concerns about valuations, the vaccine rollout, and the fallout of frenzied retail trading dragging equities into the red. the reddit rally hits pause. gamestop and amc fall after the wallstreetbets forum briefly turns itself off to new users. and e.u. officials demand astrazeneca supply the continent with vaccine doses from u.k. plants amid an ongoing battle over shortages. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. the most important tweet i have seen is something that we both follow thanks, someone from twitter now an expert on something completely different. it is amazing what we are living through. tom: it is an amazing 2021, and you have the good news of apple yesterday and that. but what really struck me with the vaccine is that you cannot get a maxine -- a vaccine in

madrid, which shocked me. i cannot convey, to those that are not that sophisticated, this issue of shortselling and a large social gathering pushing against the shorts, francine, this is a huge deal. we are going to cover it heavily this morning. francine: it is a huge deal. the husband even asked me about it yesterday. the battle between the e.u. and astrazeneca is ugly, ugly. tom: francine, your husband ask you about it because your kids or daytrading from the couch. francine: even if it means day stock trading. also an important conversation with carrie lam, in which she was asked about the relationship between hong kong and the banks. >> i would love to see a stronger presence of the bank in hong kong, and i have been

communicating with hsbc officials from time to time, and of course i respect the decision at the international bank, but i tell them very categorically that there are huge prospects for the growth of the financial sector, the banking sector, in this part of the world. francine: that was hong kong chief executive carrie lam speaking with our anchor. we will have plenty more throughout the day. i heard snippets of it, and this is a huge deal, how they keep the finance -- the financial heavyweights on the stand but at the same time trying to put pressure on them. it is a little bit like a dance, like a chess match. tom: it is like the 19th-century full-time it will be fascinating to see. i don't have any wisdom or opinions other than our great hong kong team, but i will tell you, these western banks, how do they adjust to this new world? francine: we will have plenty

more on that throughout the day. let's get to first word news with ritika gupta. ritika: the federal reserve is nowhere close to ending its massive support for the u.s. economy. it was made clear by jerome powell. policymakers left their rate unchanged near zero. he said it would take time for the fed to reach the threshold dialing back at the bond buying program. in a span of two weeks, a number of coronavirus cases going down by an average of 43%. that outstrips the decline in other regions. improvements led california governor gavin newsom to ease social distancing measure this week, but that could lay the groundwork for inspections to spike again. the european union and astrazeneca are in a dispute over the coronavirus vaccine, the drugmaker refusing demands that it takes vaccine supplies from its british factories to increase doses going to the you the root of the issue is

astrazeneca's decision to give the u.k. priority over the e.u. following a production glitch in belgium. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i am ritika gupta. this is bloomberg. tom? tom: thank you so much. let's do a data check. what we do come across asset analysis, games that -- gamestop, amc? no, futures -27, they get worse. jon ferro says look at the vix, 35.02, in from 37. that is a change from where we were. big figures off of the carnage yesterday. there is the board, francine. they demanded we put that -- oh, no, bring it back, team. let's sit on it for francine. gamestop. francine: there you go. there is a new word in the

lexicon. it is clear that demand for leveraged volatility has hit a record high. i love that word, tom -- volma geddon. tom: the oldest was and build-a-bear. this was in the bear. francine: i heard millennials -- my generation is like older millennials. that is what we can now call ourselves. overall, you said it -- it is about vix, you look at what is happening in the markets. it is amazing if you look at the news, which is earnings, valuations, trends on coronavirus and the fallout from the retail trade. it is probably quite difficult for the market to make sense ofn all of this is rising. tom: we begin our coverage this hour and all the morning, a historic moment for global wall

street with someone who has a wonderful synthesis with what is going on. wall street experience, global experience, and a sense of the financial system as well. marcus ashworth writes brilliant , too often for bloomberg. marcus, the money question is when it is done with the reddit crew and we are done with hedge funds that have been crushed by being over shorting, etc., will this rebound upon the global banking system, with a fallback on the brokerage firms that we know? marcus: hi, tom. it makes me realize after how many decades of experience that it is all pretty useless at the moment. look, it is fascinating to see really smart shortselling hedge funds that tend to be the most canny of the lot, and that is a lesson for all of us. i don't think this is systemic in the sense of worrying about banks. the only big stock that has been

affected so far is nokia, and we have considered that very important for the communications. particularly with the huawei issue. but it is a new time -- the high for last year is not really -- that is the only stock that has been a big part of the figure, maybe 1/12 of it. this is not where it is going on. it is not important for the real systemic problem. however, for what it has done to liquidity and particularly the service hedge funds will have to provide liquidity. the stock borrow, and that has caused obviously a real crunch -- a real credit crunch or people are taking off a lot of positions. francine: good morning. when we spoke to axel weber, and we spoke to someone from the ecb

that looks at some of the credit concerns or the loan concerns, and he says it is not really -- right now. if this snowballs, could it be -- could it touch or infect other parts of the financial world? marcus: i don't think so. right now this is just small techie stocks, not going to large-cap stocks. barring anything i mentioned. it is a system issue in how the plumbing works and how people can get liquidity, and that is where the fed might have to come into provide more liquidity. but we are not seeing hedge funds going properly banged yet, and we are not seeing the drop in liquidity. tom: of the single distinctive feature, t minus one, t minus two, t minus three is the idea

of shorting stocks with a short instance over 100%. is that going to be the focus of legislation and regulation? marcus: it is a very good point. i had this debate today. do we relax regulation, making it so you don't have to declare the shortfall for two weeks or a month. that would be the worst way of going. in essence, save our short-sellers. what do you do? do you make it where they have to declare the short? equally the other way around, you have to -- you cannot short more than x and y, put regular and said. this is moving so fast, by the time anyone is getting their act tom: we start smart with marcus ashworth this morning. with bloomberg opinion. we have more voices coming up -- william winters of standard chartered, this is someone who has seen this before. also spearheading the unique

bank, the standard chartered bank. bill winters next. futures -23. stay with us. this is bloomberg. ♪

tom: bloomberg surveillance. good morning, everyone. futures -22, the vix 34.44. we are going to look at carbon and some of the global climate initiatives here in a bit, but right now, a more than timely interview on global banking, in his unique bank. bill winters, standard chartered chief executive officer, the gentleman from america

corralling the interesting emerging market dynamo, standard chartered. bill, wonderful to have you on. if i look at the performance of standard chartered and you came in under great duress and corralled the bank, your share price is back to where it was 25 years ago. what is the strategic plan to reverse the trend and add value to your very unique bank? bill: nice to be here, tom and francine. that is the big question. frankly, we have some really good answers. five years ago when i arrived at standard chartered, we set about on a mission first to clean it up. we spent a couple of years doing that, to great effect. but you never quite go with the agreement up completely until you go with a period of stress. we certainly experienced that over the past year, year and a half, between the pandemic and the geopolitical tensions that is on everybody's's mind, u.s.-china, etc..

but then we re-shifted the focus back to growth. until the advent of the pandemic, we were going quite nicely. we had a target growth of 5%. doing that at the top line, growing lower than inflation. we expect -- we kept expenses low for five years. significantly stepping up our investment, and returning capital to shareholders -- all of that was very much on track as we got into the pandemic. we could be taking a step back now. with short-term credit pressures and i think what will end up being a medium to long-term challenge a very low interest rates. but the underlying growth tensions are still in place. we have a unique foot and 60 countries. that gives us the opportunity to engage with our customers a cross-border business, and that continues to go very well. we have a very unique spot with excellent clients across the 26

markets for retail business. that has continued to grow and dipped during the early days of the pandemic, but we are now back to full speed. tom: i take your point and i do mention, folks, the pandemic has gotten in the way of everybody come and standard chartered out with 60 countries defined that. bill winters, how do you defend against the juggernauts? jamie dimon has decided to go digital in the united kingdom. maybe that is not a threat to standard chartered, but how do you defend against the big banks who want a piece of your emerging action? bill: we have been defending ourselves against that for years. our cross-border network business, we are a top tier market share player, despite the fact that we are a medium-sized bank. we hold our own because we have deep relationships, we are deeply local, we have very good technology that connects our clients to each other and to us,

and that is a very strong position to defend. the more interesting competitors really are the local level, so who is coming up in the regional markets? obviously the chinese banks are huge and strong. the digital banks come of which we have one in hong kong, will be trying to interrupt that market which for us is our largest and a very profitable market. so these are the challenges that we are facing, and where facing them head on, so what we're doing is trying to beat them at their own game. the digital bank that we have launched in hong kong, it has got the highest ratings of certainly the digital bank of hong kong, but certainly the top-tier globally. it is excellent user experience. we delivered that, liver customer's -- delivering customer service at relatively low cost because it is almost entirely digital. these are the ways that we are

keeping the big guys, banks but also big tech, out of our turf, and at the same time dealing with competition which in many cases is very strong. francine: on home phone, standard chartered was actively -- would you have done so? bill: we have a very clear policy on dealing with law enforcement. we have a requirement under the law from law enforcement, and we comply with that. we do that in the u.s., in the extraterritorial reach of the u.s., applying sanctions obviously. we would do that in china and hong kong as well. while we can never comment on a specific case, we're absolutely true to the law and will continue to be. our clients understand that perfectly. francine: the winters stays with us and we will more about the carbon market. and how to avoid greenwashing at

all costs in financial institutions. coming up next, we spring to the norges bank chief executive officer. that is at cisco with 30 a.m. in new york, 11:30 a.m. -- that is at 6:30 a.m. endure, 11:30 a.m. in london, so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

francine: this is bloomberg surveillance. we were having a good conversation about some of the

concerns, the adaptation needed to deal with this new world. we are back with bill winters, standard chartered chief executive. if you look at your ongoing transformation of the bank, how is it going? we heard that there were more jobs lost this month. are there any more coming? bill: the transformation is going very well. in the context about strategy, we have been steadily digitizing, with new ventures that have helped our ability to serve customers, and over time have an impact on our -- we have seen early signs of that. we said there would be no redundancies relation -- in relation to the pandemic. no cost cuts, etc. we continue to honor that commitment. what we said is that we would

resume the ongoing transformation of the bank, which is as we digitize our business, automate our processes, there will be people whose jobs go away. we have invested heavily in reskilling and retraining. we have had thousands of colleagues who have been able to move internally from one role to another, almost always requiring a new set of skills along the way. we have had a few who have left. at the end of last year and the early part of this year. that is an ongoing process, that this is the course of business for any company now. where you have 100,000 full-time equivalent employees, we have 2% or 3% moving in and out of the firm on a regular basis as a result of the transformation. i would put this into the ordinary course category. francine: talk to me about climate change. how can companies or how can financial institutions make sure that corporate 10 companies first of all ensure that they

are turning to the voluntary carbon market only after they have done everything to reduce their carbon emissions? phil: it is a really important question. -- bill: it is a really important question. it is the davos time although a different format. i'm so excited about the way things are coming together right now. you've got 1500 companies that have made commitments to get in at zero in terms of their own carbon emissions by 2050. standard chartered aligns precisely with that in terms of meeting the underlying paris accords. we have huge efforts underway, saying what does that mean exactly? how are we going to measure what the emissions are, how are we going to measure your progress? you have things like the tc fd, which is sending out that constantly improving the transparency that where all showing -- and we will again be a leader this year, we believe

deck in terms of our own disclosures, our in missions. so you've got commitments coming in, the metrics, the measures, the requirement for transparency from our stakeholders, from our owners, from our clients, from our employees, from our regulators has also stepped up, so things are coming together to solve this problem. we know that the bulk of improvements -- the vast majority has to come from companies improving their operations, reducing their own emissions day to day. there are some that simply cannot be taken to zero, and that is where people will need to go into the carbon offset market and buy credit, transfer some of their money into the hands of other people who can. that has been the task force i have been sharing. francine: in 30 seconds -- how do you prevent corporates from using the carbon credits for greenwashing? bill: a lot of the work we have

done is around setting the standards for what qualifies as carbon credit, and putting a framework on top of it to make sure that it is continually check. people are going to be watching this very closely who have not watched in the past when there has been evidence of greenwashing. you have the standard setters, the governance bodies were overseeing, regulators. they are a market now. there is somebody on the other side of those trades who is in a position to check. i think the greenwashing problem, which is absolutely at the center of our focus, can be dealt with. francine: bill, thank you so much. bill winters, the standard chartered chief executive. tomorrow we consider -- we continue that discussion with mark carney. this is bloomberg. ♪

>> the economy is a long way

from our inflation goes and it will take some time for further progress to be achieved. in terms of tapering, it is premature. we just created the guidance. it is too early to talk about dates. it will take quite a while to get to the numbers the experts say is required for herd immunity. we think it will be a struggle. the pandemic still provides considerable downside risk to the economy. i would add we are a long way from full recovery. something like 9 million people remain unemployed as a consequence of the pandemic. that is as many people as lost their jobs at the peak of the global financial crisis and the great recession. tom: chairman powell having the press conference he wanted. new york times got the first question. he stopped the conversation.

i am not going to talk about it. president biden, i don't know if he is looking to gain. he is looking at the nation's health care system. the president comes out with statements on the aca moving forward today. special enrollment coming up february 15. data check. more of what we saw yesterday. futures, -12. the vicks down at 33. we quote the frank, euro swiss. -- vix down at 33. these stocks are buttressed against yesterday's resistance. those other closes yesterday --

those are the closes yesterday. francine: thank you, tom. the stocks of notoriety. i call it frenzy retail trading. it has been incredible to watch. joining us now to talk about all this is philip hildebrand. we are delighted to host him today. let's start with markets. does it have an impact on certain parts of finance that could make history? could it turn ugly very soon? philip: great to be on. thank you. whenever you have events like yesterday, you have to ask yourself, is there a fundamental reason for the outlook? at this point, probably not.

the biggest risk remains the pandemic. vaccines will be the key question. when you look at intraday moves, we have seen some of the surest recovery. it is not surprising when you think about how much liquidity is in the system. to me, this looks like >> pockets of frothiness. at this stage, i don't see a cause for a fundamental reassessment of market outlook which continues to be driven primarily by how much accumulative activity loss we will have and that is a direct function of how the vaccine administration will turn out in

the next couple months. francine: does this affect investor anxiety at large? could it become that? philip: what would really do that is if we saw significant derailment of the vaccination strategy. we should remember this. chairman powell said yesterday, rightly, if you look at unemployment, it looks worse than the financial crisis. if you look at cumulative activity loss, it is likely we end up with only a fraction of the cumulative output loss of the financial crisis. bund just put out estimates thinking it would be 1/5 of the loss we suffered during the financial crisis. that is the fundamental driver. as long as we can be sure vaccination works, it gets us to a better place by midyear, i think that will be correct.

far less cumulative output loss than in the aftermath of the financial crisis. tom: i want to center this around mathematics, which i'm sure you learned at the university of toronto years ago. any form of derivative transactions, cash has to cover the trade. no question. we have seen that with two noted hedge funds making a cash infusion into a troubled fund. how should blackrock adjust in the coming months to the reality there will be billions of dollars of losses and someone will have to cover them? philip: our business model is long-term. 2/3 of assets have declined. they are related to pensions, retirement. cumulatively, we are long-term

oriented. when we look at factors that are going to affect the overall outlook of markets, not just the day-to-day, it is clear that some of what we saw yesterday, some people had to sell positions to fund others in the derivatives market. that is a natural thing you get. tom: explain to us your view of europe. inflation expectations across the atlantic, the inflation lift of america versus the challenges of europe. philip hildebrand on the state of the economy, please. philip: look back at inflation as a global phenomenon. here, i definitely see signs, assuming we can get through this

pandemic, that the vaccination strategies work, if you look through that, you will see we are probably underestimating inflation dynamic. we will see long-term effects, the shift to sustainability, which we think is tectonic and significant, that will tend to be inflationary. the rebuilding of global supply chains make it more resilient. it is likely to be inflationary. longer-term, as i looked through the short-term activity and volatility, i see an uptick in inflation. markets are pessimistic on europe. we see significant outflows out of equity markets. my guess is that does not change. europe has done some important things, most important, the recovery fund is dispensing significant fiscal resources in

all countries, including in sustainability and net zero. i would not be surprised if the market will reassess europe in the weeks to come. francine: how could -- how quickly could that repricing come? that changes the trajectory for central banks. philip: it will not happen immediately. it will be moderate. i don't think we are going to see runaway inflation. moreover, in the first phase, i would expect central banks to assure the price remains low. -- remains low. initially, nothing alarming, which would allow central banks to keep rates low. growth will surprise upside,

inflation will start to pick up but we will continue to have low rates, which will be good for servicing the high debt levels we have coming out of this crisis. tom: long ago and far away, you know the hedge fund game. defend the boys on the couch. i take great issue with the idea that these are children playing with laptops on the couch. i would suggest there is a relative level of sophistication. hedge funds are allowed to do stupid things. why are we tarnishing these people on the couch taking the other side of the trade? philip: i am not tarnishing anyone. [laughter] we have to recognize technology is changing everything as all of us have experienced. it is changing the way people invest in trade. the regulatory system, the oversight system is lagging behind, which will create

volatility, which is what we saw yesterday. the key at a time like this, you have to step back and think as a long-term investor, has anything changed fundamentally? what is the biggest risk? the biggest risk remains the pandemic. francine: london remain the financial capital it has been post-brexit? philip: it will remain a very important financial capital. london has extraordinary resilience. the country has resilience. it will bounce back. we should not expect no change. some very significant steps in europe. this crisis has reinforced, the willingness, the will, to consolidate europe. i would certainly expect to see some of the european oriented equities will inevitably shift to the continent.

that is an inevitable consequence of brexit. we will continue to see the u.k. be a very important financial center. i have no doubt. francine: thank you so much. philip hildebrand. we continue looking at markets and movements. we look at game stop and whether there is something more significant to it. tom called it the boys on the couch. this is bloomberg. ♪

>> it has been the printing of money by the central bank and the distribution by the government that has financed a

lot of the activity. it reflects the liquidity that exists and the new players in the market. historically, it is typical of a volatile environment. when you look at the underlying root causes of it, it really is the transition of monetary policy to the printing of money. francine: that was the bridgewater associate coaching executive, robert prince, weighing in. the read across from other aspects of the markets, and richards, fidelity -- anne richards, fidelity. usually we do this in the cold of davos. today, we are doing it in a warmer environment. does this infect other parts of the market? anne: you are seeing pockets of

frothiness come through. the bitcoin frenzy. you are definitely seeing pockets of that. the thing most fascinating about gamestop and others over the last few games is the unintended consequences of a combination of transparency that came out on the short side because in the financial crisis, it was very much the same kind of approach hedge funds used in order to sometimes put the other side of the trade on, with struggling banks. technology changing, the simulation checks going through allowing people to trade on retail, came with an unintended consequence, which means there are no regulators expected.

they will have to respond. fascinating how these things come together in unexpected ways. francine: do you think regulators will start looking at it before it snowballs into something else? anne: if you are a regulator at the moment, professional investors coming together, you would be looking at assets. it is not clear the current regulatory framework works or applies in that situation. the thing it could do quickly is removed transparency. that seems to be the trigger. that takes away from that market transparency, which everyone wanted to put in place after the crisis. there will be regulators around the world scratching their head. i don't think the right answer

is straightforward. it might be something people have to be more mindful about when you get crowded short trades. i think we will see fewer. tom: we have video from madrid. centerpoint for the vaccine worldwide. moments ago, madrid will be out of vaccines today in spain. catalonia appearing to be next. vaccinations in disarray. anne, back to your electrical engineering at edinburg. we have gamma trades. we don't want to bore people. the slew rates of the financial system and the derivative markets, how will they fall back on conservative investors like you? anne: we carry on with what we

always tried to figure out. how do you balance fundamentals and underlying dynamics with individual companies and nonetheless consider how momentum is playing out? any professional investor is looking at that trade-off between volume and momentum in any active management of a portfolio. what we have got here is intense and focused. it doesn't really change the underlying fundamentals going on within the markets. that is much more about how we are seeing the change in relationship between monetary policy and fiscal policy and how we see much more shaping of monetary policy then thinking about the impacts on the real economy and effectively passing the buck to the fiscal side.

tom: i would have been rude to ask the chairman yesterday. maybe i will get an answer out of you instead of being shown the door. can we look at the new viscosity of the global system as too much money for accommodation? anne: i don't think it is. we have not yet seen the natural endpoint of the expansion of the central bank balance sheet. we have talked about this many times. you are continuing to see that great, big thump in the middle. the big mindset shift we are seeing is monetary policy. that came through from the fed last night. debt sustainability is right at the heart of the thinking on monetary policy. that is why you are seeing bonds increasingly less expensive in

market, equity markets. you are seeing a changing dynamic in that play. we are seeing a different approach to monetary policy which is not been made entirely explicit but is becoming so. inflation is no longer the be-all, end all. the service is taking over. that changes dynamics. we have not yet seen the natural endpoint of where central bank balance sheets can go to. that experiment, we are living through. francine: what does that mean in terms of market crutch? when does the market latch on? if the narrative changes, do markets change with it? anne: couple things which play out. it is hard not to look at pockets of speculation and not

feel the market is due some degree of consolidation correction. you are seeing that type of speculative activity, it tends to proceed some form of correction and consolidation. we are probably due. if you think of the stimulus has gone through, the fiscal response, the things we were hearing before, how we contracted this economic cycle and we are into the recovery phase, you are looking at estimates of 8% gdp growth in the u.s. this year. that is significant to earnings momentum. you have to balance, we will have consolidation but you risk economic momentum driving its way through the rest of '21. tom: thank you so much for

joining us. chief executive officer, fidelity, wonderful comments on what we see. what we see is a lift. gamestop, indicator of the early morning, through a high to for 25 and it is a burst. -- 425. the longs dominate. there is continued short interest that the longs squeeze against. coming up, our bloomberg year ahead. this is bloomberg. ♪

francine: this is "bloomberg surveillance" from london and new york. what is happening with the markets related to gamestop.

we look at volatility and angst. european stocks down one present. looking at earnings. -- 1%. tom: 425 gamestop. amc still up. the tawdrynes and interesting effect on global wall street. on apple, william power. stay with us. this is bloomberg. ♪

tom: this morning, the long and

short of it is that the longs are winning. gamestop at 455, say that selective hedge fund. be careful out there. what will, canned, or should the chairman do. speaking of chairman, chairman powell has never been in a gamestop store and will not join the blame game. and you cannot be vaccinated in madrid, caledonia -- catalonia is. the e.u. rejects the logic of first-come, first-served, tell that to britain, israel, and the u.s.. bloomberg surveillance, your gamestop central. i make jokes about it, but i am telling you it is a moonshot as of 20 years ago. game shop steps in, s3, which