From our headquarters in new york. In london, Caroline Hyde. And most difficult day yesterday. What have you seen on the streets of london . Was there increased security . It has been the airlines most affected. The tube stations is where we will see the most security. We are starting to see green on the screen when it comes to stocks. The pound continues to feel the effects of the brexit concern due to the crisis. Tom we will cover the brexit move. Spend so much on our time with russells. Belgium is hunting down those who carried out the worst terror attack in the countrys history. Hours after bombs kill 31 people at the Brussels Airport in a subway station, they rated homes in the suburbs. They found an Islamic State flag and a nail bomb. Theyre looking for one of the men seen pushing baggage carts at the airport. The other two were brothers at the airport. London went into lockdown. The airport will remain closed. Other transportation has started to reopen. The brussels attacks added a political problem for David Cameron and Angela Merkel. Cameron is pushing the u. K. To stay in the European Union. Opponents are arguing that staying puts the u. K. More at risk. In germany, if Political Party opposed to the open door policy for refugees warned of the dangers of postpolitical islam. Donald trump and Hillary Clinton their leads for the president ial nomination. Clinton had a decisive victory in arizona. Bernie sanders wins in utah and iowa. One all 58p delegates in arizona. Ted cruz is the winner in utah. Today, the with all due respect team speaks with donald trump at 5 00 p. M. In new york and 5 00 a. M. And hong kong. President obama is in argentina. Toarrived after a visit cuba. It is the First American president visit there since 1997. That the wants to show u. S. And argentina are on better terms. Global news, 24hours a day, powered by our 2400 journalists, in 150 news outlets around the world. It is remarkable to have a president visiting cuba. Resident went to the president went to the baseball game. At equities bonds, currencies, commodities. 41. 17. An better than good equity market. 14. 17. Jason trennert will join us in our next hour. Sterling, 141. 65. Adjusted off of what we saw in brussels. Caroline i looking at u. K. Data. Percent on the yield. The biggest move we have seen in twoweeks. We saw them come slightly down amid all of the risk aversion. The vix is coming down 4 . Switzerland has been an out performer. Trading up 62 points. The credit squeeze coming off of its highs, still up. And investors like the fact that we are seeing another 2000 jobs to go. Nextin conversation in the hour. They quickly, sterling over 40 era. In the late thatcher this is where a lot of people think we are going. Caroline fascinating. We are pushing sterling. Campaign is warnings about how dreadful leaving would be. Tom we now turn to brussels. Caroline we do. We get back to the top story. Terror attacks in brussels. Ryan chilcote joins us from russells. Ryan we are getting interesting details. They say those involved in the attacks were two brothers involved in the suicide attacks. Agency says the police knew about the brothers. They popped up on the books before. Never in connection with terrorism. Always with organized crime. Looking for a third individual. They tweeted a picture of him yesterday, along with two others, pushing baggage carts in the airport. They say that he is still at large. Some of the belgian media are reporting that he may have been an accomplice of Salah Abdelslam , the sole participant of the paris attacks in november that was apprehended on friday. We have the first directly that we are seeing between the horrific attacks in pairs and what took place in brussels. To translate this frankfurt, heathrow. Those airports of honorable today . Is there a believe that they are removed . I think that they are very concerned. We have heard that. The reality is that the bombs that went off at the airport went off in the terminal by the checkin stands. In many airports in almost all of western europe, you can walk into the airport, go up to the stand without going through security. A lot of people are saying there needs to be additional screening at the entrance to the airport. They do that in turkey. They do that in russia. It is not something you see in western europe. Caroline thank you very much. Im pleased to say that we are joined by the cofounder and author. Jonathan timmy. The history of modern france is the book that he recently penned. We are also joined by Stephen Gallo. Thats get this started in terms of a political front. What is necessary in the leaders in the eurozone . Do you suspect solidarity . We have the french Prime Minister talking about how this is a war. We have president hollande saying that this is not only brussels, this is the whole of europe. A lot of people are afraid Something Else like this could happen. What is the state of intelligence coordination across europe . Theres a lot worries about that. Most of the terrorists have been identified killed in paris or brussels, were already known to the police. It is reckoned about one third of the people who went to fight in syria have returned to europe. You have the mystic terrorist networks that are very active. Very much connected. They lead from one to another. They are to stockpile amounts of weapons, explosives, and to move about freely. We will have a lot of conversations going on between intelligence agencies as to how they can step up their game. Tom part of stepping up your game is talking to Jonathan Fenby on europe. In these timesrs of stress. In the new york times, the question raised urgently by the brussels attacks so soon after rocco can be tolerated. There is no easy answer. Today the west is ponderous weight the matter prior to the murderous monadic so the caliphate looks like capitulation. I thought it was a very terse essay by roger. What is the game change you need to see to protect people in the west . It is very difficult. This is the result of conditions in communities in many European Countries which have been growing up for decades. The radicalization and alienation of a very small group links in with wider social dissatisfaction in europe. There is a big social issue to go. That we willessay probably see not just more police on the streets and at the airports and stations, but more crackdowns. Dilemmaemma the hole dilemma on human rights will skew more toward security. Theline lets discuss Credit Suisse executive. He will be here with our own Francine Lacqua for the second hour of surveillance. The stock trade is 1 higher. Ryan chilcote is in brussels. Caroline hyde is in london. Tom keene in new york. We will be joined in the next a person in service to the state department. Earnings beat estimates. That is thanks to the sale of Leather Goods and growing demand in japan. They will raise prices 3. 5 in europe to make up. Warning to historic cuts in the oil industry could lead to future shock. Billions of dollars in spending must be cut because of the plunge and oil prices. The iea calls that in the nottoodistant future. Bigger cuts at Credit Suisse. They caught an additional cut an additional 2000 jobs. Overall, 6000 jobs will be in 2016 as part of the overhaul as Credit Suisse focuses on Wealth Management. Francine lacqua will speak with the Credit SuisseCeo Tidjane Thiam in the next hour. Caroline . Be checking inll on the Market Reaction to what has been a very terrible attack in brussels. Capital markets, Stephen Gallo, is with us. And also Jonathan Fenby remains with us for political discourse. What has been a volatile reaction in terms of the pound. The mostt been significant bellwether in what has happened with the repercussions in brussels. Many are feeling this will build brexit discourse in the united kingdom. We had Boris Johnson to talk about the economic benefits of leaving the eu. Overdone, or is this risk fairly valued . Is not overdone, even though positions is not what i would call marginally stretched to the short side in sterling. It could go further. Since the end of 2011, there has been 350 alien pounds of cumulative word folio investment into the u. K. Is hedged. 20 some of it probably already has been. Even if 15 or 20 is hedged over threemonths, a could have effect onul down sterling. The u. K. Economy is persistently debt. In the runup to the brexit, the pound will struggle. Our view is once the exit is fully priced or if it occurs, the eurosterling, you want to sell 83 or 84 in euro sterling. It looks like the boe will be proactive to deal with the ramifications in the short run of the brexit, u. K. Assets will look good to foreign investors. Tom we could spend an hour on this conversation. Tos chart spans 40years 1971. The brexit assumes depreciation. Mr. Stephen gallo is looking for a 15 depreciation roughly. I do not want to pin you down. What does that mean for the average person in the united of 135, 125ou see sterling. If you take it back to factor, what does it mean . Moreen you want to look from the perspective of foreign investors. It is likely the brexit could impact demand negatively in the u. K. The balance of payments in the current deficit should come in, especially is a cumulative evaluation and sterling is 15 to 20 . , during the best of times, when Global Financial markets are risk on, Global Growth is doing well, the u. K. Is doing well, the pound tends to depreciate. This is a break with fundamentals. This should not happen, a persistent pound appreciation should not happen if the deficit. S widening in the 135 range, u. K. Assets look cheap. The ecb has been and it easing cycle for more than a year. The boe has been on hold for a longer time. U. K. Assets are not priced for more boe easing. Upside potential in u. K. Assets is that is the approach the bank of england takes. Tom Stephen Gallo with us as markets. Michael mckee and i will sit the arguably most nuanced of our fed president s. A new view on Janet Yellens fed. London inthe mayor of front of the Treasury Select Committee in the house of commons led by the chairman terry. They are in discussion with Boris Johnson about why he backs the brexit. A number of leading bankers apparently back the brexit, the cause for britain to leave the European Union. It will last twohours. You can see the chairman of the select committee giving a grilling to Boris Johnson. The british pound is down 3 10 of a percent. Vonnie in the u. S. , donald trump and Hillary Clinton declared primary victories in arizona. Here is with account stands. Donald trump, 700 39. Ted cruz, 459. John kasich, one hundred 43. Hillary clinton has a 681. Bernie sanders, 927. Went to ted cruz. Sitting down for a oneonone with donald trump. I want to go to Jonathan Fenby. Not an acrosstheboard sweep, but it looks like it will be a trump clinton race. Will Hillary Clinton play the geopolitics card following events like we saw yesterday . ,tephen clinton obviously after the elections, she was making the point that you need a firm leader. You also need a calm later. I think that she will, increasingly, paint donald trump as someone who is dangerous to put in charge of national and international affairs. Reaction thatate i read in the media this morning, that the attack could have been prevented if the terror suspect had been tortured to give information that is the kind of thing that could make european terrorism alive issue in the u. S. Election. Like ift would it be donald trump traveled to berlin to give a speech now . Jonathan i think the protests in the United States would be nothing compared to what you would see in berlin, or anywhere else in europe. Me sixwould have asked months ago, anyone in london, they wouldve said donald trump is a passing star. He will crash to earth. The possibility of him being a candidate or getting to the white house spooks a lot of people outside of the u. S. Tom we look forward to your update in your next book on the republic of france. I think Foreign Policy will come up in a conversation with mr. Trump. Look for that at 5 00 p. M. It could not have come at a better time. Look forward to wisconsin, the bellwether. I believe that it is april 5. We look at markets in the next hour. Jason trennert will join us. We will also bring a conversation on brussels in belgium. Welcome back. Im Caroline Hyde with tom keene for surveillance. Negative. Es are lets get to our first word news with vonnie quinn. Vonnie police in belgium have been searching for two brothers who carried out the suicide coming attack. They were seen in video taken by an airport surveillance video. Theyre trying to find the third man in the video. Incial forces raided homes the suburbs finding a nail bomb and an Islamic State flag. The attacks killed at least 31 people. It was a big night for donald trump and Hillary Clinton as they got closer to winning the nomination for president. 58ald trump wins all delegates for the arizona primary. Ted cruz lost ground to trump. Bernie sanders wins in utah and idaho. Clinton maintains a commanding lead. More details about the fbis tactic in the case involving apple and the terrorists iphone. An unidentified third party has a possible way to get into the phone. Not last long. The fbi might be obligated to give apple the details so they can fix the security cap. Security gap. Global news, 24hours a day, powered by our 2400 journalists, in 150 news bureaus around the world. I am vonnie quinn. Tom we will look at Credit Suisse. France a look while has an important interview with the chief executive officer. Stephen gallo has thoughtfully written on china. Chart. Gallo knows his the longterm on the chinese move of appreciation and the assumption by nearly all that china must depreciate the. Enminbi where will it be in one year or five years . Around we see the peak 665. Modest to moderate weakness. Is in a wrenching social and economic adjustment. One of the key aspects of the adjustment is deleveraging. That will constrain domestic output. It will constrain domestic relative prices. Policy will remain loose as the deleveraging continues. Rmb. Will weigh on the we think the experience in 2015 large oneoffy devaluations of the rmb was a failure. That is in no ones interest for that to happen. Caroline oh we see volatility constrained . We have been talking about it having its effects on the offshore as well as on the onshore. To some of relatives the other currencies, it will remain low. Implied volatilitys have fallen off quite a year since the quite a bit since the beginning of the year. Given the fact that trump will probably secure the nomination on the republican side, long dollar players on a 69month basis look attractive. Thehe get proc to revalue rmb . There is a risk that he could. There is a risk that long volatile trades look attractive. The shock that wayside yesterday, the United States dollar comes shortly. I do not mean this in terms of a market call, but almost a philosophy. Is there a global slight to quality that you link with shocks like what we saw in brussels . Risk, thehe brexit brussels events, from a political and Economic Perspective are dollar positive. They weigh on the euro and pound to a degree. We have changed our view and moderated our view on dollar strength. We do not look for the january peak in the broad tradeweighted dollar to be exceeded. That there saying is eurodollar, even with the fed hiking twice in 2016, the eurodollar does not go below 1. 10, which is bold. What we are seeing at the moment is the deterioration in the twin deficits for the u. S. Colliding premium intical risk the dollar. The risk premium has come earlier than we anticipated, but they are nonetheless. If you want read fully philosophically, the Global Economy in terms of debt isenominated deleveraging. Central banks are easing policy outside of the United States. We do not see the dollar all enough of the cliff unless the said raises rates. Chinane you talked about , what do you think would be the consequences . Stephen i did not say it was a failure. I said that china is in a significant wrenching social and which willjustment continue for years. The economic implications of that adjustment in the short run means further deleveraging. That will weigh on domestic output, domestic prices, it will in an easing phase which will way on the rmb. Tom you heard quite a statement of the dollar peaking recently, two months ago, in january. Across bloomberg media, Michael Mckee and myself to sit down with James Bullard of the st. Louis fed. The nuances of Monetary Policy with James Bullard. Surveillance. Caroline welcome back. I am Caroline Hyde in london with tom keene in new york. Credit suisse is announcing it will eliminate 2000 jobs. It will deepen the cuts in the Investment Bank. The stock trading has dropped 4 10 of a percent. Announced an overhaul of the lender. Francine lacqua joins us at a very exclusive interview. What are the key question to will ask . It is not every day you can speak to the ceo as soon as he has announced the second leg of his restructuring. We have to thank Tidjane Thiam. He announced the strategy five months ago. Joby, there are 2000 extra cuts. Fat. S to trim more you must of been disappointed with the trading revenue. The questions are the impact on profit in the First Quarter. Been speaking has to analysts and is probably on the Conference Call with the media. Then you will join us for an exclusive interview. Then, of course, what happens to the investment unit. Do they continue trying to trim around the edges, or do they have to be more harsh on the revenue . Caroline where do you think they will follow in the . Ootsteps the ubs has lead is it about Management Strategy . Francine it is a little bit. They are more theyre keeping more fixed income. Ubs charted the product started the process there for years ago. They were in a better place economically come the world felt safer. I do not know if they are using the same model. Ownit suisse wanted their model, keeping to private individuals. They want to be a onestop shop. Suisse hascredit said the billionaires in asia to not always have the cash flow they need. They want to be sure the Investment Bank linens for them to do more investment. And at the same time, manages their money. A man whothis is knows a thing or two about expansion in asia. We look forward to that fascinating conversation with Tidjane Thiam. Bank analyst Christopher Wheeler will be digging into everything in the banking area. Wolfango piccoli will join us. Suisse done . T have they done what is necessary. All, he laid out a detailed strategy as you saw in october. It was not taken well. We know that he focused on switzerland, the rest is confusing. It has to get to the second stage. The fact that he was not as clear as people would like, and the markets have been dismal in the first part of the year. That has woken him up to how much p has. Tom all over the buzz that i get is within the first 60 days of the year, it has been brutal. This is not a cyclical restructuring. Out in two years to five years. To they have a number they want to get to . You have to look at the Investment Bank. They are shedding 50 . That is a big number. Ive been talking to Morgan Stanley and Goldman Sachs. They generally should 5 . I think 15 is a big number. To go further . Like Morgan Stanley, they will have to move more to the model that ubs has used to successfully. A governments rating that focuses on equities. Move those uric titanic, with great respect, after you get through that you have to merge. Who do they merge with . You keep asking me about European Bank mergers. The regulators are not keen on them. The question is, do we see these guys slinking back into a comfortable Wealth Management is this . The numbers in the first months of the year have been strong. The better the wealth manager does, the more difficult to justify an Investment Bank. Tom they can be bought by an american bank. Credit, Morgan Stanley su isse, it works, right . It is intriguing. The fed may take a different view. People see Wealth Management as a low risk business. Caroline how much more brutal First Quarter get . How many more banks will claim that their revenue is down and will have to preannounce . Market. Of it is in the i have been downgrading my Goldman Sachs and Morgan Stanley firstquarter numbers i 60 . A 40 decline. Theyre taking hits on their portfolios in asia. I think that the market has its head around that this is a bad quarter. The reporting is different in europe, meaning some of the European Banks will have to come out and say some things that were said last week. Watcher ofe a great the city. Forthe dialogue change barclays and lloyds yesterday with at the weaker sterling, the new resumption of a brexit dialogue off of what we saw in brussels . Toi think what is certain all of the uncertainty and volatility has been very difficult to deal with. They are not sure what issue they will go for next. The u. S. Banks are lucky enough to have plenty of things to deal with, some of the issues are off the table. The brexit is a big focus, bike the scottish referendum. The banks are coming back from it, and at some stage will have to address it. Operations in scotland did not say what they would do into a look like it would go in favor of a yes. A terrific briefing. We will continue our discussion on Global Banking and printing look law with the chief executive officer, Tidjane Thiam of Credit Suisse. Look for that in our next hour. This is bloomberg surveillance. Caroline welcome back. Im Caroline Hyde with tom keene. Day 2 after the tragedy in brussels. The brexit is still high on the agenda. Vonnie shares of nike are following in the free market. They are concerned. Nike cave a forecast that messed estimates. Sales are hurting overseas. Under armour is putting pressure on nike and the United States. Loans fromore clients in the diamond business. The british bank has loaned 2 billion to diamond processors. They plan to get pavement insurance or provide 100 collateral. Diamond cutters have been hurt by slowing demand in china. After setbacks, the expansion of the panama can will open by the end of june. Will shiftnama canal trade routes. Twoe will be able to reach weeks faster. I will have to deliver a package to see if that is true. We will continue our conversation. This is on the tragedy in brussels. We will bring it to the politics of Boris Johnson, who is speaking on the brexit. Wolfgang piccolo, a terrific perspective, linking the two together. You predicted another terrorist attack within your research notes. The vulnerability of europe. What did you observe yesterday during your study of terror in europe . What was the feature that you observed . Wolfango i do not think there was anything unique. I think it was more of the same that we are dealing with homegrown cells. Politicianstwing calling for broader controls. The reality is that the individuals involved in the attacks yesterday were known to the police, former criminals,. Nd they were belgian the same for the operatives in paris. We are dealing with homegrown cells. Belgium is struggling with this. Government system is not particularly effective. They are overwhelmed. If you look at the european level, there is a huge problem. Id like data. I like data. The main agency for the European Union, 100 million euros. They lowered their counterterrorism unit in uniform. There is posted deal with issues smuggling and outlaw motorcycle sent gangs. Is a cute infront the case of belgium and most likely france. There is a problem at a more macro eu level. And when you look at paris, brussels, is there a will to change . Will we see in the coming weeks rue will to be blunt europe to become more like the United States . Wolfango i think we will see more of the same. A call for solidarity, defiance, to protect the freedoms we like and enjoy. In terms of relinquishing sovereignty to an entity that can take the lead and loose the counterterrorism effort, i do not think there is the political will. We will see incremental measures. They may be felt border controls beef up order controls. Some disruption to travel, but i am afraid we will not see anything more meaningful coming from the european leaders at this stage. Focused on turkey. Last week it was about the agreement reached between the eu and turkey. How much should the eu have been there to support the atrocity in turkey, and how will we stop crisis continuing to build and work with neighbors . Wolfango it is interesting that this morning a turkish progovernment paper accused belgium of being a failed state. That tells you the attitude of the turks looking for this. They have been suffering terrorism for a long time. Certainly, they are puzzled about all of this. Interesting, attacks by isis in turkey they were targeted in specific groups. Never claimed. In europe, would we have seen by isis is attacks against a variety of individuals that are claimed. There are different methods employed by isis in europe. Tom thank you. Vonnie quinn has breaking news. Good news for authorities. Vonnie this is a local belgium report belgian report. The third attacker has been arrested. Was captured,ui according to local media in brussels. Good news foress, the belgium authorities. That are people catching up with the story, there is a photo of three guys. Two were suicide bombers, which have been identified. The thirdlooking for attacker. It was centered around a gentleman arrested a few days ago involving paris. Sole survivor was arrested on friday. Now the third attacker has been arrested. Tom we will go to Ryan Chilcote as the top of at the top of the hour. Then Jason Trennert of strategists research st rategas research. An ambassador working with the president S State Department and secretary clinton. In our next hour. We will go to brussels as that continues forward p futures are flat. We are looking at sterling. Stay with us. Tom this morning, suicide bombers are identified. Moments ago in brussels, a third attacker is arrested. After paris and brussels, how can we attain how can we contain terror . In this hour, Francine Lacqua in conversation with a beleaguered chief executive officer. Boris johnson addresses the treasury committee. From new york, bloomberg surveillance. It is wednesday, march 23. Caroline hyde, the news right now is extraordinary, but it means that brussels seems to be a more rapid story than what we saw in paris only four months ago. Beenine and the fight has to move quickly to be able to shut down any particular cells working throughout, managing to capture the previous bombers of paris last week. They lost the initial stages of the race with what happened yesterday in brussels yesterday, see thatt least we they have managed to get hold of them. Tom Robert Hormats will be with us later in the hour. Heres vonnie quinn with news. Vonnie there is a new suspect on the brussels bombing at has been captured. He is one of the three men seen on closed circuit tv pushing baggage through the airport. Notsels went into lockdown long after the attacks. The airport will remain closed today. Public transportation has reopened. That is the latest global news, 24 hours a day. Caroline . Caroline lets get back to that key story, the terror attacks in brussels. Clearly, they have hunted and found some of these key perpetrators of the terrible attacks yesterday. Thats right, caroline. In the last several minutes, the police saying they have caught the mastermind of these attacks. Were behind the two attacks in brussels. This is according to media reports here in brussels. The belgian press has been speculating that this individual could have been involved. He is thought to have been an abdeslam, of salah who was the last participant that had not been abducted or who had not been apprehended by the police, from the paris attacks. So there were already interested in him because of those horrific attacks in paris. They appear to have caught him and they say he was the mastermind of the deadly attacks in brussels. Ryan, i look at what we see. The bottom line is a lot of criticism for belgian authorities. How have they adjusted in the last 24 hours . Look, this is a difficult one for them because when you immediatelyunt following the paris attacks, they pretty much locked down brussels for about five days. There was a lot of criticism. That was heavyhanded. Now they have been trying to find the right balance, and we have seen that, where lots of the city is perfectly peaceful, and in certain parts like where i am, next to where one of the attacks was, there is a Serious Police presence. Tom we have headlines that prosecutors in belgium will hold a press conference in a number of hours. With your expertise on russia, i want to go to an oped in new york. How does the west bring russia into this debate on getting at terrorism . You have been to moscow one million times. Can we bring russia into the debate . The russians would love to join that debate. That is Vladimir Putins favorite suspect. He is dying to have that conversation with Angela Merkel, and the other european leaders. The russian line is that democracy is great when it comes to places like syria, but much more important in syria, in iraq, in other places like the middle east, is to have one strong leader that can hold the country together. West, the United States, for all the terrorism we are seeing now, saying it was created by the u. S. As it was seeking to establish democracy in places like afghanistan and iraq. The byproduct of that was chaos. That is why we have terrorism. The russians are perfectly happy to give their prescription for how to deal with terrorism. So far the west has not been interested in taking it. Will be prosecutors holding a press conference in brussels in two hours time, at 8 00 a. M. Eastern time. Are they done, or does the hunt continued . We heard so many sirens wailing behind you. Ryan i doubt that. There will be concerned that there could be other wouldbe terrorists out there. Two ofice believe that the participants in the attacks were suicide bombers and were brothers, which is interesting because when you think about it, there have been a lot of brothers participating in deadly terrorist attacks in western europe recently. Very interesting and chilling pattern. Hey will want to know more this individual, like i was saying, seems to have had some kind of role in the paris attacks. We have not heard a lot about that, so people will be wondering who else is out there who might be connected with this attack or the paris attacks that we did not know about that could still be operating and planning more attacks. Caroline Ryan Chilcote live on the ground for us in brussels. The press conference will begin with the prosecutors in brussels after they have managed to find that latest particular person they have been searching for. We can go live to Francine Lacqua, who is standing by with an important guests. Francine . Francine thank you so much. We are very excited that were speaking with him. Thank you so much for giving your time to bloomberg. Give us a sense of why we had an update on further job losses, further restructuring. Why the need to go further today . Jane if you look at the strategy, we announced in october a costcutting program, and the reciting of Global Markets. In essence, what we will announce today is pushing the results further and shrinking Global Markets more. And really that is largely a iton to what happens was the worst january ever. Reversed the that conditions, and everything that has been structural changes, also in regulations, which means certain elements of our business , where there is now a stringent stress test from the fed, we will structurally have we we use that in difficult markets and low revenue and take it down more significantly. Within the organization, one of the benefits i expected was better accountability. That it haslear made some of the underlying problems in the Global Market is this what the shareholders want . the problem is timing. We developed a strategy last summer, and with world trade since then. Night and day since january, february, march, to have a proper plan, and we are happy to present it to the market. We still say from presented some strong numbers today. What we have had to do is an assessment of a business in new market conditions. You said you were surprised about your a liquid. When did you find out about them . In january. It was not clear to me and to many people inside. And that is why i said we need a cultural change. There have been consequences abound that there have been consequences around that. Francine are the people who try to withhold information . Tidjane if your costs are too high and you are not taking them problems with Investment Banking has been that people are trying to generate revenue at all costs. Book, andighyielding i think it was generating a lot of revenue, so people were reluctant to reduce it because they would expose the cost problems. There was no transparency around that. And withen taken down, a reunderstanding of and you are confident that this will not happen again . Tidjane we have good processes in place to ensure that it will never happen again. I can never say never. I have a good level of confidence that we now understand what is going on better and we have a better situation in place. Francine had you known about these illiquid conditions back in october tidjane we could have dealt with it immediately. Francine so the strategy would not have been necessarily stronger but deeper in cuts . Tidjane it would have been different. We have explained today that we have fundamentally reduced volatility of earnings by 50 . Q4have probably generated a we could probably have generated a q4 that was less stressed. I am a very how can i say this riskaverse. If we hadt us, but not done what we had done, the mongers the numbers would be much worse. Were the losses today because of the restructuring costs . Tidjane yes, the restructuring costs. We are cutting deeper. The divisions before restructuring are profitable. Asia, switzerland are profitable. Market. Ss in global i think overall we were profitable, but once we take the restructuring project the it iscturing charges due to the investment we are making right now. Tidjane can you up francine can you update us on dividend . Tidjane we were keeping it in place and then we would move it. We can generate capital in cash. The deep restructuring has to succeed. Francine in terms of asset sales, do you have a sense of what, to whom, and when . What, i do not know who. It is about four or five assets. We are not about to tell when you sell, you do not want to tell markets that you are selling. Small businesses orbits of businesses that are not really connected, but we still have that report for you. Youcine how confident are that this is it for the moment . Tidjane we are confident, but this is a very dislocated , andmy, dislocated market it makes me say that all the more after that. Tidjane thiam, thank you for this exclusive interview. Understanding how the ceo thinks. Tom, back to you in the studio. Tom Francine Lacqua, thank you so much. Thered the word global about 14 times. We are not only looking at the equity markets, but we have a student of the lower nominal gdp world. How do you link the dampening of the Global Economy to the struggles that we see with any number of banks . Jason first of all, i think negative Interest Rates are going to turn out to be seen as major policy error in the 21st century. Tom not helping the banks, not helping credit. Look, the velocity of money, despite the fact that the velocity money has continued to go down. In many ways, i think the monetary stimulus has been sterilized by regulatory policy. It is also, i would argue that the policies, other policies in general are not making people want to take risks. Tom i want to go over to the chart. The buying is in the slope right now. This is jpmorgan a credit squeeze at the beginning of the crisis. Clearly the vector here is not good for these European Banks. This divide is unspeakable right now. But you are cutting to the bone 12 , 15 . Chris wheeler says labor. This is a structural shift. Jason on the financial services, we are a small investmentocusing on advisors and Institutional Investors, but there have been real changes. In many ways, the entire business is shrinking for now. I do think it is not over. But the business is more cyclical. I think people find the business more cyclical than it was in the past. For a long time, it seemed like it was secular growth, and now it is turning out to be cyclica. Caroline jason, caroline in london. You talk about the risk reward positiveg particularly for stocks. When will it be more positive . Jason it is a good question. Reusing 120 for the s p 500 operating earnings in 176, and then we are using as a multiple for the s p 500 this year. But in theigh, context of low Interest Rates and low inflation, our economy models would suggest you get something quite a bit higher than that. Models wouldetric suggest you get something quite a bit higher than that. To answer your question, i would 18. 50mething more in the range. Given some of the macro headwinds we are seeing, i do not see a big tailwind from earnings in aggregate. I do think there are certain likers, particularly we technology a little bit because it has a lot of cash. I like consumer discretionary. I would be careful on the banks. That is one thing, given all the things we are saying before, given the negative interestrate in japan and europe, it puts pressure in terms of net interest margins on banks across the world. There was only 2050 on the s p 500. What is to say that those arguments hold true now suddenly . I the biggest change was listening to the gentleman from Credit Suisse. A lot of these changes, at least in 2016, started if you look at onn the fed tightened november 16. That is where things fell apart for financials and for a lot of the Financial Markets in general. Too muchou could make of a stretch you could also say when the fed stopped increasing the size of its balance sheet, a lot of the risk on trades, stocks stopped working. There is a fundamental change. People have been talking about the dispersion of monetary policies around the world. We are pushingow on a thread. We need other good policies on the physical side, the regulatory side, to get the economy growing again. Tom Jason Trennert with us with strategas research. We will look at the toolbox of the st. Louis fed later this morning. Michael mckee and myself with James Bullard of the st. Louis fed. In each conversation, he gives terrific nuance to our Federal Reserve system. This is bloomberg surveillance. Vonnie breaking news in the last few minutes. Police in brussels captured the main suspect who had still been on the run following the worst terror attack in belgium. He is a 24yearold that was in the cctv footage at the airport. The other two worthy brothers the other two were the brothers. Again, this is apparently one of the masterminds, one of the bomb builders. Old,sues old 24 years caught by police in brussels. Tom Robert Hormats joins us, with kissinger associates, moe recently working with more recently working with secretary clinton. 3 00 a. M. His news at hour. Will your the court will europe become more like america . Themats knows question was raised most urgently by brussels so soon r paris, hormats, can europe change and be more like your state department in america . Bob it can. I think europe is going to have to take a much more assertive and cooperative view amongst themselves. They have to share intelligence, gets the military going in a much more focused way. They will have to work with the United States on a great deal of intelligence activity that perhaps they have not done as as the french and the british have gotten a as the french and the british have, and they will also be faced with more of these. It will only intensify. Tom you have written about the price of liberty. Is the price that we have to give up liberties versus some thugs with islamic connection . Bob i think there is always a , certainly during world war ii and others where you have to give up a certain amount of access to information for government and Security Officials that you probably would not have to give up in normal circumstances. You obviously cannot compromise the fundamentals of liberty, but the Intelligence Services need more information in order to anticipate these kinds of actions and go after them. You have to do it in a balanced way. It cannot be wholesale or a ourl capitulation of constitution, which is critical to our own survival as a country. You need really good intelligence and have to have more information. Vonnie who is the institution that is responsible for that . All the nations had their own emergency meetings yesterday, but who does that . That is the problem. In europe you do not have a european fbi. You need Something Like that. Tom lets come back and continue this discussion. I particularly want to speak aboutmbassador hormats the situation in russia. We will continue with Robert Hormats and Jason Trennert. From london, from new york, this is bloomberg surveillance. Oh, hi micky dolenz of the monkees here, getting ready to host the flower power cruise. announcer were taking the love generation to the high seas and reliving the 60s. Well celebrate that unbelievable era with the music that made it so special. Therell be over 40 Live Performances featuring eric burdon the animals, micky dolenz, the monkees lead singer and cruise host, the 5th dimension, the lovin spoonful, rare earth, spencer davis, three dog night, and many more imagine enjoying all that great music on the fabulous celebrity summit, leaving Fort Lauderdale and making ports of call in jamaica and the bahamas. Youll be back in the days of bellbottoms, peace signs, and so much more, with special theme parties and 20 funfilled celebrity interactive events. Cabins are filling up fast, so come on, relive the era you remember so well. The flower power cruise, february 27th, 2017. Let your freak flag fly. Dont miss the grooviest trip at sea. Tom we welcome all of you, worldwide. Caroline hyde in london. Im tom keene in new york. With an lacqua important interview moments ago with the chief executive officer of credit suites. Right now, to bring you uptodate on the news in brussels, here is vonnie quinn. Vonnie authorities have caught the main suspect in the case go according to belgian media. He was the third man seen in airport surveillance video. The other two, the brothers, carried out the bombings. Overnight, special forces raided homes in the belgian suburbs and found another bomb, chemical products, and is Islamic State flag. 35 people were killed in the attacks at the airport and the subway station. The brussels attacks add to the political problems for british Prime MinisterAngela Merkel for british Prime MinisterDavid Cameron and german chancellor Angela Merkel. In germany, a new Political Party opposed to merkels opendoor policy for refugees warned of the dangers of political islam. Ports around the ruler of airports around the world boosted security. The department of Homeland Security said there were no specific threats. More Law Enforcement have been assigned to airports, train stations, and ports. Global news 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world, i am vonnie quinn. Caroline . Caroline thank you very much indeed. Lets turn to our top story. A suspect has been captured in brussels by security forces. Lets get straight out to Ryan Chilcote, joining us live from brussels. Belgium has been caught up in the main issue of all of this. And have managed to target restrain the main suspect to survive the attacks. Do we know anything further . We know there is a press conference coming up in an hour or so. Ryan this is big. Bloomberg has confirmed that the Belgian Police have apprehended what they are calling the mastermind of this attack in brussels. At least 31 people were killed here in those attacks. It looked devastating. He is 24 years old. What is important is, he is linked to the attacks in paris. The police have been looking for him for a good period of time. In 2013 he went to syria. He is thought to have been associate he is thought to have been an associate of salah abdeslam. Now the police are saying they have apprehended him here in brussels just within the last few hours, really bringing a awfultrong link to this terrorist attack that we saw here in brussels just yesterday, and the devastating attack we saw in paris in november. Ryan, when you look at all of this and the idea of moving forward, what would you expect to see from the belgian government . What will change from brussels and for belgium . Ryan i think one of the things we are going to see is more security. They have never had a terrorist , and now it is a part of life here. Laxlythinking about how security is. That will change at the airport. There will be more checks. There will be more money spent on intelligence. We have had a lot of e. U. Officials calling for corroboration for Cooperation Amongst themselves. That you haveis almost like two People Living in verycity, the sidebyside different worldviews. Some people think that what happened yesterday was actually ok in the city. Obviously the vast majority do not. Tom Ryan Chilcote, thank you so much, from brussels. With us is Robert Hormats, associate it for years with Tufts University and Fletcher School. His Public Service includes the nixon administration. On china. Maybe he will help open relations with with russia. Here is a controversial oped from the new york times. Tom bob hormats, that is incendiary language. Bob he has hit on a very important point. That is, europe has a great deal to fear from isis, as we have seen yesterday. The United States has not been directly affected. There have been a couple of incidents but nothing large as this. The russians have real concerns with the chechens. They are extremely concerned about isis and isislike groups, moving into southern russia. I would add one other country. China is extremely worried about western china. There is a lot of concern in st. John province in singin province. I believe bob hormats if you would like to correct me, you can the political policy in the United States is as surreal as i have ever seen it. What is your prescription for the next president to engage with russia in a proper american manner . Bob i think you have to identify the areas where the United States and russia agree fundamentally, and for the russians, terrorism is a real fear. We do not pay as much attention to it, but they do. And it is a world war has a lot of characteristics, because it is being fought all europe, in europe, United States, and the middle east you will have to mobilize a lot of countries who fear that this will metastasize and destabilize parts of their countries. So you need to mobilize a lot of countries, even if we disagree with the russians on a lot of issues which we do and certainly i do. A lot of things that are negative for americas interest. But with the terrorism issue, he does fear for a lot of things with russia. I do not think necessarily on syria we have been working that well together, but it may be there is a chance there. I am not pollyanna about it. I do not think we will achieve miracles, but on certain things come with certain cooperation, particularly when they are worried about lethal force being used as it has been by these radical islamic groups, we have seen it in russia. Caroline give me a sense of your optimism, or lack thereof, of the European Union working together, and the brexit calls with all of the recent comings between theparked e. U. Dismantling itself, as well as the eurozone pulling together. Bob the e. U. Really has to Work Together and share intelligence. Vonnie made the point ol itabout euro p is an important part of cooperation in this area. Europe has to Work Together a lot more, sharing intelligence across the board and giving one group the capability of doing the rest across the border. Europe is going to have to do it in a much more assertive way, and britain, drawing the answer that leaving europe or at least some brits do it exact it is exactly the wrong answer. They are vulnerable, too. Tom jason, please comment. Jason on that last point, the with alli would ask due respect for you as a part of the establishment what we are seeing politically around the against whatcklash people are calling the political elites, that there are the people on the ground and then there are the people who make decisions in brussels and washington and the rest of it. Dos i am asking you you think the attacks yesterday increase the chances of a brexit . Bob unfortunately, they do, because it brings out nationalism and xenophobia and antiimmigration in various parts of the world. It strengthens the hands of the populist rightwing parties in europe who say no more for foreigners into europe, or into our countries in europe. It makes them feel more nationalistic and makes them look internally rather than for greater degrees of cooperation. It is the instinctive reaction that some people have, the more morehobia, the being xenophobic. Caroline we have a great conversation coming up. We have an interview with an ecb executive with questions on exit on brexit. Lets ask her those questions after the break. Away from brussels and some of the work in europe as well. Jason trennert is with us, who a number of months ago took out futures donald trump. You are not supporting him. Jason last august i compared him to momentum stock. Ipo in june. I wrote it last august and said it looked a lot of like a lot like stocks i have lost money on over the years. Week, 60 urvey last 66 of Institutional Investors to Hillary Clinton would be president. My only my opinion, hillary is going up 32, and donald trump is going up 31. I think it is much closer to even money. I think it is much closer than that. Talking with bob before, we asked the question about brexit. That is another thing where people are assigning very long odds. Tom says that voters have more confidence in hillary when it comes to a crisis. Donald trump every time we have a problem in the world, i do better you have seen that. National security, a problem, i go up because people view me as much stronger. I think people feel i am much more competent. Vonnie you can see all of that interview later today. Ith all due respect is it true, jason . Jason empirically, it has been true. You can count it a number of times for a variety of classless statements for all of it, and i think he does better. Tom ambassador, one of the we have learned is that the Fletcher School has remained calm. Whatever anyone things of mr. Trump, he is not the calm candidate. How does that sell abroad . Bob he is not a calm candidate and he is not predictable. Great powers cannot afford to be misunderstood, and leaders of great powers cannot afford to be misunderstood because allies depend on what you say today, and i will be the policy you implement tomorrow. It cannot change all the time. Countries need to rely on the United States, and i have worked with hillary for over four years. Hillary is very reliable, very strong. Tom you worked on both sides of the aisle. Bob yes, i have worked with democratic and republican strategists. I have worked with kissinger, nixon, many others. Tom when the secretary clinton become more assertive about Foreign Policy . Bob she has been assertive on many issues, and i think you will see, if she is elected president , which i hope she will be she is very assertive. I have seen her with vladimir putin, with the leaders of china , and other leaders. She is very assertive, always prepared, and she has consistent positions that she advocates on these major geopolitical issues. Tom bob hormats and Jason Trennert, all of this goes to april 5 in wisconsin. With all due respect, 5 00 p. M. Tonight. Coming up, an important interview on the ecb. Caroline Political Risk is going to be a question that we put to sabine lautenschlaeger. Tom a quick foreignexchange report. , the comments of Prime Minister cameron and this morning clearly a breach of 1. 40. Depreciation in sterling if we were to get to brexit in june. Caroline . Caroline we are hearing from socgen that they see parity on the euro if we see a brexit. We go to frank for now, where we will have a crucial interview with paul gordon joined by the ecb is a can of board member. s Monetary Policy has been abundantly clear, the Interest Rates in the euro area are going to stay low quite a long time. Ecbsupervisory arm of the has been clear that the banks need to get to grips with that and change the model appropriately. Ecb joined now by the supervisory vice chair, sabine lautenschlaeger. Good day to you. This idea of changing business models, it has to happen, but what kind of changes do you foresee . How long do banks have to get there . we had several times already negative Interest Rates, real Interest Rates. If you remember the 1970s and the 1980s. There is a question of what kind of cost can i take out of this system, what kind of different Business Activities can i enhance what about digitalization . How can i cope in this changing environment . It is a challenge, for sure, but it is not something that is not feasible to do. Thrust of is a key the m at the moment. It is going to take years. But you have also tailor made plans for banks to deal with the nonperforming loans. What are some of the Common Elements of that comment how serious is it . Very important issue in the euro area, but not only in the euro area. There are several countries where not all of the banks in these countries they have an increase in npo, nonperforming loan ratio. The work that we are trying to do and trying to get a grip will take years for sure. The banks need to ensure that , that they market can sell on performing alone. They need to ensure that they do have the right staff to do the work. Thehave to look into systems, whether you can change, for example, the way how insolvency frameworks deal with nonperforming loans. You can see this quite clearly in a lot of changes being done in the legal environment, and the timeframe in which nprs were then npls were then worked out. An area of volatility this cocoas. Banks are relying on them. Anything thanks can do to cope with this issue . Sabine first of all, that market is pretty small. Maybe you see it in comparison with all the other capital instruments. Lets keep this a little bit in perspective. Paul this is very important. Sabine when you do see the volatility in prices at the beginning of this year, i am pretty sure we need another 10 ,inutes to list all the reasons not only with regard to the c ocos. We need to have some certainty, and that is why we welcome the information. Paul we have to wrap up. Tom, back to you in the studio. Tom Jason Trennert is with us. The overview of all of this is weak nominal gdp. They are dealing with this in the ecb and in brussels. Jason i just listened to the ecb members comments and i am shaking my head because when all you have is a hammer, everything looks like a nail. But clearly, negative Interest Rates, in my opinion, we are long past the point that we can rely on Monetary Policy to do anything particularly useful. I know negative Interest Rates at this point, despite the fact that we had negative real Interest Rates in the 1970s, that is not a good justification for having negative absolute rates right now. Bob i agree with jason. They have used Monetary Policy, and there is a point of diminishing returns, and we are there, i think. I do not object to their trying, but it will not work very well. Can you link not terrorism directly, but the lethargy that brings to it to austerity in europe, austerity gone wrong . Bob i think you can make the following link, and it is a very up point you are making. That is, the weak Economic Performance in europe, and the high unemployment in europe has a particularly disproportionate adverse impact on minority groups in europe and all over. These people are already not feeling part of Belgian Society or society elsewhere, and where they are unemployed, it makes them even more alienated from their governments and from their countries. That just provides a firm ground a Fertile Ground for these. They are not the most important factor, but one. I would argue that the benefits of disproportionately accrued to the wrong people. They have accrued to people who own Financial Assets and to wealthier people, and they have not really helped out the people bob and savers lose. If you are putting money away. If you are leveraging you are doing very well. Tom thank you so much. Always, thank you as well, and Francine Lacqua, on location with the Credit Suisse executive. Bloomberg to continue on television. Michael mckeon myself will be with James Bullard of the st. Louis fed Michael Mckee and myself will be with James Bullard of the st. Louis fed. This is bloomberg surveillance. A warm welcome to bloomberg go. David west on is off this morning. Our top story, the attacks in brussels yesterday have so far left three people, 30 people dead and 230 injured. In the last hour, they suspect the mastermind has been caught. We pause for a moment of silence. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org]