Supply chain delays are on the minds of not only investors, policymakers and business owners, but the average consumer as well. How will recent challenges to supply chains be resolved in the near-term and will this create opportunity for investors?----- Transcript -----Michael Zezas Welcome to Thoughts on the Market. I'm Michael Zezas, head of public policy research and municipal strategy for Morgan Stanley.Daniel Blake And I'm Daniel Blake, equity strategist covering Asia and emerging markets,Michael Zezas And on part one of this special edition of the podcast. We'll be assessing the near-term restructuring of global supply chains and how this transition may impact investors. It's Tuesday, January 11th at 9 a.m. in New York.Daniel Blake And it's 10:00 p.m. in Hong Kong.Michael Zezas So, Daniel, we recently collaborated on a report, "Global Supply Chains, Repair, Restructuring and investment Implications." In it, we take a look at the story for supply chains over the short, medium and long term. Now, obviously supply chains are on the minds of not only investors and policymakers, but the average consumer as well. So I think the best place to start is, how did we get here?Daniel Blake Thanks, Mike. What we're seeing actually is a surge in demand for goods, particularly coming out of the US economy. As we're seeing accommodation of a record stimulus program post-World War Two, combined with a share in spending that has shifted from services towards goods that has been unprecedented. For example, to put this in context, we're seeing U.S. consumer spending on goods increased by 40% in the two years between October 2019, pre-COVID, to October 2021. And that compares with 28% increase that we saw in the entire 11 years following the financial crisis. And so what we're seeing is a sharp fall in services being more than made up for with an increase in spending on goods. And that's put enormous stress on supply chains, production levels, capacity of transportation. And in conjunction with the surge in demand that was seen, we've also seen some acute difficulties emerge in parts of supply chains impacted by COVID. For example, in South Southeast Asia, we've seen semiconductor fabrication, we've seen assembly, and we're seeing components being impacted by staffing issues as a result of COVID health precautions. And this has all been made worse by the uncertainty about sourcing products and lead times. So what we're seeing is manufacturers, we're seeing suppliers, distributors and the and the end corporates that are facing the consumer, putting in additional orders, whether that component is in short supply or not. And so that's increased the stress in the system and created uncertainty about where underlying demand sitsDaniel Blake And so, Mike, amidst this uncertainty, policymakers have really taken note of the issues, not least because of the inflation that's been generated. What reactions are you seeing from the administration, from Congress and from the Fed?Michael Zezas This is obviously unprecedented volatility in the behavior of the American consumer. And so not surprisingly, in the U.S., policymakers don't have the types of tools immediately at their disposal to deal with this. So you've actually seen the administration pull the levers that they can, but they're relatively limited. They've made certain moneys available, for example, for overtime work for port workers and transportation workers to help speed along the process of inventory accumulating at different ports of entry in the US. But there aren't really any comprehensive tools beyond that that are being used.Michael Zezas Daniel, what about policymakers in Asia and emerging markets? How are they reacting?Daniel Blake Yeah. In the short run, we're seeing a combination of tightening of monetary policy. For example, over 70% of emerging markets have been hiking rates by the fourth quarter of 2021. But we're also seeing competition for investment in global supply chains as t