1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Dailey. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,120 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg with 5 00:00:27,240 --> 00:00:30,520 Speaker 1: the son Michael Clody with ubs out of US rates strategies. 6 00:00:30,720 --> 00:00:33,360 Speaker 1: Let's start with that idea, Michael Clorty, who has their 7 00:00:33,360 --> 00:00:37,879 Speaker 1: foot on the two year yield? Well, the Fed does, um, 8 00:00:37,880 --> 00:00:40,760 Speaker 1: so you know with their guidance um, you know they're 9 00:00:41,440 --> 00:00:43,360 Speaker 1: they're sort of suggestion that they're gonna keep race low 10 00:00:43,400 --> 00:00:46,280 Speaker 1: for a long time. Uh, they all continue to hold 11 00:00:46,479 --> 00:00:48,320 Speaker 1: this front end down. I think when you look at 12 00:00:48,320 --> 00:00:49,920 Speaker 1: the bottom market, you want to look at the Fed's 13 00:00:50,400 --> 00:00:52,960 Speaker 1: actions in in two different parts of the curve. So 14 00:00:53,000 --> 00:00:54,960 Speaker 1: the front of the curve is all about what they're 15 00:00:54,960 --> 00:00:57,040 Speaker 1: gonna tell us they're gonna do with the policy rate. 16 00:00:57,440 --> 00:00:59,960 Speaker 1: The back of the curve is sort of chewy driven. 17 00:01:00,520 --> 00:01:03,360 Speaker 1: But the Treasury is issuing a lot more at the 18 00:01:03,400 --> 00:01:05,720 Speaker 1: back of the curve than the FEDS buying. So let's 19 00:01:05,760 --> 00:01:08,480 Speaker 1: talk about the issuance here. Issuance is a flood of 20 00:01:08,560 --> 00:01:11,800 Speaker 1: paper onto the market, and to be clear, that means 21 00:01:11,920 --> 00:01:15,320 Speaker 1: yield up priced down. How much of that movement would 22 00:01:15,360 --> 00:01:18,840 Speaker 1: you calculate? So what's been surprising is how well we've 23 00:01:18,880 --> 00:01:21,840 Speaker 1: been able to handle the supply so far. That said, 24 00:01:21,880 --> 00:01:25,720 Speaker 1: it's it's just relentless. So if we look again, only 25 00:01:25,760 --> 00:01:29,960 Speaker 1: focusing on the long end front end supply, during Operation Twists, 26 00:01:30,040 --> 00:01:33,720 Speaker 1: the FEDS sold six thirty billion dollars of three year 27 00:01:33,720 --> 00:01:36,200 Speaker 1: and shorter treasuries and it barely moved yields at all. 28 00:01:36,640 --> 00:01:40,039 Speaker 1: So long end is where the supply matters. Seven year 29 00:01:40,080 --> 00:01:44,600 Speaker 1: and longer auctions between March and October is going to 30 00:01:44,680 --> 00:01:47,919 Speaker 1: be up eight fo So even though the Feds buying 31 00:01:48,360 --> 00:01:51,920 Speaker 1: it's peanuts relative to what the Treasury is issuing out there. Um, 32 00:01:52,040 --> 00:01:54,000 Speaker 1: you know, we think we're just gonna see this steady 33 00:01:54,320 --> 00:01:57,760 Speaker 1: weight of supply dragging yields a bit higher. Michael, Not 34 00:01:57,840 --> 00:02:01,360 Speaker 1: a trick question, a genuine cure us from me. What's 35 00:02:01,400 --> 00:02:05,200 Speaker 1: the history of supply mattering in the treasury market? So 36 00:02:05,400 --> 00:02:08,799 Speaker 1: generally it matters that extremes. So it mattered a lot 37 00:02:09,000 --> 00:02:11,440 Speaker 1: when the US ran a surplus for four years UM 38 00:02:11,600 --> 00:02:15,200 Speaker 1: back around the turn of the sentry UM. So back 39 00:02:15,240 --> 00:02:19,639 Speaker 1: then we saw two S tens invert fifty basis points 40 00:02:19,840 --> 00:02:22,440 Speaker 1: two S tens swaps stayed positive that whole time. So 41 00:02:22,480 --> 00:02:27,000 Speaker 1: you had this incredible richness of long treasuries back then. Um, 42 00:02:27,040 --> 00:02:29,920 Speaker 1: you know it, it mattered a little bit coming out 43 00:02:29,960 --> 00:02:33,080 Speaker 1: of the last crisis when we saw you know, a 44 00:02:33,080 --> 00:02:37,000 Speaker 1: lot the Treasury initially issued lots of bills to handle 45 00:02:37,600 --> 00:02:39,920 Speaker 1: the jump in supply. As they turned it out, it 46 00:02:39,960 --> 00:02:42,840 Speaker 1: really did offset some of the effects of QUE. And 47 00:02:42,960 --> 00:02:45,760 Speaker 1: that's what we think right here is is the issuance 48 00:02:45,840 --> 00:02:49,480 Speaker 1: matters more than QUE right now. Um, you know, the 49 00:02:49,520 --> 00:02:53,520 Speaker 1: Fed would have to upsize enormously to offset this supply. Well, 50 00:02:53,560 --> 00:02:55,840 Speaker 1: let me throw this in there, Micaul. What matters ultimately 51 00:02:55,880 --> 00:02:59,160 Speaker 1: more the outlook for inflation or the outlook for supply 52 00:02:59,240 --> 00:03:02,040 Speaker 1: the long end, right, So, so the I guess within 53 00:03:02,480 --> 00:03:07,480 Speaker 1: this inflation will set a fundamental level for bond yields. Supply, 54 00:03:07,880 --> 00:03:11,720 Speaker 1: can you know, create some significant swings within that. Um, 55 00:03:11,800 --> 00:03:14,360 Speaker 1: so we think we're so low right now, there's just 56 00:03:14,400 --> 00:03:16,840 Speaker 1: not much upside. I mean, we we've seen a lot. 57 00:03:17,080 --> 00:03:20,280 Speaker 1: We saw equities move pretty substantially in the last month 58 00:03:20,800 --> 00:03:23,720 Speaker 1: tenure and yields stayed in the six basis point range 59 00:03:23,760 --> 00:03:26,560 Speaker 1: the whole month, So you know, you're just not seeing 60 00:03:26,720 --> 00:03:30,080 Speaker 1: much of a hedge benefit from treasuries at these levels. 61 00:03:30,720 --> 00:03:34,120 Speaker 1: That means there's less fundamental value in treasuries. Treasury is 62 00:03:34,160 --> 00:03:37,200 Speaker 1: underperform corporates the vast majority of the time. The only 63 00:03:37,200 --> 00:03:40,120 Speaker 1: reason you own a treasury is because when the outperform 64 00:03:40,200 --> 00:03:43,880 Speaker 1: corporates is when the equity market gets hurt. When you 65 00:03:43,920 --> 00:03:48,320 Speaker 1: lose some of that hedge value, that diversification value, uh, 66 00:03:48,560 --> 00:03:52,360 Speaker 1: treasury is fundamentally worthless. This is such an important point, 67 00:03:52,400 --> 00:03:53,960 Speaker 1: and it's one that a lot of people are highlighting 68 00:03:54,000 --> 00:03:56,920 Speaker 1: this morning, saying that treasuries can no longer be a 69 00:03:56,920 --> 00:03:58,760 Speaker 1: hedge right, they never could, no longer can be a 70 00:03:58,800 --> 00:04:01,680 Speaker 1: ballast to your sixty forty portfolio. Do you think that 71 00:04:01,760 --> 00:04:04,800 Speaker 1: it is too soon to ring the death tool for 72 00:04:05,520 --> 00:04:08,000 Speaker 1: bond's acting as this ballast or or do you think 73 00:04:08,000 --> 00:04:11,160 Speaker 1: that this is an accurate characterization. I think these ear 74 00:04:11,280 --> 00:04:13,320 Speaker 1: levels is accurate. You know, we back up a little 75 00:04:13,320 --> 00:04:16,159 Speaker 1: bit in yields and I think it will the behavior 76 00:04:16,200 --> 00:04:20,560 Speaker 1: will come back. But you know, with with the US 77 00:04:20,720 --> 00:04:23,359 Speaker 1: rates pended zero on the front end, you know, the 78 00:04:23,400 --> 00:04:25,880 Speaker 1: Fed is repeatedly said they're not going to go through zero. 79 00:04:26,000 --> 00:04:29,279 Speaker 1: If they do go through zero, it threatens disruptions in 80 00:04:29,320 --> 00:04:32,599 Speaker 1: the repo market. Um, when the Uncle Sam has twenty 81 00:04:32,680 --> 00:04:35,600 Speaker 1: trillion dollars of debt to roll over, the last thing 82 00:04:35,640 --> 00:04:38,120 Speaker 1: you want to do is interfere with the funding of 83 00:04:38,160 --> 00:04:41,640 Speaker 1: those treasuries. So you know, at these ear levels, I 84 00:04:41,640 --> 00:04:44,920 Speaker 1: don't think there's much benefit if we cheapen a little bit. 85 00:04:45,240 --> 00:04:47,680 Speaker 1: I do think it comes back, all right. Uh so 86 00:04:47,720 --> 00:04:49,440 Speaker 1: can you give us a sense of where you start 87 00:04:49,520 --> 00:04:51,440 Speaker 1: seeing value again? Just to give you a perspective. The 88 00:04:51,440 --> 00:04:54,080 Speaker 1: thirty year treasure yield right now the highest since June 89 00:04:54,279 --> 00:04:58,000 Speaker 1: at one point of five. Yeah, I think we we 90 00:04:58,040 --> 00:05:00,520 Speaker 1: need to sort of back up another twenty bit before 91 00:05:01,480 --> 00:05:04,320 Speaker 1: uh you get a little more interested, and then before 92 00:05:04,320 --> 00:05:06,440 Speaker 1: we get some of that hedge value back in the 93 00:05:06,480 --> 00:05:10,840 Speaker 1: equation with pointing out Tom here today long treasuries t 94 00:05:11,080 --> 00:05:15,120 Speaker 1: l T, the E t F. I think the key 95 00:05:15,160 --> 00:05:17,440 Speaker 1: clause in what Michael is pushing right now is just 96 00:05:17,480 --> 00:05:21,000 Speaker 1: the idea that at these levels they don't present the 97 00:05:21,040 --> 00:05:23,960 Speaker 1: same opportunity they did this year. And let's think about 98 00:05:24,000 --> 00:05:26,880 Speaker 1: how many people came on the program last year saying 99 00:05:26,880 --> 00:05:29,800 Speaker 1: that the next test for treasuries the budget deficit, all 100 00:05:29,800 --> 00:05:33,040 Speaker 1: those bad things, and what happened to treasuries when things 101 00:05:33,080 --> 00:05:36,880 Speaker 1: hit the fan? They rallied and they rallied aggressive. I mean, 102 00:05:36,960 --> 00:05:40,080 Speaker 1: this is really important, Michael, Clarity very quickly here. I 103 00:05:40,200 --> 00:05:43,520 Speaker 1: just think it's so important. The great measurement of a 104 00:05:43,560 --> 00:05:47,360 Speaker 1: bond bear market is when your clients gets three months 105 00:05:47,360 --> 00:05:49,839 Speaker 1: in a row statements of their for sure, like a 106 00:05:49,960 --> 00:05:54,839 Speaker 1: rock bond portfolio going down in price, where's that equivalent 107 00:05:54,920 --> 00:05:57,360 Speaker 1: ten year yield? Now, I mean on a full faith 108 00:05:57,440 --> 00:06:01,520 Speaker 1: and credit tenure, where does the pain really click? And well, 109 00:06:01,520 --> 00:06:03,920 Speaker 1: again that's that's one of the issues is at these 110 00:06:04,000 --> 00:06:07,719 Speaker 1: year levels, I'm not seeing much income, um. So you know, 111 00:06:07,839 --> 00:06:10,240 Speaker 1: normally you could have prices fall a little bit, but 112 00:06:10,279 --> 00:06:13,719 Speaker 1: it gets offset by the income. Getting these year levels. 113 00:06:14,040 --> 00:06:17,680 Speaker 1: My income is so small um that you know, again 114 00:06:17,680 --> 00:06:21,880 Speaker 1: it all depends on distribution. But we get up. We 115 00:06:21,880 --> 00:06:25,440 Speaker 1: we sort of sell off five basis points a month 116 00:06:25,480 --> 00:06:30,239 Speaker 1: and more than gets you there into negative territor. Michael, 117 00:06:30,240 --> 00:06:32,480 Speaker 1: would you still call the US the high yolda compared 118 00:06:32,520 --> 00:06:35,039 Speaker 1: to what's playing out in Europe at the moment? Given 119 00:06:35,080 --> 00:06:37,440 Speaker 1: what we on a ten year in Germany negative fifty 120 00:06:37,440 --> 00:06:41,320 Speaker 1: four basis points for a foreign investor right now from 121 00:06:41,320 --> 00:06:43,720 Speaker 1: an international perspective look into the United States, just how 122 00:06:43,760 --> 00:06:49,359 Speaker 1: attractive our things that actually there's still some value there. Um. 123 00:06:49,400 --> 00:06:51,880 Speaker 1: You know, what we've seen is some of the the 124 00:06:52,760 --> 00:06:57,320 Speaker 1: FX hedging costs have actually come down, um recently. There 125 00:06:57,320 --> 00:06:59,640 Speaker 1: seems to be a lot of street balance sheet out 126 00:06:59,640 --> 00:07:03,120 Speaker 1: there right now that's reduced those costs. So there is 127 00:07:03,160 --> 00:07:05,520 Speaker 1: a little bit of value for some of those foreign investors. 128 00:07:06,000 --> 00:07:08,400 Speaker 1: But you know, again not exactly to jump up and 129 00:07:08,440 --> 00:07:11,280 Speaker 1: down sort of price. Michael clad to catch up, sir, 130 00:07:11,360 --> 00:07:13,840 Speaker 1: Thank you, Michael Clotty. There of ubs on this right. 131 00:07:13,880 --> 00:07:21,480 Speaker 1: Smart David Riley gets started with the asset management. We're 132 00:07:21,480 --> 00:07:24,080 Speaker 1: thrilled you could join us today, David. First, chart I 133 00:07:24,120 --> 00:07:27,160 Speaker 1: looked at today where those five year out, five year 134 00:07:27,280 --> 00:07:31,160 Speaker 1: forward break evens so different for the United States with 135 00:07:31,240 --> 00:07:35,080 Speaker 1: a whiff of inflation versus the disinflation of Europe. What 136 00:07:35,120 --> 00:07:37,600 Speaker 1: does that signal? Well, I think that signal is that 137 00:07:38,520 --> 00:07:41,880 Speaker 1: Europe is in a very difficult situation in terms of 138 00:07:41,920 --> 00:07:46,360 Speaker 1: the extent of the bitch inflationary deflationary forces. I mean, 139 00:07:46,360 --> 00:07:50,880 Speaker 1: we've had a record loot um inflation prints recently, and 140 00:07:51,560 --> 00:07:54,920 Speaker 1: I think that's going to prompt THECP too UM and 141 00:07:55,040 --> 00:07:58,120 Speaker 1: spent more policy action, but probably not until the end 142 00:07:58,160 --> 00:08:02,200 Speaker 1: of the year or um early next year. Well, I 143 00:08:02,240 --> 00:08:05,760 Speaker 1: think in the US, you know, there is still a 144 00:08:05,840 --> 00:08:08,280 Speaker 1: challenge on the inflation from but I think there's more 145 00:08:09,120 --> 00:08:13,000 Speaker 1: upside potential, particularly if we do get a substantive physical 146 00:08:13,080 --> 00:08:16,800 Speaker 1: stimulus after the U S elections. Given that, David, do 147 00:08:16,840 --> 00:08:19,040 Speaker 1: you think that the euro, the rally that we've seen 148 00:08:19,360 --> 00:08:23,280 Speaker 1: versus the dollar is overdone? Well, I think if we 149 00:08:23,480 --> 00:08:28,040 Speaker 1: get a situation where um, you know you were discussing before, 150 00:08:28,160 --> 00:08:32,600 Speaker 1: let's you know, a Democrat clean suite, then I think 151 00:08:32,640 --> 00:08:37,760 Speaker 1: market expectations will be for a very significant um US 152 00:08:37,840 --> 00:08:42,480 Speaker 1: physical stimulus sometime in the early one I think it's 153 00:08:42,520 --> 00:08:46,840 Speaker 1: going to be associated, at least initially with a weaker dollar. Um, 154 00:08:46,960 --> 00:08:49,440 Speaker 1: I think you're rightly does that play out with a 155 00:08:49,520 --> 00:08:54,000 Speaker 1: stronger euro. I actually think it will benefit the sort 156 00:08:54,000 --> 00:08:57,320 Speaker 1: of laggered of this recent dollar weakness which has been 157 00:08:57,440 --> 00:09:01,720 Speaker 1: emerging market currencies. I think a sort of Biden and 158 00:09:01,840 --> 00:09:06,360 Speaker 1: Democratic clean sweep is unambiguously positive for emerging market assets, 159 00:09:06,360 --> 00:09:10,560 Speaker 1: including currency. So that's where I'd rather play. Where I 160 00:09:10,600 --> 00:09:13,880 Speaker 1: think we're going to see some future dollar weakness. Is 161 00:09:13,880 --> 00:09:17,120 Speaker 1: that just a trade policy trade David? What is that? Yeah? 162 00:09:17,160 --> 00:09:20,880 Speaker 1: I mean I do think that there is a sort 163 00:09:20,880 --> 00:09:29,280 Speaker 1: of trade policy premium uncertainty associated with a Trump administration, 164 00:09:29,920 --> 00:09:35,199 Speaker 1: and that extends not just too obviously relationships with China, 165 00:09:35,320 --> 00:09:38,000 Speaker 1: but also the way that tariff policy is being used 166 00:09:38,040 --> 00:09:43,000 Speaker 1: with a number of trading partners, including allies of UM 167 00:09:43,120 --> 00:09:45,000 Speaker 1: the US as well. So I think if you take 168 00:09:45,080 --> 00:09:49,200 Speaker 1: that out that other things being called, that implies a 169 00:09:49,440 --> 00:09:52,439 Speaker 1: weaker dollar, and I think a big US past stimulus 170 00:09:52,480 --> 00:09:55,320 Speaker 1: package would also be then a sort of signal for 171 00:09:55,360 --> 00:09:58,920 Speaker 1: the market to sort of more aggressively would decisively go 172 00:09:59,000 --> 00:10:01,960 Speaker 1: into a rotation trade and a kind of global reflation trade. 173 00:10:02,000 --> 00:10:04,800 Speaker 1: I think you get a steeper treasury curve. But as 174 00:10:04,880 --> 00:10:06,720 Speaker 1: part of that as well, I think he gets some 175 00:10:06,880 --> 00:10:10,400 Speaker 1: rotation from dare I say, from growth to value, but 176 00:10:10,480 --> 00:10:13,680 Speaker 1: also into I think some of those assets like emerging 177 00:10:13,760 --> 00:10:17,480 Speaker 1: markets that do better in a sort of global reflation world. 178 00:10:18,040 --> 00:10:21,000 Speaker 1: Dare I say, you said it, David, So let's discuss it. 179 00:10:21,080 --> 00:10:25,480 Speaker 1: This rotation, the elusive rotation, this idea that banks can 180 00:10:25,520 --> 00:10:27,800 Speaker 1: start doing wow, that curves can start stepening. I mean, 181 00:10:27,800 --> 00:10:30,679 Speaker 1: that's the European trade that's the long right there, That's 182 00:10:30,720 --> 00:10:33,720 Speaker 1: the trade everyone wants to see work and just hasn't 183 00:10:34,040 --> 00:10:36,360 Speaker 1: for so long. David, If it work in the United States, 184 00:10:36,360 --> 00:10:40,080 Speaker 1: can it work in Europe? Um? Well? Yeah, I mean 185 00:10:40,120 --> 00:10:42,560 Speaker 1: I think it can help. I think if we see 186 00:10:42,600 --> 00:10:44,960 Speaker 1: that kind of move in in the US and steeper curves, 187 00:10:45,000 --> 00:10:48,280 Speaker 1: then to some extent, that would sort of show the 188 00:10:48,360 --> 00:10:51,720 Speaker 1: way for European policymakers. I mean, we have seen a 189 00:10:51,800 --> 00:10:56,000 Speaker 1: better and more coherent policy response from European policymakers, particularly 190 00:10:56,000 --> 00:10:59,080 Speaker 1: on the fiscal side, in this crisis, um, than we've 191 00:10:59,080 --> 00:11:03,559 Speaker 1: seen in previous crisis. But I do think that a 192 00:11:03,760 --> 00:11:06,880 Speaker 1: part of you know, in order to get that take 193 00:11:06,920 --> 00:11:10,280 Speaker 1: how that kind of Japanization story for for for Europe, 194 00:11:10,559 --> 00:11:14,440 Speaker 1: We're going to need continued fiscal policy support, and I 195 00:11:14,480 --> 00:11:16,760 Speaker 1: think the ECB is going to have to accommodate that 196 00:11:16,800 --> 00:11:20,640 Speaker 1: by extending its asset purchases, but eventually saying we're going 197 00:11:20,640 --> 00:11:25,640 Speaker 1: to backstop government borrowing and don't worry about how much 198 00:11:25,679 --> 00:11:28,320 Speaker 1: debt there is right now, keep on borrowing, keep on 199 00:11:28,360 --> 00:11:31,280 Speaker 1: supporting the recovery. And I think if we get that 200 00:11:31,360 --> 00:11:33,439 Speaker 1: as a story not only in the US but also 201 00:11:33,679 --> 00:11:37,120 Speaker 1: in Europe, then I think we will seem stupid curves, 202 00:11:37,160 --> 00:11:40,120 Speaker 1: and I think it will be beneficial for the cyclicals 203 00:11:40,600 --> 00:11:44,320 Speaker 1: and value like financials. David, what's your hedge? What's your 204 00:11:44,320 --> 00:11:48,000 Speaker 1: go to asset to counteract if you're wrong about this 205 00:11:48,040 --> 00:11:53,920 Speaker 1: reflation trade? Yeah, I mean it's it's actually um you know, 206 00:11:54,120 --> 00:11:57,920 Speaker 1: not an easy thing to do to find hedges for 207 00:11:58,559 --> 00:12:01,920 Speaker 1: portfolios right now, bigause. I think the way that fixed 208 00:12:01,960 --> 00:12:05,959 Speaker 1: income has behaved core government bonds, you know, during September, 209 00:12:06,000 --> 00:12:08,959 Speaker 1: shows that it has become very asymmetric. I think it's 210 00:12:09,000 --> 00:12:11,440 Speaker 1: hard for those shields to go much lower. And I 211 00:12:11,480 --> 00:12:14,920 Speaker 1: think if we do get some positive news incremental policy news, 212 00:12:14,920 --> 00:12:17,200 Speaker 1: particularly on the fiscal side, but but also in terms 213 00:12:17,200 --> 00:12:20,880 Speaker 1: for example a vaccine before year end, then then I 214 00:12:20,920 --> 00:12:23,400 Speaker 1: think those shields sort of moved higher. How do you 215 00:12:23,400 --> 00:12:25,600 Speaker 1: try to sort of mitigate that risk a little bit? 216 00:12:25,640 --> 00:12:27,200 Speaker 1: I mean, we've reduced some of the risk within our 217 00:12:27,240 --> 00:12:30,080 Speaker 1: portfolio has given the level of uncertainty at the moment, 218 00:12:30,400 --> 00:12:33,439 Speaker 1: but also you stick with your biased to sort of 219 00:12:33,520 --> 00:12:38,320 Speaker 1: up in quality to sectors like utilities, um in high 220 00:12:38,400 --> 00:12:41,120 Speaker 1: grade credit, de Haven greater catch up. As always get 221 00:12:41,120 --> 00:12:43,520 Speaker 1: to see a Sir David running their fluid asset manage 222 00:12:43,520 --> 00:12:49,079 Speaker 1: around the latest in Europe. We're not Julie Norman with 223 00:12:49,240 --> 00:12:52,920 Speaker 1: us with UCL Professor of Political Science. And what's fascinating 224 00:12:53,280 --> 00:12:56,439 Speaker 1: about her is her study and her expertise and academics 225 00:12:56,480 --> 00:13:00,959 Speaker 1: for conflict. Her focuses on arab Is really uh conflicts 226 00:13:01,000 --> 00:13:04,080 Speaker 1: and particularly a focus around the Palestinians, But far more 227 00:13:04,640 --> 00:13:08,640 Speaker 1: it is just simply about the politics of our conflict. Julie. 228 00:13:08,679 --> 00:13:10,800 Speaker 1: I don't mean to make light of it, but you 229 00:13:10,880 --> 00:13:13,800 Speaker 1: could take your conflict over the culture wars of the 230 00:13:13,920 --> 00:13:17,400 Speaker 1: United States of America. How will they play out in 231 00:13:17,480 --> 00:13:20,880 Speaker 1: the next twenty nine days. Well, Tom, that's certainly what 232 00:13:20,960 --> 00:13:22,880 Speaker 1: we're all going to be looking at. This has obviously 233 00:13:23,000 --> 00:13:27,400 Speaker 1: been such a polarized gear, a very polarized election, and 234 00:13:27,960 --> 00:13:31,560 Speaker 1: with the events of the recent days, with Trump's diagnosis, 235 00:13:32,000 --> 00:13:34,760 Speaker 1: with the response to that, it's looking like the end 236 00:13:34,800 --> 00:13:37,319 Speaker 1: of the campaign is going to look even more different 237 00:13:37,360 --> 00:13:39,839 Speaker 1: than we had thought before. We all chained up in 238 00:13:40,000 --> 00:13:42,920 Speaker 1: both Dividing campaign and the Trump campaign and how they 239 00:13:43,000 --> 00:13:45,720 Speaker 1: move forward in its crucial time leading up to election 240 00:13:45,800 --> 00:13:48,200 Speaker 1: day in November. I mean, you lead up to election 241 00:13:48,280 --> 00:13:50,640 Speaker 1: day in November, all the focus on the president tweeting 242 00:13:50,679 --> 00:13:54,520 Speaker 1: out massively single line all cap tweets. He just put 243 00:13:54,559 --> 00:13:56,440 Speaker 1: out moments ago one that looked like it was pre 244 00:13:56,600 --> 00:13:59,920 Speaker 1: programmed an election tweet as well. What should we look 245 00:14:00,040 --> 00:14:03,880 Speaker 1: for from the other guy from Vice President Biden? Well, 246 00:14:04,120 --> 00:14:06,920 Speaker 1: Biden really needs to keep up his own momentum for 247 00:14:07,320 --> 00:14:11,800 Speaker 1: these crucial weeks. He has already decided to suspend negative 248 00:14:11,840 --> 00:14:15,480 Speaker 1: ads while Trump is is sick and has counseled a 249 00:14:15,559 --> 00:14:18,360 Speaker 1: few events, but for the most part is moving ahead 250 00:14:18,760 --> 00:14:21,800 Speaker 1: with his plans of planned events on starting and sported 251 00:14:21,880 --> 00:14:25,480 Speaker 1: this week. So it's really crucial that Biden keeps that going. 252 00:14:25,800 --> 00:14:27,800 Speaker 1: He needs to make sure that he gets out the 253 00:14:27,880 --> 00:14:30,520 Speaker 1: vote and keeps that enthusiasm going as it gets closer 254 00:14:30,600 --> 00:14:33,320 Speaker 1: to November, and doesn't play it to safe even though 255 00:14:33,360 --> 00:14:35,720 Speaker 1: he's the head in the polls. Julia, at what point 256 00:14:35,800 --> 00:14:38,480 Speaker 1: do some of these Senate Republicans look at these polls 257 00:14:38,880 --> 00:14:41,840 Speaker 1: and start to break away and go solo. Well, you know, 258 00:14:42,000 --> 00:14:44,680 Speaker 1: that's something that we've been wondering really from the start 259 00:14:44,880 --> 00:14:50,440 Speaker 1: of Trump's ascendency, and so far most Republican senators have 260 00:14:50,800 --> 00:14:53,720 Speaker 1: stayed aligned with Trump, of course, with a few pretty 261 00:14:53,800 --> 00:14:57,760 Speaker 1: notable exceptions, But I think for Senate Republicans right now, 262 00:14:58,120 --> 00:15:01,960 Speaker 1: especially with the Amy Coney rate nomination trying to push 263 00:15:02,000 --> 00:15:06,080 Speaker 1: through the Senate, there's a sense of commitment to conservative values, 264 00:15:06,200 --> 00:15:09,240 Speaker 1: conservative policies, and really trying to look more at the 265 00:15:09,400 --> 00:15:13,600 Speaker 1: long game of staying committed to those aims rather than 266 00:15:13,840 --> 00:15:17,120 Speaker 1: necessarily making a break from Trump and saying keeping a 267 00:15:17,760 --> 00:15:21,320 Speaker 1: kind of a standard strong front with the Republican Party 268 00:15:21,560 --> 00:15:24,080 Speaker 1: with the conservative values seems to be the best way 269 00:15:24,160 --> 00:15:26,960 Speaker 1: forward for most of those Senators right now. Judy, just 270 00:15:27,040 --> 00:15:29,760 Speaker 1: on process, just quickly, how difficult is it to get 271 00:15:29,800 --> 00:15:32,800 Speaker 1: the Senate operational now, given that some Senate Republicans have 272 00:15:32,840 --> 00:15:36,040 Speaker 1: actually been exposed to COVID nineteen. Can you walk us 273 00:15:36,040 --> 00:15:37,680 Speaker 1: through the process just briefly for the next couple of 274 00:15:37,680 --> 00:15:40,560 Speaker 1: weeks what that might look like down in Washington. Sure. So, 275 00:15:40,920 --> 00:15:44,360 Speaker 1: we've heard from Mitch McConnell's that most Senate activity will 276 00:15:44,360 --> 00:15:47,440 Speaker 1: be suspended this week and not start again until on 277 00:15:47,600 --> 00:15:51,280 Speaker 1: the week of October twelfth at least um. But McConnell 278 00:15:51,440 --> 00:15:55,960 Speaker 1: has emphasized that the confirmation process for Anny Tony Barrett 279 00:15:56,040 --> 00:15:59,160 Speaker 1: will move forward in that regards some of the meetings 280 00:15:59,240 --> 00:16:03,240 Speaker 1: and procedures they're currently having people even if they're sick 281 00:16:03,320 --> 00:16:06,480 Speaker 1: or don't feel face coming in can tune in virtually. 282 00:16:07,040 --> 00:16:09,320 Speaker 1: Where that's going to change and change is when there's 283 00:16:09,320 --> 00:16:11,640 Speaker 1: actually a vote for a vote, they will actually need 284 00:16:11,720 --> 00:16:15,040 Speaker 1: senators to come and be physically present, and so that 285 00:16:15,280 --> 00:16:18,000 Speaker 1: is really when it will probably depend on the health 286 00:16:18,080 --> 00:16:21,120 Speaker 1: of those senators who have been infected so far and 287 00:16:21,280 --> 00:16:24,040 Speaker 1: the extent to which the virus has moved between other 288 00:16:24,400 --> 00:16:27,480 Speaker 1: other numbers. By that point, there's so much confusion around 289 00:16:27,480 --> 00:16:30,760 Speaker 1: the virus and how it's hitting Washington and President Trump, 290 00:16:30,840 --> 00:16:34,320 Speaker 1: even with conflicting data, conflicting information from his own doctors 291 00:16:34,440 --> 00:16:38,640 Speaker 1: over the weekend, Julie, from an international relations perspective, given 292 00:16:38,640 --> 00:16:41,040 Speaker 1: the fact that President Trump is on the end, he 293 00:16:41,120 --> 00:16:43,440 Speaker 1: does appear to be. Although there is such a lack 294 00:16:43,480 --> 00:16:46,160 Speaker 1: of consistency and the information. How much does it put 295 00:16:46,200 --> 00:16:48,560 Speaker 1: the US at risk or put the US at a 296 00:16:48,640 --> 00:16:53,760 Speaker 1: more vulnerable position when it comes to dealing with other countries. Well, 297 00:16:53,920 --> 00:16:56,560 Speaker 1: you know, we we have seen some reports, even as 298 00:16:56,840 --> 00:16:59,800 Speaker 1: recently is today, that this is a rather vulnerable loan 299 00:17:00,160 --> 00:17:05,120 Speaker 1: for the United States. Having the president hospitalized, so, as 300 00:17:05,200 --> 00:17:07,880 Speaker 1: you noted, does seem to be recovering, and hopefully we'll 301 00:17:08,080 --> 00:17:10,800 Speaker 1: confer within the next few days, but hopefully you have 302 00:17:10,880 --> 00:17:14,120 Speaker 1: a president who is um who is hospitalized. You also 303 00:17:14,240 --> 00:17:17,119 Speaker 1: have a number of other members from the highest levels 304 00:17:17,160 --> 00:17:20,840 Speaker 1: of government who are sick or potential for being thick. 305 00:17:21,080 --> 00:17:24,200 Speaker 1: And also just the country really quite distracted at this 306 00:17:24,400 --> 00:17:27,000 Speaker 1: moment um. You know, from the security point of view, 307 00:17:27,440 --> 00:17:31,080 Speaker 1: the United States is uh, you know, relatively vulnerable. But 308 00:17:31,119 --> 00:17:35,360 Speaker 1: I say that relatively uh strongly the US. Everything else 309 00:17:35,400 --> 00:17:38,359 Speaker 1: that we have is in place. There are so many 310 00:17:38,680 --> 00:17:41,520 Speaker 1: agencies and people beyond the President and beyond the White 311 00:17:41,600 --> 00:17:44,680 Speaker 1: House that are really gage much more of our international 312 00:17:44,760 --> 00:17:48,199 Speaker 1: relations that this is not a time to be afraid, 313 00:17:48,280 --> 00:17:50,159 Speaker 1: so to speak, but just to be mindful that it 314 00:17:50,320 --> 00:17:54,240 Speaker 1: is a rather unprecedented situation. Late start to the year 315 00:17:54,440 --> 00:17:56,560 Speaker 1: for universities here in the United Kingdom if you're not 316 00:17:56,600 --> 00:17:59,160 Speaker 1: familiar with the education system, and I believe first day 317 00:17:59,600 --> 00:18:02,399 Speaker 1: of the term today over us. Good luck jo He 318 00:18:02,440 --> 00:18:05,440 Speaker 1: tries to catch up Julie Norman, University College, London, Professor 319 00:18:05,800 --> 00:18:12,280 Speaker 1: of Political Science, Brett Ryan with us a Dutsche Banker, 320 00:18:12,359 --> 00:18:15,359 Speaker 1: senior US economist, and he went right to where I 321 00:18:15,560 --> 00:18:19,040 Speaker 1: was in. The unemployment report is a good report, mixed report. 322 00:18:19,200 --> 00:18:22,240 Speaker 1: Markets certainly reacting to it. But Bret Ryan, you went 323 00:18:22,400 --> 00:18:28,000 Speaker 1: to median duration, which really shows two America's discuss what 324 00:18:28,240 --> 00:18:33,400 Speaker 1: you saw in a little bit more difficult media duration statistic. Right, 325 00:18:33,480 --> 00:18:37,800 Speaker 1: So the median duration is basically how many weeks people 326 00:18:37,840 --> 00:18:40,440 Speaker 1: have been unemployed. And so you know, one of the 327 00:18:40,520 --> 00:18:43,480 Speaker 1: things that we've been following is people that say their 328 00:18:43,520 --> 00:18:47,720 Speaker 1: own temporary layoff versus permanent layoff. And the issue with 329 00:18:47,880 --> 00:18:51,480 Speaker 1: that is those it's sort of a distinction without a 330 00:18:51,520 --> 00:18:55,440 Speaker 1: difference when the number of weeks that people are unemployed 331 00:18:55,680 --> 00:18:58,600 Speaker 1: keeps extending. And so right now you're seeing the media 332 00:18:58,680 --> 00:19:02,920 Speaker 1: duration go out to uh, seventeen point six weeks. That's 333 00:19:03,000 --> 00:19:07,840 Speaker 1: the longest um really uh. And so you know, one 334 00:19:07,880 --> 00:19:09,840 Speaker 1: of the issues that we had in the last in 335 00:19:09,920 --> 00:19:13,159 Speaker 1: the week of the financial crisis was long term unemployed 336 00:19:13,600 --> 00:19:15,440 Speaker 1: because the longer you're out of out of a job, 337 00:19:15,680 --> 00:19:17,920 Speaker 1: the more your skills around, and the harder news to 338 00:19:17,960 --> 00:19:19,720 Speaker 1: get back into the end of the labor force. But 339 00:19:19,880 --> 00:19:21,919 Speaker 1: to Peter Hooper, team has absolutely nailed this, I mean 340 00:19:22,000 --> 00:19:24,560 Speaker 1: full disclosure force. Deutsche Bank has its moments where it's 341 00:19:24,640 --> 00:19:27,679 Speaker 1: very optimistic on the direction and you guys rolled over 342 00:19:27,760 --> 00:19:31,320 Speaker 1: here a number of weeks reaffirm right now, your caution 343 00:19:31,560 --> 00:19:35,439 Speaker 1: on the American recovery. Yeah, so, you know, it's been 344 00:19:35,480 --> 00:19:38,280 Speaker 1: a faster it's been a certainly surprisingly fast start out 345 00:19:38,320 --> 00:19:40,880 Speaker 1: of the gates. There's no question about that. We've recovered 346 00:19:40,920 --> 00:19:44,200 Speaker 1: half of the jobs lost between February and April. The 347 00:19:44,320 --> 00:19:48,760 Speaker 1: problem is looking forward, and every member of the Federal 348 00:19:48,800 --> 00:19:53,159 Speaker 1: Reserve has basically said, we need more fiscal support. Without that, 349 00:19:53,720 --> 00:19:57,080 Speaker 1: without f PUC benefits, which have now been used up, 350 00:19:57,640 --> 00:20:00,320 Speaker 1: the seam of money is now gone. That's three billion 351 00:20:00,359 --> 00:20:03,680 Speaker 1: in income that's going to be lost between Q three 352 00:20:03,720 --> 00:20:06,960 Speaker 1: and Q four. That's gonna come during the holiday spending season, 353 00:20:07,320 --> 00:20:10,240 Speaker 1: and it's going to come upon those with the least 354 00:20:10,280 --> 00:20:13,600 Speaker 1: amount of savings and the highest marginal propensity to consume. 355 00:20:14,160 --> 00:20:17,000 Speaker 1: So that's why, you know, while we've had a faster start, 356 00:20:17,680 --> 00:20:21,000 Speaker 1: looking forward, it only gets more difficult for here. And 357 00:20:21,080 --> 00:20:23,840 Speaker 1: there's a real risk that consumer spending could be negative 358 00:20:24,280 --> 00:20:26,360 Speaker 1: in Q four and that's one of the reasons why 359 00:20:26,359 --> 00:20:29,680 Speaker 1: we're more cautious. Right there's a narrative that's becoming increasingly 360 00:20:29,800 --> 00:20:32,280 Speaker 1: popular that even if we don't get fiscal support from 361 00:20:32,359 --> 00:20:35,440 Speaker 1: Washington before the election, we'll get it at some point, 362 00:20:35,560 --> 00:20:38,040 Speaker 1: and it doesn't really matter when it will help support 363 00:20:38,080 --> 00:20:40,560 Speaker 1: the economic recovery on the other side. And then you 364 00:20:40,640 --> 00:20:43,200 Speaker 1: have other people say, well, if you get bad data, 365 00:20:43,320 --> 00:20:46,640 Speaker 1: if it really shows a market deterioration of the economic situation, 366 00:20:47,040 --> 00:20:49,960 Speaker 1: that changes the dynamic and you have to start counting 367 00:20:50,040 --> 00:20:53,280 Speaker 1: for that in your calculus when you decide whether to invest. 368 00:20:53,520 --> 00:20:56,200 Speaker 1: Have we already crossed that rubicon? Are we already at 369 00:20:56,240 --> 00:20:59,159 Speaker 1: the point where the data is showing a material deterioration 370 00:20:59,280 --> 00:21:01,960 Speaker 1: in the momentum of the economic recovery and people have 371 00:21:02,119 --> 00:21:04,679 Speaker 1: to take count of it? Well, I think number one. 372 00:21:04,720 --> 00:21:06,840 Speaker 1: I mean, tell that to the twenty million people who 373 00:21:06,880 --> 00:21:10,080 Speaker 1: are collecting some from unemployment insurance right now and they're 374 00:21:10,119 --> 00:21:12,720 Speaker 1: seeing their income cut and half. You know, tell that 375 00:21:12,880 --> 00:21:15,439 Speaker 1: to the restaurants that are going into the winter season. 376 00:21:15,920 --> 00:21:18,400 Speaker 1: The p P P loan money has dried up. There's 377 00:21:18,400 --> 00:21:21,360 Speaker 1: a hundred and thirty billions still sitting there. Why why 378 00:21:21,400 --> 00:21:23,560 Speaker 1: not allow them to take out another loan and get 379 00:21:23,600 --> 00:21:27,240 Speaker 1: through the winter. Because these programs were designed to deal 380 00:21:27,359 --> 00:21:30,400 Speaker 1: with a four to six months shutdown, not a year 381 00:21:30,440 --> 00:21:35,320 Speaker 1: shutdown or at least restricting capacity. Uh. And these businesses 382 00:21:35,400 --> 00:21:39,360 Speaker 1: need help now, and airlines as well, they need help now, 383 00:21:39,920 --> 00:21:41,800 Speaker 1: not three months from now, because you're going to have 384 00:21:42,320 --> 00:21:44,639 Speaker 1: you know, businesses that go under in the meantime. So 385 00:21:44,640 --> 00:21:48,080 Speaker 1: I think that's the one the one thing. Um. But yes, 386 00:21:48,520 --> 00:21:51,320 Speaker 1: will there be fisicals debates at some point, yes, but 387 00:21:51,760 --> 00:21:54,040 Speaker 1: it's more important for that You're going to delay the 388 00:21:54,160 --> 00:21:59,000 Speaker 1: recovery by causing hardship over the next three months for 389 00:21:59,440 --> 00:22:02,120 Speaker 1: thousands of businesses restaurants that are going to go under 390 00:22:02,119 --> 00:22:05,240 Speaker 1: if they don't get more PPP money, um, And you're 391 00:22:05,280 --> 00:22:09,679 Speaker 1: gonna it's it's gonna hurt demand, especially during the holiday season, 392 00:22:10,200 --> 00:22:13,560 Speaker 1: and so companies are gonna be less likely or less 393 00:22:13,600 --> 00:22:16,680 Speaker 1: willing at least to hire. And it just sets you 394 00:22:16,760 --> 00:22:20,000 Speaker 1: back unnecessarily. Okay, a lot of policymakers will say, show 395 00:22:20,040 --> 00:22:22,320 Speaker 1: me the numbers, right, how much will it set us back? 396 00:22:22,359 --> 00:22:23,800 Speaker 1: If it sets us back a little bit, but we 397 00:22:23,880 --> 00:22:26,320 Speaker 1: can remove some of the political silly season around us, 398 00:22:26,720 --> 00:22:29,280 Speaker 1: then it's worth it. How much does it set us 399 00:22:29,320 --> 00:22:32,000 Speaker 1: back if we don't get fiscal support before the election, 400 00:22:32,080 --> 00:22:35,040 Speaker 1: it's prolonged for months to come. Well, I think it 401 00:22:35,480 --> 00:22:38,840 Speaker 1: risks the consumer consumer spending recovery, and you could have 402 00:22:38,920 --> 00:22:42,760 Speaker 1: a negative quarter of consumer spending and basically that that's 403 00:22:42,920 --> 00:22:46,400 Speaker 1: fifty chance that you're going to have a negative quarter 404 00:22:46,520 --> 00:22:49,639 Speaker 1: of growth and the economy is not exiting recession, and 405 00:22:49,720 --> 00:22:52,119 Speaker 1: it's hard for the N A b E to you know, 406 00:22:52,760 --> 00:22:56,840 Speaker 1: to um, you know, to declare the end of the recession, 407 00:22:57,480 --> 00:23:00,679 Speaker 1: and it could weigh on jobs. We've already is slowing 408 00:23:00,720 --> 00:23:03,159 Speaker 1: in the pace of job games as we saw the 409 00:23:03,240 --> 00:23:08,440 Speaker 1: last report, as the BLS noted itself, is the unemployment rate, Well, yeah, 410 00:23:08,480 --> 00:23:11,680 Speaker 1: it did tick down. It would have been um forty 411 00:23:11,760 --> 00:23:16,000 Speaker 1: basis points higher if not for misclassification issues. So you're 412 00:23:16,040 --> 00:23:19,320 Speaker 1: still really at three percent unemployment rate. Well great, but 413 00:23:19,400 --> 00:23:22,919 Speaker 1: that doesn't help me. Where's the Deutsche Bank real unemployment rate? 414 00:23:23,080 --> 00:23:25,480 Speaker 1: Was a parlor game we've been playing bright where we 415 00:23:25,560 --> 00:23:27,840 Speaker 1: go through the math and everybody says, the math doesn't work. 416 00:23:27,920 --> 00:23:31,119 Speaker 1: What's the real number? What's your recalculated real number? Is 417 00:23:31,160 --> 00:23:34,719 Speaker 1: it double digit or can you be more optimistic than that? Well, 418 00:23:34,720 --> 00:23:37,639 Speaker 1: I would say, I mean the from the U three perspective, 419 00:23:37,680 --> 00:23:40,720 Speaker 1: it's it should be a three from a US. But 420 00:23:40,800 --> 00:23:42,800 Speaker 1: I want the EU Deutsche Bank. I want the EU 421 00:23:42,880 --> 00:23:45,960 Speaker 1: Deutsche Bank perspective. Come on, we all we all see 422 00:23:46,040 --> 00:23:49,320 Speaker 1: out there, what's going on? The U three is a joke. 423 00:23:49,960 --> 00:23:52,600 Speaker 1: What's going on? What's the real number? Yeah, I think 424 00:23:52,600 --> 00:23:54,920 Speaker 1: it's definitely a double digit number right now. Thank you. 425 00:23:55,600 --> 00:23:57,920 Speaker 1: When you're looking at it. When you're looking at what's 426 00:23:57,960 --> 00:24:01,800 Speaker 1: happening here, Tom, is that as you see continuing claims 427 00:24:01,840 --> 00:24:04,200 Speaker 1: on the state levels start to start to go down, 428 00:24:04,720 --> 00:24:07,400 Speaker 1: you're seeing a commitment, not a commensurate but a good 429 00:24:07,480 --> 00:24:11,040 Speaker 1: portion of those rolling off are going on to Pandemic 430 00:24:11,160 --> 00:24:15,680 Speaker 1: Emergency Unemployment Compensation. So that's the federal program with extended 431 00:24:15,720 --> 00:24:20,440 Speaker 1: benefits that go towards year end. Same thing you're seeing PUA, 432 00:24:20,800 --> 00:24:24,280 Speaker 1: even though California had some issues with reporting PUA, which 433 00:24:24,320 --> 00:24:28,280 Speaker 1: is Pandemic Unemployment Assistance, that's also taking higher. So the 434 00:24:28,440 --> 00:24:31,760 Speaker 1: total number of people collecting claims is not coming down 435 00:24:31,840 --> 00:24:34,959 Speaker 1: as fast as what you would think just looking at 436 00:24:34,960 --> 00:24:37,879 Speaker 1: the state continuing claims. By the way, p U A 437 00:24:38,200 --> 00:24:42,000 Speaker 1: and p e U C both expire December three, at 438 00:24:42,000 --> 00:24:44,560 Speaker 1: the end of the year. If Congress doesn't do anything, 439 00:24:44,960 --> 00:24:48,480 Speaker 1: then that's another big hit to income, possibly another couple 440 00:24:48,600 --> 00:24:52,399 Speaker 1: hundred billion two D three hundred billion UM, and that 441 00:24:52,560 --> 00:24:56,480 Speaker 1: further dense you know, profile for spending Bright Just quickly, 442 00:24:56,480 --> 00:24:59,560 Speaker 1: you've quantified the kind of damage that would happen to 443 00:24:59,600 --> 00:25:01,520 Speaker 1: the U S economy if we didn't get that fiscal help. 444 00:25:01,600 --> 00:25:04,119 Speaker 1: Let's just talk about what kind of damage, not just 445 00:25:04,160 --> 00:25:06,080 Speaker 1: in the anunted states, in the UK as well. Hit 446 00:25:06,119 --> 00:25:11,639 Speaker 1: a Chancellor talking almost about embracing creative destruction and not 447 00:25:11,760 --> 00:25:14,560 Speaker 1: allowing it to rip, but acknowledging the around permanent changes 448 00:25:14,560 --> 00:25:16,840 Speaker 1: in this economy and some businesses that won't be valuable 449 00:25:16,880 --> 00:25:20,520 Speaker 1: in the long term. Can you embrace creative destruction to 450 00:25:20,600 --> 00:25:23,200 Speaker 1: any degree in a pandemic with the restrictions to this 451 00:25:23,280 --> 00:25:26,600 Speaker 1: government has on right now? Uh? When it comes to 452 00:25:27,240 --> 00:25:29,560 Speaker 1: you know, restaurants, Do I want to see my father 453 00:25:29,720 --> 00:25:32,320 Speaker 1: with four restaurants go out of business? Um? Is that 454 00:25:32,440 --> 00:25:36,040 Speaker 1: creative destruction or is that somebody who, through no fault 455 00:25:36,080 --> 00:25:38,920 Speaker 1: of his own is being restricted to fifty percent capacity? 456 00:25:39,560 --> 00:25:42,520 Speaker 1: So I think industry by industry, and when we talk 457 00:25:42,560 --> 00:25:46,080 Speaker 1: about creative destruction, businesses that you know are no longer 458 00:25:46,200 --> 00:25:50,159 Speaker 1: are not longer viable through technology or some sort of 459 00:25:50,280 --> 00:25:55,280 Speaker 1: natural process. Sure, but for businesses that, through no fault 460 00:25:55,280 --> 00:25:59,320 Speaker 1: of their own are being restricted by the state right 461 00:25:59,520 --> 00:26:03,520 Speaker 1: and they can't operate profitably, there needs to be some 462 00:26:03,760 --> 00:26:06,159 Speaker 1: sort of state aid. Brett right to catch up. I 463 00:26:06,240 --> 00:26:07,919 Speaker 1: send up best to the family. Why don't you It's 464 00:26:07,960 --> 00:26:10,240 Speaker 1: a tough industry. Brett Ronnet, don't with your bank Stadia 465 00:26:10,520 --> 00:26:14,200 Speaker 1: US economists. Thanks for listening to the Bloomberg Surveillance podcast. 466 00:26:14,600 --> 00:26:19,520 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 467 00:26:19,680 --> 00:26:23,960 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 468 00:26:24,119 --> 00:26:27,959 Speaker 1: Keane before the podcast. You can always catch us worldwide. 469 00:26:28,440 --> 00:26:29,520 Speaker 1: I'm Bloomberg Radio.