has a few more steps to unlock a $12 billion loan. this 5:00 a.m. in london. welcome to the program. what a dramatic few days it has in for the british pound. losing as much as ex .1%. let's look at a chart i have crafted for use or you can look at the scale and scope. fall in theing at a span of two minutes. a 31 years low, the biggest fall its 2009. we are looking at the numbers, the data. there was a dry patch in liquidity. the rhetoric on the so-called hard brexit playing in as well. underscore and, you know what, this is not something you would -- ct in a we are also seeing hedge funds increased net positions to benefit. mark carney from the bank of england, asking the markets committee to review the events crash.ding the likely to dominate much of the conversation going into this week. let's see how markets closed in the red states. stocks slipped friday, adding to the first weekly decline in four. the s&p 500 was the biggest down come out 0.3%. biggest drop, at 0.3%. the implied probability for a at 64%.nds let's look and see what is going on in this heart of the world. two hours away from the opening of markets. a mixed picture for the most part. we are keeping an eye out. in egypt, the imminence devaluation. the best-performing index last week in the middle east. let's get a check on the first world headlines from around the world. 24 hours before the second residential debate, donald trump is defying party member calls for him to quit over reports of him talking crudely about women. in a video released by the washington post, he talks about groping and doing anything to women because of his fame. those withdrawing their support or calling for him to step aside including number three senate republican and john mccain. tremendous support. >> are you staying in the race? works 100% -- >> 100%. yousef: donald trump and hillary clinton faced off in their second presidential debate. you can watch full coverage here on bloomberg. dubai.re in hitly 2 million consumers by hurricane matthew may be in the dark as utilities worked to restore power. they say the florida facilities are operational. nextera energy says they will restart a nuclear reactor. there are concerns about crop damage in florida and south and north carolina. gas futures rallied on friday to on expectations of increased demand. twitter's efforts to find a buyer appeared to be dead, after talks that potential bidders have lost interest. twitter once saw interest from google, sales first -- force, and disney. but now sources say they are not likely to make a bid. usingr will try to appeal a strategy emphasizing live video. the governor of the japanese central bank says they do not intend to reduce their bond buying program. the executive editor joins us. is the confidence warranted? what they are trying to do has not been done before except back in the 1940's. they are trying to stephen -- steepen the yield curve. has it been successful? one way to judge that is to look at the yield curve. certainly not by that much. that steepening has come among a global selloff. it is difficult to determine orther it is just the -- something else. , if they decide to increase that tapering, we could see more of an effect. i would say the jury is still kuroda you can see why is saying why they have firepower left. yousef: they are concerned about the rights of protectionism. are they likely to see progress? >> there is something ironic about people being upset about the elites taking on the benefits, and then the elites of the elites talking about this. if you want to see a summary of what the issue is, take a listen to the sound bite. he is the euro group president. >> the biggest challenge is populism. with the imf, which they pointed instability to our economy. while the economy is recovering in europe and that process is continuing, we need to make sure people start to feel the benefits of that. if they don't, they may cast their vote in the wrong direction. it is up to us to make sure we get that result for our electorate. . >> this is the idea when the idea of week when the globalization going in reverse has entered consciousness. speech lastsa may's week. the hard exit concerns that may have contributed to the flash crash in the past. the ongoing saga of donald trump and hillary clinton. lots of analysts sounding the alarm not just on peak liquidity but globalization. this was the talking point of those meetings. the newwe are going to the conversation later on in the program. you can are from the boj governor and the imf annual meeting tomorrow. that will interview will be on bloomberg tv tomorrow morning. let's switch gears. tell ussolace qatar -- ar's royal bank -- what would read the rationale for qatar to increase their stake in deutsche bank? >> this would be a pretty strong move from qatar. the main rationale would be, they have been an investor for the last couple of years. knowing the investment strategy, they tend to invest for the long-term. they would see this as an opportunity at a time when abouts are pessimistic the prospect of the bank. for long-term investor like qatar, this would be a good time to think about raising their stake considerably. so they get a say in the management of the bank. key question is whether a cash infusion from the qataris will help address some of the structural issues deutsche bank is facing. yes, i mean, i don't think that would be enough to address all the issues. definitely from what we understand talking to people, a cash infusion would go a long way in addressing some of the issues we have seen. about how much, not just the value of the investment, what with the qataris demand in return if they accept these stakes? the bank cash infusion would at addresslp the bank short issues -- issues in the short term. fewh could end up being a billion dollars. are the qatari investors familiar with investing in global banks? the back ofp in all the financial crisis but it has been a bit quiet. >> they have been quiet over the last couple of years. these are people who invested heavily at the time of the financial crisis come into banks like barclays and credits wiese. suisse.t they prefer investing during times of distress. this only happen at times when banks are in need of capital. their share prices were hit severely. deutsche bank has a lot of the similar issues. these people have done this before. they sit on the board of large banks. so i think -- yousef: we will have to leave it there but we will continue to track that story. live from london. for our viewers. later in the program, on track to break the speed of sound. how dubai is hoping to be the first to build a hyperloop transit system. and, told they have work to do to get the imf loan. all things egypt next. this is bloomberg. >> we cannot have negative rates for ever. the benefits, overall demand. >> there is a level of complacency around the numbers we are facing. the geopolitical challenges we are facing. there is a level of complacency. >> monetary policy is heroic, but going forward, we need something else. the politicale to side. reduce political uncertainty. in some cases, where you have room, you need long-term infrastructure spending to make sure this confidence can be reinstated. yousef: some of the leading voices on the challenges facing the global economy. for additional perspective on -- egypt story, where subsidy cuts and devaluation of the currency remain the final hurdles to action on the accord. let's get some more analysis with the senior analysis. analyst. the expectation was the devaluation would happen. that did not come through. i have put together a chart that shows the disparity between the egyptian pound and the 12 month on the liberal -- non-deliverable. the first devaluation in march. you can see how the spread widened again. 40-50% of the premium and their -- premium there. weekidn't it happened last ? is there something still holding back the bank? >> it didn't happen last week. we have been waiting for a big devaluation for the past five years and it has not happened. we are still wondering about the timing. the sooner, the better. there is a 50-60 point spread over the official rate. the delay at this point is in terms of the imf agreement. they want to see a further boost in fx reserves. we know they have received a lot of bilateral financing from the world bank and also the gcc. they want to boost reserves before making a move. think the bank is going to come through with the devaluation? i was looking yesterday at what is going on in nigeria. resident with a similar situation. a decline inen -- foreign reserves and the bank was forced to free float the currency. it has not helped the case of the currency. liquidity is not widely available. it is a weakening from day to day. might that have been a precursor for the egyptian central bank governor to say, maybe this is not such a good idea? >> i think it is inevitable they are going to devalue. the imf agreement, they are going to need to loosen their controls. you bring up a good point with nigeria in that a devaluation, it is not going to be a silver bullet. you cannot devalue your way to prosperity. part of the problem with the , that is my fear right now. the black market rate is around 14 to the dollar. the worst-case scenario is if we see a smaller devaluation, 10 or 15%. that is a concern. i don't think that will necessarily give foreign investors confidence to start going back into egypt. that is how the economic adjustment is going to take place. not through a sudden boost in exports because egypt does not have a diversified export ace. based. we need to see foreign investors going back in there. they are not going to do that. it is hard to convince them when they think devaluation is around the corner. do expect foreign investors to move back in? last --ked during the so it looks like they have the appetite to step in before or after. it depends on your definition of spiked. as of right now, they hold less than 1%. we are not seeing the flows that are significant enough to cover that. the past couple of years, we widening. whitening -- account inflows have decreased as well. that has led to the capital controls. if we are going to talk about an economic recovery, the first step is going to be a devaluation. when is the bank going to move on a devaluation? early november at the latest because that is when the executive board is going to finalize whether they are going to disperse the financing. how big of a devaluation, it is anyone's guess but the bigger the better. thank you for that insight. the senior economist with emirates. coming up, is there any hope for a quick recovery for the british pound? we will pick up that conversation and give you the details coming next. yousef: welcome back. you are watching bloomberg. another informal opec meeting has been called this week in istanbul. russia says the congress is for quote consultations. let's talk about this more. andpresident and finder former chief economist. great to have you on the program. once again, and in formal opec meeting. tom going to roll back pre-algiers where a majority of the market felt there would not be an agreement. this time around, round two, what is going to happen? are they going to try to bring in non-opec producers? clearly everybody is under low willbecause of the prices. non-opecers and members. opec is in demise. they no longer have the market share they used to have in the 1980's and 1990's. shale oil is there. renewables and solar. those are, all of i don't see an agreement between russia and other non-opec producers. the pressure is to increase production. >> there is a lot of pressure on saudi arabia as well. in many ways, this is an effective capitulation. the strategy has not worked, to put this shale producers market. you can intervene short-term. out of business. the local story is forcing them to say, we are pulling the plug. >> the bed was to get shale oil out. arenology and efficiency such that they can compete at $45 a barrel or $50 a barrel. they will pick the oil out. they will stop when the oil prices are down again. we can no longer control the market. the evidence is, get what saudi is doing. they have announced plans to go intointo shale oil production in saudi itself. yousef: they are trying to transform the economy effectively. shock therapy is the way they you have about it. written about these transformation plans. precedents of countries doing it successfully. there's not a precedent for such a short time. >> >> no country has been able to diversify so quickly. look at the examples of successful diversification, norway and mexico, those when globalization was when globalization was expanding. open markets. you could go fast. you could achieve that diversification. he you are seeing forces working against globalization. countries like saudi arabia. could go into new production and activities. yousef: yousef: the top stories on ." less thanarkets 24 hours before the second presidential debate, donald defying defined -- calls for him to quit. those calling for this include senator john mccain. fresh comments from imf chief christine lagarde have fueled further doubts on whether egypt can meet conditions for a $12 billion loan. the government still needs to take several actions, mainly on the currency and subsidies for it can secure the first installments. egypt desperately needs the money to restore investor confidence. poland has landed a deal -- boeing has landed a deal with qatar. the deal comes after the airline rejected initial airbus deliveries because of injured issues. ordered new aircraft. the world's biggest oil company is now planning to sell shares in its entire business. not just refining or distribution. ceo told us the deal would be announced soon. how does the shale play and to all of this? there.o you talk about shale gas, they will start producing shale gas next year. from northwest of the country. it will not be in big commodities. small quantities. they are going to build up on that. company,tial for the saudi arabia burns a lot of liquid fuel for its power plants. aramco future, saudi i don't think -- that they have a lot to add. yousef: why are they maintaining spending in this low oil price environment? you would think they would cut spending. >> they have been there before, the 1990's. when demand picked up in early 2000, the market was tight. they do not want to repeat that again. they want to maintain spending. oil prices are low. this is what the ceo said. we are going to keep spending on our key area including refining. component.or a rom: not be a traditional oil and gas company. they want to be an integrated company. extract oil, refine. yousef: we are going to have to leave it there. that is our commodity correspondent join us on the phone. let's continue the discussion. former chief economist of the difc. these play into the inflation picture and the challenges central banks have making the decisions a are making. we are hearing from some of the central bank chiefs in the u.s.. and saying they can cut rates further, into negative territory. we heard from the bob the fronts de france governor. it doesn't seem like a monetary policy has a lot of muscle left. >> it has not. if you look at qe, qe plus, the impact in terms of growth or employment has been very little. you cannot expect central banks to change demographics, aging, or increase productivity growth. provide youicy can with liquidity. it can prevent the meltdown of markets. prevent maybe a repeat of 2008. it is not going to affect the real economy. the real question is, what are some of the effects on the banking system? what they are some of the they are suffering from is issues. they are imposing fragility. banking, insurance, asset managers. of pensions is under question. central banks can do very little about that. policy the front that needs to be stepped up? or is it we are in a low growth paradigm? >> there is evidence productivity growth is global. when yountering a time are going to have a low productivity growth. there are alternatives, about infrastructure. you've got aging infrastructure in most of europe except for germany, perhaps. and certainly in the u.s. president obama had posed a major infrastructure program. congress did not go along with it. fiscal policy and infrastructure is the play we would see moving forward. beingnker plan is proposed and not implemented. yousef: we are gearing up for the second debate. what do you take about the ongoing discourse and what it means for this of the world? >> the main danger is not just the american elections. whether it is brexit, several others. careful in be very times of deep uncertainty. where economic conditions are not prosperous. those are dangerous things. you are going into populism. be goingay seems to along with this. anti-immigration. not very pro-business. the main issue with trump is the economic policies. for our part of the world, a policy of being anti-arab world, anti-muslim. he is trying to scale that it back but it is certainly in there. the worry is going to be for the future of international trade. yousef: is there anything that can be done to prevent that? inevitable be in move to where people don't really want to be. >> there are checks and balances in the u.s. political system. although the president does have a great deal of power, when it comes to passing laws and legislation, there will be failsafe devices, hopefully. yousef: thank you for joining us. lovely having you on the show. let's check in now with the headlines from around the world. tracy: deutsche bank has failed to reach an agreement with the u.s. justice department over a probe into its mortgage dealings. reporting meeting between the ceo and officials did not include with a multibillion dollar sentiment to resolve a legend misconduct leading to the financial crisis. deutsche bank is still considering seeking damages against former ceos. spreading so-called rumors about the property market can get you into trouble in shanghai. increasing the land supply. these are part of the city's latest measures to cool the market. according to a real estate company, steps taken earlier have brought prices down by 44%. they were higher compared to september of last year. a further blow to samsung, with sources telling us at&t is considering stopping sales. the wireless carrier is their third biggest customer. they started replacing the phone last month because of a flaw in the lithium battery, which can lead to the handset catching fire. company shares have rebounded. is facing samsung calls from the taiwan consumer foundation to suspend sales and replacements after another report of an exploding device. apple daily reports a phone issued as a replacement model started spewing spoke -- smoke friday. samsung is said to be trying to contact the customer. global news, 24 hours a day, powered by more than 2600 journalists. yousef: thank you. coming up on the program, big construction projects faced delays. problem, next.e make sure you stay tuned for that and more. ♪ yousef: welcome back. you are watching bloomberg. let's get a quick round up of the main stories from around the middle east. the u.s. treasury department has loosened sanctions on iran, restrictions. entitiesw deals with without -- that are not under sanctions. it is the third update and was intended to clarify the scope of the sanctions and those that remain in place. more than 140 people are dead and over 500 are injured in yemen after an air strike targeted a funeral home. is holdingovernment the saudi led coalition responsible. the u.s. has said it has launched a review of the incident. is seeking to lower cost at its investment bank. sources told bloomberg they cut in equity analyst positions dubai and positions in south africa. the ceo said the bank was looking to reduce expenses after it racked up about $1 billion in unexpected write-downs. the world's big central banks are hoping out money. but here, a lack of liquidity is sending construction projects back to the drawing board. analysts,to energy this could delay -- great to have you back on the program. from our guest earlier who said the national transformation plan is tremendously ambitious. >> as you look at the saudi government trying to meet its budget requirements, how concerned are you buy the changes being made? there is a transformation program which includes rolling out project management offices, which in effect is going to delay things by another year. what they are looking to achieve is so fundamentally game changing, you got to give it at least 2017. it may take longer. within that, there is the re-prioritization of programs and projects. you can see the 10 year horizon without the schemes would roll out it's going to be extended. networkeeing the gcc being pushed back, suggesting back forget pushed some years. now it's officially 20 21. we don't know if this will be and of the delays. it is the reprioritization of the projects. they are potentially cutting $20 billion worth of projects. it is not really a massive cut. the horizon, reprioritizing, that is potentially half the government market share. it is quite a huge dynamic. yousef: where is the opportunity? >> i would suggest it comes around getting alternative financing. water and power projects. there are a lot of options around that. the contracting entities tend to be master slave oriented. that is regionally. to get access to the international organizations. it is something they are going to have to address. saudi arabia is the largest economy. a lot of the firms have pushed aggressively to add to their saudi exposure, which they may be regretting or look at potential losses. what about the united arab emirates which mark -- emirates? >> there has been a reduction within the market. when we to be expected assess we'll prices and tightening government finances. it has not been anywhere near as dramatic. bai in some respects has supported a lot of the market. abu dhabi, they have been refocusing. looking at what it is they need to achieve. contractions, 10-50%, not that significant. concerns, supposing the a lot does come around, of the funding for schemes now currently being built was lacked locked in sometime back. there are questions around it. tightening credit terms. feasibility of projects, potentially at risk. that were bankable a year or two bank ago. yousef: i would not be able to go without weighing into the presidential race in the u.s., implications for the middle east. >> with hillary clinton's experience and exposure, there is a beneficial relationship. experience trump's or lack thereof with international policy, attitudes region,viors toward the there could be a souring of a relationship which does knows the-- not look good for global market. thank you for stopping by. david clifton. splashescome, qatar out with one of the biggest airplane deals of the year. we will break if down for you. ♪ landed anding has $18.6 billion deal with qatar airways. tracy, two of the biggest of the heavyweight fighters go stepping into the ring. tracy: this is a big deal. qatarder comes after canceled orders for their buses. -- on the be a bit of part of boeing. both of them have struggled to ramp up orders in recent months and years. this will be welcome news on the part of boeing. yousef: talk us through some of the metrics in terms of how this might close the gap. tracy: they have set themselves this target to replace every order with a new delivery. ratio they are aiming for. this is probably not enough to get them over the house. the majority of this order is for single aisle narrow bodied jets. these are not the things boeing has been working to develop. they have been investing in white bodies which have not got as many orders. stepping too it be far to look for implications for the u.s. qatari relationship? first orderis the for boeing since 1979. what is the catalyst? some are pointing to a recent u.s. approval for qatar to buy fighter jets from the u.s.. qatar shot down that theory at their press conference but still people are talking. thank you for stopping by again. the bloomberg markets executive editor. surrounding the hyperloop, the high speed transport from elon musk. dubai is keen to be first off the block. >> a magnetically suspended car reach speedsry faster than a passenger jet. they have implemented a successful test of part of the technology. one place eager to try it for real is dubai. they always seem game for experimental building projects. >> we are going to have to overcome regulatory requirements and restrictions. can see ite this, i happening as early as 2020. >> they held a competition to the hyperloop. >> it will be accessible for nearly everybody. not very excited -- expensive. we will be able to move in a very fast way. i guess that is exciting, it changes everything. >> the key question is who pays it and how, when the budgets of gulf nations are feeling the pinch. a quick reminder, donald and hillary clinton face off in the second of their presidential debates. watch full coverage and analysis right here on bloomberg television. that starts at 8:30 p.m. on the east coast. 4:30 a.m. anin dubai. you can hear from the boj governor at the imf annual meeting tomorrow. the interview on bloomberg television from monday morning. that is it for this edition. we will be live from the region tomorrow. a jampacked week ahead. ♪ >> the following is a paid presentation for the simple step, brought to you by allstar marketing. what's the matter? 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