On tv and radio. The only reason we are on tour is bramos birthday. Happy birthday. Lisa thank you. Jonathan what else do we do on the birthday tour . Lisa im going to camden this afternoon. Tom hot, brown water with the king . Lisa you are appreciating yourself. It is a proper hot water. Tom 80 with crumpets. Jonathan lets restart. Fantastic guests, lets start with equity future on the s p 500 positive by. 1 . Not talked about enough this morning, we are very close to highs on the tenure this morning. 434 in america. Tom it is underplayed in america. 10 year real yield as the benchmark, against two percent, anything past 2. 03 is something new. This is underplayed right now. That is going to change abruptly. There is a meeting on wednesday. Jonathan there is neither another meeting on thursday. Your favorite line come that phrase from the disney movie, a whole new world. Tom it is a whole new world. Jonathan when wage gains do not get it done. Tom for the american audience, it is stunning to land here. And come here to a strike of Junior Doctors and 75 years. Much like uaw. In 75 years come you have nhs strikes over the pays these make. Residents, these guys make nothing here. Jonathan compared to the United States. Starting at 40 , down 36 at uaws. Lets go 3. 20. Nothing. Uaw does not want to play. Lisa if it is not 22 , if it is not extra sick days, is it just a full thing or else nothing . This does tie together with the angst in the bond market. People coming out and saying, this is going to keep inflation present for a longer period of time. Tom i thought our conversation was tough. Should i dial one 800 mustang and call ford, what are we going to do . I do not since that as we go through the week. Jonathan we have never seen anything like this. Dazed and confused. We talked about the structure ahead of the deadline. We have been talking about he has not followed this playbook. Lisa that was a feature of this entire program. It was to shocked and ought to try and clawback some concessions made in the aftermath of the financial rices. Ahead of Artificial Intelligence and changes technologically. Tom much of this, including tension in the United Kingdom, is get it while we can. If you lock in a disinflationary tendencies, many people suggest you better get it while you can. Do you like my bowtie . Jonathan it is beautiful. Nice. Ok. You want to move on . Tom move on. Jonathan [laughter] lets start with the price action. Equity futures positive by. 1 . Federal reserve wednesday. Thursday, bank of england action. Friday, the boj. Look at this bond market. 4. 34 is close to cycle highs. Crude at new highs for 2023 alongside it. Lisa driven by real yields bumping up a hair way from 2 at a time where people are gaining out, what does this mean for longerterm . 10 00 a. M. , Saudi Energy Minister is going to be speaking at the World Petroleum congress in calgary. Im curious what he says about how much they are going to continue prolonged meant of production cuts at a time where brent crude is bumping up against 95 a barrel. Meanwhile, the u. N. General assembly is holding a session this week. Vice of china is meeting with secretary of state Antony Blinken on the sidelines. Curious about this which came together quietly, especially in light of tensions between both nations in the european leaders in china. Today, kicking off a week of monthly housing data, 10 00 a. M. , u. S. Nhp Housing Market index. Housing affordability is the most negative, the worst it has been in the history of the series going back to 1986 by the National Realty association. I am wondering at what point you start seeing that feeding into some of this price wage spiral . Rents are getting expensive. Oil prices are not affordable. How do people deal with that . Jonathan should we share local knowledge . Rents in london up more than 17 yearoveryear. 17. 1 percent. Compare that to new york, manhattan rent being up more than 7 yearoveryear. 17 yearoveryear. That is phenomenal for the wrong reasons. Lisa you wonder why people are striking and saying, we have got to get paid more. It is staring at them when they see their rent increase, the bill at the grocery store. When they see their petrol bills. See, i am adapting. Jonathan you bringing this back to new york or just while we are here . Jonathan lisa i am not madonna. Jonathan good morning, jeff. It is good to see you. Yields at 5 of the front end pushing cycle highs on a 10 year. Is this the new normal . Lets go back to real yields. You can deflate headline cpi by wage gains or potential wage gains. If you take the 20 real wages nominal wage gains if realized, that real yield is actually a negative still. Central banks have to catch up. There is a risk owing back to your point about the wage price spiral, that is not going back anytime soon. Tom here we are, 2 . Whatever it is, there is a length of this new real yield. Where is the tension point the next year . Geoff where potential gdp growth is, if that headline number, nominal number, 3 to 4 , if it is still 2 , that real yield needs to go to 3 . Tom are we at a risk where the Interest Rate becomes less then the small g as others worry about . Geoff when does this become tom this is a nerd fast on the side of the desk. Geoff wages versus price spiral and oil prices where they are now come you get a price spiral accord new that when labor markets are tight. Are the unions making the gamble, or determination in manufacturing, labor markets are still tight in the u. S. Lisa is this signal or noise . Yes, it is tight. On the margins, you are seeing signs you are getting some sort of labor market softening. His this the last is this the last gas of labor market power or Something Else that has a stickier nature . Geoff this does feel like a last gasp. It is all about relative differentials. I think u. S. Markets will tighten compared to europe. I think labor has more Bargaining Power in shortterm, no Dollar Strength. That puts the fed on a more vigilant footing. Netnet, i think that is in the price right now. Jonathan very cliche of you. Lets talk about wednesday, we get a set of objections. Most people assume the 2023, revised growth figures are going up. Revised inflation figures are going down. What does 2024 look like for you and the team . Geoff it is more about, how long do u. S. Rates stay where they are . That is what the boj will be looking at. Central bank of brazil, central bank of turkey, centralbank of south africa, they are all deciding. When they look at their nominal effects exchange rates, they are looking at how long can the feds projection keep the dollar strong and will have to recalibrate their own forecasts. Jonathan is that dollar problem bigger in europe . Geoff it is. In brazil, much higher real gates. Tom suddenly, oil, 94. Where is the price of brent that is the tip point that accentuates that global slowdown . Geoff lets look at individual markets. China is a slowdown already. Unless you are looking at a real acceleration of china, the 5 or 6 you get into a demand issue. That becomes a problem globally. That can be a tipping point. If it is the u. S. Alone and u. S. Energy dependence, it is more manageable. Lisa the wall street journal had this expose, china might be weaker than you think. They talk about focusing on the Housing Market. Other people have said that from a u. S. Perspective, this is what people want to see but it is not what is happening on the ground. There is a great deal of strength right having been in china recently, what is your view . Geoff i was there three weeks ago. It was basically, several rose before you could sees the soldiers. On the way out of the beijing airport, barely any connecting flights coming out. Going back to the Real Estate Market, the Financial System in china stabilizing the Real Estate Market means stabilizing the Financial System. Shadow banking, for example. That is where i think theyre doing the right thing. How much more downside can you price in . I think it is limited. Tom do you partition china and the domestic Balance Sheet site domestic Balance Sheet challenges . Do you partition or not . Geoff at this point, china is self financed. We look at International Financing for chinas growth, it is limited right now. The transmission is, if things go right if things go all right, can they track down further . Jonathan there is an ev battle taking place. To a greater extent, the transition to evs is at the epicenter of this conversation. Are we heading towards massive tariffs for auto imports in places like europe . Geoff if you asked me two weeks ago, i would have said no. Jonathan what changed . Geoff for the first time in three or four years, european manufacturers looked and realized this is much more pressing than we thought. Jonathan german manufacturers are scared of what is coming out of china. Geoff absolutely. China saw this in advance. With the cooperative approach, you have seen backlash and they have seen the backlash from beijing. Jonathan this is only one industry. Do you think there is broader things that play that influence things like flows which contradicts cause in Foreign Exchange . Geoff that is going to feature heavily in terms of flows in asia and europe. The importance of employment especially in germany and Eastern Europe politically speaking, this is central to europe. Jonathan this was fantastic to kick off the week with you in europe. Grandma, i am with geoff, something did change on this front in the last couple of weeks. Lisa we have reports auto manufacturers in germany were shocked at how much further ahead they are and have more access to lithium. They own that market. At a certain point, if you cannot compete, you can regulate. Jonathan it is not just tech and supply chains, it is cost. That is why these negotiations with detroit three and the uaw get bigger and bigger. When you see 20 start getting declined, how do they compete with chinese evs . Lisa how do we survive this if we are trying to compete with them and the uaw said, figure it out, because we do not want to lose our jobs . Jonathan big story this week. The other story, it is rameaus birthday week. Bramos birthday week. Live in london, good morning. Were not writers, but we help you shape your financial story. Were not an airline, but our Network Connects global businesses across nearly 160 markets. Were not a startup, but our Innovation Labs use new technologies to help keep your information secure. Were not architects, but we help build stronger communities. Were not just any bank. We are citi. Still and this said they offered 21 . What are you expecting in tomorrows negotiation with them . That seems forward movement. We have asked for 40 pay increases. The reason why is because in the last four years alone, the ceo pay went up 40 . 21 is a no go for you . It is definitely a no go. We made that clear to the companies. Jonathan uaw president speaking on cbs. We are living in a world where 21 wage increases do not get done do not get it done. Lisa, how do you respond to this when ceo pay goes up and they turn around and say what does the ceo say . Lisa they say, you are trying to put us out of business. That is why ford came out with a layout layoff plan. They are trying to get the little power they have remaining before there are massive changes. Jonathan tk, ultimately 40 pay increases meaning you pay existential risk. Why are you getting one . Tom it is going to be interesting what Auto Companies say. Pseudoengineering analysis versus an ev, there are stark differences. My answer is, so what . This is a cultural statement, which is simply, we sacrificed in euro bankruptcies. With that sacrifice, we need to get some payback. I think that is where we are headed. Jonathan question of the week, how long of a visit will it take for tk and bramo to pronounce aluminum right . Lisa aluminum sounds better. Jonathan equity futures on the s p unchanged. 4. 34, close to cycle highs. Looking at crude, new highs for 2023. Euro, week 49 consecutive weeks. 1. 06. Tom there was not a bid off sterling through this morning, breaking through 1. 24. Sterling needs a bid. Jonathan coming and diverse coming up to the anniversary of the liz truss budget. Tom i have got my bowtie. Jonathan did you see what mr. Carney said . Tom i saw that. Jonathan yeah. It was argentina on the channel. What did you make of that address . Tom it was carefully worded. I thought i read the entire address and thought it was a very careful statement. They will move forward in the debate. Everton lost arsenal. I had to watch it. Jonathan ok. Because he is an everton fan. I did not know that. Tom right now, we need to survive american politics. Chief u. S. Policy strategist at agf, on Washington Post, they talk about five ideological factions of the republican party. I did not know that. Do you actually by the idea, given labor up rest in america, a possible Government Shutdown and mr. Mccarthy is dealing with five ideological factions . At least. It is quite a spectacle right now. He is on thin ice. I do not think he can get a deal before the october 1 deadline. We have a shut down. I call it a shut down light, it is not going to be the end of the world. We are not going to kill Social Security and medicare benefits. If you want to go to a national park, you are out of luck. I think this shutdown is going to last a while. Tom is there a shut down in detroit . I see them picketing and it is seven people out front. It looks like a lineup of dennys waiting to get in. Is this a real strike of labor like you and i remember, or is this pretend . Greg it is not like what we remember, that everybody went out and you did not selectively target factories. I think there have been some sign of progress. I think lord has been the most conciliatory. Florida has been the most conciliatory. Joe biden knows michigan has 16 electoral votes. I think biden will be influential in the final agreement. Lisa what will that entail . What will it take to get it done, or what that means for the viability of auto manufacturers that have traditionally added to the gp and fostered strength in the u. S. . Greg it will have to be close to 30 in wages, 40 is out of the question. Number they may go back to pensions. They may have less than a 40 hour work week. It will be generous and at to the perception that wages are sticky for the Federal Reserve. I think sticky wages are going to be around for a while. Lisa does this pressure lawmakers to get a budget deal done to avoid the extra hit on that front, especially at a time where there might be agreement on Border Control between republicans and democrats . Greg these people are on a different planet from you and me. They are fighting these parochial fights, knowing they are going to lose. It is clear this compromise over the weekend would never make it through the senate. Im not sure it would make it through the house. We are going to go through this exercise and sadly, i think this drags on into the holiday sales and holiday season, maybe after, before we get a deal. Tom over the weekend, lots of discussion about the president s age. Our listeners and viewers are exhausted by the debate. I want to know the timeline to where i get an lbj announcement like march of 1968. You and i were sitting on the couch watching the bruins lose. How do we get joe biden out to where lbj was in march of 1968 . Greg i do not think he realizes there is a problem. More democrats i talked to, almost all of them, say they would like to see biden step down. Two problems. Number one, he is delusional and is not think there is a problem. Number two, there is no logical successor. That is the problem for the party. Jonathan do the polls scream there is a problem . Greg absolutely. About 70 of democrats say they would prefer a different nominee. I have never seen a gap like that. You could have more pressure. The other thing i should mention is that filing deadlines are fast approaching, by late october, early november. It is to late to file. They talked about some lastminute rescue for the party, is unwarranted. Jonathan before you run, before you go, have you heard about that missing f35 . Greg the missing what . Jonathan f35. Fighter jet. Gone missing. Tom in the carolinas. Jonathan what on earth is going on . How does the military lose and f35 . Greg it is quite a story. I think is going to get bigger. Jonathan greg, thank you. I will share the Washington Post story. It reads, and advanced f35 lightning jet went down somewhere near charleston sunday afternoon. The pilot ejected safely and was in stable condition. The responders are not sure where the plane ended up. The jets transponder which usually helps locate the aircraft was not working for some reason that we have not yet term and. We are sitting here and somewhere, someplace, there is an f35 that the military cannot find . Lisa it raises questions about whether someone interfered with its signals and then maybe to get some rest. What else can you question . Tom i can question the moment i saw the news jon, i am you brought it up the Conspiracy Theory people will come with a vengeance. Obviously, someone screwed them big time. Jonathan at some point sunday, there was an f35 flying through the sky without a pilot. That makes no sense at all. Lisa correct. Jonathan we will see what happens with that story. Lisa it is interesting. Jonathan madame jones is coming up. Before we get there, price action for you. Equities on the s p 500 up i. 1 . Up by. 1 . 4. 34, huge week for central bank this visions. Wednesday, Federal Reserve. Thursday, the bank of england right here in the city of london. Friday, the bank of japan. Live from london this morning, good morning. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Jonathan equities on the s p 500 sligh