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00:00WE UNDERSTAND THEY MAY LOOK AT OFFLOADING AND LOOK AT PUTTING NEGATIVE RATES ON LOAN. DOES T IT TELL YOU THEY ARE NERVOUS? LARRY: IT TELLS YOU BELATEDLY THAT THEY ARE TO SOME EXTENT FOR STABILITY OF THE SYSTEM, AND IT CERTAINLY IS PERHAPS ALSO A SIGN THAT NEGATIVE RATES ALONE MAY NOT SPUR THE LENDING ACTIVITY THEY WOULD LIKE TO SEE THROUGH HAPPEN RUN THIS THOSE CHANNELS. FRANCINE: HOW MUCH MORE CREATIVE WILL CENTRAL BANKS GET AND IT'S NOT ONLY THAT THEY ARE THINKING TIME-OUT BOX. THEY DON'T HAVE A BOX ANYMORE. LARRY: WE HAVE HEARD FROM BEN BERNANKE ON THIS PARTICULAR ISSUE. BUT WE HAVE SEEN THAT GLOBALLY I HAD AN NATION HAD BEEN HELD DOWN AND FALLING PRICES TO THE STHEAVENT THEY CAN HOLD THESE LEVELS WE'LL PROBABLY SEE THOSE NUMBERS HOLD FAR BIT. BUT NOT LIKELY TO BE REPEATED. TOM: LARRY, IT'S A FRIDAY. NOT MUCH IS GOING ON IN THE MARKETS. IT'S TIME FOR A HATHAWAY RECALIBRATION. HOW ARE WE DOING IN OUR RENATION? WE ARE REINFLATING. WHAT SCORECARD DO YOU GIVE US FOR OUR RENATION? LARRY: WELL, THE RENATION FOR THINGS LIKE CONSUMER PRICE SINCERE ONLY EVIDENT IN A FEW PLACES AND MOST EVIDENTLY IN THE UNITED STATES WHERE THE FED HAS LARGELY CHOSEN TO IGNORE THE UPTICK IN CONSUMER PRICES. IT'S HARDER TO ACHIEVE LEVELS OF ACTIVITY. OBVIOUSLY, YOU DON'T REALLY SUPPORT MUCH BY WAY OF INFLATION PRESSURES, BUT MARKETS AND FOR THAT MATTER POLICY MAKEERS HAVE BEEN A LITTLE BIT TOO EXTREME IN THEIR TAKE ON WHAT'S DRIVELING WORLDWIDE ECONOMIC ACTIVITY. I THINK THOSE FEARS HAVE QUITE RIGHTLY BEEN PUT TO REST. NOR ARE THEY LIKELY ALL THAT GOOD BUT THOSE MEDSES WE JUST TALKED ABOUT. TOM: IF YOU LOOK AT A DOW JONES CHART, NOT ALL THAT EXCITING. POSITIVE GROWTH A SURPRISE, LARRY, YOU'RE TALKING ABOUT POSITIVE GROWTH SURPRISES. WHERE ARE THEY? LARRY: SO THOSE GOOD SURPRISES ARE FAIRLY BROAD BASED. AS WE SEE THEM ACROSS THE SECTORS OF ECONOMIC ACTIVITY ACROSS AREAS OF GEOGRAPHY, PERHAPS THE MORE ENCOURAGING HAVE BEEN THAT SERVICES HAD BEEN HOLDING UP BOTH DEVELOPED AND EMERGING ECONOMIES THROUGH MOST OF THE CONCERNED PERIODS OF GROWTH THAT WE HAVE RE-VISITTED IN THE LAST SIX MONTHS, IT DOES APPEAR AS THOUGH WE ARE BEGINNING TO TURN THE CORNER. IT SOME OF THE ADJUSTMENTS MAY BE MORE FULLY REALIZED, AND FOR THAT PERSPECTIVE, IT'S ALSO SHOWN A LITTLE BIT BETTER NUMBERS. FRANCINE: LARRY, ARE WE TURNING BETTER NUMBERS? I READ THE KEY TAKE AWAY FROM THE THURSDAY WAS THE DE FACTO CEASE-FIRE AGREED IN THE SHANGHAI MEETING OF G-20 ECONOMIES SEEMS TO BE IN FORCE. IS THAT RIGHT? LARRY: I DON'T REALLY KNOW IF THERE WAS A DE FACTO CURRENCY WAR CESSATION AND SOME OF THE CONCERNS ABOUT DOLLAR STRENGTHS, HOW THAT MIGHT PLAY OUT IN THE EMERGING MARKETS WAS PROBABLY PART OF THAT GENERAL DISCUSSION BUT SURELY NONE OF THE CENTRAL BANKS ARE GOING TO TIE THEIR HANDS TO CURRENCY AND HAVE STRONG OBJECTIONS AND OBJECTIVES THEY ARE TRYING TO ACHIEVE.

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Central Bank Extremes Not Likely Repeated: Hatheway

Larry Hatheway, chief economist at Gam Holding Group, discusses a report that the Bank of Japan may eye possible negative loan rates, reflation efforts by central banks, and where he finds market growth surprises. He speaks on "Bloomberg Surveillance." (Source: Bloomberg)

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