Front. Caroline the question is whatd you miss . Data shows that the u. S. Retail sales rose in september at the fastest pace in three months. Numbers released next week and china are expected to reveal that the nation is on pace to grow this year, with Industrial Production on fire. When you look at the big picture, joe, economic reports confirm that china needs the u. S. And the u. S. Needs china. Their economies are linked handinhand on the industrial and consumption levels. There are many issues between these governments, that we would see. But there is a link between the two economies and it is remarkable. Joe it is pretty striking because so much of the story of the economy, the Global Economy some overproduction in china, it is the opposite. You see this in our charts that Cameron Crise made. Industrialine is recovery of precrisis levels, very impressive. On the consumption side, it is very far below precrisis trends. Chinasuction side of economy is roaring back a lot faster. Caroline and it is almost the opposite when we look at the United States. We see Industrial Production still pretty woeful, a sluggish return in terms of manufacturing , but consumer, on fire. Yes, we still arent precovid, to a certain extent, but we see money continuing to be spent, particularly looking online. The consumer is buying a lot of chinese goods. Joe lets bring in bloomberg chief economist tom orlik. When you look at the different nature of chinese and u. S. Recoveries, the u. S. , more consumption led, china, more industrial lead. Is it the precrisis economy but now on steroids, with all the existing trends fully accelerated . Tom there is certainly that characteristic, joe, but the incern i would have is china, yes, industry has come back first. With the virus under control and the economy operating again and households getting back to work, i would expect consumption has come back in the months ahead. In china, i think we are going to have that retail sales line catching up with that industrial line. In the United States, i am not so confident that things are going to move in the same direction. With fiscal stimulus running out and with the virus still far from under control, it seems at least possible that in china retail sales converting upwards, in the u. S. , potentially, retail sales dont have such a Bright Outlook in the months ahead. Caroline and perhaps they fade to hedge lower towards manufacturing. I am interesting if there are any Lessons Learned from what china has managed to do. Are they in the right place at the right time, they got hit by the virus first, come out of it sooner, and been able to benefit in demand from other parts of the world. It is an industrial based business, economy at the moment more than consumer, or is Something Else at play here . Tom the lesson from chinas experience, and this was also the lesson for korea, japan, and germany, is controlled the virus effectively. That is what all these countries had in common. They had a Strict Lockdown that lasted long enough to crush the curve, and it enabled them to get back to life. The primary difference between china and the United States this year is not so much industrial structure, although that is clearly very important. It is one country has been quite successful in controlling their case count. The other one, unfortunately, has not. Lacktom, you mentioned the of ongoing fiscal stimulus. In the u. S. , the fiscal stimulus, the Unemployment Insurance expansion that expired a few months ago, and the consumption data is still surprising to the upside. Retail sales were better than expected. What explains that and why do keepmists, a, underestimating the strength of the u. S. Consumer and could it perhaps continue to surprise on the upside, even if there is no deal . Of there are a couple things at work, joe, neither of them particularly encouraging. The first is an inequality story. Yes, a lot of people have lost their jobs, but many of those people have been at the bottom of the earnings spectrum. We have also seen unemployment go to very high levels. Household income hasnt fallen that much, and the capacity to consume hasnt dropped that much. That is not a positive for the u. S. Economy. Massive inequality is a serious negative. But it does explain why you can have this disjunction between retail sales going up and unemployment rates high. People have money in their Bank Accounts and they are still able to spend. That is a tailwind, but one that will fade pretty quickly if we dont get additional fiscal stimulus. Caroline that is interesting. From the corporate side, we have been hearing the banks saying yes, the data showing surprisingly resilient consumers spending on credit cards, paying off debt, but they are calling for further fiscal aid. When we look towards this weekend and get chinas gdp figures coming out, tom, will they live up to their lofty expectations . Week,hinas gdp data next we think the chinese recovery is staying on track. The big risk for china after they got their virus under control at home was that they would face a drag from the rest of the world, because of course, even as china gets back to work, it if the rest of the world is contracting, that should be a severe drag on chinas exports. As we have been discussing, with the u. S. Consumer relatively robust, with factories in lots of other parts of the world still closed, and with china at producing medical equipment, pharmaceuticals, the kinds of things that are really needed during a global pandemic, chinas exports have come back very robustly. That potentially will mean another flashpoint in u. S. China relations, may be even more tensions ahead of the november 3 thation, but it does mean chinas gdp great is going to be pretty robust. We have penciled in a 2 expansion for the year as a whole and we expect the Third Quarter data to share the recovery trend continuing. Joe one thing that is really striking is the degree to which the u. S. China trade deficit continues to widen. How much of this is essentially the result of the fact that u. S. Consumers have been limited to the degree they can buy local service at a lot of stores, still shut down, but what they can buy is a lot of stuff at walmart, amazon, and target, much of which comes from china . Tom thats an important factor, joe, and it points to a kind of deep flaw in the approach which the u. S. Administration has taken in its fight with china. The approach has really been all ut attacking time a attacking china, about putting tariffs in place and demanding that china makes changes in the way it improves, protects intellectual property and increases Market Access to the u. S. And other foreign firms. What you really need to do if you want to rebalance the economic relationship is make investments at home, right . You need u. S. Infrastructure, which is modern and efficient. You need investments in education and research and development so that the u. S. Industry can move the Technology Front here forwards and keep hold of its world leading position. The absence of those investments , even as the Trump Administration declared victory in its trade war, as the administration approaches the end of a first term, the trade deficit is getting wider and wider. Caroline great perspective coming from the chief attacks of chief economist at bloomberg economics. Up next, we keep an eye on what Credit Companies do. Moodys downgrading england, and the United Kingdom says to keep an eye on the u. K. Being cut aa2 by moodys. That is now in line with where fitch had them, but one step below where span stan anand paul did. Joe . Up next,cting protecting Technology Vital to the United States acting security. This is bloomberg. Caroline we continue to explore u. S. And china relations, and there is an interesting story that caught our eye in terms of an asset class we do not often talk about, crypto and the ongoing veracity of the asset class and concerns about investigations continue to occur. Breaking news that a key Crypto Exchange in china is currently being investigated by the chinese police, we understand, and it is forcing one of the Worlds LargestBitcoin Trading platforms to block users globally, joe, at the moment, from withdrawing their money. We want to get to the ins and outs, but this is an ongoing issue for crypto as it tries to evolve itself as a key asset class. Joe it is so interesting, because it continues to skirt the legal edges across the world, really, where we continue to see simultaneous crackdowns on various exchanges. At the same time, we have this story of lauren more institutions entering it, a strange moment that two simultaneous things are happening at the same time. I want to bring in the anchorage cofounder and president. Thank you for joining us. Just to start, what is anchorages role in the crypto ecosystem . For having me. Anchorage is the regulated Digital Asset platform. What we do is allow institutions to have the services and the infrastructure that they need to in this asset class. When i talk about services, i am talking about trading to lending to borrowing, any other kind of issue. Ain type repeated we have seen crackdowns on Crypto Trading and being downgraded and digital currency. In the u. S. , are they able to keep an eye on the registry a bit without having to crack down, or they are managing to draw more institutional money money inample , for example. Diego the occ release muchneeded letters that provided regulatory clarity and nationalanks banks can and cant do with the Digital Assets. There are letters like that that will help the registries mature. We now know that they cannot provide Banking Services to crypto businesses and can also participate in certain activities related to stable currency. Thats all good news. Joe one of the things we have seen as a couple companies this year keep their treasury stock, their money in bitcoin specifically, microstrategy, which is already pretty in tune to bitcoin, buying 50 million worth. How much do you anticipate that being a source of institutional demand, as opposed to Asset Managers wanting to have a strategic allocation . Diego what we are seeing at anchorage is all of those be true. Investors are looking at this asset class as a diversification in their portfolio. We are looking at, like you mentioned, publicly traded companies that are putting hundreds of millions of dollars on their treasury balance sheet, and they say it is for capital preservation. Not wanting to have dollars on their Balance Sheets because of the nature of the currency. We are also seeing institutions wanting to do a securitization on the blockchain. We saw a several institution launching funds on the blockchain, we saw sec registered ipos from funds, we see a lot of these different types of interests and seen a lot of interests from central banks, Digital Currencies, companies wanting to issue their own Digital Currencies it is not just one thing or one type of institution. Ab three years ago, there were a lot of more capital firms and crypto funds that were interested in coming to the space, but we are seeing all types of institutions really seeing the value all in their own way. Caroline to what extent . Paul tudor jones opened up what many felt would be a wave of new money coming in, talking about putting a percent or so of the wealth into things like crypto. Do we see more paul tutor jones . Do we see more of that extent of Asset Allocation yet . What more needs to be built to draw that level of comfort in . Argumentwould make the that the institutions are already here. I hear the narrative that the institutions are coming. If you think about it, the type of companies surrounding initiatives like this, visa publicly showed their roadmap and how interested they are, investing deeply in this asset class. S bysaw announcement b mastercard, square, all of these companies coming in with their own plays, including the Chinese Government claiming they are going to do their own digital currency. The institutions are already here. The idea that something needs to be there for them to calm, anchorage has been part of that for the past three years. We have provided qualified digitalns, custody of assets for something that is very hard to do, and it was nowhere near done three years ago, but there are Good Solutions on the market. The problems are in liquidity and regular clarity. They have been solved in the meantime, or more clarity has been given. There is no one barrier standing in the way, and every single new any new company or large, known player coming into the market is going to help us push a little bit further. Obviously, one of the fundamental problems with Holding Bitcoin or any other cryptocurrency is that you lose your string of numbers, you lose your wallet, you lose your card, you lose it all. You could outsource it to a thirdparty company, but they could get hacked or loose things, and this has happened hacks,s times, exchange etc. How do you make the case to others that the solution you have solved the problem in a way that other custodial solutions or hacked together systems restoring crypto is safer and compliant and easier . Cell. It is a very simple anchorage was created for the sole purpose of allowing investors to safely invest in this asset class. From the beginning, our background is in cryptography, security, these times of Digital Assets that are very hard to protect. We focused on eliminating the human risk, the potential collusion elements, the potential loss. We have seen a lot of issues and exchanges. That is natural. It is natural that there are so many exchanges out there, some of them that build their own custody to custody solutions, it is why they make mistakes. This is why we see a lot of clients coming to anchorage, to have one institution that is going to protect them against this loss, that is insured, that does not have any single point of failure. No human can withdraw assets out to anchorage platform for their organizations. It is continuity, insurance, regulation, security, and we have built a sophisticated platform that has billions of dollars in assets in custody and provide our services to hundreds of clients. Aine and the pretty competitive space as well. That anchorage is part of the libra association, but they pulled out, visa pulled out, mastercard pulled out, ebay is trying. I will say that libra is in a very healthy state. The backgrounds of libra are still in our major companies, and they have the influence that we need this to have. In particular, what we need in the space is user adoption. Players like facebook have the ability of changing dramatically the adoption of this asset class. So do players like shop if i who joined the association. The quality of the software being built is worldclass and legal, and it is not just projects like libra. I would say that visa showed their interest into space, ofardless of not being part the libra association. It demonstrates that the large players are here to stay, and visa is also one of our investors, full disclosure, so we are wary very familiar with what they are doing and proud to collaborate in the space. Monaco, ceo and for cofounder and president of anchorage. Have a safe and healthy weekend. Caroline to wrap up the week, we are focused on u. S. China relations. Some economic, but also the political aspects. Tensionseen mounting between the countries involving Tech Companies like while way, huawei, bytedance, and tencent. Perhaps exports from these very companies. Lets get over to tom giles. This is a titfortat here. China comes back, basically taking on the u. S. And its own form of regulation. Tom it is almost like holding up a mirror to the bands and the restrictions the u. S. Has placed on china so far. A newosed restrictions or classification of restriction, and suddenly we see something similar, something reciprocal from china. Now we see this new basically, it is china giving itself more leeway, more freedom to oppose limits on the export of key technology. As you point out, caroline, there is a huge trade war between the two countries. You know, theres all kinds of rationale for it. China and the u. S. Will talk about how they dont want trade secrets to be stolen. They are worried about national security. Ultimately, both countries want to have privacy. They want to have leadership in key technologys. In certain areas like chip manufacturing, and they also have an exam dig an advantage in certain areas. Aspects of 5g, artificial intelligence. People give up their data much more readily in china than they do here. Joe the joe thing with tiktok the thing with tiktok, people are blown away by its algorithms. Machine learning, ai, they are way ahead. Tom it is a huge population, 1. 4 billion, of people who dont have the same kinds of hangups that europeans and americans do about privacy. To state does have access massive troves of data that china uses to log into recommendation algorithms. Facial recognition. These are areas china does have an advantage, and they want to keep that advantage. To run. , we have sorry we didnt have more time. Tom giles, thinks for joining us on what did you miss. Caroline this is bloomberg. Emily im emily chang in denver disco and this is bloomberg technology. With the president ial election just days away, the stakes getting higher. The campaigns getting louder on social media. We will talk strategy on the candidates, and even algorithms with someone who has been there, done that. At a time when Campaign Fundraisers would be flooding u. S. Cities, what is the future