Profits would benefit under that scenario. Tom what is the theoretical justification now for owning such a low coupon . Caroline so this is the big debate, isnt it . Beijing provides stability in portfolios when you do get the downturns, the bonds still act in that manner. With the help of that perspective, in terms of our preferences in the bond space, going to areas where youre getting more yield, so emerging market bonds, for example, where the income is a bit more attractive. Are, theok at where we reset in q4. Is this a moment of drama for you in terms of reset and reallocation, or is it a q4 steady as she goes . Caroline i think it is important to have a continual rebound and seeing portfolios throughout the year on a regular basis as markets move. Whether we are into one quarter or another doesnt matter so much. We have had the peak economic upping if you like from the virus lockdown, so that is quite helpful, but it will fade as we go forward. But our expectation is that we return to growth rather than anything negative. Francine when you look at the move to esg, one of the things that we heard from the Commission President , that there is going to be a lot more funding in european projects for sustainable projects. Takeere investor that can advantage that valuations are quite high at the moment . Caroline we believe sustainability is definitely a very important aspect. We have made up a third of investment choice now. Balancing the portfolio approach. You can look at companies that needers, esg improvers, you can look at what is enabling cummings to look at their actions and take strong stance with them to help them change. There is a lot of different ways to access it. And we believe it is very much a trend that is going to grow over time, and because of the pandemic, they are rebuilding better and i think the funds are being directed toward green type stimulus packages. Francine dividends have been the main way to make money this century in europe. When do you expect them to come back, and will you shun industries that dont go back to dividends . Caroline so dividends will when earnings grow. For us, we forecast that next year. For the u. K. , dividends cut , and we areis year expecting them to grow close to 20 next year. We will get that return but not to the full level. That may take a couple of years. I think it is interesting to have an approach where you have a mixture. So if you are in the tech space, in highgrowth companies with low dividend, we have seen what can happen in those areas when they fall out of favor. The market is very bifurcated in its positioning, and i think it is important to consider some of these value styles and have a bit of a balance in your approach. You caroline simmons, thank so much. We greatly appreciated. With ubs. We are watching the various geographies of the brexit debate. Francine yes, so we heard from the president of the commission, ursula von der leyen. Theyre going to send legal challenges a letter of legal challenges to the u. K. It will not really move right now because we expect u. K. To answer back with an expo nation, but it has had an impact on pound. You see the fragility that any brexit news could impact u. K. Assets. A oneoundsterling off point 2838 low. Thats at a one point at a 1. 283 eight low. We want to give you different perspective on what is called alternative investors, the investors who are all in cash. That is joe. James barry will join us from blackrock. Chief investment that is a joke. James barry will join us from blackrock. Chief investment officer. This is bloomberg. Good morning. Five years ago in silicon valley, you have money pouring in from china, and other places. Things overvalued five years ago should be valued at 8 billion to 10 billion, and i think the great byword is now. Its a huge mystery, and one fascinating to see over the quarters and years. What palantir dies and how they move forward. Contra does and how they move forward. Least. Ersial to say the not controversial is jim barry. He has a sterling career at called infrastructure front of mine. I want to get to the election of the First Quarter of 2021. As the good gentleman from palantir said, money is pouring in. Will that money finally go to a Global Infrastructure build . Jim really good question, tom. Good morning, everybody. I think infrastructure is one of across themost drivesspectrum Economic Activity as we deal with the consequences of the pandemic. Its definitely there and a tool to be used. I would counsel it is hard to implement. That is why it was talked about , but not a lot flowed. There has been learning from governments, but it takes multiple years for privatization of Public Private partnerships. Needs more than policy headlines, it needs implementation. Tom youre way too young to remember this experience, but i remember being on the interstate where dad stopped the car as we went down to a two lane highway somewhere in the vicinity of indiana. It was somewhere near purdue university, cant remember. That was eisenhowers miracle. Wheres the spirit of Dwight David Eisenhower and the democrats to build the stuff . Think therense, i is a spirit around wanting to make grand gestures as it relates to infrastructure, particularly in the u. S. Where the scale of the neato is measured. Interstate is still two lanes given the amount of repair work that has to be done on it every year. Its there at a level, not just democrats but republicans, but we need to get back to implementation. This is tough stuff to do but andhave the right agencies you have to enable them to implement the programs required. Francine how big is the disconnect between fundamentals in the economy and markets . Jim thats a great question, francine. I characterize this internally where is the fundamentalist, where i put myself in, it is dont fight the fed gang. Theres no question the page and response,he monetary the blurring of fiscal and the last six months has inoculated the markets from beyond the scar tissue this pandemic and its consequences are causing. So the tides start to flow out Monetary Policy put a break and thats, but i think the next two quarters, we will see the tension play out. We have been inoculated, but the pain is beginning to creep in, and we see lots of restructurings, unemployment, and more permanent unemployment rather than temporary that we saw through the summer. I think the next two quarters will be telling to see how the tension plays out. Francine jim, are you expecting the next quarters to give us a sense of who will work from home and what that means for real estate . One of the stories tom and i was talking about yesterday with Morgan Stanley, Morgan Stanley looking for new headquarters. Unclear whether this is good news or whether they are downsizing because they are expecting people at home more. Jim apart from the shortterm pressures in real estate in certain sectors like leisure retail leisure, retail, hotels, there are big existential questions to the productivity of space of office buildings. On one side of the case, its absolutely clear we will not have everyone in the office the way they used to be. Thats challenging for corporates. It changed the nature of how we Work Together and the benefits of us working together in the one physical space. But its clear people will want more flexibility and corporations will have to respond to that. Its also clear post pandemic that there will be over arm and space, the gentrification of office space that was a really was really a trend the last few years will end. I dont think that is the end of the office at all. We need to effectively enable companies to establish values and be productive. Tom ive got a good understanding, jim barry, of how laguardia gets done and folks, this is a horrible airport at new york city in new york city. Howhe emerging markets, does this stuff get done . You go into a consortium with people, but what is the catalyst to get into structured in emerging markets . Jim infrastructure. Infrastructure is driven by government policy. Youre looking at governments and their agencies and what program theyre developing. Youre looking for a stable legal context, an environment in which you can do business with no corruption. Then,a problem blomatic francine what will happen to private equity in the next few quarters . Jim private equity is dealing with the challenges of portfolio been certain sectors have hardly hit, but private equity has proven true over the last 30 years as an asset class, and it will do it again. The focus Going Forward will be new investment. Very much looking for the areas of structural growth, fast rivers of opportunity, where i think leverage and playing the levered cycle will be less a driver. Positioning the investments in areas of fundamental growth. Another area is the distressed space. I think we will see a lot of m a, consolidations, restructuring, and a lot of the Public Private coming in the Public Private in the coming quarters. Francine thank you for joining us, jim barry from blackrock. Ritika the president ial display for much will change. The Commission Says it wont nge wont the Trump Campaign says the changes are moving the gulf coast. The next president ial debate is october 15. Joe biden hammered the president on the economy during a trip against the trip through the rust belt. President Trump Campaign in minneapolis. The president signed an executive order expending Domestic Production of rare earth minerals. That may help with voters in minnesota and would reduce dependence on china. American airlines will start laying off workers in the next few days. American plans to lay out 19,000 workers and united will cut 13,000. The eu started legal action against the u. K. Over brexit. They are accusing the u. K. Of breaching the terms of agreement. Its the first step in a process that could end up in a lawsuit at the European Court of justice. Tokyo Stock Exchange halted trading because of a hardware breakdown, the worst ever outage of the exchange. The tokyo change exchange will resume trading on friday. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. Im ritika gupta and this is bloomberg. Francine thank you, riddick up. Coming up, ritika. Ating up, Brian Moynihan 3 00 p. M. In new york and 8 00 p. M. In london. This is bloomberg. Francine this is bloomberg surveillance. Tom and francine from london. Tens of thousand of job cuts announced by Major Companies in 24 hour period show a warning sign for the World Economic recovery. The losses emerge ahead of two reports to show limited progress reports, forecasted to show limited progress. Simon, the numbers are staggering. What does it mean for furlough programs or extra stimulus cuts from governments . Simon this was always good to be the case most likely. What you saw early in the crisis was furlough programs or waves of compensating companies in payrolls. ,ow, as they look to End Companies are starting to cuts, companies that feel the need companies on a hiatus from letting workers go until the crisis had its time. Now, big job cuts, and that is likely to continue in these months as Companies React to a new normal. These jobsimon, are that will be lost forever or as soon as the economy except in a couple quarters, they are jobs that could come back . Simon [inaudible] we will be looking for this hard jobs. Data, whitecollar it often happens in recessions that color jobs go, but these could be whitecollar jobs, middle management jobs, those are much harder to replace in the longerterm. Out, first back in. Many companies will decide. Tom simon, an article stopped and it wast night put out worldwide. I look at this fabulous article, which focuses on the percent of unemployed. You have been doing this for years. How unusual is 8 layoffs . Thats a big layoff. This is a big reaction this is a reaction to a once in a century crisis. A lot of companies will feel their Business Models have changed, lost demand not lost demand but Business Models change for the future. You will see this unemployment thereite a while, but will be a return. As jobs bounceback, we might see payroll report showing permanent scarring. Tom the permanent scarring i guess goes to histories and all that that we talked about. Simon, is this something that gets done at the yearend, or is there ahronic sense chronic sense to this . Simon i think we are here for a while. Haveense that programs ended, temporary job losses are turning her minute in economies around the world. Turning permanent in economies around the world area francine whos getting it right in terms world. Francine whos getting it right in terms of retraining the work orser finding a better structure . Retraining is one of the things governments have to churn out. Thathard to do it in a way light jobs. South korea is an economy where they are trying to work out retraining but finding Job Opportunities for workers in industries of the church, where they problem industries of the future, where they probably wont have that, will need to adapt. Retraining, but in some cases training new skills. Tom with your years of experience, an open question into q4, whats the number one theme you and your team are studying . Whats the q4 mystery for you right now . Simon i think this has been the topic of this conversation. Its whats happening to jobs. Some extent, are wondering about inflation. Thats a debate within the fed, but a debate in time to come. As weve seen with the story on bloomberg by rich miller, looking at the world economy, it did much better than we thought it would do in the third quarter. It bounced back from the low of the recession, was faster than people thought, and now we see signs it will be a grind, rather than a bounce Going Forward. Think that grind will be harder, and an early indicator of that is jobs. Tom simon kennedy, thank you so much, on short notice today, running all our economic coverage at worldwide. I cant stress the importance of the job story last night. And there will be many more stories. 8 30 thisthat morning, including jobs tomorrow. This will be the great focus as we move to the first weekend of q4. This is the conversation of the day. Air is no question about it area mr. Weston with the speaker of the house stimulus in the air. This is bloomberg. Good morning. It doesnt make sense to a lot of people in washington either, including me. Theres no excuse for it. I think the speaker and the treasury secretary continue to continuing to negotiate as we speak. The house where i serve has passed multiple bills, and this week we will pass another one. Providing options, saying we are willing to negotiate, but you have to include support for some people hurting the most. I stayed focus on peoples paychecks and pension. In western pennsylvania, that means a lot and pretty much what Vice President biden has done all along. I dont think there are a lot of swing voters because he has picked up most of them before election day. Tom thats a wonderful snapshot of arguably the most important person in washington for republicans and democrats. Thats conor lamb for our international audience. He stopped traffic in the 2018 election by winning a trump republican district near pittsburgh. Conor lamb with Kevin Cirilli there, prior to the debate. Executive head berated me and said you are going to show that video in the e. M. Bremmer, because it describes attention of the american political experience. Dr. Bremmer joins us now, president of the eurasia group. Its not about Speaker Pelosi or senator mcconnell and the rest, it is about politicians like conor lamb who are trying to win 58 to 48. Explain the importance of those politicians, worldwide, to the leaders struggling to work out of this pandemic. Politics in the United States is incredibly polarized. Theres not much in the middle. Not much in the media, not for public intellectuals, and certainly not for politics right now. Desire for and the those in the media to try to get these people, whenever they can, when things are uncomfortable, when politics are made challenging, it is an impossible position. Tom do you buy the idea that for people like conor lamb, it is about the economy . Theres all these other topics, and you and i could bore everyone with the postdebate analysis and that, but it but is it just about the final analysis . Ian i think coat tails matter. How people vote for the president has incredible down ballot impact in a president ial cycle in for your cycle. Four year cycle. The likelihood that biden ends up winning this, the senates swarm, which will have generational impact on american citizens, israel. Theres probably a majority likelihood if biden wins. No question in my mind that who decides to show up, how many people vote because they are voting for the presidency, will impact how people are doing in congress. Lets be clear, turnout is critical. In this election, it is not just turnout but how many of those ballots end up actually being thosed, opposed to contested. Oft of most of both those things are different. 2022,ifferent than in where turnout will be lower and you dont have president on the ballot. Francine you put out your futures risk report today. How does covid change what happens to populism down the line . Could it spur and make it ugly . Ian the good news is, in europe, because the european ,esponse has been so robust populism is decreasing. I was talking to the greek Prime Minister a couple days ago who describes the redistribution coming from brussels, germany, and the rest, and a Marshall Plan to greece, 80 billion to them over the years. Italians, others feel the same. Euro skeptic and more are roeuro. Uro p in other parts of the world, including here in the United States in developing countries, those handling the crisis well are being perceived it to. The pain is felt on the back of but frequent minority populations. In the United States, black americans thomas vanek americans. In other countries, muslims, the rest, and that makes it a hell of a lot worse in terms of kneejerk populism and antiestablishment sentiment will grow. Tom we are thrilled to bring you this report. Really interesting report on the secondary effects to this horrific pandemic. We are looking forward to giving that to you. Someone already emailed in and said are you doing the new years day soiree with your group, and we are in intense negotiations on who will have the right donuts on that first of january. January show. Printingsone of favorite people, the chief executive offer a chief executive offer. Officer. David is in the want to clock hour. Dow futures up 229. Next, ian bremmer. This is bloomberg. Good morning. Tom this morning, its not the number of firings, it is the percent of firings. Companies worldwide are adapting and adjusting to the pandemic and beyond. Shell says there are too many liars, too many levels of employees. We have claims and updates at Michael Mckee at 8 30 with Michael Mckee. The president of the United States, in direct support of white supremacy. On that stimulus, there is hope. Nancy pelosi david westin at 12 noon today. 12 00, noon today. This is bloomberg surveillance. A special moment as we speak with ian bremmer on the group report. What i love about the report is that it talks about the unknown, unspeakables of this pandemic. The state of our labor fragility and state of our Mental Health conditions, as we