Spending a few months getting its ducks in a row, getting ready. We will reserve our right to oppose. Ramy plus, decision day approaches for the fed. Everyone has an opinion. I cannot see any case at all for a tightening. This has been a topic of almost numbing boredom to me. Ramy its all straight ahead on bloomberg best. Hello and welcome. Im ramy inocencio. This is bloomberg best, your weekly review of the most important interviews and analysis from Bloomberg Television around the world. Lets kick it off with a day by day look at the top headlines. When Federal Reserve governors speak, people listen. On monday, Lael Brainard in chicago had the financial world on the edge of its seat. Federal reserve member Lael Brainard, keeping a dovish tone in her remarks today. She said economic progress continues in the u. S. , that the bank would be wise to continue keeping politic loose. She has a dovish reputation. She is concerned about the labor market and international concerns. What do you make of her speech, and where we stand in regard to the upcoming meetings . I would say her comments were in line with our expectations, even a bit more dovish. She made a more forceful argument for patience and caution, in light of what other fomc members have said. We think that the data has cleared the hurdle for a september hike. There is strengthening Consumer Spending and a very large rebound in the labor market momentum since midyear. The concern is inflation, among some corners of the committee. It has evolved, along with their forecast. I think the data has cleared the hurdle. The problem is, the markets are not pricing it. Historically, the fed doesnt move unless the markets have it priced in. The vast slate of fomc communications in recent weeks against a softer data backdrop has not been enough to move probabilities higher. Is the goal of the fed just to move the market to the prospect of a rate hike . It may seem odd to say they are fine with surprising markets with a speech or an article, but they are not fine with surprising on the decision. But historically, nearly all of their rate hikes have happened when market probability has been 70 or higher. They would have to want to surprise markets at this point in time. The International Energy agency has reversed course on an oil glut. The iea says the surplus will persist into late next year. Just last month, they predicted the market would return to equilibrium this year. Mark at one moment, it ends this year. Now it is pushed back into late 2017. What changed . What has changed is the outlook for global oil demand. They have cut that quite significantly, particularly for the current quarter. They revised growth down from about 1. 2, 1. 3 Million Barrels a day to as little as 800,000 a day. Thats based on preliminary data for july and august. That has pushed the market back into oversupply, at least until the middle of 2017. Mark and it comes after opec yesterday flipped its forecast for rival supplies next year, predicting this increase in output from outside the group. Two reports together that are fairly bearish. Both of them have actually flipped their forecast. One that showed balance returning in the current quarter, to one that shows balance now being put off for 12 months. Interestingly, they come at it from different directions. The iea comes at it from lowering the demand forecast. Opec came at it in the opposite direction, by raising its forecast of nonopec output. Vonnie it took four bids, but bayer clinched a deal to take over monsanto. The deal is valued at 56 billion, making it the biggest merger this year, and also the largest foreign takeover by a german company. If it is approved, it will create the largest supplier of seeds and pesticides. You feel confident you will do whatever is needed to get this deal through . As you may assume, regulatory challenges have been discussed very intensively as part of our negotiations, but also beyond. We have both had very large teams of our own people and an antitrust counsel looking into it. We looked at it jointly to assess how big the regulatory challenges might be. In a way, we are really blessed, because this combination is one that is highly complementary and has, for the size of the transaction, a very low overlap. That is our assessment. We are looking forward to engaging with the regulatory agencies in all countries we are going to have to file. We are preparing ourselves in order to address regulatory concerns. So we can serve up what is needed to get our transaction and the combination of our business to the finish line. Happy thursday. We begin with that breaking news from the bank of england. John rates remain unchanged. An alltime low of. 25 . The Asset ProtectionProgram Remains in line at this is bang in line with expectations of everyone. The key line here is the majority of the Monetary Policy committee is expecting a rate cut if the august outlook is confirmed. Do you think the august outlook will be confirmed . Obviously that is a tough one. We have seen some resilience in the last few days. The early surveys done by the bank agents and others from firms say they expect to start to cut back on investment and jobs. Probably we will start to see stuff coming in the hard data. I like the fact that the mpc got him its retaliation in first. It did not do anything until october 2008 in the great recession. Looking back, the economy entered recession in april 2008. This is good news. Part of the good news is people are seeing that the bank acted. The concern is we will see slowing of the data. Its early days yet. It takes a while to measure it. So, my suspicion is we will see some weakening in the data, as the majority of members on the committee are saying. Deutsche bank says it wont pay the 14 billion sought by the u. S. Justice department to settle an investigation into the firms sale of residential mortgagebacked securities. That is more than triple what some analysts estimated it could be. The 14 billion they are being asked to pay they are rebuffing for the time being. We are not going to be certain of an outcome until we are there. I guess investors will be looking at the kind of metrics that were applied to other banks that have settled similar cases. Those indicate a fine of a much smaller magnitude. Investors and analysts at this juncture are priced in but of , course, we wont know that until they reach that agreement. If the settlement is close to the 14 billion, thats not great for deutsches capital position. Jpmorgan had a note yesterday that anything over 4 billion would need additional litigation reserves and capital. Does the amount go down from here . They start negotiating with Deutsche Bank . They are taking a hard stance. They will not pay anything close to 14. Will it work . The other banks have not had to do this in public. The other banks have had these negotiations, but they have not had to put up public statements saying we will not be anywhere close to there. It will be interesting how that changes the dynamic. I think you will definitely see it lower than 14, anything above four being an issue. Thats a big gap. Ramy we will have much more on european politics later in the show, including exclusive interviews with eu and u. K. Leaders on the path ahead and what that bodes for business. Plus, more fed talk in advance of weeks critical meeting. But first, more of the biggest stories, and we dive into technology. Samsung is taking a lot of heat over its exploding phones. Now the south korean giant is taking big steps to defend their brand. This is bloomberg. Ramy this is bloomberg best. Im ramy inocencio. Our global tour of the weeks tops business stories keeps going, with not one but two stories that made news on monday, and for very Different Reasons one came together and one fell apart. Mark add another megamerger to the m a graveyard. Industrial gas giant linde has called off a deal. Why have these talks fallen apart . Its funny. On paper, they are saying there were issues of governance. But digging behind the scenes, sources are saying there were a variety of issues. One of them was, what kind of responsibilities would linde have in munich . There are always these political backandforth, with jobs, investments. It sounds like some of the labor reps were pushing back because they wanted to secure more operations in munich. Another two companies agreed to merge. Two big canadian fertilizer makers. Is this overall good for the industry . Does this mean we are facing more years of downtrodden prices . I think it means it is good for the companies. By combining these two players, they are going to be able to cut out costs and get more purchasing power. They have talked about saving up to 500 million per year. Thats why people like this deal. Far from perfect. That is how the volkswagen ceo described the carmakers position before the emissions cheating scandal. In an exclusive interview, he told bloomberg there were profitability issues and overinvestment. There is still some skepticism, and certainly delivering results is critical, even without the crisis. There were strong results in the past. We were far from perfect. We had profitability issues. Even without diesel, we are very honest about the shortcomings. How are they planning to get out of this crisis . I think there are two main initiatives here. One is a reorganization of the company to remove decisionmaking bottlenecks in the headquarters. They have already started to shift responsibilities from the headquarters to the individual brands and different regions. The other is the point he referred to in the interview. Its the issue of overspending. Especially the volkswagen brand. Lets take a look at samsung recouping some of its losses on the market there in seoul. And of course, on the heels of its biggest plunge in years. They are trying to regain control of the phone recall crisis by giving the heir apparent a bigger role. Covice chairman has been nominated to the board and will become more involved in strategic decisionmaking. He is been helping run samsung since his father had a heart attack in 2014. He is considered more globally minded and has been credited with partnerships with apple and google. Now samsung is surging today, but only after suffering the biggest twoday decline since 2008, after u. S. Regulators and the company cautioned users to power down their note 7s, amid reports that the batteries catch fire while recharging. The losses need to be put into perspective. Samsung makes 175 billion a year. Even after the loss in market value, samsung was still worth more than several korean firms combined. Central savings bank of china is seeking more than 8 billion in a hong kong ipo. It would make it the biggest this year. What do we know so far . First of all, this is not a household name to you and i. It is not one of the big four or five when it comes to china, though. It is huge, though. It is huge. It services half of the chinese population. They have 505 million clients in china. It is actually the largest bank in china, by branches. It has got Something Like over 40,000 branches. The terms of the deal, they are looking to raise 8. 1 billion. It could be the largest ipo of the year. 12. 1 billion shares are on offer to fiveeen four dollars dollars a piece. Investors are trying to buy some of the stock. That is about 76 of the total. In terms of the schedule, were looking at pricing by september 20 and trading by september 28. Late last week, we learned that wells fargo fired 5300 people and paid 185 million in fines. Employees were meeting sales goals by creating over 2 million fake accounts. The aftermath has dragged its ceo in front of Congress Next week. Jpmorgan has taken over the crown of largest u. S. Bank after wells fargo lost 15 billion of market capital. This is not the first time there has been this sort of scandal in a large american bank. How does it stack up . The thing investors and analysts are thinking about is this is the first time for him. First time for john stumpf. It has really been described to us as a preeminent retail banker in the u. S. , someone who has this halo effect around him and this is the first time he is joining ranks with his wall street colleagues. People like jamie dimon. This is the first time he has been caught in the same sort of water. Has he accepted responsibility for this . Not exactly. He did a media tour yesterday. He kept saying we. There was very much of a we involved. Im not sure he is there. Weve seen jamie dimon say, this was my fault. Im not sure he will do that. Maybe he will do that when he gets down in washington. There is good news and bad news when you look at investors in italys indebted bank. You know it well now. The good news is, it has a new chief executive, a former cfo of the bank, marco morelli. The bad news, they are now without a chairman. Its a revolving door. We have mr. Morelli on his way in and the chairman on his way out. That was a bit of a surprise. If you remember, he was a strong supporter of the previous ceo. He came out with a Strong Defense when he came under fire, and said, basically, he should remain in that position. The rest, as we know, things change. He was forced out. Morelli, the former cfo at the bank, is now in charge with the rescue plan for this bank. Apple is headed for its first weekly gain of 10 or more in three years. Shares continued to rise in thursday trading. The iphone 7 is off to a faster sales start than usual. In the meantime, apples competition may be easing. Samsung is officially recalling about one million galaxy note 7 phones, after the Consumer ProductSafety Commission found they could catch fire from a battery flaw. They handed apple a gift as the new iphone was launching. Iphone and samsung, particularly in developed markets, they trade off market share. You have to think that the iphone 7 line is going to pick up some market share from samsung because of the hangover from this battery issue and from the recall. And again, that is coming at the perfect time for apple, coming off this nine months of unprecedented declining iphone sales. Ramy welcome back. Im ramy inocencio. Under the new president , argentina has started to institute ambitious financial reforms. This week, the government invited Business Leaders to buenos aires to see the impact of those changes. Bloombergs Erik Schatzker was there. In his exclusive interview, he asked the president how he plans to solve the chronic economic problems. You have accomplished much. You have settled with the holdouts, for example. You removed some trade barriers. You have liberalized the Foreign Exchange regime. And many other things, very important steps. As you point out, its not quite enough. You are seeking to do more. I want to know what more you can do, practically, realistically. What can you accomplish . What is within sight . We are working hard to continue reducing taxes. We have launched the most important Infrastructure Program in our history. There is another opportunity there for the most Important Companies around the world. We need roads, trains, ports, energy, pipelines. We are starting to build them. Because to increase our production, we have to connect such a huge country like argentina. We are working close with the leaders of the country, political leaders, unions, companies, to work under productivity programs. How can we reduce costs . How can argentina come back to be competitive . We are all working on that idea. Improving our ways of production, improving our education system. What is your top priority . Something you hope to achieve in the next six months . What is at the top of your list . I have three main objectives reduce poverty. I am talking about policy. What can you do . You cant eliminate poverty in six months. That will take decades. I expect that within one decade, we will finish with poverty in argentina. No poverty in a decade . That is an ambitious goal. Lets go back to the six months. We are working hard to continue building Strategic Alliance with Different Countries around the world. We have one with china. We are working with japan, with korea. We are working with the European Union. We have exchanged our first proposals. We are working with brazil. It is coming out of a very severe crisis and is our principal partner. This is another priority. One critical test of your credibility, lets say, and your ability to execute is the budget. Argentinas deficit last year was 5. 4 of gdp. The primary deficit, enormous. You promised to lower it. 4. 8 this year. What about next year . We want to go around 4 . We have to go naturally, because socially, we cannot assume to go another way. We have to accept that this has been a disaster in terms of increasing the deficit in the last 10 years. Everybody has to understand that. We have to do it step by step. We are committed, and we are going to fulfill that commitment of reducing every year, reducing inflation. We are cutting down inflation. We have reduced it to half of what it used to be. We are going to continue working to reach onedigit inflation in two years. We will cut the deficit. Ramy straight ahead, more compelling conversations with leaders in business and politics, including bob dudley and marc benioff. And controversial brexit advocate nigel farage. Big names take on the weeks hottest topics. This is bloomberg. There is a wonderful phrase. You and i were chatting about it, ticking time bombs in europe. From the broader perspective, where are the ticking time bombs . Is it banks . Is it leverage . Is it those debtladen companies . Right, when i said this, i was referring to the companies that have been piling a lot of debt on the Balance Sheet on the back of financially engineered statements. Engineered Financial Statements. That is still the case. I think one of the major issues in europe, it is what made it interesting to us and still remains, is investors in europe arent doing the hard work of trying to dig into those Financial Statements and understanding the economic realities that lie beneath. Meanwhile, companies are borrowing at extremely cheap rates. And these pressures just build up until one