That is where we are at the moment. Another down day for crude. Brent also down. Tom lets get more analysis on the market. When you look at what happened with help things are playing out in asia, is it taking offer a stellar quarter . Probably a bit of both. Concern withys the cases we have seen. In cases like texas. They have a bit of a crisis going on there. The fact that new york, new jersey, and connecticut have now set a quarantine for people who travel from these hot zones and the rest of america. Imposing an economic constraint. They are worried there will be another abruptness to this. That the Economic Growth that america had. In states of new york, when they take this action, that is a worrying time. That would hurt businesses on a much bigger basis. That is what wall street is concerned about. The hit to the economy. There has been talk the u. S. Government is getting ready to do a fourth round of fiscal stimulus. There has not been any details yet. The market would be concerned. They would like to see this happening weekly. They need reinsurance reassurance that the government is not going to do this again. To help get them back on the right footing. House isthe white weighing new tariffs on europe. Is that being priced in . It has caused jitters on both sides of the atlantic. This is certainly something where the market has to take it more seriously. It is not just from the u. S. Side. The eu is considering banning travelers from the United States to europe. Because the u. S. Has been slow to clamp down the virus situation. Markets have gotten used to the u. S. And china. This is something that could add to more volatility. Way to gotill a long in the u. S. Election process. So nextay become whipping horse. Rishaad good stuff. A slower recovery than anticipated a few months ago is pretty to buy the imf. The head of the imf explained why. The firstseeing in half of this year when the lockdowns were more severe, the impact on economies was worse than we anticipated. That was one factor. There has been some conversation that the imf has been more optimistic than other agencies. When we put out our numbers on april, we were ahead of the curve. In terms of signaling this will be the worst recession since the Great Depression. And a truly global crisis. That is one of the alternative scenarios we considered in april. April, we unlike in can have an upside risk. We can have movement on the medical vaccine front. But we could also have a financial tightening from a second wave. At political tension. The risks are more balanced at this point. It why dont you think, and is not just the imf but other institutions as well, have been slow to realize the magnitude of what is happening with the Global Economy . What is it you think has caused that kind of creeping appreciation of the damage that is being done . This is a crisis like no other. Impactto figure out its is a true challenge. Answer questions about how peoples behaviors are going to change. Will they want . . To stay home rather than be out how long will they want to do that . These are very hard to predict. We have seen the lockdowns have been very severe. The Retail Sector has come up. This is what we are looking at. This is a global crisis. Even if domestically you are doing ok, he did not have growth. Thee are working out disconnect between what markets are telling us and what the underlying economy is telling us. I understand this is a consequence of two things. One is the unprecedented policies. By the Central Banks. That is one important factor. The second one is that given the , the marketsf this are focused on the upside. We are concerned about excessive risktaking in the economy at this point. Tom what does the bottom end of your chart look like if we saw a second lockdown in the u. S. Or europe . How wide is the fan at the bottom half . It would generate zero growth in 2021. As opposed to 5. 4 growth which we are projecting. We are getting closer to Great Depression levels. Tom lets get the first word news. Some of the headlines for other stories around the world. The republicans have moved their convention to jacksonville, florida. The High Mountain border clash between china and india heating up again. The Foreign Ministry reasserted chinas claim. The two sides have agreed to deescalate attention. President trump says he will not allow u. S. Police departments to be weekends during the black lives matter campaign. He accuses his opponents of trying to cripple law enforcement. Anate democrats blocked Police Reform bill. They said it fell short of the widespread changes needed in the wake at the killing of george floyd and other victims. It struggles with the coronavirus slowdown. It is deferring deliveries of new plans and grounding about 50 others, including superjumbos. They said they had enough liquidity to withstand Current Conditions until december of 2021. Still ahead, a private equity firm that has close to 50 billion in management. We will find out if the Virus Outbreak has changed the firms Investment Strategies in china. Recent actions from the north korean regime have led diplomats scratching their heads. This is a sign that kim jongun is stuck . This is bloomberg. Rishaad as the two koreas marked the setting the anniversary of the start agree more, kim jongun may be stuck. Afteromes just a week blowing up the Liaison Office after twobuilt and years two years after landmark summits. Lets get some analysis. She was a Senior Analyst on korean issues with the cia. Thank you very much for joining us. What has been happening of late, is it just going back to the old playbook that pyongyang has used , you up the ante, you vowed to conduct missile tests, and then you blow up an office. Return for a of. Anctions or lessening of aid to get back to the status quo. Surely with the north korea regime is looking for is fat. Kim jongun made it very clear during the hanoi summit. He was punishing the south korean government. He is continuing the pressure. I do believe they will escalate. They want to leverage for future negotiations, whether it is with President Trump or a president by then. John bolton has come out with his Controversial Book in which he contends that donald trump didnt want to do a deal at all. Ofjust wanted the optics meeting kim jongun in singapore and then those other meeting. What do you make of those comments . Do they make sense to you . Could that be why these actions of later born out of frustration . I read his book. He had to chapters on north korea. Clear thatvery President Trump was mostly concerned about theater. The theatrics. He was willing to sign on to this. Mostly out of fear. The reason why President Trump walked out was because she fears this was a bigger drama. Stayed up all night because of Michael Cohens testimony. He was very upset by it. He thought if he would not have a big deal with north korea, a small deal was not worth it. It was bigger drama to walk away. This is very disconcerting for the south koreans. And the North Koreans. Key issue right now is to escalate tension. They either need to get concessions or to increase leverage. Rishaad it is quite instructive that you have a chessboard behind you. That is essentially what is going on. Could we see further escalation here . Could we see the whole dynamic change as we had to the november elections . Is a very Cam Strategic thinker. He has mapped the audience out and he is playing Good Cop Bad Cop with his sister, making all the threats. Escalating tensions. A last minute deal with trauma. I do think we should not underestimate him. Very rational in terms of what he once. What his strategies are. The u. S. Is not necessarily prepared for that. President trump is clearly more interested in the theatrics then in the substance of the negotiations. Tom a longrange missile test seems to be one of the options for kim. What do you think the likelihood of that is . What would a Trump Administration response be . There are a number of things the North Koreans can do to escalate tension despised despite a longrange missile test. Show whatever their strategic weapons are. A submarine launch of a ballistic missile. Kim will be very calculating about this. In a nuclearcbm test is a redline for President Trump. There are a number of things the North Koreans can do short of a nuclear test. I do think it is possible he could resort to a nuclear test, lets say in october, right before the november election. Tom we have seen kims sister put into a position of greater prominence in the last few weeks , particularly with this fiery rhetoric for the south. What do you make of that . What does it tell us about the power structure in north korea, especially after we have kim jongun disappear off the stage for some time. You are absolutely right. The sisters status has actually gone out. She is no longer just quietly sitting by her brothers side. Role to ang of her and substantive role escalating tensions with south korea is quite interesting, particularly in the light of lingering concerns about his health. We still do not know why he was absent for such a long time. Participate in this april 15 event commemorating his grandfathers birthday, which is a very significant holiday in north korea. Caused some speculation about his health. Of her role is quite interesting. I do think she is being groomed to be a successor. Now, she isr right playing Good Cop Bad Cop. She has really emerged as his alter ego. She is definitely the most second most important person in north korea. Tom fascinating. Thank you for your analysis. Lets get you back on the show as we head toward the november elections. Hour, thelater this boss of Goldman Sachs says the stock rebound is out of step with reality. More ahead from another big interview. This is bloomberg. Rishaad lets have a look at the latest business flash headlines. The biggest shareholder is back at it. Give fresh momentum to the deal on the eve of a he owns 50 of the airline and he says he will support the move. Asias biggest construction Mining Equipment maker depends virus to bought about. Tesla, on a look at the way down after news of failures of touchscreens and computers. Regulators have received 11 complaints in the last week. Accidentich caused an or injury. It would not affect steering, braking, or acceleration. Markets in hong kong, taiwan, and the mainland here in china lows. Ares check in on how things playing in other markets. The kospi has some pretty big losses. Potentially a second wave moving slowing the move from a lockdown. Coming later in the day. Similar with commodities there in terms of using the dollar. It is under pressure. 20 more coming ahead. This is bloomberg. 10 29 a. M. In shanghai. Im Karina Mitchell with the first word headlines. The International Monetary fund is increasingly pessimistic about the coronavirus, seeing a deeper recession and slower recovery than it projected two months ago. The fund expects global gdp to shrink almost 5 this year. Growth also falling slightly in 2021. It fears a hit to the World Economy will top 12 trillion. Fears are growing of a new wave of Coronavirus Infections in the u. S. With the governor of texas warning a max of a massive outbreak is underway, forcing local leaders to reassess plans to open state economies despite pressure from President Trump. A new model from the university of washington seattle sees u. S. Fatalities surpassing 180,000. Covid19 cases spiked again in tokyo. Workplaces now seen as a focus. Authorities reported 55 new infections, the most in a single day sense mayt since may 5. The pandemic propped it the imf see theted the imf to japanese economy shrinking. The fund sees a contraction of almost 6 . Global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Son at Masayoshi Softbank making these comments, talking about him donating all this years salary he received to softbank charity, saying his salary is zero, to take response ability for the debacle responsibility for the debacle that was wework. To keep myself under control. He is aiming to control the buybacks, all coming from muscle you shes on at Softbank Masayoshi son at softbank. Tom the coronavirus worsened after a dismal 2019 in china when a trade dispute with the u. S. And deleveraging weighed on growth. But private equity giants have benefited from the turmoil, snapping up assets after valuations plunged. Oaktree capital is also building billiondollar stockpiles. Carlisle on the other hand carlyle on the other hand is more wary. Joining us is partner at a u. K. Based firm. Us thisu for joining morning. Run us through how the pandemic impacted your Portfolio Companies to date. Thank you for having me. The covid19 pandemic certainly has been difficult this year. Outbreak, theemic intense focus of the portfolio their strength and ability to weather the rough patch. Observation one, the effect of the pandemic is quite uneven. There is a subset of the from the that benefits digital uplifting, the penetration of Customer Behavior in adopting more online the stayathome policies. There are other Portfolio Companies that have been impacted because of the disruption in transportation and production. I would say the recovery has been quite fast when it comes to. He disruption the presumption of production has been very resumption of production has been very fast. Portfolioy of the comes down to their investments and Business Model. Are they able to capture the trends of increasing online usage coming from the pandemic . On the other hand, they have the resilience to be able to go through a patch where their operations are disrupted. Tom right. What is the timeframe for earnings to start to recover for some of the companies you hold or have invested in . When did they get back to 2019 levels . Jie that picture varies significantly across the different sectors and industries. We had a pretty strong overweight on the tmp and health care sector. For those two sectors, Many Companies net have benefited from the pandemic. Their revenue, in many cases, growing and sometimes accelerating during the first half of 2020. There are, of course, other companies, especially in the travel and entertainment sector, that rely on the outdoor traffic , that will have a much longer recovery period. Very difficult to use a broadbrush to describe. For the vast majority of the sectors, the production has resumed normalcy somewhere around april and may. The consumption recovery will take a bit longer. Sector determined from to sector. Flight will take longer, whereas many of the other Consumer Sectors have already come back to the precovid levels. Do what evaluations what valuations look like . Are you ready to pull the trigger on some deals . Jie that is a good question. Theituations like this, companies who are positioned to cement their existing leadership. Valuation overall has come down and dealmaking has become subject to a higher level of scrutiny. The companies that tend to use this opportunity to consolidate morendustry by acquiring attractive valuations, there are also a fair amount of dislocations. Shareholders sharing their positions, which provide a good entry point for those who have the cash. We see some on the offensive by taking more stakes from the stressed situation. Rishaad there is not that much that many distressed assets out there at the moment. Does that surprise you . Tends to lagthat in the public markets. Think about a period of lag of several months, a quarter. I think you will see more distressed as that is coming out in the force distress as that is coming out in the first quarter. It is hard to be in denial of the reality. More assets will come out. We have already seen shareholders reorient their strategy or, being driven by the need of cash, liquidate positions. Rishaad a very quick final question. If this u. S. China trade war kicks off again, how does that affect what you are doing . In private equity and in our portfolio, the vast majority of the positions are oriented around domestic consumption. Exports represent a very tiny sliver of the underlying portfolio. Limitedct impact is when it comes to the effect of increased tariffs and so forth. Our portfolio is quite well insulated from the direct impact change on the agreement in terms of tariffs. Of scrutinyte a lot on the future listing of Chinese Companies in the u. S. Companiese to see listed in the u. S. As we speak. Garners a area that lot of attention. We will all watch it closely. Rishaad thank you so much for joining us. Jie gong, a partner at pantheon. On the other side of the break, the Goldman Sachs boos called for change boss called for change on the diversity front. So important if you are going to drive diversity. Many people start at the bottom of the organization. We start at the top. You have to hold people accountable if you want a diverse and inclusive workforce. We have been making progress, but we have a long way to go. We need to understand, listen, understand the concerns black community in particular are, and other minority colleagues. You have to think about who you partner with and who you do