WEBVTT - Single Best Idea with Tom Keene: Katharine Neiss & Constance Hunter

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, the.

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<v Speaker 2>Single best idea with a bonus explanation. Today we're going

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<v Speaker 2>to talk about what's going on in Europe, and we're

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<v Speaker 2>going to talk about what's going on in America. This

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<v Speaker 2>strange thing uncertainty. And instead of diving right into the

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<v Speaker 2>absolute brilliance of Catherine Nice of Pgium, out of Queen Victoria,

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<v Speaker 2>out of London, I should say she was in our

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<v Speaker 2>studios in New York and she's just absolutely definitive on

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<v Speaker 2>the continent of Europe. A little bit of explanation. Europe

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<v Speaker 2>in the modern form has a monetary union, the European

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<v Speaker 2>Central Bank. It's like the FED. It's not what it

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<v Speaker 2>is like the FED. All agree that what is missing

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<v Speaker 2>in Europe, much like a modern system, is some form

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<v Speaker 2>of fiscal union. Mississippi and Michigan are on the same page.

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<v Speaker 2>Finland and Spain are not on the same fiscal page.

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<v Speaker 2>And with all that's going on, pushed by the Trump

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<v Speaker 2>administration on Ukraine with a needed budget expansion in Europe,

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<v Speaker 2>they don't have the apparatus in place to affect whatever

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<v Speaker 2>the fiscal outcome is. And that was the heat of

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<v Speaker 2>the discussion today. I want to emphasize the Bloomberg coverage.

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<v Speaker 2>The German yields did move out priced down, yield higher,

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<v Speaker 2>but it wasn't in an inflammatory manner. The entry Europe

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<v Speaker 2>spreads did not move. This is critical. Germany, Italy didn't move.

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<v Speaker 2>They all sort of lifted away from however you want

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<v Speaker 2>to measure their yields, say against the United States yields.

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<v Speaker 2>The press conference at laguard Gave was absolutely fascinating and historic.

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<v Speaker 2>Back to whe jackson Hole speech of two years ago

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<v Speaker 2>on my conversation with her at that time. Here now

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<v Speaker 2>from Pgium, Catherine Nice.

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<v Speaker 3>The issue for Europe is not the lack of money.

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<v Speaker 3>The issue in Europe is not the lack of you know,

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<v Speaker 3>general consensus about how these funds should be spent. The

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<v Speaker 3>problem in Europe is there is no fiscal mechanism in

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<v Speaker 3>place to allow this spending to happen. So what is

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<v Speaker 3>so important about this signal that we're seeing from Germany

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<v Speaker 3>is not just the size, but what it means for

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<v Speaker 3>Europe working together, having leadership in its largest, most economically

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<v Speaker 3>important economy in terms of going forward, and I think

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<v Speaker 3>everything else. You know, provided this is planned and executed,

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<v Speaker 3>you know, properly. There there are risks clearly around doing

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<v Speaker 3>big stuff. I think everything else is going to fall

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<v Speaker 3>into line.

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<v Speaker 2>Catherne Nice, doctor Nie out of the University of British

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<v Speaker 2>Columbia working with PGUM and just thank you, thank You're

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<v Speaker 2>just brilliant today on the cacophity of Europe that's so

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<v Speaker 2>foreign to so many of us here in America. The

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<v Speaker 2>number one book I give to the kids is Against

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<v Speaker 2>the Gods Peter Bernstein, and it is a tour to

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<v Speaker 2>force as we stagger from risk to uncertainty and then

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<v Speaker 2>in a more modern sense, this word ambiguity. And I'm

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<v Speaker 2>going to go into the details right now, but all

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<v Speaker 2>you need to know is risk is some form of

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<v Speaker 2>measurable mystery. Uncertainty is basically not measurable. Uncertainty is something

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<v Speaker 2>that we really can't get our hands on. For Constance

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<v Speaker 2>Hunter expert on this EIU, the uncertainty now is a

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<v Speaker 2>changing landscape. Just as I tape this, I see that

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<v Speaker 2>the Secretary of Commerce says the President quote likely to

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<v Speaker 2>defer tariffs on all US MCA goods. I would suggest

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<v Speaker 2>that's a game changer. We'll let you decide after you

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<v Speaker 2>listen to single best idea. Here's Constance Hunter of EIU.

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<v Speaker 4>We don't know where we're going to land, and until

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<v Speaker 4>that point, we have to come up with another way

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<v Speaker 4>to ascertain the impact of all of this uncertainty on

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<v Speaker 4>how households and businesses are going to behave. And one

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<v Speaker 4>thing that we look at is an uncertainty index that

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<v Speaker 4>has been extremely good at forecasting recessions. And it is

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<v Speaker 4>presently not as high as it was right before the pandemic,

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<v Speaker 4>but it is higher than the global financial crisis, the

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<v Speaker 4>dot com bubble bursting, and the SNL loan crisis. Right,

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<v Speaker 4>so we know that this level of uncertainty is going

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<v Speaker 4>to eventually cause a pullback in household spending in corporate capbex.

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<v Speaker 2>Constance Hunter with EIU there and the changing landscape, and

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<v Speaker 2>let me tell you it changes line by line in

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<v Speaker 2>press release. Is I tape this over four minutes thirty

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<v Speaker 2>nine seconds, the Dow has gone up almost two hundred

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<v Speaker 2>points off of one line item out of sixteen hundred

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<v Speaker 2>Pennsylvania Avenue, Thank you for your support on your commutes

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<v Speaker 2>you on YouTube. Growing each and every day, look to

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<v Speaker 2>the wide set of podcasts. Joe Wisenthal and Tracy Alloway

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<v Speaker 2>out with a superb podcast. I'm not going to tell

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<v Speaker 2>you what it is. I think it's already. It's not

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<v Speaker 2>out yet, I should say, but it'll be must listen

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