1 00:00:03,640 --> 00:00:07,280 Speaker 1: This is Bloomberg Surveillance. One of the reasons for wanting 2 00:00:07,280 --> 00:00:09,880 Speaker 1: to adjust policy rates higher is that if we do 3 00:00:09,960 --> 00:00:12,280 Speaker 1: and into trouble, there's room to ease. I think it's 4 00:00:12,360 --> 00:00:14,960 Speaker 1: clear that we should be expecting further eating for the 5 00:00:14,960 --> 00:00:17,119 Speaker 1: European except will make up, and we should probably be 6 00:00:17,160 --> 00:00:19,680 Speaker 1: expected further eating for the Bank of Japan's. One of 7 00:00:19,720 --> 00:00:23,360 Speaker 1: the concerns expressed for markets is a lack of global growth, 8 00:00:23,560 --> 00:00:26,040 Speaker 1: and it really is showing up now and now put 9 00:00:26,040 --> 00:00:30,320 Speaker 1: Bloomberg Surveillance your link to the world of economics, finance 10 00:00:30,400 --> 00:00:34,240 Speaker 1: and investment on Bloomberg Radio. Good morning everyone, Michael mckam, 11 00:00:34,240 --> 00:00:37,480 Speaker 1: Tim King, Bloomberg Surveillance. Thank you for being with this worldwide, 12 00:00:37,479 --> 00:00:40,960 Speaker 1: particularly on the continent of Europe where the European banking 13 00:00:41,120 --> 00:00:46,840 Speaker 1: challenges continue. Deutsche Bank not through recent lows, UniCredit getting 14 00:00:47,040 --> 00:00:50,040 Speaker 1: very near there right now, UNI Credit of Italy, and 15 00:00:50,040 --> 00:00:52,880 Speaker 1: you see it across all the markets. Will do extra 16 00:00:52,960 --> 00:00:55,959 Speaker 1: data checks for you for the next two hours. Futures 17 00:00:56,200 --> 00:01:00,840 Speaker 1: negative thirty five down, futures negative tone. Just seconds ago, 18 00:01:00,880 --> 00:01:04,080 Speaker 1: as you were John Riding speaking in our intro, the 19 00:01:04,240 --> 00:01:07,880 Speaker 1: ten year yield broke down again to four digits one 20 00:01:07,959 --> 00:01:13,600 Speaker 1: point five three eight seven. That is thirteen basis points. 21 00:01:13,920 --> 00:01:17,880 Speaker 1: We try to be jargon free point one three of 22 00:01:17,920 --> 00:01:20,920 Speaker 1: a percent lower. I'll get a chart up the shows 23 00:01:20,959 --> 00:01:23,959 Speaker 1: a percent change on price there as well. It's a 24 00:01:24,000 --> 00:01:27,440 Speaker 1: Gary Shilling kind of morning, no question about that. West 25 00:01:27,440 --> 00:01:30,920 Speaker 1: Texas twenty six forty two. Bloomberg Surveillance this morning brought 26 00:01:30,920 --> 00:01:35,560 Speaker 1: to you by con Resinic Accounting Tax Advisory. During times 27 00:01:35,560 --> 00:01:40,160 Speaker 1: of growth, crisis or economic uncertainty, your business needs the 28 00:01:40,280 --> 00:01:44,640 Speaker 1: cone RESNEC Advisory Group for the strategies to move forward. 29 00:01:44,840 --> 00:01:48,320 Speaker 1: Find out more at cone resnec dot com. Michael McKie, 30 00:01:48,360 --> 00:01:52,040 Speaker 1: what is your observation this morning? Well, I'm just looking 31 00:01:52,080 --> 00:01:53,760 Speaker 1: at that ten year yield. You gotta go back to 32 00:01:53,840 --> 00:01:57,520 Speaker 1: August of two thousand twelve to see a yield like that. 33 00:01:57,960 --> 00:02:02,160 Speaker 1: Uh it is um it fears in the saddle and 34 00:02:02,280 --> 00:02:05,080 Speaker 1: rides mankind here. But I go back to the Wards poetic. 35 00:02:05,200 --> 00:02:09,000 Speaker 1: Is that Shakespeare? Just why why you you took Shakespeare? 36 00:02:09,080 --> 00:02:11,280 Speaker 1: Didn't you? I think it was Shakespeare. It is either 37 00:02:11,320 --> 00:02:14,919 Speaker 1: Shakespeare or Peyton Manning, one of the one of the um. 38 00:02:15,160 --> 00:02:18,760 Speaker 1: You go back to, uh, to to what Bob Sinch 39 00:02:18,800 --> 00:02:21,280 Speaker 1: sent us this morning about oil prices and he's wondering 40 00:02:21,280 --> 00:02:24,160 Speaker 1: if capitulation is on the horizon here, and I wonder 41 00:02:24,160 --> 00:02:28,240 Speaker 1: if that is true and uh correlated asset classes. Yeah, 42 00:02:28,320 --> 00:02:30,959 Speaker 1: I'll go with that. I'm doing a sixth day charter 43 00:02:31,120 --> 00:02:34,920 Speaker 1: UniCredit right now. It is not broken down towards the 44 00:02:34,960 --> 00:02:37,320 Speaker 1: lows of a few days ago. Deutsche Bank is now 45 00:02:37,360 --> 00:02:39,680 Speaker 1: taking a new leg down. I want to be clear. 46 00:02:39,760 --> 00:02:44,520 Speaker 1: This is the European quote thirteen point to two and 47 00:02:44,560 --> 00:02:47,959 Speaker 1: the lowest thirteen point oh three euros. There's two quotes. 48 00:02:48,080 --> 00:02:51,200 Speaker 1: It's confusing. I like to use the deeper market when 49 00:02:51,200 --> 00:02:54,959 Speaker 1: it's open, which is the euro market, which is thirteen 50 00:02:55,000 --> 00:02:56,760 Speaker 1: point two two and all you need to know. I'll 51 00:02:56,760 --> 00:02:59,280 Speaker 1: put the chart on on Bloomberg Radio Plus. Can we 52 00:02:59,320 --> 00:03:01,160 Speaker 1: walk through that? Do we have time to do that? 53 00:03:01,720 --> 00:03:05,240 Speaker 1: Bloomberg Radio Plus is an app. The only one more 54 00:03:05,280 --> 00:03:09,119 Speaker 1: skeptical about it than Michael McKee was me. We're like, yeah, yeah, yeah, yeah, 55 00:03:09,240 --> 00:03:12,480 Speaker 1: doing an app digital? Who cares? The second day it 56 00:03:12,600 --> 00:03:15,079 Speaker 1: came out, I got a lovely email from a guy 57 00:03:15,240 --> 00:03:19,520 Speaker 1: stuck in traffic between Abu Dhabi and Dubai listening to 58 00:03:19,600 --> 00:03:23,200 Speaker 1: Mike and me. Crystal clear, I'm Bloomberg Radio. That's what 59 00:03:23,240 --> 00:03:29,239 Speaker 1: Bloomberg Radio Plus does for you anywhere anywhere worldwide. We've 60 00:03:29,240 --> 00:03:31,919 Speaker 1: been stunned at the response to it. And even better, 61 00:03:31,960 --> 00:03:34,040 Speaker 1: we can put charts out that you could see on 62 00:03:34,120 --> 00:03:36,960 Speaker 1: Bloomberg Radio Plus. Did I explain it? Okay, Mike. I 63 00:03:36,960 --> 00:03:38,160 Speaker 1: think he did a very good job. I think you 64 00:03:38,200 --> 00:03:41,000 Speaker 1: have a whole new future ahead of you. App salesman 65 00:03:41,440 --> 00:03:45,440 Speaker 1: put you into the iTunes store. Uh. We got to 66 00:03:45,440 --> 00:03:47,560 Speaker 1: find out what is happening in the markets, and there's 67 00:03:47,600 --> 00:03:51,760 Speaker 1: only one place to go the historical funt of wisdom 68 00:03:51,800 --> 00:03:54,400 Speaker 1: about all things equities, and that is S and P. S. 69 00:03:54,520 --> 00:03:58,680 Speaker 1: Sam stow All. He of course, Um, the wonderful work 70 00:03:58,800 --> 00:04:02,040 Speaker 1: is father did raised on ticker table. Do you know 71 00:04:02,120 --> 00:04:04,800 Speaker 1: that the stove all desk is in the Smithsonian, the 72 00:04:04,840 --> 00:04:09,800 Speaker 1: one that his father used to get under. Well, it's 73 00:04:09,840 --> 00:04:14,160 Speaker 1: unfortunate because Sam would be under it now. Uh. Yeah, 74 00:04:14,400 --> 00:04:17,520 Speaker 1: I'm sort of tempt just tempted to ask you have 75 00:04:17,680 --> 00:04:21,760 Speaker 1: you seen something like this before where there is global 76 00:04:21,839 --> 00:04:25,200 Speaker 1: correlation among asset classes all going down and there doesn't 77 00:04:25,200 --> 00:04:28,599 Speaker 1: seem to be a particular reason. Well, good morning, Michael, 78 00:04:28,640 --> 00:04:30,640 Speaker 1: and thanks for painting the picture of me hiding under 79 00:04:30,680 --> 00:04:35,880 Speaker 1: a desk. Uh would have to be a very large desk. Um. Actually, 80 00:04:35,960 --> 00:04:38,400 Speaker 1: you bring up a very interesting point. A lot of 81 00:04:38,440 --> 00:04:42,120 Speaker 1: people think that you don't have correlations going to one, 82 00:04:42,320 --> 00:04:46,640 Speaker 1: but indeed, whenever we have seen market declines, whether they 83 00:04:46,680 --> 00:04:51,640 Speaker 1: are severe corrections or bear markets, Um, actually almost all 84 00:04:51,800 --> 00:04:55,160 Speaker 1: asset classes exhibit the glide path of a crowbar. And 85 00:04:55,600 --> 00:04:58,120 Speaker 1: this is when you are reminded that even in the 86 00:04:58,200 --> 00:05:01,440 Speaker 1: prospect of the FED raising interestry, you want to maintain 87 00:05:01,560 --> 00:05:05,480 Speaker 1: exposure to fixed income because it is the intermediate term 88 00:05:05,640 --> 00:05:10,600 Speaker 1: investment grade bonds that actually have the negative correlation with equities. 89 00:05:10,880 --> 00:05:13,120 Speaker 1: And in every bear market going back to the mid 90 00:05:13,240 --> 00:05:17,960 Speaker 1: nineteen seventies, the Barkley's agg has posted a positive return 91 00:05:18,520 --> 00:05:24,600 Speaker 1: during bear markets, whereas equities, commodities, reats, gold, etcetera. Have 92 00:05:24,880 --> 00:05:27,960 Speaker 1: not been able to have that kind of a track record. Well, 93 00:05:28,000 --> 00:05:32,479 Speaker 1: and if you bought bonds yesterday, you're making money today, absolutely, 94 00:05:32,480 --> 00:05:35,520 Speaker 1: And I think that's what's causing the yield curve to flatten, 95 00:05:35,880 --> 00:05:38,320 Speaker 1: which are now causing a lot of investors to worry 96 00:05:38,440 --> 00:05:41,440 Speaker 1: that we are headed forward recession because of that yield curve. 97 00:05:41,760 --> 00:05:43,920 Speaker 1: Quite frankly, we don't need to have a flat to 98 00:05:44,040 --> 00:05:49,159 Speaker 1: inverted yield curve to trip into a bear market. Yeah, 99 00:05:49,279 --> 00:05:52,120 Speaker 1: we had yield curves that were steeper than one basis 100 00:05:52,160 --> 00:05:57,640 Speaker 1: points in nineteen six and eighty seven, yet we fell 101 00:05:57,800 --> 00:06:01,480 Speaker 1: into bear markets because of the worries associated with them. Mike, 102 00:06:01,520 --> 00:06:03,040 Speaker 1: I just want to point out I just put out 103 00:06:03,080 --> 00:06:06,960 Speaker 1: on Twitter the following Sam Stove all full colon the 104 00:06:07,040 --> 00:06:11,720 Speaker 1: glide path of a crowbar. Well, there's your market analysis. 105 00:06:11,760 --> 00:06:14,400 Speaker 1: That's all market analysis you need today. It feels like 106 00:06:14,480 --> 00:06:16,480 Speaker 1: it's getting You're getting hit over the head by a 107 00:06:16,560 --> 00:06:20,760 Speaker 1: crow bar today, Sam, Yes, you do. But one thing 108 00:06:20,880 --> 00:06:23,840 Speaker 1: that is not encouraging at this point is I like 109 00:06:24,000 --> 00:06:28,040 Speaker 1: to look at a rolling average of intra day volatility, 110 00:06:28,560 --> 00:06:33,040 Speaker 1: and usually we see peaks in extremes in volatility. That 111 00:06:33,279 --> 00:06:36,160 Speaker 1: is a good indication that the end is near. What 112 00:06:36,240 --> 00:06:38,400 Speaker 1: I mean by that is that the end of the 113 00:06:38,520 --> 00:06:43,080 Speaker 1: decline is near UM And we've had such peaks in 114 00:06:43,200 --> 00:06:47,560 Speaker 1: the seven crash, we had peaks in during the Russian 115 00:06:47,600 --> 00:06:51,320 Speaker 1: default crisis, UM close to the bottom in two thousand 116 00:06:51,400 --> 00:06:55,120 Speaker 1: and two, etcetera. And we're really not at that level yet. 117 00:06:55,240 --> 00:06:57,840 Speaker 1: So I would tend to say that, um, yes, there's 118 00:06:57,880 --> 00:07:00,320 Speaker 1: fear in the market, but there's not enough to tell 119 00:07:00,440 --> 00:07:03,480 Speaker 1: me that we are very clear to turning around. I'm 120 00:07:03,520 --> 00:07:05,120 Speaker 1: so glad you went to that one of the you 121 00:07:05,160 --> 00:07:07,400 Speaker 1: know again folks, I say, you look at the Bloomberg screen. 122 00:07:07,560 --> 00:07:10,800 Speaker 1: I'm gonna take a photo of my launchpad screen, um 123 00:07:11,040 --> 00:07:13,880 Speaker 1: sometime and get it here out on Twitter and Facebook 124 00:07:13,880 --> 00:07:16,720 Speaker 1: and all that. But Sam, again, it's what's not moving 125 00:07:16,760 --> 00:07:19,320 Speaker 1: that's important. The vix isn't where it's supposed to be 126 00:07:19,960 --> 00:07:24,000 Speaker 1: given the sweat, Why is that, um? I think because you, 127 00:07:24,320 --> 00:07:25,680 Speaker 1: first of a if, you have an awful lot of 128 00:07:25,720 --> 00:07:28,560 Speaker 1: people who were bearished to begin with and who are 129 00:07:28,600 --> 00:07:31,440 Speaker 1: on the sidelines. So I don't really think that there's 130 00:07:31,440 --> 00:07:33,800 Speaker 1: an awful lot of selling that's happening. I think there's 131 00:07:33,840 --> 00:07:37,200 Speaker 1: just an absence of buyers that that the people who 132 00:07:37,320 --> 00:07:40,200 Speaker 1: have been worried for quite some time. Let's face it, 133 00:07:40,280 --> 00:07:43,760 Speaker 1: we've we hit a peek back on May one of 134 00:07:43,880 --> 00:07:47,120 Speaker 1: two thousand and fifteen. We are closing in on the 135 00:07:47,280 --> 00:07:52,320 Speaker 1: nine months anniversary of that peak, and surprisingly enough, on average, 136 00:07:52,400 --> 00:07:55,760 Speaker 1: bear markets since World War Two have required nine months 137 00:07:55,880 --> 00:08:01,080 Speaker 1: before tripping below that the client threshold. Is this a 138 00:08:01,200 --> 00:08:03,840 Speaker 1: sign that there are people who aren't buying or is 139 00:08:03,880 --> 00:08:07,960 Speaker 1: it machines um that I don't I will not be 140 00:08:08,080 --> 00:08:13,440 Speaker 1: able to answer that because some people say voice clicked 141 00:08:13,480 --> 00:08:17,320 Speaker 1: in the robot voice, he did that very well. Um, 142 00:08:17,760 --> 00:08:19,200 Speaker 1: I mean, is there a lot of people saying this 143 00:08:19,400 --> 00:08:23,480 Speaker 1: is algorithmic trading here? Well, that's certainly a possibility, because 144 00:08:23,480 --> 00:08:26,160 Speaker 1: a lot of the trades that I've been seeing are 145 00:08:26,240 --> 00:08:30,480 Speaker 1: related to support and resistance technical lines. You're looking at 146 00:08:30,560 --> 00:08:34,320 Speaker 1: the teen twenty level on a closing basis, eighteen twelve 147 00:08:34,400 --> 00:08:38,079 Speaker 1: on an intra day basis. That's those are very important 148 00:08:38,120 --> 00:08:41,559 Speaker 1: support levels, and should we breach those basically there's not 149 00:08:41,720 --> 00:08:45,160 Speaker 1: much support underneath, which would then imply that we're headed 150 00:08:45,160 --> 00:08:49,360 Speaker 1: towards the seventeen hundred or even the mid sixteen hundred 151 00:08:49,440 --> 00:08:51,920 Speaker 1: level on the SMP five hundred. How do earnings and 152 00:08:52,000 --> 00:08:54,920 Speaker 1: revenue dynamics correlate with the fear that's out there? Are 153 00:08:55,000 --> 00:08:58,400 Speaker 1: the part of our analysis or is this separate stuff? No, 154 00:08:58,520 --> 00:09:01,040 Speaker 1: it's not separate stuff. It's part to the analysis. It's 155 00:09:01,120 --> 00:09:04,719 Speaker 1: part of the concern that we keep thinking that we're 156 00:09:04,760 --> 00:09:08,680 Speaker 1: going to be experiencing a V shaped recovery in earnings 157 00:09:08,760 --> 00:09:11,360 Speaker 1: on a quarterly basis, with the fourth quarter of two 158 00:09:11,440 --> 00:09:14,360 Speaker 1: thousand and fifteen the lowest at about six percent decline 159 00:09:14,760 --> 00:09:19,680 Speaker 1: and then moving up as energy is having easier comparisons. 160 00:09:20,000 --> 00:09:22,800 Speaker 1: But what we're finding though is that energy continues to 161 00:09:22,920 --> 00:09:27,760 Speaker 1: have negative expectations down more than sev earnings this quarter 162 00:09:28,240 --> 00:09:30,880 Speaker 1: and then first quarter of two thousand and sixteen expected 163 00:09:30,920 --> 00:09:34,760 Speaker 1: to be similar. So now only the fourth quarter for 164 00:09:34,880 --> 00:09:37,760 Speaker 1: two thousand and sixteen expected to be positive for energy. 165 00:09:38,760 --> 00:09:41,800 Speaker 1: Stamul will come back to be clear. You don't see 166 00:09:41,840 --> 00:09:47,160 Speaker 1: the catharsis that allows you to develop a bottom framework 167 00:09:47,960 --> 00:09:50,760 Speaker 1: that's correct that I typically look to extreme levels of 168 00:09:50,840 --> 00:09:55,800 Speaker 1: volatility to say that a bottom is near um. But 169 00:09:55,960 --> 00:09:58,760 Speaker 1: I do, but sometimes we don't get those. We didn't 170 00:09:58,800 --> 00:10:00,640 Speaker 1: get it in two thousand and tw This is what 171 00:10:00,720 --> 00:10:02,839 Speaker 1: we try to do. Folks bring you guests with a 172 00:10:02,960 --> 00:10:06,120 Speaker 1: little bit of history around their very smart knowledge. I'm 173 00:10:06,160 --> 00:10:09,920 Speaker 1: Stovall with SNP. It was just Mike. The last couple 174 00:10:09,920 --> 00:10:12,080 Speaker 1: of days you have Dr l Arian with us, Yakum 175 00:10:12,160 --> 00:10:15,200 Speaker 1: Fells of PIMCO and others. Has just been a real treat, 176 00:10:15,280 --> 00:10:17,560 Speaker 1: hasn't Well. There's so many people on Wall Street who 177 00:10:17,880 --> 00:10:21,120 Speaker 1: you know, weren't around for previous bad times. It's great 178 00:10:21,120 --> 00:10:23,120 Speaker 1: to have people who have been through this and seen 179 00:10:23,200 --> 00:10:26,079 Speaker 1: it before. The European banks make a leg down. We 180 00:10:26,120 --> 00:10:28,480 Speaker 1: don't want to get inflammatory, but we're trying to find 181 00:10:28,520 --> 00:10:32,640 Speaker 1: the segments moving at any given moment. Deutsche Bank moving 182 00:10:32,720 --> 00:10:37,320 Speaker 1: to new intra day weakness, not through the February nine lows, 183 00:10:37,440 --> 00:10:41,560 Speaker 1: but thirteen point one seven euros is a lower prices 184 00:10:41,679 --> 00:10:44,520 Speaker 1: oneing unit credit breaking down as well. Futures in the 185 00:10:44,640 --> 00:10:48,600 Speaker 1: US negative thirty four down, futures negative to seventy nine. 186 00:10:52,480 --> 00:10:54,079 Speaker 1: All right, that's breaking, Michael barn Now we'll get the 187 00:10:54,160 --> 00:10:57,600 Speaker 1: last world in national headlines affecting trading. Mike Tom, thank 188 00:10:57,640 --> 00:11:00,280 Speaker 1: you very much. The last four armed occupier has had 189 00:11:00,320 --> 00:11:03,160 Speaker 1: a wildlife refuge in Oregon, say they would turn themselves 190 00:11:03,240 --> 00:11:06,160 Speaker 1: in this morning. Law officers have surrounded them and the 191 00:11:06,240 --> 00:11:09,400 Speaker 1: tent standoff. One of the occupiers told an FBI negotiator 192 00:11:09,520 --> 00:11:12,560 Speaker 1: kill me, get it over with authorities, say. A police 193 00:11:12,600 --> 00:11:15,280 Speaker 1: officer who responded to a domestic violence call in Fargo, 194 00:11:15,400 --> 00:11:19,559 Speaker 1: North Dakota, is near depth after being shot several times. 195 00:11:20,000 --> 00:11:23,000 Speaker 1: Police say. Thirty three year old officer Jason Moser went 196 00:11:23,080 --> 00:11:25,360 Speaker 1: to the home last night after police received the nine 197 00:11:25,360 --> 00:11:28,160 Speaker 1: and one one call that a man inside had fired 198 00:11:28,200 --> 00:11:31,640 Speaker 1: a gun at his family. President Obama is in California 199 00:11:31,720 --> 00:11:35,079 Speaker 1: today where he will raise money for fellow Democrats. The 200 00:11:35,160 --> 00:11:38,400 Speaker 1: President is scheduled to attend for fundraisers today to in 201 00:11:38,480 --> 00:11:42,520 Speaker 1: Silicon Valley and two in Los Angeles. Global News twenty 202 00:11:42,600 --> 00:11:46,120 Speaker 1: four hours a day, powered by our two hundred journalists 203 00:11:46,520 --> 00:11:48,960 Speaker 1: more than one hundred fifty news bureaus from around the world. 204 00:11:49,120 --> 00:11:52,640 Speaker 1: I'm Michael bar Mike, Michael Bar, thanks so much. Futures 205 00:11:52,640 --> 00:11:55,000 Speaker 1: actually do a little bit better, but other things challenge. 206 00:11:55,040 --> 00:11:58,040 Speaker 1: We again would note European banks to new laws. We're 207 00:11:58,160 --> 00:12:01,400 Speaker 1: Sam Stovall and that's a piece day with the Sploomberg Surveillance. 208 00:12:05,679 --> 00:12:07,600 Speaker 1: The news update brought to you by your Mercedes Benz 209 00:12:07,600 --> 00:12:09,560 Speaker 1: Tri State dealer. When it comes to winter elements, put 210 00:12:09,600 --> 00:12:12,080 Speaker 1: your best four wheels forward with Mercedes Benz Formatic all 211 00:12:12,080 --> 00:12:14,480 Speaker 1: wheel Drive. Visit your Mercedes Benz Tri State dealer for 212 00:12:14,559 --> 00:12:24,480 Speaker 1: a test drive today. Global Business News twenty four hours 213 00:12:24,559 --> 00:12:27,640 Speaker 1: a day. If Bloomberg dot Com, the radio plus mobile 214 00:12:27,679 --> 00:12:30,960 Speaker 1: app and on your radio. This is a Bloomberg Business 215 00:12:31,040 --> 00:12:34,400 Speaker 1: Flash and I'm Karen Moscow. US stock index Future is 216 00:12:34,440 --> 00:12:37,600 Speaker 1: following oil prices lower. Let's go to the First Word 217 00:12:37,679 --> 00:12:40,880 Speaker 1: Breaking news desk for today's morning call. And here's Bill Maloney. 218 00:12:40,960 --> 00:12:44,240 Speaker 1: Good morning Bill, Good morning Karen. Equities are under pressure 219 00:12:44,280 --> 00:12:47,080 Speaker 1: around the world this morning. DAL futures are lower by 220 00:12:47,080 --> 00:12:50,480 Speaker 1: two one point, SYSP STROP thirty three, and Nazak futures 221 00:12:50,520 --> 00:12:54,200 Speaker 1: declined by seventy five. Made up of markets are also lower, 222 00:12:54,320 --> 00:12:57,439 Speaker 1: led by five percent to clients. In Italy, Sweden, Central 223 00:12:57,440 --> 00:12:59,680 Speaker 1: Bank lord the repo rate to a minus point five 224 00:12:59,800 --> 00:13:02,559 Speaker 1: per cent. The US tenniel Felt at one point five 225 00:13:02,640 --> 00:13:06,640 Speaker 1: three percent. That's the lowis In's August of after the 226 00:13:06,679 --> 00:13:10,760 Speaker 1: Bellas Night. Cisco beat Tessa, Q one Deliveries outlook, toped estimates, 227 00:13:10,960 --> 00:13:14,040 Speaker 1: Whole Foods Raise Your do, EPs views, and Twitter Q 228 00:13:14,200 --> 00:13:17,920 Speaker 1: and revenue View trailed estimates. Regarding earnings this morning, Advanced 229 00:13:17,920 --> 00:13:20,520 Speaker 1: out of parts, EPs beat Monster World, y Q one 230 00:13:20,559 --> 00:13:25,120 Speaker 1: to jestps view was below estimates, and Kellogg was mixed. Finally, 231 00:13:25,160 --> 00:13:28,360 Speaker 1: sim Q Wall Street upgrades and downgrades at Bank of America, 232 00:13:28,520 --> 00:13:32,360 Speaker 1: Discover Capital one, Visa MasterCard all cut to neutral, Solar 233 00:13:32,400 --> 00:13:35,480 Speaker 1: City CUTI Equay to Barkley's, Cisco raised the BI versus 234 00:13:35,520 --> 00:13:38,360 Speaker 1: hold at Jeffreys, Wendy's cut to neutral at JP Morgan, 235 00:13:38,720 --> 00:13:42,000 Speaker 1: and finally Twitter cut to sector weight at Pacific Crest 236 00:13:42,480 --> 00:13:44,560 Speaker 1: live from the first breaking news desk on boll Maloney. 237 00:13:44,640 --> 00:13:47,800 Speaker 1: Karen alright, thanks bailing to hear live breaking news over 238 00:13:47,880 --> 00:13:50,480 Speaker 1: her Bloomberg tive squawk and go on your terminal. That's 239 00:13:50,520 --> 00:13:52,920 Speaker 1: s qu a w K go and that's a Bloomberg 240 00:13:53,000 --> 00:13:56,079 Speaker 1: business flash, Tom and Mike, Karen, thanks so much, Bloomberg. 241 00:13:56,280 --> 00:13:59,720 Speaker 1: Anance this morning is always bunched by Investco. Don't settle 242 00:13:59,800 --> 00:14:04,280 Speaker 1: for average in your portfolio to Investco. The right approach 243 00:14:04,360 --> 00:14:08,840 Speaker 1: means investing with high conviction. Find out more investco dot 244 00:14:08,920 --> 00:14:12,520 Speaker 1: com slash high Conviction. Michael to bring Sam Stovall back 245 00:14:13,559 --> 00:14:17,160 Speaker 1: UniCredit and we thank Luigi's and Galas of Booth and 246 00:14:17,280 --> 00:14:21,880 Speaker 1: Italy first comments the other day UniCredit breaking down new 247 00:14:22,000 --> 00:14:24,800 Speaker 1: interday lows and Deutsche Bank trying to find a bid 248 00:14:24,920 --> 00:14:29,200 Speaker 1: right now at thirteen point one eight euros challenging to 249 00:14:29,280 --> 00:14:31,720 Speaker 1: say the least. I'm looking at this stock six d 250 00:14:32,120 --> 00:14:38,160 Speaker 1: and the financials within that down six across Europe. You 251 00:14:38,200 --> 00:14:41,360 Speaker 1: wonder where people jump in Sam Stovall with US. I mean, Sam, 252 00:14:41,400 --> 00:14:44,040 Speaker 1: I know you've got a US view and the US feel. 253 00:14:44,320 --> 00:14:49,320 Speaker 1: What is the appetite for international, for emerging market or 254 00:14:49,360 --> 00:14:53,600 Speaker 1: for US multinationals that are out there exposed. I think 255 00:14:53,640 --> 00:14:57,280 Speaker 1: the appetite is is nil at this point, mainly because 256 00:14:57,360 --> 00:15:00,960 Speaker 1: I think investors are just very concerned as to why 257 00:15:01,240 --> 00:15:05,359 Speaker 1: is it that the UM the foreign banks European in particular, 258 00:15:05,600 --> 00:15:09,400 Speaker 1: are so far behind the curve relative to US banks. UM. 259 00:15:09,560 --> 00:15:11,360 Speaker 1: I mean, in some ways you can actually thank the 260 00:15:11,520 --> 00:15:15,280 Speaker 1: US government for uh, you know, pushing through the tighter 261 00:15:15,360 --> 00:15:19,000 Speaker 1: regulations and whatnot, because I think that our banks are 262 00:15:19,000 --> 00:15:22,200 Speaker 1: actually in pretty good shape, UM, not even relative to 263 00:15:22,240 --> 00:15:25,000 Speaker 1: the world, just plain old and pretty good shape UM, 264 00:15:25,320 --> 00:15:29,840 Speaker 1: and are becoming more and more attractive as they get 265 00:15:29,960 --> 00:15:35,600 Speaker 1: dragged down along with the foreign banks. Financials here UM 266 00:15:36,640 --> 00:15:39,520 Speaker 1: one of the worst performing sectors during January, doesn't appear 267 00:15:39,600 --> 00:15:44,040 Speaker 1: that they're going to rebound for the month of February. Now. 268 00:15:44,160 --> 00:15:47,720 Speaker 1: I think it's it's sort of a fear in kind. Uh. 269 00:15:47,840 --> 00:15:51,360 Speaker 1: Investors are are concerned that that the U S banks 270 00:15:51,440 --> 00:15:55,880 Speaker 1: have similar exposure to energy and that there could end 271 00:15:55,960 --> 00:15:59,360 Speaker 1: up being bad loans, etcetera. But I was just talking 272 00:15:59,400 --> 00:16:04,440 Speaker 1: to Eric Are, senior banking analysts, and his belief is that, no, 273 00:16:04,680 --> 00:16:07,960 Speaker 1: you have most of the larger name banks out there 274 00:16:08,040 --> 00:16:12,960 Speaker 1: that have only one to exposure to the energy sector, 275 00:16:13,440 --> 00:16:17,200 Speaker 1: and these are banks that are very well capitalized. They've 276 00:16:17,240 --> 00:16:21,400 Speaker 1: also been talking on conference calls UH that these loan 277 00:16:21,520 --> 00:16:25,720 Speaker 1: losses are very sustainable UM at the or manageable at 278 00:16:25,760 --> 00:16:28,640 Speaker 1: the thirty dollar per barrel level, and even if gold 279 00:16:29,040 --> 00:16:32,480 Speaker 1: oil goes down to twenty dollars a barrel UH for 280 00:16:32,680 --> 00:16:36,200 Speaker 1: less than a year, that these loans are still very 281 00:16:36,240 --> 00:16:40,360 Speaker 1: well managed because of the capitalization and liquidity requirements put 282 00:16:40,400 --> 00:16:42,720 Speaker 1: in place. That's interesting because I was talking tom to 283 00:16:42,800 --> 00:16:45,880 Speaker 1: an investor yesterday and we we we brought that up 284 00:16:46,320 --> 00:16:49,160 Speaker 1: that the banks say that their exposure to energy isn't 285 00:16:49,240 --> 00:16:53,920 Speaker 1: that big. And this person's view was, oh, sure, they're 286 00:16:53,960 --> 00:16:56,720 Speaker 1: not telling you the truth. It just goes to the 287 00:16:56,840 --> 00:17:00,560 Speaker 1: mindset of people these days, right, yeah, yeah, I agree 288 00:17:00,600 --> 00:17:04,680 Speaker 1: with that strongly. The same to me, and this is important, 289 00:17:04,760 --> 00:17:07,239 Speaker 1: goes to the heritage of the stove. All name we can, 290 00:17:07,440 --> 00:17:11,240 Speaker 1: we can blather about market dynamics and all that, but 291 00:17:11,400 --> 00:17:15,320 Speaker 1: it goes back in equities to the ability to create 292 00:17:15,440 --> 00:17:18,560 Speaker 1: a growth plan at the top of the income statement, 293 00:17:18,960 --> 00:17:21,680 Speaker 1: the bottom of the income statement that falls out to 294 00:17:21,800 --> 00:17:24,959 Speaker 1: cash flow is that under threat? Now? Is that belief 295 00:17:25,280 --> 00:17:28,920 Speaker 1: under threat? I think that is the concern. Um, We 296 00:17:29,640 --> 00:17:32,119 Speaker 1: in two thousand and eight, we didn't know what we 297 00:17:32,200 --> 00:17:36,080 Speaker 1: didn't know. Uh. Today, UM, we don't have that kind 298 00:17:36,119 --> 00:17:39,320 Speaker 1: of a situation. Because of the stress test. We know 299 00:17:39,600 --> 00:17:43,080 Speaker 1: that we don't have these failures approaching us. A lot 300 00:17:43,200 --> 00:17:46,120 Speaker 1: of the off balance sheet items are now put back 301 00:17:46,320 --> 00:17:49,080 Speaker 1: onto the balance sheets. But you're bringing up a good point. 302 00:17:49,160 --> 00:17:52,600 Speaker 1: The concern that investors have is that even with the 303 00:17:52,680 --> 00:17:56,720 Speaker 1: good US banks, the growth potential just really isn't there 304 00:17:57,119 --> 00:18:00,800 Speaker 1: because of the liquidity requirements you have of dividends that 305 00:18:00,880 --> 00:18:02,960 Speaker 1: are not going to be cut in our opinion, but 306 00:18:03,080 --> 00:18:05,440 Speaker 1: they're also not going to be growing. Uh, and so 307 00:18:05,600 --> 00:18:07,920 Speaker 1: that makes them less attractive. They're not going to go 308 00:18:08,000 --> 00:18:10,480 Speaker 1: out of business, but they're just going to be less 309 00:18:10,520 --> 00:18:13,880 Speaker 1: attractive relative to other investments. Sam, thank you so much. 310 00:18:13,920 --> 00:18:16,359 Speaker 1: Sam Stoval an incredibly busy day for him. We treasure 311 00:18:16,440 --> 00:18:20,000 Speaker 1: having him on us as well. Mr Stovall with Standard 312 00:18:20,320 --> 00:18:22,760 Speaker 1: and ports Mica, this is I gotta be careful here, Mike. 313 00:18:23,119 --> 00:18:26,600 Speaker 1: This is the price to book, not tangible book. It's 314 00:18:26,640 --> 00:18:29,560 Speaker 1: an estimation. This is off the bloomberg, but we need 315 00:18:29,600 --> 00:18:32,800 Speaker 1: to scope and scale this right now. Credit Suites of 316 00:18:32,920 --> 00:18:39,240 Speaker 1: Zurich there price to book is fifty two percent Deutsche 317 00:18:39,320 --> 00:18:45,560 Speaker 1: Bank Barclays, with all the challenges they have. Just below 318 00:18:45,600 --> 00:18:50,240 Speaker 1: credit suite, there's a little bit of apples and oranges here, 319 00:18:50,680 --> 00:18:55,640 Speaker 1: you BS, So let's go sequential you b as best, 320 00:18:57,240 --> 00:19:00,320 Speaker 1: then credit suites fifty two. Then the channel just a 321 00:19:00,359 --> 00:19:03,280 Speaker 1: bar plays forty five and to give you a sense 322 00:19:03,320 --> 00:19:08,679 Speaker 1: of the outlier that is Deutsche Bank that off the bloomer. 323 00:19:08,760 --> 00:19:13,840 Speaker 1: It's remarkable, just just stunning right now. Six to client 324 00:19:13,960 --> 00:19:19,199 Speaker 1: for financials in Europe. UH, in the stack sectors, UH, 325 00:19:19,600 --> 00:19:23,320 Speaker 1: that is double the drop in any other sector. The 326 00:19:23,440 --> 00:19:27,240 Speaker 1: tape is fractionally better in the US than it was 327 00:19:27,359 --> 00:19:30,160 Speaker 1: twenty minutes ago. We've gone from negative forty on futures 328 00:19:30,480 --> 00:19:34,240 Speaker 1: to negative thirty two down futures, negative to sixty seven yields. 329 00:19:34,320 --> 00:19:36,480 Speaker 1: Made a dash for one point five. Oh we didn't 330 00:19:36,520 --> 00:19:40,560 Speaker 1: get there. Nice recovery, higher yield, lower note prices, and 331 00:19:40,640 --> 00:19:43,840 Speaker 1: the last twenty minutes one point five nine percent only 332 00:19:43,960 --> 00:19:47,880 Speaker 1: eight basis points lower yield. It was ten or even 333 00:19:48,560 --> 00:19:52,040 Speaker 1: eleven at one point, West Texas twenty six dollars fifty 334 00:19:52,119 --> 00:19:55,760 Speaker 1: two cents a barrel economic data. Well, you know, a 335 00:19:55,840 --> 00:19:58,760 Speaker 1: little bit, a little bit back and forth, but we'll 336 00:19:58,800 --> 00:20:00,920 Speaker 1: do that next. Michael mc key and Tom Keens stay 337 00:20:00,960 --> 00:20:07,399 Speaker 1: with us. Bloomberg Surveillance coming up there with all do respect. 338 00:20:07,480 --> 00:20:09,040 Speaker 1: Highlight brought you by land Rover. If it's in your 339 00:20:09,119 --> 00:20:11,040 Speaker 1: nature to cast off the every day and seek adventure, 340 00:20:11,280 --> 00:20:13,480 Speaker 1: the Discovery Sport was built to help your search. Visit 341 00:20:13,560 --> 00:20:16,000 Speaker 1: landroverer tye state dot com for special offers during the 342 00:20:16,119 --> 00:20:24,200 Speaker 1: only Adventure Sales event. Land Rower Above and Beyond broadcasting 343 00:20:24,320 --> 00:20:28,080 Speaker 1: live to New York, Bloomberg eleventh, Willo to Washington, d C, 344 00:20:28,280 --> 00:20:33,520 Speaker 1: Bloomberg to Boston, Bloomberg twelve Honors to San Francisco, Bloomberg 345 00:20:33,640 --> 00:20:37,159 Speaker 1: nine six, to the Country Series Exam Channel one ninety 346 00:20:37,359 --> 00:20:40,359 Speaker 1: and around the globe the Bloomberg Radio Plus AB and 347 00:20:40,400 --> 00:20:45,479 Speaker 1: Bloomberg dot Com. This is Bloomberg Surveillance. A tardy low 348 00:20:45,520 --> 00:20:49,120 Speaker 1: Street Michael McKee along with Tom Keene. Economic Indicators brought 349 00:20:49,119 --> 00:20:51,760 Speaker 1: to you by Commonwealth Financial Network. When it's time to 350 00:20:51,880 --> 00:20:54,240 Speaker 1: change the conversation, talk with a broker dealer r A 351 00:20:54,359 --> 00:20:56,480 Speaker 1: that's ready to listen call eight six six four six 352 00:20:56,520 --> 00:20:59,080 Speaker 1: two three six three eight or is it Commonwealth dot 353 00:20:59,119 --> 00:21:03,399 Speaker 1: com to learned more? Initial jobless claims are out and 354 00:21:03,480 --> 00:21:05,960 Speaker 1: Videt l. Judas has the numbers from the first word 355 00:21:06,000 --> 00:21:08,800 Speaker 1: desk Winny. We should note that the economists basically nailed 356 00:21:08,840 --> 00:21:12,560 Speaker 1: this one. Yes, Michael, No, they didn't their way off. 357 00:21:13,359 --> 00:21:16,960 Speaker 1: That's because they changed the previous week. But anyway, okay, okay, okay, 358 00:21:17,040 --> 00:21:19,239 Speaker 1: I got you, got you down sixteen thousand and two 359 00:21:19,320 --> 00:21:22,120 Speaker 1: hundred sixty nine thousand going into the report two hundred 360 00:21:22,160 --> 00:21:24,359 Speaker 1: and eighty thousand, and yes, as you say, there were 361 00:21:24,400 --> 00:21:28,080 Speaker 1: those changes. Nonetheless, this level two hundred and sixty nine 362 00:21:28,160 --> 00:21:32,000 Speaker 1: thousand consistent with a strong labor market. Economists had been 363 00:21:32,080 --> 00:21:34,920 Speaker 1: warning the prior weeks we could have been seeing some 364 00:21:35,359 --> 00:21:38,280 Speaker 1: weakening in the labor market, not the case. Claims below 365 00:21:38,320 --> 00:21:41,080 Speaker 1: three hundred thousand for almost a year. Now again, jobless 366 00:21:41,119 --> 00:21:44,120 Speaker 1: claims last week after some tinkering with the data down 367 00:21:44,200 --> 00:21:47,280 Speaker 1: by sixteen thousand to two hundred sixty nine thousand at 368 00:21:47,280 --> 00:21:49,680 Speaker 1: the Bloomberg First work as company dealt you. Thanks. Let's 369 00:21:49,680 --> 00:21:51,439 Speaker 1: go back to New York if anything so much, very 370 00:21:51,480 --> 00:21:54,000 Speaker 1: quickly on international front, before we get to the U S. 371 00:21:54,080 --> 00:21:57,639 Speaker 1: Carl Weinberg has just written a blistering note. Mike. This 372 00:21:57,800 --> 00:22:00,560 Speaker 1: is the first note I've seen with some He says, 373 00:22:01,080 --> 00:22:04,440 Speaker 1: where are the governments? Quote, where are the governments? Why 374 00:22:04,600 --> 00:22:08,080 Speaker 1: is no government leader or finance minister anywhere? And the 375 00:22:08,160 --> 00:22:12,720 Speaker 1: G seven calling a confab to do something proactive to 376 00:22:12,960 --> 00:22:17,240 Speaker 1: address a global economic and financial market collapse. I would 377 00:22:17,280 --> 00:22:19,760 Speaker 1: suggest Mr McKee, this will be a theme for the 378 00:22:19,880 --> 00:22:24,280 Speaker 1: coming days. Well, you know, if I'm well, if the 379 00:22:24,359 --> 00:22:28,120 Speaker 1: fiscal authorities have been missing in action for years, will 380 00:22:28,200 --> 00:22:31,159 Speaker 1: stipulate that. But if I'm a central banker, I'm wondering, Um, 381 00:22:31,359 --> 00:22:33,440 Speaker 1: wait a minute. You know, for months you've been yelling 382 00:22:33,480 --> 00:22:35,320 Speaker 1: at us to get the heck out of the economies, 383 00:22:35,760 --> 00:22:38,520 Speaker 1: and now you're wondering why we're not deeper in it. 384 00:22:39,119 --> 00:22:42,119 Speaker 1: So I'm not sure if they're you know, Michael Farley 385 00:22:42,200 --> 00:22:44,800 Speaker 1: put it this way about Gannett yelling yesterday, darned if 386 00:22:44,800 --> 00:22:48,840 Speaker 1: you cut, darned if you don't. So um, he is 387 00:22:48,880 --> 00:22:52,080 Speaker 1: different language, but so it's hard to tell where they 388 00:22:52,080 --> 00:22:58,920 Speaker 1: should be. Chief economist at Steeple uh And she's with 389 00:22:59,040 --> 00:23:03,719 Speaker 1: us now to talk about the economic data. And h lindsay, 390 00:23:03,840 --> 00:23:08,680 Speaker 1: the numbers just out from the Labor Department suggests that 391 00:23:09,160 --> 00:23:12,600 Speaker 1: we're not seeing any kind of growing caution on the 392 00:23:12,680 --> 00:23:18,600 Speaker 1: part of America's corporations. About um a downturn that would 393 00:23:18,640 --> 00:23:21,960 Speaker 1: require them to lay people off. Well, jobless claims have 394 00:23:22,040 --> 00:23:24,639 Speaker 1: been improving for quite some time. We've seen a lot 395 00:23:24,680 --> 00:23:27,320 Speaker 1: of voluntility, of course, month of month, but when we 396 00:23:27,400 --> 00:23:30,000 Speaker 1: look at that four month average, we've seen this downward 397 00:23:30,040 --> 00:23:32,920 Speaker 1: trend in jobless claims for more than a year now. 398 00:23:33,400 --> 00:23:36,600 Speaker 1: So jobless claims certainly represent half of the equation, meaning 399 00:23:36,720 --> 00:23:40,360 Speaker 1: if you're gainfully employed, you're less concerned about being laid off, 400 00:23:40,760 --> 00:23:43,399 Speaker 1: But that doesn't necessarily translate into the other half of 401 00:23:43,440 --> 00:23:46,840 Speaker 1: the equation, which is very robust and strong job creation. 402 00:23:47,320 --> 00:23:50,440 Speaker 1: We have seen over sixty consecutive months of positive non 403 00:23:50,520 --> 00:23:53,200 Speaker 1: farm payball reports, but we haven't seen the type of 404 00:23:53,240 --> 00:23:57,280 Speaker 1: outstanding numbers up near consistent three hundred thousand that we'd 405 00:23:57,320 --> 00:24:00,400 Speaker 1: really expect for the type of recoveries at the SET 406 00:24:00,480 --> 00:24:03,200 Speaker 1: has been talking about for years now. Well, except that 407 00:24:03,280 --> 00:24:07,480 Speaker 1: we have seen consistently two hundred thousand for a long 408 00:24:07,560 --> 00:24:10,880 Speaker 1: period time, which is a different pattern than we've seen before. 409 00:24:10,960 --> 00:24:13,040 Speaker 1: Usually you get those three hundred four hundred thousands, but 410 00:24:13,160 --> 00:24:16,080 Speaker 1: you'd also get a bunch of one hundred thousand's. That's 411 00:24:16,080 --> 00:24:17,920 Speaker 1: a good point, and we have been right now is 412 00:24:18,000 --> 00:24:21,800 Speaker 1: a three month average around two thousand. But remember that's 413 00:24:21,840 --> 00:24:24,520 Speaker 1: coming down from a near five year high to a 414 00:24:24,640 --> 00:24:27,480 Speaker 1: three month low. So it's very clear that the labor 415 00:24:27,600 --> 00:24:30,720 Speaker 1: market is losing momentum at this point, and that comes 416 00:24:30,760 --> 00:24:33,879 Speaker 1: against the backdrop of other peripheral data that suggests the 417 00:24:33,960 --> 00:24:36,680 Speaker 1: labor market is not an unemployment when we talk about 418 00:24:36,680 --> 00:24:39,840 Speaker 1: the participation rate or still a heavy reliance on part 419 00:24:39,920 --> 00:24:44,080 Speaker 1: time and temporary labor. Lindsay, where are we with sure 420 00:24:44,200 --> 00:24:46,240 Speaker 1: yelling here? I mean she did that, what do we have? 421 00:24:46,320 --> 00:24:48,960 Speaker 1: We had an embargoed thing yesterday might get eight thirty. 422 00:24:49,440 --> 00:24:52,760 Speaker 1: And then she west philosophical, and then there were questions, 423 00:24:52,880 --> 00:24:55,800 Speaker 1: the Alexander saying she couldn't answer the damn question. She 424 00:24:55,920 --> 00:24:58,840 Speaker 1: got cut off. Lindsay, does she need in the I've 425 00:24:58,880 --> 00:25:01,000 Speaker 1: never heard the phrase before. Does she need to rip 426 00:25:01,080 --> 00:25:03,840 Speaker 1: up the script today and really calm, you know, really 427 00:25:03,880 --> 00:25:06,320 Speaker 1: make an effort to be central banker of the world. 428 00:25:06,920 --> 00:25:10,680 Speaker 1: It was exceptional. She was heading in true FED speak form. 429 00:25:11,160 --> 00:25:13,200 Speaker 1: She really seemed to be talking out of both sides 430 00:25:13,240 --> 00:25:17,720 Speaker 1: of her mouths, seemingly very optimistic about the current pace 431 00:25:18,040 --> 00:25:21,560 Speaker 1: of economic activity, and certainly the optimistic essuming should certainly 432 00:25:21,600 --> 00:25:25,120 Speaker 1: optimistic about a longer term prospect for the U S economy. 433 00:25:25,160 --> 00:25:27,520 Speaker 1: In fact, she went on to say as much as 434 00:25:27,600 --> 00:25:31,120 Speaker 1: final demand in the U S economy was improving despite 435 00:25:31,160 --> 00:25:33,560 Speaker 1: a sub one percent GDP pace at the end of 436 00:25:33,720 --> 00:25:36,879 Speaker 1: last year, So she really left the door open for 437 00:25:37,080 --> 00:25:40,639 Speaker 1: the possibility of an additional rate hike in March, and 438 00:25:40,760 --> 00:25:44,600 Speaker 1: yet at the same time highlighting concerns about ongoing volatility 439 00:25:44,640 --> 00:25:48,400 Speaker 1: in the equity markets, plunging oil prices and tighter labor 440 00:25:48,600 --> 00:25:52,399 Speaker 1: excuming tighter financial market conditions. She also left the possibility 441 00:25:52,440 --> 00:25:54,840 Speaker 1: that the Fed could back away from a second rate 442 00:25:54,920 --> 00:25:58,040 Speaker 1: increase in March, so really mudding the waters for investors, 443 00:25:58,400 --> 00:26:02,640 Speaker 1: making a lot more difficult on stand exactly half, Mike, 444 00:26:02,720 --> 00:26:04,720 Speaker 1: maybe we'll get clarity today. Let me know if you 445 00:26:04,760 --> 00:26:07,800 Speaker 1: hear clarity. I wouldn't hold my breath for that. Somebody 446 00:26:07,840 --> 00:26:16,639 Speaker 1: called Richard Clarity in our radio place, heard that he 447 00:26:16,760 --> 00:26:20,479 Speaker 1: just killed us. Lindsay. The Atlantic ends GDP now tracking 448 00:26:20,760 --> 00:26:23,879 Speaker 1: in the first quarter two and a half percent, So 449 00:26:25,160 --> 00:26:28,200 Speaker 1: you know, the data seemed to suggest that, you know, 450 00:26:28,359 --> 00:26:29,920 Speaker 1: things are not that bad, that we're going to see 451 00:26:29,920 --> 00:26:32,239 Speaker 1: a bit of a recovery here, well at least for now. 452 00:26:32,280 --> 00:26:36,440 Speaker 1: Remember the Atlanta GDP forecast models consistently revised with each 453 00:26:36,560 --> 00:26:38,720 Speaker 1: data point that comes out, so there's still a lot 454 00:26:38,840 --> 00:26:44,760 Speaker 1: of information left between now. In the first Lindsey, thank 455 00:26:44,800 --> 00:26:49,440 Speaker 1: you so much with stephil Nicholas, their chief econ Mike, 456 00:26:49,560 --> 00:26:52,640 Speaker 1: I I got a massive problem. Pimco just put out 457 00:26:52,680 --> 00:26:56,560 Speaker 1: on Twitter saying that thank you, Pimco saying Libby Cantrill 458 00:26:56,560 --> 00:27:00,199 Speaker 1: will we'll, we'll be with us. And it's a it's 459 00:27:00,240 --> 00:27:03,200 Speaker 1: a lovely photo of the lovely, lovely Libby Cantrill. She's 460 00:27:03,240 --> 00:27:06,920 Speaker 1: wearing a Peyton Manning jersey in a formal PIMCO meeting. 461 00:27:06,960 --> 00:27:09,119 Speaker 1: I can see Scott Mather in the background. You know, 462 00:27:09,160 --> 00:27:13,280 Speaker 1: everybody's looking very Pimco, except Libby's in the Denver Bronco jersey. 463 00:27:14,280 --> 00:27:19,639 Speaker 1: That's I mean, and and her kids wearing Denver Bronco 464 00:27:19,800 --> 00:27:22,680 Speaker 1: jerseys as well. I don't even want to ask she 465 00:27:22,840 --> 00:27:25,480 Speaker 1: have great taste in football teams or what I guess 466 00:27:25,520 --> 00:27:27,719 Speaker 1: she does. Let me Cantra will be this later coming up. 467 00:27:28,000 --> 00:27:32,680 Speaker 1: A must listen on European banking. US futures negative thirty 468 00:27:32,760 --> 00:27:38,159 Speaker 1: one down future is negative to sixty. Time to check 469 00:27:38,200 --> 00:27:39,960 Speaker 1: in with Michael bar and get the latest world in 470 00:27:40,160 --> 00:27:43,240 Speaker 1: national headlines Mike Time, thank you very much. President Obama 471 00:27:43,400 --> 00:27:46,160 Speaker 1: is in California for a week long visit to the state. 472 00:27:46,400 --> 00:27:51,080 Speaker 1: The President's first stops are at Democratic fundraisers. The president 473 00:27:51,240 --> 00:27:54,280 Speaker 1: has four stops today to in Silicon Valley and two 474 00:27:54,359 --> 00:27:58,480 Speaker 1: others in Los Angeles. Meanwhile, Republican presidential candidates are in 475 00:27:58,600 --> 00:28:02,840 Speaker 1: South Carolina of next week's primary. Donald Trump called Bernie 476 00:28:02,920 --> 00:28:06,919 Speaker 1: Sanders a wacky socialists. He wants to give the country away. 477 00:28:07,280 --> 00:28:12,439 Speaker 1: Your taxes are gonna be like folks. Sanders has raised 478 00:28:12,560 --> 00:28:16,120 Speaker 1: seven point one million dollars after his win in New Hampshire. 479 00:28:16,480 --> 00:28:19,879 Speaker 1: Tensions between North and South Korea are escalating. North Korea 480 00:28:19,960 --> 00:28:22,399 Speaker 1: says it is kicking South Koreans out of the country 481 00:28:22,760 --> 00:28:25,639 Speaker 1: and is freezing all South Korean assets at a jointly 482 00:28:25,680 --> 00:28:29,640 Speaker 1: run factory park in the North. Yesterday, Soul suspended operations 483 00:28:29,680 --> 00:28:32,400 Speaker 1: at the factory park. Tensions have increased after the North 484 00:28:32,480 --> 00:28:35,560 Speaker 1: on Sunday launched a long range of rocket Low snowfall 485 00:28:35,640 --> 00:28:38,320 Speaker 1: in Alaska is playing havoc, but the world's most famous 486 00:28:38,360 --> 00:28:41,200 Speaker 1: sled dog race, I Did a Rod, begins today with 487 00:28:41,280 --> 00:28:44,440 Speaker 1: a ceremonial jaunt through the streets and trails of Anchorage 488 00:28:44,480 --> 00:28:47,600 Speaker 1: and then tomorrow the competitive portion of the nearly thousand 489 00:28:47,640 --> 00:28:50,360 Speaker 1: mile race begins and Willow, about seventy five miles north 490 00:28:50,360 --> 00:28:52,760 Speaker 1: of Anchorage. Global Day was twenty four hours a day, 491 00:28:52,840 --> 00:28:55,480 Speaker 1: powered by our twenty four hundred journalists and more than 492 00:28:55,520 --> 00:28:57,920 Speaker 1: a hundred fifty news bureaus from around the world. I 493 00:28:57,960 --> 00:29:01,800 Speaker 1: am Michael Barr, Mike tom Thankoma. Time now for the 494 00:29:02,040 --> 00:29:06,400 Speaker 1: Bloomberg NBC Sports update with Rangers are kind of on 495 00:29:06,480 --> 00:29:09,520 Speaker 1: a role they are, indeed, Mike, and they're gonna have 496 00:29:09,560 --> 00:29:12,880 Speaker 1: a hard time catching Washing Tea in the top their division, 497 00:29:13,000 --> 00:29:15,520 Speaker 1: fifteen points behind, but the goal is to at least 498 00:29:15,520 --> 00:29:18,240 Speaker 1: been a second. Islanders Devil's Penguins all chasing them. So 499 00:29:18,520 --> 00:29:20,360 Speaker 1: big win for the Blue Church. Last night in Pittsburgh 500 00:29:20,360 --> 00:29:23,200 Speaker 1: three nothing has Henry Lunkwiz stopped all thirty four shots. 501 00:29:23,240 --> 00:29:25,480 Speaker 1: Coach of a Vino happy to win while playing without 502 00:29:25,880 --> 00:29:29,040 Speaker 1: Rick Nash and Ryan mcduonnough. I mean, anytime you're you 503 00:29:29,200 --> 00:29:31,760 Speaker 1: miss you know, whether it be on the fence or 504 00:29:32,120 --> 00:29:34,440 Speaker 1: up front, you miss some of your top people. It's 505 00:29:34,440 --> 00:29:37,240 Speaker 1: an opportunity for some other guys to step up. And 506 00:29:37,760 --> 00:29:39,600 Speaker 1: I think you know we had we have some other 507 00:29:39,680 --> 00:29:41,920 Speaker 1: guys that have stepped up. They'll go for a fifth 508 00:29:41,960 --> 00:29:44,200 Speaker 1: grade win tomorrow night at the Guard against Los Angeles. 509 00:29:44,320 --> 00:29:47,120 Speaker 1: Kings visit the Islanders tonight. Last night in Brooklyn, Memphis 510 00:29:47,160 --> 00:29:49,200 Speaker 1: sent the next to their fortieth loss of the season. 511 00:29:49,240 --> 00:29:51,479 Speaker 1: One on nine. The NBA about to hit the All 512 00:29:51,520 --> 00:29:55,040 Speaker 1: Star break. Last night, Cleveland beat the Lakers. Kobe Bryant 513 00:29:55,120 --> 00:29:58,080 Speaker 1: faced Lebron James for the next to last time ever, 514 00:29:59,000 --> 00:30:02,400 Speaker 1: last game here in Cleveland, and uh, you know remember 515 00:30:02,440 --> 00:30:04,320 Speaker 1: when he was a rookie and I was watching from home, 516 00:30:04,720 --> 00:30:06,720 Speaker 1: you know him here in the slam dunk competition and 517 00:30:07,200 --> 00:30:09,240 Speaker 1: home between l A's and and dunking at home and 518 00:30:09,320 --> 00:30:12,400 Speaker 1: taking home uh, you know, champion at dunk contests. So 519 00:30:12,920 --> 00:30:16,240 Speaker 1: you know our fans, uh, I mean they love great 520 00:30:16,480 --> 00:30:19,240 Speaker 1: you know, great athletes, great people, and they you know, 521 00:30:19,320 --> 00:30:21,440 Speaker 1: they pay you respects to one of the greatest ever. 522 00:30:21,760 --> 00:30:24,880 Speaker 1: They never met in the postseason, obviously always in different conferences, 523 00:30:24,960 --> 00:30:26,840 Speaker 1: but one or the other has playing each of the 524 00:30:26,920 --> 00:30:29,960 Speaker 1: last nine NBA finals, were never the same. One's starting 525 00:30:29,960 --> 00:30:31,840 Speaker 1: the A T T at Pebble Beast today Jordan's speed 526 00:30:31,920 --> 00:30:34,840 Speaker 1: teen off before Nude East. He's playing with Phil Mickelson 527 00:30:35,120 --> 00:30:39,360 Speaker 1: this NBC Sports t I thinks so much appreciated Douglas 528 00:30:39,480 --> 00:30:43,000 Speaker 1: cast always brave. He says, enough on the yield with 529 00:30:43,080 --> 00:30:45,920 Speaker 1: a tenure one point six zero percent at one point 530 00:30:46,000 --> 00:30:48,760 Speaker 1: five six he shorts the t LT that's looking for 531 00:30:48,920 --> 00:30:53,400 Speaker 1: a higher yield, lower note price. I would note I 532 00:30:53,440 --> 00:30:55,080 Speaker 1: don't have an opinion on this trade. I would just 533 00:30:55,160 --> 00:30:58,960 Speaker 1: say that, uh, the yield move recently is out to 534 00:30:59,120 --> 00:31:04,520 Speaker 1: two points three standard deviations, that is without question extended. 535 00:31:04,720 --> 00:31:08,240 Speaker 1: We have an extended Bloomberg surveillance coming up. This is 536 00:31:08,520 --> 00:31:12,000 Speaker 1: must listen if you're part of Global Wall Street. Christopher 537 00:31:12,040 --> 00:31:16,360 Speaker 1: Wheeler on the European banks, stay with us, Bloomberg surveillance 538 00:31:20,960 --> 00:31:24,320 Speaker 1: and gold prices are up forty dollars this morning. We'll 539 00:31:24,360 --> 00:31:27,880 Speaker 1: talk with HSBC's James Steele. Is this just a safe 540 00:31:27,920 --> 00:31:31,160 Speaker 1: haven short term trade or is gold really turning around? 541 00:31:37,560 --> 00:31:40,920 Speaker 1: Global Business News twenty four hours a day at Bloomberg 542 00:31:40,960 --> 00:31:44,040 Speaker 1: dot Com, the radio, plus mobile lab and on your radio. 543 00:31:44,360 --> 00:31:48,000 Speaker 1: This is a Bloomberg Business Flash and I'm Camra in Moscow. 544 00:31:48,080 --> 00:31:50,040 Speaker 1: This updates brought to you by u n c Keenan 545 00:31:50,080 --> 00:31:54,120 Speaker 1: Flaggler's full time NBA program unc Keenan Flagler Shaping leaders 546 00:31:54,440 --> 00:31:57,160 Speaker 1: driving results. Learn more at NBA dot U, n C 547 00:31:57,440 --> 00:32:00,280 Speaker 1: dot E d U. Finalings for unemployment ben fits in 548 00:32:00,320 --> 00:32:02,640 Speaker 1: the US decline to a seven week low as hiring 549 00:32:02,720 --> 00:32:06,600 Speaker 1: managers demonstrated confidence in the outlook after temporary adjustments around 550 00:32:06,600 --> 00:32:09,800 Speaker 1: the holidays. Jobless claims dropped by sixteen thousand to two 551 00:32:09,880 --> 00:32:13,160 Speaker 1: hundred sixty nine thousand and the week that ended February six, 552 00:32:13,560 --> 00:32:17,240 Speaker 1: US dock indix futures meanwhile following oil prices lower, extending 553 00:32:17,280 --> 00:32:20,880 Speaker 1: an earlier slump as investors shunned risk worldwide to spark 554 00:32:20,920 --> 00:32:23,160 Speaker 1: a global sell off in equities. We checked the markets 555 00:32:23,200 --> 00:32:26,720 Speaker 1: every fifteen minutes throughout the trading day. On Bloomberg, SNPE 556 00:32:26,800 --> 00:32:29,760 Speaker 1: mini futures are down thirty points downy mini futures down 557 00:32:29,800 --> 00:32:32,800 Speaker 1: two hundred fifty seven. NASADAC E mini futures are down 558 00:32:32,920 --> 00:32:36,240 Speaker 1: sixty two. The decks in Germany down two point one percent, 559 00:32:36,680 --> 00:32:38,800 Speaker 1: CAC in Paris down three point three percent, in the 560 00:32:38,880 --> 00:32:41,560 Speaker 1: FT one hundred down one point nine percent, ten Your 561 00:32:41,560 --> 00:32:44,080 Speaker 1: treasury up twenty one thirty seconds, the yield one point 562 00:32:44,120 --> 00:32:46,840 Speaker 1: five nine percent yield on the two year point six 563 00:32:46,920 --> 00:32:50,280 Speaker 1: two percent, NIMAX Scrude oil down two point eight percent 564 00:32:50,440 --> 00:32:53,040 Speaker 1: or seventy seven cents to twenty six dollars sixty eight 565 00:32:53,160 --> 00:32:55,600 Speaker 1: cents of barrel Comacs gold is up three point two 566 00:32:55,640 --> 00:32:58,640 Speaker 1: percent or thirty eight dollars forty cents to twelve thirty three. 567 00:32:58,640 --> 00:33:02,640 Speaker 1: Announced the euro a doll four again one twelve point 568 00:33:02,800 --> 00:33:05,400 Speaker 1: four nine. And that's a Bloomberg Business flash, Tom and 569 00:33:05,480 --> 00:33:08,160 Speaker 1: Mike Curen nice data check in one. It shows folks 570 00:33:08,200 --> 00:33:12,040 Speaker 1: clearly across all classset classes. A little bit of a 571 00:33:12,120 --> 00:33:16,800 Speaker 1: bid here, a little better tape in the last on 572 00:33:16,920 --> 00:33:21,440 Speaker 1: Wall Street. The following is from Bloomberg View. Opinions and 573 00:33:21,520 --> 00:33:25,600 Speaker 1: commentary from Bloomberg columnists. I'm Jonathan Bernstein, a columnist for 574 00:33:25,640 --> 00:33:28,360 Speaker 1: Bloomberg View. Who were the big losers in New Hampshire? 575 00:33:28,480 --> 00:33:32,200 Speaker 1: Beyond the obvious answers of Hillary Clinton, Chris Christie, Marco 576 00:33:32,320 --> 00:33:36,440 Speaker 1: Rubio and Carly Fiorina. How about these New Hampshire Democrats 577 00:33:36,480 --> 00:33:38,480 Speaker 1: have already grumbled about New Hampshire is first in the 578 00:33:38,560 --> 00:33:41,840 Speaker 1: nation primary because the Granite state electorate is so different 579 00:33:41,920 --> 00:33:45,080 Speaker 1: from the national party. Now, I expect Conservatives to begin 580 00:33:45,240 --> 00:33:48,640 Speaker 1: organizing against New Hampshire after another cycle in which mainstream 581 00:33:48,680 --> 00:33:52,320 Speaker 1: Conservative candidates were walloped momentum the final results in New 582 00:33:52,360 --> 00:33:55,960 Speaker 1: Hampshire closely matched the January polls in that state, regardless 583 00:33:56,000 --> 00:33:58,640 Speaker 1: of what the candidates did in Iowa. Ted Cruz, Marco 584 00:33:58,760 --> 00:34:01,600 Speaker 1: Rubio and Hillary Clinton all did well in Iowa, but 585 00:34:01,680 --> 00:34:04,840 Speaker 1: it did nothing for them a week later and party actors. 586 00:34:04,960 --> 00:34:07,800 Speaker 1: High profile Democrats who supported Clinton will continue to be 587 00:34:07,880 --> 00:34:10,879 Speaker 1: attacked as part of an establishment corrupted by money. High 588 00:34:10,920 --> 00:34:14,799 Speaker 1: profile Republicans who opposed Trump will get that too, and worse. 589 00:34:15,080 --> 00:34:17,839 Speaker 1: The parties will still probably wind up where they were going, 590 00:34:18,080 --> 00:34:21,160 Speaker 1: but for individual party elites it won't be found getting there. 591 00:34:21,239 --> 00:34:24,120 Speaker 1: I'm Jonathan Bernstein. For more view, please go to Bloomberg 592 00:34:24,200 --> 00:34:26,960 Speaker 1: View dot com or view go on the Bloomberg terminal. 593 00:34:27,239 --> 00:34:30,920 Speaker 1: This has been Bloomberg View and Bloombergview commentary can be 594 00:34:30,960 --> 00:34:34,120 Speaker 1: here in hourly weekdays on Bloomberg Radio. He has helped 595 00:34:34,200 --> 00:34:36,760 Speaker 1: us so much with respective from Europe with Atlantic Equities, 596 00:34:36,840 --> 00:34:40,759 Speaker 1: Christopher we are. Christopher helped me out with how a 597 00:34:40,880 --> 00:34:45,880 Speaker 1: bank management reacts when their tangible book becomes less than tangible. 598 00:34:46,000 --> 00:34:49,520 Speaker 1: We just went through a compare and contrast of ubs 599 00:34:50,000 --> 00:34:53,480 Speaker 1: better than credit suites, better than Barkley's in way down 600 00:34:53,600 --> 00:35:00,239 Speaker 1: lowers Deutsche Bank. How does a bank manage allowsy book value. Well, 601 00:35:00,640 --> 00:35:03,680 Speaker 1: I guess the answer to that is that they crossed 602 00:35:03,680 --> 00:35:06,200 Speaker 1: their fingers that they can actually get some improvement. And 603 00:35:06,280 --> 00:35:07,799 Speaker 1: I think that's where we are at the moment. I mean, 604 00:35:07,840 --> 00:35:10,279 Speaker 1: bottom line is it means obviously, issuing any kind of 605 00:35:10,320 --> 00:35:14,799 Speaker 1: equity is very very expensive, fairly dilutive to existing shareholders, 606 00:35:15,280 --> 00:35:17,520 Speaker 1: and you know, it's something that banks obviously want to 607 00:35:17,520 --> 00:35:19,680 Speaker 1: avoid and they have to think about how they obviously 608 00:35:19,800 --> 00:35:22,759 Speaker 1: rebuild their learning so that they can rebuild their returns, 609 00:35:23,280 --> 00:35:26,239 Speaker 1: and then investors start to buy out the stock so 610 00:35:26,360 --> 00:35:29,040 Speaker 1: that they move above that book value and obviously makes 611 00:35:29,080 --> 00:35:31,279 Speaker 1: the management start to feel more comfortable and in a 612 00:35:31,360 --> 00:35:33,520 Speaker 1: position where they can be much more flexible about how 613 00:35:33,560 --> 00:35:38,399 Speaker 1: they run their capital management programs. Ben Berniniki basically put 614 00:35:38,440 --> 00:35:40,279 Speaker 1: a gun to the head of the US banks and 615 00:35:40,400 --> 00:35:44,960 Speaker 1: made them do that. There's no I guess, comparable person 616 00:35:45,719 --> 00:35:48,719 Speaker 1: who can do that to the European banks. Well, look, 617 00:35:48,719 --> 00:35:50,120 Speaker 1: I think if we if we go back, I mean, 618 00:35:50,200 --> 00:35:52,480 Speaker 1: most of the banks were forced to increase capital, but 619 00:35:52,560 --> 00:35:55,719 Speaker 1: of course it wasn't the big bang effect that that 620 00:35:55,840 --> 00:35:58,360 Speaker 1: you had in the United States. And obviously I always 621 00:35:58,400 --> 00:36:00,480 Speaker 1: find it funny that you copied what the kay did. 622 00:36:00,760 --> 00:36:03,000 Speaker 1: We did it by accident, but if you la Member 623 00:36:03,040 --> 00:36:05,400 Speaker 1: Tart was a much more complex process and becoming a 624 00:36:05,520 --> 00:36:08,200 Speaker 1: simple process of saying, let's put capital into these banks, 625 00:36:08,239 --> 00:36:10,799 Speaker 1: get them working again and get their the turns moving 626 00:36:10,880 --> 00:36:14,880 Speaker 1: upwards in a tough loculation environment. And that's what the 627 00:36:15,000 --> 00:36:16,920 Speaker 1: UK did, that to lescue the Little Bank of Scotland 628 00:36:16,920 --> 00:36:19,200 Speaker 1: and Lloyd's. But unfortunately for the lesser sector it's been 629 00:36:19,239 --> 00:36:22,880 Speaker 1: this very slow adaptation to the new paladigm that exists 630 00:36:22,960 --> 00:36:28,400 Speaker 1: post classes in financial services. Where are we now? If 631 00:36:28,440 --> 00:36:31,480 Speaker 1: we have Deutsche Bank down to recent laws, it bounces up. 632 00:36:32,000 --> 00:36:34,760 Speaker 1: As you know, Christopher Wheeler, it's been an ugly morning 633 00:36:35,200 --> 00:36:36,920 Speaker 1: and I guess there's a little bit of a bid now. 634 00:36:37,000 --> 00:36:40,200 Speaker 1: It's based on news flow. What is the immediacy or 635 00:36:40,360 --> 00:36:46,360 Speaker 1: urgency for Mr Cryan with institutions like the Bundesbank, like 636 00:36:47,200 --> 00:36:51,000 Speaker 1: the e c B or for that matter, of Brussels. Look, 637 00:36:51,280 --> 00:36:54,200 Speaker 1: this becomes a daily process. For somebody like us in 638 00:36:54,239 --> 00:36:56,000 Speaker 1: the situation he's in, he has to talk to these 639 00:36:56,040 --> 00:36:59,040 Speaker 1: people every single day, if not himself personally, his CFO, 640 00:36:59,560 --> 00:37:03,040 Speaker 1: his c these guys have to be there constantly reassuring 641 00:37:03,080 --> 00:37:05,000 Speaker 1: them what's changed in the last twenty four out in 642 00:37:05,080 --> 00:37:07,600 Speaker 1: terms of our liquidity position, our capital position, you know, 643 00:37:07,680 --> 00:37:10,360 Speaker 1: concerns around if you want litigation, they've got to just 644 00:37:10,520 --> 00:37:13,200 Speaker 1: keep talking. It's like you know, it's it's where an 645 00:37:13,239 --> 00:37:15,120 Speaker 1: M and a banker is doing a deal and things 646 00:37:15,200 --> 00:37:16,920 Speaker 1: going a bit slicky. Talk to your client as much 647 00:37:16,960 --> 00:37:19,080 Speaker 1: as you can to make sure they feel they at 648 00:37:19,160 --> 00:37:21,640 Speaker 1: least know what's going on, even if it's bad newsual delivering. 649 00:37:21,840 --> 00:37:24,799 Speaker 1: And I think that's what's going on at the moment. Well, 650 00:37:26,840 --> 00:37:30,120 Speaker 1: we're getting through earnings. Is this going to be the 651 00:37:30,239 --> 00:37:34,879 Speaker 1: low point um for these banks? Or is there something 652 00:37:34,920 --> 00:37:38,320 Speaker 1: out there that we don't know about that investors should 653 00:37:38,360 --> 00:37:42,600 Speaker 1: be selling. Look, I had long conversations with clients this 654 00:37:42,680 --> 00:37:44,880 Speaker 1: morning about US banks and they're sitting there sclatching their 655 00:37:44,880 --> 00:37:46,560 Speaker 1: heads about why some of the banks are staying at 656 00:37:46,600 --> 00:37:48,920 Speaker 1: such low levels. And we we keep talking about all 657 00:37:49,000 --> 00:37:52,200 Speaker 1: the possibilities out there of more clidit losses, energy losses. 658 00:37:52,600 --> 00:37:54,960 Speaker 1: What happens with negative interlance plays. Are we going into 659 00:37:55,000 --> 00:37:57,560 Speaker 1: the session there's nothing concrete there at the moment. The 660 00:37:57,680 --> 00:37:59,840 Speaker 1: earnings have kind of dealt with the concrete stuff. And 661 00:38:00,000 --> 00:38:02,239 Speaker 1: in many cases that were structuring some of these banks 662 00:38:02,280 --> 00:38:04,800 Speaker 1: are going through. I think now we're going we do 663 00:38:04,920 --> 00:38:06,920 Speaker 1: go into a part appeal, but of course the maclob 664 00:38:06,960 --> 00:38:08,840 Speaker 1: will come to play. We've seen this morning, as you know, 665 00:38:09,360 --> 00:38:12,280 Speaker 1: the Swedish and the Swedish Central Bank has pushed negative 666 00:38:12,320 --> 00:38:15,359 Speaker 1: in less lakes further down. That's obviously another leason why 667 00:38:15,400 --> 00:38:17,440 Speaker 1: the markets are being spooked. That kind of thing is 668 00:38:17,480 --> 00:38:20,120 Speaker 1: what's going to hurt the banks now rather than hardcore 669 00:38:20,520 --> 00:38:23,160 Speaker 1: earnings numbers over the next two months. Are we in 670 00:38:23,200 --> 00:38:26,680 Speaker 1: the middle of a feed really negative feedback loop from 671 00:38:27,280 --> 00:38:31,439 Speaker 1: negative interest rates? Is that something that the banks can't 672 00:38:31,480 --> 00:38:34,080 Speaker 1: deal with. I think that's the case. And I was 673 00:38:34,080 --> 00:38:35,320 Speaker 1: saying to a client this morning, I don't want to 674 00:38:35,320 --> 00:38:37,160 Speaker 1: give an advert for for JP Morgan, but they have 675 00:38:37,200 --> 00:38:39,960 Speaker 1: their investor day coming up on the twenty three of February, 676 00:38:40,320 --> 00:38:42,520 Speaker 1: and I'm going to be fascinated. Jamie always likes to 677 00:38:42,520 --> 00:38:44,960 Speaker 1: be a leader in the industry, and Hill have Malian 678 00:38:45,080 --> 00:38:47,799 Speaker 1: Lake is CFO standing up and she will certainly talk 679 00:38:47,800 --> 00:38:50,640 Speaker 1: about the implications of negative interless leagues. Even though people 680 00:38:50,719 --> 00:38:53,200 Speaker 1: don't necessarily think they are alive in the US, but 681 00:38:53,280 --> 00:38:56,120 Speaker 1: I think nobody really understands quite what they could mean 682 00:38:56,160 --> 00:38:59,160 Speaker 1: to bank earnings apart them, they're surely negative. What's have 683 00:38:59,320 --> 00:39:02,440 Speaker 1: you worked out? And this is what Christopher Wheeler does best, folks. 684 00:39:03,000 --> 00:39:06,400 Speaker 1: The cash call the Deutsche Bank faces to review. I 685 00:39:06,520 --> 00:39:09,560 Speaker 1: believe they had a seven billion dollar right down, you 686 00:39:09,640 --> 00:39:12,279 Speaker 1: know recently in the last year or so. You've got 687 00:39:12,440 --> 00:39:15,960 Speaker 1: in your head further litigation, you know, energy, the usual 688 00:39:16,520 --> 00:39:19,919 Speaker 1: stuff of banking. Is it wrong to say they're looking 689 00:39:20,000 --> 00:39:24,200 Speaker 1: at a fifteen billion dollar cash call of some form 690 00:39:24,640 --> 00:39:30,279 Speaker 1: to right size a national institution. Look, they have eleven 691 00:39:30,640 --> 00:39:32,560 Speaker 1: common equity Tier one lay show, which is a very 692 00:39:32,600 --> 00:39:34,960 Speaker 1: similar level that you have. Jens Morgan I think has 693 00:39:34,960 --> 00:39:37,719 Speaker 1: a leven and a half. Now, the problem is Tommy 694 00:39:37,840 --> 00:39:40,200 Speaker 1: touched on it very well there that they try to 695 00:39:40,239 --> 00:39:42,720 Speaker 1: deal with all the least structuraling issues about the problem 696 00:39:42,719 --> 00:39:45,400 Speaker 1: they're having is trying to get earnings going again, particularly 697 00:39:45,440 --> 00:39:49,120 Speaker 1: the investment bank. And is there another big hit for litigation, 698 00:39:49,200 --> 00:39:51,880 Speaker 1: because if it is, it could be another multi billion 699 00:39:52,120 --> 00:39:54,480 Speaker 1: capital lazing. But I think I've said to you before, 700 00:39:54,760 --> 00:39:56,600 Speaker 1: I think John Klein is a long way from that 701 00:39:56,680 --> 00:39:58,520 Speaker 1: at the moment. I think there's a lot more noise 702 00:39:58,600 --> 00:40:00,800 Speaker 1: around the stock. I'm oh with you on that. I 703 00:40:00,880 --> 00:40:03,279 Speaker 1: think everything you just said is brilliant, except as a 704 00:40:03,360 --> 00:40:08,560 Speaker 1: point where the equity share price starts forcing the conversation 705 00:40:09,000 --> 00:40:11,759 Speaker 1: where are we are there, whether it's UNI Credit or 706 00:40:11,800 --> 00:40:14,600 Speaker 1: Deutsche Bank or eight banks Mike McKay and I don't know. 707 00:40:15,880 --> 00:40:18,879 Speaker 1: Look again, I don't think at the moment what you're 708 00:40:18,920 --> 00:40:21,480 Speaker 1: looking out there that they're they're feeding their capitalists let in, 709 00:40:21,600 --> 00:40:23,400 Speaker 1: but what we could have And there's a lot of 710 00:40:23,440 --> 00:40:25,640 Speaker 1: talk about the FED doing this as well, whether or 711 00:40:25,680 --> 00:40:27,920 Speaker 1: not that that they're going to say it's just not enough. 712 00:40:28,000 --> 00:40:29,920 Speaker 1: You've all moved up to much high levels of capital. 713 00:40:30,000 --> 00:40:31,840 Speaker 1: I think this is your point, Tom, you have to 714 00:40:31,880 --> 00:40:34,040 Speaker 1: go higher. You have to go higher to give even 715 00:40:34,120 --> 00:40:36,960 Speaker 1: more confidence to or not that's really really really concerned. 716 00:40:37,320 --> 00:40:39,040 Speaker 1: And is it going to be billions? Of course it 717 00:40:39,160 --> 00:40:40,800 Speaker 1: is for Deutsche Bank, because if they do do this, 718 00:40:40,920 --> 00:40:42,319 Speaker 1: they're going to have to do it a very big, 719 00:40:42,400 --> 00:40:45,319 Speaker 1: big way. And hopefully, and we've said this before about 720 00:40:45,360 --> 00:40:47,600 Speaker 1: Deutsche say this is the last time we'll do this 721 00:40:47,680 --> 00:40:49,400 Speaker 1: for a very long time. We can get on with 722 00:40:49,480 --> 00:40:51,720 Speaker 1: running out business then. But I think at the moment 723 00:40:52,320 --> 00:40:54,520 Speaker 1: there's just so much uncertainy about how much they actually 724 00:40:54,600 --> 00:40:58,799 Speaker 1: need capital concerns earnings concerns, negative interest rate concerns. How 725 00:40:58,880 --> 00:41:00,640 Speaker 1: much of this has got a fee into the macro 726 00:41:00,800 --> 00:41:05,000 Speaker 1: economy by causing banks to pull back on lending. Well, 727 00:41:05,040 --> 00:41:07,480 Speaker 1: that's the most fascinating point, isn't it. I mean, if 728 00:41:07,520 --> 00:41:10,320 Speaker 1: the capital is reasonably the last, which in theory on 729 00:41:10,400 --> 00:41:12,280 Speaker 1: paper it is, and we're just saying whether the legulator 730 00:41:12,320 --> 00:41:15,080 Speaker 1: wants to push that push that up again. You comparic 731 00:41:15,120 --> 00:41:17,360 Speaker 1: with the US banks who look very comfortable on capital. 732 00:41:17,680 --> 00:41:20,239 Speaker 1: They want to lend money to good credits. But the 733 00:41:20,360 --> 00:41:22,800 Speaker 1: thing is bank start to get really uncomfortable. And remember 734 00:41:23,160 --> 00:41:25,160 Speaker 1: just touched on Jamie Diamond. It's not Jamie Diamond who's 735 00:41:25,200 --> 00:41:27,480 Speaker 1: lending the money. It's his loan officer, you know, sitting 736 00:41:27,520 --> 00:41:29,359 Speaker 1: in the Midwest or sitting on the West coast, has 737 00:41:29,360 --> 00:41:31,960 Speaker 1: got to make the decision. And these guys are naturally 738 00:41:32,000 --> 00:41:34,640 Speaker 1: going to become more cautious because their job is not 739 00:41:34,719 --> 00:41:36,560 Speaker 1: to lose the bank money, is to lend it. Well, 740 00:41:36,800 --> 00:41:38,960 Speaker 1: and you just become far more, far more cautious. And 741 00:41:38,960 --> 00:41:41,120 Speaker 1: whether you give that money to a good, good concern 742 00:41:41,200 --> 00:41:43,400 Speaker 1: in case it turns bad. I know, Christopher wheel Er, 743 00:41:43,440 --> 00:41:46,200 Speaker 1: you're in a Six Nations rugby meeting, and we're sorry 744 00:41:46,239 --> 00:41:49,520 Speaker 1: we dragged you out of it with Atlantic equities. We 745 00:41:49,600 --> 00:41:52,080 Speaker 1: appreciate it. We need to be made clear, folks, within 746 00:41:52,160 --> 00:41:55,520 Speaker 1: the trauma of the tape, that the tape is better. 747 00:41:55,680 --> 00:41:57,520 Speaker 1: I want to make that clear. In the last hour 748 00:41:58,120 --> 00:42:02,040 Speaker 1: there is a modest correlated Mike McKee mentioned gold up 749 00:42:02,120 --> 00:42:05,279 Speaker 1: forty dollars. It came down up thirty eight dollars now 750 00:42:05,360 --> 00:42:10,719 Speaker 1: at forty one West Texas a little better one down 751 00:42:10,880 --> 00:42:14,440 Speaker 1: seventy two cents. It was down a dollar something earlier. 752 00:42:14,520 --> 00:42:16,959 Speaker 1: The ten year yield does better. A one fifty five 753 00:42:17,440 --> 00:42:20,680 Speaker 1: has become a one fifty nine. So within the caution 754 00:42:20,920 --> 00:42:24,160 Speaker 1: and the reticence, the gloom, it's out there. It is 755 00:42:24,200 --> 00:42:26,840 Speaker 1: a better tape. Michael McKee. And unless you can have 756 00:42:26,880 --> 00:42:29,759 Speaker 1: a lot of fun making charts today, because there's a 757 00:42:29,800 --> 00:42:32,960 Speaker 1: lot of correlations, you could be a goal dollars down, 758 00:42:33,200 --> 00:42:37,239 Speaker 1: Gold is up. Interesting move their oil prices correlating with 759 00:42:37,320 --> 00:42:41,239 Speaker 1: the dollar as well. Uh, well, it's sports. We think 760 00:42:41,360 --> 00:42:45,080 Speaker 1: all of you listening to us worldwide across this country. 761 00:42:45,600 --> 00:42:48,240 Speaker 1: Another hour of Bloomberg surveillance. Good morning,