Treasury yields. Can a speech maintain the momentum . Two Deutsche Bank puts traders in the firing line. And a different timetable paris the Opposition Party attempts to outmaneuver Boris Johnson by pushing for a general election. Reiterates hester does not want a brexit delay. Of further delay . I think it is pointless. Than half an hour this moment. You cant have missed the jump in yields. This is a look at 10 year yields. We are up to 1. 58 percent. At one point the session before yesterday, we were down to 1. 45 . In yields. The 30 year. The german 30 year, weekly turning positive. A global bonds selloff. The question is has the bubble burst . Rebalancing . Take a look at futures. After the gains we saw in equities in the u. S. Yesterday and overnight, the question today will be, was that irrational exuberance . Dax futures unchanged. Of 0. 2 . Res lets go to the markets right now. The managing editor in singapore. There was a call on where he has tweeted, markets may be overplaying these optimistic headlines, more than they do the negative headlines in trade. Do you agree . I dont even think that is a particularly profound statement. The last year or so, we have seen the same theme. No sign ofeen respite. Those playing a positive story did not watch the press conference. He expected there to be a deal. He expects china to capitulate, not because he is going to compromise. China are not going to capitulate. Told to step back from compromising too much. The trade situation has not changed. Equity markets are trading exuberantly in any kind of positive story, even though it has not changed. Tariffs in may. They are hitting the august data. In october. We will probably get the u. S. Heading towards recession. Of course, equity markets are trading in the positive news. A bump higher above zero. Even though that could be after expectations have been lowered. Leastypically holds, at for a while. Do you expect that trend to carry markets . I think this is an important observation. Resilient or a Solid Foundation to build. True in the last economic cycle, when the economic surprise index started turning more positive, that signal we were turning in the cycle. Bob burgess said it might respect reflect expectations have been low. The jury is still out. This is a valid point. Been a year, it has negative. It has been negative so long. Finally, we are not getting worse data. The big one, ism, that did disappoint. The jury is still out. I still this chart it shows when the city surprise index is positive, you see markets recover. Box is theed financial crisis. To second one is coming 2018. In terms of fixed income, what do you think about the question baba framed. Are we in a paradigm shift . A rebalancing of extreme positioning . Think he nailed it. I think it is a great piece. It is not a paradigm shift. It can last quite a few days. Reflectingrket is the slowdown in data globally and also in the u. S. Overlay of at and manufacturing, it looks like a perfect overlay. This is not a paradigm shift. We have had a tremendous move lowering yields. Jobs data. Pend on we will probably see lower 10 year yield levels in this market. I have no particularly strong view on where we are going to trade. Or where we are going to trade to given the jobs data will probably decide that. Next 12 talk about the hours. The next week of trading. Bringsestion of the day together those two. The bond market and the stock market. Asks how high can yields go before hurting stocks . Explain the connection. Tell us what answers you have been getting . Reflect the easiness of policy. How easy it is to borrow money. Interest rates are a direct input. Flows. Uation of dividend they reflect how easy it is to borrow. Part of the reason i am negative in u. S. Equities, we have had them struggling to make progress. We are around the level we were on april 30. Despite the fact that we have seen a complete collapse in yields. We are pricing in the fed to cut rates. Yet, equity markets have struggled to make much up her ground. Easing can be priced in. If we start getting more we dont needg that, it will squeeze equity markets. The bigger risk side move is for a larger move to the downside. I have no strong view in the short term. We might get some happy numbers. Overall, they are pricing for perfection. Equity markets will be squeezed. For joining us. It is an awesome day for investors to check out the mliv blog. Up next, we are live on the shores of lake como. Is at a foruma byre she will be joined Chase International chairman jacob frankel. Welcome back. This is the european open. We are about 18 minutes away from the start of cash equities trading. We are looking at futures pointing higher. Ftse futures pointing down. Out to the forum in italy. Francine lacqua joined by jacob frankel. We are joined by mr. Frankel as always. Thank you for joining us. 25 chanceere is a of a recession next year. What in your eyes would trigger a recession . Fact the u. S. Is still the strongest economy out of all the industrial countries, labor markets are strong, the question is why are people still concerned . Quote whether to it is 2530 . There are pressure points that can trigger a complete loss of confidence. It comes from the policy side. The large between powers. Go ahead. The trade war put a Recession Risk closer to us. Does it create a recession . The important point to note is, think of it in terms of the impact in the world. Largestthe two economies in the world, the u. S. And china. Plane, theing in a two copilots are fighting each other. How would you feel when you hear in the loudspeaker the two copilots are not sough settling their differences . You would buckle see your seatbelts, buckle your seatbelts , and hope for the best. It is essential communication goes on. They are eager and responding to information. Yes, they are going to talk again. In your analogy, Central Banks are the air Traffic Control . Do they have the tools to make the plane lands safely . To make it fly safely. Monetary policies all over the andd has been overburdened for too long the only game in town. When Interest Rates are close to zero in many places in the world, negative, when the Balance Sheets are loaded with assets that will never make their place in a balance sheet. The Central Banks have less tools. Ry central banker knows politicians may be wrong. That is one of the reasons centralbank independence is important. Forral bankers are looking the compass. Interestusing the rate. Now it is out of commission. They say, we have guidance. Much less effective than otherwise. It will create distortions. Location ofthe resources. You give lies to Zombie Companies that would not be able to borrow. You weaken the financial industry. It is going to be weaker. The Monetary Policy gets its effect on the economy through the financial industry. If it is weekend, it is no good. Do you create bubbles . They are expecting this much. It is difficult for Central Banks to disappoint. Normally, this happens when Interest Rate are too low for too long. We do not need to see a bubble to worry about the danger of a bubble. There is an issue here. We have u. S. Jobs later today and the u. S. Everybody will try to read what that means. Is it worried about the u. S. China . The fed looks at the whole picture, the overall picture and the effect on the u. S. Economy. Through a variety of areas. This spokesperson put it well. The fed isue, while data dependent, the temperature has not been measured every month. We have a steady approach. The labor market is the strongest. I dont think a single data paid point should be guiding Monetary Policy. It has an effect on the medium term. It should be guided by information about a trend. How difficult is it to settle Monetary Policy . We have shocks. U. S. China, negative rates. Danger we are not seeing you are seeing . Of course, there is a danger. Series ofe look at a data. Brexit, whatever. Today, the world is interconnected. Contagion is the most important concept not taken well into account. Coming from the markets for goods, trade areas, the financial flows. The financial areas. Contagion coming from the ideas. You have the wrong idea, other places imitated. Unconventional Monetary Policy has been with us for more than a decade. Windows the in convention become convention . Whats when does that become dangerous . The history is much longer than the one that started in the 2008 crisis07, which you and a shortterm mode. You need to extinguish the fire. Growth requires productivity, education, invention. Those things are mediumterm. Paulare not the part of Monetary Policy. Strong as it is, it should be able to say, this is not something i can deal with. Are we creating Financial Stability . I do worry about it. Of 2007, the crisis system isbanking stronger than what it used to be. There is more capital in the bank. More liquidity. Less leverage. Those things are better understood. There is a lot of debt in the system. The problems of yesterday are not the problems of tomorrow read you talk about policy for the future. If you want tomorrow to be different from today, dont do today what you did yesterday. Policy beingry used, lets try it again because it did not work well enough. Lets think in a broadway. Get Monetary Policy off the hook, worry about what it is good for. Jacob frankel, thank you so much. A system a former central bank governor. We will have more throughout the day. Thank you so much. France lane laplace. We are minutes away from the stock trading around europe and in the u. K. We will get stocks to watch including Deutsche Bank. They are cutting dozens of jobs. This is bloomberg. We are 5. 5 minutes away from the start of stock trading. Lets find out which stocks to watch. We are looking at Deutsche Bank. The joblk first about cuts to come for fixed income traders. Bank, in the throes of a big restructuring. Aiming to cut 18,000 jobs. The Trading Division is a big part of that. The focus has been these. Now we are seeing some significant cuts. That is going to be put into development. It should be a positive bit it was an unprofitable business. What is the story with telenor . Bux they were said to have talks with malaysias largest wireless air carrier. The talks have ended. They have confirm that. It was set to create as much as 5 billion. The shares are down by as much as 1 . Thank you very much. Stories,et your latest the open is next. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Matt we are one minute away from cash trading across europe and in the u. K. Lets look at what is going on in the markets. It was Pretty Amazing yesterday to see a global surge in yields. I have the 10 year yield that 158, but it 146 to happened everywhere as investors repositioned after getting long shiftds, or a paradigm towards trade peace. Other signs are the weakening of the yen against the dollar. Forcan buy almost 107 yen the dollar. The weakening of the gold price as people are less worried about the trade war. 61 for brent, good news for those in the middle east. And for a lot of markets as well. The market is opening up. Lets look at the indexes. Indexessee the equity on the lefthand of your screen, the ftse out of the gate down 0. 1 . The ibex unchanged. Euro stocks 50 index also. The indication from futures were that we would not see huge moves, but they could be to the downside which is what we are basically saying. Dutch stocks down 0. 1 , the same drop in london, spain, and france. German stocks take a little longer to get going. Lagging. Tem is usually we are moving lower on the ftse. In terms of currencies, the pound is moving higher a little lower as well. That is typically not what we see. Typically the pound and ftse move in opposite directions. There is not Much Movement as a whole. Lets look at what is going on in terms of individual movers. See 320 stocks are rising, 209 falling. Not a lot of breadth. To the upside even though the s p is down a little bit. In terms of gainers, sap, novo daimler rising. Bp down,of losers, even with the rising price of oil. Down. R is european markets opening slightly down. Really little change. German industrial data weighing on sentiment. Treasury yields compounding ahead of gains ahead of job data , nonfarm payrolls at of the u. S. Later this afternoon. Joining us now is saker anwar nusseibeh, ceo, Hermes Fund Managers. Let me ask you what you think bonds andselloff in the jump in yields we saw globally yesterday. Do you think the market has meetingaked out by the between the u. S. And china, or are they repositioning what could become extreme longs in bonds . Saker i think it is a combination of both. Very clearly the market thanks the fact we have the meeting in october, and there was a phone call between chinese officials and the american treasury, all of these. 2 the posturing point to the posturing. At the end ofe last week, we thought there would never the a trade deal and we would have a slowdown. There is, but not that extreme. There is belief now we might be on track to resolve the trade dispute between the United States and china. Matt what kind of effect will we see on the u. S. Economy . Manufacturing data as a result of the trade war. Good Services Data out of the u. S. Nonfarm payrolls coming later. Do you think the weakness from manufacturing will make its way into the jobs numbers . Saker there is some indication and has been four months has been for months that the job data is weakening. It is pretty low by historic standards. Thee is some weakening of economy, some tightening. It has not affected the consumer so far as we can see. I think the market is hoping the administration will be more willing to find a resolution to the trade dispute because the hitst round of tariffs will the consumers in three months, and that sets the scene for the background of the reelection bid by the president. Weakening,me manufacturing data less, but lets put that in context. , and thetrong data data released this afternoon possibly less than last month, with very low unemployment rate, we see good consumer data. The market takes support from the fact that with the possibility of the end of the Consumer Spending would be mitigated in the christmas season. Matt what do you think in terms , at some points the market just cares what the fed does. If we get good news out of the u. S. Economy, is that bad news for the equity markets because the fed will not cut as much . Saker this has always been the conundrum of the markets. Marketshe reasons the get some help is because the fed was willing. If we get a strong economy, it puts the fed back on a tightening track, i do not think that will happen for some time. I think the fed is worried it is fragile. And inflation, if what we see a pickup in Economic Growth, manufacturing back on track, then, yes, the fed will be back to tightening. The problem in the United States notarnings, they will expand substantially in terms of growth. It needs the economy to take a along at a steady pace, and that is why we see volatility recently. With the possibility of a trade dispute resolved, nothing untoward happens in the markets. Given the economic situation, it is fine, but if we see strong growth, you are right that it would trigger the fed raising rates were tightening further. I think we are a ways away from that. Matt that me ask you about ray dalios forecast on David Rubenstein, he thinks there is h wifi percent chance of a recession in the u. S. This year or next. He may be bombed out after coming back from the burning man festival. The you think that is a high probability . Saker possibility, yes, high probability, no. 25 , one in four is not that huge. There is an outside chance of a recession. If the trade dispute is not resolved and the consumer gets hit, we could see weakening in jobs and manufacturing data, we could see that. But so far it does not look to be in the cards. Matt we have a lot more to talk about. Saker anwar nusseibeh, ceo, Hermes Fund Managers, he will stay with us for the hour. Up next, and election but not yet. Boris johnsons opponents discuss a vote in late october. Can they outmaneuver the Prime Minister and force a brexit delay . This is bloomberg. I want everybody to know there are no circumstances in which i would ask brussels to delay. We must come together to stop a no deal. This week could be our last chance. I do not want an election, you do not want an election. Lets get on with the peoples agenda. Nos, 301. , not a good start, boris. The public will have to choose who will go to brussels to sort this out and take this country forward. First ine bill through order to take no deal off the table. The first leader of the opposition in a democratic history of our country to refuse the invitation to an election. The offer of an election is like the offer of an apple to snow white from the wicked queen. It is the poison of a no deal. The majority was not obtained. Can you make a promise to the notish public that you will go back to brussels and asked for a delay . Yes. I would rather be dead in a ditch. Matt those were some of the highlights and the life in brexit this week, depending on whos side you are on. Saker anwar nusseibeh, ceo, Hermes Fund Managers is still with us. What do you think about the ups and downs . Does it look like the u. K. Will not be leaving the European Union on october 31 . Delay isthink increasing. In this country, unlike others, we do not elect an executive but the legislative. ,he majority in the legislative what you have seen is the powerative has withdrawn from the executive, which is unprecedented. They are afraid if they go to they will not guarantee a no deal brexit will not happen. The majority of representatives in parliament are working hard to ensure we do not crash out of the eu without a deal. The conservative party hardliners led by Prime Minister johnson are determined that they will leave at the appointed time. So far, the passing of the legislation yesterday and the bill on monday, you will have the law say the Prime Minister has to get a deal or come back foreign approval of a no deal brexit. The tradeoff, if they go away and the parliament is suspended as per the requirement, the Prime Minister might surreptitiously change that law, and there is a mechanism for it. And through that ensure that they leave on the 31st. On the balance of it, i think we will have a delay. Matt whatever it looks like something will happen, everyone gets excited. The markets see a lot of action. The pound get a lot of pressure. Cricket players go to aberdeen to get interviewed. When it seems like we will go back to normal, there is a stalemate and nothing will happen, the pound floats up and everybody chilled out. It gets boring. The you think the pound hovers around 124 for the next few months until we get actual news . Saker if we are going to crash out of brexit, it may even go lower. It was pretty low from where we started in 2016. Move. Been a substantial because there has been mitigates in place, the forecast for Economic Growth post hard breast get have been mitigated by 5 in the worst case scenario. Than the picture before. On the other side we have lost 2 Economic Growth because of uncertainty. Is the level we will stay at for some time and then it will react to the news of a hard or soft brexit, or a deal if you like. We will see an increase in the value of the pound. Probably one more hit, and then a recovery. Matt how come the ftse has underperformed . Is it all down to brexit . These stocks 8 year to date, and the french and german up 16 . Theory the ftse should have done better. Make of stocks on the ftse their earnings outside of the united kingdom. There is some uncertainty about the effect of brexit and on risk assets if you are a u. K. Investor. I do not think it reflects the economy in the u. K. , what it reflects is among the institutional investors. It is likely risk off attitude until they can see what will happen. What is clear for industry in the u. K. , we have lost some Economic Growth because of uncertainty. It is trying to get sorted out in case of a hard brexit. Manufacturers and smaller businesses might find it harder. The uncertainty has been there for some time. Taking a risk off position toward assets more than a direct reflection on the economy as it stands right now. Matt we have a lot more to talk about with you beyond exit, thankfully. Saker anwar nusseibeh, ceo, Hermes Fund Managers sticks with us as our guest cohost. I want to check in on the markets in terms of the moves. It is a pretty even split considering the fact the stoxx 600 is only moving up or down by 0. 1 , right now up. Auto parts makers are rising on this friday ahead of the International Auto show in frankfurt next week. Porsche. O the ceo of we will speak to the ceo of mclaren today. Am going to a bugatti event up next, the good, the bad, and the ugly, it has been an eventful week. What lies ahead for investors next . This is bloomberg. Matt welcome back to Bloomberg Markets european open. Right now we are 22 minutes into the trading day and looking at gains in frankfurt, up 0. 25 . In italy, 0. 1 . No change in france. A little weakness in the pound, british stocks are not selling off but there are more sellers than buyers. This week we bring you the good, the bad, and the ugly. Christine lagarde had a first good appearance as incoming president of the ecb. The euro rallied on her remarks on accommodative policy, although i am not sure that is what she wants. Week started well until the situation turned bad again. Kong, but sheg failed to deliver on protester other demands, and they vowed to fight on. Things get ugly for Boris Johnson, beaten in a series of major votes this week with his brexit plans in tatters. His own brother has turned on johnson resigned as mp and minister yesterday, saying he was torn between family loyalty and national interests. He decided to choose national interests. Boriss do or die strategy seems to have backfired. I want to look at the cit surprise index, it has turned higher after being below the zero line for all of 2019. When this index turns higher, it tends to stay there for a little while. I want to show you a function we have that brings you to this page which breaks down the surprises, good or bad in economic data. It is fascinating. Between the u. S. And other regions. Moving back to a positive here. Saker anwar nusseibeh, ceo, Hermes Fund Managers is still with us. What do you think about the move back to positive surprises . Will that be fuel for the market rallies, or will investors say expectations were low . Saker i think they are not contradictory. Generally speaking, when a surprise index goes positive for some time, there is momentum building up. It means people have been far too negative. It is not as bad as people think. We spoke about what is going on in the United States and economic data, it is weaker than people think, but in the context it is still decent. Same across the board, things are not as bad. Elsewhere, it hangs together. If you look at the possibility for trade deal that is good growth and emerging markets, particularly in china, growth in china is good for growth in europe, particularly germany. You see more positive surprise for data across the world. Brexit is neither here nor there, a hard brexit has been discounted due to its impact on large stocks on both sides of the channel. Anything from here on will probably come across as positive rather than negative. We are more likely to see positive surprises than negative surprises. That will be a fascinating turn of events to watch. It has been a pleasure to join us. Saker anwar nusseibeh, ceo, Hermes Fund Managers. He goes on to radio, you can get more by tuning in to bluebird radio. Com or in london on dab. Bloombergradio. Com or in london on dab. Matt 30 minutes into the trading day, lets get your top headlines. Strong stateside data propels treasury yields higher. Can the u. S. Jobs report maintain the momentum . No longer spared. Deutsche bank puts fixed income traders in the firing line as christian sewing restructuring season dozens of job cuts in the division. And different timetables. Tryains opposition parties to outmaneuver Boris Johnson by pushing for a general election at the very end of october. The Prime Minister reader rates to does not want a brexit delay. I would rather be dead in a ditch. What is the point of a further delay . It is totally pointless. Morning, and welcome to Bloomberg Markets. This is the european open. I am looking at the stoxx 600 index which is little changed. Moving higher and higher, up. 3. So it is very little changed, but lets look and see what is going on in terms of the actual movers. Gainers, only 215 stocks are down. As far as the movers to the upside, we have got some luxury. Lvmh is rising higher and adding points to the index. Weve also got richemont rising. That has to be good news, especially for our next guest who sells a stuff that is even more expensive. Sanofidownside, we have moving off with et al with total and other Oil Companies down after the possibility of talks in the deal ended their. Lets go there. Lets go to bloomberg first word news. Hong kongs Credit Rating has been cut. Of persistentths protests and violence continues. They have set of the, two one countryrk to systems framework with china. Carrie lam says she disagrees. Gotten dozenshas of traders and sales at its fixed income unit. Spent twoss was months ago. We have learned their trimming roles in highyield and investmentgrade death. Nissan has overpaid a number of executives, including its chief. , theve learned another Senior Vice President , was a key figure in the downfall of former chairman carlos ghosn. They reports they are not seeking the ceos resignation over the issue. Starbucks says it is still opening two new stores every day in china in a bid to stay ahead of growing competition. Fastest they posted the Quarterly Sales growth in three years. They see china as its biggest opportunity, saying there is no limit to the expansion on the mainland. Candidly, china is a huge platform. We can build a new stores and grow for the rest of my lifetime in china. It is that big of an opportunity. Hurricane and barreling towards North Carolina where it may briefly make landfall there coastal areas are forecast to get 612 inches of rain and storm surge as high as seven feet. Dorian has already battered the bahamas with 92 mileperhour winds and killed 30 people. Said bob ways former president Robert Mugabe had died has died. They say is with the utmost status sadness they announce the nations founding father. He was a controversial figure accused of economic mismanagement and human rights abuses. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. This matt . Matt thanks very much. Now lets talk about luxury carmakers that are bucking the trend. Is yet to produce a bettingectric offering, Battery Technology wont be good enough until the mid20 20s. Cfo of us now is the mclaren. Which also does not want to make an suv. And this is very interesting. Purest in itss so way about making these sports cars. Consumers arehat going to kickback against this . Is that going to be a concern . Paul not at all. At mclaren, we are focused on building drivers cars, twoseat sports cars and we are not chasing volume. A lot of card manufacturers out at suvse got to look to increase volume and is not where we are at. Matt why do you think Battery Technology wont be ready until 2025 when we already see cars 060tesla or others doing into an half seconds and capable of 300 kilometers of range. Paul we are investing in Battery Technology the focusing more on hybrid with our batteries. We are going down of the hybrid route because of the performance it brings. Genuinely, a hybrid engine is faster and you get better performance than a turbocharged engine. So we will come by 2025 can have a fully hybridized range. At mclaren, we are not being the first to market with new technology. When we come to market with something, we want to do it better than anybody else is doing it. Therefore, when we do an electric car which am sure we will, it will be the best out there. But we certainly wont be first to market. Matt as the finance chief, you are focused on the numbers. You guys spend a lot in our and the in r and d. The idea is you bring that back to customers, does that really pay off . Paul absolutely. We dont have any lost leading programs at mclaren. Every single vehicle we produce is done so on a positive business case. And in terms of formula one, our aim is to be more successful. Not only on track but financially and we are headed in the right direction. We have seen some pretty creative ways of raising money recently. Porsche had a promissory note it sold to its own executives. How does mclaren want to finance r d Going Forward . , we in terms of financing have all of the financing that we need to fund the future development. We have got a mixture of equity and bond debt in the group. Will be self we financing from free cash flow. Matt so there are still no plans for an ipo . Paul i thought that might come up. At this moment in time, our shareholders see a lot more growth and return in the business. In the short term, there are no plans. But lets see where we get to in the longterm. Matt is it a good time for you to be selling debt . Have you got any Bond Offerings in the works . Paul not at the moment. We issued some more debt a couple months ago, that was very successful. But at the moment in time, we are not in the market. Matt i cant leave without talking about the trade issues. Butare a British Company you sell such expensive products that small tariffs would not make a big difference. Is it a bigger concern, brexit, versus the china trade war . I wouldnt say one is more or less of a concern than the other. We have to deal with a number of issues as we trade. We have dealt with a number of political and Economic Issues since we sold our first car in 2011. Mclaren, being independent, we are small, agile, and wellplaced to respond. Not only to the applications of brexit at any implications with other trade wars. Wars. Matt i have to ask you about the p1 supercar. We wrote a story about hypercards right now h ypercars that nobody can afford and are a little silly, yet the p1 is a car everybody had on their wall as a kid, or even as a 40yearold kid, like i did. You have anything as a followup . Paul absolutely. It is part of our track strategy. That isnced a followup coming before 2025. But we also have other products in the ultimate segment. We have just finished delivering the gtr which will be done by the end of the year. A car that a lucky 106 customers will be getting. Matt just wanted to get some detail. They you for joining us, paul, the cfo of mclaren, talked to us ahead of the iaa in front for. In frankfurt. Up next, we bring you our interview with the founder of the worlds biggest hedge fund. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. We are 44 minutes into the trading day and can see in this picture with the dax gaining. 25 while the ftse is down. 1 . Nowhere is safe at Deutsche Bank. The german lender is cutting dozens of sales and trading jobs in its fixed income unit, a unit that was largely spared from the overhaul two months ago. The reductions are mostly tied to the underperformance of divisions such as the latin american credit business, which we learned has been entirely shuttered. Is ang us from frankfurt guest to talk more about this. What to be more what do we know about the job cut plans . The way they tried to spin it was to say, ok, it is equities we are pulling out and they gave a commitment to fixed income traders, saying you guys will be spared. But everybody watching that said, really . They were making comments about trimming their business and focusing on the areas where they are a market leader. So it is clear the fixed income business would feel some pain. Is to whatestion degree can they offer continuity to the clients and we have seen on the equity side trying to pull back revenues and continue on a white label basis. Something similar will happen with the men the latin american side of things. Do you partner with someone else, how the work it out . How do you work it out . , mainly are being hit internationally, but it is spreading to fixed income. They will have to cut a of jobs here in germany. A lot of jobs here in germany. Matt what does it Deutsche Bank look like in five years . Nicholas it will be very focused around this corporate bank. It will be the center of gravity or the sun and the solar system. It may not be the biggest generator of earning or revenue or profit, but what he is trying to say is that, at the core of the company, ringing back to the roots, whether that still allows them to generate the returns is another matter. Banking for europeans and german corporates is not a terribly lucrative business, at least in many fields its not. Is it as profitable as christian sewing wanted to be . It, but deutsche is saying it is a very conservative estimate. But there is room to overdeliver on these. I would say the wildcard there is Interest Rates and whether that gives them a tail or a headwind. Matt thanks so much for joining us. Nicholas comfort in frankfurt after a busy week. The billionaire founder of the Worlds Largest Hedge Fund Says there is a 25 chance of recession in the u. S. This year and next year as well. Bridgewater associates cochairmen and cocio ray dalio spoke with David Rubenstein about how Central Banks could respond. Know, recession, you there are two negative quarters of gdp and we will be covering, i think, fairly close to that level. There a certain variation around it, but the bigger things are a combination of the absence of effectiveness of centralbank policy, so a hope we can talk about those, together with the wealth gap. A large wealth gap. So when the next downturn comes, what that will look like socially and politically and so on. The elections, which is an issue between capitalists and socialists or the rich and poor. In ahe emergence of china relationship to the United States. Factorsur factors are that have not existed since the 30s. I think they are unique. When we get into the question of the recession, its about how that will affect the other things. David in the investment world, your firm was quite wellknown sometime before the last recession. But in the last recession, your ,irm performed extremely well maybe better than any other major hedge fund. Up 28 or Something Like that. A recessioncipating now and are you changing your investment approaches or are you not quite where you were in 2007 . Ray in 2007, it was pretty easy, i think, to calculate that there were these debts that would come due. That there was not an adequate amount of funding. So that sort of debt crisis is something we anticipated and were positioned for. When i go through those calculations, its not the same. In other words, the amount of maturing debt and that whole problem does not look the same. It looks more like a gradual squeeze having to do with quite a lot of debt of a certain type. But with that, pension liabilities and health care, particularly. We have large deficits and so on. So the amount of promises that we have our large, but they are going to be coming at us at a gradual pace and i think it is going to produce a squeeze. Related to that, what is important is that when you dont have Monetary Policy being able to be effective, what kind of Monetary Policy will be have . We will have, more than likely, a lot of debt monetization. Matt that was ray dalio, founder of Bridgewater Associates speaking with David Rubenstein on bloomberg television. Coming up, we are live from the beautiful from a beautiful italian town and have a stellar lineup of newsmakers. Guestl be interviewing a and Economics Nobel Prize winner and dr. Doom himself, ceo roubini. Sit down with former italian politician and rico vanni own and mario monti giovanni and mario monti as well as the Vice President of turkey. Dont miss these interviews. This is bloomberg. Matt welcome back to Bloomberg Markets. Almost one hour into the trading day. We had a brief lift but now we are coming back down. You see the ftse down. 1 , as is the cap. The cac. The ftse mid is down. 25 . Every year, hundreds of workers file sex discrimination cases in the u. K. But bloomberg Analysis Shows a majority of suits have been settled outside of court with claimants likely receiving money in exchange for silence. They include cases against banks like barclays hsbc, and jpmorgan. Joining us is k wiggins, bloombergs legal reporter. Bloomberg has done a lot of research into this. You spoke to some of the women who signed these settlements. What did they tell you . Thats right. First thing to say is that this is a big project. We spent months looking at these cases. The women weve spoken to say, essentially, they were in bad situations and had two bad options to choose from. By the time they decided to bring a lawsuit, their options are to go all the way through trial, which can be expensive, stressful, timeconsuming, damaging to reputation, or you take one of these settlements. The settlements often seem to be the best option for obvious reasons, but what they told us was, years later, they realized that the stress of the situation is not over and there are still consequences and it is difficult to live with keeping that secret for the rest of your life. What do the Companies Say about settling these cases . And, im sure, asking mostly women to sign nondisclosure agreements. Toe the companies we spoke say that, often times, a settlement is in the interest of both parties at the moment of the dispute. Often, it gives both parties the chance to draw a line with what happened and walk away, bring everything to close. They also say that people who bring the cases want secrecy, at least at the moment when the sun settlement. Those things are true, but our reporting shows that, in the heat of these arguments when they are suing their employers, they dont realize will be longterm implications of the settlements are going to be. Matt thanks so much for joining s, talk about the investigative reporting being done by bloomberg. Up next is surveillance. Is on the banks of lake and tom keene is in the office. Im headed to radio, tune in if youre listening on dab in london or on bloombergradio. Com. This is bloomberg. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Warning, theios Billionaire Hedge Fund manager says there is a 25 cent chance of a recession this year. Partyns opposition attempts to outmaneuver Boris Johnson. He says he would be rather be dead in a ditch than the late brexit. And we are live in italy a day after the new government is sworn in. Wesp