David this is not the first time mr. Krein has not thats had to come out mr. Cryan had to come out and say we are ok. Alix it is not a liquidity issue, it is a confidence issue. That will be a key point. David we have a lot to talk about. A terrific guest to help us. We are going to be speaking live with Stephan Engels. Plans to cut almost 10,000 jobs and suspend dividends. We will be joined by steven ratner. By steve rattner. The place for the record the race for the white house. First, jonathan is here with the market. Jonathan features here in the United States, a little bit with, but the spillover the ftse down by. 9 . It it is concerns of the house of Deutsche Bank continues to grow. Deutsche bank down almost 9 and one point. We are negative for on the session so far. Bloomberg dollar index about. 3 . It is risk off and commodities. W ti and brent soft. What we have seen, safe haven bids. Poor Government Bonds perform well. Yields lower right across the curve in germany. Negative all the way out to 15 years. Alix i want to peel it back a little bit. Deutsche bank, you see their, 4 . 11 euros, down it was down 13 girl are in the markets it off those session lows, john cryan coming out saying they have 251 billion euros reserved. They are wellcapitalized. The tier one bond issues is the first to take a loss in the event of any crisis is now trading at . 69 on the dollar. Markets not believing cryan at the moment. Commerzbank, troubles of its own, cutting over hsbc calls revenue targets quite ambitious. Socgen also getting knocked down 3 . knocked down u. S. Banks, the dow dragged lower yesterday might Deutsche Bank. You see it continuing here for the week. We have wells fargo, one of the worst off by 3 . You have new york, oregon, calling to separate the chairman and ceo. The california treasury now calling for stop to resign calling for stumpf to resign. Jonathan Deutsche Bank the catalyst for the conversation this morning. Alisa martinuzzi will join us this morning. Alan crawford is in berlin. What role will the German Government play . Some clients reducing their exposure could walk us through that. Elisa what was learned yesterday is some hedge funds will lose part of their positions, cast positions cash positions. This is a very small part of the business. It is a signal of the perception among clients which is the call of the bank. That is feeding through into the Market Reaction we are seeing. Prompted a statement from the ceo where he is standing by the stability of the company. Very comfortable liquidity buffers. Jonathan lets get the quote from john cryan. The first paragraph, you will test you wouldve seen the speculation in the medium that it is causing on justify concerns. We should consider the biggest picture. Deutsche bank has more than 20 million clients. In that context, it it is a small chunk of in the context. It is a small chunk of clients. What does the ceo need to do . Elisa it is clear that his hands are somewhat tied. Has prompted the selloff been this potential 14 billion fine that the doj has requested president ial mortgage sales. Onil there is some clarity whether this figure may come down, there is not much they can do. It will determine how much capital the bank will need. Until that, weve got to sit tight. Jonathan i wanted bring you went to talk politics. This is not just a german story, it is a european story. Deutsche bank must be tackled in a reasonable period. There is a message in that. Are may be there may well be. The message is very much to clamp down on any kind of speculation whatsoever. We have just had the Government Press conference here. The spokespeople were peppered with questions about Deutsche Bank. They are being extremely careful. There is no talk whatsoever of any contingency. In fact they were asked about the fact that the german chancellor talked with obama yesterday evening. They talked about syria, ukraine and they were asked if they talked about dutch bank. The answer was no. They are extremely aware of the sensitivities here. They are trying to calm down clamp down on any of that. Peculation david put yourself in Angela Merkels shoes, Deutsche Bank is not another bank to germany. This is terribly important to german people. What can she do to give reassurance about making the situation worse . At the moment, and a very merkel way, she is steering clear of the topic in public. This is a hugely controversial that on the one hand, this is a systemic bank. It supplies the famous mazo stein to all of these families and small and middle sized companies. On the other hand, she cant be seen to be giving this giving undue help giving undue help to banks in general. So it is a real dilemma for the chancellor. I should say it is a dilemma that she is used to. The first main crisis of her first term in office. She is experienced in these office. Merkel can dohat is go to a Reinsurance Company and say why dont you buy a really big stake in Deutsche Bank . Worry, i have a i have your back. Say this bank going to a sovereign wealth fund. Do you feel those capital raises on the table . Elisa there were indeed discussions between the two bigger banks, Deutsche Bank and commerzbank. The answer was no. We understand the discussions have taken place. Until there is a clear sense of will comeegal bill to, it is going to be difficult for any private investor to commit. Point is having a sense of what these legal bills are going to come to. Alix that is a great point. To look at what Deutsche Banks business actually is in terms of liquidity. It is a Retail Banking business. It is a lot it is very different from the other banks that went on in the 2008 financial crisis. Elisa there typically known as being a sticky deposit they are typically known as being a sticky deposit. It makes it somewhat more stable, not to mention the ecb is on tap for potential liquidity in the interim. It is not just investment inking volatile and moving their deposits. Jonathan a lisa martinuzzi, thank you for joining us. Alan crawford, joining us from berlin. About return on and return of capital. The real issue, to convert that, you know any step in, you need to move south of the minimum. 5. 215. Do you know where we are . 10. We are not there. The real concern for the cocoas is the suspension of coupons. Were not there yet either. David the person who has the who is a bill bear trust lawyer sitting in d. C. He never thought he would be affecting International Monetary issues. Alix what does that lead to for the markets . You are not going to convert the debt, however if you are a traitor and you own a cocoa, you probably own high yields. Youre probably going to sell highyield. That is where the contagion could come through. There is a huge short on etf for highyield Corporate Bond etfs. That is the danger. Lets get an update on what is making headlines outside of the taylor leaders are in jerusalem for the funeral of former Prime Minister shimon perez. Bill clinton was president dan. He started off life as israels brightest student, became the best teacher and ended up the biggest dreamer. Years in a state of constant wonder. Potentialnbelievable of all the rest of us. Taylor president obama also spoke. He said perez showed of the zionist ideal. Hoboken, new jersey, investigators are looking for asters looking for answers after the fatal commuter train crash. It smashed through a bumper and into a transition. One key question is how fast the train was going. Golf course in south korea will be the site of the u. S. Missile Defense System designed to defend against north korea attacks. It is 125 miles from seoul. It was designed by jack nicholas. Northve comes weeks after korea conducted its fifth nuclear test. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. I am taylor riggs, this is bloomberg. Onathan thank you very much coming up, capital concerns. Another german lender struggling to retain its footing. Engels will be joining us for more on the banks strategy. This is bloomberg. Alix this is bloomberg. Bad run from some lenders. What left investors wondering when it is all going to and. Laidler. Is ben i want to dig into Deutsche Bank. We can talk about Systemic Risk possibility. I spoke about it. At the moment there is a lot of uncertainty. The top of them is the fed. The elections in the u. S. , the chinese economy. What i want to say is he is not backing away from that counterparty issues with Deutsche Bank. He is there to support Morgan Stanley. Isnt this what is going to keep this from exploding . Capital extra capital being taken over by banks. You have seen a lot of policy stimulus come through. I dont see this as a student thats as a systemic issue. From the market side, we are being vulnerable here. We are set up with growth expectations too high. Valuations up very high. Sentiment is a bit too bullish. Despite all of this, i think we are being set up for something. Economic policy uncertainty globally is very high. That has real consequent just. Alix where it plays out into the markets. Very high position in Corporate Bond etfs. That spreads to high yields. Is that where we are going to see the markets take off . Ben one of the transmission mechanisms, the other equities are fairly well owned. People are very long in the u. S. Equities as a relative safe haven. We see some contagion there. Very overweight. Vulnerability. There is no earnings traction right now. Earnings expectations are very high for next year. We are about to go to Third Quarter Fourth Quarter which is a negative flat. Jonathan you mentioned volatility. Euro stoxx 50 volatility, where is it . It is right down here, low, low, low since the brexit referendum. Ben you have this huge discrepancy between complacency. There are very low levels of volatility yet Economic Uncertainty at levels which we have almost never seen. Hat is real consequences that means when you do the analysis, that means lower earnings, lower gdp growth. That is to be of reflected in markets. David what does that say you go . And what do you stay away from . Ben 6 to 7 . Were looking for some pullback. We do think markets are range bound. We got a little ahead of ourselves. The u. S. Remains some relative safe haven shortterm. The other end is emerging markets. And beginning of a real structural growth story. It seems to be in a close cyclicals, risk on asset class. Alix something were seeing now a Deutsche Bank is want to bleed into central bank action. It keeps the fed on hold even longer. Is that a potential result . What is the implication for markets . Ben where lower for much love we are on lower for longer yields. That is very good for yields assets. Look at some sectors we own, the bond proxy is higher than yield e. M. , it is becoming a yields story rather than a growth story. It is a big driver. Jonathan that is exactly what the banks dont want, right . The narrative that got some traction in the last month is Central Banks might take some notice of what policy is doing to profitability. Are they going to continue to disregard that . Ben the boj has this yield curve targeting strategy. Policymakers are aware of all of this. As an equity investor, it doesnt mean you need to look at overweight financials here. Banks look cheap. We think that is fair. Alix ben laidler is sticking with us. David coming up, steve rattner. He is going to be talking about the state of the bank, plus the race for the white house. This is bloomberg. Alix this is bloomberg. Hsbc equity strategist is still with us. My interview with james gorman. His view with your selections can you rank those for us . Ben fed, u. S. Elections, china. There is always a risk around the fed. They want to get off zero, gdp, earnings and expectation not there. We are walking this tight rope of very high valuations. The other hand, china has done it good job of has done a good job of rebalancing the economy. I think that is overdone. My growth expectations too high. Growth expectation is too high. With that payrolls. We have got payrolls. Big growth expectations and it looks unrealistic. David it is going to come next quarter, next quarter. Go back to the fed. You mentioned emerging markets. How much of that is structural growth . How much is a prediction of a weak dollar . Ben to state strategies. I think it is just a weak dollar. A lot of pressure off a very depressed under on, cheap asset class. What is really interesting about e. M. , why i keep talking about e. M. The owning story is turning around. It is a story coming off extremely low levels of e. M. Because very cheap, very quickly. Therefore you need to be early. David where do you want to go in e. M. . Ben i think you need to get as cyclical as you can. We are coming off the bottom. Russia, brazil, turkey, south africa, maybe some of the places most under owned, most depressed. Alix do if we see risk permeating the market if we see risk premeeting the market, what is the correct e. M. Are u. S. Or your connect these . Pullback for Global Equities between here and year end. I am saying we are vulnerable to something. We have had eight pullbacks since 2009. You look at what has driven them off, completely different. It could be anything. What do you do . You buy emerging markets. I think it is your opportunity to buy yen. Alix hedging is hard when you wind up having the defensive stocks. Where do you go for safety like treasuries . How do you hedge them on that risk . Ben i think these high dividend yields, i think they go higher. Theseig rotation out of defensive Growth Stocks into value. That is a big mistake. We are being set up for growth disappointment. 10 years back at 115. Alix ben, good to see you. Definitely counterintuitive. Jonathan capital concerns it another german lender struggling to gain its footing after he plan to cut more than 9000 jobs. Stephan engels, commerzbank chief Financial Officer will join us more on the banks strategy. Quities down throughout europe Deutsche Bank, off the lows are still down by almost 5 on the session p it we talked german banking and the future of the eurozone next. This is bloomberg. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Jonathan from new york city, this is bloomberg. Im Jonathan Ferro. On the ftse, we trade lower by. 4 . Deutsche bank and commerzbank with the banks down 1. 2 . Deutsche Bank Touching a new record low in todays session. This is how we traded the other Asset Classes on the u. S. 10 year yields, down by one basis points. The focus is on the german lenders. Lower bynk trading 6. 7 . A day after the ceo announced his new job cuts. We now have an interview with the cfo and Caroline Hyde. Caroline thank you on bloomberg tv and radio we are joined by the cfo, Stephan Engels of commerzbank. I want to talk your strategy at you ended your speech with the fact you are convinced you can achieve through 2020 target. Income ratio 61 . Hsbc still says their welloff. Stefan i want to thank you for having the opportunity and im convinced because it is the right strategy and the Management Team has delivered on the strategy over the first over the last four years. The important ones is in a very difficult environment. Caroline we have to put ourselves into context. Today feels like german banking on the edge it we have or the edge. What is the threat of the german concerns to your own change in strategy . Stefan we have seen over the whole week a very negative martin sentiment this Market Sentiment across europe and indeed it has been not a very nice day for the german banking stock but i think that is a very shortterm view. I am convinced we will get forward after the next week. Caroline is there risk on commerzbank . Stephan i am not prepared to. Omment, but im relaxed caroline quite you think we are able to get to this in the longterm . What will help Deutsche Bank to convince the market that their Capital Position is strong . Stephan that is the job that Deutsche Bank needs to do. If you take into account lower risk profile of the overall bank. Caroline is it wrong for the whole Banking Sector be Banking Sector to be tainted . Stephan coming from the low Interest Rate environment which is a burden and secondly regulatory still is a little bit difficult to understand. That puts some question marks around it. Caroline is regulation going to far for European Banks . Stephan i think of regulation needs to be predictable and that is the path that investors are missing. Caroline are rates too low . To startecb need moving away from negative rates . Stephan ecb if they want to decide, it is true that negative Interest Rates are not something that intuitively works together with the classical banking models. Caroline i am joined by Stephan Engels. Talking about competitives desk competitors being driven out of the german market. Stephan as far as we see it now, we have a number of customers that is been across the market, especially for those who have been closing down branches. That is white we believe we can gain that is why we believe we can can we can gain substantial market caroline was the government involved in your change of strategy . Stephan the government as a shareholder was not directly involved. The government has representation and the full vote has up the full board has agreed to the new strategy yesterday. Caroline should the government be talking to Deutsche Bank . Stephan that is something you need to talk to the government about. Caroline when he talked to revelatory costs, rates being too low, what about consolidation within the german sector . Is that something you expect to happen . Stephan i dont expect that to happen shortterm. Caroline in the longerterm . Stephan it is something very hard to predict. Caroline would you be willing to put your money to work to buy out smaller competitors . Stephan what we are focusing on his strategy and that is the focus for the Management Team. Caroline can you rule out Deutsche Bank and commerzbank would come together . Stephan ever . I think that is a very how would i say very bad question. Caroline 2020 . Stephan no, i dont see that as the path. Caroline gives an idea of dividend. Give us an idea of dividend. Dividend having to be put on the side. When would you see the dividend being reinstated . Stephan 2017 in 2018 will be the two main restructuring years. For that reason and to keep our current position at a couple level, we have decided to suspend dividend. Having said that, it is clear that when we finish those three years, it is the right moment to discuss them again. Caroline i mentioned the job cuts, 9600. 7300 to go, can you give us a breakdown where they are going to be reined back from . Thisan we have to assume cut will go across the bank with a clear focus on office units. Exactly where they will go is something we need to go into negotiations with our unions. We cannot disclose more details today. Caroline i am joined by Stephan Engels, chief Financial Officer of commerzbank. Give us a sense of what is needed to see the Banking Sector flourish and start to move forward . When will return on equity rise more than 6 . Stephan i believe if we focus our Business Model strongly toward those things where we have a good track record, if we digitalized and goat stronger, it is a good chance the Banking Industry and return desk can return to return to that are adequate. It is clear that in the current negative Interest Rate net return is 10 something that is very hard to achieve. As he said, once the Interest Rate will return to a more normalized model, we have a chance to get back to capital. Caroline are banks speaking to the ecb . Making clear theres been paying . Mario draghi said your Net Interest Income has not been affected by negative rates. Do you agree . Stephan i do not agree in that sense. Im not sure he meant it that way. Net income has been affected especially in germany where we have the loan to deposit ratio. Caroline how can you become more efficient . German banks are the least efficient when it comes to cost to income ratio. Your aim is 60 by 2020. That is a lot higher than spain, estonia it what more can you do . Estonia. What more can you do . It. Han it has two parts to banking in germany has been. Elatively price sensitive that means the income part is under pressure. That is why we need to work on the cost part is the income ratio below 50 in a more normalized Interest Rate environment. Caroline digitalization is something you reiterated today. Syntactic, why do you think it has been so slow to been adopted by a soft by yourself . A verytantec strong point that they have. They do it very quickly but they lack scale. If you look for example the digital household book that we offer our books for about 450,000 customers which is about a lot more than syntax have in germany. We like the challenge. It is good to pick our brains and also challenges us in our customer offering. Caroline what is your perspective on germany at the moment . Germany asried that a country of growth . Stephan germany has grown Economic Growth over the past years. It is at least positive so i am not caroline we had three key concerns that a dent in profitability coming from the chief executive, one was rates, one was competition and key among them was a regulation p out of those three, what is your most concern . Stephan the negative Interest Rate environment cousin that is something environment because that is something regulatory is something we need to watch and comply with. We need to find out what is the message we get and how can we adapt our model . The tube to is focus on. Caroline Stephan Engels, great to have you both on Bloomberg Television and bloomberg radio. One billion euros is how much they could increase revenues by if Interest Rates were to rise. Maybe a call out to mario draghi. Jonathan that was Caroline Hyde with steffen angles. The message just with care with Stephan Engels. After 2018. Until go back to this bloomberg editorial on Deutsche Bank. They have raised 19 billion 2009 two 2015. , do you know how much they have given back two dozen nine to to 2015. 009 do you know how much they have given the back . Five. Alix he did not take the bait on risk. He said no, not yet. Jonathan coming up, immediate shakeup. A possible merger with viacom. And ceo next. Er jonathan this is bloomberg. Im Jonathan Ferro. Coming up later, jason furman, white House Counsel and economic advisers. David this is bloomberg. The story dominating the media world is the possible merger with viacom with cbs. Both companies were told to at least consider the possibility and the market seem to like the idea. This blue cbs stock are both up nicely. Joining us now is someone who ,nows media and a viacom well michael is the former president of mtv. Welcome to the program. O back to viacom what went wrong with viacom . We can put up a little chart over the last five years. What would wrong . What went wrong . Can cbs fix it . Michael back him as the incredible bands just incredible brands. Incredible brands. Nickelodeon has not created anything new since spongebob. Disney has shows like dog with a blog and all of the shows that our current. Overall, what has happened with a viacom is they have not nurtured creativity. There are more interested in serving creditors then nurturing creative talent. Was that a Strategic Direction for them . Michael they strip mined the business. They pumped much cash of the business and used the cash to buy back stock instead of making the right investment in content. Nothing is more embarrassing than paramount as a studio. Paramount is taking a big writedown, 4 million plus on films like teenage mutant Ninja Turtles and ben hur. David they dont have great franchises anymore. Theyve got a pretty laden out seat and what do they just Balance Sheet they got a pretty laden Balance Sheet. Logicl theres a lot of and putting the company back together. One of them, their peers. The largest company, disney and Nbc Universal which has diversified across a bunch of different assets. The other thing is they need more leverage. Cbs and viacom need more leverage with cable operators. If you put the two companies together, theyve got 22 of all viewing and only 14 of all fees from operators. David that is an opportunity . It is such a good idea, what is taking long . Michael it took a while for the Redstone Family to get rid of the viacom management. We forget that it is a control company cbs and viacom are control companies. The boards serve at the pleasure of the Redstone Family. They really needed to figure out a way in which they could create the rationale for these two companies to come together. David , to trigger another story which is twitter. They talk about disney possibly buying twitter. What does twitter offer at this point . What could you do to twitter to fix it . If youy clients step back and people talk about twitter. Twitter is about making popular culture. When somebody says something in this campaign, nobody wonders where they said it. If you look at s like black lives matter, they are all on twitter. Tter has 137 Million Euros 137 million users every day. There is not an Entertainment Company out there that has that much relevance. It becomes a very valuable for disney. People wonder doesnt make sense . It allows disney to get into a place where it is not today. It allows them to build a direct to consumer business. The content that is on twitter is live and it is live sports. They just air to their first football game. David i just watched it. Michael with 137 Million Euros million users, you you have to be sure it is going to grow. David michael wolf, thank you so much for joining us today. Alix the market stretching just stressing over its liquidity. Here is the fact Deutsche Bank capital is the line in orange. Its peers are about 12. 8 . The trigger, it needs to fall below 5. 125 . Where well above that level. John cryan says to his employees today that the bank has 215 billion euros in liquidity. Joining us now is a steve rattner. Steve, the market not buying it. What the facts are, what john cryan is saying. What do you tell john cryan . Steve the facts are not clear. This is a fastmoving situation. Liquidity is a very ephemeral concept. Liquidity at one moment can ceased to be liquidity at the next moment. Secondly when a bank is trading at. 25, you have to raise questions about what you have on the asset side of that Balance Sheet and whether that is an active book number. We dont know how far they are away in reality. We are in one of those moments where we are at an inflection point. If customer stay loyal and they can work their way through this, i think the lesson of 2008 is the possibility they will need liquidity. Jonathan walk me through this blurred line because we have been through this with the greek banks. There what is happening with the likes of Deutsche Bank . Steve we had the same exact issue at Lehman Brothers where the view was they were not solvent and they were allowed to liquidate. It was a liquidity problem just as some of the big banks had. It is a very complicated concept. The practical reality is i do not believe the German Government or any part of europe is going to let Deutsche Bank go down. The question is do they need help . How much . Do they go to the bail in route which has new Collateral Damage . To providingo more . Alix some of the hedge funds pulled back. The corporate customers in the retail customers. Which bucket would be the trigger point or Deutsche Bank . Steve probably the most important are the deposits. Deposits is what funds of the Balance Sheet. When he leaves deposits, when you lose deposits, that is where you run into problems. Life can go on. It is not a solvency issue. David gives a timeline. Can john cryan figure out his capital situation . Steve that is another complication. The answer is no, he cannot really be sure it i have no idea what is going on. You would think in fairness of Deutsche Bank, it would be a nice thing if the Justice Department would try to move at a speedy pace that would try to move at a speedy pace. Would try to move at a speedy pace. David the Justice Department likes to take its sweet time. They are coming up to an end of the term. That might give them some incentive. Is bill bear conscious of what is going on in the marketplace . With that affect his desire to get a deal done more quickly . Steve i am sure he is conscious. Number two, i think in these kind of situations, government can and should move faster. They have a obligation to try. Punishe not here to people, they are guilty help. They have an obligation. I think they will recognize that. If they sayo 14 billion, women i get it resolved. We may not get a result. David we have a president ial lesson coming this year i dont know if you know this. You have been supporting Hillary Clinton. Whether it is Hillary Clinton or donald trump, they are addressing trade. A bit morep is belligerent about it. What is trade so important . Metaphor foris a the real problem with our jobs. When you look at the jobs picture in this country david lets put up a chart. Steve when you put up a jobs , we have had a Record Number of months of job creation and we have had the unemployment dropped to 4. 9 since the recession ended. Take a longer look going back to 2000 and see what is happening sector by sector. Have things in the service sector, Education Health starting at the top. The orange line, leisure and hospitality. Blue line, professional services. All of those are above the line of total jobs. We have had this nice job creation. When you look below the line, you see weakness in construction, media it is not been a robust environment. Most of all, look at the gray line at the bottom which is manufacturing. You see that manufacturing has been decimated. Manufacturing loss 6 million jobs between 2000 and 2009. He gained back 900 jobs during recovery but as we sit here today, so far in 2016, manufacturing has lost 50,000 jobs. The rest of the economy is getting jobs. David those are rust belt voters right in the swing states. Steve youve got a lot of people done ok. This is real what trump is talking about. Those first 20 minutes of the debate when he was on his game, he made great arguments that mrs. Clinton had trouble rebutting. Alix great to get your perspective. Thank you for joining us. Our bloomberg personal assets. Good to see you. Jonathan coming up, shares of Deutsche Bank hitting a new low. Where off the lows. We are off the lows here it European Banking analysts will speak to us on the fallout in the financials. New york, this is bloomberg. David banks in turmoil. Concern over the health of Deutsche Bank rattles investors and send shares lower around the world. The bank is strong and there is no basis of speculation on john cryan leaving. Alix that was said to be the best corner of the year for global stocks ending on a sour note. David welcome to the second hour of bloomberg. With jonathanin ferro and alix steel. It is all about Deutsche Bank. And the Banking System more broadly. At this point the debt is lowered. Equity down 9 earlier in the session. Also the low has stabilized. Another morning where john cryan wakes up with a headache. The contingent convertible bond, the bonds you will see the stress of the first sign of any kind of laws of the market buying any kind of boost by john cryan. David i was struck by the comment that john cryan does not know where he is in terms of capital structure. Alix had you know if you do not know what the fine will be. Liquidity . Y raise david we have a lot of news to get through in the next two hours with great interviews, fromding we just heard stefan ingles, the chief Financial Officer, and we will the morganwith stanley head of global Interest Rates, strategy on global yields. First, will you take us to the markets . Jonathan 19 minutes from the cache open in new york city. Flat around that of the session. In europe, nothing marginal about it. Down by three quarters. Deutsche bank down. The two biggest lenders in germany in focus once again. And the fx market, a stronger dollar. Of one third of 1 . Risk all flows, commodities as well, brent down by 9 10. Wti down by one third. A47 handle on the session. A bidvernment bonds, and today as well. 10 year yields coming in in the United States by two basis points. Gilt negatives on four basis points. The story is the banks. Alix lets take a look at 11 euros per under share. At one point it was down 13 . Ow down by 5 john cryan coming out with a letter to employees say we have 215 billion euros of liquidity. Verydity can dissipate quickly. They contented convertible bonds trading . 69 on the dollar. Commerzbank down by 7 . We had an interview with the cfo who says negative sentiments on make is shortterm and he is relaxed about any countertrend risk, but the market has over such a hold of hsbc id called the terms he laid out ambitious. In one that it of Deutsche Bank and commerzbank leading the european stocks lower. U. S. Banks got pulled down. Premarkets are up, but the last week was rough with a little stabilization. Wells fargo of by a quarter of 1 . This is the one week tally. Wells fargo the worst 53 with problems of its own. New york is saying the stumpf role of ceo should be separated here at wells fargo drama not over yet either. Jonathan Deutsche Bank, get the latest on the story with our team from around the world. From london, the stock touching a new record low. And in berlin. What, if any, the government will play. The stumpf hedge funds has it. Uced exposure a letter to employees you will have seen speculation in the media that hedge funds activity activity with us. That is causing unjustified concern. Cryans words we should consider the Bigger Picture of clients. Million q we have some of these hedge funds with reduced exposure. Is not that positive. I think it is important to put it into context. Since 2007, Deutsche Bank has tripled the highquality liquid assets with liquidity reserves in excess of 220 billion euros. Funds represent a small fraction of the total liquidity reserves. Also, it is important to remember Deutsche Bank has access to Central Bank Liquidity facilities. Ecb main finance operations, longterm finance and, worst Case Scenario coming emergency liquidity assistance from the National Central bank. It is important to remember balance hasks changed significantly since the financial crisis. Of funding is now from more Stable Funding resources like retail deposits, transaction deposits, Wealth Management deposits. It is important to put this into context. Jonathan liquidity would be there from bla. My question at the moment, the focus on the a t1, we have ripped through the lows of february in the last week. This morning with a 69 handle, my question is, never mind trigger and conversion, how far we from ending coupons . What scenario would force that hand . That is a key question which deutsche needs to address. Available, it is relatively low. It is around one billion euros at the end of 2015. Clearly, there is uncertain to around that figure. Hey need to address that it is important to know we are talking about the suspension of true funds rather than the writedown of securities. The trigger levels for the writedown of securities is 75 . That would imply more than 20 billion euros of a capital hit. Youre talking about the suspension of true funds. Jonathan lets talk about politics. At the heart of it is chancellor Angela Merkel and issues in italy where the germans told the italians you need to follow procedures. Is that in the mind of the German Government . At the moment, there is no indication of that. Clampingn concern is down on any speculation surrounding Deutsche Bank. We heard the Government Press from the relevant ministries. They do not want to talk about any kind ofated to Contingency Planning whatsoever. We asked about the fact that chancellor merkel talked with obama yesterday. They talked about ukraine, but not about Deutsche Bank. And the Deutsche Bank government, the government is between a rock and a hard place because they cannot say we will backstop you are that will send red flags to investors. It seems like now until the end of the year they cannot do anything until they find out the from thehe Fine Department of justice. Do we have any time horizon for that . At the moment, we do not. That is a big problem. Saying, that was the department of justice is looking at settling fines with Deutsche Bank and to other banks in one go. Before thepefully elections. Hopefully, we would get some thing in the next weeks. There is no clearer timeline and that. Jonathan thank you. David . Will bringmore, we in the managing director of Stephen Nicholas in london. Financializes in sanctions. Lets start with the question of the reserves, what we know and where they need to go. What reserves do they have and at what point do they need to raise more capital . Otto i cannot hear the last part. Liquidity, bank, there are two aspects. Liquidity and solvency. Have 200 billion in reserves. It is really more of a confidence issue. Over time, some of the questions, there is eventually a run on the bank institutionally. Or even further on depositors. Risk. Certainly a it is the main one for Deutsche Bank at this point. All the solvency side, they have a week capital base that is known. The doj fines will further in turn that. Something needs to be done about that eventually. I would argue that once Deutsche Bank knows what the fines will be, there should be a. Ossibility to raise capital how damaging will that the, basically . How much pressure will be on john cryan to raise capital before hearing from the Justice Department . That is a catch22 situation. Until the bank knows what the fine is, it is very difficult to raise capital. They cynically, if the bank raises a lot, it is like writing a blank check to the doj. Saying give me a bigger fine. You are exposing the bank to the confident risks that are building and clearly present. Alix it seems the other issue has to do with collateral. With lehmans, there was the haircut on the collateral. Lehman had to over collateral lies. Distinction between that scenario and where Deutsche Bank is in terms of their own collateral . Otto collateral, and those related issues, that is what i am referring to with regards to the confidence in the bank. The key question is while the bank has liquidity funding, access, unencumbered access in thele, what happens counterpoint with additional collateral to do business, etc. . That could eventually book restrain on the bank. Alix is it collateral for the banks safer than where they were in 2008 . If your collateral in the that is is at the bund different than mortgagebacked security. Otto it is also important to people mind when some talk about the size of deutsches talents she and relative Deutsche Banks Balance Sheet relative to market cap, they have material at the quality problem or that there is doubt that its as sets are problematic. Some are not particularly well, and there needs to be change in the structure of the Balance Sheets, but i do not think there are indications or suggestions so far that there would be a greater problem. David thanks. That is otto dichtl from stifel nicolaus, head of research for financials. Jonathan coming up, to the bond market where yields plunged to record lows only to bounce back. The head of global Interest Rates strategy from Morgan Stanley joins us next. Equities lower in europe. This is bloomberg. Alix this is bloomberg. Steel on. European semiconductors all see a pop today. Oracle reportedly expressing xps semis. Euros in my eyes are a huge presence in the auto sector. You have the potential of 30 lifting the stock complex. Looking at costco, read earnings by four cents. The idea is they are weathering the price were better than rivals. Sales up 3 . Wrapping it up with lexmarks. No National Security issues. It does mean one more china regulators to sign off on the deal. Technology bid. 40 or 50 in april. That deal is inching closer to getting done. The bond market, u. S. Treasuries, the 10year yield, record lows, no growth, no inflation. There will be a bond tantrum recalibrating expectations. Wills will stephen steepen. This down to 125 when we trade in the one 50s today . Exactly. We think Central Banks will remain broadly supportive of the bond markets. We dont have the fed hiking rates. We have the European Central their program and december at what the bank of japan did we think is broadly supportive of yields in that region. We think it is straightforward to get yields to 125 on the 10 year. Jonathan the pushback is that is not what will take you down to 125. What will drive me down to 125 . Matthew Economic Data can push us to 125. A tightening in Global Financial 125. Tions can push us to you can see signs of that in the market for the last couple of weeks. From the lows in august we had a mild tightening in conditions. Bond markets have responded. There could be a variety to get us down there. David general risk off will get us there . Is one of theoff factors, that is the beauty of Government Bond factors. When there is risk off, that is where investors go. Alix is it a curve steepen her with the u. S. Election . Matthew the election in the u. S. Is interesting. Our view is it will end with more sustained load old through policies we have been having. The election outcome causes greater uncertainty amongst investors, we would expect the yield curve to steepen. One of the points on the curve that we favor in an election of donald trump, for example, would be the sevenyear point on the yield curve. Liquidity to most investors to the extent there is an increase in expectations of financial stimulus on the longer end of the yield curve. Between the seven year point in the 30 year point could steepen. David one of inflation at donald trump is elected president , fiscally and in terms of trade . Matthew the trade angle is interesting. There are a lot of ways that can go. Certainly, it could be inflationary from the perspective of Closing Exchange with other countries. At the same time, to the extent there is a risk off environment created by the idea of those policies implemented pushing. Own equity prices, for example it is unclear the net effect on inflation expectations. Jonathan you wake up the morning of the elections and you get a President Trump and you expect a curve steepen, i expect he would revise the 125 higher . Matthew that is a good point, but it is unclear which way the yield curve would go in that environment. With the donald trump presidency, what happens with the leadership of the Federal Reserve . We know Janet Yellens term expires in 2018. To the extent that he would like someone else to leave the Federal Reserve, the base case would be he would not extend her term. If i am fed chair janet yellen and i wake up to President Trump and he has questioned my independence, isnt it prudent to hand in my resignation . Matthew i think janet yellen will have a cooler heads about the situation. At the end of the day, to the at thethat she serves pleasure of the president , she could raise her hand. Theink janet yellen has interest of the economy in mind and will take a more pragmatic approach. Jonathan great to have you with us. 125 on the u. S. 10 year yield end. David coming up, james gorman ways and on Deutsche Bank. That is coming up next. This is bloomberg. Alix Deutsche Bank shares dropping to record lows on concerns about the ability to withstand mounting legal costs. Bloomberg spoke to many big lenders, big names, to see if they think the german bank will weather the storm. Our relationship with Deutsche Bank has not changed, and we will support them as best we can through the cycle. The financial ecosystem depends on institutions creating counterparties honorably and helping them through these periods. Ill will be tough for them to raise Equity Capital given how that would be. You put those things together, combined with a weakness in europe, and investors are very cautious about stepping up and taking a long position. If you look at it as a credit risk, they changed the law in germany. 50 billion in senior debt comes before any of the business creditors or depositors, meaning 60 billion and a crisis becomes equity. More than enough for Deutsche Bank to be healthy for a long time. You probably is not imminent, but if you have counterparties and everyone started to pool deposits from Deutsche Bank, it becomes serious quickly. It is an artificial crisis at the white with the potential to become a real one. I do not buy what is coming out of germany with germany not wanting to step in. It is too important to the german economy. I think these are rumors not raised on that. On fact. I think it is a political issue. The government will have to step in if there is a selffulfilling prophecy with share prices going to low. Are trading below book value. There is transitory aspects to that, which we have seen. There are longerterm issues around Business Models. Deutsche bank does not have any issues right now, but the problem is the more people talk about it the harder it becomes. More they will say we dont have issues. I dont think they do, but it is hard for someone to be levered that much. This is an institution that is facing important, Strategic Decisions as we did several years ago, and other institutions have in years in between. Let them sorted out. Everyan the go to stock morning, it is Deutsche Bank and commerzbank. Both equities are lower on the session with Deutsche Bank having a nine handle. T is often the lows commerzbank off by 5. 535 . Teachers in the United States, the dow, marginally lower on the s p 500. Equities story in europe, stocks lower by 72 points on the dax, 0. 71 on the ftse. Coming up, the goto banker for energy deals. The ceo of lack stone and you Partners Joins us from new york city. This is bloomberg. Jonathan from new york this is bloomberg. The market is 60 minutes away from the cash open in new york. Futures were marginally positive, now negative. In europe, upper lows on the dax down. 5 . Down almost 9 . Now down 3 . On the board, here are the moves in the Asset Classes tiered yields on the basis point of the 10year 155 on treasuries. 101. 33. Ryen personal income and spending in the United States was on consensus. Flat, zeroder, increase as opposed to consensus of. 1 increase. Well off of what was going on in july. These numbers are important because of how they feed into the fed and where the economy is going, because of disappointments in the retail area. Jonathan and how they are supported in gdp and household consumption. Business spending is over there, not great. How those stories reconcile at yearend will be big on how gdp comes out. Alix my favorite topic, if you are in Energy Company and need money the first place you go is david foley. He is in charge of one of the Biggest Energy dedicated funds of the u. S. With 7 billion to spend. He has spent 20 of that. Deals are mexicos largest onshore wind farm. Ceo stone energy Partners Joins us now. It is a pleasure to talk to you today. Opec cutting production. They cut production, prices stabilize. What does that mean for your investment . What is notable about events is that it was not a binding agreement. It was an agreement to study it and come back in november. Also what was not included. Nigeria. Out a lot of incremental production, one million a day. Russia, now a member of opec, but was not involved. There are a lot of potential barrels excluded. It is easier to talk about a freeze after you have raised production to the max. They could not do this in november 2014 was because they had a lot of spare capacity. The gulf states have increased 3 billion barrels a day. It is easier to negotiate a freeze when you do not have to hold at a level below your effective maximum. Alix for your investment, does that change your investment thesis, what you are able to. Uy . David f. it may while hope wins out over fear, and it is a constant battle in nice, it may raise value expectations and cause some holders of existing assets. O delay or not get a deal done we are not a hedge fund or we are often building assets. We are trying to mitigate risks. We had Management Teams, affirmative control of the business, playing long while. Playing long ball. Not really change the longterm view of oil prices. I think that if the discussion was not from a position of strength, saudi realizing u. S. Shell production was more resilient. We have had huge cost deflation, basin. Ivity in the i think that that was a surprise for opec, how resilient u. S. Shell is. The part that is being hit the prices, which oil are large offshore developments, those take four years to five years to come online. We have not seen the impact in the north sea and other places that work in the in a High Oil Price environment. I think the saudi realizing it will take longer to the world to blank. In the interim as a cartel looking at cutting a little. If they can cut or freeze one million barrels, they will lose 40 or 50 dollars a barrel. If they raise the price by five dollars, that is 160 million incremental. Rose 160 minus the margin on the barrels, the net, while we wait, they are making 120 million a day. Jonathan you do not want to deal when you only have 20 to work at the moment . Only do oil dont and we invest across the Energy Spectrum with a lot of power. Nvesting, refining, midstream that is a key part of the strategy. If we were narrow just doing oil or just in the u. S. It moves around a lot. We want a very broad scope to invest. We want to build and buy. Oil fromt is exploration, development, building power plants from scratch. We actively mitigate risk. Nkfully, we were able to we are a net seller of the energy folio in 2014, selling 3 billion worth. We did not buy anything, new deals, we invested in existing portfolios with no new investment in 2015. If anything, you would be encouraged to submit that right away. We were cautious. We stopped people believing oil prices that we did not. Those people ended up making investments in 2015. It was a false rally with oil prices collapsing in the summer. Now, this year, things were low enough for long enough that we 1,000,000,005. 2 3 in oil deals. David we will have a new president coming up. Without asking what your election,s on the energy is front and center. How do you accommodate two different approaches for the next four years to eight years as you decide investments . David f. you have seen the to zero. Rate go it is affecting Asset Classes. When we have preferred difference for Pension Funds to give us money, they have 8 before we get participation props at all. We need volatility. Changes in technology or regulatory changes influence by an election create opportunities. It can make it tougher for some parts of business and easier for others, but the volatility causes it to be mispriced. Assets thateek out are mispriced and be a change agent. Management teams, and if theres a great weekend drill it out, hedge oil prices at an attractive level. Looking at the election, two wildcards in november with opec deciding what they will do and a new president elected. Other issues, there has been more vague in terms of policies. On energy, both have been specific. Hillary will be a continuation of obama policies. Donald would be 180 degrees from that. David foley, Blackstone Energy partners. We will ask david where he is investing money in 2016. This is bloomberg. David this is bloomberg. I am david westin in the Hewlett Packard enterprise greenroom. The White House Council of economic advisers chairman. Alix here is your bloomberg is less flash. Each of the five bidders for takata are offering at least 1 billion. Takata may be leaning towards 3. Defective airbags led to the biggest auto recall ever. And talks about supplying organic led displays for iphones according to a person familiar with the matter. Foxs new owner has built apple devices for years. Salesforce lost out on a bid to buy linkedin. It is looking at microsofts proposed acquisition. Salesforce said it would pose a threat to competition and privacy. Microsoft will deliver competition to the management sector where salesforce is the dominant player. I am taylor riggs. This is bloomberg. Alix david foley, blackstone. Nergy partners ceo he deployed nothing last year and did not find a dip or hype. This year here is committed 1 billion in the Permian Basin. Is still with us. Tell us your number one invest the opportunity now. David f. we like buying long oil. Lots of reserves in the ground. Low breakevens. You cannot get a bar again when it is producing. Oil companies are restraining their cash flow. More tangible. It is also yieldoriented. In an era where sovereign debt is zero, yield, we think, is overbought. There are selling contracted assets. Assets in the Development Phase you have to put in more capital for several years until you get a return. , as a drawdown capital fund where we have capital and want to deploy it without competing use, we are finding. Ood opportunities especially in areas out of favor like the north sea. We recently made an investment in the mariner field. Safe,t operator, reliable, and it has been under Development Since 2013. Cost and delay. We got in on the dollar. We will take our share going forward, but end up with a high quality, worldclass oilfield with reserve lines. Analysts say that the north sea is dead and no one will want to invest billions of dollars. You are going away from where the yield is and taking on risk, duration risk, for longerterm capital return. Where else in the u. S. . A lot of Shell Companies had debt with the precash flow nowhere to be found. David f. we had good fortune doing partnership with private companies. In some cases that they did not have the same access to capital as large companies. That the fear has diminished from the first quarter. People forget how suicidal they were in february in the Energy Business and hope is bringing you again. High yield energy went from 19 down to 9 . Equity markets are open with a lot of private at what he. We want to focus our company we want to focus on companies that need our help. Maybe the assets are not der isked. Or we can buy an asset that is perfectly does perfectly divisible. We made half 1 million backing ceo at laredo. We are really looking forward to it. Alix the issue with the permian basis is Everyone Wants to go there. It is the best and cheapest drilling. Acreage is double what it was. Are you paying for the opportunities . David f. the deal we signed in april. The price has run a bit. If they continue to run you comprise the return out of good acreage. We are thrilled that we have made investments already in the area. Alix we are not there yet with the Permian Basin is being too expensive, but getting there . Oil is priced at 50. Level,. at the well good returns. How much of a premium do you want to pay to get the acreage with returns to moderate . Alix how much premium do you want to pay, david foley at blackstone . David f. we will pay for higherquality acreage. Why can we make money when someone else may not . We will do the Technical Analysis to discern. Ive yet to see someone pitch for an investment when they dont have 20 returns on each well. The truth is somewhat different. Amount of substantial work on the geology, the technical assets, discerning how much acreage is in a sweet spot and paying for that. The second deal was in a less mature midland basin. There has to be a little bit of a different view than the vast majority. 20 , do youeturn is need 50 or 70 . Are looking at building a business. It is not just the well. Getting suckered in on a well is a Retail Investment thing to do. We want to build a business and put individual acreage parcels together to have development over multiple years. A business that can go public and be attractive to strategic tires. Something of substance. We have done deals of no debt. , Financial Leverage or not . In an environment with low and volatile prices for two years, we want to take other risks out of it . No debt whatsoever. We have staying power and want a double or better over a fiveyear period. Alix theres over 1 billion waiting to be put to work. Do you feel there is enough assets . I got a few calls at the end of 2015 that i thought might be tapping the watch. Im thankful for being disciplined and not being sucked into the false reality. Cautious ande are disciplined. That is what they like. When you deploy capital, it is easy. The hard part is getting it back. We tried to be disciplined about it. Youre not swinging at every pitch. You have to be discriminating. What they are saying is that they are happy that we deployed the capital we have. We are continuing to look around the world for opportunities. Alix i have 47 more pages of questions for you. David foley, thank you. Jonathan thank you. How do you sum the session so far . Deutsche bank, earlier today, 9 . Almost a complete turnaround with 1. 89 . Commerzbank off the lows as well. Coming up, we take it to commerzbank with the ceo next from new york city. This is bloomberg. Jonathan from new york city this is bloomberg. We are 39minutes from the cash open in new york. The focus seems to be the german lenders. Deutsche bank, at one point, with a 9 . A complete round trip, down by 1. 75. Bank, a round trip as well. Softer by 3. 14 . We have the privilege of catching up with the cfo of commerzbank. Stephan engels spoke to us about the banks position. Veryen we have seen negative Market Sentiment on baking stock not only in germany but across europe. It has been not a very nice day for the german banking stocks. A very that is shortterm view and i am convinced we will get forward after next week. Commerzbank up by half with Deutsche Bank . Stephen im not prepared to comment. I am relaxed. Why do you think we are able to get through this in the long term . What will help Deutsche Bank convince the market their Capital Position is Strong Enough . I think it is an average with the market if you take into account a low risk. For the Banking Sector to be tainted at the moment . Level ofthere is a discussion around the Banking Sector coming from a low Interest Rate environment, which is a burden. Regulatory scope is a little difficult to understand. I think that puts question marks around it. I think that regulation needs to be especially predictable. I think that is the part that investors are missing. Rates, are they too low . Does the ecb need to move away from negative rates . The ecb needs to decide on their target. It is obviously true that lower rates, especially negative Interest Rates, is not something that intuitively works with classical banking models. Im joined by Stephan Engels, the cfo of commerce bank. The new ceo is talking about competitors being driven out of the german market. Who will be driven out . Stephen we have a number of customers, almost one million over four years. Hat has been across the market they have been closing down branches. We have a full commitment to our branch network, that is why we believe we can gain market share. Held bye still partly the government, a legacy of the bailout post financial crisis. Was the government involved in your change of strategy . Stephen the government, as a shareholder, was not involved. The government has , and the full board has agreed to the new strategy yesterday at the meeting. Should the government be talking to Deutsche Bank . Stephen that is something you need to talk to the government about. In terms of regulatory cost, risk eating too low, what about risklidation would being too low, what about consolidation would be in the german sector . I do not expect that. Longerterm . Stephen it is hard to predict. Would it be hard to put money to work to buy out all the competitors . Stephen what we are on is our strategy and that is the focus for the Management Team for the upcoming management orders. Jonathan Caroline Hyde sitting down with commerzbank cfo Stephan Engels. The headline is relaxed about potential risks. The reality is that this bank yesterday announced severe job cut and a suspension of its dividend. David how do you instill confidence . The more you talk about it the less confident. Angela merkel, the more she talks about it the less confidence. Alix she has commerzbank, Deutsche Bank, volkswagen, and the refugee crisis. Lets talk that angle going forward. David the confidence of your customers. Jonathan they believe the negative extension on banks is shortterm. Alix sure. Why not. David good luck. We hope you will win the lottery. Coming up, Morgan Stanley cohead of Wealth Management in an interview with alix steel. This is bloomberg. Jonathan we have 30 minutes from the opening bell in new york city. I am Jonathan Ferro with alix. Teel and david wen heres the picture for you. The dax down by. 5 . The story is the german lenders, session has a the nine handle at one point. Negative almost 9 now down 2 . We could have a firmer dollar, the dollar marginally positive by. 1 . Driving wti the losses in the Asset Classes. Sentiment seems to have stabilized around the conversation on the german lenders. The bond market, or Government Bonds, guilds, treasuries, and bonds, one or two basis points. Forear yields on gilts basis points on the session. Alix Deutsche Bank helping u. S. Futures. At one point s p futures were down 13 points, now up by 2 points led by banks trading higher. The last day of the quarter, apple helping the dow adding 113 points to the dow throughout the month. A different month for apple in september. Lets look at the banks here jpmorgan, wells fargo, b of a, higher. Wells fargo, of 2 10 of 1 . The california treasurer calling on john stumpf to resign. Theyre saying they should separate that chairman and ceo roles. That is negative pr. That reversal in Deutsche Bank is helping to lift u. S. Futures higher. Jonathan lets get the latest on Deutsche Bank. Shrinking share prices down to record lows, increasing problems. Bloomberg Intelligence Joins us from london. Recovery on the equity. Stabilizing, confidence has been smashed this week. Where are we currently . Laste latest news over the 24 hours, it has unfortunately for Deutsche Bank focused speculation on the liquidity speculation in addition to capital concerns. However, we would say the sizable liquidity reserves that they hold where liquid assets should mitigate many of the concerns. The capital concerns are still there. They are not going to go away anytime soon until we get resolution regarding the settlement with the doj. Jonathan can you walk us through where we are with the potential over the last couple of weeks . On the equity side the stock has been smashed. What we are talking about is not them being converted, it is about the suspension of coupons. Can you walk us through that . Arjun sure. The issue really is regarding the ability to service the coupons and additional debt. Availablended from distributable items. Unfortunately, there is little clarity over the size of the adi. Accounta complex german. Also, the banks, there has been a lack of disclosure on that front. As a result, the market is concerned. You also have this looming overhang of a potentially sizable legal settlement from the doj. That is their ability to pay these blue funds. Jonathan the reply from john the latest from employees saying you have seen speculation in the media that Hedge Fund Clients have reduced activity causing unjustified concerns. Deutsche bank has overall 20 million clients. Media ares in the fraction of those. The question is is that the beginning of diminishing confidence in the banks . David john cryan is right to put it in a broader perspective, but what is the next shoe to drop . Look at the broader Banking Sector. Jpmorgan Asset Management cohead is joining us. Thank you for coming. We have a specific situation with Deutsche Bank and commerzbank, then the broader sector. If someone looks at portfolios , does thisments change your view about the Banking Sector overall . No. Have everyrs incentive to get this right with issues involving earnings, pressures on earnings, it is well understood by markets. This does not change the base case of you that we are modestly overweight stocks versus bonds. Europe, you have to look at what is priced into the markets. Shares at threeyear lows in valuations and at 10year averages. David that is european equities, what about financials in europe . You have a different viewpoint . We have been neutral europe overall. That has been driven by concerns of European Banks and pressures on earnings given the low rate environment. We think, well understood by markets and something that markets have been factoring into price for some time. Alix there is a large Corporate Bond etf. If you wanted Deutsche Bank cocoa bond with a contingent convertible bond, if we get to the point that it converts to equity and you are forced to sell, you have more losses, and are forced to sell, does this windup bursting the search for yield we have seen . That is not our base case review. Case view we think if we think about the macro picture, we do not see a recession in the u. S. In the next 12 months. If you go back before the summer months when there were worries about slower gdp, the fears following the brexit, a hawkish fed in september, september rate moves, most investors missed the rally of the summer. There are always reasons to be concerned. What is important is not to take your eye off of the base case view. Ours is low risk of u. S. Recession, modestly overweight stocks, including markets around the world. Alix when you look at where you would go to hedge that, you have are expensive. Y earlier they were volatile. Is it risky to play if you want to hedge your base case . A great question, but you have seen some Consumer Discretionary stocks rally a bit. Some of the bond proxy starting to move in a negative direction. If you get to the bond discussion, we still think that bonds play an Important Role in diversification. There is pressure on correlation breaking down, but we think the risk of that is fairly low. You might see a small slice of that, but overall bonds play an Important Role. Ofht now, the biggest risk that correlation breaking down , which wesh show dont see. Anything that will raise rates higher based on growth in the u. S. Is good for stocks. An advocate of diversification in portfolios. We put up a chart on credit withe showing the degree which assets around the world are highly correlated, making it more difficult to find noncorrelated assets. What is it do as you seek to diversify . You hit the nail on the head it is getting harder. Looking at the next 10 to 15 years, we expect lower returns from stocks and bonds. A balanced portfolio has been 8 , we think it will be more 5. 5 or 6 . Investors need to think about different sources of return. Higher correlation among assess is raising and diversification will be harder to find her do you need to search for it in different parts of the market. Things like liquid real estate . Emerging markets . There is no such thing as a free lunch. You give up something for each one of those things. Where do you look . Andt is being more tactical using the liquidity premium. It is trying to find better sources of return from active management. All of the above. David talk about active management. How do you seek out active management, and dont you have to pay for it in performance fees . You absolutely do when you look at mutual fund flows, there has been 250 billion out of active mutual equity fund. Risk assets have done very well. 150 billion has gone in to actively managed bond funds. Underly managed funds are pressure in terms of low, and you pay for active energy meant, but investors will need to find diversified alpha. Alix we are seeing in Deutsche Bank and commerzbank, what does to your perspective on centralbank action . Withit pull back the fed more policy from the ecb . Can you invest around that . We think the fed will raise in december. That is being priced in by markets at a 50 chance. Anyo not think this causes real, unforeseen moves by policymakers. Makersid before, policy and europe have every incentive to get this right and are prepared. You are seeing that in the action today. Alix we hear that a lot. A lot of calm. David fingers crossed. It is good to have you. Management. Et he is great to have with us. For an uptodate outside the business world, we will go to taylor riggs. Taylor a new poll shows Hillary Clinton has increased her lead in a battleground state. Percent lead, a twopoint increase over the last time the poll was published in august. Only 4 of florida voters are undecided. The two Top Republicans in congress having second thoughts about allowing 9 11 victims to sue saudi arabia. Mcconnelland mitch says it could open u. S. Soldiers overseas to retaliation by foreign governments and are willing to rewrite the measure. Congress overrode the president ial veto of the bill. A golf course in south korea will be the site of the u. S. Missile system designed to defend against north korea. It will be at the sky hill country club, 425 miles from so. By jackesigned nichols. This comes after north korea conducted its fifth nuclear test. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am taylor riggs. Up, how much will the markets reacted Deutsche Banks problems and will it influence the Politics Around it . Joins uselley oconnor for an exclusive interview. This is bloomberg. Alix Deutsche Bank shares falling, although off the lows of the session. Ofn 20 since the beginning september as investors worry about how much of the bank will have to pay in penalties to the doj. How much will the markets react to Deutsche Banks problems influence the markets around it. When we talk to people today saying how much money Deutsche Bank needs to raise, we dont know until we know how much the doj fine will be. There is a complicated negotiation. Lets look at how you negotiate. You dont start with the number you hope, you start with another. What gets overlooked is a report in the german newspaper before the highend number of maybe it will be 2 billion erp people were not happy. Is another higher number coming out saying that is a very low ball number. Pressure onthat john cryan to get a deal. Theres the leverage on the other side . The incentive for the Justice Department to move quickly and down. Im not sure they have incentive to move quickly. It has been hanging over their heads because maybe they were not cooperatives. The number three at justice signaled that by saying that when you are willing to cooperate we can get it out of the way. Were waiting to see how that does. Now, Deutsche Bank would like to get it done. They have other things in front of justice right now. This is the small one. Jonathan provisions north of 5 billion for all of the fines on the table. Your experience looking back at all of the fines the number is one thing. They come to an agreement on how they pay the number, a yearly basis . A return on five years . Do they work those out after they negotiated the top line number . There are a lot of things they are negotiating. But onepretty to it, thing might be getting information about individuals. This would signal, why dont we have more on that or why didnt you come forth earlier . Now Deutsche Bank would like to get it out of the way. They will pay the amount and quickly. There is a diversion path. The volkswagen path. Toa Company Comes back justice and says we cannot afford this, they can do an analysis of what the company can afford. Canre not bound by it, but factor it in. Otherwise they will follow the formula or Civil Penalties on how much Mortgage Backed securities was issued. It could happen. It is unlikely, but possible. David the ramifications go beyond the old bear. The white house and treasury are paying attention. Angela merkel is paying attention. To what extent would build bear be getting input from the white house or treasuries . We know there are ramifications around the world. Winnie my guess he is not hearing that from the administration. Loretta lynch is in germany. She is the top cop at justice. I would not be surprised. We know that john cryan has been in washington. Im not privy to his minute by minute schedule. I would not be surprised if there were discussions being put to bear. David traditionally there has been resistance from prosecutors to any pressure like that. Are there active negotiations going on now . Winnie they are in the in the thick of it. Justice has a million things it wants to get on. This is not the top of their heap. There are many investigations that are important that could impact those companies. This is one of many. Jonathan the administration change, does that make it different in these things . Winnie it feels like it does from the outside. When i talked to justice officials, they say we move at our natural pace. When i look at how many things are wrapped up before the end of the year, and i could rattle off quite a few walmart has a bribery investigation. Jp morgan has an investigation into bribery and hiring. There are a gazillion of these and they are trying to move at an expeditious pace. They are aware of many and just as will be leaving at the end of the year. The regulatory side of things and the legal side as well. Estimating. Thank you. , thank you. Ng viacom, a possible merger with cbs. Counting down to the cache open and new york city. Futures, marginally positive. Equities recovering in europe. The dax down. If you are on Deutsche Bank, it has a nine handle. Down by 9 . Now down by. 5 percentage points. Trading at 10 euros and . 81. The market open is 10 minutes away. In new york, this is bloomberg. David this is bloomberg. Im david weston. The story dominating the media is the possible merger of viacom and cbs. Yesterday both were told by their Parent Companies they should consider getting together. Markets like that. The stock price over the past few days, viacom, they are up nicely. Joining us is a Bloomberg News media reporter. Why has it taken this long . There has been speculation or some time. Hasnt it happened . It has been a tumultuous summer for viacom. Ousted as well as some of the board members. She has control after the legal battle. That is part of the delay. Viacom investors are excited about the possibility of the merger. You have viacom, which has struggled to adapt to a changing tv landscape with cable channels. Has the most which watched network on tv and a premium channel, showtime, which is doing well. Viacom investors are interested. The question is if the cbs ceo is interested in tackle lane the challenge of fixing viacom. David the irony of Sherry Redstone Shari Redstone, she has two accusers excuse herself as a cbs board member. What does cbs want . They arethat is what asking. He has been successful in turning around cbs. You can imagine that Shari Redstone is asking him, can you use the magic to turn around viacom . David he has always wanted a movie studio. That is an open secret in hollywood. Robert iger has one. He would like one as well. Paramount is by a columns movie studio. They have had struggles. They have introduced movies that have not done well. It is not just turning around viacoms cable channels, geared to a younger audience not watching tv as much, but also inheriting a movie studio that would require rebuilding. David e. On to the personalities involved, from your reporting, does this come down to reporting . Les has a responsibility to his shareholders that they are not diluting the value of their ownership. This is a question, a combination of cbs and viacom, many analysts think would be good for viacom investors. The question is, how good or cbs, which is already doing well. David thank you. Bloomberg news media reporter joining us on viacomcbs. Bank, earliersche in the session in europe, a nine handle down by nine full percentage points. Now down i like 9 . 9 . W down by five minutes from the open, futures marginally positive, positive for on the s p 500. On the ftse, up from lows. The dax is recovering, down by one quarter of 1 . Class, 10 year yield unchanged. With 1. 11 a we were little earlier. Dollaryen above 101. Five quarters of 1 . Crude recovers with a 48 handle. Next, the market open. We break it down and wrapup what a quarter it has been for Global Equity markets. From new york, this is bloomberg. Jon from new york, this is bloomberg. I am Jonathan Ferro. What a week coming off the lows of the session on the dax the highs of the session down by just a quarter of 1 . What a session it has been for european lenders. The opening bell ringing in new york. Switch up the board. Futures positive. Looking at bonds yields unchanged. To one. 12. Ck wrapping up the session, the trading week, 10 seconds into the cash open, lets strip this back. Alix a big reversal for u. S. Stocks the dow was up by over 200 points yesterday. Now we are up 84. The s p was up by 30 points overnight in the futures market, now it is up 10 points. The quarter f i want to highlight what happened to the nasdaq the best quarter since 2013. The dow also helped, powered by the likes of apple. The banks were lower yesterday, up in the premarket, continuing to move a touch higher. Wells fargo off by the most, relatively flat. The california treasurer calling for john stumpfs resignation. Both oregon and new york london new yorkman and ceo wanting the chairman and ceo role split. Should point out goldman, the third worst dollar industrial stock this year ahead of only nike and disney. Interesting move for goldman. Digging deeper into what this quarter was but the s p. Maybe the chart does not look that awesome. We had a record high 10 times in this quarter, for the s p, that was an unbelievable move. You saw the fix pop higher. A move into cyclical assets out of defensive names. Nine closing highs for the dow and the nasdaq. Who would have thought in a summer quarter we would have seen that kind of move . Was theut move, this other standout for the quarter the shift in the japanese yield curve. This is where we were three months ago in japan. This is where we are now. A steep rerating of the yield curve. It is a little flatter now. The boj anticipation one at a steeper yield curve help into steepen the curve a touch. We saw the boj out, saying it will watch less bonds matured 10 years or later. Also buying less bonds from the five to 10year maturity range as well. A huge rerating in the month. Wrapping it up with the big story of the day the big story of the quarter, Deutsche Bank an unbelievable slide from september 16, which is when fine wasbillion doj announced a huge slide. Record lows. At one point today, below 90 nine euros a share. I want to map out the chart, a longterm perspective of where we have been for Deutsche Bank head if you can max out the chart for me. Look at this. Here we were back in 1992. And here we are right now. Look at where we were in the financial crisis. We were still at 20 four Deutsche Bank. Act on the. Com bubble burst, we were here, around 40. The implications for Deutsche Bank at 10 euros a share is huge. Those are the big stories. Jon one of them has been the story of this week financials under pressure. Bloomberg has caught up with a range of guests, ceos, and investors. The credit suite ceo speaking to us the credit suite ceo speaking is earlier this morning about sector strength. Some of the leading banks in the world generate 8 return on equity. That is not enough. It is that question that really difficult f it not really investable. Jon here for more, jonathan golomb. The European Banking ceo pretty much acknowledging the sector is on investable. What are your thoughts . Golub it is probably the wrong way, there is a price for everything, but in this environment with Interest Rates this low and this is not the u. S. With a 10year bond of 1. 6. This is europe with longterm bonds of nearly zero yields, and a weak economy, which means transaction volumes are weak. It is hard to find good news there. The only good news is if we did see global stimulus of some kind, that is probably the area that would see the biggest pop. Short of some rescue proof will be on continued pressure. What you painted is a prophet crisis. This week, people have been talking about something much bigger. Does it roll into something much bigger anytime soon as far as you are concerned . Mr. Golub it is interesting banks on a global basis versus banks in europe what we have seen in north america is u. S. Banks really took the kind of steps they needed to after the financial crisis. If you look at the canadian banks, which have a much stronger Capital Position, a healthier position not all banks are created equal here, and if you were an investor that needed to put money to work in the financial sector, there are lots of very healthy banks. Unfortunately not very many on the other side of the atlantic. Jon there is always a price pricetobook ratio one quarter of book what is the price for some of these banks . Mr. Golub the market is telling you you have an impaired Business Model, and that is not the same everywhere, but the market is tell you there is an underlying problem, and the market is probably right. Alix i want to get a take on the Systemic Risk look at the terminal Euro Area Lending versus the Bank Stock Price pretty basic. The euro lending is the white line. A tight correlation. The idea, banks become unprofitable, that stop lending, they stop lending, and it has a trickledown effect. Do you see that situation happening . Mr. Golub you are showing me it is happening. Alix it has not rolled over yet. Mr. Golub i you talking about the u. S. Question mark u. S. . Alix europe, and a bleed over into the u. S. Mr. Golub with Interest Rates this low, there are repercussions. Normally, Central Banks pushed interesthts rates lower, and that will entice us to spend more money because we can finance things were cheaply. In reality, we highlighted in this new report that when Interest Rates go below a certain level, investors. To say i need to save more money. I do not have enough money to retire on. Therefore, they are actually spending it weakens further. Central banks are realizing this. You have seen this with the bank of japan, who is really rethinking the way they are approaching policy because they do not want to damage the Banking Sector. So, the weakness the low Interest Rate in the economies that have the lowest of the low Interest Rates are really having a much more difficult time. Jon look at this chart Deutsche Bank intraday down 9 . Guess what we are now. Positive on the session on what . Tell me why sentiment is this fragile and why you can have an intraday swing, not on a penny stock, but on the biggest investment inc. In europe an intraday swing that looks like that . Mr. Golub i cannot comment on what is going on moment to moment, but what you have is no different than we are having this conversation. Hedge funds are having this conversation. Investors around the world a lot of people are trying to weigh in. Deutsche bank is worth something is it nine dollars, 10, 14 dollars . I will tell you, if you were to try to make a bet, if you pensively that supports this stimulus or government intervention, or just a believe this is going to get into a better position, somebody could potentially make a lot of money, but there is risk. David that is my question what is the way out. When you are talking about sounds like Larry Summers and secular strength relation. How do you break out of that . Mr. Golub first of all, there are areas where i disagree with Larry Summers patrick we are in a slower environment for longer. Larrys view at least my read this is a hangover from the financial crisis, and for those of us that are not spending now because we were burnt during the financial crisis, we need a boost the government to come in to tell us it is ok to spend, or a tax break. I take a different view. I think this is driven by weaker demographics, lower birth rates, a slower china. I think we are in this slower world for a longer period of time. I do, think, though, i do think, though, we are likely to see the government intervened with fiscal stimulus. Great policy over the long run, i dont know. You see it in japan, canada, china. We see talk about it on the continent, the u. S. , in the u. K. , and we could see a big, worldwide Stimulus Program that could push Interest Rates up maybe not permanently, but even thea period of time, and one group that benefits more than any others is the banks you were talking about a moment ago. They are the ones that really have the most torque or the most leverage to a pickup in economic success. David that is a very different world than what we are looking at right now. Jonathan gollum from rbc capital markets, thanks to be here for being here. Coming up, we have spoken a lot about Deutsche Banks troubles, the could this be a real life stress test. The white house economic chairman joins us next. This is bloomberg. Ix this is bloomberg am alix steel. Coming up , Morgan Stanleys cohead of Wealth Management will be joining us. Jon from new york city, this is bloomberg. Up. 5 onur update the s p 500 and the dow as well pay the nasdaq punching forward ahead, by a third. What a move Deutsche Bank, this is how fragile sentiment is around the Biggest Investment Bank in germany. The stock down here with a nine handle negative almost 9 on the day. Full full reversal roundtrip almost positive on the day, now just down by 2 10 of 1 . That story continues. Before he gets there, lets get some movers. We get over to david. David we will stay with that story, actually Deutsche Bank big lenders, big problems. Is Deutsche Bank going to turn out to be a post2009 stress test for the entire Financial Committee . We are joined by the u. S. Council of economic jason furmanrman from washington, d. C. Thank you for being with us, and let me start with how close you are watching what is going on with Deutsche Bank and what effect it might have on u. S. Question dr. Growth . Fuhrman we know events anywhere around the world have the ability to affect anyone in the world, but we feel good about the strength and resilience about both the u. S. Financial system, our overall economy, and the tools that we have to deal with our Financial System. David you are in the same both cryan but the markets are vital are they mistaken, or is there a risk there . Dr. Furman i will not comment on moment to moment financial movements, but what our focus has been on you know, what is the impact on the United States what is the impact on the u. S. Financial system, and when you look at the amount of capital banks have you look at tools regulators have that they did not used to have then you look at the underlying strength of the u. S. Economy, particularly powered by american consumers, and, you know that, you know, is what matters to us. I am not asking you to make a trade decide to buy or sell, but as someone responsible for figuring out what is going on with the u. S. Economy, how concerned are you with the Financial System overall . Can we have u. S. Economic growth if we do not have a strong Financial System . Dr. Furman certainly the Financial System is important to growth. We need a Financial System that people have confidence in it we need a e p are we need a Financial System that is lending. In some ways we are facing a hangover of the crisis. You see that in residential real estate, where credit is too tight in an overreaction to events that are now almost a decade old. The overall, you have seen Financial System continue to improve. You have seen lending continue to grow. You have seen the types of healing you would want to see. Alix im glad you brought up lending, jason. Part of the issue is as European Bank stocks continue to selloff, that could impact lending. The two contact each other lack of profitability, they will not lend. What is the risk of scenario playing out in europe, and trickling over here to the u. S. . Dr. Furman you look at any list of risk to the Global Economy u. S. Banks, the u. S. Financial system is not on the list, and it is not on the list for good reason. It is because of the steps we have taken to capitalize our Banking System because of the tools we have under wall street reform to deal with that Banking System. Is no jason, there question, i think, that u. S. Banks are much better capitalize and they were going back to 2008. The profitability, however, has lagged. If you look at price to book ratio, it is not therefore quite a few of the big banks. Is that the cause of some concern do we need robust banks making money in order to keep Economic Growth going in the United States . Dr. Furman look, if you, for example, take away too big to fail, you will take away some of the ability that banks might have had a decade ago to borrow cheaply in the expectation the government would theyll them out if they got into trouble. We have gotten rid of that expectation. That gets rid of the funding premium large institutions would have cared that is something that is good for the economy, not bad for the economy. We do not judge that by its impact on cash flow. We judge that by its impact on is it going to lead to rational economic decisions with the right incentives, and i think we have a system much closer to that today than we had before. Id thank you very much jason furman, chairman of the u. S. Council of economic advisers. Jon coming up, we will hear from Shelley Oconnor on her number one concerns concern for markets. From new york, this is bloomberg. David alix what are the biggest risks facing investors we hear brexit, elections, the fed, volatile markets i asked Morgan Stanleys cohead of financial markets, Shelley Oconnor in an exclusive interview. When you talk to clients, what is their number one concern in the markets right now . Ms. Oconnor i would say one of the concerns that we here is the political uncertainty. So, obviously, with the election almost upon us, almost every client i talked to, that is part of the conversation. Holding back Investment Decisions because of that, or is it creating more uncertainty . Ms. Oconnor i think creating uncertainty and we saw a period over 2016 where investors did hold back. They can back into the market with a rally postbrexit. Will have more uncertainty and a few more uncertainty and a few mark lyons on the sidelines between now and the election. Come do you feel midnovember that will be the rush back into investing, or will that take some time depending on who is elected . Ms. Oconnor well, listen, i dont have a crystal ball. We have to see how this plays out. Alix carry enough, but even if we got a trump presidency, many say that would be a lot of stimulus, tax cuts, but then you see immigration at the same time polarization in the markets. You see a longer period of safe haven cash the more timid . Also you have to factor in the potential for a rate hike in december pet a lot going on now between now and the end of the year. Alix 25 basis point is all i talk about on tv the fed, the election, brexit. Do Institutional Investors care about a 25 basis point hike for the fed . Ms. Oconnor investors, because they had been anticipating it for so long, more are just curious, watching to see what will happen. Alix less about changing their investments reggie. Ms. Oconnor exactly. Alix that is just the media. [laughter] alix when you look at opportunities around the globe where is the most activity . Ms. Oconnor where our investors alix yeah, where are they most excited . Ms. Oconnor we see a lot of activity in the u. S. , equities in the United States. Most of our investors are u. S. Based investors in our wealthmanagement organization, and a fair amount of activity is domestic. Alix the search for yeldon you will get zero return anywhere else i need the yield, go to riskier assets, which do investors want to take right now . Ms. Oconnor i think individual investors would not want to take a lot of credit risk. We see the chase for yield as an example. Alix interesting. What about duration . Ms. Oconnor again, it depends on Asset Allocation what your goals are for how you want to live today, and how you want to invest for tomorrow. I do not think there is one, said answer for that with individual investors. Alix drilling down into Wealth Management, what is coming down for you guys is the fiduciary standard. What does Morgan Stanley have to do to get there to comply with those rules . . Ms. Oconnor as you know, there was a new standard for fiduciary earlier this year. It is not go officially into effect until january, 2018. We will phase into the first part of that early next year. And really, what it is, a new standard for how we work with ira brokerage clients. We have every intention to comply with the best interest , so wet through the dol are working hard, making sure we are prepared to do that when the rule goes officially into effect. Forwarde idea is going you have client costs and ongoing costs as well. Describe how onerous that will be . Ms. Oconnor it is a lot of risk, theu have Technology Vendor all of that has been factored in. We have been working on this for over a year, and we feel we will be prepared when it goes into effect. Alix does it make it more or less profitable . Ms. Oconnor we have factored in the costs are something we can manage, and you have to remember we are running a very big business, so it is not like we are going to build a Risk Organization or Compliance Organization from scratchpad we had a very big infrastructure around the 600 offices and 16,000 advisors. Absorb something we can into a how we are operating the business. Alix Morgan Stanley Wealth Management had nearly 2 llion in client assets in at the end of 2015. Walk that out 5, 10 years, with so much liquidity in the system, how big could that be . Ms. Oconnor we estimate we have anywhere between 40 and 45 wallet share of existing clients. Time, if you focus on broadening existing client relationships, and to your point, attracting new client relationships, this is a big opportunity across the United States. Alix that was my exclusive interview with Shelley Oconnor, Morgan Stanley cohead of Wealth Management. I spoke to james gorman after the pair did you get the 15,000foot view of what is happening, then the actual markets in the trenches. It is different. David it is particularly apt, comparing what john cryan is facing. Jon it is on the screen what he has been facing today what an intraday move. This is germanys Biggest Investment Bank. It was down almost 9 . It is now up by one quarter of a percent. The setting cap anything for me, it is just how fragile sentiment is. This is not a penny stock the biggest investment that in germany with an intraday move that looks like that. David investors are on the knifes edge, as steve ratner says. Alix 20 we had the big dip as well we had the big dip as well. Jon 26 minute into the session we are higher by one point 5 . That does it for bloomberg , as we wrap up the trading weekend head toward the close. Week and had toward the close. Bloomberg markets continues. it is 10 00 a. M. In new york, three cup p. M. In london, 3 00 p. M. In london. Ejra im in for mark barton. Welcome to bloomberg markets. Funny we going to bonnie were 20 take you from new york to london. Breaking Economic Data in the u. S. Lets go to the markets desk where julie hyman has the latest. Julie another reading on consumer confidence. The last one we got came in better than estimate. This one in that trend the university of Michigan Sentiment for september the final. Eading coming in at 91. 2 90 is what analysts were anticipating pick Current Conditions rising to 104. 2. The relatively high level therefore sentiment. This is the first entries in this particular meeting of Consumer Sentiment in four months. It looks like americans are more of the about the prospects for their incomes
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