WEBVTT - The US Downs More Objects And Oil Retreats

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<v Speaker 1>This is Bloomberg Daybreak here for this Monday of February

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<v Speaker 1>in London. Coming up today, tensions ratchet higher, US fighters

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<v Speaker 1>shoot down a forth flying our object uprated. Economists believe

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<v Speaker 1>UK data will push the Bank of England towards for

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<v Speaker 1>the hikes bidding for investor confidence. The Daney Conglamorate cuts

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<v Speaker 1>its growth targets in her Goldman Chief on job cuts,

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<v Speaker 1>CEOs returned to China and a call for UK pension reform.

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<v Speaker 1>Those are the stories we're looking at in today's papers.

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<v Speaker 1>And I'm Leanne Gern's plus a crude instrument. Oil prices

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<v Speaker 1>retreat as slowdown concerns vy with Russian supply cuts. That's

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<v Speaker 1>all straight ahead on Bloomberg Daybreak Europe. The business news

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<v Speaker 1>you need to start your day in just one fifteen

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<v Speaker 1>minute podcast on Apple, Spotify, the Bloomberg Business App and

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<v Speaker 1>everywhere you get your podcasts. Good morning, I'm Stephen Carroll

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<v Speaker 1>and I'm Caroline Heck. Here all the stories that we're

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<v Speaker 1>following today. Three objects have been shot down over North

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<v Speaker 1>American airspace, and as many days in the wake of

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<v Speaker 1>the downing of an alleged Chinese spy balloon over US territory.

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<v Speaker 1>American aircraft shot down the latest object above like uron

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<v Speaker 1>in Michigan on Sunday night. US Assistant Secretary of Defense

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<v Speaker 1>Melissa Dalton says it's not yet clear what the latest

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<v Speaker 1>objects are. We have been more closely scrutinizing our airspace

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<v Speaker 1>at these altitudes, including enhancing our radar, which may at

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<v Speaker 1>least poorly explain the increase in objects that we've detected

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<v Speaker 1>over the past week. One thing Dalton's department are clear

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<v Speaker 1>on the first balloon spot It was a Chinese spy device,

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<v Speaker 1>provoking a new round of tensions with baiging the incidents

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<v Speaker 1>shining a spotlight on China's surveillance programs. Now Here in

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<v Speaker 1>the UK, wage and inflation data are set to fuel

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<v Speaker 1>further Bank of England rate rises. Bloom Begs You and

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<v Speaker 1>Pots report it's a key week for data on the

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<v Speaker 1>UK economy. Two separate reports are expected to highlight the

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<v Speaker 1>consumer prices are still rising at a double digit pace

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<v Speaker 1>and the companies are increasing pay at the quickest pace

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<v Speaker 1>on records. The data will likely support hawkish policymakers at

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<v Speaker 1>the Bank of England who want to keep their foot

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<v Speaker 1>on the monetary break Elsewhere, Two separate surveys out today

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<v Speaker 1>suggest businesses plan to cut hiring as the economic outlook darkens,

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<v Speaker 1>but staff shortages mean they will pay record rates for

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<v Speaker 1>the staff that they do need. The Chartered Institutes of

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<v Speaker 1>Personnel and Development says that planned pay rises are running

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<v Speaker 1>at the highest since the data started ten years ago.

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<v Speaker 1>Video's Business Trends survey reports that output fell for a

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<v Speaker 1>second month, reaching levels associated with a shrinking economy. In London,

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<v Speaker 1>immun Parts bloom Berg Daybreak Europe gave with Don's Conglomerates,

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<v Speaker 1>has had its revenue growth targets and plans to hold

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<v Speaker 1>off fresh capital expenditure. Bloomberg's Anabel Drulers says the group

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<v Speaker 1>will now aim to grow by up to twenty for

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<v Speaker 1>the next fun Until year earlier assumption had been for

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<v Speaker 1>revenue growth of capital expenditure. That's also saying is going

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<v Speaker 1>to be scaled down now. So the priority is really

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<v Speaker 1>just focusing on conserving cash or paying debt and also

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<v Speaker 1>retrieving those pledge shares. Because even though Adning Group has

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<v Speaker 1>denied those allegations in the Hindenburg research report, we still

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<v Speaker 1>had that huge market reaction in turn, and the losses

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<v Speaker 1>here north of a hundred billion dollars still off market

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<v Speaker 1>cap raised. Annabel Drulia says the retreat as the marked

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<v Speaker 1>turnaround for the tycoon and reflects the significant impact that

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<v Speaker 1>Hindenburg researchers report has had on the conglomorous. Now, the

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<v Speaker 1>death toll across Syria and Turkey has risen to thirty

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<v Speaker 1>five thousand people, with many more still unaccounted for. The

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<v Speaker 1>head of the World Health Organization ted ross Adnam Gabrieus's

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<v Speaker 1>has visited Syria's capital, Damascus and issued this appeal. We

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<v Speaker 1>need to take response to the next level to reach

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<v Speaker 1>both I thinks populations in areas. Dr ted Draw spoke

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<v Speaker 1>about the disaster as Turkish authorities have stepped up their

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<v Speaker 1>investigation into the impact of potentially shod deconstruction work. A

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<v Speaker 1>hundred and thirty four contractors have been investigated and at

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<v Speaker 1>least three people have been arrested so far. A Turkish

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<v Speaker 1>business group says that the economic losses from the quake

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<v Speaker 1>could top eighty four billion dollars. Oil prices have retreated

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<v Speaker 1>as concerns about slowing growth continue to offset Russia's plan

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<v Speaker 1>to cut supply. Investors remain wary that the federal reserve

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<v Speaker 1>needs to keep pushing interest rates higher detained inflation. That's

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<v Speaker 1>in spite of OPEC plus confirming that it won't boost

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<v Speaker 1>production to fill in the outbook gap left by Moscow.

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<v Speaker 1>Our top stories this morning, Yeah, absolutely, look more on

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<v Speaker 1>the story around those floating objects not really even sure

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<v Speaker 1>whether they're flying objects actually, and it follows, of course,

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<v Speaker 1>the very first spy balloon that was shot down by

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<v Speaker 1>the u US, alleged Chinese spy balloon. These objects, of course,

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<v Speaker 1>have got a lot of attention because I've been shut

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<v Speaker 1>down on a series of days over the weekend the

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<v Speaker 1>US though, and I find this perhaps extraordinary, should I?

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<v Speaker 1>The U S is not ruled out that these objects

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<v Speaker 1>that have been shot down over North America were aliens

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<v Speaker 1>or extraterrestrials. Admiss good. Yes, it's nice to start the

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<v Speaker 1>week with something like that, isn't well. Look, the question

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<v Speaker 1>was put to the General and he basically said, I'm

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<v Speaker 1>not ruling it out, So it's it's not as if

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<v Speaker 1>he used those terms. It was a reporter asking the questions,

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<v Speaker 1>but you know, keeping an open mind was their view. Indeed,

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<v Speaker 1>And sure, why not? I have to say my eye

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<v Speaker 1>was cut by this piece by rocolleagu Philipaldric about as

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<v Speaker 1>he calls it, the UK seventeen billion pound bank of

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<v Speaker 1>Mom and Dad, which is, you know, a kind of

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<v Speaker 1>flippant way to talk about something that is very serious

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<v Speaker 1>in terms of the inequality of how wealth is being

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<v Speaker 1>transmitted between parents and children. When people are helping out

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<v Speaker 1>there it's buying houses or the southeast of England. I mean,

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<v Speaker 1>you know, you just fall over people who have needed

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<v Speaker 1>the help of the older generation to get on the

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<v Speaker 1>property market. Only a you know, swift look at the

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<v Speaker 1>property prices as shows you that. But I thought it

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<v Speaker 1>was very interesting that Philip Aldrick crunched the numbers reported

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<v Speaker 1>on the i f S that was looking at this

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<v Speaker 1>twenty grand is apparently the kind of average that's going

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<v Speaker 1>from parents to adults kids. Let's not go there, No,

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<v Speaker 1>But the other thing is it's inequality. But it's also

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<v Speaker 1>that it's um that it's white kids that are much

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<v Speaker 1>more likely to get this money. You know, children from

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<v Speaker 1>other ethnic backgrounds are far far less likely to get

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<v Speaker 1>that kind of financial help. Very important when we talk

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<v Speaker 1>about inequality in Britain. Yeah, white young adults more than

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<v Speaker 1>twice as likely to receive a gift than a black

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<v Speaker 1>adults and three times more likely than a Pakistani or Bangladeshia.

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<v Speaker 1>That's according to the last figures from the Institute for

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<v Speaker 1>Fiscal Studies. Okay, up next, we will have the Goldman

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<v Speaker 1>chief on job cut CEO returning to China and a

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<v Speaker 1>call for UK pension reform. Now the paper Review on

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<v Speaker 1>Bluebirddaybreak Europe, the news you need to know from today's

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<v Speaker 1>papers and basic. Leanne Gans is with us this morning

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<v Speaker 1>to discuss the headline in the Financial Times. Leanne says

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<v Speaker 1>Golden Sacks chief tells partners he should have cut jobs earlier. Yes, indeed, Caroline,

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<v Speaker 1>good morning to you so, but of a revelation today

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<v Speaker 1>in the FT. Now, speaking to about four hundred Goldman

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<v Speaker 1>executives at a closed door meeting over in Miami, David

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<v Speaker 1>Solomon said he had made this big mistake by not

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<v Speaker 1>cutting jobs in twenty twenty two. The chief executive actually

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<v Speaker 1>took full responsibility for being slow to reduce headcount and

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<v Speaker 1>also investment, and he says this was when it became

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<v Speaker 1>clear a significant business slowdown was going to happen or

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<v Speaker 1>would happen. According to the FT, Goldman waited until January.

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<v Speaker 1>We obviously found that out last month to cut three thousand,

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<v Speaker 1>two hundred jobs, but it would have not been so

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<v Speaker 1>aggressive if action was taken earlier. According to the newspaper, Now,

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<v Speaker 1>Goldman's net profits in two thousand and twenty two fell

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<v Speaker 1>almost fifty percent from record earnings in one Now this

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<v Speaker 1>was due to lower investment banking fees, markdown at its

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<v Speaker 1>asset management business, and also losses in its financial tech division,

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<v Speaker 1>So a whole host of problems there. And Solomon also

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<v Speaker 1>told partners that the number of leaks to the media

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<v Speaker 1>was actually also damaging to the bank, so somewhat taking

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<v Speaker 1>some responsibility for not reducing headcounts sooner, but also saying,

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<v Speaker 1>you know, the media did play a part in damaging

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<v Speaker 1>the reputation. Okay in the Wall Street journally and the

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<v Speaker 1>headline app from Apple t vw CEO is gradually returning

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<v Speaker 1>to China after it's reopening. Yes, indeed, Stephen, good morning

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<v Speaker 1>to you. So top executives from these big multinational companies

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<v Speaker 1>are now returning to China, and this is as the

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<v Speaker 1>country emerges from COVID zero and says it's open for

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<v Speaker 1>business as its economy struggles. We know it's almost been

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<v Speaker 1>three years that China has been pretty much closed, and

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<v Speaker 1>this move comes despite tensions following the appearance of the

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<v Speaker 1>suspected Chinese surveillance balloon over America. And as you and

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<v Speaker 1>Caroline were just discussing in the top stories there, we

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<v Speaker 1>also know that other incidences have happened since that one,

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<v Speaker 1>and the first visit, according to the Wall Street Journal,

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<v Speaker 1>was from the Volkswagen chief executive and the Apple CEO,

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<v Speaker 1>Tim Cook and fights the CEO are also expected to

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<v Speaker 1>visit China next month, and then the Mercedes Bends group

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<v Speaker 1>chairman it's also planning on going over. So lots of

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<v Speaker 1>them heading over to China now that things are starting

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<v Speaker 1>to open. But despite these bilateral tensions, US commerce with

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<v Speaker 1>China has actually been on the rise, and policy and

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<v Speaker 1>business experts said major trade and investment ties do tend

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<v Speaker 1>to with stand political ups and downs. So that's why

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<v Speaker 1>all of these big executives are heading over really to

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<v Speaker 1>China as things they do ea slightly must be two

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<v Speaker 1>or three years right that those exects have not been

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<v Speaker 1>over to China obviously because the plandemic. Anyway, last story,

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<v Speaker 1>this is also quite interesting because we're talking about inequality.

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<v Speaker 1>This is another thread of that story. The Times has

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<v Speaker 1>an opinion piece about the changes to taxing pensions needing

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<v Speaker 1>to be sensitive, but that they should happen. So what's

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<v Speaker 1>this piece in the Time? Yes, indeed so Paul Johnson.

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<v Speaker 1>He's the director of the Institute for Fiscal Studies and

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<v Speaker 1>says private pensance are the biggest component of household wealth

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<v Speaker 1>here in the UK. Now that's even more than your

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<v Speaker 1>own homes. And writing The Times, he makes the point

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<v Speaker 1>that they need to be taxed appropriately, but that any

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<v Speaker 1>change has been met with a wall of harsh criticism.

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<v Speaker 1>He says that means we bake in injustice forever. So

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<v Speaker 1>pretty cash words their record, really, and he gives this

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<v Speaker 1>number of examples Caroline of why the system is unfairly

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<v Speaker 1>generous to the wealthiest and the oldest. He says that

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<v Speaker 1>favors those with big employee contributions and it can be

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<v Speaker 1>an effective vehicle for avoiding inheritance tax too. And Johnson

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<v Speaker 1>says the tax systems for pension is costly, unfair, complex,

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<v Speaker 1>and he also calls it an unholy mess, and he

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<v Speaker 1>says changes need to be both careful and gradual. Yeah,

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<v Speaker 1>I think it's so interesting because Obviously, Johnson is well

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<v Speaker 1>known for kind of making this sort of statement that

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<v Speaker 1>around inequality, but that he's picking up on the pushback

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<v Speaker 1>against any changes the pension reform, and he's saying, look,

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<v Speaker 1>you can't kind of protect the older generation forever because

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<v Speaker 1>it is at the expense of younger people. I thought

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<v Speaker 1>it was a very interesting piece thing, yes, saying that

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<v Speaker 1>the younger generation has to come up with the cash, right, Okay,

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<v Speaker 1>and thank you very much that review of the newspapers

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<v Speaker 1>this morning. Now, the US has down three objects in

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<v Speaker 1>the air of a North America in the past three days.

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<v Speaker 1>Another was reportedly spotted over a Chinese ports city. The

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<v Speaker 1>unidentified aerial phenomena have heightened US China tensions off The

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<v Speaker 1>Biden administration dubbed the first a spy balloon and sanctioned

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<v Speaker 1>several Chinese aviation companies. For more on the story, we're

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<v Speaker 1>joined at by Bloomberg Senior editor Bill Ferries. Bill, good

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<v Speaker 1>morning to you. And what do we know then about

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<v Speaker 1>these latest objects that have been downed over over North

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<v Speaker 1>American airspace? We actually know very little at this point.

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<v Speaker 1>We don't know the US isn't really describing them in

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<v Speaker 1>great detail. Uh, And they're certainly not saying where they

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<v Speaker 1>think they came from. One thing they do seem to

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<v Speaker 1>be admitting or saying is that they are reviewing airspace

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<v Speaker 1>more carefully and they're noticing things that may have perhaps

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<v Speaker 1>slipped by them in the past. But in terms of

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<v Speaker 1>whether these are similar to that first balloon that was

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<v Speaker 1>shot down off the coast of South Carolina, we're not

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<v Speaker 1>getting enough information to be able to say that at all.

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<v Speaker 1>We don't know that they're even military or spycraft of

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<v Speaker 1>any kind at this point. Okay, the US has blacklisted

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<v Speaker 1>the entity is involved though in the first balloon. What

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<v Speaker 1>has been China's response, Well, China, You know, China's response

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<v Speaker 1>has been all over If you go back to the

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<v Speaker 1>early days where they just said this was this was

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<v Speaker 1>a weather a climate research balloon that that got a

0:13:21.480 --> 0:13:25.160
<v Speaker 1>little bit off track and the winds uh to turning

0:13:25.160 --> 0:13:27.520
<v Speaker 1>around and saying that the US response has been kind

0:13:27.520 --> 0:13:29.839
<v Speaker 1>of over the top, and as in the US is

0:13:29.920 --> 0:13:33.720
<v Speaker 1>hyping the incident, China is now saying, um, they will

0:13:33.840 --> 0:13:38.479
<v Speaker 1>respond militarily if they see any incursions in their airspace,

0:13:38.600 --> 0:13:41.360
<v Speaker 1>and they've at least a local paper in Northeast China

0:13:41.400 --> 0:13:44.839
<v Speaker 1>has now identified some sort of balloon or object it

0:13:44.920 --> 0:13:47.480
<v Speaker 1>says is off the off the coast of ching Dao

0:13:48.040 --> 0:13:50.760
<v Speaker 1>and uh and that it may have to scramble its

0:13:50.800 --> 0:13:53.120
<v Speaker 1>military to take care of it. We don't know what

0:13:53.160 --> 0:13:56.280
<v Speaker 1>that object is the government Chinese government so far hasn't

0:13:56.679 --> 0:13:59.720
<v Speaker 1>said much to confirm that report. Uh, And we certainly

0:13:59.720 --> 0:14:02.840
<v Speaker 1>don't know if it would be a US US balloon,

0:14:03.000 --> 0:14:07.840
<v Speaker 1>Japanese balloon, or something entirely different. Belly. You alluded to

0:14:07.840 --> 0:14:10.920
<v Speaker 1>this already, but it does seem like they're not Billions

0:14:10.920 --> 0:14:13.280
<v Speaker 1>are not uncommon historically, but it seems like we're hearing

0:14:13.280 --> 0:14:16.000
<v Speaker 1>it off a lot more about them. Now. What is

0:14:16.040 --> 0:14:18.400
<v Speaker 1>contributing to that? And and I sup was what what

0:14:18.559 --> 0:14:20.680
<v Speaker 1>can we deduce from the fact that we're talking a

0:14:20.720 --> 0:14:23.560
<v Speaker 1>lot more about spotting them now we've learned, We've all

0:14:23.640 --> 0:14:25.600
<v Speaker 1>learned a tremendous amount in the last week or two.

0:14:25.680 --> 0:14:28.440
<v Speaker 1>I think about these, Yes, I think. I think. On

0:14:28.480 --> 0:14:30.640
<v Speaker 1>the one hand, yes, it's true, there are there are

0:14:30.680 --> 0:14:35.320
<v Speaker 1>things floating up there that maybe the militaries and all

0:14:35.320 --> 0:14:38.320
<v Speaker 1>these countries weren't paying that much intention to. We do know,

0:14:38.400 --> 0:14:42.360
<v Speaker 1>you know, universities, NGO's research groups, they do all kinds

0:14:42.400 --> 0:14:45.480
<v Speaker 1>of all kinds of studies of the upper atmosphere, and

0:14:45.560 --> 0:14:49.920
<v Speaker 1>they launch balloons and related uh things like drones h

0:14:50.840 --> 0:14:53.360
<v Speaker 1>to study this all the time. UM, so we don't

0:14:53.400 --> 0:14:56.160
<v Speaker 1>know if we're just noticing something in a level of

0:14:56.160 --> 0:14:59.960
<v Speaker 1>the airspace that wasn't getting paid much attention to before,

0:15:00.240 --> 0:15:02.200
<v Speaker 1>what it means. I think the bigger picture is it

0:15:02.320 --> 0:15:05.160
<v Speaker 1>just shows with the US and China how fragile this

0:15:05.280 --> 0:15:09.360
<v Speaker 1>relationship is. A Secretary Blanken canceled his trip to Beijing,

0:15:09.400 --> 0:15:11.720
<v Speaker 1>and I think both sides had looked at that as

0:15:11.760 --> 0:15:16.240
<v Speaker 1>an opportunity to maybe restart relations that have been frosty

0:15:16.800 --> 0:15:20.640
<v Speaker 1>going back into the Trump administration that was easily put

0:15:20.680 --> 0:15:22.480
<v Speaker 1>off and uh, and we don't know when that's going

0:15:22.520 --> 0:15:25.720
<v Speaker 1>to restart. And I think um politicians on both sides

0:15:25.760 --> 0:15:29.320
<v Speaker 1>are are kind of taking advantage of this situation, uh

0:15:29.320 --> 0:15:32.440
<v Speaker 1>to sort of hammer the hammer China from the U

0:15:32.480 --> 0:15:34.480
<v Speaker 1>s side and hammer the US from the Chinese side.

0:15:36.960 --> 0:15:39.640
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