WEBVTT - Surveillance: Outcomes For Sterling With Rabobank's Foley 0:00:09.840 --> 0:00:13.880 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Leie. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.880 Bloomberg dot Com, and of course on the Bloomberg Something 0:00:27.920 --> 0:00:29.920 A lot of people forget, Tomas that phase one is 0:00:29.960 --> 0:00:33.680 about agreeing to withdraw from the European Union. Let's phase one. 0:00:33.680 --> 0:00:36.600 Then you've got to agree what the future relationship looks like. 0:00:36.640 --> 0:00:37.960 There's still a lot of work to be done. And 0:00:38.000 --> 0:00:40.080 as you point out, Tom, an agreement between the EU 0:00:40.360 --> 0:00:42.360 and the British government. Now we've got to get it 0:00:42.400 --> 0:00:45.280 through parliament. Headline just crossing the Bloomberg that according to 0:00:45.360 --> 0:00:49.280 party officials, the DUP won't vote for Johnson's Brexit deal. 0:00:49.400 --> 0:00:51.199 I want to try and re establish that connection with 0:00:51.320 --> 0:00:54.920 ros Then Matheson now bloom Big Executive editor for International Government. 0:00:55.320 --> 0:00:57.480 Great to have you with us. Let's just talk about 0:00:57.480 --> 0:00:59.920 what's been agreed between part Prime Minister Boris Johnson and 0:01:00.080 --> 0:01:05.280 EU and why the DUP is still against this deal. So, 0:01:05.319 --> 0:01:07.959 as you said, we're just getting news crossing the Wye 0:01:08.000 --> 0:01:10.839 now that the DUP says it won't vote for Johnson's 0:01:10.880 --> 0:01:13.839 Brexit deal. He's going to put it towards before Parliament 0:01:14.400 --> 0:01:17.200 in the UK on Saturday. There was always the key 0:01:17.319 --> 0:01:21.120 question and now the question really is did Johnson jump begun? 0:01:21.280 --> 0:01:23.759 Did he did he get an agreement with the European 0:01:23.840 --> 0:01:26.479 Union when he still has got things ironed out at 0:01:26.640 --> 0:01:30.400 back end in terms of lawmakers in the UK, because 0:01:30.400 --> 0:01:32.839 it's one thing to get the agreement with the another 0:01:32.880 --> 0:01:35.560 thing to get it through Parliament. It's unclear if the 0:01:35.640 --> 0:01:39.039 DUP is still just holding out as a negotiating tactic 0:01:39.080 --> 0:01:41.039 and with a with a bit more discussion over the 0:01:41.080 --> 0:01:43.640 next twenty four hours, they might come on side. But 0:01:43.720 --> 0:01:47.000 what they're saying is fundamentally nothing for them has changed. 0:01:47.120 --> 0:01:50.000 Nothing in the deal that was announced today has addressed 0:01:50.040 --> 0:01:52.720 their concerns um and that they won't be backing it 0:01:52.760 --> 0:01:56.000 on Saturday. That's a significant blow to Boris Johnson at 0:01:56.000 --> 0:01:58.000 this point in time. Ross what is the big change 0:01:58.000 --> 0:02:00.760 in this agreement between Primeister Boris John's and the EU 0:02:00.920 --> 0:02:03.480 and the agreement between Primus the Main the EU And 0:02:03.520 --> 0:02:05.640 with that in mind, what is the biggest sticking point 0:02:05.680 --> 0:02:09.480 still for the d u P. Well, it seems to 0:02:09.480 --> 0:02:12.120 be very much still around the issue of what you 0:02:12.200 --> 0:02:15.080 would call, in broad terms, the idea of a backstop, 0:02:15.120 --> 0:02:18.560 and that's the training arrangements that avoid a hard border 0:02:18.720 --> 0:02:21.880 on Ireland once Braxit takes place. And that's been a 0:02:21.960 --> 0:02:24.400 key concern obviously of the d u P. And what 0:02:24.400 --> 0:02:26.160 we've had put forward isn't a way a sort of 0:02:26.160 --> 0:02:28.720 a version of what the Reason may at one point 0:02:28.720 --> 0:02:32.320 put forward, which is to have customs arrangements in effect 0:02:32.360 --> 0:02:35.160 at some point in the Irish Sea and no hard 0:02:35.200 --> 0:02:39.959 border on land, and arrangements can be transitional that Northern 0:02:40.000 --> 0:02:43.679 Ireland can scrap them at some point if they disagree. Um. 0:02:43.800 --> 0:02:45.799 And that seems to be the latest version of where 0:02:45.840 --> 0:02:47.600 we're at. But the DUP just a couple of days 0:02:47.639 --> 0:02:50.440 ago was saying that that was still not okay um. 0:02:50.480 --> 0:02:52.680 And it sounds like Boris Johnson hasn't managed to get 0:02:52.680 --> 0:02:55.480 them over the line. As a result, negotiations might be 0:02:55.520 --> 0:02:58.200 finished in Brussels, they will continue at home. Ross great 0:02:58.240 --> 0:02:59.960 to catch up with you as always ross the matthis 0:03:00.000 --> 0:03:16.760 and that of blind Back. Well we are fortunate to 0:03:16.800 --> 0:03:19.640 have with us right now in our studios in Washington. 0:03:19.760 --> 0:03:23.239 Someone well timed to speak on this for years, I've 0:03:23.280 --> 0:03:26.280 owned his affiliation with Schroeder's and then on to his 0:03:26.360 --> 0:03:29.960 work personally for Mark Kearney or Francis Laquax. Speaking with 0:03:30.000 --> 0:03:32.880 the Governor of the Bank of England tomorrow here in Washington. 0:03:33.360 --> 0:03:36.040 But John farrells, you know ku Venstein has has taken 0:03:36.040 --> 0:03:38.800 on new duties for u b S the Union Bank 0:03:38.840 --> 0:03:42.280 of Switzerland as a senior advisor UH as well, and 0:03:42.440 --> 0:03:45.440 uh ku von Stein has joins us this morning here. 0:03:45.520 --> 0:03:49.320 There will be a parliamentary vote on Saturday, which will 0:03:49.360 --> 0:03:52.760 set us up for the domestic politics. Do you sense 0:03:52.840 --> 0:03:56.200 within all your reading and all your contacts that this 0:03:56.280 --> 0:03:59.560 is a general election that Prime Minister Johnson would win 0:03:59.800 --> 0:04:03.640 in that it will be a leave general election UM 0:04:03.760 --> 0:04:07.480 or thanks Tom. Look, the it's been very striking how 0:04:07.480 --> 0:04:10.440 in the opinion polls Boris Johnson's being able to win 0:04:10.640 --> 0:04:13.400 more support and you know, to get an outright majority. 0:04:13.480 --> 0:04:17.080 Hidd read about thirty eight percent of the total electorate 0:04:17.320 --> 0:04:20.000 and he's get knocking on that door. Now. Clearly there's 0:04:20.000 --> 0:04:23.159 a lot of detail there about how the opposition parties 0:04:23.160 --> 0:04:28.040 will either tie together or splinter. UM this Saturday is 0:04:28.120 --> 0:04:31.680 really critical because you know everyone assumed that Boris wouldn't 0:04:31.680 --> 0:04:33.920 get a deal, and he's come through and reopened the 0:04:33.960 --> 0:04:37.080 backstop agreement. UM. I think it would be very interesting 0:04:37.080 --> 0:04:39.839 to see how the DP and the opposition respond and 0:04:39.880 --> 0:04:42.520 whether they want to tag on a referendum and then 0:04:42.560 --> 0:04:44.560 we go into a general election with a referendum, or 0:04:44.560 --> 0:04:46.719 do they try and stall for time. But it's I 0:04:46.760 --> 0:04:49.680 think the odds now are much higher. Cable fading here, 0:04:49.720 --> 0:04:51.800 Tom still passing up on the session, but way off 0:04:51.800 --> 0:04:53.599 session highs. We are up by just a tenth of 0:04:53.600 --> 0:04:57.640 one percent one pound one. Johns fer a New York 0:04:57.640 --> 0:05:00.080 on term Keenan, Washington, and again John and I with 0:05:00.160 --> 0:05:02.960 our coverage of these I m F and World Bank meetings, 0:05:02.960 --> 0:05:05.720 and where this Hu von Steins of u B s here, 0:05:05.760 --> 0:05:08.440 let's walk away from Brexit, which is certainly front and center, 0:05:08.440 --> 0:05:11.440 and there'll be something in one hour different as well. 0:05:11.960 --> 0:05:16.200 It is a most interesting set of meetings here in Washington, 0:05:16.720 --> 0:05:18.520 in the heart of the matter, and you've been a 0:05:18.560 --> 0:05:22.520 student of this for for many decades. Is the multilateral 0:05:22.600 --> 0:05:24.760 nous of it? There's that I m F logo of 0:05:24.760 --> 0:05:28.560 a hundred and eighty whatever nations. Is it gone in 0:05:28.600 --> 0:05:33.400 the Trump world is our multilateralism gone. Look, I think 0:05:33.400 --> 0:05:37.600 it's a great question Tomaine, certainly the behind the scenes 0:05:37.640 --> 0:05:40.680 of my conversations yesterday, but really around the trade war 0:05:41.040 --> 0:05:42.880 and to what extent we can get a resolution to 0:05:42.920 --> 0:05:44.600 some of the trade war, but whether there'll be a 0:05:44.640 --> 0:05:47.000 tech war which just just carries on because I think 0:05:47.000 --> 0:05:50.880 both US and China reviving for supremacy around tech pros 0:05:51.080 --> 0:05:53.960 and they used in the economy brilliant. What's the ven 0:05:53.960 --> 0:05:56.000 diagram of the trade war in the tech war? And 0:05:56.040 --> 0:05:59.080 I guess is there's a little bit overlapped there hugely. 0:05:59.160 --> 0:06:01.120 But because I but I think what's very clear about 0:06:01.120 --> 0:06:04.520 the tech is um is there a re establishment of 0:06:04.560 --> 0:06:07.159 supply lines. So if you if the US is not 0:06:07.240 --> 0:06:09.680 using Kuawei, you know what will it be doing instead? 0:06:09.720 --> 0:06:13.559 And so I think there's this ongoing anxiety around big 0:06:13.600 --> 0:06:16.159 tech and how that plays out. And you know, whether 0:06:16.200 --> 0:06:18.280 it's Brexit or Europe, they're not quite sure you know 0:06:18.320 --> 0:06:19.919 which way to turn on this because we're you know, 0:06:19.960 --> 0:06:23.440 beneficiary of both both large blocks. The heart of this 0:06:23.800 --> 0:06:27.640 is the mercantilers structure of President Trump, which is fine, 0:06:27.720 --> 0:06:30.320 it's a strong opinion, and let's be clear, he has 0:06:30.360 --> 0:06:33.960 a large number of Americans who support not only on 0:06:34.080 --> 0:06:37.200 technology but on other issues as well. Do you detect 0:06:37.200 --> 0:06:41.119 a permanence here or is it an amendment of four 0:06:41.320 --> 0:06:44.159 or eight years? Um. Look, I think there'd be better 0:06:44.200 --> 0:06:47.719 people than me to judge. But I think I think 0:06:47.839 --> 0:06:51.280 the big challenge here is how we get a global 0:06:51.279 --> 0:06:54.080 growth and it's very very clear that the uncertainty from 0:06:54.080 --> 0:06:56.880 the trade wars has clearly been a dampener on markets 0:06:56.920 --> 0:07:00.320 and on business activity. I think that we since certainly 0:07:00.320 --> 0:07:02.680 hope there will be some resolution, but maybe we reached 0:07:02.680 --> 0:07:05.680 peak populism. It's been very striking also in whether it's 0:07:06.040 --> 0:07:07.920 whether it's a Boris Johnson looking to do a deal, 0:07:07.960 --> 0:07:10.040 whether it's the Italian saying they will no longer leave 0:07:10.080 --> 0:07:13.080 the euro of the Northern League. Maybe we've reached peak populism. 0:07:13.080 --> 0:07:15.679 But I think these underlying tensions between the big blocks, 0:07:15.880 --> 0:07:18.320 particularly in a low growth world where everyone wants their 0:07:18.360 --> 0:07:20.880 ship fair share or even a disproportion share, I think 0:07:20.880 --> 0:07:23.640 these tensions carry on. Vanina, thank you so much. He 0:07:23.800 --> 0:07:26.200 is with You'll be as a senior advisor to Mr 0:07:26.480 --> 0:07:42.960 Mudi right now. This is a thrill. Jason Furman with 0:07:43.080 --> 0:07:45.480 us with a service to the country as a former 0:07:45.560 --> 0:07:49.560 chairman of the President's Council of Economic Advisors for President Obama. 0:07:49.920 --> 0:07:51.760 But maybe more than anyone I know, there's a few 0:07:51.760 --> 0:07:55.200 others out there playing in the policy pond, but actually 0:07:55.280 --> 0:07:59.840 figuring out policy and applying it across all of them 0:07:59.880 --> 0:08:02.480 America that have they have not really trying to think 0:08:02.520 --> 0:08:06.800 about executing and doing policy. Maybe Rick Michigan up at 0:08:06.840 --> 0:08:10.160 Colombia would be someone else like that. Before we start 0:08:10.200 --> 0:08:13.720 in here, adjacent and too shorter conversation and celebration. The 0:08:13.760 --> 0:08:17.040 other day Michael spent salaurea on our London desk with 0:08:17.200 --> 0:08:21.520 one Michael Kremer of Harvard University. You know Michael Kremer 0:08:21.920 --> 0:08:26.560 and his policy action on poverty. What is original about 0:08:26.600 --> 0:08:31.560 this Nobel Prize for poverty? Something we don't talk about enough. Um, 0:08:31.560 --> 0:08:34.200 it was a great Nobel prize. Everyone I know is 0:08:34.280 --> 0:08:37.120 really excited about it. To other people from a college, 0:08:37.280 --> 0:08:39.800 I don't know what After the flow and Avogate, Boundgy 0:08:39.920 --> 0:08:42.559 run wanted as well. And what you saw here is 0:08:42.600 --> 0:08:44.600 has been a really big change in the way we 0:08:44.640 --> 0:08:47.559 think about development economics, the way we think about helping 0:08:48.120 --> 0:08:52.200 poor people in poor countries from you know, huge, big 0:08:52.320 --> 0:08:58.040 dramatic ideas to let's do experiments, let's test, let's see 0:08:58.040 --> 0:09:01.040 what works, let's see what doesn't work, um, and then 0:09:01.160 --> 0:09:04.120 scale it up. And that sounds easy. They've been doing 0:09:04.120 --> 0:09:06.400 that in medicine for a long time. But one the 0:09:06.480 --> 0:09:09.199 idea to do it UM wasn't an economics but too 0:09:09.240 --> 0:09:11.200 when you do it in economics, turns out is actually 0:09:11.280 --> 0:09:13.720 quite tricky and quite complicated to figure out how to 0:09:13.760 --> 0:09:17.520 design those experiments, how to figure out whether they'll scale up, 0:09:17.760 --> 0:09:19.800 take them to the next stage. And those three are 0:09:19.920 --> 0:09:22.400 in the middle of making progress. I'm a question. I 0:09:22.440 --> 0:09:25.400 mentioned professor Kramer Pascal in upon and her work as 0:09:25.400 --> 0:09:29.440 well in malaria years ago. Great, why can't we do 0:09:29.520 --> 0:09:34.000 this in the United States? We're real good extending poverty. 0:09:34.280 --> 0:09:36.600 Is that we have a Lackey in structure? Is there 0:09:36.640 --> 0:09:42.560 an Americanism where we can't translate this across our inequalities? Yeah, 0:09:42.600 --> 0:09:44.280 I mean in that that paper you are, I mean 0:09:44.360 --> 0:09:48.959 bestal deposit work. I mean two hundred, three hundred dollars 0:09:49.080 --> 0:09:53.680 per life saved from bednets. Um from malaria you do 0:09:53.760 --> 0:09:58.320 insecticide treated bednet three hundred dollars per life saved. It 0:09:58.480 --> 0:10:01.640 is the single best thing one could possibly do UM 0:10:01.679 --> 0:10:04.440 anywhere in the world when it comes to the problems 0:10:04.440 --> 0:10:08.320 in America, we are seeing more of that UM. There 0:10:08.440 --> 0:10:13.520 was something called j PAL that was founded. It's housed 0:10:13.520 --> 0:10:16.920 in Cambridge, and it was doing experiments on development. Now 0:10:16.960 --> 0:10:19.320 they're doing some of those randomized trials you know. Here 0:10:19.320 --> 0:10:22.000 in the United States, you're seeing more of that on 0:10:22.320 --> 0:10:24.880 you know, preschools. That's something we've done for a while. Now. 0:10:25.280 --> 0:10:28.040 The evidence is incredibly clear. I don't think we need 0:10:28.080 --> 0:10:30.840 to collect much more economic evidence that preschool is a 0:10:30.880 --> 0:10:33.840 great idea. Now it's really up to the politicians to 0:10:33.880 --> 0:10:36.680 do it. You've seen that happen in some states. Too. 0:10:36.679 --> 0:10:39.920 Many states haven't expanded preschool. I don't know how we 0:10:39.960 --> 0:10:42.480 can talk about it. You are a great student on this. 0:10:42.559 --> 0:10:44.800 I don't mean to interrupt. This is so critical in 0:10:44.880 --> 0:10:50.400 that with great respect for the halves, distrust government spending. 0:10:50.440 --> 0:10:55.200 That's an ethos in America, clearly a successful ethos. How 0:10:55.240 --> 0:11:00.280 do we disperse our knowledge and technology to the haves 0:11:00.400 --> 0:11:02.840 of America? Yeah, yeah, I mean, just to stick with 0:11:02.880 --> 0:11:05.720 the one I was on. Whatever trust or distrust you 0:11:05.760 --> 0:11:08.480 have in government, most of us are quite comfortable with 0:11:08.520 --> 0:11:12.400 the fact that the government spends money educating children between 0:11:12.400 --> 0:11:14.440 the age of five and eighteen. You know, maybe we 0:11:14.480 --> 0:11:16.760 want the money spent differently, Maybe we want more money, 0:11:17.240 --> 0:11:20.600 maybe we want some reforms. But I don't think anyone 0:11:20.640 --> 0:11:23.680 debates that the God that we have a stake in 0:11:23.960 --> 0:11:28.640 having educated citizens. So let's extend that to age three, 0:11:28.760 --> 0:11:32.920 extend that to age four, same idea. Out of time, 0:11:32.960 --> 0:11:35.000 we could go, we gotta I gotta come back to Washington, 0:11:35.080 --> 0:11:37.480 John and and meet with Dr Furman. Maybe we can 0:11:37.520 --> 0:11:39.959 go see the capital's place that you can come to, 0:11:40.040 --> 0:11:44.479 come to Cambridge, Massachusetts. All we can see Bruins Canadians. 0:11:44.520 --> 0:11:46.640 That will work out as well. Jason Furman, thank you 0:11:47.120 --> 0:11:49.120 so much, of course, with the County School at Harvard 0:11:49.160 --> 0:11:53.040 and his service to the nation's former chairman of the 0:11:53.120 --> 0:12:08.920 President's Council of Economic Advisers. Yea, there is just a 0:12:08.920 --> 0:12:13.040 ton of uncertainty out there. The macro risk persists, as 0:12:13.080 --> 0:12:15.440 it has done over the last eighteen months with trade, 0:12:15.480 --> 0:12:18.280 through the last three years with a Brexit situation, and 0:12:18.320 --> 0:12:21.960 it has just become so finely balanced that one incremental 0:12:22.080 --> 0:12:25.240 shift one way or another, one incremental piece of news 0:12:25.600 --> 0:12:29.240 can shift perception quite radically from one week to the 0:12:29.280 --> 0:12:30.959 next to weigh in on that from New York and 0:12:31.000 --> 0:12:33.480 Police to say Monama, John joins US now as Global 0:12:33.520 --> 0:12:37.160 Investors US investment strategist, Mona, let's talk about that, just 0:12:37.240 --> 0:12:43.000 how finely balanced perception of the global economy is right now. Yeah. Absolutely. 0:12:43.000 --> 0:12:44.679 You know, I think just a few weeks ago there 0:12:44.800 --> 0:12:47.720 was a lot of pessimism built into this marketplace, driven 0:12:47.760 --> 0:12:50.839 by that week p m I number, particularly that came 0:12:50.880 --> 0:12:54.240 out in the US. Interestingly, since then, and I'd say 0:12:54.280 --> 0:12:57.400 over the last couple of weeks in particular, we've gotten 0:12:57.520 --> 0:13:01.800 somewhat incrementally positive news on two of the biggest overhangs 0:13:01.800 --> 0:13:04.080 in the economy and the globe economy right now. You 0:13:04.160 --> 0:13:07.559 noted US China trade as one, and then secondly Brexit. 0:13:07.640 --> 0:13:11.520 These are two issues that have been really lingering and 0:13:11.559 --> 0:13:13.920 weighing on the markets, and over the last couple of weeks, 0:13:13.920 --> 0:13:17.840 i'd say we've gotten perhaps incrementally positive steps now to 0:13:17.880 --> 0:13:20.440 your point, it's always two steps forward, one step back. 0:13:20.520 --> 0:13:23.200 Sometimes it's been one step forward two steps back in 0:13:23.280 --> 0:13:26.560 both trade and Brexit. We'll be watching, in particular on 0:13:26.640 --> 0:13:29.680 the trade side, whether or not we can one come 0:13:29.720 --> 0:13:32.160 to some sort of Phase one deal, but more importantly 0:13:32.160 --> 0:13:34.720 whether or not these tariffs that have been the overhang 0:13:34.800 --> 0:13:39.360 for the consumer and the business investment community can be removed. 0:13:39.400 --> 0:13:42.680 Those December fifteen tariffs, in particular that way on the 0:13:42.679 --> 0:13:46.360 consumer are important for US aside from trade and Brexit. 0:13:46.400 --> 0:13:49.680 I would also just point out that incremental news around 0:13:49.800 --> 0:13:53.480 earning season thus far, around the yield and yield curves, 0:13:53.840 --> 0:13:56.520 and then even a potential for p M E s bottoming, 0:13:56.559 --> 0:13:58.720 have all helped support sentiment and our view. We'll get 0:13:58.760 --> 0:14:00.400 to the earning center worlder issues in just a moment. 0:14:00.480 --> 0:14:02.640 Let's talk about the price levels on the SMP five. 0:14:03.040 --> 0:14:05.280 We found out multiple times this year that life above 0:14:05.320 --> 0:14:08.400 three thousand points, for whatever reason, is difficult. We've mentioned 0:14:08.400 --> 0:14:09.880 this several times, Miner, I think you and I have 0:14:09.920 --> 0:14:12.600 discussed it many times too, and the same in the 0:14:12.600 --> 0:14:15.600 bottom market for the ten year life below one fifty 0:14:15.760 --> 0:14:18.120 incredibly difficult. We found that out time and time again 0:14:18.120 --> 0:14:20.160 over the last couple of years. Do you think we 0:14:20.160 --> 0:14:23.720 can finally break out of these very volatile trading ranges? 0:14:24.280 --> 0:14:26.320 Narrow as they might be, but they have been very 0:14:26.400 --> 0:14:28.840 volatile over the last several months. Do you think we 0:14:28.840 --> 0:14:30.800 can finally break out one way or another. You know, 0:14:30.880 --> 0:14:33.080 I think that three thousand level on the SMP is 0:14:33.160 --> 0:14:35.760 critical and I do feel like we've been hovering at 0:14:35.840 --> 0:14:38.840 that range for about eighteen months now. When we look 0:14:38.960 --> 0:14:41.520 towards the end of Q four, you know, we're talking 0:14:41.560 --> 0:14:44.240 to our teams, we think of three potential scenarios. One 0:14:44.440 --> 0:14:46.800 is we have some sort of melt up or maybe 0:14:46.800 --> 0:14:49.840 a ten pc upside going into Q four in particularly 0:14:50.040 --> 0:14:52.680 those last few months of the year. The other two are, 0:14:52.760 --> 0:14:55.800 you know, we trade sideways. And the last and probably 0:14:55.920 --> 0:14:59.360 least impressive for investors, is that we we moved downward 0:14:59.400 --> 0:15:02.320 in the last or now. Given what we know thus far, 0:15:02.880 --> 0:15:06.520 the incremental positive steps around trade and and Brexit, the 0:15:06.560 --> 0:15:10.240 potential for bottoming out. Our base case remains that we 0:15:10.320 --> 0:15:13.320 can actually potentially see a breakout to the upside, and 0:15:13.360 --> 0:15:16.400 so I think that's where we're coming from and hopeful for. 0:15:16.520 --> 0:15:18.320 But data keeps coming in and as you said, it's 0:15:18.320 --> 0:15:22.160 a weekly adjustment. Well, I think I've mentioned this before. 0:15:22.200 --> 0:15:24.920 You have one of the coolest undergraduates going Wharton and 0:15:25.000 --> 0:15:29.040 also computer sciences at Pennsylvania, which folks, is a legendary 0:15:29.400 --> 0:15:32.440 double major. Are we in the middle of a binomial 0:15:32.520 --> 0:15:34.960 tree like all of Brexit today, which John has done 0:15:34.960 --> 0:15:37.560 such a good job of covering. Is it just zero 0:15:37.600 --> 0:15:40.800 one zero one toggle switch where if we get through 0:15:40.840 --> 0:15:45.280 these problems, we just toggle switch back to normalcy. You know, 0:15:45.480 --> 0:15:49.160 it's interesting because both of these issues have such nuances 0:15:49.200 --> 0:15:51.520 and the devil is really in the detail. You know, 0:15:51.640 --> 0:15:53.520 even if we get a trade deal, is there an 0:15:53.520 --> 0:15:56.960 overhang around enforcement? Is there an overhang that President Trump 0:15:57.000 --> 0:16:00.680 can come in any moment and arbitrarily impostarriffs. Anyway, I 0:16:00.720 --> 0:16:04.440 think it comes down to the old adage. Markets do 0:16:04.480 --> 0:16:08.200 not like uncertainty, and so to the to the extent 0:16:08.280 --> 0:16:11.720 we can eliminate uncertainty in the marketplace. So with trade 0:16:11.760 --> 0:16:15.160 that would probably imply removal of tariffs, but also some 0:16:15.240 --> 0:16:19.040 sort of enforcement mechanism, and also businesses should know what 0:16:19.240 --> 0:16:21.600 kind of you know, tariffs are supposed to be paying, 0:16:21.600 --> 0:16:23.680 and I think that that type of certainty is important. 0:16:23.720 --> 0:16:26.400 Similarly with Brexit, you know, is it a soft is 0:16:26.400 --> 0:16:28.880 it a hard? Regardless, they have a long slog ahead 0:16:28.920 --> 0:16:30.520 of them. How are they going to get through the 0:16:30.600 --> 0:16:32.640 next two to five years as well? What does that 0:16:32.680 --> 0:16:34.840 mean for the European economy and the global economy, and 0:16:34.880 --> 0:16:37.400 so you know, when you start thinking about the details 0:16:37.400 --> 0:16:41.160 beyond just the binary outcomes, you start thinking about the 0:16:41.440 --> 0:16:44.400 potential impacts to the economy and a longer term basis. 0:16:44.840 --> 0:16:46.720 There are some issues to be worked out, but I 0:16:46.760 --> 0:16:50.560 do think um those headlines would be incrementally positive. We 0:16:50.640 --> 0:16:53.000 just want some of these issues resolved. The risk of 0:16:53.080 --> 0:16:55.640 persisted for so long. I think people are exhausted and 0:16:55.720 --> 0:16:58.400 just want some clarity about what this looks like in 0:16:58.400 --> 0:17:01.400 the future. Luckily, we've got a break from these kind 0:17:01.440 --> 0:17:03.720 of stories through the next couple of weeks as the 0:17:03.760 --> 0:17:06.280 earnings come through. Just before we let you go, Minor, 0:17:06.280 --> 0:17:07.760 i'd love your view on the bank earnings that we've 0:17:07.800 --> 0:17:11.080 had from the last twenty four hours. Pretty decent so far. Yeah, 0:17:11.119 --> 0:17:13.080 you know, our our take is that it's a positive 0:17:13.280 --> 0:17:15.879 um and again kind of leads into our story about 0:17:15.920 --> 0:17:18.520 how Q four could end up being ultimately positive for 0:17:18.520 --> 0:17:21.560 the markets. But I think a couple of takeaways. Um. One, 0:17:21.680 --> 0:17:23.720 the banks have been lagging this year, so I think 0:17:23.920 --> 0:17:25.919 there is some room to to play catch up, and 0:17:25.920 --> 0:17:27.879 it's interesting that we've seen some of the value sectors 0:17:27.920 --> 0:17:31.160 lagging in general. Could this be a catalyst potentially for 0:17:31.520 --> 0:17:34.040 banks in particular to play some catch up in the markets. 0:17:34.640 --> 0:17:37.400 Number two, what we've been talking about this entire year 0:17:37.520 --> 0:17:40.400 is that there's a dichotomy between manufacturing and the consumer. 0:17:40.680 --> 0:17:43.400 I think this bank earning season is really showing us 0:17:43.440 --> 0:17:45.440 consumer strength is still out there, and I think that's 0:17:45.480 --> 0:17:49.879 positive for the economic story broadly. So we're positive incrementally 0:17:49.880 --> 0:17:52.080 on the banks and we think that could be a 0:17:52.080 --> 0:17:55.240 good sign for economy as well. Morgan Stanby certainly likes 0:17:55.640 --> 0:17:57.879 the news this morning. The stock does anywhere. The stock 0:17:57.920 --> 0:18:01.159 is up by more than four percent, Earns coming in 0:18:01.160 --> 0:18:03.239 pretty solid. Might great to see you, and now you've 0:18:03.280 --> 0:18:06.000 got to run Mana Mahajan, their Alliance Global Investors, US 0:18:06.320 --> 0:18:24.120 investment strategist. Let's get to the story for European politics, 0:18:24.160 --> 0:18:26.680 shall we. We have an agreement between the European Union 0:18:26.960 --> 0:18:29.119 and Prime Minister Boris Johnson. The challenge for Prime Minister 0:18:29.160 --> 0:18:32.639 Boris Johnson is getting this agreement through Parliament this coming Saturday. 0:18:32.920 --> 0:18:34.840 Will he need the support of the d UP if 0:18:34.880 --> 0:18:38.800 he does so. Far, the Democratic Unions Unionist Party confirming 0:18:39.160 --> 0:18:42.520 that they will not be able to support these proposals, 0:18:42.560 --> 0:18:45.920 putting out an emailed statement just moments ago. Sterling is 0:18:45.960 --> 0:18:50.159 still positive but barely cable. Is that's the pound against 0:18:50.200 --> 0:18:53.320 the US dollar one fifty one. We had a session 0:18:53.400 --> 0:18:57.639 high of nineties, so we're well off those levels, so 0:18:57.680 --> 0:19:00.760 it looks finally balanced. We have an agreement. Tom, can 0:19:00.800 --> 0:19:04.040 the Prime Minister get it through Parliament on Saturday. If 0:19:04.080 --> 0:19:08.840 he can't, what's next? What comes next? And I think 0:19:08.920 --> 0:19:12.200 that's key because a lot of paper assuming that if 0:19:12.200 --> 0:19:14.840 he can't get it through this Saturday, ultimately the next 0:19:14.840 --> 0:19:18.439 step is not a hard Brexit. It's an election. Although 0:19:18.480 --> 0:19:21.040 I'm not convinced either way. Where we are here. We 0:19:21.119 --> 0:19:25.080 have an agreement, he's managed to get some concessions from 0:19:25.080 --> 0:19:28.480 the EU. He heads to Parliament Saturday. It's very delicate, 0:19:28.520 --> 0:19:30.320 and you're not the only one yawning. Who's born and 0:19:30.320 --> 0:19:32.480 stick its heart of all of this? I read, you 0:19:32.520 --> 0:19:34.760 know what one vibe. I was ignorant on the War 0:19:34.840 --> 0:19:38.080 of the Wars of the Roses from like the fifteenth century, 0:19:38.119 --> 0:19:40.520 just on the War the Roses. So yeah, you know, 0:19:40.560 --> 0:19:43.359 I'm gonna read Lady Jane Gray next. But you know 0:19:43.720 --> 0:19:47.080 I'm reading the stuff from like five hundred years ago. John, 0:19:47.160 --> 0:19:51.200 Nothing's changed. I mean, it's the parliamentary system. You guys 0:19:51.240 --> 0:19:54.200 go on and on and on. I agree with you. 0:19:54.440 --> 0:19:58.080 Jane's got Jane Foley has got a system. Jane Foley 0:19:58.080 --> 0:19:59.880 has got to do this every day. Rubber Bank's head 0:19:59.880 --> 0:20:02.200 of effects, strategy and senior analysts. She joins us out 0:20:02.200 --> 0:20:05.240 of London. Jane, your thoughts this morning please on the 0:20:05.280 --> 0:20:09.600 agreement that is yet to be agreed in the United Kingdom. Well, 0:20:09.720 --> 0:20:12.040 you know, as you talked about Saturday, we really will 0:20:12.040 --> 0:20:15.480 be crucial now in Parliament. We know that Boris Johnson 0:20:16.000 --> 0:20:20.000 needs to get three votes to pass this steal through 0:20:20.480 --> 0:20:24.400 and there are only two D eighty seven toys now. Also, 0:20:24.440 --> 0:20:26.119 if we look at some of the comments from Corbyn 0:20:26.240 --> 0:20:29.520 this morning, Corbyn says he of course is a leader 0:20:29.520 --> 0:20:33.960 of the Labor Party. Johnson's select deal should be rejected. Now. 0:20:34.000 --> 0:20:37.120 There will be some rebels within the Labor Party who 0:20:37.160 --> 0:20:39.359 will vote for a deal. There are a number of 0:20:39.440 --> 0:20:43.280 Labor MPs that represents constituencies that voted leave in that 0:20:43.359 --> 0:20:47.200 referendument in twenties sixteen. But clearly there will be pressure 0:20:47.680 --> 0:20:51.400 on the Labor MPs to reject the steal. There will 0:20:51.400 --> 0:20:54.840 be pressure from the Liberal Democrats also to reject this steal. 0:20:54.920 --> 0:20:57.080 So it's far from clear that this is going to 0:20:57.160 --> 0:20:59.919 get through. So, as you rightly pointed out, the focus 0:21:00.000 --> 0:21:03.880 should be turning into what happens then. Is it going 0:21:03.920 --> 0:21:07.760 to be a heart Brexit despite the then at or 0:21:07.920 --> 0:21:10.199 is there going to be an election? I think almost 0:21:10.200 --> 0:21:13.400 irrespective of what happens, there will be an election in 0:21:13.520 --> 0:21:17.520 the next few months. Will Johnson be able to put 0:21:17.680 --> 0:21:21.720 his deal into a manifesto and say, look, Voctory, there's 0:21:21.760 --> 0:21:26.639 a deal and Brexit gets done, or will the lecture 0:21:27.000 --> 0:21:29.840 not by that? And right now there's a lot of 0:21:29.840 --> 0:21:32.520 opinion polls that suggest that, like you and like me, 0:21:33.000 --> 0:21:36.760 the elector and the UK are sick of the Brexit negotiations. 0:21:36.840 --> 0:21:41.399 So it is possible that many people will vote for 0:21:42.040 --> 0:21:45.680 a party that has a deal in the bag. But 0:21:45.800 --> 0:21:49.400 on the other hand, Corbin this morning raised the prospect 0:21:49.680 --> 0:21:52.919 of another referendum, so it seems one way or another 0:21:53.440 --> 0:21:55.800