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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jai Ley.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. It

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Speaker 1: is good to speak to David Harrow. He is one

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Speaker 1: of the world's great international investors that does well when

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Speaker 1: international stocks does well, and does less well when it

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Speaker 1: is a struggle, and it has been a struggle. David,

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Speaker 1: you are in the fabric of the Midwest. You're coming

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Speaker 1: to us from Wisconsin today and you're based out of Chicago.

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Speaker 1: This unrest that we see, I know it doesn't affect

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Speaker 1: your investment strategy. I know you're gonna tell us that,

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Speaker 1: but it colors the international tone. How does the unrest

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Speaker 1: of America change international investment forward? Well, it depends whether

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Speaker 1: this becomes a permanent part of the fabric of our society.

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Speaker 1: This unrest and this divisiveness. I think if it's just

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Speaker 1: a passing uh storm, then will you know it won't

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Speaker 1: have any impact. If this divisiveness continues to elevate and persist,

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Speaker 1: perhaps it will put a tiny little risk premium, all

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Speaker 1: else equal on the US equities. But you know, I

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Speaker 1: do believe our country will get over this. Um. This

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Speaker 1: is something that I think the wrong people are taking

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Speaker 1: advantage of what was a bad situation, and it brought

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Speaker 1: out the worse than certain people, a certain small, small,

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Speaker 1: small element. And I think we're going to get over

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Speaker 1: this where we're a good country, that the people here

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Speaker 1: are basically inherently good people, and we're and we'll get

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Speaker 1: control of this and and this storm will pass. We

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Speaker 1: talked to the Technology Capitalism Minister and Mrs Vista Vesteiger

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Speaker 1: Rather of Brussels earlier this morning, and she is many

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Speaker 1: Americans would suggest anti tech, David, from where you stand

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Speaker 1: in investment, American technology reigns supreme. Is it still a value? Um?

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Speaker 1: I think in some places you could find reasonable prices

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Speaker 1: in American tech, and specifically in Alphabet. In our global portfolios,

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Speaker 1: we still have a large position in Alphabet because we

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Speaker 1: believe if you mark the market cash and their assets

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Speaker 1: and give them credit for some of the things they've

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Speaker 1: been doing and investing, that it's still very much of value.

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Speaker 1: It trades add or below the market multiple when you

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Speaker 1: make those necessary valuation adjustments, and it really should trade

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Speaker 1: well above the market multiple. David, there's an argument about

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Speaker 1: value coming back finally over growth, which has benefited most

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Speaker 1: over the past few years. And this is something that

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Speaker 1: you adhere to and have underperformed as a result of it.

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Speaker 1: In your recent letter to the shareholders, you are apologetic

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Speaker 1: about it. Why do you believe that's set to change?

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Speaker 1: Because I, ultimately I believe that businesses and stocks really

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Speaker 1: are financial assets, and that the price of these financial

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Speaker 1: assets is an important aspect what makes them attractive. If

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Speaker 1: you could get certain businesses at a fraction of what

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Speaker 1: they're worth, they're worth being determined by their free cash

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Speaker 1: flow streams. Again, this is the predication that we believe

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Speaker 1: a company is valuable based on what it's able to

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Speaker 1: generate in terms of free cash flow. And if you

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Speaker 1: look at the prices some of these industrial businesses in particular,

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Speaker 1: are selling at that price. Ultimately will matter what price

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Speaker 1: matters when you buy anything now for a while, now,

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Speaker 1: for a long while, almost a better part of a decade,

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Speaker 1: prices taken a back seat. But when the dispersion between

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Speaker 1: two classes of assets will call growth assets for lack

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Speaker 1: of better word, and value assets reads reaches such a

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Speaker 1: large level, you're bound to see a rebalancing, especially since

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Speaker 1: when it starts when people start to get interested in

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Speaker 1: value assets again, the door to get into these assets

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Speaker 1: is very, very small because they've been so heavily sold

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Speaker 1: their trading at very very low market kept. So my

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Speaker 1: argument is that I don't know exactly when this will happen,

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Speaker 1: but when it does happen, you will see such a

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Speaker 1: snapback because there's so little involvement in these assets today.

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Speaker 1: And to me, this is one of the big opportunities

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Speaker 1: in investing. We're all saying, well, you know, the US

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Speaker 1: market is starting to look prices etcetera, etcetera. But then again,

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Speaker 1: you could look at segments of the stock market, and

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Speaker 1: especially if you were to look at my area, international value.

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Speaker 1: I mean, this is probably the worst four or five

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Speaker 1: months I've had in thirty four years, and it's the

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Speaker 1: companies aren't just falling apart and going bankrupt. A lot

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Speaker 1: of these businesses are actually going to come out of

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Speaker 1: this just fine and doing very well, and yet they're

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Speaker 1: still down thirty, forty or fifty percent year to date,

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Speaker 1: And to us, this really represents opportunity. If you could

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Speaker 1: get quality business franchises selling that low single digit price,

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Speaker 1: the cash flow multiples businesses with good balance sheets and

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Speaker 1: good cash flow streams. Think of a Daimler BMW in Germany,

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Speaker 1: or some some of the companies in the in the

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Speaker 1: European financial sector like a BNP Perry Bar, or industrial

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Speaker 1: businesses like a Glencore. If you could get these businesses

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Speaker 1: this cheap, this is the time, in our view to

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Speaker 1: be buying them. David. We've got a taste of that

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Speaker 1: last way concertain segments of this market, specifically the financials

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Speaker 1: and specifically in Europe too, but some of that was

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Speaker 1: largely a top down story. I hope that European politicians

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Speaker 1: got their act together and move forward with fiscal stimulus

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Speaker 1: and some form of debt mutualization as well. David, I

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Speaker 1: guess my question for you, so someone who focus is

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Speaker 1: much more on bottom up, whether those traits in Europe

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Speaker 1: that we got a flavor of performing last week, whether

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Speaker 1: they depend on Europe getting its act together at a

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Speaker 1: European level. I don't know if Europe will ever get

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Speaker 1: its act together, to be honest, because it's just almost

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Speaker 1: impossible for them to do so. You have so many uh,

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Speaker 1: different agendas within the EU. It's it's hard to get

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Speaker 1: any kind of a consensus. What I think will propel

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Speaker 1: these and awaken these evaluations, it's just through the economic recovery,

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Speaker 1: as people get back to work and as economies reopened.

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Speaker 1: And I think this is the real story. Europe came

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Speaker 1: into this a bit earlier. Remember Italy and Spain, um

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Speaker 1: generally speaking, Europe came into this COVID nineteen crisis a

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Speaker 1: little earlier. And you're shut down pretty hard, and they're

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Speaker 1: kind of starting to open in many ways earlier. I

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Speaker 1: mean you see italyst opening today and almost completely opening,

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Speaker 1: and the German kids went back to school I think

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Speaker 1: in April, and so you're beginning to see normalization. That

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Speaker 1: will be the light at the end of this dark

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Speaker 1: economic tunnel, and that to me is what will awaken

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Speaker 1: some of these value stories, is it becomes evident that

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Speaker 1: these companies made it through the storm. Now the icing

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Speaker 1: on the cake will be at the European Union could

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Speaker 1: ever get their act together, and if, for instance, the

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Speaker 1: Europeans and the British could ever decide on a trade agreement,

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Speaker 1: this will be icing on the cake. Both of these

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Speaker 1: have some potential, but I think that these things are

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Speaker 1: not needed for this recovery to really take off. What's

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Speaker 1: needed for the stock market recovering Europe to take off

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Speaker 1: is for the economies to reopen in the light at

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Speaker 1: the end of the economic tunnel, and I think that

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Speaker 1: will be enough to um shine some light on these

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Speaker 1: values that I've been talking about. David, just real quick here,

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Speaker 1: I'm wondering how much your outlook for Europe depends on

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Speaker 1: its relationship with China remaining at least where it is

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Speaker 1: now and not deteriorating further amid a backdrop of rising

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Speaker 1: US China tensions and sort of pressure that they take

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Speaker 1: some sort of stance here. Yeah, this this is an

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Speaker 1: important question because the Europeans as well as the Americans.

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Speaker 1: You know, the year Year is a big exporting nation

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Speaker 1: in Germany, Italy, France, They're big exporting nations and one

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Speaker 1: of their big exporting clients is China, as well as

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Speaker 1: the US and as well as the UK, and so

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Speaker 1: these economic relationships, the stability of these economic relationships are

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Speaker 1: going to be important, you know, as these economies recover.

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Speaker 1: So I do think that is an important factor to watch.

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Speaker 1: Um the US actually it's a little bit less so

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Speaker 1: where the US is actually a little less dependent on

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Speaker 1: China for its exports. Certain sectors are very dependent if

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Speaker 1: you look at like Boeing as an example, and the

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Speaker 1: and the egg sector. But for the most part, I

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Speaker 1: think um exports that are most at risk for a

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Speaker 1: destabilized China the Europeans. This is something you have to watch.

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Speaker 1: David Harrow, thank you so much. With Harris associates, thrill

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Speaker 1: that he could be with us today. We're so to

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Speaker 1: bring you right now on Bloomberg surveillance. Richard Hass. He

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Speaker 1: has Oberlin seventy three, which means he and I have

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Speaker 1: the memories of the tumult of the late Vietnam War.

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Speaker 1: And far more important than that, Ambassador Hassi, you and

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Speaker 1: I have crystal clear memories of the riots of sixty

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Speaker 1: seven sixty eight. I go back to the Rochester riots

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Speaker 1: of nineteen sixty four with very clear memories of that.

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Speaker 1: Richard Hass, How is this different from what you and

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Speaker 1: I remember of our youth. Uh? It is different, Tom,

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Speaker 1: and it's different in worrisome ways. Yes, you have the

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Speaker 1: rioting and the looting against the backdrop of injustice. You

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Speaker 1: had some awful things. Obviously in terms of about the

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Speaker 1: assassinations and the rest uh seventy, you had Kent state.

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Speaker 1: What I think is different about this though, is what

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Speaker 1: you were just discussing. It's the backdrop of a public

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Speaker 1: health crisis that's claimed the lives of well over a

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Speaker 1: hundred thousand Americans if we don't know how many more

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Speaker 1: are coming down the road. And against unemployment. Uh So,

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Speaker 1: it's this combination of physical threat, economic threat, and now

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Speaker 1: political division and violence, and it's the combination of the

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Speaker 1: three has got to have people worried about where this

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Speaker 1: country isn't where it's heading. You and I remember the

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Speaker 1: speech of LBJ on a Sunday evening years and years ago.

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Speaker 1: It was widely presumed we would see the presidents speak.

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Speaker 1: Last night, he and advisers chose not to. What would

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Speaker 1: you recommend as the next step for President Trump? Well,

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Speaker 1: it seems to me he should only speak if he's

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Speaker 1: got something that's healing and reassurance and talks about not

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Speaker 1: just Mr Floyd, but essentially the lessons that need to

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Speaker 1: be learned, that the lessons that need to be applied

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Speaker 1: about policing. He also needs to address public health concerns,

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Speaker 1: economic concerns. Essentially, he has to step up to the moment,

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Speaker 1: stopped the this of tweets, stop the personal attacks. Essentially,

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Speaker 1: he should only speak if he's if he's willing and

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Speaker 1: able to rise to the occasion. But if he wants

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Speaker 1: to use the occasion for political purposes or to deflect

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Speaker 1: or to attack, then essentially less is more and he

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Speaker 1: should continue to stay inside the White House. I'm wondering

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Speaker 1: if you pair what we're seeing in terms of domestic

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Speaker 1: unrest with the idea that President Trump withdrew from the

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Speaker 1: w h O on Friday, something that absolutely has been

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Speaker 1: evaporated from the news cycle. I'm just wondering, if you

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Speaker 1: compare domestic unrest with US isolationism, how does that sort

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Speaker 1: of feedback onto the United States the leader in the

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Speaker 1: in the world. Well, what you're seeing in the world

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Speaker 1: is the United States is essentially abdicating. We have we

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Speaker 1: haven't been pushed out of our traditional leadership role of

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Speaker 1: the last seventy five years. We have unilaterally taken ourselves

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Speaker 1: out of it. We've withdrawn from more agreements, more arrangements,

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Speaker 1: more institutions that are than I can count. So you've

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Speaker 1: got that abdication of leadership. But on top of that,

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Speaker 1: now you have the demonstration effect, the example we're sending

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Speaker 1: to the world of incompetence and ineptness in dealing with

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Speaker 1: the pandemic. We're seeing this, We're seeing this violence. We're

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Speaker 1: seeing this, uh, violent police activity as well as well

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Speaker 1: as violence on the part of some of those who

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Speaker 1: are who are protesting. So a big part of foreign

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Speaker 1: policy is well, and put another way, leadership is two dimensions.

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Speaker 1: One is what you're diplomats do and what the president

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Speaker 1: has basically said we're going to withdraw. And the other

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Speaker 1: the other part of leadership is the example you set.

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Speaker 1: And this is hardly an example any society in the

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Speaker 1: world would want to emulate. So this is this is

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Speaker 1: really about as bad as it gets. I'm bast in

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Speaker 1: the house. It's has to have you with us. I

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Speaker 1: haven't got through the hold of the new book, The

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Speaker 1: World an Introduction just yet, but if there is a

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Speaker 1: chapter in there on hegemonic power? Have we ever had

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Speaker 1: a reluctant? Had him? I had him on that just

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Speaker 1: steps away. No. Funnily enough, one of my previous books,

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Speaker 1: many books ago, was called The Reluctant sheriff, and I

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Speaker 1: used the phrase to describe a previous president, but it

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Speaker 1: applies much more to this one. And no, I can't

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Speaker 1: find a historical example of a leading country to the

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Speaker 1: world that voluntarily stepped down, not because of circumstances, but

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Speaker 1: because the choice. When the country like Britain was forced

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Speaker 1: to back off its leadership role, essentially it was forced

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Speaker 1: it simply didn't have the capacity, the resources anymore. It

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Speaker 1: was too small of a country to sustain that role.

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Speaker 1: But this is, this is, this is voluntary, And what's

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Speaker 1: so worrisome to me. It's not as though we're stepping

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Speaker 1: back having put something better in its place. To again,

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Speaker 1: use a parallel to the domestic situation or allkes me

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Speaker 1: a little bit of the healthcare debate in this country,

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Speaker 1: where we've repealed, but we've not replaced. And that's what

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Speaker 1: I feel we've done in the world. We've repealed American

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Speaker 1: leadership and the world order we help bring about, but

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Speaker 1: we've not put something as good, much less better in

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Speaker 1: its place. If we had to rebuild that, Richard, what

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Speaker 1: shape would that take? Because there are a lot of

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Speaker 1: people like yourself, and I'm not saying these are your

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Speaker 1: thoughts but others share them that maybe the world pulls

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Speaker 1: back into two spheres of influence, with China or the

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Speaker 1: epicenter of one and the United States at the epicenter

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Speaker 1: of another. Is that something you can see happening? And

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Speaker 1: what kind of institutions do we need to think about

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Speaker 1: to actually see that happen? See that come around? Well?

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Speaker 1: I wouldn't want to see it happened by any mean,

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Speaker 1: because China, to me, represents a model I would hardly

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Speaker 1: want to see spread widely in terms of its authoritarianism

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Speaker 1: at home, and given it's it's much of its much

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Speaker 1: of its modern history. Now, is it possible? Yes, I

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Speaker 1: think a more likely alternative to a US led world

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Speaker 1: isn't nobody led world? Where a world of greater unraveling,

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Speaker 1: of greater violence, of a greater gap between global challenges

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Speaker 1: and responses. What I'd like to say is not a

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Speaker 1: unilateral American effort, but what real leadership, which applies followership

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Speaker 1: the United States working with others and by the way,

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Speaker 1: including China, to deal with everything from calliferation to terrorism,

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Speaker 1: to climate change to public health, to regulate the behavior

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Speaker 1: in cyberspace, and so on and so on. That to

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Speaker 1: me is going to define the twenty first century, and

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Speaker 1: I would just say that after two decades, we are

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Speaker 1: not off to a good start. Just real quick here,

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Speaker 1: as the distractions mount with respect to US China trade

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Speaker 1: tensions and domestic unrest, what's the increasing risk of some

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Speaker 1: sort of infiltration by bad actors to the United States

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Speaker 1: that go undetected. Well, we probably already had infiltration through cyberspace.

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Speaker 1: I think that's the biggest one. Could terrorists take advantage

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Speaker 1: of this conceivably. I'm more worried about some global event.

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Speaker 1: Whether one could even argue with some of what the

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Speaker 1: Chinese are doing in Hong Kong is attempt to exploit

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Speaker 1: the moment. But I worry whether it's North Korea, Orn Russia, China.

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Speaker 1: Who knows, some countries cemented might try to take advantage

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Speaker 1: of the fact that the United States is distracted, we

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Speaker 1: are divided politically, and they may say this is an opportunity,

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Speaker 1: this is a moment. So that is something I actually

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Speaker 1: think we need to be We need to be vigilant

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Speaker 1: about always. Fantastic catch out with the use of the

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Speaker 1: Council on Foreign Relations, and of course the author of

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Speaker 1: the World a brief introduction, it's gonna be amazing. John.

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Speaker 1: I know you want to talk to our next guest

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Speaker 1: about p M I and some of those dynamics that

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Speaker 1: we talked about right now, Folks, Ethan Harris with us

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Speaker 1: and we welcome all of you on radio and television worldwide.

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Speaker 1: Head of Economic Research for Bank of America and Dr Harris.

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Speaker 1: I want to go back to your book on Ben

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Speaker 1: Bernankee of Ages and Ages Ago, because I believe Ethan

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Speaker 1: Harris in your book there was somewhat conventional economics that

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Speaker 1: is out the door. If you were to write a

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Speaker 1: book right now on J. Powell's FED, how would you

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Speaker 1: tackle the conventional economics of the moment the super crisis

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Speaker 1: playbook playing out? I mean, it's it's not completely new.

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Speaker 1: I mean, we saw the FED kind of experiment with

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Speaker 1: some incredibly radical policies back in two two nine, but

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Speaker 1: then but the Powell's kind of taken that to a

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Speaker 1: new level, and you know, it's crisis management. It's not

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Speaker 1: totally unprecedented, but the scale here is something we've never

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Speaker 1: seen before, Ethan. So let's talk about the data that

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Speaker 1: we already have been seeing. Goldman Sachs actually upgrading their

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Speaker 1: expectation for stocks and saying that the jobless data actually

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Speaker 1: confirms of you that is more optimistic than they were

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Speaker 1: previously expecting. Are we seeing something that resembles more of

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Speaker 1: a V shaped economy, anomy recovery and the economy than

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Speaker 1: people had previously accounted for? Um, I don't think so.

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Speaker 1: I think that. Listen, we're going to bounce off some

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Speaker 1: awful numbers here. So the unemployment rate, we think this

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Speaker 1: week hits that is obviously partly temporary due to the shutdowns,

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Speaker 1: and you know that that data is already a couple

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Speaker 1: of weeks old. Um, So we're gonna see the unemployment

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Speaker 1: rate come back down again. But where is it going

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Speaker 1: to come down to. It's going to probably be above

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Speaker 1: ten at year end, which is where we were at

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Speaker 1: the worst of the two two nine recessions. So uh,

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Speaker 1: you know, a V shaped recovered as a funny V

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Speaker 1: where the left hand side plunges and on the right

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Speaker 1: hand side you go halfway up. And so I don't

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Speaker 1: think we're seeing V shaped numbers right now. The market

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Speaker 1: Ethan just focused on the sequential improvement as you go

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Speaker 1: from shutdowns and reopening it. As you points out, we're

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Speaker 1: still not quite focused enough. I don't think on the

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Speaker 1: limits of this recovery. The hope is there a lot

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Speaker 1: of people look to the soft data as a leading

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Speaker 1: indicator for how quickly this economy might be reopening and normalizing.

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Speaker 1: And Ethan, I know you've had a lot of work

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Speaker 1: on this with the team at Banks Americus. I want

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Speaker 1: to explore it with you with a little bit more detail.

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Speaker 1: Why are the p m I s so flawed right now?

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Speaker 1: Why are they less useful than they once were. Well,

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Speaker 1: let's think about what a p m I is. You're

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Speaker 1: you're asking an executive at a firm to tell you

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Speaker 1: whether activity was up or down this month. So let's

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Speaker 1: say that activity collapses in a month, and so they

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Speaker 1: record that it's collapsed, and you get a p m

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Speaker 1: I that's very low, you know, twenty or thirty, because

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Speaker 1: many different executives are saying activity fell. But then let's

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Speaker 1: say you don't recover at all, um and activity is

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Speaker 1: flat in the following month. Well, the p m I

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Speaker 1: will go back to fifty because they're saying activity is

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Speaker 1: flat at these very depressed levels. So people will look

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Speaker 1: at the data and they'll see we went from like

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Speaker 1: fifty two down to thirty. An hour back close to fifty,

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Speaker 1: that's a V it's not a V. V means you

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Speaker 1: go above fifty, which means that you're starting to recover,

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Speaker 1: that you're starting to see growth that offsets that the collapse.

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Speaker 1: So I think that there's been a tendency to kind

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Speaker 1: of miss the fact that we have to look at

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Speaker 1: the fifty level. That's that's a flat economy. Flat economies

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Speaker 1: after a collapse is an L shape recovery, not a

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Speaker 1: V shape recovery. Ethan. This is really important as we

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Speaker 1: gauge and digest the data in the coming weeks and months.

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Speaker 1: That's the question, what's the best data point to follow?

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Speaker 1: What are the team following the high frequency data? What

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Speaker 1: are you guys looking at at the moment? Yeah, I

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Speaker 1: mean there's the Newark fed as a nice indicator that

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Speaker 1: kind of takes the ten ten high frequency numbers UH

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Speaker 1: and and creates a weekly index, and that that that

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Speaker 1: indicator has fawned sharply and has a very slight recovery.

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Speaker 1: It's got claims and you know other other daily and

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Speaker 1: weekly statistics in there. That's a pretty good number. And

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Speaker 1: I do think that some of the Google UH mobility

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Speaker 1: data is useful numbers that kind of measure whether you

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Speaker 1: people are going to the train station or not, whether

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Speaker 1: they're um, they're going to retail shops or not. And

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Speaker 1: all of these indicators are showing that we're, you know,

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Speaker 1: we're starting to move off the bottom here, but at

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Speaker 1: a very kind of slow pace. And I guess I

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Speaker 1: shouldn't forget. We also have some good data from Bank

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Speaker 1: American or credit card and debit spending data that that

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Speaker 1: also can capture these these these trends. Night. Nice to

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Speaker 1: get that in there, Dr Harris. I'm good, Mr Moyning,

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Speaker 1: and I hope you heard that this morning from a

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Speaker 1: good Dr Harris. Ethan one more question quickly, if we

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Speaker 1: could we all understand the Genie coefficient is not good.

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Speaker 1: We understand the inequality of America. Give us your interpretation

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Speaker 1: of the dynamics of that inequality right now. Well, I mean,

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Speaker 1: we were in a good phase here late in the

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Speaker 1: cycle until the COVID hit um where the weaker parts

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Speaker 1: of the labor market were recovering. You're finally getting some

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Speaker 1: wage growth. You're bringing in people, and you know, when

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Speaker 1: you work, you learn and you become better and build

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Speaker 1: your resume. That was happening and so the inequality issue

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Speaker 1: is actually starting to improve slightly. The COVID crisis has

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Speaker 1: been really bad because it's it's putting out of work,

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Speaker 1: um a lot of lower income workers in this service

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Speaker 1: sector and so on, and so the shock is very

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Speaker 1: disproportionately hitting low income workers, minorities, and other disadvantaged groups.

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Speaker 1: So it's it's been a it's been a blow to

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Speaker 1: what was the beginning of some progress. Ethan Harris of

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Speaker 1: Banks America Ethan ready appreciate it, time send my best

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Speaker 1: of the tames and fantastic work over the last several

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Speaker 1: weeks on this pandemic. We're all working through Franci Lako

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Speaker 1: in London. I'm Tom King in New York. We've really

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Speaker 1: been focused on the protest in America. They're very difficult

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Speaker 1: overnight and in the Monday morning. But right now we

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Speaker 1: digress to China and there's no one better to do

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Speaker 1: that with the Meredith Sumter of eur Asia Group. Meredith,

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Speaker 1: thank you so much for joining us, and we could

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Speaker 1: speak for two hours. We just don't have that time today.

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Speaker 1: What are the cards that president she holds right now?

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Speaker 1: It seems he's in control of the debate. Is that true?

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Speaker 1: She is looking to appear in control of the domestic debate.

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Speaker 1: But right now the focus in Beijing is how to

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Speaker 1: take advantage of the unrest in the United States to

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Speaker 1: better position Beijing and Si Jun King. So the US

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Speaker 1: and miss handling of the virus bread within its borders.

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Speaker 1: President Trump's a band named the Who, and global leadership

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Speaker 1: during a global pandemic, as well as the scenes of

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Speaker 1: writing and unrest and divisiveness in the US all contrast

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Speaker 1: with how shej and Ping is looking to portray a

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Speaker 1: competent orally China that is willing to make contributions to

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Speaker 1: the global public good, including by providing money to the

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Speaker 1: w h O for global pandemic relief efforts. So we're

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Speaker 1: watching the way that Beijing is trying to position itself

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Speaker 1: UH to shore up its film reputation externally but also

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Speaker 1: domestically at this time of the US crisis, right what

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Speaker 1: will be meredith to action that Beijing will take to

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Speaker 1: shore up its relationship with the third world? I think

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Speaker 1: at this stage, Beijing is going to try to position

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Speaker 1: itself as the country that is more concerning focused on

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Speaker 1: their overall well being of emerging market economies, and it's

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Speaker 1: not just with global pandemic relief common francing. It is

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Speaker 1: also Beijing being the the global power that is putting

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Speaker 1: moneys into global infrastructure and trying to UH to keep

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Speaker 1: open global trade and investment ties at a time of

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Speaker 1: global fragmentation. This will be successful partially depending upon how

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Speaker 1: closely those emerging market economies are tied with China. But

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Speaker 1: to be clear, the the developing world governments they want toy.

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Speaker 1: They don't want to be put in one camp or

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Speaker 1: the other. As the world's too large, as economies continue

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Speaker 1: to face off, they want to be able to get

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Speaker 1: the investment in trade from both large economies. And we're

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Speaker 1: going to be watching as these these emerging market and

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Speaker 1: economies struggle to try to balance the competing pressures of

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Speaker 1: the two Americus. Good morning from London, and you talk

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Speaker 1: about global fragmentation, Is it going to be even worse

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Speaker 1: compared to what we're seeing now? And sing We we

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Speaker 1: do believe so, uh if you look at where the

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Speaker 1: numbers are heading, even with even with the economy is

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Speaker 1: partially reopening until we have a vaccine that makes it

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Speaker 1: safe for all workers UH to to go to work

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Speaker 1: and for businesses to fully reopen. If you look at

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Speaker 1: the the pathway of the virus spread. What we expect

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Speaker 1: is there's going to be a partially opening of economy.

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Speaker 1: It's much like you're seeing in Europe and the United States.

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Speaker 1: But as the virus transcends through the emerging market world,

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Speaker 1: you're going to have that same effect. We're not going

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Speaker 1: to see that sharp rising cases and UH and a

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Speaker 1: sharp peak that comes down. Rather, you're going to see

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Speaker 1: more of a long wave of cases that that slowly

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Speaker 1: been down until there is that vaccine that's going to

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Speaker 1: have a disruptive effect on consumption UH, and that means

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Speaker 1: destruction for business activity and ultimately employment and livelihoods UM.

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Speaker 1: That's going to make it more difficult for these economies

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Speaker 1: to recover. They're going to be looking for an outside lifeline.

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Speaker 1: And right now it's China more so than the United States,

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Speaker 1: who is speaking in a way that that gives them

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Speaker 1: a sense that China's looking out for that trading investment

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Speaker 1: interest at a time when the US is more so

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Speaker 1: focused inwardly. Meredith, too short to visit. Meredith Sumter, thank

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Speaker 1: you so much when you raise your group today. Thanks

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Speaker 1: for listening to the Bloomberg Surveillance Podcast. Subscribe and listen

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Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio