These are your markets with a little bit of uncertainty because of a drone attack in saudi arabia over the weekend. Trying to figure out the implications for the middle east and geopolitical tensions. This is what we are seeing in european stocks. Crude oil off the highs we saw the last couple of days where it surged from 17. Press conference from Boris Johnson yesterday, a little bit of weakness when it comes to pound. Watch out for the Supreme Court hearing. We are expecting it couple of days but it starts today on the thingsy of some of the parliament but also the government are trying to do with brexit. Economic nobelhe prize winner coming up at 11 a. M. London time. Lets get the first word news. Vivina in the u. K. Is where we begin. The Supreme Court starts hearing the case against Prime MinisterBoris Johnsons suspension of parliament. At the center of the debate is if the decision is a matter for the court. The court may not rule until next week. President trump says the u. S. Reached an initial trade agreement with japan but no mention if the white house will end to slap tariffs on japanese auto imports. Its announcing it principle agreement after last months g7 summit. Israel heading to the second election of the year. There is no definitive sign if Prime MinisterBenjamin Netanyahu will retain power. The election coming at an uncertain time for netanyahu. The veteran politician failed to form a coalition. In the u. S. , New York Times reporting a manhattan prosecutor has subpoenaed eight years of president Donald Trumps tax returns. Widens the ongoing effort to obtain the tax records that President Trump refuses to disclose. The times says representatives for the president are declining to comment. Bill gate still in Wealth Creation mode despite the concerns about the economy. Tosays it is still not time pile out of stocks. Defensivenot in some posture where we are mostly in cash or anything like that. Is to be over 60 in equities. Powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine thank you so much. Now Surging Oil Prices will probably reinforce of the resolve to cut Interest Rates this week as insurance against rising global risk on the u. S. Economy likely to be small. The fmoc is widely expect it to cut by a quarter uof a percentage point. Our global macro strategist at rbc capital markets. Thank you for coming on. We have this boig oil shock. They have kind of stabilized somewhat but could this be the thing that tips us over the edge . Peter im not quite certain about that. You have to assess clearly which regions are more vulnerable. The european economy is more vulnerable than the u. S. Or north americans are because we are essentially net importers of oil, so oil prices go up. Initially, that is very bad for us. Again, if you look at the broader picture, and i was just saying to your radio colleagues as well, i think the market has been priced for a relatively bad outcome to begin with. Relatively speaking for us in the market, it is probably not going to be as bad as we initially thought. Getting we are also the Energy Secretary of the United States speaking in vienna, saying the u. S. Is approaching the saudis on how to proceed. He saying he is confident that will market will remain well supplied. When talk about a bad outcome, are you talking about a recession . Peter a outcome that warranted 50 basis points 1 of rate cuts. Whether or not that is a recession or severe slowdown remains to be discussed. Francine but that is trade. If you add oil. Peter hang on a minute. It is trade in any impact that might follow. We are already seeing a backup. If we want to go back to markets, the question is whether even now that you get this potentially additional shock, whether that is sufficient to warrant what we priced in and i am not quite sure it is. Francine you dont think this will be enough to tip the world into a recession. Peter i dont think so. Francine unless there is something very ugly brewing in the middle east such as a war . Peter that is a different story because currently you have a disruption to the oil and Energy Markets. That is clearly worrying, but as long as it is isolated to that market in particular, that is one thing. Francine is it isolated . Peter if you have fullscale war that potentially engulfs the entire region, that is a different story. Francine these are the questions we are trying to ask ourselves. Saudi still a is reliable partner for energy . Peter weve taken out not we, the attacks took out roughly 50 of the production. Oil prices has gone up. What you see it initially gone up and then moderated. Not usual moves but the levels of iran are not entirely unusual. I think the markets in the world can cope with that. If you now on top of other problems take out an entire region potentially as an economic source, then through emerging markets, you might get over distortions. I dont think we are priced for that necessarily, but i think we priced quite a lot and a lot of other factors already and you have to balance them against each other. Francine we will delve more the scale of the attacks and because and took off 5 overall production. We always of the infrastructure of the saudis are safe. If it is no longer safe, does it change the oil dynamics and price dynamics and demand from emerging markets . Peter first of all, again, the question of whether or not it changes oil prices is a very clear yes. On of theselow implications are Going Forward for other industries, for other economies, for the broader world economy, that is a different question. Weve seen in the oil and Energy Market in particular various supply shocks could happen at any point in time. We have seen that in north african oil. We seeit it here as well. That is one of the reasons why it is particularly volatile. But at these price levels, i dont think it will have the ramifications, unless the situation boils over into something entirely different. It is not just an isolated shock. Francine thank you so much. Peter stays with us. Coming up, eyeing rapid recovery. How long it will take saudi arabia to restore productions. We will get the latest on that next. This is bloomberg. Francine economics, finance, politics this is bloomberg surveillance. Lets get to the Bloomberg Business flash. Weworksthe delay to initial Public Offering possibly to the end of the year. This announcement from the company itself. Softbank is the companys biggest investor and pushing for postponement. Of 47at a valuation billion. We have been told the company may go public at about 15 billion or less. The initial Public Offering of its asian unit. We have learned its at the market shares at 27 to 30 hong kong dollars apiece. Billion to raise 4. 8 which is around half of its original target. Inbev declining to officially comment. Black looking to make a bet on casinos. The company is in talks to buy and lease bellagio and mgm grand in las vegas. Mgm looking at deals to free up cash while still letting it manage the resort. We have not learned the potential terms of the deal. The companies declining to comment. That is your Bloomberg Business flash. Francine lets get back to the top story. All eyes focused on how quickly saudi arabia can restore production after the attack. Saudi arabia saudi aramco is not optimistic of a rapid recovery. The state Energy Supplier faces weeks or months before a majority is restored. Saudi arabia also says in an initial investigation shows weapons used in the attack were iranian. Or more, richard still with us, Peter Schaffrik. Thank you for sticking around. Richard, there are a million angles we could explore given what we saw the last 72 hours but how quickly will output from saudi aramco come back online and how quickly can we be sure it stays online . We are having a couple of technical difficulties so we will get back to richard and a second. We were speaking to one of his colleagues, the main question of how quickly they can come back online and whether they can actually defend it. If you are jay powell and look at this, and you were telling me clearly, it does not have much of an impact on the Market Expectations because Market Expectations were already diversion from a be what the fed wants to do. If they cut further, are these insurance cuts or are they late to the game . Peter as far as the fed is concerned, they are insurance cuts. When you look at the u. S. Economy more broadly, you see one part of the economy, the manufacturer sector is in dire straits. The big question is whether they will get spillover from one into the other. As far as we are concerned, we dont see that and that is what the fed is looking at as well. Then again, going back to the point i was making earlier, if you look at what the market is implying already, pretty steep cuts. If we assume there will be a 25 basis point rate cut tomorrow, the markets implying another 75 thereafter. The question is whether we can live up to that expectation. Francine does this spike in the oil price affect inflation or should Central Banks look through it . Peter it would most certainly it affect inflation. Core inflation is an entirely different story. It would affect headline inflation and it has affected the market but typically for these things, unless there is a protracted or demandside led increase in these prices, the Central Banks are inclined to look through it. I dont think this will play in the credentials. Francine thank you. Lets go back to richard. When i was trying to figure out exactly what the second day story for the hit on the oil market was, it is really when does saudi aramco get back and recover from this strike . Does that make a difference on how you see the supply demand equation . Richard the longer we have an outage either at this scale or a partial outage, there will be a big impact on supply and demand. We are still waiting on more details from saudi aramco on exactly what they hope to achieve. We hear 40 , 50 of output should be able to be brought back online quite quickly, maybe this week. If you take 50 of the lost output and bring it back online, youre still left with a huge disruption that might continue for some time longer. Getting a grip on how big that disruption is and the timeline and the pathway for bringing production back will be critical for the actual barrel counting fundamentals of this story. Francine richard, when do you think you will have a better handle on the situation . Richard i think the onus is on saudi aramco to give more clarity. We were initially expecting some kind of briefing or update yesterday. That didnt happen. It is likely we will get something today. They are evaluating the situation at the facility. We should get more details. I think that will really give a better understanding of the practicalities. I think the risk or uncertainty about future attacks, the geopolitics, that is a separate track that we are going to have to study in parallel with the practicalities of how much production can saudi arabia bring back and how quickly can it get production backup to the specifications the market expects . Francine once production is backup, can they defend the infrastructure . Richard i think this is part of the question. Saudi arabia has a very large defense budget. It has invested in large technology, including ground defenses from what you think a traditional terror attack. But also air defenses and sophisticated antimissile systems. None of that seems to have been successful in defending against what was a remarkably precise and successful attack. That does raise questions. We dont know exactly who carried this out. Theres a lot of uncertainty. I think one of the concerns the markets for saudi and others in the region, could there be further attacks of this type . The mostly not was not to sophisticated technology, yet it was incredibly disruptive to energy supply. Francine richard, what does it mean for the rest of the region . I know there were some theories that the strikes were deliberate because it was a week after john bolton resigned. That, i kindan, to of think this does not look like an attack that was planned in a couple of days on the back of an envelope. Probably been in preparation for some time. As far as the region, we are looking at a very heightened level of tension. We had incidents with tankers in the gulf in the last few months. We have had sanctions on iranian exports. A lot of long time longstanding geopolitical rivalry and situations that were already facing the market. Everyone is now watching the u. S. And saudi response. Do they go down the path of military escalation . I think President Trump is not keen on going down that route but if they dont do anything in response, what kind of message does that sent to groups that might want to disrupt, that might want to try to carry out similar acts in the future . Things are definitely even more tense across the middle east and they were before saturday. Francine thank you so much, richard, cofounder and Senior Analyst at energy aspects. Peter stays with us. Up next, has germany avoided a recession with the survey coming out later this morning . This is bloomberg. Francine this is bloomberg surveillance. A survey out at 10 will provide clues. Hopes of avoiding a recession with the Services Sector remaining resilient. Peter shasta is still with us. We have a lot of concern coming from the banks. You wonder what Christine Lagarde will do after mario draghi announced last week. And then you have in the middle also to do with the trade concerns. Do you worry about germany . Peter yes, but let me say one other thing first. Im not fond of the survey. Francine it is backward looking . Peter it is backward looking and more reflect sentiment in the financial industry rather than the real economy. Me a break, we just want to do talk to germany. Peter of course. The Biggest Issue with german in my mind is not necessarily the banks, although the banks are clearly a worrying point. The biggest trouble for germany is it is heavily exposed to manufacturing. Biggest exposure to manufacturing. As i was saying earlier talk about the fed, the manufacturing sectors across the develop worlds are in trouble. When you look at other parts of the european economy, france in particular is doing better. Why . Not much impact. The big question, you were alluding to it, whether there is any spillover from the Manufacturing Base . So far, we dont really see it. That gives me a little bit of hope. Francine do you think germany will do any fiscal planning . Peter yes. The question is how big it is. I think we are already seeing the right noises. Some laws have already put through under the fig leaf of doing Something Green but amounts to a small fiscal package so far. The question is whether they would go any bigger if things get worse. Francine Peter Schaffrik, thank you. He stays with us. Next, apple changes a 14 billion tax bill on the eu. And wework pushes back its ipo. We will have the latest on these tech stories. Im also looking at overall manufacturing sector. One of the things we will be looking out for in germany. We have a little bit of a brexit update with the pound weakening a touch. This is bloomberg. Francine no quick fix. Saudi aramco faces weeks or months without oil output. President trump says iran was behind the strikes but i looking at a military response. Oil spike and the fed with Surging Oil Prices could mean with the cut rates. The two meeting starts today. We work postpones its ipo after valuations plummet. Softbank pushes for a delay. Good morning. Good afternoon if you are watching from asia. Im Francine Lacqua in london. Checking in on the biggest stock movers. Annmarie we have to kick it off with a movement in serious minerals. It is down to 47 . At the open, it plunged more than 60 which comes as a company says they will not go ahead with their planned 500 million bond issuance. This is bad for business. They have to possibly scale back this project they have in the United Kingdom. Zalando down to 10 . One of the shareholders selling off 13 shares million shares. Sectorxx 600 energy is one of the biggest sector gainers this morning. We still see these energy gaining todayl after yesterdays recordbreaking price for oil. Francine thank you, annmarie. Lets get straight to the bloomberg first word news with viviana. Viviana weeks or months is the timeline saudi aramco is facing before a majority of its oil supply is restored. The Kingdoms Energy giant is growing less optimistic there can be a rapid recovery in production, following the weekend attack that knocked out half of saudi arabias will production. Roughly 5 of global output. Over to the u. K. , this or bring court starts hearing the case of ofis johnsons suspension parliament. The court may not rule until next week. Back in the u. S. , President Trump risking a political backlash if he retaliates against iran over this weeks saudi oil strike. The president saying he does not want a war but that the military is ready if necessary. The u. S. Says iran is behind the tax the attacks. Tehran denies any responsivity. Saudi arabias popularity is at a low after the war in yemen and the murder of journalist jamal khashoggi. On air and on tictoc on twitter. Im viviana. This is bloomberg. Francine bill gates is happy with higher taxes if it means more equal society. On tuesday, his foundation released an annual report which aims to hold many nations and account with reduction. One solution could be higher taxes on the wealthiest in society. The the worlds second richest man spoke to Erik Schatzker in seattle. Bill the government is spending more than it takes in, so it at some point, even in the current safety net and programs, somebodys going to pay more in taxes. I do think that should be done in a progressive fashion. Just taking the taxes alone is a big help, but you also want the impact of that Government Spending to really learn why are kids dropping out of college. Its not the case that affordability is the only problem in u. S. Higher education. Ir some cases, it is, but would not even put that at the top of the list. Wealth isthat so much concentrated in the hands of so few, some people say a wealth tax, not an income tax is the only way to properly tackle the inequality problem. Could you get behind a wealth tax . Bill i would not be against a wealth tax. Unless you get a lot of nations cooperating and deal with some of the problems like people leaving the country or how do you do these valuations that can get quite complicated, and if you have to do that every year. But, if society got behind a wealth tax, yes, you could raise money that way. Not many countries do it. Europe has less today than it had before partly because if you are a small country, the issue of people leaving, changing their residence is a big issue. In general, i am for way more financial transparency. I dont like the trusts where nobody knows who owns it. Talking about all this money that moves around. Did it pay taxes . Is that criminal money . We should have a lot more transparency. The u. S. Will do a wealth tax but i would not be against it. The closest thing we have to it is the estate tax. I have been a huge proponent that that should go back to the 55 that it was a few decades ago. Erik tax refugees are a real issue. What will you say to your fellow billionaires, and in some cases, millionaires who reject the idea of progressive taxation and relocating at the very least and the current regime to states where they dont have to pay as much tax . Bill the Biggest Issue about this would be if people actually are leaving the country altogether. There you could have Something Like an exit tax. Certainly for the u. S. Assets. Within the u. S. , there is a fair bit of zerosum competition both for individuals and businesses where somebody is going to place some jobs and gigantic money gets spent in them. I think a lot of that, the states should sit down and declare a truce in how money gets spent. We are never going to totally aligned income tax regime across the 50 states, but if they would move towards the middle in some way, that would be helpful. There are jurisdictions that are getting to a point where it theyy does become, that are not helping themselves by raising the rates. Erik talk about places like perhaps new jersey or connecticut . Dont keep track of whos got the very highest rate now. There are states whose Balance Sheet is very troublesome in terms of the liabilities they have. Its too bad we are not really facing up to those and saying what is the plan for new jersey or illinois over the next several decades to get out of the financial difficulty they are in . Puerto rico is the most extreme. Francine that was bill gates speaking exclusively to Erik Schatzker in seattle on how to tackle global inequality. Apple fights back while we work back down. The u. S. Tech giant and Coworking Company than the spotlight. Apple fighting the worlds biggest tax case, as it challenges the eu. The iphone maker, worth around 1 trillion, was hit with a 14 billion fine. Wework has signaled a delay to its ipo due its crash of the estimated valuation. Softbank, the biggest investor, pushed wework to put off the soft offering. For more, kris bryant who covers wework joins us from berlin. Maria is in luxembourg. What can we expect from the apple hearing today . Maria good morning. This is the worlds biggest tech case. It is a very striking case. It pits the European Commission against a member state, the Irish Government, which decided to cite apple. This goes back to the decision taken in 2016 in which the condition argued ireland violated rules and gave apple a special tax treatment which allow the company to lower taxes for many years. Apple was told to pay back 13 billion euros. What is fastening is the Irish Government did not want this. The irish are desperate to continue that very Good Relationship with american multinationals. They feel they have a case against the commission. They think some of the arguments put forward in the original ruling were flawed and they can win the case and appeal it. Apple tells you this is a lot driven by politics and they feel they pay the appropriate amount of tax. When you look at the European Commission, they think if they win the case and the arguments are vindicated, it would allow in commission to continue the drive to make American Multinational Companies pay more money in europe. Chris on lets goet to what is happening with wework. Are they ever going to ipo . Chris very good question. The plan right now is to delay this ipo until the end of the year. That gives wework a bit more time perhaps the rethink it strategy. The underwriters, how they will approach this ipo. Wework has made concessions already in terms of governance but did not think it can get the ipo awake at the appropriate evaluation. Whether they will be able to do so is a fair question because investors have been put off by the heavy losses and cash burn. Unless they can do more to get investors more comfortable with its Business Model, it might have the same problems at the end of this year. Francine thank you both for joining us. Maria tadeo and chris bryant in berlin. Coming up, President Trump says the u. S. And japan have reached an initial trade agreement, clearing the way. We talk paris next tariffs next. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua. Lets get to the Bloomberg Business flash in new york city. Viviana the New York Times reporting manhattans prosecutor has subpoenaed eight years of President Trumps tax returns. This is the District Attorney money given toh stormy daniels. It is the ongoing efforts to obtain tax records President Trump has refused to the close. Initial reviving the offering. It will market shares at 27 to 30 hong kong dollars apiece. Billion,to raise 4. 8 around half of its original target. Ab inbev declining to officially comment. Blackstone looks ready to make a bet on casinos. Bloomberg exclusively reports the company is in talks to buy and leaseback the bellagio and mgm grand in las vegas. Mgm looking at the deal to help free up cash to expand breed of we have not learned the potential expand. Notave nont learned the potential of the deal. Francine President Trump says the u. S. And japan average initial trade agreement which will be finalized in the coming weeks. The president told congress the government will have an agreement with tokyo on digital trade. Trump made no mention of the possible tariffs for japanese cars. The u. S. President is inspected to meet with shinzo abe in new york next week. Still with us is Peter Schaffrik. We spent so much time talking about u. S. China. Now u. S. And japan with signs of easing tensions. Is there read across from that to china . Peter i am not sure if there is, but there is certainly in my mind into the market behavior because what you have seen almost since the day we had the 14 day tariff delay with china, markets started to trade a little better. Bond markets were doing a little weaker. Inhink this is another piece the jigsaw that there might be a picture emerging where we start to deescalate rather than escalate. I think that is a very key piece for the market. Francine deescalation to appoint we get an agreement . Peter who knows at this stage . If i try to put the market thinking out there, whereas previously we were thinking it is going from bad to worse. Hard brexit deal. And all of these things coming together. It was really pressuring the market. Talking about the inverted yield curve. Now we are going into an environment where we are talking about maybe there is easing. People are saying trump has a huge incentive going into the elections and striking a deal. The hard brexit thing, the probabilities have declined but for markets, it is more of a positive narrative for developing at least in the near term. Francine is positive rhetoric enough for executives to start spending again . Peter not necessarily. You need to see concrete action here. The fact when you look at what most of the Central Banks are telling us, they think it is the uncertainty it is creating a good part of the backlog on investment. That is not going to go away. Whether or not we see a real turnaround in the fortunes of the economy, that is a completely different story. For asset prices in the here and now, it is. Francine what is the other thing you were looking for . If you look at Central Banks, are markets going to test if they still have the tools left to deal with the downturn . Peter in the here and now, i think what we have is we already expecting what i was alluding to at the beginning of your show. Again, after the presumed 25 basis point rate cut from the fed, another 75 basis points in the curve already. Whether that is ultimately what is required remains to be seen in an environment where things get better. I think in the here and now, the risk is we priced out more. Once we come to where the market is more balanced, i think the real underlying fundamentals come to the floor again and we try to have a real assessment about do we get an agreement . Will we get these investments . Francine does strong the Dollar Strengthened from here . Peter maybe not so much because one of the reasons why the Dollar Strengthened his we had all of these worrying stories. When you look at more fundamental story, it is relatively highyielding currency. It attracts investments. Francine thank you so much, Peter Schaffrik stays with us. Next, the u. K. s Supreme Court heres the challenge to Boris Johnsons suspension of parliament. The latest on brexit and what it means for the markets. This is bloomberg. Francine economics, finance, politics this is bloomberg surveillance. Boris Johnsons Brexit plan will be tested in court as 11 of the u. K. s most senior judges will rule on the suspension of parliament. At the heart of the debate is whether suspending parliament as a matter for the judiciary. The decision against the Prime Minister as it goes deeper into a constitutional crisis. Two sides are no closer to reaching a brexit deal. Still with us, Peter Schaffrik. I guess, we were talking during the break about the probability of a shock coming from brexit. The market is a little more optimistic, but theres not going to be a no deal. Could those probability shift quickly . Peter yes, certainly. I am not sure they could shift on the potential ruling here. I think the key story that i currently see that can shift markets pricing quite substantially is whether that secret plan that is being done by number 10 to avoid the law that has been put in place, whether that will have any legs. If theres a legal way to get around that, i think the market will jump onto that quickly. Currently, we only know that apparently something has been cooked up but we dont know what it is. Francine what is the probability of the u. K. Leaving the eu without a deal . Less than 20 , or still around 30 , 40 . Peter we also have to add by when. Francine october 31. Peter the probability is currently very low. It was around 45 not too long ago. It is currently less than 10 . We have priced out that probability. It means we have priced out the hard brexit at all. I probably think that in , probablyin 2020 underpriced at present. In the near term, it does not seem that likely. That really happened when this law was enforced. Francine you have a Prime Minister saying he will ignore the law and find it in the court. Peter that is what i was alluding to. We dont know that. We hear all this noise, but on the other hand saying they will abide by the law. There are all of these allegations there might be a secret plan. I think for the market, the question is how high is that probability . As long as it can stay low and as long as we are not convinced, i think the pricing as it is a little bit of recovery in sterling in the currency market, fx market, that will stay that way. As you rightly point out, it could turn at the drop of a hat. Francine given the u. K. Election are not decisive but who will command the majority, what will that mean if we had elections before december 31 . Peter i think it is slightly majority. Ards a tory very difficult to determine those. I think the initial response would probably be a slight weakening of sterling in the fx market. The market is primed for that. The probability of an election happening is very high, close to 80 . The question that is how are we going to react going into that . I think it will be similar of going into the actual brexit referendum that during the nights of the election, it could be extremely volatile according to the results as they trickle in. Francine what is your impression of the european markets . I feel like a lot of the concessions we have on brexit seem to be isolated in the u. K. Have the markets priced in the impacts to the european markets . Peter yes. Two examples, the euro is relatively weak against other currencies. When you look at the probability, you can see to some degree in the reflection of europe. Euro sterling is overshadowed by that. Another place you can see it is the relative weakness of Irish Government bonds. Ireland is one of the countries that has to be the most impacted. You can really see for instance, ireland against a country close to belgium in terms of spread movement, you can see how ireland underperforms when the probability of a hard brexit goes up. You can see it in the european markets, you have to look closer. Francine Peter Schaffrik, thank you so much. Bloomberg surveillance continues in the next hour. Tom keene will join us. We will speak to the Economics Nobel Prize winner at 11 a. M. London time. Looking at treasuries continuing higher. Investors trying to weigh the fallout from drone attacks on one of the biggest Oil Facilities in the world in saudi arabia and the record surging crude prices that followed. With that means for their portfolio and the outlook of the world economy. This is bloomberg. Francine no quick fix. Saudi aramco faces weeks or months without the bulk of their oil output. President trump is not looking at the military response. Surging crude prices could reinforce results to cut rates again. Valuations in the code working Company Wework plummet. Softbank pushes for a delay. Good morning. This is bloomberg surveillance. We have quite a bit going on. We are looking at brexit noise as the Supreme Court meets today to figure out if there is legality in the suspension of parliament. Saudi aramco telling customers that some of its october oil loadings will be delayed. Tom we are going to feature the intraday chart in a moment. It screams higher bids going on. On brent crude. Francine lets get straight to bloomberg first word news. President trump says the u. S. And japan reached an initial agreement on tariffs. The president promising congress there will be an executive agreement on trade. Tokyo must ensure the u. S. Will autompose new tariffs on imports. A top uaw negotiators saying a deal must resolve 10 key sticking points, among them wages for entrylevel workers in the treatment of temporary employers. Nearly 50,000 workers are on strike. In the u. K. Today, Prime MinisterBoris Johnsons lawyers will be defending his brexit policy. Scrutiny at the Supreme Court in london. The two sides are no closer to reaching a brexit agreement. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Tom Economic News widely anticipated from germany. Anything from europe is important. News coming in as a worse number. Inufacturing recession europe. We are into a fed meeting churn even with all the noise out of saudi arabia. Futures nothing like yesterday, but a little weight to the tape. Monitoring the bloomberg dollar index. Next screen showing the resilience of equities. Michael holland will join us in the next hour. We are thrilled. Then the oil complex. I want to emphasize how we are getting a set of higher bids on oil. Global. 17 is one of the us papers. Francine im looking at markets. U. S. Futures drifting, oil lower. Drone attacks in saudi arabia. As boris weakening johnson warriors prepared to defend his Brexit Strategy before the u. K. High court. The current statistic came in worse than expected on zew. The future statistics came in betterthanexpected. A little confusion. Let me go to the chart. There is only one chart that matters with aramco headlines. We still have a lot of mystery to what is going on in saudi arabia. Many of you are asking me where is yousef . Yousef is in saudi arabia. Thent to take a point of higher bids. I am not going to pick higher oil, but buttressed against 69 and oil. Francine this is the 2, 5, and 10 year breakevens. Oil, it couldin spell upward pressure on inflation. Thatll have plenty more on shortly. We are with Daniel Morris from bnp paribas. Us. K you for joining kit, let me bring you over to my chart. How much will this be skewed by what has been happening in the oil price of the last 72 hours . Not much. Inflation expectations went down less than nominal bond yields did in august and have bounced back prior. If we compared where we are, inflation has now moved as much overall from where it was. It probably tells you more about this whole matt cap bond market reality. Market rally. Francine do you agree with that . In the past recessions were sometimes spurred by sudden volatility in the price of oil. Is the u. S. Economy much less oil defendant, there are benefits to spikes in oil prices. If it is sustained, it could sport for spur further investment in the oil sector in the u. S. It will support inflation expectations, but we all expect this to fade. Tom three people yesterday asked me the same question, where do i find the courage to stay invested in equities given the noise observed in kit juck es foreign reserve world . What are the alternatives . Even with the jump in treasury yields, you are subject to 2 ont on sub treasuries. You are on trend in the u. S. U. S. ,y nine inflation benign inflation. Tom we enjoy a certain level of grizzledness. Screw up. Lways certainty . E hedge some people making a big deal about higher yields. That scares hedge you given instability . Definitely there is less financial liquidity in money markets. The last thing we need is to tighten things up. We are seeing illiquid moves across markets. Im not sure markets are in their most smooth operating mode. Maybe euro dollar is. I think the lack of smooth miss smoothness comes in parts. Start realizing there are bits of the Global Economy that are not simple to see the effect. We have not seen drone attacks on Oil Installations before. I am looking to see moves on dollaryuan. Territory in unknown to know where we are going next. There are a lot of moving parts. Tom a lot of moving parts and moving news stories. Coverage coming up tomorrow. Much more coming up, including that meeting. Chairman Powells Press Conference will be extraordinary. 2 00 p. M. , scarlet fu leading our coverage. This is bloomberg. Tom bloomberg surveillance we welcome all of you this morning. A real terrific news flow. We hope to brief you on the geopolitics in the markets of the moment. Joining us now is yousef, joining us in the middle east in dubai. It is 1100 miles almost due north from riyadh to tehran. It presumed by the middle east press that saudi arabia will make some attack on iran across the persian gulf . That is what it is shaping up to be. The conversations i have had over the last few months have been clearly against any further escalations. Soul ofthe heart and ofergy kingdom of the the Energy Industry of the kingdom. They said they would defend the kingdom adverting investigators bring investigators in from the United Nations and find out who should be held accountable. Tom before we move on to aramco, do you expect any announcements today . Iyadh. E in r is there a timeline on your tuesday afternoon . We are waiting for a potential press conference from the energy ministry. There could be a tour of some of the damaged infrastructure. I was speaking earlier to one of in the Business Leaders kingdom. This latest escalation meant everybody had a stake from around the world to resolve this. Heres what he had to say. Normal,el very absolutely normal. We are not seeing anything which is different in terms of consumer sentiment, daily sales. This man is the pulse of local consumer confidence. For him it is business as usual. Help experience should navigate these tumultuous seas. Francine the main question is whether they can defend their infrastructure Going Forward. How soon will we have an answer to that . The investigations will have to pass first. Saudi arabia has always prided itself on its defense capabilities. The local media as focused on what it is able to do as an economic power and more importantly as a Political Force in the middle east. That is being put into question, which is why it the pressure is higher on the Saudi Crown Prince and the government to come up with some response in coordination with the u. S. Francine thank you. We are back with Daniel Morris juckes ofibas and kit Societe Generale. Do we need to cool off a little bit and say this is a big attack that took off 5 of world supplies . But saudi arabias infrastructure is still reliable. How does this affect negotiations between the u. S. Europe andd th iran . If you had all of the iranian crude come back on the market, that would have a big impact on oil prices. Francine how does it change in your models . There is going to be a geopolitical risk premium in oil until we work out whether jonah tax are easy to deal with drone attacks are big. If that is being used on the be, we scale or could will factor in something that will last longer than a few days. Iran sply backdrop is itting there and producing more oil. Everybody was focusing on lowering their demand forecast until friday. You mentioned the illiquidity in the money market. This comes from socalled dollar shortage. Do you buy that idea . Is it highly idiosyncratic and something i dont have to worry about . I think we have to worry in the short term. Once there is a perceived sense of dollar shortage, people will not lend spare liquidity around as freely to people who need it at month end. 2008 was not that long ago, and there were major Financial Institutions that thought the supply of shortterm dollars was infinite and were brutally the wakened on that a that point. Central bank still need to see much of this problem to make sure we dont have a problem. At the end of the day it is hard endlessve there is financial liquidity in a system of money. Supplies this is what was at the center of what made the financial crisis so bad. A lot of it was idiosyncratic. Francine thank you both. Dan morris and kit juckes both stay with us. We will have plenty more, including more on saudi arabia. The supreme about court to start deciding the legality of parliaments per occasion. This is bloomberg. S bloomberg. You are watching bloomberg surveillance. Lets get to Bloomberg Business flash. Sell or spin off several of his businesses. Sony plans to hold onto semiconductor and financial services. Companysenhance the value. Wework is putting off its troubled ipo. It says to complete the share listing by the end of the year. Its valuations have raised concerns. In january, softbank invested in the company at a valuation of 7 billion now it is expected that wework would be listed at less than a third of that. I want to bring up a chart. This goes to all of the we have seen. Ks we have shown as many times. Year. Be chart of the the corrections in yellow. Bear market in red. Dan morris steps in the continuous in may and august. Momentum value. Small cap, largecap. The idea of staying with those 30 big names. What does bnp paribas suggest . We are overweight u. S. Equities versus europe and overweight developed market versus emerging. You have reasonably good combination of earnings momentum in certain sectors, supportive monetary policy, and at trend growth. Compared to most other parts of the world, that is not bad at all. We still like u. S. Equities in certain sectors within it. Tom is there enough ammo for share buybacks . If you look at the earnings revision trend, a lot of the gains you have had have not been particularly strong. A lot of it has come from a reduction in share count. You dont have the underlying earnings momentum you would like to see. That explains why you have had anemic returns for Global Equities and u. S. Equities. Tom lets continue. Much to talk about. We are monitoring the headlines rightousef out of riyadh now. We have some good guests for you to drive the conversation forward. Yousef again from riyadh. Stay with us. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Francine this is blood vessel surveillance. This is the Supreme Court in central london, close to westminster. For those of you on radio, good morning to you. Were just trying to follow the developments. I think its about two to throw days of hearings, and then in a couple of days, well probably have what they come up with as an answer to whether it was legal or not to suspend arliament. After he didnt show up, the Prime Minister of the u. K. , to he joint press conference, the hearing today begins now pretty much, and three days the court has not actually given a ruling date yet. Tom we will see. Its very different than in the United States, i will say that. This is a spinoff from the house of lords of the judicial function over on Parliament Square at the gild hall. Right now, heres our first news. Wall street may get a 40 billion reprieve from u. S. Regulators. Bloomberg has learned they may get rid of a rule that forces banks to set aside billions of dollars for a trade. The rule was imposed after the Global Financial crisis. Banks argue the requirement is redundant and puts them at a competitive disadvantage. Iran vowing not to negotiate with the u. S. On any level. The countrys Supreme Leader saying talks with the u. S. Would amount to victory for president Donald Trumps socalled maximum pressure policy. President trump hasnt ruled out a meeting with irans president. This month the two will be in new york for the u. N. General assembly. And today in israel, voters are deciding to keep Prime MinisterBenjamin Netanyahu in office or not. After aprils election, he failed to form a coalition. Polls suggest his likud party is in a tight race, but it will take more than a single party to rule, so the real race will be over who can line up the most seats in parliament. Bill gates disagreeing with politicians who say the biggest u. S. Tech company should be broken up. The microsoft cofounder speaking with bloomberg. Splitting a company, i mean having two people doing the bad thing, you know, that doesnt seem like a solution. To its a pretty narrow set of things that i think break up is the right answer to. You know, these companies are very big, very important companies. The fact that governments are thinking about these things, thats not a surprise. In the late 1990s, gates battled the u. S. Justice department. Global news 24 hours a day, on air and on twitter, powered by more than 270 journalists and analyst in more than 20 countries. This is bloomberg. Francine thank you so much. Boris Johnsons Brexit plan will be tested in court today. 11 of the u. K. s most senior judges will rule on his suspension of parliament. Theyll reconcile different rulings from lower courts in england and scotland. At the heart of the debate is whether suspending parliament is a matter for the judiciary. We go live outside the Supreme Court in westminster. We know the last three days, we dont know exactly when well have the ruling. As soon as we do, does parliament sit back if its against the government . Thats not clear yet. It depends exactly what is that n that ruling. We saw last time in scotland, there was no interim order to allow them to do that. Theres a lack of Legal Certainty at this point. But the magnitude of this cannot be understated. Its more than brexit. This is about the u. K. Constitution and the state its in. It is, some would say, buckling because theres no one written source for it. A lot of it relies on convention. Just the goodwill of people adhering to it. Were not seeing it happen. Theres so much to consider here. Its going to be in the hands of 11 judges in the building behind me. Francine this comes after a pretty chaotic trip to luxembourg for the Prime Minister of the u. K. How much do we know about his strategy from there . Does he continue going round to try to get support for a better plan, or do they actually sit down to try to draft an alternative to the backstop . Well, the official line is that were still looking to get a deal. This is what we hear from the spokesperson, but if you saw what happened yesterday, there was no Real Progress made. We saw Boris Johnson sat down with the head of the e. U. , and we didnt get anywhere, and we had the embarrassing press conference that never really was with the luxembourg Prime Minister. We hear this is more leading toward nodeal planning than toward getting a deal. Of course the Prime Ministers interest is to keep the confidence high, keep the optimism there, and see whether we can come to some sort of agreement. They point to a lack of political will on the european side, but its not clear whether there is that will on either side, really, although the e. U. Have said in the past, youve heard from many players, theyre trying to play hard ball for a Nodeal Brexit. It doesnt seem in anybodys interest. Ive got a headline from the United KingdomSupreme Court, which dove tails perfectly with my next question. The Supreme Court says not concerned with political issues. As in the United States, is there a perceived leftright to this United KingdomSupreme Court . Is there a labourtory split, or even a libdem split . Its less about politics and more about the separation of powers. Whether the politics and the legal side of that can intersandact how they do interact. This is the central issue in this argument. Its where we sought scottish and english courts differing. In scotland, they said the purpose was to stymie parliament. In england, they didnt get that far. They said this isnt for the courts to decide. That is a conflict that the 11 judges have to discuss. It will be fascinating to see what they come out with and how it will shape the future of this country and the future of the way we look at the constitution. Tom thank you so much at the Supreme Court across from parliament in london. Daniel morris of b. N. P. Paribas , and kit, it goes on and on and on. Is this debate dampened, or can i dare say is this endless debate boosted u. K. G. D. P. . It has dampened g. D. P. Its moved some bids forward. At the end of march, people were bringing forward some investment, forward some hiring for the rainy day that was going to follow. Then we had a poor Second Quarter for g. D. P. T. Looks like we might get a bounce into the end of october for the same reason. It messes with the timing, but this is, in economic terms, exactly the same as throwing sand into the gas tank of your sandar seeing what happens. Tom maybe its sand into the multinationals as well. Daniel morris, are u. K. Multinationals because of brexit, are they becoming ever more multinational and escaping the turmoil . Its probably the saving guys, if you take the ftse 100, theyre already multinational, and also not only that their revenues come but a lot of production comes from abroad. Thats why you havent seen such terrible performance when youve had hard brexit risk rise and sterling fall is because investors realize not only will they get the benefit from higher sterling revenues because of the currency depression, the fact that a lot of the production in sales occur outside of the u. K. , theres not as much of a threat from, say, the imposition of tariffs or delays at the border as you might assume. Francine overall, i dont know what exactly is priced in the markets, but it feels like theyre a bit cooler about the risk of a Nodeal Brexit than they were a couple of weeks ago. Is that warranted . Id say in the short term, yes. If we think of how things look like you said a couple of weeks ago when sterling was close to stow, and now how little we bounced back sirnings i think thats the dynamic that drives sterling for now, and we are, from that point of view, supportive. We think sterling should strengthen from here for a while. But at some point i think that the focus is going to shift from the risk of a hard brexit on october 31 to the election, which i think we all agree is going to come sooner rather than later. And then all the uncertainty around that, you would imagine would have a negative impact on sterling. A lot comes down to the timing. Francine you agree, kit . Yeah. You said within the context in the short term, i think sterling has bounced back. Half of the fall it saw against the euro from may to august, i think were done. Im threatening to get some euros for any next holiday next year just in case. Francine were going make you millennial yet. Tom do you see how hes always when hes on set with us, hes always working towards the ext holiday . This is true of kit. Weve seen this. Francine unamerican. Tom definitely. You got that right, unamerican. Francine kit and daniel, both stay with us. Ming up, we wait after evaluations of the company plummet. Its biggest investment pushes for a delay. This is bloomberg. Youre watching surveillance. Lets get the business flash. The planned i. P. O. Is back on, but scaled back. Bloomberg has learned the beer maker is set to raise up to about 4. 9 billion, roughly half the earlier target. The unit known as Budweiser Brewing is expected to price the shares next week. Billionaire bill gates says subsidies for wind and solar energy should go to something new. The microsoft cofounder speaking with bloomberg. Some of that has helped drive debt volume, which drives the curve and the prices come down. Now theyre not going to come down much more, so the tax benefits there should be shifted into things that are more limiting, like energy storage, off shore wind, which still has a huge premium price. Lots of places that we need the market to get going. Gates says the progress in solar and wind is helpful, but the sun doesnt shine 24 hours a day. And thats your Bloomberg Business flash. Francine, tom . Tom viviana, thank you very much. We get an update on weworks. Kris bryant is our we reporter with blood vessel opinion and joins us from berlin today. What did softbank do . Did softbank, as a majority owner, the most at risk, did softbank tell we company what o do and the troops at wework . Well, it seems that somebodys been given mr. Newman some advice. It did appear a few days ago that wework was determined to go ahead with this i. P. O. , come what may, despite the fact that its original evaluation hopes had been sorely disappointed. Now we hear that this i. P. O. Is not going to happen this week or next. Instead, sometime before the end of the year. Thats to be welcome, i suppose, because it will give everyone in kernings in particular the underwriters, the board, a chance to pause and reflect and think how are we going to get this i. P. O. Over the line . Of course, when wework does come back to market, it will have to undergo the same rigorous examination again it had by investors. Had already offered them governance, but the Business Model remains challenging. Tom exactly. I dont see how the numbers change and i dont know how you move the margins. The solution to this is fewer shares, lower share price. Do we know tip points for softbank . Is there a number in terms of total evaluation where softbank goes this is not good . Certainly for softbank, investors have 7 billion in valuation, they will have to consider at what point writedowns will be necessary on some of those numbers. Now, clearly it will hope to come back to market at a rough valuation, and some of the numbers we talked about this week, but unfortunately, the Business Plan as laid out in the prospectus suggest losses are going to continue, and therefore, investors are going to really question whether, if theyre putting money into this company, at what point in the future are they going to get the money back . At the moment the answer seems to be quite one in the future. My recommendation would be for the board and for mr. Newman to really consider how can we lay out the profitability that investors can get comfortable with . Francine at the moment, were talking about delaying this longawaited i. P. O. Does it even ever get i. P. O. ed . Well, in some respects, it needs to, because, of course, softbank and wework had expected that the i. P. O. Would deliver, first of all, 3 billion or so in equity, but that equity is also linked to about 6 billion of debt funding. So if the i. P. O. Doesnt happen, there needs to be a rethink about where the money is going to come from, because wework needs the cash because of its ongoing cash burn, because of all the 47 billion or so lease obligations it signed up to. It needs to have money coming in. Right now the money isnt going to come from organic cash flow generation. Somebody has to provide it. Is that softbank . Is it equity Market Investors . We dont know. Right now the plan seems to be i. P. O. By the end of the year, but watch this space. Francine chris, thank you so much. Chris bryant of bloomberg opinion. Lets get back to dan and kit. When you look at the postponement of this i. P. O. , does it make a difference to the space, or is it a problem very specific to wework . I think it highlights an issue for tech as a whole right now. Still, i think tech is where its at, but whats changed with the trade war is the parts of technology where youre going to see the growth, where youre to see excessive valuations as well. I think its ball Software Services and innovation and disruption weve been looking for, i think that remains the opportunity, in contrast to the issues we have in hardware sectors. Francine do you make a difference . I know you have in the past between some of the asian suppliers and some of the u. S. Technology just because of the trade war . Exactly. I think thats really what were working on, trying to find the companies that are going to benefit from the restrictions on trade. Its a bad thing, but someones going to benefit and you got to find those guys. Tom very good, dan and kit. I need to tell you about something that will be very, very smart. Lisa is driving forward a new program for bloomberg. And this goes over to the increasing importance of private equity and the derivative sides of global wall street. Really cant say enough about this effort. Shes got an entire entourage helping her with this. Money undercover, 1 00 p. M. This afternoon. Some of that has helped drive that volume, which drives the learning curve and the prices come down. Now theyre kind of theyre not going to come down much more, so the tax benefits there should be shifted into things that are more limiting, like energy storage, off shore wind, which still has a huge premium price, lots of places that we eed the market to get going. The temperature of the average global temperature is going to next 50 ot, and in the years, it wont go down. Now, deciding how much it goes up does, it go up by two degrees or three degrees or four degrees, thats in our hands. Francine that was bill and Melinda Gates foundation cochair and, of course, microsoft cofounder, speaking with bloombergs Eric Schatzker at the foundations headquarters in seattle. Meanwhile, President Trump says the u. S. And japan have reached an initial trade agreement which will be finalized in the coming weeks. The president also told congress that the government will be entering an executive agreement with tokyo on digital trade. Trump made no mention about the fate of the threatened fate of japanese cars. The u. S. President is set to meet the Prime Minister in new york next week. Daniel morris from b. N. P. Paribas asset management, and kit jukes from Societe Generale are both still with us. The u. S. Being a little bit more friendly with japan, can you inner from that that President Trump also wants to make a deal with china . I would hope so. Ts all going to come down to. The tariffs are an means to ained, and the end should be greater Market Access for american companies, lower toombs u. S. Goods and so on. This is actually worth something. So far, if we looked at the deals with mexico, with south korea, its quite small. But perhaps japan will be a template that suggests this can work, that the negotiating strategy does pay off, in which case youd be a bit more optimistic around china and europe, but were probably not quite there yet. Francine ok. Are you more optimistic . Japan is good for japan. In terms of where the u. S. Trade deficit comes from, chinas just the 500pound gorilla in that deal, and its much, much, much harder to solve, because were opening up Chinese Markets and u. S. Ago couple i cant tell products and so on. Getting the mass to work to make the trade deficit with china really shrink is really hard from where we are now in terms of evidence on the table. So im sure he wants a deal, but whether the deal that he wants is easy to find, no. Tom i havent dragged this chart out in a while, folks. This was the hope and prayer of the bank of the japan. Three years ago, the hope was to drive yen weaker. T didnt happen. It came down to an incredible the tied trading range. Which way will we break out of this trading range with huge ffect on Global Markets . I think the yen is going to break stronger in due course. It had a look at it at the bottom of the range recently, but i think its inevitable as we go through this process of falling bond deals and coming towards the next Global Economic slowdown that well see a stronger yen, to my mind, at some point. The japanese have still continued to resibling the worlds biggest Net International investment position into falling yields elsewhere, and its a growing difficult hedging some of that assets abroad, and i think that can only break one way. It can last for a long time before it breaks, thats whats frustrating me. Im sure thats the direction. Tom lets go back to the charts just to complete the circle here with mr. Jukes, the idea of the yen stronger would be Something Like this. Within that, kit, is the basic phrase, we import deflation. Does japan import deflation, or does japan export deflation . Jeag trying to have a weak currency is trying to import it into japan, but it exports deflation to everybody else in the process. Thats the way around that lay. They get to lose out on that. The bigger challenge for everybody is to the rest of us, aving an ever stronger chinese yuan for the last few years was something that helped us all out. Thats just bigger. Tom very good. Kit juckes, thank you so much. Dan morris, thank you so much as well, b. N. P. Paribas and Societe Generale. We got much more coming up. Michael holland scheduled to be with us here. Well speak to mr. Holland about the quality of blue chips , that odd thing, scomby hold. And then we are thrilled to bring you in this time of tumult in the nation, robert chiller and the joy of his thoughtful new book, narrative economics. Got a little bit in there on Michael Hollands stock market. Please stay with us. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Thoip morning, all the way to the response of the kingdom of saudi arabia to attack on their oig fields, President Trump seeks advice from his pentagon. Our reporter is in riyadh, Kevin Cirilli in washington. A press conference is upon us this morning. Markets churn. And this neverending bull market in this hour, Michael Holland darkens the door. Good morning, everyone. This is sursur. Were live from our World Headquarters in new york. Im tom keene in london, Francine Lacqua. The Supreme Court meets in ndon to make Supreme London to make supreme decisions. Its so different than in the United States. Whats the game plan there . Whats the schedule of the next three days . Francine well, we know that the hearing will last three days, tom. We dont really have a date where well have the deliberation. They start about half an hour ago. Well be following very closely. But whats unclear, tom, is because here in the u. K. You dont really have a constitution, but a set of texts and precedents, i actually studied constitutional law at university, and it was very different also from anything that you see in other european countries. Its also unclear if they were to rule against the Prime Minister, whether parliament had to reopen straight away. So for the moment, i think a lot more a lot less clarity than one would have hoped for at this stage. Tom very good. We will continue. Much to talk about. We need a news briefing. Here is our viviana hurtado. We begin with the impact of the attack on the Saudi Oil Plant t. May be worse than we originally thought. It may be months before the output is destroyed. It knocked out half of the production, roughly 5 of the worlds supply. Bloomberg has learned aramco has said they will be delayed. President trump says the u. S. And japan reached an initial agreement on tariffs. The president also telling the u. S. Congress there will be what he calls an executive agreement on digital trade, but tokyo warns any deal must include assurances the u. S. Wont impose new tariffs on 50 billion of japanese auto exports. And speaking of autos, here in the United States, General Motors and striking united autoworkers remain far apart in their talks to resolve a strike. A top u. A. W. Negotiator saying a deal must resolve sticking points. Among them, wages for entrylevel workers and the treatment of temporary employees. Nearly 50,000 g. M. Workers are on strike. Its estimated the walkout is costing the automaker 50 million a day. Global news 24 hours a day, on air and on twitter, powered by more than 2700 journal sandizz analyst in more than 12 countries. This is bloomberg. Tom thanks so much. Lets do a data check. We want to get to professor shiller here, a lot to talk about on the American Social economy. Futures at negative four. Dollar stronger over the last number of day, off of saudi arabia. The next screen, both oils. West texas, brent crude with a dash to 69. We didnt get to 70 a barrel. We pulled back in the last hour. As well. N, 108 francine european stocks are drifting. Again, investors weighing the fallout from the drone attack on the oil facility in saudi arabia, and what it means for the price of crude Going Forward. Treasuries up with the dollar. Im also looking at pound weakness, as the Prime Minister and his lawyers are preparing to defend his Brexit Strategy before the u. K. s highest court, and that started about half an hour ago, and were keeping a very close eye on where that ends up, tom. Tom i know francine has some other work there as well. On the bloomberg, flatness of oil here, the recent trading range as well. We go up off the weekend in saudi arabia, a pullback, and this is yesterday afternoons dramatic move to break out to a higher price. We rolled over in the last one hour as well. We wait for different announcement. Well talk to yousef in a moment from riyadh. Francine . Francine im looking at break evens, because as we move the oil story forward, its important to think about what that means possibly for the fed as it begins its twoday meeting today. U. S. Break even rates, the measure of inflation to be over the life of the securities actually rose to the highest since july, and with the jolt in oil, it could actually spell a little bit more upward pressure. Tom this is a celebration to have Robert Shiller with us. We can talk on any number of exuberant toings. Its also more important when a xtends out a wonderful new book. This is a long look at our narrative economics. You pick it up, youre like, yeah, yeah, yeah, do i really want to read this . And it is huging entertaining about the sandope scale of the moment. I want to go to what viviana said, were reliving the 1960s. We have a union strike in america, and one of our narrative economics was the power of unions throughout your work coming out of it through the 1960s, through the 1970s, and then the atomization of american labor. Your thoughts on a good, old union strike in detroit. Robert yeah, bringing back memories for older people like us. Young people have never heard of this. Its a big strike. Toipts a big strike, 40,000some people. What do you make of a narrative that the union is trying to make a new narrative . Its just not the same. Robert yeah, i think our society is polarized along different lines. Back then it was union versus nonunion. People who were nonunion felt that they were being left behind, and they were in an antagonistic situation. Anger intensifies narratives. The people were angry, going back a half century about inflation, which was out of control, and labor unions that were seen as the source of inflation. It was called the wage price spiral. That was a narrative on everybodys mind. Its almost forgotten now, but hey have a way of coming back. Francine professor, when you look at the fact that societies are almost broken, that there is polarization, what needs to happen for the world and society to be less polarizing . Robert i dont reach a conclusion of how we can make that come about. Nfortunately, its a worldwide phenomenon. I think we have to follow our normal democratic instinct. We have to be receptive of ideas that are different from ours, and we have to be kindhearted in our judgment of other people. These are the american and other democracies ways of handling these polarizations as they come about, but its not an easy thing to solve. Francine yeah, it certainly isnt. Another thing thats not easy to solve is actually figuring out when the next recession is. You believe the more i guess we talk about recession, the more i dont know whether its selffulfilling, but the more it affects our individual decision making, and so the more were closer to a recession. Robert this is the idea of the selffulfilling prophecy, a term coined in the 1940s, right after the dwregs. After the depression. What scares me, theres so much talk about recession right now. If you look at google trends, which allows you to look at what people are searching on the internet on google, you see theres a huge spike in recession queries. In fact, its almost as big as in 2007. Tom your book is on the zeitgeist. You dont hold back here on the president. You mention any number of times his guilded age and the idea of the visible wealth, ostentasheseness that we see out of this era and out of this president , and thats a narrative. How does it feed on, given our inequalities in this nation . Robert well, there is a source of polarization right there. I think the president s narrative has had immense power. In fact, you must agree, the extent to which talk is turned around is amazing. Tom is there a permanence to it . This is critical. Is there a permanence with what you see with President Trumps discourse or demeanor, or is it a oneoff . Robert i dont think that President Trump is the inven tower of these new area activities. Hes someone who is very conscious of the emerging rends in our thinking. He is our first motivational speaker president. Tom oh, i like that, very good. Were going to move forward with a discussion on the market with mr. Holland. I really cant say enough about this. Picked it up, its a dark and gloomy cover. What was Princeton University press thinking . Look at that, its gorgeous, narrative economics, cant say enough about it. Its really a broad sweep as we move to the election of 2020 on american and global society. Tomorrow, there will be a fed meeting. The only reason Michael Holland showed up is to get briefed on the fed meeting. Chairman powell will speak. Michael mckee scheduled to be at that press conference. Scarlet fu leading our coverage, 2 00 p. M. From london, from new york, this is bloomberg. Tom bloomberg surveillance, coming up, team coverage, kevin is in washington, Francine Lacqua bringing you bloomberg surveillance this morning with a lot of moving parts in saudi arabia. In a real lack of knowledge in saudi arabia, this is a joy. This is what surveillance is all about. Robert shiller with us, and the laureate from a small school on the shores of the Charles River is with us, Michael Holland of holland company. Why this is so important, professor, theres no one i know in the decades of doing this thats tried to be as rational about Investment Decisions as Michael Holland. Weve got a rational exuberance here. How are you rational in this market . How do you take the shiller thesis and still invest with confidence, Michael Holland . I always invest with trepidation rather than confidence, because i learned over the years which mistakes im prone to making. One that im looking at right now is the craziness in the markets caused by the Central Banks around the world. It makes pricing risk pretty anomalous at this point. And in fact, reminds me of the 1970s. You werent around them. Neither was professor shiller. In fact, we have another saudi enterprise. We have crazy pricing in the markets. We had the nifty fifty back then. Crazy things happen. We had a bad period for about 10 years that came after irrational exuberance occurred. Tom dont fight the fed. How do you fight this fed . He teaches this, an economics professor. Is there a theory to the fed that youre fighting right now or not fighting . No, theres no theory, tom. When you have negative Interest Rates, ive been in the business for a long time. I cant wrap my mind around whats going on. Tom Robert Shiller, what do you do with negative Interest Rates . I used to teach for years and years that it cant happen. In fact in fact its an embarrassment to our profession, and its happening uniformly for a long time. Makes no sense. Tom lets get francine in here. Francine mike, if you look at the probability of downward movement of the Global Economy, does the shock in the oil price actually accelerate that towards something uglier in the world economy, or can the saudis and opec stabilize it . In a word, yes, it can exacerbate it, francine, to the downside. Thats what happened in the 1970s. Its ironic that we have a little bit history doesnt repeat itself, as they say, and it does rhyme. In fact, at this point it looks like were getting a little bit of rhyming going on. I think the consumer, whos been the bulwark of this economy in the last several quarters, may be facing some steeper prices in a number of things. Well see if it happens. Francine some of the questions were asking, is the saudi infrastructure now safe, or is it more at risk . Will it take weeks or months for this output to go back online . Depending on the legs of this, is that what will tip over the world economy, or again, can we find other sources . Nobody knows the answer to those questions, including the houthi rebels. At this point, i think its worth saying that is a zibblingt possibility that things are going to be not as good in the future as theyve been in the past, that there may be more of these kind of things because they have been successful. If that continues, then were going to have more challenges. Tom professor shiller, the theory is you take where the Interest Rate is, flip the reciprocal, and that comes up with some kind of price to whatever valuation. How do you flip the reciprocal giving u. S. Rates or jp morgans model that we could see the 10year yield come down near zero percent, or the negative rates we observe in europe as well . How do you flip the reciprocal so he can survive . Yeah, im glad im not a rational economist to guide us through this confusing new world we live in. But it is driven by narrative. Thats the subject of my book. Im not talking about professional narrative. Im talking about everyone narrative. Tom you go back to the great crash, and the narrative of the depression that we all grew up with, from our parents as well. Whats the narrative right now, professor, were making for our children and grandchildren . Well, there are many area tives going on simultaneously. We have some rather new ones. Were more focused on education and promoting our children than we used to be, and so we have a new student debt crisis thats coming up. Tom thats because of the tuition at yale. Harvard is cheaper than yale. Really . Tom well, i dont know. Well see. Robert shiller with us, the laureate from yale university, and Michael Holland. Lord holland is with us. Were thrilled. It will also be november 16 at harvardyale hock any new haven. Today on bloombergs new show, new show, lisa is motivated to start strong with howard marks of oak tree. Its in the 1 00 p. M. Hour. That will be an important and specific conversation. This is bloomberg. Viviana lets get the Bloomberg Business flash. Wework putting off its troubled i. P. O. The Office Rental startup saying it now expects to complete the list by the end of the year. Valuation and Business Prospects have raised concerns. In january softbank invested in the company at a valuation of 47 billion. Now its expected wework would be valued at less than a third of that. Sfb once again defending libra, he cryptocurrency had plans to roll out. Regulators all over the world have pushed back against facebooks plans. One argument, the company should not be trusted to handle sensitive financial information. And thats your Bloomberg Business flash. Tom, francine . Francine thank you so much. Im getting breaking news out of saudi arabia saying that theyre prepared to inject liquidity if needed. For more on the price of oil, for more on drone attacks over the weekend that wiped out 5 of global oil production, lets get to yousef, our bloomberg daybreak middle east anchor in saudi arabia. First of all, when you look at the impact it had, how difficult is it to actually measure the impact, and how fast can they get that roduction back online . Francine, thats the key question as we await more details until coming hours. The timeline is such that we are looking ahead to a press conference potentially in the western part of saudi arabia. We could get more information on the extent of the damage. And then a tour of the damaged infrastructure. Thats not confirmed just yet. In any case, it is going take longer than expected. The oil market caught off guard, balls the initial guidance from saudi aram coast, were they going to recover quite a bit of this, and now its looking like its going to be a struggle. Francine yousef, weve also been briefed, or we understand that saudi aramco notified at least four customers that some of the crude deliveries due in october wont be able to be met. O can step in many ways, saudis can themselves snep by leaning on their own stockpiles. They can try to make the process more efficient. This is a bit of a learning curve. Again, theres not a lot of precedent for this kind of event, especially with that kind of scale. Even for a company of the scale of the behemoth like saudi aramco, they have to go on and discover what they can do and how quickly they can achieve it. Within the network that they have around the world of oil barrels. That is still going to be a bit of a touch and go, see how they can navigate all that, francine. Tom yousef, what is the dialogue between the United Arab Emirates and saudi arabia right now . Is there a separateness or secreteness to saudi arabia now, or is everybody discussing this collegially . Its been a little bit tough in the last few weeks between saudi arabia and United Arab Emirates. They have not seen eye to eye entirely on what is unfolding in yemen. And we understand that that has driven a bit of a wedge in what was seen as a very close and a very longstanding friendship that has been the backbone of stability in the gulf. That is now being tested, but not to an extent where we would see an open division between the two. I just want to briefly mention as well whats happening with those comments from the saudi central bank. Interesting to see theyre moving quickly to quash any potential speculation. G. D. P. For additional perspective, because we did see a pop in terms of bets against the saudi 12 months in from now. The Central Bank Governor saying you know what bring it on, were willing to inject as much liquidity as needed. Tom yousef, thank you so much. Well go to Kevin Cirilli in washington here in a bit. Let me do a data check right now to move the discussion forward here. This is a prefed cat check. The fed meeting tomorrow. Were going to come back with good conversation with Michael Holland and Robert Shiller. Futures in negative. Curve flattening. Weve had some Dollar Strength the last number of days. Were now up to breakout, but nevertheless, theyre there as well. In the currency complex, yen 108. 19. And theres oil pulling back over the last hour. This is bloomberg. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Francine this is bloomberg surveillance summer. Tom, a little bit of time on brexit with the Boris Johnson strategy really under security flee today for three days in the top u. K. Court. Well talk a lot more about trade, but first, lets get straight to the bloomberg first word news in new york city. Heres viviana hurtado. Wall street may get a 40 billion reprieve from u. S. Regulators. Bloomberg has learned they may get rid of a rule. It forces banks to set aside billions of dollars for a swap trade. The rule was imposed after the financial crisis. Banks argue the requirement is redundant and puts them at a competitive disadvantage. Iran vowing not to negotiate with the u. S. On any level. The countrys Supreme Leader saying talks with the u. S. Would amount to a victory for president Donald Trumps socalled maximum pressure policy. President trump hasnt ruled out a meeting with irans president. This month the two will be right near new york for the u. N. General assembly. And today in israel, voters are deciding to keep Prime MinisterBenjamin Netanyahu in office or not after aprils election, netanyahu failed to form a coalition. Polls suggest his likud party is in a tight race, but it will take more than a single party to rule, so the real race will be over who can line up the most seats in parliament. And bill gates disagrees with politicians who say the biggest u. S. Tech companies should be broken up. The microsoft cofounder speaking with bloomberg. Splitting a demp two and having two people doing the bad thing, that doesnt seem like a solution. So its a pretty narrow set of things that i think breakup is the right answer to. You know, these companies are very big, very important companies. The fact that governments are thinking about these things, thats not a surprise. Viviana in the late 1990s, gates battled the u. S. Justice department in a antitrust case. Back to you. Tom thank you so much, viviana, greatly appreciate that. We spoke with youseneff riyadh. Now we go to kevin in washington. Kevin crir ellie is our chief washington correspondent. I want to go to the 19th chairman of the joint chiefs of staff. Hes a general of the marine corps. Would you explain to me how the pentagon is responding to their commander in chief and how theyre responding to what they see in saudi arabia . Kevin virtually everyone from the president to even senator chris coons from delaware to secretary of state mike pompeo and Senate Majority leader mcconnell on the floor yesterday all blaming iran. That has really sharpened the political elbow, so to speak, with regard to the trajectory of the escalating tensions between President Trump and iran. Were just over a week and a half from the General Assembly meeting. I was struck by the statement put out by mitt romney yesterday who said war with iran would be a mistake. That said, im hard pressed to find any member of democratic or republican leadership, key word democratic leadership, who isnt worried about the threat and actions of iran. Francine kevin, is there a link between john bolton departing and this attack on saudi arabia a week after, and do you have any insight on how President Trump will handle his potential meeting with president rouhani at the New York National assembly . Kevin with regards to john boltons departure, that has been definitely a question that has been circulating around here inside the beltway in washington, d. C. That said, we should also note that secretary of state mike pompeo, as well as brian hook at the state department, have been instrumental in the maximum Pressure Campaign against iran. And then with regards to a meeting with rouhani, that is incredibly unclear right now. Given the dynamics of the last 72 hours, it would appear to be unlikely. Twhipe do you hear from the pentagon . Kevin iran, iran, iran. Its all about iran. Tom ok, thank you so much. Kevin cirilli today, our chief washington correspondent. Were going to segue here to the moment of a new book, narrative economics. Robert shiller, the laureate from yale university. Were thrilled to have with us today Michael Holland of holland and company, whos seen every shade of narrative in the history of wall street. You and i were talking nifty fifty in our youth as well, stocks with huge multiples. The key thing to professor shillers wonderful new book is this belief it will never end. Trees grow to the sky, dont they . I dont think so. They probably stop at some point, tom, as it did in the 1970s when we had similar distortions in the capital markets. When people said its going to go on forever and the bigger fool is the one who sells his stock, which is 50 times earnings, you were talking about toothpaste companies before selling at 30 times earnings, as we had crazy prices back then, we have crazy prices now, theyre not going to go to the sky. Weve had both i was looking weve had slack and zoom just crushed by the market. But theyre sell i couldnt believe it zoom is at 36 times revenue. Slack is at 23 times revenue. Tom did you have shares in the uber i. P. O. . [laughter] no, but microsoft, which is killing them, is at seven times revenues. This is a replica of the 1970s. It doesnt make any sense. Tom get in here before mr. Holland rolls over on the next marginal unicorn. Francine no, id love to get professor shillers thoughts on unicorns. I dont know how you describe our economy or our society right now. Quirky might be a polite way of putting it. Are we mispricing things all the time . We are mispricing things all the time. My view is that these ideas are stories that are contagious, the ones that win out, not the ones which are valid, which are typically boring. Thats how things go viral. Back to the 1970s or you can go back 187 owes, even further back, its human nature to talk tulips. Tulip mania, that was in the 1600s, but it was driven by talk. In fact, we have evidence of that, and they had newspapers already. They were just getting there. Its communicate with the internet available, the communications are very strong, and it doesnt make any sense, right . Its not as if people will state a confirm conviction that this will go on forever. Its that they think that those intellectual who is say it wont have been discredited. So thats where it ends. Tom near stanford university, heres the heart of the matter, professor shiller and professor holland. Those guys think they have a different playbook. The unicorn, Silicon Valley people. Michael of Silicon Valley has been brilliant on this. How come they have a different playbook out there than we do in the real world . We have a lot of playbooks out there, and they come and go. I like use a disease analogy. Tom a disease analogy . Im sorry to say it, but it is like that. The idea is influenza keeps coming back. Its a disease. Its because the narrative mutates, the disease mutates, and suddenly its contagious above the recovery rate. So it explodes into an epidemic. Its purely mechanical. Tom i learned you got math mall cal formulas in the book. You take this, mike, theres too much math in it. No, its in the appendix, i oved it for people like you. Francine professor, i need a couple of pointers, because im teaching math to my first grader. Well be back with Michael Holland and Robert Shiller. But stay with us. Happening now, the u. K. Prime minister Boris Johnsons lawyers are in the countrys highest courts defending his decision to suspend parliament. The hearings have begun. They will last three days. And the court has not given a ruling date yet. Of course, well continue watching the live stream. Pound currently at 12410 against the dollar. Tom bloomberg surveillance, Francine Lacqua with the Supreme Court in the united king dosm were watching in all riyadh and the responses from the saudi government and also in washington as well. Right now, quick, Michael Holland with us, holland and company. Its the single best chart. You got to trot out something underloved, underplayed, cash up to the eye balls, apple. A horrific stock story. They had the malaise of the 190s, 1990s, linear function, almost concave instead of convex. Extraordinary story. The basic theory here is buy, hold, then buy some more. What do you do with the stock . Is there a stock loss on a blue chip stock . No, those things havent worked. Southwest doesnt work for me. I should Pay Attention to sleep above the store, make sure when i wake up in the morning everything is priced where i want it to be. Francine michael, whats in a bubble right now . Yeah, francine, very good point. I did not use the word bubble before, but theres no question things like slack and these things make no sense whatsoever. So you had growth at a reasonable price starting out this market 10 years ago, then you finished up right now with growth at any price what the private equity people are paying for at 30 times revenues versus the killer, which is microsoft. Tom Eric Schatzker talked to bill gates, microsoft, ballmer, nothing. Straight up to the moon. What do you do the with the mother of all blue chips, microsoft . My Largest Holding and has been for a long time. It is seven times revenues. 20 times earnings. In a market where you have Companies Like zoom and slack, which are trading at infinite because they make no money, infinite multiples and many, many, many times revenues, makes no sense. I can own the ones that are reason, and that happened in the 1970s, tom. Theres bifurcation in the market. You had great prices. By contrast, great industrial at five and seven times earnings. Francine all right, thank you so much for joining us, Michael Holland, holland and company chairman. We have a new show to tell you about called bloomberg money undercover. Tom and i will be watching, so you should tune in too. Put t puts the spotlight on the world of alternative investment lisa will take you inside the world of private debt, equity and real estate where investors are pouring money into the private market at an unprecedented level. Its a Weekly Program t. Starts today at 1 00 p. M. New york time. This is bloomberg. Francine this is bloomberg surveillance. Tom and francine from london and new york. Tom, bill gates doesnt think its a good idea to break up some of the biggest u. S. Tech companies. The worlds second richest man and microsoft cofounder spoke to bloombergs Eric Schatzker in seattle. I dont know the last time a company was broken up. I think its quite a long time ago. And you have to really think, is that the best thing . If theres a way that the company is behaving and you want to get rid of it, then you should just say, ok, thats a banned behavior. Splitting the company in two and having two people doing the bad thing, you know, that doesnt seem like a solution. So its a pretty narrow set of things that i think break up is the right answer to. You know, these companies are very big, very important companies. The fact that governments are thinking about these things, thats not a surprise. I was naive about this, but that was a long time ago, and i didnt realize that as microsoft gets successful, wed come under scrutiny and we went through our thing back in the 1990s, and that made us more thoughtful about this kind of activity. Do you share the governments concerns that any one of these companies or all of them perhaps are doing things, abusing their power in such a way that it undermines either the political system, and weve heard about that, or perhaps the consumer economy, and weve heard about that, too. I think these companies are behaving totally legally. Theyre doing a lot of innovation things. He fact that the tax rules incent you to structure in a certain way and you can minimize your taxes, people should look at changing that Going Forward, you know, thats the question. Sorgesd nobody had a crystal ball that in some ways that would be a way of radicalizing people or splitting them into different groups. What exactly the solution to that should be, to have us more reading the front page, not being pulled to extremes, i dont think you can rely completely on the Tech Industry to worry about that or not, come up with a solution. I do think government really needs to talk about what those rules should be. Its not, you know, you can say im biased, but i see these as well meaning, highly innovated companies that its up to society to make sure that their innovation doesnt have negative side effects. Tom bill gates with our Erik Schatzker. You get lucky with the professor of economics and finance at stanford university, squirming here uncontrollably listening to the capitalist gates. James madison, if men were angels, no government would be necessary. Is it necessary to break up the Tech Companies . Well, i agree with bill gates here in the sense that we have to see what it is we dont like, and we have to go at that. Breaking it up is the same for banks, its just that sort of quicky sound bite, but exactly what problems in other words, the size becomes a symptom of the problem, so treating just the symptom is not going to necessarily take care of the underlying problem. If the underlying problem is anticompetitive behavior or dark pattern contracts, whatever, we have to outlaw that. Tom where are the shadows in banking . Even your harshest critics hang on your every word so they can smart per whats out there. Where are the shadows in 2020 . Well, wave lot of places where fragilities can hit the banking system. I mean, theres a lot of rumbling in europe. Theres all kinds of trade wars going on. Theres cyber always there. There could be anything that ould hit that deck of cards. Francine i also want to bring our viewers and, of course, the viewers up to date with whats going on right now in the United Kingdom, which is Boris Johnson and his lawyers, so hes not actually going there himself at the high courts, but his strategy certainly is coming under scrutiny and the Supreme Court of the u. K. Hearings have begun in london, and they will last about three days. The court actually has not given a ruling date, but continuing to watch this live stream and bring you up to date with anything that were hearing. Lets get back to the finance and economics professor at stanford. Professor, when you look at some of the concerns, its basic that will we still have a fragile and unhealthy financial system. What would make it better . What regulation would you look at so that we feel safer in the next crisis . One thing ive been arguing for is that we have to, first f all, assess the level of fragility and interconnectedness in this market, and then we have to actively reduce it. Incentives are to remain fragile. People within it benefit from that, and the rest of us are in danger. So fragile system is sort of inherent in banking, but not for good reason. So just basically once you fragile, you want to just basically live on debt all the time, and it just gets ratcheted up and shornt ma tutors. Not all of it is for good. Everybody chasing yields now and going for their shortterm dividends or payouts on their securities or whatever it is. And so all of that ends up building up more fragility in the system. I think we need to take care of that. Francine but professor, whos the right person to regulate this . I keep being told that no matter what, bankers dont want to auto regulate themselves, because you always try to get away with as much as they can. And regulators dont understand as much as the complex issues as they should. Thats right. So regulators are using all kinds of metrics for safety and stress test and a lot of complicated things that involve a lot of assumptions, and we saw this where the financial crisis, and im sorry to say in principle theyre using some of the same approaches to this system and the same structure of the flawed structure of the regulation. Thats a kind of dismay, lets say. Tom negative Interest Rates. Youve got a lot of smart people at stanford. We were talking to professor shiller earlier about this. How do you fold the shadows in the dynamics of the Balance Sheets into this thing you didnt study at yale when you took your ph. D. . Where are negative Interest Rates . Negative Interest Rates are not in our textbook. We have to rewrite every textbook. Tom thats a social theory, not clear markets. Its upsidedown. Everything about negative Interest Rates tom but we have a fear of loss, dont we . Yes. I mean, its all like, you know, puts you in territory that we dont im not sure we know how to deal with it. Tom your book title is pretend and extend, thats what were doing here. Very good, because theyre kicking cans down the road. Pretending and extending is the name of the game, certainly in the Financial Sector forever. Francine professor, does the next recession or is the next financial crisis, is it around the corner . Is it because of what youve just laid out quite clearly . No, the system is just prone to, you know, something happening and triggering a collapse potentially of panic. You know, jamie die moan told the financial di mon told the Financial Committee that his told his daughter around the time of the financial crisis, when she asked him, dad, whats a financial crisis . He said, oh, its just something that happens every, what did he say, 5, 7, 10 years. Tpwhay count, were kind of due for one since the big one was 10 years ago, and we are kind of extending and pretending since then. So i now have in my slides, you know, i checked the latest headlines of where its going to come from. You know, people are going say its going to come from the same place as before, leveraged loans, c. L. O. , its not clear. Tom are you in new york to see james dimon . Talk about the future of banking . No, but there were bankers in a conference yesterday. Tom professor, twoufl catch up. Congratulations on your continuing research at stanford. Partner professor at stanford, g. S. P. As well. Were going to continue forward. Lisas love fest at 1 00 p. M. Today. Howard marks will join her for an important conversation. Tomorrow at 2 00 p. M. , jay powell will have an important conversation, a statement, rather. And then scarlet fu will lead our coverage, important conversation on a 25 basis point presumed rate cut. Stay with us. This is bloomberg. Pres. Trump today we got a lot of oil, we got a lot of gas. Alix President Trump in the market remain calm. The headlines are not. Saudi aramco says it could take weeks to get back online. Please, fed, we want some more. The fomc meeting kicks off today with the Market Pricing in one cut. How many more will we get . Work could push back its ipo roadshow after pressure from softbank. Yesterday we come in, it is all about geopolitical risk. What do you price in, where, when . Today, equity futures off just a touch. Oil down almost 2 despite the headlines that continue to ramp up between the west and iran. Eurodollar goes now