Carol Massar, Jason, Bloomberg discussed on Face the Nation


And I'm Carol Massar welcome to the weekend edition of Bloomberg business week Jason what a week and it really contain so much volatility on so many different fronts with you look at politics with you look to the financial markets and what do you look at the global economy and we're gonna get into all of that over the next couple hours we're gonna talk about the coronavirus continuing to spread and investors trying to size up government efforts and corporate efforts honestly to contain the outbreak and its economic and business impact right to the top some of our top editors of the magazine to look at the markets look at the economy to see their assessment at this point also on the corporate front Barnes and noble man the next chapter the new here of the chain's rags to riches tale it is hedge funds didn't see that coming plus this week's cover story what a timely when it's a sit down with the N. E. C. director Larry Kudlow maybe you know him from television yeah he's become the optimist in chief in this administration there's a big question about whether an optimist we'll make the right call when it comes to economic policies all right first we begin with the roller coaster that was those global markets this past week and former vice president Joe Biden's campaign continuing to rise as super Tuesday reignited his race for the White House that's the story in the magazine this week by Josh green this week national correspondent joining us right now from DC and Josh what a week super Tuesday a bit of a surprise and then we had several candidates dropping out obviously the big news this week was that the front runner in the democratic race went for Bernie Sanders who looked like he might be prepared to run away with it too Joe Biden who looks like he might have be decisively edging out Bernie Sanders so quite a week everything turned upside down I think the real story is that nine Sanders moderate voters finally at the very last minute coalesced around a candidate that was Joe Biden I think that makes him the front runner but as I write in this is week this week he now faces a new and familiar problem a lot of democratic strategists are worried about and that is that he's back in the role Hillary Clinton was four years ago where you have an establishment favorite you have Bernie Sanders is an insurgent and it's hard to see how Democrats managed to unify the party all right and we also saw Elizabeth Warren and Mike Bloomberg dropping out Mike Bloomberg of course the founder and majority owner of Bloomberg LP he endorsed Joe Biden let's look ahead to these next contest here Josh because there's still a lot of delegates out there and some pretty important states just over the next couple weeks yeah that's right and I think I think the importance of Bloomberg and warned dropping out is that we now have affected Lee a two man race and as you look ahead it looks to me like the states we have coming up tend to favor Joe Biden the one I'm going to be looking at is Michigan Michigan was the scene of a surprise upset four years ago with Bernie Sanders came in B. Hillary Clinton because a lot of excitement a belief among center folks it maybe they actually could knock her off that didn't end up happening since super Tuesday the polls that I've seen from Michigan show Biden ahead so we're really re running a test case that we saw four years ago the turns out that Biden wins in Michigan especially if he wins big I think that might be the last blow for Bernie Sanders does screen thank you so much well super Tuesday's results and the coronavirus dominated conversations this week about financial markets and the economy US Congress agreeing to an emergency spending bill after the fed jumped in with an emergency half a percentage point rate cut that was meant to calm investors and ease financial market conditions wound we see how that went it was a volatile week to say the least let's bring in markets editor Mike Ragan an economics and appear quite to make sense of it all so let's start with that rate cut you know Peter it reminded me you know all about the financial crisis we have an emergency rate cut by the fed since then right at the fan attempted to calm the markets I mean the problem is that the fed can do only so much when you have something like this it's not primarily a financial market issue would see issue with real bodies and real viruses and it affects the real economy so production it affects the supply side of the economy not just the demand side economies when is the man's side you can sort of goose up people's spending by making money cheaper but what is surprising when goods aren't being produced because people can't get to work that's something that monetary policy is not as good at solving right and so is that why in the market just sort of wasn't buying it Mike well I think the one thing you have to realize when you look at a week like this in markets is that once you introduce that sort of volatility in the market when you have that steep of a drop over such a short time it tends to create both up and downward volatility in other words a big move down one day and then a big move back up the the next day then backed down and the example I I've been using a lot is the two thousand eleven episode when the U. S. lost its triple a credit rating you saw these massive three four percent moves up one day back down the next say back up you know and it's it goes to you know let's talk about how old computerized the equity market has become and how traders in those sort of algorithmic programs are really reacting to signals in the market and they're very good at pattern recognition they know when you see a big drop like this that there's bound to be a balance Sokol last so it all sort of creates a situation where a lot of money is on one side of the boat one day the other side of the boat the next day and back and forth and I think that given all the other news flow sort of cause and you know it's a one way or the other that issue that really explains that the suddenness and the massiveness of the back and forth movements if it does say that folks are saying the market was overvalued equity market they were looking for excuse to sell having said that I think Peter court they're two different stories being told the bond market was telling one story prior to like even the concerns about the buyer's equity markets as they kept going higher and higher we're telling another one and then this week we have what the ten year go below one percent and that's a significant move the ten year yield going below one percent we're starting to feel like you're up here no Europe has had negative rates nominal rates and now the U. S. is coming down towards the zero lower on even after ten years and what this means is that there's not much room left for the fed to act right it's already spent a lot of this ammunition because the fed unlike the ECB and the bank of Japan has kind of been pretty clear that it doesn't intend ever to let the nominal rates at either the short end of a long and.

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