place that you don't want

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Speaker 1: them to go. That's a different conversation than what do

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Speaker 1: you do when you're in the middle of a full

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Speaker 1: blown crisis. The only time you see the kinds of

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Speaker 1: communicates with that kind of detail is once you've gotten

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Speaker 1: beyond the point. So I'm hopeful that the kind of

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Speaker 1: conversation that I'm describing actually moves the dial Let me

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Speaker 1: put it this way. If the conversation were to go

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Speaker 1: the other way, and you were to see some reticence

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Speaker 1: to make the commitment to refrain from competitive evaluation and

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Speaker 1: not take a little bit of a step further, that

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Speaker 1: would be a cause of real concern because right now

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Speaker 1: it's a moment in time where if one country were

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Speaker 1: to move in that direction, there's a triggering effect of

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Speaker 1: knock on policies, and that would be a very bad

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Speaker 1: thing for the global economy. It wouldn't grow the economy

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Speaker 1: for sure, and I think it could lead to it

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Speaker 1: could lead to very negative ramifications, both economically and and

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Speaker 1: and geopolitically. So I think this is actually an important

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Speaker 1: moment and these kinds of principles really matter. There's no

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Speaker 1: substitute for seeing your counterpart. It's face to face and

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Speaker 1: talking to them. And the world will be watching to

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Speaker 1: some extent, particularly markets will be watching, economic actors, were

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Speaker 1: investors were watching. Are you concerned that expectations may be

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Speaker 1: too high about what the G twenty can deliver as

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Speaker 1: a practical matter when it comes to growth. Well, obviously,

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Speaker 1: my response in a bit is sending a clear message

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Speaker 1: don't don't expect a crisis response in a non crisis environment. Um,

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Speaker 1: it's not the job of finance ministers and central bank

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Speaker 1: governors to accelerate a crisis. It's our job to try

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Speaker 1: and avoid a crisis. If you're in a crisis, you

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Speaker 1: do different things. Obviously, the meetings after the financial crisis

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Speaker 1: during the recession had a different character to them. Um.

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Speaker 1: You know, I have, in my conversations with counterfarts, gotten

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Speaker 1: a strong sense that there is serious attention being given

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Speaker 1: to how to address the issues that we're discussing, and

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Speaker 1: I think together by having this kind of conversation, we

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Speaker 1: can lead to better outcomes. Does that mean that coming

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Speaker 1: out of this you'll have point estimates of what each

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Speaker 1: country is going to do? And how you rarely get

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Speaker 1: that out of a meeting like the so I think

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Speaker 1: that would not be the kind of expectation to have.

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Speaker 1: But I don't think it's unreasonable to have the expectations

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Speaker 1: that coming out of this will be a more stable

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Speaker 1: understanding of what the future may look like. And that

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Speaker 1: and that is um, that is an important thing. Because

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Speaker 1: you look at the world's reaction to the policymaking in

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Speaker 1: China over the last two months, really last six months

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Speaker 1: since August. UM, it's underscored how communication of policy is

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Speaker 1: critically important in order to have the market and other

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Speaker 1: counterparts around the world know what you intended, what you

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Speaker 1: can be expected to do. I think that it's not

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Speaker 1: just a problem a challenge in China. It's obviously a

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Speaker 1: problem as as as each of us undertakes policies, and

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Speaker 1: these meetings are a chance to to work through some

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Speaker 1: of those issues. US Treasury Secretary Jack lu Very UM

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Speaker 1: forthcoming forthright ended uh interview in which he basically tells,

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Speaker 1: dive at Weston. If you are in the markets and

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Speaker 1: you think that there's going to be some sort of

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Speaker 1: coordinated effort to save you, not gonna happen. Yeah. I

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Speaker 1: thought it was very preg twenty. It was way above

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Speaker 1: average in terms of always the Luke candor that was there.

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Speaker 1: But but I thought it was assertive. And when you

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Speaker 1: link that into the challenges that Cherry Yelling has looking

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Speaker 1: at it better than good US economy look at Lowses

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Speaker 1: earnings this morning, like home depots yesterday. I really think

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Speaker 1: it's something anybody on global Wall Street has to pay

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Speaker 1: attention to, even with markets responding of this morning with

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Speaker 1: their collective deterioration. Indeed, and um, at this point, uh,

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Speaker 1: you wonder how markets are gonna go from where they're

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Speaker 1: gonna go from here, knowing there's no safety dat underneath. Well,

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Speaker 1: that's what we have. Let me do a day to

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Speaker 1: check here first, though, folks. This morning, Bloomberg Surveillance ronch

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Speaker 1: you buy Investco. Investco believes it's time to bench the

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Speaker 1: benchmarks to consider active manage been in factor based strategies.

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Speaker 1: Find out more at investco dot com. Slash high conviction,

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Speaker 1: the futures out to weakness this morning and negative sixteen

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Speaker 1: gall futures negative one five too much to talk about

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Speaker 1: across assets oiled down a dollar nine cents, thirty dollars

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Speaker 1: seventy five cents. I'm gonna call that indetermined. In the middle.

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Speaker 1: On oil, we had a record tenure low in Germany

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Speaker 1: point one three one earlier this morning, right now point

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Speaker 1: one three five positive point one three five. On the

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Speaker 1: German tenures, Michael McKee mentioned the yen stronger one eleven

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Speaker 1: seventy nine right now. In the UK the pounds sterling

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Speaker 1: rather one thirty eight ninety means Charles Duma can't travel

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Speaker 1: here anytime soon. So we'll give you more data checks

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Speaker 1: through our morning. This hour of Surveillance brought to you

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Speaker 1: by Volvo Cars, White Planes. Visit Volvo Cars, White Plains

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Speaker 1: dot com. Here is John Tucker with the latest news headline.

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Speaker 1: Michael and Tom O'donald Trump's dominating victory of the Devada

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Speaker 1: Concuses pushes him further out ahead of his nearest competitors

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Speaker 1: for the Republican presidential domination, giving his unorthodox candidacy a

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Speaker 1: major boost heading into Super Tuesday contest next week. Hillary

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Speaker 1: Clinton doesn't just want to beat Bernie Sanders in South Carolina.

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Speaker 1: She wants to beat expectations. She's running more than twenty

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Speaker 1: points ahead of Sanders it most polls hold heading into

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Speaker 1: Saturday's Democratic presidential primary, buoyed by overwhelming support from the

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Speaker 1: state's black voters, and Over Technologies starting its very first

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Speaker 1: motorcycle taxi service in Bangkok, where perennial congestion leads to

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Speaker 1: rush hour traffic speeds in the Thailand capital of just

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Speaker 1: about six point eight mile Global News twenty four hours

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Speaker 1: a day, powered by our twenty journalists, had more than

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Speaker 1: one hundred fifty news bureaus around the world. I'm John Tucker,

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Speaker 1: Mike and Tom sand Tucker. Thanks so much on this

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