Get the tests through. Tom Francine Lacqua is from london with the end for the entire hour, focusing on vw. Lets get to top headlines with vonnie quinn. Vonnie in greece, the once and future Prime Minister returns to power with a stronger than expected mandate. Alexis tsipras and his series of party and his series of won. From tomorrow we raise our sleeves to support the weakest, the working classes. Equality, social progress, social justice and prosperity for our country. To be able to have a stronger greece after four years and make our people proud and stand tall again. Sippers came to power tsipras came to power to end austerity. Secretary of state john kerry made the announcement in berlin where he met with germany plus foreign minister. This year the u. S. Cap to the number of refugees being allowed in at 70,000. John kerry we are now going up to 85,000 with at least it is not a ceiling, a floor of 10,000 over the next year for specifically, even as we receive more refugees from other areas. In the next fiscal year we will target 100,000. Vonnie germany may take in as many as one million refugees this year. Another republican outsider is rising in the polls. Carly fiorina has risen to secondplace in a new cnn poll of registered voters. At 15 , up from 3 . Donald trump is still the leader. But he went from 32 to 24 . A milestone last night for the emmy awards. Is the first africanamerican woman honored as best lead actress in a drama series. For her role in the series how to get away with murder. Those are your top headlines tom . I did not tom i did not watch it. Claire danes. Temperature is 100 degrees. I can see why. Washington, kerry with a cocktail dress. What is it about the look. To me it is vonnie they have to make sure they do not wear the same dress. Tom who keeps charge of that . The emmys was successful. , they never forget the vw did an early madmen about the branding of that brand in america. We look at equities, bonds, currencies, commodities. 1. 1284. Is, the euro, we have a smart chart coming up on oil. On to the next screen. Averagegetting back to at 22. 28. Look at that divide. A big negative yield for the german twoyear. Quietly friday, brazil continue to unravel. We are on the for real per dollar watch. As we moved to the bloomberg terminal, this is what janet yellen is focused on. The inflationadjusted twoyear, the moderation over two decades. Here is normal. This is sort of like i want to get back here, but we are nowhere near that. Most of this appeared here is the new lack of inflation. The two year yield is clearly showing that great distortion. Risee we are looking at a , a little bit of the bet on what is happening with other Central Banks. Tom it is definitely centralbank influenced. We are back appear on a lack of inflation. Lets move degrees. I thought it was going to be boring. I was wrong. This mondays word is shocking as Alexis Tsipras stuns with a good win not a great win, but a good win amid an appallingly low turnout. Exhausted by their current democracy. Athens must now implement a tough set of austere packages. What is next for mr. Tsipras in a government that has two effect a plan yes that has to effect a plan . Tom he will be meeting with the president of the athletic republic, and he will have to of the atlantic republic, and he will have to reform. His the review is going to be at the end of october. He needs pension and labor market reform, taxes. That will be done as well as recapitalization of the banks. 50 billion euros, an additional euros. Illion then the ecb is checking through the books right now, and they could open the door to qe. Vonnie the creditors would agree it is a sigh of relief, but is it certain that Alexis Tsipras will continue with the reforms that were set out . Tom that is a question on the nines of many people. On the minds of many people. Banks were closed, capital controls still imposed. But during the election campaign, he said we will soften the edges of this Bailout Program and make the implementation fairer. He has to give Something Back to the voters. He has to satisfy the demands of the creditors, whose patience has run thin. Tom is greece still in depression . Is that how you would put it . Mackenzie the latest data suggests that the contractions for this year by the end of 2015 will be 1. 4 . Obviously credit is pretty much nonexistent because of the capital controls and the need for recapitalization of the banks. It is in a very poor state. They have to meet these deficit reduction targets. That will be incredibly unless there is strong growth. Many people think that is unlikely. Those targets could very well be missed, putting pressure on the balancing act. Tom thank you so much. Tom mackenzie in athens. It was a quiet week for lastberg surveillance week. Are you kidding . I slept the whole weekend. s chief strategist in charge of courage for his company. Comege will be needed december. I know you would not appear with us until the Minnesota Vikings won again. Thank you. We secured victory. Tom did you adjust your Market Outlook off of what you saw on thursday . Brian not a bit. We put out a piece on friday, midday, looking at the way the market reacted once again to the , calling itsion from an Investment Strategy standpoint, a fed misstep. We think the fed should have raised rates. Growth is coming back. You show the chart. I think now, from an Investment Strategy standpoint, the fed has set itself up to be late again. That only adds to what has been an uncertain year. That uncertainty will roll over into 2016. We have an election and all these other things going on, and it adds to the volatility. Tom we had a wonderful moment with ray dalio last week. We had no idea the response we would get to our conversation with him. He is optimistic on the american experience, but he thinks a bubble is out there. Is your world of equities in a bubble right now . Brian to have a bubble, you need to have something in excess. There is no way we are in a bubble with respect to equities because mom and pop in the midwest are not buying stocks yet. They are scared about the election, about isis, Interest Rates, and about jobs. You cannot have a bubble in equities unless you have this type of excess with respect to feeling and sentiment, and we are nowhere near that. Vonnie you are saying the fed should have hiked even with the china wobble and the drop in equity markets . Brian yes, growth is coming back. Stocks in the u. S. Are by far the more stable the most stable in the world, and we have seen them come back. They are continuing to show leadership. They are underperforming versus europe, but that is more of a momentum play with investors chasing momentum and qe in europe. We do think the fed should everys rates. Vonnie if the fed starts raising rates, do Companies Need to start tightening their belts . Brian no. An entireised generation of investors that believes the stocks only go up, they do not go down. Theave forgotten all about time during the mid1990s. I think we are heading back into a 1980s and 1990s environment. We are stockpicking. Peter lynch, warren buffett. It is all about stocks and less about pmi and macro and china and commodities. We are looking at stocks again. What is your number one sector right now . Brian technology. People are arbitrarily selling financial because they are worried about that interest margin. The most exciting thing is wealth management. Wealth management is the crown jewel. Tom so you like Morgan Stanley and what james gorman has done. We will talk to brian belski on the markets coming up. Over the weekend, it could be an 18 billion mistake. This on volkswagen with american diesel cars. This is extraordinary. Francine lacqua has a perspective on this from london. Stay with us from new york. This is bloomberg surveillance. Good morning. Tom good morning, everyone. Particularly to those in the united kingdom. What a week it was last week in america. Same thing in the u. K. The political economics of the moment is absolutely extraordinary. Lets get to our top headlines in london. Here is francine. Rentin popeine in havana, the met with former leader fidel castro. The vatican described the meeting as informal and familial. The pope flies the east in cuba today for the next leg of his trip. He drew huge crowds while celebrating mass in downtown havana. Goldman sachs says the euro may fall another 10 u. S. Cents because the European Central bank is ready to increase stimulus so we can meet inflation targets. Goldman protects the ecb will maintain quantitative easing through the end of next year. Volkswagen stock is plunging after the company admitted to designing cars to circumvent u. S. Laws. Carmaker is suspending u. S. Sales of some diesel powered vws and audis. For more on the story, lets get straight to our international correspondent, hans nichols, from berlin. This is huge because they have been cheating for years. Hans this is bigger than volkswagen. This is about the entire diesel technology. If you want to have a better fuel standard through diesel, you may have to be willing to accept that you may be polluting more. The epa thinks they caught volkswagen redhanded, from 2009 to 2015 with a defeat device. Emitsolkswagen tests it less emissions. When it is out on the road, it pollutes 10 to 40 times bigger than what happened. Ceo, martin the winterkorn, said. I am personally and deeply sorry that we have broken the trust of our customers. Cooperate fully with transparency to completely establish the fact that this the facts of this case. So many models the passat, the jetta. Many vehicles have been suspended in the states, as well as certified, preowned. They are talking 18 billion in fines at the high end of it. That is like a bnp paribas number. We have never seen a figure like this when it comes to auto manufacturers. Is a huge fine. This is a company trying to be number one. They sell over 10 million cars, almost as much as toyota. But crucially, they are getting the u. S. Market. Hans that has always been a criticism of Martin Winterkorn. Reverse the trend. Tom i look at the iconic way that we look at vw, and maybe the best thing after the emmys last night is in the early seasons of madmen, there is a vw commercial which completely changes the plot and cast of the show. I am suggesting a lot of us really do not know who vw is. Define for our american audience who vw is. Cons volkswagen is a holding hans volkswagen is a holding company. Audi, bentley. At the core they have the volkswagen brand, which sells the passat. They have over 500,000 employees globally. Winterkorn won the power struggle on the vw side back in april, but there is supposed to be a vote on friday that will extend his contract into 2018. Will that take place . Hans that is what were trying to figure out. Martin winterkorn saw he had a contract extension. When i interviewed him a week ago, he hedged on this. I do not know if it is an open question now, but it is a difficult time for volkswagen. Tom hans nichols, thank you so much. That was brilliant with francine and hans. 597,000 employees. Ford motor has fewer. I had no idea how big it is. Of those employees, by the way, are in germany. Down 21 r stock is this morning. We have a wonderful guest this money to synthesize all we observed last week and to drive it forward. Adam pozens formerly a member of the bank of england. Really looking forward to this. A lengthy conversation with dr. Economy going forward. From london and from new york, we welcome you. It is bloomberg surveillance. Morning, everyone. Maybe a week a little less crowded than last week. Washington, philadelphia, new york and hong kong will be focused on the events in america. Hong kong will be focused on the visit of the chinese leader to washington as the pope moves from washington to new york. A beautiful view of hong kong this morning. We have a morning must listen on china. Vonnie in china, behind the chinas highest ranking officials, former ambassador to the u. S. , and the top ago shooter on foreign policy. He will talk about chinas currency at, among other things. Supply and demand determine thinklue of imb, and i y is quitenerall steady. We will continue to do reform in sectors, various including the financial sector. When people look back 10 years or 15 years from now and we see that the market reform is really good not only for china but for the rest of the world. Vonnie a fascinating interview, and a reminder that it will be aired in full tonight. I want to mention some things that he said. He said the value of the r b is steady. He said it is also determined by supply and demand. It is a pegged currency. Tom there are any number of phrases that ken rogoff would give it. Sharma is joining us in the 7 00 hour. You have to believe in managed by a law by any chinese authorities going to be affected by that supply and demand. Vonnie and this definitely was what set off the china equity plunge this summer. The 2 move that china enacted with its currency. Or so,aw another 2 move would we see another route in markets . Brian i am guessing that the volatility in china is here to stay. In had a decadelong buildup capacity. Now there is overcapacity. They have almost too much. They need to take that down just like america did between 2000 and 2009 after our big buildup during the 1990s. What is going to end up happening in china is you need to see more credibility. It is statements like this with respect to a reminder to stay tuned for china behind the wall. This is bloomberg surveillance on Bloomberg Television, streaming on your tablet, your phone, and bloomberg. Tom without question, the block of the morning, our four hours of numbered surveillance. Richard sharma of Morgan StanleyRuchir Sharma of Morgan Stanley. And adam posen. Lets get to top headlines. Here is vonnie quinn. Vonnie in greece, Alexis Tsipras has been returned to power after agreeing to austerity measures. He campaigned against them originally. He received 35 of the vote. He will form a Coalition Government with the centerright new democracy party. Now he will have to make the tax hikes and spending cuts he agreed to. Investors are hammering volkswagen over that air pollution test scandal in the u. S. Shares of vw have fallen as much as 22 in europe. Feed elliott has admitted to cheating on the 10th cw has admitted to cheating on the test for years. It has halted sales of the cars that were involved. Falling after two days of gains. Federal reserve policymakers are making the case for an Interest Rate hike later this year. San francisco fed president John Williams over the weekend. The natural next step is to gradually start raising Interest Rates. It is the appropriate time to begin that process. Maker jamespolicy bullard and james lacher two americans held in they ousted the good the rebels ousted the government early this year. They are facing airstrikes led by saudi arabia and backed by the u. S. In sunday night football, Aaron Rodgers through for two touchdowns Aaron Rodgers threw for two touchdowns. Lost both of its games. Brian belski is shaking his head. Diehard nflelski, a fan. Brian just terrible. We love people from wisconsin, but packers fans . Tom coming about the tell me about the ads that you see. Into your family room, as i feel it is . Is, too. Think it but if you travel around north america like i do and you listen to sports radio, you have all of these fantasy football draft shows and all of this kind of stuff. Tom we have essentially lost we have essentially brought in las vegas to the brian it does not add value to somebody who just wants to sit down and watch the game. Vonnie the thing about fantasy football, it has nothing to do with the team you support. It is all these team members. Tom it is betting. What is the difference between that and las vegas . Brian we grew up not liking the packers are what if you have Aaron Rodgers on your team . Tom sacrilegious. I am predicting this is going to become a big deal. Vonnie it is a big deal already. Tom we have brought the show to a complete halt over this. Brian belski says this is shortsighted. It does seem that janet yellen still is waiting for a better labor market in order to hike, brian. Brian still waiting, still going to be late. The Labor Conditions have had an improvement for a wild. Why dont you have a situation with the fed where you actually lead instead of focusing on what was and focus on what is. What is is an improving economy. It is the slowest economic recovery in history. All we see is monetary policy, no fiscal policy. Regulations have remained very stringent in america, and we have not allowed businesses to do business, even though Corporate America has done a great job of rebuilding Balance Sheets. The debt problem is where the government continues to pile on debt. The fed needs to be a little bit more aggressive and looking forward, not reacting to what is happening right now. Tom the bear market we are in is 3 on the s p 500. It is terrible. We are all going to die. Vonnie over the weekend there was a lot of focus on to medication and the fed, how it may be confusing markets, reacting quickly to markets, and vice versa. What you said is not the feds mandate. The fed does not have to worry about comedy performance, it has to worry about Financial Stability and growth. Perspective. Down 3 is nothing. 3 ,re so reactive to down down 4 and what about these bigger moves . We continue to think that the august hold back the august pullback, everybody wants to see this thing go down and we continue to try to guess where the top is. Tom some houses are reducing their earnings out six months, 12 months. As a general rule, is a crew like you hide the earnings growth, or will they pull down those earnings estimates . Brian the majority of estimates usually come down around this time, and then people crank out the 2016 forecast we tend to do that later in october and november when we get a later field for what