WEBVTT - First Republic's Future and Eco Data in Focus

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<v Speaker 1>This is Bloomberg day Break Asia for this Monday, May

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<v Speaker 1>first here in Hong Kong, Sunday April thirtieth in New

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<v Speaker 1>York and coming up today.

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<v Speaker 2>The FDIC formally accepts bids for First Republic Bank after

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<v Speaker 2>the lenders stock plunged last week.

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<v Speaker 1>Traders look ahead to key central bank decisions from the

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<v Speaker 1>FED and the ECB.

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<v Speaker 2>China's manufacturing activity unexpectedly contracts, but the country's tourism and

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<v Speaker 2>consumer activities rise sharply over the holiday weekend.

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<v Speaker 3>Australia's Defense minister citing economic coercion as a reason for

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<v Speaker 3>a revamp military Republicans calling for a White House meeting

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<v Speaker 3>on death, ceiling and spending. Biden turns comedian of the

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<v Speaker 3>correspondence dinner. I'm at Baxter with Global News.

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<v Speaker 4>That's all straight ahead on Bloomberg Daybreak Asia, the business

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<v Speaker 4>news you need to start your day in just one

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<v Speaker 4>fifteen minute podcast available on Apples, Spotify, the Bloomberg Business

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<v Speaker 4>app and everywhere you get your podcasts.

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<v Speaker 1>Good morning, I'm Brian Curtiz.

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<v Speaker 2>And I'm Doug Prisner. Here are the stories we're following today.

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<v Speaker 1>And the big one Doug us authorities stepping in after

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<v Speaker 1>First Republic stock plunge last week, leaving it down ninety

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<v Speaker 1>seven percent. This year, we hear the FDIC asked banks

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<v Speaker 1>including JP Morgan, PNC Financial, and Citizens Financial to submit

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<v Speaker 1>bids to take over the San Francisco based lender. If

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<v Speaker 1>no agreement is reached, regulators would then have the option

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<v Speaker 1>of taking control of First Republic. Democratic Representative Rocanna weighed

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<v Speaker 1>in earlier on CBS's Faced the Nation.

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<v Speaker 5>I think that the FDIC needs to look at the

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<v Speaker 5>lowest cost alternative. That's their mandate, and right now they

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<v Speaker 5>may need to work with banks in private capital to

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<v Speaker 5>save First Republic. I mean that is the state we're in.

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<v Speaker 1>That's Rocanna heard here on Bloomberg. A possible option for

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<v Speaker 1>First Republic is for regulators to use a bid for

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<v Speaker 1>a so called open market solution that have void's formally

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<v Speaker 1>declaring First Republic of failure. The stocks drop, leaving the

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<v Speaker 1>firm with a six hundred and fifty million dollar market value,

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<v Speaker 1>has made such a takeover somewhat more feasible now than before.

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<v Speaker 6>Now.

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<v Speaker 2>At the same time, former US Treasury Secretary Larry Summers

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<v Speaker 2>was saying he's surprised and disappointed that US regulators and

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<v Speaker 2>banking giants don't have a solution for First Republic. He

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<v Speaker 2>told us it's in their best interest to find one.

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<v Speaker 6>The big banks and the government both have a strong

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<v Speaker 6>stake in this situation being contained and resolved. The big

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<v Speaker 6>banks have deposits in First Republic Bank in significant quantity.

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<v Speaker 6>They have a huge stake in the financial system staying stable.

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<v Speaker 2>Former Treasury Secretary Larry Summers there He went on to

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<v Speaker 2>call on regulators essentially to make it clear that uninsured

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<v Speaker 2>depas it's in First Republic are going to be okay.

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<v Speaker 2>He warned of the danger of contagion to other banks.

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<v Speaker 1>Meantime, Federal Reserve policymakers meet this week, with another interest

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<v Speaker 1>rate increase considered likely. Bloomberg's Larry Kofski has more on

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<v Speaker 1>the story.

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<v Speaker 7>The Fed's steepest rate tightening campaign in decades is nearing

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<v Speaker 7>an end. Officials will be considering how much more pain

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<v Speaker 7>they need to inflict to restore price stability while trying

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<v Speaker 7>not to send the economy off a cliff or pushing

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<v Speaker 7>already creaking banking system into crisis. The fed's two day

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<v Speaker 7>meeting begins Tuesday. Similar deliberations are likely as officials at

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<v Speaker 7>the European Central Bank and the Bank of England meet

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<v Speaker 7>over the next two weeks. I'm Larry Kovski Bloomberg day

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<v Speaker 7>Break Asia.

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<v Speaker 2>Well, it will be a busy week for economic data

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<v Speaker 2>along with a full plate of corporate earnings. We have

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<v Speaker 2>a preview from Bloomberg's Charlie Pellett.

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<v Speaker 8>It has been a story of strong corporate results counteracting

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<v Speaker 8>concerns over persistent inflationary pressures. Lindsey row Listener is portfolio

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<v Speaker 8>manager at PGUM Fixed Income.

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<v Speaker 9>What we heard, I think resoundingly through the earnings that

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<v Speaker 9>we've received, is that recession launch is going to have

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<v Speaker 9>to happen next quarter. The guides so far from companies

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<v Speaker 9>that we've heard are actually not terrible.

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<v Speaker 8>Apple will be closely watched on Thursday. Earlier in the week,

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<v Speaker 8>it's Qualcomm and AMD. We'll also hear this week from

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<v Speaker 8>automakers Ford and Ferrari, along with Uber, Marriott, Ffeizer, Starbucks,

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<v Speaker 8>Young brands, and oil giants BP, Shell, Conico, Phillipson, Phillips

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<v Speaker 8>sixty six in New York, Charlie Pellett Bloomberg Daybreak Asia.

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<v Speaker 1>And as Doug mentioned earlier, China's economy is sending mixed messages.

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<v Speaker 1>Let's get the story from Bloomberg's Bonnie ou.

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<v Speaker 10>China's manufacturing activity unexpectedly contracted last month. The official PMI

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<v Speaker 10>from from fifty one point nine to forty nine point

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<v Speaker 10>two in March, and growth and services and constructions slowed

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<v Speaker 10>more than expected. The non manufacturing PMI came in at

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<v Speaker 10>fifty six point four, down from fifty eight point two.

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<v Speaker 10>But as the five day Labor Day holiday begins, China's

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<v Speaker 10>tourism and consumer activities roast shoply data showed major retail

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<v Speaker 10>and catering company sales jumped twenty one percent from a

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<v Speaker 10>year ago. The conflicting data show is still unclear if

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<v Speaker 10>the recovery can be sustained in Hong Kong. I'm Bonniel

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<v Speaker 10>Bloomberg day Break Asia.

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<v Speaker 1>I'm Brian Curtis, along with Doug Prisner. Vonnie Quinn will

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<v Speaker 1>join us in a few moments, SI, Doug First, Republic

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<v Speaker 1>Bank really the story of the day today on this Sunday,

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<v Speaker 1>and it's another one of these cases where you know,

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<v Speaker 1>the banks hanging in the balance and regulators are hoping

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<v Speaker 1>that a sale can be made because that's smooth. And then,

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<v Speaker 1>as we pointed out in our story. If that doesn't happen,

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<v Speaker 1>the state regulators would would likely step in and close

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<v Speaker 1>the bank, and then the FDIC would then be appointed receiver.

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<v Speaker 2>I was struck by the interview that Charlie Munger gave

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<v Speaker 2>the Ft over the weekend. He we know, being the

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<v Speaker 2>vice chairman of Berkshire Hathway, he's got his pulse on

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<v Speaker 2>a lot of things, including many of the big banks.

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<v Speaker 2>He was saying that the storm is brewing basically in

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<v Speaker 2>the commercial real estate property market, and he went on

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<v Speaker 2>to say that American banks are full of bad loans

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<v Speaker 2>given the drop that we've seen in property prices, and

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<v Speaker 2>as we know, Brian, with what has been happening in

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<v Speaker 2>the bond market, the value of many of those securities

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<v Speaker 2>now at much much lower levels.

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<v Speaker 1>The question is does it impact earnings and thus the

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<v Speaker 1>stocks fall significantly, or does it become such an issue

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<v Speaker 1>that these banks are then in trouble. And we see

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<v Speaker 1>that now with First Republic, and we actually saw the

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<v Speaker 1>closure of banks before, and so that definitely is something

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<v Speaker 1>to look out for. I wanted to talk a little

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<v Speaker 1>bit about China because it very much was mixed, the

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<v Speaker 1>services and manufacturing sectors coming in very different than expected.

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<v Speaker 1>Non manufacturing pretty decent at fifty six point four, albeit

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<v Speaker 1>down from the previous month, But manufacturing contracting sends a

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<v Speaker 1>bad signal, and then all of a sudden you get

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<v Speaker 1>the beginning of the holiday where you have travel booking

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<v Speaker 1>soring something like seven hundred percent and even getting stronger

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<v Speaker 1>than what we had pre pandemic. So it's hard to figure.

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<v Speaker 1>It'll be interesting to see how the markets interpret these

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<v Speaker 1>numbers today.

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<v Speaker 2>Yeah, that PMI for China on the manufacturing side, definitely

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<v Speaker 2>a disappointment and maybe a little bit discouraging. The question

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<v Speaker 2>for today, though, Brian, is whether or not that trade

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<v Speaker 2>data for South Korea will reinforce that notion.

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<v Speaker 1>Yeah, it's all up there. We won't get a lot

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<v Speaker 1>of market action today, so it's not like we'll be

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<v Speaker 1>getting strong signals, but we're certainly watching what we do get.

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<v Speaker 1>It's time now for Global news. Australia's Defense Minister Richard

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<v Speaker 1>Marles is citing economic coercion as a motivator for a

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<v Speaker 1>revamped military at Baxter has Global News from the nine

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<v Speaker 1>to sixty news room in San Francisco.

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<v Speaker 3>Yeah, that's right, Brian Marless flag potential intimidation and pressure

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<v Speaker 3>on the global rules based order. Those are his words,

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<v Speaker 3>he says, as At pursues sweeping changes to its military

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<v Speaker 3>strategy amid China's rise. Maril's on ABC Australia says, the

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<v Speaker 3>fear of not being invaded.

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<v Speaker 11>When you look at the way in which great power

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<v Speaker 11>contest is playing out, and particularly in our region, you

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<v Speaker 11>look at that military build up and you look at

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<v Speaker 11>our exposure to that throughout a much greater economic connection

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<v Speaker 11>to the world, we are much more vulnerable to coercion

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<v Speaker 11>than we've ever been before.

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<v Speaker 3>And Mars says a nation has to be prepared as

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<v Speaker 3>traded with China's increased in the recent past and is

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<v Speaker 3>more and more reliant on fuel from Russia.

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<v Speaker 11>And what that means is we need a defense force

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<v Speaker 11>which has a much greater power or ability to engage

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<v Speaker 11>in projection because so much of what we need to

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<v Speaker 11>do is beyond our.

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<v Speaker 3>Short Yeah, military has to be more focused on defense,

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<v Speaker 3>he says. Ahead of President Ferdinand Marcos Philippines visit the

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<v Speaker 3>United States, the State Department has put out a statement

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<v Speaker 3>saying the US will defend free transit in the South

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<v Speaker 3>China Sea. An armed attack on Philippine Armed Forces aircraft

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<v Speaker 3>or naval vessels would trigger US defense commitments. Beijing has

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<v Speaker 3>said that its maneuvers in the recent days they're professional

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<v Speaker 3>and restrained, and says the US must not interfere. Republicans

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<v Speaker 3>in the US are calling on President Joe Biden to

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<v Speaker 3>come to the table and talk about debt ceiling and spending.

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<v Speaker 3>Congressman Steve Scalise on ABC says their budget package is

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<v Speaker 3>just common sense.

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<v Speaker 11>We put in the bill are very basic common sense

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<v Speaker 11>things like let's have some work requirements for able bodied

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<v Speaker 11>people who want to get welfare benefits. Shouldn't they at

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<v Speaker 11>least be looking.

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<v Speaker 8>For work now.

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<v Speaker 3>Scalise on ABC is heard here on Bloomberg Today, but

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<v Speaker 3>Senator Chuck Schumer says it will not fly in the Senate.

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<v Speaker 12>Their plan means fewer jobs, higher costs for New York families.

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<v Speaker 12>It would leave policemen, first responders, border patrol, grave veterans

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<v Speaker 12>all hanging out to drive.

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<v Speaker 3>Yeah. Schumer says it weakens a fight against opioids, cuts childcare, clothes,

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<v Speaker 3>social security offices, restricts healthcare, reduces efforts to bring jobs

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<v Speaker 3>back to the US from China. And President Joe Biden

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<v Speaker 3>at the White House Correspondence dinner last night, talking several

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<v Speaker 3>serious issues like Fox, defamation, freedom the press, promised to

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<v Speaker 3>work to secure the release of journalists and America national

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<v Speaker 3>held by foreign governments. But then hold on, hold on,

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<v Speaker 3>who is a new comic on the block?

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<v Speaker 4>I believe in the First Amendment, not just because my

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<v Speaker 4>good friend Jimmy Madison wrote it.

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<v Speaker 3>And Ron de Santa, Where's.

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<v Speaker 4>Re election is?

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<v Speaker 6>Gonor?

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<v Speaker 2>He was asked if he had a man date, He said, hell.

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<v Speaker 3>No, I'm straight Trump.

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<v Speaker 6>Headline Biden's advanced days.

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<v Speaker 4>The big issue Trump's, however.

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<v Speaker 3>Is not and maybe the best for Lass saying, please

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<v Speaker 3>enjoy yourselves tonight, but please take care if you find.

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<v Speaker 4>Yourself disoriented to confuse, it's either your drunk or Marjorie

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<v Speaker 4>Taylor Green.

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<v Speaker 3>Global News powered by more than seven hundred journalists and

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<v Speaker 3>and listen over one hundred and twenty countries in San Francisco.

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<v Speaker 3>I'm d Baxter, and this is Bloomberg.

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<v Speaker 1>And I'm Brian Curtis along with Vonnie Quinn, Doug Krisner

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<v Speaker 1>is looking at markets and at backstraw News. Let's get

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<v Speaker 1>to our guest, the esteemed William Lee, chief economist at

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<v Speaker 1>the Milken Institute. So Bill great to have you with

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<v Speaker 1>us on the program. I know you want to you

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<v Speaker 1>want the FED to stay vigilant here, and that would

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<v Speaker 1>appear to be consensus, so we don't need to spend

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<v Speaker 1>a lot of time sort of describing why you think

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<v Speaker 1>that should be the case. I am interested, though, in

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<v Speaker 1>your response to this, that we did see growth fall

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<v Speaker 1>pretty rapidly right at the end of the first quarter,

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<v Speaker 1>hence the first quarter GDP plummeting down to one point

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<v Speaker 1>one percent when it was looking like two and a

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<v Speaker 1>half percent really just a few weeks before that. Does

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<v Speaker 1>that rapid fall in growth eventually drag inflation lower? Or

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<v Speaker 1>is this a big part of the quandary?

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<v Speaker 13>Brian? That is the question. But you know, is it

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<v Speaker 13>it great that we finally start to see the economy

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<v Speaker 13>slow down after all of the huge amount of increases

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<v Speaker 13>that we've seen and the quantitative tightening and now some

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<v Speaker 13>fears of credit contraction because of the banking issues that

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<v Speaker 13>are popping up, but we are seeing as spalling. And

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<v Speaker 13>the most important number that hasn't really been a report

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<v Speaker 13>a lot is the last quarter we saw gross domestic

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<v Speaker 13>income actually fall turn negative. So that really means that

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<v Speaker 13>the strong consumption that we've been seeing fueling the US

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<v Speaker 13>growth may be slowing down because the fuel of income

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<v Speaker 13>growth is something that is starting to be constrained. Even

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<v Speaker 13>though the job market remains very strong and we have

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<v Speaker 13>very low unemployment rate, income itself is the constraining factor

0:12:41.600 --> 0:12:42.240
<v Speaker 13>on consumption.

0:12:42.440 --> 0:12:45.640
<v Speaker 14>It's the very very first signs of this though, right Billy,

0:12:45.679 --> 0:12:47.800
<v Speaker 14>ECI still rose by one point two percent of the

0:12:47.840 --> 0:12:49.959
<v Speaker 14>first quarter, which is more than forecast and up from

0:12:49.960 --> 0:12:51.600
<v Speaker 14>the revised one point one percent.

0:12:52.480 --> 0:12:55.079
<v Speaker 13>Funny, there's no question inflation is still with us, and

0:12:55.440 --> 0:12:58.559
<v Speaker 13>we're talking not just price inflation, but wage inflation. And

0:12:59.120 --> 0:13:01.920
<v Speaker 13>right now, with the wages growing at above four percent,

0:13:02.240 --> 0:13:06.200
<v Speaker 13>that's consistent with well above two percent inflation target. So

0:13:06.440 --> 0:13:09.280
<v Speaker 13>we really do have to get that inflation down. But

0:13:09.559 --> 0:13:12.240
<v Speaker 13>the fact that the slowdown is beginning is starting to

0:13:12.440 --> 0:13:14.960
<v Speaker 13>at least bring some relief to so much. Former colleagues

0:13:14.960 --> 0:13:17.360
<v Speaker 13>at the said that are wondering, gee, has the economy

0:13:17.360 --> 0:13:21.880
<v Speaker 13>turned such that it's become invulnerable to rate increases? Well,

0:13:22.000 --> 0:13:24.559
<v Speaker 13>I think the answer is coming through. No, it's not invulnerable.

0:13:25.840 --> 0:13:27.440
<v Speaker 13>It just took a little bit more time than they thought.

0:13:28.360 --> 0:13:31.760
<v Speaker 1>Obviously, the big story today Bill is first Republic Bank

0:13:31.800 --> 0:13:34.640
<v Speaker 1>and what happens and why the rush on this Sunday?

0:13:34.679 --> 0:13:37.640
<v Speaker 1>Does it matter if a deal doesn't get done? Why

0:13:37.720 --> 0:13:41.560
<v Speaker 1>wouldn't a deal get done? Given the First Republic's market

0:13:41.600 --> 0:13:44.240
<v Speaker 1>cap is now just a fraction of what it used

0:13:44.240 --> 0:13:47.920
<v Speaker 1>to be. Do you see this as as something that's

0:13:48.040 --> 0:13:49.640
<v Speaker 1>key that needs to be done today?

0:13:50.840 --> 0:13:53.800
<v Speaker 13>Absolutely not, Brian. I think we've talked ourselves into a

0:13:53.840 --> 0:13:57.200
<v Speaker 13>tizzy about all this bank problems that we're having. We've

0:13:57.280 --> 0:14:00.400
<v Speaker 13>discovered that among the over four thousand banks, it's a

0:14:00.400 --> 0:14:02.560
<v Speaker 13>whole bunch of them are really badly managed, and a

0:14:02.559 --> 0:14:05.839
<v Speaker 13>lot of them are pretty excised banks. Silicon Valley was

0:14:05.880 --> 0:14:09.440
<v Speaker 13>the fourteenth argest bank, were sixteenthlargest bank, and First the

0:14:09.440 --> 0:14:11.400
<v Speaker 13>Public is the forty sixteen one. You know, it's one

0:14:11.400 --> 0:14:15.040
<v Speaker 13>of those numbers. So we're talking about fairly sizable banks.

0:14:15.240 --> 0:14:17.760
<v Speaker 13>But each of these banks that have failed started to

0:14:18.440 --> 0:14:21.720
<v Speaker 13>specialize their their business models to cater to high net

0:14:21.800 --> 0:14:24.880
<v Speaker 13>worth individuals who are very sensitive to their returns and

0:14:24.880 --> 0:14:27.400
<v Speaker 13>they'll move their deposits on a dime if they find

0:14:27.400 --> 0:14:30.640
<v Speaker 13>better investment opportunities, or we find them dealing with crypto

0:14:31.160 --> 0:14:34.000
<v Speaker 13>based banks, or we're dealing with a bank that has

0:14:34.040 --> 0:14:39.840
<v Speaker 13>specialized in providing venture capitals and Philici value firs.

0:14:39.880 --> 0:14:42.200
<v Speaker 1>But Billy, you heard Larry Summers. They're saying we're playing

0:14:42.200 --> 0:14:42.960
<v Speaker 1>with fire here.

0:14:44.360 --> 0:14:48.160
<v Speaker 13>Yeah, you know we are. And what I'm asking myself

0:14:48.240 --> 0:14:51.000
<v Speaker 13>is is Larry worried about a campfire getting out of control?

0:14:51.320 --> 0:14:53.600
<v Speaker 13>Or is worried about a forest fire? And I think

0:14:54.400 --> 0:14:56.040
<v Speaker 13>you know, when you look at the amount of bank

0:14:56.120 --> 0:14:58.960
<v Speaker 13>lending in the United States, as far as financing goes,

0:14:59.080 --> 0:15:01.840
<v Speaker 13>it's about twelve percent of all non financial corporate financing.

0:15:02.120 --> 0:15:05.240
<v Speaker 13>So most companies in the United States raise capital through

0:15:05.400 --> 0:15:09.440
<v Speaker 13>equity markets, bond markets, and banks are really critical for

0:15:09.600 --> 0:15:12.920
<v Speaker 13>one segment of the economy, small and medium sized businesses

0:15:13.400 --> 0:15:16.320
<v Speaker 13>and the commercial real estate market. And yes, if the

0:15:16.440 --> 0:15:20.080
<v Speaker 13>banks fail in this in this smaller bank area, then

0:15:20.160 --> 0:15:23.080
<v Speaker 13>the most hard hit companies will be the small the

0:15:23.080 --> 0:15:25.800
<v Speaker 13>medium sized businesses, who are, by the way, the most

0:15:25.800 --> 0:15:29.360
<v Speaker 13>important set of businesses for employment. So what we'll see

0:15:29.480 --> 0:15:31.480
<v Speaker 13>is WHI could see a big hit in the labor

0:15:31.520 --> 0:15:34.200
<v Speaker 13>market if these companies start to lay off people. But

0:15:34.240 --> 0:15:36.960
<v Speaker 13>we haven't seen that yet. We've seen only Silicon Valley

0:15:37.240 --> 0:15:40.400
<v Speaker 13>guys worried about their payrolls because they stufft all their

0:15:40.440 --> 0:15:43.800
<v Speaker 13>money with one bank because they have sweetheart deals, and

0:15:43.840 --> 0:15:46.280
<v Speaker 13>now we have first Republic who is catered to high

0:15:46.280 --> 0:15:49.640
<v Speaker 13>networth individuals, and quite frankly, you know these guys have

0:15:49.760 --> 0:15:51.920
<v Speaker 13>other assets. Not all of their money is in a

0:15:51.960 --> 0:15:54.360
<v Speaker 13>bank deposit the way a lot of you know, poor

0:15:54.400 --> 0:15:54.880
<v Speaker 13>people do.

0:15:55.560 --> 0:15:58.920
<v Speaker 14>It is true that minks would likely loan out a

0:15:58.960 --> 0:16:01.000
<v Speaker 14>little bit less over the next six month, which will

0:16:01.040 --> 0:16:03.200
<v Speaker 14>be a little bit of a buffer for the economy

0:16:03.200 --> 0:16:05.520
<v Speaker 14>as well. What does that mean for how high the

0:16:05.560 --> 0:16:07.240
<v Speaker 14>FED will have to go on how long it'll keep

0:16:07.280 --> 0:16:07.800
<v Speaker 14>it there.

0:16:08.600 --> 0:16:11.400
<v Speaker 13>Ronnie, I think one of the answers to that question

0:16:11.440 --> 0:16:14.360
<v Speaker 13>comes out of the basebook. They said, we've discovered in

0:16:14.560 --> 0:16:17.600
<v Speaker 13>canvassing all of the banks in our various districts that

0:16:17.920 --> 0:16:20.840
<v Speaker 13>the amount of lending will contract, but not because of supply.

0:16:21.160 --> 0:16:24.520
<v Speaker 13>It's because the demand for lending has really eased off

0:16:24.520 --> 0:16:27.480
<v Speaker 13>a bit because people are worried about the coming slowdown.

0:16:27.520 --> 0:16:29.920
<v Speaker 13>They're not going to be investing in inventories that aren't

0:16:29.920 --> 0:16:31.880
<v Speaker 13>going to be sold. They're not going to be expanded

0:16:31.920 --> 0:16:34.720
<v Speaker 13>the capacity if the economy is slowing down. So it's

0:16:34.720 --> 0:16:36.960
<v Speaker 13>really the contraction of loans is coming from the lack

0:16:37.000 --> 0:16:39.680
<v Speaker 13>of demand, not lack of supply. And that's really important

0:16:39.680 --> 0:16:40.440
<v Speaker 13>thing to keep in mind.

0:16:40.920 --> 0:16:45.239
<v Speaker 1>Another big question in markets today will be the China recovery,

0:16:45.280 --> 0:16:48.080
<v Speaker 1>whether or not as stumbling as suggested by the big

0:16:48.160 --> 0:16:51.960
<v Speaker 1>drop in manufacturing. We had a contraction there and manufacturing

0:16:51.960 --> 0:16:55.480
<v Speaker 1>in the previous month, but then the travel sales looking

0:16:55.520 --> 0:16:59.280
<v Speaker 1>pretty solid. Here we had our old friend hung how

0:16:59.360 --> 0:17:02.600
<v Speaker 1>from growing Esman say, China is a country of big numbers,

0:17:02.680 --> 0:17:05.520
<v Speaker 1>but numbers as big as these still stun even old

0:17:05.520 --> 0:17:09.480
<v Speaker 1>hands like me. So your take on China and how

0:17:09.600 --> 0:17:12.479
<v Speaker 1>things I mean there, I have to say there definitely

0:17:12.480 --> 0:17:16.359
<v Speaker 1>are some caveats in the media review. Later I'll report that, yeah,

0:17:16.400 --> 0:17:18.720
<v Speaker 1>we had one hundred and sixty five thousand Mainlanders come

0:17:18.720 --> 0:17:21.359
<v Speaker 1>to Hong Kong in one day, but then one hundred

0:17:21.359 --> 0:17:23.960
<v Speaker 1>and ten thousand left at night. They didn't stay in hotels,

0:17:24.160 --> 0:17:27.639
<v Speaker 1>So there are caveats, but on balance it's looking pretty solid.

0:17:27.640 --> 0:17:30.600
<v Speaker 13>Your thoughts, Brian, I am so glad that China has

0:17:30.640 --> 0:17:33.320
<v Speaker 13>proven to be as difficult to forecast as other large

0:17:33.359 --> 0:17:37.200
<v Speaker 13>advanced economies. And you know the manufacturing sector has slowed

0:17:37.200 --> 0:17:39.240
<v Speaker 13>down because we know the global economy is slowing down,

0:17:39.280 --> 0:17:42.240
<v Speaker 13>manufacturing is blowing down. People aren't buying as much stuff

0:17:42.280 --> 0:17:44.640
<v Speaker 13>as they were before. But the one thing we all

0:17:44.680 --> 0:17:48.200
<v Speaker 13>expected was the opening up of the COVID restrictions would

0:17:48.240 --> 0:17:51.560
<v Speaker 13>cause the Chinese people to start spending like crazy. Well

0:17:51.680 --> 0:17:54.320
<v Speaker 13>they started to do that, but then it seems as

0:17:54.320 --> 0:17:56.639
<v Speaker 13>though the amount of spending may be petering out, unless,

0:17:56.640 --> 0:17:59.040
<v Speaker 13>of course you thought about travel. So yes, there ourselves

0:17:59.040 --> 0:18:01.800
<v Speaker 13>whole bunch of next picture coming through, and I think

0:18:01.800 --> 0:18:02.920
<v Speaker 13>it's going to take a little bit of time to

0:18:02.960 --> 0:18:06.560
<v Speaker 13>sort out where are the Chinese consumers spending and how

0:18:06.600 --> 0:18:10.200
<v Speaker 13>persistent will that spending be? Can they continue to spend

0:18:10.280 --> 0:18:12.320
<v Speaker 13>strongly through the rest of the year and into next

0:18:12.359 --> 0:18:16.440
<v Speaker 13>year if their income is uncertain because of the huge

0:18:16.440 --> 0:18:20.040
<v Speaker 13>amount of use unemployment, and because the real estate market

0:18:20.080 --> 0:18:23.360
<v Speaker 13>wealth is still tied up in a clagmire and they're

0:18:23.359 --> 0:18:25.679
<v Speaker 13>not sure how much wealth they have. So yes, the

0:18:25.800 --> 0:18:29.640
<v Speaker 13>big surge in spending took place, but will it persist?

0:18:29.640 --> 0:18:32.080
<v Speaker 13>And that's been the big open question for China.

0:18:32.119 --> 0:18:34.480
<v Speaker 14>Bill, you're the chief economist at the Milican Institute. Channel

0:18:34.480 --> 0:18:37.280
<v Speaker 14>has its big global conference this we have to ask

0:18:37.320 --> 0:18:39.320
<v Speaker 14>you which of the panels you're most excited about. What

0:18:39.400 --> 0:18:41.680
<v Speaker 14>question you want to answer? Given that there's everything from

0:18:42.040 --> 0:18:46.320
<v Speaker 14>AI presenting potential regulation lags and risks to the health

0:18:46.320 --> 0:18:47.040
<v Speaker 14>equity movement.

0:18:47.720 --> 0:18:49.320
<v Speaker 13>Well, I hate to trump in my own horn, but

0:18:49.560 --> 0:18:52.000
<v Speaker 13>I must say my own panel, which is a private

0:18:52.040 --> 0:18:54.920
<v Speaker 13>session on the FED and the consequences of the credit

0:18:54.960 --> 0:18:58.679
<v Speaker 13>contraction for the US and global economy to me the

0:18:58.920 --> 0:19:01.320
<v Speaker 13>key topic. But I must say my colleagues have put

0:19:01.359 --> 0:19:04.840
<v Speaker 13>together a phenomenal program of AI and other things. And

0:19:04.840 --> 0:19:07.639
<v Speaker 13>in fact, Mike Nolkin has told every one of the staff,

0:19:08.000 --> 0:19:10.280
<v Speaker 13>each one of you has got to find out something

0:19:10.280 --> 0:19:12.520
<v Speaker 13>you didn't know before. Go to sessions that you would

0:19:12.560 --> 0:19:15.040
<v Speaker 13>never gone to and learn something, because that's the whole

0:19:15.040 --> 0:19:17.760
<v Speaker 13>point of this. We're attracting people from all over the world,

0:19:17.840 --> 0:19:20.960
<v Speaker 13>expertsly different field and the whole point of this conference

0:19:21.080 --> 0:19:23.480
<v Speaker 13>is to have people talk to people they wouldn't have

0:19:23.520 --> 0:19:27.040
<v Speaker 13>talked normally.

0:19:27.400 --> 0:19:30.200
<v Speaker 1>This is Bloomberg Daybreak Asia, your morning brief on the

0:19:30.320 --> 0:19:33.920
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