WEBVTT - Dimon's Recession Warning; XPeng Earnings Preview

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. Welcome to the Bloomberg

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<v Speaker 1>Daybreak Asia Podcast. I'm Doug Chrisner. The uncertainty around those

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<v Speaker 1>ever changing tariffs from the Trump administration has fueled the

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<v Speaker 1>debate as to whether a global recession is inevitable. The

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<v Speaker 1>head of JP Morgan Chase, Jamie Diamond, at this point,

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<v Speaker 1>is not willing to take it off the table. Diamond

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<v Speaker 1>spoke exclusively to Bloomberg and said, there is still a

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<v Speaker 1>lot of uncertainty, although some of it preceded the Trump administration.

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<v Speaker 2>We had large deficits, instur rates going up, inflation going

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<v Speaker 2>up in summer, you know, tariffs and things, and of

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<v Speaker 2>course the geopolitical situation is very tense, very difficult and

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<v Speaker 2>hard to resolve.

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<v Speaker 1>Jamie Diamond there, the CEO of JP Morgan Chase, speaking

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<v Speaker 1>to Bloomberg from the bank's Global Markets conference in Paris.

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<v Speaker 1>In a moment, we'll be taking a look at the

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<v Speaker 1>ev industry in China and preview next week's earning from

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<v Speaker 1>expun We'll be hearing from Linda Leu, China auto reporter

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<v Speaker 1>for Bloomberg News. But we begin this morning with markets

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<v Speaker 1>and in the States, where the latest economic news was

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<v Speaker 1>on the soft side and very much supportive of FED

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<v Speaker 1>rate cuts. Wholesale prices unexpectedly fell last month by the

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<v Speaker 1>most in five years. Growth in retail sales decelerated notably,

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<v Speaker 1>factory production fell for the first time in six months,

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<v Speaker 1>and confidence among homebuilders slumped. So now, at this point,

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<v Speaker 1>markets are betting on at least two FED rate cuts

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<v Speaker 1>this year to prevent a recession. For a closer look,

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<v Speaker 1>I'm joined now by Michael Green. He is the chief

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<v Speaker 1>strategist at Simplify Asset Management. Michael is on the line

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<v Speaker 1>from here in New York City. Good of you to

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<v Speaker 1>make time to chat with us. Michael, Where are you

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<v Speaker 1>on the recession call right now?

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<v Speaker 3>So I lean towards what Jamie is reiterating, which is

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<v Speaker 3>that we have to consider that the prospect of the

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<v Speaker 3>economy slowing markedly and continuing to slow, given the disruption

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<v Speaker 3>of tariffs, given the uncertainty around interest rate, and much

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<v Speaker 3>more importantly, I would actually argue giving the now acknowledged

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<v Speaker 3>deterioration in household balance sheets, where we're seeing student loan

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<v Speaker 3>debt come on very quickly, We're seeing credit card delinquencies

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<v Speaker 3>and defaults start to rise. Dramatically. Auto repossessions and delinquencies

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<v Speaker 3>are also rising. The evidence is very clear that at

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<v Speaker 3>least the lower fifty percent of the US consumer is

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<v Speaker 3>under tremendous amounts of stress that was largely camouflaged by

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<v Speaker 3>the coverage that was provided. And when we decided not

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<v Speaker 3>to collect student loans for example, now we're actually going

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<v Speaker 3>in the opposite direction. We're beginning the process of garnishing wages, etc.

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<v Speaker 3>People cannot escape from this. It's important to remember that

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<v Speaker 3>the combination of tariffs and the resumption of student loan debt,

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<v Speaker 3>as well as the increase in reporting around things like

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<v Speaker 3>buy now, pay later, are effectively forcing austerity onto a

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<v Speaker 3>sizable fraction of US households. That can feel like caution,

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<v Speaker 3>but it actually very quickly turns into they can't do

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<v Speaker 3>what they want want to do, and that shows up

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<v Speaker 3>as reduced corporate earnings, it shows up as reduced economic vitality.

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<v Speaker 3>Introduce even more uncertainty into that with only a ninety

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<v Speaker 3>day pause around tariffs, and it really does feel like

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<v Speaker 3>we are setting up for something that will ultimately be

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<v Speaker 3>called a recession.

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<v Speaker 1>So a ninety day pause while the two sides, the

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<v Speaker 1>US and China, negotiate. There is still a risk that

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<v Speaker 1>some of the tariffs that are already in place will

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<v Speaker 1>produce a higher level of inflation. Look at Walmart today

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<v Speaker 1>saying that it will begin raising some prices. Is there

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<v Speaker 1>the risk now that we could see a reacceleration in

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<v Speaker 1>the level of inflation.

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<v Speaker 3>Well, I think there's absolutely a risk, but I think

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<v Speaker 3>we have to keep it in context. Right, we've experienced

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<v Speaker 3>largely goods deflation for the past two years. That is

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<v Speaker 3>meant that the price of eggs has fallen relative to

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<v Speaker 3>its peaks during the COVID component's, toilet paper has fallen,

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<v Speaker 3>new car prices have fallen, et cetera. There have really

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<v Speaker 3>only been two or three key areas that have sustained

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<v Speaker 3>or accelerated pricing. Those would be things like insurance. To

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<v Speaker 3>a certain extent. Home prices and certainly the costs associated

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<v Speaker 3>with homes, whether that is maintenance, insurance, taxes, etc. Have

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<v Speaker 3>all risen dramatically and placed additional stress on us households.

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<v Speaker 3>But buying large goods has been a very good story

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<v Speaker 3>from the inflation front for the past two years or so,

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<v Speaker 3>and now that is coming under pressure at exactly the

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<v Speaker 3>time that we're starting to see the services component, things

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<v Speaker 3>like owner's equivalent rent or rent itself begin to turn negative,

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<v Speaker 3>and so it's going to be a We're going to

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<v Speaker 3>be skating a very very fine line. Those things that

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<v Speaker 3>have helped for the past two years are going to

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<v Speaker 3>become less important. The things that have hurt us over

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<v Speaker 3>the past two years are finally starting to get the

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<v Speaker 3>catalysts to push the more negative. The net result is

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<v Speaker 3>it's a toss up, and I think we'll probably see

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<v Speaker 3>a little bit of inflation, but certainly nothing that strikes

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<v Speaker 3>me as anything like what we experienced in twenty twenty

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<v Speaker 3>and twenty twenty one.

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<v Speaker 1>Well, let's talk a little bit about how the FED

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<v Speaker 1>may navigate this. Today we heard from FED Governor Michael

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<v Speaker 1>Barr and he was saying the econ yes, HiT's on

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<v Speaker 1>solid ground, but he added that terraff related supply chain

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<v Speaker 1>disruptions could lead to lower growth and higher inflation. Kind

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<v Speaker 1>of what we've been talking about a little bit. Where

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<v Speaker 1>is the FED right now in your view and the

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<v Speaker 1>degree to which we could see some sort of accommodation

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<v Speaker 1>between now and the end of the year.

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<v Speaker 3>Well, I think it's really important to remember that when

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<v Speaker 3>you introduce inflation. And I'm using that almost in air quotes.

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<v Speaker 3>When you introduce inflation that is tied to tax increases,

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<v Speaker 3>things like tariffs, et cetera, that's restrictive. It's not the

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<v Speaker 3>sign of inflation that is being driven by excessive demand.

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<v Speaker 3>It's being driven by costs that are being imposed upon

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<v Speaker 3>the system. To raise interest rates or to resist cutting

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<v Speaker 3>interest rates in response to that is beyond any economic

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<v Speaker 3>policy that I know. The FED itself explicitly addressed this,

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<v Speaker 3>and it's twenty eighteen or it's analysis of the twenty

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<v Speaker 3>eighteen teriffs saying the right answer is simply to have

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<v Speaker 3>done nothing, to have allowed it to pass through the system.

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<v Speaker 3>And I'm hopeful that they will do something like that.

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<v Speaker 3>I think the FED, like many of us, though, is

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<v Speaker 3>at this point so scarred by the transitory inflation, which

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<v Speaker 3>it was. It was transitory in terms of the rate

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<v Speaker 3>of price change, but it has been durable in terms

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<v Speaker 3>of the level of prices. And so we all look

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<v Speaker 3>at the eggs that we buy, in the milk that

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<v Speaker 3>we buy, and we recognize that we pay more for it.

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<v Speaker 3>Now that has created effectively a scar or a scab

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<v Speaker 3>that we just can't help but pick at and the

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<v Speaker 3>FED is unfortunately kind of trapped by that. They're very,

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<v Speaker 3>very frightened that inflation could pick up again, even though

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<v Speaker 3>forward looking metrics inflation swaps and in particular, long dated

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<v Speaker 3>inflation swaps, have shown absolutely no sign that the market

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<v Speaker 3>is trying to price in significant inflation risks.

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<v Speaker 1>So, to go back to the tariff story briefly, we

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<v Speaker 1>know that the aim, at least articulated by the Trump

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<v Speaker 1>administration was to reshore American manufacturing. Do you have a

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<v Speaker 1>sense of whether this is going to be effective? Is

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<v Speaker 1>it too soon to know given what you're hearing from

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<v Speaker 1>the administration? And I know now the President is in

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<v Speaker 1>the Middle East where he is trying to kind of

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<v Speaker 1>drum up a lot of foreign direct investment into the

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<v Speaker 1>United States. But do you have a sense of whether

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<v Speaker 1>or not this tariff policy is going to produce the

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<v Speaker 1>desired outcome?

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<v Speaker 3>Well, again, I think you have to be very careful

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<v Speaker 3>in terms of interpreting what is being used as press

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<v Speaker 3>versus what is being used as an actual objective. With

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<v Speaker 3>unemployment in the four percent range, with a very few

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<v Speaker 3>Americans trained or desiring work, and in a traditional assembly

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<v Speaker 3>line type framework, we're not going to see manufacturing, at

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<v Speaker 3>least in its traditional form. Come back. What we have

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<v Speaker 3>provided is significant cover for items that are of national

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<v Speaker 3>security importance to be reshored to at least be friendshored

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<v Speaker 3>in terms of their underlying components, and equally important, I

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<v Speaker 3>think it's it would be you would be remiss if

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<v Speaker 3>you did not acknowledge that, for all the bluster and

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<v Speaker 3>for all the headline about how terribly this was going

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<v Speaker 3>for the United States, in this ninety day cooling off period,

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<v Speaker 3>China has accepted significantly higher trade barriers on its products

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<v Speaker 3>into the United States and largely lifted restrictions and trade

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<v Speaker 3>barriers and tariffs on products from the United States. So

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<v Speaker 3>it's very hard to score this as anything other than

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<v Speaker 3>a win for the Trump administration. We may not like

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<v Speaker 3>the manner in which it transpired, but it does bring

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<v Speaker 3>home the real heart of the message, which is, at

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<v Speaker 3>the end of the day, when you are talking about

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<v Speaker 3>trade policy, the customer is always right. The US runs

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<v Speaker 3>a massive trade surplus in goods with China and largely

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<v Speaker 3>with the rest of the world. We run a significant

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<v Speaker 3>trade surplus in services. Those in many situations, things like

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<v Speaker 3>Google searches or AI searches, etc. Are somewhat irreplaceable chashki's

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<v Speaker 3>from China. We can figure out how to get by

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<v Speaker 3>without them, right, most of the stuff that we're buying

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<v Speaker 3>from China, Americans, if forced to economize and have one

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<v Speaker 3>less potato peeler for a six month period, we'll probably

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<v Speaker 3>figure out how to do it with a knife again.

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<v Speaker 3>And so again, I'm not trying to denigrate the incredible

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<v Speaker 3>innovation stuff that China produces, but the simple reality it's

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<v Speaker 3>the customer is always right. And the stage that we

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<v Speaker 3>are in this trade negotiation suggests that that logic has

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<v Speaker 3>played through.

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<v Speaker 1>One of the major developments that occurred during the President's

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<v Speaker 1>tour of the Mid East his team working out with

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<v Speaker 1>agreements for parties in Saudi Arabia to acquire tens of

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<v Speaker 1>thousands of semiconductors used for artificial intelligence from both in

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<v Speaker 1>Nvidia and advanced micro devices. Where are we right now

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<v Speaker 1>in the global race for AI and has this visit

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<v Speaker 1>by the President to the Mid East changed the landscape

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<v Speaker 1>in any way? Well, again, I.

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<v Speaker 3>Would just emphasize that it's very early to know. Right,

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<v Speaker 3>we know what we've been told, we know the articulation,

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<v Speaker 3>the attraction of AI and surveillance hardware is incredibly attractive

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<v Speaker 3>to many of these governments, so I'm not the least

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<v Speaker 3>bit surprised that they're very happy to increase their spend

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<v Speaker 3>in these areas. But the simple reality is that AI

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<v Speaker 3>is somewhat the real deal. I will tell you from

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<v Speaker 3>a professional standpoint, I have flipped a massive amount of

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<v Speaker 3>the time that I would have spent doing Google searches

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<v Speaker 3>or traditional data analysis using cell side research. Much of

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<v Speaker 3>that has now migrated over to chat, GBT or to GROCK.

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<v Speaker 3>If I want to seek out inflammatory positions or to

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<v Speaker 3>perplexity with their clawed AI, I am increasingly using those.

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<v Speaker 3>I would suggest that somewhere around fifty to sixty percent

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<v Speaker 3>of my search activity has been now replaced by various

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<v Speaker 3>forms of AI utilization. And I liken it to having

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<v Speaker 3>an almost unlimited number of first year analysts. Are they

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<v Speaker 3>really smart?

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<v Speaker 4>Yes?

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<v Speaker 3>Can they be trusted to arrive at the right answer,

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<v Speaker 3>right answer and have extraords nearly high quality work product? No,

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<v Speaker 3>I have to manage them in that process. But it

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<v Speaker 3>is an incredible revolution, and I think we're seeing both

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<v Speaker 3>the combination of fear and recognition that this is a

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<v Speaker 3>true revolutionary framework that is not significantly different than what

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<v Speaker 3>we saw with the Internet. It's starting to sync in.

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<v Speaker 1>Michael will leave it there, great conversation. Thank you so

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<v Speaker 1>much for joining us. Michael Green, he is the chief

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<v Speaker 1>strategist at Simplify Asset Management. Joining from here in New

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<v Speaker 1>York City on the Daybreak Asia podcast. Welcome back to

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<v Speaker 1>the Daybreak Asia Podcast. I'm Doug Krisner. The Chinese EV

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<v Speaker 1>maker Xpong is gearing up for its earnings report, and

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<v Speaker 1>according to options data compiled by Bloomberg, Xpong shares may

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<v Speaker 1>move by nearly eight percent. Xpong, if you're wondering, is

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<v Speaker 1>set to release results next Wednesday before the market opens.

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<v Speaker 1>For a closer look now at what we may hear

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<v Speaker 1>from this automaker. I'm joined by Bloomberg's Linda Liu. She

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<v Speaker 1>is China autos reporter. She's on the line from Hong Kong. Linda,

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<v Speaker 1>thank you for making time to chat with me. This

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<v Speaker 1>is such a competitive space when you talk about EV

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<v Speaker 1>manufacturers in China. How does x pun differentiate it self

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<v Speaker 1>from the crowd.

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<v Speaker 4>So x Pung is a really interesting EV maker. It's

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<v Speaker 4>been tilted as the Tesla of China because their advanced

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<v Speaker 4>driver assistance technology that's similar to Tesla's FSD is considered

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<v Speaker 4>one of the best in China, so they use that

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<v Speaker 4>as a strong selling point to set themselves apart from

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<v Speaker 4>the other competition, which can go from very affordable mass

0:12:41.280 --> 0:12:46.200
<v Speaker 4>market models sold by BYD to a very upscale large

0:12:46.480 --> 0:12:50.000
<v Speaker 4>family size SUVs sold by rivals like Neo.

0:12:50.360 --> 0:12:52.959
<v Speaker 1>There was recently the Auto show in Shanghai, and I'm

0:12:53.000 --> 0:12:56.840
<v Speaker 1>curious about what x pun unveiled at that exhibit.

0:12:57.520 --> 0:13:01.000
<v Speaker 4>It's actually it was really funny at the Shanghai Auto

0:13:01.040 --> 0:13:04.960
<v Speaker 4>Show because the object that stole the show was a

0:13:05.080 --> 0:13:09.120
<v Speaker 4>humanoid robot that X Punk's CEO brought with him to

0:13:09.200 --> 0:13:13.360
<v Speaker 4>the stage. And again you can see the similarity to

0:13:13.600 --> 0:13:18.240
<v Speaker 4>Tesla there, who is also working on their own humanoid robots.

0:13:19.280 --> 0:13:23.760
<v Speaker 4>So the robots took a walk around the stage. But

0:13:23.800 --> 0:13:27.600
<v Speaker 4>the CEO, you know, also introduced new models for the

0:13:27.640 --> 0:13:32.400
<v Speaker 4>company as well as projecting very strong confidence for the

0:13:32.440 --> 0:13:35.160
<v Speaker 4>rest of the year. Its sales have been on the

0:13:35.240 --> 0:13:40.199
<v Speaker 4>roll is growing pretty fast and that's driven largely by

0:13:40.360 --> 0:13:43.640
<v Speaker 4>a new affordable model called the Mona, which they launched

0:13:43.920 --> 0:13:47.640
<v Speaker 4>last year. So the year ahead, I think x punk

0:13:47.720 --> 0:13:50.480
<v Speaker 4>is very confident of a good performance to.

0:13:50.480 --> 0:13:54.840
<v Speaker 1>What extent is this company looking to markets outside of China.

0:13:54.920 --> 0:13:59.360
<v Speaker 1>I'm thinking in particular of Europe and perhaps to a

0:13:59.400 --> 0:14:00.880
<v Speaker 1>lesser extent in South America.

0:14:01.720 --> 0:14:06.000
<v Speaker 4>Yes, x said that they are ramping up global sales

0:14:06.320 --> 0:14:10.360
<v Speaker 4>this year. They marked their expansion drive with a really big,

0:14:10.559 --> 0:14:15.560
<v Speaker 4>glitzy event in Hong Kong where they invited media as

0:14:15.640 --> 0:14:18.920
<v Speaker 4>well as EV owners to fly in from all over

0:14:18.960 --> 0:14:23.960
<v Speaker 4>the world to see their latest flagship MPV, which is

0:14:24.000 --> 0:14:28.760
<v Speaker 4>a luxury minivan launch. X Pong is going to start

0:14:28.800 --> 0:14:33.160
<v Speaker 4>localizing production in Indonesia this year, and they said they've

0:14:33.200 --> 0:14:37.960
<v Speaker 4>also set up operations in Germany. Obviously, Europe is going

0:14:37.960 --> 0:14:40.440
<v Speaker 4>to be a very important market for them because it's

0:14:40.960 --> 0:14:44.040
<v Speaker 4>a market where they're very friendly to evs and has

0:14:44.200 --> 0:14:49.160
<v Speaker 4>the spending power. Latin America is definitely another place where

0:14:49.440 --> 0:14:54.520
<v Speaker 4>x pong is working to expand into, but they are

0:14:54.560 --> 0:14:59.000
<v Speaker 4>also going to face intense competition there because other Chinese

0:14:59.080 --> 0:15:02.880
<v Speaker 4>EV makers like Byd as well as another automaker called

0:15:02.920 --> 0:15:07.240
<v Speaker 4>great Wall Motor, already has factories in Brazil. So x

0:15:07.280 --> 0:15:10.040
<v Speaker 4>pong is also going to have to contend with a

0:15:10.080 --> 0:15:11.760
<v Speaker 4>lot of competition globally.

0:15:12.080 --> 0:15:14.520
<v Speaker 1>When I think of some of the Chinese EV makers

0:15:14.640 --> 0:15:18.160
<v Speaker 1>automakers generally speaking, I think about the degree to which

0:15:18.640 --> 0:15:23.240
<v Speaker 1>the smartphone has been integrated into some of the designs.

0:15:23.680 --> 0:15:25.800
<v Speaker 1>Is that the case very much with x Pong.

0:15:26.600 --> 0:15:31.320
<v Speaker 4>Yes, x Pong has a very i would say advanced

0:15:31.880 --> 0:15:36.000
<v Speaker 4>entertainment system in their evs, although I will have to

0:15:36.040 --> 0:15:40.960
<v Speaker 4>say that's becoming very common amongst Chinese evs. So not

0:15:41.040 --> 0:15:45.280
<v Speaker 4>only x Pong, You've got an actual smartphone maker, sell

0:15:45.360 --> 0:15:49.240
<v Speaker 4>Me that has entered the industry their first EV that

0:15:49.480 --> 0:15:53.640
<v Speaker 4>s U seven are sold really well, and that just

0:15:53.680 --> 0:15:57.960
<v Speaker 4>shows how fast the Chinese market is kind of adapting

0:15:58.120 --> 0:16:04.280
<v Speaker 4>to this changing, changing case. You've got customers are very

0:16:04.320 --> 0:16:08.440
<v Speaker 4>open to technology. So now cars are not just I guess,

0:16:08.440 --> 0:16:11.080
<v Speaker 4>the transportation tool that takes you from A to B,

0:16:11.760 --> 0:16:16.240
<v Speaker 4>but people now also expect to be able to look

0:16:16.320 --> 0:16:21.000
<v Speaker 4>up their roots on a very large screen mounted on

0:16:21.520 --> 0:16:24.040
<v Speaker 4>the dash and be able to talk to their car

0:16:24.440 --> 0:16:27.440
<v Speaker 4>as well as watch movies because some of these cars

0:16:27.480 --> 0:16:32.960
<v Speaker 4>have theater screens installed. So yeah, the pace from Chinese

0:16:33.000 --> 0:16:34.840
<v Speaker 4>customers are very tech focused.

0:16:35.000 --> 0:16:37.560
<v Speaker 1>When you and I have spoken in the past about

0:16:37.600 --> 0:16:40.360
<v Speaker 1>the EV market in China, one of the issues has

0:16:40.440 --> 0:16:45.080
<v Speaker 1>been over capacity or certainly a crowded industry to the

0:16:45.120 --> 0:16:48.120
<v Speaker 1>extent that we may see even more consolidation. Is that

0:16:48.240 --> 0:16:49.480
<v Speaker 1>still the case right now?

0:16:50.520 --> 0:16:53.800
<v Speaker 4>Yes, you're right, Doug, So over capacity is still quite

0:16:53.840 --> 0:16:59.600
<v Speaker 4>a big issue for legacy automakers, especially foreign joint ventures.

0:17:00.240 --> 0:17:06.560
<v Speaker 4>You've got companies like the Japanese automakers Toyota, Nissan, and Honda,

0:17:06.600 --> 0:17:10.680
<v Speaker 4>as well as American ones GM and Ford. Are they

0:17:10.800 --> 0:17:14.359
<v Speaker 4>facing slumping demand in China? They are trying very hard

0:17:14.400 --> 0:17:17.960
<v Speaker 4>to come up with new models that probably fit more

0:17:18.000 --> 0:17:21.919
<v Speaker 4>to the taste of Chinese customers. We also saw Toyota

0:17:22.480 --> 0:17:27.320
<v Speaker 4>announce a new EV factory that's for the Lexus brand

0:17:27.400 --> 0:17:30.840
<v Speaker 4>in Shanghai, So you see they are trying to grow

0:17:30.920 --> 0:17:33.840
<v Speaker 4>EV capacity, but that means they are going to have

0:17:33.880 --> 0:17:39.639
<v Speaker 4>to slash internal combustion engine capacity, which just is not

0:17:40.280 --> 0:17:41.600
<v Speaker 4>selling well these days.

0:17:41.880 --> 0:17:44.679
<v Speaker 1>What do we know about the research and development that

0:17:44.920 --> 0:17:49.480
<v Speaker 1>x pund has undertaken, maybe for something like a flying car.

0:17:49.600 --> 0:17:50.720
<v Speaker 1>Is that a reality?

0:17:51.440 --> 0:17:55.280
<v Speaker 4>Yes, x PUND is very confident about rolling out their

0:17:56.040 --> 0:18:01.040
<v Speaker 4>flying car. It's more of a like a package. They

0:18:01.160 --> 0:18:05.879
<v Speaker 4>have kind of a package where you have the flying

0:18:06.240 --> 0:18:11.600
<v Speaker 4>car part that also lands onto a land vehicle. So

0:18:12.560 --> 0:18:17.080
<v Speaker 4>for this product, they are expecting mass production within the

0:18:17.119 --> 0:18:21.680
<v Speaker 4>next couple of years, and they're hoping that with regulatory

0:18:21.880 --> 0:18:24.879
<v Speaker 4>approval also coming online, they'll be able to sell this

0:18:25.000 --> 0:18:28.760
<v Speaker 4>to the mass market soon. And so we're watching this

0:18:28.840 --> 0:18:33.280
<v Speaker 4>space closely as well, because xpongs not only not the

0:18:33.320 --> 0:18:38.440
<v Speaker 4>only company exploring this new type of technology. Other automakers

0:18:39.400 --> 0:18:43.160
<v Speaker 4>like another Guangzhou based automaker called GAC is also working

0:18:43.280 --> 0:18:49.199
<v Speaker 4>on their evy toll slash flying car. Another area of

0:18:49.280 --> 0:18:52.160
<v Speaker 4>research that x poem is focusing on is their own

0:18:52.320 --> 0:18:57.359
<v Speaker 4>chip development. Given how much geopolitics is impacting the auto

0:18:57.440 --> 0:19:02.760
<v Speaker 4>supply chain, expunks that they are hoping to launch their

0:19:02.880 --> 0:19:07.840
<v Speaker 4>own AI chip and start fitting it into the evs,

0:19:08.240 --> 0:19:11.840
<v Speaker 4>So hopefully with more of bringing more of these technology

0:19:11.960 --> 0:19:15.399
<v Speaker 4>in house, they can minimize the impact to their supply

0:19:15.520 --> 0:19:17.160
<v Speaker 4>chain from geopolitics.

0:19:17.400 --> 0:19:20.320
<v Speaker 1>You mentioned a moment ago that expectations are that we

0:19:20.359 --> 0:19:23.359
<v Speaker 1>will see pretty strong sales from x PUNK. I'm curious

0:19:23.359 --> 0:19:26.760
<v Speaker 1>about the extent to which the government may be trying

0:19:26.800 --> 0:19:31.240
<v Speaker 1>to stimulate demand for evs to an even greater extent.

0:19:31.440 --> 0:19:33.600
<v Speaker 1>Is that happening, Yes.

0:19:33.680 --> 0:19:39.040
<v Speaker 4>For the second year, Chinese government has extended ash cash

0:19:39.080 --> 0:19:46.399
<v Speaker 4>for Clunker's scheme where buyers who purchase qualifying evs or

0:19:46.440 --> 0:19:53.879
<v Speaker 4>even fuel efficient gasoline cars may qualify for a subsidy

0:19:54.000 --> 0:19:58.920
<v Speaker 4>of up to twenty thousand yen. That subsidy has been

0:19:59.040 --> 0:20:03.960
<v Speaker 4>a key driver for maintaining EV sales because a previous

0:20:04.920 --> 0:20:09.760
<v Speaker 4>subsidies scheme ended in twenty twenty three. So I think

0:20:09.800 --> 0:20:14.199
<v Speaker 4>the government probably will extend our programs like this in

0:20:14.240 --> 0:20:17.439
<v Speaker 4>the future to try to keep up consumption because the

0:20:17.480 --> 0:20:22.439
<v Speaker 4>economy slowdown is weighing on sentiment in China, so we

0:20:22.560 --> 0:20:25.760
<v Speaker 4>expect support to continue from the government's.

0:20:25.720 --> 0:20:28.119
<v Speaker 1>Linda, thank you so much for helping us preview the

0:20:28.160 --> 0:20:31.440
<v Speaker 1>earnings in the week ahead from x punk. Linda Liu

0:20:31.760 --> 0:20:35.400
<v Speaker 1>is a Bloomberg China autos reporter joining from Hong Kong

0:20:35.480 --> 0:20:40.600
<v Speaker 1>here on the Daybreak Asia podcast. Thanks for listening to

0:20:40.600 --> 0:20:45.560
<v Speaker 1>today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday,

0:20:45.600 --> 0:20:49.520
<v Speaker 1>we look at the story shaping markets, finance, and geopolitics

0:20:49.520 --> 0:20:52.800
<v Speaker 1>in the Asia Pacific. You can find us on Apple, Spotify,

0:20:52.960 --> 0:20:56.439
<v Speaker 1>the Bloomberg Podcast YouTube channel, or anywhere else you listen.

0:20:56.840 --> 0:20:59.719
<v Speaker 1>Join us again tomorrow for insight on the market moves

0:20:59.760 --> 0:21:04.360
<v Speaker 1>from Hong Kong to Singapore and Australia. I'm Doug Prisoner

0:21:04.520 --> 0:21:05.919
<v Speaker 1>and this is Bloomberg,