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Speaker 1: Broadcasting live to New York Cloomberg eleventh Yo to Washington,

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Speaker 1: d C, Bloomberg one, to Boston, Bloomberg twelve, on to

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Speaker 1: San Francisco, Bloomberg nine sixteen to the country sis at

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Speaker 1: SAM Channel one nineteen and around the globe the Bloomberg

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Speaker 1: Radio Plus appen Bloomberg dot com. This is Bloomberg Surveillance

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Speaker 1: and I'm Karen Moscow along with Tom Keene and Michael McKee.

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Speaker 1: The opening Vale brought to you by s c I

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Speaker 1: Imaginement Asset management servicing is unconstrained by infrastructure. See how

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Speaker 1: sc ask Global Operating Platform could be your catalyst for

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Speaker 1: business expansion and se i C dot Com, slash imagine

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Speaker 1: and stocks. They're little change to hire at the open.

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Speaker 1: The SNP five is up less than a tenth of

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Speaker 1: upper cent, up one point at the now Jones industrial average,

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Speaker 1: up a tenth of upper center twenty five points to

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Speaker 1: seventeen thousand, nine hundred forty five. The NASDAC is little change,

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Speaker 1: up less than a tenth of upper cent, or almost

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Speaker 1: three points to fore ten. Your treasury of six thirty

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Speaker 1: seconds he at one point seven one percent yield done

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Speaker 1: the two year point seven seven percent Nimex screwed oil

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Speaker 1: up six ten percent or thirty two cents to fifty

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Speaker 1: two cents of barrel, Comic School down four tenths per

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Speaker 1: cent or four dollars eighty cents at twelve forty two

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Speaker 1: sixty announced the Euro at dollar thirteen sixty six the

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Speaker 1: end when oh seven point four one, Tom and Mike

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Speaker 1: so much, Karen greatly appreciate it. If you work for

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Speaker 1: Michael Musa, you learn to be very direct. Michael mus

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Speaker 1: says probably the most direct account of the late Michael Music.

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Speaker 1: I should say it's probably the most direct abrupt economist

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Speaker 1: I've ever uh met. He was iconic at the International

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Speaker 1: Monetary Fund. A Sharkomodi joins us now who in his

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Speaker 1: own regard as a front right, first rate economist, Robertson,

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Speaker 1: Professor Woodward Wilson School, Princeton, Shoka. You've written an essay

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Speaker 1: on Corexit. You quote a number of are these including

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Speaker 1: Professor Musa. Would Michael would Michael Mussa have voted for Brexit?

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Speaker 1: I think Michael Musa would have taken a skeptical view

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Speaker 1: of the numbers being thrown around on the costs of Brexit.

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Speaker 1: I think ultimately who votes for Brexit depends on a

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Speaker 1: much more emotional decision. But the point of courting Moosa

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Speaker 1: there was that the numbers being trotted out by the

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Speaker 1: entire establishment that Brexit would essentially put britten back into

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Speaker 1: the dark ages. I think that is what Michael Musa

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Speaker 1: would certainly genuously have objected to. What is your view

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Speaker 1: of the economic consequences of Brexit? You you're not convinced

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Speaker 1: that it's going to be a terrible thing. Yeah, so, uh,

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Speaker 1: normally it will happen, is that there will be some

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Speaker 1: redirection of trade. Some of the trade that it goes

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Speaker 1: is conducted with the European Union. Some of that will reduce.

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Speaker 1: My main point there is that even that reduction should

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Speaker 1: not be taken for granted, because ultimately these are very

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Speaker 1: long standing, uh, social relationships that have got embedded in

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Speaker 1: trade relationships, and all the productive relationships will survive. As

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Speaker 1: we know, when exchange rates fluctuate, people do not break

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Speaker 1: their relationships. Germany, for example, for years, has had had

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Speaker 1: an appreciating exchange rate before the Europe and it maintained

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Speaker 1: its relationships. People make accommodations and moreover, most importantly in

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Speaker 1: any case, Britain has been transitioning away from Europe for

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Speaker 1: the last quarter century because Europe is a low growing

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Speaker 1: region and registrate with the rest of the world has

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Speaker 1: been increasing. Mike I would point out that none of

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Speaker 1: the Olivia Blanchard downplay the effects of Brexit is well,

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Speaker 1: do you have have you done a calculation, Professor Mody,

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Speaker 1: of what Bromain or Brexit would do to England. So

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Speaker 1: I think you know, we are at a point to

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Speaker 1: where the numbers are relatively small, and at that point

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Speaker 1: the uncertainty around whether it is half a percent here

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Speaker 1: or half a percent there. You know, no economists should

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Speaker 1: claim to know that. So the point is that because

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Speaker 1: the UK tragedy or e C d I m F

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Speaker 1: has have come up with numbers that say there will

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Speaker 1: be a six to ten percent permanent loss. That's the

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Speaker 1: objection that those numbers simply not pass most a smell test,

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Speaker 1: and whether it is a one percent loss or half

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Speaker 1: a percent gain, nobody really can tell. And it's within

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Speaker 1: the forecasting error. You know, if I forecast next year's

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Speaker 1: g DT, that's the kind of terror I would get

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Speaker 1: in any case. And so I think brexactly in that

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Speaker 1: margin of error. If if that's the case though, Uh,

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Speaker 1: would you recommend voting against remaining, voting for Brexit, voting

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Speaker 1: against remaining given the unknowns out there and the margin

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Speaker 1: of error. Yes, so I think that's that's exactly the

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Speaker 1: right question to ask. And I think there are two

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Speaker 1: views over here. The one view is, UH, why take

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Speaker 1: the risk? Uh, it's not going to be particularly valuable

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Speaker 1: to stay, but there's some black hole which which we

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Speaker 1: should not get into. But the the other other team

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Speaker 1: over here, and that's something that's driving the campaign is

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Speaker 1: what is the purpose of the European Union in the

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Speaker 1: long run? And I think that's some much larger historical

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Speaker 1: issues have been raised in this uh, in this campaign,

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Speaker 1: which is that the European Union is essentially based on

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Speaker 1: a premise that nation states cannot look after their citizens. Now,

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Speaker 1: how how deep the encroachment of soverignity is is a

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Speaker 1: good datable issue, But in my view, the the notion

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Speaker 1: that a super national state needs to look after you,

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Speaker 1: that's really the big question within this is the backdrop

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Speaker 1: of I guess unemployment rate. I mean, at the end

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Speaker 1: of the day, it comes down to jobs. Do you

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Speaker 1: just assume double digit unemployment is permanent within continental Europe.

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Speaker 1: I think I think Europe uh will probably struggle for

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Speaker 1: a long time with that double digit unemployment. I think

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Speaker 1: Europe's problem is not just the unemployment. More fundamentally, it

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Speaker 1: is that it's not also able to raise productivity growth.

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Speaker 1: So it has both unemployment and is not able to

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Speaker 1: raise productivity growth. And that's that's Europe's long term problem.

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Speaker 1: That's that's almost a century old problem. You know, there

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Speaker 1: are periods in which Europe briefly catches up with the

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Speaker 1: rest of the world and then it falls behind. And

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Speaker 1: I think we're seeing another phase when that is happening.

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Speaker 1: It's happening because Europe is an economy that has not

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Speaker 1: reinvented itself, and it's happening also because they have been

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Speaker 1: terribly bad policies in the last five seven years. Before

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Speaker 1: we let you go just a minute left of the

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Speaker 1: question everybody here hasn't certainly it's been raised by Janet

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Speaker 1: Yell is what impact a vote to leave the European

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Speaker 1: Union would have on the rest of the world. I

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Speaker 1: think there will be a two or three days off uncertainty,

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Speaker 1: and it was pretty much passed by I think it

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Speaker 1: will have a minimal effect on on financial markets and

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Speaker 1: on the global economy, professor, thank you so much. Shoku

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Speaker 1: Moti with Princeton with some essays, particularly independent in the

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Speaker 1: United Kingdom. Uh, trying to find a measured analysis of

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Speaker 1: Bermain or Brexit. Michael McKee and I are trying to

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Speaker 1: stay measured as well. It's easier to do that from

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Speaker 1: New York. Mikelin, Yeah, vote, but we will keep on

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Speaker 1: top of it. Off it's here, I mean, it's it's

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Speaker 1: all of a sudden June. We race forward on the

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Speaker 1: seventh of June towards they, of course the FED meeting

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Speaker 1: in between McKie and I getting is it a dead meeting? Mike?

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Speaker 1: After this v just today does seem to be dead,

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Speaker 1: except that she's got a press conference afterwards. Everybody's gonna

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Speaker 1: want to listen to that. The press conference will be

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Speaker 1: the heart of it. Uh that on June this our

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Speaker 1: surveillance brought to you by Palisade Doughty. Visit Palisade doughty

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Speaker 1: dot com is John Tucker with news headlines. Oh. Democratic

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Speaker 1: presidential candidate Vernie Sanders says, after today's primaries, Hill head

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Speaker 1: back home to Vermont to assess where we are over

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Speaker 1: the weekend. Sanders talked over the phone with President Obama,

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Speaker 1: who could soon endorse Hillary Clinton. No celebration, just yeah,

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Speaker 1: it says the Hillary Clinton campaign. Despite an ap calculation

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Speaker 1: that Clinton has enough delegates to become the Democratic presidential nominee,

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Speaker 1: the campaign says right now it wants to focus on

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Speaker 1: today's primaries in California, New Jersey, New Mexico, and three

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Speaker 1: other states. Syrian president Bashar Assad is willing to is

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Speaker 1: vowing to liberate every inch of the country in the

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Speaker 1: same in ways troops recaptured the historic town of Pulmira

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Speaker 1: from Islamic State Group. As un told the newly elected

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Speaker 1: parliament today, the situation on the ground there is much

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Speaker 1: better than it was months ago. And we have Global

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Speaker 1: news twenty four hours a day, powered by our twenty

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Speaker 1: four hundred journalists in more than one fifty news bureaus

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Speaker 1: around the world. I'm John Tucker, Tom I think so much.

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Speaker 1: The tenure yield in Germany all of a sudden down

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Speaker 1: two solid basis points to three digits positive point zero

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Speaker 1: six three. Mike teppairs, careful watching that's really getting down

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Speaker 1: way under monthly or weekly closes over. You know, we're

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Speaker 1: getting really near that red sticky which says record lows

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Speaker 1: in the German tenure. Not there, Yeah, the U. S

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Speaker 1: tenure one point seven one on the watch on the

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Speaker 1: German tenure. That's what we do here. This is Bloomberg's surveillance.

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