Speaker 1: Bloomberg Audio Studios, podcasts, radio news, the.
Speaker 2: Single best idea with a bonus explanation. Today we're going
Speaker 2: to talk about what's going on in Europe, and we're
Speaker 2: going to talk about what's going on in America. This
Speaker 2: strange thing uncertainty. And instead of diving right into the
Speaker 2: absolute brilliance of Catherine Nice of Pgium, out of Queen Victoria,
Speaker 2: out of London, I should say she was in our
Speaker 2: studios in New York and she's just absolutely definitive on
Speaker 2: the continent of Europe. A little bit of explanation. Europe
Speaker 2: in the modern form has a monetary union, the European
Speaker 2: Central Bank. It's like the FED. It's not what it
Speaker 2: is like the FED. All agree that what is missing
Speaker 2: in Europe, much like a modern system, is some form
Speaker 2: of fiscal union. Mississippi and Michigan are on the same page.
Speaker 2: Finland and Spain are not on the same fiscal page.
Speaker 2: And with all that's going on, pushed by the Trump
Speaker 2: administration on Ukraine with a needed budget expansion in Europe,
Speaker 2: they don't have the apparatus in place to affect whatever
Speaker 2: the fiscal outcome is. And that was the heat of
Speaker 2: the discussion today. I want to emphasize the Bloomberg coverage.
Speaker 2: The German yields did move out priced down, yield higher,
Speaker 2: but it wasn't in an inflammatory manner. The entry Europe
Speaker 2: spreads did not move. This is critical. Germany, Italy didn't move.
Speaker 2: They all sort of lifted away from however you want
Speaker 2: to measure their yields, say against the United States yields.
Speaker 2: The press conference at laguard Gave was absolutely fascinating and historic.
Speaker 2: Back to whe jackson Hole speech of two years ago
Speaker 2: on my conversation with her at that time. Here now
Speaker 2: from Pgium, Catherine Nice.
Speaker 3: The issue for Europe is not the lack of money.
Speaker 3: The issue in Europe is not the lack of you know,
Speaker 3: general consensus about how these funds should be spent. The
Speaker 3: problem in Europe is there is no fiscal mechanism in
Speaker 3: place to allow this spending to happen. So what is
Speaker 3: so important about this signal that we're seeing from Germany
Speaker 3: is not just the size, but what it means for
Speaker 3: Europe working together, having leadership in its largest, most economically
Speaker 3: important economy in terms of going forward, and I think
Speaker 3: everything else. You know, provided this is planned and executed,
Speaker 3: you know, properly. There there are risks clearly around doing
Speaker 3: big stuff. I think everything else is going to fall
Speaker 3: into line.
Speaker 2: Catherne Nice, doctor Nie out of the University of British
Speaker 2: Columbia working with PGUM and just thank you, thank You're
Speaker 2: just brilliant today on the cacophity of Europe that's so
Speaker 2: foreign to so many of us here in America. The
Speaker 2: number one book I give to the kids is Against
Speaker 2: the Gods Peter Bernstein, and it is a tour to
Speaker 2: force as we stagger from risk to uncertainty and then
Speaker 2: in a more modern sense, this word ambiguity. And I'm
Speaker 2: going to go into the details right now, but all
Speaker 2: you need to know is risk is some form of
Speaker 2: measurable mystery. Uncertainty is basically not measurable. Uncertainty is something
Speaker 2: that we really can't get our hands on. For Constance
Speaker 2: Hunter expert on this EIU, the uncertainty now is a
Speaker 2: changing landscape. Just as I tape this, I see that
Speaker 2: the Secretary of Commerce says the President quote likely to
Speaker 2: defer tariffs on all US MCA goods. I would suggest
Speaker 2: that's a game changer. We'll let you decide after you
Speaker 2: listen to single best idea. Here's Constance Hunter of EIU.
Speaker 4: We don't know where we're going to land, and until
Speaker 4: that point, we have to come up with another way
Speaker 4: to ascertain the impact of all of this uncertainty on
Speaker 4: how households and businesses are going to behave. And one
Speaker 4: thing that we look at is an uncertainty index that
Speaker 4: has been extremely good at forecasting recessions. And it is
Speaker 4: presently not as high as it was right before the pandemic,
Speaker 4: but it is higher than the global financial crisis, the
Speaker 4: dot com bubble bursting, and the SNL loan crisis. Right,
Speaker 4: so we know that this level of uncertainty is going
Speaker 4: to eventually cause a pullback in household spending in corporate capbex.
Speaker 2: Constance Hunter with EIU there and the changing landscape, and
Speaker 2: let me tell you it changes line by line in
Speaker 2: press release. Is I tape this over four minutes thirty
Speaker 2: nine seconds, the Dow has gone up almost two hundred
Speaker 2: points off of one line item out of sixteen hundred
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