Very damaging for japan and the entirety of japans manufacturing sector. Michael the imf puts out a sunny growth forecast. Christine lagarde sheds light on the report. While we see the sun shining, we are also seeing those clouds on the horizon. Michael the fomc minutes reveal inflation worries. The fed president as some inside insight. I am really nervous Inflation Expectations are low. We are not trying to address all of the relative price changes that occur in the economy we are trying to get that underlying rate. Michael plus, economists consider the conundrum of tax reform. It has to be base broadening as well. Growth will pay for part of it, but not all of it. You might as well assume unicorns will come deliver packages of money. There is no reason to believe this. There are miracles, sometimes productivity growth picks up. And for reasons we dont always understand, but it happens. Michael it is all straight ahead on bloomberg best. Michael hello and welcome. Im michael mckee. This is bloomberg best this is bloomberg best, your weekly review of Business News, analysis and interviews from Bloomberg Television around the world. Now, president Donald Trumps legislative agenda was going to be a big story this week no matter what, but monday dawned with some unexpected political fireworks. President trump made an interesting choice over the weekend. He can afford to lose only two republican senators if he wants to get tax reform done, and he decided to pick a fight with one of those senators. The president blamed senator bob corker of tennessee for the iran deal, said he was not running for reelection only because he failed to get the president to endorse him, and that he wanted the secretary of state job but he didnt get it. For his part, senator corker compared the Trump Administration to a reality show , said that the white house was an Adult Daycare Center and the president s threats against other countries could put the country on the path to world war iii. Kevin if you play it forward in terms of tax reform, every vote counts, and senator corker, while not the most fiscally conservative member in the upper chamber, his raising the fiscal issue really is in line with what some members of the far right and senate have also been saying, and that poses significant Political Risk for tax reform by the end of the year. President trump also demanding Congress Fund his border wall, saying that will be in exchange for letting dreamers stay in the country. How much more of a distraction will this be . Marty it will be another distraction. Chuck schumer and nancy pelosi said that is a nonstarter. When you look at the polling of when you look at the polling, a vast majority of americans support a clean daca bill that provides protection, and it is going to be laid at the feet of the republicans if it doesnt happen. Vonnie a crucial moment in the crisis in catalonia. The president is set to address lawmakers in barcelona just moments from now. A lot of anticipation in that chamber. Maria were not sure of the wording people use. We are not even sure of the format the parliament might take place. We are not sure if the opposition is going to get a say here. We do know, however, they have a majority in the cabinet and parliament, and if they wanted to enact this law that could create and independent republic with an essentially two days, they have a majority to do it and can get it done. The question is whether puigdemont will use the word unilateral or back out lastminute. Mr. Puigdemont the government is proposing that the Parliament Shall suspend the effectiveness of this declaration of independence in such a way that in forthcoming weeks, we can undertake a dialogue without which there can be no agreement. So we need to open up a time period to have a dialogue with the state of spain. So thats Something Else that should be done today out of responsibility. Mark spain maintaining its ready to seize control of catalonia if the push for independence continues. Prime minister Mariano Rajoy said catalonias efforts to break away from the rest of spain are fraudulent and fruitless. Mr. Rajoy it was a fraudulent referendum in the first of october and cannot go ahead by that amount of people. Maria yesterday the catalonia region president made the symbolic move and said im ready to accept the mandate. For 10 seconds, catalonia was a independent republic and then said ill suspend this for talks. Mariano rajoy brey to Crystal Clear there is nothing to talk about, this is a complete fairy tale and his signal now, im ready to implement article 155. Time is running out and the catalonia president is running out of options. If he backtracks, his division will implode. If he says, im ready to continue with the republic, Mariano Rajoy will implement this article and he is out of government. Scarlet the fed released minutes from the september meeting and showed growing concern in the central bank that low inflation is just more than a passing fancy. Policymakers said another rate hike this year would depend on the strength of the Economic Data the next few months. Carl i think the minutes show that policymakers are taking the inflation backslide a bit more seriously than they were earlier this year, when they were very quick to write it off as transitory and idiosyncratic. Now theyre pondering whether part of that weakness may not be trends,roader global and that means now they are hinging their decisions to hike by near end the hike by yearend on the next couple months of economics data, but also acknowledge that the hurricanes are going to muddle those reports. So theyre in a bit of a complicated position. I think what is interesting here , as we look at the roster of who is going to be at the december meeting, there are four or five doves, which means im not totally sure chair yellen will have the vote count at that meeting for a rate hike. Shery jpmorgan and citigroup kicked off thirdquarter earnings season. Revenue from ficc trading plunged 27 at jp morgan and citigroup saw a 16 yearoveryear decline in revenue from the unit. Charles you did have good top line Revenue Growth this quarter but when you balance out the top line Revenue Growth with a weak capital markets, particularly trading, because Investment Banking was healthy, youre getting literally no Revenue Growth. Maybe 1 2 Revenue Growth. If you look at loan growth year over year for the last 52 weeks, it has dropped from a high single rate of growth to maybe 1. 3 rate of growth. If you look at activity in the trading markets, it continues to be fairly anemic. Alison one positive thing we did get in this quarter is cost control. Both citi and jp morgan coming in very well on that metric, and that is important because as the revenue environment does become uncertain, you want to know the banks are doing what they can in terms of trying to protect the profitability of the firm, the fact that you can bring down costs and become more efficient, obviously that provides more upside as the revenue picture improves. Vonnie bank of america posting its best profit in six years, higher rates helping there. Wells fargo takes a surprise 1 charge for a precrisis mortgage billion billion probe. Gerard many of the metrics we monitor for these large banks came in positive for bank of america, the net interest margin, for example. We also point out that the expense control at bank of america is quite strong, and they continue to focus on reducing expenses to a 53 billion number for next year. The wells numbers, on the other hand, obviously have the onetime charge which we take out, so they came in line with expectations on the bottom line. The Revenue Growth was not as strong as some of the other banks as they continue to work their way through the scandal that theyve been dealing with. Vonnie President Trump has disavowed the Iran Nuclear Deal without yet quitting the multinational accord. Thats very important. He has refused to recertify iran, which he must do every 90 days. He hasnt yet quit the accord. Pres. Trump as ive said many times, the iran deal was one of the worst and most onesided transactions the United States has ever entered into. John we are in limbo now. Essentially. And if you look at the broader geopolitical situation in the middle east, this is adding more uncertainty into the mix we have right now. Again for business, this is not really what people wanted to hear. Certainly they wanted a sense that this massive market, with all of its huge potential, will be opened up again, and it looks like this probably will continue for the next few years. Michael still ahead as we review the week on bloomberg best, conversations with i. M. F. Managing director christine le guard and ubs Ceo Sergio Ermotti , plus fed president s Charles Evans and Eric Rosengren. And up next, more of the weeks top business headlines. Economist Richard Thaler is happy to win the nobel prize but he is not so upbeat about the markets. Richard i dont know about you, but im nervous. Michael this is bloomberg. Michael this is bloomberg best, im michael mckey. Lets continue our global tour of the weeks top business stories. In japan, where a scandal engulfed one of the nations Top Manufacturing companies. Jonathan shares of japans Third Largest steelmaker continue to fall, being absolutely battered. Kobe steel is down 20 over two days. This comes off after kobe steel admitted that their staff falsified data about the strength and durability of some of its products. Enda this is very damaging for japan and damaging for the integrity of japans manufacturing sector. Remember, manufacturing and exports are the bloodline of japans economy, the worlds Third Largest. It comes on the back of other Safety Scandals lately, such as takata air bags. If this spreads overseas, we know kobe is one of the Oldest Companies and supplies some of the biggest automakers like nissan and toyota. If it does emerge that they have been supplying Auto Companies around the world, it would severely backlash onto japans integrity and caused considerable consequences down the road. Shares of kobe steel falling for a second day, down about 15. 7 as of now as the data as the fake data scandal widens. It has now admitted falsifying information about another of its products but insists safety has not been compromised. Iron ore powder was also seen to be, the data was falsified for that, and that was shipped to one customer. Iron ore powder is used in a lot of Machine Tools and auto parts, everything from exhaust and power Steering Systems to camshafts. So were still trying to pin down exactly which customer that was, but so far the company has confirmed. One of the problems for kobe steel is, over the last few years, the Steel Industry has seen a lot of consolidation and mergers, which put more pressure on kobe steel to compete with these big, huge rivals, so it branched out into lots of other businesses. One of the things were looking to see is a selloff of assets not only to raise money to deal with liability but also to help it sharpen its focus on its core businesses. Julia the fourth round of nafta renegotiations begins today in washington. President trump says the u. S. Will walk away if a deal doesnt meet his expectations, and hes repeated that. Pres. Trump well see what happens. Its possible we wont be able to make a deal, and its possible that we will. Joe there are a number of priorities of the Trump Administration in these talks that canada and mexico may regard as being poison pills. Real dealbreakers related to country of origin roles, things like that. Do people have to prepare for the real possibility, in your view, that nafta could go away . Sarah yeah, joe, theres increasing chatter that it looks like some these proposals are so far off the limit, so politically impossible in canada and mexico that it looks almost like a strategy the Trump Administration has to put a kibosh to these talks, and this concern is bubbling through the u. S. Business community. It looks like these proposals are trying to make the talks doomed, really, from the start. Vonnie congress failed to Pass Health Care reform. President donald trump has now taken his own action. Today, citing an executive order, which he says will promote choice and competition. Pres. Trump my administration will explore how we can expand something called Short Term Limited Duration insurance. Margaret the outlines the president has announced are important in terms of both signaling his intention and kind of a tertiary effect, which could be immediate, which is the potential to have a Chilling Effect on signups for the Affordable Care act heading into the enrollment period, and the prospect of pulling Healthy People out of the existing system. Vonnie the Trump Administration is taking the most drastic step yet to roll back some of the provisions of the Affordable Care act, saying it would stop making subsidy payments to insurers. In a statement, the white house said, the bailout of Insurance Companies through these unlawful payments is yet another example of how the Previous Administration abused taxpayer dollars and skirted the law to prop up a broken system. Isaac and lets be clear about whats happening here. There is a slow but systematic attempt to remove the nuts and bolts of the Affordable Care act in order to foster uncertainty in the market. And, i think, catalyze some degree of legislative action. Mark brexit talks have hit a wall, the Sticking Point money, specifically how much the u. K. Owes the e. U. Basically theres no deal. A no deal will be a very bad deal. The u. K. Is planning for all outcomes. Its not what we seek but were planning for everything. Emma the progress thats been made is really teresa mays speech in florence, when she said that we would pay that the u. K. Would meet its obligations broadly and continue to plan the budget for two years after brexit. What barney said today was there has been a new momentum he mentioned mays speech in florence, and said but the negotiators here today have not put flesh on the bones of what she said in florence with 15 months to go, the u. K. Wants a bespoke deal. How realistic that is is up for debate. This deal has to be approved. There are months of approval processes once the deal is agreed, so its looking pretty tight. Scarlet now the Trump Administration has formally proposed to repeal the obama era clean power plan. This was a 2015 regulation aimed at curbing Greenhouse Gas emissions and a cornerstone of president obamas environmental policy. In a statement today, Environmental ProtectionAgency Director scott pruitt said, were committed to righting the wrongs of the Obama Administration by cleaning the regulatory slate. Any replacement rule will be put in place carefully, properly, and with humility by listening to those affected by the rules. Jennifer theyre arguing the obama e. P. A. Overestimated the potential Climate Change and Health Benefits from this rule while kind of downplaying the potential costs for customers, electric customers, and utilities, and theyre arguing the e. P. A. Under obama overstepped its authority. That this rule was way too broad , that it flouted decades of practice of regulating emissions at individual power plants, because the obama approach basically required broad changes to the electricity sector. The attorney general of new york and other state leaders have also indicated theyre going to challenge this plan, and one of the ways they will do that is by focusing on how the Trump Administration is justifying this change, if they have adequately justified, basically, a 180degree pivot in policy. Mark Deutsche Bank chief y is facingohn cri increasing pressure to perform at the investment firm. The Deutsche Bank shares lost almost 80 since cry raised nearly 9 billion from investors in april. Now there are rumblings if he does not deliver on key parts of his turnaround plan. His job may be at stake. Is he on borrowed time . Elisa he has been for a while, actually. Right as soon as he announced his strategic shift in march. We had investors saying that he does not have that much time to show this is going to work. And the numbers in the Second Quarter were somewhat disappointing, and the news hasnt gotten any better since, and what hes been described as