♪ >> it's not that news is good news anymore. it is bad news reflecting painful months ahead for the economy. >> he persistent theme here is in 2021. >> you have all the signs of a structural bull market at play here. >> i don't think we should be thinking inflation is going to be running off to the races. >> there's going to be a lot of monetary stimulus coming in, a lot of fiscal stimulus coming in, and the end of covid. it is kind of like a 2009 year. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning, good morning. this is "bloomberg surveillance ." alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities flying this tuesday morning after a long weekend stateside. we disrupt regular programming

for tom keene to beret to me for the next two minutes about my absence for the last month. [laughter] tom, be my guest. tom: no, it is the theme for january. no, we didn't miss you. green parrot, key west. we are thrilled you are back. give us one observation of your travels. jonathan: here's my observation this morning, this on twitter. "while we've all missed you, i can't imagine anyone is happier to have you back than poor lisa abramowicz." i love that. [laughter] lisa: welcome back. nice try, trying to get away with just two minutes of being berated. i will say, it is wonderful to have you back. jonathan: i'm prepared. tom: let's get right to the heart of. the matter. i can't afford -- heart of the matter. i can't afford the toaster behind jon.

he's got the fancy european toaster. it's got everything but the dolce & gabbana seal. jonathan: let's talk about janet yellen in washington, d.c., facing a hearing a little bit later. tom: she says go big, and what is important here, greg valliere published this morning, working from 1.9% down to maybe 1.5%. it is a follow on infrastructure-like second stimulus. the number one observation, in "the telegraph" this weekend, s um up u.s. action to 25% of gdp. jonathan: and u.k. austerity. quite clearly top of the agenda, janet yellen in washington. lisa: the theme for the day in the week is changing of the

guard, both with respect to the presidency, today is president trump's last day, and looking for other potential action in his last few hours in the white house. goldman sachs fourth-quarter earnings in about a half-hour time. yes, janet yellen presents to the senate for the treasury secretary confirmation hearing. everyone is going to see how she toggles between this idea of a 1.9 trillion dollar necessary spending plan with the rising debt load. how will she toggle between the idea of keeping interest rates low in the face of rising inflation, in the face of rising debt to gdp, which is set to exceed the highest in history? these are the issues people are looking for from her. she is the first person to ever serve as both the head of the economic council for the presidency, federal reserve chair, and she would be the first person to ever also serve as treasury secretary. jonathan: let's build on that in get straight to the price action

this morning. i haven't looked at this for a month. where are we on the s&p 500? approaching 3800. year-end target over at socgen, bank of america on year-end 2021, 3800. a lot of talk about a bond market, the additional supply. treasury yields high this morning, curve stever. your 10 year -- curve stever. -- curve steeper. your 10 year, one point 118%. yields were higher this year. people think they will go higher still because that will translate into better growth and a better trajectory going forward. i think that is what is key as we discussed this bond market with stimulus down in washington, d.c. tom: what is really important, is this about the level of yields, 1.12% on the 10 year yield, or is it the rate of

trajectory towards higher yields? i am going to go to where ira lot -- where a lot of our guests have been. a lot of people put that ambiguity as the rate of change of interest rates, not so much the level. jonathan: the level matters to the big banks on wall street. the earnings, bank of america behind us, goldman sachs in front of us this morning. sonali basak has your wrap. sonali: good morning, jon. we have bank of america saying it would buy almost $3 billion worth of shares. we have them also facing a little bit of pressure here in their net interest income. they haven't yet provided in outlook for the full year, but that is one number everyone will be looking out for. they are short on fixed income trading. however, they have been doing very well in investment acting. they are neck and neck with j.p. morgan in a banner year for debt underwriting. can they keep that up? the consumer outlook is also quite rosy, but we will be

looking for brian moynihan s -- for brian moynihan's risks ahead. jonathan: joining us now is evan brown of ubs asset management, the head of multi-asset strategy. that's start with janet yellen downing washington, d.c. what are you looking for a little bit later -- janet yellen down in washington, d.c. what are you looking for a little later? evan: i think we are going to see her endorsing 1.9 trillion dollars, and given we have already seen the text of her speech, going big, janet yellen very much endorses what jay powell has done in terms of trying to engineer and inflation overshoot. there's going to be a very healthy relationship between those two individuals. we really need that if the fed is going to achieve its goals of higher inflation and much

stronger employment, so expect her to be doubling down on what biden said last week with the large fiscal number. tom: fold in equity dynamics into your asset-management management choice right now. it is -- is it the dynamics of sustained growth margins, or the surprise revenue growth? evan: i think it is outright earnings growth and operating leverage. we saw the multiple expansion last year. now it is time to deliver and give guidance about a really strong bounceback in the economy and earnings. but the fiscal is clearly tied to this. if biden is able to get another $1400 of checks, unemployment insurance boosted and extended, that is a lot of money in people's pockets, pent-up demand

that they are going to end up spending once this vaccine is broadly available. so it is going to be quite supportive for earnings, and especially for those companies and sectors that were covid losers last year and set to be winners this year. lisa: does the dollar weaken or strengthen on the heels of more support? evan: this is the big debate right now because it is very interesting that when you had the georgia elections, when you had the blue wave, everything just kind of reacted as you would think except the dollar. the dollar did not go down anymore. we have been broadly in the view that dollar is going to be held down by real yield, higher fiscal stimulus, and the like. i think the narrative is changing, at least in the near term, where it is less about global growth reaching the dollar and more about relative

growth differentials because what we are hearing on the u.s. side is so much more powerful than we are getting in any other country, such that that relative growth differential, and to some extent, relative yield differential in favor of the u.s. is going to be attracting influence, and the dollar is going to have a little bit of a rally here. jonathan: to be clear, you think that is a short-term story, a short-term call? evan: i think that is a short-term call. think big picture, let's not doubt the seriousness of the fed in their flexible average inflation targeting at all. they are going to do everything they can to keep real yields low. it is going to be tough for other countries to out-dove the fed. over time, as other countries recover, europe is a little behind on vaccines, but expecting a big bounceback when that happens over the course of the second quarter and second

half, so as it becomes a more balanced global growth picture, you will get the dollar weaken again. but for now, it is a u.s. dominant one, so that is kind of what i would call a countertrend rally in the dollar. jonathan: kevin, great to catch up, as always. that is the story for a lot of -- evan, great to catch up, as always. that is the story for a lot of people. front page of newspapers and the u.k., there's talks of corporate tax hikes, talks of austerity later this year. janet yellen is going to pledge to do none of that, to go big, recognizing the debt story, but ultimately taking the opportunity to look at where rates are, issue more debt, and provide more stimulus. i think it is a mistake in the u.k. that there is even a conversation on the front page of the newspaper about tax hikes at this stage already. that is why 70 people are getting -- why so many people

are getting up on the idea of united states versus the rest of the world. tom: you are absolutely right. it is a stark difference between the two, but what is absolutely stunning is when you dovetail it off the pandemic. we are at 400,000 deaths today. while you were gone, i did an extrapolation in honor of you, and that on 500 deaths is in the vicinity of the first weeks of may. we have to overlay the pandemic on this. you missed the jobs report january 8. lisa and i know that was the worst report going back to pre-world war ii. jonathan: and we expected a week december. that was -- a weak december. that was the report. bloomberg economics called and negative print for the month of december. are you going to trade on that, or the idea that later this year, things get better? quite clearly, people are lining up to trade on the latter and

not the former. lisa: the hope trade. the question is whether the asko -- whether the actual fiscal stimulus plan puts the kibosh on that. jonathan: it is good to be back. you guys are taking it very easy on me. you really have. lisa: 12 minutes. tom: folks on radio, he went to fortin, and mason -- he went to fortin him and mason and loaded up the mug. jonathan: alongside tom keene and lisa abramowicz, i'm jonathan ferro. with futures positive -- [laughter] -- this is bloomberg. lisa: tom? ♪ karina: i'm karina mitchell with the first word news. janet yellen is expected to tell a senate committee that it is time to act big on a coronavirus stimulus package.

the former fed chair begins her hearings today. it will be the first time the senate can question someone in the biden adminstration about the proposed plan. according to the associated press, it will include an eight-year path to citizenship for roughly 11 million people here without legal status, a massive reversal from trump administration policies. the international energy agency has cut its first quarter estimates by 600,000 barrels a day. the iea says the global vaccine rollout is putting us on a better trajectory for next year. sales for new roof vehicle records -- new vehicle registrations fell 20% in the second half of 2020, only enough to just make up for the collapse after the initial outbreak.

global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. ♪

♪ >> we start from where the economy is today, and the truth

is we are in a very precarious moment. the economy and the virus are spidering downwards -- are spiraling downwards, so now is the time to act. we know this is going to take a lot of work, and now is time to move forward. jonathan: president-elect joe biden's pick to replace larry kudlow as the director of the national economic council. for our audience worldwide, from new york city this morning, good morning to you all. the attention of the world on washington, d.c. the attention of this market on a stimulus program in the capital. equities up another 0.7%. this market is inching higher this tuesday morning. tom: clearly a constrictive sign for the president-elect. look for our inauguration coverage tomorrow, a major theme for us today and into tomorrow morning as well. kevin cirilli, our chief

washington correspondent. let's talk about a precarious washington, which is away from a remit of economics and investment. it is a washington dealing with something they have dealt with forever, and that is white supremacy. how will the people you know on capitol hill deal with the weekend discussion of white supremacy? kevin: there's no doubt this has been brought to the forefront in terms of domestic terror groups and how the united states is going to combat those groups. quite frankly, the presence here in washington, d.c. of 25,000 national guard troops is palpable to see how the city has been completely flipped upside down. tom: how does it change the first days of the biden adminstration, if they are transfixed by 20,000 national guard in these tangential

debates to economics? kevin: in terms of what we are expecting from president-elect joe biden's first days, it will really be refocusing his commitment to defeating covid-19 and trying to communicate to the public with the plan is for america as it relates to rolling out a vaccination in 50 states that many have argued has been botched. that is why you saw him last week bring out the 1.9 trillion dollar economic stimulus on a day before he is sworn in that his treasury secretary nominee is set to testify before the senate. jonathan: let's talk about that testimony. what kind of atmosphere do you think will welcome janet yellen? kevin: i think she will receive welcome amongst democrats. i think republicans, based on the aids i talked to, are going to try to glean some more

information about her policies in the geopolitical portfolio, especially as it relates to u.s. and china, and even how she would handle different trade deals like section 230, for example. i think that there are going to be a host of different geopolitical questions, but the main focus would be on her position on the stimulus plan. lisa: the question is how quickly can we get a stimulus plan through congress right now. what size bullet ultimately be where are we -- what size will it ultimately be? how much are republicans pushing back against the price tag? kevin: they are pushing back. they say a piecemeal approach would be better. just past the stimulus checks first alone. democrats want a bill that is much more all encompassed, but

you are absolutely correct, this is going to be a fiscal fight, it is a fight republicans are willing to have. jonathan: let's talk about yesterday evening, a travel ban instituted months ago over europe, brazil and elsewhere, and then a slap down from the incoming administration. what is going on? kevin: president trump said he is going to lift this band. the biden adminstration says they will keep it in place. it is just another dizzying policy display of where covid-19 , the different approaches between the outgoing and incoming administration. lisa: when you talk about the dizzying policy changes, it has to do with what mike pompeo is doing with relation to china, and the appointment of michael ellis as the devin nunes employee that could be a career

type appointment. what is the significance of this? kevin: it is quite significant, and part of a broader debate as to whether they should be career appointees or political appointees, and the administration, as is typical, has put people on various boards that have drawn a lot of scrutiny. i imagine it will continue to do so. tom: kevin, thank you. busy day for you. look for "sound on," a great source of interviews the last few days. we are completely swamped this morning by anticipated pardons. jonathan: unoriginal moment for the united states of america. a divisive couple of weeks, and in many ways, this year hasn't really gotten started.

it has not started in the way people hoped it would. tom: no, it hasn't at all. goldman earnings just out. let's move over to that very quickly. lisa, what do you see? lisa: fourth quarter equity sales and trading came in with revenue off $2.39 billion versus next of kin of $1.96 billion, and terms of expectations. we are also getting some fic revenue coming in. people are looking at the trading arms. tom: what do you see on goldman sachs? it is a little different than bank of america, to say the least. jonathan: let's just summarize it with a quote that came from the cfo and bank of america about 30 minutes ago.

we ended the year stronger than before the health crisis. at the end of the year, stronger than before the housing crisis. if i told you back in march to bring your blaster, you would have struggled to get your hand around that. tom: the efficiency ratio, and this is an apples and oranges, that great craft beer jon drinks in the united kingdom . it is not comparable. but i saw the immediate efficiency ration see -- efficiency rate that is much better. sonali: they are beating on some fronts. goldman is doing what goldman sachs does. it buys young mergers and acquisitions, coming in way above expectations. we have three banks that have light income expectations. what is that all about? it is going to be a question

here. we have roe quite high, above 10%. it is not as high as last quarter. we are getting updates on goldman sachs' strategic plan, how fast they can bring up these strategic returns and bring down the costs. jonathan: we found out how well these names can do in a pandemic. we need to find out how they will operate in normal times. what is your take on that at the moment? sonali: right now, as long as the economy stays in shape, that is good news for not only the regional banks come but the wall street banks -- regional banks, but the wall street banks. the debt underwriting is still quite strong. a lever here, we need to see acquisition financing to keep the going forward this year.

goldman also bought more than $1.5 billion in consumer revenue, so the stronger the consumer, you're seeing the strength going through goldman sachs. lisa: that is exactly where i wanted to go, their effort to push into consumer lending. can you give us a sense of what you're looking for on the earnings call, and terms of how much business that has expanded and how successful it has been? sonali: nobody expects goldman to be bank of america tomorrow, but it could bring down the cost of funding and also help them compete. you heard j.p. morgan just last week say they are keeping an eye on goldman and pushing it to cars, so any value they can give us on their cars business will be a value. they are also launching more retail investment products. we are going to want updates on how well they are doing. tom: the efficiency ratio later down in the powerpoint is 65%, better than bank of america. that includes some litigation

affairs. a challenging 2020. how do you move solomon into 2021 with these results? sonali: let me give you an interesting statistic about goldman sachs' investmrny bank. -- goldman sachs' investment act. two weeks ago it was on capitol hill for support for small businesses. what happens on main street absolutely matters to wall street, including goldman sachs, who you wouldn't consider a main street business at this point, by any jonathan: means. -- by any means. jonathan: sonali, thank you. joining us now is christian lou.

give us an update. >> it is a pretty strong set of results. goldman is doing quite well relative to expectations, and also on the efficiency front. i think it is all a really strong set of results this morning. lisa: people talk about strategy. yes, they beat on trading overall. they had a miss in debt trading. what are you looking for in terms of how they are guiding their strategy going forward, trying to shift from an investment banking centric place to something that includes more lending? christian: i think you have to understand the strategy in the broader context. it's almost a decade now, and you see really strong growth in the net interest income. but as we go forward, i think

that will play an increasingly important part of the movie in terms of building out far more predicable revenue services -- far more predictable revenue services business. i think these are the businesses you have to grow, and will ultimately drive value going forward. tom: you even put a slash mark in the gm/gs combine. what is the pixie dust that james gorman has in wealth management that everyone else wants to copy?

christian: it's a great point. you know this because you've been here for a long time, morgan stanley was more or less a basket case less than a decade ago, until it underwent corporate restructuring. i think they've done a good job in focusing the management business around efficiency over the last decade in lending, which has boosted almost double projected margins. i think going forward, the key for that business will be growth . it will pull -- i think the

betrayed acquisition will be very helpful in achieving that. tom: if you are just joining us on bloomberg radio, bloomberg television, christian bolu with us of autonomous research, as we look at the state of global wall street. i love your broker centric view, but we have seen enough coming in from these banks. how did they prosper five years out? everybody can't win at the same thing, so what is the sense of asperity you see for a major bank of america will -- what is the sense of austerity you see for a major bank? christian i do think: -- christian: i do think outlooks are a very big thing.

i think your ability to be nimble around how you focus on customers is going to be important going forward, but ultimately, the banking business is really about economic prospect and responsible lending . those two will probably play a greater path forward. tom: jon, to me, the great january issue of 2021 is the fintech digital banking thing, and how all of these companies adapt to it. jonathan: i am doing so well, i considered not coming back. that's why have had the last, just in swing -- just enjoying myself and those mega gains in fintech. the conversation going forward, and how much some of these names have to spend. christian: look, the dollars you

spend is one thing. how you spend it is another. clearly if it was just about dollars, the biggest and best banks would stream away. so how do you spend it, what do you spend it on? all of these things matter. but make a mistake about it, here's the banks are focused a lot on the tech spending needs to be put in place to complete. lisa: we are getting bank earnings on a changing of the guard kind of day. we will get the last day of president trump present, and we have janet yellen testifying to the senate banking committee to talk about her nomination as treasury secretary. she has expressed some desire to order banks. what do you look to hear from her today in terms of how she will approach it in your --

approach it in the hearing? christian: i think for the most part, banks are part of the solution and not the problem. you saw the latest capital result that banks were able to get back to returning capital. it speaks to the strengths of this, and they did a very good job for natural crisis, to show off banks capital, improve their risk management, and i think that is the broader context,

banks have been more of the solution then part of the problem. for the most part, you do need a strong bank assisting reveries. jonathan: christian, thank you. always great to catch up. come back soon. goldman up this morning by about 2% in early trading, a couple of hours out from opening bell. the key call for me at the moment, are we seeing a massive reserve ill last year turning into a reserve relief, transformed into a big buyback program? or are we starting to hear some calls that go beyond just the next six to time months, a cycle call? what is the environment? what does the bond market look like? what do interest rates look like? could we have a durable rally in these names on wall street, not

just the squeeze we see over the last six months? tom: i would point out that douglas cast at sea breeze says enough. we have a chart on that now, the overwhelming technology that is out there. i am going to go back to that statistic, and that is zelle at bank of america. when you zelle jon money because you lost a bet on the tots, that is changing the landscape. jonathan: i get a lot more money over my venmo account from tom than i know. tom: i don't even know what venmo is, and you are right.

there changing the landscape. jonathan: in the bond market this morning, yields are higher, the curve is steeper ahead of a hearing with janet yellen and washington, d.c. joining us now is bloomberg's michael mckee. how different will this janet yellen be from the one we all know well over the last few years? michael: she is going to be different because this is going to be a political drop -- a political job. it is a question of when she is confirmed, not if. she's been confirmed four times before. this is an opportunity to sell the biden economic plan to the people who are going to have to vote on it. even some democrats don't agree with all of the provisions. she's going to say the economy needs it, and borrowing costs, despite what you said about bond yields picking up a little bit,

borrowing costs are so low, we can afford it. that will be her message today. it will always be as interesting -- it will almost to be as interesting to see how members of the senate react. lisa: how closely are you looking at janet yellen's comments on taxation, the idea of trying to pay for the increasing debt load the u.s. is occurring? michael: obviously, the biden plan includes tax hikes on the rich lisa: it will be interesting -- on the rich. it will be how she emphasizes

each part of this plan. tom: summarize the labor of -- the department -- deliver market economy. michael: the labor market is in pretty bad shape right now. it is bifurcated, however. if you are in the upper half of the labor market, if you are in the white collar areas where you can work from home, but the people who have to go to every word -- to work every day, they are suffering because business is really terrible, and it is going to be hard to get those people back to work. the words you are going to hear a lot from economists is scarring, people who are long-term unemployed with no necessary skills that translate

to the jobs that are available. that is going to be a tough thing. that is why you see a second round of proposals from an infrastructure program, but a way to try to get people back to work to try to create jobs because the economy itself is having trouble creating jobs on a standing basis -- on a sustaining basis. jonathan: mike, great to catch up. the debate really hasn't changed. the distinction between aid and stimulus. if you send everyone a check and the economy is still shut down, where those checks go? the checks will go to pa bill. they will go straight into the bank account and go into the savings rate we have seen flying. tom: i've got to go back to an epi chart that models from 1963 wage growth of the nation versus

the minimum wage. it is absolutely stunning, modeling up to $16.28 an hour. that is a huge amount to do, which is what the vice president will do tomorrow. jonathan: it will be very interesting to see how janet yellen handles the politics of the middle wage debate from breck -- wage debate. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is bloomberg. karina: with the first word news, i'm karina mitchell. janet yellen will have a different task than she is used to when she goes for treasury secretary. she's a former fed chair who spent years defending central banks actions. the biden adminstration has rejected a move by president

trump to rescind travel bans on non-american citizens arriving from the eu, u.k., and brazil, and at printing this bread of coronavirus. they say they plan to strengthen measures around public health travel. donald trump's approval rating has dropped to 38%, the lowest of all presidents since the survey began in 1948. he has fallen 12% since before the election. in italy, prime minister giuseppe conte faces a crucial test today. there's a confidence vote in the senate, one day after he won a similar vote in the narrow house of parliament. tesla has begun delivering the first model why suv's -- model y

suv's built in hawaii there me to fill -- first model y suv's built in china.

>> the strategic plan we set out last year really aimed to

transform hsbc over the medium-term by effectively reshaping the organization to invest in growth. the world has changed. jonathan: mark tucker, the chairman of hsbc. . for our audience worldwide, good morning. from new york city, alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action this tuesday morning, as wall street gets back to work after a long weekend. we add some weight to the s&p 500, up around 0.7%. we advance 27 points. on the bond market, the yield on the 10 year higher, the curve steeper come up to 1.1%. on 30's, up to 1.86%. low rates are likely here to stay. that for me is one of the key differences between now and the early part of the recovery

around 10 years ago. 10 years ago, many projected out higher rates for central banks, hide yields on treasury curves. this time around, completely different. the consensus has capitulated on the idea that rates have to go higher. rates for many people are low for a whole lot longer. tom: that is clearly the consensus feel. there's a whole school of thought out there. i would say in the last week or so, that clearly ebbed away. someone good on this is david page of axa investment managers. one thing he does, he focuses on the u.k. economy and the u.s. economy at the same time. it sounds like something that would be easy to do, but it takes a real skill. mr. paige can do that because he got better grades than mr. ferro. how do you color austerity? that is our question of the morning, whether it is the

austerity of the united states or the tangible austerity of the united kingdom which what does austerity in 2022 look like to you? michael: we think it looks slow. i think you are right, 2022 is where you would start to see it come through. there's always the trap in this situation, you see deficits rising, and the natural reaction is to try and stop spending. that is the way to see the median debt higher than i would actually be. i think what treasuries across the globe have to do is lean into this. they have to continue to provide that stimulus. they have to try and get the fast rebound, and with those, start to fall back over the medium term. but we side with in the last 10 years, we saw a very swift return.

so i think this time around, we are seeing italy and the u.s., but likely across europe as well , and in the u.k., more acceptance that the stimulus needs to keep coming, and that that fiscal stimulus perhaps removes, over the longer-term. -- can you not hear me? lisa: we are working on the audio with david. one thing that is really interesting to me, the thing you talk about so much, this idea of all of the fiscal hawks have died. who is a fiscal hawk in this world, where debt doesn't seem to matter? the real question we are going to be talking about is windows debt matter? is it really just -- when does debt matter? is it really all about costs? jonathan: in the u.k., clearly there is an audience that some politicians want to play two, this idea that yes, at some

point we will deal with this. at some point, we will have to raise taxes. for me, i think it is a policy mistake to even allow the conversation to leak onto the front page of the new paper. you want people to believe that rates are going to stay low. you want people to engage in the economy. you want businesses to spend, not sit on their hands. if you are a business looking out three to five years, and the government is telling you that at some point, they are going to have to raise corporate taxes, and they allow that on the front page of a newspaper in january 2021, i have to say, i think that is a massive mistake. i think it is foolish. i understand why you want to play to a political audience, but now is not the time to do that. i think the way janet yellen constructed her argument to say right now, it works to act big with rates where they are. and the u.k., the guilt curve.

what is the uk's excuse? they don't have one. lisa: david, come back in here. this question of taxation, do you think you agree with jon that any discussion of it is a mistake, and that frankly, we don't even have to think about it? or is taxation at one point going to be necessary? michael: i think it is a mistake to consider it at this stage. i think it is often politically driven. there are those that think about if they have to cut forward. the long-term commitments don't necessarily mean you have to tax increases, so you would expect

to see a period probably for a year or two. then you would see some sort of balanced budget where you start to see some increase come through, but your spending and higher levels of the economy. later in the cycle, that is where you consider some spending cuts. but the multiplier likely varies across the course of the cycle, and therefore spending should as well. jonathan: 10 years ago, the policies on both side of the atlantic really laid the foundations for what the cycle would look like. europe underperformed massively. are you starting to see the same thing happen again? michael: i think if president biden is able to pass through anything like these spending programs that he suggests, both in terms of the $1.9 billion on the table, but also some

long-term spending bill that tries to embody some of his manifesto, then i think the outlook for fiscal stimulus and the u.s. will be markedly ahead of what it is in europe, or certainly what is planned in europe at the moment. therefore, i think there is a good chance against a year or backdrop to rollout fiscal stimulus, but they will have to do a lot more for a lot longer. jonathan: great to catch up, sir. one of the things developing in the year is the recovery and the rest of the cycle, and the ability of europe to keep up with the united states. given what we are hearing already on the vaccine front, on the fiscal front, on other issues as well, those calls are coming through to the united states, not for europe. tom: definitely, but i would look at a commodity boom, particularly in australia.

we thank you for watching and listening as well. in cricket, australia away behind india. jonathan: cricket? i've missed you, tom. tom: thank you for helping us out. jonathan: this is bloomberg. ♪

♪ >> it's not bad news is good news anymore. it is bad news reflecting a painful couple of months ahead for the economy. >> that is a persistent theme into 2021. >> you have all of the signs of a structural bull market in play here. >> stimulus is coming. that is going to help the consumer and small business. >> i think we should be assuming that inflation is going to go off to the races. >> there's a lot of stimulus coming in, and recovery from covid, kind of like you do thousand nine year. -- like