1
00:00:03,440 --> 00:00:06,840
Speaker 1: Global business news twenty four hours a day, if Bloomberg

2
00:00:06,880 --> 00:00:09,960
Speaker 1: dot com, the Radio plus mobile app and on your radio.

3
00:00:10,240 --> 00:00:14,400
Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.

4
00:00:14,400 --> 00:00:17,560
Speaker 1: I'm Charlie Pelot. Stocks for Laurel little changed. This update

5
00:00:17,600 --> 00:00:21,160
Speaker 1: brought to you by National Realty Providers of one percent

6
00:00:21,320 --> 00:00:25,320
Speaker 1: satisfaction guaranteed New York City Realty investments. See them at

7
00:00:25,480 --> 00:00:27,960
Speaker 1: n r i A dot net. Now let's head right

8
00:00:27,960 --> 00:00:30,680
Speaker 1: over to the first Word Breaking news desk for today's

9
00:00:30,720 --> 00:00:35,199
Speaker 1: afternoon call, and here's Bill Maloney. Good afternoon, Charlie. Manus

10
00:00:35,240 --> 00:00:37,919
Speaker 1: averages are quiet today, with the Dow currently lower by

11
00:00:37,960 --> 00:00:41,640
Speaker 1: eighteen points, SEPs are little changed and NAZAC is higher

12
00:00:41,720 --> 00:00:44,320
Speaker 1: by seven. The small cap six hundred is also a

13
00:00:44,360 --> 00:00:47,120
Speaker 1: little changed, and the US ten nield at one point

14
00:00:47,120 --> 00:00:50,480
Speaker 1: five zero percent. Seven out of tennis B sectors are lower,

15
00:00:50,560 --> 00:00:53,960
Speaker 1: led by lasses and energy, financials and the utilities, while

16
00:00:54,000 --> 00:00:58,280
Speaker 1: technology and materials led to the upside down. Transports rise

17
00:00:58,360 --> 00:01:00,720
Speaker 1: ten points and as a by text fall all fifteen

18
00:01:01,120 --> 00:01:04,160
Speaker 1: utilities drop three and the VIX is down by three

19
00:01:04,160 --> 00:01:07,720
Speaker 1: point four percent. Down Leaders to the downside included Disney

20
00:01:07,760 --> 00:01:12,080
Speaker 1: Home Depot and Boeing leaders included Intel, Visa, and Microsoft.

21
00:01:12,400 --> 00:01:15,160
Speaker 1: See if industry is pledged as much as fifteen percent,

22
00:01:15,480 --> 00:01:18,399
Speaker 1: that's Motion's two thousand and eight after earnings. First Solar

23
00:01:18,440 --> 00:01:23,440
Speaker 1: fell well. Harmon gained seven percent after its results, and

24
00:01:23,480 --> 00:01:25,400
Speaker 1: some of the names pointing after the belt tonight include

25
00:01:25,400 --> 00:01:29,640
Speaker 1: Monster Beverage, Geno Therapeutics, Kraft, Heinns, and Price Line. Live

26
00:01:29,680 --> 00:01:31,800
Speaker 1: from the first breaking news ask on Bill Maloney, Charlie

27
00:01:31,920 --> 00:01:33,680
Speaker 1: all right, thank you very much, Bill Maloney, and to

28
00:01:33,760 --> 00:01:37,200
Speaker 1: hear live breaking news over your Bloomberg Time squawk SQ

29
00:01:37,480 --> 00:01:41,360
Speaker 1: you a w K on your terminal. I'm Charlie Pellock.

30
00:01:41,480 --> 00:01:46,160
Speaker 1: That's the Bloomberg business flash. This is taking stock. The

31
00:01:46,319 --> 00:01:51,160
Speaker 1: Fed in focus on Bloomberg Radio Central Banks in focus.

32
00:01:51,160 --> 00:01:54,680
Speaker 1: As we turned to the Bank of England's Hill Mary

33
00:01:54,760 --> 00:01:58,880
Speaker 1: policy passes. Our Bloomberg intelligence in team in London puts

34
00:01:58,920 --> 00:02:03,240
Speaker 1: it a three wronged easing of monetary conditions. Will it

35
00:02:03,280 --> 00:02:07,000
Speaker 1: be enough? Our NEXCU says, depending on what happens with inflation,

36
00:02:07,120 --> 00:02:09,480
Speaker 1: Could it be a little bit too much? It's certainly

37
00:02:09,560 --> 00:02:14,520
Speaker 1: hit the pound hard today. Joining us now is Carl Weinberg.

38
00:02:14,880 --> 00:02:18,880
Speaker 1: He is chief economist Managing director for High Frequency Economics

39
00:02:18,919 --> 00:02:21,480
Speaker 1: So Carl, Now that you've had a little more chance

40
00:02:21,560 --> 00:02:24,200
Speaker 1: to read through everything that the Bank of England said

41
00:02:24,240 --> 00:02:27,520
Speaker 1: its statement, listen to Mark Karney, Uh, think about it.

42
00:02:28,120 --> 00:02:30,079
Speaker 1: How big, how important is this move by the Bank

43
00:02:30,080 --> 00:02:33,400
Speaker 1: of England today. Well, it's a really substantial program, There's

44
00:02:33,400 --> 00:02:36,320
Speaker 1: no doubt about that. So he very clearly saw them

45
00:02:36,800 --> 00:02:40,959
Speaker 1: cut down the cost of borrowing, both directly and indirectly

46
00:02:41,000 --> 00:02:43,920
Speaker 1: by lowering their bank rate, by setting up a program

47
00:02:43,960 --> 00:02:47,680
Speaker 1: to channel funds at the lowest possible cost into banks.

48
00:02:48,000 --> 00:02:50,280
Speaker 1: To make sure that those lower interest rates passed through

49
00:02:50,360 --> 00:02:54,760
Speaker 1: the economy, we saw purchases of corporate bonds and government

50
00:02:54,800 --> 00:02:58,000
Speaker 1: bonds announced. It just doesn't get any more comprehensive than this.

51
00:02:58,480 --> 00:03:00,960
Speaker 1: If they wanted to hit the we're hit the nail

52
00:03:00,960 --> 00:03:03,440
Speaker 1: on the head with a hammer. They certainly hit it hard.

53
00:03:03,600 --> 00:03:05,760
Speaker 1: Did they hit it with a sledgehammer? Does this stuff

54
00:03:05,800 --> 00:03:08,400
Speaker 1: actually work? Or does it just create problems that they

55
00:03:08,440 --> 00:03:11,000
Speaker 1: can't solve that are even bigger down the road? I

56
00:03:11,160 --> 00:03:13,560
Speaker 1: pim Well, you know that's the big question, you know,

57
00:03:13,720 --> 00:03:15,600
Speaker 1: down the road. How do we unwind all of this?

58
00:03:15,760 --> 00:03:19,200
Speaker 1: That's always the question. But that's not the question for today,

59
00:03:19,600 --> 00:03:21,960
Speaker 1: and it's not the question for the next period of time.

60
00:03:22,280 --> 00:03:24,880
Speaker 1: When I first read the program this morning, I thought

61
00:03:24,919 --> 00:03:27,720
Speaker 1: maybe they had been a little bit too aggressive in

62
00:03:27,800 --> 00:03:30,960
Speaker 1: their forecast of marking down their economic growth prospects and

63
00:03:30,960 --> 00:03:33,640
Speaker 1: their inflation forecast. I thought, you know, they could have

64
00:03:33,680 --> 00:03:36,320
Speaker 1: been a little bit more conservative about that. But then

65
00:03:36,400 --> 00:03:38,440
Speaker 1: during the course of the day I've reflected on a

66
00:03:38,440 --> 00:03:40,560
Speaker 1: little bit, and I think that maybe this is where

67
00:03:40,600 --> 00:03:43,680
Speaker 1: they want to be. They would rather hit it too

68
00:03:43,760 --> 00:03:46,840
Speaker 1: hard and then be able to come back, then not

69
00:03:46,960 --> 00:03:49,800
Speaker 1: hit it enough and to be seen chasing after an

70
00:03:49,840 --> 00:03:53,600
Speaker 1: ever receding target. So I think that they've hit it

71
00:03:54,120 --> 00:03:58,000
Speaker 1: overly hard, probably on purpose, and warned us that you know,

72
00:03:58,040 --> 00:04:00,960
Speaker 1: there's more to come if necessary, but unspoken as the

73
00:04:00,960 --> 00:04:03,240
Speaker 1: fact that if it's not necessary, it doesn't have to

74
00:04:03,280 --> 00:04:07,240
Speaker 1: get any bigger than this. Well, Carl, and I guess

75
00:04:07,240 --> 00:04:09,920
Speaker 1: that's one of one of the analysies I've read, uh

76
00:04:10,320 --> 00:04:13,360
Speaker 1: following the and of course there's lots right everyone's trying

77
00:04:13,360 --> 00:04:16,440
Speaker 1: to figure this out, is that that maybe the view

78
00:04:16,480 --> 00:04:20,080
Speaker 1: of the economy the Bank oftving express today lowered it

79
00:04:20,160 --> 00:04:23,040
Speaker 1: by a good margin but it never turns negative, was

80
00:04:23,120 --> 00:04:25,520
Speaker 1: too optimistic, which is one reason they'd have to maybe

81
00:04:25,520 --> 00:04:30,560
Speaker 1: cut more in November. But is Mark Kearney's marketing his

82
00:04:30,680 --> 00:04:33,520
Speaker 1: team figuring that if we are aggressive now and we

83
00:04:33,600 --> 00:04:37,800
Speaker 1: take all these steps, we can avoid that deep of

84
00:04:37,800 --> 00:04:39,920
Speaker 1: a slump in the UK economy. Is that why they

85
00:04:39,960 --> 00:04:43,080
Speaker 1: didn't downgrade their forecast of the economy even further. Well,

86
00:04:43,120 --> 00:04:45,760
Speaker 1: you know, Kathleen, I'm going to answer your question with

87
00:04:45,839 --> 00:04:48,400
Speaker 1: a question, and that question is who knows? All right?

88
00:04:48,480 --> 00:04:51,200
Speaker 1: We are in uncharted territory as far as the UK

89
00:04:51,279 --> 00:04:54,920
Speaker 1: economy is concerned. We don't have a recent historical precedent

90
00:04:55,000 --> 00:04:57,040
Speaker 1: to look back on and say, the last time a

91
00:04:57,080 --> 00:04:59,800
Speaker 1: country west the European Union, this is what happened. You know.

92
00:04:59,839 --> 00:05:01,479
Speaker 1: We don't know what the new terms of business are

93
00:05:01,520 --> 00:05:04,080
Speaker 1: going to be. We don't know anything about how the

94
00:05:04,160 --> 00:05:06,440
Speaker 1: UK economy is going to look two years from now,

95
00:05:06,480 --> 00:05:09,039
Speaker 1: except that it's going to be different. So the Bank

96
00:05:09,080 --> 00:05:12,000
Speaker 1: has staked itself out as being a bearer on the subject,

97
00:05:12,200 --> 00:05:15,039
Speaker 1: and this of course was very controversial during the campaign.

98
00:05:15,279 --> 00:05:18,120
Speaker 1: The Governor was accused of being prejudiced towards the Stay

99
00:05:18,200 --> 00:05:21,120
Speaker 1: side and he had to send himself in Parliament on this.

100
00:05:21,480 --> 00:05:23,760
Speaker 1: But he is very clearly on the view that this

101
00:05:23,880 --> 00:05:26,360
Speaker 1: is a hard hit to the economy, that the risks

102
00:05:26,440 --> 00:05:29,880
Speaker 1: are huge, and he's prepared to forecast that those risks

103
00:05:29,920 --> 00:05:33,320
Speaker 1: turned into realities, and that's what we saw today. So

104
00:05:33,440 --> 00:05:35,960
Speaker 1: this is this is where they are, and they could

105
00:05:36,040 --> 00:05:38,920
Speaker 1: very well be right. And I just don't know enough.

106
00:05:38,960 --> 00:05:41,600
Speaker 1: I'm not smart enough to figure out in this uncertain

107
00:05:41,600 --> 00:05:44,200
Speaker 1: circumstance whether I think they're right or right. I'm just

108
00:05:44,279 --> 00:05:46,880
Speaker 1: along for the ride at this point, Carl, I just

109
00:05:46,880 --> 00:05:48,680
Speaker 1: want to push a little bit on being along for

110
00:05:48,760 --> 00:05:51,720
Speaker 1: this ride. I mean, as we're talking about parallel economies,

111
00:05:51,760 --> 00:05:54,880
Speaker 1: because when you talk about low interest rates and bond buying,

112
00:05:55,160 --> 00:05:59,919
Speaker 1: that's the financial economy. Revolving credit rates, they remain high.

113
00:06:00,320 --> 00:06:03,320
Speaker 1: Down payments for real estate have increased in your lucky

114
00:06:03,320 --> 00:06:04,840
Speaker 1: if you can get the mortgage at three and a

115
00:06:04,839 --> 00:06:06,720
Speaker 1: half percent, at least in the United States, and we've

116
00:06:06,720 --> 00:06:10,000
Speaker 1: got sluggish wage growth in the developing in the developed world,

117
00:06:10,360 --> 00:06:14,200
Speaker 1: How is what they're doing actually feeding into the real economy. Yeah, Well,

118
00:06:14,240 --> 00:06:17,360
Speaker 1: in the specifics of the UK market right now, mortgage

119
00:06:17,480 --> 00:06:20,039
Speaker 1: lending has been the only lending that's been occurring. It's

120
00:06:20,080 --> 00:06:22,719
Speaker 1: been actually at a faster rate than they'd like to see.

121
00:06:22,720 --> 00:06:24,760
Speaker 1: The real estate market has been through the roof there,

122
00:06:25,000 --> 00:06:27,680
Speaker 1: and they've been trying to cool lending. So in a sense,

123
00:06:27,760 --> 00:06:29,640
Speaker 1: this is kind of a stop and start and then

124
00:06:29,640 --> 00:06:33,440
Speaker 1: start again policy on housing to try to keep it

125
00:06:33,440 --> 00:06:38,200
Speaker 1: from collapsing altogether. On their forecast, they're predicting a decline

126
00:06:38,240 --> 00:06:41,680
Speaker 1: in house prices. They're predicting almost no economic growth in

127
00:06:41,720 --> 00:06:43,880
Speaker 1: the second half of this year. This is a much

128
00:06:43,920 --> 00:06:47,920
Speaker 1: more severe circumstance than we've seen before, and you've got

129
00:06:47,920 --> 00:06:50,719
Speaker 1: to believe that if that's what that's what's actually going

130
00:06:50,800 --> 00:06:54,880
Speaker 1: to happen. Lower interest rates certainly can't hurt and whatever

131
00:06:54,920 --> 00:06:57,320
Speaker 1: help they provide would be welcomers. Well, of course, you

132
00:06:57,400 --> 00:06:59,440
Speaker 1: just mentioned, Carl, the fact that they've got this found

133
00:06:59,480 --> 00:07:02,120
Speaker 1: clever corporate lending program and can talk about that more

134
00:07:02,120 --> 00:07:04,400
Speaker 1: in a minute. In ten seconds, though, do you see

135
00:07:04,400 --> 00:07:08,400
Speaker 1: another rate cut in November? Um, I'm gonna say, I

136
00:07:08,480 --> 00:07:11,480
Speaker 1: don't know. Let's go yet to see some real hard

137
00:07:11,560 --> 00:07:14,160
Speaker 1: data on how the economy has performed in this post

138
00:07:14,160 --> 00:07:16,640
Speaker 1: brexit period. Let's look at some real hard numbers and

139
00:07:16,680 --> 00:07:18,920
Speaker 1: then we'll make a judgment. All Right, We've got more

140
00:07:19,000 --> 00:07:23,360
Speaker 1: with Carl Weinberg. He is chief economist high Frequency Economics.

141
00:07:23,760 --> 00:07:27,920
Speaker 1: You can follow him on Twitter at c B Weinberg.

142
00:07:28,280 --> 00:07:31,520
Speaker 1: We've got more on the Bank of England's rate decision,

143
00:07:31,880 --> 00:07:35,560
Speaker 1: the European Central Bank and negative interest rates in the

144
00:07:35,600 --> 00:07:39,400
Speaker 1: future of the global economy. This is taking Stock. I'm

145
00:07:39,400 --> 00:07:42,800
Speaker 1: Pim Fox, my co host Kathleen Hayes. This is Bloomberg.

146
00:07:46,040 --> 00:07:49,280
Speaker 1: Bank of England Governor Mark Karney said he is against

147
00:07:49,400 --> 00:07:53,000
Speaker 1: negative interest rates. He doesn't like the idea of helicopter money.

148
00:07:53,040 --> 00:07:55,160
Speaker 1: But as he decides to buy more bonds in the UK,

149
00:07:55,400 --> 00:07:57,840
Speaker 1: is that where he's heading. That's next on taking Stock

150
00:08:04,160 --> 00:08:08,480
Speaker 1: broadcasting live to New York, Bloomberg eleven, Rio to Washington,

151
00:08:08,560 --> 00:08:13,560
Speaker 1: d C. Bloomberg to Boston, Bloomberg twelve to San Francisco,

152
00:08:13,680 --> 00:08:17,400
Speaker 1: Bloomberg nine to the country, SIS at jam General one

153
00:08:17,520 --> 00:08:21,080
Speaker 1: nineteen and around the globe the Bloomberg Radio Plus happened.

154
00:08:21,080 --> 00:08:25,520
Speaker 1: Bloomberg got gone. This is taking Stock. I'm Kathleen Hayes

155
00:08:25,680 --> 00:08:28,760
Speaker 1: along with him Fox. The Bank of England cutting its

156
00:08:28,840 --> 00:08:31,560
Speaker 1: key rate, getting ready to buy more bonds. Most of

157
00:08:31,560 --> 00:08:33,880
Speaker 1: the world is heading in the direction of more stimulus.

158
00:08:33,920 --> 00:08:37,199
Speaker 1: Can the Federal Reserve resist? And are there some signals

159
00:08:37,480 --> 00:08:40,480
Speaker 1: some negative signals about the entire global economy With all

160
00:08:40,520 --> 00:08:43,280
Speaker 1: these central banks. On the March, We're going to continue

161
00:08:43,280 --> 00:08:47,079
Speaker 1: our conversation with Karl Weinberger of High Frequency Economics. Right now,

162
00:08:47,160 --> 00:08:49,160
Speaker 1: let's go to Charlie Kellett in the Bloomberg news room

163
00:08:49,160 --> 00:08:51,760
Speaker 1: for Bloomberg Business Flag and I thank you Phim, thank

164
00:08:51,760 --> 00:08:55,360
Speaker 1: you Kathleen. On mixed picture for stocks right now, little change,

165
00:08:55,440 --> 00:08:57,800
Speaker 1: that is the takeaway here. We've got the down industrials

166
00:08:57,840 --> 00:09:01,400
Speaker 1: down eleven points eighteen pounds than three hundred forty three,

167
00:09:01,640 --> 00:09:04,560
Speaker 1: a drop there of less than point one percent, SMP

168
00:09:04,720 --> 00:09:08,120
Speaker 1: five hundred index unchanged, and nastack is up seven to

169
00:09:08,200 --> 00:09:11,120
Speaker 1: fifty one sixty seven, a game there of two tenths

170
00:09:11,160 --> 00:09:15,559
Speaker 1: of one percent. Mixed corporate earnings offering little direction. Fertilizer

171
00:09:15,559 --> 00:09:20,000
Speaker 1: maker CF Industries seeing its steepest drop since January after

172
00:09:20,080 --> 00:09:24,160
Speaker 1: its results miss analyst predictions. Shares of CF they are

173
00:09:24,240 --> 00:09:28,040
Speaker 1: down now by twelve point three two percent. MetLife tumbling

174
00:09:28,120 --> 00:09:32,000
Speaker 1: nine point one percent after its quarterly profit disappointed Bank

175
00:09:32,040 --> 00:09:36,319
Speaker 1: of England Governor Mark Carney unveiling an exceptional package of stimulus,

176
00:09:36,400 --> 00:09:40,199
Speaker 1: including the Bank's first interest rate cut in seven years.

177
00:09:40,600 --> 00:09:43,640
Speaker 1: Those policy makers slash growth forecast by the most ever

178
00:09:43,920 --> 00:09:46,839
Speaker 1: after Britain's decision to leave the European Union, and of

179
00:09:46,920 --> 00:09:50,480
Speaker 1: the news conference, Carney took questions on a number of topics,

180
00:09:50,559 --> 00:09:54,320
Speaker 1: including last June's Brexit vote. There is a great degree

181
00:09:54,320 --> 00:09:57,880
Speaker 1: of uncertainty. It's entirely understandable that there is there's uncertainty

182
00:09:57,880 --> 00:10:00,400
Speaker 1: about the eventual model that we will have at the

183
00:10:00,400 --> 00:10:03,440
Speaker 1: European Union. There are number of options on the table

184
00:10:03,920 --> 00:10:08,400
Speaker 1: um whichever model has chosen itself will require some degree

185
00:10:08,400 --> 00:10:10,800
Speaker 1: of adjustment in the economy and that brings its own

186
00:10:10,840 --> 00:10:14,760
Speaker 1: effects on growth and uh end productivity for a period

187
00:10:14,800 --> 00:10:17,200
Speaker 1: of time. And whilst we gets the all important July

188
00:10:17,559 --> 00:10:21,960
Speaker 1: jobs are the August jobs numbered, July jobs number tomorrow morning.

189
00:10:22,000 --> 00:10:24,960
Speaker 1: Today we got jobless claims. The number of Americans filing

190
00:10:24,960 --> 00:10:28,559
Speaker 1: applications for unemployment benefits rose last week to a level

191
00:10:28,559 --> 00:10:31,600
Speaker 1: that's still under scores health in the labor market. Claims

192
00:10:31,640 --> 00:10:35,240
Speaker 1: up by three thousand, two hundred sixty nine thousand, ten year,

193
00:10:35,280 --> 00:10:38,880
Speaker 1: up eleven thirty seconds, yield one point five percent, Gold

194
00:10:38,960 --> 00:10:41,679
Speaker 1: up two tenths of one percent. And now let's take

195
00:10:41,720 --> 00:10:45,880
Speaker 1: a look at other stories making news. Thank you Charlie

196
00:10:45,880 --> 00:10:48,600
Speaker 1: from the Bloomberg News room. I'm Jill Schneider. This news

197
00:10:48,679 --> 00:10:51,960
Speaker 1: update is brought to you by Blue Jeans Enterprise Video Cloud.

198
00:10:52,240 --> 00:10:56,319
Speaker 1: See Faces, Emotions, Energy, see the people your team's video

199
00:10:56,440 --> 00:10:59,720
Speaker 1: from any device. Start a free thirty day trial at

200
00:10:59,720 --> 00:11:02,640
Speaker 1: blue Jeans dot com and click the radio Mike. Blue

201
00:11:02,720 --> 00:11:06,720
Speaker 1: Jeans Work Smarter, Connect Better. Some Republicans are angry with

202
00:11:06,800 --> 00:11:10,520
Speaker 1: presidential nominee Donald Trump for refusing to endorse how speaker

203
00:11:10,520 --> 00:11:14,079
Speaker 1: Paul Ryan. Trump campaign chairman Paul Manafort says this should

204
00:11:14,080 --> 00:11:15,720
Speaker 1: not be a concern. Of course, he's going to work

205
00:11:15,760 --> 00:11:17,599
Speaker 1: with Pau Ryan. Of course he's tried to bridge the

206
00:11:17,640 --> 00:11:20,640
Speaker 1: party together with But Ryan is also running against somebody

207
00:11:20,640 --> 00:11:23,400
Speaker 1: who's not gonna win, but nonetheless is a strong supporter

208
00:11:23,400 --> 00:11:26,760
Speaker 1: of Mr Trump's. Meanwhile, another GOP congressman is saying he

209
00:11:26,840 --> 00:11:30,400
Speaker 1: is unlikely to support Donald Trump for president. Adam Kinzinger

210
00:11:30,400 --> 00:11:33,120
Speaker 1: of Illinois says Trump is quote beginning to cross a

211
00:11:33,160 --> 00:11:36,840
Speaker 1: lot of red lines of the unforgivable in politics. Kinsinger

212
00:11:36,880 --> 00:11:39,959
Speaker 1: also says he will not support Hillary Clinton. London police

213
00:11:40,000 --> 00:11:42,160
Speaker 1: say a nineteen year old man is in custody after

214
00:11:42,200 --> 00:11:44,680
Speaker 1: a knife attack last night that left one woman dead,

215
00:11:45,000 --> 00:11:47,240
Speaker 1: although police say at this point there is nothing linking

216
00:11:47,280 --> 00:11:50,400
Speaker 1: the suspect to terrorism. This local resident says it's something

217
00:11:50,440 --> 00:11:53,200
Speaker 1: that's always on her mind. It's living in London, especially

218
00:11:53,200 --> 00:11:55,320
Speaker 1: in central London. There's always that thing, kind of thing

219
00:11:55,320 --> 00:11:58,079
Speaker 1: in the back of your mind, you know, you live

220
00:11:58,160 --> 00:12:02,240
Speaker 1: with terror is. Five people were also injured in the attack.

221
00:12:02,640 --> 00:12:05,880
Speaker 1: Dozens were arrested today in the latest crackdown on organized

222
00:12:05,880 --> 00:12:08,760
Speaker 1: crime by the FBI and New York City Police. The

223
00:12:08,840 --> 00:12:12,680
Speaker 1: suspects are reputed members of the Banano, Genovesi and Colombo

224
00:12:12,760 --> 00:12:15,720
Speaker 1: crime families. The arrests were made in New York, Newark,

225
00:12:15,800 --> 00:12:19,319
Speaker 1: New Haven, Boston and Miami. The arrests follow a multi

226
00:12:19,400 --> 00:12:23,000
Speaker 1: year investigation. Global News twenty four hours a day, powered

227
00:12:23,000 --> 00:12:26,199
Speaker 1: by more than twenty journalists and analysts in more than

228
00:12:26,200 --> 00:12:30,120
Speaker 1: one hundred twenty countries. I'm Jil Schneider and this is Bloomberg, Charlie,

229
00:12:30,640 --> 00:12:33,200
Speaker 1: and we thank you and again recapping little change for

230
00:12:33,320 --> 00:12:36,080
Speaker 1: US equities twenty six minutes to go ahead of the close.

231
00:12:36,200 --> 00:12:38,920
Speaker 1: We've got the SMP five D indecks down by less

232
00:12:39,000 --> 00:12:42,240
Speaker 1: than half a point. I'm Charlie Paloton Pats of Bloombird

233
00:12:42,280 --> 00:12:47,319
Speaker 1: Business Flash. This is taking stock the FED in focus

234
00:12:47,400 --> 00:12:52,319
Speaker 1: on Bloomberg Radio. We can't heer our conversation. Now. I'm

235
00:12:52,320 --> 00:12:54,400
Speaker 1: taking a look at the Bank of England, what they did,

236
00:12:54,480 --> 00:12:56,600
Speaker 1: what they said, and what is going to happen next.

237
00:12:56,679 --> 00:13:00,199
Speaker 1: Carl Weinbergger's ar guests chief economist, Managing director for High

238
00:13:00,240 --> 00:13:04,640
Speaker 1: Frequency Economics. You know, Carl PM was just raising the

239
00:13:04,880 --> 00:13:08,800
Speaker 1: question about will this work? You know you're gonna buy bonds,

240
00:13:09,000 --> 00:13:11,720
Speaker 1: and I think it's interesting to ponder a point that

241
00:13:11,720 --> 00:13:15,360
Speaker 1: our Bloomberg intelligence team made about the bond buying, which is,

242
00:13:15,400 --> 00:13:18,000
Speaker 1: you know you're sending a signal it's going to be stimulus,

243
00:13:18,040 --> 00:13:21,040
Speaker 1: and that along with the bond buying getting yields down

244
00:13:21,360 --> 00:13:24,400
Speaker 1: on on borrowing costs, right and along with this targeted

245
00:13:24,480 --> 00:13:27,840
Speaker 1: corporate bond buying program where they're really going to try

246
00:13:27,880 --> 00:13:31,720
Speaker 1: to funnel money to real UK businesses right that that

247
00:13:31,840 --> 00:13:34,840
Speaker 1: they're trying to hit this whole question of the impact

248
00:13:34,920 --> 00:13:37,120
Speaker 1: of uncertainty, which has been a big hit to their

249
00:13:37,120 --> 00:13:41,560
Speaker 1: economy already by making sure that businesses can really get

250
00:13:41,600 --> 00:13:43,679
Speaker 1: money and really do stuff. Is this is this a

251
00:13:43,720 --> 00:13:45,640
Speaker 1: clever step by the Bank afy And do you think

252
00:13:45,640 --> 00:13:48,280
Speaker 1: of potentially more effective than some other things central banks

253
00:13:48,280 --> 00:13:50,400
Speaker 1: have done well? I think it's certainly what they hope

254
00:13:50,440 --> 00:13:53,319
Speaker 1: to do, Kathleen, and certainly lending to businesses has been

255
00:13:53,640 --> 00:13:56,520
Speaker 1: a store point. We've seen credit overall in the UK

256
00:13:56,679 --> 00:13:59,840
Speaker 1: go from contraction to a very tepid rate of increase

257
00:13:59,880 --> 00:14:03,079
Speaker 1: in the last few monthly reports, but lending the businesses

258
00:14:03,200 --> 00:14:06,199
Speaker 1: remains flat at best. Most of the lending has been

259
00:14:06,240 --> 00:14:10,000
Speaker 1: to consumers and for mortgages. So businesses do need more

260
00:14:10,040 --> 00:14:12,360
Speaker 1: credit and they'll need it more than ever in this

261
00:14:12,480 --> 00:14:16,160
Speaker 1: uncertain period in the UK, starting as they did with

262
00:14:16,280 --> 00:14:20,560
Speaker 1: yields a little higher than they have been recently in Europe. Uh,

263
00:14:20,640 --> 00:14:23,680
Speaker 1: there's certainly a case to be made that long term

264
00:14:23,680 --> 00:14:26,920
Speaker 1: interest rates and borrowing costs and the cost of bancredit

265
00:14:26,960 --> 00:14:31,239
Speaker 1: can be made cheaper to advantage to bring the economy

266
00:14:31,320 --> 00:14:33,520
Speaker 1: up a little bit at a faster pace of growth.

267
00:14:33,880 --> 00:14:35,840
Speaker 1: You know, of course, ten year yields are only sixty

268
00:14:35,880 --> 00:14:38,880
Speaker 1: four basis points, so you can only get so much

269
00:14:39,000 --> 00:14:42,080
Speaker 1: out of buying, you know, more sovereign bonds and bringing

270
00:14:42,120 --> 00:14:45,680
Speaker 1: down the yield curve. As far as corporate bonds are concerned,

271
00:14:45,840 --> 00:14:48,480
Speaker 1: I personally have a problem with this. It doesn't stop

272
00:14:48,520 --> 00:14:50,640
Speaker 1: the Bank of England or the ECB from doing it.

273
00:14:50,920 --> 00:14:54,600
Speaker 1: But I view corporate bond purchases as more microeconomic policy

274
00:14:54,880 --> 00:14:58,720
Speaker 1: and tinkering with the price of risk, rather than macroeconomic policy,

275
00:14:58,760 --> 00:15:00,960
Speaker 1: which is what happens when they by a sovereign bond

276
00:15:01,000 --> 00:15:03,920
Speaker 1: and bring down all interest rates. But that's my problem,

277
00:15:03,960 --> 00:15:07,600
Speaker 1: not theres They clearly think that lower corporate yields relative

278
00:15:07,680 --> 00:15:10,680
Speaker 1: to sovereigns are going to help, and more power to them,

279
00:15:10,840 --> 00:15:13,880
Speaker 1: Carl Weinberke. If you take a look at commodity prices,

280
00:15:14,280 --> 00:15:17,880
Speaker 1: corn down to about twenty one month lows, wheat hitting

281
00:15:17,880 --> 00:15:20,880
Speaker 1: a nine year low, soybeans down ten percent from June,

282
00:15:20,880 --> 00:15:27,360
Speaker 1: down from the peak, agricultural prices falling, crude trading it

283
00:15:27,440 --> 00:15:30,520
Speaker 1: around forty one about right now, just up about two

284
00:15:30,560 --> 00:15:34,160
Speaker 1: and a quarter percent. Are we going to experience an

285
00:15:34,160 --> 00:15:38,160
Speaker 1: economic downturn as a result of these easy money policies?

286
00:15:38,720 --> 00:15:42,680
Speaker 1: Okammy is stealing my my report to clients over tonight's

287
00:15:42,680 --> 00:15:44,920
Speaker 1: report and the one that they'll be getting over the weekend.

288
00:15:44,960 --> 00:15:47,880
Speaker 1: At High Frequency Economics, we are writing about a global

289
00:15:47,920 --> 00:15:50,520
Speaker 1: economic downturn. We've been writing about it for a long time,

290
00:15:50,840 --> 00:15:54,040
Speaker 1: and following commodity prices certainly impoverished big parts of the

291
00:15:54,040 --> 00:15:57,680
Speaker 1: world economy. I view the decline in world trade is

292
00:15:57,720 --> 00:16:00,800
Speaker 1: being directly linked to the drop and come moodity prices,

293
00:16:00,840 --> 00:16:04,640
Speaker 1: which makes commodity producers poorer and means they import less

294
00:16:04,640 --> 00:16:07,600
Speaker 1: stuff from US, which means US exports are a week

295
00:16:07,640 --> 00:16:10,280
Speaker 1: part of the US outlook. And we've been linking that

296
00:16:10,400 --> 00:16:13,600
Speaker 1: drop in world trade to an expected slow down impossible

297
00:16:13,640 --> 00:16:17,160
Speaker 1: contraction of the world economy for a long time. Right now,

298
00:16:17,200 --> 00:16:20,400
Speaker 1: I track seven central banks and all of them are

299
00:16:20,440 --> 00:16:24,720
Speaker 1: now easy now have easy monetary conditions, including the FED

300
00:16:25,040 --> 00:16:28,760
Speaker 1: which is not tightening uh and including d c B

301
00:16:28,960 --> 00:16:32,320
Speaker 1: which is easing monetary conditions like MAD, the Bank of

302
00:16:32,400 --> 00:16:35,880
Speaker 1: Japan which is using conditions like ultramad, the BIKE, the

303
00:16:35,880 --> 00:16:38,640
Speaker 1: Bank of Reserve, Bank of Australia, which just cut interest

304
00:16:38,720 --> 00:16:41,400
Speaker 1: rates this week, the Canadians who cut interest rates in

305
00:16:41,440 --> 00:16:44,560
Speaker 1: recent months. All the central banks are doing the same thing.

306
00:16:44,640 --> 00:16:48,080
Speaker 1: They're going full out toward easing, and they're marking down

307
00:16:48,120 --> 00:16:50,880
Speaker 1: their forecast every time they do a new forecast exercise

308
00:16:51,080 --> 00:16:53,880
Speaker 1: to predict even slower and slower growth. I can't help

309
00:16:53,880 --> 00:16:56,080
Speaker 1: but feel that they're telling us what we should be

310
00:16:56,120 --> 00:16:59,640
Speaker 1: seeing in the world right now, which is a coordinated

311
00:16:59,680 --> 00:17:02,040
Speaker 1: slow down in many parts of the world economy at

312
00:17:02,040 --> 00:17:04,480
Speaker 1: the same time, and a possible contraction in a lot

313
00:17:04,480 --> 00:17:07,479
Speaker 1: of places. It's not good carny chance that it's oh

314
00:17:07,640 --> 00:17:10,200
Speaker 1: the balls now and the fiscal court of the UK,

315
00:17:10,359 --> 00:17:13,679
Speaker 1: of the Fed of Japan, every country supposedly the fiscal

316
00:17:13,720 --> 00:17:15,399
Speaker 1: guy's got to carry the ball. Now. Is that going

317
00:17:15,440 --> 00:17:18,119
Speaker 1: to happen? Well, the ball. That's been what the central

318
00:17:18,160 --> 00:17:20,240
Speaker 1: bankers have been saying for a while. We know Mario

319
00:17:20,359 --> 00:17:23,240
Speaker 1: drag said it explicitly. We know that the I m

320
00:17:23,440 --> 00:17:26,760
Speaker 1: F is called for more fiscal stimulus. Whether it's going

321
00:17:26,840 --> 00:17:29,600
Speaker 1: to happen or not, you know, that's a political decision.

322
00:17:29,840 --> 00:17:33,280
Speaker 1: The economics of it, though, in my view are compelling.

323
00:17:33,640 --> 00:17:36,919
Speaker 1: This is not the time for austerity. And while in

324
00:17:36,960 --> 00:17:40,920
Speaker 1: some places like Japan, fiscal policy is misplaced. They're they're

325
00:17:40,920 --> 00:17:44,240
Speaker 1: trying to fight a demographic challenge that can't be overcome

326
00:17:44,280 --> 00:17:47,399
Speaker 1: by any economic policy. But certainly the case of Europe,

327
00:17:47,440 --> 00:17:50,360
Speaker 1: Europe needs a kickstart, and fiscal policy is the way

328
00:17:50,440 --> 00:17:52,600
Speaker 1: to do it. In many countries in Europe have the

329
00:17:52,600 --> 00:17:55,680
Speaker 1: fiscal space to make that happen. The UK has committed

330
00:17:55,720 --> 00:17:58,679
Speaker 1: to fiscal stimulus, that's a good side. The Canadians have

331
00:17:58,760 --> 00:18:02,080
Speaker 1: committed to fiscal stimulut us. That's a good time the US.

332
00:18:02,160 --> 00:18:04,159
Speaker 1: We're not going to see any fiscal stimulus here for

333
00:18:04,240 --> 00:18:06,560
Speaker 1: quite a while. I'm pretty sure of that, just looking

334
00:18:06,560 --> 00:18:10,320
Speaker 1: at the politics of UH in Washington and the prospects

335
00:18:10,440 --> 00:18:13,639
Speaker 1: will come out of the upcoming election. UM and UH

336
00:18:13,760 --> 00:18:16,560
Speaker 1: so who's left, you know, So it's a mixed bag.

337
00:18:16,680 --> 00:18:19,000
Speaker 1: Some people are moving in that direction. I wish we

338
00:18:19,040 --> 00:18:22,240
Speaker 1: would see more, but realistically, I don't think the biggest

339
00:18:22,240 --> 00:18:24,280
Speaker 1: players are going to be at the table for that game.

340
00:18:24,880 --> 00:18:29,720
Speaker 1: Carl Weinberg, thank you very much, Chief Economist high Frequency Economics.

341
00:18:29,840 --> 00:18:33,359
Speaker 1: You can follow Carl Weinberg on Twitter at c B

342
00:18:33,960 --> 00:18:37,520
Speaker 1: Weinberg giving us his thoughts on the Bank of England's

343
00:18:37,640 --> 00:18:43,480
Speaker 1: rate decision and the potential turned down in the global economy.

344
00:18:43,720 --> 00:18:48,080
Speaker 1: Looking for fiscal stimulus, that's what Carl Weinberg says might

345
00:18:48,119 --> 00:18:51,720
Speaker 1: actually be needed. This is taking Stockheim pim Fox My

346
00:18:51,840 --> 00:19:01,760
Speaker 1: co host Kathleen Hayes, this is Bloomberg Central banks around

347
00:19:01,760 --> 00:19:04,240
Speaker 1: the world trying to boost their economies. That fed dragging

348
00:19:04,240 --> 00:19:06,760
Speaker 1: its feet on a raid hike. But what about companies?

349
00:19:06,800 --> 00:19:10,080
Speaker 1: What about their profits? What about their earnings? Jack Rivken

350
00:19:10,119 --> 00:19:13,119
Speaker 1: from Altegris coming up next on Bloomberg Radio