Transcripts For BLOOMBERG Bloomberg Surveillance 20240712

A simulcast on bloomberg radio, bloomberg television. We welcome all of you in europe and the challenges there, and we will get to you in a moment, and all of you across this nation. It has been week after week at an 800,000 level, even up towards one million a month ago, and the news slow is simply extraordinary. Jon, you have been way out front on the distinction between the virus and pandemic on the continent of europe over to the united kingdom, and the difference with the United States. How urgent is it for mr. Macron, chancellor merkel, and Prime Minister johnson . Jonathan becoming more difficult, and the problem they are having is localizing the effort. Many people in parts of the country that are facing tougher restrictions are asking, what about everyone else . That is the story in the u. K. As london gets upgraded to a new tier and faces tougher restrictions. As we get deeper into the winter, it is not just about the caseload. I think they are much more keen to emphasize and highlight the hospitalizations and health care capacity. That is the reason for the new restrictions through many of these countries in the last 24 hours. Tom we will do some data along the way. Futures39, dow futures 304 dow. I want to bring you to a chart i saw yesterday. In your world, it is stunning how the highyield Interest Rate has come in towards full faith and credit. It is just amazing, the velocity of that lower yield in the highyield space. Lisa investors are going into junkiercredits, the the better. We will probably get an additional round of fiscal support. If the fed has your back and they are buying bonds, and they are going to keep rates this low, you might as well go to credit. We heard this from andrew sheets, spreads are to wide. We need to tighten those up. Tom as you are planning for the real yield tomorrow, you see it in the italian yield, this yield, that yield and the other. My radar is up over the certitude of by the piece lower yield. Jonathan what do you hear this morning almost immediately . People talking about more from the fed, more from the ecb. You will hear a lot more about aboutfor fifth, okta november 5, october 29. The pressure starts to build on policymakers again, and i think fiscal policy makers did a lot. That is a fact. But where is the appetite to do it again . It is not there. There are worried about damaging this economy and the price tag that comes with it. That is the difference between now back to march, not just the health care data, but more about the appetite to offset the pain of telling people to sell at home to stay at home. Tom i want to do this quickly before we get to steve w ieting of citigroup. West texas plunging, down 1. 33, a 3. 7 move. We will try to get that chart for you. In the control room, they are working on west texas and immediate. We will get to it. It is a plunge in oil, something Steven Wieting looks at, with citi private bank, their chief investment strategist. We are thrilled he could join us today. What is this risk off signal today . We had a pretty good roll of it over the last couple of weeks, and suddenly risk off. Is it a tension that can build . Steven well, it has been there in the sense that we have had a high level implied volatility in equity markets, but underlying cash markets havent done very much. In a fairly meaningful setback in september for tech stocks, lets just take the fact lets just face the fact that we have a good deal of policy uncertainty in the United States. Cobit is not under control in the United States or europe. And we are not seeing an immediate policy response to this. But all of these three things together, and it should be an environment where we see wider ranges, and we should see ,eriods of significant risk off getting eventually passed this covid. Tom youve got to look within the negative yields of europe. The dynamics between the german tenyear, the german twoyear, the acceleration tendency of the yields in europe is something. Jonathan negative yield all the way out through the curve. Talk aboutof this fiscal stimulus, the treasury and how much they have done, how much more they will do, the debt load in america, 70 basis points on the 10 year. We broke south of that. Steven this is really the issue , at least in the United States. There was some room for rates to drop. The fastest economic decline in fell allgerman bunds of 15 basis points. The bond market was essentially price for crisis. Safe haven bonds, government bonds were priced for crisis going into this, so there was limited room for a further drop. That is one of the issues here. Jonathan Steve Whiting thereof citi private bank. My producer has told me weve lost your audio, although i can hear you. Maybe my producer has lost your audio. I hope the listeners in the audience can also hear you. As we address that, lets talk about this bond market. ,bunds rally. Arket in italy, yields are a little bit higher. That was the test of this bond market. With btps for the italian bond market start to behave like a sovereign, this morning they are behaving a little bit like a credit. Under am looking at gold 1900, down 12. I want to go back to oil. This is the west texas intermediate, 30 9. 55. We are just revisiting back to where we were a number of days , i am watching the velocity tendency as well this morning. I think we have still got Steve Wieting with us of citi private bank. It is sort of like setting up for a dual debate tonight. There is that chart on oil, showing the quick reversion we have seen. Steve, within a portfolio construction, you and i were weaned, and this is quantitative out of baroque come youve got meijer charts on this, does a this, doescharts on a 60 40 still work . Steven you can have safety, or you can have income. We use to have both from that portion of a portfolio. When equities fall, you can earn income and have a rally in the bond market. In this case, and we just mentioned this in the case with german bunds being as low as they are, youre getting neither of those things. What you are getting is dry powder, in the sense that if you have some portion of a portfolio set aside in assets that wont drop in price when you hit corrections, that at least can be reinvested, but it does change the math of asset allocation. Right now, as you heard earlier, we are willing to take more credit risk. That is despite the fact that the u. S. Corporate bond market twohadtwo macro has had macro bailouts over the past 10 years. Jonathan remember tom remember when we were talking about the new iphone . When was that . Jonathan just a final question from me. This week is the Imf World Bank meetings. I think what we have not seen enough of is what we saw a lot of in the last crisis, which is countries and economies working together. Everyone seems to have gone their own way. Why . Steven i think we lost that along the way. What is very important for the last crisis that we actually had cooperative policy. We had a trade war in between. I think this crisis in many ways, the fact that even at a national level, we are not conducting covid policy, if using about some of the massive differences in the handling of covid, and the case of china, at least we can say they are using restrictions and Health Care Policy to trade it. We are using Monetary Policy to pay for this particular issue until there is a health care solution. The fact that it is not Even National in terms of the specifics of Health Care Policy, so how would we expect to leave to an International Ash to to leap to an International Policy . Jonathan Steve Wieting there of citi private bank. This goes back to asia, and the outperformance we started to see there. The way they have dealt with the virus compared to europe, the United States. I think it leads to the next logical question. How much can that part of the Global Economy decouple from the rest, considering what we are seeing play out in europe . Lisa the answer is not trim and thusly because china is trying to become more of a mystic economy and depend not tremendously because china is trying to become more of a domestic economy. But it is a really good question. I know the imf came out, china definitely has the brightest prospects, but they are going to experience the slowest growth in decades, so still very much hit by the global situation. Pricean lets get to the action this thursday morning. We are down 1. 2 on the s p 500. 1. 1694. Ar at do you remember 1. 20, the line in the sand . The market is doing it for them now. Tom you confirm over at euroyen, with a nice, sharp drop here. That is a big deal. Strong yen, week euro. Coming up on the program, Chris Kotowski, oppenheimer managing director and Senior Analyst. A beautiful morning in new york city. This is bloomberg. Ritika with the first word news, im ritika gupta. The chances of Congress Passing a preelection stimulus are all but gone. Treasury secretary Steven Mnuchin says democrats do not want to give President Trump something to brag about in his campaign. Democrats say the white house never took the need for another stimulus seriously enough to push for a compromise. Senate democrats are all but powerless to keep Amy Coney Barrett off of the Supreme Court , so they used their final day of questioning at the confirmation hearing to grill her about statements made by President Trump. There it declined to answer barrett declined to answer whether the president has the right to delay the election and an absolute right to pardon himself. New restrictions being imposed in london in an attempt to stop the rise of coronavirus cases. The new rules start this weekend. London will soon had an average of 100 coronavirus cases per 100,000 people. In the u. K. , british Prime Minister Boris Johnson told eu leaders he is disappointed by the slow progress of brexit trade talks. Johnson says he will decide after an eu summit this week whether it is worth continuing to work for a deal. Previously, johnson threatened to walk out today if there was no clear agreement and site. Another sign of the impact coronavirus is having on higher education. American colleges are seeing sharp declines in enrollments of new students this semester. A report says the number of firstyear undergraduates enrolled fell 16 . Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im rick appd. Im ritika gupta. This is bloomberg. I think we will get more fiscal stimulus after the election, both in the lameduck session of congress and in the new congress, and that should help reduce credit losses until you get that surge next year. After that, i think you get a steeper yield curve, which will also help financials. So financials are really operating pretty well. Jonathan david kelly of jp morgan Asset Management making it all sound very easy. This thursday morning, good morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. And price action one hour 12 minutes away from the opening bell, equity futures are negative, down 42 points on the s p 500. The pain is in europe. The equity benchmark in frankfurt, germany, we shave 380 points off the dax, down by around 2. 9 . 1. 17. Llar, the aussie as well in the g10, that is where your underperformance is. The aussie dollar down around 1. 3 . Those growth proxies in foreignexchange breaking down. Tom lots of preaching here of certain levels. As i mentioned earlier, gold down 12, under 1900 announce. Uro swissie 1900 an ounce euro swissie really gets your attention this morning. Right now, Chris Kotowski joins us with oppenheimer, managing director, Senior Analyst on the banks. Hes got a very nuanced opinion. What is the distinction between Morgan Stanley and Goldman Sachs . Chris actually, i would put them together, more together than apart in the sense that, compared to the ordinary commercial banks, they have a very small Loan Portfolio. What is interesting about those companies is that they are benefiting from the very active Capital Markets and capital raising, so trading this quarter and for each of the first three quarters, trading was up about 20 year on year. For the banks, i think the banks are oversold and people are overly worried about the credit portfolios,r loan but however you feel about that, basically goldman and Morgan Stanley are going to miss that party for the most part because goldman and Morgan Stanley have a Loan Portfolio that is between one and 1. 5 times tangible book, whereas most banks have a Loan Portfolio that is 6, 7, eight times their tangible capital. On top of that, if you are going to compare Morgan Stanley and goldman, they dont have a lot of credit cards. They dont have any Small Business lending. Goldman sachs and Morgan Stanley both basically lend to either wealthy people or two large stick to snow companies, whether they are public large institutional companies, whether or sponsorblic backed. Lisa the recovery we may see in the Global Economy, are the fargo betters positioned . Goldman sachs and Morgan Stanley are the low risk way of playing financials. If you heard that there was a vaccine that is safe and effective tomorrow, then you would probably do much better in the kind of beat up lending banks because they are down a whole bunch more, and they would be affected more on the upside. Lisa what is the catalyst for the rally in financials that so many people are expecting . Chris ultimately it will be when they get to buy back stock again because the valuations are thely trodden down, but underlying level of profitability is still pretty good. There has been some pressure on Bank Earnings from Interest Rates coming down, and the other thing we saw with the big banks is that people have paid their credit cards down 12 since march. Credit card loans are obviously the highest yielding earning assets that banks have. Thing is, like the Bank Credit Quality has been better than anyone expected. The banks arent in trouble on that front. Tom we had a bunch of Bank Earnings, as jon ferro mentions. We are going to move forward. Are we going to have more eaton vances . Is there a massive desire, too big to fail, nonregionals . Is there a new need for scale, which simply means combinations . Chris it is long overdue, certainly in the Banking Sector. We have an artificially fragmented Banking Sector because until the 1980s, you couldnt bank in more than one state. Compare it to any other country in the world. Our Banking Sector is just way too fragmented. That makes sense. See at think you will giant m a wave near term. I think you will see some, but i think it will still be episodic and sporadic. Jonathan just a final question for me. How much of these names are propped up by the fiscal effort down in washington . Chris actually, i think the much bigger impact is just the white collar layoffs havent been back that havent been that big. If you look back at big bank credit portfolios, over 80 of the borrowers have five haveores over 680 fico scores of over 680. That is roughly average. If you look at the people who have gotten hit by covid, it is mainly lower income people who are not paying customers. People overestimate how much the Bank Customer has moved upscale. On, a stress test and so you basically cant lend to the lower half of the income spectrum, and that is what has gotten hit. So i think people have way ofrplayed the importance those programs. Keptyou, the ppp i think hundreds of thousands of Small Businesses afloat when lots of people in april and may worth inking weve got to shut down may worth thinking may were thinking with got to shut down. Jonathan thats a contradiction at the end of your response, then. Chris if you really look at why have the banks credit experience been so good, they can no longer really lend to lower income people. They have to lend to people of means. Jonathan chris, great to catch up. Chris kotowski there of oppenheimer on some of these big names. Wall street earnings, that is a wrap. Down a little more than 1 . It is a messy session as fiscal talks break down. We have been turning the volume up and down on the same song for the past two months. It is the same track. I have said that repeatedly. We are three weeks, two weeks, 19 days to go. I imagine we will hear more of the same. Tom i strongly agree with you on the backandforth of this, but i would suggest the correlations to disinflation today really get your attention. Jonathan coming up on the s chief stiefel economist. Looking forward to that. This is bloomberg. So youre a Small Business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Jonathan it is thursday morning. About 8 30, which means one thing. Michael mckee will be with us in just a second. Equity futures down 39, 1 . Michael a lot of data today. Lets start with jobless claims. The numbers are not necessarily accurate. Initial claims come in at 898,000, that is a significant increase from last week, 840,000. Well above 825,000 the consensus survey said we would get. It is an increase of 53,000 on a seasonally adjusted basis. Nonseasonally adjusted up to 885,000, an increase of 77,000. Pandemic Unemployment Insurance is down 91,000. This is all new Unemployment Insurance claims. , 25,290,ber of claims down 215,000 as people start to drop off the roles as they have used up their Unemployment Compensation after 26 weeks. Started tofacturing tell us the same story. Claims we see a slowing in the economy. This is an october number. Comes out 10. 5. In september it was 17. We also got the philly fed today. The philly fed goes the other direction, sniffing increase, 32. 3 for the headline under for the headline number. The Employment Index for the philly fed drops to 12. 7, but the Employment Index for Empire Manufacturing rises a little bit. Make of those regional indicators what you will and then lets quickly note import prices rose. 3 , which is bang on consensus estimate, but. 9 last month. We saw import prices slow. We have seen the dollar gyrating around and it is probably related to that. Lisa really the focus is on job. That is the standout. Much worse than expected in terms of the labor market picture. The revisions also coming in weaker than expected, revising downward, giving more people on the unemployment rolls. The one bright spot is continuing claims were below what people were expecting. Can you talk about how reliable this data is, about the potential distortions, and what we can hang onto in these numbers . The big distortion is in california. California shut down its claims process in order to weed out fraud. They have come back online but the Labor Department says there numbers are still out of whack. For the next two or three weeks, they are using the same numbers theyve used for the past four weeks, which is 226 thousand 179 jobless claims, about a quarter of all of the jobless claims and that suggest it is a little bit off. We do not know what the total number of claims is. However, the change in direction is something that has to be worrisome. We are keeping an eye on the you 26 weeks is how long get in most states for unemployment benefits. People are running out of those and starting to move to the extended benefits put into the cares package. We should see continuing claims continue to fall, but extended benefits rise. Tom one final question to you. I look at export prices. I do not look at import price. That is a mckee thing. Until it matters. Right now it really matters. We have a disinflation in our export price index. What does that signal . Michael the export price index is better than it was. On a yearoveryear basis you are 1. 8, that is also rising. It is basically a function of the fact there is not a lot of demand for u. S. Export as the Global Economy recovers. Import and export prices are a small part of the overall inflation picture for the United States. It does give you an idea of where we are seeing currency alignment at this point. Tom very good, Michael Mckee, thank you so much. Our International Economics and policy correspondent. ,oining us is Lindsey Piegza stifel chief economists. On the back is export and import. What is the view 12 months forward on how our exports could advantage us, or is that a pipedream . Lindsey at this point it will be a minimal contribution to the u. S. Economy going forward, as we expect the Global Economy , translatingepid into tepid demand for products, whether they are produced domestically or internationally. I do think the trade will reflect the ongoing saga of weak global gdp, which we expect to carry into 2021, but also into 2022 or beyond. Some numberso get out of you. 12 months forward, what is your call on gdp . Lindsey i think we will struggle to get back to a 2 sustainable rate. 2 is not only where we were going into the pandemic, but this is the bare minimum you should expect from a developed economy. 1 for productivity gains, 1 for population growth, there is your 2 . Going forward over the next 12 to 24 months, that will be our target, and we are going to struggle to reach that level of growth. Jonathan lets talk about the regional divergence. A story this morning. Asia doing better, europe doing worse. Somewhere in the middle, the United States. You see any of those regions reconciling . Lindsey it depends on the virus. This is not a market crisis, it is a health crisis. It depends on how we are able to control the spread of the virus and get the local economy back into some sort of semblance of normal. We have seen a resurgence of cases in europe, which has led to further restrictions and shutdowns, and then by extension this will continue to downplay any kind of recovery from a gdp or employment standpoint. That translates to the u. S. As well. If we see a resurgence in the virus as the weather turns cold in the fall and towards the end of the year into the winter, it is likely we will see further restrictions or further Safety Measures imposed in the u. S. , which will very quickly dampen the modest recovery we have seen in the third quarter. Jonathan how on earth do you come up with a projection for 2021 given everything you just said . Lindsey it is very difficult. I would say in the number of uncertainties and the unprecedented nature of the virus and the environment we are in, it is not necessarily as important as pinpointing the precise level of growth or inflation over the next 12 to 24 months, but understanding the directional momentum of the economy, which we expect will lead to a tepid, bumpy, prolonged path to recovery. Going back to the initial growthn, we do not see recovery anywhere near a robust 3 or 4 gdp anytime soon. It is likely the u. S. Economy struggles to crawl back to a more tepid 2 pace. Lindsay, the issue here is you are talking less than 4 nominal gdp. I would suggest that is politically unacceptable. Do you assume whatever the election, a massive stimulus proposed january 26 . Lindsey wait a minute. We are championing the ongoing recovery going into 2020, and the growth rope had slowed to 2 . I do not know if that is unacceptable. I think the bar expectations for the u. S. Economy has declined so precipitously that if we got back to a sustainable 2 level, that would be championed as a resurgence back to a recovery or strong economy. Claims, weed at the all agree it is unacceptable. What is your model Unemployment Rate for the United States of america . Lindsey for the year of 2020 . I think we could get down to a low of 6 . Going forward i think it will be difficult for the economy to maintain a level below that, as i think the timeline for businesses to come back online, reconnect with employees, reconnect the supply chain is going to take time, even under the best case scenario. I think the Unemployment Rate will be stubbornly around 5. 5 for the foreseeable future. Jonathan great to catch up and get your thoughts. Piegza, stifel chief economist. Headlines from Steven Mnuchin speaking to cnbc. We are going to keep trying to get a stimulus deal. The president determined to work in a larger stimulus deal. The treasury secretary be speaking to nancy pelosi later today. To this to the conversation we just had, many economists making the argument on this program that if we do not get that effort soon and quickly, the damage done to potential growth in the future will be significant. The longer we stay below potential, the lower potential might be the future, the words of Mohamed Elerian to meet a number of months ago and it has stuck with me. Michael i just did a word search. I did not see any mnuchin headlines with the word Mitch Mcconnell in them. I would suggest that is a modest issue. I am looking curated jonathan i am looking. Jonathan i would suggest that is the issue, and i would suggest that is why what you see from the administration and nancy pelosi has been political posturing. Speaker pelosi said the quiet bit out loud when she was talking about the president sending out checks with his name on them. All sides want the economy to get stimulus quickly, and the election complicates it. Leader mcconnell has a knowledge the fact that is why the two parties, the administration, and the House Democrats cannot cut a deal. The other issue, leader mcconnell has alluded to it, the appetite to pass a 2 trillion bill in the senate, at least from senate republicans. Unemployment rate is 5 , 6 , 8 , what is that model number with the numbers Michael Mckee gave us . 9 , or up rapidly to 8 , even double digits. Jonathan the change this time around because of the conditioning through the last cycle, this Federal Reserve will wait a lot longer before they hike and lift up Interest Rates. Unemployment has to go south. Tom there is no question about lower for longer. You see that with what we are seeing in the Tech Companies and the new pe multiples. Morning,ttening this under 56. A big deal. Jonathan where did lisa go . Did she leave us. She abandoned us. Tom it was probably me. I will take the blame for that. Jonathan coming up, imf director of affairs. Lisa stepping away for an important panel. Much more on that and bloomberg tv and radio. Tom you dont know that. Jonathan neither do i, but lisa is more important than us both. This is bloomberg. Ritika with the first word news, i am ritika gupta. Do not child on another do not count on another stimulus package before the election. Sides are far apart on safety, school funding, and a testing plan. Meanwhile Steven Mnuchin says democrats do not want to give President Trump something he can brag about in the last weeks of the campaign. Democratic president ial candidate joe biden rate and a record 383 million last month. That broke the mark the Biden Campaign set the month before. Fundraising calls have helped joe biden and the democrats reverse President Trumps onetime financial advantage. Atsong lee is now ceo carlyle group. He recently sat down for his first interview since taking over at the private equity giant. He discussed a wide range of topics. This will be a big opportunity moving forward. I think therell be an acceleration. It points to the fact that alternatives are more mainstream than you think because of our ourormance and the outflow asset class can generate. Ritika we will have more on that interview with carlisle ceo throughout the day. Hasrance, Emmanuel Macron imposed a purview in paris and other major cities. That step is part of a series of new measures aimed at containing the spread of the coronavirus. The infections advanced started to fill up hospital beds. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Am ritika gupta. This is bloomberg. The worries about debt levels going up are not for now. For now, the biggest worry is we do not do enough to support the economy until we have a durable exit from the health crisis. Jonathan the words of krista lena good gave a, kristalina georgieva, the imf managing director. From london to new york, alongside tom keene at lisa abramowicz, im jonathan ferro. Catching upminutes, with dan suzuki of richard bergstein advisors. Equities breakdown. The epicenter of the concern in your. Tom no question about that. The epicenter of the concern in europe. Tom no question about that. On futures we deteriorate. 43 on spx futures. Dow futures 344. Vix showing tensions. Swissie under 107 to 1. 06 982. It is the time of year where we set our calendars. That always means Francine Lacqua and myself, in washington for the meetings of david malpasss world bank and krista lena corgi a buzz and krista lena corgi eva and krista ina corgi a but steeped the tumult of the economics of his portugal, we are thrilled vitor gaspar could join us for an update. I love your summary. You werent right to the heart of it, which is when private is on its back in a pandemic, it is Public Investment to the rescue. Why is this so difficult . Why is it so hard to commit Public Investment in democracies . Me,r thanks for having tom. We do make a very strong case for Public Investment in the fiscal monitors. We argue in moments of extreme which isty like that caused by covid19, Public Investment allows for a breach over it a bridge over the uncertainty. It provides the private sector with opportunities for profitable investment. Specifically, we estimate multipliers are elevated under the circumstance. 1 of gdp expense in Public Investment in advanced and emerging market economies would lead to an increase in gdp of 2. 7 because it would motivate private investment to increase importantly,ore private and Public Investment would lead to employment 15 and 33etween million jobs according to our investments. Public investment is always difficult because the payoff normally comes later. It is only when Public Investment affects potential output the benefits come to fruition. That takes time, and the political systems around the world are not patient. Tom in the time we have left, i want to talk about the little g. There is a great assumption in our crisis, with the expansion of fiscal deficits, the expansion of trade deficits in selected countries, that we will grow our way out of this. How do you respond to that . Vitor we do have, for the First Time Since the start of covid19 , we have mediumterm projections so we can actually answer your question. Indo see permanent scarring terms of the level of output, but not in terms of the growth rate. Basically there is a permanent loss, but the growth rate regains. That is crucial for the public debt to gdp ratio going forward. 2020. This jump up in public debt goes from 52 of gdp to 92. 7. 2 it is a strong jump up. But wait. In countries like the u. S. For the u. K. , the jump up is even greater come at more than 20 of gdp. , very low Interest Rates for long. The rebound in Economic Activity of thehe contribution Interest Payments and growth ,elps public debt coming down and there is also a correction in our baseline of the primary deficit. The primary deficit comes down at the debt level stabilizes 100 of gdp. Tom if i could for one final question and what we have observed this morning in europe, which is a real reaffirmation of disinflationary tendencies. Vitor gaspar, on the experiment of negative Interest Rates, how has that worked . Banks have, for many years, developed Monetary Policy strategies based on a monetary transmission mechanism that relies on Interest Rates. Low, whention is very Interest Rates are very low, there are constraints on the traditional monetary transmission mechanisms. Does bring additional uncertainty. We have less knowledge about the transmission mechanism under those circumstances, and that is one of the reasons why Central Banks around the world are conducting Monetary Policy strategy reviews. Tom very interesting. Vitor gaspar with a very important point. We have less information. I cannot say enough about the three publication the imf at their october meetings. The blue book gets all the glory. The green book on Financial Stability is important, but the benchmark of this is the Balance Sheet as witnessed by vitor imf ons work at the fiscal affairs. I urge any of you to consider that at the imf. It is an extraordinary day in america. We have never seen this politically. Thehe heat of the campaign, two candidates in two separate chairs on two separate networks with two separate, i guess debates, may be a debate, may be a debate, maybe a monologue. Who knows . Maybe they will touch on policy. We will address that with Jared Bernstein coming up on bloomberg radio, a chief Economic Advisor to Vice President biden, and we will talk to him, just possibly, about what the policy is for. Really looking forward to this with dr. Bernstein. He has been a good friend of the program over the years. Maybe we will glean joe biden policy and maybe even trump policy. On the market, there is a shift. Growthy dayser of and weeks, and we reverse. 343, even the nasdaq 1. 5 down. Vix out to ahe daily worst. The dollar stronger. It is a risk off day. Stay with us through the day on bloomberg television, on bloomberg radio. Good morning. London and new york for our audience worldwide, good morning, good morning. Thursday morning, 30 minutes from the opening bell. The countdown to the open starts right now. We begin with the big issue. Risk cases surging in europe. Second wave. Second wave. We have moved into a more difficult environment. Strong efforts throughout europe to contain the virus. Lockdown measures. We know with the restrictions bring. Very sharp slowdown in growth. We are seeing the beginnings of it again. The more stringent the lockdown gets. If the governments will lockdown again for cats will have to be revised down. Critiquere is a policy it is about