1 00:00:06,040 --> 00:00:08,959 Speaker 1: Hello, and welcome to Stephonomics. And today we're bringing the 2 00:00:09,000 --> 00:00:12,840 Speaker 1: world of two to you our traditional look ahead to 3 00:00:12,880 --> 00:00:15,600 Speaker 1: the big themes and questions coming down the track over 4 00:00:15,600 --> 00:00:18,799 Speaker 1: the next twelve months, with a carefully selected panel of 5 00:00:18,840 --> 00:00:21,480 Speaker 1: wise men and women who were kind enough to make 6 00:00:21,520 --> 00:00:25,720 Speaker 1: Stephanomics part of their Christmas plans. We have Nancy Cook 7 00:00:25,920 --> 00:00:28,960 Speaker 1: dialing in from Washington, d C, where she covers economic 8 00:00:29,000 --> 00:00:32,080 Speaker 1: policy for Bloomberg as part of the White House Press Corps. 9 00:00:32,479 --> 00:00:35,800 Speaker 1: Also normally in d C, but currently holidaying in Cornwall 10 00:00:35,800 --> 00:00:39,800 Speaker 1: in England. There's Bloomberg's chief economist, Tom Marlick, and from 11 00:00:39,800 --> 00:00:44,360 Speaker 1: New York, Aaron Rutkoff, who runs all things green at Bloomberg, 12 00:00:44,479 --> 00:00:47,640 Speaker 1: among other things. Also from London, and delighted to say, 13 00:00:47,920 --> 00:00:51,479 Speaker 1: we have Muktaba Rahman, the Europe Managing director of the 14 00:00:51,479 --> 00:00:55,400 Speaker 1: Eurasia Research Group. He's new to Stephonomics, I think, but 15 00:00:55,560 --> 00:00:58,200 Speaker 1: definitely not new to Bloomberg and probably known by many 16 00:00:58,240 --> 00:01:00,760 Speaker 1: people listening as a great source of wisdom on what's 17 00:01:00,760 --> 00:01:04,480 Speaker 1: happening behind the scenes in Europe. So thank you everyone 18 00:01:04,600 --> 00:01:09,039 Speaker 1: and welcome. This is all about looking ahead, not looking back, 19 00:01:09,160 --> 00:01:12,360 Speaker 1: but I can't resist very briefly asking you what the 20 00:01:12,440 --> 00:01:17,400 Speaker 1: most memorable moment of one was for you. Nancy, I 21 00:01:17,440 --> 00:01:19,880 Speaker 1: think that it was first when President Biden came into 22 00:01:19,920 --> 00:01:23,880 Speaker 1: office and just started wearing a mask everywhere and and 23 00:01:23,920 --> 00:01:27,080 Speaker 1: really just you know, visually and in terms of his behavior, 24 00:01:27,160 --> 00:01:33,039 Speaker 1: was taking coronavirus much more seriously than President trumpad Aaron, 25 00:01:33,240 --> 00:01:36,000 Speaker 1: what was it for you? Well, I had the chance 26 00:01:36,040 --> 00:01:38,679 Speaker 1: to go to COP twenty six and after such a 27 00:01:38,720 --> 00:01:42,000 Speaker 1: long build up, to return to United Nations Climate talks, 28 00:01:42,400 --> 00:01:44,880 Speaker 1: actually seeing people all in one place and I'll gather 29 00:01:44,959 --> 00:01:47,360 Speaker 1: together in addressing climate change after the kind of in 30 00:01:47,360 --> 00:01:49,560 Speaker 1: the middle of the long shadow of the pandemic. Did 31 00:01:49,680 --> 00:01:51,640 Speaker 1: did leave quite a quite an impression on me, even 32 00:01:51,640 --> 00:01:53,680 Speaker 1: though the outcome of it may not have lived up 33 00:01:53,680 --> 00:01:55,720 Speaker 1: to some people's expectations of what might have come after 34 00:01:55,760 --> 00:01:58,000 Speaker 1: such a long week. Well, so we will probably be 35 00:01:58,000 --> 00:02:00,160 Speaker 1: getting into that with you a bit later, but tom 36 00:02:00,160 --> 00:02:04,200 Speaker 1: alt So for me, Stephanie, it was that moment in 37 00:02:04,440 --> 00:02:10,080 Speaker 1: March where the US top diplomat Anthony Blincoln sat down 38 00:02:10,080 --> 00:02:13,959 Speaker 1: with China's top diplomat Yang Jeacher, and it was meant 39 00:02:14,000 --> 00:02:16,639 Speaker 1: to be a meeting that got the U. S. China 40 00:02:16,800 --> 00:02:20,400 Speaker 1: relationship back on track after the tumult and the trade 41 00:02:20,400 --> 00:02:24,720 Speaker 1: wars of the Trump years. But that's not quite what happened. 42 00:02:25,400 --> 00:02:29,280 Speaker 1: Yang Jia Cher used the opportunity to deliver a forty 43 00:02:29,280 --> 00:02:34,680 Speaker 1: five minute protocol breaching Harangue, saying the US had no 44 00:02:34,919 --> 00:02:38,560 Speaker 1: standing to speak for the world and no moral authority 45 00:02:38,919 --> 00:02:44,480 Speaker 1: to criticize China over Shinjiang, Taiwan, Hong Kong, cyber espionage 46 00:02:44,600 --> 00:02:47,040 Speaker 1: or anything else. And for me, that was a kind 47 00:02:47,040 --> 00:02:51,480 Speaker 1: of a critical moment, a kind of watershed moment in geopolitics, 48 00:02:52,200 --> 00:02:55,440 Speaker 1: where China said, you know what, We're not second place, 49 00:02:55,639 --> 00:02:58,040 Speaker 1: We're not the disciple. We're not going to listen to 50 00:02:58,080 --> 00:03:00,240 Speaker 1: you anymore. We're going to go on go on our 51 00:03:00,240 --> 00:03:04,560 Speaker 1: own path. I remember us having a conversation immediately afterwards. 52 00:03:04,600 --> 00:03:06,800 Speaker 1: It was definitely one where it helped to be fluent 53 00:03:06,880 --> 00:03:10,240 Speaker 1: in Mandarin to get the true implications of that, but 54 00:03:10,280 --> 00:03:12,920 Speaker 1: it was it was quite a moment. Muktaba Ravan, what 55 00:03:12,960 --> 00:03:15,280 Speaker 1: did What are you going to most remember from one, 56 00:03:16,320 --> 00:03:19,359 Speaker 1: without doubt the outcome of the German elections. I think 57 00:03:19,400 --> 00:03:22,240 Speaker 1: we spent most of the year looking at the differences 58 00:03:22,280 --> 00:03:26,400 Speaker 1: between arm In Lachette and Marcus Zoda and we've ended 59 00:03:26,440 --> 00:03:30,160 Speaker 1: up with Olaf Schultz, former finance minister, in partnership with 60 00:03:30,200 --> 00:03:32,280 Speaker 1: the Greens and the Liberal Democrats, which was I think 61 00:03:32,280 --> 00:03:35,600 Speaker 1: a complete surprise. A government that looks as though they're 62 00:03:35,600 --> 00:03:37,200 Speaker 1: going to do big things in Germany and big things 63 00:03:37,200 --> 00:03:41,480 Speaker 1: in Europe. It is interesting. I interviewed Olaf Schultz earlier 64 00:03:41,480 --> 00:03:44,560 Speaker 1: in the summer and asked him, why are you even bothering, 65 00:03:44,680 --> 00:03:46,480 Speaker 1: you know, looking at the polls, why are you even 66 00:03:46,560 --> 00:03:49,440 Speaker 1: bothering to be in this election and carry on the campaigning? 67 00:03:49,480 --> 00:03:51,200 Speaker 1: And he said, well, you know, people with if they 68 00:03:51,200 --> 00:03:53,560 Speaker 1: could choose me and not just the party, they would 69 00:03:53,600 --> 00:03:55,440 Speaker 1: want me as chancellor. And I still think I can 70 00:03:55,480 --> 00:03:58,320 Speaker 1: do that. And of course he was right and I 71 00:03:58,360 --> 00:04:01,800 Speaker 1: was wrong to be to be negative. And let's let's 72 00:04:01,880 --> 00:04:04,320 Speaker 1: kick off with you Tom Alick. Just thinking a bit 73 00:04:04,360 --> 00:04:10,080 Speaker 1: about the economy and oh Macron, because that's put paid 74 00:04:10,120 --> 00:04:13,920 Speaker 1: to a lot of people's expectations very early, already in 75 00:04:14,000 --> 00:04:16,839 Speaker 1: two or before it's even started. So should we be 76 00:04:16,920 --> 00:04:19,240 Speaker 1: throwing away all of our forecasts for the next year 77 00:04:19,320 --> 00:04:23,680 Speaker 1: thanks to the spread of that variant. So if we 78 00:04:23,720 --> 00:04:29,039 Speaker 1: were having this conversation in December, Stephanie, nobody would have 79 00:04:29,080 --> 00:04:32,679 Speaker 1: said a virus creeping out of a wohan wet market 80 00:04:32,960 --> 00:04:36,159 Speaker 1: will trigger the biggest global downturn since the Great Depression. 81 00:04:37,440 --> 00:04:40,520 Speaker 1: And if we were having this conversation in December twenty twenty, 82 00:04:40,560 --> 00:04:42,760 Speaker 1: I don't think anyone would have said that the US 83 00:04:42,800 --> 00:04:48,279 Speaker 1: would be ending with inflation close to seven. So clearly 84 00:04:48,800 --> 00:04:53,120 Speaker 1: COVID has made the already murky crystal ball of economic 85 00:04:53,160 --> 00:04:56,560 Speaker 1: forecasting even murkier. And we should be a bit humble 86 00:04:56,960 --> 00:05:01,719 Speaker 1: about our predictions. We're always humble, obviously, some more than others. 87 00:05:02,080 --> 00:05:06,839 Speaker 1: Um said that said, with a macron, I think clearly 88 00:05:06,880 --> 00:05:10,560 Speaker 1: it's going to be a bump. Um. We're already seeing 89 00:05:10,600 --> 00:05:13,880 Speaker 1: that we've just pulled together on now casts for growth 90 00:05:13,920 --> 00:05:17,400 Speaker 1: at the end of one. They're coming down more or 91 00:05:17,480 --> 00:05:21,440 Speaker 1: less across the board. As a macron triggers more caution 92 00:05:21,640 --> 00:05:25,800 Speaker 1: from consumers and businesses and governments. But I think it's 93 00:05:25,800 --> 00:05:27,359 Speaker 1: going to be a bump. I don't think it's going 94 00:05:27,400 --> 00:05:31,680 Speaker 1: to derail the recovery. Firstly, whilst O macrons seems to 95 00:05:31,720 --> 00:05:35,200 Speaker 1: be more contagious than other variants, it doesn't so far 96 00:05:35,240 --> 00:05:38,840 Speaker 1: appear to be more deadly. Secondly, the world is just 97 00:05:38,920 --> 00:05:42,520 Speaker 1: getting smarter at dealing with COVID, and you see each 98 00:05:42,560 --> 00:05:47,120 Speaker 1: successive wave is having a smaller impact on the economy. 99 00:05:47,240 --> 00:05:49,919 Speaker 1: And I guess just to stick with the macroeconomics for 100 00:05:49,920 --> 00:05:53,040 Speaker 1: a minute, the other sort of dramatic thing that happened 101 00:05:53,040 --> 00:05:56,320 Speaker 1: in December, apart from the the rise of O Macron, 102 00:05:56,480 --> 00:05:59,599 Speaker 1: was this shift from the US Central Bank the Federal Reserve, 103 00:06:00,560 --> 00:06:04,200 Speaker 1: where it really came round to saying inflations now enemy 104 00:06:04,279 --> 00:06:07,640 Speaker 1: number one for the US economy. And as we know, 105 00:06:07,680 --> 00:06:10,039 Speaker 1: there's been many critics, including Larry Summers, who we heard 106 00:06:10,040 --> 00:06:13,240 Speaker 1: from in last week's episode, who think it's about time 107 00:06:13,560 --> 00:06:16,120 Speaker 1: that the Federal Reserve stopped using the word transitory when 108 00:06:16,160 --> 00:06:18,840 Speaker 1: it comes to inflation. But we are now looking at 109 00:06:19,680 --> 00:06:24,560 Speaker 1: several rate increases, are quite significant tightening of monetary policy 110 00:06:25,480 --> 00:06:28,000 Speaker 1: for two at a time when we know a lot 111 00:06:28,040 --> 00:06:30,560 Speaker 1: of that emergency fiscal support for the U s economy 112 00:06:30,640 --> 00:06:33,520 Speaker 1: is also going to be drying up. Tom, you talk 113 00:06:33,560 --> 00:06:36,440 Speaker 1: about what we don't expect twelve months out. Is it 114 00:06:36,480 --> 00:06:39,200 Speaker 1: conceivable that we might be talking about a coming recession 115 00:06:39,320 --> 00:06:42,920 Speaker 1: in twelve months time? What are the risks? Well, I'm 116 00:06:42,920 --> 00:06:45,080 Speaker 1: not sure it's going to be a recession. The US 117 00:06:45,200 --> 00:06:49,160 Speaker 1: recovery still has further to run. The US households are 118 00:06:49,200 --> 00:06:52,560 Speaker 1: still sitting on a bunch of pandemic savings which they 119 00:06:52,600 --> 00:06:55,600 Speaker 1: need to spend. At the same time, the beginning of 120 00:06:55,680 --> 00:06:58,960 Speaker 1: the FED tightening cycle and what looks like potentially a 121 00:06:59,120 --> 00:07:02,960 Speaker 1: rather hurried tightening cycle, does come with some pretty significant 122 00:07:03,040 --> 00:07:07,320 Speaker 1: risks attached. First, as you mentioned, Stephanie, the FED will 123 00:07:07,360 --> 00:07:11,600 Speaker 1: be raising interest rates at almost exactly the moment when 124 00:07:11,760 --> 00:07:15,520 Speaker 1: US fiscal policy starts to run out of umph. Will 125 00:07:15,560 --> 00:07:18,320 Speaker 1: hear more about this from Nancy, I'm sure, but from 126 00:07:18,400 --> 00:07:22,160 Speaker 1: what I can see, the opposition of Senator Joe Mansion 127 00:07:22,600 --> 00:07:27,480 Speaker 1: has dealt a death blow to Biden's Build Back Better agenda. Second, 128 00:07:27,920 --> 00:07:30,240 Speaker 1: the FED is going to be tightening at a moment 129 00:07:30,320 --> 00:07:34,800 Speaker 1: when US equity markets and US property prices are pretty 130 00:07:34,840 --> 00:07:40,440 Speaker 1: close to bubble territory, and that's potentially a toxic combination. Thirdly, 131 00:07:40,960 --> 00:07:45,360 Speaker 1: already in one we've seen some emerging markets getting into trouble, 132 00:07:45,720 --> 00:07:50,480 Speaker 1: especially Turkey, a reflection of the shall we say, idiosyncratic 133 00:07:50,760 --> 00:07:54,840 Speaker 1: approach to policymaking from President Urduan. For the rest of 134 00:07:54,880 --> 00:07:58,480 Speaker 1: the emerging market universe, the start of the FED tightening 135 00:07:58,520 --> 00:08:00,920 Speaker 1: cycle is going to be a challenge movement. We're going 136 00:08:00,920 --> 00:08:07,080 Speaker 1: to see capital outflows, falling currencies, weaker markets, and a 137 00:08:07,240 --> 00:08:10,960 Speaker 1: challenge to growth at exactly the moment when the spread 138 00:08:11,080 --> 00:08:14,560 Speaker 1: of the omicron variant means they need more rather than 139 00:08:14,680 --> 00:08:20,360 Speaker 1: lass support. And Nancy, we mentioned President Biden's fiscal woes 140 00:08:20,520 --> 00:08:24,240 Speaker 1: or fiscal congressional woes with his fiscal package, that this 141 00:08:24,280 --> 00:08:26,040 Speaker 1: is actually in asking you this question, we have to 142 00:08:26,080 --> 00:08:30,240 Speaker 1: come clean that we're actually recording this just before Christmas Eve. 143 00:08:30,560 --> 00:08:33,200 Speaker 1: So it's the worst possible time to be asking you 144 00:08:33,240 --> 00:08:36,320 Speaker 1: what's going to happen to the great Build Back Better 145 00:08:36,360 --> 00:08:38,839 Speaker 1: or agenda because we still have this big tax and 146 00:08:38,920 --> 00:08:42,120 Speaker 1: spending package that we don't know the fate of you. 147 00:08:42,640 --> 00:08:45,440 Speaker 1: By the time this comes out just around New Year's 148 00:08:45,640 --> 00:08:49,400 Speaker 1: do you think President Biden will have passed or be 149 00:08:49,480 --> 00:08:53,360 Speaker 1: about to pass those important tax changes and spending increases. 150 00:08:53,920 --> 00:08:56,440 Speaker 1: I don't think so. I think that as Senator Mansion 151 00:08:56,559 --> 00:09:00,000 Speaker 1: made his position very clear in a Fox News program 152 00:09:00,040 --> 00:09:02,960 Speaker 1: that he was going to oppose it. Uh, there was 153 00:09:03,000 --> 00:09:05,559 Speaker 1: a lot of animosity between himself and the White House 154 00:09:05,559 --> 00:09:08,559 Speaker 1: earlier this week, and and you know, people at the 155 00:09:08,600 --> 00:09:11,200 Speaker 1: Senate will go home to celebrate the holidays, just like 156 00:09:11,240 --> 00:09:13,280 Speaker 1: a lot of other people, and so we will not 157 00:09:13,360 --> 00:09:16,240 Speaker 1: see resolution by New Year's and I would argue we 158 00:09:16,280 --> 00:09:19,920 Speaker 1: probably won't even see resolution by mid January. UM. It's 159 00:09:19,920 --> 00:09:22,360 Speaker 1: a huge disappointment to the White House because they had 160 00:09:22,400 --> 00:09:27,559 Speaker 1: really planned in two on having the president's domestic economic 161 00:09:27,600 --> 00:09:30,440 Speaker 1: agenda sort of in the bag and done so they 162 00:09:30,480 --> 00:09:33,280 Speaker 1: could move on to some other policy things like their 163 00:09:33,360 --> 00:09:36,800 Speaker 1: China policy or some other foreign policy questions, and then 164 00:09:36,840 --> 00:09:40,400 Speaker 1: also just implementing and selling the economic package, and so 165 00:09:40,520 --> 00:09:43,440 Speaker 1: this just really prolongs that. And there were also a 166 00:09:43,520 --> 00:09:46,880 Speaker 1: number of policy changes in there that were very important 167 00:09:46,920 --> 00:09:49,480 Speaker 1: to the progressive wing of the party. And so now 168 00:09:49,559 --> 00:09:53,480 Speaker 1: you have a riff between Senator Joe Mansion, the key 169 00:09:53,559 --> 00:09:56,480 Speaker 1: you know, fiftieth senator who President Biden needs in support, 170 00:09:56,520 --> 00:09:59,800 Speaker 1: but also with the progressives who feel like these are 171 00:09:59,800 --> 00:10:01,920 Speaker 1: the things that they wanted and this was the legacy 172 00:10:01,960 --> 00:10:05,520 Speaker 1: that they wanted Democrats to to really show in voters, 173 00:10:05,640 --> 00:10:07,760 Speaker 1: and it seems like that is slipping away from the 174 00:10:07,760 --> 00:10:12,120 Speaker 1: Biden administration. If presidents don't manage to pass particularly early 175 00:10:12,160 --> 00:10:14,480 Speaker 1: in their administration when they're supposed to have a bit 176 00:10:14,480 --> 00:10:18,640 Speaker 1: more ability to do stuff, usually if they don't pass 177 00:10:18,720 --> 00:10:22,480 Speaker 1: kind of signature legislation. They tend to be relying on 178 00:10:22,520 --> 00:10:25,960 Speaker 1: the economy for whatever support they have in the polls. 179 00:10:27,200 --> 00:10:31,080 Speaker 1: We've got sort of pretty strong economic recovery at the moment, 180 00:10:31,480 --> 00:10:34,560 Speaker 1: but it is coming with this higher inflation, but wages 181 00:10:34,600 --> 00:10:36,560 Speaker 1: at the lower end of the pace Kale are going up. 182 00:10:37,160 --> 00:10:38,800 Speaker 1: Is it going to do him good as we go 183 00:10:38,880 --> 00:10:41,480 Speaker 1: through the year. It doesn't. It doesn't feel like that 184 00:10:41,480 --> 00:10:46,360 Speaker 1: that that relatively positive picture is doing the administration much good. 185 00:10:46,880 --> 00:10:49,760 Speaker 1: It isn't. And we have seen Paul after a political 186 00:10:49,800 --> 00:10:53,200 Speaker 1: poll and it's really fascinating showing that the majority of 187 00:10:53,200 --> 00:10:57,800 Speaker 1: Americans feel like they do not feel optimistic about the economy. 188 00:10:57,840 --> 00:11:00,720 Speaker 1: There was a fascinating ABC News Washing and Post poll 189 00:11:00,760 --> 00:11:05,439 Speaker 1: in November that showed seventy of Americans rathe the economy negatively. 190 00:11:05,600 --> 00:11:07,680 Speaker 1: Despite what you said, which is that the data is 191 00:11:07,720 --> 00:11:11,240 Speaker 1: actually pretty mixed. Um. But what White House people and 192 00:11:11,320 --> 00:11:14,000 Speaker 1: economists and pundance that I talked to really believe is 193 00:11:14,040 --> 00:11:17,600 Speaker 1: that the overhang of inflation and just the uncertainty caused 194 00:11:17,600 --> 00:11:22,080 Speaker 1: by COVID and the virus is coloring people's perception entirely. 195 00:11:22,679 --> 00:11:25,320 Speaker 1: And it's just the sense that people having to pay 196 00:11:25,360 --> 00:11:29,320 Speaker 1: more for groceries and gas. Um, you know, rent, if 197 00:11:29,320 --> 00:11:32,199 Speaker 1: they're renting their apartment or their house, that is really 198 00:11:32,240 --> 00:11:36,640 Speaker 1: coloring you know, everyone's perception, even people who are middle 199 00:11:36,679 --> 00:11:39,720 Speaker 1: income or higher income, who are not as affected by 200 00:11:39,800 --> 00:11:42,280 Speaker 1: an increase in the price of milk, for instance. But 201 00:11:42,360 --> 00:11:44,920 Speaker 1: it's just really sort of psychological at this point, and 202 00:11:44,960 --> 00:11:55,920 Speaker 1: it's it is really affecting the president's approval numbers. Well, Aaron. 203 00:11:56,960 --> 00:11:58,400 Speaker 1: One of the other things that was supposed to be 204 00:11:58,440 --> 00:12:00,720 Speaker 1: the great distinguishing feature of this of anustration was its 205 00:12:00,760 --> 00:12:02,319 Speaker 1: record on the climate. It was gonna be he was 206 00:12:02,320 --> 00:12:06,040 Speaker 1: going to be the greenest president ever. Um. You mentioned 207 00:12:06,160 --> 00:12:10,120 Speaker 1: Cop twenty six in Glasgow. One of the disappointments there 208 00:12:10,240 --> 00:12:14,280 Speaker 1: arguably was that the US was not able to bring 209 00:12:14,320 --> 00:12:17,679 Speaker 1: a dramatic new commitment, or not one that seemed to 210 00:12:17,720 --> 00:12:21,600 Speaker 1: be very dramatic to to outsiders. If if the president 211 00:12:21,640 --> 00:12:25,920 Speaker 1: can't pass these big tax and spending plans, um, what 212 00:12:26,040 --> 00:12:29,880 Speaker 1: chance does he have of being truly transformational on the environment. 213 00:12:30,679 --> 00:12:34,480 Speaker 1: Yet it's very tough. I mean, he and entered office, 214 00:12:34,920 --> 00:12:37,760 Speaker 1: everyone knew he would rejoin the Paris Agreement, the idea 215 00:12:37,800 --> 00:12:40,199 Speaker 1: that the United States would set a net zero target 216 00:12:40,240 --> 00:12:43,160 Speaker 1: at mid century like so many other large nations have, 217 00:12:43,280 --> 00:12:47,160 Speaker 1: was established. Um, what Biden really wanted to arrive at 218 00:12:47,200 --> 00:12:50,560 Speaker 1: cop able to show and what he now with mansioned 219 00:12:50,559 --> 00:12:53,720 Speaker 1: statement on the billback better plan seems really in doubt. 220 00:12:53,880 --> 00:12:57,559 Speaker 1: It's his ability to move the needle on American emissions 221 00:12:57,720 --> 00:13:01,280 Speaker 1: between now and you know, the plan us to reduce 222 00:13:01,320 --> 00:13:04,360 Speaker 1: emissions by half over the two thousand five levels by 223 00:13:04,360 --> 00:13:07,720 Speaker 1: the end of this decade, and without passing legislation, it's 224 00:13:07,760 --> 00:13:10,640 Speaker 1: going to be really hard to do those things. There 225 00:13:10,800 --> 00:13:15,280 Speaker 1: was money in the spending plan for things like ev infrastructure, 226 00:13:15,720 --> 00:13:18,240 Speaker 1: subsidies for consumers who are putting solar panels on their roofs, 227 00:13:18,240 --> 00:13:21,720 Speaker 1: are adopting electric cars, incentives for people to build for 228 00:13:21,720 --> 00:13:24,200 Speaker 1: a company to build more renewable energy. None of those 229 00:13:24,200 --> 00:13:27,680 Speaker 1: things can really effectively be done without passing legislation. You 230 00:13:27,720 --> 00:13:29,960 Speaker 1: can't you can't do it with executive action. One of 231 00:13:29,960 --> 00:13:33,200 Speaker 1: the really interesting things about watching this debate play out 232 00:13:33,240 --> 00:13:35,000 Speaker 1: in Washington is that it's one of the first times 233 00:13:35,040 --> 00:13:38,560 Speaker 1: we've been able to see climate modelers, so professors who 234 00:13:38,920 --> 00:13:43,120 Speaker 1: apply you know, real world computer modeling. We're analyzing legislation 235 00:13:43,200 --> 00:13:45,400 Speaker 1: in real time as it was changed, and being able 236 00:13:45,400 --> 00:13:47,760 Speaker 1: to analyze what it would do to emissions UM and 237 00:13:48,080 --> 00:13:49,880 Speaker 1: by the end of the process there were still a 238 00:13:49,960 --> 00:13:52,760 Speaker 1: huge ability to drive emissions down with the legislation as 239 00:13:52,760 --> 00:13:55,000 Speaker 1: it stood. But without that, I don't think it can 240 00:13:55,000 --> 00:13:59,320 Speaker 1: be replaced by by anything um in executive action. Since 241 00:13:59,320 --> 00:14:01,719 Speaker 1: we're looking ahead, I mean that the there is another COP. 242 00:14:01,800 --> 00:14:06,760 Speaker 1: There's another big meeting in Egypt later in twenty two. 243 00:14:06,880 --> 00:14:09,240 Speaker 1: If what you say is true is the is there 244 00:14:09,240 --> 00:14:12,120 Speaker 1: going to be a great loss of momentum at least 245 00:14:12,200 --> 00:14:15,560 Speaker 1: coming from the US. Well, you know, one of the 246 00:14:15,559 --> 00:14:17,520 Speaker 1: things we saw at this COP that is a sign 247 00:14:17,559 --> 00:14:21,040 Speaker 1: of some some optimism for COP twenty seven in Egypt 248 00:14:21,400 --> 00:14:24,480 Speaker 1: is that the U. S. And China, which are agreeing 249 00:14:24,520 --> 00:14:26,920 Speaker 1: on so little right now and there's so little cooperation 250 00:14:26,960 --> 00:14:31,040 Speaker 1: between them, did make a bilateral agreement to cooperate on 251 00:14:31,080 --> 00:14:33,800 Speaker 1: some key things like methane emissions. So there will be 252 00:14:33,840 --> 00:14:35,520 Speaker 1: things to check in on at COP twenty seven that 253 00:14:35,560 --> 00:14:38,440 Speaker 1: will be really interesting. That said, I don't think you 254 00:14:38,440 --> 00:14:41,440 Speaker 1: can expect to see more action than we saw at 255 00:14:41,480 --> 00:14:43,760 Speaker 1: COP twenty six, which probably sounds a little disappointing. COP 256 00:14:43,760 --> 00:14:46,240 Speaker 1: twenty six was sort of in this five year post 257 00:14:46,280 --> 00:14:50,200 Speaker 1: Paris model where a lot, not just the big emitters 258 00:14:50,240 --> 00:14:52,080 Speaker 1: like the U, S and China, but the whole world 259 00:14:52,160 --> 00:14:54,720 Speaker 1: was supposed to do a stock taking. Um, it's not 260 00:14:54,760 --> 00:14:57,040 Speaker 1: that COP twenty seven won't be interesting, but I think 261 00:14:57,720 --> 00:14:59,960 Speaker 1: the chances of it exceeding what we saw a copped 262 00:15:00,000 --> 00:15:01,960 Speaker 1: and sex are actually quite quite low. So I think 263 00:15:02,000 --> 00:15:04,600 Speaker 1: that is a bit of a downer heading into the 264 00:15:04,640 --> 00:15:07,360 Speaker 1: next year if you're looking for big action on climate 265 00:15:08,080 --> 00:15:10,320 Speaker 1: Moxamma ram And I mean if we cross the Atlantic, 266 00:15:10,640 --> 00:15:14,440 Speaker 1: we've been talking about the interplay between politics and the 267 00:15:14,480 --> 00:15:17,400 Speaker 1: economy in the US and how that may play out 268 00:15:17,640 --> 00:15:21,080 Speaker 1: next year. I mean, how is the recovery playing out 269 00:15:21,160 --> 00:15:24,200 Speaker 1: for governments in Europe? Has has O Macron sent everyone 270 00:15:24,240 --> 00:15:27,160 Speaker 1: back to square one on that? I mean, it definitely 271 00:15:27,200 --> 00:15:30,400 Speaker 1: comes at a very difficult political moment for Europe and 272 00:15:30,440 --> 00:15:34,120 Speaker 1: for the EU, because you've got major transitions that are 273 00:15:34,240 --> 00:15:37,320 Speaker 1: likely next year. And I'm I'm thinking about France and 274 00:15:37,360 --> 00:15:40,400 Speaker 1: Italy in particular, or they've just happened here, I'm thinking 275 00:15:40,440 --> 00:15:42,960 Speaker 1: about Germany. I mean, there is a risk that the 276 00:15:42,960 --> 00:15:45,840 Speaker 1: incoming government in Berlin wobbles a little bit because there 277 00:15:45,880 --> 00:15:48,920 Speaker 1: is a perception that Ola Schultz has been to lax 278 00:15:49,000 --> 00:15:51,480 Speaker 1: on restrictions, and some of the surge that way now 279 00:15:51,560 --> 00:15:55,040 Speaker 1: seeing is because his government hasn't leaned into the challenges 280 00:15:55,040 --> 00:15:58,600 Speaker 1: aggressively as they needed to. I'd argue on Micron is 281 00:15:58,640 --> 00:16:00,800 Speaker 1: probably the single biggest unknown for the outcome of the 282 00:16:00,800 --> 00:16:04,400 Speaker 1: French election. Macron has his election on the tenth and 283 00:16:04,440 --> 00:16:07,880 Speaker 1: twenty fourth of April next year, and you know, as 284 00:16:07,960 --> 00:16:10,360 Speaker 1: as as things stand, I think because of that election, 285 00:16:10,960 --> 00:16:14,200 Speaker 1: he's ruled against the kind of draconian social restrictions we're 286 00:16:14,200 --> 00:16:17,520 Speaker 1: seeing in countries like Denmark and the Netherlands and probably 287 00:16:17,560 --> 00:16:20,600 Speaker 1: in the UK, because he thinks they will probably test 288 00:16:20,640 --> 00:16:24,440 Speaker 1: the nation's patients and puncture. The economic recovery. France is 289 00:16:24,480 --> 00:16:27,240 Speaker 1: looking at six or seven percent growth this year, so 290 00:16:27,280 --> 00:16:30,520 Speaker 1: he's he's making a big gamble that boosters on the 291 00:16:30,600 --> 00:16:34,560 Speaker 1: vaccination side and tightening of the health pass will allow 292 00:16:34,680 --> 00:16:37,640 Speaker 1: France to weather what would otherwise be a sixth wave. 293 00:16:38,600 --> 00:16:40,840 Speaker 1: If the gamble fails, I think he may forfeit his 294 00:16:40,920 --> 00:16:44,760 Speaker 1: claim to have steered France through the pandemic reasonably well. 295 00:16:45,520 --> 00:16:48,640 Speaker 1: I would say that people around Macron believe actually there 296 00:16:48,720 --> 00:16:50,960 Speaker 1: is a resurgence of the pandemic. It could play quite 297 00:16:51,040 --> 00:16:54,320 Speaker 1: well for him because his ratings typically tend to rise 298 00:16:54,760 --> 00:16:57,600 Speaker 1: into into in times of acute health crisis. But I 299 00:16:57,600 --> 00:16:59,960 Speaker 1: think the big point is it has unknown and unpredicted 300 00:17:00,640 --> 00:17:03,640 Speaker 1: impact on a very consequential race in the European Union 301 00:17:03,640 --> 00:17:05,800 Speaker 1: next year. Well, we'll come back to you on the 302 00:17:05,880 --> 00:17:07,879 Speaker 1: on the more on the on the European politics in 303 00:17:07,920 --> 00:17:10,760 Speaker 1: a minute, But Tom, we should get back to China 304 00:17:11,240 --> 00:17:14,280 Speaker 1: because it was such a big feature of discussions last 305 00:17:14,320 --> 00:17:16,960 Speaker 1: year when you we were talking about the FED at 306 00:17:17,000 --> 00:17:20,760 Speaker 1: the beginning raising rates. It's certainly the first time I 307 00:17:20,760 --> 00:17:23,960 Speaker 1: can remember that we're going into a year where the 308 00:17:24,080 --> 00:17:27,639 Speaker 1: US Central Bank is expected to be raising interest rates, 309 00:17:27,640 --> 00:17:30,320 Speaker 1: but China is actually not going to be slavishly following 310 00:17:30,320 --> 00:17:31,960 Speaker 1: the FED. It's going to be doing its own thing, 311 00:17:32,080 --> 00:17:36,320 Speaker 1: cutting rates to support its economy. That is a moment 312 00:17:36,359 --> 00:17:38,520 Speaker 1: in itself, isn't it, Tom? But I guess we should 313 00:17:38,520 --> 00:17:41,800 Speaker 1: also worry about two of the largest economies in the 314 00:17:41,840 --> 00:17:44,320 Speaker 1: world slowing down at the same time. So I think 315 00:17:44,359 --> 00:17:47,280 Speaker 1: there's a couple of things going on their staff. The first, 316 00:17:47,320 --> 00:17:50,600 Speaker 1: as you know, is that the FED and the PUC 317 00:17:51,240 --> 00:17:54,680 Speaker 1: are very likely going to be moving in opposite directions 318 00:17:54,720 --> 00:18:01,520 Speaker 1: in two and that in itself is already pretty remark cable. Historically, 319 00:18:02,080 --> 00:18:05,600 Speaker 1: because China's currency, the rem and B, was tied to 320 00:18:05,680 --> 00:18:09,040 Speaker 1: the dollar, the People's Bank of China had to follow 321 00:18:09,280 --> 00:18:12,719 Speaker 1: the FED. It didn't matter what economic conditions were like 322 00:18:12,880 --> 00:18:16,399 Speaker 1: in China. If the FED hiked, the PBOC had to 323 00:18:16,440 --> 00:18:19,600 Speaker 1: follow them, and if the FED cut, the PBOC had 324 00:18:19,640 --> 00:18:25,800 Speaker 1: to follow them. Now, after a decade of careful, painstaking reforms, 325 00:18:26,160 --> 00:18:30,000 Speaker 1: the remin b is much closer to a free floating currency, 326 00:18:30,200 --> 00:18:33,720 Speaker 1: and that's given China's central bank a new degree of 327 00:18:33,800 --> 00:18:38,159 Speaker 1: freedom on how it manages monetary policy, and we already 328 00:18:38,200 --> 00:18:41,520 Speaker 1: see them using it. The second important implication of the 329 00:18:41,560 --> 00:18:47,840 Speaker 1: PBOC loosening is what it says about China's current economic condition. 330 00:18:48,800 --> 00:18:52,960 Speaker 1: In the third quarter of one we saw China grind 331 00:18:53,080 --> 00:18:57,040 Speaker 1: to a halt, a reflection of the ever grand property 332 00:18:57,160 --> 00:19:01,960 Speaker 1: slump of the government's zero COVID strategy and all that 333 00:19:02,000 --> 00:19:07,520 Speaker 1: means for lockdowns and of energy shortages. And in two 334 00:19:08,000 --> 00:19:11,160 Speaker 1: two of those problems, the property slump and the zero 335 00:19:11,240 --> 00:19:15,720 Speaker 1: COVID strategy are going to be there with China still. 336 00:19:16,480 --> 00:19:19,800 Speaker 1: What that means is that the PBOC is very likely 337 00:19:20,040 --> 00:19:23,119 Speaker 1: going to need to loosen further, and they're going to 338 00:19:23,160 --> 00:19:26,280 Speaker 1: be pretty grateful that those years of reform on the 339 00:19:26,320 --> 00:19:29,439 Speaker 1: exchange rate have brought them the freedom to move in 340 00:19:29,440 --> 00:19:33,480 Speaker 1: a different direction from a tightening fed. You've just you've 341 00:19:33,480 --> 00:19:36,200 Speaker 1: added in another question market with something to worry about. 342 00:19:36,280 --> 00:19:38,760 Speaker 1: For the for the strength of the of the global economy. 343 00:19:38,760 --> 00:19:41,639 Speaker 1: In in two we seem to be adding them up. 344 00:19:42,359 --> 00:19:44,919 Speaker 1: Aaron Rakoff, you will have a better sense of this 345 00:19:44,960 --> 00:19:47,880 Speaker 1: than anyone. I always feel there's a bit of a 346 00:19:48,520 --> 00:19:52,800 Speaker 1: sort of disconnect in discussions around China and climate because 347 00:19:52,840 --> 00:19:54,639 Speaker 1: on the one hand, we sort of, you know, they 348 00:19:54,680 --> 00:19:59,080 Speaker 1: didn't the leaderships, senior leadership, didn't come to COP twenty six, 349 00:19:59,600 --> 00:20:04,240 Speaker 1: the the commitments on the sort of global stage seem 350 00:20:04,520 --> 00:20:08,360 Speaker 1: a bit um week compared to some countries. But then 351 00:20:08,560 --> 00:20:10,959 Speaker 1: I talked to China experts who say, no, they're the 352 00:20:10,960 --> 00:20:15,120 Speaker 1: country that has done most to really embed climate commitments 353 00:20:15,200 --> 00:20:18,320 Speaker 1: in their development strategy, at least on paper, and it's 354 00:20:18,320 --> 00:20:21,320 Speaker 1: going to fundamentally change the direction of the economy in 355 00:20:21,359 --> 00:20:24,680 Speaker 1: the next few years. So so what's right, I mean, 356 00:20:24,720 --> 00:20:28,840 Speaker 1: should we take um China more or less seriously on 357 00:20:28,880 --> 00:20:32,640 Speaker 1: the climate? Well, I mean, you can look at China's 358 00:20:32,720 --> 00:20:36,040 Speaker 1: current emissions and it's really the lynch pain for the 359 00:20:36,040 --> 00:20:39,600 Speaker 1: whole world. In a lot of ways. The Chinese emissions 360 00:20:39,720 --> 00:20:42,879 Speaker 1: right now are about the equivalent of the next for 361 00:20:43,200 --> 00:20:48,320 Speaker 1: largest emitters nation states combined um and within China, you 362 00:20:48,359 --> 00:20:51,200 Speaker 1: can look at some of the biggest emitting companies, many 363 00:20:51,280 --> 00:20:54,159 Speaker 1: which are state controlled or heavily state influenced, and the 364 00:20:54,200 --> 00:20:57,240 Speaker 1: emissions of those companies will be as large as some 365 00:20:57,440 --> 00:21:01,800 Speaker 1: very significant you know, like individual Europeans and Chinese steelmaker 366 00:21:01,840 --> 00:21:04,280 Speaker 1: will have the same size emissions. But there's also a 367 00:21:04,320 --> 00:21:07,120 Speaker 1: lot of signs for optimism there. I mean, unlike Joe 368 00:21:07,160 --> 00:21:10,359 Speaker 1: Biden's struggles in the United States, the Chinese government does 369 00:21:10,440 --> 00:21:13,000 Speaker 1: have a large voice in terms of what it's a 370 00:21:13,200 --> 00:21:16,800 Speaker 1: huge omitting companies do. There's not a need to pass legislation. 371 00:21:17,160 --> 00:21:21,760 Speaker 1: China is enormous consumer and driver of the renewable energy transition. 372 00:21:21,960 --> 00:21:25,360 Speaker 1: Whether you're looking at things like the installed wind capacity 373 00:21:25,400 --> 00:21:27,280 Speaker 1: that will be added in two so much of that 374 00:21:27,280 --> 00:21:29,600 Speaker 1: will be in China. The same thing with a new 375 00:21:29,640 --> 00:21:32,080 Speaker 1: solar capacity will be arriving in China. And even at 376 00:21:32,080 --> 00:21:33,919 Speaker 1: the end of this year, we saw China cross a 377 00:21:33,960 --> 00:21:37,560 Speaker 1: threshold where one in five vehicle sold was an electric vehicle. 378 00:21:37,920 --> 00:21:42,200 Speaker 1: So there really are signs for optimism there. Uh, it's 379 00:21:42,200 --> 00:21:44,239 Speaker 1: like everything else though, I guess a bit of a 380 00:21:44,280 --> 00:21:47,000 Speaker 1: mixed bag. And I think Tom also mentioned the sort 381 00:21:47,000 --> 00:21:52,400 Speaker 1: of the energy shortages and ectricity problems in China last year. 382 00:21:52,760 --> 00:21:54,520 Speaker 1: I did see there was an article in The Economist 383 00:21:54,560 --> 00:21:57,159 Speaker 1: actually that was claiming that this two was going to 384 00:21:57,240 --> 00:22:01,919 Speaker 1: be a real reality check moment for the world's climate ambitions, 385 00:22:01,960 --> 00:22:05,280 Speaker 1: because we saw last year when push comes to shove, 386 00:22:05,480 --> 00:22:06,800 Speaker 1: or in the case of the UK, you know, the 387 00:22:06,800 --> 00:22:12,000 Speaker 1: wind fails to blow, um, we immediately crank up you know, 388 00:22:12,080 --> 00:22:14,440 Speaker 1: the dirtiest power stations again, or in the case of 389 00:22:14,520 --> 00:22:17,399 Speaker 1: China and India, we crank up coal output because energy 390 00:22:17,440 --> 00:22:21,600 Speaker 1: prices are soaring, and that and those carbon neutral options, 391 00:22:21,600 --> 00:22:24,280 Speaker 1: those green options that we like to think we have, 392 00:22:24,560 --> 00:22:28,200 Speaker 1: are actually not quite there yet. Do we have a 393 00:22:28,200 --> 00:22:32,399 Speaker 1: another disconnect there between our our great green ambitions and 394 00:22:32,400 --> 00:22:35,600 Speaker 1: where the world actually is now. I think that's right. 395 00:22:35,680 --> 00:22:39,280 Speaker 1: If the expectation is that renewable energy could step in 396 00:22:39,359 --> 00:22:42,680 Speaker 1: the place of very volatible fossil energy markets and just 397 00:22:43,600 --> 00:22:47,159 Speaker 1: you know, be a stabilizing force when the price of 398 00:22:47,640 --> 00:22:51,119 Speaker 1: natural gas or oil or call was shooting up, I 399 00:22:51,119 --> 00:22:53,760 Speaker 1: think that that is premature. On the other hand, I 400 00:22:53,800 --> 00:22:56,679 Speaker 1: think there's a certain degree of the transition that is 401 00:22:57,080 --> 00:22:58,800 Speaker 1: beaked into the kick ring now, even if you're looking 402 00:22:58,840 --> 00:23:02,080 Speaker 1: at a place like China. UM, the China's whole strategy 403 00:23:02,080 --> 00:23:05,360 Speaker 1: around electric vehicle adoption is because they don't have much 404 00:23:05,359 --> 00:23:09,200 Speaker 1: in the way of oil domestically. They're reliant in an 405 00:23:09,240 --> 00:23:14,440 Speaker 1: American and Australian lergy imports. So I don't think there's 406 00:23:14,440 --> 00:23:17,400 Speaker 1: anything that's going to throw off the continued adoption in 407 00:23:18,000 --> 00:23:21,120 Speaker 1: around the world, but especially in China, of renewable energy. 408 00:23:21,200 --> 00:23:23,080 Speaker 1: And I think one of the really fascinating questions to 409 00:23:23,119 --> 00:23:25,160 Speaker 1: track in the year ahead is the extent to which 410 00:23:25,640 --> 00:23:29,200 Speaker 1: higher fossil energy prices, higher oil prices um are something 411 00:23:29,200 --> 00:23:32,119 Speaker 1: that drive people towards more renewable energy investment, or it 412 00:23:32,160 --> 00:23:35,680 Speaker 1: creates kind of political backlash against renewables and slows things down. 413 00:23:35,760 --> 00:23:37,800 Speaker 1: It's a real open question. I think. I feel like 414 00:23:37,800 --> 00:23:39,600 Speaker 1: it's an economist I should know whether it's a good 415 00:23:39,600 --> 00:23:41,840 Speaker 1: thing or a bad thing for energy prices to go up. 416 00:23:41,840 --> 00:23:43,239 Speaker 1: But I agree with you, I think it's it's it's 417 00:23:43,320 --> 00:23:48,000 Speaker 1: kind of difficult. Um. Mid climate concerns were pretty prominent 418 00:23:48,080 --> 00:23:51,520 Speaker 1: in the German election When I talked to our German 419 00:23:51,560 --> 00:23:54,560 Speaker 1: correspondents a few weeks ago about the new government, they 420 00:23:54,560 --> 00:23:57,240 Speaker 1: didn't think it was going to signal a very big 421 00:23:57,320 --> 00:24:01,399 Speaker 1: change in German policy for twenty two empty two. But 422 00:24:01,720 --> 00:24:05,280 Speaker 1: you've already highlighted we have another fantastically important election coming up, 423 00:24:05,320 --> 00:24:08,199 Speaker 1: the French presidential election. Is there a chance of a 424 00:24:08,240 --> 00:24:12,160 Speaker 1: serious upset there? Quickly on Germany, Stephanie, before I talked 425 00:24:12,200 --> 00:24:14,399 Speaker 1: to you about France, I think we're actually upcoming a 426 00:24:14,520 --> 00:24:17,040 Speaker 1: bit more bullish on Germany. Actually, I think Schultz is 427 00:24:17,040 --> 00:24:19,880 Speaker 1: going to do quite a lot domestically on fiscal policy. 428 00:24:20,280 --> 00:24:22,760 Speaker 1: I think that's clear. They're not going to amend the constitution, 429 00:24:22,800 --> 00:24:25,159 Speaker 1: but they're figuring out all kinds of innovative ways in 430 00:24:25,200 --> 00:24:28,520 Speaker 1: which they can circumvent the rules and ensure they're they're 431 00:24:28,560 --> 00:24:31,359 Speaker 1: spending more, maybe you know, in the order of no 432 00:24:31,520 --> 00:24:34,000 Speaker 1: point five one one five percentage GDP that could be 433 00:24:34,080 --> 00:24:37,359 Speaker 1: quite substantial. But even on Europe, I think people are 434 00:24:37,400 --> 00:24:39,960 Speaker 1: getting a bit more optimistic about what shots might do. 435 00:24:40,200 --> 00:24:44,160 Speaker 1: The Finance Minister Christine Lindner has been sounding very very 436 00:24:44,240 --> 00:24:46,960 Speaker 1: dovish indeed, and I think now the question is if 437 00:24:47,040 --> 00:24:49,520 Speaker 1: Linda is not a constraint how far the shots himself 438 00:24:49,520 --> 00:24:51,920 Speaker 1: want to go. So I think Germany is something to watch, 439 00:24:51,920 --> 00:24:53,879 Speaker 1: certainly on the Europe side, where there might be quite 440 00:24:53,880 --> 00:24:57,320 Speaker 1: some upside surprise next year. In France, I think, look, 441 00:24:57,400 --> 00:24:59,760 Speaker 1: Macron is in an interesting position. He's at twenty tw 442 00:25:00,040 --> 00:25:04,920 Speaker 1: ex percent, quite stable for a sitting president at this 443 00:25:05,320 --> 00:25:08,800 Speaker 1: point in his political cycle. All of the carnage is 444 00:25:08,840 --> 00:25:12,080 Speaker 1: one level below Macron, primarily on the center right and 445 00:25:12,119 --> 00:25:16,880 Speaker 1: the far right, where you have Lapen, Valerie Progress who 446 00:25:16,920 --> 00:25:19,159 Speaker 1: is the nominee for the center right, and Eric Zamore, 447 00:25:19,840 --> 00:25:24,600 Speaker 1: this somewhat weird racist pundit who announced his campaign to 448 00:25:24,680 --> 00:25:27,360 Speaker 1: great fanfare, had a fair amoun of momentum but has 449 00:25:27,400 --> 00:25:30,520 Speaker 1: now has now dropped off. He's basically around fourteen percent. 450 00:25:30,600 --> 00:25:33,679 Speaker 1: Progress has got something of a boost, she's at seventeen 451 00:25:33,760 --> 00:25:36,320 Speaker 1: and La penn is in second place. So Macron is 452 00:25:36,359 --> 00:25:41,160 Speaker 1: floating above all of this mess. Assuming or Macron does 453 00:25:41,200 --> 00:25:44,920 Speaker 1: not massively derail things, I suspect you know he will. 454 00:25:45,000 --> 00:25:48,760 Speaker 1: He will ultimately capture the Elize his His most competitive 455 00:25:48,800 --> 00:25:51,840 Speaker 1: contender would be Valerie Progress in the run off. If 456 00:25:51,880 --> 00:25:53,879 Speaker 1: she can get into the run off, she'll be dangerous 457 00:25:53,880 --> 00:25:58,840 Speaker 1: for him because she's competent, Centrists sensible on Europe. There's 458 00:25:58,880 --> 00:26:00,800 Speaker 1: a very large part of the left that feels they 459 00:26:00,840 --> 00:26:04,080 Speaker 1: put Macron into power. Now they feel completely disenfranchised because 460 00:26:04,080 --> 00:26:08,360 Speaker 1: he tapped to the right during his during his presidency, 461 00:26:08,640 --> 00:26:12,200 Speaker 1: her challenge will be getting into the runoff. So I think, look, 462 00:26:12,240 --> 00:26:14,720 Speaker 1: I think it should be good for Macron, assuming no 463 00:26:14,880 --> 00:26:19,439 Speaker 1: big surprises. Otherwise, I think progress is the one to 464 00:26:19,560 --> 00:26:21,520 Speaker 1: look for. The last thing I'll say on the pen, 465 00:26:21,600 --> 00:26:24,320 Speaker 1: I think this is her final moment. She's a proven 466 00:26:24,359 --> 00:26:27,440 Speaker 1: loser at every every every election she's runn she typically 467 00:26:27,440 --> 00:26:30,800 Speaker 1: performs worse than her pollings. I suspect next year Will 468 00:26:30,880 --> 00:26:33,239 Speaker 1: Will Will Will will be much the same, and at 469 00:26:33,280 --> 00:26:35,320 Speaker 1: some point the niece will then take over and there'll 470 00:26:35,359 --> 00:26:37,600 Speaker 1: be a bigger challenge for two thousand and twenty seven. 471 00:26:38,520 --> 00:26:40,480 Speaker 1: This is a family that just keeps on producing more 472 00:26:40,520 --> 00:26:44,200 Speaker 1: potential candidates for the for the far right. And you'll 473 00:26:44,200 --> 00:26:48,160 Speaker 1: correct me, but my memory is this time in the 474 00:26:48,200 --> 00:26:53,119 Speaker 1: residential cycle where Macron was elected. At this stage he 475 00:26:53,240 --> 00:26:55,479 Speaker 1: was nowhere as a candidate. I mean we should remember 476 00:26:55,520 --> 00:26:58,160 Speaker 1: he was an outsider. He had created his own political 477 00:26:58,240 --> 00:27:01,760 Speaker 1: movement in order to run and conversations we would have 478 00:27:01,800 --> 00:27:05,640 Speaker 1: had even sort of early in the year of the election. UM, 479 00:27:05,680 --> 00:27:08,600 Speaker 1: he would not have featured very prominently in UM. It 480 00:27:08,640 --> 00:27:11,600 Speaker 1: took a scandal, uh, and the for for one of 481 00:27:11,600 --> 00:27:14,320 Speaker 1: the other main candidates to put in more seriously in 482 00:27:14,359 --> 00:27:16,240 Speaker 1: the running. You know, is there any chance of that 483 00:27:16,359 --> 00:27:18,760 Speaker 1: it's just someone coming out of nowhere at this point, Well, 484 00:27:18,800 --> 00:27:21,520 Speaker 1: we've already had two surprises, Stephanie. I mean, Eric Zamore 485 00:27:21,600 --> 00:27:24,160 Speaker 1: was a surprise, and Valerie Progresses, the center right nominee, 486 00:27:24,200 --> 00:27:27,080 Speaker 1: was a surprise. We all expected Michelle Barnier. So I 487 00:27:27,160 --> 00:27:29,640 Speaker 1: absolutely expect there to be more surprised as I can't 488 00:27:29,640 --> 00:27:31,600 Speaker 1: say what they will be, but inherent I think in 489 00:27:31,640 --> 00:27:34,400 Speaker 1: the French race, because it's a two round runoff means 490 00:27:34,400 --> 00:27:36,760 Speaker 1: as you approached the first round on the tenth of April, 491 00:27:36,800 --> 00:27:39,080 Speaker 1: if there was a big terrorist attack some of the 492 00:27:39,160 --> 00:27:42,080 Speaker 1: bad news, that could completely derail Macron and then all 493 00:27:42,119 --> 00:27:44,000 Speaker 1: of a sudden you've got to run off with you know, 494 00:27:44,080 --> 00:27:46,440 Speaker 1: a candidate with lpennens and more or something else, which 495 00:27:46,480 --> 00:27:49,440 Speaker 1: I think would be quite dangerous with lots of downside risks. 496 00:27:49,480 --> 00:27:52,720 Speaker 1: So it's absolutely possible. So I guess that's that's one 497 00:27:52,760 --> 00:27:55,280 Speaker 1: tip for next year. If you're if you're someone who 498 00:27:55,400 --> 00:27:58,960 Speaker 1: loves the thrills and spills of an entertaining presidential election 499 00:27:59,000 --> 00:28:01,159 Speaker 1: and you're casting around for one to follow. France has 500 00:28:01,160 --> 00:28:04,480 Speaker 1: a proven track record of being entertaining, um and full 501 00:28:04,520 --> 00:28:08,480 Speaker 1: of surprises. As we speak, there has been no end 502 00:28:08,520 --> 00:28:12,640 Speaker 1: of scandals and bad news for Boris Johnson in the UK, 503 00:28:12,800 --> 00:28:14,840 Speaker 1: which we don't need to go into, but mainly involved 504 00:28:15,720 --> 00:28:18,760 Speaker 1: various leaks involving lots of parties that he had been 505 00:28:18,800 --> 00:28:21,400 Speaker 1: part of, all his staff have been part of when 506 00:28:21,440 --> 00:28:24,919 Speaker 1: everybody else was supposedly locked up at home due to COVID. 507 00:28:26,240 --> 00:28:28,000 Speaker 1: I guess I'll just ask you the straight question. There's 508 00:28:28,000 --> 00:28:30,960 Speaker 1: no election scheduled, but will Boris Johnson still be Prime 509 00:28:30,960 --> 00:28:33,080 Speaker 1: Minister of the UK in twelve months time? So it 510 00:28:33,160 --> 00:28:35,640 Speaker 1: was Stephanie where a Fort that he will be replaced 511 00:28:35,680 --> 00:28:38,320 Speaker 1: next year, and I'd say strong upward pressure on that number. 512 00:28:39,160 --> 00:28:41,240 Speaker 1: You know, I'll say to you that every single person 513 00:28:41,280 --> 00:28:44,960 Speaker 1: I'm talking to Westminster basically thinks it's the base case 514 00:28:45,000 --> 00:28:47,360 Speaker 1: that he will go next year. They think it's inevitable. 515 00:28:47,840 --> 00:28:50,560 Speaker 1: Now you know he's really in trouble, and you know 516 00:28:50,600 --> 00:28:52,800 Speaker 1: the Tory Party is not the labor party. If they 517 00:28:52,840 --> 00:28:55,920 Speaker 1: believe Johnson's an electoral liability, they will look to ditch him, 518 00:28:55,960 --> 00:28:59,800 Speaker 1: I think next year so that they're competitive for twenty four. 519 00:29:00,160 --> 00:29:03,080 Speaker 1: Everybody is looking at the at the swinging Shropshire North 520 00:29:03,440 --> 00:29:05,360 Speaker 1: where the Tories just lost a safe seat to the 521 00:29:05,360 --> 00:29:08,160 Speaker 1: Liberal Democrats and calculating what that would mean for their seats. 522 00:29:08,200 --> 00:29:10,760 Speaker 1: I think there's lots of concern about Johnson and what 523 00:29:10,840 --> 00:29:13,080 Speaker 1: are the opinion polls saying Labor has a nine point 524 00:29:13,560 --> 00:29:16,000 Speaker 1: lead now on average. I think in the last five 525 00:29:16,120 --> 00:29:18,840 Speaker 1: or ten surveys, you know, can the Tories close that 526 00:29:18,880 --> 00:29:20,360 Speaker 1: gap or his case star I'm going to keep a 527 00:29:20,400 --> 00:29:23,280 Speaker 1: steel on those numbers. If he does, I suspect that 528 00:29:23,360 --> 00:29:26,560 Speaker 1: again will promote more trouble for Johnson next year. The 529 00:29:26,600 --> 00:29:28,720 Speaker 1: one thing to look for will be the main local elections. 530 00:29:28,760 --> 00:29:32,800 Speaker 1: If the Tories performed badly in those local authority elections, 531 00:29:32,800 --> 00:29:34,800 Speaker 1: then I think there will be a move to probably 532 00:29:34,800 --> 00:29:37,120 Speaker 1: on seat him with a view to the third quarter 533 00:29:37,160 --> 00:29:40,680 Speaker 1: next year. So if you weren't paying attention to Shropshire North, 534 00:29:41,240 --> 00:29:44,320 Speaker 1: that's another election for you to to to pay attention to. 535 00:29:44,480 --> 00:29:51,840 Speaker 1: Thanks thanks mad Nancy. If we come back to the 536 00:29:51,920 --> 00:29:57,720 Speaker 1: us UM, the big political event there for two is 537 00:29:57,720 --> 00:30:00,280 Speaker 1: obviously going to be the mid terms. At the moment, 538 00:30:01,160 --> 00:30:05,560 Speaker 1: very low expectations in terms of the Democrat outcome. The 539 00:30:05,600 --> 00:30:11,720 Speaker 1: Democrat result in those elections is inflation does does does? 540 00:30:11,760 --> 00:30:15,320 Speaker 1: What happens to inflation between now and then? Is that 541 00:30:15,360 --> 00:30:17,880 Speaker 1: going to have a big impact on those results or 542 00:30:18,040 --> 00:30:20,120 Speaker 1: do you think it's it's already sort of toast for 543 00:30:20,160 --> 00:30:23,480 Speaker 1: the Democrats. I think that the Democrats, you know, historically 544 00:30:23,480 --> 00:30:26,160 Speaker 1: the party in power always loses seats in the mid terms, 545 00:30:26,280 --> 00:30:28,800 Speaker 1: and I think that people in the White House expect 546 00:30:28,840 --> 00:30:31,360 Speaker 1: that Democrats will lose seats. I think it's just a 547 00:30:31,400 --> 00:30:34,440 Speaker 1: matter of to what degree they lose seats. I think 548 00:30:34,480 --> 00:30:36,560 Speaker 1: the two key things that I'll be watching in the 549 00:30:36,600 --> 00:30:39,120 Speaker 1: mid terms are what is happening with COVID and what 550 00:30:39,320 --> 00:30:43,520 Speaker 1: is happening with the economy, particularly with inflation. Um you know, 551 00:30:43,560 --> 00:30:45,719 Speaker 1: I think people in the White House are hoping that 552 00:30:45,760 --> 00:30:49,400 Speaker 1: inflation eases by the summer, because that's when voters typically 553 00:30:49,440 --> 00:30:52,000 Speaker 1: make up their minds. But a lot of economists think 554 00:30:52,040 --> 00:30:55,360 Speaker 1: it will ease sometime in two but not necessarily by 555 00:30:55,400 --> 00:30:58,040 Speaker 1: the election, And so I think the timing of when 556 00:30:58,120 --> 00:31:01,080 Speaker 1: prices start to drop will be very key to Biden's 557 00:31:01,120 --> 00:31:04,000 Speaker 1: political future. And then of course just COVID, I mean, 558 00:31:04,480 --> 00:31:06,600 Speaker 1: are they able to get it under control? Is there 559 00:31:06,640 --> 00:31:09,560 Speaker 1: a new variant um, can they convince more people to 560 00:31:09,560 --> 00:31:13,320 Speaker 1: get vaccinated and boosted? Those are really the outstanding questions 561 00:31:13,320 --> 00:31:16,480 Speaker 1: that I think, will you know, determine that the contours 562 00:31:16,480 --> 00:31:19,280 Speaker 1: of the midterms and what happens with Democrats if they 563 00:31:19,280 --> 00:31:22,040 Speaker 1: lose both the House and Senate or just one um, 564 00:31:22,160 --> 00:31:24,200 Speaker 1: But I think people in the White House are bracing 565 00:31:24,240 --> 00:31:27,719 Speaker 1: for a big loss in and just quickly. I mean, 566 00:31:27,720 --> 00:31:30,520 Speaker 1: you spend your life working in the White House. I 567 00:31:30,520 --> 00:31:33,160 Speaker 1: mean a year ago, the staff is that you see 568 00:31:33,200 --> 00:31:36,520 Speaker 1: there would have been super excited and enthusiastic about getting 569 00:31:36,920 --> 00:31:39,960 Speaker 1: getting their hands back on the levers of power in 570 00:31:40,000 --> 00:31:42,200 Speaker 1: the US. You had a big State of the Union 571 00:31:42,240 --> 00:31:45,520 Speaker 1: addressed by President Biden that people got felt like was 572 00:31:45,520 --> 00:31:50,240 Speaker 1: a real sort of momentum. Are they all really depressed 573 00:31:50,240 --> 00:31:53,200 Speaker 1: now and they have their hands heads in their hands? 574 00:31:53,680 --> 00:31:55,600 Speaker 1: That's a great question. I think it has been a 575 00:31:55,720 --> 00:31:58,320 Speaker 1: very very rough stretch for them, and it started with 576 00:31:58,360 --> 00:32:02,120 Speaker 1: the withdrawal from Afghan to stand in August, which did 577 00:32:02,160 --> 00:32:04,719 Speaker 1: not go as they thought it would. It was you know, 578 00:32:05,320 --> 00:32:08,360 Speaker 1: very poor, and and the President was very upset about it. 579 00:32:08,400 --> 00:32:11,360 Speaker 1: His advisors were upset about it. They were blaming people. Um. 580 00:32:11,440 --> 00:32:13,680 Speaker 1: And then I think that inflation and how long it 581 00:32:13,680 --> 00:32:16,080 Speaker 1: has lasted has been a surprise to them. They were 582 00:32:16,080 --> 00:32:18,280 Speaker 1: wrong about the trajectory of that, and it has caught 583 00:32:18,320 --> 00:32:21,720 Speaker 1: the muff guard. And then COVID has just been a 584 00:32:21,800 --> 00:32:24,920 Speaker 1: real problem for them. They really claimed victory and July 585 00:32:25,080 --> 00:32:26,680 Speaker 1: fourth and said that there was going to be a 586 00:32:26,760 --> 00:32:29,040 Speaker 1: return to normalcy. That has not turned out to be 587 00:32:29,080 --> 00:32:32,240 Speaker 1: the case. And I feel like people there feel very 588 00:32:32,240 --> 00:32:35,680 Speaker 1: frustrated that, you know, their plans have gone a little 589 00:32:35,720 --> 00:32:38,480 Speaker 1: bit astray, partly you know, out of their own making, 590 00:32:38,520 --> 00:32:41,720 Speaker 1: like the Afghanistan withdrawal, But then other things are a 591 00:32:41,720 --> 00:32:43,880 Speaker 1: little bit out of their control, like a new variant 592 00:32:44,040 --> 00:32:47,520 Speaker 1: or Americans refusal to get vaccinated. Those are things that 593 00:32:47,560 --> 00:32:53,840 Speaker 1: they can't necessarily control, but yet will still be blamed for. Okay, well, 594 00:32:54,040 --> 00:32:56,760 Speaker 1: we had pretty much to the end. Uh tol M 595 00:32:56,760 --> 00:32:59,160 Speaker 1: actually started by reminding us of some of the stories 596 00:32:59,360 --> 00:33:03,760 Speaker 1: that called us by surprise in the last year or two. UM. 597 00:33:03,880 --> 00:33:06,479 Speaker 1: So I want to just end by asking all of 598 00:33:06,480 --> 00:33:09,160 Speaker 1: you briefly what you'll be looking out for in the 599 00:33:09,200 --> 00:33:11,120 Speaker 1: form of surprises. You know what, what would be the 600 00:33:11,160 --> 00:33:15,000 Speaker 1: wild card that you think, um, we should pay attention 601 00:33:15,080 --> 00:33:19,719 Speaker 1: to in twenty twenty two. Well, I think one thing 602 00:33:19,720 --> 00:33:22,160 Speaker 1: that's gonna be fascinating to watch play out next year 603 00:33:23,120 --> 00:33:25,960 Speaker 1: is the way that net zero is defined by big 604 00:33:26,000 --> 00:33:29,840 Speaker 1: banks and big financial firms. We saw four and fifty 605 00:33:29,920 --> 00:33:32,560 Speaker 1: financial firms worldwide, including all the biggest banks in the 606 00:33:32,720 --> 00:33:35,040 Speaker 1: US and Europe, sign up to a net zero plan 607 00:33:35,200 --> 00:33:36,920 Speaker 1: and the margins of COP that kind of on the 608 00:33:36,920 --> 00:33:40,120 Speaker 1: sidelines of COP, no one really knows what it means 609 00:33:40,160 --> 00:33:42,520 Speaker 1: to be a net zero bank at this point, and 610 00:33:42,760 --> 00:33:44,880 Speaker 1: that process of defining that is going to play out 611 00:33:44,960 --> 00:33:47,080 Speaker 1: over the upcoming months, and it will be fascinating to 612 00:33:47,120 --> 00:33:51,560 Speaker 1: see how a big bank like JP Morgan tries to um, 613 00:33:51,600 --> 00:33:54,200 Speaker 1: you know, shape those rules in terms of how we 614 00:33:54,320 --> 00:33:57,840 Speaker 1: define that and finance more broadly, As the sort of 615 00:33:58,040 --> 00:34:01,800 Speaker 1: options for big like government action under Biden are diminishing 616 00:34:02,080 --> 00:34:05,360 Speaker 1: the role of finance and business in the energy transition, 617 00:34:05,360 --> 00:34:07,320 Speaker 1: next year is just going to be enormous. So whether 618 00:34:07,360 --> 00:34:11,680 Speaker 1: that's watching venture capital spending on things like clean meat 619 00:34:11,760 --> 00:34:15,320 Speaker 1: or new materials, or um looking at the nascent market 620 00:34:15,360 --> 00:34:18,360 Speaker 1: for carbon removal and watching how venture money moves into that. 621 00:34:18,400 --> 00:34:19,719 Speaker 1: I think all of those things are going to be 622 00:34:19,760 --> 00:34:22,200 Speaker 1: really fascinating and I could wouldn't be a good climate 623 00:34:22,280 --> 00:34:24,839 Speaker 1: editor without mentioning the always wild card hanging over all 624 00:34:24,840 --> 00:34:27,680 Speaker 1: of this, which is, you know, the likelihood and chance 625 00:34:27,760 --> 00:34:31,520 Speaker 1: for extreme weather disasters fueled by climate change to really 626 00:34:31,880 --> 00:34:35,319 Speaker 1: affect the way, um this story unfolds in the year ahead. 627 00:34:35,320 --> 00:34:36,680 Speaker 1: I mean, that's a risk we're going to be living 628 00:34:36,719 --> 00:34:40,160 Speaker 1: with basically forever now, um. And there's all all manner 629 00:34:40,239 --> 00:34:42,480 Speaker 1: of risk on that front next year, and we should 630 00:34:42,520 --> 00:34:45,839 Speaker 1: say there was plenty of that in twenty one as well. 631 00:34:45,880 --> 00:34:49,719 Speaker 1: Thanks um mox Abo Roman, what's your wild card? We're 632 00:34:49,719 --> 00:34:52,759 Speaker 1: looking at the tensions between Eastern and Western Europe. I 633 00:34:52,760 --> 00:34:54,239 Speaker 1: think they could prove to be a very big deal 634 00:34:54,320 --> 00:34:57,120 Speaker 1: next year. Poland and Hungary and have not received money 635 00:34:57,160 --> 00:35:00,200 Speaker 1: from this Pandemic Recovery fund that was the style lisition 636 00:35:00,239 --> 00:35:03,080 Speaker 1: in December twenty to facilitate economic recovery on the back 637 00:35:03,120 --> 00:35:07,480 Speaker 1: of COVID because the institutions in Brussels, Germany other member 638 00:35:07,560 --> 00:35:10,319 Speaker 1: states want to bring them back into compliance with the 639 00:35:10,360 --> 00:35:13,360 Speaker 1: EUSE Treatise. There's a sense that the democratic backsliding that 640 00:35:13,400 --> 00:35:15,560 Speaker 1: we've seen in both those countries has gone too far, 641 00:35:16,040 --> 00:35:17,799 Speaker 1: and now is the moment to pull them back into 642 00:35:17,800 --> 00:35:20,960 Speaker 1: the quote unquote European fold. I think their their threat 643 00:35:21,000 --> 00:35:23,120 Speaker 1: effectively to the rest of Europe is give us our 644 00:35:23,120 --> 00:35:25,759 Speaker 1: money or will wreck your union. So does does the 645 00:35:25,760 --> 00:35:28,840 Speaker 1: European Union become ungovernable next year because of the vetos 646 00:35:28,920 --> 00:35:31,640 Speaker 1: that are being used by Poland and Hungary that prevent 647 00:35:31,719 --> 00:35:35,080 Speaker 1: progress on legislative and strategic and political goals. I think 648 00:35:35,080 --> 00:35:39,520 Speaker 1: that's a big risk and something certainly will be watching closely. Nancy. 649 00:35:39,560 --> 00:35:41,239 Speaker 1: I'm assuming on the base of what you said that 650 00:35:41,280 --> 00:35:47,319 Speaker 1: your wild card isn't a great stunning Democrat victory in elections. Yes, 651 00:35:47,400 --> 00:35:49,680 Speaker 1: it's not that. I In addition to inflation and what 652 00:35:49,719 --> 00:35:51,840 Speaker 1: happens with COVID, I would say the wild card that 653 00:35:51,880 --> 00:35:53,920 Speaker 1: we haven't talked about in the U s A is 654 00:35:53,960 --> 00:35:57,560 Speaker 1: the housing market. Um. The housing market has really taken off, 655 00:35:57,600 --> 00:36:00,600 Speaker 1: particularly for single family homes and so have been homes 656 00:36:00,640 --> 00:36:03,279 Speaker 1: as people were looking for more space and backyards in 657 00:36:03,320 --> 00:36:07,200 Speaker 1: the pandemic, and I think it's been very frothy. Prices 658 00:36:07,200 --> 00:36:09,920 Speaker 1: have risen quite a bit um and I think that 659 00:36:10,000 --> 00:36:12,439 Speaker 1: it's something that economists that I talked to, but also 660 00:36:12,480 --> 00:36:15,080 Speaker 1: White House officials are closely watching just to see if 661 00:36:15,120 --> 00:36:19,120 Speaker 1: this ends up being some sort of housing bubble. Tom Wolick, 662 00:36:19,480 --> 00:36:23,239 Speaker 1: your world card, um so so. Two years into the 663 00:36:23,280 --> 00:36:28,200 Speaker 1: pandemic stuff, I'm finding it increasingly difficult to separate my 664 00:36:28,640 --> 00:36:33,440 Speaker 1: entrenched pessimism from attempts at objective analysis. And I have 665 00:36:33,560 --> 00:36:36,800 Speaker 1: to say that the threat of extreme weather events, a 666 00:36:36,920 --> 00:36:39,960 Speaker 1: collapse of the European Union or bursting of the US 667 00:36:40,040 --> 00:36:43,239 Speaker 1: real estate bubble on on helping with that effort. But 668 00:36:44,560 --> 00:36:46,720 Speaker 1: let me let me add to the sort of sense 669 00:36:46,800 --> 00:36:51,600 Speaker 1: of despair by throwing out the possibility of a twilight 670 00:36:51,719 --> 00:36:56,920 Speaker 1: of the economic idols um so um across the world. 671 00:36:56,920 --> 00:36:59,880 Speaker 1: We've just just throwing that out throwing out there. Now 672 00:37:00,360 --> 00:37:02,640 Speaker 1: I'm gonna attempt to define it as well. Um So. 673 00:37:02,880 --> 00:37:05,480 Speaker 1: Around the world we've seen sort of this populous wave 674 00:37:05,640 --> 00:37:09,719 Speaker 1: sweep away all of the institutions, um But the institutions 675 00:37:09,760 --> 00:37:13,640 Speaker 1: that have remained standing have been the economic policy institutions. Right. 676 00:37:14,040 --> 00:37:16,359 Speaker 1: We can still count on the I, m F and 677 00:37:16,400 --> 00:37:20,800 Speaker 1: the FED and the other central banks for objective analysis 678 00:37:20,920 --> 00:37:25,719 Speaker 1: for policy decisions which are well intentioned and which are right. 679 00:37:25,800 --> 00:37:29,719 Speaker 1: More often than they're wrong. But in one we've seen 680 00:37:29,960 --> 00:37:33,400 Speaker 1: scandal after scandal. We've seen scandals at the I m 681 00:37:33,440 --> 00:37:36,480 Speaker 1: F and the World Bank. Accusations that the head of 682 00:37:36,520 --> 00:37:40,279 Speaker 1: the International Monetary Fund was cooking the books on the 683 00:37:40,360 --> 00:37:45,560 Speaker 1: Doing Business rankings to elevate China up the rankings. Allegations 684 00:37:45,600 --> 00:37:49,680 Speaker 1: about insider trading at the FED, members of the f 685 00:37:49,680 --> 00:37:53,120 Speaker 1: O m C actively trading in the markets which are 686 00:37:53,160 --> 00:37:57,600 Speaker 1: shaped so heavily by their interest rate decisions. So my 687 00:37:57,800 --> 00:38:00,960 Speaker 1: risk for two, and it really is a risk, not 688 00:38:01,040 --> 00:38:03,960 Speaker 1: a base case, is that we see a collapse of 689 00:38:04,040 --> 00:38:09,040 Speaker 1: confidence in the economic policy institutions, and of course coming 690 00:38:09,080 --> 00:38:13,920 Speaker 1: at a moment when inflation is high and inflation expectations arising. 691 00:38:14,600 --> 00:38:20,640 Speaker 1: If that collapsing confidence happens, it really couldn't be worse timed. Well. Typically, 692 00:38:20,719 --> 00:38:23,600 Speaker 1: Tom will like you've ended on this very magisterial note, 693 00:38:24,200 --> 00:38:26,360 Speaker 1: so I must immediately lower the tone and say my 694 00:38:26,440 --> 00:38:29,920 Speaker 1: personal wild card is much more prosaic. It's the English 695 00:38:29,920 --> 00:38:33,760 Speaker 1: football team is going to win the cat Art World Cup. Um, 696 00:38:33,800 --> 00:38:36,279 Speaker 1: and then all the people that have been complaining about 697 00:38:36,360 --> 00:38:39,040 Speaker 1: this is a horribly controversial World Cup, a completely the 698 00:38:39,040 --> 00:38:41,560 Speaker 1: wrong time in a country that doesn't play football. We 699 00:38:41,600 --> 00:38:44,600 Speaker 1: will all agree that it was a fantastic place to 700 00:38:44,640 --> 00:38:49,360 Speaker 1: hold the World Cup after all. Thanks to everyone who's 701 00:38:49,680 --> 00:38:54,279 Speaker 1: been on this panel, I hope you've enjoyed listening. We'll 702 00:38:54,320 --> 00:38:56,920 Speaker 1: be back next week with more on the ground insight 703 00:38:57,120 --> 00:39:00,160 Speaker 1: into the global economy, and in the meantime, you can 704 00:39:00,160 --> 00:39:03,200 Speaker 1: find us on the Bloomberg Terminal, website, app, or wherever 705 00:39:03,239 --> 00:39:06,040 Speaker 1: you get your podcasts. And for more news and analysis 706 00:39:06,040 --> 00:39:09,960 Speaker 1: from Bloomberg Economics, you should also follow at Economics on Twitter. 707 00:39:10,360 --> 00:39:13,719 Speaker 1: You can find me on at my Stephanomics. This episode 708 00:39:13,760 --> 00:39:16,440 Speaker 1: was produced by Mangus Hendrickson, with special thanks to my 709 00:39:16,480 --> 00:39:20,760 Speaker 1: panelist Muktaba Raman, Nancy Cook, Aaron Rutkoff, and Tom Marlick. 710 00:39:21,200 --> 00:39:24,000 Speaker 1: Mike Sasso is our executive producer and the head of 711 00:39:24,040 --> 00:39:27,879 Speaker 1: Bloomberg Podcast is Francesca Levi. A very happy New Year.