Not So Negative Anymore

is happening around it. And this World Cup was the first time I think both of those things were happening simultaneously. Bobby go Shawn Lessons learned from a strange World Cup. First, though, to the markets, it was not a quiet week in markets. Mid week the Bank of Japan tweaked its yield curve control mechanism a little out of the blue Bloomberg Opinions. Marcus Ashworth joined me for an all encompassing conversation about the year in markets, and then we revisited our conversation

post b O j move. That's all in part two, so stay tuned. Marcus. What do you think were the biggest lessons of two for market participants? Oh? Um, I think the ability for people to forecast the future has been called dramatically into question because in every central bank, in particular some very smart economists i'm sure, did predict a very unpleasant inflation. But I think the ability for people to divine what was going on this year got very rattled, and we were left in obviously a terrible

year for most asset classes. Slight recovery towards the end, lastly as the dollar level weakened, but you know, we're left looking at ourselves thinking, you know, starks bonds, part

from mild commodity. You know, pretty much everything went against us this year, spreads widens, the worst is probably over, but it's just equally as hard to look forward in this year and say, okay, will inflation drop and drop quickly enough to actually change thinking of central banks, which is probably not maybe to hike much more, but to a keep rates high levels a longer. And that's not gonna be easy for bond markets or indeed stock markets

to do too well next year. Yeah, and Marcus, it seemed like everything was trading in tandem, right, Was there anything different about how a classes were traded this year? Well, and I think it shows you that was people having to liquidate, and it didn't matter whether it was bonds or equities. Ever will realized inflation was bad for pretty much every asset class bar as I said, to the occasional commodity, but even gold didn't do very well at times.

So I mean, in that context we saw you know, everything from crypto to particularly text stocks, meme stocks no longer were very meanly and indeed pretty much the safest things long ends, guilts and government bonds and different other types of normally very safe stuff got absolutely pampered at The big lesson is that bonds were really not that safety placed or inflation link bonds either, actually right exactly Now, do you anticipate that changing, that markets will go back

to sort of trading each other class on its own merits, or are we looking at an environment now where traders are just doing things differently. I think it's a change environment and less confident, much more volatile. I don't expect things over it or to be as bad as twenty two was, but I do think volatility is here to stay until we've got much more clarity from central banks view on inflation. Not too much inflation itself is how central bats can feel confident they are not overdoing it

by tightening too much, planning into recessions. I think it is a big risk. Clearly. The risk that center banks are most worried about is not doing enough now on inflation and having a comeback and do more in a later time. They want to make sure they won this battle. The price of that very likely is to be recession. And from there's various large central banks that come to mind. We could talk about any of them, but are they

on a collision path or working side by side? Well, I think clearly the European Central Bank has decided that as they were very late to the past, that they need to do more, and there is a determined Hawkeach element driving that. The FED I think is getting sort of towards the close of their peak, maybe one or two more hikes. The same for the Bank a Mainlan

who are clearly sending some dubb signals. But the one that really watched, I think the next year's find out it is gonna be the back of Japan because they've done nothing. But you know, some of their core inflation to give England they called super core inflation is really quite high in Japanese terms. Well about the two cent target, and that's a rare occasional you haven't seen that for

a few decades. So at some point, possibly by April when they changed the governor, we may see a shift in the Bank of Japan and that could have very big impacts across the rest of the world. Yeah, we are hearing that there is going to be a shift in policy, which would really be dramatic for the world because we haven't seen the Bank of Japan do that

for a long time. In terms of inflation or recession being top of mind in the United States next year, which should it be, well, clearly the Fed wants to battle the inflation genie back into the bottle if it can, and it's prepared to risk recession. I mean, so far, the US ECON is very impressive, particularly on the employment

labor stats. The Fed are trying to do their best, but the markets are continuing to try and look for the pivot, indeed, pricing in future rate cuts, which I don't think is at all the message that the Fed wants, because they want to make sure financial condition are tight enough to do the work, and the longer or the more the stock markets pays up, the harder it is for them to their victory, Marcus, if we move theater for a moment's China's direction of travel. There's a lot

of talk about this now. COVID seems to be ripping through the economy. Can China achieve a five percent growth rate next year? I don't think they can, and and fascinating to say that because I mentioned in Japan earlier the two most important to we say inflation, the sets of numbers are the pan in the sense it's on the way up after being in deflation for so many years. I'm worried about that because it means Japan will have to hype rates and perhaps do some things equally China.

The real worry on China is how quickly inflation is dropping there. It's turning negative on the producer prices and it's plunging on the consumer level down to sort of one and headed lower. That's a real worry because that means that deflation is coming through in China. The Chinese economy is in a bad way, and it doesn't seem to be much light at them, and there as far

as belief on that. So I think China is a real worry for us, and that peaks through into my further worry, which is why the oil price, probably the most important chant in the world, is lower, and I think very heavily China related. Well, let's dig into this a little bit more. How would China goose inflation, assuming that China would want to. I guess China would need to in order to keep the labor market some way strong. I mean the labor markets and tatters at the moment

in China would seem especially for younger people. Yeah, the youth employment of my word, and I think that's they used the word goose there, and I think it's quite interesting because that's the problem with China is that every time they come to a clear evident problem here, whether they're they've got real property bubble having burst, they've got a real problem with employment as you mentioned, and a general lack of Obviously, any momentum in the economy is

completely gone. So they need to pull on that credit lever and get money supply going and breathe inflation in some senses back of the system. But that they pull on this leaver so many times and it's less and less effective. And I think that's a big infrastructure plays or the usual boosting of huge building is not going to be effective and like as it once was. So

that's the trouble. They've got a real issu here with very aging demographics at the same time as they've got ballooning debt, maybe not on a government state level, which optically looks low, but across the rest of the economy, state banks, and insurance companies, all sorts of other aspects spreading the low debtload far and wide. And that's something which is going to be very hard. But to get the same tact in economy. That's why I'm not saying

they don't get a better economy in next year. They probably almost certainly will have they reopened by the days of you know, you mentioned five percent, that's possible, but getting up to six, seven, eight percent growth that we were used to a few years ago, I think it's going to be forms impossible. Marcus, what are the ramifications of your three major worries you mentioned Japan, China and oil.

Will we see ramifications in the bond markets? We may, I mean clearly the issue you know, it's looking at US market to call for everything. It's it's heavily inverseed in the sense that front end yields tier yields are really quite interestingly the price at the moment you can get, you know, for a quarter percent for to your money, and it's it's that makes you know, equities look less attractive.

But you know, the yields and along end are are heavily lower, and I think at the moment too low with starting a bit of a correction, but belowly three and a half percent for ten years in the US is too low and fast fed through. Now already we start to see you mentioned the federal hawk is, but really what what not bond markets recently was that the ECB was much more hawk is as well, and that

combined effect is starting to hit bond markets. I think it's got itself a little bit priced too low and yield, and I think they will start to move higher and yield, and that may well come with economic recession finding up as well. Normally would think that bond yields would will

go lower as econently weakens. But in some senses, I think the markets are pricing ahead of themselves, and I steer that bond markets need a bit more of a shakeout, and I could see yields headed higher across the board. It sounds like an earnings recession is a foregone conclusion given everything you've said, Yeah, and this isn't it. And I think that's the thing to watch is that is that you know where where earnings go. It's very important because you know that, Let's face it, the pandemic was

golden from many many corporates days. A lot of the price increases you come through. I think people starting to realize that, not just due to commodity prices and people moving their prices up ahead of expected commodity rises. So I mean a lot of corporate profits have been very good the last year or two. It's the music stopped this year, and I think that's going to feed through. And I think that corporate profits is something to keep a very close eye on. Does that all give a

lead indicated where credit spreads will go? And indeed, probably equities because their values had a bit of a comeback against growth. Text obviously had a worrying time and things like energy stops them. They're able this year. It's gonna be much harder work, I think in twenty three. And not to say the stop market won't do perssly okay, but it's not going to be very much more stop

pickers market rather than just playing momentum. The UK obviously has had a huge amount of political turmoil in the last year. What happens, to say the least, what happens next a little bit of stability. All this government is currently trying to do is do as little as possible moment I mean the media all screaming, whereas which she so, I tell you exacut it's the hiding um and a little bit of calm is very much appreciated appointment. You know.

He's more of a technocrat, loves a spreadsheet and wants to get some competency back in. It's the only chance they have to you know, which looks pretty slim of retaining any form of parente as time they have to have an excellection. So expect more of the same. You know, we are going to get very type focused on keep trying to get one or two things they can get through. There some promising science and on some financial forms, but

we've got to see delivery. This is what we've not seen the last few years is a lot of every week there's a new policy and yet nothing comes up the back of that. And I think that's what the current government is going to try and calm things down and at least not make things any worse. And that's it's about probably as as better as we can hope for. Marcus Ashworth continues with us, including fresh comments following the Bank of Japan's move to widen the trading band on

the tenure bond yield just hours after we spoke. This is Bloomberg Opinion. You're listening to Bloomberg Opinion. I'm Vannie Quinn and back to my conversation now with Marcus Ashworth. Our is after we first spoke this week, the Bank of Japan announced a decision to tweak its yield curve control mechanism and allow long term yield rise to around point five percent, double the previous limit. The b o J kept its ten year yield and short term rate

unchanged at zero and minus point one percent, respectively. Governor Howrohko Kuroda said the shift wasn't a rate hike and was intended to enhance bond market functionality. Although the government bond interest rates will widen as a result of this measure, we believe that the effects of monetary easing will spread more smoothly. The b o J intends to aim for price stability by increasing the sustainability of this monetary easing. It's not the beginning of an exit strategy. Traders were

caught off guard. The end strengthened four percent, and the mediate aftermath and speculation began over what the next move might be and whether it would wait until horo Heko Kuroda's successor takes over at the Bank of Japan in April. I called Marcus back, I email you, and you said, Wow, amazing, these guys have learned. It's going to cost them a four to but I guess it's better take slugs of pain than for it to go properly. Bang. Did it

go properly bang overnight? A well? I mean it was clearly a very clever move to perhaps shot the market surprise and markets, particularly for foreigners who may have unwound their positions ahead of the crisest New year period. Certainly, the topics at nick Stockings Sees took it quite badly interesting to see the divergence. Nicke down two and a half per cent, the topics so much. Why they're index only down one and a half, that's because the banks are in the topics in next We're not seeing too

much of reaction here in the US either. No, and that's the brilliant bit. I mean you can see it in the you know, the US is are, UK's are, but I mean clearly you know, the banks did very well, and that's princely because the deepening the yeeld curve caused by the winding ten you'll bann up to fifty basis points only got up to forty basis points. Again, the bomb reaction wasn't as big as it could have been, but it means the net interest minded for banks is

wide because the ill curve steeper. We saw that feature to US Treasury bonds. You sort of knock on effect to European bonds. But as far as Japan's concerned, the yen, you know, the currency gained about four percent to the dollar. You know, it's been handled pretty well. I always think

the back of Japan would consider this a win. It doesn't get away from the fact that things are going to have to be addressed before or by April, when the current governor Corona steps down and a new person replaced him and almost certainly under pressure to do even more. The best things for the Japanese is that were probably just as when all of the new central banks will be stopping hiking and maybe even start and think about cuttings.

It means then they will have to hike, will be much less exactly and the end strengthen as you say, four percent, which will help importers. Will it mean much for the Japanese economy this particular move, No, but clearly they are really in the bell to their aggressive inflation, breeding in booteresting of inflation, beating of deflation. That that this is nearing an end, and I think Stony was steadily we will see move away from negative brains and

higher bond yields. About will have something back about it's the first early bit of pain Bloomberg Opinions. Marcus Ashworth is there. I also got some reaction out of Asia. Paul Dobson as an executive editor for Asia Markets at Bloomberg, and he gave me his thoughts. After the market had settled. We discussed these comments from Middle Potata, head of Emerging Market Strategy at t D Bank. It has had global reverberations.

It's hard to put this back in the bag again, and I think it is a start of more steps going forward, so we could see further van widening, we could see dismantlement of the band altogether. What I do think, though, is a governor Corona is probably not in a rush to change things now in terms of the policy rate and y CEC zero percent target. That may not happen until he leaves in April next year we get a

new Banka Japan governor. But look, the reality is that bo j was fighting against an environment with Global Central Bank of titan relatively sharply. Last week we had a whole bunch of hawkish messages from Central Bags ECB, for example, at walking the FED even and it's very hard to contend with that, and continued pressure on the top of the yield curve target as well, so they have no choice in a way. But I don't think this is

a one and done deal. I think that's going to be more to come, and it does spell more bad news for global bonds. Japan holds about a trillion dollars of treasuries still, so we could still see more selling pressure from Japanese investors. So, Paul, you heard there what middle Kotecha said, hard to put this back in the box. How do Japanese investors react in the new year. Will it unsettled markets again? Yeah? I think this is a very significant shift for global markets and for global investors

as well. The Bank of Japan has been that last last of the negative, very low interest rate, and the fact that it's easing off just that little bit signaling a slight shifting policy is going to be enough to get investors very excited. Remember, Japanese investors have three trillion dollars worth of all over the world, and if they see that the home markets are suddenly little more repealing and they start bringing that money back to Japan, it's going to have two effects. It's going to be very

supportive for the end. It's also going to be a downside for all of those sectors where they've got their funds, So not just US treasuries, which is obviously a big one, but also government once of France for example, or Australia where they own a high concentration of the That's something that we're going to be watching very carefully into the new year. It should be a sort of slow and gradual shift rather than a massive, short sharp move as well,

so it could influence global markets significantly. Over a period of time into the new year. As you said, you mentioned three trillion dollars worth of holdings outside of Japan, about a trillion of that so or at least a third of that as in US treasuries, and surely some of that will move back to Japan at a time when the Federal Reserve is also changing its relationship with

the bond market. So how do US investors react? I think the U S investors will be very cautious about the idea that there could be outflows from Japanese investors, which we've already seen the most of this year, but as well as a slight shift in the yield differentials, hedging costs is still very high as well for those Japanese investors taking on exchange rate risks that they probably don't want to do that, and so they may continue to repatricate funds, the alternative being to lay on extra

effect hedges and to hold onto those securities. So it could be that there's more outflows, which means it could be that these extra pressure to the downside on US government. They're higher borrowing costs, which could make it a little bit more painful for the U S Treasury as it seems to refinance that over becoming year. Yeah, the currency are going to be fascinating to watch as well. The other thing to remember is that the global pile of

bonds now at sub zero yields. It's under seven hundred billion dollars, which sounds like a lot, but the peak two years ago was eighteen point four trillion dollars worth. I mean, I know these are all sort of just numbers, right, but it makes a big difference at the same time. Yeah,

this is my favorite a conversation Bunny Um. You know. Finally, fixed income as a's offering a posit of return wherever you are in the world, and that's a really big difference to what we've seen over the past ten years. So in general, it's going to make bonds a more viable perspect for long term investors. It's going to make people more confident wherever they are in the world that they can have decent earnings on their bonds, on their

fixed income failure. So after the pretty huge losses that we've seen this year, it should writen the outlook for in general into three. How will that be seen in the market, pol I mean, it seems like we've had correlations that have been extraordinarily odd for many years. Now that moms are actually you know, returning positive returns, will we see those correlations change. Yeah. I think there's something

people really need to watch very carefully next year. This year, extraordinarily, we've seen stocks and bonds moving very closely together and are very to take correlation, which is terrible if you know you're a sixty for the investor, as terrible as you're long only investor. It's terrible if your pension funds and have your money trailed up in stocks and bonds because you get no shelter. Their stocks sell off because

bonds are selling off at the same time. So it would be really interesting to see whether that relationship breaks and tracement the next year or whether it holds. There's a big argument in a higher inflation universe, the correlation between stocks and bonds stage positive. On the other hand, we're very used to risk on risk off stocks to go up, bonds go down, and the other way around as well. So we'll see whether that re establishes itself as the keys reading the pabtern as we move through

next year. Pulled Ups, an executive editor for Asia Markets, based in Singapore. Stay tuned. Wrapping up the year in politics next with Jonathan Bernstein. This is Bloomberg Opinion. You're listening to Bloomberg Opinion. I'm Vonnie Quinn as this Congress wraps up and we have a small respite before campaigning begins. In earnest, I spoke with Bloomberg Opinions Jonathan Bernstein about developments concerning former President Donald Trump and the scorecard for

this Congress. So, Jonathan, the how Select Committee investigating the January sixth attack on the Capitol did formally recommend the DOJ that former President Donald Trump we criminally prosecuted now for violating for federal laws. Does this change anything? We sort of knew this was going to happen. Yeah, you know, it was expected. The fact that it happened couldn't make

some difference. One of the jobs of the committee was to influence neutral journalists, mainstream journalists who are not partisan, who have a heavy tendency to want to say that both sides did whatever it is bad and just to underscore how extraordinary what happened been, that what Trump did in office really was something that no president has ever come close to doing before, even you know that it's much worse than what Richard Nixon, for example, would have

been impeached and removed for if he hadn't resigned. I think that every piece of that matters. It also matters that the committee gathered a huge amount of information which now goes to the Justice Department and to the Special Prosecutor and makes their job a lot easier. So I do think that politically it would have been certainly a big deal if they had not recommended this, after all

that they did and after everything we've heard. So the executive summary says that Trump, more than any other person, was responsible. Literally it literally says this with a violent mob. Does this take the air out of the bubble for Trump? For four for example, Who's going to come out and defend him. We haven't heard much yet. Yeah. I think we have heard House Republicans saying, well, the committee is not legitimate in the first place, which is not true.

It's hard to tell going forward how all of Trump's legal liabilities will affect his chances of winning the nomination. There are a lot of Republicans at the voter level who like Donald Trump, and that's probably not going to change. What's not clear and has not been clear really from the get go. But certainly as we look at is how many of these people who like Donald Trump also will like other candidates and may find other candidates more appealing.

And you know, it's hard to tell. There certainly are some Republicans who say, if you hit our candidate, that's the one that we will go to, no matter how legitimate the hit is, because we will assume it's not.

But there probably are also Republicans who are saying, you know, this is somebody who lost the popular vote the first time around, barely want in the archtical college, who lost everything the second time around, whose candidates that he pushed lost in two and they may start thinking, maybe it's

time for somebody different. How his legal situation fits into that, it's very hard to know until we actually get to the point where people voting, or we'll see what happens if he's indicted, if he comes to trial, there's a good chance he won't come to trial before the Iowa caucuses, which are only fourteen months away. Right exactly what would his defense look like? I mean, you mentioned one of the pillars there, which would be to discredit the committee itself.

I presume there are the attacks on some of the star witnesses like Cassidy Hutchinson, who picks and so on, that there is in terms of a defense. You know, I think that on some of this stuff, the charges are unusual. And one of the disadvantages for Trump at this stage is he doesn't have a whole lot of experienced lawyers, and a lot of experienced lawyers don't want to work for him because he has a habit of incriminating his lawyers, or at least trying to. He also

has a habit of not paying his lawyers. So how much quality legal helpful? Yet it's harder to tell. There's also, you know, he's under a lot of legal trouble the moral Ago documents case, which the Federalssial prosecutor is also handling.

Both that and the January six stuff that seems more open and shot from what I can tell you know, again not a lawyer, but that's sort of a normal kind of prosecution that has been done many times and seems more straightforward than some of these more complex things where you know, are you figuring out how to charge the former president with trying to overturn an election? You know, there are specific statutes, there are prosecutions that have happened the past. But so he's got that, He's got his

business in trouble in New York. He's got the Georgia State prosecution over interfering with the presidential election there. So he's got a lot of these things going on, which is a lot of pressure. The other problem for him,

and we'll see how much the problem it is. The House Committee recommended prosecution for others, and if that's what happens, some of those people may want to cut deals which could also work out exactly and so, and there could be more people that were not covered by the House referrals the special prosecutor may go after. So we'll see about that also whether that makes Trump's position even more tenuous.

Have any sense of how far the d J will go and trying to protect its credibility in terms of not wanting to be perceived as partisan, is that still an issue? You know, I think both the Attorney General and the president want things to be seen as not partisan. So part of what's important about the January six committee, to the extent that they established a public record, and even though you know, it was mostly Democrats and all

Trump opponents were in the committee. The evidence is the evidence to a large extent that will make it easier for this departments act and having a special counsel brought in makes it easier to act without them worrying about that it seems partisan, you know at some point there's also the flip side of that, which is if you don't indicte someone when you have a strong case against them that everybody knows about, you know, that's not equal

justice either. So to the extent that the goal of the committee was to make it seem like the only reason you would not invite him is because he was president. Jonathan, what do you make of the whole carry Lake case? What's going to happen there is stay. Judge has now said she can present evidence that electoral improprieties called her to lose the election for governor of Arizona, but she has to prove that was intentional misconduct. Side show. Yeah,

I think so. And you know, the fascinating thing from elections is that most of the candidates, even the ones who campaigned on falsely claiming there was fraud, most of them accepted the results. Most of them acted like normal politicians. They congratulated the winner, they conceded the election. There are a few exceptions, with like being one of them. It was not that close an election. It was close, but it was not that close. Of course, there's nothing wrong

with fighting for your rights in court. Candidates have always felt that if there was something in very close elections, you go to court and you try to push where you can. So this is a little more than that, and it's already been certified, so it would be very unusual for her actually win in court. That's I would think extremely unlikely. It's hard to tell how deep rooted

this election denial businesses. That's certainly a case where it does exist separate from the Trump example, Yes, separate forms of playing at electoral denial or what have you. Does a Congress that's finishing up now the legacy of a Jonathan will we see anything done by year end in terms of the Electoral Account Act or anything like that, and you know, just generally what will be the legacy

of this Congress. The Elector Account Act is included in the omnibus bill, the big spending bill that they're doing at the end the Congress, that full spending for this phistical year it's been a very productive Congress because some extent unusually so. The first Congress during Barack Obama's presidency was also quite productive, but the one during Bill Clinton's first Congress, and of course Congress doesn't belong to the president,

but just the shorthand. I hate using that shorthand, but certainly as a contrast to Donald Trump's first two years when that was a unified Republican government and a Congress, although they did pass a major tax cut bill, did very little else and it was probably most remembered for John McCain killing with his big thumbs down their attempt to do healthcare legislation, and then it ended with the

government shutdown. At this point of that Congress, they had shut down the government and it stayed shutdown until Democrats took over the House of Representatives and quickly cut a deal with the still Republican Senate, and Trump went along. So I think that you know, you have a lot of important bills the past. It's not for me to say whether good bills or not. You had major spending to fight the pandemic, to boost the economy, which some people think is what gave us inflation. On some people

saying that inflation was going to happen either way. So you can argue that all you want. We had the infrastructure Bill, we had gun legislation for the first time in a long time. There were just a lot of pieces of legislation tast and quite a few bipartisan pieces

of legislation. There were some things which got done democratic votes only using reconciliation in the Senate, but there were a lot of things that passed by defeating a Republican filibuster, by peeling off ten or more Republicans, such as the legislation defending marriage rights, which just passed a few weeks ago in the Senate. So I think it's going to be looked at as a very productive Congress, and you know,

for Democrats it was successful. There were a lot of democratic priorities that didn't get done, such as their entire voting rights agenda and attempts to codify Roe v Way. But there were a lot of democratic priorities that did get done, and Republicans in the Senate turned out to be willing to cut deals, although Republicans in the House

were not. Well. We will have a chat with you early in the new year about priorities for the next Congress, because, believe it or not, it's changing over already January three and we'll see what whether we get a speaker on January three or not. Bloomer Opinions Jonathan Bernstein world Cup was riven with moral questions from years before played out.

The matches themselves were pretty glorious. I think it's fair to say with surprise coming after surprise, but how to separate the moral questions surrounding the games from the sport itself was a recurring question. I asked Bloomberg Opinions Bobby Ghosh about the thorny questions plaguing many spectators talked to us about this World Cup. It definitely rewarded those who stuck with it, but it was very difficult to watch

a lot of the games. And I'll have a niggling feeling about human rights, all the foreign workers that were exploited during the building of the stadiums and all of the protests that were going on in Iran at the same time. How should we feel about this World Cup? The two aspects to it, and one was what was

taking place on the field of soccer. Probably the best World Cup of my lifetime and the drama, the Cinderella run of Morocco, the crashing of great expectations with the big European teams, and of course Leo Messi, the greatest player of all time, possibly finally getting his hands on the biggest price. That was all taking place on the green turf. Off the turf were bigger questions, political questions,

questions of morals and ethics. This is the first time, I think, in a long long time, when these questions were asked in conjunction with probably the greatest show on Earth. These were not questions asked four years ago when the previous World Cup was held in Russia, another country with highly questionable human rights records, the country that at that

time was occupying Crimea and parts of eastern Ukraine. These were not questioned, asked going way back in the World Cup history in eight when the World Cup was held in Argentina, then ruled by a military junta. I for one, welcome the questions being asked, even if it might appear to be hypocritical in the context of history. If going forward we always ask these questions in every World Cup,

then I think so much the better. We shouldn't kid ourselves that sport can completely be divorced from the reality of the society around us. You mentioned Iran. That is the best definition of how sports and the political reality around it clash. In Iran, you have sports people who are being jailed, who are being tortured, who may face the death sentence because they have dared to express the political opinion. That was an extraordinary stance. Wasn't another part

of Iran's football team. Yes it was, and to some degree it was forced on them by fans demanding a more lean forward posture by their sporting heroes. If the fans want their sporting heroes to speak up on important political topics of the day, then sporting authorities should let it happen. I think you mentioned that it was a little bit hypocritical, that perhaps we were asking these questions now when it comes to a Middle Eastern country and

we haven't been asking them about other major countries. That's something we should think about, right, Yes, we should, and we should now going forward learn the lessons. Let's not be hypocritical the next time. Let's admit that it was hypocritical, but then let's resolve going forward to say hereafter whenever a major sporting event takes place in a country that has questionable human rights records, that mistreats its own people, we will step up and we will hold those countries

to account, just as we have done with Cuttle. Should FIFA have done more? I know, FIFA is not a body that anybody really has all of that much respect for. At the same time they rule world soccer. There's not much you can do without the backing of FIFA. And if it didn't make any kind of a stance, well, FIFA has let itself down, let down the sport, let down the fans. As you say, this is not new. FIFA has always been this way, the IOC has always

been this way. But you know what, sports stars, football players, soccer players themselves are now talking over FIFA's quite often and making themselves heard and more part of them. I say, if the institutions won't speak up, then we should embrace individuals who do it and welcome it and encourage it when it happens. And it was a phenomenal final, as

you say, possibly the best match of our lifetimes. As a fan of of Leo Messi and as an Argentina partisan myself, this was the best possible result in best outcome, but you know what, it was an amazing final, and frankly, whoever had won it, I think I would have embraced that result. Is it okay to enjoy these matches, the camaraderie that we see between teams sometimes after one loses and one wins. I think it's perfectly okay to celebrate the sport as long as we are cognizant of what

is happening around it. And this World Cup was the first time I think both of those things were happening simultaneously. Bloomberg Opinions, Bobby Gosh. That's it for this week. Don't forget We're available as a podcast on Apple, Spotify or your favorite podcast platform, and please do send in your thoughts and opinions email v Quinn at Bloomberg dot net. We're produced by Eric mollow Until next time on Bloomberg Opinion