1
00:00:02,400 --> 00:00:04,680
Speaker 1: Good morning. I'm Brian Curtiz.

2
00:00:04,360 --> 00:00:07,320
Speaker 2: And I'm Doug Krisner. Here are the stories we're following today.

3
00:00:09,080 --> 00:00:11,280
Speaker 1: The US is trying to find the right line to

4
00:00:11,360 --> 00:00:14,480
Speaker 1: walk in response to the deadly drone attack in Jordan.

5
00:00:14,880 --> 00:00:17,480
Speaker 1: At Baxter has the story and more from San Francisco.

6
00:00:17,720 --> 00:00:17,799
Speaker 3: Ed.

7
00:00:18,160 --> 00:00:20,079
Speaker 4: Yeah, that's right, Brian. At the same time, it is

8
00:00:20,079 --> 00:00:23,000
Speaker 4: saying iron is behind the attacks for sure. Now, NSC

9
00:00:23,120 --> 00:00:27,160
Speaker 4: official John Kirby says the US response will be at

10
00:00:27,160 --> 00:00:29,600
Speaker 4: the right time, on its timeline.

11
00:00:29,760 --> 00:00:33,040
Speaker 5: We'll do that on our schedule, in our time, and

12
00:00:33,080 --> 00:00:35,519
Speaker 5: we'll do it in the manner of the President's choosing

13
00:00:35,640 --> 00:00:39,560
Speaker 5: as commander in chief. We'll also do it fully cognizant

14
00:00:40,159 --> 00:00:44,360
Speaker 5: of the fact that these groups backed by Teyran have

15
00:00:44,600 --> 00:00:47,040
Speaker 5: just taken the lives of American troops.

16
00:00:47,960 --> 00:00:51,199
Speaker 4: Now, Defense Secretary Lloyd Austin is a bit stronger in

17
00:00:51,240 --> 00:00:51,879
Speaker 4: his response.

18
00:00:51,960 --> 00:00:55,160
Speaker 6: President and I will not tolerate attack on US forces

19
00:00:56,200 --> 00:01:00,680
Speaker 6: and we will take all necessary actions to defend the US.

20
00:01:00,920 --> 00:01:04,679
Speaker 4: So what are the options, Well, Bloomberg's Jennifer Welsh.

21
00:01:04,120 --> 00:01:07,679
Speaker 7: Everything in terms of military tactics, from mer surgical strike,

22
00:01:07,800 --> 00:01:11,400
Speaker 7: cyber attacks to more traditional option, and then in terms

23
00:01:11,440 --> 00:01:15,039
Speaker 7: of targets. There's the more espiratory option of actually striking

24
00:01:15,160 --> 00:01:19,160
Speaker 7: Iranian targets in irong to striking Iranian forces outside of

25
00:01:19,200 --> 00:01:23,320
Speaker 7: the country to Iranian proxies and the infrastructure that supports them.

26
00:01:23,800 --> 00:01:26,960
Speaker 4: So the US preliminary findings on how the defense systems

27
00:01:26,959 --> 00:01:30,039
Speaker 4: could have missed the incoming drone, well, they say that

28
00:01:30,200 --> 00:01:34,200
Speaker 4: it apparently flew directly behind a US drone that was

29
00:01:34,280 --> 00:01:38,640
Speaker 4: landing at the base, confusing the human and the digital defenders.

30
00:01:39,400 --> 00:01:42,280
Speaker 4: Is Ready Prime Minister Benjamin net Yahoo in Paris to

31
00:01:42,319 --> 00:01:44,560
Speaker 4: try to get a hostage return deal, says the meetings

32
00:01:44,600 --> 00:01:49,320
Speaker 4: were constructive, but that significant gaps remain. As office says

33
00:01:49,320 --> 00:01:53,080
Speaker 4: those differences will be discussed at additional meetings this week. Meanwhile,

34
00:01:53,400 --> 00:01:56,600
Speaker 4: Israel is saying that as many as as much as

35
00:01:57,160 --> 00:02:00,000
Speaker 4: ten percent of the UN relief agencies twelve thousand works

36
00:02:00,640 --> 00:02:04,120
Speaker 4: in Goza this un where members of Hamas or Palestinian

37
00:02:04,280 --> 00:02:08,680
Speaker 4: Islamic Jihad Senate negotiators continue to work on a border deal.

38
00:02:08,720 --> 00:02:11,919
Speaker 4: House Republican Greg Murphy on Bloomberg's balance of power says,

39
00:02:12,200 --> 00:02:13,639
Speaker 4: the answer really is pretty clear.

40
00:02:14,000 --> 00:02:16,840
Speaker 6: We have to go back to the stay in Mexico policy.

41
00:02:16,880 --> 00:02:18,520
Speaker 6: I mean, I think that was the star work of

42
00:02:18,520 --> 00:02:21,600
Speaker 6: where all this began. We had Central American countries that

43
00:02:21,680 --> 00:02:25,000
Speaker 6: had bought into this that they folks that seek asylum

44
00:02:25,120 --> 00:02:29,120
Speaker 6: in the country of entry rather than transgressing across all

45
00:02:29,160 --> 00:02:30,200
Speaker 6: of Central America.

46
00:02:30,520 --> 00:02:33,120
Speaker 4: Says the president has executive powers that he could use

47
00:02:33,160 --> 00:02:36,160
Speaker 4: to get it done. Egene Carroll says that she is

48
00:02:36,400 --> 00:02:38,720
Speaker 4: wanting to donate the award money that she wanted her

49
00:02:38,720 --> 00:02:42,000
Speaker 4: civil suit against Donald Trump. Donate it. On ABC with

50
00:02:42,080 --> 00:02:45,760
Speaker 4: George Stephanopoulos. She says that she does have a vague

51
00:02:45,840 --> 00:02:47,240
Speaker 4: plan to now, I like to.

52
00:02:47,160 --> 00:02:52,160
Speaker 3: Give the money to something Donald Trump hates if it

53
00:02:52,200 --> 00:02:54,560
Speaker 3: will cause him pay for me to give money to

54
00:02:54,800 --> 00:03:01,360
Speaker 3: certain certain things. That is mind well, perhaps fund for

55
00:03:01,480 --> 00:03:04,360
Speaker 3: the women who have been sexually assaulted by Donald Trump.

56
00:03:04,440 --> 00:03:08,080
Speaker 4: Trump's attorneys are, of course appealing that award. Meanwhile, Trump

57
00:03:08,120 --> 00:03:10,760
Speaker 4: is facing the pair of major legal verdicts that could

58
00:03:10,760 --> 00:03:13,000
Speaker 4: wipe out most, if not all, the cash that he

59
00:03:13,040 --> 00:03:15,800
Speaker 4: says he has on hand. Global News twenty four hours

60
00:03:15,800 --> 00:03:18,040
Speaker 4: a day and whenever you want it with Bloomberg News

61
00:03:18,080 --> 00:03:22,880
Speaker 4: Now in San Francisco. I'm Ed Baxter. This is Bloomberg Brian, and.

62
00:03:23,000 --> 00:03:25,160
Speaker 1: Thanks very much. Six minutes here passed the hour. Brian

63
00:03:25,240 --> 00:03:27,359
Speaker 1: Curtis and Grisner, Let's take a look at the top

64
00:03:27,400 --> 00:03:30,760
Speaker 1: business stories of the hour. The US Justice Department has

65
00:03:30,800 --> 00:03:35,800
Speaker 1: announced charges against several individuals for conducting a massive cryptocurrency

66
00:03:35,840 --> 00:03:38,680
Speaker 1: fraud scheme. The scheme ran to just under one point

67
00:03:38,840 --> 00:03:42,400
Speaker 1: nine billion dollars. In a statement today, the DOJ said

68
00:03:42,440 --> 00:03:47,760
Speaker 1: the defendants falsely represented that investors would receive substantial returns

69
00:03:47,840 --> 00:03:52,240
Speaker 1: paid from cryptocurrency mining operations. It said those returns did

70
00:03:52,240 --> 00:03:53,800
Speaker 1: not exist well.

71
00:03:53,840 --> 00:03:57,240
Speaker 2: Today, the US Treasury reduced its estimate for federal borrowing

72
00:03:57,320 --> 00:04:01,280
Speaker 2: for the current quarter, despite a widening fiscal deficit. Here in,

73
00:04:01,280 --> 00:04:04,720
Speaker 2: the US Treasury cut net borrowing. This is the estimate

74
00:04:04,960 --> 00:04:08,080
Speaker 2: from the period January through March down to seven hundred

75
00:04:08,120 --> 00:04:11,400
Speaker 2: sixty billion dollars. Here's the thing, The previous projection was

76
00:04:11,440 --> 00:04:15,640
Speaker 2: eight hundred sixty billion. That number we received in late October.

77
00:04:15,960 --> 00:04:20,360
Speaker 2: The reduction was really not that expected by many primary dealers,

78
00:04:20,400 --> 00:04:23,359
Speaker 2: so you had to move higher in bond prices yields

79
00:04:23,360 --> 00:04:26,000
Speaker 2: coming down. The ten year Treasury was last quoted in

80
00:04:26,040 --> 00:04:28,040
Speaker 2: New York at four point zero seven percent.

81
00:04:28,400 --> 00:04:31,000
Speaker 1: Brian, and we'll get a little bit more on this

82
00:04:31,040 --> 00:04:35,359
Speaker 1: from Garfield Reynolds coming up. Bloomberg Chief rates correspondent for Asia,

83
00:04:35,880 --> 00:04:39,360
Speaker 1: well Elon Musk says the first human patient has received

84
00:04:39,400 --> 00:04:43,800
Speaker 1: a brain implant from his startup, Neuralink. Musk said that

85
00:04:43,839 --> 00:04:47,799
Speaker 1: the patient is recovering well and that initial results are promising.

86
00:04:48,279 --> 00:04:52,080
Speaker 1: Neuralink's brain implant aims to help people with traumatic injuries

87
00:04:52,360 --> 00:04:56,919
Speaker 1: operate computers using only the thoughts. The firm received FDA

88
00:04:57,040 --> 00:04:59,920
Speaker 1: approval for the first human trials in May of last year.

89
00:05:00,120 --> 00:05:02,960
Speaker 2: Done so we know China, Evergrand has been ordered by

90
00:05:03,000 --> 00:05:05,880
Speaker 2: a judge in Hong Kong to liquidate. Well, now what

91
00:05:06,040 --> 00:05:10,440
Speaker 2: is sure to be a very complicated process begins. Evergrand

92
00:05:10,520 --> 00:05:14,080
Speaker 2: is a massive enterprise across hundreds of cities, a number

93
00:05:14,120 --> 00:05:16,480
Speaker 2: of businesses. Here's Bloomberg Steven Engel.

94
00:05:17,440 --> 00:05:20,080
Speaker 8: Will that court order be followed in Mainland, where there's

95
00:05:20,080 --> 00:05:24,080
Speaker 8: a different legal system obviously, which obviously takes direction essentially

96
00:05:24,120 --> 00:05:27,760
Speaker 8: from the Communist Party. So if there's a dispersal of

97
00:05:27,880 --> 00:05:31,040
Speaker 8: these assets, is it going to happen in China?

98
00:05:31,120 --> 00:05:31,320
Speaker 3: Right?

99
00:05:31,560 --> 00:05:34,719
Speaker 8: Because essentially there's no precedence for a large company like

100
00:05:34,760 --> 00:05:38,200
Speaker 8: this with a spaghetti bowl of different assets and liabilities

101
00:05:38,520 --> 00:05:43,000
Speaker 8: and priorities and international bondholders and different kinds of creditors.

102
00:05:43,160 --> 00:05:47,200
Speaker 8: Who's going to be left with the lion's share.

103
00:05:47,040 --> 00:05:50,200
Speaker 2: That is Bloomberg Steven Engel talking about the spaghetti bowl.

104
00:05:50,600 --> 00:05:53,840
Speaker 2: This company amassed more than three hundred billion dollars three

105
00:05:54,000 --> 00:05:57,560
Speaker 2: hundred billion in debt during the property boom in China. Well,

106
00:05:57,600 --> 00:06:01,560
Speaker 2: now Evergrand is valued valued at just two hundred and

107
00:06:01,600 --> 00:06:05,280
Speaker 2: seventy nine million, with an m SO ninety nine percent

108
00:06:05,360 --> 00:06:09,560
Speaker 2: below its peak. This, as Stephen highlighted, this liquidation is

109
00:06:09,600 --> 00:06:12,120
Speaker 2: going to be a key legal test for the courts

110
00:06:12,160 --> 00:06:15,280
Speaker 2: in Hong Kong. Where and on the mainland, I should

111
00:06:15,320 --> 00:06:18,040
Speaker 2: say as well, where most of Evergrand's assets reside.

112
00:06:18,160 --> 00:06:20,680
Speaker 1: Right, Well, you just wonder, Doug whether or not the

113
00:06:20,720 --> 00:06:24,279
Speaker 1: liquidator can get their hands on some of these assets

114
00:06:24,360 --> 00:06:28,640
Speaker 1: that are operated or on land that local governments operate in.

115
00:06:28,720 --> 00:06:31,680
Speaker 1: So it is going to be a fascinating story. We're

116
00:06:31,720 --> 00:06:35,040
Speaker 1: not going to know the answer, but absolutely international investors,

117
00:06:35,240 --> 00:06:38,919
Speaker 1: investor confidence will will be hinging a lot on this

118
00:06:39,080 --> 00:06:41,839
Speaker 1: as we go forward. Well, let's talk a little bit

119
00:06:41,839 --> 00:06:45,000
Speaker 1: more about the US Treasury reducing the estimate for federal

120
00:06:45,040 --> 00:06:48,760
Speaker 1: borrowing for the current quarter. We're joined now by Garfield Reynolds,

121
00:06:48,800 --> 00:06:53,000
Speaker 1: who's Bloomberg's chief rates correspondent for Asia. So in a

122
00:06:53,080 --> 00:06:56,520
Speaker 1: sense it's a good thing, Garfield, because the Treasury said, look,

123
00:06:56,880 --> 00:07:00,800
Speaker 1: you know, we've we had higher than projected net fiscal flows.

124
00:07:00,800 --> 00:07:03,359
Speaker 1: In otherwise, they just have more money on hand or

125
00:07:03,400 --> 00:07:06,960
Speaker 1: at hand than they expected. So from that standpoint, it's

126
00:07:07,000 --> 00:07:09,880
Speaker 1: a good thing. But then it also raises some questions

127
00:07:10,000 --> 00:07:14,760
Speaker 1: about the deficit and overall debt. Your thoughts on the announcement.

128
00:07:15,360 --> 00:07:19,440
Speaker 9: Well, you know, the Treasury, the last couple of times

129
00:07:19,440 --> 00:07:24,560
Speaker 9: they've made funding announcements have been very much you careful

130
00:07:24,680 --> 00:07:26,840
Speaker 9: not to set off the sort of response they got

131
00:07:26,920 --> 00:07:31,280
Speaker 9: middle of last year when they surprised the upside. Back then,

132
00:07:31,320 --> 00:07:34,640
Speaker 9: the assumption was that, you know, whatever you want to borrow,

133
00:07:34,760 --> 00:07:37,840
Speaker 9: people will borrow it, because what else are they going

134
00:07:37,920 --> 00:07:40,600
Speaker 9: to do? It's treasuries. That didn't turn out to be

135
00:07:40,640 --> 00:07:44,080
Speaker 9: the case, because you yield spiked in September and October

136
00:07:44,600 --> 00:07:47,120
Speaker 9: for a number of reasons. But that certainly didn't help. So,

137
00:07:47,560 --> 00:07:52,760
Speaker 9: you know, they avoided boosting bond issuance last time round

138
00:07:52,800 --> 00:07:57,320
Speaker 9: by increasing sales of bills. This time round, you know,

139
00:07:57,400 --> 00:08:00,360
Speaker 9: they've they've managed to come up with some numbers through

140
00:08:00,800 --> 00:08:03,720
Speaker 9: these better fiscal flows, through more cash on hand, so

141
00:08:03,760 --> 00:08:06,480
Speaker 9: that they're they're going to borrow less than they can

142
00:08:06,560 --> 00:08:10,240
Speaker 9: initially estimate estimated in the first quarter, and they're very

143
00:08:10,320 --> 00:08:14,000
Speaker 9: much looking forward to next quarter as being a quarter

144
00:08:14,040 --> 00:08:16,760
Speaker 9: where they will need to borrow even less. Uh. The

145
00:08:16,800 --> 00:08:20,520
Speaker 9: one concern there is that if there are tax cuts enacted,

146
00:08:22,600 --> 00:08:25,720
Speaker 9: you know, that that could throw a spanner in those works.

147
00:08:26,080 --> 00:08:31,480
Speaker 9: So they definitely are moving to a very careful management

148
00:08:31,720 --> 00:08:36,400
Speaker 9: of this issue because of all the concern the market

149
00:08:36,440 --> 00:08:39,280
Speaker 9: tomol that it helped to cause, you know, late last year.

150
00:08:39,360 --> 00:08:41,559
Speaker 2: One of the things that I find interesting is that,

151
00:08:41,640 --> 00:08:44,240
Speaker 2: you know, the Treasury has been under pressure because of

152
00:08:44,320 --> 00:08:47,960
Speaker 2: these rising yields in the market, so it's automatically forced

153
00:08:48,000 --> 00:08:51,720
Speaker 2: to pay a higher coupon than it would otherwise. It

154
00:08:51,840 --> 00:08:56,320
Speaker 2: seems like when you're talking about less money being needed

155
00:08:56,360 --> 00:08:59,320
Speaker 2: on the part of tapping the market in the face

156
00:08:59,360 --> 00:09:02,679
Speaker 2: of higher trade yields, that's also, I mean, kind of

157
00:09:02,720 --> 00:09:04,360
Speaker 2: a positive development, one would think.

158
00:09:05,160 --> 00:09:08,520
Speaker 9: Yeah, you could also argue in fact that it's a

159
00:09:08,520 --> 00:09:12,600
Speaker 9: sort of prudent management technique if you're the anticipation is

160
00:09:12,640 --> 00:09:15,960
Speaker 9: that the Fed will cut interest rates later on this year,

161
00:09:16,320 --> 00:09:18,319
Speaker 9: maybe not as much as the market is looking for,

162
00:09:18,360 --> 00:09:21,480
Speaker 9: but they will cut interest rates. That means bond yields,

163
00:09:21,640 --> 00:09:25,240
Speaker 9: all things being equal, should come down noticeably. So it

164
00:09:25,320 --> 00:09:28,480
Speaker 9: does make a lot of sense to try and hold

165
00:09:28,559 --> 00:09:32,640
Speaker 9: back on any borrowings until you get those lower rates

166
00:09:32,679 --> 00:09:36,560
Speaker 9: coming through. That way, you avoid those high coupons that

167
00:09:36,559 --> 00:09:37,200
Speaker 9: you were mentioning.

168
00:09:37,679 --> 00:09:40,000
Speaker 1: But in a sense, it's the fiscal working against the

169
00:09:40,040 --> 00:09:43,880
Speaker 1: Fed subjective to a degree, because with the lower bond

170
00:09:43,920 --> 00:09:48,000
Speaker 1: yields you had a tech stock spike, and that would

171
00:09:48,040 --> 00:09:50,760
Speaker 1: seem to be something that runs a little counter to

172
00:09:50,880 --> 00:09:53,520
Speaker 1: what the FED wants at at the moment. However, you know,

173
00:09:53,600 --> 00:09:57,880
Speaker 1: every department, every government agency does what it feels as best,

174
00:09:57,920 --> 00:09:59,600
Speaker 1: and this is the way the system works.

175
00:10:00,679 --> 00:10:03,720
Speaker 9: Yeah. Well, I mean, the one of the interesting factors

176
00:10:03,760 --> 00:10:05,960
Speaker 9: you're with those tech and other stocks was the way

177
00:10:06,000 --> 00:10:09,559
Speaker 9: that day rose yesterday and so did bonds. And that

178
00:10:09,679 --> 00:10:14,520
Speaker 9: continues this somewhat anomalous situation where bonds and stocks, the

179
00:10:14,600 --> 00:10:18,720
Speaker 9: prices of bonds and stocks are moving you fairly strongly

180
00:10:18,760 --> 00:10:23,320
Speaker 9: correlated together. That doesn't usually happen outside of what do

181
00:10:23,360 --> 00:10:26,680
Speaker 9: you know when rate cycles peak, and as you move

182
00:10:26,800 --> 00:10:30,640
Speaker 9: towards a situation where a FED with lower rates. The

183
00:10:30,679 --> 00:10:35,040
Speaker 9: big question going forward is when this correlation phrase, which

184
00:10:35,040 --> 00:10:37,560
Speaker 9: of the two asset classes is going to be worse off?

185
00:10:38,040 --> 00:10:40,840
Speaker 9: Normally it's been stocks because the Fed has ended up

186
00:10:40,840 --> 00:10:43,719
Speaker 9: engendering a recession this time around, if we do get

187
00:10:43,760 --> 00:10:46,240
Speaker 9: the soft landing that the Fed and so many others

188
00:10:46,360 --> 00:10:48,640
Speaker 9: are hopeful we will get, it might end up being

189
00:10:48,679 --> 00:10:50,640
Speaker 9: bonds that don't do quite so well.

190
00:10:51,160 --> 00:10:53,040
Speaker 2: Yeah, for the moment, I think we can agree that

191
00:10:53,120 --> 00:10:56,200
Speaker 2: financial conditions have loosened a bit given the price action

192
00:10:56,280 --> 00:10:59,760
Speaker 2: that you just described. On Wednesday, we're going to get

193
00:10:59,800 --> 00:11:03,120
Speaker 2: a more detailed plan at how the Treasury intends to

194
00:11:03,280 --> 00:11:06,760
Speaker 2: distribute this borrowing across the curve. I mean, whether more

195
00:11:06,840 --> 00:11:08,320
Speaker 2: is going to be done at the short end or

196
00:11:08,360 --> 00:11:10,280
Speaker 2: more at the long end. Do you have a sense

197
00:11:10,320 --> 00:11:12,360
Speaker 2: of what we may see on Wednesday.

198
00:11:12,880 --> 00:11:16,600
Speaker 9: Well, I mean we'll see. The markets expectation is very

199
00:11:16,679 --> 00:11:20,319
Speaker 9: much that the Fed, sorry that the Treasury will kind

200
00:11:20,360 --> 00:11:23,840
Speaker 9: of follow through with what it indicated earlier, and it

201
00:11:24,040 --> 00:11:28,040
Speaker 9: was expecting to increase the sizes of its auctions for

202
00:11:28,080 --> 00:11:31,800
Speaker 9: a longer term debt, not dip too much into the

203
00:11:31,800 --> 00:11:35,760
Speaker 9: well of short term debt of bills. So there is

204
00:11:35,800 --> 00:11:39,120
Speaker 9: an expectation that they will increase those, but that this

205
00:11:39,240 --> 00:11:41,640
Speaker 9: will kind of be like the last hurrah, that they

206
00:11:41,720 --> 00:11:45,960
Speaker 9: won't want to increase those again going forward, especially because

207
00:11:46,320 --> 00:11:50,400
Speaker 9: they're looking like they're given the impression that the big

208
00:11:50,440 --> 00:11:56,000
Speaker 9: funding jobs are to some extent behind them. We're getting

209
00:11:56,040 --> 00:11:59,760
Speaker 9: back to a more normal setup where in the second quarter,

210
00:11:59,800 --> 00:12:05,160
Speaker 9: for example, there'll be a relatively small borrowing requirement because

211
00:12:05,160 --> 00:12:07,760
Speaker 9: that's where tax receipts come in, and we'll see how

212
00:12:07,760 --> 00:12:10,480
Speaker 9: that goes. After all, we came into this announcement expecting

213
00:12:10,520 --> 00:12:14,440
Speaker 9: they would increase the estimated borrowing that they would be

214
00:12:14,480 --> 00:12:18,440
Speaker 9: doing this quarter, and we got a lower estimate. So

215
00:12:18,920 --> 00:12:21,200
Speaker 9: maybe that same sort of thing will happen with the

216
00:12:21,240 --> 00:12:23,880
Speaker 9: auction sizes, But the market is very much set up

217
00:12:23,920 --> 00:12:26,240
Speaker 9: for an increase in the auction sizes.

218
00:12:27,040 --> 00:12:30,880
Speaker 1: As we know, cash is fungible, even from China. Chinese

219
00:12:31,120 --> 00:12:34,840
Speaker 1: money is finding its way into US assets for sure,

220
00:12:35,640 --> 00:12:39,400
Speaker 1: and we did have this evergrand liquidation call yesterday from

221
00:12:39,480 --> 00:12:42,400
Speaker 1: High Court judge here, and we understand that state lenders

222
00:12:42,440 --> 00:12:46,040
Speaker 1: have been ramping up dollar sales to kind of offset

223
00:12:46,080 --> 00:12:48,800
Speaker 1: the negative impact from that. And so today we have

224
00:12:48,840 --> 00:12:51,439
Speaker 1: the ten year government, the Chinese government bond yelled down

225
00:12:52,200 --> 00:12:55,120
Speaker 1: and it's at the lowest level since two thousand and two.

226
00:12:55,480 --> 00:12:57,840
Speaker 1: Does all of this suggest that investors are just really

227
00:12:57,880 --> 00:13:01,680
Speaker 1: screaming for more action from the BBOC, Well.

228
00:13:01,600 --> 00:13:04,480
Speaker 9: It's partly that. It's partly also the acknowledgment that the

229
00:13:04,960 --> 00:13:11,600
Speaker 9: Chinese economy remains deeply troubled, and part of the part

230
00:13:11,600 --> 00:13:15,080
Speaker 9: of the reason for that is that with the fact

231
00:13:15,080 --> 00:13:17,560
Speaker 9: that they've got to manage currency, with the fact that

232
00:13:17,600 --> 00:13:20,360
Speaker 9: they've got this particular sort of government that they have

233
00:13:20,440 --> 00:13:23,160
Speaker 9: over there, there's a reluctance to do the sort of

234
00:13:23,600 --> 00:13:29,440
Speaker 9: your large actions that the FED has done for the

235
00:13:29,559 --> 00:13:32,719
Speaker 9: US economy. You would think when you've got a real

236
00:13:32,840 --> 00:13:35,360
Speaker 9: estate sector that there's in deep, deep trouble. Your Evergrand

237
00:13:35,440 --> 00:13:37,960
Speaker 9: is just the poster child for that, that you would

238
00:13:38,040 --> 00:13:43,240
Speaker 9: be looking at some sort of major bailout programs, big

239
00:13:43,320 --> 00:13:46,720
Speaker 9: rate cuts, maybe even quantitative easy that's what happened back

240
00:13:46,760 --> 00:13:48,839
Speaker 9: in two thousand and eight. But that's not the sort

241
00:13:48,880 --> 00:13:53,520
Speaker 9: of thing that China can do, and it's been trying

242
00:13:53,520 --> 00:13:55,920
Speaker 9: to turn a stock market around. But the problem is

243
00:13:55,960 --> 00:14:00,679
Speaker 9: that something like Evergrand just you're ways on intimate and

244
00:14:00,800 --> 00:14:04,800
Speaker 9: raises a concern that ordinary Chinese who have normally looked

245
00:14:04,840 --> 00:14:08,480
Speaker 9: at real estate as being a great way to save money.

246
00:14:08,480 --> 00:14:11,120
Speaker 9: That's where you put your nest egg is by investing

247
00:14:11,160 --> 00:14:14,280
Speaker 9: in real estate. That that's no longer way you want

248
00:14:14,280 --> 00:14:18,200
Speaker 9: to put your money, and in fact, that's if you

249
00:14:18,280 --> 00:14:20,320
Speaker 9: do have money in there, you might want to pull

250
00:14:20,360 --> 00:14:23,280
Speaker 9: that out again. So you can see that that sentiment

251
00:14:24,240 --> 00:14:27,000
Speaker 9: indicator for China is pretty gloomy.

252
00:14:27,440 --> 00:14:29,400
Speaker 2: Yeah, not to mention the fact that when you look

253
00:14:29,400 --> 00:14:32,520
Speaker 2: at the way in which foreign investors have been behaving

254
00:14:32,720 --> 00:14:35,600
Speaker 2: in terms of the Chinese markets, this obviously may dent

255
00:14:36,280 --> 00:14:39,360
Speaker 2: confidence even further at a time when China has been

256
00:14:39,400 --> 00:14:43,800
Speaker 2: clamoring for more foreign direct investment. Garfield will leave it there.

257
00:14:43,840 --> 00:14:46,760
Speaker 2: Thank you so much for being with us Bloomberg Scarfield Reynolds,

258
00:14:46,760 --> 00:14:49,520
Speaker 2: helping us understand what we've been talking about in terms

259
00:14:49,520 --> 00:14:51,280
Speaker 2: of the US Treasury today.

260
00:14:52,960 --> 00:14:55,800
Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on the

261
00:14:55,880 --> 00:14:59,440
Speaker 1: story is making news from Hong Kong to Singapore and Wall.

262
00:14:59,200 --> 00:15:02,920
Speaker 2: Street US on your podcast feed every day on Apple,

263
00:15:03,120 --> 00:15:06,000
Speaker 2: Spotify and anywhere else you get your podcast.

264
00:15:06,240 --> 00:15:08,880
Speaker 1: You can also listen live each day on Bloomberg eleven

265
00:15:08,920 --> 00:15:11,320
Speaker 1: three to zero in New York. Bloomberg ninety nine to

266
00:15:11,320 --> 00:15:14,520
Speaker 1: one in Washington, Bloomberg one oh sixty one in Boston,

267
00:15:14,840 --> 00:15:17,360
Speaker 1: and Bloomberg nine sixty in San Francisco.

268
00:15:17,560 --> 00:15:20,480
Speaker 2: Our flagship New York station is also available on your

269
00:15:20,560 --> 00:15:26,200
Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.

270
00:15:26,320 --> 00:15:30,240
Speaker 1: Listen coast to coast on the Bloomberg Business app, SiriusXM,

271
00:15:30,480 --> 00:15:35,360
Speaker 1: the iHeartRadio app, and on Bloomberg dot Com. I'm Brian Curtis.

272
00:15:35,080 --> 00:15:37,520
Speaker 2: And I'm Doug Risner. Join us again tomorrow for all

273
00:15:37,560 --> 00:15:40,040
Speaker 2: the news you need to start your day right here

274
00:15:40,120 --> 00:15:44,080
Speaker 2: on Bloomberg day Break Asia