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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along

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Speaker 1: with Jonathan Ferrell and Lisa Brawmowitz Jay Lee. We bring

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Speaker 1: you insight from the best and economics, finance, investment, and

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Speaker 1: international relations. Find Bloomberg Surveillance on Apple Podcast, Uncloud, Bloomberg

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Speaker 1: dot Com, and of course on the Bloomberg terminal. Joint

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Speaker 1: to us down this bond market, Mike Shoemaker, club head

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Speaker 1: of Mac Price Strategy at waust Fargo, might before we

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Speaker 1: talk about levels, can we just talk about ranges in today,

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Speaker 1: trading ranges on a two year of say twenty basis

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Speaker 1: points on any given day without economic data. Mike, what

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Speaker 1: do you make of that? It's just incredible, John, the

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Speaker 1: day to day of all atilities from mind boggling. Traders

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Speaker 1: here are whip lashed, and I think that's true of

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Speaker 1: people across the markets. There have been so many cross

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Speaker 1: currents it can't sustain in terms of alatility like this,

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Speaker 1: but there really has been wild to see and hopefully

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Speaker 1: slows down at least a little bit fairly. Since is

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Speaker 1: it linear or do you see a convexity where things

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Speaker 1: are speeding up like in the tenure real yield. Is

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Speaker 1: there a quickening there that you could predict for Q

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Speaker 1: four a good point time non linear? I would say

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Speaker 1: you think about the tenure real yield in July was

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Speaker 1: ballpark positive ten basis points. That rose a hundred and

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Speaker 1: fifty basis points and just a bit more than two months.

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Speaker 1: So now it seems to us it's up to an

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Speaker 1: area that I would call the right zip code. One

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Speaker 1: six two percent seems reasonable, certainly in the context of

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Speaker 1: prior FED cycles and layering on additional inflation this time

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Speaker 1: with respect to the US German reels crossed over to

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Speaker 1: positive territory intends to that seems okay. So I suspect

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Speaker 1: the speed is about done. It's going to slow down

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Speaker 1: a fair bit, but volatility remains super high intense as well.

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Speaker 1: Let's talk about the step down, Mike. We talked about

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Speaker 1: the pivot and then the pause as John was mentioning,

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Speaker 1: and now the step down, which is actually new. I

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Speaker 1: hadn't really hurt that until this morning. We already discussed it,

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Speaker 1: already discussed it, right, Okay, Now all of a sudden,

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Speaker 1: it's back. It's back. It's a thing, right, How does

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Speaker 1: the FED communicate that it's going to slow down without

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Speaker 1: allowing the markets to move ahead of it. And some

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Speaker 1: people argue the reason why there's optimism and markets is

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Speaker 1: because they're getting a sniff of the step down. Do

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Speaker 1: you buy any of this just a sniff? I think

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Speaker 1: that's probably right. It seems sort of obvious the Fed

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Speaker 1: eventually would slow down, and yet the markets are all

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Speaker 1: excited about this, and you put it in contacts and say,

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Speaker 1: all right, so let's say the FED goes seventy five

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Speaker 1: next week and follows that up with a fifty at

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Speaker 1: the next meeting. Is that really an amazing result for

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Speaker 1: risk investors? I would say not, And ultimately the destination

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Speaker 1: matters in terms of terminal rate. But I think then

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Speaker 1: the thing people really need to focus on the most

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Speaker 1: is how long does the FED keep that that funds

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Speaker 1: rate really high? So let's say up to five. We

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Speaker 1: think it's going to be a long time, six plus months,

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Speaker 1: maybe a year. That's gonna hurt equities, we think, and

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Speaker 1: that's going to hurt risk. So that seems to be

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Speaker 1: a little bit lost in the shuffle. People are too

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Speaker 1: gung home on trying to predict the next couple of meetings,

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Speaker 1: not thinking enough about the destination. Mike, what you just

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Speaker 1: said is pretty pretty interesting. But you could see five

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Speaker 1: percent FED funds rates for a year, possibly more, six

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Speaker 1: months a year or even more. What does that do

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Speaker 1: to the entire credit cycle that's predicated. I'm pushing out maturities, yes,

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Speaker 1: but those maturities start coming up at the end of

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Speaker 1: next year. Yeah, it means it's notion that you might

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Speaker 1: have easy money come back fairly soon just doesn't really work,

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Speaker 1: and credits probably take a hit with respect to defaults

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Speaker 1: ramping up also. So it's not a positive in terms

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Speaker 1: of credit, not a positive genuine in terms of risk.

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Speaker 1: But when you think about the incentives facing the Fed,

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Speaker 1: especially j Powell, his number one priority is and will

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Speaker 1: remain getting inflation back into a box. I means boosting

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Speaker 1: the funds requite a bit, we know that, but also

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Speaker 1: keeping it up there for a while. I just want

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Speaker 1: to pick up on this move in a guilt market

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Speaker 1: as well, at the front end guilt two years down

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Speaker 1: five basis points, Mike, if you even got a cold

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Speaker 1: on the guilt market, if you thrown the town in, yeah,

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Speaker 1: guilt market, John, I think we'll take a pass on

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Speaker 1: that one for now, and plays out with the whole

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Speaker 1: PM sweepstakes, and then we'll something about discretion and val

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Speaker 1: are coming together. I think out at my shame, thank

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Speaker 1: you oft Fanca Brandon. Laura Raim joins US chiefs Economist Investments. Laura,

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Speaker 1: I go to the c o GO and there is

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Speaker 1: a raft, a Seattle slew of economic data coming out

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Speaker 1: this week, and I look at it and it mostly

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Speaker 1: shows a resilient economy looking back. Are you surprised where

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Speaker 1: we are right now? We're thirty forty fifty lines of

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Speaker 1: the c O GO data. Not all that bad, No,

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Speaker 1: because our economy has so much positive momentum, and this

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Speaker 1: is what happens when you're just early in an expansion.

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Speaker 1: I think that that's maybe the big question. Are we

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Speaker 1: early in interpion an expansion? We're pretty early in an expansion,

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Speaker 1: and we had so much fiscal stimulus, so much monetary

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Speaker 1: stimulus around right. It's we're a big ship. Tom. It

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Speaker 1: takes time to turn in. And you've been a student

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Speaker 1: of this for decades, going back way before you you know,

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Speaker 1: you showed up on Well Street. And my answer is,

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Speaker 1: so we get a five percent ten year yield for

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Speaker 1: whatever reason is at the end of the world as

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Speaker 1: we know it. We used to live that way, right.

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Speaker 1: It's not the end of the world as we know it.

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Speaker 1: It's just a continuation of what we've seen. I mean,

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Speaker 1: the volatility and the treasury market is so extreme. We

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Speaker 1: could be there in the next ten days. Um. I

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Speaker 1: think at the end of the day, what the what

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Speaker 1: we're now looking at, you know, is the FED moves

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Speaker 1: later this year, the Fed moves beginning next year. Markets

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Speaker 1: are so tripping over themselves to try to look around

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Speaker 1: the corner, and it's causing these wild swings and expectations

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Speaker 1: and we're just stuck in this higher volatility world that is,

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Speaker 1: with the economic uncertainty. It's crushing all these traditional asset classes. Laura,

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Speaker 1: you mentioned that it takes a long time to turn

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Speaker 1: around this economy, and this is the concern of some people,

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Speaker 1: the lag effects of the policies that are being implemented today.

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Speaker 1: Do you have a sense of the difference between when

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Speaker 1: the interest rate rises will affect the inflation side of

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Speaker 1: things and when it will affect the economic momentum side

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Speaker 1: of things. You know, this is to me one of

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Speaker 1: the critical questions when I get asked, it's what should

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Speaker 1: the Fed what do I think the FED should do

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Speaker 1: versus what are they actually doing? And I think the

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Speaker 1: time has come for them to take a slower pace

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Speaker 1: of rate hikes and wait and see what kind of

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Speaker 1: shape the economy is in. But the reality is, with

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Speaker 1: housing and other interest rate sensitive sectors fueling so much

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Speaker 1: growth over the last year and a half, they have

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Speaker 1: really heavily impacted that. The question on the inflation side

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Speaker 1: is how much of this is really still driven by supply?

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Speaker 1: And I'm not talking about supply chain disruptions, those have ebbed.

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Speaker 1: What I'm talking about is labor supply. At this point,

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Speaker 1: higher services costs, higher services inflation is really driven by

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Speaker 1: higher wages. My concern is that the FED is using

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Speaker 1: model They love their Phillips curve models, and they're using

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Speaker 1: these models built in the nineties when labor dynamics were

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Speaker 1: completely different. So what does that mean in terms of

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Speaker 1: what NEHRU is, What does that mean in terms of

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Speaker 1: what they should be doing or should be looking for

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Speaker 1: in terms of employment and what that will mean for

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Speaker 1: when wages will start to moderate. It means that they

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Speaker 1: may have to raise a lot more to get businesses

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Speaker 1: to let go of workers. It means that the risk

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Speaker 1: of a policy overshoot is higher. Their estimate of NEHRU

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Speaker 1: has always been a moving target, but today it may

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Speaker 1: be lower given that people can work remotely, geographies are

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Speaker 1: more fluid, and the fact that we're just have this

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Speaker 1: more constraint participation rate. Lord. Chapter twenty three of any

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Speaker 1: Good econ one oh one book is about the markets.

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Speaker 1: Do you suggest that this Central Bank of FED is

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Speaker 1: looking at the markets? When I look at bonds, I

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Speaker 1: took a US bond e t F. It's down twenty

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Speaker 1: two percent from its high two years ago, and that's

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Speaker 1: better than a lot of others. To be blunt, I'm

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Speaker 1: just fascinated if this FED, you know, the phrases blink,

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Speaker 1: not that they'll blink, but they become aware that a

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Speaker 1: four oh one case become a two oh one. K

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Speaker 1: I think that the FED is highly aware of what

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Speaker 1: they've done to financial markets, and in fact, they've mentioned

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Speaker 1: that over and over again. This is another key concern,

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Speaker 1: which is that recently Vice chair Brainerd commented on corporate margins,

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Speaker 1: which actually remain relatively healthy, and if they FED is

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Speaker 1: looking to slow the economy down and looking to spread

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Speaker 1: some of the pain of that slowing to the labor market.

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Speaker 1: I think increasingly they're looking to to spread some of

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Speaker 1: that pain to corporate margins. It's not a good supportive

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Speaker 1: outlook for equities into the beginning of next year. So

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Speaker 1: I think the other question I get asked so often is,

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Speaker 1: you know, have the markets seen their bottom? We're all

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Speaker 1: talking about the risk of recession, but markets still to

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Speaker 1: me don't have it priced in well. And look at

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Speaker 1: the priced in part. What do we do after the

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Speaker 1: November two meeting? I mean, I want to get onto December,

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Speaker 1: and frankly onto the meeting I believe it's February one

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Speaker 1: of next year. At some point they have to respond

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Speaker 1: to the markets. Yeah, I think they would say they're

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Speaker 1: not responding to markets. They would heavily argue that they're

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Speaker 1: responding to the structural lags and their policy going to

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Speaker 1: the economy. But Tomato, Tomato, I hear you. I think

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Speaker 1: the point really is that they're going to have to

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Speaker 1: They're gonna have a big challenge messaging that right, because

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Speaker 1: every time they talk about holding or talk about backing

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Speaker 1: off their aggressive pace, markets start pricing in rape cuts.

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Speaker 1: And you know, earlier you were talking about how kind

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Speaker 1: of the fedest trained markets over the last fifteen years

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Speaker 1: to expect a rally at any time, and I think

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Speaker 1: this is what they're having to really beat markets up

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Speaker 1: about right now. They're having to couldn't place a permanently

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Speaker 1: higher trajectory, or at least, you know, a multi year

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Speaker 1: higher trajectory, because inflation is not going to fit neatly

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Speaker 1: back into their two percent package. Yeah, may come down

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Speaker 1: from here, but it's gonna stay really elevated. This is

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Speaker 1: the fine line the feed is having to walk, and

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Speaker 1: it's causing them confusion when they're communicating, it's causing it's

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Speaker 1: adding to bond market volatility, and all of this is

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Speaker 1: just weighing on sentiment. We were speaking of the Bloomberg's

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Speaker 1: Damien says how or earlier, and he was talking about

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Speaker 1: how all of this is leading to the strong dollar

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Speaker 1: that's really torpedoing a lot of emerging economies. Do you

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Speaker 1: think that it's important for the FETE to step in

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Speaker 1: on the dollar side of things to offset some of

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Speaker 1: that pain as they combat inflation. I don't know how

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Speaker 1: they can, Lisa. I think that you know, for now,

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Speaker 1: the stronger dollar reinforces the monetary policy trajectory that the

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Speaker 1: FET is taking. And I think there's this other issue.

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Speaker 1: The FED knows that unilateral intervention isn't particularly effective. You know,

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Speaker 1: this is a big this If they wanted to weaken

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Speaker 1: a dollar at all, it would be a huge change

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Speaker 1: from these sort of unspoken stronger dollar policy that we've

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Speaker 1: maintained for all this time. At the end of the day,

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Speaker 1: I think they're more focused on what they can control,

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Speaker 1: and they don't feel like the dollar is easily fits

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Speaker 1: easily within that sphere, so to the extent that their

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Speaker 1: blunt instrument can control financial conditions. I think they see

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Speaker 1: what the damage they've done in markets, and they feel

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Speaker 1: like it's part of their move into restrictive territory to

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Speaker 1: hit inflation the objective, not the unintended consequence. Laura, thank you,

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Speaker 1: Laura of FS Investments. Can I give a shout out

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Speaker 1: to our next guest, tomp He came on the program

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Speaker 1: back in February one fifteen dollar yen, he said, one

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Speaker 1: fifty and I almost found much. And I'll think and

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Speaker 1: here we are, say, k here we are, and Christopher

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Speaker 1: an smarter than the average bear on that macro strategy

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Speaker 1: strategistic strategius is is a bared uh Company. All I

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Speaker 1: can say, John is showing me any literature of the

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Speaker 1: show's unilateral intervention works. It's not out there, christopheroon what

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Speaker 1: is out there is a desire for catharsis a vix

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Speaker 1: of forty and the eight other shades of it is Well,

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Speaker 1: it's not out there. But what element of the market

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Speaker 1: last week gave you a sense of catharsis? Well, what

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Speaker 1: I thought was most interesting about last week, You know,

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Speaker 1: it was a good week for stocks, but what led

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Speaker 1: what's the only sector to do relative high? First the

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Speaker 1: SMP was energy. Energy still leads, And this is what's

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Speaker 1: really interesting on both down weeks and up weeks. Your

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Speaker 1: leadership really hasn't moved much. So I think, you know,

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Speaker 1: if you look at where the positioning still is, and

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Speaker 1: I would contend there's still a lot of positioning at

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Speaker 1: quote the top of the market, the Apples and the

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Speaker 1: Teslas and the Microsoft's energy outperforming doesn't help that group.

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Speaker 1: So I'm not sure a lot changed from a leadership perspective,

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Speaker 1: which is more important to us whether the next two

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Speaker 1: points is up or down if the leadership doesn't change,

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Speaker 1: And you know, with technical analysis, does quality matter whether

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Speaker 1: it's quality small quality, large cap profitable companies showing down

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Speaker 1: down the income statement. Does that matter right now? Well,

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Speaker 1: I think that was the other message from the market

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Speaker 1: last week when you look at really what didn't move

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Speaker 1: or didn't rally, what I would still call the garbage

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Speaker 1: basically didn't bounce. I mean things like Carvana or Roku

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Speaker 1: or names that have basically um were the speculative darlings

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Speaker 1: of the cycle which were thrown out. Those didn't move

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Speaker 1: last week. So I think the market continues to make

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Speaker 1: this very clear distinction between what is quality and what

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Speaker 1: is not quality. And I think ultimately, you know what,

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Speaker 1: what would be bullish from here? I think the market

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Speaker 1: disassociated eating itself from things like Bitcoin or Arc or

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Speaker 1: the I p o s that I think would be

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Speaker 1: a bolsh development that how to happen in two thousand two,

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Speaker 1: if you remember, as we kind of came out of

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Speaker 1: dot com, the market how to disassociate itself with a

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Speaker 1: lot of the garbage from the briar cycle. I gotta say, Chris,

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Speaker 1: right now, the headline is that Roku and Carbon are garbage,

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Speaker 1: according to Christopherone of Strategus. I don't know that that's

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Speaker 1: necessarily the headline that you necessarily one, or maybe it is,

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Speaker 1: but there is this issue that right now there are

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Speaker 1: a lot of people who think that there's so much pessimism.

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Speaker 1: We hear all the Barrish talk on this program elsewhere

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Speaker 1: and are sick of it. And you're seeing that come

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Speaker 1: into the commentary. You're seeing that in the options market,

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Speaker 1: where you're seeing actually people putting on much less protection

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Speaker 1: against the market dropping another ten percent. What do you

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Speaker 1: make of that? You know, it's a great question, Lisa,

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Speaker 1: and I'm struck by a couple of things. Number One,

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Speaker 1: I think back to late two thousand into two thousand nine.

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Speaker 1: I think that feeling of capitulation was very different than this.

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Speaker 1: I I mean, I can remember not wanting to turn

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Speaker 1: the screens on in the morning. I don't think we're

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Speaker 1: quite there yet today. The second thing I would just

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Speaker 1: notice be careful that or at least distinguished between what

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Speaker 1: people say they're doing with their money and what they're

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Speaker 1: actually doing with their money. And I still think the

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Speaker 1: gap between those two things is quite uh is quite

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Speaker 1: wide here. The flows, for example, are still pretty aggressive

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Speaker 1: into both equities and bonds. I'm not sure that describes

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Speaker 1: that cathartic or capitulative momentum. We do have good seasonal

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Speaker 1: support here for the next call at ninety days, I

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Speaker 1: want to be mindful of that we essentially oscillated between

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Speaker 1: thirty and thirty eight hundred for the better part of

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Speaker 1: the last six weeks. I could get you to let's

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Speaker 1: call it thousand on SMP, but then we have to

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Speaker 1: deal with the very inconvenient fact that this is still

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Speaker 1: a downtrend. And I think stocks rallying into down trends

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Speaker 1: are ultimately things that you want to fade uh down

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Speaker 1: the road. So there's a breaking point at some point

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Speaker 1: that a lot of people foresee yourself, Mike Wilson, and

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Speaker 1: you did correctly call the en going or weakening to

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Speaker 1: one fifty per dollar? How much is that going to

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Speaker 1: be a potential catalyst? This question of what John called

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Speaker 1: bonfire of central bank for an exchange reserves, how much

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Speaker 1: is that going to be really the trigger? Well, the

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Speaker 1: layers that we've used this is very simply the market

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Speaker 1: is back in charge here, and I think we saw

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Speaker 1: that in the UK over the last several weeks. I

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Speaker 1: suspect we're gonna learn that here in Japan over the

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Speaker 1: next number of months. I mean, the story is what

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Speaker 1: thirty billion dollars of intervention? I think that's what the

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Speaker 1: FT reports on Friday. So that's a fifty increase from

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Speaker 1: the twenty billion dollars of intervention that we saw I

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Speaker 1: think on September two. After the September intervention, it took

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Speaker 1: fourteen trading days for yen to make a new load.

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Speaker 1: So that's kind of our our benchmark here. Let's see

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Speaker 1: where we stand in two weeks. Are we talking about

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Speaker 1: one two yen again? Are we talking about I think

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Speaker 1: that's going to be how we judge whether or not

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Speaker 1: this is successful. Because when I see German tenure yields

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Speaker 1: at two fifty and US turns at four twenty, and

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Speaker 1: I see Japanese turns at twenty six basis point business points,

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Speaker 1: so there's a clear outlier here, and I think that's

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Speaker 1: an unsustainable path for the b o J to remain on.

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Speaker 1: You see the gamp blower on that chart, Ramo, there's

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Speaker 1: just smoke coming off the bottom of it. What is

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Speaker 1: it about forty billion dollars worth? Now? Article at this

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Speaker 1: point men just ridiculous. I want to look at sterling

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Speaker 1: as well. One thirteen eighteen. Latest reporting from the team

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Speaker 1: in the UK term that Richie soon Act. The former

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Speaker 1: chancellor's getting the public endorsements and we've been tracking them

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Speaker 1: here at Bloomberg News. We've verified public statements from one

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Speaker 1: hundred and seventy nine Tory MP so that's more than

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Speaker 1: half of the Tory MP's out time the nine this

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Speaker 1: morning our time. What happens at nine a m JOm

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Speaker 1: Perhaps we get a prime minister in the annoying the

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Speaker 1: Queen chi soon Auld. Maybe we've got to change the

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Speaker 1: language that we've got the King as wealth. Sure, big changes, Chris.

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Speaker 1: I don't want to linger on it too long. I

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Speaker 1: think this market wants to move on and move on quickly.

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Speaker 1: You mentioned that maybe we've had one scalpe and list trust.

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Speaker 1: What is the next one come from? Chris? Can you

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Speaker 1: elaborate that on that a little bit more? Is that

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Speaker 1: a change in leadership at the b J that's set

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Speaker 1: to take place anyway? What is it? Well? I think

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Speaker 1: that's a good place to start. We wrote something to

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Speaker 1: the effect in I think February or March that the

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Speaker 1: b o J was going to have its b Oe

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Speaker 1: type event, and I didn't also think that the Boe

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Speaker 1: would have another Bowe nine YouTube type event, But of

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Speaker 1: course that's that's kind of what happened here over the

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Speaker 1: last several weeks. So I do think ultimately this is

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Speaker 1: heading towards some crescendo, and I think Japan is kind

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Speaker 1: of ground zero for that now. Also, keeping my time,

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Speaker 1: CNH this morning is at seven thirty thirty one, right,

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Speaker 1: so the stresses that we've seen in the Chinese currency

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Speaker 1: haven't abated here either. So I still have yen at

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Speaker 1: one fifty and I have Chinese uh at seven thirty.

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Speaker 1: I'm not sure that's the greatest environment for macro risk.

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Speaker 1: What are the technicals of the tenure real yield? Now

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Speaker 1: we splot it out to one, I'd call that catharsis

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Speaker 1: you come back, but we sets Arron above that one

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Speaker 1: sixty level. What's that chart looked like? Well, this is

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Speaker 1: a little bit of a pet peeve that this idea

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Speaker 1: that that that real yields are actually positive. I guess

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Speaker 1: theoretically they are positive. You're if you're taking right, you

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Speaker 1: take your break evens right. But if we look at

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Speaker 1: like the actual policy, right, I mean, what the Fed

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Speaker 1: funds rate is three and a quarter and inflations eight.

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Speaker 1: So I think for all intensive purposes, for for real people,

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Speaker 1: the real legis rate is actually still quite negative. So

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Speaker 1: I think there's more work to do here before the

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Speaker 1: FED really believes that short rates are offering a positive

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Speaker 1: Really year, it was Chrispherun our Fed speaker today. He's

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Speaker 1: a Fed whisper, He's a whispers It was heartily Chris,

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Speaker 1: thank you, great cold buddy. You know, just Chris to

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Speaker 1: run that a fatigue. We're gonna swing back to China

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Speaker 1: right now. Peter Twotz with his professor of international relations

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Speaker 1: at the London School of Economics. Peter, the advantage we

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Speaker 1: have here is your work at LBJ in Texas. What

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Speaker 1: is the symbolism that this is the only issue the

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Speaker 1: Republican and Democrat parties share in common in Washington? Frame

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Speaker 1: what we observe this weekend for a unified Washington as

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Speaker 1: they confront a third term. G Morning, Tom Well. I

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Speaker 1: would say that for Washington, UH, for Republicans and Democrats,

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Speaker 1: where they saw on display um in Beijing over the

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Speaker 1: weekend will only reinforce the view that that that China

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Speaker 1: is um is a force to be that the US

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Speaker 1: are going to have to contend with going forward. I mean,

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Speaker 1: it was a very impressive, carefully choreograph display of she's

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Speaker 1: power at the twentie Party Congress, but I think it's

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Speaker 1: more likely to fuel um, you know, insecurity security competition

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Speaker 1: in the region. One reason is that national security replaced

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Speaker 1: the economy is the dominant theme in the run up

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Speaker 1: to this weekend, and she's report to party members who

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Speaker 1: were gathered in Beijing, and it's no accident. I think

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Speaker 1: that she held back today's latest report on China's lackluster

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Speaker 1: third quarter economic performance, the data until the Party Congress

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Speaker 1: wrapped up, and so what they saw on display was

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Speaker 1: she consolidating his hold on power. And the belief is

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Speaker 1: is that she is that the kind of underlying premise

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Speaker 1: is that she is interested in pushing China's ambitions in

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Speaker 1: the region and and expanding power, if only to compensate

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Speaker 1: for the erosion, um, you know, the slowdown in economic

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Speaker 1: growth in China. Peter, what does this mean about Taiwan? Okay, Well,

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Speaker 1: she was actually very careful I think on Taiwan. On

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Speaker 1: the one hand, he made it, he announced or you know,

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Speaker 1: made a reference to the fact that if push came

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Speaker 1: to shove, they would use force there. On the other hand,

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Speaker 1: there was a kind of olive branch to Taiwan and

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Speaker 1: trying to integrate Taiwan into the larger Chinese um economy.

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Speaker 1: But I think the big story kind of locally over

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Speaker 1: the weekend there was what was happening at exactly the

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Speaker 1: moment that she was strengthening his grip on power at home.

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Speaker 1: Japan and Australia announced that they were deepening defense cooperation.

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Speaker 1: This happened on Saturday to counter j and Pain's growing

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Speaker 1: preoccupation with power and influence in the region. And it's

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Speaker 1: significant because it actually follows on an announcement a Japanese

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Speaker 1: proposal to develop a counter strike capability capable of attacking

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Speaker 1: and enemies command and control systems in military basis in

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Speaker 1: the region. That is a big departure for Japan. If

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Speaker 1: that becomes policy, most people think it will be we

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Speaker 1: become policy in December, and so it's just a kind

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Speaker 1: of it's pushing the region more and more into a

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Speaker 1: kind of insecurity dilemma. Peter, if you're advising some of

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Speaker 1: the big US banks or a multinational in the US

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Speaker 1: trying to capture some of the business in the world's

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Speaker 1: second biggest economy. What would you tell them in terms

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Speaker 1: of how big of a sea change this particular meeting,

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Speaker 1: this particular apnointment for a third term of jan Ping,

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Speaker 1: really how important it was. I think it's significant. I mean,

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Speaker 1: I think he really kind of reinforced his commitment to

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Speaker 1: the state over markets, and you know, and and and

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Speaker 1: I think for businesses it will reinforce the need desire

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Speaker 1: to hedge heads their bets going forward, to look for

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Speaker 1: other locations and so forth for investment. And I think

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Speaker 1: the kind of general reaction of the markets this morning,

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Speaker 1: I think that you were reporting on earlier kind of

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00:24:06,880 --> 00:24:10,919
Speaker 1: points in that direction. So um, you know, you know,

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Speaker 1: as I said to people, to my students, you know,

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Speaker 1: when it comes to East Asia, it's time to buckle

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Speaker 1: up because the stronger she Jinping at home means greater

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00:24:20,520 --> 00:24:22,840
Speaker 1: insecurity intention in the region. But I just want to

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Speaker 1: pick up on something you said, why does he care

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Speaker 1: about the data it's about the states over markets, because

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00:24:28,400 --> 00:24:31,080
Speaker 1: really that data is not just for domestic consumption, it's

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Speaker 1: for international consumption. Why does he still care about the

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Speaker 1: economic data. I think it's just that you're talking about

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Speaker 1: an event that is so carefully choreographed the Party Congress.

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00:24:43,960 --> 00:24:46,040
Speaker 1: That to have that kind of come out. I think

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00:24:46,040 --> 00:24:48,800
Speaker 1: it was supposed to be released a week ago, so

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00:24:49,000 --> 00:24:51,320
Speaker 1: during the Party Congress or at the beginning of the

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00:24:51,359 --> 00:24:55,680
Speaker 1: Party Congress. Um, you know, might have been unsettling for

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Speaker 1: some who have access to that information, even if most

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Speaker 1: Chinese would not really have access to it unless they

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00:25:02,440 --> 00:25:06,520
Speaker 1: were um you know, um uh you know provided it.

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Speaker 1: So I think I think it it just it was

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Speaker 1: kind of off note for where he wanted to take

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Speaker 1: the Party Congress. Pat wonderful to half from you. What

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Speaker 1: a time. Thank you sir at the London School of

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Speaker 1: the Economics. This is the Bloomberg Surveillance Podcast. Thanks for listening.

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Speaker 1: Join us live weekdays from seven to ten am Eastern

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00:25:28,720 --> 00:25:32,760
Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from

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00:25:32,840 --> 00:25:38,080
Speaker 1: six to nine am for insight from the best in economics, finance, investment,

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00:25:38,240 --> 00:25:43,240
Speaker 1: and international relations. And subscribe to the Surveillance podcast on

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Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on

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Speaker 1: the terminal. I'm Tom Keene and this is Bloomberg