WEBVTT - Surveillance: Coronavirus With Eurasia Group's Sumpter 0:00:02.600 --> 0:00:12.960 Yeah, welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Lee. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.240 Bloomberg dot Com, and of course on the Bloomberg The 0:00:27.320 --> 0:00:30.440 like move from the State Department how confidence the State 0:00:30.440 --> 0:00:33.200 Department warning against Americans traveling to China, And we've said 0:00:33.200 --> 0:00:35.480 again and again over the last week that for the economy, 0:00:35.760 --> 0:00:40.680 for markets, what will matter is the way states respond, nations, people, corporations, 0:00:40.720 --> 0:00:44.720 and right now things are throttling back even more. Yeah, 0:00:44.760 --> 0:00:49.440 it's it's it's definitely clearly spreading, both economically as well 0:00:49.479 --> 0:00:53.280 as otherwise. Almost ten cases to Our team has worked 0:00:53.280 --> 0:00:56.320 Haires Lison, with Steve Angel reporting from Hong Kong and 0:00:56.360 --> 0:00:59.840 others to bring you the best we can clear to 0:01:00.000 --> 0:01:03.880 discussion on this virus in China. UH. Jennifer Ron joined 0:01:03.960 --> 0:01:06.120 us from UCL in London the other day and we're 0:01:06.120 --> 0:01:09.880 now thrilled to bring you from Baylor University Peter Hotez. 0:01:09.920 --> 0:01:13.640 We've spoken to him many times before, of course, UH 0:01:13.680 --> 0:01:18.959 with the UH the Tropical Medicine National School at Baylor 0:01:19.080 --> 0:01:20.920 Peter Hotels. I want to use a little bit of 0:01:20.920 --> 0:01:24.319 your heritage here, and that is the moment decades ago 0:01:24.440 --> 0:01:29.199 at Rockefeller University where we really began to figure out virology, 0:01:29.240 --> 0:01:31.880 and you, of course we're part of that in the eighties. 0:01:32.160 --> 0:01:35.240 Are we that much smarter now about all this than 0:01:35.280 --> 0:01:38.200 we were in Stars or back when you were at 0:01:38.280 --> 0:01:43.000 Rockefeller University thirty years ago. We certainly are. And it's 0:01:43.160 --> 0:01:45.280 first of all, thank you for having me back. It's 0:01:45.280 --> 0:01:46.920 always good to talk to you. And I think we're 0:01:46.920 --> 0:01:51.120 in better shape now than we were back then because 0:01:51.160 --> 0:01:53.720 we have learned some lessons, although we're still not perfect. 0:01:54.040 --> 0:01:56.480 If we remember the Stars coronavirus that immerged out of 0:01:56.480 --> 0:02:00.040 the southern China, UH scared everybody shut down. This to 0:02:00.080 --> 0:02:02.440 be a Toronto back in two thousand two, two thousand 0:02:02.560 --> 0:02:05.640 three that wolf people up. And in response to the 0:02:05.680 --> 0:02:10.160 World Health Organization created a new series of international health 0:02:10.200 --> 0:02:15.000 regulations to beef up our security for health and border 0:02:15.040 --> 0:02:18.320 and virus detection, and the Global Health Security Agenda was 0:02:18.320 --> 0:02:20.840 put in place by the US government and w h 0:02:20.919 --> 0:02:24.360 O and and so things are better than they were. Um. 0:02:24.400 --> 0:02:27.120 The other good thing that's happened is that science has 0:02:27.200 --> 0:02:31.480 has really stepped up. I mean, imagine we've gone from 0:02:31.520 --> 0:02:35.640 a brand new virus agent at the end of twenty nineteen, 0:02:35.680 --> 0:02:38.959 within a few weeks, isolating the virus, having a full 0:02:39.040 --> 0:02:44.000 genetic code, knowing how it finds to and people. It's extraordinary. 0:02:44.040 --> 0:02:47.200 So um, that's the good news. The bad news is 0:02:47.520 --> 0:02:52.320 you can only accelerate vaccine so much because despite what 0:02:52.360 --> 0:02:55.120 the anti vaccine lobby says, you still have to test 0:02:55.160 --> 0:02:58.200 them for safety. And that's the one thing that you 0:02:58.200 --> 0:03:03.000 only has diffic developed a common a protein STARS vaccine 0:03:04.000 --> 0:03:06.720 the head of manufactured in sixteen that we couldn't get 0:03:06.760 --> 0:03:11.400 the support, can proceed through clinical trials. And and now 0:03:11.440 --> 0:03:14.440 we've just learned that these two viruses are actually quite 0:03:14.440 --> 0:03:17.280 similar Stars in the end coronavirus about to the same receptor, 0:03:17.320 --> 0:03:20.079 about eight percent similar. So we may be sitting out 0:03:20.080 --> 0:03:24.679 a vaccine for this end coronavirus UM. But we still 0:03:24.680 --> 0:03:27.120 have to go through all of the safety testing and 0:03:27.160 --> 0:03:29.880 everything else. And that's the one piece that's company in 0:03:29.480 --> 0:03:33.680 the blur of knowledge, in pseudo knowledge that we have. 0:03:33.919 --> 0:03:37.600 What's the compare here of this virus is it two stars? 0:03:37.800 --> 0:03:40.680 Is it to a different virus? I can't pronounce or 0:03:40.720 --> 0:03:44.720 is it to the Spanish influence of what kind of 0:03:44.880 --> 0:03:51.640 thing is this? This is it's very much closely resemble Stars. 0:03:51.680 --> 0:03:54.560 The difference is it's not quite as lethal. As far 0:03:54.600 --> 0:03:57.520 as we can tell, it's about as easily transmissible where 0:03:57.640 --> 0:04:02.360 Stars was affecting healthy people. Uh. This one of the 0:04:02.520 --> 0:04:08.400 serious cases the respiratory illness. Sear respiratory illness, mostly individuals 0:04:08.680 --> 0:04:11.960 over the age of sixty, mostly mails, mostly those with 0:04:12.120 --> 0:04:15.040 underlying diabetes hypertension, but a lot of people are getting 0:04:15.080 --> 0:04:18.840 serious deal and requiring respiratory support. Look, this, this is 0:04:18.880 --> 0:04:22.720 what's gonna happen. Um. Uh, it's the tale of two 0:04:22.800 --> 0:04:25.680 different countries in the United States. I'm actually not so worried. 0:04:25.920 --> 0:04:29.400 We've got a good team in place. We've uh we 0:04:29.400 --> 0:04:32.000 were thanks to the Chinese scientists who got a heads 0:04:32.080 --> 0:04:35.120 up on this virus, so we knew it was coming. Um. 0:04:35.640 --> 0:04:37.760 We will see an increase in the number of cases 0:04:37.760 --> 0:04:40.360 in the US, but it won't nearly resemble anything like 0:04:40.400 --> 0:04:43.040 what we're seeing in China or Central China. Such a 0:04:43.160 --> 0:04:45.760 China and China will be in free fall. Um. Although 0:04:45.760 --> 0:04:48.560 we say ten thousand cases, summer estimating is already a 0:04:48.640 --> 0:04:51.919 hundred thousands people infective because there's probably a lot of 0:04:51.960 --> 0:04:56.040 individuals with low grades UH symptoms. So this is gonna 0:04:56.080 --> 0:04:57.960 sweep unless we can get a vaccine in there. This 0:04:58.040 --> 0:05:00.839 is gonna sweep across China. It's already upt on commerce 0:05:00.880 --> 0:05:05.440 between Hong Kong and mainland. It's um it's it's calling 0:05:05.480 --> 0:05:10.560 a fallen Asian markets. I I imagine massive economic losses 0:05:10.560 --> 0:05:13.839 in China, and that's SCI markets as well. Dr hote 0:05:13.960 --> 0:05:16.960 is what's China doing wrong in their response to the 0:05:17.080 --> 0:05:20.719 virus that's leading to what you expect to be a rampant, 0:05:20.880 --> 0:05:26.040 widespread UH disease that is already perhaps hit it's a 0:05:26.080 --> 0:05:30.320 hundred thousand people. I think the Chinese leadership, unlike in 0:05:30.360 --> 0:05:33.360 two thousand to two thousand three when they were covering 0:05:33.480 --> 0:05:36.520 up things slow, on this one. They're good, but you 0:05:36.520 --> 0:05:38.520 know they're doing the best a person can with one 0:05:38.680 --> 0:05:42.320 hand tied behind their back because there's no vaccine, and 0:05:42.360 --> 0:05:46.320 when you have a contagious virus like this, ultimately in 0:05:46.320 --> 0:05:47.920 the end you need a vaccine. You can need a 0:05:48.000 --> 0:05:50.080 vaccine to stop it. So I actually think the Chinese 0:05:50.160 --> 0:05:53.080 leadershild be doing everything they can all handed that they 0:05:53.080 --> 0:05:56.159 recognize the hit not only the public health, but their 0:05:56.200 --> 0:06:01.800 their economy and political stability. But the frustrating pieces that 0:06:01.960 --> 0:06:05.080 it's been slow to yet our vaccine and the other 0:06:05.080 --> 0:06:08.760 four or five vaccine candidates out there, if you're just 0:06:08.839 --> 0:06:11.680 joining US worldwide. Peter Hotels with us is dean of 0:06:11.720 --> 0:06:14.560 the National School of Tropical Medicine at Baylor Ecology, has 0:06:14.600 --> 0:06:17.440 been with US many times on surveillance over the years. 0:06:17.480 --> 0:06:20.880 Here on the Wuhan virus, Dr Hotez, is there any 0:06:20.920 --> 0:06:24.839 sign that the virus is mutating into something that potentially 0:06:24.920 --> 0:06:29.280 is more lethal. We We don't have any evidence at 0:06:29.279 --> 0:06:32.320 this point, and I don't think we need to postulate 0:06:32.360 --> 0:06:34.960 that this is a virus that emerged out of the 0:06:35.080 --> 0:06:39.160 wet markets in in Wuhan, because there's the virus that 0:06:39.240 --> 0:06:41.800 jumps from bath to a second animal species and then 0:06:41.800 --> 0:06:44.560 two people and now it's picked up human to human 0:06:44.600 --> 0:06:47.000 transmissions going But in that sense is going by the 0:06:47.000 --> 0:06:50.600 same playbook that are two other big coronavirus epidemics that 0:06:50.920 --> 0:06:52.960 the Stars in two thousand to two thousand three and 0:06:52.960 --> 0:06:55.600 then the Mayor's coronavirus out of the Middle East in 0:06:55.920 --> 0:06:58.760 two thousand twelves um So I don't think we have to. 0:06:59.120 --> 0:07:01.479 I mean, mutatition always possible. I don't think we have 0:07:01.560 --> 0:07:03.839 to worry so much about that. But we've got to 0:07:03.880 --> 0:07:06.760 figure out how we could do everything to help China. 0:07:06.800 --> 0:07:09.880 And remember there's also a million Chinese in Africa right 0:07:09.920 --> 0:07:12.320 now through their belts and the ODA initiatives, So there's 0:07:12.440 --> 0:07:15.120 lots of commerce back and forces in China and Africa, 0:07:15.600 --> 0:07:17.880 whereas the United States has got a great health system 0:07:17.880 --> 0:07:22.160 in place to prevent the spread from with Africa's country 0:07:22.200 --> 0:07:25.360 to country, So next to China the other place I'm 0:07:25.360 --> 0:07:27.160 really worried about it such to here in Africa, and 0:07:27.160 --> 0:07:30.000 I think that's the major reason why Dr ted ros 0:07:30.040 --> 0:07:32.640 w h O had declared the public health emergency. He's 0:07:32.680 --> 0:07:35.240 probably stim early concerned. Peter, forgive me for getting a 0:07:35.280 --> 0:07:37.280 little bit ahead of things at the moment. But once 0:07:37.280 --> 0:07:40.000 we've got past this and hopefully move on from it, 0:07:40.480 --> 0:07:42.280 what measures can we put into place in the country 0:07:42.320 --> 0:07:44.800 like China to make sure these kind of things don't happen, 0:07:44.880 --> 0:07:49.120 or at least minimize the possibility of them actually happening. Well, 0:07:49.360 --> 0:07:52.840 you know, after the Stars coronavirus, the Chinese leadership committed 0:07:52.840 --> 0:07:55.600 to shutting down those wet markets these exotic animals that 0:07:55.640 --> 0:07:57.200 are all if you've ever been to one of them, 0:07:57.200 --> 0:07:59.480 they're all piled together in cages. Some are dead, some 0:07:59.600 --> 0:08:03.000 are That's just a recipe for disasters that needs to 0:08:03.000 --> 0:08:06.000 be shut down. The other two other things need to happen. One, 0:08:06.200 --> 0:08:08.360 we still need to be do a better job at 0:08:08.360 --> 0:08:11.400 building up our vaccine infrastructure. This business of waiting for 0:08:11.440 --> 0:08:14.960 a catastrophe then to start. Um. You know, we could 0:08:14.960 --> 0:08:17.800 have had this vaccine potentially ready to go back in 0:08:18.480 --> 0:08:21.680 seventeen after he came in trial. But you know we're 0:08:21.680 --> 0:08:24.520 too reactive. We we uh. We're like a little kids 0:08:24.560 --> 0:08:26.520 soccer game. If you are washing little kids play soccer, 0:08:26.640 --> 0:08:28.760 the ball goes in one direction. All everybody runs through 0:08:28.760 --> 0:08:31.640 the ball, and nobody stays behind to play defense. And 0:08:31.720 --> 0:08:33.320 we need to do better at that. I think the 0:08:33.360 --> 0:08:36.840 third thing is we uh, we have to recognize this 0:08:36.880 --> 0:08:40.880 is our third major coronavirus epidemic pandemic in the twenty 0:08:40.920 --> 0:08:43.960 one century. We'd stars and mayors. Now this we have 0:08:44.000 --> 0:08:47.560 to start building an infrastructure specifically for the virus, just 0:08:47.640 --> 0:08:51.320 like we do for flu. Given not only public health impact, 0:08:51.400 --> 0:08:56.640 but it's it's economic consequences. This is going to Peter Hotess, 0:08:56.640 --> 0:08:59.280 thank you so much with the Baylor College of Venison 0:08:59.400 --> 0:09:15.080 in Houston. Now we go right over to the authentic 0:09:15.280 --> 0:09:19.280 on the ground knowledge of Meredith Sumter of Eurasia Group. Meredith, 0:09:19.320 --> 0:09:21.320 I'm gonna cut to the chase. Most of us don't 0:09:21.320 --> 0:09:24.240 speak Mandarin. John, do you speak Man speak? I just 0:09:24.240 --> 0:09:27.200 wanted to check that out, Meredith, what do you see 0:09:27.240 --> 0:09:29.720 in the Mandarin press? I mean, how is it different 0:09:30.080 --> 0:09:32.640 from the wall to wall coverage of this Wuhuan virus 0:09:33.160 --> 0:09:36.480 in English has been morning Tom and John is great 0:09:36.520 --> 0:09:39.560 to be with you. Yeah, there's a market difference in 0:09:39.600 --> 0:09:43.960 the way that sort of statewide media press more important 0:09:44.000 --> 0:09:48.439 to a state organs of press are reporting on the 0:09:48.080 --> 0:09:52.400 the the the virus. Then the more local level media 0:09:52.440 --> 0:09:55.200 outlets are even sit as an activist journalist who are 0:09:55.440 --> 0:09:59.000 trying to get more information out to the Chinese people. 0:09:59.480 --> 0:10:02.000 And what you see here is at the central level 0:10:02.000 --> 0:10:06.560 there's really pressure. Uh, there's there's pressure there to try 0:10:06.720 --> 0:10:09.920 to to have more of a release of the public 0:10:09.960 --> 0:10:13.720 discontent with how Beijing has handled this biver so far, 0:10:13.840 --> 0:10:16.840 and the media is doing this by going after local 0:10:16.880 --> 0:10:22.400 officials who have withheld information. At the same time that 0:10:22.520 --> 0:10:25.320 there are circling wagons around President Shi j and Ping 0:10:25.480 --> 0:10:29.040 as a decisive and strong leader who is taking action 0:10:29.280 --> 0:10:33.400 and mobilizing all resources to get ahead of the crisis. 0:10:33.520 --> 0:10:36.000 And that's why, Meredith, the Major in China is just 0:10:36.120 --> 0:10:40.200 considered state propaganda. It is always blame the local government 0:10:40.520 --> 0:10:43.720 and never the leader. This is from the ft Signing. 0:10:43.720 --> 0:10:46.360 A critic said the local government in Wuhan did not 0:10:46.440 --> 0:10:48.720 have the power to act decisively because they were at 0:10:48.720 --> 0:10:50.560 the bottom of the chain of command that started with 0:10:50.559 --> 0:10:54.680 the Supreme Leader amou Era title recently bestowed on Mr. 0:10:54.800 --> 0:10:58.680 She is that a problem, Meredith, Regardless of what the 0:10:58.679 --> 0:11:01.000 Major is saying, let's talk about the structure of government. 0:11:01.040 --> 0:11:04.040 How a country this large responds to a crisis so 0:11:04.120 --> 0:11:08.960 local so early. That's exactly right, John, And it really 0:11:08.960 --> 0:11:13.040 it shines the spotlight on the limitations of China's political system. 0:11:13.559 --> 0:11:16.680 And really it's it's she's top down leadership style, the 0:11:16.720 --> 0:11:20.400 one party system, top down leadership style that contributed to 0:11:20.400 --> 0:11:25.360 the problem by making local officials fearful to act without 0:11:25.559 --> 0:11:29.319 authorization from Beijing. And what's notable here really is the 0:11:29.520 --> 0:11:34.520 Wuhan mayor Joe Hian Wam. He accepted responsibility, while subtly 0:11:34.880 --> 0:11:38.760 placing blame on the need to wait for Beijing's approval 0:11:39.080 --> 0:11:43.679 in publicizing the outbreak. Meredith, there was data overnight showing 0:11:43.960 --> 0:11:47.760 that Chinese factories were struggling even before the country shutdown 0:11:47.800 --> 0:11:49.520 for the linear New York holidays as well as the 0:11:49.760 --> 0:11:54.680 worsening coronavirus outbreak. And I'm wondering how much energy the 0:11:55.040 --> 0:11:58.560 virus is spread takes away from Beijing to address some 0:11:58.600 --> 0:12:02.000 of the economic issues that are still out there. Oh, 0:12:02.120 --> 0:12:04.719 it takes a great deal of energy. But I think 0:12:04.720 --> 0:12:08.600 in terms of a social stability issue, j and Pain 0:12:08.760 --> 0:12:11.760 is going to mobilize everything that he's got to try 0:12:11.920 --> 0:12:16.520 to focus on getting the virus contained first. And and 0:12:16.559 --> 0:12:20.240 then at the same time you see actions by UH 0:12:20.480 --> 0:12:24.640 States banking officials UH to make sure that while there 0:12:24.640 --> 0:12:29.320 are obvious economic stillover effects broadly impacting the Chinese economy, 0:12:29.520 --> 0:12:32.680 that because the way that they're mobilizing these resources, we 0:12:32.800 --> 0:12:38.040 see fairly limited risk to economic stability UH at large. 0:12:38.160 --> 0:12:41.559 You have UM, you have Chinese banks that have been 0:12:41.559 --> 0:12:45.200 instructed to extend loans to cushion the negative effects of 0:12:45.360 --> 0:12:48.320 the virus. UH and we believe that the central government 0:12:48.600 --> 0:12:53.560 will intervene to maintain fiscal stability, with with the Central 0:12:53.600 --> 0:12:58.200 Bank providing likely to provide emergency liquidity provisions to limit 0:12:58.280 --> 0:13:02.160 the stress on China's bank system merative. Just a final 0:13:02.240 --> 0:13:05.000 question on on the trade story, just quickly, where does 0:13:05.080 --> 0:13:08.400 this leave the agreement between the United States and China 0:13:08.440 --> 0:13:10.480 that was struck just a month or so ago. What 0:13:10.679 --> 0:13:13.400 is the whole issue with the coronavirus and relations with 0:13:13.400 --> 0:13:17.440 the United States and China leave things. That's a terrific question. 0:13:17.480 --> 0:13:21.720 And really the combination of Beijing's focus on crisis fighting 0:13:22.320 --> 0:13:26.559 and the economic disruption is likely to slow China's purchases 0:13:26.640 --> 0:13:29.400 of US goods under that Phase one trade deal. And 0:13:29.559 --> 0:13:32.640 let's be honest here, Jonathan, this was this was an 0:13:32.679 --> 0:13:36.720 ambitious projection of what Beijing would be able to buy 0:13:36.880 --> 0:13:39.520 even before the outbreak. So we think that the limited 0:13:39.520 --> 0:13:44.560 domestic consumption, uh the the slowing industrial activity means that 0:13:44.800 --> 0:13:47.440 China is going to be even slower to start to 0:13:47.600 --> 0:13:50.920 make those market purchases. Now, this is not going to 0:13:51.000 --> 0:13:56.079 derail Phase one, obviously, we understand and Washington would understand 0:13:56.120 --> 0:13:58.560 why it would be harder for trying to make good 0:13:58.559 --> 0:14:02.439 on those purchases right away. But the shortfall may put 0:14:02.559 --> 0:14:06.120 more pressure on Trump to defend the deal later this 0:14:06.200 --> 0:14:09.000 year of facing is slow to red regain momentum and 0:14:09.000 --> 0:14:12.199 its purchases. Thank you so much. Madith Sumpter with Eraser Group, 0:14:12.280 --> 0:14:24.600 just riving in this morning with their knowledge of China 0:14:26.520 --> 0:14:28.880 with respect to the spread of the coronavirus. And there's 0:14:28.920 --> 0:14:32.960 a question especially to Goldman's access call as you're highlighting earlier, John, 0:14:33.080 --> 0:14:35.880 which is that it will eat into second quarter GDP 0:14:36.000 --> 0:14:38.480 of US by zero point four percent to cut it 0:14:38.520 --> 0:14:41.920 down Martel, Yeah, well this quarter. Excuse me, thank you 0:14:42.080 --> 0:14:46.040 wells Capital Portfolio manage our marquis. As we look at 0:14:46.040 --> 0:14:48.240 a slight risk off feel in markets, do you think 0:14:48.240 --> 0:14:52.360 that this is actually going to eat into potential returns? 0:14:52.400 --> 0:14:53.880 Do you think that this is going to persist or 0:14:53.880 --> 0:14:55.200 do you think that this is a by the dip, 0:14:55.600 --> 0:14:58.960 very small dip moment. I would say more more body 0:14:59.080 --> 0:15:01.600 if we don't actually know what the impact on GP 0:15:01.760 --> 0:15:04.320 will be in the US, But it's really reflecting a 0:15:04.360 --> 0:15:07.480 bigger trend, which is a move away from China outsourcing 0:15:07.760 --> 0:15:11.000 and also Chinese slower growth. So those trends are intact. 0:15:11.080 --> 0:15:14.320 I think that's more important. Looking out beyond one quarter market. 0:15:14.360 --> 0:15:16.520 Looking at the commodity market move, We're down eleven and 0:15:16.560 --> 0:15:19.080 a half percent on copper on the London Medal Exchange 0:15:19.080 --> 0:15:21.800 in just two weeks. It's been a massive move in 0:15:21.840 --> 0:15:25.440 the commodity market. Are we pricing down inflation in the 0:15:25.480 --> 0:15:27.680 bond market, Margie? Is that way you're doing or you're 0:15:27.680 --> 0:15:31.680 pushing back against that move? No. I think that low inflation, 0:15:31.800 --> 0:15:34.400 zero inflation is just going to be with us for 0:15:34.520 --> 0:15:37.920 the foreseeable future. So this makes a big call for 0:15:37.920 --> 0:15:40.800 the bond market. Then, markis, if we're gonna have low inflation, 0:15:40.880 --> 0:15:44.240 how can you make a call for high yields on tens, 0:15:44.280 --> 0:15:46.960 on thirties through twenty How difficult is it to do that? 0:15:47.600 --> 0:15:50.040 You really can't. You have to lower your expectation for 0:15:50.120 --> 0:15:52.960 what fixed income can be across the board, which is 0:15:53.480 --> 0:15:56.760 low to possibly mid single digits in the high yield market, 0:15:56.840 --> 0:16:00.080 so much much less here the returns on equities. To 0:16:00.240 --> 0:16:02.520 drag you with the headline eighteen months ago or so, 0:16:02.960 --> 0:16:05.960 looking out to the end of two thousand twenty, Governor Kearney, 0:16:06.080 --> 0:16:08.840 I believe it was two days ago, Margie, looking out 0:16:08.840 --> 0:16:12.280 to the end of two thousand twenty, one is Margie 0:16:12.280 --> 0:16:16.040 Battell beginning to look at a low rate regime out 0:16:16.240 --> 0:16:19.479 farther than you thought even months ago. Have you extended 0:16:19.880 --> 0:16:24.040 your ex access out well, I've been thinking we are 0:16:24.040 --> 0:16:28.200 in unthinkably low rates for many years. I spend my fear. Yes, well, 0:16:28.360 --> 0:16:30.880 and it's been very profitable. We were aware of your 0:16:30.920 --> 0:16:34.560 excellence on that. But what now more? The same were 0:16:34.600 --> 0:16:36.400 the same? We've been in a one and a half 0:16:36.440 --> 0:16:38.600 two and a half on the tenure. If we break out, 0:16:38.960 --> 0:16:41.680 it will be a low side. Margaret, do you think 0:16:41.720 --> 0:16:46.080 that the equation changes materially if we do get a sustained, 0:16:46.360 --> 0:16:49.880 sustained inversion of the yield curve and increasing fear that 0:16:49.960 --> 0:16:53.840 we could be reaching stall speed. I'm not looking for 0:16:53.880 --> 0:16:56.120 an inverted de Old curve. I think we're basically going 0:16:56.120 --> 0:16:59.280 to be looking at a somewhat flattish yield curve. But 0:16:59.360 --> 0:17:03.280 I don't think it as an irrelevance or reflecting the economy. 0:17:03.400 --> 0:17:05.680 To be clear, we're talking about the gap between ten 0:17:05.720 --> 0:17:07.119 year and two year yields, because if you take a 0:17:07.160 --> 0:17:09.520 look at the three month tenure yield, it's already inverted 0:17:09.560 --> 0:17:11.560 in the same with a two year to five year yield. 0:17:11.840 --> 0:17:15.840 So I'm just wondering, isn't that sending a concerning signal. Well, 0:17:15.880 --> 0:17:17.480 it's been that way for quite a long time, and 0:17:17.600 --> 0:17:20.520 hasn't it any effect on the economy or on inflation 0:17:20.720 --> 0:17:23.399 or on business lending. So I really don't look at it. 0:17:23.440 --> 0:17:25.560 I just think the curve will be so low, and 0:17:25.600 --> 0:17:28.800 it is somewhat administered by the government that is irrelevant 0:17:28.800 --> 0:17:32.479 for economic activity. Margat Patel as well as capital management, Margie, 0:17:33.200 --> 0:17:36.840 you've had courage to say, look at if yields are 0:17:36.840 --> 0:17:40.119 this troubled, look into equities, look at dividend growth and 0:17:40.160 --> 0:17:43.879 share buy back with the elevated assets. Is there a 0:17:43.960 --> 0:17:48.359 distinction between new cash flow or belief in cash flow 0:17:48.960 --> 0:17:53.440 being applied to dividend or being applied to share buy back? 0:17:53.520 --> 0:17:56.879 Which makes more sense to you. I don't think it 0:17:56.920 --> 0:18:00.680 really matters what a company does with its free cash flow. Uh, 0:18:00.720 --> 0:18:03.520 it's just a matter of a company choice. But I 0:18:03.560 --> 0:18:06.840 think that the Copper down Amazon up really tells you 0:18:06.920 --> 0:18:08.679 what the trend of the market is going to be 0:18:08.720 --> 0:18:11.440 over the next few years. Marky, thank you so much, 0:18:11.480 --> 0:18:15.080 greatly appreciated with Wells Capital management and that that's her magic. 0:18:15.440 --> 0:18:27.119 I love what she said there Anthony Phillipson has not 0:18:27.160 --> 0:18:30.960 only been the High Commissioner to Singapore but also John 0:18:30.960 --> 0:18:35.639 Ferrell directly involved in the exiting process and trade and 0:18:35.760 --> 0:18:39.240 partnerships to Europe as well. And John, I go back 0:18:39.280 --> 0:18:42.240 on this historic day to the clear memories of the 0:18:42.320 --> 0:18:46.199 morning after the Brexit vote walking down the corridor at 0:18:46.200 --> 0:18:49.240 our London offices and there were there, you were doing 0:18:49.280 --> 0:18:53.040 a marathon on the desk. We had no idea where 0:18:53.040 --> 0:18:55.280 this would add on that morning after. I think the 0:18:55.280 --> 0:18:57.000 one thing people really didn't have a clue about is 0:18:57.040 --> 0:18:58.840 how long it would take. Three and a half years, 0:18:58.840 --> 0:19:01.360 and we finally stopped and make a move. Her Majesty's 0:19:01.359 --> 0:19:04.200 tried Commissioner for North America, Anthony Phillipson joined us now. Anthony, 0:19:04.200 --> 0:19:06.359 always great to catch up with you, walk us through it. 0:19:06.400 --> 0:19:11.560 Then eleven pm UK time, what actually happens, Well, good 0:19:11.600 --> 0:19:13.160 morning to all of you, and thank you very much 0:19:13.160 --> 0:19:15.400 for having me on. As you say, it's a it's 0:19:15.400 --> 0:19:19.399 a historic occasion, it's a significant momentum. At eleven pm 0:19:19.520 --> 0:19:22.760 UK time this evening six pm New York, the UK 0:19:22.920 --> 0:19:26.920 will leave the EU. We will end our almost forty 0:19:26.960 --> 0:19:30.960 seven year membership, but it will become a new chapter 0:19:31.040 --> 0:19:35.160 in our relationship with our European and our EU partners. 0:19:35.240 --> 0:19:38.600 We have an ambition to a close economic and defense 0:19:38.640 --> 0:19:42.320 and security and indeed people to people relationship. In London itself, 0:19:42.760 --> 0:19:46.359 the Prime Minister will speak to the nation around about 0:19:46.480 --> 0:19:50.520 ten pm understand or five pm New York. There will 0:19:50.560 --> 0:19:54.960 be some visual displays around London, but I think it 0:19:55.000 --> 0:19:58.600 will be a moment of significance and momentous in a 0:19:58.600 --> 0:20:01.520 momentous occasion. But it's just the beginning in a new chapter, 0:20:01.680 --> 0:20:04.000 perhaps in name only. The rules will still apply. The 0:20:04.119 --> 0:20:07.360 UK will still pay into the EU's budget as well Antony, 0:20:07.400 --> 0:20:09.480 as you well know, through the rest of this year 0:20:09.480 --> 0:20:13.000 eleven months, we have to secure a transition deal, I 0:20:13.040 --> 0:20:16.439 guess secure secure the future relationship. So we're in this 0:20:16.480 --> 0:20:20.560 transition period for the rest of What is the government 0:20:20.600 --> 0:20:23.240 looking for and if we established what the red lines 0:20:23.280 --> 0:20:26.040 are for the relationship between the UK and the EU 0:20:26.160 --> 0:20:30.439 be on I think we have to some degree The 0:20:30.440 --> 0:20:34.280 political declaration that was agreed between the government and the 0:20:34.320 --> 0:20:37.800 European the other twenty seven member states in October last 0:20:37.920 --> 0:20:40.920 year gives us a blueprint for what that future relationship looks. 0:20:40.960 --> 0:20:44.800 Like we will now be working out our own mandate 0:20:44.840 --> 0:20:48.680 and negotiating position, as will the European Commission on behalf 0:20:48.680 --> 0:20:52.840 of the member states, and we anticipate those negotiations beginning 0:20:53.760 --> 0:20:55.600 early March. And then, as you say, we have the 0:20:55.600 --> 0:20:58.199 rest of this year while we are in the implementation period. 0:20:59.080 --> 0:21:03.040 That gives this that period of transition and certainty to 0:21:03.040 --> 0:21:05.240 to work out the fine detail and that's what both 0:21:05.240 --> 0:21:08.200 sides are committed to, Anthony. Earlier this week, UK Prime 0:21:08.200 --> 0:21:11.080 Minister Boris Johnson coming out and saying that they are 0:21:11.119 --> 0:21:13.320 going to give Yahwei some of the contracts to help 0:21:13.359 --> 0:21:16.840 build out their infrastructure. How much does that complicate your 0:21:16.880 --> 0:21:22.880 job right now? That process was incredibly detailed, thought through, 0:21:23.000 --> 0:21:25.520 an incredible detail, with a very very high degree of 0:21:25.560 --> 0:21:28.280 focus on the security and resilience of our telecom system. 0:21:29.080 --> 0:21:31.360 It's it's a process be running for a long long 0:21:31.400 --> 0:21:33.119 period in terms of how we approach what we call 0:21:33.200 --> 0:21:36.440 high risk vendors, and the decision that the government took 0:21:36.720 --> 0:21:40.119 reflects the particular circumstances for the UK. It is a 0:21:40.160 --> 0:21:42.919 decision that we have explained in detail to our American colleagues, 0:21:42.960 --> 0:21:47.040 including this week when Secretary Pompeio was in London, and 0:21:47.119 --> 0:21:49.400 we will keep explaining to them why we believe this 0:21:49.440 --> 0:21:51.080 is the right decision for us, why it does not 0:21:51.320 --> 0:21:55.480 endanger our own security and resilience of our telecom's network, 0:21:55.920 --> 0:21:59.440 and why it is it should not affect the bilateral 0:21:59.480 --> 0:22:03.159 partnership between ourselves and off places security and Trade and 0:22:03.200 --> 0:22:06.440 Economic Council General. Thank you so much for joining us 0:22:06.440 --> 0:22:09.280 this morning, Anthony Phillipson with the United Kingdom on this 0:22:09.400 --> 0:22:24.240 historic date. I lean Burbage joining us now, yeah, she 0:22:24.359 --> 0:22:26.320 is an arsenal. That's not what I was gonna talk. 0:22:27.800 --> 0:22:30.360 That's great. I would leave that. I'll leave that. I'll 0:22:30.440 --> 0:22:33.480 leave that for you, Island Burbage. We're gonna talk Amazon partner, 0:22:33.560 --> 0:22:37.160 co founder of Passion Capital Investors, with years and years 0:22:37.160 --> 0:22:41.080 of experience covering this industry. I thank just how good 0:22:41.359 --> 0:22:43.399 we're Amazon's earnings. I mean, does this give you a 0:22:43.480 --> 0:22:46.280 sense that right now the guy is a limit and 0:22:46.280 --> 0:22:49.400 basically Amazon has as a lot more road to run here. 0:22:50.880 --> 0:22:52.920 It absolutely does, it really does. And by the way, 0:22:52.920 --> 0:22:55.520 we've got NFL matches now here in London, so I'm 0:22:55.560 --> 0:22:57.879 all about following the NFL again as well as the 0:22:57.920 --> 0:23:01.080 summer League too, But yeah, no, the thing about Amazon 0:23:01.240 --> 0:23:04.520 is they do such a great job of managing expectations 0:23:04.600 --> 0:23:06.000 that then when they blow it out of the water, 0:23:06.080 --> 0:23:08.159 they really do blow out of the water. Everyone was 0:23:08.200 --> 0:23:11.240 expecting that revenues would go up like they did, but 0:23:11.320 --> 0:23:14.400 everyone was a little bit, you know, worried about maybe profitability, 0:23:14.720 --> 0:23:16.440