WEBVTT - Surveillance: Weak Jobs Report 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jai Ley. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.520 Bloomberg dot com, and of course on the Bloomberg. The 0:00:27.720 --> 0:00:31.320 first loss in jobs for an entire month since April, 0:00:31.360 --> 0:00:34.680 we are seeing the second wave of job losses, the 0:00:34.720 --> 0:00:38.200 second wave of the coronavirus, and the second wave of pain, 0:00:38.280 --> 0:00:42.000 hopefully jerking Congress into more action. At least that's the 0:00:42.000 --> 0:00:46.400 implication from Marcus Jeffrey Rosenberg Blackport black Rock, portfolio manager 0:00:46.400 --> 0:00:49.960 of the Systematic Multi Strategy Fund, joining us right now. 0:00:50.320 --> 0:00:52.920 Your thoughts, Jeff on this report, Yeah, I think you 0:00:52.960 --> 0:00:55.080 guys have it exactly right. You look at that market 0:00:55.120 --> 0:00:58.400 reaction and you see slightly higher yields on what is 0:00:58.400 --> 0:01:02.120 a very disappointing board. And it's really about looking through 0:01:02.160 --> 0:01:05.480 this report to its implications for monitors for fiscal policy. 0:01:05.880 --> 0:01:09.000 And yes, you know, fiscal policy expectations were high. This 0:01:09.080 --> 0:01:14.040 report just underscores the likelihood that will see significant additional 0:01:14.200 --> 0:01:18.000 fiscal stimulus in the new administration from the new administration, 0:01:18.040 --> 0:01:20.200 from the new Congress, and that's why you're seeing a 0:01:20.200 --> 0:01:23.240 little bit higher yields. You know, the report is remarkably 0:01:23.319 --> 0:01:26.880 weak with regards to leisure and hospitality, down a five 0:01:27.280 --> 0:01:30.080 thousand jobs. That's really what's taking the headline number down. 0:01:30.319 --> 0:01:34.880 And that's just very clearly about the COVID resurgence here 0:01:34.880 --> 0:01:37.440 that we're seeing, and that's just underscoring again the need 0:01:37.480 --> 0:01:39.919 for more fiscal policy. So it's a it's a very 0:01:40.040 --> 0:01:42.920 kind of different bond market reaction, but but I think 0:01:42.920 --> 0:01:45.480 it makes a lot of sense that we're looking past 0:01:45.720 --> 0:01:48.880 the near term weakness towards the policy response and that 0:01:48.920 --> 0:01:52.440 means better growth and and higher rates. And that's really 0:01:52.520 --> 0:01:54.880 higher rates and steeper curve that's been a trend. I 0:01:54.920 --> 0:01:57.120 don't think this report is going to take us off 0:01:57.160 --> 0:02:00.480 that trend. Futures up, nine, futures up, a little bit 0:02:00.480 --> 0:02:03.640 of an ease back inequities at this moment. Jeff Rosenberg, 0:02:03.680 --> 0:02:05.560 I know at Carnegie mel And you took Horse and 0:02:05.720 --> 0:02:09.679 Cart two oh two an important course. The research this 0:02:09.800 --> 0:02:15.320 morning is extraordinary about inflation expectations and how they fold 0:02:15.360 --> 0:02:19.959 into the yield market, about oil surging, about a weaker 0:02:20.080 --> 0:02:23.000 dollar and the presumption of a weekend dollar, which is 0:02:23.040 --> 0:02:27.320 the horse and which is the cart real world dynamics 0:02:27.400 --> 0:02:32.359 like dollar in oil or is it the fixed income market? Well, 0:02:32.160 --> 0:02:34.680 the first of all on on on oil that's going 0:02:34.720 --> 0:02:39.400 to affect the headline levels of inflation markets and longer 0:02:39.520 --> 0:02:42.760 term inflation expectations are really gonna focus on on core. Now. 0:02:42.800 --> 0:02:45.680 The expectations here and the developments are really about a 0:02:45.720 --> 0:02:50.440 reflationary trade rolling through the fixed income markets. You see 0:02:50.480 --> 0:02:54.000 it in terms of market based measures of inflation tips, 0:02:54.040 --> 0:02:58.280 break even measures breaking out to the upside. You see 0:02:58.280 --> 0:03:00.600 it in phenomena yield measures, and see it in the 0:03:00.639 --> 0:03:04.680 steepening of the yield curve. The overall conclusion here is 0:03:05.040 --> 0:03:11.079 expectations for significant monetary and fiscal policy coordination to deliver 0:03:11.360 --> 0:03:15.440 a reflationary thrust to the economy that then flows through 0:03:15.560 --> 0:03:19.560 into financial markets. But it starts with financial markets expectations, 0:03:19.560 --> 0:03:22.400 and that's what you're seeing building. It's been building for 0:03:22.480 --> 0:03:26.840 some time. It's certainly got some acceleration hosts the Georgia 0:03:27.200 --> 0:03:31.079 runoff election results and certainly today UH and this negative 0:03:31.120 --> 0:03:34.120 news is going to be looked through to its implications 0:03:34.160 --> 0:03:37.600 to further the reflationary fiscal policy response. You know, I 0:03:37.600 --> 0:03:40.480 don't want to read too much into the immediate market response, 0:03:40.520 --> 0:03:42.480 but I do think it's interesting, Jeff, that you see 0:03:42.480 --> 0:03:44.920 the bond market reacting more than the equity markets, That 0:03:45.000 --> 0:03:47.800 equities actually took a little bit of a dip in 0:03:47.840 --> 0:03:51.520 futures trading, whereas you saw bonds take a definitive move 0:03:51.840 --> 0:03:55.920 price lower, yield higher on the expectation of stimulus. Have 0:03:56.000 --> 0:03:59.920 we reached a point where higher yields with such a 0:04:00.120 --> 0:04:03.880 lagging economy on the in the backdrop, becomes a headwind 0:04:03.880 --> 0:04:07.000 for stocks. In other words, it sort of threatens the 0:04:07.000 --> 0:04:10.160 thesis of going into stocks at such high valuation simply 0:04:10.400 --> 0:04:14.120 because there is no alternative. Jeff, It's it's a great question. 0:04:14.480 --> 0:04:16.560 I don't think we're there yet. You've got to take 0:04:16.560 --> 0:04:19.440 a step back from these changes in in yield levels 0:04:19.480 --> 0:04:23.440 that you know, from an environment where yields were exceptionally depressed, 0:04:23.480 --> 0:04:25.800 and certainly when we think about the tenure yield being 0:04:25.800 --> 0:04:30.000 significantly below one percent throughout the post COVID environment, you 0:04:30.040 --> 0:04:33.880 know we've recently breached that level, but these yields are 0:04:33.920 --> 0:04:37.800 still exceptionally low out the yield curve, and the FED 0:04:37.960 --> 0:04:40.479 is telling you they're happy to see that now, they're 0:04:40.480 --> 0:04:43.360 not going to be happy to see a disruptive increase 0:04:43.400 --> 0:04:47.200 in interest rates basis points higher on the day. But 0:04:47.279 --> 0:04:49.640 you look at all of the forecast for the year 0:04:49.720 --> 0:04:52.480 and they center around twenty basis points for the year. 0:04:52.920 --> 0:04:59.560 That's fine in terms of fiscal stimulus boosting market expectations 0:04:59.560 --> 0:05:04.120 without the market expectations on doing the financial stability that 0:05:04.240 --> 0:05:06.800 the FED is targeting here. So I think if we 0:05:06.880 --> 0:05:09.960 have these kind of gradual increases in rates, that's not 0:05:09.960 --> 0:05:12.640 going to get in the way of financial stability and 0:05:12.680 --> 0:05:15.320 having to have the FED intervene. Jeff Rosenberg where this 0:05:15.400 --> 0:05:18.000 is black Rock, and also Michael McKee of Bloomberg with 0:05:18.040 --> 0:05:20.719 his wonderful analysis. He says, some time to dive into 0:05:20.720 --> 0:05:24.039 the report. Jeff Rosenberg, Michael McKee mentioned the five hundred 0:05:24.120 --> 0:05:27.400 thousand statistics on bars and restaurants. I think no surprise 0:05:27.480 --> 0:05:30.719 to anyone in New York. Michael McKee, Can you extrapolate 0:05:30.839 --> 0:05:36.280 anyway to the early February report, early February next month 0:05:36.400 --> 0:05:40.840 or a year as January? Can you get January are 0:05:40.960 --> 0:05:44.440 right now? In a sense you can, because it doesn't 0:05:44.440 --> 0:05:47.920 look like any of the lockdown situation has changed and 0:05:48.279 --> 0:05:51.520 as a matter of fact, we're seeing more cases, more 0:05:51.600 --> 0:05:55.040 deaths every day, we're setting records, So it looks like 0:05:55.080 --> 0:05:57.400 we're gonna be perhaps even in worse shape. A lot 0:05:57.440 --> 0:05:59.919 of what happened in December came about in the early 0:06:00.040 --> 0:06:03.280 part of the month UH and the survey has taken 0:06:03.320 --> 0:06:05.880 the week of the that includes the twelfth of the month, 0:06:05.960 --> 0:06:09.480 So at the twelfth of the month in UH in 0:06:10.000 --> 0:06:12.560 January is not looking good right now, and so I 0:06:12.560 --> 0:06:16.880 would imagine that we will not see any additional hiring. However, 0:06:17.760 --> 0:06:19.920 I have people already lost their jobs. That's going to 0:06:20.000 --> 0:06:22.600 be the question if if we lost so many in December, 0:06:22.880 --> 0:06:25.320 do we see a significant number of people who go 0:06:25.440 --> 0:06:28.160 off payrolls or are they just remaining off payrolls. So 0:06:28.320 --> 0:06:30.159 let's just hie us all together and just sort of 0:06:30.240 --> 0:06:33.680 highlight how a pivotal week this really has been, how 0:06:33.680 --> 0:06:38.600 an exceptional start to a year following an unprecedented and 0:06:38.680 --> 0:06:42.200 Jeff Rosenberg we started this segment talking about how people 0:06:42.200 --> 0:06:44.880 have had to rewrite their year, had THECES in the 0:06:44.920 --> 0:06:48.120 past week after just writing them days earlier, after what 0:06:48.240 --> 0:06:51.359 happened with the Georgia election, and given what we're seeing 0:06:51.360 --> 0:06:54.240 with the surprise now with a labor market that is 0:06:54.320 --> 0:06:57.960 much weaker than many had expected. Jeff, are you changing 0:06:58.120 --> 0:07:03.279 any of your sees based on the week's action. Well, 0:07:03.320 --> 0:07:05.800 you know, I don't think that. The thing that has 0:07:05.880 --> 0:07:08.000 happened in the over the course of the week is 0:07:08.040 --> 0:07:12.560 the expectations were already going into the year that growth 0:07:12.600 --> 0:07:15.440 would be better than expected, and so the Georgia elections 0:07:15.440 --> 0:07:18.880 have only added to the confidence that market participants have 0:07:19.080 --> 0:07:23.320 that growth due to fiscal policy support will be better 0:07:23.360 --> 0:07:26.440 than expected. And that's that's providing some cushion, that's providing 0:07:26.800 --> 0:07:31.360 some safety net to the positive sentiment around financial markets 0:07:31.360 --> 0:07:33.680 and for the bond market for the expectations that yields 0:07:33.680 --> 0:07:36.360 will continue to gradually rise. So I don't think we're 0:07:36.360 --> 0:07:39.200 seeing a significant change from that. I think we're seeing 0:07:39.200 --> 0:07:43.440 it reinforced with today's news and with the news on 0:07:43.480 --> 0:07:46.600 the elections in the outlook for fiscal policy. Jeffrey Rosenberg, 0:07:46.640 --> 0:07:49.760 thank you so much. With Blackbrook, greatly appreciate your time 0:07:49.800 --> 0:07:51.640 with us on this job's report, and of course are 0:07:51.680 --> 0:08:01.080 FED meetings as well, string of PLOSO for the discussion. 0:08:01.120 --> 0:08:03.800 It will be an eventful Friday. The resignations of the 0:08:03.880 --> 0:08:08.240 Secretary of Transportation, the Secretary of Education. This morning, we 0:08:08.320 --> 0:08:11.760 were resigned to speak to french Kill, the Republican from Arkansas, 0:08:12.080 --> 0:08:14.360 French Hill of Little Rock, and of course has been 0:08:14.400 --> 0:08:19.000 a consistent Republican voice giving us conversation on Bloomberg surveillance. 0:08:19.320 --> 0:08:22.480 Congressmanni Hill. There seems to be a divide, as we 0:08:22.560 --> 0:08:26.240 just saw from Senator Sass of Nebraska the language at 0:08:26.240 --> 0:08:29.480 the Senator from Nebraska used as compared to the Senator 0:08:29.480 --> 0:08:34.199 from Missouri Holly and the Senator from Texas Uh Ted Cruz. 0:08:34.600 --> 0:08:38.400 How do you bring together a Republican party to be 0:08:38.520 --> 0:08:43.080 in minority with President Biden. Well, happy new year, Tom, 0:08:43.160 --> 0:08:46.000 thanks for having me. This is a critical issue and 0:08:46.080 --> 0:08:48.640 at this moment in American district, I think all the 0:08:48.760 --> 0:08:51.240 leaders in boat parties, on both sides of the Capitol 0:08:51.360 --> 0:08:54.640 and on both sides of the aisle need to focus 0:08:54.679 --> 0:08:59.080 on our peaceful transfer of the presidency on noon January 0:08:59.400 --> 0:09:01.920 and we need to and not add to the brinksmanship 0:09:02.040 --> 0:09:05.640 that we've seen from Speaker Pelosi in the last day 0:09:05.679 --> 0:09:09.000 on the amendment, or that we saw from Senator Cruz 0:09:09.120 --> 0:09:13.640 or Senator Holly on this uh false narrative that somehow 0:09:13.679 --> 0:09:16.880 we're going to have a different outcome on January six 0:09:17.000 --> 0:09:22.559 by action of the Congress, which was never in the Constitution, 0:09:23.160 --> 0:09:25.640 was never going to happen. And I think the rhetoric 0:09:25.720 --> 0:09:29.560 since the election contributed to the disaster we saw here 0:09:30.160 --> 0:09:33.319 the afternoon of January six, where people were misled, they 0:09:33.360 --> 0:09:37.520 had a misunderstanding of what might happen on January six. 0:09:37.520 --> 0:09:40.880 In Washington, d C. It's almost of a Whig Party 0:09:40.920 --> 0:09:43.120 of another time and place, and I would suggest the 0:09:43.160 --> 0:09:46.319 Whig Party not so much associated with Arkansas, but mostly 0:09:46.800 --> 0:09:51.479 to the eastern Kentucky. Do you risk becoming a minority 0:09:51.520 --> 0:09:55.440 party with this great fracture between say Ted Cruz and 0:09:55.520 --> 0:10:00.520 Ben Sas. I think we need to remind our ourselves 0:10:00.559 --> 0:10:03.760 of what the Republican tenants are and go back to 0:10:03.920 --> 0:10:08.520 advocating for those limited government, limited scope of regulatory and 0:10:08.559 --> 0:10:12.480 tax burdens on the American people, equal justice under the law, 0:10:12.800 --> 0:10:17.000 more opportunities for people of all incomes, in a strong, 0:10:17.160 --> 0:10:20.480 robust national security, in leadership in the world. Those are 0:10:20.520 --> 0:10:24.040 the tenants of the Republican platform. I've heard a Senator 0:10:24.480 --> 0:10:27.400 a Cruise speak passionately about them. I've heard Senator Sas 0:10:27.480 --> 0:10:30.680 speak passionately about them. That's what the Republican Party needs 0:10:30.679 --> 0:10:34.480 to get back out and advocate for and step away 0:10:34.520 --> 0:10:39.200 from what we've seen since the election. Congressman, are you 0:10:39.280 --> 0:10:42.200 happy with how President Trump and the Republican leadership has 0:10:42.240 --> 0:10:46.760 handled the rollout of the coronavirus vaccine? Well, look, first, 0:10:46.840 --> 0:10:49.320 let's say that the vaccine will go down in history. 0:10:49.400 --> 0:10:53.320 This development effort from late January to the rollout of 0:10:53.320 --> 0:10:55.800 a vaccine around the first of December is one of 0:10:55.840 --> 0:11:00.319 the great global health initiatives and success stories in history. 0:11:00.920 --> 0:11:06.720 So the CARES acts ten billion dollars for coronavirus pandemic 0:11:06.840 --> 0:11:11.679 vaccine development. The President's quick UH direction of the FDA 0:11:11.800 --> 0:11:14.480 and ni H to work on that is a success story. 0:11:14.960 --> 0:11:18.040 The roll out UH and the manufacturing of it around 0:11:18.080 --> 0:11:20.920 the world I think has been impressive. It's gotten to 0:11:21.000 --> 0:11:23.800 the States, but we need to make sure the States 0:11:24.200 --> 0:11:28.520 focus where it's needed, on essential workers and our elderly population. 0:11:28.920 --> 0:11:33.000 You all, we're talking about incidences of death and you 0:11:33.040 --> 0:11:36.520 look at that compared to accidental death by any choice, 0:11:36.559 --> 0:11:39.440 and again it's concentrated in the older age groups are 0:11:39.520 --> 0:11:43.760 more vulnerable to the coronavirus. So after essential workers. There's 0:11:43.800 --> 0:11:46.800 no doubt that's where the vaccine should be focused. So Congressman, 0:11:47.320 --> 0:11:50.400 that is true. And yet the states really have been 0:11:50.440 --> 0:11:52.920 the ones in charge, and only about a third of 0:11:52.920 --> 0:11:56.760 the vaccine that's been circulated on average has been deployed, 0:11:56.840 --> 0:12:00.160 and there has been reports of, for example, doctors who 0:12:00.200 --> 0:12:02.720 are not in the main lines having to call up 0:12:02.800 --> 0:12:05.480 their pharmacies and their contacts and say, how do I 0:12:05.559 --> 0:12:08.360 get vaccine? Do you regret that there isn't a more 0:12:08.640 --> 0:12:13.800 federally central organized rollout plan that would have smoothed out 0:12:13.880 --> 0:12:18.040 some of these kinks. Well, it possibly could have been better. 0:12:18.120 --> 0:12:21.480 We've never done this before, but the defense logistics getting 0:12:21.520 --> 0:12:26.640 the vaccine with the private sector produced, approved, and shipped 0:12:26.880 --> 0:12:30.680 has been again, I think, an extraordinary accomplishment. In Arkansas, 0:12:30.720 --> 0:12:34.640 speaking to our governor, we're generally pleased with the distribution 0:12:34.720 --> 0:12:38.160 to hospitals and to pharmacies, and we're working hard to 0:12:38.240 --> 0:12:41.480 get that out to the people who needed first. And 0:12:41.520 --> 0:12:43.760 of course, you know, the storage has been a challenge. 0:12:43.840 --> 0:12:47.520 Everyone recognizes that, particularly in the Visor vaccine, and so 0:12:47.600 --> 0:12:51.040 that's limited distribution. With the Biderta vaccine that's going to 0:12:51.080 --> 0:12:53.600 go out to more rural counties, and more regular pharmacy 0:12:53.720 --> 0:12:56.280 used that I think will expand the vaccine. You've been 0:12:56.280 --> 0:12:59.400 faster French show. To get back to the politics of 0:12:59.440 --> 0:13:02.319 the moment, and we consider the two gentlemen from Vermont, 0:13:03.080 --> 0:13:06.720 Lady and Sanders. Maybe we'll have chairmanships within a new Senate. 0:13:07.280 --> 0:13:10.360 Perhaps the Democrats will manage to the middle. That seems 0:13:10.400 --> 0:13:13.240 to be how they won this time around. How does 0:13:13.280 --> 0:13:18.600 the Republican Party within the primary process managed to the middle. 0:13:20.320 --> 0:13:23.640 Another good point. I mean, this is a center right country. 0:13:23.800 --> 0:13:28.040 We saw that with Nancy. Yes, we saw that. And 0:13:28.080 --> 0:13:31.280 it's up to both in both parties. They both have 0:13:31.400 --> 0:13:34.600 a primary challenge from the left and the Democratic Party 0:13:34.679 --> 0:13:37.920 and from the right. I guess you say the more 0:13:38.040 --> 0:13:41.199 right in the Republican Party. We do that, I think 0:13:41.240 --> 0:13:43.719 by again focusing on our basic tenants that I went 0:13:43.760 --> 0:13:45.839 over a moment ago. That's what we have to do 0:13:45.960 --> 0:13:49.160 is do more education and more communication with our primary 0:13:49.240 --> 0:13:53.400 voters about what the Republican Party's goals are. Why are 0:13:53.480 --> 0:13:56.719 we being elected, why do we run? That's our obligation 0:13:56.760 --> 0:13:59.920 as Canada. Okay, but this is so important, carkisman Hill 0:14:00.120 --> 0:14:03.160 very quickly here. This is so important because there is 0:14:03.200 --> 0:14:08.880 a social overlay of social policy and issues over general 0:14:08.960 --> 0:14:13.640 Republican issues, how do you combine those forward to two 0:14:13.640 --> 0:14:19.160 thousand twenty two. In two thousand twenty four and win. Well, 0:14:19.200 --> 0:14:21.960 I think we won with our message of what we 0:14:22.040 --> 0:14:25.600 said was our commitment to America in we picked up. 0:14:25.640 --> 0:14:28.160 We didn't have a single incumbent lose in the House 0:14:28.240 --> 0:14:32.200 this year, and we have a new, diverse, aggressive group 0:14:32.280 --> 0:14:34.600 of new members in the House. I think we'll continue 0:14:34.640 --> 0:14:38.080 that momentum going into two particularly if you see the 0:14:38.120 --> 0:14:41.600 Biden administration, as you say, not government from the center, 0:14:42.120 --> 0:14:44.960 with a divided Senate in a divided House, but try 0:14:45.000 --> 0:14:49.600 to again of interesting of progressive left policies. French Hill, 0:14:49.840 --> 0:14:53.160 have a pleasant weekend after this historic the Congressman Hill 0:14:53.200 --> 0:14:59.200 of Arkansas with us, and we thank you. This first 0:14:59.240 --> 0:15:03.920 week of Nuary, it is about Eurasia group. Dr Bremer 0:15:03.920 --> 0:15:07.200 and Mr coushkinsch Coupchins. I'll get it out. I can't 0:15:07.200 --> 0:15:11.200 talking to Friday folks ever. Uh, they're wonderful. Top risks 0:15:11.240 --> 0:15:15.240 of two thousand twenty one in that is Europe in 0:15:15.280 --> 0:15:17.800 the changing of the Guard of Angelo, miracle. Moving on, 0:15:17.960 --> 0:15:21.360 Mr McCraw with huge issues. Ms Raman joins with an 0:15:21.440 --> 0:15:24.240 update with Eurasia Group. Midge, we haven't talked to about 0:15:24.720 --> 0:15:28.840 enough about the travails of France and mccrawn. Why should 0:15:28.840 --> 0:15:34.680 America worry about the fragility of Mr McCraw Because I 0:15:34.720 --> 0:15:39.040 think Tom Europe's medium term stability depends more on what 0:15:39.200 --> 0:15:42.440 happens in the French election than the German one. That 0:15:42.600 --> 0:15:44.520 you know, the outcome of the German election is kind 0:15:44.560 --> 0:15:46.920 of known. Is going to be a black Green government. 0:15:47.320 --> 0:15:49.760 We don't know who will replace Miracle, but it doesn't 0:15:49.960 --> 0:15:53.280 really matter that much because it will be it will 0:15:53.320 --> 0:15:57.080 be a mainstream leader sitting on top of a very 0:15:57.120 --> 0:16:01.080 pro European coalition in France. In France, you have a 0:16:01.080 --> 0:16:05.320 health crisis, an economic crisis, and a security crisis, I 0:16:05.360 --> 0:16:09.240 think for the terrorist incidents that took place a very 0:16:09.280 --> 0:16:11.560 back end of last year, and they're all converging and 0:16:11.760 --> 0:16:15.760 I think brings into questions the Macron question. And I 0:16:15.800 --> 0:16:18.640 think on top of that, of course, because instability in 0:16:18.680 --> 0:16:20.800 France would be a big problem for Europe in a 0:16:20.840 --> 0:16:24.200 big problem for America. Does France have a Trumpian equivalent? 0:16:24.240 --> 0:16:26.240 I mean Guy Johnson and I folks there for the 0:16:26.280 --> 0:16:30.000 French elections, and the stunning side of Mr McCraw walking 0:16:30.040 --> 0:16:33.040 across that magnificent courtyard, I mean a guest from the 0:16:33.120 --> 0:16:36.720 nineteenth or eighteenth century and in the j RAM. And 0:16:36.720 --> 0:16:39.120 the question is that the right, if you will of 0:16:39.280 --> 0:16:44.840 France does it exist. You've got a very weak center 0:16:44.920 --> 0:16:48.120 right and a very weak center left. Lapen is always, 0:16:48.360 --> 0:16:51.280 as you know, Tom waiting in the wings, and next 0:16:51.400 --> 0:16:55.000 year will be no different. What's interesting is Marine Lapin 0:16:55.160 --> 0:16:58.800 has not really been able to capitalize on COVID. She's 0:16:58.840 --> 0:17:01.800 not really been able to capitalize on the challenges and 0:17:01.840 --> 0:17:05.480 the troubles that Macron has been facing both personally and 0:17:05.600 --> 0:17:08.719 his government. But the question is depending on how he 0:17:08.800 --> 0:17:12.159 deals with potential risk of the third lockdown, in this 0:17:12.280 --> 0:17:15.360 mutant strain that's crossed the channel from Great Britain now 0:17:15.400 --> 0:17:19.560 into France, the glacial pace of the vaccine rollout, there's 0:17:19.600 --> 0:17:23.359 a lot of expectation of high profile business closures and 0:17:23.400 --> 0:17:25.679 math unemployment in the first four to six months of 0:17:25.720 --> 0:17:28.359 this year in France. You know, depending on how Macron 0:17:28.400 --> 0:17:32.320 deals with those challenges could impact the dynamic heading into 0:17:32.480 --> 0:17:34.720 the race next year. And I think most people expect, 0:17:34.760 --> 0:17:36.720 and I think this is correct, that it will be 0:17:36.760 --> 0:17:41.240 a Macron La Penn runoff again in May next year. Mitch, 0:17:41.640 --> 0:17:45.640 you mentioned just across the channel to the UK lockdown. 0:17:45.960 --> 0:17:49.840 There rollout of the vaccine slower as we see in 0:17:49.840 --> 0:17:51.480 many parts of the world. Give us a sense of 0:17:52.080 --> 0:17:53.600 how things are going in the early days of the 0:17:53.640 --> 0:17:57.080 lockdown in the UK. I mean, it's a big mess, frankly, 0:17:57.160 --> 0:18:00.119 because Boris Johnson is just not across the crisis is 0:18:00.280 --> 0:18:03.880 you know, he's not good at taking and leaning into decisions. 0:18:03.880 --> 0:18:05.960 He's waiting until the very last moment. He gave a 0:18:06.080 --> 0:18:09.440 very big interview with a very high profile presenter here 0:18:09.480 --> 0:18:12.880 on Sunday where he effectively told everybody will be fined 0:18:12.920 --> 0:18:15.280 to return to school the following day. That evening he 0:18:15.640 --> 0:18:18.040 plunged the country back into a third lockdown. So I 0:18:18.080 --> 0:18:22.199 think the government's control of the pandemic, Boris Johnson's competence, 0:18:22.200 --> 0:18:26.439 the competence of his administration, his cabinet, they're all really 0:18:26.840 --> 0:18:29.280 I think, in the firing line. And that's on top 0:18:29.320 --> 0:18:31.639 of he has delivered the deal on Brexit, that's correct, 0:18:31.840 --> 0:18:34.520 but now the implications of that deal are really beginning 0:18:34.520 --> 0:18:38.480 to be felt. Delays at the port's delays getting into 0:18:38.520 --> 0:18:41.560 the UK, and I think that just it creates a 0:18:41.640 --> 0:18:44.600 set of questions really about the credibility and competence of 0:18:44.640 --> 0:18:47.160 the government that I think are going to stay with 0:18:47.240 --> 0:18:51.400 Johnson for some time. What type of risk did those 0:18:51.480 --> 0:18:55.399 challenges to Prime Minister Johnson? What are they posed to 0:18:55.560 --> 0:18:59.639 his his government going forward? I think there's not a 0:18:59.760 --> 0:19:03.919 lead a ship concern in the short term, but but 0:19:04.040 --> 0:19:06.840 the pandemic now and I think the government of the 0:19:06.880 --> 0:19:10.320 perception of how the government has managed the pandemic really 0:19:10.520 --> 0:19:13.960 really hangs on the big bet the government has made 0:19:14.040 --> 0:19:18.200 on the vaccinations. So they really got I think, start 0:19:18.240 --> 0:19:22.760 getting jobs in people's arms and getting the population vaccinated. 0:19:22.800 --> 0:19:25.080 And if the government is able to do that effectively, 0:19:25.359 --> 0:19:27.800 So let's say we're moving towards the east to break 0:19:27.840 --> 0:19:30.800 in a large part of the vulnerable population has been 0:19:30.880 --> 0:19:33.960 vaccinated by that time, as the government is claiming will 0:19:34.000 --> 0:19:36.920 be the case, then he may be able to emerge. 0:19:36.920 --> 0:19:38.640 You know, if you're thinking a year, two years down 0:19:38.720 --> 0:19:44.360 the track, relatively unscathed from this crisis. If the vaccination 0:19:44.560 --> 0:19:48.119 that does not work out, um, then I think the 0:19:48.160 --> 0:19:50.680 government's in trouble. And then I think Boris Shawn's in trouble, 0:19:50.720 --> 0:19:53.800 and that will be a question in Mr Rahman, where 0:19:53.800 --> 0:19:57.240 does demand come from in Europe? I mean, basically, it's 0:19:57.320 --> 0:20:01.760 underperformed America for a jillion years. I know there's glimmers 0:20:01.840 --> 0:20:03.960 of you know, real pop and all that, there isn't 0:20:04.080 --> 0:20:07.399 much of a tech sector. Is well, what is the 0:20:07.560 --> 0:20:11.679 might of the European consumer now to help jump start 0:20:11.760 --> 0:20:15.920 everything like happens routinely in the United States. I think 0:20:15.960 --> 0:20:18.399 this is a great question, Tom, And you know senior 0:20:18.440 --> 0:20:21.240 European policymakers I talked to they basically think the EU 0:20:21.320 --> 0:20:24.520 has missed the boat on digitization. I think you're right. 0:20:24.560 --> 0:20:28.560 You know, we don't have that technical, technological, that innovation 0:20:28.720 --> 0:20:31.400 dynamic that you see in the state where the EU 0:20:31.520 --> 0:20:34.000 is now placing it. That is on the green transition, 0:20:34.640 --> 0:20:37.720 on greening the economy, and you'll see the big seven 0:20:37.800 --> 0:20:40.480 hundred and fifty billion recovery fund that was agreed at 0:20:40.520 --> 0:20:43.199 the end of last year is really being used and 0:20:43.280 --> 0:20:46.639 seen as a vehicle to try and promote that green transition. 0:20:46.680 --> 0:20:48.840 And the UK is obviously at the forefront of that 0:20:48.880 --> 0:20:50.639 and will be with the cop climates from at the 0:20:50.720 --> 0:20:54.760 end of the year, are implementing a one billion recovery 0:20:54.800 --> 0:20:57.800 plan that again is very much focused on the green transition. 0:20:57.840 --> 0:21:00.080 So I think that's where the EU sees it, so 0:21:00.320 --> 0:21:03.960 being a possible leader, whether or not will work out again, 0:21:03.960 --> 0:21:06.160 we'll we'll need to see about the area right point 0:21:06.200 --> 0:21:08.840 to that's one of big growth to the Ouropean economy 0:21:08.880 --> 0:21:11.360 over the medium term. Mid Roman. Thank you so much 0:21:11.359 --> 0:21:13.199 and thank you to all of your raising groups. Just 0:21:13.280 --> 0:21:22.320 brilliant work, and we're just going to frame where America's 0:21:22.640 --> 0:21:27.960 economy is. Tiffany Wilding joins from Pimco. Tiffany, I don't 0:21:27.960 --> 0:21:30.879 want a lot of numbers. I just want to know 0:21:32.160 --> 0:21:35.840 what the next six months looks like. You guys are 0:21:35.880 --> 0:21:41.800 acclaimed for the new normal. Is this the new normal? Well, 0:21:41.840 --> 0:21:44.520 I certainly hope not, Tom. I mean, you know, the 0:21:45.200 --> 0:21:47.800 it was clearly a very weak employment report for example 0:21:47.800 --> 0:21:49.680 this morning, which I think you know, clearly show that 0:21:49.680 --> 0:21:53.320 the economy is still hurting from the virus pandemic, you know, 0:21:53.400 --> 0:21:56.600 and as a result of you know, the targeted business 0:21:56.600 --> 0:21:59.280 closures that had to had to happen in order to 0:21:59.320 --> 0:22:01.959 try to contain that pandemic. We certainly hope that's not 0:22:02.000 --> 0:22:04.840 the new normal. But you asked me to to think 0:22:04.840 --> 0:22:06.960 about the next six months ahead, you know. And I 0:22:06.960 --> 0:22:09.560 think we're really you know, we're really optimistic that the 0:22:09.840 --> 0:22:12.760 key word here will be re acceleration. Um. And I 0:22:12.800 --> 0:22:14.919 say that because you know, we you know, we we 0:22:15.000 --> 0:22:17.840 do have a vaccine. We hope that the vaccine uh 0:22:18.440 --> 0:22:21.760 distribution can be rammed up, you know. But in addition 0:22:21.760 --> 0:22:24.760 to that, we have fiscal policymakers in Washington which we 0:22:24.840 --> 0:22:28.119 think will will will certainly support the recovery, continue support 0:22:28.160 --> 0:22:31.679 the recovery. We just got a nine billion dollar stimulus 0:22:31.720 --> 0:22:34.959 bill in late December to help bridge the gap for people, uh, 0:22:35.000 --> 0:22:36.440 you know, while we're kind of dealing with the winter 0:22:36.520 --> 0:22:38.760 and the COVID virus. We think you could see under 0:22:38.840 --> 0:22:42.800 a democratic control of Washington, another trillion dollars you know, 0:22:42.840 --> 0:22:44.679 that could be that could come about in March, and 0:22:44.720 --> 0:22:46.639 that's really going to help the economy sort of bridge 0:22:46.640 --> 0:22:49.439 this and re accelerate into the back end. And I 0:22:49.480 --> 0:22:51.120 don't want you to put a number on it, because 0:22:51.119 --> 0:22:53.560 I don't need the General Council PIMCO calling me up 0:22:53.560 --> 0:22:56.159 and saying I was out of bounds. But Tiffany to 0:22:56.280 --> 0:22:59.919 take Claudius some is just one example the liberal economy 0:23:00.080 --> 0:23:03.639 US in Europe, in America, who are saying, you guys 0:23:03.640 --> 0:23:06.600 are nuts at the margin of this billion or that trillion, 0:23:07.200 --> 0:23:09.359 and we're going to need a certain percentage of g 0:23:09.440 --> 0:23:13.240 d P, which is six or seven or eight trillion 0:23:13.280 --> 0:23:16.639 dollars of aid no matter how it comes. Are we 0:23:16.760 --> 0:23:21.280 closer to that view with the news of the last week, Yeah, 0:23:21.280 --> 0:23:24.840 so we think you could get um another another so 0:23:24.920 --> 0:23:28.000