Daybreak Weekend: Tesla Earnings, Paris Olympics, U.S Election

Bloomberg Audio Studios, Podcasts, radio News. 0:00:09.800 --> 0:00:12.440 This is Bloomberg day Break Weekend, our global look at 0:00:12.440 --> 0:00:14.600 the top stories in the coming week from our day 0:00:14.600 --> 0:00:17.120 Break anchors all around the world. And ahead on the program, 0:00:17.120 --> 0:00:20.120 we looked at the EV market and second quarter earnings 0:00:20.120 --> 0:00:22.520 from Tesla. I'm Tom Busby in New York. 0:00:22.760 --> 0:00:25.280 I'm Karlin Hepger here in London, where we're looking ahead 0:00:25.320 --> 0:00:28.840 to the Paris Olympics, that costs from the spectacle. 0:00:29.120 --> 0:00:31.479 I'm Brian Curtis in Hong Kong. We look ahead to 0:00:31.520 --> 0:00:35.040 the way Asian countries might be gaming, our differences in 0:00:35.120 --> 0:00:39.000 policy between President Biden and former President Donald Trump. 0:00:42.479 --> 0:00:46.440 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:46.479 --> 0:00:48.760 E Loove on three own New York, Bloomberg in ninety 0:00:48.840 --> 0:00:52.400 nine to one, Washington, DC, Bloomberg one O six one, Boston, 0:00:52.479 --> 0:00:57.280 Bloomberg nine sixty, San Francisco, dav Digital Radio, London, Sirius 0:00:57.440 --> 0:01:00.280 XM one nineteen and around the world on Blue Bomberg 0:01:00.400 --> 0:01:03.080 Radio dot com and via the Bloomberg Business App. 0:01:05.000 --> 0:01:09.240 Good day to you. I'm Tom Busby. We begin today's 0:01:09.240 --> 0:01:13.040 program with some highly anticipated economic data here in the US. 0:01:13.080 --> 0:01:15.960 Out this week, an initial look at second quarter GDP 0:01:16.080 --> 0:01:21.720 on Thursday and PC core inflation data on Friday. How 0:01:21.800 --> 0:01:24.679 might those numbers impact the feds monetary and interest rate 0:01:24.680 --> 0:01:25.840 policies moving forward? 0:01:25.959 --> 0:01:26.119 Well. 0:01:26.160 --> 0:01:29.360 For more, we turned to Stuart paul, Us, economist with 0:01:29.440 --> 0:01:33.280 Bloomberg Economics. Now, Stuart, let's start with that economic growth 0:01:33.360 --> 0:01:36.520 number for the spring's second quarter, A pretty mild GDP 0:01:36.680 --> 0:01:39.320 number one point three percent in the first quarter. What 0:01:39.360 --> 0:01:40.600 are you expecting in the spring. 0:01:40.920 --> 0:01:45.400 We're expecting a very modest uptick. Our base cases for 0:01:45.600 --> 0:01:49.160 headline GDP growth to register a one point eight percent 0:01:49.280 --> 0:01:52.360 annualized pace of growth. So we're slightly above the consensus, 0:01:52.360 --> 0:01:54.960 which is at one point seven percent. And so there's 0:01:55.000 --> 0:01:59.800 a very modest uptick in headline growth in the second quarter. 0:02:00.040 --> 0:02:04.680 And the real question is what's behind that acceleration and growth, 0:02:04.840 --> 0:02:08.080 Because it's not personal spending. We expect personal spending growth 0:02:08.120 --> 0:02:10.639 to essentially be constant at one and a half percent. 0:02:11.120 --> 0:02:14.280 What's really driving that headline growth number in the second 0:02:14.360 --> 0:02:18.880 quarter is an accumulation of inventories. And inventories can rise 0:02:18.919 --> 0:02:22.240 for two different reasons. Producers can be really optimistic about 0:02:22.240 --> 0:02:25.400 the growth outlooks, so they start stocking shelves and anticipation 0:02:25.480 --> 0:02:30.360 of future demand, or they could just misjudge growth accidentally 0:02:30.919 --> 0:02:34.640 overproduce goods and they find themselves carrying this inventory that 0:02:34.680 --> 0:02:37.040 they didn't intend to actually produce in the first place. 0:02:37.320 --> 0:02:39.040 And we think that it's more of the second. We 0:02:39.120 --> 0:02:43.360 think that it's more a misjudging of the durability of 0:02:43.360 --> 0:02:46.840 the American consumer in the present. So we think that 0:02:46.919 --> 0:02:49.200 one of the key fundamental drivers of growth in the 0:02:49.240 --> 0:02:52.880 second quarter is the sort of accidental accumulation of inventories. 0:02:53.360 --> 0:02:57.040 And so we're really thinking about growth in the first 0:02:57.040 --> 0:02:59.600 half of twenty twenty four relative to growth in the 0:02:59.639 --> 0:03:02.760 second half of twenty twenty three, and the pace of 0:03:02.800 --> 0:03:06.000 growth when you look second half of twenty twenty three 0:03:06.200 --> 0:03:08.320 and into the first half of twenty twenty four has 0:03:08.360 --> 0:03:11.320 basically been cut in half. And a big part of 0:03:11.320 --> 0:03:14.959 that is the cooling labor market. Consumers are becoming a 0:03:14.960 --> 0:03:18.880 little bit more prudent, and as a consequence, firms find 0:03:18.919 --> 0:03:21.720 themselves a little bit over stuffed with inventory. So as 0:03:21.720 --> 0:03:23.560 we head into the second half of the year, we 0:03:23.639 --> 0:03:27.280 expect production rolls to slow and we expect growth to 0:03:27.320 --> 0:03:28.680 cool in the second half as well. 0:03:28.760 --> 0:03:31.760 Okay, so we see a labor market cooling a little bit. 0:03:31.800 --> 0:03:34.840 We do see inflation cooling a little bit. But the 0:03:35.000 --> 0:03:37.880 several months in a row of solid manufacturing data that 0:03:37.920 --> 0:03:41.480 we have, the factory orders, durable goods orders, that's a 0:03:41.520 --> 0:03:42.160 false flag. 0:03:42.400 --> 0:03:45.640 You're saying some of it is because of a backlog 0:03:45.680 --> 0:03:48.800 in autos, right, the fleet is older, there's still a 0:03:49.080 --> 0:03:52.880 turnover that needs to take place. There is real underproduction 0:03:52.920 --> 0:03:55.600 of autos when there was a semiconductor shortage, so there's 0:03:55.600 --> 0:03:58.200 still a little bit of a catch up there. Auto 0:03:58.440 --> 0:04:01.640 sales in June will effect a little bit by a 0:04:01.680 --> 0:04:05.040 cyber attack, so there's still going to be some chunkiness 0:04:05.080 --> 0:04:08.320 to some of the data. There are still orders of 0:04:08.600 --> 0:04:13.400 some other transportation goods like aircraft, so there is some 0:04:14.040 --> 0:04:18.680 larger explanatory variables. They are separate apart from what we 0:04:18.720 --> 0:04:22.680 would think of as typically affected by monetary policy, typically 0:04:22.720 --> 0:04:25.239 affected by the business cycle. There are some of these 0:04:25.960 --> 0:04:29.600 lagging consequences of COVID that are still showing up in 0:04:29.640 --> 0:04:31.640 the data and making the data a little bit chunky. 0:04:31.800 --> 0:04:35.360 Oh boy, so will these build ups of inventories, whether 0:04:35.400 --> 0:04:39.720 it's cars, whether it's clothing, whether it's housing, appliances. Is 0:04:39.760 --> 0:04:42.239 that a good thing for consumers in the months ahead, 0:04:42.320 --> 0:04:44.120 I mean they're going to have to clear out these 0:04:44.360 --> 0:04:45.840 storerooms and warehouses. 0:04:46.360 --> 0:04:49.000 We think that it can lead to some discounting of 0:04:49.200 --> 0:04:53.520 consumer durable goods, and consumer durable goods are typically dragging 0:04:53.560 --> 0:04:57.159 on inflation. We do see just through time, this was 0:04:57.240 --> 0:05:01.040 true pre COVID as well, that consumer durable goods really 0:05:01.120 --> 0:05:04.960 dragged on headline inflation. And for the inflation outlook, the 0:05:04.960 --> 0:05:07.880 thing that's going to matter most is really inflation in 0:05:07.960 --> 0:05:12.560 some select services categories, things like homeowner's insurance and auto insurance, 0:05:12.600 --> 0:05:15.520 where the price of autos rose a lot, so the 0:05:15.560 --> 0:05:18.640 replacement cost of autos rose a lot, and so what 0:05:18.680 --> 0:05:21.839 you should be paying in insurance premiums is now rising 0:05:21.960 --> 0:05:23.520 a lot. So there's a little bit of this catch 0:05:23.600 --> 0:05:27.400 up inflation that's taking place. That's booying inflation separate and 0:05:27.440 --> 0:05:31.040 apart from the dynamic that's taking place in goods, where 0:05:31.040 --> 0:05:33.880 we do expect to see some discounting because of that 0:05:33.960 --> 0:05:35.600 accidental build up in inventories. 0:05:35.720 --> 0:05:37.760 Well that would be nice to see. Well, let's stay 0:05:37.800 --> 0:05:40.119 on inflation, because we're going to turn to that PCE 0:05:40.400 --> 0:05:43.719 price index for June the FEDS preferred measure of inflation. 0:05:44.360 --> 0:05:46.760 Are we going to continue to see evidence that inflation 0:05:46.839 --> 0:05:50.240 is cooling? I mean, we're not getting worse, that's right. 0:05:50.320 --> 0:05:54.560 So CPI inflation and PPI inflation are both pretty good 0:05:54.600 --> 0:05:58.799 for June. And when we map CPI and producer prices 0:05:58.839 --> 0:06:02.560 PPI in to that core PCE space so that we 0:06:02.560 --> 0:06:05.000 can get a good feel of the Fed's preferred measure, 0:06:05.480 --> 0:06:08.880 we estimate that annual core PCEE inflation is going to 0:06:08.920 --> 0:06:11.280 register two and a half percent in June. That's down 0:06:11.360 --> 0:06:14.200 from two point six percent in May. And if we 0:06:14.240 --> 0:06:17.240 look on a monthly basis, we're expecting to see core 0:06:17.320 --> 0:06:20.760 inflation of just zero point one percent. Now, that'll give 0:06:20.839 --> 0:06:23.200 us the third month in a row where the monthly 0:06:23.240 --> 0:06:26.320 pace of inflation is pretty consistent with the fed's two 0:06:26.360 --> 0:06:29.200 percent inflation target, and that should give the FED some 0:06:29.400 --> 0:06:32.160 confidence to cut rates this year. We think starting in 0:06:32.200 --> 0:06:33.000 September and. 0:06:33.040 --> 0:06:35.080 Three months in a row is exactly the kind of 0:06:35.120 --> 0:06:37.680 consistency they were looking for. So we do have a 0:06:37.680 --> 0:06:40.000 FED meeting later this month at the very end of July. 0:06:40.440 --> 0:06:42.800 It's the September one that is the focus for everybody, 0:06:42.880 --> 0:06:45.599 right that By then we will have data on jobs 0:06:45.600 --> 0:06:48.440 and data of inflation for July and for August. Is 0:06:48.480 --> 0:06:50.800 that the one where we may really see the holy 0:06:50.839 --> 0:06:52.160 grail everyone's been waiting for. 0:06:52.400 --> 0:06:54.240 I think that's right. I think that September is going 0:06:54.279 --> 0:06:55.880 to be the month where we finally get a cut. 0:06:55.920 --> 0:06:58.600 I think that the July meeting that's coming up is 0:06:58.640 --> 0:07:01.599 actually going to be pretty the uneventful. We could get 0:07:01.640 --> 0:07:04.440 some communications from the FED Chairman at the post meeting 0:07:04.480 --> 0:07:07.200 press conference that sort of sets this stage for cuts 0:07:07.200 --> 0:07:10.240 this year. Then all the FED officials go to Jackson 0:07:10.240 --> 0:07:13.040 Hole for their annual symposium where they discuss a lot 0:07:13.080 --> 0:07:17.000 of academic papers, and there is typically a pretty well 0:07:17.000 --> 0:07:20.040 attended speech by the FED Chairman that always serves as 0:07:20.040 --> 0:07:22.840 an opportunity for communications to set the stage for that 0:07:22.880 --> 0:07:25.320 September cut that will then follow. And then we get 0:07:25.320 --> 0:07:27.640 the September meeting, and I think that could be the one. 0:07:27.680 --> 0:07:27.880 Wow. 0:07:27.880 --> 0:07:30.520 A lot to look forward to. Second quarter GDP out 0:07:30.600 --> 0:07:33.720 this Thursday. The PCE price Index for June on Friday 0:07:33.760 --> 0:07:38.200 are thanks to Stuart paul Us, economist with Bloomberg Economics. Well, 0:07:38.200 --> 0:07:41.480 next we move to the auto space and ev Giant Tesla. 0:07:41.600 --> 0:07:45.160 The world's most valuable automaker report second quarter earnings on Tuesday, 0:07:45.160 --> 0:07:48.680 and for more. We're joined by Steve Mann, Bloomberg Intelligence, 0:07:48.720 --> 0:07:53.000 Global Autos and Industrials research analysts. So, Steve, it's been 0:07:53.360 --> 0:07:55.840 kind of a challenging time for most ev makers, sales 0:07:55.880 --> 0:07:59.000 still growing a lot more slowly, but Tesla, at least 0:07:59.040 --> 0:08:01.440 on Wall Street, is on our role. What are you 0:08:01.520 --> 0:08:04.800 expecting to see in Tesla's second quarter earnings on Tuesday. 0:08:05.120 --> 0:08:07.760 Yeah, their stock has been doing really, really well. You know, 0:08:07.800 --> 0:08:09.920 a lot of it is related to the robo taxi 0:08:11.120 --> 0:08:13.400 that they have planning to announced in October. They were 0:08:13.400 --> 0:08:16.840 originally saying August, now it's in October. But if you 0:08:16.920 --> 0:08:21.760 look at the underlying business, the auto business, it's still challenging. 0:08:22.720 --> 0:08:25.640 You know, second quarter sales are down year every year. 0:08:26.000 --> 0:08:29.600 But we still think their earnings can actually beat consensus 0:08:29.680 --> 0:08:34.079 by like twenty to twenty five cents, mainly on you know, 0:08:34.200 --> 0:08:38.040 lower raw material costs on the battery side, as well 0:08:38.080 --> 0:08:41.160 as you know, cyber truck production is ramping up. They 0:08:41.240 --> 0:08:44.120 you know, produce eleven thousand in the second quarter, up 0:08:44.160 --> 0:08:47.160 from thirty five hundred in the first quarter. So overall 0:08:47.480 --> 0:08:50.600 earnings in the first quarter should be better than what 0:08:50.679 --> 0:08:51.400 people expect. 0:08:51.760 --> 0:08:55.280 So Tesla's delivery numbers rising from I would say a 0:08:55.280 --> 0:08:58.960 pretty tough first quarter when GM and FOD they're not 0:08:59.000 --> 0:09:01.560 seeing the same kind of dem I mean, can you 0:09:01.600 --> 0:09:04.559 compare the products or is Tesla that much more desirable 0:09:04.640 --> 0:09:06.400 the demand for those products so much better? 0:09:06.720 --> 0:09:09.720 Yeah, well, Tesla does have a cachet in the EV space, 0:09:10.640 --> 0:09:13.840 but look, I think you know they're going to face challenges. 0:09:13.960 --> 0:09:18.520 GM and other companies like Stilentis. They're not waiting, they're 0:09:18.520 --> 0:09:22.880 not holding back. Even though EV sales are slow in 0:09:22.920 --> 0:09:26.760 the recent quarters, they're still investing a lot of money 0:09:27.080 --> 0:09:31.880 in introducing new products. You know. For example, GM introduced 0:09:32.320 --> 0:09:36.520 the new Blazer not too long ago, and then another one, 0:09:36.720 --> 0:09:40.960 a more affordable one, the Chevrolet Equinox. And you're seeing 0:09:40.960 --> 0:09:43.520 that across the board. A lot of the automakers are 0:09:43.559 --> 0:09:47.120 introducing more affordable evs. And that's what I think the 0:09:47.160 --> 0:09:51.559 industry needs to do, is to cater to the bigger masses, 0:09:51.800 --> 0:09:56.840 the bigger audience in the auto market by introducing a lower, 0:09:57.320 --> 0:09:58.240 more affordable EV. 0:09:58.520 --> 0:10:02.040 Well, nowhere is that more then in China and the 0:10:02.200 --> 0:10:05.760 EV maker byd on track to overtake Tesla and sales 0:10:05.960 --> 0:10:07.960 in that country this year, and it's just one of 0:10:08.000 --> 0:10:11.560 many competitors. Some of their cars going for about thirteen 0:10:11.640 --> 0:10:16.000 thousand US dollars over there. How is Tesla competing against that? 0:10:16.000 --> 0:10:19.160 That market is just crazy. I mean, the price war 0:10:19.600 --> 0:10:24.360 is not only impacting the EV markets, impacting everyone including 0:10:24.840 --> 0:10:29.560 internal combustion engine vehicle makers like BMW. It's a crazy 0:10:29.600 --> 0:10:34.080 market over there. Tesla is actually doing fairly well over there. 0:10:34.640 --> 0:10:38.600 They've actually held back on any price cuts, but they 0:10:38.640 --> 0:10:44.600 are providing some better financing terms for some consumers. Sales 0:10:44.640 --> 0:10:47.840 have actually, you know, fallen off a little bit, but 0:10:48.040 --> 0:10:53.200 overall they're still producing a lot in their factories, shipping 0:10:53.200 --> 0:10:57.440 them overseas in Europe. But overall, you know, Tesla, I 0:10:57.440 --> 0:11:00.360 think it will bounce back, you know, once this price 0:11:00.400 --> 0:11:01.920 for kind of subsides. 0:11:02.080 --> 0:11:04.400 Now, let me circle back with you on the ROBOTAXI. 0:11:04.520 --> 0:11:07.680 I mean, we have been hearing about this autonomous cab 0:11:07.840 --> 0:11:11.720 for six seven years, A delay, delay, delay. We are 0:11:11.760 --> 0:11:14.880 going to expect to see it August eighth, Now it's October. 0:11:15.360 --> 0:11:17.559 What do you think? What is the real reason or 0:11:17.640 --> 0:11:21.240 as Kathy Woods of our management said, he wants to 0:11:21.320 --> 0:11:23.520 wow us, and it's going to be even better than 0:11:23.559 --> 0:11:24.240 we expected. 0:11:24.600 --> 0:11:26.600 Yeah. I mean, if you look at their stock price, 0:11:26.840 --> 0:11:29.199 we did some of the back of the anvelope calculation. 0:11:29.520 --> 0:11:34.360 Most of the stock price is valuing Robotaxi and AI. 0:11:35.000 --> 0:11:37.480 You know, Elon must have talked about robotaxi for a 0:11:37.559 --> 0:11:41.080 long time, and I think this is an event that's 0:11:41.160 --> 0:11:44.520 going to be mostly watched to see how they're going 0:11:44.600 --> 0:11:49.520 to move AI, you know, into the cars. They're going 0:11:49.559 --> 0:11:53.199 to probably announce or give some updates on the Optimus 0:11:53.320 --> 0:11:57.600 humanoid robots. It's going to be a huge event for us. 0:11:57.840 --> 0:12:00.880 You know, Robotaxi is only I think. I think one 0:12:01.200 --> 0:12:05.199 component of what Elon Musk is trying to do. Rye 0:12:05.200 --> 0:12:07.760 hailing is probably going to be a small part of 0:12:07.800 --> 0:12:11.720 that business for them. There's a lot of opportunities for 0:12:11.840 --> 0:12:18.400 robo taxi. You know, his mantra is really about driving sustainability, 0:12:18.920 --> 0:12:25.520 lower consumption or lower greenhouse gases. These Tesla vehicles, you know, 0:12:25.520 --> 0:12:29.040 if you think about it, they're actually battery on wheels, 0:12:29.120 --> 0:12:33.000 so other than taking the passenger from zero point A 0:12:33.120 --> 0:12:36.240 to point B on the rye hailing business, you know, 0:12:36.360 --> 0:12:39.040 I think what Kathy Wood and others are thinking about. 0:12:39.200 --> 0:12:43.640 Is these cars could be used for distributed power, offsetting 0:12:43.720 --> 0:12:47.360 peak power in one region to the next. 0:12:47.640 --> 0:12:47.880 Wow. 0:12:47.960 --> 0:12:50.319 Well a lot to look forward to Tesla's second quarter 0:12:50.360 --> 0:12:53.800 earnings after Wall Street's closing bell on Tuesday, Our thanks 0:12:53.840 --> 0:12:58.920 to Steve Man Bloomberg Intelligence, Global Autos and Industrials research analysts, 0:12:59.360 --> 0:13:02.080 coming up Bloomberg day Break Weekend. Can France win an 0:13:02.080 --> 0:13:05.559 Olympic gold in profitability? We look ahead to the twenty 0:13:05.640 --> 0:13:09.520 twenty four Summer Olympic Games in Paris. I'm Tom Busby 0:13:09.559 --> 0:13:23.679 and this is Bloomberg. This is Bloomberg day Break Weekend, 0:13:23.720 --> 0:13:26.160 our global look ahead at the top stories for investors 0:13:26.160 --> 0:13:28.600 in the coming week. I'm Tom Busby in New York. 0:13:29.040 --> 0:13:31.000 Up later in our program we'll look at how the 0:13:31.120 --> 0:13:35.280 US presidential election in November may shape US China relations 0:13:35.480 --> 0:13:38.920 going forward. But first, the French capital prepares to host 0:13:39.040 --> 0:13:41.760 the greatest show on Earth. But will it be worth it? 0:13:42.160 --> 0:13:47.040 The Olympic Games famously expensive, very rarely profitable. Will Paris 0:13:47.080 --> 0:13:50.400 be able to convert athletic prowess to economic gain? And 0:13:50.440 --> 0:13:52.880 for more, Let's go to London and bring in Bloomberg 0:13:52.920 --> 0:13:55.800 Daybreak Europe anchor Caroline hepgar Tom. 0:13:56.040 --> 0:13:59.560 Much like an Olympic marathon, the road to Paris twenty 0:13:59.600 --> 0:14:02.680 twenty five four has already been filled with ups and downs. 0:14:02.840 --> 0:14:07.680 The journey has been punctuated by obstacles, from funding challenges 0:14:07.880 --> 0:14:13.120 to more recent political uncertainty and local dissatisfaction at the 0:14:13.200 --> 0:14:18.359 perceived inconveniences that the Games could bring. Central two discussions 0:14:18.360 --> 0:14:21.920 has been the question about whether Paris's iconic river Senn 0:14:22.240 --> 0:14:26.560 will be clean enough in time to welcome Olympic swimmers 0:14:26.560 --> 0:14:30.960 onto its banks. Recently, the Paris mayor and Idalago took 0:14:31.000 --> 0:14:34.720 a dip in the river herself plus some journalists in 0:14:34.800 --> 0:14:38.800 a bid to prove its cleanliness. France has earmarked one 0:14:38.840 --> 0:14:41.240 point four billion euros that's about one and a half 0:14:41.320 --> 0:14:45.720 billion US dollars for improving the water quality of the river, 0:14:46.120 --> 0:14:50.160 amid lingering concerns that the overflows from the city's sewage 0:14:50.200 --> 0:14:54.920 system bring waste water and bacteria into the Seine, making 0:14:54.960 --> 0:14:58.760 it unswimmable. President Immanue and macar is even committed to 0:14:58.840 --> 0:15:01.160 a swim in the river at SCE some point, although 0:15:01.200 --> 0:15:04.600 given the country's current political situation, he may find it 0:15:04.760 --> 0:15:07.840 difficult to find the time cleaning up the river and 0:15:07.920 --> 0:15:12.000 reversing a centuries old ban on swimming in It has 0:15:12.080 --> 0:15:16.240 been a long and complicated project for French authorities, the 0:15:16.280 --> 0:15:21.280 peculiarities of which I've been discussing with Bloomberg's investigations Reporter 0:15:21.600 --> 0:15:22.760 gasper seabag. 0:15:23.960 --> 0:15:27.920 Well, the issue here is that when it rains a lot, 0:15:28.320 --> 0:15:32.720 the sewage system in Paris overflows and that brings wastewater 0:15:32.760 --> 0:15:36.120 and bacteria into the Seine, which obviously isn't what you want. 0:15:37.040 --> 0:15:41.760 No indeed, and the weather has been particularly rainy across Europe, 0:15:41.800 --> 0:15:43.240 how has it been in Paris lately? 0:15:44.720 --> 0:15:49.000 It's not being fantastic. I mean, June was pretty horrendous 0:15:49.920 --> 0:15:53.560 and that obviously translated into the quality of the water 0:15:53.800 --> 0:15:57.840 not being adequate. For basically most of the days of June. 0:15:58.800 --> 0:16:04.600 July has been much more positive and we've seen several 0:16:04.720 --> 0:16:08.680 days in a row being at the right quality standards, 0:16:09.120 --> 0:16:14.760 and in fact, the Sports Minister Amelie Udia Castella took 0:16:14.800 --> 0:16:16.960 a dive into the seine to show that it was 0:16:17.320 --> 0:16:19.240 it was okay for athletes. 0:16:18.880 --> 0:16:19.360 To go in. 0:16:20.320 --> 0:16:21.640 So how have they done us. 0:16:23.240 --> 0:16:23.520 Well? 0:16:24.200 --> 0:16:27.800 There's a huge variety of efforts that have been deployed 0:16:28.000 --> 0:16:34.240 in Paris. It's it's taken several years. There's some which 0:16:34.320 --> 0:16:38.720 really got the spotlight, like creating a huge water bisin 0:16:39.320 --> 0:16:42.760 in the depth of Paris, which was you know, they 0:16:42.920 --> 0:16:48.080 they excavated and they created this huge capacity to increase 0:16:49.040 --> 0:16:54.040 the possibility to store those overflows from the sewage when 0:16:54.040 --> 0:16:56.880 it rains. That I was talking about. But there were 0:16:56.920 --> 0:17:02.640 a lot of smaller tasks, some quite For example, they 0:17:02.720 --> 0:17:06.800 had to go knocking on doors to make sure that 0:17:07.080 --> 0:17:10.960 households were connected to the sewage system because the reality, 0:17:11.160 --> 0:17:14.240 the grim reality of all of this is that some 0:17:14.840 --> 0:17:18.480 were just pumping their toilets directly into the sein. Again 0:17:18.840 --> 0:17:21.560 not at all what you want to achieve. The result 0:17:21.680 --> 0:17:24.720 of having athletes a jump into the sin and feeling 0:17:25.280 --> 0:17:26.200 comfortable about it. 0:17:26.880 --> 0:17:30.399 So that was Gaspar Sibag speaking to me. But murky 0:17:30.520 --> 0:17:34.600 rivers aren't the only problem facing the Paris Olympics. Organizers 0:17:34.680 --> 0:17:39.600 also faced the challenge of extracting lasting value from these games, 0:17:40.119 --> 0:17:44.440 economic gain being perhaps the most sought after prize ever 0:17:44.480 --> 0:17:47.720 since the first Olympics was held over a century ago. 0:17:47.800 --> 0:17:51.359 The Games have been known for dazzling sporting feats, but 0:17:51.440 --> 0:17:57.200 also dizzying expense, particularly for opening ceremonies. Recently, the ballooning 0:17:57.280 --> 0:18:00.919 cost of hosting the Games led residents in Austin, in 0:18:01.119 --> 0:18:05.159 Rome and in Oslo to reject efforts to bring the 0:18:05.200 --> 0:18:09.160 Olympics to their cities. As a result, the International Olympic 0:18:09.240 --> 0:18:13.400 Committee is hoping to reign in costs, starting with Paris. 0:18:13.920 --> 0:18:17.000 Well joining me for a discussion around this and how 0:18:17.040 --> 0:18:20.320 Paris is trying to do things differently and keep the 0:18:20.359 --> 0:18:23.639 costs of the Games down is Bloomberg's Hugo Miller. 0:18:24.200 --> 0:18:26.920 Well. I sat down with Sebco for the Big Take 0:18:26.960 --> 0:18:29.919 that we wrote on this topic recently, and what he 0:18:30.160 --> 0:18:33.560 told me was something fascinating was that the architect of 0:18:33.560 --> 0:18:36.520 the modern Games in Los Angeles in nineteen eighty four 0:18:36.680 --> 0:18:39.440 said to him the most important thing you do, as 0:18:39.480 --> 0:18:42.040 he was preparing to run the twenty twelve London Games, 0:18:42.280 --> 0:18:45.440 was learned to say no. And the trouble is that 0:18:45.640 --> 0:18:48.760 the Olympics for too long have not been able to 0:18:48.800 --> 0:18:52.200 say no. In other words, when in doubt, they've added 0:18:52.200 --> 0:18:55.800 another ceremony, another event, just to kind of make the 0:18:55.800 --> 0:18:59.320 whole spectacle that much more spectacular, and over the years 0:18:59.400 --> 0:19:02.560 the Games have got bigger and more bloated. For the 0:19:02.560 --> 0:19:04.160 better part of three decade. 0:19:04.000 --> 0:19:06.320 Well, and only one of the games is actually ever 0:19:06.400 --> 0:19:09.000 managed to be profitable, and that was Los Angeles in 0:19:09.119 --> 0:19:11.520 nineteen eighty four. How did they manage to do it, 0:19:11.560 --> 0:19:13.359 even though of course it's quite a long time ago. 0:19:13.920 --> 0:19:17.440 Indeed, that was the culmination of a bad decade for 0:19:17.520 --> 0:19:21.520 the Olympic movement. You had in nineteen seventy two, the 0:19:21.640 --> 0:19:26.520 tragedy of the murder the terrorists murder of eleven Israeli 0:19:26.560 --> 0:19:29.400 athletes in seventy two, and in Montreal in seventy six, 0:19:29.520 --> 0:19:34.639 you had a massive cost overruns, which led taxpayers in 0:19:34.680 --> 0:19:38.520 Montreal to still be paying for the Olympics four decades later. 0:19:38.880 --> 0:19:41.840 And things got so bad that the citizens of Denver 0:19:42.400 --> 0:19:46.000 actually said, after being awarded the Games, no thanks, we 0:19:46.040 --> 0:19:48.320 don't want them. So basically, by the time you got 0:19:48.320 --> 0:19:51.600 to nineteen eighty you had just two cities bidding for 0:19:51.640 --> 0:19:55.520 the games, Los Angeles and Tehran. And as we know, 0:19:55.640 --> 0:19:59.560 the history books tell us, Iran was rapidly overtaken by revolution. 0:20:00.080 --> 0:20:05.000 So you've had la alone. And what that allowed Peter Uberov, 0:20:05.119 --> 0:20:08.000 this businessman who was fronting the games, to do is 0:20:08.000 --> 0:20:10.439 to tell the IOC, you know what I'm going to 0:20:10.480 --> 0:20:12.400 do these games the way I want to do them, 0:20:12.720 --> 0:20:15.399 and that means we're going to reuse student dorms for 0:20:15.480 --> 0:20:18.359 the athletes, We're going to reuse existing stadia like the 0:20:18.400 --> 0:20:21.119 Coliseum and the Rose Bowl, and we're not going to 0:20:21.160 --> 0:20:25.080 build for the sake of building. And he was the 0:20:25.119 --> 0:20:27.639 first and to date, as you say, the only person 0:20:27.960 --> 0:20:31.040 to deliver the games on profit, on time. 0:20:32.280 --> 0:20:35.520 Well, what about Paris? What is France doing to rain 0:20:35.760 --> 0:20:38.920 in the costs and try to bring it home profitably 0:20:39.000 --> 0:20:40.960 for them? 0:20:41.000 --> 0:20:46.280 Paris, even cynics would say, Paris so far looks like 0:20:46.560 --> 0:20:49.800 it's learned the lessons from the past and taking a 0:20:49.880 --> 0:20:54.120 queue from the IOC, is set to deliver a balanced 0:20:54.160 --> 0:20:57.159 budget for its games. It's done so by keeping the 0:20:57.160 --> 0:21:00.720 construction of new infrastructure to a minimum, primarily just to 0:21:00.760 --> 0:21:05.760 revitalize the northern neighborhood of San Denis in Paris, but 0:21:06.000 --> 0:21:09.119 really a focus on private sector involvement, to keep the 0:21:09.160 --> 0:21:12.560 operating budget down to four point seven billion dollars and 0:21:12.600 --> 0:21:16.600 then to keep the surrounding infrastructure spending to another four 0:21:16.600 --> 0:21:19.399 and a half billion, which, when you compare it to 0:21:19.480 --> 0:21:23.680 the boondoggle that was such a in twenty fourteen or Beijing. 0:21:24.040 --> 0:21:26.000 It's a fraction of those costs. 0:21:26.680 --> 0:21:30.119 So I feel so expensive. Why do cities? Why do 0:21:30.280 --> 0:21:33.840 countries keep on bidding or wanting to take part? What 0:21:33.880 --> 0:21:34.840 do they gain from it? 0:21:35.160 --> 0:21:38.680 When it comes to democracies, Many of these democracies simply 0:21:38.720 --> 0:21:44.320 say no, And we had taxpayer revolts in Stockholm, in Boston, 0:21:44.400 --> 0:21:48.160 in Rome, as we discussed. But I think there is 0:21:48.320 --> 0:21:54.760 just this irresistible urge, particularly in emerging markets and authoritarian 0:21:54.800 --> 0:21:59.080 countries that still seek kind of soft power to be 0:21:59.160 --> 0:22:01.680 gained from host the Games. So that's why you saw 0:22:01.720 --> 0:22:05.960 Puchin trying to kind of burnish Russia's legacy well after 0:22:05.960 --> 0:22:08.560 the Cold War is over with the such a Games, 0:22:08.640 --> 0:22:11.520 and the Chinese Communist Party looking to do it not 0:22:11.560 --> 0:22:14.760 once but twice with the Summer and Winter Games in Beijing. 0:22:15.040 --> 0:22:17.880 It seems like there's a certain sort of authoritarian swagger, 0:22:17.920 --> 0:22:21.080 as we put it, that they feel comes from hosting 0:22:21.080 --> 0:22:24.480 the Games that the Western democracies don't really feel anymore. 0:22:25.000 --> 0:22:27.760 Having said that, maybe there are some benefits. For example, 0:22:27.800 --> 0:22:31.159 if France manages to clean up I know that the 0:22:31.200 --> 0:22:33.639 main river the send in Paris, for example, I mean 0:22:33.680 --> 0:22:36.880 that's expensive, but perhaps could be seen as quite. 0:22:36.600 --> 0:22:40.720 Worthwhile indeed, and to listeners and readers, I have to 0:22:40.760 --> 0:22:42.720 give a shout out to my colleage Jenny Cha who 0:22:42.760 --> 0:22:45.639 did in deep job in the same as Paris Mayor 0:22:45.640 --> 0:22:49.520 and Hidalgo yesterday to experience the send for herself going 0:22:49.520 --> 0:22:50.240 to every. 0:22:50.040 --> 0:22:51.399 Length as a Bloomberg report. 0:22:51.520 --> 0:22:54.399 I like it she did, and I think that that 0:22:54.800 --> 0:23:00.600 is a sensible legacy that we should collectively sit dwellers 0:23:00.640 --> 0:23:04.240 aimed for is that London could regenerate part of the 0:23:04.280 --> 0:23:07.240 east end of the city twelve years ago, that Paris 0:23:07.680 --> 0:23:10.720 can turn the sin into a swimmable asset. And these 0:23:10.760 --> 0:23:13.159 are fantastic legacies, and these are what we should be 0:23:13.200 --> 0:23:16.480 aiming for. What the IOC doesn't want to see anymore, 0:23:16.560 --> 0:23:19.359 and what I don't think any taxpayer should want to 0:23:19.400 --> 0:23:22.000 see is instead where you see things like what happened 0:23:22.160 --> 0:23:24.960 in Rio de Geneiro, where they built all this infrastructure 0:23:25.000 --> 0:23:28.720 for sports that locals just didn't use and sat there 0:23:28.760 --> 0:23:31.120 like white elephants within months of the game's ending. 0:23:31.640 --> 0:23:35.040 Yeah, in London, interestingly, the eastern part of the city 0:23:35.040 --> 0:23:38.160 that was redeveloped is really being absorbed, has been absorbed 0:23:38.200 --> 0:23:41.040 into the cattle, which is interesting, which brings me to 0:23:41.040 --> 0:23:46.400 my last thought about long term economic and development gains. 0:23:46.640 --> 0:23:50.320 Do those emerge, where have they emerged? Most will they 0:23:50.359 --> 0:23:52.359 emerge from the Paris Games. 0:23:52.760 --> 0:23:55.520 I think it remains to be seeing what the parish 0:23:55.600 --> 0:23:59.240 organizers say is four billion dollars depending on your perspective, 0:23:59.240 --> 0:24:01.600 as a lot or amount of money when you're talking 0:24:01.600 --> 0:24:05.199 about public spending on infrastructure. But the aim is to 0:24:05.280 --> 0:24:09.000 take a more depressed, or at least to put bluntly 0:24:09.040 --> 0:24:12.679 poorer part of the city that hasn't necessarily benefited from 0:24:12.720 --> 0:24:17.240 public spending and create things like swimming pool sports facilities 0:24:17.400 --> 0:24:20.399 for local residents in the northern part of the city. 0:24:20.600 --> 0:24:23.760 That hopefully will prove to be the case in the 0:24:23.840 --> 0:24:26.760 years to come. But as we've seen over and over 0:24:26.800 --> 0:24:30.080 and over again, there is a history of overrun and overspending. 0:24:30.160 --> 0:24:33.400 But hopeful in Paris is the exception to that unfortunate rule. 0:24:34.119 --> 0:24:37.080 So that was Hugo Miller and of course not long 0:24:37.119 --> 0:24:41.239 to go now. Paris begins its Olympics extravaganza with an 0:24:41.280 --> 0:24:45.639 opening ceremony along a six kilometer route taking in all 0:24:45.760 --> 0:24:49.800 of the Paris sites we expect, right along the River Sene. 0:24:50.160 --> 0:24:53.760 On the twenty sixth of July. I'm Caroline Hepger here 0:24:53.760 --> 0:24:55.879 in London. You can catch us every weekday morning for 0:24:55.920 --> 0:24:58.960 Bloomberg Daybreak Europe, beginning at six am in London, that's 0:24:59.000 --> 0:25:01.040 one am, Tom. 0:25:01.560 --> 0:25:04.200 Thank you, Caroline, And coming up on Bloomberg day Break 0:25:04.240 --> 0:25:07.359 weekend to look at how the US presidential election may 0:25:07.520 --> 0:25:12.320 shape relations between US and China. I'm Tom Busby on 0:25:12.440 --> 0:25:26.040 This is Bloomberg. I'm Tom Busby in New York with 0:25:26.080 --> 0:25:28.360 your global look ahead at the top stories for investors 0:25:28.400 --> 0:25:31.000 in the coming week. How will the US presidential election 0:25:31.119 --> 0:25:34.520 shape the relationship between the US and China? For more, 0:25:34.600 --> 0:25:37.879 Let's go to Bloomberg Daybreak Asia co host Brian Curtis 0:25:37.920 --> 0:25:38.639 in Hong Kong. 0:25:38.920 --> 0:25:41.960 Tom, the twenty twenty four US election will be critical 0:25:42.040 --> 0:25:45.240 in setting the chorus for relations with China and indeed 0:25:45.320 --> 0:25:48.720 all of Asia over the next four years. Broadly speaking, 0:25:48.880 --> 0:25:52.360 both President Joe Biden and former President Donald Trump want 0:25:52.400 --> 0:25:55.000 to be tough on China, and in fact both want 0:25:55.040 --> 0:25:58.320 to step up the pressure and enact even tougher policies, 0:25:58.880 --> 0:26:02.800 but they will take different paths. Biden will be more ideological, 0:26:02.960 --> 0:26:07.280 Trump more transactional. Now, President Biden says the US would 0:26:07.320 --> 0:26:11.200 force fully respond to a Chinese invasion of Taiwan, while 0:26:11.240 --> 0:26:14.440 former President Trump hinted to Bloomberg he'd want to see 0:26:14.440 --> 0:26:18.239 the US get paid for it. Earlier, Bloomberg's Rome var 0:26:18.280 --> 0:26:21.160 Geese weighed in on Trump's comments. 0:26:20.840 --> 0:26:24.679 It's never been a question the United States would protect 0:26:24.720 --> 0:26:28.960 Taiwan against Chinese aggression. But here he is saying what's 0:26:28.960 --> 0:26:31.840 in it for us? And I think that's the common 0:26:31.960 --> 0:26:35.400 thread throughout all of these policies and all of his statements. 0:26:35.520 --> 0:26:38.679 It's I'm not going to take anything for granted, and 0:26:38.760 --> 0:26:40.560 I'm going to see what's best for me and what's 0:26:40.560 --> 0:26:41.879 the best for the United States. 0:26:42.040 --> 0:26:45.840 That's Rome var Geese. We also heard from Bloomberg opinion 0:26:45.880 --> 0:26:47.480 columnists menschene Pai. 0:26:47.680 --> 0:26:50.680 We should not worry very much about what Trump says. 0:26:51.200 --> 0:26:54.240 He keeps saying one thing and then doing another, so 0:26:55.080 --> 0:26:59.760 he's totally unpredictable, and I think most people do not 0:27:00.080 --> 0:27:03.359 eve at the moment in what he says. So the 0:27:03.400 --> 0:27:04.960 market is reacting. 0:27:04.880 --> 0:27:08.199 Rationally well, particularly in an area like that. But I 0:27:08.200 --> 0:27:10.879 think we can believe that he would like to slap 0:27:10.920 --> 0:27:13.080 sixty percent tariffs on China. 0:27:13.119 --> 0:27:15.480 Oh yes, I think so. Trump has this of the 0:27:15.680 --> 0:27:19.680 double sided feature to his policy. On the one hand, 0:27:19.720 --> 0:27:22.520 he's very tough on China in terms of trade, he 0:27:22.560 --> 0:27:26.280 wants to cut China off from the US market. At 0:27:26.320 --> 0:27:29.680 the same time, he does not care that much about 0:27:30.040 --> 0:27:36.000 China's military might, especially where Taiwan is concerned. There are 0:27:36.000 --> 0:27:41.400 inconsistencies in there, because in his heart, Trump really does 0:27:41.440 --> 0:27:45.000 not want to see China strong and powerful, and if 0:27:45.040 --> 0:27:47.760 you see Taiwan to China, then China will become even 0:27:47.760 --> 0:27:50.240 more powerful than it is today. So at the end 0:27:50.280 --> 0:27:53.760 of the day, I think Trump will probably be tougher 0:27:54.000 --> 0:27:56.880 on China where Taiwan is concerned then what. 0:27:56.960 --> 0:28:01.240 He see Bloomberg opinion columnists mention pay for more on this, 0:28:01.440 --> 0:28:05.600 We turn now to Bill Ferries, Bloomberg Senior Editor. So, Bill, 0:28:05.640 --> 0:28:08.560 we wanted to talk a little bit about how countries 0:28:08.680 --> 0:28:11.760 in Asia, and probably more with China, how they might 0:28:11.840 --> 0:28:16.479 be preparing for different outcomes from the US election. We 0:28:16.560 --> 0:28:20.680 sometimes generalize in the differences between the two on policy, 0:28:20.760 --> 0:28:25.400 saying that President Trump really focuses more on trade policy 0:28:25.440 --> 0:28:30.119 and President Biden more on industrial policy. But when looking 0:28:30.160 --> 0:28:33.960 at the differences, how do you think China is seeing it? Well? 0:28:34.040 --> 0:28:37.680 I don't think From China's perspective, they see it as 0:28:37.720 --> 0:28:40.800 a tough election for them either way, regardless of who 0:28:40.840 --> 0:28:44.160 wins in November, there's not a lot of upside for them. 0:28:44.280 --> 0:28:47.560 I mean, as you suggested at the outset, being tough 0:28:47.600 --> 0:28:50.400 on China is one of the very few things that 0:28:50.480 --> 0:28:53.840 has bipartisan support in the United States at this point. 0:28:53.920 --> 0:28:56.920 So you know, China sees that as they'll have to 0:28:56.960 --> 0:29:00.520 take their poison, whether it's a round of new tariffs 0:29:00.920 --> 0:29:04.160 that a President Trump would or says he would enact, 0:29:04.480 --> 0:29:07.240 versus a lot of the trade restrictions. We're already seeing 0:29:07.280 --> 0:29:10.000 the Bided administration ramping up when it comes to high 0:29:10.080 --> 0:29:15.760 technology semiconductor chips and things like that, including support for Taiwan. 0:29:15.920 --> 0:29:18.719 So I think China knows there's still a lot that 0:29:18.720 --> 0:29:21.880 could happen in the next several months before the election, 0:29:22.040 --> 0:29:24.400 and that regardless of who wins, it's going to be 0:29:24.400 --> 0:29:26.200 a bumpy road for them for quite a while. 0:29:26.560 --> 0:29:29.440 Yeah, because if you think about what you highlighted there, 0:29:29.440 --> 0:29:32.920 President Biden using the foreign direct Product rule on chip 0:29:32.960 --> 0:29:37.240 makers doing business in China, that's something that really in 0:29:37.280 --> 0:29:40.760 a sense is almost like the higher tariffs that President 0:29:40.800 --> 0:29:42.120 Trump would put on right. 0:29:42.200 --> 0:29:44.320 You know, it's a real point of leverage that the 0:29:44.440 --> 0:29:47.200 US has with China. Listen, you know, we import a 0:29:47.240 --> 0:29:49.400 lot of goods from China. We found out during the 0:29:49.400 --> 0:29:52.640 pandemic that a lot of the just the basic medical 0:29:52.640 --> 0:29:56.000 goods that we products that we needed to deal with 0:29:56.240 --> 0:30:00.239 the COVID nineteen outbreak were coming in from China. There 0:30:00.280 --> 0:30:05.200 was a lot of reassessment of US vulnerabilities. The access 0:30:05.280 --> 0:30:09.280 to the highest technology gear to make the top line 0:30:09.400 --> 0:30:12.600 chips is something that the US has influence over. It's 0:30:12.640 --> 0:30:15.160 something that China has spent tens of billions of dollars 0:30:15.200 --> 0:30:17.960 trying to recreate and so far hasn't been able to. 0:30:18.160 --> 0:30:21.560 So I think the US, really, regardless of who wins, 0:30:21.640 --> 0:30:25.040 is going to continue to use that leverage over a 0:30:25.120 --> 0:30:28.200 Beijing because it's one real strength that the US has 0:30:28.240 --> 0:30:28.760 at this point. 0:30:29.680 --> 0:30:32.280 Let's talk a little bit about the different approach to 0:30:32.400 --> 0:30:35.720 policy on Taiwan. How do you see the differences there? 0:30:36.640 --> 0:30:39.400 You know, it's fascinating because if you remember back to 0:30:39.600 --> 0:30:44.600 twenty sixteen, when President Trump was first elected, he actually 0:30:44.640 --> 0:30:48.080 took a call from the then Taiwanese president and that 0:30:48.240 --> 0:30:51.520 was seen as a huge breach of diplomatic protocol. It 0:30:51.560 --> 0:30:54.959 never happened again. But you know, I think the latest 0:30:55.000 --> 0:30:58.160 comments we have from the former President Trump in his 0:30:58.400 --> 0:31:02.920 interview with Bloomberg suggests real questions about whether the US 0:31:03.000 --> 0:31:07.880 would come militarily to Taiwan's aid. I think President Trump 0:31:07.960 --> 0:31:12.720 always had a proclivity towards selling weapons to allies or anybody. 0:31:12.760 --> 0:31:15.680 He really talked about that a lot with countries like 0:31:15.720 --> 0:31:19.960 Saudi Arabia and Japan. I think he would be willing 0:31:20.000 --> 0:31:23.760 to continue and even ramp up weapons sales to Taiwan. 0:31:24.200 --> 0:31:27.200 But the idea of sending American troops into harm's way 0:31:27.280 --> 0:31:30.560 if China attacked, that's really been raised into question by 0:31:30.600 --> 0:31:33.960 his latest comments. President Biden, on the other hand, kind 0:31:33.960 --> 0:31:37.040 of broke with decades of a diplomatic protocol in his 0:31:37.120 --> 0:31:40.160 own way when he said that, yes, the US would 0:31:40.200 --> 0:31:43.120 have to come to Taiwan's aid if attacked. So there 0:31:43.200 --> 0:31:45.760 is a big difference there. But I don't think anyone 0:31:45.840 --> 0:31:49.160 really knows how strongly Trump would stick to those doubts 0:31:49.240 --> 0:31:51.360 if he is elected and there was an attack. 0:31:52.040 --> 0:31:54.880 So that really is a good example of the transactional 0:31:55.040 --> 0:31:59.080 versus the ideological differences. President Biden feels very strongly about 0:31:59.320 --> 0:32:02.480 protecting for reasons to go all the way back to 0:32:02.520 --> 0:32:06.000 the Second World War and perhaps even further whereas President 0:32:06.000 --> 0:32:09.840 Trump you know, wants to get paid in the sense 0:32:09.880 --> 0:32:14.040 of offering protections to Taiwan like an insurance policy, he 0:32:14.080 --> 0:32:16.440 believes that as she could pay. If you're a foreign 0:32:16.560 --> 0:32:20.000 leader in Asia, is it easier to deal with a 0:32:20.000 --> 0:32:22.960 transactional person or an ideological person? 0:32:23.200 --> 0:32:25.800 It depends on, like which issues I think you're trying 0:32:25.800 --> 0:32:29.840 to get into. I think the Chinese, you know, a 0:32:29.880 --> 0:32:33.320 lot of foreign leaders will remember Trump as being transactional. 0:32:33.520 --> 0:32:37.200 They will also remember him as being quite unpredictable, and 0:32:37.240 --> 0:32:39.320 so you can try to reach a deal. You can 0:32:39.360 --> 0:32:41.600 think you have a deal, and then a week later 0:32:41.680 --> 0:32:44.240 you can find out that that deal no longer stands. 0:32:44.280 --> 0:32:47.320 So that's something I think people will have memories for. 0:32:47.960 --> 0:32:51.200 On the other hand, if you're facing you know, someone 0:32:51.240 --> 0:32:54.840 like Joe Biden and he's if you don't like the policy, 0:32:55.920 --> 0:32:57.960 you're going to have a much harder time changing that 0:32:58.000 --> 0:33:00.480 policy because I think, you know, Biden has more of 0:33:00.520 --> 0:33:03.840 an ideological focus in terms of you know, when they 0:33:03.920 --> 0:33:06.160 make decisions, they're making them kind of long term, and 0:33:06.160 --> 0:33:07.360 they can be harder to undo. 0:33:08.240 --> 0:33:13.400 Trump is sending a message essentially that you can pay 0:33:13.920 --> 0:33:16.120 to have policy changed. Now we know that there are 0:33:16.120 --> 0:33:21.200 obviously lots of nuances in that for countries that are 0:33:21.240 --> 0:33:25.520 looking at trade and for what might come from President 0:33:25.560 --> 0:33:30.840 Trump versus President Biden. Former President Trump has talked about 0:33:31.400 --> 0:33:35.120 using tariffs even against allies. Do allies in Asia fear that? 0:33:35.640 --> 0:33:37.960 Yeah, I think allies in Asia are concerned. I think 0:33:38.000 --> 0:33:41.200 allies in Europe are concerned, and they all saw some 0:33:41.360 --> 0:33:45.680 of that in the previous administration. Yeah, I think he's 0:33:45.800 --> 0:33:49.680 going to be looking for companies to grant concessions to 0:33:49.720 --> 0:33:51.720 the US. He's going to be looking for companies to 0:33:51.760 --> 0:33:55.000 build factories in the United States. That was something that 0:33:55.520 --> 0:33:57.800 happened in his term. I think it's something that's happened 0:33:57.840 --> 0:34:00.680 in Joe Biden's term as well. You know, you go 0:34:00.760 --> 0:34:03.280 back to twenty twenty one when Biden took office, there 0:34:03.320 --> 0:34:05.840 were a lot of expectations that he would ease some 0:34:05.920 --> 0:34:09.319 of these tariffs on China, and that never happened. He 0:34:09.440 --> 0:34:11.839 kept them in place and then move forward on other 0:34:12.200 --> 0:34:16.640 high technology restrictions. So I think regardless of the country, 0:34:16.640 --> 0:34:20.120 whether you're a close ally or arrival of the United States, 0:34:20.960 --> 0:34:23.920 a President Trump would be very much looking to you 0:34:24.200 --> 0:34:29.040 for transactional diplomacy, looking for deals that, in his mind, 0:34:29.040 --> 0:34:30.680 would help the American consumer. 0:34:30.880 --> 0:34:33.440 Let's talk about a couple of other areas. So if 0:34:33.440 --> 0:34:36.000 we think about President Trump, if he were to win 0:34:36.760 --> 0:34:41.160 with Vladimir Putin and Shijen Ping, who becomes the third wheel. 0:34:41.360 --> 0:34:43.799 I was thinking about it from the standpoint of would 0:34:43.840 --> 0:34:47.000 President Trump be a third wheel with those two because 0:34:47.000 --> 0:34:50.799 they've already declared this very strong relationship. But then I 0:34:50.880 --> 0:34:52.719 was thinking, it's more interesting if you throw the three 0:34:52.719 --> 0:34:55.040 in a hat and say, which are the two that 0:34:55.160 --> 0:34:55.960 get the closest. 0:34:56.200 --> 0:34:56.439 Yeah. 0:34:56.440 --> 0:34:59.480 I mean, you've heard former President Trump saying that if 0:34:59.560 --> 0:35:03.319 he is elected that he will help bring peace to 0:35:03.400 --> 0:35:07.760 the Ukraine conflict even before he takes office, and you've 0:35:07.800 --> 0:35:10.759 seen him draw a, you know, a very harsh line 0:35:10.800 --> 0:35:14.080 on China. You know, he I think he showed a 0:35:14.120 --> 0:35:17.279 lot of comfort in his first term and working with 0:35:17.680 --> 0:35:22.040 leaders like Putin, like she, like the Saudi Crown Prince. 0:35:22.920 --> 0:35:26.080 He does seem to have a proclivity to work with 0:35:26.800 --> 0:35:29.920 these very kind of strong man type leaders who are 0:35:29.960 --> 0:35:32.920 able to make decisions and you know, very quickly in 0:35:32.960 --> 0:35:36.160 their countries because they don't have to deal with some 0:35:36.239 --> 0:35:39.399 of the mess of democracy. He took a harder line 0:35:39.440 --> 0:35:41.920 in many cases against a lot of US allies. So 0:35:42.560 --> 0:35:45.120 you know, whether he would try to strike deals with 0:35:45.160 --> 0:35:49.080 Shi Jinping, I think is a very open question. I mean, 0:35:49.080 --> 0:35:52.880 he started off his administration really trying to work with 0:35:52.960 --> 0:35:56.320 Shi Jinping, but by the end, when the COVID outbreak happened, 0:35:56.600 --> 0:36:00.880 I think the tone changed very quickly. So between those three, 0:36:01.040 --> 0:36:06.279 He's certainly believes that he has influence with people like 0:36:06.360 --> 0:36:09.839 Putin and She, but to the degree he'll be able 0:36:09.880 --> 0:36:12.600 to exercise that would A lot needs to happen for 0:36:12.640 --> 0:36:13.800 that to take place. 0:36:14.080 --> 0:36:17.960 A quick question on the dollar, Former President Trump seems 0:36:18.000 --> 0:36:21.200 to be pining for a weaker dollar, whereas President Biden 0:36:21.280 --> 0:36:23.400 doesn't normally wade into those waters. 0:36:23.840 --> 0:36:27.120 Differences there, Yeah, I mean President Trump in his first 0:36:27.200 --> 0:36:29.799 term was really like someone who, for the first time 0:36:29.800 --> 0:36:32.760 in a generation, talked about the value of a weaker dollar. 0:36:33.080 --> 0:36:36.160 He really saw that as a boon to American exports 0:36:37.160 --> 0:36:40.960 and you know, a way to bolster the economy. Traditionally, 0:36:40.960 --> 0:36:43.960 of course, Treasury secretaries and White Houses have always pushed 0:36:44.000 --> 0:36:47.000 a strong dollar policy. So you know, when you talk 0:36:47.080 --> 0:36:51.439 to economists about the economic policies that President Trump would 0:36:51.520 --> 0:36:56.279 bring about, they see it as very inflationary. He talks about, 0:36:56.360 --> 0:37:00.919 you know, extending his tax cuts, perhaps apps adding more 0:37:01.000 --> 0:37:05.840 tax cuts, but not as much talk on cutting spending side. 0:37:06.160 --> 0:37:09.400 So economists are looking at that as something that would 0:37:09.480 --> 0:37:12.760 have the FED perhaps having to keep rates higher. For Logger, 0:37:13.160 --> 0:37:17.280 that is essentially a stronger dollar policy if the rates 0:37:17.320 --> 0:37:19.160 remain high and the rest of the world is looking 0:37:19.160 --> 0:37:21.520 for cuts. So how he's going to square that circle 0:37:21.800 --> 0:37:23.280 is going to be a difficult one. 0:37:23.360 --> 0:37:26.320 Bill, thanks very much for playing ball with us. Bill Ferries, 0:37:26.360 --> 0:37:30.320 Bloomberg Senior Editor. I'm Brian Curtis in Hong Kong along 0:37:30.320 --> 0:37:33.319 with Doug Krisner. You can catch us every weekday here 0:37:33.360 --> 0:37:36.640 for Bloomberg Daybreak Asia, beginning at eight am in Hong 0:37:36.760 --> 0:37:39.200 Kong and eight pm on Wall Street. 0:37:39.360 --> 0:37:42.080 Tom thank you, Brian, and that does it for this 0:37:42.239 --> 0:37:45.000 edition of Bloomberg day Break Weekend. Join us again Monday 0:37:45.040 --> 0:37:47.280 morning at five am Wall Street time for the latest 0:37:47.360 --> 0:37:49.719 on markets overseas and the news you need to start 0:37:49.760 --> 0:37:53.280 your day. I'm Tom Busby. Stay with us top stories 0:37:53.280 --> 0:37:55.800 and global business headlines coming up right now,