1 00:00:03,440 --> 00:00:07,120 Speaker 1: This is Bloomberg Surveillance. We got just a little better 2 00:00:07,120 --> 00:00:10,320 Speaker 1: than the worst productivity performance of any post war recovery. 3 00:00:10,440 --> 00:00:13,040 Speaker 1: That could make a big difference. I'm not convinced that 4 00:00:13,039 --> 00:00:15,520 Speaker 1: we're measuring GDP right. It doesn't feel like a two 5 00:00:15,520 --> 00:00:17,560 Speaker 1: percent world of me. It feels like a three percent world. 6 00:00:17,680 --> 00:00:20,239 Speaker 1: The Fed has hemmed us in. The dictates of the 7 00:00:20,239 --> 00:00:23,280 Speaker 1: Phillips curve model are simply that this business cycle will 8 00:00:23,320 --> 00:00:27,319 Speaker 1: not be allowed to accelerate. Bloomberg Surveillance your link to 9 00:00:27,360 --> 00:00:31,720 Speaker 1: the world of economics, finance, and investment on Bloomberg Radio. 10 00:00:31,920 --> 00:00:35,960 Speaker 1: Good morning everyone, Michael McKee and Tim Keen worldwide Bloomberg Surveillance. 11 00:00:36,040 --> 00:00:38,920 Speaker 1: We welcome all of you Bloomberg Radio Plus and of 12 00:00:38,960 --> 00:00:42,360 Speaker 1: course out on Bloomberg dot Com on our radio stations 13 00:00:42,400 --> 00:00:46,680 Speaker 1: Bloomberg twelve Boston, Bloomberg eleven three. Oh here in eighty degree, Mike, 14 00:00:46,680 --> 00:00:49,720 Speaker 1: do we get the eighty degrees today? Eighty degree hard 15 00:00:49,760 --> 00:00:52,200 Speaker 1: to say. They're they're calling for about seventy five, and 16 00:00:52,320 --> 00:00:55,760 Speaker 1: usually they underplay that a little. So we'll see lunch 17 00:00:55,760 --> 00:00:58,960 Speaker 1: outside class outside today, class outs. I like that class 18 00:00:58,960 --> 00:01:02,600 Speaker 1: outside today. Remember that you've got nothing done. That's what 19 00:01:03,400 --> 00:01:05,640 Speaker 1: that was the whole point they class us. I know 20 00:01:05,840 --> 00:01:09,120 Speaker 1: they did never did that. At Yale University UM and 21 00:01:09,160 --> 00:01:14,160 Speaker 1: Bloomberg FM Washington, Good morning in Baltimore, and of course 22 00:01:14,240 --> 00:01:17,640 Speaker 1: early morning to you and San Francisco. Serious and XM 23 00:01:17,680 --> 00:01:21,160 Speaker 1: across this nation. Bloomberg surveillance this morning brought to my 24 00:01:21,280 --> 00:01:25,520 Speaker 1: cone Resnick Accounting Tax Advisory. It can be hard to 25 00:01:25,640 --> 00:01:31,080 Speaker 1: navigate through economic uncertainty. Your business needs industry insight and 26 00:01:31,160 --> 00:01:34,920 Speaker 1: transformative advice to drive it forward. Find out why at 27 00:01:34,959 --> 00:01:40,800 Speaker 1: cone Resnick dot com. He is from Xavier High School. 28 00:01:41,400 --> 00:01:44,880 Speaker 1: This is a few years back. He's the vice chairman 29 00:01:45,600 --> 00:01:50,400 Speaker 1: of the Bank of Cypress. Is that true? Wilbert Ross 30 00:01:50,480 --> 00:01:52,960 Speaker 1: joins us right now, this is any in former radio 31 00:01:53,560 --> 00:01:57,200 Speaker 1: DJ as well. What does the vice chairman of the 32 00:01:57,240 --> 00:02:00,240 Speaker 1: Bank of Cypress do? Well, it's like a La dam 33 00:02:00,360 --> 00:02:05,440 Speaker 1: waiting for the chairman. Yeah, the board meetings. I mean 34 00:02:05,480 --> 00:02:08,239 Speaker 1: we all have a stereot Well, first of all, I 35 00:02:08,240 --> 00:02:11,640 Speaker 1: would suggest of Americans can't find Cypress on the map. 36 00:02:12,080 --> 00:02:15,480 Speaker 1: That's a different story. But after the crisis on a 37 00:02:15,560 --> 00:02:19,840 Speaker 1: Saturday morning X number of years ago, explained to us 38 00:02:19,840 --> 00:02:22,600 Speaker 1: how you go into Cyprus and what you do is 39 00:02:22,800 --> 00:02:27,600 Speaker 1: vice chairman? Well, first We went into Cyprus because we 40 00:02:27,760 --> 00:02:31,959 Speaker 1: felt that the concern about the economy was being very 41 00:02:32,040 --> 00:02:37,680 Speaker 1: much overdone. UH. Cypriot economy is based on tourism and 42 00:02:37,840 --> 00:02:44,359 Speaker 1: based on being a corporate headquarters for companies wanting a 43 00:02:44,400 --> 00:02:48,800 Speaker 1: low tax jurisdiction. We think those two have been during 44 00:02:49,520 --> 00:02:53,480 Speaker 1: characteristics to them, and our general theory is that if 45 00:02:53,520 --> 00:02:57,320 Speaker 1: you own a big bank in a small country, you 46 00:02:57,440 --> 00:03:01,400 Speaker 1: really have bought a warrant on the affairs of that country. 47 00:03:01,440 --> 00:03:05,680 Speaker 1: So it starts with deciding do we believe the Cypriot 48 00:03:05,720 --> 00:03:09,800 Speaker 1: economy would recover, And indeed it has. It's had positive 49 00:03:09,840 --> 00:03:14,840 Speaker 1: GDP growth, and I think as it exists, the program 50 00:03:14,880 --> 00:03:19,040 Speaker 1: that now will be after Ireland, the big poster boy 51 00:03:19,200 --> 00:03:25,760 Speaker 1: for the economic turnaround in Europe. Let me um go 52 00:03:25,800 --> 00:03:28,600 Speaker 1: to the intersection of politics and money here. We were 53 00:03:28,600 --> 00:03:32,040 Speaker 1: talking earlier about the exit polls UH in Michigan and 54 00:03:32,040 --> 00:03:37,240 Speaker 1: Mississippi showing enormous numbers of people who voted in the 55 00:03:37,280 --> 00:03:40,480 Speaker 1: Republican primary, suggesting they think the economy is in terrible 56 00:03:40,480 --> 00:03:42,880 Speaker 1: shape and they're very worried about it. From where you sit, 57 00:03:43,520 --> 00:03:47,280 Speaker 1: how is the economy well, I think the people who 58 00:03:47,640 --> 00:03:50,400 Speaker 1: were worried about it have a right to be worried 59 00:03:50,520 --> 00:03:55,080 Speaker 1: because the economy has not been very evenly distributed, and 60 00:03:55,200 --> 00:03:58,720 Speaker 1: the people left behind have been really more or less 61 00:03:58,760 --> 00:04:02,360 Speaker 1: the middle class and or middle class people. And if 62 00:04:02,360 --> 00:04:04,960 Speaker 1: you look at the Trump phenomenon, and you look at 63 00:04:05,000 --> 00:04:08,480 Speaker 1: the Sanders phenomenon, that's a lot of where they're drawing 64 00:04:08,520 --> 00:04:13,160 Speaker 1: their support from. That segment of the economy really has 65 00:04:13,240 --> 00:04:17,120 Speaker 1: not recovered, if anything, that's lost some ground, and they're 66 00:04:17,160 --> 00:04:21,080 Speaker 1: angry about it. What about in the segment of the 67 00:04:21,120 --> 00:04:25,320 Speaker 1: economy you occupy, And I don't just mean you personally. 68 00:04:25,360 --> 00:04:29,800 Speaker 1: Obviously your businesses do well, but the people you talk to, 69 00:04:29,880 --> 00:04:33,120 Speaker 1: the businesses you deal with, are they investing, are they 70 00:04:33,160 --> 00:04:37,120 Speaker 1: seeing profits? Are they optimistic about the future? Well, I 71 00:04:37,160 --> 00:04:41,240 Speaker 1: think everybody is concerned about geo politics, not just in 72 00:04:41,320 --> 00:04:45,160 Speaker 1: the US. I can't remember a time where there's been 73 00:04:45,200 --> 00:04:51,239 Speaker 1: more extremism, more polarization, and just about every big country around, 74 00:04:51,279 --> 00:04:55,839 Speaker 1: every big democratic society around the world. You look at Germany, 75 00:04:56,440 --> 00:04:59,400 Speaker 1: you look at Spain having trouble forming a government, you 76 00:04:59,480 --> 00:05:01,560 Speaker 1: look at it, the you look, you look, you look, 77 00:05:01,560 --> 00:05:04,800 Speaker 1: you look at the US. With these phenomena we have 78 00:05:04,880 --> 00:05:10,640 Speaker 1: in the primaries, it's a very strange time globally, how 79 00:05:10,720 --> 00:05:16,520 Speaker 1: does your Republican Party establishment regroup and move forward? Is 80 00:05:16,560 --> 00:05:19,800 Speaker 1: this a one off or is this a new calculus 81 00:05:20,040 --> 00:05:25,960 Speaker 1: for Lincoln's party? Well, I think the establishment is a 82 00:05:26,000 --> 00:05:31,320 Speaker 1: self appointed designation and I don't know there's any officialdom 83 00:05:31,360 --> 00:05:35,480 Speaker 1: that says this is the establishment, this is not um. 84 00:05:35,520 --> 00:05:38,840 Speaker 1: And I do think, as I said earlier, that it 85 00:05:38,920 --> 00:05:43,600 Speaker 1: was very unfortunate that Mitt Romney went so far as 86 00:05:43,720 --> 00:05:47,000 Speaker 1: to say he would not vote for Trump if Trump 87 00:05:47,000 --> 00:05:50,200 Speaker 1: were the nominee. I think if you believe in the 88 00:05:50,240 --> 00:05:53,920 Speaker 1: two party system, as I do, the leadership of the 89 00:05:53,960 --> 00:05:57,080 Speaker 1: party who's elected the guy who gets to be the 90 00:05:57,160 --> 00:06:01,800 Speaker 1: nominee should expect that the party will coalesce around him, 91 00:06:01,839 --> 00:06:04,920 Speaker 1: and it shouldn't be well, well, only coalesce of it 92 00:06:05,120 --> 00:06:10,640 Speaker 1: somebody we'd liked. Anyway, that's not a party that that's individuality. 93 00:06:10,680 --> 00:06:16,200 Speaker 1: But what was wrong with Romney's analysis of Trump? Was 94 00:06:16,240 --> 00:06:20,560 Speaker 1: there anything in there that was inaccurate? Oh, he's entitled 95 00:06:20,560 --> 00:06:23,440 Speaker 1: to his views, and I think for him to say 96 00:06:23,880 --> 00:06:29,479 Speaker 1: he would personally prefer another candidate, fine, everybody should be 97 00:06:29,520 --> 00:06:31,679 Speaker 1: able to do that. I think where he went too 98 00:06:31,680 --> 00:06:35,920 Speaker 1: far was saying who would not vote for the party's nominee. 99 00:06:36,560 --> 00:06:39,280 Speaker 1: You don't see how you can be a party loyalist, 100 00:06:39,920 --> 00:06:44,000 Speaker 1: especially a party establishment figure, and say, but I will 101 00:06:44,040 --> 00:06:47,239 Speaker 1: go against the will of the party. But you see 102 00:06:47,560 --> 00:06:50,760 Speaker 1: Donald Trump running a campaign based on racism, based on 103 00:06:50,960 --> 00:06:55,920 Speaker 1: appealing to the worst in society, with an economic plan 104 00:06:56,040 --> 00:06:59,679 Speaker 1: that no economist thinks makes any sense to the extent 105 00:06:59,760 --> 00:07:03,359 Speaker 1: he even has a plan, Uh, why would you vote 106 00:07:03,400 --> 00:07:06,720 Speaker 1: for him? Is there is there nothing that could be 107 00:07:06,720 --> 00:07:09,520 Speaker 1: beyond the pale in a Kennedy? No, it isn't. That 108 00:07:09,680 --> 00:07:12,720 Speaker 1: isn't a question beyond the pale. I think if you 109 00:07:12,880 --> 00:07:17,000 Speaker 1: wish to be the leader of a party, party loyalty 110 00:07:17,160 --> 00:07:20,520 Speaker 1: has to factor into it. Parties are not meant to 111 00:07:20,600 --> 00:07:24,440 Speaker 1: be a thing that comes and goes. I haven't liked 112 00:07:24,560 --> 00:07:28,040 Speaker 1: all of the nominees that the Republican Party has put 113 00:07:28,120 --> 00:07:33,640 Speaker 1: forward in in my senatorial races and congressional laces, even 114 00:07:33,680 --> 00:07:37,560 Speaker 1: in presidential But I think either you believe in a 115 00:07:37,640 --> 00:07:41,040 Speaker 1: two party system or you don't. And if you believe 116 00:07:41,120 --> 00:07:43,800 Speaker 1: in If you don't believe in a two party system, 117 00:07:43,920 --> 00:07:47,840 Speaker 1: that's fine, then you ought to be for fragmentation, not 118 00:07:48,160 --> 00:07:51,840 Speaker 1: say I'm a leader of a party, but I'm only 119 00:07:51,840 --> 00:07:54,880 Speaker 1: going to be a leader. If everybody else agrees with me, 120 00:07:55,000 --> 00:08:01,760 Speaker 1: then the numbers I saw yesterday independent nationally listed as Republicans, 121 00:08:01,880 --> 00:08:06,600 Speaker 1: we've become independent America. How do the parties attract and 122 00:08:06,680 --> 00:08:10,640 Speaker 1: retain those voters? Well, I think it is fact that 123 00:08:10,840 --> 00:08:14,800 Speaker 1: most people who now call themselves independents used to call 124 00:08:14,880 --> 00:08:19,080 Speaker 1: themselves Republicans and got fed up with the goings on 125 00:08:19,240 --> 00:08:22,640 Speaker 1: in the party. So I think to some degree what's 126 00:08:22,680 --> 00:08:26,160 Speaker 1: happening now is some of those people are climbing back. 127 00:08:26,720 --> 00:08:29,440 Speaker 1: I think the lot of the Tea Party people came 128 00:08:29,480 --> 00:08:33,640 Speaker 1: out of the Republican Party mainstream. So I think you 129 00:08:34,559 --> 00:08:39,800 Speaker 1: have now the issue does the Republican Party need a redefinition? 130 00:08:39,920 --> 00:08:42,560 Speaker 1: And this is a critical distinction. The Tea Party crew. 131 00:08:43,800 --> 00:08:47,720 Speaker 1: Maybe they are comfortable with Senator Cruz as a general statement, 132 00:08:48,280 --> 00:08:51,080 Speaker 1: can they maybe can they move over? And can those 133 00:08:51,120 --> 00:08:55,400 Speaker 1: conservatives be comfortable with Mr Trump, who's got some very 134 00:08:55,440 --> 00:09:01,680 Speaker 1: different policies. Well that's that's obviously a big, very big question, um, 135 00:09:01,760 --> 00:09:06,160 Speaker 1: and it'll be answered pretty soon. UM. I think it 136 00:09:06,240 --> 00:09:11,480 Speaker 1: was very interesting to see the variety of jurisdictions in 137 00:09:11,559 --> 00:09:17,359 Speaker 1: which Trump has won. Uh, the evangelicals in South Carolina 138 00:09:18,559 --> 00:09:22,080 Speaker 1: going all the way to Auto workers in Michigan. That 139 00:09:22,240 --> 00:09:26,760 Speaker 1: covers a pretty wide range of American population other than 140 00:09:26,880 --> 00:09:30,320 Speaker 1: the fact that he says he's a Republican. Now, why 141 00:09:30,320 --> 00:09:32,520 Speaker 1: would you vote for Donald Trump? What is it that 142 00:09:32,600 --> 00:09:37,160 Speaker 1: he could do for America? Well, I think he is 143 00:09:37,320 --> 00:09:40,760 Speaker 1: a leader, um and I think he's had very good 144 00:09:40,800 --> 00:09:45,720 Speaker 1: people hired in the past. People forget that when his 145 00:09:45,920 --> 00:09:51,120 Speaker 1: casinos went through the bankruptcies. Who was his chief financial officer, 146 00:09:51,240 --> 00:09:55,400 Speaker 1: Steve Bollenbach. What did Steve go on to do become 147 00:09:55,480 --> 00:09:59,760 Speaker 1: CEO of Hilton Hotels, did a very good job with 148 00:09:59,800 --> 00:10:03,040 Speaker 1: it and sold it for a great, huge fortune. So 149 00:10:03,080 --> 00:10:06,240 Speaker 1: he's had a history of having good people, and to me, 150 00:10:06,480 --> 00:10:10,360 Speaker 1: any kind of leadership is a function of having good 151 00:10:10,360 --> 00:10:14,120 Speaker 1: people in support of the number one person. But my 152 00:10:14,559 --> 00:10:19,319 Speaker 1: point is not so much to endorse Trump as to say, 153 00:10:19,480 --> 00:10:23,640 Speaker 1: either you have party that are coherent and stay together. 154 00:10:24,160 --> 00:10:27,520 Speaker 1: If the mass of the party nominates the candidates, they 155 00:10:27,520 --> 00:10:29,920 Speaker 1: should stick with it. Wilber Ross, Thank you so much 156 00:10:30,160 --> 00:10:33,760 Speaker 1: w Ross and company with the comments on his Republican Party. 157 00:10:33,880 --> 00:10:39,000 Speaker 1: Mr Ross significant supporter of Governor Romney. Last time around. 158 00:10:39,080 --> 00:10:43,680 Speaker 1: Futures up ten DOWBT futures up eighty two Bretcruit forty 159 00:10:43,720 --> 00:10:52,400 Speaker 1: dollars forty cents of barrel up sixty three cents. Time 160 00:10:52,440 --> 00:10:53,959 Speaker 1: now to check in with Michael R and get the 161 00:10:54,040 --> 00:10:57,840 Speaker 1: latest world end news national headlines. Mike Tom, thank you 162 00:10:57,920 --> 00:11:01,240 Speaker 1: very much. Republican presidential candidate Donald Trump says there is 163 00:11:01,240 --> 00:11:04,720 Speaker 1: a need for the party to unite around him. Trump maintains, 164 00:11:04,720 --> 00:11:07,480 Speaker 1: though it would be premature to start toning down his 165 00:11:07,520 --> 00:11:10,360 Speaker 1: aggressive campaign style, especially in the face of what he 166 00:11:10,360 --> 00:11:15,800 Speaker 1: calls vicious attacks from his rivals. Trump won contests in Michigan, Mississippi, 167 00:11:15,840 --> 00:11:20,640 Speaker 1: and Hawaii. Ted Cruz won Idaho's primary yesterday. Bernie Sanders 168 00:11:20,640 --> 00:11:24,640 Speaker 1: secured a narrow upset in Michigan's primary. However, Hillary Clinton 169 00:11:24,880 --> 00:11:27,800 Speaker 1: took Mississippi and now has more than half of the 170 00:11:27,840 --> 00:11:31,800 Speaker 1: delegates needed to secure the Democratic presidential nomination. The two 171 00:11:31,800 --> 00:11:34,760 Speaker 1: will meet for a debate again tonight. French unions have 172 00:11:34,840 --> 00:11:37,719 Speaker 1: slowed rail traffic around the country with strikes. It is 173 00:11:37,760 --> 00:11:42,560 Speaker 1: in protest of proposals by President Francois Olan's government essentially 174 00:11:42,559 --> 00:11:46,000 Speaker 1: would in the nation's thirty five hour work week. Global 175 00:11:46,040 --> 00:11:48,920 Speaker 1: news twenty four hours a day, powered by our twenty 176 00:11:48,960 --> 00:11:51,480 Speaker 1: four hundred journalists and more than a hundred fifty news 177 00:11:51,480 --> 00:11:54,800 Speaker 1: bureaus from around the world. Michael Barr to Michael, thank 178 00:11:54,800 --> 00:11:58,160 Speaker 1: you so much. Michael McKee, Tom keing on economics, finance, investment, 179 00:11:58,520 --> 00:12:06,920 Speaker 1: on international relations. This is Bloomberg Surveillance. Bloomberg Surveillance is 180 00:12:07,160 --> 00:12:09,319 Speaker 1: brought to you by Bank of America, Mary Lynch, committed 181 00:12:09,360 --> 00:12:11,680 Speaker 1: to bringing higher finance to lower carbon name the most 182 00:12:11,679 --> 00:12:14,760 Speaker 1: innovative investment bank for climate change and sustainability by the banker. 183 00:12:14,800 --> 00:12:16,719 Speaker 1: That's the power of global connections. Bank of America in 184 00:12:16,840 --> 00:12:24,240 Speaker 1: a f D I C Global Business News twenty four 185 00:12:24,280 --> 00:12:27,400 Speaker 1: hours a day. If Bloomberg dot Com the radio plus 186 00:12:27,440 --> 00:12:30,600 Speaker 1: mobile lap and on your radio, this is a Bloomberg 187 00:12:30,640 --> 00:12:34,839 Speaker 1: Business flash and I'm Karen Moscow. Futures are higher this morning. 188 00:12:34,920 --> 00:12:36,640 Speaker 1: Let's go to the first Word breaking news desk for 189 00:12:36,720 --> 00:12:40,400 Speaker 1: today's morning call, and here's Bill muloney. Good morning, Bill, 190 00:12:40,720 --> 00:12:44,120 Speaker 1: Good morning Karen. US futures are maintaining their game. Since 191 00:12:44,160 --> 00:12:46,760 Speaker 1: the last time we spoke, the futures currently hired by 192 00:12:46,800 --> 00:12:49,320 Speaker 1: eighty seven points, says the futures gained ten and as 193 00:12:49,360 --> 00:12:52,559 Speaker 1: a futures rise by twenty three the US ten yield 194 00:12:52,600 --> 00:12:56,280 Speaker 1: at one point eight eight percent in Europe, France, Germany, 195 00:12:56,320 --> 00:12:59,000 Speaker 1: Italy and Spain are hired by at least one percent, 196 00:12:59,400 --> 00:13:02,400 Speaker 1: and global on yields and crude features are also trading 197 00:13:02,440 --> 00:13:05,480 Speaker 1: higher this morning. On the US economic front, at ten o'clock, 198 00:13:05,520 --> 00:13:10,040 Speaker 1: hoastale inventories and A ten thirty energy inventories. After the 199 00:13:10,120 --> 00:13:13,160 Speaker 1: Bellas Knight, Bill Ackman raised the possibility Valley may sell 200 00:13:13,200 --> 00:13:16,839 Speaker 1: it's Bausch and loam Steak and SHAPULTI closed a Massachusetts 201 00:13:16,840 --> 00:13:21,160 Speaker 1: restaurant after workers became sick. In other news, rail CSX 202 00:13:21,200 --> 00:13:26,400 Speaker 1: sees macro economic challenges persisting through. Finally some of your 203 00:13:26,400 --> 00:13:29,520 Speaker 1: wall sheet upgrades and downgrades. Ross stores cut the neutral 204 00:13:29,600 --> 00:13:33,120 Speaker 1: Goldman Sachs fire, I raised Overwight over at Piper, bh 205 00:13:33,160 --> 00:13:35,600 Speaker 1: B built and cuts a hold of Jeffreys Yelp and 206 00:13:35,679 --> 00:13:38,800 Speaker 1: group On cut the cell over at Ubs and finally 207 00:13:38,840 --> 00:13:42,920 Speaker 1: CBS raised outperform over at Wells Fargo live on the 208 00:13:42,920 --> 00:13:46,400 Speaker 1: first Breaking news desk on Bill Maloney, Karen, thanks Bill 209 00:13:46,440 --> 00:13:48,760 Speaker 1: and to hear live breaking news over your Bloomberg cape 210 00:13:48,760 --> 00:13:50,880 Speaker 1: squawk and go on your terminal that's s q you 211 00:13:50,960 --> 00:13:53,560 Speaker 1: a w K go when that's a Bloomberg business flash, 212 00:13:53,600 --> 00:13:56,880 Speaker 1: Tom and Mike Charn, Thanks, so much Bloomberg surveillance brought 213 00:13:57,040 --> 00:14:00,760 Speaker 1: by Investco. Have you considered all of your investor alternatives 214 00:14:00,800 --> 00:14:04,600 Speaker 1: and non traditional asset classes and strategies may help you 215 00:14:04,640 --> 00:14:10,600 Speaker 1: achieve your goals? Find out more investco dot com slash alternatives. 216 00:14:10,640 --> 00:14:12,960 Speaker 1: Too short a time this morning with John at writing 217 00:14:13,400 --> 00:14:16,439 Speaker 1: of our d Q economics to go back X number 218 00:14:16,440 --> 00:14:21,920 Speaker 1: of years, turn to your great phrase, where's the putting green? Well, 219 00:14:22,720 --> 00:14:27,520 Speaker 1: just negative? Just for those who aren't amongst Tom is 220 00:14:27,560 --> 00:14:30,760 Speaker 1: referring back to two thousand four piece when the Federal 221 00:14:30,800 --> 00:14:33,360 Speaker 1: Reserve was raising rates at the quarter point of meeting 222 00:14:33,360 --> 00:14:37,160 Speaker 1: and we argued the measure they were not getting close 223 00:14:37,280 --> 00:14:41,320 Speaker 1: to uh the green. They were just starting off on 224 00:14:41,360 --> 00:14:44,040 Speaker 1: the path on monitor neutrality. Look, we've had one move 225 00:14:44,120 --> 00:14:46,640 Speaker 1: and now we seem stalled by the FED and by 226 00:14:46,640 --> 00:14:50,320 Speaker 1: all logic feeds laid down in data dependency. They should 227 00:14:50,360 --> 00:14:52,920 Speaker 1: be raising interest rates next week, but it would be 228 00:14:52,960 --> 00:14:55,320 Speaker 1: such a shock to the markets. It's not in this 229 00:14:55,480 --> 00:14:59,320 Speaker 1: Fed's DNA, I think to do that. So, um, we 230 00:14:59,360 --> 00:15:01,840 Speaker 1: know the pudding is out there, but the FED is 231 00:15:01,840 --> 00:15:06,480 Speaker 1: still just got out of the clubhouse and is hit 232 00:15:06,560 --> 00:15:10,160 Speaker 1: the bowl. Wants maybe on the and I got to 233 00:15:10,200 --> 00:15:12,840 Speaker 1: give the new headline at John's next essay. Are we 234 00:15:12,920 --> 00:15:17,520 Speaker 1: on the golf course? This is well, I mean, what 235 00:15:17,760 --> 00:15:20,800 Speaker 1: are we going from punch bowl to putting greens to 236 00:15:21,200 --> 00:15:23,520 Speaker 1: golf course here? Um, you just don't want to be 237 00:15:23,640 --> 00:15:30,120 Speaker 1: out of bounds. Uh. The economy, the is at least 238 00:15:30,800 --> 00:15:36,000 Speaker 1: matching what the Fed said it would do uh this year. Um, 239 00:15:36,080 --> 00:15:38,520 Speaker 1: But the Fed is not matching what it said it 240 00:15:38,560 --> 00:15:41,360 Speaker 1: would do this year in terms of of interest rates. 241 00:15:42,000 --> 00:15:44,400 Speaker 1: We've talked a lot about the markets and the economy, 242 00:15:44,680 --> 00:15:46,480 Speaker 1: the markets and the Fed not being on the same 243 00:15:46,520 --> 00:15:48,560 Speaker 1: page and having to come together. What about the Fed 244 00:15:48,600 --> 00:15:52,040 Speaker 1: in its own forecast? Well, that that's the real challenge 245 00:15:52,520 --> 00:15:55,040 Speaker 1: next week with any one move doesn't matter. But the 246 00:15:55,080 --> 00:15:57,560 Speaker 1: Feed is laid out to path of raising rates about 247 00:15:57,560 --> 00:16:01,280 Speaker 1: a quarter point per quarter for at least the next 248 00:16:01,360 --> 00:16:04,720 Speaker 1: two years and then a little bit more after that. Uh. 249 00:16:04,760 --> 00:16:08,440 Speaker 1: And we have to ask, has the Fed laid out 250 00:16:08,640 --> 00:16:12,320 Speaker 1: a new rationale for running monetary policy other than looking 251 00:16:12,360 --> 00:16:14,960 Speaker 1: at the labor market and looking at the inflation numbers. 252 00:16:14,960 --> 00:16:18,360 Speaker 1: And you say labor market numbers four point nine unemployment. 253 00:16:18,400 --> 00:16:20,960 Speaker 1: We've averaged two from twenty three tho jobs per month 254 00:16:21,000 --> 00:16:24,120 Speaker 1: over the last three months on inflation. Core inflation is 255 00:16:24,160 --> 00:16:26,520 Speaker 1: now one point seven percent. It's not at the one 256 00:16:26,520 --> 00:16:30,480 Speaker 1: point three percent level it was back in December. So 257 00:16:31,400 --> 00:16:34,120 Speaker 1: the Fed, unless they roll out a new rationale, if 258 00:16:34,160 --> 00:16:37,120 Speaker 1: they don't move next week, they should on their own logic. 259 00:16:37,240 --> 00:16:40,760 Speaker 1: But it seems very unlikely they can't change the outlook 260 00:16:40,760 --> 00:16:44,920 Speaker 1: too much, except there's if you look at the speeches 261 00:16:45,000 --> 00:16:51,320 Speaker 1: by stan Fisher, probably the lower the neutral rate of interest, 262 00:16:51,400 --> 00:16:54,120 Speaker 1: the rest in the neutral rate of interest, nudget down 263 00:16:54,160 --> 00:16:57,280 Speaker 1: maybe a quarter point, maybe take one move out of that, 264 00:16:57,560 --> 00:17:01,480 Speaker 1: But a radical move would require a radical new form 265 00:17:01,480 --> 00:17:04,879 Speaker 1: of policy, something of the kind. I don't believe the argument. 266 00:17:04,920 --> 00:17:07,200 Speaker 1: But the only person is really laying out that case 267 00:17:07,280 --> 00:17:10,240 Speaker 1: right now is Lyle Brainerd, which is saying we can't 268 00:17:10,280 --> 00:17:14,440 Speaker 1: have this great divergence between US managery policy and eat 269 00:17:14,480 --> 00:17:16,639 Speaker 1: the ECB and the Bank of Japan. And I disagree 270 00:17:16,680 --> 00:17:17,960 Speaker 1: with that for you, because I don't think we're a 271 00:17:17,960 --> 00:17:22,040 Speaker 1: small open economy. We're a large still relatively closed economy, 272 00:17:22,040 --> 00:17:24,399 Speaker 1: and U s should set monetary policy based on the 273 00:17:24,480 --> 00:17:28,960 Speaker 1: US needs. But there's no one else really out there 274 00:17:30,000 --> 00:17:32,399 Speaker 1: in the fact who's laying out a different way of 275 00:17:32,440 --> 00:17:34,520 Speaker 1: looking at manitary policy. So I can't see how they 276 00:17:34,600 --> 00:17:39,359 Speaker 1: changed the dots too much. Well, what when do you 277 00:17:39,359 --> 00:17:42,000 Speaker 1: think they act and how are they gonna be at 278 00:17:42,000 --> 00:17:43,560 Speaker 1: the end of the year. Force to act more quickly 279 00:17:44,680 --> 00:17:47,560 Speaker 1: they could do UM. I I if they don't move 280 00:17:48,040 --> 00:17:50,639 Speaker 1: uh next week, I think it's June. The problem with 281 00:17:50,760 --> 00:17:53,880 Speaker 1: June is what happens on June three? We have a vote. 282 00:17:54,600 --> 00:17:59,200 Speaker 1: We have the Brexit votes, So you have another potential 283 00:17:59,520 --> 00:18:04,040 Speaker 1: global thing for the FED to worry about. UM. The 284 00:18:04,080 --> 00:18:07,639 Speaker 1: markets just saying one move a year, the Feds saying 285 00:18:07,760 --> 00:18:13,639 Speaker 1: one move per quarter. UM. That is a huge divergence. 286 00:18:13,680 --> 00:18:15,800 Speaker 1: And I really hope that those of you who are 287 00:18:15,720 --> 00:18:19,960 Speaker 1: at the press conference next week ask press the FED 288 00:18:20,080 --> 00:18:24,199 Speaker 1: on that divergence, because it's not trivial. I want to 289 00:18:24,240 --> 00:18:27,600 Speaker 1: talk to you about productivity. We spoke with Dominique Constant. 290 00:18:27,680 --> 00:18:30,119 Speaker 1: He was at Cambridge, you're at Sydney, Sussex. He was 291 00:18:30,160 --> 00:18:34,080 Speaker 1: at St John's and he's adamant that this time is different. 292 00:18:34,119 --> 00:18:37,679 Speaker 1: It's not a nine nineties dearth of productivity before the 293 00:18:37,720 --> 00:18:42,160 Speaker 1: technological progress of the Internet. There's something different now. Are 294 00:18:42,320 --> 00:18:46,440 Speaker 1: are you concerned about low productivity? And should it amend 295 00:18:46,640 --> 00:18:50,440 Speaker 1: or adjust what cher Yellen does. I'm very concerned about 296 00:18:50,480 --> 00:18:54,000 Speaker 1: low productivity. We're running the lowest productivity growth over the 297 00:18:54,080 --> 00:18:57,800 Speaker 1: last five years that we've done since and that was 298 00:18:57,800 --> 00:19:00,560 Speaker 1: in the depths of a of a really deep procession 299 00:19:01,080 --> 00:19:07,640 Speaker 1: um and without productivity gains. The wage increases that people 300 00:19:08,560 --> 00:19:11,600 Speaker 1: at the FAT and elsewhere in government want to see 301 00:19:11,680 --> 00:19:14,800 Speaker 1: and workers want to see can only come at the 302 00:19:14,880 --> 00:19:19,520 Speaker 1: expense of profits which would undermine the expansion, or at 303 00:19:19,560 --> 00:19:23,399 Speaker 1: the expense of higher inflation. There's no free lance. You 304 00:19:23,480 --> 00:19:27,320 Speaker 1: can have higher wages and maintain profit margins and keep 305 00:19:27,400 --> 00:19:32,320 Speaker 1: low inflation and have this low productivity growth. And for 306 00:19:32,560 --> 00:19:36,280 Speaker 1: so long people people people talk about economy and slow 307 00:19:36,320 --> 00:19:38,600 Speaker 1: growth and things. It's a demand problem. We really have 308 00:19:39,240 --> 00:19:41,919 Speaker 1: a supply side problem and we don't understand it. But 309 00:19:42,280 --> 00:19:45,320 Speaker 1: stam Fisher said, it doesn't like its measurement. Terror. You 310 00:19:45,320 --> 00:19:46,960 Speaker 1: gotta come back. We need a longer time with you. 311 00:19:47,000 --> 00:19:49,080 Speaker 1: At some point. You're John writing for for to shorter 312 00:19:49,200 --> 00:19:54,200 Speaker 1: time today with Ard two are d Q economics just fantastic. 313 00:19:54,400 --> 00:19:56,439 Speaker 1: We're gonna look at politics next. I believe there's a 314 00:19:56,440 --> 00:20:06,439 Speaker 1: horse race yesterday. This is Bloomberg Survey coming up there. 315 00:20:06,480 --> 00:20:08,280 Speaker 1: With all due respect, highlight brought to you by Land Rover. 316 00:20:08,400 --> 00:20:09,840 Speaker 1: If it's in your nature to cast off the every 317 00:20:09,880 --> 00:20:11,800 Speaker 1: day and seek ad venture, the Discovery Sport was built 318 00:20:11,800 --> 00:20:13,840 Speaker 1: to help your search. Visit Landrover Try State dot com 319 00:20:13,880 --> 00:20:16,080 Speaker 1: for special offers during the only Adventure Sales event. Land 320 00:20:16,160 --> 00:20:26,440 Speaker 1: Rover Above and Beyond broadcasting live to New York, Bloomberg eleventh, 321 00:20:26,480 --> 00:20:31,359 Speaker 1: Ryo to Washington, d C, Bloomberg to Boston, Bloomberg twelve 322 00:20:31,400 --> 00:20:36,040 Speaker 1: hundreds to San Francisco, Bloomberg to the Country Series Exam 323 00:20:36,160 --> 00:20:39,600 Speaker 1: Channel one ninety and around the globe the Bloomberg Radio 324 00:20:39,680 --> 00:20:44,760 Speaker 1: Plus Appen Bloomberg dot com. This is Bloomberg Surveillance. Mary. 325 00:20:44,840 --> 00:20:47,840 Speaker 1: It is a thirty on Wall Street. I'm Michael McKee 326 00:20:47,840 --> 00:20:51,200 Speaker 1: along with Tom Keane. Economic indicators brought you by Commonwealth 327 00:20:51,240 --> 00:20:54,240 Speaker 1: Financial Network. When it's time to change the conversation, talk 328 00:20:54,320 --> 00:20:56,520 Speaker 1: with the broker dealer. R I A that's ready to listen, 329 00:20:56,560 --> 00:20:59,640 Speaker 1: call six two three six three eight or visit Commonwealth 330 00:20:59,680 --> 00:21:02,960 Speaker 1: dot com UM to learn more. No major numbers out today. 331 00:21:03,000 --> 00:21:07,040 Speaker 1: We do get wholesale inventories at ten am this morning. 332 00:21:07,080 --> 00:21:10,600 Speaker 1: Tom often a reflection of what's going on in trade. 333 00:21:11,119 --> 00:21:15,240 Speaker 1: May I state that we had a huge response from 334 00:21:15,280 --> 00:21:20,400 Speaker 1: our Wilbur Ross interview. Huge response is comments that Republicans 335 00:21:20,440 --> 00:21:25,240 Speaker 1: have to get belind Mr Trump. Huge response, Well, according 336 00:21:25,280 --> 00:21:29,480 Speaker 1: to UM the surveys, the latest ABC Washington Post survey, 337 00:21:29,520 --> 00:21:33,760 Speaker 1: that's going to be very difficult at huge response. We'll 338 00:21:33,800 --> 00:21:36,520 Speaker 1: get to that a minute. I wanted to just go 339 00:21:36,680 --> 00:21:40,400 Speaker 1: from the economy numbers here into the economy's impact on 340 00:21:41,080 --> 00:21:45,920 Speaker 1: the political process. Megan Murphy from Bloemberg News. UH, We're 341 00:21:46,000 --> 00:21:50,160 Speaker 1: Washington Bru Chief joining us now. Megan, I'm looking at 342 00:21:50,359 --> 00:21:53,960 Speaker 1: Gary Langer's exit poll numbers for ABC, and Gary, of 343 00:21:54,000 --> 00:21:58,199 Speaker 1: course produces the Bloomberg Consumer Comfort Index for UH in 344 00:21:58,400 --> 00:22:03,000 Speaker 1: ten UM. It's ex intent brother UM. Voters in the 345 00:22:03,040 --> 00:22:07,000 Speaker 1: Republican primary in Michigan say they are worried about the 346 00:22:07,040 --> 00:22:12,200 Speaker 1: direction of the economy eight inten in Mississippi, and yet 347 00:22:12,720 --> 00:22:15,560 Speaker 1: you talk to people on Wall Street and things aren't 348 00:22:15,600 --> 00:22:18,800 Speaker 1: that bad. There seems to be quite a disconnect between 349 00:22:19,400 --> 00:22:21,720 Speaker 1: people on Wall Street and people in what many on 350 00:22:21,760 --> 00:22:24,400 Speaker 1: Wall Street would call the flyover. Yeah, and I think 351 00:22:24,440 --> 00:22:26,720 Speaker 1: that explains so much of what we've been seeing so 352 00:22:26,760 --> 00:22:30,680 Speaker 1: far this election cycle. This disconnect is real. We've done 353 00:22:30,680 --> 00:22:34,200 Speaker 1: many stories showing how actually the underlying fundamentals whether you 354 00:22:34,240 --> 00:22:36,879 Speaker 1: look at wages, whether you look at productivity, whether you 355 00:22:36,920 --> 00:22:40,280 Speaker 1: think look at laborforce participation, were actually things seems to be, 356 00:22:40,520 --> 00:22:42,960 Speaker 1: you know, getting better. But yet that is not reflected 357 00:22:43,000 --> 00:22:47,440 Speaker 1: in this huge angry swing we see, this anti establishment swing. 358 00:22:47,520 --> 00:22:49,879 Speaker 1: We see and even the number of people in the 359 00:22:50,000 --> 00:22:53,200 Speaker 1: same exit polls who identified Donald Trump as the man 360 00:22:53,640 --> 00:22:56,040 Speaker 1: they think would do the best job of shepherd in 361 00:22:56,080 --> 00:22:58,200 Speaker 1: the economy. He won by a big margin on that 362 00:22:58,320 --> 00:23:00,320 Speaker 1: score in Mississippi and a big mark and on that 363 00:23:00,359 --> 00:23:06,800 Speaker 1: score in Michigan. Does this suggest another interesting stat out 364 00:23:07,320 --> 00:23:11,720 Speaker 1: from NBC this morning, um, Trump has won every state 365 00:23:11,720 --> 00:23:16,199 Speaker 1: with unemployment over five um that people are willing to 366 00:23:16,280 --> 00:23:19,800 Speaker 1: overlook everything else because it's the economy. Stupid. I think 367 00:23:19,840 --> 00:23:21,560 Speaker 1: it's the economy. See when I think you also see 368 00:23:21,560 --> 00:23:23,800 Speaker 1: that on the flip side of the Democratic grace. You know, 369 00:23:23,840 --> 00:23:26,320 Speaker 1: one of the reasons why Bernie Sanders was able to 370 00:23:26,359 --> 00:23:29,840 Speaker 1: pull off that stunning upset in Michigan last night was 371 00:23:29,880 --> 00:23:32,000 Speaker 1: that he really doubled down on some of his key 372 00:23:32,040 --> 00:23:35,400 Speaker 1: themes on trade, some of his key themes on income inequality. 373 00:23:35,800 --> 00:23:38,600 Speaker 1: People think that Hillary made a mistake when she sort 374 00:23:38,640 --> 00:23:41,360 Speaker 1: of tagged him with that he hadn't supported the auto bailout, 375 00:23:41,400 --> 00:23:45,000 Speaker 1: which is sort of partially not true, and again the 376 00:23:45,040 --> 00:23:47,639 Speaker 1: economics were on full display of how that remains the 377 00:23:47,800 --> 00:23:51,560 Speaker 1: animating theme of this election. Senator Cruise to the rescue. 378 00:23:51,680 --> 00:23:57,080 Speaker 1: Give us an update on Senator Cruz's relationship with other 379 00:23:57,160 --> 00:24:02,840 Speaker 1: Republican establishment leaders. Is an amateur I'm suggesting it's fractious 380 00:24:03,200 --> 00:24:06,920 Speaker 1: if you're the pro Are they even on speaking terms? Look, 381 00:24:07,000 --> 00:24:09,879 Speaker 1: we've done extensive looks this week and talked to a 382 00:24:09,920 --> 00:24:12,160 Speaker 1: bunch of people to see if we can see any 383 00:24:12,200 --> 00:24:15,080 Speaker 1: movement by some of his Senate colleagues to get behind him, 384 00:24:15,119 --> 00:24:17,200 Speaker 1: to coalesce behind him, and you'd be hard And it's 385 00:24:17,200 --> 00:24:19,840 Speaker 1: pretty much crickets in the room right now. This is 386 00:24:19,920 --> 00:24:22,880 Speaker 1: kind of their worst scenario. If there's anyone the establishment 387 00:24:23,000 --> 00:24:25,600 Speaker 1: sort of fears or is more concerned about than Donald Trump, 388 00:24:25,640 --> 00:24:28,800 Speaker 1: it's actually Ted Cruz. And his views are very out 389 00:24:28,840 --> 00:24:31,600 Speaker 1: of the mainstream. His positions are very hard right and 390 00:24:31,680 --> 00:24:35,440 Speaker 1: fundamentally for Republican establishment. They do not believe he can 391 00:24:35,520 --> 00:24:38,639 Speaker 1: win against Hillary Clinton. They believe his positions are simply 392 00:24:38,920 --> 00:24:42,320 Speaker 1: two out of step with what is a rapidly changing demographic. 393 00:24:43,000 --> 00:24:46,359 Speaker 1: Well American voters as of the last couple of days 394 00:24:46,440 --> 00:24:49,600 Speaker 1: don't believe that Trump can win either. The latest ABC 395 00:24:49,880 --> 00:24:54,280 Speaker 1: Washington pole just out within the last hour shows that 396 00:24:55,240 --> 00:25:00,320 Speaker 1: right now Hillary Clinton leads Donald Trump by a fifty 397 00:25:02,080 --> 00:25:07,520 Speaker 1: vote preference among registered voters six among everyone. But while 398 00:25:07,600 --> 00:25:09,760 Speaker 1: that's just a snapshot in time, what I found very 399 00:25:09,760 --> 00:25:12,920 Speaker 1: interesting is you look at Republicans who say they don't 400 00:25:12,960 --> 00:25:16,719 Speaker 1: want Donald Trump if he is the nominee, only fifty 401 00:25:17,440 --> 00:25:20,600 Speaker 1: of them say they would be like Wilbur Ross and 402 00:25:20,720 --> 00:25:23,399 Speaker 1: vote for the Republican because he's the Republican It is, 403 00:25:23,440 --> 00:25:25,000 Speaker 1: to get back to what Tom said at the beginning, 404 00:25:25,000 --> 00:25:28,320 Speaker 1: gonna be very hard for Trump to even attract the 405 00:25:28,359 --> 00:25:33,480 Speaker 1: Republican Party, let alone independence and Democrats. I think this 406 00:25:33,560 --> 00:25:35,080 Speaker 1: number is one that we're going to have to watch 407 00:25:35,160 --> 00:25:37,720 Speaker 1: closely to see if the changes, because what we haven't 408 00:25:37,760 --> 00:25:41,119 Speaker 1: yet see play out is the realization among a huge 409 00:25:41,119 --> 00:25:43,200 Speaker 1: part of the Republican Party, this sort of majority of 410 00:25:43,200 --> 00:25:46,480 Speaker 1: the Republican Party, that Donald Trump can and is the nominee. 411 00:25:46,560 --> 00:25:48,760 Speaker 1: And I think once that sort of I do call 412 00:25:48,800 --> 00:25:50,640 Speaker 1: it sort of the five stages of grief, as some 413 00:25:50,680 --> 00:25:53,520 Speaker 1: people have described it. I do think there's many senior 414 00:25:53,520 --> 00:25:55,480 Speaker 1: figures in the party who will look at this race 415 00:25:55,520 --> 00:25:57,560 Speaker 1: and look at this contest and say, look, if we 416 00:25:57,640 --> 00:26:00,640 Speaker 1: don't get behind him, we risk a Roos civil war 417 00:26:00,680 --> 00:26:02,320 Speaker 1: in the party, a for action of the party like 418 00:26:02,359 --> 00:26:04,800 Speaker 1: we haven't seen. Are we really are we really willing 419 00:26:04,840 --> 00:26:07,679 Speaker 1: to risk the Senate, risk the House, risk some of 420 00:26:07,680 --> 00:26:10,600 Speaker 1: our governorships when a lot of those states come up 421 00:26:10,960 --> 00:26:13,960 Speaker 1: risk redistrict thing. I do think over the next several days, 422 00:26:13,960 --> 00:26:16,200 Speaker 1: we're going to see some establishment figures. I thought what 423 00:26:16,240 --> 00:26:19,359 Speaker 1: Wilver Ross said was tremendously interesting. Say wait a second, 424 00:26:19,359 --> 00:26:22,480 Speaker 1: are we potentially doing more harm than good by continuing 425 00:26:22,520 --> 00:26:24,879 Speaker 1: this never Trump stopped chumping? Can you listen to our 426 00:26:24,920 --> 00:26:28,720 Speaker 1: interview with Wilver Ross. Well, I was on at the 427 00:26:28,800 --> 00:26:31,679 Speaker 1: same time, so I was listening to one year. But 428 00:26:31,760 --> 00:26:33,480 Speaker 1: I think, you know, look, this is the thing the 429 00:26:33,560 --> 00:26:37,080 Speaker 1: party risks. You know, the party risks a fundamental split 430 00:26:37,240 --> 00:26:40,320 Speaker 1: and whether the senior financiers. I hear it a lot 431 00:26:40,440 --> 00:26:42,160 Speaker 1: from people who have put a lot of money into 432 00:26:42,160 --> 00:26:44,239 Speaker 1: this election and saying, we don't want to cut off 433 00:26:44,280 --> 00:26:48,840 Speaker 1: our nose despite our faces angle. What is your number 434 00:26:48,840 --> 00:26:51,640 Speaker 1: one study item as you moved to Florida next Tuesday? 435 00:26:52,000 --> 00:26:54,639 Speaker 1: That's the thing you want to know? Well, the number 436 00:26:54,640 --> 00:26:56,600 Speaker 1: one thing we're watching is I want to see on 437 00:26:56,640 --> 00:26:58,760 Speaker 1: their What I'm most interested in is the early voting 438 00:26:58,760 --> 00:27:01,080 Speaker 1: now and how much we've seen how much of those 439 00:27:01,119 --> 00:27:02,920 Speaker 1: votes have gone to how much some of those votes 440 00:27:02,920 --> 00:27:05,920 Speaker 1: all have gone to Jeb Bush frankly Um. But if this, 441 00:27:06,119 --> 00:27:08,840 Speaker 1: you know, Rubio will come on a tremendous pressure even 442 00:27:08,880 --> 00:27:11,119 Speaker 1: in the coming days, even before Florida, to sort of 443 00:27:11,119 --> 00:27:13,480 Speaker 1: think about his position in the race he is going. 444 00:27:13,600 --> 00:27:16,160 Speaker 1: If Ted Cruz wants to sort of have the strategy 445 00:27:16,160 --> 00:27:19,240 Speaker 1: of making sure Rubio exits. Donald Trump is probably gonna 446 00:27:19,280 --> 00:27:22,399 Speaker 1: wear Florida. We've gotta leave it there. Megan, thank you 447 00:27:22,440 --> 00:27:24,760 Speaker 1: so much. No doubt we will speak to you before 448 00:27:25,040 --> 00:27:28,959 Speaker 1: next to Tuesday. Megan Murphy, Bureau chief for the District 449 00:27:29,000 --> 00:27:38,320 Speaker 1: of Columbia Office of Bloomberg Futures Up nine. I'm not 450 00:27:38,400 --> 00:27:41,680 Speaker 1: to take in with Michael Barr for the latest news headlines. Michel, Mike, Tom, 451 00:27:41,760 --> 00:27:44,159 Speaker 1: thank you. There are new questions being raised about the 452 00:27:44,160 --> 00:27:48,800 Speaker 1: Iran nuclear agreement today after Iran's news agency says to 453 00:27:48,920 --> 00:27:53,760 Speaker 1: RN fired two ballistic missiles. Written in Hebrew on the 454 00:27:53,800 --> 00:27:57,080 Speaker 1: missiles is the phrase Israel must be wiped out. The 455 00:27:57,080 --> 00:28:00,879 Speaker 1: show of force comes as Vice President Joe Biden visits Israel, 456 00:28:01,280 --> 00:28:03,560 Speaker 1: and I want to reiterate which I know people still 457 00:28:03,600 --> 00:28:08,360 Speaker 1: doubt here. If in fact they break the deal, we 458 00:28:08,359 --> 00:28:12,359 Speaker 1: will act. Biden spoke in Jerusalem alongside Israeli Prime Minister 459 00:28:12,400 --> 00:28:16,120 Speaker 1: Benjamin Deton Yahoo, who opposed the Iran nuclear deal. Hillary 460 00:28:16,160 --> 00:28:18,840 Speaker 1: Clinton and Bernie Sanders are debating tonight for the eighth 461 00:28:18,880 --> 00:28:22,479 Speaker 1: time in Florida. Last night, Sanders scored an upset win 462 00:28:22,560 --> 00:28:26,680 Speaker 1: in Michigan's Democratic presidential primary. However, Clinton won the primary 463 00:28:26,680 --> 00:28:29,639 Speaker 1: in Mississippi and is more than halfway to hitting the 464 00:28:29,720 --> 00:28:32,920 Speaker 1: number needed to win the party's nomination. For the Republicans, 465 00:28:32,920 --> 00:28:36,920 Speaker 1: Donald Trump won contests in Michigan, Mississippi, and Hawaii. Ted 466 00:28:36,960 --> 00:28:40,080 Speaker 1: Cruz won the primary in Idaho. A public viewing begins 467 00:28:40,120 --> 00:28:43,200 Speaker 1: today for Nancy Reagan at the Reagan Presidential Library. Her 468 00:28:43,200 --> 00:28:45,760 Speaker 1: body will lie in propose for two days. The former 469 00:28:45,800 --> 00:28:49,320 Speaker 1: First Lady died Sunday. Global News twenty four hours a day, 470 00:28:49,440 --> 00:28:52,760 Speaker 1: powered by our two hundred journalists more than a hundred 471 00:28:52,760 --> 00:28:55,080 Speaker 1: fifty news bureaus from around the world. I'm Michael bar 472 00:28:55,240 --> 00:28:57,680 Speaker 1: Mike Tom thank if i I'll turn down for the 473 00:28:57,720 --> 00:29:02,400 Speaker 1: Bloomberg NBC sports update here is Judd Stesher. Thanks Mikeers. 474 00:29:02,440 --> 00:29:05,040 Speaker 1: Five years ago the Camaradlo Anthony got traded by Denver 475 00:29:05,200 --> 00:29:07,880 Speaker 1: to the Knicks. Since then, a lot more losing than winning, 476 00:29:07,920 --> 00:29:09,960 Speaker 1: and he was back in Denver last night. Still hasn't 477 00:29:10,000 --> 00:29:12,400 Speaker 1: one in any of his returns. Their Nuggets with an 478 00:29:12,440 --> 00:29:15,200 Speaker 1: easy one ten ninety four win mellow Head thirty. In 479 00:29:15,240 --> 00:29:18,160 Speaker 1: the loss in Toronto, the Nets at a sixteen point 480 00:29:18,240 --> 00:29:21,360 Speaker 1: halftime Lee. The Raptors came back and prevailed one oh 481 00:29:21,400 --> 00:29:24,360 Speaker 1: four ninety nine. Rangers and Islanders both one. Rangers state 482 00:29:24,400 --> 00:29:26,680 Speaker 1: three points ahead, they were up three nothing held on 483 00:29:26,760 --> 00:29:28,920 Speaker 1: to win four two. At Buffalo, the Isles got power 484 00:29:28,920 --> 00:29:31,760 Speaker 1: play goals and John Tavaris and andrews Lee Lee in 485 00:29:31,800 --> 00:29:34,120 Speaker 1: the third period of snap at tie the top Pittsburgh 486 00:29:34,400 --> 00:29:36,360 Speaker 1: two to one. Another local team headed the n C 487 00:29:36,440 --> 00:29:39,360 Speaker 1: Double A tournament, the Knights of Fairleigh Dickinson, winning at 488 00:29:39,360 --> 00:29:42,760 Speaker 1: Wagner in the Northeast final eighties seven seventy nine, their 489 00:29:42,800 --> 00:29:46,040 Speaker 1: fifth PENC double as first since two thousand five. Jets 490 00:29:46,040 --> 00:29:48,479 Speaker 1: are losing tap rusher Chris Ivory, cashing in on his 491 00:29:48,520 --> 00:29:52,320 Speaker 1: thousand yard season, expected to sign today with Jacksonville free agency. 492 00:29:52,360 --> 00:29:54,840 Speaker 1: Begins with the Jets unsure if they'll be able to 493 00:29:54,920 --> 00:29:58,200 Speaker 1: keep quarterback Ryan Fitzpatrick. Giants are keeping top pass rusher 494 00:29:58,440 --> 00:30:01,040 Speaker 1: Jason Pierre Paul for one more year. JPP made it 495 00:30:01,080 --> 00:30:04,840 Speaker 1: back from that fireworks incident. We lost the finger finger work. Today, 496 00:30:04,880 --> 00:30:07,880 Speaker 1: Giants have a deal with free agent cornerback to Norris Jenkins, 497 00:30:07,880 --> 00:30:10,080 Speaker 1: who was with the Rams spring training. Man Harvey on 498 00:30:10,080 --> 00:30:12,200 Speaker 1: the mound first time since the World Series. Three innings, 499 00:30:12,240 --> 00:30:15,360 Speaker 1: one run CC Sabatia, two hit listenings in his first 500 00:30:15,360 --> 00:30:18,640 Speaker 1: appearance since leaving the Yankees for alcohol rehab at Lumberg 501 00:30:18,760 --> 00:30:23,120 Speaker 1: NBC Sports Update. I'm John stan John, Thank you very much. Well, 502 00:30:23,160 --> 00:30:27,120 Speaker 1: we are setting up after yesterday's disappointments in the markets, 503 00:30:27,120 --> 00:30:29,160 Speaker 1: were sort of setting up for a better day today, 504 00:30:29,160 --> 00:30:30,760 Speaker 1: and maybe it has to do with the fact that 505 00:30:30,800 --> 00:30:34,720 Speaker 1: oil prices are higher this morning. Brent up by one 506 00:30:34,720 --> 00:30:37,920 Speaker 1: point six percent, West Texas by one point four percent, 507 00:30:38,160 --> 00:30:42,680 Speaker 1: Brent back over forty dollars and has SMP features up 508 00:30:42,720 --> 00:30:45,640 Speaker 1: by eight points right now four ten staff features up 509 00:30:45,680 --> 00:30:51,640 Speaker 1: seventy one swing day to day on tenure yield. You know, 510 00:30:52,120 --> 00:30:55,040 Speaker 1: Francie Lakwax was very interested in the Sun report that 511 00:30:55,080 --> 00:30:59,880 Speaker 1: the Queen is backing Brexit. Uh no response from her honor, 512 00:31:00,480 --> 00:31:03,479 Speaker 1: but uh the foot scene is up thirty nine, call 513 00:31:03,520 --> 00:31:07,160 Speaker 1: it forty point seven tenths, and the pound is uh, well, 514 00:31:07,240 --> 00:31:08,880 Speaker 1: it's come down a little bit. It's about break even 515 00:31:08,960 --> 00:31:12,320 Speaker 1: right now, one point four to oh one. So we'll 516 00:31:12,360 --> 00:31:17,560 Speaker 1: see whether her majesty indeed favors separation from Europe. Something 517 00:31:17,600 --> 00:31:22,560 Speaker 1: will follow here on Bloomberg Surveillance. Bloomberg Surveillance brunched by 518 00:31:22,600 --> 00:31:26,640 Speaker 1: c I T from transportation to healthcare to manufacturing. C 519 00:31:26,880 --> 00:31:30,960 Speaker 1: i T offers commercial lending, leasing, and treasury management services 520 00:31:31,320 --> 00:31:37,600 Speaker 1: for small middle market businesses. See i T dot com, 521 00:31:37,720 --> 00:31:41,120 Speaker 1: Global business news twenty four hours a day at Bloomberg 522 00:31:41,160 --> 00:31:44,240 Speaker 1: dot com, the radio plus mobile black and on your radio. 523 00:31:44,520 --> 00:31:48,240 Speaker 1: This is a Bloomberg Business flash and I'm Camra in Moscow. 524 00:31:48,240 --> 00:31:51,240 Speaker 1: There's updates brought to you by Eisener Emperor. When entrepreneurs 525 00:31:51,240 --> 00:31:54,720 Speaker 1: face challenges like choosing a business structure or access to capital, 526 00:31:54,760 --> 00:31:57,880 Speaker 1: they call the accountants and advisors at oisener Amper. Connect 527 00:31:57,880 --> 00:32:01,360 Speaker 1: with them at eisener Amper dot com. Slash Tech Valiant 528 00:32:01,360 --> 00:32:04,920 Speaker 1: Pharmaceuticals International well at three new board members, including a 529 00:32:04,960 --> 00:32:08,800 Speaker 1: representative from one of the drugmaker's biggest investors, and expand 530 00:32:08,840 --> 00:32:12,720 Speaker 1: the panel to fourteen directors from twelve. BMW reporting a 531 00:32:12,800 --> 00:32:15,120 Speaker 1: five point two percent gain and profit last year on 532 00:32:15,200 --> 00:32:18,440 Speaker 1: higher vehicle deliveries as the world's largest maker of luxury 533 00:32:18,480 --> 00:32:21,960 Speaker 1: cars pushes to stay ahead of Mercedes benz USAC index 534 00:32:22,000 --> 00:32:24,560 Speaker 1: future is higher. We checked the markets every fifteen minutes 535 00:32:24,600 --> 00:32:28,000 Speaker 1: throughout the trading day on Bloomberg SNP EMNI futures up 536 00:32:28,000 --> 00:32:30,800 Speaker 1: eight points, Dow EMUNI futures up sixty nine and NASDAC 537 00:32:30,840 --> 00:32:34,200 Speaker 1: Emuni futures up sixteen. Dax in Germany's up one point 538 00:32:34,200 --> 00:32:37,360 Speaker 1: two percent ten Your treasury down fourteen thirty seconds, the 539 00:32:37,440 --> 00:32:40,440 Speaker 1: yield one point eight seven percent. Nim X screwed oil 540 00:32:40,520 --> 00:32:42,680 Speaker 1: up one point four percent or fifty one cents at 541 00:32:42,720 --> 00:32:45,600 Speaker 1: thirty seven oh one a barrel, Comax Gold down seven 542 00:32:45,600 --> 00:32:48,360 Speaker 1: tenths percent or eight dollars fifty cents to twelve fifty 543 00:32:48,360 --> 00:32:51,600 Speaker 1: four fifty announced the euro a dollar oh nine five two, 544 00:32:51,720 --> 00:32:54,760 Speaker 1: the n one twelve point eight zero. That's a Bloomberg 545 00:32:54,760 --> 00:32:58,440 Speaker 1: business flash, Tom and Mike Karen, thank you so much. 546 00:32:58,440 --> 00:33:01,440 Speaker 1: Good boarning everyone. It is at eight on Wall Street. 547 00:33:02,520 --> 00:33:06,080 Speaker 1: The following is from Bloomberg View, opinions and commentary from 548 00:33:06,120 --> 00:33:09,680 Speaker 1: Bloomberg columnists. I'm Megan mccartell, a columnists from them review 549 00:33:09,800 --> 00:33:12,560 Speaker 1: for the recent chatter Donald Trump is unlikely to run 550 00:33:12,600 --> 00:33:15,800 Speaker 1: as a third party candidate, even is denied the Republican nomination. 551 00:33:16,000 --> 00:33:19,040 Speaker 1: The reasons simple, he can't afford it. According to Trump's 552 00:33:19,040 --> 00:33:22,160 Speaker 1: personal financial disclosure form, he had about three hundred million 553 00:33:22,240 --> 00:33:25,080 Speaker 1: in cash and marketable securities. That's a lot of money, 554 00:33:25,240 --> 00:33:27,840 Speaker 1: yet not enough to run a major presidential campaign, which 555 00:33:27,840 --> 00:33:31,320 Speaker 1: now clocks in and around one billion dollars, and to 556 00:33:31,360 --> 00:33:33,480 Speaker 1: be competitive in the general he would have to spend 557 00:33:33,520 --> 00:33:35,880 Speaker 1: something close to that amount because once it's down to 558 00:33:35,920 --> 00:33:38,040 Speaker 1: two or three candidates, the media is going to make 559 00:33:38,080 --> 00:33:40,360 Speaker 1: sure the other folks get as much airtime as he does. 560 00:33:40,560 --> 00:33:43,160 Speaker 1: Nor can he do without little things like campaign staff 561 00:33:43,200 --> 00:33:45,320 Speaker 1: and I Get out the Vote operation. He could maybe 562 00:33:45,320 --> 00:33:47,840 Speaker 1: mortgage some of his interests, borrowing a billion dollars to 563 00:33:47,840 --> 00:33:50,720 Speaker 1: find a campaign, but this seems unlikely for one thing. 564 00:33:50,800 --> 00:33:54,000 Speaker 1: By the most generous non Trump estimates of his net worth, 565 00:33:54,080 --> 00:33:56,440 Speaker 1: that would mean mortgaging about a quarter of his assets 566 00:33:56,440 --> 00:33:58,960 Speaker 1: for a near certain loss. Even if he was mad 567 00:33:59,040 --> 00:34:01,640 Speaker 1: enough to try, our bankers insane enough to help him. 568 00:34:01,760 --> 00:34:05,360 Speaker 1: As known expert Donald Trump once noted, these lenders aren't babies. 569 00:34:05,400 --> 00:34:08,280 Speaker 1: These are total killers. They're not nice, sweet little people 570 00:34:08,320 --> 00:34:10,640 Speaker 1: that you think one suspects they might in the end 571 00:34:10,719 --> 00:34:12,279 Speaker 1: be the ones who kill any hope of a third 572 00:34:12,280 --> 00:34:14,839 Speaker 1: party campaign. I'm Megan McCardell. The more of you, please 573 00:34:14,880 --> 00:34:16,960 Speaker 1: go to Bloombergview dot com or view go on the 574 00:34:17,000 --> 00:34:21,600 Speaker 1: Bloomberg terminal. This has been Bloomberg View and Bloomberview Commentary 575 00:34:21,640 --> 00:34:29,600 Speaker 1: commued hourly weekdays, and Bloomberg Radio Mike Brexit. Well for 576 00:34:29,640 --> 00:34:32,279 Speaker 1: a lot of people who are not as concerned with 577 00:34:32,320 --> 00:34:35,920 Speaker 1: politics as they are with the financial markets, Tomorrow is 578 00:34:35,960 --> 00:34:39,000 Speaker 1: the big day Mario Joggy and his colleagues at the 579 00:34:39,000 --> 00:34:41,560 Speaker 1: European Central Bank get together and decide what they are 580 00:34:41,640 --> 00:34:45,400 Speaker 1: going to do. Lena Comoleva is chief economist at G 581 00:34:45,520 --> 00:34:49,880 Speaker 1: plus Economics, and she joins us now with her forecast. Lena, 582 00:34:50,360 --> 00:34:53,400 Speaker 1: the most interesting note to me this morning was somebody 583 00:34:53,640 --> 00:34:56,920 Speaker 1: writing that they had noted how many people were thinking 584 00:34:56,960 --> 00:34:59,960 Speaker 1: that Mario Jogging would have a very hard time living 585 00:35:00,120 --> 00:35:03,799 Speaker 1: up to the market's expectations for what he can do tomorrow. 586 00:35:04,040 --> 00:35:06,680 Speaker 1: What do you think he will do and is it 587 00:35:06,760 --> 00:35:10,680 Speaker 1: going to be enough? Hi Mike Tom, It's great to 588 00:35:10,680 --> 00:35:14,120 Speaker 1: be with you. Um I think, um, yes, it is 589 00:35:14,160 --> 00:35:17,200 Speaker 1: true that it is uphell struggle. I think at this 590 00:35:17,280 --> 00:35:20,680 Speaker 1: point for any central banker out there to face up 591 00:35:20,719 --> 00:35:24,800 Speaker 1: to a fairly agnostic and increasingly skeptical market with respect 592 00:35:24,840 --> 00:35:28,400 Speaker 1: of the power central banks to reflate the global economy. Um. 593 00:35:28,440 --> 00:35:30,839 Speaker 1: But specifically to your question for tomorrow, there three choice 594 00:35:30,880 --> 00:35:33,560 Speaker 1: is really more cewie, more negative interest rates, or what 595 00:35:33,600 --> 00:35:37,440 Speaker 1: I call helicopter money, which is basically reviving the old 596 00:35:38,040 --> 00:35:41,480 Speaker 1: veltro very long term operations, merging them with the teltro's 597 00:35:41,560 --> 00:35:44,680 Speaker 1: the targeted long term operations, and Ultiman coming up with 598 00:35:45,160 --> 00:35:47,799 Speaker 1: what I call the ultros which is the targeted long, 599 00:35:48,040 --> 00:35:51,399 Speaker 1: very long term um very co operations. In other words, 600 00:35:51,400 --> 00:35:54,279 Speaker 1: creating something very close to helicopter money without trying to 601 00:35:54,640 --> 00:35:57,399 Speaker 1: the apple put in terms of political attitudes. Thank you. 602 00:35:57,400 --> 00:36:00,000 Speaker 1: You'll ask me with the alphabet soup define how much 603 00:36:00,040 --> 00:36:03,600 Speaker 1: after money? Help me with the Skorski approach? What does 604 00:36:03,680 --> 00:36:07,719 Speaker 1: helicopter money actually mean? But to the helicopter of money 605 00:36:07,800 --> 00:36:10,360 Speaker 1: is basically the equivalent of KEWI, but without central banks 606 00:36:10,360 --> 00:36:12,759 Speaker 1: actually having to boton themselves with the hard choices of 607 00:36:12,800 --> 00:36:15,120 Speaker 1: deciding what assets or how much assets to buy, and 608 00:36:15,120 --> 00:36:18,719 Speaker 1: others just distributing creating money to just to be distributed 609 00:36:18,760 --> 00:36:22,279 Speaker 1: in the private sector. Um And, as we know, the 610 00:36:22,400 --> 00:36:25,120 Speaker 1: e c B has been running against some some critical 611 00:36:25,120 --> 00:36:28,880 Speaker 1: technical constraints in particularly the fact that um they're lifting 612 00:36:28,880 --> 00:36:30,799 Speaker 1: so much imagery out of the market in terms of 613 00:36:30,840 --> 00:36:34,839 Speaker 1: government bonds that they are creating sound supply shop bottlenecks, 614 00:36:34,880 --> 00:36:38,160 Speaker 1: because austerity in the Eurozone means the governments are not 615 00:36:38,200 --> 00:36:42,480 Speaker 1: printing sorry, they're not learning, they're not borrowing as much 616 00:36:42,520 --> 00:36:44,719 Speaker 1: money from the markets, they're not printing as many securities 617 00:36:45,400 --> 00:36:48,839 Speaker 1: another form of money. So in other words, um, if 618 00:36:49,360 --> 00:36:51,680 Speaker 1: the Mato drug is now facing the constraints of how 619 00:36:51,760 --> 00:36:54,160 Speaker 1: much bonds and how quickly he can buy the bonds 620 00:36:54,200 --> 00:36:56,600 Speaker 1: and can get them off banks balance sheets and replace 621 00:36:56,640 --> 00:36:59,720 Speaker 1: them with cash, which then hopefully finds its way into 622 00:36:59,719 --> 00:37:02,600 Speaker 1: the economy, well, another way to go about that is 623 00:37:02,640 --> 00:37:05,640 Speaker 1: to actually subsidize banks that are just taking cash in 624 00:37:05,680 --> 00:37:08,680 Speaker 1: order to create credit. I think told me, if I 625 00:37:08,719 --> 00:37:10,719 Speaker 1: may just take a step back from this, I think 626 00:37:10,880 --> 00:37:13,160 Speaker 1: what we have to remember here, while there's just this 627 00:37:13,680 --> 00:37:16,640 Speaker 1: enormous discussion about what needs to be might announced tomorrow. 628 00:37:16,880 --> 00:37:20,680 Speaker 1: There aren't. The central banking um is about convincing the 629 00:37:20,719 --> 00:37:25,960 Speaker 1: private sector that whatever it announces, it will lift inflation expectations, 630 00:37:26,040 --> 00:37:29,120 Speaker 1: it will reflate the real economy by creating the risk 631 00:37:29,160 --> 00:37:33,080 Speaker 1: and center for lenders to generate credit. And so it 632 00:37:33,239 --> 00:37:36,040 Speaker 1: is very much about convincing the markets that whatever it sounds, 633 00:37:36,120 --> 00:37:38,480 Speaker 1: it will be enough. As opposed to the technicalities of 634 00:37:38,520 --> 00:37:40,640 Speaker 1: vot coomes. Well, that's the question I was posing at 635 00:37:40,680 --> 00:37:43,680 Speaker 1: the beginning. Is he going to be able to convince 636 00:37:43,719 --> 00:37:48,400 Speaker 1: the markets because so far inflation expectations aren't rising. The 637 00:37:48,440 --> 00:37:52,640 Speaker 1: economy is modeling along, it hasn't collapsed, but that's hardly 638 00:37:52,680 --> 00:37:56,239 Speaker 1: the benchmark people are looking for. Absolutely, Mike, I mean, 639 00:37:56,360 --> 00:37:58,879 Speaker 1: this is the trouble with the e CVS that they've had, 640 00:37:58,920 --> 00:38:02,040 Speaker 1: this very unfair will opt to serve an expanding balance 641 00:38:02,040 --> 00:38:06,399 Speaker 1: sheet yet a strengthening Europe and falling inflation expectations since 642 00:38:06,400 --> 00:38:08,400 Speaker 1: the start of the year. I think that there are 643 00:38:08,400 --> 00:38:10,680 Speaker 1: two forces that are really bigger than the ECB in 644 00:38:10,760 --> 00:38:13,760 Speaker 1: play here. First, central banks are no longer in charge 645 00:38:13,760 --> 00:38:16,200 Speaker 1: of market conditions. It is as you and Tom have 646 00:38:16,280 --> 00:38:18,960 Speaker 1: often said in your program, it is capital flows that 647 00:38:19,000 --> 00:38:24,399 Speaker 1: are driving UM capital allocation by investors, which are driven 648 00:38:24,440 --> 00:38:28,040 Speaker 1: by credit quality concerns as opposed to the fundamental policy 649 00:38:28,080 --> 00:38:31,520 Speaker 1: liquidity and rate differentials UM as the key market drive 650 00:38:31,560 --> 00:38:34,400 Speaker 1: in the markets this year, and so the result is 651 00:38:34,440 --> 00:38:38,440 Speaker 1: that neither bank stocks nor general stock markets volatilities no 652 00:38:38,719 --> 00:38:41,280 Speaker 1: change rates, in this case the Euro. So the three 653 00:38:41,320 --> 00:38:45,560 Speaker 1: court transmission channels for central banks UM record low interest 654 00:38:45,680 --> 00:38:48,080 Speaker 1: rates and quantity of using have conformed to what they 655 00:38:48,080 --> 00:38:50,520 Speaker 1: easy to be expected that it will happen since the 656 00:38:50,600 --> 00:38:54,520 Speaker 1: launch of QI. And the other big issue here is 657 00:38:54,520 --> 00:38:56,239 Speaker 1: that you know, if we look at what the easy 658 00:38:56,239 --> 00:38:58,480 Speaker 1: to be order said for that matter, are facing the 659 00:38:58,600 --> 00:39:01,359 Speaker 1: next week, when when you look the market conditions from 660 00:39:01,360 --> 00:39:04,720 Speaker 1: a thousand feet up in the air, it is the 661 00:39:04,719 --> 00:39:08,560 Speaker 1: the over supply of liquidity as opposed to fundamental shifts 662 00:39:08,560 --> 00:39:14,040 Speaker 1: in the real economic prospects that are increasingly behind financial valuations. 663 00:39:14,080 --> 00:39:16,319 Speaker 1: And this in some cases, particularly in the case of 664 00:39:16,320 --> 00:39:20,239 Speaker 1: government bonds, is leading to significant temporary pricing imbalances both 665 00:39:20,320 --> 00:39:22,960 Speaker 1: to the upside and to the downside for yields. So, 666 00:39:23,000 --> 00:39:26,120 Speaker 1: in other words, too much liquidity in the market, crowded 667 00:39:26,120 --> 00:39:29,600 Speaker 1: in by negative rates by emerging market corporate default years 668 00:39:29,640 --> 00:39:33,160 Speaker 1: by volatile storks, by negative market correlations. All of that 669 00:39:33,280 --> 00:39:37,000 Speaker 1: creates this market inequidity and dislocation, and this in trans 670 00:39:37,000 --> 00:39:40,400 Speaker 1: creates this some new types of behavior and liquidity risks 671 00:39:40,400 --> 00:39:43,719 Speaker 1: and periods of market stress, which diminishes investor convedence in 672 00:39:43,760 --> 00:39:46,120 Speaker 1: the strengths of central banks to actually dictate the very 673 00:39:46,160 --> 00:39:50,320 Speaker 1: financial conditions that determine their transmission mechanism into the really commony. 674 00:39:52,480 --> 00:39:56,239 Speaker 1: When I look, Lena, what to listen for tomorrow at 675 00:39:56,520 --> 00:39:59,480 Speaker 1: thirty what will be the tone that you want to 676 00:39:59,520 --> 00:40:04,920 Speaker 1: see is deflation disinflation talk? Does he dare even mention brexit? 677 00:40:04,960 --> 00:40:07,880 Speaker 1: I mean, I can't fail on that, it's currently skirted 678 00:40:07,920 --> 00:40:12,319 Speaker 1: around it earlier this week? What will you listen for? Well, 679 00:40:12,360 --> 00:40:15,200 Speaker 1: I I'm hoping that we will hear a central banker 680 00:40:15,320 --> 00:40:17,520 Speaker 1: that faces up to the challenges of today, and that 681 00:40:17,640 --> 00:40:20,879 Speaker 1: is that the your zone economy is in the heart 682 00:40:20,920 --> 00:40:26,160 Speaker 1: of a global turbulence of geo economic and political and 683 00:40:26,680 --> 00:40:31,720 Speaker 1: geo financial forces that are endangered to your own inflation 684 00:40:31,719 --> 00:40:34,960 Speaker 1: stability but also very much a danger to your own 685 00:40:35,000 --> 00:40:38,680 Speaker 1: growth and financial stability going forward. And so I think 686 00:40:38,680 --> 00:40:41,719 Speaker 1: the marriage does have to convince the markets that he 687 00:40:41,800 --> 00:40:45,640 Speaker 1: has the power to deliver whatever it takes, which is 688 00:40:45,640 --> 00:40:48,160 Speaker 1: really what the market started to question since the political 689 00:40:48,200 --> 00:40:52,080 Speaker 1: position two more queue back in December. The ATB has 690 00:40:52,080 --> 00:40:54,400 Speaker 1: gone some way to rectify that, of course through the 691 00:40:54,400 --> 00:40:58,880 Speaker 1: announcement of extension of QUI in January. But it's clearly 692 00:40:58,920 --> 00:41:01,479 Speaker 1: it hasn't been enough. So what will have been enough? 693 00:41:01,880 --> 00:41:05,920 Speaker 1: And um, how confident really? I think the key thing 694 00:41:05,960 --> 00:41:08,719 Speaker 1: tom is where the drug says that he's confident that 695 00:41:08,880 --> 00:41:11,720 Speaker 1: the ECP will reach its inflation target over the medium 696 00:41:11,840 --> 00:41:16,120 Speaker 1: term and what that medium term actually means, Lenna, come alive, 697 00:41:16,160 --> 00:41:18,520 Speaker 1: but think you so much greatly appreciate it is we 698 00:41:18,560 --> 00:41:21,000 Speaker 1: go nice briefing as we go to Mr Dragging Tomorrow. 699 00:41:21,400 --> 00:41:24,000 Speaker 1: Um also Mr Dragon Tomorrow. Folks, this is a place 700 00:41:24,040 --> 00:41:26,440 Speaker 1: to be. Mike McKee and I have the advantage of 701 00:41:26,480 --> 00:41:31,040 Speaker 1: our European economics and government team, particularly economic folks led 702 00:41:31,080 --> 00:41:35,080 Speaker 1: by Marty Schenker, and uh, it's real simple. The headlines 703 00:41:35,120 --> 00:41:38,240 Speaker 1: start coming out and they have value, particularly that Michael 704 00:41:38,320 --> 00:41:41,560 Speaker 1: McKee can interpret them for you far better and more 705 00:41:41,640 --> 00:41:43,959 Speaker 1: rapidly than I can. What will you look for, Mike, Well, 706 00:41:43,960 --> 00:41:46,239 Speaker 1: the first thing at seven forty five will have the 707 00:41:46,280 --> 00:41:49,799 Speaker 1: details of the announcement on interest rates, and we'll look 708 00:41:49,840 --> 00:41:51,640 Speaker 1: to the deposit rate and see if they cut that 709 00:41:51,719 --> 00:41:54,920 Speaker 1: further into negative territory. Somebody suggested yesterday they could even 710 00:41:55,120 --> 00:41:57,680 Speaker 1: go to zero or negative on the refi rate, the 711 00:41:57,719 --> 00:42:01,359 Speaker 1: main benchmark rate. That would be into interesting. Uh. And 712 00:42:01,400 --> 00:42:04,919 Speaker 1: then we'll go from there thirty Mario Draggy and whether 713 00:42:05,080 --> 00:42:08,920 Speaker 1: or not he goes into more negative rates, whether he 714 00:42:08,960 --> 00:42:11,360 Speaker 1: does more kuwi or is Lena says, figures out a 715 00:42:11,400 --> 00:42:15,560 Speaker 1: way to do helicopter money. Yeah, I I it's it's not. 716 00:42:16,040 --> 00:42:18,160 Speaker 1: Is any of this in the textbooks. I really don't 717 00:42:18,160 --> 00:42:20,040 Speaker 1: think so. In the text it's in the theory part, 718 00:42:20,160 --> 00:42:23,920 Speaker 1: in the chapter on theories that are unproven. I like that. 719 00:42:23,960 --> 00:42:27,880 Speaker 1: I didn't really I miss that chapter. We'll see'll Mario 720 00:42:27,960 --> 00:42:31,399 Speaker 1: drag tomorrow with our coverage worldwide and we will dip 721 00:42:31,440 --> 00:42:33,480 Speaker 1: into that conference as we are want to do. We 722 00:42:33,520 --> 00:42:36,080 Speaker 1: will give you the actual color of it is the 723 00:42:36,840 --> 00:42:40,400 Speaker 1: Mr Dragon speaks green on the screen features up seven 724 00:42:40,440 --> 00:42:44,040 Speaker 1: the tenure yield. It was a good five basis points one. 725 00:42:45,040 --> 00:42:46,440 Speaker 1: This is Bloomberg Savannah's