Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along
Speaker 1: with Jonathan Ferrell and Lisa Brawmowitz Jay Lee. We bring
Speaker 1: you insight from the best and economics, finance, investment, and
Speaker 1: international relations. Find Bloomberg Surveillance on Apple Podcast, Uncloud, Bloomberg
Speaker 1: dot Com, and of course on the Bloomberg terminal. Joint
Speaker 1: to us down this bond market, Mike Shoemaker, club head
Speaker 1: of Mac Price Strategy at waust Fargo, might before we
Speaker 1: talk about levels, can we just talk about ranges in today,
Speaker 1: trading ranges on a two year of say twenty basis
Speaker 1: points on any given day without economic data. Mike, what
Speaker 1: do you make of that? It's just incredible, John, the
Speaker 1: day to day of all atilities from mind boggling. Traders
Speaker 1: here are whip lashed, and I think that's true of
Speaker 1: people across the markets. There have been so many cross
Speaker 1: currents it can't sustain in terms of alatility like this,
Speaker 1: but there really has been wild to see and hopefully
Speaker 1: slows down at least a little bit fairly. Since is
Speaker 1: it linear or do you see a convexity where things
Speaker 1: are speeding up like in the tenure real yield. Is
Speaker 1: there a quickening there that you could predict for Q
Speaker 1: four a good point time non linear? I would say
Speaker 1: you think about the tenure real yield in July was
Speaker 1: ballpark positive ten basis points. That rose a hundred and
Speaker 1: fifty basis points and just a bit more than two months.
Speaker 1: So now it seems to us it's up to an
Speaker 1: area that I would call the right zip code. One
Speaker 1: six two percent seems reasonable, certainly in the context of
Speaker 1: prior FED cycles and layering on additional inflation this time
Speaker 1: with respect to the US German reels crossed over to
Speaker 1: positive territory intends to that seems okay. So I suspect
Speaker 1: the speed is about done. It's going to slow down
Speaker 1: a fair bit, but volatility remains super high intense as well.
Speaker 1: Let's talk about the step down, Mike. We talked about
Speaker 1: the pivot and then the pause as John was mentioning,
Speaker 1: and now the step down, which is actually new. I
Speaker 1: hadn't really hurt that until this morning. We already discussed it,
Speaker 1: already discussed it, right, Okay, Now all of a sudden,
Speaker 1: it's back. It's back. It's a thing, right, How does
Speaker 1: the FED communicate that it's going to slow down without
Speaker 1: allowing the markets to move ahead of it. And some
Speaker 1: people argue the reason why there's optimism and markets is
Speaker 1: because they're getting a sniff of the step down. Do
Speaker 1: you buy any of this just a sniff? I think
Speaker 1: that's probably right. It seems sort of obvious the Fed
Speaker 1: eventually would slow down, and yet the markets are all
Speaker 1: excited about this, and you put it in contacts and say,
Speaker 1: all right, so let's say the FED goes seventy five
Speaker 1: next week and follows that up with a fifty at
Speaker 1: the next meeting. Is that really an amazing result for
Speaker 1: risk investors? I would say not, And ultimately the destination
Speaker 1: matters in terms of terminal rate. But I think then
Speaker 1: the thing people really need to focus on the most
Speaker 1: is how long does the FED keep that that funds
Speaker 1: rate really high? So let's say up to five. We
Speaker 1: think it's going to be a long time, six plus months,
Speaker 1: maybe a year. That's gonna hurt equities, we think, and
Speaker 1: that's going to hurt risk. So that seems to be
Speaker 1: a little bit lost in the shuffle. People are too
Speaker 1: gung home on trying to predict the next couple of meetings,
Speaker 1: not thinking enough about the destination. Mike, what you just
Speaker 1: said is pretty pretty interesting. But you could see five
Speaker 1: percent FED funds rates for a year, possibly more, six
Speaker 1: months a year or even more. What does that do
Speaker 1: to the entire credit cycle that's predicated. I'm pushing out maturities, yes,
Speaker 1: but those maturities start coming up at the end of
Speaker 1: next year. Yeah, it means it's notion that you might
Speaker 1: have easy money come back fairly soon just doesn't really work,
Speaker 1: and credits probably take a hit with respect to defaults
Speaker 1: ramping up also. So it's not a positive in terms
Speaker 1: of credit, not a positive genuine in terms of risk.
Speaker 1: But when you think about the incentives facing the Fed,
Speaker 1: especially j Powell, his number one priority is and will
Speaker 1: remain getting inflation back into a box. I means boosting
Speaker 1: the funds requite a bit, we know that, but also
Speaker 1: keeping it up there for a while. I just want
Speaker 1: to pick up on this move in a guilt market
Speaker 1: as well, at the front end guilt two years down
Speaker 1: five basis points, Mike, if you even got a cold
Speaker 1: on the guilt market, if you thrown the town in, yeah,
Speaker 1: guilt market, John, I think we'll take a pass on
Speaker 1: that one for now, and plays out with the whole
Speaker 1: PM sweepstakes, and then we'll something about discretion and val
Speaker 1: are coming together. I think out at my shame, thank
Speaker 1: you oft Fanca Brandon. Laura Raim joins US chiefs Economist Investments. Laura,
Speaker 1: I go to the c o GO and there is
Speaker 1: a raft, a Seattle slew of economic data coming out
Speaker 1: this week, and I look at it and it mostly
Speaker 1: shows a resilient economy looking back. Are you surprised where
Speaker 1: we are right now? We're thirty forty fifty lines of
Speaker 1: the c O GO data. Not all that bad, No,
Speaker 1: because our economy has so much positive momentum, and this
Speaker 1: is what happens when you're just early in an expansion.
Speaker 1: I think that that's maybe the big question. Are we
Speaker 1: early in interpion an expansion? We're pretty early in an expansion,
Speaker 1: and we had so much fiscal stimulus, so much monetary
Speaker 1: stimulus around right. It's we're a big ship. Tom. It
Speaker 1: takes time to turn in. And you've been a student
Speaker 1: of this for decades, going back way before you you know,
Speaker 1: you showed up on Well Street. And my answer is,
Speaker 1: so we get a five percent ten year yield for
Speaker 1: whatever reason is at the end of the world as
Speaker 1: we know it. We used to live that way, right.
Speaker 1: It's not the end of the world as we know it.
Speaker 1: It's just a continuation of what we've seen. I mean,
Speaker 1: the volatility and the treasury market is so extreme. We
Speaker 1: could be there in the next ten days. Um. I
Speaker 1: think at the end of the day, what the what
Speaker 1: we're now looking at, you know, is the FED moves
Speaker 1: later this year, the Fed moves beginning next year. Markets
Speaker 1: are so tripping over themselves to try to look around
Speaker 1: the corner, and it's causing these wild swings and expectations
Speaker 1: and we're just stuck in this higher volatility world that is,
Speaker 1: with the economic uncertainty. It's crushing all these traditional asset classes. Laura,
Speaker 1: you mentioned that it takes a long time to turn
Speaker 1: around this economy, and this is the concern of some people,
Speaker 1: the lag effects of the policies that are being implemented today.
Speaker 1: Do you have a sense of the difference between when
Speaker 1: the interest rate rises will affect the inflation side of
Speaker 1: things and when it will affect the economic momentum side
Speaker 1: of things. You know, this is to me one of
Speaker 1: the critical questions when I get asked, it's what should
Speaker 1: the Fed what do I think the FED should do
Speaker 1: versus what are they actually doing? And I think the
Speaker 1: time has come for them to take a slower pace
Speaker 1: of rate hikes and wait and see what kind of
Speaker 1: shape the economy is in. But the reality is, with
Speaker 1: housing and other interest rate sensitive sectors fueling so much
Speaker 1: growth over the last year and a half, they have
Speaker 1: really heavily impacted that. The question on the inflation side
Speaker 1: is how much of this is really still driven by supply?
Speaker 1: And I'm not talking about supply chain disruptions, those have ebbed.
Speaker 1: What I'm talking about is labor supply. At this point,
Speaker 1: higher services costs, higher services inflation is really driven by
Speaker 1: higher wages. My concern is that the FED is using
Speaker 1: model They love their Phillips curve models, and they're using
Speaker 1: these models built in the nineties when labor dynamics were
Speaker 1: completely different. So what does that mean in terms of
Speaker 1: what NEHRU is, What does that mean in terms of
Speaker 1: what they should be doing or should be looking for
Speaker 1: in terms of employment and what that will mean for
Speaker 1: when wages will start to moderate. It means that they
Speaker 1: may have to raise a lot more to get businesses
Speaker 1: to let go of workers. It means that the risk
Speaker 1: of a policy overshoot is higher. Their estimate of NEHRU
Speaker 1: has always been a moving target, but today it may
Speaker 1: be lower given that people can work remotely, geographies are
Speaker 1: more fluid, and the fact that we're just have this
Speaker 1: more constraint participation rate. Lord. Chapter twenty three of any
Speaker 1: Good econ one oh one book is about the markets.
Speaker 1: Do you suggest that this Central Bank of FED is
Speaker 1: looking at the markets? When I look at bonds, I
Speaker 1: took a US bond e t F. It's down twenty
Speaker 1: two percent from its high two years ago, and that's
Speaker 1: better than a lot of others. To be blunt, I'm
Speaker 1: just fascinated if this FED, you know, the phrases blink,
Speaker 1: not that they'll blink, but they become aware that a
Speaker 1: four oh one case become a two oh one. K
Speaker 1: I think that the FED is highly aware of what
Speaker 1: they've done to financial markets, and in fact, they've mentioned
Speaker 1: that over and over again. This is another key concern,
Speaker 1: which is that recently Vice chair Brainerd commented on corporate margins,
Speaker 1: which actually remain relatively healthy, and if they FED is
Speaker 1: looking to slow the economy down and looking to spread
Speaker 1: some of the pain of that slowing to the labor market.
Speaker 1: I think increasingly they're looking to to spread some of
Speaker 1: that pain to corporate margins. It's not a good supportive
Speaker 1: outlook for equities into the beginning of next year. So
Speaker 1: I think the other question I get asked so often is,
Speaker 1: you know, have the markets seen their bottom? We're all
Speaker 1: talking about the risk of recession, but markets still to
Speaker 1: me don't have it priced in well. And look at
Speaker 1: the priced in part. What do we do after the
Speaker 1: November two meeting? I mean, I want to get onto December,
Speaker 1: and frankly onto the meeting I believe it's February one
Speaker 1: of next year. At some point they have to respond
Speaker 1: to the markets. Yeah, I think they would say they're
Speaker 1: not responding to markets. They would heavily argue that they're
Speaker 1: responding to the structural lags and their policy going to
Speaker 1: the economy. But Tomato, Tomato, I hear you. I think
Speaker 1: the point really is that they're going to have to
Speaker 1: They're gonna have a big challenge messaging that right, because
Speaker 1: every time they talk about holding or talk about backing
Speaker 1: off their aggressive pace, markets start pricing in rape cuts.
Speaker 1: And you know, earlier you were talking about how kind
Speaker 1: of the fedest trained markets over the last fifteen years
Speaker 1: to expect a rally at any time, and I think
Speaker 1: this is what they're having to really beat markets up
Speaker 1: about right now. They're having to couldn't place a permanently
Speaker 1: higher trajectory, or at least, you know, a multi year
Speaker 1: higher trajectory, because inflation is not going to fit neatly
Speaker 1: back into their two percent package. Yeah, may come down
Speaker 1: from here, but it's gonna stay really elevated. This is
Speaker 1: the fine line the feed is having to walk, and
Speaker 1: it's causing them confusion when they're communicating, it's causing it's
Speaker 1: adding to bond market volatility, and all of this is
Speaker 1: just weighing on sentiment. We were speaking of the Bloomberg's
Speaker 1: Damien says how or earlier, and he was talking about
Speaker 1: how all of this is leading to the strong dollar
Speaker 1: that's really torpedoing a lot of emerging economies. Do you
Speaker 1: think that it's important for the FETE to step in
Speaker 1: on the dollar side of things to offset some of
Speaker 1: that pain as they combat inflation. I don't know how
Speaker 1: they can, Lisa. I think that you know, for now,
Speaker 1: the stronger dollar reinforces the monetary policy trajectory that the
Speaker 1: FET is taking. And I think there's this other issue.
Speaker 1: The FED knows that unilateral intervention isn't particularly effective. You know,
Speaker 1: this is a big this If they wanted to weaken
Speaker 1: a dollar at all, it would be a huge change
Speaker 1: from these sort of unspoken stronger dollar policy that we've
Speaker 1: maintained for all this time. At the end of the day,
Speaker 1: I think they're more focused on what they can control,
Speaker 1: and they don't feel like the dollar is easily fits
Speaker 1: easily within that sphere, so to the extent that their
Speaker 1: blunt instrument can control financial conditions. I think they see
Speaker 1: what the damage they've done in markets, and they feel
Speaker 1: like it's part of their move into restrictive territory to
Speaker 1: hit inflation the objective, not the unintended consequence. Laura, thank you,
Speaker 1: Laura of FS Investments. Can I give a shout out
Speaker 1: to our next guest, tomp He came on the program
Speaker 1: back in February one fifteen dollar yen, he said, one
Speaker 1: fifty and I almost found much. And I'll think and
Speaker 1: here we are, say, k here we are, and Christopher
Speaker 1: an smarter than the average bear on that macro strategy
Speaker 1: strategistic strategius is is a bared uh Company. All I
Speaker 1: can say, John is showing me any literature of the
Speaker 1: show's unilateral intervention works. It's not out there, christopheroon what
Speaker 1: is out there is a desire for catharsis a vix
Speaker 1: of forty and the eight other shades of it is Well,
Speaker 1: it's not out there. But what element of the market
Speaker 1: last week gave you a sense of catharsis? Well, what
Speaker 1: I thought was most interesting about last week, You know,
Speaker 1: it was a good week for stocks, but what led
Speaker 1: what's the only sector to do relative high? First the
Speaker 1: SMP was energy. Energy still leads, And this is what's
Speaker 1: really interesting on both down weeks and up weeks. Your
Speaker 1: leadership really hasn't moved much. So I think, you know,
Speaker 1: if you look at where the positioning still is, and
Speaker 1: I would contend there's still a lot of positioning at
Speaker 1: quote the top of the market, the Apples and the
Speaker 1: Teslas and the Microsoft's energy outperforming doesn't help that group.
Speaker 1: So I'm not sure a lot changed from a leadership perspective,
Speaker 1: which is more important to us whether the next two
Speaker 1: points is up or down if the leadership doesn't change,
Speaker 1: And you know, with technical analysis, does quality matter whether
Speaker 1: it's quality small quality, large cap profitable companies showing down
Speaker 1: down the income statement. Does that matter right now? Well,
Speaker 1: I think that was the other message from the market
Speaker 1: last week when you look at really what didn't move
Speaker 1: or didn't rally, what I would still call the garbage
Speaker 1: basically didn't bounce. I mean things like Carvana or Roku
Speaker 1: or names that have basically um were the speculative darlings
Speaker 1: of the cycle which were thrown out. Those didn't move
Speaker 1: last week. So I think the market continues to make
Speaker 1: this very clear distinction between what is quality and what
Speaker 1: is not quality. And I think ultimately, you know what,
Speaker 1: what would be bullish from here? I think the market
Speaker 1: disassociated eating itself from things like Bitcoin or Arc or
Speaker 1: the I p o s that I think would be
Speaker 1: a bolsh development that how to happen in two thousand two,
Speaker 1: if you remember, as we kind of came out of
Speaker 1: dot com, the market how to disassociate itself with a
Speaker 1: lot of the garbage from the briar cycle. I gotta say, Chris,
Speaker 1: right now, the headline is that Roku and Carbon are garbage,
Speaker 1: according to Christopherone of Strategus. I don't know that that's
Speaker 1: necessarily the headline that you necessarily one, or maybe it is,
Speaker 1: but there is this issue that right now there are
Speaker 1: a lot of people who think that there's so much pessimism.
Speaker 1: We hear all the Barrish talk on this program elsewhere
Speaker 1: and are sick of it. And you're seeing that come
Speaker 1: into the commentary. You're seeing that in the options market,
Speaker 1: where you're seeing actually people putting on much less protection
Speaker 1: against the market dropping another ten percent. What do you
Speaker 1: make of that? You know, it's a great question, Lisa,
Speaker 1: and I'm struck by a couple of things. Number One,
Speaker 1: I think back to late two thousand into two thousand nine.
Speaker 1: I think that feeling of capitulation was very different than this.
Speaker 1: I I mean, I can remember not wanting to turn
Speaker 1: the screens on in the morning. I don't think we're
Speaker 1: quite there yet today. The second thing I would just
Speaker 1: notice be careful that or at least distinguished between what
Speaker 1: people say they're doing with their money and what they're
Speaker 1: actually doing with their money. And I still think the
Speaker 1: gap between those two things is quite uh is quite
Speaker 1: wide here. The flows, for example, are still pretty aggressive
Speaker 1: into both equities and bonds. I'm not sure that describes
Speaker 1: that cathartic or capitulative momentum. We do have good seasonal
Speaker 1: support here for the next call at ninety days, I
Speaker 1: want to be mindful of that we essentially oscillated between
Speaker 1: thirty and thirty eight hundred for the better part of
Speaker 1: the last six weeks. I could get you to let's
Speaker 1: call it thousand on SMP, but then we have to
Speaker 1: deal with the very inconvenient fact that this is still
Speaker 1: a downtrend. And I think stocks rallying into down trends
Speaker 1: are ultimately things that you want to fade uh down
Speaker 1: the road. So there's a breaking point at some point
Speaker 1: that a lot of people foresee yourself, Mike Wilson, and
Speaker 1: you did correctly call the en going or weakening to
Speaker 1: one fifty per dollar? How much is that going to
Speaker 1: be a potential catalyst? This question of what John called
Speaker 1: bonfire of central bank for an exchange reserves, how much
Speaker 1: is that going to be really the trigger? Well, the
Speaker 1: layers that we've used this is very simply the market
Speaker 1: is back in charge here, and I think we saw
Speaker 1: that in the UK over the last several weeks. I
Speaker 1: suspect we're gonna learn that here in Japan over the
Speaker 1: next number of months. I mean, the story is what
Speaker 1: thirty billion dollars of intervention? I think that's what the
Speaker 1: FT reports on Friday. So that's a fifty increase from
Speaker 1: the twenty billion dollars of intervention that we saw I
Speaker 1: think on September two. After the September intervention, it took
Speaker 1: fourteen trading days for yen to make a new load.
Speaker 1: So that's kind of our our benchmark here. Let's see
Speaker 1: where we stand in two weeks. Are we talking about
Speaker 1: one two yen again? Are we talking about I think
Speaker 1: that's going to be how we judge whether or not
Speaker 1: this is successful. Because when I see German tenure yields
Speaker 1: at two fifty and US turns at four twenty, and
Speaker 1: I see Japanese turns at twenty six basis point business points,
Speaker 1: so there's a clear outlier here, and I think that's
Speaker 1: an unsustainable path for the b o J to remain on.
Speaker 1: You see the gamp blower on that chart, Ramo, there's
Speaker 1: just smoke coming off the bottom of it. What is
Speaker 1: it about forty billion dollars worth? Now? Article at this
Speaker 1: point men just ridiculous. I want to look at sterling
Speaker 1: as well. One thirteen eighteen. Latest reporting from the team
Speaker 1: in the UK term that Richie soon Act. The former
Speaker 1: chancellor's getting the public endorsements and we've been tracking them
Speaker 1: here at Bloomberg News. We've verified public statements from one
Speaker 1: hundred and seventy nine Tory MP so that's more than
Speaker 1: half of the Tory MP's out time the nine this
Speaker 1: morning our time. What happens at nine a m JOm
Speaker 1: Perhaps we get a prime minister in the annoying the
Speaker 1: Queen chi soon Auld. Maybe we've got to change the
Speaker 1: language that we've got the King as wealth. Sure, big changes, Chris.
Speaker 1: I don't want to linger on it too long. I
Speaker 1: think this market wants to move on and move on quickly.
Speaker 1: You mentioned that maybe we've had one scalpe and list trust.
Speaker 1: What is the next one come from? Chris? Can you
Speaker 1: elaborate that on that a little bit more? Is that
Speaker 1: a change in leadership at the b J that's set
Speaker 1: to take place anyway? What is it? Well? I think
Speaker 1: that's a good place to start. We wrote something to
Speaker 1: the effect in I think February or March that the
Speaker 1: b o J was going to have its b Oe
Speaker 1: type event, and I didn't also think that the Boe
Speaker 1: would have another Bowe nine YouTube type event, But of
Speaker 1: course that's that's kind of what happened here over the
Speaker 1: last several weeks. So I do think ultimately this is
Speaker 1: heading towards some crescendo, and I think Japan is kind
Speaker 1: of ground zero for that now. Also, keeping my time,
Speaker 1: CNH this morning is at seven thirty thirty one, right,
Speaker 1: so the stresses that we've seen in the Chinese currency
Speaker 1: haven't abated here either. So I still have yen at
Speaker 1: one fifty and I have Chinese uh at seven thirty.
Speaker 1: I'm not sure that's the greatest environment for macro risk.
Speaker 1: What are the technicals of the tenure real yield? Now
Speaker 1: we splot it out to one, I'd call that catharsis
Speaker 1: you come back, but we sets Arron above that one
Speaker 1: sixty level. What's that chart looked like? Well, this is
Speaker 1: a little bit of a pet peeve that this idea
Speaker 1: that that that real yields are actually positive. I guess
Speaker 1: theoretically they are positive. You're if you're taking right, you
Speaker 1: take your break evens right. But if we look at
Speaker 1: like the actual policy, right, I mean, what the Fed
Speaker 1: funds rate is three and a quarter and inflations eight.
Speaker 1: So I think for all intensive purposes, for for real people,
Speaker 1: the real legis rate is actually still quite negative. So
Speaker 1: I think there's more work to do here before the
Speaker 1: FED really believes that short rates are offering a positive
Speaker 1: Really year, it was Chrispherun our Fed speaker today. He's
Speaker 1: a Fed whisper, He's a whispers It was heartily Chris,
Speaker 1: thank you, great cold buddy. You know, just Chris to
Speaker 1: run that a fatigue. We're gonna swing back to China
Speaker 1: right now. Peter Twotz with his professor of international relations
Speaker 1: at the London School of Economics. Peter, the advantage we
Speaker 1: have here is your work at LBJ in Texas. What
Speaker 1: is the symbolism that this is the only issue the
Speaker 1: Republican and Democrat parties share in common in Washington? Frame
Speaker 1: what we observe this weekend for a unified Washington as
Speaker 1: they confront a third term. G Morning, Tom Well. I
Speaker 1: would say that for Washington, UH, for Republicans and Democrats,
Speaker 1: where they saw on display um in Beijing over the
Speaker 1: weekend will only reinforce the view that that that China
Speaker 1: is um is a force to be that the US
Speaker 1: are going to have to contend with going forward. I mean,
Speaker 1: it was a very impressive, carefully choreograph display of she's
Speaker 1: power at the twentie Party Congress, but I think it's
Speaker 1: more likely to fuel um, you know, insecurity security competition
Speaker 1: in the region. One reason is that national security replaced
Speaker 1: the economy is the dominant theme in the run up
Speaker 1: to this weekend, and she's report to party members who
Speaker 1: were gathered in Beijing, and it's no accident. I think
Speaker 1: that she held back today's latest report on China's lackluster
Speaker 1: third quarter economic performance, the data until the Party Congress
Speaker 1: wrapped up, and so what they saw on display was
Speaker 1: she consolidating his hold on power. And the belief is
Speaker 1: is that she is that the kind of underlying premise
Speaker 1: is that she is interested in pushing China's ambitions in
Speaker 1: the region and and expanding power, if only to compensate
Speaker 1: for the erosion, um, you know, the slowdown in economic
Speaker 1: growth in China. Peter, what does this mean about Taiwan? Okay, Well,
Speaker 1: she was actually very careful I think on Taiwan. On
Speaker 1: the one hand, he made it, he announced or you know,
Speaker 1: made a reference to the fact that if push came
Speaker 1: to shove, they would use force there. On the other hand,
Speaker 1: there was a kind of olive branch to Taiwan and
Speaker 1: trying to integrate Taiwan into the larger Chinese um economy.
Speaker 1: But I think the big story kind of locally over
Speaker 1: the weekend there was what was happening at exactly the
Speaker 1: moment that she was strengthening his grip on power at home.
Speaker 1: Japan and Australia announced that they were deepening defense cooperation.
Speaker 1: This happened on Saturday to counter j and Pain's growing
Speaker 1: preoccupation with power and influence in the region. And it's
Speaker 1: significant because it actually follows on an announcement a Japanese
Speaker 1: proposal to develop a counter strike capability capable of attacking
Speaker 1: and enemies command and control systems in military basis in
Speaker 1: the region. That is a big departure for Japan. If
Speaker 1: that becomes policy, most people think it will be we
Speaker 1: become policy in December, and so it's just a kind
Speaker 1: of it's pushing the region more and more into a
Speaker 1: kind of insecurity dilemma. Peter, if you're advising some of
Speaker 1: the big US banks or a multinational in the US
Speaker 1: trying to capture some of the business in the world's
Speaker 1: second biggest economy. What would you tell them in terms
Speaker 1: of how big of a sea change this particular meeting,
Speaker 1: this particular apnointment for a third term of jan Ping,
Speaker 1: really how important it was. I think it's significant. I mean,
Speaker 1: I think he really kind of reinforced his commitment to
Speaker 1: the state over markets, and you know, and and and
Speaker 1: I think for businesses it will reinforce the need desire
Speaker 1: to hedge heads their bets going forward, to look for
Speaker 1: other locations and so forth for investment. And I think
Speaker 1: the kind of general reaction of the markets this morning,
Speaker 1: I think that you were reporting on earlier kind of
Speaker 1: points in that direction. So um, you know, you know,
Speaker 1: as I said to people, to my students, you know,
Speaker 1: when it comes to East Asia, it's time to buckle
Speaker 1: up because the stronger she Jinping at home means greater
Speaker 1: insecurity intention in the region. But I just want to
Speaker 1: pick up on something you said, why does he care
Speaker 1: about the data it's about the states over markets, because
Speaker 1: really that data is not just for domestic consumption, it's
Speaker 1: for international consumption. Why does he still care about the
Speaker 1: economic data. I think it's just that you're talking about
Speaker 1: an event that is so carefully choreographed the Party Congress.
Speaker 1: That to have that kind of come out. I think
Speaker 1: it was supposed to be released a week ago, so
Speaker 1: during the Party Congress or at the beginning of the
Speaker 1: Party Congress. Um, you know, might have been unsettling for
Speaker 1: some who have access to that information, even if most
Speaker 1: Chinese would not really have access to it unless they
Speaker 1: were um you know, um uh you know provided it.
Speaker 1: So I think I think it it just it was
Speaker 1: kind of off note for where he wanted to take
Speaker 1: the Party Congress. Pat wonderful to half from you. What
Speaker 1: a time. Thank you sir at the London School of
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