1
00:00:03,279 --> 00:00:07,560
Speaker 1: Broadcasting live to New York Cloomberg eleventh wo to Washington,

2
00:00:07,640 --> 00:00:11,240
Speaker 1: d C, Bloomberg nine nine one to Boston, Bloomberg twelve

3
00:00:11,240 --> 00:00:14,920
Speaker 1: one to San Francisco, Bloomberg nine sixty to the Country

4
00:00:15,040 --> 00:00:18,600
Speaker 1: Series Exam Channel one nineteen and around the globe the

5
00:00:18,600 --> 00:00:23,240
Speaker 1: Bloomberg Radio plus Aven Bloomberg dot com. This is Bloomberg Surveillance.

6
00:00:24,000 --> 00:00:26,360
Speaker 1: Good morning, I'm Karen Moscow along with Tom Keene and

7
00:00:26,400 --> 00:00:28,680
Speaker 1: Michael McKee and the opening valve brought to you by

8
00:00:28,720 --> 00:00:32,000
Speaker 1: s c I imagine when investment operations predictively respond to

9
00:00:32,080 --> 00:00:35,880
Speaker 1: regulatory change. See how SIS Global Operating Platform can be

10
00:00:35,960 --> 00:00:38,720
Speaker 1: your cantelist for a business transformation at s c i

11
00:00:38,800 --> 00:00:43,279
Speaker 1: C dot com slash imagine. US stocks are higher at

12
00:00:43,280 --> 00:00:45,080
Speaker 1: the open. The S and P five hundred is up

13
00:00:45,120 --> 00:00:47,400
Speaker 1: two tenths per center. It's about four points now at

14
00:00:47,479 --> 00:00:50,319
Speaker 1: nineteen ninety two. Dow Jones industrial average up a tenth

15
00:00:50,360 --> 00:00:53,479
Speaker 1: of upper center twenty points to seventeen thousand, nineteen, and

16
00:00:53,520 --> 00:00:55,960
Speaker 1: the Nasdacs of a quarter per cent or eleven points

17
00:00:55,960 --> 00:00:58,760
Speaker 1: to forty six eighty five ten. Your treasury down to

18
00:00:58,920 --> 00:01:01,480
Speaker 1: thirty seconds, the yield one point eight eight percent yell

19
00:01:01,520 --> 00:01:04,000
Speaker 1: then the two year point nine one percent non max

20
00:01:04,040 --> 00:01:06,320
Speaker 1: screw oil down two point two percent or eighty three

21
00:01:06,319 --> 00:01:09,440
Speaker 1: cents at thirty seven forty six of barrel. Comex gold

22
00:01:09,480 --> 00:01:11,440
Speaker 1: is a four tenths per cent or five dollars forty

23
00:01:11,480 --> 00:01:14,240
Speaker 1: cents to twelve sixty three and ounce. The euro at

24
00:01:14,240 --> 00:01:16,760
Speaker 1: a dollar ten thirty seven, and the yen is at

25
00:01:16,760 --> 00:01:20,360
Speaker 1: one thirteen point seven three. Tom and Mike Karen, thanks

26
00:01:20,360 --> 00:01:23,160
Speaker 1: so much, Michael McKee, were getting some interesting headlines. Draggy

27
00:01:23,240 --> 00:01:27,920
Speaker 1: says e c B has averted disastrous deflation. We need stable,

28
00:01:28,120 --> 00:01:31,520
Speaker 1: solid recovery to return to price stability. What else do

29
00:01:31,560 --> 00:01:33,920
Speaker 1: you see? He's clearly defending the e c d S

30
00:01:33,920 --> 00:01:36,760
Speaker 1: program so far um he says, it's what they have

31
00:01:36,800 --> 00:01:40,040
Speaker 1: done today is the best answer to the question of

32
00:01:40,040 --> 00:01:43,120
Speaker 1: whether central banks have any ammunition less. Of course, that

33
00:01:43,280 --> 00:01:46,560
Speaker 1: just moves the question forward. We've got two guests to

34
00:01:46,720 --> 00:01:49,520
Speaker 1: provide answers to the question forward. Kitchuks will join us

35
00:01:49,560 --> 00:01:51,720
Speaker 1: here in a bit right now. Christopher Wheeler has been

36
00:01:51,760 --> 00:01:55,080
Speaker 1: such a great help with us on the reality of

37
00:01:55,160 --> 00:02:00,480
Speaker 1: financiers and bankers to work within this original territory. Sorry,

38
00:02:00,800 --> 00:02:04,960
Speaker 1: Christopher Wheeler to have you play macro economist, will these

39
00:02:05,040 --> 00:02:10,399
Speaker 1: historic actions today allowed Deutsche Bank or Santander to loan

40
00:02:10,480 --> 00:02:16,160
Speaker 1: out more money to provide investment and create jobs. Well,

41
00:02:16,200 --> 00:02:19,040
Speaker 1: good morning or good afternoon from here. Um, I guess

42
00:02:19,080 --> 00:02:21,200
Speaker 1: the answer to that is in steely and that's what's

43
00:02:21,200 --> 00:02:23,480
Speaker 1: obviously Tang is playing on. That is exactly what they

44
00:02:23,520 --> 00:02:25,240
Speaker 1: ought to be doing, because clearly, if you have the

45
00:02:25,240 --> 00:02:28,079
Speaker 1: option of placing your money overnight with the ECB at

46
00:02:28,080 --> 00:02:30,480
Speaker 1: negative interlessly so actually getting out into the hands of

47
00:02:30,480 --> 00:02:33,239
Speaker 1: the customers who are paying obviously a much higher yield,

48
00:02:33,400 --> 00:02:35,560
Speaker 1: you want to be doing it. Um. The question is,

49
00:02:35,680 --> 00:02:38,560
Speaker 1: you know, is the economy strong enough to support that

50
00:02:38,800 --> 00:02:41,440
Speaker 1: or is the banking system strong enough to support that?

51
00:02:41,520 --> 00:02:44,800
Speaker 1: We're from just Daily this morning. He's not focused on loans,

52
00:02:44,840 --> 00:02:48,560
Speaker 1: he's focused on operations. Is there an appetite in Europe

53
00:02:48,600 --> 00:02:53,200
Speaker 1: to do more banking business? Yeah? Much an interesting quote

54
00:02:53,200 --> 00:02:55,760
Speaker 1: from just Daily because clearly we've talked to before about

55
00:02:55,800 --> 00:02:59,320
Speaker 1: the problems of trying to get the bank's platforms in order,

56
00:02:59,400 --> 00:03:01,919
Speaker 1: banks like the steep Deutsche Bank that you talked earlier.

57
00:03:02,080 --> 00:03:04,160
Speaker 1: But I guess if we look at the banks for

58
00:03:04,240 --> 00:03:07,160
Speaker 1: the money supplying, if you want the economy in Europe

59
00:03:07,200 --> 00:03:09,840
Speaker 1: so you know the the the Italian the regional banks,

60
00:03:09,840 --> 00:03:12,480
Speaker 1: and that the Spanish banks, the German spark hassan Um,

61
00:03:12,880 --> 00:03:15,440
Speaker 1: you know, the French mutual banks. You know, for these

62
00:03:15,639 --> 00:03:17,120
Speaker 1: these guys, these are the guys who should be out

63
00:03:17,160 --> 00:03:19,720
Speaker 1: there lending money. And while you know their systems aren't.

64
00:03:19,960 --> 00:03:22,320
Speaker 1: For Stein, I think I would say, you know, these

65
00:03:22,400 --> 00:03:24,919
Speaker 1: guys have much simpler business models and therefore the better

66
00:03:24,919 --> 00:03:27,680
Speaker 1: position to get out there and lend that money. How

67
00:03:27,720 --> 00:03:31,760
Speaker 1: far are the banks away from being reasonably healthy. There's

68
00:03:31,880 --> 00:03:34,400
Speaker 1: been a lot of concerned or commentary going into this.

69
00:03:34,480 --> 00:03:38,200
Speaker 1: That's whatever drug he does gets partially marked up by

70
00:03:38,240 --> 00:03:42,000
Speaker 1: the fact that banks need more capital. In Europe. I

71
00:03:42,080 --> 00:03:44,240
Speaker 1: think it's a it's a mixture. And what we have

72
00:03:44,400 --> 00:03:47,240
Speaker 1: is some banks allownd of politically where you allowed to

73
00:03:47,600 --> 00:03:50,360
Speaker 1: said the southern European countries, where we still have bellibally

74
00:03:50,440 --> 00:03:52,840
Speaker 1: high levels of non performing loans, and so that's a

75
00:03:52,880 --> 00:03:55,760
Speaker 1: great concern. But on the other hand, we have, as

76
00:03:55,760 --> 00:03:58,280
Speaker 1: I said, banks in those legions who also pretty healthy.

77
00:03:58,320 --> 00:04:00,760
Speaker 1: You can get out there and lend. Yeah, some of

78
00:04:00,800 --> 00:04:03,720
Speaker 1: the bigger banks, the problem again is not so much

79
00:04:03,760 --> 00:04:06,080
Speaker 1: getting their capital and levels in order, because they've they've

80
00:04:06,120 --> 00:04:08,000
Speaker 1: done a lot of work in that that earlier. The

81
00:04:08,040 --> 00:04:10,440
Speaker 1: problem is, and again we keep talking about this is

82
00:04:10,480 --> 00:04:13,920
Speaker 1: actually if you want sharpening up the operational side of

83
00:04:13,960 --> 00:04:17,200
Speaker 1: their business while they while we're going through, actually feel

84
00:04:17,240 --> 00:04:20,440
Speaker 1: it's where the LIV generation is putty dull, particularly around

85
00:04:20,480 --> 00:04:23,120
Speaker 1: the capital market space. I have been here Mike for

86
00:04:23,160 --> 00:04:27,040
Speaker 1: what is it, thirty two years? Thirty seven years? Mike,

87
00:04:27,080 --> 00:04:30,560
Speaker 1: you've been here for fifty four years? Is it? From June?

88
00:04:31,040 --> 00:04:35,960
Speaker 1: Here's the headline we've never seen. Drag didn't really think

89
00:04:36,160 --> 00:04:40,520
Speaker 1: or talk about helicopter money. I'm serious, that's the headline.

90
00:04:40,880 --> 00:04:47,320
Speaker 1: Drag didn't really think or talk about helicopter money. Every listener,

91
00:04:47,400 --> 00:04:50,800
Speaker 1: Christopher Wheeler knows that's it a logical idea. If you

92
00:04:50,960 --> 00:04:55,640
Speaker 1: put a Sikorski over any city capital in Europe and

93
00:04:55,760 --> 00:04:58,960
Speaker 1: you dropped money from the helicopter, what would be the

94
00:04:59,000 --> 00:05:03,719
Speaker 1: effect on your banking industry? Well, yeah, that's a that's

95
00:05:03,520 --> 00:05:05,640
Speaker 1: a very good point because what you know, I'm just

96
00:05:05,760 --> 00:05:07,560
Speaker 1: I'm staly some of the blogs that are coming through

97
00:05:07,680 --> 00:05:09,520
Speaker 1: to the experts in fixed income and I'm not not

98
00:05:09,640 --> 00:05:12,760
Speaker 1: one of those. Maybe, um is the concern, of course,

99
00:05:13,040 --> 00:05:15,400
Speaker 1: about you know, when what happens when the music stops

100
00:05:15,520 --> 00:05:17,880
Speaker 1: because you know, if this isn't enough, that's that's a

101
00:05:17,960 --> 00:05:20,560
Speaker 1: major issue. The second thing is you're going to start

102
00:05:20,600 --> 00:05:22,679
Speaker 1: thinking ahead to say, how the heck do we unwind

103
00:05:22,720 --> 00:05:25,080
Speaker 1: this situation and get back to some kind of normality.

104
00:05:25,480 --> 00:05:27,960
Speaker 1: And you know that's going to be a big, big question.

105
00:05:28,000 --> 00:05:31,800
Speaker 1: And it plays to your question about the Sikorski. Well,

106
00:05:31,839 --> 00:05:35,279
Speaker 1: they have particular can way way down the road with

107
00:05:35,360 --> 00:05:38,080
Speaker 1: four year t l t r O s um. They're

108
00:05:38,080 --> 00:05:42,080
Speaker 1: gonna lend money to banks for four years to make

109
00:05:42,200 --> 00:05:46,800
Speaker 1: up for the negative interest rates. So we don't have

110
00:05:46,839 --> 00:05:49,280
Speaker 1: no idea what's gonna happen between now and then. Well,

111
00:05:49,279 --> 00:05:51,680
Speaker 1: I think I think that's that's the that's the point.

112
00:05:51,480 --> 00:05:53,159
Speaker 1: And he's the one thing you can see in his

113
00:05:53,200 --> 00:05:55,240
Speaker 1: speech is the fact that he's saying it's going to

114
00:05:55,360 --> 00:05:58,440
Speaker 1: stay low for an awful lot longer. And I think

115
00:05:58,480 --> 00:06:01,200
Speaker 1: that's one of the big factors here. Um. And as

116
00:06:01,240 --> 00:06:03,560
Speaker 1: you say, they're kicking, they're kicking the can down the

117
00:06:03,560 --> 00:06:06,880
Speaker 1: load four years and you know it the whalley is

118
00:06:06,960 --> 00:06:08,800
Speaker 1: this is just going to go on and on and

119
00:06:08,839 --> 00:06:11,800
Speaker 1: you know, and you know it's now long times is

120
00:06:11,880 --> 00:06:15,880
Speaker 1: this classes started Chris mate textbook would say you see

121
00:06:15,920 --> 00:06:21,839
Speaker 1: bank combination transactions, you see is there a template in Europe?

122
00:06:21,880 --> 00:06:24,479
Speaker 1: I mean, I remember fort this bank in Belgium and

123
00:06:24,520 --> 00:06:27,480
Speaker 1: all that. Do you just assume there will be mergers

124
00:06:27,640 --> 00:06:33,080
Speaker 1: or because of nationhood and culture, that's impossible. Look, that's

125
00:06:33,080 --> 00:06:35,040
Speaker 1: a very good question. Tom we we we kicked back

126
00:06:35,080 --> 00:06:37,000
Speaker 1: to and flow. I think at the top end of

127
00:06:37,080 --> 00:06:39,000
Speaker 1: the big big banks, that's not going to happen, just

128
00:06:39,040 --> 00:06:41,360
Speaker 1: as in the United States. I see Mr Cash Carl

129
00:06:41,480 --> 00:06:43,760
Speaker 1: Is just called a conference on too Big to Fail

130
00:06:43,880 --> 00:06:45,840
Speaker 1: in Minneapolis. This thing will go on and on on

131
00:06:45,920 --> 00:06:48,000
Speaker 1: big banks. But if we go into the legion they

132
00:06:48,000 --> 00:06:50,880
Speaker 1: were going to Italy, we're going to Spain um to

133
00:06:50,960 --> 00:06:54,680
Speaker 1: an extent Porsheple. I think we absolutely will see combinations

134
00:06:54,720 --> 00:06:57,480
Speaker 1: of banks to try and deal with these issues, but

135
00:06:57,560 --> 00:06:59,880
Speaker 1: it's not going to happen amongst the big players. Thank

136
00:07:00,040 --> 00:07:02,599
Speaker 1: getting a boost today in Europe Deutche Bank in Europe

137
00:07:02,640 --> 00:07:05,440
Speaker 1: up two point seven percent sick and two point five

138
00:07:06,200 --> 00:07:10,000
Speaker 1: un credit up six and three quarters percent. Who's longer

139
00:07:10,120 --> 00:07:13,160
Speaker 1: term going to be the biggest beneficiaries of what the

140
00:07:13,160 --> 00:07:18,040
Speaker 1: ECB did today. Well, I suppose it's it's a bit

141
00:07:18,040 --> 00:07:21,520
Speaker 1: of a mixture. I mean, the the The argument is

142
00:07:21,560 --> 00:07:24,480
Speaker 1: that on the one side, the additional queue which is

143
00:07:24,520 --> 00:07:26,880
Speaker 1: putting on the table and this this, this, this long

144
00:07:27,000 --> 00:07:30,200
Speaker 1: dated lending facilities, then you're going to probably say the

145
00:07:30,240 --> 00:07:32,920
Speaker 1: banks have got the biggest element of netting sustincome on

146
00:07:32,960 --> 00:07:35,600
Speaker 1: their balance sheet. In other words, the bank's mostly exposed

147
00:07:35,640 --> 00:07:38,080
Speaker 1: to the to the late. On the other hand, you know,

148
00:07:38,240 --> 00:07:42,240
Speaker 1: the problem you have is again looking at how you

149
00:07:42,280 --> 00:07:46,840
Speaker 1: know whether the very big banks are going to benefit most,

150
00:07:46,880 --> 00:07:49,840
Speaker 1: because obviously they perhaps have less net insusting income and

151
00:07:49,880 --> 00:07:51,760
Speaker 1: they're going to befit from having higher levels of the

152
00:07:51,880 --> 00:07:54,440
Speaker 1: income which protects them. You know that the problem negative

153
00:07:54,440 --> 00:07:58,240
Speaker 1: inslessly so it's really anybody's guest. But clearly the uniqu

154
00:07:58,240 --> 00:08:00,880
Speaker 1: clidit move is telling you that the the Neuropean banks

155
00:08:00,880 --> 00:08:02,880
Speaker 1: are being favored by the market on the basis that

156
00:08:03,360 --> 00:08:05,600
Speaker 1: this four year facility is going to be very beneficial

157
00:08:05,640 --> 00:08:08,360
Speaker 1: to them. Thirty seconds, how have you amended your Deutsche

158
00:08:08,360 --> 00:08:12,920
Speaker 1: Bank view, Christopher Wheeler. I don't think I've amended it

159
00:08:12,960 --> 00:08:14,560
Speaker 1: at all. I think they have so much on the

160
00:08:14,560 --> 00:08:17,120
Speaker 1: table at the moment in terms of least ructuring the business,

161
00:08:17,160 --> 00:08:19,480
Speaker 1: but actually looking at the fund near the fundamentals of

162
00:08:19,920 --> 00:08:23,200
Speaker 1: if you want the flows of lending and doing business

163
00:08:23,240 --> 00:08:25,400
Speaker 1: at the moment is probably secondly to seeing you know

164
00:08:25,440 --> 00:08:28,440
Speaker 1: the bank in a position where it's it's operational platform

165
00:08:28,640 --> 00:08:31,640
Speaker 1: is totally aped. Christopher Wheeler, thank you a great update

166
00:08:31,680 --> 00:08:34,800
Speaker 1: with Atlantic equities and moving us forward with a great

167
00:08:34,800 --> 00:08:37,760
Speaker 1: set of guests. This warning will synthesize all this with

168
00:08:37,840 --> 00:08:41,640
Speaker 1: Kit Jukes here in a minute. If you're just joining us.

169
00:08:41,840 --> 00:08:44,599
Speaker 1: We knew it would be interesting because there are a

170
00:08:44,679 --> 00:08:49,079
Speaker 1: bunch of nerds, but it was extraordinary. There's just no

171
00:08:49,160 --> 00:08:52,720
Speaker 1: other way to put up Mike. The headlines speak of it.

172
00:08:52,800 --> 00:08:56,679
Speaker 1: The whip saw within the market weak Euro strong, Euro

173
00:08:56,880 --> 00:09:02,720
Speaker 1: now Euro strength one and fifty eight, yields all over

174
00:09:02,760 --> 00:09:05,440
Speaker 1: the place, Gold all over the place, up five dollars

175
00:09:05,480 --> 00:09:09,200
Speaker 1: now twelve sixty two, the ounds, the Dow up thirty

176
00:09:09,240 --> 00:09:13,280
Speaker 1: three points, SMP up four points of VIX eighteen point

177
00:09:13,320 --> 00:09:18,920
Speaker 1: one three Balla's checking with Michael Byr and get the

178
00:09:18,960 --> 00:09:22,000
Speaker 1: latest world in national headlines by time. Thank you very much.

179
00:09:22,040 --> 00:09:25,480
Speaker 1: Tonight it's the Republicans turn to debate. The four remaining

180
00:09:25,520 --> 00:09:28,680
Speaker 1: presidential candidates will debate in Miami. It comes as Ted

181
00:09:28,720 --> 00:09:32,520
Speaker 1: Cruz is hoping former presidential candidate Jeff Bush will throw

182
00:09:32,559 --> 00:09:36,800
Speaker 1: his support behind him. Last night, Democratic presidential candidate Hillary

183
00:09:36,880 --> 00:09:40,959
Speaker 1: Clinton and Bernie Sanders clashed in their debate on Univision.

184
00:09:41,400 --> 00:09:45,000
Speaker 1: While they disagreed on several issues, they agreed about Donald Trump.

185
00:09:45,360 --> 00:09:48,080
Speaker 1: Trump was in the middle of the so called birthal

186
00:09:48,480 --> 00:09:53,760
Speaker 1: movement trying to be legitimize the president of the United

187
00:09:53,800 --> 00:09:56,480
Speaker 1: States of America. I called him out when he was

188
00:09:56,559 --> 00:10:01,319
Speaker 1: calling Mexicans rapists, when he was engaging in rhetoric that

189
00:10:01,440 --> 00:10:05,560
Speaker 1: I found deeply offensive, I said, basta. Thousands of people

190
00:10:05,600 --> 00:10:08,280
Speaker 1: already have been evacuated as a second round of rain

191
00:10:08,400 --> 00:10:12,600
Speaker 1: hits an already inundated northern Louisiana. Flooding in some places

192
00:10:12,679 --> 00:10:16,199
Speaker 1: is up to the rooftops. Three people have drowned in Oklahoma,

193
00:10:16,280 --> 00:10:20,280
Speaker 1: Texas and Louisiana. Germany could have some valuable information on

194
00:10:20,320 --> 00:10:24,000
Speaker 1: the Islamic State group. The country's federal criminal police say

195
00:10:24,280 --> 00:10:28,400
Speaker 1: they have files containing personal information on militants and believe

196
00:10:28,480 --> 00:10:31,720
Speaker 1: that information to be authentic. According to Britain Sky News,

197
00:10:31,800 --> 00:10:36,000
Speaker 1: the stick contains about twenty two thousand files with telephone

198
00:10:36,080 --> 00:10:39,640
Speaker 1: numbers and real names of the Islamic State fighters. Global

199
00:10:39,679 --> 00:10:42,280
Speaker 1: News twenty four hours a day, powered by our two

200
00:10:42,360 --> 00:10:45,199
Speaker 1: hundred journalists more than a hundred fifty news bureaus from

201
00:10:45,200 --> 00:10:48,120
Speaker 1: around the world. Michael, bar and Banka, thanks so much.

202
00:10:48,120 --> 00:10:52,400
Speaker 1: You're gonna job forty kitch Uss to synthesize this historic

203
00:10:52,520 --> 00:11:02,319
Speaker 1: day and monetary economics. Next Bloomberg Surveillance. Bloomberg's Avalance is

204
00:11:02,320 --> 00:11:04,320
Speaker 1: brought to you by s c n B D Bank

205
00:11:04,400 --> 00:11:06,120
Speaker 1: for businesses on the move. Are you looking for the

206
00:11:06,200 --> 00:11:08,760
Speaker 1: right banking partner? Go to s CNB dot com to

207
00:11:08,840 --> 00:11:11,000
Speaker 1: learn more. Now open in Long Island City, Get your

208
00:11:11,000 --> 00:11:12,559
Speaker 1: business moving with s E n V