Speaker 1: Global business news twenty four hours a day. If Bloomberg
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Speaker 1: this is a Broomberg business flash and I'm Karen Moscow.
Speaker 1: Socks are lower, with the S and P five hundred
Speaker 1: index slipping for a second day as investors consider the
Speaker 1: capacity of central banks to boost global growth. We check
Speaker 1: the markets every fifteen minutes throughout the trading day. On
Speaker 1: Bloomberg SNP five hundred down half per cent or nine points,
Speaker 1: to twenty ten, the Dow Jones Industrial Average down four
Speaker 1: tenths per cent or sixty one points to seventeen thousand,
Speaker 1: one hundred sixty seven, and the NASDAC is down four
Speaker 1: ten percent or twenty points, to forty seven twenty nine.
Speaker 1: Ten year treasury of five thirty seconds, the yield one
Speaker 1: point nine three percent yield on the two year point
Speaker 1: nine five percent. Nimex screwed oil down two percent or
Speaker 1: seventy three cents to thirty six forty seven. A barrel
Speaker 1: comes goal down one point two percent or fifteen dollars
Speaker 1: fifty cents at twelve twenty nine fifty and ounce. The
Speaker 1: euro and dollar eleven oh five. The yen is at
Speaker 1: one twelve point eight eight. Faraoh Corporate Stion, a maker
Speaker 1: of chemicals for the manufacturing industry, recently receiving a takeover
Speaker 1: approach from Apollo Global Management. That's according to people with
Speaker 1: knowledge of the matter. Farrah rebuffing the initial approach, which
Speaker 1: was made without or within rather recent weeks, that people said,
Speaker 1: asking not to be identified as the matter isn't public.
Speaker 1: And Valiant Pharmaceuticals plunging in early twittering as much as
Speaker 1: this morning after it corrected its Ebada guidance lower to
Speaker 1: six billion dollars. And that's a Bloomberg business flash, Tom
Speaker 1: and Mike Karena. Thanks so much of Bloomberg surveillance bunched
Speaker 1: by interactive brokers. Traders University, even experienced traders need to
Speaker 1: keep learning. Traders University will get you up to speed
Speaker 1: quickly with short videos, webinars, courses and more. Visit ib k,
Speaker 1: r B dot, come slash, stay ahead. And Valiant continues
Speaker 1: to not find a bid. Mike down right now, we
Speaker 1: have a forty handle. Take your money it appears out
Speaker 1: of value, put it into Arrow and the hope that
Speaker 1: maybe they'll restart those talks with Apollo Global. Pharaoh up
Speaker 1: about ten right now. Um, here's some interesting and exciting news.
Speaker 1: The Canadian Prime Minister, Justin Trudeau back in the United States.
Speaker 1: He's gonna be in New York next couple of days.
Speaker 1: He wants to he's visiting some folks of the United Nations.
Speaker 1: Wants to run for a seat on the United Nations
Speaker 1: Security Council. Canada that is, but we've already given him
Speaker 1: a seat. We we are very excited that Justin Trudeau
Speaker 1: will be our guest at nine o'clock on Thursday, Bloomberg
Speaker 1: Surveillance Bloomberg Go on television, John Michael Fwaite will interview
Speaker 1: the new Prime Minister of Canada. Good so you will
Speaker 1: not want to miss that on Thursday. David Blanchard joining
Speaker 1: us now from Dirtmouth on austerity. Is there still austerity
Speaker 1: out there? Danny certainly is. I'm afraid. And in the
Speaker 1: UK we've talked that the UK chuncelor tomorrow is going
Speaker 1: to impose a big new round about sterity as the
Speaker 1: economy flowed. Well, they've got makes no sense, makes no
Speaker 1: sense to me. They've got a pledge to balance the budget.
Speaker 1: By what he's going to have to do something? You know,
Speaker 1: he certainly has a right. Well, he certainly has a
Speaker 1: pledge to do it with no economists, as far as
Speaker 1: I can tell in the World's a good idea. But
Speaker 1: he has a problem in the sense that there is
Speaker 1: a Brexit vote that's coming, so he has to balance
Speaker 1: that trying to make people feel good about where they
Speaker 1: are now against the rather foolish pledge that he made
Speaker 1: to balance the budget. And the big problem he's had
Speaker 1: is that the forecast he made in November looked far
Speaker 1: too optimistic. They had a set of scenarios and I
Speaker 1: argued at the time their work case scenario was my
Speaker 1: best case scenario. And essentially that's what's happened. Nominal GDP
Speaker 1: got revised downward a lot, and the good news, if
Speaker 1: he liked the kind of bubbly news he produced in
Speaker 1: November three months ago, has now just sort of gone
Speaker 1: up in his smoke, and he has this delicate balancing
Speaker 1: act to do. And my suspicion is, and that it's
Speaker 1: well cropped out, he's going to cut one point two
Speaker 1: billion dollars from the disabled to fund tax cuts, which
Speaker 1: is probably not very popular. David had the privilege of
Speaker 1: sitting in your lecture at Dartmouth you when I did
Speaker 1: something once for your good students in the Hangover community
Speaker 1: ages ago. I believe then some of what we talked
Speaker 1: about was in the textbooks. Most of what Mike and
Speaker 1: I talk about now isn't in the textbooks. How seat
Speaker 1: of the pants are our central banks at this moment?
Speaker 1: I think that's a great question, Tom. I think I've
Speaker 1: said to you on a few occasions. But if we
Speaker 1: look back at what we did when we went in,
Speaker 1: I started the Monetary Policy Committee, and we thought about
Speaker 1: what we do and what we did to how we
Speaker 1: went to non conventional policy and what it meant, and
Speaker 1: we were literally they're flying by the seat of our plants,
Speaker 1: and we always thought, well, when we have to do exit,
Speaker 1: that's going to be very difficult. We're going to have
Speaker 1: to look at the day eater and that's really a problem.
Speaker 1: And people say things that they have a plan, that
Speaker 1: said has to plan, the MPC has a plan, Well,
Speaker 1: they actually really the plan is to follow the data.
Speaker 1: And I have a sneaking feeling that right now looks
Speaker 1: a lot like the turning points in two thousand and eight.
Speaker 1: We've had very bad p M I for the UK
Speaker 1: and the US bad retail sales numbers this morning, bad
Speaker 1: wholesale data, which suggests that potentially we are seeing a
Speaker 1: turning point. And of course what happens today is that
Speaker 1: central banks can't cut rates by five basis points as
Speaker 1: they did in oh I'm not suggesting the scale of
Speaker 1: the shock is as high, but it certainly looks that
Speaker 1: there are turning points going on, especially driven by the
Speaker 1: slowing of the world's second largest economy, the government from
Speaker 1: the what you were talking about with the the UK
Speaker 1: government into the political campaign here pretty much any account
Speaker 1: and this will tell you that it is not the
Speaker 1: case that countries have to balance their budget in the
Speaker 1: same way that families do. But on the converse side,
Speaker 1: is there an economic advantage to having a balanced budget? Well,
Speaker 1: certainly having credible fiscal plan makes sense, but the question,
Speaker 1: first of all is over what time period should you
Speaker 1: balance that budget. Countries, as you say, aren't like households.
Speaker 1: And I remember one final work, and I won't tell
Speaker 1: you who it was, but I was having a conversation
Speaker 1: with a famous central banker who said that that he
Speaker 1: thought that a balance in the budget over about a
Speaker 1: fifteen year period was a pretty good idea. In the
Speaker 1: UK there's a debate between the two parties about what
Speaker 1: should you balance, and the Labor Party this week came
Speaker 1: out and said, let's think about balancing the um that
Speaker 1: if you like the current part of the budget over
Speaker 1: a reasonably short period, but exclude from that spending on
Speaker 1: in better summons, you don't have to balance that. You
Speaker 1: can borrow money at such low rates that potentially this
Speaker 1: will be self salancing. So there are obvious issues in
Speaker 1: the economics about over what time period do you try
Speaker 1: and balance budgets when when you're at the zero lower bound?
Speaker 1: And do you include investment spending? In my view is
Speaker 1: that you shouldn't include investment spending and fifteen years is
Speaker 1: probably a reasonable time across a cycle or so trying balancing.
Speaker 1: And obviously the Chance in the UK has sound out
Speaker 1: the error of his way because he basically can't balance
Speaker 1: the budget. Said he'd removed the deputy in a parliament
Speaker 1: and he hasn't even removed half of it. So plans
Speaker 1: written down the refine. But the practicalities in this world
Speaker 1: that Tom just talked about, this is the world was
Speaker 1: not seen. You shouldn't have silly rules when these rules
Speaker 1: don't apply now. Um, I was just telling someone to
Speaker 1: read Scodolski's monograph The Return of Kings, which I urge
Speaker 1: every conservative and obviously liberal to read, and it is
Speaker 1: so informative about when getting the foxholes. I would suggest,
Speaker 1: professor did a large part of the Western civilization public
Speaker 1: feels like they're in a foxhll. Mike McKee mentioned the
Speaker 1: other day the exit polling out of Michigan eight percent
Speaker 1: or so of the people felt that we're getting ahead
Speaker 1: eight zero, So a lot of people are in the foxhole.
Speaker 1: What is your Keynesian prescription that the establishment can affect
Speaker 1: to help the people who feel like they're in a foxhole? Well,
Speaker 1: and you got thirty seconds more monetary stimulus if you
Speaker 1: think people have done badly in the US. In the
Speaker 1: UK real wages about eight percent compared to the start
Speaker 1: of the recession. So essentially what we've seen is, I mean,
Speaker 1: on this program, we've taught endlessly about it. My view
Speaker 1: is affected two little stimulus and the fiscal AFOA bailed
Speaker 1: out of Kansism too soon, and that's why we have
Speaker 1: the descent in the UK have out breath, and in
Speaker 1: the US Trump and another gree Well, I know when
Speaker 1: Dartmouth gets to the final four, you'll be at Houston.
Speaker 1: But uh, Professor Blanchard, thank you? So are you marrying
Speaker 1: any daughters this summer? Are you? Are you gonna help
Speaker 1: the UK GDP again as you always do? I know
Speaker 1: I always do, but not this year. David Blanchard single
Speaker 1: handedly turning the United Kingdom from recession to globe the
Speaker 1: economic growth with a wedding or two a few years ago.
Speaker 1: He is at Dartmouth. Mike, We've got to look at
Speaker 1: Valiant down three or three. That's not a you know,
Speaker 1: you're not missed hearing me. Well here's the thing. And
Speaker 1: you talked about stock price going up and down. Here's
Speaker 1: a great way to think about it. In by as
Speaker 1: of June of two thousand fifteen, last year, nine months ago,
Speaker 1: this was a seventy six billion dollar company. It is
Speaker 1: now a fifteen billion dollar company some sort of scale
Speaker 1: on much A massive shout out to Cynthia Coons, who
Speaker 1: was buried personally, came off the all to inform our
Speaker 1: show of what you heard in the call. And Lisa
Speaker 1: Bramo it's in get flight really looking forward to what
Speaker 1: Max Neson we'll do with this, Mike, and I don't
Speaker 1: do bi hold cell you know. I know there's a
Speaker 1: whole industry for that, and other people do that. But
Speaker 1: this has now gone over to the realm of corporate governance,
Speaker 1: corporate finance, and almost I got to be careful here, Mike.
Speaker 1: I don't want to say forensic accounting, but at least
Speaker 1: academic accounting, to say to yourself what happened and still
Speaker 1: no bid. I don't want to say we found a
Speaker 1: bid here at seven point zero two and does seem
Speaker 1: to have put in a bottom for the moment, But
Speaker 1: we watch throughout the day. Tomorrow we'll be with you, Mike,
Speaker 1: and I haven't extended what is the hour day to
Speaker 1: morow something like that. Me and Janet we will be
Speaker 1: here early, early, early with perspective and conversation on these
Speaker 1: unusual times, and then we'll move one PM with Scarlet
Speaker 1: Fou on televis Genneral Radio worldwide for our special informed
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Speaker 1: y U n can Fell. You our global technical director
Speaker 1: of Bloomberg Surveillance