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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 mobilat and on your radio.

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

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Speaker 1: There's updates. Ronty bay eisener Emper. When entrepreneurs face challenges

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Speaker 1: like choosing a business structure or access to capital, they

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Speaker 1: call the accountants and advisors at oisener Amper connect with

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Speaker 1: them at Eisner Amper dot com, slash Tech, Mellion Pharmaceuticals

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Speaker 1: International well at three new board members, including a representative

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Speaker 1: from one of the drugmaker's biggest investors, and expand the

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Speaker 1: panel to fourteen directors from twelve. BMW reporting a five

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Speaker 1: point two percent gain and profit last year on higher

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Speaker 1: vehicle deliveries as the world's largest maker of luxury cars

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Speaker 1: pushes to stay ahead of Mercedes Benz USA Authendex future

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Speaker 1: is higher. We checked the markets every fifteen minutes throughout

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Speaker 1: the trading day on Bloomberg, SNP Emni futures up eight points,

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Speaker 1: Dow E Mini futures up sixty nine and NASDAC emni

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Speaker 1: futures up sixteen. DAX in Germany's up one point two

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Speaker 1: per cent. To in your treasury down fourteen thirty seconds,

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Speaker 1: the yield one point eight seven per cent. N i'm

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Speaker 1: x screwed oil up one point four percent or fifty

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Speaker 1: one cents to thirty seven oh one a barrel com

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Speaker 1: XS goal down seven tenths per cent or eight dollars

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Speaker 1: fifty cents to twelve fifty four fifty announced the euro

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Speaker 1: a dollar oh nine five to the N one twelve

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Speaker 1: point eight zero. That's a bottle Berg business flash. Tom

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Speaker 1: and Mike Karen, thank you so much. Good morning everyone,

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Speaker 1: It is on Wall Street. The following is from Bloomberg

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Speaker 1: View opinions in commentary from Bloomberg columnists. I'm Megan mccartell,

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Speaker 1: a columnists from lumber View. For the reason chatter, Donald

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Speaker 1: Trump is unlikely to run as a third party candidate,

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Speaker 1: even is denied the Republican nomination. The reasons simple, you

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Speaker 1: can't afford it. According to Trump's personal financial disclosure form,

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Speaker 1: he had about three hundred million in cash and marketable securities.

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Speaker 1: That's a lot of money, yet not enough to run

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Speaker 1: a major presidential campaign, which now clocks in and around

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Speaker 1: one billion dollars, and to be competitive in the general

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Speaker 1: he would have to spend something close to that amount.

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Speaker 1: Because one sits down to two or three candidates, the

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Speaker 1: media is going to make sure the other folks get

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Speaker 1: as much airtime as he does. Nor can he do

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Speaker 1: without little things like campaign staff and I Get out

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Speaker 1: the Vote operation. He could maybe mortgage some of his interests,

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Speaker 1: borrowing a billion dollars to find a campaign, but this

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Speaker 1: seems unlikely for one thing. By the most generous non

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Speaker 1: Trump estimates of his net worth, that would mean mortgaging

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Speaker 1: about a quarter of his assets for a near certain loss,

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Speaker 1: even if he was mad enough to try, our bankers

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Speaker 1: insane enough to help him. As known expert Donald Trump

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Speaker 1: once noted, these lenders aren't babies. These are total killers.

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Speaker 1: They're not nice, sweet little people that you'd think one

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Speaker 1: suspects they might in the end be the ones to

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Speaker 1: kill any hope of a third party campaign. I'm Megan mccartell.

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Speaker 1: For more view please go to Bloomberg View dot com

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Speaker 1: or view go on the Bloomberg terminal. This has been

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Speaker 1: Bloomberg View and Bloomberg View count Terry comm heared hourly weekdays,

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Speaker 1: and Bloomberg Radio might brexit well for a lot of

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Speaker 1: people who are not as concerned with politics as they

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Speaker 1: are with the financial markets. Tomorrow is the big day

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Speaker 1: Mario jog and his colleagues at the European Central Bank

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Speaker 1: get together and decide what they are going to do.

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Speaker 1: Koleva is chief economist at G plus Economics, and she

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Speaker 1: joins us now with her forecast Lena. The most interesting

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Speaker 1: note to me this morning was somebody writing that they

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Speaker 1: had noted how many people were thinking that Mario Jo

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Speaker 1: would have a very hard time living up to the

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Speaker 1: market's expectations for what he can do tomorrow. What do

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Speaker 1: you think he will do? And is it going to

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Speaker 1: be enough? Hi, Mike Tom It's great to be with you. Um,

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Speaker 1: I think, um, yes, it is true that it is

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Speaker 1: uphill struggle. I think at this point for any central

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Speaker 1: banker out there to face up to a fairly agnostic

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Speaker 1: and increasingly skeptical market with respect to the power central

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Speaker 1: banks to reflecate the global economy. Um. But specifically to

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Speaker 1: a question for tomorrow, there three choice is really more

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Speaker 1: quie more negative interest rates or what I call helicopter money,

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Speaker 1: which is basically reviving the old Veltro very long term operations,

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Speaker 1: merging them with the Teltro's the targeted long term operations

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Speaker 1: and ultimate coming up with the what I call the ultros,

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Speaker 1: which is the targeted long the very long term umre

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Speaker 1: co operations. In other words, creating something very close to

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Speaker 1: helicopter money without trying to the apple pat in terms

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Speaker 1: of political attitudes. Thank you. You'll ask me with the

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Speaker 1: alphabet soup define helicopter money, help me with the Sakorski approach,

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Speaker 1: what does helicopter money actually mean? Well to the helicopter

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Speaker 1: money is basically the equivalent of KEWI, but without center

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Speaker 1: banks actually having to boton themselves with the hard choices

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Speaker 1: of deciding what assets or how much has this to

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Speaker 1: buy and others just distributing creating money to do to

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Speaker 1: be distributed in the private sector. UM and as we know,

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Speaker 1: the ECB has been running against some some critical technical constraints,

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Speaker 1: in particular the fact that UM they're listing so much

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Speaker 1: imagery out of the market in terms of government bonds

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Speaker 1: that there are creating sound supply shot bottlenecks because austerity

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Speaker 1: in the Eurozone means the governments are not printings are sorry,

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Speaker 1: they're not learning, they're not borrowing as much money from

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Speaker 1: the markets, they're not printing as many securities. Another form

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Speaker 1: of money. So, in other words, um, if the matter

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Speaker 1: dragon is now facing the constraints of how much bonds

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Speaker 1: and how quickly he can buy these bonds and can

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Speaker 1: get them off banks balance sheets and replace them with cash,

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Speaker 1: which then hopefully finds its way into the real economy. Well,

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Speaker 1: another way to go about that is to actually subsidize

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Speaker 1: banks that are just taking cash in order to create credit.

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Speaker 1: I think told me, if I may just take a

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Speaker 1: step back from this, I think, what we have to

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Speaker 1: remember here, Wow, there's just this enormous discussion about what

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Speaker 1: they might announced tomorrow. The answer central banking UM is

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Speaker 1: about convincing the private sector that whatever it announces it

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Speaker 1: will lift inflation expectations, it will reflate the real economy

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Speaker 1: by creating the risk consent with for lenders to generate credit.

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Speaker 1: And so it is very much about convincing the markets

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Speaker 1: that what it sounds it will be enough as opposed

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Speaker 1: to the technicalities of vot comes. Well, that's the question

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Speaker 1: I was posing at the beginning. Is he going to

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Speaker 1: be able to convince the markets because so far inflation

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Speaker 1: expectations aren't rising, The economy is modeling along, it hasn't collapsed,

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Speaker 1: but that's hardly the benchmark people are looking for, absolutely, Mike.

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Speaker 1: I mean, this is the trouble with the ECB is

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Speaker 1: that they've had this very unfavorable optics of an expanding

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Speaker 1: balance sheet yet a strengthening Europe and uh perfalling inflation

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Speaker 1: expectations since the start of the year. I think that

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Speaker 1: there are two forces that are really bigger than the

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Speaker 1: ECB in play here. First, central banks are no longer

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Speaker 1: in charge of market conditions. It is as you and

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Speaker 1: Tom have often said in your program, it is capital

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Speaker 1: flows that are driving UM. Capital allocation by investors which

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Speaker 1: are driven by credit quality concerns as opposed to the

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Speaker 1: fundamental policy liquidity and rate differentials UM as the key

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Speaker 1: market driving the markets this year. And so the result

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Speaker 1: is that neither banks stalks, no general stock markets, volatilities,

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Speaker 1: no exchange rates in this case the euro. So the

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Speaker 1: three court transmission channels for central banks UM record low

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Speaker 1: interest rates and quantity of easing have conformed to what

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Speaker 1: they need to be expected that it will happen since

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Speaker 1: the launch of QI. And the other big issue here

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Speaker 1: is that you know, if we look at what the

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Speaker 1: border sets for that matter, are facing the next week

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Speaker 1: when when you look at the market conditions from a

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Speaker 1: thousand feet up in the air, it is the the

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Speaker 1: over supply of liquidity as opposed to fundamental shifts and

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Speaker 1: the real economic prospects that are increasingly behind financial valuations.

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Speaker 1: And this in some cases, particularly in the case of

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Speaker 1: government bonds, is leading to significant temporary pricing imbalances opposed

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Speaker 1: to the upside and to the downside for yields. So,

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Speaker 1: in other words, too much liquidity in the market, crowded

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Speaker 1: and by negative rates, by emerging market corporate default years,

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Speaker 1: by volatile stocks, by negative market correlations, all of that

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Speaker 1: creates this market inequidity and dislocation, and this in translates

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Speaker 1: this some new types of behavior and liquidity to risks

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Speaker 1: and periods of market stress, which diminishes investor convedence in

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Speaker 1: the strength of central banks to actually dictate the very

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Speaker 1: financial conditions that determine the transmission mechanism into the real economy.

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Speaker 1: When I look, Lena, what to listen for tomorrow at

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Speaker 1: eight thirty, what will be the tone that you want

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Speaker 1: to see? Is a deflation disinflation talk? Does he dare

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Speaker 1: even mention brexit? I mean, I can't fail that it's

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Speaker 1: Hardy skirted around it earlier this week. What will you

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Speaker 1: listen for, Well, I I'm hoping that we will hear

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Speaker 1: a central banker that faces up to the challenges of today,

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Speaker 1: and that is that the your zone economy is in

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Speaker 1: the heart of a global turbulence of geo economic and

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Speaker 1: political and geo financial forces that are endangered to yours

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Speaker 1: own inflation stability but also very much a danger to

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Speaker 1: your own growth and financial stability going forward. And so

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Speaker 1: I think the Mary Dragon does have to convince the

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Speaker 1: markets that he has the power to deliver whatever it takes,

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Speaker 1: which is really what the market started to question since

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Speaker 1: the political position two more que back in December. The

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Speaker 1: ECB has gone some way to rectify that, of course

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Speaker 1: through the announcement of extension of QUI in January, but

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Speaker 1: it's clearly it hasn't been enough. So what will have

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Speaker 1: been enough? And um, how confident really? I think the

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Speaker 1: key thing Tom is whether drug says that he's confident

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Speaker 1: that the ECB will reach its inflation target over the

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Speaker 1: medium term and what that medium term actually means. Lena,

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Speaker 1: come away, but think you so much greatly appreciate it is.

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Speaker 1: We've got nice briefing as we go to Mr Dragon tomorrow.

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Speaker 1: I saw Mr Dragon Tomorrow, Folks, this is a place

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Speaker 1: to be. Mike McKie and I had the advantage of

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Speaker 1: our European economics and government team, particularly economic folks led

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Speaker 1: by Marty Schenker. And it's real simple. The headline st

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Speaker 1: are coming out and they have value, particularly that Michael

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Speaker 1: McKee can interpret them for you far better and more

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Speaker 1: rapidly than I can. What will you look for, Mike, Well,

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Speaker 1: the first thing at seven forty five will have the

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Speaker 1: details of the announcement on interest rates, and we'll look

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Speaker 1: to the deposit rate and see if they cut that

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Speaker 1: further into negative territory. Somebody suggested yesterday they could even

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Speaker 1: go to zero or negative on the refi rate, the

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Speaker 1: main benchmark rate. That would be interesting. Uh. And then

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Speaker 1: we'll go from there thirty Mario Draggy and whether or

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Speaker 1: not he goes into more negative rates, whether he does

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Speaker 1: more qui or as Lena says, figures out a way

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Speaker 1: to do helicopter money. Yeah, I I it's it's not

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Speaker 1: Is any of this in the textbooks. I really don't

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Speaker 1: think so. The text it's in the theory part in

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Speaker 1: the chapter on theories that are unproven. I like that.

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Speaker 1: I didn't really I miss that chapter. Um, we'll see

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Speaker 1: how Mario drag tomorrow with our coverage worldwide and we

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Speaker 1: will dip into that conference as we are want to do.

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Speaker 1: We will give you the actual holler of it is

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Speaker 1: the Mr Dragon speaks green on the screen, features up

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Speaker 1: seven the tenure yield. It was a good five basis

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Speaker 1: points one. This is Bloomberg's surveillance