WEBVTT - Surveillance: China Policy with Spence 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.240 --> 0:00:13.200 with Jonathan Ferrell and Lisa Brownowitz Jaily, we bring you 0:00:13.320 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.960 --> 0:00:23.840 Find Bloomberg Surveillance on Apple podcast, Suncloud, Bloomberg dot Com, 0:00:23.920 --> 0:00:30.159 and of course on the Bloomberg terminal. He writes for 0:00:30.280 --> 0:00:34.159 Project Syndicate. He has done so much for economics and 0:00:34.240 --> 0:00:38.880 for all of American graduate education. Laureate Michael Spence joins 0:00:38.960 --> 0:00:41.360 us now, of course Senior Advice of the General Atlantic 0:00:41.640 --> 0:00:45.080 as well as his academics Professor Spence, thank you so 0:00:45.159 --> 0:00:47.640 much for joining. I want to talk about two things 0:00:47.760 --> 0:00:49.199 right now, and I want to go back to your 0:00:49.360 --> 0:00:52.440 iconic work on signaling. UM. I was talking with our 0:00:52.479 --> 0:00:57.840 Simon Kennedy about pandemic signaling. How is our behavior change 0:00:58.120 --> 0:01:01.920 from the pandemic? Is are a permanence to how the 0:01:01.920 --> 0:01:09.320 American economy, our labor market, our investment, how it will change? Yes? 0:01:09.319 --> 0:01:12.440 There is? I mean I think it's it's unambiguous. You know, 0:01:12.520 --> 0:01:18.280 the the accelerated adoption and digital change patterns of works work, 0:01:18.520 --> 0:01:22.200 the impact of the pandemic on what kinds of jobs 0:01:22.240 --> 0:01:24.720 people want to have, when they want to retire, and 0:01:24.760 --> 0:01:28.240 so on. I think betting that these changes will all 0:01:28.360 --> 0:01:30.840 sort of fade away would be one of the worst 0:01:30.880 --> 0:01:34.160 bets possible. So I have no doubt. I mean, Tom, 0:01:34.240 --> 0:01:38.040 you know, actually seeing in detail, you know how this 0:01:38.080 --> 0:01:40.360 will play out over the next three to five years. 0:01:40.400 --> 0:01:43.720 It's it's very difficult, but but I don't have any question. 0:01:43.800 --> 0:01:47.560 It's permanent. Michael. Some of it in your latest essay 0:01:47.600 --> 0:01:50.840 for Project Syndicate, there are two paragraphs that are classic 0:01:50.960 --> 0:01:52.840 Michael Spence. I can see you with a piece of 0:01:52.880 --> 0:01:55.680 chalk in your hand at Stanford, and while you ready 0:01:55.760 --> 0:01:59.280 to throw it at someone who doesn't understand correlation, you 0:01:59.360 --> 0:02:03.760 talk about the magnitude, the size, or the growing size 0:02:04.480 --> 0:02:08.720 of our uncorrelated risks. All of our listeners and viewers 0:02:08.800 --> 0:02:13.639 know right now uncorrelated risks are off the chart. What 0:02:13.680 --> 0:02:17.120 does that mean for our society? What does that mean 0:02:17.240 --> 0:02:24.440 for our capitalism? It means a major shift in priorities. 0:02:24.600 --> 0:02:30.120 But for countries and for companies in the direction of diversification. Uh. 0:02:30.240 --> 0:02:33.800 And it will be, you know, portrayed as a costly move. 0:02:33.919 --> 0:02:38.200 It will probably increase inflationary pressures. But anybody who is 0:02:38.600 --> 0:02:41.600 you know, operates in the financial markets or has taken 0:02:41.600 --> 0:02:45.080 of course in finance knows that when you have rising 0:02:45.240 --> 0:02:50.040 risks and they're relatively uncorrelated, the proper response is diversification. 0:02:50.120 --> 0:02:53.480 And you know, when you add together pandemics, supply chain 0:02:53.560 --> 0:02:59.280 congestion and blockages and longer term effects m a war, uh, 0:02:59.320 --> 0:03:01.760 you know, and all the climate shocks that are getting 0:03:01.800 --> 0:03:04.200 more frequent and so on. I don't have any doubt 0:03:04.320 --> 0:03:07.880 that's the direction of movement um that we're going to see. Well, 0:03:07.919 --> 0:03:10.280 and speaking of the supply side, you talk about the 0:03:10.360 --> 0:03:14.560 shift to supply constrained growth, What does that indicate about 0:03:14.560 --> 0:03:16.840 the permanence of some of the inflationary pressures that we 0:03:16.880 --> 0:03:20.720 are seeing. So I may be a bit out on 0:03:20.880 --> 0:03:23.440 the tail of the distribution here, but but I think 0:03:23.440 --> 0:03:27.040 this is a fundamental shift. You know, the deflationary pressures 0:03:27.080 --> 0:03:30.560 that we had in the global economy came very substantially 0:03:31.280 --> 0:03:33.920 um from the fact that we had huge amounts of 0:03:34.520 --> 0:03:39.040 essentially unutilized productive capacity in the emerging markets, and we've 0:03:39.160 --> 0:03:41.200 used up a fair amount of that. And at the 0:03:41.280 --> 0:03:44.680 same time, we've created hundreds and hundreds of millions of 0:03:44.880 --> 0:03:48.360 new middle class consumers on the demand side. So I 0:03:48.400 --> 0:03:50.680 think this is a it's a secular trend. It didn't 0:03:50.720 --> 0:03:54.640 happen overnight. But I think that plus all the other 0:03:54.680 --> 0:03:56.920 things that we just talked about, you know, means that 0:03:57.000 --> 0:04:00.960 the inflationary pressures are likely to less for an extended period. 0:04:01.240 --> 0:04:04.040 Michael Spence, you have made a study of the Pacific 0:04:04.080 --> 0:04:06.720 and with your wonderful book The Great Convergence of China 0:04:07.240 --> 0:04:11.320 as well. Angela's stent at Georgetown talks about a potential 0:04:11.400 --> 0:04:14.240 move back to a state of yalta where we have 0:04:14.320 --> 0:04:18.200 a triangle between the United States, Russia, and China. Do 0:04:18.240 --> 0:04:21.480 you agree we could launch back to something early Cold War. 0:04:23.160 --> 0:04:25.880 I think it's not the most likely outcome, but it's 0:04:25.880 --> 0:04:28.880 a possibility. So my take on what China is trying 0:04:28.920 --> 0:04:31.480 to do, and they're in a very awkward spot, so, 0:04:31.680 --> 0:04:34.279 you know, not dissimilar to the awkward spot in central 0:04:34.279 --> 0:04:40.320 banks are in um. But China understands something that President 0:04:40.360 --> 0:04:43.560 Putin doesn't seem to understand, and that is that any economy, 0:04:43.600 --> 0:04:46.880 even a big one like China or even the United States, 0:04:46.960 --> 0:04:50.840 can't perform at anything like its full potential in isolation. 0:04:51.360 --> 0:04:54.840 And so I expect China to sort of move carefully 0:04:55.040 --> 0:04:57.760 and and try to thread the needle, but to avoid 0:04:58.560 --> 0:05:01.200 a scenario in which we start dividing the world up 0:05:01.279 --> 0:05:08.000 into blocks, because it's incompletely inconsistent with their rather determined, 0:05:08.240 --> 0:05:11.400 you know, domestic growth and development agenda. Michael, can we 0:05:11.400 --> 0:05:14.000 talk about the important stuff for where you are? Can 0:05:14.040 --> 0:05:17.039 you describe for a global audience the mood of Milan 0:05:17.800 --> 0:05:21.920 the morning after it fails to qualify for World Cup? 0:05:21.960 --> 0:05:25.560 Can you convey that to everyone for us? I don't. 0:05:25.560 --> 0:05:28.560 I don't think I can convey the depth of despair 0:05:28.720 --> 0:05:34.160 that we're all feelings as a result of bowing out 0:05:34.240 --> 0:05:38.839 of the the you know, World Cup. It's a shame. 0:05:39.520 --> 0:05:41.080 We have a lot of talent here. I don't. I 0:05:41.080 --> 0:05:43.920 don't know why this is happening. We had some success before. 0:05:43.960 --> 0:05:47.400 But okay, let me pick it up here, John Farrell, 0:05:47.480 --> 0:05:50.799 Why did this happen? How did this disaster? This depth 0:05:50.839 --> 0:05:53.599 of despare happen? These kind of games happen where you 0:05:53.640 --> 0:05:56.400 play against the team that puts everyone behind the ball 0:05:56.560 --> 0:05:59.080 defense for the whole game. You can't break through. They 0:05:59.080 --> 0:06:01.279 build confidence, they at that one chance and they score 0:06:01.600 --> 0:06:03.360 right at the end. Tom. It was just one of 0:06:03.400 --> 0:06:06.480 those games and they couldn't finish it. Ka was injured, 0:06:06.839 --> 0:06:09.320 one of our better players that had something to do 0:06:09.400 --> 0:06:11.039 with it. But that's not a reason to go out 0:06:11.040 --> 0:06:15.320 to North Macedonia. But there we are, Michael, Thank you 0:06:14.800 --> 0:06:18.360 didn't I didn't know you were telling you half a Tali. 0:06:18.960 --> 0:06:22.839 There we go, which which side? Which side of Milan 0:06:22.960 --> 0:06:27.400 is yours? Inter or Milan? I think? Okay? Well on 0:06:27.560 --> 0:06:30.160 on the other side of I bet Michael side wrong side. 0:06:30.160 --> 0:06:32.640 We might actually win our first title, Tom, for the 0:06:32.680 --> 0:06:35.320 first time in more than ten years, when we take 0:06:35.400 --> 0:06:38.000 the show to Milan. We'll have to schedule. We can 0:06:38.040 --> 0:06:40.400 do that. I believe that would be the first league 0:06:40.400 --> 0:06:44.279 title outside of the Berlisconi era as well, Tom, I 0:06:44.400 --> 0:06:47.200 was there the last time was Brua Sconi? Do you 0:06:47.200 --> 0:06:50.200 not remember Berlisconi? You missed that? I was in the 0:06:50.200 --> 0:06:54.800 sense you went to a party with Balasconi. Would you 0:06:54.839 --> 0:06:58.280 like to would you like to tell us more? Are 0:06:58.279 --> 0:06:59.839 you sure you can share it with us? Now we 0:06:59.880 --> 0:07:04.640 have some time some give it a miss. Sure he 0:07:04.680 --> 0:07:12.600 had a lot of tank at that party. Right now, 0:07:12.600 --> 0:07:14.760 we're gonna go to the best best choice, which is 0:07:14.800 --> 0:07:17.400 Ian Shepherdson is fortunate to be in the studio and 0:07:17.520 --> 0:07:19.480 we have to rip up the script here and the 0:07:19.520 --> 0:07:21.840 parlor game you and I don't play it that much. 0:07:21.880 --> 0:07:25.600 But nevertheless you have to frame as or zag would say, 0:07:25.720 --> 0:07:29.720 glide pass or reaction functions. Do you see glide pass 0:07:30.040 --> 0:07:32.600 that get us to that stunning kind of move that 0:07:32.720 --> 0:07:36.080 Mr Holland Horst speaks of, not in the timeframe that 0:07:36.120 --> 0:07:38.840 they're looking at exactly. The X access is the point 0:07:38.840 --> 0:07:41.400 of discussion. Indeed, So I am very much of the 0:07:41.480 --> 0:07:43.440 view that the terminal rate is going to be way 0:07:43.520 --> 0:07:46.280 higher than markets think. But I'm also the view that 0:07:46.280 --> 0:07:48.480 it's going to take longer to get there than city 0:07:48.560 --> 0:07:50.960 on suggesting. So I don't really have a problem with 0:07:51.000 --> 0:07:52.640 the idea that we're going to end up well into 0:07:52.640 --> 0:07:54.920 the threes, and we may even hit four by the 0:07:55.000 --> 0:07:56.800 end of the cycle, but I don't think we're gonna 0:07:56.800 --> 0:07:58.320 get that that sort of speed. And this is about 0:07:58.320 --> 0:08:02.160 elasticities or the response outiveness of a greater economy. If 0:08:02.200 --> 0:08:05.280 you take the GDP function, if you if you get 0:08:05.280 --> 0:08:09.120 their short termism out two years, boom, you go boom 0:08:09.160 --> 0:08:12.200 to economic growth, don't you. But it imputes to a 0:08:12.240 --> 0:08:14.880 weaker economic growth. Well, if they're going to hike at 0:08:14.920 --> 0:08:17.080 the speed that city you're suggesting, even if you think 0:08:17.080 --> 0:08:19.320 that ultimately the economy can live with rates that high, 0:08:19.560 --> 0:08:21.920 getting there that quickly is going to really put a 0:08:21.920 --> 0:08:24.920 lot of stress, very rapidly onto the the private sector 0:08:24.920 --> 0:08:27.560 and will require a great deal of recalibration about how 0:08:27.600 --> 0:08:31.080 things work. So I am I'm really skeptical that they 0:08:31.120 --> 0:08:33.079 may well get you know, the first couple of fifties, 0:08:33.080 --> 0:08:34.920 but to carry on at that sort of pace. This 0:08:34.920 --> 0:08:37.640 is kind all over again in terms of the speed 0:08:37.640 --> 0:08:39.960 and the scale of the hikes, and that ended up 0:08:39.960 --> 0:08:42.400 being very messy for the bond market. The economy didn't 0:08:42.400 --> 0:08:44.160 go into recession, but it was certainly under a lot 0:08:44.160 --> 0:08:46.880 of stress. And so I'm nervous that this is asking 0:08:46.920 --> 0:08:49.480 really a lot for an economy where there's probably some 0:08:49.480 --> 0:08:51.600 fragilities that wouldn't even know about yet coming out of 0:08:51.600 --> 0:08:54.360 the pandemic. And so I'd be quite surprised if the 0:08:54.480 --> 0:08:56.600 VED is able to push on at that sort of 0:08:56.600 --> 0:08:58.880 speed without taking even a pause of breath. Well, and 0:08:58.920 --> 0:09:00.520 we have to talk about the data too, and in 0:09:00.600 --> 0:09:03.520 there in the line from city is the path remains 0:09:03.600 --> 0:09:06.440 data dependent. They just believe that the risk of inflation 0:09:06.480 --> 0:09:08.240 is still to the upside for the second half of 0:09:08.280 --> 0:09:10.960 the year. Would you agree with that assessment? Yeah, this 0:09:11.000 --> 0:09:12.720 is where I differ with them, actually, that that I 0:09:12.760 --> 0:09:15.920 think that the glide path for inflation, maybe in as 0:09:15.920 --> 0:09:17.560 soon as the second quarter, is going to be quite 0:09:17.559 --> 0:09:20.920 steeply to the downside. I'm feeling really quite optimistic about 0:09:20.920 --> 0:09:24.199 in particular vehicle prices tempers under the core CPI. We'll 0:09:24.240 --> 0:09:27.320 hit the anniversary of some really huge increases of this spring. 0:09:27.559 --> 0:09:29.439 But I also think the sequential numbers are going to 0:09:29.480 --> 0:09:33.040 be falling because we're seeing auction prices decline and supplies improving, 0:09:33.360 --> 0:09:35.080 and that makes a big difference to where you think 0:09:35.080 --> 0:09:36.520 in focition will get to by the end of the 0:09:36.559 --> 0:09:38.600 year and the speed with which it comes down over 0:09:38.640 --> 0:09:42.000 the summer. And if it's surprising markets, media and the 0:09:42.120 --> 0:09:45.120 fed to the downside in the summer, then the pressure 0:09:45.160 --> 0:09:48.440 to keep going by fifty fifty is much diminished. So 0:09:48.679 --> 0:09:51.000 that may be where I haven't seen cities in flation forecast, 0:09:51.000 --> 0:09:52.800 but that might be where I differ with them. You know, 0:09:52.880 --> 0:09:54.960 if you think it's going to remain very elevated for 0:09:55.000 --> 0:09:57.559 a much longer period and we're really going to struggle 0:09:57.559 --> 0:09:59.440 to bring it down, then yeah, they'll have to go 0:09:59.559 --> 0:10:02.520 more ressively. But of course nobody knows. We're in very 0:10:02.559 --> 0:10:05.599 much unprecedented circumstances. And what do you think the strategy is? 0:10:05.640 --> 0:10:08.160 Frontload it, wait until the summer. What would you do? 0:10:08.240 --> 0:10:10.280 What is the least bad choice? I think that they 0:10:10.320 --> 0:10:13.160 need to get a grip on on this expectations, the 0:10:13.280 --> 0:10:15.720 idea that they that they've got behind the curve and 0:10:15.760 --> 0:10:17.640 that they they've left it too long. So I think 0:10:17.640 --> 0:10:19.640 they need to start making signals. And we're hearing that 0:10:19.679 --> 0:10:22.360 sort of verbally and in the dots and and in 0:10:22.480 --> 0:10:25.280 pals press conferences very clearly that they want to get 0:10:25.280 --> 0:10:26.480 a grip on it. They want to be seen to 0:10:26.520 --> 0:10:28.199 be getting a grip on it. But I think the 0:10:28.320 --> 0:10:30.880 narrative changes as we get into the spring and the summer, 0:10:31.200 --> 0:10:33.600 where you know, if those numbers come to the downside, 0:10:33.600 --> 0:10:36.600 and also maybe if if growth doesn't have the traction 0:10:36.600 --> 0:10:38.040 that we all hope it has. You know, the first 0:10:38.080 --> 0:10:40.920 quarter headlines to look and look quite soft because of inventries, 0:10:41.440 --> 0:10:44.120 and there is a huge question mark over how the 0:10:44.160 --> 0:10:47.520 household sector responds to the surgeon food and energy prices. 0:10:47.559 --> 0:10:49.480 You know, I think it will be okay, but I 0:10:49.520 --> 0:10:51.920 don't know. It will depend on how how willing people 0:10:51.960 --> 0:10:54.080 are to run down some of their savings and maybe 0:10:54.120 --> 0:10:55.840 they say, you know, we don't, we don't want to, 0:10:55.880 --> 0:10:58.959 in which case we're going to see some real sustained weakness. 0:10:59.200 --> 0:11:02.840 And again that would suggested starting with the fifty maybe, 0:11:02.840 --> 0:11:05.800 but keeping going meeting after meeting. That's that's a big ask. 0:11:06.440 --> 0:11:08.719 Well Ian you talk about how things could get better 0:11:08.760 --> 0:11:10.920 as soon as the second quarter, but there's obviously an 0:11:10.960 --> 0:11:15.200 ongoing war in Ukraine. Is your interpretation then that that's 0:11:15.240 --> 0:11:17.000 not just going to show up as much in the U. 0:11:17.080 --> 0:11:19.680 S economy as it will for Europe. Oh, there's there's 0:11:19.679 --> 0:11:22.840 no question that the difficulties fear are much greater on 0:11:22.840 --> 0:11:24.640 the back of the war in Ukraine, that much more 0:11:24.679 --> 0:11:29.000 exposed to energy prices. Energy prices were already a huge 0:11:29.000 --> 0:11:32.640 problem fear even before the invasion. Uh and and a 0:11:32.720 --> 0:11:36.520 much more direct economic connections with Russia. So uh, there's 0:11:36.559 --> 0:11:39.040 there's there's no doubt it bifurcse. Of course, it's even 0:11:39.120 --> 0:11:41.400 worse for emerging markets, where people spend much more of 0:11:41.400 --> 0:11:43.240 their income on food and energy than we do in 0:11:43.360 --> 0:11:46.560 any Western economies, and where people buy much more raw 0:11:46.640 --> 0:11:48.680 and processed food, and so there's going to see a 0:11:48.800 --> 0:11:51.960 much bigger hit. So the U s IS is far 0:11:52.040 --> 0:11:54.280 removed from all of this, the feedback from weaker growth 0:11:54.360 --> 0:11:56.559 in Europe and e m into the US. It is 0:11:56.600 --> 0:11:59.960 actually quite small. This is a big domestic closed economy really, 0:12:00.520 --> 0:12:05.559 and the cottage industry of physics and the economics is 0:12:05.679 --> 0:12:10.079 led by America. The the idiot matthewiness of the American programs. 0:12:10.120 --> 0:12:13.120 But I would suggest the United Kingdom is really studied. 0:12:13.160 --> 0:12:17.040 The non linearities of when you make moves and what 0:12:17.200 --> 0:12:22.720 city group is recommending. Here is an inertial force upon 0:12:22.840 --> 0:12:26.520 the economy. That's essentially I believe. I mean, if Al 0:12:26.640 --> 0:12:29.959 Meltzer of Cardi Mellen was here, the late grade Ala Meltzer, 0:12:30.000 --> 0:12:33.080 he'd say, we've never seen this before, this kind of 0:12:33.840 --> 0:12:37.839 physic move in raising race. Do we have any experience 0:12:37.880 --> 0:12:41.440 at this? Rights rights very aggressively back in in the 0:12:41.480 --> 0:12:44.640 early nineties, but of course the level of rights was higher, 0:12:44.640 --> 0:12:48.200 the gearing and economy with Fisher would say, the gearing, 0:12:48.520 --> 0:12:50.839 you know, it was different, very very different, absolutely different, 0:12:50.880 --> 0:12:52.320 and that's one of the reasons why we've had this 0:12:52.400 --> 0:12:54.640 long term down with trend and nominal rights. But the 0:12:54.720 --> 0:12:57.320 UK is an interesting example. It's the Western economy that 0:12:57.320 --> 0:12:59.320 looks most like the US has some big differences. Of 0:12:59.360 --> 0:13:02.679 course Franks it, but the Bank of England is signaling 0:13:02.679 --> 0:13:05.120 pretty clearly they won't be raising rates very rapidly. And 0:13:05.200 --> 0:13:08.120 so what City is talking about is a massive widening 0:13:08.120 --> 0:13:10.920 of spreads between short rates in Europe and the US. 0:13:11.120 --> 0:13:13.160 And I buy the idea in principle that the U 0:13:13.200 --> 0:13:15.719 s economy is fundamentally in better shape and less the 0:13:15.800 --> 0:13:18.640 Ukraine sensitive. But it's the scale of the gap that's 0:13:18.640 --> 0:13:21.200 suggesting in such a short space of time that it'll 0:13:21.240 --> 0:13:22.960 be difficult. Do you see how you make your luck 0:13:23.000 --> 0:13:25.960 folks on surveillance. When we invented this program, we said, 0:13:26.000 --> 0:13:29.080 just book smart people, and when news breaks down, it 0:13:29.160 --> 0:13:32.560 works out killed It can ask you, Iam, whether you 0:13:32.600 --> 0:13:36.280 think Wall Street, maybe even the City of Land that 0:13:36.400 --> 0:13:38.920 is missing the mood of the country at the moment. 0:13:39.280 --> 0:13:41.200 Do you think it is well? I mean, if you 0:13:41.200 --> 0:13:44.040 look at the consumer conference numbers pretty much everywhere. Now 0:13:44.040 --> 0:13:45.880 we've seen a round of numbers out of Europe as well. 0:13:45.920 --> 0:13:49.120 Recently they have fallen off a cliff with with the 0:13:49.240 --> 0:13:51.400 Ukraine War and there were weak anyway, and some of 0:13:51.440 --> 0:13:53.960 the U S surveys have been weakening really for some time. 0:13:54.559 --> 0:13:57.840 But the question is, is spending is GDP the same 0:13:58.040 --> 0:14:01.240 sentiment because if it isn't, If if people say one 0:14:01.280 --> 0:14:03.920 thing and do the other, then if you're expecting the 0:14:03.960 --> 0:14:06.680 sentiment numbers to lead into a very weak economy, you 0:14:06.679 --> 0:14:09.280 could be getting it really completely wrong. And the reason 0:14:09.280 --> 0:14:11.080 why there might be such a big difference is that 0:14:11.720 --> 0:14:14.560 in the US at least, households are sitting on trillions 0:14:14.559 --> 0:14:17.120 of dollars of savings that they accumulated during the pandemic. 0:14:17.280 --> 0:14:19.160 So they may well say when the conference board of 0:14:19.240 --> 0:14:21.160 the University of Michigan comes along and says, how do 0:14:21.160 --> 0:14:23.160 you feel, I feel terrible, But they still go to 0:14:23.200 --> 0:14:25.520 the mall because the money is there and we've never 0:14:25.520 --> 0:14:28.800 seen this before. So that makes forecasting with any confidence 0:14:28.840 --> 0:14:31.760 really very difficult. And I'm glad City said their forecast 0:14:31.840 --> 0:14:34.400 was day to dependent, because it sure is. Everything is 0:14:34.480 --> 0:14:36.720 very dare to dependent and we just don't know. We 0:14:36.960 --> 0:14:39.120 need to admit I think the limits of our knowledge 0:14:39.160 --> 0:14:41.720 here because we're facing uncertainty like we've never had before. 0:14:41.880 --> 0:14:43.320 Just to finish on this and stay on the same 0:14:43.360 --> 0:14:45.600 point if we can, And has it been helpful to 0:14:45.680 --> 0:14:48.040 you to be headquartered in Newcastle in the north of 0:14:48.080 --> 0:14:50.520 the country away from London. Is that contributed to a 0:14:50.600 --> 0:14:53.800 difference in opinion and outlook or where if you a 0:14:53.800 --> 0:14:56.320 different way of thinking about the country the economy. Yeah, 0:14:56.360 --> 0:14:58.400 I mean I don't do the cocktail party circuit in 0:14:58.680 --> 0:15:00.640 London or in New York, so I can I look 0:15:00.680 --> 0:15:04.000 at things maybe a little bit differently, um, but ultimately 0:15:04.040 --> 0:15:07.040 I'm following the data like everybody else, and the data 0:15:07.040 --> 0:15:10.760 at the moment are extremely confused, extremely confusing, and the range, 0:15:10.880 --> 0:15:13.200 the cone of uncertainty is bigger than I've known it 0:15:13.240 --> 0:15:16.200 in thirty years. It's the season ticket back, well, I 0:15:16.280 --> 0:15:18.560 think on it will be so you want it back now? 0:15:18.640 --> 0:15:21.480 Just to be clear, back you want it back now? Okay? John? 0:15:21.560 --> 0:15:27.600 April three, it beckons Tottenham Newcastle in newcast Yeah, you 0:15:27.640 --> 0:15:29.480 know how hard it will be to get tickets to that? Tom. 0:15:29.800 --> 0:15:33.240 I think people realize how difficult it is to get 0:15:33.240 --> 0:15:36.400 tickets for Newcastle game home game. And what are the 0:15:36.480 --> 0:15:38.760 chances that you actually get your season ticket back for 0:15:38.840 --> 0:15:41.640 next year? Well, that depends how willing I am to 0:15:41.720 --> 0:15:44.400 close my eyes and ride a big jay, but so 0:15:44.400 --> 0:15:46.080 so if I will at this point, if if a 0:15:46.200 --> 0:15:50.400 Dell shows up to watch her taughts at Newcastle, how 0:15:50.480 --> 0:15:54.440 is adult treated. I'm sure she'd be in by tom. 0:15:55.160 --> 0:15:59.960 Have you ever seen a Newcastle fantom? Okay, a box 0:16:00.040 --> 0:16:02.400 in day the day after Christmas? I think I went 0:16:02.440 --> 0:16:04.920 to a West Brom game. So that's in the Midlands, 0:16:04.960 --> 0:16:08.280 super cold, freezing, freezing, and the Newcastle fans they pack 0:16:08.320 --> 0:16:11.040 out the home stadium, greater away attended to swell at 0:16:11.040 --> 0:16:16.360 the away end. The Newcastle fans tom tops off, shirts 0:16:16.400 --> 0:16:20.760 off in the freezing cold in late December. Adult would do. 0:16:20.840 --> 0:16:23.680 The Newcastle fans are some of the toughest at their 0:16:23.760 --> 0:16:29.280 tom they're wearing beer. Coach John seriously have taken off 0:16:29.320 --> 0:16:32.840 the team? Right? Have they been affected quickly? Here? Oh? Well, 0:16:33.040 --> 0:16:36.680 the city has thrilled with Ukraine. Well the Ukraine that 0:16:36.960 --> 0:16:41.080 the Ukraine situation is is is grim, but but the 0:16:41.080 --> 0:16:44.680 Saudi takeover has has been very welcome after after the disaster. 0:16:46.200 --> 0:16:48.520 Someone rose in some the games in London. It's not 0:16:48.600 --> 0:16:55.120 a Newcastle doesn't have to travel. I thought you mentioned 0:16:55.160 --> 0:16:59.520 Spurs versus Newcastle. Yeah, that's April three. Someone's just written 0:16:59.560 --> 0:17:14.200 in that jodies can come in their swim shots. Right 0:17:14.200 --> 0:17:16.439 now is my interview of the day, and not that. 0:17:16.480 --> 0:17:19.560 I'm just back from Paris and it was an extraordinary 0:17:19.680 --> 0:17:23.119 joy to see Paris preparing for the Olympics. Because he 0:17:23.240 --> 0:17:26.960 is hugely qualified with his public service to the French 0:17:27.080 --> 0:17:31.120 nation on this moment of war. Philippetition is French Ambassador 0:17:31.320 --> 0:17:34.360 to the United States of America, but far more has 0:17:34.359 --> 0:17:39.520 had tours of duty, particularly in Romania. He understands Eastern 0:17:39.520 --> 0:17:44.080 Europe perhaps more than anyone uh entering the show. Ambassador, 0:17:44.119 --> 0:17:47.360 thank you so much for joining Bloomberg. Thank you very 0:17:47.400 --> 0:17:50.399 much for having me, Ambassador. We have limitations. I cannot 0:17:50.400 --> 0:17:53.040 speak to you, of course, of the domestic politics of France. 0:17:53.040 --> 0:17:55.640 I believe that's off limit this morning. But I can't 0:17:55.640 --> 0:17:58.000 speak to you of when I'm in London and I 0:17:58.040 --> 0:17:59.880 get on the train and I go under the chat 0:18:00.040 --> 0:18:03.040 when I come out, there are the fields of wheat 0:18:03.240 --> 0:18:08.119 of France. You are in the absolute agricultural nexus of 0:18:08.200 --> 0:18:12.320 the rich helping the poor with limited food. At this moment, 0:18:12.560 --> 0:18:15.960 how France helped the poor of the world with their 0:18:15.960 --> 0:18:20.639 wheat and other agricultural products. It is indeed one of 0:18:20.680 --> 0:18:23.840 our duties and one of the initiatives we have decided 0:18:23.920 --> 0:18:29.080 yesterday at the summits in in Brussels to take France, 0:18:29.359 --> 0:18:32.280 like the United States, is an important producer of wheat, 0:18:32.359 --> 0:18:37.760 but but we have collectively to help the world community 0:18:37.840 --> 0:18:40.879 to face a food security crisis, which is one of 0:18:40.920 --> 0:18:44.480 the threats caused by the Russian invasion of Ukraine. The 0:18:44.520 --> 0:18:47.800 first thing to do is of course to demand a 0:18:47.880 --> 0:18:52.639 ceasefire in Ukraine for the Ukrainian people first, but also 0:18:53.040 --> 0:18:55.480 because it would be the only way to allow the 0:18:55.600 --> 0:18:58.080 Ukrainians to sow their seats and to prepare for the 0:18:58.119 --> 0:19:01.600 next harvests. But we have all so indeed to take 0:19:01.640 --> 0:19:07.520 initiatives to increase productions, to increase coordination internationally, to help 0:19:08.000 --> 0:19:10.639 all the countries which are the most vulnerable in the 0:19:10.640 --> 0:19:14.040 world hund who depend from in parts of wheat. Ambassador 0:19:14.119 --> 0:19:18.359 the President speaks of a hundred thousand refugees coming to America. 0:19:18.560 --> 0:19:22.280 It seems like a tragic statistic given the millions coming 0:19:22.320 --> 0:19:25.679 over the borders of Romania, of Poland and the rest. 0:19:25.920 --> 0:19:30.840 Can France providely? Can France provide leadership in Europe? With 0:19:31.000 --> 0:19:34.320 the amount of number of refugees coming into France, can 0:19:34.320 --> 0:19:38.560 that statistics be had. We have provided leadership because France 0:19:38.640 --> 0:19:41.240 is holding the rotating presidency of the Council of the 0:19:41.280 --> 0:19:44.600 European Union. And as soon as the war has started, 0:19:45.040 --> 0:19:48.160 and as the refugees have started to come into the EU, 0:19:48.280 --> 0:19:51.960 we have decided as EU to give the Ukrainian refugees 0:19:52.000 --> 0:19:55.879 more than three millions already arriving to the European Union, 0:19:56.320 --> 0:20:00.119 to provide them with a spatial statute, protection statute. They 0:20:00.119 --> 0:20:03.239 are schooled, they have access to health scare, they have 0:20:03.280 --> 0:20:06.680 access to jobs. We have been doing this immediately. Of course, 0:20:06.680 --> 0:20:11.960 the refugees first come to the border countries Poland, Romania, 0:20:12.080 --> 0:20:15.520 also Slovakia, Hungary, also Moldova outside the EU. But now 0:20:15.560 --> 0:20:18.520 they are coming to other countries, and you see everywhewhere, 0:20:18.680 --> 0:20:22.720 including in France, a huge movement of solidarity for the 0:20:22.840 --> 0:20:26.879 tens of thousands of Ukrainian refugees which are already in France, 0:20:26.920 --> 0:20:30.199 in Italy, of course, in Germany very many. So they 0:20:30.200 --> 0:20:33.000 are coming to us too, and as the EU, we 0:20:33.040 --> 0:20:36.159 have taken very very quick and very bold measures to 0:20:36.280 --> 0:20:39.760 welcome them. Ambassador, you spoke of Poland, where of course 0:20:39.800 --> 0:20:42.120 the President of the United States is expected to land 0:20:42.320 --> 0:20:44.640 in just about half an hour's time. Before he did so, though, 0:20:44.680 --> 0:20:47.080 he was in Brussels with our sala of underlying announcing 0:20:47.080 --> 0:20:50.919 that agreement on US elergy. What is the French feeling 0:20:51.000 --> 0:20:54.440 this morning about its energy security and whether or not 0:20:54.520 --> 0:20:57.840 it is able to win itself off of Russia. Well, 0:20:57.920 --> 0:21:01.400 even if France is a bit less dependent on imports 0:21:01.400 --> 0:21:04.800 from Russia than other new countries, it is for us 0:21:05.080 --> 0:21:08.199 as again as a presidency of the European Union, it 0:21:08.320 --> 0:21:11.960 is a common problem. It is a European problem. The 0:21:12.160 --> 0:21:16.120 European leaders were convened by our president in Versailles two 0:21:16.200 --> 0:21:19.240 or three weeks ago, and they decided to stop the 0:21:19.320 --> 0:21:23.600 dependency on Russian imports of energy and also to increase 0:21:23.760 --> 0:21:28.440 in other fields food, critical materials, the resilience of our economy. 0:21:28.640 --> 0:21:31.480 It's a huge lesson to learn from this war, and 0:21:31.560 --> 0:21:36.240 we will transform decisively the European Union. And to to 0:21:36.280 --> 0:21:39.680 get rid of this dependency from imports from Russia in 0:21:39.800 --> 0:21:44.359 energy means first to accelerate our transition and also to 0:21:44.480 --> 0:21:48.080 diversify our supply, including of gas. From this point of view, 0:21:48.240 --> 0:21:51.120 the agreement which has been announced by the United States 0:21:51.240 --> 0:21:55.720