WEBVTT - Surveillance: Virus Causing Oil Shock, Says Goldman's Currie 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.639 Bloomberg dot Com, and of course on the Bloomberg. With 0:00:27.760 --> 0:00:31.280 us in London is David folkers Landau of Deutsche Bank, 0:00:31.400 --> 0:00:34.320 not only leading the research team at Deutsche Bank, but 0:00:34.360 --> 0:00:38.560 with his important research over the decades on flows of capital. David, 0:00:38.600 --> 0:00:42.000 you have been clear and straightforward on negative interest rates. 0:00:42.080 --> 0:00:45.400 We just heard Christine Lagarde speak of the lower bound 0:00:45.440 --> 0:00:48.479 that we're at. Give us an update on what negative 0:00:48.479 --> 0:00:54.959 interest rates are doing to continental Europe. Well, firstgot has 0:00:55.000 --> 0:00:57.120 been dealt a bad hand in the sense that she 0:00:57.200 --> 0:00:59.800 stuck with this situation and she inherited, and the question 0:00:59.880 --> 0:01:01.840 is how to get out of it. I believe there 0:01:01.920 --> 0:01:05.880 is a strong consensus at the political level developing that 0:01:06.000 --> 0:01:09.839 negative interest rates are to to quite a large extent, 0:01:09.920 --> 0:01:15.560 responsible for discontent within the broader population for a feeling 0:01:15.640 --> 0:01:20.280 that we're no longer we meaning central banks, and are 0:01:20.319 --> 0:01:23.040 no longer in control of of what's going on of 0:01:23.080 --> 0:01:26.319 monetary policy. Anybody looking saying that I put money in 0:01:26.360 --> 0:01:29.199 my savings account and I lose fifty BIPs, says to himself, 0:01:29.240 --> 0:01:31.600 something is fundamentally wrong here. And when I when I 0:01:31.600 --> 0:01:33.840 talk to my German relatives and my mother said, what 0:01:33.920 --> 0:01:36.520 what are you guys doing? You can't even get this right? 0:01:36.560 --> 0:01:38.479 How can we trust you? So I think this does 0:01:38.720 --> 0:01:40.959 torculate down to that level and then back up to 0:01:41.000 --> 0:01:45.040 the political and creating pressure. So I believe that this 0:01:45.360 --> 0:01:49.000 negative interest rates from here on out not the policy 0:01:49.040 --> 0:01:51.240 tool of choice. The question is how to get out 0:01:51.240 --> 0:01:53.000 of it now. You can't all of a sudden have 0:01:53.120 --> 0:01:55.360 a have a flipper switch and go back to zero. 0:01:55.880 --> 0:01:59.160 But our strong forecast and our sort of what we 0:01:59.240 --> 0:02:03.040 hear from very angles in Vayos segments is that there 0:02:03.360 --> 0:02:05.920 that the searches for a way out rather than thinking 0:02:05.960 --> 0:02:08.679 of it as a positive tool. Same same when you 0:02:08.720 --> 0:02:13.160 look at them. The FEDS review of its monetary policy 0:02:13.360 --> 0:02:15.280 tools and instruments to be going on not for more 0:02:15.280 --> 0:02:18.040 than a year. Again, there is there's a very strong 0:02:18.240 --> 0:02:21.720 dislike for negative interest rates because of the secondary impact 0:02:21.800 --> 0:02:24.640 on the financial sector, on the general feeling in the 0:02:24.639 --> 0:02:27.640 population that something is wrong. So if we have today 0:02:27.639 --> 0:02:33.400 on the Bloomberg an official of MS Miracle's party associating 0:02:33.400 --> 0:02:37.240 the far right in Germany with Nazis. This is loaded language. 0:02:37.360 --> 0:02:42.679 Dr folkers land out. Can you equate this economic experiment, 0:02:42.800 --> 0:02:46.480 even if well intentioned, with the type of GDP and 0:02:46.560 --> 0:02:49.960 economic growth of Europe over to us? You just said 0:02:50.080 --> 0:02:54.240 people have lost their bargain with institutions is personified by 0:02:54.320 --> 0:02:58.800 negative interest rates. If the institution's broken the relationship with 0:02:58.919 --> 0:03:03.480 the people. It's tempting to be attempting to say yes, 0:03:03.480 --> 0:03:04.960 But that wouldn't be quite right. I mean, there are 0:03:04.960 --> 0:03:07.840 many other factors that are involved here. There is a 0:03:07.919 --> 0:03:11.080 general breakdown of the center right in the center left 0:03:11.080 --> 0:03:14.639 dominance of European politics. You see this in Spain with Fox, 0:03:14.680 --> 0:03:17.560 you see this in Italy with the League, and you 0:03:17.600 --> 0:03:19.280 see this in Germany with the a f D. And 0:03:19.280 --> 0:03:22.760 I think I think that there we have a real 0:03:22.880 --> 0:03:25.200 problem in the sense that we have any We have 0:03:25.240 --> 0:03:28.359 economies that are performing reasonably well and nowhere near large 0:03:28.400 --> 0:03:32.120 unemployment numbers, in fact almost full employment. Yet there is 0:03:32.160 --> 0:03:35.040 there's discontent that pushes people away from the center into 0:03:35.120 --> 0:03:37.120 the fringes. And I think this is a This is 0:03:37.160 --> 0:03:41.120 probably the most serious political problem of our generation. There's 0:03:41.160 --> 0:03:44.560 no question that it does in fact policy both macro 0:03:44.760 --> 0:03:47.960 and both monetary and fiscal, and as it should. Indeed, 0:03:48.720 --> 0:03:50.920 this is too important to ignore. So Anglo Marco also 0:03:51.000 --> 0:03:53.720 called her party's decision to align with this far right 0:03:53.800 --> 0:03:58.240 party unforgivable and she quote said it is a bad 0:03:58.320 --> 0:04:01.440 day for democracy. Now she's talking during visit to South Africa. 0:04:01.960 --> 0:04:07.640 Can this be reversed. It's difficult to reverse it by feared, 0:04:07.720 --> 0:04:10.040 but it can be reversed by lots of pressure. Obviously, 0:04:10.200 --> 0:04:12.280 I think to put this in perspective, you have to 0:04:12.320 --> 0:04:15.400 recall this is the first time since the Roma Republic 0:04:15.760 --> 0:04:22.920 that far right, radical far right party helped forming a government. 0:04:22.920 --> 0:04:25.480 They're not in the government, they're just elect the government 0:04:25.839 --> 0:04:29.440 left the state premier. Now that means they're going to 0:04:29.520 --> 0:04:31.240 have not much control over it, but a little bit 0:04:31.240 --> 0:04:34.080 of control. But but it's very symbolic, particularly in Germany, 0:04:34.080 --> 0:04:36.720 and I think it's it's probably underestimated in the international 0:04:36.720 --> 0:04:39.040 process to how important is this for the German psyche. 0:04:39.279 --> 0:04:43.680 So it's definitely an earthquake political event inside Germany, one 0:04:43.720 --> 0:04:46.720 that has to be taken seriously, but will change policies. Right, 0:04:46.760 --> 0:04:49.120 So you look at this wrangling marcle you do you know, 0:04:49.279 --> 0:04:52.560 without going into whether this changes the head of the CDU, 0:04:52.720 --> 0:04:55.919 which it could, does it change how you speak to 0:04:55.920 --> 0:04:58.920 your citizens and economic policies in place. There's no doubt 0:04:59.000 --> 0:05:01.279 that it will. There's no doubt that it will lead 0:05:01.320 --> 0:05:05.440 to a soul searching of why haven't we brought the 0:05:05.440 --> 0:05:08.720 rest of the country with us into the into this 0:05:08.839 --> 0:05:11.200 economic boom that it almost this and why do we 0:05:11.240 --> 0:05:14.080 have this discontent? And this will have an impact on 0:05:14.400 --> 0:05:17.599 fiscal policy within Germany, no question. There will be more 0:05:18.360 --> 0:05:23.080 inclination to spend on infrastructure, and it also may on 0:05:23.080 --> 0:05:24.920 the European side or there it's a little more difficult 0:05:24.960 --> 0:05:27.279 to implement that. But so from that point of view, 0:05:27.360 --> 0:05:29.120 and the same of the negative interest rates, That's why 0:05:29.120 --> 0:05:31.840 I think negative interest rates are thing of the past. 0:05:31.839 --> 0:05:33.960 We try to get out of it. Fiscal policy will 0:05:34.000 --> 0:05:38.320 be expansionary and there this is going to impact policy, yes, 0:05:38.360 --> 0:05:43.000 but but but more than that, um it is what 0:05:43.120 --> 0:05:47.680 it has done. It has legitimized the the role of 0:05:48.839 --> 0:05:53.800 really far right party in German politics and and and 0:05:53.800 --> 0:05:56.479 it's going to have international repercussions in terms of reputation 0:05:56.520 --> 0:05:59.160 and so so I think the quicker we can reverse 0:05:59.360 --> 0:06:02.000 is the better, but you can't just MECCA does not 0:06:02.120 --> 0:06:04.560 have the administrated power to reverse it, not not as 0:06:04.600 --> 0:06:06.839 a KK This is something that has to get done 0:06:06.839 --> 0:06:11.520 by lots of pressureent and and I presume that the 0:06:11.600 --> 0:06:14.800 three parties coordinated this before and they thought about all 0:06:14.800 --> 0:06:18.159 the consequences the FDPA and it city you and that 0:06:18.200 --> 0:06:19.960 it is not going to be so easy to reverse. 0:06:20.440 --> 0:06:22.080 I want to again and bring this up to date. 0:06:22.120 --> 0:06:26.119 Our Patrick Donahue and Arn Adults reporting Chancellor Miracle's party 0:06:26.200 --> 0:06:29.640 lines up with German far right in shock vote and 0:06:29.680 --> 0:06:32.760 it's been extraordinary to see the language. David, what is 0:06:32.800 --> 0:06:36.000 the sched list for institutions? You are one of the 0:06:36.040 --> 0:06:40.080 advantage of the elite of Germany. What is the institutional 0:06:40.160 --> 0:06:46.160 mandate to turn Germany towards a more moderate path? Well, 0:06:46.200 --> 0:06:50.080 I think it's important that that institutions, that the firm 0:06:50.240 --> 0:06:52.680 stick to their primary business and in our case that 0:06:52.800 --> 0:06:55.760 is intermediating between savers and investors. And we're not a 0:06:55.760 --> 0:06:58.800 political actor, but we have strong views about this. There's 0:06:58.839 --> 0:07:02.960 no doubt that uh, this is bad for everybody concerned, 0:07:03.279 --> 0:07:07.480 and we play we prepared. There are there are political 0:07:07.520 --> 0:07:10.160 issues that that where we can actually do something. This 0:07:10.240 --> 0:07:11.960 is less so. But we can do a lot about 0:07:12.360 --> 0:07:16.760 for instance, about sustainability uh and and we have done that. 0:07:17.680 --> 0:07:20.200 But on this issue, all we can do is voices 0:07:20.280 --> 0:07:22.160 to those that are critical, and we are and our 0:07:22.240 --> 0:07:25.440 CEO has done that already. So I think we speak 0:07:25.440 --> 0:07:28.640 out strongly. And if you strom me about this, extraordinary comments. 0:07:28.960 --> 0:07:44.320 David Fulkers, Lando Is with joutsche Bank. Let's springing, Jeff Calry, 0:07:44.320 --> 0:07:48.280 Showy Golvin Sacks, Global head of Commodities Research, Donna Soul Jeff, 0:07:48.440 --> 0:07:52.600 what is the cult? Well, when we look at the 0:07:52.600 --> 0:07:57.600 current coronavirus and pandemic, we'd say the biggest impact is 0:07:57.640 --> 0:08:01.280 coming from the quarantine. You're shutting down fact, shutting down school, 0:08:01.360 --> 0:08:05.560 shutting down transportation to and fro China. Obviously oil sets 0:08:05.600 --> 0:08:07.720 at the center of us because it's both the activity 0:08:07.800 --> 0:08:11.320 inside China as well as the travel um in and 0:08:11.360 --> 0:08:13.680 out of China. UM. The question is how long will 0:08:13.680 --> 0:08:15.680 this go? I think most people are budgeting sometime to 0:08:15.720 --> 0:08:18.440 at least early March. UM. After that, I would tend 0:08:18.480 --> 0:08:20.120 to think you get a rebound, and I think you'll 0:08:20.160 --> 0:08:24.080 get stimulus that's focused on the consumer to boost consumer 0:08:24.120 --> 0:08:26.360 confidence UM. So you get much more of a V 0:08:26.560 --> 0:08:29.960 shaped check type recovery coming out of it. UM. And 0:08:30.200 --> 0:08:32.800 so the question is what does this due to activity 0:08:32.920 --> 0:08:34.840 in the second half of the year versus today. We 0:08:34.880 --> 0:08:38.319 think all the weakness is up in the near term 0:08:38.320 --> 0:08:41.160 with oil, and sometimes it's two x the economic weakness 0:08:41.240 --> 0:08:44.680 because you're shutting down all that those interconnectivities. UM. But 0:08:44.880 --> 0:08:47.880 when you look let's say out four months, five months out, 0:08:47.920 --> 0:08:49.800 we'd expect to rebound right back up to the same 0:08:49.880 --> 0:08:52.040 levels that we were at before in re you know, 0:08:52.400 --> 0:08:54.640 and actually even be on a faster growth path. So 0:08:54.679 --> 0:08:57.880 one of the biggest demons shelks since the financial crisis solcably, 0:08:57.960 --> 0:09:00.679 but with a K caveat that you think this is transitory, 0:09:00.760 --> 0:09:02.840 You think we get a vacape recovery. What are the 0:09:02.960 --> 0:09:05.600 risks around that view? What the risks around that view 0:09:05.640 --> 0:09:07.920 that you can identify that you can say if that 0:09:07.960 --> 0:09:11.880 materialize is if X happens, we've gotten through an inflection point, 0:09:11.920 --> 0:09:13.840 I'm going to change my mind. I think there's two. 0:09:13.920 --> 0:09:16.720 One is that we've disrupted supply chains around the world. 0:09:16.800 --> 0:09:19.520 It becomes much more difficult to restart. We don't know 0:09:19.600 --> 0:09:22.320 that yet, And that we've seen that historically. UM. That 0:09:22.400 --> 0:09:25.480 the second issue is the contagion. Now, the reason why 0:09:25.520 --> 0:09:28.920 it's having such a profound economic impact today is they're 0:09:28.920 --> 0:09:32.680 trying to contain the contagion by doing a largest quarantine 0:09:32.679 --> 0:09:35.360 I've ever seen in my lifetime, UM, which is why 0:09:35.400 --> 0:09:37.679 you're having the sharp drop today. But I would say 0:09:38.000 --> 0:09:40.559 the bigger issue is we don't know the parameters of 0:09:40.559 --> 0:09:43.200 the contagion. A lot of people are saying that this 0:09:43.360 --> 0:09:46.520 is the containment, largely having to do with the slowdown 0:09:46.520 --> 0:09:49.079 in the economy. I was reading about the Spanish flu 0:09:49.280 --> 0:09:53.280 of uh. The death rate was very similar to the coronavirus. 0:09:53.360 --> 0:09:55.960 It was a one to two percent type of fatality rate, 0:09:56.400 --> 0:10:00.640 but it spread so widely that fifty million people died. 0:10:01.360 --> 0:10:05.200 What's your concern that perhaps people are under bawling the 0:10:05.240 --> 0:10:09.120 potential impact of the coronavirus. Saying it's gonna be fine 0:10:09.240 --> 0:10:12.160 even if it's not contained is basically everyone says it 0:10:12.200 --> 0:10:16.120 will be and it escalates to something that Let's go 0:10:16.160 --> 0:10:18.079 back to why they call it the Spanish flu. Spain 0:10:18.160 --> 0:10:19.960 was the only one that had a media that reported 0:10:20.000 --> 0:10:22.800 on it. Um. You know, there it was an issue 0:10:22.800 --> 0:10:25.000 of transparency and they weren't on top of it. This 0:10:25.080 --> 0:10:27.400 is the exact opposite. Um, they are so much on 0:10:27.480 --> 0:10:30.760 top of that. The extent of the quarantine really demonstrates 0:10:30.800 --> 0:10:34.679 that the ability to maintain the contagion is unprecedented. I mean, 0:10:34.720 --> 0:10:37.600 you're paying the economic costs for it today. Um. But 0:10:37.880 --> 0:10:40.679 but the contagion um is more contained than I think 0:10:40.720 --> 0:10:43.000 we've seen any of the other events. So given that, 0:10:43.040 --> 0:10:45.000 are you surprised that we're not seeing more of a 0:10:45.040 --> 0:10:47.600 boom to oil prices today, given the fact that it's 0:10:47.640 --> 0:10:51.280 risk on because what where this oil is going is 0:10:51.280 --> 0:10:54.839 it's going into storage in China, um or it's being 0:10:54.880 --> 0:10:58.440 backed up onto the global market. Commodities are spot assets. 0:10:58.440 --> 0:11:02.120 They have to price today. Financial markets are anticipatory assets. 0:11:02.160 --> 0:11:04.679 They price tomorrow. So oil has to pay the price 0:11:04.720 --> 0:11:06.400 for the day. All the commodities have to pay the 0:11:06.400 --> 0:11:09.640 price today. The financial markets com price the much more 0:11:09.760 --> 0:11:12.360 positive story that we see, let's say in July or August. 0:11:12.400 --> 0:11:14.360 So incomably with saying that, Jeff, so let's talk about 0:11:14.360 --> 0:11:17.000 a stimulus response, shall we? At the moment you think 0:11:17.000 --> 0:11:18.840 we're gonna see some real stimulus in the back half, 0:11:19.360 --> 0:11:20.920 I just wonder what they'll do because At the moment, 0:11:20.960 --> 0:11:23.520 it's very very short term stuff, liquidity to banks, cutting 0:11:23.559 --> 0:11:25.840 rates on that liquidity to banks, all of that good stuff. 0:11:25.960 --> 0:11:28.719 When we start to see the longer term measures, I 0:11:29.000 --> 0:11:31.240 think you've got to know, we we don't even know 0:11:31.280 --> 0:11:33.320 when this end is when they can actually start doing 0:11:33.360 --> 0:11:35.920 it UM. I think at this point right now, their 0:11:35.960 --> 0:11:39.959 ability they're trying to maintain and deal with the virus 0:11:39.960 --> 0:11:42.480 as opposed to focusing on the economic growth. So we're 0:11:42.480 --> 0:11:44.920 we're just watching for some evidence of the restart. We 0:11:45.080 --> 0:11:47.559 have a bunch of different high frequency variables were focused 0:11:47.600 --> 0:11:51.960 on UM, everything from real estate, transactions, power generation. Once 0:11:51.960 --> 0:11:53.719 we see that began to rebound, I think that's when 0:11:53.760 --> 0:11:55.640 people are going to focus on these other issues. So 0:11:55.679 --> 0:11:58.160 what does riad do? I mean, if the oil demand 0:11:58.360 --> 0:12:03.640 craters in China UH and its oil one price Brent crude, 0:12:03.760 --> 0:12:07.240 what how does OPEC and how does Saudi Arabia react 0:12:08.080 --> 0:12:10.400 to what you're predicting? Well, the question is how much 0:12:10.400 --> 0:12:13.119 of this is backed up onto the global market exactly? 0:12:13.440 --> 0:12:16.679 And you know we would estimate by looking at crude 0:12:16.720 --> 0:12:19.079 runs in China it's probably somewhere around a million barrels 0:12:19.120 --> 0:12:21.200 per day as opposed to the full demand hit. So 0:12:21.240 --> 0:12:24.559 when you think about the numbers that the JTC, the 0:12:24.679 --> 0:12:27.440 Joint Technical Committee of the OPEC recommended last night, there 0:12:27.480 --> 0:12:30.160 are somewhere around six thousand barrels a day, which is 0:12:30.200 --> 0:12:32.320 not too far off the mark, and that probably manages 0:12:32.360 --> 0:12:35.480 the external surplus for a few months, for a few months. 0:12:35.720 --> 0:12:38.440 And the great call here of your four point zero 0:12:38.559 --> 0:12:42.520 percent g d P call is it's gonna be a recovery. 0:12:42.679 --> 0:12:45.600 Can you model that recovery now to a few months 0:12:46.080 --> 0:12:48.000 or is it just you just don't know? I don't know. 0:12:48.280 --> 0:12:50.600 I think that's that's why I'm surprised that the equity 0:12:50.600 --> 0:12:54.240 market is so positive, because you do have Constant's fault. 0:12:54.840 --> 0:12:58.760 That's right, yeah, David, you know, but but the equity 0:12:58.800 --> 0:13:01.880 markets what what why would you suggest, as a commodities guy, 0:13:01.960 --> 0:13:05.120 why Coston's world has a bid to it? Because they're 0:13:05.160 --> 0:13:07.880 looking at the stars like recovery here to three months out. 0:13:07.920 --> 0:13:10.040 I mean, that's the end of the discussion. Yeah, because 0:13:10.040 --> 0:13:11.720 I think that the view is, hey, you've got a 0:13:11.720 --> 0:13:14.160 lot of problems you're dealing with, but the quarantine is 0:13:14.200 --> 0:13:16.960 so large, um, that's most likely going to be effective. 0:13:17.040 --> 0:13:19.600 And you put it, it's a very low probability tail 0:13:19.720 --> 0:13:22.200 risk of something bad happen. Explain to our audiences phrase 0:13:22.280 --> 0:13:25.079 forced masjour. We've got the l en g cruise and 0:13:25.320 --> 0:13:28.960 no we don't think so. I mean every other company today, 0:13:29.200 --> 0:13:32.520 frankly outside of China as well in Singapore is getting 0:13:32.520 --> 0:13:34.959 out the Latin book on forced masjour. Is that Latin 0:13:35.040 --> 0:13:41.960 genre French? I can't remember? Are we? Is it forced masjour? March? Yeah, 0:13:42.000 --> 0:13:44.760 it's gonna be not only in commodities and particularly oil. 0:13:44.800 --> 0:13:46.320 We see it quite a bit. You're gonna see it 0:13:46.360 --> 0:13:49.199 across all types of goods and it goes both directions, 0:13:49.440 --> 0:13:51.760 not only stuff going into China, but stuff coming out 0:13:51.760 --> 0:13:54.439 of China, particularly some of the key commodities that they produce, 0:13:54.480 --> 0:13:56.640 like stealing aluminum. Jeff Carry's on the show. You said 0:13:56.640 --> 0:13:58.440 we have to wrap things up by getting the gold coal. 0:13:58.760 --> 0:14:01.200 What's the gold coal? Now? What is it? What's the 0:14:01.280 --> 0:14:03.920 dynamic around that metal that you're thinking about. By the way, 0:14:03.960 --> 0:14:06.960 the one thing I did not anticipate was the ding 0:14:07.120 --> 0:14:10.840 to jewelry demand in China being significant. It's significant at 0:14:10.840 --> 0:14:14.240 the margin gold's trading um you know, sixteen seventy and 0:14:14.360 --> 0:14:17.760 change right now, our fifteen seventy in change right now. UM. 0:14:18.000 --> 0:14:20.840 Our our target is sixteen hundred. UM. We were pretty 0:14:20.840 --> 0:14:23.080 close to it a few weeks ago, but this demand 0:14:23.160 --> 0:14:25.200 hit has taken some of the tinge out of it. 0:14:25.360 --> 0:14:28.040 We're still positive. We view gold much more as a 0:14:28.040 --> 0:14:32.840 strategic allocation trade as opposed to a directional trade. UM. 0:14:32.880 --> 0:14:35.120 You know. So, and if I were highlight the key 0:14:35.160 --> 0:14:38.600 issues geopolitical risk de dollarization, I think is a big one. 0:14:38.880 --> 0:14:41.440 Central bank buying of gold last year was the highest 0:14:41.480 --> 0:14:45.400 since in Nick scen era, representing global supplies. UM. So 0:14:45.440 --> 0:14:47.120 then nout of that we see some models upside in 0:14:47.120 --> 0:14:48.920 your term your clients, the guys that you speak to 0:14:48.960 --> 0:14:51.160 on a daddy basis, are that becoming more sympathetic to 0:14:51.240 --> 0:14:53.520 your view that boosting their radication to gold in their 0:14:53.520 --> 0:14:55.400 portfolio is just that's something you've witnessed of in the 0:14:55.480 --> 0:14:57.920 last twelve months. Um. In Europe they can't get enough 0:14:57.960 --> 0:15:01.080 of it, but remember they have negative bondyles. UM. In 0:15:01.120 --> 0:15:03.520 the U S it's a it's a hard call because 0:15:03.640 --> 0:15:06.200 you know, the Hans are still positive here. UM. So 0:15:06.280 --> 0:15:07.840 it really depends on where you are in the world. 0:15:07.960 --> 0:15:14.240 Can central bank policy affect your world? Um? Absolutely? Um, Yeah, 0:15:14.600 --> 0:15:17.480 you get a rate cuts, one rate cut to rate cuts. 0:15:17.520 --> 0:15:21.760 Whatever he's saying, is that help commodities find a bid um. 0:15:21.840 --> 0:15:25.119 Not as much as stimulus coming out of China, UM, 0:15:25.160 --> 0:15:28.160 but it is. It is a positive development. This has 0:15:28.200 --> 0:15:31.040 been sphere. Jeff Curry, thank you so much. With a 0:15:31.120 --> 0:15:35.520 really important call there in China GDP before the market clears. 0:15:47.680 --> 0:15:50.760 Right now, Henrietta Trust joins us she director of Economic 0:15:50.840 --> 0:15:54.640 researcher course UH with Data Partners. Henrietta, we need to 0:15:54.640 --> 0:15:58.720 talk about the fractured polarization in Washington. But I've gotta 0:15:58.800 --> 0:16:02.640 ask you, uh what you thought of the Romney moment yesterday. 0:16:02.640 --> 0:16:05.800 I mean, how did that fit into the floor the Senate, 0:16:05.920 --> 0:16:09.360 the house that you know, uh well it was. It 0:16:09.400 --> 0:16:13.040 was certainly very unwelcome news for Republican leadership. We had 0:16:13.080 --> 0:16:16.520 been with staff there throughout the day in real time 0:16:16.680 --> 0:16:22.120 just understanding that, UM, they were extremely displeased with Senator 0:16:22.200 --> 0:16:25.960 Romans decision to get so vocal um. The immediate fear 0:16:26.200 --> 0:16:29.880 is for him to see some substantial backlash. And obviously, okay, 0:16:29.880 --> 0:16:32.120 but I don't mean to interrupt, but I think it's 0:16:32.120 --> 0:16:34.920 so important, Like what backlash you can't get on the 0:16:34.960 --> 0:16:38.320 squash court. I mean, what actually happens to the senator 0:16:38.360 --> 0:16:41.760 from Utah. Um, I don't know that the Senator from 0:16:41.880 --> 0:16:43.960 Utah is the one that's most at risk, but any 0:16:44.040 --> 0:16:46.600 of the vested interests who have supported him are now 0:16:46.640 --> 0:16:49.480 going to get nothing of their agenda accomplished, like Chuck Schumer, 0:16:51.560 --> 0:16:55.640 like Chuch Schumer Shore, or any of the trade associations 0:16:55.640 --> 0:16:58.000 who have donated to him or who are looking to 0:16:58.120 --> 0:17:00.760 him to advance any of their legislation. One of the 0:17:00.800 --> 0:17:03.200 issues that I'm not particularly familiar with, but something to 0:17:03.240 --> 0:17:06.840 do with college sports and his legislation and impetus um, 0:17:07.000 --> 0:17:12.160 something came up there just this the manifest options for 0:17:12.200 --> 0:17:15.040 them to sort of squeeze him are the focus. Now. 0:17:15.119 --> 0:17:17.120 I mean, you're grizzled pro on this, So just one 0:17:17.119 --> 0:17:19.400 more question in the politics of it before John gets 0:17:19.440 --> 0:17:22.400 the policy. But is he a Democrat in Utah? Now? 0:17:22.560 --> 0:17:25.520 I mean, I mean, I'm fascinated by what happens in 0:17:25.560 --> 0:17:27.960 his state right now. I mean, it's like what four 0:17:28.000 --> 0:17:31.960 Democrats in Salt Lake. Yeah, exactly. And Um, it was 0:17:32.000 --> 0:17:35.439 interesting to see the Utah Republican Party and the junior 0:17:35.440 --> 0:17:39.320 Senator from Utah, Mike Lee respond They essentially it's a 0:17:39.440 --> 0:17:42.720 senior senator. Um, you know, we don't agree with anything 0:17:42.760 --> 0:17:46.159 that the detractors had to say, really teaming up against him. 0:17:46.240 --> 0:17:49.800 So that internal politics of Mitt Romney in the state 0:17:49.840 --> 0:17:52.320 I think will be interesting to watch. They were certainly 0:17:52.400 --> 0:17:54.879 very unhappy and to the media publication should expect to 0:17:54.880 --> 0:17:56.760 play this up. Of playing this up, but let's be honest, 0:17:56.760 --> 0:17:58.600 it will be a footnote in the history books. Will 0:17:58.600 --> 0:18:01.280 move on to the election very very quickly in November, 0:18:01.320 --> 0:18:03.840 So let's focus on that. If you want to win elections, 0:18:04.040 --> 0:18:05.560 you're probably going to need a few people from the 0:18:05.600 --> 0:18:08.000 other side of the arts crossover and the made for 0:18:08.080 --> 0:18:10.480 Twitter moments that might entertain the base. That we've seen 0:18:10.520 --> 0:18:13.080 from the Democrats over the last week or so, it's 0:18:13.160 --> 0:18:15.440 just turning go off everyone else. And there is a 0:18:15.480 --> 0:18:18.000 conclusion that many people have come to on both sides 0:18:18.040 --> 0:18:19.639 of the art over the last couple of days that 0:18:19.680 --> 0:18:23.080 the president has had a very good week. How does 0:18:23.119 --> 0:18:27.280 he capitalize on that? Henrietta Absolutely, I think probably the 0:18:27.320 --> 0:18:31.160 most important data point was the underwhelming turnout in Iowa earlier. 0:18:31.440 --> 0:18:33.800 That is a story that doesn't get enough attention. But 0:18:33.840 --> 0:18:37.479 if Democrats are going to win they have to depend 0:18:37.640 --> 0:18:41.000 on a massive voter turnout, and that's something that just 0:18:41.160 --> 0:18:43.520 didn't show up in Iowa. So when you think about 0:18:43.560 --> 0:18:46.080 the president's good week potentially you know, as described to 0:18:46.119 --> 0:18:49.320 us by Republican leadership, maybe his best week ever. Um, 0:18:49.359 --> 0:18:53.280 that's probably the number one driving factor. So Democrats have 0:18:53.520 --> 0:18:57.920 to um, fix what's gone on in the last week, 0:18:58.640 --> 0:19:00.680 immediately get to New hamp or figure out if but 0:19:00.920 --> 0:19:02.639 you're just going to get it bounced from this, figure 0:19:02.640 --> 0:19:06.679 out if the establishment's going to firm up behind Biden. Um, 0:19:06.720 --> 0:19:09.320 they have a lot of decisions to make. The conversations 0:19:09.359 --> 0:19:11.920 I heard from investors on the road were regularly intoning 0:19:12.320 --> 0:19:15.000 um that Mike Bloomberg has a chance to really drive 0:19:15.040 --> 0:19:18.400 and pull away here um to to take on the nomination, 0:19:18.480 --> 0:19:21.800 and the party is pretty unprepared for that in my opinion. 0:19:21.880 --> 0:19:24.280 Of course, Mike Bloomberg the found a majorityano of Bloomberg 0:19:24.280 --> 0:19:27.040 outpay the parent company of Bloomberg News and Henriette for 0:19:27.040 --> 0:19:29.800 the market. It comes down to something quite simple. Do 0:19:29.880 --> 0:19:32.480 we get a progressive candidate or a moderate out of 0:19:32.480 --> 0:19:35.320 the Democrats side. What are you looking for in New Hampshire? 0:19:35.359 --> 0:19:37.720 What's the right through from Iowa to New Hampshire next week. 0:19:38.359 --> 0:19:40.399 The most important thing to me is that Bernie Sanders 0:19:40.440 --> 0:19:43.000 is under performing in New Hampshire. Versus two thousand sixteen, 0:19:43.000 --> 0:19:45.520 he got six of the vote there in sixteen, he's 0:19:45.560 --> 0:19:49.560 getting so now I think that's the story. So the 0:19:49.600 --> 0:19:52.359 potential for a more moderate candidate continues to be my 0:19:52.520 --> 0:19:55.680 most likely outcome. Um, I doubt that it would be Klobachar, 0:19:55.760 --> 0:19:58.639 So I think the contest is between Biden and h 0:19:58.720 --> 0:20:02.600 pet Buttag at this point and Bud has some momentum 0:20:02.600 --> 0:20:05.080 but very little minority support. So it's always been my 0:20:05.160 --> 0:20:09.080 view that other candidates must win both Iowa and New Hampshire. 0:20:09.160 --> 0:20:12.679 Biden doesn't need to win either, so his firewall in 0:20:12.680 --> 0:20:16.720 South Carolina and Super Tuesday make me comfortable with that. 0:20:17.119 --> 0:20:18.760 And there's a question of what the narrative will be 0:20:18.760 --> 0:20:21.280 among the Democrats in terms of how to counter the 0:20:21.320 --> 0:20:25.200 strong economy and the trade achievements that President Trump has made. 0:20:25.240 --> 0:20:29.359 I'm wondering what you think of particularly the trade developments, 0:20:29.400 --> 0:20:31.720 as China does say that they will have tariffs and 0:20:31.800 --> 0:20:34.120 some seventy five billion dollars of imports from the US 0:20:34.240 --> 0:20:36.840 later this month, as we do seem to get progress 0:20:36.960 --> 0:20:40.080 across the board. What's the sort of narrative that he 0:20:40.119 --> 0:20:43.560 can use versus the counter narrative. Well, the counter narrative 0:20:43.680 --> 0:20:46.640 is one that we're hearing from Democrats and increasingly from 0:20:46.640 --> 0:20:50.480 Senate Republicans behind the scenes, which is that the tariff 0:20:50.520 --> 0:20:54.680 rate reduction China announced overnight is potentially being driven by 0:20:54.960 --> 0:20:58.360 a increased sense of reality that China's going to miss 0:20:58.359 --> 0:21:02.640 its purchase commitments. That's the most important thing. Democrats would 0:21:02.640 --> 0:21:06.359 obviously sees on that immediately. It's got ratifications for Senate 0:21:06.440 --> 0:21:09.480 races as well as the administration UM. The key states 0:21:09.520 --> 0:21:12.879 of Iowa and North Carolina are both major pork producers. 0:21:12.920 --> 0:21:16.520 They're looking for massive shipment UH commitments from China in 0:21:16.600 --> 0:21:20.720 that space, and they importantly both have Republican senators at 0:21:20.840 --> 0:21:24.800 risk for re election in Johnie Ernst in Iowa and 0:21:25.800 --> 0:21:28.840 Tom Killis in North Carolina. So for Democrats right now, 0:21:28.920 --> 0:21:32.679 what they are seizing on is this very real anxiety 0:21:32.840 --> 0:21:36.359 from farm state Republican senators and congressmen that China's going 0:21:36.400 --> 0:21:38.399 to miss its purchase commitments and that this drop in 0:21:38.480 --> 0:21:42.920