caroline: from bloomberg's world headquarters in new york, i am caroline hyde. weaker, u.s. stocks u.k. pound stronger. volatility picking up as investors assess the health of the global economy. caroline: all that red on the screen in terms of stocks. it reflects the u.s. stimulus stalemate. from u.s.ay reprieve politics is our monday gift for

you. instead, new zealand, where prime minister jacinda entered won a victory.ern bolivia.lso discuss brexit?we not dig into the latest effort to restart trade negotiations as the government is hit by worsening pictures. covid is something that all these companies are having to face. brexit at the same time, this is a painful issue. joe: did i hear you right? did you say brexit is still going on? i will be making that joke for years to come. it never gets old. of course, the ramifications are

not insignificant. this comes at a precarious time. you see here different possibilities for the trajectory of the economy. that white line is estimated gdp growth out several years in the event of a no deal brexit. the stakes are pretty high along with everything else going on to get some sort of trade agreement, exit deal with european union. romaine: there are sort of broader ramifications here. that is why, today, we are focusing a little bit broader about the issues going on around the globe. joe: joining us with more, john authers. thank you for joining us. for those tuning in who cannot believe like myself that this is still going on, what is key to understand about the state of the negotiations?

>> i disagree with you. this topic has got very, very, very old. we have another hard deadline coming at the end of december. forrest johnson is trying to get everybody to believe that he is really prepared to walk away and , whichno deal settlement would mean ultimately moving to the wto terms, very basic tariff terms, as of december 31. judging by this very muted response by sterling, you can basically tell that no one in the markets believes him. caroline: the slow march continues. no one believing that he is going to be playing this game of chicken quite as hard as he hopes the europeans will be thinking. returningth ireland to a lockdown. he is trying to navigate this

ongoing political disaster at the same time that he has the covid disaster. john: i would add an international dimension. he is probably in more trouble over covid at the moment. he is in a lot of trouble with his own party and in a lot of trouble in exactly the northern seats that labor picked up last year. traditionally labor voting seats and now the ones that are being asked to shut down and complaining about it. you might have heard that there is an election in the u.s. and if the polls are right, we will have joe biden as the next president, who is of course of irish extraction and who has made it known very plainly that if anything happens to the good friday agreement, there will not be a u.s.-u.k. trade deal. version ofs no

brexit for the u.k. that does not have a good deal with the u.s. can work out well for the for, and no no deal brexit the eu can preserve the good friday agreement. i think this is another point that europeans cs suggesting that boris johnson is playing a weak hand. using twitter to announce his proposed policy position, something that at least for him is rare. i am also curious about how beer world leaders may reacting to this and how much stock they are putting into what boris johnson says. thebviously, he is doing standard approach when you are playing a game of chicken. classic james dean movie when two guys are going toward the end of a cliff.

cancan -- the more you commit yourself, the more the other side will believe you are serious. he is trying to make himself look as committed as possible. obviously, the more time he , the less of a deal they can come up with. that is what he is trying to do readinghave just been commentaries on this and various european papers. he is basically trying to play chicken. it is true that european countries stand to lose quite a lot from this, with the exception of ireland, which obviously for geographic reasons, it's trade with the u.k. is hugely important. stand to lose a lot less than britain does.

joe: you anticipated where i was going to go with my next question. they by far the most anxious about the risk of a no deal brexit and could other countries more or less live with it? most countries in the eu could live with it. belgium, they have a fairly significant share. other than belgium and the netherlands, it is the much smaller nations of the eu. anda, the czech republic slovakia, would be the only other ones that actually have as hit to gdp- as a 2% as a result of the hit to trade with the u.k. so most european countries could

absorb it, with the exception of one or two. particularly the nations of ireland and malta that have very clear, strong connections to the u.k., plus netherlands and belgium. so none of the really big, powerful nations within the eu stand to lose anything like as much. romaine: bloomberg opinion columnist john authers giving us that update. we are going to go from there all the way into the south pacific and continue this topic on what is going on in new zealand. the prime minister pulled out a victory but of course now the real work for her second term is about to start. we will discuss the challenges ahead for that country. that is coming up next. this is bloomberg. ♪

romaine: today, we are focused on the political situation outside the u.s. one of the bigger political situations of the year is what has been happening over in new zealand. of course, the way that they handled the coronavirus outbreak at the offset one them some plaudits. joe: think if there is one country that is probably identified with taking an extremely aggressive and ultimately effective approach to the virus, it is new zealand. you can see it with the case count in new zealand versus the u.s. i have a chart here showing the total number of cases per

million people in both countries. basically, there is almost none in new zealand relative to the u.s. caroline: i got stuck there, very happily so, during march, april, may of this year. i was supposed to be traveling with my family. suddenly, the borders went up. it is amazing how much this country focused on shutting down its economy. the longer-term implication, they have shut down their borders. they want zero covid. what does that mean for an economy so focused on tourism in the long-term? joe: thank you so much for joining us. obviously, the prime minister of new zealand having won a huge electoral victory over the weekend. how much was this race

specifically about the successful repression of the virus versus other things that don't get as much attention? >> i think it was about the successful suppression of the virus. there were other issues bubbling up before. new zealand has pretty high inequality, housing crisis, other economic challenges that ardern had not done a great job of addressing. mostly due to her strategy. new zealand is not a system where you win congressional districts. it is a mixed member system. her victory is staggering, like if you won 70% of the seats in the house of representatives. romaine: some of the people running against certainly made it a little easier for her. i want you to talk about some of the economic challenges she will face.

whatever pats on the back she gets for handling the covid crisis, the economic challenges are numerous. >> there was significant inequality before. the lockdowns have put new zealand's economy into pretty significant freefall. but not necessarily worse than other countries that have not locked down and failed to contain the virus. new zealand is a pretty trade dependent country. it is also tourism-dependent. they might be able to benefit if things continue to be bad here and in other places. attracting filmmaking. i think i read that the bond sequel, part of it was shot there. defendantaded country, they will be hit really hard. another thing is that our dern has not-- that ardern

really decided on a clear china policy. there is no clear strategy she can take. and are going to suffer have decided to basically just try to wait it out. no one is going to go anywhere until covid is addressed. it sort of depends on how things are handled in australia. caroline: what are the levers she can pull for growth? i was astounded with how tourism-dependent it is. you talked about how they will have difficulty getting into the porter to a certain extent. is beautifuling's but there are only so many millions it can make. what are the levers she can pull? is it investment?

his housing doing ok? big film industry and have attracted several of the large u.s. productions that are sort of in limbo now. they are willing to go there and quarantine. to come up with a plan. housing was already problematic before hand. , and theyf tourism are dependent on university students from other countries. that, they might be able to continue to attract. chinese students were a very driver of the university market and other east asian students. for 14 days is not a big deal if you plan to spend

four years there. she does not have a lot of quivers in the arrow. i think stimulus attracts some investment, trying to boost some .ore a country with a population of relatively modest size. there is only so much you can do. joe: of course, the prime minister's victory in large part due to the virus suppression. there are not that many people there, it is this island that is off of another island. how much success can be attributed to the aggressive lockdown policies versus sort of the fortune of the zealand's geography and other things that are not necessarily the results

of policy choices? >> there were other quote unquote islands. i think the combination of the lockdown, clear, consistent public messaging delivered by a leader with public trust, reliant on science, social cohesion. and buy-in from essentially an all party cabinet. she did not create a cabinet with the opposition but they bought into it. you just have a cohesiveness. you can see that in other places that are successful like taiwan, korea, vietnam to some extent. joe: thank you for your insight. council on foreign relations senior fellow for southeast asia as well as a bloomberg businessweek could trip your. senate majority leader mitch mcconnell -- bloomberg

businessweek contributor. senate majority leader mitch mcconnell saying the senate will vote on the stimulus package on wednesday. this is a slimmed-down package. this is the $500 billion version. we will see where this ultimately goes. not expected to get any democratic support. romaine: i'm going to plus back out into the world and we will talk about bolivia. a pretty big election down there. the socialist movement that was basically displaced for one year is back in charge. we will talk about the obligations. this is bloomberg. ♪

♪ caroline: today we are focused on politics outside the united states and we turn our attention to bolivia. the international bonds for that country painting quite the picture today after it would seem an election victory.

joe: i read all those stories about the death of the 60-40 portfolio. i put all my money into bolivian bonds. the dollar bonds of bolivia having fallen 7% since the election result. it is a good learning experience. romaine: i think this is where i am supposed to comment. why don't you bring in our next guest? joe: for more on this, shery ahn , the host of bloomberg markets. what is it about this result that has investors anxious? shery: with my family in bolivia, the stakes are actually pretty i for myself and my family. the dollar bonds plunging. the expectation for investors was that a reformist candidate would take over. we have seen violence starting last year when former president evo morales was ousted.

opposition candidate carlos mesa conceded defeat, so we saw that huge plunge for bolivia dollar bonds. the socialist movement again claiming a landslide victory a year after evo morales was ousted. he is in exile in argentina. morales's handpicked successor. he was the finance minister until 2017. romaine: i am wondering why investors this time around would be wary of the type of policies he might implement? tenure of evo morales, we saw gdp growth averaging around 5%. but that was helped by rising revenue in exports of natural gas. commodity prices were higher.

when commodity prices took a hit, we saw the revenues plummeting, we saw the government budget turning into a deficit of more than 5%. evo morales, very controversial, in exile in argentina. he did politically incorporate the marginalized masses of indigenous people in bolivia who for decades had not achieved the democracy they wanted, but at the same time, he tried to hang onto power. he was elected in 2006, he got reelected in 2009. thereselected the judges to system. the constitutional court allowed him to run again. he tried to do it again for a fourth term, that is when there was more political instability instabilitylitical and he fled the country. caroline: is he going to come back from argentina?

how much is the u.k. educated economist arce going to have control? shery: he is seen as a handpicked successor to morales. i speak to my family on the ground and people are waiting to see when morales will make a move. this could lead to more political instability. about 20%so far, with of the vote counted, that there is a landslide victory. we have seen the interim government of president jeanine anez, who congratulated the victors, saying they should govern with democracy at heart. alivia is also dealing with global pandemic and the imf forecasting that the economy will contract about 8%. public finances are not looking great. public debt rising to more than

and reserves plummeting to a decade low. and there is some ambiguity debate about the nature of morales's departure, some calling it legitimate, some calling it a coup. it is sort of unusual in a forced ouster with a free democratic election with the handpicked successor winning. what does this tell us about how democratic it has been in recent years? shery: bolivia has suffered from what you see in developing markets, week institutions being we can further by concentrating -- being weakened further by the concentration of power in the executive. 2009 constitution in empowered the executive even

more. we are seeing this balance and struggle play out in real politics that has sometimes led to violence in the streets. caroline: the host of daybreak australia and daybreak asia. that is all for "what'd you miss?" romaine: this is bloomberg. ♪

emily: coming up in the next hour, tech earnings begin today with ibm out of the gate. on tap this week, netflix, verizon, tesla, and until all reporting.