Theyre going to be mauled. You have to ask yourself, why is that happening . David all of that next on bloomberg best. David hello, i am david gura. Lets start with a day by day review of the top headlines. Startedy, the markets with the week before, with a big selloff. Stephanie an unbelievable day. At one point, you had the nasdaq off by 3 . But into the close, stocks made contributed to a rally. The s p only off 26 points. The dow only up 177 points. An off day but it could have been worse. What is this all about. There is more anxiety about the financial sector. Even a few weeks ago, it is a relatively new development. The focuses mainly on european banks. But a few things have been driving markets lower. Last week, most of the economic data, even the u. S. Was on the soft side. It is reinforcing concerns about the health of the Global Economy, even the health of the u. S. Economy. Have had an environment for the past few weeks where you have seen more effort by some of the worlds Central Banks in japan and europe to either consider or. More unconventional monetary policy. And so far, that is not having the intended effect. Investors nervous about what happens in a world where Central Banks may be out of bullets. Been looking for the bond bubble to burst for years. It seems like the bond bears can go home right now because it is exactly that it exfo what is keeping the bonds up. It defies everything we learned in school. You have close to half the marketsn sovereign bond mog with negative yields. That wasnt supposed to happen. You were supposed to have to pay the government for the privilege of leading to them. Deutsche bank slumped yesterday after being the biggest lenders to reassure investors it has enough cash. A report yesterday raising the specter of Deutsche Banks ability to pay. This is a huge torch paper. Simonm a and adamson wrote this report, questioning Deutsche Banks ability to pay their coupon in 2017. If their profitability comes in lower than expected or if there are further litigation costs. This is a big cloud when we talk about Deutsche Bank. We dont know where they are going to be an longterm litigation costs, what that will do to the profitability. Yesterday, they put out a statement saying, yes, they do have enough capital to cover. They say they have enough to cover 350 million coupons due in april. This isnt just a Deutsche Bank story though. You take a look at lenders in in 2012, 600, you see that is when mario draghi said he would save the euro. Look at how far they have gone down. There appeared to be two stories. One is a sort of concern about Deutsche Bank and our own ability. But then there is a broader concern about the bank stocks in general. But it looks like Deutsche Bank is taking the brunt of that. So the question of negative Interest Rates came up today during it during Janet Yellens testimony. Spirit of prudent planning, it is something that, in light of European Experience, we will look at, we should look at, not because we think there is any reason to use it, but to know what could potentially be available. Its interesting that she, like sam fisher, came out and said, based on the European Experience it makes me wonder if they think it has been successful. If so, what are they looking at to gauge the negative rate experience. Or if it didnt mess it up. Did not harm in any way, versus weather the help. Later on, she did allude to u. S. Money market funds. She said they have to study whether the potential advent of negative yields in the u. S. Would disrupt the plumbing of the u. S. Financial system, in particular money market funds. You are already seeing in japan some money market funds closing down to new investors because it doesnt work. This model doesnt work. And europe does not rely on money market funds as much as the u. S. Does. Disrupt the paper funding system. She did say it would be remiss for them not to look at it more closely. Youve just been listening to fed chair janet yelling janet yellen. You is the message heard from todays testimony . Negative rates, very backandforth on the legality of it, but whether she was prepared to use it. We had previously considered them and decided that they would not work well to foster accommodation back in 2010. In light of the experience of European Countries and others that have gone to negative rates, we are taking a look at them again because we would want to be paired in the event that we needed to add accommodation. The mere fact that she is saying, again, confirming this is a tool we are considering, it may be something we are going to use it doesnt mean we are going to use it we are sharpening it, and its an signal to markets. Theater,le bit of psychotherapy, a lot of politics and very little information. I would disagree with one of brendans characterizations. She was asked about the acts of negative Interest Rates. It doesnt mean that she are the ax of negative interest rate. It doesnt mean that they are sharpening it. It is a full successive day a fourth successive day of declines here in europe. The pressure is building up in japan. Does this mean we can expect more stimulus from the boj . I think that is the question we are all asking ourselves right now. Kuroda was in parliament all morning talking about how he is ready to employ more stimulus if it is necessary, that he will not hesitate. I think those are pretty strong comments. I think more action is definitely possible. There are some economists already focusing forecasting that we will get more in march. The boj has completely lost control. Banks have central blanks generally lost a lot. In reality, people put their money in the mattress. Bankinge it out of the system. N aging segment that relies on pensions. Kind of for the economic theory breaks down with the practical reality. Will have more on Deutsche Bank a little later, how it rallied from tuesdays plangent how it got the whole world talking about cocos. Then company news from tech to media to beer. David lets continue our review with some business activity. Sunda patch i is getting a big payday, very big. He is poised to become one of the highestpaid chief executives after the Parent Company offered him restricted stock. That is an awfully large restricted stock grant. Any upside was really something shareholders would be happy to give him, given the performance of to a point. Google right now is just firing on all cylinders and i think that he has come in and done a terrific job taking over the core property. So im not surprised they want to reward him. I think it is testimony to just how successful google thinks it is right now and how critical he seems he is seen to be in the company. For google, these are payout firms through 2019. And their ultimate value will be the stock rice. But the number he is getting is the number he is getting. If you allowed him to invest all of these today and he has a few options, and the company, they would be worth 650 million. Obviously, we are in a down market so he is getting close. He could definitely get there pretty quickly. Corrects the japanese government bidding for a rescue plan is pitching the creation of smart appliances that include another major. D electronics we have Taiwans Foxconn and we have Innovation Network core of japan. They are looking to inject some capital to boost the led business. This idealso pitching of a smart Home Appliance giant. Foxconn is offering a package that is worth about ¥660 billion. Some of that would go into sharp in the form of buying new billion would¥225 be used to acquire preferred shares. Isthe other side, ha offering ¥203 billion to uphold these operations in the future. Oath want to change operations fundamentally to make sharp more competitive. It has been losing money for years. My question to you is this profit will increase in 2015 externalncreasingly environment. Where are your sales and profits going to rise in 2016 and by how much . Whenever make those kinds of price predictions precise predictions come as you know. But we have a portfolio brands that allow us to spread the risk. On the one hand, you will have headwinds, but on the other hand, you have oil consuming countries like vietnam that will benefit from low oil prices. Overall, our balance and our portfolio footprint leaves us to make that confident statement, there willtting that with i be some headwinds. Is this an opportunity to get more out of the European Business . Translateces do not oneonone to beer consumption in european but that will bring some additional discretionary purchasing power to people, which beer is a small part of it and we want to play our part. Think europell, i can benefit from Lower Oil Prices in the you succumb. Made a pledgemona to prove doubters wrong and bring floundering stock to a new high. Hes been with the company for a while. What does he have land . This is probably getting back to a six for viacom. It comes to programming and ratings. It is a challenge for this company. This is a company that has some real ratings weakness. The company is reinvested in their programming. A lot of new shows. The ratings have started to turn. Lets see if that is a longterm trend. They believe that they will start to see real improvements in the Cable Networks by the end of next year. Unfortunately, investors are hoping to see the turn a little bit sooner. Disney reported earnings after the bell yesterday, beating all estimates to really the best corner does has ever recorded on every front. You look at profits of 2. 9 billion. That double the massive profits from three years ago. A fantastic quarter driven by star wars. Merchandising activity at the beginning of star wars. Spectacular quarter. And yet concerned that there is a slowdown and espn and subscribers have adapted to a new world of cord cutting. I saw bob iger went out of his way to see there is an uptick in subscribers. But it did not make the market feel any better. Etch right. Le they got more revenue thats right. While they got more revenue per we certainly havent seen that behavior in the marketplace. At 2016, we have seen a fairly rapid drop in commodity prices. It is not just add materials. It is also oil and gas and a range of products. We are on the front foot. We are taking proactive and prudent action to reduce our costs and to reduce our dividend policy. This is a sensible step we are taking here to protect longterm value to shareholders. What does this tell us about your m a thoughts. We are trying to get the balance right between shareholder returns. Of assets thate could be more natural than some others. At this stage, there is out there on the market that interests us. But we are holding our powder dry while we focus on developing our own assets. Twitter reporting a loss of 90. 2 million in the fourth quarter. Staggereduser growth stagnated escort her. Jack dorsey is still struggling to make this site more a lowering. The company so far has kind of been able to get around this stagnation because this is at the First Quarter that growth has find out. It has been happening for some time. They got around it by the average revenue per user, which twitter has trailed facebook at but has been able to tweak up quarter after quarter. That has massed the declining users. Thats all a shell game. Until you reenergized user growth, you are stuck. Straightsted is Second Quarter loss yesterday. This is not great news. It was a really bad loss. People were accounting for some of the trouble at aig, but this was worse than our most estimates. A lot of people knew hedge fun performance had been bad at aig. And i guess activists came in at the right time. So they put a couple of activists on their board. Right. Hes been through this before. Early this week, dows around europes largest investment bank. Sharply bank stock fell. It all began with cocoas. The coceo tried to calm employees saying Deutsche Bank remains absolutely rocksolid given our Strong Capital and risk is issued in. Fears yesterday were triggered by a note from credit sites that question Deutsche Banks ability to pay off coco bonds. This is a type of debt that, if things go badly, the bank converts into shares. But theres nothing significantly different. Fear that the markets brought up front yesterday. It is quite amusing and away. They converted into equity is. He ratio falls it is sitting at 11 at the moment. I was getting calls from people saying are they going to raise more capital. Right. Europeank some of the banks have been slow to getting themselves recapitalized and getting their Financial Balance Sheet in the best place they could be. I think Deutsche Bank is pretty sound, actually. At the end of the day, it is a German National icon. Is doing all the right things. We dont have a rating on Deutsche Bank. My guess is they shall are holders face some serve dilution in the capital structure. We have seen differentiation in europe. Ubs is only at 86 basis points. It is important that the banks are still thats the markets are still differentiating between the banks. I think we are in a situation where we have a much better handle of the balance sheet. But that doesnt stop people from having that fear factor. One bank come no one institution raising that level of concern that you get the german finance minister to weigh in, to shore up confidence, i havent seen this since some bankers told me they were solvent in 20072008. Onwe have the latest Deutsche Bank. It is important that he made that statement, a public vote of confidence in Deutsche Bank. That it also tells you what little confidence there is in the market. We have the potential plan to buy back some senior date senior debt. Earlier, the Financial Times reported on tuesday that day could potentially be buying some senior debt, buying back senior debt. This crucially would not include those convertible bonds that have been the center of the story the last 48 hours. I have seen this train wreck before. We have seen this theater. It is one Part International finance trust liquidity, one part the corporate plan and one part the over arching macro economics the Deutsche Bank has to deal with, which is the most important . At think it is the macro issues he has to deal with. People are scared. Theyre worried about the Banking System. They dont see much growth in europe. All of these banks in europe have been overly aggressive in the past. He needs to dial that back. He needs to talk about what they are doing, buying in bonds. It makes a lot of sense when they are buying at that price. An overreaction. This is Deutsche Bank. This is the bank of germany. This is the longterm game. We are reacting to traders. Who can take advantage of volatility. On a long path, is Deutsche Bank it bank that will fix her problems, figure out a way to get confidence back into their shares in my belief is yes. Lets look at the soap opera known as Deutsche Bank. Charta fiveday intraday showing all the back and forth. What i want to know, folks, is the german view. How is how has the story adapted and morphed in the last few days . It has gone up and down come up and down. And it is all of about say whether Deutsche Bank has the money to pays coupons. Whether or not it is triggered is on an up secure provision on an accounting metric. It is done under german commercial law, not international standards. And investors are trying to figure out whether or not Deutsche Bank and ask a pay them. The big question here is does the european Central Banks try to weigh in and clarify on these new rules . They have 169 thanks that they serve rise. Will the ecb tried to calm the market. They going backandforth with Deutsche Bank on how they can maybe offer a little more clarity . Confirmation Deutsche Bank is indeed going to buy back some of its debt. It looks about like 3 billion 2 million. Thats right. Ending a quite crazy roller coaster week, this is a fiveday chart. We started the week with concerns that deutsche would not be able to pay the coupons on its riskiest debt. Deutsche coming out saying, of course it would be able. Then there were rumors that it would buy back debt shares. Shot up. Ve interestingly, over the week, shares are actually down by 1 . Its been a quite incredible volatile week. What do you think of this Deutsche Bank move . The market is responding well. It makes a lot of sense. There debt has been crushed basically in recent weeks. They can buy this data back at less than the issued it. That makes a lot of sense. It reduces their leverage, sends a signal to the market that, hey, we have the cash on hand. We are not worried about being able to pay our bills. The potential downside is that Deutsche Bank is taking some of the flexibility away. Cash thatiquidity, a they could use down the road to protect themselves. David up next, the best of the weeks interviews. And bold predictions on the price of oil. David welcome back to bloomberg best. Volatile markets make first bearded conversation. A bold prediction on the price of oil from one of the worlds leading independent traders. Ian taylor spoke exclusively with brian s