♪ francine: seeing red, blustery as it were stay in months, s&p plunging. fears of a second rate -- wave, a new lockdown, and current devices -- coronavirus case is getting out of hand. steven mnuchin says they cannot shut the economy down again. a difficult week for the prime minister amid mounting criticism over his handling of the crisis. good morning and welcome to bloomberg surveillance.

i'm francine lacqua. the focus is on the markets. there was the rally we talked about, now a bit of a correction. certainly it started in the u.s. if you look at u.s. futures, they are gaining. european stocks are pretty much flat. there are much more concerns, which led to the selloff about the second wave of infections, but also the prospect of a protracted american recovery that seems to be easing treasuries. the other things i wanted to show you, because there is u.k.-e.u. negotiations on brexit, but also the u.k. economy shrinking a record 20.4% in april as businesses and workers reeled under lockdown. you can see pound 126.1 he five. 126.125.ave experts -- will have expert data analysis. here's dani burger. dani: the global economy is recovering slower thanvw expectd and will bear lingering scars

from the coronavirus pandemic. that's according to the international monetary fund. the imf is set to release its growth projections june 24 and they are likely to be worse than the 3% contraction it predicted in april. the u.k. economy shrank a record 20% in april, as businesses reeled under the coronavirus lockdown. the contraction follows a 6% drop in march. the figures come in a difficult week for the prime minister. he is under pressure to reopen the economy quickly while facing criticism for his handling of the crisis. houston may be approaching the precipice of disaster. that's according to a senior local official. the city is close to re-imposing stay-at-home orders as the number of virus cases spreads. the warnings highlight the danger of a second wave of infections the on the initial hots -- beyond the initial hotspots. wave,f there is a second

the u.s. can't shut down again. that's according to steve mnuchin, speaking on cnbc. he said chattering again could cause more damage. but also, he says it won't be necessary. testing and contact tracing are improving and officials have a better understanding of how to contain an outbreak. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm dani burger. this is bloomberg. francine? francine: thank you so much. u.s. stocks seeing their worst selloff since march and yesterday session, almost $2 trillion erased from equities. what drove the switch in sentiment? >> it was a classic risk off day. >> we shouldn't be surprised by a reprieve after a the rise. >> the fact that we are seeing ebbs and flows shouldn't come as a surprise. >> today, we got statistics about infection rates that

caused real concern. >> the conversation has shifted from this economic reopening to is there a second wave? >> on top of what we heard from jay powell, really changed the mood. >> it is obviously attributable to sobering comments out of the fed. >> chair powell put a dose of cold water on it. >> we got lulled into complacency on the virus. >>:h we are taking a step back and i wouldn't necessarily think that this is a sign of panic either. >> this is the reckoning we are waiting for and we waited a long time. joining us now, michaela. thank you for joining us. when you look at what we are

left with, how worried are you that it is going to take much longer than previously expected for thiswó÷ coverage to take h? michaela: i think will be look at the current situation, we look at the policy response in being two phases. the first has been about shoring up the economy and liquidity and ensuring that furloughed workers and people who have become unemployed are supported through various means. now we are getting to that more critical point where we need to shift to policy stimulus to actually support the recovery phase. we have seen a number of economies come out with those policy packages. viviana: we saw measures coming out of germany. i think over the summer, we are going to see more on the policy front. that is really going to be critical coming into 2021 on the

slope of the recovery. but i think most economists, including myself, expect this to be quite a slow recovery. we have to remember that many of the losses that we have incurred have been transformed into debt on other public balance sheets, private balance sheets, and even though we are on a low ratio -- low balance sheet environment, we won't be able to balance that and that will be the critical debate as we come into 2021. francine: there's a number of institutions that basically have forecasts for the economy, worst-case economy forecast in case there was a second lockdown. is this just because institutions are being cautious or because the second lockdown, given what we know about the rate of infections, is quite likely? michala: so, i think it's very, very difficult to predict the health crisis.

i'm an economist and certainly not a medical expert, but i think what is quite interesting is we see that as we have learned from this experience, and we see that here in france, there's really a strategy today in terms of tracing and alsoifying, testing, and as we know in france, we are in ared to wear face masks number of public buildings and workplaces and public transport. so there is clearly an effort to say that if we can change our behaviors, perhaps that can help to contain the virus. thinghere's the second that is important. in terms of the health sector capacity, it will be very to -- important to see what will happen in terms of medical process -- progress in the coming months and quarters. it's not just about developing a vaccine, the are some of these treatments being explored

sufficiently efficient, that the consequences of catching coronavirus could become less severe? and i think those developments are going to become important. i would expect, at least what i am reading from various medical news flows, that over the coming somes, we'll have at least better perspectives on how we can understand these treatments and the prospects for a vaccine coming into next year. and that, to my mind, is really the critical thing to watch. these new methodologies prove efficient, hope is that we can indeed avoid a second lockdown of the same severity as we saw the first time around. nonetheless, i think it's important to keep in mind that if people are concerned about catching coronavirus, this has a very big impact on behaviors in terms of going and enjoying

restaurants, going after cinemas and theaters, traveling and tourism. so even if we don't have a second lockdown, per se, if the concern on the virus re-intensifies. people's behaviors could simply respond accordingly. so that would give us a very slow recovery. francine: thank you so much. michala stays with us. coming up, a record plunge. the economy shrinks 20% in april. asll talk about the outlook businesses start reopening. this is bloomberg. ♪

francine: economic, finance,

politics, this is bloomberg surveillance. i'm francine lacqua. what's get to the bloomberg business flash with dani burger. dani: lion air, easyjet have launched action against the quarantine rules. they threatened the move against rules that say international arrivals have to isolate for two weeks. the airlines think it will further damage an already struggling travel industry. grubhubnds is suing over the cancellation of a five year deal from kfc and taco bell. grubhub declared the deal invalid, citing yum working with rival delivery platforms. they say customers will pay more. this comes after they agreed to by grubhub. renault is exacting ferocious petition in electric cars, that warning from the automakers chairman. there is a flood of chinese models coming to the continent

into a market that is increasingly crowded. there comes as europe's manufacturers roll out more e-cards in the midst of a deep slump brought on by the coronavirus. and that's the bloomberg business flash. francine? francine: thank you so much. the u.k. economy shrank just over 20% under the virus lockdown in april, more than analysts had expected. it follows a nearly 6% drop in march, more than 18 years of growth. they are news, planning for border checks next year. the move will happen whether a trade deal is agreed or not. it is an intent to soften the blow to businesses struggling with the impacts of coronavirus. , still with us michala. u.k., it isk at the an extraordinary number. is an economy that can pick up quickly? or because of the kind of lockdown that it's had, it's

much more up in the air what economy we'll be left with in two to three years? michala: i think if we look at the u.k. today, the severe drop in april was very much to be expected, given the extent of the lockdown. critical now is, as we discussed earlier, the ability to avoid a second wave of coronavirus, and also the speed at which consumers feel comfortable and confident coming back to various activities. that will determine the near-term path. looking further out, of course it's a policy response that becomes absolutely critical. also in the case of the u.k., there's a looming issue of brexit. personally, i believe brexit will mark a headwind to the u.k. economy and i've had a long-standing view that brexit will take about have two a full point off trend potential growth off the u.k. economy. in terms of short-term implications of a harder brexit,

which is a concern at the moment, clearly the initiatives around the border could soften some of that blow. but i think the longer-term reality is it's going to be a structural headwind for the u.k. economy, and with the economy dealing like everyone else with the follow-up of the coronavirus crisis, it does raise a number of concerns. francine: when you look at your forecast, are they with a deal, in terms of brexit between the u.k. and e.u.? or is this with no deal brexit? michala: what we've been factoring in is a view that there would be some kind of compromise. but it was already quite clear that some of the better brexit deals have already been excluded by the u.k. government and by the position taken, so we built not ther forecast,

worst case deal, but some kind of sensible deal. but it's clearly not the same trading relationship that the u.k. previously enjoyed with europe. of at's really the idea more difficult trading relationship moving forward in terms of the conditions around it. and i think also, when we look to their medium-term, there's a risk of drifting further apart. francine: when you look at central banks around the world, how much more will they have to do to make sure there's not the specter of deflation taking hold? michala: so, i think clearly the coronavirus shock is a deflationary shock by construct. but as we look further out, one of the things we need to be aware of is how different trading arrangements, how different tax arrangements, and how different social arrangements evolve. if we imagine we're in a world

that becomes more protectionist, more reassuring of the supply chains, potentially also carbon border taxes, there is actually a risk, longer-term, that we could see some higher inflation, but not necessarily for the good reasons that we'd like inflation to be tracking higher. in view of the size of the deflationary shock, i'm not worried about inflation anytime in the near term and i think central banks will continue to provide ample liquidity support. the key point to my mind is that central banks alone, and central banks tell us this, we had a clear head from powell at the meeting last week. we heard this from lagarde. we heard it from all the central bankers. there needs to be more done on the policy front. what is really critical, in terms of fiscal policy response, we need short-term stimulus to lift demand, long-term focus on investment structural growth.

and i'm talking about green transitions. francine: thank you for joining us. coming up, we talk about the imf and world growth. this is bloomberg. ♪

francine: this is bloomberg surveillance. i'm francine lacqua in london. as u.s. cities protest police brutality, democrats on capitol hill introduced a bill to make it easier to prosecute and sue

law enforcement officers. nancy pelosi spoke exquisitely with bloomberg. >> so much stronger as we work in a bipartisan way. recognition there has to be some change. i leave that up to our distinguished chair of the congressional black caucus as well as the chair of the committee of the judiciary committee working with jerry nadler. i will leave it up to them to have their interactions with in the house, as well as in the senate, and hopefully with the white house. we do have an issue that relates to qualified immunity doctrine that protects some police officers found to be engaged in misconduct from any, shall we

say, exposure from families that are affected or lawsuits. so that is one area that is perhaps an area where we'll have some differences. but hopefully on the others, we will not and we would be able to find common ground. amerco people deserve that. american people expect it. american people are watching. american people are watching. we want to show you. we see you. we've learned. we know how important this is to you and we're going to do something about it. that was the question i was asked by george floyd's brother when he came to testify before the judiciary committee in the capitol. he said i have one question for you. will this become law? what makes you think so? what is different now? well, different is the complete public awareness of the injustice of it all and the complete public outcry for change.

>> any of us who have seen the video, not just of george floyd, but also other instances of police misconduct, know that there are some police that we really have to correct. we have to get rid of them. we have to mend their behavior. at the same time, the vast majority or doing the best job to their ability. how difficult is it to police the police, but not be seen as undermining them and being anti-police? >> well, i think that most of the police officers who are conducting themselves in a way that could be viewed publicly as a responsible do not want to be painted with a brush of some bad apples that might be there in the mix. and so, again, policing the police is a responsibility that they have. but also, i think that we have to recognize there's some racism that has to be addressed in our society, as well as within our law enforcement community.

and when we can rid ourselves of that, we'll go a long way to having justice in our policing. >> are the police unions a help or a hindrance in the form of -- reform of policing? >> i had a conversation with the president of one of the police unions, and they put out a veryh positive statement about our legislation. we didn't know what they might say, but it was very, shall we say, open to what we were proposing, ready to have the discussion. and again, as you say, overwhelmingly, police officers are there to protect us. i think they see their role as guardians, not lawyers, and we just have to hope for the best in that regard and invite them to the table so they can be part of the discussion. some places, it's different. some places, some of the union officials have been very, shall

we say, more than -- more protected than they need to be of bad conduct. we have to make those distinctions. francine: that was nancy pelosi, speaker of the u.s. house of representatives speaking to david westin. coming up, next steps up. marking the end of slavery in the u.s. a paid day off. we look at corporate responses to the protests. that's coming up shortly. this is bloomberg. ♪ you say that customers make their own rules.

let's talk data. only xfinity mobile lets you switch up your wireless data whenever. i accept! 5g - everybody's talking about it. how do i get it? everyone gets 5g with our new data options at no extra cost. that's good. next item - corner offices for everyone. just have to make more corners in this building. chad? your wireless your rules. only with xfinity mobile.

now that's simple easy awesome. switch and save up to $400 a year on your wireless bill. plus get $200 off a new samsung galaxy s20 ultra. francine: economics, finance, politics. this is "bloomberg surveillance ." let's get to first word news with dani burger.

dani: the global economy is recovering more slowly than expected and will bear lingering scars from the coronavirus pandemic. that is according to the international. the imf is set to release the latest growth projections on june 24, and they are likely to be worse than the three consent -- 3% contraction predicted in april. used and may be approaching the precipice of disaster according to a senior local official. be approaching the precipice of disaster according to a senior local official. the warning warns of a second wave of infections that go beyond the initial hotspot. the u.k. is planning to áintroduce soft border text with the e.u., deal or no deal. the measure is temporary in an effort to avoid hitting businesses already suffering due to the pandemic. boris johnson is set to hold a call with ursula

von der leyen on monday. west texas crude is headed for the worst -- the first weekly loss since april on fears that a second wave of virus infections impair a fragile recovery. markets shrugged off a pledge by opec and its allies to extend output cuts. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, dani burger. this is bloomberg. francine? francine: thank you so much. nike has told employees that june 19 will become a paid holiday. the date, also known as juneteenth, marks the end of slavery in the u.s. employeesoe said appear to disconnect -- had a disconnect.

aboutng out publicly black lives matter, a #that grew into a movement. it has become resurgent on the streets following the deaths of african-americans at the hands of police. it began in 2013 when a neighborhood watch volunteer in florida shot and killed trayvon mar bó'. while the shooter was acquitted in california, an activist in california wrote that, "our lives matter." #blackturned into the lives matter. protests in ferguson and new york were followed by demonstrations in other cities. black lives matter has no formal agenda. protesters just want to reduce police brutality. jennifer, our is quicktake reporter. thank you for joining us. i know you have done some work on what the movement is. what kind of corporate response to the black lives matter

movement have we seen? consumers dohink not just want to hear from them, they want to take action and support the black community. spoke with a designer that started an initiative for big companies like target and tostrom to -- and nordstrom purchase black owned brands. the first sheet parted with is the flora, owned by lvmh, which is calling for others to step up to the plate. we are also seeing it with media companies like netflix and hbo. amazon is also taking separate action. and fitness companies like crossfit. earlier this week the ceo resigned after a controversial tweet. companies are starting to get the hint that consumers want to hear and -- to see and hear from them that they are behind them

in this movement. francine: how quickly can some of these changes actually take hold? much time will we have to wait? sephora saying that they will give 15% of shelf space to business owners that were severely underrepresented. how long do we have to wait for that to happen? jennifer: the designer i spoke with told me she is already having conversations with sephora, regular conversations, and they are hoping in the next few weeks it is not just a one-time thing. be aare hoping for it to long-standing relationship where they are holding the company accountable for what it is that they are doing, making sure internally they're looking at the vendors they are working with and supporting the black community. she is really committed to holding this company accountable and seeing these changes implemented at sephora and also seeing other companies like shop bought and whole foods do the same and address the issues they

have with their company. francine: what about policing in america and calls for defunding the police? jennifer: defunding the police is something we probably will be talking about until well into november, the election. people want to see money reallocated into the communities taken away from the police department. we have seen some reform happen in the past few days. cities like new york city, minneapolis, houston band chokehold. in -- they bed no knock warrants in one place, which -- they band no-knock warrants in one place. we are going to hear this going into november. we are going to hear president former vice president talking about it. francine: thank you so much for joining us this morning. she is our quicktake reporter in

new york. make sure you catch our what georgeecial, floyd's death highlighted about police and racism. coming up, u.s. futures point to --ck games -- not games stock gains. we will point to equities next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." let's get to the bloomberg business flash with dani burger. dani: hi, francine. judge to takeg a advantage of a surgeon it's got

-- in its stock. her testing a two-week rally, especially retail investors are adding on -- are poised for rebound. a hearing is scheduled to today to consider the idea. to deactivate pro -- the coveney shutdown meetings to commemorate the military crackdown in tiananmen square, but going forward it says it will not allow requests from beijing to impact anyone outside mainland china. the secretive big data firm plans to file to go public in the coming weeks. bloomberg has learned the company could start trading as early as the fall. the less time private -- the last time private investors valued palantir is when they said it was worth $20 billion last year. ourcine: let's get back to

top story stocks. it selloff in march. futures higher this money. john, thank you so much for joining us. when you look at what is priced in right now, if a second wave or a second lockdown -- is a second wave or second lockdown priced in, or is there just concerned about what is going on around the world? ? john: i don't think there is any great surprise that you see markets taking a pause. there is not really any one single catalyst. i think there are a few things that have come together here. first and foremost, the question mark is whether we get a pickup in cases in some states in the u.s. and what that might mean. fed come inthe dovish in many regards, but i think that there outlook is

reflecting an economy which is going to be in recession this year, and only really beginning to come out when we see the year on year data through next year. what that suggests is the outlook, although it is dovish against a weak economic backdrop, i would argue here and now that what we are seeing is markets taking a bit of a pause after a strong run. but technically within the market, the level of participation and the degree to which investors are having cash on their balance sheet, suggests to me that this is a pause rather than a reversal of trend. are you expecting markets -- i know it is difficult to see market movements but this is a question on our markets blog. are we going to see an extra correction, john? magnitudeve of this in the s&p 500 is not that common. typically what you see when you get a sharp move, futures will

point to something of a rebound thereafter. run, has thet market entered a point where it needs more of a catalyst? that is certainly arguable, but in terms of the undermined -- the underlying fundamentals -- in the pros column, what you have is massive financial stimulus, and the fed adding to that this week. towere waiting for them deliver, they did deliver, and they have left themselves some optionality over yield curve -- ratesver -- or over are going to be at zero over the next three years, and that means very supportive financial conditions. high-frequency data are bottoming, picking up. we continue to expect that over the near term. we see evidence from places like china, asia, that there is pent-up demand, and as economies

begin to unlock, we will see a pickup in terms of consumer behavior. on the negative column, still concern!v over devastating unemployment levels, which will take some time to come down. and of course the uncertainty over the second wave of the virus. coming argue right now up to earnings season -- let's not forget there are a ton of catalysts coming up in july. we would expect to see some evidence of companies beginning to look forward, and perhaps something reflecting in the data, such as purchasing manager indices, etc. francine: when you look at interest rates near zero for the next three years, with what you expect in the u.s., will they stave off inflationary pressures? john: i think one thing we have to remember, we have to characterize this cycle compared to the last one. in the last cycle we saw fiscal and monetary stimulus operating in opposing directions. as a result, what we saw was

something of a crimping of demand. austerity measures are running through time. governments are 180 degrees opposite to that this time around. there has been massive fiscal stimulus. in the fullness of time, that demand stimulus is likely to meet some level of facing inflation. get what the fed came out with , the consumer% price expectations over the course of this year rising to 1.5 next year, 1.7 the year after. -- wed themselves expect will see it through the deflationary impact in the recession. the real interest rate will be profoundly negative for some time to come. i think that is something which markets will eventually have to reflect upon, so interest rates and inflation i think -- interest rates level, but

inflation will actually pick up as we emerge from this contraction phase. francine: where do you see the most value in the markets right now? john: well, i think one of the things that we have to recognize, if we look at markets, is that if we believe that we are seeing the rebasing and rebound incidents of activity, what -- notwithstanding the shocking data from april and u.k. -- it is now june and we are looking wherere pmi take us, retail sales, where earnings take us. we expect we will enter a recovery in the latter half of this year and into 2021. we would expect to see some of the more cyclical markets respond. i'll are has been weakening for most of the past few weeks. we saw a report yesterday, and we expect that trend to resist. that favors emerging markets. what the ecb has done in the past few weeks, together with the commission, is a significant

step forward. this is probably the most comprehensive step forward we have seen going back to the financial crisis. this is a significant underpinning for recesses in europe. those cyclical markets, having the potential to play catch-up, equity markets continuing to perform, we would argue that is the place to begin to look as the economy starts to look forward and price off the next hichzgrñzóoñcóiytcke economy to begin to recover. much,ne: thank you so john bilton from j.p. morgan asset management. coming up, significantly scarred thehe imf warns that economy is recovering less quick than expected. this is bloomberg. ♪

francine: economics, finance,

politics. this is "bloomberg surveillance ." the imf says the global economy is recovering more slowly than expected from the coronavirus pandemic. the chief economist said it will bear lingering scars from the experience. >> given the depth of this crisis, given the need for becausetion of labor some sectors were hit in a big bankruptcy and insolvency issues coming up, and the prospect of changes in consumer behavior, one has to be quite concerned about the path of recovery and many point to significant scarring. us, john still with bilton from j.p. morgan asset management. when you look at areas across the world, the u.s., europe, some of the emerging economies

of south america, africa, and asia, where do you see the most value? john: i think what we've got to look at is the early part of any recovery tends to -- part of every economy washes through. we have a natural cadence to this taking place. we were led by asia, which was the first in an first out of the pandemic. europe is putting in some fairly strong showing, as we are seeing good news emerge. the questionhink is on the second wave, the question is over whether the çsu.s. equity market can contine to be led by quality growth in companies like technology are going to be there. it would be unusual for the u.s. not to offer some upside. where is the value here? i think seeing where there economies are on a path to recovery and where we see new information in terms of policy

support, where there is room to continue to do that, that is where i think value will come through. the nature of any contraction sets the path for what the subsequent recovery looks like, and the recovery over the next expansion phase, which may last several years -- we have to absorb and think about fiscal partnership with monetary. the fact that europe has begun moving in that direction with the commission, with the ecb, suggests that what has been a very lengthy period of european underperformance may begin to reverse. equally dollar weaker, as we --e through as sickler cyclical economies get a bit of a boost. don't fight the fed. always think about where we have central-bank support. there are elements of the credit market which are likely to be continued to be supported, and that thinking is going to help tqp)lier.

francine: do you worry about when some of this unwinding will happen, or is it such a long way off that we should not even talk about it right now? john: i think it is something that we will have to think about as we characterize what the long-term looks like. of course, we do publish regularly 10, 15 year numbers in the long-term capital market assumption framework. we have to think about what policymakers will be doing. we now know the path of rates will be much flatter coming out of this recession than it might've been historically. that is something we have been taught by the fed. but we equally know that government spending fiscal bars are going to be a much bigger part going forward. the big question as we come out of this phase -- and it is probably too early to say who the winners and losers might be -- how much fiscal dollars in fiscal euros will work, where they are invested in adding future economic gains, whether

it be in technology, etc., that technically aching have a positive multiplier on the economy. -- it can have a positive multiplier on the economy. if they are invested in debt with appropriately, the question over managing the debt loaded associated with them becomes less of a factor than if they are sent the spent or propping up -- if they are simply spent or propping up the economy in the short run. fiscal or monetary policy operating in tandem is one of the things that make me optimistic, that markets will point to as they continue to see risk assets perform over the near to medium term. francine: is there a concern that in certain european countries, because of the ecb is there and doing its part in terms of the structural reform, won't come into play because the markets are not filling their role of keeping the countries in

check? always morals hazard associated with any efficient intervention, and that is something we learn. at the same time, we have checks and balances in place. one of the things that the commission and the european union in general is doing is looking how to impose and check up on those moral hazards. let's look at history. let's look at the facts. there were intensive structural reforms in a number of countries, and we have seen some movement toward that. there is a certain pace that is palatable for the population at large. aptitude forted austerity, for trimming back the budget at the time that we had genousaustion is -- exo shock. i think that is something that is widely recognized. as anating this

economically born crisis would be wide at the market, but it is clear as we go forward come as the ecb and the european commission respond, particularly the first respondents to the economy, once we have gone past the triage stage, we will need to look at how we manage that moral hazard. i would feel comfortable that the ecb and the commission have those kind of tools in place. francine: thank you so much, from j.p. morgan asset management. this is what i am looking at across the board. european stocks are pretty much flat. "bloomberg surveillance" contains -- continues in the next hour. tom keene joins me out of new york. ♪

francine: seeing red, wall street has its worst day and months. the s&p plunges nearly 6%. futures are higher this morning.

fears of a second wave. houston weighs a new lockdown as the city says coronavirus cases are getting out of hand. treasury secretary steven mnuchin argues the u.s. can't shut the economy again. and freefall -- the u.k. economy shrinks a record 20% in april, rounding out a difficult week for the prime minister amid mounting criticism over his handling of the crisis. good morning, everyone, and "bloomberg surveillance." this is "bloomberg surveillance." i'm francine lacqua, here in london. tom keene in new york. there is focusñr on what we sawn the markets the last couple of days. juckes, i did kit the same thing he did in his morning note. i did a fibonacci analysis of what we saw yesterday. that is too much mathematics or friday. all you need to know is it was ugly and we have a very nice bounce to