1 00:00:00,240 --> 00:00:05,000 Speaker 1: This is Bloomberg Wall Street Week. Market shruggle, higher consumer prizes. 2 00:00:05,040 --> 00:00:07,400 Speaker 1: The economy is in the process of rebounding. Will the 3 00:00:07,400 --> 00:00:10,479 Speaker 1: flutter reserve of its own digital currency? The financial stories 4 00:00:10,520 --> 00:00:12,879 Speaker 1: that cheap hard work. Many people think the eels are 5 00:00:12,880 --> 00:00:15,080 Speaker 1: just going to keep marching up. We have more spending 6 00:00:15,120 --> 00:00:17,160 Speaker 1: coming out of Congress. One of the big questions I 7 00:00:17,200 --> 00:00:19,880 Speaker 1: think on investor's minds inflation through the eyes of the 8 00:00:19,920 --> 00:00:23,560 Speaker 1: most influential voices. Larry Summer is the former Treasury Secretary 9 00:00:23,640 --> 00:00:27,240 Speaker 1: Bryan Wynhan a back of America, Will Smart CEO Charlie Sharp. 10 00:00:27,360 --> 00:00:31,560 Speaker 1: Bloomberg wool Street Week with David Weston from Bloomberg Radio. 11 00:00:32,200 --> 00:00:36,320 Speaker 1: Suspended animation as the world puts aside issues of inflation 12 00:00:36,440 --> 00:00:39,600 Speaker 1: and earnings and FED policy and even COVID for a 13 00:00:39,640 --> 00:00:43,520 Speaker 1: week consumed with war in Ukraine. This is Bloomberg Wall 14 00:00:43,520 --> 00:00:59,920 Speaker 1: Street Week. I'm David Weston. This week, there was plenty 15 00:01:00,080 --> 00:01:02,560 Speaker 1: going on, from the price of oil, as Dan Y're 16 00:01:02,560 --> 00:01:06,200 Speaker 1: gonna h s market discussed, Some say we're gonna have 17 00:01:06,240 --> 00:01:08,360 Speaker 1: over a hundred dollar oil for much of the year, 18 00:01:08,560 --> 00:01:10,880 Speaker 1: to what Jeffrey You of b n Y Melon says, 19 00:01:10,959 --> 00:01:15,000 Speaker 1: is the central banks concerned about inflation expectations becoming unanchored. 20 00:01:16,160 --> 00:01:18,399 Speaker 1: This strikes at the heart of what central banks are 21 00:01:18,400 --> 00:01:21,319 Speaker 1: worried about right now, as in a d anchoring of 22 00:01:21,360 --> 00:01:25,160 Speaker 1: infacion expectations. But despite all that was happening around us, 23 00:01:25,280 --> 00:01:28,959 Speaker 1: we spent the week focused on the geopolitical crisis in Ukraine. 24 00:01:29,319 --> 00:01:33,360 Speaker 1: As President Putin recognized what purported to be independent republics 25 00:01:33,440 --> 00:01:36,160 Speaker 1: in the eastern part of the country, the West imposed 26 00:01:36,280 --> 00:01:40,080 Speaker 1: limited sanctions. In response, I'm going to begin to impose 27 00:01:40,160 --> 00:01:44,000 Speaker 1: sanctions and response far beyond the steps we and our 28 00:01:44,040 --> 00:01:49,040 Speaker 1: allies and partners implemented. And then on Thursday, Russia did 29 00:01:49,080 --> 00:01:51,639 Speaker 1: with the United States had been warning about. It launched 30 00:01:51,640 --> 00:01:55,440 Speaker 1: a full scale invasion of Ukraine, triggering much broader sanctions 31 00:01:55,480 --> 00:01:58,840 Speaker 1: from the West and plunging Europe into the largest armed 32 00:01:58,880 --> 00:02:03,520 Speaker 1: conflict in de Gates, he has much larger ambitions in Ukraine. 33 00:02:03,560 --> 00:02:07,240 Speaker 1: He wants to, in fact, re established the former Soviet Union. 34 00:02:07,560 --> 00:02:09,520 Speaker 1: For her sense of where this crisis his head, and 35 00:02:09,560 --> 00:02:12,240 Speaker 1: we turned out to Jane Harmon. She's President Emerita of 36 00:02:12,240 --> 00:02:15,040 Speaker 1: the Wilson Center and she's the author of Insanity Events 37 00:02:15,320 --> 00:02:17,880 Speaker 1: about foreign policy for the United States. Jane, thank you 38 00:02:17,919 --> 00:02:20,480 Speaker 1: so much for being with us. What is your initial take. 39 00:02:20,520 --> 00:02:22,240 Speaker 1: We have a lot of developments yet to come, but 40 00:02:22,360 --> 00:02:26,120 Speaker 1: as of right now, where do you think this is unfolding? Well, 41 00:02:26,200 --> 00:02:28,240 Speaker 1: let me say that the book you just plugged, thank 42 00:02:28,280 --> 00:02:31,040 Speaker 1: you David for always doing that, makes the point that 43 00:02:31,120 --> 00:02:34,320 Speaker 1: when the Cold War ended, we had no strategy for 44 00:02:34,400 --> 00:02:36,480 Speaker 1: what the world would look like. We thought we won, 45 00:02:37,120 --> 00:02:41,040 Speaker 1: Russia lost, and everybody wants to be us. Well, oops, 46 00:02:41,080 --> 00:02:43,959 Speaker 1: we missed the rise of terrorism, we missed the rise 47 00:02:44,000 --> 00:02:46,040 Speaker 1: of China, which doesn't want to be us, and we 48 00:02:46,160 --> 00:02:50,720 Speaker 1: missed the sense of huge grievance that Vladimir Putin is 49 00:02:50,800 --> 00:02:55,160 Speaker 1: now uh following through with by Russia, which did lose. 50 00:02:55,280 --> 00:02:57,960 Speaker 1: But unlike World War Two, where we helped those we 51 00:02:58,040 --> 00:03:03,680 Speaker 1: conquered become allies and friends Germany and Japan, this time 52 00:03:03,720 --> 00:03:06,320 Speaker 1: we just rub rubbed Russia's nose in it. And so 53 00:03:07,160 --> 00:03:10,240 Speaker 1: we're now paying a penalty for all three things. What 54 00:03:10,280 --> 00:03:12,760 Speaker 1: do I think is going to happen? Uh? It looks 55 00:03:13,240 --> 00:03:19,040 Speaker 1: pretty certain that Putin has outgunned, out classed the the 56 00:03:19,320 --> 00:03:23,760 Speaker 1: the the fight of of Ukrainians, and in some way 57 00:03:23,800 --> 00:03:26,240 Speaker 1: in the next few days there will be some bad 58 00:03:26,320 --> 00:03:30,680 Speaker 1: resolution in Ukraine. I just hope that the courageous leader 59 00:03:30,720 --> 00:03:33,840 Speaker 1: there Zelenski, who has shown so much fight and so 60 00:03:33,960 --> 00:03:38,760 Speaker 1: much bravery, unlike Gani in Afghanistan, who escaped the country 61 00:03:38,840 --> 00:03:43,240 Speaker 1: before it fell. UH will be safe. I hope he 62 00:03:43,360 --> 00:03:45,640 Speaker 1: will be safe. UM. But I don't think this is 63 00:03:45,680 --> 00:03:49,400 Speaker 1: where it stops. I think the ambitions of of Putin. 64 00:03:49,440 --> 00:03:51,080 Speaker 1: Maybe we should give him a red hat that says 65 00:03:51,160 --> 00:03:54,760 Speaker 1: nate Russia great again, our way beyond this, and he's 66 00:03:54,800 --> 00:03:57,600 Speaker 1: trying to take down the liberal world order that we 67 00:03:57,720 --> 00:04:02,840 Speaker 1: formed after and take advantage of the fact that there 68 00:04:02,960 --> 00:04:06,960 Speaker 1: is still some disagreement among Europeans and European institutions at US. 69 00:04:07,280 --> 00:04:11,840 Speaker 1: I commend President by for lashing US up to partners 70 00:04:11,840 --> 00:04:16,360 Speaker 1: and allies and UH doing with them everything that's doable. 71 00:04:16,440 --> 00:04:19,400 Speaker 1: And I do think there will be more sanctions by 72 00:04:19,440 --> 00:04:23,359 Speaker 1: all of them and US, both on individuals and on 73 00:04:23,800 --> 00:04:28,960 Speaker 1: UH banks and institutions, and those sanctions will bite. I 74 00:04:29,040 --> 00:04:31,719 Speaker 1: don't want them to bite the Russian people. I really 75 00:04:31,720 --> 00:04:34,480 Speaker 1: want them to bite Putin and the collector Prats who 76 00:04:34,520 --> 00:04:38,080 Speaker 1: are doing this. Jane, you mentioned Afghanistan in a more 77 00:04:38,120 --> 00:04:40,280 Speaker 1: recent time, but let's go back a little bit of Afghanistan. 78 00:04:40,320 --> 00:04:42,680 Speaker 1: Because Russia went into Afghanistan at one point they spent 79 00:04:42,760 --> 00:04:44,159 Speaker 1: quite a few years in there and it came to 80 00:04:44,240 --> 00:04:46,200 Speaker 1: tears in the end. Do we have any sense do 81 00:04:46,240 --> 00:04:48,120 Speaker 1: you have any sense at this point of the likelihood 82 00:04:48,120 --> 00:04:50,240 Speaker 1: that infect Russia will simply be able to make you 83 00:04:50,279 --> 00:04:53,280 Speaker 1: create a vassal state and that's done with, or they 84 00:04:53,279 --> 00:04:56,080 Speaker 1: could have a protracted conflict the way they did in Afghanistan. 85 00:04:56,760 --> 00:05:00,320 Speaker 1: I think this could be even worse than Afghanistan. Um 86 00:05:00,360 --> 00:05:02,960 Speaker 1: I was on the magn that's the square in in 87 00:05:03,200 --> 00:05:07,799 Speaker 1: uh In, Ukraine and Kiev in looking at the little 88 00:05:07,839 --> 00:05:11,400 Speaker 1: memorials that were put up to the folks who gave 89 00:05:11,440 --> 00:05:15,920 Speaker 1: their lives to topple this Russian puppet Janakovich, and that 90 00:05:16,000 --> 00:05:19,400 Speaker 1: led to free and fair elections first of Poorshenko, who's 91 00:05:19,440 --> 00:05:23,200 Speaker 1: there uh In in Ukraine right now strapping on his weapon, 92 00:05:23,640 --> 00:05:29,039 Speaker 1: and then following him to Zelenski, And so Ukraine has 93 00:05:29,080 --> 00:05:33,560 Speaker 1: been a Western free democracy for seven plus years, even 94 00:05:33,640 --> 00:05:36,760 Speaker 1: with Russian interference in the eastern part the don Bus. 95 00:05:37,040 --> 00:05:39,479 Speaker 1: And I don't think these folks are going away or 96 00:05:39,480 --> 00:05:42,040 Speaker 1: given up. And I think this is gonna be an 97 00:05:42,160 --> 00:05:47,800 Speaker 1: ugly story if if, if Russia tries to occupy the country, 98 00:05:47,880 --> 00:05:51,440 Speaker 1: and I don't think Ukraine is gonna surrender easily, and 99 00:05:51,560 --> 00:05:54,320 Speaker 1: this is not going to be just not gonna be 100 00:05:54,600 --> 00:05:57,120 Speaker 1: a cake walk for Russia. Jane Len double back on 101 00:05:57,160 --> 00:05:58,840 Speaker 1: something you said that you thought that this one was 102 00:05:58,920 --> 00:06:01,080 Speaker 1: not necessarily the end for President Putin's point view of 103 00:06:01,120 --> 00:06:03,720 Speaker 1: horry wants to go. That's something that's certainly President Biden 104 00:06:03,800 --> 00:06:07,359 Speaker 1: said this week. So how nervous does President Putin have 105 00:06:07,440 --> 00:06:09,840 Speaker 1: to be about triggering that Article five of NATO if 106 00:06:09,839 --> 00:06:13,320 Speaker 1: it goes into places like Poland for example. Well, it's 107 00:06:13,400 --> 00:06:17,600 Speaker 1: it's interesting, Um, the NATO was only invoked Article five once, 108 00:06:17,800 --> 00:06:20,359 Speaker 1: and that was after nine eleven. We didn't ask for it, 109 00:06:20,480 --> 00:06:23,240 Speaker 1: Nick Burns. Uh, this mutual friend of our, David who 110 00:06:23,320 --> 00:06:25,760 Speaker 1: was going to represent the Sun China was then the 111 00:06:25,760 --> 00:06:28,720 Speaker 1: ambassador to NATO, and they didn't ask us. They just 112 00:06:28,920 --> 00:06:33,120 Speaker 1: voked Article five to come to our defense after nine eleven. Um, 113 00:06:33,160 --> 00:06:36,800 Speaker 1: since then it's never been invoked. But you're right, Uh, 114 00:06:36,880 --> 00:06:40,200 Speaker 1: Poland is a NATO country. We're sending additional troops and 115 00:06:40,360 --> 00:06:44,520 Speaker 1: the whole compliment of NATO troops is increasing. Thank you 116 00:06:44,560 --> 00:06:46,279 Speaker 1: so much, Jane, Really wonderful to have you with us 117 00:06:46,320 --> 00:06:49,320 Speaker 1: at Jane Harmon, She's President Emerita of the Wilson Center. 118 00:06:49,560 --> 00:06:51,960 Speaker 1: Let me come back. The Market's response to the war 119 00:06:52,000 --> 00:06:54,960 Speaker 1: in Ukraine with Kate Moore, Black Rock and Rebecca Patterson 120 00:06:55,000 --> 00:06:58,000 Speaker 1: of Bridgewater Associates. This is Bloomberg Wall Street Reek. I'm 121 00:06:58,040 --> 00:07:04,320 Speaker 1: David Weston. This is Bloomberg Wall Street Week with David 122 00:07:04,320 --> 00:07:09,000 Speaker 1: Weston from Bloomberg Radio. Ukraine dominated a tumultuous week of trading, 123 00:07:09,040 --> 00:07:11,680 Speaker 1: with the SMP five hundred falling into correction Territory and 124 00:07:11,760 --> 00:07:15,480 Speaker 1: Thursday only to climb back up to two for the week. 125 00:07:15,680 --> 00:07:18,200 Speaker 1: The Nasdaq was up also by one point six percent, 126 00:07:18,360 --> 00:07:21,040 Speaker 1: while the Tenure veered from a yield of under one 127 00:07:21,040 --> 00:07:23,600 Speaker 1: point eight five to over two point oh, ending the 128 00:07:23,640 --> 00:07:26,680 Speaker 1: way just under the two point oh mark. An oil Oil, 129 00:07:26,720 --> 00:07:29,640 Speaker 1: of course, got hit the most by the uncertainty over Ukraine. 130 00:07:29,800 --> 00:07:32,760 Speaker 1: Brent shot up to over one five dollars of barrel 131 00:07:32,800 --> 00:07:35,000 Speaker 1: after news of the invasion hit on Thursday, and then 132 00:07:35,040 --> 00:07:37,880 Speaker 1: settled back down to nine dollars of barrel when it 133 00:07:37,880 --> 00:07:40,920 Speaker 1: appeared that sanctions wouldn't hit the energy sector as hard 134 00:07:40,960 --> 00:07:43,680 Speaker 1: as was thought, at least for now. To to help 135 00:07:43,760 --> 00:07:46,600 Speaker 1: us understand the market reactions welcomed now. Kate Moore she's 136 00:07:46,640 --> 00:07:49,880 Speaker 1: head of Thematic Strategies at black Rock Financial Management, and 137 00:07:50,160 --> 00:07:53,520 Speaker 1: Rebecca Patterson Bridgewater, director of Investment Research. So let me 138 00:07:53,560 --> 00:07:55,880 Speaker 1: start with you, Rebecca, what about what happened with equities 139 00:07:55,880 --> 00:07:58,240 Speaker 1: this week? It was all over the place. Well, you know, 140 00:07:58,560 --> 00:08:00,920 Speaker 1: obviously we were all focused on the Ukraine and what 141 00:08:01,080 --> 00:08:04,160 Speaker 1: was happening there, But UM, I think it's important to 142 00:08:04,160 --> 00:08:06,440 Speaker 1: remember that the markets are always being driven by a 143 00:08:06,480 --> 00:08:09,120 Speaker 1: myriad of factors. Ukraine was front and center, but we 144 00:08:09,200 --> 00:08:11,080 Speaker 1: also were in a period where we had a lot 145 00:08:11,080 --> 00:08:13,920 Speaker 1: of buybacks going on. A lot of those tech companies 146 00:08:13,920 --> 00:08:16,080 Speaker 1: that had sold off a lot probably benefited from that 147 00:08:16,080 --> 00:08:17,640 Speaker 1: as we got into end of the week, and of 148 00:08:17,680 --> 00:08:20,600 Speaker 1: course we're going into month and rebalancing, and so that 149 00:08:20,680 --> 00:08:23,200 Speaker 1: can also cause a lot of trading. So even when 150 00:08:23,200 --> 00:08:25,320 Speaker 1: things are very whippy and you don't always say, how 151 00:08:25,320 --> 00:08:28,480 Speaker 1: does this tie to the headlines with Ukraine, it's important 152 00:08:28,480 --> 00:08:30,520 Speaker 1: to remember that there's a lot of things going on 153 00:08:30,600 --> 00:08:33,200 Speaker 1: behind the scenes. In addition to that, obviously that was 154 00:08:33,280 --> 00:08:36,400 Speaker 1: the most important thing, and as you said, the possibility 155 00:08:36,440 --> 00:08:39,120 Speaker 1: that sanctions won't be as hard as they might be 156 00:08:39,240 --> 00:08:41,920 Speaker 1: at least for now, UM might have also helped us 157 00:08:41,920 --> 00:08:43,640 Speaker 1: get a little bit of a reprieve towards the end 158 00:08:43,640 --> 00:08:46,680 Speaker 1: of the week. Kate, Yeah, I know, you're very interesting 159 00:08:46,720 --> 00:08:50,680 Speaker 1: resources companies. What happened with resources companies? We actually had 160 00:08:50,679 --> 00:08:53,960 Speaker 1: a phenomenal week once again for resources companies. You know, 161 00:08:54,120 --> 00:08:56,200 Speaker 1: in the US, the x m E, which is the 162 00:08:56,320 --> 00:08:58,480 Speaker 1: sp by D Mining E t F, hit a ten 163 00:08:58,559 --> 00:09:01,680 Speaker 1: year high uh and globally we've seen the same kind 164 00:09:01,679 --> 00:09:05,040 Speaker 1: of thing across resources companies. You know, it has been 165 00:09:05,080 --> 00:09:09,760 Speaker 1: a phenomenal rally driven by both good supply demand dynamics 166 00:09:09,800 --> 00:09:14,760 Speaker 1: as well as some concern over ongoing supply disruptions, particularly 167 00:09:14,760 --> 00:09:17,720 Speaker 1: from the rush of Ukraine situation. So you have both 168 00:09:17,720 --> 00:09:21,200 Speaker 1: the geopolitical and the fundamental side really backing up an 169 00:09:21,200 --> 00:09:24,320 Speaker 1: incredibly strong rally in a sector. When you think about 170 00:09:24,360 --> 00:09:26,920 Speaker 1: the miners in particular that have been so unloved for 171 00:09:27,000 --> 00:09:29,360 Speaker 1: so long. It was a place I played in in 172 00:09:29,400 --> 00:09:31,600 Speaker 1: a many parts of my career. I had a dust 173 00:09:31,600 --> 00:09:34,080 Speaker 1: off some of my playbooks and some of my skills there. 174 00:09:34,679 --> 00:09:36,880 Speaker 1: One thing I'd add to what Kate just said on 175 00:09:37,000 --> 00:09:40,120 Speaker 1: some of these resource companies is even before Ukraine and 176 00:09:40,160 --> 00:09:43,440 Speaker 1: the threat to supplies that that implies, we already had 177 00:09:43,480 --> 00:09:46,720 Speaker 1: a situation where demand obviously very very strong with all 178 00:09:46,760 --> 00:09:49,920 Speaker 1: the fiscal and monetary stimulus after COVID, But then on 179 00:09:50,000 --> 00:09:52,400 Speaker 1: top of that, a lot of these sectors has seen 180 00:09:52,520 --> 00:09:56,560 Speaker 1: under investment for years, so supplies were already somewhat low 181 00:09:56,679 --> 00:09:59,240 Speaker 1: before we had this demand shock, and now we're in 182 00:09:59,240 --> 00:10:02,079 Speaker 1: a situation where supplies aren't even close to what we need. 183 00:10:02,440 --> 00:10:05,599 Speaker 1: Whether we're talking about oil with under investment both in 184 00:10:05,640 --> 00:10:08,559 Speaker 1: the US and by OPEC countries, whether we're talking about 185 00:10:08,559 --> 00:10:10,559 Speaker 1: a lot of crops. We've seen under investment in the 186 00:10:10,600 --> 00:10:13,280 Speaker 1: last couple of years, partly a weather situation, but supplies 187 00:10:13,400 --> 00:10:16,480 Speaker 1: very low and in the metals, and so demand is 188 00:10:16,559 --> 00:10:20,640 Speaker 1: improving after o macrons starting to fade. Hopefully the Ukraine 189 00:10:20,679 --> 00:10:23,240 Speaker 1: situation won't dent that too much. So you have strong 190 00:10:23,320 --> 00:10:25,360 Speaker 1: demand and these supplies that can't keep up, and this 191 00:10:25,520 --> 00:10:28,360 Speaker 1: just creates an additional risk on supply. So I think 192 00:10:28,360 --> 00:10:30,800 Speaker 1: to Kate's point, some of these companies look like a 193 00:10:30,800 --> 00:10:33,280 Speaker 1: good inflation hedge, and they're also just in a great 194 00:10:33,320 --> 00:10:36,840 Speaker 1: position to benefit from that increased demand. Yeah. I would 195 00:10:36,840 --> 00:10:38,880 Speaker 1: add on to something else for Becca saying, which is 196 00:10:39,000 --> 00:10:41,240 Speaker 1: in addition to what's happening in the very near term 197 00:10:41,320 --> 00:10:45,040 Speaker 1: around supply demand. There's also a longer term demand story. 198 00:10:45,360 --> 00:10:48,240 Speaker 1: A lot of these miners produce metals that are actually 199 00:10:48,280 --> 00:10:52,680 Speaker 1: incredibly important for the energy transition and for electric vehicles, 200 00:10:53,120 --> 00:10:56,440 Speaker 1: and we're seeing them undersupplied in the market. We've also 201 00:10:56,520 --> 00:10:59,800 Speaker 1: seen like some metals like aluminium, for example, or some 202 00:11:00,080 --> 00:11:02,959 Speaker 1: resources like aluminum um, you know how, kind of a 203 00:11:02,960 --> 00:11:04,760 Speaker 1: bit of a backlash against you know how some of 204 00:11:04,800 --> 00:11:09,120 Speaker 1: the that is produced, and so aluminum producers that use 205 00:11:09,200 --> 00:11:13,800 Speaker 1: natural gas or cleaner energy to produce are coming into favor. 206 00:11:14,200 --> 00:11:16,679 Speaker 1: It is a place where I think we'll see continued 207 00:11:17,200 --> 00:11:20,320 Speaker 1: support for prices over the medium term. Rebecca, this is 208 00:11:20,320 --> 00:11:23,640 Speaker 1: a geopolitical crisis with a specific location, which is Europe, 209 00:11:23,679 --> 00:11:26,240 Speaker 1: and we saw at various times this week a really 210 00:11:26,320 --> 00:11:29,000 Speaker 1: different reaction in the markets depending on Europe versus the 211 00:11:29,080 --> 00:11:32,040 Speaker 1: United States. Do you think that will persist? Unfortunately, I do. 212 00:11:32,480 --> 00:11:34,720 Speaker 1: You know, we we don't know the duration or the 213 00:11:34,760 --> 00:11:38,000 Speaker 1: degree of the Ukraine crisis, and so obviously that matters. 214 00:11:38,080 --> 00:11:41,680 Speaker 1: But even if there aren't the worst possible sanctions on energy, 215 00:11:41,720 --> 00:11:43,960 Speaker 1: they want to get the energy flows to Europe. A 216 00:11:44,080 --> 00:11:47,679 Speaker 1: third of Russians oil exports go through the Ukraine. So 217 00:11:47,840 --> 00:11:49,920 Speaker 1: if you have a situation where they can't get the 218 00:11:49,960 --> 00:11:52,680 Speaker 1: flows through, You're gonna see higher prices no matter what's 219 00:11:52,720 --> 00:11:55,240 Speaker 1: going on with the sanctions. So what Europe seeing is 220 00:11:55,400 --> 00:11:59,119 Speaker 1: greater risk of what I'd call a stagflationary shock, where inflation, 221 00:11:59,160 --> 00:12:01,680 Speaker 1: which is already more than double the ECB the European 222 00:12:01,720 --> 00:12:04,920 Speaker 1: Central Banks target, is going higher and at the same 223 00:12:04,960 --> 00:12:06,960 Speaker 1: time growth is going lower. Part of it is a 224 00:12:07,000 --> 00:12:10,040 Speaker 1: sentiment shock, but part of it is the inflation eroding 225 00:12:10,080 --> 00:12:13,120 Speaker 1: people's disposable income. Do they just have less to spend? 226 00:12:13,480 --> 00:12:16,160 Speaker 1: So the good news is that going into this shock, 227 00:12:16,440 --> 00:12:19,760 Speaker 1: growth was improving, so they're starting from a strong place. 228 00:12:19,880 --> 00:12:22,040 Speaker 1: The question is how far does this pull them back? 229 00:12:22,240 --> 00:12:24,559 Speaker 1: And then how does the European Central Bank respond more 230 00:12:24,600 --> 00:12:26,600 Speaker 1: to growth or more to the inflation. They're in a 231 00:12:26,679 --> 00:12:30,040 Speaker 1: really difficult position. Okay, I wonder about Europe in general, 232 00:12:30,120 --> 00:12:32,720 Speaker 1: because before this all happened, there were those who were 233 00:12:32,720 --> 00:12:34,400 Speaker 1: saying this was gonna be the year for Europe. Finally 234 00:12:34,440 --> 00:12:36,800 Speaker 1: we're gonna have the year for Europe because valuations were 235 00:12:36,880 --> 00:12:39,320 Speaker 1: very attractive, there was gonna be better growth. Does this 236 00:12:39,480 --> 00:12:41,480 Speaker 1: change that dynamic or did you believe in it to 237 00:12:41,520 --> 00:12:44,280 Speaker 1: begin with? Yeah, David, I never believed in it to 238 00:12:44,360 --> 00:12:46,600 Speaker 1: begin with, and I think those folks that work with 239 00:12:46,640 --> 00:12:49,559 Speaker 1: me know that, well, let's not call myself a euroskeptic, 240 00:12:49,840 --> 00:12:53,319 Speaker 1: but someone who doesn't believe that buying European index exposure 241 00:12:53,400 --> 00:12:56,760 Speaker 1: makes sense in most scenarios. When you buy Europe, get 242 00:12:56,760 --> 00:12:59,920 Speaker 1: a lot of exposure to what I would consider lower quality, 243 00:13:00,080 --> 00:13:03,960 Speaker 1: lower growth companies, big exposure to the Bank's, big exposure 244 00:13:04,040 --> 00:13:06,080 Speaker 1: to some you know, companies that I would think of 245 00:13:06,720 --> 00:13:10,160 Speaker 1: as having more stagnant business models and don't have kind 246 00:13:10,160 --> 00:13:13,839 Speaker 1: of dynamic flow. So it was not something I was 247 00:13:13,920 --> 00:13:16,240 Speaker 1: really excited about to begin with. And I think one 248 00:13:16,240 --> 00:13:18,520 Speaker 1: of the things that's not fully priced into European equities 249 00:13:18,640 --> 00:13:20,400 Speaker 1: right now is the extent to which that which this 250 00:13:20,520 --> 00:13:25,440 Speaker 1: Russia Ukraine conflict UH could lead through into European growth. 251 00:13:25,840 --> 00:13:28,319 Speaker 1: I think it's incredibly important to be selected in your 252 00:13:28,320 --> 00:13:31,120 Speaker 1: European investments at this point. There are plenty of great, 253 00:13:31,240 --> 00:13:33,760 Speaker 1: high quality companies that are not just going to be 254 00:13:33,840 --> 00:13:36,520 Speaker 1: geared towards domestic growth, and I think that's where we 255 00:13:36,520 --> 00:13:39,359 Speaker 1: need to focus our attention when we think about exposure 256 00:13:39,400 --> 00:13:42,560 Speaker 1: to the region. One thing I'd add to your point, Kate, 257 00:13:42,760 --> 00:13:45,600 Speaker 1: if we're looking for catalysts that could affect our outlook 258 00:13:45,640 --> 00:13:49,040 Speaker 1: on growth in Europe would be what happens fiscally. So 259 00:13:49,200 --> 00:13:51,679 Speaker 1: Europe is getting its act together this year. They're all 260 00:13:51,720 --> 00:13:54,800 Speaker 1: talking about what should our fiscal framework be. Their fiscal 261 00:13:54,840 --> 00:13:58,920 Speaker 1: policy right now, they're set to start imposing their old policies. 262 00:13:58,960 --> 00:14:02,720 Speaker 1: Pre pandemic policy is next year, but they may decide 263 00:14:02,760 --> 00:14:05,920 Speaker 1: because of the Russia Ukraine conflict, to give another extension, 264 00:14:06,200 --> 00:14:08,920 Speaker 1: so letting governments spend a little bit longer, not putting 265 00:14:08,960 --> 00:14:12,120 Speaker 1: that austerity straight jack and back on. If they do that, 266 00:14:12,120 --> 00:14:14,400 Speaker 1: that could be another support to growth that I don't 267 00:14:14,400 --> 00:14:17,160 Speaker 1: think is discounted in prices right now. We should know 268 00:14:17,240 --> 00:14:19,360 Speaker 1: that around mid year, So in addition to what the 269 00:14:19,400 --> 00:14:22,440 Speaker 1: European Central Bank does, how they respond, this would be 270 00:14:22,480 --> 00:14:25,840 Speaker 1: another important catalyst that I think could affect views. Again, 271 00:14:25,920 --> 00:14:28,120 Speaker 1: I agree with you, Kate, certain stocks more than others. 272 00:14:28,360 --> 00:14:30,760 Speaker 1: Many thanks that a Kate Moore, Black Rock and Rebecca 273 00:14:30,800 --> 00:14:34,480 Speaker 1: Patterson of Bridgewater Associates, Director of Investment Research. Coming up, 274 00:14:34,640 --> 00:14:37,240 Speaker 1: Debra Lair of the Pulse and Institute on the China 275 00:14:37,280 --> 00:14:39,760 Speaker 1: piece of the puzzle that's coming up next on Wall 276 00:14:39,760 --> 00:14:49,800 Speaker 1: Street Week, and we are on Bloomberg this is Bloomberg 277 00:14:49,880 --> 00:14:57,120 Speaker 1: Wall Street Week with David Weston from Bloomberg Radio China. 278 00:14:57,520 --> 00:15:00,800 Speaker 1: It's been the economic success story of the last half century, 279 00:15:01,080 --> 00:15:04,080 Speaker 1: as g d P and per capita GDP have gone 280 00:15:04,160 --> 00:15:07,960 Speaker 1: up faster than any economy in history. But now some 281 00:15:08,040 --> 00:15:11,800 Speaker 1: people see some problems developing. Whether it's the struggling property 282 00:15:11,840 --> 00:15:16,440 Speaker 1: sector flagged by investors like George Soros, China is facing 283 00:15:16,440 --> 00:15:22,600 Speaker 1: an economic crisis centered under real estate rclipt, which has 284 00:15:22,680 --> 00:15:26,880 Speaker 1: been the main engineer of growth ever since she Deven 285 00:15:27,040 --> 00:15:30,280 Speaker 1: came to power, or the policy at zero tolerance for 286 00:15:30,320 --> 00:15:33,840 Speaker 1: COVID that experts like Amish Adelage of Johns Hopkins find 287 00:15:34,040 --> 00:15:37,560 Speaker 1: just plain wrong. COVID zero was wrong from the beginning. 288 00:15:37,600 --> 00:15:39,680 Speaker 1: If someone wrote that on an essay question on a test, 289 00:15:39,680 --> 00:15:41,840 Speaker 1: I would say that's a wrong answer to how you 290 00:15:41,880 --> 00:15:44,920 Speaker 1: deal with this type of a virus. Factors that lead 291 00:15:44,920 --> 00:15:48,240 Speaker 1: our special Wall Street we contributor Larry Summers to suggest 292 00:15:48,280 --> 00:15:53,760 Speaker 1: we may be overestimating China's economic strength and underestimating its problems. 293 00:15:54,080 --> 00:15:59,920 Speaker 1: Consider the possibility that we may be underestimating uh China 294 00:16:00,120 --> 00:16:04,880 Speaker 1: his challenges now, and we need to be particularly careful 295 00:16:05,440 --> 00:16:16,200 Speaker 1: about being overly provocative too. And for more on China. 296 00:16:16,280 --> 00:16:17,960 Speaker 1: We're going to turn out to I'll call her our 297 00:16:18,040 --> 00:16:21,040 Speaker 1: resident expert on China. She's Deborah Laire. She is the 298 00:16:21,080 --> 00:16:24,640 Speaker 1: CEO of Edelman Global Advisory as well as the executive 299 00:16:24,680 --> 00:16:27,160 Speaker 1: director of The Pulse Sinister. Welcome back to Wall Street. 300 00:16:27,160 --> 00:16:29,360 Speaker 1: It's good to have you here, very delighted. So you 301 00:16:29,480 --> 00:16:33,840 Speaker 1: understand President gy and China better than most Americans do. 302 00:16:34,000 --> 00:16:35,800 Speaker 1: Give us a sense of how he looks at this 303 00:16:35,920 --> 00:16:39,200 Speaker 1: year going into two. Well, this is a really important 304 00:16:39,280 --> 00:16:42,120 Speaker 1: year for she didn't paying for many different reasons. It's 305 00:16:42,120 --> 00:16:46,160 Speaker 1: he started his reselection campaign leading up to a potential 306 00:16:46,200 --> 00:16:49,680 Speaker 1: third term as president. He is still managing the economy 307 00:16:49,760 --> 00:16:53,000 Speaker 1: coming out of COVID. He is facing the big question 308 00:16:53,080 --> 00:16:56,680 Speaker 1: of how to reopen after the zero tolerance policy and 309 00:16:56,720 --> 00:17:01,040 Speaker 1: COVID lockdown, and now his new friend Ladimir Putin has 310 00:17:01,040 --> 00:17:03,880 Speaker 1: put him in a very difficult position as he has 311 00:17:03,920 --> 00:17:09,160 Speaker 1: to choose between the relationship with Russia and the relationship 312 00:17:09,280 --> 00:17:12,800 Speaker 1: still with the West then particularly the United States. So 313 00:17:12,880 --> 00:17:14,920 Speaker 1: what about that relationship. We saw the two of them 314 00:17:14,920 --> 00:17:16,960 Speaker 1: together at the beginning of the Winter Olympics, sort of 315 00:17:16,960 --> 00:17:18,880 Speaker 1: pledging their troth if I can put it that way, 316 00:17:19,040 --> 00:17:22,280 Speaker 1: They're really supporting one another at the same time, Often 317 00:17:22,320 --> 00:17:25,959 Speaker 1: people who are autocratic don't like violations of boundaries. And 318 00:17:26,000 --> 00:17:30,320 Speaker 1: now we have Russia invading Ukraine. What is China's position 319 00:17:30,359 --> 00:17:32,720 Speaker 1: here and to what extent will they help Russia out 320 00:17:33,080 --> 00:17:36,080 Speaker 1: by buying things like oil and wheat? Great, Well, you know, 321 00:17:36,119 --> 00:17:38,639 Speaker 1: it's it's I guess a certain irony that it's the 322 00:17:38,680 --> 00:17:43,520 Speaker 1: fiftieth year to celebrate Nixon's kind of visit to China 323 00:17:43,600 --> 00:17:46,160 Speaker 1: and the reopening of the relationship, which was really driven 324 00:17:46,840 --> 00:17:49,600 Speaker 1: um as a way to counterbalance Russia. And we're now 325 00:17:49,760 --> 00:17:54,080 Speaker 1: back in looking at this triangle. Russia's move has put 326 00:17:54,119 --> 00:17:56,840 Speaker 1: to Jumping in a very difficult position because traditionally the 327 00:17:56,920 --> 00:18:00,760 Speaker 1: Chinese position is not to violate national sovereignty. On the 328 00:18:00,800 --> 00:18:04,560 Speaker 1: other hand, Vladimir Putin is making certain arguments about a 329 00:18:04,600 --> 00:18:08,560 Speaker 1: historical legacy that resonate for China when it comes to 330 00:18:08,640 --> 00:18:12,880 Speaker 1: its position on Taiwan. But China is still very dependent 331 00:18:12,960 --> 00:18:17,399 Speaker 1: on the West. Looking ahead at the economy, you know, 332 00:18:17,480 --> 00:18:19,199 Speaker 1: we've we've talked a lot and there's been a lot 333 00:18:19,240 --> 00:18:21,560 Speaker 1: of discussion about what the impact of COVID in the 334 00:18:21,600 --> 00:18:26,520 Speaker 1: lockdown has been on the Chinese economy. Well, it's we've 335 00:18:26,560 --> 00:18:29,040 Speaker 1: looked really at some of the fundamentals, not as much 336 00:18:29,040 --> 00:18:31,440 Speaker 1: as you would be led to believe that the real 337 00:18:31,640 --> 00:18:34,400 Speaker 1: drags on the economy have been a tight monetary policy. 338 00:18:34,960 --> 00:18:38,680 Speaker 1: They have been the lack of semiconductor chips because of 339 00:18:38,800 --> 00:18:41,800 Speaker 1: U S sanctions, and the energy shortage. She has been 340 00:18:41,840 --> 00:18:44,280 Speaker 1: starting to address all of that. They're looking at ramping 341 00:18:44,359 --> 00:18:47,720 Speaker 1: up monetary policy with a stimulus program in this first 342 00:18:47,800 --> 00:18:51,520 Speaker 1: quarter because that will start to hit come October November, 343 00:18:51,640 --> 00:18:55,439 Speaker 1: just as he is standing for his reselection. But also 344 00:18:55,600 --> 00:18:59,159 Speaker 1: he's been addressing the energy shortage, looking at what's going 345 00:18:59,240 --> 00:19:02,400 Speaker 1: to happen with rush to China just signed long term 346 00:19:02,440 --> 00:19:05,119 Speaker 1: contracts when Vladimir Putin was there in early February at 347 00:19:05,119 --> 00:19:08,200 Speaker 1: the start of the Olympics for wheat where Russia and 348 00:19:08,200 --> 00:19:11,240 Speaker 1: the Ukraine or some of the largest growers, and for oil. 349 00:19:11,800 --> 00:19:14,280 Speaker 1: But if the oil prices go up to you know, 350 00:19:14,280 --> 00:19:16,840 Speaker 1: they're already hitting a hundred a hundred and fifty, people 351 00:19:16,840 --> 00:19:19,040 Speaker 1: are speculating even two hundred. This is going to have 352 00:19:19,080 --> 00:19:23,200 Speaker 1: a significant impact on the Chinese economy and their ability 353 00:19:23,280 --> 00:19:26,320 Speaker 1: to maintain even what we speculate will be a five 354 00:19:26,359 --> 00:19:28,800 Speaker 1: percent goal of growth this year. What about the growth level, 355 00:19:28,840 --> 00:19:31,520 Speaker 1: because China has really been an engine for growth globally, 356 00:19:31,600 --> 00:19:34,760 Speaker 1: not just within China. Globally it is slowing down somehow 357 00:19:34,920 --> 00:19:37,080 Speaker 1: badly is it slowing down? Well, if you look at 358 00:19:37,200 --> 00:19:39,280 Speaker 1: last year and you talk about the effect of COVID 359 00:19:40,359 --> 00:19:43,360 Speaker 1: putting aside kind of this, these talks of the lockdown 360 00:19:43,440 --> 00:19:45,800 Speaker 1: in the supply chain, if you look at the numbers, 361 00:19:45,840 --> 00:19:49,399 Speaker 1: it's unbelievable. They had an absolute banner year when it 362 00:19:49,440 --> 00:19:52,480 Speaker 1: came to production and when it came to exports. So 363 00:19:52,600 --> 00:19:57,520 Speaker 1: the supply chain kind of hold ups weren't necessarily from China, 364 00:19:57,600 --> 00:20:00,200 Speaker 1: accept in some isolated cases when they did close down 365 00:20:00,200 --> 00:20:02,480 Speaker 1: a port for a COVID scare or something like that. 366 00:20:03,040 --> 00:20:05,200 Speaker 1: They really were an engine of growth with the rest 367 00:20:05,200 --> 00:20:08,800 Speaker 1: of the world. Now this is going to be a 368 00:20:09,640 --> 00:20:12,000 Speaker 1: supply shock to the rest of the world, and what 369 00:20:12,080 --> 00:20:13,919 Speaker 1: Russia has done is going to have an impact on 370 00:20:13,960 --> 00:20:16,800 Speaker 1: global growth and that is definitely getting hit China because 371 00:20:17,280 --> 00:20:20,840 Speaker 1: they still are dependent on these export markets. Okay, thank 372 00:20:20,880 --> 00:20:23,480 Speaker 1: you so much, Devor. That's Deborah Lair of the Pulse 373 00:20:23,560 --> 00:20:27,560 Speaker 1: and Institute. Coming up. We wrap up the week with 374 00:20:27,600 --> 00:20:31,680 Speaker 1: special contributor Larry Summers of Harvard. This is Wall Street 375 00:20:31,680 --> 00:20:37,080 Speaker 1: Week on Bloomberg. This is Bloomberg Wall Street Week with 376 00:20:37,240 --> 00:20:40,760 Speaker 1: David Weston from Bloomberg Radio. This is Wall Street Week. 377 00:20:40,760 --> 00:20:43,359 Speaker 1: I'm David Weston. We're joined once again by our very 378 00:20:43,400 --> 00:20:46,280 Speaker 1: special contributor for Wall Street Week. He is Dr Larry 379 00:20:46,320 --> 00:20:49,320 Speaker 1: Summers of Harvard. So, Larry, it's good to see you again. 380 00:20:49,400 --> 00:20:51,160 Speaker 1: This has been a rough week. I think it's fair 381 00:20:51,200 --> 00:20:53,080 Speaker 1: to say the big event of the week was that 382 00:20:53,359 --> 00:20:55,800 Speaker 1: a full scale invasion the likes of which we haven't 383 00:20:55,800 --> 00:20:58,760 Speaker 1: seen since World War Two of Russia into Ukraine. What 384 00:20:58,840 --> 00:21:01,560 Speaker 1: are your thoughts overall what we've seen this week From 385 00:21:01,560 --> 00:21:05,000 Speaker 1: the perspective of six months ago, this is a shock 386 00:21:05,840 --> 00:21:09,800 Speaker 1: from the perspective of what had been unfolding and what U. 387 00:21:09,880 --> 00:21:13,919 Speaker 1: S Intelligence had been telling us. Um it wasn't that 388 00:21:14,080 --> 00:21:20,880 Speaker 1: surprising when it came, But make no mistake, I think 389 00:21:20,920 --> 00:21:23,560 Speaker 1: there's a real chance that this is going to be 390 00:21:23,640 --> 00:21:28,960 Speaker 1: one of those moments like January six, like nine eleven, 391 00:21:29,200 --> 00:21:37,640 Speaker 1: like November two, that echoes through UH history that this 392 00:21:37,840 --> 00:21:44,280 Speaker 1: kind of naked aggression could take place in UH Europe, 393 00:21:45,240 --> 00:21:50,840 Speaker 1: that there could be the kind of emerging alliance that 394 00:21:50,920 --> 00:21:56,399 Speaker 1: we have seen between Russia and China. At the same 395 00:21:56,440 --> 00:22:01,520 Speaker 1: time means that we are in a very different world 396 00:22:02,359 --> 00:22:07,879 Speaker 1: than many of us had thought we were headed into. 397 00:22:08,520 --> 00:22:16,280 Speaker 1: The United States faces far graver challenges to its security 398 00:22:16,400 --> 00:22:24,840 Speaker 1: than anyone would have thought likely even UH several years ago, 399 00:22:25,800 --> 00:22:29,280 Speaker 1: and that's going to have ramifications or needs to have 400 00:22:30,000 --> 00:22:38,360 Speaker 1: ramifications for almost every aspect of our national life. History 401 00:22:38,400 --> 00:22:43,920 Speaker 1: has not ended. We are engaged in the kind of 402 00:22:44,040 --> 00:22:50,200 Speaker 1: struggle that Lincoln UH spoke of about whether government by 403 00:22:50,240 --> 00:22:55,920 Speaker 1: the people for the people can long endure. That is 404 00:22:55,960 --> 00:23:03,400 Speaker 1: a challenge domestically, that is a challenge globally, and anyone 405 00:23:03,520 --> 00:23:08,359 Speaker 1: who thinks that it is not a challenge to their 406 00:23:08,440 --> 00:23:14,640 Speaker 1: ability to flourish and profit as a business is making 407 00:23:14,800 --> 00:23:22,800 Speaker 1: an enormous mistake, because if we lose this UH struggle, 408 00:23:23,520 --> 00:23:28,679 Speaker 1: it is not only our freedom and our security, but 409 00:23:28,800 --> 00:23:32,840 Speaker 1: our prosperity that will be at peril. The thoughts of 410 00:23:32,880 --> 00:23:35,520 Speaker 1: all of us, I'm sure our first with the men, 411 00:23:35,600 --> 00:23:38,240 Speaker 1: women and yes children Ukraine and what they are going 412 00:23:38,280 --> 00:23:41,320 Speaker 1: through right now, and also the issues of the world 413 00:23:41,440 --> 00:23:44,199 Speaker 1: order that you're raising, which are very profound. At the 414 00:23:44,240 --> 00:23:47,919 Speaker 1: same time, this could have as well some profound economic consequences, 415 00:23:47,920 --> 00:23:50,560 Speaker 1: particularly in the world in the United states, particularly where 416 00:23:50,600 --> 00:23:52,520 Speaker 1: we have a fair amount of inflation. What do you 417 00:23:52,600 --> 00:23:56,800 Speaker 1: think the economic implications of this geopolitical crisis could be, David, 418 00:23:56,840 --> 00:24:04,040 Speaker 1: It's not gonna be good. UM. The direction is stagflationary. 419 00:24:04,920 --> 00:24:09,280 Speaker 1: The direction is both to raise prices. We're seeing that 420 00:24:09,600 --> 00:24:16,399 Speaker 1: in oil and energy and other commodity markets. The direction 421 00:24:16,560 --> 00:24:23,600 Speaker 1: is also to UM reduce reduce the level of demand 422 00:24:24,280 --> 00:24:32,040 Speaker 1: and spending as those price increases, UH sap purchasing UH power. 423 00:24:32,880 --> 00:24:38,119 Speaker 1: So the very difficult job that the FED had already 424 00:24:38,160 --> 00:24:43,520 Speaker 1: made for itself by falling so far behind UH the 425 00:24:43,600 --> 00:24:49,960 Speaker 1: curve has become that much more difficult with what we 426 00:24:50,040 --> 00:24:57,840 Speaker 1: have seen. The danger is that Team Transitory will morph 427 00:24:57,960 --> 00:25:04,800 Speaker 1: into Team It's a supply shock caused by oil and 428 00:25:04,920 --> 00:25:11,960 Speaker 1: find further excuse to avoid taking the necessary steps to 429 00:25:12,680 --> 00:25:21,639 Speaker 1: UH contain inflation, and therefore postpone the ultimate UH reckoning 430 00:25:22,200 --> 00:25:26,080 Speaker 1: and make more serious What is what needs to be 431 00:25:26,160 --> 00:25:33,520 Speaker 1: done UH to UH contain inflation. The argument will be 432 00:25:33,640 --> 00:25:40,840 Speaker 1: made that we can't afford restrictive policies. The problem is 433 00:25:41,440 --> 00:25:47,240 Speaker 1: that we also can't afford an entirely unsustainable economic path 434 00:25:48,000 --> 00:25:53,040 Speaker 1: that will ultimately set the stage for more economic distress, 435 00:25:53,880 --> 00:26:01,240 Speaker 1: more pain, and more UH, reduction in employment for the 436 00:26:01,280 --> 00:26:07,600 Speaker 1: most vulnerable people in our society. This is a very 437 00:26:07,640 --> 00:26:14,280 Speaker 1: serious moment, and it's a moment when policy makers have 438 00:26:14,920 --> 00:26:19,359 Speaker 1: great responsibility to do things that are not easy. Larry, 439 00:26:19,359 --> 00:26:21,359 Speaker 1: I don't know if his team transitory or app but 440 00:26:22,080 --> 00:26:25,000 Speaker 1: respected economists I know you respect him. A former classmate. 441 00:26:25,080 --> 00:26:27,760 Speaker 1: Here's Paul Krugman weighed in on the inflation question, at 442 00:26:27,840 --> 00:26:29,240 Speaker 1: least one aspect of it this week in the New 443 00:26:29,320 --> 00:26:32,040 Speaker 1: York Times, where he essentially, if I can summarize it, 444 00:26:32,040 --> 00:26:34,800 Speaker 1: took issues with what he called sort of technocrats who 445 00:26:34,800 --> 00:26:38,560 Speaker 1: were distancing themselves from the Biden administration by criticizing some 446 00:26:38,640 --> 00:26:41,719 Speaker 1: of the politically popular things that have been suggested, such as, 447 00:26:41,720 --> 00:26:44,800 Speaker 1: for example, suspending the tax on gasoline, something you commented 448 00:26:44,960 --> 00:26:47,919 Speaker 1: on last weekend this program. I got a reaction from you. 449 00:26:48,000 --> 00:26:51,200 Speaker 1: I saw on Twitter. Paul's a brilliant guy, but on 450 00:26:51,240 --> 00:26:56,240 Speaker 1: this I think he is way off base. We would 451 00:26:56,280 --> 00:27:01,440 Speaker 1: not be where we are if any of the economists 452 00:27:01,840 --> 00:27:07,080 Speaker 1: who saw inflationary danger last summer had been prepared to 453 00:27:07,960 --> 00:27:16,440 Speaker 1: speak up and express UH their concerns. By giving air 454 00:27:17,240 --> 00:27:22,760 Speaker 1: to the bogus view that inflation has something to do 455 00:27:23,000 --> 00:27:29,879 Speaker 1: with greed. Distinguished economists are delaying the moment at which 456 00:27:30,480 --> 00:27:36,159 Speaker 1: it will be confronted in a serious UH way. I 457 00:27:36,200 --> 00:27:42,640 Speaker 1: am not worried about independent economists speaking their mind when 458 00:27:42,640 --> 00:27:46,639 Speaker 1: they're out of government, rather than maintaining some kind of 459 00:27:46,720 --> 00:27:54,320 Speaker 1: loyalty to a political UH viewpoint. I am worried about 460 00:27:54,640 --> 00:28:01,639 Speaker 1: columnists who choose to use their influence is distinguished economists 461 00:28:02,359 --> 00:28:09,200 Speaker 1: only to reinforce the prejudices and instincts of a particular 462 00:28:09,320 --> 00:28:15,800 Speaker 1: political constituency that I think is a much greater UH danger. 463 00:28:16,480 --> 00:28:23,480 Speaker 1: Paul Krugman is the world's most distinguished international economists. Let's 464 00:28:23,520 --> 00:28:31,080 Speaker 1: hear his views opposing protectionism. Let's hear his views recognizing 465 00:28:31,760 --> 00:28:41,520 Speaker 1: the importance of international interconnection in holding down UH prices. 466 00:28:42,160 --> 00:28:47,680 Speaker 1: Let's hear him. Let's hear him UH be prepared to 467 00:28:48,000 --> 00:28:55,600 Speaker 1: challenge policy approaches that almost all economists recognize are misguided. 468 00:28:55,800 --> 00:28:57,520 Speaker 1: So letry Let's take a moment here at the end 469 00:28:57,560 --> 00:28:59,440 Speaker 1: to look forward to next week. We're gonna have the 470 00:28:59,480 --> 00:29:01,920 Speaker 1: first You'll Stay in the Union dress from President Biden 471 00:29:02,120 --> 00:29:05,680 Speaker 1: on Tuesday evening. That's always an important and yes, challenging 472 00:29:05,680 --> 00:29:07,800 Speaker 1: speech for a president. It's going to be particularly so 473 00:29:07,920 --> 00:29:10,160 Speaker 1: I suspect this. You're given what you've just been saying 474 00:29:10,160 --> 00:29:13,240 Speaker 1: about inflation, but also the war in Ukraine. What would 475 00:29:13,280 --> 00:29:15,960 Speaker 1: you like to hear from President Biden on Tuesday? You know, 476 00:29:16,240 --> 00:29:19,400 Speaker 1: I think there are things that are more important than 477 00:29:19,480 --> 00:29:27,040 Speaker 1: the usual laundry list of UH policy proposals. I'm hoping 478 00:29:27,960 --> 00:29:32,720 Speaker 1: to see a real change in tone from the president. 479 00:29:33,640 --> 00:29:41,560 Speaker 1: At a certain point, President Roosevelt shifted from being the 480 00:29:41,680 --> 00:29:46,760 Speaker 1: end of depression president to being the win the war president. 481 00:29:47,920 --> 00:29:53,200 Speaker 1: President Biden needs to shift from being the protect the 482 00:29:53,200 --> 00:29:58,760 Speaker 1: middle class from the pandemic president to being prepare America 483 00:29:59,360 --> 00:30:04,080 Speaker 1: for the strong uggle ahead of President. We don't need 484 00:30:04,280 --> 00:30:09,680 Speaker 1: a middle class foreign policy now. We need a safe 485 00:30:10,000 --> 00:30:16,720 Speaker 1: and secure world UH policy. UH. Now, we don't need 486 00:30:17,560 --> 00:30:22,080 Speaker 1: efforts to provide particular tax cuts or particular benefits to 487 00:30:22,160 --> 00:30:26,920 Speaker 1: particular constituencies. We need a return to the spirit of 488 00:30:27,000 --> 00:30:31,080 Speaker 1: President Kennedy, who, at a moment when the country was challenged, 489 00:30:31,640 --> 00:30:35,000 Speaker 1: asked America not what their country could do for them, 490 00:30:35,560 --> 00:30:38,840 Speaker 1: but what they could do for their country. And so 491 00:30:38,920 --> 00:30:45,479 Speaker 1: I hope that President Biden will recognize the gravity of 492 00:30:45,880 --> 00:30:54,360 Speaker 1: UH the moment, will signal the necessary UH pivot given 493 00:30:54,440 --> 00:31:00,240 Speaker 1: what is happening in Russia, What is happening in Nina, 494 00:31:01,000 --> 00:31:05,360 Speaker 1: What is happening to the two of them together, And 495 00:31:05,640 --> 00:31:12,280 Speaker 1: what is happening to our own democracy? Our own democracy. 496 00:31:12,280 --> 00:31:17,520 Speaker 1: When a former president just fourteen months thirteen months out 497 00:31:17,520 --> 00:31:21,480 Speaker 1: of office is calling the leader of a country who 498 00:31:21,560 --> 00:31:28,600 Speaker 1: launches a world war a genius, that is a grave 499 00:31:28,960 --> 00:31:34,560 Speaker 1: threat and it points to a kind of polarization in 500 00:31:34,600 --> 00:31:42,080 Speaker 1: our society that the president needs to address. That doesn't 501 00:31:42,160 --> 00:31:48,320 Speaker 1: mean particular issues about particular aspects of the way registration 502 00:31:48,520 --> 00:31:54,200 Speaker 1: rules work in particular states. It means the broad character 503 00:31:54,800 --> 00:31:58,760 Speaker 1: of our democracy. Important moment, well said, thank you very 504 00:31:58,840 --> 00:32:01,440 Speaker 1: much to Larry Summer at Harvard are very special contributor 505 00:32:01,560 --> 00:32:04,040 Speaker 1: here on Wall Street Weak and this is Wall Street 506 00:32:04,040 --> 00:32:05,200 Speaker 1: Week on Bloombrook