YouSaid · the spoken record

Jake O'Brien

lines on the record: 26
first: 2019-04-11
most recent: 2019-04-11
sittings or episodes: 1
sources: podcast

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“No, it's something I need to revisit in detail soon, but what we tend to find is that actually Europe has made a lot of progress where there's still a huge amount of progress now in the economies that are now covered, is that EM economies tend to be poorly lacking relative to developed economies on issues of gender inequalities. They have a lot of progress to be made there, but also with that the potential for significant economic benefits from that progress.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“The last innovation of the piece was that we used age specific employment rates to forecast how these issues of gender inequality were likely to evolve over time. The insight being that obviously if you have big wage, big gender employment gaps in older age cohorts, they may not necessarily be as big in younger age cohorts. And if we look forward and project as that aging process takes place, we can have a view of how that gender gap is likely to evolve. And it looked especially positive for Europe and we have actually seen quite a big rise in female employment in Europe over the last 10 years.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Children or working, they tend to do less of both, so it tends to hurt both fertility rates and employment rates in those economies. And actually if you do things like improve access to childcare, change tax incentives and so forth to encourage women to work, then you see both a rise in female employment and a rise in fertility so that it addresses not only the problems of gender inequality, but also addresses the issues of long term demographics and pension sustainability as well.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“What the paper did it contained three main innovations one was it derived a simple yet hopefully intuitive means of estimating what is the impact of gender inequality on economic output. We showed specifically that closing the gap between male and female employment rates would boost US GDP by around 10%, euro area GDP by as much as thirteen percent, and Japanese GDP by 16%. So really quantifying Not only does inequality have crucially important social effects, it has very big economic effects which we could quantify. Second, we showed that contrary to the popular perception, increasing female employment rates tend to increase rather than decrease fertility rates. And that's a counterintuitive conclusion. But the logic with it, and it's certainly clear in the data, but the intuition is in countries. Where women are essentially forced”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Polish economy has been a great success story in recent years of the CE economies of Central and Eastern European economies. It has been a fantastic convergence story that has really benefited from EU membership. You've seen significant inward investment into these economies, including from Goldman Sachs as well, that has helped to raise productivity levels quite significantly within Poland. And in the near term, prospects are quite good. It's had quite a big fiscal easiness and budgetary easing in the last couple of years. There's more to come as we head into the elections this year as well. And household spending is benefiting in Poland from that. And what's interesting about it is that despite the evidence of weaker growth in the Euro area recently, Polish economies continue to perform very well.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Another country like to discuss specifically is Poland, Goldman's obviously been a big believer in the market. We've invested there and now a big office in Warsaw. What is the Polish economy look like in this environment that we've discussed?”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Pretty positive on the whole these economies last few years have had to deal with some issues that we talked about last year as well that have negatively affected growth on a cyclical basin and for our mind I think too many analysts out there and investors have inferred the long-term performance from the recent underperformance whereas in our mind there's still a lot of productivity convergence that these economies can exhibit and in most cases their demographic situation looks significantly more positive than DM economies so for us these are still convergent stories which hold the prospect of much stronger growth on average than DM economies and also than the recent past so we're positive for the long term.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“In our central scenario, we do seen inflation has begun to fall, the exchange rate has stabilized, actually recovered a bit from the lows in Q three of last year, inflation rates are falling quite sharply. However, Turkey is still in the midst of a very painful adjustment process. The worst part of the downturn took place in our minds in Q3 and Q4 of last year. But it's going to be a pretty slow and sluggish recovery going forward. The reason being is that there's still a lot of accumulated balance sheet adjustments in the banking sector in Turkey in particular that need to be worked out over time. Even in a positive scenario, that is likely to act as a drag on growth for a prolonged period. But there are more negative outcomes as well. If, for instance, we had tighter financial conditions environment, which is in our expectations globally going forward, but if that were to happen in the future, then actually that balance sheet adjusts.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“important the constraints in that area on monetary policy we think that actually amongst all each of the high yielders that I mentioned in CIMEA so we do expect easier monetary policy over time in South Africa, in Russia, in Turkey but in Turkey not really until the second half of this year onwards so we'd expect easier monetary policy in these economies In terms of fiscal policy, I think the biggest changes we expect to take place in Russia In recent years a lot of the policy initiatives have been to try and protect and insulate the economy from the volatility of oil prices and financial market conditions that deleveraging process now appears to be complete and fiscal policy looks likely to play a more important role in driving growth positively in the future.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Based to drive inflation lower at the moment, and that's why we believe that inflation in some of these high yielders of South Africa, Russia and also Turkey we think inflation will fall quite sharply this year.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“In the longer span of time, actually one of the big changes that has taken place in the M and why investors are looking at it so much more than in the past and why have they really grown as markets relative to 10 and 20 years ago is you've seen this big increase in inflation targeting credibility over time. A lot of the reforms that you saw in developed economies that took place in the early 90s into the 2000s have with a lag begun to be introduced in EM economy as well. You have more independent central banks, more credible fiscal policy and with that over time you have seen a convergence in inflation rates in EM economies down to DM levels and this process of convergence has been underway for a period now of 20, 30 years so it's a very long term process. Overlaying that process on a more short term cyclical basis you also have a lot of spare capacity in these economies which is helping on a cyclical short”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“When we look around the world post financial crisis, we really just haven't seen much inflation in developed economies or in most emerging economies. What's driving weak inflation in the emerging economy?”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“You're absolutely right, Jake. In addition to the global headwinds that we talked about, these four factors of slower DM growth, tighter financial conditions, higher oil prices, and tariffs and the risk of a trade war, within Simia there were additional shocks for Turkey specifically because it had a very fragile balance of payment situation reflecting many years of overheating in that economy. Those imbalances really in this tougher environment were exposed. And so you had the Turkish Lira fell 25 to 30 percent at one point during the course of the year. On our forecast we expect the recovery in Turkey to be very slow. This is a balance sheet recession which will be unwound in our minds relatively slowly but nevertheless we do seem to be past the worst point of Turkish growth so looking at the outlook for Simir as a whole we think that will contribute positively going forward.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Let's get to Samia. You're especially focused on that space. Once again, Central and Eastern Europe, Middle East, and Africa, that's an area that's experienced slower growth against backdrop of slower growth in the continent more broadly, but also some shocks in Turkey. Where are we now in the growth trajectory of that region?”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Within the SEMIA space, there's quite a lot of political events in the coming months. We have elections in South Africa in May, which will represent a key point where the relatively new Ramfoza regime, if they succeed, as we expect in getting through those elections, will be freer perhaps to implement economic reforms than they have been up until now. We have elections coming up in Israel, actually earlier than that at the beginning of April, which are still very uncertain. We have also elections in Turkey, local elections, which are a key focus for that market and also the European elections in Central and Eastern Europe, which are seen as being a key barometer of the performance of populism in these economies.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“What's more is that you are also seeing now the first signs of a recovery in Chinese data, where that recovery really began to be seen in September of October of last year for most EMs, it has only really begun to be seen in the last month or two in China.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Until very recently the news has been more negative and Chine Andrew Tilton and his team focus a lot on that is that you've seen activity in China fall below six percent annualized on our CAIs. That's really a very weak level in the context of Chinese growth and has been a level which historically had prompted quite a significant response from the authorities there in terms of easier monetary and fiscal policy. Initially that response appeared to be delayed. There are more circumspect about easing in that way. Today than perhaps they were in the past but more recently you have had evidence of them easing and financial markets have responded to that very positively”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“Let's get back to China. You specifically excluded it before. Talk about the role of China in all this. We were recently on this podcast talking about China's bumpy deceleration, factors that are driving the slowdown there. And just recently, it was announced that China's A-shares were going to increase as a share of the global MSCI index, which should be a positive force for that market. What does that all mean for investors that are focused on EM and China particularly?”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“We think there will. There's two elements to that. One is whether monetary policy in the US and other developed economies provides an easy backset, if I can put it that way, 4am economies, and I think that is more the case now than it was in 2018. But second and more fundamentally is how does inflation in these economies perform? And that's where we think inflation will be pretty low in these economies. Why? Because unlike a lot of DM economies, you have a lot of spare capacity, so there's still a lot of unused resources, and that will tend to depress inflationary pressures going forward. And second, you've had this fall in oil price will contribute to lower headline inflation. Bear in mind, in the EM economies, they tend to consume a lot of petrol and oil within their output. So actually that has a commensurately bigger effect in their inflation rates than it does in developed economies.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“You mentioned that the emerging market fixed income markets have been benefiting from a more dovish tone out of the US Fed, also lower inflation, somewhat softer global growth backdrop. Will those conditions continue and what can we expect from EM bonds?”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“I suppose a good thing is that it's not just our forecasting tools that are telling us we expect to see some stabilization and then recovery in EM growth. You're actually now already seeing it in the data. Let's focus first on outside of China. So EM excluding China, you've seen from around September, October onwards, roughly 1% annualized increase in growth rates measured by our current activity indicator. So there has been already beginnings of recovery from the lows posted in September, October last year. In China, it's more tentative coming through, but we are seeing the beginnings of that as well. So there is some evidence in EM data of a recovery.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“It's almost like a ripple effect from the US of these things. You've seen the Fed has changed direction in terms of its projected tightening. U.S. yields have fallen, and now you're seeing other central banks around the world respond to that, the tone of the ECB, for instance, in Europe, has turned easier, but you're seeing it from other EM central banks now as well, is that that's contributing to an easy implantation. And bear in mind is that we've had the best year in beginning of global equities start this year than in any year since 1991. So that is contributing to an ongoing easing in both global and EM financial conditions.”
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“Yeah, I think it has, much as you think of those, if you focus in particular on the tightening in financial conditions, that's now gone into reverse pretty much. There's been a big reappraisal of US rate prospects. That has led to easier monetary policy prospects globally and on the back of that stronger equity prices. So there's been a reeasiness. Secondly, oil prices have fallen from that mid-October peak by around twenty-five percent, even though they've risen a little bit recently. They're still 25% lower. So with the reversal of at least two of the factors that drove the slowdown last year, we think there's going to be a stabilization in global and EM growth this year and subsequently a recovery, although there'll be lacks. It'll be a gradual recovery in our view.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“to October that has a big impact on consumer abilities to spend in particular household finances. And last, the tariffs and the risk of a trade war. This is a cloud that hung over EM growth increasingly through the year and still hangs over growth to some degree now.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“There are four factors that drove the slowdown in EM economies last year. The first was the slowdown in growth in developed economies. That matters crucially for external demand for EM. So EMs export a lot of goods and services to developed economies. So when developed economies slow, that has a negative impact on EM. That certainly happened last year. The second is that there was a big tightening in global and EM financial conditions, driven by a reappraisal of US rate prospects. So when people expect higher US rates and higher developed economy rates in general, that tends to set the funding availability for EM economy. So that tightening in US conditions in particular had an important negative drag through the course of 2018 on EM economies. The third factor is oil prices. You saw a big rise in oil prices through the course of 2018 at least by 30% to the period.”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT
“So, Kevin, we'll get to the Samia region specifically a bit later on, but let's just start with the big picture on emerging markets. Last year, 2018 was a pretty tough year for emerging market economies and for the markets as well. Why do you think that was the case?”
2019-04-11 · Goldman Sachs Exchanges · What's Next For Emerging Markets? · IDENTIFIED FROM THE TRANSCRIPT