1 00:00:02,440 --> 00:00:10,280 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg day 2 00:00:10,280 --> 00:00:12,480 Speaker 1: Break Weekend, our global look at the top stories in 3 00:00:12,520 --> 00:00:14,840 Speaker 1: the coming week from our day Break anchors all around 4 00:00:14,840 --> 00:00:17,160 Speaker 1: the world. Straight Ahead on the program, a look at 5 00:00:17,160 --> 00:00:20,160 Speaker 1: the September jobs report in the US what it could 6 00:00:20,200 --> 00:00:23,720 Speaker 1: mean to FED policy moving forward. I'm Tom Busby in 7 00:00:23,800 --> 00:00:24,239 Speaker 1: New York. 8 00:00:24,480 --> 00:00:27,920 Speaker 2: I'm Caroline Hetcket in London, where we're asking if France's 9 00:00:28,080 --> 00:00:31,880 Speaker 2: new government can navigate an uncertain political road ahead. 10 00:00:32,240 --> 00:00:35,960 Speaker 3: I'm deg Chrisner previewing Chinese consumer behavior during the Golden 11 00:00:35,960 --> 00:00:38,880 Speaker 3: Week holiday. 12 00:00:42,479 --> 00:00:45,760 Speaker 4: That's all straight ahead on Bloomberg day Break Weekend on 13 00:00:45,920 --> 00:00:48,760 Speaker 4: Bloomberg e Loove on three OW, New York, Bloombergen ninety 14 00:00:48,840 --> 00:00:52,840 Speaker 4: nine to one, Washington, d C, Bloomberg ninety two to nine, Boston, 15 00:00:52,960 --> 00:00:57,840 Speaker 4: Bloomberg nine sixty, San Francisco, DAB Digital Radio, London, Syrias 16 00:00:57,960 --> 00:01:00,480 Speaker 4: XM one twenty one, and around the world world on 17 00:01:00,520 --> 00:01:03,760 Speaker 4: Bloomberg Radio dot com and via the Bloomberg Business Chatter. 18 00:01:07,000 --> 00:01:08,880 Speaker 1: Good day to you. I'm Tom Busby, and we begin 19 00:01:08,920 --> 00:01:11,640 Speaker 1: today's program with a look at the September jobs report. 20 00:01:11,920 --> 00:01:15,360 Speaker 1: Here in the US, non farm payroll numbers come out 21 00:01:15,480 --> 00:01:19,000 Speaker 1: this Friday eight thirty am Wall Street Time. What could 22 00:01:19,000 --> 00:01:22,240 Speaker 1: those numbers mean for Fed monetary policy moving forward? Well, 23 00:01:22,280 --> 00:01:25,560 Speaker 1: for more, we're joined by Stuart Paul Us economists with 24 00:01:25,600 --> 00:01:29,480 Speaker 1: Bloomberg Economics. Well, Stuart, no doubt we've seen some softening 25 00:01:29,480 --> 00:01:31,920 Speaker 1: in the US labor market, but we still see growth. 26 00:01:32,360 --> 00:01:34,679 Speaker 1: What are you expecting to see this coming Friday. 27 00:01:35,000 --> 00:01:38,280 Speaker 5: The consensus estimate is for one hundred and thirty thousand jobs. 28 00:01:38,360 --> 00:01:41,440 Speaker 5: That's what folks are expecting was added in September. That's 29 00:01:41,480 --> 00:01:44,240 Speaker 5: a little bit lower than the estimate for August, which 30 00:01:44,240 --> 00:01:47,280 Speaker 5: showed one hundred and forty two thousand jobs added. We 31 00:01:47,360 --> 00:01:50,240 Speaker 5: think risk is actually skewed to the upside for that 32 00:01:50,360 --> 00:01:52,840 Speaker 5: non farm payroll number, and it could be as high 33 00:01:52,840 --> 00:01:57,160 Speaker 5: as double what the consensus estimate is. But that comes 34 00:01:57,160 --> 00:01:59,840 Speaker 5: from our tracking of high frequency data which shows that 35 00:02:00,000 --> 00:02:03,240 Speaker 5: there or fewer layoffs in the hospitality and entertainment industries 36 00:02:03,280 --> 00:02:07,080 Speaker 5: in September, and hiring was way above the seasonal norm 37 00:02:07,240 --> 00:02:10,320 Speaker 5: in education. Now, that could just be a little bit 38 00:02:10,360 --> 00:02:12,639 Speaker 5: of catch up from a week August when it comes 39 00:02:12,680 --> 00:02:15,840 Speaker 5: to hiring in education. So we think that even if 40 00:02:15,880 --> 00:02:18,440 Speaker 5: we do see an upside surprise, the Fed can read 41 00:02:18,480 --> 00:02:20,239 Speaker 5: through it a little bit, and I just want to 42 00:02:20,320 --> 00:02:24,680 Speaker 5: layer on one additional complication there. We know that monthly 43 00:02:24,840 --> 00:02:28,959 Speaker 5: estimates for non farm payrolls are running a bit high 44 00:02:29,360 --> 00:02:32,480 Speaker 5: because of mismeasurement issues at the Bureau of Labor Statistics. 45 00:02:32,760 --> 00:02:34,880 Speaker 5: We know that we're going to get a downward revision, 46 00:02:35,160 --> 00:02:37,880 Speaker 5: and it's our best estimate that we're still seeing monthly 47 00:02:37,960 --> 00:02:41,400 Speaker 5: non farm payroll estimates that are about ninety thousand jobs 48 00:02:41,400 --> 00:02:45,160 Speaker 5: per month overestimated. So we know that even if we 49 00:02:45,200 --> 00:02:47,840 Speaker 5: do see an upside surprise, you got to discount it 50 00:02:47,919 --> 00:02:50,600 Speaker 5: for that mismeasurement problem. And even if we were to 51 00:02:50,639 --> 00:02:52,919 Speaker 5: see something like let's say two hundred and fifty thousand 52 00:02:53,000 --> 00:02:56,440 Speaker 5: jobs added, it's really more like one hundred and sixty thousand. 53 00:02:56,720 --> 00:02:58,919 Speaker 5: If we do see the consensus estimate of one hundred 54 00:02:58,960 --> 00:03:02,000 Speaker 5: and thirty thousand jobs, it's really more like forty to 55 00:03:02,040 --> 00:03:06,960 Speaker 5: fifty thousand jobs added. Under either scenario, that's hiring. That's 56 00:03:07,000 --> 00:03:11,520 Speaker 5: still too slow to maintain a consistent unemployment rate. So 57 00:03:11,560 --> 00:03:14,440 Speaker 5: we do see unemployment rate risk as skewed a little 58 00:03:14,440 --> 00:03:15,360 Speaker 5: bit to the upside. 59 00:03:15,480 --> 00:03:17,840 Speaker 1: Well, right now the unemployment rate is four point two percent, 60 00:03:18,000 --> 00:03:19,919 Speaker 1: or where could it go would it stay the same? 61 00:03:20,320 --> 00:03:22,640 Speaker 5: So we think that four point two is a reasonably 62 00:03:22,720 --> 00:03:25,520 Speaker 5: good estimate, risk is skewed toward four point three percent. 63 00:03:25,600 --> 00:03:29,120 Speaker 5: We have a precise but very knife edge estimate of 64 00:03:29,240 --> 00:03:31,760 Speaker 5: four point two five percent. So it really comes down 65 00:03:31,800 --> 00:03:35,040 Speaker 5: to the rounding at the Bureau of Labor Statistics. If 66 00:03:35,080 --> 00:03:37,840 Speaker 5: we're thinking about the trajectory of the unemployment rate, though, 67 00:03:37,840 --> 00:03:40,040 Speaker 5: where could it be at year end and how might 68 00:03:40,080 --> 00:03:43,040 Speaker 5: the FED respond to that in November and December when 69 00:03:43,080 --> 00:03:45,840 Speaker 5: the FMC meets for the next couple times. We think 70 00:03:45,840 --> 00:03:48,120 Speaker 5: that the unemployment rate can end the year at about 71 00:03:48,120 --> 00:03:51,120 Speaker 5: four and a half percent, we're still seeing the hiring 72 00:03:51,160 --> 00:03:54,880 Speaker 5: that's just too slow to maintain a consistent unemployment rate. 73 00:03:55,240 --> 00:03:57,120 Speaker 5: And when that's the case, the FED is going to 74 00:03:57,120 --> 00:03:59,640 Speaker 5: be inclined to cut a bit more. Again, even if 75 00:03:59,640 --> 00:04:02,920 Speaker 5: we see that upside surprize in payroll numbers. 76 00:04:02,640 --> 00:04:05,080 Speaker 1: Well that sounds like a pretty big upside surprise that 77 00:04:05,120 --> 00:04:09,600 Speaker 1: you're talking about doubling perhaps the one point thirty estimated. 78 00:04:10,040 --> 00:04:13,920 Speaker 1: What's behind these I won't say miscalculations, but the big 79 00:04:13,960 --> 00:04:15,840 Speaker 1: difference in these estimates. 80 00:04:16,080 --> 00:04:18,960 Speaker 5: So part of it comes down to how the Bureau 81 00:04:18,960 --> 00:04:24,080 Speaker 5: of Labor Statistics extrapolates an estimate for nationwide hiring from 82 00:04:24,120 --> 00:04:27,560 Speaker 5: a rather narrow sample of businesses that are surveyed. There's 83 00:04:27,560 --> 00:04:30,960 Speaker 5: still a couple hundred thousand businesses that are surveyed every month, 84 00:04:31,240 --> 00:04:33,880 Speaker 5: but compare that to the tens of millions of businesses 85 00:04:33,920 --> 00:04:36,480 Speaker 5: that are operating the United States. It's still just very 86 00:04:36,520 --> 00:04:39,560 Speaker 5: narrow slice. The BLS has to have a model for 87 00:04:39,800 --> 00:04:42,799 Speaker 5: how it can extrapolate from the survey to the broader economy. 88 00:04:43,160 --> 00:04:45,919 Speaker 5: We've seen time and time again both revisions on a 89 00:04:45,920 --> 00:04:50,640 Speaker 5: monthly basis and downward revisions based on that improper extrapolation 90 00:04:50,960 --> 00:04:54,320 Speaker 5: from the eight hundred eighteen thousand that's exactly right. So 91 00:04:54,480 --> 00:04:57,400 Speaker 5: through the first quarter and the year ending in March 92 00:04:57,600 --> 00:04:59,760 Speaker 5: of this year March of twenty twenty four, we know 93 00:04:59,880 --> 00:05:03,200 Speaker 5: that payrolls we're overestimated by about eight hundred and eighteen 94 00:05:03,279 --> 00:05:06,000 Speaker 5: thousand jobs, So we know that we have that revision coming, 95 00:05:06,080 --> 00:05:08,840 Speaker 5: and we think that since then we're running at a 96 00:05:08,880 --> 00:05:12,560 Speaker 5: pace of about ninety thousand jobs per month overestimated. So 97 00:05:13,200 --> 00:05:16,120 Speaker 5: that helps to resolve this puzzle that we deal with, 98 00:05:16,160 --> 00:05:19,480 Speaker 5: which is we see hiring that seems to be pretty 99 00:05:19,480 --> 00:05:23,080 Speaker 5: stable and robust, but we still see this unemployment rate 100 00:05:23,080 --> 00:05:25,360 Speaker 5: that's rising, and if that's the case, we need to 101 00:05:25,400 --> 00:05:27,320 Speaker 5: square the circle. I think that part of it is 102 00:05:27,680 --> 00:05:32,480 Speaker 5: an overestimate of hiring plus layer in immigration, and we 103 00:05:32,560 --> 00:05:35,560 Speaker 5: know that just the current labor supply is not being 104 00:05:35,600 --> 00:05:40,000 Speaker 5: fully absorbed. Just demand is not entirely sufficient to keep 105 00:05:40,080 --> 00:05:41,840 Speaker 5: that unemployment rate steady. 106 00:05:42,080 --> 00:05:45,200 Speaker 1: Well, for a FED that says it's data dependent, this 107 00:05:45,279 --> 00:05:47,200 Speaker 1: must be pretty vexing for them. 108 00:05:47,480 --> 00:05:50,000 Speaker 5: It is. It's the sort of thing that's troubling. It's 109 00:05:50,000 --> 00:05:51,719 Speaker 5: the sort of this is part of the reason why 110 00:05:51,720 --> 00:05:54,160 Speaker 5: the FED has so many economists on staff to help 111 00:05:54,200 --> 00:05:57,040 Speaker 5: solve these these questions. But I think the one thing 112 00:05:57,080 --> 00:05:59,800 Speaker 5: that's clear is that with cooling inflation, the FED can 113 00:06:00,040 --> 00:06:03,040 Speaker 5: focus its energy is a bit more on achieving the 114 00:06:03,080 --> 00:06:06,440 Speaker 5: maximum employment objective within its dual mandate. And I think 115 00:06:06,480 --> 00:06:08,000 Speaker 5: that that's why we're going to see a FED that's 116 00:06:08,000 --> 00:06:10,479 Speaker 5: still on its rate cutting course, because when you have 117 00:06:10,640 --> 00:06:13,600 Speaker 5: labor supply that's outstripping demand, you're going to have that 118 00:06:13,720 --> 00:06:16,400 Speaker 5: rising unemployment rate and you should see the FED respond 119 00:06:16,440 --> 00:06:17,520 Speaker 5: with additional rate cuts. 120 00:06:17,880 --> 00:06:18,080 Speaker 6: Well. 121 00:06:18,120 --> 00:06:21,159 Speaker 1: The September Jobs report from the Bureau of Labor Statistics 122 00:06:21,160 --> 00:06:24,279 Speaker 1: out this Friday, and our thanks to Stuart Paul, us 123 00:06:24,360 --> 00:06:28,359 Speaker 1: economist with Bloomberg Economics. We move now to politics. With 124 00:06:28,560 --> 00:06:31,400 Speaker 1: just over a month ago ahead of the US general election, 125 00:06:31,600 --> 00:06:36,080 Speaker 1: vice presidential nominees Republican Senator JD. Vans of Ohio Democratic 126 00:06:36,080 --> 00:06:40,200 Speaker 1: Governor Tim Wats of Minnesota will debate this Tuesday, facing 127 00:06:40,240 --> 00:06:43,280 Speaker 1: off for the only time ahead of that November fifth vote. 128 00:06:43,400 --> 00:06:46,400 Speaker 1: Bloomberg Television and Radio will have special coverage and a 129 00:06:46,400 --> 00:06:50,320 Speaker 1: global simulcast of the CBS News debate starting Tuesday at 130 00:06:50,360 --> 00:06:53,919 Speaker 1: eight pm Wall Street Time. Now for more on the 131 00:06:54,000 --> 00:06:57,640 Speaker 1: debate and the economic visions of both vice presidential candidates, 132 00:06:57,680 --> 00:07:01,920 Speaker 1: were joined by Laura Davison, Bloomberg Politics Editor. Laura, thank 133 00:07:02,000 --> 00:07:04,760 Speaker 1: you so much for joining us. I'm going to start 134 00:07:04,800 --> 00:07:08,240 Speaker 1: with what are you looking forward to hear from both 135 00:07:08,440 --> 00:07:10,800 Speaker 1: vice presidential candidates this week? 136 00:07:11,040 --> 00:07:14,560 Speaker 7: So this debate is really going to be different than 137 00:07:14,760 --> 00:07:18,640 Speaker 7: some previous VP debates that we've had one in that 138 00:07:18,680 --> 00:07:21,640 Speaker 7: there's just more interest in both of these figures. Both 139 00:07:21,640 --> 00:07:23,480 Speaker 7: of them, you know, obviously have been on the political 140 00:07:23,520 --> 00:07:26,440 Speaker 7: scene for a little bit, but have not necessarily had 141 00:07:26,440 --> 00:07:29,520 Speaker 7: a quite the same national profile. You know, JD. Vance 142 00:07:29,560 --> 00:07:32,560 Speaker 7: coming sort of into the world of politics from being 143 00:07:32,560 --> 00:07:35,200 Speaker 7: an author in his book Kill Billy Elegy. Wall's more 144 00:07:35,200 --> 00:07:37,920 Speaker 7: low price profile. He was a member of the House 145 00:07:37,960 --> 00:07:40,760 Speaker 7: from a rural from Minnesota district and governor of Minnesota, 146 00:07:41,240 --> 00:07:44,000 Speaker 7: but didn't quite have the same national profile. But what's 147 00:07:44,080 --> 00:07:46,720 Speaker 7: interesting is they both have a very much an economic 148 00:07:46,800 --> 00:07:50,200 Speaker 7: populist message, but what that looks like is very different. 149 00:07:50,680 --> 00:07:53,200 Speaker 7: You know, Vance has spoken a lot about big tech 150 00:07:53,240 --> 00:07:54,760 Speaker 7: and they need to break up big tech in ways 151 00:07:54,800 --> 00:07:57,040 Speaker 7: that he almost sounds like a Democrat, But in other 152 00:07:57,120 --> 00:07:58,960 Speaker 7: things that he talks about in terms of taxes and 153 00:07:59,040 --> 00:08:03,200 Speaker 7: other things, he's he's more in line with the mainstream 154 00:08:03,200 --> 00:08:06,280 Speaker 7: of where the Republican Party now is. Walls as governor 155 00:08:06,560 --> 00:08:09,640 Speaker 7: has spent a lot of time thinking about what we 156 00:08:09,760 --> 00:08:13,640 Speaker 7: kind of call the care economy, so things like childcare, 157 00:08:14,040 --> 00:08:17,000 Speaker 7: preschool lunches, child tax credit. He spent a lot of 158 00:08:17,040 --> 00:08:19,480 Speaker 7: time thinking about, you know, how can you know the 159 00:08:20,120 --> 00:08:23,120 Speaker 7: government implement policies to make life easier for families. 160 00:08:23,400 --> 00:08:25,480 Speaker 1: Well, he certainly has a record of you know that 161 00:08:25,600 --> 00:08:29,080 Speaker 1: one point nine billion dollar jobs and projects act like 162 00:08:29,120 --> 00:08:32,480 Speaker 1: you said, the state established paid sick and medical leave, 163 00:08:32,760 --> 00:08:37,280 Speaker 1: banning non compete agreements. So he has i mean, let's 164 00:08:37,280 --> 00:08:39,440 Speaker 1: face it, a better track record. We can see what 165 00:08:39,600 --> 00:08:43,960 Speaker 1: he has done. But let's compare him and Vance and 166 00:08:44,040 --> 00:08:46,920 Speaker 1: some things. Let's start with a hot button issue right now. 167 00:08:47,040 --> 00:08:50,920 Speaker 1: We are facing a devastating strike right now in Seattle 168 00:08:50,960 --> 00:08:54,920 Speaker 1: at Boeing. What about unions. Let's start with Vance on 169 00:08:55,120 --> 00:08:56,520 Speaker 1: unions and then about wolves. 170 00:08:57,240 --> 00:08:59,319 Speaker 7: Yeah, so this is kind of one of those areas 171 00:08:59,400 --> 00:09:01,840 Speaker 7: they both talk about the American worker. This is something 172 00:09:01,880 --> 00:09:04,160 Speaker 7: that they're both you know, sort of central to their messaging, 173 00:09:04,800 --> 00:09:06,880 Speaker 7: you know, Vance and and you know and Trump of 174 00:09:06,880 --> 00:09:11,120 Speaker 7: course have also been less favorable towards unions. Trump recently, 175 00:09:11,200 --> 00:09:14,080 Speaker 7: in a conversation with Elon Musk even you know, sort 176 00:09:14,080 --> 00:09:17,160 Speaker 7: of talked about, you know, firing workers for striking. And 177 00:09:17,200 --> 00:09:19,280 Speaker 7: so this is sort of a position that Vance has 178 00:09:19,280 --> 00:09:23,280 Speaker 7: adopted as well, and is less favorable uh towards unions 179 00:09:23,280 --> 00:09:26,840 Speaker 7: and basically you know, sort of wants people uh to uh, 180 00:09:27,200 --> 00:09:29,200 Speaker 7: you know, have a little bit more freedom. Of course, 181 00:09:29,240 --> 00:09:31,400 Speaker 7: you know, both sides are very much courting the union vote, 182 00:09:31,400 --> 00:09:34,800 Speaker 7: and they both tout that the teamsters just recently declined 183 00:09:34,840 --> 00:09:38,280 Speaker 7: to endorse either ticket, and so both sides have sort 184 00:09:38,280 --> 00:09:40,040 Speaker 7: of been taking that as a win, saying, hey, look, 185 00:09:40,120 --> 00:09:42,360 Speaker 7: you know that this is we have the working man 186 00:09:42,480 --> 00:09:43,400 Speaker 7: on the side of us. 187 00:09:43,520 --> 00:09:46,240 Speaker 1: But a lot of Teamsters, though, have come out right 188 00:09:46,559 --> 00:09:46,960 Speaker 1: in phase. 189 00:09:48,640 --> 00:09:48,840 Speaker 8: Yes. 190 00:09:48,960 --> 00:09:51,440 Speaker 7: One of the reasons that the Teamsters didn't endorse is 191 00:09:51,480 --> 00:09:54,560 Speaker 7: they put out this polling thing. Look are our membership 192 00:09:54,640 --> 00:09:57,000 Speaker 7: is very split. Uh you know, you know, upwards of 193 00:09:57,000 --> 00:09:59,160 Speaker 7: fifty percent. You know, I think fifty fifty nine percent 194 00:09:59,440 --> 00:10:01,760 Speaker 7: of the teams actually said they wanted to endorse Trump. 195 00:10:02,320 --> 00:10:06,040 Speaker 7: Only about you know, forty percent wanted to endorse Harris. 196 00:10:06,080 --> 00:10:08,480 Speaker 7: But of course, the Teamsters have long endorsed Democrats, so 197 00:10:08,520 --> 00:10:10,400 Speaker 7: they decided to just stay out of this fight. But 198 00:10:10,400 --> 00:10:13,760 Speaker 7: at the local level, you've seen both both Vance Trump, 199 00:10:13,840 --> 00:10:18,320 Speaker 7: Harris and Walls campaigning with Teamsters members from specific states. 200 00:10:18,440 --> 00:10:22,040 Speaker 7: Walls was with Teamsters members from Arizona, and Harris has 201 00:10:22,040 --> 00:10:26,160 Speaker 7: also been with Teamsters from some of those Blue Wall Michigan, Pennsylvania, 202 00:10:26,200 --> 00:10:27,640 Speaker 7: and Wisconsin areas. 203 00:10:27,720 --> 00:10:31,680 Speaker 1: Now, let's talk taxes. Walls has raised taxes on wealthy 204 00:10:31,720 --> 00:10:35,440 Speaker 1: earners one percent tax capital gains, dividends, investments, stopping a 205 00:10:35,440 --> 00:10:38,920 Speaker 1: million a year. He also raised corporate taxes. They're the 206 00:10:39,040 --> 00:10:43,040 Speaker 1: highest in the US nine point eight percent. However, some 207 00:10:43,280 --> 00:10:47,160 Speaker 1: giant corporations based there three m general Mills, Cargill, target 208 00:10:47,240 --> 00:10:49,760 Speaker 1: US Bank, just to name a few, are staying there. 209 00:10:49,920 --> 00:10:54,120 Speaker 1: So is it working those taxes on corporations and what's 210 00:10:54,480 --> 00:10:56,280 Speaker 1: Vance's view on that. 211 00:10:56,640 --> 00:10:59,320 Speaker 7: Yes, the general Walls philosophy, and this is something that 212 00:10:59,360 --> 00:11:02,160 Speaker 7: Harris also up is that you know, you raise taxes 213 00:11:02,200 --> 00:11:06,079 Speaker 7: on corporations on the wealthy to pay for tax benefits 214 00:11:06,480 --> 00:11:09,160 Speaker 7: for lower earners and middle income earners. So that's what 215 00:11:09,200 --> 00:11:12,040 Speaker 7: you saw play out in Minnesota when he was governor, 216 00:11:12,640 --> 00:11:14,599 Speaker 7: that he raised taxes on on the wealthy, you know, 217 00:11:14,679 --> 00:11:17,520 Speaker 7: raised that corporate tax you know, to a level that 218 00:11:17,559 --> 00:11:19,439 Speaker 7: you know, corporations still said, okay, it still makes sense 219 00:11:19,440 --> 00:11:21,199 Speaker 7: for me to keep my business based in Minnesota and 220 00:11:21,280 --> 00:11:23,320 Speaker 7: not not so high that they would leave. But then 221 00:11:23,360 --> 00:11:26,720 Speaker 7: you can use that money to expand a child tax credit, 222 00:11:26,760 --> 00:11:29,160 Speaker 7: to pay for you know, pay leave, to pay for 223 00:11:29,240 --> 00:11:31,680 Speaker 7: school lunches and some of these things. So that's sort 224 00:11:31,679 --> 00:11:34,679 Speaker 7: of like the the basically what the Harris vision is 225 00:11:34,720 --> 00:11:37,480 Speaker 7: to do on a national level, what Tim Walls has done, 226 00:11:37,920 --> 00:11:40,760 Speaker 7: you know, broadly speaking, in Minnesota. Vance has a very 227 00:11:40,800 --> 00:11:43,720 Speaker 7: different view about tax station. He has also proposed tax 228 00:11:43,760 --> 00:11:47,400 Speaker 7: cuts for for lower earners, particularly a big increase to 229 00:11:47,440 --> 00:11:49,920 Speaker 7: the trial tax credit. That's been something that he's been 230 00:11:50,360 --> 00:11:51,280 Speaker 7: very vocal about. 231 00:11:51,080 --> 00:11:51,880 Speaker 6: On the campaign trail. 232 00:11:52,080 --> 00:11:54,880 Speaker 7: This is something that also that Walls and Harris want 233 00:11:54,880 --> 00:11:56,880 Speaker 7: to do, but they have different approaches and how they 234 00:11:56,880 --> 00:11:58,760 Speaker 7: would do it. Basically, Advance wants to give this tax 235 00:11:58,840 --> 00:12:02,240 Speaker 7: credit you sort of regardless of income status, whereas We'll 236 00:12:02,520 --> 00:12:04,480 Speaker 7: wants to target this more just to sort of lower 237 00:12:04,480 --> 00:12:06,679 Speaker 7: and middle income earners so that they would get the 238 00:12:06,679 --> 00:12:08,960 Speaker 7: biggest benefit. When it comes to corporate tax for Vance, 239 00:12:09,000 --> 00:12:13,040 Speaker 7: he is not in favor of increasing those. It's actually 240 00:12:13,240 --> 00:12:15,280 Speaker 7: a big goal for Trump and for the Republican ticket 241 00:12:15,320 --> 00:12:17,439 Speaker 7: to lower corporate taxes. It's something to talk about on 242 00:12:17,520 --> 00:12:20,120 Speaker 7: the campaign trail a lot. Trump during his first term 243 00:12:20,240 --> 00:12:23,199 Speaker 7: lowered the federal corporate rate. It was that thirty five percent. 244 00:12:23,240 --> 00:12:24,880 Speaker 7: He lowered it down to twenty one percent, so a 245 00:12:24,960 --> 00:12:27,400 Speaker 7: really big jump. Trump has been talking about wanting to 246 00:12:27,440 --> 00:12:29,960 Speaker 7: lower that down to fifteen percent. So that's something that 247 00:12:30,360 --> 00:12:33,080 Speaker 7: is sort of a big gap between the two party's 248 00:12:33,080 --> 00:12:34,800 Speaker 7: tickets and something that you'll probably hear about on the 249 00:12:34,840 --> 00:12:36,439 Speaker 7: debate stage on Tuesday. 250 00:12:36,600 --> 00:12:38,760 Speaker 1: Well, there's a lot to look forward to that debate 251 00:12:38,840 --> 00:12:42,120 Speaker 1: this Tuesday, October First. In our thanks to Laura Davison, 252 00:12:42,360 --> 00:12:46,319 Speaker 1: Bloomberg Politics Editor. A reminder Bloomberg Television and Radio, we'll 253 00:12:46,320 --> 00:12:49,559 Speaker 1: have special coverage and a global simulcast of the CBS 254 00:12:49,559 --> 00:12:53,400 Speaker 1: News debate starting Tuesday at eight pm Wall Street Time. 255 00:12:53,679 --> 00:12:55,920 Speaker 1: Coming up on Bloomberg day Break Weekend, we'll look at 256 00:12:55,920 --> 00:13:00,440 Speaker 1: whether France's new government can navigate an uncertain political row ahead. 257 00:13:00,760 --> 00:13:16,080 Speaker 1: I'm Tom Busby, and this is Bloomberg. This is Bloomberg 258 00:13:16,160 --> 00:13:18,200 Speaker 1: day Break Weekend, our global look ahead at the top 259 00:13:18,240 --> 00:13:21,280 Speaker 1: stories for investors in the coming week. I'm Tom Busby 260 00:13:21,320 --> 00:13:24,120 Speaker 1: in New York. Up later in the program, a look 261 00:13:24,160 --> 00:13:27,560 Speaker 1: at what China's Golden Week means to the Chinese economy. 262 00:13:27,840 --> 00:13:30,800 Speaker 1: But first, France has chosen its new government with a 263 00:13:30,880 --> 00:13:34,400 Speaker 1: seventy three year old statesman Michelle Barnier as Prime minister. 264 00:13:34,720 --> 00:13:37,199 Speaker 1: But this comes as an EU budget deadline looms and 265 00:13:37,240 --> 00:13:40,480 Speaker 1: the country awaits policy announcements. We should get a first 266 00:13:40,520 --> 00:13:43,080 Speaker 1: look at his plans this week. But can the former 267 00:13:43,080 --> 00:13:47,079 Speaker 1: Breakit negotiator quiet the political turmoil in Paris? For more, 268 00:13:47,360 --> 00:13:49,320 Speaker 1: Let's go to London and bring in Bloomberg day Break 269 00:13:49,320 --> 00:13:51,800 Speaker 1: Europe anchor Caroline Hepger Tom. 270 00:13:51,840 --> 00:13:54,199 Speaker 2: In the next few days, we're expecting to hear from 271 00:13:54,240 --> 00:13:57,880 Speaker 2: the new French Prime Minister, Michelle Barnier in an important speech. 272 00:13:58,240 --> 00:14:02,080 Speaker 2: His new cabinet has only being created after a record 273 00:14:02,160 --> 00:14:07,440 Speaker 2: long two month transition period that politically paralyzed France. It 274 00:14:07,520 --> 00:14:11,240 Speaker 2: has been described by one veteran commentator as the most 275 00:14:11,320 --> 00:14:15,240 Speaker 2: right wing cabinet in more than a decade. More broadly, 276 00:14:15,360 --> 00:14:20,240 Speaker 2: concerned about France's finances are also growing. Rattled investors have 277 00:14:20,360 --> 00:14:24,520 Speaker 2: resumed selling the country's bombs and so in short, Michele 278 00:14:24,720 --> 00:14:28,120 Speaker 2: Barnier is under a great deal of pressure in terms 279 00:14:28,120 --> 00:14:34,240 Speaker 2: of political stability, popularity and economics. Recently, lawmakers have had 280 00:14:34,280 --> 00:14:37,400 Speaker 2: to warn that the budget deficit has widened much more 281 00:14:37,440 --> 00:14:41,760 Speaker 2: than expected, and politicians have pledged tough action to ensure 282 00:14:41,920 --> 00:14:45,880 Speaker 2: credibility in the face of the bond markets. Maria Jakels 283 00:14:45,880 --> 00:14:51,000 Speaker 2: from Edmund de Rothschild asset Management in France says lawmakers 284 00:14:51,040 --> 00:14:54,800 Speaker 2: are now under significant pressure to deliver a solution. 285 00:14:55,800 --> 00:14:59,760 Speaker 8: The issue is that fiscal policy and decisions have clearly 286 00:14:59,800 --> 00:15:04,240 Speaker 8: not been at the heart of president maximum consultations in 287 00:15:04,320 --> 00:15:07,520 Speaker 8: the recent past, so the government is really going to 288 00:15:07,760 --> 00:15:12,360 Speaker 8: have to work under a huge time pressure and it's 289 00:15:12,440 --> 00:15:15,040 Speaker 8: at this point of time, very difficult to say what 290 00:15:15,080 --> 00:15:18,280 Speaker 8: sort of measures they are going to come up with, 291 00:15:18,400 --> 00:15:20,640 Speaker 8: but one thing it's sure is that it's the absolute 292 00:15:20,640 --> 00:15:23,360 Speaker 8: priority for this government and they have very little time 293 00:15:23,400 --> 00:15:26,480 Speaker 8: to implement. So what it means is that he's going 294 00:15:26,520 --> 00:15:28,880 Speaker 8: to be able to get anything done, He's going to 295 00:15:28,960 --> 00:15:33,680 Speaker 8: have to at the bare minimum get the abstention from 296 00:15:33,840 --> 00:15:39,520 Speaker 8: some of the non affiliated deputies or lot for example, 297 00:15:40,240 --> 00:15:42,880 Speaker 8: if not the active support from some of the extreme 298 00:15:43,720 --> 00:15:48,280 Speaker 8: deputies in parliament. Otherwise he's going to have to use 299 00:15:48,320 --> 00:15:50,480 Speaker 8: the forty nine point three over and over again, and 300 00:15:50,520 --> 00:15:54,000 Speaker 8: then he risks a vote of no confidence and then 301 00:15:54,080 --> 00:15:56,560 Speaker 8: you know nothing is going to get done. 302 00:15:56,560 --> 00:16:00,040 Speaker 9: Really, so it all seems like a very scary, in 303 00:16:00,120 --> 00:16:02,960 Speaker 9: a very kind of frustrating, an intense situation that doesn't 304 00:16:02,960 --> 00:16:05,920 Speaker 9: necessarily yield up positive results given given the time crunch. 305 00:16:06,200 --> 00:16:08,600 Speaker 9: But on a positive side, if I may inject some 306 00:16:09,480 --> 00:16:14,880 Speaker 9: happiness here, is that Michelle Barnier is a skilled diplomat, 307 00:16:14,960 --> 00:16:17,480 Speaker 9: He is a skilled negotiator, so I think the logic 308 00:16:17,800 --> 00:16:20,720 Speaker 9: from some has been that he can actually manage the 309 00:16:21,320 --> 00:16:23,520 Speaker 9: division that you're seeing in parliament. The other side of 310 00:16:23,600 --> 00:16:25,520 Speaker 9: is that from the EU side, there may actually be 311 00:16:25,560 --> 00:16:28,840 Speaker 9: concessions to the French government. If this deficit doesn't quite 312 00:16:28,840 --> 00:16:33,000 Speaker 9: match their standards, does that change your view on France 313 00:16:33,000 --> 00:16:36,400 Speaker 9: and the investibility of France given the cushion that they 314 00:16:36,480 --> 00:16:39,320 Speaker 9: may get from the EU and given the global confidence 315 00:16:39,360 --> 00:16:41,880 Speaker 9: that perhaps is growing in this peck. 316 00:16:42,040 --> 00:16:44,600 Speaker 8: That would certainly be helpful. And when you look at 317 00:16:44,600 --> 00:16:48,280 Speaker 8: how the markets have reacted so far and French equities, 318 00:16:48,360 --> 00:16:51,520 Speaker 8: for example, you see that the French stocks that were 319 00:16:51,920 --> 00:16:56,000 Speaker 8: purely domestic ones have actually already recovered from the time 320 00:16:56,080 --> 00:17:00,560 Speaker 8: from the losses from the snap election time. And we 321 00:17:00,680 --> 00:17:04,240 Speaker 8: have to remember that eighty five percent of the MSc 322 00:17:04,320 --> 00:17:09,880 Speaker 8: iPhones and the CAC is actually you know, driven by 323 00:17:09,960 --> 00:17:12,480 Speaker 8: stocks that are you know, global stocks and having a 324 00:17:12,520 --> 00:17:15,959 Speaker 8: global exposure. So I think that's you know, their their 325 00:17:16,000 --> 00:17:18,639 Speaker 8: their volatility and the way they behave is actually quite 326 00:17:19,640 --> 00:17:24,919 Speaker 8: independent from from French politics. We our position at the 327 00:17:24,920 --> 00:17:29,080 Speaker 8: moment is that we've taken profits from Europe in equities 328 00:17:29,200 --> 00:17:34,840 Speaker 8: and we're neutral. We're more interested in emerging markets in 329 00:17:34,960 --> 00:17:37,439 Speaker 8: the equity space, but also in the credit space, and 330 00:17:37,440 --> 00:17:40,960 Speaker 8: that's really because of you know, the recent announcement of 331 00:17:41,080 --> 00:17:44,639 Speaker 8: the easing policy by the FED, and we believe that 332 00:17:44,720 --> 00:17:47,679 Speaker 8: it will you know, help get flows into emerging markets 333 00:17:47,720 --> 00:17:51,639 Speaker 8: who have actually weather the inflation crisis pretty well. So 334 00:17:51,720 --> 00:17:55,560 Speaker 8: we're quite excited about you know that part. And that's region, 335 00:17:55,680 --> 00:17:57,160 Speaker 8: if I may say, equities. 336 00:17:57,240 --> 00:17:59,639 Speaker 2: So you're in Europe, so your interest is elsewhere? And 337 00:17:59,760 --> 00:18:02,600 Speaker 2: is that because you think that there are risks that 338 00:18:02,640 --> 00:18:04,879 Speaker 2: we just do all this again in a year we 339 00:18:04,920 --> 00:18:08,840 Speaker 2: go into further parliamentary elections in a year or so, maary? 340 00:18:08,920 --> 00:18:10,240 Speaker 6: Is that? Is that one of the. 341 00:18:10,160 --> 00:18:13,199 Speaker 10: Reasons why you look elsewhere, because we could see volatility 342 00:18:13,280 --> 00:18:15,320 Speaker 10: or even negativity attached to politics. 343 00:18:15,560 --> 00:18:19,439 Speaker 8: It's one of the reasons definitely. And if we go 344 00:18:19,560 --> 00:18:22,240 Speaker 8: from you know, vote of no confidence that the government 345 00:18:22,280 --> 00:18:24,679 Speaker 8: doesn't survive, then you know it's very likely that it 346 00:18:24,680 --> 00:18:29,040 Speaker 8: will happen. But I think the other argument is independent 347 00:18:29,119 --> 00:18:32,320 Speaker 8: of this, and it's really linked to the worries around 348 00:18:33,160 --> 00:18:36,720 Speaker 8: European growth and more genuinely, when you look at growth 349 00:18:36,760 --> 00:18:40,800 Speaker 8: in developed markets you know, recent year and then expected 350 00:18:40,880 --> 00:18:43,280 Speaker 8: for the years to come, it's more around you know, 351 00:18:43,760 --> 00:18:46,920 Speaker 8: one point six point eight percent, whether you know you 352 00:18:47,000 --> 00:18:49,760 Speaker 8: look at you know, emerging markets, you're around four percent. 353 00:18:50,320 --> 00:18:53,920 Speaker 8: So the risk of recession is also lower in emerging 354 00:18:53,920 --> 00:18:55,040 Speaker 8: markets than developed markets. 355 00:18:55,080 --> 00:18:55,560 Speaker 6: At the moment. 356 00:18:56,240 --> 00:18:59,919 Speaker 2: That was Maria Jacquo there from Edmund the Rothschild Asset 357 00:19:00,040 --> 00:19:03,359 Speaker 2: Management France. She was speaking to my colleagues Critie Gupta 358 00:19:03,400 --> 00:19:07,480 Speaker 2: and Anna Edwards on Bloomberg Television. So Barnier is the 359 00:19:07,560 --> 00:19:11,399 Speaker 2: oldest premier in the history of the French Republic. So 360 00:19:11,520 --> 00:19:15,600 Speaker 2: will his experience be enough to see him through France's 361 00:19:15,600 --> 00:19:20,479 Speaker 2: political storm. It's something I've been discussing with Bloomberg's Caroline Connor, 362 00:19:20,840 --> 00:19:22,360 Speaker 2: our reporter in Paris. 363 00:19:22,960 --> 00:19:26,280 Speaker 11: It took two months for President Macron to name new 364 00:19:26,320 --> 00:19:28,920 Speaker 11: Prime Minister, Michelle Bernier. 365 00:19:28,760 --> 00:19:31,040 Speaker 6: Since the second one of the snap elections on July. 366 00:19:30,880 --> 00:19:34,600 Speaker 11: Seventh, and then it took another two weeks for Michelle 367 00:19:34,600 --> 00:19:38,960 Speaker 11: Barnier to actually form his government. In the end, he 368 00:19:39,040 --> 00:19:42,960 Speaker 11: unvelved it over the last weekend. You've got foreign ministers, 369 00:19:43,200 --> 00:19:46,639 Speaker 11: health men, health women, with most of them coming from 370 00:19:46,880 --> 00:19:50,960 Speaker 11: the center and from Macon's ranks, the Renaissance Party, a 371 00:19:51,000 --> 00:19:55,800 Speaker 11: few from the Republicans, which is Michelle Barnier's party, and 372 00:19:56,040 --> 00:19:58,359 Speaker 11: just one from the center left. 373 00:19:58,359 --> 00:19:59,960 Speaker 6: The Justice minister did Jimmy. 374 00:20:00,880 --> 00:20:03,480 Speaker 11: One surprising thing I could say, but this new government 375 00:20:03,560 --> 00:20:06,640 Speaker 11: is that it doesn't really include a lot of heavyweights, 376 00:20:07,040 --> 00:20:10,639 Speaker 11: apart from maybe Bruno Retaillo, who was the leader of 377 00:20:10,680 --> 00:20:14,280 Speaker 11: the Republicans in the Senate and is now Interior Minister. 378 00:20:15,280 --> 00:20:18,520 Speaker 2: So Michelle Barney is due to give a big policy 379 00:20:18,560 --> 00:20:21,199 Speaker 2: speech then in the coming days. Why is that going 380 00:20:21,240 --> 00:20:22,080 Speaker 2: to be so important? 381 00:20:23,040 --> 00:20:25,959 Speaker 11: So the reason it's very important is because it could 382 00:20:26,160 --> 00:20:31,359 Speaker 11: trigger or not the first vote of no confidence against 383 00:20:31,840 --> 00:20:34,840 Speaker 11: this Barnie government. We know, of course this government is 384 00:20:34,960 --> 00:20:38,520 Speaker 11: very fragile, given there is no majority in Parliament, and 385 00:20:38,600 --> 00:20:40,959 Speaker 11: already this week you've seen a lot of controversies, for 386 00:20:41,000 --> 00:20:45,680 Speaker 11: example with the new Finance Minister Antoine Armont, who said 387 00:20:45,720 --> 00:20:49,119 Speaker 11: the National Rally was not part of the so called 388 00:20:49,560 --> 00:20:52,639 Speaker 11: Republican front. The problem, as you know, is that the 389 00:20:52,760 --> 00:20:56,000 Speaker 11: National Valley has become kind of the king maker in 390 00:20:56,080 --> 00:20:59,879 Speaker 11: Parliament because if they do support any emotion of sansuur, 391 00:21:00,560 --> 00:21:03,919 Speaker 11: then the government can collapse. So Michelle Barnie had to 392 00:21:04,000 --> 00:21:08,600 Speaker 11: call Mariinlopen personally to reassure her, and Antoine Armore then 393 00:21:08,680 --> 00:21:12,440 Speaker 11: send an email saying that indeed all the parties, including 394 00:21:12,480 --> 00:21:15,600 Speaker 11: the National Value will be invited to the Finance Ministry 395 00:21:15,960 --> 00:21:20,080 Speaker 11: to discuss the state of public finances. So there was 396 00:21:20,119 --> 00:21:22,440 Speaker 11: a lot of back pedaling here, and you can see 397 00:21:22,480 --> 00:21:26,840 Speaker 11: that any comment in the political debate could actually backfire 398 00:21:27,200 --> 00:21:28,400 Speaker 11: against the Barney government. 399 00:21:29,200 --> 00:21:33,560 Speaker 2: So lots of tricky issues then for Barnier. But in 400 00:21:33,600 --> 00:21:36,240 Speaker 2: all of this, what does the public want to hear 401 00:21:36,359 --> 00:21:37,400 Speaker 2: from Michelle Barnier? 402 00:21:38,119 --> 00:21:42,040 Speaker 11: Probably not that austerity measures are coming, and yet that's 403 00:21:42,080 --> 00:21:46,320 Speaker 11: probably what's coming, given the deficit, according to the Budget Minister, 404 00:21:46,440 --> 00:21:49,600 Speaker 11: could actually rise to more than six percent of GDP 405 00:21:50,359 --> 00:21:54,000 Speaker 11: this year. Then the right wing electorate, of course, is 406 00:21:54,040 --> 00:21:58,359 Speaker 11: also keen to hear more about new measures to control immigration. 407 00:21:59,160 --> 00:22:00,639 Speaker 6: The left wing wants more. 408 00:22:00,520 --> 00:22:03,560 Speaker 11: Social justice and most of the French would actually like 409 00:22:03,760 --> 00:22:07,120 Speaker 11: Barnier to abandon the pension reform which passed last year 410 00:22:07,160 --> 00:22:10,240 Speaker 11: and raised the retirement age to sixty four years old. 411 00:22:10,560 --> 00:22:14,320 Speaker 11: But that's unlikely given Barnier needs to do some savings 412 00:22:14,359 --> 00:22:16,560 Speaker 11: in the budget and he's already said he'll only make 413 00:22:16,880 --> 00:22:20,320 Speaker 11: a few adjustments to the pension reform. 414 00:22:20,400 --> 00:22:22,280 Speaker 2: Barney is new to as well as Prime Minisiciter, but 415 00:22:22,320 --> 00:22:25,439 Speaker 2: obviously is an old hand in terms of politics. What 416 00:22:25,560 --> 00:22:30,000 Speaker 2: has he said so farther about his parties in this role. 417 00:22:30,359 --> 00:22:32,800 Speaker 11: Well, he keeps repeating that he's going to tell the 418 00:22:32,960 --> 00:22:37,160 Speaker 11: truth even if the truth is difficult to hear, meaning 419 00:22:37,200 --> 00:22:40,960 Speaker 11: that even if there is some mysterity measures in the 420 00:22:41,000 --> 00:22:45,080 Speaker 11: short term, these are necessary. He's repeated that the budget 421 00:22:45,080 --> 00:22:48,560 Speaker 11: situation is very serious. Is also said he wants to 422 00:22:48,600 --> 00:22:53,159 Speaker 11: fight against social fraud, those who take advantage, perhaps of 423 00:22:53,240 --> 00:22:55,400 Speaker 11: the welfare state when they shouldn't. 424 00:22:56,040 --> 00:22:56,720 Speaker 6: Another of his. 425 00:22:56,720 --> 00:23:00,600 Speaker 11: Priorities again is to fight illegal immigration. But he's also 426 00:23:00,680 --> 00:23:04,159 Speaker 11: tried to reassure the left wing on some social laws 427 00:23:04,200 --> 00:23:07,359 Speaker 11: such as abortion and gay marriage, saying he's not going 428 00:23:07,440 --> 00:23:08,199 Speaker 11: to touch any of this. 429 00:23:09,200 --> 00:23:12,240 Speaker 2: One of the other priorities is going to be the budget. 430 00:23:12,960 --> 00:23:15,720 Speaker 2: France has got to submit a draft copy to the 431 00:23:15,760 --> 00:23:19,600 Speaker 2: EU by mid October. What are the main sticking points 432 00:23:19,600 --> 00:23:20,600 Speaker 2: with that issue? 433 00:23:20,880 --> 00:23:23,640 Speaker 11: Again, the deficit could slip to as much as six 434 00:23:23,680 --> 00:23:26,320 Speaker 11: percent or even more this year when the initial forecast 435 00:23:26,560 --> 00:23:30,120 Speaker 11: was five point one percent, so some savings will definitely 436 00:23:30,160 --> 00:23:33,200 Speaker 11: be needed. According to the Bando France governor, as much 437 00:23:33,280 --> 00:23:36,840 Speaker 11: as one hundred billion euros of savings are actually needed 438 00:23:36,880 --> 00:23:39,679 Speaker 11: to bring the deficit back to the three percent target 439 00:23:39,720 --> 00:23:43,400 Speaker 11: within five years, so that could be around twenty billions 440 00:23:43,440 --> 00:23:46,720 Speaker 11: a year at least of spending cuts. We are even 441 00:23:46,760 --> 00:23:49,480 Speaker 11: taken into account the increase of spending that we saw 442 00:23:49,520 --> 00:23:53,760 Speaker 11: from local authorities for example this year. So Badney has 443 00:23:53,800 --> 00:23:58,199 Speaker 11: already said that he could increase some taxes for multinationals 444 00:23:58,240 --> 00:24:02,680 Speaker 11: for the wealthiest individual a few areas are being explored, 445 00:24:02,840 --> 00:24:06,679 Speaker 11: for example increasing the thirty percent flat tax on capitol, 446 00:24:07,040 --> 00:24:09,400 Speaker 11: which was of course one of the key measures of 447 00:24:09,480 --> 00:24:14,080 Speaker 11: Imaguel Macroon. There's also discussions of an exceptional tax on 448 00:24:14,240 --> 00:24:18,720 Speaker 11: super profits of some multinationals, or perhaps a tax on 449 00:24:18,840 --> 00:24:25,040 Speaker 11: share buybacks, and also of course targeted income tax for 450 00:24:25,359 --> 00:24:27,679 Speaker 11: the wealthiest individuals. 451 00:24:28,320 --> 00:24:31,680 Speaker 2: Well, speaking of President Emmanuel Macon, what is the relationship 452 00:24:32,040 --> 00:24:36,040 Speaker 2: alike between Barnier and macro How will barneer is difficult 453 00:24:36,040 --> 00:24:40,280 Speaker 2: decisions as you laid them out affect macro his popularity 454 00:24:40,359 --> 00:24:41,480 Speaker 2: is standing as president. 455 00:24:41,920 --> 00:24:45,760 Speaker 11: Well, it's quite interesting because of course email Macroon has 456 00:24:45,960 --> 00:24:50,520 Speaker 11: very low popularity, especially since the snap elections. About twenty 457 00:24:50,600 --> 00:24:53,280 Speaker 11: five percent of the French currently think that Macron is 458 00:24:53,320 --> 00:24:56,680 Speaker 11: a good president and that's the lowest popularity has ever 459 00:24:56,760 --> 00:25:00,840 Speaker 11: had since his first elections in twenty seventeen, seven years ago, 460 00:25:01,480 --> 00:25:06,320 Speaker 11: initially when Michelle Barnie was named the worst kind of 461 00:25:06,520 --> 00:25:11,359 Speaker 11: nomination effect. So the first polls were showing that he 462 00:25:11,440 --> 00:25:15,960 Speaker 11: had fifty seven percent of positive opinion. But the state 463 00:25:16,000 --> 00:25:18,600 Speaker 11: of grace actually didn't last very long. And there's another 464 00:25:18,680 --> 00:25:22,840 Speaker 11: recent poll by Udoxa that says that fifty nine percent 465 00:25:22,920 --> 00:25:25,320 Speaker 11: of the French thing that Bardi is not a good 466 00:25:25,400 --> 00:25:29,600 Speaker 11: prime minister and many are skeptical about his capacity to 467 00:25:29,640 --> 00:25:34,479 Speaker 11: actually pass a budget. But that's also mainly because the 468 00:25:34,480 --> 00:25:38,960 Speaker 11: French think that President Macon is actually holding the reins 469 00:25:39,160 --> 00:25:39,640 Speaker 11: in the back. 470 00:25:40,160 --> 00:25:44,280 Speaker 2: My thanks there to Bloombery's Caroline Connor in France. So 471 00:25:44,480 --> 00:25:48,120 Speaker 2: we look ahead to Michelle Barnier and a tricky speech 472 00:25:48,240 --> 00:25:51,679 Speaker 2: to deliver in the next few days. I'm Caroline Hepge 473 00:25:51,760 --> 00:25:54,200 Speaker 2: here in London. You can catch us every weekday morning 474 00:25:54,200 --> 00:25:57,199 Speaker 2: for Bloomberg Daybreak Europe, beginning at six am in London. 475 00:25:57,320 --> 00:25:58,840 Speaker 2: That's one am on Wall Street. 476 00:25:58,840 --> 00:26:02,080 Speaker 1: Tom, Thank you Caroline, and coming up on Bloomberg day 477 00:26:02,080 --> 00:26:04,720 Speaker 1: Break weekend to look ahead to what China's Golden Week 478 00:26:05,080 --> 00:26:08,280 Speaker 1: will mean to the Chinese economy. I'm Tom Busby, and 479 00:26:08,400 --> 00:26:21,919 Speaker 1: this is Bloomberg. This is Bloomberg day Break weekend, our 480 00:26:21,920 --> 00:26:24,159 Speaker 1: global look ahead at the top stories for investors in 481 00:26:24,200 --> 00:26:27,120 Speaker 1: the coming week. I'm Tom Busby in New York. This year, 482 00:26:27,160 --> 00:26:30,440 Speaker 1: the People's Republic of China will celebrate as seventy fifth anniversary. 483 00:26:30,520 --> 00:26:34,600 Speaker 1: This week, the country celebrates its annual Golden Week travel holidays, 484 00:26:34,600 --> 00:26:37,679 Speaker 1: and this Tuesday, it's National Day in China. For more 485 00:26:37,760 --> 00:26:40,280 Speaker 1: on what all that means to the Chinese economy, we 486 00:26:40,359 --> 00:26:43,280 Speaker 1: turned to Bloomberg Daybreak Asia co host Doug Krisner. 487 00:26:43,760 --> 00:26:46,439 Speaker 3: Tom the holiday may provide the first test as to 488 00:26:46,480 --> 00:26:50,440 Speaker 3: whether consumers will respond to this blitz of economic stimulus 489 00:26:50,520 --> 00:26:53,719 Speaker 3: that was unveiled last week. Several key interest rates are 490 00:26:53,760 --> 00:26:57,120 Speaker 3: being lowered, the level of required bank capital is being 491 00:26:57,160 --> 00:27:00,879 Speaker 3: reduced so more lending is feasible, and there will be 492 00:27:00,920 --> 00:27:04,080 Speaker 3: support for both the housing and equity markets. This plan, 493 00:27:04,119 --> 00:27:07,600 Speaker 3: i think it's fair to say, is aggressive and comprehensive, 494 00:27:07,720 --> 00:27:10,760 Speaker 3: and on top of that, in a highly unusual move, 495 00:27:10,840 --> 00:27:14,240 Speaker 3: the government will provide one off cash handouts within the 496 00:27:14,280 --> 00:27:19,199 Speaker 3: coming week to disadvantaged groups, including orphans and those in 497 00:27:19,280 --> 00:27:22,199 Speaker 3: extreme poverty. Now for a closer look at what we 498 00:27:22,280 --> 00:27:26,280 Speaker 3: may see in Chinese consumer behavior during the Golden Week holiday, 499 00:27:26,600 --> 00:27:30,880 Speaker 3: I'm joined by John Leeu, Bloomberg Executive editor in Beijing, 500 00:27:31,400 --> 00:27:35,960 Speaker 3: and Katya Dmitrieva, who is Bloomberg Asia Economics correspondent in 501 00:27:36,119 --> 00:27:39,520 Speaker 3: Hong Kong. Thanks to both of you for joining John. 502 00:27:39,560 --> 00:27:41,919 Speaker 3: Since you're in the capital city, let me begin with you. 503 00:27:42,720 --> 00:27:44,520 Speaker 3: One of the critical issues I think it's fair to 504 00:27:44,560 --> 00:27:47,919 Speaker 3: say that it's holding back a lot of domestic recovery 505 00:27:48,000 --> 00:27:51,960 Speaker 3: is this sentiment problem, particularly where consumers are involved. And 506 00:27:52,040 --> 00:27:56,800 Speaker 3: I'm wondering from your perspective, how that's distributed across the country. 507 00:27:57,000 --> 00:28:01,000 Speaker 12: I think there's a big difference between the big cities, 508 00:28:01,160 --> 00:28:04,560 Speaker 12: your mega cities like Beijing and Shahai and Shenjin, and 509 00:28:04,960 --> 00:28:10,120 Speaker 12: smaller towns and the countryside. And that's just a reflection 510 00:28:10,280 --> 00:28:13,360 Speaker 12: of the fact that there's a lot more wealth in Beijing, 511 00:28:13,400 --> 00:28:16,399 Speaker 12: Shahai and Shinjin than there is in the countryside. And 512 00:28:16,440 --> 00:28:19,600 Speaker 12: in any economic downturn, it's always sort of the people 513 00:28:19,600 --> 00:28:21,399 Speaker 12: at the top that feel it the least and the 514 00:28:21,400 --> 00:28:23,040 Speaker 12: people at the bottom that feel it the most. 515 00:28:23,240 --> 00:28:25,960 Speaker 3: Katya is the elephant in the room. The property market, 516 00:28:26,040 --> 00:28:28,000 Speaker 3: I think, is are you going to tell me yes? 517 00:28:28,320 --> 00:28:32,879 Speaker 10: Yes, I am yes. The property sector is still the 518 00:28:32,960 --> 00:28:37,800 Speaker 10: number one issue. It's so much more so in China 519 00:28:37,800 --> 00:28:40,760 Speaker 10: than in other countries. Just looking at the data. I mean, 520 00:28:40,840 --> 00:28:46,400 Speaker 10: ninety percent of Chinese people own their homes. You've got 521 00:28:46,640 --> 00:28:50,360 Speaker 10: more than seventy percent of household wealth that's tied up 522 00:28:50,400 --> 00:28:53,040 Speaker 10: in properties. It's quite different from other parts of the 523 00:28:53,040 --> 00:28:56,840 Speaker 10: world where a lot more people rent. They don't They're 524 00:28:56,840 --> 00:28:59,800 Speaker 10: not as exposed to the property sector. So as long 525 00:28:59,840 --> 00:29:01,840 Speaker 10: as you have weakness there, as long as you still 526 00:29:01,880 --> 00:29:05,040 Speaker 10: have prices falling, the demand is just not going to 527 00:29:05,080 --> 00:29:10,520 Speaker 10: come back. And the stimulus package address that on the margin. 528 00:29:10,720 --> 00:29:13,480 Speaker 10: But you know, even having a lower down payment for 529 00:29:13,520 --> 00:29:16,360 Speaker 10: a second home, I mean, if your first home is 530 00:29:16,400 --> 00:29:20,000 Speaker 10: still below the value it was pre pandemic and it's 531 00:29:20,040 --> 00:29:23,800 Speaker 10: not clear when it'll go back up, you probably aren't 532 00:29:23,800 --> 00:29:26,520 Speaker 10: going to be motivated to spend that much more. 533 00:29:26,840 --> 00:29:29,160 Speaker 3: John Interest rates in China have been low for quite 534 00:29:29,240 --> 00:29:31,880 Speaker 3: some time, and we're talking about, you know, very very 535 00:29:31,920 --> 00:29:35,960 Speaker 3: small adjustments to the downside, and yet those lower rates 536 00:29:36,000 --> 00:29:40,320 Speaker 3: really haven't reinvigorated the economy, and we have seen kind 537 00:29:40,320 --> 00:29:43,680 Speaker 3: of a deflationary spiral, which I would imagine has been very, 538 00:29:43,800 --> 00:29:48,960 Speaker 3: very troubling to authorities in Beijing. How are people impacted 539 00:29:49,000 --> 00:29:52,480 Speaker 3: when they see this protracted period of inflation, How is 540 00:29:52,520 --> 00:29:53,840 Speaker 3: it showing up anecdotally? 541 00:29:54,360 --> 00:29:58,479 Speaker 12: I think the trend that we've seen is people have 542 00:29:58,600 --> 00:30:02,720 Speaker 12: focused much more households and corporates much more on pain 543 00:30:02,920 --> 00:30:07,000 Speaker 12: down their debt than we have people borrowing to make 544 00:30:07,040 --> 00:30:10,360 Speaker 12: additional purchases, to make new investments, to build a factory, 545 00:30:10,400 --> 00:30:13,320 Speaker 12: et cetera. And I think it was maybe two months 546 00:30:13,360 --> 00:30:15,080 Speaker 12: ago we had the first time in a long time 547 00:30:15,120 --> 00:30:19,840 Speaker 12: where bank lending actually contracted on a monthly basis, And 548 00:30:19,880 --> 00:30:24,240 Speaker 12: so you're seeing people are doing whatever they can to 549 00:30:24,280 --> 00:30:26,160 Speaker 12: pay down the debt, and so that I think is 550 00:30:26,240 --> 00:30:31,320 Speaker 12: a reflection of uncertainty about the future, about future earnings, 551 00:30:31,360 --> 00:30:35,640 Speaker 12: about their future economic outlook, and that is what's keeping 552 00:30:35,680 --> 00:30:39,800 Speaker 12: people from spending. And I think why more people are 553 00:30:39,880 --> 00:30:41,360 Speaker 12: saving as opposed to borrowing. 554 00:30:41,400 --> 00:30:43,840 Speaker 3: The savings point, I think is very interesting. I spoke 555 00:30:43,880 --> 00:30:48,440 Speaker 3: earlier with p Chan Lu, who is Asia economistic Fidelity International, 556 00:30:48,480 --> 00:30:50,440 Speaker 3: and one of the things that I wanted to get 557 00:30:50,480 --> 00:30:53,600 Speaker 3: her take on was the indicators that we should be 558 00:30:53,680 --> 00:30:57,360 Speaker 3: watching to understand the health of the Chinese consumer. 559 00:30:57,680 --> 00:31:01,200 Speaker 13: So firstly, the consumer confidence in DEX. I think everybody 560 00:31:01,240 --> 00:31:04,600 Speaker 13: knew that the pandemic has hard hit the household sector, 561 00:31:05,040 --> 00:31:08,920 Speaker 13: and consumer confidence index has been coming down sharply, but 562 00:31:09,040 --> 00:31:12,080 Speaker 13: at this moment, on the path of recovery. We have 563 00:31:12,320 --> 00:31:17,040 Speaker 13: actually seen consumer sentiments stabilizing at low levels, so they 564 00:31:17,080 --> 00:31:22,360 Speaker 13: are not rebounding sharply. Neither did they deteriorate significantly from 565 00:31:22,480 --> 00:31:25,080 Speaker 13: where we are right now. I think the underlying reason 566 00:31:25,160 --> 00:31:28,320 Speaker 13: for that is perhaps because the divergent pattern of the 567 00:31:28,360 --> 00:31:33,080 Speaker 13: consumption that's been emerging from both the wealth impact on 568 00:31:33,160 --> 00:31:36,160 Speaker 13: property sector as well as some of the consumers might 569 00:31:36,200 --> 00:31:39,560 Speaker 13: have been hurt by the employment pressure as well as 570 00:31:39,760 --> 00:31:44,120 Speaker 13: income growth. So overall, I think another indicator we're also 571 00:31:44,240 --> 00:31:49,520 Speaker 13: working out for closely is the pboc's depositor survey. On 572 00:31:49,600 --> 00:31:55,200 Speaker 13: that survey, we see divergence between depositors preference oversaving, consumption 573 00:31:55,320 --> 00:32:00,200 Speaker 13: and investment. We have observed wider divergence between saving and ines. 574 00:32:00,920 --> 00:32:04,320 Speaker 13: But surprisingly, I think the consumption is more or less 575 00:32:04,320 --> 00:32:08,200 Speaker 13: stabilizing even though as stew moderate levels, but they are 576 00:32:08,200 --> 00:32:10,200 Speaker 13: on a gradual recovery pattern right now. 577 00:32:10,280 --> 00:32:14,040 Speaker 3: She is p Chanlou from Fidelity International. Katia, let me 578 00:32:14,080 --> 00:32:16,280 Speaker 3: to go to you next. Is there anything that the 579 00:32:16,320 --> 00:32:20,520 Speaker 3: government can do to encourage people to release money from 580 00:32:20,560 --> 00:32:22,880 Speaker 3: their savings accounts and put that money to work in 581 00:32:22,920 --> 00:32:23,640 Speaker 3: the economy. 582 00:32:23,880 --> 00:32:26,440 Speaker 10: Yeah, there are a few things. I mean, we talked 583 00:32:26,440 --> 00:32:31,840 Speaker 10: about the property sector. I think more guarantees would certainly help, 584 00:32:32,760 --> 00:32:36,280 Speaker 10: just to see those prices start to rise and consumer 585 00:32:36,360 --> 00:32:39,240 Speaker 10: sentiments start to improve a bit. We also didn't even 586 00:32:39,320 --> 00:32:43,800 Speaker 10: mention the job sector. We didn't even talk about unemployment 587 00:32:43,920 --> 00:32:48,560 Speaker 10: and the labor market, where unemployment for youth is at 588 00:32:48,600 --> 00:32:51,560 Speaker 10: an all time high this year, even after the government 589 00:32:51,600 --> 00:32:57,520 Speaker 10: made some revisions to that data set. So the jobs market, 590 00:32:57,520 --> 00:32:59,760 Speaker 10: if you're going to work and of course not getting 591 00:32:59,760 --> 00:33:04,000 Speaker 10: both is let alone job cuts or getting your pay cut. 592 00:33:04,680 --> 00:33:07,080 Speaker 10: That's also one big factor here as well, because if 593 00:33:07,080 --> 00:33:10,000 Speaker 10: the money is not coming in, you are also feeling 594 00:33:10,000 --> 00:33:13,240 Speaker 10: a little less likely to spend, especially on holidays, during 595 00:33:13,240 --> 00:33:16,640 Speaker 10: holidays when we see in China a couple key holidays 596 00:33:16,680 --> 00:33:19,160 Speaker 10: each year when there's lots of time off and people 597 00:33:19,200 --> 00:33:21,640 Speaker 10: tend to travel quite a bit and make those big 598 00:33:21,800 --> 00:33:26,600 Speaker 10: item purchases for the year. So there are certain big things. 599 00:33:26,640 --> 00:33:28,880 Speaker 10: I think the stimulus package was one of them. Was 600 00:33:28,920 --> 00:33:32,360 Speaker 10: one way for the government to say, okay, we acknowledge 601 00:33:32,400 --> 00:33:36,000 Speaker 10: that we acknowledge that things are getting a little rocky here. 602 00:33:36,480 --> 00:33:39,000 Speaker 10: Which had been a question for economists for some time 603 00:33:39,120 --> 00:33:42,600 Speaker 10: is whether the government even knew about how bad the 604 00:33:42,640 --> 00:33:45,160 Speaker 10: situation was or wanted to address it. So this is 605 00:33:45,200 --> 00:33:48,440 Speaker 10: at least an improvement and sentiment. The next thing they 606 00:33:48,480 --> 00:33:52,200 Speaker 10: have to do is perhaps more targeted. You know, could 607 00:33:52,200 --> 00:33:55,240 Speaker 10: you targeted stimulus. I've heard from economists in terms of 608 00:33:55,920 --> 00:33:59,920 Speaker 10: fiscal stimulus similar to what they've done during the pandemic. 609 00:34:00,320 --> 00:34:02,600 Speaker 10: But it really does come back to, at the end 610 00:34:02,640 --> 00:34:06,360 Speaker 10: of the day, the property sector and the property sector improvement. 611 00:34:06,440 --> 00:34:09,080 Speaker 10: Kind of like chicken and egg. With a lot of 612 00:34:09,080 --> 00:34:11,480 Speaker 10: these companies, you have an improvement in the property sector, 613 00:34:12,000 --> 00:34:16,359 Speaker 10: consumers are happier, companies are starting to invest more, higher more. 614 00:34:16,360 --> 00:34:18,400 Speaker 10: It's sort of that good virtuous cycle. 615 00:34:18,600 --> 00:34:21,640 Speaker 3: John, I'm recalling a program that some referred to as 616 00:34:21,719 --> 00:34:24,480 Speaker 3: kind of cash for clunkers. Do you remember that where 617 00:34:24,600 --> 00:34:28,120 Speaker 3: people were being given some sort of incentive to trade 618 00:34:28,200 --> 00:34:31,480 Speaker 3: up in home appliances. Was that very effective? 619 00:34:31,280 --> 00:34:33,319 Speaker 12: They've been trying to do that. They did it during 620 00:34:33,360 --> 00:34:36,439 Speaker 12: the financial crisis back in eight they've rolled it out 621 00:34:36,480 --> 00:34:41,319 Speaker 12: this year. We've seen some limited take up. I think 622 00:34:41,400 --> 00:34:45,200 Speaker 12: the criticism I've heard most about that plan is that 623 00:34:45,280 --> 00:34:48,319 Speaker 12: what it really does is it brings forward purchases. So 624 00:34:48,600 --> 00:34:52,400 Speaker 12: people who were going to get a new refrigerator anyway, 625 00:34:52,480 --> 00:34:54,560 Speaker 12: people who are going to get a new car anyway. 626 00:34:54,600 --> 00:34:56,440 Speaker 12: Now they're going to do it now instead of waiting 627 00:34:56,480 --> 00:34:59,799 Speaker 12: three or four or five months. It's not really generating 628 00:35:00,080 --> 00:35:02,520 Speaker 12: new demand because if you didn't have the money to 629 00:35:02,560 --> 00:35:05,480 Speaker 12: begin with to get a new refrigerator, you know, getting 630 00:35:05,520 --> 00:35:08,480 Speaker 12: ten percent or fifteen percent back probably is not going 631 00:35:08,520 --> 00:35:09,880 Speaker 12: to change your decision making. 632 00:35:09,680 --> 00:35:12,720 Speaker 3: On that contiera. In the context of the Golden Week holiday, 633 00:35:12,760 --> 00:35:16,600 Speaker 3: I think of spending on discretionary items. Jewelry is in there. 634 00:35:16,719 --> 00:35:20,239 Speaker 3: I also think of travel. Do we have any indication 635 00:35:20,400 --> 00:35:23,440 Speaker 3: that the appetite now is at a level where it 636 00:35:23,480 --> 00:35:24,480 Speaker 3: may move the needle. 637 00:35:24,960 --> 00:35:30,520 Speaker 10: Consumer sentiment is near all time lows in China right now, 638 00:35:31,400 --> 00:35:35,799 Speaker 10: and it is tough to get engauge. Aside from that, 639 00:35:35,960 --> 00:35:39,400 Speaker 10: I mean in terms of how consumers are feeling. We 640 00:35:39,440 --> 00:35:42,600 Speaker 10: can see on social media, for example. That's why we 641 00:35:42,640 --> 00:35:46,560 Speaker 10: write so much more about social media sentiment in China 642 00:35:46,600 --> 00:35:50,439 Speaker 10: than other countries. And there's this term that is going 643 00:35:50,480 --> 00:35:54,239 Speaker 10: around called the garbage economy, and that's something that's been 644 00:35:55,000 --> 00:35:57,319 Speaker 10: that's been a couple, you know, almost a year now, 645 00:35:57,360 --> 00:36:01,640 Speaker 10: where people online have been talking about this this current 646 00:36:01,760 --> 00:36:05,280 Speaker 10: period as sort of the worst you know, the silver 647 00:36:05,360 --> 00:36:08,160 Speaker 10: lining of courses that it can't get any worse. But 648 00:36:08,200 --> 00:36:12,520 Speaker 10: the idea there is that you know, people are just 649 00:36:12,640 --> 00:36:16,040 Speaker 10: not in a good mood to spend during the May 650 00:36:16,120 --> 00:36:18,400 Speaker 10: Day holiday. This year we did see a bit of 651 00:36:18,400 --> 00:36:22,640 Speaker 10: a pickup compared to last year. Kind of a mixed picture, 652 00:36:23,640 --> 00:36:26,680 Speaker 10: but this upcoming holiday is one of the bigger ones 653 00:36:26,880 --> 00:36:29,680 Speaker 10: in China and so places that I'll be looking for. 654 00:36:29,719 --> 00:36:33,520 Speaker 10: In addition to the indicators that we're mentioned is travel spending, 655 00:36:33,680 --> 00:36:38,040 Speaker 10: so plane tickets, train tickets, buses. We're seeing this trend 656 00:36:38,320 --> 00:36:42,440 Speaker 10: of people just traveling more locally, so less travel abroad 657 00:36:42,600 --> 00:36:46,719 Speaker 10: to places like Thailand, Malaysia, South Korea, a lot more 658 00:36:46,719 --> 00:36:49,600 Speaker 10: internal travel, but it would be interesting to see if 659 00:36:49,600 --> 00:36:52,319 Speaker 10: there is more international travel at this time of year. 660 00:36:53,080 --> 00:36:57,480 Speaker 10: There's also a lot more purchases of you know, think 661 00:36:57,560 --> 00:37:00,960 Speaker 10: of like food or clothing, those kinds of smaller items. 662 00:37:00,960 --> 00:37:05,480 Speaker 10: We could hear from potentially executives commenting on that or 663 00:37:05,560 --> 00:37:07,799 Speaker 10: during the next quarter, which I know is a bit 664 00:37:07,840 --> 00:37:10,120 Speaker 10: of time to wait for, but yeah, there's a couple 665 00:37:10,160 --> 00:37:10,879 Speaker 10: of places to look. 666 00:37:11,040 --> 00:37:13,120 Speaker 3: John. I refer to the fact that in the last 667 00:37:13,160 --> 00:37:15,839 Speaker 3: week the government announced that it will provide some one 668 00:37:15,960 --> 00:37:20,040 Speaker 3: off cash handouts to disadvantaged groups. Has this happened in 669 00:37:20,120 --> 00:37:22,000 Speaker 3: the past, and then talk to me a little bit 670 00:37:22,000 --> 00:37:24,920 Speaker 3: about the symbolism and how that may resonate across the 671 00:37:24,960 --> 00:37:25,840 Speaker 3: broader economy. 672 00:37:26,160 --> 00:37:29,480 Speaker 12: This sort of handout is pretty rare. The government does 673 00:37:29,760 --> 00:37:33,920 Speaker 12: give sort of cash handouts to disadvantage groups ahead of 674 00:37:33,960 --> 00:37:37,160 Speaker 12: the Lunar New Year festival every year, and they have 675 00:37:37,320 --> 00:37:39,640 Speaker 12: in the past before We're coming up on the National 676 00:37:39,719 --> 00:37:41,840 Speaker 12: Day holiday, so this is celebrating the founding of the 677 00:37:41,840 --> 00:37:45,080 Speaker 12: People's Republic. They have in the past given sort of 678 00:37:45,120 --> 00:37:48,480 Speaker 12: cash out to World War Two veterans ahead of this holiday. 679 00:37:49,000 --> 00:37:52,280 Speaker 12: This is relatively rare that they would in this instance 680 00:37:52,440 --> 00:37:57,880 Speaker 12: give cash out to lower income earning brackets at this time. 681 00:37:57,960 --> 00:38:03,000 Speaker 12: That is fairly unusual. They are also offering assistance to 682 00:38:03,360 --> 00:38:06,640 Speaker 12: college graduates who have not found a job in two years. 683 00:38:06,440 --> 00:38:09,640 Speaker 12: That is unusual as well. There's been a big debate 684 00:38:10,120 --> 00:38:13,440 Speaker 12: here in Beijing among policy makers about whether giving cash 685 00:38:13,480 --> 00:38:18,000 Speaker 12: directly to the consumer would actually do any good. The 686 00:38:18,120 --> 00:38:20,640 Speaker 12: sort of argument against it is that because the savings 687 00:38:20,719 --> 00:38:22,480 Speaker 12: rate is so high, a lot of people might just 688 00:38:22,520 --> 00:38:24,480 Speaker 12: take that money and save it and not spend it. 689 00:38:24,960 --> 00:38:28,560 Speaker 12: And so I think this seems to show a greater 690 00:38:29,440 --> 00:38:31,439 Speaker 12: willingness to try new things out. 691 00:38:31,760 --> 00:38:33,719 Speaker 3: John, we'll leave it there. Thank you so much for 692 00:38:33,760 --> 00:38:36,280 Speaker 3: making time to chat with us, John Lou, Bloomberg, Executive 693 00:38:36,400 --> 00:38:40,480 Speaker 3: Editor in Beijing. And thanks as well to Kntria Dmitrieva, 694 00:38:40,600 --> 00:38:44,560 Speaker 3: who is Bloomberg's Asia Economics correspondent. She's joining us from 695 00:38:44,560 --> 00:38:47,880 Speaker 3: Hong Kong, helping us understand what we may see in 696 00:38:47,880 --> 00:38:51,400 Speaker 3: the week ahead as we approach Golden Week and the 697 00:38:51,640 --> 00:38:54,799 Speaker 3: Chinese consumer. I'm Doug Prisner, and you can join Brian 698 00:38:54,840 --> 00:38:58,920 Speaker 3: Curtison myself weekdays here for Bloomberg Daybreak Asia beginning at 699 00:38:58,920 --> 00:39:02,080 Speaker 3: eight am in Hong Kong eight pm on Wall Street. 700 00:39:02,280 --> 00:39:05,040 Speaker 1: Tom, Thank you, Doug, and that does it for this 701 00:39:05,200 --> 00:39:07,920 Speaker 1: edition of Bloomberg day Break Weekend. Join us again Monday 702 00:39:07,920 --> 00:39:10,000 Speaker 1: morning at five am Wall Street time for the latest 703 00:39:10,040 --> 00:39:12,560 Speaker 1: on markets overseas and the news you need to start 704 00:39:12,600 --> 00:39:16,000 Speaker 1: your day. I'm Tom Buzzby. Stay with us. Top stories 705 00:39:16,000 --> 00:39:19,520 Speaker 1: and global business headlines are coming up right now.