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Speaker 1: Good morning. It's Wednesday, the sixteenth of August in London.

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Speaker 1: This is the Bloomberg Daybreak euro podcast. I'm Stephen Carroll.

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Speaker 1: Coming up today. Dozens of payments are missed by one

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Speaker 1: of China's shadow banking giants. As cracks in the economy deepen,

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Speaker 1: George Soros's foundation is to end most of its operations

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Speaker 1: in the European Union, and a US litigation funder bankrolls

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Speaker 1: legal action against UK universities over COVID closures. Let's start

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Speaker 1: with a roundup of our top stories. The Chinese shadow bank,

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Speaker 1: Jean Grong, has now missed payments on dozens of products,

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Speaker 1: and the company says it has no immediate plans to

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Speaker 1: make clients whole. The firm is a major player in

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Speaker 1: the country's two point nine trillion trust industry, which pools

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Speaker 1: savings to invest in real estate and wider markets. Bloomberg

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Speaker 1: John Liu Warren's investors shouldn't see this as an isolated case.

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Speaker 2: This is an issue that we've seen in the trust industry.

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Speaker 2: There have been tens of billions of dollars of products

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Speaker 2: that have defaulted already. It's likely that there will be

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Speaker 2: more because there was so much lending by trust in

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Speaker 2: China to property, and with the real estate situation as

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Speaker 2: it is, there is a great chance so there will

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Speaker 2: be more of this in the future.

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Speaker 1: John Lee, there underscoring the troubles in the property Sector's

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Speaker 1: house prices fell for a second straight month in July. Meanwhile,

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Speaker 1: the PBOC moved to boost sentiments with a stronger than

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Speaker 1: expected YU one reference rate and the largest short term

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Speaker 1: cash injection since February. The latest inflation data for the

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Speaker 1: UK d you out this morning, is expected to show

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Speaker 1: a slow down in the pace of price rises in July.

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Speaker 1: It comes after figures published yesterday showed wage growth hitting

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Speaker 1: a record high of seven point eight percent. That's led

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Speaker 1: to increase bets on the Bank of England's peak rate

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Speaker 1: hitting six percent. Today's CPI print will be closely watched

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Speaker 1: by policymakers for signs of easing price pressure ahead of

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Speaker 1: the next BOWE meeting in September. Minneapolis FED President Neil

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Speaker 1: Kashkari says ye US inflation is still too high to tolerate.

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Speaker 1: The policymaker says he's been surprised by the resilience of

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Speaker 1: the economy right now.

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Speaker 3: Inflation is coming down We've made some progress, some good progress.

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Speaker 3: I feel good about that it's still too high. The

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Speaker 3: good news is the labor market has remained very strong.

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Speaker 3: But it's a little bit of a double edged sword,

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Speaker 3: because the question in my mind is have we done

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Speaker 3: enough to actually get inflation all the way back down

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Speaker 3: to our two percent mark, or do we have to

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Speaker 3: do more.

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Speaker 1: Kashkari votes on monetary policy this year, ahead of central

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Speaker 1: bankers gathering at Jackson Hole. Many are now asking how

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Speaker 1: long rates will remain high, rather than when will they peak.

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Speaker 1: The philanthropic organization that controls most of the assets in

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Speaker 1: George Soros's twenty five billion dollar family office is set

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Speaker 1: to end the majority of its operations in the European Union.

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Speaker 1: Open Society Foundations says it's making the move because EU

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Speaker 1: institutions are already allocating significant resources to issues like human rights,

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Speaker 1: freedom and pluralism. George Soros handed control of the foundation

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Speaker 1: to his son Alexander in December. In a statement, the

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Speaker 1: organization said it's now undertaking a global review of how

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Speaker 1: it works to support democracy and other philanthropic causes. The

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Speaker 1: debate over debanking in the UK has put fresh focus

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Speaker 1: on those who've difficulty accessing financial services. Figures from the

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Speaker 1: Financial Conduct Authority show one in ten British Muslims don't

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Speaker 1: have a bank account. Bloomberg has spoken to a number

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Speaker 1: of customers who have struggled with the system. Former postman

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Speaker 1: Ikhiel Ahmad says the issue has only gotten any attention

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Speaker 1: because of the controversy over Nigel Farage's account being closed.

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Speaker 4: It's because it's Neidl Forage that this has all compolite

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Speaker 4: and then like now the fact that the heads of

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Speaker 4: banks or having to resign and stuff, are you crazy

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Speaker 4: that Neidl Forage weighed against every other person It's happened

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Speaker 4: two and Naiser Faras weighed heavier than all of us

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Speaker 4: put together.

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Speaker 1: Ahmid's Halifax card was canceled after three decades with the lender.

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Speaker 1: A spokesperson for Halifax's owner, Lloyd's says they meet all

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Speaker 1: regulatory and legal requirements and do not close an account

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Speaker 1: based on a customer's political or personal beliefs, and a

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Speaker 1: US funder is bank rolling massive lawsuits against UK universities

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Speaker 1: for closures during the COVID nineteen pandemic. Pimberg's Human Parts reports.

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Speaker 5: TRGP Capital is spending an undisclosed, amounting roughly one hundred

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Speaker 5: and forty thousand claims against eighteen UK universities. This according

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Speaker 5: to a lawyer involved in the cases. University College London,

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Speaker 5: the University of Manchester and the London School of Economics

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Speaker 5: are among the universities accused of charging full tuition fees

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Speaker 5: for lower quality remote education during the pandemic. Schimung Goldwater

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Speaker 5: is a partner at Asset and Law Office, which is

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Speaker 5: one of the two firms handling the cases. Undergraduate claims

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Speaker 5: a value at an average of five pounds each, adding

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Speaker 5: up to potentially hundreds of millions of pounds in payouts.

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Speaker 5: The first claims are being filed against UCL in the

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Speaker 5: High Court in London. UCL says it respects the right

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Speaker 5: of students to complain, but it's pleased the court has

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Speaker 5: allowed more time to resolve the claims without further litigation

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Speaker 5: in London. I'm you in pots Bloomberg day Break Europe.

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Speaker 1: Those are your top stories, well turning some of the

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Speaker 1: stories that we've caught our eye this morning. On the terminal.

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Speaker 1: We're looking at the debate around unlimited paid time off,

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Speaker 1: something that we've seen tech companies offer in the US

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Speaker 1: in particular, but Bloomberg coasm was speaking to some experts

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Speaker 1: around how employees could take advantage of this policy's benefits.

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Speaker 1: We have some human resources directors being quoted in the

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Speaker 1: piece saying that although you might be offered unlimited paid

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Speaker 1: time off, realistically there's no such thing as unlimited. Taking

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Speaker 1: too much doesn't do very well for someone's career, but

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Speaker 1: taking enough time off is really important, and that it

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Speaker 1: is something that Wendy Edgar from EY recommends managers assess

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Speaker 1: whether it's compatible with a company culture, and it shouldn't

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Speaker 1: make vacation averse middle managers. That's a quote or employees

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Speaker 1: over eager to shirk work, And it's a matter of

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Speaker 1: managing people's expectations around paid time off as well, and

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Speaker 1: that what's important is that if there is an unlimited

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Speaker 1: policy in place, that people shouldn't feel like taking time

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Speaker 1: off will hurt their career prospects as well. And it's

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Speaker 1: often about how people manage their workload that's actually more

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Speaker 1: important to monitor than necessarily the idea of how things

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Speaker 1: are numbers, I suppose in terms of days taken off.

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Speaker 1: That's one of the stories that caught my eye this

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Speaker 1: morning as being of interest. Let's get back though, to

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Speaker 1: the latest on the situation in China. Confidence in China's

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Speaker 1: financial markets worsening by the day, the Center Bank stepping

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Speaker 1: in again to shore up the currency amid worsening economic

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Speaker 1: data and more missed payments in the shadow banking sector

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Speaker 1: of Blimberg Commanian columist Daniel Mass joins us now from More. Daniel,

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Speaker 1: you're writing today about why we should have seen the

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Speaker 1: pboc's rate cut coming earlier this week, should their recent

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Speaker 1: string of bad news not have come as a surprise.

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Speaker 6: One of the big economic surprises of this year has

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Speaker 6: been the fizzling. It's not quite a bust, but a

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Speaker 6: fizzling of the great Chinese rebound. People expected enormous things

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Speaker 6: after COVID zero was dismantled, and there was a spurt

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Speaker 6: in January, February, March, but it began petering out. So

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Speaker 6: if you look at the recent data, you've had disappointment,

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Speaker 6: even on consumer spending, which was supposed to be the

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Speaker 6: bulwark against the greatest slowdown and something no central bank

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Speaker 6: anywhere wants to see, which his price is falling, not

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Speaker 6: inflation at a lower rate. Like Neil Kashkari was talking

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Speaker 6: about a few minutes ago. I mean, price is falling,

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Speaker 6: so why wouldn't there be an interest rate cut? The

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Speaker 6: fact that only one analyst surveyed by Bloomberg predicted this yesterday,

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Speaker 6: it's pretty startling. We just need to adjust our expectations.

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Speaker 6: I mean, why wouldn't there be a rate cut tailor

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Speaker 6: made for it.

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Speaker 1: We've had some more action from the PBOC today, stepping

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Speaker 1: up support for the yu one. Does that tell us

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Speaker 1: more about how seriously the bank and the authorities in

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Speaker 1: China more generally are taking the economic weakness.

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Speaker 6: Well, let's get into what we mean when we say

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Speaker 6: stepping up. So the People's Bank of China and its

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Speaker 6: subsidiaries are never absent from the foreign exchange market in China,

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Speaker 6: So it's a question of how they're calibrating it day

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Speaker 6: by day, month by month, year by If you go

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Speaker 6: back to July two thousand and five, when China abandoned

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Speaker 6: a hard peg to the dollar, one of the ideas

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Speaker 6: was that the exchange rate can move up or down

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Speaker 6: with China's economic cycles and China's economic standing relative to

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Speaker 6: its major trading partners. You don't want this sudden build

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Speaker 6: up and then release that can cause problems like that

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Speaker 6: which happened in twenty fifteen. So having said that, they're

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Speaker 6: always there, they set a daily fixing state banks are

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Speaker 6: active in the market. It's really about what are they

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Speaker 6: doing Once you acknowledge that, and authorities appear happy for

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Speaker 6: the broad trend of a declining you are, they're fine

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Speaker 6: with that. They're not going to buck the economic fundamentals overwhelmingly,

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Speaker 6: but they don't want to weaken too far, too fast.

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Speaker 6: They're not so concerned with a salute levels. Very few

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Speaker 6: authorities are. Actually, it's really about the velocity the moves.

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Speaker 6: Are they smooth? Can they be managed so a gradual decline.

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Speaker 6: There's no evidence that the PBOC wants to stand in

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Speaker 6: that way. It's about how they manage it. And on

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Speaker 6: any given day that could mean they step up, they

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Speaker 6: step back, but they're always present. The idea this is

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Speaker 6: a free floating currency is a myth and it shouldn't

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Speaker 6: be made to sound or look that way.

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Speaker 1: Okay, very important to make that point around smoothing in

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Speaker 1: that part of the market. Look, we have all sorts

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Speaker 1: of strands of kind of worrying news and sectors of

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Speaker 1: the Chinese economy. We've been talking about these missed payments

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Speaker 1: in the shadow banking sector, for example, of a whole

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Speaker 1: string of bad news around property and particularly country garden.

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Speaker 1: What are you watching for the next warning signs to come?

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Speaker 1: What should we be keeping a close eye on?

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Speaker 6: You know, all this assumes we're actually able to see it.

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Speaker 6: You know, one of the disappointing things. Yes, you know,

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Speaker 6: it just sounded like I was applauding the rate cut,

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Speaker 6: and I guess I was. But one of the most

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Speaker 6: disappointing data releases yesterday was that China would suspend publication

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Speaker 6: of indicators on youth unemployment. So we appear to have

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Speaker 6: this pattern emerging whereby annoying, troublesome, recalcitrant economic news, you know,

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Speaker 6: is if not suppressed, then certainly obscured and sometimes not

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Speaker 6: published at all. So in terms of what will be

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Speaker 6: the stress point, you know, we're sort of digging around

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Speaker 6: the backyard with a plastic spoon here. We don't always

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Speaker 6: know what we're looking for and we can't always see it.

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Speaker 6: But the property sector has been one of the legs

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Speaker 6: of the stool of China's economic performance in the past

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Speaker 6: decade decade and a half. Most signs point to a

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Speaker 6: great deal of sickness in the Chinese real estate sector.

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Speaker 6: None of it good, okay.

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Speaker 1: Daniel Masspurmber Opinion, Columbus, thank you so much for joining

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Speaker 1: us with that up next to Jim O'Neil, Slam's bricks

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Speaker 1: currency plan. Why the elite are paying five thousand dollars

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Speaker 1: for a workout now the.

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Speaker 5: Paper review on blue Bird Daybreak Europe. The news you

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Speaker 5: need to know from today's papers.

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Speaker 1: Let's get more on the stories in the newspapers this morning.

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Speaker 1: Bloomberg Lean Gerins is with us in studio for that.

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Speaker 1: Good morning to you, LeAnn. Let's start in the Financial Times.

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Speaker 1: The headline there bricks creator slams quote ridiculous idea for

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Speaker 1: a common currency.

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Speaker 7: Jim O'Neil, the former Goldman Sachs economists who actually coined

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Speaker 7: the bricks acronym in a note that he wrote when

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Speaker 7: he was in that job, has dismissed as ridiculous the

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Speaker 7: notion that the group of emerging nations might develop its

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Speaker 7: own currency to rival the dollar. His comments come just

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Speaker 7: ahead of Brazil, Russia, India, China and South Africa meeting

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Speaker 7: next week to discuss whether to expand the block. This

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Speaker 7: summit that's happening. Joe Burg actually marks fifteen years since

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Speaker 7: the creation of Bricks. Bricks. Nations such as Russia and

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Speaker 7: China are calling for the block to challenge the US

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Speaker 7: dollars status as the world's reserve currency, but South Africa,

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Speaker 7: which is actually hosting this year's summit, has said a

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Speaker 7: common currency is currently not on the agenda at the

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Speaker 7: gathering that's coming up. So Jim O'Neill's argument is basically

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Speaker 7: saying creating a common currency of the five strongly diverging

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Speaker 7: economies is just unfeasible. He also added that the dollar's

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Speaker 7: dominance over the global financial system was not beneficial for

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Speaker 7: emerging countries, so he does recognize that that is part

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Speaker 7: of the argument, but he's just saying right now, this

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Speaker 7: common currency is years away, and also they think thinking

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Speaker 7: of adding more players into the Bricks family in many ways,

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Speaker 7: so things will become even more difficult as the emerging

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Speaker 7: economies are so different.

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Speaker 1: Yeah, I mean, its an interesting point from Jim and

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Speaker 1: neil given his background in this area. I mean, I

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Speaker 1: don't think anyone would argue that creating a common currency

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Speaker 1: is easy. If you look at the challenges the Euro

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Speaker 1: has had, you know, the difficulties of having a separate

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Speaker 1: fiscal and monetary system is extremely difficult, and the challenges,

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Speaker 1: of course, for as you say, such largely diversion economies

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Speaker 1: would be even bigger. But interesting to hear his commentary.

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Speaker 1: Let's go to the Times next lely and the headline

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Speaker 1: there exercise class war cities. Elite pay five thousand dollars

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Speaker 1: to book a gym mat. Yes, but not just one

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Speaker 1: gym map for one class. I just want to make that.

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Speaker 7: Okay, that's a really clear Yeah, it's to reserve a

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Speaker 7: map for an entire season. So there we are. It's

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Speaker 7: a little bit less money than one class. But it's

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Speaker 7: Tracy Anderson. And I don't know if you remember her,

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Speaker 7: but she's got a cult following in the fitness world.

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Speaker 7: She was a trainer to Madonna, Gwyneth Paltrow and Victoria

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Speaker 7: Beckham and for years and years she's been a big

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Speaker 7: player in this space. Now the time says the elite

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Speaker 7: and the Hampton's in the US are going in fighting

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Speaker 7: for a place for her exercise classes. I've been having

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Speaker 7: a look at them online to see if I could

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Speaker 7: handle them, because if you know me, well, I pretty

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Speaker 7: much go to a gym.

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Speaker 6: Class every day.

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Speaker 7: This is the concept. It's in the super hot, humored

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Speaker 7: room and she's completely designed it to target different muscles,

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Speaker 7: so to get the lesser known muscles working. So it's

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Speaker 7: like waits, it's ballet, it's a bit of yoga. But

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Speaker 7: the basic thing about this is it has got so competitive,

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Speaker 7: new members fighting old members paying nine hundred dollars a

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Speaker 7: month plus this additional five five hundred dollars just to

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Speaker 7: reserve a map for the season.

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