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Speaker 1: This is Bloomberg Daybreak Europe for this Wednesday, the twelfth

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Speaker 1: of April in London. Coming up today, differences of opinion,

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Speaker 1: financial heavyweights at odds and the impact of the banking crisis.

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Speaker 1: Racing for the Damn to burst. Goldman's Flood says stocks

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Speaker 1: will surge if USCPI comes in at or below consensus.

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Speaker 1: Promoting peace and prosperity. Biden lands in Belfast to mark

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Speaker 1: twenty five years of the Good Friday Agreement. Former Morgan

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Speaker 1: Stanley executive to advise Sunac millionaire's call for a British

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Speaker 1: wealth tax, and Intel Leaps suggests UK special forces are

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Speaker 1: in Ukraine. Those are the stories we're looking at in

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Speaker 1: today's papers. And I'm Leanne Gerns plus X marks the

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Speaker 1: spot Elon Musk turns Twitter into x Corps. That's all

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Speaker 1: straight ahead on Bloomberg Daybreak Europe. The Business news You

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Speaker 1: need to start your day in just one fifteen minute

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Speaker 1: podcast on Apple, Spotify, The Bloomberg Business, Apple and everywhere

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Speaker 1: you get your podcasts. Good morning, I'm Stephen Carroll. Here

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Speaker 1: are the stories we're following today. The IMF says it's

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Speaker 1: too soon to sound the old clear over the turmoil

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Speaker 1: from the banking crisis, but some top policymakers disagree. US

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Speaker 1: Treasury Secretary Johnet Yellen says the US economy is performing

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Speaker 1: exceptionally well. She doesn't believe the recent banking issues have

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Speaker 1: restricted the availability of credit. I've not really seen evidence

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Speaker 1: at this stage suggesting a contraction in credit, although that

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Speaker 1: is a possibility. The US economy is obviously performing exceptionally well,

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Speaker 1: with continued solid job creation, inflation gradually moving down, thro

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Speaker 1: robust consumers spending. Yellen spoke after data show that US

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Speaker 1: landing contracted by the most on record in the last

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Speaker 1: two weeks of March. Meanwhile, Chicago FED President Austin Goolsby

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Speaker 1: says he believes a cautious approach is now needed to

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Speaker 1: monetary policy. He says the US Central Bank should assess

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Speaker 1: just how much pressure on banks will contribute to tighter

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Speaker 1: lending conditions today. What I want us to think about

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Speaker 1: is why I think that at moments of financial stress

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Speaker 1: like this, the right monetary policy is really caution and

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Speaker 1: watchfulness in prudence. Fed's newest policymaker also signaling that he

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Speaker 1: may support holding rates during next month's policy meeting, but

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Speaker 1: stopped short of explicitly endorsing the move. US regulators were

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Speaker 1: investigating Credit Suites eight months before its collapse. The bank

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Speaker 1: delayed its annual report in March, blaming a late call

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Speaker 1: from the Securities and Exchange Commission about accounting errors, but

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Speaker 1: Bloomberg Reporting has found that a probe has been ongoing

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Speaker 1: since July of the previous year. It comes as the

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Speaker 1: Swiss Parliament symbolically voted against approving government guarantees for UBS's

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Speaker 1: takeover of Credit Suis in a show of political discontent

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Speaker 1: with the deal. Goldban Sachs has published research with its

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Speaker 1: expectations for the stock market reactions to today's US CPI report.

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Speaker 1: The story from Bloomberg Charlie Palace partner John Flood says

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Speaker 1: you can expect the SMP five hundred to drop at

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Speaker 1: least two percent should the year over year inflation rate

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Speaker 1: come in above the previous reading of six percent, but

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Speaker 1: he says stocks are likely to go higher if the

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Speaker 1: CPI meets or trails five point one percent, which happens

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Speaker 1: to be the consensus estimate from economists in a Bloomberg survey.

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Speaker 1: The veteran trader wrote that the stock market quote wants

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Speaker 1: a softer print as a hot reading will add more

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Speaker 1: confusion and uncertainty into the equation of what the FED

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Speaker 1: does from here in New York. Charlie Pellet Bloomberg Daybreak,

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Speaker 1: euro Joe Biden has arrived in Northern Ireland in a

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Speaker 1: visit to mark the twenty fifth anniversary of the Good

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Speaker 1: Friday peace agreement on leaving the United States. Reporters asked

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Speaker 1: the President what the goal of the trip was, make

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Speaker 1: sure the Irish accord then the winter Rimae day in

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Speaker 1: place to keep the peace. Biden's four day trip to

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Speaker 1: the island of Ireland will include meeting UK Prime Minister

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Speaker 1: Ritchie soon Act later today, as well as Irish Techeckley

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Speaker 1: of our adcur lator in the week, plus leaders of

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Speaker 1: the main political parties at Stormont and Twitter has ceased

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Speaker 1: to be an independent company the social media business has

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Speaker 1: merged with a newly formed shell firm called x Corp.

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Speaker 1: Elon Musk meanwhile, has been speaking to the BBC on

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Speaker 1: a Twitter space about six months since his takeover of

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Speaker 1: the company. It was a characteristically quirky exchange where Musk

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Speaker 1: says he hasn't got a successor in mind to replace

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Speaker 1: him as CEO. I have not the CEO Twitter. My

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Speaker 1: dog gives the CEO. Well, okay, have you got any

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Speaker 1: of the great dog other than the dorial work. It's

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Speaker 1: hard to put get an Okay, that's good to know.

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Speaker 1: Other than the do have you got any success with

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Speaker 1: your mind? You've got a black a tonal tunnel or

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Speaker 1: what would you need? Okay? I was Elon Musk speaking

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Speaker 1: there to the BBC on a Twitter space in the

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Speaker 1: past hour or so. This has been a fascinating conversation.

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Speaker 1: We'll keep you up to date on the details of

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Speaker 1: it later on as well. The story, though it's caught

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Speaker 1: my eye, is to do with a very expensive pair

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Speaker 1: of shoes. This is a pair of Michael Jordan's trainers

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Speaker 1: from his famous Last Dance season, selling for two point

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Speaker 1: two million dollars at a Sotheby's auction. They're the most

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Speaker 1: expensive pair of sneakers ever to known have been known

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Speaker 1: to have been sold. The previous record was one point

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Speaker 1: eight million dollars for a pair of Nikecare Yeasy shoes. Now.

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Speaker 1: Jordan wore this pair during Game two of the nineteen

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Speaker 1: ninety eight NBA Finals. They had come to an auction

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Speaker 1: already with a pretty high price they'll expected to be

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Speaker 1: record breakers to The estimated price was for two point

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Speaker 1: two to four million dollars. It carried what Sometheby's calls

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Speaker 1: an irrevocable bid, which means that that's essentially they had

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Speaker 1: a buyer lined up in advance when they brought this

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Speaker 1: two auctions, So it did come in at the lower

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Speaker 1: end of that two to four million dollars range when

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Speaker 1: it comes to two point two minute, especially when you

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Speaker 1: include the auction house fees for that as well. So

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Speaker 1: although it's certainly a very high price, it's not perhaps

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Speaker 1: evidence of a massively booming market. These are, of course

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Speaker 1: a very unique pair of shoes, so fetching a massive

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Speaker 1: price tag there from Southby's as well. Let's get back

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Speaker 1: to discussing some of those opinions on the effects of

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Speaker 1: the banking turmoil on the global economy. The imslators comments

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Speaker 1: say it's too soon to sound the all clear and

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Speaker 1: that the banking issues are likely to be a drag

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Speaker 1: on global economic growth, and some policymakers don't agree. John

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Speaker 1: at Yellen among them, saying that she doesn't see any

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Speaker 1: signs of restricted credit availability. You see the call for

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Speaker 1: prudence from Aston Gilsley of the Chicago Fad as well. Let'

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Speaker 1: speak to Bloomberg opinion colomist Daniel Mask for more on

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Speaker 1: their story, and Daniel, let's dig into about what the

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Speaker 1: IMF has said about there. So they write to be

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Speaker 1: cautious on this front. Yes, absolutely, there's anecdotal evidence coming

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Speaker 1: in and you can see it in some federal reserved data.

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Speaker 1: We are seeing the makings of a contraction in credit.

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Speaker 1: As Ben Bananki famously said, credit is the lifeblood of

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Speaker 1: the economy. Without it, there is no economy. Now, don't

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Speaker 1: mean to get terribly dramatic here, but clearly it's having

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Speaker 1: some impact. The question is how consequential is that impact.

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Speaker 1: And you know, the thing that struck me listening to

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Speaker 1: the IMF press conference yesterday was not so much the

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Speaker 1: numerical changes to their projections, which were very slight. It

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Speaker 1: was the overall difference in tone. They presented a much damper,

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Speaker 1: more downbeat face on things, and what's been going on

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Speaker 1: in the banking industry has been a contributor to that

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Speaker 1: shift in tone. Now, the growth forecast were trammed, as

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Speaker 1: you mentioned, part of that downbeat tone you're talking about,

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Speaker 1: But can you kind of put a scale on how

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Speaker 1: much of a down grade this is and how gloomy

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Speaker 1: the IMF is being about the upcoming months and years

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Speaker 1: for the global economy. Numerically, the changes are insubstantial, down

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Speaker 1: a tenth of a percentage point this year from two

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Speaker 1: point nine which is what they forecast in January to

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Speaker 1: two point eight, which is the prediction they made Tuesday

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Speaker 1: in DC. But look beyond the numbers. It's the shift

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Speaker 1: in tone that I find interesting. So as you know,

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Speaker 1: I live in Singapore. When the IMF upgraded, there's that

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Speaker 1: word upgrade. Don't hear it too often? It's forecasts. The

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Speaker 1: economic team came to Singapore for that unveiling and the

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Speaker 1: talk was very much about turning points. You know, the

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Speaker 1: chief economist was quite upbeat. He gave a lecture at

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Speaker 1: a prominent university here the next day, and I turned up.

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Speaker 1: I asked him a question after the lecture. I said,

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Speaker 1: what is it about turning points that makes them so

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Speaker 1: tricky and why the equivocation? He said, well, you know,

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Speaker 1: things have been moving in one direction very much for

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Speaker 1: the past eighteen months, and then you start to see

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Speaker 1: some of these things moving in a little bit of

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Speaker 1: a different way he was talking principally about China's reopening.

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Speaker 1: Then you know you can start to say the ingredients

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Speaker 1: of there at long last for a shift. You know,

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Speaker 1: there was really none of that body language or mood

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Speaker 1: music yesterday, from what I could see, and in fact,

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Speaker 1: listening to the audio the press conference just before I

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Speaker 1: joined you, I noticed that no member of the audience

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Speaker 1: challenged the chief economist on the talking point line from

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Speaker 1: just a few months ago a turning point. Excuse me,

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Speaker 1: I talk slip there, but I mean perhaps both in

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Speaker 1: fact is what it was at turning points under talking point.

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Speaker 1: But I mean, I'm curious. We pay always a lot

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Speaker 1: of attention to im IMF forecast, but how does the

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Speaker 1: picture that the IMF is painting compared to what we've

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Speaker 1: heard elsewhere. Look, I think we're heading into a gray

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Speaker 1: area in the global economy. Now can we handle the

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Speaker 1: gray area? What do I mean by that? I mean

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Speaker 1: we've gone from like great bullishness and optimism for much

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Speaker 1: of twenty twenty one and into the start of twenty

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Speaker 1: twenty two, to great pessimism. Because inflation was way above forecast,

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Speaker 1: central banks were embarking on a campaign of interest rate

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Speaker 1: hikes that was much more aggressive than had been anticipated,

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Speaker 1: and naturally the economy began to wilt, not buckle, but

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Speaker 1: wilt under the weight of that. Then we had China's

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Speaker 1: reopening at the end of last year, which came very

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Speaker 1: very quickly. It's like, Okay, one of the big drags

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Speaker 1: has been taken away. The other big drag has been

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Speaker 1: rapid monetary tightening. That's now coming to at the very

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Speaker 1: least a sort of a fork in the road. If not,

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Speaker 1: we're talking about an end of hikes. So you know,

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Speaker 1: we're in a gray area here, and it might be

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Speaker 1: like the period around nineteen ninety five, Federal Reserve and

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Speaker 1: other central banks raised borrowing costs very aggressively. In nineteen

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Speaker 1: ninety four, things slowed down considerably, they eased off, and

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Speaker 1: we then had a year or two of fine tuning.

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Speaker 1: You know, things could have gone either way, and then

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Speaker 1: the end result was the nineties boon that's now gone

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Speaker 1: down in history. So you know, we may be in

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Speaker 1: a gray area, a period of fine tuning. Can we

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Speaker 1: handle it. I'm gonna have to strap myself in. I

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Speaker 1: think we all might. Daniel Masbenberg Opinion Columns, Thank you

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Speaker 1: very much, for that analysis. Up next, Snaka Apports appoints

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Speaker 1: a former Morgan Stanley exact as his business advisor. Big

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Speaker 1: brand millionaires called for a British wealth tax and an

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Speaker 1: intel league suggests the UK Special Forces are in Ukraine.

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Speaker 1: Now the paper review on blue Bird Day Break Europe

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Speaker 1: the news you need to know from today's papers Blueberg

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Speaker 1: Day and Garrans is with us in studio for details

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Speaker 1: of some of those stories in the papers today. Let's

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Speaker 1: start with The Financial Times. Raschi Sinaka points former top

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Speaker 1: Morgan Stanley executive as his business advisor. This is Frank's

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Speaker 1: thank you so much, Yes, and I'm here and you

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Speaker 1: know what. He has been bought in as the government

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Speaker 1: hopes to deliver stephen on economic pledges and bring down

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Speaker 1: inflation by the end of this year. And Petty Gutt

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Speaker 1: spent almost a thirty years at the US investment bank

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Speaker 1: Morgan Stanley, so this means he comes with so much

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Speaker 1: experience and a massive network of connections which a government

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Speaker 1: are hoping to draw on. He's been hired to boost

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Speaker 1: business investment, drive innovation and productivity here in the UK

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Speaker 1: and also help deliver the Prime Minister's promise to grow

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Speaker 1: the economy not an easy promise to deliver on. Though,

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Speaker 1: Oh it's not an easy promise to deliver on, Stephen.

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Speaker 1: Let me tell you why. So yesterday's economic forecast published

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Speaker 1: by the IMF highlighted the massive scale of the challenge

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Speaker 1: he is going to face and the government. The fund

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Speaker 1: predicted the UK economy would shrink by Zarah brings three percent,

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Speaker 1: while other countries, including France and the US are expected

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Speaker 1: to expand, and the UK remains the only G seven

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Speaker 1: economy not to have returned to its pre pandemic coronavirus

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Speaker 1: size and business investment has tagnated. And of course the

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Speaker 1: Brexit vote, so lots of challengers for a mister passive

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Speaker 1: guy as it takes up that role. Let's go to

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Speaker 1: the Telegraph nextally and the big brand millionaires calling for

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Speaker 1: a British wealth tax. Well, yes, this story is all

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Speaker 1: about the growing number of the ultra rich, Stephen, who

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Speaker 1: believe they must pay more tax to tackle growing inequality

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Speaker 1: in the country. The Patriotic Millionaires UK Group are calling

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Speaker 1: for MPs to impose a wealth tax on those who

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Speaker 1: have over ten million pounds in net assets. So the

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Speaker 1: group did publish a document ahead of the budget in

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Speaker 1: which they outlined six wealth tax policies. Now this was

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Speaker 1: to raise a revenue for what they call Britain's crumbling

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Speaker 1: public servi and also boost economic growth, something we've just

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Speaker 1: been talking about Rishi Sunak wanting to do. And they

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Speaker 1: estimate that they flagship policy, a one percent to two

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Speaker 1: percent wealth tax on those with assets over ten million pounds,

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Speaker 1: would raise up to twenty two billion pounds a year. However,

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Speaker 1: the criticism is in Norway wealth taxes are ready triggered

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Speaker 1: an exodus of rich moneymakers and people could just go offshore. Yeah,

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Speaker 1: I mean that. Look, there's lots of debate over the

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Speaker 1: effectiveness of wealth taxes as well. We've seen the experience,

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Speaker 1: you know, when France has tried to apply one as well.

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Speaker 1: Very tricky to do, right, although there are economists out

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Speaker 1: there that have very done, very detailed work on the

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Speaker 1: effective of that as well. I'm thinking of the likes

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Speaker 1: of Gabriel Zukman and or let's go though to a

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Speaker 1: story in the Guardian next to lean. Up to fifty

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Speaker 1: UK special forces present in Ukraine this year. This is

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Speaker 1: according to a leak of US intelligence. Yes, indeed, so

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Speaker 1: lead to US military documents indicate that the UK has

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Speaker 1: deployed as many as a fifty special forces to Ukraine,

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Speaker 1: and this is considerably higher than the number from the

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Speaker 1: US and France, where basically they deployed fourteen and fifteen

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Speaker 1: special forces. So we see the UK putting more special

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Speaker 1: forces into Ukraine. The government has not disclosed since the

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Speaker 1: beginning of the war that special forces have been active

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Speaker 1: in the country. Now it's completely unclear what activities the

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Speaker 1: special forces may be engaged in, or whether the numbers

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Speaker 1: of personnel have been maintained at this level in the

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Speaker 1: country as the Russian invasion does continue. I was just

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Speaker 1: thinking this is not a massive amount given how widespread

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Speaker 1: and large the offensive is, but is still interesting how

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Speaker 1: much reinforcement the UK is deploying to the country. This

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Speaker 1: is Bloomberg Daybreak Europe, your morning brief on the stories

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Speaker 1: making news from London to Wall Street and beyond. Look

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Speaker 1: play Bloomberg eleven thirty. I'm Stephen Carroll. Join us again

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