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Speaker 1: Broadcasting live to New York Cloomberg eleventh to Washington, d C,

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Speaker 1: Bloomberg to Boston, BLUEMBERG twelve hundreds to San Francisco, Bloomberg

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Speaker 1: nine to the Country Series Exam Channel one nine and

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Speaker 1: around the globe the Bloomberg Radio Plus happened. Bloomberg dot Com.

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Speaker 1: This is Bloomberg Surveillance is a thirty I Michael McKey

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Speaker 1: along with Tom Keene, and our economic indicators are brought

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Speaker 1: to you by Commonwealth Financial Network. When it's time to

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Speaker 1: change the conversation, talk about broker dealer r I A

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Speaker 1: that's ready to listen. Call eight six six four six

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Speaker 1: to visit Commonwealth dot com to learn more. No major

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Speaker 1: indicators today. The Chicago Fed National Activity Index is out

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Speaker 1: at zero point to eight. That's up from a negative

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Speaker 1: zero point three four in December and as much better

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Speaker 1: than the survey of a negative zero point one zero.

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Speaker 1: Not sure how much it tells us about what's actually

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Speaker 1: going on the market. US Manufacturing p M I do

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Speaker 1: out later this morning. Marks Andy is with us now,

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Speaker 1: And of course Mark is chief economist at Moody's Analytics,

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Speaker 1: and he keeps track of all things going on around

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Speaker 1: the world. Which makes him the perfect person to follow dodcasts,

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Speaker 1: who suggested that we may have about a thirty five

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Speaker 1: chance of recession and is extremely worried about the stagnant

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Speaker 1: economic growth prospects for the world and what central banks

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Speaker 1: are or are not doing about it. Mark, would you

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Speaker 1: share the pessimism, or at least the lack of optimism

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Speaker 1: about where we are going over the next six months

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Speaker 1: to a year, Well, I'd be I'd be a bit

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Speaker 1: more optimistic, you know, subjectively, put the odds of recession

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Speaker 1: in the United States that's somewhere between fift no. Globally,

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Speaker 1: there's more concerned. Uh, And I would concur with some

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Speaker 1: of the worries about what's going on overseas. But here

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Speaker 1: in the US, I think we're fine, We're okay shape. Well,

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Speaker 1: are we able to be an island and we continue

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Speaker 1: to grow if the rest of the world is having trouble. Yeah,

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Speaker 1: I think we're the engine of growth. We're driving the

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Speaker 1: train now and it's really the American consumer that's driving

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Speaker 1: the train and the American consumers doing their part. Growth

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Speaker 1: last year was very strong. Real consumer spending growth was

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Speaker 1: over three and as we've been seeing in the recent

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Speaker 1: data retail sales, vehicle sales, housing activity. I think the

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Speaker 1: consumer is going to continue to do their part. You know, Tom,

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Speaker 1: this reminds me of well is it about a decade ago?

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Speaker 1: I remember a book came out called Flying on One

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Speaker 1: Engine is an Ancient Home. Immediately went to the bargain visions,

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Speaker 1: get copies. Tom Keane put that together. Um, look at

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Speaker 1: how the United States was the only engine of growth.

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Speaker 1: Well there's another engine. Europe is okay too, you know,

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Speaker 1: it's you know, it's not gangbusters in Europe, but they

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Speaker 1: are growing solidly and uh, you know, I think everything

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Speaker 1: suggests that they'll continue to push forward. So it's not

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Speaker 1: just the US. But but you know, your sentiment is correct.

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Speaker 1: The global economy is is troubled. Mark. I want to

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Speaker 1: go back a little bit within your optimism and and

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Speaker 1: your immense chops and the books that you've done on

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Speaker 1: the New American Century and such, what happened in the

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Speaker 1: last two years. You were a great optimist, not an outlier,

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Speaker 1: but but you were looking for three percent plus real

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Speaker 1: GDP growth. You even voiced and I don't want to

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Speaker 1: put in your mouth, but you've voiced a four percent

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Speaker 1: real maybe six percent nominal, it didn't happen. I'm fascinated.

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Speaker 1: What's your why for what we've experienced? A good question. Well,

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Speaker 1: you know, it's interestingly not. The job market has done

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Speaker 1: better than I would have thought. Yes, we pret more jobs,

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Speaker 1: unemployment fell faster, we've gotten back to full employment, are

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Speaker 1: close to pretty quickly. Wage growth is picking up. So

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Speaker 1: if you look at the economy to the prison of

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Speaker 1: the labor market, no problem. You know, we're doing very

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Speaker 1: very well. So the you know, the the arithmetic suggests

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Speaker 1: that the reason that uh that I'm i was wrong

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Speaker 1: without GDP is productivity PRODUCTVTY growth has been very weak

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Speaker 1: and it has not picked up. And you know that

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Speaker 1: goes to you know, some pretty deep questions as to

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Speaker 1: what's going on. My sense is that we will see

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Speaker 1: productivity growth pick up, but that's still very much a forecast.

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Speaker 1: I knew you would go there. And if you tear

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Speaker 1: apart capital dynamics, labor dynamics, in the strange thing total

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Speaker 1: factor productivity, which is which did we miss on? Well,

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Speaker 1: you know, I think it's all of the above. Uh,

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Speaker 1: you know, my sense is here, I'll give you a

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Speaker 1: statistic um. When we look at the productivity it's the

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Speaker 1: top line numbers non farm business productivity, and since the

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Speaker 1: recovery began six net years ago, that's grown just under

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Speaker 1: one percent per anum over the periodest for context that

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Speaker 1: we've nonfarm business product has grown two percent for him

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Speaker 1: on ever since World War Two. So that's you know,

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Speaker 1: half the growth, less than half the growth. But if

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Speaker 1: you look at non financial corporate productivity, so think about

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Speaker 1: that for a second, non financial so exclude the financial sector,

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Speaker 1: and the non corporate sector productively growth has been one

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Speaker 1: point seven percent prematuring recovery. That's that's what I would expect,

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Speaker 1: one point seven percent. So what's going on? I think

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Speaker 1: it boils down to There's lots of reasons, but I

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Speaker 1: think the key reason is what the financial sector has

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Speaker 1: been going through a post crisis, because of the crisis

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Speaker 1: and because of the change in the regulatory environment. I

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Speaker 1: think that's the key weight on productivity. Can you tell, um,

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Speaker 1: when we were talking about this with Brad Hints about

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Speaker 1: how the financial sector has been hurting, can you tell

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Speaker 1: whether the troubles in the financial sector in the you know,

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Speaker 1: corporate Treasurer's office, uh in the chief financial officers office

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Speaker 1: are affecting the economy. Yeah. I mean the financial system

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Speaker 1: is like the circle source system of the real economy, right,

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Speaker 1: I mean that's credit flows are a key to growth,

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Speaker 1: to innovation, change, business formation, you know, all those key

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Speaker 1: dynamics are vital to productivity growth. So yeah, I think

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Speaker 1: if the financial sector is impaired or adjusting in ESSENSI

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Speaker 1: you know, the banks are big banks have gone from

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Speaker 1: have had to significantly increased amount of capital they hold.

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Speaker 1: And I'm not arguing that's a bad thing. I mean,

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Speaker 1: our banking system is now a fortress, but uh, you

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Speaker 1: know there is a cost to that, and I think

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Speaker 1: it's been morted in productivity growth. We'd like to get

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Speaker 1: sewn more. Is we wander through and into the summer.

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Speaker 1: Marks Andy with his Moody's analytics, and uh really look

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Speaker 1: forward to talking to him through the rest of the year.

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Speaker 1: His title us macro look no recession, he meanss no

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Speaker 1: words about it with with optimism is well, um, we're

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Speaker 1: gonna come back. Let me do a data check, Michael McKeen,

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Speaker 1: I are sorting out the Monday morning here. Uh, futures

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Speaker 1: up twenty down, futures up one seventy five euro one ten,

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Speaker 1: twenty six is a weaker euro with dollar Uh strength

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Speaker 1: um sterling is as sterling is really headline one forty

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Speaker 1: sterling one fort is weaker Uh. This morning, this hour

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Speaker 1: of surveillance has brought to you by Volvo Cars, White Planes.

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Speaker 1: Visit Volvo Cars, White Planes dot Com. Here's John Tucker

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Speaker 1: with headlines all right, Michael and Tom. After predicting he

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Speaker 1: could pull off a political upset, Nevada had more than

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Speaker 1: a week before potential wins on Super Tuesday, Bernie Sanders

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Speaker 1: is assuring supporters he is working hard to close the

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Speaker 1: gap on Saturday's primary in South Carolina. No poles in

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Speaker 1: South Carolina have shown Sanders closer than eighteen points down

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Speaker 1: from Hillary Clinton. Apple, resisting at court order requiring the

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Speaker 1: company to help unlock the iPhone of a dead terrorist,

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Speaker 1: says the US Congress should form a committee to discuss

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Speaker 1: privacy and personal freedoms. Apple would gladly take part in

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Speaker 1: such an effort, the company, saying it a statement on

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Speaker 1: its website today. The US Auto Safety Regular assist it's

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Speaker 1: investigating all too kouta corporation the airbag inflators that use

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Speaker 1: a chemical propellant ban from future models and will compile

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Speaker 1: data to determine whether to expand the industry's broadest recoil. Ever,

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Speaker 1: Syria's main political opposition will meet today to discuss a

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Speaker 1: proposed ceasefire whose potential for even limited success has been

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Speaker 1: undercut by a spike in violence claimed by Islamic state,

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Speaker 1: and the head of the UN Nuclear Agency says another

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Speaker 1: eleven nations need to step up to make the world

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Speaker 1: a safer place from the threat of nuclear material falling

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Speaker 1: into the hands of terrorists. That's a number of countries

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Speaker 1: needed to sign on to the Amendment to the Convention

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Speaker 1: on the Physical Protection of Nuclear Material. Global News twenty

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Speaker 1: four hours a day, powered by a twenty four hunded

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Speaker 1: journalists in more than one hundred fifty bureaus around the world.

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Speaker 1: I'm John Tucker, Michael and Tom. Thank you John. Time

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Speaker 1: now for the Katina Auto Group Bloomberg NBC Sports Update.

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Speaker 1: Here's Rob Bush, Good morning, Mike, Tom. The Rangers thrilled

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Speaker 1: the fans Madison Square Garden as two of the Marquee

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Speaker 1: Goltender squared off the Red Wings. Jimmy Howard had twenty

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Speaker 1: nine saves to Henrik Lundquist twenty two, but it was

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Speaker 1: a defenseman of all people, Kevin Klein, who netted the

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Speaker 1: game winner one nothing in overtime. It's it's a different

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Speaker 1: game obviously, and we don't practice it really, so it's

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Speaker 1: it's it's tough, and you just have to make sure

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Speaker 1: when they've got the part defensively or on the right

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Speaker 1: side of your guys, because you know, two on one

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Speaker 1: like that can can turn to the two one, you know,

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Speaker 1: the other way. So it's difficulty try and you know,

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Speaker 1: just make the most of your opportunities when you get

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Speaker 1: a chance. It was Klein's fifth goal of the year.

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Speaker 1: As the Rangers are just one point behind Florida for

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Speaker 1: the second seed in the East, they visit New Jersey

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Speaker 1: on Tuesday. The Aisles also played Tuesday in Minnesota. The basketball,

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Speaker 1: the Nets fell to eleven and twenty two at home

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Speaker 1: of the one on four ninety six lost to Charlotte.

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Speaker 1: Brook Lopez, who led the way with a double double,

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Speaker 1: wanted this one bad as a team gears up for

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Speaker 1: a nine game road trip. We had a great concentration

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Speaker 1: in certain parts of the game tonight, and uh, we

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Speaker 1: need to come with as much as possible. You know,

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Speaker 1: we're definitely going to stick together, obviously, being on the

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Speaker 1: road so long and just take it a game at time.

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Speaker 1: The Nats won't return to Brooklyn until March thirteenth. Nick's

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Speaker 1: entertained the Raptors of seventh thirty. Jimmer Fred debt he'll

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Speaker 1: join the team on a ten day contract. College Troops St.

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Speaker 1: John wiped out a nineteen point deficit at home, but

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Speaker 1: Isaiah Whitehead hit two game winning free throws as Seaton

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Speaker 1: Hall beat the Red Storm sixty one, and NASCAR Danny

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Speaker 1: Hamlin won the closest finish ever at the Dayton of five.

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Speaker 1: And that is your NBC Bloomberg Sports Update. Mike Don Rabushka,

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Speaker 1: thank you so much again. Share to the market. I'm

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Speaker 1: noticing curve flattening as well. Coming up, we're gonna continue

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Speaker 1: our discussion with markus Zandy of Moody's on a most

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Speaker 1: interesting American economy. If you go white Will C plus

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Speaker 1: I plus g plasnics, you can talk about any parts

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Speaker 1: of that equation. I'm most interested in Mark Zandy on

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Speaker 1: what it will take to get an investment. Going from

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Speaker 1: New York this Monday, Bloomberg Surveillance. The Sports report was

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