1 00:00:03,400 --> 00:00:07,480 Speaker 1: This is Bloomberg Surveillance. We're in trouble with these super 2 00:00:07,560 --> 00:00:13,400 Speaker 1: low rates. We are causing financial instability, We're causing risk taking. 3 00:00:13,520 --> 00:00:16,759 Speaker 1: The world has a golden opportunity at the moment to 4 00:00:16,800 --> 00:00:21,400 Speaker 1: achieve what I call a deflationary rebalancing, the proper recession. 5 00:00:21,640 --> 00:00:26,040 Speaker 1: Yet and remember not all profit recessance proceed cats or recession. 6 00:00:26,120 --> 00:00:30,360 Speaker 1: Bloomberg Surveillance, You're link to the world of economics, finance, 7 00:00:30,440 --> 00:00:34,600 Speaker 1: and investment on Bloomberg Radio. Good morning everyone, Bloomberg Surveyna's 8 00:00:34,760 --> 00:00:37,080 Speaker 1: Michael McKee and Tom Keane. We are in New York. 9 00:00:37,120 --> 00:00:40,800 Speaker 1: We welcome all of you worldwide, all of you worldwide 10 00:00:40,840 --> 00:00:45,960 Speaker 1: and of course across this a great nation. Bloomer FM 11 00:00:46,000 --> 00:00:49,200 Speaker 1: in Washington, Good morning, Bloomberg trough hunted Boston, Bloomberg elevens 12 00:00:49,240 --> 00:00:51,839 Speaker 1: Rio in a wonderful really spring like a lot of 13 00:00:51,920 --> 00:00:55,880 Speaker 1: rain yesterday, but gorgeous New York today. And actually how 14 00:00:55,880 --> 00:00:57,640 Speaker 1: the flowers are gonna be with all the rain. Yeah, 15 00:00:57,840 --> 00:01:01,280 Speaker 1: there's a drenching, not not a wrenching like flooding and 16 00:01:01,320 --> 00:01:02,920 Speaker 1: all that, but it was it was a lot of rain. 17 00:01:03,320 --> 00:01:05,959 Speaker 1: Bloombird nine sixty the Bay. Every Good morning out in 18 00:01:05,959 --> 00:01:10,360 Speaker 1: San Francisco right here. The weather has been spectacular recently. 19 00:01:10,400 --> 00:01:13,200 Speaker 1: This morning. Bloomberg Surveillance is always in the eight o'clock hour. 20 00:01:13,680 --> 00:01:18,080 Speaker 1: Brought you by cone Resnick Accounting, Tax Advisory Trust cone 21 00:01:18,080 --> 00:01:21,880 Speaker 1: Resnick for the strategy, the insight your business needs to 22 00:01:21,959 --> 00:01:24,960 Speaker 1: move forward. Find out what cone Resnick thinks. Sign up 23 00:01:25,280 --> 00:01:28,560 Speaker 1: for insights at cone Resnick dot com. C O h 24 00:01:28,680 --> 00:01:34,200 Speaker 1: N R e z n I c kN dot com. 25 00:01:34,280 --> 00:01:37,160 Speaker 1: We have spoken him far too much recently and somehow 26 00:01:37,200 --> 00:01:39,360 Speaker 1: Mike to June he is gonna be like our best friend. 27 00:01:39,880 --> 00:01:44,319 Speaker 1: He is head of Brexit rate strategy at U b S. 28 00:01:44,520 --> 00:01:48,760 Speaker 1: I'm kidding. John Raith has had a UK rate strategy UBS, 29 00:01:48,800 --> 00:01:52,200 Speaker 1: which means he is as much as anybody I know, 30 00:01:52,320 --> 00:01:57,680 Speaker 1: knee deep and thinking about where Brexit goes. Generate once again, 31 00:01:57,720 --> 00:02:01,280 Speaker 1: good morning. Will will Brexit be the only topic of 32 00:02:01,360 --> 00:02:04,240 Speaker 1: the meeting? I mean, is it the backstory at the 33 00:02:04,280 --> 00:02:08,840 Speaker 1: G twenty meeting? Nobody wants to talk about UM. I'm 34 00:02:08,840 --> 00:02:11,040 Speaker 1: sure it will. It will come up. I think for 35 00:02:11,360 --> 00:02:14,560 Speaker 1: some of the countries there it will be a major preoccupation. 36 00:02:14,639 --> 00:02:18,160 Speaker 1: For others perhaps a little less so. We've heard some 37 00:02:18,200 --> 00:02:21,919 Speaker 1: comments today from UM from from Bullard for example, a 38 00:02:22,000 --> 00:02:25,200 Speaker 1: FED officials saying that he doesn't think Brexit, even if 39 00:02:25,200 --> 00:02:27,480 Speaker 1: it does happen, will have a major impact on the 40 00:02:27,520 --> 00:02:31,200 Speaker 1: outlook for the US, but clearly closer to Europe and 41 00:02:31,680 --> 00:02:35,079 Speaker 1: the Eurozone, and obviously in the UK itself it's it's 42 00:02:35,080 --> 00:02:40,800 Speaker 1: a very major event. Is uh have you been able 43 00:02:40,840 --> 00:02:45,880 Speaker 1: to has anybody been able to quantify the impact, say 44 00:02:45,960 --> 00:02:51,720 Speaker 1: GDP basis a national accounts basis or is it too complicated? Yeah? 45 00:02:51,760 --> 00:02:53,640 Speaker 1: I mean that the issue we have really, of course, 46 00:02:53,680 --> 00:02:57,000 Speaker 1: is there's no precedent for this. I think, um, you know, 47 00:02:57,000 --> 00:02:59,079 Speaker 1: I should stress our view is that ultimately the UK 48 00:02:59,200 --> 00:03:03,280 Speaker 1: will stay in EU, and any dip in activity that 49 00:03:03,320 --> 00:03:05,760 Speaker 1: we see in the next few months running up to 50 00:03:05,800 --> 00:03:08,600 Speaker 1: the vote on the sort of uncertainty and nervousness will 51 00:03:09,360 --> 00:03:11,839 Speaker 1: probably bounce back in the second half of the year. 52 00:03:11,919 --> 00:03:15,440 Speaker 1: But if the UK were to vote to leave, then 53 00:03:15,639 --> 00:03:17,440 Speaker 1: there's a whole range of scenarios as to how the 54 00:03:17,480 --> 00:03:20,720 Speaker 1: situation would unfold, and we've sort of categorized them as 55 00:03:20,760 --> 00:03:24,800 Speaker 1: a softer Brexit, where there's a sort of fairly friendly 56 00:03:24,840 --> 00:03:28,680 Speaker 1: and rapid re establishment of trading agreements and so on, 57 00:03:29,240 --> 00:03:31,880 Speaker 1: um and and all the way to sort of hard Brexit, 58 00:03:31,960 --> 00:03:35,880 Speaker 1: where some tough negotiating and the establishment of trade barriers 59 00:03:35,960 --> 00:03:38,760 Speaker 1: means that the hits of GDP will be larger. How 60 00:03:38,800 --> 00:03:42,000 Speaker 1: did Sterling rebound yesterday? You know, when you talk to 61 00:03:42,080 --> 00:03:45,440 Speaker 1: the experts at u b S about how a bid 62 00:03:45,480 --> 00:03:48,800 Speaker 1: comes in, what's the why that the big came in. 63 00:03:48,920 --> 00:03:51,760 Speaker 1: Was it just the street set enough and they looked 64 00:03:51,840 --> 00:03:54,800 Speaker 1: for a quick scalp or is there an underlying story 65 00:03:54,840 --> 00:04:00,080 Speaker 1: to that? What we saw is today up to well, 66 00:04:00,120 --> 00:04:02,480 Speaker 1: I mean, I suppose you have to see it in 67 00:04:02,520 --> 00:04:04,200 Speaker 1: the broader context that we were up at sort of 68 00:04:04,200 --> 00:04:06,840 Speaker 1: one fifty four not very long ago, that the decline 69 00:04:06,960 --> 00:04:10,720 Speaker 1: is dramatic and there will be temporary corrections. And that said, 70 00:04:10,760 --> 00:04:13,840 Speaker 1: you know at the moment that which is somewhat ironic 71 00:04:13,840 --> 00:04:17,200 Speaker 1: in this debate, the economic data in the UK continues 72 00:04:17,240 --> 00:04:19,599 Speaker 1: to print pretty favorably. So there are some sort of 73 00:04:19,600 --> 00:04:23,760 Speaker 1: fundamental reasons for temporary periods of Sterling strength, but in 74 00:04:23,800 --> 00:04:27,640 Speaker 1: our view, sure to be overwhelmed by this background risk 75 00:04:27,720 --> 00:04:30,400 Speaker 1: all the way through to June generates review for American 76 00:04:30,480 --> 00:04:35,039 Speaker 1: audience the flows of capital and current account within United Kingdom. 77 00:04:35,080 --> 00:04:36,840 Speaker 1: I think we've got a real idea of the flip 78 00:04:37,160 --> 00:04:40,400 Speaker 1: in current account balances in Japan. Tell me about the 79 00:04:41,120 --> 00:04:45,400 Speaker 1: current account surplus deficit flows in the United Kingdom. Yeah, 80 00:04:45,440 --> 00:04:47,640 Speaker 1: I mean that that's that you've hit on something important 81 00:04:47,680 --> 00:04:52,000 Speaker 1: in this debate. There's a large, persistent current account deficit 82 00:04:52,440 --> 00:04:56,279 Speaker 1: in the UK, exacerbated over recent years by the fact 83 00:04:56,320 --> 00:04:58,320 Speaker 1: that the UK economy has been growing so much faster 84 00:04:58,400 --> 00:05:02,800 Speaker 1: than most of those in the Eurozone. Um and often 85 00:05:02,880 --> 00:05:05,239 Speaker 1: when you see a sliding the currency on the scale 86 00:05:05,279 --> 00:05:08,520 Speaker 1: we've seen recently in Sterling, attention turns to the current 87 00:05:08,520 --> 00:05:11,600 Speaker 1: account situation, and when there is a large deficit, it 88 00:05:11,680 --> 00:05:15,640 Speaker 1: exacerbates the risks of a sort of more out of 89 00:05:15,720 --> 00:05:18,160 Speaker 1: control decline in the currency because of the fact that 90 00:05:18,520 --> 00:05:21,960 Speaker 1: external investors are having to fund the current account. The 91 00:05:22,000 --> 00:05:24,920 Speaker 1: odd solution Michael was to send Aubrey and matter and 92 00:05:25,360 --> 00:05:28,120 Speaker 1: Aubrey looks like ROSSI crawl. Send him down to take 93 00:05:28,160 --> 00:05:34,440 Speaker 1: over Barbados again. There used to be uh, the pound 94 00:05:34,520 --> 00:05:36,880 Speaker 1: is so widely used in such a deep currency is 95 00:05:38,440 --> 00:05:42,440 Speaker 1: are we Is there a chance we see a really big, 96 00:05:42,520 --> 00:05:48,200 Speaker 1: disorderly decline. There is a chance, I think you know, 97 00:05:48,279 --> 00:05:50,679 Speaker 1: we would compare this really to the to the financial 98 00:05:50,720 --> 00:05:53,200 Speaker 1: crisis when in the year running up to it. As 99 00:05:53,200 --> 00:05:57,560 Speaker 1: the financial system deteriorated, we saw Sterling weakened steadily, as 100 00:05:57,600 --> 00:05:59,680 Speaker 1: I would argue it has been recently, and then when 101 00:06:00,400 --> 00:06:03,560 Speaker 1: things went really wrong in in late two thousand and eight, 102 00:06:03,640 --> 00:06:05,839 Speaker 1: it was sterling that suffered the most because of the 103 00:06:05,920 --> 00:06:09,719 Speaker 1: UK's exposure to the financial sector being that much larger 104 00:06:09,760 --> 00:06:12,840 Speaker 1: than anyone else's. I think when the same situation again, 105 00:06:12,880 --> 00:06:16,279 Speaker 1: this sort of gradual weakening of sterling slightly to continue, 106 00:06:16,360 --> 00:06:20,320 Speaker 1: and if on the twenty June the UK has taken 107 00:06:20,320 --> 00:06:23,120 Speaker 1: the decision to leave the EU, then you could see 108 00:06:23,120 --> 00:06:26,760 Speaker 1: a much more significant fall in the following months, although 109 00:06:26,760 --> 00:06:28,960 Speaker 1: as I said before, that's not our central view. We 110 00:06:29,000 --> 00:06:30,880 Speaker 1: still think the UK will be a member of the 111 00:06:30,960 --> 00:06:34,800 Speaker 1: EU beyond the referendum. Well, at this point the currency 112 00:06:34,920 --> 00:06:42,520 Speaker 1: reflecting uncertainty. Is it x Brexit vote? Is it fairly 113 00:06:42,600 --> 00:06:46,000 Speaker 1: vald or are we seeing where you know, moves that 114 00:06:46,000 --> 00:06:50,599 Speaker 1: should be made given the current account? Um, well, I 115 00:06:50,640 --> 00:06:52,640 Speaker 1: think you know that was all factored in before as 116 00:06:52,640 --> 00:06:55,000 Speaker 1: far as currency markets were concerned. I think the only 117 00:06:55,040 --> 00:06:57,599 Speaker 1: new information in the last few months that's coincided with 118 00:06:57,600 --> 00:07:01,000 Speaker 1: this fall in sterling is is the referendum suddenly coming 119 00:07:01,000 --> 00:07:05,320 Speaker 1: into focus. The date being fixed. Um, it's becoming imminent 120 00:07:05,440 --> 00:07:10,000 Speaker 1: in in terms of markets, attention span, UM and having 121 00:07:10,040 --> 00:07:13,320 Speaker 1: and having a big impact. Another said before, you know 122 00:07:13,360 --> 00:07:15,600 Speaker 1: that the data in the UK just doesn't merit this. 123 00:07:16,280 --> 00:07:18,160 Speaker 1: I mean, if you look, just as one example, at 124 00:07:18,240 --> 00:07:20,960 Speaker 1: the UM that the p m I industries, they're stronger 125 00:07:20,960 --> 00:07:23,360 Speaker 1: in the UK than than any of the other major 126 00:07:23,400 --> 00:07:27,400 Speaker 1: global economies. Unemployment slow, retailselves are strong. You know, there's 127 00:07:27,440 --> 00:07:30,360 Speaker 1: no reason for Sterling to be undermined, like well said, 128 00:07:30,400 --> 00:07:33,720 Speaker 1: but does that imply an expectation of a slowing United 129 00:07:33,800 --> 00:07:38,600 Speaker 1: Kingdom real GDP? Yeah? Possibly, But when you look at 130 00:07:38,600 --> 00:07:43,200 Speaker 1: the extent of that implied slowing compared to where we 131 00:07:43,240 --> 00:07:46,640 Speaker 1: are in other economies already, and in the context of 132 00:07:46,680 --> 00:07:49,600 Speaker 1: the scale of the fallen Sterling, I think it goes 133 00:07:49,680 --> 00:07:52,720 Speaker 1: way beyond what what most forecasts are. I mean, you know, 134 00:07:52,760 --> 00:07:55,280 Speaker 1: ours is that the recovery continues at a similar pace 135 00:07:55,360 --> 00:07:58,440 Speaker 1: to the past few years. And I mean I think 136 00:07:58,480 --> 00:08:01,760 Speaker 1: that's pretty much the consensus unless we do get a 137 00:08:01,840 --> 00:08:04,360 Speaker 1: vote to lea the EU, at which point I'm sure 138 00:08:04,400 --> 00:08:06,280 Speaker 1: there would be a lot of downward revisions to GDP 139 00:08:06,480 --> 00:08:09,920 Speaker 1: and and every chance that the recovery stalls at least 140 00:08:10,000 --> 00:08:12,480 Speaker 1: for the balance of this year. Okay, but if we 141 00:08:12,560 --> 00:08:16,600 Speaker 1: get you know, clearly the elite outcome, which is no Brexit, 142 00:08:16,880 --> 00:08:20,000 Speaker 1: and you know everything's do you have a level that 143 00:08:20,120 --> 00:08:23,760 Speaker 1: sterling rebounds to. Well, I mean over the over the 144 00:08:23,800 --> 00:08:26,400 Speaker 1: sort of coming months after that. It will take a while, 145 00:08:26,440 --> 00:08:29,600 Speaker 1: and it will depend on any sort of significant dent 146 00:08:29,920 --> 00:08:32,440 Speaker 1: to activity in the interim. But you know, we still 147 00:08:32,440 --> 00:08:36,360 Speaker 1: see a possibility of of sterling ending this year um 148 00:08:36,640 --> 00:08:39,720 Speaker 1: significantly stronger than its current level. But as I say, 149 00:08:39,720 --> 00:08:43,080 Speaker 1: it will depend on activity indicators beyond the referendum, which 150 00:08:43,120 --> 00:08:45,679 Speaker 1: will tell us how much damage has been done and 151 00:08:46,080 --> 00:08:50,240 Speaker 1: how persistent or temporary it may turn out to be. Well, 152 00:08:50,320 --> 00:08:54,320 Speaker 1: let me ask about that. The the O E C 153 00:08:54,400 --> 00:08:58,080 Speaker 1: D among others have been talking apparently a new NOE 154 00:08:58,080 --> 00:09:01,040 Speaker 1: doubt from your competitors. It's DID group. I've been talking 155 00:09:01,080 --> 00:09:04,640 Speaker 1: about much much slower growth around the world. How does 156 00:09:04,679 --> 00:09:10,880 Speaker 1: that affect the UK um again exprexit. Yeah, I mean 157 00:09:11,080 --> 00:09:14,120 Speaker 1: it clearly, if it is a global slowing, it will 158 00:09:14,240 --> 00:09:16,160 Speaker 1: it will affect all to a degree. I mean, I 159 00:09:16,240 --> 00:09:18,480 Speaker 1: think you know, as recent years have shown us, the 160 00:09:18,559 --> 00:09:23,800 Speaker 1: UK has proved quite resilient um to the slower growth 161 00:09:23,840 --> 00:09:26,640 Speaker 1: and the woes of the Aurozone in particular. And I 162 00:09:26,679 --> 00:09:28,280 Speaker 1: think a large part of the reason for that is 163 00:09:28,320 --> 00:09:33,360 Speaker 1: it has been long a service based economy, which is 164 00:09:33,720 --> 00:09:37,480 Speaker 1: more able to perform domestically and more insulated from global 165 00:09:37,520 --> 00:09:40,960 Speaker 1: slowdowns in terms of dropping demand for manufactured goods and 166 00:09:40,960 --> 00:09:43,680 Speaker 1: so on then certain other economies are. So, you know, 167 00:09:43,720 --> 00:09:46,839 Speaker 1: the recovery is somewhat mature, and I'm sure that if 168 00:09:46,880 --> 00:09:49,959 Speaker 1: growth starts it's slow, it might see you know, slowing 169 00:09:50,040 --> 00:09:52,760 Speaker 1: or even an end to the decline in the unemployment rate. 170 00:09:52,800 --> 00:09:55,640 Speaker 1: But um, if there is a sort of genuine slowing 171 00:09:55,640 --> 00:09:57,920 Speaker 1: of growing demand, I don't think the UK is at 172 00:09:58,000 --> 00:10:00,520 Speaker 1: most risk from that by any means. Race with Us 173 00:10:00,559 --> 00:10:04,400 Speaker 1: will continue this discussion. He was with UBS Michael McKie 174 00:10:04,400 --> 00:10:08,000 Speaker 1: the Bank of England Museum with an important tweet today. 175 00:10:08,080 --> 00:10:12,440 Speaker 1: In seventeen twenty three, Sir Christopher Wren died. I've been 176 00:10:12,480 --> 00:10:15,960 Speaker 1: doing a cycle of his churches in when I'm in London. 177 00:10:16,520 --> 00:10:18,840 Speaker 1: It's really something. Most of them were destroyed in World 178 00:10:18,880 --> 00:10:23,040 Speaker 1: War Two and with a lot of courage they were rebuilt. 179 00:10:23,640 --> 00:10:28,480 Speaker 1: It was very, very uh cool. Mr Murdock's father was 180 00:10:28,600 --> 00:10:32,520 Speaker 1: instrumental in helping rebuild Brides and Fleet Street, and it's 181 00:10:32,559 --> 00:10:36,200 Speaker 1: really I really urge people to go see Christopher Wren's magic. 182 00:10:36,280 --> 00:10:40,080 Speaker 1: Outside of our new headquarters in London is his jewel 183 00:10:40,520 --> 00:10:44,400 Speaker 1: right next to Mansion House. Sir Christopher Wren on this 184 00:10:44,480 --> 00:10:52,920 Speaker 1: day died in seventeen twenty three. Futures exactly flat. Let's 185 00:10:52,920 --> 00:10:55,480 Speaker 1: bring in John Taker now with the latest news from 186 00:10:55,520 --> 00:10:58,000 Speaker 1: around the world. John Houston is gonna be the site 187 00:10:58,000 --> 00:11:01,440 Speaker 1: of the night's Republican presidential debate, with Donald Trump rivals 188 00:11:01,640 --> 00:11:04,400 Speaker 1: getting one more chance to try and derail the GOP 189 00:11:04,520 --> 00:11:07,640 Speaker 1: front runner. Uh Santa emergency in Virginia. That's where four 190 00:11:07,640 --> 00:11:10,880 Speaker 1: people were killed after tornadoes damage homes left thousands without 191 00:11:10,880 --> 00:11:15,000 Speaker 1: power across the state. It's official. The natural gas flowing 192 00:11:15,000 --> 00:11:19,800 Speaker 1: out of America's shale formations is now available to the world. 193 00:11:20,360 --> 00:11:23,719 Speaker 1: The liquefied natural gas tanker Asia Vision. It left the 194 00:11:23,760 --> 00:11:28,160 Speaker 1: Shaneer Energy Sabing Pass Export Terminal in Louisiana yesterday with 195 00:11:28,280 --> 00:11:31,720 Speaker 1: the first cargo of US shield gas. The tanker bound 196 00:11:31,720 --> 00:11:35,480 Speaker 1: for Brazil and score one for humans. Mercedes ben says, 197 00:11:35,520 --> 00:11:38,280 Speaker 1: with a growing array of options on its cars, robots 198 00:11:38,400 --> 00:11:40,600 Speaker 1: can't keep up. They were relying more and more in 199 00:11:40,679 --> 00:11:45,400 Speaker 1: human workers on the assembly line reclaiming space there to 200 00:11:45,480 --> 00:11:51,000 Speaker 1: put in those options. Interesting, did the natural gas thing? Yeah, 201 00:11:51,280 --> 00:11:54,800 Speaker 1: look Rod, Mike, look at net gas one point seven 202 00:11:54,880 --> 00:11:59,760 Speaker 1: three five gazillion British thermal units. We'll have to talk 203 00:12:00,040 --> 00:12:01,920 Speaker 1: near with David Wilson, will do that in the next 204 00:12:01,920 --> 00:12:09,960 Speaker 1: hour Bloomberg Surveillance. This news update was brought to you 205 00:12:09,960 --> 00:12:12,360 Speaker 1: by the all new BMW Springfield. Find amazing pricing at 206 00:12:12,360 --> 00:12:15,480 Speaker 1: every certified pre owned BMW vis at BMW Springfield and 207 00:12:15,600 --> 00:12:22,439 Speaker 1: JA dot Com. Financing and Leasing available BMW Financial Services. 208 00:12:22,440 --> 00:12:25,840 Speaker 1: Global Business News twenty four hours a day at Bloomberg 209 00:12:25,880 --> 00:12:28,960 Speaker 1: dot Com, the Radio plus Mobile Act and on your radio. 210 00:12:29,240 --> 00:12:33,000 Speaker 1: This is a Bloomberg Business Flash and I'm Cameron Moscow. 211 00:12:33,160 --> 00:12:36,079 Speaker 1: US Dock index futures are little change this morning. Let's 212 00:12:36,120 --> 00:12:38,400 Speaker 1: go to the First Word Breaking news desk for today's 213 00:12:38,400 --> 00:12:41,720 Speaker 1: morning call, and here's Bill Maloney. Good morning Bill, Good 214 00:12:41,760 --> 00:12:44,439 Speaker 1: morning Karen. That's right. US futures are now trading little 215 00:12:44,559 --> 00:12:48,000 Speaker 1: changed as crewe fixtures fade from the highs down. Futures 216 00:12:48,040 --> 00:12:51,120 Speaker 1: hied by eight points, recipes are unchanged and as a 217 00:12:51,200 --> 00:12:54,840 Speaker 1: futures are lower by two Shanghai plunge six point four 218 00:12:54,880 --> 00:12:59,000 Speaker 1: percent overnight as money market rates surged, while upm markets 219 00:12:59,040 --> 00:13:01,920 Speaker 1: are trading higher by two percent gains in France, UK, 220 00:13:02,120 --> 00:13:05,439 Speaker 1: Italy and Spain. On the US economic front. At eight 221 00:13:05,480 --> 00:13:08,760 Speaker 1: fifteen FEDS, Lockhart speaks in Atlanta at a thirty initial 222 00:13:08,840 --> 00:13:11,880 Speaker 1: Jobs claims and Durable goods orders at ten thirty natural 223 00:13:11,880 --> 00:13:15,800 Speaker 1: gas storage change, and at eleven o'clock Kansas City fed 224 00:13:16,120 --> 00:13:19,920 Speaker 1: after Divelos Nights Salesforce boosted your views, trans Ocean beat 225 00:13:20,200 --> 00:13:24,480 Speaker 1: and Restoration Hardware Q four prelimery at just EPs missed estimates, 226 00:13:24,480 --> 00:13:28,240 Speaker 1: shares her down twenty pre market regard airings this morning, 227 00:13:28,280 --> 00:13:32,240 Speaker 1: Domino's Pizza and Visti on beat, Colz EPs beat revenues, 228 00:13:32,240 --> 00:13:35,040 Speaker 1: war in line and best Buy Q four EPs beat, 229 00:13:35,040 --> 00:13:39,240 Speaker 1: although comps sales missed estimates, finding some yearly Welsh upgrades 230 00:13:39,280 --> 00:13:42,320 Speaker 1: and downgrades. Advisory board race, the Bibles sold over at 231 00:13:42,360 --> 00:13:46,040 Speaker 1: Deutsche Bank, Cooper Tire raised to neutral versus Celicalman, Sachs 232 00:13:46,480 --> 00:13:50,280 Speaker 1: Charter raised, ovoid A, JP Morgan, and finally, Restoration Hardware 233 00:13:50,280 --> 00:13:52,480 Speaker 1: cuts a sector way to Key Bank and cut to 234 00:13:52,559 --> 00:13:55,839 Speaker 1: neutral over at Robert Baird Live from the First Breaking 235 00:13:55,840 --> 00:13:58,920 Speaker 1: News Desk on Bill Maloney Karen. Alright, thanks Availa to 236 00:13:58,960 --> 00:14:01,600 Speaker 1: hear live breaking news of your Bloomberg type squawk and 237 00:14:01,679 --> 00:14:04,200 Speaker 1: go on your terminal. Let's ask you a w K 238 00:14:04,360 --> 00:14:07,400 Speaker 1: go and that's a Bloomberg business flash. Tom and Mike Karen, 239 00:14:07,679 --> 00:14:10,520 Speaker 1: thanks so much Bloomberg surveillance this morning, as always bunched 240 00:14:10,520 --> 00:14:14,760 Speaker 1: by invest Goo. Factor based strategies can help investors focus 241 00:14:15,320 --> 00:14:18,719 Speaker 1: on a high quality, low volatility and more. Learn more 242 00:14:18,760 --> 00:14:23,520 Speaker 1: and investco dot com slash high conviction, giving us perspective 243 00:14:23,520 --> 00:14:26,400 Speaker 1: on the United Kingdom economy. All of the uproar over 244 00:14:26,440 --> 00:14:30,640 Speaker 1: Brexit is John Wraith of UBS. John, if you were 245 00:14:30,680 --> 00:14:33,720 Speaker 1: to have a one on one with the Chancellor of 246 00:14:33,800 --> 00:14:36,880 Speaker 1: the Exchequer or the Prime Minister or other elites of 247 00:14:37,360 --> 00:14:40,840 Speaker 1: England trying to keep the nation within Europe, what do 248 00:14:40,880 --> 00:14:43,480 Speaker 1: you think you would hear? What's the number one sales 249 00:14:43,560 --> 00:14:49,400 Speaker 1: pitch from elites to do no harm? Um? Well, I 250 00:14:49,440 --> 00:14:52,000 Speaker 1: mean you know that the the argument has raged in 251 00:14:52,760 --> 00:14:54,840 Speaker 1: one sense or another for many years in the UK 252 00:14:54,960 --> 00:14:57,400 Speaker 1: about the relationships with the You I mean, I think 253 00:14:57,400 --> 00:15:00,800 Speaker 1: you know that the British people generally want convincing that 254 00:15:00,920 --> 00:15:04,640 Speaker 1: staying in is going to be better economically. Um. In 255 00:15:04,680 --> 00:15:08,080 Speaker 1: the medium and long term, and that's something which is 256 00:15:08,120 --> 00:15:10,800 Speaker 1: an argument that not hasn't always been been clear. And obviously, 257 00:15:10,880 --> 00:15:14,120 Speaker 1: as we've been talking about already today, over recent years 258 00:15:14,160 --> 00:15:17,040 Speaker 1: at least, the UK has been growing much more dynamically 259 00:15:17,040 --> 00:15:20,240 Speaker 1: and rapidly than the rest of the EU and certainly 260 00:15:20,240 --> 00:15:22,720 Speaker 1: the Eurozone, so that that argument is a difficult one 261 00:15:22,760 --> 00:15:25,680 Speaker 1: to make, which I think explains why opinion balls have 262 00:15:25,800 --> 00:15:28,960 Speaker 1: been have been pointing to such a close outcome. One 263 00:15:29,000 --> 00:15:31,920 Speaker 1: of those things like trying to convince people trade is 264 00:15:31,960 --> 00:15:34,640 Speaker 1: a good idea because it's easy to find a picture 265 00:15:34,680 --> 00:15:36,840 Speaker 1: of a guy who's out of work and much harder 266 00:15:36,880 --> 00:15:43,360 Speaker 1: to the dispersion of benefits. Yeah, and you know, again, 267 00:15:43,440 --> 00:15:45,760 Speaker 1: as as with everything to do with this reference, and 268 00:15:45,760 --> 00:15:48,720 Speaker 1: there's two sides to every argument. And there are a 269 00:15:48,760 --> 00:15:51,640 Speaker 1: lot of voters in the UK who feel threatened by 270 00:15:52,320 --> 00:15:55,040 Speaker 1: um the open access to the UK labor markets for 271 00:15:55,080 --> 00:15:58,480 Speaker 1: other EU citizens. But but equally there are some who 272 00:15:58,560 --> 00:16:02,520 Speaker 1: see the of efficient labor that they bring with them 273 00:16:02,520 --> 00:16:06,520 Speaker 1: and the wider economic benefits that arguably are delivered. So 274 00:16:06,720 --> 00:16:09,520 Speaker 1: you know, these things we'll keep raging. And that's one 275 00:16:09,560 --> 00:16:11,960 Speaker 1: reason why we and most people think that the debate 276 00:16:12,080 --> 00:16:14,160 Speaker 1: is going to remain up in the air until the 277 00:16:14,240 --> 00:16:16,640 Speaker 1: day of the vote itself, which will will probably continue 278 00:16:16,640 --> 00:16:19,880 Speaker 1: to undermine sterling among other things over the coming months. 279 00:16:20,920 --> 00:16:24,200 Speaker 1: We always talk about our currency being weak or strong, 280 00:16:24,240 --> 00:16:28,320 Speaker 1: as if strong was good and weak was bad. What's 281 00:16:28,360 --> 00:16:31,760 Speaker 1: going to be the impact on GDP in the UK 282 00:16:32,120 --> 00:16:38,240 Speaker 1: from a weaker sterling? How long is the j curve effect? Yeah, well, 283 00:16:38,280 --> 00:16:39,880 Speaker 1: I mean that's that's one of the ironies in this 284 00:16:40,040 --> 00:16:42,840 Speaker 1: is that as long as the fall in the pound 285 00:16:42,960 --> 00:16:47,280 Speaker 1: is reasonably stable and orderly, it's actually got a lot 286 00:16:47,320 --> 00:16:50,320 Speaker 1: of benefits to bring to the UK. We're in a 287 00:16:50,400 --> 00:16:55,880 Speaker 1: situation where global demand, as we discussed before, is potentially slowing, 288 00:16:56,360 --> 00:17:00,560 Speaker 1: and therefore, you know, for for for trading markets, having 289 00:17:00,560 --> 00:17:03,560 Speaker 1: a more competitive currency might help tap into that lesser 290 00:17:03,640 --> 00:17:07,159 Speaker 1: overall demand. The UK also, in common with a lot 291 00:17:07,160 --> 00:17:11,480 Speaker 1: of other countries, has inflation well below the central banks 292 00:17:11,560 --> 00:17:14,760 Speaker 1: target and and a and a weaker currency should raise 293 00:17:14,840 --> 00:17:18,000 Speaker 1: imported inflation, so that there are certainly some benefits to 294 00:17:19,200 --> 00:17:22,080 Speaker 1: the lower level of sterling, But it does smack of 295 00:17:22,520 --> 00:17:26,879 Speaker 1: a loss of investor confidence and some overseas investors taking 296 00:17:28,000 --> 00:17:30,600 Speaker 1: or slowing their investments into the UK because they're worried 297 00:17:30,600 --> 00:17:33,320 Speaker 1: about the outcome. So you as long as it doesn't 298 00:17:33,320 --> 00:17:37,200 Speaker 1: become a protracted and rapid for starting to call into 299 00:17:37,240 --> 00:17:41,159 Speaker 1: account into question the current account situation, then you know 300 00:17:41,240 --> 00:17:44,000 Speaker 1: there's certainly it's certainly not all bad to see Sterling weaker. 301 00:17:44,040 --> 00:17:49,639 Speaker 1: For sure, this um going to change the calculation for 302 00:17:49,720 --> 00:17:53,080 Speaker 1: the Bank of England at all. Well, they're very careful 303 00:17:53,080 --> 00:17:55,679 Speaker 1: at the moment not to sound to opinionated one way 304 00:17:55,760 --> 00:17:59,280 Speaker 1: or the other. They obviously can't comment on such political 305 00:17:59,440 --> 00:18:03,399 Speaker 1: event as a referendum, other than to say they're aware 306 00:18:03,400 --> 00:18:05,600 Speaker 1: of it, and they did say that they think it's 307 00:18:05,600 --> 00:18:07,800 Speaker 1: one of the reasons behind the weakness of sterling. But 308 00:18:08,760 --> 00:18:11,679 Speaker 1: they will wait for the outcome and they will react accordingly. 309 00:18:11,680 --> 00:18:14,320 Speaker 1: And if, as in our view, the UK stays in 310 00:18:14,359 --> 00:18:20,120 Speaker 1: the EU recovery continues, lost momentum returns, then we think 311 00:18:20,119 --> 00:18:22,960 Speaker 1: they'll very quickly tell the market that it's got too 312 00:18:23,040 --> 00:18:25,960 Speaker 1: dovish and too concerned about the outlook. Fifteen seconds, what's 313 00:18:26,000 --> 00:18:30,800 Speaker 1: your calling Europe when you're just a dovetail that was sterling? Um, Well, 314 00:18:30,840 --> 00:18:32,800 Speaker 1: we're more upbe on the outlook for the for the 315 00:18:32,800 --> 00:18:35,920 Speaker 1: Eurozone than than the consensus. We think growth fair is 316 00:18:35,960 --> 00:18:38,440 Speaker 1: going to be a bit quicker um as far as 317 00:18:38,440 --> 00:18:41,359 Speaker 1: the sort of euro sterling exchange rates concerned, we see it, 318 00:18:41,440 --> 00:18:44,679 Speaker 1: you know, potentially ending this year not far from current levels, 319 00:18:45,200 --> 00:18:49,160 Speaker 1: but being fairly volatile in the interim. January is exceptionally valuable. 320 00:18:49,160 --> 00:18:51,399 Speaker 1: Thank you so much. What a primer and all that 321 00:18:51,520 --> 00:18:53,119 Speaker 1: is going on, you know, the Kingdom. And only to 322 00:18:53,160 --> 00:18:55,960 Speaker 1: give a shout out to Francine Laqui, who was way 323 00:18:56,000 --> 00:18:59,080 Speaker 1: out front of this, Michael. She told me in Dava's 324 00:18:59,119 --> 00:19:01,080 Speaker 1: before Davas to this is gonna be a huge deal. 325 00:19:01,480 --> 00:19:05,000 Speaker 1: You Americans don't get it. She was totally right, come on, 326 00:19:05,880 --> 00:19:10,159 Speaker 1: big deal. Not sure Americans didn't get people, excuse me, 327 00:19:10,320 --> 00:19:13,159 Speaker 1: I didn't. But then I didn't get red socks. I mean, 328 00:19:13,160 --> 00:19:14,720 Speaker 1: it's almost a time of year where I have to 329 00:19:15,040 --> 00:19:16,959 Speaker 1: try to gauge am I done with the red Sox 330 00:19:17,240 --> 00:19:20,160 Speaker 1: in late April or early day. I'd give them till May. 331 00:19:20,200 --> 00:19:25,960 Speaker 1: They maybe have fixed gotten the team better. That's the 332 00:19:26,960 --> 00:19:31,600 Speaker 1: pound euro cross euro sterling. We'll quote that some more. 333 00:19:31,640 --> 00:19:33,760 Speaker 1: I'm so I've been remiss not to quote that. What 334 00:19:33,840 --> 00:19:37,600 Speaker 1: I can quote flat euros yields are infractutionally one seventy three. 335 00:19:37,600 --> 00:19:40,360 Speaker 1: I'm gonna call it a quiet tape. Oil Churrance, you're 336 00:19:40,440 --> 00:19:44,919 Speaker 1: thirty two on American oil Brent curteen right now downy 337 00:19:45,000 --> 00:19:50,639 Speaker 1: seven uh since Michael mentions euro sterling uh point seven 338 00:19:50,640 --> 00:19:55,439 Speaker 1: eight nine four pence. It's like Michael Pence and Nobel 339 00:19:55,520 --> 00:19:58,919 Speaker 1: Laureate they had one twelve fifty three. Stay with us. 340 00:19:59,160 --> 00:20:06,439 Speaker 1: We're pun friendly. On Thursday. Bloomberg Surveillance coming up there 341 00:20:06,480 --> 00:20:08,479 Speaker 1: with all due respect highlight brought you by Landrover. If 342 00:20:08,480 --> 00:20:10,000 Speaker 1: it's in your nature to cast off the every day 343 00:20:10,040 --> 00:20:12,240 Speaker 1: and seek adventure, the Discovery Sport was built to help 344 00:20:12,280 --> 00:20:14,800 Speaker 1: your search. Visit Landrover chie state dot com for special 345 00:20:14,800 --> 00:20:18,040 Speaker 1: offers during the only Adventure Sales event. Lander Over Above 346 00:20:18,160 --> 00:20:27,720 Speaker 1: and Beyond broadcasting live to New York, Bloomberg eleventh to Washington, 347 00:20:27,800 --> 00:20:32,800 Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco, 348 00:20:32,920 --> 00:20:37,359 Speaker 1: Bloomberg n to the Country Series Exam Channel one, and 349 00:20:37,480 --> 00:20:41,520 Speaker 1: around the globe. The Bloomberg Radio Plus happened Bloomberg dot Com. 350 00:20:41,560 --> 00:20:46,200 Speaker 1: This is Bloomberg Surveillance. Welcome back Michael McKee along with 351 00:20:46,320 --> 00:20:49,520 Speaker 1: Tom Keane. Economic Indicators and we've got a lot this morning. 352 00:20:49,520 --> 00:20:52,280 Speaker 1: Brought to you by Commonwealth Financial Network. When it's time 353 00:20:52,320 --> 00:20:54,480 Speaker 1: to change the conversation, talk with a broker dealer r 354 00:20:54,560 --> 00:20:57,200 Speaker 1: I A that's ready to listen Call eight six six 355 00:20:57,280 --> 00:21:01,320 Speaker 1: two three or visit Commonwealth dot com to learn more. 356 00:21:01,440 --> 00:21:04,960 Speaker 1: Here's Vinnie Dell Judas at the First Word Desk, Michael, 357 00:21:05,000 --> 00:21:09,000 Speaker 1: perhaps a bit of a respite for Manufacturing Commerce Department 358 00:21:09,000 --> 00:21:12,560 Speaker 1: telling us durable goods orders up four point nine percent 359 00:21:12,600 --> 00:21:16,000 Speaker 1: in January, the most and almost a year topping forecast. 360 00:21:16,040 --> 00:21:21,600 Speaker 1: Departments decline not as sharp as previously reported, excluding transportation 361 00:21:21,760 --> 00:21:25,359 Speaker 1: up one point eight percent, a measure of business investment 362 00:21:25,480 --> 00:21:28,280 Speaker 1: up three point nine percent. We also have figures on 363 00:21:28,400 --> 00:21:31,959 Speaker 1: initial jobless claims up by ten thousand to two hundred 364 00:21:32,040 --> 00:21:35,639 Speaker 1: seventy two thousand last week, roughly in line with forecasts. Again, 365 00:21:35,880 --> 00:21:38,880 Speaker 1: durable goods orders up by the most and almost a year, 366 00:21:39,320 --> 00:21:41,959 Speaker 1: jobless claims creeping a bit higher. At the Blue our 367 00:21:42,000 --> 00:21:44,199 Speaker 1: First Word Desk on Videl Judas, Let's go back to 368 00:21:44,200 --> 00:21:46,600 Speaker 1: New York. This is really interesting to be looking at 369 00:21:46,600 --> 00:21:51,240 Speaker 1: the durable goods breakdown and there were no categories that 370 00:21:51,320 --> 00:21:54,159 Speaker 1: decline during the month. Let me explain what I do 371 00:21:54,240 --> 00:21:55,880 Speaker 1: on this. I'm not going to put the chart out 372 00:21:55,880 --> 00:21:58,720 Speaker 1: because people will drive off the road. It's too complex. 373 00:21:59,320 --> 00:22:01,200 Speaker 1: I take, Michael, and this is off of the good 374 00:22:01,200 --> 00:22:06,720 Speaker 1: work of Janatzi, Goldman, Sachs, inventories, durable goods, whatever. I 375 00:22:06,840 --> 00:22:09,720 Speaker 1: take a three month, a six month, a twelve month 376 00:22:09,880 --> 00:22:13,560 Speaker 1: moving average, so I smooth it all out, and then 377 00:22:13,600 --> 00:22:17,520 Speaker 1: I look at the slope the derivative of those three 378 00:22:17,560 --> 00:22:22,119 Speaker 1: moving averages. All you need to know is all three 379 00:22:22,119 --> 00:22:26,840 Speaker 1: moving averages are moving in an up direction. That's the 380 00:22:27,040 --> 00:22:31,680 Speaker 1: massive headline. I'm eyeballing here, Michael. When the last time 381 00:22:32,160 --> 00:22:37,520 Speaker 1: that occurred? I'm back to May of two thousand fourteen 382 00:22:38,440 --> 00:22:41,200 Speaker 1: and then somewhere in the vicinity of November of two 383 00:22:41,240 --> 00:22:46,600 Speaker 1: thousand thirteen. It is rare and distinctive. Neverman Varavish is 384 00:22:46,640 --> 00:22:49,800 Speaker 1: chief economist at the consulting firm I h S. And 385 00:22:49,920 --> 00:22:53,159 Speaker 1: he is joining us now to talk about rare and 386 00:22:53,480 --> 00:22:57,760 Speaker 1: distinctive movements in the US economy. Um, what are we 387 00:22:57,880 --> 00:23:01,720 Speaker 1: to make of this? Is this uh a turning point 388 00:23:01,960 --> 00:23:04,639 Speaker 1: in the economy? Are we out of the slow patch? 389 00:23:04,880 --> 00:23:09,480 Speaker 1: I'm not saying we're gonna go gangbusters? But um, are 390 00:23:09,520 --> 00:23:12,639 Speaker 1: we looking in the rear view mirror at the fourth quarter? No, 391 00:23:13,000 --> 00:23:16,560 Speaker 1: I think Tom's right, and looking at these longer term trends, uh, 392 00:23:16,600 --> 00:23:19,000 Speaker 1: and and I think one way to look at what's 393 00:23:19,000 --> 00:23:23,399 Speaker 1: having manufacturing and especially durable goods and you know, capital 394 00:23:23,480 --> 00:23:26,000 Speaker 1: spending in a more general sense, is that I've been 395 00:23:26,119 --> 00:23:29,240 Speaker 1: hit by three things. Um. The first is an inventory 396 00:23:29,359 --> 00:23:32,640 Speaker 1: cycle that's gonna end this year, and it's already ended, 397 00:23:32,640 --> 00:23:34,119 Speaker 1: you could argue, and I think that's what some of 398 00:23:34,119 --> 00:23:38,600 Speaker 1: these numbers today suggest. The second is that huge plunge 399 00:23:38,720 --> 00:23:43,480 Speaker 1: in energy sector capital spending. Also uh, less of a 400 00:23:43,600 --> 00:23:47,960 Speaker 1: drag now on on growth because oil prices are leveled 401 00:23:48,000 --> 00:23:50,480 Speaker 1: off and that recount is beginning to sort of bottom out, 402 00:23:50,960 --> 00:23:54,960 Speaker 1: uh in terms of drilling and in terms of investment 403 00:23:55,080 --> 00:23:59,119 Speaker 1: in in the energy sector. Uh. The third drag is 404 00:23:59,200 --> 00:24:01,639 Speaker 1: the dollar that's going to stay with us for a while. 405 00:24:02,240 --> 00:24:04,919 Speaker 1: But but to Tom's point and to your point, Mike, 406 00:24:05,119 --> 00:24:08,359 Speaker 1: is that the two two of the negatives are pretty 407 00:24:08,400 --> 00:24:11,080 Speaker 1: much behind us, and so I'm not surprised to see 408 00:24:11,080 --> 00:24:14,280 Speaker 1: these trends beginning to look much more positive now than 409 00:24:14,320 --> 00:24:17,840 Speaker 1: they were before. So to fancy a question growth this year, 410 00:24:17,880 --> 00:24:20,679 Speaker 1: we think maybe two and a half percent, moving up 411 00:24:20,720 --> 00:24:24,400 Speaker 1: to maybe you know, closer to three percent by next year. Well, 412 00:24:24,400 --> 00:24:28,720 Speaker 1: that's not terrible. It is not it's running faster than 413 00:24:29,280 --> 00:24:32,320 Speaker 1: what is your view of potential? Well, it's it's you know, 414 00:24:32,359 --> 00:24:34,240 Speaker 1: we can go back and forth on this a little bit. 415 00:24:34,359 --> 00:24:37,200 Speaker 1: Potential is probably just around two and a half, maybe 416 00:24:37,200 --> 00:24:40,399 Speaker 1: a little bit less than that. UM, So we're close 417 00:24:40,400 --> 00:24:43,040 Speaker 1: to potential right now. We'll probably go above that for 418 00:24:43,119 --> 00:24:46,000 Speaker 1: a year, maybe even two, So which means the unemployment 419 00:24:46,119 --> 00:24:48,120 Speaker 1: is probably gonna drift down towards four and a half 420 00:24:48,760 --> 00:24:51,120 Speaker 1: over the next year or two, slowly, but but nevertheless 421 00:24:51,160 --> 00:24:54,399 Speaker 1: down towards four and a half. Is there a connection 422 00:24:54,760 --> 00:25:00,439 Speaker 1: between the durable goods numbers and hiring in manufacturing? Um, 423 00:25:00,480 --> 00:25:04,400 Speaker 1: clearly there is. I mean, obviously, demands tends to lead employment. Employment, 424 00:25:04,400 --> 00:25:07,320 Speaker 1: as we all know, is a lagging indicator. So as 425 00:25:07,359 --> 00:25:09,680 Speaker 1: this turns around, we'll start to see better numbers out 426 00:25:09,680 --> 00:25:12,280 Speaker 1: of manufacturing. As you know, almost all of the growth 427 00:25:12,320 --> 00:25:15,840 Speaker 1: and employment has been in the service sectors. UM. Manufacturing 428 00:25:15,880 --> 00:25:18,439 Speaker 1: has been a bit of a problem until recently. Actually 429 00:25:18,440 --> 00:25:21,240 Speaker 1: the last number was was reasonably upbeats. But I think 430 00:25:21,240 --> 00:25:23,520 Speaker 1: we'll start to see some better numbers in manufacturing. And 431 00:25:23,560 --> 00:25:25,840 Speaker 1: there when somebody asked me, the young kid here at 432 00:25:26,280 --> 00:25:28,439 Speaker 1: Bloomberg said, why is this guy on? And I was 433 00:25:28,520 --> 00:25:32,520 Speaker 1: bragging about the back of your research reports where you 434 00:25:32,640 --> 00:25:36,679 Speaker 1: classically and uniquely set up three scenarios. You were the 435 00:25:36,760 --> 00:25:40,600 Speaker 1: our buyer of gloom and optimism. Which way does i 436 00:25:40,800 --> 00:25:44,800 Speaker 1: HS tilt right now within your three scenarios? Which way 437 00:25:44,880 --> 00:25:49,640 Speaker 1: is the Vish vector tilt? UM? Well, I mean clearly 438 00:25:49,640 --> 00:25:53,480 Speaker 1: that the highest probabilities are base case UM, so that 439 00:25:53,720 --> 00:25:59,840 Speaker 1: sets around UM. We're giving about a chance to recession, 440 00:26:00,400 --> 00:26:03,320 Speaker 1: but only fifteen to an upside. That's a slight tilt 441 00:26:03,359 --> 00:26:06,679 Speaker 1: towards the negative. I think, mostly because the risks outside 442 00:26:06,720 --> 00:26:10,480 Speaker 1: the US not so much risk within the US UM. 443 00:26:10,520 --> 00:26:12,720 Speaker 1: But that may change over the year. We may we 444 00:26:12,800 --> 00:26:15,000 Speaker 1: may come out with a more balanced view in terms 445 00:26:15,040 --> 00:26:17,720 Speaker 1: of the risk as the year proceeds. Now, it's gonna 446 00:26:17,800 --> 00:26:21,479 Speaker 1: ask how often you adjust that given the frequency data. Well, 447 00:26:21,520 --> 00:26:24,560 Speaker 1: there are times we adjusted every month, sometimes even weekly, 448 00:26:24,720 --> 00:26:27,040 Speaker 1: depending obviously you know two thousand, two thousand and eight. 449 00:26:27,560 --> 00:26:30,439 Speaker 1: But but often it's it's more like once a quarter. 450 00:26:30,680 --> 00:26:32,840 Speaker 1: We we really look at it carefully and say, okay, 451 00:26:33,040 --> 00:26:36,000 Speaker 1: what do we really think here? So mostly once a quarter, 452 00:26:36,040 --> 00:26:38,960 Speaker 1: but but sometimes it's much more frequently than that. No, 453 00:26:40,560 --> 00:26:43,639 Speaker 1: I don't in many ways to go here. Uh, Nerman 454 00:26:43,680 --> 00:26:46,840 Speaker 1: bearish with us. We're going to continue this discussion with him. 455 00:26:47,000 --> 00:26:49,800 Speaker 1: Uh And like as you mentioned there, you featured that 456 00:26:49,920 --> 00:26:53,040 Speaker 1: idea of tours three percent. Given the gloom, the gloom flow, 457 00:26:53,440 --> 00:26:58,760 Speaker 1: the global gloom flow, we forget remodeling. Is it morning 458 00:26:58,760 --> 00:27:01,840 Speaker 1: in America? No, it's not. Let's all get over it. 459 00:27:02,280 --> 00:27:04,480 Speaker 1: But some would say, what would Michael Faroli say? Is 460 00:27:04,480 --> 00:27:07,760 Speaker 1: this above potential? I mean that's something we can talk 461 00:27:07,760 --> 00:27:11,400 Speaker 1: with Nerman Barrish about here. Pretty good economic growth. Mr 462 00:27:11,400 --> 00:27:15,080 Speaker 1: Bullard commenting this morning on the freight train to higher 463 00:27:15,160 --> 00:27:18,280 Speaker 1: interest ry at the freight train to hire interest, I 464 00:27:18,280 --> 00:27:22,560 Speaker 1: feel like a Glenn Miller song coming on chat St. 465 00:27:22,600 --> 00:27:26,399 Speaker 1: Louis six five thousand, something like that. They yield in 466 00:27:26,440 --> 00:27:30,800 Speaker 1: two basis points one point seven features up A glorious, 467 00:27:31,200 --> 00:27:39,000 Speaker 1: a glorious one point. This hour of Chavals brought you 468 00:27:39,040 --> 00:27:42,640 Speaker 1: by Mazda White Plains. Visit Masda and White Plains dot com. 469 00:27:42,720 --> 00:27:45,480 Speaker 1: Here's John Tucker with news headlines and Michael and Tod 470 00:27:45,640 --> 00:27:48,440 Speaker 1: were Republican presidential CAMPAD has told their final debate ahead 471 00:27:48,440 --> 00:27:50,680 Speaker 1: of the March first slate of primers and caucuses and 472 00:27:50,720 --> 00:27:53,760 Speaker 1: more than a dozen states and territories. The debating hosted 473 00:27:53,760 --> 00:27:57,119 Speaker 1: by the University of Houston. Senate Republicans have pledged a 474 00:27:57,160 --> 00:27:59,959 Speaker 1: block President Obama's nominee for the next Supreme Court justice. 475 00:28:00,440 --> 00:28:03,560 Speaker 1: But now a twist, the President said to be considering 476 00:28:03,600 --> 00:28:08,359 Speaker 1: Devada Governor Bryant Sandiville, a Republican, a state of emergency 477 00:28:08,359 --> 00:28:11,639 Speaker 1: in Virginia, wherefore people were killed after tornadoes damaged homes, 478 00:28:11,760 --> 00:28:15,080 Speaker 1: also left thousands of people without power across that state. 479 00:28:15,720 --> 00:28:18,520 Speaker 1: And uh, I guess this is a public service. February 480 00:28:18,560 --> 00:28:21,320 Speaker 1: twenty nine to anybody who visits a Pizza Hut restaurant 481 00:28:21,359 --> 00:28:24,359 Speaker 1: shows a photo ID to prove they were born on 482 00:28:24,520 --> 00:28:29,480 Speaker 1: Leap Day, we'll receive a free one topic personal pan pizza. 483 00:28:29,560 --> 00:28:31,679 Speaker 1: As good a reason as any to get a fake idea. 484 00:28:31,720 --> 00:28:39,719 Speaker 1: I suppose, okay day February all right, well that's Monday, 485 00:28:39,840 --> 00:28:41,600 Speaker 1: we'll be here. Do we have Leap Day this year? 486 00:28:41,680 --> 00:28:47,280 Speaker 1: We do? We do have Leap plan. Whatever I was 487 00:28:47,320 --> 00:28:50,000 Speaker 1: looking at still come back and talk about that in 488 00:28:50,080 --> 00:28:52,720 Speaker 1: just a month. First we gotta get dash because it's 489 00:28:52,720 --> 00:28:56,080 Speaker 1: time for the Katina Auto Group Bloomberg NBC Sports Up Day. 490 00:28:56,120 --> 00:28:57,800 Speaker 1: We get an extra day in John on Monday too, 491 00:28:57,840 --> 00:29:01,280 Speaker 1: because it's yeah, leap day, Yeah be here. Carmelo Anthony 492 00:29:01,360 --> 00:29:04,160 Speaker 1: might get expressed his frustration with the Knick struggles, but 493 00:29:04,280 --> 00:29:06,479 Speaker 1: he was the one struggling last night in Indiana's had 494 00:29:06,520 --> 00:29:09,400 Speaker 1: five for twenty, only fourteen points and air ball on 495 00:29:09,440 --> 00:29:11,080 Speaker 1: a three pointer at the end that would have tied 496 00:29:11,120 --> 00:29:14,600 Speaker 1: the game. Carmelo outplayed by Pacers star Paul Georgia at 497 00:29:14,600 --> 00:29:18,000 Speaker 1: twenty five second half points. Indiana won one oh eight 498 00:29:18,040 --> 00:29:21,120 Speaker 1: to one oh five with Melo office game, kristophs Porzingi 499 00:29:21,200 --> 00:29:25,040 Speaker 1: scored twenty two, Jose Calderano surprising twenty points, made all 500 00:29:25,080 --> 00:29:27,880 Speaker 1: four of his three pointers. Kyle O'Quinn off the bench 501 00:29:27,880 --> 00:29:31,320 Speaker 1: for nineteen in sixteen minutes, but now thirteen losses the 502 00:29:31,400 --> 00:29:34,920 Speaker 1: last fifteen games. New coach Kurt Rambis is one and four, 503 00:29:35,120 --> 00:29:36,960 Speaker 1: you know, and they do a good job. The Pacers 504 00:29:37,000 --> 00:29:40,600 Speaker 1: do a clog in the lane, they get people in 505 00:29:40,640 --> 00:29:43,120 Speaker 1: the paints. It south slot of penetration, and we turned 506 00:29:43,120 --> 00:29:45,160 Speaker 1: the ball over and unfortunately some of them you know, 507 00:29:45,240 --> 00:29:48,479 Speaker 1: heard us significantly and they got on runs. But if 508 00:29:48,520 --> 00:29:50,200 Speaker 1: we if we could have taken care of the ball, 509 00:29:50,440 --> 00:29:52,479 Speaker 1: just write everything else that happened in the ball game, 510 00:29:52,520 --> 00:29:54,440 Speaker 1: we would have given ourselves a much better chance to win. 511 00:29:54,600 --> 00:29:57,440 Speaker 1: Nick so Stoor Lando tomorrow. Nets are in Phoenix tonight 512 00:29:57,440 --> 00:29:59,840 Speaker 1: another one for Golden State won eighteen one twelve and 513 00:29:59,840 --> 00:30:02,560 Speaker 1: my ammy Steph Curry forty two points. The Warriors are 514 00:30:02,600 --> 00:30:05,479 Speaker 1: fifty one and five local hockey teams were all off 515 00:30:05,520 --> 00:30:07,640 Speaker 1: or all on the road tonight. College basketball, the Big 516 00:30:07,680 --> 00:30:09,560 Speaker 1: Game is in the Big East, battle of teams ranked 517 00:30:09,560 --> 00:30:13,560 Speaker 1: in the top five. Xavier beat number one Villanova eight three. 518 00:30:13,640 --> 00:30:16,760 Speaker 1: Jets coach Todd Bowles was revealed he had surgery to 519 00:30:16,760 --> 00:30:19,440 Speaker 1: remove a be nine mass that bowl says was the 520 00:30:19,480 --> 00:30:21,720 Speaker 1: size of a golf ball from his throat. Bowls actually 521 00:30:21,800 --> 00:30:24,400 Speaker 1: had it during the season. Was told he could postpone 522 00:30:24,440 --> 00:30:27,640 Speaker 1: the surgery, said he's now fine. With the Bloomberg NBC 523 00:30:27,720 --> 00:30:30,720 Speaker 1: Sports update, I'm John stash Aller, John, thank you so much. 524 00:30:30,760 --> 00:30:36,560 Speaker 1: Michael McKee frentic across our studio looking at the statistics here, 525 00:30:36,800 --> 00:30:40,320 Speaker 1: um Neil Payne over at dot com points out it 526 00:30:40,400 --> 00:30:43,680 Speaker 1: has been twenty three years since the Canadian team won 527 00:30:43,760 --> 00:30:45,920 Speaker 1: the Stanley Cup. Do you think that will change this year? 528 00:30:47,280 --> 00:30:49,600 Speaker 1: Do you know how many teams if the season ended today, 529 00:30:49,600 --> 00:30:54,040 Speaker 1: how many Canadian teams would be in the playoffs Vancouver, 530 00:30:54,160 --> 00:30:59,000 Speaker 1: they even close zero. This is we're on track for 531 00:30:59,040 --> 00:31:02,160 Speaker 1: something that's only happened once before nine seventy where there 532 00:31:02,200 --> 00:31:04,680 Speaker 1: were no Canadian teams are global audience. This is a 533 00:31:04,680 --> 00:31:07,880 Speaker 1: source of national Don Cherry's apoplectic about this. I mean Toronto. 534 00:31:08,280 --> 00:31:10,760 Speaker 1: Some people are calling him an h L team and 535 00:31:10,880 --> 00:31:14,080 Speaker 1: Montreal has got to be the implosion of modern history. 536 00:31:14,360 --> 00:31:19,080 Speaker 1: They start off so well. More hockey talk on Bloomberg Surveillance. 537 00:31:21,480 --> 00:31:23,640 Speaker 1: The Sports Apart was brought to you by Ricottina Autogroup. 538 00:31:23,680 --> 00:31:26,120 Speaker 1: Everyone deserves to drive a Mercedes Been from Katina. Make 539 00:31:26,160 --> 00:31:29,440 Speaker 1: it happen at Katina Motorcar in Edison, Racotina of Union 540 00:31:29,440 --> 00:31:32,080 Speaker 1: and the new Racotina of Freehold, or go to Recotina 541 00:31:32,440 --> 00:31:40,160 Speaker 1: dot com. Global business news twenty four hours a day 542 00:31:40,360 --> 00:31:43,280 Speaker 1: at Bloomberg dot com, the Radio plus mobile app and 543 00:31:43,440 --> 00:31:47,360 Speaker 1: on your radio. This is a Bloomberg Business Flash and 544 00:31:47,400 --> 00:31:50,040 Speaker 1: I'm terin Moscown. There's updates. Brought to you by Sector 545 00:31:50,120 --> 00:31:52,280 Speaker 1: Spider e t F. So I buy a single stock 546 00:31:52,280 --> 00:31:54,840 Speaker 1: when you can invest in the entire sector is its 547 00:31:54,840 --> 00:31:58,800 Speaker 1: Sector spdr s dot com are called six sector et 548 00:31:59,040 --> 00:32:02,840 Speaker 1: F orders free US capital goods rebounding in January by 549 00:32:02,880 --> 00:32:08,080 Speaker 1: the Moon's June fourteen, bookings for non military equipment excluding 550 00:32:08,120 --> 00:32:10,800 Speaker 1: commercial aircraft jump three point nine per cent. That was 551 00:32:10,840 --> 00:32:13,480 Speaker 1: more than forecast, and it follows a three point seven 552 00:32:13,520 --> 00:32:17,080 Speaker 1: percent decrease in December that was smaller than previously reported. 553 00:32:17,360 --> 00:32:20,560 Speaker 1: The number of Americans filing applications for unemployment benefits rose 554 00:32:20,680 --> 00:32:22,960 Speaker 1: last week from a three month low and part reflecting 555 00:32:22,960 --> 00:32:27,080 Speaker 1: the typical swings during holiday periods. US Dock Index future 556 00:32:27,120 --> 00:32:29,760 Speaker 1: is meanwhile little change after equities staged a late day 557 00:32:29,800 --> 00:32:33,080 Speaker 1: rebound yesterday as investors assess a sell off in China 558 00:32:33,160 --> 00:32:35,960 Speaker 1: overnight in a rally and European markets. You check the 559 00:32:36,000 --> 00:32:39,440 Speaker 1: markets every fifteen minutes throughout the trading day. On Bloomberg SNP, 560 00:32:39,600 --> 00:32:42,240 Speaker 1: EMNI futures up half a point, Dowie Mini futures up 561 00:32:42,280 --> 00:32:45,720 Speaker 1: four and Nasdachi mini features down one. DAX in Germany's 562 00:32:45,760 --> 00:32:48,600 Speaker 1: up one point seven percent ten, Your treasury up five 563 00:32:48,640 --> 00:32:51,840 Speaker 1: thirty seconds, the yield one point seven two percent. NIMEX 564 00:32:51,880 --> 00:32:54,240 Speaker 1: screwed oil down one point four percent, or forty five 565 00:32:54,280 --> 00:32:57,120 Speaker 1: cents to thirty one sixty nine a barrel COMEXS gold 566 00:32:57,200 --> 00:32:59,640 Speaker 1: is down to tens percent or two dollars seventy cents 567 00:32:59,800 --> 00:33:03,400 Speaker 1: to twelve thirty six, the euro a dollar ten twenty 568 00:33:03,520 --> 00:33:06,080 Speaker 1: the end one twelve point five too. And that's a 569 00:33:06,080 --> 00:33:09,640 Speaker 1: Bloomberg Business Flash, Tom and Mike Churn, thanks so much. 570 00:33:09,760 --> 00:33:14,560 Speaker 1: It is on Wall Street. The following is from Bloomberg 571 00:33:14,640 --> 00:33:18,960 Speaker 1: View Opinions in comment Jerry from Bloomberg Columnists. I'm Jonathan Bernstein, 572 00:33:19,000 --> 00:33:22,080 Speaker 1: a columnist for Bloomberg View. Maybe things are moving perfectly 573 00:33:22,120 --> 00:33:24,680 Speaker 1: for Donald Trump. He has three victories now, and he's 574 00:33:24,760 --> 00:33:27,240 Speaker 1: leading in polls in many states and leading big in 575 00:33:27,400 --> 00:33:31,280 Speaker 1: national polls. A contrasting view, Marco Rubio is still set 576 00:33:31,360 --> 00:33:34,000 Speaker 1: up nicely. That's the case if Trump is unlikely to 577 00:33:34,040 --> 00:33:36,720 Speaker 1: increase his support. If he can't, then outside of his 578 00:33:36,760 --> 00:33:39,440 Speaker 1: strongest states and Nevada, where he won big on Tuesday 579 00:33:39,520 --> 00:33:42,160 Speaker 1: was one, Trump is only barely competitive in a three 580 00:33:42,200 --> 00:33:45,200 Speaker 1: candidate race and couldn't win a two man showdown. Trump 581 00:33:45,200 --> 00:33:47,360 Speaker 1: may not have a ceiling, but he may already have 582 00:33:47,480 --> 00:33:50,040 Speaker 1: won all the voters who were likely to back him. 583 00:33:50,120 --> 00:33:53,520 Speaker 1: Adding new support may prove increasingly difficult. Of course, in 584 00:33:53,560 --> 00:33:56,480 Speaker 1: a three candidate race, Trump may only need a small 585 00:33:56,520 --> 00:33:59,080 Speaker 1: percentage of new voters to prevail, but in the limited 586 00:33:59,120 --> 00:34:01,440 Speaker 1: polling we have in the Super Tuesday races, he's in 587 00:34:01,440 --> 00:34:04,120 Speaker 1: the low thirties or worse in most states. He's going 588 00:34:04,160 --> 00:34:05,840 Speaker 1: to have to pick up some new voters to win 589 00:34:05,880 --> 00:34:07,720 Speaker 1: those states, and he hasn't shown he can do it 590 00:34:07,960 --> 00:34:10,640 Speaker 1: so far. I'm Jonathan Bernstein. For more of you, please 591 00:34:10,640 --> 00:34:13,160 Speaker 1: go to Bloomberg View dot com or view go on 592 00:34:13,200 --> 00:34:17,239 Speaker 1: the Bloomberg terminal. This has been Bloomberg View and Bloombergview 593 00:34:17,320 --> 00:34:21,719 Speaker 1: Commentary cam here hourly weekdays. I'm Bloomberg Radio, Michael. Just 594 00:34:21,760 --> 00:34:23,960 Speaker 1: a turn to the screen, red green, red green, red 595 00:34:24,000 --> 00:34:28,520 Speaker 1: green red. Yeah. Oddly, UM features turn a little bit south, 596 00:34:28,600 --> 00:34:31,120 Speaker 1: but we shoe oil prices turn a little bit south 597 00:34:31,120 --> 00:34:35,640 Speaker 1: to which maybe the reason behind. Anyways, good day to 598 00:34:35,680 --> 00:34:38,160 Speaker 1: talk economics, Good day to talk economics. A good person 599 00:34:38,160 --> 00:34:41,040 Speaker 1: to talk economics with is Nearaman Baravis, who was the 600 00:34:41,120 --> 00:34:44,360 Speaker 1: chief economist at I h. S. Tom brings up a 601 00:34:44,440 --> 00:34:46,440 Speaker 1: very good point and you mentioned this when we started 602 00:34:46,440 --> 00:34:52,200 Speaker 1: talking about durable goods UM the idea that we may 603 00:34:52,239 --> 00:34:55,920 Speaker 1: be seeing a flattening out of the decline of the 604 00:34:55,920 --> 00:35:00,600 Speaker 1: decline in spending on UM durables for energy production. UH 605 00:35:01,440 --> 00:35:05,279 Speaker 1: has this surprised you that energy has been such a 606 00:35:05,360 --> 00:35:09,080 Speaker 1: drag on the economy when everybody said, following all prices, 607 00:35:09,120 --> 00:35:11,480 Speaker 1: we're going to be a big benefit. Well we've got 608 00:35:11,520 --> 00:35:14,040 Speaker 1: Here is a timing issue, Mike, Um in the sense 609 00:35:14,120 --> 00:35:16,440 Speaker 1: that you know, the pain came early and it was 610 00:35:16,640 --> 00:35:21,239 Speaker 1: very intense. Basically, capital spending in the energy sector is 611 00:35:21,280 --> 00:35:23,439 Speaker 1: at half what it was two years ago. It's a 612 00:35:23,480 --> 00:35:27,120 Speaker 1: big plunge. It's only two percent of the economy, but nonetheless, 613 00:35:27,120 --> 00:35:29,160 Speaker 1: when you get that kind of plunge, even in two 614 00:35:29,160 --> 00:35:32,440 Speaker 1: percent of economy, it drags down overall growth. Um. So 615 00:35:32,520 --> 00:35:36,359 Speaker 1: it came early, came fast, it was painful. The benefits 616 00:35:36,680 --> 00:35:39,200 Speaker 1: are are much more spread out. The way I like 617 00:35:39,280 --> 00:35:42,840 Speaker 1: to describe it as Okay, So, because of lower gasoline prices, 618 00:35:42,880 --> 00:35:45,480 Speaker 1: the typical US household gets a tax cut in quotes 619 00:35:45,800 --> 00:35:48,239 Speaker 1: of a thousand dollars a year. But you don't get 620 00:35:48,239 --> 00:35:49,960 Speaker 1: it all at once. You get in dribs and drabs. 621 00:35:49,960 --> 00:35:51,680 Speaker 1: You get it every time you go to the gas station. 622 00:35:52,000 --> 00:35:54,400 Speaker 1: Five dollars here, ten dollars there. What do you do 623 00:35:54,520 --> 00:35:58,080 Speaker 1: with it? You buy snacks, you buy cigarettes, if you smoke, 624 00:35:58,480 --> 00:36:00,600 Speaker 1: And that's the way it's showing up. It is showing 625 00:36:00,640 --> 00:36:03,319 Speaker 1: up and it's helping consumer spending, which is growing do 626 00:36:03,400 --> 00:36:07,000 Speaker 1: we think at a rate of around which is quite respectable. 627 00:36:07,400 --> 00:36:09,799 Speaker 1: So you know, everybody sort of saying, well, you know, 628 00:36:09,800 --> 00:36:13,240 Speaker 1: it's it's more negative than positive. Yeah, it's early on, yes, 629 00:36:13,560 --> 00:36:16,560 Speaker 1: but as things move on and as a negatives start 630 00:36:16,600 --> 00:36:18,719 Speaker 1: to abate, we'll start to see a lot of the 631 00:36:18,800 --> 00:36:21,840 Speaker 1: positive show up. What should a policymaker do if this 632 00:36:21,880 --> 00:36:25,279 Speaker 1: were to be a trail? What you just sit back 633 00:36:25,320 --> 00:36:28,200 Speaker 1: and enjoy the benefits? Now? Well, yeah, I think so, 634 00:36:28,320 --> 00:36:30,160 Speaker 1: I mean I think what what? What? What could we 635 00:36:30,200 --> 00:36:32,280 Speaker 1: do at this point? Is you know, it's it's pretty 636 00:36:32,320 --> 00:36:33,640 Speaker 1: I mean, if you're gonna do anything, you would have 637 00:36:33,680 --> 00:36:36,040 Speaker 1: done it a year and a half ago. Now it's 638 00:36:36,120 --> 00:36:38,960 Speaker 1: it's almost too late. But but it's it's there's no 639 00:36:39,120 --> 00:36:42,880 Speaker 1: need to do anything. Okay, there's no need to do anything. 640 00:36:42,920 --> 00:36:45,800 Speaker 1: But you know that's the attitude. I got a Davos nearman. 641 00:36:45,840 --> 00:36:49,120 Speaker 1: I mean, you wandered around the August halls of Davos. 642 00:36:49,280 --> 00:36:52,759 Speaker 1: I'm sorry. It's one massive interest rate illusion of low 643 00:36:52,840 --> 00:36:56,960 Speaker 1: nominal and low real rates within the micro study that 644 00:36:57,040 --> 00:37:00,320 Speaker 1: you've done it. I h s is that artifice shoull 645 00:37:00,440 --> 00:37:08,160 Speaker 1: interest rate illusion affecting behavior and investment decisions in this nation. Uh. Yeah, Tom, 646 00:37:08,239 --> 00:37:10,800 Speaker 1: undoubtedly it is. I mean I'm not going to debate 647 00:37:10,840 --> 00:37:13,080 Speaker 1: that one. I mean, we we all agree that, uh, 648 00:37:13,280 --> 00:37:16,800 Speaker 1: they sustain low interest rates creates um, you know, lower 649 00:37:17,120 --> 00:37:20,800 Speaker 1: risk if you will, and increase uh you know, people 650 00:37:20,920 --> 00:37:24,360 Speaker 1: making risky bets, especially in terms of financial assets. So 651 00:37:24,400 --> 00:37:26,279 Speaker 1: there's there's a fair amount of that going on. And 652 00:37:26,400 --> 00:37:28,560 Speaker 1: you could argue that some of the rise in the 653 00:37:28,600 --> 00:37:32,040 Speaker 1: stock markets until last summer had to do with that. 654 00:37:32,200 --> 00:37:34,879 Speaker 1: So yeah, fair enough. But on the other hand, I'm 655 00:37:34,920 --> 00:37:37,919 Speaker 1: not sure what choice central bankers have. They're the only 656 00:37:37,960 --> 00:37:41,440 Speaker 1: game in town. So it's like they really can't do 657 00:37:41,480 --> 00:37:44,440 Speaker 1: anything but keep pumping money into the economy and the 658 00:37:44,480 --> 00:37:47,120 Speaker 1: hopes of things turn around. Good news is it's worked 659 00:37:47,160 --> 00:37:50,920 Speaker 1: for the US, partly because it's been coupled with serious 660 00:37:51,000 --> 00:37:54,720 Speaker 1: banking fixes. The US banking systems in much better shape. 661 00:37:54,920 --> 00:37:57,399 Speaker 1: It hasn't worked in Europe because their banks are still 662 00:37:57,440 --> 00:38:00,080 Speaker 1: in trouble. They haven't done what the US banks it. 663 00:38:00,160 --> 00:38:02,680 Speaker 1: So I think it's it's it's important to kind of 664 00:38:02,719 --> 00:38:05,719 Speaker 1: distinguish the US experience, to say, from the European or 665 00:38:05,760 --> 00:38:09,520 Speaker 1: even the Japanese experience, we are not I guess you 666 00:38:09,520 --> 00:38:12,719 Speaker 1: would say in a liquidity trap. Then not in the U. 667 00:38:12,840 --> 00:38:14,759 Speaker 1: S We're not. We might be in Europe, we might 668 00:38:14,800 --> 00:38:17,840 Speaker 1: be in Japan, but I don't see it in the US. 669 00:38:17,880 --> 00:38:22,000 Speaker 1: So does the FED need to keep its foot on 670 00:38:22,040 --> 00:38:26,400 Speaker 1: the pedal at all at this point? Or is it? 671 00:38:26,440 --> 00:38:29,560 Speaker 1: Would it be better for the various reasons people say 672 00:38:29,600 --> 00:38:33,600 Speaker 1: for them to back off again? I think that the 673 00:38:33,760 --> 00:38:37,680 Speaker 1: FETE is probably in a good position to begin to 674 00:38:37,760 --> 00:38:42,120 Speaker 1: raise rates, but very very very gradually. I mean, let's say, 675 00:38:42,160 --> 00:38:44,200 Speaker 1: let's say they raise rates two more times this year, 676 00:38:44,239 --> 00:38:48,080 Speaker 1: and for example, they will have gone from ultra loose 677 00:38:48,239 --> 00:38:52,920 Speaker 1: monetary policy to extremely lose monetary policy. By the way, 678 00:38:52,960 --> 00:38:55,560 Speaker 1: here I'm quoting stand Fisher, vice chair at the Federal 679 00:38:55,560 --> 00:38:59,080 Speaker 1: Reserve UM. But but the point is that monetary policy, 680 00:38:59,120 --> 00:39:03,080 Speaker 1: even after these very modest increases will still be pretty 681 00:39:03,120 --> 00:39:06,239 Speaker 1: accommodative in the US. So I think it's appropriate. US 682 00:39:06,320 --> 00:39:09,120 Speaker 1: is doing fairly well. You know, we we have the 683 00:39:09,160 --> 00:39:12,760 Speaker 1: ability we could afford to start raising rates. Europe Japan can't. 684 00:39:13,480 --> 00:39:17,080 Speaker 1: What's the impact of the FED on the economy right now, Well, 685 00:39:17,120 --> 00:39:19,160 Speaker 1: I would say it's very small. I mean, a quarter 686 00:39:19,200 --> 00:39:21,399 Speaker 1: of the basis point. I mean started a quarter yeah, 687 00:39:21,480 --> 00:39:25,160 Speaker 1: quota points a quarter of a percent uh an increase 688 00:39:25,160 --> 00:39:27,160 Speaker 1: in interest rates which they put in place in December, 689 00:39:27,440 --> 00:39:30,920 Speaker 1: basically zero impact. Um. You know, let's say they do 690 00:39:31,080 --> 00:39:34,480 Speaker 1: two more hikes. Okay, maybe just the flight tightening, but 691 00:39:34,600 --> 00:39:36,800 Speaker 1: even there, that's It's the FED is not going to 692 00:39:36,880 --> 00:39:38,879 Speaker 1: get in the way of this recovery, certainly not this year. 693 00:39:39,560 --> 00:39:42,160 Speaker 1: I mean I I look near men at the complexities 694 00:39:42,200 --> 00:39:46,000 Speaker 1: that you cover each day, whittle down for our audience, 695 00:39:46,120 --> 00:39:49,960 Speaker 1: not the pros and cons gloom optimism, but if we 696 00:39:50,040 --> 00:39:55,080 Speaker 1: all understand the artificialities, the great distortions that we're living in, 697 00:39:55,600 --> 00:40:00,160 Speaker 1: what is a simple message within all that complexity. The 698 00:40:00,200 --> 00:40:03,280 Speaker 1: simple message is that we have been through a very 699 00:40:03,440 --> 00:40:07,319 Speaker 1: bad situation, a you know, serving a financial crisis what's 700 00:40:07,400 --> 00:40:10,040 Speaker 1: referred to sometimes as a balance sheet recession, which is 701 00:40:10,080 --> 00:40:13,719 Speaker 1: an asset bubble that bursts. And in the in the 702 00:40:13,760 --> 00:40:17,840 Speaker 1: wake of that, um, we are struggling to come up 703 00:40:17,880 --> 00:40:20,839 Speaker 1: with the appropriate policies. I think, an appropriate policy mix. 704 00:40:21,320 --> 00:40:23,960 Speaker 1: I think the US again has had slightly better success 705 00:40:23,960 --> 00:40:26,759 Speaker 1: than most, with growing faster than most. I would say, 706 00:40:27,080 --> 00:40:29,399 Speaker 1: you know, follow the example of the US, I mean, 707 00:40:29,640 --> 00:40:31,880 Speaker 1: other countries don't like to hear it as much. But 708 00:40:31,880 --> 00:40:35,120 Speaker 1: but to me, it's not just monetary policy, but monetary 709 00:40:35,120 --> 00:40:37,920 Speaker 1: policy coupled with fixing the banks, and I think we 710 00:40:37,960 --> 00:40:40,120 Speaker 1: went a long way forward. There's still issues in the 711 00:40:40,120 --> 00:40:42,440 Speaker 1: banking system, but we went a long way forward and 712 00:40:42,520 --> 00:40:45,719 Speaker 1: fixing our banks. Are we going to see the economy, 713 00:40:45,840 --> 00:40:49,600 Speaker 1: as it continues to motor along this year, get better 714 00:40:49,640 --> 00:40:54,479 Speaker 1: in such a way that the angry voters will notice it? Well, 715 00:40:54,520 --> 00:40:58,719 Speaker 1: often there's a political lag. There's a lag between political 716 00:40:58,719 --> 00:41:02,560 Speaker 1: perceptions or to our perceptions, and the economy. If you 717 00:41:02,560 --> 00:41:06,200 Speaker 1: remember that happened in two to George H. W. Bush, 718 00:41:06,360 --> 00:41:09,040 Speaker 1: the economy started to recover, but voters are very angry 719 00:41:09,080 --> 00:41:11,040 Speaker 1: about the economy. I think the same thing is gonna 720 00:41:11,040 --> 00:41:13,640 Speaker 1: happen this time. Voters are very angry, and that anger 721 00:41:13,719 --> 00:41:16,080 Speaker 1: is not gonna go away, I would say for another 722 00:41:16,160 --> 00:41:20,400 Speaker 1: year or two. Nerman, thank you so much. Nerman, Barrifish 723 00:41:20,480 --> 00:41:23,279 Speaker 1: with us as we look it just it's a I 724 00:41:23,400 --> 00:41:26,560 Speaker 1: urge you. We again we protect the copyright of our guests, 725 00:41:26,560 --> 00:41:28,399 Speaker 1: but I urge you to get your hands on HS 726 00:41:28,520 --> 00:41:33,160 Speaker 1: material is always more than interesting. Michael, I. I think 727 00:41:33,200 --> 00:41:35,520 Speaker 1: the way they do it with three scenarios is interesting. 728 00:41:36,239 --> 00:41:38,520 Speaker 1: I'm surprised more people don't do that very much like 729 00:41:38,560 --> 00:41:42,320 Speaker 1: the Federal Reserve with the team presented his staff presents 730 00:41:42,360 --> 00:41:47,040 Speaker 1: the FED with FED officials with different scenarios, three different scenarios. 731 00:41:47,160 --> 00:41:50,640 Speaker 1: Got a lovely note yesterday from someone an email thanking 732 00:41:50,800 --> 00:41:53,880 Speaker 1: us for trying to not be hysterical. We try to 733 00:41:53,920 --> 00:41:57,520 Speaker 1: not say plunge or collapse surge that can sort of 734 00:41:57,560 --> 00:42:01,680 Speaker 1: go with but these big words. I mean today it 735 00:42:01,719 --> 00:42:05,560 Speaker 1: works because nothing's except for China stocks fits the mold. 736 00:42:05,920 --> 00:42:11,080 Speaker 1: But we're trying to bring in economics, finance, investment, international relations, 737 00:42:11,080 --> 00:42:15,759 Speaker 1: some politics up to Super Tuesday with what we hope 738 00:42:15,800 --> 00:42:21,920 Speaker 1: is a more measured conversation, give a framework to think 739 00:42:21,960 --> 00:42:24,759 Speaker 1: about it. That's what we're so you can make your decisions. 740 00:42:25,200 --> 00:42:29,319 Speaker 1: And looking at the data screen, uh yeah, showing some 741 00:42:29,360 --> 00:42:31,759 Speaker 1: weakness here. Two days in a row from a one 742 00:42:31,840 --> 00:42:38,320 Speaker 1: eleven handle at the West Texas seven down twenty seven cents, 743 00:42:38,880 --> 00:42:43,680 Speaker 1: Bran crew thirty four gold down five dollars announced a 744 00:42:43,719 --> 00:42:47,200 Speaker 1: more measured hour another hour of Bloomberg surveillance