Transcripts For BLOOMBERG On The Move 20160809

Down this sets out his vision to return the u. S. Economy to its glory days here at glory days. Caroline guy, we are pretty mixed when you look at the open in your it we have gains yesterday. Chinese inflation data deflation as the case may be. Factory dates, were looking at the Indian Holding rates. We could see the cac 40 open lower and simile and similarly for the dax in germany. Down. Il is a what is interesting always a first good call in the morning. See, everything is down pretty much against the dollar. Caroline mentioning what is happening with oil. Brent crude down by. 9 . What you will is one to watch out for. Spain went sub 1 on its 10 year. We are went to see what the market opens up on the equities. Were looking forward to talking to mr. Wilson. Lets get you caught up. Heres Bloomberg Business flash with david ingles. Bank india is central left Interest Rates unchanged. Pushed inflation above the countrys target. The purchase rate will stay at a fiveyear low of 6. 5 . Predicted by the 27 of 29 economists at todays policy announcement is the last one and russians time as and rajans time. Policymaker,ngland Ian Mccafferty says Central Banks should follow a gradual push and how it responds to exit. In how it responds to brexit. More easing is likely to be required. You can consumers put brexit anxiety to one side as warmer weather increased demand for barbecue, food, drink and summer clothing. Growth which 1. 1 was the most in january. Numberirlines says the of flights disrupted by a computer failure is approaching 1000. Canceleds having 870 flights on monday. It is warning that cancellations will continue as the systems come back online. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. Bloomberg. Caroline . Caroline david, thank you very much. Donald trump has laid out his plans for growth in the u. S. , borrowing from traditional republican ideas like proposing tax cuts and looser regulation he told the Detroit Economic Club that he wants to lift restrictions on the energy sector. He says he wants lower Corporate Taxes and the biggest overhaul to the income tax codes since ronald reagan. But you cannot ever start a Small Business under the tremendous Regulatory Burden that you have today in our country. [applause] going to end it. Cut regulationo massively. Caroline lets bring in our desks guest our next guest, stephen isaacs. Ons this change her opinion where trump is in the race. He had a terrible first week of august. Does his Economic Policy steady the ship . Where traditionally politics in america doesnt get serious until after labor day. Yes we got three months ago. He has had a bad couple of weeks. He has not been able to restrain himself from his reaching for the twitter gun. That is gotten himself into various scraps. The fact that hillary is only 5 ahead, and that means in my opinion that the race is absolutely wideopen. If you look at what happened with brexit in the last election here in the u. K. Over a year ago, the polls have underestimated the more radical choice. That will never be more so in america. The shy trump phenomenon will definitely shy trump voters. Lets put it that way. Seven out of 10 . This is an interesting election. There are radical choices. Move away from the personalities for a second. The trump agenda is a traditional republican reagan asked cutting taxes, slashing regulation, mixed with populism. It is an unusual cocktail what will it lead to . Economic activity and markets. It is an and shot in the arm to the economy. Slashing tacketts bigtime slashing taxes in slashing taxes bigtime. Removing reams of regulation. All of that will act as a huge stimulus for the economy, initially. Longerterm, how will this get paid for as a fun with the . Eaganesque deficits in the first couple of years with a republican congress. If trump wins, it will be a republican congress. I think he can get a lot of the stuff through. You are moving away from the gridlock that we have had for the last eight years. Lot of this can get through for the economy, it means a big shot in the arm. The market, i think it makes a very big change to the bond market. Guy hillary is talking about the big if the structure plan. She needs to make o work for. That is the most crucial aspect for her pc is talking about interception spending story. Why does that not work for you . Them are ath of change in policy. Not just in america, you can make the same argument here postbrexit p austerity went out of the window. It was used as cover. In europe, and france in particular, the security challenges are being used to up and we are in a populist world, whether it is hillary, trump. More government expenditure. It means a change in the fiscal direction of travel. That has profound applications for the bond market and the stock market. Caroline and potentially music to several central bankers heres. Central bankers years. Thank you for joining us. We talk bond markets as a ling yields lower japanese we speak to nigel wilson about the companys results postbrexit vote britain in the outlook for the United States. This is bloomberg. Guy 7 41 in london. It is going to be a lovely day. Beautiful sunshine. The market opens in 18 minutes time it lets get you caught up. Heres Bloomberg Business flash with david ingles. David thanks guy. Lets get started with shares at anz. The company said it has boosted capital and cut returning assets. Shane elliott indicated expenses for bad debt will remain steady. Most ages most asian focused lender has dragged down return inequities and forced it to cut dividends for the First Time Since 2009. Hasas twitter, weibo, it exceedede the companys own guidance. 2 million in june, 89 of the users access through their mobile phone. Amazing. Amazons office in japan has been searched over its dealings with merchants on its online web store. They say the agency is looking into whether amazon they gave it more favorable conditions. Amazon declined comment. Pay 100has agreed to million to resolve an investigation that it inflates borrowing costs linked to london and u. S. Dollar. And that is euro Bloomberg Business flash. Guy for japanese investors seeking yields but unwilling to take on currency risk, italy lias the beautiful country italy really is the beautiful country. After hedging 24 times the return from hedged u. S. 10 year treasury. Dollars are in demand as a result of which the cost on the swaps are massive when it comes to hedging the treasury, but very little when it comes to hedging your italian bonds. You can see this clearly on the chart. On the top, these are all hedged. The italian 10 year yield hedged through at aing little less,. 2. 10 years were down, flat japanese negative. The whole swing, this whole story we have been watching which is taken so much money out of japan and put it into the u. S. Treasury market. Stephen isaacs is still with us. Is it for exactly this kind of reason . Youre buying a tie in registries buying italian treasuries, you are taking a giant risks. The only buyers are Central Banks. Your greater fall is Central Banks. Lets look at centralbank policy. I think we found in the last few weeks in japan and europe, where we have had the most aggressive Central Banks buying qe programs fallout. Both of them have failed to act when there was some sense that there was more economic turbulence postbrexit. They had a good excuse and wise that . I think because people questioning whether negative Interest Rates work. We know what happens if you go 5 to 1 , you know what happens. You get a big deflationary trade. If you go from 1 to minus something, we dont know how it works. An enormous experiment. Their seeming to be quite a few trends about people saving more money, because the yields on their existing portfolio is negative. There is a lot of confusion as to what Central Banks will do going forward. In this populist world where it is going to be the flood taps opening for fiscal policy. This thing has only one way to go. Change. , 16 and a this is really expensive paper. Investors have got enormous profit in the bond market. Take those profits now. Stephen, the ecb doesnt seem to be going anywhere in terms of buying when it comes to italy and spain. Spain going sub 1 in terms of its yield. Is it the u. S. That is going to hurt the most when you get bill gross calling the end it to the rally. Where she where should you be getting out of first . Stephen sovereign bond yields tend to move together ultimately. We have had a 35 year bull market. One can the silly pick out one of the other. Jeffrey goodlatte called trump very comfortable with that. With debt. Chuck is made trump has made a fortune by using other peoples money, by using debt. The whole idea is to effectively we leverage the u. S. Balance sheet. The french will do the same thing. Theyve got enormous problems with the security landscape. Germany has got problems because the deal with turkey maybe off. Visa free travel is a redline for him. The problems in europe are equally as real. Everybodys going to reach the physical gun. The thing about fiscal policy is it is direct. Monetary policy requires lag and people changing their folios. Fiscal policy, a check in your pocket, a tax cut. That is much more direct and it works. Guy to carolines point, they have to have fixed income to u. S. 10 years, 1. 57 where is it in a year . Would you sell u. S. Treasuries and invest in areas where the ecb and boj will are going to continue to invest as well . Trade. The relative where do you think it is good to outperform . The u. S. Market seems to be isnt that where the story starts . Stephen the u. S. Market is still more tractive. Is more attractive. On a currency basis. Trump also said that he is going to cut the Corporate Tax rate to 15 . Tohink that is going to lead the end of corporate diversions and a large amount of cash. All of these cash mountings will be brought home. I see that weve got another big leg in the dollar to come. By your dollar Corporate Bonds on hedged. They will be the safest place in the bond market. Caroline stephen, if we are going to be wary of the bond market, you call this time to get into stocks, exposed into this fiscal expansion story. Where . Trying toks call stock market is a difficult game. The trade and i characterize it by terry smith and his product. That is the exceptionally good strategy to buy dividend yielding stocks, because tobacco companies, they have had this fair winged and bull markets of the bonds. That strategy has run its course i would like to see pure cyclicals. Conception companies, industrials and banks banks are the biggest asset class that does the worst with very low inches rates and doesnt the best in a rising Interest Rate environment. Banks have been hammered in europe this year. I think they now represent sensible value to be put back in peoples portfolios. Us. Stephen isaacs joining we are minutes away from the European Equity market open. The potential corporate movers in todays trading including munich re. It fell on Natural Disaster claims did nine minutes until the open. This is bloomberg. Caroline 7 52 in london. 8 15 8 52 in berlin. The one stock that is slightly to rise, munich re. Secondbiggest reinsurer in the world smashes estimates when it comes to the Second Quarter. We saw the first half numbers starting to shift and strength. Second quarter profit fell but the number is more than double what analysts had been expecting. Higher claims a Natural Disasters in its primary Insurance Unit but much better than had been anticipated on his overall number. We are still seeing the calls up to 2. 3 . They stick to their fullyear target of 2. 3 billion euros. Guy . Guy were going to talk about the insurance sector. A little later on, we have a nigel wilson coming up. That is going to be an interesting conversation. A stock that is going to be on the move potentially. When you look at the absolute numbers, we should see how the market opens up. Profit up, missed estimates. Talking about a cautious environment. One thing that legal and general has done has stepped away has stepped away on the lower end of the credit spectrum when it comes to european banks. Stephen isaacs, ready positive on european banks. Somebody has emailed in and asked if you are going to sell bonds, what do you buy . Stephen i am more comfortable with bank equity as of the risk. Wards are so exciting to talk about balians come bail ins, there are concerns about willie happen . I dont think they can happen. If you want to fall to italy out of the eurozone, try to do that germany, im sorry it back to trump. Im sorry. Back to trump. The bank of england is going to water down some of the requirements affecting the banks. The move toward greater regulation and Financial Services, i believe will start to unwind. This desire guy Hillary Clinton says she is going to go after the banks. I think it is a great populist Bernie Sanders battle cry. But if she would, she would find it much more difficult to achieve with a republican congress. Lets be honest. Head of english and coming to an end and i think there is less of a danger youll get bailed in. Caroline stephen isaacs, will get your thoughts after the market opens. Coming up, it is the market open. Futures, a mix to start. We will look out for munich re, 2 higher. We are spinning to the ceo after this rake. 2100 the green in the futures market. A Beautiful Day in london. Four minutes until the open. This is bloomberg. Guy good morning. Welcome. I am alongside Caroline Hyde over in berlin. We are moments away from the start of european trading. Risk off. Legal in general says it cannot be immune current uncertainty. We speak with the ceo, nigel wilson. Rajans last great decision. Rate decision. Will his successor have to act sooner or later . Setsd trump talks tax and out his vision of returning the American Economy to the glory days. What does business think of his plan . Seconds toe about 12 go. We think it will be a mixed story. An number of corporates on the move. Let us take you to the open. It rallied a little bit into the close yesterday. It will be interesting to see how it will do. There is the ftse 100. A little bit of traction. Opening soft. A fairly flat lori. Currency markets. The pound is losing some ground as a result of wish which, putting positive into the ftse 100. Manus cranny has the details. Manus equities in europe. Financials, unchanged. We have mptom telecoms slashing of it. Global equities hitting the highest level in almost a year. Oil is lower. Take a look at the guilt gilt. Gilts hitting their alltime low. Mccafferty says he wants to learn as he goes on the bank of england. Gilts are going to be interesting. We had an alltime low yesterday. These stocks. Munich re. The ceos numbers were beach. Full gear outlook hurt they took some risk off the table in terms of selling some wants. Gap shares dropped. And footfall was under pressure. We are waiting for the opening call of munich re. Pandora waiting for that. I have seen called down 5 . A on their net income. I have to show you one other story. A five. D is down for the longest losing streak since may. There is brexit and there is the current position. What a lovely line from the munich re ceo. Let us see how he is doing in his zero buying world. Everybody too take the mr off function. Legal in general. We are about to speak to mr. Wilson, the boss, later in the program. The miss seems to be having an effect on the stock. This is the biggest u. K. Pension manager. It is down. Getting hit pretty hard. It was hit hard post brexit. Visa did reasonably well. What now it is down by 1. 2 this morning. Cs is still with us. Massive holder of gilts. Deriskto deal risk the portfolio. Stephen i think you have to have diversification. Alternativelook at assets and look at the equity market. Go back to donald trump. Remind ourselves that he is the poster child for antiglobalization. The ending of the forces that we are taken for granted for a generation of freedom of movement of labor and of goods and services. Have been very deflationary or have allowed inflation to be contained in a different way than what we have seen. If you start to take off a lot whichse globalized trends i believe we are starting and we may move forward quite smartly, that is again another step forward. Will go think inflation up in the bond market will sell off. Stephen i would not make a call on that particular company. Asset class, insurance will do well. It has done poorly because of squeezes on margins with low Interest Rates. If we move into a high Interest Rate world, they will find their liabilitiesnd easier to manage. Another big problem for some Companies Including the insurance sector has been the Liability Management of the Government Bond yields. You can plot them. There is a very big lag in their performance. Liabilities, i am expecting on a 35year view will be less painful and it has been. General, legal in diving on the back of todays results, it looks like they could have a rosier future. They also seem to be outperforming the market. And the sea could change it for them as well. Markets sellbond off and yields ramp back up. Where are they underperformed . Stephen the dividend players. But let us talk about real estate. A lot of the easy money has piled into the real estate sector in the last fivesix years chasing yields. I feel they will find that quite difficult to find. Too much supply. A are at the tail end of cyclical over expansion in property anyway. But i am very concerned that those yield levels will not exist any longer. I would be very cautious on the property sector. Guy talk to me about the capital and investing. One of the things the fiscal story would generate is structured spending. At the moment, wages are not going up. What we are not seeing at the moment is investment in equipment. You can see that clearly in the numbers, not just in europe but around the world. What would it take for what would it take to get companies to invest in stuff . Stephen the decline of productivity growth and the consequent which has gone hand in hand is the lack of Corporate Investment has been a story for a number of years. Take at sure galvanized impact on regulation. Donald trump says he will do it. Let us see if he is able to fight regulationink it is that is stopping people from investing. Stephen that is the biggest components. Is a part of it. You dont have baby boomers to consume any longer. In some countries where they have had very big demographic problems like russia, they paid women to have babies and that has had an impact. Donald trump has had his bit in terms of children. These are difficult questions to resolve but i believe that in the Financial Services industry, theamount of regulation, cost and complication of regulation and the amount of on it has to sap productivity. Maybe we are at a turning point there. Caroline we will see if the u. S. Viewpoint spills over. Next, we talk strength of the european banking sector. We have been speaking to the Credit Suisse executive. We are live in mumbai as rajan makes his last policy decision. Laterak with nigel wilson after the company has posted results that they missed. This is bloomberg. Caroline welcome back. 10 minutes into your trading day. It is lack luster if you are looking at the stoxx 600. Looking at the different indices. Some of the big miners on the downside. Cac is up. , the insurance sector and the telecoms are your out performers on the stoxx 600. Minors are the underperformers. The bank of england, the policy maker says the central bank should follow a gradual approach in how it responds to brexit. Writing in the times newspaper, the u. S. He believes that more easing is likely going to be required. Put any brexit anxiety to the side in july as warmer weather boosted purchases of barbecue food and summer clothing. Kpmg. Mostgrowth which was the since january. In germany has called for a tougher stance on the deal with turkey in the eu. Red lines should be established or it should be canceled. Germany was sitting on a time bomb with regard to the refugee influx. This is ourall, opinion and we need to close in borderd put controls again. If you are looking to the sheer numbers, last year we had 1. 5 million immigrants. This year, we have no exact numbers but we expect more than 300,000 are already here in germany or more. There are no numbers available currently which means something is going on in germany which cannot be good for the country. We do not know who is here. We do not know which immigrants are here. I think we are sitting on a time bomb in germany. Global news, 24 hours a day powered by more than 2600 journalists in more than 120 countries. Guy the new addition of bluebird markets is best Bloomberg Markets is out and it features credit squeezes suisses ceo. Stephen is still with us. The strategy. Let us talk about strategy. You must spend hours talking about strategy. Remember, he has had a tough time. He has been accused of having put out a strategy that did not quite speak to shareholders and did not have enough details. It was his chance to explain how he saw things going forward. We spoke about risk, his challenges, and his relationship with the investment bankers. At one point, he said let us think about this. He showed me a share price. He picked it out from 2013. Time television. Look at that. I am being accused of messing up the bank. If you put a circle around july 2015, he says sure i could not have ruined the bank in 12 months. For me that was telling because this is a man under pressure but he has been in the bank for about 13 months. It andtrying to derisk raise capital. There is so much to do to put it in better shape so he can get a growing. Guy what has he done well . He thinks he has done well derisking. Had he not raised the capital three months after becoming ceo, the bank would be in a difficult position. I tried to press him. That we would be worse off then now. He feels he has done badly on communication. Issays what really hurts him when people say he is arrogant because he is trying to do the best job. You have heard about tensions in the bank. He says morale is better but not 100 . We know stephen is a fan of buying into banks, before we asked him where to go next, give us a sense of what you know about him. He used some wonderful sporting and allergies. What you think about him sporting analogies. What you think about him . Did he want to be the man that manages to revive Credit Suisse. That he just wants to companythat he leads a he leaves it in much better shape. He also said overall, he needs more time and he needs it shareholders to be more patient. This is the first time i have heard him apologize to shareholders. He said he was also a shareholder and it is not fair value at the moment. He believes and credit suise and and he believes he can put it in better shape. Caroline how much does the man woman at ther a helm of the bank dictate whether you buy into a stock or not . Stephen it dictates the overall strategy and the sense of purpose. I think it would be unfair to in an eraa new ceo when all bank shares have been collapsing. E does not stand out in that regard. There is not the same as ubs or morgan stanley. Ubss was much more slash and burn the Banking Division and concentrate on wealth management. Has been trying to make it work better. Is that the right or wrong strategy . I think it is a reasonable strategy. It is a good bank. It has a great longterm reputation. This is a credible ceo. Of generallyt looking for value in the banking sector, i have no problem with it. Nt to talk about did you want to come back to that . The line that struck me he said we are never going to be done here. Mind of whata in the finished product looks like. Needw many quarters do you of better than expected results . He would not give me an answer. If you think about it, he comes in charge, he becomes ceo in july of last year. His strategy was misunderstood because of a lack of details. In march, he put out an abysmal results. In june of this year, we do start to see results. Better than expected profit. They were not expecting a profit at all. It is too early to say that things have turned around. He says he will never cry victory because there is still so much work to do especially given the macro environment. And the clients have been freaked out and are not doing much. A tough mix. A great piece. Thank you very much indeed. Stephen, you talked about the revolution. Cfos offtalk to bank the record, they say this is going to change the way we do business. But talking about lending, it will not change much. And not as convinced as all of the hoopla would suggest as they should be. Stephen there is a fear that the whole banking model is going to be really challenged by direct lending markets. Strategyelieve in that at all. I think what we have found is that actually some peer to peer strategies are already unraveling. Lending club had a scandal not that long ago. The amount of money passing through these strategies is not that great and they have not yet faced a genuine recession. How will all of this money that has been invested how will it fair in a stressed environment . I dont think it will fare that well. For banks, the panic is over. And technology is a friend. The technological changes, the , billion in cost base winters has worked very effectively in that the way they are able to reduce their technology, by mobile banking and automating credit decisions this is something that is not being talked about. This is a Sleeping Giant that would help banks earnings over eight timeframe. Period of time. Caroline we will be talking about emerging markets next. Rajan his final move. Details are next. This is bloomberg. Caroline welcome back. Indias central bank governor, rajan left Interest Rates unchanged at his last policy review. Let us get more with bloomberg executive producer. In mumbai. What does he leave behind as his legacy, the fight for inflation . Is an exciting tenure for him. He took over in september of 2013 and india was facing a large current account deficit. Since then, they have taken a series of measures to protect the rupee. The governor has also been instrumental in pushing through an inflation targeting regime, setting up a Monetary Policy committee, along the lines of the fmoc. He was the fourth behind going after indias bad loan problem. He set a deadline of march 2017 to clean up indias inking system and much progress has been made on that front. There have been challenges. There have been critics that have said he followed a strategy strategy ofish Interest Rates for far too long and that hurt indias growth and he has been outspoken. He has spoken on issues outside of Monetary Policy which did not go down too well with the political establishment. Now, we will have a new governor that will likely take charge on the fourth of september. We still do not know who he is. That will be an interesting story to come out. Buy or sell emerging markets . Stephen i am a buyer. He will talk about political risks and that is a reason why many shy away from emerging markets. That is one reason why we should look at those markets. Environment,ollar maybe there is not an optimal point of entry right now but looking at a reasonable, longterm perspective, the growth story is there and the value is there. Guy thank you for sharing so much of your time with us. Earnings next, legal is a mix and the stock is down. The confidence over shareholder reserves. Ceo,ll be joined by its nigel wilson. He is up next. This is bloomberg. Online welcome back to the move. It has been a sanguine picture if you look at the stoxx 600. 2 ee the dax trade higher,. Many agreed doing well on the back of the earnings. Have a look at some of the big movers on the member ranked return function on your bloomberg and on our again and see what the leaders. On the high side, lts this is of course french billionaire which is overall what their been which is been buying into u. S. Cable companies and helping their earnings. Meanwhile on the downside, pandora, did the jewelry maker not doing so well. The Second Quarter profit and revenue not living up to expectations. Legal and general fifth from the bottom, down. 3 . Not coming in were analysts had been expecting. An interim dividend being higher than what peevishly forecast. We will be digging in whats more in much more. Guy legal and generals shares , first half operating profit 477 million pounds. Nigel wilson is the ceo. He joins us now. Lovely to see you. We were chatting before the start of this conversation about the share price. Bounce up a little bit. It is been quite a bumpy share price. Relatively consistent in terms of dps. Only of 20 and are only of 20 . Guy your clearly a proxy for a number of other things. Nigel there are lots of Different Things going on in the world. People find it difficult to interpret it on any given day, it can interpret it positively or negatively for us. Because there is a lot of noise around at the moment, we seem excessively respond to any type of noise, because we are such a weather for the economy. Bellwether for the economy. 100 million higher than a year ago. A Staggering Amount of extra you and i think sovereignly results at the consequence of that come anything to do has an impact on our business. Give us a sense about capital strength caroline gives a sense about capital strength. If you rates did he wrote somewhat. What was behind that, and when were you in what we looking at . Nigel we paid a dividend that is why the summit see that is why the sovereignty way show the sovereignty ratio went down. Surplus which many other industries, if youre holding that amount of capital, that d be a significant lets talk about risk within the portfolio. At tick the cross my bloomberg, i saw of the risk on a number of areas. Is it fair to say given the uncertainty that you see, you sk some ofg to deri the things you are investing in . Nigel since brexit, we have invested an extra 500 billion pounds. The u. K. Is a great place to invest in. If we dont invest, then other people will not. We still think that is true. Whether that is the great city, the businesses, where looking at Venture Capital because there is some fantastic technology being developed. It is ironic that it is all trapped and it is not getting into the real economy. That is the frustration. Caroline you see the u. K. Is a good place to be investing. You managed to avoid europes avoid suspending your Property Fund and what he believed drove that. You think you need to rethink the way it is restructured. Where you see the asset class going . Nigel the asset class should become more attractive because rates have fallen. Equity yields have fallen. One would think would track and the sale of direction. Howstion of how we should Property Funds be structured is a very good one. That is something i think will have a dime on with various peoples this varies people, we tell investors want more liquidity than is actually available within the funds. Fortunate that that was one of the scenarios that we thought might happen so we were very long on liquidity so we could help on redemptions. We do not close our funds like many other places. Guy i am fascinated by the prices because aberdeen had to go through some quite extraordinary boosts to jump through extraordinary hoops to jump through. What did you see that others did not . That enabled you . Nigel in a highly uncertain environment, we tell Property Funds may find themselves in a lot of redemption. With a lot of liquidity and we had about 20 in liquid assets to buffer ourselves in case there was any push for the door. That is what we so. We had less liquid assets as a consequence. We get ours so that investors could trade. Guy we are going to talk about more what is happening in the u. K. In a moment. Nigel wilson is the ceo of legal and general. He is good to say with us. Ensures in commercial property. We just talked about them. Nigel wilson is investing more the u. K. He is ceo of legal and general. He stays with us. This is bloomberg. Caroline this is on the move. Germany trading higher and munich re and deutsche leading the charge. Lets get over to bloomberg is his flash with david ingles. David thanks. Lets have a look at munich re. Second quarter profit that is more than doubled. Net income declined. 974 million euros. Thats even as the worlds secondbiggest reinsurer had higher claims from Natural Disasters. Have a look at shares. Trading higher this morning. Airlines says the number of flights disrupted by a computer failure is approaching 1000. The carrier expects more than 100 more have been canceled. 817 monday. This morning delays and cancellations will continue even as they come back online. At as of anz have closed high in sydney after the company said it had boosted capital and cut low returning assets. Consensus for bad debt will remain steady. A region has dragged down every turn in equities. That is your Bloomberg Business flash. Guy . Guy nigel wilson, ceo of legal and general is still with us. Month. On the one of the things that people and you and i have been chatting about this is they make this assumption that lower rates is bad. Nigel it is a commonly held misconception. Ive tried to convince people that doesnt happen. Rates are down to. 25 . Interest rates falling have not hound this whatsoever. Theres this misperception around. Guy actually cut further . Nigel i dont want them to cut further. The corporate sectors need to step up. There is still this huge amount of money about, 300 billion in efficiency projects. List, top five things you would build now . Nigel i would commit to building 50,000 new houses. The government in london 20,000 funded by the government directly. I would improve the transportation links incrementally across the country. , do muchpend on energy more generating. Not worried about upsetting the chinese. Could produce real economic gains for the economy. There is alearly fiscal part of the equation, adding to the monetary stimulus that we have already seen her do you have noted that you have been getting out of the riskier assets. And there you have said you have been putting money into new technology in the united kingdom. Why are you not exposed to low rates at the moment . Do not have them much holding in terms of gilts . Where did you get them if you are not going into the investmentgrade area . Nigel our assets and liabilities match. We are not like a bank. Very little impact on our business. We have been a strong advocates of direct investment here in the u. K. At the same time to do we have committed to 15 billion and we have invested 7 billion so far. There are huge opportunities in the u. K. To invest with more direct investments, right across the u. K. Hampton large parts of the economy outside of london. Even london, we got to use the scales to create better chance rotation here in the u. K. The problem is getting around london and into london. Guy this is the week to make that comment. Given the strikes that are underway good a lot of people pretty angry. Is it the role we need them to . Nigel there is much more lending required here in the u. K. Sign we need a lot more finance here in the u. K. We need a lot more finance. Im excited about what is going on it universities. Universities. Startupsrld leaders in. The bottom of the leak in term of skills. America does this much better. U. K. Business is being sold to the u. K. s because we are not is being sold to the u. S. Because we are not scaling up. Guy what about Venture Capital . Where looking at working with a number of investors a number of universities lost the u. K. And providing capital to help these startups. Again, i see everywhere go, i see exciting opportunities in at the structure and to invest in u. K. Business. Caroline do your competitors get that . You are the largest provider, workplace pension fund manager. How about the rest of the Pension Fund Managers . Nigel that is another good question and we think we should lead the way. We have been successful in the last year in terms of management. We have grown by 100 million in the last year. We have the funds. We after 3200 funds and sovereign wealth funds it if we leave the ways if we lead the way, we act as the principal principle bringing the people in. Ironically, it has been falling capital that is investing alongside of us. We will like some more of the domestic Pension Funds to snuggle up closer to us and really good in really good exciting projects here in the u. K. Caroline nigel wilson is the ceo of legal and general. Up next, donald trump rolls out from withic agenda join from ppp to tax cuts. This is bloomberg. Caroline welcome back to on the move. Donald trump has laid out his plan for growth in the u. S. Borrowing from traditional republican ideas. He told the Detroit Economic Club that he wants to simple fight excessive business regulations and lift restrictions on the energy sector. He also said he wants to lower Corporate Taxes and the overall you cannot ever start a Small Business under the tremendous Regulatory Burden and you have today in our country. Going to end it. Going to cut regulations massively. Caroline for more lets get to brian klaas. Nigel wilson is still with us. Brian, give us a sense of what you heard from donald trump. Bit loggerhead as of late. Does he start to perform better . Ryan he is coming out brian that economic speech was a frank stein monster of Economic Policy. It was appealing to wall street, the deregulation and the problem is the regulation might help some businesses on wall street but if the u. S. Tears of its trade deals, it is going to be a drop in the bucket. Guy how much is real . And how much is it for politics . Brian i think donald trump is playing politics all the time he is trying to salvage a drowning campaign. He thinks he is the unsinkable titanic. He was right during the primaries but now he is thinking and he is trying to put an olive branch where he can but nobody is in the nobody in the establishment is really taking it. We have more people establishing we have more people abandoning each day. He talks about earning money back that is sitting overseas doing absolutely nothing. Nigel just everything. I would be totally supported of. The american system has to be more proactive and bring all that money back. Taking 1 and turning it around into 10 money for the likes of tech companies. There is too much red tape for businesses in this country as well. One of the themes when i go around the company is more companies cannot become Bigger Companies because the red tape rounds them out when they are starting up. Our Accounting Firms had to be thats have to do more work to get the startups and to make scaled up. Caroline are you bracing for more volatility as we head into the president ial election race echo how exposed are you to the United States . Nigel we have quite a few assets over there. The u. S. Is a great country to invest in and we continue to invest in the u. K. And the u. S. The two big economies to invest in. We will continue to do so. We are braced for volatility. The world is going to have lots more volatility in this political, economic swing around that is going on everywhere, across europe and it definitely in america. It is going to continue. Guy hillary, thursday. She is going to pursue. Massively different. She is going after wall street virtuous to regulate, she wants to do new energy. How different are the two economic plans going to be . There are somes there are some parts of some speech they couldve been written by clintons writers. Clinton, she believes the unappointed rate is a real number. This is not a left versus right divide. Is the Unemployment Rate a hoax . This is what trump said yesterday. One campaign is playing with real numbers and policy but is playing politicssave a sinking ship. . Nigel, does your view on the United States change depending on which president we end up having . Nigel we have reservations about the trouble policies. Where the question on what is rhetoric and what is real. Wilson to have a similar view. Were waiting to see. Inherently, the u. S. Is a dynamic place. Attitude butcando has structural issues. Speaking about inequality which is prevalent right across economies at the moment. It is causing real problems. There is more a political paradigm which is more addressing the key problems of all of the countries, hence this huge amount of political unrest we are seeing across all of europe and across america. Guy is a Big Government Good Government . Is no government bad government . Because which could end up in the United States is the house and senate doing one thing, the president doing another. Whether weu sit on need more government or Less Government . Theres been such theres been such political disarray to the obama administration. People in the u. S. Getting to do things. All economies out of china are working with the the cando attitude in america they are really good doers. Despite often the political problems because of the system in america. , very briefly, the 13 point disparaging between Hillary Clinton and donald trump seems to be showing at some of the polls. Does that close on down now . I think we will see not so wider margin. Coming up in the debates. One is the convention which did not work and it was a disaster for him to the other is the abates where he will be at disadvantage against a much more seasoned competitor. Us. Brian klaas joining nigel wilson, ceo of legal and general thank you for sharing so much of your time this morning. That is it for on the move. Coming up, the pulse with francine lacqua. This is bloomberg. [ hip hop beat throughout ] [ fans cheering ] olympics 2016, let me get you on my level. So you never miss a moment, miss a minute, miss a medal. Why settle when you can have it all . Soccer to wrestling. Track and field to basketball. Fencing to cycling. Diving to balance beam. All you have to say is, show me, and boom its on the screen. From the bottom of the mat, to the couch where you at . Show me the latest medal count . Xfinitys where its at. Welcome to it all. Comcast nbcuniversal is proud to bring you coverage of the rio olympic games. Francine i prefer to learn as we go. U. K. S Ian Mccafferty tenyear yields dropped to a record as the bank of england qe trump goes oldschool. The republican nominee which is tax cuts and to return the u. S. Economy to precrisis days. The rbis governor holds rates steady before septembers departure and where live in mumbai to break down the latest. Francine welcome to the pulse. Live from the birds european