1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,960 Speaker 1: Bloomberg dot com, and of course, on the Bloomberg. Francisco 5 00:00:28,000 --> 00:00:31,800 Speaker 1: Blanche be Of, a head of Global Commodities and Derivatives research, 6 00:00:32,280 --> 00:00:35,320 Speaker 1: joins us. What's your take on this? You've been writing 7 00:00:35,720 --> 00:00:39,200 Speaker 1: about bitcoin here and there for years now, Francisco, has 8 00:00:39,240 --> 00:00:49,040 Speaker 1: it now been accepted widely accepted in the institutional investment community? Um? Well, look, 9 00:00:48,760 --> 00:00:53,120 Speaker 1: I think I think uh cryptocurrencies in general and bitcomming 10 00:00:53,159 --> 00:00:56,520 Speaker 1: in particular, are to your earlier question, I think they're 11 00:00:56,520 --> 00:01:02,120 Speaker 1: clearly they're clearly tokens, and uh tokens are token circummodities, 12 00:01:02,120 --> 00:01:05,600 Speaker 1: so I wouldn't necessarily qualify them as currencies. Currencies are 13 00:01:05,640 --> 00:01:11,040 Speaker 1: issued by a government. Um, Bitcoin or any any cryptocurrency 14 00:01:11,080 --> 00:01:15,479 Speaker 1: can be issued by almost anyone, right, So in that sense, 15 00:01:15,600 --> 00:01:20,000 Speaker 1: it's uh, it's a bit of an unusual setup, and uh, 16 00:01:20,280 --> 00:01:22,520 Speaker 1: so I would qualify that. I think I think it's 17 00:01:22,800 --> 00:01:24,959 Speaker 1: more of a commodity and it is a currency, UM, 18 00:01:25,920 --> 00:01:28,559 Speaker 1: a crypto token The second thing I'd say is that 19 00:01:29,240 --> 00:01:32,480 Speaker 1: you know, if you if you think about this, this 20 00:01:33,240 --> 00:01:38,560 Speaker 1: particular construct that that bitcoin has, remember that ninety plus 21 00:01:38,560 --> 00:01:41,400 Speaker 1: of the coin is is held by less than one 22 00:01:41,400 --> 00:01:45,240 Speaker 1: percent of the account holders. So there's a very high 23 00:01:45,280 --> 00:01:50,320 Speaker 1: concentration of the early um, of the early adopters that 24 00:01:50,360 --> 00:01:54,680 Speaker 1: haven't really sold. And and again, if we think about 25 00:01:54,760 --> 00:01:57,000 Speaker 1: supply and demand, you know, it's it's just one of 26 00:01:57,000 --> 00:02:01,920 Speaker 1: those things that there's been a flurry of demand and 27 00:02:01,920 --> 00:02:05,200 Speaker 1: and frankly not very much supply because the first of all, 28 00:02:05,240 --> 00:02:08,720 Speaker 1: the supplies cat longer term and uh and and and 29 00:02:08,760 --> 00:02:12,440 Speaker 1: that's been the issue. So so it's extremely volatile. I mean, 30 00:02:12,440 --> 00:02:15,320 Speaker 1: I wouldn't I mean, compared it to any other commodity, 31 00:02:15,639 --> 00:02:18,560 Speaker 1: the volativity of of of crypt currency is way way 32 00:02:18,639 --> 00:02:22,040 Speaker 1: higher in most cases. So, Francisco, I want to ask you, 33 00:02:22,080 --> 00:02:23,560 Speaker 1: what do you make though of a year where you've 34 00:02:23,560 --> 00:02:27,880 Speaker 1: got Bitcoin up more than three here in and you've 35 00:02:27,880 --> 00:02:30,639 Speaker 1: got gold on track to have the biggest annual advance 36 00:02:30,720 --> 00:02:33,800 Speaker 1: in a decade. How do you kind of juxtaposing to 37 00:02:33,840 --> 00:02:38,079 Speaker 1: you and how do you kind of make sense of that? Right? So, 38 00:02:38,360 --> 00:02:42,160 Speaker 1: to me, it's it's quite straightforward. We've had of course, 39 00:02:42,720 --> 00:02:45,799 Speaker 1: a flurry of liquidity that's coming to the market from 40 00:02:45,840 --> 00:02:49,200 Speaker 1: the central banks, the FED spounce. It's more than doubled 41 00:02:49,480 --> 00:02:52,440 Speaker 1: as well throughout the period. So naturally, when you inject 42 00:02:52,480 --> 00:02:57,040 Speaker 1: so much money. Remember we were talking about currency before, right, 43 00:02:57,120 --> 00:03:01,040 Speaker 1: so currency is created by governments. And when when, uh, 44 00:03:01,160 --> 00:03:04,360 Speaker 1: the world's most important center bank, in the world's artist 45 00:03:04,440 --> 00:03:08,040 Speaker 1: economy injects so much liquid in the financial system, all 46 00:03:08,480 --> 00:03:13,600 Speaker 1: assets tend to benefit from it. Um and and that's 47 00:03:13,600 --> 00:03:17,800 Speaker 1: what we've seen now if you think about airline stocks, 48 00:03:18,480 --> 00:03:22,880 Speaker 1: or you think about other assets that have been severely 49 00:03:22,919 --> 00:03:26,040 Speaker 1: impacted by mobility, which is really what the COVID nineteen 50 00:03:26,080 --> 00:03:29,080 Speaker 1: crisis is about. Uh, they have not gone back to 51 00:03:29,240 --> 00:03:32,800 Speaker 1: previous historical records, but all the asset classes that were 52 00:03:32,840 --> 00:03:38,119 Speaker 1: in some way constraint the shirts and of course that's 53 00:03:38,160 --> 00:03:43,320 Speaker 1: included UM commodities like gold or silver UM. And and 54 00:03:43,520 --> 00:03:46,880 Speaker 1: uh it's also like I said before, it's it's impact 55 00:03:46,920 --> 00:03:50,840 Speaker 1: to think about UM electric electric vehicle stocks, right. I 56 00:03:50,840 --> 00:03:53,280 Speaker 1: mean those have have also taken off in a huge way. 57 00:03:53,440 --> 00:03:56,080 Speaker 1: So so I think liquidity has been driving this this 58 00:03:56,280 --> 00:03:59,920 Speaker 1: enormous divergence and in asset values that we've seen. Uh, 59 00:04:00,480 --> 00:04:02,640 Speaker 1: because central banks with the fit of the helm. We're 60 00:04:02,680 --> 00:04:05,760 Speaker 1: trying to support the economy and predicularly the financial markets. 61 00:04:07,720 --> 00:04:11,080 Speaker 1: So what happened then, UM to oil? I mean, we 62 00:04:11,080 --> 00:04:13,480 Speaker 1: were looking at sixty dollars Francisco at the beginning of 63 00:04:13,480 --> 00:04:17,440 Speaker 1: the year, it dropped to negative forty, and now we're 64 00:04:17,480 --> 00:04:21,040 Speaker 1: trading at nine. I can take the negative drop as 65 00:04:21,080 --> 00:04:25,880 Speaker 1: a as a blip, UM, a giant, possibly orchestrated fat finger, 66 00:04:26,000 --> 00:04:30,360 Speaker 1: But nonetheless it's a commodity priced in dollars that has 67 00:04:30,480 --> 00:04:37,080 Speaker 1: dropped in value. Why well so So the oil story, 68 00:04:37,440 --> 00:04:39,880 Speaker 1: as I mentioned earlier right, is very linked to the 69 00:04:39,920 --> 00:04:43,040 Speaker 1: idea that COVID nineteen is a unique counter recession. Normally, 70 00:04:43,080 --> 00:04:47,440 Speaker 1: recessions are cyclical in the sense that we see industry 71 00:04:47,800 --> 00:04:50,240 Speaker 1: slowing down many fully and we tend to see some 72 00:04:50,320 --> 00:04:53,320 Speaker 1: kind of financially band driving them. This time around, COVID 73 00:04:53,400 --> 00:04:57,839 Speaker 1: nineteen just literally shut us, UM shut shut the global 74 00:04:57,839 --> 00:05:01,800 Speaker 1: economy down in a meaningful way, and UM and mobility 75 00:05:01,839 --> 00:05:05,280 Speaker 1: collapsed suddenly. We couldn't go anywhere. In fact, today I'm 76 00:05:05,640 --> 00:05:07,760 Speaker 1: a home rather than being at the studio with you guys, 77 00:05:08,000 --> 00:05:12,120 Speaker 1: as I would normally do on a on a regular day. Um. 78 00:05:12,120 --> 00:05:14,480 Speaker 1: You know, I haven't. I haven't been on a plane now, 79 00:05:14,560 --> 00:05:16,279 Speaker 1: I guess for the longest period of my life, I 80 00:05:16,279 --> 00:05:19,000 Speaker 1: mean spring night, ten ten months now without kind of 81 00:05:19,000 --> 00:05:22,800 Speaker 1: hopping on a plane. Um, so you know that that 82 00:05:22,920 --> 00:05:27,200 Speaker 1: mobility is was taken down. The demand for oil by 83 00:05:27,200 --> 00:05:29,799 Speaker 1: as much as thirty percent in the month of April 84 00:05:30,240 --> 00:05:33,480 Speaker 1: UM and when the man felt by thirty which also 85 00:05:33,560 --> 00:05:36,200 Speaker 1: probably linked you know, I think of GDP also felt 86 00:05:36,200 --> 00:05:41,040 Speaker 1: about that number. Oil prices collapsed and uh, and then 87 00:05:41,080 --> 00:05:42,440 Speaker 1: to your point, there was a bit of a fat 88 00:05:42,480 --> 00:05:47,000 Speaker 1: finger there. But but also also at some point OPEC 89 00:05:47,120 --> 00:05:51,120 Speaker 1: started to catch back production. We reopened the global economy 90 00:05:51,160 --> 00:05:54,200 Speaker 1: and starting in May and June and and things picked up. 91 00:05:54,440 --> 00:05:56,200 Speaker 1: But but now in the last couple of days we've 92 00:05:56,200 --> 00:05:58,640 Speaker 1: gotten a little nervous again because of this new virus 93 00:05:58,680 --> 00:06:01,559 Speaker 1: strain going on in the UK. Right, So anyway, okay, 94 00:06:01,720 --> 00:06:05,280 Speaker 1: Francisco just got about seconds. So what's your projection? Give 95 00:06:05,360 --> 00:06:09,000 Speaker 1: us a quick price target for oil. So we we 96 00:06:09,080 --> 00:06:12,320 Speaker 1: see we see oil getting to sixty barrel by the 97 00:06:12,360 --> 00:06:14,560 Speaker 1: second quarter, So we are we are constructed. We think 98 00:06:14,600 --> 00:06:17,520 Speaker 1: the economy comes back. Obviously, we have to control this 99 00:06:17,880 --> 00:06:19,920 Speaker 1: UK strain in the first In the next couple of months, 100 00:06:19,920 --> 00:06:22,720 Speaker 1: so it could be a little patchy in January, but 101 00:06:22,760 --> 00:06:24,400 Speaker 1: I think once we get to June, we're gonna be 102 00:06:24,440 --> 00:06:26,520 Speaker 1: in a much better shape. Those vaccines are going to 103 00:06:26,560 --> 00:06:30,000 Speaker 1: really help get things moving. No punting, all right, Gonna 104 00:06:30,080 --> 00:06:31,920 Speaker 1: leave it on that note. Francisco, thank you so much. 105 00:06:31,920 --> 00:06:34,600 Speaker 1: Have a great and safe new year. Francisco blant He 106 00:06:34,800 --> 00:06:37,960 Speaker 1: is bake of America ahead of global commodities and derivatives research. 107 00:06:38,279 --> 00:06:49,640 Speaker 1: Joining us here, Lara Ray, Let's bring her in right now, 108 00:06:50,400 --> 00:06:53,880 Speaker 1: FS Investments Chief US Economists And let me start Lara 109 00:06:53,960 --> 00:06:58,200 Speaker 1: with the Devil's advocate with the other side of this um. 110 00:06:58,240 --> 00:07:01,799 Speaker 1: At what point does the US spend too much money? 111 00:07:01,800 --> 00:07:04,839 Speaker 1: At what point do uh does the US take on 112 00:07:04,960 --> 00:07:09,520 Speaker 1: too much debt? Because there isn't really a magic money tree, right, 113 00:07:09,640 --> 00:07:12,720 Speaker 1: I mean, at some point you just can't keep handing 114 00:07:12,760 --> 00:07:17,040 Speaker 1: out checks to American citizens. Well, I think if we've 115 00:07:17,160 --> 00:07:20,160 Speaker 1: seen anything. Instead, if we wait too long and we 116 00:07:20,240 --> 00:07:24,640 Speaker 1: wait until the economy is really you know, experiencings, it's 117 00:07:24,880 --> 00:07:29,160 Speaker 1: a really cataclysmic disruption that we then when we're when 118 00:07:29,160 --> 00:07:33,800 Speaker 1: we're performing legislation under triage, we can at that point 119 00:07:34,280 --> 00:07:37,680 Speaker 1: do too much or be I think less targeted. The 120 00:07:37,760 --> 00:07:40,880 Speaker 1: real point is that if you can enact legislation earlier, 121 00:07:41,240 --> 00:07:43,360 Speaker 1: you can afford to be more thoughtful and you can 122 00:07:43,400 --> 00:07:46,320 Speaker 1: be more targeted with it, and that just diminishes the 123 00:07:46,360 --> 00:07:49,680 Speaker 1: way to diminishes the need for these multi trillion dollar 124 00:07:50,280 --> 00:07:53,560 Speaker 1: huge packages. I think the point that Carol made is 125 00:07:53,880 --> 00:07:57,240 Speaker 1: really important, which is that you know, right now we're 126 00:07:57,680 --> 00:08:01,120 Speaker 1: still we're seeing these delays that really risk I think 127 00:08:01,360 --> 00:08:05,160 Speaker 1: making the need so much more inflamed. At that point, 128 00:08:05,720 --> 00:08:08,280 Speaker 1: you're trying to just fill a bigger gap, it gets 129 00:08:08,360 --> 00:08:13,840 Speaker 1: more expensive, So doing less earlier really gets you further. Well, 130 00:08:13,880 --> 00:08:15,840 Speaker 1: and the thing is, Lara, this is all about you know, 131 00:08:15,880 --> 00:08:18,480 Speaker 1: this is gonna show in the economy in terms of 132 00:08:18,520 --> 00:08:21,560 Speaker 1: the economic growth figures, which are always lagging, or a 133 00:08:21,600 --> 00:08:23,920 Speaker 1: lot of them are. But I mean there's another story 134 00:08:23,920 --> 00:08:26,280 Speaker 1: on the Bloomberg. Millions of Americans are calling in six 135 00:08:26,320 --> 00:08:28,920 Speaker 1: stunting the recovery. The whole idea is, you know, there 136 00:08:28,920 --> 00:08:31,840 Speaker 1: are a lot of lost days and that plays into productivity, 137 00:08:31,840 --> 00:08:34,880 Speaker 1: and that plays into economic growth. That it's even stunting that, 138 00:08:35,000 --> 00:08:37,480 Speaker 1: so layer that on top you've gotta be a little 139 00:08:37,480 --> 00:08:41,360 Speaker 1: bit worried about growth going forward. I think that's right, Carol, 140 00:08:41,440 --> 00:08:44,040 Speaker 1: If you know, we and and here this is kind 141 00:08:44,040 --> 00:08:46,199 Speaker 1: of getting deep in the weeds on the employment numbers. 142 00:08:46,440 --> 00:08:48,680 Speaker 1: But you know, you look at initial claims and to 143 00:08:48,760 --> 00:08:52,560 Speaker 1: your point, they've they've come down, but void relative to 144 00:08:52,640 --> 00:08:57,720 Speaker 1: any other recession. They are so elevated even now months 145 00:08:57,800 --> 00:09:01,120 Speaker 1: into this recession. And you add to the fact that 146 00:09:01,320 --> 00:09:04,640 Speaker 1: so many people have left the labor force. We're going 147 00:09:04,679 --> 00:09:08,920 Speaker 1: to get the big monthly payroll numbers next Friday, But 148 00:09:09,120 --> 00:09:11,800 Speaker 1: one of the things that we don't usually pay attention 149 00:09:11,840 --> 00:09:15,720 Speaker 1: to is that participation rate. All that is expressing is 150 00:09:15,760 --> 00:09:18,319 Speaker 1: how many people are actually out there looking for jobs. 151 00:09:18,600 --> 00:09:21,120 Speaker 1: We've seen the unemployment rate calm down to less than 152 00:09:21,160 --> 00:09:23,720 Speaker 1: seven percent, but bury beneath that is the fact that 153 00:09:23,760 --> 00:09:28,000 Speaker 1: an awful lot of people and probably because schools aren't open. 154 00:09:28,080 --> 00:09:30,280 Speaker 1: You can think of a lot of reasons why, or 155 00:09:30,440 --> 00:09:33,280 Speaker 1: people have taken their elders out of nursing homes. You 156 00:09:33,320 --> 00:09:36,400 Speaker 1: can think of a lot of reasons why during this pandemic, 157 00:09:36,400 --> 00:09:39,280 Speaker 1: people have decided to stop looking for work so that 158 00:09:39,520 --> 00:09:43,440 Speaker 1: lower participation rate. Little things like that. You know, you 159 00:09:43,559 --> 00:09:46,720 Speaker 1: cut a ten million here, ten million people there from 160 00:09:46,720 --> 00:09:49,320 Speaker 1: the labor force, and when you think about what gives 161 00:09:49,480 --> 00:09:53,600 Speaker 1: us growth, what gives us GDP. You know, those numbers 162 00:09:53,640 --> 00:09:55,800 Speaker 1: just may not be quite as strong as a lot 163 00:09:55,840 --> 00:09:58,920 Speaker 1: of people are expecting, you know, into the end of 164 00:09:59,760 --> 00:10:03,520 Speaker 1: one or as we get that traction back online after 165 00:10:03,600 --> 00:10:07,600 Speaker 1: the vaccine. So, Lara, do you think companies are going 166 00:10:07,640 --> 00:10:10,480 Speaker 1: to hold off in terms of hiring even if they 167 00:10:10,520 --> 00:10:14,040 Speaker 1: expect demand to start coming back. I just wonder how 168 00:10:14,080 --> 00:10:16,520 Speaker 1: hesitant do you think companies are going to be until 169 00:10:16,559 --> 00:10:21,480 Speaker 1: they really see significant demand in This is gonna be 170 00:10:21,559 --> 00:10:25,120 Speaker 1: a critical thing that we're watching in those monthly payroll numbers, 171 00:10:25,120 --> 00:10:28,480 Speaker 1: because what we've seen is a really big decline in 172 00:10:28,640 --> 00:10:33,840 Speaker 1: temporary unemployment, but we've started to see permanent employment rising. 173 00:10:34,240 --> 00:10:37,320 Speaker 1: So I think something fascinating about COVID is that it's 174 00:10:37,320 --> 00:10:41,480 Speaker 1: really accelerated. So many trends that we saw prior to 175 00:10:41,559 --> 00:10:44,720 Speaker 1: the pandemic, they just really accelerated rapidly, and one of 176 00:10:44,760 --> 00:10:47,880 Speaker 1: them has been this difference between temporary and permanent employment. 177 00:10:48,360 --> 00:10:51,320 Speaker 1: And so in a normal recession. This is not a 178 00:10:51,360 --> 00:10:55,640 Speaker 1: normal recession, but in a normal recession, permanent unemployment really 179 00:10:55,679 --> 00:10:59,840 Speaker 1: continues to rise throughout the recession, and it keeps rising 180 00:11:00,000 --> 00:11:04,280 Speaker 1: afterwards because companies may bring back permanent or temporary. Excuse me. 181 00:11:04,320 --> 00:11:07,360 Speaker 1: They may be more likely to kind of hire people 182 00:11:07,400 --> 00:11:11,040 Speaker 1: temporarily temp workers filling the gaps, but they're less likely 183 00:11:11,080 --> 00:11:14,640 Speaker 1: to bring on that permanent employment. So in that regard, 184 00:11:15,000 --> 00:11:18,520 Speaker 1: what we're seeing now is actually playing out more in 185 00:11:18,559 --> 00:11:21,200 Speaker 1: a more normal cycle, and that's troubling. You know, we 186 00:11:21,280 --> 00:11:24,880 Speaker 1: really need to see companies bringing back those permanent jobs 187 00:11:24,880 --> 00:11:28,080 Speaker 1: that offer households job security. That's at the end of 188 00:11:28,120 --> 00:11:31,800 Speaker 1: the day. Over long cycles without stimulus checks, that's what 189 00:11:32,400 --> 00:11:36,760 Speaker 1: really burnishes the household confidence of consumer competence that drives 190 00:11:36,760 --> 00:11:41,839 Speaker 1: our economy. Uh. You know, the thing most troubling to 191 00:11:41,920 --> 00:11:46,040 Speaker 1: me has been people close to retirement or or planning 192 00:11:46,040 --> 00:11:49,400 Speaker 1: to retire now they're not getting any kind of return. 193 00:11:49,520 --> 00:11:51,679 Speaker 1: And you mentioned in your note one of my favorite 194 00:11:51,720 --> 00:11:55,959 Speaker 1: books from childhood, The Giving Tree. It's so depressing when 195 00:11:56,000 --> 00:11:59,000 Speaker 1: it's completely cut down. Um. And you compare this to 196 00:11:59,040 --> 00:12:04,199 Speaker 1: the fixed income market, for what do you see happening 197 00:12:04,280 --> 00:12:08,080 Speaker 1: with the tenure for example next year? You know, so 198 00:12:08,160 --> 00:12:12,079 Speaker 1: many people are looking ahead with really optimistic growth outlooks 199 00:12:12,080 --> 00:12:14,560 Speaker 1: for one, and I think you know a lot of 200 00:12:14,600 --> 00:12:18,760 Speaker 1: the forecasts around four percent are very very reasonable, particularly 201 00:12:18,800 --> 00:12:21,040 Speaker 1: in the second half of the year if we really 202 00:12:21,120 --> 00:12:25,160 Speaker 1: get the distribution of the vaccine effective. But here's the 203 00:12:25,200 --> 00:12:29,120 Speaker 1: real problem, right, long term interest rates are still I think, 204 00:12:29,160 --> 00:12:32,800 Speaker 1: going to be trapped at really very near these historic 205 00:12:32,920 --> 00:12:35,080 Speaker 1: lows because on the other side of it, you're going 206 00:12:35,160 --> 00:12:38,400 Speaker 1: to have continued quantitative easing from the Fed. You're going 207 00:12:38,440 --> 00:12:42,760 Speaker 1: to have continued, I think, uncertainty about the direction of inflation. 208 00:12:43,679 --> 00:12:47,079 Speaker 1: A lot of people calling for this big reflation play 209 00:12:47,200 --> 00:12:50,439 Speaker 1: next year, I think are really getting out over their skis. 210 00:12:50,760 --> 00:12:55,439 Speaker 1: The reality is, although you had you had, you had 211 00:12:55,480 --> 00:12:58,080 Speaker 1: that to some extent now and this is really larah 212 00:12:58,080 --> 00:13:00,960 Speaker 1: what the FED is trying to you and and the 213 00:13:00,960 --> 00:13:03,520 Speaker 1: e c B and everyone else. This is financial repression, 214 00:13:03,640 --> 00:13:08,920 Speaker 1: right because they're pushing even retirees out the risk spectrum. 215 00:13:09,040 --> 00:13:12,320 Speaker 1: So to get back to my mom, you know she 216 00:13:12,360 --> 00:13:16,760 Speaker 1: can't be holding fixed income right now at sixty eight. 217 00:13:16,800 --> 00:13:18,560 Speaker 1: I can't remember exactly how old she has, but you 218 00:13:18,600 --> 00:13:21,520 Speaker 1: know she's got to be in equities. And this is 219 00:13:22,280 --> 00:13:25,320 Speaker 1: you write about the liquid courage. The Feed is enticing 220 00:13:25,320 --> 00:13:27,720 Speaker 1: these people to go out there and at least in 221 00:13:28,640 --> 00:13:32,520 Speaker 1: it's been thankfully a good a good move. Oh absolutely, 222 00:13:32,559 --> 00:13:34,880 Speaker 1: And I think you know the point of of the 223 00:13:34,880 --> 00:13:37,920 Speaker 1: the idea of the giving tree, right, this tree that 224 00:13:38,000 --> 00:13:42,760 Speaker 1: was fixed income that gave us growth and income and diversification. 225 00:13:43,240 --> 00:13:46,040 Speaker 1: You know throughout the decades, back when interest rates were 226 00:13:46,080 --> 00:13:49,840 Speaker 1: seven percent and five percent and even four percent in 227 00:13:49,880 --> 00:13:53,200 Speaker 1: the two thousand's, you know it's two thousand times we 228 00:13:53,280 --> 00:13:56,040 Speaker 1: really saw that fall flat. At the height of growth 229 00:13:56,520 --> 00:13:59,440 Speaker 1: that we had in two thousand seventeen eighteen, rates were 230 00:13:59,720 --> 00:14:02,800 Speaker 1: two and a half percent. Know, now you're less than 231 00:14:02,880 --> 00:14:05,760 Speaker 1: one percent on the tenure the Barclays bag is you know, 232 00:14:05,920 --> 00:14:09,080 Speaker 1: one point to five. At the end of the day, 233 00:14:09,320 --> 00:14:11,120 Speaker 1: you need more. So I think, you know, this is 234 00:14:11,160 --> 00:14:13,920 Speaker 1: an asset class with trillions of dollars still in it 235 00:14:14,760 --> 00:14:18,120 Speaker 1: or related to it. So investors, I think this scheme 236 00:14:18,160 --> 00:14:20,360 Speaker 1: of trying to get more active around income is just 237 00:14:20,400 --> 00:14:23,000 Speaker 1: going to continue trying to push further out the incomes 238 00:14:23,000 --> 00:14:25,760 Speaker 1: by right, lower duration, all those things we're gonna keep 239 00:14:25,800 --> 00:14:28,920 Speaker 1: going in Lara Ram, we will be talking with you, 240 00:14:28,960 --> 00:14:32,480 Speaker 1: no doubt. Have a happy New year, Stay safe, Lower Ram. 241 00:14:32,800 --> 00:14:46,280 Speaker 1: She has FS Investments chief US Economists. Let's see what 242 00:14:46,400 --> 00:14:51,320 Speaker 1: Dr Deborah Fuller, University of Washington School of Medicine, Microbiology professor, 243 00:14:51,680 --> 00:14:54,640 Speaker 1: this is her world. See what she has to say, 244 00:14:54,800 --> 00:14:57,440 Speaker 1: Dr Fuller, nice to have you here with Matt and myself. 245 00:14:57,480 --> 00:14:59,400 Speaker 1: When you look at the headlines that are out there 246 00:14:59,680 --> 00:15:02,000 Speaker 1: on a daily basis, it's kind of hard to keep up. 247 00:15:02,040 --> 00:15:04,560 Speaker 1: It's hard not to be overwhelmed by what's going on 248 00:15:04,640 --> 00:15:07,440 Speaker 1: when it comes to COVID. Uh, what is top of 249 00:15:07,480 --> 00:15:09,840 Speaker 1: mind for you on this Thursday morning, on this New 250 00:15:09,920 --> 00:15:13,800 Speaker 1: Year's Eve. Well, the top of my mind is as 251 00:15:13,880 --> 00:15:16,440 Speaker 1: quickly as the news is changing, so does the virus. 252 00:15:16,880 --> 00:15:19,560 Speaker 1: As we know, this new viral variant that came out 253 00:15:19,800 --> 00:15:23,880 Speaker 1: at increases transmission in the population. That's at the top 254 00:15:23,920 --> 00:15:27,600 Speaker 1: of my mind, because that really does impact things like 255 00:15:27,680 --> 00:15:31,240 Speaker 1: how quickly we can get to her immunity, and of 256 00:15:31,280 --> 00:15:34,800 Speaker 1: course raises a concern about increasing the number of the 257 00:15:34,880 --> 00:15:39,119 Speaker 1: cases in the worldwide and the burden and our hospitals. 258 00:15:40,760 --> 00:15:43,600 Speaker 1: How quickly can we get to her immunity, Doctor Fuller, 259 00:15:43,640 --> 00:15:48,120 Speaker 1: can you give us maybe best case um scenario, worst 260 00:15:48,120 --> 00:15:52,240 Speaker 1: case scenario? Well, as I mentioned, that keeps changing her 261 00:15:52,280 --> 00:15:55,800 Speaker 1: community depends on two different variables. That is the level 262 00:15:55,800 --> 00:15:58,440 Speaker 1: of vaccine efficacy, which is quite high for some of 263 00:15:58,440 --> 00:16:01,480 Speaker 1: these vaccines, and that's a good thing, but it also changes. 264 00:16:01,720 --> 00:16:04,600 Speaker 1: It depends on the transmission rate of the virus which 265 00:16:04,600 --> 00:16:09,800 Speaker 1: ship because of these mutations can undergo changes. So we've 266 00:16:09,840 --> 00:16:14,400 Speaker 1: heard anything ranging from sixty to of the population will 267 00:16:14,440 --> 00:16:17,640 Speaker 1: need to get vaccinated, and how quickly that happens will 268 00:16:17,680 --> 00:16:20,400 Speaker 1: depend on how quickly we can roll out these vaccines 269 00:16:20,640 --> 00:16:24,120 Speaker 1: and get them distributed in in addition to getting new 270 00:16:24,120 --> 00:16:27,800 Speaker 1: ones license like we're seeing this this uh aster Zenica 271 00:16:28,080 --> 00:16:31,560 Speaker 1: just recently just got their vaccine license in the UK. 272 00:16:33,840 --> 00:16:36,760 Speaker 1: One of the other things that really worries me as 273 00:16:36,800 --> 00:16:39,920 Speaker 1: someone who has had line dosease like four times, what 274 00:16:40,000 --> 00:16:41,880 Speaker 1: are the long term effects or what do we know 275 00:16:42,040 --> 00:16:46,320 Speaker 1: now about the long term effects of this disease. Well, 276 00:16:46,320 --> 00:16:49,960 Speaker 1: there's uh, there's uh two different, two different things there 277 00:16:49,960 --> 00:16:52,480 Speaker 1: in terms of long terms effects of the disease as 278 00:16:52,520 --> 00:16:54,560 Speaker 1: something we're going to have to be studying for quite 279 00:16:54,560 --> 00:16:57,120 Speaker 1: some time. But in terms of long term effects of 280 00:16:57,200 --> 00:17:00,680 Speaker 1: the vaccine, that's a lot of new data is starting 281 00:17:00,680 --> 00:17:03,800 Speaker 1: to roll out that we're seeing um as we study 282 00:17:03,840 --> 00:17:07,680 Speaker 1: the vaccine further, that immunity seems to be last seeing 283 00:17:08,160 --> 00:17:11,359 Speaker 1: potentially up to six months after immunization. That's as far 284 00:17:11,400 --> 00:17:13,359 Speaker 1: as we've gotten so far. Hopefully it will last at 285 00:17:13,400 --> 00:17:16,400 Speaker 1: least a year or more, so that when you get vaccinated, 286 00:17:16,480 --> 00:17:20,800 Speaker 1: you can at least anticipate being immune to this virus 287 00:17:20,880 --> 00:17:24,200 Speaker 1: for for ideally a year or more. Right because we 288 00:17:24,320 --> 00:17:27,080 Speaker 1: need that because it's going to take, as we know 289 00:17:27,320 --> 00:17:29,760 Speaker 1: Dr Fuller, a long time for everyone to get vaccine, 290 00:17:29,800 --> 00:17:32,159 Speaker 1: and right now we heard from president like Joe Biden, 291 00:17:32,240 --> 00:17:34,120 Speaker 1: he's worried that it could take years at the current 292 00:17:34,160 --> 00:17:37,040 Speaker 1: pace that we are, So we need that. Having said that, 293 00:17:37,080 --> 00:17:38,600 Speaker 1: I want to go back to the variant because that's 294 00:17:38,600 --> 00:17:40,840 Speaker 1: the one thing that just kind of unnerves me every morning. 295 00:17:41,040 --> 00:17:44,159 Speaker 1: Could we get to a variant that doesn't respond to 296 00:17:44,200 --> 00:17:49,040 Speaker 1: the current rounds of vaccines. Well, if a virus can, 297 00:17:49,040 --> 00:17:51,120 Speaker 1: it will That's something I learned a long time ago 298 00:17:51,160 --> 00:17:54,480 Speaker 1: when I was studying virology. Uh, it is quite possible 299 00:17:54,600 --> 00:17:58,720 Speaker 1: it could attain mutations to be resistant to our vaccines, 300 00:17:58,800 --> 00:18:01,480 Speaker 1: but we don't anticipate that would be easy for the 301 00:18:01,560 --> 00:18:05,200 Speaker 1: virus to do because the vaccines were designed with this 302 00:18:05,400 --> 00:18:08,760 Speaker 1: in mind, with the fact that viruses do undergo mutations, 303 00:18:08,880 --> 00:18:11,159 Speaker 1: and so it will be very difficult for this virus 304 00:18:11,240 --> 00:18:14,399 Speaker 1: to get the number and the right types of mutations 305 00:18:14,440 --> 00:18:17,920 Speaker 1: to be able to invade vaccine immunity with that set 306 00:18:18,040 --> 00:18:20,159 Speaker 1: is possible. And one of the good things about the 307 00:18:20,200 --> 00:18:23,480 Speaker 1: types of vaccines were developing here, the RNA vaccines and 308 00:18:23,520 --> 00:18:27,639 Speaker 1: now these add no virus based vaccines are very quick 309 00:18:27,720 --> 00:18:31,120 Speaker 1: to update if if needed, if a new variant comes 310 00:18:31,119 --> 00:18:34,960 Speaker 1: out that is resistant to our vaccine induced community. So 311 00:18:35,000 --> 00:18:36,719 Speaker 1: I have to say, there's a story. Um. We were 312 00:18:36,760 --> 00:18:38,600 Speaker 1: talking about it in the break before we got going 313 00:18:38,680 --> 00:18:42,119 Speaker 1: you um, me and Matt, and it's saying it's by 314 00:18:42,160 --> 00:18:44,520 Speaker 1: our Bloomberg News team China, making it harder to solve 315 00:18:44,520 --> 00:18:47,879 Speaker 1: the mystery of where COVID began. How important is it 316 00:18:47,920 --> 00:18:53,560 Speaker 1: that we understand where this COVID nineteen virus specifically came from, 317 00:18:53,600 --> 00:18:55,639 Speaker 1: to make sure that we truly understand it and can 318 00:18:55,720 --> 00:18:58,400 Speaker 1: kind of plan for others to come because others will 319 00:18:58,440 --> 00:19:03,720 Speaker 1: come right at absolutely UH. This is something about viruses. 320 00:19:03,800 --> 00:19:07,040 Speaker 1: They they do transmit. One of the most common ways 321 00:19:07,040 --> 00:19:11,000 Speaker 1: that pandemics will start is a transmission from UH an 322 00:19:11,040 --> 00:19:16,680 Speaker 1: animal reservoir, from particular animal into humans. And understanding how 323 00:19:16,720 --> 00:19:20,520 Speaker 1: that happened that something that scientists will continue to studying. 324 00:19:20,640 --> 00:19:23,880 Speaker 1: We're still picking at that, improbing at it because it's 325 00:19:23,960 --> 00:19:27,080 Speaker 1: so important UH to learn about that to be able 326 00:19:27,160 --> 00:19:31,119 Speaker 1: to hopefully predict the next one and stop it before 327 00:19:31,119 --> 00:19:32,920 Speaker 1: it gets to this point. Dr Fuller, one of the 328 00:19:32,920 --> 00:19:35,840 Speaker 1: conversations I'm having with everyone in my world is, Listen, 329 00:19:35,920 --> 00:19:38,119 Speaker 1: I'm just exhausted by this year. I know I have 330 00:19:38,200 --> 00:19:40,320 Speaker 1: to be good because we're we can kind of see 331 00:19:40,320 --> 00:19:42,600 Speaker 1: the finish line. Having said that, it's still going to 332 00:19:42,640 --> 00:19:46,120 Speaker 1: be probably a couple of rough months in terms of 333 00:19:46,480 --> 00:19:49,120 Speaker 1: our economy still being shut down. What do we need 334 00:19:49,160 --> 00:19:51,960 Speaker 1: to remember as we move forward, more people get the vaccine, 335 00:19:52,440 --> 00:19:55,359 Speaker 1: those basic things like social distancing, masking, that's gonna be 336 00:19:55,400 --> 00:19:58,040 Speaker 1: with us for a while. That is going to be 337 00:19:58,080 --> 00:20:01,119 Speaker 1: with us for a while. But hopefully with these vaccines 338 00:20:01,160 --> 00:20:04,679 Speaker 1: coming out, we're going to start to progressively see an impact, 339 00:20:04,800 --> 00:20:08,800 Speaker 1: hopefully and reducing the number of hospitalizations. We might see 340 00:20:08,840 --> 00:20:12,680 Speaker 1: that earlier on, even as it takes time to distribute 341 00:20:12,720 --> 00:20:16,080 Speaker 1: these vaccines and get that into enough people, and during 342 00:20:16,119 --> 00:20:18,760 Speaker 1: that time we all have to work together. This is 343 00:20:18,920 --> 00:20:22,040 Speaker 1: now in the hands of the people of the population, 344 00:20:22,520 --> 00:20:24,399 Speaker 1: each and every one of us. We need to do 345 00:20:24,480 --> 00:20:28,359 Speaker 1: our part in getting vaccinated and and uh keeping to 346 00:20:28,520 --> 00:20:33,000 Speaker 1: the practices, the social discipline and the masking UH to 347 00:20:33,000 --> 00:20:35,359 Speaker 1: to get this under control. Yeah, if I think about 348 00:20:35,359 --> 00:20:37,359 Speaker 1: COVID and this year. I think one word that comes 349 00:20:37,359 --> 00:20:39,440 Speaker 1: to mind over and over again is all about community. 350 00:20:39,480 --> 00:20:40,960 Speaker 1: It's not you know, you've really got to think about 351 00:20:41,000 --> 00:20:44,159 Speaker 1: those around you, your community in terms of getting to 352 00:20:44,240 --> 00:20:47,160 Speaker 1: a post COVID world. Dr Fuller, thank you so much. 353 00:20:47,200 --> 00:20:49,760 Speaker 1: Have a good new year. Dr Deborah Fuller, University of 354 00:20:49,760 --> 00:21:02,679 Speaker 1: Washington School of Medicine, Microbiology professor, joining us now to 355 00:21:02,720 --> 00:21:04,840 Speaker 1: talk about all of this in the future relationship with 356 00:21:04,920 --> 00:21:08,359 Speaker 1: the US and the UK's Karen Piers, she's UK Ambassador 357 00:21:08,359 --> 00:21:11,600 Speaker 1: to the US. Ambassador Peers, thank you so much for 358 00:21:11,640 --> 00:21:13,880 Speaker 1: giving us a bit of your precious time, Ambassador. When 359 00:21:13,880 --> 00:21:18,320 Speaker 1: you look at what comes to with the President Trump 360 00:21:18,400 --> 00:21:20,679 Speaker 1: now out of the White House, does it mean that 361 00:21:20,760 --> 00:21:24,040 Speaker 1: it's less likely for the UK to to get a 362 00:21:24,080 --> 00:21:26,400 Speaker 1: quick deal with the US. Well, I don't want to 363 00:21:26,480 --> 00:21:31,840 Speaker 1: be presumptuous about the Biden administration's policies and priorities, but 364 00:21:32,000 --> 00:21:34,639 Speaker 1: we believe this deal can be done. It can be 365 00:21:34,680 --> 00:21:38,320 Speaker 1: done in twenty twenty one. That said, we don't want 366 00:21:38,320 --> 00:21:41,080 Speaker 1: to set a hard deadline. Much more important to get 367 00:21:41,119 --> 00:21:45,080 Speaker 1: a good deal with with lots of good content. It is. 368 00:21:45,160 --> 00:21:47,240 Speaker 1: It is a good deal. It's a bit spoke deal. 369 00:21:47,400 --> 00:21:51,600 Speaker 1: It wouldn't take too much bandwidth to get it through Congress, 370 00:21:52,119 --> 00:21:55,080 Speaker 1: and we'd be delighted to work with the Biden administration 371 00:21:55,560 --> 00:21:59,200 Speaker 1: if there were particular angles. Some people have mentioned labor, 372 00:21:59,480 --> 00:22:02,399 Speaker 1: some people Paul have mentioned climate that they would like 373 00:22:02,520 --> 00:22:05,959 Speaker 1: to see included. But it is an interesting deal that's 374 00:22:05,960 --> 00:22:09,680 Speaker 1: for the first time. I think we'll have digital commerce 375 00:22:10,320 --> 00:22:14,040 Speaker 1: as as part of its its content, and that's given 376 00:22:14,040 --> 00:22:17,160 Speaker 1: where we are. What would be the UK priorities for 377 00:22:17,200 --> 00:22:19,359 Speaker 1: a US deal, for a deal with the United States 378 00:22:19,400 --> 00:22:23,240 Speaker 1: of America on trade. Well, as I say, we've put 379 00:22:23,280 --> 00:22:27,200 Speaker 1: a lot of effort into what making this deal concentrate 380 00:22:27,240 --> 00:22:30,680 Speaker 1: on digital commerce, that's the way of the future. We've 381 00:22:30,720 --> 00:22:33,400 Speaker 1: also put a lot of effort into small and medium 382 00:22:33,400 --> 00:22:37,680 Speaker 1: sized enterprises. Both our countries depend very much on that 383 00:22:37,720 --> 00:22:41,119 Speaker 1: type of business. But I think that sector is also 384 00:22:41,240 --> 00:22:45,680 Speaker 1: pretty crucial for COVID recovery, and another reason to do 385 00:22:45,720 --> 00:22:48,600 Speaker 1: the deal would in fact be that COVID recovery. We 386 00:22:48,640 --> 00:22:52,640 Speaker 1: want to send an early signal in one of our 387 00:22:52,680 --> 00:22:56,960 Speaker 1: confidence in economic recovery across the globe and particularly in 388 00:22:56,960 --> 00:22:59,840 Speaker 1: the UK and the US. Have you been talking to 389 00:23:00,000 --> 00:23:04,600 Speaker 1: a Biden team already, Um, not directly. The transition team 390 00:23:04,680 --> 00:23:08,480 Speaker 1: have a dictum of one president at a time. They've 391 00:23:08,480 --> 00:23:10,280 Speaker 1: made it very clear they don't want to talk to 392 00:23:10,320 --> 00:23:13,480 Speaker 1: foreign governments, and of course we respect that. And for 393 00:23:13,520 --> 00:23:17,560 Speaker 1: all the Americans who have been nominated for cabinet posts, 394 00:23:17,600 --> 00:23:20,440 Speaker 1: they of course need Senate confirmation and so we would 395 00:23:20,480 --> 00:23:22,600 Speaker 1: not be able to to talk to them, and that's fine. 396 00:23:23,200 --> 00:23:28,440 Speaker 1: That's a standard way that American administrations operate. Instead, We've 397 00:23:28,440 --> 00:23:30,720 Speaker 1: talked to a lot of people around the Biden team, 398 00:23:31,200 --> 00:23:33,200 Speaker 1: and we talk a lot to people on the Hill 399 00:23:33,800 --> 00:23:36,280 Speaker 1: of both parties, and we do find a lot. I 400 00:23:36,320 --> 00:23:38,679 Speaker 1: find as I go on the hill, I get a 401 00:23:38,720 --> 00:23:42,040 Speaker 1: lot of support for a UK US free trade deal. 402 00:23:42,359 --> 00:23:45,160 Speaker 1: And also when I'm talking to governors around the country, 403 00:23:45,680 --> 00:23:49,720 Speaker 1: there's a lot of interest. Thirty three percent of I 404 00:23:49,760 --> 00:23:52,520 Speaker 1: beg your pardon, thirty three out of the fifty states 405 00:23:53,119 --> 00:23:57,320 Speaker 1: have exports to the UK in their top five export markets. 406 00:23:57,600 --> 00:24:00,320 Speaker 1: So there's a lot of interest in a deal with UK, 407 00:24:01,400 --> 00:24:03,520 Speaker 1: that's right. I don't believe the Prime Minister Johnson has 408 00:24:03,520 --> 00:24:06,040 Speaker 1: ever met Joe Biden. Are there any plans for an 409 00:24:06,040 --> 00:24:10,200 Speaker 1: early meeting? Um? I don't think they have met, though 410 00:24:10,359 --> 00:24:14,439 Speaker 1: the Prime Minister has met a number of Democratic UH 411 00:24:14,640 --> 00:24:17,240 Speaker 1: contacts very close to the Biden team. Part of the 412 00:24:17,280 --> 00:24:21,239 Speaker 1: Biden team, and I think that includes from memory, the 413 00:24:21,280 --> 00:24:25,920 Speaker 1: incoming Secretary of State Tony Lincoln if he gets Senate confirmation. 414 00:24:26,240 --> 00:24:28,920 Speaker 1: But the Prime Minister and President Elect Biden did talk 415 00:24:28,960 --> 00:24:33,760 Speaker 1: on the phone very soon after President Elect Biden declared victory. 416 00:24:34,359 --> 00:24:36,920 Speaker 1: I think the Prime Minister was the first European leader 417 00:24:37,440 --> 00:24:39,600 Speaker 1: to speak to the President elect. They had a very 418 00:24:39,640 --> 00:24:43,240 Speaker 1: warm conversation. They talked about a great many things, including 419 00:24:43,800 --> 00:24:46,159 Speaker 1: the free trade deal. They talked about Northern Ireland and 420 00:24:46,200 --> 00:24:50,960 Speaker 1: the importance of upholding the Good Friday Agreement in Northern Ireland, 421 00:24:51,400 --> 00:24:54,840 Speaker 1: and they looked forward to working together on climate in 422 00:24:54,920 --> 00:24:58,640 Speaker 1: particular and on COVID recovery. And the UK will take 423 00:24:58,680 --> 00:25:02,760 Speaker 1: the G seven chair from the Americans in January, and 424 00:25:02,840 --> 00:25:05,080 Speaker 1: COVID recovery is going to be at the heart of 425 00:25:05,119 --> 00:25:07,240 Speaker 1: what we want to do and we think that will 426 00:25:07,280 --> 00:25:11,399 Speaker 1: chime well with President elects Biden's priorities. I don't know 427 00:25:11,440 --> 00:25:13,479 Speaker 1: if you were on that car between the two leaders, 428 00:25:13,520 --> 00:25:17,160 Speaker 1: but what was the chemistry. Like I wasn't on the call. 429 00:25:17,280 --> 00:25:21,359 Speaker 1: This was handled directly between the two offices, but I 430 00:25:21,400 --> 00:25:23,560 Speaker 1: have had a read out. I have talked to the 431 00:25:23,600 --> 00:25:26,240 Speaker 1: Prime Minister. I think the chemistry was was fine. Both 432 00:25:26,280 --> 00:25:30,560 Speaker 1: of them are very affable people. They know the importance 433 00:25:30,600 --> 00:25:34,879 Speaker 1: of personal relationships. They have a lot in common in 434 00:25:34,960 --> 00:25:38,160 Speaker 1: terms of what they want to achieve in twenty one, 435 00:25:38,600 --> 00:25:42,120 Speaker 1: so I think the atmospherics were warm, they were friendly, 436 00:25:42,359 --> 00:25:44,720 Speaker 1: and both of them agreed that there's a lot to do. 437 00:25:45,320 --> 00:25:47,920 Speaker 1: We can do that together. Very important that we work 438 00:25:48,000 --> 00:25:52,320 Speaker 1: closely together on climate. Very welcome that President elect Biden 439 00:25:52,359 --> 00:25:54,720 Speaker 1: has said he wants to bring America back into the 440 00:25:54,760 --> 00:25:57,520 Speaker 1: Paris Agreement, and that's it appears. What what do you 441 00:25:57,560 --> 00:26:01,600 Speaker 1: see as the biggest or or you know, the biggest 442 00:26:01,680 --> 00:26:06,520 Speaker 1: challenge for the UK US special relationship. I think the 443 00:26:06,520 --> 00:26:10,520 Speaker 1: biggest challenge, to be honest, is making sure that we 444 00:26:10,720 --> 00:26:15,520 Speaker 1: see the new challenges coming down the track in one 445 00:26:15,520 --> 00:26:18,360 Speaker 1: and beyond for for what they are. And I think 446 00:26:18,359 --> 00:26:22,280 Speaker 1: particularly of technology in this respect, I think we're now 447 00:26:23,119 --> 00:26:28,159 Speaker 1: standing on the threshold of of a major transformation in technology. 448 00:26:28,240 --> 00:26:32,160 Speaker 1: I personally would liken it to the effect that nuclear 449 00:26:32,760 --> 00:26:35,600 Speaker 1: had in the nineteen fifties, and I think we're really 450 00:26:35,640 --> 00:26:38,119 Speaker 1: going to have to get to grips with that using 451 00:26:38,160 --> 00:26:43,960 Speaker 1: all our innovation and science cooperation charting away to make 452 00:26:44,000 --> 00:26:48,080 Speaker 1: sure that as we develop this new technology, it develops 453 00:26:48,080 --> 00:26:52,720 Speaker 1: onlines that do justice to open societies and open markets. 454 00:26:53,200 --> 00:26:56,480 Speaker 1: We don't want, for example, to wake up one day 455 00:26:56,520 --> 00:27:00,440 Speaker 1: and find that there is Chinese standards on things AI 456 00:27:01,119 --> 00:27:04,720 Speaker 1: and cyber that will be too authoritarian. We want to 457 00:27:04,720 --> 00:27:08,000 Speaker 1: have an open model. And I think the second, the 458 00:27:08,080 --> 00:27:12,399 Speaker 1: second big challenge is the strategic competition from Rasia and China, 459 00:27:12,480 --> 00:27:16,320 Speaker 1: particularly China. We need to get that right again so 460 00:27:16,480 --> 00:27:20,480 Speaker 1: that it's open societies that are seen to thrive and 461 00:27:20,520 --> 00:27:23,240 Speaker 1: recover from the COVID pandemic. And do you think the 462 00:27:23,320 --> 00:27:25,440 Speaker 1: UK and the US will actually work hand in hand 463 00:27:25,840 --> 00:27:29,400 Speaker 1: to tackle some of the challenges that you just laid out, Oh, definitely. 464 00:27:29,440 --> 00:27:34,120 Speaker 1: I mean there's a very deep, profound, successful relationship between 465 00:27:34,160 --> 00:27:38,239 Speaker 1: the UK and US that has endured since the end 466 00:27:38,280 --> 00:27:40,360 Speaker 1: of the Second World War and in fact before that, 467 00:27:40,960 --> 00:27:45,280 Speaker 1: and it doesn't depend on individual leaders on either side. 468 00:27:45,720 --> 00:27:49,000 Speaker 1: And one of the layers of that bedrock, if you like, 469 00:27:49,160 --> 00:27:53,440 Speaker 1: is science. It's innovation alongside the defense and military cooperation. 470 00:27:54,080 --> 00:27:58,000 Speaker 1: But this is not an exclusive enterprise. There will be 471 00:27:58,040 --> 00:28:00,520 Speaker 1: a lot of countries we want to work with the 472 00:28:00,560 --> 00:28:03,159 Speaker 1: great democracies of the world. We want to work with 473 00:28:03,200 --> 00:28:07,760 Speaker 1: them to ensure that open societies recover from the pandemic 474 00:28:08,280 --> 00:28:10,240 Speaker 1: and can go on to tackle some of these really 475 00:28:10,240 --> 00:28:13,359 Speaker 1: big challenges. And that's where maybe just as a final question, 476 00:28:13,400 --> 00:28:17,040 Speaker 1: given we're, you know, towards the end um just just 477 00:28:17,280 --> 00:28:20,720 Speaker 1: twenty days really of the Trump administration, what do you 478 00:28:20,760 --> 00:28:26,240 Speaker 1: think President transgradest achievement has been. UM. I think the 479 00:28:26,400 --> 00:28:31,879 Speaker 1: normalization of relations with Israel from some Arab countries. I 480 00:28:31,880 --> 00:28:35,679 Speaker 1: think that will prove to be a very important step 481 00:28:35,720 --> 00:28:38,640 Speaker 1: forward in the Middle East. It's a bit hard at 482 00:28:38,640 --> 00:28:42,320 Speaker 1: the moment to say exactly how events will unfold, but 483 00:28:42,400 --> 00:28:45,400 Speaker 1: I think it's a very important achievement and we were 484 00:28:45,440 --> 00:28:49,360 Speaker 1: happy to salute it at the time. It provides the 485 00:28:49,400 --> 00:28:53,160 Speaker 1: basis on which to build try and bring peace and 486 00:28:53,200 --> 00:28:57,760 Speaker 1: stability to the Middle East. UM. I think before COVID struck, 487 00:28:58,480 --> 00:29:03,240 Speaker 1: President Trump president get over a thriving economy. That's also 488 00:29:03,840 --> 00:29:07,640 Speaker 1: something to look back on and think about how America 489 00:29:08,400 --> 00:29:13,160 Speaker 1: can restore at that level of economic dynamism after the pandemic. 490 00:29:13,840 --> 00:29:16,320 Speaker 1: And I think what President Trump did on the opioid 491 00:29:16,920 --> 00:29:20,800 Speaker 1: crisis was also very commendable. All Right, Thank you so 492 00:29:20,880 --> 00:29:24,320 Speaker 1: much for your time today, Ambassador Karen Pierce, UK Ambassador 493 00:29:24,640 --> 00:29:27,840 Speaker 1: to the US, joining us to talk about a number 494 00:29:27,840 --> 00:29:32,080 Speaker 1: of things, Brexit and the US and UK relationship forward. 495 00:29:33,200 --> 00:29:37,440 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 496 00:29:37,480 --> 00:29:42,800 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 497 00:29:42,840 --> 00:29:47,080 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before 498 00:29:47,120 --> 00:29:51,320 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.