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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the radio plus mobile LAP and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: This updates brought to you bi Sector spider e t F.

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Speaker 1: So why buy a single stock and you can invest

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Speaker 1: in the entire sector? Visits sector spd r S dot

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Speaker 1: com or call six sector et F. The aftershocks of

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Speaker 1: the UK's vote to leave the European Union reverberating across

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Speaker 1: financial markets after a weekend of political turmoil. The pound

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Speaker 1: is extending its records sell off. European equities are dropping

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Speaker 1: to levels last seen in February. U S Dock Index

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Speaker 1: Future is also lower. We checked the markets every fifteen

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Speaker 1: minutes throughout the trading day on Bloomberg snp E Many

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Speaker 1: futures down twelve and a half points, Dowly Many futures

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Speaker 1: down one hundred sixteen Nasadaki, Many futures down thirty two

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Speaker 1: docks in Germany's down two point one per cent. So

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Speaker 1: is the foot sea one hundred ten your treasury of seconds.

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Speaker 1: The yield one point four seven percent yield on the

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Speaker 1: two year point five seven percent NIMAX screwed oil down

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Speaker 1: two point two per cent or a dollar two to

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Speaker 1: forty six sixty two. A barrel Comax gold is of

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Speaker 1: nine tenths per cent or eleven dollars eighty cents to

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Speaker 1: thirteen thirty four twenty and ounce. The euro a dollar

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Speaker 1: oh nine seven six, the British pound a dollar thirty

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Speaker 1: one eighty two, and the yen one oh one point

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Speaker 1: five seven. Mettronics saying it'll buy Hardware International of Framingham,

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Speaker 1: Massachusetts for about one point one billion dollars. Hardware up

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Speaker 1: ninety two percent in early trading. PepsiCo plenty to revamp

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Speaker 1: its lineup of diet colas, including renaming one product and

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Speaker 1: releasing an older formulation of another in a bid to

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Speaker 1: revive sales. And that's a bloomberg business flash. Tom and

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Speaker 1: Mike Karen, thank you very much. We are watching futures

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Speaker 1: turn around now and start to deteriorate again. S ANDP

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Speaker 1: features off by twelve about six tenths of eight percent.

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Speaker 1: It's a seven tenths decline for Doubt features there down

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Speaker 1: a hundred and twelve points right now. And ASDAK features

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Speaker 1: off by thirty one three quarters of eight percent. The

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Speaker 1: foot set down hundred and twenty five points the pound

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Speaker 1: at one. The Bloomberg Futures Report is brought to you

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Speaker 1: by Interactive Brokers at CME Group. If you're looking for

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Speaker 1: global futures contracts with low trading costs, look no further.

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Speaker 1: Interactive Brokers is the industry leader lead more at Interactive

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Speaker 1: Brokers dot com slash c m E Group. It's on

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Speaker 1: Wall Street. The following is from Bloomberg View, opinions and

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Speaker 1: commentary from Bloomberg columnists and Megan mccartell, a columnist for

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Speaker 1: Bloomberg View. Why did people vote for Brexit? One answer

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Speaker 1: is that transnational elites tried to build a state without

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Speaker 1: a nation. The current mess in the EU is the result.

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Speaker 1: There's a reason nineteenth century architects of fledgling states spent

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Speaker 1: so much time and effort in nurturing national identity, but

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Speaker 1: the EU never did that work. No one identifies themselves

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Speaker 1: as European when you ask where they're from, and while

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Speaker 1: an EU white soccer team would be invincible, who would

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Speaker 1: root for it? These sorts of tribal affiliations do cause problems,

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Speaker 1: which is why elites were so eager to tamp them down. Unfortunately,

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Speaker 1: they're also what glues polities together and makes people willing

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Speaker 1: to sacrifice. Elites missed this because they're the one group

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Speaker 1: that has a transnational identity, and in fact, the arguments

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Speaker 1: for the EU look a lot like the old arguments

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Speaker 1: for national states. It empowers us against them. Unhappily, for elits,

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Speaker 1: there's no Cosmopolistan to which they can move. They have

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Speaker 1: to live in physical places filled with other people whose

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Speaker 1: loyalties are to a particular place in way of life,

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Speaker 1: not the joys of rootless cosmopolitanism. So it would be

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Speaker 1: folly to let their fledgling identity drive them into a

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Speaker 1: war with the neighbors they can't win. Has happened with

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Speaker 1: so many new states in the nineteenth and twentieth centuries.

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Speaker 1: Trying to reforge common identities with those neighbors instead of

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Speaker 1: demonizing them would be a good idea. Unfortunately, it's not

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Speaker 1: clear that transnationalism is any more capable of tempering its

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Speaker 1: own accesses than the nationalism that preceded it. On Megan

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Speaker 1: McCardell from more View, Please go to Bloomberg View dot

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Speaker 1: com review go on the Bloomberg terminal. This has been

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Speaker 1: Bloomberg View Blomberview commentaries can be heard hourly weekdays on

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Speaker 1: Bloemberg Radio. The highlight this morning, besides headlines worth these

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Speaker 1: in Europe, has been European banking. I don't know if

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Speaker 1: they describe it as highlight. Well, it has been important headlines.

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Speaker 1: There's a headline from Miracle, there's a headline here, there's

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Speaker 1: a headline there. There are no headlines from the European bankers.

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Speaker 1: Christopher Wheeler has given us terrific perspective this weekend and

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Speaker 1: before with Atlantic Equities. Christopher Wheeler, you've worked at major

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Speaker 1: London banks, You've studied their financials. What are the bankers

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Speaker 1: of Europe doing right now? What what do they do

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Speaker 1: when they see their equity a road as it's a

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Speaker 1: roading Well, I think first of all, obviously they try

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Speaker 1: and reassure their customers and their staff that the business

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Speaker 1: as usual and this is a blip caused by a

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Speaker 1: single event. Of course, as we all know, single events

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Speaker 1: have a habit of turning into something rather than uglier

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Speaker 1: exactly time. At the same time, undoubtedly there's an awful

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Speaker 1: lot of work being done on making sure the bank's

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Speaker 1: liquidity is making sure they stay close to their clients

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Speaker 1: and obviously reviewing the closely the loan book. How close

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Speaker 1: are we to bank ballards or nationalization? Look, I think

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Speaker 1: that at the moment is highly unlikely because I think

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Speaker 1: the capital position at the moment and Tom, you know,

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Speaker 1: if your stocks is thirty percent down in theory, that

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Speaker 1: tells you learning is going to fall by or more.

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Speaker 1: I don't see that at the moment. But the capital

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Speaker 1: is leasingly strong or very strong in most case some

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Speaker 1: cases strong liquidity um and you know, pretty decent leverage.

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Speaker 1: This is uh, this is still a case of trying

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Speaker 1: to absorb the shock and this massive uncertainty that we

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Speaker 1: now have as nobody knows the way ahead. We have

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Speaker 1: complete confusion in the UK with no no opposition, no

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Speaker 1: no government to say, and we have a problem of

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Speaker 1: nobody knowing the timetable for the negotiation with the EU,

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Speaker 1: between the EU and the UK, and that just you know,

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Speaker 1: uncertainty is the biggest enemy of the market. Well, there

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Speaker 1: is chris a report this morning that Italy is considering

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Speaker 1: a forty four billion dollar injection of capital into its banks,

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Speaker 1: despite that UNI credit still down seven percent the morning.

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Speaker 1: Is this tarp is are they finally getting around to

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Speaker 1: the U S model. Look, I think that they are.

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Speaker 1: They are showing that they are not going to just

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Speaker 1: stand by and see problems emerge. If they're well, it's

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Speaker 1: the funding of the banks is under pleasure because people

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Speaker 1: are concerned about the impact on capital, they're going to act. Clearly,

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Speaker 1: that would be as you say, talk don't forget the

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Speaker 1: UK told you how to do tark just we just

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Speaker 1: didn't do it as well as the United States. We

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Speaker 1: did exactly the same. We just pumped money into into

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Speaker 1: Lloyd's Little Bank of Scotland um in the same way

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Speaker 1: that you did to the U S banks. But we

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Speaker 1: were still are in those banks. So yes, you're lying.

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Speaker 1: It's this concept of central bankers saying we will do

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Speaker 1: whatever it takes at this point in time to stabilize

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Speaker 1: the market. A grizzle pro like you. Aren't you concerned

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Speaker 1: at the rollover in Uni Credit, the rollover in Deutsche Bank,

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Speaker 1: the rollover and Berkeleys. They refuse to believe that long

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Speaker 1: only buy side can sider around on a Monday morning

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Speaker 1: and say, well, this is harsh, but we can withstand it.

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Speaker 1: Come on, Chris, look, I think that the bottom line

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Speaker 1: is this is this is an unpless addented shock. But

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Speaker 1: it's a weird, weird kind of shock because I unlike

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Speaker 1: too in the class when things were hitting as left

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Speaker 1: lne center. We we've got one very clear issue to

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Speaker 1: deal with, which has knock on impacts, allowed curlencies and

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Speaker 1: allowed allowed markets, and I think the focus on that

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Speaker 1: is actually as an fun manager at the moment, I

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Speaker 1: don't need to own banks given the uncertainty allowed banks.

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Speaker 1: I mean, look, these bank stocks are down ten today

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Speaker 1: that I'm the markets off two percent. The border market

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Speaker 1: is not showing the same concerns as the bank sectors.

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Speaker 1: This is like, I don't know the answer for the banks.

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Speaker 1: I'm just going to leave them alone for the time being,

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Speaker 1: and I think they're just walking away and saying let's

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Speaker 1: just see how it settles down. Are any banks close

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Speaker 1: to the edge? I mean, you look at Barclay's down

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Speaker 1: another sixteen today, and you have to wonder, if you're

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Speaker 1: a non expert like myself, at what point does somebody say, oh, well, look,

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Speaker 1: I would suggest at the Bank of England is already

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Speaker 1: looking at this and saying is this something that should

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Speaker 1: concern us? If it is, what actions do we take

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Speaker 1: us to to obviously safeguard any concerns about Barclays or

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Speaker 1: in indeed any of the UK banks, and we'll try

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Speaker 1: and take those actions. And yeah, they've got to be

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Speaker 1: careful here because they don't want to start some kind

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Speaker 1: of scare going aloud about the banks when what we're

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Speaker 1: seeing here again, I can't even start to explain to

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Speaker 1: Tom was over here at the weekend, but what's occurred

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Speaker 1: since slide with the Labor Party from the main opposition

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Speaker 1: party imploding. So we don't just have a gap in government,

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Speaker 1: we have a gap in opposition and we have no

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Speaker 1: idea who's I mean, the constantly ours to Darling, to

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Speaker 1: the Chance of the Exchequer, who did bail out the

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Speaker 1: British banks in two thousand and eight, is asking the

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Speaker 1: questions where all these people who land the exit campaign

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Speaker 1: because nobody's stepping forward to time work out what to

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Speaker 1: do next. Isn't the important thing though, that the Bank

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Speaker 1: of England is running the banks and there is stability there,

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Speaker 1: Ye absolutely like And you know, I think one of

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Speaker 1: the great things is that Mark Arney is is is

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Speaker 1: probably a better communicate than this plead acessor. Howver much

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Speaker 1: this plead decessor is admired, and indeed he has been

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Speaker 1: on the wise today saying, you know, this is another

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Speaker 1: market hiccup. Markets go up, markets go down. I think

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Speaker 1: Mark s lengthy is he's got much more experienced and

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Speaker 1: other markets than Irving Head, and I think that from

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Speaker 1: that perspective, I think we're really lucky to have him

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Speaker 1: in place at the moment. Christopher Wheelers, thank you so much,

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Speaker 1: greatly appreciated. And the banking with a bit of a

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Speaker 1: bid right now, Mike, let's do an extensive data check

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Speaker 1: before we go to our conversation with the chairman. Uh, simply,

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Speaker 1: I would almost think futures could go green this morning,

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Speaker 1: the way we're gyrating around negative negative the catalyst to

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Speaker 1: get them that far, but they're back to negative nine.

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Speaker 1: They're feeling a little bit better than they were earlier

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Speaker 1: this morning. Yeah, and and yields doing it's just a

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Speaker 1: little bit improvement on the table. Sterling his benchmark. What

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Speaker 1: do we have in sterling right Well, we're looking at one.

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Speaker 1: It's above it's loads of one thirty one and fifty two,

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Speaker 1: but it's been holding below one thirty one. That's the

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Speaker 1: grind lower there, and of course the foot see no

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Speaker 1: real change in its position down a hundred thirty one

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Speaker 1: points two point one percent. That's off the percentage lost

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Speaker 1: for most of the day so far. When you first

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Speaker 1: observed Alan Greenspan, was he sleeping on the floor of

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Speaker 1: the Oval office, Well, the first time I met Al

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Speaker 1: green but I think he was watching a Baltimore Orioles game.

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Speaker 1: But well, that would because we have to find out

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Speaker 1: if he switched his allegiance to the Washington Nationals. We'll

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Speaker 1: take us to the game tonight. Did you ever think

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Speaker 1: we would talk to him about the collapse of the

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Speaker 1: European model? I never really thought, and uh, I don't

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Speaker 1: think anybody really thought that was possible. That's why we're

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Speaker 1: looking at the markets doing what they are doing. The

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Speaker 1: euro at one O nine five solidly below one ten

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Speaker 1: now and continuing to move over. The German tenure note

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Speaker 1: is negative eleven basis points. Extraordinary. That's a conundrum. As

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Speaker 1: German Greenspan would say, we are here in Washington, d C.

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Speaker 1: This was booked weeks ago. This was an important interview,

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Speaker 1: but maybe he's become the most most interesting interview that

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Speaker 1: Mike and I have had in ages and ages coming

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Speaker 1: up a conversation with Alan Greenspan as the United Kingdom

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Speaker 1: tries to find a path forward from Washington with Bloomberg FM.

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Speaker 1: This is Bloomberg's surveillance