Pandemic. Some of the pandemic statistics. N case dynamics jonathan this has been remarkable in the case of talks down ndc totally stolen down in d. C. Totally stalling. Lisa totally agree. Going forward today, we get a read on the economy in the United States. 8 30 a. M. , Producer Price index data. Very interesting to see the divergence between Inflation Expectations among futures traders versus the absolute bond yields, which keep falling. Secretary mike pompeo speaking at an event in the czech republic. We are interested in anything he has to say about china. Three year treasuries are going to be auctioned off. The actual deficit is so unclear because that fiscal support package is missing in action right now. Jonathan lets get to the price action. Equities futures are higher. In foreign exchange, the euro stronger. 1. 1787, up 0. 4 . We break 60 basis points on the 10 year to 0. 6 . I will be the one to ask the first stupid question of the morning. Do supply matter does supply matter . This administration cut taxes back in late 2017 with a 10 year at 2. 50 . Here we are adding tons of debt with a 10 year at 60 basis points. Tom this is an important conversation and at least a three hour chat. Maybe we can do that later on. In the previous hour made clear hes concerned about this. Look at the real yield come in. We had a grim negative real yield. It absolutely crushes gold. That culminated where i went from aaas leveraged allcash. From went from aaas leveraged went from tripleleveraged allcash. Jonathan lets bring in tony crescenzi, pimm co. Tony crescenzi, pimco portfolio manager. Does that supply matter this week . Ask whenple always will things blow up. I wrote a book about this, the idea of a keynesian endpoint. We reached the keynesian endpoint almost a decade ago. To find another balance sheet. Of course, that was the imf, the ecb, and the rest of europe. Japans. , europe and havent been able to engage in transformative activities, which is to say infrastructure or investing in people and things. Instead, moneys have gone mostly towards consumption. Think of the most recent stimulus plan. Is there any major project being created in America Today to help the future . Now. Tom i think no. Tom i think you are dead on. Maybe we could see a change in that in the next year. Tony in europe, theres a little bit of that. Tom i will give them some credit on that. We need a tunnel to staten island. Thats what we need. [laughter] tony instead weve got the 56yearold bridge that links brooklyn to staten island. Jonathan this got derailed quickly. Tom the show is falling apart at light speed here. [laughter] i want to ask you a Lisa Abramowicz question, which is really important. I have never cared about treasury supply, full facing credit supply. Yet now i really have to, dont i . Tony maybe, but remember, the World Population is aging. What do we do as we age . We move up in the capital structure. Theres a lot of money that still flows into bonds despite the low yields because people want to protect their savings. Let me give you summer reading, three books real quick that would describe the Current Situation. Lets go back to hundred 50 years, theback 250 wealth of nations. Theres always a need to bridge the Current Situation with the future. Saidwealth of nations that people will go out and try to do better for themselves and build the wealth of nations. Then lets go back 150 years, 150ar street, liquidity mbard street, liquidity. Book about the idea of uncertainties being so large that people disengage sometimes. Lately, that was the case. In march, the uncertainty was radical. Now it is a little less radical, so the dissipation of radical uncertain is helping rockets. Liquidity, confidence, and a reduction in radical uncertain he is what is driving market supply. Now, butt matter right it probably will matter more in the long end with the pivot point of the yield curve. Lisa tom did read the wealth of nations, and went out and bought jewelry. You are saying that the european plan to possibly invest in infrastructure is superior to what we are seeing in the u. S. , where we are continuing to gridlock, and yet investors have piled into the story. Do you think it has gone too far based on the fact that they dont have the tech names to support this in the new era . Tony great point. When you think about investing over the next five years, and which equity market to invest in, you probably want to think away from europe and toward the u. S. And asia. About 30 of the 750 billion euros in france alone recently approve will go towards green projects. A lot of those projects, lets say electric vehicle charging stations, will use and the sames sectors that would grow for the next five years. It is not going to be the place where money flows, and it will help the euro over time. It will keep it from bailing more than it otherwise would money will flow elsewhere. Great point. Jonathan the high issuance we saw, 40 of it priced with the high yield 4 or less. ,he issue that we had yesterday is that even high yield . [laughter] lisa for everyone who doesnt know what we are talking about tom i dont know what we are talking about. Lisa there was a junk rated company that sold a bond with a coupon just north of 2 . Is that right . 2. 85 my belief so come on 10year notes. The idea that it was the lowest ever coupon on a highyield bond. Jonathan and they make aluminum packaging. Huge demand for it right now. I am trying to understand. What is highyield anymore . Tony of course, it is all relative, but highyield is anything below bbb rated. Ratednd 2009, bbb securities, 99. Id percent of them got their money back 99. 5 of them got their money back. Investors are willing to take , generallycause they speaking, will get their money back. But one has to be very screwed nest now. Theres been a lot of debt issuance. Tom talked about at issuance by the treasury, but theres also been lots of Corporate Bonds outstanding. Havetress in 2008 and 2020 a common thread. They both ended chaotically , these the system intermediary isnt playing the role that it traditionally plays , partly because of regulations, partly because of changed business models. Be careful because most cycles are going to probably end chaotically, so investors want to have a little more liquidity and more resilience in their portfolio. Jonathan great to catch up as always. Good to see you. Tom, did you ever think we would sit here and say that, a highyield bond with an issue of 2. 85 . Tom no. I remember lovely and it would ease at 7 lovely annuities at 7 , 8 , even 9 . Theres this phrase financial repression. Some of the distortions you get are a highyield bond, whatever you call it, under 3 . It is absolutely bizarre. On a mathematical basis, it is outright frightening. Jonathan all the more remarkable to see that issue in the last 24 hours. Coming up on the program, we will talk about the economy with the wonderful diane swonk, Grant Thorton chief economist. Coming into the session today within 1 of record highs, and on a seven day winning streak. Outside of the u. S. And europe, thats where the big gains are. The dax up by 2. 7 . From new york this morning, good morning. This is bloomberg surveillance. Ritika with the first word news, im ritika gupta. President trump says he is seriously considering a Capital Gains tax cut. He told reporters it would create a lot more jobs. The president cant cut taxes on his own, but some advisors say he could issue an executive order that adjusts the original price of an asset when it is sold, so no tax is paid on appreciation for inflation. The Trump Administration were ridley may prevent citizens from returning to the u. S. Temporarily if theres a chance they have the coronavirus. According to the new york times, the ban would apply to permanent residence, too. , the police chief has resigned after the city Council Voted to eliminate 100 officers and cut the department budget. It is the latest move by a local fundingnt to cut police over the killings of black people. The police chief warned that it would hurt public safety. With jobs of britons declined by 220,000 when the coronavirus lockdown instructions were most severe lockdown restrictions were most severe. The government will start gradually withdrawing support for wages darting this month. A judge has ordered uber and lyft to convert their california drivers from contractors to employees with benefits. Both Companies Plan to appeal. Reclassifying the drivers could force the companies to pay overtime and health care benefits. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. On capitol hill have stalled. From new york, this is bloomberg surveillance. Alongside tom keene and Lisa Abramowicz, im jonathan ferro. Your equity market shaping up as follows this tuesday morning. Equity futures up 20 on the s p. Can we make it eight straight day of gains on the s p, currently the longest daily winning streak going back to late 2017 . All about dollar weakness through g10. The euro is firmer. The only currency the dollar is doing better against is the japanese yen. That speaks to the Risk Appetite improving. 1. 1791. Dollar at tom in the silence of washington is kevin cirilli, our chief washington correspondent. Without question yesterday, the moment for me was mark zandi of moodys framing out a 10 Unemployment Rate is actually 14 . Has a longg, axios dissertation, the granularity of food kitchens around this nation. They are talking about the pandemic depression, and we have radio silence. How will it be broken . Hown i think in terms of the markets have reacted during the past couple of months, contrasted with what you just laid out for the middle class and the lower middle class in this country, are two incredibly different worlds, to say the least. From washingtons perspective inside the beltway, it is two very different ideological camps that dont see any incentive for compromise. Compromise right now is not something that would be celebrated amongst various contingencies of the parties. Yesterday when i was speaking with sources, not only are they at a stalemate, but it continues to come to this notion of whether or not there is really any calculation to have their be some type of fraud, sweeping some type of broad, sweeping deal. Where is the gang of eight . Where are the gangs to be thrown into a room and look at a compromise . They just does not seem to be an incentive to do so. Tom everyone is talking about the wonderful Washington Post article on mr. Meadows. Is the president tilting to mark meadows, or secretary mnuchin . Kevin it is a good question. I think both of them have the ofsidents ear, but in terms understanding the capitol hill dynamics, mark does is obviously mark meadows is obviously a former congressman, one of the founders of the freedom caucus. But in terms of those republicans have an opportunity to really negotiate with speaker pelosi, they are the minority party, so they are not really voice is rather, their just not able to be as loud in those negotiations. However, he does bring with him expensive legislative experience. As for secretary mnuchin, hes always been seen much more as a middleman when it comes to dealing with the democrats. He is someone, based upon my who has a working relationship with speaker pelosi. Jonathan have used if you speak to anyone from the wall street crew, they will tell you the same thing. 1. 5 trillion deal gets done a digitally gets done eventually. Is anyone talking about the prospect of no deal . Kevin no. Inside the beltway, it has been how, inle to see just the zeitgeist, there is sort of of thiscess coverage fiscal fight, but in terms of the broader trend, at the end of the day there is stimulus that is needed. Wall street has baked that into their expectations. The business community, manufacturing community, pharmaceutical committee, tourism, teachers, everyone is really on the same page of some type of more relief. Lets not forget, republicans are talking significantly less than what democrats want, but it is still 1 trillion, which before all of this, was still a hefty chunk of change. Lisa you said mark meadows represents the ultra conservative of the republik and party. How does wing feel about President Trumps proposal to cut the Capital Gains tax, given the fact that that would also add to the deficits in the the deficit significantly . Kevin not good, but they also understand in terms of where the president is headed right now. He was dealt this economic situation, and i think the deficit hawk in the deficit fight is going to be had november 4 for republicans. Estimates, at the these senators and lawmakers, they are reading the same economic reports that wall street is reading. If you look at the latest estimates of growth for 2021, and the excitation of a vaccine, they understand that more stimulus is needed. Kevin dan quayle. Mike pence. Really. Are we going to get a really on the vp picks . Kevin we are really going to have to wait and see. If there is anything come of the Biden Campaign if theres anything, the Biden Campaign wants us to have excitement and diversity, and they want to contrast that with the incumbent candidate. I am told by sources on the president s Reelection Campaign they have been looking to define whomever to defy whomever biden picks. We are on full vp watch this week aroundtheclock. Jonathan kevin has got to sleep in the building. Hes not allowed to leave the camera until that headline dropped. He cant laugh because he knows its true. Great to catch up with you, sir. Do we need to come up with a new definition for a fiscal hawk . We are calling these people fiscal conservatives. Theyve got a 1 trillion deal on the table. With theew up conservatives and the hawks of another time and place. Always negotiated, always found a middle ground, and there were some real arguments along the way. This is totally different. This is the teachers of the tea party, the House Freedom committee. This is a completely different tone that centers around my way or the highway. Toathan i think it is fair say if fiscal conservatism in 2020 is a 1 trillion bill, then the fiscal hawks lost to the argument. We need to get a little bit real about that. Governor cuomo yesterday, handing the drowning man an anchor. That is what he said about the president over the weekend. Pretty much every governor said something similar. This is the current addled, the president the current battle, the president versus the states. Tom i cannot express the anecdotal slowdown. Jonathan we dont see it in the equity market. In the s p 500, we advanced by 0. 6 . Up next on the program, Diane Thornton cheap economist Grant Thornton chief economist. This is bloomberg. Jonathan Risk Appetite looking good this morning. Good morning. Alongside tom keene and Lisa Abramowicz, im jonathan ferro. This is bloomberg surveillance , live on bloomberg tv and radio. Heres your price action this tuesday morning. For equities, its seven Straight Days of gains on the , up 0. 6 . The s p 500 the dollar weaker against the bulk of g10, including the euro. 1. 1792. Ar at yields just a little bit higher, up three basis points at 0. 6 . Risk appetite is good. Compare and contrast that to the economy. How many times have we look at that situation, where markets are looking ok and the economy is still looking shaky . Tom absolutely. We are seeing it in Great Britain today, and across america as well. September will be fascinating. Chicago is not interested in september. Right now they are interested in august 11. It has been a challenging summer for chicago. We are thrilled to bring you there economist. Diane swonk joins us from Grant Thornton. Thank you so much for coming on today. It is shocking to have the family i have from chicago, to have the grandfather that was in that room at the back of the art institute, that trading room theyve got stuck in the back corner, to see this chicago in such disarray. Is it just about the slowing and collapsing economy . Diane well, theres a lot of issues going on, and it is really devastating to see what is happening to michigan avenue. Clearly people are out of work, they have a lot of time, and the gangs are warring with each other. Theres also the looting because the drug business has dried up over the border, which is all bad on all sides. Hard to see, very this devastation to the city. We hope we can make it through it. This is getting harder and harder. Tom depolarization of this is seen in washington. The polarization of this is seen in washington. What would be your message to the Federal Reserve of chicago, to the politicians in washington . Diane i think it would be the same as charlie evans, the leader of the chicago fed. This is now lifeanddeath. We are talking about a lapse in benefits that is already triggering Food Insecurity, homelessness, and it is not going to be repaired anytime soon. The governors, both republican and democrat, say they cannot do what the president has offered. They need to get back to the table and in a deal done, and every minute that goes by is compounding the losses. You can maybe get a loan to make up for the fact that you are if you are a business, you can maybe get a loan to make up for the fact that you are deferring revenue, but if you are family, we are talking about Food Insecurity and homelessness the likes of which we have not seen since the great depression. Jonathan this is the disparity but nice the aggregate figures asperity the disparity , andth the topline figures he focused on the topline. Think we can maintain the latter given what is happening with the former . Diane the dissidents is getting to be deafening between the financial markets, main street and wall street ritika one thing and wall street. We are talking about an economy where you are shuttering a lot of businesses. At least 500,000 businesses have shut down permanently in the u. S. That taking away of dynamism, consolidation in a few small businesses, not only undermines the innovation of the was economy entrepreneurship, but the job generating ability on the other side. It is really notable that we have had trouble getting out of even the most mild recessions since the 1990s with job generation. The 1991 recovery was called the jobless recovery. Coming out of the great recession, a lot of people thought we would get a big ounce. We didnt because we did not do transfers to state and local governments. Weve not learned our lesson, and washington needs to get back to the table if they want to get out of what is now metastasizing to a much more vicious cycle, not just temporary covid related losses. Jonathan the white house believes we can have a vshaped recovery. I am wondering from your perspective whether we are closer to a w, given the direction of travel at the moment. Diane we are closer to a w, although we are talking about one quarter of positives. If we just hold at the new levels in retail sales and consumer spending, then we will have a very strong third order. Thats kind of a false narrative because that is really plateauing and not showing any momentum over the summer. We can actually lose some momentum in august and september given the lapse in 18 billion a week consumers were getting in terms of enhanced unemployment spending insupport the u. S. Economy. As we go into the fourth order, when youve got halloween, the secondlargest holiday of the year, no football season, these College Towns really scraping by, having to come back, which could really foment the increase in virus spread, you could very easily dip back into the negative until a vaccine is available. We have seen other countries be able to manage their virus so that their economy can reopen. Manage the virus, get the economy going. The health of our population really is the driver of the health of the economy. Lisa theres been a shift in narrative from this recession can be really short, deep but short, to this is a typical recession. It is going to be very difficult to get back to the normal, precovid level of employment. The level isys probably closer to 14 unemployment. Do you agree, and how long do you think it will take to get back to normalized levels . Diane it is really hard because it is dependent on whether or not congress will just fill the creating. E we need at least 1. 5 trillion without stimulus on the other this. If we get 1. 5 trillion dollars with the delays we have seen, we wont get out of this on a level of Economic Activity until mid2022. That is a long time, and it is not the snapback many hoped for. That is with some catchup in 2021 as we try to come back online, but we are really undermining our ability, our potential to grow on the others of this. Iceberg. The for us not to be the titanic, we need lifeboats with supplies in the water to divert much deeper waters than anyone expected for longer because we did not manage the virus itself. Lisa theres increasing fear among people that they will see wages cuts or their jobs cut. I am wondering, in the united kingdom, we saw data this morning that showed wage deflation for the First Time Since records began in 2001. Are we going to see wage deflation in the United States in any meaningful way . Diane thats a great question. Some of that is because the people who are employed are not actually employed, and being paid part of their income. So it is a bit of a statistical residual because of the unemployment in the u. K. But it is very important to understand that employees saw a wage cut at the onset of this crisis. Never see that before. People thought it was temporary. They cut white collar wages in order to preserve their jobs, to not lose their people, after coming off 3. 5 unemployment. What is becoming clear is that we will likely see a repeat of wage cuts and unpaid leaves as we come into the hall. Weve already seen several firms start to call for that. That could further suppress wages in a way that we dont usually see in a recession. That sticky wage theory gets thrown out in a covid recession, and this is metastasizing. I think it is also important to lossesat high wage in employment are now approaching those of the great recession. Tom this is extremely important, as you mentioned, the labor tumbled in the country the labor tumult in the country. Everyone in the country has to read upton sinclair, the jungle. Are we going back to the jungle, this atomize asian of our labor economy were this atomization of our labor economy where we have the haves and the havenots . Diane unfortunately, we are already there. What covid revealed was the inequalities that existed in the u. S. Economy in an extraordinary way, and then exacerbated those any oddities. The idea that weve got families that cant feed their children for a week right now in the United States because of a health crisis, this is now metastasizing into a humanitarian crisis, and taking on a different kind of nature of a selffeeding negative cycle that we dont have to do. The reason it is worthwhile to go through these downside scenarios is you can see how you could stop it from happening. There are still ways we could mitigate the spread of covid, especially as we open up students thatlder are highly contagious, we can mitigate that. We need a nationwide testing effort area we need the testing funding that would be in the national 1 trillion plus plan by congress. Both sides agreed on that. I dont understand why we cant move forward on testing. We are still chasing a moving target in that. There are ways that we could escape this becoming a worse situation, but first we need to act today. Really, yesterday. The clock has already run out for too many people. We need to get those lifeboats out there to help the economy, but i think it is really important to note that this is not where we want to go, and we have a choice. Jonathan really lucky to have you on the show with us this morning. Diane swonk, Grant Thornton chief economist. Lucky to have lisa back with us as well. That 3. 9 unemployment statistic is the most artificial number probably in the history of the labor market. Tom why is that . Jonathan because what we have in the u. K. Is a Furlough Program that has accounted for almost 9 billion people. The government has paid about 80 of their wages. It expires in october. If you are on that program, you are classified as employed. You wont show up in that statistic. What the u. K. Faces at the back end of this year could be real trouble. And theprogram expires, chancellor has basically suggested it will come of that is when we see those numbers move more aggressively and away we dont want them to. What it emphasizes and highlights is how important a fiscal response has been throughout all of this to support the labor market and support consumption. And i never seen dont consider diane swonk to be political but ive never seen socalled conservative economists so on the same page with socalled liberal economists over the need for stimulus soonest. Jonathan it makes it all the more remarkable that we cant strike a deal on capitol hill. From new york city this morning, good morning. , oliver wyman partner dana penn mom partner daniel tennenbaum. This is bloomberg. Ritika joe biden has finished interviewing all ep candidates. He promised us spring that he would pick a woman to be his running mate. Russia says the country has come up with a vaccine that offers a lasting immunity. Putin says one of his daughters has been inoculated. However, the russian vaccine was registered before phase three trials. President trump told americans their retirement accounts are doing fantastically. The data shows he is mostly right. According to fidelity investments, the average 401 k balance in the second quarter. The average balance is for a little more than 104,000. 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 ritika gupta. This is bloomberg. What we dont need is anything destabilizing between now and january. Jonathan john labor of Eurasia Group commenting on the situation between the United States and china, and reading between the lines there, saying wait to see if President Trump has to leave the white house and former vp joe biden walks in. Tom i dont know where this is coming, but we got huge news flow out of china. Huge news flow as well out of europe. You wonder whether the wonder where the sanctioned debate has gone. With the bidentrump debate, there is the game theory, the game of chicken on what is next, and it wraps around sanctions. Daniel tennenbaum is arguably the best guy in the country on sanctions. Hes now at oliver wyman as partner. You know the minutia of this up, down and sideways. When you see that senator rubio and senator cruz have sanctions, translate what that actually means. I think it is important to note that senator rubio and senator cruz have had sanctions levied on them twice in the last result ofterday as a their involvement in the hong kong debate, but also from the response to last months sanctions of certain people in shin jen province on the in angn jang in xinji province on the treatment of uighurs. Theyve already sanctioned them. Sanctions dont actually have a meaning or any sort of definition in china at the moment. Jonathan how close are we to needing to choose between maintaining presence in china were maintaining presence in the United States . Daniel i think hong kong is where you are seeing that line drawn. Right now, if you look at Financial Institutions, global banks that operate in hong kong and the u. S. , especially with the sanctions levied against carrie lam and the others in the Hong Kong Government friday by the u. S. , banks have already begun rejecting transactions related to those 11 designated persons. For the moment, banks are choosing the u. S. Over china until china give them reason not to. That flies in the face of the Hong Kong Monetary authority saying that those sanctions have no legal right to be enforced in hong kong. You are seeing global banks ignore that and still follow the u. S. Jonathan what this underlines is the power of the u. S. Dollar, and that is the power the United States has right now. As a Financial Institution have any other choice than to listen to what the United States has to say over and above communist party would ultimately like . Daniel i think banks are still going to follow the u. S. Until china give them a reason not to. There is an argument that could be made that compliance in hong kong would be a violation of the newly passed National Security law. Again, the u. S. Is the de facto standard banks will follow until they have reason not to. This is very much in line with how the u. S. And eu have faced off with respect to iran. Theres been antieu restrictions for years, but they have never been enforced, so banks follow the u. S. What the bleed through effect is going to be on u. S. Banks on wall street, given the fact that u. S. Banks use we chat in china doing business. They have been expanding in china. This affects the way they try to have an international presence. How much pushback are you hearing from wall street, from some of your clients to some of these proposals . Daniel i think theres a lot of hope that some dealers reached. I think theres two bigger issues that come off the back of the focus on the social media messaging apps. One, why would foreign businesses want to come and set companies innology the u. S. For fear of what could happen to their businesses . It also poses a risk to u. S. Companies operating in china, where the rivers could happen to them, but i do think the market is hopeful that some degree of a detente is reached, and these apps will be able to continue to function. Tom what would be your advice to the president . It is a massive tit for tat game of chicken. You have been doing this for years. You did it at treasury. You have been cited by the fbi for your work. What is the advice for the president to break the game of chicken . Daniel cant we all just get along . But how can we find a productive way to negotiate with china . Theres no disputing that some of the actions of the Trump Administration on china were long overdue. It is just back to the how they are doing this. I do think if you can go back to the manner with which similar discussions have been held, like the phase i trade deal negotiations, you would probably have a much more productive outcome, especially since you are seeing china take somewhat more measured responses to the actions by the Trump Administration. Tom from where you sit, is china delaying, waiting for a biden presidency . Daniel its unclear what china is waiting for. I do think theres a certain unpredictability and how this administration has handled china. Certainly in the last month alone, we have seen a fairly significant escalation and how the u. S. Is approaching china. Whether they are waiting the u. S. Out or to get them back to the table to have more productive discussions is really unclear at this point. Jonathan dan 10 about dan tannebaum, great to catch up with you. Virtually poring over progress of the phase one trade deal. Given whats happened over the last couple of months, can you believe that that is still intact and has a broken down . Tom exactly, that it hasnt broken down is maybe more accurate. On the show, one of our esteemed guests saying it is over for hong kong. I am mentally not there yet, but certainly that is the mood out there. I just wonder how consultants like dan pick up the pieces for multinationals as they decide what to do forward, not only with hong kong come about what to do with china. Tom whether they want to can jonathan whether they want to continue expanding into the mainland. So far, they do. Lisa i am very curious to see what comes out of these phase one trade assessments on saturday area really interesting to see how much the economic push really presides as the most important point here. In the past, it has meant that the u. S. And china are both prioritizing their economies. President trumps tactic hasnt seemed to indicate that he is taking a similar approach, and that is raising a lot of uncertainty. Jonathan can you define what progress is when they meet and talk over the weekend for a phase i agreement . Lisa it means that you dont have escalation coming out of that. If you have at least conciliatory rhetoric on both sides, that would be some sort of progress in coming to some sort of agreement, but i dont know. President trump saying the situation has changed, china trying to take a conciliatory approach to wait it out for the next president. Jonathan it is pretty clear that the Chinese Communist party has not reached those targets they agreed to hit on agricultural purchases. So does the United States sit there and say we are sticking with deal . Tom i dont even think the trade negotiations are feasible right now. Between taiwan and hong kong, it has been overcome by other events. Jonathan i would agree. Coming up on this program, we will catch up with northwestern mutual. Good morning to you all. This is bloomberg. Ive never heard fed officials a sickly bag for fiscal policy the way they are beg officials basically for fiscal policy the way they are now. To question is, are we headed towards a cliff . I think we are in the midst of a slowmoving policy mistake. Hong kong is for all intents and purposes now part of mainland china. This is bloomberg surveillance with tom keene, jonathan ferro, and Lisa Abramowicz. Tom good morning, everyone. Welcome to bloomberg surveillance. We welcome all of you across this nation on bloombergio