1 00:00:00,080 --> 00:00:12,960 Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:33,519 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg This is, 5 00:00:33,560 --> 00:00:37,400 Speaker 1: without question, are a conversation in economics today. Katherine Man 6 00:00:37,479 --> 00:00:40,600 Speaker 1: is with us at Queen Victoria Street with Francine in London. 7 00:00:40,640 --> 00:00:43,440 Speaker 1: She's the head of City Group, the former chief Economists 8 00:00:43,479 --> 00:00:45,320 Speaker 1: for the o e c D and now joining us 9 00:00:45,320 --> 00:00:48,680 Speaker 1: from Dubai. The Secretary General of the o e c D. 10 00:00:48,920 --> 00:00:52,199 Speaker 1: And Helguria with us as well. Dr Guria, this is 11 00:00:52,240 --> 00:00:55,360 Speaker 1: wonderful to have you and Dr Man with us as well. 12 00:00:55,600 --> 00:00:57,720 Speaker 1: I know Guria. I want to start with the state 13 00:00:57,840 --> 00:01:01,280 Speaker 1: of the global economy. We see dissent platition here there 14 00:01:01,320 --> 00:01:04,440 Speaker 1: in everywhere. Give us the measurement that the o e 15 00:01:04,440 --> 00:01:08,360 Speaker 1: c D has right now of a move to economic slowdown, 16 00:01:08,600 --> 00:01:13,000 Speaker 1: to recession or maybe even the Lawrence Summer's secular stagnation. 17 00:01:16,840 --> 00:01:22,400 Speaker 1: I am not predicting that there's gonna be a recession. 18 00:01:23,160 --> 00:01:26,039 Speaker 1: What I am predicting and what we are seeing and 19 00:01:26,160 --> 00:01:30,760 Speaker 1: living is that we're slowing down the growth. We thought 20 00:01:30,800 --> 00:01:33,559 Speaker 1: we were going to be closer to four percent growth 21 00:01:33,760 --> 00:01:38,880 Speaker 1: in and our latest projection is of three and the 22 00:01:39,000 --> 00:01:43,120 Speaker 1: hot percent. What happened in the meantime the trade tensions 23 00:01:43,680 --> 00:01:46,440 Speaker 1: and why is it that we are having the trade 24 00:01:46,440 --> 00:01:50,640 Speaker 1: tensions affect the prospects for world economy so much? Well, 25 00:01:50,840 --> 00:01:57,360 Speaker 1: basically because when you invest to produce and you produced 26 00:01:57,400 --> 00:02:00,240 Speaker 1: to sell, but if you don't know whether you can sell, 27 00:02:00,320 --> 00:02:02,680 Speaker 1: or you don't know what price you can sell, what 28 00:02:02,760 --> 00:02:05,640 Speaker 1: tariff is going to be applied to your sales, then 29 00:02:05,800 --> 00:02:08,720 Speaker 1: what happens is you don't invest. And if you don't invest, 30 00:02:08,760 --> 00:02:11,680 Speaker 1: then you do not have growth. This is what is 31 00:02:11,720 --> 00:02:14,520 Speaker 1: happening now and this is the size of the impact, 32 00:02:14,760 --> 00:02:19,440 Speaker 1: and this is why this is so serious. Um, Mr Guria, 33 00:02:19,639 --> 00:02:22,080 Speaker 1: Good morning from London. Paul Krugman was talking to us 34 00:02:22,120 --> 00:02:25,120 Speaker 1: a little bit earlier on about interest rates and you 35 00:02:25,120 --> 00:02:28,000 Speaker 1: know the recession. He basically, you know, put it bluntly 36 00:02:28,040 --> 00:02:30,680 Speaker 1: in saying the world it's worse off now than in 37 00:02:30,720 --> 00:02:32,880 Speaker 1: two thousand and seven if there were to be a crisis. 38 00:02:32,960 --> 00:02:39,440 Speaker 1: Do you agree with that statement? No, I don't. We've 39 00:02:39,520 --> 00:02:44,480 Speaker 1: learned a lot and the banking system is much more 40 00:02:44,520 --> 00:02:50,520 Speaker 1: strongly capitalized, it's better regulated, it's also a better supervised. 41 00:02:51,040 --> 00:02:56,239 Speaker 1: But it is true that some of the capital that 42 00:02:56,280 --> 00:03:00,440 Speaker 1: we had, some of the ammunition that we had before 43 00:03:00,480 --> 00:03:04,679 Speaker 1: the crisis, has been used precisely to deal with the crisis. 44 00:03:05,120 --> 00:03:08,799 Speaker 1: And therefore, in many cases, for example, the fiscal tool, 45 00:03:09,560 --> 00:03:14,240 Speaker 1: the degrees of freedom are less. The monetary policy tool, well, 46 00:03:14,280 --> 00:03:18,200 Speaker 1: we've used it to the hilt for practically ten years, 47 00:03:18,800 --> 00:03:26,120 Speaker 1: and therefore you have less flexibility on that score. Does it? 48 00:03:26,280 --> 00:03:28,239 Speaker 1: But does it? Is it likely that we see a 49 00:03:28,360 --> 00:03:31,240 Speaker 1: US recession this year? And if the FED doesn't have 50 00:03:31,320 --> 00:03:33,840 Speaker 1: the tools, what does that mean to where we end up? 51 00:03:37,480 --> 00:03:40,680 Speaker 1: I do not see a recession in the United States. 52 00:03:40,680 --> 00:03:43,840 Speaker 1: In fact, the United States is one of the economies 53 00:03:43,880 --> 00:03:48,400 Speaker 1: that are doing better. And at the same time, what 54 00:03:48,520 --> 00:03:52,560 Speaker 1: the FED has done is to be evidence based, which 55 00:03:52,600 --> 00:03:55,440 Speaker 1: they said they were doing. They're doing it, and that is, 56 00:03:56,000 --> 00:03:59,920 Speaker 1: if you see a slowdown in the economy, uh, then 57 00:04:00,040 --> 00:04:04,559 Speaker 1: of course you go slower in terms of the increases 58 00:04:04,720 --> 00:04:09,400 Speaker 1: in the interest rates. So already they said instead of three, 59 00:04:09,960 --> 00:04:13,920 Speaker 1: maybe we'll be doing two. And that's in time. You're 60 00:04:13,960 --> 00:04:20,800 Speaker 1: having this very very healthy, well and very vigorous job creation. Well, 61 00:04:20,839 --> 00:04:23,599 Speaker 1: I know Guria with us in Dubaian in London, Katherine 62 00:04:23,600 --> 00:04:25,960 Speaker 1: Man and Katherine I'm pleased to say, joining us in 63 00:04:25,960 --> 00:04:29,599 Speaker 1: the conversation as well is muhammadl Area is watching and 64 00:04:29,680 --> 00:04:33,479 Speaker 1: sends it an immediate email for Dr Mann Katherine Man 65 00:04:33,880 --> 00:04:36,600 Speaker 1: very simply, here, can any kind of global slow down, 66 00:04:36,640 --> 00:04:40,680 Speaker 1: global disinflation, the sluggishness in Europe and on and on. 67 00:04:41,080 --> 00:04:43,560 Speaker 1: Is that enough to stall or even drag down the 68 00:04:43,680 --> 00:04:49,280 Speaker 1: US economy? How does that reaction function work? Well? The U. S. 69 00:04:49,320 --> 00:04:53,720 Speaker 1: Economy is a much more closed economy than virtually any 70 00:04:53,720 --> 00:04:57,479 Speaker 1: other one UH in the globe, and right now the 71 00:04:57,560 --> 00:05:01,159 Speaker 1: domestic source of growth coming on the tight labor market 72 00:05:01,279 --> 00:05:06,239 Speaker 1: and rising wages is providing momentum for the U. S. Economy. 73 00:05:06,279 --> 00:05:10,920 Speaker 1: There is still also in place government spending associated with 74 00:05:11,279 --> 00:05:15,440 Speaker 1: the fiscal program that has not faded completely yet UH. 75 00:05:15,520 --> 00:05:17,880 Speaker 1: And so if you look at the U. S economy, 76 00:05:17,920 --> 00:05:22,159 Speaker 1: it has a very strong domestic sources of growth. That 77 00:05:22,279 --> 00:05:25,320 Speaker 1: doesn't mean it's immune from the rest of the world. 78 00:05:25,400 --> 00:05:28,359 Speaker 1: It doesn't mean it's immune from the trade tensions and 79 00:05:28,360 --> 00:05:31,840 Speaker 1: the consequences of the trade tensions. It just means that 80 00:05:32,160 --> 00:05:35,039 Speaker 1: in the waiting between the two of them, the US 81 00:05:35,120 --> 00:05:40,200 Speaker 1: economy is growing more robustly because the domestic side is 82 00:05:40,279 --> 00:05:43,440 Speaker 1: much more resilient. Uh, it won't you know. I think 83 00:05:43,440 --> 00:05:46,280 Speaker 1: what we we we recognize is is that, you know, 84 00:05:46,640 --> 00:05:50,320 Speaker 1: if there is a exacerbation of the trade tensions, if 85 00:05:50,680 --> 00:05:54,719 Speaker 1: we get to a much broader array of trade tensions, 86 00:05:54,760 --> 00:05:58,360 Speaker 1: not just China, but also potentially with Europe um Section 87 00:05:58,440 --> 00:06:02,040 Speaker 1: two three two issue coming up here later in the month, 88 00:06:02,360 --> 00:06:05,200 Speaker 1: potentially a report issued about that. Um, you know, you 89 00:06:05,240 --> 00:06:08,160 Speaker 1: start to layer on top of each other, these issues 90 00:06:08,240 --> 00:06:12,000 Speaker 1: on the trade side, and it feeds back to domestic investment. 91 00:06:12,200 --> 00:06:18,039 Speaker 1: Domestic investment pauses, uh, domestic investment pauses. Justice on Huldgreya said, Um, 92 00:06:18,200 --> 00:06:20,920 Speaker 1: we were a team you know, back there when I 93 00:06:20,960 --> 00:06:22,440 Speaker 1: was Chief of commiss O E c D. And and 94 00:06:22,480 --> 00:06:25,760 Speaker 1: that's exactly the point. You weigh on uncertainty, you weigh 95 00:06:25,760 --> 00:06:28,279 Speaker 1: on investment, and ultimately that drags down the economy. But 96 00:06:28,320 --> 00:06:31,200 Speaker 1: this is really important, Dr Guria, with Lawrence Spoon in 97 00:06:31,320 --> 00:06:33,560 Speaker 1: your team at O E c D in Paris, what 98 00:06:33,720 --> 00:06:36,320 Speaker 1: is the state of the fat tail right now? What 99 00:06:36,520 --> 00:06:39,880 Speaker 1: is our financial stability? What is our ability to withstand 100 00:06:39,960 --> 00:06:42,920 Speaker 1: a set of shocks or even one shock that could 101 00:06:43,000 --> 00:06:50,520 Speaker 1: be out there. As they said before, today the banks 102 00:06:51,160 --> 00:06:55,320 Speaker 1: are much more strongly capitalized, and they've been capitalized and 103 00:06:55,320 --> 00:06:58,240 Speaker 1: they were from seven to ten times more than they 104 00:06:58,240 --> 00:07:02,760 Speaker 1: were before the crisis, and they're better regulated, they're better supervisor, 105 00:07:02,839 --> 00:07:05,960 Speaker 1: all these stress tests that are constantly being made, and 106 00:07:06,360 --> 00:07:10,920 Speaker 1: at the same time, the world is uh, you know, 107 00:07:11,800 --> 00:07:15,880 Speaker 1: better prepared to deal with the bad news. What we're 108 00:07:16,000 --> 00:07:19,640 Speaker 1: very bad at is dealing with surprises. And what I 109 00:07:19,680 --> 00:07:23,680 Speaker 1: see here is that some bad news in the offing. 110 00:07:23,960 --> 00:07:27,320 Speaker 1: I do not see very many you know, out of 111 00:07:27,320 --> 00:07:30,640 Speaker 1: the blue surprises happening in the world economy that could really, 112 00:07:31,240 --> 00:07:36,200 Speaker 1: you know, cause a negative growth recession as has been suggested. 113 00:07:36,280 --> 00:07:40,200 Speaker 1: I do not see a recession in the horizon. And 114 00:07:40,320 --> 00:07:43,000 Speaker 1: Mr Grea, how much do you worry about this, this 115 00:07:43,080 --> 00:07:47,000 Speaker 1: war of words between France and it Is it going 116 00:07:47,040 --> 00:07:49,800 Speaker 1: to hurt investment? And is it really a kind of 117 00:07:50,000 --> 00:07:53,440 Speaker 1: you know, difficult moment for Europe that's crystallized just with 118 00:07:53,480 --> 00:08:02,960 Speaker 1: this listen. Wars uh, unless they are the war against 119 00:08:03,280 --> 00:08:08,400 Speaker 1: hunger or the war against the ignorance or you know 120 00:08:08,480 --> 00:08:13,000 Speaker 1: that the wars are bad and even wars of words 121 00:08:13,080 --> 00:08:16,840 Speaker 1: are bad. But I have to say, if there's gonna 122 00:08:16,880 --> 00:08:20,520 Speaker 1: be a war. Better be of words rather than of 123 00:08:20,600 --> 00:08:24,920 Speaker 1: the alternatives. So I would say at this stage there 124 00:08:24,920 --> 00:08:29,400 Speaker 1: are issues that have to be addressed between Italy and 125 00:08:29,600 --> 00:08:34,679 Speaker 1: uh France. There's a new government in Italy, it's installing itself, 126 00:08:35,160 --> 00:08:38,440 Speaker 1: is trying to find its place, it's space, it's dealing 127 00:08:38,440 --> 00:08:42,280 Speaker 1: with the European Union and at the same time, now 128 00:08:42,360 --> 00:08:47,079 Speaker 1: this confrontation with France is very unfortunate for the atmosphere 129 00:08:47,960 --> 00:08:51,400 Speaker 1: around Europe. But I'm sure the wisdom of the two 130 00:08:51,440 --> 00:08:55,240 Speaker 1: countries is going to find a way out. This has 131 00:08:55,280 --> 00:08:57,480 Speaker 1: been wonderful and hill Garia, thank you so much from 132 00:08:57,520 --> 00:09:00,319 Speaker 1: Dubie this morning and Catherine Man in London as well, 133 00:09:00,360 --> 00:09:03,040 Speaker 1: the former Chief econs for Dr Guria at the O 134 00:09:03,160 --> 00:09:19,839 Speaker 1: E c D. Here, Buns, is what you and I 135 00:09:19,880 --> 00:09:23,280 Speaker 1: have been watching since Davos point one zero seven point 136 00:09:23,280 --> 00:09:25,200 Speaker 1: oh nine. You know it's below point one zero, I 137 00:09:25,280 --> 00:09:28,160 Speaker 1: get it. But the disinflation is out, there's tangible. Why 138 00:09:28,200 --> 00:09:31,199 Speaker 1: don't you bring in doctor Man, who's who's really fabulous 139 00:09:31,240 --> 00:09:35,360 Speaker 1: on this continental disinflation joining us from London, formerly the 140 00:09:35,480 --> 00:09:37,800 Speaker 1: Chief economist of the O E c D and currently 141 00:09:37,840 --> 00:09:41,520 Speaker 1: the City Group Global Chief Economist. Good morning to Catherine 142 00:09:41,559 --> 00:09:44,760 Speaker 1: we are pricing out global growth, and we are seemingly 143 00:09:44,800 --> 00:09:47,920 Speaker 1: pricing down inflation expectations as well. Have your thoughts on 144 00:09:47,960 --> 00:09:51,320 Speaker 1: that well, I mean, you know, if if growth comes 145 00:09:51,320 --> 00:09:54,960 Speaker 1: in dramatically slower, then then you would expect inflation to 146 00:09:55,240 --> 00:09:57,800 Speaker 1: UH to also come in slower as well. But I 147 00:09:57,840 --> 00:10:00,600 Speaker 1: do think that we we have to remember that the 148 00:10:00,720 --> 00:10:04,959 Speaker 1: domestic economies UH in the form of tight labor markets. 149 00:10:04,960 --> 00:10:07,480 Speaker 1: This is true for the United States and Spades. It's 150 00:10:07,520 --> 00:10:10,680 Speaker 1: also true in Europe. Many of those economies have tight 151 00:10:10,760 --> 00:10:14,319 Speaker 1: labor markets. They do have resilient consumption, and we are 152 00:10:14,400 --> 00:10:17,680 Speaker 1: seeing wages rise both in the US and in Europe 153 00:10:17,920 --> 00:10:20,800 Speaker 1: and and even in Japan, and so UH, you know 154 00:10:20,840 --> 00:10:23,440 Speaker 1: what you have there, If you have nominal wages rising 155 00:10:23,520 --> 00:10:26,680 Speaker 1: and you have prices not coming through with any top 156 00:10:26,720 --> 00:10:30,240 Speaker 1: line inflation, then you get real wage increases and that's 157 00:10:30,240 --> 00:10:33,040 Speaker 1: actually pretty good for the workers. So from a market's perspective, 158 00:10:33,080 --> 00:10:34,640 Speaker 1: cancer and I'm always trying to work out where the 159 00:10:34,640 --> 00:10:37,280 Speaker 1: element of surprise might come from. Whereas the boat to 160 00:10:37,520 --> 00:10:39,880 Speaker 1: stack to the one side, so to speak, do you 161 00:10:39,920 --> 00:10:42,160 Speaker 1: think some people have gravitated too much that the one 162 00:10:42,200 --> 00:10:45,000 Speaker 1: side of the boat calling for lower growth pricing out 163 00:10:45,040 --> 00:10:47,640 Speaker 1: inflation in an economy here in America where things still 164 00:10:47,640 --> 00:10:50,160 Speaker 1: look pretty good. Yeah, well, I think you know the 165 00:10:50,200 --> 00:10:51,840 Speaker 1: issue is is that we've got, as I say, this 166 00:10:51,880 --> 00:10:55,240 Speaker 1: domestic resilience that comes from very strong labor markets, but 167 00:10:55,320 --> 00:10:59,360 Speaker 1: we have there's undeniable trade trade headwinds UM and the 168 00:10:59,400 --> 00:11:03,600 Speaker 1: real question is can those trade headwinds be be uh dampened, 169 00:11:03,720 --> 00:11:08,800 Speaker 1: be resolved before there's permanent damage to UM investor psyche 170 00:11:09,080 --> 00:11:11,880 Speaker 1: and and following through that to to consumers as well. 171 00:11:11,920 --> 00:11:14,520 Speaker 1: I mean, I think that there's still time, there's still 172 00:11:14,559 --> 00:11:18,800 Speaker 1: time to get resolution UH, to revive trade UH and 173 00:11:18,880 --> 00:11:21,280 Speaker 1: to to to support global growth. But but you know 174 00:11:21,320 --> 00:11:23,680 Speaker 1: the time it's running out for that. What you're saying, 175 00:11:23,840 --> 00:11:26,680 Speaker 1: what Richard Clarida is saying, John Ferrey had mentioned Steve 176 00:11:26,679 --> 00:11:29,959 Speaker 1: Stanley Damer's Pierre Put among others, is there's a two 177 00:11:30,040 --> 00:11:35,240 Speaker 1: part GDP calculation. One is a domestic resiliency and the 178 00:11:35,320 --> 00:11:39,960 Speaker 1: others all this international noise. What's our history of escaping 179 00:11:40,000 --> 00:11:45,600 Speaker 1: the international noise too? Is Clarata would say a solid outcome. Well, 180 00:11:45,640 --> 00:11:49,040 Speaker 1: the US has more is a is a larger economy, 181 00:11:49,040 --> 00:11:52,600 Speaker 1: it's a more closed economy, and so it is UH 182 00:11:52,760 --> 00:11:57,120 Speaker 1: less buffeted by the external environment, but as compared to 183 00:11:57,160 --> 00:12:01,839 Speaker 1: for example, the European economies or or Japan. Um. But 184 00:12:02,000 --> 00:12:04,280 Speaker 1: you know, it's it's not a good idea to be 185 00:12:04,320 --> 00:12:07,640 Speaker 1: complacent and to say that there's no feedback loop from 186 00:12:07,640 --> 00:12:10,040 Speaker 1: a slowing global economy back to the U S. That's 187 00:12:10,080 --> 00:12:13,080 Speaker 1: that's a complacency to say that the US is a 188 00:12:13,080 --> 00:12:16,520 Speaker 1: closed economy and can whether the weather, the trade storms. 189 00:12:16,520 --> 00:12:20,960 Speaker 1: It can't because, um, a lot of US companies are 190 00:12:21,120 --> 00:12:25,360 Speaker 1: outwardly uh, you know, they're out little outwardly engaged. Uh. 191 00:12:25,400 --> 00:12:27,880 Speaker 1: They get a lot of profits and sales from the 192 00:12:27,920 --> 00:12:31,000 Speaker 1: foreign marketplace. And so if the global economy is not 193 00:12:31,120 --> 00:12:33,640 Speaker 1: doing well, those companies in the U S will not 194 00:12:33,720 --> 00:12:35,520 Speaker 1: do well. Those are the companies that are part of 195 00:12:35,520 --> 00:12:37,760 Speaker 1: the S and P and part of the uh, you know, 196 00:12:37,840 --> 00:12:42,199 Speaker 1: the Dow. And so you'll have financial markets reacting to 197 00:12:42,480 --> 00:12:46,040 Speaker 1: a slowdown in the global markets, even if part of 198 00:12:46,080 --> 00:12:48,360 Speaker 1: the US is still very strong. So you get a 199 00:12:48,440 --> 00:12:53,760 Speaker 1: financial market situation where that turbulence on Wall Street reflecting 200 00:12:53,760 --> 00:12:57,640 Speaker 1: global slowdown in the trade war that feeds into the 201 00:12:57,679 --> 00:13:00,520 Speaker 1: domestic economy. You can't say you can't complete we escape 202 00:13:00,559 --> 00:13:02,839 Speaker 1: that even in a closed economy, like the US. So, Catherine, 203 00:13:02,880 --> 00:13:05,320 Speaker 1: to your point, the mechanism for the feedback loop is 204 00:13:05,360 --> 00:13:08,439 Speaker 1: financial markets. How important is the f X channel with 205 00:13:08,480 --> 00:13:11,200 Speaker 1: the dollars showing some renewed strength of the last week 206 00:13:11,280 --> 00:13:14,760 Speaker 1: or so, well, so the you know, when we think 207 00:13:14,800 --> 00:13:17,920 Speaker 1: about the challenges of the dollar strength, the the issue 208 00:13:17,960 --> 00:13:22,720 Speaker 1: there becomes, um, how are emerging markets in particular, but 209 00:13:23,240 --> 00:13:26,600 Speaker 1: markets in general going to be able to handle debt 210 00:13:26,640 --> 00:13:30,160 Speaker 1: service debt, service of dollar denominated debt, because of course 211 00:13:30,160 --> 00:13:33,240 Speaker 1: he gets more expensive to service that dollar denominated debt. 212 00:13:33,320 --> 00:13:35,760 Speaker 1: And if they're servicing the debt, then then they're not 213 00:13:35,800 --> 00:13:38,840 Speaker 1: going to be able to be supporting their own growth. 214 00:13:39,240 --> 00:13:43,120 Speaker 1: And uh so that is a further headwind for a 215 00:13:43,200 --> 00:13:46,439 Speaker 1: number of the economies around the world, doctor Man. If 216 00:13:46,440 --> 00:13:50,160 Speaker 1: we could move over to the domestic economy and something 217 00:13:50,480 --> 00:13:52,800 Speaker 1: you know, we mentioned this on television really this morning, 218 00:13:53,360 --> 00:13:56,560 Speaker 1: which is scale. Every time a corporate officer brings up 219 00:13:56,600 --> 00:13:59,839 Speaker 1: the phrase scale, I think of Katherine Man, folks, and 220 00:14:00,040 --> 00:14:02,360 Speaker 1: you're you don't mince any words, doctor Man. You say, 221 00:14:02,360 --> 00:14:05,240 Speaker 1: it's not the more the monopoly. Are we heading towards 222 00:14:05,280 --> 00:14:09,480 Speaker 1: monopolistic tendencies? I think it's it's a little premature to 223 00:14:09,480 --> 00:14:12,520 Speaker 1: say that we're headed towards monopolists in tendencies. But but 224 00:14:12,600 --> 00:14:14,480 Speaker 1: I do think that there's been a lot of mergers 225 00:14:14,480 --> 00:14:18,120 Speaker 1: and acquisitions UM in the over the last ten years, 226 00:14:18,160 --> 00:14:21,560 Speaker 1: when when funding was cheap and stock market was high, 227 00:14:21,640 --> 00:14:24,720 Speaker 1: and you know that. And it's not just an Amazon effect. 228 00:14:24,760 --> 00:14:28,400 Speaker 1: It's also think about it in in the intermediate space, 229 00:14:28,480 --> 00:14:32,520 Speaker 1: whether it be chemicals, whether it be um you know, uh, 230 00:14:33,280 --> 00:14:36,960 Speaker 1: agricultural space, but also in some top line spaces for example, 231 00:14:37,040 --> 00:14:41,880 Speaker 1: you know hotels news. You've correctly state this is about scale, 232 00:14:42,360 --> 00:14:45,080 Speaker 1: which always ends up being a lower labor a lower 233 00:14:45,160 --> 00:14:49,200 Speaker 1: labor component. Well, so, yeah, because what happened is, I say, 234 00:14:49,240 --> 00:14:51,400 Speaker 1: the research we used to worry about scale, and we 235 00:14:51,480 --> 00:14:54,160 Speaker 1: used to worry about monopolies because we thought, well, you'd 236 00:14:54,160 --> 00:14:57,040 Speaker 1: become a monopolist and then you raise your prices. But 237 00:14:57,160 --> 00:15:00,400 Speaker 1: these days the research is much more clear that rather 238 00:15:00,480 --> 00:15:04,800 Speaker 1: than raise prices, the the consequence of of of scale, 239 00:15:05,360 --> 00:15:08,239 Speaker 1: consequence of of not maybe not scale, but the consequences 240 00:15:08,360 --> 00:15:13,080 Speaker 1: of of less competition, uh is the burden is on 241 00:15:13,120 --> 00:15:16,880 Speaker 1: workers because they can't change jobs to get to get 242 00:15:16,960 --> 00:15:20,760 Speaker 1: higher wages. So the wage compression is the consequence of 243 00:15:21,400 --> 00:15:24,640 Speaker 1: less competition. Catherine Grant to catch on with you. You You 244 00:15:24,720 --> 00:15:27,320 Speaker 1: want to us from London today, formerly the Chief Economist 245 00:15:27,320 --> 00:15:29,280 Speaker 1: of the O E C D and now the City 246 00:15:29,280 --> 00:15:46,880 Speaker 1: Group Global Chief Economist. Joining us now the Panada. Gary 247 00:15:46,960 --> 00:15:49,840 Speaker 1: Shilling joins us of Ammer's College or he does the 248 00:15:49,880 --> 00:15:53,040 Speaker 1: physics of economics, Dr Shilling, I want to look back 249 00:15:53,080 --> 00:15:56,200 Speaker 1: at your great call of lower interest rates, persistent interest 250 00:15:56,280 --> 00:16:00,160 Speaker 1: rates and the chorus quarter to quarter, he's wrong, he's wrong, 251 00:16:00,440 --> 00:16:03,760 Speaker 1: he's wrong, He's wrong. What are the inflation East? Does 252 00:16:03,880 --> 00:16:06,720 Speaker 1: most get wrong in their call? How did they don't 253 00:16:06,760 --> 00:16:09,200 Speaker 1: give me Paul Krugman one on one, get me Gary 254 00:16:09,280 --> 00:16:12,200 Speaker 1: Shilling one oh one on what the inflation East has 255 00:16:12,240 --> 00:16:16,240 Speaker 1: got wrong? They simply failed to recognize that the world 256 00:16:16,280 --> 00:16:19,920 Speaker 1: has got too much supply relative to demand. When you 257 00:16:19,920 --> 00:16:24,000 Speaker 1: have excess to supply relative to demand, prices go down. 258 00:16:24,640 --> 00:16:27,520 Speaker 1: And the problem was that in the sixties you had 259 00:16:27,560 --> 00:16:30,680 Speaker 1: the opposite with Vietnam and great society on top of 260 00:16:30,720 --> 00:16:34,720 Speaker 1: a fully employed economy. Excess demand prices went up, and 261 00:16:34,760 --> 00:16:36,600 Speaker 1: a lot of people thought that that's the way God 262 00:16:36,680 --> 00:16:39,560 Speaker 1: made the world and didn't realize that things really changed 263 00:16:39,640 --> 00:16:42,680 Speaker 1: or remarkably in the early eighties. I mentioned day Will 264 00:16:42,720 --> 00:16:45,600 Speaker 1: bernanke on Friday, chapter seven or whatever, is the one 265 00:16:45,640 --> 00:16:48,920 Speaker 1: little talk on anset prices within the comparison of now 266 00:16:49,120 --> 00:16:53,680 Speaker 1: versus the sixties. Back then we had a credit expansion 267 00:16:53,960 --> 00:16:57,000 Speaker 1: coming out of World War Two that boosted that demand. 268 00:16:57,720 --> 00:17:02,280 Speaker 1: Now we've got a debt expand in our spy side, 269 00:17:02,280 --> 00:17:05,720 Speaker 1: lower prices. What does that large debt end up doing 270 00:17:06,320 --> 00:17:09,040 Speaker 1: to the responsiveness of our listeners to the times that 271 00:17:09,480 --> 00:17:11,800 Speaker 1: it's deflation? Are you think about it when when debt 272 00:17:11,880 --> 00:17:15,760 Speaker 1: was of course, you know, this is the time folks 273 00:17:15,840 --> 00:17:19,439 Speaker 1: to mention Gary Shilling's classic book, Deflation. John, it's the 274 00:17:19,480 --> 00:17:24,080 Speaker 1: paperback with two blue collars. That Bill we literally paid 275 00:17:24,240 --> 00:17:28,480 Speaker 1: vet Bill's vet bill for a year with the royalties off. 276 00:17:29,040 --> 00:17:33,359 Speaker 1: You're my agent there, top. No. No, The reality is 277 00:17:33,400 --> 00:17:37,200 Speaker 1: that that you have an entirely different, different situation and 278 00:17:37,200 --> 00:17:39,760 Speaker 1: and uh, you know, I think people have simply failed 279 00:17:39,840 --> 00:17:43,959 Speaker 1: to realize. Said that again, a globalized economy is very, 280 00:17:44,040 --> 00:17:47,879 Speaker 1: very different. And and when you have a big debt load, 281 00:17:48,359 --> 00:17:52,240 Speaker 1: it obviously running up a debt means you've got more demand. 282 00:17:52,320 --> 00:17:55,960 Speaker 1: I mean even even you know, we've had disinflation, even 283 00:17:56,080 --> 00:18:00,240 Speaker 1: with the huge run up in debt globally and now 284 00:18:00,280 --> 00:18:02,320 Speaker 1: you're getting the point you say, how far can this go? 285 00:18:02,480 --> 00:18:04,679 Speaker 1: Now there's you know, nobody put in a number and 286 00:18:04,680 --> 00:18:06,880 Speaker 1: said this as far as that can go. And then 287 00:18:06,920 --> 00:18:09,520 Speaker 1: it's got to collapse where you certainly feel that you're 288 00:18:09,560 --> 00:18:11,399 Speaker 1: closer to the top and you are of the bottom. 289 00:18:12,240 --> 00:18:14,080 Speaker 1: And when you start to when you start to see 290 00:18:14,119 --> 00:18:19,000 Speaker 1: the debt contraction, obviously, that's very deflationary. A number of 291 00:18:19,040 --> 00:18:21,480 Speaker 1: years ago, Gary, we talked about the concept of the 292 00:18:21,560 --> 00:18:25,400 Speaker 1: Japanification of the German bond market. I've heard that phrase 293 00:18:25,640 --> 00:18:28,359 Speaker 1: increasingly over the last week. Once again, is that what 294 00:18:28,440 --> 00:18:32,400 Speaker 1: we face here, the Japanification of core government bond markets 295 00:18:32,400 --> 00:18:36,080 Speaker 1: in places like Germany. Well, you certainly would think so. 296 00:18:36,119 --> 00:18:39,040 Speaker 1: I mean, Germany obviously is a has a very strong 297 00:18:39,080 --> 00:18:43,880 Speaker 1: export economy. They have a very u show say, restrained 298 00:18:43,960 --> 00:18:46,760 Speaker 1: view of the world. You look at the average German investor, 299 00:18:46,800 --> 00:18:49,320 Speaker 1: they got more bonds and stocks. You know, stocks are 300 00:18:49,359 --> 00:18:52,040 Speaker 1: for speculators as far as they're concerned. So you have 301 00:18:52,119 --> 00:18:54,600 Speaker 1: a you have a very different attitude there. But but 302 00:18:54,840 --> 00:18:59,520 Speaker 1: with their with all these self reinforcing deflationary forces in 303 00:18:59,520 --> 00:19:01,440 Speaker 1: in germ me, I mean very you know, they're running 304 00:19:01,440 --> 00:19:05,679 Speaker 1: a government surplus. Uh, the huge exports. Uh, they're now 305 00:19:05,720 --> 00:19:10,080 Speaker 1: getting squeeze obviously with a slowing global economy. But you 306 00:19:10,119 --> 00:19:11,720 Speaker 1: have the same kind of and this is this is 307 00:19:11,720 --> 00:19:14,000 Speaker 1: true globally. I mean when you look at the you 308 00:19:14,040 --> 00:19:17,520 Speaker 1: look at the demographics. Uh yeah, I think productivity is 309 00:19:17,560 --> 00:19:19,520 Speaker 1: going to come back. I think that that you do. 310 00:19:19,640 --> 00:19:22,480 Speaker 1: What's what's the countless for that? Garty? Well, new technologies. 311 00:19:22,680 --> 00:19:24,640 Speaker 1: The thing is that they have to get big enough 312 00:19:24,680 --> 00:19:27,840 Speaker 1: to really move the needle. You look at the Indultal Revolution. 313 00:19:27,880 --> 00:19:31,280 Speaker 1: It started in your country, England and New England in 314 00:19:31,280 --> 00:19:34,040 Speaker 1: the late seventeen hundreds, but it wasn't big enough until 315 00:19:34,080 --> 00:19:36,480 Speaker 1: after the Civil War the second half of nineteenth century 316 00:19:36,720 --> 00:19:38,560 Speaker 1: in this country to move a needle. The same with 317 00:19:38,640 --> 00:19:43,040 Speaker 1: true of railroads. And I think now you have you know, biotech, robotics. 318 00:19:43,200 --> 00:19:46,800 Speaker 1: Uh okay, but Gary, let's go let's go physics here. 319 00:19:47,200 --> 00:19:53,439 Speaker 1: The idea of mainline economists is the distribution of that productivity, 320 00:19:53,520 --> 00:19:57,800 Speaker 1: the distribution of that better economy is evenly divided across 321 00:19:57,840 --> 00:20:02,120 Speaker 1: some form of Gaussian or Bell of Space Bologny. It's 322 00:20:02,119 --> 00:20:05,959 Speaker 1: a bimodal America. John Edwards is right, it's two Americas. 323 00:20:06,200 --> 00:20:09,920 Speaker 1: What portion of all these good gains are driving to 324 00:20:10,040 --> 00:20:13,600 Speaker 1: the halves in this guilded age. Well are obviously they're 325 00:20:13,640 --> 00:20:16,080 Speaker 1: obviously going to the topic. But but when you have 326 00:20:16,200 --> 00:20:20,440 Speaker 1: strong economic growth, you always get income polarization. That's that's 327 00:20:20,480 --> 00:20:23,679 Speaker 1: simply here. I don't disagree, but we're looking for some 328 00:20:23,720 --> 00:20:25,280 Speaker 1: of the people. Look at this. Where are some of 329 00:20:25,320 --> 00:20:27,480 Speaker 1: the richest people in the world. They're in China, they're 330 00:20:27,520 --> 00:20:30,680 Speaker 1: in India. I mean except for Jeff Bezos. I mean, 331 00:20:30,920 --> 00:20:33,200 Speaker 1: I mean that's what when you when you get growth, 332 00:20:33,280 --> 00:20:37,399 Speaker 1: you get huge disparity. And obviously, uh, you know in 333 00:20:37,400 --> 00:20:39,879 Speaker 1: the country like this where we're not happy with that. 334 00:20:40,640 --> 00:20:42,880 Speaker 1: You gotta wait for things to give me a legit calm, 335 00:20:42,920 --> 00:20:46,159 Speaker 1: a thirty year bond, how low can that you'll go to? Oh, 336 00:20:46,280 --> 00:20:54,440 Speaker 1: come on one? One hundred basis points and I think 337 00:20:54,480 --> 00:20:56,480 Speaker 1: ten years going to go to one point? Why? Why? 338 00:20:56,520 --> 00:20:58,600 Speaker 1: Because I think I think we're gonna I think we're 339 00:20:58,720 --> 00:21:01,400 Speaker 1: entering a recession. We're gonna have a recession, and that's 340 00:21:01,400 --> 00:21:07,120 Speaker 1: going to be the final leg down in what recession? 341 00:21:07,560 --> 00:21:09,840 Speaker 1: You are so gloomy on a Monday and take a 342 00:21:09,920 --> 00:21:14,760 Speaker 1: note only book showing on Wednesday, okay, Gary showing thank you? 343 00:21:16,400 --> 00:21:19,440 Speaker 1: And John I put out his book on Twitter, just 344 00:21:19,520 --> 00:21:22,520 Speaker 1: you know, to keep that it's it's a very nice blue. 345 00:21:22,560 --> 00:21:27,840 Speaker 1: We still have a selected copies we can paint for this. 346 00:21:43,640 --> 00:21:46,680 Speaker 1: We product the copyright of all of our guests. You 347 00:21:46,760 --> 00:21:50,440 Speaker 1: want High Tongue Research. It's out of Shanghai in London 348 00:21:50,840 --> 00:21:53,879 Speaker 1: and it is absolutely lights up brilliant. Why don't you 349 00:21:53,880 --> 00:21:57,040 Speaker 1: bring in our next guests because everybody's flying around on 350 00:21:57,119 --> 00:22:00,719 Speaker 1: airplanes posturing and I don't buy for a minute. Un 351 00:22:01,000 --> 00:22:03,800 Speaker 1: On Miranda car joining us now High Tongue International China 352 00:22:04,240 --> 00:22:07,560 Speaker 1: macro strategist Miranda, what can we achieve this week as 353 00:22:07,600 --> 00:22:12,240 Speaker 1: Ambassador light Hiser and Secretary Manuchin head over to Beijing, Well, 354 00:22:12,280 --> 00:22:13,879 Speaker 1: the best that can be hoped for is that the 355 00:22:13,920 --> 00:22:17,520 Speaker 1: talks continue um. I don't think anyone's expecting a final 356 00:22:17,560 --> 00:22:21,200 Speaker 1: deal and hence why the from she Um summit was postponed. 357 00:22:21,800 --> 00:22:24,639 Speaker 1: But if we can get the best it can be 358 00:22:24,680 --> 00:22:28,680 Speaker 1: hoped for is the negotiations can continue m The new 359 00:22:28,720 --> 00:22:31,960 Speaker 1: tariffs aren't imposed on the first of March, and basically 360 00:22:32,000 --> 00:22:34,800 Speaker 1: they then continue over the next few months to get 361 00:22:34,880 --> 00:22:37,600 Speaker 1: some kind of deal in place, which can you know, 362 00:22:38,119 --> 00:22:41,920 Speaker 1: Trump and She can sign off on. But no big 363 00:22:42,440 --> 00:22:46,480 Speaker 1: announcements this week. We think it's still going to be talking, Miranda. 364 00:22:46,520 --> 00:22:48,560 Speaker 1: We keep talking about the clock is ticking. The clock 365 00:22:48,640 --> 00:22:51,159 Speaker 1: is ticking down to the March first deadline. Do you 366 00:22:51,200 --> 00:22:54,440 Speaker 1: consider that deadline a hard deadline, a line in the sand? 367 00:22:54,480 --> 00:22:58,400 Speaker 1: What is it? Well, if they can just in some ways, 368 00:22:58,400 --> 00:22:59,959 Speaker 1: it is a hard deadline. But the thing is they 369 00:23:00,000 --> 00:23:02,000 Speaker 1: can just push, they can keep the talks going. They 370 00:23:02,000 --> 00:23:04,760 Speaker 1: can say we'll have another stay of execution. Well we'll 371 00:23:04,800 --> 00:23:08,040 Speaker 1: talk for another three months. There's been significant progress on 372 00:23:08,080 --> 00:23:11,280 Speaker 1: the Chinese side, um in terms of trying to trying 373 00:23:11,280 --> 00:23:13,800 Speaker 1: to address some of the US concerns. But you know, 374 00:23:14,560 --> 00:23:16,880 Speaker 1: you still don't have verification, you still don't have the 375 00:23:16,920 --> 00:23:20,159 Speaker 1: systems of guarantees. You need a long term framework, and 376 00:23:20,200 --> 00:23:23,040 Speaker 1: that's gonna that's not gonna happen by the first of March. UM. 377 00:23:23,119 --> 00:23:26,040 Speaker 1: So as long as they don't agree not to raise 378 00:23:26,119 --> 00:23:29,760 Speaker 1: taffs further, that's probably the best outcome we can hope for. Well, 379 00:23:29,760 --> 00:23:31,760 Speaker 1: it's the best outcome we can hope for. What's the 380 00:23:31,800 --> 00:23:35,040 Speaker 1: best outcome China can hope for. It to be clear here, Miranda, 381 00:23:35,280 --> 00:23:37,520 Speaker 1: China really wants to get a deal done. Let's start 382 00:23:37,520 --> 00:23:41,760 Speaker 1: with first principles. Why does China need a deal, Well, 383 00:23:42,280 --> 00:23:44,320 Speaker 1: it's the one that's being hurt. I mean that you're 384 00:23:44,359 --> 00:23:47,520 Speaker 1: you're seeing the slowdown now coming through the Q four 385 00:23:47,760 --> 00:23:51,679 Speaker 1: exports were still strong, but now we're getting um signs 386 00:23:51,680 --> 00:23:54,400 Speaker 1: of the weakness in the trade actually coming through into 387 00:23:54,440 --> 00:23:57,600 Speaker 1: the figures, and you're you're you're getting the even the 388 00:23:57,640 --> 00:24:01,680 Speaker 1: state media guiding down to six percent growth for Q 389 00:24:01,880 --> 00:24:04,120 Speaker 1: one as a whole, so one of the worst performances 390 00:24:04,640 --> 00:24:08,760 Speaker 1: since since in the last ten years, um so so. 391 00:24:08,800 --> 00:24:12,320 Speaker 1: So they need the trade to pick up again, um 392 00:24:12,440 --> 00:24:14,600 Speaker 1: and and and to get investment back in the country 393 00:24:14,640 --> 00:24:17,720 Speaker 1: because it's it's it's going to be the Chinese economy 394 00:24:17,720 --> 00:24:19,720 Speaker 1: which will suffer. And at the moment, most of the 395 00:24:19,720 --> 00:24:21,760 Speaker 1: companies are saying, no, we can. We can cope with 396 00:24:21,800 --> 00:24:24,600 Speaker 1: the tariffs at the current levels temperature, it's not too bad. 397 00:24:24,960 --> 00:24:26,359 Speaker 1: We can sweep up a lot a lot of the 398 00:24:26,440 --> 00:24:29,359 Speaker 1: Q fours results. Comments have been saying we can cope 399 00:24:29,359 --> 00:24:32,040 Speaker 1: with this level. But if it gets to twenty five, 400 00:24:32,280 --> 00:24:35,160 Speaker 1: that's when that's when the pain would start. If you 401 00:24:35,240 --> 00:24:38,640 Speaker 1: put a g DP extrapolation on a move from ten 402 00:24:38,720 --> 00:24:41,640 Speaker 1: to twenty five, do they go from six point four 403 00:24:41,800 --> 00:24:46,200 Speaker 1: six point six down to x percent. Can you gauge that? Well? Yeah, 404 00:24:46,200 --> 00:24:49,239 Speaker 1: I mean but basically, if you had this on the 405 00:24:49,280 --> 00:24:52,600 Speaker 1: full UM two hundred and fifty and then you went 406 00:24:52,680 --> 00:24:55,240 Speaker 1: up to another you're talking about a GDP hit of 407 00:24:55,320 --> 00:24:58,760 Speaker 1: between one one percentage points to about one point one 408 00:24:58,800 --> 00:25:01,359 Speaker 1: point three at one point four. So it would take 409 00:25:02,000 --> 00:25:06,120 Speaker 1: China's GDP below below the target level for a two 410 00:25:06,160 --> 00:25:09,600 Speaker 1: thousand and two thousand and nineteen. And I think you 411 00:25:09,640 --> 00:25:13,640 Speaker 1: know this is why the China side is being very 412 00:25:13,680 --> 00:25:16,199 Speaker 1: accommodative in terms of trying to get trying to get 413 00:25:16,240 --> 00:25:18,440 Speaker 1: the deal sorted. But you know a lot of this 414 00:25:18,520 --> 00:25:22,320 Speaker 1: is long term structural change and you can't suddenly magic 415 00:25:22,400 --> 00:25:26,159 Speaker 1: that out and magic the trust of that out, you know, 416 00:25:26,440 --> 00:25:29,320 Speaker 1: just in just in a few weeks of negotiations and 417 00:25:29,359 --> 00:25:32,640 Speaker 1: anything that is a grade the American side of the negotiations, 418 00:25:32,680 --> 00:25:36,560 Speaker 1: Miranda wants some kind of enforcement mechanism. How accepting will 419 00:25:36,600 --> 00:25:39,920 Speaker 1: the Chinese be of what could be pushed forward as 420 00:25:39,920 --> 00:25:43,640 Speaker 1: an initiative from the U S side. Well, the thing 421 00:25:43,720 --> 00:25:49,040 Speaker 1: is is is you get a international framework potentially being introduced, 422 00:25:49,080 --> 00:25:53,119 Speaker 1: then that could be um that could be maybe agreed on. 423 00:25:53,560 --> 00:25:55,320 Speaker 1: But the trouble is if you if you're wanting to 424 00:25:55,359 --> 00:25:58,600 Speaker 1: get sort of US inspectors coming into the Chinese market, 425 00:25:58,880 --> 00:26:01,480 Speaker 1: Then it may seem as aference by you know, why 426 00:26:01,480 --> 00:26:04,880 Speaker 1: should the US interfere in the in the Chinese domestic markets? 427 00:26:05,000 --> 00:26:09,280 Speaker 1: Quite so so, anything which smacks of of you know, 428 00:26:10,160 --> 00:26:13,160 Speaker 1: having US rule in China, I think would be would 429 00:26:13,160 --> 00:26:15,679 Speaker 1: be very strongly resisted. I mean, China still trying to 430 00:26:16,520 --> 00:26:20,880 Speaker 1: international framework. Then it may, it may, it may work better. Well, 431 00:26:20,880 --> 00:26:23,000 Speaker 1: how does presidents she fit right now? Does he if 432 00:26:23,000 --> 00:26:25,320 Speaker 1: he if he goes to mar Lago, does he travel 433 00:26:25,400 --> 00:26:27,680 Speaker 1: to mar Lago the same president she is the first 434 00:26:27,720 --> 00:26:32,320 Speaker 1: time around? Or is the domestic calculus in China changed? Well? 435 00:26:32,359 --> 00:26:35,560 Speaker 1: I think yes, I mean the the idea of China 436 00:26:35,680 --> 00:26:39,760 Speaker 1: and the US going from you know, cooperation defining the 437 00:26:39,800 --> 00:26:44,400 Speaker 1: relationship much more competition UM. And yes, she's much more 438 00:26:45,400 --> 00:26:50,280 Speaker 1: about nervous about a lot of the UM. You know, 439 00:26:51,000 --> 00:26:54,320 Speaker 1: China needs to progress on on on the technology side, 440 00:26:54,840 --> 00:26:58,159 Speaker 1: but it's now getting into with the Fuawei and the UM, 441 00:26:58,640 --> 00:27:01,359 Speaker 1: the sort of I P and the national Okay, well 442 00:27:01,400 --> 00:27:03,520 Speaker 1: that let me let me interrupt this is critical. Do 443 00:27:03,560 --> 00:27:07,160 Speaker 1: you actually believe, Miranda car that the Huawei debate will 444 00:27:07,280 --> 00:27:12,360 Speaker 1: fold into the trade discussions. Is that just understood. Well, 445 00:27:12,720 --> 00:27:15,800 Speaker 1: it's difficult to separate the two because you part of 446 00:27:15,840 --> 00:27:20,439 Speaker 1: the pressure which the US is is highlighting is China 447 00:27:20,960 --> 00:27:24,399 Speaker 1: as a national security risk UM and that that's been 448 00:27:24,440 --> 00:27:29,160 Speaker 1: pushed forward in several reports in the US China Committee 449 00:27:29,320 --> 00:27:32,480 Speaker 1: and also in in in the Defense Review where it's 450 00:27:32,480 --> 00:27:36,720 Speaker 1: saying that manufacturing in China presents a national security threat 451 00:27:36,720 --> 00:27:40,159 Speaker 1: to the to the US. And so if you're in 452 00:27:40,160 --> 00:27:46,240 Speaker 1: a situation where you're you're trying to limit um exports 453 00:27:46,240 --> 00:27:49,960 Speaker 1: of Chinese goods, then of course on a national security ground, 454 00:27:50,280 --> 00:27:52,080 Speaker 1: then then that's going to form a part of the 455 00:27:52,880 --> 00:27:57,440 Speaker 1: dialogue as well. Inescapable, Miranda, how many how many? How 456 00:27:57,440 --> 00:27:59,320 Speaker 1: long have you been going to China? How long have 457 00:27:59,359 --> 00:28:02,480 Speaker 1: you been traveled into China since two thousand and seven 458 00:28:02,680 --> 00:28:06,439 Speaker 1: for two thous so you've enjoyed twelve years in China 459 00:28:06,520 --> 00:28:08,919 Speaker 1: as well. I got a problem, Miranda. I watched the 460 00:28:09,000 --> 00:28:12,480 Speaker 1: most wonderful movie in the world this weekend, My Favorite 461 00:28:12,520 --> 00:28:16,720 Speaker 1: Year with Peter O'Toole. It's a spectacular movie about nineteen 462 00:28:16,800 --> 00:28:19,560 Speaker 1: fifty four in New York City, and there's a scene 463 00:28:19,560 --> 00:28:22,400 Speaker 1: in the movie where the young kid goes all out 464 00:28:22,480 --> 00:28:27,120 Speaker 1: dim sum to to to uh to woo the girl 465 00:28:27,160 --> 00:28:31,680 Speaker 1: if you would, I mean, I mean, because Miranda is 466 00:28:31,680 --> 00:28:34,399 Speaker 1: an expert on dim sum? How many things do I 467 00:28:34,440 --> 00:28:36,600 Speaker 1: need to order when I ordered dim Sum? Do you 468 00:28:36,600 --> 00:28:39,400 Speaker 1: gotta go like he does in the movie? Like twenty things? 469 00:28:40,040 --> 00:28:45,560 Speaker 1: That many for for sheet to order from? Yeah, like 470 00:28:45,640 --> 00:28:49,400 Speaker 1: take out? If I do Chinese takeout dim sum in China, 471 00:28:49,560 --> 00:28:53,760 Speaker 1: they order like twenty things. Yes, what does that means? 472 00:28:53,760 --> 00:29:00,040 Speaker 1: You get nice sty um? I'm just getting hungry. I 473 00:29:00,440 --> 00:29:02,720 Speaker 1: just I gotta do this like tonight at a moment, 474 00:29:02,760 --> 00:29:05,200 Speaker 1: you know, when you're really talented, at at the end 475 00:29:05,240 --> 00:29:07,480 Speaker 1: of the interview, when you asked this really incisive question 476 00:29:07,520 --> 00:29:09,960 Speaker 1: with this massive build up, and then the guest takes 477 00:29:10,000 --> 00:29:13,239 Speaker 1: you seriously great and they pause, but they think, what 478 00:29:13,320 --> 00:29:16,440 Speaker 1: on earth do I say? Surely there's something that I 479 00:29:16,520 --> 00:29:20,000 Speaker 1: need A high tongue essay out of Shanghai and out 480 00:29:20,000 --> 00:29:23,120 Speaker 1: of Hong Kong, Cantonese and dim some food that would 481 00:29:23,160 --> 00:29:28,240 Speaker 1: be a huge value right now? Yeah, that would be well, 482 00:29:28,280 --> 00:29:36,000 Speaker 1: we'll try and do that PDF for Thank you so much, 483 00:29:36,200 --> 00:29:39,320 Speaker 1: greatly greatly. I will give you a dim someplace. Do 484 00:29:39,400 --> 00:29:41,240 Speaker 1: you have a town? I have one down to have 485 00:29:41,520 --> 00:29:43,240 Speaker 1: if you want it. I was in one once and 486 00:29:43,280 --> 00:29:46,280 Speaker 1: there was an animal on the wall. Animal was it 487 00:29:46,600 --> 00:29:50,680 Speaker 1: was fury? What animal was it? It was furry? What 488 00:29:50,720 --> 00:29:54,120 Speaker 1: does that mean? It was furry and it was just 489 00:29:54,680 --> 00:29:57,240 Speaker 1: you go downtown for dim some Yeah, I'll give you, 490 00:29:57,280 --> 00:30:01,440 Speaker 1: I'll give you a place. Yeah, it's a good one. 491 00:30:00,040 --> 00:30:10,680 Speaker 1: M Thanks for listening to the Bloomberg Surveillance podcast. Subscribe 492 00:30:10,800 --> 00:30:15,600 Speaker 1: and listen to interviews on Apple Podcasts, SoundCloud, or whichever 493 00:30:15,800 --> 00:30:19,760 Speaker 1: podcast platform you prefer. I'm on Twitter at Tom Keene 494 00:30:20,280 --> 00:30:23,960 Speaker 1: before the podcast. You can always catch us worldwide. I'm 495 00:30:24,000 --> 00:30:24,880 Speaker 1: Bloomberg Radio