Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. What
Speaker 1: we're about is good conversation. On on Friday, you have
Speaker 1: to sum up and get ready for next week. We've
Speaker 1: got a terrific team with us right now. Morse Read
Speaker 1: with us, John Norman with us as well, and now
Speaker 1: Anthony Gardner joins. He's a former United States Ambassador of
Speaker 1: the European Union. We are Thrilledi's with us. He speaks
Speaker 1: to six languages. I wish I could speak and he
Speaker 1: joins us this morning as well. What's the secret to
Speaker 1: learning five languages? What is the secret? Having an Italian
Speaker 1: mother helps? And you're having an Italian mother? Goes Okay,
Speaker 1: we can stop the show right now, move on Morris
Speaker 1: Streets segment. Okay, Anthony, we are here in Klaus Schwab
Speaker 1: in the World Economic Forum has decided we're having globalization
Speaker 1: four point oh. Has there been a shift in the
Speaker 1: concept of globalization in politics and in economics. Oh, I
Speaker 1: think there has been there's been a move in many countries,
Speaker 1: not on the States, but in Europe of of being
Speaker 1: inward looking and basically challenging the precepts of an open
Speaker 1: world trading system and a rules based multilateral order. That's
Speaker 1: what's now on the agenda began decide talks about the
Speaker 1: death of the liberal orders, define that define the Washington
Speaker 1: Consensus liberal order, and how it's changed. Well, certainly the
Speaker 1: importance of rules like the w t O, of the
Speaker 1: multilateral system, international law as a way to deal with disputes.
Speaker 1: And now one country after an they're not only the
Speaker 1: United States has invoked national security exemption, but others Russia
Speaker 1: and Saudi Arabia are now saying, once we invoke our
Speaker 1: own interests national security, otherwise rules don't apply. Judges can't
Speaker 1: rule on disputes. That undermines a lot of the basis
Speaker 1: for a free, open trading system. More so, are we
Speaker 1: less multilateral now than we were the pre Trump election? Yeah,
Speaker 1: we're much more personality driven, But there are opportunities and
Speaker 1: personality driven you know, situations if you look at some
Speaker 1: of the strong man that this is where well, at
Speaker 1: the beginning of the Trump administration. We advise our clients
Speaker 1: that if you really wanted to get close to him,
Speaker 1: you need to appeal to his ego. Right. That doesn't
Speaker 1: necessarily mean you're going to get everything you want, but
Speaker 1: having the seat at the table it's important, particularly when
Speaker 1: you're dealing with a guy that looks from his advantage
Speaker 1: points first. So are we less absolutely, But are there opportunities?
Speaker 1: For sure, there's opportunities. Okay, But but togatherings like Davos
Speaker 1: actually give ammunition to the populists. Well they might, indeed,
Speaker 1: But I think Dallas has tried to open up to
Speaker 1: just not the you know, not just the business community,
Speaker 1: but others NGOs. They've been doing it for a while
Speaker 1: and they're continuing to emphasize the importance of other stakeholders
Speaker 1: in the system. So they are opening up and listening.
Speaker 1: But Babbos wants the populace there as well. They want
Speaker 1: Donald Trump there. They wanted to ains and vict Urban
Speaker 1: because when you ignore them, this is how things fall apart.
Speaker 1: You have to engage. Well, if someone wants to go
Speaker 1: left for someone wants to go right, you still have
Speaker 1: to engage because there are always opportunities to make a
Speaker 1: deal and when people described to ignore him. This is
Speaker 1: why the Democrats are having a lot of problems. They're
Speaker 1: ignoring him instead of engaging him. They're getting emotional about
Speaker 1: him then looking strategically. When you look at opportunities and
Speaker 1: focus solely on that, you get things done. I think
Speaker 1: that's absolutely right. This is a very fine, difficult line
Speaker 1: for the Democrats and others to to to demand to
Speaker 1: manage how do we look and be tough and to
Speaker 1: engage with the European allies and and say to the
Speaker 1: Chinese you need to reform, but at the same time
Speaker 1: defend the system. It we built up together, right, and
Speaker 1: and the system has benefited us beyond any other country,
Speaker 1: but we're not making that case in a good way.
Speaker 1: Really important. This idea of be tough and the definition
Speaker 1: and be tough, and it's an honor to go to
Speaker 1: you Mores. I think of Ron Brown is a tough
Speaker 1: kid out of Harlem. He had some opportunities and then
Speaker 1: he landed at Middlebury College, the only black guy in
Speaker 1: Vermont from what I could tell at the time, and
Speaker 1: he learned along the way a pragmatic approach, which was
Speaker 1: the Ron Brown method. You've done the same thing and
Speaker 1: your career. Where did the pragmatic approach go to an
Speaker 1: America and shut down that won't even attend AVOs? Well,
Speaker 1: it started when people start to focus on personality, selfishness
Speaker 1: as well, personalities driven in politics instead of getting things
Speaker 1: done for people. Listen, well, we were in government, we
Speaker 1: did a lot of things. We didn't have to beat
Speaker 1: our chest about them. We got them done for the
Speaker 1: benefit of things. Now you have a situation where people
Speaker 1: are very focused on themselves first and ultimately where things go.
Speaker 1: But Morris, it also gets people to vote when they
Speaker 1: haven't voted in ten years. So Twitter, social media is
Speaker 1: a tool to get people to vote. This is very
Speaker 1: interesting and this is an interesting point. Hillary Clinton still
Speaker 1: got more votes than Donald Trump. This is what people
Speaker 1: keep forgetting right. The reason she lost is because she
Speaker 1: ran a populace campaign instead of electoral college campaign. So
Speaker 1: this whole thesis about being on Twitter and all these
Speaker 1: crazy things just because you're on Twitter and you have
Speaker 1: a lot of following Democratic candidates for two twenty learn
Speaker 1: anything from the election? Are you going to run for president?
Speaker 1: All everybody else is in They learn from Secretary Clinton's tobacco. No,
Speaker 1: of course, not what they're doing is going too far
Speaker 1: to the left. So you look at some of these
Speaker 1: younger rising stars where everyone's saying, we gotta be on Twitter,
Speaker 1: We've got to act like Trump. Now, how you win.
Speaker 1: You know how you won elections. You talk about issues
Speaker 1: that matter, You put together strategies that matter. And this
Speaker 1: is why the Democrats have to have a strategy in
Speaker 1: the House or they're gonna lose. I agree they look
Speaker 1: the asset test is are we making America stronger? Are
Speaker 1: we supporting the interests of our exporters, are farmers and
Speaker 1: our ranches and so forth? My view, my conclusion about
Speaker 1: the Trump tactics is no, we are not. I'm all
Speaker 1: four tactics at work. I'm all for opening up the
Speaker 1: Chinese market, bringing more cases w t O with our
Speaker 1: European allies. I I just think the American elector will
Speaker 1: have to ask the question, are these tactics working administration?
Speaker 1: This is why this is exactly why I believe it's
Speaker 1: going to be shut down for six months, because the
Speaker 1: very people that that you outline that this is supposed
Speaker 1: to help, it's hurting them. They haven't psychologically gotten there.
Speaker 1: It will take six months. Norman, give us the background
Speaker 1: here and take a green book I am f F
Speaker 1: approach on the global financial stability. Given his comment of
Speaker 1: a shutdown for six months and the tensions that the
Speaker 1: ambassadors speaks, do we have a system that can withstand this? Uh?
Speaker 1: It depends on the country, and it depends on the
Speaker 1: type of shock. I think what makes a lot of
Speaker 1: these discussions highly relevant from markets is every election is
Speaker 1: not just about policies, it's about the system itself. And
Speaker 1: so that's why you have this pricing and of team
Speaker 1: changes and actual regime changes which are coming through with
Speaker 1: Trump and also with with Brexit. These are things that
Speaker 1: we haven't seen in thirty or forty years in the
Speaker 1: global economy, and that's why you're getting tremendous repricings of
Speaker 1: markets around a lot of these events. John, what's relevant
Speaker 1: for markets and devils? So, so President Trump is not coming,
Speaker 1: No one from his administration is coming. The French president
Speaker 1: isn't coming. Three so May had to cancel it because
Speaker 1: she's negotiating a possible plan exit. Um, Tom's not going
Speaker 1: to move the markets. So what are you looking for? Well,
Speaker 1: my guess is the big stuff is happening off the slopes,
Speaker 1: meaning it matters what the US and China are gonna
Speaker 1: be saying to each other outside of Davos over the
Speaker 1: next few weeks leading up to this March. Personal banks,
Speaker 1: central banks, I think are acting in a uncoordinated fashion,
Speaker 1: but in the same direction. I mean, they're all turning dubbish.
Speaker 1: But not because they've gathered in one place and decided
Speaker 1: this is the right policy systemically. It's because it's the
Speaker 1: right policy for each individual economy. The choice we've got
Speaker 1: to go or we can extend this conversation three hours.
Speaker 1: If they want to make news, they should be focusing
Speaker 1: on who should be the head of the World Bank,
Speaker 1: and I should make sure it's a woman, and I
Speaker 1: don't matter, all right. Actually that's as they say, would
Speaker 1: you guys? Shut up? Tony Gardner from were you as
Speaker 1: a pastor to the you Morris Freed of Mercury Partners
Speaker 1: and John Norman of JP Morgan. Let's bring a Jude in.
Speaker 1: Emmanuel bt G, Chief Equities and derivative Strategist, Good morning
Speaker 1: to Julian. You're morning on the try story. Please. Well, look,
Speaker 1: so China is coming to Washington at the end of
Speaker 1: the month, So in our view, everything between now and
Speaker 1: then is probably just to and fro jockeying for position.
Speaker 1: The negotiations are going to happen, we expect at some
Speaker 1: point heading towards March, there's going to be favorable uh,
Speaker 1: not necessarily resolution, but certainly favorable news that's going to
Speaker 1: ease tensions in despite the denial. We've got a taste
Speaker 1: of what it would mean for the market, both in
Speaker 1: equity and foreign exchange, quite clearly positive for stocks and
Speaker 1: negative for the U. S. Dollar. To what degree do
Speaker 1: you think that the trade story can drive things sustainably
Speaker 1: through Well, it actually can be a very profound positive.
Speaker 1: The story of the fourth quarter of eighteen was one
Speaker 1: of just intense negativity, and clearly the frictions with China
Speaker 1: really did, you know, compound what we're already other items, um,
Speaker 1: including this whole idea that the global slowdown was certainly
Speaker 1: very much caused by these trade frictions. The disinflation story
Speaker 1: now literally you've gone from the glass half empty to
Speaker 1: the glass half full. People find themselves under invested, things
Speaker 1: look better, The FED is is really eased off, and
Speaker 1: we think that's a material positive. Good news is now
Speaker 1: starting to become good news, and we're seeing stocks respond accordingly,
Speaker 1: some people are pushing ban Julian. They say, whether a
Speaker 1: deal is sufficient to underpin sentiment in the long run,
Speaker 1: that remains questionable, because what we really need to see
Speaker 1: is the data are in China stabilize, And what we
Speaker 1: haven't seen so far is exactly that you can have
Speaker 1: the sentiment improve, but do you have the fundamentals improved simultaneously. Julian, Uh,
Speaker 1: there's no question about the fact that the data does
Speaker 1: need to improve in China. And obviously, you know, part
Speaker 1: of what we as global investors have to deal with
Speaker 1: is that there's always a bit of a view that
Speaker 1: the data is somewhat opaque in China. But if you
Speaker 1: look at how the last year has developed, it really
Speaker 1: has sort of trended in a classic way that global recessions,
Speaker 1: stock market tops and then ultimate recoveries off of stimulus
Speaker 1: tend to proceed. The question is is is China willing
Speaker 1: to do sort of whatever it takes stimulus wise to
Speaker 1: really move their economy forward. We think that ultimately is
Speaker 1: the year unfalls, the answer is likely to be yes. Well,
Speaker 1: the market is also making that conclusion. The market pricing
Speaker 1: increasingly for a stability story emerging in China and positioning
Speaker 1: for that as well. Juden, how do you convince people
Speaker 1: that this is more than just a relief rally for
Speaker 1: an ugly December. Well, truthfully, this is one of these times, John,
Speaker 1: where essentially, as investors, we are paid to invest, and
Speaker 1: the price action of the last three to four weeks
Speaker 1: is telling an investor that that conditions are better, certainly
Speaker 1: more favorable than was appeared at the end of the year.
Speaker 1: And essentially what we have, particularly after the SMP crossed
Speaker 1: through that level, is pressure to perform, which I might
Speaker 1: add is very rare this early in the year, and
Speaker 1: that's likely something that's going to cause momentum to continue
Speaker 1: to move forward. Julian, that's the international story that we
Speaker 1: spent the first five minutes of the program talking about.
Speaker 1: Let's talk about the domestic story in the United States.
Speaker 1: Is it the shutdown shaping the market story eventually or
Speaker 1: is the market shaping the shutdown? And the reason I
Speaker 1: asked this is we've seen several reports and a ton
Speaker 1: of speculation that the President is comfortable with the length
Speaker 1: of the shutdown and its impact on the U S
Speaker 1: economy just so long as the market holds up. So
Speaker 1: it's the shutdown going to hit the market or is
Speaker 1: the market essentially shaping the shutdown Julian, which one is it? Well,
Speaker 1: if you look at past shutdowns, they tend to have
Speaker 1: very little effect on the market. But what's potentially different
Speaker 1: this time is because the measures a sentiment, the confidence
Speaker 1: measures were so elevated for such a long time in
Speaker 1: and then along came the fourth quarter and those measures
Speaker 1: started to come off. You know, you're at a point where, yes,
Speaker 1: obviously people are under invested, Yes the economy looks better
Speaker 1: than everyone expected, but it's very important to keep confidence
Speaker 1: elevated really to keep economic activity sort of moving along.
Speaker 1: And in that respect, you know, obviously both the Republicans
Speaker 1: and the Democrats seem to not be carrying out the
Speaker 1: will of the people by keeping the government closed. We
Speaker 1: think ultimately that will resolve itself as well. But it
Speaker 1: really is one of those things where the disconnect between
Speaker 1: the government and and and the stock market should remain
Speaker 1: that way. And and we did a lot of work
Speaker 1: that shows that gridlock is not positive for markets. You
Speaker 1: just have this sent an extreme of the fourth quarter,
Speaker 1: and you're seeing a rally that makes sense whether there
Speaker 1: is or is not continue government shutdown, Julian. There is
Speaker 1: a belief that they fed as in a holding pattern
Speaker 1: until the market has sounded the old Claire. I think
Speaker 1: it's morphed into something a little bit more than that now, Julian,
Speaker 1: because I don't think we're gonna get a clean month
Speaker 1: of data for the US economy for several months now.
Speaker 1: I'll wait the Federal Reserve. Surely count think about moving
Speaker 1: without a clean month of economic data, or two or
Speaker 1: three for that matter, for the U s economy. No.
Speaker 1: And and look, if you look at the president's own economists,
Speaker 1: their estimates of how much the economy UH could slow
Speaker 1: based on the government shutdown are actually somewhat higher than
Speaker 1: private estimates. And in that regard, you know, we think
Speaker 1: the FED, we take the Chairman Powell at his word
Speaker 1: in that public appearance on January the fourth, we actually
Speaker 1: don't believe that there's going to be a rate hike
Speaker 1: UH this entire year. And actually, if we're wrong, we
Speaker 1: think that the economy will will surprise to the upside,
Speaker 1: not only in the US but globally as well. The
Speaker 1: FED saw what happened in the fourth quarter. The last
Speaker 1: thing they want to do is precipitate a recession. There
Speaker 1: sufficient geopolitical risk such that it makes even more sense
Speaker 1: to be patients. So Judy and the Federal Reserve is
Speaker 1: going to be more accommodative. And the final point I
Speaker 1: want to explore his whether Washington, d C. And the
Speaker 1: political story can also be accommodative. At the same time,
Speaker 1: we've had a massive towel wind for this market from
Speaker 1: the tax cut. There was some hope that the story
Speaker 1: would shift towards some kind of bipartisan push around infrastructure.
Speaker 1: Headlines just crops from Reuters saying that the Trump administration,
Speaker 1: together with Cabinat officials have discussed infrastructure. Is that a
Speaker 1: pipe during Julian Uh, Well, in in the current Washington climate,
Speaker 1: anything with the phrase bipartisan is probably somewhat excessively hopeful.
Speaker 1: That having been said, Uh, you know, as an incumbent,
Speaker 1: whether you're a Democrat or Republican, you're going to get
Speaker 1: to the middle of the year and you're going to
Speaker 1: see that the next election cycle is close at hand.
Speaker 1: So from that regard, you could have action moving towards
Speaker 1: infrastructure later in the year, particularly if the economy and
Speaker 1: the tax receipts hold up better. Than expected, such that
Speaker 1: the deficit doesn't continu new blowing out. Hey, Julian, loved
Speaker 1: the piece of research that just crossed across my desk
Speaker 1: from from my team, from you and the team over
Speaker 1: at bt i G. The wall is built, but you're
Speaker 1: not talking about the wall on the southern border. Is
Speaker 1: the good news enough to keep on climbing? And from
Speaker 1: what you've said so far, I can conclude, Julian that
Speaker 1: you think it is bt i G Chief Equity and
Speaker 1: to riversist strategist joining us here in New York, Julian
Speaker 1: Emmanuel to run us through some of the price action.
Speaker 1: There are times where a book comes across the desk
Speaker 1: where you say, okay, we're gonna talk about economics and
Speaker 1: international relations and the markets that we're gonna promote. John
Speaker 1: Farrell's The Real Yield. And there's other times you have
Speaker 1: to just rip it up and talk about the book.
Speaker 1: We'll do that in a moment. Peppermagram joins us, of course,
Speaker 1: on international economics, she served under the younger George Bush
Speaker 1: and joins us now, but just quickly here on international economics,
Speaker 1: Klaus Schwab has trotting trotting out the idea this year
Speaker 1: of globalization four point oh hyphen what it means and
Speaker 1: how it could benefit us. All that pushes massively against
Speaker 1: the zeitgeist, the populism, which says, wait a minute, globalization
Speaker 1: is not benefiting all, doesn't it. Yeah, But I agree
Speaker 1: with kush Slob on that one, and I think people
Speaker 1: are underestimating how much innovation is occurring and how many
Speaker 1: people can participate and be in that innovation. Uh So
Speaker 1: I have a very optimistic outlook for the world economy
Speaker 1: of the moment. I have to say, how is globalization
Speaker 1: different from Joseph Stiglett's discontent in his book of a
Speaker 1: decade ago, Globalization and It's Discontent. So Josephs view was
Speaker 1: there were all these people being left behind. I think
Speaker 1: what we're actually is that there's a community of people
Speaker 1: who can't get on accord with where the world economy
Speaker 1: is going. But that doesn't mean that they have to
Speaker 1: be left behind. So for example, automation, everybody assumes automation
Speaker 1: robotics equals unemployment, but in fact what we're seeing is
Speaker 1: since eighteen o four, in the introduction of the very
Speaker 1: first robotic, which was the Jackard weaving room, we've had
Speaker 1: nothing but more employment, in fact, record employment in China,
Speaker 1: record employment in the United States, in spite of or
Speaker 1: in fact, I would argue because of it. So then
Speaker 1: the issue isn't that they're left behind because they can't.
Speaker 1: It's because you won't let the door open. So here's
Speaker 1: my question for CEO is when's the last time you
Speaker 1: hired someone who didn't have a college degree. Because those
Speaker 1: people are not stupid, they're just not allowed in. And
Speaker 1: that's the problem I usually, folks. Here I continue with
Speaker 1: Pippa on economics, finance, investment. But Pippa, you've hit the
Speaker 1: home run with Chris Lewis with your new book, The
Speaker 1: Leadership Lab. Folks, this is a revolution very book. It
Speaker 1: reads two d pages, it feels like eight hundred pages
Speaker 1: because it is so dense with Bursted one page and
Speaker 1: two page thoughts like it will go from a booming
Speaker 1: stock market to it's the same whole world over, living
Speaker 1: in the present but destroying the future, etcetera, etcetera. Pippa,
Speaker 1: you open The Leadership Lab with what every single listener feels,
Speaker 1: and that is the information overload today? How do you
Speaker 1: move forward? Given the information overload today? So the first
Speaker 1: thing is everybody is so analytical and they have to
Speaker 1: be more parenthetical. And what that means just less focused
Speaker 1: on the data and more focused on how people are feeling,
Speaker 1: less on the numbers, and more on looking across the
Speaker 1: landscape and understanding what's the zeitgeist. And I think this
Speaker 1: is something that a lot of our business leaders and
Speaker 1: political leaders actually very good at. They're kind of disconnected
Speaker 1: from the zeitgeist. Chef Ray, you go to Richard Edelman,
Speaker 1: folks will be speaking. I believe with Mr Edelman and
Speaker 1: as Edelman trust parameter, we do that every year in Davos.
Speaker 1: It's my it's my must read of the year. Just fabulous.
Speaker 1: Fifty six pages from Edelman. And you go right where
Speaker 1: Richard Edelman is, Pippo Magram. You say, can we trust
Speaker 1: our leaders? How's our trust measurement with our leaders? Right now?
Speaker 1: I'm looking at Brexit and I'm looking at the shutdown.
Speaker 1: It's not going very well. And it's like the only
Speaker 1: category of leadership where public trust has remained high, interestingly
Speaker 1: give the military and so definitely our leaders need to
Speaker 1: change how they're interfacing with the public's say, if they
Speaker 1: still feel entightened to the public's trust instead of that
Speaker 1: they have to earn it. That's a totally different mindset, Pippa.
Speaker 1: You end your book with what's been the heart and
Speaker 1: soul of my work at Bloomberg, which is the a
Speaker 1: historical society and a complete understand a misunderstanding of history.
Speaker 1: I would you know suggest parenthetic be Folks. It's worse
Speaker 1: in America than it is over here in England. Are
Speaker 1: we getting more historical now? With the crisis ten years
Speaker 1: ago and with a political crisis now in so many nations?
Speaker 1: Are we beginning to learn our history? You know, I'm
Speaker 1: not sure that we are. I think what happens instead
Speaker 1: is a new generation of both business and political leaders
Speaker 1: isn't emerging, and they have a new on how we
Speaker 1: solve problems. We just saw about it in the election.
Speaker 1: All than these new members of Congress, a lot of women,
Speaker 1: may be people who had no political background. So instead
Speaker 1: of going back, what we're doing is going forward. And
Speaker 1: the people who are trying to live in the past
Speaker 1: in a nostalgic environment are so surely being eased off stage. Pippa.
Speaker 1: One final thought, and this, I think, Folks, is really
Speaker 1: subtle in office, but not in power. The leadership presumption
Speaker 1: of winning a democratic election, but you're not quote unquote
Speaker 1: in power. Discussed that, yeah, And I think this is
Speaker 1: the thing that everybody feels is like I've got a
Speaker 1: boss upstairs. He's in office, but he isn't a power.
Speaker 1: He doesn't actually know what's happening in the company or
Speaker 1: in the country. And what we need is for people
Speaker 1: to be in office who have power, but that has
Speaker 1: to be earned. And so heavily described how you can
Speaker 1: restore the trust and your employees, your clients and customers,
Speaker 1: your voters. Can't say leadership. I can't say enough about
Speaker 1: this as an airplane book, and folks, I'm not going
Speaker 1: to mince words about it. The Leadership Lab was built
Speaker 1: to be downloaded on Kindle or you dip into it,
Speaker 1: dive into just so Pippamagram and Chris Lewis could get
Speaker 1: your brain going on some of the linkages here of
Speaker 1: media communication technology with what Pip is so good at,
Speaker 1: which is just fundamental economics. Pippamagram, thank you so much,
Speaker 1: greatly appreciated the Leadership Lab. I'll put that out on
Speaker 1: social right now. John, I'm gonna bring in Roger Boodle,
Speaker 1: but you lead it off with Mr bruddle because I
Speaker 1: don't know where John Farrell wants to go John Roger
Speaker 1: Boodle and capital economics one percent e U G d
Speaker 1: P in this Brexit mess. Well, maybe Roger can stand
Speaker 1: by explanning to us where we are in this Brexit
Speaker 1: mess right now? What's happening, Roger, Well, we are in
Speaker 1: a mess. I don't really know what's going to happen.
Speaker 1: Plans always asking me, and it could be a whole
Speaker 1: load of things. Maybe we get a full clean Brexit,
Speaker 1: we leave without a deal. It's possible. And maybe we
Speaker 1: don't have a Brexit at all, that's possible. We may
Speaker 1: have a general election, another referendum. We may have Mrs
Speaker 1: mayos did you name it? Other team? Possible teen. I
Speaker 1: think we get to plan be Monday, and I believe
Speaker 1: John Farrell told me Roger that Mrs May is speaking
Speaker 1: to European leaders. How does she speak to them after
Speaker 1: that defeat the other day? I don't know quite Frankly,
Speaker 1: I don't know why she hasn't resigned. She hasn't got
Speaker 1: I think, anything more to say. They apparently have not
Speaker 1: got anything more to give, So I think this is
Speaker 1: all going to be afraid. I'm afraid of completely pointless exercise. Okay, well,
Speaker 1: then we're going to get to Plan B on Monday.
Speaker 1: I have no idea what's going to happen there, And
Speaker 1: then we staggered to March twenty nine and all the
Speaker 1: Western Roger boodle is a grizzled pro on this. What
Speaker 1: are you watching within their path? Well, of course you
Speaker 1: know you have to seasonal just for me, because I'm
Speaker 1: a Brexiteer. I support Brexit. What am I looking for? Well,
Speaker 1: from my point of view, you see, actually, if there's
Speaker 1: no agreed alternative, the legal default position is that we
Speaker 1: leave on the twenty ninth of March. You know, primary
Speaker 1: legislation has been passed in the House of Commons to
Speaker 1: that effect. It wants to stop it, then the government
Speaker 1: has got to coalace on some other thing. And actually
Speaker 1: how that past in the House of Commons. As things
Speaker 1: stand at the moment, I can't see what that thing
Speaker 1: will be unless it's actually to delay or pull Brexit altogether.
Speaker 1: Let's call the economics rider rutal capital economics and the
Speaker 1: United States economy. How's the US doing well? It's doing
Speaker 1: extremely well up to now, and I think you can
Speaker 1: begin to see signs of things slowing, and indeed we
Speaker 1: do think the economy will slow a fair bit a
Speaker 1: variety of reasons. First of all, the Fed's rate rises
Speaker 1: that we've had so far, and then also the fading
Speaker 1: effects of the fiscal boost from President Trump. All that should,
Speaker 1: I think lead to some sort of slowdown, and you
Speaker 1: know we are getting now. I think a pretty convincing
Speaker 1: picture of a slowing world. At the moment, the US
Speaker 1: sticks out like a sore thumbers being different, but I
Speaker 1: don't think that can last for a long time. If
Speaker 1: the world really is slowing, then I would affect that
Speaker 1: also to flow into the US and cause the US
Speaker 1: to slow as well. What will central bankers do? I mean,
Speaker 1: if you've got a slowing theme and capital economic stunning,
Speaker 1: one real GDP call for Europe. I'm looking at week
Speaker 1: nominal GDP weak animal spirits. Do you just pencil in persistent, chronic,
Speaker 1: forever negative interest rates in Germany? I think probably you
Speaker 1: have to. For forever is a very big word, but
Speaker 1: for the facture, yeah, I mean, I think my own
Speaker 1: position is that the hero is not going to be sustained.
Speaker 1: You know, I don't want to sound like Ambro sevens
Speaker 1: Pritchard is writing you a wonderful thematic pieces on Europe.
Speaker 1: But how does a banking system sustain and prosper and
Speaker 1: do societal good with chronic negative interest rates? I I
Speaker 1: that's a none of the textbooks I looked at. Yeah,
Speaker 1: of course it's an aberration, and it's there because the
Speaker 1: European economy is in a mess. And it's in a mess,
Speaker 1: in my view, primarily because of the Euro which should
Speaker 1: never have been formed. And I think both Europe and
Speaker 1: the world will be here off if the euro would
Speaker 1: disband it. That's the problem, Uncaulse. The European leaders are
Speaker 1: still staggering on trying to patch the whole thing up
Speaker 1: and hoping for the best. Then how how do you
Speaker 1: sell I mean, I granted Mr Johnson spoke today and
Speaker 1: I'm talking to your folks about a populism where Mr
Speaker 1: Johnson has, from what I could tell, am I reading
Speaker 1: a very narrow part of the English Whales population and
Speaker 1: certainly of the United Kingdom as well. He wants to
Speaker 1: expand that audience. I believe, or take fractured labor politics,
Speaker 1: they want to stabilize and expand their audience. I don't
Speaker 1: hear anybody reaching out to expand audiences. Do I well. Politically,
Speaker 1: I'm afraid this really is a mess. And the British
Speaker 1: people voted to leave the European Unions fairly decisive fifty two.
Speaker 1: But our political leaders in Parliament are sharply divided and
Speaker 1: they none of them connect really very well across the
Speaker 1: whole of the country, which is your point. They have
Speaker 1: their support as they also have their strong poss Well,
Speaker 1: this has been too short. Roger Boodle, thank you so
Speaker 1: much with Capital economics, and I can't say enough whatever
Speaker 1: your politics of terseness of his essays in the Telegraph
Speaker 1: make for most reading as well. Thanks for listening to
Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on
Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm
Speaker 1: on Twitter at Tom Keane before the podcast. You can
Speaker 1: always catch us worldwide. I'm Bloomberg Radio.