WEBVTT - French: Central bank consensus is emerging

0:00:03.080 --> 0:00:07.400
<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh Rio to Washington,

0:00:07.480 --> 0:00:12.520
<v Speaker 1>d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco,

0:00:12.640 --> 0:00:16.760
<v Speaker 1>Bloomberg nine to the Country Series Exam Channel one ninety

0:00:16.960 --> 0:00:20.440
<v Speaker 1>and around the globe the Bloomberg Radio Plus Appen Bloomberg

0:00:20.520 --> 0:00:25.000
<v Speaker 1>dot Com. This is Bloomberg Surveillance. Good morning, It is

0:00:25.400 --> 0:00:28.240
<v Speaker 1>a thirty on Wall Street. I'm Michael McKee along with

0:00:28.520 --> 0:00:32.600
<v Speaker 1>Tom Keane. Economic indicators brought you by Commonwealth Financial Network.

0:00:32.600 --> 0:00:34.600
<v Speaker 1>When it's time to change the conversation, talk with a

0:00:34.600 --> 0:00:37.040
<v Speaker 1>Brooker dealer. R I A that's ready to listen, Call

0:00:37.159 --> 0:00:39.680
<v Speaker 1>eight six six six two three six three eight or

0:00:39.760 --> 0:00:42.880
<v Speaker 1>visit Commonwealth dot com to learn more. Here's Vinet l

0:00:42.960 --> 0:00:45.800
<v Speaker 1>jedis at the first Word Desk. Michael, we start with

0:00:45.840 --> 0:00:48.440
<v Speaker 1>a glimpse this week of manufacturing. Just out from the

0:00:48.479 --> 0:00:51.840
<v Speaker 1>Federal Reserve Bank of New York. It's Regional Manufacturing Index,

0:00:51.880 --> 0:00:55.560
<v Speaker 1>the Empire State Index coming in at negative nine. This

0:00:55.720 --> 0:00:58.520
<v Speaker 1>is a main number of economists had expected an increase

0:00:58.600 --> 0:01:02.240
<v Speaker 1>of surprise. That sets the stage for two key FED

0:01:02.360 --> 0:01:06.959
<v Speaker 1>reports this week, industrial production and capacity utilization and the

0:01:07.000 --> 0:01:10.800
<v Speaker 1>Federal Reserves Minutes of its prior policy meeting. That meeting

0:01:10.800 --> 0:01:14.520
<v Speaker 1>officials seem to be tilting toward perhaps a rate increase

0:01:14.600 --> 0:01:17.520
<v Speaker 1>this year. Also on the calendar, figures on housing starts,

0:01:17.560 --> 0:01:21.440
<v Speaker 1>building permits, the consumer price Index, and existing home sales.

0:01:21.600 --> 0:01:23.800
<v Speaker 1>At the Blueberg First Work Desk on vid Dell Juda,

0:01:24.000 --> 0:01:26.200
<v Speaker 1>let's go back to New York. Thank you any well,

0:01:26.280 --> 0:01:28.319
<v Speaker 1>then he brings up a very good point. We're gonna

0:01:28.319 --> 0:01:31.880
<v Speaker 1>have a lot of data this week. Last week's concluded

0:01:31.920 --> 0:01:34.920
<v Speaker 1>with the retail sales report coming in much stronger than expected,

0:01:34.959 --> 0:01:37.960
<v Speaker 1>and you start this week with a down number on manufacturing.

0:01:38.040 --> 0:01:41.320
<v Speaker 1>Where is the US economy? Let's ask Simon Frenchi's chief

0:01:41.319 --> 0:01:45.800
<v Speaker 1>economist at Pamir Gordon based in London. The world looks

0:01:45.880 --> 0:01:50.240
<v Speaker 1>to the US, Simon, uh, at this point, how do

0:01:50.280 --> 0:01:53.720
<v Speaker 1>you decide whether the US economy is getting better or

0:01:53.800 --> 0:01:56.560
<v Speaker 1>just sort of treading water? Because then that leads us

0:01:56.600 --> 0:01:58.880
<v Speaker 1>to the questions about what the Fed's gonna do. Yeah,

0:01:58.960 --> 0:02:02.320
<v Speaker 1>good morning, Mike. Well, the Empire State number that has

0:02:02.440 --> 0:02:07.160
<v Speaker 1>just hit the wires, that that sends a somewhat conflicting

0:02:07.200 --> 0:02:09.800
<v Speaker 1>message to very up bid retail sales numbers that we

0:02:09.840 --> 0:02:12.359
<v Speaker 1>had just at the back end of last week. Very

0:02:12.360 --> 0:02:18.040
<v Speaker 1>difficult for a overtly data dependent federal reserve to to

0:02:18.160 --> 0:02:20.040
<v Speaker 1>make sense of all of this, and I think it

0:02:20.200 --> 0:02:24.440
<v Speaker 1>strongly points towards the status quo. There is I unchanged

0:02:24.520 --> 0:02:28.560
<v Speaker 1>interest rates in the US. Why why move policy risk?

0:02:28.639 --> 0:02:32.560
<v Speaker 1>The policy mistake in a world where aggregate demand world

0:02:32.600 --> 0:02:37.040
<v Speaker 1>trade is soft and softening. Further, I think it's uh

0:02:37.760 --> 0:02:41.040
<v Speaker 1>that you need all those lights on the dashboard to

0:02:41.120 --> 0:02:44.040
<v Speaker 1>be flashing green, and to be honest, it's quite a

0:02:44.080 --> 0:02:47.280
<v Speaker 1>mix of green, amber and red right now. And that's

0:02:47.360 --> 0:02:50.239
<v Speaker 1>that's very difficult for policy makers to justify and indeed

0:02:50.240 --> 0:02:54.160
<v Speaker 1>give the confidence into markets when they change policy stance. Well,

0:02:54.200 --> 0:02:58.400
<v Speaker 1>to Wow, we get uh CPI numbers, how important is

0:02:58.440 --> 0:03:00.920
<v Speaker 1>that going to be in your mind? To the markets?

0:03:00.960 --> 0:03:06.400
<v Speaker 1>And then to Jenny Yarn, Yes, So inflation repassed throughs

0:03:06.440 --> 0:03:09.680
<v Speaker 1>from currency fluctuations are really the key aspect that we're

0:03:09.680 --> 0:03:12.440
<v Speaker 1>looking at. In the last six months, we've been looking

0:03:12.440 --> 0:03:17.959
<v Speaker 1>at core inflationary prints because you know, policymakers in Europe,

0:03:18.240 --> 0:03:20.799
<v Speaker 1>in the US and the UK have been saying, okay,

0:03:20.800 --> 0:03:25.560
<v Speaker 1>we're looking through the transitory impacts of commodities of oil,

0:03:25.919 --> 0:03:28.400
<v Speaker 1>and we're wanting to look what core inflationary pressures are

0:03:28.400 --> 0:03:30.680
<v Speaker 1>happening in wage settlements, trying to get to the bottom

0:03:30.720 --> 0:03:33.440
<v Speaker 1>of these things, and therefore the inflation print is helpful

0:03:33.440 --> 0:03:36.880
<v Speaker 1>from that perspective. But given some of those trends that

0:03:36.920 --> 0:03:40.880
<v Speaker 1>have driven um sterling lower in the US due to

0:03:40.960 --> 0:03:43.440
<v Speaker 1>a strong dollar have started to reverse really since the

0:03:43.480 --> 0:03:46.520
<v Speaker 1>start of the year, which starts to be inflationary through

0:03:46.560 --> 0:03:51.080
<v Speaker 1>the important goods route and stops to be as deflationary domestically,

0:03:51.640 --> 0:03:54.680
<v Speaker 1>You're starting to see a narrative having to shift, And

0:03:54.720 --> 0:03:57.200
<v Speaker 1>therefore I wouldn't put a lot of weight on what

0:03:57.480 --> 0:03:59.880
<v Speaker 1>comes later in the week in terms of the Fed minutes,

0:04:00.240 --> 0:04:03.520
<v Speaker 1>because there's so much behind the current events. Is it

0:04:03.800 --> 0:04:08.240
<v Speaker 1>a monetary debate, simon, or are we finally over after

0:04:08.280 --> 0:04:10.720
<v Speaker 1>a sluggish first quarter and waiting for it to click

0:04:10.800 --> 0:04:13.480
<v Speaker 1>in that it's actually going to be what everybody wants

0:04:13.520 --> 0:04:16.760
<v Speaker 1>to hear about, which is a real economy debate. Well,

0:04:16.800 --> 0:04:19.200
<v Speaker 1>I really hope it moves to a real economy debate

0:04:19.320 --> 0:04:25.400
<v Speaker 1>because um I sense a a global consensus is starting

0:04:25.400 --> 0:04:28.320
<v Speaker 1>to emerge, and probably not in a formal setting, but

0:04:28.360 --> 0:04:33.120
<v Speaker 1>an informal setting between the major central banks recognizing and

0:04:33.160 --> 0:04:34.760
<v Speaker 1>they've been saying this for a long time, but I

0:04:34.760 --> 0:04:37.840
<v Speaker 1>send some of their action is beginning to to to

0:04:38.279 --> 0:04:42.840
<v Speaker 1>knit together that beg of their neighbor currency economics, monetary policy,

0:04:42.880 --> 0:04:46.040
<v Speaker 1>competition is not the way to be to get us

0:04:46.080 --> 0:04:49.839
<v Speaker 1>out of the low growth environment. And therefore, I really

0:04:49.839 --> 0:04:54.200
<v Speaker 1>do hope we start to focus in on capacity utilization numbers. Um,

0:04:54.360 --> 0:04:56.719
<v Speaker 1>we start to look at productivity in a real sense

0:04:56.760 --> 0:05:00.240
<v Speaker 1>and look at the synchronization between monetary policy. See in

0:05:00.240 --> 0:05:03.320
<v Speaker 1>fiscal policy that being that has been sadly, sadly missing

0:05:03.680 --> 0:05:07.960
<v Speaker 1>for most of the time since the financial crisis. What

0:05:08.240 --> 0:05:14.640
<v Speaker 1>the value to leaving interest rates unchanged? There is a

0:05:14.680 --> 0:05:18.880
<v Speaker 1>possibility that the FED is distroying the markets. Now, well

0:05:18.920 --> 0:05:22.119
<v Speaker 1>this this is where the macropodential tool kit comes into play.

0:05:22.120 --> 0:05:24.880
<v Speaker 1>And I think we if we look at the what

0:05:25.040 --> 0:05:27.440
<v Speaker 1>is different you know those famous words in markets? What's

0:05:27.440 --> 0:05:29.640
<v Speaker 1>different this time? Is it ever different this time? Well?

0:05:29.680 --> 0:05:32.359
<v Speaker 1>I think what is different from the perspective of independent

0:05:32.400 --> 0:05:36.800
<v Speaker 1>central banks? Is there readiness to use the macropodential tool kit,

0:05:36.920 --> 0:05:40.680
<v Speaker 1>the regulatory tool kit rather than simply monetary policy in

0:05:40.760 --> 0:05:44.360
<v Speaker 1>terms of demand management and sectual risks that are emerging

0:05:44.920 --> 0:05:48.039
<v Speaker 1>in terms of financial stability, in terms of real estate

0:05:48.120 --> 0:05:51.159
<v Speaker 1>in terms of the reaction to very very low nominal yields,

0:05:51.240 --> 0:05:54.480
<v Speaker 1>and therefore, from from my perspective, the more interesting action

0:05:54.560 --> 0:05:57.840
<v Speaker 1>will be in macropodential interventions. In twenty sixteen, very very

0:05:57.839 --> 0:06:02.520
<v Speaker 1>little action work is really foreseeable in the in Monty

0:06:02.520 --> 0:06:05.840
<v Speaker 1>policy and core traditional interest rate variation. But then then

0:06:05.839 --> 0:06:09.400
<v Speaker 1>they quickly here that gets back to real economy analysis,

0:06:09.720 --> 0:06:14.160
<v Speaker 1>are just going to push that by the wayside, while wait, wait, wait, well,

0:06:15.440 --> 0:06:17.640
<v Speaker 1>I guess it depends you know what is real for you,

0:06:17.760 --> 0:06:19.919
<v Speaker 1>Tom is different for what is real for me is

0:06:19.920 --> 0:06:21.600
<v Speaker 1>what is real for the guy on the high street

0:06:21.680 --> 0:06:24.680
<v Speaker 1>in in and then a also on main street, and

0:06:24.760 --> 0:06:30.640
<v Speaker 1>you very hard to understand the interconnectivity right now between

0:06:31.040 --> 0:06:35.599
<v Speaker 1>dramatically lower nominal yields and what is happening in terms

0:06:35.600 --> 0:06:39.680
<v Speaker 1>of business formation, business creation, zombie for the zombie firm

0:06:39.720 --> 0:06:43.400
<v Speaker 1>debate and the feedback into productivity levels, that's interesting. Simon

0:06:43.880 --> 0:06:47.200
<v Speaker 1>Um Simon French with us for the paymer Gordon, we're

0:06:47.200 --> 0:06:49.960
<v Speaker 1>going to come back. Well, it's a fascinating idea of

0:06:50.000 --> 0:06:52.800
<v Speaker 1>folks about what do we actually focus on as we

0:06:52.880 --> 0:06:54.880
<v Speaker 1>moved to Brexit and as we moved to the June

0:06:55.240 --> 0:06:59.400
<v Speaker 1>fifteen Fed meeting. Is Mike mentioned economic data back and

0:06:59.600 --> 0:07:03.920
<v Speaker 1>for the like, what was your quick interpretation the data? Second,

0:07:04.480 --> 0:07:07.960
<v Speaker 1>nobody really cares about the empire number. That's good, that's

0:07:08.040 --> 0:07:10.400
<v Speaker 1>valuable to know. No one cares. We like that on

0:07:10.680 --> 0:07:18.680
<v Speaker 1>Vinnie Dell Judas Economic Data. This Hour of Surveillance brought

0:07:18.680 --> 0:07:21.560
<v Speaker 1>to you by BMW Kisco is a BMW mot Kisco

0:07:21.960 --> 0:07:24.600
<v Speaker 1>dot com. Here's Michael Barr with his headline, My Tom,

0:07:24.680 --> 0:07:27.560
<v Speaker 1>thank you very much. Donald Trump's latest remarks about Britain's

0:07:27.560 --> 0:07:31.600
<v Speaker 1>Prime minister and the mayor of London raising eyebrows in

0:07:31.640 --> 0:07:35.160
<v Speaker 1>the UK. Appearing on i t v s Good Morning Britain,

0:07:35.480 --> 0:07:39.320
<v Speaker 1>the presumptive Republican presidential nominee said he may have a

0:07:39.320 --> 0:07:42.680
<v Speaker 1>poor relationship with British Prime Minister David Cameron. It comes

0:07:42.720 --> 0:07:46.400
<v Speaker 1>after Cameron's criticism of Trump for calling for Muslims to

0:07:46.440 --> 0:07:50.040
<v Speaker 1>be temporarily banned from entering the US. Trump also calls

0:07:50.160 --> 0:07:54.280
<v Speaker 1>London's new Muslim mayor, City Khan Rude, for calling an ignorant.

0:07:54.760 --> 0:07:57.000
<v Speaker 1>Hillary Clinton and Bernie Sanders are trying to get in

0:07:57.080 --> 0:08:00.560
<v Speaker 1>some last minute campaigning before tomorrow's primaries in Kentucky and

0:08:00.720 --> 0:08:04.120
<v Speaker 1>in Oregon. Here's a sentence that can make parents nervous

0:08:04.120 --> 0:08:07.240
<v Speaker 1>with teen drivers, can I borrow the keys? According to

0:08:07.280 --> 0:08:10.360
<v Speaker 1>a new report, teen drivers can drastically reduce their risk

0:08:10.720 --> 0:08:13.400
<v Speaker 1>of getting into a car crash just by agreeing to

0:08:13.480 --> 0:08:17.320
<v Speaker 1>a few simple rules with their parents. Say Kids Worldwide

0:08:17.320 --> 0:08:20.480
<v Speaker 1>says these kinds of grimmits can have a measurable effect

0:08:20.960 --> 0:08:24.720
<v Speaker 1>on how much risky behavior that the teams are engaging

0:08:24.800 --> 0:08:27.920
<v Speaker 1>behind the wheel. Global News twenty four hours a day,

0:08:27.960 --> 0:08:31.040
<v Speaker 1>powered by our twenty four hundred journalists and more than

0:08:31.080 --> 0:08:33.880
<v Speaker 1>a hundred fifty news bureaus around the world at Michael Barr,

0:08:34.000 --> 0:08:37.400
<v Speaker 1>Mike Tom Thank you, Michael. Time now for the Landroverer

0:08:37.440 --> 0:08:42.040
<v Speaker 1>participanate Bloomberg NBC Sports Update with John Stsha, Thanks Mike.

0:08:42.080 --> 0:08:44.080
<v Speaker 1>Another Yankee win of the met loss and a big

0:08:44.080 --> 0:08:46.920
<v Speaker 1>time brawl In Sunday baseball, the Yanks, who started the

0:08:46.960 --> 0:08:50.040
<v Speaker 1>season nine and seventeen, completed a seven and three homestand

0:08:50.080 --> 0:08:51.920
<v Speaker 1>they want all three series. They beat the first place

0:08:51.920 --> 0:08:54.959
<v Speaker 1>White Sox seven to five, Carlos Beltran with a milestone

0:08:55.000 --> 0:08:57.680
<v Speaker 1>home run. Beltro and again only the fourth switch hitter

0:08:57.720 --> 0:08:59.920
<v Speaker 1>in the four hundred home run club, joining Mickey Man,

0:09:00.240 --> 0:09:03.480
<v Speaker 1>Eddie Murray and Chipper Jones Yanks at Arizona tonight. Mets

0:09:03.480 --> 0:09:06.560
<v Speaker 1>are off before hosting Washington, now in third place after

0:09:06.559 --> 0:09:09.880
<v Speaker 1>only nine losses in their first twenty six games, seven

0:09:09.880 --> 0:09:12.600
<v Speaker 1>defeats on this road trip. Swept at Colorado, losing four

0:09:12.760 --> 0:09:15.720
<v Speaker 1>three on Ryan Rayburn's two run pinch at homer seventh

0:09:15.760 --> 0:09:18.199
<v Speaker 1>inning un Assessmitis hit his twelfth homer of the year.

0:09:18.240 --> 0:09:19.840
<v Speaker 1>It was the mets fourth loss in a row. As

0:09:19.920 --> 0:09:23.560
<v Speaker 1>for that brawl, Texas still upset by Jose Bautista's backflip

0:09:23.600 --> 0:09:25.960
<v Speaker 1>in last year's playoffs. Bautista got hit by a pitch,

0:09:26.360 --> 0:09:29.040
<v Speaker 1>then went into second base with a hard late slide,

0:09:29.040 --> 0:09:31.520
<v Speaker 1>and rug net o'door reacted with a shove and then

0:09:31.840 --> 0:09:34.559
<v Speaker 1>landed a punch to Bautista's jaw. I had a hard

0:09:34.600 --> 0:09:36.560
<v Speaker 1>slide at second base. I could have I could have

0:09:36.600 --> 0:09:39.400
<v Speaker 1>injured him. I chose not to just try to send

0:09:39.400 --> 0:09:42.000
<v Speaker 1>a message that I didn't appreciate getting hit. Um, you

0:09:42.040 --> 0:09:45.040
<v Speaker 1>know whatever. There were eight ejections. The two teams do

0:09:45.120 --> 0:09:47.960
<v Speaker 1>not play again this season. Speaking of Toronto, the Raptors

0:09:48.000 --> 0:09:49.920
<v Speaker 1>are into the NBA Zas Finals for the first time.

0:09:49.960 --> 0:09:53.080
<v Speaker 1>They won Game seven from Miami, won sixteen to eighty nine.

0:09:53.080 --> 0:09:55.240
<v Speaker 1>They'll play Game one at Cleveland tomorrow, Game one of

0:09:55.280 --> 0:09:58.199
<v Speaker 1>the NHL's West Finals. St. Louis over San Jose to one.

0:09:58.480 --> 0:10:00.439
<v Speaker 1>Jason Dale and all the way the World One took

0:10:00.440 --> 0:10:03.360
<v Speaker 1>the Players Championship by four shots and won one point

0:10:03.440 --> 0:10:06.800
<v Speaker 1>eight and nine million, the richest prize in golf. With

0:10:06.880 --> 0:10:11.040
<v Speaker 1>a Bloomberg NBC Sports Update, I'm John Stashell. John, thanks

0:10:11.040 --> 0:10:14.520
<v Speaker 1>so much. Appreciate that very much. Michael McKee, it was

0:10:14.640 --> 0:10:17.040
<v Speaker 1>interesting weekend, not much sports. We got the horse Rays

0:10:17.080 --> 0:10:20.160
<v Speaker 1>coming up here this week. You know what today is?

0:10:21.920 --> 0:10:26.680
<v Speaker 1>One years ago today, Mr Sikes and Mr Picos, Oh

0:10:26.840 --> 0:10:32.120
<v Speaker 1>my word, very interesting. Sikes Pico. It should divided up

0:10:32.120 --> 0:10:34.400
<v Speaker 1>the countries of the Middle East and led to what

0:10:34.440 --> 0:10:38.599
<v Speaker 1>we have today. Shout out to the Imperial Worm Museum

0:10:38.600 --> 0:10:41.360
<v Speaker 1>of London, England. I had a chance to see the T. E.

0:10:41.600 --> 0:10:45.920
<v Speaker 1>Lawrence exhibit a decade ago and they had his map

0:10:46.760 --> 0:10:51.120
<v Speaker 1>of Sikes Pico which he used in fury with his

0:10:51.240 --> 0:10:56.520
<v Speaker 1>leadership long ago went fairly Simon French with us on

0:10:56.600 --> 0:11:01.880
<v Speaker 1>the English economy. It's Bloomberg surveillance. The sports rempart was

0:11:01.920 --> 0:11:04.160
<v Speaker 1>brought to you by land Over Parcipiti. The spring sales

0:11:04.160 --> 0:11:07.040
<v Speaker 1>event is happening now. Visit Landrover, Parcipi dot com, land

0:11:07.120 --> 0:11:19.880
<v Speaker 1>Rover above and beyond. Global business news twenty four hours

0:11:19.880 --> 0:11:23.240
<v Speaker 1>a day at Bloomberg dot com, the Radio plus mobile app,

0:11:23.320 --> 0:11:26.800
<v Speaker 1>and on your radio. This is a Bloomberg Business Flash

0:11:27.280 --> 0:11:29.560
<v Speaker 1>and I'm Karen Moscow. This updates brought to you by

0:11:29.600 --> 0:11:34.120
<v Speaker 1>American Arbitration Association. Business disputes are inevitable resolved faster with

0:11:34.200 --> 0:11:38.840
<v Speaker 1>the American Arbitration Association, the global leader in alternative dispute

0:11:38.880 --> 0:11:41.599
<v Speaker 1>resolution for over eighty five years. Learn more at a

0:11:41.720 --> 0:11:44.840
<v Speaker 1>d R dot org. Futures are a little change this

0:11:45.000 --> 0:11:48.200
<v Speaker 1>morning after a report showed manufacturing activity in the New

0:11:48.240 --> 0:11:52.400
<v Speaker 1>York region unexpectedly contracted this month. Engauge on home builders

0:11:52.400 --> 0:11:55.240
<v Speaker 1>sentiment is due later this morning. They check the markets

0:11:55.240 --> 0:11:58.680
<v Speaker 1>every fifteen minutes throughout the trading day on Bloomberg SNPE.

0:11:58.760 --> 0:12:01.280
<v Speaker 1>Many futures down to full like Dowey Miny futures down

0:12:01.280 --> 0:12:05.240
<v Speaker 1>twenty and nas vacumny futures up almost two. The tenuere

0:12:05.240 --> 0:12:07.760
<v Speaker 1>treasury is down eight thirty seconds, the yield one point

0:12:07.800 --> 0:12:10.920
<v Speaker 1>seven two percent. Nmex screwed oil up two point one

0:12:10.960 --> 0:12:14.920
<v Speaker 1>percent of ninety eight cents to eighteen of arrow comex

0:12:14.960 --> 0:12:17.720
<v Speaker 1>schoold of one point three percent or sixteen dollars forty

0:12:17.720 --> 0:12:20.280
<v Speaker 1>cents to twelve eighty nine and ounce the euro a

0:12:20.360 --> 0:12:22.839
<v Speaker 1>dollar thirty and thirty eight agen one oh eight point

0:12:22.920 --> 0:12:26.319
<v Speaker 1>seven six were in Buffett's Berkshire Hathaway just closing his

0:12:26.400 --> 0:12:30.400
<v Speaker 1>steak in at an Apple. A regulatory filing shows Berkshire

0:12:30.480 --> 0:12:33.679
<v Speaker 1>held nine point eight one million Apple shares as of

0:12:33.679 --> 0:12:36.320
<v Speaker 1>March thirty feet. The holding was valued at one point

0:12:36.320 --> 0:12:39.360
<v Speaker 1>oh seven billion dollars at the end of the first quarter,

0:12:39.760 --> 0:12:42.960
<v Speaker 1>and Apple shares rising this morning of one point seven percent.

0:12:43.320 --> 0:12:45.800
<v Speaker 1>And that's a Bloomberg business flash, Tom and Mike Karen,

0:12:46.080 --> 0:12:48.840
<v Speaker 1>Thanks so much, folks. It is eight forty eight on

0:12:48.960 --> 0:12:53.400
<v Speaker 1>Wall Street. The following is from Bloomberg View. Opinions and

0:12:53.480 --> 0:12:57.280
<v Speaker 1>commentary from Bloomberg columnists. I'm Jonathan Bernstein, a columnist for

0:12:57.280 --> 0:13:00.199
<v Speaker 1>Bloomberg View. Donald Trump's announcement that he won't really lease

0:13:00.280 --> 0:13:02.840
<v Speaker 1>his tax returns is just the latest example of what

0:13:02.880 --> 0:13:05.760
<v Speaker 1>a difficult challenge he presents to the press. The problem

0:13:05.800 --> 0:13:08.520
<v Speaker 1>for the media is that once Trump refuses, it rapidly

0:13:08.520 --> 0:13:11.480
<v Speaker 1>ceases to be news. It's just another thing that will

0:13:11.480 --> 0:13:15.120
<v Speaker 1>disappear from public view long before voters start tuning in

0:13:15.240 --> 0:13:18.120
<v Speaker 1>later this year. The challenge isn't limited to his refusal

0:13:18.160 --> 0:13:21.320
<v Speaker 1>to release his financial records. The well documented coverage of

0:13:21.400 --> 0:13:24.040
<v Speaker 1>his latent disregard for the truth hasn't deterred him from

0:13:24.080 --> 0:13:26.839
<v Speaker 1>continuing to repeat the same falsehoods. There are also his

0:13:26.920 --> 0:13:29.960
<v Speaker 1>outrageous statements, such as his insult that John McCain and

0:13:30.000 --> 0:13:33.199
<v Speaker 1>other US prisoners of war were not heroes. And then

0:13:33.200 --> 0:13:36.880
<v Speaker 1>there's Trump's demonstrated ignorance of government and public affairs. How

0:13:36.920 --> 0:13:39.920
<v Speaker 1>can reporters convey just how far from the norm Trump

0:13:40.040 --> 0:13:41.760
<v Speaker 1>is as part of their coverage of the day to

0:13:41.800 --> 0:13:45.079
<v Speaker 1>day campaign going forward, Normal cautions seem to me to

0:13:45.120 --> 0:13:47.640
<v Speaker 1>fall short of the challenge Trump poses. It's going to

0:13:47.679 --> 0:13:51.280
<v Speaker 1>take some innovative thinking to meet that challenge. I'm Jonathan Bernstein.

0:13:51.360 --> 0:13:53.920
<v Speaker 1>For more view, please go to Bloomberg View dot com

0:13:54.000 --> 0:13:56.800
<v Speaker 1>or view go on the Bloomberg terminal. This has been

0:13:56.800 --> 0:14:00.600
<v Speaker 1>Bloomberg View. In Bloomberg View. Commentary can be heard hourly

0:14:00.640 --> 0:14:05.160
<v Speaker 1>weekdays at Bloomberg Radio. Simon French, whether from growing We've

0:14:05.160 --> 0:14:07.760
<v Speaker 1>been looking at the US, looking abroad, Let's look at

0:14:07.760 --> 0:14:10.760
<v Speaker 1>the United Kingdom. Simon, give me a scope and scale

0:14:10.800 --> 0:14:15.480
<v Speaker 1>housing statistic for the wackleness the zaniness of the United

0:14:15.559 --> 0:14:22.040
<v Speaker 1>Kingdom housing economy. Some of the valuations tom are absolutely eyewatering.

0:14:22.120 --> 0:14:26.360
<v Speaker 1>It's one of the legacies of unchanged bankreit at norpoint

0:14:26.400 --> 0:14:30.000
<v Speaker 1>five for nine years is that that hunt for yield

0:14:30.000 --> 0:14:36.080
<v Speaker 1>has pushed the price wages ratio, particularly in prime London property,

0:14:36.120 --> 0:14:39.880
<v Speaker 1>but it's spread out wider across the country to ratios

0:14:39.920 --> 0:14:43.520
<v Speaker 1>that we it briefly saw in the Laws and Boom

0:14:43.560 --> 0:14:47.000
<v Speaker 1>of that was the previous chancellor of the Exchequo in

0:14:47.000 --> 0:14:49.880
<v Speaker 1>the UK in the late eighties and then again prior

0:14:49.920 --> 0:14:52.680
<v Speaker 1>to the financial crisis, and some of those ratios are

0:14:53.040 --> 0:14:56.480
<v Speaker 1>way in excess now of of both those two previous peaks.

0:14:56.960 --> 0:15:00.680
<v Speaker 1>What is sustainable, however, is the mortgage interest bird, which

0:15:00.680 --> 0:15:04.400
<v Speaker 1>remains of the order of twenty five to thirty percent

0:15:04.520 --> 0:15:07.720
<v Speaker 1>of net household income when those stress points previously at

0:15:07.760 --> 0:15:11.640
<v Speaker 1>cycles were north. So there's not an imminent pressure on

0:15:11.720 --> 0:15:15.480
<v Speaker 1>household finances, but it will not take much movement both

0:15:15.520 --> 0:15:18.200
<v Speaker 1>within the rates market and also within the labor market,

0:15:18.200 --> 0:15:21.520
<v Speaker 1>which is absolutely key here for being able to service mortgages.

0:15:21.800 --> 0:15:24.280
<v Speaker 1>That's the thing that we're watching to see whether those

0:15:24.320 --> 0:15:27.040
<v Speaker 1>valuations are sustainable over the medium too. It's a debate

0:15:27.120 --> 0:15:32.200
<v Speaker 1>and selected parts of America, the solution being built higher,

0:15:33.120 --> 0:15:37.960
<v Speaker 1>taller buildings for residential Where is that debate in London

0:15:39.240 --> 0:15:43.600
<v Speaker 1>or The debate in London has been fervent around building

0:15:43.600 --> 0:15:46.680
<v Speaker 1>more houses. The the recent mayoral election that source that

0:15:46.760 --> 0:15:49.320
<v Speaker 1>he can replace Boris Johnson as Mayor of London was

0:15:49.360 --> 0:15:53.760
<v Speaker 1>absolutely dominated around housing. And this off the backdrop of

0:15:53.800 --> 0:15:57.640
<v Speaker 1>about twenty six to twenty seven thousand units per per

0:15:57.720 --> 0:16:01.280
<v Speaker 1>year being built in London when wirements based on population

0:16:01.400 --> 0:16:04.280
<v Speaker 1>growth something of the order of fifty thous We need

0:16:04.280 --> 0:16:06.680
<v Speaker 1>a doubling and housing starts by the end of this

0:16:06.760 --> 0:16:10.040
<v Speaker 1>decade just to keep pace with population growth. So the

0:16:10.120 --> 0:16:15.080
<v Speaker 1>conversation undoubtedly shifts to higher and also a lot of infilling.

0:16:15.120 --> 0:16:18.760
<v Speaker 1>You compare London with a lot of other metropolitans centers

0:16:18.800 --> 0:16:21.640
<v Speaker 1>around the world, it's actually quite It's not as densely

0:16:21.680 --> 0:16:23.560
<v Speaker 1>populated as a lot of areas. There are a lot

0:16:23.640 --> 0:16:26.440
<v Speaker 1>of green spaces. Of course, there are the public interest

0:16:26.480 --> 0:16:30.920
<v Speaker 1>debates going on constantly to try and balance the requirement

0:16:31.040 --> 0:16:34.960
<v Speaker 1>for for green spaces versus the requirement for property. But

0:16:35.440 --> 0:16:37.840
<v Speaker 1>I mean planning law is at the very forefront of

0:16:37.840 --> 0:16:41.720
<v Speaker 1>this debate. How much is the Brexit debate contributing to that,

0:16:41.880 --> 0:16:45.480
<v Speaker 1>because there's talk that we're seeing process start to fill

0:16:45.920 --> 0:16:49.760
<v Speaker 1>in London as people may be anticipate decline in financial

0:16:49.800 --> 0:16:53.360
<v Speaker 1>sector employment, should people want to leave the EU? Yeah,

0:16:53.440 --> 0:16:56.080
<v Speaker 1>we spoke five six weeks ago, didn't we about the

0:16:56.120 --> 0:16:59.440
<v Speaker 1>Brexit debate? And I think it's important to not over

0:16:59.560 --> 0:17:02.560
<v Speaker 1>state what is going on right now, not just within housing,

0:17:02.600 --> 0:17:05.240
<v Speaker 1>but within the broader UK economy, which has been slowing

0:17:05.320 --> 0:17:09.600
<v Speaker 1>really since q on way before the referendum was announced.

0:17:10.000 --> 0:17:13.320
<v Speaker 1>Brexit is an additional factor, or additional risk off factor,

0:17:13.640 --> 0:17:17.120
<v Speaker 1>but it isn't the most material impact on what we've

0:17:17.119 --> 0:17:19.760
<v Speaker 1>seen in terms of weak housing prints. There's been a

0:17:19.800 --> 0:17:23.720
<v Speaker 1>significant amount of tax and regulatory burden added into UK housing,

0:17:24.040 --> 0:17:27.760
<v Speaker 1>an additional three percent stamp duty on on additional properties

0:17:27.840 --> 0:17:31.480
<v Speaker 1>for trying to address the bitallet sector which has got

0:17:31.520 --> 0:17:35.919
<v Speaker 1>carried away in recent years, and that government intervention to

0:17:35.960 --> 0:17:37.840
<v Speaker 1>try and cool the market is the type of thing

0:17:37.880 --> 0:17:40.640
<v Speaker 1>that is pushing back transactions and prices right now. Well,

0:17:40.640 --> 0:17:43.720
<v Speaker 1>that's what's valuable is the guy idea of what can

0:17:43.840 --> 0:17:46.320
<v Speaker 1>government do we're having that and a few geographers again

0:17:46.359 --> 0:17:49.639
<v Speaker 1>I think of San Francisco, New York and Washington. Is

0:17:49.720 --> 0:17:53.320
<v Speaker 1>any of it proving successful? Well, I would say that

0:17:53.400 --> 0:17:58.600
<v Speaker 1>the recent tax um changes established by the UK government

0:17:58.640 --> 0:18:00.639
<v Speaker 1>has actually taken a lot of the froth out of

0:18:00.680 --> 0:18:03.600
<v Speaker 1>the market. But you're absolutely right there is there is

0:18:03.640 --> 0:18:07.199
<v Speaker 1>a limit on which government or what government intervention can do,

0:18:07.320 --> 0:18:10.720
<v Speaker 1>given the prevailing demographics, given the rate of household formation,

0:18:10.800 --> 0:18:13.879
<v Speaker 1>given the fact that the UK has current net migration

0:18:14.040 --> 0:18:17.600
<v Speaker 1>levels at about three per annum, that's adding an awful

0:18:17.640 --> 0:18:22.320
<v Speaker 1>lot of demand in and ultimately government's most effective way

0:18:22.560 --> 0:18:25.760
<v Speaker 1>at ensuring that all those people have places to live

0:18:26.040 --> 0:18:29.840
<v Speaker 1>is to increase and actually accelerate the speed with which

0:18:30.080 --> 0:18:32.600
<v Speaker 1>homes are built. We need nationally about two hundred, two

0:18:32.680 --> 0:18:35.160
<v Speaker 1>hundred and fifty thousand. We're running in about a hundred

0:18:35.160 --> 0:18:40.399
<v Speaker 1>and forty thousand at the moment. So at this point,

0:18:40.400 --> 0:18:44.440
<v Speaker 1>how concern should we be about the UK economy and

0:18:44.680 --> 0:18:47.360
<v Speaker 1>what the Central Bank does it? Is there any way

0:18:47.400 --> 0:18:52.080
<v Speaker 1>to tell until June, Well, there'll be no action from

0:18:52.080 --> 0:18:54.080
<v Speaker 1>the Central Bank. So let's go back to what tom,

0:18:54.119 --> 0:18:55.720
<v Speaker 1>what we were talking about before the break in terms

0:18:55.720 --> 0:18:59.520
<v Speaker 1>of the real economy, here in the UK and the

0:18:59.800 --> 0:19:02.520
<v Speaker 1>I I've I've written quite extensively about the fading of

0:19:02.520 --> 0:19:05.480
<v Speaker 1>the E numbers, those E numbers that gave artificial stimulus

0:19:05.520 --> 0:19:08.239
<v Speaker 1>to the UK economy. The extrange rate sterling was very

0:19:08.280 --> 0:19:11.399
<v Speaker 1>strong in fourteen and early parts of fifteen. Energy costs

0:19:11.400 --> 0:19:14.320
<v Speaker 1>were falling the second E and then also earnings, real

0:19:14.320 --> 0:19:16.800
<v Speaker 1>earnings were recovering after six six and a half years

0:19:16.800 --> 0:19:20.320
<v Speaker 1>of internal deflation in the labor market. Actually we saw

0:19:20.440 --> 0:19:23.400
<v Speaker 1>wages started to return. Now all those three factors, those

0:19:23.440 --> 0:19:26.520
<v Speaker 1>E numbers have started to turn in the opposite direction.

0:19:26.640 --> 0:19:30.640
<v Speaker 1>Really since as I say, Q Q one and you're

0:19:30.680 --> 0:19:34.800
<v Speaker 1>seeing slowing p M eyes that are challenging whether the

0:19:34.840 --> 0:19:37.919
<v Speaker 1>government can deliver what is at the moment tend to

0:19:37.960 --> 0:19:42.640
<v Speaker 1>be the most significant austerity and fiscal consolidation program anywhere

0:19:42.680 --> 0:19:44.480
<v Speaker 1>in the G seven. Indeed you can widen that to

0:19:44.480 --> 0:19:47.200
<v Speaker 1>anywhere in the G twenty. It's quite a big task.

0:19:47.280 --> 0:19:51.560
<v Speaker 1>It's a significant headwind for the government. Governments, like like

0:19:51.640 --> 0:19:54.800
<v Speaker 1>Napoleon's generals, they need to be lucky, not necessarily bright.

0:19:55.240 --> 0:19:57.520
<v Speaker 1>Thus far, George jos Bonne has been a lucky chancellor.

0:19:57.560 --> 0:20:00.680
<v Speaker 1>Certainly in recent years he's had the broader macro economy

0:20:00.680 --> 0:20:03.119
<v Speaker 1>in his favor. That's starting to turn against him and

0:20:03.200 --> 0:20:05.399
<v Speaker 1>he therefore he needs to be responsive to that. Simon,

0:20:05.480 --> 0:20:07.560
<v Speaker 1>Thank you so much. Simon French with pamerg and what

0:20:07.600 --> 0:20:10.960
<v Speaker 1>a clinic that was on London real estate, Mike, I

0:20:11.000 --> 0:20:16.040
<v Speaker 1>am told from outstanding reports from our surveillance London team

0:20:16.359 --> 0:20:20.200
<v Speaker 1>expert on this. I think Breed Taylor said she's gonna

0:20:20.240 --> 0:20:26.200
<v Speaker 1>live in Dublin community something like you're you're not investing. Yeah,

0:20:27.280 --> 0:20:30.520
<v Speaker 1>I don't know. It's your weekend to get away play. Yeah,

0:20:30.880 --> 0:20:33.359
<v Speaker 1>I'm looking to time share. I get a place on

0:20:33.440 --> 0:20:39.160
<v Speaker 1>the Thames for four minutes, you know. But seriously, very

0:20:39.200 --> 0:20:42.560
<v Speaker 1>interesting and of course some huge social consequences within the

0:20:42.600 --> 0:20:44.320
<v Speaker 1>United Kingdom, and you can bring that over not to

0:20:44.359 --> 0:20:48.640
<v Speaker 1>all but parts of the United Certainty is just the

0:20:48.640 --> 0:20:53.600
<v Speaker 1>the overriding issue in all of um, every every G

0:20:53.800 --> 0:20:56.359
<v Speaker 1>four country. You know what with our abbeynomics in the

0:20:56.359 --> 0:20:58.440
<v Speaker 1>Bank of Japan, what's going to happen in the U

0:20:58.560 --> 0:21:02.560
<v Speaker 1>S presidential election? Uh? Is China going to you know

0:21:02.840 --> 0:21:05.600
<v Speaker 1>slow so much it hurts the rest of the world again, Yeah, well,

0:21:05.640 --> 0:21:07.760
<v Speaker 1>we're trying to do folks with a with a slow news,

0:21:07.800 --> 0:21:10.280
<v Speaker 1>slow to be perfectly honest, to stay abreast of what's

0:21:10.320 --> 0:21:13.240
<v Speaker 1>going on each and every day Venezuela over the weekends,

0:21:13.280 --> 0:21:20.200
<v Speaker 1>one example, but also brief you across economics, finance, investment,

0:21:20.280 --> 0:21:24.960
<v Speaker 1>and international relations on the themes that will get us there,

0:21:25.040 --> 0:21:29.440
<v Speaker 1>certainly to brexit. And before that the June meeting, Mike,

0:21:29.440 --> 0:21:31.960
<v Speaker 1>what is the July meeting? I don't even know you're

0:21:32.000 --> 0:21:35.399
<v Speaker 1>taking off the month of July, right. I think I

0:21:35.440 --> 0:21:37.919
<v Speaker 1>will have to be here for July. July is always

0:21:37.920 --> 0:21:42.120
<v Speaker 1>important meeting, which is July twenty seven, the decision days July.

0:21:43.240 --> 0:21:48.720
<v Speaker 1>Probably the week before that, you'll have um Janet Yellen

0:21:49.119 --> 0:21:53.720
<v Speaker 1>giving her Humphrey Hawkins test and that will be extraordinarily

0:21:53.720 --> 0:21:57.359
<v Speaker 1>widely um followed interestinging in around that will be GDP.

0:21:57.480 --> 0:22:02.160
<v Speaker 1>I think after July will probably see that. Is well,

0:22:02.280 --> 0:22:04.840
<v Speaker 1>the market this morning and one big churn yen one

0:22:04.880 --> 0:22:09.200
<v Speaker 1>O eight seventy nine euro one thirteen thirty nine euro

0:22:09.359 --> 0:22:12.760
<v Speaker 1>yen showing stronger Euro weaker again. That's a that's a

0:22:12.800 --> 0:22:15.359
<v Speaker 1>reversal from the recent days, but a churn all in all,

0:22:15.440 --> 0:22:18.520
<v Speaker 1>one twenty three thirty six futures are just flat. There's

0:22:18.520 --> 0:22:21.240
<v Speaker 1>no other way to put it. Equity Future Flat, Michael

0:22:21.280 --> 0:22:26.000
<v Speaker 1>McKee and Tom Keane bringing you another hour worldwide, coast

0:22:26.000 --> 0:22:28.159
<v Speaker 1>to coast Bloomberg surveillance